<SEC-DOCUMENT>0001683168-18-002253.txt : 20180810
<SEC-HEADER>0001683168-18-002253.hdr.sgml : 20180810
<ACCEPTANCE-DATETIME>20180810160446
ACCESSION NUMBER:		0001683168-18-002253
CONFORMED SUBMISSION TYPE:	S-8
PUBLIC DOCUMENT COUNT:		7
FILED AS OF DATE:		20180810
DATE AS OF CHANGE:		20180810
EFFECTIVENESS DATE:		20180810

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			APPLIANCE RECYCLING CENTERS OF AMERICA INC /MN
		CENTRAL INDEX KEY:			0000862861
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-HOME FURNITURE, FURNISHINGS & EQUIPMENT STORES [5700]
		IRS NUMBER:				411454591
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			0103

	FILING VALUES:
		FORM TYPE:		S-8
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-226775
		FILM NUMBER:		181008861

	BUSINESS ADDRESS:	
		STREET 1:		175 JACKSON AVE N
		STREET 2:		SUITE 102
		CITY:			MINNEAPOLIS
		STATE:			MN
		ZIP:			55343
		BUSINESS PHONE:		9529309000

	MAIL ADDRESS:	
		STREET 1:		175 JACKSON AVE N
		STREET 2:		SUITE 102
		CITY:			MINNEAPOLIS
		STATE:			MN
		ZIP:			55343
</SEC-HEADER>
<DOCUMENT>
<TYPE>S-8
<SEQUENCE>1
<FILENAME>arca_s8.htm
<DESCRIPTION>FORM S-8
<TEXT>
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<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">As filed with the Securities and Exchange
Commission on August 10, 2018</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">Registration No. 333-______</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION</B><BR>
<B>WASHINGTON, DC 20549</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FORM S-8</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>REGISTRATION STATEMENT</B><BR>
<I>UNDER</I><BR>
<I>THE SECURITIES ACT OF 1933</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 12pt"><B>APPLIANCE
RECYCLING CENTERS OF AMERICA, INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Exact name of registrant as specified in
its charter)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; text-align: center; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Nevada</B></FONT></TD>
    <TD STYLE="width: 50%; text-align: center; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>85-0206668</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(State or other jurisdiction of incorporation or organization)</FONT></TD>
    <TD STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(I.R.S. Employer Identification No.)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>175 Jackson Avenue North Suite 102</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Minneapolis, Minnesota 55343</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Address of Principal Executive Offices)
(Zip Code)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Appliance Recycling Centers of America,
Inc. 2016 Equity Incentive Plan</B><BR>
(Full title of the plan)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Tony Isaac<BR>
Chief Executive Officer<BR>
Appliance Recycling Centers of America, Inc.<BR>
175 Jackson Avenue North, Suite 102<BR>
Minneapolis, Minnesota 55343</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(952) 930-9000</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="background-color: white">(Name
and address and telephone number, including area code, of agent for service)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><I>Copy to:</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><I></I></B>
<B>Michael J. Stein, Esq.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Corporate Secretary<BR>
Appliance Recycling Centers of America, Inc.<BR>
175 Jackson Avenue North, Suite 102<BR>
Minneapolis, Minnesota 55343</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(952) 930-9000</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an
emerging growth company. See the definitions of &ldquo;large accelerated filer,&rdquo; &ldquo;accelerated filer,&rdquo;
&ldquo;smaller reporting company&rdquo; and &quot;emerging growth company&quot; in Rule 12b-2 of the Exchange Act.</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="width: 25%">&nbsp;</TD>
    <TD STYLE="width: 15%">&nbsp;</TD>
    <TD STYLE="width: 20%">&nbsp;</TD>
    <TD STYLE="width: 20%">&nbsp;</TD>
    <TD STYLE="width: 20%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Large accelerated filer</FONT> <FONT STYLE="font-family: Wingdings; font-size: 10pt">&uml;</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accelerated filer&nbsp;</FONT><FONT STYLE="font-family: Wingdings; font-size: 10pt">&uml;</FONT></TD>
    <TD STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Non-accelerated filer&nbsp;</FONT><FONT STYLE="font-family: Wingdings; font-size: 10pt">&uml;</FONT></TD>
    <TD STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Smaller reporting company&nbsp;</FONT><FONT STYLE="font-family: Wingdings; font-size: 10pt">x</FONT></TD>
    <TD STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Emerging growth company&nbsp;</FONT><FONT STYLE="font-family: Wingdings; font-size: 10pt">&uml;</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; text-align: center; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Do not check if a smaller reporting company)</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: center; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font-size: 10pt">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.&nbsp;&#9;</FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CALCULATION OF REGISTRATION FEE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 19%; border-top: black 2.25pt double; border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Title of securities to</B></FONT><BR>
<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>be registered</B></FONT></TD>
    <TD STYLE="width: 1%; border-top: black 2.25pt double; border-bottom: black 1pt solid; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 22%; border-top: black 2.25pt double; border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Amount to be</B></FONT><BR>
<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>registered (1)</B></FONT></TD>
    <TD STYLE="width: 1%; border-top: black 2.25pt double; border-bottom: black 1pt solid; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 18%; border-top: black 2.25pt double; border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Proposed maximum offering&nbsp;</B></FONT><BR>
<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>price per share (2)</B></FONT></TD>
    <TD STYLE="width: 1%; border-top: black 2.25pt double; border-bottom: black 1pt solid; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 19%; border-top: black 2.25pt double; border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Proposed maximum aggregate offering price (2)</B></FONT></TD>
    <TD STYLE="width: 1%; border-top: black 2.25pt double; border-bottom: black 1pt solid; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 18%; border-top: black 2.25pt double; border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Amount of registration fee</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: black 2.25pt double"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Common
    stock,  par value $0.001 per share</FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: black 2.25pt double">&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2,000,000 shares</FONT></TD>
    <TD STYLE="border-bottom: black 2.25pt double; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double; text-align: center">$0.65</TD>
    <TD STYLE="border-bottom: black 2.25pt double; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double; text-align: center">$1,300,000</TD>
    <TD STYLE="border-bottom: black 2.25pt double; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double; text-align: center">$161.85</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 5%"></TD><TD STYLE="width: 5%">(1)</TD><TD STYLE="width: 90%; text-align: left">Covers 2,000,000 shares of common stock of Appliance Recycling Centers of America,
                                                         Inc. (the &ldquo;Company&rdquo;),  par value $0.001 per share (&ldquo;Common Stock&rdquo;), approved for issuance under the
                                                         Appliance                                                          Recycling Centers of America, Inc. 2016 Equity Incentive
                                                         Plan (the &ldquo;2016 Plan&rdquo;) and, pursuant to Rule 416(a)
                                                         under the Securities Act of 1933, as amended (the &ldquo;Securities Act&rdquo;), this Registration Statement also covers an
                                                         indeterminate number of additional shares of Common Stock that may be offered and issued under the 2016 Plan to prevent
                                                         dilution resulting from stock splits, stock distributions or similar transactions.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 5%"></TD><TD STYLE="width: 5%; text-align: left">(2)</TD><TD STYLE="text-align: left; width: 90%">Estimated
solely for the purpose of calculating the amount of the registration fee pursuant to Rules 457(c) and 457(h) of the Securities
Act. The proposed maximum offering price per share, the proposed maximum aggregate offering price and the amount of registration
fee have been computed on the basis of the average high and low prices per share of the Company&rsquo;s Common Stock reported
on the Nasdaq Capital Market on August 8, 2018.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><BR>
</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PART I</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INFORMATION REQUIRED IN THE SECTION 10(a)
PROSPECTUS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The information specified in Item 1 and
Item 2 of Part I of Form S-8 is omitted from this Registration Statement on Form S-8 (the &ldquo;Registration Statement&rdquo;)
in accordance with the provisions of Rule 428 under the Securities Act of 1933, as amended (the &ldquo;Securities Act&rdquo;),
and the introductory note to Part I of Form S-8. The documents containing the information specified in Part I of Form S-8 will
be delivered to the participants in the Appliance Recycling Centers of America, Inc. 2016 Equity Incentive Plan (the &ldquo;Plan&rdquo;)
covered by this Registration Statement as specified by Rule 428(b)(1) under the Securities Act. Such documents are not required
to be, and are not, filed with the Securities and Exchange Commission (the &ldquo;Commission&rdquo;) either as part of this Registration
Statement or as a prospectus or prospectus supplement pursuant to Rule 424 under the Securities Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PART II</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><BR>
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Item 3. Incorporation of Documents by Reference.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The following documents filed with the Commission
by Appliance Recycling Centers of America, Inc. (the &ldquo;Registrant&rdquo;) pursuant to the Securities Act and the Securities
Exchange Act of 1934, as amended (the &ldquo;Exchange Act&rdquo;), are hereby incorporated by reference in this Registration Statement:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 40pt"></TD><TD STYLE="width: 20pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Registrant&rsquo;s Annual Report on Form 10-K for the fiscal year ended December 30, 2017;</FONT></TD>
</TR></TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 40pt"></TD><TD STYLE="width: 20pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Registrant&rsquo;s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2018;</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 40pt"></TD><TD STYLE="width: 20pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(3)</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                                                                                                                                                Registrant&rsquo;s Current Report on Form 8-K, as amended, as the case may be, filed with the Commission on January 5, 2018,
                                                                                                                                                                March
                                                                                                                                                                8,
                                                                                                                                                                2018,
                                                                                                                                                                March
                                                                                                                                                                13,
                                                                                                                                                                2018, March 22, 2018, March 28, 2018, April 24, 2018, and April 26, 2018, May 25, 2018, July 5, 2018, and July 5, 2018;
                                                                                                                                                                and</FONT></TD>
</TR></TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 40pt"></TD><TD STYLE="width: 20pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(4)</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
description of the Registrant&rsquo;s Common Stock set forth in our Registration Statement on Form S-2 (Registration No. 333-123005),
including any amendments thereto or reports filed for the purpose of updating such description.</FONT></TD>
</TR></TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">All documents hereafter filed by the Company
pursuant to Sections 13(a), 13(c), 14 or 15(d)&nbsp;of the Securities Exchange Act of 1934, as amended (the &ldquo;1934 Act&rdquo;)
(other than current reports on Form&nbsp;8-K containing Regulation FD disclosure furnished under either Item 2.02 or Item 7.01,
including any exhibits relating to information furnished under either Item 2.02 or Item 7.01 of Form&nbsp;8-K) subsequent to the
date hereof and prior to the filing of a post-effective amendment which indicates that all the securities offered hereby have been
sold or which deregisters all securities remaining unsold shall be deemed to be incorporated herein by reference and to be a part
hereof from the respective dates of filing of such documents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Any statement contained in a document incorporated
or deemed to be incorporated by reference in this Registration Statement shall be deemed to be modified or superseded for purposes
of this Registration Statement to the extent that a statement contained in this Registration Statement or in any other subsequently
filed document that also is or is deemed to be incorporated by reference in this Registration Statement modifies or supersedes
such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute
a part of this Registration Statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Item 4. Description of Securities.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Not applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Item 5. Interests of Named Experts and Counsel.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Not applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Item 6. Indemnification of Directors and Officers. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Nevada Revised Statutes provide that
a corporation may indemnify its officers and directors against expenses actually and reasonably incurred in the event an officer
or director is made a party or threatened to be made a party to an action (other than an action brought by or in the right of the
corporation as discussed below) by reason of his or her official position with the corporation provided the director or officer
(1) is not liable for the breach of any fiduciary duties as a director or officer involving intentional misconduct, fraud or a
knowing violation of the law or (2) acted in good faith and in a manner he or she reasonably believed to be in the best interests
of the corporation and, with respect to any criminal actions, had no reasonable cause to believe his or her conduct was unlawful.
A corporation may indemnify its officers and directors against expenses, including amounts paid in settlement, actually and reasonably
incurred in the event an officer or director is made a party or threatened to be made a party to an action brought by or in the
right of the corporation by reason of his or her official position with the corporation, provided the director or officer (1) is
not liable for the breach of any fiduciary duties as a director or officer involving intentional misconduct, fraud or a knowing
violation of the laws or (2) acted in good faith and in a manner he or she reasonably believed to be in the best interests of the
corporation. The Nevada Revised Statutes further provides that a corporation generally may not indemnify an officer or director
if it is determined by a court that such officer or director is liable to the corporation or responsible for any amounts paid to
the corporation as a settlement, unless a court also determines that the officer or director is entitled to indemnification in
light of all of the relevant facts and circumstances. The Nevada Revised Statutes require a corporation to indemnify an officer
or director to the extent he or she is successful on the merits or otherwise successfully defends the action.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Article 10 of the Company&rsquo;s Articles
of Incorporation (the &ldquo;Articles&rdquo;) provides that the Company shall, to the maximum extent and in the manner permitted
by the NRS, (i) indemnify and hold harmless any and all persons whom it shall have power to indemnify under the NRS (including
directors and officers) from and against any and all liabilities (including expenses) imposed upon or reasonably incurred by him
or her in connection with any action, suit or other proceeding in which he or she may be involved or with which he or she may be
threatened, or other matters referred to or in or covered by such provisions both as to action in his or her official capacity
and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director
or officer of the Company. In addition, Article 9 of the Articles provides for the elimination of personal liability of directors
and officers of the Company to the Company or its stockholders to the fullest extent permitted by the NRS, as amended and supplemented.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Article 5 of the Company&rsquo;s Bylaws
(the &ldquo;Bylaws&rdquo;) contains similar provisions and sets forth a procedure by which officers or directors may seek indemnification
from the Company. The Bylaws provide that individuals entitled to indemnification under Article 5 thereof can bring suit against
the Company for such indemnity if the Company does not provide it within sixty days of receipt of a claim (the period is twenty
days if the claim is for the advancement of expenses). Additionally, the Bylaws limit indemnification in situations where officers
or directors actually collect insurance payments for amounts that would otherwise be subject to indemnification and where proceedings
are settled without the Company&rsquo;s consent. The Bylaws further provide that Article 5 thereof is deemed to be a contract between
the Company and its officers and directors for the duration of its effectiveness. Finally, the Bylaws provide that the Company
may elect to indemnify its employees and other agents to the same or a lesser extent as its officers and directors, and they require
that any potential indemnitee provide written notice to the Company of proceedings or claims that might give rise to indemnification
rights under Article 5.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Company maintains a general liability
insurance policy that covers certain liabilities of directors and officers of the Company arising out of claims based on acts or
omissions in their capacities as directors or officers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Item 7. Exemption from Registration Claimed.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Not Applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Item 8. Exhibits.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following exhibits are filed as part of this Registration
Statement:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: bottom; width: 25%; border-bottom: black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Exhibit Number</B></FONT></TD>
    <TD STYLE="vertical-align: top; width: 4%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 71%; border-bottom: black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Description</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.1</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/862861/000168316818000651/arca_8k-ex0303.htm" STYLE="-sec-extract: exhibit">Articles of Incorporation of Appliance Recycling Centers of America, Inc.</A> (incorporated herein by reference to Exhibit 3.3 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on March 13, 2018 (File No. 000-19621))</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.2</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/862861/000168316818000651/arca_8k-ex0304.htm" STYLE="-sec-extract: exhibit">Bylaws of Appliance Recycling Centers of America, Inc.</A> (incorporated herein by reference to Exhibit 3.4 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on March 13, 2018 (File No. 000-19621))</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.3</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="arca_ex0404.htm">Appliance Recycling Centers of America, Inc. 2016 Equity Incentive Plan</A></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5.1</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="arca_ex0501.htm">Opinion of Michael J. Stein, Esq., Corporate Secretary</A> </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">23.1</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="arca_ex2301.htm">Consent of SingerLewak LLP</A></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">23.2</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="arca_ex2302.htm">Consent of Anton &amp; Chia, LLP</A></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">23.3</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consent of Michael J. Stein, Esq., Corporate Secretary (included in Exhibit 5.1)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">24.1</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Power of Attorney (included on the signature page of this Registration Statement)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Item 9. Undertakings.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(a) The undersigned registrant hereby undertakes:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(1) To file, during any period in which
offers or sales are being made, a post-effective amendment to this registration statement:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(ii) To reflect in the prospectus any facts
or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the &ldquo;Calculation
of Registration Fee&rdquo; table in the effective registration statement; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(iii) To include any material information
with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such
information in the registration statement;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">provided, however, that the undertakings set forth in paragraphs
(a)(1)(i) and (a)(1)(ii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs
is contained in reports filed with or furnished to the SEC by the registrant pursuant to Section 13 or Section 15(d) of the Exchange
Act that are incorporated by reference in the registration statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(2) That, for the purpose of determining
any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide
offering thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(3) To remove from registration by means
of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(b) The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, each filing of the registrant&rsquo;s annual report pursuant to Section
13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan&rsquo;s annual report
pursuant to Section 15(d) of the Securities Exchange Act) that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(c) Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person
of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SIGNATURES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Pursuant to the requirements of the Securities
Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing
on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Minneapolis, State of Minnesota, on August 10, 2018.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 50%">&nbsp;</TD>
    <TD STYLE="width: 50%">APPLIANCE RECYCLING CENTERS OF AMERICA, INC.</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>By: <U>/s/ Tony Isaac&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tony Isaac</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Chief Executive Officer</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>POWER OF ATTORNEY AND SIGNATURES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="background-color: white">KNOW
ALL PERSONS BY THESE PRESENTS, that the undersigned directors and officers of the Registrant, which is filing a Registration Statement
on Form&nbsp;S-8&nbsp;with the Securities and Exchange Commission, Washington, D.C. 20549 under the provisions of the Securities
Act of 1933 hereby constitute and appoint Tony Isaac, the individual&rsquo;s true and lawful&nbsp;attorney-in-fact&nbsp;and agent,
with full power of substitution and resubstitution, for the person and in his or her name, place and stead, in any and all capacities,
to sign this Registration Statement and any or all amendments or supplements to this Registration Statement, including post-effective
amendments, and to file the same, with all exhibits thereto, and other documents in connection therewith with the Securities and
Exchange Commission, and does hereby grant unto said&nbsp;attorney-in-fact&nbsp;and agent, full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes
as he or she might or could do in person, hereby ratifying and confirming all that said&nbsp;attorney-in-fact&nbsp;and agent them,
or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof</FONT>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 27%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>Signature</U></B></FONT></TD>
    <TD STYLE="width: 4%">&nbsp;</TD>
    <TD STYLE="width: 54%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>Title</U></B></FONT></TD>
    <TD STYLE="width: 15%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>Date</U></B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/ Tony Isaac</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chief Executive Officer (Principal Executive Officer) and Director</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">August 10, 2018</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Tony Isaac</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/ Virland A. Johnson</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chief Financial Officer (Principal Financial and Accounting Officer)</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">August 10, 2018</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Virland A. Johnson</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/ Richard D. Butler, Jr.</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Director</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">August 10, 2018</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Richard D. Butler, Jr.</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/ Dennis Gao</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Director</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">August 10, 2018</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dennis Gao</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/ Timothy M. Matula</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Director</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">August 10, 2018</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Timothy M. Matula</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>


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<DOCUMENT>
<TYPE>EX-4.4
<SEQUENCE>2
<FILENAME>arca_ex0404.htm
<DESCRIPTION>2016 EQUITY INCENTIVE PLAN
<TEXT>
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<P STYLE="margin: 0; text-align: right"><B>Exhibit 4.4</B></P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"></P>



<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>APPLIANCE RECYCLING CENTERS OF AMERICA,
INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>2016 EQUITY INCENTIVE PLAN </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECTION 1.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>DEFINITIONS</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As used herein, the
following terms shall have the meanings indicated below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;Administrator&rdquo;
shall mean the Board of Directors of the Company, or one or more Committees appointed by the Board of Directors, as the case may
be.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;Affiliate(s)&rdquo;
shall mean a Parent or Subsidiary of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;Agreement&rdquo;
shall mean the written agreement entered into by the Participant and the Company evidencing the grant of an Award. Each Agreement
shall be in such form as may be approved from time to time by the Administrator and may vary from Participant to Participant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;Annual
Award Limit&rdquo; or &ldquo;Annual Award Limits&rdquo; shall have the meaning set forth in Section 6(d) of the Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;Award&rdquo;
shall mean any grant pursuant to the Plan of an Incentive Stock Option, Nonqualified Stock Option, Restricted Stock Award or Restricted
Stock Unit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;Change
of Control&rdquo; shall mean the occurrence, in a single transaction or in a series of related transactions, of any one or more
of the events in subsections (i) through (iv) below. For purposes of this definition, a person, entity or group shall be deemed
to &ldquo;Own,&rdquo; to have &ldquo;Owned,&rdquo; to be the &ldquo;Owner&rdquo; of, or to have acquired &ldquo;Ownership&rdquo;
of securities if such person, entity or group directly or indirectly, through any contract, arrangement, understanding, relationship
or otherwise, has or shares Voting Power, which includes the power to vote or to direct the voting, with respect to such securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: justify; text-indent: 0.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
person, entity or group becomes the Owner, directly or indirectly, of securities of the Company representing more than fifty percent
(50%) of the combined Voting Power of the Company&rsquo;s then outstanding securities other than by virtue of a merger, consolidation,
exchange, reorganization or similar transaction. Notwithstanding the foregoing, a Change of Control shall not be deemed to occur
(A) on account of the acquisition of securities of the Company by an investor, any affiliate thereof or any other person, entity
or group from the Company in a transaction or series of related transactions the primary purpose of which is to obtain financing
for the Company through the issuance of equity securities or (B) solely because the level of Ownership held by any person, entity
or group (the &ldquo;Subject Person&rdquo;) exceeds the designated percentage threshold of the Voting Power as a result of a repurchase
or other acquisition of voting securities by the Company reducing the number of shares outstanding, provided that if a Change of
Control would occur (but for the operation of this sentence) as a result of the acquisition of voting securities by the Company,
and after such share acquisition, the Subject Person becomes the Owner of any additional voting securities that, assuming the repurchase
or other acquisition had not occurred, increases the percentage of the then outstanding voting securities Owned by the Subject
Person over the designated percentage threshold, then a Change of Control shall be deemed to occur;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: justify; text-indent: 0.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There
is consummated a merger, consolidation, exchange, reorganization or similar transaction involving (directly or indirectly) the
Company and, immediately after the consummation of such merger, consolidation, exchange, reorganization or similar transaction,
the shareholders of the Company immediately prior thereto do not Own, directly or indirectly, either (A) outstanding voting securities
representing more than fifty percent (50%) of the combined outstanding Voting Power of the surviving entity in such merger, consolidation
or similar transaction or (B) more than fifty percent (50%) of the combined outstanding Voting Power of the parent of the surviving
entity in such merger, consolidation, exchange, reorganization or similar transaction, in each case in substantially the same proportions
as their Ownership of the outstanding voting securities of the Company immediately prior to such transaction;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: justify; text-indent: 0.5in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There
is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the total gross value of the
consolidated assets of the Company and its subsidiaries, other than a sale, lease, license or other disposition of all or substantially
all of the total gross value of the consolidated assets of the Company and its subsidiaries to an entity, more than fifty percent
(50%) of the combined Voting Power of the voting securities of which are Owned by shareholders of the Company in substantially
the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such sale, lease,
license or other disposition (for purposes of this Section 1(f)(iii), &ldquo;gross value&rdquo; means the value of the assets of
the Company or the value of the assets being disposed of, as the case may be, determined without regard to any liabilities associated
with such assets); or</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: justify; text-indent: 0.5in">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Individuals
who, at the beginning of any consecutive twelve-month period, are members of the Board (the &ldquo;Incumbent Board&rdquo;) cease
for any reason to constitute at least a majority of the members of the Board at any time during that consecutive twelve-month period;
provided, however, that if the appointment or election (or nomination for election) of any new Board member was approved or recommended
by a majority vote of the members of the Incumbent Board then still in office, such new member shall, for purposes of the Plan,
be considered as a member of the Incumbent Board.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the avoidance of doubt, the term &ldquo;Change
of Control&rdquo; shall not include a sale of assets, merger or other transaction effected exclusively for the purpose of changing
the domicile of the Company. To the extent required, the determination of whether a Change of Control has occurred shall be made
in accordance with Code Section 409A and the regulations, notices and other guidance of general applicability issued thereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;Close
of Business&rdquo; of a specified day shall mean 5:00 p.m., Central Time, without regard to whether such day is a Saturday, Sunday,
bank holiday, or other day on which no business is conducted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;Committee&rdquo;
shall mean a Committee of two or more Directors who shall be appointed by and serve at the pleasure of the Board. To the extent
necessary for compliance with Rule 16b-3, each of the members of the Committee shall be a &ldquo;non-employee director.&rdquo;
Solely for purposes of this Section 1(h), &ldquo;non-employee director&rdquo; shall have the same meaning as set forth in Rule
16b-3. Further, to the extent necessary for compliance with the limitations set forth in Internal Revenue Code Section 162(m),
each of the members of the Committee shall be an &ldquo;outside director&rdquo; within the meaning of Code Section 162(m) and the
regulations issued thereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;Common
Stock&rdquo; shall mean the common stock of the Company (subject to adjustment as provided in Section 13 of the Plan).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
&ldquo;Company&rdquo; shall mean Appliance Recycling Centers of America, Inc., a Minnesota corporation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;Consultant&rdquo;
shall mean any person, including an advisor, who is engaged by the Company or any Affiliate to render consulting or advisory services
and is compensated for such services; provided, however, that no person shall be considered a Consultant for purposes of the Plan
unless such Consultant is a natural person, renders bona fide services to the Company or any Affiliate, and such services 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&rsquo;s securities. For purposes of the Plan, &ldquo;Consultant&rdquo; shall also include a director
of an Affiliate who is compensated for services as a director.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(l)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;Covered
Employee&rdquo; shall mean any key salaried Employee who is or may become a &ldquo;Covered Employee,&rdquo; as defined in Code
Section 162(m), and who is designated, either as an individual Employee or class of Employees, by the Administrator within the
shorter of (i) ninety (90) days after the beginning of the Performance Period, or (ii) twenty-five percent (25%) of the Performance
Period has elapsed, as a &ldquo;Covered Employee&rdquo; under the Plan for such applicable Performance Period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(m)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;Director&rdquo;
shall mean a member of the Board of Directors of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(n)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;Effective
Date&rdquo; shall mean the date the Board of Directors of the Company approves the adoption of the Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(o)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;Employee&rdquo;
shall mean a common law employee of the Company or any Affiliate, including &ldquo;officers&rdquo; as defined by Section 16 of
the Exchange Act; provided, however, that service solely as a Director or Consultant, regardless of whether a fee is paid for such
service, shall not cause a person to be an Employee for purposes of the Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(p)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;Exchange
Act&rdquo; shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(q)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;Fair
Market Value&rdquo; of specified stock as of any date shall mean (i) if such stock is listed on the Nasdaq Global Select Market,
Nasdaq Global Market, Nasdaq Capital Market or an established stock exchange, the price of such stock at the close of the regular
trading session of such market or exchange on such date, as reported by The Wall Street Journal or a comparable reporting service,
or, if no sale of such stock shall have occurred on such date, on the next preceding date on which there was a sale of stock; (ii)
if such stock is not so listed on the Nasdaq Global Select Market, Nasdaq Global Market, Nasdaq Capital Market, or an established
stock exchange, the average of the closing &ldquo;bid&rdquo; and &ldquo;asked&rdquo; prices quoted by the OTC Bulletin Board, the
National Quotation Bureau, or any comparable reporting service on such date or, if there are no quoted &ldquo;bid&rdquo; and &ldquo;asked&rdquo;
prices on such date, on the next preceding date for which there are such quotes; or (iii) if such stock is not publicly traded
as of such date, the per share value as determined by the Board or the Committee in its sole discretion by applying principles
of valuation with respect to Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(r)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;Incentive
Stock Option&rdquo; shall mean an Option granted pursuant to Section 9 of the Plan that is intended to satisfy the provisions of
Code Section 422, or any successor provision.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(s)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;Insider&rdquo;
shall mean an individual who is, on the relevant date, an officer or Director of the Company, or an individual who beneficially
owns more than ten percent (10%) of any class of equity securities of the Company that is registered under Section 12 of the Exchange
Act, as determined by the Board of Directors in accordance with Section 16 of the Exchange Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(t)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
&ldquo;Internal Revenue Code&rdquo; or &ldquo;Code&rdquo; shall mean the Internal Revenue Code of 1986, as amended from time to
time. References to sections of the Code are intended to include applicable treasury regulations and successor statutes and regulations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(u)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;Option&rdquo;
shall mean an Incentive Stock Option or Nonqualified Stock Option granted pursuant to the Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;Nonqualified
Stock Option&rdquo; shall mean an Option granted pursuant to Section 10 of the Plan or an Option (or portion thereof) that does
not qualify as an Incentive Stock Option.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(w)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;Parent&rdquo;
shall mean any parent corporation of the Company within the meaning of Code Section 424(e), or any successor provision.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(x)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;Participant&rdquo;
shall mean an Employee to whom an Incentive Stock Option has been granted or an Employee, a Director, or a Consultant to whom a
Nonqualified Stock Option, Restricted Stock Award or Restricted Stock Unit has been granted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(y)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;Performance-Based
Compensation&rdquo; shall mean compensation under an Award that is intended to satisfy the requirements of Code Section 162(m)
for certain performance-based compensation paid to Covered Employees. Notwithstanding the foregoing, nothing in the Plan shall
be construed to mean that an Award which does not satisfy the requirements for performance-based compensation under Code Section
162(m) does not constitute performance-based compensation for other purposes, including Code Section 409A.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(z)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;Performance
Objective(s)&rdquo; shall mean one or more performance objectives set forth in Section 7 and established by the Administrator,
in its sole discretion, for Awards granted under the Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(aa)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;Performance
Period&rdquo; shall mean the period, established at the time any Award is granted or at any time thereafter, during which any Performance
Objectives specified by the Administrator with respect to such Award are to be measured.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(bb)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;Plan&rdquo;
means the Appliance Recycling Centers of America, Inc. 2016 Equity Incentive Plan, as amended hereafter from time to time, including
the form of Agreements as they may be modified by the Administrator from time to time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(cc)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;Restricted
Stock Award&rdquo; shall mean any grant of restricted shares of Common Stock pursuant to Section 11 of the Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(dd)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;Restricted
Stock Unit&rdquo; shall mean any grant of any restricted stock units pursuant to Section 12 of the Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(ee)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;Rule
16b-3&rdquo; shall mean Rule 16b-3, or any successor provision, as then in effect, of the General Rules and Regulations under the
Exchange Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(ff)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A &ldquo;Subsidiary&rdquo;
shall mean any subsidiary corporation of the Company within the meaning of Code Section 424(f), or any successor provision.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(gg)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;Voting
Power&rdquo; shall mean any and all classes of securities issued by the applicable entity which are entitled to vote in the election
of directors of the applicable entity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECTION 2.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>PURPOSE</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The purpose of the
Plan is to promote the success of the Company and its Affiliates by facilitating the employment and retention of competent personnel
and by furnishing incentives to those Employees, Directors, and Consultants upon whose efforts the success of the Company and its
Affiliates will depend to a large degree. It is the intention of the Company to carry out the Plan through the granting of Incentive
Stock Options, Nonqualified Stock Options, Restricted Stock Awards and Restricted Stock Units.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECTION 3.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>EFFECTIVE DATE AND DURATION OF PLAN</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Plan shall be effective
on the Effective Date; provided, however, that adoption of the Plan shall be and is expressly subject to the condition of approval
by the shareholders of the Company within twelve (12) months before or after the Effective Date. Although Awards may be granted
prior to the date the Plan is approved by the shareholders of the Company, any Incentive Stock Options granted after the Effective
Date shall be treated as Nonqualified Stock Options if shareholder approval is not obtained within such twelve-month period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Administrator may
grant Awards pursuant to the Plan from time to time until the Administrator discontinues or terminates the Plan; provided, however,
that in no event may Incentive Stock Options be granted pursuant to the Plan after the earlier of (i) the date the Administrator
discontinues or terminates the Plan, or (ii) the Close of Business on the day immediately preceding the tenth anniversary of the
Effective Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECTION 4.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>ADMINISTRATION</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Administration
by the Board of Directors or Committee(s)</U>. The Plan shall be administered by the Board of Directors of the Company (hereinafter
referred to as the &ldquo;Board&rdquo;); provided, however, that the Board may delegate some or all of the administration of the
Plan to a Committee or Committees. The Board and any Committee appointed by the Board to administer the Plan are collectively referred
to in the Plan as the &ldquo;Administrator.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Delegation
by Administrator</U>. The Administrator may delegate to one or more Committees and/or sub-Committees, or to one or more officers
of the Company and/or its Affiliates, or to one or more agents and/or advisors, such administrative duties or powers as it may
deem advisable. The Administrator or any Committees or individuals to whom it has delegated duties or powers as aforesaid may employ
one or more individuals to render advice with respect to any responsibility of the Administrator or such Committees or individuals
may have under the Plan. The Administrator may, by resolution, authorize one or more officers of the Company to do one or both
of the following on the same basis as can the Administrator: (i) designate Employees to be recipients of Awards and (ii) determine
the size of any such Awards; provided, however, (x) the Committee shall not delegate such responsibilities to any such officer
for Awards granted to an Employee who is considered an Insider; (y) the resolution providing such authorization sets forth the
total number of Awards such officer(s) may grant; and (z) the officer(s) shall report periodically to the Administrator regarding
the nature and scope of the Awards granted pursuant to the authority delegated.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Powers
of Administrator</U>. Except as otherwise provided herein, the Administrator shall have all of the powers vested in it under the
provisions of the Plan, including but not limited to exclusive authority to determine, in its sole discretion, whether an Award
shall be granted; the individuals to whom, and the time or times at which, Awards shall be granted; the number of shares subject
to each Award; the exercise price of Options granted hereunder; and the performance criteria, if any, and any other terms and conditions
of each Award. The Administrator shall have full power and authority to administer and interpret the Plan, to make and amend rules,
regulations and guidelines for administering the Plan, to prescribe the form and conditions of the respective Agreements evidencing
each Award (which may vary from Participant to Participant), to amend or revise Agreements evidencing any Award (to the extent
the amended terms would be permitted by the Plan and provided that no such revision or amendment, except as is authorized in Section
13, shall impair the terms and conditions of any Award which is outstanding on the date of such revision or amendment to the material
detriment of the Participant in the absence of the consent of the Participant), and to make all other determinations necessary
or advisable for the administration of the Plan (including to correct any defect, omission or inconsistency in the Plan or any
Agreement, to the extent permitted by law and the Plan). The Administrator&rsquo;s interpretation of the Plan, and all actions
taken and determinations made by the Administrator pursuant to the power vested in it hereunder, shall be conclusive and binding
on all parties concerned.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Limitation
on Liability; Actions of Committees</U>. No member of the Board or a Committee shall be liable for any action taken or determination
made in good faith in connection with the administration of the Plan. In the event the Board appoints a Committee as provided hereunder,
or the Administrator delegates any of its duties to another Committee or sub-Committee, any action of such Committee with respect
to the administration of the Plan shall be taken pursuant to a majority vote of the Committee members or pursuant to the written
resolution of all Committee members.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECTION 5.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>PARTICIPANTS</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Administrator may
grant Awards under the Plan to any Employee, Director, or Consultant; provided, however, that only Employees are eligible to receive
Incentive Stock Options. In designating Participants, the Administrator shall also determine the number of shares or cash units
to be optioned or awarded to each such Participant and any Performance Objectives applicable to Awards. The Administrator may from
time to time designate individuals as being ineligible to participate in the Plan. The power of the Administrator under this Section
5 shall be exercised from time to time in the sole discretion of the Administrator and without approval by the shareholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECTION 6.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>STOCK</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Number
of Shares Reserved</U>. The stock to be awarded or optioned under the Plan (the &ldquo;Share Authorization&rdquo;) shall consist
of authorized but unissued or reacquired shares of Common Stock. Subject to Section 13 of the Plan, the maximum aggregate number
of shares of Common Stock reserved and available for Awards under the Plan is Two Million (2,000,000) shares; provided, however,
that all shares of Stock reserved and available under the Plan shall constitute the maximum aggregate number of shares of Stock
that may be issued through Incentive Stock Options.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Share
Usage</U>. The following shares of Common Stock shall not reduce the Share Authorization and shall continue to be reserved and
available for Awards granted pursuant to the Plan: (i) all or any portion of any outstanding Restricted Stock Award or Restricted
Stock Unit that expires or is forfeited for any reason, or that is terminated prior to the vesting or lapsing of the risks of forfeiture
on such Award, and (ii) shares of Common Stock covered by an Award to the extent the Award is settled in cash. Any shares of Common
Stock withheld to satisfy tax withholding obligations on an Award, shares of Common Stock withheld to pay the exercise price of
an Option, and shares of Common Stock subject to a broker-assisted cashless exercise of an Option shall reduce the Share Authorization.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Annual
Award Limits</U>. Unless and until the Administrator determines that an Award to a Covered Employee shall not be Performance-Based
Compensation, the following limits (each, an &ldquo;Annual Award Limit,&rdquo; and collectively, &ldquo;Annual Award Limits&rdquo;)
shall apply to grants of such Awards under the Plan:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: justify; text-indent: 0.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Options</U>.
The maximum number of shares of Common Stock subject to Options granted in any one calendar year to any one Participant shall be,
in the aggregate, One Million (1,000,000) shares, subject to adjustment as provided in Section 13.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 20pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: justify; text-indent: 0.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Restricted
Stock Awards and Restricted Stock Units</U>. The maximum grant with respect Restricted Stock Awards and Restricted Stock Units
in any one calendar year to any one Participant shall be, in the aggregate, One Million (1,000,000) shares, subject to adjustment
as provided in Section 13.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECTION 7.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>PERFORMANCE OBJECTIVES</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Performance
Objectives</U>. For any Awards to Covered Employees that are intended to qualify as &ldquo;Performance-Based Compensation&rdquo;
under Code Section 162(m), the Performance Objectives shall be limited to any one, or a combination of, (i) revenue or net sales,
(ii) operating income, (iii) net income (before or after taxes), (iv) earnings per share, (v) earnings before or after taxes, interest,
depreciation and/or amortization, (vi) gross profit margin, (vii) return measures (including, but not limited to, return on invested
capital, assets, capital, equity, sales), (viii) increase in revenue or net sales, (ix) operating expense ratios, (x) operating
expense targets, (xi) productivity ratios, (xii) gross or operating margins, (xiii) cash flow (including, but not limited to, operating
cash flow, free cash flow, cash flow return on equity and cash flow return on investment), (xiv) working capital targets, (xv)
capital expenditures, (xvi) share price (including, but not limited to, growth measures and total shareholder return), (xvii) appreciation
in the fair market value or book value of the Common Stock, (xviii) debt to equity ratio or debt levels, and (xix) market share,
in all cases including, if selected by the Administrator, threshold, target and maximum levels.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Any Performance Objective
may be used to measure the performance of the Company and/or Affiliate, as a whole or with respect to any business unit, or any
combination thereof as the Administrator may deem appropriate, or any of the specified Performance Objectives as compared to the
performance of a group of competitor companies, or published or special index that the Administrator, in its sole discretion, deems
appropriate. The Administrator also has the authority to provide for accelerated vesting of any Award based on the achievement
of performance goals pursuant to the Performance Objectives; provided, however, that such authority shall be subject to Code Section
162(m) with respect to Awards intended to qualify as Performance-Based Compensation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Evaluation
of Performance Objectives</U>. The Administrator may provide in any Award based on Performance Objectives that any evaluation of
performance may include or exclude any of the following events that occurs during a Performance Period: (i) asset write-downs,
(ii) litigation or claim judgments or settlements, (iii) the effect of changes in tax laws, accounting principles, or other laws
or provisions affecting reported results, (iv) any reorganization and restructuring programs, (v) extraordinary nonrecurring items
as described in FASB Accounting Standards Codification 225-20&mdash;Extraordinary and Unusual Items and/or in Management's Discussion
and Analysis of financial condition and results of operations appearing in the Company's annual report to shareholders for the
applicable year, (vi) acquisitions or divestitures, and (vii) foreign exchange gains and losses. To the extent such inclusions
or exclusions affect Awards to Covered Employees, they shall be prescribed in a form that meets the requirements of Code Section
162(m) for deductibility.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Adjustment
of Performance-Based Compensation</U>. Awards that are intended to qualify as Performance-Based Compensation may not be adjusted
upward. The Administrator shall retain the discretion to adjust such Awards downward, either on a formula or discretionary basis
or any combination, as the Administrator determines.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Administrator
Discretion</U>. In the event that applicable tax and/or securities laws change to permit Administrator discretion to alter the
governing Performance Objectives without obtaining shareholder approval of such changes, the Administrator shall have sole discretion
to make such changes without obtaining shareholder approval. In addition, in the event that the Administrator determines that it
is advisable to grant Awards that shall not qualify as Performance-Based Compensation, the Administrator may make such grants without
satisfying the requirements of Code Section 162(m) and, in such case, may apply performance objectives other than those set forth
in this Section 7.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECTION 8.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>PAYMENT OF OPTION EXERCISE PRICE</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Upon the exercise of
an Option, Participants may pay the exercise price of an Option (i) in cash, or with a personal check, certified check, or other
cash equivalent, (ii) by the surrender by the Participant to the Company of previously acquired unencumbered shares of Common Stock
(through physical delivery or attestation), (iii) through the withholding of shares of Common Stock from the number of shares otherwise
issuable upon the exercise of the Option (<I>e.g</I>., a net share settlement), (iv) through broker-assisted cashless exercise
if such exercise complies with applicable securities laws and any insider trading policy of the Company, (v) such other form of
payment as may be authorized by the Administrator, or (vi) by a combination thereof. In the event the Participant elects to pay
the exercise price, in whole or in part, with previously acquired shares of Common Stock or through a net share settlement, the
then-current Fair Market Value of the stock delivered or withheld shall equal the total exercise price for the shares being purchased
in such manner.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Administrator may,
in its sole discretion, limit the forms of payment available to the Participant and may exercise such discretion any time prior
to the termination of the Option granted to the Participant or upon any exercise of the Option by the Participant. &ldquo;Previously
acquired shares of Common Stock&rdquo; means shares of Common Stock which the Participant owns on the date of exercise (or for
the period of time, if any, as may be required by generally accepted accounting principles or any successor principles applicable
to the Company).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">With respect to payment
in the form of Common Stock, the Administrator may require advance approval or adopt such rules as it deems necessary to assure
compliance with Rule 16b-3, if applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECTION 9.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>TERMS AND CONDITIONS OF INCENTIVE
STOCK OPTIONS</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Each Incentive Stock
Option shall be evidenced by an Incentive Stock Option Agreement, which shall comply with and be subject to the following terms
and conditions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Number
of Shares and Exercise Price</U>. The Incentive Stock Option Agreement shall state the total number of shares covered by the Incentive
Stock Option. Except as permitted by Code Section 424(a), or any successor provision, the exercise price per share shall not be
less than one hundred percent (100%) of the per share Fair Market Value of the Common Stock on the date the Administrator grants
the Incentive Stock Option; provided, however, that if a Participant owns stock possessing more than ten percent (10%) of the total
combined Voting Power of all classes of stock of the Company or of its Parent or any Subsidiary, the exercise price per share of
an Incentive Stock Option granted to such Participant shall not be less than one hundred ten percent (110%) of the per share Fair
Market Value of Common Stock on the date of the grant of the Incentive Stock Option. The Administrator shall have full authority
and discretion in establishing the exercise price and shall be fully protected in so doing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Exercisability
and Term</U>. The Incentive Stock Option Agreement shall state when the Incentive Stock Option becomes exercisable (<I>i.e.</I>
&ldquo;vests&rdquo;), and, if applicable in the Administrator&rsquo;s discretion, shall describe the Performance Objectives and
Performance Period upon which vesting is based, the manner in which performance shall be measured and the extent to which partial
achievement of the Performance Objectives may result in vesting of the Option. The Participant may exercise the Incentive Stock
Option, in full or in part, upon or after the vesting date of such Option (or portion thereof). Notwithstanding anything in the
Plan or the Agreement to the contrary, the Participant may not exercise an Incentive Stock Option after the maximum term of such
Option, as such term is specified in the Incentive Stock Option Agreement. Except as permitted by Code Section 424(a), in no event
shall any Incentive Stock Option be exercisable during a term of more than ten (10) years after the date on which it is granted;
provided, however, that if a Participant owns stock possessing more than ten percent (10%) of the total combined Voting Power of
all classes of stock of the Company or of its Parent or any Subsidiary, the Incentive Stock Option granted to such Participant
shall be exercisable during a term of not more than five (5) years after the date on which it is granted. The Administrator may
accelerate the exercisability of any Incentive Stock Option granted hereunder which is not immediately exercisable as of the date
of grant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>No
Rights as Shareholder</U>. A Participant (or the Participant&rsquo;s successors) shall have no rights as a shareholder with respect
to any shares covered by an Incentive Stock Option until the date of the issuance of the Common Stock subject to such Award upon
exercise, as evidenced by a stock certificate or as reflected in the books and records of the Company or its designated agent (<I>i.e.</I>,
a &ldquo;book entry&rdquo;). No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities
or other property), distributions or other rights for which the record date is prior to the date such shares are actually issued
(as evidenced in either certificated or book entry form).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Withholding</U>.
The Company or its Affiliate shall be entitled to withhold and deduct from any future payments to the Participant all legally required
amounts necessary to satisfy any and all withholding and employment-related taxes attributable to the Participant&rsquo;s exercise
of an Incentive Stock Option or a &ldquo;disqualifying disposition&rdquo; of shares acquired through the exercise of an Incentive
Stock Option as defined in Code Section 421(b), to require the Participant to remit an amount sufficient to satisfy such withholding
requirements, or to require any combination thereof. In the event the Participant is required under the Incentive Stock Option
Agreement to pay the Company, or make arrangements satisfactory to the Company respecting payment of, such withholding and employment-related
taxes, the Administrator may, in its sole discretion, require the Participant to satisfy such obligation, in whole or in part,
by delivering shares of Common Stock or by electing to have the Company withhold shares of Common Stock otherwise issuable to the
Participant as a result of the exercise of the Incentive Stock Option. Such shares shall have a Fair Market Value equal to the
minimum required tax withholding, based on the minimum statutory withholding rates for federal and state tax purposes, including
payroll taxes, that are applicable to the supplemental income resulting from such exercise or disqualifying disposition. In no
event may the Participant deliver shares, nor may the Company or any Affiliate withhold shares, having a Fair Market Value in excess
of such statutory minimum required tax withholding. The Participant&rsquo;s delivery of shares or the withholding of shares for
this purpose shall occur on or before the later of (i) the date the Incentive Stock Option is exercised or the date of the disqualifying
disposition, as the case may be, or (ii) the date that the amount of tax to be withheld is determined under applicable tax law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(e)&#9;<U>Vesting Limitation</U>.
Notwithstanding any other provision of the Plan, the aggregate Fair Market Value (determined as of the date an Incentive Stock
Option is granted) of the shares of Common Stock with respect to which Incentive Stock Options are exercisable for the first time
by a Participant during any calendar year (under the Plan and any other &ldquo;incentive stock option&rdquo; plans of the Company
or any Affiliate shall not exceed $100,000 (or such other amount as may be prescribed by the Code from time to time); provided,
however, that if the exercisability or vesting of an Incentive Stock Option is accelerated as permitted under the provisions of
the Plan and such acceleration would result in a violation of the limit imposed by this Section 9(e), such acceleration shall be
of full force and effect but the number of shares of Common Stock that exceed such limit shall be treated as having been granted
pursuant to a Nonqualified Stock Option; and provided, further, that the limits imposed by this Section 9(e) shall be applied to
all outstanding Incentive Stock Options under the Plan and any other &ldquo;incentive stock option&rdquo; plans of the Company
or any Affiliate in chronological order according to the dates of grant. &#9;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Other
Provisions</U>. The Incentive Stock Option Agreement authorized under this Section 9 shall contain such other provisions as the
Administrator shall deem advisable. Any such Incentive Stock Option Agreement shall contain such limitations and restrictions upon
the exercise of the Incentive Stock Option as shall be necessary to ensure that such Incentive Stock Option will be considered
an &ldquo;incentive stock option&rdquo; as defined in Code Section 422 or to conform to any change therein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECTION 10.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>TERMS AND CONDITIONS OF NONQUALIFIED
STOCK OPTIONS</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Each Nonqualified Stock
Option shall be evidenced by a Nonqualified Stock Option Agreement, which shall comply with and be subject to the following terms
and conditions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Number
of Shares and Exercise Price</U>. The Nonqualified Stock Option Agreement shall state the total number of shares covered by the
Nonqualified Stock Option. The exercise price per share shall be equal to one hundred percent (100%) of the per share Fair Market
Value of the Common Stock on the date of grant of the Nonqualified Stock Option, or such higher price as the Administrator determines.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Exercisability
and Term</U>. The Nonqualified Stock Option Agreement shall state when the Nonqualified Stock Option becomes exercisable (<I>i.e.</I>
&ldquo;vests&rdquo;) and, if applicable in the Administrator&rsquo;s discretion, shall describe the Performance Objectives and
Performance Period upon which vesting is based, the manner in which performance shall be measured and the extent to which partial
achievement of the Performance Objectives may result in vesting of the Option. The Participant may exercise the Nonqualified Stock
Option, in full or in part, upon or after the vesting date of such Option (or portion thereof); provided, however, that the Participant
may not exercise a Nonqualified Stock Option after the maximum term of such Option, as such term is specified in the Nonqualified
Stock Option Agreement. Unless otherwise determined by the Administrator and specified in the Agreement governing the Award, no
Nonqualified Stock Option shall be exercisable during a term of more than ten (10) years after the date on which it is granted.
The Administrator may accelerate the exercisability of any Nonqualified Stock Option granted hereunder which is not immediately
exercisable as of the date of grant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>No
Rights as Shareholder</U>. A Participant (or the Participant&rsquo;s successors) shall have no rights as a shareholder with respect
to any shares covered by a Nonqualified Stock Option until the date of the issuance of the Common Stock subject to such Award upon
exercise, as evidenced by a stock certificate or as reflected in the books and records of the Company or its designated agent (<I>i.e.</I>,
a &ldquo;book entry&rdquo;). No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities
or other property), distributions or other rights for which the record date is prior to the date such shares are actually issued
(as evidenced in either certificated or book entry form).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Withholding</U>.
The Company or its Affiliate shall be entitled to withhold and deduct from any future payments to the Participant all legally required
amounts necessary to satisfy any and all withholding and employment-related taxes attributable to the Participant&rsquo;s exercise
of a Nonqualified Stock Option, to require the Participant to remit an amount sufficient to satisfy such withholding requirements,
or to require any combination thereof. In the event the Participant is required under the Nonqualified Stock Option Agreement to
pay the Company, or make arrangements satisfactory to the Company respecting payment of, such withholding and employment-related
taxes, the Administrator may, in its sole discretion, require the Participant to satisfy such obligation, in whole or in part,
by delivering shares of Common Stock or by electing to have the Company withhold shares of Common Stock otherwise issuable to the
Participant as a result of the exercise of the Nonqualified Stock Option. Such shares shall have a Fair Market Value equal to the
minimum required tax withholding, based on the minimum statutory withholding rates for federal and state tax purposes, including
payroll taxes, that are applicable to the supplemental income resulting from such exercise. In no event may the Participant deliver
shares, nor may the Company or any Affiliate withhold shares, having a Fair Market Value in excess of such statutory minimum required
tax withholding. The Participant&rsquo;s delivery of shares or the withholding of shares for this purpose shall occur on or before
the later of (i) the date the Nonqualified Stock Option is exercised, or (ii) the date that the amount of tax to be withheld is
determined under applicable tax law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Other
Provisions</U>. The Nonqualified Stock Option Agreement authorized under this Section 10 shall contain such other provisions as
the Administrator shall deem advisable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECTION 11.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>RESTRICTED STOCK AWARDS</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Each Restricted Stock
Award shall be evidenced by a Restricted Stock Award Agreement, which shall comply with and be subject to the following terms and
conditions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Number
of Shares</U>. The Restricted Stock Award Agreement shall state the total number of shares of Common Stock covered by the Restricted
Stock Award.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Risks
of Forfeiture</U>. The Restricted Stock Award Agreement shall set forth the risks of forfeiture, if any, which shall apply to the
shares of Common Stock covered by the Restricted Stock Award and the manner in which such risks of forfeiture shall lapse, including,
if applicable in the Administrator&rsquo;s discretion, a description of the Performance Objectives and Performance Period upon
which the lapse of risks of forfeiture is based, the manner in which performance shall be measured and the extent to which partial
achievement of the Performance Objectives may result in lapse of risks of forfeiture. The Administrator may, in its sole discretion,
modify the manner in which such risks of forfeiture shall lapse but only with respect to those shares of Common Stock which are
restricted as of the effective date of the modification.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Issuance
of Shares; Rights as Shareholder</U>. Except as provided below, the Company shall cause a stock certificate to be issued and shall
deliver such certificate to the Participant or hold such certificate in a manner determined by the Administrator in its sole discretion;
provided, however, that in lieu of a stock certificate, the Company may evidence the issuance of shares by a book entry in the
records of the Company or its designated agent (if permitted by the Company&rsquo;s designated agent and applicable law, as determined
by the Administrator in its sole discretion). The Company shall cause a legend or notation to be placed on such certificate or
book entry describing the risks of forfeiture and other transfer restrictions set forth in the Participant&rsquo;s Restricted Stock
Award Agreement and providing for the cancellation and, if applicable, return of such certificate or book entry if the shares of
Common Stock subject to the Restricted Stock Award are forfeited. Until the risks of forfeiture have lapsed or the shares subject
to such Restricted Stock Award have been forfeited, the Participant shall be entitled to vote the shares of Common Stock represented
by such stock certificates and shall receive all dividends attributable to such shares, but the Participant shall not have any
other rights as a shareholder with respect to such shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Withholding
Taxes</U>. The Company or its Affiliate shall be entitled to withhold and deduct from any future payments to the Participant all
legally required amounts necessary to satisfy any and all withholding and employment-related taxes attributable to the Participant&rsquo;s
Restricted Stock Award, to require the Participant to remit an amount sufficient to satisfy such withholding requirements, or to
require any combination thereof. In the event the Participant is required under the Restricted Stock Award Agreement to pay the
Company, or make arrangements satisfactory to the Company respecting payment of, such withholding and employment-related taxes,
the Administrator may, in its sole discretion, require the Participant to satisfy such obligations, in whole or in part, by delivering
shares of Common Stock, including shares of Common Stock received pursuant to the Restricted Stock Award on which the risks of
forfeiture have lapsed. Such shares shall have a Fair Market Value equal to the minimum required tax withholding, based on the
minimum statutory withholding rates for federal and state tax purposes, including payroll taxes, that are applicable to the supplemental
income resulting from the lapsing of the risks of forfeiture on such Restricted Stock Award. In no event may the Participant deliver
shares having a Fair Market Value in excess of such statutory minimum required tax withholding. The Participant&rsquo;s delivery
of shares shall occur on or before the date that the amount of tax to be withheld is determined under applicable tax law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Other
Provisions</U>. The Restricted Stock Award Agreement authorized under this Section 11 shall contain such other provisions as the
Administrator shall deem advisable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECTION 12.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>RESTRICTED STOCK UNITS</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Each Restricted Stock
Unit shall be evidenced by a Restricted Stock Unit Agreement, which shall comply with and be subject to the following terms and
conditions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Number
of Shares</U>. The Restricted Stock Unit Agreement shall state the total number of shares of Common Stock covered by the Restricted
Stock Unit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Vesting</U>.
The Restricted Stock Unit Agreement shall set forth the vesting conditions, if any, which shall apply to the Restricted Stock Unit
and the manner in which such vesting may occur, including, if applicable in the Administrator&rsquo;s discretion, a description
of the Performance Objectives and Performance Period upon which vesting is based, the manner in which performance shall be measured
and the extent to which partial achievement of the Performance Objectives may result in vesting of the Restricted Stock Unit. The
Administrator may, in its sole discretion, accelerate the vesting of any Restricted Stock Unit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Issuance
of Shares; Rights as Shareholder</U>. The Participant shall be entitled to payment of the Restricted Stock Unit as the units subject
to such Award vest. The Administrator may, in its sole discretion, pay Restricted Stock Units in shares of Common Stock, cash in
an amount equal to the Fair Market Value, on the date of payment, of the number of shares of Common Stock underlying the Award
that have vested on the applicable payment date, or any combination thereof, as specified in the Restricted Stock Unit Agreement.
If payment is made in shares of Common Stock, the Administrator shall cause to be issued one or more stock certificates in the
Participant&rsquo;s name and shall deliver such certificates to the Participant in satisfaction of such units; provided, however,
that in lieu of stock certificates, the Company may evidence such shares by a book entry in the records of the Company or its designated
agent (if permitted by the Company&rsquo;s designated agent and applicable law, as determined by the Administrator in its sole
discretion). Until the units subject to the Restricted Stock Unit have vested, the Participant shall not be entitled to vote any
shares of Common Stock which may be acquired through the Award, shall not receive any dividends attributable to such shares, and
shall not have any other rights as a shareholder with respect to such shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Withholding
Taxes</U>. The Company or its Affiliate shall be entitled to withhold and deduct from any future payments to the Participant all
legally required amounts necessary to satisfy any and all withholding and employment-related taxes attributable to the Participant&rsquo;s
Restricted Stock Unit, to require the Participant to remit an amount sufficient to satisfy such withholding requirements, or to
require any combination thereof. In the event the Participant is required under the Restricted Stock Unit Agreement to pay the
Company, or make arrangements satisfactory to the Company respecting payment of, such withholding and employment-related taxes,
the Administrator may, in its sole discretion, require the Participant to satisfy such obligations, in whole or in part, by delivering
shares of Common Stock, including shares of Common Stock received pursuant to the Restricted Stock Unit. Such shares shall have
a Fair Market Value equal to the minimum required tax withholding, based on the minimum statutory withholding rates for federal
and state tax purposes, including payroll taxes, that are applicable to the supplemental income resulting from the payment of such
Restricted Stock Unit. In no event may the Participant deliver shares having a Fair Market Value in excess of such statutory minimum
required tax withholding. The Participant&rsquo;s delivery of shares for this purpose shall occur on or before the date that the
amount of tax to be withheld is determined under applicable tax law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Other
Provisions</U>. The Restricted Stock Unit Agreement authorized under this Section 12 shall contain such other provisions as the
Administrator shall deem advisable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECTION 13.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>RECAPITALIZATION, EXCHANGE, </U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>LIQUIDATION, OR CHANGE OF CONTROL</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>In
General</U>. In the event of an increase or decrease in the number of shares of Common Stock resulting from a stock dividend, stock
split, reverse split, combination or reclassification of the Common Stock, or any other increase or decrease in the number of issued
shares of Common Stock effected without receipt of consideration by the Company, other than due to conversion of the convertible
securities of the Company, the Administrator may, in its sole discretion, adjust the value determinations applicable to outstanding
Awards and the Plan in order to reflect such change, including adjustment of the class and number of shares of stock reserved under
Section 6 of the Plan, the class and number of shares of stock covered by each outstanding Award, and, if and as applicable, the
exercise price per share of each outstanding Award and the Annual Award Limits. Additional shares which may become covered by the
Award pursuant to such adjustment shall be subject to the same restrictions as are applicable to the shares with respect to which
the adjustment relates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Liquidation</U>.
Unless otherwise provided in the Agreement evidencing an Award, in the event of a dissolution or liquidation of the Company, the
Administrator may provide for one or both of the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: justify; text-indent: 0.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
acceleration of the exercisability of any or all outstanding Options, the vesting and payment of any or all Restricted Stock Units,
or the lapsing of the risks of forfeiture on any or all Restricted Stock Awards; provided, however, that no such acceleration,
vesting or payment shall occur if the acceleration, vesting or payment would violate the requirements of Code Section 409A; or</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: justify; text-indent: 0.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
complete termination of the Plan and the cancellation of any or all Awards (or portions thereof) which have not been exercised,
have not vested, or remain subject to risks of forfeiture, as applicable, in each case immediately prior to the completion of such
a dissolution or liquidation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Change
of Control</U>. Unless otherwise provided in the Agreement evidencing an Award, in the event of a Change of Control, the Administrator
may provide for one or more of the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: justify; text-indent: 0.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
acceleration of the exercisability, vesting, or lapse of the risks of forfeiture of any or all Awards (or portions thereof);</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: justify; text-indent: 0.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
complete termination of the Plan and the cancellation of any or all Awards (or portions thereof) which have not been exercised,
have not vested, or remain subject to risks of forfeiture, as applicable, in each case as of the effective date of the Change of
Control;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: justify; text-indent: 0.5in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;that
the entity succeeding the Company by reason of such Change of Control, or the parent of such entity, shall assume or continue any
or all Awards (or portions thereof) outstanding immediately prior to the Change of Control or substitute for any or all such Awards
(or portions thereof) a substantially equivalent award with respect to the securities of such successor entity, as determined in
accordance with applicable laws and regulations;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: justify; text-indent: 0.5in">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;that
Participants holding outstanding Awards shall become entitled to receive, with respect to each share of Common Stock subject to
such Award (whether vested or unvested, as determined by the Administrator pursuant to subsection (c)(i) hereof) as of the effective
date of any such Change of Control, cash in an amount equal to (1) for Participants holding Options, the excess of the Fair Market
Value of such Common Stock on the date immediately preceding the effective date of such Change of Control over the exercise price
per share of Options, or (2) for Participants holding Awards other than Options, the Fair Market Value of such Common Stock on
the date immediately preceding the effective date of such Change of Control.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Administrator need not take the same
action with respect to all Awards (or portions thereof) or with respect to all Participants. In addition, the Administrator may
restrict the rights of or the applicability of this Section 13 to the extent necessary to comply with Section 16(b) of the Exchange
Act, the Internal Revenue Code or any other applicable law or regulation. The grant of an Award pursuant to the Plan shall not
limit in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital
or business structure or to merge, exchange or consolidate or to dissolve, liquidate, sell or transfer all or any part of its business
or assets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECTION 14.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>NONTRANSFERABILITY</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>In
General</U>. Except as expressly provided in the Plan or an Agreement, no Award shall be transferable by the Participant, in whole
or in part, other than by will or by the laws of descent and distribution. If the Participant shall attempt any transfer of any
Award, such transfer shall be void and the Award shall terminate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Nonqualified
Stock Options</U>. Notwithstanding anything in this Section 14 to the contrary, the Administrator may, in its sole discretion,
permit the Participant to transfer any or all Nonqualified Stock Options to any member of the Participant&rsquo;s &ldquo;immediate
family&rdquo; as such term is defined in Rule 16a-1(e) of the Exchange Act, or any successor provision, or to one or more trusts
whose beneficiaries are members of such Participant&rsquo;s &ldquo;immediate family&rdquo; or partnerships in which such family
members are the only partners; provided, however, that the Participant cannot receive any consideration for the transfer and such
transferred Nonqualified Stock Option shall continue to be subject to the same terms and conditions as were applicable to such
Nonqualified Stock Option immediately prior to its transfer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Beneficiary
Designation</U>. Each Participant may, from time to time, name any beneficiary or beneficiaries (who may be named contingently
or successively) to whom any benefit under the Plan is to be paid in case of such Participant&rsquo;s death before receipt of any
or all of such benefit. Each such designation shall revoke all prior designations by the same Participant, shall be in a form prescribed
by the Administrator, and will be effective only when filed by the Participant in writing with the Company during the Participant&rsquo;s
lifetime. In the absence of any such designation, benefits remaining unpaid at the Participant&rsquo;s death shall be paid to the
Participant&rsquo;s estate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECTION 15.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>INVESTMENT PURPOSE AND SECURITIES
COMPLIANCE</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">No shares of Common
Stock shall be issued pursuant to the Plan unless and until there has been compliance, in the opinion of Company&rsquo;s counsel,
with all applicable legal requirements, including without limitation, those relating to securities laws and stock exchange listing
requirements. As a condition to the issuance of Common Stock to Participant, the Administrator may require Participant to (a) represent
that the shares of Common Stock are being acquired for investment and not resale and to make such other representations as the
Administrator shall deem necessary or appropriate to qualify the issuance of the shares as exempt from the Securities Act of 1933
and any other applicable securities laws, and (b) represent that Participant shall not dispose of the shares of Common Stock in
violation of the Securities Act of 1933 or any other applicable securities laws.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As a further condition
to the grant of any Award or the issuance of Common Stock to a Participant, the Participant agrees to the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the event the Company advises the Participant that it plans an underwritten public offering of its Common Stock in compliance with
the Securities Act of 1933, as amended, the Participant will execute any lock-up agreement the Company and the underwriter(s) deem
necessary or appropriate, in their sole discretion, in connection with such public offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the event the Company makes any public offering of its securities and determines in its sole discretion that it is necessary to
reduce the number of outstanding Awards so as to comply with any state&rsquo;s securities or Blue Sky law limitations with respect
thereto, the Board of Directors of the Company shall have the right (i) to accelerate the exercisability of any Award and the date
on which such Award must be exercised or remove the risks of forfeiture to which the Award is subject, provided that the Company
gives Participant prior written notice of such acceleration or removal, and (ii) to cancel any outstanding Awards (or portions
thereof) which Participant does not exercise prior to or contemporaneously with such public offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the event of a Change of Control, Participant will comply with Rule 145 of the Securities Act of 1933 and any other restrictions
imposed under other applicable legal or accounting principles if Participant is an &ldquo;affiliate&rdquo; (as defined in such
applicable legal and accounting principles) at the time of the Change of Control, and Participant will execute any documents necessary
to ensure compliance with such rules.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company reserves
the right to place a legend on any stock certificate (or a notation on any book entry shares permitted by the Administrator) issued
in connection with an Award pursuant to the Plan to assure compliance with this Section 15.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company shall not
be required to register or maintain the registration of the Plan, any Award, or any Common Stock issued or issuable pursuant to
the Plan under the Securities Act of 1933 or any other applicable securities laws. If the Company is unable to obtain the authority
that the Company or its counsel deems necessary for the lawful issuance and sale of Common Stock under the Plan, the Company shall
not be liable for the failure to issue and sell Common Stock upon the exercise, vesting, or lapse of restrictions of forfeiture
of an Award unless and until such authority is obtained. A Participant shall not be eligible for the grant of an Award or the issuance
of Common Stock pursuant to an Award if such grant or issuance would violate any applicable securities law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECTION 16.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>AMENDMENT OF THE PLAN</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Board may from
time to time, insofar as permitted by law, suspend or discontinue the Plan or revise or amend it in any respect; provided, however,
that no such suspension, termination, revision, or amendment, except as is authorized in Section 13, shall impair the terms and
conditions of any Award which is outstanding on the date of such suspension, termination, revision, or amendment to the material
detriment of the Participant without the consent of the Participant. Notwithstanding the foregoing, except as provided in Section
13 of the Plan or to the extent required by applicable law or regulation, the Board may not, without shareholder approval, revise
or amend the Plan to (i) materially increase the number of shares subject to the Plan, (ii) change the designation of Participants,
including the class of Employees, eligible to receive Awards, (iii) decrease the price at which Options may be granted, (iv) cancel,
regrant, repurchase for cash, or replace Options that have an exercise price in excess of the Fair Market Value of the Common Stock,
or amend the terms of outstanding Options to reduce their exercise price, (v) materially increase the benefits accruing to Participants
under the Plan, or (vi) make any modification that will cause Incentive Stock Options to fail to meet the requirements of Code
Section 422.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">To the extent applicable,
the Plan and all Agreements shall be interpreted to be exempt from or comply with the requirements of Code Section 409A and, if
applicable, to comply with Code Section 422, in each case including the regulations, notices, and other guidance of general applicability
issued thereunder. Furthermore, notwithstanding anything in the Plan or any Agreement to the contrary, the Board may amend the
Plan or Agreement to the extent necessary or desirable to comply with such requirements without the consent of the Participant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECTION 17.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>RIGHTS AND OBLIGATIONS ASSOCIATED
WITH AWARDS </U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>No
Obligation to Exercise</U>. The granting of an Option shall impose no obligation upon the Participant to exercise such Option.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>No
Employment or Other Service Rights</U>. The granting of an Award hereunder shall not impose upon the Company or any Affiliate any
obligation to retain the Participant in its employ or service for any period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Unfunded
Plan</U>. Participants shall have no right, title, or interest whatsoever in or to any particular assets of the Company or any
of its Affiliates by reason of the right to receive a benefit under the terms of the Plan. Nothing contained in the Plan, and no
action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship
between the Company and any Participant, beneficiary, legal representative, or any other person. To the extent that any person
acquires a right to receive shares of Common Stock or payments from the Company or any of its Affiliates under the Plan, such right
shall be no greater than the right of an unsecured general creditor of the Company or an Affiliate, as the case may be. All payments
to be made hereunder shall be paid from the general funds of the Company or an Affiliate, as the case may be. In its sole discretion,
the Administrator may authorize the creation of trusts or other arrangements to meet the obligations created under the Plan to
deliver the shares of Common Stock or make payments in lieu of or with respect to Awards hereunder; provided, however, that the
existence of such trusts or other arrangements is consistent with the unfunded status of the Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECTION 18.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>MISCELLANEOUS</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(a)&#9;<U>Issuance
of Shares</U>. The Company is not required to issue or remove restrictions on shares of Common Stock granted pursuant to the
Plan until the Administrator determines that: (i) all conditions of the Award have been satisfied, (ii) all legal matters in connection
with the issuance have been satisfied, and (iii) the Participant has executed and delivered to the Company such representations
or agreements as the Administrator may consider appropriate, in its sole discretion, to satisfy the requirements of any applicable
law or regulation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Choice
of Law</U>. The law of the state of Minnesota shall govern all questions concerning the construction, validity, and interpretation
of the Plan, without regard to that state&rsquo;s conflict of laws rules.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Severability</U>.
In the event that any provision of the Plan shall be held illegal or invalid for any reason, such illegality or invalidity shall
not affect the remaining provisions of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision
had not been included.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>No
Duty to Notify</U>. The Company shall have no duty or obligation to any Participant to advise such Participant as to the time and
manner of exercising an Award or as to the pending termination or expiration of such Award. In addition, the Company has no duty
or obligation to minimize the tax consequences of an Award to the Participant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<DOCUMENT>
<TYPE>EX-5.1
<SEQUENCE>3
<FILENAME>arca_ex0501.htm
<DESCRIPTION>OPINION
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0; text-align: right"><B>Exhibit 5.1</B></P>

<P STYLE="margin: 0; text-align: left">&nbsp;<IMG SRC="image_004.jpg" ALT=""></P>

<P STYLE="margin: 0; text-align: right">&nbsp;</P>

<P STYLE="margin: 0; text-align: right"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right; background-color: white">August 10, 2018</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">Appliance Recycling Centers of America,
Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">175 Jackson Avenue North Suite 102</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">Minneapolis, Minnesota 55343</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">Ladies and Gentlemen:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt; background-color: white">I am the Corporate
Secretary of Appliance Recycling Centers of America, Inc., a Nevada corporation (the &ldquo;Company&rdquo;). In that capacity,
I have acted as counsel for the Company in connection with the Registration Statement on Form&nbsp;S-8&nbsp;(the &ldquo;Registration
Statement&rdquo;) filed by the Company with the Securities and Exchange Commission (the &ldquo;Commission&rdquo;) under the Securities
Act of 1933, as amended, relating to the issuance by the Company of up to 2,000,000 shares of the Company&rsquo;s common stock,
$0.001 value per share (the &ldquo;Shares&rdquo;), which may be issued pursuant to the Appliance Recycling Centers of America,
Inc. 2016 Equity Incentive Plan (the &ldquo;Plan&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt; background-color: white">I have examined
the Registration Statement and the Plan, which has been filed as an exhibit to the Registration Statement. I also have examined
the originals, or duplicates or certified or conformed copies, of such records, agreements, documents and other instruments and
have made such other investigations as I have deemed relevant and necessary in connection with the opinions hereinafter set forth.
As to questions of fact material to this opinion, I have relied upon certificates or comparable documents of public officials and
of officers and representatives of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt; background-color: white">In rendering the
opinion set forth below, I have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity
of all documents submitted to me as originals, the conformity to original documents of all documents submitted to me as duplicates
or certified or conformed copies and the authenticity of the originals of such latter documents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt; background-color: white">Based upon the
foregoing, and subject to the qualifications, assumptions and limitations stated herein, I am of the opinion that upon their issuance
and delivery in accordance with the terms of the Plan, the Shares will be validly issued, fully paid and nonassessable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt; background-color: white">I do not express
any opinion herein concerning any law other than the Nevada Revised Statutes Chapter 78.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt; background-color: white">I hereby consent
to the filing of this opinion letter as Exhibit 5.1 to the Registration Statement.</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="width: 50%">&nbsp;</TD>
    <TD STYLE="width: 50%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Very truly yours,</FONT></TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/ Michael J. Stein</FONT></TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Michael J. Stein, Corporate Secretary</I></FONT></TD></TR>
</TABLE>


<P STYLE="margin: 0"></P>

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end
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>6
<FILENAME>arca_ex2301.htm
<DESCRIPTION>CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Exhibit 23.1</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">CONSENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We consent to the incorporation by reference
in this Registration Statement on Form S-8 of Appliance Recycling Centers of America, Inc. and Subsidiaries (collectively, the
&ldquo;Company&rdquo;) of our report dated June 8, 2018, relating to the consolidated financial statements of the Company, appearing
in the Audit Report on Form 10-K of the Company as of and for the year ended December 30, 2017.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">/s/ SingerLewak LLP</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Los Angeles, California</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">August 10, 2018</P>





</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.2
<SEQUENCE>7
<FILENAME>arca_ex2302.htm
<DESCRIPTION>CONSENT ANTON & CHIA
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0">Exhibit 23.2</P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><IMG SRC="image_001.jpg" ALT="anton_logo.png" STYLE="height: 80px; width: 624px"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CONSENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We hereby consent to the incorporation
by reference in the registration statement on Form S-8 filed with the Securities and Exchange Commission on August 10, 2018 (File
No. ), and this registration statement on Form S-8, of our report dated March 31, 2017 relating to the consolidated financial statements
of Appliance Recycling Centers of America, Inc appearing in the entity&rsquo;s Annual Report on Form 10-K for the year ended December
31, 2016.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We also consent to the reference to us under the caption &ldquo;Experts&rdquo;
in the Prospectus.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">/s/ Anton &amp; Chia, LLP</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Newport Beach, California</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">August 10, 2018</P>



<P STYLE="margin: 0"></P>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
