Ownership/Management. There shall be no change in the President or Board of Directors of Borrower without Lender’s written consent.

The Board of Directors also may, at its sole discretion, waive, change or amend the LTEIP as it deems appropriate.

The Committee may provide in any option agreement that the option covered thereby shall become immediately exercisable in the event of a Change of Control. A “Change of Control” shall be deemed to have occurred if # any person or group of persons (as defined in Section 13(d) and 14(d) of the Securities Exchange Act of 1934) together with its affiliates, excluding employee benefit plans of the Company, is or becomes, directly or indirectly, the “beneficial owner” (as defined in Rule 13d-3 promulgated under the Securities and Exchange Act of 1934) of securities of the Company representing 20% or more of the combined voting power of the Company’s then outstanding securities; or # a majority of the members of the Board of Directors of the Company are not Continuing Directors. “Continuing Directors” means, as of the date of determination, any member of the Board of Directors of the Company who # was a member of such Board of Directors on January 1, 2011 or # was nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of such Board at the time of such nomination or election; or # any event that the Company’s Board of Directors determines should constitute a Change of Control.

report to an officer or employee instead of reporting directly to the Board (or the Board of Directors of the ultimate parent entity of the successor in the Change of Control);

there is a change in the majority of the board of directors of [[Organization C:Organization]] during any twelve month period; or

Director Independence. A majority of directors on the Board will be independent as required by the NASDAQ Stock Market. The Board also believes that it is often in the best interest of Scio Diamond and its stockholders to have non-independent directors, including current and (in some cases) former members of management, serve as directors. Each independent Director who experiences a change in circumstances that could affect such Director’s independence should deliver a notice of such change to Scio Diamond’s Counsel.

an Advisor Change of Control that two-thirds of the Independent Directors of the Board reasonably determines is materially detrimental to the Company;

Directors Who Change Their Present Job Responsibility. Any Director who experiences a material change in his/her job responsibilities or the position he/she held when he/she came on the Board should deliver a notice of such change in status to the Chairman of the Board and/or the Chairman of the Governance Committee. The Governance Committee will then evaluate whether the individual continues to satisfy the Board’s membership criteria in light of his/her new occupational status and shall recommend to the Board the action, if any, to be taken with respect to such individual.

The Company, by action of its Board of Directors or the Investment and Benefits Committee, may change, suspend, or end the plan at any time.

Equity Incentive Plan. Employee will be eligible to participate in the 2018 Equity Incentive Plan (the “Plan”) should the Company Board of Directors implement such a plan. All determinations of any award under the Plan, if awarded, shall be at the sole discretion of the Company’s Board of Directors. The Board may amend and change the Plan at any time in its sole discretion. In the event the Board of Directors implements a Plan, notwithstanding the Employee will be eligible to participate, does not mean that any award under the Plan will necessarily be granted to Employee. Any such Plan award is completely at the discretion of the Board of Directors.