Exhibit
10.2


 


Form
of Stock Appreciation Rights Agreement


 


This
Stock Appreciation Rights Agreement (this “Agreement”) is made and entered into as of [DATE] by and between
Sigma Labs, Inc., a Nevada corporation (the “Company”) and [EMPLOYEE NAME] (the “Participant”).


 


Grant
Date: ____________________________________


 


Number
of SARs: ________________________________


 


Exercise
Price per SAR: __________________________


 


Expiration
Date: _________________________________


 


1.
Grant of SARs.


 


1.1
Grant. The Company hereby grants to the
Participant an aggregate of [NUMBER] stock appreciation rights (the “SARs”). Each SAR entitles the Participant
to receive, upon exercise, an amount equal to the excess of (a) the Fair Market Value of a share of Common Stock on the date of
exercise, over (b) the Exercise Price (the “Appreciation Value”). The SARs are being granted pursuant to the
terms of the Company’s 2020 Stock Appreciation Rights Plan (the “Plan”).


 


1.2
Consideration; Subject to Plan. The grant
of the SARs is made in consideration of the services to be rendered by the Participant to the Company and is subject to the terms
and conditions of the Plan. Capitalized terms used but not defined herein will have the meaning ascribed to them in the Plan.


 


2.
Vesting.


 


2.1
Vesting Schedule. [The SARs will vest
and become exercisable in [___________] equal installments on each of the [_________________] anniversaries of the Grant Date.
Except as otherwise provided in this Agreement, the unvested SARs will not be exercisable on or after the Participant’s
termination of Continuous Service.


 


OR


 


Each
SAR will vest and become exercisable on the [__________] anniversary of the Grant Date. Except as otherwise provided in this Agreement,
the unvested SARs will not be exercisable on or after the Participant’s termination of Continuous Service.


 


OR


 


Each
SAR will vest and become exercisable on the date that the Committee certifies the achievement of the performance conditions set
forth on Schedule I attached hereto. Except as otherwise provided in this Agreement, the unvested SARs will not be exercisable
on or after the Participant’s termination of Continuous Service.]


 


2.2
Expiration. The SARs will expire on the
Expiration Date set forth above, or earlier as provided in this Agreement or the Plan.


 


3.
Termination of Continuous Service.


 




    	 



     


    

 


3.1
Termination for Reasons Other Than Cause, Death, Disability.
If the Participant’s Continuous Service is terminated for any reason other than Cause, death or Disability, the Participant
may exercise the vested SARs, but only within such period of time ending on the earlier of (a) the date three months following
the termination of the Participant’s Continuous Service or (b) the Expiration Date.


 


3.2
Termination for Cause. If the Participant’s
Continuous Service is terminated for Cause, the SARs (whether vested or unvested) shall immediately terminate and cease to be
exercisable.


 


3.3
Termination due to Disability. If the
Participant’s Continuous Service terminates as a result of the Participant’s Disability, the Participant may exercise
the vested SARs, but only within such period of time ending on the earlier of (a) the date 12 months following the Participant’s
termination of Continuous Service or (b) the Expiration Date.


 


3.4
Termination due to Death. If the Participant’s
Continuous Service terminates as a result of the Participant’s death, the vested SARs may be exercised by the Participant’s
estate, by a person who acquired the right to exercise the SARs by bequest or inheritance or by the person designated to exercise
the SARs upon the Participant’s death, but only within the time period ending on the earlier of (a) the date 12 months following
the Participant’s termination of Continuous Service or (b) the Expiration Date.


 


4.
Manner of Exercise.


 


4.1
When to Exercise. Except as otherwise
provided in the Plan or this Agreement, the Participant (or in the case of exercise after the Participant’s death or incapacity,
the Participant’s executor, administrator, heir or legatee, as the case may be) may exercise his or her vested SARs, in
whole or in part, at any time after vesting and until the Expiration Date or earlier termination pursuant to Section 3 hereof,
by following the procedures set forth in this Section 4. If partially exercised, the Participant may exercise the remaining unexercised
portion of the SARs at any time after vesting and until the Expiration Date or earlier termination pursuant to Section 3 hereof.
No SARs shall be exercisable after the Expiration Date.


 


4.2
Election to Exercise. To exercise the
SARs, the Participant (or in the case of exercise after the Participant’s death or incapacity, the Participant’s executor,
administrator, heir or legatee, as the case may be) must deliver to the Company a written notice (or notice through another previously
approved method, which could include a web-based or e-mail system) to the Secretary of the Company which sets forth the number
of SARs being exercised, together with any additional documents the Company may require. Each such notice must satisfy whatever
then-current procedures apply to the SARs and must contain such representations as the Company requires.


 


4.3
Documentation of Right to Exercise. If
someone other than the Participant exercises the SARs, then such person must submit documentation reasonably acceptable to the
Company verifying that such person has the legal right to exercise the SARs.


 


4.4
Date of Exercise. The SARs shall be deemed
to be exercised on the business day that the Company receives a fully executed exercise notice. If the notice is received after
business hours on such date, then the SAR shall be deemed to be exercised on the business date immediately following the business
date such notice is received by the Company.


 




    	 



     


    

 


5.
Withholding. Prior to the payment of the
Appreciation Value in connection with the exercise of the SARs, the Participant must make arrangements satisfactory to the Company
to pay or provide for any applicable federal, state and local withholding obligations of the Company.


 


6.
Form of Payment. Upon the exercise of
all or a portion of the SARs, the Participant shall be entitled to a cash payment equal to the Appreciation Value of the SARs
being exercised, less any amounts withheld pursuant to Section 5.


 


7.
Section 409A; No Deferral of Compensation.
Neither the Plan nor this Agreement is intended to provide for the deferral of compensation within the meaning of Section 409A
of the Internal Revenue Code (the “Code”). The Company reserves the right to unilaterally amend or modify the
Plan or this Agreement, to the extent the Company considers it necessary or advisable, in its sole discretion, to comply with,
or to ensure that the SARs granted hereunder are not subject to, Section 409A of the Code.


 


8.
No Right to Continued Employment. Neither
the Plan nor this Agreement shall confer upon the Participant any right to be retained in any position, as an Employee, Consultant
or Director of the Company. Further, nothing in the Plan or this Agreement shall be construed to limit the discretion of the Company
to terminate the Participant’s Continuous Service at any time, with or without Cause.


 


9.
Transferability. The SARs are not transferable by the
Participant other than to a designated beneficiary upon the Participant’s death or by will or the laws of descent and distribution,
and are exercisable during the Participant’s lifetime only by him or her. No assignment or transfer of the SARs, or the
rights represented thereby, whether voluntary or involuntary, by operation of law or otherwise (except to a designated beneficiary
upon death by will or the laws of descent or distribution) will vest in the assignee or transferee any interest or right herein
whatsoever, but immediately upon such assignment or transfer the SARs will terminate and become of no further effect.


 


10.
Change in Control.


 


10.1
Effect on SARs. [In the event of a Change
in Control, notwithstanding any provision of the Plan or this Agreement to the contrary, the SARs shall become immediately vested
and exercisable.


 


OR


 


If
a Change in Control occurs and the Participant’s Continuous Service is terminated by the Company without Cause (other
than for death or Disability) within 12 months following the Change in Control, 100% of the SARs shall become immediately vested
and exercisable.


 


OR


 


Unless
otherwise determined by the Committee at the time of a Change in Control, a Change in Control shall have no effect on the SARs.]


 


10.2
Cash-out. In the event of a Change in
Control, the Committee may, in its discretion and upon at least ten (10) days’ advance notice to the Participant, cancel
the SARs and pay to the Participant the Appreciation Value of the SARs based upon the price per share of Common Stock received
or to be received by other shareholders of the Company in the event. Notwithstanding the foregoing, if at the time of a Change
in Control the Exercise Price of the SAR equals or exceeds the price paid for a share of Common Stock in connection with the Change
in Control, the Committee may cancel the SAR without the payment of consideration therefor.


 




    	 



     


    

 


11.
Adjustments. The SARs may be adjusted
or terminated in any manner as contemplated by Section 7 of the Plan.


 


12.
Tax Liability and Withholding. Notwithstanding any action
the Company takes with respect to any or all income tax, social insurance, payroll tax, or other tax-related withholding (“Tax-Related
Items”), the ultimate liability for all Tax-Related Items is and remains the Participant’s responsibility and
the Company (a) makes no representation or undertakings regarding the treatment of any Tax-Related Items in connection with the
grant, vesting, or exercise of the SARs and (b) does not commit to structure the SARs to reduce or eliminate the Participant’s
liability for Tax-Related Items.


 


13.
Compliance with Law. The exercise of the
SARs shall be subject to compliance by the Company and the Participant with all Applicable Laws, including the requirements of
any stock exchange on which the Company’s shares of Common Stock may be listed. The Participant may not exercise the SARs
if such exercise would violate any applicable Federal or state securities laws or other laws or regulations.


 


14.
Notices. Any notice required to be delivered
to the Company under this Agreement shall be in writing and addressed to the Secretary of the Company at the Company’s principal
corporate offices. Any notice required to be delivered to the Participant under this Agreement shall be in writing and addressed
to the Participant at the Participant’s address as shown in the records of the Company. Either party may designate another
address in writing (or by such other method approved by the Company) from time to time.


 


15.
Governing Law. This Agreement will be
construed and interpreted in accordance with the laws of the State of Nevada without regard to conflict of law principles.


 


16.
Interpretation. Any dispute regarding
the interpretation of this Agreement shall be submitted by the Participant or the Company to the Committee for review. The resolution
of such dispute by the Committee shall be final and binding on the Participant and the Company.


 


17.
SARs Subject to Plan. This Agreement is
subject to the Plan. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein
by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the
applicable terms and provisions of the Plan will govern and prevail.


 


18.
Successors and Assigns. The Company may
assign any of its rights under this Agreement. This Agreement will be binding upon and inure to the benefit of the successors
and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement will be binding upon the
Participant and the Participant’s beneficiaries, executors, administrators and the person(s) to whom the SARs may be transferred
by will or the laws of descent or distribution.


 


19.
Severability. The invalidity or unenforceability
of any provision of the Plan or this Agreement shall not affect the validity or enforceability of any other provision of the Plan
or this Agreement, and each provision of the Plan and this Agreement shall be severable and enforceable to the extent permitted
by law.


 


20.
Discretionary Nature of Plan. The Plan
is discretionary and may be amended, cancelled or terminated by the Company at any time, in its discretion. The grant of the SARs
in this Agreement does not create any contractual right or other right to receive any SARs or other Awards in the future. Future
Awards, if any, will be at the sole discretion of the Company. Any amendment, modification, or termination of the Plan shall not
constitute a change or impairment of the terms and conditions of the Participant’s employment with the Company.


 




    	 



     


    

 


21.
Amendment. The Committee has the right
to amend, alter, suspend, discontinue or cancel the SAR, prospectively or retroactively; provided, that, no such amendment
shall adversely affect the Participant’s material rights under this Agreement without the Participant’s consent.


 


22.
No Impact on Other Benefits. The value
of the Participant’s SARs is not part of his or her normal or expected compensation for purposes of calculating any severance,
retirement, welfare, insurance or similar employee benefit.


 


23.
Counterparts. This Agreement may be executed
in counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument.
Counterpart signature pages to this Agreement transmitted by facsimile transmission, by electronic mail in portable document format
(.pdf), or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will
have the same effect as physical delivery of the paper document bearing an original signature.


 


24.
Acceptance. The Participant hereby acknowledges receipt
of a copy of the Plan and this Agreement. The Participant has read and understands the terms and provisions thereof, and accepts
the SARs subject to all of the terms and conditions of the Plan and this Agreement. The Participant acknowledges that there may
be adverse tax consequences upon exercise of the SARs and that the Participant should consult a tax advisor prior to such exercise.


 


(Signature
page follows)


 




    	 



     


    

 


IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.





 


	 	Sigma
    Labs, Inc.
	 	 
	 	By:	
	 	Name:	Mark
    K. Ruport
	 	Title:	Chief
    Executive Officer
	 	 	 
	 	[EMPLOYEE
    NAME]
	 	 
	 	 
	 	Name: