# EDGAR Filing Document

**Accession Number:** 0001326706
**File Stem:** 0001493152-25-020244
**Filing Date:** 2025-10
**Character Count:** 389663
**Document Hash:** fdd686664fc7c8ba2c470dc168e4a9e4
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-25-020244.hdr.sgml**: 20251030

**ACCESSION NUMBER**: 0001493152-25-020244

**CONFORMED SUBMISSION TYPE**: PRE 14A

**PUBLIC DOCUMENT COUNT**: 20

**CONFORMED PERIOD OF REPORT**: 20251030

**FILED AS OF DATE**: 20251030

**DATE AS OF CHANGE**: 20251030

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** NanoVibronix, Inc.
- **CENTRAL INDEX KEY:** 0001326706
- **STANDARD INDUSTRIAL CLASSIFICATION:** ORTHOPEDIC, PROSTHETIC & SURGICAL APPLIANCES & SUPPLIES [3842]
- **ORGANIZATION NAME:** 08 Industrial Applications and Services
- **EIN:** 000000000
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** PRE 14A
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-36445
- **FILM NUMBER:** 251436170

**BUSINESS ADDRESS:**
- **STREET 1:** 969 PRUITT AVE,
- **CITY:** TYLER
- **STATE:** TX
- **ZIP:** 77569
- **BUSINESS PHONE:** (914) 233-3004

**MAIL ADDRESS:**
- **STREET 1:** 969 PRUITT AVE,
- **CITY:** TYLER
- **STATE:** TX
- **ZIP:** 77569

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Nano Vibronix, Inc.
- **DATE OF NAME CHANGE:** 20111206

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Nano Vibronix Inc
- **DATE OF NAME CHANGE:** 20050510

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**SCHEDULE 14A**

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

Check the appropriate box:

☒ Preliminary Proxy Statement

☐ **Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))**

☐ Definitive Proxy Statement

☐ Definitive Additional Materials

☐ Soliciting Material Pursuant to §240.14a-12

---

| |
|:---|
| **NanoVibronix, Inc.** |
| (Name of Registrant as Specified In Its Charter) |
| (Name of Person(s) Filing Proxy Statement, if other than the Registrant) |

---

---

| | |
|:---|:---|
| Payment of Filing Fee (Check all boxes that apply): | Payment of Filing Fee (Check all boxes that apply): |
| ☒ | No fee required. |
| ☐ | Fee paid previously with preliminary materials. |
| ☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |

---

![](formpre14a_001.jpg)

969 Pruitt Place

Tyler TX 75703

(914) 233-3004

___________________, 2025

Dear Stockholder:

You are cordially invited to attend the 2025 Annual Meeting of Stockholders (the "Annual Meeting") of NanoVibronix, Inc., a Delaware corporation ("we," "us," "our" or the "Company"), which will be held on December 4, 2025, at 10:00 a.m. Eastern Time at *www.virtualshareholdermeeting.com/NAOV2025*. To provide access to our stockholders regardless of geographic location, the Company has determined that the Annual Meeting will be a virtual meeting conducted exclusively via live webcast. You or your proxyholder will be able to attend the virtual Annual Meeting online, vote, and submit questions during the Annual Meeting by visiting *www.virtualshareholdermeeting.com/NAOV2025* and entering the 16-digit control number included on the proxy card or voting instruction form, as applicable. To receive access to the virtual Annual Meeting, registered stockholders and beneficial stockholders (those holding shares through a stock brokerage account or by a bank or other holder of record) will need to follow the instructions applicable to them provided in the accompanying proxy statement. Details regarding the Annual Meeting and the business to be conducted at the Annual Meeting are more fully described in the accompanying Notice of Annual Stockholders Meeting and proxy statement. You are entitled to vote at our Annual Meeting and any adjournments, continuations or postponements thereof only if you were a stockholder as of October 27, 2025.

Your vote is very important, regardless of the number of shares of our voting securities that you own. Whether or not you expect to attend the Annual Meeting online, please vote as promptly as possible to ensure your representation and the presence of a quorum at the Annual Meeting. To vote your shares, you may use the enclosed proxy card, vote by telephone or over the Internet, or attend the meeting virtually and submit your vote electronically. If your shares are held in the name of a broker, trust, bank or other nominee, and you receive these materials through your broker or through another intermediary, please complete and return the materials in accordance with the instructions provided to you by such broker or such other intermediary, or contact your broker directly in order to obtain a proxy issued to you by your nominee holder to virtually attend the meeting and vote online during the meeting. Failure to do so may result in your shares not being eligible to be voted by proxy at the meeting.

On behalf of the board of directors, I urge you to submit your vote as soon as possible, even if you currently plan to attend the Annual Meeting online.

Thank you for your support of our Company. I look forward to seeing you online at the Annual Meeting via remote communication.

---

| |
|:---|
| Sincerely, |
| Doron Besser, M.D. |
| *Chief Executive Officer and Director* |

---

**NanoVibronix, Inc.**

969 Pruitt Place

Tyler TX 75703

(914) 233-3004

**NOTICE OF ANNUAL MEETING OF STOCKHOLDERS**

**To Be Held on December 4, 2025**

The 2025 Annual Meeting of Stockholders (the "Annual Meeting") of NanoVibronix, Inc., a Delaware corporation ("we," "us," "our" or the "Company"), will be held on December 4, 2025, at 10:00 a.m. Eastern Time, via a live webcast on the Internet. You will be able to virtually attend the Annual Meeting online, vote and submit questions during the Annual Meeting by visiting *www.virtualshareholdermeeting.com/NAOV2025*. Only stockholders of record of our common stock, as of the close of business on October 27, 2025 (the "Record Date"), will be entitled to vote at the Annual Meeting and any adjournments, continuations or postponements thereof that may take place.

We will consider and act on the following items of business at the Annual Meeting:

(1) Election
 of the five nominees to serve on the Company's board of directors (the "Board") for a term of one year or until
 their respective successors are elected and qualified, for which the following are nominees: Doron Besser, M.D., Zeev Rotstein, M.D.,
 David Johnson, Nino Pionati and Alison Geiger Burgett (the "Director Election Proposal");

(2) Ratification
 of the appointment of Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global ("E&Y") as our independent
 registered public accounting firm for the fiscal year ending December 31, 2025 (the "Auditor Ratification Proposal");

(3) Approval
 of an amendment to the NanoVibronix, Inc. 2024 Long-Term Incentive Plan to increase the total number of shares of common stock authorized
 for issuance under the 2024 Plan (the "Plan Amendment Proposal");

(4) To
 authorize, for purposes of complying with Nasdaq Listing Rule 5635(d), the issuance of shares of our common stock underlying shares
 of convertible preferred stock and warrants issued by us in a private placement in July 2025, in an amount equal to or in excess
 of 19.99% of our common stock outstanding before the issuance of such convertible preferred stock and warrants (including upon the
 operation of anti-dilution provisions applicable to such convertible preferred stock) (the "Issuance Proposal");

(5) Approval
 of a proposal to adjourn the Annual Meeting to a later date or dates, if necessary or appropriate, to permit further solicitation
 and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of any one
 or more of the foregoing proposals (the "Adjournment Proposal"); and

(6) Such
 other business as may arise and that may properly be conducted at the Annual Meeting or any adjournment or postponement thereof.

Stockholders are referred to the proxy statement accompanying this notice for more detailed information with respect to the matters to be considered at the Annual Meeting. After careful consideration, the "Board has determined that each proposal listed above is in the best interests of the Company and its stockholders and has approved each proposal. **The Board recommends a vote "FOR" the election of each of the nominees for directors listed in the Director Ratification Proposal and "FOR" the Auditor Ratification Proposal, the Plan Amendment Proposal, the Issuance Proposal, and the Adjournment Proposal.**

The Board has fixed the close of business on October 27, 2025, as the record date (the "Record Date") for the Annual Meeting. Only stockholders of record of our common stock on the Record Date are entitled to receive notice of the Annual Meeting and vote at the Annual Meeting. A complete list of registered stockholders entitled to vote at the Annual Meeting will be available for inspection at the principal executive offices of the Company (upon request to us by mail at NanoVibronix, Inc., 969 Pruitt Place, Tyler TX 75703, Attn: Doron Besser, M.D., or by calling 914-233-3004 and asking for Doron Besser, M.D.) during regular business hours for the 10 calendar days prior to the Annual Meeting.

**YOUR VOTE AND PARTICIPATION IN THE COMPANY'S AFFAIRS ARE IMPORTANT.**

**Whether or not you plan to attend the Annual Meeting online, we urge you to vote your shares as promptly as possible by Internet, telephone or mail. For specific instructions on how to vote your shares, please see the section entitled "About the Annual Meeting" beginning on page 2 of the proxy statement.**

*If your shares are registered in your name*, even if you plan to attend the Annual Meeting (or any postponement or adjournment of the Annual Meeting) online, we request that you complete, date, sign and mail the proxy card in accordance with the instructions set out in the form of proxy and in the proxy statement to ensure that your shares will be represented at the Annual Meeting.

*If your shares are held in the name of a broker, trust, bank or other nominee*, and you receive these materials through your broker or through another intermediary, please complete and return the materials in accordance with the instructions provided to you by such broker or such other intermediary or contact your broker directly in order to obtain a proxy issued to you by your nominee holder to virtually attend the Annual Meeting and vote online. Failure to do so may result in your shares not being eligible to be voted by proxy at the Annual Meeting online.

---

| |
|:---|
| By Order of the Board, |
| Doron Besser, M.D. |
| *Chief Executive Officer and Director* |
| _____________________, 2025 |

---

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
| [ABOUT THE ANNUAL MEETING](#a_001) | 2 |
| [PROPOSAL 1: ELECTION OF DIRECTORS](#a_024) | 9 |
| &nbsp;&nbsp;&nbsp;[Directors and Company Nominees](#a_002) | 9 |
| [CORPORATE GOVERNANCE](#a_003) | 12 |
| &nbsp;&nbsp;&nbsp;[Code of Business and Ethics](#a_004) | 12 |
| &nbsp;&nbsp;&nbsp;[Board Composition](#a_005) | 12 |
| &nbsp;&nbsp;&nbsp;[Director Independence](#a_006) | 12 |
| &nbsp;&nbsp;&nbsp;[Board Committees, Meetings, and Attendance](#a_007) | 13 |
| &nbsp;&nbsp;&nbsp;[Board Leadership Structure](#a_010) | 14 |
| &nbsp;&nbsp;&nbsp;[Role in Risk Oversight](#a_011) | 15 |
| &nbsp;&nbsp;&nbsp;[Family Relationships and Involvement in Certain Legal Proceedings](#a_008) | 15 |
| &nbsp;&nbsp;&nbsp;[Communications with Directors](#a_012) | 16 |
| &nbsp;&nbsp;&nbsp;[Director Nominations](#a_009) | 17 |
| [DIRECTOR COMPENSATION](#a_013) | 18 |
| [CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS](#a_014) | 20 |
| [EXECUTIVE COMPENSATION](#a_015) | 21 |
| [SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT](#a_016) | 39 |
| [REPORT OF THE AUDIT COMMITTEE](#a_017) | 41 |
| [PROPOSAL 2: RATIFICATION OF APPOINTMENT OF Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM](#a_018) | 42 |
| [PROPOSAL 3: APPROVAL OF NANOVIBRONIX, INC. 2024 LONG-TERM INCENTIVE PLAN](#a_019) | 44 |
| [PROPOSAL 4: APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION PAID TO OUR NAMED EXECUTIVE OFFICERS](#a_020) | 54 |
| [PROPOSAL NO. 5: ADJOURNMENT OF THE ANNUAL MEETING, IF NECESSARY, TO SOLICIT ADDITIONAL PROXIES IF THERE ARE INSUFFICIENT VOTES AT THE TIME OF THE ANNUAL MEETING TO APPROVE ONE OR MORE PROPOSALS PRESENTED AT THE ANNUAL MEETING](#a_021) | 59 |
| [OTHER BUSINESS](#a_022) | 60 |
| [SUBMISSION OF FUTURE STOCKHOLDER PROPOSALS](#a_023) | 60 |

---

i

**NanoVibronix, Inc.**

969 Pruitt Place

Tyler TX 75703

(914) 233-3004

**PROXY STATEMENT**

**FOR**

**ANNUAL MEETING OF STOCKHOLDERS**

**To Be Held on December 4, 2025**

Unless the context otherwise requires, references in this proxy statement (this "Proxy Statement") to "we," "us," "our," "the Company," or "NanoVibronix" refer to NanoVibronix, Inc., a Delaware corporation, and its consolidated subsidiary as a whole. In addition, unless the context otherwise requires, references to "stockholders" are to the holders of our common stock.

The accompanying proxy is solicited by the board of directors of the Company (the "Board") on behalf of NanoVibronix, Inc. to be voted at the 2025 annual meeting of stockholders of the Company (the "Annual Meeting") to be held virtually via a live webcast on the Internet on December 4, 2025, at 10:00 a.m. Eastern Time, at the Internet address and for the purposes set forth in the accompanying Notice of Annual Meeting of Stockholders (the "Notice"). This Proxy Statement and accompanying form of proxy are dated November 10, 2025, and are expected to be first sent, given or made available to stockholders on or about November 10, 2025.

If you held shares of our common stock at the close of business on October 27, 2025 (the "Record Date"), you are invited to attend the Annual Meeting virtually at *www.virtualshareholdermeeting.com/NAOV2025* and vote on the proposals described in this Proxy Statement.

We will pay the costs of soliciting proxies from stockholders. Our directors, officers and employees will solicit proxies on behalf of the Company, without additional compensation, by telephone, facsimile, mail, on the Internet or in person.

Our executive offices are located at, and our mailing address is 969 Pruitt Place, Tyler TX 75703.

**IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE MEETING OF STOCKHOLDERS TO BE HELD ON DECEMBER 4, 2025:**

**ABOUT THE ANNUAL MEETING**

**What is a proxy?**

A proxy is another person that you legally designate to vote your stock. If you designate someone as your proxy in a written document, that document is also called a "proxy" or a "proxy card."

**What is a proxy statement?**

A proxy statement is a document that regulations of the SEC require that we give to you when we ask you to sign a proxy card to vote your stock at the Annual Meeting.

**What is the purpose of the Annual Meeting?**

At our Annual Meeting, stockholders will act upon the matters outlined in the Notice, which include the following:

(1) Election
 of the five nominees to serve on the Company's board of directors (the "Board") for a term of one year or until
 their respective successors are elected and qualified, for which the following are nominees: Doron Besser, M.D., Zeev Rotstein, M.D.,
 David Johnson, Nino Pionati, and Alison Geiger Burgett (the "Director Election Proposal");

(2) Ratification
 of the appointment of Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global ("E&Y") as our independent
 registered public accounting firm for the fiscal year ending December 31, 2025 (the "Auditor Ratification Proposal");

(3) Approval
 of an amendment to the NanoVibronix, Inc. 2024 Long-Term Incentive Plan (the "2024 Incentive Plan Amendment" to increase
 the total number of shares of common stock authorized for issuance under the 2024 Plan (the "Plan Amendment Proposal");

(4) Approval
 to authorize, for purposes of complying with Nasdaq Listing Rule 5635(d), the issuance of shares of our common stock underlying
 shares of convertible preferred stock and warrants issued by us in a private placement in July 2025, in an amount equal to or in
 excess of 19.99% of our common stock outstanding before the issuance of such convertible preferred stock and warrants (including
 upon the operation of anti-dilution provisions applicable to such convertible preferred stock (the "Issuance Proposal");

(5) Approval
 of a proposal to adjourn the Annual Meeting to a later date or dates, if necessary or appropriate, to permit further solicitation
 and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of any one
 or more of the foregoing proposals (the "Adjournment Proposal"); and

(6) Such
 other business as may arise and that may properly be conducted at the Annual Meeting or any adjournment or postponement thereof.

**What should I do if I receive more than one set of voting materials?**

You may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. Similarly, if you are a stockholder of record and hold shares in a brokerage account, you will receive a proxy card for shares held in your name and a voting instruction card for shares held in "street name." Please complete, sign, date and return each proxy card and voting instruction card that you receive, or vote by telephone or Internet in accordance with the instructions set forth thereon, to ensure that all your shares are voted.

**What is "householding" and how does it affect me?**

With respect to eligible stockholders who share a single address, we may send a single copy of the proxy materials to that address unless we received instructions to the contrary from any stockholder at that address. This practice, known as "householding," is designed to reduce our printing and postage costs. However, if a stockholder of record residing at such address wishes to receive a separate proxy statement and other proxy materials in the future, he or she may contact us by mail at NanoVibronix, Inc., 969 Pruitt Place, Tyler TX 75703, Attn: Doron Besser, M.D. or by calling 914-233-3004 and asking for Doron Besser, M.D. Eligible stockholders of record receiving multiple copies of our proxy materials can request householding by contacting us in the same manner. Stockholders who own shares through a bank, broker or other nominee can request householding by contacting such nominee.

We hereby undertake to deliver promptly, upon written or oral request, a copy of the proxy materials to a stockholder at a shared address to which a single copy of the document was delivered. Requests should be directed to Rita Silberberg at the address or phone number set forth above.

**What is the record date and what does it mean?**

The record date to determine the stockholders entitled to notice of and to vote at the Annual Meeting is the close of business on October 27, 2025 (the "Record Date"). The Record Date is established by the Board as required by Delaware law. See "*Who is entitled to vote at the Annual Meeting and how many votes do they have?*" below.

**Who is entitled to vote at the Annual Meeting and how many votes do they have?**

Holders of Common Stock at the close of business on the Record Date, may vote at the Annual Meeting. There were 1,011,102 shares of Common Stock, 820 shares of Series G Preferred Stock, 11,111 shares of Series H Preferred Stock and 53,100 shares of Series X Preferred Stock issued and outstanding on the Record Date. A complete list of registered stockholders entitled to vote at the Annual Meeting will be available for inspection at our principal executive offices during regular business hours for the 10 calendar days prior to the Annual Meeting.

Pursuant to the rights of our stockholders contained in our charter documents, each share of our common stock is entitled to one vote on all matters listed in this proxy statement. There is no cumulative voting.

**What is the difference between a stockholder of record and a "street name" holder?**

If your shares are registered directly in your name with VStock Transfer, LLC, our stock transfer agent, you are considered the stockholder of record with respect to those shares. The proxy statement and the proxy card have been sent directly to you by us.

If your shares are held in a stock brokerage account or by a bank or other nominee, the nominee is considered the record holder of those shares. You are considered the beneficial owner of these shares, and your shares are held in "street name." The proxy statement and proxy card have been forwarded to you by your nominee. As the beneficial owner, you have the right to direct your nominee concerning how to vote your shares by using the voting instructions the nominee included in the mailing or by following such nominee's instructions for voting.

**What is a broker non-vote?**

A broker non-vote occurs when the broker holding shares for a beneficial owner has not received voting instructions from the beneficial owner and does not have discretionary authority to vote the shares. Under rules applicable to securities brokerage firms, a broker who holds your shares in "street name" does not have the authority to vote those shares on any "non-routine" proposal, except in accordance with voting instructions received from you. On the other hand, your broker may vote your shares on certain "routine matters," if the broker has transmitted proxy-soliciting materials to you, as the beneficial owner of the shares, but has not received voting instructions from you on such proposals. A broker non-vote occurs when a broker submits a proxy but does not vote for a matter because the broker has not received voting instructions from the beneficial owner and the broker does not have discretionary voting authority on the matter.

If you do not provide voting instructions to your broker, then your shares will not be voted at the Annual Meeting on any proposal with respect to which your broker does not have discretionary authority except as to "routine matters." With respect to the Auditor Ratification Proposal and the Adjournment Proposal only, your broker will have the discretion to vote your shares and, therefore, will be able to vote your shares with respect to such proposals even if you do not provide your broker with instructions on those proposals. Accordingly, we do not expect any broker non-votes in connection with either of the Auditor Ratification Proposal or the Adjournment Proposal.

**If I am a beneficial owner of shares, can my brokerage firm vote my shares?**

If you are a beneficial owner and do not vote via the Internet or telephone or by returning a signed voting instruction card to your broker, your shares may be voted only with respect to so-called "routine" matters where your broker has discretionary voting authority over your shares. Under the rules of the New York Stock Exchange that govern how brokers may vote shares for which they have not received voting instructions from the beneficial owner, brokers will have such discretionary authority to vote on the Auditor Ratification Proposal and the Adjournment Proposal, and may vote **"FOR"** such proposals. In the absence of specific instructions from you, your broker does not have discretionary authority to vote your shares with respect to the Director Election Proposal, the Plan Amendment Proposal or the Issuance Proposal.

We encourage you to provide instructions to your brokerage firm via the Internet or telephone or by returning your signed voting instruction card. This ensures that your shares will be voted at the Annual Meeting with respect to all of the proposals described in this Proxy Statement.

**When and where is the Annual Meeting and what do I need to be able to attend online?**

The Annual Meeting will be held on December 4, 2025, at 10:00 a.m. Eastern Time at *www.virtualshareholdermeeting.com/NAOV202*5. Any stockholder who owns our common stock on the Record Date can attend the Annual Meeting online.

You will be able to attend the Annual Meeting online, vote, and submit your questions during the Annual Meeting by visiting *www.virtualshareholdermeeting.com/NAOV2025*. To participate in the virtual meeting, you will need the 16-digit control number included on your proxy card or voting instruction form, as applicable. The meeting webcast will begin promptly at 10:00 a.m. Eastern Time. We encourage you to access the meeting prior to the start time and you should allow ample time for the check-in procedures. Because the Annual Meeting will be a completely virtual meeting, there will be no physical location for stockholders to attend.

**What Constitutes a Quorum for the Annual Meeting?**

The presence, by virtual attendance or by proxy, of the holders of one-third of the voting power of all of the shares of the stock entitled to vote at the Annual Meeting, is necessary to constitute a quorum at the Annual Meeting. Votes of stockholders of record who are present at the Annual Meeting by virtual attendance or by proxy, abstentions and broker non-votes are counted for purposes of determining whether a quorum exists.

If a quorum is not present or represented at the Annual Meeting, the chair of the Annual Meeting may adjourn the meeting to another place, if any, date, or time without notice other than announcement at the meeting.

**How do I vote my shares?**

If you are a record holder, you may choose one of the following methods to vote your shares:

● <u>Via Internet</u>: as prompted by the menu found at *www.proxyvote.com*, follow the instructions to obtain your records and submit
 an electronic ballot. Please have your Stockholder Control Number, which can be found on your proxy card, when you access this voting
 site. You may vote via the Internet until 11:59 p.m., Eastern Time on December 3, 2025.

● <u>Via telephone</u>: call 1-800-690-6903 and then follow the voice instructions. Please have your Stockholder Control Number, which can
 be found on your proxy card, when you call. You may vote by telephone until 11:59 p.m., Eastern Time on December 3, 2025.

● <u>Via mail</u>: You may vote by proxy by completing, signing, dating and promptly returning the proxy card in the postage-paid envelope.
 If you submit a signed proxy without indicating your vote, the person voting the proxy will vote your shares according to the Board's
 recommendation.

● <u>Online</u>:
 Online during the Annual Meeting at *www.virtualshareholdermeeting.com/NAOV2025*. You will need your Stockholder Control Number,
 which can be found on your proxy card, in hand when you vote online during the Annual Meeting.

The proxy is fairly simple to complete, with specific instructions on the electronic ballot, telephone or card. By completing and submitting it, you will direct the designated persons (known as "proxies") to vote your stock at the Annual Meeting in accordance with your instructions. The Board has appointed each of Doron Besser, M.D., our Chief Executive Officer and director and Rita Silberberg, our Executive Vice President of Finance and Chief Accounting Officer, to serve as the proxies for the Annual Meeting. Your proxy will be valid only if you complete and return it before the Annual Meeting. If you properly complete and transmit your proxy but do not provide voting instructions with respect to a proposal, then the designated proxies will vote your shares "**FOR**" the election of each of the nominees for director listed in the Director Election Proposal and "**FOR**" each of the Auditor Ratification Proposal, the Plan Amendment Proposal, the Issuance Proposal and the Adjournment Proposal to which you provided no voting instructions. We do not anticipate that any other matters will come before the Annual Meeting, but if any other matters properly come before the meeting, then the proxies will vote your shares in accordance with applicable law and their judgment.

If you hold your shares in "street name," your bank, broker or other nominee should provide to you a request for voting instructions along with the Company's proxy solicitation materials. By completing the voting instruction card, you may direct your nominee how to vote your shares. If you partially complete the voting instruction but fail to complete one or more of the voting instructions, then your nominee may be unable to vote your shares with respect to the proposal as to which you provided no voting instructions. See "What is a broker non-vote?" Alternatively, if you want to vote your shares during the virtual Annual Meeting, you must contact your nominee directly in order to obtain a proxy issued to you by your nominee holder. Note that a broker letter that identifies you as a stockholder is not the same as a nominee-issued proxy. **If you fail to obtain a nominee-issued proxy prior to the Annual Meeting, you will not be able to vote your nominee-held shares during the Annual Meeting.**

**Who counts the votes?**

All votes will be tabulated by the Inspector of Election appointed for the Annual Meeting. Each proposal will be tabulated separately.

**Can I vote my shares at the Annual Meeting?**

Yes. If you are a stockholder of record, you may vote your shares during the meeting by submitting your vote electronically at the Annual Meeting.

If you hold your shares in "street name," you may vote your shares during the Annual Meeting only if you obtain a proxy issued by your bank, broker or other nominee giving you the right to vote the shares.

Even if you currently plan to attend the virtual Annual Meeting, we recommend that you also return your proxy or voting instructions as described above so that your votes will be counted if you later decide not to attend the Annual Meeting or are unable to attend.

**What are my choices when voting?**

When you cast your vote on:

The Director Election Proposal: You may vote for all director nominees or may withhold your vote as to one or more director nominees.

The Auditor Ratification Proposal: You may vote for the proposal, against the proposal or abstain from voting on the proposal.

The Plan Amendment Proposal: You may vote for the proposal, against the proposal or abstain from voting on the proposal.

The Issuance Proposal: You may vote for the proposal, against the proposal or abstain from voting on the proposal.

The Adjournment Proposal: You may vote for the proposal, against the proposal or abstain from voting on the proposal.

**What are the Board's recommendations on how I should vote my shares?**

The Board recommends that you vote your shares as follows:

"**FOR**" the election of each of the nominees listed in the Director Election Proposal.

"**FOR**" each of the Auditor Ratification Proposal, the Plan Amendment Proposal, the Issuance Proposal, and the Adjournment Proposal.

**What if I do not specify how I want my shares voted?**

If you are a record holder who returns a completed proxy that does not specify how you want to vote your shares on one or more proposals, the proxies will vote your shares for each proposal as to which you provided no voting instructions, and such shares will be voted in the following manner:

"**FOR**" the election of each of the nominees listed in the Director Election Proposal.

"**FOR**" each of the Auditor Ratification Proposal, the Plan Amendment Proposal, the Issuance Proposal, and the Adjournment Proposal.

If you are a "street name" holder and do not provide voting instructions on one or more proposals, your bank, broker or other nominee will be unable to vote those shares with respect to the Director Election Proposal, the Plan Amendment Proposal and the Issuance Proposal. See "*What is a broker non-vote?*"

**Can I change my vote?**

Yes. If you are a record holder, you may revoke your proxy at any time by any of the following means:

● Attending
 the virtual Annual Meeting and submitting your vote electronically. Your attendance at the Annual Meeting will not by itself revoke
 a proxy. You must vote your shares by ballot at the virtual Annual Meeting to revoke your proxy.

● Completing
 and submitting a new valid proxy bearing a later date.

● Giving
 written notice of revocation to the Company addressed to Doron Besser, M.D., our Chief Executive Officer and a director, at our address
 above, which notice must be received before 5:00 p.m., Eastern Time on December 3, 2025.

If you are a "street name" holder, your bank, broker or other nominee should provide instructions explaining how you may change or revoke your voting instructions.

**What votes are required to approve each proposal?**

Assuming the presence of a quorum, the following sets forth the voting requirement with respect to each Proposal:

---

| | |
|:---|:---|
| **Proposal 1 — The Director Election Proposal** | The affirmative "FOR" vote of the holders of a plurality of the votes cast at the Annual Meeting is required for the election of the director nominees, i.e., the five director nominees who receive the most votes will be elected. |
| **Proposal 2 — The Auditor Ratification Proposal** | The affirmative "FOR" vote of a majority of the votes cast "FOR" or "AGAINST" the proposal. |
| **Proposal 3 – The Plan Amendment Proposal** | The affirmative "FOR" vote of a majority of the votes cast "FOR" or "AGAINST" the proposal. |
| **Proposal 4 - The Issuance Proposal** | The affirmative "FOR" vote of a majority of the votes cast "FOR" or "AGAINST" the proposal. |
| **Proposal 5 - The Adjournment Proposal** | The affirmative "FOR" vote of a majority of the votes cast "FOR" or "AGAINST" the proposal. |

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**How are abstentions and broker non-votes treated?**

Abstentions are included in the determination of the number of shares present at the Annual Meeting for determining a quorum at the meeting. Withholding authority to vote your shares with respect to one or more director nominees will have no effect on the election of those nominees, and abstentions will have no effect on any of the proposals at the Annual Meeting.

Broker non-votes are included in the determination of the number of shares present at the Annual Meeting for determining a quorum at the meeting. Failure to instruct your broker how to vote with respect to the Director Election Proposal, the Plan Amendment Proposal and the Issuance Proposal at the Annual Meeting will have no effect on the outcome of the votes. However, if you do not give your broker specific instructions on how to vote your shares with respect to the Auditor Ratification Proposal and the Adjournment Proposal, your broker may vote your shares at its discretion.

**Who is soliciting proxies, how are they being solicited, and who pays the cost?**

Proxies are being solicited by the Board on behalf of the Company. Our officers, directors, and employees may also solicit proxies personally or in writing, by telephone, e-mail, or otherwise. These officers and employees will not receive additional compensation but will be reimbursed for out-of-pocket expenses. Brokerage houses and other custodians, nominees, and fiduciaries, in connection with shares of the Common Stock registered in their names, will be asked to forward solicitation material to the beneficial owners of shares of Common Stock. We will reimburse brokerage houses and other custodians, nominees, and fiduciaries for their reasonable out-of-pocket expenses for forwarding solicitation materials and collecting voting instructions.

**When will the next shareholder advisory vote on executive compensation occur?**

At our 2021 annual meeting of stockholders, we submitted to stockholders an advisory vote on whether an advisory vote on executive compensation should be held every one, two, or three years. "Three years" was the frequency that received the highest number of votes. In light of such outcome, we hold an advisory vote on executive compensation every three years (with the last vote having occurred at the 2024 annual meeting of stockholders). The next "say-on-pay" vote is expected to occur at the annual meeting of our stockholders in 2027.

The next time we will submit to stockholders an advisory vote on the frequency of the advisory vote on executive compensation will be at the annual meeting of our shareholders in 2027 as well.

**Are there any other matters to be acted upon at the Annual Meeting?**

Management does not intend to present any business at the Annual Meeting for a vote other than the matters set forth in the Notice and has no information that others will do so. If other matters requiring a vote of the stockholders properly come before the Annual Meeting, it is the intention of the persons named in the form of proxy to vote the shares represented by the proxies held by them in accordance with applicable law and their judgment on such matters.

**Where can I find voting results?**

We expect to publish the voting results in a current report on Form 8-K, which we expect to file with the SEC within four business days after the Annual Meeting.

**Who can help answer my questions?**

The information provided above in this "Question and Answer" format is for your convenience only and is merely a summary of the information contained in this Proxy Statement. We urge you to carefully read this entire proxy statement, including the documents we refer to in this Proxy Statement. If you have any questions, or need additional materials, please feel free to contact Stephen Brown by email at steve@nanovibronix.com or phone at 914-233-3004. You will also be able to submit questions during the Annual Meeting.

**PROPOSAL 1** **— THE DIRECTOR ELECTION PROPOSAL**

The Board has nominated five directors for election at the Annual Meeting by the stockholders (each referred to herein as a "Company Nominee" and, collectively as the "Company Nominees"). The Board manages our company's business and affairs, exercises all corporate powers and establishes corporate policies. Our Certificate of Incorporation (as amended, the "Certificate of Incorporation") and Amended and Restated Bylaws (as amended, the "Bylaws") provide that the Board will consist of such number of directors as may be determined from time to time by resolution of the majority of the whole Board. Proxies cannot be voted for a greater number of persons than the number of Company Nominees named in the proxy statement.

Each member of our Board is elected for a one-year term and is elected at each annual meeting of stockholders. If a quorum is present, the Company Nominees will be elected by a plurality of the voting power of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. Abstentions and broker non-votes have no effect on the vote. The five Company Nominees receiving the highest number of affirmative votes will be elected directors of the Company. Shares of common stock entitled to vote at the Annual Meeting represented by executed proxies will be voted, if authority to do so is not withheld, for the election of the five nominees named below. Should any Company Nominee become unable or unwilling to accept nomination or election, the proxy holders may vote the proxies for the election, in his or her stead, of any other person the Board may nominate or designate. Each Company Nominee has agreed to serve, if elected, and the Board has no reason to believe that any Company Nominee will be unable to serve.

**Nominee Biographies and Qualifications**

The following table sets forth the name, age and position of each director currently serving on the Board and each Company Nominee for election as a director as of the Record Date:

The biographies for the Company Nominees are as follows:

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| | | |
|:---|:---|:---|
| **Name** | **Age** | **Position with the Company** |
| Doron Besser, M.D. | 56 | Chief Executive Officer and Current Director; Company Nominee |
| David Johnson | 67 | Company Nominee; Proposed Chairman of the Board |
| Zeev Rotstein, M.D. | 74 | Current Director; Company Nominee |
| Nino Pionati | 68 | Company Nominee |
| Alison Geiger Burgett | 46 | Company Nominee |

---

The following sets forth biographical information and the qualifications and skills for each director:

***Doron Besser, M.D., Chief Executive Officer and Current Director; Company Nominee.*** Dr. Doron Besser is the Chief Executive Officer and President of ENvue Medical, bringing more than two decades of leadership experience in medical device innovation, strategic commercialization, and organizational growth. Prior to ENvue, Dr. Besser served as Chief Executive Officer of Angioslide Ltd., a company specializing in innovative, cost-effective angioplasty products. Under his leadership, Angioslide advanced from early-stage development through complicated animal and human trials, achieving FDA clearance, CE approval, and initial commercial penetration in both the European and U.S. markets. Dr. Besser also served as Vice President of Clinical and Marketing and Vice President of Business Development at superDimension, a leader in minimally invasive pulmonology devices. He was a member of the company's founding team and played a central role in identifying market opportunities, building clinical and commercial strategy, and positioning superDimension as a leader in navigational bronchoscopy. In 2012, Covidien acquired superDimension for approximately $300 million. Throughout his career, Dr. Besser has focused on identifying breakthrough technologies and developing them through every stage of product development - from concept and regulatory clearance to commercialization and scale. He has extensive experience working with cross-functional teams spanning R&D, clinical, regulatory, and commercial operations, as well as engaging with investors and strategic partners. Dr. Besser holds a Doctor of Medicine degree from Munich's Ludwig-Maximilians University. His extensive leadership experience in the healthcare industry, combined with a proven record of innovation, commercialization, and strategic execution, provides him the appropriate experience to serve on the Board.

 ****

***David Johnson, Company Nominee; Proposed Chairman of the Board***. David Johnson is a seasoned healthcare executive and board leader with more than 30 years of experience in the medical technology and biotechnology industries. Mr. Johnson most recently served as Non-Executive Chairman of Advanced Medical Balloons (AMB) from January 2022 to September 2025, where he guided the company through its acquisition by Stryker. Prior to that, Mr. Johnson served as Executive Chairman of the Board at Enveric Biosciences, Inc. (NASDAQ: ENVB), a biotechnology company focused on developing novel treatments to address the side effects of cancer therapies. Mr. Johnson also served as Chairman of the Board of Directors at HyperMed Imaging, Inc., a pioneer in hyperspectral tissue oximetry technology. Previously, Mr. Johnson was Chief Executive Officer and a member of the Board of Directors of Alliqua BioMedical, Inc. (NASDAQ: ALQA), where he oversaw the development and commercialization of advanced wound care technologies. He also served as a member of the Board of Directors and Chairman of the Compensation Committee at OMNI Orthopaedics, supporting the company's growth in robotic orthopaedic surgery, which led to its acquisition by Corin Orthopaedics. Earlier in his career, Mr. Johnson held several senior leadership positions at ConvaTec, including Chief Executive Officer and Member of the Board of Directors, where he oversaw global operations in 43 countries and more than 8,000 employees. Prior to that, he held various leadership roles at Bristol-Myers Squibb and Zimmer Inc. Mr. Johnson received an undergraduate business degree in marketing from the Northern Alberta Institute of Technology in Edmonton, Alberta, Canada. He completed the INSEAD Advanced Management Program in Fontainebleau, France, and is a Fellow of the Wharton School of the University of Pennsylvania. Mr. Johnson's extensive leadership experience in global medical technology companies, combined with his proven track record in strategic growth and successful exits, provides him the appropriate experience to serve on the Board.

***Zeev Rotstein, M.D., Current Director; Company Nominee***. Professor Zeev Rotstein is an internationally recognized cardiologist and expert in health management systems with more than four decades of experience spanning clinical leadership, hospital administration, and international health system advisory. Professor Rotstein spent 36 years at Sheba Medical Center in Tel Hashomer, Israel, one of the world's leading hospitals. He began his career as a senior cardiologist in 1977, served as Deputy Director from 1988 to 1999, and as Director of Sheba's Acute Care Hospital from 1999 to 2004. From 2004 to 2016, he served as Director General of Sheba Medical Center, during which time the hospital was consistently ranked among the top medical institutions worldwide. From 2016 to 2021, Professor Rotstein was the Chief Executive Officer and Director General of Hadassah Medical Center in Jerusalem, leading major operational, strategic, and financial restructuring efforts during a challenging period of organizational transformation. Over the course of his career, he has advised multiple public health bodies and contributed to national healthcare policy development in Israel. Professor Rotstein graduated from the Sackler School of Medicine at Tel Aviv University. He received his Master of Health Administration (MHA) from the Leon Recanti Graduate School of Business Administration at Tel Aviv University and is certified by the Israel Ministry of Health as a specialist in Health Systems Management. Additionally, he has held fellowships at the New York Department of Health, Tufts University, and the Johns Hopkins Bloomberg School of Public Health. Professor Rotstein's extensive leadership experience, global reputation, and deep understanding of complex healthcare systems provide him the appropriate experience to serve on the Board.

***Nino Pionati, Company Nominee.*** Mr. Pionati is a seasoned global healthcare and medical technology executive with more than three decades of leadership experience spanning strategy, commercialization, innovation, and international market expansion. From 2018 to 2021, Mr. Pionati served as Chief Commercial Officer at ACell, Inc., a regenerative medicine company acquired by Integra LifeSciences, where he led all commercial operations including sales, marketing, business development, and strategic planning. He also established ACell's international footprint, building partnerships and launching operations in multiple markets. From 2015 to 2018, Mr. Pionati served as Chief Strategy and Marketing Officer at Alliqua BioMedical, where he oversaw corporate strategy, marketing, R&D, and reimbursement, positioning the company for growth and successful acquisition. Before joining Alliqua, he held the position of Vice President of Marketing at Bayer HealthCare, where he directed commercial strategy for the company's permanent contraception franchise, including brand development, pricing, and life cycle management. From 1998 to 2012, Mr. Pionati held multiple leadership roles at ConvaTec, ultimately serving as President, Intercontinental and President, Continence and Critical Care, where he led 650 employees across five continents, delivered double-digit growth, and executed strategic acquisitions and integrations that expanded the company's international presence. Earlier in his career, Mr. Pionati spent 15 years at Johnson & Johnson in various marketing and commercial leadership positions. His leadership is defined by his ability to blend strategic vision with disciplined execution. He has led organizations through expansion, acquisition, and operational integration, developing and commercializing breakthrough products that have reshaped markets and improved patient outcomes. Mr. Pionati holds an MBA from the Katz School of Business and an undergraduate degree from Concordia University in Montreal, Canada. Mr. Pionati's extensive experience in global MedTech strategy and commercialization provides him the appropriate experience to serve on the Board.

 ****

***Alison Geiger Burgett; Company Nominee.*** Alison Geiger Burgett is a seasoned finance executive with more than two decades of leadership experience at publicly held companies, with a proven record of driving value creation, profitability, and strategic transformation. She currently serves as Chief Financial Officer of AgEagle Aerial Systems (NYSE: UAVS), a drone and sensor manufacturer, where she leads financial planning, budgeting, forecasting, and capital structure management. At AgEagle, Ms. Geiger Burgett secured $12 million in funding, streamlined financial operations, and implemented internal controls to strengthen financial reporting, compliance, and operational efficiency. Prior to AgEagle, Ms. Geiger Burgett spent five years at Centene Corporation (NYSE: CNC), a $143.7 billion managed care company, where she held multiple senior finance leadership roles, including Senior Director of Finance and Strategic Initiatives, Senior Director of Finance and Quality Improvement, and Director of Finance and Performance Management. In these roles, she oversaw strategic budgeting, value capture, ROI analysis, and large-scale quality improvement initiatives across multiple states and business units. She also managed a $470 million corporate quality budget and served as a financial liaison to 39 state partners. Earlier in her career, Ms. Geiger Burgett held finance leadership positions at Republic Services, Inc. (NYSE: RSG), where she led contract optimization initiatives that generated $30 million in increased revenue and savings. She also spent more than a decade at Providence Service Corporation (NASDAQ: PRSC), where she played a key role in multiple acquisitions and divestitures, standardizing consolidation processes and leading integration of global entities. Ms. Geiger Burgett holds a Master of Business Administration from Boise State University and a Bachelor of Science in Accounting from the University of Phoenix. Her extensive financial leadership experience, capital markets expertise, and operational discipline provide her the appropriate experience to serve on the Board.

**Required Vote and Board Recommendation**

If a quorum is present and voting, the five Company Nominees receiving the highest number of votes will be elected as directors. Proxies cannot be voted for a greater number of persons than the number of nominees named or for persons other than the named nominees. "WITHHOLD" votes and broker non-votes will have no effect on the results for this proposal. If your shares are held by a broker and you do not give the broker specific instructions on how to vote your shares, your broker may not vote your shares at its discretion.

**THE BOARD RECOMMENDS THAT YOU VOTE "FOR" EACH COMPANY NOMINEE AS SET FORTH IN THE DIRECTOR ELECTION PROPOSAL AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR OF EACH DIRECTOR NOMINEE UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY CARD.**

**CORPORATE GOVERNANCE**

NanoVibronix, Inc., with the oversight of the Board and its committees, operates within a comprehensive plan of corporate governance for the purpose of defining independence, assigning responsibilities, setting high standards of professional and personal conduct and assuring compliance with such responsibilities and standards. We regularly monitor developments in the area of corporate governance.

**Code of Business Conduct and Ethics**

We have adopted a code of business conduct and ethics that applies to all of our officers, directors and employees. The code of business conduct and ethics addresses, among other things, competition and fair dealing, conflicts of interest, financial matters and external reporting, our funds and assets, confidentiality and corporate opportunity requirements and the process for reporting violations of the code of business conduct and ethics, employee misconduct, improper conflicts of interest or other violations. A copy of the code of ethics was attached as Exhibit 14.1 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, and filed with the Securities and Exchange Commission on March 31, 2017. If we amend or grant a waiver of one or more of the provisions of our code of business conduct and ethics, we intend to satisfy the requirements under Item 5.05 of Form 8-K regarding the disclosure of amendments to, or waivers from, provisions of our code of business conduct and ethics that apply to our principal executive, financial and accounting officers by posting the required information on our website at www.nanovibronix.com within four business days following the date of such amendment or waiver.

**Board Composition**

Our Certificate of Incorporation and Bylaws provide that our Board will consist of such number of directors as determined from time to time by resolution adopted by our Board. The size of our Board is currently fixed at six directors. Subject to any rights applicable to any then outstanding preferred stock, any vacancies or newly created directorships resulting from an increase in the authorized number of directors may be filled by a majority of the directors then in office. Each member of our Board is elected for a one-year term and is elected at each annual meeting of stockholders.

We have no formal policy regarding Board diversity. Our Board believes that each director should have a basic understanding of our principal operational and financial objectives and plans and strategies, our results of operations and financial condition and relative standing in relation to our competitors. We take into consideration the overall composition and diversity of the Board and areas of expertise that director nominees may be able to offer, including business experience, knowledge, abilities and customer relationships. Generally, we will strive to assemble a Board that brings to us a variety of perspectives and skills derived from business and professional experience as we may deem are in our and our stockholders' best interests. In doing so, we will also consider candidates with appropriate non-business backgrounds.

**Director Independence and Committee Qualifications**

We are currently listed on the Nasdaq Capital Market and therefore rely on the definition of independence set forth in the Nasdaq Listing Rules ("Nasdaq Rules"). Under the Nasdaq Rules, a director only qualifies as an "independent director" if, in the opinion of that company's board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

In order to be considered to be independent for purposes of Rule 10A-3, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee: (1) accept, directly or indirectly, any consulting, advisory or other compensatory fee from the listed company or any of its subsidiaries or (2) be an affiliated person of the listed company or any of its subsidiaries.

Our Board undertook a review of its composition, the composition of its committees and the independence of each director. Based upon information requested from and provided by each director concerning his or her background, employment and affiliations, including family relationships, our Board has determined that Christopher Fashek, Martin Goldstein, M.D., Thomas Mika and Zeev Rotstein, or four of our six directors, do not have a relationship (other than being a director and/or a stockholder) that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is "independent" as that term is defined under the Nasdaq Rules.

In addition, based upon information requested from and provided by each of Nino Pionati and Alison Geiger Burgett concerning their respective background, employment and affiliations, including family relationships, our Board has determined that each of Nino Pionati and Alison Geiger Burgett , do not have a relationship (other than being a director and/or a stockholder) that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is "independent" as that term is defined under the Nasdaq Rules.

Our Board also determined that (i) Thomas Mika, Christopher Fashek and Zeev Rotstein, who compose our Audit Committee (the "Audit Committee"), (ii) Christopher Fashek, Thomas Mika and Zeev Rotstein, who compose our Compensation Committee (the "Compensation Committee"), and (iii) Martin Goldstein, Christopher Fashek and Zeev Rotstein, who compose our Nominating and Corporate Governance Committee (the "Nominating and Corporate Governance Committee"), each satisfy the independence standards for those committees established by the applicable rules and regulations of the SEC and the Nasdaq Rules. In making this determination, our Board considered the relationships that each non-employee director has with us and all other facts and circumstances our Board deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director. We intend to comply with all size and independence requirements for committees within the applicable time periods.

**Board Committees, Meetings and Attendance**

During the year ended December 31, 2024, the Board held six meetings. We expect our directors to attend Board meetings, meetings of any committees and subcommittees on which they serve and each annual meeting of stockholders, either in person or by teleconference. During the year ended December 31, 2024, each director attended at least 75% of the total number of meetings held by the Board and Board committees of which such director was a member. Last year's annual meeting was not attended by any directors.

Our Board currently has three standing committees which consist of the Audit Committee, the Nominating and Corporate Governance Committee and the Compensation Committee, each of which has the composition and responsibilities described below.

Each of these committees operates under a charter that has been approved by our Board. The current charter of each of these committees is available on our website at www.nanovibronix.com in the "Governance" section under "Investors." The reference to our website address does not constitute incorporation by reference of the information contained at or available through our website, and you should not consider it to be a part of this proxy statement.

***Audit Committee***. As of the date of this proxy statement, the Audit Committee is comprised of Thomas Mika (chair), Christopher Fashek and Zeev Rotstein, M.D., each of whom our Board has determined to be financially literate and qualify as an independent director under Sections 5605(a)(2) and 5605(c)(2) of the Nasdaq Rules and Rule 10A-3(b)(1) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). In addition, Mr. Mika qualifies as an "audit committee financial expert," as defined in Item 407(d)(5)(ii) of Regulation S-K. Our Board also determined that each member of our Audit Committee can read and understand fundamental financial statements in accordance with applicable requirements. In arriving at these determinations, the Board examined each Audit Committee member's scope of experience and the nature of their employment in the corporate finance sector.

The function of the Audit Committee is to assist the Board in its oversight of (1) the integrity of our financial statements, (2) our compliance with legal and regulatory requirements, (3) the qualifications, independence and performance of our independent auditors and (4) audit and non-audit fees and services.

The Audit Committee met four times during the year ended December 31, 2024.

Prior to each of Michael Ferguson and Maria Schroeder's resignation from the Board and all committees thereto on February 14, 2025, each of Mr. Ferguson and Ms. Schroeder were financially literate and qualified as independent directors under Sections 5605(a)(2) and 5605(c)(2) of the Nasdaq Rules and Rule 10A-3(b)(1) of the Exchange Act.

Following the Annual Meeting, the Audit Committee is expected to be comprised of Alison Geiger Burgett (Chairperson), David Johnson and Nino Pionati.

 ****

***Nominating and Corporate Governance Committee***. As of the date of this proxy statement, the Nominating and Corporate Governance Committee is comprised of Martin Goldstein (chair), Christopher Fashek, and Zeev Rotstein, each of whom our Board has determined qualifies as an independent director under Section 5605(a)(2) of the Nasdaq Rules.

The primary function of the Nominating and Corporate Governance Committee is to identify individuals qualified to become board members, consistent with criteria approved by the Board, and select the director nominees for election at each annual meeting of stockholders as well as reviewing the Company's corporate governance policies and any related matters.

The Nominating and Corporate Governance Committee met once during the year ended December 31, 2024.

Prior to Ms. Schroeder's resignation from the Board and all committees thereto on February 14, 2025, Ms. Schroeder qualified as an independent director under Section 5604(a)(2) of the Nasdaq Rules.

Following the Annual Meeting, the Nominating and Corporate Governance Committee is expected to be comprised of Zeev Rotstein, M.D. (Chairperson), Alison Geiger Burgett and David Johnson.

***Compensation Committee***. As of the date of this proxy statement, the Compensation Committee is comprised of Thomas Mika, Zeev Rotstein and Christopher Fashek, each of whom our Board has determined qualifies as an independent director under Sections 5605(a)(2) and 5605(d)(2) of the Nasdaq Rules, as an "outside director" for purposes of Section 162(m) of the Internal Revenue Code and as a "non-employee director" for purposes of Section 16b-3 under the Exchange Act. The function of the compensation committee will be to discharge the Board's responsibilities relating to compensation of our directors and executives and our overall compensation programs.

The primary objective of the Compensation Committee will be to develop and implement compensation policies and plans that are appropriate for us in light of all relevant circumstances and which provide incentives that further our long-term strategic plan and are consistent with our culture and the overall goal of enhancing enduring stockholder value.

The Compensation Committee met four times during the year ended December 31, 2024.

Prior to Mr. Ferguson and Ms. Cassirer's resignation from the Board and all committees thereto, each of Mr. Ferguson and Ms. Cassirer qualified as an independent director under Sections 5605(a)(2) and 5605(d)(2) of the Nasdaq Rules, as an "outside director" for purposes of Section 162(m) of the Internal Revenue Code and as a "non-employee director" for purposes of Section 16b-3 under the Exchange Act.

Following the Annual Meeting, the Compensation Committee is expected to be comprised of Nino Pionati (Chairperson), Zeev Rotstein, and David Johnson.

**Board Leadership Structure**

The Board is committed to promoting our effective, independent governance. Our Board believes it is in our best interests and the best interests of our stockholders for the Board to have the flexibility to select the best director to serve as chairman at any given time, regardless of whether that director is an independent director or the chief executive officer. Consequently, we do not have a policy governing whether the roles of chairman of the Board and chief executive officer should be separate or combined. This decision is made by our Board, based on our best interests considering the circumstances at the time.

Currently, the offices of the chairman of the Board and the chief executive officer are held by two different people. Christopher Fashek is our independent, non-executive chairman of the Board, and Doron Besser, M.D., is our Chief Executive Officer. The Chief Executive Officer will be responsible for our day-to-day leadership and performance, while the chairman of the Board will provide guidance to the Chief Executive Officer and set the agenda for board meetings and preside over meetings of the Board. We believe that separation of the positions will reinforce the independence of the Board in its oversight of our business and affairs, and create an environment that is more conducive to objective evaluation and oversight of management's performance, increasing management accountability and improving the ability of the Board to monitor whether management's actions are in our best interests and those of our stockholders.

**Role in Risk Oversight**

Our Board oversees an enterprise-wide approach to risk management, designed to support the achievement of business objectives, including organizational and strategic objectives, to improve long-term organizational performance and enhance stockholder value. The involvement of our Board in setting our business strategy is a key part of its assessment of management's plans for risk management and its determination of what constitutes an appropriate level of risk for the company. The participation of our Board in our risk oversight process includes receiving regular reports from members of senior management on areas of material risk to our company, including operational, financial, legal and regulatory, and strategic and reputational risks, including cybersecurity.

The Board continually reviews the Company's controls and procedures that involve cybersecurity matters to determine the potential material impact to our financial results, operations, and/or reputation to insure such incidents are immediately reported by management to the Board, or individual members or committees thereof, as appropriate, in accordance with our escalation framework.

While our Board has the ultimate responsibility for the risk management process, senior management and various committees of our Board will also have responsibility for certain areas of risk management.

Our senior management team is responsible for day-to-day risk management and regularly reports on risks to our full Board or a relevant committee. Our finance and regulatory personnel serve as the primary monitoring and evaluation function for company-wide policies and procedures, and manage the day-to-day oversight of the risk management strategy for our ongoing business. This oversight includes identifying, evaluating, and addressing potential risks that may exist at the enterprise, strategic, financial, operational, compliance and reporting levels.

The Audit Committee will focus on monitoring and discussing our major financial risk exposures and the steps management has taken to monitor and control such exposures, including our risk assessment and risk management policies. As appropriate, the Audit Committee will provide reports to and receive direction from the full Board regarding our risk management policies and guidelines, as well as the Audit Committee's risk oversight activities.

In addition, the compensation committee will assess our compensation policies to confirm that the compensation policies and practices do not encourage unnecessary risk taking. The compensation committee will review and discuss the relationship between risk management policies and practices, corporate strategy and senior executive compensation and, when appropriate, report on the findings from the discussions to our Board. Our compensation committee intends to set performance metrics that will create incentives for our senior executives that encourage an appropriate level of risk-taking that is commensurate with our short-term and long-term strategies.

**Family Relationships**

There are no family relationships among our directors and executive officers, or person nominated or chosen by the Company to become a director or executive officer.

**Involvement in Certain Legal Proceedings**

None of our directors or executive officers, or person nominated to become a director, has been involved in any of the following events during the past ten years:

● any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

● any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offences);

● being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his or her involvement in any type of business, securities or banking activities; or

● being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

**Insider Trading Policy and Anti-Hedging Policy**

We maintain an insider trading policy that applies to our officers and directors that prohibits trading our securities during certain established periods and when in possession of material non-public information. It also prohibits, unless approved in advance in limited circumstances by the policy administrator, the hedging of our securities, including short sales or purchases or sales of derivative securities based on our securities, and the use of our securities to secure a margin or other loan. Since the adoption of our insider trading policy, the policy administrator has not granted any such exemptions to the policy's general prohibition on hedging or pledging. While the Company is not subject to the insider trading policy, the company does not trade in its securities when it is in possession of material nonpublic information other than pursuant to previously adopted Rule 10b5-1 trading plans.

**Section 16(a) Beneficial Ownership Reporting Compliance**

Section 16(a) of the Exchange Act requires that each of our directors and executive officers, and any other person who owns more than ten percent (10%) of our common stock, file with the SEC initial reports of ownership and reports of changes in ownership of our common stock. To our knowledge, based solely on information furnished to us and written representations by such persons that no such other reports were required to be filed, we believe that all such SEC filing requirements were met in a timely manner during the year ended December 31, 2024, other than with respect to the following:

On February 26, 2024, a Form 4 for each of Aurora Cassirer, Martin Goldstein, Michael Ferguson, Thomas Mika, Harold Jacob and Maria Schroeder was filed late due to an administrative error, to report the grant of stock options granted under the 2024 Plan, which such stock options were granted on January 23, 2024.

**Communications with Directors**

The Board welcomes communication from our stockholders. Stockholders and other interested parties who wish to communicate with a member or members of our Board or a committee thereof may do so by addressing correspondence to the Board member, members or committee, c/o NanoVibronix, Inc., 969 Pruitt Place, Tyler TX 75703, Attn: Doron Besser, M.D., Chief Executive Officer. Our Chief Executive Officer will review and forward correspondence to the appropriate person or persons.

All communications received as set forth in the preceding paragraph will be opened by the Chief Executive Officer for the sole purpose of determining whether the contents represent a message to our directors. Any contents that are not in the nature of advertising, promotions of a product or service or patently offensive material will be forwarded promptly to the addressee(s). In the case of communications to the Board or any group or committee of directors, the Chief Executive Officer will make sufficient copies of the contents to send to each director who is a member of the group or committee to whom the communication is addressed. If the amount of correspondence received through the foregoing process becomes excessive, our Board may consider approving a process for review, organization and screening of the correspondence by the corporate secretary or another appropriate person.

**Director Nominations**

Our nominating and corporate governance committee considers all qualified candidates identified by members of the Board, by senior management and by stockholders. The nominating and corporate governance committee follows the same process and uses the same criteria for evaluating candidates proposed by stockholders, members of the Board and members of senior management. We did not pay fees to any third party to assist in the process of identifying or evaluating director candidates during the year ended December 31, 2024.

Our Bylaws contain provisions that address the process by which a stockholder may nominate an individual to stand for election to the Board at our Annual Meeting. To recommend a nominee for election to the Board, a stockholder must submit his or her recommendation to the Secretary at our corporate offices at 969 Pruitt Place, Tyler TX 75703. Such nomination must satisfy the notice, information and consent requirements set forth in our Bylaws and must be received by us prior to the date set forth under "Stockholder Proposals" below. A stockholder's recommendation must be accompanied by the information with respect to stockholder nominees as specified in our Bylaws, including among other things, the name, age, address and occupation of the recommended person, the proposing stockholder's name and address, the ownership interests of the proposing stockholder and any beneficial owner on whose behalf the nomination is being made (including the number of shares beneficially owned, any hedging, derivative, short or other economic interests and any rights to vote any shares) and any material monetary or other relationships between the recommended person and the proposing stockholder and/or the beneficial owners, if any, on whose behalf the nomination is being made.

In evaluating director nominees, the Nominating and Corporate Governance Committee considers the following factors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● the appropriate size and diversity of our Board;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● our needs with respect to the particular knowledge, skills and experience of nominees, including experience in corporate finance, technology, business, administration and sales, in light of the prevailing business conditions and the knowledge, skills and experience already possessed by other members of the Board;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● experience with accounting rules and practices, and whether such a person qualifies as an "audit committee financial expert" pursuant to SEC rules; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● balancing continuity of our Board with periodic injection of fresh perspectives provided by new Board members.

Our Board believes that each director should have a basic understanding of our principal operational and financial objectives and plans and strategies, our results of operations and financial condition and our relative standing in relation to our competitors.

In identifying director nominees, the Board will first evaluate the current members of the Board willing to continue in service. Current members of the Board with skills and experience that are relevant to our business and who are willing to continue in service will be considered for re-nomination.

If any member of the Board does not wish to continue in service or if the Board decides not to re-nominate a member for re-election, the Board will identify another nominee with the desired skills and experience described above. The Board takes into consideration the overall composition and diversity of the Board and areas of expertise that director nominees may be able to offer, including business experience, knowledge, abilities and customer relationships. Generally, the Board will strive to assemble a Board that brings to us a variety of perspectives and skills derived from business and professional experience as it may deem are in our and our stockholders' best interests. In doing so, the Board will also consider candidates with appropriate non-business backgrounds.

**DIRECTOR COMPENSATION**

The following table shows the compensation earned by persons who served on our Board during the fiscal year ended December 31, 2024, who was not one of our Named Executive Officers (as defined herein). Other than as set forth in the table and described more fully below, we did not pay any compensation, reimburse any expense of, make any equity awards or non-equity awards to, or pay any other compensation to any of the other members of our Board for their services rendered in such period. Amounts, as applicable, have been adjusted to reflect the 1-for-11 reverse stock split and 1-for-10 reverse stock split effectuated by the Company in March 2025 and August 2025, respectively (the "March 2025 Reverse Stock Split" and the "August 2025 Reverse Stock Split" and together, the "Reverse Stock Splits").

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| | | | |
|:---|:---|:---|:---|
| **Name** | **Fees earned or**<br> **paid in cash ($)** | **Option Awards**<br> **($)<sup>(1)</sup>** | **Total ($)** |
| Christopher Fashek<sup>(2)</sup> | 158750 | 26428 | 185178 |
| Thomas Mika<sup>(3)</sup> | 20000 | 23712 | 43712 |
| Michael Ferguson<sup>(4)</sup> | 20000 | 23712 | 43712 |
| Martin Goldstein<sup>(5)</sup> | 10000 | 25299 | 35299 |
| Harold Jacob, M. D.<sup>(6)</sup> | 10000 | 10543 | 20543 |
| Aurora Cassirer<sup>(7)</sup> | 20000 | 23712 | 43712 |
| Maria Schroeder<sup>(8)</sup> | 10000 | 23712 | 33712 |

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<sup>(1)</sup> In accordance with SEC rules, the amounts in this column reflect the dollar amounts to be recognized for financial statement reporting purposes with respect to the 2024 fiscal year in accordance with ASC Topic 718. Fair value is based on the Black-Scholes option pricing model using the market price of the underlying shares at the grant date. For additional discussion of the valuation assumptions used in determining stock-based compensation and the grant date fair value for stock options, see "*Management's Discussion and Analysis of Financial Condition and Results of Operation - Critical Accounting Policies - Stock-based compensation*" and Note 3- "*Significant Accounting Policies*" and Note 6- "*Stockholders' Equity*" to our audited consolidated financial statements for the fiscal year ended December 31, 2024, included in our Annual Report on Form 10-K for the year ended December 31, 2024.

<sup>(2)</sup> As of December 31, 2024, Mr. Fashek had outstanding options representing the right to purchase 616 shares of our common stock and no outstanding stock awards of shares of common stock.

<sup>(3)</sup> As of December 31, 2024, Mr. Mika had outstanding options representing the right to purchase 364 shares of our common stock and no outstanding stock awards of shares of common stock.

<sup>(4)</sup> As of December 31, 2024, Mr. Ferguson had outstanding options representing the right to purchase 364 shares of our common stock and no outstanding stock awards of shares of common stock.

<sup>(5)</sup> As of December 31, 2024, Mr. Goldstein had outstanding options representing the right to purchase 391 shares of our common stock and no outstanding stock awards of shares of common stock.

<sup>(6)</sup> As of December 31, 2024, Dr. Jacob had outstanding options representing the right to purchase 182 shares of our common stock and no outstanding stock awards of shares of common stock.

<sup>(7)</sup> As of December 31, 2024, Ms. Cassirer had outstanding options representing the right to purchase 364 shares of our common stock and no outstanding stock awards of shares of common stock.

<sup>(8)</sup> As of December 31, 2024, Ms. Schroeder had outstanding options representing the right to purchase 364 shares of our common stock and no outstanding stock awards of shares of common stock.

On October 13, 2016, we entered into an agreement with Christopher Fashek to serve as the chairman of our Board. Under this agreement Mr. Fashek was paid $100,000 per year payable in semi-monthly installments. On November 1, 2018, the Compensation committee voted to increase Mr. Fashek's consulting fee to $150,000 per year.

On November 29, 2023, we entered into an option cancellation and release agreement with each of Brian Murphy, Christopher Fashek, Martin Goldstein, Michael Ferguson, Stephen Brown, Aurora Cassirer, Dr. Harold Jacob, Maria Schroeder and Thomas Mika (collectively, the "Option Holders"), pursuant to which the parties agreed to cancel options to purchase an aggregate of 928 shares of common stock at exercise prices ranging from $983.40 to $5654.00 (the "Options") previously granted to each of the Option Holders. In exchange for the cancellation of the Options, we paid $1.00 to each Option Holder.

No other compensation was paid to our non-employee directors other than as noted in the table above for the one-year period ended December 31, 2024.

**CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE**

**Related Parties Transactions Approval Policy**

Generally, we do not enter into related party transactions unless the members of the Board who do not have an interest in the potential transaction have reviewed the transaction and determined that (i) we would not be able to obtain better terms by engaging in a transaction with a non-related party and (ii) the transaction is in our best interest. In approving or rejecting any such proposal, our Board considers all of the relevant facts and circumstances of the related party transaction and the related party's relationship and interest in the transaction. This policy applies generally to any transaction in which we are to be a participant and the amount involved exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end for the previous two completed fiscal years, and in which any related person had or will have a direct or indirect material interest. This policy is not currently in writing.

The Audit Committee is charged with reviewing, approving and overseeing any transaction between us and any related person (as defined in Item 404 of Regulation S-K) and any other potential conflict of interest situations in accordance with Company policies and procedures. All of the transactions described below were entered into prior to the establishment of our Audit Committee and were evaluated in accordance with the policy described in the paragraph above. Prior to approving such transactions, the material facts as to a director's or officer's relationship or interest as to the agreement or transaction were disclosed to our Board. Our Board took this information into account when evaluating the transaction and in determining whether such transaction was fair to us and in the best interest of all of our stockholders.

**Transactions with Related Parties**

In March 2022, we engaged the law firm FisherBroyles LLP to handle our litigation matter with Protrade Systems, Inc. For the year ended December 31, 2023, we accrued and paid legal fees of FisherBroyles LLP equal to $360,000, which fees were recorded as part of "General and administrative expenses" in our condensed consolidated statements of operations. As has been previously disclosed, one of our former board members, Aurora Cassirer, was a partner at FisherBroyles LLP. Prior to her resignation from the Board, Ms. Cassirer did not provide any legal services or legal advice to the Company**.**

On January 1, 2024, Ms. Cassirer left FisherBroyles to become a partner at Pierson Ferdinand. Pierson Ferdinand was paid $69,000 during the year ended December 31, 2024. Prior to her resignation from the Board, Ms. Cassirer did not provide any legal services or legal advice to the Company.

On November 29, 2023, we entered into an option cancellation and release agreement with each of Brian Murphy, Christopher Fashek, Martin Goldstein, Michael Ferguson, Stephen Brown, Aurora Cassirer, Harold Jacob, M.D., Maria Schroeder and Thomas Mika, our directors and officers, pursuant to which the parties agreed to cancel the Options previously granted to each of the option holders. In exchange for the cancellation of the Options, we paid $1.00 to each option holder. See "*Director Compensation*." Mr. Ferguson, Dr. Jacob and Ms. Schroeder resigned from the Board in February 2025, and Ms. Cassirer resigned from the Board in April 2025.

Other than compensation agreements and other arrangements which are described as required under "Director Compensation" and "Executive Compensation" and the transactions described above, since January 1, 2023, there has not been, and there is not currently proposed, any transaction or series of similar transactions to which we were or will be a party in which the amount involved exceeded or will exceed the lesser of $120,000 or the average of our total assets at year-end for the last two completed fiscal years and in which any director, executive officer, holder of 5% or more of any class of our capital stock, or any member of their immediate family had or will have a direct or indirect material interest.

**EXECUTIVE COMPENSATION**

The following table sets forth the names and positions of: (i) each person who served as our principal executive officer during the year ended December 31, 2024, (ii) the two most highly compensated executive officers, other than our principal executive officer, who were serving as executive officers, as determined in accordance with the rules and regulations promulgated by the SEC, as of December 31, 2024, and (iii) up to two additional individuals for whom disclosure would have been provided pursuant to clause (ii) but for the fact that the person was not serving as our executive officer at December 31, 2024 (collectively our "Named Executive Officers"):

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| | |
|:---|:---|
| **Name** | **Position** |
| Brian Murphy | Chief Executive Officer |
| Stephen Brown | Chief Financial Officer |

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**Summary Compensation Table**

The following table sets forth all compensation earned, in all capacities, during the fiscal years ended December 31, 2024, and 2023 by our Named Executive Officers.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Name and Principal**<br> **Position** | **Year** | **Salary <br> ($)** | **Bonus<br> ($)(1)** | **Option Awards<br> ($)(2)** | **All Other Compensation<br> ($)** | **Total<br> ($)(2)** |
| Brian Murphy | 2024 | 308750 | 73000 | 42285 |  | 424035 |
|  | 2023 | 300000 | 82500 | 159631 |  | 541861 |
| Stephen Brown | 2024 | 257292 | 22500 | 26428 |  | 306220 |
|  | 2023 | 250000 | 42500 | 69167 |  | 361667 |

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(1) Represents
 incentive compensation payments earned.

(2) In
 accordance with SEC rules, the amounts in this column reflect the dollar amounts to be recognized for financial statement reporting
 purposes with respect to the twelve-month period ended December 31, 2024, in accordance with ASC Topic 718. Fair value is
 based on the Black-Scholes option pricing model using the market price of the underlying shares at the grant date. For additional
 discussion of the valuation assumptions used in determining stock-based compensation and the grant date fair value for stock options,
 see "*Management's Discussion and Analysis of Financial Condition and Results of Operation - Critical Accounting Policies - Stock-based compensation*" and Note 3- "*Significant Accounting Policies*" and Note 7- "*Stockholders' Equity (Deficiency)" to our audited consolidated financial statements for the fiscal year ended December 31, 2024*,
 included herein.

**Narrative Disclosure to Summary Compensation Table**

***Employment Agreements***

We entered into agreements with each of our Named Executive Officers. A description of each of these agreements follows.

***Brian Murphy, former Chief Executive Officer and Director***

*2022 Murphy Employment Agreement*

On January 1, 2022, we entered into an employment agreement with Mr. Murphy (the "2022 Murphy Employment Agreement"), with an annual base salary of $300,000 less applicable payroll deductions and tax withholdings for all services rendered by him under the 2022 Murphy Employment Agreement and a target bonus in an amount of up to $100,000, less applicable payroll deductions and tax withholdings, based on the extent to which Mr. Murphy has met performance criteria for the year, as determined in good faith by the Board.

In addition, pursuant to the 2022 Murphy Employment Agreement, Mr. Murphy is eligible to receive certain stock options, restricted stock, stock appreciation rights or similar stock-based rights granted to Mr. Murphy as set forth separately in applicable award agreements.

The 2022 Murphy Employment Agreement had a term of two years and also contained certain noncompetition, non-solicitation, non-disparagement, confidentiality and assignment of work product requirements for Mr. Murphy. Prior to the 2022 Murphy Employment Agreement, we previously entered into an employment agreement with Mr. Murphy, effective as of October 13, 2016, and which expired on October 13, 2019, after which Mr. Murphy became an employee at will until the 2022 Murphy Employment Agreement.

*2024 Murphy Employment Agreement*

On September 20, 2024, we entered into a new employment with Mr. Murphy (the "2024 Murphy Employment Agreement"), pursuant to which the parties agreed to have Mr. Murphy continue to serve as our Chief Executive Officer, effective September 20, 2024, through August 31, 2025, unless earlier terminated by either party pursuant to the 2024 Murphy Employment Agreement. The 2022 Murphy Employment Agreement terminated upon effectiveness of the 2024 Murphy Agreement.

As consideration for his services as Chief Executive Officer, Mr. Murphy will be entitled to receive (i) an annual base salary of $321,000, less applicable payroll deductions and tax withholdings; (ii) reimbursement of any reasonable and customary, documented out-of-pocket expenses actually incurred by Mr. Murphy in connection with the performance of his services under the 2024 Murphy Employment Agreement; and (iii) an annual bonus of up to $100,000, less applicable payroll deductions and tax withholdings, based on the extent to which Mr. Murphy met performance criteria for the calendar year, as determined by us in good faith. Mr. Murphy may also be eligible to receive certain grants of incentive stock options to purchase shares of common stock.

Either party may terminate the 2024 Murphy Employment Agreement at any time upon ninety (90) days written notice. Upon termination of Mr. Murphy's employment, we shall pay Mr. Murphy (i) any unpaid salary accrued through the date of termination, (ii) any accrued and unpaid vacation or similar pay to which Mr. Murphy is entitled as a matter of law or Company policy, and (iii) any unreimbursed expenses properly incurred prior to the date of termination (the "Murphy Accrued Obligations").

In the event we terminate Mr. Murphy's employment for cause, we shall have no further liability or obligation to Mr. Murphy under the 2024 Murphy Employment Agreement or in connection with Mr. Murphy's employment, except for the Murphy Accrued Obligations.

The 2024 Murphy Employment Agreement also contains certain standard non-competition, non-solicitation, confidentiality, and assignment of inventions requirements for Mr. Murphy.

For the years ended December 31, 2024, and December 31, 2023, the compensation committee approved performance bonuses of $73,000 and $82,500, respectively.

On June 4, 2025, the Board appointed Doron Besser, M.D., a director of the Board and Chief Executive Officer and President of the Company's wholly-owned subsidiary, ENvue Medical Holdings LLC, as the Company's CEO, effective as of the same date. In connection with such appointment, Brian Murphy resigned from the Company as its CEO, effective as of the same date. Mr. Murphy remains a director of the Board.

***Stephen Brown, Chief Financial Officer***

*2022 Brown Employment Agreement*

On January 1, 2022, we entered into a new employment agreement with Mr. Brown (the "2022 Brown Employment Agreement"), with an annual base salary of $250,000 less applicable payroll deductions and tax withholdings for all services rendered by him under the employment agreement and a target bonus in an amount of up to $50,000, less applicable payroll deductions and tax withholdings, based on the extent to which Mr. Brown has met performance criteria for the year, as determined in good faith by the Board.

The 2022 Brown Employment Agreement had an initial term of two years and thereafter automatically renewed on an annual basis unless written notification is provided by Mr. Brown or the Company of the desire to not renew for the subsequent year. The 2022 Brown Employment Agreement also contained certain noncompetition, non-solicitation, non-disparagement, confidentiality and assignment of work product requirements for Mr. Brown. Prior to the 2022 Brown Employment Agreement, we previously entered into an employment agreement with Mr. Brown on October 5, 2020.

*2024 Brown Employment Agreement*

On September 20, 2024, the Company entered into a new employment agreement with Mr. Brown (the "2024 Brown Employment Agreement"), pursuant to which the parties agreed to have Mr. Brown continue to serve as Chief Financial Officer of the Company, effective September 20, 2024, through August 31, 2025, unless earlier terminated by either party pursuant to the 2024 Brown Agreement. The 2022 Brown Employment Agreement terminated upon effectiveness of the 2024 Brown Employment Agreement.

As consideration for his services as Chief Financial Officer, Mr. Brown will be entitled to receive (i) an annual base salary of $267,500, less applicable payroll deductions and tax withholdings; (ii) reimbursement of any reasonable and customary, documented out-of-pocket expenses actually incurred by Mr. Brown in connection with the performance of his services under the 2024 Brown Employment Agreement; and (iii) an annual bonus of up to $50,000, less applicable payroll deductions and tax withholdings, based on the extent to which Mr. Brown has met performance criteria for the calendar year, as determined by us in good faith. Mr. Brown may also be eligible to receive certain grants of incentive stock options to purchase shares of common stock.

Either party may terminate the 2024 Brown Agreement at any time upon ninety (90) days written notice. Upon termination of Mr. Brown's employment, we shall pay Mr. Brown (i) any unpaid salary accrued through the date of termination, (ii) any accrued and unpaid vacation or similar pay to which Mr. Brown is entitled as a matter of law or Company policy, and (iii) any unreimbursed expenses properly incurred prior to the date of termination (the "Brown Accrued Obligations").

In the event we terminate Mr. Brown's employment for cause, we shall have no further liability or obligation to Mr. Brown under the 2024 Brown Employment Agreement or in connection with Mr. Brown's employment, except for the Brown Accrued Obligations.

The 2024 Brown Agreement also contains certain standard non-competition, non-solicitation, confidentiality, and assignment of inventions requirements for Mr. Brown.

*2025 Amended and Restated Brown Employment Agreement*

On August 11, 2025 (the "Brown Effective Date"), the Company entered into an amended and restated employment agreement (the "A&R Brown Employment Agreement") with Mr. Brown, which such agreement amends, restates and the employment agreements dated September 20, 2024, January 1, 2022, and October 5, 2020. Pursuant to the terms of the A&R Brown Employment Agreement, the Company shall pay Mr. Brown an annual salary of $300,000, less any applicable payroll deductions and tax withholdings (the "Brown Base Salary"). The A&R Brown Employment Agreement shall be at-will and will remain in effect unless terminated by either party in accordance with the terms of the A&R Brown Employment Agreement.

Either the Company or Mr. Brown may terminate Mr. Brown's employment with the Company at any time upon 30 days written notice to the other party, subject to the terms of the A&R Brown Employment Agreement. In the event of such termination, the Company shall pay Mr. Brown the Brown Base Salary through the date of termination and other customary accrued and reimbursable expenses. Additionally, in the event the Company terminates Mr. Brown's employment for Cause (as defined in the A&R Brown Employment Agreement) or the Mr. Brown voluntarily resigns for any reason on or before the six-month anniversary of the Brown Effective Date, the Company shall have no further liability or obligation Mr. Brown under the A&R Brown Employment Agreement other than any customary accrued and reimbursable expenses. In the event Mr. Brown's employment is terminated by (x) the Company without Cause following the Brown Effective Date or (y) Mr. Brown due to a resignation for any reason following the six-month anniversary of the Brown Effective Date, subject to certain terms and conditions of the A&R Brown Employment Agreement, the Company shall pay Mr. Brown severance pay in a total amount equal to $180,000.

Additionally, pursuant to the A&R Brown Employment Agreement, Mr. Brown may not own over an aggregate of 2% of the outstanding stock of any class of any corporation engaged in a business that directly competes with the business of the Company if such stock is listed on a national securities exchange in the United States.

The A&R Brown Employment Agreement also provides for certain customary covenants regarding non-solicitation, non-competition and confidentiality.

For the years ended December 31, 2024, and 2023, the compensation committee approved performance bonuses of $22,500 and $42,500, respectively.

On November 15, 2023, Mr. Brown was granted options to purchase 1,273 shares of common stock at an exercise price of $13.64 per share, which were fully vested on the grant date.

***Retirement, Health, Welfare and Additional Benefits***

All of our Named Executive Officers are eligible to participate in our employee benefit plans and programs, including medical benefits, to the same extent as our other full-time employees, subject to the terms and eligibility requirements of those plans.

**NanoVibronix , Inc. 2014 Long-Term Incentive Plan**

On February 28, 2014, our stockholders approved the NanoVibronix, Inc. 2014 Long-Term Incentive Plan (the "2014 Plan"), which was adopted by our Board on February 19, 2014.

Under the 2014 Plan, we originally reserved a total of five million (5,000,000) shares of our common stock for issuance pursuant to awards to key employees, key contractors, and non-employee directors, of which, the maximum number of shares of common stock covering awards of stock options or stock appreciation rights that could be granted to certain of our executive officers during any calendar year was one million (1,000,000) shares. On May 7, 2014, we effected a one-for-seven reverse stock split of our common stock. Consequently, the number of shares of our common stock reserved for issuance pursuant to awards under the 2014 Plan was reduced to seven hundred fourteen thousand two hundred eighty-six (714,286) shares, and the maximum number of shares of our common stock covered by awards of stock options or stock appreciation rights that could be granted to certain of our executive officers during any calendar year was reduced to one hundred forty-two thousand eight hundred fifty-seven (142,857) shares.

On June 13, 2018, the stockholders approved an amendment to the 2014 Plan to increase the number of shares of our common stock reserved for issuance pursuant to awards under the 2014 Plan by an additional seven hundred and fifty thousand (750,000) shares of our common stock to one million four hundred sixty-four thousand two hundred eighty-six (1,464,286) shares.

On June 13, 2019, the stockholders approved a second amendment to the 2014 Plan to increase (i) the number of shares of our common stock available for issuance pursuant to awards under the 2014 Plan by four hundred thousand (400,000) shares of our common stock, to a total of one million eight hundred and sixty-four thousand two hundred eighty-six (1,864,286) shares of our common stock and (ii) the maximum number of shares of our common stock covering awards of stock options or stock appreciation rights that could be granted to certain of our executive officers during any calendar year was increased to three hundred fifty-four thousand two hundred fourteen (354,214) shares.

On December 29, 2021, the stockholders approved a third amendment to the 2014 Plan that (i) intended to increase the number of shares of our common stock available for issuance pursuant to awards under the 2014 Plan by one million five hundred thousand (1,500,000) shares of our common stock to a total of three million three hundred sixty-four thousand two-hundred eighty-six (3,364,286) shares of our common stock, but a scrivener's error in this amendment only increased the number of shares of our common stock available for issuance pursuant to awards under the 2014 Plan to a total of three million three hundred forty-six thousand two-hundred eighty-six (3,346,286) shares of our common stock, and (ii) increased the maximum number of shares of our common stock covering awards of stock options or stock appreciation rights that could be granted to certain of our executive officers during any calendar year to six hundred sixty-nine thousand two-hundred fifty-seven (669,257) shares of our common stock.

On December 15, 2022, the stockholders approved a fourth amendment to the 2014 Plan to increase (i) the number of shares of our common stock available for issuance pursuant to awards under the 2014 Plan by one million five hundred and eighteen thousand (1,518,000) shares of our common stock, to a total of four million eight hundred and sixty-four thousand two hundred eighty-six (4,864,286) shares of our common stock. On February 9, 2023, we effected a one-for-twenty reverse stock split of our common stock. Consequently, the number of shares of our common stock reserved for issuance pursuant to awards under the 2014 Plan was reduced to two hundred forty-three thousand two hundred fourteen (243,214) shares. In March 2025, we effected a one-for-eleven reverse stock split of our common stock. Consequently, the number of shares of our common stock reserved for issuance pursuant to awards under the 2014 Plan was reduced to twenty-two thousand one hundred ten (22,110) shares. In August 2025, we effected a one-for-ten reverse stock split of our common stock. Consequently, the number of shares of our common stock reserved for issuance pursuant to awards under the 2014 Plan was reduced to two thousand two hundred eleven (2,211) shares.

On February 19, 2024, the 2014 Plan expired in accordance with its terms. Any awards granted on or before such date will continue to be effective in accordance with their terms and conditions.

**Description of the 2014 Plan**

*Purpose.* The purpose of the 2014 Plan was to enable us to remain competitive and innovative in our ability to attract and retain the services of key employees, key contractors, and non-employee directors. The 2014 Plan provided for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, dividend equivalent rights, and other awards, which may be granted singly, in combination, or in tandem, and which may be paid in cash or shares of our common stock. The 2014 Plan provided flexibility to our compensation methods in order to adapt the compensation of key employees, key contractors, and non-employee directors to a changing business environment, after giving due consideration to competitive conditions and the impact of applicable tax laws.

*Effective Date and Expiration.* The 2014 Plan was originally approved by our Board on February 19, 2014, and became effective upon stockholder approval on February 28, 2014. The 2014 Plan terminated on February 19, 2024. No award may be made under the 2014 Plan after its termination date, but awards made prior to the termination date may extend beyond that date.

*Share Authorization.* Subject to certain adjustments, the number of shares of our common stock that were reserved for issuance pursuant to awards under the 2014 Plan was one million eight hundred and sixty-four thousand two hundred eighty-six (1,864,286) shares, of which 100% were able to be delivered pursuant to incentive stock options. Subject to certain adjustments, with respect to any participant who is an officer of our company and subject to Section 16 of the Exchange Act, or a "covered employee" as defined in Section 162(m)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), a maximum of three hundred fifty four thousand two hundred fourteen (354,214) shares may be granted in any one year in the form of stock options or stock appreciation rights to such participant.

In March 2025, we effected a one-for-eleven reverse stock split of our common stock. Consequently, the number of shares of our common stock reserved for issuance pursuant to awards under the 2024 Plan was reduced to fifty-four thousand five hundred forty-five (54,545) shares. In August 2025, we effected a one-for-ten reverse stock split of our common stock. Consequently, the number of shares of our common stock reserved for issuance pursuant to awards under the 2024 Plan was reduced to five thousand four hundred fifty-five (5,455) shares.

Shares to be issued may be made available from authorized but unissued shares of our common stock, shares held by us in our treasury, or shares purchased by us on the open market or otherwise. During the term of the 2014 Plan, we at all times reserved and kept enough shares available to satisfy the requirements of the 2014 Plan. In the event that previously acquired shares were delivered to us in full or partial payment of the option price for the exercise of a stock option granted under the 2014 Plan, the number of shares available for future awards under the 2014 Plan would have been reduced only by the net number of shares issued upon the exercise of the stock option or settlement of an award. Awards that may be satisfied either by the issuance of common stock or by cash or other consideration would have been counted against the maximum number of shares that could have been issued under the 2014 Plan only during the period that the award is outstanding or to the extent the award is ultimately satisfied by the issuance of shares.

*Administration.* The 2014 Plan was administered by the compensation committee of our Board (the "Committee"). At any time there was no Committee to administer the 2014 Plan, any reference to the Committee is a reference to the Board. The Committee would determine the persons to whom awards are to be made; determine the type, size, and terms of awards; interpret the 2014 Plan; establish and revise rules and regulations relating to the 2014 Plan and any sub-plans, including, without limitation, any sub-plans for awards made to participants who are not residents of the United States; establish performance goals for awards and certify the extent of their achievement; and make any other determinations that it believes necessary for the administration of the 2014 Plan. The Committee had the ability to delegate certain duties to one or more of our officers as provided in the 2014 Plan.

*Eligibility.* Employees (including any employee who is also a director or an officer), contractors, and non-employee directors of us or our subsidiaries whose judgment, initiative, and efforts contributed to or may be expected to contribute to our successful performance were eligible to participate in the 2014 Plan.

 

*Stock Options.* The Committee had the ability to grant either incentive stock options ("ISOs") qualifying under Section 422 of the Code or nonqualified stock options, provided that only employees of us and our subsidiaries (excluding subsidiaries that are not corporations) are eligible to receive ISOs. Stock options could not be granted with an option price less than 100% of the fair market value of a share of common stock on the date the stock option is granted. If an ISO was granted to an employee who owns or is deemed to own more than 10% of the combined voting power of all classes of our stock (or any parent or subsidiary), the option price was to be at least 110% of the fair market value of a share of common stock on the date of grant. The Committee had the ability to determine the terms of each stock option at the time of grant, including, without limitation, the methods by or forms in which shares will be delivered to participants. The maximum term of each option, the times at which each option will be exercisable, and provisions requiring forfeiture of unexercised options at or following termination of employment or service generally were fixed by the Committee, except that the Committee could not grant stock options with a term exceeding 10 years or, in the case of an ISO granted to an employee who owns or is deemed to own more than 10% of the combined voting power of all classes of our stock (or any parent or subsidiary), a term exceeding five years.

Recipients of stock options may pay the option price (i) in cash, check, bank draft, or money order payable to the order of the Company; (ii) by delivering to us shares of Common Stock (included restricted stock) already owned by the participant having a fair market value equal to the aggregate option price and that the participant has not acquired from us within six months prior to the exercise date; (iii) by delivering to us or our designated agent an executed irrevocable option exercise form together with irrevocable instructions from the participant to a broker or dealer, reasonably acceptable to us, to sell certain of the shares purchased upon the exercise of the option or to pledge such shares to the broker as collateral for a loan from the broker and to deliver to us the amount of sale or loan proceeds necessary to pay the purchase price; and (iv) by any other form of valid consideration that is acceptable to the Committee in its sole discretion.

**2024 Long-Term Incentive Plan**

*Description of the 2024 Plan*

*Purpose*. The purpose of the 2024 Plan is to enable us to remain competitive and innovative in our ability to attract and retain the services of key employees, key contractors, and outside directors. The 2024 Plan provides for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, dividend equivalent rights, and other awards, which may be granted singly, in combination, or in tandem, and which may be paid in cash or shares of our common stock. The 2024 Plan is expected to provide flexibility to our compensation methods in order to adapt the compensation of key employees, key contractors, and outside directors to a changing business environment, after giving due consideration to competitive conditions and the impact of applicable tax laws.

*Effective Date and Expiration*. The 2024 Plan was originally approved by our Board on November 6, 2023, subject to stockholder approval. The 2024 Plan will be effective upon approval by our stockholders (such date being, the "Effective Date"), and the 2024 Plan will terminate on the tenth anniversary of the Effective Date, unless sooner terminated by our Board. No award may be made under the 2024 Plan after its termination date, but awards made prior to the termination date may extend beyond that date.

*Share Authorization*. Subject to certain adjustments and to increase by any shares subject to Prior Plan Awards (defined below) that are eligible for reuse, the number of shares of our common stock that are reserved for issuance pursuant to awards under the 2024 Plan is six hundred thousand (600,000) shares, of which 100% may be delivered pursuant to incentive stock options. "Prior Plan Awards" means (i) any awards under the Prior Plan (defined below) that are outstanding on the Effective Date and that, on or after the Effective Date, are forfeited, expire, or are canceled; and (ii) any shares subject to awards relating to common stock under the Prior Plan that, on or after the Effective Date, are settled in cash. "Prior Plan" means the 2014 Plan. Any awards outstanding under the Prior Plan as of the Effective Date will continue to be governed by the terms and conditions of the Prior Plan and the applicable award agreement.

Shares to be issued may be made available from authorized but unissued shares of our common stock, shares held by us in our treasury, or shares purchased by us on the open market or otherwise. During the term of the 2024 Plan, we will at all times reserve and keep enough shares available to satisfy the requirements of the 2024 Plan. If an award under the 2024 Plan or any Prior Plan Award is cancelled, forfeited, or expires, in whole or in part, the shares subject to such forfeited, expired, or cancelled award may again be awarded under the 2024 Plan. In the event that previously acquired shares are delivered to us in full or partial payment of the option price for the exercise of a stock option granted under the 2024 Plan, the number of shares available for future awards under the 2024 Plan shall be reduced only by the net number of shares issued upon the exercise of the stock option or settlement of an award. Awards that may be satisfied either by the issuance of common stock or by cash or other consideration shall be counted against the maximum number of shares that may be issued under the 2024 Plan only during the period that the award is outstanding or to the extent the award is ultimately satisfied by the issuance of shares. An award will not reduce the number of shares that may be issued pursuant to the 2024 Plan if the settlement of the award will not require the issuance of shares, as, for example, a stock appreciation right that can be satisfied only by the payment of cash. Only shares forfeited back to us; shares cancelled on account of termination, expiration, or lapse of an award; shares surrendered in payment of the option price of an option; or shares withheld for payment of applicable employment taxes and/or withholding obligations resulting from the exercise of a stock option shall again be available for grant as incentive stock options under the 2024 Plan, but shall not increase the maximum number of shares described above as the maximum number of shares that may be delivered pursuant to incentive stock options.

 

*Limitation on Outside Director Awards*. Outside directors may not be granted awards under the 2024 Plan in any calendar year that exceed seven hundred thousand dollars ($700,000) in the aggregate (with the fair market value of any equity awards determined as of the date of grant), other than a one-time award granted to a newly appointed or elected outside director not to exceed an additional seven hundred thousand dollars ($700,000) in the aggregate; provided, however, that these limits shall not apply to any awards made pursuant to a deferred compensation arrangement in lieu of all or a portion of cash retainers otherwise payable to an outside director.

*Administration*. The 2024 Plan is administered by the compensation committee of our Board (the "Committee"). At any time there is no Committee to administer the 2024 Plan, any reference to the Committee is a reference to the Board. The Committee will determine the persons to whom awards are to be made; determine the type, size, and terms of awards; interpret the 2024 Plan; establish and revise rules and regulations relating to the 2024 Plan and any sub-plans, including, without limitation, any sub-plans for awards made to participants who are not residents of the United States; establish performance goals for awards and certify the extent of their achievement; and make any other determinations that it believes necessary for the administration of the 2024 Plan. The Committee may delegate certain duties to one or more of our officers as provided in the 2024 Plan.

*Eligibility*. Employees (including any employee who is also a director or an officer), contractors, and outside directors of us or our subsidiaries whose judgment, initiative, and efforts contributed to or may be expected to contribute to our successful performance are eligible to participate in the 2024 Plan. As of the date of this proxy statement, we had 6 employees, 12 contractors, and 4 non-employee directors who would be eligible for awards under the 2024 Plan.

*Stock Options*. The Committee may grant either incentive stock options ("ISOs") qualifying under Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") or nonqualified stock options, provided that only employees of us and our subsidiaries (excluding subsidiaries that are not corporations) are eligible to receive ISOs. Stock options may not be granted with an option price less than 100% of the fair market value of a share of common stock on the date the stock option is granted. If an ISO is granted to an employee who owns or is deemed to own more than 10% of the combined voting power of all classes of our stock (or any parent or subsidiary), the option price shall be at least 110% of the fair market value of a share of common stock on the date of grant. The Committee will determine the terms of each stock option at the time of grant, including, without limitation, the methods by or forms in which shares will be delivered to participants. The maximum term of each option, the times at which each option will be exercisable, and provisions requiring forfeiture of unexercised options at or following termination of employment or service generally are fixed by the Committee, except that the Committee may not grant stock options with a term exceeding 10 years or, in the case of an ISO granted to an employee who owns or is deemed to own more than 10% of the combined voting power of all classes of our stock (or any parent or subsidiary), a term exceeding five years.

Recipients of stock options may pay the option price (i) in cash, check, bank draft, or money order payable to the order of the Company; (ii) by delivering to us shares of common stock (included restricted stock) already owned by the participant having a fair market value equal to the aggregate option price and that the participant has not acquired from us within six months prior to the exercise date; (iii) by delivering to us or our designated agent an executed irrevocable option exercise form together with irrevocable instructions from the participant to a broker or dealer, reasonably acceptable to us, to sell certain of the shares purchased upon the exercise of the option or to pledge such shares to the broker as collateral for a loan from the broker and to deliver to us the amount of sale or loan proceeds necessary to pay the purchase price; and (iv) by any other form of valid consideration that is acceptable to the Committee in its sole discretion.

 

*Stock Appreciation Rights*. The Committee is authorized to grant stock appreciation rights ("SARs") as a stand-alone award, or freestanding SARs, or in conjunction with options granted under the 2024 Plan, or tandem SARs. SARs entitle a participant to receive an amount equal to the excess of the fair market value of a share of common stock on the date of exercise over the fair market value of a share of our common stock on the date of grant. The grant price of a SAR cannot be less than 100% of the fair market value of a share of our common stock on the date of grant. The Committee will determine the terms of each SAR at the time of the grant, including, without limitation, the methods by or forms in which shares will be delivered to participants. The maximum term of each SAR, the times at which each SAR will be exercisable, and provisions requiring forfeiture of unexercised SARs at or following termination of employment or service generally are fixed by the Committee, except that no freestanding SAR may have a term exceeding 10 years and no tandem SAR may have a term exceeding the term of the option granted in conjunction with the tandem SAR. Distributions to the recipient may be made in common stock, cash, or a combination of both as determined by the Committee.

*Restricted Stock and Restricted Stock Units*. The Committee is authorized to grant restricted stock and restricted stock units. Restricted stock consists of shares of our common stock that may not be sold, assigned, transferred, pledged, hypothecated, encumbered, or otherwise disposed of, and that may be forfeited in the event of certain terminations of employment or service, prior to the end of a restricted period as specified by the Committee. Restricted stock units are the right to receive shares of common stock at a future date in accordance with the terms of such grant upon the attainment of certain conditions specified by the Committee, which include a substantial risk of forfeiture and restrictions on their sale or other transfer by the participant. The Committee determines the eligible participants to whom, and the time or times at which, grants of restricted stock or restricted stock units will be made; the number of shares or units to be granted; the price to be paid, if any; the time or times within which the shares covered by such grants will be subject to forfeiture; the time or times at which the restrictions will terminate; and all other terms and conditions of the grants. Restrictions or conditions could include, but are not limited to, the attainment of performance goals (as described below), continuous service with us, the passage of time, or other restrictions or conditions. Except as otherwise provided in the 2024 Plan or the applicable award agreement, a participant shall have, with respect to shares of restricted stock, all of the rights of a stockholder of the Company holding the class of common stock that is the subject of the restricted stock, including, if applicable, the right to vote the common stock and the right to receive any dividends thereon.

*Dividend Equivalent Rights*. The Committee is authorized to grant a dividend equivalent right to any participant, either as a component of another award or as a separate award, conferring on the participant the right to receive credits based on the cash dividends that would have been paid on the shares of common stock specified in the award as if such shares were held by the participant. The terms and conditions of the dividend equivalent right shall be specified by the grant. Dividend equivalents credited to the holder of a dividend equivalent right may be paid currently or may be deemed to be reinvested in additional shares. Any such reinvestment shall be at the fair market value at the time thereof. A dividend equivalent right may be settled in cash, shares, or a combination thereof.

*Performance Awards*. The Committee may grant performance awards payable in cash, shares of common stock, other consideration, or a combination thereof at the end of a specified performance period. Payment will be contingent upon achieving pre-established performance goals (as discussed below) by the end of the performance period. The Committee will determine the length of the performance period, the maximum payment value of an award, and the minimum performance goals required before payment will be made, so long as such provisions are not inconsistent with the terms of the 2024 Plan, and to the extent an award is subject to Section 409A of the Code, are in compliance with the applicable requirements of Section 409A of the Code and any applicable regulations or guidance issued thereunder. In certain circumstances, the Committee may, in its discretion, determine that the amount payable with respect to certain performance awards will be reduced from the amount of any potential awards, if the Committee determines, in its sole discretion, that the established performance measures or objectives are no longer suitable because of a change in our business, operations, corporate structure, or for other reasons that the Committee deemed satisfactory, in which case, the Committee may modify the performance measures or objectives and/or the performance period as the Committee deems appropriate in its sole discretion.

 

*Performance Goals*. Awards under the 2024 Plan may be made subject to the attainment of performance goals relating to one or more business criteria which, where applicable, shall consist of one or more or any combination of the following criteria (the "Performance Criteria"): cash flow; cost; revenues; sales; ratio of debt to debt plus equity; net borrowing, credit quality, or debt ratings; profit before tax; economic profit; earnings before interest and taxes; earnings before interest, taxes, depreciation, and amortization; gross margin; earnings per share (whether on a pre-tax, after-tax, operational, or other basis); operating earnings; capital expenditures; expenses or expense levels; economic value added; ratio of operating earnings to capital spending or any other operating ratios; free cash flow; net profit; net sales; net asset value per share; the accomplishment of mergers, acquisitions, dispositions, public offerings, or similar extraordinary business transactions; sales growth; price of the shares; return on assets, equity, or stockholders' equity; market share; inventory levels, inventory turn, or shrinkage; or total return to stockholders. Any Performance Criteria may be used to measure our performance as a whole or any of our business units and may be measured relative to a peer group or index. Any Performance Criteria may include or exclude (i) events that are of an unusual nature or indicate infrequency of occurrence; (ii) gains or losses on the disposition of a business; (iii) changes in tax or accounting regulations or laws; (iv) the effect of a merger or acquisition, as identified in our quarterly and annual earnings releases; or (v) other similar occurrences. In all other respects, Performance Criteria shall be calculated in accordance with our financial statements, under generally accepted accounting principles, or under a methodology established by the Committee prior to the issuance of an award, which is consistently applied and identified in the Company's audited financial statements, including in footnotes, or the Compensation Discussion and Analysis section of the Company's annual report.

*Israeli Awards*

For persons subject to the Israeli Income Tax Ordinance [New Version], 5721-1961 (the "Ordinance"), the Committee is authorized to grant stock options pursuant to the terms of the Israeli Appendix. The Committee may grant to participants who are employees and office holders options under Section 102 of the Ordinance ("Section 102 Options") and to Controlling Shareholders (as defined in the Israeli Appendix) and outside participants options under Section 3(i) of the Ordinance ("Section 3(i) Options"). The Committee may designate Section 102 Options as "Approved 102 Options," for which the options and shares upon exercise must be held in trust and granted through a trustee, or as "Unapproved 102 Options," for which the options and shares upon exercise do not have to be held in trust. As described further below, the determination of the Committee as to the taxation route of the stock options, the type of option, and duration of time the option and shares upon exercise are held in trust will determine the tax consequences to the participant. Of the Approved 102 Options, the Committee may grant options as "Ordinary Income Options," for which the options and shares upon exercise must be held in trust for twelve (12) months from the date of grant, or as "Capital Gain Options," for which the options and shares upon exercise must be held in trust for twenty-four (24) months from the date of grant. If the requirements of the Approved 102 Options are not met, the options are regarded as Unapproved 102 Options. Section 3(i) Options and the shares upon exercise may, but need not, be held in trust as well, depending upon the agreement between the Committee, the participant, and the trustee of the trust. Israeli participants can be granted other types of options under the 2024 Plan, but some of them will require a pre-ruling from the Israeli Tax Authorities in order to be deemed Approved 102 Options.

*Other Awards*. The Committee may grant other forms of awards, based upon, payable in, or that otherwise relate to, in whole or in part, shares of common stock, if the Committee determines that such other form of award is consistent with the purpose and restrictions of the 2024 Plan. The terms and conditions of such other form of award shall be specified by the grant. Such other awards may be granted for no cash consideration, for such minimum consideration as may be required by applicable law, or for such other consideration as may be specified by the grant.

*Vesting, Forfeiture, Recoupment and Assignment*. The Committee, in its sole discretion, may determine that an award will be immediately vested in whole or in part, or that all or any portion may not be vested until a date, or dates, subsequent to its date of grant, or until the occurrence of one or more specified events, subject in any case to the terms of the 2024 Plan. If the Committee imposes conditions upon vesting, then, except as otherwise provided below, subsequent to the date of grant, the Committee may, in its sole discretion, accelerate the date on which all or any portion of the award may be vested.

The Committee may impose on any award at the time of grant or thereafter, such additional terms and conditions as the Committee determines, including terms requiring forfeiture of awards in the event of a participant's termination of service. The Committee will specify the circumstances on which performance awards may be forfeited in the event of a termination of service by a participant prior to the end of a performance period or settlement of awards. Except as otherwise determined by the Committee, restricted stock will be forfeited upon a participant's termination of service during the applicable restriction period. In addition, we may recoup all or any portion of any shares or cash paid to a participant in connection with any award in the event of a restatement of our financial statements as set forth in our clawback policy, as such policy may be approved or modified by our Board from time to time.

Awards granted under the 2024 Plan generally are not assignable or transferable except by will or by the laws of descent and distribution, except that the Committee may, in its discretion and pursuant to the terms of an award agreement, permit transfers of certain award of nonqualified stock options or SARs to (i) the spouse (or former spouse), children, or grandchildren of the participant ("Immediate Family Members"); (ii) a trust or trusts for the exclusive benefit of such Immediate Family Members; (iii) a partnership in which the only partners are (x) such Immediate Family Members, and/or (y) entities which are controlled by Immediate Family Members; (iv) an entity exempt from federal income tax pursuant to Section 501(c)(3) of the Code or any successor provision; or (v) a split interest trust or pooled income fund described in Section 2522(c)(2) of the Code or any successor provision, provided that (x) there shall be no consideration for any such transfer, (y) the applicable award agreement pursuant to which such award is granted must be approved by the Committee and must expressly provide for such transferability, and (z) subsequent transfers of transferred awards shall be prohibited except those by will or the laws of descent and distribution.

*Adjustments Upon Changes in Capitalization*. In the event that any dividend or other distribution, recapitalization, stock split, reverse stock split, rights offering, reorganization, merger, consolidation, split-up, spin-off, split-off, combination, subdivision, repurchase, or exchange of shares of common stock or other securities of the Company, issuance of warrants or other rights to purchase shares of common stock or other securities of the Company, or other similar corporate transaction or event affects the fair value of an award, then the Committee shall adjust any or all of the following so that the fair value of the award immediately after the transaction or event is equal to the fair value of the award immediately prior to the transaction or event (i) the number of shares and type of common stock (or the securities or property) which thereafter may be made the subject of awards; (ii) the number of shares and type of common stock (or other securities or property) subject to outstanding awards; (iii) the number of shares and type of common stock (or other securities or property) specified as the annual per-participant limitation under the 2024 Plan; (iv) the option price of each outstanding award; (v) the amount, if any, we pay for forfeited shares in accordance with the terms of the 2024 Plan; and (vi) the number of or exercise price of shares then subject to outstanding SARs previously granted and unexercised under the 2024 Plan to the end that the same proportion of our issued and outstanding shares of common stock in each instance shall remain subject to exercise at the same aggregate exercise price; provided, however, that the number of shares of common stock (or other securities or property) subject to any award shall always be a whole number. Notwithstanding the foregoing, no such adjustment shall be made or authorized to the extent that such adjustment would cause the 2024 Plan or any stock option to violate Section 422 of the Code or Section 409A of the Code. All such adjustments must be made in accordance with the rules of any securities exchange, stock market, or stock quotation system to which we are subject.

*Amendment or Discontinuance of the 2024 Plan*. The Board may, at any time and from time to time, without the consent of participants, alter, amend, revise, suspend, or discontinue the 2024 Plan in whole or in part; provided, however, that (i) no amendment that requires stockholder approval in order for the 2024 Plan and any awards under the 2024 Plan to continue to comply with Sections 421 and 422 of the Code (including any successors to such sections, or other applicable law) or any applicable requirements of any securities exchange or inter-dealer quotation system on which our stock is listed or traded, shall be effective unless such amendment is approved by the requisite vote of our stockholders entitled to vote on the amendment; and (ii) unless required by law, no action by the Board regarding amendment or discontinuance of the 2024 Plan may adversely affect any rights of any participants or obligations of us to any participants with respect to any outstanding awards under the 2024 Plan without the consent of the affected participant.

*U.S. Federal Income Tax Consequences*

The following is a brief summary of certain U.S. federal income tax consequences relating to the transactions described under the 2024 Plan as set forth below. This summary does not purport to address all aspects of U.S. federal income taxation and does not describe state, local, or foreign tax consequences. This discussion is based upon provisions of the Code and the Treasury Regulations issued thereunder, and judicial and administrative interpretations under the Code and Treasury Regulations, all as in effect as of the date hereof, and all of which are subject to change (possibly on a retroactive basis) or different interpretation.

 

*Law Affecting Deferred Compensation*. In 2004, Section 409A was added to the Code to regulate all types of deferred compensation. If the requirements of Section 409A of the Code are not satisfied, deferred compensation and earnings thereon will be subject to tax as it vests, plus an interest charge at the underpayment rate plus 1% and a 20% penalty tax. Certain performance awards, stock options, stock appreciation rights, restricted stock units, and certain types of restricted stock are subject to Section 409A of the Code.

*Incentive Stock Options*. A participant will not recognize income at the time an ISO is granted. When a participant exercises an ISO, a participant also generally will not be required to recognize income (either as ordinary income or capital gain). However, to the extent that the fair market value (determined as of the date of grant) of the shares with respect to which the participant's ISOs are exercisable for the first time during any year exceeds $100,000, the ISOs for the shares over $100,000 will be treated as nonqualified stock options, and not ISOs, for U.S. federal tax purposes, and the participant will recognize income as if the ISOs were nonqualified stock options. In addition to the foregoing, if the fair market value of the shares received upon exercise of an ISO exceeds the exercise price, then the excess may be deemed a tax preference adjustment for purposes of the U.S. federal alternative minimum tax calculation. The federal alternative minimum tax may produce significant tax repercussions depending upon the participant's particular tax status.

The tax treatment of any shares acquired by exercise of an ISO will depend upon whether the participant disposes of his or her shares prior to the later of: (i) two years after the date the ISO was granted or (ii) one year after the shares were transferred to the participant upon exercise of the ISO (referred to as the "Holding Period"). If a participant disposes of shares acquired by exercise of an ISO after the expiration of the Holding Period, any amount received in excess of the participant's tax basis for such shares will be treated as a short-term or long-term capital gain, depending upon how long the participant has held the shares. If the amount received is less than the participant's tax basis for such shares, the loss will be treated as a short-term or long-term capital loss, depending upon how long the participant has held the shares. If the participant disposes of shares acquired by exercise of an ISO prior to the expiration of the Holding Period, the disposition will be considered a "disqualifying disposition." If the amount received for the shares is greater than the fair market value of the shares on the exercise date, then the difference between the ISO's exercise price and the fair market value of the shares at the time of exercise will be treated as ordinary income for the tax year in which the "disqualifying disposition" occurs. The participant's basis in the shares will be increased by an amount equal to the amount treated as ordinary income due to such "disqualifying disposition." In addition, the amount received in such "disqualifying disposition" over the participant's increased basis in the shares will be treated as capital gain. However, if the price received for shares acquired by exercise of an ISO is less than the fair market value of the shares on the exercise date and the disposition is a transaction in which the participant sustains a loss which otherwise would be recognizable under the Code, then the amount of ordinary income that the participant will recognize is the excess, if any, of the amount realized on the "disqualifying disposition" over the basis of the shares.

*Nonqualified Stock Options*. A participant generally will not recognize income at the time a nonqualified stock option is granted. When a participant exercises a nonqualified stock option, the difference between the option price and any higher market value of the shares of common stock on the date of exercise will be treated as compensation taxable as ordinary income to the participant. The participant's tax basis for the shares acquired under a nonqualified stock option will be equal to the option price paid for such shares, plus any amounts included in the participant's income as compensation. When a participant disposes of shares acquired by exercise of a nonqualified stock option, any amount received in excess of the participant's tax basis for such shares will be treated as short-term or long-term capital gain, depending upon how long the participant has held the shares. If the amount received is less than the participant's tax basis for such shares, the loss will be treated as a short-term or long-term capital loss, depending upon how long the participant has held the shares.

*Special Rule if Option Price is Paid for in Shares*. If a participant pays the option price of a nonqualified stock option with previously-owned shares of our common stock and the transaction is not a disqualifying disposition of shares previously acquired under an ISO, the shares received equal to the number of shares surrendered are treated as having been received in a tax-free exchange. The participant's tax basis and holding period for these shares received will be equal to the participant's tax basis and holding period for the shares surrendered. The shares received in excess of the number of shares surrendered will be treated as compensation taxable as ordinary income to the participant to the extent of their fair market value. The participant's tax basis in these shares will be equal to their fair market value on the date of exercise, and the participant's holding period for such shares will begin on the date of exercise.

If the use of previously acquired shares to pay the exercise price of a nonqualified stock option constitutes a disqualifying disposition of shares previously acquired under an ISO, the participant will have ordinary income as a result of the disqualifying disposition in an amount equal to the excess of the fair market value of the shares surrendered, determined at the time such shares were originally acquired on exercise of the ISO, over the aggregate option price paid for such shares. As discussed above, a disqualifying disposition of shares previously acquired under an ISO occurs when the participant disposes of such shares before the end of the Holding Period. The other tax results from paying the exercise price with previously-owned shares are as described above, except that the participant's tax basis in the shares that are treated as having been received in a tax-free exchange will be increased by the amount of ordinary income recognized by the participant as a result of the disqualifying disposition.

*Restricted Stock*. A participant who receives restricted stock generally will recognize as ordinary income the excess, if any, of the fair market value of the shares granted as restricted stock at such time as the shares are no longer subject to forfeiture or restrictions, over the amount paid, if any, by the participant for such shares. However, a participant who receives restricted stock may make an election under Section 83(b) of the Code within 30 days of the date of transfer of the shares to recognize ordinary income on the date of transfer of the shares equal to the excess of the fair market value of such shares (determined without regard to the restrictions on such shares) over the purchase price, if any, of such shares. If a participant does not make an election under Section 83(b) of the Code, then the participant will recognize as ordinary income any dividends received with respect to such shares. At the time of sale of such shares, any gain or loss realized by the participant will be treated as either short-term or long-term capital gain (or loss) depending on the holding period. For purposes of determining any gain or loss realized, the participant's tax basis will be the amount previously taxable as ordinary income, plus the purchase price paid by the participant, if any, for such shares.

*Stock Appreciation Rights*. Generally, a participant who receives a stand-alone SAR will not recognize taxable income at the time the stand-alone SAR is granted, provided that the SAR is exempt from or complies with Section 409A of the Code. If an employee receives the appreciation inherent in the SARs in cash, the cash will be taxed as ordinary income to the recipient at the time it is received. If a recipient receives the appreciation inherent in the SARs in stock, the spread between the then current market value and the grant price, if any, will be taxed as ordinary income to the employee at the time it is received. In general, there will be no federal income tax deduction allowed to us upon the grant or termination of SARs. However, upon the exercise of a SAR, we will be entitled to a deduction equal to the amount of ordinary income the recipient is required to recognize as a result of the exercise.

*Other Awards.* In the case of an award of restricted stock units, performance awards, dividend equivalent rights, or other stock or cash awards, the recipient will generally recognize ordinary income in an amount equal to any cash received and the fair market value of any shares received on the date of payment or delivery, provided that the award is exempt from or complies with Section 409A of the Code. In that taxable year, we will receive a federal income tax deduction in an amount equal to the ordinary income which the participant has recognized.

*Federal Tax Withholding*. Any ordinary income realized by a participant upon the exercise of an award under the 2024 Plan is subject to withholding of U.S. federal, state, and local income tax and to withholding of the participant's share of tax under the Federal Insurance Contribution Act and the Federal Unemployment Tax Act. To satisfy our federal income tax withholding requirements, we will have the right to require that, as a condition to delivery of any certificate for shares of common stock or the registration of the shares in the participant's name, the participant remit to us an amount sufficient to satisfy the withholding requirements. Alternatively, we may withhold a portion of the shares (valued at fair market value) that otherwise would be issued to the participant to satisfy all or part of the withholding tax obligations or may, if we consent, accept delivery of shares (that the participant has not acquired from us within six months prior to the date of exercise) with an aggregate fair market value that equals or exceeds the required tax withholding payment. Withholding does not represent an increase in the participant's total income tax obligation, since it is fully credited toward his or her tax liability for the year. Additionally, withholding does not affect the participant's tax basis in the shares. Compensation income realized and tax withheld will be reflected on Forms W-2 supplied by us to employees by January 31 of the succeeding year. Deferred compensation that is subject to Section 409A of the Code will be subject to certain federal income tax withholding and reporting requirements.

*Tax Consequences to Us*. To the extent that a participant recognizes ordinary income in the circumstances described above, we will be entitled to a corresponding deduction provided that, among other things, the income meets the test of reasonableness, is an ordinary and necessary business expense, is not an "excess parachute payment" within the meaning of Section 280G of the Code, and is not disallowed by the $1,000,000 limitation on certain executive compensation under Section 162(m) of the Code. While deductibility of executive compensation for federal income tax purposes is among the factors the Board and Committee consider when structuring executive compensation arrangements, it is not the sole or primary factor considered. We retain the flexibility to authorize compensation that may not be deductible if we believe it is in the best interests of the Company.

 

*Million Dollar Deduction Limit and Other Tax Matters*. We may not deduct compensation of more than $1,000,000 that is paid to "covered employees" (as defined in Section 162(m) of the Code), which include (i) an individual (or, in certain circumstances, his or her beneficiaries) who, at any time during the taxable year, is either our principal executive officer or principal financial officer; (ii) an individual who is among our three highest compensated officers for the taxable year (other than an individual who was either our principal executive officer or principal financial officer at any time during the taxable year); or (iii) anyone who was a covered employee for purposes of Section 162(m) of the Code for any tax year beginning on or after January 1, 2018. This limitation on deductions (x) only applies to compensation paid by a publicly-traded corporation (and not compensation paid by non-corporate entities) and (z) may not apply to certain types of compensation, such as qualified performance-based compensation that is payable pursuant to a written, binding contract that was in effect as of November 2, 2018, so long as the contract is not materially modified after that date.

If an individual's rights under the 2024 Plan are accelerated as a result of a change in control and the individual is a "disqualified individual" under Section 280G of the Code, the value of any such accelerated rights received by such individual may be included in determining whether or not such individual has received an "excess parachute payment" under Section 280G of the Code, which could result in (i) the imposition of a 20% federal excise tax (in addition to federal income tax) payable by the individual on the value of such accelerated rights, and (ii) the loss by us of a compensation deduction.

*Israeli Income Tax Consequences*

The following description of the Israel income tax consequences of awards under Israeli Appendix of the 2024 Plan is general and does not purport to be complete.

Pursuant to Section 102 of the Ordinance, which came into effect on January 1, 2003, options, shares, and other securities (including Restricted Shares) (together "Options") may be granted through a trustee (i.e., Approved 102 Options) or not through a trustee (i.e., Unapproved 102 Options). The following is a brief discussion of the tax consequences applicable to both types of Section 102 Options.

*Grant Through a Trustee*

Options granted through a trustee and held in trust are made either through the capital gains tax track (i.e., Capital Gains Options) or the compensation income tax track (i.e., Ordinary Income Options). Capital Gains Options and Ordinary Income Options can be granted only through a trustee. Under the capital gains tax track, the Capital Gains Options and the underlying shares have to be held in trust for at least twenty-four (24) months from their date of grant. Any gain made on the sale of shares following the twenty-four (24) month period is subject to a capital gains tax at a current rate of 25%; the amount of gain is the difference between the sales proceeds from the sale of shares and the exercise price paid for such shares. Generally, Capital Gains Options are not taxed on their date of grant. However, in the event that the exercise price of the options is less than the fair market value of the Company's common stock on the date of grant, a portion of the gain will be deemed compensation income, taxable at the personal marginal tax rate of the participant. The payment of such tax is made at the time of exercise of the Capital Gains Options. The portion of the gain that is deemed compensation income is the difference between the average value of the shares as listed on the stock exchange during the thirty (30) day period prior to the date of grant and the exercise price of the option. If the Capital Gains Options or the underlying shares of such options are sold by the trustee or transferred from the trustee to the beneficiary before the end of the twenty-four (24) month period, any resulting income (cash or equivalent) is taxed as compensation income. If the options have not been exercised and transferred from the trustee to the beneficiary, the taxable amount of income is the value of the option. If the options have been exercised, the taxable amount of income is the difference between the aggregate fair market value of the shares at the time of such sale or transfer and the aggregate exercise price paid for such shares.

Under the compensation income tax track, the Ordinary Income Options and the underlying shares have to be held in trust for at least twelve (12) months from their date of grant. Any gain made on the sale of shares is subject to compensation income tax at the personal marginal tax rate of the respective participant; the amount of gain is the difference between the sales proceeds from the sale of shares and the exercise price paid for such shares. Ordinary Income Options are not taxed on their date of grant, but rather when the options or the underlying shares of such options are sold by the trustee or transferred from the trustee to the beneficiary. At such time, if the options have not been exercised, the taxable amount of income is value of the Option. If the Options have been exercised, the taxable amount of income is the difference between the aggregate fair market value of the shares at the time of such sale or transfer and the aggregate exercise price paid for such shares.

A corporate tax deduction is available for the employer in the tax year in which tax is withheld. The deductible amount is equal to any amount included by a participant as compensation income, except when a participant is granted Capital Gains Options, including in the event that such Capital Gains Options or the underlying shares of such options are sold by the trustee or transferred from the trustee to the beneficiary before the end of the applicable twenty-four (24) month period. In such event, any resulting income to the participant is deemed to be compensation income for tax purposes, but there would be no corresponding corporate tax deduction available to the employer.

*Grant Not Through a Trustee*

In the case of Options not made through a trustee, if the shares are non-marketable securities, the Option will not be subject to tax at the date of grant of the option or the exercise of the Option. However, ordinary income tax will be payable upon the sale of the shares acquired upon exercise of the Option. The taxable amount will be the sales proceeds less the aggregate exercise price paid by the participant. If the shares covered by the option have a market value, then the value of the Option is treated as compensation income, and subject to tax at the date of grant. There is no tax upon the exercise of the Option. However, capital gains tax will be payable on the sale of the shares upon exercise of the Option. The taxable amount will be the sales proceeds, less the value that was taxed at the date of grant and the aggregate exercise price paid by the participant.

*Grant of Section 3(i) Options*

Options under Section 3(i) of the Ordinance may be granted to Controlling Shareholders, consultants, and controlling stockholders (which are excluded from the term employees under Section 102 of the Ordinance). Grants of Options for shares which are non-marketable are not taxed under the income tax rules on the date of grant, but such event creates VAT liability. However, they are subject to tax at the time of exercise at the ordinary income tax rate, and at the day such shares are sold at the capital gains tax rate. The difference between the fair market value of the shares at the time of exercise and the exercise price is taxed at the ordinary income tax rate. Any gain above such value at the time of sale of the shares is taxed at the capital gains rate. Grants of Options for shares which have a market value are subject to tax on the date of grant, exercise of the Option, and the sale of the shares. The value of the Option is taxed on the date of grant at the ordinary income tax rate. The difference between the fair market value of the shares at the time of exercise and the sum of the exercise price and the amounts previously taxed at grant, is taxed at the ordinary income tax rate. Any gain above such value at the time of sale of the shares is taxed at the capital gains rate.

*Other Stock Incentives*

All other awards under the Israeli Appendix need tax ruling from the Israeli Tax Authority for the postponement of the tax event arising from the issuance thereof. Otherwise, there is an immediate tax event.

 ****

***Outstanding Equity Awards at December 31, 2024***

The following table provides certain information as of December 31, 2024, with respect to our equity compensation plans under which our equity securities were authorized for issuance. Amounts, as applicable, have been adjusted to reflect the Reverse Stock Splits.

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| | | | |
|:---|:---|:---|:---|
| | **(a)** | **(b)** | **(c)** |
| <br>**Plan Category** | **Number of**<br> **securities to**<br> **be issued upon exercise of**<br> **outstanding**<br> **options,**<br> **warrants, and**<br> **rights** | **Weighted-**<br> **average**<br> **exercise price**<br> **of**<br> **outstanding**<br> **options,**<br> **warrants and**<br> **rights** | **Number of**<br> **securities remaining**<br> **available for future**<br> **issuance under**<br> **equity**<br> **compensation plans**<br> **(excluding**<br> **securities reflected**<br> **in column (a))** |
| **Equity compensation plans approved by security holders<sup>(1)</sup>** | 4506 | $92.40 | 2791 |
| **Equity compensation plans not approved by security holders** | - | - | - |
| **Total** | 4506 | $92.40 | 2791 |

---

<sup>(1)</sup> Represents shares available for issuance under the 2014 Plan and the 2024 Plan as of December 31, 2024, pursuant to outstanding awards. The 2014 Plan expired on February 19, 2024, and no further equity awards may be granted under the 2014 Plan.

**Pay Versus Performance** 

The following section has been prepared in accordance with pay versus performance rules adopted by the Securities and Exchange Commission ("SEC") pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Under these new rules, the SEC has developed a definition of pay, referred to as Compensation Actually Paid ("CAP"). We are required to calculate CAP for our Named Executive Officers and then compare it with certain Company performance measures. Shareholders should refer to our compensation philosophy discussion and analysis in this Proxy Statement for a complete description of how executive compensation relates to Company performance measures and how the Compensation Committee makes it decisions related thereto. The Compensation Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the years shown.

*Pay Versus Performance Table*

The following table provides the information required to be disclosed for our NEOs for each of the fiscal years ended December 31, 2024, December 31, 2023, and December 31, 2022, along with the financial information required to be disclosed for each fiscal year. As an early commercial-stage company, we do not tie executive compensation to net income performance, and we do not have other financial metrics that are used to determine executive compensation.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Year** | **Summary Compensation Table Total for PEO <sup>(1)(2)</sup>** | **CAP to**<br> **PEO<sup>(3)</sup>** | **Average Summary Compensation Table Total for Non-PEO**<br> **NEOs<sup>(2)(4)</sup>** | **Average CAP to Non-PEO NEOs<sup>(3)(4)</sup>** | **Value of Initial Fixed $100 Investment Based on TSR<sup>(5)</sup>** | **Net Income (in thousands)** |
| 2024 | $424035 | $424035 | $306220 | $306220 | $51.30 | $(3705) |
| 2023 | $541861 | $309767 | $361667 | $284373 | $27.01 | $(3711) |
| 2022 | $408804 | $110347 | $298601 | $199116 | $36.13 | $(5448) |

---

<sup>(1)</sup> The principal executive officer in each reporting year is Brian Murphy, our former Chief Executive Officer. Mr. Murphy resigned as our CEO in June 2025.

<sup>(2)</sup> Summary Compensation Table ("SCT") numbers include the values as reported (i) in this proxy statement for the year ended December 31, 2024, (ii) in the definitive proxy statement on Schedule 14A filed with the SEC on October 29, 2024, for the year ended December 31, 2023, and (iii) in the definitive proxy statement on Schedule 14A filed with the SEC on May 1, 2023, for the year ended December 31, 2022.

<sup>(3)</sup> Subtractions from, and additions to, total CAP in the pay versus performance table by year include:\

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **2024** | **2024** | **2023** | **2023** | **2022** | **2022** |
|  | **PEO($)** | **Average of Other Non-PEO NEOs ($)** | **PEO($)** | **Average of Other Non-PEO NEOs ($)** | **PEO($)** | **Average of Other Non-PEO NEOs ($)** |
| Total Compensation from SCT | 424035 | 306220 | 541861 | 361667 | 408804 | 298601 |
| **Subtractions:** |  |  |  |  |  |  |
| SCT Value of Stock and Option Awards | (42285) | (26428) | (159631) | (69167) | (66364) | (22101) |
| Adjustments: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Addition: Fair value at year-end of awards granted during the covered fiscal year that are outstanding and unvested at year-end |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Addition: Fair value at vest date of awards granted and vested during the covered fiscal year | 42285 | 26428 | 43599 | 30520 |  |  |
| &nbsp;&nbsp;&nbsp;Addition (Subtraction): Year-over-year change in fair value of awards granted in any prior fiscal year that are outstanding and unvested at year end |  |  |  |  | (154769) | (51589) |
| &nbsp;&nbsp;&nbsp;Addition (Subtraction): Change as of the vesting date (from the end of the prior fiscal year) in fair value of awards granted in any prior fiscal year for which vesting conditions were satisfied at the end of or during the covered fiscal year |  |  |  |  | (77384) | (25795) |
| &nbsp;&nbsp;&nbsp;(Subtraction): Fair value at end of prior year of awards granted in any prior fiscal year that fail to meet the applicable vesting conditions during the covered fiscal year |  |  | (116032) | (38647) |  |  |
| Total Adjustments for Equity Awards |  |  | (232064) | (77294) | (298457) | (99485) |
| Compensation Actually Paid (as calculated) | 424035 | 306220 | 309767 | 284373 | 110347 | 199116 |

---

---

| | |
|:---|:---|
| <sup>(4)</sup> | The sole Non-PEO NEO in each reporting year is Stephen Brown (Chief Financial Officer). |
| |  |
| <sup>(5)</sup> | The Company's cumulative total shareholder return ("TSR") assumes $100 was invested in the Company for the period starting December 31, 2022, through the end of each listed year. |

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*Pay Versus Performance: Graphical Description*

The illustrations below provide a graphical description of CAP (as calculated in accordance with the SEC rules) and the following measures:

● the Company's cumulative TSR; and

● the Company's net income

**CAP and Cumulative TSR**

The following chart sets forth the relationship between CAP to our CEO, the average CAP to our Non-CEO NEOs, and the Company's cumulative TSR over the three most recently completed fiscal years.

![](formpre14a_002.jpg)

**CAP and Company Net Income**

The following chart sets forth the relationship between CAP to our CEO, the average CAP to our Non-CEO NEOs, and our net income during the three most recently completed fiscal years.

![](formpre14a_003.jpg)

**SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT**

The following table sets forth information with respect to the beneficial ownership of our common stock as of the Record Date by:

● each
 person known by us to beneficially own more than 5.0% of our common stock;

● each
 of our directors;

● each
 of the Named Executive Officers; and

● all
 of our directors and executive officers as a group.

The percentages of common stock beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. Under the rules of the SEC, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or to direct the voting of the security, or investment power, which includes the power to dispose of or to direct the disposition of the security.

Except as indicated in the footnotes to this table, each beneficial owner named in the table below has sole voting and sole investment power with respect to all shares beneficially owned and each person's address is c/o NanoVibronix, Inc., 969 Pruitt Place, Tyler TX 75703. As of the Record Date, there were 1,011,102 shares of Common Stock, 0 shares of Series C Preferred Stock, 0 shares of Series D Preferred Stock, 0 shares of Series E Preferred Stock, 0 shares of Series F Preferred Stock, 820 shares of Series G Preferred Stock, 11,111 shares of Series H Preferred Stock and 53,100 shares of Series X Preferred Stock issued and outstanding.

---

| | | |
|:---|:---|:---|
| **Name of Beneficial Owner** | **Number of**<br> **Shares Beneficially Owned<sup>(1)</sup>** | **Percentage of Shares Outstanding<sup>(1)</sup>** |
| ***5% Owners*** | | |
| Alpha Capital Anstalt | 53100<sup>(2)</sup> | 4.9% |
| Palladium Capital Group, LLC | 53100<sup>(3)</sup> | 4.9% |
| <br>***Directors and Executive Officers*** |  |  |
| Brian Murphy | 909<sup>(4)</sup> | \* |
| Stephen Brown | 584<sup>(5)</sup> | \* |
| Martin Goldstein, M.D. | 391<sup>(6)</sup> | \* |
| Thomas R. Mika | 364<sup>(7)</sup> | \* |
| Christopher Fashek | 616<sup>(8)</sup> | \* |
| Doron Besser, M.D. | 53100<sup>(9)</sup> | 4.9% |
| Zeev Rotstein, M.D. | 0 | \* |
| **All directors and executive officers as a group (7 persons)** | 5596 4 | 5.2% |

---

<sup>\*</sup> Represents Ownership of Less than 1%

<sup>(1)</sup> Shares of common stock beneficially owned and the respective percentages of beneficial ownership of common stock assume the exercise of all options, warrants and other securities convertible into common stock beneficially owned by such person or entity currently exercisable or exercisable within 60 days of the Record Date. Shares issuable pursuant to the exercise of stock options and warrants exercisable within 60 days are deemed outstanding and held by the holder of such options or warrants for computing the percentage of outstanding common stock beneficially owned by such person, but are not deemed outstanding for computing the percentage of outstanding common stock beneficially owned by any other person.

<sup>(2)</sup> Based on certain information available to the Company, including information provided in the Schedule 13G filed on May 19, 2025, by Alpha Capital Anstalt. The shares are held by Alpha Capital Anstalt and are comprised of (i) 323 shares of common stock and (ii) 52,777 shares of stock issuable upon the exercise of certain pre-funded warrants Not included are (i) 40,996 shares of Series X Preferred Stock, convertible into 1,218,699 shares of common stock, (ii) 24,313 shares of common stock issuable upon the exercise of certain pre-funded warrants issued in September 2025, (iii) 751,364 shares of common stock issuable upon the exercise of certain warrants issued in , and (iv) 11,111 shares of Series H Preferred Stock convertible into 1,585,021 shares of common stock. The shares of common stock issuable upon the exercise of the aforementioned preferred stock and warrants are subject to the beneficial ownership limitation of 4.9%. The address of Alpha Capital Anstalt is Altenbach 8, FL-9490 Vaduz, Furstentums, Liechtenstein.

<sup>(3)</sup> The shares are held by Palladium Capital Group, LLC and are comprised of 53,100 shares of stock issuable upon the exercise of certain warrants Not included are (i) 3,626 shares of Series X Preferred Stock, convertible into 107,791 shares of common stock and (ii) 118,469 shares of common stock issuable upon the exercise of certain warrants which are subject to the beneficial ownership limitation of 4.9% as the Record Date. The Address of Palladium Captial Group, LLC is Carnegie Hall Tower, 152 West 57th Street, 24th Floor, New York, NY 10019. 

<sup>(4)</sup> Comprised of 909 shares of common stock that may be purchased by Mr. Murphy upon exercise of stock options that are currently exercisable or exercisable within 60 days following the Record Date.

<sup>(5)</sup> Comprised of 2 shares of common stock held by Mr. Brown and 582 shares of common stock that may be purchased by Mr. Brown upon exercise of stock options that are currently exercisable or exercisable within 60 days following the Record Date.

<sup>(6)</sup> Comprised of 391 shares of common stock that may be purchased by Dr. Goldstein upon exercise of stock options that are currently exercisable or exercisable within 60 days following the Record Date.

<sup>(7)</sup> Comprised of 364 shares of common stock that may be purchased by Mr. Mika upon exercise of stock options that are currently exercisable or exercisable within 60 days following the Record Date.

<sup>(8)</sup> Comprised of 34 shares of common stock held by Mr. Fashek and 582 shares of Common Stock that may be purchased by Mr. Fashek upon exercise of stock options that are currently exercisable or exercisable within 60 days following the Record Date

<sup>(9)</sup> Comprised of 53,100 shares of common stock that can be acquired upon the exercise of 1,700 shares of Series X Preferred Stock owned by Dr. Besser which are subject to the beneficial ownership limitation of 4.9% as the Record Date. Not included are 39,387 shares of common stock that can be acquired upon the exercise of 1,428 shares of Series X Preferred Stock owned by Dr. Besser which are subject to the beneficial ownership limitation of 4.9% as the Record Date.

**REPORT OF THE AUDIT COMMITTEE**

The Audit Committee assists the Board in its general oversight of the Company's financial reporting processes. The Audit Committee Charter describes in greater detail the full responsibilities of the Audit Committee. During each fiscal year, the Audit Committee reviews the Company's financial statements, management reports, internal control over financial reporting and audit matters. In connection with these reviews, the Audit Committee meets with management and independent public accountants at least once each quarter. The Audit Committee schedules its meetings with a view to ensuring that it devotes appropriate attention to all of its tasks. These meetings include, whenever appropriate, executive sessions in which the Audit Committee meets separately with the independent public accountants, financial management personnel and legal counsel.

As part of its review of audit matters, the Audit Committee supervises the relationship between the Company and its independent registered public accountants, including: having direct responsibility for their appointment, compensation and retention; reviewing the scope of their audit services; approving audit and non-audit services; and confirming the independence of the independent public accountants. Together with senior members of the Company's financial management team, the Audit Committee reviewed the overall audit scope and plans of the independent public accountants, the results of external audit examinations, and evaluations by management of the Company's internal control over financial reporting and the quality of the Company's financial reporting.

In addition, the Audit Committee reviewed key initiatives and programs aimed at designing and maintaining an effective internal and disclosure control structure. As part of this process, the Audit Committee continued to monitor the scope and adequacy of the steps taken to maintain the effectiveness of internal procedures and controls.

In performing all of these functions, the Audit Committee acts in an oversight capacity. The Audit Committee reviews and discusses the quarterly and annual consolidated financial statements with management, and the Company's independent public accountants prior to their issuance. In its oversight role, the Audit Committee relies on the work and assurances of the Company's management, which is responsible for establishing and maintaining adequate internal control over financial reporting, preparing the financial statements and other reports and maintaining policies relating to legal and regulatory compliance, ethics and conflicts of interest. Zwick CPA, PLLC, was responsible for performing an independent audit of the consolidated financial statements and expressing an opinion on the conformity of those financial statements with accounting principles generally accepted in the United States of America. The Audit Committee has reviewed and discussed the Company's audited consolidated financial statements and related footnotes for the year ended December 31, 2024, and the independent auditor's report on those financial statements, with management and with our independent auditor, Zwick CPA, PLLC.

The Audit Committee has reviewed with Zwick CPA, PLLC the matters required to be discussed by Statement on Auditing Standards No. 16, as amended, "Communication with audit committees," including a discussion with management and the independent public accountants of the quality (and not merely the acceptability) of the Company's accounting principles, the reasonableness of significant estimates and judgments and the disclosures in the Company's financial statements. In addition, the Audit Committee reviewed and discussed with Zwick CPA, PLLC matters related to its independence for the fiscal year ended December 31, 2024, including a review of audit and non-audit fees and the written disclosures in the letter from Zwick CPA, PLLC, to the Audit Committee required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent public accountant's communication with the Audit Committee concerning independence. The Audit Committee concluded that Zwick CPA, PLLC was independent from the Company and its management for the fiscal year ended December 31, 2024.

Taking all these reviews and discussions into account, the Audit Committee recommended to the Board that the audited financial statements be included in NanoVibronix, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, for filing with the SEC.

AUDIT COMMITTEE

Thomas Mika, Chair

Zeev Rotstein, M.D.

Christopher Fashek

The Report of the Audit Committee set forth in this Proxy Statement shall not be deemed to be "soliciting material" or to be "filed" with the SEC or subject to Regulation 14A or 14C under the Exchange Act, or to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended. In addition, it shall not be deemed incorporated by reference by any statement that incorporates this Proxy Statement by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, as amended, except to the extent that we specifically incorporate this information by reference.

**PROPOSAL 2** **— THE AUDITOR RATIFICATION PROPOSAL**

The Audit Committee has selected E&Y as our independent registered public accounting firm for the fiscal year ending December 31, 2025, and the Board has directed that management submit the selection of independent registered public accountants for ratification by the stockholders at the Annual Meeting.

The Audit Committee has reviewed the independence of E&Y as auditor. The Audit Committee has concluded that E&Y is independent and that it is in the best interests of the Company and its stockholders to retain E&Y as independent auditor for the year ending December 31, 2025.

Stockholder ratification of the selection of E&Y as our independent registered public accounting firm is not required by our Bylaws or otherwise. However, the Board is submitting the selection of E&Y to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the selection, the Audit Committee will reconsider whether or not to retain E&Y. Even if the selection is ratified, the Audit Committee, at its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and its stockholders and E&Y.

A representative of E&Y is not expected to be present at the Annual Meeting, and as such will not have the opportunity to make a statement or be available to respond to appropriate questions.

As previously report on the Company's Form 8-K filed with the SEC on August 14, 2025, Zwick CPA, PLLC ("Zwick") served as the Company's independent registered public accounting firm from December 7, 2023 to August 12, 2025, upon dismissal by the Audit Committee of Zwick as the Company's independent registered public accounting firm. On August 13, 2025, the Audit Committee engaged E&Y as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2025, effective immediately.

During the fiscal years ended December 31, 2024, and December 31, 2023, and the subsequent interim period through August 13, 2025, neither the Company nor anyone on its behalf has consulted with E&Y regarding (i) the application of accounting principles to any specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company's financial statements, and neither a written report nor oral advice was provided to the Company that E&Y concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing, or financial reporting issue, or (ii) any matter that was either the subject of a "disagreement," as defined in Item 304(a)(1)(iv) of Regulation S-K, or a "reportable event," as defined in Item 304(a)(1)(v) of Regulation S-K.

The reports of Zwick on the Company's consolidated financial statements for the two most recent fiscal years, ended December 31, 2024, and December 31, 2023, did not contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope, or accounting principles, except Zwick's report on the consolidated financial statements of the Company as of and for the years ended December 31, 2024, and December 31, 2023, contained an explanatory paragraph stating there was substantial doubt about the Company's ability to continue as a going concern.

During the two most recent fiscal years, ended December 31, 2024, and December 31, 2023, and the subsequent interim period through August 12, 2025, there were no disagreements (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions to Item 304 of Regulation S-K) with Zwick on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Zwick, would have caused Zwick to make reference to the subject matter of the disagreements in connection with its reports on the Company's consolidated financial statements for such years. Also during this time, there were no "reportable events," as defined in Item 304(a)(1)(v) of Regulation S-K, except that, for the years ended December 31, 2024, and December 31, 2023, and for each of the quarters within the years ended December 31, 2024, and 2023, management identified deficiencies in the Company's design and effectiveness of their internal control over financial reporting that were considered to be material weaknesses.

**Fees to Independent Registered Public Accounting Firm**

The following is a summary of the fees billed or expected to be billed to us by Zwick, our independent registered public accountants, for professional services rendered with respect to the fiscal year ended December 31, 2024, and December 31, 2023 :

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| | | |
|:---|:---|:---|
|  | 2024 | 2023 |
| Audit fees (1) | $146735 | $274338 |
| Audit-related fees (2) |  |  |
| Tax fees (3) |  |  |
| All other fees (4) |  | $75000 |
| &nbsp;&nbsp;&nbsp;Total | $146735 | $349338 |

---

(1) *Audit Fees*. This category includes the fees related to the audit of our annual financial statements and the review of our interim quarterly
 financial statements and services that are normally provided by our independent registered public accounting firm in connection with
 its engagements for those years. This category also includes advice on audit and accounting matters that arose during, or as a result
 of, the audit or the review of our interim financial statements.

(2) *Audit-Related Fees.* This category typically consists of assurance and related services by our independent registered public accounting firm
 that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under
 "Audit Fees." The services for the fees disclosed under this category include consents regarding equity issuances.

(3) *Tax Fees*. This category typically consists of professional services rendered by our independent registered public accounting firm
 for tax compliance and tax advice.

(4) *All Other Fees*. This category includes aggregate fees billed in each of the last two fiscal years for Zwick for products and services
 provided by such independent registered public accounting firm other than the services reported in the categories above.

**Pre-Approval Policies and Procedures**

Under the audit committee's pre-approval policies and procedures, the audit committee is required to pre-approve the audit and non-audit services performed by our independent registered public accounting firm. On an annual basis, the audit committee pre-approves a list of services that may be provided by the independent registered public accounting firm without obtaining specific pre-approval from the audit committee. In addition, the audit committee sets pre-approved fee levels for each of the listed services. Any type of service that is not included on the list of pre-approved services must be specifically approved by the audit committee or its designee. Any proposed service that is included on the list of pre-approved services but will cause the pre-approved fee level to be exceeded will also require specific pre-approval by the audit committee or its designee.

The audit committee has delegated pre-approval authority to the Audit Committee chairman and any pre-approved actions by the audit committee chairman as designee are reported to the audit committee for approval at its next scheduled meeting.

All of the services rendered by Zwick were pre-approved by the Audit Committee.

The Board considered the audit fees, audit-related fees, tax fees and other fees paid to our accountants, as disclosed above, and determined that the payment of such fees was compatible with maintaining the independence of the accountants.

**Required Vote and Board Recommendation**

The affirmative vote of a majority of the votes cast affirmatively or negatively is required for approval of the Auditor Ratification Proposal. "ABSTAIN" votes will have no effect on the outcome of this proposal. Because the ratification of the independent registered public accounting firm is considered a routine matter, your bank, broker, trustee or other nominee, as the case may be, may vote your shares without your instruction with respect to the ratification of the independent registered public accounting firm unless you instruct your them otherwise. If a bank, broker, trustee or other nominee does not exercise this authority, such failure by the broker to exercise its authority will have no effect on the results for the vote on this proposal.

**THE BOARD RECOMMENDS THAT YOU VOTE "FOR" THE RATIFICATION OF THE APPOINTMENT OF E&Y, AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR OF THE PROPOSAL UNLESS A STOCKHOLDER INDICATES OTHERWISE ON THE PROXY CARD.**

**PROPOSAL 3** **— THE PLAN AMENDMENT PROPOSAL**

The Board is seeking the approval of our stockholders of a first amendment to the NanoVibronix 2024 Long-Term Incentive Plan (the "2024 Plan"), which was adopted by the Board on October 30, 2025, subject to stockholder approval (the "Incentive Plan Amendment"). The 2024 Plan was originally approved by the Board on November 6, 2023, and by our stockholders on December 19, 2024, as a successor to the NanoVibronix 2014 Long-Term Incentive Plan (the "Prior Plan"). The 2024 Plan consists of two components, the primary plan document which governs all awards granted under the 2024 Plan, and one sub-part appendix: Israeli Appendix to the 2024 Plan (the "Israeli Appendix"), designated for the purpose of grants of stock options to participants who are, or are deemed to be, residents of the State of Israel for tax purposes. The purpose of the 2024 Plan is to enable us to remain competitive and innovative in our ability to attract and retain the services of key employees, key contractors, and outside directors.

Under the 2024 Plan as originally adopted, we initially reserved 600,000 shares (not adjusted for the Company's March 2025 Reverse Stock Split and August 2025 Reverse Stock Split (each as defined below)) of our common stock for issuance as awards under the 2024 Plan. On March 14, 2025, the Company effected a 1-for-11 reverse stock split of its common stock, after which the number of shares of common stock reserved for issuance pursuant to awards under the 2024 Plan was adjusted to 54,545 shares (the "March 2025 Reverse Stock Split"). Subsequently, on August 11, 2025, the Company effected a 1-for-10 reverse stock split of its common stock, after which the number of shares of common stock reserved for issuance pursuant to awards under the 2024 Plan was adjusted to 5,454 shares (the "August 2025 Reverse Stock Split").

As of the Record Date, there were 2,791 remaining available for future issuance as awards under the 2024 Plan. The Incentive Plan Amendment would further increase the number of shares of common stock available for issuance pursuant to awards under the 2024 Plan by an additional 1,200,000 shares, to a total of 1,205,454 shares of our common stock.

**Background and Purpose of the Proposal**

We believe that operation of the 2024 Plan is a necessary and powerful tool in enabling us to attract and retain the best available personnel for positions of substantial responsibility; to provide additional incentive to key employees, key contractors, and non-employee directors; and to promote the success of our business. The 2024 Plan is expected to provide flexibility to our compensation methods in order to adapt the compensation of such employees, contractors, and directors to a changing business environment, after giving due consideration to competitive conditions and the impact of federal tax laws. We have strived to use our 2024 Plan resources effectively and to maintain an appropriate balance between stockholder interests and the ability to recruit and retain valuable employees. However, we believe there is an insufficient number of shares remaining under our 2024 Plan to meet our current and projected needs. Accordingly, it is the judgment of the Board that the Incentive Plan Amendment is in the best interest of the Company and its stockholders. We believe that the Incentive Plan Amendment, which increases the number of shares of common stock available for issuance pursuant to awards under the 2024 Plan, reflects best practices in our industry and is appropriate to permit the grant of equity awards at expected levels for the future.

A copy of the Incentive Plan Amendment and the 2024 Plan are included as <u>Annex A</u> and <u>Annex B</u>, respectively, to this Proxy Statement. Described below is a summary of certain key provisions of the 2024 Plan, which is qualified in its entirety by reference to the full text of the 2024 Plan, as amended.

**Summary of the Proposed Incentive Plan Amendment**

The Board adopted the Incentive Plan Amendment on October 30, 2025, subject to stockholder approval, to increase the number of shares of our common stock available for issuance pursuant to awards under the 2024 Plan by an additional 1,200,000 shares, to a total of 1,205,454 shares of our common stock.

**Description of the 2024 Plan**

*Purpose*. The purpose of the 2024 Plan is to enable us to remain competitive and innovative in our ability to attract and retain the services of key employees, key contractors, and outside directors. The 2024 Plan provides for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, dividend equivalent rights, and other awards, which may be granted singly, in combination, or in tandem, and which may be paid in cash or shares of our common stock. The 2024 Plan is expected to provide flexibility to our compensation methods in order to adapt the compensation of key employees, key contractors, and outside directors to a changing business environment, after giving due consideration to competitive conditions and the impact of applicable tax laws.

 

*Effective Date and Expiration*. The 2024 Plan was originally approved by our Board on November 6, 2023, and subsequently approved by our stockholders on December 19, 2024 (the "Effective Date"). The 2024 Plan will terminate on the tenth anniversary of the Effective Date, unless sooner terminated by our Board. No award may be made under the 2024 Plan after its termination date, but awards made prior to the termination date may extend beyond that date.

*Share Authorization*. Subject to certain adjustments and to increase by any shares subject to Prior Plan Awards (defined below) that are eligible for reuse, the number of shares of our common stock that are reserved for issuance pursuant to awards under the 2024 Plan is currently 5,454 shares, of which 100% may be delivered pursuant to incentive stock options. "Prior Plan Awards" means (i) any awards under the Prior Plan (defined above) that are outstanding on the Effective Date and that, on or after the Effective Date, are forfeited, expire, or are canceled; and (ii) any shares subject to awards relating to common stock under the Prior Plan that, on or after the Effective Date, are settled in cash. Any awards outstanding under the Prior Plan as of the Effective Date will continue to be governed by the terms and conditions of the Prior Plan and the applicable award agreement. If the Incentive Plan Amendment is approved, the total number of shares that may be issued pursuant to awards will be increased by 1,200,000 shares for a total of 1,205,454 shares, 100% of which may be delivered as incentive stock options.

Shares to be issued may be made available from authorized but unissued shares of our common stock, shares held by us in our treasury, or shares purchased by us on the open market or otherwise. During the term of the 2024 Plan, we will at all times reserve and keep enough shares available to satisfy the requirements of the 2024 Plan. If an award under the 2024 Plan or any Prior Plan Award is cancelled, forfeited, or expires, in whole or in part, the shares subject to such forfeited, expired, or cancelled award may again be awarded under the 2024 Plan. In the event that previously acquired shares are delivered to us in full or partial payment of the option price for the exercise of a stock option granted under the 2024 Plan, the number of shares available for future awards under the 2024 Plan shall be reduced only by the net number of shares issued upon the exercise of the stock option or settlement of an award. Awards that may be satisfied either by the issuance of common stock or by cash or other consideration shall be counted against the maximum number of shares that may be issued under the 2024 Plan only during the period that the award is outstanding or to the extent the award is ultimately satisfied by the issuance of shares. An award will not reduce the number of shares that may be issued pursuant to the 2024 Plan if the settlement of the award will not require the issuance of shares, as, for example, a stock appreciation right that can be satisfied only by the payment of cash. Only shares forfeited back to us; shares cancelled on account of termination, expiration, or lapse of an award; shares surrendered in payment of the option price of an option; or shares withheld for payment of applicable employment taxes and/or withholding obligations resulting from the exercise of a stock option shall again be available for grant as incentive stock options under the 2024 Plan, but shall not increase the maximum number of shares described above as the maximum number of shares that may be delivered pursuant to incentive stock options.

*Limitation on Outside Director Awards.* Outside directors may not be granted awards under the 2024 Plan in any calendar year that exceed seven hundred thousand dollars ($700,000) in the aggregate (with the fair market value of any equity awards determined as of the date of grant), other than a one-time award granted to a newly appointed or elected outside director not to exceed an additional seven hundred thousand dollars ($700,000) in the aggregate; provided, however, that these limits shall not apply to any awards made pursuant to a deferred compensation arrangement in lieu of all or a portion of cash retainers otherwise payable to an outside director.

*Administration*. The 2024 Plan is administered by the compensation committee of our Board (the "Committee"). At any time there is no Committee to administer the 2024 Plan, any reference to the Committee is a reference to the Board. The Committee will determine the persons to whom awards are to be made; determine the type, size, and terms of awards; interpret the 2024 Plan; establish and revise rules and regulations relating to the 2024 Plan and any sub-plans, including, without limitation, any sub-plans for awards made to participants who are not residents of the United States; establish performance goals for awards and certify the extent of their achievement; and make any other determinations that it believes necessary for the administration of the 2024 Plan. The Committee may delegate certain duties to one or more of our officers as provided in the 2024 Plan.

 

*Eligibility*. Employees (including any employee who is also a director or an officer), contractors, and outside directors of us or our subsidiaries whose judgment, initiative, and efforts contributed to or may be expected to contribute to our successful performance are eligible to participate in the 2024 Plan. As of the Record Date, we had _ employees, _ contractors, and _ non-employee directors who would be eligible for awards under the 2024 Plan.

*Stock Options*. The Committee may grant either incentive stock options ("ISOs") qualifying under Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") or nonqualified stock options, provided that only employees of us and our subsidiaries (excluding subsidiaries that are not corporations) are eligible to receive ISOs. Stock options may not be granted with an option price less than 100% of the fair market value of a share of common stock on the date the stock option is granted. If an ISO is granted to an employee who owns or is deemed to own more than 10% of the combined voting power of all classes of our stock (or any parent or subsidiary), the option price shall be at least 110% of the fair market value of a share of common stock on the date of grant. The Committee will determine the terms of each stock option at the time of grant, including, without limitation, the methods by or forms in which shares will be delivered to participants. The maximum term of each option, the times at which each option will be exercisable, and provisions requiring forfeiture of unexercised options at or following termination of employment or service generally are fixed by the Committee, except that the Committee may not grant stock options with a term exceeding 10 years or, in the case of an ISO granted to an employee who owns or is deemed to own more than 10% of the combined voting power of all classes of our stock (or any parent or subsidiary), a term exceeding five years.

Recipients of stock options may pay the option price (i) in cash, check, bank draft, or money order payable to the order of the Company; (ii) by delivering to us shares of common stock (included restricted stock) already owned by the participant having a fair market value equal to the aggregate option price and that the participant has not acquired from us within six months prior to the exercise date; (iii) by delivering to us or our designated agent an executed irrevocable option exercise form together with irrevocable instructions from the participant to a broker or dealer, reasonably acceptable to us, to sell certain of the shares purchased upon the exercise of the option or to pledge such shares to the broker as collateral for a loan from the broker and to deliver to us the amount of sale or loan proceeds necessary to pay the purchase price; and (iv) by any other form of valid consideration that is acceptable to the Committee in its sole discretion.

*Stock Appreciation Rights*. The Committee is authorized to grant stock appreciation rights ("SARs") as a stand-alone award, or freestanding SARs, or in conjunction with options granted under the 2024 Plan, or tandem SARs. SARs entitle a participant to receive an amount equal to the excess of the fair market value of a share of common stock on the date of exercise over the fair market value of a share of our common stock on the date of grant. The grant price of a SAR cannot be less than 100% of the fair market value of a share of our common stock on the date of grant. The Committee will determine the terms of each SAR at the time of the grant, including, without limitation, the methods by or forms in which shares will be delivered to participants. The maximum term of each SAR, the times at which each SAR will be exercisable, and provisions requiring forfeiture of unexercised SARs at or following termination of employment or service generally are fixed by the Committee, except that no freestanding SAR may have a term exceeding 10 years and no tandem SAR may have a term exceeding the term of the option granted in conjunction with the tandem SAR. Distributions to the recipient may be made in common stock, cash, or a combination of both as determined by the Committee.

*Restricted Stock and Restricted Stock Units*. The Committee is authorized to grant restricted stock and restricted stock units. Restricted stock consists of shares of our common stock that may not be sold, assigned, transferred, pledged, hypothecated, encumbered, or otherwise disposed of, and that may be forfeited in the event of certain terminations of employment or service, prior to the end of a restricted period as specified by the Committee. Restricted stock units are the right to receive shares of common stock at a future date in accordance with the terms of such grant upon the attainment of certain conditions specified by the Committee, which include a substantial risk of forfeiture and restrictions on their sale or other transfer by the participant. The Committee determines the eligible participants to whom, and the time or times at which, grants of restricted stock or restricted stock units will be made; the number of shares or units to be granted; the price to be paid, if any; the time or times within which the shares covered by such grants will be subject to forfeiture; the time or times at which the restrictions will terminate; and all other terms and conditions of the grants. Restrictions or conditions could include, but are not limited to, the attainment of performance goals (as described below), continuous service with us, the passage of time, or other restrictions or conditions. Except as otherwise provided in the 2024 Plan or the applicable award agreement, a participant shall have, with respect to shares of restricted stock, all of the rights of a stockholder of the Company holding the class of common stock that is the subject of the restricted stock, including, if applicable, the right to vote the common stock and the right to receive any dividends thereon.

 

*Dividend Equivalent Rights*. The Committee is authorized to grant a dividend equivalent right to any participant, either as a component of another award or as a separate award, conferring on the participant the right to receive credits based on the cash dividends that would have been paid on the shares of common stock specified in the award as if such shares were held by the participant. The terms and conditions of the dividend equivalent right shall be specified by the grant. Dividend equivalents credited to the holder of a dividend equivalent right may be paid currently or may be deemed to be reinvested in additional shares. Any such reinvestment shall be at the fair market value at the time thereof. A dividend equivalent right may be settled in cash, shares, or a combination thereof.

*Performance Awards*. The Committee may grant performance awards payable in cash, shares of common stock, other consideration, or a combination thereof at the end of a specified performance period. Payment will be contingent upon achieving pre-established performance goals (as discussed below) by the end of the performance period. The Committee will determine the length of the performance period, the maximum payment value of an award, and the minimum performance goals required before payment will be made, so long as such provisions are not inconsistent with the terms of the 2024 Plan, and to the extent an award is subject to Section 409A of the Code, are in compliance with the applicable requirements of Section 409A of the Code and any applicable regulations or guidance issued thereunder. In certain circumstances, the Committee may, in its discretion, determine that the amount payable with respect to certain performance awards will be reduced from the amount of any potential awards, if the Committee determines, in its sole discretion, that the established performance measures or objectives are no longer suitable because of a change in our business, operations, corporate structure, or for other reasons that the Committee deemed satisfactory, in which case, the Committee may modify the performance measures or objectives and/or the performance period as the Committee deems appropriate in its sole discretion.

*Performance Goals*. Awards under the 2024 Plan may be made subject to the attainment of performance goals relating to one or more business criteria which, where applicable, shall consist of one or more or any combination of the following criteria (the "Performance Criteria"): cash flow; cost; revenues; sales; ratio of debt to debt plus equity; net borrowing, credit quality, or debt ratings; profit before tax; economic profit; earnings before interest and taxes; earnings before interest, taxes, depreciation, and amortization; gross margin; earnings per share (whether on a pre-tax, after-tax, operational, or other basis); operating earnings; capital expenditures; expenses or expense levels; economic value added; ratio of operating earnings to capital spending or any other operating ratios; free cash flow; net profit; net sales; net asset value per share; the accomplishment of mergers, acquisitions, dispositions, public offerings, or similar extraordinary business transactions; sales growth; price of the shares; return on assets, equity, or stockholders' equity; market share; inventory levels, inventory turn, or shrinkage; or total return to stockholders. Any Performance Criteria may be used to measure our performance as a whole or any of our business units and may be measured relative to a peer group or index. Any Performance Criteria may include or exclude (i) events that are of an unusual nature or indicate infrequency of occurrence; (ii) gains or losses on the disposition of a business; (iii) changes in tax or accounting regulations or laws; (iv) the effect of a merger or acquisition, as identified in our quarterly and annual earnings releases; or (v) other similar occurrences. In all other respects, Performance Criteria shall be calculated in accordance with our financial statements, under generally accepted accounting principles, or under a methodology established by the Committee prior to the issuance of an award, which is consistently applied and identified in the Company's audited financial statements, including in footnotes, or the Compensation Discussion and Analysis section of the Company's annual report.

*Israeli Awards*

For persons subject to the Israeli Income Tax Ordinance [New Version], 5721-1961 (the "Ordinance"), the Committee is authorized to grant stock options pursuant to the terms of the Israeli Appendix. The Committee may grant to participants who are employees and office holders options under Section 102 of the Ordinance ("Section 102 Options") and to Controlling Shareholders (as defined in the Israeli Appendix) and outside participants options under Section 3(i) of the Ordinance ("Section 3(i) Options"). The Committee may designate Section 102 Options as "Approved 102 Options," for which the options and shares upon exercise must be held in trust and granted through a trustee, or as "Unapproved 102 Options," for which the options and shares upon exercise do not have to be held in trust. As described further below, the determination of the Committee as to the taxation route of the stock options, the type of option, and duration of time the option and shares upon exercise are held in trust will determine the tax consequences to the participant. Of the Approved 102 Options, the Committee may grant options as "Ordinary Income Options," for which the options and shares upon exercise must be held in trust for twelve (12) months from the date of grant, or as "Capital Gain Options," for which the options and shares upon exercise must be held in trust for twenty-four (24) months from the date of grant. If the requirements of the Approved 102 Options are not met, the options are regarded as Unapproved 102 Options. Section 3(i) Options and the shares upon exercise may, but need not, be held in trust as well, depending upon the agreement between the Committee, the participant, and the trustee of the trust. Israeli participants can be granted other types of options under the 2024 Plan, but some of them will require a pre-ruling from the Israeli Tax Authorities in order to be deemed Approved 102 Options.

 

*Other Awards*. The Committee may grant other forms of awards, based upon, payable in, or that otherwise relate to, in whole or in part, shares of common stock, if the Committee determines that such other form of award is consistent with the purpose and restrictions of the 2024 Plan. The terms and conditions of such other form of award shall be specified by the grant. Such other awards may be granted for no cash consideration, for such minimum consideration as may be required by applicable law, or for such other consideration as may be specified by the grant.

*Vesting, Forfeiture, Recoupment and Assignment*. The Committee, in its sole discretion, may determine that an award will be immediately vested in whole or in part, or that all or any portion may not be vested until a date, or dates, subsequent to its date of grant, or until the occurrence of one or more specified events, subject in any case to the terms of the 2024 Plan. If the Committee imposes conditions upon vesting, then, except as otherwise provided below, subsequent to the date of grant, the Committee may, in its sole discretion, accelerate the date on which all or any portion of the award may be vested.

The Committee may impose on any award at the time of grant or thereafter, such additional terms and conditions as the Committee determines, including terms requiring forfeiture of awards in the event of a participant's termination of service. The Committee will specify the circumstances on which performance awards may be forfeited in the event of a termination of service by a participant prior to the end of a performance period or settlement of awards. Except as otherwise determined by the Committee, restricted stock will be forfeited upon a participant's termination of service during the applicable restriction period. In addition, we may recoup all or any portion of any shares or cash paid to a participant in connection with any award in the event of a restatement of our financial statements as set forth in our clawback policy, as such policy may be approved or modified by our Board from time to time.

Awards granted under the 2024 Plan generally are not assignable or transferable except by will or by the laws of descent and distribution, except that the Committee may, in its discretion and pursuant to the terms of an award agreement, permit transfers of certain award of nonqualified stock options or SARs to (i) the spouse (or former spouse), children, or grandchildren of the participant ("Immediate Family Members"); (ii) a trust or trusts for the exclusive benefit of such Immediate Family Members; (iii) a partnership in which the only partners are (x) such Immediate Family Members, and/or (y) entities which are controlled by Immediate Family Members; (iv) an entity exempt from federal income tax pursuant to Section 501(c)(3) of the Code or any successor provision; or (v) a split interest trust or pooled income fund described in Section 2522(c)(2) of the Code or any successor provision, provided that (x) there shall be no consideration for any such transfer, (y) the applicable award agreement pursuant to which such award is granted must be approved by the Committee and must expressly provide for such transferability, and (z) subsequent transfers of transferred awards shall be prohibited except those by will or the laws of descent and distribution.

*Adjustments Upon Changes in Capitalization*. In the event that any dividend or other distribution, recapitalization, stock split, reverse stock split, rights offering, reorganization, merger, consolidation, split-up, spin-off, split-off, combination, subdivision, repurchase, or exchange of shares of common stock or other securities of the Company, issuance of warrants or other rights to purchase shares of common stock or other securities of the Company, or other similar corporate transaction or event affects the fair value of an award, then the Committee shall adjust any or all of the following so that the fair value of the award immediately after the transaction or event is equal to the fair value of the award immediately prior to the transaction or event (i) the number of shares and type of common stock (or the securities or property) which thereafter may be made the subject of awards; (ii) the number of shares and type of common stock (or other securities or property) subject to outstanding awards; (iii) the number of shares and type of common stock (or other securities or property) specified as the annual per-participant limitation under the 2024 Plan; (iv) the option price of each outstanding award; (v) the amount, if any, we pay for forfeited shares in accordance with the terms of the 2024 Plan; and (vi) the number of or exercise price of shares then subject to outstanding SARs previously granted and unexercised under the 2024 Plan to the end that the same proportion of our issued and outstanding shares of common stock in each instance shall remain subject to exercise at the same aggregate exercise price; provided, however, that the number of shares of common stock (or other securities or property) subject to any award shall always be a whole number. Notwithstanding the foregoing, no such adjustment shall be made or authorized to the extent that such adjustment would cause the 2024 Plan or any stock option to violate Section 422 of the Code or Section 409A of the Code. All such adjustments must be made in accordance with the rules of any securities exchange, stock market, or stock quotation system to which we are subject.

 

*Amendment or Discontinuance of the 2024 Plan*. The Board may, at any time and from time to time, without the consent of participants, alter, amend, revise, suspend, or discontinue the 2024 Plan in whole or in part; provided, however, that (i) no amendment that requires stockholder approval in order for the 2024 Plan and any awards under the 2024 Plan to continue to comply with Sections 421 and 422 of the Code (including any successors to such sections, or other applicable law) or any applicable requirements of any securities exchange or inter-dealer quotation system on which our stock is listed or traded, shall be effective unless such amendment is approved by the requisite vote of our stockholders entitled to vote on the amendment; and (ii) unless required by law, no action by the Board regarding amendment or discontinuance of the 2024 Plan may adversely affect any rights of any participants or obligations of us to any participants with respect to any outstanding awards under the 2024 Plan without the consent of the affected participant.

**U.S. Federal Income Tax Consequences**

The following is a brief summary of certain U.S. federal income tax consequences relating to the transactions described under the 2024 Plan as set forth below. This summary does not purport to address all aspects of U.S. federal income taxation and does not describe state, local, or foreign tax consequences. This discussion is based upon provisions of the Code and the Treasury Regulations issued thereunder, and judicial and administrative interpretations under the Code and Treasury Regulations, all as in effect as of the date hereof, and all of which are subject to change (possibly on a retroactive basis) or different interpretation.

*Law Affecting Deferred Compensation*. In 2004, Section 409A was added to the Code to regulate all types of deferred compensation. If the requirements of Section 409A of the Code are not satisfied, deferred compensation and earnings thereon will be subject to tax as it vests, plus an interest charge at the underpayment rate plus 1% and a 20% penalty tax. Certain performance awards, stock options, stock appreciation rights, restricted stock units, and certain types of restricted stock are subject to Section 409A of the Code.

*Incentive Stock Options*. A participant will not recognize income at the time an ISO is granted. When a participant exercises an ISO, a participant also generally will not be required to recognize income (either as ordinary income or capital gain). However, to the extent that the fair market value (determined as of the date of grant) of the shares with respect to which the participant's ISOs are exercisable for the first time during any year exceeds $100,000, the ISOs for the shares over $100,000 will be treated as nonqualified stock options, and not ISOs, for U.S. federal tax purposes, and the participant will recognize income as if the ISOs were nonqualified stock options. In addition to the foregoing, if the fair market value of the shares received upon exercise of an ISO exceeds the exercise price, then the excess may be deemed a tax preference adjustment for purposes of the U.S. federal alternative minimum tax calculation. The federal alternative minimum tax may produce significant tax repercussions depending upon the participant's particular tax status.

The tax treatment of any shares acquired by exercise of an ISO will depend upon whether the participant disposes of his or her shares prior to the later of: (i) two years after the date the ISO was granted or (ii) one year after the shares were transferred to the participant upon exercise of the ISO (referred to as the "Holding Period"). If a participant disposes of shares acquired by exercise of an ISO after the expiration of the Holding Period, any amount received in excess of the participant's tax basis for such shares will be treated as a short-term or long-term capital gain, depending upon how long the participant has held the shares. If the amount received is less than the participant's tax basis for such shares, the loss will be treated as a short-term or long-term capital loss, depending upon how long the participant has held the shares. If the participant disposes of shares acquired by exercise of an ISO prior to the expiration of the Holding Period, the disposition will be considered a "disqualifying disposition." If the amount received for the shares is greater than the fair market value of the shares on the exercise date, then the difference between the ISO's exercise price and the fair market value of the shares at the time of exercise will be treated as ordinary income for the tax year in which the "disqualifying disposition" occurs. The participant's basis in the shares will be increased by an amount equal to the amount treated as ordinary income due to such "disqualifying disposition." In addition, the amount received in such "disqualifying disposition" over the participant's increased basis in the shares will be treated as capital gain. However, if the price received for shares acquired by exercise of an ISO is less than the fair market value of the shares on the exercise date and the disposition is a transaction in which the participant sustains a loss which otherwise would be recognizable under the Code, then the amount of ordinary income that the participant will recognize is the excess, if any, of the amount realized on the "disqualifying disposition" over the basis of the shares.

 

 

*Nonqualified Stock Options*. A participant generally will not recognize income at the time a nonqualified stock option is granted. When a participant exercises a nonqualified stock option, the difference between the option price and any higher market value of the shares of common stock on the date of exercise will be treated as compensation taxable as ordinary income to the participant. The participant's tax basis for the shares acquired under a nonqualified stock option will be equal to the option price paid for such shares, plus any amounts included in the participant's income as compensation. When a participant disposes of shares acquired by exercise of a nonqualified stock option, any amount received in excess of the participant's tax basis for such shares will be treated as short-term or long-term capital gain, depending upon how long the participant has held the shares. If the amount received is less than the participant's tax basis for such shares, the loss will be treated as a short-term or long-term capital loss, depending upon how long the participant has held the shares.

*Special Rule if Option Price is Paid for in Shares*. If a participant pays the option price of a nonqualified stock option with previously-owned shares of our common stock and the transaction is not a disqualifying disposition of shares previously acquired under an ISO, the shares received equal to the number of shares surrendered are treated as having been received in a tax-free exchange. The participant's tax basis and holding period for these shares received will be equal to the participant's tax basis and holding period for the shares surrendered. The shares received in excess of the number of shares surrendered will be treated as compensation taxable as ordinary income to the participant to the extent of their fair market value. The participant's tax basis in these shares will be equal to their fair market value on the date of exercise, and the participant's holding period for such shares will begin on the date of exercise.

If the use of previously acquired shares to pay the exercise price of a nonqualified stock option constitutes a disqualifying disposition of shares previously acquired under an ISO, the participant will have ordinary income as a result of the disqualifying disposition in an amount equal to the excess of the fair market value of the shares surrendered, determined at the time such shares were originally acquired on exercise of the ISO, over the aggregate option price paid for such shares. As discussed above, a disqualifying disposition of shares previously acquired under an ISO occurs when the participant disposes of such shares before the end of the Holding Period. The other tax results from paying the exercise price with previously-owned shares are as described above, except that the participant's tax basis in the shares that are treated as having been received in a tax-free exchange will be increased by the amount of ordinary income recognized by the participant as a result of the disqualifying disposition.

*Restricted Stock*. A participant who receives restricted stock generally will recognize as ordinary income the excess, if any, of the fair market value of the shares granted as restricted stock at such time as the shares are no longer subject to forfeiture or restrictions, over the amount paid, if any, by the participant for such shares. However, a participant who receives restricted stock may make an election under Section 83(b) of the Code within 30 days of the date of transfer of the shares to recognize ordinary income on the date of transfer of the shares equal to the excess of the fair market value of such shares (determined without regard to the restrictions on such shares) over the purchase price, if any, of such shares. If a participant does not make an election under Section 83(b) of the Code, then the participant will recognize as ordinary income any dividends received with respect to such shares. At the time of sale of such shares, any gain or loss realized by the participant will be treated as either short-term or long-term capital gain (or loss) depending on the holding period. For purposes of determining any gain or loss realized, the participant's tax basis will be the amount previously taxable as ordinary income, plus the purchase price paid by the participant, if any, for such shares.

*Stock Appreciation Rights*. Generally, a participant who receives a stand-alone SAR will not recognize taxable income at the time the stand-alone SAR is granted, provided that the SAR is exempt from or complies with Section 409A of the Code. If an employee receives the appreciation inherent in the SARs in cash, the cash will be taxed as ordinary income to the recipient at the time it is received. If a recipient receives the appreciation inherent in the SARs in stock, the spread between the then current market value and the grant price, if any, will be taxed as ordinary income to the employee at the time it is received. In general, there will be no federal income tax deduction allowed to us upon the grant or termination of SARs. However, upon the exercise of a SAR, we will be entitled to a deduction equal to the amount of ordinary income the recipient is required to recognize as a result of the exercise.

 

*Other Awards*. In the case of an award of restricted stock units, performance awards, dividend equivalent rights, or other stock or cash awards, the recipient will generally recognize ordinary income in an amount equal to any cash received and the fair market value of any shares received on the date of payment or delivery, provided that the award is exempt from or complies with Section 409A of the Code. In that taxable year, we will receive a federal income tax deduction in an amount equal to the ordinary income which the participant has recognized.

*Federal Tax Withholding*. Any ordinary income realized by a participant upon the exercise of an award under the 2024 Plan is subject to withholding of U.S. federal, state, and local income tax and to withholding of the participant's share of tax under the Federal Insurance Contribution Act and the Federal Unemployment Tax Act. To satisfy our federal income tax withholding requirements, we will have the right to require that, as a condition to delivery of any certificate for shares of common stock or the registration of the shares in the participant's name, the participant remit to us an amount sufficient to satisfy the withholding requirements. Alternatively, we may withhold a portion of the shares (valued at fair market value) that otherwise would be issued to the participant to satisfy all or part of the withholding tax obligations or may, if we consent, accept delivery of shares (that the participant has not acquired from us within six months prior to the date of exercise) with an aggregate fair market value that equals or exceeds the required tax withholding payment. Withholding does not represent an increase in the participant's total income tax obligation, since it is fully credited toward his or her tax liability for the year. Additionally, withholding does not affect the participant's tax basis in the shares. Compensation income realized and tax withheld will be reflected on Forms W-2 supplied by us to employees by January 31 of the succeeding year. Deferred compensation that is subject to Section 409A of the Code will be subject to certain federal income tax withholding and reporting requirements.

*Tax Consequences to Us*. To the extent that a participant recognizes ordinary income in the circumstances described above, we will be entitled to a corresponding deduction provided that, among other things, the income meets the test of reasonableness, is an ordinary and necessary business expense, is not an "excess parachute payment" within the meaning of Section 280G of the Code, and is not disallowed by the $1,000,000 limitation on certain executive compensation under Section 162(m) of the Code. While deductibility of executive compensation for federal income tax purposes is among the factors the Board and Committee consider when structuring executive compensation arrangements, it is not the sole or primary factor considered. We retain the flexibility to authorize compensation that may not be deductible if we believe it is in the best interests of the Company.

*Million Dollar Deduction Limit and Other Tax Matters*. We may not deduct compensation of more than $1,000,000 that is paid to "covered employees" (as defined in Section 162(m) of the Code), which include (i) an individual (or, in certain circumstances, his or her beneficiaries) who, at any time during the taxable year, is either our principal executive officer or principal financial officer; (ii) an individual who is among our three highest compensated officers for the taxable year (other than an individual who was either our principal executive officer or principal financial officer at any time during the taxable year); or (iii) anyone who was a covered employee for purposes of Section 162(m) of the Code for any tax year beginning on or after January 1, 2018. This limitation on deductions (x) only applies to compensation paid by a publicly-traded corporation (and not compensation paid by non-corporate entities) and (z) may not apply to certain types of compensation, such as qualified performance-based compensation that is payable pursuant to a written, binding contract that was in effect as of November 2, 2018, so long as the contract is not materially modified after that date.

If an individual's rights under the 2024 Plan are accelerated as a result of a change in control and the individual is a "disqualified individual" under Section 280G of the Code, the value of any such accelerated rights received by such individual may be included in determining whether or not such individual has received an "excess parachute payment" under Section 280G of the Code, which could result in (i) the imposition of a 20% federal excise tax (in addition to federal income tax) payable by the individual on the value of such accelerated rights, and (ii) the loss by us of a compensation deduction.

 ****

***Israeli Income Tax Consequences***

The following description of the Israel income tax consequences of awards under Israeli Appendix of the 2024 Plan is general and does not purport to be complete.

Pursuant to Section 102 of the Ordinance, which came into effect on January 1, 2003, options, shares, and other securities (including Restricted Shares) (together "Options") may be granted through a trustee (*i.e.*, Approved 102 Options) or not through a trustee (*i.e.*, Unapproved 102 Options). The following is a brief discussion of the tax consequences applicable to both types of Section 102 Options.

*Grant Through a Trustee*

Options granted through a trustee and held in trust are made either through the capital gains tax track (*i.e.*, Capital Gains Options) or the compensation income tax track (*i.e.*, Ordinary Income Options). Capital Gains Options and Ordinary Income Options can be granted only through a trustee. Under the capital gains tax track, the Capital Gains Options and the underlying shares have to be held in trust for at least twenty-four (24) months from their date of grant. Any gain made on the sale of shares following the twenty-four (24) month period is subject to a capital gains tax at a current rate of 25%; the amount of gain is the difference between the sales proceeds from the sale of shares and the exercise price paid for such shares. Generally, Capital Gains Options are not taxed on their date of grant. However, in the event that the exercise price of the options is less than the fair market value of the Company's common stock on the date of grant, a portion of the gain will be deemed compensation income, taxable at the personal marginal tax rate of the participant. The payment of such tax is made at the time of exercise of the Capital Gains Options. The portion of the gain that is deemed compensation income is the difference between the average value of the shares as listed on the stock exchange during the thirty (30) day period prior to the date of grant and the exercise price of the option. If the Capital Gains Options or the underlying shares of such options are sold by the trustee or transferred from the trustee to the beneficiary before the end of the twenty-four (24) month period, any resulting income (cash or equivalent) is taxed as compensation income. If the options have not been exercised and transferred from the trustee to the beneficiary, the taxable amount of income is the value of the option. If the options have been exercised, the taxable amount of income is the difference between the aggregate fair market value of the shares at the time of such sale or transfer and the aggregate exercise price paid for such shares.

Under the compensation income tax track, the Ordinary Income Options and the underlying shares have to be held in trust for at least twelve (12) months from their date of grant. Any gain made on the sale of shares is subject to compensation income tax at the personal marginal tax rate of the respective participant; the amount of gain is the difference between the sales proceeds from the sale of shares and the exercise price paid for such shares. Ordinary Income Options are not taxed on their date of grant, but rather when the options or the underlying shares of such options are sold by the trustee or transferred from the trustee to the beneficiary. At such time, if the options have not been exercised, the taxable amount of income is value of the Option. If the Options have been exercised, the taxable amount of income is the difference between the aggregate fair market value of the shares at the time of such sale or transfer and the aggregate exercise price paid for such shares.

A corporate tax deduction is available for the employer in the tax year in which tax is withheld. The deductible amount is equal to any amount included by a participant as compensation income, except when a participant is granted Capital Gains Options, including in the event that such Capital Gains Options or the underlying shares of such options are sold by the trustee or transferred from the trustee to the beneficiary before the end of the applicable twenty-four (24) month period. In such event, any resulting income to the participant is deemed to be compensation income for tax purposes, but there would be no corresponding corporate tax deduction available to the employer.

*Grant Not Through a Trustee*

In the case of Options not made through a trustee, if the shares are non-marketable securities, the Option will not be subject to tax at the date of grant of the option or the exercise of the Option. However, ordinary income tax will be payable upon the sale of the shares acquired upon exercise of the Option. The taxable amount will be the sales proceeds less the aggregate exercise price paid by the participant. If the shares covered by the option have a market value, then the value of the Option is treated as compensation income, and subject to tax at the date of grant. There is no tax upon the exercise of the Option. However, capital gains tax will be payable on the sale of the shares upon exercise of the Option. The taxable amount will be the sales proceeds, less the value that was taxed at the date of grant and the aggregate exercise price paid by the participant.

 

*Grant of Section 3(i) Options*

Options under Section 3(i) of the Ordinance may be granted to Controlling Shareholders, consultants, and controlling stockholders (which are excluded from the term employees under Section 102 of the Ordinance). Grants of Options for shares which are non-marketable are not taxed under the income tax rules on the date of grant, but such event creates VAT liability. However, they are subject to tax at the time of exercise at the ordinary income tax rate, and at the day such shares are sold at the capital gains tax rate. The difference between the fair market value of the shares at the time of exercise and the exercise price is taxed at the ordinary income tax rate. Any gain above such value at the time of sale of the shares is taxed at the capital gains rate. Grants of Options for shares which have a market value are subject to tax on the date of grant, exercise of the Option, and the sale of the shares. The value of the Option is taxed on the date of grant at the ordinary income tax rate. The difference between the fair market value of the shares at the time of exercise and the sum of the exercise price and the amounts previously taxed at grant, is taxed at the ordinary income tax rate. Any gain above such value at the time of sale of the shares is taxed at the capital gains rate.

*Other Stock Incentives*

All other awards under the Israeli Appendix need tax ruling from the Israeli Tax Authority for the postponement of the tax event arising from the issuance thereof. Otherwise, there is an immediate tax event.

**Interest of Directors and Executive Officers**

All members of our Board and all of our executive officers are eligible for awards under the 2024 Plan and, thus, have a personal interest in the approval of the Incentive Plan Amendment.

**New Plan Benefits**

With respect to the increased number of shares reserved under the 2024 Plan pursuant to the Incentive Plan Amendment, we cannot currently determine the benefits or number of shares subject to awards that may be granted in the future to eligible participants under the 2024 Plan because the grant of awards and terms of such awards are to be determined in the sole discretion of the Committee.

The fair market value of our common stock is $5.76 per share based on the closing price of our common stock on Record Date.

**Vote Required**

The affirmative vote of a majority of the votes cast affirmatively or negatively is required for the approval of the Plan Amendment Proposal. "ABSTAIN" votes will have no effect on the results of the vote on this proposal. Brokerage firms do not have authority to vote customers' unvoted shares held by the firms in street name on this proposal. If your shares are held by a broker and you do not give the broker specific instructions on how to vote your shares, your broker may not vote your shares at its discretion. Broker non-votes will have no effect on the results of the vote on this proposal.

**THE BOARD RECOMMENDS THAT YOU VOTE "FOR" THE PLAN AMENDMENT PROPOSAL AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR OF THE PROPOSAL UNLESS A STOCKHOLDER INDICATES OTHERWISE ON THE PROXY CARD.**

**PROPOSAL 4** **— THE ISSUANCE PROPOSAL** 

**The Private Placement**

On July 18, 2025, we entered into a Securities Purchase Agreement (the "Purchase Agreement") with certain accredited investors (the "Investors"), pursuant to which we agreed to sell to the Investors (i) an aggregate of 8,889 shares of the Company's newly-designated Series H Convertible Preferred Stock, with a par value of $0.001 per share and a stated value of $1,000 per share (the "Series H Preferred Stock"), convertible into up to 1,268,046 shares of our common stock at the current Conversion Price (as defined herein) of $7.01 per share (the "Conversion Shares") and (ii) warrants (the "Warrants") to acquire up to an aggregate of 467,836 shares of common stock (the "Warrant Shares") at an initial exercise price of $2.25, which exercise price was subsequently adjusted to $22.50 after giving effect to the August 2025 Reverse Stock Split (the "Private Placement"). Additionally pursuant to the terms of the Certificate of Designations for the Series H Preferred Stock (the "Certificate of Designations"), the holders of the Series H Preferred Stock are entitled to dividends on the shares of Series H Preferred Stock at a rate of 9% per annum on the stated value of the Series H Preferred Stock, payable in shares of common stock (the "Dividend Shares")

The closing of the Private Placement occurred on July 22, 2025 (the "Closing Date"). We received total gross proceeds of approximately $8.8 million from the Private Placement.

To the extent the number of shares of common stock issued in connection with the Private Placement is greater than anticipated, the market price of our common stock could decline further. The Conversion Shares, the Warrant Shares and the Dividend Shares are collectively referred to as the "Underlying Shares."

Nasdaq Listing Rule 5635 requires that a listed company seek stockholder approval in certain circumstances, including prior to the issuance, in a transaction other than a public offering, of 20% or more of the Company's outstanding Common Stock or voting power outstanding before the issuance at a price that is less than the lower of (i) the Nasdaq Official Closing Price (as reflected on Nasdaq.com) immediately preceding the signing of the binding agreement in connection with such transaction or (ii) the average Nasdaq Official Closing Price of the Common Stock (as reflected on Nasdaq.com) for the five trading days immediately preceding the signing of such binding agreement (the "Minimum Price"). In connection with the Private Placement, we agreed to seek approval by our stockholders for the issuance of the Underlying Shares. As of the date of this proxy statement, the shares of Series H Preferred Stock are convertible into up to 1,268,046 shares of our common stock at the current conversion price of $7.01 per share, and the Warrants are exercisable into up to an aggregate of 467,836 shares of our common stock at an exercise price equal to $22.50 per share (after giving effect to the August 2025 Reverse Stock Split).

In connection with the Private Placement, we agreed to seek approval by our stockholders for the issuance of the Underlying Shares.

***Reasons for the Private Placement***

As of June 30, 2025, our cash and cash equivalents totaled approximately $4.0 million. Subsequent to June 30, 2025, our Board determined that it was necessary to raise additional funds for general corporate purposes. We believe that the Private Placement, which yielded aggregate gross proceeds of approximately $8.8 million, was necessary in light of our cash and funding requirements. In addition, at the time of the Private Placement, our Board considered numerous alternatives to the transactions, none of which proved to be feasible or, in the opinion of our Board, would have resulted in aggregate terms equivalent to, or more favorable than, the terms obtained in the Private Placement.

***Securities Purchase Agreement***

The Purchase Agreement obligates us to indemnify the applicable Investors and various related parties for certain losses including those resulting from (i) any misrepresentation or breach of any representation or warranty made by us or any subsidiary in any of the applicable transaction documents, (ii) any breach of any covenant, agreement or obligation of us or any subsidiary contained in any of the applicable transaction documents, and (iii) certain claims by third parties.

Pursuant to the terms of the Purchase Agreement, we agreed to hold a stockholder meeting to solicit our stockholders' affirmative vote for approval of our issuance of the Underlying Shares in accordance with applicable law and the rules and regulations of the Nasdaq Stock Market, LLC (the "Stockholder Approval"), and to use our reasonable best efforts to obtain such Stockholder Approval. If we do not obtain Stockholder Approval at the first meeting, we agreed to call a meeting every four months thereafter to seek Stockholder Approval until the earlier of the date Stockholder Approval is obtained or the Series H Preferred Stock is no longer outstanding. The Issuance Proposal is intended to fulfill this covenant.

The Purchase Agreement additionally contains certain representations and warranties, covenants and indemnification provisions customary for similar transactions, including but not limited to, the following covenants: (A) from the date of the Purchase Agreement until ninety (90) days after the date of Stockholder Approval, neither the Company nor any Subsidiary (i) shall issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of common stock or common stock equivalents or (ii) file any registration statement or any amendment or supplement thereto, in each case other than as contemplated pursuant to the Purchase Agreement, (B) from the date of the Purchase Agreement until the one year anniversary of the Closing Date, the Company shall be prohibited from effecting or entering into an agreement to effect any issuance by the Company or any of its Subsidiaries of common stock or common stock equivalents (or a combination of units thereof) involving a Variable Rate Transaction (as defined in the Purchase Agreement), and (C) from the date of the Purchase Agreement until the date that is the 12 month anniversary of the later of the Effective Date (as defined in the Purchase Agreement") or the date of Stockholder Approval, upon any issuance by the Company or any of its Subsidiaries of common stock or common stock equivalents for cash consideration, indebtedness or a combination of units thereof (a "Subsequent Financing"), each purchaser in the Private Placement shall have the right to participate in up to an amount of the Subsequent Financing equal to 50% of the Subsequent Financing on the same terms, conditions and price provided for in the Subsequent Financing.

Pursuant to the terms of the Purchase Agreement, we also agreed to issue 2,222 shares of Series H Preferred Stock with a total stated value of $2,222,222 in a second closing. Additionally, pursuant to the terms of the Purchase Agreement, we agreed that during the period ending 36 months from the effective date of the registration statement registering the resale of the shares of common stock underlying the Series H Preferred Stock and the Warrants, the Investor shall have the right, but no obligation, upon notice us from time to time, to purchase up to an aggregate of $44,000,000 stated value (representing 44,000 shares of Series H Preferred Stock and $39,600,000 of subscription amount) of additional Series H Preferred Stock, which shall have identical terms to the Series H Preferred Stock issued at the initial closing, except that the initial conversion price of such additional shares of Series H Preferred Stock shall be equal to 85% of the arithmetic average of the three (3) lowest VWAPs during the ten trading days prior to the date of such investor's exercise of such right.

***The Series H Preferred Stock***

The terms of the Series H Preferred Stock are set forth in the Certificate of Designations, which was filed with the Secretary of State for the State of Delaware on July 18, 2025, prior to the closing of the Private Placement. The form of Certificate of Designations was filed as Exhibit 3.1 to the Company's Current Report on Form 8-K, filed with the SEC on July 22, 2025, and is incorporated herein by reference.

The shares of Series H Preferred Stock were initially convertible into the Conversion Shares at the election of the holder at any time at an initial conversion price of $10.10 per share, and following the registered direct offering consummated in September 2025 and as of the date of this proxy statement, at the current conversion price of $7.01 per share (the "Conversion Price"). The Conversion Price is subject to customary adjustments for stock dividends, stock splits, reclassifications, stock combinations and the like (subject to certain exceptions) and subject to price-based adjustment in the event of any issuances of Common Stock, or securities convertible, exercisable or exchangeable for Common Stock, at a price below the then-applicable Conversion Price (subject to certain exceptions).

The holders of the Series H Preferred Stock shall be entitled to receive cumulative dividends at the rate per share (as a percentage of the Stated Value per share) of 9% per annum, payable on each conversion date (with respect only to Series H Preferred Stock being converted) in duly authorized, validly issued, fully paid and non-assessable shares of common stock at the Conversion Price then in effect in accordance with the terms of the Certificate of Designations.

Except as otherwise provided in the Certificate of Designations or as otherwise required by law, the Series H Preferred Stock shall have no voting rights. However, as long as any shares of Series H Preferred Stock are outstanding, we shall not, without the affirmative vote of the holders of a majority of the then outstanding shares of the Series H Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the Series H Preferred Stock or alter or amend the Certificate of Designations, (b) amend its certificate of incorporation or other charter documents in any manner that adversely affects any rights of the holders, (c) increase the number of authorized shares of Series H Preferred Stock, or (d) enter into any agreement with respect to any of the foregoing.

Notwithstanding the foregoing, our ability to settle conversions using shares of common stock is subject to certain limitations set forth in the Certificate of Designations, including a limit on the number of shares that may be issued until the time, if any, that we have obtained the Stockholder Approval. Further, the Certificate of Designations contains a certain beneficial ownership limitation after giving effect to the issuance of shares of common stock issuable upon conversion of the Series H Preferred Stock.

There is no established public trading market for the Series H Preferred Stock and we do not intend to list the Series H Preferred Stock on any national securities exchange or nationally recognized trading system.

***The Warrants***

The Warrants are exercisable for shares of common stock immediately, at an exercise price of $22.50 per share (after giving effect to the August 2025 Reverse Stock Split) and expire eighteen months from the date of Stockholder Approval. The exercise price of the Warrants is subject to customary adjustments for stock dividends, stock splits, reclassifications, stock combinations and the like. There is no established public trading market for the Warrants, and we do not intend to list the Warrants on any national securities exchange or nationally recognized trading system.

The Warrants may be exercised for cash; provided that, if there is no effective registration statement available for resale of the Warrant Shares, the Warrants may be exercised on a cashless basis. Subject to the rules and regulations of Nasdaq, we may at any time during the term of this Warrant reduce the then current exercise price to any amount and for any period of time deemed appropriate by the Board.

**Effect of Issuance of the Securities**

The shares of Series H Preferred Stock are currently convertible into up to an aggregate of 1,268,046 shares of our common stock at the current Conversion Price of $7.01 per share, the Warrants are exercisable into up to an aggregate of 467,836 shares of our common stock at an exercise price of $22.50 per share (after giving effect to the August 2025 Reverse Stock Split). Additionally, the holders of the Series H Preferred Stock are entitled to dividends on the shares of Series H Preferred Stock at a rate of 9% per annum on the stated value of the Series H Preferred Stock, payable in shares of common stock.

In the event that we issue shares of common stock, or securities convertible, exercisable or exchangeable for common stock, at a price below the then-applicable Conversion Price, the aggregate number of shares of common stock issuable upon the conversion of the Series H Preferred Stock would be greater than the number issuable at the current Conversion Price.

The potential issuance of Underlying Shares would result in an increase in the number of shares of common stock outstanding, and our stockholders will incur dilution of their percentage ownership to the extent that the Series H Preferred Stock is converted or the Warrants are exercised, or additional shares, if any, of common stock are issued pursuant to the terms of the Series H Preferred Stock, for example, upon the issuance of the Dividend Shares pursuant to the Certificate of Designations. Because of potential adjustments to the number of shares of common stock issuable upon conversion of the Series H Preferred Stock, the exact magnitude of the dilutive effect of the Series H Preferred Stock cannot be conclusively determined. Additionally, as the Series H Preferred Stock has no maturity date, the number of Dividend Shares issuable cannot be conclusively determined. However, the dilutive effect may be material to our current stockholders.

**Proposal to Approve the Private Placement**

Nasdaq Listing Rule 5635(d) requires us to obtain stockholder approval prior to the issuance of securities in connection with a transaction other than a public offering involving the sale, issuance or potential issuance by us of our common stock (or securities convertible into or exercisable for our common stock), which equals 20% or more of our common stock or 20% or more of the voting power outstanding immediately prior to the issuance at a price less than the Minimum Price. In the case of the Private Placement, the 20% threshold is determined based on the shares of our common stock outstanding immediately preceding the signing of the Purchase Agreement, which we signed on July 18, 2025.

Immediately prior to the execution of the Purchase Agreement, we had 796,650 shares of Common Stock issued and outstanding. Therefore, the potential issuance of the Underlying Shares would have constituted greater than 20% of the shares of Common Stock issued and outstanding prior to giving effect to the Private Placement. We are seeking stockholder approval under Nasdaq Listing Rule 5635(d) for the sale, issuance or potential issuance by us of our Common Stock (or securities convertible into or exercisable for our common stock) in excess of the Issuable Maximum (as defined in the Certificate of Designations).

We generally have no control over whether the holders of the Series H Preferred Stock convert their shares of Series H Preferred Stock, whether the Warrant holders exercise their Warrants. Additionally, the Conversion Price is subject to price-based adjustments in the event of any issuances of common stock, or securities convertible, exercisable or exchangeable for common stock, at a price below the then-applicable Conversion Price. For these reasons, we are unable to accurately forecast or predict with any certainty the total amount of Underlying Shares that may be issued. Under certain circumstances, however, it is possible, that we will issue more than 20% of our outstanding shares of common stock to the holders of the Series H Preferred Stock and Warrants under the terms of the Private Placement. Therefore, we are seeking stockholder approval under this proposal to issue more than 20% of our outstanding shares of common stock, if necessary, to the Series H Preferred Stock and Warrant holders.

Any transaction requiring approval by our stockholders under Nasdaq Listing Rule 5635(d) would likely result in a significant increase in the number of shares of our common stock outstanding, and, as a result, our current stockholders will own a smaller percentage of our outstanding shares of common stock.

Future issuances of securities in connection with the Private Placement, if any, may cause a significant reduction in the percentage interests of our current stockholders in voting power, any liquidation value, our book and market value, and any future earnings. Further, the issuance or resale of common stock issued to the Series H Preferred Stock and Warrant holders could cause the market price of our common stock to decline. In addition to the foregoing, the increase in the number of issued shares of common stock in connection with the Private Placement may have an incidental anti-takeover effect in that additional shares could be used to dilute the stock ownership of parties seeking to obtain control of us. The increased number of issued shares could discourage the possibility of, or render more difficult, certain mergers, tender offers, proxy contests or other change of control or ownership transactions.

Under the Nasdaq Listing Rules, we are not permitted (without risk of delisting) to undertake a transaction that could result in a change in control of us without seeking and obtaining separate stockholder approval.

**Consequences of Not Approving this Proposal**

After extensive efforts to raise capital on more favorable terms, we believed that the Private Placement was the only viable financing alternatives available to us at the time. Pursuant to the term of the Purchase Agreement, the Company agreed to use its reasonable best efforts to obtain stockholder approval of the Issuance Proposal and further agreement that, if the Company does not obtain such approval at the first meeting, the Company shall call a meeting every four months thereafter to seek such stockholder approval until the earlier of the date the stockholder approval is obtained or the date on which the Series H Preferred Stock is no longer outstanding. Further, until such time as we obtain stockholder approval for this Issuance Proposal, we will not be able to issue 20% or more of our outstanding shares of Common Stock to the Series H Preferred Stock and Warrant holders in connection with the Private Placement.

Additionally, pursuant to the Purchase Agreement, for the period commencing on the date of the Purchase Agreement and ending on the date that is ninety (90) days following the date of Stockholder Approval, neither the Company nor any subsidiary (i) shall issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of common stock or common stock equivalents or (ii) file any registration statement or any amendment or supplement thereto, in each case other than as contemplated pursuant to the Purchase Agreement, as further described above. Additionally, as further described above, from the date of the Purchase Agreement until the date that is the 12 month anniversary of the later of the Effective Date or the date of Stockholder Approval, upon any issuance by us or any of our subsidiaries of common stock or common stock equivalents for cash consideration, indebtedness or a combination of units thereof, each purchaser in the Private Placement shall have the right to participate in up to an amount of the Subsequent Financing equal to 50% of the Subsequent Financing on the same terms, conditions and price provided for in the Subsequent Financing.

**Interests of Certain Persons**

When you consider our Board's recommendation to vote in favor of this proposal, you should be aware that our directors and executive officers and existing stockholders may have interests that may be different from, or in addition to, the interests of other of our stockholders. In particular, Alpha Capital Anstalt ("Alpha"), participated in the Private Placement. Alpha may be unable to convert all of the shares of Series H Preferred Stock and exercise all of the Warrants issued to them in connection with the Private Placement if the Issuance Proposal is not approved by our stockholders. Alpha may, by virtue of the issuance of the Conversion Shares and Warrant Shares to which each is entitled upon conversion of its Series H Preferred Stock at the current Conversion Price or exercise of its Warrants at the initial exercise price, respectively, or upon the issuance of the Dividend Shares pursuant to the Certificate of Designations, acquire rights to a majority of the voting power of us, based on the number of shares of common stock outstanding as of the Record Date.

**Further Information**

The terms of the Purchase Agreement, the Certificate of Designations and the Warrants are only briefly summarized above. For further information, please refer to the forms of the Purchase Agreement, the Certificate of Designations and the Warrants, which were filed with the SEC as exhibits to our Current Report on Form 8-K filed on July 22, 2025, and are incorporated herein by reference. The discussion herein is qualified in its entirety by reference to the filed documents.

**Vote Required**

The affirmative vote of a majority of the votes cast affirmatively or negatively is required for the approval of the Issuance Proposal. "ABSTAIN" votes will have no effect on the results of the vote on this proposal. Brokerage firms do not have authority to vote customers' unvoted shares held by the firms in street name on this proposal. If your shares are held by a broker and you do not give the broker specific instructions on how to vote your shares, your broker may not vote your shares at its discretion. Broker non-votes will have no effect on the results of the vote on this proposal.

**THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ISSUANCE PROPOSAL AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY CARD.**

**PROPOSAL 5 — THE ADJOURNMENT PROPOSAL**

**Background of and Rationale for the Adjournment Proposal**

The Board believes that if the number of shares of the Company's common stock outstanding and entitled to vote at the Annual Meeting and voting in favor of any one or more of the proposals presented at the Annual Meeting is insufficient to approve such proposals, it is in the best interests of the stockholders to enable the Board to continue to seek to obtain a sufficient number of additional votes to approve such proposals.

In the Adjournment Proposal, we are asking stockholders to authorize the holder of any proxy solicited by the Board to vote in favor of adjourning or postponing the Annual Meeting or any adjournment or postponement thereof. If our stockholders approve this proposal, we could adjourn or postpone the Annual Meeting, and any adjourned session of the Annual Meeting, to use the additional time to solicit additional proxies in favor of any one or more of the proposals presented at the Annual Meeting.

Additionally, approval of the Adjournment Proposal could mean that, in the event we receive proxies indicating that we will not obtain approval for one or more of the proposals presented at the Annual Meeting, we could adjourn or postpone the Annual Meeting without a vote on such proposals and use the additional time to solicit the holders of those shares to change their vote in favor of such proposals.

**Required Vote**

The affirmative vote of a majority of the votes cast affirmatively or negatively is required for approval of the Adjournment Proposal. "ABSTAIN" votes will have the same effect as votes cast "AGAINST" this proposal. Because this proposal is considered a routine matter, your bank, broker, trustee or other nominee, as the case may be, may vote your shares without your instruction with respect to this proposal unless you instruct them otherwise. If a bank, broker, trustee or other nominee does not exercise this authority, such failure by the broker to exercise its discretionary authority will have no effect on the results for the vote on this proposal.

**THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ADJOURNMENT PROPOSAL AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY CARD.**

**OTHER BUSINESS**

The Board knows of no other business to be brought before the Annual Meeting. If, however, any other business should properly come before the Annual Meeting, the persons named in the accompanying proxy will vote the proxy in accordance with applicable law and as they may deem appropriate in their discretion, unless directed by the proxy to do otherwise.

**SUBMISSION OF FUTURE STOCKHOLDER PROPOSALS**

Pursuant to Rule 14a-8 under the Exchange Act ("Rule 14a-8"), a stockholder who intends to present a proposal at our next annual meeting of stockholders and who wishes the proposal to be included in the proxy statement for that meeting must submit the proposal in writing not less than 120 calendar days before the one year anniversary of the date this Proxy Statement is released to stockholders in connection with the Annual Meeting, or July 13, 2026, after which date such stockholder proposal will be considered untimely. Such proposal must be submitted to the attention of Secretary, at our corporate offices at 969 Pruitt Place, Tyler TX 75703. However, pursuant to Rule 14a-8, if the date of the 2026 annual meeting has been changed by more than 30 days from the date of the Annual Meeting, or is held on a date that is before November 4, 2026, or after January 3, 2027, then a stockholder proposal submitted for inclusion in our proxy statement for the 2026 annual meeting must be received by us a reasonable time before we begin to print and mail our proxy statement for the 2026 annual meeting.

Stockholders wishing to nominate a director or submit proposals to be presented directly at our next annual meeting instead of by inclusion in next year's proxy statement must follow the submission criteria and deadlines set forth in our Bylaws concerning stockholder nominations and proposals. Stockholder nominations for director and other proposals that are not to be included in such materials must be received by our Secretary in writing at our corporate offices at 969 Pruitt Place, Tyler TX 75703, not later than 90 or more than 120 days prior to the one-year anniversary of the date of the this Annual Meeting (i.e., the date that is between August 6, 2026, and September 5, 2025); provided, however, that in the event that the 2026 annual meeting is called for a date that is 60 days prior to the date that is one year from the date of the Annual Meeting date or a date which is 30 days after the date of the Annual Meeting (i.e., the date that is between October 5, 2026 and January 3, 2027), notice must be received by our Secretary at our principal executive offices not earlier than 120 days prior to the date of the 2026 annual meeting and not later than the later of (A) the date which is 90 days prior to the date of the 2026 annual meeting, or (B) if the first public announcement of the date of the 2026 annual meeting is less than 100 days prior to the date of such annual meeting, the tenth day following the date of the public announcement of the date of the 2026 annual meeting. Any such stockholder proposals or nominations for director must also satisfy the requirements set forth in our Bylaws. To be eligible for inclusion in our proxy materials, stockholder proposals must also comply with the requirements of Rule 14a-8. Stockholders are also advised to review our Bylaws, which contain additional advance notice requirements, including requirements with respect to advance notice of stockholder proposals and director nominations. A proxy granted by a stockholder will give discretionary authority to the proxies to vote on any matters introduced pursuant to the above advance notice Bylaw provisions, subject to applicable rules of the SEC.

In addition to satisfying the requirements under our Bylaws, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than Company nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than October 5, 2026 (i.e., the date that is 60 days prior to the anniversary date of this Annual Meeting).

A copy of our 2024 Annual Report on Form 10-K is available without charge (except for exhibits, which are available upon payment of a reasonable fee) upon written request to NanoVibronix, Inc., Attention: Chief Executive Officer, 969 Pruitt Place, Tyler TX 75703.

**ANNEX A**

**FIRST AMENDMENT** 

**TO THE**

**NANOVIBRONIX, INC. 2024 LONG-TERM INCENTIVE PLAN**

This FIRST AMENDMENT TO THE NANOVIBRONIX, INC. 2024 LONG-TERM INCENTIVE PLAN (this "***Amendment***"), effective as of _____________, 2025, is made and entered into by NanoVibronix, Inc., a Delaware corporation (the "***Company***"). Terms used in this Amendment with initial capital letters that are not otherwise defined herein shall have the meanings ascribed to such terms in the NanoVibronix, Inc. 2024 Long-Term Incentive Plan (the "***Plan***").

**RECITALS**

**WHEREAS**, the Company sponsors and maintains the Plan in order to attract and retain the services of key employees, contractors, and outside directors of the Company and its subsidiaries;

**WHEREAS**, Article 9 of the Plan provides that the Board of Directors of the Company (the "***Board***") may amend the Plan at any time and from time to time;

**WHEREAS**, the Company originally reserved 600,000 shares of Common Stock for issuance under the Plan, subject to adjustment and increase as provided under the terms of the Plan;

**WHEREAS**, the Company subsequently approved a 1-for-11 reverse stock split of the Company's Common Stock, effective as of March 14, 2025, after which, and in accordance with Article 11 of the Plan, the number of shares of Common Stock reserved for issuance under the Plan was reduced to 54,545 shares of Common Stock;

**WHEREAS**, on August 11, 2025, the Company effected a 1-for-10 reverse stock split such that, after giving effect to the reverse stock split, there were 5,454 shares of Common Stock reserved for issuance pursuant to awards under the Plan;

**WHEREAS**, the Board desires to amend the Plan to increase the aggregate number of shares of Common Stock that may be issued under the Plan as set forth in Section 5.1 of the Plan by an additional 1,200,000 shares of Common Stock; and

**WHEREAS**, the Board intends to submit this Amendment to the Company's stockholders for their approval.

**NOW, THEREFORE**, in accordance with Article 9 of the Plan, the Company hereby amends the Plan as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Section 5.1 of the Plan is hereby amended by deleting said section in its entirety and substituting in lieu thereof the following new Section 5.1:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 **Number Available for Awards.** Subject to adjustment as provided in <u>Articles 11 and 12</u> and any increase by any Prior Plan Awards eligible for reuse pursuant to <u>Section 5.2</u> below, the maximum number of shares of Common Stock that may be delivered pursuant to Awards granted under the Plan is 1,205,454 shares, of which one hundred percent (100%) may be delivered pursuant to Incentive Stock Options. Shares to be issued may be made available from authorized but unissued Common Stock, Common Stock held by the Company in its treasury, or Common Stock purchased by the Company on the open market or otherwise. During the term of this Plan, the Company will at all times reserve and keep available the number of shares of Common Stock that shall be sufficient to satisfy the requirements of this Plan. After the Effective Date, no awards may be granted under the Prior Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. This Amendment shall be effective on the date first set forth above. In the event stockholder approval of this Amendment is not obtained within twelve (12) months of the date the Board approved this Amendment, the additional shares added to the Plan pursuant to this Amendment shall not be available for grant as Incentive Stock Options.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Except as expressly amended by this Amendment, the Plan shall continue in full force and effect in accordance with the provisions thereof.

**[SIGNATURE PAGE FOLLOWS]** 

**IN WITNESS WHEREOF**, the Company has caused this Amendment to be duly executed as of the date first written above.

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|:---|
| **NANOVIBRONIX, INC.** |
| By: |
| Name: |
| Title: |

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**ANNEX B**

**NANOVIBRONIX, INC.**

**2024 LONG-TERM INCENTIVE PLAN**

The NanoVibronix, Inc. 2024 Long-Term Incentive Plan (the "***Plan***") was adopted by the Board of Directors of NanoVibronix, Inc., a Delaware corporation (the "***Company***"), on November 6, 2023 (the "***Board Approval Date***"), to be effective as of the date the Plan is approved by the Company's stockholders (the "***Effective Date***").

**ARTICLE 1**

**PURPOSE**

The purpose of the Plan is to attract and retain the services of key Employees, key Contractors, and Outside Directors of the Company and its Subsidiaries and to provide such persons with a proprietary interest in the Company through the granting of Incentive Stock Options, Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Awards, Dividend Equivalent Rights, and Other Awards, whether granted singly, or in combination, or in tandem, that will:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) increase the interest of such persons in the Company's welfare;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) furnish an incentive to such persons to continue their services for the Company or its Subsidiaries; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) provide a means through which the Company may attract able persons as Employees, Contractors, and Outside Directors.

With respect to Reporting Participants, the Plan and all transactions under the Plan are intended to comply with all applicable conditions of Rule 16b-3 promulgated under the Exchange Act. To the extent any provision of the Plan or action by the Committee fails to so comply, such provision or action shall be deemed null and void *ab initio*, to the extent permitted by law and deemed advisable by the Committee.

**ARTICLE 2**

**DEFINITIONS**

For the purpose of the Plan, unless the context requires otherwise, the following terms shall have the meanings indicated:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 "***Applicable Law***" means all legal requirements relating to the administration of equity incentive plans and the issuance and distribution of shares of Common Stock, if any, under applicable corporate laws, applicable securities laws, the rules of any exchange or inter-dealer quotation system upon which the Company's securities are listed or quoted, the rules of any foreign jurisdiction applicable to Incentives granted to residents therein, and any other applicable law, rule or restriction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 "***Award***" means the grant of any Incentive Stock Option, Nonqualified Stock Option, Restricted Stock, SAR, Restricted Stock Units, Performance Award, Dividend Equivalent Right or Other Award, whether granted singly or in combination or in tandem (each individually referred to herein as an "***Incentive***").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 "***Award Agreement***" means a written agreement between a Participant and the Company which sets out the terms of the grant of an Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4 "***Award Period***" means the period set forth in the Award Agreement during which one or more Incentives granted under an Award may be exercised.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5 "***Board***" means the board of directors of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6 "***Change in Control***" means the occurrence of the event set forth in any one of the following paragraphs, except as otherwise provided herein:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its Affiliates) representing fifty percent (50%) or more of the combined voting power of the Company's then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (i) of paragraph (c) below;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on the effective date of this Plan, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company's stockholders was approved or recommended by a vote of at least two-thirds (2/3<sup>rds</sup>) of the directors then still in office who either were directors on the effective date of this Plan or whose appointment, election or nomination for election was previously so approved or recommended;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation, other than (i) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least sixty percent (60%) of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates other than in connection with the acquisition by the Company or its Affiliates of a business) representing thirty percent (30%) or more of the combined voting power of the Company's then outstanding securities; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets, other than a sale or disposition by the Company of all or substantially all of the Company's assets to an entity, at least sixty percent (60%) of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale.

For purposes hereof:

"***Affiliate***" shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act.

"***Beneficial Owner***" shall have the meaning set forth in Rule 13d-3 under the Exchange Act.

"***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, except that such term shall not include (i) the Company or any of its Subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.

Notwithstanding the foregoing provisions of this <u>Section 2.6</u>, if an Award issued under the Plan is subject to Section 409A of the Code, then an event shall not constitute a Change in Control for purposes of such Award under the Plan unless such event also constitutes a change in the Company's ownership, its effective control or the ownership of a substantial portion of its assets within the meaning of Section 409A of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7 ***"Claim***" means any claim, liability or obligation of any nature, arising out of or relating to this Plan or an alleged breach of this Plan or an Award Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.8 "***Code***" means the United States Internal Revenue Code of 1986, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.9 "***Committee***" means the committee appointed or designated by the Board to administer the Plan in accordance with <u>Article 3</u> of this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.10 "***Common Stock***" means the common stock, par value $0.001 per share, which the Company is currently authorized to issue or may in the future be authorized to issue, or any securities into which or for which the common stock of the Company may be converted or exchanged, as the case may be, pursuant to the terms of this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.11 "***Company***" means NanoVibronix, Inc., a Delaware corporation, and any successor entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.12 "***Contractor"*** means any natural person, who is not an Employee, rendering *bona fide* services to the Company or a Subsidiary, with compensation, pursuant to a written independent contractor agreement between such person (or any entity employing such person) and the Company or a Subsidiary, provided that such services are not rendered in connection with the offer or sale of securities in a capital raising transaction and do not directly or indirectly promote or maintain a market for the Company's securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.13 "***Corporation***" means any entity that (a) is defined as a corporation under Section 7701 of the Code and (b) is the Company or is in an unbroken chain of corporations (other than the Company) beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing a majority of the total combined voting power of all classes of stock in one of the other corporations in the chain. For purposes of clause (b) hereof, an entity shall be treated as a "corporation" if it satisfies the definition of a corporation under Section 7701 of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.14 "***Date of Grant***" means the effective date on which an Award is made to a Participant as set forth in the applicable Award Agreement; provided, however, that solely for purposes of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder, the Date of Grant of an Award shall be the date of stockholder approval of the Plan if such date is later than the effective date of such Award as set forth in the Award Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.15 "***Dividend Equivalent Right***" means the right of the holder thereof to receive credits based on the cash dividends that would have been paid on the shares of Common Stock specified in the Award if such shares were held by the Participant to whom the Award is made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.16 "***Employee***" means a common law employee (as defined in accordance with the Regulations and Revenue Rulings then applicable under Section 3401(c) of the Code) of the Company or any Subsidiary of the Company**;** provided, however, in the case of individuals whose employment status, by virtue of their employer or residence, is not determined under Section 3401(c) of the Code, "***Employee***" shall mean an individual treated as an employee for local payroll tax or employment purposes by the applicable employer under Applicable Law for the relevant period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.17 "***Exchange Act***" means the United States Securities Exchange Act of 1934, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.18 "***Fair Market Value***" means, as of a particular date, (a) if the shares of Common Stock are listed on any established national securities exchange, the closing sales price per share of Common Stock on the consolidated transaction reporting system for the principal securities exchange for the Common Stock on that date, or, if there shall have been no such sale so reported on that date, on the last preceding date on which such a sale was so reported; (b) if the shares of Common Stock are not so listed, but are quoted on an automated quotation system, the closing sales price per share of Common Stock reported on the automated quotation system on that date, or, if there shall have been no such sale so reported on that date, on the last preceding date on which such a sale was so reported; (c) if the Common Stock is not so listed or quoted, the mean between the closing bid and asked price on that date, or, if there are no quotations available for such date, on the last preceding date on which such quotations shall be available, as reported by the OTC Bulletin Board operated by the Financial Industry Regulation Authority, Inc. or the OTC Markets Group Inc., formerly known as Pink OTC Markets Inc.; or (d) if none of the above is applicable, such amount as may be determined by the Committee (acting on the advice of an Independent Third Party, should the Committee elect in its sole discretion to utilize an Independent Third Party for this purpose), in good faith, to be the fair market value per share of Common Stock. The determination of Fair Market Value shall, where applicable, be in compliance with Section 409A of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.19 "***Incentive***" is defined in <u>Section 2.2</u> hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.20 "***Incentive Stock Option***" means an incentive stock option within the meaning of Section 422 of the Code, granted pursuant to this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.21 "***Independent Third Party***" means an individual or entity independent of the Company having experience in providing investment banking or similar appraisal or valuation services and with expertise generally in the valuation of securities or other property for purposes of this Plan. The Committee may utilize one or more Independent Third Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.22 "***Nonqualified Stock Option***" means a nonqualified stock option, granted pursuant to this Plan, which is not an Incentive Stock Option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.23 "***Option Price***" means the price which must be paid by a Participant upon exercise of a Stock Option to purchase a share of Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.24 "***Other Award***" means an Award issued pursuant to <u>Section 6.9</u> hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.25 "***Outside Director***" means a director of the Company who is not an Employee or a Contractor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.26 "***Participant***" means an Employee or Contractor of the Company or a Subsidiary or an Outside Director to whom an Award is granted under this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.27 "***Performance Award***" means an Award hereunder of cash, shares of Common Stock, units or rights based upon, payable in, or otherwise related to, Common Stock pursuant to <u>Section 6.7</u> hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.28 "***Performance Goal***" means any of the Performance Criteria set forth in <u>Section 6.10</u> hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.29 "***Plan***" means this NanoVibronix, Inc. 2024 Long-Term Incentive Plan, as amended from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.30 **"*Prior Plan*"** means the NanoVibronix, Inc. 2014 Long-Term Incentive Plan, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.31 "***Prior Plan Awards***" means (a) any awards under the Prior Plan that are outstanding on the Effective Date, and that on or after the Effective Date, are forfeited, expire or are canceled; and (b) any shares subject to awards relating to Common Stock under the Prior Plan that, on or after the Effective Date are settled in cash. Prior Plan Awards that remain outstanding as of the Effective Date shall continue to be governed by the terms and conditions of the Prior Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.32 "***Reporting Participant***" means a Participant who is subject to the reporting requirements of Section 16 of the Exchange Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.33 "***Restricted Stock***" means shares of Common Stock issued or transferred to a Participant pursuant to <u>Section 6.4</u> of this Plan which are subject to restrictions or limitations set forth in this Plan and in the related Award Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.34 "***Restricted Stock Units***" means units awarded to Participants pursuant to <u>Section 6.6</u> hereof, which are convertible into Common Stock at such time as such units are no longer subject to restrictions as established by the Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.35 "***Retirement***" means any Termination of Service solely due to retirement upon or after attainment of age sixty-five (65), or permitted early retirement as determined by the Committee**;** provided, however, in the case of Participants who reside in the European Economic Area, "***Retirement***" shall mean any Termination of Service as of a date they are eligible for mandatory retirement benefits under local law, without regard to age.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.36 "***SAR***" or "**S*tock Appreciation Right***" means the right to receive an amount, in cash and/or Common Stock, equal to the excess of the Fair Market Value of a specified number of shares of Common Stock as of the date the SAR is exercised (or, as provided in the Award Agreement, converted) over the SAR Price for such shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.37 "***SAR Price***" means the exercise price or conversion price of each share of Common Stock covered by a SAR, determined on the Date of Grant of the SAR.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.38 "***Stock Option***" means a Nonqualified Stock Option or an Incentive Stock Option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.39 "***Subsidiary***" means (a) any corporation in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing a majority of the total combined voting power of all classes of stock in one of the other corporations in the chain, (b) any limited partnership, if the Company or any corporation described in item (a) above owns a majority of the general partnership interest and a majority of the limited partnership interests entitled to vote on the removal and replacement of the general partner, and (c) any partnership or limited liability company, if the partners or members thereof are composed only of the Company, any corporation listed in item (a) above or any limited partnership listed in item (b) above. "***Subsidiaries***" means more than one of any such corporations, limited partnerships, partnerships or limited liability companies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.40 "***Termination of Service***" occurs when a Participant who is (a) an Employee of the Company or any Subsidiary ceases to serve as an Employee of the Company and its Subsidiaries, for any reason; (b) an Outside Director of the Company or a Subsidiary ceases to serve as a director of the Company and its Subsidiaries for any reason; or (c) a Contractor of the Company or a Subsidiary ceases to serve as a Contractor of the Company and its Subsidiaries for any reason. Except as may be necessary or desirable to comply with applicable federal or state law, a "Termination of Service" shall not be deemed to have occurred when a Participant who is an Employee becomes an Outside Director or Contractor or vice versa. If, however, a Participant who is an Employee and who has an Incentive Stock Option ceases to be an Employee but does not suffer a Termination of Service, and if that Participant does not exercise the Incentive Stock Option within the time required under Section 422 of the Code upon ceasing to be an Employee, the Incentive Stock Option shall thereafter become a Nonqualified Stock Option. Notwithstanding the foregoing provisions of this <u>Section 2.40</u>, in the event an Award issued under the Plan is subject to Section 409A of the Code, then, in lieu of the foregoing definition and to the extent necessary to comply with the requirements of Section 409A of the Code, the definition of "Termination of Service" for purposes of such Award shall be the definition of "separation from service" provided for under Section 409A of the Code and the regulations or other guidance issued thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.41 "***Total and Permanent Disability***" means a Participant is qualified for long-term disability benefits under the Company's or Subsidiary's disability plan or insurance policy; or, if no such plan or policy is then in existence or if the Participant is not eligible to participate in such plan or policy, that the Participant, because of a physical or mental condition resulting from bodily injury, disease, or mental disorder, is unable to perform his or her duties of employment for a period of six (6) continuous months, as determined in good faith by the Committee, based upon medical reports or other evidence satisfactory to the Committee; provided that, with respect to any Incentive Stock Option, Total and Permanent Disability shall have the meaning given it under the rules governing Incentive Stock Options under the Code. Notwithstanding the foregoing provisions of this <u>Section 2.41</u>, in the event an Award issued under the Plan is subject to Section 409A of the Code, then, in lieu of the foregoing definition and to the extent necessary to comply with the requirements of Section 409A of the Code, the definition of "Total and Permanent Disability" for purposes of such Award shall be the definition of "disability" provided for under Section 409A of the Code and the regulations or other guidance issued thereunder.

**ARTICLE 3**

**ADMINISTRATION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 **General Administration; Establishment of Committee.** Subject to the terms of this <u>Article 3</u>, the Plan shall be administered by the Board or such committee of the Board as is designated by the Board to administer the Plan (the "***Committee***"). The Committee shall consist of not fewer than two persons. Any member of the Committee may be removed at any time, with or without cause, by resolution of the Board. Any vacancy occurring in the membership of the Committee may be filled by appointment by the Board. At any time there is no Committee to administer the Plan, any references in this Plan to the Committee shall be deemed to refer to the Board.

Membership on the Committee shall be limited to those members of the Board who are "non-employee directors" as defined in Rule 16b-3 promulgated under the Exchange Act. The Committee shall select one of its members to act as its Chairman. A majority of the Committee shall constitute a quorum, and the act of a majority of the members of the Committee present at a meeting at which a quorum is present shall be the act of the Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 **Designation of Participants and Awards.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Committee or the Board shall determine and designate from time to time the eligible persons to whom Awards will be granted and shall set forth in each related Award Agreement, where applicable, the Award Period, the Date of Grant, and such other terms, provisions, limitations, and performance requirements, as are approved by the Committee, but not inconsistent with the Plan. The Committee shall determine whether an Award shall include one type of Incentive or two or more Incentives granted in combination or two or more Incentives granted in tandem (that is, a joint grant where exercise of one Incentive results in cancellation of all or a portion of the other Incentive). Although the members of the Committee shall be eligible to receive Awards, all decisions with respect to any Award, and the terms and conditions thereof, to be granted under the Plan to any member of the Committee shall be made solely and exclusively by the other members of the Committee, or if such member is the only member of the Committee, by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding <u>Section 3.2(a)</u>, to the extent permitted by Applicable Law, the Board may, in its discretion and by a resolution adopted by the Board, authorize one or more officers of the Company (an "***Authorized Officer***") to (i) designate one or more Employees as eligible persons to whom Awards will be granted under the Plan, and (ii) determine the number of shares of Common Stock that will be subject to such Awards; provided, however, that the resolution of the Board granting such authority shall (x) specify the total number of shares of Common Stock that may be made subject to the Awards, (y) set forth the price or prices (or a formula by which such price or prices may be determined) to be paid for the purchase of the Common Stock subject to such Awards, and (z) not authorize an officer to designate himself as a recipient of any Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 **Authority of the Committee.** The Committee, in its discretion, shall (a) interpret the Plan and Award Agreements, (b) prescribe, amend, and rescind any rules and regulations and sub-plans (including sub-plans for Awards made to Participants who are not resident in the United States, such as the sub-plan for Participants who are subject to Israeli taxation attached hereto as the "Israeli Appendix"), as necessary or appropriate for the administration of the Plan, (c) establish performance goals for an Award and certify the extent of their achievement, and (d) make such other determinations or certifications and take such other action as it deems necessary or advisable in the administration of the Plan. Any interpretation, determination, or other action made or taken by the Committee shall be final, binding, and conclusive on all interested parties. The Committee's discretion set forth herein shall not be limited by any provision of the Plan, including any provision which by its terms is applicable notwithstanding any other provision of the Plan to the contrary.

The Committee may delegate to officers of the Company, pursuant to a written delegation, the authority to perform specified functions under the Plan. Any actions taken by any officers of the Company pursuant to such written delegation of authority shall be deemed to have been taken by the Committee.

With respect to restrictions in the Plan that are based on the requirements of Rule 16b-3 promulgated under the Exchange Act, Section 422 of the Code, the rules of any exchange or inter-dealer quotation system upon which the Company's securities are listed or quoted, or any other Applicable Law, to the extent that any such restrictions are no longer required by Applicable Law, the Committee shall have the sole discretion and authority to grant Awards that are not subject to such mandated restrictions and/or to waive any such mandated restrictions with respect to outstanding Awards.

**ARTICLE 4**

**ELIGIBILITY**

Any Employee (including an Employee who is also a director or an officer), Contractor or Outside Director of the Company whose judgment, initiative, and efforts contributed or may be expected to contribute to the successful performance of the Company is eligible to participate in the Plan; provided that only Employees of a Corporation shall be eligible to receive Incentive Stock Options. The Committee, upon its own action, may grant, but shall not be required to grant, an Award to any Employee, Contractor or Outside Director. Awards may be granted by the Committee at any time and from time to time to new Participants, or to then Participants, or to a greater or lesser number of Participants, and may include or exclude previous Participants, as the Committee shall determine. Except as required by this Plan, Awards need not contain similar provisions. The Committee's determinations under the Plan (including without limitation determinations of which Employees, Contractors or Outside Directors, if any, are to receive Awards, the form, amount and timing of such Awards, the terms and provisions of such Awards and the agreements evidencing same) need not be uniform and may be made by it selectively among Participants who receive, or are eligible to receive, Awards under the Plan.

**ARTICLE 5**

**SHARES SUBJECT TO PLAN**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 **Number Available for Awards.** Subject to adjustment as provided in <u>Articles 11 and 12</u> and any increase by any Prior Plan Awards eligible for reuse pursuant to <u>Section 5.2</u> below, the maximum number of shares of Common Stock that may be delivered pursuant to Awards granted under the Plan is six hundred thousand (600,000) shares, of which one hundred percent (100%) may be delivered pursuant to Incentive Stock Options. Shares to be issued may be made available from authorized but unissued Common Stock, Common Stock held by the Company in its treasury, or Common Stock purchased by the Company on the open market or otherwise. During the term of this Plan, the Company will at all times reserve and keep available the number of shares of Common Stock that shall be sufficient to satisfy the requirements of this Plan. After the Effective Date, no awards may be granted under the Prior Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 **Reuse of Shares.** To the extent that any Award under this Plan or any Prior Plan Award shall be forfeited, shall expire or be canceled, in whole or in part, then the number of shares of Common Stock covered by the Award Prior Plan Award so forfeited, shall expire or be canceled, in whole or in part, then the number of shares of Common Stock covered by the Award or stock option so forfeited, expired or canceled may again be awarded pursuant to the provisions of this Plan. In the event that previously acquired shares of Common Stock are delivered to the Company in full or partial payment of the exercise price for the exercise of a Stock Option granted under this Plan, the number of shares of Common Stock available for future Awards under this Plan shall be reduced only by the net number of shares of Common Stock issued upon the exercise of the Stock Option. Awards that may be satisfied either by the issuance of shares of Common Stock or by cash or other consideration shall be counted against the maximum number of shares of Common Stock that may be issued under this Plan only during the period that the Award is outstanding or to the extent the Award is ultimately satisfied by the issuance of shares of Common Stock. Awards will not reduce the number of shares of Common Stock that may be issued pursuant to this Plan if the settlement of the Award will not require the issuance of shares of Common Stock, as, for example, a SAR that can be satisfied only by the payment of cash. Notwithstanding any provisions of the Plan to the contrary, only shares forfeited back to the Company, shares canceled on account of termination, expiration or lapse of an Award, shares surrendered in payment of the exercise price of a Stock Option or shares withheld for payment of applicable employment taxes and/or withholding obligations resulting from the exercise of an option shall again be available for grant of Incentive Stock Options under the Plan, but shall not increase the maximum number of shares described in <u>Section 5.</u>1 above as the maximum number of shares of Common Stock that may be delivered pursuant to Incentive Stock Options.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 **Limitation on Outside Director Awards.** No Outside Director may be granted any Award or Awards denominated in shares that exceed in the aggregate $700,000 in Fair Market Value (such Fair Market Value computed as of the Date of Grant) in any calendar year period, plus an additional $700,000 in Fair Market Value (determined as of the Date of Grant) for one-time awards to a newly appointed or elected Outside Director. The foregoing limit shall not apply to any Award made pursuant to deferred compensation arrangements in lieu of all or a portion of cash retainers.

**ARTICLE 6**

**GRANT OF AWARDS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 **In General.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The grant of an Award shall be authorized by the Committee and shall be evidenced by an Award Agreement setting forth the Incentive or Incentives being granted, the total number of shares of Common Stock subject to the Incentive(s), the Option Price (if applicable), the Award Period, the Date of Grant, and such other terms, provisions, limitations, and performance objectives, as are approved by the Committee, but (i) not inconsistent with the Plan, and (ii) to the extent an Award issued under the Plan is subject to Section 409A of the Code, in compliance with the applicable requirements of Section 409A of the Code and the regulations or other guidance issued thereunder. The Company shall execute an Award Agreement with a Participant after the Committee approves the issuance of an Award. Any Award granted pursuant to this Plan must be granted within the term of the Plan, as set forth in <u>Article 10</u> below. The Plan shall be submitted to the Company's stockholders for approval at the first stockholder meeting after the Board Approval Date, and no Awards may be granted under the Plan prior to the Effective Date. The grant of an Award to a Participant shall not be deemed either to entitle the Participant to, or to disqualify the Participant from, receipt of any other Award under the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If the Committee establishes a purchase price for an Award, the Participant must accept such Award within a period of thirty (30) days (or such shorter period as the Committee may specify) after the Date of Grant by executing the applicable Award Agreement and paying such purchase price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Any Award under this Plan that is settled in whole or in part in cash on a deferred basis may provide for interest equivalents to be credited with respect to such cash payment. Interest equivalents may be compounded and shall be paid upon such terms and conditions as may be specified by the grant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 **Option Price.** The Option Price for any share of Common Stock which may be purchased under a Nonqualified Stock Option for any share of Common Stock may be equal to or greater than the Fair Market Value of the share on the Date of Grant. The Option Price for any share of Common Stock which may be purchased under an Incentive Stock Option must be at least equal to the Fair Market Value of the share on the Date of Grant; if an Incentive Stock Option is granted to an Employee who owns or is deemed to own (by reason of the attribution rules of Section 424(d) of the Code) more than ten percent (10%) of the combined voting power of all classes of stock of the Company (or any parent or Subsidiary), the Option Price shall be at least one hundred ten percent (110%) of the Fair Market Value of the Common Stock on the Date of Grant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 **Maximum ISO Grants.** The Committee may not grant Incentive Stock Options under the Plan to any Employee which would permit the aggregate Fair Market Value (determined on the Date of Grant) of the Common Stock with respect to which Incentive Stock Options (under this and any other plan of the Company and its Subsidiaries) are exercisable for the first time by such Employee during any calendar year to exceed $100,000. To the extent any Stock Option granted under this Plan which is designated as an Incentive Stock Option exceeds this limit or otherwise fails to qualify as an Incentive Stock Option, such Stock Option (or any such portion thereof) shall be a Nonqualified Stock Option. In such case, the Committee shall designate which stock will be treated as Incentive Stock Option stock by causing the issuance of a separate stock certificate and identifying such stock as Incentive Stock Option stock on the Company's stock transfer records.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4 **Restricted Stock.** If Restricted Stock is granted to or received by a Participant under an Award (including a Stock Option), the Committee shall set forth in the related Award Agreement: (a) the number of shares of Common Stock awarded, (b) the price, if any, to be paid by the Participant for such Restricted Stock and the method of payment of the price, (c) the time or times within which such Award may be subject to forfeiture, (d) specified Performance Goals of the Company, a Subsidiary, any division thereof or any group of Employees of the Company, or other criteria, which the Committee determines must be met in order to remove any restrictions (including vesting) on such Award, and (e) all other terms, limitations, restrictions, and conditions of the Restricted Stock, which shall be consistent with this Plan, to the extent applicable and, to the extent Restricted Stock granted under the Plan is subject to Section 409A of the Code, in compliance with the applicable requirements of Section 409A of the Code and the regulations or other guidance issued thereunder. The provisions of Restricted Stock need not be the same with respect to each Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **Legend on Shares.** The Company shall electronically register the Restricted Stock awarded to a Participant in the name of such Participant, which shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock, substantially as provided in <u>Section 15.10</u> of the Plan. No stock certificate or certificates shall be issued with respect to such shares of Common Stock, unless, following the expiration of the Restriction Period (as defined in <u>Section 6.4(b)(i)</u>) without forfeiture in respect of such shares of Common Stock, the Participant requests delivery of the certificate or certificates by submitting a written request to the Committee (or such party designated by the Company) requesting delivery of the certificates. The Company shall deliver the certificates requested by the Participant to the Participant as soon as administratively practicable following the Company's receipt of such request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **Restrictions and Conditions.** Shares of Restricted Stock shall be subject to the following restrictions and conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Subject to the other provisions of this Plan and the terms of the particular Award Agreements, during such period as may be determined by the Committee commencing on the Date of Grant or the date of exercise of an Award (the "***Restriction Period***"), the Participant shall not be permitted to sell, transfer, pledge or assign shares of Restricted Stock. Except for these limitations, the Committee may in its sole discretion, remove any or all of the restrictions on such Restricted Stock whenever it may determine that, by reason of changes in Applicable Laws or other changes in circumstances arising after the date of the Award, such action is appropriate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Except as provided in sub-paragraph (i) above or in the applicable Award Agreement, the Participant shall have, with respect to his or her Restricted Stock, all of the rights of a stockholder of the Company, including the right to vote the shares, and the right to receive any dividends thereon. Certificates for shares of Common Stock free of restriction under this Plan shall be delivered to the Participant promptly after, and only after, the Restriction Period shall expire without forfeiture in respect of such shares of Common Stock or after any other restrictions imposed on such shares of Common Stock by the applicable Award Agreement or other agreement have expired. Certificates for the shares of Common Stock forfeited under the provisions of the Plan and the applicable Award Agreement shall be promptly returned to the Company by the forfeiting Participant. Each Award Agreement shall require that each Participant, in connection with the issuance of a certificate for Restricted Stock, shall endorse such certificate in blank or execute a stock power in form satisfactory to the Company in blank and deliver such certificate and executed stock power to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The Restriction Period of Restricted Stock shall commence on the Date of Grant or the date of exercise of an Award, as specified in the Award Agreement, and, subject to <u>Article 12</u> of the Plan, unless otherwise established by the Committee in the Award Agreement setting forth the terms of the Restricted Stock, shall expire upon satisfaction of the conditions set forth in the Award Agreement; such conditions may provide for vesting based on length of continuous service or such Performance Goals, as may be determined by the Committee in its sole discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Except as otherwise provided in the particular Award Agreement, upon Termination of Service for any reason during the Restriction Period, the nonvested shares of Restricted Stock shall be forfeited by the Participant. In the event a Participant has paid any consideration to the Company for such forfeited Restricted Stock, the Committee shall specify in the Award Agreement that either (1) the Company shall be obligated to, or (2) the Company may, in its sole discretion, elect to, pay to the Participant, as soon as practicable after the event causing forfeiture, in cash, an amount equal to the lesser of the total consideration paid by the Participant for such forfeited shares or the Fair Market Value of such forfeited shares as of the date of Termination of Service, as the Committee, in its sole discretion shall select. Upon any forfeiture, all rights of a Participant with respect to the forfeited shares of the Restricted Stock shall cease and terminate, without any further obligation on the part of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5 **SARs.** The Committee may grant SARs to any Participant, either as a separate Award or in connection with a Stock Option. SARs shall be subject to such terms and conditions as the Committee shall impose, provided that such terms and conditions are (a) not inconsistent with the Plan, and (b) to the extent a SAR issued under the Plan is subject to Section 409A of the Code, in compliance with the applicable requirements of Section 409A of the Code and the regulations or other guidance issued thereunder. The grant of the SAR may provide that the holder may be paid for the value of the SAR either in cash or in shares of Common Stock, or a combination thereof. In the event of the exercise of a SAR payable in shares of Common Stock, the holder of the SAR shall receive that number of whole shares of Common Stock having an aggregate Fair Market Value on the date of exercise equal to the value obtained by multiplying (x) the difference between the Fair Market Value of a share of Common Stock on the date of exercise over the SAR Price as set forth in such SAR (or other value specified in the Award Agreement granting the SAR), by (y) the number of shares of Common Stock as to which the SAR is exercised, with a cash settlement to be made for any fractional shares of Common Stock. The SAR Price for any share of Common Stock subject to a SAR may be equal to or greater than the Fair Market Value of the share on the Date of Grant. The Committee, in its sole discretion, may place a ceiling on the amount payable upon exercise of a SAR, but any such limitation shall be specified at the time that the SAR is granted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.6 **Restricted Stock Units.** Restricted Stock Units may be awarded or sold to any Participant under such terms and conditions as shall be established by the Committee, provided, however, that such terms and conditions are (a) not inconsistent with the Plan, and (b) to the extent a Restricted Stock Unit issued under the Plan is subject to Section 409A of the Code, in compliance with the applicable requirements of Section 409A of the Code and the regulations or other guidance issued thereunder. Restricted Stock Units shall be subject to such restrictions as the Committee determines, including, without limitation, (a) a prohibition against sale, assignment, transfer, pledge, hypothecation or other encumbrance for a specified period; or (b) a requirement that the holder forfeit (or in the case of shares of Common Stock or units sold to the Participant, resell to the Company at cost) such shares or units in the event of Termination of Service during the period of restriction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.7 **Performance Awards.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Committee may grant Performance Awards to one or more Participants. The terms and conditions of Performance Awards shall be specified at the time of the grant and may include provisions establishing the performance period, the Performance Goals to be achieved during a performance period, and the maximum or minimum settlement values, provided that such terms and conditions are (i) not inconsistent with the Plan and (ii) to the extent a Performance Award issued under the Plan is subject to Section 409A of the Code, in compliance with the applicable requirements of Section 409A of the Code and the regulations or other guidance issued thereunder. If the Performance Award is to be in shares of Common Stock, the Performance Awards may provide for the issuance of the shares of Common Stock at the time of the grant of the Performance Award or at the time of the certification by the Committee that the Performance Goals for the performance period have been met; provided, however, if shares of Common Stock are issued at the time of the grant of the Performance Award and if, at the end of the performance period, the Performance Goals are not certified by the Committee to have been fully satisfied, then, notwithstanding any other provisions of this Plan to the contrary, the Common Stock shall be forfeited in accordance with the terms of the grant to the extent the Committee determines that the Performance Goals were not met. The forfeiture of shares of Common Stock issued at the time of the grant of the Performance Award due to failure to achieve the established Performance Goals shall be separate from and in addition to any other restrictions provided for in this Plan that may be applicable to such shares of Common Stock. Each Performance Award granted to one or more

If the Committee determines, in its sole discretion, that the established performance measures or objectives are no longer suitable because of a change in the Company's business, operations, corporate structure, or for other reasons that the Committee deemed satisfactory, the Committee may modify the performance measures or objectives and/or the performance period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Performance Awards may be valued by reference to the Fair Market Value of a share of Common Stock or according to any formula or method deemed appropriate by the Committee, in its sole discretion, including, but not limited to, achievement of Performance Goals or other specific financial, production, sales or cost performance objectives that the Committee believes to be relevant to the Company's business and/or remaining in the employ of the Company or a Subsidiary for a specified period of time. Performance Awards may be paid in cash, shares of Common Stock, or other consideration, or any combination thereof. If payable in shares of Common Stock, the consideration for the issuance of such shares may be the achievement of the performance objective established at the time of the grant of the Performance Award. Performance Awards may be payable in a single payment or in installments and may be payable at a specified date or dates or upon attaining the performance objective. The extent to which any applicable performance objective has been achieved shall be conclusively determined by the Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.8 **Dividend Equivalent Rights.** The Committee may grant a Dividend Equivalent Right to any Participant, either as a component of another Award or as a separate Award. The terms and conditions of the Dividend Equivalent Right shall be specified by the grant. Dividend equivalents credited to the holder of a Dividend Equivalent Right may be paid currently or may be deemed to be reinvested in additional shares of Common Stock (which may thereafter accrue additional dividend equivalents). Any such reinvestment shall be at the Fair Market Value at the time thereof. Dividend Equivalent Rights may be settled in cash or shares of Common Stock, or a combination thereof, in a single payment or in installments. A Dividend Equivalent Right granted as a component of another Award may provide that such Dividend Equivalent Right shall be settled upon exercise, settlement, or payment of, or lapse of restrictions on, such other Award, and that such Dividend Equivalent Right granted as a component of another Award may also contain terms and conditions different from such other Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.9 **Other Awards.** The Committee may grant to any Participant other forms of Awards, based upon, payable in, or otherwise related to, in whole or in part, shares of Common Stock, if the Committee determines that such other form of Award is consistent with the purpose and restrictions of this Plan. The terms and conditions of such other form of Award shall be specified by the grant. Such Other Awards may be granted for no cash consideration, for such minimum consideration as may be required by Applicable Law, or for such other consideration as may be specified by the grant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.10 **Performance Goals.** Awards of Restricted Stock, Restricted Stock Units, Performance Award and Other Awards (whether relating to cash or shares of Common Stock) under the Plan may be made subject to the attainment of Performance Goals relating to one or more business criteria which may consist of one or more or any combination of the following criteria or of any other criteria established by the Committee in its sole discretion: cash flow; cost; revenues; sales; ratio of debt to debt plus equity; net borrowing, credit quality or debt ratings; profit before tax; economic profit; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; gross margin; earnings per share (whether on a pre-tax, after-tax, operational or other basis); operating earnings; capital expenditures; expenses or expense levels; economic value added; ratio of operating earnings to capital spending or any other operating ratios; free cash flow; net profit; net sales; net asset value per share; the accomplishment of mergers, acquisitions, dispositions, public offerings or similar extraordinary business transactions; sales growth; price of the Company's Common Stock; return on assets, equity or stockholder**s'** equity; market share; inventory levels, inventory turn or shrinkage; or total return to stockholder**s** ("***Performance Criteria***"). Any Performance Criteria may be used to measure the performance of the Company as a whole or any business unit of the Company and may be measured relative to a peer group or index. Any Performance Criteria may include or exclude (a) events that are of an unusual nature or indicate infrequency of occurrence, (b) gains or losses on the disposition of a business, (c) changes in tax or accounting regulations or laws, (d) the effect of a merger or acquisition, as identified in the Company's quarterly and annual earnings releases, or (e) other similar occurrences. In all other respects, Performance Criteria shall be calculated in accordance with the Company's financial statements, under generally accepted accounting principles, or under a methodology established by the Committee prior to the issuance of an Award which is consistently applied and identified in the audited financial statements, including footnotes, or the Compensation Discussion and Analysis section of the Company's annual report.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.11 **Tandem Awards.** The Committee may grant two or more Incentives in one Award in the form of a "tandem Award," so that the right of the Participant to exercise one Incentive shall be canceled if, and to the extent, the other Incentive is exercised. For example, if a Stock Option and a SAR are issued in a tandem Award, and the Participant exercises the SAR with respect to one hundred (100) shares of Common Stock, the right of the Participant to exercise the related Stock Option shall be canceled to the extent of one hundred (100) shares of Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.12 **Recoupment for Restatements.** Notwithstanding any other language in this Plan to the contrary, the Company may recoup all or any portion of any shares or cash paid to a Participant in connection with an Award, in the event of a restatement of the Company's financial statements as set forth in the Company's clawback policy as approved by the Company's Board from time to time.

**ARTICLE 7**

**AWARD PERIOD; VESTING**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 **Award Period.** Subject to the other provisions of this Plan, the Committee may, in its discretion, provide that an Incentive may not be exercised in whole or in part for any period or periods of time or beyond any date specified in the Award Agreement. Except as provided in the Award Agreement, an Incentive may be exercised in whole or in part at any time during its term. The Award Period for an Incentive shall be reduced or terminated upon Termination of Service. No Incentive granted under the Plan may be exercised at any time after the end of its Award Period. No portion of any Incentive may be exercised after the expiration of ten (10) years from its Date of Grant. However, if an Employee owns or is deemed to own (by reason of the attribution rules of Section 424(d) of the Code) more than ten percent (10%) of the combined voting power of all classes of stock of the Company (or any parent or Subsidiary) and an Incentive Stock Option is granted to such Employee, the term of such Incentive Stock Option (to the extent required by the Code at the time of grant) shall be no more than five (5) years from the Date of Grant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 **Vesting.** The Committee, in its sole discretion, may determine that an Incentive will be immediately vested in whole or in part, or that all or any portion may not be vested until a date, or dates, subsequent to its Date of Grant, or until the occurrence of one or more specified events, subject in any case to the terms of the Plan. If the Committee imposes conditions upon vesting, then, subsequent to the Date of Grant, the Committee may, in its sole discretion, accelerate the date on which all or any portion of the Incentive may be vested.

**ARTICLE 8**

**EXERCISE OR CONVERSION OF INCENTIVE**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 **In General.** A vested Incentive may be exercised or converted, during its Award Period, subject to limitations and restrictions set forth in the Award Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2 **Securities Law and Exchange Restrictions.** In no event may an Incentive be exercised or shares of Common Stock issued pursuant to an Award if a necessary listing or quotation of the shares of Common Stock on a stock exchange or inter-dealer quotation system or any registration under state or federal securities laws required under the circumstances has not been accomplished.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3 **Exercise of Stock Option.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **In General.** If a Stock Option is exercisable prior to the time it is vested, the Common Stock obtained on the exercise of the Stock Option shall be Restricted Stock which is subject to the applicable provisions of the Plan and the Award Agreement. If the Committee imposes conditions upon exercise, then subsequent to the Date of Grant, the Committee may, in its sole discretion, accelerate the date on which all or any portion of the Stock Option may be exercised. No Stock Option may be exercised for a fractional share of Common Stock. The granting of a Stock Option shall impose no obligation upon the Participant to exercise that Stock Option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **Notice and Payment.** Subject to such administrative regulations as the Committee may from time to time adopt, a Stock Option may be exercised by the delivery of written notice to the Committee setting forth the number of shares of Common Stock with respect to which the Stock Option is to be exercised and the date of exercise thereof (the "***Exercise Date***") which shall be at least three (3) days after giving such notice unless an earlier time shall have been mutually agreed upon. On the Exercise Date, the Participant shall deliver to the Company consideration with a value equal to the total Option Price of the shares to be purchased (plus any employment tax withholding or other tax payment due with respect to such Award), payable as provided in the Award Agreement, which may provide for payment in any one or more of the following ways: (i) cash or check, bank draft, or money order payable to the order of the Company, (ii) Common Stock (including Restricted Stock) owned by the Participant on the Exercise Date, valued at its Fair Market Value on the Exercise Date, and which the Participant has not acquired from the Company within six (6) months prior to the Exercise Date, (iii) by delivery (including by FAX or electronic transmission) to the Company or its designated agent of an executed irrevocable option exercise form together with irrevocable instructions from the Participant to a broker or dealer, reasonably acceptable to the Company, to sell certain of the shares of Common Stock purchased upon exercise of the Stock Option or to pledge such shares as collateral for a loan and promptly deliver to the Company the amount of sale or loan proceeds necessary to pay such purchase price, and/or (iv) in any other form of valid consideration that is acceptable to the Committee in its sole discretion. In the event that shares of Restricted Stock are tendered as consideration for the exercise of a Stock Option, a number of shares of Common Stock issued upon the exercise of the Stock Option equal to the number of shares of Restricted Stock used as consideration therefor shall be subject to the same restrictions and provisions as the Restricted Stock so tendered.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **Issuance of Certificate.** Except as otherwise provided in <u>Section 6.4</u> hereof (with respect to shares of Restricted Stock) or in the applicable Award Agreement, upon payment of all amounts due from the Participant, the Company shall cause the Common Stock then being purchased to be registered in the Participant's name (or the person exercising the Participant's Stock Option in the event of his or her death), but shall not issue certificates for the Common Stock unless the Participant or such other person requests delivery of the certificates for the Common Stock, in writing in accordance with the procedures established by the Committee. The Company shall deliver certificates to the Participant (or the person exercising the Participant's Stock Option in the event of his or her death) as soon as administratively practicable following the Company's receipt of a written request from the Participant or such other person for delivery of the certificates. Notwithstanding the forgoing, if the Participant has exercised an Incentive Stock Option, the Company may at its option retain physical possession of the certificate evidencing the shares acquired upon exercise until the expiration of the holding periods described in Section 422(a)(1) of the Code. Any obligation of the Company to deliver shares of Common Stock shall, however, be subject to the condition that, if at any time the Committee shall determine in its discretion that the listing, registration, or qualification of the Stock Option or the Common Stock upon any securities exchange or inter-dealer quotation system or under any state or federal law, or the consent or approval of any governmental regulatory body, is necessary as a condition of, or in connection with, the Stock Option or the issuance or purchase of shares of Common Stock thereunder, the Stock Option may not be exercised in whole or in part unless such listing, registration, qualification, consent, or approval shall have been effected or obtained free of any conditions not reasonably acceptable to the Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **Failure to Pay.** Except as may otherwise be provided in an Award Agreement, if the Participant fails to pay for any of the Common Stock specified in such notice or fails to accept delivery thereof, that portion of the Participant's Stock Option and right to purchase such Common Stock may be forfeited by the Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4 **SARs.** Subject to the conditions of this <u>Section 8.4</u> and such administrative regulations as the Committee may from time to time adopt, a SAR may be exercised by the delivery (including by FAX) of written notice to the Committee setting forth the number of shares of Common Stock with respect to which the SAR is to be exercised and the date of exercise thereof (the "***Exercise Date***") which shall be at least three (3) days after giving such notice unless an earlier time shall have been mutually agreed upon. Subject to the terms of the Award Agreement and only if permissible under Section 409A of the Code and the regulations or other guidance issued thereunder (or, if not so permissible, at such time as permitted by Section 409A of the Code and the regulations or other guidance issued thereunder), the Participant shall receive from the Company in exchange therefor in the discretion of the Committee, and subject to the terms of the Award Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) cash in an amount equal to the excess (if any) of the Fair Market Value (as of the Exercise Date, or if provided in the Award Agreement, conversion, of the SAR) per share of Common Stock over the SAR Price per share specified in such SAR, multiplied by the total number of shares of Common Stock of the SAR being surrendered;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) that number of shares of Common Stock having an aggregate Fair Market Value (as of the Exercise Date, or if provided in the Award Agreement, conversion, of the SAR) equal to the amount of cash otherwise payable to the Participant, with a cash settlement to be made for any fractional share interests; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the Company may settle such obligation in part with shares of Common Stock and in part with cash.

The distribution of any cash or Common Stock pursuant to the foregoing sentence shall be made at such time as set forth in the Award Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.5 **Disqualifying Disposition of Incentive Stock Option.** If shares of Common Stock acquired upon exercise of an Incentive Stock Option are disposed of by a Participant prior to the expiration of either two (2) years from the Date of Grant of such Stock Option or one (1) year from the transfer of shares of Common Stock to the Participant pursuant to the exercise of such Stock Option, or in any other disqualifying disposition within the meaning of Section 422 of the Code, such Participant shall notify the Company in writing of the date and terms of such disposition. A disqualifying disposition by a Participant shall not affect the status of any other Stock Option granted under the Plan as an Incentive Stock Option within the meaning of Section 422 of the Code.

**ARTICLE 9**

**AMENDMENT OR DISCONTINUANCE**

Subject to the limitations set forth in this <u>Article 9</u>, the Board may at any time and from time to time, without the consent of the Participants, alter, amend, revise, suspend, or discontinue the Plan in whole or in part; provided, however, that no amendment for which stockholder approval is required either (a) by any securities exchange or inter-dealer quotation system on which the Common Stock is listed or traded or (b) in order for the Plan and Incentives awarded under the Plan to continue to comply with Sections 421, and 422 of the Code, including any successors to such Sections, or other Applicable Law, shall be effective unless such amendment shall be approved by the requisite vote of the stockholders of the Company entitled to vote thereon. Any such amendment shall, to the extent deemed necessary or advisable by the Committee, be applicable to any outstanding Incentives theretofore granted under the Plan, notwithstanding any contrary provisions contained in any Award Agreement. In the event of any such amendment to the Plan, the holder of any Incentive outstanding under the Plan shall, upon request of the Committee and as a condition to the exercisability thereof, execute a conforming amendment in the form prescribed by the Committee to any Award Agreement relating thereto. Notwithstanding anything contained in this Plan to the contrary, unless required by law, no action contemplated or permitted by this <u>Article 9</u> shall adversely affect any rights of Participants or obligations of the Company to Participants with respect to any Incentive theretofore granted under the Plan without the consent of the affected Participant.

**ARTICLE 10**

**TERM**

The Plan shall be effective from the Effective Date. Unless sooner terminated by action of the Board, the Plan will terminate on the tenth anniversary of the Effective Date, but Incentives granted before that date will continue to be effective in accordance with their terms and conditions.

**ARTICLE 11**

**CAPITAL ADJUSTMENTS**

In the event that any dividend or other distribution (whether in the form of cash, Common Stock, other securities, or other property), recapitalization, stock split, reverse stock split, rights offering, reorganization, merger, consolidation, split-up, spin-off, split-off, combination, subdivision, repurchase, or exchange of Common Stock or other securities of the Company, issuance of warrants or other rights to purchase Common Stock or other securities of the Company, or other similar corporate transaction or event affects the fair value of an Award, then the Committee shall adjust any or all of the following so that the fair value of the Award immediately after the transaction or event is equal to the fair value of the Award immediately prior to the transaction or event (a) the number of shares and type of Common Stock (or the securities or property) which thereafter may be made the subject of Awards, (b) the number of shares and type of Common Stock (or other securities or property) subject to outstanding Awards, (c) the number of shares and type of Common Stock (or other securities or property) specified as the annual per-participant limitation under <u>Section 5.1</u> of the Plan, (d) the Option Price of each outstanding Award, (v) the amount, if any, the Company pays for forfeited shares of Common Stock in accordance with <u>Section 6.4</u>, and (e) the number of or SAR Price of shares of Common Stock then subject to outstanding SARs previously granted and unexercised under the Plan, to the end that the same proportion of the Company's issued and outstanding shares of Common Stock in each instance shall remain subject to exercise at the same aggregate SAR Price; provided, however, that the number of shares of Common Stock (or other securities or property) subject to any Award shall always be a whole number. Notwithstanding the foregoing, no such adjustment shall be made or authorized to the extent that such adjustment would cause the Plan or any Stock Option to violate Section 422 of the Code or Section 409A of the Code. Such adjustments shall be made in accordance with the rules of any securities exchange, stock market, or stock quotation system to which the Company is subject.

Upon the occurrence of any such adjustment, the Company shall provide notice to each affected Participant of its computation of such adjustment which shall be conclusive and shall be binding upon each such Participant.

**ARTICLE 12**

**RECAPITALIZATION, MERGER AND CONSOLIDATION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.1 **No Effect on Company's Authority.** The existence of this Plan and Incentives granted hereunder shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations, or other changes in the Company's capital structure and its business, or any Change in Control, or any merger or consolidation of the Company, or any issuance of bonds, debentures, preferred or preference stocks ranking prior to or otherwise affecting the Common Stock or the rights thereof (or any rights, options, or warrants to purchase same), or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.2 **Conversion of Incentives Where Company Survives.** Subject to any required action by the stockholders and except as otherwise provided by <u>Section 12.4</u> hereof or as may be required to comply with Section 409A of the Code and the regulations or other guidance issued thereunder, if the Company shall be the surviving or resulting corporation in any merger, consolidation or share exchange, any Incentive granted hereunder shall pertain to and apply to the securities or rights (including cash, property, or assets) to which a holder of the number of shares of Common Stock subject to the Incentive would have been entitled.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.3 **Exchange or Cancellation of Incentives Where Company Does Not Survive.** Except as otherwise provided by <u>Section 12.4</u> hereof or as may be required to comply with Section 409A of the Code and the regulations or other guidance issued thereunder, in the event of any merger, consolidation or share exchange pursuant to which the Company is not the surviving or resulting corporation, there shall be substituted for each share of Common Stock subject to the unexercised portions of outstanding Incentives, that number of shares of each class of stock or other securities or that amount of cash, property, or assets of the surviving, resulting or consolidated company which were distributed or distributable to the stockholders of the Company in respect to each share of Common Stock held by them, such outstanding Incentives to be thereafter exercisable for such stock, securities, cash, or property in accordance with their terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.4 **Cancellation of Incentives.** Notwithstanding the provisions of <u>Sections 12.2 and 12.3</u> hereof, and except as may be required to comply with Section 409A of the Code and the regulations or other guidance issued thereunder, all Incentives granted hereunder may be canceled by the Company, in its sole discretion, as of the effective date of any Change in Control, merger, consolidation or share exchange, or any issuance of bonds, debentures, preferred or preference stocks ranking prior to or otherwise affecting the Common Stock or the rights thereof (or any rights, options, or warrants to purchase same), or of any proposed sale of all or substantially all of the assets of the Company, or of any dissolution or liquidation of the Company, by either:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) giving notice to each holder thereof or his personal representative of its intention to cancel those Incentives for which the issuance of shares of Common Stock involved payment by the Participant for such shares, and permitting the purchase during the thirty (30) day period next preceding such effective date of any or all of the shares of Common Stock subject to such outstanding Incentives, including in the Board's discretion some or all of the shares as to which such Incentives would not otherwise be vested and exercisable; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) in the case of Incentives that are either (i) settled only in shares of Common Stock, or (ii) at the election of the Participant, settled in shares of Common Stock, paying the holder thereof an amount equal to a reasonable estimate of the difference between the net amount per share payable in such transaction or as a result of such transaction, and the price per share of such Incentive to be paid by the Participant (hereinafter the "***Spread***"), multiplied by the number of shares subject to the Incentive. In cases where the shares constitute, or would after exercise, constitute Restricted Stock, the Company, in its discretion, may include some or all of those shares in the calculation of the amount payable hereunder. In estimating the Spread, appropriate adjustments to give effect to the existence of the Incentives shall be made, such as deeming the Incentives to have been exercised, with the Company receiving the exercise price payable thereunder, and treating the shares receivable upon exercise of the Incentives as being outstanding in determining the net amount per share. In cases where the proposed transaction consists of the acquisition of assets of the Company, the net amount per share shall be calculated on the basis of the net amount receivable with respect to shares of Common Stock upon a distribution and liquidation by the Company after giving effect to expenses and charges, including, but not limited to, taxes, payable by the Company before such liquidation could be completed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) An Award that by its terms would be fully vested or exercisable upon a Change in Control will be considered vested or exercisable for purposes of <u>Section 12.4(a)</u> hereof.

**ARTICLE 13**

**LIQUIDATION OR DISSOLUTION**

Subject to <u>Section 12.4</u> hereof, in case the Company shall, at any time while any Incentive under this Plan shall be in force and remain unexpired, (a) sell all or substantially all of its property, or (b) dissolve, liquidate, or wind up its affairs, then each Participant shall be entitled to receive, in lieu of each share of Common Stock of the Company which such Participant would have been entitled to receive under the Incentive, the same kind and amount of any securities or assets as may be issuable, distributable, or payable upon any such sale, dissolution, liquidation, or winding up with respect to each share of Common Stock of the Company. If the Company shall, at any time prior to the expiration of any Incentive, make any partial distribution of its assets, in the nature of a partial liquidation, whether payable in cash or in kind (but excluding the distribution of a cash dividend payable out of earned surplus and designated as such) and an adjustment is determined by the Committee to be appropriate to prevent the dilution of the benefits or potential benefits intended to be made available under the Plan, then the Committee shall, in such manner as it may deem equitable, make such adjustment in accordance with the provisions of <u>Article 11</u> hereof.

**ARTICLE 14**

**INCENTIVES IN SUBSTITUTION FOR**

**INCENTIVES GRANTED BY OTHER ENTITIES**

Incentives may be granted under the Plan from time to time in substitution for similar instruments held by employees, independent contractors or directors of a corporation, partnership, or limited liability company who become or are about to become Employees, Contractors or Outside Directors of the Company or any Subsidiary as a result of a merger or consolidation of the employing corporation with the Company, the acquisition by the Company of equity of the employing entity, or any other similar transaction pursuant to which the Company becomes the successor employer. The terms and conditions of the substitute Incentives so granted may vary from the terms and conditions set forth in this Plan to such extent as the Committee at the time of grant may deem appropriate to conform, in whole or in part, to the provisions of the Incentives in substitution for which they are granted.

**ARTICLE 15**

**MISCELLANEOUS PROVISIONS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.1 **Investment Intent.** The Company may require that there be presented to and filed with it by any Participant under the Plan, such evidence as it may deem necessary to establish that the Incentives granted or the shares of Common Stock to be purchased or transferred are being acquired for investment and not with a view to their distribution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.2 **No Right to Continued Employment.** Neither the Plan nor any Incentive granted under the Plan shall confer upon any Participant any right with respect to continuance of employment by the Company or any Subsidiary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.3 **Indemnification of Board and Committee.** No member of the Board or the Committee, nor any officer or Employee of the Company acting on behalf of the Board or the Committee, shall be personally liable for any action, determination, or interpretation taken or made in good faith with respect to the Plan, and all members of the Board and the Committee, each officer of the Company, and each Employee of the Company acting on behalf of the Board or the Committee shall, to the extent permitted by law, be fully indemnified and protected by the Company in respect of any such action, determination, or interpretation to the fullest extent provided by law. Except to the extent required by any unwaiveable requirement under any applicable law, no member of the Board or the Committee (and no Subsidiary of the Company) shall have any duties or liabilities, including, without limitation, any fiduciary duties, to any Participant (or any Person claiming by or through any Participant) as a result of this Plan, any Award Agreement, or any Claim arising hereunder and, to the fullest extent permitted under any applicable law, each Participant (as consideration for receiving and accepting an Award Agreement) irrevocably waives and releases any right or opportunity such Participant might have to assert (or participate or cooperate in) any Claim against any member of the Board or the Committee and any Subsidiary of the Company arising out of this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.4 **Effect of the Plan.** Neither the adoption of this Plan nor any action of the Board or the Committee shall be deemed to give any person any right to be granted an Award or any other rights except as may be evidenced by an Award Agreement, or any amendment thereto, duly authorized by the Committee and executed on behalf of the Company, and then only to the extent and upon the terms and conditions expressly set forth therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.5 **Compliance With Other Laws and Regulations.** Notwithstanding anything contained herein to the contrary, the Company shall not be required to sell or issue shares of Common Stock under any Incentive if the issuance thereof would constitute a violation by the Participant or the Company of any provisions of any law or regulation of any governmental authority or any national securities exchange or inter-dealer quotation system or other forum in which shares of Common Stock are quoted or traded (including without limitation Section 16 of the Exchange Act); and, as a condition of any sale or issuance of shares of Common Stock under an Incentive, the Committee may require such agreements or undertakings, if any, as the Committee may deem necessary or advisable to assure compliance with any such law or regulation. The Plan, the grant and exercise of Incentives hereunder, and the obligation of the Company to sell and deliver shares of Common Stock, shall be subject to all applicable federal and state laws, rules and regulations and to such approvals by any government or regulatory agency as may be required.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.6 **Foreign Participation.** To assure the viability of Awards granted to Participants employed in foreign countries, the Committee may provide for such special terms as it may consider necessary or appropriate to accommodate differences in local law, tax policy or custom. Moreover, the Committee may approve such supplements to, or amendments, restatements or alternative versions of, this Plan as it determines is necessary or appropriate for such purposes. Any such amendment, restatement or alternative versions that the Committee approves for purposes of using this Plan in a foreign country will not affect the terms of this Plan for any other country.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.7 **Tax Requirements.** The Company or, if applicable, any Subsidiary (for purposes of this <u>Section 15.7</u>, the term "***Company***" shall be deemed to include any applicable Subsidiary), shall have the right to deduct from all amounts paid in cash or other form in connection with the Plan, any federal, state, local, or other taxes required by law to be withheld in connection with an Award granted under this Plan. The Company may, in its sole discretion, also require the Participant receiving shares of Common Stock issued under the Plan to pay the Company the amount of any taxes that the Company is required to withhold in connection with the Participant's income arising with respect to the Award. Such payments shall be required to be made when requested by the Company and may be required to be made prior to the delivery of any certificate representing shares of Common Stock. Such payment may be made by (a) the delivery of cash to the Company in an amount that equals or exceeds (to avoid the issuance of fractional shares under (c) below) the required tax withholding obligations of the Company; (b) if the Company, in its sole discretion, so consents in writing, the actual delivery by the exercising Participant to the Company of shares of Common Stock that the Participant has not acquired from the Company within six (6) months prior to the date of exercise, which shares so delivered have an aggregate Fair Market Value that equals or exceeds (to avoid the issuance of fractional shares under (c) below) the required tax withholding payment; (c) if the Company, in its sole discretion, so consents in writing, the Company's withholding of a number of shares to be delivered upon the exercise of the Stock Option, which shares so withheld have an aggregate Fair Market Value that equals (but does not exceed) the required tax withholding payment; or (d) any combination of (a), (b), or (c). The Company may, in its sole discretion, withhold any such taxes from any other cash remuneration otherwise paid by the Company to the Participant. The Committee may in the Award Agreement impose any additional tax requirements or provisions that the Committee deems necessary or desirable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.8 **Assignability.** Incentive Stock Options may not be transferred, assigned, pledged, hypothecated or otherwise conveyed or encumbered other than by will or the laws of descent and distribution and may be exercised during the lifetime of the Participant only by the Participant or the Participant's legally authorized representative, and each Award Agreement in respect of an Incentive Stock Option shall so provide. The designation by a Participant of a beneficiary will not constitute a transfer of the Stock Option. The Committee may waive or modify any limitation contained in the preceding sentences of this <u>Section 15.8</u> that is not required for compliance with Section 422 of the Code.

Except as otherwise provided herein, Awards may not be transferred, assigned, pledged, hypothecated or otherwise conveyed or encumbered other than by will or the laws of descent and distribution. Notwithstanding the foregoing, the Committee may, in its discretion, authorize all or a portion of a Nonqualified Stock Option or SAR to be granted to a Participant on terms which permit transfer by such Participant to (a) the spouse (or former spouse), children or grandchildren of the Participant ("***Immediate Family Members***"), (b) a trust or trusts for the exclusive benefit of such Immediate Family Members, (c) a partnership in which the only partners are (1) such Immediate Family Members and/or (2) entities which are controlled by the Participant and/or Immediate Family Members, (d) an entity exempt from federal income tax pursuant to Section 501(c)(3) of the Code or any successor provision, or (e) a split interest trust or pooled income fund described in Section 2522(c)(2) of the Code or any successor provision, provided that (x) there shall be no consideration for any such transfer, (y) the Award Agreement pursuant to which such Nonqualified Stock Option or SAR is granted must be approved by the Committee and must expressly provide for transferability in a manner consistent with this Section, and (z) subsequent transfers of transferred Nonqualified Stock Options or SARs shall be prohibited except those by will or the laws of descent and distribution.

Following any transfer, any such Nonqualified Stock Option and SAR shall continue to be subject to the same terms and conditions as were applicable immediately prior to transfer, provided that for purposes of <u>Articles 8, 9, 11, 13 and 15</u> hereof the term "***Participant***" shall be deemed to include the transferee. The events of Termination of Service shall continue to be applied with respect to the original Participant, following which the Nonqualified Stock Options and SARs shall be exercisable or convertible by the transferee only to the extent and for the periods specified in the Award Agreement. The Committee and the Company shall have no obligation to inform any transferee of a Nonqualified Stock Option or SAR of any expiration, termination, lapse or acceleration of such Stock Option or SAR. The Company shall have no obligation to register with any federal or state securities commission or agency any Common Stock issuable or issued under a Nonqualified Stock Option or SAR that has been transferred by a Participant under this <u>Section 15.8</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.9 **Use of Proceeds.** Proceeds from the sale of shares of Common Stock pursuant to Incentives granted under this Plan shall constitute general funds of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.10 **Legend.** Each certificate representing shares of Restricted Stock issued to a Participant shall bear the following legend, or a similar legend deemed by the Company to constitute an appropriate notice of the provisions hereof (any such certificate not having such legend shall be surrendered upon demand by the Company and so endorsed):

On the face of the certificate:

"Transfer of this stock is restricted in accordance with conditions printed on the reverse of this certificate."

On the reverse:

"The shares of stock evidenced by this certificate are subject to and transferable only in accordance with that certain NanoVibronix, Inc. 2024 Long-Term Incentive Plan, a copy of which is on file at the principal office of the Company in Tyler, Texas. No transfer or pledge of the shares evidenced hereby may be made except in accordance with and subject to the provisions of said Plan. By acceptance of this certificate, any holder, transferee or pledgee hereof agrees to be bound by all of the provisions of said Plan."

The following legend shall be inserted on a certificate evidencing Common Stock issued under the Plan if the shares were not issued in a transaction registered under the applicable federal and state securities laws:

"Shares of stock represented by this certificate have been acquired by the holder for investment and not for resale, transfer or distribution, have been issued pursuant to exemptions from the registration requirements of applicable state and federal securities laws, and may not be offered for sale, sold or transferred other than pursuant to effective registration under such laws, or in transactions otherwise in compliance with such laws, and upon evidence satisfactory to the Company of compliance with such laws, as to which the Company may rely upon an opinion of counsel satisfactory to the Company."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.11 **Governing Law.** The Plan shall be governed by, construed, and enforced in accordance with the laws of the State of Delaware (excluding any conflict of laws, rule, or principle of Delaware law that might refer the governance, construction, or interpretation of this Plan to the laws of another state). A Participant's sole remedy for any Claim shall be against the Company, and no Participant shall have any claim or right of any nature against any Subsidiary of the Company or any stockholder or existing or former director, officer, or Employee of the Company or any Subsidiary of the Company. The individuals and entities described above in this <u>Section 15.11</u> (other than the Company) shall be third-party beneficiaries of this Plan for purposes of enforcing the terms of this <u>Section 15.11</u>.

A copy of this Plan shall be kept on file in the principal office of the Company in Tyler, Texas.

\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*

IN WITNESS WHEREOF, the Company has caused this instrument to be executed as of December 20 2024, by its Chief Executive Officer pursuant to prior action taken by the Board.

---

| | |
|:---|:---|
| **NANOVIBRONIX, INC.** | **NANOVIBRONIX, INC.** |
| By: | */s/ Brian Murphy* |
| Name: | Brian Murphy |
| Title: | Chief Executive Officer |

---

**ISRAELI APPENDIX TO THE**

**NanoVibronix, Inc.** **2024 LONG-TERM INCENTIVE PLAN**

1. **GENERAL** 

1.1. This appendix, as amended
 from time to time (the "  ***Appendix***") shall apply only to Participants who are residents of the State of Israel
 or those who are deemed to be residents of the State of Israel for the purposes of tax payment. The provisions specified hereunder
 shall form an integral part of the NanoVibronix, Inc. 2024 Long-Term Incentive Plan (the "  ***Plan*** ").

1.2. This Appendix is effective
 with respect to Stock Options to be granted according to the resolution of the Administrator as such term is defined in Section 2
 herein and shall comply with Amendment no. 147 of the Israeli Tax Ordinance [New Version], 5721-1961 (the "  ***Ordinance*** ").

1.3. This Appendix is to be read
 as a continuation of the Plan and only refers to Stock Options granted to Israeli Participants so that they comply with the requirements
 set by the Israeli law in general, and in particular with the provisions of Section 102 of the Ordinance, and any regulations, rules,
 orders or procedures promulgated thereunder, as may be amended or replaced from time to time. For the avoidance of doubt, except
 as expressly provided herein, this Appendix does not add to or modify the Plan in respect of any other category of Participants.

1.4. The Plan and this Appendix
 are complementary to each other and shall be deemed one. In any case of contradiction, whether explicit or implied, between the provisions
 of this Appendix and the Plan, the provisions set out in this Appendix shall prevail with respect to Stock Options granted to Israeli
 Participants.

1.5. Any capitalized terms not
 specifically defined in this Appendix shall be construed according to the interpretation given to them in the Plan.

2. **DEFINITIONS** 

2.1 **" *Administrator* "** means the Board or the Committee as such terms are defined in the Plan.

2.2 "  ***Affiliate*** "
 means any company eligible to be qualified as an "employing company", with respect to the Company, within the meaning
 of Section 102(a) of the Ordinance including any and all rules and regulations promulgated thereunder, as now in effect or as hereafter
 amended.

2.3 "  ***Approved 102 Stock Option***" means a 102 Stock Option granted pursuant to Section 102(b) of the Ordinance, including any and all rules
 and regulations promulgated thereunder, as now in effect or as hereafter amended, and held in trust by a Trustee for the benefit
 of the Participant, pursuant to Section 102. Approved 102 Stock Options may either be classified as Capital Gain Stock Options or
 as Ordinary Income Stock Options.

2.4 "  ***Capital Gain Stock Option***" or **" *CGSO* "** means an Approved 102 Stock Option elected and designated by the
 Company to qualify under the capital gain tax treatment in accordance with the provisions of Section 102(b)(2) of the Ordinance.

2.5 "  ***Companies Law*** "
 means the Israeli Companies Law, 5759-1999, including any rules and regulations promulgated thereunder and any provisions of the
 Companies Ordinance [New Version], 5743-1983 still in effect, as amended from time to time.

2.6 "  ***Controlling Shareholder***" means a controlling shareholder ("  ***Ba'al Shlita***") as such term is defined
 in Section 32(9) of the Ordinance.

2.7 "  ***Date of Grant*** "
 shall have the meaning ascribed to it in the Plan, provided, however, that for the purposes of this Appendix, such date shall not
 be earlier than the first date on which the Company is permitted to effect Stock Option grants under this Appendix and under the
 provisions of the Ordinance, including any and all rules and regulations promulgated thereunder, as now in effect or as hereafter
 amended. For the avoidance of doubt, no Approved 102 Stock Option shall be deemed granted before the lapse of thirty (30) days from
 the due submission of this Appendix to the ITA.

2.8 "  ***Employee*** "
 shall have the meaning ascribed to it in the Plan, and for the purpose hereof, shall also include a director and an individual who
 is serving as an Office Holder or director of any Affiliate of the Company, but excluding any Controlling Shareholder.

2.9 "  ***ITA*** "
 means the Israeli Tax Authorities.

2.10 "  ***Non-Employee*** "
 means a consultant, adviser, service provider, including, *inter alia*, any other person who is part of the upper management
 of the Company and who grants managerial services to the Company, Controlling Shareholder or any other person who is not an Employee.

2.11 "  ***Office Holder*** "
 ("  ***Nose Misra***") as such term is defined in the Companies Law.

2.12 "  ***Participant*** "
 shall have the meaning ascribed to it in the Plan, and for the purpose hereof, shall also mean a person who receives or holds a Stock
 Option under this Appendix.

2.13 "  ***Ordinary Income Stock Option***" or "  ***OISO***" means an Approved 102 Stock Option elected and designated by the
 Company to qualify under the ordinary income tax treatment in accordance with the provisions of Section 102(b)(1) of the Ordinance.

2.14 "  ***102 Stock Option*** "
 means a Stock Option that the Administrator intends to be a "102 Stock Option", which shall only be granted to Employees
 of the Company who are not Controlling Shareholders, and shall be subject to and construed consistently with the requirements of
 Section 102. The Company shall have no liability to a Participant or to any other party, if a Stock Option (or any part thereof),
 which is intended to be a 102 Stock Option, is not a 102 Stock Option. Approved 102 Stock Options may either be classified as Capital
 Gain Stock Options or as Ordinary Income Stock Options.

2.15 "  ***3(i) Stock Option*** "
 means Stock Options that do not contain such terms as will qualify under Section 102 of the Ordinance.

2.16 "  ***Section 102* "** means Section 102 of the Ordinance and any regulations, rules, orders or procedures promulgated thereunder as now in effect or
 as hereafter amended.

2.17 "  ***Trustee*** "
 shall mean any individual or entity appointed by the Company to serve as a trustee and approved by the ITA, all in accordance with
 the provisions of Section 102(a) of the Ordinance.

2.18 "  ***Unapproved 102 Stock Option***" means a 102 Stock Option granted pursuant to Section 102(c) of the Ordinance, including any and all rules
 and regulations promulgated thereunder, as now in effect or as hereafter amended, and not held in trust by a Trustee.

3. **ADMINISTRATION** 

This Appendix shall be administered by the Administrator, pursuant to Article 3 of the Plan. The Administrator may issue shares of Common Stock and/or Stock Options pursuant to this Appendix. In the event of issuance of shares of Common Stock the recipient of such shares shall be deemed a Participant hereunder and the provisions of this Appendix shall apply to such issuance and to the issued shares of Common Stock, *mutatis mutandis*.

4. **ISSUANCE OF STOCK OPTIONS; ELIGIBILITY** 

4.1. The persons eligible for
 participation in the Plan as Participants under this Appendix shall include any Employees, Office Holders and/or Non-Employees of
 the Company as such term is defined above, who are residents of the State of Israel or who are deemed to be residents of the State
 of Israel for the purposes of tax payment; provided, however, that (i) such Employees and Office Holders may only be granted 102
 Stock Options; and (ii) such Non-Employees and/or Controlling Shareholders may only be granted 3(i) Stock Options.

4.2. The Administrator may designate
 Stock Options granted to Israeli Employees pursuant to Section 102 as Approved 102 Stock Options or as Unapproved 102 Incentive Stock
 Options.

4.3. The grant of 102 Stock Options
 shall be made under this Appendix adopted by the Board. Furthermore, the grant of Approved 102 Stock Options shall be conditioned
 upon the approval of this Appendix by the ITA.

4.4. Without derogating from the
 above, the Administrator's election of the type of an Approved 102 Stock Options as CGSO or OISO to be granted to Israeli Employees
 and Office Holders (the "  ***Election*** "), shall be appropriately filed with the ITA before the Date of Grant
 of the first Approved 102 Stock Option under such Election. Such Election shall remain in effect until changed, not earlier than
 the end of the year following the calendar year during which the Company first granted Approved 102 Stock Options under such Election.
 The Company shall grant only the type of Approved 102 Stock Option it has elected in accordance with the Election to all Participants
 who were granted Approved 102 Stock Options during the period indicated above, all in accordance with the provisions of Section 102(g)
 of the Ordinance, including any and all rules and regulations promulgated thereunder, as now in effect or as hereafter amended. For
 avoidance of doubt, such Election shall not prevent the Company from granting Unapproved 102 Stock Options simultaneously.

4.5. All Approved 102 Stock Options
 must be held in trust by a Trustee as described in Section 5 below.

4.6. Each Stock Option granted
 pursuant to this Appendix shall be evidenced by an Award Agreement, substantially in such form attached hereto as approved by the
 Administrator. Each Award Agreement shall state, among other matters, the number of shares of Common Stock to which the Stock Option
 relates, the type of Stock Option granted thereunder (whether an CGSO, OISO, Unapproved 102 Stock Option or a 3(i) Stock Option),
 the vesting dates, the exercise price per share, the expiration date and such other terms and conditions included in the agreement,
 including any such other terms that the Administrator in its discretion may prescribe, provided in all cases that they are consistent
 with this Appendix and the Plan. The Award Agreement shall be delivered to the Participant and executed by the Participant and shall
 incorporate the terms of the Plan and this Appendix by reference, and specify the terms and conditions thereof and any rules applicable
 thereto.

4.7. The designation of Unapproved
 102 Stock Options and Approved 102 Stock Options shall be subject to the terms and conditions set forth in Section 102 and the regulations
 promulgated thereunder.

4.8. Anything in the Plan to the
 contrary notwithstanding, all grants of Stock Options to directors and Office Holders shall be authorized and implemented in accordance
 with the provisions of the Companies Law or any successor act or regulation, as in effect from time to time.

5. **TRUSTEE** 

5.1. Approved 102 Stock Options
 or shares of Common Stock which shall be granted under the Plan and this Appendix and/or any shares of Common Stock allocated or
 issued upon exercise of such Approved 102 Stock Options, shall – notwithstanding anything in the Plan to the contrary –
 be allocated or issued to the Trustee (and registered in the Trustee's name in the register of shareholders of the Company)
 and held for the benefit of the Participants for such period of time as required by Section 102 (the "  ***Restricted Period*** ").
 All certificates representing shares of Common Stock issued to the Trustee under the Plan and this Appendix shall be deposited with
 the Trustee, and shall be held by the Trustee until such time that such shares of Common Stock are released from the aforesaid trust
 as herein provided. In case the requirements for Approved 102 Stock Options are not met, then the Approved 102 Stock Options may
 be treated as Unapproved 102 Stock Options, all in accordance with the provisions of Section 102.

5.2. Anything in the Plan to the
 contrary notwithstanding, the Trustee shall not release any shares of Common Stock allocated or issued upon exercise of Approved
 102 Stock Options prior to the full payment of the Participant's tax liabilities arising from Approved 102 Stock Options, which
 were granted to such Participant, and/or from any shares of Common Stock allocated or issued upon exercise of such Stock Options.

5.3. With respect to any Approved
 102 Stock Option, subject to the provisions of Section 102, a Participant shall not be entitled to sell or release from the trust
 any share of Common Stock received upon the exercise of an Approved 102 Stock Option until the lapse of the Restricted Period required
 under Section 102. Notwithstanding the above, if any such sale or release occurs during the Restricted Period, the tax liabilities
 under Section 102 shall apply to and shall be borne by such Participant.

5.4. Upon receipt of an Approved
 102 Stock Option, the Participant will sign an undertaking to release the Trustee from any liability in respect of any action or
 decision duly taken and bona fide executed in relation with the Plan and this Appendix, or any Approved 102 Stock Option or share
 of Common Stock granted to the Participant thereunder. Such release may be incorporated into the Award Agreement.

5.5. 3(i) Stock Options which
 shall be granted under this Appendix, may, but need not, be issued to the Trustee, and if so issued to the Trustee, shall be held
 for the benefit of the Participant. The Trustee shall hold such Stock Options and the shares of Common Stock issued upon the exercise
 thereof (in the event of an exercise of such Stock Options) pursuant and subject to Section 3(i) of the Ordinance, including any
 and all rules, regulations, orders and procedures promulgated thereunder, as now in effect or as hereafter amended. Anything to the
 contrary notwithstanding, the Trustee shall not release any 3(i) Stock Options held by it and which were not already exercised into
 shares of Common Stock by the Participant, nor shall the Trustee release any shares of Common Stock issued upon the exercise of 3(i)
 Stock Options – in both cases – prior to the full payment of the relevant Participant's tax liabilities arising
 from those 3(i) Stock Options which were granted to him and from any shares of Common Stock issued upon the exercise of such 3(i)
 Stock Options.

6. **FAIR MARKET VALUE FOR TAX PURPOSES** 

The per share exercise price for the shares of Common Stock underlying the Stock Options, shall be determined by the Administrator pursuant to the Plan (the "***Exercise Price***"). The form of consideration for exercising a Stock Option shall be determined by the Administrator pursuant to the Plan, provided, however, that cashless exercise for Stock Options granted under this Appendix, may be implemented by the Company only following the lapse of the Restricted Period, unless otherwise determined by the Administrator with the approval of the ITA, to the extent such approval is necessary to receive and/or to keep any tax benefit pursuant to Section 102.

Without derogating from the terms and conditions of the Plan and this Appendix, solely for the purpose of determining the tax liability pursuant to Section 102(b)(3) of the Ordinance, if at the Date of Grant the Company's shares of Common Stock are listed on any established national securities exchange or a national market system or if the Company's shares of Common Stock will be registered for trading within ninety (90) days following the Date of Grant, the Fair Market Value of a share of Common Stock at the Date of Grant shall be determined in accordance with the average value of the Company's shares on the thirty (30) trading days preceding the Date of Grant or on the thirty (30) trading days following the date of registration for trading, as the case may be.

7. **EXERCISE OF STOCK OPTIONS** 

Stock Options shall be exercised by the Participant's giving a written notice and remitting payment of the total Option Price to the Administrator or to any third party designated by the Administrator (the "***Representative***"), in such form and method as may be determined by the Administrator and the Trustee and, when applicable, in accordance with the requirements of Section 102, which exercise shall be effective upon receipt of such notice by the Administrator or the Representative and the payment of the Option Price at the Company's or the Representative's principal office. With respect to Unapproved 102 Stock Options, if the Participant ceases to be employed by the Company or any Affiliate, the Participant shall extend to the Company and/or its Affiliate a security or guarantee for the payment of tax due at the time of sale of the shares of Common Stock, all in accordance with the provisions of Section 102.

In the event that the Trustee holds shares of Common Stock in trust, the Trustee shall not, with respect to such shares, represent the holder of such shares in any meeting of the stockholders of the Company or any action of the stockholders of the Company by written consent. The Trustee shall provide the Company on such date or as shall be mutually agreed between the Trustee and the Company, with a power-of-attorney to participate and vote in such meetings and execute such actions by written consent with respect to all shares of Common Stock held in trust, if so requested by the Company.

8. **INTEGRATION OF SECTION 102 AND TAX COMMISSIONER'S APPROVAL** 

8.1. With regards to Approved
 102 Stock Options, the provisions of the Plan, this Appendix and the Award of any Award Agreement, the Award Agreement shall be subject
 to the provisions of Section 102 and the Income Tax Commissioner's approval, and the said provisions and permit shall be deemed
 an integral part of the Plan and of the Award Agreement.

8.2. Any provision of Section
 102 and/or the said permit which is necessary in order to receive and/or to keep any tax benefit pursuant to Section 102, which is
 not expressly specified in the Plan, this Appendix or the Award Agreement, shall be considered binding upon the Company and the Participants.

9. **TAX CONSEQUENCES** 

9.1. To the extent permitted by
 Applicable Law, any tax consequences arising from the grant or exercise of any Stock Option, from the payment for shares of Common
 Stock covered thereby or from any other event or act (of the Company, and/or its Affiliates, and/or the Trustee or the Participant),
 hereunder, shall be borne solely by the Participant. The Company and/or its Affiliates and/or the Trustee shall withhold taxes according
 to the requirements under Applicable Law, rules, and regulations, including withholding taxes at source. Furthermore, the Participant
 agrees to indemnify the Company and/or its Affiliates and/or the Trustee and hold them harmless against and from any and all liability
 for any such tax or interest or penalty thereon, including, without limitation, liabilities relating to the necessity to withhold,
 or to have withheld, any such tax from any payment made to the Participant.

9.2. The Company and/or the Trustee
 shall not be required to release any share certificate to a Participant until all required payments have been fully made by the Participant
 and unless the Participant requests delivery of such certificate, in writing in accordance with the procedures established by the
 Administrator.

10. **GOVERNING LAW & JURISDICTION** 

This Appendix shall be governed by and construed and enforced in accordance with the laws of the State of Israel applicable to contracts made and to be performed therein, without giving effect to the principles of conflict of laws. Notwithstanding anything stated herein to the contrary, if and to the extent any issue or matter arises hereunder which involves the application of another jurisdiction or the requirements relating to the administration of Stock Options of any stock exchange or quotation system, then such laws and requirements shall apply and shall govern such issues or matters, in accordance with any Applicable Law. The competent courts of Tel-Aviv, Israel shall have sole jurisdiction to adjudicate any dispute that may arise in connection with the application, interpretation or enforcement of Section 102 including (without limitation) matters involving the Trustee and the Israeli tax consequences of the Stock Options or the shares of Common Stock in trust and the release and transfer of such Stock Options or shares of Common Stock by the Trustee.

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