Document:

Exhibit 4.01

 

NEURALSTEM, INC.

 

AMENDED AND RESTATED 

INDUCEMENT AWARD

STOCK OPTION PLAN

SECTION 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS

The name of the plan is the Neuralstem,
Inc. Inducement Award Stock Option Plan (the “Plan”). The purpose of the Plan is to provide non-qualified stock
options to individuals not previously employees or non-employee directors of Neuralstem, Inc. (the “Company”)
(or following such individuals’ bona fide period of non-employment with the Company), as an inducement material to the individuals’
entry into employment with the Company within the meaning of Rule 5635(c)(4) of the NASDAQ Listing Rules. It is anticipated that
providing such persons with a direct stake in the Company’s welfare will assure a closer identification of their interests
with those of the Company and its stockholders, thereby stimulating their efforts on the Company’s behalf and strengthening
their desire to remain with the Company.

The following terms shall be defined as
set forth below:

“Act” means the Securities
Act of 1933, as amended, and the rules and regulations thereunder.

“Administrator” means
either the Board or the compensation committee of the Board or a similar committee performing the functions of the compensation
committee and which is comprised of not less than two Non-Employee Directors who are independent.

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

“Code” means the Internal
Revenue Code of 1986, as amended, and any successor Code, and related rules, regulations and interpretations.

“Covered Employee”
means an employee who is a “Covered Employee” within the meaning of Section 162(m) of the Code.

“Effective Date” means
February 15, 2016.

“Eligible Individual”
means any individual who was not previously an employee or a non-employee director of the Company or any of its Subsidiaries (or
who has had a bona fide period of non-employment with the Company and its Subsidiaries) who is hired by the Company or one of its
Subsidiaries.

 

“Exchange Act” means the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder.

“Fair Market Value”
of the Stock on any given date means the fair market value of the Stock determined in good faith by the Administrator; provided,
however, that if the Stock is admitted to quotation on the National Association of Securities Dealers Automated Quotation System
(“NASDAQ”), NASDAQ Capital Market or another national securities exchange, the determination shall be made by
reference to market quotations. If there are no market quotations for such date, the determination shall be made by reference to
the last date preceding such date for which there are market quotations; provided further, however, that if the date for which
Fair Market Value is determined is the first day when trading prices for the Stock are reported on a national securities exchange,
the Fair Market Value shall be the “Price to the Public” (or equivalent) set forth on the cover page for the final
prospectus relating to the Company’s Initial Public Offering.

     

     

    

“Non-Employee Director”
means a member of the Board who is not also an employee of the Company or any Subsidiary.

“Non-Qualified Stock Option”
means a stock option that is not intended to be an “incentive stock option” under Section 422 of the Code.

“Option Certificate”
means a written or electronic document setting forth the terms and provisions applicable to a Non-Qualified Stock Option granted
under the Plan. Each Option Certificate is subject to the terms and conditions of the Plan.

“Sale Event” shall
mean (i) the sale of all or substantially all of the assets of the Company on a consolidated basis to an unrelated person
or entity, (ii) a merger, reorganization or consolidation pursuant to which the holders of the Company’s outstanding
voting power immediately prior to such transaction do not own a majority of the outstanding voting power of the resulting or successor
entity (or its ultimate parent, if applicable) immediately upon completion of such transaction, or (iii) the sale of all of
the Stock of the Company to an unrelated person or entity.

“Sale Price” means
the value as determined by the Administrator of the consideration payable, or otherwise to be received by stockholders, per share
of Stock pursuant to a Sale Event.

“Section 409A” means
Section 409A of the Code and the regulations and other guidance promulgated thereunder.

“Stock” means the common
stock, par value $0.01 per share, of the Company, subject to adjustments pursuant to Section 3.

“Subsidiary” means any corporation or other
entity (other than the Company) in which the Company has at least a fifty (50) percent interest, either directly or indirectly.

 

SECTION 2. ADMINISTRATION OF PLAN; ADMINISTRATOR AUTHORITY
TO SELECT GRANTEES AND DETERMINE NON-QUALIFIED STOCK OPTIONS

(a)        Administration
of Plan. The Plan shall be administered by the Administrator.

(b)        Powers of Administrator.
The Administrator shall have the power and authority to grant Non-Qualified Stock Options consistent with the terms of the Plan,
including the power and authority:

(i)        to select the individuals
to whom Non-Qualified Stock Options may from time to time be granted;

(ii)        to determine the
time or times of grant;

(iii)        to determine the
number of shares of Stock to be covered by Non-Qualified Stock Options;

(iv)        to determine and
modify from time to time the terms and conditions, including restrictions, not inconsistent with the terms of the Plan, of Non-Qualified
Stock Options, which terms and conditions may differ among individual Non-Qualified Stock Options and grantees, and to approve
the form of Option Certificates;

     

     

    

(v)        to accelerate at
any time the exercisability or vesting of all or any portion of Non-Qualified Stock Options;

(vi)        subject to the
provisions of Section 5(b), to extend at any time the period in which a Non-Qualified Stock Option may be exercised; and

(vii)        at
any time to adopt, alter and repeal such rules, guidelines and practices for administration of the Plan and for its own acts and
proceedings as it shall deem advisable; to interpret the terms and provisions of the Plan and any Non-Qualified Stock Option (including
related written instruments); to make all determinations it deems advisable for the administration of the Plan; to decide all disputes
arising in connection with the Plan; and to otherwise supervise the administration of the Plan.

All decisions and interpretations of the
Administrator shall be binding on all persons, including the Company and Plan grantees.

(c)        Delegation
of Authority to Grant Options. Subject to applicable law, the Administrator, in its discretion, may delegate to the Chief Executive
Officer of the Company all or part of the Administrator’s authority and duties with respect to the granting of Non-Qualified
Stock Options. Any such delegation by the Administrator shall include specific limitations as to the number of Non-Qualified Stock
Options that may be granted during the period of the delegation and shall contain specific guidelines as to the number of Non-Qualified
Stock Options that can be made to an Eligible Individual, determination of the exercise price and the vesting criteria. The Administrator
may revoke or amend the terms of a delegation at any time but such action shall not invalidate any prior actions of the Administrator’s
delegate or delegates that were consistent with the terms of the Plan.

 

(d)        Option
Certificate. Non-Qualified Stock Options under the Plan shall be evidenced by Option Certificates that set forth the terms,
conditions and limitations for each Option which may include, without limitation, the term of a Non-Qualified Stock Option and
the provisions applicable in the event employment or service terminates.

(e)        Indemnification.
Neither the Board nor the Administrator, nor any member of either or any delegate thereof, shall be liable for any act, omission,
interpretation, construction or determination made in good faith in connection with the Plan, and the members of the Board and
the Administrator (and any delegate thereof) shall be entitled in all cases to indemnification and reimbursement by the Company
in respect of any claim, loss, damage or expense (including, without limitation, reasonable attorneys’ fees) arising or resulting
therefrom to the fullest extent permitted by law and/or under the Company’s articles or bylaws or any directors’ and
officers’ liability insurance coverage which may be in effect from time to time and/or any indemnification agreement between
such individual and the Company.

(f)        Foreign
Non-Qualified Stock Option Recipients. Notwithstanding any provision of the Plan to the contrary, in order to comply with
the laws in other countries in which the Company and its Subsidiaries operate or have employees or other individuals eligible
for Non-Qualified Stock Options, the Administrator, in its sole discretion, shall have the power and authority to: (i) determine
which Subsidiaries shall be covered by the Plan; (ii) determine which individuals outside the United States are eligible
to participate in the Plan; (iii) modify the terms and conditions of any Non-Qualified Stock Option granted to individuals
outside the United States to comply with applicable foreign laws; (iv) establish subplans and modify exercise procedures
and other terms and procedures, to the extent the Administrator determines such actions to be necessary or advisable (and such
subplans and/or modifications shall be attached to this Plan as appendices); provided, however, that no such subplans and/or modifications
shall increase the share limitations contained in Section 3(a) hereof; and (v) take any action, before or after an Non-Qualified
Stock Option is made, that the Administrator determines to be necessary or advisable to obtain approval or comply with any local
governmental regulatory exemptions or approvals. Notwithstanding the foregoing, the Administrator may not take any actions hereunder,
and no Non-Qualified Stock Options shall be granted, that would violate the Exchange Act or any other applicable United States
securities law, the Code, or any other applicable United States governing statute or law.

     

     

    

SECTION 3. STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION

(a)        Stock
Issuable. The maximum number of shares of Stock reserved and available for issuance under the Plan shall be Six Million (6,000,000)
shares (the “Initial Limit”), subject to adjustment as provided in Section 3(c). For purposes of this limitation,
the shares of Stock underlying any Non-Qualified Stock Options that are forfeited, canceled, held back upon exercise of a Non-Qualified
Stock Option or settlement of a Non-Qualified Stock Option to cover the exercise price or tax withholding, reacquired by the Company
prior to vesting, satisfied without the issuance of Stock or otherwise terminated (other than by exercise) shall be added back
to the shares of Stock available for issuance under the Plan. In the event the Company repurchases shares of Stock on the open
market, such shares shall not be added to the shares of Stock available for issuance under the Plan. The shares available for issuance
under the Plan may be authorized but unissued shares of Stock or shares of Stock reacquired by the Company.

 

(b)        Changes
in Stock. Subject to Section 3(c) hereof, if, as a result of any reorganization, recapitalization, reclassification, stock
dividend, stock split, reverse stock split or other similar change in the Company’s capital stock, the outstanding shares
of Stock are increased or decreased or are exchanged for a different number or kind of shares or other securities of the Company,
or additional shares or new or different shares or other securities of the Company or other non-cash assets are distributed with
respect to such shares of Stock or other securities, or, if, as a result of any merger or consolidation, sale of all or substantially
all of the assets of the Company, the outstanding shares of Stock are converted into or exchanged for securities of the Company
or any successor entity (or a parent or subsidiary thereof), the Administrator shall make an appropriate or proportionate adjustment
in (i) the maximum number of shares reserved for issuance under the Plan, (ii) the number and kind of shares or other
securities subject to any then outstanding Non-Qualified Stock Options under the Plan, and (iii) the exercise price for each
share subject to any then outstanding Non-Qualified Stock Options, without changing the aggregate exercise price (i.e., the exercise
price multiplied by the number of Non-Qualified Stock Options) as to which such Non-Qualified Stock Options remain exercisable.
The Administrator shall also make equitable or proportionate adjustments in the number of shares subject to outstanding Non-Qualified
Stock Options and the exercise price and the terms of outstanding Non-Qualified Stock Options to take into consideration cash dividends
paid other than in the ordinary course or any other extraordinary corporate event. The adjustment by the Administrator shall be
final, binding and conclusive. No fractional shares of Stock shall be issued under the Plan resulting from any such adjustment,
but the Administrator in its discretion may make a cash payment in lieu of fractional shares.

(c)        Mergers
and Other Transactions. Except as the Administrator may otherwise specify with respect to particular Non-Qualified Stock Options
in the relevant Option Certificate, in the case of and subject to the consummation of a Sale Event, all Non-Qualified Stock Options
that are not exercisable immediately prior to the effective time of the Sale Event shall become fully exercisable as of the effective
time of the Sale Event unless the parties to the Sale Event agree that Non-Qualified Stock Options will be assumed or continued
by the successor entity. Upon the effective time of the Sale Event, the Plan and all outstanding Non-Qualified Stock Options granted
hereunder shall terminate, unless provision is made in connection with the Sale Event in the sole discretion of the parties thereto
for the assumption or continuation of Non-Qualified Stock Options theretofore granted by the successor entity, or the substitution
of such Non-Qualified Stock Options with new Non-Qualified Stock Options of the successor entity or parent thereof, with appropriate
adjustment as to the number and kind of shares and, if appropriate, the per share exercise prices, as such parties shall agree
(after taking into account any acceleration hereunder). In the event of such termination, (i) the Company shall have the option
(in its sole discretion) to make or provide for a cash payment to the grantees holding Non-Qualified Stock Options, in exchange
for the cancellation thereof, in an amount equal to the difference between (A) the Sale Price multiplied by the number of
shares of Stock subject to outstanding Non-Qualified Stock Options (to the extent then exercisable (after taking into account any
acceleration hereunder) at prices not in excess of the Sale Price) and (B) the aggregate exercise price of all such outstanding
Non-Qualified Stock Options; or (ii) each grantee shall be permitted, within a specified period of time prior to the consummation
of the Sale Event as determined by the Administrator, to exercise all outstanding Non-Qualified Stock Options held by such grantee,
including those that will become exercisable upon the consummation of the Sale Event; provided, however, that the exercise of the
Non-Qualified Stock Options not exercisable prior to the Sale Event shall be subject to the consummation of the Sale Event.

     

     

    

(d)        Substitute
Non-Qualified Stock Options. The Administrator may grant Non-Qualified Stock Options under the Plan in substitution for stock
and stock based awards held by employees, directors or other key persons of another corporation in connection with the merger
or consolidation of the employing corporation with the Company or a Subsidiary or the acquisition by the Company or a Subsidiary
of property or stock of the employing corporation. The Administrator may direct that the substitute awards be granted on such
terms and conditions as the Administrator considers appropriate in the circumstances. Any substitute Non-Qualified Stock Options
granted under the Plan shall not count against the share limitation set forth in Section 3(a).

SECTION 4. ELIGIBILITY

Grantees under the Plan will be such Eligible
Individuals as are selected from time to time by the Administrator in its sole discretion.

SECTION 5.NON-QUALIFIED STOCK OPTIONS

Any Non-Qualified Stock Option granted
under the Plan shall be in such form as the Administrator may from time to time approve. Non-Qualified Stock Options granted pursuant
to this Plan shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Administrator shall deem desirable.

(a)        Exercise
Price. The exercise price per share for the Stock covered by a Non-Qualified Stock Option shall be determined by the Administrator
at the time of grant but shall not be less than one hundred (100) percent of the Fair Market Value on the date of grant.

(b)        Option
Term. The term of each Non-Qualified Stock Options shall be fixed by the Administrator, but no Stock Option shall be exercisable
more than ten years after the date the Stock Option is granted.

(c)        Exercisability;
Rights of a Stockholder. Non-Qualified Stock Options shall become exercisable at such time or times, whether or not in installments,
as shall be determined by the Administrator at or after the grant date. The Administrator may at any time accelerate the exercisability
of all or any portion of any Non-Qualified Stock Option. A grantee shall have the rights of a stockholder only as to shares acquired
upon the exercise of a Non-Qualified Stock Option and not as to unexercised Non-Qualified Stock Options.

     

     

    

(d)        Method
of Exercise. Non-Qualified Stock Options may be exercised in whole or in part, by giving written or electronic notice of exercise
to the Company, specifying the number of shares to be purchased. Payment of the purchase price may be made by one or more of the
following methods to the extent provided in the Option Certificate:

 

(i)        In cash,
by certified or bank check or other instrument acceptable to the Administrator;

(ii)        Through
the delivery (or attestation to the ownership) of shares of Stock that have been purchased by the grantee on the open market or
that have been beneficially owned by the grantee for at least six months and that are not then subject to restrictions under any
Company plan. Such surrendered shares shall be valued at Fair Market Value on the exercise date;

(iii)        By
the grantee delivering to the Company a properly executed exercise notice together with irrevocable instructions to a broker to
promptly deliver to the Company cash or a check payable and acceptable to the Company for the purchase price; provided that in
the event the grantee chooses to pay the purchase price as so provided, the grantee and the broker shall comply with such procedures
and enter into such agreements of indemnity and other agreements as the Administrator shall prescribe as a condition of such payment
procedure; or

(iv)        By
a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Stock issuable upon
exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price.

Payment instruments will be received subject to collection.
The transfer to the grantee on the records of the Company or of the transfer agent of the shares of Stock to be purchased pursuant
to the exercise of a Non-Qualified Stock Option will be contingent upon receipt from the grantee (or a purchaser acting in his
stead in accordance with the provisions of the Non-Qualified Stock Option) by the Company of the full purchase price for such
shares and the fulfillment of any other requirements contained in the Option Certificate or applicable provisions of laws (including
the satisfaction of any withholding taxes that the Company is obligated to withhold with respect to the grantee). In the event
a grantee chooses to pay the purchase price by previously-owned shares of Stock through the attestation method, the number of
shares of Stock transferred to the grantee upon the exercise of the Non-Qualified Stock Option shall be net of the number of attested
shares. In the event that the Company establishes, for itself or using the services of a third party, an automated system for
the exercise of Non-Qualified Stock Options, such as a system using an internet website or interactive voice response, then the
paperless exercise of Non-Qualified Stock Options may be permitted through the use of such an automated system.

SECTION 6. TRANSFERABILITY

(a)        Transferability.
Except as provided in Section 6(b) below, during a grantee’s lifetime, his or her Non-Qualified Stock Options shall
be exercisable only by the grantee, or by the grantee’s legal representative or guardian in the event of the grantee’s
incapacity. No Non-Qualified Stock Options shall be sold, assigned, transferred or otherwise encumbered or disposed of by a grantee
other than by will or by the laws of descent and distribution or pursuant to a domestic relations order. No Non-Qualified Stock
Options shall be subject, in whole or in part, to attachment, execution, or levy of any kind, and any purported transfer in violation
hereof shall be null and void.

 

     

     

    

(b)        Administrator
Action. Notwithstanding Section 6(a), the Administrator, in its discretion, may provide either in the Option Certificate
regarding a given Non-Qualified Stock Option or by subsequent written approval that the grantee may transfer his or her Non-Qualified
Stock Options to his or her immediate family members, to trusts for the benefit of such family members, or to partnerships in which
such family members are the only partners, provided that the transferee agrees in writing with the Company to be bound by all of
the terms and conditions of this Plan and the applicable Non-Qualified Stock Option. In no event may a Non-Qualified Stock Option
be transferred by a grantee for value.

(c)        Family
Member. For purposes of Section 6(b), “family member” shall mean a grantee’s child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the grantee’s household (other than
a tenant of the grantee), a trust in which these persons (or the grantee) have more than 50 percent of the beneficial interest,
a foundation in which these persons (or the grantee) control the management of assets, and any other entity in which these persons
(or the grantee) own more than 50 percent of the voting interests.

(d)       
Designation of Beneficiary. Each grantee to whom a Non-Qualified Stock Option has been made under the Plan may designate
a beneficiary or beneficiaries to exercise any Non-Qualified Stock Option or receive any payment under any Non-Qualified Stock
Option payable on or after the grantee’s death. Any such designation shall be on a form provided for that purpose by the
Administrator and shall not be effective until received by the Administrator. If no beneficiary has been designated by a deceased
grantee, or if the designated beneficiaries have predeceased the grantee, the beneficiary shall be the grantee’s estate.

SECTION 7. TAX WITHHOLDING

(a)        Payment
by Grantee. Each grantee shall, no later than the date as of which the value of a Non-Qualified Stock Option or of any Stock
or other amounts received thereunder first becomes includable in the gross income of the grantee for Federal income tax purposes,
pay to the Company, or make arrangements satisfactory to the Administrator regarding payment of, any Federal, state, or local taxes
of any kind required by law to be withheld by the Company with respect to such income. The Company and its Subsidiaries shall,
to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the grantee.
The Company’s obligation to deliver evidence of book entry (or stock certificates) to any grantee is subject to and conditioned
on tax withholding obligations being satisfied by the grantee.

(b)        Payment
in Stock. Subject to approval by the Administrator, a grantee may elect to have the Company’s minimum required tax withholding
obligation satisfied, in whole or in part, by authorizing the Company to withhold from shares of Stock to be issued pursuant to
any Non-Qualified Stock Option a number of shares with an aggregate Fair Market Value (as of the date the withholding is effected)
that would satisfy the withholding amount due.

 

     

     

    

SECTION 8. SECTION 409A AWARDS

To the extent that any Non-Qualified
Stock Option is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A
(a “409A Award ”), the Non-Qualified Stock Option shall be subject to such additional rules and requirements
as specified by the Administrator from time to time in order to comply with Section 409A. In this regard, if any amount under
a 409A Award is payable upon a “separation from service” (within the meaning of Section 409A) to a grantee who
is then considered a “specified employee” (within the meaning of Section 409A), then no such payment shall be
made prior to the date that is the earlier of (i) six months and one day after the grantee’s separation from service,
or (ii) the grantee’s death, but only to the extent such delay is necessary to prevent such payment from being subject
to interest, penalties and/or additional tax imposed pursuant to Section 409A. Further, the settlement of any such Non-Qualified
Stock Option may not be accelerated except to the extent permitted by Section 409A.

SECTION 9. TRANSFER, LEAVE OF ABSENCE,
ETC.

For purposes of the Plan, the following events shall not be
deemed a termination of employment:

(a)        a
transfer to the employment of the Company from a Subsidiary or from the Company to a Subsidiary, or from one Subsidiary to another;
or

(b)        an
approved leave of absence for military service or sickness, or for any other purpose approved by the Company, if the employee’s
right to re-employment is guaranteed either by a statute or by contract or under the policy pursuant to which the leave of absence
was granted or if the Administrator otherwise so provides in writing.

SECTION 10. AMENDMENTS AND TERMINATION

The Board may, at any time, amend or discontinue
the Plan and the Administrator may, at any time, amend or cancel any outstanding Non-Qualified Stock Option for the purpose of
satisfying changes in law or for any other lawful purpose, but no such action shall adversely affect rights under any outstanding
Non-Qualified Stock Option without the holder’s consent. Except as provided in Section 3(c) or 3(d), without prior
stockholder approval, in no event may the Administrator exercise its discretion to reduce the exercise price of outstanding Non-Qualified
Stock Options or effect repricing through cancellation and re-grants or cancellation of Non-Qualified Stock Options in exchange
for cash. To the extent required under the rules of any securities exchange or market system on which the Stock is listed, Plan
amendments shall be subject to approval by the Company stockholders entitled to vote at a meeting of stockholders. Nothing in
this Section 10 shall limit the Administrator’s authority to take any action permitted pursuant to Section 3(c)
or 3(d).

SECTION 11. STATUS OF PLAN

With respect to the portion of any Non-Qualified
Stock Option that has not been exercised and any payments in cash, Stock or other consideration not received by a grantee, a grantee
shall have no rights greater than those of a general creditor of the Company unless the Administrator shall otherwise expressly
determine in connection with any Non-Qualified Stock Option or Non-Qualified Stock Options. In its sole discretion, the Administrator
may authorize the creation of trusts or other arrangements to meet the Company’s obligations to deliver Stock or make payments
with respect to Non-Qualified Stock Options hereunder, provided that the existence of such trusts or other arrangements is consistent
with the foregoing sentence.

 

     

     

    

SECTION 12. GENERAL PROVISIONS

(a)        No
Distribution. The Administrator may require each person acquiring Stock pursuant to a Non-Qualified Stock Option to represent
to and agree with the Company in writing that such person is acquiring the shares without a view to distribution thereof.

(b)        Delivery
of Stock Certificates. Stock certificates to grantees under this Plan shall be deemed delivered for all purposes when the Company
or a stock transfer agent of the Company shall have mailed such certificates in the United States mail, addressed to the grantee,
at the grantee’s last known address on file with the Company. Uncertificated Stock shall be deemed delivered for all purposes
when the Company or a Stock transfer agent of the Company shall have given to the grantee by electronic mail (with proof of receipt)
or by United States mail, addressed to the grantee, at the grantee’s last known address on file with the Company, notice
of issuance and recorded the issuance in its records (which may include electronic “book entry” records). Notwithstanding
anything herein to the contrary, the Company shall not be required to issue or deliver any certificates evidencing shares of Stock
pursuant to the exercise of any Non-Qualified Stock Option, unless and until the Administrator has determined, with advice of counsel
(to the extent the Administrator deems such advice necessary or advisable), that the issuance and delivery of such certificates
is in compliance with all applicable laws, regulations of governmental authorities and, if applicable, the requirements of any
exchange on which the shares of Stock are listed, quoted or traded. All Stock certificates delivered pursuant to the Plan shall
be subject to any stop-transfer orders and other restrictions as the Administrator deems necessary or advisable to comply with
federal, state or foreign jurisdiction, securities or other laws, rules and quotation system on which the Stock is listed, quoted
or traded. The Administrator may place legends on any Stock certificate to reference restrictions applicable to the Stock. In addition
to the terms and conditions provided herein, the Administrator may require that an individual make such reasonable covenants, agreements,
and representations as the Administrator, in its discretion, deems necessary or advisable in order to comply with any such laws,
regulations, or requirements. The Administrator shall have the right to require any individual to comply with any timing or other
restrictions with respect to the settlement or exercise of any Non-Qualified Stock Option, including a window-period limitation,
as may be imposed in the discretion of the Administrator.

(c)        Stockholder
Rights. Until Stock is deemed delivered in accordance with Section 12(b), no right to vote or receive dividends or any
other rights of a stockholder will exist with respect to shares of Stock to be issued in connection with a Non-Qualified Stock
Option, notwithstanding the exercise of a Non-Qualified Stock Option or any other action by the grantee with respect to a Non-Qualified
Stock Option.

(d)        Other
Compensation Arrangements; No Employment Rights. Nothing contained in this Plan shall prevent the Board from adopting other
or additional compensation arrangements, including trusts, and such arrangements may be either generally applicable or applicable
only in specific cases. The adoption of this Plan and the grant of Non-Qualified Stock Options do not confer upon any employee
any right to continued employment with the Company or any Subsidiary.

(e)        Trading
Policy Restrictions. Option exercises and other Non-Qualified Stock Options under the Plan shall be subject to the Company’s
insider trading policies and procedures, as in effect from time to time.

(f)        Company
Documents and Policies. This Plan and all Non-Qualified Stock Options granted hereunder are subject to the corporate articles
and by-laws of the Company, as they may be amended from time to time, and all other Company policies duly adopted by the Board
or the Administrator and as in effect from time to time regarding the acquisition, ownership or sale of Stock by employees, including
without limitation policies intended to limit the potential for insider trading and to avoid or recover compensation payable or
paid on the basis of inaccurate financial results or statements, employee conduct, and other similar events.

 

     

     

    

SECTION 13. EFFECTIVE DATE OF PLAN

This Plan shall become effective upon the Effective Date.

SECTION
14. GOVERNING LAW

This Plan and all Non-Qualified Stock
Options and actions taken thereunder shall be governed by, and construed in accordance with, the laws of the State of Delaware,
applied without regard to conflict of law principles.

 

DATE APPROVED BY BOARD OF DIRECTORS: February 15, 2016

DATE AMENDED BY BOARD OF DIRECTORS – December 12, 2018Exhibit 10.01

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (this “Agreement”)
is made and entered into as of this 12th day of December 2018, by and between Neuralstem, Inc., a Delaware corporation (the “Company”),
and Kenneth C. Carter (the “Employee”).

 

WITNESSETH :

 

WHEREAS, the Company desires to employ Employee
as its Executive Chairman and Employee desires to accept such employment; and

 

WHEREAS, the Company desires to enter into this
Agreement regarding the terms of Employee’s employment, and Employee desires to enter into this Agreement and to accept the
terms and provisions of such employment, as embodied in this Agreement.

 

NOW, THEREFORE, in consideration of the mutual
covenants, promises, and obligations set forth herein, the parties agree as follows:

 

Section 1. Definitions.

 

(a)       “Accelerated
Equity Benefit” shall have the meaning ascribed to it in Section 7(g)(iii) hereof.

 

(b)       “Accrued
Obligations” shall mean (i) all accrued but unpaid Base Salary through the Date of Termination, (ii) subject to
any conditions contained in this Agreement, all bonuses that have been awarded but remain unpaid as of the Date of Termination,
(iii) any unpaid or unreimbursed expenses incurred in accordance with Sections 4(f) or 6 hereof, and (iii) any
accrued but unused vacation time through the Date of Termination.

 

(c)      
“Base Salary” shall mean the salary provided for in Section 4(a) hereof.

 

(d)      
“Board” shall mean the Board of Directors of the Company.

 

(e)       “Cause”
shall mean (i) Employee’s willful failure (except where due to an incapacity due to physical or mental infirmity), neglect,
or refusal to perform in any material respect, Employee’s duties and responsibilities, (ii) any willful or grossly negligent
act of Employee that has, or could reasonably be expected to have, the effect of injuring the business of the Company or its subsidiaries
in any material respect, (iii) Employee’s conviction of, or plea of guilty or no contest to: (x) a felony, (y) any
material violation of federal or state securities laws or (z) any other criminal charge that has, or could be reasonably expected
to have, a material adverse impact on the performance of Employee’s duties to the Company or otherwise result in material
injury to the business of the Company or its subsidiaries, (iv) the willful commission by Employee of an act of fraud or embezzlement
against the Company or its subsidiaries; (v) any material violation by Employee of the policies of the Company or its subsidiaries
(including, but not limited to, those relating to sexual harassment or business conduct, and those otherwise set forth in the manuals
or statements of policy of the Company or its subsidiaries), that has, or could reasonably be expected to have, the effect of injuring
the business of the Company or its subsidiaries in any material respect, or (vi) Employee’s willful and material breach
of this Agreement or the Confidentiality Agreement.

 

    	 	1	 

     

    

(f)        “Code”
shall mean the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.

 

(g)      
“Common Stock” shall have the meaning ascribed to in in Section 4(d) hereof.

 

(h)       “Common
Stock Equivalents” means any securities of the kind which would entitle the holder thereof to acquire at any time Common
Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time
convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

 

(i)        “Compensation
Committee” means the Company’s compensation committee or a committee serving such function.

 

(j)        “Confidentiality
Agreement” shall mean the Company’s Confidentiality Information and Assignment Agreement attached hereto as Exhibit
B.

 

(k)       “Date
of Termination” shall mean the date on which Employee’s employment as Executive Chairman of the Company terminates.

 

(l)        “Dilutive
Event” means any occurrence of a transaction whereby the Company’s securities are sold for cash in a transaction
for the primary purpose of raising capital. For purposes of clarity, a transaction in connection with the purchase or sale of asset(s)
will not be considered a Dilutive Event.

 

(m)     “Disability”
shall mean any physical or mental disability or infirmity of Employee that prevents the performance of Employee’s duties
for a period of (i) ninety (90) consecutive days or (ii) one hundred twenty (120) non-consecutive days during
any twelve (12) month period. Any question as to the existence, extent, or potentiality of Employee’s Disability upon
which Employee and the Company cannot agree shall be determined by a qualified, independent physician selected by the Company and
approved by Employee or, if applicable, his guardian (which approval shall not be unreasonably withheld). The determination of
any such physician shall be final and conclusive for all purposes of this Agreement.

 

(n)       “Effective
Date” shall mean January 1, 2019.

 

(o)       “Good
Reason” shall mean, without Employee’s consent, (i) (A) a material diminution in Employee’s duties,
or responsibilities, (B) adverse change in Employee’s title, position, or person or entity to whom Employee reports or (C)
assignment to Employee of duties not commensurate with his position, (ii) a reduction in Base Salary, (iii) a reduction
in the Target Cash Bonus opportunity, but nothing herein shall be interpreted to require the Company to pay any Target Cash Bonus,
as determined pursuant to Section 4(b), (iv) the Company’s failure to obtain an agreement from any successor to the Company
to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform
if no succession had taken place, except where such assumption occurs by operation of law, or (v) any other material breach
of a provision of this Agreement by the Company (other than a provision that is covered by clause (i)-(iv) above) or any other
agreement between Employee and the Company primarily related to Employee’s employment with the Company (including, but not
limited to, any agreement referenced herein). Employee acknowledges and agrees that Employee’s exclusive remedy in the event
of any breach of this Agreement shall be to assert Good Reason pursuant to the terms and conditions of Section 7(e) hereof.
Notwithstanding the foregoing, during the Term, in the event that the Board reasonably believes that Employee may have engaged
in conduct that could constitute Cause hereunder, the Board may, in its reasonable good faith discretion, suspend Employee from
performing Employee’s duties hereunder for a period not to exceed 90 days, and in no event shall any such suspension constitute
an event pursuant to which Employee may terminate employment with Good Reason or otherwise constitute a breach hereunder; provided,
that no such suspension shall alter the Company’s obligations under this Agreement during such period of suspension (including,
but not limited to, payment of Base Salary as set forth in Section 4(a) hereof).

 

    	 	2	 

     

    

(p)       “Inducement
Plan” shall have the meaning ascribed to it in Section 4(d) hereof.

 

(q)       “Inducement
Grant” shall have the meaning ascribed to it in Section 4(d) hereof.

 

(r)        “Payment
Date” shall have the meaning ascribed to it in Section 7(h) hereof.

 

(s)        “Pro
Rata Bonus Payment” shall have the meaning ascribed to it in Section 7(g) hereof.

 

(t)        “Release
of Claims” shall mean a release of claims made by the Employee (or, in the case of Employee’s death or Disability,
a representative with authority to bind the Employee or his estate, as the case may be) in favor of the Company and its subsidiaries
in the form attached hereto as Exhibit A (with any updates reasonably determined by the Company to be necessary to comply
with applicable law) and the execution of which is a condition precedent to Employee’s eligibility for Severance Benefits,
the Accelerated Equity Benefit and the Pro-Rata Bonus Payment, as applicable, in the event his employment is terminated pursuant
to subsection (b), (d), (e), or (g) of Section 7 hereof.

 

(u)       “Severance
Benefits” shall mean continued payment of Base Salary (without proration and at the rate in effect prior to any reduction
giving rise to Good Reason) during the Severance Term, payable in accordance with the Company’s regular payroll practices.

 

(v)       “Severance
Term” shall mean (i) the eighteen (18) month period, which commences on the first day following the Date of
Termination if Employee’s employment is terminated (A) pursuant to subsection (b), (d), or (e) of Section 7 hereof if
such termination occurs within the initial six (6) month period of the Effective Date or (B) pursuant to Section 7(g) hereof,
or (ii) the twelve (12) month period, which commences on the first day following the Date of Termination if Employee’s employment
is terminated pursuant to subsection (b), (d), or (e) of Section 7 hereof if such termination (A) occurs after the initial
six (6) month period following the Effective Date, and (B) immediately before the Date of Termination, Employee’s employment
by the Company was his primary professional obligation and Employee was willing to devote not less than 85% of his professional
time to the affairs of the Company. Notwithstanding the foregoing, no Severance Benefits of any kind shall be due and owed to Employee
if such termination occurs after the twenty-four (24) month anniversary of the Effective Date.

 

(w)      “Signing
Bonus” shall have the meaning ascribed to it in Section 4(e) hereof.

 

(x)       “Target
Cash Bonus” shall have the meaning ascribed to it in Section 4(b) hereof.

 

(y)       “Term”
shall have the meaning ascribed to it in Section 2 hereof.

 

Section 2. Acceptance and Term. Commencing
on the Effective Date, the Company agrees to employ Employee on an at-will basis (subject to the terms of Section
7 hereof), and Employee agrees to accept such employment and serve the Company, in accordance with the terms and conditions set
forth herein. The term of employment shall commence on the Effective Date and continue until terminated by either party at any
time, subject to the provisions herein (referred to herein as the “Term”).

 

Section 3. Position, Duties, and Responsibilities; Place
of Performance.

 

    	 	3	 

     

    

(a)        Position,
Duties, and Responsibilities. During the Term, Employee shall be employed and serve as Executive Chairman of the Company (together
with such other position or positions consistent with Employee’s title or as the Company shall specify from time to time)
and shall have such duties and responsibilities commensurate therewith, and such other duties as may be assigned and/or prescribed
from time to time by the Board or a committee thereof. On the Effective Date, the Board will appoint Employee to serve as a member
of the Board in such class or classes of the Board as determined by the Board. During the Term, the Board will nominate Employee
for election to the Board by the Company’s stockholders; provided that Employee hereby agrees to submit written notice of
resignation of his directorship to the Board, if requested by a majority of the Board, at any time following the Date of Termination.

 

(b)        Performance.
During the Term, Employee will be employed by the Company on a “full-time basis” (which, for purposes of this Agreement,
shall mean that Employee will devote at least 85% of his business time, attention, skill, and best efforts to the performance of
his duties under this Agreement) and shall not engage in any other business, occupation or activity that (x) conflicts with
the interests of the Company, (y) materially interferes with the proper and efficient performance of Employee’s duties
for the Company, or (z) materially interferes with Employee’s exercise of judgment in the Company’s best interests,
with such determination to be made by the Board in its reasonable good faith discretion. Notwithstanding the foregoing, nothing
herein shall preclude Employee from: (i) continuing to serve on existing boards of directors as of the Effective Date, (ii)
performing his Professional Activities (as defined below), or (iii) undertaking other professional or charitable activities
(subject to the restrictions contained in clauses (x), (y) and (z) of this Section 3(b)), with the prior consent and approval of
the Compensation Committee (which shall not be unreasonably withheld or delayed) of non-competing businesses and charitable organizations;
(iv) engaging in charitable activities and community affairs; and (v) managing Employee’s personal investments
and affairs; provided, however, that the activities set out in clauses (i), (ii), (iii), (iv) and (v) herein shall
be limited by Employee so as not to interfere in any material respect, individually or in the aggregate, with the performance of
Employee’s duties and responsibilities hereunder, or pose a conflict of interest or violate any provision of this Agreement
such determinations to be made at the reasonable good faith discretion of the Board. Employee represents that he has provided the
Compensation Committee with a comprehensive list of all outside professional activities with which he is currently involved or
reasonably expects to become involved at the current time (such activities, the “Professional Activities”).
In the event that, during his employment by the Company, the Employee desires to engage in other outside professional activities,
not included on such list, Employee will, prior to engaging in any such activities, first seek written approval from the Compensation
Committee and such approval shall not be unreasonably withheld.

 

Section 4. Compensation.

 

(a)        Base
Salary. In exchange for Employee’s performance of his duties and responsibilities, Employee initially shall be paid an
annual base salary of $395,000 (such annual base salary, as in effect from time to time, “Base Salary”), payable
in accordance with the regular payroll practices of the Company but not less frequently than monthly. The Base Salary shall be
reviewed at least annually by the Board (or a committee thereof), and the Board (or a committee thereof) may, but shall not be
required to, increase the Base Salary during the Term. However, the Base salary may not be decreased and/or deferred during the
Term, unless a pro-rata decrease and / or deferral of all executive employees’ salaries is made following the six (6)-month
anniversary of the Effective Date by the Board in good faith as a result of the financial condition of the Company. All payments
referenced in this Agreement, including the Signing Bonus, are on a gross, pre-tax basis and shall be subject to all applicable
federal, state and local withholding, payroll and other taxes.

 

    	 	4	 

     

    

(b)        Target
Cash Bonus. In addition to the Base Salary, Employee will be eligible to earn an annual target bonus of up to 50% of his Base
Salary (the “Target Cash Bonus”). The Target Cash Bonus will be pro-rated for the initial calendar year of the
Term, with such proration calculated based on the number of days Employee is employed by the Company during such year. The actual
amount of such bonus, if any, will be determined by the Board (or a committee thereof) based upon Company performance and any other
factors that the Board (or a committee thereof), in its reasonable good faith discretion following reasonable consultation with
Employee, deems appropriate. Employee’s achievement of such milestones, as well as the amount of any bonus, shall be determined
by the Board in its reasonable good faith discretion. Bonuses, if any, shall be paid out no later than March 15 of the year
following the applicable bonus year. Except as otherwise provided in Section 7 of this Agreement, Employee must be employed
by or providing services to the Company at the time the bonus is awarded and through the end of the calendar year in which any
bonus may be earned in order to be eligible for any such payment.

 

(c)       Annual
Stock Option Award. In addition to the Base Salary and Target Cash Bonus, Employee will be eligible to receive an annual market
based stock option grant (the “Annual Stock Option Grant”) issued pursuant to the terms of one of the Company’s
equity compensation plans. The actual amount of such grant, if any, will be determined by the Board (or a committee thereof) based
upon Company performance and any other factors that the Board (or a committee thereof), in its reasonable good faith discretion,
deems appropriate. Employee’s achievement of such milestones, as well as the amount of any Annual Stock Option Grant, if
any, shall be determined by the Board (or a committee thereof) in its reasonable good faith discretion. In connection with such
grants, the Employee shall enter into the Company’s standard stock option agreement which will incorporate the vesting schedule
and other terms as determined by the Board (or a committee thereof).

 

(d)        Inducement
Grant. On the day following the Effective Date, the Company will grant Employee an option to purchase an aggregate of 800,000
shares of the Company’s common stock, $0.01 par value per share (the “Common Stock”), issued pursuant
to the Company’s Inducement Award Stock Option Plan (the “Inducement Plan”) and subject to the terms and
conditions set forth herein and the form of Non-Qualified Stock Option Agreement made available to Employee (such agreement, the
“Inducement Agreement” and such grant, the “Inducement Grant”); provided, that the
Inducement Agreement shall reference this Agreement and expressly provide that, in the event of a conflict between the Inducement
Agreement and this Agreement, this Agreement shall control. Of the options subject to in the Inducement Grant, 400,000 options
shall be subject only to time-based vesting (in accordance with the terms of the Inducement Plan, this Section 4(b), Section 7
hereof, and the Inducement Agreement), and will vest as follows: (i) 200,000 options will vest on the Effective Date; (ii) 100,000
options will vest on the six (6) month anniversary of the Effective Date; and (iii) 100,000 options will vest on the two (2)
year anniversary of the Effective Date; provided, however, that, except as otherwise provided in this Section 4(d) or Section 7
hereof, Employee must remain continuously employed on a full-time basis through the applicable vesting dates. The remaining 400,000
options subject to the Inducement Grant will vest upon the achievement of certain performance-based milestones within a six (6)
to twelve (12) month period following the Effective Date and to be mutually agreed upon by Employee and the Compensation Committee
no later than February 11, 2019, except as otherwise provided in this Section 4(d) or Section 7 hereof. The Inducement Grant will
be subject to the terms set forth the Inducement Agreement, the terms of the Inducement Plan, this Section 4(d), Section 7 hereof,
and any other restrictions and limitations generally applicable to the Common Stock of the Company or equity awards held by similarly
situated employees of the Company or otherwise imposed by law. Notwithstanding anything contained in this Agreement, the Inducement
Plan or the Inducement Agreement to the contrary, provided Employee is employed on a full-time basis immediately prior to any Sale
Event, any outstanding portion of the Inducement Grant that is not vested and exercisable immediately prior to the consummation
of a Sale Event (as defined in the Inducement Plan) shall become fully vested and exercisable as of the consummation of such Sale
Event. For a period of twelve (12) months following the Effective Date (subject to Employee being employed on a full-time basis
as the Company’s Executive Chairman immediately prior to the Dilutive Event), upon the occurrence of a Dilutive Event, the
number of securities comprising the Inducement Grant will be increased by such number and like kind of securities as required to
make the securities underlying the Inducement Grant equal to same percentage of the issued and outstanding shares of Common Stock,
taking into account the conversion of any Common Stock Equivalents and the issuance of securities pursuant to the Dilutive Event,
as they represented immediately prior to the Dilutive Event.

 

    	 	5	 

     

    

(e)       Signing
Bonus. On the Effective Date, Employee will be paid a one-time signing bonus of $20,000 (“Signing Bonus”).

 

(f)       Agreement
Expense Reimbursement/Annual Tax and Financial Planning Stipend. The Company agrees to pay Employee’s reasonable legal,
accounting and other expenses incurred in connection with the negotiation, drafting and execution of this Agreement, any agreements
ancillary to this Agreement, and any separation arrangements with Employee’ prior employer; provided, that the aggregate
amount of the expenses to be reimbursed shall not exceed $35,000 in the aggregate. During the Term, the Company will, subject to
the receipt of appropriate documentation, reimburse Employee up to $5,000 on an annual basis for Employee’s actual out of
pocket costs spent on tax and financial planning, prorated for any partial year of employment.

 

Section 5. Employee Benefits. During
the Term, Employee shall be eligible to participate in health insurance and other benefits provided generally to similarly situated
employees of the Company, subject to the terms and conditions of the applicable benefit plans (which shall govern). In addition
to holidays recognized by the Company, Employee also shall receive four (4) weeks of paid vacation per year, prorated for
any partial year of employment, of which up to two (2) weeks may roll-over year to year for a maximum of six (6) weeks at any given
time. Nothing contained herein shall be construed to limit the Company’s ability to amend, suspend, or terminate any employee
benefit plan or policy at any time without providing Employee notice, and the right to do so is expressly reserved.

 

Section 6. Reimbursement of Business
Expenses. During the Term, the Company shall pay (or promptly reimburse Employee) for documented, out-of-pocket expenses reasonably
incurred by Employee in the course of performing his duties and responsibilities hereunder, which are consistent with the Company’s
policies in effect and as amended from time to time, with respect to business expenses, subject to the Company’s requirements
with respect to documentation and reporting of such expenses.

 

Section 7. Termination of Employment.

 

(a)        General.
Employee’s employment with the Company shall terminate upon the earliest to occur of: (i) Employee’s death, (ii) a
termination by reason of Employee’s Disability, (iii) a termination by the Company with or without Cause, or (iv) a
termination by Employee with or without Good Reason.

 

(b)        Termination
Due to Death or Disability. Employee’s employment under this Agreement shall terminate automatically upon Employee’s
death. The Company also may terminate Employee’s employment immediately upon the occurrence of a Disability, such termination
to be effective upon Employee’s receipt of written notice of such termination. In the event of Employee’s termination
as a result of Employee’s death or Disability, except as otherwise provided in Section 7(g), and conditioned upon Employee
providing at least ninety (90) calendar days of service during the Term, Employee’s or Employee’s estates or beneficiaries,
as the case may be, shall be entitled to the same payments and benefits as provided in Section 7(d) hereof, subject to the same
conditions on payment and benefits as described in Section 7(d) hereof. Employee shall have no further rights to any compensation
or any other benefits under this Agreement. In the event that Employee’s termination occurs as a result of a death or Disability
prior to ninety (90) calendar days of service during the Term, Employee’s estates or beneficiaries, as the case may be, shall
be entitled solely to the Accrued Obligations.

 

    	 	6	 

     

    

(c)        Termination by the
Company with Cause.

 

(i)        The
Company may terminate Employee’s employment at any time with Cause, effective upon Employee’s receipt of written notice
of such termination; provided, however, that with respect to any Cause termination relying on clause (i), (ii), (v),
or (vi) of the definition of Cause set forth in Section 1(e) hereof, to the extent that such act or acts or failure or
failures to act are curable, as determined by the Board in its reasonable good faith discretion, Employee shall be given thirty
(30) days’ written notice by the Company of its intention to terminate his employment with Cause, such notice to state
the act or acts or failure or failures to act that constitute the grounds on which the proposed termination with Cause is based,
and such termination shall be effective at the expiration of such thirty (30) day notice period unless Employee has fully
cured such act or acts or failure or failures to act, to the Board’s reasonable satisfaction, that give rise to Cause during
such period.

 

(ii)        In
the event that the Company terminates Employee’s employment with Cause, Employee shall be entitled only to the Accrued Obligations.
Following such termination of Employee’s employment with Cause, except as set forth in this Section 7(c)(ii) or as otherwise
provided in Section 7(g), Employee shall have no further rights to any compensation or any other benefits under this Agreement.
For the avoidance of doubt, Employee’s sole and exclusive remedy upon a termination of employment by the Company with Cause
shall be receipt of the Accrued Obligations.

 

(d)        Termination
by the Company without Cause. The Company may terminate Employee’s employment at any time without Cause, effective upon
Employee’s receipt of written notice of such termination. In the event that Employee’s employment is terminated by
the Company without Cause (other than due to death or Disability) and provided that he fully executes and does not revoke an effective
Release of Claims as described in Section 7(h), Employee shall be entitled to:

 

		(i)	The Accrued Obligations;

 

		(ii)	The Severance Benefits;

 

		(iii)	The Accelerated Equity Benefit; and

 

		(iv)	The Pro Rata Bonus Payment.

 

Notwithstanding the foregoing, the Severance Benefits shall immediately
terminate, and the Company shall have no further obligations to Employee with respect thereto, in the event that Employee is found
by a court of competent jurisdiction to have breached this Agreement, any provision of the Confidentiality Agreement or the Release
of Claims. Any such termination of payment or benefits shall have no effect on the Release of Claims or any of Employee’s
post-employment obligations to the Company. Following such termination of Employee’s employment by the Company without Cause,
except as set forth in this Section 7(d) or Section 7(g), Employee shall have no further rights to any compensation or
any other benefits under this Agreement. For the avoidance of doubt, except as otherwise provided in Section 7(g), Employee’s
sole and exclusive remedy upon a termination of employment by the Company without Cause shall be receipt of (i) the Severance
Benefits, the Accelerated Equity Benefit, and the Pro Rata Bonus Payment, in each case, subject to his execution of the Release
of Claims, and (ii) the Accrued Obligations. If the Company makes overpayments of Severance Benefits, Employee promptly shall
return any such overpayments to the Company and/or hereby authorizes deductions from future Severance Benefit amounts so long as
such deduction does not violate Section 409A of the Code.

 

    	 	7	 

     

    

(e)        Termination
by Employee with Good Reason. Employee may terminate his employment with Good Reason by providing the Company at least thirty
(30) days’ written notice setting forth in reasonable specificity the event that constitutes Good Reason, which written
notice, to be effective, must be provided to the Company on the later of: (i) within thirty (30) days of the occurrence of
such event or (ii) promptly upon Employee’s actual knowledge of such event. During such notice period, the Company shall
have a cure right (if curable), and if not cured to the Employee’s reasonable satisfaction within such period, Employee’s
termination will be effective upon the expiration of such cure period, and Employee shall be entitled to the same payments and
benefits as provided in Section 7(d) hereof, subject to the same conditions on payment and benefits as described in Section 7(d)
hereof. Following such termination of Employee’s employment by Employee with Good Reason, except as set forth in this Section 7(e)
or as otherwise provided in Section 7(g) or under any Company benefit plan (other than severance plans that are broad based),
Employee shall have no further rights to any compensation or any other benefits under this Agreement. For the avoidance of doubt,
except as otherwise provided in Section 7(g) or under any Company benefit plan (other than severance plans that are broad
based), Employee’s sole and exclusive remedy upon a termination of employment with Good Reason shall be receipt of (A) the
Severance Benefits, the Accelerated Equity Benefit, and the Pro Rata Bonus Payment, in each case, subject to his execution of the
Release of Claims, and (B) the Accrued Obligations.

 

(f)        Termination
by Employee without Good Reason. Employee may terminate his employment without Good Reason by providing the Company at least
sixty (60) days’ written notice of such termination. In the event of a termination of employment by Employee under this
Section 7(f), Employee shall be entitled only to the Accrued Obligations. In the event of termination of Employee’s
employment under this Section 7(f), the Company may, in its sole and absolute discretion, by written notice accelerate such
date of termination without changing the characterization of such termination as a termination by Employee without Good Reason.
Following such termination of Employee’s employment by Employee without Good Reason, except as set forth in this Section 7(f)
or as otherwise provided in Section 7(g) or under any Company benefit plan (other than severance plans that are broad based),
Employee shall have no further rights to any compensation or any other benefits under this Agreement. For the avoidance of doubt,
except as otherwise provided in Section 7(g) or under any Company benefit plan (other than severance plans that are broad
based), Employee’s sole and exclusive remedy upon a termination of employment by Employee without Good Reason shall be receipt
of the Accrued Obligations.

 

(g) Termination following a Sale Event or Change
in Control. In the event Employee’s employment is terminated within eighteen (18) months following a “Sale
Event” or “Change in Control” (using the most expansive meaning given to such terms in the Inducement Plan or
the Company’s incentive equity plans, pursuant to which any applicable equity grants have been made to Employee, as the case
may be): (a) by the Company for any reason other than as a result of a with Cause termination, as defined in Section 1(e)
hereof, or (b) by Employee with Good Reason pursuant to Section 7(e), Employee shall be entitled to (in lieu of, and
not in addition to, any payments described in Sections 7(b), (c), (d), or (e) of this Agreement):

 

		(i)	The Accrued Obligations;

 

(ii)            
The Severance Benefits, if Employee would otherwise be eligible for such Severance Benefits, provided that he fully executes and
does not revoke an effective Release of Claims as described in Section 7(h) and continues to comply with the Confidentiality
Agreement;

 

(iii)          
To the extent not otherwise accelerated and vested in connection with a Sale Event or Change in Control in accordance with the
Inducement Plan or other applicable incentive equity plan, acceleration of the vesting of 100% of Employee’s then outstanding
unvested equity awards, such that all unvested equity awards then held by Employee shall vest and become fully exercisable or non-forfeitable
as of the Date of Termination (the “Accelerated Equity Benefit”), in which case Employee shall have ninety (90) days
from the Date of Termination to exercise the vested equity awards (as applicable); and

 

    	 	8	 

     

    

(iv)        payment
of a pro rata portion of Employee’s Target Cash Bonus for the year in which the Date of Termination occurs, the proration
of which is calculated based on the number of days he is employed by the Company in the year of the Date of Termination and based
upon the determination by the Board, in its reasonable good faith discretion, of the achievement of the Employee’s goals
and objectives pursuant to Section 4(b) of this Agreement after adjusting such goals and objectives as necessary and appropriate
based on the shortened performance period (the “Pro Rata Bonus Payment”).

 

Notwithstanding the foregoing, the Severance Benefits shall immediately
terminate, and the Company shall have no further obligations to Employee with respect thereto, in the event that Employee is found
by a court of competent jurisdiction to have breached this Agreement, any provision of the Confidentiality Agreement or the Release
of Claims. Any such termination of payment or benefits shall have no effect on the Release of Claims or any of Employee’s
post-employment obligations to the Company. If the Company makes overpayments of Severance Benefits, Employee promptly shall return
any such overpayments to the Company and/or hereby authorizes deductions from future Severance Benefit amounts.

 

(h)        Release.
Notwithstanding any provision herein to the contrary, the payment of the Severance Benefits and the Pro Rata Bonus Payment, and
the provision of the Accelerated Equity Benefit, pursuant to subsection (b), (d), (e) or (g) of this Section 7,
shall be conditioned upon Employee’s execution, delivery to the Company, and non-revocation of the Release of Claims (and
the expiration of any revocation period contained in such Release of Claims) in accordance with the time limits set forth therein
(and, in all events, within sixty (60) days following the Date of Termination); provided, that, in the case of Employee’s
death or Disability, such actions shall be taken by a representative with authority to bind Employee or, if applicable, his estate
(as determined in the Company’s reasonable good faith discretion). If Employee or his representative fails to execute the
Release of Claims in such a timely manner, or timely revokes acceptance of such release following its execution, Employee and his
estate or beneficiaries shall not be entitled to any of the Severance Benefits, the Pro Rata Bonus Payment, or the Accelerated
Equity Benefit. Payment of the Severance Benefits will commence on the first regular Company payday that is at least five (5) business
days following the date the Company receives a timely, effective and non-revocable Release of Claims (the “Payment Date”);
provided, however, that the first payment will be retroactive to the day immediately following the Date of Termination.
Payment of the Pro Rata Bonus Payment will also be made on the Payment Date. Notwithstanding the foregoing, to the extent that
any portion of the Severance Benefits or Pro Rata Bonus Payment constitutes “non-qualified deferred compensation” subject
to Section 409A of the Code, any payment of such portion scheduled to occur prior to the sixtieth (60th) day following
the date of Employee’s termination of employment hereunder, but for the condition on executing the Release of Claims as set
forth herein, shall not be made until the first regularly scheduled payroll date following such sixtieth (60th) day unless
otherwise permitted by Section 409A of the Code, after which any remaining such benefits shall thereafter be provided to Employee
according to the applicable schedule set forth herein.

 

Section 8. Confidentiality Agreement; Cooperation.

 

(a)        Confidentiality
Agreement. As a condition of Employee’s employment with the Company under the terms of this Agreement, Employee has executed
and delivered to the Company a Confidentiality Agreement. The parties hereto acknowledge and agree that this Agreement and the
Confidentiality Agreement shall be considered separate contracts. In addition, Employee represents and warrants that he shall be
able to and will perform the duties of this position without utilizing any confidential and/or proprietary information that Employee
may have obtained in connection with employment with any prior employer, and that he shall not (i) disclose any such information
to the Company, or (ii) induce any Company employee to use any such information, in either case in violation of any confidentiality
obligation, whether by agreement or otherwise.

 

    	 	9	 

     

    

(b)        Litigation
and Regulatory Cooperation. During and after Employee’s employment, Employee shall cooperate fully with the Company in
the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf
of the Company which relate to events or occurrences that transpired while the Company employed Employee, provided, that the Employee
will not have an obligation under this paragraph with respect to any claim in which the Employee has filed directly against the
Company or related persons or entities or if such cooperation would be materially adverse to his own legal interests. The Employee’s
full cooperation in connection with such claims or actions shall include, but not be limited to, being available to meet with counsel
to prepare for discovery or trial and to act as a witness on behalf of the Company at mutually convenient times. During and after
Employee’s employment, Employee also shall cooperate fully with the Company in connection with any investigation or review
of any federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpired
while Employee was employed by the Company, provided Employee will not have any obligation under this paragraph with respect to
any claim in which Employee has filed directly against the Company or related persons or entities. The Company shall reimburse
Employee for any reasonable out-of-pocket expenses incurred in connection with Employee’s performance of obligations pursuant
to this Section 8(b).

 

Section 9. Taxes. The Company may withhold
from any payments made under this Agreement all applicable taxes, including but not limited to income, employment, and social insurance
taxes, as shall be required by law. Employee acknowledges and represents that the Company has not provided any tax advice to him
in connection with this Agreement and that Employee has been advised by the Company to seek tax advice from Employee’s own
tax advisors regarding this Agreement and payments that may be made to him pursuant to this Agreement, including specifically,
the application of the provisions of Section 409A of the Code to such payments. The Company shall have no liability to Employee
or to any other person if any of the provisions of this Agreement are determined to constitute deferred compensation subject to
Section 409A but that do not satisfy an exemption from, or the conditions of, that section, except in the event of the Company’s
or its subsidiaries’ gross negligence or bad faith.

 

Section 10. Additional Section 409A
Provisions. Notwithstanding any provision in this Agreement to the contrary:

 

(a)        If
at the time of the Employee’s separation from service within the meaning of Section 409A of the Code, the Company determines
that the Employee is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, then to
the extent any payment or benefit that the Employee becomes entitled to under this Agreement on account of the Employee’s
separation from service is “non-qualified deferred compensation” subject to Section 409A of the Code and not otherwise
exempt, such payment shall not be payable and such benefit shall not be provided until the date that is the earlier of (i) six
months and one day after the Employee’s separation from service, or (ii) the Employee’s death. If any such delayed
cash payment is otherwise payable on an installment basis, the first payment shall include a catch-up payment covering amounts
that would otherwise have been paid during the six-month period but for the application of this provision, and the balance of the
installments shall be payable in accordance with their original schedule.

 

(b)        Each
payment in a series of payments hereunder shall be deemed to be a separate payment for purposes of Section 409A of the Code.
Neither the Company nor Employee shall have the right to accelerate or defer the delivery of any such payments except to the extent
specifically permitted or required by Section 409A.

 

    	 	10	 

     

    

(c)        To
the extent that any right to reimbursement of expenses or payment of any benefit in-kind under this Agreement constitutes nonqualified
deferred compensation (within the meaning of Section 409A of the Code), (i) any such expense reimbursement or payment
shall be made by the Company no later than the last day of the taxable year following the taxable year in which such expense was
incurred by Employee, (ii) the right to reimbursement, payment or in-kind benefits shall not be subject to liquidation or
exchange for another benefit, and (iii) the amount of expenses eligible for reimbursement, payment or in-kind benefits provided
during any taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits to be provided in any other
taxable year; provided , that the foregoing clause shall not be violated with regard to expenses reimbursed under any arrangement
covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period the arrangement
is in effect.

 

(d)        To
the extent that any payment or benefit described in this Agreement constitutes “non-qualified deferred compensation”
under Section 409A of the Code, and to the extent that such payment or benefit is payable upon the Employee’s termination
of employment, then such payments or benefits shall be payable only upon the Employee’s “separation from service”
within the meaning of Section 409A of the Code. The determination of whether and when a separation from service has occurred shall
be made in accordance with the presumptions set forth in Treasury Regulation Section 1.409A-1(h).

 

(e)        The
parties intend that this Agreement will be administered in accordance with Section 409A of the Code. To the extent that any
provision of this Agreement is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in
such a manner so that all payments hereunder comply with Section 409A of the Code. The parties agree that this Agreement may
be amended, as reasonably requested by either party, and as may be necessary to fully comply with Section 409A of the Code
and all related rules and regulations in order to preserve the payments and benefits provided hereunder without additional cost
to either party. While the payments and benefits provided hereunder are intended to be structured in a manner to avoid the implication
of any penalty taxes under Section 409A of the Code, in no event whatsoever shall the Company or any of its subsidiaries be
liable for any additional tax, interest, or penalties that may be imposed on Employee as a result of Section 409A of the Code
or any damages for failing to comply with Section 409A of the Code (other than for withholding obligations or other obligations
applicable to employers, if any, under Section 409A of the Code) , except in the event of the Company’s or its subsidiaries’
gross negligence or bad faith.

 

Section 11. Additional Section 280G
Provisions. Notwithstanding any provision in this Agreement to the contrary:

 

(a)        
If any of the payments or benefits received or to be received by Employee (including, without limitation, any payment or benefits
received in connection with a Sale Event, Change in Control, or Employee’s termination of employment, whether pursuant to
the terms of this Agreement or any other plan, arrangement or agreement, or otherwise) (all such payments collectively referred
to herein as the “280G Payments”) constitute “parachute payments” within the meaning of Section
280G of the Code and would, but for this Section 11(a), be subject to the excise tax imposed under Section 4999 of the Code (the
“Excise Tax”), then prior to making the 280G Payments, a calculation shall be made comparing (i) the Net Benefit
(as defined below) to Employee of the 280G Payments after payment of the Excise Tax to (ii) the Net Benefit to Employee if the
280G Payments are limited to the extent necessary to avoid being subject to the Excise Tax. Only if the amount calculated under
clause (i) above is less than the amount under clause (ii) above will the 280G Payments be reduced to the minimum extent necessary
to ensure that no portion of the 280G Payments is subject to the Excise Tax. “Net Benefit” shall mean the present
value of the 280G Payments net of all federal, state, local, foreign income, employment, and excise taxes. Any reduction made pursuant
to this Section 11(a) shall be made in a manner determined by the Company that is consistent with the requirements of Section 409A
of the Code.

 

    	 	11	 

     

    

(b)        All
calculations and determinations under this Section 11 shall be made by an independent accounting firm or independent tax counsel
appointed by the Company (the “Tax Counsel”) whose determinations shall be conclusive and binding
on the Company and the Executive for all purposes. The Company shall bear all costs the Tax Counsel may incur in connection with
its services.

 

Section 12. Successors and Assigns.

 

(a)        The
Company. This Agreement shall inure to the benefit of the Company and its respective successors and assigns. This Agreement
may not be assigned by the Company without Employee’s prior consent.

 

(b)        Employee.
Employee’s rights and obligations under this Agreement shall not be transferable by Employee by assignment or otherwise,
without the prior written consent of the Company; provided, however, that if Employee shall die, all cash amounts
then payable to Employee hereunder shall be paid in accordance with the terms of this Agreement to Employee’s devisee, legatee,
or other designee, or if there be no such designee, to Employee’s estate.

 

Section 13. Waiver and Amendments.
Any waiver, alteration, amendment, or modification of any of the terms of this Agreement shall be valid only if made in writing
and signed by each of the parties hereto; provided, however, that any such waiver, alteration, amendment, or modification
must be consented to on the Company’s behalf by the Board. No waiver by either of the parties hereto of their rights hereunder
shall be deemed to constitute a waiver with respect to any subsequent occurrences or transactions hereunder unless such waiver
specifically states that it is to be construed as a continuing waiver.

 

Section 14. Severability. If any
covenants or such other provisions of this Agreement are found to be invalid or unenforceable by a final determination of a court
of competent jurisdiction, (a) the remaining terms and provisions hereof shall be unimpaired, and (b) the invalid or
unenforceable term or provision hereof shall be deemed replaced by a term or provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or unenforceable term or provision hereof.

 

Section 15. Governing Law and Jurisdiction.
This is a Maryland contract and shall be construed under and be governed in all respects by the laws of Maryland without giving
effect to the conflict of laws principles of such state. With respect to any disputes concerning federal law, such disputes shall
be determined in accordance with the law as it would be interpreted and applied by the United States Court of Appeals for the Fourth
Circuit. To the extent that any court action is initiated to enforce this Agreement, the parties hereby consent to the non-exclusive
jurisdiction of the state and federal courts of Maryland. Accordingly, with respect to any such court action, Employee (a) submits
to the personal jurisdiction of such courts; (b) consents to service of process; and (c) waives any other requirement
(whether imposed by statute, rule of court, or otherwise) with respect to personal jurisdiction or service of process.

 

Section 16. Notices. 

 

    	 	12	 

     

    

(a)        Place
of Delivery. Every notice or other communication relating to this Agreement shall be in writing, and shall be mailed to or
delivered to the party for whom or which it is intended at such address or coordinates as may from time to time be designated by
it in a notice mailed or delivered to the other party as herein provided; provided, that unless and until some other address
be so designated, all notices and communications by Employee to the Company shall be mailed, sent via facsimile or email or delivered
to the Company at its principal executive office currently located in Germantown, Maryland and all notices and communications by
the Company to Employee may be given to Employee personally or may be mailed to Employee at Employee’s last known address,
as reflected in the Company’s records.

 

(b)        Date
of Delivery. Any notice so addressed shall be deemed to be given or received (i) if delivered by hand, on the date of
such delivery, (ii) if mailed by courier or by overnight mail, on the first business day following the date of such mailing,
(iii) if mailed by registered or certified mail, on the third business day after the date of such mailing or (iv) if sent
via electronic mail or facsimile, on the date sent.

 

Section 17. Section Headings. The headings
of the sections and subsections of this Agreement are inserted for convenience only and shall not be deemed to constitute a part
thereof or affect the meaning or interpretation of this Agreement or of any term or provision hereof.

 

Section 18. Entire Agreement. This
Agreement, together with Confidentiality Agreement, the Inducement Plan, and any grant agreement pursuant to such Inducement Plan
entered into between the Company and Employee thereunder, constitute the entire understanding and agreement of the parties hereto
regarding the employment of Employee. This Agreement supersedes all prior negotiations, discussions, correspondence, communications,
understandings, and agreements between the parties (including without limitation that certain Term Sheet offer letter given to
Employee) relating to the subject matter of this Agreement.

 

Section 19. Survival of Operative Sections.
Upon any termination of Employee’s employment, the provisions of Section 7 through Section 21 of this Agreement
(together with any related definitions set forth in Section 1 hereof) shall survive to the extent necessary to give effect
to the provisions thereof.

 

Section 20. Counterparts. This Agreement
may be executed in two or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute
one and the same instrument. The execution of this Agreement may be by actual or facsimile signature.

 

Section 21. Gender Neutral. Wherever
used herein, a pronoun in the masculine gender shall be considered as including the feminine gender unless the context clearly
indicates otherwise.

 

 

 

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

 

	 	 	 
	NEURALSTEM, INC.
	 	 
	 	 	
         

	By:	 	 
	Title:	 	 

 

    	 	13	 

     

    

 

	EMPLOYEE
	 	 
	 	 	
         

	By:	 	Kenneth C. Carter

 

 

 

 

 

 

 

 

    	 	14	 

     

    

EXHIBIT A

General Release and Waiver of Claims

In exchange for the severance benefits
to be provided to me under the Employment Agreement between me and Neuralstem, Inc. (the “Company”), dated as of December
12, 2018 (the “Employment Agreement”), to which I would not otherwise be entitled, on my own behalf and that of my
heirs, executors, administrators, beneficiaries, personal representatives and assigns, I agree that this General Release and Waiver
of Claims (the “Release of Claims”) shall be in complete and final settlement of any and all causes of action, rights
and claims, whether known or unknown, accrued or unaccrued, contingent or otherwise, that I have had in the past, now have, or
might now have, in any way related to, connected with or arising out of my employment or its termination, under the Employment
Agreement, or pursuant to Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Age Discrimination
in Employment Act, as amended by the Older Workers Benefit Protection Act, the Worker Adjustment and Retraining Notification Act,
the Employee Retirement Income Security Act, the wage and hour, wage payment and fair employment practices laws and statutes of
the State of Maryland (each as amended from time to time), and/or any other federal, state or local law, regulation or other requirement
(collectively, the “Claims”), and I hereby release and forever discharge the Company, its subsidiaries and all
of their respective past, present and future directors, shareholders, officers, members, managers, general and limited partners,
employees, employee benefit plans, administrators, trustees, agents, representatives, successors and assigns, and all others connected
with any of them, both individually and in their official capacities, from, and I hereby waive, any and all such Claims. This release
shall not apply to (a) any claims that arise after I sign this Release of Claims, including my right to enforce the terms
of this Release of Claims; (b) any claims that may not be waived pursuant to applicable law; (c) any right to indemnification
that I may have under the certificate of incorporation or by-laws of the Company, and any Indemnification Agreement between me
and the Company or any insurance policies maintained by the Company; or (d) any right to receive any vested benefits under
the terms of any employee benefit plans and my award agreements thereunder.

Nothing contained in this Release of Claims shall be construed
to prohibit me from filing a charge with or participating in any investigation or proceeding conducted by the federal Equal Employment
Opportunity Commission or a comparable state or local agency, provided, however, that I hereby agree to waive my right to recover
monetary damages or other individual relief in any charge, complaint or lawsuit filed by me or by anyone else on my behalf.

In signing this Release of Claims, I acknowledge my understanding
that I may consider the terms of this Release of Claims for up to [twenty-one (21)/forty-five (45)]1 days from the
date I receive it and that I may not sign this Release of Claims until after the date my employment with the Company terminates.
I also acknowledge that I am hereby advised by the Company to seek the advice of an attorney prior to signing this Release of
Claims; that I have had sufficient time to consider this Release of Claims and to consult with an attorney, if I wished to do
so, or to consult with any other person of my choosing before signing; and that I am signing this Release of Claims voluntarily
and with a full understanding of its terms.

______________________

1 To be determined by the Company at the time of termination.

 

    	 	15	 

     

    

I further acknowledge that, in signing this Release of Claims,
I have not relied on any promises or representations, express or implied, that are not set forth expressly in the Release of Claims.
I understand that I may revoke this Release of Claims at any time within seven (7) days of the date of my signing by written
notice to the Chairman of the Company’s Board of Directors and that this Release of Claims will take effect only upon the
expiration of such seven-day revocation period and only if I have not timely revoked it. 

Intending to be legally bound, I have signed this Release of
Claims under seal as of the date written below.

 

 

 

Signature ___________________________

 

Name ______________________________

 

Date Signed _________________________

 

 

 

 

 

    	 	16	 

     

    

EXHIBIT B

Confidentiality Information and Assignment Agreement

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