Document:

Lucas Energy, Inc. 8-K

 

Exhibit 10.6

 

SHORT
TERM PROMISSORY NOTE

 

	US
$275,000	March 28, 2016

 

NOW
THEREFORE FOR VALUE RECEIVED, the undersigned, Lucas Energy, Inc., a Nevada corporation
(“Lucas”), hereby promises to pay to the order of Alan Dreeban (the
“Lender”), the principal sum of Two Hundred and Seventy-Five Thousand Dollars ($275,000), in lawful
money of the United States of America, which shall be legal tender, bearing interest and payable as provided herein. This
Promissory Note (this “Note” or “Promissory Note”) has an
effective date of March 28, 2016 (the “Effective Date”). This Note is entered into to evidence
$250,000 loaned by the Lender to Lucas on the Effective Date, plus a 10% original issue discount.

 

1.     This
Note shall not accrue interest unless an Event of Default shall occur hereunder at which time interest shall accrue at the rate
of fifteen percent (15%) per annum. This Note is payable on June [ ], 2016, the “Maturity Date”.

 

2.    As
additional consideration for the Lender agreeing to make make the loan evidenced by this Note to Lucas, Lucas agrees to issue to
the Lender, upon receipt from the NYSE MKT of the additional listing of such shares, 15,000 shares of the Company’s restricted
common stock (the “Shares”).

 

3.    This
Note may be prepaid in whole or in part, at any time and from time to time, without premium or penalty.

 

4.    If
any payment of principal or interest on this Note shall become due on a Saturday, Sunday or any other day on which national banks
are not open for business, such payment shall be made on the next succeeding business day.

 

5.    This
Note shall be binding upon Lucas and inure to the benefit of the Lender named herein and Lender’s respective successors
and assigns.

 

6.    Notwithstanding
anything to the contrary in this Note or any other agreement entered into in connection herewith, whether now existing or hereafter
arising and whether written or oral, it is agreed that the aggregate of all interest and any other charges constituting interest,
or adjudicated as constituting interest, and contracted for, chargeable or receivable under this Note or otherwise in connection
with this loan transaction, shall under no circumstances exceed the Maximum Rate (as defined below).

 

7.     If
an Event of Default (as defined below) occurs (unless all Events of Default have been cured or waived by Lender), Lender may,
by written notice to Lucas, declare the principal amount then outstanding of, and the accrued interest (if any) and all other
amounts payable on, this Note to be immediately due and payable. The following are “Events of Default”
under this Note:

 

(a)     Lucas
shall fail to pay, when and as due, the principal or interest payable hereunder (if any) within fifteen (15) days from the due
date of such payment; or

 

(b)    Lucas
shall: (i) make an assignment for the benefit of creditors, file a petition in bankruptcy, petition or apply to any tribunal for
the appointment of a custodian, receiver or a trustee for it or a substantial portion of its assets; (ii) commence any proceeding
under any bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or liquidation or statute of any jurisdiction,
whether now or hereafter in effect; (iii) have filed against it any such petition or application in which an order for relief is
entered or which remains undismissed for a period of ninety (90) days or more; (iv) indicate its consent to, approval of or acquiescence
in any such petition, application, proceeding or order for relief or the appointment of a custodian, receiver or trustee for it
or a substantial portion of its assets; or (v) suffer any such custodianship, receivership or trusteeship to continue undischarged
for a period of ninety (90) days or more; or

 

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Term Promissory Note

     

    

 

(c)    Lucas
shall take any action authorizing, or in furtherance of, any of the foregoing.

 

8.    If
from any circumstance any holder of this Note shall ever receive interest or any other charges constituting interest, or adjudicated
as constituting interest, the amount, if any, which would exceed the Maximum Rate shall be applied to the reduction of the principal
amount owing on this Note, and not to the payment of interest; or if such excessive interest exceeds the unpaid balance of principal
hereof, the amount of such excessive interest that exceeds the unpaid balance of principal hereof shall be refunded to Lucas. In
determining whether or not the interest paid or payable exceeds the Maximum Rate, to the extent permitted by applicable law (i)
any non-principal payment shall be characterized as an expense, fee or premium rather than as interest; and (ii) all interest at
any time contracted for, charged, received or preserved in connection herewith shall be amortized, prorated, allocated and spread
in equal parts during the period of the full stated term of this Note. The term “Maximum Rate” shall
mean the maximum rate of interest allowed by applicable federal or state law.

 

9.    Lender
represents and warrants to Lucas, and agrees, as follows (collectively the “Representations”):

 

(a)   The
Shares are being acquired by Lender for its own account for investment and not with a view to, or for sale in connection with,
any distribution thereof;

 

(b)   Lender
acknowledges that it is an “accredited investor” as such term is defined in Rule 501 of the Securities
Act of 1933, as amended (the “Act” or the “Securities Act”), and has executed
the Certificate of Accredited Investor Status, attached hereto as Exhibit A;

 

(c)   Lender
has sufficient knowledge and experience in financial and business matters and is capable of evaluating the risks and merits of
Lender’s investment in Lucas; and Lender is able financially to bear the risk of losing Lender’s full investment in
this Note and the Shares;

 

(d)   Lender
has not been offered the Shares by any form of general solicitation or advertising, including, but not limited to, advertisements,
articles, notices or other communications published in any newspaper, magazine, or other similar media or television or radio broadcast
or any seminar or meeting where, to Lender’s knowledge, those individuals that have attended have been invited by any such
or similar means of general solicitation or advertising. Lender has had an opportunity to ask questions of and receive satisfactory
answers from Lucas, or persons acting on behalf of Lucas, concerning the terms and conditions of the Shares and Lucas, and all
such questions have been answered to the full satisfaction of Lender. Lucas has not supplied Lender any information regarding the
Shares or an investment in the Shares other than as contained in this Note, and Lender is relying on its own investigation and
evaluation of Lucas and the Shares and not on any other information;

 

(e)   The
Lender understands that the Shares are being offered to it in reliance on specific exemptions from or non-application of the registration
requirements of federal and state securities laws and that Lucas is relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings of the Lender set forth herein in order to determine the applicability
of such exemptions and the suitability of Lender to acquire the Note and Shares. Lucas is under no obligation to to register or
seek an exemption under any federal and/or state securities acts for any sale or transfer of the Shares by Lender, and Lender is
solely responsible for determining the status, in its own hands, of the Shares acquired in connection herewith and the availability,
if required, of exemptions from registration for purposes of sale or transfer of the Shares. All information which Lender has provided
to Lucas concerning the undersigned’s financial position and knowledge of financial and business matters is correct and complete
as of the date hereof; and

 

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(f)    Lender
understands that the Shares have not been registered under the Securities Act or registered or qualified under any securities laws
of any state or other jurisdiction, are “restricted securities,” and cannot be resold or otherwise transferred
unless they are registered under the Securities Act, and registered or qualified under any other applicable securities laws, or
an exemption from such registration and qualification is available. Each certificate issued to evidence any Shares shall bear a
legend as follows:

 

“The
securities represented by this certificate have not been registered under the Securities Act of 1933 or any state securities act.
The securities have been acquired for investment and may not be sold, transferred, pledged or hypothecated unless (i) they shall
have been registered under the Securities Act of 1933 and any applicable state securities act, or (ii) the corporation shall have
been furnished with an opinion of counsel, satisfactory to counsel for the corporation, that registration is not required under
any such acts.”

 

10.  This
Note may be executed in several counterparts, each of which is an original. It shall not be necessary in making proof of this Note
or any counterpart hereof to produce or account for any of the other counterparts. A copy of this Note signed by one party and
faxed or scanned and emailed to another party (as a PDF or similar image file) shall be deemed to have been executed and delivered
by the signing party as though an original. A photocopy or PDF of this Note shall be effective as an original for all purposes.

 

11.  It
is the intention of the parties hereto that the terms and provisions of this Note are to be construed in accordance with and governed
by the laws of the State of Texas, except as such laws may be preempted by any federal law controlling the rate of interest which
may be charged on account of this Note. The parties hereby consent and agree that, in any actions predicated upon this Note, venue
is properly laid in Texas and that the Circuit Court in and for Harris Country, Texas, shall have full subject matter and personal
jurisdiction over the parties to determine all issues arising out of or in connection with the execution and enforcement of this
Note.

 

12.  Every
provision of this Note is intended to be severable. If, in any jurisdiction, any term or provision hereof is determined to be
invalid or unenforceable, (a) the remaining terms and provisions hereof shall be unimpaired, (b) any such invalidity or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such term or provision in any other jurisdiction, and (c) the
invalid or unenforceable term or provision shall, for purposes of such jurisdiction, 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.
In the event a court of competent jurisdiction determines that any provision of this Note is invalid or against public policy
and cannot be so reduced or modified so as to be made enforceable, the remaining provisions of this Note shall not be affected
thereby, and shall remain in full force and effect.

 

13.  No
modification, amendment, addition to, or termination of this Note, nor waiver of any of its provisions, shall be valid or enforceable
unless in writing and signed by all the parties hereto.

 

14.  The
Note constitutes the entire agreement of the parties regarding the matters contemplated herein, or related thereto, and supersedes
all prior and contemporaneous agreements, and understandings of the parties in connection therewith. In this Note, words in the
singular include the plural and words in the plural include the singular, and words importing the masculine gender include the
feminine and neuter genders.

 

15.  This
Note and the repayment of this Note shall be unsecured by Lucas and Lender shall have no rights to any collateral or security
interests in connection herewith or the payment of this Note. 

 

[Remainder
of page left intentionally blank. Signature pages follow.]

 

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IN
WITNESS WHEREOF, Lucas has duly executed this Promissory Note as of the day and year first above written, with an Effective
Date as provided above.

 

	 	 	“Lucas”	 
	 	 	 	 
	 	 	Lucas Energy, Inc.
 (A Nevada Corporation)	 
	 	 	 	 
	 	 	/s/ Anthony C. Schnur	 
	 	 	Anthony C. Schnur	 
	 	 	President	 
	 	 	 	 
	“Lender”	 	 	 
	 	 	 	 
	/s/ Alan Dreeben	 	 	 
	Alan Dreeben	 	 	 

 

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Exhibit A

 

CERTIFICATE OF ACCREDITED
INVESTOR STATUS

 

Except
as may be indicated by the undersigned below, the undersigned is an “accredited investor,” as that term
is defined in Regulation D under the Securities Act of 1933, as amended (the “Securities Act”). The undersigned
has initialed the box below indicating the basis on which he is representing his status as an “accredited
investor”:

 

__________a bank as
defined in Section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity; a broker or dealer registered pursuant
to Section 15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”); an insurance company
as defined in Section 2(13) of the Securities Act; an investment company registered under the Investment Company Act of 1940 or
a business development company as defined in Section 2(a)(48) of that Act; a small business investment company licensed by the
U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958; a plan established
and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions,
for the benefit of its employees, and such plan has total assets in excess of $5,000,000; an employee benefit plan within the meaning
of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section
3(21) of such Act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or
if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made
solely by persons that are “accredited investors”;

 

__________a private
business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940;

 

__________an organization
described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership,
not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000;

 

__________a natural
person whose individual net worth, or joint net worth with the undersigned’s spouse, at the time of this purchase exceeds
$1,000,000. For purposes of this item, “net worth” means the excess of total assets at fair market value
(including personal and real property, but excluding the estimated fair market value of a person’s primary home) over total
liabilities. Total liabilities excludes any mortgage on the primary home in an amount of up to the home’s estimated fair
market value as long as the mortgage was incurred more than 60 days before the Securities are purchased, but includes (i) any mortgage
amount in excess of the home’s fair market value and (ii) any mortgage amount that was borrowed during the 60-day period
before the closing date for the sale of Securities for the purpose of investing in the Securities;

 

__________a natural
person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with the undersigned’s
spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current
year;

 

__________a trust
with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase
is directed by a person who has such knowledge and experience in financial and business matters that he is capable of evaluating
the merits and risks of the prospective investment;

 

__________an entity
(not including a trust) in which all of the equity holders are “accredited investors” by virtue of their
meeting one or more of the above standards; or

 

__________an individual
who is a director or executive officer of Lucas Energy, Inc.

 

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IN WITNESS WHEREOF,
the undersigned has executed this Certificate of Accredited Investor Status effective as of March ___, 2016.

 

	 	 
	 	 
	 	By: 	 
	 	 	Alan Dreeben

 

Page
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Term Promissory NoteLucas Energy, Inc. 8-K

 

Exhibit 10.7

 

LUCAS ENERGY, INC. 

AMENDED AND RESTATED 2014 STOCK INCENTIVE
PLAN

 

ARTICLE I -- PREAMBLE

 

1.1   
    This 2014 Stock Incentive Plan of Lucas Energy, Inc. (the “Company”) is
intended to secure for the Company and its Affiliates the benefits arising from ownership of the Company’s Common Stock
by the Employees, Officers, Directors and Consultants of the Company and its Affiliates, all of whom are and will be
responsible for the Company’s future growth. The Plan is designed to help attract and retain for the Company and its
Affiliates personnel of superior ability for positions of exceptional responsibility, to reward Employees, Officers,
Directors and Consultants for their services and to motivate such individuals through added incentives to further contribute
to the success of the Company and its Affiliates. With respect to persons subject to Section 16 of the Act, transactions
under this Plan are intended to satisfy the requirements of Rule 16b-3 of the Act.

 

1.2       Awards under
the Plan may be made to an Eligible Person in the form of (i) Incentive Stock Options (to Eligible Employees only); (ii) Nonqualified
Stock Options; (iii) Restricted Stock; (iv) Stock Awards; (v) Performance Shares; or (vi) any combination of the foregoing. 

 

1.3       The Company’s board of directors
adopted the Plan on December 27, 2013. The Plan shall be effective December 27, 2013 (the “Effective Date”),
subject to approval by the shareholders of the Company to the extent necessary to satisfy the requirements of the Code, the Act,
or other applicable federal or state law. Unless sooner terminated as provided elsewhere in this Plan, this Plan shall terminate
upon the close of business on the day next preceding the tenth (10th) anniversary of the Effective Date. Award Agreements outstanding
on such date shall continue to have force and effect in accordance with the provisions thereof.

 

1.4       The Plan shall be governed by, and construed
in accordance with, the laws of the State of Nevada (except its choice-of-law provisions).

 

1.5       Capitalized terms shall have the meaning
provided in Article II unless otherwise provided in this Plan or any related Award Agreement.

 

ARTICLE II -- DEFINITIONS

 

DEFINITIONS. Except where the context
otherwise indicates, the following definitions apply:

 

2.1       “Act” means
the Securities Exchange Act of 1934, as now in effect or as hereafter amended.

 

2.2       “Affiliate”
means any parent corporation or subsidiary corporation of the Company, whether now or hereinafter existing, as those terms are
defined in Sections 424(e) and (f), respectively, of the Code. 

 

2.3       “Award” means
an award granted to a Participant in accordance with the provisions of the Plan, including, but not limited to, Stock Options,
Restricted Stock, Stock Awards, Performance Shares, or any combination of the foregoing.

 

2.4       “Award Agreement”
means the separate written agreement evidencing each Award granted to a Participant under the Plan.

 

2.5       “Board of Directors”
or “Board” means the Board of Directors of the Company, as constituted from time to time. 

 

2.6       “Bylaws” shall
mean the Bylaws of the Company as amended from time to time.

 

    Page 1 of 16

     

    

 

2.7       “Change of Control”
means (i) the adoption of a plan of merger or consolidation of the Company with any other corporation or association as a result
of which the holders of the voting capital stock of the Company as a group would receive less than 50% of the voting capital stock
of the surviving or resulting corporation; (ii) the approval by the Board of Directors of an agreement providing for the sale or
transfer (other than as security for obligations of the Company) of substantially all the assets of the Company; or (iii) in the
absence of a prior expression of approval by the Board of Directors, the acquisition of more than 20% of the Company’s voting
capital stock by any person within the meaning of Rule 13d-3 under the Act (other than the Company or a person that directly or
indirectly controls, is controlled by, or is under common control with, the Company).

 

2.8       “Code” means
the Internal Revenue Code of 1986, as amended, and the regulations and interpretations promulgated thereunder.

 

2.9       “Committee”
means a committee of two or more members of the Board appointed by the Board in accordance with Section 3.2 of the Plan. In the
event the Company has not designated a Committee pursuant to Section 3.2 of the Plan, “Committee” shall
refer to the Compensation Committee of the Company (in the event the Compensation Committee has authority to administer the Plan)
or the Board of Directors of the Company.

 

2.10     “Common Stock”
means the Company’s common stock.

 

2.11     “Company”
means Lucas Energy, Inc., a Nevada corporation.

 

2.12.    “Consultant”
means any person, including an advisor engaged by the Company or an Affiliate to render bona fide consulting or advisory services
to the Company or an Affiliate, other than as an Employee, Director or Non-Employee Director.

 

2.13     “Director”
means a member of the Board of Directors of the Company.

 

2.14     “Disability”
means the permanent and total disability of a person within the meaning of Section 22(e)(3) of the Code.

 

2.15     “Effective Date”
shall be the date set forth in Section 1.3 of the Plan.

 

2.16      “Eligible Employee”
means an Eligible Person who is an Employee of the Company or any Affiliate.

 

2.17      “Eligible Person”
means any Employee, Officer, Director, Non-Employee Director or Consultant of the Company or any Affiliate, except for instances
where services are in connection with the offer or sale of securities in a capital-raising transaction, or they directly or indirectly
promote or maintain a market for the Company’s securities, subject to any other limitations as may be provided by the Code,
the Act, or the Board. In making such determinations, the Board may take into account the nature of the services rendered by such
person, his or her present and potential contribution to the Company’s success, and such other factors as the Board in its
discretion shall deem relevant.

 

2.19     “Employee”
means an individual who is a common-law employee of the Company or an Affiliate including employment as an Officer. Mere service
as a Director or payment of a director’s fee by the Company or an Affiliate shall not be sufficient to constitute “employment”
by the Company or an Affiliate.

 

2.20      “ERISA”
means the Employee Retirement Income Security Act of 1974, as now in effect or as hereafter amended

 

2.21     “Fair Market Value”
means, as of any date and unless the Committee determines otherwise, the value of Common Stock determined as follows:

 

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(a)     If the Common Stock is listed
on any established stock exchange or a national market system, including without limitation the NYSE Amex, Nasdaq National Market
or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value will be the closing sales price for such stock
(or the closing bid, if no sales were reported) as quoted on such exchange or system for the day of determination, as reported
in The Wall Street Journal or such other source as the Committee deems reliable;

 

(b)    If the Common Stock is regularly
quoted by a recognized securities dealer but selling prices are not reported for the date in question, the Fair Market Value will
be the mean between the high bid and low asked prices for the Common Stock for the day of determination, as reported in The Wall
Street Journal or such other source as the Committee deems reliable; or

 

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

 

(d)   The Committee
also may adopt a different methodology for determining Fair Market Value with respect to one or more Awards if a different methodology
is necessary or advisable to secure any intended favorable tax, legal or other treatment for the particular Award(s) (for example,
and without limitation, the Committee may provide that Fair Market Value for purposes of one or more Awards will be based on an
average of closing prices (or the average of high and low daily trading prices) for a specified period preceding the relevant
date).

 

2.22“Grant Date”
means, as to any Award, the latest of:

 

(a)    the date on which the Board authorizes
the grant of the Award; or

 

(b)    the date
the Participant receiving the Award becomes an Employee or a Director of the Company or its Affiliate, to the extent employment
status is a condition of the grant or a requirement of the Code or the Act; or

 

(c)    such other date (later than
the dates described in (a) and (b) above) as the Board may designate and as set forth in the Participant’s Award Agreement.

 

2.23     “Immediate Family”
means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law or sister-in-law and shall include adoptive relationships.

 

2.24     “Incentive Stock
Option” means a Stock Option intended to qualify as an incentive stock option within the meaning of Section 422
of the Code and is granted under Article IV of the Plan and designated as an Incentive Stock Option in a Participant’s
Award Agreement.

 

2.25     “Non-Employee Director”
shall have the meaning set forth in Rule 16b-3 under the Act.

 

2.26     “Nonqualified Stock Option”
means a Stock Option not intended to qualify as an Incentive Stock Option and is not so designated in the Participant’s Award
Agreement.

 

2.27     “Officer”
means a person who is an officer of the Company within the meaning of Section 16 of the Act. 

 

2.28     “Option Period”
means the period during which a Stock Option may be exercised from time to time, as established by the Board and set forth in the
Award Agreement for each Participant who is granted a Stock Option.

 

    Page 3 of 16

     

    

 

2.29     “Option Price”
means the purchase price for a share of Common Stock subject to purchase pursuant to a Stock Option, as established by the Board
and set forth in the Award Agreement for each Participant who is granted a Stock Option.

 

2.30     “Outside
Director” means a Director who either (i) is not a current employee of the Company or an “affiliated
corporation” (within the meaning of Treasury Regulations promulgated under Section 162(m) of the Code), is not a
former employee of the Company or an “affiliated corporation” receiving compensation for prior services
(other than benefits under a tax qualified pension plan), was not an officer of the Company or an “affiliated corporation”
at any time and is not currently receiving direct or indirect remuneration from the Company or an “affiliated corporation”
for services in any capacity other than as a Director or (ii) is otherwise considered an “outside director”
for purposes of Section 162(m) of the Code. 

 

2.31     “Participant”
means an Eligible Person to whom an Award has been granted and who has entered into an Award Agreement evidencing the Award or,
if applicable, such other person who holds an outstanding Award.

 

2.32     “Performance Objectives”
shall have the meaning set forth in Article IX of the Plan.

 

2.33     “Performance Period”
shall have the meaning set forth in Article IX of the Plan.

 

2.34     “Performance Share”
means an Award under Article IX of the Plan of a unit valued by reference to the Common Stock, the payout of which is subject to
achievement of such Performance Objectives, measured during one or more Performance Periods, as the Board, in its sole discretion,
shall establish at the time of such Award and set forth in a Participant’s Award Agreement.

 

2.35     “Plan” means
this Lucas Energy, Inc. 2014 Stock Incentive Plan, as it may be amended from time to time.

 

2.36     “Reporting Person”
means a person required to file reports under Section 16(a) of the Act.

 

2.37     “Restricted
Stock” means an Award under Article VII of the Plan of shares of Common Stock that are at the time of the Award
subject to restrictions or limitations as to the Participant’s ability to sell, transfer, pledge or assign such shares,
which restrictions or limitations may lapse separately or in combination at such time or times, in installments or otherwise,
as the Board, in its sole discretion, shall determine at the time of such Award and set forth in a Participant’s Award Agreement.

 

2.38     “Restriction Period”
means the period commencing on the Grant Date with respect to such shares of Restricted Stock and ending on such date as the Board,
in its sole discretion, shall establish and set forth in a Participant’s Award Agreement.

 

2.39     “Retirement”
means retirement as determined under procedures established by the Board or in any Award, as set forth in a Participant’s
Award Agreement.

 

2.40     “Rule 16b-3”
means Rule 16b-3 promulgated under the Act or any successor to Rule 16b-3, as in effect from time to time. Those provisions of
the Plan which make express reference to Rule 16b-3, or which are required in order for certain option transactions to qualify
for exemption under Rule 16b-3, shall apply only to a Reporting Person.

 

2.41     “Stock
Award” means an Award of shares of Common Stock under Article VIII of the Plan. 

 

2.42      “Stock Option”
means an Award under Article IV or Article V of the Plan of an option to purchase Common Stock. A Stock Option may be either an
Incentive Stock Option or a Nonqualified Stock Option. 

 

    Page 4 of 16

     

    

 

2.43     “Ten Percent Stockholder”
means an individual who owns (or is deemed to own pursuant to Section 424(d) of the Code), at the time of grant, stock possessing
more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any of its Affiliates.

 

2.44     “Termination of Service”
means (i) in the case of an Eligible Employee, the discontinuance of employment of such Participant with the Company or its Subsidiaries
for any reason other than a transfer to another member of the group consisting of the Company and its Affiliates and (ii) in the
case of a Director who is not an Employee of the Company or any Affiliate, the date such Participant ceases to serve as a Director.
The determination of whether a Participant has discontinued service shall be made by the Board in its sole discretion. In determining
whether a Termination of Service has occurred, the Board may provide that service as a Consultant or service with a business enterprise
in which the Company has a significant ownership interest shall be treated as employment with the Company.

 

ARTICLE III – ADMINISTRATION

 

3.1       The Plan shall be administered by the
Board of Directors of the Company. The Board shall have the exclusive right to interpret and construe the Plan, to select the Eligible
Persons who shall receive an Award, and to act in all matters pertaining to the grant of an Award and the determination and interpretation
of the provisions of the related Award Agreement, including, without limitation, the determination of the number of shares subject
to Stock Options and the Option Period(s) and Option Price(s) thereof, the number of shares of Restricted Stock or shares subject
to Stock Awards or Performance Shares subject to an Award, the vesting periods (if any) and the form, terms, conditions and duration
of each Award, and any amendment thereof consistent with the provisions of the Plan. The Board may adopt, establish, amend and
rescind such rules, regulations and procedures as it may deem appropriate for the proper administration of the Plan, make all other
determinations which are, in the Board’s judgment, necessary or desirable for the proper administration of the Plan, amend
the Plan or a Stock Award as provided in Article XI, and terminate or suspend the Plan as provided in Article XI. All acts, determinations
and decisions of the Board made or taken pursuant to the Plan or with respect to any questions arising in connection with the administration
and interpretation of the Plan or any Award Agreement, including the severability of any and all of the provisions thereof, shall
be conclusive, final and binding upon all persons.

 

3.2       The
Board may, to the full extent permitted by and consistent with applicable law and the Company’s Bylaws, and subject to Subparagraph
3.2(b) herein below, delegate any or all of its powers with respect to the administration of the Plan to the Company’s Compensation
Committee or another Committee of the Company consisting of not fewer than two members of the Board each of whom shall qualify
(at the time of appointment to the Committee and during all periods of service on the Committee) in all respects as a Non-Employee
Director and as an Outside Director.

 

(a)     If administration is delegated
to a Committee, the Committee shall have, in connection with the administration of the Plan, the powers theretofore possessed by
the Board, including the power to delegate to a subcommittee any of the administrative powers the Committee is authorized to exercise
(and references in the Plan to the Board shall thereafter be to the Committee or subcommittee), subject, however, to such resolutions,
not consistent with the provisions of the Plan, as may be adopted from time to time by the Board.

 

(b)    The Board may abolish the Committee
at any time and reassume all powers and authority previously delegated to the Committee.

 

(c)    In addition to, and not in
limitation of, the right of any Committee so designated by the Board to administer this Plan to grant Awards to Eligible Persons
under this Plan, the full Board of Directors and/or the Company’s Compensation Committee may from time to time grant Awards
to Eligible Persons pursuant to the terms and conditions of this Plan, subject to the requirements of the Code, Rule 16b-3 under
the Act or any other applicable law, rule or regulation. In connection with any such grants, the Board of Directors and/or the
Company’s Compensation Committee shall have all of the power and authority of the Committee to determine the Eligible Persons
to whom such Awards shall be granted and the other terms and conditions of such Awards.

 

    Page 5 of 16

     

    

 

3.3      Without limiting the provisions of this
Article III, and subject to the provisions of Article X, the Board is authorized to take such action as it determines to be necessary
or advisable, and fair and equitable to Participants and to the Company, with respect to an outstanding Award in the event of a
Change of Control as described in Article X or other similar event. Such action may include, but shall not be limited to, establishing,
amending or waiving the form, terms, conditions and duration of an Award and the related Award Agreement, so as to provide for
earlier, later, extended or additional times for exercise or payments, differing methods for calculating payments, alternate forms
and amounts of payment, an accelerated release of restrictions or other modifications. The Board may take such actions pursuant
to this Section 3.3 by adopting rules and regulations of general applicability to all Participants or to certain categories of
Participants, by including, amending or waiving terms and conditions in an Award and the related Award Agreement, or by taking
action with respect to individual Participants from time to time.

 

3.4      Subject to the provisions of Section
3.9, the maximum aggregate number of shares of Common Stock which may be issued pursuant to Awards under the Plan shall be ninety-five
thousand (95,000) shares. Such shares of Common Stock shall be made available from authorized and unissued shares of the
Company.

 

(a)    For all purposes under the
Plan, each Performance Share awarded shall be counted as one share of Common Stock subject to an Award.

 

(b)    If, for
any reason, any shares of Common Stock (including shares of Common Stock subject to Performance Shares) that have been awarded
or are subject to issuance or purchase pursuant to Awards outstanding under the Plan are not delivered or purchased, or are reacquired
by the Company, for any reason, including but not limited to a forfeiture of Restricted Stock or failure to earn Performance Shares
or the termination, expiration or cancellation of a Stock Option, or any other termination of an Award without payment being made
in the form of shares of Common Stock (whether or not Restricted Stock), such shares of Common Stock shall not be charged against
the aggregate number of shares of Common Stock available for Award under the Plan and shall again be available for Awards under
the Plan. In no event, however, may Common Stock that is surrendered or withheld to pay the exercise price of a Stock Option or
to satisfy tax withholding requirements be available for future grants under the Plan.

 

(c)    The foregoing subsections (a)
and (b) of this Section 3.4 shall be subject to any limitations provided by the Code or by Rule 16b-3 under the Act or by any other
applicable law, rule or regulation.

 

3.5       Each Award granted under the Plan shall
be evidenced by a written Award Agreement, which shall be subject to and shall incorporate (by reference or otherwise) the applicable
terms and conditions of the Plan and shall include any other terms and conditions (not inconsistent with the Plan) required by
the Board.

 

3.6      The Company shall not be required to
issue or deliver any certificates for shares of Common Stock under the Plan prior to:

 

(a)    any required approval of the Plan
by the shareholders of the Company; and

 

(b)    the completion of any registration
or qualification of such shares of Common Stock under any federal or state law, or any ruling or regulation of any governmental
body that the Company shall, in its sole discretion, determines to be necessary or advisable.

 

    Page 6 of 16

     

    

 

3.7      The Board may require any Participant
acquiring shares of Common Stock pursuant to any Award under the Plan to represent to and agree with the Company in writing that
such person is acquiring the shares of Common Stock for investment purposes and without a view to resale or distribution thereof.
Shares of Common Stock issued and delivered under the Plan shall also be subject to such stop-transfer orders and other restrictions
as the Board may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission,
any stock exchange upon which the Common Stock is then listed and any applicable federal or state laws, and the Board may cause
a legend or legends to be placed on the certificate or certificates representing any such shares to make appropriate reference
to any such restrictions. In making such determination, the Board may rely upon an opinion of counsel for the Company.

 

3.8       Except
as otherwise expressly provided in the Plan or in an Award Agreement with respect to an Award, no Participant shall have any right
as a shareholder of the Company with respect to any shares of Common Stock subject to such Participant’s Award except to
the extent that, and until, one or more certificates representing such shares of Common Stock shall have been delivered to the
Participant. No shares shall be required to be issued, and no certificates shall be required to be delivered, under the Plan unless
and until all of the terms and conditions applicable to such Award shall have, in the sole discretion of the Board, been satisfied
in full and any restrictions shall have lapsed in full, and unless and until all of the requirements of law and of all regulatory
bodies having jurisdiction over the offer and sale, or issuance and delivery, of the shares shall have been fully complied with.

 

3.9       The total amount of shares with respect
to which Awards may be granted under the Plan and rights of outstanding Awards (both as to the number of shares subject to the
outstanding Awards and the Option Price(s) or other purchase price(s) of such shares, as applicable) shall be appropriately adjusted
for any increase or decrease in the number of outstanding shares of Common Stock of the Company resulting from payment of a stock
dividend on the Common Stock, a stock split or subdivision or combination of shares of the Common Stock, or a reorganization or
reclassification of the Common Stock, or any other change in the structure of shares of the Common Stock. The foregoing adjustments
and the manner of application of the foregoing provisions shall be determined by the Board in its sole discretion. Any such adjustment
may provide for the elimination of any fractional shares which might otherwise become subject to an Award. All adjustments made
as the result of the foregoing in respect of each Incentive Stock Option shall be made so that such Incentive Stock Option shall
continue to be an Incentive Stock Option, as defined in Section 422 of the Code.

 

3.10     No director or person acting pursuant
to authority delegated by the Board shall be liable for any action or determination under the Plan made in good faith. The members
of the Board shall be entitled to indemnification by the Company in the manner and to the extent set forth in the Company’s
Articles of Incorporation, as amended, Bylaws or as otherwise provided from time to time regarding indemnification of Directors.

 

3.11     The Board shall be authorized to make
adjustments in any performance based criteria or in the other terms and conditions of outstanding Awards in recognition of unusual
or nonrecurring events affecting the Company (or any Affiliate, if applicable) or its financial statements or changes in applicable
laws, regulations or accounting principles. The Board may correct any defect, supply any omission or reconcile any inconsistency
in the Plan or any Award Agreement in the manner and to the extent it shall deem necessary or desirable to reflect any such adjustment.
In the event the Company (or any Affiliate, if applicable) shall assume outstanding employee benefit awards or the right or obligation
to make future such awards in connection with the acquisition of another corporation or business entity, the Board may, in its
sole discretion, make such adjustments in the terms of outstanding Awards under the Plan as it shall deem appropriate.

 

3.12     Subject to the express provisions of
the Plan, the Board shall have full power and authority to determine whether, to what extent and under what circumstances any outstanding
Award shall be terminated, canceled, forfeited or suspended. Notwithstanding the foregoing or any other provision of the Plan or
an Award Agreement, all Awards to any Participant that are subject to any restriction or have not been earned or exercised in full
by the Participant shall be terminated and canceled if the Participant is terminated for cause, as determined by the Board in its
sole discretion.

 

    Page 7 of 16

     

    

 

ARTICLE IV -- INCENTIVE STOCK OPTIONS

 

4.1      The Board, in its sole discretion, may
from time to time on or after the Effective Date grant Incentive Stock Options to Eligible Employees, subject to the provisions
of this Article IV and Articles III and VI and subject to the following conditions:

 

(a)      Incentive Stock Options shall
be granted only to Eligible Employees, each of whom may be granted one or more of such Incentive Stock Options at such time or
times determined by the Board.

 

(b)    The Option Price per share
of Common Stock for an Incentive Stock Option shall be set in the Award Agreement, but shall not be less than (i) one hundred percent
(100%) of the Fair Market Value of the Common Stock at the Grant Date, or (ii) in the case of an Incentive Stock Option granted
to a Ten Percent Stockholder, one hundred ten percent (110%) of the Fair Market Value of the Common Stock at the Grant Date.

 

(c)    An Incentive Stock Option may
be exercised in full or in part from time to time within ten (10) years from the Grant Date, or such shorter period as may be specified
by the Board as the Option Period and set forth in the Award Agreement; provided, however, that, in the case of an Incentive Stock
Option granted to a Ten Percent Stockholder, such period shall not exceed five (5) years from the Grant Date; and further, provided
that, in any event, the Incentive Stock Option shall lapse and cease to be exercisable upon a Termination of Service or within
such period following a Termination of Service as shall have been determined by the Board and set forth in the related Award Agreement;
and provided, further, that such period shall not exceed the period of time ending on the date three (3) months following a Termination
of Service, unless employment shall have terminated:

 

(i)    as a result of Disability, in
which event such period shall not exceed the period of time ending on the date twelve (12) months following a Termination of Service;
or

 

(ii)   as a result of death, or if
death shall have occurred following a Termination of Service (other than as a result of Disability) and during the period that
the Incentive Stock Option was still exercisable, in which event such period may not exceed the period of time ending on the earlier
of the date twelve (12) months after the date of death;

 

and provided, further, that such period
following a Termination of Service or death shall in no event extend beyond the original Option Period of the Incentive Stock Option.

 

(d)    The aggregate Fair Market Value
of the shares of Common Stock with respect to which any Incentive Stock Options (whether under this Plan or any other plan established
by the Company) are first exercisable during any calendar year by any Eligible Employee shall not exceed one hundred thousand dollars
($100,000), determined based on the Fair Market Value(s) of such shares as of their respective Grant Dates; provided, however,
that to the extent permitted under Section 422 of the Code, if the aggregate Fair Market Values of the shares of Common Stock with
respect to which Stock Options intended to be Incentive Stock Options are first exercisable by any Eligible Employee during any
calendar year (whether such Stock Options are granted under this Plan or any other plan established by the Company) exceed one
hundred thousand dollars ($100,000), the Stock Options or portions thereof which exceed such limit (according to the order in which
they were granted) shall be treated as Nonqualified Stock Options.

 

    Page 8 of 16

     

    

 

(e)    No Incentive Stock Options
may be granted more than ten (10) years from the Effective Date.

 

(f)    The Award Agreement for each
Incentive Stock Option shall provide that the Participant shall notify the Company if such Participant sells or otherwise transfers
any shares of Common Stock acquired upon exercise of the Incentive Stock Option within two (2) years of the Grant Date of such
Incentive Stock Option or within one (1) year of the date such shares were acquired upon the exercise of such Incentive Stock Option.

 

4.2      Subject to the limitations of Section
3.4, the maximum aggregate number of shares of Common Stock subject to Incentive Stock Option Awards shall be the maximum aggregate
number of shares available for Awards under the Plan.

 

4.3       The Board may provide for any other terms
and conditions which it determines should be imposed for an Incentive Stock Option to qualify under Section 422 of the Code, as
well as any other terms and conditions not inconsistent with this Article IV or Articles III or VI, as determined in its sole discretion
and set forth in the Award Agreement for such Incentive Stock Option.

 

4.4       Each provision of this Article IV and
of each Incentive Stock Option granted hereunder shall be construed in accordance with the provisions of Section 422 of the Code,
and any provision hereof that cannot be so construed shall be disregarded.

 

ARTICLE V -- NONQUALIFIED
STOCK OPTIONS

 

5.1      The Board, in its sole discretion, may
from time to time on or after the Effective Date grant Nonqualified Stock Options to Eligible Persons, subject to the provisions
of this Article V and Articles III and VI and subject to the following conditions:

 

(a)    Nonqualified Stock Options
may be granted to any Eligible Person, each of whom may be granted one or more of such Nonqualified Stock Options, at such time
or times determined by the Board.

 

(b)    The Option Price per share
of Common Stock for a Nonqualified Stock Option shall be set in the Award Agreement and may be less than one hundred percent (100%)
of the Fair Market Value of the Common Stock at the Grant Date; provided, however, that the exercise price of each Nonqualified
Stock Option granted under the Plan shall in no event be less than the par value per share of the Company’s Common Stock.

 

(c )   A Nonqualified Stock Option may be exercised
in full or in part from time to time within the Option Period specified by the Board and set forth in the Award Agreement; provided,
however, that, in any event, the Nonqualified Stock Option shall lapse and cease to be exercisable upon a Termination of Service
or within such period following a Termination of Service as shall have been determined by the Board and set forth in the related
Award Agreement.

 

5.2      The Board may provide for any other
terms and conditions for a Nonqualified Stock Option not inconsistent with this Article V or Articles III or VI, as determined
in its sole discretion and set forth in the Award Agreement for such Nonqualified Stock Option. 

 

ARTICLE VI -- INCIDENTS
OF STOCK OPTIONS

 

6.1      Each Stock Option shall be granted subject
to such terms and conditions, if any, not inconsistent with this Plan, as shall be determined by the Board and set forth in the
related Award Agreement, including any provisions as to continued employment as consideration for the grant or exercise of such
Stock Option and any provisions which may be advisable to comply with applicable laws, regulations or rulings of any governmental
authority.

 

    Page 9 of 16

     

    

 

6.2       Except as hereinafter described, a Stock
Option shall not be transferable by the Participant other than by will or by the laws of descent and distribution, and shall be
exercisable during the lifetime of the Participant only by the Participant or the Participant’s guardian or legal representative.
In the event of the death of a Participant, any unexercised Stock Options may be exercised to the extent otherwise provided herein
or in such Participant’s Award Agreement by the executor or personal representative of such Participant’s estate or
by any person who acquired the right to exercise such Stock Options by bequest under the Participant’s will or by inheritance.
The Board, in its sole discretion, may at any time permit a Participant to transfer a Nonqualified Stock Option for no consideration
to or for the benefit of one or more members of the Participant’s Immediate Family (including, without limitation, to a trust
for the benefit of the Participant and/or one or more members of such Participant’s Immediate Family or a corporation, partnership
or limited liability company established and controlled by the Participant and/or one or more members of such Participant’s
Immediate Family), subject to such limits as the Board may establish. The transferee of such Nonqualified Stock Option shall remain
subject to all terms and conditions applicable to such Nonqualified Stock Option prior to such transfer. The foregoing right to
transfer the Nonqualified Stock Option, if granted by the Board shall apply to the right to consent to amendments to the Award
Agreement.

 

6.3      Shares of Common Stock purchased upon
exercise of a Stock Option shall be paid for in such amounts, at such times and upon such terms as shall be determined by the
Board, subject to limitations set forth in the Stock Option Award Agreement. The Board may, in its sole discretion, permit the
exercise of a Stock Option by payment in cash or by tendering shares of Common Stock (either by actual delivery of such shares
or by attestation), or any combination thereof, as determined by the Board. In the sole discretion of the Board, payment in shares
of Common Stock also may be made with shares received upon the exercise or partial exercise of the Stock Option, whether or not
involving a series of exercises or partial exercises and whether or not share certificates for such shares surrendered have been
delivered to the Participant. The Board also may, in its sole discretion, permit the payment of the exercise price of a Stock
Option by the voluntary surrender of all or a portion of the Stock Option. Shares of Common Stock previously held by the Participant
and surrendered in payment of the Option Price of a Stock Option shall be valued for such purpose at the Fair Market Value thereof
on the date the Stock Option is exercised.

 

6.4      The holder of a Stock Option shall have
no rights as a shareholder with respect to any shares covered by the Stock Option (including, without limitation, any voting rights,
the right to inspect or receive the Company’s balance sheets or financial statements or any rights to receive dividends or
non-cash distributions with respect to such shares) until such time as the holder has exercised the Stock Option and then only
with respect to the number of shares which are the subject of the exercise. No adjustment shall be made for dividends or other
rights for which the record date is prior to the date such stock certificate is issued.

 

6.5       The Board may permit the voluntary surrender
of all or a portion of any Stock Option granted under the Plan to be conditioned upon the granting to the Participant of a new
Stock Option for the same or a different number of shares of Common Stock as the Stock Option surrendered, or may require such
voluntary surrender as a condition precedent to a grant of a new Stock Option to such Participant. Subject to the provisions of
the Plan, such new Stock Option shall be exercisable at such Option Price, during such Option Period and on such other terms and
conditions as are specified by the Board at the time the new Stock Option is granted. Upon surrender, the Stock Options surrendered
shall be canceled and the shares of Common Stock previously subject to them shall be available for the grant of other Stock Options.

 

6.6       The
Board may at any time offer to purchase a Participant’s outstanding Stock Option for a payment equal to the value of such
Stock Option payable in cash, shares of Common Stock or Restricted Stock or other property upon surrender of the Participant’s
Stock Option, based on such terms and conditions as the Board shall establish and communicate to the Participant at the time that
such offer is made. 

 

6.7      The Board shall have the discretion,
exercisable either at the time the Award is granted or at the time the Participant discontinues employment, to establish as a
provision applicable to the exercise of one or more Stock Options that, during a limited period of exercisability following a
Termination of Service, the Stock Option may be exercised not only with respect to the number of shares of Common Stock for which
it is exercisable at the time of the Termination of Service but also with respect to one or more subsequent installments for which
the Stock Option would have become exercisable had the Termination of Service not occurred. 

 

    Page 10 of 16

     

    

 

ARTICLE VII -- RESTRICTED
STOCK 

 

7.1      The Board, in its sole discretion, may
from time to time on or after the Effective Date award shares of Restricted Stock to Eligible Persons as a reward for past service
and an incentive for the performance of future services that will contribute materially to the successful operation of the Company
and its Affiliates, subject to the terms and conditions set forth in this Article VII.

 

7.2       The Board shall determine the terms and
conditions of any Award of Restricted Stock, which shall be set forth in the related Award Agreement, including without limitation:

 

(a)   the purchase price, if
any, to be paid for such Restricted Stock, which may be zero, subject to such minimum consideration as may be required by applicable
law;

 

(b)   the duration of the Restriction
Period or Restriction Periods with respect to such Restricted Stock and whether any events may accelerate or delay the end of such
Restriction Period(s);

 

(c)   the circumstances upon
which the restrictions or limitations shall lapse, and whether such restrictions or limitations shall lapse as to all shares of
Restricted Stock at the end of the Restriction Period or as to a portion of the shares of Restricted Stock in installments during
the Restriction Period by means of one or more vesting schedules;

 

(d)   whether such Restricted
Stock is subject to repurchase by the Company or to a right of first refusal at a predetermined price or if the Restricted Stock
may be forfeited entirely under certain conditions;

 

(e)    whether any performance
goals may apply to a Restriction Period to shorten or lengthen such period; and

 

(f)    whether dividends and other
distributions with respect to such Restricted Stock are to be paid currently to the Participant or withheld by the Company for
the account of the Participant.

 

7.3       Awards of Restricted Stock must be accepted
within a period of thirty (30) days after the Grant Date (or such shorter or longer period as the Board may specify at such time)
by executing an Award Agreement with respect to such Restricted Stock and tendering the purchase price, if any. A prospective recipient
of an Award of Restricted Stock shall not have any rights with respect to such Award, unless such recipient has executed an Award
Agreement with respect to such Restricted Stock, has delivered a fully executed copy thereof to the Board and has otherwise complied
with the applicable terms and conditions of such Award.

 

7.4        In the sole discretion of the Board and
as set forth in the Award Agreement for an Award of Restricted Stock, all shares of Restricted Stock held by a Participant and
still subject to restrictions shall be forfeited by the Participant upon the Participant’s Termination of Service and shall
be reacquired, canceled and retired by the Company. Notwithstanding the foregoing, unless otherwise provided in an Award Agreement
with respect to an Award of Restricted Stock, in the event of the death, Disability or Retirement of a Participant during the Restriction
Period, or in other cases of special circumstances (including hardship or other special circumstances of a Participant whose employment
is involuntarily terminated), the Board may elect to waive in whole or in part any remaining restrictions with respect to all or
any part of such Participant’s Restricted Stock, if it finds that a waiver would be appropriate.

 

    Page 11 of 16

     

    

 

7.5       Except as otherwise provided in this
Article VII, no shares of Restricted Stock received by a Participant shall be sold, exchanged, transferred, pledged, hypothecated
or otherwise disposed of during the Restriction Period.

 

7.6       Upon an Award of Restricted Stock to
a Participant, a certificate or certificates representing the shares of such Restricted Stock will be issued to and registered
in the name of the Participant. Unless otherwise determined by the Board, such certificate or certificates will be held in custody
by the Company until (i) the Restriction Period expires and the restrictions or limitations lapse, in which case one or more certificates
representing such shares of Restricted Stock that do not bear a restrictive legend (other than any legend as required under applicable
federal or state securities laws) shall be delivered to the Participant, or (ii) a prior forfeiture by the Participant of the shares
of Restricted Stock subject to such Restriction Period, in which case the Company shall cause such certificate or certificates
to be canceled and the shares represented thereby to be retired, all as set forth in the Participant’s Award Agreement. It
shall be a condition of an Award of Restricted Stock that the Participant deliver to the Company a stock power endorsed in blank
relating to the shares of Restricted Stock to be held in custody by the Company.

 

7.7       Except as provided in this Article VII
or in the related Award Agreement, a Participant receiving an Award of shares of Restricted Stock Award shall have, with respect
to such shares, all rights of a shareholder of the Company, including the right to vote the shares and the right to receive any
distributions, unless and until such shares are otherwise forfeited by such Participant; provided, however, the Board may require
that any cash dividends with respect to such shares of Restricted Stock be automatically reinvested in additional shares of Restricted
Stock subject to the same restrictions as the underlying Award, or may require that cash dividends and other distributions on Restricted
Stock be withheld by the Company or its Affiliates for the account of the Participant. The Board shall determine whether interest
shall be paid on amounts withheld, the rate of any such interest, and the other terms applicable to such withheld amounts.

 

ARTICLE VIII -- STOCK AWARDS

 

8.1       The Board, in its sole discretion, may
from time to time on or after the Effective Date grant Stock Awards to Eligible Persons in payment of compensation that has been
earned or as compensation to be earned, including without limitation compensation awarded or earned concurrently with or prior
to the grant of the Stock Award, subject to the terms and conditions set forth in this Article VIII.

 

8.2       For the purposes of this Plan, in determining
the value of a Stock Award, all shares of Common Stock subject to such Stock Award shall be set in the Award Agreement and may
be less than one hundred percent (100%) of the Fair Market Value of the Common Stock at the Grant Date.

 

8.3       Unless otherwise determined by the Board
and set forth in the related Award Agreement, shares of Common Stock subject to a Stock Award will be issued, and one or more certificates
representing such shares will be delivered, to the Participant as soon as practicable following the Grant Date of such Stock Award.
Upon the issuance of such shares and the delivery of one or more certificates representing such shares to the Participant, such
Participant shall be and become a shareholder of the Company fully entitled to receive dividends, to vote and to exercise all other
rights of a shareholder of the Company. Notwithstanding any other provision of this Plan, unless the Board expressly provides otherwise
with respect to a Stock Award, as set forth in the related Award Agreement, no Stock Award shall be deemed to be an outstanding
Award for purposes of the Plan.

 

ARTICLE IX -- PERFORMANCE SHARES

 

9.1       The Board, in its sole discretion, may
from time to time on or after the Effective Date award Performance Shares to Eligible Persons as an incentive for the performance
of future services that will contribute materially to the successful operation of the Company and its Affiliates, subject to the
terms and conditions set forth in this Article IX.

 

    Page 12 of 16

     

    

 

9.2       The Board shall determine the terms and
conditions of any Award of Performance Shares, which shall be set forth in the related Award Agreement, including without limitation:

 

(a)    the purchase price, if any,
to be paid for such Performance Shares, which may be zero, subject to such minimum consideration as may be required by applicable
law;

 

(b)    the performance period (the
“Performance Period”) and/or performance objectives (the “Performance Objectives”) applicable to such Awards;

 

(c)    the number of Performance Shares
that shall be paid to the Participant if the applicable Performance Objectives are exceeded or met in whole or in part; and

 

(d)    the form of settlement of a
Performance Share.

 

9.3       At any date, each Performance Share shall
have a value equal to the Fair Market Value of a share of Common Stock.

 

9.4       Performance
Periods may overlap, and Participants may participate simultaneously with respect to Performance Shares for which different Performance
Periods are prescribed. 

 

9.5       Performance Objectives may vary from
Participant to Participant and between Awards and shall be based upon such performance criteria or combination of factors as the
Board may deem appropriate, including, but not limited to, minimum earnings per share or return on equity. If during the course
of a Performance Period there shall occur significant events which the Board expects to have a substantial effect on the applicable
Performance Objectives during such period, the Board may revise such Performance Objectives.

 

9.6       In the sole discretion of the Board and
as set forth in the Award Agreement for an Award of Performance Shares, all Performance Shares held by a Participant and not earned
shall be forfeited by the Participant upon the Participant’s Termination of Service. Notwithstanding the foregoing, unless
otherwise provided in an Award Agreement with respect to an Award of Performance Shares, in the event of the death, Disability
or Retirement of a Participant during the applicable Performance Period, or in other cases of special circumstances (including
hardship or other special circumstances of a Participant whose employment is involuntarily terminated), the Board may determine
to make a payment in settlement of such Performance Shares at the end of the Performance Period, based upon the extent to which
the Performance Objectives were satisfied at the end of such period and pro-rated for the portion of the Performance Period during
which the Participant was employed by the Company or an Affiliate; provided, however, that the Board may provide for an earlier
payment in settlement of such Performance Shares in such amount and under such terms and conditions as the Board deems appropriate
or desirable.

 

9.7       The settlement of a Performance Share
shall be made in cash, whole shares of Common Stock or a combination thereof and shall be made as soon as practicable after the
end of the applicable Performance Period. Notwithstanding the foregoing, the Board in its sole discretion may allow a Participant
to defer payment in settlement of Performance Shares on terms and conditions approved by the Board and set forth in the related
Award Agreement entered into in advance of the time of receipt or constructive receipt of payment by the Participant.

 

9.8       Performance Shares shall not be transferable
by the Participant. The Board shall have the authority to place additional restrictions on the Performance Shares including, but
not limited to, restrictions on transfer of any shares of Common Stock that are delivered to a Participant in settlement of any
Performance Shares.

 

    Page 13 of 16

     

    

 

ARTICLE X -- CHANGES OF CONTROL OR OTHER
FUNDAMENTAL CHANGES

 

10.1     Upon the occurrence of a Change of Control
and unless otherwise provided in the Award Agreement with respect to a particular Award:

 

(a)    all
outstanding Stock Options shall become immediately exercisable in full, subject to any appropriate adjustments in the number of
shares subject to the Stock Option and the Option Price, and shall remain exercisable for the remaining Option Period, regardless
of any provision in the related Award Agreement limiting the exercisability of such Stock Option or any portion thereof for any
length of time;

 

(b)    all outstanding Performance
Shares with respect to which the applicable Performance Period has not been completed shall be paid out as soon as practicable
as follows:

 

(i)    all Performance Objectives applicable
to the Award of Performance Shares shall be deemed to have been satisfied to the extent necessary to earn one hundred percent (100%)
of the Performance Shares covered by the Award;

 

(ii)   the applicable Performance Period
shall be deemed to have been completed upon occurrence of the Change of Control;

 

(iii)  the payment to the Participant
in settlement of the Performance Shares shall be the amount determined by the Board, in its sole discretion, or in the manner stated
in the Award Agreement, as multiplied by a fraction, the numerator of which is the number of full calendar months of the applicable
Performance Period that have elapsed prior to occurrence of the Change of Control, and the denominator of which is the total number
of months in the original Performance Period; and

 

(iv)  upon the making of any
such payment, the Award Agreement as to which it relates shall be deemed terminated and of no further force and effect.

 

(c)    all outstanding shares of Restricted
Stock with respect to which the restrictions have not lapsed shall be deemed vested, and all such restrictions shall be deemed
lapsed and the Restriction Period ended.

 

10.2     Anything contained herein to the contrary
notwithstanding, upon the dissolution or liquidation of the Company, each Award granted under the Plan and then outstanding shall
terminate; provided, however, that following the adoption of a plan of dissolution or liquidation, and in any event prior to the
effective date of such dissolution or liquidation, each such outstanding Award granted hereunder shall be exercisable in full and
all restrictions shall lapse, to the extent set forth in Section 10.1(a), (b) and (c) above.

 

10.3     After the merger of one or more corporations
into the Company or any Affiliate, any merger of the Company into another corporation, any consolidation of the Company or any
Affiliate of the Company and one or more corporations, or any other corporate reorganization of any form involving the Company
as a party thereto and involving any exchange, conversion, adjustment or other modification of the outstanding shares of the Common
Stock, each Participant shall, at no additional cost, be entitled, upon any exercise of such Participant’s Stock Option,
to receive, in lieu of the number of shares as to which such Stock Option shall then be so exercised, the number and class of shares
of stock or other securities or such other property to which such Participant would have been entitled to pursuant to the terms
of the agreement of merger or consolidation or reorganization, if at the time of such merger or consolidation or reorganization,
such Participant had been a holder of record of a number of shares of Common Stock equal to the number of shares as to which such
Stock Option shall then be so exercised. Comparable rights shall accrue to each Participant in the event of successive mergers,
consolidations or reorganizations of the character described above. The Board may, in its sole discretion, provide for similar
adjustments upon the occurrence of such events with regard to other outstanding Awards under this Plan. The foregoing adjustments
and the manner of application of the foregoing provisions shall be determined by the Board in its sole discretion. Any such adjustment
may provide for the elimination of any fractional shares which might otherwise become subject to an Award. All adjustments made
as the result of the foregoing in respect of each Incentive Stock Option shall be made so that such Incentive Stock Option shall
continue to be an Incentive Stock Option, as defined in Section 422 of the Code.

 

    Page 14 of 16

     

    

 

ARTICLE XI -- AMENDMENT
AND TERMINATION

 

11.1     Subject to the provisions of Section
11.2, the Board of Directors at any time and from time to time may amend or terminate the Plan as may be necessary or desirable
to implement or discontinue the Plan or any provision hereof. To the extent required by the Act or the Code, however, no amendment,
without approval by the Company’s shareholders, shall:

 

(a)    materially alter the group
of persons eligible to participate in the Plan;

 

(b)    except as provided in Section
3.4, change the maximum aggregate number of shares of Common Stock that are available for Awards under the Plan;

 

(c)    alter the class of individuals
eligible to receive an Incentive Stock Option or increase the limit on Incentive Stock Options set forth in Section 4.1(d) or the
value of shares of Common Stock for which an Eligible Employee may be granted an Incentive Stock Option.

 

11.2     No amendment to or discontinuance of
the Plan or any provision hereof by the Board of Directors or the shareholders of the Company shall, without the written consent
of the Participant, adversely affect (in the sole discretion of the Board) any Award theretofore granted to such Participant under
this Plan; provided, however, that the Board retains the right and power to:

 

(a)    annul any Award if the Participant
is terminated for cause as determined by the Board; and

 

(b)    convert any outstanding Incentive
Stock Option to a Nonqualified Stock Option.

 

11.3     If a
Change of Control has occurred, no amendment or termination shall impair the rights of any person with respect to an outstanding
Award as provided in Article X.

 

ARTICLE XII -- MISCELLANEOUS
PROVISIONS

 

12.1     Nothing in the Plan or any Award granted
hereunder shall confer upon any Participant any right to continue in the employ of the Company or its Affiliates or to serve as
a Director or shall interfere in any way with the right of the Company or its Affiliates or the shareholders of the Company, as
applicable, to terminate the employment of a Participant or to release or remove a Director at any time. Unless specifically provided
otherwise, no Award granted under the Plan shall be deemed salary or compensation for the purpose of computing benefits under
any employee benefit plan or other arrangement of the Company or its Affiliates for the benefit of their respective employees
unless the Company shall determine otherwise. No Participant shall have any claim to an Award until it is actually granted under
the Plan and an Award Agreement has been executed and delivered to the Company. To the extent that any person acquires a right
to receive payments from the Company under the Plan, such right shall, except as otherwise provided by the Board, be no greater
than the right of an unsecured general creditor of the Company. All payments to be made hereunder shall be paid from the general
funds of the Company, and no special or separate fund shall be established and no segregation of assets shall be made to assure
payment of such amounts, except as provided in Article VII with respect to Restricted Stock and except as otherwise provided by
the Board. 

 

    Page 15 of 16

     

    

 

12.2     The Plan
and the grant of Awards shall be subject to all applicable federal and state laws, rules, and regulations and to such
approvals by any government or regulatory agency as may be required. Any provision herein relating to compliance with Rule
16b-3 under the Act shall not be applicable with respect to participation in the Plan by Participants who are not subject to
Section 16 of the Act.

 

12.3     The terms of the Plan shall be binding
upon the Company, its successors and assigns.

 

12.4     Neither a Stock Option nor any other
type of equity-based compensation provided for hereunder shall be transferable except as provided for in Section 6.2. In addition
to the transfer restrictions otherwise contained herein, additional transfer restrictions shall apply to the extent required by
federal or state securities laws. If any Participant makes such a transfer in violation hereof, any obligation hereunder of the
Company to such Participant shall terminate immediately.

 

12.5    This Plan and all actions taken hereunder
shall be governed by the laws of the State of Nevada.

 

12.6     Each Participant exercising an Award
hereunder agrees to give the Board prompt written notice of any election made by such Participant under Section 83(b) of the Code,
or any similar provision thereof.

 

12.7     If any provision of this Plan or an
Award Agreement is or becomes or is deemed invalid, illegal or unenforceable in any jurisdiction, or would disqualify the Plan
or any Award Agreement under any law deemed applicable by the Board, such provision shall be construed or deemed amended to conform
to applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Board, materially altering
the intent of the Plan or the Award Agreement, it shall be stricken, and the remainder of the Plan or the Award Agreement shall
remain in full force and effect. 

 

12.8     The grant of an Award pursuant to this
Plan shall not affect in any way the right or power of the Company or any of its Affiliates to make adjustments, reclassification,
reorganizations, or changes of its capital or business structure, or to merge or consolidate, or to dissolve, liquidate or sell,
or to transfer all or part of its business or assets.

 

12.9     The Plan is not subject to the provisions
of ERISA or qualified under Section 401(a) of the Code.

 

12.10    If a Participant is required to pay to
the Company an amount with respect to income and employment tax withholding obligations in connection with (i) the exercise of
a Nonqualified Stock Option, (ii) certain dispositions of Common Stock acquired upon the exercise of an Incentive Stock Option,
or (iii) the receipt of Common Stock pursuant to any other Award, then the issuance of Common Stock to such Participant shall not
be made (or the transfer of shares by such Participant shall not be required to be effected, as applicable) unless such withholding
tax or other withholding liabilities shall have been satisfied in a manner acceptable to the Company. To the extent provided by
the terms of an Award Agreement, the Participant may satisfy any federal, state or local tax withholding obligation relating to
the exercise or acquisition of Common Stock under an Award by any of the following means (in addition to the Company’s right
to withhold from any compensation paid to the Participant by the Company) or by a combination of such means: (i) tendering a cash
payment; (ii) authorizing the Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to
the Participant as a result of the exercise or acquisition of Common Stock under the Award, provided, however, that no shares of
Common Stock are withheld with a value exceeding the minimum amount of tax required to be withheld by law; or (iii) delivering
to the Company owned and unencumbered shares of Common Stock.

 

Adopted by the Board of Directors on
December 27, 2013, and ratified by the stockholders of the Company on February 13, 2014. Amended by the Board of
Directors on February 8, 2016 and ratified by the stockholders of the Company on March 29, 2016.

 

Page 16 of 16

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