Exhibit 10.1








EXECUTIVE
EMPLOYMENT AGREEMENT





 


This
EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of the January 11,
2021, by and between Red Cat Holdings, Inc., a Nevada corporation (“Parent”), Fat Shark Holdings, LTD., a Cayman
Islands Exempted Company (“Company”) and Allan Evans, an individual (“Executive”). As used herein,
the “Effective Date”
of this
Agreement
shall
mean January
_1_1,
2021.


W
I T N E S S E T H:


 


WHEREAS,
the Executive desires to be employed by the Company as Chief Executive Officer and the Company wishes to employ the Executive
in such capacity; and


 


WHEREAS,
inasmuch as Section 16(a) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) requires the filing
of certain beneficial ownership reports by certain officers who perform a policy- making function, Executive shall become obligated
to file reports of beneficial ownership pursuant to Section 16(a) of the Exchange Act of Parent on and following the Effective
Date; and it is further


 


NOW,
THEREFORE, in consideration of the foregoing and their respective covenants and agreements contained in this document, Parent,
the Company and the Executive hereby agree as follows:


 


1.
Employment and Duties. The Company agrees to employ and the Executive agrees to serve as the Company’s Chief Executive
Officer. The duties and responsibilities of the Executive shall include the duties and responsibilities as the Company’s
Board of Directors (“Board”) may from time to time assign to the Executive and reasonably commensurate with
those duties and responsibilities normally associated with and appropriate for someone in the position of Chief Executive Officer.
As used herein, “Board” and “Compensation Committee” shall include the Board of Directors and Compensation
Committee of Parent, which shall be required to approve and authorize all actions of the Board and Compensation Committees of
the Company, as defined herein


 


The
Executive shall devote all of his business time and best efforts to the performance of his duties under this Agreement and shall
be subject to, and shall comply with the Company policies, practices and procedures and all codes of ethics or business conduct
applicable to his position, as in effect from time to time. Notwithstanding the foregoing, the Executive shall be entitled to
(i) serve as a member of the board of directors of a reasonable number of companies, subject to the advance approval of the Board,
which approval shall not be unreasonably withheld, conditioned or delayed; (ii) serve on civic, charitable, educational, religious,
public interest or public service boards, subject to the advance approval of the Board, which approval shall not be unreasonably
withheld, and (iii) manage the Executive’s personal and family investments, in each case, to the extent such activities
do not materially interfere, as determined by the Board in good faith, with the performance of the Executive’s duties and
responsibilities hereunder.


 


2.
Term. The term of this Agreement shall commence on the Effective Date and shall continue for a period of one (1) year following
the Effective Date and shall be automatically renewed for successive one (1) year periods thereafter unless either party provides
the other party with written notice of his or its intention not to renew this Agreement at least three (3) months prior to the
expiration of the initial term or any renewal term of this Agreement. “Employment Period” shall mean the initial
one (1) year term plus renewals, if any.


 


3.
Place of Employment. The Executive’s services shall be performed at the Company’s offices located at Cayman
Enterprise City, 90 North Church Street, George Town, Grand Cayman, Cayman Islands, P.O. Box CEC 30 Grand Cayman, KY1-9012, or
such other location(s) as mutually agreed upon in writing between the Company and the Executive.


 


4.
Base Salary. The Company agrees to pay the Executive a base salary (“Base Salary”) equal to the greater
of: (A) the salary paid to Executive immediately prior to the Effective date and (B) seventy (70%) percent of the salary of the
Parent’s Chief Executive Officer then in effect. The Base Salary shall be paid in periodic installments in accordance with
the Company’s regular payroll practices. The Base Salary may only be increased but not decreased without the written consent
of the Executive.





(a)
Annual Bonus. The Executive shall be eligible to receive an annual bonus the (“Annual Bonus”) of up to one-hundred
(100%) percent of the Base Salary, to be paid in cash, as reasonably determined by the Compensation Committee and/or the Board
of Directors of the Company (the “Compensation Committee”). The Annual Bonus shall be paid by the Company to
the Executive promptly after determination that the relevant targets, if any, have been met, it being understood that the attainment
of any financial targets associated with any bonus shall not be determined until following the completion of the Company’s
annual audit and public announcement of such results and shall be paid promptly following the Company’s announcement of
earnings, subject to cash availability. In the event that the Compensation Committee is unable to act or if there shall be no
such Compensation Committee, then all references herein to the Compensation Committee (except in the proviso to this sentence)
shall be deemed to be references to the Board. Upon his termination from employment, the Executive shall be entitled to receive
a pro- rata portion of the Annual Bonus calculated based upon the last day of the fiscal quarter in which his employment is terminated,
regardless of whether he is employed by the Company through the conclusion of the fiscal quarter or year, as the case may be,
on which the Annual Bonus is based. The Annual Bonus shall be paid no later than one-hundred and eighty (180) days following the
end of the fiscal year of Parent in which the Annual Bonus is earned, subject to cash availability. Executive and the Compensation
Committee will work to define a set of goals and objectives for the term of the Agreement as a basis for determining a bonus award(s).
Such goals will be quantitative as well as qualitative in nature.


 


(b)
  Equity Awards. Executive shall receive an initial
award (the “Initial Award”) and be eligible for such grants of awards under the Parent’s 2019 Equity
Incentive Plan (or any successor or replacement plan adopted by the Board and approved by the stockholders of the Company) (the
“Plan”) as the Compensation Committee or Board may from time to time determine (the “Share Awards”).
The Initial Award shall be as set forth on Exhibit A annexed hereto vesting as set forth (the “Executive Vesting Schedule”).
Share Awards shall be subject to the applicable Plan terms and conditions, provided, however, that Share Awards shall be subject
to any additional terms and conditions as are provided herein or in any award, Board resolution or certificate(s), which shall
supersede any conflicting provisions governing Share Awards provided under the Plan.


 


6.
Severance Compensation.




 


(a)
Upon termination of employment for any reason, the Executive shall be entitled to: (A) all Base Salary earned through the date
of termination to be paid according to Section 4; (B) any Annual Bonuses, pro-rated, to be paid in accordance with Section 5(a)
above.; (C) all accrued but unused vacation time, and (d) reimbursement of all reasonable expenses as set forth in Section 8.


 


(b)
Upon termination of employment by Company for any reason other than for cause (“Cause”) as defined in Section
11(c), or upon termination of employment by Executive for good reason (“Good Reason”) as defined in Section
11(d)(1), Executive shall be entitled to receipt of all vested and unvested shares contemplated in the Executive Award in accord
with the Executive Vesting Schedule as if no termination occurred.


 


(c)
In the event of a termination by the Company without Cause, by the Executive for Good Reason or by the Executive within one hundred
eighty days (180) days of the occurrence of a Change of Control (as defined below) and subject to the additional provisions of
Section 11(d)(3), then in addition to the severance compensation set forth in Section 6(a) and 6(b), Executive shall also be entitled
to the following enhanced separation benefits (“Enhanced Separation Benefits”): (i) the greater of Executive’s
continued Base Salary through the balance of the Employment Period, as renewed, or twelve (12) months of Executive’s then
Base Salary; (ii) continued participation in Company welfare benefit plans (including health benefits) on the same terms as immediately
prior to termination and to be paid in full by the Company for the period of time set forth in this Section 6(c) (not to be less
than twelve


(12)
months of continuation of benefits) and (iii) immediate vesting of all stock options/equity awards.


 


(d)
  Upon termination of Executive’s continued benefits
(either pursuant to Section 6(a), 6(b) or 6(c) as the case may be), the Executive may continue coverage with respect to the Company’s
group health plans as permitted by the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) for himself
and each of his “Qualified Beneficiaries” as defined by COBRA (“COBRA Coverage”). The Company
shall reimburse the amount of any COBRA premium paid for COBRA Coverage timely elected by and for the Executive and any Qualified
Beneficiary of the Executive, and not otherwise reimbursed, during the period that ends on the earliest of (x) the date the Executive
or the Qualified Beneficiary, as the case may be, ceases to be eligible for COBRA Coverage, (y) the last day of the consecutive
eighteen (18) month period following the date of the Executive’s termination of employment and (z) the date the Executive
or the Qualified Beneficiary, as the case may be, is covered by another group health plan. To reimburse any COBRA premium payment
under this paragraph, the Company must receive documentation of the COBRA premium payment within ninety (90) days of its payment.


 


7.
Clawback Rights. The Annual Bonus, and any and all stock based compensation (such as options and equity awards) (collectively,
the “Clawback Benefits”) shall be subject to “Clawback Rights” as follows: during the period
that the Executive is employed by the Company and upon the termination of the Executive’s employment and for a period of
three (3) years thereafter, if there is a restatement of any financial results from which any metrics were determined to be achieved
which were the basis of the granting and calculation of such Clawback Benefits to the Executive, the Executive agrees to repay
any amounts which were determined by reference to any Company financial results which were later restated (as defined below),
to the extent the Clawback Benefits amounts paid exceed the Clawback Benefits amounts that would have been paid, based on the
restatement of the Company’s financial information. All Clawback Benefits amounts resulting from such restated financial
results shall be retroactively adjusted by the Compensation Committee to take into account the restated results, and any excess
portion of the Clawback Benefits resulting from such restated results shall be immediately surrendered to the Company and if not
so surrendered within ninety (90) days of the revised calculation being provided to the Executive by the Compensation Committee
following a publicly announced restatement, the Company shall have the right to take any and all action to effectuate such adjustment.
The calculation of the revised Clawback Benefits amount shall be determined by the Compensation Committee in good faith and in
accordance with applicable law, rules and regulations. All determinations by the Compensation Committee with respect to the Clawback
Rights shall be final and binding on the Company and the Executive. The Clawback Rights shall terminate following a Change of
Control as defined in Section 11(f), subject to applicable law, rules and regulations. For purposes of this Section 7, a restatement
of financial results that requires a repayment of a portion of the Clawback Benefits amounts shall mean a restatement resulting
from material non-compliance of the Company with any financial reporting requirement under the federal securities laws and shall
not include a restatement of financial results resulting from subsequent changes in accounting pronouncements or requirements
which were not in effect on the date the financial statements were originally prepared (“Restatements”). The
parties acknowledge it is their intention that the foregoing Clawback Rights as relates to Restatements conform in all respects
to the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”)
and require recovery of all “incentive-based” compensation, pursuant to the provisions of the Dodd-Frank Act and any
and all rules and regulations promulgated thereunder from time to time in effect. Accordingly, the terms and provisions of this
Agreement shall be deemed automatically amended from time to time to assure compliance with the Dodd-Frank Act and such rules
and regulations as hereafter may be adopted and in effect.


 


8.
Expenses. The Executive shall be entitled to prompt reimbursement by the Company for all reasonable ordinary and necessary
travel, entertainment, and other expenses incurred by the Executive while employed (in accordance with the policies and procedures
established by the Company for its senior executive officers) in the performance of his duties and responsibilities under this
Agreement; provided, that the Executive shall properly account for such expenses in accordance with Company policies and procedures.
Reimbursement of such expenses shall be paid out even after Executive’s termination for any reason, so long as the expenses
were incurred during Executive’s employment with the Company.


 


9.
Other Benefits. During the term of this Agreement, the Executive shall be eligible to participate in incentive, stock purchase,
savings, retirement (401(k)), and welfare benefit plans, including, without limitation, health, medical, dental, vision, life
(including accidental death and dismemberment) and disability insurance plans (collectively, “Benefit Plans”),
in substantially the same manner and at substantially the same levels as the Parent makes such opportunities available to the
Parent’s managerial or salaried executive employees and/or its senior executive officers.


 


10.
 Vacation. During the term of this Agreement, the Executive shall be entitled to accrue, on a pro rata basis, thirty (30)
paid vacation days per year. Vacation shall be taken at such times as are mutually convenient to the Executive and the Company
and no more than fifteen (15) consecutive days shall be taken at any one time without Company approval in advance.


 


11.
Termination of Employment.




 


(a)
Death. If the Executive dies during the Employment Period, this Agreement and the Executive’s employment with the
Company shall automatically terminate and the Company’s obligations to the Executive’s estate and to the Executive’s
Qualified Beneficiaries shall be those set forth in Section 6(a) and 6(d) regarding severance compensation.


 


(b)
Disability. In the event that, during the term of this Agreement the Executive shall be prevented from performing his essential
functions hereunder to the full extent required by the Company by reason of Disability (as defined below), this Agreement and
the Executive’s employment with the Company shall automatically terminate. The Company’s obligation to the Executive
under such circumstances shall be those set forth in Section 6(a) and 6(d) regarding severance compensation. For purposes of this
Agreement, “Disability” shall mean a physical or mental disability that prevents the performance by the Executive,
with or without reasonable accommodation, of his essential functions hereunder for an aggregate of ninety (90) days or longer
during any twelve (12) consecutive months. The determination of the Executive’s Disability shall be made by an independent
physician who is reasonably acceptable to the Company and the Executive (or his representative), be final and binding on the parties
hereto and be made taking into account such competent medical evidence as shall be presented to such independent physician by
the Executive and/or the Company or by any physician or group of physicians or other competent medical experts employed by the
Executive and/or the Company to advise such independent physician.


 


(c)
Cause.




 


(1)
At any time during the Employment Period, the Company may terminate this Agreement and the Executive’s employment hereunder
for Cause. For purposes of this Agreement, “Cause” shall mean: (a) the willful and continued failure of the
Executive to perform substantially his material duties and responsibilities for the Company or Parent (other than any such failure
resulting from the Executive’s death or Disability) after a written demand by the Board for substantial performance is delivered
to the Executive, which specifically identifies the manner in which the Board believes that the Executive has not substantially
performed his duties and responsibilities, which willful and continued failure is not cured by the Executive within thirty (30)
days following his receipt of such written demand; (b)   the
conviction of, or plea of guilty or nolo contendere to, a felony, or (c) fraud, dishonesty or gross misconduct which is
materially and demonstratively injurious to the Company or Parent. Termination under clauses (b) or (c) of this Section 11(c)(1)
shall not be subject to cure.


 


(2)
For purposes of this Section 11(c), no act, or failure to act, on the part of the Executive shall be considered “willful”
unless done, or omitted to be done, by him in bad faith and without reasonable belief that his action or omission was in, or not
opposed to, the best interest of the Company or Parent. Between the time the Executive receives written demand regarding substantial
performance, as set forth in subparagraph (1) above, and prior to an actual termination for Cause, the Executive will be entitled
to appear (with counsel) before the full Board to present information regarding his views on the Cause event. Under no circumstances
shall Executive be terminated under Section 11(c)(1)(a) before the expiration of the 30 day cure period. After such hearing, termination
for Cause must be approved by a majority vote of the full Board (other than the Executive). For terminations pursuant to Sections
11(c)(1)(b) and (c), the Board may suspend the Executive with full pay and benefits until a final determination by the full Board
has been made.


 


(3)
Upon termination of this Agreement for Cause, the Company shall have no further obligations or liability to the Executive or his
heirs, administrators or executors with respect to compensation and benefits thereafter, except for the obligation to pay the
Executive pursuant to Section 6(a). The Company shall deduct, from all payments made hereunder, all applicable taxes, including
income tax, FICA and FUTA, and other appropriate deductions.


 


(d)
For Good Reason or a Change of Control or Without Cause.




 


(1)
  At any time during the term of this Agreement and subject
to the conditions set forth in Section 11(d)(2) below, the Executive may terminate this Agreement and the Executive’s employment
with the Company for “Good Reason” or on account of a “Change of Control” (as defined in Section 11(f)).
For purposes of this Agreement, “Good Reason” shall mean the occurrence of any of the following events without
Executive’s consent: (A) the assignment to the Executive of duties that are significantly different from, and/or that result
in a substantial diminution of, the duties that he assumed on the Effective Date (including reporting to anyone other than solely
and directly to the Board); (B) the assignment to the Executive of a title that is different from and subordinate to the Chief
Executive Officer of the Company, provided, however, for the absence of doubt following a Change of Control, should the Executive
be required to serve in a diminished capacity in a division or unit of another entity (including the acquiring entity), such event
shall constitute Good Reason regardless of the title of the Executive in such acquiring company, division or unit; (C) material
breach by the Company or Parent of this Agreement, or (D) a required relocation of the Executive's place of employment (as defined
in Section 3) by more than a 50 mile radius.


 


(2)
The Executive shall not be entitled to terminate this Agreement for Good Reason unless and until he shall have delivered written
notice to the Company within ninety (90) days of the date upon which the facts giving rise to Good Reason occurred of his intention
to terminate this Agreement and his employment with the Company for Good Reason, which notice specifies in reasonable detail the
circumstances claimed to provide the basis for such termination for Good Reason, and the Company shall not have eliminated the
circumstances constituting Good Reason within thirty (30) days of its receipt from the Executive of such written notice. In the
event the Executive elects to terminate this Agreement for Good Reason in accordance with Section 11(d)(1), such election must
be made within the eighty (180) days following the initial existence of one or more of the conditions constituting Good Reason
as provided in Section 11(d)(1). In the event the Executive elects to terminate this Agreement for a Change in Control in accordance
with Section 11(d)(1), such election must be made within one hundred eighty (180) days of the occurrence of the Change of Control.


 


(3)
In the event that the Executive terminates this Agreement and his employment with the Company for Good Reason or within one hundred
eighty (180) days of the occurrence of a Change of Control, or the Company terminates this Agreement and the Executive’s
employment with the Company without Cause, the Company shall pay or provide to the Executive (or, following his death, to the
Executive’s heirs, administrators or executors) the Enhanced Separation Benefits set forth in Sections 6(c) and 6(d); provided,
that the Executive executes an agreement releasing Company and its affiliates from any liability associated with this Agreement
(excepting any payment obligations) and such release is irrevocable at the time the separation payment is first payable under
this Section 11 and the Executive complies with his other obligations under Sections 12 and 13 of this Agreement. Subject to the
terms hereof, one-half (1/2) of the compensation of the Enhanced Separation Benefits payment shall be paid within thirty (30)
days of the Executive’s termination of employment (“Initial Payment”), provided that the Executive has executed
a release (excepting payment obligations) and that if the release execution period begins in one taxable year and ends in another
taxable year, the Initial Payment shall not be made until the beginning of the taxable year immediately following termination.
The balance of the compensation of the Enhanced Separation Benefits shall be paid in substantially equal installments on the Company’s
regular payroll dates beginning with the first payroll date coincident with or immediately following the Initial Payment and ending
on the payroll date coincident with or immediately following the twelve (12) month anniversary of the Initial Payment. The Company
shall deduct, from all payments made hereunder, all applicable taxes, including income tax, FICA and FUTA, and other appropriate
deductions.


 


(4)
The Executive shall not be required to mitigate the amount of any payment provided for in this Section 11(d) by seeking other
employment or otherwise, nor shall the amount of any payment provided for in this Section 11(d) be reduced by any compensation
earned by the Executive as the result of employment by another employer or business or by profits earned by the Executive from
any other source at any time before and after the termination date. The Company’s obligation to make any payment pursuant
to, and otherwise to perform its obligations under, this Agreement shall not be affected by any offset, counterclaim or other
right that the Company may have against the Executive for any reason.


 


(e)
Without “Good Reason” by the Executive. At any time during the term of this Agreement, the Executive shall
be entitled to terminate this Agreement and the Executive’s employment with the Company without Good Reason and other than
for a Change of Control by providing prior written notice of at least thirty (30) days to
the Company. Upon termination by the Executive of this Agreement or the Executive’s employment with the Company without
Good Reason and other than for a Change of Control, the Company shall have no further obligations or liability to the Executive
or his heirs, administrators or executors with respect to compensation and benefits thereafter, except for the obligations set
forth in Sections 6(a). The Company shall deduct, from all payments made hereunder, all applicable taxes, including income tax,
FICA and FUTA, and other appropriate deductions.





(f)
Change of Control. For purposes of this Agreement, “Change of Control” shall mean the occurrence of
any one or more of the following: (i) the accumulation (if over time, in any consecutive twelve (12) month period), whether directly,
indirectly, beneficially or of record, by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended) of more than fifty percent (50%) or more of the shares of the outstanding
Common Stock of the Company or Parent, whether by merger, consolidation, sale or other transfer of shares of Common Stock (other
than a merger or consolidation where the stockholders of the Company or Parent prior to the merger or consolidation are the holders
of a majority of the voting securities of the entity that survives such merger or consolidation) for purposes of clarity the Company
or Parent expects to sell a number of shares and/or convert outstanding senior debt and/or preferred stock to either preferred
or common stock not limited to the period of this contract to raise funds and stabilize its balance sheet and any such sales shall
not constitute a change of control for purposes of this section or Agreement, (ii) a sale of all or substantially all of the assets
of the Company or Parent or (iii) during any period of twelve (12) consecutive months, the individuals who, at the beginning of
such period, constitute the Parent, and any new director whose election by the Board or nomination for election by the Company’s
or Parent’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either
were directors at the beginning of the twelve (12) month period or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority of the Board.


 


(g)
Any termination of the Executive’s employment by the Company or by the Executive (other than termination by reason of the
Executive’s death) shall be communicated by written Notice of Termination to the other party of this Agreement. For purposes
of this Agreement, a “Notice of Termination” shall mean a written notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of the Executive’s employment under the provision so indicated, provided, however, failure
to provide timely notification shall not affect the employment status of the Executive.


 


12.
Confidential Information.




 


(a)
Disclosure of Confidential Information. The Executive recognizes, acknowledges and agrees that he has had and will continue
to have access to secret and confidential information regarding the Company and Parent, its subsidiaries and their respective
businesses (“Confidential Information”), including but not limited to, its products, methods, formulas, software
code, patents, sources of supply, customer dealings, data, know-how, trade secrets and business plans, provided such information
is not in or does not hereafter become part of the public domain, or become known to others through no fault of the Executive.
The Executive acknowledges that such information is of great value to the Company and Parent, is the sole property of the Company
and Parent, and has been and will be acquired by him in confidence. In consideration of the obligations undertaken by the Company
herein, the Executive will not, at any time, during or after his employment hereunder, reveal, divulge or make known to any person,
any information acquired by the Executive during the course of his employment, which is treated as confidential by the Company
or Parent, and not otherwise in the public domain. The provisions of this Section 12 shall survive the termination of the Executive’s
employment hereunder.


 


(b)
The Executive affirms that he does not possess and will not rely upon the protected trade secrets or confidential or proprietary
information of any prior employer(s) in providing services to the Company or its subsidiaries.


 


(c)
In the event that the Executive’s employment with the Company terminates for any reason, the Executive shall deliver forthwith
to the Company any and all originals and copies, including those in electronic or digital formats, of Confidential Information;
provided, however, the Executive shall be entitled to retain (i) papers and other materials of a personal nature, including, but
not limited to, photographs, correspondence, personal diaries, calendars and rolodexes, personal files and phone books, (ii) information
showing his compensation or relating to reimbursement of expenses, (iii) information that he reasonably believes may be needed
for tax purposes and (iv) copies of plans, programs and agreements relating to his employment, or termination thereof, with the
Company.


 


13.
Section 409A.







The
provisions of this Agreement are intended to comply with or are exempt from Section 409A of the Code (“Section 409A”)
and the related Treasury Regulations and shall be construed in a manner consistent with the requirements for avoiding taxes or
penalties under Section 409A. The Company and the Executive agree to work together in good faith to consider amendments to this
Agreement and to take such reasonable actions necessary, appropriate or desirable to avoid imposition of any additional tax under
Section 409A or income recognition prior to actual payment to the Executive under this Agreement.


 


It
is intended that any expense reimbursement made under this Agreement shall be exempt from Section 409A. Notwithstanding the foregoing,
if any expense reimbursement made under this Agreement shall be determined to be “deferred compensation” subject to
Section 409A (“Deferred Compensation”), then (a) the right to reimbursement or in-kind benefits is not subject
to liquidation or exchange for another benefit, (b) the amount of expenses eligible for reimbursement, or in-kind benefits, provided
during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other
taxable year (provided that this clause (b) shall not be violated with regard to expenses reimbursed under any arrangement covered
by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period the arrangement is in
effect) and (c) such payments shall be made on or before the last day of the taxable year following the taxable year in which
the expense was incurred.


 


With
respect to the time of payments of any amount under this Agreement that is Deferred Compensation, references in the Agreement
to “termination of employment” and substantially similar phrases, including a termination of employment due to the
Executive’s Disability, shall mean “Separation from Service” from the Company within the meaning of Section
409A (determined after applying the presumptions set forth in Treasury Regulation Section 1.409A-1(h)(1)). Each installment payable
hereunder shall constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b), including Treasury Regulation
Section 1.409A-2(b)(2)(iii). Each payment that is made within the terms of the “short-term deferral” rule set forth
in Treasury Regulation Section 1.409A-1(b)(4) is intended to meet the “short-term deferral” rule. Each other payment
is intended to be a payment upon an involuntary termination from service and payable pursuant to Treasury Regulation Section 1.409A-1(b)(9)(iii),
et. seq., to the maximum extent permitted by that regulation, with any amount that is not exempt from Code Section 409A being
subject to Code Section 409A.


 


Notwithstanding
anything to the contrary in this Agreement, if the Executive is a “specified employee” within the meaning of Section
409A at the time of the Executive’s termination, then only that portion of the severance and benefits payable to the Executive
pursuant to this Agreement, if any, and any other severance payments or separation benefits which may be considered Deferred Compensation
(together, the “Deferred Separation Benefits”), which (when considered together) do not exceed the Section
409A Limit (as defined herein) may be made within the first six (6) months following the Executive’s termination of employment
in accordance with the payment schedule applicable to each payment or benefit. Any portion of the Deferred Separation Benefits
in excess of the Section 409A Limit otherwise due to the Executive on or within the six (6) month period following the Executive’s
termination will accrue during such six (6) month period and will become payable in one lump sum cash payment on the date six
(6) months and one (1) day following the date of the Executive’s termination of employment. All subsequent Deferred Separation
Benefits, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding
anything herein to the contrary, if the Executive dies following termination but prior to the six (6) month anniversary of the
Executive’s termination date, then any payments delayed in accordance with this paragraph will be payable in a lump sum
as soon as administratively practicable after the date of the Executive’s death and all other Deferred Separation Benefits
will be payable in accordance with the payment schedule applicable to each payment or benefit.


 


For
purposes of this Agreement, “Section 409A Limit” shall mean a sum equal to (x) the amounts payable within the
terms of the “short-term deferral” rule under Treasury Regulation Section 1.409A-1(b)(4) plus (y) the amount payable
as “separation pay due to involuntary separation from service” under Treasury Regulation Section 1.409A-1(b)(9)(iii)
equal to the lesser of two (2) times: (i) the Executive’s annualized compensation from the Company based upon his annual
rate of pay during the Executive’s taxable year preceding his taxable year when his employment terminated, as determined
under Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1); and (ii) the maximum amount that may be taken into account under a qualified
plan pursuant to Section 401(a)(17) of the Code for the year in which the Executive’s employment is terminated.


 


14.
Miscellaneous.




 


(a)
Neither the Executive nor the Company may assign or delegate any of their rights or duties under this Agreement without the express
written consent of the other; provided, however, that the Company shall have the right to delegate its obligation of payment of
all sums due to the Executive hereunder, provided that such delegation shall not relieve the Company of any of its obligations
hereunder.


 


(b)
During the term of this Agreement, the Company (i) shall indemnify and hold harmless the Executive and his heirs and representatives
to the maximum extent provided by the laws of the Cayman Islands and by the Company’s bylaws and (ii) shall cover the Executive
under the Company’s directors’ and officers’ liability insurance on the same basis as it covers other senior
executive officers and directors of the Company.


 


(c)
This Agreement constitutes and embodies the full and complete understanding and agreement of the parties with respect to the Executive’s
employment by the Company, supersedes all prior understandings and agreements, whether oral or written, between the Executive
and the Company, and shall not be amended, modified or changed except by an instrument in writing executed by the party to be
charged. The invalidity or partial invalidity of one or more provisions of this Agreement shall not invalidate any other provision
of this Agreement. No waiver by either party of any provision or condition to be performed shall be deemed a waiver of similar
or dissimilar provisions or conditions at the same time or any prior or subsequent time.


 


(d)
This Agreement shall inure to the benefit of, be binding upon and enforceable against, the parties hereto and their respective
successors, heirs, beneficiaries and permitted assigns.


 


(e)
The headings contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.


 


(f)
All notices, requests, demands and other communications required or permitted to be given hereunder shall be in writing and shall
be deemed to have been duly given when personally delivered, sent by registered or certified mail, return receipt requested, postage
prepaid, or by reputable national overnight delivery service (e.g., Federal Express) for overnight delivery to the party at the
address set forth in the preamble to this Agreement, or to such other address as either party may hereafter give the other party
notice of in accordance with the provisions hereof. Notices shall be deemed given on the sooner of the date actually received
or the third business day after deposited in the mail or one business day after deposited with an overnight delivery service for
overnight delivery.


 


(g)
This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware, and each of the
parties hereto irrevocably consents to the jurisdiction and venue of the federal and state courts located in the State of Delaware
for any disputes arising out of this Agreement, or the Executive’s employment with the Company. The prevailing party in
any dispute arising out of this Agreement shall be entitled to his or its reasonable attorney’s fees and costs.


 


(h)
This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one of the same instrument. The parties hereto have executed this Agreement as of the date
set forth above.


 


(i)
The Executive represents and warrants to the Company, that he has the full power and authority to enter into this Agreement and
to perform his obligations hereunder and that the execution and delivery of this Agreement and the performance of his obligations
hereunder will not conflict with any agreement to which the Executive is a party.


 


(j)
The Company represents and warrants to the Executive that it has the full power and authority to enter into this Agreement and
to perform its obligations hereunder and that the execution and delivery of this Agreement and the performance of its obligations
hereunder will not conflict with any agreement to which the Company is a party.


 


[Signature
page follows immediately]




    	 



    	 



    

 





IN
WITNESS WHEREOF, the Executive, Parent and the Company have caused this Executive Employment Agreement to be executed as of the
date first above written.


 


 


	 	COMPANY:
	 	 
	 	FAT SHARK HOLDINGS,
    INC.
	 	By: Jeffrey
    Thompson            
	 	Name: Jeffrey Thompson
	 	Title: Duly Authorized Officer
	 	Date: 1/11/2021
	 	EXECUTIVE:
	 	 
	 	ALLAN EVANS
	 	Allan Evans            
	 	Date: 1/11/2021
	 	 
	 	 
	AGREED AND ACCEPTED:	 
	 	 
	RED CAT HOLDINGS, INC.	 
	 	 
	By: Jeffrey
    Thompson            	 
	Name: Jeffrey Thompson	 
	Title: Chief Executive Officer	 



 




    	 



    	 



    

EXHIBIT
A


INITIAL
EQUITY AWARD


 


1,000,000 shares of
Restricted Common Stock of the Parent under the Plan vesting as follows:


 


		·	250,000
                                         shares on the Effective Date;



		·	750,000
                                         shares 1/36 per month commencing on the last calendar day of the first full calendar
                                         month following the Effective Date, for so long as Executive remains employed by the
                                         Company or any parent of subsidiary.



 


Acceleration of Vesting:


		·	Upon
                                         a Change of Control, as defined in the Plan, 100% of all unvested shares shall immediately
                                         vest;



·
Upon the final closing price of the Parent’s common stock for 30 consecutive days at
or above $5.00 per share, 250,000 shares shall immediately vest; and


		·	Upon
                                         receipt of payment in full by Company for any unrelated third-party purchaser of goods
                                         or services in an amount of $250,000 or more at a net profit margin no less than the
                                         average net profit margin of the Company for similar goods or services during the preceding
                                         12 months, 125,000 shares shall immediately vest; and



		·	Upon
                                         receipt of payment in full by Company for any unrelated third-party purchaser of goods
                                         or services in an amount of $1,000,000 (exclusive of any purchase described above) at
                                         a net profit margin no less than the average net profit margin of the Company for similar
                                         goods or services during the preceding 12 months 125,000 shares shall immediately vest.