Document:

Exhibit 10.5

 

SECOND AMENDED AND RESTATED

STAR SCIENTIFIC, INC. 

2008 INCENTIVE AWARD PLAN 

 

ARTICLE 1. 

 

PURPOSE 

 

The purpose of the Star Scientific, Inc.
2008 Incentive Award Plan (the “Plan”) is to promote the success and enhance the value of Star Scientific, Inc.
(the “Company”) by linking the personal interests of the members of the Board, Employees, and Consultants to
those of the Company’s stockholders and by providing such individuals with an incentive for outstanding performance to generate
superior returns to Company stockholders. The Plan is further intended to provide flexibility to the Company in its ability to
motivate, attract, and retain the services of members of the Board, Employees, and Consultants upon whose judgment, interest, and
special effort the successful conduct of the Company’s operation is largely dependent.

 

ARTICLE 2. 

 

DEFINITIONS AND CONSTRUCTION 

 

Wherever the following terms are used in
the Plan they shall have the meanings specified below, unless the context clearly indicates otherwise. The singular pronoun shall
include the plural where the context so indicates.

 

2.1 “Award” means an
Option, a Restricted Stock award, a Stock Appreciation Right award, a Performance Share award, a Performance Stock Unit award,
a Dividend Equivalents award, a Stock Payment award, a Deferred Stock award, a Restricted Stock Unit award, or a Performance-Based
Award granted to a Participant pursuant to the Plan.

 

2.2 “Award Agreement”
means any written agreement, contract, or other instrument or document evidencing an Award, including through electronic medium.

 

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

 

2.4 “Change in Control”
means and includes each of the following:

 

(a) A transaction or series of transactions
(other than an offering of Stock to the general public through a registration statement filed with the Securities and Exchange
Commission) whereby any “person” or related “group” of “persons” (as such terms are used in
Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the Company, any of its subsidiaries, an employee benefit plan maintained
by the Company or any of its subsidiaries or a “person” that, prior to such transaction, directly or indirectly controls,
is controlled by, or is under common control with, the Company) directly or indirectly acquires beneficial ownership (within the
meaning of Rule 13d-3 under the Exchange Act) of securities of the Company possessing more than 50% of the total combined voting
power of the Company’s securities outstanding immediately after such acquisition; or

 

(b) The consummation by the Company (whether
directly involving the Company or indirectly involving the Company through one or more intermediaries) of (x) a merger, consolidation,
reorganization, or business combination or (y) a sale or other disposition of all or substantially all of the Company’s
assets in any single transaction or series of related transactions or (z) the acquisition of assets or stock of another entity,
in each case other than a transaction:

 

    	 

    	 

    

 

(i) Which results in the Company’s
voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by
being converted into voting securities of the Company or the person that, as a result of the transaction, controls, directly or
indirectly, the Company or owns, directly or indirectly, all or substantially all of the Company’s assets or otherwise succeeds
to the business of the Company (the Company or such person, the “Successor Entity”)) directly or indirectly,
at least a majority of the combined voting power of the Successor Entity’s outstanding voting securities immediately after
the transaction, and

 

(ii) After which no person or group beneficially
owns voting securities representing 50% or more of the combined voting power of the Successor Entity; provided, however,
that no person or group shall be treated for purposes of this Section 2.4(b)(ii) as beneficially owning 50% or more of combined
voting power of the Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the
transaction.

 

The Committee shall have full and final
authority, which shall be exercised in its discretion, to determine conclusively whether a Change in Control of the Company has
occurred pursuant to the above definition, and the date of the occurrence of such Change in Control and any incidental matters
relating thereto.

 

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

 

2.6 “Committee” means
the committee of the Board described in Article 12.

 

2.7 “Consultant” means
any consultant or adviser if: (a) the consultant or adviser renders bona fide services to the Company or any Subsidiary; (b) the
services rendered by the consultant or adviser are not in connection with the offer or sale of securities in a capital-raising
transaction and do not directly or indirectly promote or maintain a market for the Company’s securities; and (c) the
consultant or adviser is a natural person.

 

2.8 “Covered Employee”
means an Employee who is, or could be, a “covered employee” within the meaning of Section 162(m) of the Code.

 

2.9 “Deferred Stock”
means a right to receive a specified number of shares of Stock during specified time periods pursuant to Section 8.5.

 

2.10 “Director” means
a member of the Board, or as applicable, a member of the board of directors of a Subsidiary.

 

2.11 “Disability” means
that the Participant qualifies to receive long-term disability payments under the Company’s long-term disability insurance
program, as it may be amended from time to time.

 

2.12 “Dividend Equivalents”
means a right granted to a Participant pursuant to Section 8.3 to receive the equivalent value (in cash or Stock) of dividends
paid on Stock.

 

2.13 “Effective Date”
shall have the meaning set forth in Section 13.1.

 

2.14 “Eligible Individual”
means any person who is an Employee, a Consultant or an Independent Director, as determined by the Committee.

 

2.15 “Employee” means
any officer or other employee (as defined in accordance with Section 3401(c) of the Code) of the Company or any Subsidiary.

 

    	 

    	 

    

 

2.16 “Equity Restructuring”
shall mean a nonreciprocal transaction between the Company and its stockholders, such as a stock dividend, stock split, spin-off,
rights offering or recapitalization through a large, nonrecurring cash dividend, that affects the shares of Stock (or other securities
of the Company) or the share price of Stock (or other securities) and causes a change in the per share value of the Stock underlying
outstanding Awards.

 

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

 

2.18 “Fair Market Value”
means, as of any given date, (a) if Stock is traded on any established stock exchange, the closing price of a share of Stock
on the first trading date during which a sale occurred immediately prior to such given date as reported in the Wall Street Journal
(or such other source as the Company may deem reliable for such purposes); or (b) if Stock is not traded on an exchange but
is quoted on a national market or other quotation system, the last sales price on the date on which sales prices are reported immediately
prior to such given date; or (c) if Stock is not publicly traded, the fair market value established by the Committee acting
in good faith.

 

2.19 “Incentive Stock Option”
means an Option that is intended to meet the requirements of Section 422 of the Code or any successor provision thereto.

 

2.20 “Independent Director”
means a Director of the Company who is not an Employee.

 

2.21 “Non-Employee Director”
means a Director of the Company who qualifies as a “Non-Employee Director” as defined in Rule 16b-3(b)(3) under the
Exchange Act, or any successor rule.

 

2.22 “Non-Qualified Stock Option”
means an Option that is not intended to be an Incentive Stock Option.

 

2.23 “Option” means
a right granted to a Participant pursuant to Article 5 of the Plan to purchase a specified number of shares of Stock at a specified
price during specified time periods. An Option may be either an Incentive Stock Option or a Non-Qualified Stock Option.

 

2.24 “Participant” means
any Eligible Individual who, as a member of the Board, Consultant or Employee, has been granted an Award pursuant to the Plan.

 

2.25 “Performance-Based Award”
means an Award granted to selected Covered Employees which is subject to the terms and conditions set forth in Article 9.

 

2.26 “Performance Criteria”
means the criteria that the Committee selects for purposes of establishing the Performance Goal or Performance Goals for a Participant
for a Performance Period. The Performance Criteria that will be used to establish Performance Goals are limited to the following:
net sales, revenue, revenue growth or product revenue growth, operating income (before or after taxes, pre- or after- tax income
(before or after allocation of corporate overhead and bonus), net earnings, earnings per share, net income (before or after taxes),
return on equity, total shareholder return, return on assets or net assets, appreciation in and/or maintenance of share price,
market share, gross profits, earnings (including earnings before taxes, earnings before interest and taxes or earnings before interest,
taxes depreciation and amortization), economic value-added models or equivalent metrics, comparisons with various stock market
indices, reductions in costs, cash flow or cash flow per share (before or after dividends), return on capital (including return
on total capital or return on invested capital, cash flow return on investment, improvement in or attainment of expense levels,
operating margins, gross margins or cash margin, year-end cash, debt reductions, shareholder equity, market share, regulatory achievements,
and implementation, completion or attainment of measurable objectives with respect to research, development, products or projects
and recruiting and maintaining personnel. The Committee shall define in an objective fashion the manner of calculating the Performance
Criteria it selects to use for such Performance Period for such Participant.

 

    	 

    	 

    

 

2.27 “Performance
Goals” means, for a Performance Period, the goals established in writing by the Committee for the Performance Period
based upon the Performance Criteria. Depending on the Performance Criteria used to establish such Performance Goals, the Performance
Goals may be expressed in terms of overall Company performance or the performance of a division, business unit, or an individual.
The Committee, in its discretion, may, within the time prescribed by Section 162(m) of the Code, adjust or modify the calculation
of Performance Goals for such Performance Period in order to prevent the dilution or enlargement
of the rights of Participants (a) in the event of, or in anticipation of, any unusual or extraordinary corporate item, transaction,
event, or development, or (b) in recognition of, or in anticipation of, any other unusual or nonrecurring events affecting
the Company, or the financial statements of the Company, or in response to, or in anticipation of, changes in applicable laws,
regulations, accounting principles, or business conditions. 

 

2.28 “Performance Period”
means the one or more periods of time, which may be of varying and overlapping durations, as the Committee may select, over which
the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant’s right to,
and the payment of, a Performance-Based Award.

 

2.29 “Performance Share”
means a right granted to a Participant pursuant to Section 8.1, to receive Stock, the payment of which is contingent upon
achieving certain Performance Goals or other performance-based targets established by the Committee.

 

2.30 “Performance Stock Unit”
means a right granted to a Participant pursuant to Section 8.2, to receive Stock, the payment of which is contingent upon
achieving certain Performance Goals or other performance-based targets established by the Committee.

 

2.31 “Plan” means this
Star Scientific, Inc. 2008 Incentive Award Plan, as it may be amended from time to time.

 

2.32 “Prior Plan” means
the Amended and Restated Star Scientific, Inc. 2000 Equity Incentive Plan, as such plan may be amended from time to time.

 

2.33 “Qualified Performance-Based
Compensation” means any compensation that is intended to qualify as “qualified performance-based compensation”
as described in Section 162(m)(4)(C) of the Code.

 

2.34 “Restricted Stock”
means Stock awarded to a Participant pursuant to Article 6 that is subject to certain restrictions and may be subject to risk of
forfeiture.

 

2.35 “Restricted Stock Unit”
means an Award granted pursuant to Section 8.6.

 

2.36 “Securities Act”
shall mean the Securities Act of 1933, as amended.

 

2.37 “Stock” means the
common stock of the Company, par value $0.0001 per share, and such other securities of the Company that may be substituted for
Stock pursuant to Article 11.

 

2.38 “Stock Appreciation Right”
or “SAR” means a right granted pursuant to Article 7 to receive a payment equal to the excess of the Fair Market
Value of a specified number of shares of Stock on the date the SAR is exercised over the Fair Market Value on the date the SAR
was granted as set forth in the applicable Award Agreement.

 

2.39 “Stock Payment”
means (a) a payment in the form of shares of Stock, or (b) an option or other right to purchase shares of Stock, as part
of any bonus, deferred compensation or other arrangement, made in lieu of all or any portion of the compensation, granted pursuant
to Section 8.4.

 

2.40 “Subsidiary” means
any “subsidiary corporation” as defined in Section 424(f) of the Code and any applicable regulations promulgated
thereunder or any other entity of which a majority of the outstanding voting stock or voting power is beneficially owned directly
or indirectly by the Company.

 

    	 

    	 

    

 

ARTICLE 3. 

 

SHARES SUBJECT TO THE PLAN

 

3.1 Number of Shares.

 

(a) Subject to Article 11 and Section 3.1(b),
the aggregate number of shares of Stock which may be issued or transferred pursuant to Awards under the Plan is the sum of (i) 16,900,000
shares; (ii) any shares of Stock which as of the Effective Date are available for issuance under the Prior Plan and which
following the Effective Date are not issued under the Prior Plan and (iii) any shares of Stock covered by the options granted
under the Prior Plan that remain unexercised at the time of their cancellation, expiration, forfeiture or termination pursuant
to the terms of the Prior Plan; provided, however, no more than 2,000,000 shares of Stock may be issued upon the exercise
of Incentive Stock Options.

 

(b) To the extent that an Award terminates,
expires, or lapses for any reason, any shares of Stock subject to the Award shall again be available for the grant of an Award
pursuant to the Plan. Additionally, any shares of Stock tendered or withheld to satisfy the grant or exercise price or tax withholding
obligation pursuant to any Award shall again be available for the grant of an Award pursuant to the Plan. To the extent permitted
by applicable law or any exchange rule, shares of Stock issued in assumption of, or in substitution for, any outstanding awards
of any entity acquired in any form of combination by the Company or any Subsidiary shall not be counted against shares of Stock
available for grant pursuant to this Plan. The payment of Dividend Equivalents in cash in conjunction with any outstanding Awards
shall not be counted against the shares available for issuance under the Plan. Notwithstanding the provisions of this Section 3.1(b),
no shares of Common Stock may again be optioned, granted or awarded if such action would cause an Incentive Stock Option to fail
to qualify as an incentive stock option under Section 422 of the Code.

 

3.2 Stock Distributed. Any Stock
distributed pursuant to an Award may consist, in whole or in part, of authorized and unissued Stock, treasury Stock or Stock purchased
on the open market.

 

3.3 Limitation on Number of Shares Subject
to Awards. Notwithstanding any provision in the Plan to the contrary, and subject to Article 11, the maximum number of shares
of Stock with respect to one or more Awards that may be granted to any one Participant during any calendar year shall be 5,000,000.

 

ARTICLE 4. 

 

ELIGIBILITY AND PARTICIPATION 

 

4.1 Eligibility. Each Eligible Individual
shall be eligible to be granted one or more Awards pursuant to the Plan.

 

4.2 Participation. Subject to the
provisions of the Plan, the Committee may, from time to time, select from among all Eligible Individuals, those to whom Awards
shall be granted and shall determine the nature and amount of each Award. No Eligible Individual shall have any right to be granted
an Award pursuant to this Plan.

 

4.3 Foreign Participants. Notwithstanding
any provision of the Plan to the contrary, in order to comply with the laws in other countries in which the Company and its Subsidiaries
operate or have Eligible Individuals, the Committee, in its sole discretion, shall have the power and authority to: (i) determine
which Subsidiaries shall be covered by the Plan; (ii) determine which Eligible Individuals outside the United States are eligible
to participate in the Plan; (iii) modify the terms and conditions of any Award granted to Eligible Individuals outside the
United States to comply with applicable foreign laws; (iv) establish subplans and modify exercise procedures and other terms
and procedures, to the extent such actions may be necessary or advisable (any such subplans and/or modifications shall be attached
to this Plan as appendices); provided, however, that no such subplans and/or modifications shall increase the share limitations
contained in Sections 3.1 and 3.3 of the Plan; and (v) take any action, before or after an Award is made, that it deems advisable
to obtain approval or comply with any necessary local governmental regulatory exemptions or approvals. Notwithstanding the foregoing,
the Committee may not take any actions hereunder, and no Awards shall be granted, that would violate the Exchange Act, the Code,
any securities law or governing statute or any other applicable law.

 

    	 

    	 

    

 

ARTICLE 5. 

 

STOCK OPTIONS 

 

5.1 General. The Committee is authorized
to grant Options to Eligible Individuals on the following terms and conditions:

 

(a) Exercise Price. The exercise
price per share of Stock subject to an Option shall be determined by the Committee and set forth in the Award Agreement; provided
that the exercise price for any Option shall not be less than the Fair Market Value of a share of Stock on the date of grant.

 

(b) Time and Conditions of Exercise.
The Committee shall determine the time or times at which an Option may be exercised in whole or in part; provided that the
term of any Option granted under the Plan shall not exceed ten years. The Committee shall also determine the performance or other
conditions, if any, that must be satisfied before all or part of an Option may be exercised.

 

(c) Payment. The Committee shall
determine the methods by which the exercise price of an Option may be paid, the form of payment, including, without limitation:
(i) cash, (ii) shares of Stock held for such period of time as may be required by the Committee in order to avoid adverse
accounting consequences and having a Fair Market Value on the date of delivery equal to the aggregate exercise price of the Option
or exercised portion thereof, or (iii) other property acceptable to the Committee (including through the delivery of a notice
that the Participant has placed a market sell order with a broker with respect to shares of Stock then issuable upon exercise of
the Option, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in
satisfaction of the Option exercise price; provided that payment of such proceeds is then made to the Company upon settlement
of such sale). The Committee shall also determine the methods by which shares of Stock shall be delivered or deemed to be delivered
to Participants. Notwithstanding any other provision of the Plan to the contrary, no Participant who is a Director or an “executive
officer” of the Company within the meaning of Section 13(k) of the Exchange Act shall be permitted to pay the exercise
price of an Option, or continue any extension of credit with respect to the exercise price of an Option with a loan from the Company
or a loan arranged by the Company in violation of Section 13(k) of the Exchange Act.

 

(d) Evidence of Grant. All Options
shall be evidenced by an Award Agreement between the Company and the Participant. The Award Agreement shall include such additional
provisions as may be specified by the Committee.

 

5.2 Incentive Stock Options. Incentive
Stock Options shall be granted only to Employees and the terms of any Incentive Stock Options granted pursuant to the Plan, in
addition to the requirements of Section 5.1, must comply with the provisions of this Section 5.2.

 

(a) Exercise Price. The exercise
price per share of Stock shall be set by the Committee; provided that subject to Section 5.2(d), the exercise price
for any Incentive Stock Option shall not be less than 100% of the Fair Market Value on the date of grant.

 

    	 

    	 

    

 

(b) Expiration. Subject to Section 5.2(d),
an Incentive Stock Option shall expire and may not be exercised to any extent by anyone after the first to occur of the following
events:

 

(i) Ten years from the date it is granted,
unless an earlier time is set in the Award Agreement;

 

(ii) Three months after the Participant’s
termination of employment as an Employee; and

 

(iii) One year after the date of the Participant’s
termination of employment or service on account of Disability or death. Upon the Participant’s Disability or death, any Incentive
Stock Options exercisable at the Participant’s Disability or death may be exercised by the Participant’s legal representative
or representatives, by the person or persons entitled to do so pursuant to the Participant’s last will and testament, or,
if the Participant fails to make testamentary disposition of such Incentive Stock Option or dies intestate, by the person or persons
entitled to receive the Incentive Stock Option pursuant to the applicable laws of descent and distribution.

 

(c) Dollar Limitation. The aggregate
Fair Market Value (determined as of the time the Option is granted) of all shares of Stock with respect to which Incentive Stock
Options are first exercisable by a Participant in any calendar year may not exceed $100,000 or such other limitation as imposed
by Section 422(d) of the Code, or any successor provision. To the extent that Incentive Stock Options are first exercisable
by a Participant in excess of such limitation, the excess shall be considered Non-Qualified Stock Options.

 

(d) Ten Percent Owners. An Incentive
Stock Option shall be granted to any individual who, at the date of grant, owns stock possessing more than ten percent of the total
combined voting power of all classes of Stock of the Company only if such Option is granted at a price that is not less than 110%
of Fair Market Value on the date of grant and the Option is exercisable for no more than five years from the date of grant.

 

(e) Notice of Disposition. The
Participant shall give the Company prompt notice of any disposition of shares of Stock acquired by exercise of an Incentive Stock
Option within (i) two years from the date of grant of such Incentive Stock Option or (ii) one year after the transfer
of such shares of Stock to the Participant.

 

(f) Right to Exercise. During a
Participant’s lifetime, an Incentive Stock Option may be exercised only by the Participant.

 

(g) Failure to Meet Requirements.
Any Option (or portion thereof) purported to be an Incentive Stock Option, which, for any reason, fails to meet the requirements
of Section 422 of the Code shall be considered a Non-Qualified Stock Option.

 

5.3 Automatic Grants to Independent
Directors. Each Independent Director shall be granted under the Plan on the date of such person’s first election to the
Board, Non-Qualified Stock Options to purchase up to 50,000 shares of Stock, 50% of which shall be exercisable after one year from
the date of the grant and 100% of which shall be exercisable after two years from the date of the grant. Each Independent Director
will also be granted on the anniversary of such Independent Director’s initial election to the Board, Non-Qualified Stock
Options to purchase up to 50,000 shares of Stock which shall be vested and exercisable immediately on the date of grant. Each such
Option shall expire ten years after the date of grant and shall be subject to earlier termination as provided in the Plan. Notwithstanding
the foregoing, if at any time during the last six (6) months of the term of any Option granted pursuant to this Section 5.3,
the holder thereof is precluded from selling shares of Stock underlying such Option solely by reason of the application to such
Independent Director of the policies contained in the Company’s Insider Trading Compliance Manual (or any similar successor
policies), the term of such Option shall be deemed automatically extended by a period equal to six (6) months beginning with
the first day during which such Independent Director shall no longer be so precluded; provided, however, that in
no event shall such term be extended beyond the tenth anniversary of the date of grant of the Option. Except as set forth in this
Section 5.2(d), all of the provisions of the Plan shall be applicable to Awards granted to Independent Directors hereunder.

 

 

    	 

    	 

    

 

ARTICLE 6. 

 

RESTRICTED STOCK AWARDS 

 

6.1 Grant of Restricted Stock. The
Committee is authorized to make Awards of Restricted Stock to any Eligible Individual selected by the Committee in such amounts
and subject to such terms and conditions as determined by the Committee. All Awards of Restricted Stock shall be evidenced by an
Award Agreement.

 

6.2 Issuance and Restrictions. Restricted
Stock shall be subject to such restrictions on transferability and other restrictions as the Committee may impose (including, without
limitation, limitations on the right to vote Restricted Stock or the right to receive dividends on the Restricted Stock). These
restrictions may lapse separately or in combination at such times, pursuant to such circumstances, in such installments, or otherwise,
as the Committee determines at the time of the grant of the Award or thereafter.

 

6.3 Forfeiture. Except as otherwise
determined by the Committee at the time of the grant of the Award or thereafter, upon termination of employment or service during
the applicable restriction period, Restricted Stock that is at that time subject to restrictions shall be forfeited; provided,
however, that, the Committee may (a) provide in any Restricted Stock Award Agreement that restrictions or forfeiture conditions
relating to Restricted Stock will be waived in whole or in part in the event of terminations resulting from specified causes, and
(b) in other cases waive in whole or in part restrictions or forfeiture conditions relating to Restricted Stock.

 

6.4 Certificates for Restricted Stock.
Restricted Stock granted pursuant to the Plan may be evidenced in such manner as the Committee shall determine. If certificates
representing shares of Restricted Stock are registered in the name of the Participant, certificates must bear an appropriate legend
referring to the terms, conditions, and restrictions applicable to such Restricted Stock, and the Company may, at its discretion,
retain physical possession of the certificate until such time as all applicable restrictions lapse.

 

ARTICLE 7. 

 

STOCK APPRECIATION RIGHTS 

 

7.1 Grant of Stock Appreciation Rights.

 

(a) A Stock Appreciation Right may be
granted to any Eligible Individual selected by the Committee. A Stock Appreciation Right shall be subject to such terms and conditions
not inconsistent with the Plan as the Committee shall impose and shall be evidenced by an Award Agreement.

 

(b) A Stock Appreciation Right shall entitle
the Participant (or other person entitled to exercise the Stock Appreciation Right pursuant to the Plan) to exercise all or a specified
portion of the Stock Appreciation Right (to the extent then exercisable pursuant to its terms) and to receive from the Company
an amount equal to the product of (i) the excess of (A) the Fair Market Value of the Stock on the date the Stock Appreciation
Right is exercised over (B) the Fair Market Value of the Stock on the date the Stock Appreciation Right was granted and (ii) the
number of shares of Stock with respect to which the Stock Appreciation Right is exercised, subject to any limitations the Committee
may impose.

 

7.2 Payment and Limitations on Exercise.

 

(a) Subject to Sections 7.2(b), payment
of the amounts determined under Sections 7.1(b) above shall be in cash, in Stock (based on its Fair Market Value as of the date
the Stock Appreciation Right is exercised) or a combination of both, as determined by the Committee in the Award Agreement.

 

    	 

    	 

    

 

(b) To the extent any payment under Section 7.1(b)
is effected in Stock, it shall be made subject to satisfaction of all provisions of Article 5 above pertaining to Options.

 

 

ARTICLE 8. 

 

OTHER TYPES OF AWARDS 

 

8.1 Performance Share Awards. Any
Eligible Individual selected by the Committee may be granted one or more Performance Share awards which shall be denominated in
a number of shares of Stock and which may be linked to any one or more of the Performance Criteria or other specific performance
criteria determined appropriate by the Committee, in each case on a specified date or dates or over any period or periods determined
by the Committee. In making such determinations, the Committee shall consider (among such other factors as it deems relevant in
light of the specific type of award) the contributions, responsibilities and other compensation of the particular Participant.

 

8.2 Performance Stock Units.
Any Eligible Individual selected by the Committee may be granted one or more Performance Stock Unit awards which shall be denominated
in unit equivalent of shares of Stock and/or units of value including dollar value of shares of Stock and which may be linked to
any one or more of the Performance Criteria or other specific performance criteria determined appropriate by the Committee, in
each case on a specified date or dates or over any period or periods determined by the Committee. In making such determinations,
the Committee shall consider (among such other factors as it deems relevant in light of the specific type of award) the contributions,
responsibilities and other compensation of the particular Participant.

 

8.3 Dividend Equivalents.

 

(a) Any Eligible Individual selected by
the Committee may be granted Dividend Equivalents based on the dividends declared on the shares of Stock that are subject to any
Award, to be credited as of dividend payment dates, during the period between the date the Award is granted and the date the Award
is exercised, vests or expires, as determined by the Committee. Such Dividend Equivalents shall be converted to cash or additional
shares of Stock by such formula and at such time and subject to such limitations as may be determined by the Committee.

 

(b) Dividend Equivalents granted with
respect to Options or SARs that are intended to be Qualified Performance-Based Compensation shall be payable, with respect to pre-exercise
periods, regardless of whether such Option or SAR is subsequently exercised.

 

8.4 Stock Payments. Any Eligible
Individual selected by the Committee may receive Stock Payments in the manner determined from time to time by the Committee. The
number of shares shall be determined by the Committee and may be based upon the Performance Criteria or other specific performance
criteria determined appropriate by the Committee, determined on the date such Stock Payment is made or on any date thereafter.

 

8.5 Deferred Stock. Any Eligible
Individual selected by the Committee may be granted an award of Deferred Stock in the manner determined from time to time by the
Committee. The number of shares of Deferred Stock shall be determined by the Committee and may be linked to the Performance Criteria
or other specific performance criteria determined to be appropriate by the Committee, in each case on a specified date or dates
or over any period or periods determined by the Committee. Stock underlying a Deferred Stock award will not be issued until the
Deferred Stock award has vested, pursuant to a vesting schedule or performance criteria set by the Committee. Unless otherwise
provided by the Committee, a Participant awarded Deferred Stock shall have no rights as a Company stockholder with respect to such
Deferred Stock until such time as the Deferred Stock Award has vested and the Stock underlying the Deferred Stock Award has been
issued.

 

    	 

    	 

    

 

8.6 Restricted Stock Units. The
Committee is authorized to make Awards of Restricted Stock Units to any Eligible Individual selected by the Committee in such amounts
and subject to such terms and conditions as determined by the Committee. At the time of grant, the Committee shall specify the
date or dates on which the Restricted Stock Units shall become fully vested and nonforfeitable, and may specify such conditions
to vesting as it deems appropriate. At the time of grant, the Committee shall specify the maturity date applicable to each grant
of Restricted Stock Units which shall be no earlier than the vesting date or dates of the Award and may be determined at the election
of the grantee. On the maturity date, the Company shall, subject to Section 10.5(b), transfer to the Participant one unrestricted,
fully transferable share of Stock for each Restricted Stock Unit scheduled to be paid out on such date and not previously forfeited.

 

8.7 Term. Except as otherwise provided
herein, the term of any Award of Performance Shares, Performance Stock Units, Dividend Equivalents, Stock Payments, Deferred Stock
or Restricted Stock Units shall be set by the Committee in its discretion.

 

8.8 Exercise or Purchase Price.
The Committee may establish the exercise or purchase price, if any, of any Award of Performance Shares, Performance Stock Units,
Deferred Stock, Stock Payments or Restricted Stock Units; provided, however, that such price shall not be less than the
par value of a share of Stock on the date of grant, unless otherwise permitted by applicable state law.

 

8.9 Exercise upon Termination of Employment
or Service. An Award of Performance Shares, Performance Stock Units, Dividend Equivalents, Deferred Stock, Stock Payments and
Restricted Stock Units shall only be exercisable or payable while the Participant is an Employee, Consultant or Director, as applicable;
provided, however, that the Committee in its sole and absolute discretion may provide that an Award of Performance Shares,
Performance Stock Units, Dividend Equivalents, Stock Payments, Deferred Stock or Restricted Stock Units may be exercised or paid
subsequent to a termination of employment or service, as applicable, or following a Change in Control of the Company, or because
of the Participant’s retirement, death or disability, or otherwise; provided, however, that any such provision with
respect to Performance Shares or Performance Stock Units shall be subject to the requirements of Section 162(m) of the Code
that apply to Qualified Performance-Based Compensation.

 

8.10 Form of Payment. Payments with
respect to any Awards granted under this Article 8 shall be made in cash, in Stock or a combination of both, as determined by the
Committee.

 

8.11 Award Agreement. All Awards
under this Article 8 shall be subject to such additional terms and conditions as determined by the Committee and shall be evidenced
by an Award Agreement.

 

ARTICLE 9. 

 

PERFORMANCE-BASED AWARDS 

 

9.1 Purpose. The purpose of this
Article 9 is to provide the Committee the ability to qualify Awards other than Options and SARs and that are granted pursuant to
Articles 6 and 8 as Qualified Performance-Based Compensation. If the Committee, in its discretion, decides to grant a Performance-Based
Award to a Covered Employee, the provisions of this Article 9 shall control over any contrary provision contained in Articles 6
or 8; provided, however, that the Committee may in its discretion grant Awards to Covered Employees that are based on Performance
Criteria or Performance Goals but that do not satisfy the requirements of this Article 9.

 

9.2 Applicability. This Article
9 shall apply only to those Covered Employees selected by the Committee to receive Performance-Based Awards. The designation of
a Covered Employee as a Participant for a Performance Period shall not in any manner entitle the Participant to receive an Award
for the period. Moreover, designation of a Covered Employee as a Participant for a particular Performance Period shall not require
designation of such Covered Employee as a Participant in any subsequent Performance Period and designation of one Covered Employee
as a Participant shall not require designation of any other Covered Employees as a Participant in such period or in any other period.

 

    	 

    	 

    

 

9.3 Procedures with Respect to Performance-Based
Awards. To the extent necessary to comply with the Qualified Performance-Based Compensation requirements of Section 162(m)(4)(C)
of the Code, with respect to any Award granted under Articles 6 or 8 which may be granted to one or more Covered Employees, no
later than ninety (90) days following the commencement of any fiscal year in question or any other designated fiscal period
or period of service (or such other time as may be required or permitted by Section 162(m) of the Code), the Committee shall,
in writing, (a) designate one or more Covered Employees, (b) select the Performance Criteria applicable to the Performance
Period, (c) establish the Performance Goals, and amounts of such Awards, as applicable, which may be earned for such Performance
Period, and (d) specify the relationship between Performance Criteria and the Performance Goals and the amounts of such Awards,
as applicable, to be earned by each Covered Employee for such Performance Period. Following the completion of each Performance
Period, the Committee shall certify in writing whether the applicable Performance Goals have been achieved for such Performance
Period. In determining the amount earned by a Covered Employee, the Committee shall have the right to reduce or eliminate (but
not to increase) the amount payable at a given level of performance to take into account additional factors that the Committee
may deem relevant to the assessment of individual or corporate performance for the Performance Period.

 

9.4 Payment of Performance-Based Awards.
Unless otherwise provided in the applicable Award Agreement, a Participant must be employed by the Company or a Subsidiary on the
day a Performance-Based Award for such Performance Period is paid to the Participant. Furthermore, a Participant shall be eligible
to receive payment pursuant to a Performance-Based Award for a Performance Period only if the Performance Goals for such period
are achieved. In determining the amount earned under a Performance-Based Award, the Committee may reduce or eliminate the amount
of the Performance-Based Award earned for the Performance Period, if in its sole and absolute discretion, such reduction or elimination
is appropriate.

 

9.5 Additional Limitations. Notwithstanding
any other provision of the Plan, any Award which is granted to a Covered Employee and is intended to constitute Qualified Performance-Based
Compensation shall be subject to any additional limitations set forth in Section 162(m) of the Code (including any amendment
to Section 162(m) of the Code) or any regulations or rulings issued thereunder that are requirements for qualification as
qualified performance-based compensation as described in Section 162(m)(4)(C) of the Code, and the Plan shall be deemed amended
to the extent necessary to conform to such requirements.

 

ARTICLE 10. 

 

PROVISIONS APPLICABLE TO AWARDS 

 

10.1 Stand-Alone and Tandem Awards.
Awards granted pursuant to the Plan may, in the discretion of the Committee, be granted either alone, in addition to, or in tandem
with, any other Award granted pursuant to the Plan. Awards granted in addition to or in tandem with other Awards may be granted
either at the same time as or at a different time from the grant of such other Awards.

 

10.2 Award Agreement. Awards under
the Plan shall be evidenced by Award Agreements that set forth the terms, conditions and limitations for each Award which may include
the term of an Award, the provisions applicable in the event the Participant’s employment or service terminates, and the
Company’s authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind an Award.

 

    	 

    	 

    

 

10.3 Limits on Transfer. No right
or interest of a Participant in any Award may be pledged, encumbered, or hypothecated to or in favor of any party other than the
Company or a Subsidiary, or shall be subject to any lien, obligation, or liability of such Participant to any other party other
than the Company or a Subsidiary. Except as otherwise provided by the Committee, no Award shall be assigned, transferred, or otherwise
disposed of by a Participant other than by will or the laws of descent and distribution or pursuant to beneficiary designation
procedures approved from time to time by the Committee (or the Board in the case of Awards granted to Independent Directors). The
Committee by express provision in the Award or an amendment thereto may permit an Award (other than an Incentive Stock Option)
to be transferred to, exercised by and paid to certain persons or entities related to the Participant, including but not limited
to members of the Participant’s family, charitable institutions, or trusts or other entities whose beneficiaries or beneficial
owners are members of the Participant’s family and/or charitable institutions, or to such other persons or entities as may
be expressly approved by the Committee, pursuant to such conditions and procedures as the Committee may establish. Any permitted
transfer shall be subject to the condition that the Committee receive evidence satisfactory to it that the transfer is being made
for estate and/or tax planning purposes (or to a “blind trust” in connection with the Participant’s termination
of employment or service with the Company or a Subsidiary to assume a position with a governmental, charitable, educational or
similar non-profit institution) and on a basis consistent with the Company’s lawful issue of securities.

 

10.4 Beneficiaries. Notwithstanding
Section 10.3, a Participant may, in the manner determined by the Committee, designate a beneficiary to exercise the rights
of the Participant and to receive any distribution with respect to any Award upon the Participant’s death. A beneficiary,
legal guardian, legal representative, or other person claiming any rights pursuant to the Plan is subject to all terms and conditions
of the Plan and any Award Agreement applicable to the Participant, except to the extent the Plan and Award Agreement otherwise
provide, and to any additional restrictions deemed necessary or appropriate by the Committee. If the Participant is married and
resides in a community property state, a designation of a person other than the Participant’s spouse as his or her beneficiary
with respect to more than 50% of the Participant’s interest in the Award shall not be effective without the prior written
consent of the Participant’s spouse. If no beneficiary has been designated or survives the Participant, payment shall be
made to the person entitled thereto pursuant to the Participant’s will or the laws of descent and distribution. Subject to
the foregoing, a beneficiary designation may be changed or revoked by a Participant at any time provided the change or revocation
is filed with the Committee.

 

10.5 Stock Certificates; Book Entry
Procedures.

 

(a) Notwithstanding anything herein to
the contrary, the Company shall not be required to issue or deliver any certificates evidencing shares of Stock pursuant to the
exercise of any Award, unless and until the Board has determined, with advice of counsel, that the issuance and delivery of such
certificates is in compliance with all applicable laws, regulations of governmental authorities and, if applicable, the requirements
of any exchange on which the shares of Stock are listed or traded. All Stock certificates delivered pursuant to the Plan are subject
to any stop-transfer orders and other restrictions as the Committee deems necessary or advisable to comply with federal, state,
or foreign jurisdiction, securities or other laws, rules and regulations and the rules of any national securities exchange or automated
quotation system on which the Stock is listed, quoted, or traded. The Committee may place legends on any Stock certificate to reference
restrictions applicable to the Stock. In addition to the terms and conditions provided herein, the Board may require that a Participant
make such reasonable covenants, agreements, and representations as the Board, in its discretion, deems advisable in order to comply
with any such laws, regulations, or requirements. The Committee shall have the right to require any Participant to comply with
any timing or other restrictions with respect to the settlement or exercise of any Award, including a window-period limitation,
as may be imposed in the discretion of the Committee.

 

(b) Notwithstanding any other provision
of the Plan, unless otherwise determined by the Committee or required by any applicable law, rule or regulation, the Company may
determine whether to deliver to any Participant certificates evidencing shares of Stock issued in connection with any Award or
instead whether such shares of Stock shall be recorded in the books of the Company (or, as applicable, its transfer agent or stock
plan administrator).

 

    	 

    	 

    

 

10.6 Paperless Administration. In
the event that the Company establishes, for itself or using the services of a third party, an automated system for the documentation,
granting or exercise of Awards, such as a system using an internet website or interactive voice response, then the paperless documentation,
granting or exercise of Awards by a Participant may be permitted through the use of such an automated system.

 

ARTICLE 11. 

 

CHANGES IN CAPITAL STRUCTURE 

 

11.1 Adjustments.

 

(a) In the event of any stock dividend,
stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends)
of Company assets to stockholders, or any other change affecting the shares of Stock or the share price of the Stock other than
an Equity Restructuring, the Committee shall make such equitable adjustments, if any, as the Committee in its discretion may deem
appropriate to reflect such change with respect to (a) the aggregate number and kind of shares that may be issued under the
Plan (including, but not limited to, adjustments of the limitations in Sections 3.1 and 3.3); (b) the terms and conditions
of any outstanding Awards (including, without limitation, any applicable performance targets or criteria with respect thereto);
and (c) the grant or exercise price per share for any outstanding Awards under the Plan. Any adjustment affecting an Award
intended as Qualified Performance-Based Compensation shall be made consistent with the requirements of Section 162(m) of the
Code.

 

(b) In the event of any transaction or
event described in Section 11.1 or any unusual or nonrecurring transactions or events affecting the Company, any affiliate
of the Company, or the financial statements of the Company or any affiliate, or of changes in applicable laws, regulations or accounting
principles, the Committee, in its sole and absolute discretion, and on such terms and conditions as it deems appropriate, either
by the terms of the Award or by action taken prior to the occurrence of such transaction or event and either automatically or upon
the Participant’s request, is hereby authorized to take any one or more of the following actions whenever the Committee determines
that such action is appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan or with respect to any Award under the Plan, to facilitate such transactions or events or to give
effect to such changes in laws, regulations or principles:

 

(i) To provide for either (A) termination
of any such Award in exchange for an amount of cash, if any, equal to the amount that would have been attained upon the exercise
of such Award or realization of the Participant’s rights (and, for the avoidance of doubt, if as of the date of the occurrence
of the transaction or event described in this Section 11.1 the Committee 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 Committee
in its sole discretion;

 

(ii) To provide that such Award be assumed
by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by similar options, rights
or awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments
as to the number and kind of shares and prices;

 

(iii) To make adjustments in the number
and type of shares of Common Stock (or other securities or property) subject to outstanding Awards, and in the number and kind
of outstanding Restricted Stock or Deferred Stock and/or in the terms and conditions of (including the grant or exercise price),
and the criteria included in, outstanding options, rights and awards and options, rights and awards which may be granted in the
future;

 

    	 

    	 

    

 

(iv) To provide that such Award shall
be exercisable or payable or fully vested with respect to all shares covered thereby, notwithstanding anything to the contrary
in the Plan or the applicable Award Agreement; and

 

(v) To provide that the Award cannot vest,
be exercised or become payable after such event.

 

(c) In connection with the occurrence of
any Equity Restructuring, and notwithstanding anything to the contrary in Sections 11.1(a) and 11.1(b):

 

(i) The number and type of securities
subject to each outstanding Award and the exercise price or grant price thereof, if applicable, will be equitably adjusted. The
adjustments provided under this Section 11.1(c)(i) shall be nondiscretionary and shall be final and binding on the affected
Participant and the Company.

 

(ii) The Committee shall make such equitable
adjustments, if any, as the Committee in its discretion may deem appropriate to reflect such Equity Restructuring with respect
to the aggregate number and kind of shares that may be issued under the Plan (including, but not limited to, adjustments of the
limitations in Sections 3.1 and 3.3).

 

11.2 Acceleration Upon a Change in Control.
Notwithstanding Section 11.1, and except as may otherwise be provided in any applicable Award Agreement or other written agreement
entered into between the Company and a Participant, if a Change in Control occurs and a Participant’s Awards are not converted,
assumed, or replaced by a successor entity, then immediately prior to the Change in Control such Awards shall become fully exercisable
and all forfeiture restrictions on such Awards shall lapse. Upon, or in anticipation of, a Change in Control, the Committee may
cause any and all Awards outstanding hereunder to terminate at a specific time in the future, including but not limited to the
date of such Change in Control, and shall give each Participant the right to exercise such Awards during a period of time as the
Committee, in its sole and absolute discretion, shall determine. In the event that the terms of any agreement between the Company
or any Company subsidiary or affiliate and a Participant contains provisions that conflict with and are more restrictive than the
provisions of this Section 11.2, this Section 11.2 shall prevail and control and the more restrictive terms of such agreement
(and only such terms) shall be of no force or effect.

 

11.3 No Other Rights. Except as
expressly provided in the Plan, no Participant shall have any rights by reason of any subdivision or consolidation of shares of
stock of any class, the payment of any dividend, any increase or decrease in the number of shares of stock of any class or any
dissolution, liquidation, merger, or consolidation of the Company or any other corporation. Except as expressly provided in the
Plan or pursuant to action of the Committee under the Plan, no issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to,
the number of shares of Stock subject to an Award or the grant or exercise price of any Award.

 

11.4 Restrictions on Exercise. In
the event of any pending stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution
(other than normal cash dividends) of Company assets to stockholders, or any other change affecting the shares of Stock or the
share price of the Stock including any Equity Restructuring, for reasons of administrative convenience, the Company in its sole
discretion may refuse to permit the exercise of any Award during a period of 30 days prior to the consummation of any such transaction.

 

    	 

    	 

    

 

ARTICLE 12. 

 

ADMINISTRATION 

 

12.1 Committee. Unless and until
the Board delegates administration of the Plan to a Committee as set forth below, the Plan shall be administered by the full Board,
and for such purposes the term “Committee” as used in this Plan shall be deemed to refer to the Board. The Board, at
its discretion or as otherwise necessary to comply with the requirements of Section 162(m) of the Code, Rule 16b-3 promulgated
under the Exchange Act or to the extent required by any other applicable rule or regulation, may delegate administration of the
Plan to a Committee consisting of two or more members of the Board. Unless otherwise determined by the Board, the Committee shall
consist solely of two or more members of the Board each of whom is an “outside director,” within the meaning of Section 162(m)
of the Code, a Non-Employee Director and an “independent director” under the rules and regulations of the NASDAQ Global
Market (or other principal securities market on which shares of Stock are traded); provided that any action taken by the Committee
shall be valid and effective, whether or not members of the Committee at the time of such action are later determined not to have
satisfied the requirements for membership set forth in this Section 12.1 or otherwise provided in any charter of the Committee.
Notwithstanding the foregoing: (a) the full Board, acting by a majority of its members in office, shall conduct the general
administration of the Plan with respect to all Awards granted to Independent Directors and for purposes of such Awards the term
“Committee” as used in this Plan shall be deemed to refer to the Board and (b) the Committee may delegate its
authority hereunder to the extent permitted by Section 12.5. In its sole discretion, the Board may at any time and from time
to time exercise any and all rights and duties of the Committee under the Plan except with respect to matters which under Rule
16b-3 under the Exchange Act or Section 162(m) of the Code, or any regulations or rules issued thereunder, are required to
be determined in the sole discretion of the Committee. Except as may otherwise be provided in any charter of the Committee, appointment
of Committee members shall be effective upon acceptance of appointment; Committee members may resign at any time by delivering
written notice to the Board; and vacancies in the Committee may only be filled by the Board.

 

12.2 Action by the Committee. Unless
otherwise established by the Board or in any charter of the Committee, a majority of the Committee shall constitute a quorum and
the acts of a majority of the members present at any meeting at which a quorum is present, and acts approved in writing by a majority
of the Committee in lieu of a meeting, shall be deemed the acts of the Committee. Each member of the Committee is entitled to,
in good faith, rely or act upon any report or other information furnished to that member by any officer or other employee of the
Company or any Subsidiary, the Company’s independent certified public accountants, or any executive compensation consultant
or other professional retained by the Company to assist in the administration of the Plan.

 

12.3 Authority of Committee. Subject
to any specific designation in the Plan, the Committee has the exclusive power, authority and discretion to:

 

(a) Designate Participants to receive
Awards;

 

(b) Determine the type or types of Awards
to be granted to each Participant;

 

(c) Determine the number of Awards to
be granted and the number of shares of Stock to which an Award will relate;

 

(d) Determine the terms and conditions
of any Award granted pursuant to the Plan, including, but not limited to, the exercise price, grant price, or purchase price, any
reload provision, any restrictions or limitations on the Award, any schedule for lapse of forfeiture restrictions or restrictions
on the exercisability of an Award, and accelerations or waivers thereof, any provisions related to non-competition and recapture
of gain on an Award, based in each case on such considerations as the Committee in its sole discretion determines; provided,
however, that the Committee shall not have the authority to accelerate the vesting or waive the forfeiture of any Performance-Based
Awards;

 

    	 

    	 

    

 

(e) Determine whether, to what extent,
and pursuant to what circumstances an Award may be settled in, or the exercise price of an Award may be paid in, cash, Stock, other
Awards, or other property, or an Award may be canceled, forfeited, or surrendered;

 

(f) Prescribe the form of each Award Agreement,
which need not be identical for each Participant;

 

(g) Decide all other matters that must
be determined in connection with an Award;

 

(h) Establish, adopt, or revise any rules
and regulations as it may deem necessary or advisable to administer the Plan;

 

(i) Interpret the terms of, and any matter
arising pursuant to, the Plan or any Award Agreement; and

 

(j) Make all other decisions and determinations
that may be required pursuant to the Plan or as the Committee deems necessary or advisable to administer the Plan.

 

12.4 Decisions Binding. The Committee’s
interpretation of the Plan, any Awards granted pursuant to the Plan, any Award Agreement and all decisions and determinations by
the Committee with respect to the Plan are final, binding, and conclusive on all parties.

 

12.5 Delegation of Authority. To
the extent permitted by applicable law, the Board may from time to time delegate to a committee of one or more members of the Board
or one or more officers of the Company the authority to grant or amend Awards to Participants other than (a) Employees who
are subject to Section 16 of the Exchange Act, (b) Covered Employees, or (c) officers of the Company (or Directors)
to whom authority to grant or amend Awards has been delegated hereunder. Any delegation hereunder shall be subject to the restrictions
and limits that the Board specifies at the time of such delegation, and the Board may at any time rescind the authority so delegated
or appoint a new delegatee. At all times, the delegatee appointed under this Section 12.5 shall serve in such capacity at
the pleasure of the Board.

 

ARTICLE 13. 

 

EFFECTIVE AND EXPIRATION DATE 

 

13.1 Effective Date. The Plan is
effective as of the date the Plan is approved by the Board (the “Effective Date”), subject to the approval by
the Company’s stockholders within twelve (12) months following the Effective Date. The Plan will be deemed to be approved
by the stockholders if it is approved either:

 

(a) By a majority of the votes cast at
a duly held stockholders meeting at which a quorum representing a majority of outstanding voting stock is, either in person or
by proxy, present and voting on the plan; or

 

(b) By a method and in a degree that would
be treated as adequate under Delaware law in the case of an action requiring stockholder approval.

 

13.2 Expiration Date. The Plan will
expire on, and no Award may be granted pursuant to the Plan after, the tenth anniversary of the Effective Date, except that no
Incentive Stock Options may be granted under the Plan after the earlier of the tenth anniversary of (a) the date the Plan
is approved by the Board or (b) the Effective Date. Any Awards that are outstanding on the tenth anniversary of the Effective
Date shall remain in force according to the terms of the Plan and the applicable Award Agreement.

 

    	 

    	 

    

 

ARTICLE 14. 

 

AMENDMENT, MODIFICATION, AND TERMINATION

 

14.1 Amendment,
Modification, and Termination. Subject to Section 15.14, with the approval of the Board, at any time and from time to
time, the Committee may terminate, amend or modify the Plan; provided, however, that (a) to the extent necessary and
desirable to comply with any applicable law, regulation, or stock exchange rule, the Company shall obtain stockholder approval
of any Plan amendment in such a manner and to such a degree as required, and (b) stockholder approval shall be required for
any amendment to the Plan that increases the number of shares available under the Plan (other than any adjustment as provided by
Article 11). Notwithstanding any provision in this Plan to the contrary, absent approval of the stockholders of the Company, 
no Option may be amended to reduce the per share exercise price of the shares subject to such Option
below the per share exercise price as of the date the Option is granted and, except as permitted by Article 11, no Option may be
granted in exchange for, or in connection with, the cancellation or surrender of an Option having a higher per share exercise price.
Subject to Article 11, the Board shall not, without the approval of the stockholders of the Company, authorize the amendment of
any outstanding Award to reduce its price per share. Furthermore, subject to Article 11, no Award shall be canceled and replaced
with the grant of an Award having a lesser price per share without the further approval of stockholders of the Company. Subject
to Article 11, the Board shall have the authority, without the approval of the stockholders of the Company, to amend any outstanding
award to increase the price per share or to cancel and replace an Award with the grant of an Award having a price per share that
is greater than or equal to the price per share of the original Award. 

 

14.2 Awards Previously Granted.
Except with respect to amendments made pursuant to Section 15.14, no termination, amendment, or modification of the Plan shall
adversely affect in any material way any Award previously granted pursuant to the Plan without the prior written consent of the
Participant.

 

ARTICLE 15. 

 

GENERAL PROVISIONS 

 

15.1 No Rights to Awards. No Eligible
Individual or other person shall have any claim to be granted any Award pursuant to the Plan, and neither the Company nor the Committee
is obligated to treat Eligible Individuals, Participants or any other persons uniformly.

 

15.2 No Stockholders Rights. Except
as otherwise provided herein, a Participant shall have none of the rights of a stockholder with respect to shares of Stock covered
by any Award until the Participant becomes the record owner of such shares of Stock.

 

15.3 Withholding. The Company or
any Subsidiary shall have the authority and the right to deduct or withhold, or require a Participant to remit to the Company,
an amount sufficient to satisfy federal, state, local and foreign taxes (including the Participant’s employment tax obligations)
required by law to be withheld with respect to any taxable event concerning a Participant arising as a result of this Plan. The
Committee may in its discretion and in satisfaction of the foregoing requirement allow a Participant to elect to have the Company
withhold shares of Stock otherwise issuable under an Award (or allow the return of shares of Stock) having a Fair Market Value
equal to the sums required to be withheld. Notwithstanding any other provision of the Plan, the number of shares of Stock which
may be withheld with respect to the issuance, vesting, exercise or payment of any Award (or which may be repurchased from the Participant
of such Award within six months (or such other period as may be determined by the Committee) after such shares of Stock were acquired
by the Participant from the Company) in order to satisfy the Participant’s federal, state, local and foreign income and payroll
tax liabilities with respect to the issuance, vesting, exercise or payment of the Award shall be limited to the number of shares
which have a Fair Market Value on the date of withholding or repurchase equal to the aggregate amount of such liabilities based
on the minimum statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes that are applicable
to such supplemental taxable income.

 

    	 

    	 

    

 

15.4 No Right to Employment or Services.
Nothing in the Plan or any Award Agreement shall interfere with or limit in any way the right of the Company or any Subsidiary
to terminate any Participant’s employment or services at any time, nor confer upon any Participant any right to continue
in the employ or service of the Company or any Subsidiary.

 

15.5 Unfunded Status of Awards.
The Plan is intended to be an “unfunded” plan for incentive compensation. With respect to any payments not yet made
to a Participant pursuant to an Award, nothing contained in the Plan or any Award Agreement shall give the Participant any rights
that are greater than those of a general creditor of the Company or any Subsidiary.

 

15.6 Indemnification. To the extent
allowable pursuant to applicable law, each member of the Committee or of the Board shall be indemnified and held harmless by the
Company from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such member in connection
with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved
by reason of any action or failure to act pursuant to the Plan and against and from any and all amounts paid by him or her in satisfaction
of judgment in such action, suit, or proceeding against him or her; provided he or she gives the Company an opportunity,
at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf.
The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may
be entitled pursuant to the Company’s Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any power
that the Company may have to indemnify them or hold them harmless.

 

15.7 Relationship to other Benefits.
No payment pursuant to the Plan shall be taken into account in determining any benefits pursuant to any pension, retirement, savings,
profit sharing, group insurance, welfare or other benefit plan of the Company or any Subsidiary except to the extent otherwise
expressly provided in writing in such other plan or an agreement thereunder.

 

15.8 Expenses. The expenses of administering
the Plan shall be borne by the Company and its Subsidiaries.

 

15.9 Titles and Headings. The titles
and headings of the Sections in the Plan are for convenience of reference only and, in the event of any conflict, the text of the
Plan, rather than such titles or headings, shall control.

 

15.10 Fractional Shares. No fractional
shares of Stock shall be issued and the Committee shall determine, in its discretion, whether cash shall be given in lieu of fractional
shares or whether such fractional shares shall be eliminated by rounding up or down as appropriate.

 

15.11 Limitations Applicable to Section 16
Persons. Notwithstanding any other provision of the Plan, the Plan, and any Award granted or awarded to any Participant who
is then subject to Section 16 of the Exchange Act, shall be subject to any additional limitations set forth in any applicable
exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 under the Exchange Act) that are
requirements for the application of such exemptive rule. To the extent permitted by applicable law, the Plan and Awards granted
or awarded hereunder shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

 

15.12 Government and Other Regulations.
The obligation of the Company to make payment of awards in Stock or otherwise shall be subject to all applicable laws, rules, and
regulations, and to such approvals by government agencies as may be required. The Company shall be under no obligation to register
pursuant to the Securities Act, as amended, any of the shares of Stock paid pursuant to the Plan. If the shares paid pursuant to
the Plan may in certain circumstances be exempt from registration pursuant to the Securities Act, as amended, the Company may restrict
the transfer of such shares in such manner as it deems advisable to ensure the availability of any such exemption.

 

    	 

    	 

    

 

15.13 Governing Law. The Plan and
all Award Agreements shall be construed in accordance with and governed by the laws of the State of Delaware.

 

15.14 Section 409A. To the
extent that the Committee determines that any Award granted under the Plan is subject to Section 409A of the Code, the Award
Agreement evidencing such Award shall incorporate the terms and conditions required by Section 409A of the Code. To the extent
applicable, the Plan and Award Agreements shall be interpreted in accordance with Section 409A of the Code and Department
of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or
other guidance that may be issued after the Effective Date. Notwithstanding any provision of the Plan to the contrary, in the event
that following the Effective Date the Committee determines that any Award may be subject to Section 409A of the Code and related
Department of Treasury guidance (including such Department of Treasury guidance as may be issued after the Effective Date), the
Committee may adopt such amendments to the Plan and the applicable Award Agreement or adopt other policies and procedures (including
amendments, policies and procedures with retroactive effect), or take any other actions, that the Committee determines are necessary
or appropriate to (a) exempt the Award from Section 409A of the Code and/or preserve the intended tax treatment of the
benefits provided with respect to the Award, or (b) comply with the requirements of Section 409A of the Code and related
Department of Treasury guidance and thereby avoid the application of any penalty taxes under such Section.

 

* * * * *

 

I hereby certify that the foregoing Plan
was duly adopted by the Board of Directors of Star Scientific, Inc. on December 14, 2012.

 

* * * * *

 

I hereby certify that the foregoing Plan
was approved by the stockholders of Star Scientific, Inc. on  December 14, 2012.

 

Executed on this 2nd day of
January, 2013.

 

______________________________

 

                Corporate SecretaryAutoChina
International Limited

 

Executive
Employment Agreement

 

This EXECUTIVE EMPLOYMENT AGREEMENT (the
"Agreement"), entered into as of April 9, 2012, by and between AutoChina International Limited, a company organized
under the laws of the Cayman Islands (the "Company") and Yong Hui Li (the "Executive") (collectively,
the "Parties").

 

RECITALS

 

A.          The Company desires to employ the
Executive as its Chief Executive Officer and to assure itself of the services of the Executive for the Period of Employment (as
defined below).

 

B.          The Executive desires to be employed
by the Company as its Chief Executive Officer for the Period of Employment and upon the terms and conditions of this Agreement.

 

AGREEMENT

 

ACCORDINGLY, the Parties agree as follows:

 

1.            Term
of Employment. The Company shall employ the Executive to render services to the Company in the position and with the duties
and responsibilities described in Section 2 for a period of three (3) years starting from the date of this Agreement (the
"Period of Employment"), unless the Period of Employment is terminated sooner in accordance with Sections 4
or 5 below or extended upon mutual agreement of the Parties.

 

2.            Position, Duties, Responsibilities.

 

2.1          Position.
The Executive shall render services to the Company in the position of Chief Executive Officer and shall perform all services appropriate
to that position as well as such other services as may reasonably be assigned by the Company, including serving as the Chief Executive
Officer of Hebei Chuanglian Trade Co., Ltd. (河北创联贸易有限公司),
an indirectly wholly-owned subsidiary of the Company established in the People's Republic of China (the "PRC")
("Chuanglian") and any other direct or indirect subsidiary of the Company. The Executive's principal place of
employment shall be at any location decided by the board of directors of the Company. The Executive shall devote his best efforts
and full-time attention to the performance of his duties. The Executive shall report to the board of directors of the Company.

 

2.2          Other Activities. Except upon
the prior written consent of the board of directors of the Company, the Executive shall not (i) accept any other employment
(except for academic employment, position in industrial or professional associations, non-executive director of other companies
which do not compete with the Company's business provided that such other companies purchase director liability insurance), (ii) engage,
invest or assist, directly or indirectly, in any other business activity (whether or not pursued for pecuniary advantage)
that is or may be in conflict with, or that might place the Executive in a conflicting position to that of the Company or (iii)
act as the legal representative or an executive officer of another company (excluding any affiliates of the Company) within or
outside the PRC.

 

    	1

    	 

    

 

 

2.3          Execution of Chuanglian Employment
Agreement. The Executive shall upon request of the Company execute an employment agreement with Chuanglian or any other direct
or indirect subsidiary of the Company (in each case, a "Subsidiary Employment Agreement") in accordance with PRC
laws and regulations, in the form substantially identical to this Agreement except for adjustments or alterations required to comply
with the relevant laws and regulations of the PRC.

 

3.            Compensation and Holiday. In
consideration of the services to be rendered under this Agreement, the Executive shall be entitled to the following:

 

3.1          Base Salary. The Company and
the Executive shall agree to a "Base Salary," subject to adjustment in accordance with Section 3.2 below. The
Base Salary shall be paid in accordance with the Company's regularly established payroll practices.

 

3.2          Salary Adjustment. The Executive's
Base Salary will be reviewed from time to time in accordance with the established procedures of the Company for adjusting salaries
for similarly situated employees and may be adjusted in the sole discretion of the Company.

 

3.3          Benefits. The Executive shall
be eligible to participate in the benefits made generally available by the Company to similarly-situated executives, in accordance
with the benefit plans established by the Company (including the Company’s Equity Incentive Plan), and as may be amended
from time to time in the Company's sole discretion.

 

3.4          Bonus. The Executive shall
not be entitled to any bonus unless otherwise approved by the board of directors of the Company in its sole discretion.

 

3.5          Holidays. The Executive shall
be entitled, in addition to applicable statutory public holidays, to take (14) working days as paid holiday in each full calendar
year. If the Executive's employment commences or terminates part way through a calendar year, his entitlement to holidays will
be assessed on a pro-rata basis in accordance with the Company's holiday policy, as it may change from time to time.

 

3.6          Insurance. The Company shall
purchase life insurance and medical insurance for the Executive pursuant to applicable standards.

 

3.7          Others. The salary and welfare
provided respectively in the Subsidiary Employment Agreements and this Agreement shall not be cumulative. If there is any discrepancy
between the above provisions in Article 3 herein and the salary and other welfare provided in the Subsidiary Employment Agreements,
the Executive shall, in addition to the salary and welfare provided in the Subsidiary Employment Agreements, be entitled to the
additional amount of the salary and welfare (if any) provided in this Agreement only to the extent it exceeds those provided in
the Subsidiary Employment Agreements.

 

    	2

    	 

    

 

4.            Termination By Company. 

 

4.1          Termination for Cause.
For purposes of this Agreement, "For Cause" shall mean the occurrence of any of the following, subject only to
any statutory requirement of any applicable law: (i) the failure of the Executive to properly carry out his duties after notice
by the Company of the failure to do so and a reasonable opportunity for the Executive to correct the same within a reasonable period
specified by the Company; (ii) any breach by the Executive of one or more provisions of any written agreement with, or written
policies of, the Company or his fiduciary duties to the Company likely to cause material harm to the Company and its affiliates,
at the Company's reasonable discretion, or (iii) any theft, fraud, dishonesty or serious misconduct by the Executive involving
his duties or the property, business, reputation or affairs of the Company and its affiliates. The Company may terminate the Executive's
employment For Cause at any time, without any advance notice or payment in lieu of notice. The Company shall pay to the Executive
all compensation prescribed under Section 3 hereof to which the Executive is entitled up through the date of termination, subject
to any other rights or remedies of the Company under law, and thereafter all obligations of the Company under this Agreement shall
cease.

 

4.2          By Death. The Executive's
employment shall terminate automatically upon the Executive's death. The Company shall pay to the Executive's beneficiaries or
estate, as appropriate, any compensation then due and owing under Section 3 hereof to which the Executive is entitled up through
the date of termination, subject to any other rights or remedies of the Company under law, and thereafter all obligations of the
Company under this Agreement shall cease. Nothing in this section shall affect any entitlement of the Executive's heirs or devisees
to the benefits of any life insurance plan or other applicable benefits, if any. If the Executive dies during the course of or
in connection with the performance of his duty, subject to applicable laws, the Company shall pay to the Executive's beneficiaries
or estate, as appropriate, a special compensation not exceeding the annual Base Salary as provided in Article 3.1 above, as decided
by the board of directors of the Company.

 

4.3          By Disability. If the
Executive becomes eligible for the Company's long-term disability benefits or if, in the sole opinion of the Company, the Executive
is unable to carry out the responsibilities and functions of the position held by the Executive by reason of any physical or mental
impairment for more than ninety (90) consecutive days or more than one hundred twenty (120) days in any twelve-month period, then,
to the extent permitted by law, the Company may terminate the Executive's employment. The Company shall pay to the Executive all
compensation prescribed under Section 3 hereof to which the Executive is entitled up through the date of termination, and thereafter
all obligations of the Company under this Agreement shall cease. Nothing in this section shall affect the Executive's rights under
any disability plan in which the Executive is a participant, if any.

 

4.4          Other Termination by Company.
In addition to Sections 4.1 through 4.3, the Company may at any time terminate the employment of the Executive without cause by
giving one (1) month written notice to the Executive, in which case the Executive will be eligible to receive an amount equal to
three (3) months of the then-current Base Salary of the Executive payable in the form of salary continuation. Such severance shall
be reduced by any remuneration paid to the Executive because of the Executive's employment or self-employment during the severance
period, and the Executive shall promptly report all such remuneration to the Company in writing. The Executive's eligibility for
severance is conditioned on the Executive having first signed a Termination Certificate in the form attached as Exhibit A.
The Executive shall not be entitled to any severance payments if the Executive's employment is terminated For Cause, by death or
by disability (as provided above) or if the Executive's employment is terminated by the Executive for any reason other than Good
Reason, as defined below.

 

    	3

    	 

    

 

 

5.            Termination By Executive.

 

5.1          Termination by Executive other
than for Good Reason. The Executive may terminate employment with the Company at any time for any reason or no reason at all,
upon three (3) months' advance written notice. During such notice period the Executive shall continue to diligently perform all
of the Executive's duties hereunder. The Company shall have the option, in its sole discretion, to make the Executive's termination
effective at any time prior to the end of such notice period as long as the Company pays the Executive all compensation under Section
3 hereof to which the Executive is entitled up through the last day of the three (3) months' notice period. Thereafter all obligations
of the Company shall cease. Unless the Executive terminates his employment for Good Reason, as provided in Section 5.2, no severance
or other separation benefits shall be paid to the Executive.

 

5.2          Termination for Good
Reason After Change in Control. The Executive's termination shall be for Good Reason (as defined below) if the Executive
provides written notice to the Company of the Good Reason within three (3) months of the event constituting Good Reason and provides
the Company with a period of twenty (20) days to cure the Good Reason and the Company fails to cure the Good Reason within that
period. For purposes of this Agreement, "Good Reason" shall mean a material reduction in the Executive's Base
Salary, except for reductions that are comparable to reductions generally applicable to similarly situated executives of the Company
if (i) such reduction is effected by the Company without the consent of the Executive and (ii) such event occurs within
three (3) months after a Change in Control (as hereinafter defined). For purposes of this Agreement, a "Change in Control"
of the Company shall be deemed to have occurred when: (i) the shareholders of the Company approve a merger or consolidation of
the Company with any other corporation, other than a merger or consolidation which would result in the shareholders of the Company
immediately prior thereto holding fifty percent (50%) or more of the outstanding voting securities of the Company or the surviving
entity immediately after such merger or consolidation; or (ii) the shareholders of the Company approve
either a plan of liquidation or dissolution of the Company or an agreement for the sale, lease, exchange or other transfer or disposition
by the Company of fifty-percent (50%) or more of the Company's assets. If the Executive terminates his employment for Good
Reason, the Executive will be eligible to receive an amount equal to one (1) month of the Executive's then-current Base Salary
payable in the form of salary continuation. Thereafter all obligations of the Company or its successor under this Agreement shall
cease. Any severance shall be reduced by any remuneration paid to the Executive because of the Executive's employment or self-employment
during the severance period, and the Executive shall promptly report all such remuneration to the Company or its successor in writing.
The Executive's eligibility for severance is conditioned on the Executive having first signed a Termination Certificate in the
form attached as Exhibit A.

 

6.            Termination Obligations.

 

The Executive agrees that on or before termination
of employment, he will promptly return to the Company all documents and materials of any nature pertaining to his work with the
Company, including all originals and copies of all or any part of any Proprietary Information or Inventions (as defined below)
along with any and all equipment and other tangible and intangible property of the Company. The Executive
agrees not to retain any documents or materials or copies thereof containing any Proprietary Information or Inventions.

 

    	4

    	 

    

 

 

The Executive further agrees that: (i) all
representations, warranties, and obligations under Articles 6, 7, 8, 10, 11, 12, 14.1, 14.2 and 14.3 contained in this Agreement
shall survive the termination of the Period of Employment; (ii) the Executive's representations, warranties and obligations
under Articles 6, 7, 8, 10, 11, 12, 14.1, 14.2 and 14.3 shall also survive the expiration of this Agreement; and (iii) following
any termination of the Period of Employment, the Executive shall fully cooperate with the Company in all matters relating to his
continuing obligations under this Agreement, including but not limited to the winding up of pending work on behalf of the Company,
the orderly transfer of work to the other employees of the Company, and the defense of any action brought by any third party against
the Company that relates in any way to the Executive's acts or omissions while employed by the Company. The Executive also agrees
to sign and deliver the Termination Certificate attached hereto as Exhibit A prior to his termination of employment with
the Company.

 

7.            Post-Termination Activity. 

 

7.1          No Use of Proprietary Information.
The Executive acknowledges that the pursuit of the activities forbidden by this subsection would necessarily involve the use or
disclosure of Proprietary Information in breach of this Agreement, but that proof of such a breach would be extremely difficult.
To forestall such disclosure, use, and breach, and in consideration of the employment under this Agreement, the Executive also
agrees that while employed by the Company, and for a period of one (1) year after termination of the Executive's employment, the
Executive shall not, directly or indirectly:

 

           (i)          divert or attempt to divert from
the Company or any Affiliate ("Affiliate" shall mean any person or entity that directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common control with such entity). For the purposes of this
definition "control" means the possession, directly or indirectly, of the power to direct or cause the direction
of the management and policies of a person, whether through the ownership of voting securities, by contract or otherwise, and includes
(x) ownership directly or indirectly of 50% or more of the shares in issue or other equity interests of such person, (y) possession
directly or indirectly of 50% or more of the voting power of such person or (z) the power directly or indirectly to appoint a majority
of the members of the board of directors or similar governing body of such person, and the terms "controlling"
and "controlled" have meanings correlative to the foregoing) any business of any kind in which it is engaged,
including, without limitation, soliciting business from or performing services for, any persons, company or other entity which
at any time during the Executive's employment by the Company is a client, supplier, or customer of the Company or prospective client,
supplier, or customer of the Company if such business or services are of the same general character as those engaged in or performed
by the Company;

 

    	5

    	 

    

 

 

           (ii)          solicit or otherwise induce
any person to terminate his employment or consulting relationship with the Company or any Affiliate; and

 

           (iii)         engage,
invest or assist in any business activity that directly or indirectly competes with any business plan of the Company or any Affiliate.

 

In addition, because the Executive acknowledges
the difficulty of establishing when any intellectual property, invention, or proprietary information is first conceived or developed
by the Executive, or whether it results from access to Proprietary Information or the Company equipment, supplies, facilities,
or data, the Executive agrees that any intellectual property, invention, or proprietary information shall be reported to the Company
and, unless proven otherwise to the reasonable satisfaction of the Company, shall be presumed to be an Invention for the purpose
of this Agreement and shall be subject to all terms and conditions hereof, if reduced to practice by the Executive or with the
aid of the Executive within one (1) year after termination of the Period of Employment.

 

7.2          No Competition. Notwithstanding
Section 7.1 above, while employed by the Company and for a period equal to the greater of one (1) year after the termination of
the Executive's employment with the Company for any reason whatsoever, the Executive shall not, directly or indirectly, as an executive,
employer, employee, consultant, agent, principal, partner, manager, stockholder, officer, director, or in any other individual
or representative capacity, engage or participate in any business within the PRC and/or Hong Kong that is competitive with the
business of the Company or any Affiliate. Notwithstanding the foregoing, the Executive may own less than one percent (1%) of any
class of stock or security of any corporation listed on an internationally recognized securities exchange which competes with the
Company.

 

7.3          Enforceability. The covenants
of this Article 7 are several and separate, and the unenforceability of any specific covenant shall not affect the provisions of
any other covenant. If any provision of this Article 7 relating to the time period or geographic area of the restrictive covenants
shall be declared by a court of competent jurisdiction to exceed the maximum time period or geographic area, as applicable, that
such court deems reasonable and enforceable, then this Agreement shall automatically be considered to have been amended and revised
to reflect the maximum time period or geographic area that such court deems enforceable.

 

7.4          Independent Covenants. All
of the covenants in this Article 7 shall be construed as an agreement independent of any other provision in this Agreement,
and the existence of any claim or cause of action of the Executive against the Company or any of its Affiliates, whether predicated
on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of such covenants.

 

    	6

    	 

    

 

8.           Proprietary Information.

 

The Executive agrees during his employment
with the Company and within three (3) years thereafter, to hold in strictest confidence and trust, and not to use or disclose to
any person, firm or corporation any Proprietary Information without the prior written consent of the Company, except as necessary
in carrying out his duties as an employee of the Company for the benefit of the Company. "Proprietary Information"
means any information of a proprietary, confidential or secret nature that may be disclosed to the Executive that relates to the
business of the Company or of any parent, subsidiary, Affiliate, customer or supplier of the Company or any other party with whom
the Company agrees to hold information of such party in confidence ("Relevant Parties"). Such Proprietary Information
includes, but is not limited to, Inventions (as defined below), research, product plans, products, services, business strategies,
personnel information, customer lists, customers, markets, technical information, forecasts, marketing, finances or other business
information of the Company and its Affiliates. This information shall remain confidential whether it was disclosed to the Executive
either directly or indirectly in writing, orally or by drawings or observation. The Executive understands that Proprietary Information
does not include any of the foregoing items which has become publicly known and made generally available through no wrongful act
of the Executive or others who were under confidentiality obligations as to the items involved.

 

9.           Former Employer Information.

 

The Executive agrees that he will not, during
his employment with the Company, improperly use or disclose any proprietary information or trade secrets, or bring onto the premises
of the Company any unpublished document or proprietary information belonging to any former or concurrent employer or other person
or entity (excluding Chuanglian and any other direct or indirect subsidiary of the Company).

 

10.         Third Party Information.

 

The Executive recognizes that the Company
has received and in the future will receive confidential or proprietary information from third parties. The Executive agrees to
hold all such confidential or proprietary information in the strictest confidence and trust, and not to disclose it to any person,
firm or corporation or to use it except as necessary in carrying out his work for the Company consistent with the Company's agreement
with such third party.

 

11.         No Conflict.

 

The Executive represents and warrants that
the Executive's execution of this Agreement, his employment with the Company, and the performance of his proposed duties under
this Agreement shall not violate any obligations he may have to any former employer or other party, including any obligations with
respect to proprietary or confidential information or intellectual property rights of such party.

 

12.         Inventions. 

 

12.1        Inventions Retained and Licensed.
The Executive has attached, as Exhibit C, a list describing all inventions, original works of authorship, developments,
improvements, and trade secrets which were made by the Executive prior to the Executive's employment with the Company ("Prior
Inventions"), which belong to the Executive, and which relate to the Company's actual and/or proposed business, products
or research and development. If, in the course of his employment with the Company, the Executive incorporates into a Company product,
process or machine a Prior Invention owned by the Executive or in which the Executive has an interest, the Company is hereby granted
and shall have a non-exclusive, royalty-free, irrevocable, perpetual, worldwide license to make, have made, modify, use and sell
such Prior Invention as part of or in connection with such product, process or machine.

 

    	7

    	 

    

 

 

12.2        Assignment of Inventions.
The Executive agrees that he will promptly make full written disclosure to the Company, will hold in trust for the sole right and
benefit of the Company, and hereby irrevocably assign to the Company, or its designee, all the Executive's right, title, and interest
in and to any and all inventions, original works of authorship, developments, concepts, improvements, designs, drawings, discoveries,
ideas, formulas, processes, compositions of matter, software, databases, mask works, computer programs (including all source codes)
and related documentation, algorithms, engineering and reverse engineering, technology, hardware configuration information, logos,
trade names, trademarks, patents, patent applications, copyrights, trade secrets or know-how, which the Executive may solely or
jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice ("Inventions"),
while the Executive is employed by the Company. The Executive further acknowledges that all original works of authorship which
are made by the Executive (solely or jointly with others) within the scope of and during his employment with the Company and which
are protectible by copyright are "works made for hire," as that term is defined in the United States Copyright
Act and that the Company will be considered the author and owner of such works. The Executive understands and agrees that the decision
whether or not to commercialize or market any Invention developed by the Executive solely or jointly with others is within the
Company's sole discretion and for the Company's sole benefit and that no royalty will be due to the Executive as a result of the
Company's efforts to commercialize or market any such Invention.

 

12.3        Waiver of Moral Rights. To
the utmost extent legally permitted, the Executive also hereby forever waives and agrees never to assert any and all Moral Rights
(as defined below) he may have in or with respect to any Invention, even after termination of his work on behalf of the Company.
"Moral Rights" mean any rights to claim authorship of an
Invention to object to or prevent the modification of any Invention, or to withdraw from circulation or control the publication
or distribution of any Invention, and any similar right, existing under judicial or statutory law of any country in the world,
or under any treaty, regardless of whether or not such right is denominated or generally referred to as a "moral right."

 

12.4        Maintenance of Records. The
Executive agrees to keep and maintain adequate and current written records of all Inventions made by the Executive (solely or jointly
with others) during the Executive's employment with the Company. The records will be in the form of notes, sketches, drawings,
and any other format that may be specified by the Company. The records will be provided to, and remain the sole property of, the
Company at all times.

 

12.5        Patent and Copyright Registrations.
The Executive agrees to assist the Company, or its designee, at the Company's expense, in every proper way, to secure the Company's
rights in the Inventions and any copyrights, patents, mask work rights, trade secret rights or other intellectual property rights
relating thereto in any and all countries. The Executive will disclose to the Company all pertinent information and data which
the Company deems necessary for the execution of all applications, specifications, oaths, assignments and execute all instruments
necessary to apply for and obtain such rights and in order to assign and convey to the Company, its successors, assigns, and nominees,
the sole and exclusive right, title and interest in and to such Inventions, and any copyrights, patents, mask work rights, or other
intellectual property rights relating thereto. The Executive further agrees that the Executive's obligation to execute or cause
to be executed, when it is in the Executive power to do so, any such instrument or papers shall continue after the termination
of this Agreement. If the Company is unable, because of the Executive's mental or physical incapacity or for any other reason,
to secure his signature to apply for or to pursue any application for any patents or copyright registrations covering the Inventions
assigned to the Company as above, then the Executive hereby irrevocably designates and appoints the Company and its duly authorized
officers and agents as his agent and attorney in fact, to act for and in the Executive's behalf and stead to execute and file any
such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters, patent or copyright
registrations thereon with the same legal force and effect as if executed by the Executive.

 

    	8

    	 

    

 

 

13.            Alternative Dispute Resolution.

 

The Company and Executive mutually agree
that any controversy or claim arising out of or relating to this Agreement or the breach thereof, or any other dispute between
the parties, shall be submitted to mediation before a mutually agreeable mediator, which cost is to be borne equally by the parties
hereto. In the event the Parties fail to agree on a mediator, or mediation is unsuccessful in resolving the claim or controversy
within one (1) month after the commencement of mediation, such claim or controversy shall be resolved by arbitration in Hong Kong
under the auspices of the Hong Kong International Arbitration Centre.

 

14.           Miscellaneous.

 

14.1          Continuing Obligations. The
obligations in this Agreement will continue in the event that the Executive is hired, renders services to or for the benefit of
or is otherwise retained at any time by any present or future Affiliates of the Company. Any reference to the Company in this Agreement
will include such Affiliates. Upon the expiration or termination for any reason whatsoever of this Agreement, the Executive shall
forthwith resign from any employment of office with an Affiliate of the Company unless the board of directors of the Company requests
otherwise.

 

14.2          Notification. The Executive
hereby authorizes the Company to notify his actual or future employers of the terms of this Agreement and his responsibilities
hereunder.

 

14.3          Name and Likeness Rights.
The Executive hereby authorizes the Company to use, reuse, and to grant others the right to use and reuse, his name, photograph,
likeness (including caricature), voice, and biographical information, and any reproduction or simulation thereof, in any media
now known or hereafter developed (including but not limited to film, video and digital or other electronic media), both during
and after his employment, for whatever purposes the Company deems necessary.

 

14.4          Injunctive Relief. The
Executive understands that in the event of a breach or threatened breach of this Agreement by him, the Company may suffer irreparable
harm and will therefore be entitled to injunctive relief to enforce this Agreement.

 

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14.5          Legal Fees. In any dispute
arising under or in connection with this Agreement, the prevailing party shall be entitled to recover reasonable attorney's fees.

 

14.6          Entire Agreement. This Agreement,
including the exhibits attached hereto, is intended to be the final, complete, and exclusive statement regarding their subject
matter, except for other agreements specifically referenced herein. Unless otherwise specifically provided for herein, this Agreement
supersedes all other prior and contemporaneous agreements and statements pertaining to this subject matter, and may not be contradicted
by evidence of any prior or contemporaneous statements or agreements. To the extent that the practices, policies, or procedures
of the Company, now or in the future, apply to the Executive and are inconsistent with the terms of this Agreement, the provisions
of this Agreement shall control.

 

14.7          Amendments, Renewals and Waivers.
This Agreement may not be modified, amended, renewed or terminated except by an instrument in writing, signed by the Executive
and by a duly authorized representative of the Company other than the Executive. No failure to exercise and no delay in exercising
any right, remedy, or power under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, remedy, or power under this Agreement preclude any other or further exercise thereof, or the exercise of any other right,
remedy, or power provided herein or by law or in equity.

 

14.8          Assignment; Successors and Assigns.
The Executive agrees that he will not assign, sell, transfer, delegate or otherwise dispose of, whether voluntarily or involuntarily,
or by operation of law, any rights or obligations under this Agreement, nor shall the Executive's rights be subject to encumbrance
or the claims of creditors. Any purported assignment, transfer, or delegation shall be null and void. Nothing in this Agreement
shall prevent the consolidation of the Company with, or its merger into, any other corporation, or the sale by the Company of all
or substantially all of its properties or assets, or the assignment by the Company of this Agreement and the performance of its
obligations hereunder to any successor in interest. In the event of a change in ownership or control of the Company, the terms
of this Agreement will remain in effect and shall be binding upon any successor in interest. Notwithstanding and subject to the
foregoing, this Agreement shall be binding upon and shall inure to the benefit of the parties and their respective heirs, legal
representatives, successors, and permitted assigns, and shall not benefit any person or entity other than those enumerated above.

 

14.9          Notices.
All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been
duly given or made as of the date delivered or mailed if delivered personally or by nationally recognized courier or mailed by
registered mail (postage prepaid, return receipt requested) or by telecopy to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice, except that notices of changes of address shall be effective upon
receipt):

 

	To:	Company
	Contact Address:	AutoChina International Limited
	 	No. 322 Zhongshan East Road, Shijiazhuang City
	 	Hebei Province 050011, People’s Republic of China
	Attention:	Chief Executive Officer
	 	 
	To:	Executive
	Contact Address:	AutoChina International Limited
	 	No. 322 Zhongshan East Road, Shijiazhuang City
	 	Hebei Province 050011, People’s Republic of China
	Attention:	Yong Hui Li

 

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14.10          [Reserved.]

 

14.11          Waiver
of Immunity. To the extent that any Party (including its assignees of any such rights or obligations hereunder) may
be entitled, in any jurisdiction, to claim for itself (or himself or herself) or its revenues or assets or properties, immunity
from service of process, suit, the jurisdiction of any court, an interlocutory order or injunction or the enforcement of the same
against its property in such court, attachment prior to judgment, attachment in aid of execution of an arbitral award or judgment
(interlocutory or final) or any other legal process, and to the extent that, in any such jurisdiction there may be attributed such
immunity (whether claimed or not), such Party hereby irrevocably waive such immunity.

 

14.12          Severability; Enforcement.
If any provision of this Agreement, or its application to any person, place, or circumstance, is held by an arbitrator or a court
of competent jurisdiction to be invalid, unenforceable, or void, such provision shall be enforced (by blue-penciling or otherwise)
to the maximum extent permissible under applicable law, and the remainder of this Agreement and such provision as applied to other
persons, places, and circumstances shall remain in full force and effect.

 

14.13          Governing Law. This Agreement
shall in all respects be construed and enforced in accordance with and governed by the laws of Hong Kong.

 

14.14          Interpretation. This Agreement
shall be construed as a whole, according to its fair meaning, and not in favor of or against any party. Sections and section headings
contained in this Agreement are for reference purposes only, and shall not affect in any manner the meaning or interpretation of
this Agreement. Whenever the context requires, references to the singular shall include the plural and the plural the singular.
References to one gender include both genders.

 

14.15          Obligations Survive Termination
of Employment. The Executive agrees that any and all of the Executive's obligations under this Agreement capable of execution
after the termination of the Executive employment, including but not limited to those contained in exhibits attached hereto, shall
survive the termination of employment and the termination of this Agreement.

 

14.16          Counterparts. This Agreement
may be executed in any number of counterparts, each of which shall be deemed an original of this Agreement, but all of which together
shall constitute one and the same instrument.

 

    	11

    	 

    

 

EXECUTIVE ACKNOWLEDGEMENT. The Executive
acknowledges (i) that he has consulted with or has had the opportunity to consult with independent counsel of his own choice concerning
this Agreement and has been advised to do so by the Company, and (ii) that he has read and understands the Agreement, is fully
aware of its legal effect, and has entered into it freely based on his own judgment. The Executive hereby agrees that his obligations
set forth in Sections 7, 8, and 9 hereof and the definitions of Proprietary Information and Inventions contained therein shall
be equally applicable to Proprietary Information and Inventions relating to any work performed by the Executive for the Company
prior to the execution of this Agreement.

 

The parties have duly executed this Agreement
as of the date first written above.

 

	 	EXECUTIVE:
	 	 
	 	/s/ Yong Hui Li
	 	Name: Yong Hui Li
	 	 
	 	COMPANY:
	 	 
	 	AUTOCHINA INTERNATIONAL LIMITED
	 	 	 
	 	By:	/s/ James Sha
	 	Name:	James Sha
	 	Title:	Director

 

    	 

    	 

    

 

Exhibit
A

 

TERMINATION CERTIFICATE

 

This is to certify that I have returned
all personal property of AutoChina International Limited (the "Company") and the Relevant Parties, including,
without limitation, all books, manuals, records, models, drawings, reports, notes, contracts, lists, blueprints, and other documents
and materials, electronic data recorded or retrieved by any means, Proprietary Information, and equipment furnished to or prepared
by me in the course of or incident to my employment with the Company, and that I did not make or distribute any copies of the foregoing.

 

I further certify that I have reviewed the
Executive Employment Agreement (the "Agreement") signed by me and that I have complied with and will continue
to comply with all of its terms, including, without limitation, (i) the reporting of any Inventions or any improvement, rights,
or claims related to the foregoing, conceived or developed by me and covered by the Agreement; (ii) the preservation as confidential
of all Proprietary Information pertaining to the Company and the Relevant Parties; (iii) not participating in any business competitive
with the business of the Company; (iv) not acting as the legal representative or an executive officer of any other company within
and outside the People’s Republic of China, and (v) the reporting of any remuneration paid to me due to any employment or
self-employment during the severance period, if any. This certificate in no way limits my responsibilities or the Company's rights
under the Agreement.

 

On termination of my employment with the
Company, I will be employed by [name of new employer] in the [division name] division and I will be working in connection
with the following projects:

 

[generally describe
the projects]

 

	 
	 
	 
	 

 

	Date:	 	 	 
	 	 	Print Executive's Name
	 	 	 
	 	 	 
	 	 	Executive's Signature

 

    	 

    	 

    

 

Exhibit
C

 

LIST OF
PRIOR INVENTIONS

AND ORIGINAL WORKS OF AUTHORSHIP

 

	Title	 	Date	 	Identifying Number or Brief Description
	 	 	 	 	 
	 	 	 	 	 

 

	 	 	No inventions or improvements
	 	 	 
	 	 	Additional Sheets Attached

 

	Signature of Executive: 	 	 

 

	Printed Name of Executive: 	 	 

 

	Date:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00216-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00216-of-00352.parquet"}]]