Exhibit 10.2

 

Orbsat Corp 2020 Equity Incentive Plan

 

 

 

Section 1. Establishment and Purpose.

 

1.1 The purpose of the Plan is to attract and retain outstanding individuals as
Employees, Directors and Consultants of the Company and its Subsidiaries, to
recognize the contributions made to the Company and its Subsidiaries by
Employees, Directors and Consultants, and to provide such Employees, Directors
and Consultants with additional incentive to expand and improve the profits and
achieve the objectives of the Company and its Subsidiaries, by providing such
Employees, Directors and Consultants with the opportunity to acquire or increase
their proprietary interest in the Company through receipt of Awards.

 

Section 2. Definitions.

 

As used in the Plan, the following terms shall have the meanings set forth
below:

 

2.1 “Award” means any award or benefit granted under the Plan, which shall be a
Stock Option, a Stock Award, a Stock Unit Award or an SAR.

 

2.2 “Award Agreement” means, as applicable, a Stock Option Agreement, Stock
Award Agreement, Stock Unit Award Agreement or SAR Agreement evidencing an Award
granted under the Plan.

 

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

 

2.4 “Change in Control” has the meaning set forth in Section 8.2 of the Plan.

 

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

 

2.6 “Committee” means the Compensation Committee of the Board or such other
committee as may be designated by the Board from time to time to administer the
Plan, or, if no such committee has been designated at the time of any grants, it
shall mean the Board.

 

2.7 “Company” means Orbsat Corp, a Nevada corporation.

 

2.8 “Consultant” means any person, including an advisor, who is engaged by the
Company or a Subsidiary to render consulting or advisory services and is
compensated for such services. However, service solely as a Director, or payment
of a fee for such service, will not cause a Director to be considered a
“Consultant” for purposes of the Plan. Notwithstanding the foregoing, a person
is treated as a Consultant under this Plan only if a Form S-8 Registration
Statement under the Securities Act is available to register either the offer or
the sale of the Company’s securities to such person.

 

2.9 “Director” means a director of the Company who is not an employee of the
Company or a Subsidiary.

 

2.10 “Effective Date” means August 21, 2020.

 

2.11 “Exchange Act” means the Securities Exchange Act of 1934, as amended from
time to time.

 

2.12 “Fair Market Value” means as of any date, the closing price of a Share on
the national securities exchange on which the Shares are listed, or, if the
Shares are not listed on a national securities exchange, the over-the-counter
market on which the Shares trades, or, if the Shares is not listed on a national
securities exchange or an over-the-counter market, as determined by the Board as
of such date in accordance with the requirements of Code Section 422 or 409A, as
applicable, or, if no trading occurred on such date, as of the trading day
immediately preceding such date.

 

2.13 “Incentive Stock Option” or “ISO” means a Stock Option granted under
Section 5 of the Plan that meets the requirements of Section 422(b) of the Code
or any successor provision.

 

 

 

 

2.14 “Employee” means an employee of the Company or any Subsidiary selected to
participate in the Plan in accordance with Section 3. A Employee may also
include a person who is granted an Award (other than an Incentive Stock Option)
in connection with the hiring of the person prior to the date the person becomes
an employee of the Company or any Subsidiary, provided that such Award shall not
vest prior to the commencement of employment.

 

2.15 “Family Member” unless otherwise defined by applicable tax laws, shall mean
any child, stepchild, grandchild, parent, stepparent, spouse, former spouse,
sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law or sister-in-law, including adoptive
relationships, any person sharing the Participant’s household (other than a
tenant or employee of the Participant), a trust in which such persons have more
than fifty percent (50%) of the beneficial interest, a foundation in which such
persons (or the Participant) control the management of assets, and any other
entity in which such persons (or the Participant) own more than fifty percent
(50%) of the voting interests.

 

2.16 “Founder” means the Company’s founder David Phipps.

 

2.17 “Non-Qualified Stock Option” or “NSO” means a Stock Option granted under
Section 5 of the Plan that is not an Incentive Stock Option.

 

2.18 “Participant” means an Employee, Director or Consultant selected to receive
an Award or Option under the Plan.

 

2.19 “Plan” means this 2020 Equity Incentive Plan.

 

2.20 “Shares” means shares of common stock of the Company.

 

2.21 “Stock Appreciation Right” or “SAR” means a grant of a right to receive
Shares or cash under Section 8 of the Plan.

 

2.22 “Stock Award” means a grant of Shares under Section 6 of the Plan.

 

2.23 “Stock Option” means an Incentive Stock Option or a Non-Qualified Stock
Option granted under Section 5 of the Plan.

 

2.24 “Stock Unit Award” means a grant of a right to receive Shares or cash under
Section 7 of the Plan.

 

2.25 “Subsidiary” means an entity of which the Company is the direct or indirect
beneficial owner of not less than 50% of all issued and outstanding equity
interest of such entity.

 

2.26 “Termination of Service” means a termination of a Participant’s service
with the Company or a Subsidiary, as applicable, for any reason, including,
without limitation, disability or death. In the event Termination of Service
shall constitute a payment event with respect to any Award subject to Code
Section 409A, Termination of Service shall only be deemed to occur upon a
“separation from service” as such term is defined under Code Section 409A.

 

Section 3. Administration.

 

3.1 The Committee.

 

The Plan shall be administered by the Company’s Board of Directors, “Board”.

 

3.2 Authority of the Committee.

 

(a) The Board, in its sole discretion, shall determine the Employees, Directors
and Consultants to whom, and the time or times at which Awards will be granted,
the form and amount of each Award, the expiration date of each Award, the time
or times within which the Awards may be exercised, the cancellation of the
Awards and the other limitations, restrictions, terms and conditions applicable
to the grant of the Awards. The terms and conditions of the Awards need not be
the same with respect to each Participant or with respect to each Award.

 

 

 

 

(b) To the extent permitted by applicable law, regulation, and rules of a stock
exchange on which the Shares are listed or traded, the Committee may delegate
its authority to grant Awards to Employees and to determine the terms and
conditions thereof to such officer of the Company as it may determine in its
discretion, on such terms and conditions as it may impose, except with respect
to Awards to officers subject to Section 16 of the Exchange Act.

 

(c) The Board may, subject to the provisions of the Plan, establish such rules
and regulations as it deems necessary or advisable for the proper administration
of the Plan, and may make determinations and may take such other action in
connection with or in relation to the Plan as it deems necessary or advisable.
Each determination or other action made or taken pursuant to the Plan, including
interpretation of the Plan and the specific terms and conditions of the Awards
granted hereunder, shall be final and conclusive for all purposes and upon all
persons.

 

(d) No member of the Board shall be liable for any action taken or determination
made hereunder in good faith. The Board shall be entitled to indemnification and
reimbursement as Directors of the Company pursuant to the Company’s Certificate
of Incorporation and By-Laws.

 

3.3 Award Agreements.

 

(a) Each Award shall be evidenced by a written Award Agreement specifying the
terms and conditions of the Award. In the sole discretion of the Committee, the
Award Agreement may condition the grant of an Award upon the Participant’s
entering into one or more of the following agreements with the Company: (i) an
agreement not to compete with the Company and its Subsidiaries which shall
become effective as of the date of the grant of the Award and remain in effect
for a specified period of time following termination of the Participant’s
employment with the Company; (ii) an agreement to cancel any employment
agreement, fringe benefit or compensation arrangement in effect between the
Company and the Participant; and (iii) an agreement to retain the
confidentiality of certain information. Such agreements may contain such other
terms and conditions as the Committee shall determine. If the Participant shall
fail to enter into any such agreement at the request of the Committee, then the
Award granted or to be granted to such Participant shall be forfeited and
cancelled.

 

Section 4. Shares Subject to Plan.

 

4.1 Total Number of Shares.

 

(a) The total number of Shares that may be issued under the Plan shall be
2,250,000. Such Shares may be either authorized but unissued shares or treasury
shares, and shall be adjusted in accordance with the provisions of Section 4.3
of the Plan.

 

(b) The number of Shares delivered by a Participant or withheld by the Company
on behalf of any such Participant as full or partial payment of an Award,
including the exercise price of a Stock Option or of any required withholding
taxes, shall not again be available for issuance pursuant to subsequent Awards,
and shall count towards the aggregate number of Shares that may be issued under
the Plan. Any Shares purchased by the Company with proceeds from a Stock Option
exercise shall not again be available for issuance pursuant to subsequent
Awards, shall count against the aggregate number of Shares that may be issued
under the Plan and shall not increase the number of shares available under the
Plan.

 

(c) If there is a lapse, forfeiture, expiration, termination or cancellation of
any Award for any reason (including for reasons described in Section 3.3), or if
Shares are issued under such Award and thereafter are reacquired by the Company
pursuant to rights reserved by the Company upon issuance thereof, the Shares
subject to such Award or reacquired by the Company shall again be available for
issuance pursuant to subsequent Awards, and shall not count towards the
aggregate number of Shares that may be issued under the Plan.

 

 

 

 

4.2 Shares Under Awards.

 

Of the Shares authorized for issuance under the Plan pursuant to Section 4.1:

 

(a) The maximum number of Shares as to which an Employee (other than the CEO to
whom no annual limit is applicable) may receive Stock Options or SARs in any
calendar year is 200,000, except that the maximum number of Shares as to which
an Employee (other than the CEO) may receive Stock Options or SARs in the
calendar year in which such Employee begins employment with the Company or its
Subsidiaries is 50,000, or as specified in Employee’s employment agreement.

 

(b) The maximum number of Shares that may be subject to Stock Options (ISOs
and/or NSOs) is full amount of Shares authorized under Section 4.1.

 

(c) The maximum number of Shares that may be used for Stock Awards and/or Stock
Unit Awards that may be granted to any Employee (other than the Founder) in any
calendar year is 200,000, or, in the event the Award is settled in cash, an
amount equal to the Fair Market Value or such value as determined by the Board
at its discretion, of such number of Shares on the date on which the Award is
settled.

 

(d) The maximum number of Shares subject to Awards granted under the Plan or
otherwise during any one calendar year to any Director for service on the Board,
taken together with any cash fees paid by the Company to such Director during
such calendar year for service on the Board, will not exceed $100,000 in total
value (calculating the value of any such Awards based on the grant date fair
value or such value as determined by the Board, at its discretion, of such
Awards for financial reporting purposes).

 

(e) The maximum number of Shares subject to Stock Options or SARs, granted under
the Plan or otherwise during any one calendar year to any Consultant for
services, taken together with any cash fees paid by the Company to such
Consultant during such calendar year for services, will not exceed $100,000  in
total value (calculating the value of any such Awards based on the grant date
fair value, or such value as the Board determines at its discretion, of such
Awards for financial reporting purposes).

 

The numbers of Shares described herein shall be as adjusted in accordance with
Section 4.3 of the Plan.

 

4.3 Adjustment.

 

In the event of any reorganization, recapitalization, stock split, stock
distribution, merger, consolidation, split-up, spin-off, combination,
subdivision, consolidation or exchange of shares, any change in the capital
structure of the Company or any similar corporate transaction, the Committee
shall make such adjustments as it deems appropriate, in its sole discretion, to
preserve the benefits or intended benefits of the Plan and Awards granted under
the Plan. Such adjustments may include: (a) adjustment in the number and kind of
shares reserved for issuance under the Plan; (b) adjustment in the number and
kind of shares covered by outstanding Awards; (c) adjustment in the exercise
price of outstanding Stock Options or SARs or the price of Stock Awards or Stock
Unit Awards under the Plan; (d) adjustments to any of the shares limitations set
forth in Section 4.1 or 4.2 of the Plan; and (e) any other changes that the
Committee determines to be equitable under the circumstances.

 

Section 5. Grants of Stock Options.

 

5.1 Grant.

 

Subject to the terms of the Plan, the Committee may from time to time grant
Stock Options to Participants. Stock Options granted under the Plan to Employees
shall be NSOs unless the Award Agreement expressly provides that the Stock
Option is an ISO. Stock Options granted under the Plan to Consultants and
Directors who are not Employees shall be NSOs.

 

5.2 Stock Option Agreement.

 

The grant of each Stock Option shall be evidenced by a written Stock Option
Agreement specifying the type of Stock Option granted, the exercise period, the
exercise price, the terms for payment of the exercise price, the expiration date
of the Stock Option, the number of Shares to be subject to each Stock Option and
such other terms and conditions established by the Committee, in its sole
discretion, not inconsistent with the Plan.

 

 

 

 

5.3 Exercise Price and Exercise Period.

 

With respect to each Stock Option granted to a Participant:

 

(a) The per Share exercise price of each Stock Option shall be determined by the
Board in the exercise of its discretion.

 

Fair Market Value, as determined by the Company’s Board of Directors, at its
discretion, of the Shares subject to the Stock Option on the date on which the
Stock Option is granted, but such exercise price shall not be less than its par
value.

 

(b) Each Stock Option shall become exercisable as provided in the Stock Option
Agreement; provided that the Committee shall have the discretion to accelerate
the date as of which any Stock Option shall become exercisable.

 

(c) No dividends or dividend equivalents shall be paid with respect to any
Shares subject to a Stock Option prior to the exercise of the Stock Option.

 

(d) Each Stock Option shall expire, and all rights to purchase Shares thereunder
shall expire, on the tenth anniversary of the date the Stock Option was granted,
unless an earlier expiration date is specified in the Award Agreement or
dictated by Section 5.4.

 

5.4 Required Terms and Conditions of ISOs.

 

In addition to the foregoing, each ISO granted to an Employee shall be subject
to the following specific rules:

 

(a) The aggregate Fair Market Value or Exercise Price (determined with respect
to each ISO at the time such Option is granted) of the Shares with respect to
which ISOs are exercisable for the first time by an Employee during any calendar
year (under all incentive stock option plans of the Company and its
Subsidiaries) shall not exceed the fair market value. If the aggregate Fair
Market Value (determined at the time of grant) of the Shares subject to an ISO
which first becomes exercisable in any calendar year exceeds the limitation of
this Section 5.4(a), so much of the ISO that does not exceed the applicable
dollar limit shall be an ISO and the remainder shall be a NSO; but in all other
respects, the original Stock Option Agreement shall remain in full force and
effect.

 

(b) Notwithstanding anything herein to the contrary, if an ISO is granted to an
Employee who owns stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company (or its parent or subsidiaries
within the meaning of Section 422(b)(6) of the Code): (i) the purchase price of
each Shares subject to the ISO shall be not less than 110% of the Fair Market
Value of the Shares on the date the ISO is granted; and (ii) the ISO shall
expire, and all rights to purchase Shares thereunder shall expire, no later than
the fifth anniversary of the date the ISO was granted.

 

(c) No ISOs shall be granted under the Plan after ten years from the earlier of
the date the Plan is adopted or approved by shareholders of the Company.

 

5.5 Exercise of Stock Options.

 

(a) A Participant entitled to exercise a Stock Option may do so by delivering
written notice to that effect specifying the number of Shares with respect to
which the Stock Option is being exercised and any other information the
Committee may prescribe. All notices or requests provided for herein shall be
delivered to the Chief Financial Officer of the Company.

 

 

 

 

(b) The Committee in its sole discretion may make available one or more of the
following alternatives for the payment of the Stock Option exercise price: (i)
in cash; (ii) in cash received from a broker-dealer to whom the Participant has
submitted an exercise notice together with irrevocable instructions to deliver
promptly to the Company the amount of sales proceeds from the sale of the Shares
subject to the Stock Option to pay the exercise price; (iii) by directing the
Company to withhold such number of Shares otherwise issuable in connection with
the exercise of the Stock Option having an aggregate Fair Market Value, or such
value as determined by the Board, at its discretion, equal to the exercise
price; or (iv) by delivering previously acquired Shares that are acceptable to
the Committee and that have an aggregate Fair Market Value on the date of
exercise equal to the Stock Option exercise price, except as otherwise may be
determined by the Board in the exercise of its discretion.

 

The Committee shall have the sole discretion to establish the terms and
conditions applicable to any alternative made available for payment of the Stock
Option exercise price.

 

(c) Except to the extent inconsistent with the terms of the applicable Award
Agreement and/or the provisions of Section 9, the following terms and conditions
shall apply with respect to a Participant’s Termination of Service, as
applicable:

 

(i) The Participant’s rights, if any, to exercise any vested Stock Option and/or
SAR shall terminate ninety (90) days after the date of such Termination of
Service, provided that if such termination is on account of the Participant’s
death or disability (as defined under Code Section 422(c)(6)), one (1) year
after the date of such Termination of Service; and

 

(ii) Upon such applicable date the Participant (or other legal representative)
shall forfeit any rights or interests in or with respect to any such Award.
Notwithstanding the foregoing, the Committee, in its sole discretion, may
provide for a different time period in the Award Agreement, or may extend the
time period, following a Termination of Service, during which the Participant
has the right to exercise any vested NSO or SAR, which time period may not
extend beyond the expiration date of the Award term.

 

Section 6. Stock Awards.

 

6.1 Grant.

 

The Committee may, in its discretion, (a) grant Shares under the Plan to any
Participant without consideration from such Participant or (b) sell Shares under
the Plan to any Participant for such amount of cash, Shares or other
consideration as the Committee deems appropriate.

 

6.2 Stock Award Agreement.

 

Each Shares granted or sold hereunder shall be subject to such restrictions,
conditions and other terms as the Committee may determine at the time of grant
or sale, the general provisions of the Plan, the restrictions, terms and
conditions of the related Stock Award Agreement, and the following specific
rules:

 

(a) The Award Agreement shall specify whether the Shares are granted or sold to
the Participant and such other provisions, not inconsistent with the terms and
conditions of the Plan, as the Committee shall determine.

 

(b) The restrictions to which the Shares awarded hereunder are subject shall
lapse as provided in Stock Award Agreement; provided that the Committee shall
have the discretion to accelerate the date as of which the restrictions lapse
with respect to any Award held by a Participant.

 

(c) Except as provided in this subsection (c) and unless otherwise set forth in
the related Stock Award Agreement, the Participant receiving a grant of or
purchasing Shares shall thereupon be a shareholder of the Company with respect
to such Shares and shall have the rights of a shareholder of the Company with
respect to such Shares, including the right to vote such Shares and to receive
dividends and other distributions paid with respect to such Shares; provided
that any dividends or other distributions payable with respect to the Stock
Award shall be accumulated and held by the Company and paid to the Participant
only upon, and to the extent, the restrictions lapse in accordance with the
terms of the applicable Stock Award Agreement. Any such dividends or other
distributions held by the Company attributable to the portion of a Stock Award
that is forfeited shall also be forfeited.

 

 

 

 

Section 7. Stock Unit Awards.

 

7.1 Grant.

 

The Committee may, in its discretion, grant Stock Unit Awards to any
Participant. Each Stock Unit subject to the Award shall entitle the Participant
to receive, on the date or the occurrence of an event (including the attainment
of performance goals) as described in the Stock Unit Award Agreement, a Share or
cash equal to the Fair Market Value of a Share on the date of such event as
provided in the Stock Unit Award Agreement.

 

7.2 Stock Unit Agreement.

 

Each Stock Unit Award shall be subject to such restrictions, conditions and
other terms as the Committee may determine at the time of grant, the general
provisions of the Plan, the restrictions, terms and conditions of the related
Stock Unit Award Agreement and the following specific rules:

 

(a) The Stock Unit Agreement shall specify such provisions, not inconsistent
with the terms and conditions of the Plan, as the Committee shall determine.

 

(b) The restrictions to which the Shares of Stock Units awarded hereunder are
subject shall lapse as provided in Stock Unit Agreement; provided that the
Committee shall have the discretion to accelerate the date as of which the
restrictions lapse with respect to any Award held by a Participant.

 

(c) Except as provided in this subsection (c) and unless otherwise set forth in
the Stock Unit Agreement, the Participant receiving a Stock Unit Award shall
have no rights of a shareholder of the Company, including voting or dividends or
other distributions rights, with respect to any Stock Units prior to the date
they are settled in Shares; provided that a Stock Unit Award Agreement may
provide that until the Stock Units are settled in Shares or cash, the
Participant shall be entitled to receive on each dividend or distribution
payment date applicable to the Shares an amount equal to the dividends or other
distributions that the Participant would have received had the Stock Units held
by the Participant as of the related record date been actual Shares. Such
amounts shall be accumulated and held by the Company and paid to the Participant
only upon, and to the extent, the restrictions lapse in accordance with the
terms of the applicable Stock Unit Award Agreement. Such amounts held by the
Company attributable to the portion of the Stock Unit Award that is forfeited
shall also be forfeited.

 

Section 8. SARs.

 

8.1 Grant.

 

The Committee may grant SARs to Participants. Upon exercise, an SAR entitles the
Participant to receive from the Company the number of Shares having an aggregate
Fair Market Value equal to the excess of the Fair Market Value of one Share as
of the date on which the SAR is exercised over the exercise price, multiplied by
the number of Shares with respect to which the SAR is being exercised. The
Committee, in its discretion, shall be entitled to cause the Company to elect to
settle any part or all of its obligations arising out of the exercise of an SAR
by the payment of cash in lieu of all or part of the Shares it would otherwise
be obligated to deliver in an amount equal to the Fair Market Value of such
Shares on the date of exercise. Cash shall be delivered in lieu of any
fractional Shares. The terms and conditions of any such Award shall be
determined at the time of grant.

 

8.2 SAR Agreement.

 

(a) Each SAR shall be evidenced by a written SAR Agreement specifying the terms
and conditions of the SAR as the Committee may determine, including the SAR
exercise price, expiration date of the SAR, the number of Shares to which the
SAR pertains, the form of settlement and such other terms and conditions
established by the Committee, in its sole discretion, not inconsistent with the
Plan.

 

 

 

 

(b) The per Share exercise price of each SAR shall not be less than 100% of the
Fair Market Value of a Share on the date the SAR is granted.

 

(c) Each SAR shall expire and all rights thereunder shall cease on the date
fixed by the Committee in the related SAR Agreement, which shall not be later
than the ten years after the date of grant; provided however, if a Participant
is unable to exercise an SAR because trading in the Shares is prohibited by law
or the Company’s insider-trading policy, the SAR exercise date shall be extended
to the date that is 30 days after the expiration of the trading prohibition.

 

(d) Each SAR shall become exercisable as provided in the related SAR Agreement;
provided that notwithstanding any other Plan provision, the Committee shall have
the discretion to accelerate the date as of which any SAR shall become
exercisable.

 

(e) No dividends or dividend equivalents shall be paid with respect to any SAR
prior to the exercise of the SAR.

 

(f) A person entitled to exercise an SAR may do so by delivery of a written
notice in accordance with procedures established by the Committee specifying the
number of Shares with respect to which the SAR is being exercised and any other
information the Committee may prescribe. As soon as reasonably practicable after
the exercise of an SAR, the Company shall (i) issue the total number of full
Shares to which the Participant is entitled and cash in an amount equal to the
Fair Market Value, as of the date of exercise, of any resulting fractional
Share, and (ii) if the Committee causes the Company to elect to settle all or
part of its obligations arising out of the exercise of the SAR in cash, deliver
to the Participant an amount in cash equal to the Fair Market Value, as of the
date of exercise, of the Shares it would otherwise be obligated to deliver.

 

Section 9. Change in Control.

 

9.1 Effect of a Change in Control.

 

(a) Notwithstanding any of the provisions of the Plan or any outstanding Award
Agreement, upon a Change in Control of the Company (as defined in Section 9.2),
the Board is authorized and has sole discretion to provide that (i) all
outstanding Awards shall become fully exercisable, (ii) all restrictions
applicable to all Awards shall terminate or lapse and (iii) performance goals
applicable to any Awards shall be deemed satisfied at the highest level, as
applicable, in order that Participants may realize the benefits thereunder.

 

(b) In addition to the Board’s authority set forth in Section 3, upon such
Change in Control of the Company, the Board is authorized and has sole
discretion as to any Award, either at the time such Award is granted hereunder
or any time thereafter, to take any one or more of the following actions without
Participant consent: (i) provide for the purchase of any vested or unvested
outstanding Stock Option, for an amount of cash equal to the difference between
the exercise price and the then Fair Market Value of the Shares covered thereby;
(ii) make such adjustment to any such Award then outstanding as the Board deems
appropriate to reflect such Change in Control; and (iii) cause any such Award
then outstanding to be assumed by or substituted for another form of Award
issued by the surviving corporation after such Change in Control.

 

9.2 Definition of Change in Control.

 

“Change in Control” of the Company shall be deemed to have occurred if at any
time during the term of an Award granted under the Plan any of the following
events occurs:

 

(a) any Person (other than the Company, a trustee or other fiduciary holding
securities under an employee benefit plan of the Company, or a corporation owned
directly or indirectly by the shareholders of the Company in substantially the
same proportions as their ownership of Shares) is or becomes the Beneficial
Owner, directly or indirectly, of securities of the Company representing 30% or
more of the combined voting power of the Company’s then outstanding securities
entitled to vote generally in the election of directors (“Person” and
“Beneficial Owner” being defined in Rule 13d-3 of the General Rules and
Regulations of the Exchange Act);

 

 

 

 

(b) the Company is party to a merger, consolidation, reorganization or other
similar transaction with another corporation or other Person unless, following
such transaction, more than 50% of the combined voting power of the outstanding
securities of the surviving, resulting or acquiring corporation or Person or its
parent entity entitled to vote generally in the election of directors (or
Persons performing similar functions) is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and entities who were
the beneficial owners of the Company’s outstanding securities entitled to vote
generally in the election of directors immediately prior to such transaction, in
substantially the same proportions as their ownership, immediately prior to such
transaction, of the Company’s outstanding securities entitled to vote generally
in the election of directors;

 

(c) the election to the Board, without the recommendation or approval of
two-thirds of the incumbent Board, of the lesser of: (i) three Directors; or
(ii) Directors constituting a majority of the number of Directors of the Company
then in office; provided, however, that Directors whose initial assumption of
office is in connection with an actual or threatened election contest, including
but not limited to a consent solicitation, relating to the election of Directors
of the Company will not be considered as incumbent members of the Board for
purposes of this Section; or

 

(d) there is a complete liquidation or dissolution of the Company, or the
Company sells all or substantially all of its business and/or assets to another
corporation or other Person unless, following such sale, more than 50% of the
combined voting power of the outstanding securities of the acquiring corporation
or Person or its parent entity entitled to vote generally in the election of
directors (or Persons performing similar functions) is then beneficially owned,
directly or indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners of the Company’s outstanding securities
entitled to vote generally in the election of directors immediately prior to
such sale, in substantially the same proportions as their ownership, immediately
prior to such sale, of the Company’s outstanding securities entitled to vote
generally in the election of directors.

 

In no event, however, shall a Change in Control be deemed to have occurred, with
respect to a Participant, if that Participant is part of a purchasing group
which consummates the Change in Control transaction. A Participant shall be
deemed “part of a purchasing group” for purposes of the preceding sentence if
the Participant is an equity participant or has agreed to become an equity
participant in the purchasing company or group (except for (a) passive ownership
of less than 3% of the shares of the purchasing company; or (b) ownership of
equity participation in the purchasing company or group which is otherwise not
deemed to be significant, as determined prior to the Change in Control by a
majority of the disinterested Directors).

 

Section 10. Payment of Taxes.

 

(a) In connection with any Award, and as a condition to the issuance or delivery
of any Shares to the Participant in connection therewith, the Company shall
require the Participant to pay the Company the minimum amount of federal, state,
local or foreign taxes required to be withheld, and in the Company’s sole
discretion, the Company may permit the Participant to pay the Company up to the
maximum individual statutory rate of applicable withholding.

 

(b) The Company in its sole discretion may make available one or more of the
following alternatives for the payment of such taxes: (i) in cash; (ii) in cash
received from a broker-dealer to whom the Participant has submitted notice
together with irrevocable instructions to deliver promptly to the Company the
amount of sales proceeds from the sale of the Shares subject to the Award to pay
the withholding taxes; (iii) by directing the Company to withhold such number of
Shares otherwise issuable in connection with the Award having an aggregate Fair
Market Value equal to the minimum amount of tax required to be withheld; (iv) by
delivering previously acquired Shares of the Company that are acceptable to the
Board that have an aggregate Fair Market Value equal to the amount required to
be withheld; or (v) by certifying to ownership by attestation of such previously
acquired Shares.

 

 

 

 

The Committee shall have the sole discretion to establish the terms and
conditions applicable to any alternative made available for payment of the
required withholding taxes.

 

Section 11. Section 409A.

 

Notwithstanding any other provision of the Plan, the Committee shall have no
authority to issue an Award under the Plan with terms and/or conditions which
would cause such Award to constitute non-qualified “deferred compensation” under
Section 409A of the Code unless such Award shall be structured to be exempt from
or comply with all requirements of Code Section 409A. The Plan and all Award
Agreements are intended to comply with the requirements of Section 409A of the
Code (or to be exempt therefrom) and shall be so interpreted and construed and
no amount shall be paid or distributed from the Plan unless and until such
payment complies with all requirements of Code Section 409A. It is the intent of
the Company that the provisions of this Agreement and all other plans and
programs sponsored by the Company be interpreted to comply in all respects with
Code Section 409A, however, the Company shall have no liability to the
Participant, or any successor or beneficiary thereof, in the event taxes,
penalties or excise taxes may ultimately be determined to be applicable to any
payment or award under the Plan.

 

Section 12. Postponement.

 

The Committee may postpone any grant or settlement of an Award or exercise of a
Stock Option or SAR for such time as the Board in its sole discretion may deem
necessary in order to permit the Company:

 

(a) to effect, amend or maintain any necessary registration of the Plan or the
Shares issuable pursuant to an Award, including upon the exercise of a Stock
Option or SAR, under the Securities Act of 1933, as amended, or the securities
laws of any applicable jurisdiction;

 

(b) to permit any action to be taken in order to (i) list such Shares on a stock
exchange if Shares are then listed on such exchange or (ii) comply with
restrictions or regulations incident to the maintenance of a public market for
its Shares, including any rules or regulations of any stock exchange on which
the Shares are listed; or

 

(c) to determine that such Shares and the Plan are exempt from such registration
or that no action of the kind referred to in (b)(ii) above needs to be taken;
and the Company shall not be obligated by virtue of any terms and conditions of
any Award or any provision of the Plan to sell or issue Shares in violation of
the Securities Act of 1933 or the law of any government having jurisdiction
thereof.

 

Any such postponement shall not extend the term of an Award and shall comply
with all requirements of Code Section 409A, and neither the Company nor its
Directors or officers shall have any obligation or liability to a Participant,
the Participant’s successor or any other person with respect to any Shares as to
which the Award shall lapse because of such postponement.

 

Section 13. Nontransferability.

 

Awards granted under the Plan, and any rights and privileges pertaining thereto,
may not be transferred, assigned, pledged or hypothecated in any manner, or be
subject to execution, attachment or similar process, by operation of law or
otherwise, except (i) by will or by the laws of descent and distribution, or
(ii) where permitted under applicable tax rules, by gift to any Family Member of
the Participant, subject to compliance with applicable laws. An Award may be
exercisable during the lifetime of the Participant only by such Participant or
by the Participant’s guardian or legal representative unless it has been
transferred by gift to a Family Member of the Participant, in which case it
shall be exercisable solely by such transferee. Notwithstanding any such
transfer, the Participant shall continue to be subject to the withholding
requirements provided for under Section 10.

 

Section 14. Delivery of Shares.

 

Shares issued pursuant to a Stock Award, the exercise of a Stock or SAR or the
settlement of a Stock Unit Award shall be represented by share certificates or
on a non-certificated basis, with the ownership of such Shares by the
Participant evidenced solely by book entry in the records of the Company’s
transfer agent; provided, however, that upon the written request of the
Participant, the Company shall issue, in the name of the Participant, share
certificates representing such Shares. Notwithstanding the foregoing, Shares
granted pursuant to a Stock Award shall be held by the Secretary of the Company
until such time as the Shares are forfeited or settled.

 

 

 

 

Section 15. Termination or Amendment of Plan and Award Agreements.

 

15.1 Termination or Amendment of Plan.

 

(a) Except as described in Section 15.3 below, the Board may terminate, suspend,
or amend the Plan, in whole or in part, from time to time, without the approval
of the shareholders of the Company, unless such approval is required by
applicable law, regulation or rule of any stock exchange on which the Shares are
listed. No amendment or termination of the Plan shall adversely affect the right
of any Participant under any outstanding Award in any material way without the
written consent of the Participant, unless such amendment or termination is
required by applicable law, regulation or rule of any stock exchange on which
the Shares are listed. Subject to the foregoing, the Committee may correct any
defect or supply an omission or reconcile any inconsistency in the Plan or in
any Award granted hereunder in the manner and to the extent it shall deem
desirable, in its sole discretion, to effectuate the Plan.

 

(b) The Board shall have the authority to amend the Plan to the extent necessary
or appropriate to comply with applicable law, regulation or accounting rules in
order to permit Participants who are located outside of the United States to
participate in the Plan.

 

15.2 Amendment of Award Agreements.

 

The Committee shall have the authority to amend any Award Agreement at any time;
provided however, that no such amendment shall adversely affect the right of any
Participant under any outstanding Award Agreement in any material way without
the written consent of the Participant, unless such amendment is required by
applicable law, regulation or rule of any stock exchange on which the Shares are
listed.

 

15.3 No Repricing of Stock Options.

 

Notwithstanding the foregoing, and except as described in Section 4.3, there
shall be no amendment to the Plan or any outstanding Stock Option Agreement or
SAR Agreement that results in the repricing of Stock Options or SARs without
shareholders’ approval. For this purpose, repricing includes (i) a reduction in
the exercise price of the Stock Option or SARs or (ii) the cancellation of a
Stock Option in exchange for cash, Stock Options or SARs with an exercise price
less than the exercise price of the cancelled Options or SARs, other Awards or
any other consideration provided by the Company, but does not include any
adjustment described in Section 4.3.

 

Section 16. No Contract of Employment.

 

Neither the adoption of the Plan nor the grant of any Award under the Plan shall
be deemed to obligate the Company or any Subsidiary to continue the employment
of any Participant for any particular period, nor shall the granting of an Award
constitute a request or consent to postpone the retirement date of any
Participant.

 

Section 17. Applicable Law.

 

All questions pertaining to the validity, construction and administration of the
Plan and all Awards granted under the Plan shall be determined in conformity
with the laws of the state of Nevada, without regard to the conflict of law
provisions of any state, and, in the case of Incentive Stock Options, Section
422 of the Code and regulations issued thereunder.

 

 

 

 

Section 18. Effective Date and Term of Plan.

 

18.1 Effective Date.

 

The Plan shall be effective as of the Effective Date, provided that the Plan is
approved by the shareholders of the Company within twelve (12) months of such
date. Awards may be granted or awarded prior to such shareholder approval,
provided that such Awards shall not be exercisable, shall not vest and the
restrictions thereon shall not lapse prior to the time when the Plan is approved
by the shareholders, and provided further that if such approval has not been
obtained at the end of said twelve month period, all Awards previously granted
or awarded under the Plan shall thereupon be canceled and become null and void.
The Plan is intended to supersede and replace any and all prior equity plans
sponsored by the Company with respect to any authorized shares not made subject
to any award under such plans prior to the effective date of this Plan. Any
outstanding awards under prior plans shall continue to be subject to and
governed by the terms of such plans.

 

18.2 Term of Plan.

 

Notwithstanding anything to the contrary contained herein, no Awards shall be
granted on or after the tenth anniversary of the adoption of this Plan.

 

PLAN ADOPTION AND AMENDMENTS/ADJUSTMENTS

SUMMARY PAGE

 

Date of Board

Action

  Action  

Section/Effect

of Amendment

 

Date of Shareholder

Approval

August 21, 2020   Initial Plan Adoption       ________, 202__