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Document

Exhibit 4.7
RLJ LODGING TRUST
DESCRIPTION OF COMMON SHARES
 
The following summary of our common shares and certain provisions of Maryland law and our declaration of trust and bylaws does not purport to be complete and is subject to and qualified in its entirety by reference to Maryland law and to our declaration of trust and bylaws, copies of which are filed as exhibits to this Annual Report on Form 10-K. 
 
General
 
Our declaration of trust provides that we may issue up to 450,000,000 common shares, par value $0.01 per share. Our declaration of trust authorizes our board of trustees to amend our declaration of trust to increase or decrease the aggregate number of authorized common shares or the number of shares of any class or series without shareholder approval. 
 
Maryland law provides, and our declaration of trust provides, that none of our shareholders is personally liable for any of our obligations solely as a result of that shareholder’s status as a shareholder.
 
Voting Rights of Common Shares
 
Subject to the provisions of our declaration of trust regarding the restrictions on transfer and ownership of shares of beneficial interest and except as may otherwise be specified in the terms of any class or series of shares of beneficial interest, each outstanding common share entitles the holder to one vote on all matters submitted to a vote of shareholders, including the election of trustees, and, except as provided with respect to any other class or series of shares of beneficial interest, the holders of such common shares will possess the exclusive voting power. There is no cumulative voting in the election of trustees.
 
Under the Maryland statute governing real estate investment trusts formed under the laws of that state, or the Maryland REIT law, a Maryland real estate investment trust generally cannot amend its declaration of trust or merge with another entity unless declared advisable by a majority of its board of trustees and approved by the affirmative vote of shareholders holding at least two-thirds of the shares entitled to vote on the matter unless a lesser percentage (but not less than a majority of all the votes entitled to be cast on the matter) is set forth in the real estate investment trust’s declaration of trust. Our declaration of trust provides that these actions (other than certain amendments to the provisions of the declaration of trust related to the removal of trustees, the restrictions on ownership and transfer of shares and the termination of our existence) may be taken if declared advisable by a majority of our board of trustees and approved by the vote of shareholders holding a majority of the votes entitled to be cast on the matter.
 
Dividends, Distributions, Liquidation and Other Rights
 
Subject to the preferential rights of any other class or series of shares and to the provisions of our declaration of trust regarding the restrictions on transfer and ownership of shares, holders of our common shares are entitled to receive dividends on such common shares if, as and when authorized by the board of trustees, and declared by us out of assets legally available therefor. Such holders also are entitled to share ratably in the assets of our company legally available for distribution to shareholders in the event of our liquidation, dissolution or winding up after payment or establishment of reserves for all debts and other liabilities of our company and any shares with preferential rights related thereto.
 
Holders of common shares have no preference, conversion, exchange, sinking fund or redemption rights, have no preemptive rights to subscribe for any securities of our company and have no appraisal rights. Subject to the provisions of our declaration of trust regarding the restrictions on transfer and ownership of shares, common shares will have equal dividend, liquidation and other rights.
 
Power to Reclassify Our Unissued Common Shares or Preferred Shares
 
Our declaration of trust authorizes our board of trustees to classify and reclassify any unissued common shares or preferred shares into other classes or series of shares and to establish the number of shares in each class or series and to set the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption for each such class or series.
 
Power to Increase or Decrease Authorized Common Shares and Issue Additional Common and Preferred Shares
 

We believe that the power of our board of trustees to amend our declaration of trust to increase or decrease the number of authorized shares, to issue additional authorized but unissued common shares or preferred shares and to classify or reclassify unissued common shares or preferred shares and thereafter to cause to issue such classified or reclassified shares will provide us with increased flexibility in structuring possible future financings and acquisitions and in meeting other needs that might arise. The additional classes or series will be available for issuance without further action by our shareholders, unless such action is required by applicable law or the rules of any stock exchange or automated quotation system on which our securities may be listed or traded.

Restrictions on Ownership and Transfer  
 With certain exceptions, our declaration of trust generally prohibits any person or entity (other than a person or entity who has been granted an exception) from directly or indirectly, beneficially or constructively, owning more than 9.8% of the aggregate of our outstanding common shares, by value or by number of shares, whichever is more restrictive. However, our declaration of trust permits (but does not require) exceptions to be made for shareholders provided that our board of trustees determines that such exceptions will not jeopardize our qualification as a REIT. For more information regarding these ownership restrictions and certain other restrictions intended to protect our qualification as a REIT, see “Restrictions on Ownership and Transfer.”
Stock Exchange Listing 
Our common shares are listed on the NYSE under the symbol “RLJ.”
Transfer Agent and Registrar 
The transfer agent and registrar for our common shares is Wells Fargo Shareowners Services, a division of Wells Fargo Bank N.A. 
Certain Provisions of Maryland Law and Our Declaration of Trust and Bylaws
Our Board of Trustees 
Our declaration of trust and bylaws provide that the number of trustees of our company may be established by our board of trustees, but may not be fewer than two nor more than 15. Our declaration of trust and bylaws provide that any vacancy, including a vacancy created by an increase in the number of trustees, may be filled by a majority of the remaining trustees, even if the remaining trustees do not constitute a quorum. Any individual elected to fill such vacancy will serve for the remainder of the full term and until a successor is duly elected and qualifies. 
Pursuant to our bylaws, each of our trustees will be elected by our shareholders to serve until the next annual meeting of shareholders and until his or her successor is duly elected and qualifies under Maryland law. Holders of our common shares will have no right to cumulative voting in the election of trustees. Trustees will be elected by a majority of all the votes cast at a meeting of shareholders duly called and at which a quorum is present; provided, however, that if on the record date for such meeting the number of trustee nominees exceeds the number of trustees to be elected, then a plurality of all the votes cast at a meeting of shareholders duly called and at which a quorum is present shall be sufficient. For purposes of the election of trustees, a majority of the votes cast means the number of shares voted for a trustee must exceed the number of shares voted against that trustee. Any incumbent trustee who does not receive a majority of the votes cast by shareholders entitled to vote with respect to the election of that trustee shall tender his or her resignation to the board of trustees within three (3) days after certification of the results, for consideration by the nominating and corporate governance committee of our board of trustees. The nominating and corporate governance committee will make a recommendation to our board of trustees on whether to accept or reject the resignation, or whether other action should be taken. Our board of trustees will act on the recommendation and publicly disclose its decision and the rationale behind it within 90 days from the date of the certification of the election results. The trustee who tenders his or her resignation will not participate in our board of trustee’s decision. Notwithstanding the foregoing, our board of trustees shall be required to accept any resignation tendered by an incumbent trustee if such trustee shall have received more votes against than for his or her election at two consecutive annual meetings of shareholders for the election of trustees at which a quorum was present and the number of trustee nominees equaled the number of trustees to be elected at each such annual meeting of shareholders.
Our bylaws provide that at least a majority of our trustees must be “independent,” with independence being defined in the manner established by our board of trustees and in a manner consistent with listing standards established by the NYSE. 
Removal of Trustees 

 Our declaration of trust provides that, subject to the rights of holders of one or more classes or series of preferred shares to elect or remove one or more trustees, a trustee may be removed only for cause (as defined in our declaration of trust) and only by the affirmative vote of at least two-thirds of the votes entitled to be cast generally in the election of trustees. 
Business Combinations 
Under provisions of the MGCL that apply to Maryland real estate investment trusts, certain “business combinations” (including a merger, consolidation, share exchange or, in certain circumstances specified under the statute, an asset transfer or issuance or reclassification of equity securities) between a Maryland real estate investment trust and any interested shareholder, or an affiliate of such an interested shareholder, are prohibited for five years after the most recent date on which the interested shareholder becomes an interested shareholder. Maryland law defines an interested shareholder as: 
•any person who beneficially owns, directly or indirectly, 10% or more of the voting power of the trust’s outstanding voting shares; or 
•an affiliate or associate of the trust who, at any time within the two-year period prior to the date in question, was the beneficial owner, directly or indirectly, of 10% or more of the voting power of the then-outstanding voting shares of the trust. 
A person is not an interested shareholder under the statute if the board of trustees approves in advance the transaction by which the person otherwise would have become an interested shareholder. In approving a transaction, however, the board of trustees may provide that its approval is subject to compliance at or after the time of the approval, with any terms and conditions determined by the board of trustees. 
After the five-year prohibition, unless, among other conditions, the trust’s common shareholders receive a minimum price (as described under Maryland law) for their shares and the consideration is received in cash or in the same form as previously paid by the interested shareholder for its shares, any business combination between the trust and an interested shareholder generally must be recommended by the board of trustees and approved by the affirmative vote of at least: 
•80% of the votes entitled to be cast by holders of outstanding voting shares of the trust; and 
•two-thirds of the votes entitled to be cast by holders of voting shares of the trust other than shares held by the interested shareholder with whom (or with whose affiliate) the business combination is to be effected or shares held by an affiliate or associate of the interested shareholder. 
These provisions of the MGCL do not apply, however, to business combinations that are approved or exempted by a trust’s board of trustees prior to the time that the interested shareholder becomes an interested shareholder. Our board of trustees, pursuant to the statute, has determined to opt out of the business combination provisions of the MGCL and, consequently, the five-year prohibition and, accordingly, the supermajority vote requirements will not apply to business combinations between us and an interested shareholder, unless our board in the future alters or repeals this resolution. As a result, any person who later becomes an interested shareholder may be able to enter into business combinations with our company without compliance by us with the supermajority vote requirements and the other provisions of the statute. 
Our board of trustees may not determine to become subject to such business combination provisions in the future without shareholder approval. An alteration or repeal of the resolution of our board of trustees will not have any effect on any business combinations that have been consummated or upon any agreements existing at the time of such modification or repeal. 
Control Share Acquisitions 
Maryland law provides that “control shares” of a Maryland real estate investment trust acquired in a “control share acquisition” have no voting rights except to the extent approved at a special meeting of shareholders by the affirmative vote of two-thirds of the votes entitled to be cast on the matter, excluding shares in a Maryland real estate investment trust in respect of which any of the following persons is entitled to exercise or direct the exercise of the voting power of such shares in the election of trustees: (1) a person who makes or proposes to make a control share acquisition; (2) an officer of the trust; or (3) an employee of the trust who is also a trustee of the trust. “Control shares” are voting shares that, if aggregated with all other such shares previously acquired by the acquirer or in respect of which the acquirer is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquirer to exercise voting power in electing trustees within one of the following ranges of voting power: 
•one-tenth or more but less than one-third; 
•one-third or more but less than a majority; or 
•a majority or more of all voting power. 
Control shares do not include shares the acquiring person is then entitled to vote as a result of having previously obtained 

shareholder approval. A “control share acquisition” means the acquisition, directly or indirectly, of ownership of, or the power to direct the exercise of voting power with respect to, issued and outstanding control shares, subject to certain exceptions.
A person who has made or proposes to make a control share acquisition, upon satisfaction of certain conditions (including an undertaking to pay expenses and making an “acquiring person statement” as described in the MGCL), may compel our board of trustees to call a special meeting of shareholders to be held within 50 days of demand to consider the voting rights of the control shares. If no request for a special meeting is made, we may present the question at any shareholders meeting. 
 If voting rights of control shares are not approved at the meeting or if the acquiring person does not deliver an “acquiring person statement” as required by Maryland law, then, subject to certain conditions and limitations, the trust may redeem any or all of the control shares (except those for which voting rights have previously been approved) for fair value. Fair value is determined, without regard to the absence of voting rights for the control shares, as of the date of the last control share acquisition by the acquirer or of any meeting of shareholders at which the voting rights of such shares are considered and not approved. If voting rights for control shares are approved at a shareholders meeting and the acquirer becomes entitled to vote a majority of the shares entitled to vote, all other shareholders may exercise appraisal rights, unless appraisal rights are eliminated under the declaration of trust. Our declaration of trust eliminates all appraisal rights of shareholders. The control share acquisition statute does not apply (1) to shares acquired in a merger, consolidation or share exchange if we are a party to the transaction or (2) to acquisitions approved or exempted by the declaration of trust or bylaws of the trust. 
Our bylaws contain a provision exempting from the control share acquisition statute any and all acquisitions by any person of our common shares. Our board of trustees may not amend or eliminate such provision without shareholder approval. 
Subtitle 8 
Subtitle 8 of Title 3 of the MGCL permits a Maryland real estate investment trust with a class of equity securities registered under the Exchange Act and at least three independent trustees to elect to be subject, by provision in its declaration of trust or bylaws or a resolution of its board of trustees and notwithstanding any contrary provision in the declaration of trust or bylaws, to any or all of the following five provisions: 
•a classified board; 
•a two-thirds shareholder vote requirement for removing a trustee; 
•a requirement that the number of trustees be fixed only by vote of the trustees; 
•a requirement that a vacancy on the board be filled only by the remaining trustees and for the remainder of the full term of the class of trustees in which the vacancy occurred; and 
•a requirement that requires the request of the holders of at least a majority of all votes entitled to be cast to call a special meeting of shareholders. 
We have opted out of all of the provisions of Subtitle 8 through provisions contained in our declaration of trust, as amended and supplemented, and must receive the approval of a majority of shareholders casting votes on the matter to opt in to any of the provisions of Subtitle 8; however,  pursuant to provisions in our declaration of trust and bylaws unrelated to Subtitle 8, we currently (1) require the affirmative vote of the holders of not less than two-thirds of all of the votes entitled to be cast on the matter for the removal of any trustee from our board, which removal will be allowed only for cause, and (2) require, unless called by the Executive Chairman of our board of trustees, the President or Chief Executive Officer or our board of trustees, the written request of shareholders entitled to cast a majority of all votes entitled to be cast at such meeting to call a special meeting. In addition, provisions in our declaration of trust and bylaws provide that the number of trustees may be determined by our board and that our trustees may fill vacancies on our board and, therefore, as a practical matter, shareholders may not have the ability to determine the number of trustees on our board or to fill vacancies on our board other than vacancies resulting from the removal of a trustee. 
Amendment of Our Declaration of Trust and Bylaws and Approval of Extraordinary Transactions 
Under the Maryland REIT law, a Maryland real estate investment trust generally cannot amend its declaration of trust or merge with another entity unless declared advisable by a majority of the board of trustees and approved by the affirmative vote of shareholders entitled to cast at least two-thirds of the votes entitled to be cast on the matter unless a lesser percentage, but not less than a majority of all of the votes entitled to be cast on the matter, is set forth in the real estate investment trust’s declaration of trust. Our declaration of trust provides that such actions (other than certain amendments to the provisions of our declaration of trust related to the removal of trustees, the restrictions on ownership and transfer of our shares and termination of the trust) may be taken if declared advisable by a majority of our board of trustees and approved by the vote of shareholders holding a majority of the votes entitled to be cast on the matter. 

Our bylaws may be altered, amended or repealed, and new bylaws adopted, by the vote of a majority of the board of trustees or by the affirmative vote of shareholders entitled to cast not less than a majority of all the votes entitled to be cast on the matter. 
Meetings of Shareholders 
Under our bylaws, annual meetings of shareholders will be held each year at a date and time as determined by our board of trustees. Special meetings of shareholders may be called only by a majority of the trustees then in office, by the executive chairman of our board of trustees, our president or our chief executive officer. Additionally, subject to the provisions of our bylaws, special meetings of the shareholders shall be called by our secretary upon the written request of shareholders entitled to cast at least a majority of the votes entitled to be cast at such meeting. Only matters set forth in the notice of the special meeting may be considered and acted upon at such a meeting. Maryland law and our bylaws provide that any action required or permitted to be taken at a meeting of shareholders may be taken without a meeting by unanimous written consent, if that consent sets forth that action and is signed by each shareholder entitled to vote on the matter. 
Advance Notice of Trustee Nominations and New Business 
Our bylaws provide that, with respect to an annual meeting of shareholders, nominations of persons for election to our board of trustees and the proposal of business to be considered by shareholders at the annual meeting may be made only: 
•pursuant to our notice of the meeting; 
•by or at the direction of our board of trustees; or 
•by a shareholder who was a shareholder of record both at the time of giving of the notice of the meeting and at the time of the annual meeting, who is entitled to vote at the meeting and who has complied with the advance notice procedures set forth in our bylaws. 
With respect to special meetings of shareholders, only the business specified in our notice of meeting may be brought before the meeting of shareholders. Nominations of persons for election to our board of trustees may be made only: 
•pursuant to our notice of the meeting; 
•by or at the direction of our board of trustees; or 
•provided that our board of trustees has determined that trustees shall be elected at such meeting, by a shareholder who is a shareholder of record both at the time of giving of the notice required by our bylaws and at the time of the meeting, who is entitled to vote at the meeting and who has complied with the advance notice provisions set forth in our bylaws. 
The purpose of requiring shareholders to give advance notice of nominations and other proposals is to afford our board of trustees the opportunity to consider the qualifications of the proposed nominees or the advisability of the other proposals and, to the extent considered necessary by our board of trustees, to inform shareholders and make recommendations regarding the nominations or other proposals. The advance notice procedures also permit a more orderly procedure for conducting our shareholder meetings. Although our bylaws do not give our board of trustees the power to disapprove timely shareholder nominations and proposals, our bylaws may have the effect of precluding a contest for the election of trustees or proposals for other action if the proper procedures are not followed, and of discouraging or deterring a third party from conducting a solicitation of proxies to elect its own slate of trustees to our board of trustees or to approve its own proposal. 
Anti-takeover Effect of Certain Provisions of Maryland Law and Our Declaration of Trust and Bylaws 
The provisions of our declaration of trust on removal of trustees and the advance notice provisions of our bylaws could delay, defer or prevent a transaction or a change in control of our company that might involve a premium price for holders of our common shares or otherwise be in the best interests of our shareholders. Likewise, if our board of trustees were to opt into the business combination provisions of the MGCL or certain of the provisions of Subtitle 8 of Title 3 of the MGCL, with shareholder approval, or if the provision in our bylaws opting out of the control share acquisition provisions of the MGCL were amended or rescinded, these provisions of the MGCL could have similar anti-takeover effects. 
Indemnification and Limitation of Trustees’ and Officers’ Liability 
The Maryland REIT law permits a Maryland real estate investment trust to include in its declaration of trust a provision limiting the liability of its trustees and officers to the trust and its shareholders for money damages except for liability resulting from actual receipt of an improper benefit or profit in money, property or services or active and deliberate dishonesty established by a final judgment as being material to the cause of action. Our declaration of trust contains such a provision that eliminates such liability to the maximum extent permitted by Maryland law. 

The Maryland REIT law permits a Maryland real estate investment trust to indemnify and advance expenses to its trustees, officers, employees and agents to the same extent as permitted by the MGCL for directors and officers of a Maryland corporation. The MGCL permits a corporation to indemnify its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which they may be made or are threatened to be made a party by reason of their service in those or other capacities unless it is established that: 
•the act or omission of the director or officer was material to the matter giving rise to the proceeding and (1) was committed in bad faith or (2) was the result of active and deliberate dishonesty; 
•the director or officer actually received an improper personal benefit in money, property or services; or
•in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful. 
However, under the MGCL, a Maryland corporation may not indemnify a director or officer for an adverse judgment in a suit by or in the right of the corporation or if the director or officer was adjudged liable on the basis that personal benefit was improperly received, unless in either case a court orders indemnification and then only for expenses. 
In addition, the MGCL permits a corporation to advance reasonable expenses to a director or officer upon the corporation’s receipt of: 
•a written affirmation by such director or officer of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification by the corporation; and 
•a written undertaking by such director or officer or on such director’s or officer’s behalf to repay the amount paid or reimbursed by the corporation if it is ultimately determined that the director did not meet the standard of conduct. 
Our declaration of trust and bylaws obligate us, to the maximum extent permitted by Maryland law in effect from time to time, to indemnify and to pay or reimburse reasonable expenses in advance of final disposition of a proceeding to: 
•any present or former trustee or officer (including any individual who, at our request, serves or has served as a director, trustee, officer, partner, member, employee or agent of another real estate investment trust, corporation, partnership, company, joint venture, trust, employee benefit plan or any other enterprise) against any claim or liability to which he or she may become subject by reason of service in such capacity; and 
•any present or former trustee or officer who has been successful in the defense of a proceeding to which he or she was made a party by reason of service in such capacity. 
Our declaration of trust and bylaws also permit us, with the approval of our board of trustees, to indemnify and advance expenses to any person who served a predecessor of ours in any of the capacities described above and to any employee or agent of our company or a predecessor of our company. 
In addition, upon completion of our initial public offering, we entered into indemnification agreements with each of our trustees and executive officers that provide for indemnification to the maximum extent permitted by Maryland law. 
 Insofar as the foregoing provisions permit indemnification of trustees, officers or persons controlling us for liability arising under the Securities Act, we have been informed that, in the opinion of the SEC, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. 
REIT Qualification 
Our declaration of trust provides that our board of trustees may revoke or otherwise terminate our REIT election, without approval of our shareholders, if we determine that it is no longer in our best interests to attempt to qualify, or to continue to qualify, as a REIT. 
Restrictions on Ownership and Transfer
In order to qualify as a REIT under the Internal Revenue Code of 1986, as amended, or the Code, our shares must be beneficially owned by 100 or more persons during at least 335 days of a taxable year of 12 months (other than the first year for which an election to be a REIT has been made) or during a proportionate part of a shorter taxable year. Also, no more than 50% of the value of our outstanding shares (after taking into account options to acquire common shares) may be owned, directly, indirectly, or through attribution, by five or fewer individuals (as defined in the Code to include certain entities) at any time during the last half of a taxable year (other than the first year for which an election to be a REIT has been made).

Because our board of trustees believes that it is essential for us to qualify as a REIT, our declaration of trust, subject to certain exceptions, contains restrictions on the number of our shares of beneficial interest that a person may own. 
In order to assist us in complying with the limitations on the concentration of ownership of our shares imposed by the Code, our declaration of trust generally prohibits any person or entity (other than a person or entity who has been granted an exception) from directly or indirectly, beneficially or constructively, owning more than 9.8% of the aggregate of our outstanding common shares, by value or by number of shares, whichever is more restrictive, or 9.8% of the aggregate of the outstanding preferred shares of any class or series, by value or by number of shares, whichever is more restrictive. However, our declaration of trust permits (but does not require) exceptions to be made for shareholders provided that our board of trustees determines that such exceptions will not jeopardize our qualification as a REIT. 
Our declaration of trust will also prohibit any person from (1) beneficially or constructively owning our shares of beneficial interest that would result in our being “closely held” under Section 856(h) of the Code, (2) transferring our shares if such transfer would result in us being beneficially owned by fewer than 100 persons (determined without regard to any rules of attribution), (3) beneficially or constructively owning our shares that would result in our owning (directly or constructively) 10% or more of the ownership interest in a tenant of our real property if income derived from such tenant for our taxable year would result in more than a de minimis amount of non-qualifying income for purposes of the REIT tests that, taking into account any other non-qualifying gross income of ours, would cause us to fail to satisfy an applicable REIT gross income requirement, and (4) beneficially or constructively owning our shares that would cause us otherwise to fail to qualify as a REIT, including, but not limited to, as a result of any “eligible independent contractor” (as defined in Section 856(d)(9)(A) of the Code) that operates a “qualified lodging facility” (as defined in Section 856(d)(9)(D)(i) of the Code) on behalf of a taxable REIT subsidiary, or TRS, failing to qualify as such. Any person who acquires or attempts or intends to acquire beneficial ownership of our shares that will or may violate any of the foregoing restrictions on transferability and ownership will be required to give notice immediately to us and provide us with such other information as we may request in order to determine the effect of such transfers on our qualification as a REIT. The foregoing restrictions on transferability and ownership will not apply if our board of trustees determines that it is no longer in our best interest to attempt to qualify, or to qualify, or to continue to qualify, as a REIT. In addition, our board of trustees may determine that compliance with the foregoing restrictions is no longer required for our qualification as a REIT. 
Our board of trustees, in its sole discretion, may waive the 9.8% ownership limit for common shares or preferred shares for a shareholder that is not an individual if such shareholder provides information and makes representations to the board that are satisfactory to the board, in its reasonable discretion, to establish that such person’s ownership in excess of the 9.8% limit for common or preferred shares would not jeopardize our qualification as a REIT. As a condition of granting the waiver, our board of trustees, in its sole discretion, may require a ruling from the Internal Revenue Service, or IRS, or an opinion of counsel in either case in form and substance satisfactory to our board of trustees in order to determine or ensure our qualification as a REIT.
In addition, our board of trustees from time to time may increase the share ownership limits. However, the share ownership limits may not be increased if, after giving effect to such increase, five or fewer individuals could own or constructively own in the aggregate, more than 49.9% in value of the shares then outstanding. 
If any transfer of our shares of beneficial interest occurs which, if effective, would result in any person beneficially or constructively owning shares in excess, or in violation, of the above transfer or ownership limitations, known as a prohibited owner, then that number of shares, the beneficial or constructive ownership of which otherwise would cause such person to violate the transfer or ownership limitations (rounded up to the nearest whole share), will be automatically transferred to a charitable trust for the exclusive benefit of a charitable beneficiary, and the prohibited owner will not acquire any rights in such shares. This automatic transfer will be considered effective as of the close of business on the business day before the violative transfer. If the transfer to the charitable trust would not be effective for any reason to prevent the violation of the above transfer or ownership limitations, then the transfer of that number of shares that otherwise would cause any person to violate the above limitations will be void. Shares held in the charitable trust will continue to constitute issued and outstanding shares. The prohibited owner will not benefit economically from ownership of any shares held in the charitable trust, will have no rights to dividends or other distributions and will not possess any rights to vote or other rights attributable to the shares held in the charitable trust. The trustee of the charitable trust will be designated by us and must be unaffiliated with us or any prohibited owner and will have all voting rights and rights to dividends or other distributions with respect to shares held in the charitable trust, and these rights will be exercised for the exclusive benefit of the trust’s charitable beneficiary. Any dividend or other distribution paid before our discovery that shares have been transferred to the trustee will be paid by the recipient of such dividend or distribution to the trustee upon demand, and any dividend or other distribution authorized but unpaid will be paid when due to the trustee. Any dividend or distribution so paid to the trustee will be held in trust for the trust’s charitable beneficiary. Subject to Maryland law, effective as of the date that such shares have been transferred to the charitable trust, the 

trustee, in its sole discretion, will have the authority to: 
•rescind as void any vote cast by a prohibited owner prior to our discovery that such shares have been transferred to the charitable trust; and 
•recast such vote in accordance with the desires of the trustee acting for the benefit of the trust’s charitable beneficiary. 
However, if we have already taken irreversible corporate action, then the trustee will not have the authority to rescind and recast such vote. 
 Within 20 days of receiving notice from us that shares have been transferred to the charitable trust, and unless we buy the shares first as described below, the trustee will sell the shares held in the charitable trust to a person, designated by the trustee, whose ownership of the shares will not violate the share ownership limits in our declaration of trust. Upon the sale, the interest of the charitable beneficiary in the shares sold will terminate and the trustee will distribute the net proceeds of the sale to the prohibited owner and to the charitable beneficiary. The prohibited owner will receive the lesser of: 
•the price paid by the prohibited owner for the shares or, if the prohibited owner did not give value for the shares in connection with the event causing the shares to be held in the charitable trust (for example, in the case of a gift or devise), the market price of the shares on the day of the event causing the shares to be held in the charitable trust; and 
•the price per share received by the trustee from the sale or other disposition of the shares held in the charitable trust (less any commission and other expenses of a sale). 
The trustee may reduce the amount payable to the prohibited owner by the amount of dividends and distributions paid to the prohibited owner and owed by the prohibited owner to the trustee. Any net sale proceeds in excess of the amount payable to the prohibited owner will be paid immediately to the charitable beneficiary. If, before our discovery that our shares have been transferred to the charitable trust, such shares are sold by a prohibited owner, then: 
•such shares will be deemed to have been sold on behalf of the charitable trust; and 
•to the extent that the prohibited owner received an amount for such shares that exceeds the amount that the prohibited owner was entitled to receive as described above, the excess must be paid to the trustee upon demand. 
In addition, shares held in the charitable trust will be deemed to have been offered for sale to us, or our designee, at a price per share equal to the lesser of: 
•the price per share in the transaction that resulted in such transfer to the charitable trust (or, in the case of a gift or devise, the market price at the time of the gift or devise); and 
•the market price on the date we, or our designee, accepts such offer. 
 We may reduce the amount payable to the prohibited owner by the amount of dividends and distributions paid to the prohibited owner and owed by the prohibited owner to the trustee. We may pay the amount of such reduction to the trustee for the benefit of the charitable beneficiary. We will have the right to accept the offer until the trustee has sold the shares held in the charitable trust. Upon such a sale to us, the interest of the charitable beneficiary in the shares sold will terminate and the trustee will distribute the net proceeds of the sale to the prohibited owner and any dividends or other distributions held by the trustee will be paid to the charitable beneficiary. 
All certificates representing our shares will bear a legend referring to the restrictions described above.
Every shareholder of record of more than 5% (or such lower percentage as required by the Code or the regulations promulgated thereunder) in value of the outstanding shares will be required to give written notice to us within 30 days after the end of each taxable year stating the name and address of each actual owner, the number of shares of each class and series of shares that each actual owner beneficially owns and a description of the manner in which such shares are held. Each such shareholder shall provide to us such additional information as we may request in order to determine the effect, if any, of such beneficial ownership on our status as a REIT and to ensure compliance with the ownership limitations. In addition, each shareholder shall upon demand be required to provide to us such information as we may request, in good faith, in order to determine our status as a REIT and to comply with the requirements of any taxing authority or governmental authority or to determine such compliance.
These share ownership limitations could delay, deter or prevent a transaction or a change in control that might involve a premium price for holders of our common shares or might otherwise be in the best interest of our shareholders.Exhibit 4.1

 

BIOSECURITY TECHNOLOGY, INC.

2021 EQUITY INCENTIVE PLAN

 

1. Purpose.
The purpose of this Equity Incentive Plan (the “Plan”) is to advance the interests of [Biosecurity Technology,
Inc.] (the “Company”) and its Affiliates (as defined below) by inducing eligible individuals of outstanding
ability and potential to join and remain with, or to provide consulting or advisory services to, the Company or its Affiliates,
by encouraging and enabling eligible employees, Outside Directors (as defined below), consultants, and advisors to acquire proprietary
interests in the Company, and by providing participating eligible employees, Outside Directors, consultants, and advisors with
an additional incentive to promote the success of the Company. These purposes are accomplished by providing for the granting of
Incentive Stock Options, Nonqualified Stock Options, Reload Options, Stock Appreciation Rights, and Restricted Stock (all as defined
below) to eligible employees, Outside Directors, consultants, and advisors.

 

2. Definitions.
As used in the Plan, the following terms have the meanings indicated:

 

(a) “Affiliate”
means a “parent corporation” or a “subsidiary corporation” (as set forth in Code Sections 424(e) and 424(f),
respectively) of the Company.

 

(b) “Applicable
Withholding Taxes” means the aggregate minimum amount of federal, state, local, and foreign income, payroll, and other
taxes that an Employer is required to withhold in connection with the grant, vesting, or exercise of any Award.

 

(c) “Award”
means an Incentive Stock Option, a Nonqualified Stock Option, a Reload Option, a Stock Appreciation Right, or Restricted Stock.

 

(d) “Beneficiary”
means the person or entity designated by the Participant, in a form approved by the Company, to exercise the Participant’s
rights with respect to an Award after the Participant’s death. If the Participant does not validly designate a Beneficiary,
or if the designated person no longer exists, then the Participant’s Beneficiary shall be his or her estate.

 

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

 

(f) “Cause”
shall have the same meaning given to such term (or other term of similar meaning) in an Employment Agreement for purposes of termination
of employment under such agreement, and in the absence of any such agreement or if such agreement does not include a definition
of “Cause” (or other term of similar meaning), the term “Cause” shall mean (i) any material breach by
the Participant of any agreement to which the Participant and the Company or an Affiliate are parties, (ii) any continuing act
or omission to act by the Participant which may have a material and adverse effect on the Company’s business or on the Participant’s
ability to perform services for the Company or an Affiliate, including, without limitation, the commission of any crime (other
than minor traffic violations), or (iii) any material misconduct or material neglect of duties by the Participant in connection
with the business or affairs of the Company or an Affiliate.

 

    1

     

    

 

(g) “Change
in Control” means, unless such term or an equivalent term is otherwise defined with respect to an Award by the Participant’s
Award agreement, any Employment Agreement or in a written contract of service, the occurrence of any of the following:

 

(i) any “person”
(as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined
in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of the Company representing more than
fifty percent (50%) of the total combined voting power of the Company’s then-outstanding securities entitled to vote generally
in the election of Directors; provided, however, that the following acquisitions shall not constitute a Change in Control: (1)
an acquisition by any such person who on the Effective Date is the beneficial owner of more than fifty percent (50%) of such voting
power, (2) any acquisition directly from the Company, including, without limitation, a public offering of securities, (3) any
acquisition by the Company, (4) any acquisition by a trustee or other fiduciary under an employee benefit plan of a Participating
Company or (5) any acquisition by an entity owned directly or indirectly by the stockholders of the Company in substantially the
same proportions as their ownership of the voting securities of the Company; or

 

(ii) an Ownership
Change Event or series of related Ownership Change Events (collectively, a “Transaction”) in which the stockholders
of the Company immediately before the Transaction do not retain immediately after the Transaction direct or indirect beneficial
ownership of more than fifty percent (50%) of the total combined voting power of the outstanding securities entitled to vote generally
in the election of Directors or, in the case of an Ownership Change Event described in Section 2(x)(iii), the entity to which
the assets of the Company were transferred (the “Transferee”), as the case may be; or

 

(iii) a liquidation
or dissolution of the Company.

 

provided, however, that a Change
in Control shall be deemed not to include a transaction described in subsections (i) or (ii) of this paragraph (g) in which a
majority of the members of the board of directors of the continuing, surviving or successor entity, or parent thereof, immediately
after such transaction is comprised of incumbent Directors. For purposes of the preceding sentence, indirect beneficial ownership
shall include, without limitation, an interest resulting from ownership of the voting securities of one or more corporations or
other business entities which own the Company or the Transferee, as the case may be, either directly or through one or more subsidiary
corporations or other business entities. The Committee shall have the right to determine whether multiple sales or exchanges of
the voting securities of the Company or multiple Ownership Change Events are related, and its determination shall be final, binding
and conclusive.

 

(h) “Code”
means the Internal Revenue Code of 1986, as amended from time to time, and any rulings or regulations promulgated thereunder.

 

(i) “Committee”
means the Board, the Compensation Committee of the Board, or such other committee of the Board as the Board appoints to administer
the Plan; provided, however, that should Section 162(m) of the Code and Section 16 of the Securities Exchange Act of 1934 apply
to Awards under the Plan, if any member of the Committee does not qualify as both an “outside director” for purposes
of Code Section 162(m) and a “non-employee director” for purposes of Rule 16b-3, the remaining members of the Committee
(but not less than two members) shall be constituted as a subcommittee of the Committee to act as the Committee for purposes of
the Plan.

 

(j) “Commission”
means the U.S. Securities and Exchange Commission.

 

(k) “Company”
means Axelerex Corp.., a Nevada corporation, and its subsidiaries.

 

(l) “Company
Stock” means common stock, par value $.0001 per share, of the Company. In the event of a change in the capital structure
of the Company affecting the common stock (as provided in Section 14), the shares resulting from such a change in the common stock
shall be deemed to be Company Stock within the meaning of the Plan.

 

(m) “Date
of Grant” means the date on which the Committee grants an Award, or such future date as may be determined by the Committee.

 

(n) “Disability”
means a disability within the meaning of Code Section 22(e)(3).

 

(o) “Employer”
means the Company and each Affiliate that employs one or more Participants.

 

    2

     

    

 

(p) “Employment
Agreement” means any written employment or other similar agreement between the Participant and the Company or an Affiliate.

 

(q) “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

(r) “Fair
Market Value” means on any given date the fair market value of Company Stock as of such date, as determined by the Committee.
If the Company Stock is listed on a national securities exchange or traded on the over-the-counter market, Fair Market Value means
the closing selling price or, if not available, the closing bid price or, if not available, the high bid price of the Company
Stock quoted on such exchange, or on the over-the-counter market as reported by the NASDAQ Stock Market (“NASDAQ”),
or if the Company Stock is not listed on NASDAQ, then by the National Quotation Bureau, Incorporated, on the day immediately preceding
the day on which the Award is granted or exercised, as the case may be, or, if there is no selling or bid price on that day, the
closing selling price, closing bid price, or high bid price on the most recent day which precedes that day and for which such
prices are available.

 

(s) “Incentive
Stock Option” means an Option that qualifies for favorable income tax treatment under Code Section 422.

 

(t) “Mature
Shares” means shares of Company Stock for which the shareholder has good title, free and clear of all liens and encumbrances.

 

(u) “Nonqualified
Stock Option” means an Option that is not an Incentive Stock Option.

 

(v) “Option”
means a right to purchase Company Stock granted under the Plan, at a price determined in accordance with the Plan.

 

(x) “Outside
Director” means a member of the Board who is not an employee of, or a consultant or advisor to, the Company or an Affiliate
as of the Date of Grant.

 

(y) “Ownership
Change Event” means the occurrence of any of the following with respect to the Company: (i) the direct or indirect sale
or exchange in a single or series of related transactions by the stockholders of the Company of more than fifty percent (50%)
of the voting stock of the Company; (ii) a merger or consolidation in which the Company is a party; or (iii) the sale, exchange,
or transfer of all or substantially all of the assets of the Company (other than a sale, exchange or transfer to one or more subsidiaries
of the Company).

 

(z) “Participant”
means any employee, Outside Director, consultant, or advisor (including independent contractors, professional advisors, and service
providers) of the Company or an Affiliate who receives an Award under the Plan.

 

(aa)“Restricted
Stock” means Company Stock awarded under Section 9 of the Plan.

 

(bb)
“Reload Option” means a reload option grant made in accordance with Section 7 of the Plan.

 

(cc)
“Rule 16b-3” means Rule 16b-3 of the Commission promulgated under the Exchange Act. A reference in the Plan
to Rule 16b-3 shall include a reference to any corresponding rule (or number redesignation) of any amendments to Rule 16b-3 enacted
after the effective date of the Plan’s adoption.

 

(dd)“Securities
Act” means the Securities Act of 1933, as amended.

 

(ee)“Stock
Appreciation Right” means a right to receive amounts awarded under Section 8 of the Plan.

 

    3

     

    

 

3. Stock.
Subject to Section 14 of the Plan, there shall be reserved for issuance under the Plan an aggregate of 4,000,000 shares of Company
Stock, which may be authorized but unissued shares, or shares held in the Company’s treasury, or shares purchased from stockholders
expressly for use under the Plan. In addition, shares allocable to Awards granted under the Plan that expire, are forfeited, are
cancelled without the delivery of the shares, or otherwise terminate unexercised, may again be available for Awards under the
Plan. For purposes of determining the number of shares that are available for Awards under the Plan, the number shall also include
the number of shares surrendered by a Participant actually or by attestation or retained by the Company in payment of Applicable
Withholding Taxes, and any Mature Shares surrendered by a Participant upon exercise of an Option or in payment of Applicable Withholding
Taxes. Shares issued under the Plan through the settlement, assumption, or substitution of outstanding awards or obligations to
grant future awards as a condition of an Employer acquiring another entity shall not reduce the maximum number of shares available
for delivery under the Plan.

 

4. Eligibility.
Subject to the terms of the Plan, the Committee shall have the power and complete discretion, as provided in Section 13, to select
eligible employees, Outside Directors, consultants, and advisors to receive an Award under the Plan; provided, however, that any
Award shall be subject to the following terms and conditions:

(a) Only
those individuals who are employees (including officers) of the Company or an Affiliate at the Date of Grant shall be eligible
to receive an Incentive Stock Option under the Plan

 

(b) All employees
(including officers) and Outside Directors of, or consultants and advisors to, either the Company or an Affiliate at the Date
of Grant shall be eligible to receive Nonqualified Stock Options, Stock Appreciation Rights, and Restricted Stock; provided, however,
that Nonqualified Stock Options, Stock Appreciation Rights, and Restricted Stock may not be granted to any such consultants and
advisors unless (i) bona fide services have been or are to be rendered by such consultant or advisor and (ii) such services are
not in connection with the offer or sale of securities in a capital raising transaction.

 

(c) Anything
herein to the contrary notwithstanding, any recipient of an Award under the Plan must be includable in the definition of “employee”
provided in the general instructions to Form S-8 Registration Statement under the Securities Act.

 

(d) The grant
of an Award shall not obligate an Employer to pay any employee, Outside Director, consultant, or advisor any particular amount
of remuneration, to continue the employment of the employee or engagement of the Outside Director, consultant, or advisor after
the grant, or to make further grants to the employee, Outside Director, consultant, or advisor at any time thereafter.

 

5.
Stock Options.

 

(a) The Committee
may make grants of Options to Participants. Except as otherwise provided herein, the Committee shall determine the number of shares
for which Options are granted, the Option exercise price per share, whether the Options are Incentive Stock Options or Nonqualified
Stock Options, and any other terms and conditions to which the Options are subject.

 

(b) The exercise
price of shares of Company Stock covered by an Option shall be not less than 100 percent of the Fair Market Value of Company Stock
on the Date of Grant. Except as provided in Section 14, (i) the exercise price of an Option may not be decreased after the Date
of Grant and (ii) a Participant may not surrender an Option in consideration for the grant of a new Option with a lower exercise
price or another Award.

 

(c) All Options
granted hereunder shall be subject to the following terms and conditions:

 

(i) All Options
shall be evidenced by a written stock option agreement (the “Stock Option Agreement”) setting forth all the
relevant terms of the Award.

 

(ii) No Option
shall be exercisable more than 10 years after the Date of Grant.

 

    4

     

    

 

(iii) The aggregate
Fair Market Value, determined at the Date of Grant, of shares for which Incentive Stock Options become exercisable by a Participant
during any calendar year shall not exceed $100,000 and any amount in excess of $100,000 shall be treated as a Non-Qualified Stock
Option.

 

(iv) If an Incentive
Stock Option is granted to an employee who owns, at the Date of Grant, more than 10 percent of the total combined voting power
of all classes of stock of the Company or an Affiliate, then (A) the option price of the shares subject to the Incentive Stock
Option shall be at least 110% of the Fair Market Value of the Company Stock at the Date of Grant and (B) such Incentive Stock
Option shall not be exercisable after the expiration of 5 years from the Date of Grant

 

(v) Subject
to earlier termination of the Option as otherwise provided herein and unless otherwise provided in any Employment Agreement or
as provided by the Committee in the grant of an Option and set forth in or incorporated into the Stock Option Agreement: (a) if
the employment of an employee by, or the services of an Outside Director for, or consultant or advisor to, the Company or an Affiliate
should be terminated for Cause or terminated voluntarily by the grantee, then any outstanding Option shall terminate immediately,
(B) if such employment or services terminates for any other reason, any such Option exercisable as of the date of termination
may be exercised at any time within three months of termination. For purposes of this subsection, (C) the retirement of an individual
either pursuant to a pension or retirement plan maintained by the Company or an Affiliate or at the applicable normal retirement
date prescribed from time to time by the Company shall be deemed to be termination of the individual’s employment other
than voluntarily or for Cause, and (D) an individual who leaves the employ or services of the Company or an Affiliate to become
an employee or Outside Director of, or a consultant or advisor to, an entity that has assumed the Option as a result of a corporate
reorganization or the like shall not be considered to have terminated employment or services.

 

(vi) Subject
to earlier termination of the Option as otherwise provided herein and unless otherwise provided in any Employment Agreement or
as provided by the Committee in the grant of an Option and set forth in or incorporated into the Stock Option Agreement, if the
holder of an Option under the Plan ceases employment or services because of Disability while employed by, or while serving as
an Outside Director for or a consultant or advisor to, the Company or an Affiliate, then such Option may, subject to the provisions
of subsection (viii) below, be exercised at any time within one year after the termination of employment or services due to the
Disability.

 

(vii) Subject
to earlier termination of the Option as otherwise provided herein and unless otherwise provided in any Employment Agreement or
as provided by the Committee in the grant of an Option and set forth in or incorporated into the Stock Option Agreement, if the
holder of an Option under the Plan dies (A) while employed by, or while serving as an Outside Director for or a consultant or
advisor to, the Company or an Affiliate, or (B) within three months after the termination of employment or services other than
voluntarily by the grantee or for Cause, then such Option may, subject to the provisions of subsection (viii) below, be exercised
by the Participant’s Beneficiary at any time within one year after the Participant’s death.

 

(viii) An Option
may not be exercised after termination of employment, termination of directorship, termination of consulting or advisory services,
Disability or death except to the extent that the holder was entitled to exercise the Option at the time of such termination or
as otherwise provided in a currently effective written Employment Agreement, consulting agreement or other related agreement executed
between the Company and the employee, Outside Director or consultant or advisor, and in any event may not be exercised after the
expiration of the Option in accordance with the terms of the grant.

 

(ix) The employment
relationship of an employee of the Company or an Affiliate shall be treated as continuing intact while the employee is on military
or sick leave or other bona fide leave of absence if such leave does not exceed 90 days or, if longer, so long as the employee’s
right to reemployment is guaranteed either by statute or by contract.

 

    5

     

    

 

(d) The holder
of any Option granted under the Plan shall have none of the rights of a stockholder with respect to the shares covered by the
Option until such stock shall be transferred to the holder upon the exercise of the Option.

 

6. Grants
to Outside Directors. Awards, other than Incentive Stock Options, may be made to Outside Directors. The Committee shall
have the power and complete discretion to select Outside Directors to receive Awards. The Committee shall have the complete discretion,
under provisions consistent with Section 13, to determine the terms and conditions, the nature of the Award and the number of
shares to be allocated as part of each Award for each Outside Director. The grant of an Award shall not obligate the Company to
make further grants to the Outside Director at any time thereafter or to retain any person as a director for any period of time.

 

7. Reload
Options. The Committee may grant Options with a reload feature. A reload feature shall only apply when the exercise price
is paid by delivery of Company Stock in accordance with Section 10. The Stock Option Agreement for the Option containing the reload
feature shall provide that the holder of the Option shall receive, contemporaneously with the payment of the exercise price in
shares of Company Stock, a Reload Option to purchase that number of shares of Company Stock equal to the sum of (i) the number
of shares used to exercise the Option, and (ii) with respect to Nonqualified Stock Options, the number of shares used to satisfy
Applicable Withholding Taxes. The terms of the Plan applicable to the Option shall be equally applicable to the Reload Option
with the following exceptions: the option price per share of Company Stock deliverable upon the exercise of the Reload Option
(i) in the case of a Reload Option that is an Incentive Stock Option being granted to a Participant who owns more than 10 percent
of the total combined voting power of all classes of stock of the Company or an Affiliate, shall be 110% of the Fair Market Value
of a share of Company Stock on the Date of Grant of the Reload Option, and (ii) in the case of a Reload Option which is an Incentive
Stock Option being granted to any other Participant, or which is a Nonqualified Stock Option, shall be the Fair Market Value of
a share of Company Stock on the Date of Grant of the Reload Option. The term of the Reload Option shall be the same as the Option
which gave rise to the Reload Option. If the exercise price of an Option containing a reload feature is paid in cash and not in
shares of Company Stock, the reload feature shall have no application with respect to such exercise.

 

8. Stock
Appreciation Rights. Concurrently with the award of any Option to purchase one or more shares of Company
Stock, the Committee may, in its sole discretion, award to the optionee with respect to each share of Company Stock covered by
an Option a related Stock Appreciation Right, which permits the optionee to be paid the appreciation on the related Option in
lieu of exercising the Option. The Committee shall establish as to each award of Stock Appreciation Rights the terms and conditions
to which the Stock Appreciation Rights are subject; provided, however, that the following terms and conditions shall apply to
all Stock Appreciation Rights:

 

(a) A Stock
Appreciation Right granted with respect to an Incentive Stock Option must be granted together with the related Option. A Stock
Appreciation Right granted with respect to a Nonqualified Stock Option may be granted together with the grant of the related Option.

 

(b) A Stock
Appreciation Right shall entitle the Participant, upon exercise of the Stock Appreciation Right, to receive in exchange an amount
equal to the excess of (i) the Fair Market Value on the date of exercise of Company Stock covered by the surrendered Stock Appreciation
Right over (ii) the Fair Market Value of Company Stock on the Date of Grant of the Stock Appreciation Right. The Committee may
limit the amount that the Participant will be entitled to receive upon exercise of a Stock Appreciation Right.

 

(c) A Stock
Appreciation Right may be exercised only if and to the extent the underlying Option is exercisable, and a Stock Appreciation Right
may not be exercisable in any event more than 10 years after the Date of Grant.

 

(d) A Stock
Appreciation Right may only be exercised at a time when the Fair Market Value of Company Stock covered by the Stock Appreciation
Right exceeds the Fair Market Value of Company Stock on the Date of Grant of the Stock Appreciation Right. The Stock Appreciation
Right may provide for payment in Company Stock or cash, or a fixed combination of Company Stock and cash, or the Committee may
reserve the right to determine the manner of payment at the time the Stock Appreciation Right is exercised.

 

    6

     

    

 

(e) To the
extent a Stock Appreciation Right is exercised, the underlying Option shall be cancelled, and the shares of Company Stock represented
by the Option shall no longer be available for Awards under the Plan.

 

9.
Restricted Stock Awards. 

 

(a) The Committee
may make grants of Restricted Stock to a Participant. The Committee shall establish as to each award of Restricted Stock the terms
and conditions to which the Restricted Stock is subject, including the period of time before which all restrictions shall lapse
and the Participant shall have full ownership of the Company Stock. The Committee in its discretion may award Restricted Stock
without cash consideration. All Restricted Stock Awards shall be evidenced by a Restricted Stock Agreement setting forth all the
relevant terms of the Award.

 

(b) Restricted
Stock may not be sold, assigned, transferred, pledged, hypothecated, or otherwise encumbered or disposed of until the restrictions
have lapsed or been removed. Certificates representing Restricted Stock shall be held by the Company until the restrictions lapse,
and the Participant shall provide the Company with appropriate stock powers endorsed in blank.

 

10. Method
of Exercise of Options. 

 

(a) Options
may be exercised by the Participant (or his or her legal guardian or personal representative) by giving written notice of the
exercise to the Company at its principal office (attention of the Corporate Secretary) pursuant to procedures established by the
Company. The notice shall state the number of shares the Participant has elected to purchase under the Option. Such notice shall
be accompanied, or followed within 10 days of delivery thereof, by payment of the full exercise price of such shares. The exercise
price may be paid in cash by means of a check payable to the order of the Company or, if the terms of an Option permit, (i) by
delivery or attestation of Mature Shares (valued at their Fair Market Value) in satisfaction of all or any part of the exercise
price, (ii) by delivery of a properly executed exercise notice with irrevocable instructions to a broker to deliver to the Company
the amount necessary to pay the exercise price from the sale or proceeds of a loan from the broker with respect to the sale of
Company Stock or a broker loan secured by the Company Stock, (iii) by such other consideration as may be approved by the Committee
from time to time to the extent permitted by applicable law, or (iv) by any combination of (i) through (iii) hereof.

 

(b) Unless
prior to the exercise of the Option the shares issuable upon such exercise have been registered with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, the notice of exercise shall be accompanied by a representation or agreement
of the individual or entity exercising the Option to the Company to the effect that such shares are being acquired for investment
purposes and not with a view to the distribution thereof, and such other documentation as may be required by the Company, unless
in the opinion of counsel to the Company such representation, agreement or documentation is not necessary to comply with any such
act.

 

(c) The Company
shall not be obligated to deliver any Company Stock until the shares have been listed on each securities exchange or market on
which the Company Stock may then be listed or until there has been qualification under or compliance with such federal or state
laws, rules or regulations as the Company may deem applicable. The Company shall use reasonable efforts to obtain such listing,
qualification and compliance.

 

11. Tax
Withholding. Each Participant shall agree as a condition of receiving an Award payable in the form of Company Stock to
pay to the Employer, or make arrangements satisfactory to the Employer regarding the payment to the Employer of, Applicable Withholding
Taxes. Under procedures established by the Committee or its delegate, a Participant may elect to satisfy Applicable Withholding
Taxes by (i) making a cash payment or authorizing additional withholding from cash compensation, (ii) delivering Mature Shares
(valued at their Fair Market Value), or (iii) if the applicable Stock Option Agreement or Restricted Stock Agreement permits,
having the Company retain that number of shares of Company Stock (valued at their Fair Market Value) that would satisfy all or
a specified portion of the Applicable Withholding Taxes.

 

    7

     

    

 

12. Transferability
of Awards. Awards shall not be transferable except by will or by the laws of descent and distribution.

 

13. Administration
of the Plan.

 

(a) The Committee
shall administer the Plan. Subject to the terms and conditions set forth in the Plan, the Committee shall have general authority
to impose any term, limitation, or condition upon an Award that the Committee deems appropriate to achieve the objectives of the
Award and of the Plan. The Committee may adopt rules and regulations for carrying out the Plan with respect to Participants and
Beneficiaries. The interpretation and construction of any provision of the Plan by the Committee shall be final and conclusive
as to any Participant or Beneficiary.

 

(b) The Committee
shall have the power to amend the terms and conditions of previously granted Awards so long as the terms as amended are consistent
with the terms of the Plan and provided that the consent of the Participant is obtained with respect to any amendment that would
be detrimental to him or her, except that such consent will not be required if such amendment is for the purpose of complying
with Rule 16b-3 or any requirement of the Code or of other securities laws applicable to the Award.

 

(c) The Committee
shall have the power and complete discretion (i) to delegate to any individual, or to any group of individuals employed by the
Company or any Affiliate, the authority to grant Awards under the Plan and (ii) to determine the terms and limitations of any
delegation of authority; provided, however, that the Committee may not delegate power and discretion to the extent such action
would cause noncompliance with, or the imposition of penalties, excise taxes, or other sanctions under, applicable corporate law,
Rule 16b-3, Code Section 162(m) or 409A, or any other applicable securities or tax law.

 

(d) The Committee
shall have the power to include one or more provisions in the terms of Award grants to provide for the cancellation of an outstanding
Award in the event the Participant violates any agreement or other obligation dealing with non-competition, non-solicitation or
protection of the Company’s confidential information.

 

14.
Change in Capital Structure; Change of Control. 

 

(a) Change
in Capital Structure. In the event of a stock dividend, stock split, or combination of shares, share exchange, share distribution,
recapitalization or merger in which the Company is the surviving corporation, a spin-off or split-off of a subsidiary or Affiliate,
or other change in the Company’s capital stock (including, but not limited to, the creation or issuance to shareholders
generally of rights, options, or warrants for the purchase of common stock or preferred stock of the Company), the aggregate number
and kind of shares of stock or securities of the Company to be subject to the Plan and to Awards then outstanding or to be granted,
the maximum number of shares or securities which may be delivered under the Plan under Sections 3, 5(b), or 8, the per share exercise
price of Options, the terms of Awards, and other relevant provisions shall be proportionately and appropriately adjusted by the
Committee in its discretion, and the determination of the Committee shall be binding on all persons. If the adjustment would produce
fractional shares with respect to any unexercised Option, the Committee may adjust appropriately and in a nondiscriminatory manner
the number of shares covered by the Option so as to eliminate the fractional shares.

 

    8

     

    

 

(b) Effect
of Change in Control on Options and Stock Appreciation Rights. Subject to the terms of any Employment Agreement, the Committee
may provide in an Award agreement for, or in the event of a Change in Control may take such actions as it deems appropriate to
provide for, any one or more of the following:

 

(i) Accelerated
Vesting. The Committee may provide for the acceleration of the exercisability and vesting in connection with a Change in Control
of any or all outstanding Options and Stock Appreciation Rights and shares acquired upon the exercise thereof upon such conditions,
including termination of the Participant’s service prior to, upon, or following such Change in Control, and to such extent
as the Committee shall determine.

 

(ii) Assumption
or Substitution. In the event of a Change in Control, the surviving, continuing, successor, or purchasing entity or parent
thereof, as the case may be (the “Acquiror”), may, without the consent of any Participant, either assume or
continue the Company’s rights and obligations under any or all outstanding Options and Stock Appreciation Rights or substitute
for any or all outstanding Options and Stock Appreciation Rights substantially equivalent options and stock appreciation rights
(as the case may be) for the Acquiror’s stock. Any Options or Stock Appreciation Rights which are neither assumed or continued
by the Acquiror in connection with the Change in Control nor exercised as of the time of consummation of the Change in Control
shall terminate and cease to be outstanding effective as of the time of consummation of the Change in Control.

 

(iii) Cash-Out.
The Committee may, in its sole discretion and without the consent of any Participant, determine that, upon the occurrence
of a Change in Control, each or any Option or Stock Appreciation Right outstanding immediately prior to the Change in Control
shall be canceled in exchange for a payment with respect to each vested share (and each unvested share, if so determined by the
Committee) of Company Stock subject to such canceled Option or Stock Appreciation Right in (A) cash, (B) stock of the Company
or of a corporation or other business entity a party to the Change in Control, or (C) other property which, in any such case,
shall be in an amount having a Fair Market Value equal to the excess of the Fair Market Value of the consideration to be paid
per share of Company Stock in the Change in Control over the exercise price per share under such Option or Stock Appreciation
Right (the “Spread”). In the event such determination is made by the Committee, the Spread (reduced by applicable
withholding taxes, if any) shall be paid to Participants in respect of the vested portion (and unvested portion, if so determined
by the Committee) of their canceled Options and Stock Appreciation Rights as soon as practicable following the date of the Change
in Control.

 

(iv) Effect
of Change in Control on Restricted Stock Awards. The Committee may provide for the acceleration of the vesting of the shares
subject to the Restricted Stock Award upon such conditions, including termination of the Participant’s services to the Company
prior to, upon, or following such Change in Control, and to such extent as the Committee shall determine.

 

15. Effective
Date. The effective date of the Plan is February __ 2021. The Plan shall be submitted to the shareholders of the Company
for approval. Until (i) the Plan has been approved by the Company’s shareholders, and (ii) the requirements of any applicable
federal or state securities laws have been met, no Restricted Stock shall be awarded, and no Option shall be granted or exercisable,
that is not contingent on these events.

 

16. Termination,
Modification. If not sooner terminated by the Board, this Plan shall terminate at the close of business on February
__, 2021. No Awards shall be made under the Plan after its termination. The Board may amend or terminate the Plan as it shall
deem advisable; provided, however, that no change shall be made that increases the total number of shares of Company Stock reserved
for issuance pursuant to Awards granted under the Plan (except pursuant to Section 14), or reduces the minimum exercise price
for Options, or exchanges an Option for another Award, unless such change is authorized by the shareholders of the Company. Except
as otherwise specifically provided herein, a termination or amendment of the Plan shall not, without the consent of the Participant,
adversely affect a Participant’s rights under an Award previously granted to him or her.

 

    9

     

    

 

17. American
Jobs Creation Act of 2004.

 

(a) It is
intended that the Plan comply in all applicable respects with Code Sections 409A(a)(2) through (4), as it may be amended from
time to time, and any rulings, regulations, or other guidelines promulgated under either or both statutes (such statutes, rulings,
regulations and other guidelines to be referred to collectively herein as “Section 409A”). This Plan, and any amendments
thereto, shall therefore be interpreted and implemented at all times so as to (i) ensure compliance with Section 409A and (ii)
avoid any penalty or early taxation of any payment or benefit under the Plan.

 

(b) Anything
herein to the contrary notwithstanding, the Board shall approve and implement such amendments as it deems necessary or desirable
to ensure compliance with Section 409A and to avoid any penalty or early taxation of any payment or benefit under this Plan; provided,
however, that no change shall be made that increases the total number of shares of Company Stock reserved for issuance pursuant
to Awards granted under the Plan (except pursuant to Section 14), or reduces the minimum exercise price for Options, or exchanges
an Option for another Award, unless such change is authorized by the shareholders of the Company. No such amendment shall require
the consent of any Participant.

 

18. Interpretation
and Venue. Except to the extent preempted by applicable federal law, the terms of this Plan shall be governed by the laws
of the State of New York without regard to its conflict of laws rules.

 

    10

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