ycbd_ex101










Exhibit 10.1



 



Execution Version


 










 



AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT

 


THIS AMENDED AND RESTATED EXECUTIVE
EMPLOYMENT AGREEMENT (this
“Agreement”)
is made and entered this 19th day of April, 2021 (the
“Effective
Date”) between cbdMD, Inc., a North Carolina
corporation whose principal place of business is 8845 Red Oak
Boulevard, Charlotte, NC 28217 (the “Corporation”)
and Martin A. Sumichrast, an individual whose address is 11125
Colonial Country Lane, Charlotte, NC 28277 (the “Executive”).


 



RECITALS

 


WHEREAS, the Corporation produces and
sells industrial hemp derived consumables and topicals with
cannabinoids (“CBD”)
(the “Business”).


 


WHEREAS, the Corporation and the
Executive are parties to that certain Executive Employment
Agreement dated September 6, 2018, as amended by Amendment No. 1 to
the Executive Employment Agreement dated November 13, 2020
(collectively, the “Current Employment
Agreement”).


 


WHEREAS, the Corporation desires to
continue to employ the Executive and the Executive desires to
continue to be employed by the Corporation pursuant to the terms of
this Agreement which amends and restates the Current Employment
Agreement in its entirety.


 


WHEREAS, the Executive, by virtue of the
Executive's employment with the Corporation, will become familiar
with and possessed with the manner, methods, trade secrets and
other confidential information pertaining to the Corporation's
business, including the Corporation's client base.


 


NOW, THEREFORE, in consideration of the
mutual agreements herein made, the Corporation and the Executive do
hereby agree as follows:


 

1. Recitals.
The above recitals are true, correct, and are herein incorporated
by reference.


 

2. Employment.
The Corporation hereby agrees to continue to employ the Executive,
and the Executive hereby accepts continued employment, upon the
terms and conditions hereinafter set forth.


 

3. Authority and Power
During Employment Period.


 

a. Duties
and Responsibilities. During the term of this Agreement, the
Executive will serve as co-Chief Executive Officer of the
Corporation and in this capacity, shall serve as the
Corporation’s co-principal executive officer and perform such
other or additional duties and responsibilities consistent with
Executive’s title(s), status, and position as the
co-principal executive officer of the Corporation.


 






 








 





 

b. Time
Devoted. Throughout the term of the Agreement, the Executive
shall devote a majority of the Executive's business time and
attention to the business and affairs of the Corporation consistent
with the Executive's senior executive position with the
Corporation, except for reasonable vacations and except for illness
or incapacity, but nothing in the Agreement shall preclude the
Executive from engaging in a business other than the Business (as
may be expanded, reduced or otherwise modified from time to time
during the Term) of the Corporation which do not compete with the
Corporation, including as a member of the Board of Directors of
affiliated companies, charitable and community affairs, provided
that such activities do not interfere with the regular performance
of the Executive's duties and responsibilities under this
Agreement.


 

c. Corporate
Policies. The Executive shall abide by all corporate
governance and employment policies of the Corporation which may be
adopted or modified from time to time including, but not limited
to, the Corporation’s insider trading policy, code of ethics
and other corporate governance polities as may be adopted or
modified by the Board of Directors from time to time during the
Term.


 

4. Term. The
initial term (“Initial
Term”) of employment hereunder will commence on the
Effective Date and end on December 31, 2023 and may be extended for
additional one (1) year periods (each a “Renewal
Term”) upon mutual consent of the parties by written
notice given by the Corporation to the Executive at least 60 days
before the expiration of the Initial Term or the Renewal Term, as
the case may be, unless this Agreement shall have been terminated
pursuant to Section 6 of this Agreement. When used herein,
‘Term”
shall mean the Initial Term and any Renewal Term(s).


 

5. Compensation and
Benefits.


 

a. Salary. The
Executive shall be paid a base salary (“Base
Salary”), payable in accordance with the Corporation's
policies from time to time for senior executives, at an annual rate
of (i) Three Hundred Seventy Thousand dollars ($370,000) for the
period commencing on the Effective Date and ending on December 31,
2021, and (ii) Four Hundred Fifty Thousand dollars ($450,000) for
the period commencing on January 1, 2022 and ending on December 31,
2022, and (iii) Five Hundred Thousand dollars ($500,000) for the
period commencing on January 1, 2023 and ending on December 31,
2023.


 

b. Restricted Stock
Award; Stock Options. Stock Options;
Incentive Stock Options. The Corporation hereby grants to
the Executive (i) a restricted stock award (“RSU”)
of an aggregate of Seven Hundred Fifty Thousand (750,000) shares of
the Corporation’s common stock, par value $0.001 per share
(the “Common
Stock), vesting at the rate of 250,000 shares on each of
January 1, 2022, January 1, 2023 and January 1, 2024, and (ii)
stock options to purchase an aggregate of Seven Hundred Fifty
Thousand (750,000) shares of Common Stock at an exercise price of
$3.39 per share (the “Stock
Options”), vesting at the rate of 250,000 Stock
Options on each of January 1, 2022, January 1, 2023 and January 1,
2024, pursuant to the terms and conditions of the Award Agreements
attached hereto as Exhibit
A and Exhibit
B, respectively, and incorporated herein by such references.
The vesting of the RSUs and the Stock Options is subject to the
Executive’s continued employment with the
Corporation.


 






 

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c. Performance Bonus
Opportunities.


 


(1)            During
the Term, the Executive will be eligible for an annual cash
performance bonus of up to 50% of Executive’s Base Salary
(the “Performance
Bonus”) payable in cash upon the Corporation reporting
Total Net Sales equal or exceeding the amount set forth below for
each performance bonus period (“Performance Bonus
Period”) set forth below:


 


	


Performance Bonus Period

	


Minimum Total Net Sales for Performance Bonus Period


	

October
1, 2020 through September 30, 2021

	

$60,000,000


	

October
1, 2021 through September 30, 2022

	

$80,000,000


	

October
1, 2022 through September 30, 2023

	

$100,000,000







 


(2)            For
this purposes of this Agreement, “Total Net
Sales” shall be the Corporation’s total net
sales as reported on its consolidated statement of income included
in its consolidated financial statements appearing in its Annual
Report on Form 10-K for year ended, September 30 for the applicable
Performance Bonus Period.


 


(3)            If
the Corporation does not report minimum Total Net Sales during one
or more of the Performance Bonus Periods set forth above, the
Executive shall not be entitled to any Performance Bonus for such
period. If the Corporation reports Total Net Sales equal to or
exceeding the minimum amount set forth above for the applicable
Performance Bonus Period, then the actual amount of the Performance
Bonus for such Performance Bonus Period shall be determined by the
Compensation, Corporate Governance and Nominating Committee of the
Corporation’s Board of Directors, or any successor thereto
(the “Committee”)
in its sole discretion. Such determination shall be made by the
Committee within five business days following the filing by the
Corporation of the Annual Report on Form 10-K for the September 30
fiscal year within the applicable Performance Bonus Period. The
payment of a Performance Bonus, if any, shall be made to the
Executive within thirty (30) days of such
determination.


 

d. Discretionary
Bonus. The Committee shall review the Executive's
performance on an annual basis, and in connection with such annual
review, the Executive may be entitled to receive an annual
discretionary bonus in such amount as may be determined by the
Board of Directors, upon recommendation of the Committee, in its
sole discretion. So long as the Executive is a member of the
Corporation’s Board of Directors, he shall abstain from
participation in the deliberations of the Board of Directors in the
establishment of the annual performance goals.


 






 

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e. Executive Benefits;
Key Man Life Insurance. The Executive shall be entitled to
participate in all benefit programs of the Corporation currently
existing or hereafter made available to executive and/or salaried
employees including, but not limited to, stock option plans,
pension and other retirement plans, hospitalization, surgical and
major medical coverage, sick leave, salary continuation, vacation
and holidays, long-term disability, and other fringe benefits. The
Corporation shall maintain “key man” life insurance on
the Executive’s life in a coverage amount of $10,000,000, of
which the Corporation shall be the beneficiary for the first
$3,000,000 of coverage and the Executive’s estate shall be
the beneficiary for the remaining $7,000,000 of coverage. Such
insurance shall be paid for by the Corporation. At the
Corporation’s request, the Executive will submit to such
medical examinations, supply such information and execute such
documents as may be required in connection with, or so as to enable
the Corporation to effect, such insurance.


 

f. Vacation.
During each fiscal year of the Corporation, the Executive shall be
entitled to such amount of vacation consistent with the Executive's
position and length of service to the Corporation.


 

g. Business Expense
Reimbursement. During the Term of employment, the Executive
shall be entitled to receive proper reimbursement for all
reasonable, out of-pocket expenses incurred by the Executive (in
accordance with the policies and procedures established by the
Corporation) in performing services hereunder, provided the
Executive properly accounts therefor.


 

h. Clawback
Provisions. Notwithstanding any other provisions in this
Agreement to the contrary, any incentive-based compensation, or any
other compensation, paid to the Executive pursuant to this
Agreement or any other agreement or arrangement with the
Corporation which is subject to recovery under any law, government
regulation or stock exchange listing requirement, will be subject
to such deductions and clawback as may be required to be made
pursuant to such law, government regulation or stock exchange
listing requirement (or any policy adopted by the Corporation
pursuant to any such law, government regulation or stock exchange
listing requirement).


 

i. Employment
Taxes. All of Executive’s compensation payable
hereunder shall be subject to customary withholding taxes and any
other employment taxes as are commonly required to be collected or
withheld by the Corporation.


 

6. Termination.


 

a. Death. This
Agreement will terminate upon the death of the
Executive.


 

b. Disability.


 






 

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(1)            The
Executive's employment will terminate in the event of his
disability, upon the first day of the month following the
determination of disability as provided below. Following such a
termination, the Executive shall be entitled to compensation in
accordance with the Corporation's disability compensation practice
for senior executives, including any separate arrangement or policy
covering the Executive, but in all events the Executive shall
continue to receive his Base Salary, at the annual rate in effect
immediately prior to the commencement of disability, for three (3)
months after the termination. Any amounts provided for in this
Section 6b shall not be offset by other long-term disability
benefits provided to the Executive by the Corporation or Social
Security.


 


(2)            “Disability,”
for the purposes of this Agreement, shall be deemed to have
occurred if (A) the Executive is unable, by reason of a physical or
mental condition, to perform his duties under this Agreement for an
aggregate of ninety (90) days in any 12-month period or (B) the
Executive has a guardian of the person or estate appointed by a
court of competent jurisdiction. Anything herein to the contrary
notwithstanding, if, following a termination of employment due to
disability, the Executive becomes re-employed, whether as an
executive or a consultant, any compensation, annual incentive
payments or other benefits earned by the Executive from such
employment shall be offset against any compensation continuation
due to the Executive hereunder.


 

c. Termination by the
Corporation For Cause.


 


(1)            Nothing
herein shall prevent the Corporation from terminating Executive for
Cause, as hereinafter defined. The Executive shall continue to
receive compensation only for the period ending with the date of
such termination as provided in this Section 6c. Any rights and
benefits the Executive may have in respect of any other
compensation shall be determined in accordance with the terms of
such other compensation arrangements or such plans or
programs.


 


(2)            “Cause”
shall mean (A) committing or participating in an injurious act of
fraud, gross neglect, misrepresentation, embezzlement or dishonesty
against the Corporation; (B) committing or participating in any
other injurious act or omission wantonly, willfully, recklessly or
in a manner which was grossly negligent against the Corporation;
(C) engaging in a criminal enterprise involving moral turpitude;
(D) conviction for a felony under the laws of the United States or
any state thereof; (E) violation of any Federal or state securities
laws, rules or regulations, or any rules or regulations of any
stock exchange or other market on which the Corporation's
securities may be listed or quoted for trading; (F) violation of
the Corporation's corporate governance policies; or (G) any
assignment of this Agreement in violation of Section 14 of this
Agreement.


 


(3)            Notwithstanding
anything else contained in this Agreement, this Agreement will not
be deemed to have been terminated for Cause unless and until there
shall have been delivered to the Executive a notice of termination
stating that the Executive committed one of the types of conduct
set forth in Section 6c(2) of this Agreement and specifying the
particulars thereof and the Executive shall be given a thirty (30)
day period to cure such conduct set forth in Section
6c(2).


 




 

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d. Termination by the
Corporation Other Than For Cause and Not in Connection with a
Change of Control.


 


The
foregoing notwithstanding, the Corporation may terminate the
Executive's employment for whatever reason it deems appropriate;
provided, however, that in the event such termination is not based
on Cause, as provided in Section 6c above, and not in connection
with a Change of Control, as provided in Section 6g below, the
Corporation may terminate this Agreement upon giving the Executive
thirty (30) days' prior written notice. During such thirty (30) day
period, the Executive shall continue to perform the Executive's
duties pursuant to this Agreement. Notwithstanding any such
termination, the Corporation shall continue to pay to the Executive
the Base Salary and Executive Benefits he would be entitled to
receive under this Agreement for the balance of the Term of this
Agreement in accordance with the Corporation's regular payroll
policies.


 


In the
event that the Executive's employment with the Corporation is
terminated pursuant to this Section 6d, Section 6f, or Section 6g
then Section 7a of this Agreement and all references thereto shall
be voidable as to the Executive and the Corporation. In addition,
in the event that the Executive's employment with the Corporation
is terminated pursuant to this Section 6d, Section 6f, or Section
6g, the Executive's stock options and/or restricted shares granted
to the Executive during the Term (to the extent not fully vested as
of the termination date), shall become fully vested as of the
termination date, and the Executive shall be permitted to exercise
such options for up to twelve (12) months following the termination
date.


 

e. Voluntary
Termination. If the Executive terminates the Executive's
employment on the Executive's own volition (except as provided in
Section 6f prior to the expiration of the Term of this Agreement,
including any renewals thereof, such termination shall constitute a
voluntary termination and in such event the Executive shall be
limited to the same rights and benefits as provided in connection
with a termination for Cause as provided in
Section 6c.


 

f. Constructive
Termination of Employment. A termination by the Corporation
without Cause under Section 6d (a “Constructive
Termination”) shall be deemed to have occurred upon
the occurrence of one or more of the following events without the
express written consent of the Executive:


 


(1)            a
material breach of the Agreement by the Corporation;


 


(2)            failure
by a successor company to assume the obligations under the
Agreement; and/or


 


(3)            a
material change in the Executive’s duties and
responsibilities as described in Section 3a hereof.


 




 

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Anything herein to
the contrary notwithstanding, the Executive shall give written
notice to the Board of Directors of the Corporation that the
Executive believes an event has occurred which would result in a
Constructive Termination of the Executive's employment under this
Section 6f, which written notice shall specify the particular act
or acts, on the basis of which the Executive intends to so
terminate the Executive's employment, and the Corporation shall
then be given the opportunity, within thirty (30) days of its
receipt of such notice, to cure said event; provided, however,
there shall be no period permitted to cure a second occurrence of
the same event and in no event will there be any period to cure
following the occurrence of two events described in this Section
6f.


 

g. Change
in Control. If at any time during the Term,
Executive’s employment with the Corporation is terminated by
the Corporation not for Cause within two years after the Change of
Control (as hereinafter defined) or in the 90 days prior to the
Change of Control upon the request of the acquiror, the Corporation
shall pay to Executive an amount equal to 1.5 multiplied by Executive’s Base
Salary that Executive is then earning, payable in a lump-sum
payment on the termination date of Executive’s employment
hereunder but not earlier than the closing of the Change of
Control. For purposes hereof, a “Change of
Control” shall mean
a change of control of a nature
that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended (the “Exchange
Act”), whether or not the
Corporation is in fact required to comply with that regulation,
provided that, without limitation, such a change in control shall
be deemed to have occurred if (A) any “person”
(as such term is used in Sections 13(d) and 14(d) of the Exchange
Act), other than a trustee or other fiduciary holding securities
under an employee benefit plan of the Corporation or a corporation
owned, directly or indirectly, by the shareholders of the
Corporation in substantially the same proportions as their
ownership of stock of the Corporation, is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the
Corporation representing more than 50% of the combined voting power
of the Corporation’s then outstanding securities; or (B)
during any period of two consecutive years (not including any
period prior to the execution of this Agreement), individuals who
at the beginning of such period constitute the Board of Directors
and any new director (other than a director designated by a person
who has entered into an agreement with the Corporation to effect a
transaction described in clauses (A) or (D) of this Section) whose
election by the Board of Directors or nomination for election by
the Corporation’s shareholder’s was approved by a vote
of at least two-thirds of the directors then still in office who
either were directors at the beginning of the period or whose
election or nomination for election was previously so approved,
cease for any reason to constitute a majority; (C) the Corporation
enters into an agreement, the consummation of which would result in
the occurrence of a change in control of the Corporation; or (D)
the shareholders of the Corporation approve a merger or
consolidation of the Corporation with any other corporation, other
than a merger or consolidation which would result in the voting
securities of the Corporation outstanding immediately prior to it
continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) of
more than 50% of the combined voting power of the voting securities
of the Corporation or such surviving entity outstanding immediately
after such merger or consolidation, or the shareholders of the
Corporation approve a plan of complete liquidation of the
Corporation or an agreement for the sale or disposition by the
Corporation of all or substantially all the Corporation’s
assets.


 




 

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h. Excess Parachute
Payment. Notwithstanding anything to the contrary in this
Agreement, the payments made to the Executive under this Section 6
shall be one dollar ($1.00) less than the amount which would cause
the payments to the Executive (including payments to the Executive
which are not included in this Agreement) to be subject to the
excise tax imposed by Section 4999 of the Internal Revenue Code
(the “Code”).


 

7. Covenant Not To
Compete and Non-Disclosure of Information.


 

a. Covenant Not To
Compete. The Executive acknowledges and recognizes the
highly competitive nature of the Corporation's Business and the
goodwill, continued patronage, and the names and addresses of the
Corporation's Clients (as hereinafter defined) constitute a
substantial asset of the Corporation having been acquired through
considerable time, money and effort. Accordingly, in consideration
of the execution of this Agreement, and as except as may
specifically otherwise approved by the Corporation’s Board of
Directors, the Executive agrees to the following:


 


(1)            That
during the Restricted Period (as hereinafter defined) and within
the Restricted Area (as hereinafter defined), the Executive will
not, individually or in conjunction with others, directly or
indirectly, engage in any Business Activities (as hereinafter
defined), whether as an officer, director, proprietor, employer,
partner, independent contractor, investor (other than as a holder
solely as an investment of less than four and ninety-nine one
hundreds percent (4.99%) of the outstanding capital stock of a
publicly traded corporation), consultant, advisor, agent or
otherwise.


 


(2)            That
during the Restricted Period and within the Restricted Area, the
Executive will not, directly or indirectly, compete with the
Corporation by soliciting, inducing or influencing any of the
Corporation's Clients which have a business relationship with the
Corporation at the time during the Restricted Period to discontinue
or reduce the extent of such relationship with the
Corporation.


 


(3)            That
during the Restricted Period and within the Restricted Area, the
Executive will not (A) directly or indirectly recruit, solicit or
otherwise influence any employee or agent of the Corporation to
discontinue such employment or agency relationship with the
Corporation, or (B) employ or seek to employ, or cause or permit
any business which competes directly or indirectly with the
Business Activities of the Corporation (the “Competitive
Business”) to employ or seek to employ for any
Competitive Business any person who is then (or was at any time
within two (2) years prior to the date Executive or the Competitive
Business employs or seeks to employ such person) employed by the
Corporation.


 

b. Non-Disclosure of
Information. The Executive acknowledges that the
Corporation's trade secrets, private or secret processes, methods
and ideas, as they exist from time to time, customer lists and
information concerning the Corporation's sources, products,
services, pricing, training methods, development, technical
information, marketing activities and procedures, credit and
financial data concerning the Corporation and/or the Corporation's
Clients, and (the “Proprietary
Information”) are valuable, special and unique assets
of the Corporation, access to and knowledge of which are essential
to the performance of the Executive hereunder. In light of the
highly competitive nature of the industry in which the
Corporation's business is conducted, the Executive agrees that all
Proprietary Information, heretofore or in the future obtained by
the Executive as a result of the Executive's association with the
Corporation shall be considered confidential.


 




 

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In
recognition of this fact, the Executive agrees that the Executive,
during the Restricted Period, will not use or disclose any of such
Proprietary Information for the Executive's own purposes or for the
benefit of any person or other entity or organization (except the
Corporation) under any circumstances unless such Proprietary
Information has been publicly disclosed generally or, unless upon
written advice of legal counsel reasonably satisfactory to the
Corporation, the Executive is legally required to disclose such
Proprietary Information. Documents (as hereinafter defined)
prepared by the Executive or that come into the Executive's
possession during the Executive's association with the Corporation
are and remain the property of the Corporation, and when this
Agreement terminates, such Documents shall be returned to the
Corporation at the Corporation's principal place of business, as
provided in the Notice provision (Section 10) of this
Agreement.


 

c. Documents.
“Documents”
shall mean all original written, recorded, or graphic matters
whatsoever, and any and all copies thereof, including, but not
limited to: papers; books; records; tangible things;
correspondence; communications; telex messages; memoranda;
work-papers; reports; affidavits; statements; summaries; analyses;
evaluations; client records and information; agreements; agendas;
advertisements; instructions; charges; manuals; brochures;
publications; directories; industry lists; schedules; price lists;
client lists; statistical records; training manuals; computer
printouts; books of account, records and invoices reflecting
business operations; all things similar to any of the foregoing
however denominated. In all cases where originals are not
available, the term “Documents” shall also mean
identical copies of original documents or non-identical copies
thereof.


 

d. Corporation's
Clients. The “Corporation's
Clients” shall be deemed to be any persons,
partnerships, corporations, professional associations or other
organizations for or with whom
the Corporation has performed Business Activities, including, but not limited to, suppliers or
vendors with whom the Corporation has done or is endeavoring to do
business.


 

e. Restrictive
Period. The “Restrictive
Period” shall be deemed to be one (1) year following
termination of this Agreement.


 

f. Restricted
Area. The “Restricted
Area” shall be deemed to mean the United
States.


 

g. Business
Activities. “Business
Activities” shall be deemed to any business activities
concerning owning, operating, managing, promoting or
soliciting clients for the
Corporation’s Business, and any additional activities
which the Corporation or any of its affiliates may engage in during
any portion of the twelve (12)
months prior to the termination of Executive's
employment.


 






 

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h. Covenants as
Essential Elements of this Agreement. It is understood by
and between the parties hereto that the foregoing covenants
contained in Sections 7a and b are essential elements of this
Agreement, and that but for the agreement by the Executive to
comply with such covenants, the Corporation would not have agreed
to enter into this Agreement. Such covenants by the Executive shall
be construed to be agreements independent of any other provisions
of this Agreement. The existence of any other claim or cause of
action, whether predicated on any other provision in this
Agreement, or otherwise, as a result of the relationship between
the parties shall not constitute a defense to the enforcement of
such covenants against the Executive. To the extent that the covenants contained in this
Section 7 may later be deemed by a court to be too broad to be
enforced with respect to their duration or with respect to any
particular activity or geographic area, the court making such
determination shall have the power to reduce the duration or scope
of the provision, and to add or delete specific words or phrases to
or from the provision. The provision as modified shall then be
enforced.


 

i. Survival After
Termination of Agreement. Notwithstanding anything to the
contrary contained in this Agreement, the covenants in Sections 7a
and b shall survive the termination of this Agreement and the
Executive's employment with the Corporation.


 

j. Remedies.


 


(1)           The
Executive acknowledges and agrees that the Corporation's remedy at
law for a breach or threatened breach of any of the provisions of
Section 7a or b herein would be inadequate and the breach shall be
per se deemed as causing irreparable harm to the Corporation. In
recognition of this fact, in the event of a breach by the Executive
of any of the provisions of Section 7a or b, the Executive agrees
that, in addition to any remedy at law available to the
Corporation, including, but not limited to monetary damages, all
rights of the Executive to payment or otherwise under this
Agreement and all amounts then or thereafter due to the Executive
from the Corporation under this Agreement may be terminated and the
Corporation, without posting any bond, shall be entitled to obtain,
and the Executive agrees not to oppose the Corporation's request
for equitable relief in the form of specific performance, temporary
restraining order, temporary or permanent injunction or any other
equitable remedy which may then be available to the
Corporation.


 


(2)            The
Executive acknowledges that the granting of a temporary injunction,
temporary restraining order or permanent injunction merely
prohibiting the use of Proprietary Information would not be an
adequate remedy upon breach or threatened breach of Section 7a or b
and consequently agrees, upon proof of any such breach, to the
granting of injunctive relief prohibiting any form of competition
with the Corporation. Nothing herein contained shall be construed
as prohibiting the Corporation from pursuing any other remedies
available to it for such breach or threatened breach.


 






 

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8. Indemnification.
The Executive shall continue to be covered by the Articles of
Incorporation, as amended, and By-Laws of the Corporation with
respect to matters occurring on or prior to the date of termination
of the Executive's employment with the Corporation, subject to all
the provisions of North Carolina and Federal law, the Articles of
Incorporation, as amended, of the Corporation and the By-Laws of
the Corporation then in effect. Such reasonable expenses, including
attorneys' fees, that may be covered by these indemnification
provisions shall be paid by the Corporation on a current basis in
accordance with such provision, the Corporation's Articles of
Incorporation, as amended, By-Laws and North Carolina law. To the
extent that any such payments by the Corporation pursuant to these
provisions may be subject to repayment by the Executive pursuant to
the provisions of the Articles of Incorporation, as amended, and/or
By-Laws, or pursuant to North Carolina or Federal law, such
repayment shall be due and payable by the Executive to the
Corporation within twelve (12) months after the termination of all
proceedings, if any, which relate to such repayment and to the
Corporation's affairs for the period prior to the date of
termination of the Executive's employment with the Corporation and
as to which Executive has been covered by such applicable
provisions.


 

9. Withholding.
Anything to the contrary notwithstanding, all payments required to
be made by the Corporation hereunder to the Executive or the
Executive's estate or beneficiaries shall be subject to the
withholding of such amounts, if any, relating to tax and other
payroll deductions as the Corporation may reasonably determine it
should withhold pursuant to any applicable law or regulation. In
lieu of withholding such amounts, the Corporation may accept other
arrangements pursuant to which it is satisfied that such tax and
other payroll obligations will be satisfied in a manner complying
with applicable law or regulation.


 

10. Notices. Any
notice required or permitted to be given under the terms of this
Agreement shall be sufficient if in writing and if sent postage
prepaid by registered or certified mail, return receipt requested;
by overnight delivery; by courier; or by confirmed telecopy, in the
case of the Executive to the Executive's last place of business or
residence as shown on the records of the Corporation, or in the
case of the Corporation to its principal office as set forth in the
first paragraph of this Agreement, or at such other place as it may
designate.


 

11. Waiver.
Unless agreed in writing, the failure of either party, at any time,
to require performance by the other of any provisions hereunder
shall not affect its right thereafter to enforce the same, nor
shall a waiver by either party of any breach of any provision
hereof be taken or held to be a waiver of any other preceding or
succeeding breach of any term or provision of this Agreement. No
extension of time for the performance of any obligation or act
shall be deemed to be an extension of time for the performance of
any other obligation or act hereunder.


 

12. Completeness and
Modification. This Agreement constitutes the entire
understanding between the parties hereto superseding all prior and
contemporaneous agreements or understandings among the parties
hereto concerning the Agreement, including, but not limited to the
Original Agreement. This Agreement may be amended, modified,
superseded or canceled, and any of the terms, covenants,
representations, warranties or conditions hereof may be waived,
only by a written instrument executed by the parties or, in the
case of a waiver, by the party to be charged.

 




 

11








 





 

13. Counterparts.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which shall constitute
but one agreement.


 

14. Binding
Effect/Assignment. This Agreement shall be binding upon the
parties hereto, their heirs, legal representatives, successors and
assigns. This Agreement shall not be assignable by the Executive
but shall be assignable by the Corporation in connection with the
sale, transfer or other disposition of its business or to any of
the Corporation's affiliates controlled by or under common control
with the Corporation.


 

15. Governing
Law. This Agreement shall become valid when executed and
accepted by the Corporation. The parties agree that it shall be
deemed made and entered into in the State of North Carolina and
shall be governed and construed under and in accordance with the
laws of the State of North Carolina. Anything in this Agreement to
the contrary notwithstanding, the Executive shall conduct the
Executive's business in a lawful manner and faithfully comply with
applicable laws or regulations of the state, city or other
political subdivision in which the Executive is
located.


 

16. Further
Assurances. All parties hereto shall execute and deliver
such other instruments and do such other acts as may be necessary
to carry out the intent and purposes of this
Agreement.


 

17. Headings.
The headings of the sections are for convenience only and shall not
control or affect the meaning or construction or limit the scope or
intent of any of the provisions of this Agreement.


 

18. Survival.
Any termination of this Agreement shall not, however, affect the
ongoing provisions of this Agreement which shall survive such
termination in accordance with their terms.


 

19. Severability.
The invalidity or unenforceability, in whole or in part, of any
covenant, promise or undertaking, or any section, subsection,
paragraph, sentence, clause, phrase or word or of any provision of
this Agreement shall not affect the validity or enforceability of
the remaining portions thereof.


 

20. Enforcement.
Should it become necessary for any party to institute legal action
to enforce the terms and conditions of this Agreement, the
successful party will be awarded reasonable attorneys' fees at all
trial and appellate levels, expenses and costs.


 

21. Venue. The
Corporation and Executive acknowledge and agree that the U.S.
District Court for the State of North Carolina, or if such court
lacks jurisdiction, the State of North Carolina(or its successor)
in and for Mecklenburg County, North Carolina, shall be the venue
and exclusive proper forum in which to adjudicate any case or
controversy arising either, directly or indirectly, under or in
connection with this Agreement and the parties further agree that,
in the event of litigation arising out of or in connection with
this Agreement in these courts, they will not contest or challenge
the jurisdiction or venue of these courts.


 






 

12








 





 

22. Construction.
This Agreement shall be construed within the fair meaning of each
of its terms and not against the party drafting the
document.


 

23. Role of
Counsel. The Executive acknowledges his understanding that
this Agreement was prepared at the request of the Corporation by
Pearlman Law Group LLP, its counsel, and that such firm did not
represent the Executive in conjunction with this Agreement or any
of the related transactions. The Executive, as further evidenced by
his signature below, acknowledges that he has had the opportunity
to obtain the advice of independent counsel of his choosing prior
to his execution of this Agreement and that he has availed himself
of this opportunity to the extent he deemed necessary and
advisable.


 

24. Section
409A. Notwithstanding anything to the contrary herein, the
following provisions apply to the extent severance benefits
provided herein are subject to Section 409A of the Code and the
regulations and other guidance thereunder and any state law of
similar effect (collectively “Section
409A”). Severance benefits shall not commence until
the Executive has a “separation from service” (as
defined under Treasury Regulation Section 1.409A-1(h), without
regard to any alternative definition thereunder, a
“separation from service”). Each installment of
severance benefits is a separate “payment” for purposes
of Treas. Reg. Section 1.409A-2(b)(2)(i), and the severance
benefits are intended to satisfy the exemptions from application of
Section 409A provided under Treasury Regulations Sections
1.409A-1(b)(4) and 1.409A-1(b)(9). However, if such exemptions are
not available and the Executive is, upon separation from service, a
“specified employee” for purposes of Section 409A,
then, solely to the extent necessary to avoid adverse personal tax
consequences under Section 409A, the timing of the severance
benefits payments shall be delayed until the earlier of (i) six (6)
months and one day after the Executive’s separation from
service, or (ii) the Executive’s death. The parties
acknowledge that the exemptions from application of Section 409A to
severance benefits are fact specific, and any later amendment of
this Agreement to alter the timing, amount or conditions that will
trigger payment of severance benefits may preclude the ability of
severance benefits provided under this Agreement to qualify for an
exemption. It is intended that this Agreement shall comply with the
requirements of Section 409A, and any ambiguity contained herein
shall be interpreted in such manner so as to avoid adverse personal
tax consequences under Section 409A. Notwithstanding the foregoing,
the Corporation shall in no event be obligated to indemnify the
Executive for any taxes or interest that may be assessed by the
Internal Revenue Service pursuant to Section 409A of the Code to
payments made pursuant to this Agreement.


 



THE EXECUTIVE ACKNOWLEDGES THAT THE EXECUTIVE HAS READ ALL OF THE
TERMS OF THIS AGREEMENT, UNDERSTANDS THE AGREEMENT, AND AGREES TO
ABIDE BY ITS TERMS AND CONDITIONS.


 


[signature
page follows]


 




 

13








 






 


IN WITNESS WHEREOF, the parties have
executed this Agreement as of the Effective Date.


 



	

Witness:


	
THE CORPORATION

	

 


	

 


	
 

	

 


	
_____________________________	cbdMD,
INC.	

 


	

 

	

 

	

 

	

 


	
_____________________________	
By:  

	
/s/ T. Ronan
Kennedy

	

 


	

 

	

 

	
T. Ronan
Kennedy 

	

 


	

 

	

 

	

Chief Financial
Officer and 



Chief Operating
Officer


	

 







 


 


	
Witness:	
THE
EXECUTIVE

	

 


	

 

	

 

	

 

	

 


	
_____________________________	
By:  

	
/s/ Martin A.
Sumichrast 

	

 


	_____________________________	

 

	
Martin A.
Sumichrast 

	

 


	
	
	
	

 







 


 


 



14







 






 

EXHIBIT
A



 





cbdMD, INC.


 



Restricted Stock Award Agreement



Under the 2021 Equity Compensation Plan


 


cbdMD,
Inc., a North Carolina corporation (the “Company”),
pursuant to its 2021 Equity Compensation Plan (the
“Plan”),
hereby grants the following restricted stock award (the
“Restricted Stock
Award”) to you, the Participant named below, of shares
(the “Shares”)
of the Company’s common stock, par value $0.001 per share
(the “Common
Stock”). The terms and conditions of the Restricted
Stock Award are set forth in this Agreement, consisting of this
cover page and the Restricted Stock Terms and Conditions on the
following pages, and in the Plan document, a copy of which has been
provided to you. This Restricted Stock Award is being made pursuant
to the terms and conditions of that certain Amended and Restated
Executive Employment Agreement dated April 19, 2021 by and between
the Company and you (the “Sumichrast
Employment Agreement”). Any capitalized term that is
not defined in this Agreement shall have the meaning set forth in
the Plan as it currently exists or as it is amended in the future
or the Sumichrast Employment Agreement.


 


	

Name of
Participant: Martin A.
Sumichrast


	

No. of
Shares Covered: 750,000

	

Grant
Date: April 19, 2021


	

Fair
Market Value on Date of Grant: $3.39 per Share.


	

Vesting:
250,000 Shares shall vest on each of
January 1, 2022, January 1, 2023 and January 1, 2024 subject to the
terms of the Sumichrast Employment Agreement.


	
 

	
 


	
 

	
 

	
 

	
 







 By
signing below or otherwise evidencing your acceptance of this
Agreement in a manner approved by the Company, you agree to all of
the terms and conditions contained in this Agreement and in the
Plan document. You acknowledge that you have received and reviewed
these documents and that they set forth the entire agreement
between you and the Company regarding the Restricted Stock
Award.


 


	

PARTICIPANT:

	

cbdMD,
INC.


	
 

	
 


	

/s/
Martin A. Sumichrast

	

By: /s/
T. Ronan Kennedy


	

Martin
A. Sumichrast

	

T.
Ronan Kennedy


	
 

	

Chief
Financial Officer and Chief Operating Officer







 







 








 






 




 



cbdMD, INC.


 



Restricted Stock Award Agreement



Under the 2021 Equity Compensation Plan


 



Restricted Stock Terms and Conditions


 



1.


Potential Future
Dilution. You agree and understand that nothing
contained in this Agreement provides, or is intended to provide,
you with any protection against potential future dilution of the
your interest in the Company for any reason, and no adjustments
shall be made for dividends in cash or other property,
distributions or other rights in respect of any such Shares, except
as otherwise specifically provided for in the Plan.








 



2.



Certificates.
Restricted Stock, when issued, will be
represented by book entry registered in your name. Until such
Shares shall have vested in accordance with this Agreement (the
“Restriction
Period”), the book
entry account representing the Restricted Stock and any securities
constituting Retained Distributions shall bear a legend to the
effect that ownership of the Restricted Stock and such Retained
Distributions, and all rights related thereto, are subject to the
restrictions, terms and conditions provided in the Plan and this
Agreement. Such book entry registration shall be deposited by you
with the Company, together with stock powers or other instruments
of assignment, each endorsed in blank, which will permit transfer
to the Company of all or any portion of the Restricted Stock and
any securities constituting Retained Distributions that shall be
forfeited or that shall not become vested in accordance with the
Plan and this Agreement.








 



3.


Rights
as a Holder. Restricted Stock shall constitute issued and
outstanding shares of Common Stock for all corporate purposes. You
will have the right to vote such Restricted Stock, to receive and
retain all regular cash dividends and other cash equivalent
distributions as the Board may in its sole discretion designate,
pay or distribute on such Restricted Stock and to exercise all
other rights, powers and privileges of a holder of Common Stock
with respect to such Restricted Stock, with the exceptions that (i)
you will not be entitled to delivery of the stock certificate or
certificates representing such Restricted Stock until the
Restriction Period shall have expired and unless all other vesting
requirements with respect thereto shall have been fulfilled; (ii)
the Company will retain custody of the stock certificate or
certificates representing the Restricted Stock during the
Restriction Period; (iii) other than regular cash dividends and
other cash equivalent distributions as the Board may in its sole
discretion designate, pay or distribute, the Company will retain
custody of all distributions (“Retained
Distributions”)
made or declared with respect to the Restricted Stock (and such
Retained Distributions will be subject to the same restrictions,
terms and conditions as are applicable to the Restricted Stock)
until such time, if ever, as the Restricted Stock with respect to
which such Retained Distributions shall have been made, paid or
declared shall have become vested and with respect to which the
Restriction Period shall have expired; (iv) a breach of any of the
restrictions, terms or conditions contained in the Plan and this
Agreement or otherwise established by the Committee with respect to
any Restricted Stock or Retained Distributions will cause a
forfeiture of such Restricted Stock and any Retained Distributions
with respect thereto.








 




 








 






 



4.



Vesting;
Forfeiture. Upon the
expiration of the Restriction Period with respect to the Restricted
Stock Award and the satisfaction of any other applicable
restrictions, terms and conditions (i) all or part of such
Restricted Stock shall become vested in accordance with the terms
of this Agreement, subject to Section 9 of the Plan, and (ii) any
Retained Distributions with respect to such Restricted Stock shall
become vested to the extent that the Restricted Stock related
thereto shall have become vested, subject to Section 9 of the Plan.
Except as set forth in this Section 4, any such Restricted Stock
and Retained Distributions that do not vest shall be forfeited to
the Company and you will not thereafter have any rights with
respect to such Restricted Stock and Retained Distributions that
shall have been so forfeited. In the event of your death or
Disability (as defined in the Plan), the Restricted Stock shall
immediately become vested, subject to Section 9 of the
Plan.








 



5.



Withholding
Taxes. You hereby grant the Company the power and the right to deduct or
withhold, or require you to remit to the Company, an amount
sufficient to satisfy any federal, state and local taxes of any
kind which the Company, in its sole discretion, deems necessary to
be withheld or remitted to comply with the Code and/or any other
applicable law, rule or regulation with respect to the Restricted
Stock Award. If you fail to do so, the Company may otherwise refuse
to issue or transfer any shares of Common Stock otherwise required
to be issued pursuant to this Agreement. At the discretion of the
Company, any minimum
statutorily required withholding obligation with regard to you may be
satisfied by reducing the amount of shares of Common Stock
otherwise deliverable to you hereunder.








 



6.



Section
83(b). If you properly elect (as required by Section
83(b) of the Code) within 30 days after the issuance of the
Restricted Stock to include in gross income for federal income tax
purposes in the year of issuance the Fair Market Value of such
shares of Restricted Stock, you agree to pay to the Company or make
arrangements satisfactory to the Company to pay to the Company upon
such election, any federal, state or local taxes required to be
withheld with respect to the Restricted Stock. If you fail to make
such payment, the Company will, to the extent permitted by law,
have the right to deduct from any payment of any kind otherwise due
to you any federal, state or local taxes of any kind required by
law to be withheld with respect to the Restricted Stock, as well as
the rights set forth in Section 5 hereof. You acknowledge that it
is your sole responsibility, and not the Company’s, to file
timely and properly the election under Section 83(b) of the Code
and any corresponding provisions of state tax laws if you elect to
make such election, and you agree to timely provide the Company
with a copy of any such election.








 



7.



Governing Plan
Document. This Agreement and Restricted Stock Award
are subject to all the provisions of the Plan, and to all
interpretations, rules and regulations which may, from time to
time, be adopted and promulgated by the Committee pursuant to the
Plan. If there is any conflict between the provisions of this
Agreement and the Plan, the provisions of the Plan will
govern.








 



8.



Choice of
Law. This Agreement will be interpreted and enforced
under the laws of the state of North Carolina (without regard to
its conflicts or choice of law principles).








 



9.



Binding
Effect. This Agreement will be binding in all
respects on your heirs, representatives, successors and assigns,
and on the successors and assigns of the Company.








 



10.



Other
Agreements. You agree that you will execute such
documents as may be necessary to become a party to any shareholder,
voting or similar agreements as the Company may
require.








 




 








 






 



11.

 Compensation Recovery
Policy. To the extent that any compensation paid or
payable pursuant to this Agreement is considered
“incentive-based compensation” within the meaning and
subject to the requirements of Section 10D of the Exchange Act,
such compensation shall be subject to potential forfeiture or
recovery by the Company in accordance with any compensation
recovery policy adopted by the Board or any committee thereof in
response to the requirements of Section 10D of the Exchange Act and
any implementing rules and regulations thereunder adopted by the
Securities and Exchange Commission or any national securities
exchange on which the Company’s Common Stock is then listed.
This Agreement may be unilaterally amended by the Company to comply
with any such compensation recovery policy.








 



12.

 Electronic Delivery and
Acceptance. The Company may deliver any documents
related to this Restricted Stock Award by electronic means and
request your acceptance of this Agreement by electronic means. You
hereby consent to receive all applicable documentation by
electronic delivery and to participate in the Plan through an
on-line (and/or voice activated) system established and maintained
by the Company or the Company’s third-party stock plan
administrator.








 



13.

 Data Privacy. You understand that the Company, its
Subsidiaries and affiliated companies may hold certain personal
information about you, specifically: your name, home address, email
address and telephone number, date of birth, social security or
insurance number, passport number or other identification number,
salary, nationality, and any shares of Common Stock held in the
Company, and details of this Restricted Stock Award or any other
entitlement to shares of Common Stock, canceled, exercised, vested,
unvested or outstanding in your favor (collectively, the
“Data”),
for the purpose of implementing, administering and managing the
Plan.You hereby explicitly and unambiguously consent to the
collection, use and transfer, in electronic or other form, of your
Data as described in this Agreement and any other grant materials
by and among, as necessary and applicable, the Company and any of
its Subsidiaries or affiliated companies, for the exclusive purpose
of implementing, administering and managing your participation in
the Plan.You understand that Data will be transferred to the
Company’s Stock Plan Administrator or such other stock plan
service provider as may be selected by the Company in the future,
which is assisting the Company with the implementation,
administration and management of the Plan. You authorize the
Company, the Company’s Stock Plan Administrator and any other
possible recipients that may assist the Company (presently or in
the future) with implementing, administering and managing the Plan
to receive, possess, use, retain and transfer Data, in electronic
or other form, for the sole purpose of implementing, administering
and managing your participation in the Plan. Further, you
understands that you are providing the consents herein on a purely
voluntary basis. If you do not consent, or if you later seek to
revoke your consent, your service status and career will not be
affected; the only consequence of refusing or withdrawing your
consent is that the Company would not be able to grant you this
Restricted Stock Award or other equity awards or administer or
maintain such awards. Therefore, you understands that refusing or
withdrawing your consent may affect your ability to participate in
the Plan.








 



14.

 Insider
Trading. By
participating in the Plan, you agrees to comply with the
Company’s policy on insider trading, a copy of which has
previously been provided to you.






 


 



 







 






 





cbdMD, INC.


 



Stock Option Agreement



Under the 2021 Equity Compensation Plan


 


cbdMD,
Inc., a North Carolina corporation (the “Company”),
pursuant to its 2021 Equity Compensation Plan (the
“Plan”),
hereby grants the following Nonqualified Stock Option (the
“Stock
Option”) to you, the Participant named below, to
purchase shares (the “Shares”)
of the Company’s common stock, par value $0.001 per share
(the “Common
Stock”). The terms and conditions of the Stock Options
are set forth in this Agreement, consisting of this cover page and
the Stock Option Terms and Conditions on the following pages, and
in the Plan document, a copy of which has been provided to you.
This Restricted Stock Award is being made pursuant to the terms and
conditions of that certain Amended and Restated Executive
Employment Agreement dated April 19, 2021 by and between the
Company and you (the “Sumichrast
Employment Agreement”). Any capitalized term that is
not defined in this Agreement shall have the meaning set forth in
the Plan as it currently exists or as it is amended in the future
or in the Sumichrast Employment Agreement.


 


	

Name of
Participant: Martin A.
Sumichrast


	

No. of
Shares Covered: 750,000

	

Grant
Date: April 19, 2021


	

Exercise
Price Per Share: $3.39

	

Expiration
Date: Five (5) years from the vesting date set forth
below


	

Vesting
and Exercise Schedule: 250,000 Stock Options on each of January 1,
2022, January 1, 2023 and January 1, 2024 subject to the terms of
the Sumichrast Employment Agreement.


	
 

	
 


	
 

	
 

	
 

	
 







By
signing below or otherwise evidencing your acceptance of this
Agreement in a manner approved by the Company, you agree to all of
the terms and conditions contained in this Agreement and in the
Plan document. You acknowledge that you have received and reviewed
these documents and that they set forth the entire agreement
between you and the Company regarding the Stock
Option.


 


	

PARTICIPANT:

	

cbdMD,
INC.


	
 

	
 


	

/s/
Martin A. Sumichrast

	

By: /s/
T. Ronan Kennedy


	

Martin
A. Sumichrast

	

T.
Ronan Kennedy


	
 

	

Chief
Financial Officer and Chief Operating Officer







 




 








 










 


EXHIBIT
B


 




 



cbdMD, INC.


 



Stock Option Agreement



Under the 2021 Equity Compensation Plan


 



Stock Option Terms and Conditions


 



1.


Type of Stock
Option. 







 



	

☐

	


Incentive stock option. To the maximum extent permissible,
the Stock Option is intended to be an
“incentive stock option” within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (the
“Code”), although the Company makes no
representation or guarantee that the Stock Option qualifies as an
incentive stock option.


	
 

	
 


	

☐

	


Nonqualified stock option. For all portion of this Stock
Option which exceed the maximum permissible under the Code, this
Stock Option is not intended to be an “incentive stock
option” within the meaning of Section 422 of the Code and
will be interpreted accordingly.


	
 

	
 







 



2.



Vesting and Exercisability
of Option.






 




(a)

Scheduled Vesting. This Stock
Option will vest and become exercisable as to the number of Shares
and on the dates specified in the Vesting and Exercise Schedule on
the cover page to this Agreement, subject to the terms of the Plan
if your service to the Company should end. The Vesting and Exercise
Schedule is cumulative, meaning that to the extent the Stock Option
has not already been exercised and has not expired or been
terminated or cancelled, you or the person otherwise entitled to
exercise the Stock Option as provided in this Agreement may at any
time purchase all or any portion of the Shares subject to the
vested portion of the Stock Option.






 




(b)

Accelerated Vesting. Vesting
and exercisability of this Stock Option (1) may be accelerated
during the term of the Stock Option under the circumstances
described in Sections 4.3, 6.2(c) and 9 of the Plan (and at the
discretion of the Committee) and (2) shall be accelerated during
the term of the Stock Option upon your death or Disability (as
defined in the Plan). In the event of your death or Disability (as
defined in the Plan), the Stock Option shall be exercisable within
one (1) year after such event by your or your
beneficiaries/estate.





 





3.



Expiration.
This Stock Option will expire and will no longer be exercisable at
5:00 p.m. Eastern Time, on the earliest of:








 



(a)


The
expiration date specified on the cover page of this Agreement;
or








 



(b)


As set
forth in Sections 6.2 (f), (g) or (h) of the Plan;








 




 

1








 






 



4.



Exercise of
Option. The vested and exercisable portion of this
Stock Option may be exercised in whole or in part at any time
during the Stock Option term by delivering a written or electronic
notice of exercise to the Company’s co-Chief Executive
Officer or to such other party as may be designated by such
officer, and by providing for payment of the exercise price of the
Shares being acquired and any related withholding taxes. The notice
of exercise must be in a form approved by the Company and state the
number of Shares to be purchased, the method of payment of the
aggregate exercise price and the directions for the delivery of the
Shares to be acquired, and must be signed or otherwise
authenticated by the person exercising the Option. If you are not
the person exercising the Option, the person submitting the notice
also must submit appropriate proof of his/her right to exercise the
Option.








 



5.



Payment of Exercise
Price. When you submit your notice of exercise, you
must include payment of the Exercise Price of the Shares being
purchased through one or a combination of the following
methods:








 



(a)


Cash
(including wire transfer), certified or bank check or personal
check, payable to the Company;or








 



(b)



Partly in cash and partly in Common Stock. Payments in the form of
Common Stock shall be valued at the Fair Market Value on the date
prior to the date of exercise. Such payments shall be made by
delivery of stock certificates in negotiable form that are
effective to transfer good and valid title thereto to the Company,
free of any liens or encumbrances ; or








 



(c)



By means of a “cashless” exercise in which you
shall be entitled to receive a number of Shares of Common Stock
equal to the quotient obtained by dividing [(A-B) (X)] by (A),
where: 






 



(A)

= the closing bid
price of the Common Stock on the NYSE American LLC or such other
stock exchange the Company’s Common Stock is then listed as
of the trading day immediately preceding the date of the notice of
exercise; 






 



(B)

= the Exercise
Price of the Stock Option; and 





 

(X) = the number of
Shares of Common Stock that would be issuable upon exercise of the
Stock Option in accordance with the terms of the Stock Option if
such exercise were by means of a cash exercise rather than a
cashless exercise; or




 



(d)



Such other means which the Committee determines are consistent with
the Plan’s purpose and applicable law.






 


The
Company shall not be required to deliver certificates for shares of
Common Stock with respect to which the Stock Option is exercised
until the Company has confirmed the receipt of good and available
funds in payment of the Exercise Price thereof.


 




 

2








 






 



6.



Withholding
Taxes. You may not exercise this Stock Option in
whole or in part unless you make arrangements acceptable to the
Company for payment of any federal, state, local or foreign
withholding taxes that may be due as a result of the exercise of
this Stock Option. Not later than the
date as of which an amount must first be included in your gross
income for Federal income tax purposes with respect to any Stock
Option under the Plan, you agreed to pay to the Company, or make
arrangements satisfactory to the Committee regarding the payment
of, any Federal, state and local taxes of any kind required by law
to be withheld or paid with respect to such amount. If permitted by
the Committee, tax withholding or payment obligations may be
settled with Common Stock, including Common Stock that is part of
the Stock Option that gives rise to the withholding requirement.
The obligations of the Company under the Plan shall be conditioned
upon such payment or arrangements and the Company shall, to the
extent permitted by law, have the right to deduct any such taxes
from any payment of any kind otherwise due to you from the Company
or any Subsidiary. Delivery of Shares upon exercise of this
Stock Option is subject to the satisfaction of applicable
withholding tax obligations.








 



7.



Delivery of
Shares. As soon as practicable after the Company
receives the notice of exercise and payment of the Exercise Price
as provided above, and has determined that all other conditions to
exercise, including satisfaction of withholding tax obligations and
compliance with applicable laws as provided in the Plan, have been
satisfied, it shall deliver to the person exercising the Stock
Option, in the name of such person, the Shares being purchased, as
evidenced by issuance of a stock certificate or certificates,
electronic delivery of such Shares to a brokerage account
designated by such person, or book-entry registration of such
Shares with the Company’s transfer agent. The Company shall
pay any original issue or transfer taxes with respect to the issue
or transfer of the Shares and all fees and expenses incurred by it
in connection therewith. All Shares so issued shall be fully paid
and nonassessable.








 



8.



Transfer of
Option. Subject to the provisions of Section 6.2(e)
of the Plan, the Stock Option is not
transferable by you other than by will or by the laws of descent
and distribution, and all Stock Options shall be exercisable,
during your lifetime, only by you (or, to the extent of legal
incapacity or incompetency, your guardian or legal
representative).








 



9.



No Shareholder Rights
Before Exercise. Neither you nor any permitted
transferee of this Stock Option will have any of the rights of a
shareholder of the Company with respect to any Shares subject to
this Stock Option until a certificate evidencing such Shares has
been issued, electronic delivery of such Shares has been made to
your designated brokerage account, or an appropriate book entry in
the Company’s stock register has been made. No adjustments
shall be made for dividends or other rights if the applicable
record date occurs before your stock certificate has been issued,
electronic delivery of your Shares has been made to your designated
brokerage account, or an appropriate book entry in the
Company’s stock register has been made, except as otherwise
described in the Plan.








 



10.



Governing Plan
Document. This Agreement and Stock Option are subject
to all the provisions of the Plan, and to all interpretations,
rules and regulations which may, from time to time, be adopted and
promulgated by the Committee pursuant to the Plan. If there is any
conflict between the provisions of this Agreement and the Plan, the
provisions of the Plan will govern.








 




 

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11.



Choice of
Law. This Agreement will be interpreted and enforced
under the laws of the state of North Carolina (without regard to
its conflicts or choice of law principles).








 



12.



Binding
Effect. This Agreement will be binding in all
respects on your heirs, representatives, successors and assigns,
and on the successors and assigns of the Company.








 



13.



Other
Agreements. You agree that in connection with the
exercise of this Stock Option, you will execute such documents as
may be necessary to become a party to any shareholder, voting or
similar agreements as the Company may require.








 



14.



Restrictive
Legends. The Company may place a legend or legends on
any certificate representing Shares issued upon the exercise of
this Stock Option summarizing transfer and other restrictions to
which the Shares may be subject under applicable securities laws,
other provisions of this Agreement, or other agreements
contemplated by Section 13 of this Agreement. You agree that in
order to ensure compliance with the restrictions referred to in
this Agreement, the Company may issue appropriate “stop
transfer” instructions to its transfer agent.








 



15.

 Compensation Recovery
Policy. To the extent that any compensation paid or
payable pursuant to this Agreement is considered
“incentive-based compensation” within the meaning and
subject to the requirements of Section 10D of the Exchange Act,
such compensation shall be subject to potential forfeiture or
recovery by the Company in accordance with any compensation
recovery policy adopted by the Board or any committee thereof in
response to the requirements of Section 10D of the Exchange Act and
any implementing rules and regulations thereunder adopted by the
Securities and Exchange Commission or any national securities
exchange on which the Company’s Common Stock is then listed.
This Agreement may be unilaterally amended by the Company to comply
with any such compensation recovery policy.








 



16.

 Electronic Delivery and
Acceptance. The Company may deliver any documents
related to this Stock Option by electronic means and request your
acceptance of this Agreement by electronic means. You hereby
consent to receive all applicable documentation by electronic
delivery and to participate in the Plan through an on-line (and/or
voice activated) system established and maintained by the Company
or the Company’s third-party stock plan
administrator.








 



17.



Data
Privacy. You understand
that the Company, its Subsidiaries and affiliated companies may
hold certain personal information about you, specifically: your
name, home address, email address and telephone number, date of
birth, social security or insurance number, passport number or
other identification number, salary, nationality, and any shares of
Common Stock held in the Company, and details of this Stock Option
or any other entitlement to shares of Common Stock, canceled,
exercised, vested, unvested or outstanding in your favor
(collectively, the “Data”), for the purpose of implementing,
administering and managing the Plan.






 




 

4








 






 

You
hereby explicitly and unambiguously consent to the collection, use
and transfer, in electronic or other form, of your Data as
described in this Agreement and any other grant materials by and
among, as necessary and applicable, the Company and any of its
Subsidiaries or affiliated companies, for the exclusive purpose of
implementing, administering and managing your participation in the
Plan. 

 

You understand that Data will be transferred to
the Company’s Stock Plan Administrator or such other stock
plan service provider as may be selected by the Company in the
future, which is assisting the Company with the implementation,
administration and management of the Plan. You authorize the
Company, the Company’s Stock Plan Administrator and any other
possible recipients that may assist the Company (presently or in
the future) with implementing, administering and managing the Plan
to receive, possess, use, retain and transfer Data, in electronic
or other form, for the sole purpose of implementing, administering
and managing your participation in the Plan. Further, you
understands that you are providing the consents herein on a purely
voluntary basis. If you do not consent, or if you later seek to
revoke your consent, your service status and career will not be
affected; the only consequence of refusing or withdrawing your
consent is that the Company would not be able to grant you this
Stock Option or other equity awards or administer or maintain such
awards. Therefore, you understands that refusing or withdrawing
your consent may affect your ability to participate in the
Plan.




 



18.



Insider
Trading. By
participating in the Plan, you agrees to comply with the
Company’s policy on insider trading, a copy of which has
previously been provided to you.






  







 

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