Document:

Exhibit 4.6

IMAGE SENSING SYSTEMS, INC.

2014 STOCK OPTION AND INCENTIVE PLAN
 

Effective Date: April 9, 2014

	

 

	TABLE OF CONTENTS

	
	Page No.
	ARTICLE I. GENERAL	1
	
	1.1	DEFINITIONS	1
	
	1.2	PURPOSE	5
	
	1.3	ADMINISTRATION	5
	
	1.4	TERM OF THE PLAN	5
	
	1.5	SHARES TO BE AWARDED	6
	
	1.6	LIMITATIONS ON AWARDS	6
	
	1.7	AMENDMENT OR TERMINATION OF THE PLAN	6
	
	1.8	ADJUSTMENTS UPON CERTAIN EVENTS	6
	
	1.9	AGREEMENT AND REPRESENTATIONS OF RECIPIENT	8
	
	
	
	

	ARTICLE II. OPTIONS	8
	
	2.1	GRANTING OF OPTIONS	8
	
	2.2	ELIGIBLE RECIPIENTS	10
	
	2.3	EXERCISE OF OPTIONS	10
	
	2.4	SECTION 83(b) ELECTION	10
	
	2.5	TRANSFERABILITY	11
	
	2.6	INCENTIVE STOCK OPTIONS	11
	
	
	
	

	ARTICLE III. OTHER AWARDS	12
	
	3.1	GRANT	12
	
	3.2	AWARD AGREEMENT	12
	
	3.3	STOCK APPRECIATION RIGHTS	12
	
	3.4	RESTRICTED STOCK	
13

	
	3.5	RESTRICTED STOCK UNITS	14
	
	3.6	PERFORMANCE AWARDS	14
	
	3.7	OTHER STOCK GRANTS	14
	
	3.8	TRANSFERABILITY	15
	
	
	
	

	ARTICLE IV. ADDITIONAL PROVISIONS	

	
	4.1	NO RIGHTS AS SHAREHOLDER	15
	
	4.2	WITHHOLDING	15
	
	4.3	RESERVATION OF COMMON STOCK	15
	
	4.4	ISSUANCE OF SHARES OF COMMON STOCK	15
	
	4.5	INCOME TAX TREATMENT	15
	
	4.6	EXCEPTIONS TO TERMINATION OF EMPLOYMENT	16

	
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	4.7 	OTHER BENEFITS AND COMPENSATION PROGRAMS	16
	
	4.8	INTERNATIONAL RECIPIENTS	16
	
	4.9	NO RIGHT TO CONTINUED EMPLOYMENT, SERVICE AS A DIRECTOR OR AWARDS	16
	
	4.10	EXPENSES OF PLAN	16
	
	4.11	RELIANCE ON REPORTS	17
	
	4.12	STOCK CERTIFICATES	17
	
	4.13	GENERAL RESTRICTIONS	17
	
	4.14	SUCCESSORS AND ASSIGNS	17
	
	
4.15

	SEVERABILITY	17
	
	4.16	MINNESOTA LAW	17
	
	4.17	NO TRUST OR FUND	18
	
	4.18	APPLICATION OF CODE SECTION 409A	18

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IMAGE SENSING SYSTEMS, INC.
2014 STOCK OPTION AND INCENTIVE PLAN
_______________________________________________

ARTICLE I.
GENERAL

1.1              DEFINITIONS.  As used in this Image Sensing Systems, Inc. 2014 Stock Option and Incentive Plan, the following definitions shall apply:

a.                   “Affiliate” means any entity that is (i) a member of a controlled group of corporations (within the meaning of Code Section 414(b)) that includes the Company, (ii) any trade or business (whether or not incorporated) which is under common control (as defined in Code Section 414(c)) with the Company, (iii) any organization (whether or not incorporated) which is a member of an affiliated service group (as defined in Code Section 414(m)) which includes the Company, and (iv) any other entity required to be aggregated with the Company pursuant to regulations under Code Section 414(o).

b.                  “Agreement” means the formal written agreement to be entered into by and between the Company and the Recipient which will contain the specific terms and conditions upon which an Award is granted to a Recipient, as determined by the Board of Directors or the Committee.

c.                   “Award” means an Option, Stock Appreciation Right, Restricted Stock or Restricted Stock Unit, Performance Award, Other Stock Grant or any combination thereof granted pursuant to the terms of this Plan.  Each Award shall be subject to the terms and conditions of the Plan and any other terms and conditions (not inconsistent with the Plan) determined by the Committee.

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

e.                   “Change in Control” means any one or more of the following events occurring after the Effective Date:

	
	(i)	the purchase or other acquisition by any one person, or more than one person acting as a group, of capital stock of the Company that, together with the Company’s capital stock beneficially owned by such person or group (as the term “beneficial ownership” is defined in Rule 13d-3 under the Exchange Act, constitutes more than 50% of the total combined value or total combined voting power of all classes of capital stock issued by the Company;
	
	(ii)	a merger or consolidation to which the Company is a party if the individuals and entities who were shareholders of the Company immediately before the effective date of such merger or consolidation have, immediately following the effective date of such merger or consolidation, beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of less than 50% of the total combined voting power of all classes of securities issued by the surviving entity for the election of directors of the surviving corporation;

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	(iii)	the purchase or other acquisition by any one person, or more than one person acting as a group, of all or substantially all of the assets of the Company during the 12-month period ending on the date of the most recent purchase or other acquisition of such assets by such person or persons;
	
	(iv)	a change in the composition of the Board of Directors at any time during any consecutive 12-month period such that the Incumbent Directors cease for any reason to constitute greater than 50% of the members of the Board;
	
	(v)	the Shareholders of the Company approve any plan or proposal for the liquidation or dissolution of the Company; or
	
	(vi)	any other change of control of the Company of a nature that would be required to be reported pursuant to Section 13 or 15(d) of the Exchange Act, whether or not the Company is then subject to such reporting requirements.

Notwithstanding anything in this Section to the contrary, a Change in Control shall not occur as the result of a sale or transfer to an employee stock ownership plan, within the meaning of Code Section 4975(e)(7), that is sponsored by the Company.

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

g.                   “Committee” means the Compensation Committee of the Board or any successor committee of the Board designated by the Board to administer the Plan.  The Committee shall be comprised of not less than such number of Directors as shall be required to permit Awards granted under the Plan to qualify under Rule 16b‐3, and each member of the Committee shall be a “Non‐Employee Director.”

h.                  “Common Stock” means the voting common stock, $0.01 par value, of the Company.

i.                    “Company” means Image Sensing Systems, Inc., a Minnesota corporation.

j.                    “Director” means a member of the Board, including any Non‐Employee Director.

k.                  “Effective Date” has the meaning set forth at the end of this Plan.

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

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m.                “Fair Market Value” means (i) if the Common Stock is listed or admitted to unlisted trading privileges on any national securities exchange, the average of the closing sales prices of the Common Stock on the end of any day on all national securities exchanges on which the Common Stock may at the time be listed or, if there have been no sales on any such exchange on any day, the average of the highest bid and lowest asked prices on all such exchanges at the end of such day, or (ii) if the Common Stock is not so listed or admitted to unlisted trading privileges on any national securities exchange, and bid and asked prices therefor in the domestic over‐the‐counter market are reported by the National Quotation Bureau, Incorporated (or any comparable reporting service), the average of the closing bid and asked prices on such day as reported by the National Quotation Bureau, Incorporated (or any comparable reporting service), or (iii) if the Common Stock is not listed on any national securities exchange or quoted in the domestic over‐the‐counter market, the fair value of the Common Stock determined by the Committee in good faith in the exercise of its reasonable discretion based upon a reasonable application of a reasonable valuation method within the meaning of Code Section 409A and the applicable treasury regulations or other authority promulgated thereunder.

n.                  “Incentive Stock Option” means an Option that is an option to purchase shares of Common Stock which is intended to qualify as an incentive stock option as defined in Section 422 of the Code.

o.                   “Incumbent Director” means those members of the Board of Directors who either (i) were members of the Board of Directors on the Effective Date or (ii) were elected or appointed by, or on the nomination or recommendation of, at least a majority of the members of the then-existing Board (either by specific vote or by approval of the Company’s proxy statement in which such individual is named as a nominee for director without objection to such nomination).

p.                  “Non‐Employee Director” means any Director who is not also an employee of the Company or an Affiliate within the meaning of Rule 16b‐3.

q.                  “Non‐Statutory Option” means an Option to purchase shares of Common Stock which is not an Incentive Stock Option.

r.                   “Option” means an Award of an Incentive Stock Option or a Non‐Statutory Option.

s.                   “Other Stock Grant” means any Award pursuant to Article III below that is subject to restrictions as described therein, including the restrictions contained in Section 3.7 below. 

t.                    “Performance Award” means any Award pursuant to Article III below that is subject to restrictions as described therein, including the restrictions contained in Section 3.6 below.

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u.                  “Performance Goal” shall mean one or more of the following performance goals, either individually, alternatively or in any combination, applied on a corporate, subsidiary or group basis: revenue, cash flow, earnings (including one or more of gross profit, earnings before interest and taxes, earnings before interest, taxes, depreciation and amortization and net earnings), earnings per share (basic or diluted), margins (including one or more of gross, operating and net income margins), returns (including one or more of return on assets, equity, investment, capital and revenue and total shareholder return), stock price, economic value added, working capital, market share, cost reductions, workforce satisfaction and diversity goals, employee retention, customer satisfaction, completion of key projects and strategic plan development and implementation. Such goals may reflect absolute entity or group performance or a relative comparison to the performance of a peer group of entities or other external measure of the selected performance criteria. Pursuant to rules and conditions adopted by the Committee on or before the 90th day of the applicable performance period for which Performance Goals are established, the Committee may appropriately adjust any evaluation of performance under such goals to exclude the effect of certain events, including any of the following events: asset write‐downs; litigation or claim judgments or settlements; changes in tax law, accounting principles or other such laws or provisions affecting reported results; severance, contract termination and other costs related to exiting certain business activities; extraordinary or non‐recurring expenses; amortization of intangible assets; goodwill impairment; and gains or losses from the disposition of businesses or assets or from the early extinguishment of debt.

v.                   “Plan” means this Image Sensing Systems, Inc. 2014 Stock Option and Incentive Plan.

w.                 “Recipient” means a holder of an Award granted pursuant to the Plan.

x.                   “Restricted Stock” means an Award of shares of Common Stock pursuant to Article III below that is subject to restrictions as described therein, including the restrictions contained in Section 3.4 below. 

y.                   “Restricted Stock Unit” means an Award of the future right to receive shares of Common Stock granted pursuant to Article III below that is subject to restrictions as described therein, including the restrictions contained in Section 3.5 below.

z.                   “Rule 16b‐3” means Rule 16b‐3 promulgated by the Securities and Exchange Commission under the Exchange Act, or any successor rule or regulation.

aa.              “Section 162(m)” means Section 162(m) of the Code and the applicable treasury regulations and other authority promulgated thereunder.

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

cc.               “Shareholders” means the holders of outstanding shares of the Company’s Common Stock.

dd.             “Stock Appreciation Right” means any Award pursuant to Article III below that is subject to restrictions as described therein, including the restrictions contained in Section 3.3 below.

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1.2              PURPOSE.  The purpose of the Plan is to promote the growth and general prosperity of the Company and its Affiliates by permitting the Company to grant Awards to employees, officers, members of the Board of Directors, consultants, independent contractors, and other service providers of the Company and its Affiliates, thereby assisting the Company in its efforts to attract and retain the best available persons for positions of substantial responsibility, and to provide employees, officers, members of the Board of Directors, consultants, independent contractors, and other service providers an additional incentive to contribute, by the performance of services, to the future success of the Company and its Affiliates.

1.3              ADMINISTRATION.

a.                   Administration by Committee.  Except as otherwise provided for in this Plan, the Plan shall be administered by the Committee.  Notwithstanding anything to the contrary contained herein, the Board may, at any time and from time to time, without any further action of the Committee, exercise the powers and duties of the Committee under the Plan unless the exercise of such powers and duties by the Board would cause the Plan not to comply with the requirements of Section 162(m) of the Code.

b.                  Powers and Duties.  Subject to the provisions of this Plan, the Committee shall have sole authority to do everything necessary or appropriate to administer the Plan, including, without limitation, making any rules and regulations governing the administration of the Plan; selecting the eligible employees, officers, members of the Board of Directors, consultants, independent contractors and other service providers to whom Awards shall be granted; determining the type, amount, size and terms of Awards; determining the time when Awards shall be granted; determining whether any restrictions shall be placed on Common Stock purchased upon exercising an Option; determining whether any specific grants of Awards shall include provisions regarding non‐solicitation, non‐competition, confidentiality or “for cause” restrictions and forfeiture provisions; whether such Awards shall be subject to vesting restrictions; interpreting the Plan; and making all other determinations necessary or advisable for the administration of the Plan.  The determinations of the Committee need not be uniform and may be made by it selectively among persons who are eligible to receive Awards under the Plan, whether or not such persons are similarly situated.  All decisions, determinations and interpretations of the Committee regarding the Plan shall be final and binding on all Recipients.  The day‐to‐day administrative duties for the Plan may be delegated by the Committee to one or more executive officers or other employees of the Company; provided, however, that the Committee shall not delegate such authority (i) with regard to grants of Options to be made to officers or directors of the Company or any Affiliate who are subject to Section 16 of the Exchange Act or (ii) in such a manner as would cause the Plan not to comply with the requirements of Section 162(m) of the Code.  All actions authorized to be taken by the Committee  under this Plan may as well be taken by any appropriately appointed committee thereof.

1.4              TERM OF THE PLAN.  The Plan was adopted by the Board of Directors as of the Effective Date.  No Awards shall be granted under the Plan after the earlier of (a) the date on which the Plan is terminated as provided in Section 1.7 hereof, or (b) the tenth (10th) anniversary of the Effective Date.  The expiration of the term of the Plan with respect to any Awards granted under the Plan shall not affect Awards then outstanding which have not yet expired.

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1.5              SHARES TO BE AWARDED.  The maximum number of shares of Common Stock which may be awarded under the Plan is 620,000 shares of Common Stock, which number of shares is subject to adjustment in the same manner as the number of shares of Common Stock underlying Awards are subject to adjustment pursuant to Section 1.8 of this Plan.  In addition, the number of shares of Common Stock authorized for issuance under the Plan may be increased from time to time by approval of the Board of Directors or the Committee and, if required by the Code or any rules or regulations adopted thereunder, the Shareholders.  Common Stock subject to Awards which terminate or expire prior to exercise by or vesting in a Recipient shall be available for the issuance of future Awards.

1.6              LIMITATIONS ON AWARDS.

a.                   Section 162(m) Limitation for Certain Awards.  No Recipient may be granted Options, Stock Appreciation Rights or any other Award or Awards under the Plan, the value of which Award or Awards is based solely on an increase in the value of the Shares after the date of grant of such Award or Awards, for more than 150,000 Shares (subject to adjustment as provided in Section 1.8 of the Plan) in the aggregate in any calendar year.

b.                  Section 162(m) Limitation for Performance Awards.  The maximum amount payable pursuant to all Performance Awards to any Recipient in the aggregate in any calendar year shall be $500,000 in value, whether payable in cash, Shares or other property.

1.7              AMENDMENT OR TERMINATION OF THE PLAN.

a.                   Except as hereinafter provided, and notwithstanding anything to the contrary contained herein, the Board of Directors or Committee may amend the Plan from time to time in such respects as the Board of Directors or Committee may deem advisable, including, without limitation, to affect Awards already granted.  However, no amendment may be made to the extent that such amendment would (i) violate the applicable rules or regulations of The NASDAQ Stock Market or any other securities exchange applicable to the Company, or (ii) cause any Incentive Stock Options already granted under the Plan to cease to satisfy the requirements for incentive stock options under Code Section 422.

b.                  The Board of Directors or the Committee may at any time terminate the Plan.  Any such termination of the Plan shall not affect Awards already granted, and such Awards shall remain in full force and effect as if the Plan had not been terminated.

1.8              ADJUSTMENTS UPON CERTAIN EVENTS.

a.                   Anti‐Dilution Adjustments.  Upon any change in the number of outstanding shares of Common Stock of the Company occurring after the Effective Date by reason of any stock dividend, split, reverse split, reclassification, combination, exchange of Common Stock or other similar recapitalization of the Company, there shall be an appropriate adjustment to the number of shares of Common Stock underlying each outstanding Award and, where applicable, to the per share exercise price of the Award so that the Recipient shall then receive for the aggregate price paid by such Recipient on such exercise of an Option or termination of restrictions for any Restricted Stock or Restricted Stock Unit all shares of Common Stock subject to the Award to the same extent prior to such stock dividend, split, reverse split or other similar recapitalization.  No adjustment shall be made under this Section upon the issuance by the Company of any warrants, rights or options to acquire additional Common Stock or of securities convertible into Common Stock unless such warrants, rights, options or convertible securities are issued to all Shareholders on a proportionate basis. 

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b.                  Change in Control.  Unless otherwise provided by the Committee either in the applicable Award Agreement at the time of grant or at any time after the grant of an Award under the Plan (including pursuant to Section 1.8(c) before the effective date of a Change in Control), in the event of a Change in Control, the following shall occur immediately as of the effective date of such Change in Control with respect to any and all Awards outstanding as of the effective date of such Change in Control:  (i) any and all Awards granted hereunder will be, as nearly as may reasonably be, automatically converted into the same type of Award to acquire the kind and amount of shares of stock or other securities or property (including cash) which the Recipient would have owned or have been entitled to receive as of the effective date of the Change in Control had the Awards been exercised or realized in full immediately before the effective date of the Change in Control; (ii) all Options will become immediately exercisable in full and will remain exercisable for the remainder of their terms, regardless of whether the Recipients to whom such Options have been granted remain in the employ or service of the Company or any Affiliate; (iii) all outstanding Awards of Restricted Stock and Restricted Stock Units will become immediately fully vested regardless of whether the Recipients to whom such Awards have been granted remain in the employ or service of the Company or any Affiliate; (iv) all other outstanding Awards will vest and/or continue to vest in the manner determined by the Committee and set forth in the applicable Agreement evidencing such Awards; and (v) appropriate adjustment shall be made in the application of the provisions of all outstanding Awards with respect to the rights and interests thereafter of each Recipient, to the end that the provisions set forth in each Award Agreement shall thereafter correspondingly be made applicable, as nearly as may reasonably be, in relation to any shares of stock or other securities or property (including cash) thereafter deliverable under the Award.

c.                   Additional Adjustments of Awards.  The Committee shall have the discretion, exercisable without the consent of any Recipient affected thereby if not prohibited by the applicable Agreement, at any time before the effective date of a Change in Control, to take such further action as it determines to be necessary or advisable with respect to Awards.  Such authorized action may include (but shall not be limited to) establishing, amending or waiving the type, terms, conditions or duration of, or restrictions on, Awards so as to provide for earlier, later, extended or additional time for exercise; paying cash or other consideration in exchange for all or part of such Awards; and lifting restrictions and other modifications.  The Committee may take such actions with respect to all Recipients, to certain categories of Recipients or to only individual Recipients.  The Committee may take such action before or after granting Awards to which the action relates and before or after any public announcement with respect to such Change in Control that is the reason for such action.  The grant of an Award under the Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure or to merge or to consolidate or to dissolve, liquidate or sell, or transfer all or any part of its business or assets. 

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d.                  Limitation on Change in Control Payments.  Notwithstanding anything in this Plan to the contrary, if, with respect to a Recipient, the acceleration of the vesting of an Award as provided in Section 1.8(c), the payment of cash in exchange for all or part of an Award as provided in Section 1.8(c) or any other adjustment to an Award pursuant to Section 1.8(c) (which acceleration, payment or adjustment could be deemed a “payment” within the meaning of Section 280G(b)(2) of the Code), together with any other “payments” which such Recipient has the right to receive from the Company or any corporation that is a member of an “affiliated group” (as defined in Section 1504(a) of the Code without regard to Section 1504(b) of the Code) of which the Company is a member, would constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code), then the “payments” to such Recipient pursuant to Section 1.8(c) of the Plan will be reduced to the largest amount as will result in no portion of such “payments” being subject to the excise tax imposed by Section 4999 of the Code; provided, however, that if a Recipient is subject to a separate agreement with the Company or an Affiliate that expressly addresses the potential application of Section 280G or Section 4999 of the Code (including, without limitation, that “payments” under such agreement or otherwise will not be reduced or that the Recipient will have the discretion to determine which “payments” will be reduced), then the limitations of this Section 1.8(d) will not apply, and any “payments” to a Recipient pursuant to Section 1.8(c) of the Plan will be treated as “payments” arising under such separate agreement.

1.9              AGREEMENT AND REPRESENTATIONS OF RECIPIENT.  As a condition to the grant or exercise of any portion of an Option or receipt of any shares of Common Stock pursuant to a Restricted Stock or Restricted Stock Unit, if the issuance of the Award or of any shares of Common Stock is not registered under the Securities Act or applicable state securities laws, upon the request of the Company, the Recipient must represent and agree that any and all shares of Common Stock purchased or received under an Award will be acquired for investment and not for resale.  The Company may restrict the transfer of the Common Stock so purchased or received and affix a legend to any certificate representing such shares of Common Stock, stating that such shares may not be transferred without an opinion of counsel satisfactory to the Company that the proposed transfer may lawfully be made without registration under the Securities Act and registration, notice or approval under any applicable state securities laws, or such applicable registration(s), notice(s) and approval(s).

ARTICLE II.
OPTIONS

2.1              GRANTING OF OPTIONS.  An Option granted pursuant to the Plan shall entitle the Recipient, upon vesting and exercise, to purchase a specified number of shares of Common Stock at a specified price during a specified period.  Subject to the following, Options shall be subject to such terms and conditions as the Committee shall from time to time approve and may be made exercisable in one or more installments, upon the happening of certain events, upon the fulfillment of certain conditions, or upon such other terms and conditions as the Committee shall determine; provided, that each Option shall be subject to the following requirements in addition to the requirements set forth in this Article II :

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a.                   Type of Option.  Each Option shall be identified in the Agreement pursuant to which it is granted as an Incentive Stock Option or a Non‐Statutory Option, as the case may be.

b.                  Number of Shares Subject to Option.  Each Agreement for an Option granted under this Plan shall identify the number of shares of Common Stock to which the Option to purchase is being given to Recipient under the Option.

c.                   Payment.  The purchase price of the number of shares of Common Stock subject to an Option as to which such Option is being exercised shall be payable in full at the time the Option is exercised.  Payment may be made in cash or by a cashier’s or certified check.  However, in the sole discretion of the Committee, and subject to such terms and conditions as the Committee deems appropriate in its discretion, payment of the exercise price or a portion thereof may be made by surrender to the Company of previously acquired shares of Common Stock or shares of Common Stock issuable upon the exercise of that Option, such shares to be credited against the exercise price based upon the Fair Market Value thereof on the date of exercise, or by a combination of such shares and cash.

d.                  Termination of Employment or Other Relationship.  Subject to the discretion of the Committee to determine otherwise at the time of grant of an Option, upon termination of the Recipient’s employment or other relationship with the Company or with an Affiliate for any reason other than the Recipient’s death, all Options held by the Recipient may be exercised to the same extent that the Recipient would have been entitled to exercise such Options at the date of termination and may be exercised within a period of ninety (90) days after the date of termination, but in no case later than the expiration date of each such Option.  Any portion of an Option that is not exercisable at the time of the termination of a Recipient’s employment or other relationship with the Company as described in the foregoing sentence shall automatically terminate.  Notwithstanding the foregoing, if an independent contractor or other non‐employment relationship between the Recipient and the Company or an Affiliate is terminated due to the commencement of an employment relationship with the Company or an Affiliate, this provision shall apply only upon termination of both the independent contractor and employment relationship between the Recipient and the Company or an Affiliate.

e.                   Death of Recipient.  Subject to the discretion of the Committee to determine otherwise at the time of grant of an Option, upon termination of a Recipient’s employment as a result of the death of a Recipient, all Options held by the Recipient may be exercised to the same extent that the Recipient would have been entitled to exercise such Options at the date of death and may be exercised within a period of one hundred eighty (180) days after the date of death, but in no case later than the expiration date of each such Option.  In such event, such Options shall be exercisable only by the executors or administrators of the Recipient or by the person or persons to whom the Recipient’s rights under the Options shall pass by will or the laws of descent and distribution.  Any portion of an Option that is not exercisable at the time of a Recipient’s death shall automatically terminate.

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f.                    Written Agreement.  Each Option shall be granted pursuant to a formal written Agreement to be entered into by and between the Company and the Recipient, which Agreement shall be in such form as the Committee deems appropriate.  Multiple Options may be evidenced by a single Agreement.  Subject to the terms and limitations of the Plan, the Committee may, with the consent of the Recipient (when required), amend any such Agreement to modify the terms or conditions governing the Option.

2.2              ELIGIBLE RECIPIENTS.  Subject to the requirements of Section 2.6 regarding Incentive Stock Options, Options may be issued to any employees of the Company or of any Affiliate, including, among others, employees who are officers and/or members of the Board of Directors of the Company or any Affiliate.  In addition, notwithstanding anything to the contrary contained herein, the Committee may grant Options under the Plan which are Non‐Statutory Options to persons who are, at the time of such grant, employees of the Company or its Affiliates, or to persons who are, at the time of such grant, not employees of the Company but who are members of the Board of Directors of the Company or its Affiliates or persons who are deemed by the Committee to be important to the future success of the Company or its Affiliates, including, but not limited to, directors, employees, consultants, independent contractors or other providers of services to the Company or its Affiliates.  In addition, eligible persons may be selected to receive Options individually or by group category (for example, by pay grade) as the Committee may determine.  A person who has been granted an Option under the Plan or under any other plan of the Company or its Affiliates may be granted additional Options if the Committee shall so determine.  Except to the extent otherwise provided in the Agreement evidencing an Option, the granting of an Option under this Plan shall not affect any outstanding Options previously granted under this Plan or under any other plan of the Company or any Affiliate.

2.3              EXERCISE OF OPTIONS.  An Option can be exercised only in the manner provided in this Section 2.3.  The Recipients of the Option or other proper parties shall deliver written notice of exercise to the Company at its principal office within the Option period, stating the number of shares of Common Stock as to which the Option is being exercised and accompanied by payment in full of the exercise price for all shares designated in the notice.  If required by the Company, such notice shall further contain a representation that such shares are being acquired for investment and not for resale.  As provided in the Agreement setting forth the terms of the Option being exercised, the exercise price shall be paid in cash or by certified or cashier’s check or by the delivery of previously acquired shares of Common Stock or shares of Common Stock issuable upon exercise of such Option.  The Company shall then cause a certificate or certificates for such Common Stock to be delivered to the Recipient or other proper parties within a reasonable period.

2.4              SECTION 83(b) ELECTION.  The Company recognizes that certain persons who receive Options may be subject to restrictions regarding their right to trade shares of Common Stock under Section 16(b) of the Exchange Act.  Such restrictions may cause Recipients not to be taxable when they exercise their Options.  However, it may be more beneficial to a Recipient to be taxed upon exercise of an Option as opposed to when trading restrictions lapse.  Accordingly, Recipients exercising such Options may consider making an election to be taxed upon exercise of the Option under Section 83(b) of the Code.  If requested, the Company shall provide reasonable assistance to such Recipients to effect a Section 83(b) election.

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2.5              TRANSFERABILITY.  Subject to the requirements of Section 2.6 regarding Incentive Stock Options and to the discretion of the Committee to provide otherwise upon the grant of an Option, Options shall not be transferable other than by will or the laws of descent and distribution, and Options shall be exercisable during a Recipient’s lifetime only by such Recipient.  

2.6              INCENTIVE STOCK OPTIONS.  In addition to the foregoing provisions of this Article II, Options that are intended to constitute Incentive Stock Options shall be subject to the following additional provisions of this Section 2.6.

a.                   Eligible Recipients.  Incentive Stock Options may be granted only to persons who are employees of the Company or an Affiliate.

b.                  Exercise Price.  Subject to the provisions of Section 2.6(e), the exercise price of shares of Common Stock that are subject to an Incentive Stock Option shall not be less than 100% of the Fair Market Value of such shares at the time the Option is granted, as determined in good faith by the Committee.

c.                   Limit on Exercisability.  The aggregate Fair Market Value (determined at the time the Option is granted) of the shares of Common Stock with respect to which Incentive Stock Options are exercisable by the Recipient for the first time during any calendar year, under this Plan or any other plan of the Company or any Affiliate, shall not exceed $100,000.  To the extent an Incentive Stock Option exceeds this $100,000 limit, the portion of the Incentive Stock Option in excess of such limit shall be deemed a Non‐Statutory Option.

d.                  Limit on Term.  Subject to the provisions of Section 2.6(e), an Incentive Stock Option shall not be exercisable more than ten (10) years after the date on which it is granted.

e.                   Restrictions for Certain Shareholders.  The purchase price of shares of Common Stock that are subject to an Incentive Stock Option granted to an employee of the Company or any Affiliate who, at the time such Option is granted, owns 10% or more of the total combined voting power of all classes of stock of the Company or of any Affiliate, shall not be less than 110% of the Fair Market Value of such shares on the date such Option is granted, and such Option may not be exercisable more than five (5) years after the date on which it is granted.  For the purposes of this subparagraph, the rules of Section 424(d) of the Code shall apply in determining the stock ownership of any employee of the Company or any Affiliate.

f.                    Incentive Stock Options Not Transferable.  Incentive Stock Options shall not be transferable except by will or the laws of descent and distribution, and Incentive Stock Options shall be exercisable during an Recipient’s lifetime only by such Recipient.

	11

g.                   Effect of Not Meeting Requirements.  Subject to the discretion of the Committee to provide otherwise, if the terms of an Incentive Stock Option do not meet any requirements of this Plan or the Code necessary to be treated as an Incentive Stock Option under the Code, such Option shall not terminate but shall be a Non‐Statutory Option granted under this Plan.

ARTICLE III.
OTHER AWARDS

3.1              GRANT.  Awards of Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Awards and Other Stock Grants may be granted either alone or in addition to other Awards granted under the Plan.  The Committee shall determine to whom Restricted Stock and Restricted Stock Units will be granted, the number of shares of Common Stock subject to Awards of Restricted Stock or Restricted Stock Units, the times or other conditions under which such an Award may be subject to forfeiture, and all other conditions of Awards of Restricted Stock or Restricted Stock Units in addition to those contained in Section 3.4 and Section 3.5.  The Committee may also grant Restricted Stock and Restricted Stock Units in which the restrictions lapse upon the attainment of specified Performance Goals over a specified performance period. 

3.2              AWARD AGREEMENT.  Each Award of Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Awards and Other Stock Grants shall be evidenced by a written Agreement, in such form as the Committee may approve from time to time, which Agreement shall be subject to the provisions of this Plan and to such other terms and conditions as the Committee deems appropriate.  The Recipient of an Award of Restricted Stock or Restricted Stock Units shall not have any rights with respect to such Award unless and until such Recipient has executed an Agreement evidencing the Award, has delivered a fully executed copy thereof to the Company, and has otherwise complied with its applicable terms and conditions. 

3.3              STOCK APPRECIATION RIGHTS.  The Committee may grant Stock Appreciation Rights to Recipients subject to the terms of the Plan and any applicable Agreement. A Stock Appreciation Right granted under the Plan shall confer on the holder thereof a right to receive upon exercise thereof the excess of (i) the Fair Market Value of one share of Common Stock on the date of exercise (or, if the Committee shall so determine, at any time during a specified period before or after the date of exercise) over (ii) the grant price of the Stock Appreciation Right as determined by the Committee, which grant price shall not be less than 100% of the Fair Market Value of one share of Common Stock on the date of grant of the Stock Appreciation Right; provided, however, that the Committee may designate a per share grant price that is less than Fair Market Value on the date of grant (A) to the extent necessary or appropriate, as determined by the Committee, to satisfy applicable legal or regulatory requirements of a foreign jurisdiction or (B) if the Stock Appreciation Right is granted in substitution for a stock appreciation right previously granted by an entity that is acquired by or merged with the Company or an Affiliate.  Subject to the terms of the Plan, the grant price, term, methods of exercise, dates of exercise, methods of settlement and any other terms and conditions (including conditions or restrictions on the exercise thereof) of any Stock Appreciation Right shall be as determined by the Committee.

	12

3.4              RESTRICTED STOCK.  Awards of Restricted Stock may be granted under the Plan subject to the following terms and conditions:

a.                   Restricted Stock Certificate.  Subject to the last sentence of this Section 3.4, each Recipient of an Award of Restricted Stock shall be issued a certificate in respect of the Common Stock that is Restricted Stock awarded under the Plan. Such certificate shall be registered in the name of the Recipient and shall bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Award, substantially in the following form: 

The transferability of this certificate and the Common Stock represented hereby are subject to the terms and conditions (including forfeiture) of the Image Sensing Systems, Inc. 2014 Stock Option and Incentive Plan and an Agreement entered into between the registered owner of such Common Stock and the Company. Copies of such Plan and Agreement are on file in the offices of the Company.

The Committee shall require that the certificates evidencing such Common Stock be held in custody by the Company or its designated agent for that purpose until the restrictions thereon shall have lapsed, and that, as a condition of any Award of Restricted Stock, the Recipient shall have delivered a stock power, endorsed in blank, relating to the Common Stock covered by such Award.  

b.                  Restriction Period.  Subject to the provisions of this Plan and the applicable Agreement, during a period set by the Committee commencing with the date of such Award (the “Restriction Period”), the Recipient shall not be permitted to sell, transfer, pledge or assign shares of Restricted Stock awarded under the Plan.  Within these limits, the Committee may provide for the lapse of such restrictions in installments where deemed appropriate. 

c.                   Rights as Shareholder.  Except as provided in Sections 3.4(b) and 3.4(d), or as otherwise provided in an applicable Award Agreement, the Recipient shall have, with respect to the Common Stock that is Restricted Stock, all of the rights of a holder of Common Stock of the Company.  The Committee, in its sole discretion or as otherwise required by application of Section 409A of the Code, may require the payment of any cash dividends to be deferred and, if the Committee so determines, reinvested in additional Common Stock or Restricted Stock (to the extent shares are available under Section 1.5).  Certificates for shares of unrestricted Common Stock shall be delivered to the Recipient promptly after, and only after, the period of forfeiture shall have expired without forfeiture in respect of such shares of Restricted Stock and any other conditions to the vesting of the Restricted Stock have been met.

d.                  Performance Restrictions.  Notwithstanding Section 3.4(c) above, any Award of Restricted Stock based on the achievement of Performance Goals shall not be considered outstanding for any purpose, and no dividends or other rights of a Shareholder shall attach to such Common Stock until such time as the Performance Goals have been satisfied and the Common Stock is issued to the Recipient without restriction.

	13

e.                   Termination of Employment or Service.  Except to the extent provided in the applicable Award Agreement, upon termination of employment or service of a Recipient for any reason during the Restriction Period, all Common Stock that is Restricted Stock then subject to restriction shall automatically terminate and be forfeited by the Recipient.  The Committee may, in its sole discretion, when it finds that a waiver would be in the best interest of the Company, waive in whole or in part any or all remaining restrictions with respect to the Recipient’s Common Stock that is Restricted Stock. 

3.5              RESTRICTED STOCK UNITS.  The Common Stock that represents Restricted Stock Units awarded pursuant to the Plan shall be subject to the following restrictions and conditions:

a.                   Vesting.  At the time of the grant of Restricted Stock Units, the Committee may impose such restrictions or conditions to the vesting of such Restricted Stock Units as it, in its sole discretion, deems appropriate, to be contained in the Award Agreement.  The Committee may divide such Restricted Stock Units into classes and assign different vesting conditions for each class.  If all conditions to the vesting of a Restricted Stock Unit are satisfied, and except as provided in Section 3.5(c), upon the satisfaction of all vesting conditions with respect to a Restricted Stock Unit, such Restricted Stock Unit shall vest. 

b.                  Shares Upon Vesting.  Upon the vesting of Restricted Stock Units, the Recipient shall be entitled to receive, within 30 days following the date on which such Restricted Stock Units vest, one share of Common Stock for each Restricted Stock Unit that so vests.

c.                   Termination of Employment or Service.  Except to the extent provided in the applicable Award Agreement, upon termination of a Recipient’s employment or service for any reason, all Restricted Stock Units shall automatically terminate and be forfeited by the Recipient.  The Committee may, in its sole discretion, when it finds that a waiver would be in the best interest of the Company, waive in whole or in part any or all remaining restrictions with respect to the Recipient’s Restricted Stock Units.

3.6              PERFORMANCE AWARDS.  The Committee may grant Performance Awards to Recipients.  A Performance Award granted under the Plan may be payable in cash, in shares of Common Stock, or other Awards (including, without limitation, Restricted Stock). Performance Awards shall be conditioned solely on the achievement of one or more objective Performance Goals, and such Performance Goals shall be established by the Committee. Subject to the terms of the Plan and any applicable Agreement, the Performance Goals to be achieved during any performance period, the length of any performance period, the amount of any Performance Award granted, the amount of any payment or transfer to be made pursuant to any Performance Award and any other terms and conditions of any Performance Award shall be determined by the Committee. The Committee shall also certify in writing that such Performance Goals have been met prior to payment of the Performance Awards.

3.7              OTHER STOCK GRANTS.  The Committee may, subject to the terms of the Plan, grant shares of Common Stock to Recipients with or without restrictions thereon as are deemed by the Committee to be consistent with the purposes of the Plan. Subject to the terms of the Plan and any applicable Agreement, such Stock Awards may have such terms and conditions as the Committee shall determine.

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3.8              TRANSFERABILITY.  Subject to the provisions of this Plan and the Award Agreements, Awards of Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Awards or Other Stock Grant may not be sold, assigned, transferred, pledged or otherwise encumbered during any applicable Restriction Period.

ARTICLE IV.
ADDITIONAL PROVISIONS

4.1              NO RIGHTS AS SHAREHOLDER.  No Recipient shall have any rights as a Shareholder of the Company with respect to any Common Stock subject to such Recipient’s Award prior to the date of issuance to such Recipient of a certificate or certificates for such Common Stock or the date on which such issuance is recorded on the Company’s books and records in the case of non‐certificated shares.

4.2              WITHHOLDING.  Whenever the Company proposes or is required to issue or transfer shares of Common Stock under the Plan, the Company shall have the right to require the Recipient to remit to the Company an amount sufficient to satisfy any federal, state or local withholding tax liability prior to the delivery of any certificate or certificates for such shares or the date on which such issuance is recorded on the Company’s books and records in the case of non‐certificated shares.  Whenever under the Plan payments are to be made in cash, such payments shall include an amount sufficient to satisfy any federal, state, or local withholding tax liability.

4.3              RESERVATION OF COMMON STOCK.  The Company, during the terms of the Plan and all Awards issued under the Plan, will at all times reserve and keep available, and will use its commercially reasonable best efforts to seek or obtain approval from any regulatory body having jurisdiction over the transactions contemplated by this Plan necessary in order to issue and sell, such number of Common Stock as shall be sufficient to satisfy the requirements of the Plan.

4.4              ISSUANCE OF SHARES OF COMMON STOCK.  Notwithstanding any other provision of the Plan, the Company shall have no obligation to issue or deliver any shares of Common Stock under an Award granted under the Plan or make any other distribution of benefits under the Plan unless, in the opinion of the Company’s legal counsel, such issuance, delivery or distribution would comply with all applicable laws (including, without limitation, the requirements of the Securities Act or the laws of any state or foreign jurisdiction) and the applicable requirements of any securities exchange or similar entity.  The Company shall be under no obligation to any Recipient to register for offering or resale or to qualify for an exemption from registration under the Securities Act, or to register or qualify under the laws of any state or foreign jurisdiction, any Awards, shares of Common Stock, security or interest in a security paid or issued under, or created by, the Plan, or to continue in effect any such registrations or qualifications if made.  The Company may issue stock certificates evidencing shares of Common Stock with such legends and subject to such restrictions on transfer and stop transfer instructions as legal counsel for the Company deems necessary or desirable for compliance by the Company with federal, state and foreign securities laws.  The Company may also require such other action or agreement by the Recipients as may from time to time be necessary to comply with applicable securities laws.

	15

4.5              INCOME TAX TREATMENT.  Government jurisdiction, income reporting and tax withholding requirements will be complied with by the Company whenever Awards are granted or exercised and any income tax payment, and any income tax prepayment requirements (including any tax withholding requirements imposed upon the Company) will be effectively borne by the Recipient.  BECAUSE FEDERAL INCOME TAX LAW IS SUBJECT TO CHANGE AND INCOME TAX LAWS VARY FROM STATE TO STATE, THE COMPANY STRONGLY RECOMMENDS THAT RECIPIENTS CONSULT WITH THEIR INDIVIDUAL TAX ADVISORS PRIOR TO EXERCISING AN OPTION OR ANY OTHER AWARD.

4.6              EXCEPTIONS TO TERMINATION OF EMPLOYMENT.  Whether military, government or other service or other leave of absence shall constitute a termination of employment or other relationship with the Company shall be determined in each case by the Committee at its discretion, and any determination by the Committee shall be final and conclusive and binding on all Recipients.  A termination of employment or other relationship with the Company shall not occur where the Recipient transfers from the Company to one of its Affiliates or transfers from an Affiliate to the Company or another Affiliate.

4.7              OTHER BENEFITS AND COMPENSATION PROGRAMS.  Payments and other benefits received by a Recipient under an Award shall not be deemed a part of a Recipient’s regular, recurring compensation for purposes of any termination, indemnity or severance pay laws and shall not be included in, nor have any effect on, the determination of benefits under any other employee benefit plan, contract or similar arrangement provided by the Company or an Affiliate, unless expressly so provided by such other plan, contract or arrangement or the Committee determines that an Award or portion of an Award should be included to reflect competitive compensation practices or to recognize that an Award has been made in lieu of a portion of competitive cash compensation.

4.8              INTERNATIONAL RECIPIENTS.  With respect to Recipients who reside or work outside the United States of America, the Committee may, in its sole discretion, amend the terms of the Plan or adopt such modifications, procedures or sub‐plans with respect to such Recipients as are necessary or desirable to ensure the viability of the benefits of the Plan, comply with applicable foreign laws or obtain more favorable tax or other treatment for a Recipient, the Company or an Affiliate; provided, however, that no such changes shall apply to the Awards to Recipients who may be “covered employees” under Section 162(m) of the Code or any successor thereto unless consistent with the provisions thereof.

4.9              NO RIGHT TO CONTINUED EMPLOYMENT, SERVICE AS A DIRECTOR OR AWARDS.  The granting of an Award under the Plan shall impose no obligation on the Company or any Affiliate to continue the employment of a Recipient and shall not lessen or affect the Company’s or the Affiliate’s right to terminate the employment of such Recipient.  Nothing in the Plan will interfere with or limit in any way the right of the Company, the Board or the Shareholders to terminate the directorship of any Director at any time, nor confer upon any Director any right to continue to serve as a member of the Board.  No Recipient or other person shall have any claim to be granted any Award, and there is no obligation for uniform treatment of Recipients or holders or beneficiaries of Awards. 

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4.10          EXPENSES OF PLAN.  The expenses of administering this Plan shall be borne by the Company and its Affiliates.

4.11          RELIANCE ON REPORTS.  Each Director or of a committee of the Board, including the Committee, shall be fully justified in relying or acting in good faith upon any report made by the independent registered public accounting firm of the Company and its Affiliates and upon any other information furnished in connection with this Plan by any person or persons other than such member.  In no event shall any person who is or shall have been a Director or of a committee of the Board, including the Committee, be liable for any determination made or other action taken or omitted in reliance upon any such report or information, or for any action taken or omitted, including the furnishing of information, in good faith.

4.12          STOCK CERTIFICATES.  To the extent this Plan or any applicable Agreement provides for the issuance of stock certificates to reflect the issuance of shares of Common Stock, the Company may issue such shares on a non‐certificated basis to the extent it reasonably can do so in compliance with the restrictions set forth in this Plan and the applicable Agreement and to the extent not prohibited by applicable law or the applicable rules of any stock exchange or market on which such shares are traded. 

4.13          GENERAL RESTRICTIONS.  Each Award granted pursuant to the Plan shall be subject to the requirement that if, in the opinion of the Board or Committee, the listing, registration, or qualification of any shares of Common Stock related thereto upon any securities exchange or under any state or federal law, the consent or approval of any regulatory body, or an agreement by the Recipient with respect to the disposition of any such shares, is necessary or desirable as a condition of the issuance or sale of such shares, such Award shall not be exercised or shares of Common Stock granted without restriction and/or such shares of Common Stock shall not be sold unless and until such listing, registration, qualification, consent, approval, or agreement is effected or obtained in form satisfactory to the Board or Committee.

4.14          SUCCESSORS AND ASSIGNS.  This Plan will be binding upon and inure to the benefit of the successors and permitted assigns of the Company and the Recipients, and Agreements entered into in accordance with the Plan shall be binding upon the heirs, successors and assigns of the Company and the Recipients.

4.15          SEVERABILITY.  If any provision of the Plan or any Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan or Agreement, and such Plan or Agreement shall be construed and enforced as if the illegal or invalid provision had not been included.

4.16          MINNESOTA LAW.  The validity, construction, interpretation, administration and effect of the Plan; any rules, regulations and actions relating to the Plan; and the Agreements evidencing Awards granted under the Plan, will be governed by and construed exclusively in accordance with the laws of the State of Minnesota without regard to its choice of law provisions.

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4.17          NO TRUST OR FUND.  The Plan is intended to constitute an “unfunded” plan.  Nothing contained herein shall require the Company to segregate any monies, other property, or shares of Common Stock, or to create any trusts, or to make any special deposits for any immediate or deferred amounts payable to any Recipient, and no Recipient shall have any rights that are greater than those of a general unsecured creditor of the Company.

4.18          APPLICATION OF CODE SECTION 409A.  If and to the extent that any provision of an Award is required to comply with Section 409A of the Code, such provision shall be administered and interpreted in a manner consistent with the requirements of Section 409A. If and solely to the extent that any such provision of an Award as currently written would conflict with Section 409A of the Code, the Committee shall have the authority, without the consent of the Recipient, to administer such provision and to amend the Award with respect to such provision to the extent the Committee deems necessary for the purposes of avoiding any portion of amounts owed to the Recipient being retroactively included in the taxable income of the Recipient for any prior taxable year.

I hereby certify as follows: (1) this Plan was adopted by the Board of Directors of the Company effective April 9, 2014 and approved by the Shareholders of the Company on May 13, 2014; (2) this Plan was amended by the Company’s Board of Directors on March 11, 2019 to increase the number of shares of Common Stock subject to the Plan from 400,000 shares to 500,000 shares, and such amendment was approved by the Company’s Shareholders at the annual meeting of Shareholders held on May 8, 2019; (3) this Plan was amended by the Company’s Board of Directors on May 21, 2019 pursuant to Section 1.6.a. of this Plan to conform the terms of the Plan to amendments to Section 162(m) of the Code effected by the U.S. Tax Cuts and Jobs Act; and (4) this Plan was amended by the Company’s Board of Directors on February 4, 2021 to increase the number of shares of Common Stock subject to the Plan from 500,000 shares to 620,000 shares, and such amendment was approved by the Company’s Shareholders at the annual meeting of Shareholders held on May 4, 2021.

	
	IMAGE SENSING SYSTEMS, INC.
	
	By:	/s/ Chad A. Stelzig
	
	
	Chad A. Stelzig,
	
	
	Its:  President and Executive Officer
	
	
	

 

 

	18Exhibit 10.1

 

UNICYCIVE
THERAPEUTICS, INC.

 

2018
EQUITY INCENTIVE PLAN

 

1.
Purposes of the Plan. The purposes of this Plan are:

 

		●	to
attract and retain the best available personnel for positions of substantial responsibility,

 

		●	to
provide additional incentive to Employees, Directors and Consultants, and

 

		●	to
promote the success of the Company’s business.

 

The
Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Stock Appreciation Rights, Restricted Stock and Restricted
Stock Units.

 

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

 

(a)
“Administrator” means the Board or any of its Committees as will be administering the Plan, in accordance with Section 4
of the Plan.

 

(b)
“Applicable Laws” means the requirements relating to the administration of equity-based awards under U.S. state corporate
laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or
quoted and the applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under the Plan.

 

(c)
“Award” means, individually or collectively, a grant under the Plan of Options, Stock Appreciation Rights, Restricted
Stock, or Restricted Stock Units.

 

(d)
“Award Agreement” means the written or electronic agreement setting forth the terms and provisions applicable to each
Award granted under the Plan. The Award Agreement is subject to the terms and conditions of the Plan.

 

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

 

(f)
“Change in Control” means the occurrence of any of the following events:

 

(i)
Change in Ownership of the Company. A change in the ownership of the Company which occurs on the date that any one person, or
more than one person acting as a group (“Person”), acquires ownership of the stock of the Company that, together with the
stock held by such Person, constitutes more than 50% of the total voting power of the stock of the Company, except that any change in
the ownership of the stock of the Company as a result of a private financing of the Company that is approved by the Board will not be
considered a Change in Control; or

 

     

     

    

 

(ii)
Change in Effective Control of the Company. If the Company has a class of securities registered pursuant to Section 12 of the
Exchange Act, a change in the effective control of the Company which occurs on the date that a majority of members of the Board is replaced
during any twelve (12) month period by Directors whose appointment or election is not endorsed by a majority of the members of the Board
prior to the date of the appointment or election. For purposes of this clause (ii), if any Person is considered to be in effective control
of the Company, the acquisition of additional control of the Company by the same Person will not be considered a Change in Control; or

 

(iii)
Change in Ownership of a Substantial Portion of the Company’s Assets. A change in the ownership of a substantial portion
of the Company’s assets which occurs on the date that any Person acquires (or has acquired during the twelve (12) month period
ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market
value equal to or more than 50% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition
or acquisitions. For purposes of this subsection (iii), gross fair market value means the value of the assets of the Company, or the
value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

 

For
purposes of this Section 2(f), persons will be considered to be acting as a group if they are owners of a corporation that enters into
a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company.

 

Notwithstanding
the foregoing, a transaction will not be deemed a Change in Control unless the transaction qualifies as a change in control event within
the meaning of Code Section 409A, as it has been and may be amended from time to time, and any proposed or final Treasury Regulations
and Internal Revenue Service guidance that has been promulgated or may be promulgated thereunder from time to time.

 

Further
and for the avoidance of doubt, a transaction will not constitute a Change in Control if: (i) its sole purpose is to change the jurisdiction
of the Company’s incorporation, or (ii) its sole purpose is to create a holding company that will be owned in substantially the
same proportions by the persons who held the Company’s securities immediately before such transaction.

 

(g)
“Code” means the Internal Revenue Code of 1986, as amended. Any reference to a section of the Code herein will be
a reference to any successor or amended section of the Code.

 

(h)
“Committee” means a committee of Directors or of other individuals satisfying Applicable Laws appointed by the Board,
or by the compensation committee of the Board, in accordance with Section 4 hereof.

 

(i)
“Common Stock” means the common stock of the Company.

 

(j)
“Company” means Unicycive Therapeutics, Inc., a Delaware corporation, or any successor thereto.

 

    -2-

     

    

 

(k)
“Consultant” means any natural person, including an advisor, engaged by the Company or a Parent or Subsidiary to render
bona fide services to such entity, provided the services (i) are not in connection with the offer or sale of securities in a capital-raising
transaction, and (ii) do not directly promote or maintain a market for the Company’s securities.

 

(l)
“Director” means a member of the Board.

 

(m)
“Disability” means total and permanent disability as defined in Code Section 22(e)(3), provided that in the case
of Awards other than Incentive Stock Options, the Administrator in its discretion may determine whether a permanent and total disability
exists in accordance with uniform and non-discriminatory standards adopted by the Administrator from time to time.

 

(n)
“Employee” means any person, including officers and Directors, employed by the Company or any Parent or Subsidiary
of the Company. Neither service as a Director nor payment of a director’s fee by the Company will be sufficient to constitute “employment”
by the Company.

 

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

 

(p)
“Exchange Program” means a program under which (i) outstanding Awards are surrendered or cancelled in exchange for
Awards of the same type (which may have higher or lower exercise prices and different terms), Awards of a different type, and/or cash,
(ii) Participants would have the opportunity to transfer any outstanding Awards to a financial institution or other person or entity
selected by the Administrator, and/or (iii) the exercise price of an outstanding Award is reduced or increased. The Administrator will
determine the terms and conditions of any Exchange Program in its sole discretion.

 

(q)
“Fair Market Value” means, as of any date, the value of Common Stock determined as follows:

 

(i)
If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq
Global Select Market, the Nasdaq Global Market or the Nasdaq Capital 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 on the day
of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;

 

(ii)
If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value
of a Share will be the mean between the high bid and low asked prices for the Common Stock on the day of determination (or, if no bids
and asks were reported on that date, as applicable, on the last trading date such bids and asks were reported), as reported in The
Wall Street Journal or such other source as the Administrator deems reliable; or

 

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

 

    -3-

     

    

 

(r)
“Incentive Stock Option” means an Option that by its terms qualifies and is otherwise intended to qualify as an incentive
stock option within the meaning of Code Section 422 and the regulations promulgated thereunder.

 

(s)
“Nonstatutory Stock Option” means an Option that by its terms does not qualify or is not intended to qualify as an
Incentive Stock Option.

 

(t)
“Option” means a stock option granted pursuant to the Plan.

 

(u)
“Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Code Section 424(e).

 

(v)
“Participant” means the holder of an outstanding Award.

 

(w)
“Period of Restriction” means the period during which the transfer of Shares of Restricted Stock are subject to restrictions
and therefore, the Shares are subject to a substantial risk of forfeiture. Such restrictions may be based on the passage of time, the
achievement of target levels of performance, or the occurrence of other events as determined by the Administrator.

 

(x)
“Plan” means this 2018 Equity Incentive Plan.

 

(y)
“Restricted Stock” means Shares issued pursuant to an Award of Restricted Stock under Section 8 of the Plan,
or issued pursuant to the early exercise of an Option.

 

(z)
“Restricted Stock Unit” means a bookkeeping entry representing an amount equal to the Fair Market Value of one Share,
granted pursuant to Section 9. Each Restricted Stock Unit represents an unfunded and unsecured obligation of the Company.

 

(aa) “Service
Provider” means an Employee, Director or Consultant.

 

(bb) “Share”
means a share of the Common Stock, as adjusted in accordance with Section 13 of the Plan.

 

(cc) “Stock
Appreciation Right” means an Award, granted alone or in connection with an Option, that pursuant to Section 7 is designated
as a Stock Appreciation Right.

 

(dd) “Subsidiary”
means a “subsidiary corporation,” whether now or hereafter existing, as defined in Code Section 424(f).

 

3.
Stock Subject to the Plan.

 

(a)
Stock Subject to the Plan. Subject to the provisions of Section 13 of the Plan, the maximum aggregate number of Shares that may
be subject to Awards and sold under the Plan is 2,000,000 (2 Million) Shares. The Shares may be authorized but unissued, or reacquired
Common Stock.

 

    -4-

     

    

 

(b)
Lapsed Awards. If an Award expires or becomes unexercisable without having been exercised in full, is surrendered pursuant to
an Exchange Program, or, with respect to Restricted Stock or Restricted Stock Units, is forfeited to or repurchased by the Company due
to the failure to vest, the unpurchased Shares (or for Awards other than Options or Stock Appreciation Rights the forfeited or repurchased
Shares) which were subject thereto will become available for future grant or sale under the Plan (unless the Plan has terminated). With
respect to Stock Appreciation Rights, only Shares actually issued pursuant to a Stock Appreciation Right will cease to be available under
the Plan; all remaining Shares under Stock Appreciation Rights will remain available for future grant or sale under the Plan (unless
the Plan has terminated). Shares that have actually been issued under the Plan under any Award will not be returned to the Plan and will
not become available for future distribution under the Plan; provided, however, that if Shares issued pursuant to Awards of Restricted
Stock or Restricted Stock Units are repurchased by the Company or are forfeited to the Company due to the failure to vest, such Shares
will become available for future grant under the Plan. Shares used to pay the exercise price of an Award or to satisfy the tax withholding
obligations related to an Award will become available for future grant or sale under the Plan. To the extent an Award under the Plan
is paid out in cash rather than Shares, such cash payment will not result in reducing the number of Shares available for issuance under
the Plan. Notwithstanding the foregoing and, subject to adjustment as provided in Section 13, the maximum number of Shares that may be
issued upon the exercise of Incentive Stock Options will equal the aggregate Share number stated in Section 3(a), plus, to the extent
allowable under Code Section 422 and the Treasury Regulations promulgated thereunder, any Shares that become available for issuance under
the Plan pursuant to Section 3(b).

 

(c)
Share Reserve. The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as
will be sufficient to satisfy the requirements of the Plan.

 

4.
Administration of the Plan.

 

(a)
Procedure.

 

(i)
Multiple Administrative Bodies. Different Committees with respect to different groups of Service Providers may administer the
Plan.

 

(ii)
Other Administration. Other than as provided above, the Plan will be administered by (A) the Board or (B) a Committee,
which Committee will be constituted to satisfy Applicable Laws.

 

(b)
Powers of the Administrator. Subject to the provisions of the Plan, and in the case of a Committee, subject to the specific duties
delegated by the Board to such Committee, the Administrator will have the authority, in its discretion:

 

(i)
to determine the Fair Market Value;

 

(ii)
to select the Service Providers to whom Awards may be granted hereunder;

 

(iii)
to determine the number of Shares to be covered by each Award granted hereunder;

 

(iv)
to approve forms of Award Agreements for use under the Plan;

 

    -5-

     

    

 

(v)
to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder. Such terms and conditions
include, but are not limited to, the exercise price, the time or times when Awards may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Award or the
Shares relating thereto, based in each case on such factors as the Administrator will determine;

 

(vi)
to institute and determine the terms and conditions of an Exchange Program;

 

(vii)
to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan;

 

(viii)
to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established
for the purpose of satisfying applicable foreign laws or for qualifying for favorable tax treatment under applicable foreign laws;

 

(ix)
to modify or amend each Award (subject to Section 18(c) of the Plan), including but not limited to the discretionary authority to
extend the post-termination exercisability period of Awards and to extend the maximum term of an Option (subject to Section 6(d));

 

(x)
to allow Participants to satisfy withholding tax obligations in a manner prescribed in Section 14;

 

(xi)
to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted
by the Administrator;

 

(xii)
to allow a Participant to defer the receipt of the payment of cash or the delivery of Shares that otherwise would be due to such Participant
under an Award; and

 

(xiii)
to make all other determinations deemed necessary or advisable for administering the Plan.

 

(c)
Effect of Administrator’s Decision. The Administrator’s decisions, determinations and interpretations will be final
and binding on all Participants and any other holders of Awards.

 

5.
Eligibility. Nonstatutory Stock Options, Stock Appreciation Rights, Restricted Stock, and Restricted Stock Units may be granted
to Service Providers. Incentive Stock Options may be granted only to Employees.

 

6.
Stock Options.

 

(a)
Grant of Options. Subject to the terms and provisions of the Plan, the Administrator, at any time and from time to time, may grant
Options in such amounts as the Administrator, in its sole discretion, will determine.

 

    -6-

     

    

 

(b)
Option Agreement. Each Award of an Option will be evidenced by an Award Agreement that will specify the exercise price, the term
of the Option, the number of Shares subject to the Option, the exercise restrictions, if any, applicable to the Option, and such other
terms and conditions as the Administrator, in its sole discretion, will determine.

 

(c)
Limitations. Each Option will be designated in the Award Agreement as either an Incentive Stock Option or a Nonstatutory Stock
Option. Notwithstanding such designation, however, to the extent that the aggregate Fair Market Value of the Shares with respect to which
Incentive Stock Options are exercisable for the first time by the Participant during any calendar year (under all plans of the Company
and any Parent or Subsidiary) exceeds one hundred thousand dollars ($100,000), such Options will be treated as Nonstatutory Stock Options.
For purposes of this Section 6(c), Incentive Stock Options will be taken into account in the order in which they were granted, the Fair
Market Value of the Shares will be determined as of the time the Option with respect to such Shares is granted, and calculation will
be performed in accordance with Code Section 422 and Treasury Regulations promulgated thereunder.

 

(d)
Term of Option. The term of each Option will be stated in the Award Agreement; provided, however, that the term will be no more
than ten (10) years from the date of grant thereof. In the case of an Incentive Stock Option granted to a Participant who, at the time
the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or any Parent or Subsidiary, the term of the Incentive Stock Option will be five (5) years from the date
of grant or such shorter term as may be provided in the Award Agreement.

 

(e)
Option Exercise Price and Consideration.

 

(i)
Exercise Price. The per Share exercise price for the Shares to be issued pursuant to the exercise of an Option will be determined
by the Administrator, but will be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant. In
addition, in the case of an Incentive Stock Option granted to an Employee who owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price will be no less than
one hundred ten percent (110%) of the Fair Market Value per Share on the date of grant. Notwithstanding the foregoing provisions of this
Section 6(e)(i), Options may be granted with a per Share exercise price of less than one hundred percent (100%) of the Fair Market
Value per Share on the date of grant pursuant to a transaction described in, and in a manner consistent with, Code Section 424(a).

 

(ii)
Waiting Period and Exercise Dates. At the time an Option is granted, the Administrator will fix the period within which the Option
may be exercised and will determine any conditions that must be satisfied before the Option may be exercised.

 

(iii)
Form of Consideration. The Administrator will determine the acceptable form of consideration for exercising an Option, including
the method of payment. In the case of an Incentive Stock Option, the Administrator will determine the acceptable form of consideration
at the time of grant. Such consideration may consist entirely of: (1) cash; (2) check; (3) promissory note, to the extent permitted by
Applicable Laws, (4) other Shares, provided that such Shares have a Fair Market Value on the date of surrender equal to the aggregate
exercise price of the Shares as to which such Option will be exercised and provided further that accepting such Shares will not result
in any adverse accounting consequences to the Company, as the Administrator determines in its sole discretion; (5) consideration received
by the Company under cashless exercise program (whether through a broker or otherwise) implemented by the Company in connection with
the Plan; (6) by net exercise, (7) such other consideration and method of payment for the issuance of Shares to the extent permitted
by Applicable Laws, or (8) any combination of the foregoing methods of payment. In making its determination as to the type of consideration
to accept, the Administrator will consider if acceptance of such consideration may be reasonably expected to benefit the Company.

 

    -7-

     

    

 

(f)
Exercise of Option.

 

(i)
Procedure for Exercise; Rights as a Stockholder. Any Option granted hereunder will be exercisable according to the terms of the
Plan and at such times and under such conditions as determined by the Administrator and set forth in the Award Agreement. An Option may
not be exercised for a fraction of a Share.

 

An
Option will be deemed exercised when the Company receives: (i) notice of exercise (in such form as the Administrator may specify
from time to time) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the
Option is exercised (together with applicable tax withholding). Full payment may consist of any consideration and method of payment authorized
by the Administrator and permitted by the Award Agreement and the Plan. Shares issued upon exercise of an Option will be issued in the
name of the Participant or, if requested by the Participant, in the name of the Participant and his or her spouse. Until the Shares are
issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no
right to vote or receive dividends or any other rights as a stockholder will exist with respect to the Shares subject to an Option, notwithstanding
the exercise of the Option. The Company will issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment
will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in
Section 13 of the Plan.

 

Exercising
an Option in any manner will decrease the number of Shares thereafter available, both for purposes of the Plan and for sale under the
Option, by the number of Shares as to which the Option is exercised.

 

(ii)
Termination of Relationship as a Service Provider. If a Participant ceases to be a Service Provider, other than upon the Participant’s
termination as the result of the Participant’s death or Disability, the Participant may exercise his or her Option within thirty
(30) days of termination, or such longer period of time as is specified in the Award Agreement (but in no event later than the expiration
of the term of such Option as set forth in the Award Agreement) to the extent that the Option is vested on the date of termination. Unless
otherwise provided by the Administrator, if on the date of termination the Participant is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option will revert to the Plan. If after termination the Participant does not exercise
his or her Option within the time specified by the Administrator, the Option will terminate, and the Shares covered by such Option will
revert to the Plan.

 

    -8-

     

    

 

(iii)
Disability of Participant. If a Participant ceases to be a Service Provider as a result of the Participant’s Disability,
the Participant may exercise his or her Option within six (6) months of termination, or such longer period of time as is specified in
the Award Agreement (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement) to the
extent the Option is vested on the date of termination. Unless otherwise provided by the Administrator, if on the date of termination
the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to
the Plan. If after termination the Participant does not exercise his or her Option within the time specified herein, the Option will
terminate, and the Shares covered by such Option will revert to the Plan.

 

(iv)
Death of Participant. If a Participant dies while a Service Provider, the Option may be exercised within six (6) months following
the Participant’s death, or within such longer period of time as is specified in the Award Agreement (but in no event later than
the expiration of the term of such Option as set forth in the Award Agreement) to the extent that the Option is vested on the date of
death, by the Participant’s designated beneficiary, provided such beneficiary has been designated prior to the Participant’s
death in a form acceptable to the Administrator. If no such beneficiary has been designated by the Participant, then such Option may
be exercised by the personal representative of the Participant’s estate or by the person(s) to whom the Option is transferred pursuant
to the Participant’s will or in accordance with the laws of descent and distribution. Unless otherwise provided by the Administrator,
if at the time of death Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option
will immediately revert to the Plan. If the Option is not so exercised within the time specified herein, the Option will terminate, and
the Shares covered by such Option will revert to the Plan.

 

7.
Stock Appreciation Rights.

 

(a)
Grant of Stock Appreciation Rights. Subject to the terms and conditions of the Plan, a Stock Appreciation Right may be granted
to Service Providers at any time and from time to time as will be determined by the Administrator, in its sole discretion.

 

(b)
Number of Shares. The Administrator will have complete discretion to determine the number of Shares subject to any Award of Stock
Appreciation Rights.

 

(c)
Exercise Price and Other Terms. The per Share exercise price for the Shares that will determine the amount of the payment to be
received upon exercise of a Stock Appreciation Right as set forth in Section 7(f) will be determined by the Administrator and will be
no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant. Otherwise, the Administrator, subject
to the provisions of the Plan, will have complete discretion to determine the terms and conditions of Stock Appreciation Rights granted
under the Plan.

 

(d)
Stock Appreciation Right Agreement. Each Stock Appreciation Right grant will be evidenced by an Award Agreement that will specify
the exercise price, the term of the Stock Appreciation Right, the conditions of exercise, and such other terms and conditions as the
Administrator, in its sole discretion, will determine.

 

(e)
Expiration of Stock Appreciation Rights. A Stock Appreciation Right granted under the Plan will expire upon the date determined
by the Administrator, in its sole discretion, and set forth in the Award Agreement. Notwithstanding the foregoing, the rules of Section
6(d) relating to the maximum term and Section 6(f) relating to exercise also will apply to Stock Appreciation Rights.

 

    -9-

     

    

 

(f)
Payment of Stock Appreciation Right Amount. Upon exercise of a Stock Appreciation Right, a Participant will be entitled to receive
payment from the Company in an amount determined by multiplying:

 

(i)
The difference between the Fair Market Value of a Share on the date of exercise over the exercise price; times

 

(ii)
The number of Shares with respect to which the Stock Appreciation Right is exercised.

 

At
the discretion of the Administrator, the payment upon Stock Appreciation Right exercise may be in cash, in Shares of equivalent value,
or in some combination thereof.

 

8.
Restricted Stock.

 

(a)
Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the Administrator, at any time and from time to time,
may grant Shares of Restricted Stock to Service Providers in such amounts as the Administrator, in its sole discretion, will determine.

 

(b)
Restricted Stock Agreement. Each Award of Restricted Stock will be evidenced by an Award Agreement that will specify the Period
of Restriction, the number of Shares granted, and such other terms and conditions as the Administrator, in its sole discretion, will
determine. Unless the Administrator determines otherwise, the Company as escrow agent will hold Shares of Restricted Stock until the
restrictions on such Shares have lapsed.

 

(c)
Transferability. Except as provided in this Section 8 or as the Administrator determines, Shares of Restricted Stock may not be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the end of the applicable Period of Restriction.

 

(d)
Other Restrictions. The Administrator, in its sole discretion, may impose such other restrictions on Shares of Restricted Stock
as it may deem advisable or appropriate.

 

(e)
Removal of Restrictions. Except as otherwise provided in this Section 8, Shares of Restricted Stock covered by each Restricted
Stock grant made under the Plan will be released from escrow as soon as practicable after the last day of the Period of Restriction or
at such other time as the Administrator may determine. The Administrator, in its discretion, may accelerate the time at which any restrictions
will lapse or be removed.

 

(f)
Voting Rights. During the Period of Restriction, Service Providers holding Shares of Restricted Stock granted hereunder may exercise
full voting rights with respect to those Shares, unless the Administrator determines otherwise.

 

(g)
Dividends and Other Distributions. During the Period of Restriction, Service Providers holding Shares of Restricted Stock will
be entitled to receive all dividends and other distributions paid with respect to such Shares, unless the Administrator provides otherwise.
If any such dividends or distributions are paid in Shares, the Shares will be subject to the same restrictions on transferability and
forfeitability as the Shares of Restricted Stock with respect to which they were paid.

 

    -10-

     

    

 

(h)
Return of Restricted Stock to Company. On the date set forth in the Award Agreement, the Restricted Stock for which restrictions
have not lapsed will revert to the Company and again will become available for grant under the Plan.

 

9.
Restricted Stock Units.

 

(a)
Grant. Restricted Stock Units may be granted at any time and from time to time as determined by the Administrator. After the Administrator
determines that it will grant Restricted Stock Units, it will advise the Participant in an Award Agreement of the terms, conditions,
and restrictions related to the grant, including the number of Restricted Stock Units.

 

(b)
Vesting Criteria and Other Terms. The Administrator will set vesting criteria in its discretion, which, depending on the extent
to which the criteria are met, will determine the number of Restricted Stock Units that will be paid out to the Participant. The Administrator
may set vesting criteria based upon the achievement of Company-wide, business unit, or individual goals (including, but not limited to,
continued employment or service), or any other basis determined by the Administrator in its discretion.

 

(c)
Earning Restricted Stock Units. Upon meeting the applicable vesting criteria, the Participant will be entitled to receive a payout
as determined by the Administrator. Notwithstanding the foregoing, at any time after the grant of Restricted Stock Units, the Administrator,
in its sole discretion, may reduce or waive any vesting criteria that must be met to receive a payout.

 

(d)
Form and Timing of Payment. Payment of earned Restricted Stock Units will be made as soon as practicable after the date(s) determined
by the Administrator and set forth in the Award Agreement. The Administrator, in its sole discretion, may settle earned Restricted Stock
Units in cash, Shares, or a combination of both.

 

(e)
Cancellation. On the date set forth in the Award Agreement, all unearned Restricted Stock Units will be forfeited to the Company.

 

10.
Compliance With Code Section 409A. Awards will be designed and operated in such a manner that they are either exempt from
the application of, or comply with, the requirements of Code Section 409A, except as otherwise determined in the sole discretion
of the Administrator. The Plan and each Award Agreement under the Plan is intended to meet the requirements of Code Section 409A
and will be construed and interpreted in accordance with such intent, except as otherwise determined in the sole discretion of the Administrator.
To the extent that an Award or payment, or the settlement or deferral thereof, is subject to Code Section 409A the Award will be
granted, paid, settled or deferred in a manner that will meet the requirements of Code Section 409A, such that the grant, payment,
settlement or deferral will not be subject to the additional tax or interest applicable under Code Section 409A.

 

11.
Leaves of Absence/Transfer Between Locations. Unless the Administrator provides otherwise, vesting of Awards granted hereunder
will be suspended during any unpaid leave of absence. A Participant will not cease to be an Employee in the case of (i) any leave
of absence approved by the Company or (ii) transfers between locations of the Company or between the Company, its Parent, or any
Subsidiary. For purposes of Incentive Stock Options, no such leave may exceed three (3) months, unless reemployment upon expiration of
such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company is not
so guaranteed, then six (6) months following the first (1st) day of such leave, any Incentive Stock Option held by the Participant
will cease to be treated as an Incentive Stock Option and will be treated for tax purposes as a Nonstatutory Stock Option.

 

    -11-

     

    

 

12.
Limited Transferability of Awards.

 

(a)
Unless determined otherwise by the Administrator, Awards may not be sold, pledged, assigned, hypothecated, or otherwise transferred in
any manner other than by will or by the laws of descent and distribution, and may be exercised, during the lifetime of the Participant,
only by the Participant. If the Administrator makes an Award transferable, such Award may only be transferred (i) by will, (ii) by the
laws of descent and distribution, or (iii) as permitted by Rule 701 of the Securities Act of 1933, as amended (the “Securities
Act”).

 

(b)
Further, until the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, or after the Administrator
determines that it is, will, or may no longer be relying upon the exemption from registration under the Exchange Act as set forth in
Rule 12h-1(f) promulgated under the Exchange Act, an Option, or prior to exercise, the Shares subject to the Option, may not be pledged,
hypothecated or otherwise transferred or disposed of, in any manner, including by entering into any short position, any “put equivalent
position” or any “call equivalent position” (as defined in Rule 16a-1(h) and Rule 16a-1(b) of the Exchange Act, respectively),
other than to (i) persons who are “family members” (as defined in Rule 701(c)(3) of the Securities Act) through gifts or
domestic relations orders, or (ii) to an executor or guardian of the Participant upon the death or disability of the Participant. Notwithstanding
the foregoing sentence, the Administrator, in its sole discretion, may determine to permit transfers to the Company or in connection
with a Change in Control or other acquisition transactions involving the Company to the extent permitted by Rule 12h-1(f).

 

13.
Adjustments; Dissolution or Liquidation; Merger or Change in Control.

 

(a)
Adjustments. In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other
property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Shares or other securities of the Company, or other change in the corporate structure of the Company affecting
the Shares occurs, the Administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended to
be made available under the Plan, will adjust the number and class of shares of stock that may be delivered under the Plan and/or the
number, class, and price of shares of stock covered by each outstanding Award; provided, however, that the Administrator will make such
adjustments to an Award required by Section 25102(o) of the California Corporations Code to the extent the Company is relying upon the
exemption afforded thereby with respect to the Award.

 

(b)
Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Administrator will notify
each Participant as soon as practicable prior to the effective date of such proposed transaction. To the extent it has not been previously
exercised, an Award will terminate immediately prior to the consummation of such proposed action.

 

    -12-

     

    

 

(c)
Merger or Change in Control. In the event of a merger of the Company with or into another corporation or other entity or a Change
in Control, each outstanding Award will be treated as the Administrator determines (subject to the provisions of the following paragraph)
without a Participant’s consent, including, without limitation, that (i) Awards will be assumed, or substantially equivalent Awards
will be substituted, by the acquiring or succeeding corporation (or an affiliate thereof) with appropriate adjustments as to the number
and kind of shares and prices; (ii) upon written notice to a Participant, that the Participant’s Awards will terminate upon or
immediately prior to the consummation of such merger or Change in Control; (iii) outstanding Awards will vest and become exercisable,
realizable, or payable, or restrictions applicable to an Award will lapse, in whole or in part prior to or upon consummation of such
merger or Change in Control, and, to the extent the Administrator determines, terminate upon or immediately prior to the effectiveness
of such merger or Change in Control; (iv) (A) the termination of an Award in exchange for an amount of cash and/or property, if any,
equal to the amount that would have been attained upon the exercise of such Award or realization of the Participant’s rights as
of the date of the occurrence of the transaction (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction
the Administrator determines in good faith that no amount would have been attained upon the exercise of such Award or realization of
the Participant’s rights, then such Award may be terminated by the Company without payment), or (B) the replacement of such
Award with other rights or property selected by the Administrator in its sole discretion; or (v) any combination of the foregoing. In
taking any of the actions permitted under this subsection 13(c), the Administrator will not be obligated to treat all Awards, all Awards
held by a Participant, or all Awards of the same type, similarly.

 

In
the event that the successor corporation does not assume or substitute for the Award (or portion thereof), the Participant will fully
vest in and have the right to exercise all of his or her outstanding Options and Stock Appreciation Rights, including Shares as to which
such Awards would not otherwise be vested or exercisable, all restrictions on Restricted Stock and Restricted Stock Units will lapse,
and, with respect to Awards with performance-based vesting, all performance goals or other vesting criteria will be deemed achieved at
one hundred percent (100%) of target levels and all other terms and conditions met. In addition, if an Option or Stock Appreciation Right
is not assumed or substituted in the event of a merger or Change in Control, the Administrator will notify the Participant in writing
or electronically that the Option or Stock Appreciation Right will be exercisable for a period of time determined by the Administrator
in its sole discretion, and the Option or Stock Appreciation Right will terminate upon the expiration of such period.

 

For
the purposes of this subsection 13(c), an Award will be considered assumed if, following the merger or Change in Control, the Award confers
the right to purchase or receive, for each Share subject to the Award immediately prior to the merger or Change in Control, the consideration
(whether stock, cash, or other securities or property) received in the merger or Change in Control by holders of Common Stock for each
Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the merger
or Change in Control is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of
the successor corporation, provide for the consideration to be received upon the exercise of an Option or Stock Appreciation Right or
upon the payout of a Restricted Stock Unit, for each Share subject to such Award, to be solely common stock of the successor corporation
or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the merger or Change in
Control.

 

    -13-

     

    

 

Notwithstanding
anything in this Section 13(c) to the contrary, an Award that vests, is earned or paid-out upon the satisfaction of one or more performance
goals will not be considered assumed if the Company or its successor modifies any of such performance goals without the Participant’s
consent; provided, however, a modification to such performance goals only to reflect the successor corporation’s post-Change in
Control corporate structure will not be deemed to invalidate an otherwise valid Award assumption.

 

Notwithstanding
anything in this Section 13(c) to the contrary, if a payment under an Award Agreement is subject to Code Section 409A and if the change
in control definition contained in the Award Agreement does not comply with the definition of “change of control” for purposes
of a distribution under Code Section 409A, then any payment of an amount that is otherwise accelerated under this Section will be delayed
until the earliest time that such payment would be permissible under Code Section 409A without triggering any penalties applicable under
Code Section 409A.

 

14.
Tax Withholding.

 

(a)
Withholding Requirements. Prior to the delivery of any Shares or cash pursuant to an Award (or exercise thereof), the Company
will have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy
federal, state, local, foreign or other taxes (including the Participant’s FICA obligation) required to be withheld with respect
to such Award (or exercise thereof).

 

(b)
Withholding Arrangements. The Administrator, in its sole discretion and pursuant to such procedures as it may specify from time
to time, may permit a Participant to satisfy such tax withholding obligation, in whole or in part by (without limitation) (i) paying
cash, (ii) electing to have the Company withhold otherwise deliverable Shares having a Fair Market Value equal to the minimum statutory
amount required to be withheld, (iii) delivering to the Company already-owned Shares having a Fair Market Value equal to the statutory
amount required to be withheld, provided the delivery of such Shares will not result in any adverse accounting consequences, as the Administrator
determines in its sole discretion, or (iv) selling a sufficient number of Shares otherwise deliverable to the Participant through
such means as the Administrator may determine in its sole discretion (whether through a broker or otherwise) equal to the amount required
to be withheld. The amount of the withholding requirement will be deemed to include any amount which the Administrator agrees may be
withheld at the time the election is made, not to exceed the amount determined by using the maximum federal, state or local marginal
income tax rates applicable to the Participant with respect to the Award on the date that the amount of tax to be withheld is to be determined.
The Fair Market Value of the Shares to be withheld or delivered will be determined as of the date that the taxes are required to be withheld.

 

15.
No Effect on Employment or Service. Neither the Plan nor any Award will confer upon a Participant any right with respect to continuing
the Participant’s relationship as a Service Provider with the Company, nor will they interfere in any way with the Participant’s
right or the Company’s right to terminate such relationship at any time, with or without cause, to the extent permitted by Applicable
Laws.

 

16.
Date of Grant. The date of grant of an Award will be, for all purposes, the date on which the Administrator makes the determination
granting such Award, or such other later date as is determined by the Administrator. Notice of the determination will be provided to
each Participant within a reasonable time after the date of such grant.

 

    -14-

     

    

 

17.
Term of Plan. Subject to Section 21 of the Plan, the Plan will become effective upon its adoption by the Board. Unless sooner
terminated under Section 18, it will continue in effect for a term of ten (10) years from the later of (a) the effective date of the
Plan, or (b) the earlier of the most recent Board or stockholder approval of an increase in the number of Shares reserved for issuance
under the Plan.

 

18.
Amendment and Termination of the Plan.

 

(a)
Amendment and Termination. The Board may at any time amend, alter, suspend or terminate the Plan.

 

(b)
Stockholder Approval. The Company will obtain stockholder approval of any Plan amendment to the extent necessary and desirable
to comply with Applicable Laws.

 

(c)
Effect of Amendment or Termination. No amendment, alteration, suspension or termination of the Plan will impair the rights of
any Participant, unless mutually agreed otherwise between the Participant and the Administrator, which agreement must be in writing and
signed by the Participant and the Company. Termination of the Plan will not affect the Administrator’s ability to exercise the
powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination.

 

19.
Conditions Upon Issuance of Shares.

 

(a)
Legal Compliance. Shares will not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance
and delivery of such Shares will comply with Applicable Laws and will be further subject to the approval of counsel for the Company with
respect to such compliance.

 

(b)
Investment Representations. As a condition to the exercise of an Award, the Company may require the person exercising such Award
to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required.

 

20.
Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction,
which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, will
relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority will
not have been obtained.

 

21.
Stockholder Approval. The Plan will be subject to approval by the stockholders of the Company within twelve (12) months after
the date the Plan is adopted by the Board. Such stockholder approval will be obtained in the manner and to the degree required under
Applicable Laws.

 

    -15-

     

    

 

22.
Information to Participants. Beginning on the earlier of (i) the date that the aggregate number of Participants under this Plan
is five hundred (500) or more and the Company is relying on the exemption provided by Rule 12h-1(f)(1) under the Exchange Act and (ii)
the date that the Company is required to deliver information to Participants pursuant to Rule 701 under the Securities Act, and until
such time as the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, is no longer relying
on the exemption provided by Rule 12h-1(f)(1) under the Exchange Act or is no longer required to deliver information to Participants
pursuant to Rule 701 under the Securities Act, the Company shall provide to each Participant the information described in paragraphs
(e)(3), (4), and (5) of Rule 701 under the Securities Act not less frequently than every six (6) months with the financial statements
being not more than 180 days old and with such information provided either by physical or electronic delivery to the Participants or
by written notice to the Participants of the availability of the information on an Internet site that may be password-protected and of
any password needed to access the information. The Company may request that Participants agree to keep the information to be provided
pursuant to this section confidential. If a Participant does not agree to keep the information to be provided pursuant to this section
confidential, then the Company will not be required to provide the information unless otherwise required pursuant to Rule 12h-1(f)(1)
under the Exchange Act or Rule 701 of the Securities Act.

 

 

-16-

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