CareView Communications, Inc.S-8


 


Exhibit 10.2


 

CAREVIEW COMMUNICATIONS, INC.


2016 STOCK INCENTIVE PLAN, AS AMENDED


 


1.       


PURPOSE.
The purpose of the CareView Communications, Inc. 2016 Stock Incentive Plan, as amended (the "Plan") is to provide (i)
key employees of CareView Communications, Inc. (the "Company") and its subsidiaries, (ii) certain consultants and advisors
who perform services for the Company or its subsidiaries, and (iii) members of the Board of Directors of the Company (the "Board"),
with the opportunity to acquire shares of the Common Stock of the Company ("Common Stock") or receive monetary payments
based on the value of such shares. The Company believes that the Plan will enhance the incentive for Participants (as defined in
Section 3) to contribute to the growth of the Company, thereby benefiting the Company and the Company's shareholders, and will
align the economic interests of the Participants with those of the shareholders.


 


2.       


ADMINISTRATION.


 


(a) COMMITTEE. The
Plan shall be administered and interpreted by a compensation committee (the "Committee").


 


(b) AUTHORITY OF COMMITTEE.
The Committee has the sole authority, subject to the provisions of the Plan, to (i) select the employees and other individuals
to receive Awards (as defined in Section 4) under the Plan, (ii) determine the type, size and terms of the Awards to be made to
each individual selected, (iii) determine the time when the Awards will be granted and the duration of any applicable exercise
and vesting period, including the criteria for exercisability and vesting and the acceleration of exercisability and vesting with
respect to each individual selected, and (iv) deal with any other matter arising under the Plan. The Committee is authorized to
interpret the Plan and the Awards granted under the Plan, to establish, amend and rescind any rules and regulations relating to
the Plan, and to make any other determination that it deems necessary or desirable for the administration of the Plan. The Committee
may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any Award in the manner and to the
extent the Committee deems necessary or desirable. Any decision of the Committee in the interpretation and administration of the
Plan shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all parties concerned. All
powers of the Committee shall be executed in its sole discretion and need not be uniform as to similarly situated individuals.
Any act of the Committee with respect to the Plan may only be undertaken and executed with the affirmative consent of at least
two-thirds of the members of the Committee.


 


(c) RESPONSIBILITY
OF COMMITTEE. No member of the Board, no member of the Committee and no employee of the Company shall be liable for any act or
failure to act hereunder, except in circumstances involving his or her bad faith, gross negligence or willful misconduct, or for
any act or failure to act hereunder by any other member of the Committee or employee of the Company. The Company shall indemnify
members of the Committee and any employee of the Company against any and all liabilities or expenses to which they may be subjected
by reason of any act or failure to act with respect to their duties under the Plan, except in circumstances involving his or her
bad faith, gross negligence or willful misconduct.


 


3.       


PARTICIPANTS.
All employees, officers and directors of the Company and its subsidiaries (including members of the Board who are not employees),
as well as consultants and advisors to the Company or its subsidiaries, are eligible to participate in the Plan. Consistent with
the purposes of the Plan, the Committee shall have exclusive power to select the employees, officers, directors, consultants, and
advisors who may participate in the Plan ("Participants"). Eligible individuals may be selected individually or by groups
or categories, as determined by the Committee in its discretion, and designation as a person to receive Awards in any year shall
not require the Committee to designate such a person as eligible to receive Awards in any other year.


 






     


     


    




4.       


TYPES
OF AWARDS. Awards under the Plan may be granted in any one or a combination of (a) Stock Options, (b) Stock Appreciation Rights,
(c) Restricted Stock Awards, and (d) Performance Awards (each as described below, and collectively, "Awards"). Awards
may constitute Performance-Based Awards, as described in Section 10. Each Award shall be evidenced by a written agreement between
the Company and the Participant (an "Agreement"), which need not be identical between Participants or among Awards, in
such form as the Committee may from time to time approve; provided, however, that in the event of any conflict between the provisions
of the Plan and any Agreement, the provisions of the Plan shall prevail.


 


5.       


COMMON
STOCK AVAILABLE UNDER THE PLAN. The aggregate number of shares of Common Stock that may be subject to Awards shall be 20,000,000
shares of Common Stock, which may be authorized and unissued or treasury shares, subject to any adjustments made in accordance
with Section 11 hereof. The maximum number of shares of Common Stock with respect to which Awards may be granted to any individual
Participant within any 12 month period shall be an aggregate of 4,000,000 shares, whether awarded as Stock Options, Stock Appreciation
Rights or Restricted Stock Awards. Any share of Common Stock subject to an Award that for any reason is cancelled or terminated
without having been exercised or vested shall again be available for Awards under the Plan; provided, however, that any such availability
shall apply only for purposes of determining the aggregate number of shares of Common Stock subject to Awards and shall not apply
for purposes of determining the maximum number of shares subject to Awards that any individual Participant may receive. Notwithstanding
the foregoing provisions of this Section 5 (and subject to any adjustments made in accordance with Section 11 hereof), the
number of additional shares of Common Stock that may be issued pursuant to the Plan from and after June 29, 2018 shall be the lesser
of (i) such number of shares of Common Stock previously reserved for issuance under the Plan and not subject to awards outstanding
(or previously exercised or vested) under the Plan as of any such date, or (ii) such number of authorized and unissued shares of
Common Stock not otherwise reserved by the Company for issuance as of any such date pursuant to (a) all awards outstanding under
any Company stock or option plan (including, for the avoidance of doubt, under the Plan), (b) full conversion of all outstanding
notes, (c) full exercise of all outstanding warrants or (d) any other outstanding instrument or contractual commitment of the Company.


 


6.       


STOCK
OPTIONS. Stock Options will enable a Participant to purchase shares of Common Stock upon set terms and at a fixed purchase price.
Stock Options will be Nonqualified Stock Options Each Stock Option shall be subject to the terms, conditions and restrictions consistent
with the Plan as the Committee may impose, subject to the following limitations:


 


(a) EXERCISE PRICE.
The exercise price per share (the "Exercise Price") of Common Stock subject to a Stock Option shall be determined by
the Committee and shall not be less than the Fair Market Value (as defined in Section 15) of a share of Common Stock on the date
the Stock Option is granted.


 


(b) PAYMENT OF EXERCISE
PRICE. The Exercise Price may be paid in cash or, in the discretion of the Committee, by the delivery of shares of Common Stock
that have been owned by the Participant for at least six months, or by a combination of these methods. In the discretion of the
Committee, payment may also be made by delivering a properly executed exercise notice to the Company together with a copy of irrevocable
instructions to a broker to deliver promptly to the Company the amount of sale or loan proceeds to pay the Exercise Price. To facilitate
the foregoing, the Company may enter into agreements for coordinated procedures with one or more brokerage firms. The Committee
may also prescribe any other method of paying the Exercise Price that it determines to be consistent with applicable law and the
purpose of the Plan, including, without limitation, in lieu of the exercise of a Stock Option by delivery of shares of Common Stock
of the Company then owned by the Participant, providing the Company with a notarized statement attesting to the number of shares
owned for at least six months, where upon verification by the Company, the Company would issue to the Participant only the number
of incremental shares to which the Participant is entitled upon exercise of the Stock Option.


 






     


     


    




(c) EXERCISE PERIOD.
Stock Options shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the
Committee; provided, however, that no Stock Option shall be exercisable later than ten years after the date it is granted. All
Stock Options shall terminate at such earlier times and upon such conditions or circumstances as the Committee shall determine,
as set forth in the related Agreement.


 





(e) TERMINATION OF
EMPLOYMENT, DISABILITY OR DEATH.


 


(1) Except as provided
below or in an Agreement, a Stock Option may only be exercised while the Participant is employed by, or providing service to, the
Company, as an employee, member of the Board or advisor or consultant. In the event that a Participant ceases to be employed by,
or provide service to, the Company for any reason other than Disability (as defined in Paragraph (5) below), death or termination
for Cause (as defined in Paragraph (5) below), any Stock Option which is otherwise exercisable by the Participant shall terminate
unless exercised within 90 days after the date on which the Participant ceases to be employed by, or provide service to, the Company,
but in any event no later than the date of expiration of the Stock Option. Except as otherwise provided by the Committee, any Stock
Options which are not otherwise exercisable as of the date on which the Participant ceases to be employed by, or provide service
to, the Company shall terminate as of such date.


 


(2) In the event the
Participant ceases to be employed by, or provide service to, the Company because of a termination for Cause by the Company, any
Stock Option held by the Participant shall terminate as of the date the Participant ceases to be employed by, or provide service
to, the Company. In addition, notwithstanding any other provisions of this Section 6, if the Committee determines that the Participant
has engaged in conduct that constitutes Cause at any time while the Participant is employed by, or providing service to, the Company,
or after the Participant's termination of employment or service, any Stock Option held by the Participant shall immediately terminate.
In the event the Committee determines that the Participant has engaged in conduct that constitutes Cause, in addition to the immediate
termination of all Stock Options, the Participant shall automatically forfeit all shares underlying any exercised portion of a
Stock Option for which the Company has not yet delivered the share certificates, upon refund by the Company of the Exercise Price
paid by the Participant for such shares (subject to any right of setoff by the Company).


 


(3) In the event the
Participant ceases to be employed by, or provide service to, the Company because the Participant is Disabled, any Stock Option
which is otherwise exercisable by the Participant shall terminate unless exercised within one year after the date on which the
Participant ceases to be employed by, or provide service to, the Company, but in any event no later than the date of expiration
of the Stock Option.


 






     


     


    




(4) If the Participant
dies while employed by, or providing service to, the Company, any Stock Option which is otherwise exercisable by the Participant
shall terminate unless exercised within one year after the date on which the Participant ceases to be employed by, or provide service
to, the Company, but in any event no later than the date of expiration of the Stock Option.


 


(5) For purposes of this
Section 6(e):


 


 (A)       The
term "Company" shall mean the Company and its subsidiary corporations.


 


         (B)       "Disability"
or "Disabled" shall mean a Participant's becoming disabled within the meaning of Section 22(e)(3) of the Code.


 


(C) "Cause"
shall mean, except to the extent specified otherwise by the Committee, a finding by the Committee that the Participant has breached
any provision of his or her terms of employment or service contract with the Company, including without limitation covenants against
competition, or has engaged in disloyalty to the Company, including, without limitation, fraud, embezzlement, theft, commission
of a felony or proven dishonesty in the course of his or her employment or service, or has disclosed trade secrets or confidential
information of the Company to persons not entitled to receive such information.


 


7.       


STOCK
APPRECIATION RIGHTS. Stock Appreciation Rights shall provide a Participant with the right to receive a payment, in cash, Common
Stock or a combination thereof, in an amount equal to the excess of (i) the Fair Market Value, or other specified valuation, of
a specified number of shares of Common Stock on the date the right is exercised, over (ii) the Fair Market Value of such shares
on the date of grant, or other specified valuation (which shall be no less than the Fair Market Value on the date of grant). Each
Stock Appreciation Right shall expire no more than ten years from its date of grant, and shall be subject to such other terms and
conditions as the Committee shall deem appropriate, including, without limitation, provisions for the forfeiture of the Stock Appreciation
Right for no consideration upon termination of employment.


 


8.       


RESTRICTED
STOCK AWARDS. Restricted Stock Awards shall consist of Common Stock issued or transferred to Participants with or without other
payments therefor as additional compensation for services to the Company. Restricted Stock Awards may be subject to such terms
and conditions as the Committee determines appropriate, including, without limitation, restrictions on the sale or other disposition
of such shares and the right of the Company to reacquire such shares for no consideration upon termination of the Participant's
employment within specified periods or prior to becoming vested. The Committee may require the Participant to deliver a duly signed
stock power, endorsed in blank, relating to the Common Stock covered by a Restricted Stock Award. The Committee may also require
that the stock certificates evidencing such shares be held in custody or bear restrictive legends until the restrictions thereon
shall have lapsed. The Restricted Stock Award shall specify whether the Participant shall have, with respect to the shares of Common
Stock subject to a Restricted Stock Award, all of the rights of a holder of shares of Common Stock of the Company, including the
right to receive dividends and to vote the shares.


 






     


     


    




 9.       


PERFORMANCE
AWARDS. Performance Awards shall provide a Participant with the right to receive a specified number of shares of Common Stock or
cash at the end of a specified period. The Committee shall have complete discretion in determining the number, amount and timing
of Performance Awards granted to each Participant. The Committee may condition the payment of Performance Awards upon the attainment
of specific performance goals or such other terms and conditions as the Committee deems appropriate, including, without limitation,
provisions for the forfeiture of such payment for no consideration upon termination of the Participant's employment prior to the
end of a specified period.


 


10.      


PERFORMANCE-BASED
AWARDS. Certain Awards granted under the Plan may be granted in a manner such that they qualify for the performance based compensation
exemption of Section 162(m) of the Code ("Performance-Based Awards"). As determined by the Committee in its sole discretion,
either the granting or vesting of such Performance-Based Awards are to be based upon one or more of the following factors: net
sales; pretax income before allocation of corporate overhead and bonus; budget; earnings per share; net income; division, group
or corporate financial goals; return on stockholders' equity; return on assets; attainment of strategic and operational initiatives;
appreciation in and/or maintenance of the price of the Common Stock or any other publicly-traded securities of the Company; market
share; gross profits; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; economic
value-added models and comparisons with various stock market indices; reduction in costs; or any combination of the foregoing.
With respect to Performance-Based Awards that are not Stock Options or Stock Appreciation Rights based solely on the appreciation
in the Fair Market Value of Common Stock after the grant of the Award, (i) the Committee shall establish in writing (x) the objective
performance-based goals applicable to a given period and (y) the individual employees or class of employees to which such performance-based
goals apply, no later than 90 days after the commencement of such fiscal period (but in no event after 25% of such period has elapsed),
(ii) no Performance-Based Awards shall be payable to or vest with respect to, as the case may be, any Participant for a given fiscal
period until the Committee certifies in writing that the objective performance goals (and any other material terms) applicable
to such period have been satisfied, and (iii) the Committee may reduce or eliminate the number of shares of Common Stock or cash
granted or the number of shares of Common Stock vested upon the attainment of such performance goal. After establishment of a performance
goal, the Committee shall not revise such performance goal or increase the amount of compensation payable thereunder (as determined
in accordance with Section 162(m) of the Code) upon the attainment of such performance goal.


 


11.     


ADJUSTMENTS
TO AWARDS. In the event of any change in the outstanding Common Stock of the Company by reason of any stock split, stock dividend,
split-up, split-off, spin-off, recapitalization, merger, consolidation, reorganization, combination or exchange of shares, a sale
by the Company of all or part of its assets, or in the event of any distribution to stockholders of other than a normal cash dividend,
or other extraordinary or unusual event, if the Committee shall determine, in its discretion, that such change equitably requires
an adjustment in the terms of any Awards or the number of shares of Common Stock that are subject to Awards, such adjustment shall
be made by the Committee and shall be final, conclusive and binding for all purposes of the Plan.


 






     


     


    







12.       


CHANGE
IN CONTROL.


 


(a)       EFFECT.
In its sole discretion, the Committee may determine that, upon the occurrence of a Change in Control (as defined below), all or
a portion of each outstanding Award shall become exercisable in full (if applicable, and whether or not then exercisable) upon
the Change of Control or at such other date or dates that the Committee may determine, and that any forfeiture and vesting restrictions
thereon shall lapse on such date or dates. In its sole discretion, the Committee may also determine that, upon the occurrence of
a Change in Control, each outstanding Stock Option and Stock Appreciation Right shall terminate within a specified number of days
after notice to the Participant thereunder, and each such Participant shall receive, with respect to each share of Common Stock
subject to such Stock Option or Stock Appreciation Right, an amount equal to the excess of the Fair Market Value of such shares
immediately prior to such Change in Control over the exercise price per share of such Stock Option or Stock Appreciation Right;
such amount shall be payable in cash, in one or more kinds of property (including the property, if any, payable in the transaction)
or a combination thereof, as the Committee shall determine in its sole discretion.


 


(b)       DEFINED.
For purposes of this Plan, a Change in Control shall be deemed to have occurred if:


 


(1) a tender offer (or
series of related offers) shall be made and consummated for the ownership of 50% or more of the outstanding voting securities of
the Company;


 


(2) the Company shall
be merged or consolidated with another corporation and as a result of such merger or consolidation less than 50% of the outstanding
voting securities of the surviving or resulting corporation shall be owned in the aggregate by the former shareholders of the Company,
any employee benefit plan of the Company or its subsidiaries, and their affiliates;


 


(3) the Company shall
sell substantially all of its assets to another corporation that is not wholly owned by the Company; or


 


(4) a Person (as defined
below) shall acquire 50% or more of the outstanding voting securities of the Company (whether directly, indirectly, beneficially
or of record).


 


For purposes of this
Section 12(b), ownership of voting securities shall take into account and shall include ownership as determined by applying the
provisions of Rule 13d-3(d)(I)(i) (as in effect on the date hereof) under the Exchange Act. Also for purposes of this Subsection
12(b), Person shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d)
thereof; however, a Person shall not include (1) the Company or any of its subsidiaries; (2) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any of its subsidiaries; (3) an underwriter temporarily holding securities
pursuant to an offering of such securities; or (4) a corporation owned, directly or indirectly, by the shareholders of the Company
in substantially the same proportion as their ownership of stock of the Company.


 


13.       


TRANSFERABILITY
OF AWARDS. Except as provided below, a Participant's rights under an Award may not be transferred or encumbered, except by will
or by the laws of descent and distribution or, pursuant to a qualified domestic relations order (as defined under Section 414(p)
the Code). The Committee may provide, in an Agreement for a Nonqualified Stock Option, for its transferability as a gift to family
members, one or more trusts for the benefit of family members, or one or more partnerships of which family members are the only
partners, according to such terms as the Committee may determine; provided that the Participant receives no consideration for the
transfer and the transferred Nonqualified Stock Option shall continue to be subject to the same terms and conditions as were applicable
to the Nonqualified Stock Option immediately before the transfer.


 






     


     


    




14.       


MARKET
STAND-OFF.


 


(a)       In
connection with any underwritten public offering by the Company of its equity securities pursuant to an effective registration,
if required by the Committee, a Participant shall not sell, make any short sale of, loan, hypothecate, pledge, grant any option
for the purchase of, or otherwise dispose or transfer for value or otherwise agree to engage in any of the foregoing transactions
with respect to, any Common Stock without the prior written consent of the Company or its underwriters. Such restriction (the "Market
Stand-Off") shall be in effect for such period of time from and after the effective date of the final prospectus for the offering
as may be requested by the Company or such underwriters, but in no event shall such period exceed one hundred eighty (180) days.


 


(b)      A Participant
shall be subject to the Market Stand-Off provided and only if the officers and directors of the Company are also subject to similar
restrictions.


 


(c)       In
order to enforce the Market Stand-Off, the Corporation may impose stop-transfer instructions with respect to the Common Stock until
the end of the applicable stand-off period.


 


15.       


FAIR
MARKET VALUE. If Common Stock is publicly traded, then the "Fair Market Value" per share shall be determined as follows:
(1) if the principal trading market for the Common Stock is a national securities exchange or the NASDAQ National Market, the last
reported sale price thereof on the relevant date or, if there were no trades on that date, the latest preceding date upon which
a sale was reported, or (2) if the Common Stock is not principally traded on such exchange or market, the mean between the last
reported "bid" and "asked" prices of Common Stock on the relevant date, as reported on NASDAQ or, if not so
reported, as reported by the National Daily Quotation Bureau, Inc. or as reported in a customary financial reporting service, as
applicable and as the Committee determines. If the Common Stock is not publicly traded or, if publicly traded, is not subject to
reported transactions or "bid" or "asked" quotations as set forth above, the Fair Market Value per share shall
be as reasonably determined by the Committee.


 


16.       


WITHHOLDING.
All distributions made with respect to an Award shall be net of any amounts required to be withheld pursuant to applicable federal,
state and local tax withholding requirements. The Company may require a Participant to remit to it or to the subsidiary that employs
a Participant an amount sufficient to satisfy such tax withholding requirements prior to the delivery of any certificates for Common
Stock. In lieu thereof, the Company or the employing corporation shall have the right to withhold the amount of such taxes from
any other sums due or to become due to the Participant as the Company shall prescribe. The Committee may, in its discretion and
subject to such rules as it may adopt, permit a Participant to pay all or a portion of the federal, state and local withholding
taxes arising in connection with any Award by electing to have the Company withhold shares of Common Stock having a Fair Market
Value that is not in excess of the amount of tax to be withheld.


 


17.       


SHAREHOLDER
RIGHTS. A Participant shall not have any of the rights or privileges of a holder of Common Stock for any Common Stock that is subject
to an Award, including any rights regarding voting or the payment of dividends (except as expressly provided under the terms of
the Award), unless and until a certificate representing such Common Stock has been delivered to the Participant.


 






     


     


    




18.       


TENURE.
A Participant's right, if any, to continue to serve the Company or its subsidiaries as a director, officer, employee, consultant
or advisor shall not be expanded or otherwise affected by his or her designation as a Participant.


 


19.       


NO
FRACTIONAL SHARES. No fractional shares of Common Stock shall be issued or delivered pursuant to the Plan or any Award. The Committee
shall determine whether cash shall be paid in lieu of fractional shares or whether such fractional shares or any rights thereto
shall be forfeited or otherwise eliminated.


 


20.      


DURATION,
AMENDMENT AND TERMINATION. No Award may be granted more than ten years after the Effective Date (as described in Section 22). The
Plan may be amended or suspended in whole or in part at any time and from time to time by the Board, but no amendment shall be
effective unless and until the same is approved by shareholders of the Company where the amendment would (i) increase the total
number of shares which may be issued under the Plan or (ii) increase the maximum number of shares which may be issued to any individual
Participant under the Plan. No amendment or suspension of the Plan shall adversely affect in a material manner any right of any
Participant with respect to any Award theretofore granted without such Participant's written consent.


 


21.       


GOVERNING
LAW. This Plan, Awards granted hereunder and actions taken in connection with the Plan shall be governed by the laws of the State
of Texas regardless of the law that might otherwise apply under applicable principles of conflicts of laws.


 


22.       


EFFECTIVE
DATE. The Plan shall be effective as of December 7, 2016, and the amendment to the Plan shall be effective as of June 29, 2018,
which are the respective dates as of which the Plan and the amendment were adopted by the Board.