Document:

Exhibit

EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”), dated as of January 7, 2019, is effective as of January 1, 2019 (“Effective Date”), by and between Capital Bancorp, Inc. (the “Company”), Capital Bank, N.A. (the “Bank”) and Edward F. Barry (“Executive”). 
WHEREAS, other than any equity interests in the Company issued to the Executive prior to the date hereof, this Agreement entirely replaces the prior employment agreement between the Bank and the Executive effective as of June 1, 2016; and
WHEREAS, the Executive wishes to continue in his employment as the Company’s and the Bank’s Chief Executive Officer pursuant to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and conditions hereinafter set forth, the Company, the Bank and Executive hereby agree as follows:
		
	1.
	POSITION AND RESPONSIBILITIES

During the period of his employment hereunder, the Executive agrees to serve as both the Company’s and the Bank’s Chief Executive Officer and shall report to both the Company’s Board of Directors (the “Company Board”) and the Bank’s Board of Directors (the “Bank Board,” and together with the Company Board, the “Boards”).  The Executive shall also serve as a member of the Bank Board and as a member of the Company Board.  As Chief Executive Officer, the Executive shall be responsible for overall operations of the Company and the Bank, subject to the policies and procedures established by the Boards.  All employees and officers of the Company and the Bank shall be accountable to the Executive.  
		
	2.
	TERMS AND DUTIES

2.1.    The period of Executive’s employment under this Agreement shall begin as of the Effective Date (subject to ratification by the Boards) and shall continue until December 31, 2021 (the “Initial Term”), subject to renewal unless sooner terminated as provided for below.  After the Initial Term, this Agreement shall automatically renew for successive one year terms unless written notice of non-renewal (“Non-Renewal Notice”) is provided by any party at least six (6) months in advance of the Anniversary Date (December 31st of each year beginning in 2021).  Subject to Section 6, the Executive may terminate his employment under this Agreement, with or without Good Reason, and the Company or the Bank may terminate the employment of the Executive, with or without Cause.  
2.2.    During the period of his employment hereunder, except for periods of absence occasioned by illness and reasonable vacation periods, the Executive shall, on a full time basis 

{Clients/5167/00239615.DOCX/2 }    1

faithfully perform his duties hereunder including activities and services related to the organization, operation and management of the Company and the Bank.
		
	3.
	COMPENSATION AND REIMBURSEMENTS

3.1.    Base Salary.  In consideration of the services to be rendered by the Executive hereunder, during the Initial Term the Bank shall pay the Executive as compensation an annual base salary (“Base Salary”) of $500,000.  All Base Salary shall be pro-rated to the extent that the Executive works partial calendar years during the term of the Agreement.  Such Base Salary shall be payable semi-monthly.  Following the Initial Term of this Agreement, the Executive’s Base Salary shall be reviewed at least annually. Such review shall be conducted by a committee designated by the Company Board, and the Company Board may increase, in its sole discretion, but not decrease, Executive’s Base Salary (any increase in Base Salary shall become the “Base Salary” for purposes of this Agreement). 
3.2.    Bonus and Incentive Compensation.
		
	(a)
	Incentive Compensation. The Executive will be entitled to incentive compensation and bonuses as provided below, and in any other plan of the Bank in which Executive is eligible to participate.  

		
	A.
	Annual Incentive Opportunity.  Without limiting the generality of the foregoing, the Executive shall have an opportunity to earn up to an additional 120% of his Base Salary as incentive compensation in each year during the term of this Agreement, as further described in Exhibit A attached hereto and incorporated herein by reference (the “Annual Incentive Payment”).    One-half (1/2) of each Annual Incentive Payment that is earned by and payable to the Executive hereunder shall be paid in stock of the Company (which shall be subject to transferability restrictions and vesting restrictions) and one-half (1/2) of the Annual Incentive Payment shall be paid in cash, in accordance with applicable regulatory requirements and guidelines regarding risk management and incentive compensation, with such stock to be issued and cash to be paid out to the Executive no later than two and one-half (2.5) months after the end of the year in which such Annual Incentive Payment was earned.  The specific terms and conditions of each Annual Incentive Payment is set forth in writing in Exhibit A; however, the Company Board reserves the right prior to the beginning of each anniversary date of this Agreement to review the details involved in the calculation of the Annual Incentive Payment if, in good faith, the Company Board 

{Clients/5167/00239615.DOCX/2 }    2

believes that such details need revision.  Exhibit A shall specify the time and form of payment and such other terms that may be required with respect to any deferred compensation that is subject to Section 409A of the Internal Revenue Code of 1986, as amended (“Code”).
3.3.    Equity Grants/ Stock Options.  On each of (i) January 1, 2019; (ii) January 1, 2020; and (iii) January 1, 2021, the Company shall grant the Executive an incentive stock option award (“Option Award”) of 20,000 (twenty thousand) shares of Stock.  One-quarter of each Option Award shall vest on January 1 each year after the grant date, provided, however, that the outstanding Option Awards shall become 100% vested upon a Change in Control (as defined below).  The Option Awards shall be evidenced by a separate grant agreement which shall be consistent with the terms and conditions of the Company’s Incentive Stock Option Plan.  
3.4.    Paid Time Off.  The Executive shall be entitled to four weeks of paid vacation time each calendar year (pro-rated for partial calendar years, with no roll over or cash out of unused annual vacation time).  In addition, the Executive shall be entitled to paid time off for all Bank holidays, and to paid sick days and other leave time in accordance with the Bank’s policies and procedures as in place from time to time. 
3.5.    Benefit Plans.  The Executive will be entitled to participate in or receive benefits under any employee benefit plans made available by the Bank to its senior executives, subject to the terms of such plans, including but not limited to, retirement plans, supplemental retirement plans, medical, disability, life insurance plans, and any other employee benefit plan or arrangement made available by the Bank in the future to its senior executives. In addition to the foregoing, the Bank shall provide and maintain a $1,500,000 term life insurance policy on the Executive payable to the Executive’s designated beneficiaries on death, in addition to any key man insurance the Bank may arrange which would be payable to the Bank. 
3.6.    Expense Reimbursements.
		
	(a)
	The Bank shall pay the Executive $500 per month as a car allowance, which shall be treated as additional taxable income to the Executive.

		
	(b)
	The Bank shall also pay or reimburse the Executive for all reasonable travel and other reasonable expenses incurred by the Executive in performing his obligations under this Agreement, including reasonable entertainment and club memberships, pursuant to policies and procedures determined by the Boards from time to time. Reimbursement of such expenses shall be made upon presentation to the Bank of an itemized account of the expenses in such form as the Bank may reasonably require. All reimbursements pursuant to this Section 3(f) shall be paid no later than 60 days following the date on 

{Clients/5167/00239615.DOCX/2 }    3

which the expense was incurred, assuming timely submission of the itemized expenses required by this Section 3.6.
		
	4.
	OUTSIDE ACTIVITIES

The Executive may serve as a member of the board of directors of business, community and charitable organizations with the express prior written approval of the Company Board, such approval conditioned on a requirement in each case that such service, and that the totality of such activities, shall not interfere with the performance of Executive’s duties under this Agreement or present any conflict of interest. 
		
	5.
	WORKING FACILITIES

The Executive’s principal place of employment shall be the Bank’s principal executive offices (currently located in Rockville, MD).  The Bank shall provide Executive, at his principal place of employment, with a private office and support services and facilities suitable to his position with the Bank and necessary or appropriate in connection with the performance of his duties under this Agreement.  
		
	6.
	EMPLOYMENT TERMINATION

6.1.    Notice Requirements.  Any party may terminate the Executive’s employment under this Agreement by giving one hundred twenty (120) days’ advance written notice to the other parties, or the notice otherwise specified in this Section 6.  In such event, the effective date of termination shall be the expiration of such notice period.  At the Company’s and the Bank’s option, during any notice period applicable to termination of Executive’s employment hereunder, Executive shall be obligated to continue as a full-time employee of the Company and the Bank under the terms of this Agreement, unless and until the Company and the Bank opt to have Executive cease performing such duties during the notice period.  In the event the Company and the Bank opt to ask Executive to cease performing his duties on a full time basis during the applicable notice period, Executive shall continue to receive his Base Salary and Employee Benefits to which Executive otherwise be entitled during the applicable Notice Period.  Nothing in this Agreement shall preclude the Company or the Bank from removing the Executive from any Board or officer position then held by the Executive if the Company Board believes that such actions are in the best interests of the Company and the Bank. 
6.2.    Termination Without Continued Compensation.  There shall be no salary or benefits continuation (except as may be required by applicable law) under this Agreement, and all rights, duties, and obligations of either party under this Agreement shall fully terminate upon the effective date of termination of the Employee’s employment resulting from:

{Clients/5167/00239615.DOCX/2 }    4

		
	(a)
	Executive’s Death. In this event, the effective date of termination shall be the first day of the month immediately following the date of death, and Executive’s estate shall be paid the Executive’s earned but unpaid Base Salary through such date;

		
	(b)
	Executive’s Total Disability.  In this event, the effective date of termination shall be (a) the date of commencement of long-term disability payments available to the Executive or (b) the date, in accord with the Company’s and the Bank’s employment policies, that the Executive is no longer able to perform his essential job functions with or without reasonable accommodation due to a physical or mental disability. 

		
	(c)
	Termination by the Executive Other than For Good Reason.  In this event, the effective date of termination shall be at the expiration of the applicable Notice Period provided for herein.  

		
	(d)
	Termination by the Company or the Bank “For Cause.”  In this event, the effective date of termination shall be as specified by the Company Board.  In the event that employment hereunder is terminated by the Company or the Bank for Cause, the Executive shall not be entitled to receive compensation or other benefits for any period after such termination, except as provided by law.  “Cause” means that there has been a good faith determination by the Company Board, in its sole discretion, that one or more of the following events with respect to the Executive has occurred: (i) breach of a fiduciary duty, gross negligence or willful misconduct by the Executive in the performance of his duties with the Company or the Bank (other than such conduct resulting from his incapacity due to disability); (ii) the intentional or grossly negligent conduct of the Executive, whether or not related to his duties hereunder, which conduct is demonstrably or materially injurious to the Company or the Bank or its reputation, monetarily or otherwise;  (iii) the conviction (or nolo contendere plea or other similar resolution) of the Executive of a felony or of any lesser criminal offense involving moral turpitude; (iv) the commission by the Executive of an act of fraud in the performance of his duties on behalf of the Company or the Bank; (v) a material violation of Company or Bank policy; (vi) the continuing willful failure of the Executive to perform his duties to the Company or the Bank after written notice thereof (specifying the particulars thereof in reasonable detail) and a reasonable opportunity to cure such failure; or (vii) an order of a federal or state regulatory agency or a court of competent jurisdiction requiring the termination of the Executive’s employment by the Company 

{Clients/5167/00239615.DOCX/2 }    5

or the Bank or requiring the removal of the Executive or a reduction in the Executive’s duties or title. 
In its discretion, to the extent the Company Board may believe that Cause for termination exists, but that it may be possible to cure the misconduct or violation, the Company Board may opt to provide a meeting and opportunity to be heard prior to terminating Executive’s employment hereunder.
		
	(e)
	Payments to Executive on Termination Under Section 6.2.  Upon Executive’s termination under this Section 6.2, the Bank shall provide to Executive the following: 

		
	(a)
	Base Salary through the Termination Date; 

		
	(b)
	Any accrued and unused leave that may be required to be paid pursuant to Bank policies; 

		
	(c)
	A prior year’s earned but unpaid incentive payments, if applicable; 

		
	(d)
	Expenses properly reimbursable under the Agreement; and

		
	(e)
	Benefit continuation rights, at Executive’s expense, under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”).

6.3.    Termination With Continued Compensation.  In the absence of a Change in Control, if the Company or the Bank terminates the employment of the Executive other than for reasons set forth in Section 6.2 above,  then the Bank shall provide to the Executive the amounts required under Section 6.2(e), if any, in addition to the Separation Pay described in Section 6.3.3(b).  Within twelve (12) months of a Change of Control, if the Company or the Bank terminates the employment of the Executive other than for reasons set forth in Section 6.2 above, then the Bank shall provide to the Executive the amounts required under Section 6.2(e), if any, in addition to the Separation Pay described in Section 6.3.3(c).  Within twelve (12) months of a Change of Control, if the Executive voluntarily resigns from the Company’s or the Bank’s employ due to any of the events listed in Section 6.3.1after providing the Company or the Bank the cure rights recited in Section 6.3.1 below, then the Bank shall provide to the Executive the amounts required under Section 6.2(e), if any, in addition to the Separation Pay described in Section 6.3.3(c). 
		
	6.3.1
	Good Reason.  The Executive’s voluntary resignation from the Company’s and the Bank’s employ for “Good Reason” means resignation upon the occurrence of any of the following without the Executive’s consent:

		
	(a)
	Failure of the Boards to elect or reelect or to appoint or reappoint the Executive as Chief Executive Officer or removal of the Executive from his 

{Clients/5167/00239615.DOCX/2 }    6

position as Chief Executive Officer, except if such removal is due to regulatory requirements,
		
	(b)
	Failure of the Boards to elect or reelect or to appoint or reappoint the Executive as a member of the Boards or removal of the Executive from the Boards, except if such removal is due to regulatory requirements,

		
	(c)
	A material change in the Executive’s functions, duties, or responsibilities, which change would cause Executive’s position to become one of materially lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1, above, except if such change is due to regulatory requirements,  

		
	(d)
	Material reduction in the Executive’s salary, compensation or benefits from that described in Section 3, above, except if such change is due to regulatory requirements,  

		
	(e)
	A relocation of the Executive’s principal place of employment to a geographic area that is more than 50 miles from the Bank’s headquarters on the Effective Date, or

		
	(f)
	Material breach of this Agreement by the Company or the Bank, following thirty days’ notice and opportunity to cure, except if such breach is due to regulatory requirements.

In the absence of a Change in Control, upon the occurrence of any event described in clauses 6.3.1(a) through 6.3.1(f), above, the Executive shall have the right to elect to terminate his employment under this Agreement by resignation upon thirty (30) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect.  The Company and the Bank shall have thirty (30) days to cure the conditions giving rise to the Event of Termination, provided that the Company and the Bank may elect to waive such thirty (30) day period.  Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Company or the Bank, the Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his rights solely under this Agreement and this Section by virtue of the fact that Executive has submitted his resignation but has remained in the employment of the Company and the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses 6.3.1(a) through 6.3.1(f) above, provided, however, that the Executive must actually terminate employment no later than one hundred and eighty (180) days after the 

{Clients/5167/00239615.DOCX/2 }    7

initial event giving rise to the right to elect to resign for Good Reason as described in this section, and for the stated reasons in his initial notice.
		
	6.3.2
	Change in Control. For these purposes, a Change in Control of the Company shall mean a change in control of a nature that: (i) results in a Change in Control of the Company within the meaning of the Bank Holding Company Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “BHCA”) as in effect at the time of the Change in Control; or (ii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any person is or becomes the beneficial owner, directly or indirectly, of securities of the Company representing Fifty Percent (50%) or more of the combined voting power of the Company’s outstanding securities, except for any securities purchased by the Bank’s tax-qualified retirement plans; or (b) individuals who constitute the Company Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Bank’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Company or similar transaction in which the Company is not the surviving institution occurs or is implemented.  Notwithstanding the foregoing, a Change in Control will not be deemed to occur unless it constitutes a “change in control event” within the meaning of Treasury Regulations Section 1,409A-3(i)(5)(i).  

		
	6.3.3
	Separation Pay.  

		
	(a)
	Any separation payments made under this Section 6 shall be contingent on Executive entering into a Severance and Release Agreement with the Company and the Bank within sixty (60) days of the termination date, pursuant to which a full release, to the maximum extent permitted by law, is provided by Executive; and shall be payable in regular installments in accordance with the Bank’s normal payroll practices, commencing on the first regular payroll date occurring after the Effective Date of a Severance and Release Agreement, provided that in the event that the sixty day period covers two taxable years, the payments will be paid or commence in the second taxable year.  

		
	(a)
	Where applicable, “Separation Pay” shall consist of:

{Clients/5167/00239615.DOCX/2 }    8

		
	(i) 
	Continuation of Executive’s Base Salary at the rate in effect on the effective date of termination for a period of eighteen (18) months (“Separation Pay Period”), and in no event shall Executive be entitled to Separation Pay in excess of eighteen months’ pay; and 

		
	(ii)
	Continuation of the Bank’s portion of premiums for health benefits, conditioned on Executive’s remaining enrolled in such benefits under COBRA for the maximum permissible period, for a period of eighteen months or until such earlier date that Executive becomes a full time employee of another employer, provided Executive becomes entitled to benefits with such other employer that are substantially similar to the medical coverage provided by the Bank.  The Bank shall pay to the Executive cash during the Separation Pay Period equivalent to a prorated portion of the annual premium otherwise payable by the Bank where, due to legal, contract, or plan limitations, the benefit referenced in this subsection cannot be continued “in kind” for the full Separation Pay Period; and

		
	(iii)
	If the date of termination is more than six (6) months into the calendar year, the Executive shall be paid a pro-rated Annual Incentive Payment for that portion of the calendar year that he worked, if an Annual Incentive Payment is earned for that year, payable at the usual time the Annual Incentive Payment is paid, and subject to the discretion of the Company Board.

(c)    Separation Pay/ Change in Control.  In the Event of a severance payment relating to a Change in Control as defined above, Executive shall be entitled to the benefits identified in  section 6.3.3(b) above except that the continuation of Executive’s Base Salary, at the rate in effect on the effective date of termination shall be for a period of thirty (30) months (“Change in Control Separation Pay Period”). 
6.4.    Termination/ Repayment.  Separation Pay under Section 6 shall cease as of the date the Executive violates any of the post-separation covenants under this Agreement or under the Severance and Release Agreement Executive enters into at the time of termination and the Company and/or Bank may also seek such other remedies available to it in law or equity.  
		
	7.
	TAX ISSUES

7.1.    Withholding.  The Company or the Bank, as applicable, shall withhold from any compensation, benefits or other payments under this Agreement all federal, state, city of other taxes as may be required pursuant to any law or government regulation or ruling.

{Clients/5167/00239615.DOCX/2 }    9

7.2.    Section 409A Compliance.  
		
	(a)
	To the extent that any payment or benefit under this Agreement is subject to Code Section 409A, it is intended that this Agreement as applied to that payment or benefit comply in all respects with the requirements of Code Section 409A, and that the Agreement shall be administered and interpreted consistent with that intent.  The Company, the Bank and the Executive agree to work together in good faith to limit or avoid any taxes, penalties or excise taxes applicable to payment and benefits under this Agreement in compliance with Section 409A; however, the Company and the Bank shall have no liability to the Executive, or his successor or beneficiary, in the event that taxes, penalties or excise taxes are ultimately determined to be applicable to any payment or benefit received by Executive nor for reporting in good faith any payment of benefit as subject to Code Section 409A.  

		
	(b)
	Notwithstanding any provision to the contrary in this Agreement, no amount will be payable pursuant to this Agreement unless the termination of the Executive’s employment constitutes a “separation from service” within the meaning of Treasury Regulations Section 1.409A-1(h) and, for purposes of Code Section 409A, the Executive’s right to receive installment payments pursuant to this Agreement will be treated as a right to receive a series of separate and distinct payments.  Notwithstanding any provision to the contrary in this Agreement, if the Executive is deemed at the time of his separation from service to be a “specified employee” of a “publicly traded” company for purposes of Section 409A(a)(2)(B)(i) of the Code, if Separation Pay or any other payments or benefits or any portion thereof must be delayed to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of the Executive’s Separation Pay or other applicable payments or benefits will be delayed until the earlier of (i) the expiration of the six-month period measured from the date of the Executive’s “separation from service” with the Company and the Bank under Code Section 409A, or (ii) the date of the Executive’s death; at which time all payments delayed pursuant to this sentence will be paid in a lump sum to the Executive, and any remaining payments due under this Agreement will be paid as otherwise provided herein.

		
	8.
	NOTICE

8.1.     All notices required to be given under the terms of this Agreement or which either of the parties desires to give hereunder shall be in writing and delivered personally or sent by certified mail, return receipt requested, addressed as follows:

{Clients/5167/00239615.DOCX/2 }    10

if to the Company or Bank, addressed to:
    
Capital Bank
Executive Offices
One Church St., Ste. 300
Rockville, MD 20850
Attention:  Chairman of the Board

and 

Epstein Becker Green
1227 25th Street, NW
Washington, D.C. 20037 
Attention:  Frank C. Morris, Jr.

if to the Executive, addressed to:
    
Edward F. Barry
235 Talahi Road
Vienna, VA 22180  

or at such other address as may be provided by Company, Bank or Executive by notice from one to another in writing from time to time.

{Clients/5167/00239615.DOCX/2 }    11

8.2.    Any purported termination by the Company and the Bank or by the Executive shall be communicated by Notice of Termination to the other party hereto.  For purposes of this Agreement, a “Notice of Termination” shall mean a written notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated.  
		
	9.
	PAYMENTS RELATED TO A CHANGE IN CONTROL

In the event that the aggregate payments or benefits to be made or afforded to the Executive in the event of a Change in Control would be deemed to include an “excess parachute payment” under Section 280G of the Code or any successor thereto, then (i) such payments or benefits shall be payable or provided to the Executive over the minimum period necessary to reduce the present value of such payments or benefits to an amount which is one dollar ($1.00) less than three times the Executive’s “base amount” under Code Section 280G or (ii) the payments or benefits to be provided under this Agreement shall be reduced to the extent necessary to avoid treatment as an excess parachute payment.  
		
	10.
	POST-TERMINATION OBLIGATIONS

10.1.    All payments and benefits to the Executive under this Agreement shall be subject to the Executive’s compliance with this Section during the term of this Agreement and for 18 months, or 30 months if the Change in Control Separation Pay Period applies, after the expiration or termination hereof.
10.2.    The Executive hereby covenants and agrees that, for a period of 18 months, or 30 months if the Change in Control Separation Pay Period applies, following his termination of employment with the Company and the Bank he shall not, without the written consent of the Company and the Bank, either directly or indirectly:
		
	(a)
	Solicit, offer employment to, or take any other action intended (or that a reasonable person acting in like circumstances would expect) to have the effect of causing any officer or employee of the Company or the Bank or any of their respective subsidiaries or affiliates to terminate his or her employment and accept employment or become affiliated with, or provide services for compensation in any capacity whatsoever to, any business whatsoever;

		
	(b)
	Become an officer, employee, consultant, director, independent contractor, agent, sole proprietor, joint venturer, greater than 5% equity-owner or stockholder, partner or trustee of any savings bank, savings and loan association, savings and loan holding company, credit union, bank or bank holding company, insurance company or agency, or any mortgage or loan 

{Clients/5167/00239615.DOCX/2 }    12

broker, where such entity is competing with the Bank, and has its main office, or the office from which Executive would be based would be, within 50 miles of Rockville, Maryland and such entity has total assets under $10 billion; or  
		
	(c)
	Solicit, provide any information, advice or recommendation or take any other action intended (or that a reasonable person acting in like circumstances would expect) to have the effect of causing any customer of the Bank to terminate an existing business or commercial relationship with the Bank.

Executive acknowledges that the foregoing covenants are reasonable and necessary to protect the Company and the Bank’s business interests, and that the Company and the Bank have the right to seek injunctive and other relief in a court of competent jurisdiction or before an Arbitrator under the arbitration provisions of this Agreement.  However, if for any reason a court or arbitrator should determine that any portion of this Section is invalid or unenforceable, then it is the desire of the parties that such covenant or agreement be considered amended by the parties to the extent required to render it valid and enforceable.  If such amendment is not allowed by law, the parties shall promptly agree in writing to a provision to be substituted therefore which will have an effect as close as possible to the invalid provision that is consistent with applicable law.  The invalidity or unenforceability of any provision of this Agreement shall not affect or limit the validity and enforceability of any other provisions of this Agreement.

10.3.    The Executive shall, upon reasonable notice, furnish such information and assistance to the Company and the Bank as may reasonably be required by the Company or the Bank in connection with any litigation in which it or any of its subsidiaries or affiliates is, or may become, a party.
10.4.    The Executive recognizes and acknowledges that the knowledge of the business activities and plans for business activities of the Company and the Bank and affiliates thereof, as it may exist from time to time, is a valuable, special and unique asset of the business of the Company and the Bank.  The Executive will not, during or after the term of his employment, disclose any knowledge of the past, present, planned or considered business activities of the Company or the Bank or affiliates thereof to any person, firm, corporation, or other entity for any reason or purpose whatsoever (except for such disclosure as may be required to be provided to any federal or state banking agency with jurisdiction over the Company, the Bank or the Executive).  Notwithstanding the foregoing, the Executive may disclose any knowledge of banking, financial and/or economic principles, concepts or ideas which are not solely and exclusively derived from the business plans and activities of the Company or the Bank, and the Executive may disclose any information regarding the Company or the Bank which is otherwise publicly available.  In the event of a breach or threatened breach by the Executive of the provisions of this Section, the Company and the Bank will be entitled to an injunction restraining the Executive from disclosing, in whole or in part, the knowledge of the past, present, planned or considered business activities of the Company or the Bank or affiliates thereof, or from rendering any services to any person, firm, corporation, other entity to whom such 

{Clients/5167/00239615.DOCX/2 }    13

knowledge, in whole or in part, has been disclosed or is threatened to be disclosed.  Nothing herein will be construed as prohibiting the Company and the Bank from pursuing any other remedies available to the Company and the Bank for such breach or threatened breach, including the recovery of damages from Executive.  The parties acknowledge and agree that this restriction shall not preclude the discussion of such information with the Executive’s professional advisors, including his attorneys.
10.5     The Executive acknowledges that pursuant to the Defend Trade Secrets Act of 2016:
An individual may not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of trade secret that:  (a) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding.
Further, an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the employer’s trade secrets to the attorney and use the trade secret information in the court proceeding if the individual: (a) files any document containing the trade secret under seal; and (b) does not disclose the trade secret, except pursuant to court order.
		
	11.
	REQUIRED REGULATORY PROVISIONS

Notwithstanding anything herein contained to the contrary, any payments to the Executive by the Bank, whether pursuant to this Agreement or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1828(k), and the regulations promulgated thereunder in 12 C.F.R. Part 359.
		
	12.
	NO ATTACHMENT

12.1.    Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation, or to execution, attachment, levy, or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to affect any such action shall be null, void, and of no effect.
12.2.    This Agreement shall be binding upon, and inure to the benefit of, the Executive, the Company and the Bank and their respective successors and assigns.
		
	13.
	ENTIRE AGREEMENT; MODIFICATION AND WAIVER

{Clients/5167/00239615.DOCX/2 }    14

13.1.    This Agreement contains the entire agreement of the parties relating to the subject matter hereof, and supersedes in its entirety any and all prior agreements, understandings or representations relating to the subject matter hereof, with the exception of Company and Bank policies governing business and employment practices.  No modifications of this Agreement shall be valid unless made in writing and signed by the parties hereto.
13.2.    This Agreement may not be modified or amended except by an instrument in writing signed by the parties hereto.
13.3.    No term or condition of this Agreement shall be deemed to have been waived, nor shall there be any estoppel against the enforcement of any provision of this Agreement, except by written instrument of the party charged with such waiver or estoppel.  No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future as to any act other than that specifically waived.  No rule of construction shall be applied in any dispute under this Agreement as both parties have participated in the drafting.  
		
	14.
	SEVERABILITY

If, for any reason, any provision of this Agreement, or any part of any provision, is held invalid, such invalidity shall not affect any other provision of this Agreement or any part of such provision not held so invalid, and each such other provision and part thereof shall to the full extent consistent with law continue in full force and effect.
		
	15.
	HEADINGS FOR REFERENCE ONLY

The headings of sections and paragraphs herein are included solely for convenience of reference and shall not control the meaning or interpretation of any of the provisions of this Agreement.
		
	16.
	GOVERNING LAW

This Agreement shall be governed by the laws of the State of Maryland, without regard to conflict of law rules, but only to the extent not superseded by federal law.
		
	17.
	ARBITRATION

Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration, in accordance with the rules of the Judicial Mediation and Arbitration Systems (JAMS) then in effect.  The notice of arbitration shall specifically describe the legal claims, and the factual allegations supporting the legal claims, and must be filed within limitations period prescribed by law.  The written decision of the arbitrator shall be final, binding and conclusive on the parties and enforceable by a court of competent jurisdiction.  The expenses 

{Clients/5167/00239615.DOCX/2 }    15

of the arbitration shall be borne equally by the parties to the arbitration; provided, however, the prevailing party shall be entitled to recover reasonable attorneys’ fees and costs, subject to the ruling of the Arbitrator.  The arbitration shall be conducted at a location within fifty (50) miles from the location of the main office of the Bank.
		
	18.
	INDEMNIFICATION

During the term of this Agreement, the Bank shall provide the Executive (including his heirs, executors and administrators) with coverage under a standard directors and officers liability insurance policy at its expense, and shall indemnify the Executive (and his heirs, executors and administrators) to the fullest extent permitted under applicable law against all expenses and liabilities reasonably incurred by him in connection with or arising out of any action, suit or proceeding or threatened action or suit in which he may be involved by reason of his having been a director or officer of the Company or the Bank (whether or not he continues to be a director or officer at the time of incurring such expenses or liabilities), such expenses and liabilities to include, but not be limited to, judgments, court costs and attorney fees and the cost of reasonable settlements (such settlements must be approved by the Boards).  If such action, suit or proceeding is brought against the Executive in his capacity as an officer or director of the Company or the Bank, however, such indemnification shall not extend to matters as to which the Executive is finally adjudged to be liable for willful misconduct in the performance of his duties. 
		
	19.
	SUCCESSOR TO THE COMPANY

The Company and the Bank shall require any successor or assignee, whether direct or indirect, by purchase, merger, consolidation or otherwise, to all or substantially all the business or assets of the Company or the Bank, expressly and unconditionally to assume and agree to perform the Company’s and the Bank’s obligations under this Agreement, in the same manner and to the same extent that the Company or the Bank would be required to perform if no such succession or assignment had taken place.
[Signature Page Follows]

{Clients/5167/00239615.DOCX/2 }    16

SIGNATURES

IN WITNESS WHEREOF, the Company and the Bank have caused this Agreement to be executed by their duly authorized person and the Executive has signed this Agreement, on the date set forth below, effective as of January 1, 2019.
CAPITAL BANCORP, INC.

January 7, 2019                By:/s/ James F. Whalen                
Date        James F. Whalen, Director

CAPITAL BANK, N.A.

January 7, 2019                By:/s/ James F. Whalen                
Date        James F. Whalen, Chairman of the Board

EXECUTIVE:

January 7, 2019                By:/s/ Edward F. Barry                
Date        Edward F. Barry

{Clients/5167/00239615.DOCX/2 }    17

Exhibit A

Annual Incentive Payment

The Board of the Bank has established “Return on Equity (RoE)” targets and “Growth” targets for the Bank for each of 2019, 2020, and 2021, which RoE and Growth targets are set forth in Schedule 1 attached hereto and incorporated herein by reference.  

RoE shall be measured for the measurement year based on the return on average equity for the Company as is usually and customarily calculated by the industry.  Sixty percent (60%) of the Growth target shall be based on average core deposits of the bank (excluding director-generated deposits) for December of the measurement year as compared to December of the immediately preceding year, and forty percent (40%) of the Growth target shall be based on average loans outstanding December of the measurement year as compared to December of the immediately preceding year.  For purposes of this Agreement, “Growth” shall not include or account for the effect of any sales, revenues, EBITDA, assets, properties, or benefits acquired by the Bank during the measurement period in any acquisition of assets or equity interests, merger, consolidation, or other transaction having similar effect.  

The Executive’s Annual Incentive Payment for each year during the term of this Agreement is equal to up to 120% of the Executive’s Base Salary.  Promptly following the end of each calendar year during the term of this Agreement, the Board shall measure the Bank’s performance relative to the RoE and Growth targets set forth in Schedule 1, and shall determine whether the Executive is entitled to an Annual Incentive Payment for such calendar year and, if so, the amount thereof.  Sixty percent (60%) of any such payment will be based on the Bank’s actual RoE as compared to its RoE target for the measurement period, based on the percentage attainment relative thereto set forth in Schedule 1. Forty percent (40%) of any such payment will be based on the Bank’s actual Growth as compared to its Growth target for the measurement period based on the percentage attainment relative thereto set forth in Schedule 1. The Board of the Bank shall provide the Executive with a writing setting forth its analysis and calculations in determining whether any Annual Incentive Payment was earned by and is payable to the Executive, and if so, the amount thereof (and in the event the Board determines that no Annual Incentive Payment was earned by or is payable to the Executive).

Any Annual Incentive Payment earned by and payable to the Executive hereunder shall be paid as provided in Section 3.2(a) of the Agreement.  All stock of the Company received by Executive as part of the Annual Incentive Payment shall vest one-third (1/3) per year; however, all vesting will be tolled during the period the Bank is under any regulatory action such as a Memorandum of Understanding (“MOU”).  All vesting will be accelerated in the event of a Change of Control.

Notwithstanding the foregoing or anything in this Agreement to the contrary, the Bank shall be entitled to reduce the amount of any Annual Incentive Payment, or to defer or delay the payment of any Annual Incentive Payment, based on objective and subjective performance criteria which may include but not limited to:  high levels of loan classifications; unresolved regulatory actions such as a MOU; a material breach of this Agreement; termination of the executive for Cause prior 

{Clients/5167/00239615.DOCX/2 }    18

to the payment of the Annual Incentive Payment; actions by the Executive that are not specifically directed by the Board of the Bank and that the Board of the Bank determines have had or will have a material adverse effect on the Bank’s franchise value or reputation (including but not limited to Human Resource and policy concerns). 

Notwithstanding the foregoing or anything in this Agreement to the contrary, the Bank shall be entitled to clawback some or all of any Annual Incentive Payment (both cash and stock) if, within five (5) years of the end of the measurement year, the financial statements of the Bank or the Company are restated and based on such restatement the Annual Incentive Payment would have been less. 

Any determination by the Bank to reduce, delay, or clawback all or any portion of any Annual Incentive Payment shall be promptly communicated to the Executive, which communication shall, to the extent permitted by law, describe in reasonable detail the reason(s) for such reduction, delay, or clawback and, in the case of any delay, an estimate, if possible, of when the Annual Incentive Payment will be paid to the Executive.  

{Clients/5167/00239615.DOCX/2 }    19

Schedule 1

RoE and Growth Targets

	
								
	 
	 
	2019
	

	2020
	

	2021
	

	 
	 
	 
	 
	 

	ROE(60%)
	13.0
	%
	14.5
	%
	15.0
	%

	$300K
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	above 18
	 
	120
	%
	120
	%
	120
	%

	17.5-18
	 
	120
	%
	120
	%
	120
	%

	17.17.5
	 
	120
	%
	120
	%
	110
	%

	16.5-17
	 
	115
	%
	110
	%
	100
	%

	16-16.5
	 
	110
	%
	100
	%
	90
	%

	15.5-16
	 
	105
	%
	90
	%
	80
	%

	15-15.5
	 
	100
	%
	80
	%
	75
	%

	14.5-15
	 
	90
	%
	75
	%
	70
	%

	14.14.5
	 
	85
	%
	70
	%
	65
	%

	13.5-14
	 
	80
	%
	65
	%
	60
	%

	13-13.5
	 
	75
	%
	60
	%
	55
	%

	12.5-13
	 
	70
	%
	55
	%
	50
	%

	12-12.5
	 
	60
	%
	50
	%
	45
	%

	11.5-12
	 
	50
	%
	40
	%
	35
	%

	11-11.5
	 
	40
	%
	30
	%
	25
	%

	10.5-11
	 
	30
	%
	20
	%
	10
	%

	10-10.5
	 
	20
	%
	10
	%
	0
	%

	below
	 
	0
	%
	0
	%
	0
	%

	 
	 
	 
	 
	 

	Growth(40%)
	 
	 
	 

	$200K
	 
	12
	%
	12
	%
	12
	%

	 
	 
	 
	 
	 

	above 16
	 
	120
	%
	120
	%
	120
	%

	15-16
	 
	110
	%
	110
	%
	110
	%

	14-15
	 
	100
	%
	100
	%
	100
	%

	13-14
	 
	90
	%
	90
	%
	90
	%

	12.0-13
	 
	80
	%
	80
	%
	80
	%

	11.0-12
	 
	75
	%
	75
	%
	75
	%

	10.0-11
	 
	60
	%
	60
	%
	60
	%

	9.0-10
	 
	50
	%
	50
	%
	50
	%

	8.5-9.0
	 
	40
	%
	40
	%
	40
	%

	8.0-9.0
	 
	30
	%
	30
	%
	30
	%

	below 8
	 
	0
	%
	0
	%
	0
	%

{Clients/5167/00239615.DOCX/2 }    20AIXIN
LIFE INTERNATIONAL, INC.

2019
EQUITY INCENTIVE PLAN

 

	1.	Purposes
of the Plan.

 

	2.	The purposes
of this Equity Incentive Plan are to attract and retain the best available personnel, to provide additional incentive to Employees,
Directors and Consultants and to promote the success of the Company’s business.

 

	3.	Definitions.

 

As
used herein, the following definitions shall apply:

 

(a)
“Administrator” means the Board or any Committee appointed to administer the Plan.

 

(b)
“Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 promulgated
under the Exchange Act.

 

(c)
“Applicable Laws” means the legal requirements relating to the administration of stock incentive plans, if any, under
applicable provisions of federal securities laws, state corporate and securities laws, the Code, the rules of any applicable stock
exchange or national market system, and the rules of any foreign jurisdiction applicable to Awards granted to residents therein.

 

(d)
“Award” means the grant of an Option, SAR, Dividend Equivalent Right, Restricted Stock, Performance Unit, Performance
Share, or other right or benefit under the Plan.

 

(e)
“Award Agreement” means the written agreement evidencing the grant of an Award executed by the Company and the Grantee,
including any amendments thereto.

 

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

 

(g)
“Cause” means, with respect to the termination by the Company or a Related Entity of the Grantee’s Continuous
Service, that such termination is for “Cause” as such term is expressly defined in a then-effective written agreement
between the Grantee and the Company or such Related Entity, or in the absence of such then-effective written agreement and definition,
is based on, in the determination of the Administrator, the Grantee’s:

 

(i)
refusal or failure to act in accordance with any specific, lawful direction or order of the Company or a Related Entity;

 

(ii)
unfitness or unavailability for service or unsatisfactory performance (other than as a result of Disability);

 

(iii)
performance of any act or failure to perform any act, in bad faith and to the detriment of the Company or a Related Entity;

 

(iv)
dishonesty, intentional misconduct or material breach of any agreement with the Company or a Related Entity; or

 

(v)
commission of a crime involving dishonesty, breach of trust, or physical or emotional harm to any person.

 

(h)
“Code” means the Internal Revenue Code of 1986, as amended.

 

(i)
“Committee” means any committee appointed by the Board to administer the Plan.

 

    	 	1	 

     

    

 

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

 

(k)
“Company” means AiXin Life International, Inc., a Colorado corporation.

 

(l)
“Consultant” means any person (other than an Employee or a Director, solely with respect to rendering services in
such person’s capacity as a Director) who is engaged by the Company or any Related Entity to render consulting or advisory
services to the Company or such Related Entity.

 

(m)
“Continuous Service” means that the provision of services to the Company or a Related Entity in any capacity of Employee,
Director or Consultant, is not interrupted or terminated. Continuous Service shall not be considered interrupted in the case of
(i) any leave of absence approved by the Company or Related Entity, (ii) transfers between locations of the Company or among the
Company, any Related Entity, or any successor, in any capacity of Employee, Director or Consultant, or (iii) any change in status
as long as the individual remains in the service of the Company or a Related Entity in any capacity of Employee, Director or Consultant
(except as otherwise provided in the Award Agreement). For purposes of Incentive Stock Options, no such approved leave of absence
may exceed ninety (90) days, unless re-employment upon expiration of such leave is guaranteed by statute or contract.

 

(n)
“Corporate Transaction” means any of the following transactions:

 

(i)
a merger or consolidation in which the Company is not the surviving entity, except for a transaction the principal purpose of
which is to change the state in which the Company is incorporated;

 

(ii)
the sale, transfer or other disposition of all or substantially all of the assets of the Company (including the capital stock
of the Company’s subsidiary corporations) in connection with the complete liquidation or dissolution of the Company;

 

(iii)
any reverse merger in which the Company is the surviving entity but in which securities possessing more than eighty percent (80%)
of the total combined voting power of the Company’s outstanding securities are transferred to a person or persons different
from those who held such securities immediately prior to such merger; or

 

(iv)
an acquisition by any person or related group of persons (other than the Company or by a Company-sponsored employee benefit plan)
of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than eighty percent
(80%) of the total combined voting power of the Company’s outstanding securities, but excluding any such transaction that
the Administrator determines shall not be a Corporate Transaction.

 

(o)
“Director” means a member of the Board or the board of directors of any Related Entity.

 

(p)
“Disability” means that a Grantee is permanently unable to carry out the responsibilities and functions of the position
held by the Grantee by reason of any medically determinable physical or mental impairment. A Grantee will not be considered to
have incurred a Disability unless he or she furnishes proof of such impairment sufficient to satisfy the Administrator in its
discretion.

 

(q)
“Dividend Equivalent Right” means a right entitling the Grantee to compensation measured by dividends paid with respect
to Common Stock.

 

(r)
“Employee” means any person, including an Officer or Director, who is an employee of the Company or any Related Entity.
The payment of a director’s fee by the Company or a Related Entity shall not be sufficient to constitute “employment”
by the Company.

 

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

 

    	 	2	 

     

    

 

(t)
“Fair Market Value” means, as of any date, the value of Common Stock determined as follows: (i) Where there exists
a public market for the Common Stock, the Fair Market Value shall be (A) the closing price for a Share for the last market trading
day prior to the time of the determination (or, if no closing price was reported on that date, on the last trading date on which
a closing price was reported) on the stock exchange or national market system determined by the Administrator to be the primary
market for the Common Stock, or (B) if the Common Stock is not traded on any such exchange or national market system, the average
of the closing bid and asked prices of a share on the OTC Bulletin Board or other inter-dealer quotation service for the day prior
to the time of the determination (or, if no such prices were reported on that date, on the last date on which such prices were
reported), in each case, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or (ii)
in the absence of an established market for the Common Stock of the type described in subparagraph (i), above, the Fair Market
Value shall be determined by the Administrator in good faith.

 

(u)
“Grantee” means an Employee, Director or Consultant who receives an Award pursuant to an Award Agreement under the
Plan.

 

(v)
“Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section
422 of the Code.

 

(w)
“Non-Qualified Stock Option” means an Option not intended to qualify as an Incentive Stock Option.

 

(x)
“Officer” means a person who is an officer of the Company or a Related Entity within the meaning of Section 16 of
the Exchange Act and the rules and regulations promulgated thereunder.

 

(y)
“Option” means an option to purchase Shares pursuant to an Award Agreement granted under the Plan.

 

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

 

(aa)
“Performance Shares” means Shares or an Award denominated in Shares which may be earned in whole or in part upon attainment
of performance criteria established by the Administrator.

 

(bb)
“Performance Units” means an Award which may be earned in whole or in part upon attainment of performance criteria
established by the Administrator and which may be settled for cash, Shares or other securities or a combination of cash, Shares
or other securities as established by the Administrator.

 

(cc)
“Plan” means this 2019 Equity Incentive Plan.

 

(dd)
“Related Entity” means any Parent, Subsidiary and any business, corporation, partnership, limited liability company
or other entity in which the Company, a Parent or a Subsidiary holds a substantial ownership interest, directly or indirectly.

 

(ee)
“Restricted Stock” means Shares issued under the Plan to the Grantee for such consideration, if any, and subject to
such restrictions on transfer, rights of first refusal, repurchase provisions, forfeiture provisions, and other terms and conditions
as established by the Administrator.

 

(ff)
“Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor thereto.

 

(gg)
“SAR” means a stock appreciation right entitling the Grantee to Shares or cash compensation, as established by the
Administrator, measured by appreciation in the value of Common Stock.

 

(hh)
“Share” means a share of the Common Stock.

 

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

 

    	 	3	 

     

    

 

(jj)
“Related Entity Disposition” means the sale, distribution or other disposition by the Company of all or substantially
all of the Company’s interests in any Related Entity effected by a sale, merger or consolidation or other transaction involving
that Related Entity or the sale of all or substantially all of the assets of that Related Entity.

 

3.
Stock Subject to the Plan.

 

(a)
Subject to the provisions of Section 10, below, the maximum aggregate number of Shares which may be issued pursuant to all Awards
(including Incentive Stock Options) is 5,000,000 Shares. The Shares to be issued pursuant to Awards may be authorized, but unissued,
or reacquired Common Stock.

 

(b)
Any Shares covered by an Award (or portion of an Award) which is forfeited or canceled, expires or is settled in cash, shall be
deemed not to have been issued for purposes of determining the maximum aggregate number of Shares which may be issued under the
Plan. If any unissued Shares are retained by the Company upon exercise of an Award in order to satisfy the exercise price for
such Award or any withholding taxes due with respect to such Award, such retained Shares subject to such Award shall become available
for future issuance under the Plan (unless the Plan has terminated). Shares that actually have been issued under the Plan pursuant
to an Award shall not be returned to the Plan and shall not become available for future issuance under the Plan, except that if
unvested Shares are forfeited, or repurchased by the Company at their original purchase price, such Shares shall become available
for future grant under the Plan.

 

4.
Administration of the Plan.

 

(a)
Plan Administrator.

 

(i)
Administration with Respect to Directors and Officers. With respect to grants of Awards to Directors or Employees who are also
Officers or Directors of the Company, the Plan shall be administered by (A) the Board or (B) a Committee designated by the Board,
which Committee shall be constituted in such a manner as to satisfy the Applicable Laws and to permit such grants and related
transactions under the Plan to be exempt from Section 16(b) of the Exchange Act in accordance with Rule 16b-3. Once appointed,
such Committee shall continue to serve in its designated capacity until otherwise directed by the Board.

 

(ii)
Administration with Respect to Consultants and Other Employees. With respect to grants of Awards to Employees or Consultants who
are neither Directors nor Officers of the Company, the Plan shall be administered by (A) the Board or (B) a Committee designated
by the Board, which Committee shall be constituted in such a manner as to satisfy the Applicable Laws. Once appointed, such Committee
shall continue to serve in its designated capacity until otherwise directed by the Board. The Board may authorize one or more
Officers to grant such Awards and may limit such authority as the Board determines from time to time. Except for the power to
amend the Plan as provided in Section 13 and except for determinations regarding Employees who are subject to Section 16 of the
Exchange Act or certain key Employees who are, or may become, as determined by the Board or the Committee, subject to Section
162(m) of the Code compensation deductibility limit, and except as may otherwise be required under applicable stock exchange rules,
the Board or the Committee may delegate any or all of its duties, powers and authority under the Plan pursuant to such conditions
or limitations as the Board or the Committee may establish to any Officer or Officers of the Company

 

(iii)
Administration Errors. In the event an Award is granted in a manner inconsistent with the provisions of this subsection, such
Award shall be presumptively valid as of its grant date to the extent permitted by Applicable Laws.

 

(b)
Powers of the Administrator. Subject to Applicable Laws and the provisions of the Plan (including any other powers given to the
Administrator hereunder), and except as otherwise provided by the Board, the Administrator shall have the authority, in its discretion:

 

(i)
to select the Employees, Directors and Consultants to whom Awards may be granted from time to time hereunder;

 

(ii)
to determine whether and to what extent Awards are granted hereunder;

 

    	 	4	 

     

    

 

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

 

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

 

(v)
to determine the terms and conditions of any Award granted hereunder;

 

(vi)
to amend the terms of any outstanding Award granted under the Plan, provided that any amendment that would adversely affect the
Grantee’s rights under an outstanding Award shall not be made without the Grantee’s written consent;

 

(vii)
to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan, including without limitation, any notice
of Award or Award Agreement, granted pursuant to the Plan;

 

(viii)
to establish additional terms, conditions, rules or procedures to accommodate the rules or laws of applicable foreign jurisdictions
and to afford Grantees favorable treatment under such laws; provided, however, that no Award shall be granted under any such additional
terms, conditions, rules or procedures with terms or conditions which are inconsistent with the provisions of the Plan; and

 

(ix)
to take such other action, not inconsistent with the terms of the Plan, as the Administrator deems appropriate.

 

(c)
Effect of Administrator’s Decision. All decisions, determinations and interpretations of the Administrator shall be conclusive
and binding on all persons.

 

5.
Eligibility, Awards other than Incentive Stock Options may be granted to Employees, Directors and Consultants. Incentive Stock
Options may be granted only to Employees of the Company, a Parent or a Subsidiary. An Employee, Director or Consultant who has
been granted an Award may, if otherwise eligible, be granted additional Awards. Awards may be granted to Employees, Directors
or Consultants who are residing in foreign jurisdictions.

 

6.
Terms and Conditions of Awards.

 

(a)
Type of Awards. The Administrator is authorized under the Plan to award any type of arrangement to an Employee, Director or Consultant
that is not inconsistent with the provisions of the Plan and that by its terms involves or might involve the issuance of (i) Shares,
(ii) an Option, a SAR or similar right with a fixed or variable price related to the Fair Market Value of the Shares and with
an exercise or conversion privilege related to the passage of time, the occurrence of one or more events, or the satisfaction
of performance criteria or other conditions, or (iii) any other security with the value derived from the value of the Shares.
Such awards include, without limitation, Options, SARs, sales or bonuses of Restricted Stock, Dividend Equivalent Rights, Performance
Units or Performance Shares, and an Award may consist of one such security or benefit, or two (2) or more of them in any combination
or alternative.

 

(b)
Designation of Award. Each Award shall be designated in the Award Agreement. In the case of an Option, the Option shall be designated
as either an Incentive Stock Option or a Non-Qualified Stock Option. However, notwithstanding such designation, to the extent
that the aggregate Fair Market Value of Shares subject to Options designated as Incentive Stock Options which become exercisable
for the first time by a Grantee during any calendar year (under all plans of the Company or any Parent or Subsidiary) exceeds
$100,000, such excess Options, to the extent of the Shares covered thereby in excess of the foregoing limitation, shall be treated
as Non-Qualified Stock Options. For this purpose, Incentive Stock Options shall be taken into account in the order in which they
were granted, and the Fair Market Value of the Shares shall be determined as of the date the Option with respect to such Shares
is granted.

 

    	 	5	 

     

    

 

(c)
Conditions of Award. Subject to the terms of the Plan, the Administrator shall determine the provisions, terms, and conditions
of each Award including, but not limited to, the Award vesting schedule, repurchase provisions, rights of first refusal, forfeiture
provisions, form of payment (cash, Shares, or other consideration, including cashless exercise) upon settlement of the Award,
payment contingencies, and satisfaction of any performance criteria. The performance criteria established by the Administrator
may be based on any one of, or combination of, increase in share price, earnings per share, total stockholder return, return on
equity, return on assets, return on investment, net operating income, cash flow, revenue, economic value added, personal management
objectives, or other measure of performance selected by the Administrator. Partial achievement of the specified criteria may result
in a partial payment or vesting as specified in the Award Agreement.

 

(d)
Acquisitions and Other Transactions. The Administrator may issue Awards under the Plan in settlement, assumption or substitution
for, outstanding awards or obligations to grant future awards in connection with the Company or a Related Entity acquiring another
entity, an interest in another entity or an additional interest in a Related Entity whether by merger, stock purchase, asset purchase
or other form of transaction.

 

(e)
Deferral of Award Payment. The Administrator may establish one or more programs under the Plan to permit selected Grantees the
opportunity to elect to defer receipt of consideration upon exercise of an Award, satisfaction of performance criteria, or other
event that absent the election would entitle the Grantee to payment or receipt of Shares or other consideration under an Award.
The Administrator may establish the election procedures, the timing of such elections, the mechanisms for payments of, and accrual
of interest or other earnings, if any, on amounts, Shares or other consideration so deferred, and such other terms, conditions,
rules and procedures that the Administrator deems advisable for the administration of any such deferral program.

 

(f)
Award Exchange Programs. The Administrator may establish one or more programs under the Plan to permit selected Grantees to exchange
an Award under the Plan for one or more other types of Awards under the Plan on such terms and conditions as determined by the
Administrator from time to time.

 

(g)
Separate Programs. The Administrator may establish one or more separate programs under the Plan for the purpose of issuing particular
forms of Awards to one or more classes of Grantees on such terms and conditions as determined by the Administrator from time to
time.

 

(h)
Early Exercise. The Award Agreement may, but need not, include a provision whereby the Grantee may elect at any time while an
Employee, Director or Consultant to exercise any part or all of the Award prior to full vesting of the Award. Any unvested Shares
received pursuant to such exercise may be subject to a repurchase right in favor of the Company or a Related Entity or to any
other restriction the Administrator determines to be appropriate.

 

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

 

(j)
Transferability of Awards. Except as otherwise provided in this Section, all Awards under the Plan shall be nontransferable and
shall not be assignable, alienable, saleable or otherwise transferable by the Grantee other than by will or the laws of descent
and distribution except pursuant to a domestic relations order entered by a court of competent jurisdiction. Notwithstanding the
preceding sentence, the Board or the Committee may provide that any Award of Non-Qualified Stock Options may be transferable by
the recipient to family members or family trusts established by the Grantee. The Board or the Committee may also provide that,
in the event that a Grantee terminates employment with the Company to assume a position with a governmental, charitable, educational
or similar non-profit institution, a third party, including but not limited to a “blind” trust, may be authorized
by the Board or the Committee to act on behalf of and for the benefit of the respective Grantee with respect to any outstanding
Awards. Except as otherwise provided in this Section, during the life of the Grantee, Awards under the Plan shall be exercisable
only by him or her except as otherwise determined by the Board or the Committee. In addition, if so permitted by the Board or
the Committee, a Grantee may designate a beneficiary or beneficiaries to exercise the rights of the Grantee and receive any distributions
under the Plan upon the death of the Grantee.

 

    	 	6	 

     

    

 

(k)
Time of Granting Awards. The date of grant of an Award shall for all purposes be the date on which the Administrator makes the
determination to grant such Award, or such other date as is determined by the Administrator. Notice of the grant determination
shall be given to each Employee, Director or Consultant to whom an Award is so granted within a reasonable time after the date
of such grant.

 

7.
Award Exercise or Purchase Price, Consideration, Taxes and Reload Options.

 

(a)
Exercise or Purchase Price. The exercise or purchase price, if any, for an Award shall be as follows:

 

(i)
In the case of an Incentive Stock Option: (A) granted to an Employee who, at the time of the grant of such Incentive Stock Option
owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be not less than one hundred ten percent (110%) of the Fair Market Value per Share
on the date of grant; or (B) granted to any Employee other than an Employee described in the preceding clause, the per Share exercise
price shall be not less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.

 

(ii)
In the case of a Non-Qualified Stock Option, the per Share exercise price shall be not less than one hundred percent (100%) of
the Fair Market Value per Share on the date of grant unless otherwise determined by the Administrator.

 

(iii)
In the case of other Awards, such price as is determined by the Administrator.

 

(iv)
Notwithstanding the foregoing provisions of this Section 7(a), in the case of an Award issued pursuant to Section 6(d),
above, the exercise or purchase price for the Award shall be determined in accordance with the principles of Section 424(a)
of the Code.

 

(b)
Consideration. Subject to Applicable Laws, the consideration to be paid for the Shares to be issued upon exercise or purchase
of an Award including the method of payment, shall be determined by the Administrator (and, in the case of an Incentive Stock
Option, shall be determined at the time of grant). In addition to any other types of consideration the Administrator may determine,
the Administrator is authorized to accept as consideration for Shares issued under the Plan the following, provided that the portion
of the consideration equal to the par value of the Shares must be paid in cash or other legal consideration permitted by the applicable
laws of the jurisdiction in which the Company is then incorporated.

 

(i)
cash;

 

(ii)
check;

 

(iii)
delivery of Grantee’s promissory note with such recourse, interest, security, and redemption provisions as the Administrator
determines is appropriate;

 

(iv)
surrender of Shares or delivery of a properly executed form of attestation of ownership of Shares as the Administrator may require
including withholding of Shares otherwise deliverable upon exercise of the Award) which have a Fair Market Value on the date of
surrender or attestation equal to the aggregate exercise price of the Shares as to which said Award shall be exercised (but only
to the extent that such exercise of the Award would not result in an accounting compensation charge with respect to the Shares
used to pay the exercise price unless otherwise determined by the Administrator);

 

(v)
with respect to options, payment through a broker-dealer sale and remittance procedure pursuant to which the Grantee (A) shall
provide written instructions to a Company designated brokerage firm to effect the immediate sale of some or all of the purchased
Shares and remit to the Company, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate
exercise price payable for the purchased Shares and (B) shall provide written directives to the Company to deliver the certificates
for the purchased Shares directly to such brokerage firm in order to complete the sale transaction; or

 

    	 	7	 

     

    

 

(vi)
with respect to options provided there is then an established market for the Common Stock, by a “cashless exercise”
as a result of which the Grantee shall be entitled to receive that number of shares of Common Stock equal to the quotient of (i)
the number of Options surrendered for exercise and (ii) the difference between the Fair Market Value (determined in accordance
with clause (i) of Section 2(t) hereof) and the exercise price of the Option, in which case the number of Options surrendered
for exercise shall be cancelled;

 

(vii)
any combination of the foregoing methods of payment.

 

(c)
Taxes. No Shares shall be delivered under the Plan to any Grantee or other person until such Grantee or other person has made
arrangements acceptable to the Administrator for the satisfaction of any foreign, federal, state, or local income and employment
tax withholding obligations, including, without limitation, obligations incident to the receipt of Shares or the disqualifying
disposition of Shares received on exercise of an Incentive Stock Option. Upon exercise of an Award, the Company shall withhold
or collect from Grantee an amount sufficient to satisfy such tax obligations.

 

(d)
Reload Options. In the event the exercise price or tax withholding of an Option is satisfied by the Company or the Grantee’s
employer withholding Shares otherwise deliverable to the Grantee, the Administrator may issue the Grantee an additional Option,
with terms identical to the Award Agreement under which the Option was exercised, but at an exercise price as determined by the
Administrator in accordance with the Plan.

 

8.
Exercise of Award.

 

	 	(a)	Procedure for Exercise; Rights as a Stockholder.
	 	 	 	 
	 	 	(i)	Any
    Award granted hereunder shall be exercisable at such times and under such conditions as determined by the Administrator under
    the terms of the Plan and specified in the Award Agreement.
	 	 	 	 
	 	 	(ii)	An
    Award shall be deemed to be exercised upon the later of (x) receipt by the Company of written notice of such exercise in accordance
    with the terms of the Award by the person entitled to exercise the Award and (y) full payment for the Shares with respect
    to which the Award is exercised, including, to the extent selected, use of the broker-dealer sale and remittance procedure
    to pay the purchase price as provided in Section 7(b)(v).
	 	 	 	 
	 	 	(iii)	Until
    the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of
    the Company) of the stock certificate evidencing such Shares, no right to vote or receive dividends or any other rights as
    a stockholder shall exist with respect to Shares subject to an Award, notwithstanding the exercise of an Option or other Award.
    The Company shall issue (or cause to be issued) such stock certificate promptly upon exercise of the Award. No adjustment
    will be made for a dividend or other right for which the record date is prior to the date the stock certificate is issued,
    except as provided in the Award Agreement or Section 10, below.

 

	 	(b)	Exercise of Award Following Termination of Continuous Service.

 

	 	 	(i)	An
    Award may not be exercised after the termination date of such Award set forth in the Award Agreement and may be exercised
    following the termination of a Grantee’s Continuous Service only to the extent provided in the Award Agreement.
	 	 	 	 
	 	 	(ii)	Where
    the Award Agreement permits a Grantee to exercise an Award following the termination of the Grantee’s Continuous Service
    for a specified period, the Award shall terminate to the extent not exercised on the last day of the specified period or the
    last day of the original term of the Award, whichever occurs first.
	 	 	 	 
	 	 	(iii)	Any
    Award designated as an Incentive Stock Option to the extent not exercised within the time permitted by law for the exercise
    of Incentive Stock Options following the termination of a Grantee’s Continuous Service shall convert automatically to
    a Non-Qualified Stock Option and thereafter shall be exercisable as such to the extent exercisable by its terms for the period
    specified in the Award Agreement.
	 	 	 	 
	 	 	(c)	Buyout
    Provisions. The Administrator may at any time offer to buy out for a payment in cash or Shares, an Award previously granted,
    based on such terms and conditions as the Administrator shall establish and communicate to the Grantee at the time that such
    offer is made.

 

    	 	8	 

     

    

 

9.
Conditions Upon Issuance of Shares.

 

	 	(d)	Shares
    shall not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance and delivery of
    such Shares pursuant thereto shall comply with all Applicable Laws, and shall be further subject to the approval of counsel
    for the Company with respect to such compliance.
	 	 	 
	 	(e)	As
    a condition to the exercise of an Award, the Company may require the person exercising such Award to represent and warrant
    at the time of any such exercise that the Shares are being purchased only for investment and without any present intention
    to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required by any
    Applicable Laws.

 

10.
Adjustments Upon Changes in Capitalization. Subject to any required action by the stockholders of the Company, the Administrator
may, in its discretion, proportionately adjust the number of Shares covered by each outstanding Award, and the number of Shares
which have been authorized for issuance under the Plan but as to which no Awards have yet been granted or which have been returned
to the Plan, the exercise or purchase price of each such outstanding Award, as well as any other terms that the Administrator
determines require adjustment for (a) any increase or decrease in the number of issued Shares resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the Shares, (b) any other increase or decrease in the number of
issued Shares effected without receipt of consideration by the Company, or (c) as the Administrator may determine in its discretion,
any other transaction with respect to Common Stock to which Section 424(a) of the Code applies; provided, however that conversion
of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.”
Such adjustment shall be made by the Administrator and its determination shall be final, binding and conclusive. Except as the
Administrator determines, 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 hereof shall be made with respect to, the number or price of Shares
subject to an Award.

 

11.
Corporate Transactions and Related Entity Dispositions. Except as may be provided in an Award Agreement:

 

(a)
The Administrator shall have the authority, exercisable either in advance of any actual or anticipated Corporate Transaction or
Related Entity Disposition or at the time of an actual Corporate Transaction or Related Entity Disposition and exercisable at
the time of the grant of an Award under the Plan or any time while an Award remains outstanding, to provide for the full automatic
vesting and exercisability of one or more outstanding unvested Awards under the Plan and the release from restrictions on transfer
and repurchase or forfeiture rights of such Awards in connection with a Corporate Transaction or Related Entity Disposition, on
such terms and conditions as the Administrator may specify. The Administrator also shall have the authority to condition any such
Award vesting and exercisability or release from such limitations upon the subsequent termination of the Continuous Service of
the Grantee within a specified period following the effective date of the Corporate Transaction or Related Entity Disposition.
Effective upon the consummation of a Corporate Transaction or Related Entity Disposition, all outstanding Awards under the Plan,
shall remain fully exercisable until the expiration or sooner termination of the Award.

 

(b)
The portion of any Incentive Stock Option accelerated under this Section 11 in connection with a Corporate Transaction or Related
Entity Disposition shall remain exercisable as an Incentive Stock Option under the Code only to the extent the $ 100,000 dollar
limitation of Section 422(d) of the Code is not exceeded. To the extent such dollar limitation is exceeded, the accelerated excess
portion of such Option shall be exercisable as a Non-Qualified Stock Option.

 

    	 	9	 

     

    

 

12.
Effective Date and Term of Plan. The Plan shall become effective upon the earlier to occur of its adoption by the Board or its
approval by the stockholders of the Company. It shall continue in effect for a term of ten (10) years unless sooner terminated.
Subject to Section 13 below, and Applicable Laws, Awards may be granted under the Plan upon its becoming effective.

 

13.
Amendment, Suspension or Termination of the Plan.

 

(a)
The Board may at any time amend, suspend or terminate the Plan. To the extent necessary to comply with Applicable Laws, the Company
shall obtain stockholder approval of any Plan amendment in such a manner and to such a degree as required.

 

(b)
No Award may be granted during any suspension of the Plan or after termination of the Plan.

 

(c)
Any amendment, suspension or termination of the Plan (including termination of the Plan under Section 12, above) shall not affect
Awards already granted, and such Awards shall remain in full force and effect as if the Plan had not been amended, suspended or
terminated, unless mutually agreed otherwise between the Grantee and the Administrator, which agreement must be in writing and
signed by the Grantee and the Company.

 

14.
Reservation of Shares.

 

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

 

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

 

15.
No Effect on Terms of Employment/Consulting Relationship. The Plan shall not confer upon any Grantee any right with respect to
the Grantee’s Continuous Service, nor shall it interfere in any way with his or her right or the Company’s right to
terminate the Grantee’s Continuous Service at any time, with or without cause.

 

16.
Unfunded Plan. Unless otherwise determined by the Board or the Committee, the Plan shall be unfunded and shall not create (or
construed to create) a trust or a separate fund or funds. The Plan shall not establish any fiduciary relationship between the
Company and any Grantee or other person. To the extent any person holds any rights by virtue of an Award granted under the Plan,
such right (unless otherwise determined by the Board or the Committee) shall be no greater than the right of an unsecured general
creditor of the Company.

 

17.
No Effect on Retirement and Other Benefit Plans. Except as specifically provided in a retirement or other benefit plan of the
Company or a Related Entity, Awards shall not be deemed compensation for purposes of computing benefits or contributions under
any retirement plan of the Company or a Related Entity, and shall not affect any benefits under any other benefit plan of any
kind or any benefit plan subsequently instituted under which the availability or amount of benefits is related to level of compensation.
The Plan is not a “Retirement Plan” or “Welfare Plan” under the Employee Retirement Income Security Act
of 1974, as amended.

 

18.
Stockholder Approval. The grant of Incentive Stock Options under the Plan shall be subject to approval by the stockholders of
the Company within twelve (12) months before or after the date the Plan is adopted by the Board excluding Incentive Stock Options
issued in substitution for outstanding Incentive Stock Options pursuant to Section 424(a) of the Code. Such stockholder approval
shall be obtained in the degree and manner required under Applicable Laws. The Administrator may grant Incentive Stock Options
under the Plan prior to approval by the stockholders, but until such approval is obtained, no such Incentive Stock Option shall
be exercisable. In the event that stockholder approval is not obtained within the twelve (12) month period provided above, all
Incentive Stock Options previously granted under the Plan shall be exercisable as Non-Qualified Stock Options.

 

    	 	10

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00290-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00290-of-00352.parquet"}]]