Document:

hicka20190328_pre14a.htm

Exhibit 10.1

 

 

HICKOK INCORPORATED

AMENDED AND RESTATED

2013 OMNIBUS EQUITY PLAN

 

ARTICLE 1 

General Purpose of Plan; Definitions

 

1.1 Name and Purposes. The name of this plan is the Hickok Incorporated Amended and Restated 2013 Omnibus Equity Plan. The purpose of this Plan is to enable Hickok Incorporated and its Affiliates to: (i) attract and retain skilled and qualified officers, employees, consultants and directors who are expected to contribute to the Company’s success by providing long-term incentive compensation opportunities competitive with those made available by other companies; (ii) motivate participants to achieve the long-term success and growth of the Company; (iii) facilitate ownership of shares of the Company; and (iv) align the interests of the participants with those of the Company’s Shareholders.

 

1.2 Certain Definitions. Unless the context otherwise indicates, the following words used herein shall have the following meanings whenever used in this instrument:

 

	 	
			(a)

				
			“Affiliate” means, with respect to any entity, any entity directly or indirectly controlling, controlled by, or under common control with such entity within the meaning of Section 414(b) or 414(c) of the Code.

			

 

	 	
			(b)

				
			“Award” means any grant under this Plan of a Common Share, Stock Option, Stock Appreciation Right, Restricted Share, Restricted Share Unit or Performance Share to any Plan participant.

			

 

	 	
			(c)

				
			“Board of Directors” means the Board of Directors of the Company, as constituted from time to time.

			

 

	 	
			(d)

				
			“Change in Control” is defined in Section 11.1.

			

 

	 	
			(e)

				
			“Code” means the Internal Revenue Code of 1986, as amended, and any lawful regulations or guidance promulgated thereunder. Whenever reference is made to a specific Internal Revenue Code section, such reference shall be deemed to be a reference to any successor Internal Revenue Code section or sections with the same or similar purpose.

			

 

	 	
			(f)

				
			“Committee” means the entity administering this Plan as provided in Section 2.1.

			

 

	 	
			(g)

				
			“Common Shares” means the Class A common shares, without par value, of the Company.

			

 

 

 

 

	 	
			(h)

				
			“Company” means Hickok Incorporated, a corporation organized under the laws of the State of Ohio and, except for purposes of determining whether a Change in Control has occurred, any corporation or entity that is a successor to Hickok Incorporated or substantially all of the assets of Hickok Incorporated and that assumes the obligations of Hickok Incorporated under this Plan by operation of law or otherwise.

			

 

	 	
			(i)

				
			“Date of Grant” means the date on which the Committee grants an Award.

			

 

	 	
			(j)

				
			“Director” means a member of the Board of Directors.

			

 

	 	
			(k)

				
			“Disability” means a medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months which: (i) renders a participant unable to engage in any substantial gainful activity; or (ii) results in a participant receiving income replacement benefits for at least 3 months under an accident and health plan sponsored by the Company or an Affiliate.

			

 

	 	
			(l)

				
			“Early Retirement” means a participant’s retirement from active employment or active directorship with the Company or an Affiliate on and after the later of attainment of age 62 or the completion of 20 years of service.

			

 

	 	
			(m)

				
			“Effective Date” is defined in Section 17.1.

			

 

	 	
			(n)

				
			“Eligible Director” is defined in Article 4.

			

 

	 	
			(o)

				
			“Employment” as used herein (whether or not capitalized) shall be deemed to refer to (i) a participant’s employment if the participant is an employee of the Company or any of its Affiliates, (ii) a participant’s services as a consultant, if the participant as a consultant to the Company or its Affiliates and (iii) a participant’s services as a non-employee director, if the participant is a non-employee member of the Board of Directors; provided that, for any Award that is or becomes subject to Section 409A of the Code, termination of employment means a “separation from service” under Section 409A of the Code.

			

 

	 	
			(p)

				
			“Exchange Act” means the Securities Exchange Act of 1934, as amended, and any lawful regulations or guidance promulgated thereunder.

			

 

	 	
			(q)

				
			“Exercise Price” means the purchase price of a Share pursuant to a Stock Option or the base value for measuring the appreciation of a Stock Appreciation Right.

			

 

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			(r)

				
			“Fair Market Value” means the closing price of a Share displayed on the OTC Markets, or, if applicable, on a national securities exchange on which the Common Shares are principally traded, on the date for which the determination of Fair Market Value is made, or, if there are no sales of Common Shares on such date, then on the most recent immediately preceding date on which there were any sales of Common Shares. If the Common Shares are not, or cease to be, traded on a national securities exchange, or displayed or published on the OTC Markets, the “Fair Market Value” of Common Shares shall be determined pursuant to a reasonable valuation method prescribed by the Committee. Notwithstanding the foregoing, as of any date, the “Fair Market Value” of Common Shares shall be determined in a manner consistent with Section 409A of the Code and the guidance thereunder.

			

 

	 	
			(s)

				
			“Non-Qualified Stock Option” means a Stock Option that: (i) is governed by Section 83 of the Code; and (ii) does not meet the requirements of Section 422 of the Code.

			

 

	 	
			(t)

				
			“Normal Retirement” means retirement from active employment or active directorship with the Company or an Affiliate on or after attainment of age 65.

			

 

	 	
			(u)

				
			“Outside Director” means a Director who meets the definitions of the term “non-employee director” set forth in Rule 16b 3, or any successor definitions adopted by the Securities and Exchange Commission and similar requirements under any other applicable laws and regulations.

			

 

	 	
			(v)

				
			“Performance Shares” is defined in Article 8.

			

 

	 	
			(w)

				
			“Plan” means this Hickok Incorporated Amended and Restated 2013 Omnibus Equity Plan, as amended from time to time.

			

 

	 	
			(x)

				
			“Plan Year” means the calendar year.

			

 

	 	
			(y)

				
			“Restricted Share Units” is defined in Article 7.

			

 

	 	
			(z)

				
			“Restricted Shares” is defined in Article 7.

			

 

	 	
			(aa)

				
			“Retirement” means Normal Retirement or Early Retirement.

			

 

	 	
			(bb)

				
			“Rule 16b-3” is defined in Article 16.

			

 

	 	
			(cc)

				
			“Section 16 Person” means a person subject to potential liability under Section 16(b) of the Exchange Act with respect to transactions involving equity securities of the Company.

			

 

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			(dd)

				
			“Share” or “Shares” mean one or more of the Common Shares.

			

 

	 	
			(ee)

				
			“Shareholder” means an individual or entity that owns one or more Shares.

			

 

	 	
			(ff)

				
			“Stock Appreciation Rights” and “SARs” mean any right pursuant to an Award granted under Article 6.

			

 

	 	
			(gg)

				
			“Stock Option” means any right to purchase a specified number of Shares at a specified price which is granted pursuant to Article 5.

			

 

	 	
			(hh)

				
			“Stock Power” means a power of attorney executed by a participant and delivered to the Company which authorizes the Company to transfer ownership of Restricted Shares, Performance Shares or Common Shares from the participant to the Company or a third party.

			

 

	 	
			(ii)

				
			“Vested” means, with respect to a Common Share, when the Common Share has been awarded; with respect to a Stock Option, that the time has been reached when the option to purchase Shares first becomes exercisable; with respect to a Stock Appreciation Right, when the Stock Appreciation Right first becomes exercisable for payment; with respect to Restricted Shares, when the Shares are no longer subject to forfeiture and restrictions on transferability; with respect to Restricted Share Units and Performance Shares, when the units or Shares are no longer subject to forfeiture and are convertible to Shares. The words “Vest” and “Vesting” have meanings correlative to the foregoing.

			

 

ARTICLE 2 

Administration

 

2.1 Authority and Duties of the Committee.

 

	 	
			(a)

				
			The Plan shall be administered by a Committee of at least three who are appointed by the Board of Directors from time to time. Unless otherwise determined by the Board of Directors, the Compensation Committee shall serve as the Committee, and all of the members of the Committee shall be Outside Directors. Notwithstanding the requirement that the Committee consist exclusively of Outside Directors, no action or determination by the Committee or an individual then considered to be an Outside Director shall be deemed void because a member of the Committee or such individual fails to satisfy the requirements for being an Outside Director, except to the extent required by applicable law.

			

 

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			(b)

				
			The Committee has the power and authority to grant Awards pursuant to the terms of this Plan to officers, employees, consultants and Eligible Directors.

			

 

	 	
			(c)

				
			The Committee has the sole and exclusive authority, subject to any limitations specifically set forth in this Plan, to:

			

 

	 	
			(i)

				
			select the officers, employees, consultants and Eligible Directors to whom Awards are granted;

			

 

	 	
			(ii)

				
			determine the types of Awards granted and the timing of such Awards;

			

 

	 	
			(iii)

				
			determine the number of Shares to be covered by each Award granted hereunder;

			

 

	 	
			(iv)

				
			determine the other terms and conditions, not inconsistent with the terms of this Plan and any operative employment or other agreement, of any Award granted hereunder; such terms and conditions include, but are not limited to, the Exercise Price, the time or times when Options or Stock Appreciation Rights may be exercised (which may be based on performance objectives), any Vesting, acceleration or waiver of forfeiture restrictions, any performance criteria applicable to an Award, and any restriction or limitation regarding any Option or Stock Appreciation Right or the Common Shares relating thereto, based in each case on such factors as the Committee, in its sole discretion, shall determine;

			

 

	 	
			(v)

				
			determine whether any conditions or objectives related to Awards have been met;

			

 

	 	
			(vi)

				
			subsequently modify or waive any terms and conditions of Awards, not inconsistent with the requirements under Section 409A of the Code or the terms of this Plan and any operative employment or other agreement;

			

 

	 	
			(vii)

				
			adopt, alter and repeal such administrative rules, guidelines and practices governing this Plan as it deems advisable from time to time;

			

 

	 	
			(viii)

				
			promulgate such administrative forms as they from time to time deem necessary or appropriate for administration of the Plan;

			

 

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			(ix)

				
			construe, interpret, administer and implement the terms and provisions of this Plan, any Award and any related agreements;

			

 

	 	
			(x)

				
			correct any defect, supply any omission and reconcile any inconsistency in or between the Plan, any Award and any related agreements;

			

 

	 	
			(xi)

				
			prescribe any legends to be affixed to certificates representing Shares or other interests granted or issued under the Plan; and

			

 

	 	
			(xii)

				
			otherwise supervise the administration of this Plan.

			

 

	 	
			(d)

				
			The Committee shall confer with the Board of Directors regarding the Committee’s intentions prior to making grants under this Plan. Notwithstanding the foregoing, all decisions made by the Committee pursuant to the provisions of this Plan are final and binding on all persons, including the Company, its Shareholders and participants, but may be made by their terms subject to ratification or approval by, the Board of Directors, another committee of the Board of Directors or Shareholders.

			

 

	 	
			(e)

				
			The Company shall furnish the Committee with such clerical and other assistance as is necessary for the performance of the Committee’s duties under the Plan.

			

 

2.2 Delegation of Duties. The Committee may delegate ministerial duties to any other person or persons, and it may employ attorneys, consultants, accountants or other professional advisers for purposes of plan administration at the expense of the Company.

 

2.3 Limitation of Liability. Members of the Board of Directors, members of the Committee and Company employees who are their designees acting under this Plan shall be fully protected in relying in good faith upon the advice of counsel and shall incur no liability except for gross or willful misconduct in the performance of their duties hereunder.

 

ARTICLE 3 

Stock Subject to Plan

 

3.1 Total Shares Limitation. Subject to the provisions of this Article, the maximum number of Shares that may be issued pursuant to Awards granted under this Plan is 400,000, which may be treasury or authorized but unissued Shares.

 

3.2 Participant Limitation. The aggregate number of Shares underlying Awards granted under this Plan to any participant in any Plan Year (including but not limited to Awards of Options and SARs), regardless of whether such Awards are thereafter canceled, forfeited or terminated, shall not exceed 50,000 Shares. The foregoing annual limitation is intended to include the grant of all Awards.

 

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3.3 Awards Not Exercised; Effect of Receipt of Shares. If any outstanding Award, or portion thereof, expires, or is terminated, canceled or forfeited, the Shares that would otherwise be issuable with respect to the unexercised portion of such expired, terminated, canceled or forfeited Award shall be available for subsequent Awards under this Plan. If the Exercise Price of an Award is paid in Shares, Shares underlying the exercised portion of an SAR are not issued upon exercise of the SAR, Shares are withheld to satisfy an individual participant’s tax obligations or Shares are repurchased by the Company on the open market with respect to Awards under this Plan, the Shares received, not issued, withheld or repurchased by the Company in connection therewith shall not be added to the maximum aggregate number of Shares which may be issued under Section 3.1.

 

3.4 Dilution and Other Adjustments. In the event that the Committee determines that any dividend or other distribution (whether in the form of cash, Shares, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, redesignation, reclassification, merger, consolidation, liquidation, split-up, reverse split, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company or other similar corporate transaction or event affects the Shares such that an adjustment is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under this Plan, then the Committee shall, in such manner as it deems equitable, adjust any or all of (i) the number and type of Shares (or other securities or other property) which thereafter may be made the subject of Awards, (ii) the number and type of Shares (or other securities or other property) subject to outstanding Awards, (iii) the limitations set forth above and (iv) the purchase or Exercise Price or any performance objective with respect to any Award; provided, however, that the number of Shares or other securities covered by any Award or to which such Award relates is always a whole number. Notwithstanding the foregoing, the foregoing adjustments shall be made in compliance with Section 409A of the Code, to the extent necessary to avoid its application or avoid adverse tax consequences thereunder.

 

ARTICLE 4 

Participants

 

4.1 Eligibility. Officers, all other active common law employees of the Company or any of its Affiliates, consultants and Outside Directors (each an “Eligible Director”) who are selected by the Committee in its sole discretion are eligible to participate in this Plan. (See Article 13 and Article 17 with respect to the Shareholder approval requirement).

 

4.2 Award Agreements. Awards are contingent upon the participant’s execution of a written agreement in a form prescribed by the Committee. Execution of an award agreement shall constitute the participant’s irrevocable agreement to, and acceptance of, the terms and conditions of the Award set forth in such agreement and of the terms and conditions of the Plan applicable to such Award. Award agreements may differ from time to time and from participant to participant.

 

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ARTICLE 5 

Stock Option Awards

 

5.1 Option Grant. Each Stock Option granted under this Plan will be evidenced by minutes of a meeting, or by a unanimous written consent without a meeting, of the Committee and by a written agreement dated as of the Date of Grant and executed by the Company and by the appropriate participant.

 

5.2 Terms and Conditions of Grants. Stock Options granted under this Plan are subject to the following terms and conditions and may contain such additional terms, conditions, restrictions and contingencies with respect to exercisability and/or with respect to the Shares acquired upon exercise as may be provided in the relevant agreement evidencing the Stock Options, so long as such terms and conditions are not inconsistent with the terms of this Plan and any operative employment or other agreement, as the Committee deems desirable:

 

	 	
			(a)

				
			Exercise Price. Subject to Section 3.4, the Exercise Price will never be less than 100% of the Fair Market Value of the Shares on the Date of Grant. If a variable Exercise Price is specified at the time of grant, the Exercise Price may vary pursuant to a formula or other method established by the Committee; provided, however, that such formula or method will provide for a minimum Exercise Price equal to the Fair Market Value of the Shares on the Date of Grant. Except as otherwise provided in Section 3.4, no subsequent amendment of an outstanding Stock Option may reduce the Exercise Price to less than 100% of the Fair Market Value of the Shares on the Date of Grant. Nothing in this Section 5.2(a) shall be construed as limiting the Committee’s authority to grant premium price Stock Options which do not become exercisable until the Fair Market Value of the underlying Shares exceeds a specified percentage (e.g., 110%) of the Exercise Price; provided, however, that such percentage will never be less than 100%.

			

 

	 	
			(b)

				
			Option Term. Any unexercised portion of a Stock Option granted hereunder shall expire at the end of the stated term of the Stock Option. The Committee shall determine the term of each Stock Option at the time of grant, which term shall not exceed 10 years from the Date of Grant. If a definite term is not specified by the Committee at the time of grant, then the term is deemed to be 10 years. Nothing in this Section 5.2(b) shall be construed as limiting the Committee’s authority to grant Stock Options with a term shorter than 10 years.

			

 

	 	
			(c)

				
			Vesting. Stock Options, or portions thereof, are exercisable at such time or times as determined by the Committee in its discretion at or after grant. If the Committee provides that any Stock Option becomes Vested over a period of time, in full or in installments, the Committee may waive or accelerate such Vesting provisions at any time.

			

 

8

 

 

	 	
			(d)

				
			Method of Exercise. Vested portions of any Stock Option may be exercised in whole or in part at any time during the option term by giving written notice of exercise to the Company specifying the number of Shares to be purchased. The notice must be given by or on behalf of a person entitled to exercise the Stock Option, accompanied by payment in full of the Exercise Price, along with any tax withholding pursuant to Article 15. Subject to the approval of the Committee, the Exercise Price may be paid:

			

 

	 	
			(i)

				
			in cash in any manner satisfactory to the Committee;

			

 

	 	
			(ii)

				
			by tendering (by either actual delivery of Shares or by attestation) unrestricted Shares that are owned on the date of exercise by the person entitled to exercise the Stock Option having an aggregate Fair Market Value on the date of exercise equal to the Exercise Price applicable to such Stock Option exercise;

			

 

	 	
			(iii)

				
			by a combination of cash and unrestricted Shares that are owned on the date of exercise by the person entitled to exercise the Stock Option; and

			

 

	 	
			(iv)

				
			by another method permitted by law and affirmatively approved by the Committee which assures full and immediate payment or satisfaction of the Exercise Price.

			

 

The Committee may withhold its approval for any method of payment for any reason, in its sole discretion, including but not limited to concerns that the proposed method of payment will result in adverse financial accounting treatment or adverse tax treatment for the Company or a participant.

 

	 	
			(e)

				
			Issuance of Shares. The Company will issue or cause to be issued Shares as soon as practicable upon exercise of the Option. No Shares will be issued until full payment has been made. Until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) of the stock certificate evidencing such Shares, no right to vote or receive dividends or any other rights as a Shareholder will exist with respect to the Shares, notwithstanding the exercise of the Option.

			

 

	 	
			(f)

				
			Limitation on Gain. Nothing in this Article 5 shall be construed as prohibiting the Committee from granting Stock Options subject to a limit on the gain that may be realized upon exercise of such Stock Options. Any such limit shall be explicitly provided for in the relevant plan agreement.

			

 

9

 

 

	 	
			(g)

				
			Form. Each Stock Option granted under the Plan shall be deemed to be a Non-Qualified Stock Option and shall not be considered an “incentive stock option” for purposes of Section 422 of the Code.

			

 

	 	
			(h)

				
			Special Limitations on Stock Option Awards. Unless an Award agreement approved by the Committee provides otherwise, Stock Options awarded under this Plan are intended to meet the requirements for exclusion from coverage under Section 409A of the Code and all Stock Option Awards shall be construed and administered accordingly.

			

 

5.3 Termination of Grants Prior to Expiration. Unless otherwise provided in an Award, employment or other agreement entered into between the optionee and the Company and approved by the Committee, either before or after the Date of Grant, the following early termination provisions apply to all Stock Options:

 

	 	
			(a)

				
			Termination by Death. If an optionee’s employment or directorship with the Company or its Affiliates terminates by reason of his or her death, all Stock Options held by such optionee will immediately become Vested, but thereafter may only be exercised (by the legal representative of the optionee’s estate, or by the legatee or heir of the optionee pursuant to a will or the laws of descent and distribution) for a period of one year (or such other period as the Committee may specify at or after the time of grant) from the date of such death, or until the expiration of the original term of the Stock Option, whichever period is shorter.

			

 

	 	
			(b)

				
			Termination by Reason of Disability. If an optionee’s employment or directorship with the Company or its Affiliates terminates by reason of his or her Disability, all Stock Options held by such optionee will immediately become Vested, but thereafter may only be exercised for a period of one year (or such other period as the Committee may specify at or after the time of grant) from the date of such termination of employment, or until the expiration of the original term of the Stock Option, whichever period is shorter. If the optionee dies within such one year period (or such other period as applicable), any unexercised Stock Option held by such optionee will thereafter be exercisable by the legal representative of the optionee’s estate, or by the legatee or heir of the optionee pursuant to a will or the laws of descent and distribution, for the greater of the remainder of the one year period (or other period as applicable) or for a period of 12 months from the date of such death, but in no event shall any portion of the Stock Option be exercisable after its original stated expiration date.

			

 

10

 

 

	 	
			(c)

				
			Termination by Reason of Retirement. If an optionee’s employment or directorship with the Company or its Affiliates terminates by reason of his or her Retirement, all Stock Options held by such optionee immediately become Vested but thereafter may only be exercised for a period of two years (or such other period as the Committee may specify at or after the time of grant) from the date of such Retirement, or until the expiration of the original term of the Stock Option, whichever period is shorter. If the optionee dies within such two year period (or such other period as applicable), any unexercised Stock Option held by such optionee will thereafter be exercisable by the legal representative of the optionee’s estate, or by the legatee or heir of the optionee pursuant to a will or the laws of descent and distribution, for the greater of the remainder of the two year period (or such other period as applicable) or for a period of 12 months from the date of such death, but in no event shall any portion of the Stock Option be exercisable after its original stated expiration date.

			

 

	 	
			(d)

				
			Other Terminations. If an optionee’s employment or directorship with the Company or its Affiliates is terminated for reasons other than his or her death, Disability or Retirement, all Stock Options (or portions thereof) which have not been exercised, whether Vested or not, are automatically forfeited immediately upon termination, except as otherwise provided in the relevant agreement evidencing the Stock Options.

			

 

ARTICLE 6 

Stock Appreciation Rights

 

6.1 SAR Grant and Agreement. Stock Appreciation Rights may be granted under this Plan, either independently or in conjunction with the grant of a Stock Option. Each SAR granted under this Plan will be evidenced by minutes of a meeting, or by a unanimous written consent without a meeting, of the Committee and by a written agreement dated as of the Date of Grant and executed by the Company and by the appropriate participant. Subject to Section 3.4, the Exercise Price of an SAR will never be less than 100% of the Fair Market Value of the Shares on the Date of Grant.

 

6.2 SARs Granted in Conjunction with Option. Stock Appreciation Rights may be granted in conjunction with all or part of any Stock Option granted under this Plan at the same time, and subject to the same terms and conditions, as the grant of the Stock Option, and will be subject to the following terms and conditions:

 

	 	
			(a)

				
			Term. Each Stock Appreciation Right, or applicable portion thereof, granted with respect to a given Stock Option or portion thereof terminates and is no longer exercisable upon the termination or exercise of the related Stock Option, or applicable portion thereof.

			

 

11

 

 

	 	
			(b)

				
			Exercisability. A Stock Appreciation Right is exercisable only at such time or times and to the extent that the Stock Option to which it relates is Vested and exercisable in accordance with the provisions of Article 5 or otherwise as the Committee may determine at or after the time of grant.

			

 

	 	
			(c)

				
			Method of Exercise. A Stock Appreciation Right may be exercised by the surrender of the applicable portion of the related Stock Option. Stock Options which have been so surrendered, in whole or in part, are no longer exercisable to the extent the related Stock Appreciation Rights have been exercised and are deemed to have been exercised for the purpose of the limitation set forth in Article 3 on the number of Shares to be issued under this Plan, but only to the extent of the number of Shares actually issued under the Stock Appreciation Right at the time of exercise. Upon the exercise of a Stock Appreciation Right, subject to satisfaction of tax withholding requirements pursuant to Article 15, the holder of the Stock Appreciation Right is entitled to receive Shares equal in value to the excess of the Fair Market Value of a Share on the exercise date over the Exercise Price per Share specified in the related Stock Option, multiplied by the number of Shares in respect of which the Stock Appreciation Right is exercised. At any time the Exercise Price per Share of the related Stock Option exceeds the Fair Market Value of one Share, the holder of the Stock Appreciation Right shall not be permitted to exercise such right.

			

 

6.3 Independent SARs. Stock Appreciation Rights may be granted without related Stock Options, and independent Stock Appreciation Rights will be subject to the following terms and conditions:

 

	 	
			(a)

				
			Term. Any unexercised portion of an independent Stock Appreciation Right granted hereunder shall expire at the end of the stated term of the Stock Appreciation Right. The Committee shall determine the term of each Stock Appreciation Right at the time of grant, which term shall not exceed ten years from the Date of Grant. The Committee may extend the term of a Stock Appreciation Right, in its discretion, but not beyond a date later than the earlier of (i) the latest date upon which the Stock Appreciation Right could have expired by its original terms under any circumstances or (ii) the date immediately prior to the tenth anniversary of the original Date of Grant. If a definite term is not specified by the Committee at the time of grant, then the term is deemed to be ten years.

			

 

	 	
			(b)

				
			Exercisability. A Stock Appreciation Right is exercisable, in whole or in part, at such time or times as determined by the Committee at or after the time of grant.

			

 

12

 

 

	 	
			(c)

				
			Method of Exercise. A Stock Appreciation Right may be exercised in whole or in part during the term by giving written notice of exercise to the Company specifying the number of Shares in respect of which the Stock Appreciation Right is being exercised. The notice must be given by or on behalf of a person entitled to exercise the Stock Appreciation Right. Upon the exercise of a Stock Appreciation Right, subject to satisfaction of tax withholding requirements pursuant to Article 15, the holder of the Stock Appreciation Right is entitled to receive Shares equal in value to the excess of the Fair Market Value of a Share on the exercise date over the Exercise Price multiplied by the number of Stock Appreciation Rights being exercised. At any time the Fair Market Value of a Share on a proposed exercise date does not exceed the Exercise Price, the holder of the Stock Appreciation Right shall not be permitted to exercise such right.

			

 

	 	
			(d)

				
			Early Termination Prior to Expiration. Unless otherwise provided in an Award, employment or other agreement entered into between the holder of the Stock Appreciation Right and the Company and approved by the Committee, either before or after the Date of Grant, the early termination provisions set forth in Section 5.3 as applied to Stock Options will apply to independent Stock Appreciation Rights.

			

 

6.4 Other Terms and Conditions of SAR Grants. Stock Appreciation Rights are subject to such other terms and conditions, not inconsistent with the provisions of this Plan and any operative employment or other agreement, as are determined from time to time by the Committee.

 

6.5 Special Limitations on SAR Awards. Unless an Award agreement approved by the Committee provides otherwise, Stock Appreciation Rights awarded under this Plan are intended to meet the requirements for exclusion from coverage under Section 409A of the Code and all Stock Appreciation Rights Awards shall be construed and administered accordingly.

 

ARTICLE 7 

Restricted Share and Restricted Share Unit Awards

 

7.1 Restricted Share Grants and Agreements. Restricted Share Awards consist of Shares which are issued by the Company to a participant at no cost or at a purchase price determined by the Committee which may be below their Fair Market Value but which are subject to forfeiture and restrictions on their sale or other transfer by the participant. Each Restricted Share Award granted under this Plan will be evidenced by minutes of a meeting, or by a unanimous written consent without a meeting, of the Committee and by a written agreement dated as of the Date of Grant and executed by the Company and by the participant. The timing of Restricted Share Awards and the number of Shares to be issued (subject to Section 3.2) are to be determined by the Committee in its discretion. By accepting a grant of Restricted Shares, the participant consents to any tax withholding as provided in Article 15.

 

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7.2 Terms and Conditions of Restricted Share Grants. Restricted Shares granted under this Plan are subject to the following terms and conditions, which, except as otherwise provided herein, need not be the same for each participant, and may contain such additional terms, conditions, restrictions and contingencies not inconsistent with the terms of this Plan and any operative employment or other agreement, as the Committee deems desirable:

 

	 	
			(a)

				
			Purchase Price. The Committee shall determine the prices, if any, at which Restricted Shares are to be issued to a participant, which may vary from time to time and from participant to participant and which may be below the Fair Market Value of such Restricted Shares at the Date of Grant.

			

 

	 	
			(b)

				
			Restrictions. All Restricted Shares issued under this Plan will be subject to such restrictions as the Committee may determine, which may include, without limitation, the following:

			

 

	 	
			(i)

				
			a prohibition against the sale, transfer, pledge or other encumbrance of the Restricted Shares, such prohibition to lapse at such time or times as the Committee determines (whether in installments, at the time of the death, Disability or Retirement of the holder of such shares, or otherwise, but subject to the Change in Control provisions in Article 11);

			

 

	 	
			(ii)

				
			a requirement that the participant forfeit such Restricted Shares in the event of termination of the participant’s employment or directorship with the Company or its Affiliates prior to Vesting;

			

 

	 	
			(iii)

				
			a prohibition against employment or retention of the participant by any competitor of the Company or its Affiliates, or against dissemination by the participant of any secret or confidential information belonging to the Company or an Affiliate;

			

 

	 	
			(iv)

				
			any applicable requirements arising under the Securities Act of 1933, as amended, other securities laws, the rules and regulations of the OTC Markets or a national stock exchange or transaction reporting system upon which such Restricted Shares are then listed or quoted and any state laws, rules and regulations, including “blue sky” laws; and

			

 

	 	
			(v)

				
			such additional restrictions as are required to avoid adverse tax consequences under Section 409A of the Code.

			

 

14

 

 

The Committee may at any time waive such restrictions or accelerate the date or dates on which the restrictions will lapse. However, if the Committee determines that restrictions lapse upon the attainment of specified performance objectives, then the provisions of Sections 8.2 and 8.3 will apply.

 

	 	
			(c)

				
			Delivery of Shares. Restricted Shares will be registered in the name of the participant and deposited, together with a Stock Power, with the Company. Each such certificate will bear a legend in substantially the following form:

			

 

	 	
			(i)

				
			“The transferability of this certificate and the Common Shares represented by it are subject to the terms and conditions (including conditions of forfeiture) contained in the Hickok Incorporated Amended and Restated 2013 Omnibus Equity Plan and an agreement entered into between the registered owner and the Company. A copy of this Plan and agreement are on file in the office of the Secretary of the Company.”

			

 

	 	
			(ii)

				
			At the end of any time period during which the Restricted Shares are subject to forfeiture and restrictions on transfer, and after any tax withholding, such Shares will be delivered free of all restrictions (except for any pursuant to Section 14.2) to the participant or other appropriate person and with the foregoing legend removed.

			

 

	 	
			(d)

				
			Forfeiture of Shares. If a participant who holds Restricted Shares fails to satisfy the restrictions, Vesting requirements and other conditions relating to the Restricted Shares prior to the lapse, satisfaction or waiver of such restrictions and conditions, except as may otherwise be determined by the Committee, the participant shall forfeit the Shares and transfer them back to the Company in exchange for a refund of any consideration paid by the participant or such other amount which may be specifically set forth in the Award agreement. A participant shall execute and deliver to the Company one or more Stock Powers with respect to Restricted Shares granted to such participant.

			

 

	 	
			(e)

				
			Voting and Other Rights. During any period in which Restricted Shares are subject to forfeiture and restrictions on transfer, the participant holding such Restricted Shares shall have all the rights of a Shareholder with respect to such Shares, including, without limitation, the right to vote such Shares and the right to receive any dividends paid with respect to such Shares.

			

 

15

 

 

7.3 Restricted Share Unit Awards and Agreements. Restricted Share Unit Awards consist of Shares, cash or a combination of both that will be issued or paid to a participant at a future time or times at no cost or, or with respect to Shares, at a purchase price determined by the Committee that may be below their Fair Market Value if continued employment, continued directorship and/or other terms and conditions specified by the Committee are satisfied. The Committee may determine on the Date of Grant or at any time thereafter whether any payment made with respect to a Restricted Share Unit granted under this Plan will be paid in Shares, cash or a combination of Shares and cash. Each Restricted Share Unit Award granted under this Plan will be evidenced by minutes of a meeting, or by a unanimous written consent without a meeting, of the Committee and by a written agreement dated as of the Date of Grant and executed by the Company and the Plan participant. The timing of Restricted Share Unit Awards and the number of Restricted Share Units to be awarded (subject to Section 3.2) are to be determined by the Committee in its sole discretion. By accepting a Restricted Share Unit Award, the participant agrees to remit to the Company when due any tax withholding as provided in Article 15.

 

7.4 Terms and Conditions of Restricted Share Unit Awards. Restricted Share Unit Awards are subject to the following terms and conditions, which, except as otherwise provided herein, need not be the same for each participant, and may contain such additional terms, conditions, restrictions and contingencies not inconsistent with the terms of this Plan and any operative employment or other agreement, as the Committee deems desirable:

 

	 	
			(a)

				
			Purchase Price. With respect to Restricted Share Units payable in Shares, the Committee shall determine the purchase price, if any, at which Shares are to be issued to a participant after the Vesting of the Restricted Share Units, which purchase price may vary from time to time and among participants and which may be below the Fair Market Value of Shares at the Date of Grant.

			

 

	 	
			(b)

				
			Restrictions. All Restricted Share Units awarded under this Plan will be subject to such restrictions as the Committee may determine, which may include, without limitation, the following:

			

 

	 	
			(i)

				
			a prohibition against the sale, transfer, pledge or other encumbrance of the Restricted Share Unit;

			

 

	 	
			(ii)

				
			a requirement that the participant forfeit such Restricted Share Unit in the event of termination of the participant’s employment or directorship with the Company or its Affiliates prior to Vesting;

			

 

	 	
			(iii)

				
			a prohibition against employment of the participant by, or provision of services by the participant to, any competitor of the Company or its Affiliates, or against dissemination by the participant of any secret or confidential information belonging to the Company or an Affiliate;

			

 

	 	
			(iv)

				
			any applicable requirements arising under the Securities Act of 1933, as amended, other securities laws, the rules and regulations of the OTC Markets or a national stock exchange or transaction reporting system upon which the Common Shares are then listed or quoted and any state laws, rules and interpretations, including “blue sky” laws; and

			

 

16

 

 

	 	
			(v)

				
			such additional restrictions as are required to avoid adverse tax consequences under Section 409A of the Code.

			

 

Subject to any requirements of Section 409A of the Code to avoid adverse tax consequences thereunder, the Committee may at any time waive such restrictions or accelerate the date or dates on which the restrictions will lapse.

 

	 	
			(a)

				
			Performance-Based Restrictions. The Committee may, in its sole discretion, provide restrictions that lapse upon the attainment of specified performance objectives. In such case, the provisions of Sections 8.2 and 8.3 will apply (including, but not limited to, the enumerated performance objectives).

			

 

	 	
			(b)

				
			Voting and Other Rights. A participant holding Restricted Share Units shall not be deemed to be a Shareholder solely because of such units. Such participant shall have no rights of a Shareholder with respect to such units; provided, however, that an Award agreement may provide for payment of an amount of money (or Shares with a Fair Market Value equivalent to such amount) equal to the dividends paid from time to time on the number of Common Shares that would become payable upon vesting of a Restricted Share Unit Award.

			

 

	 	
			(c)

				
			Lapse of Restrictions. If a participant who holds Restricted Share Units satisfies the restrictions and other conditions relating to the Restricted Share Units prior to the lapse or waiver of such restrictions and conditions, the Restricted Share Units shall be converted to, or replaced with, Shares, which are free of all restrictions except for any restrictions pursuant to Section 14.2, or paid in cash or a combination of Shares and cash.

			

 

	 	
			(d)

				
			Delivery of Shares. Any Shares delivered or cash paid to a participant with respect to any Restricted Stock Unit in which the restrictions lapse, are satisfied or are waived shall be delivered or paid to such participant prior to fifteenth day of the third month of the taxable year following the taxable year in which such restrictions lapse, are satisfied or waived. Any such Shares will be registered in the name of the participant and will be free of all restrictions except for any restrictions pursuant to Section 14.2.

			

 

	 	
			(e)

				
			Forfeiture of Restricted Share Units. If a participant who holds Restricted Share Units fails to satisfy the restrictions, Vesting requirements and other conditions relating to the Restricted Share Units prior to the lapse, satisfaction or waiver of such restrictions and conditions, except as may otherwise be determined by the Committee, the participant shall forfeit the Restricted Share Units.

			

 

17

 

 

	 	
			(f)

				
			Termination. A Restricted Share Unit Award or unearned portion thereof will terminate without the issuance of Shares on the termination date specified on the Date of Grant or upon the termination of employment or directorship of the participant during the time period or periods specified by the Committee during which any performance objectives must be met (the “Performance Period”). If a participant’s employment or directorship with the Company or its Affiliates terminates by reason of his or her death, Disability or Retirement, the Committee in its discretion at or after the Date of Grant may determine that the participant (or the heir, legatee or legal representative of the participant’s estate) will receive a distribution of Shares or cash in an amount which is not more than the number of Shares or cash amount that would have been earned by the participant if 100% of the performance objectives for the current Performance Period had been achieved prorated based on the ratio of the number of months of active employment in the Performance Period to the total number of months in the Performance Period. Subject to 16.8(c), any distribution of Shares or cash pursuant to this Section 7.4(h) shall be made no later than the fifteenth day of the third month of the taxable year following the taxable year in which such participant’s termination of employment occurs.

			

 

7.5 Special Limitations on Restricted Share and Restricted Share Unit Awards. Unless an Award agreement approved by the Committee provides otherwise, Restricted Share and Restricted Share Units awarded under this Plan are intended to meet the requirements for exclusion from coverage under Section 409A of the Code and all Restricted Share Unit Awards shall be construed and administered accordingly.

 

7.6 Time Vesting of Restricted Share and Restricted Share Unit Awards. Restricted Shares or Restricted Share Units, or portions thereof, are exercisable at such time or times as determined by the Committee in its discretion at or after grant, subject to the restrictions on time Vesting set forth in this Section. If the Committee provides that any Restricted Shares or Restricted Share Unit Awards become Vested over time (with or without a performance component), the Committee may waive or accelerate such Vesting provisions at any time, subject to the restrictions on time Vesting set forth in this Section.

 

ARTICLE 8 

Performance Share Awards

 

8.1 Performance Share Awards and Agreements. A Performance Share Award is a right to receive Shares in the future conditioned upon the attainment of specified performance objectives and such other conditions, restrictions and contingencies as the Committee may determine. Each Performance Share Award granted under this Plan will be evidenced by minutes of a meeting, or by a unanimous written consent without a meeting, of the Committee and by a written agreement dated as of the Date of Grant and executed by the Company and by the Plan participant. The time at which Performance Share Awards will Vest and the number of Shares covered by each Award (subject to Section 3.2) are to be determined by the Committee in its discretion. By accepting a grant of Performance Shares, the participant agrees to remit to the Company when due any tax withholding as provided in Article 15.

 

18

 

 

8.2 Performance Objectives. At the time of grant of a Performance Share Award, the Committee will specify the performance objectives which, depending on the extent to which they are met, will determine the number of Shares that will be distributed to the participant. The Committee will also specify the time period or periods (the “Performance Period”) during which the performance objectives must be met. The Committee may use performance objectives based on any measure, including without limitation one or more of the following: stock price, market share, sales, earnings per share, return on equity, costs, earnings, capital adjusted pre-tax earnings (economic profit), net income, operating income, performance profit (operating income minus an allocated charge approximating the Company’s cost of capital, before or after tax), gross margin, revenue, working capital, total assets, net assets, stockholders’ equity and cash flow. The Committee may designate a single goal criterion or multiple goal criteria for performance measurement purposes. Performance measurement may be based on absolute Company, business unit or divisional performance and/or on performance as compared with that of other publicly-traded companies. The performance objectives and periods need not be the same for each participant nor for each Award.

 

8.3 Adjustment of Performance Objectives. The Committee may modify, amend or otherwise adjust the performance objectives specified for outstanding Performance Share Awards if it determines that an adjustment would be consistent with the objectives of this Plan and taking into account the interests of the participants and the public Shareholders of the Company. The types of events which could cause an adjustment in the performance objectives include, without limitation, accounting changes which substantially affect the determination of performance objectives, changes in applicable laws or regulations which affect the performance objectives, and divisive corporate reorganizations, including spin-offs and other distributions of property or stock.

 

8.4 Other Terms and Conditions. Performance Share Awards granted under this Plan are subject to the following terms and conditions and may contain such additional terms, conditions, restrictions and contingencies not inconsistent with the terms of this Plan and any operative employment or other agreement as the Committee deems desirable:

 

	 	
			(a)

				
			Delivery of Shares. As soon as practicable after the applicable Performance Period has ended (but in no event later than the fifteenth day of the third month of the taxable year following the taxable year in which the Performance Period ends), the participant will receive a distribution of the number of Shares earned during the Performance Period, depending upon the extent to which the applicable performance objectives were achieved. Such Shares will be registered in the name of the participant and will be free of all restrictions except for any restrictions pursuant to Section 14.2.

			

 

19

 

 

	 	
			(b)

				
			Termination. A Performance Share Award or unearned portion thereof will terminate without the issuance of Shares on the termination date specified at the time of grant or upon the termination of employment or directorship of the participant during the Performance Period. If a participant’s employment or directorship with the Company or its Affiliates terminates by reason of his or her death, Disability or Retirement, the Committee in its discretion at or after the time of grant may determine, notwithstanding any Vesting requirements under Section 8.4(a), that the participant (or the heir, legatee or legal representative of the participant’s estate) will receive a distribution of a portion of the participant’s then-outstanding Performance Share Awards in an amount which is not more than the number of shares which would have been earned by the participant if 100% of the performance objectives for the current Performance Period had been achieved prorated based on the ratio of the number of months of active employment in the Performance Period to the total number of months in the Performance Period. Subject to 16.8(c), any distribution of Shares pursuant to this Section 8.4(b) shall be made no later than the fifteenth day of the third month of the taxable year following the taxable year in which such participant’s termination of employment occurs.

			

 

	 	
			(c)

				
			Voting and Other Rights. Awards of Performance Shares do not provide the participant with voting rights or rights to dividends prior to the participant becoming the holder of record of Shares issued pursuant to an Award; provided, however, that an Award agreement may provide for payment of an amount of money (or Shares with a Fair Market Value equivalent to such amount) equal to the dividends paid from time to time on the number of Common Shares that would become payable upon vesting of a Performance Share Award. Prior to the issuance of Shares, Performance Share Awards may not be sold, transferred, pledged, assigned or otherwise encumbered.

			

 

8.5 Time Vesting of Performance Share Awards. Performance Share Awards, or portions thereof, are exercisable at such time or times as determined by the Committee in its discretion at or after grant, subject to the restrictions on time Vesting set forth in this Section. If the Committee provides that any Performance Shares become Vested over time (accelerated by a performance component), the Committee may waive or accelerate such Vesting provisions at any time, subject to the restrictions on time Vesting set forth in this Section.

 

8.6 Special Limitations on Performance Share Awards. Unless an Award agreement approved by the Committee provides otherwise, Performance Shares awarded under this Plan are intended to meet the requirements for exclusion from coverage under Section 409A of the Code and all Performance Share Awards shall be construed and administered accordingly.

 

20

 

 

ARTICLE 9 

Common Share Awards

 

9.1 Terms and Conditions of Common Share Awards.

 

	 	
			(a)

				
			Purpose. Common Shares may be granted in consideration of services rendered to the Company by a participant.

			

 

	 	
			(b)

				
			Vesting. Common Shares shall be fully vested upon their grant to a participant.

			

 

	 	
			(c)

				
			Delivery. Common Shares granted to a participant shall be distributed to such participant as soon as administratively practicable, but in no event later than the fifteenth day of the third month of the taxable year following the taxable year in which the Date of Grant occurs.

			

 

ARTICLE 10 

Transfers and Leaves of Absence

 

10.1 Transfer of Participant. For purposes of this Plan, the transfer of a participant among the Company and its Affiliates is deemed not to be a termination of employment.

 

10.2 Effect of Leaves of Absence. For purposes of this Plan, the following leaves of absence are deemed not to be a termination of employment:

 

	 	
			(a)

				
			a leave of absence, approved in writing by the Company, for military service, sickness or any other purpose approved by the Company, if the period of such leave does not exceed 90 days;

			

 

	 	
			(b)

				
			a leave of absence in excess of 90 days, approved in writing by the Company, but only if the employee’s right to reemployment is guaranteed either by a statute or by contract, and provided that, in the case of any such leave of absence, the employee returns to work within 30 days after the end of such leave; and

			

 

	 	
			(c)

				
			subject to Section 409A of the Code, any other absence determined by the Committee in its discretion not to constitute a termination of employment.

			

 

21

 

 

ARTICLE 11 

Effect of Change in Control

 

11.1 Change in Control Defined. “Change in Control” means the occurrence of any of the following: (i) the receipt by the Company of a Schedule 13D or other advice indicating that a person, or any member of a “group,” is the “beneficial owner” (as those terms are defined in Rule 13d 3 under the Exchange Act) of fifty percent (50%) or more of the voting power of the Company; (ii) the first purchase of shares pursuant to a tender offer or exchange (other than a tender offer of exchange by the Company or its Affiliates) for all or any amount of Common Shares or any class or any securities convertible into such Common Shares, the results of which would make the offeror and/or its affiliates the beneficial owners of fifty percent (50%) or more of the voting power of the Company; (iii) the date of the approval by Shareholders of an agreement providing for any consolidation or merger of the Company in which the Company will not be the continuing or surviving corporation or pursuant to which shares of capital stock of any class, or any securities convertible into such capital stock, of the Company would be converted into cash, securities, or other property, other than a merger or consolidation of the Company with an Affiliate or in which the holders of all of the Shares of all classes of the Company’s capital stock immediately prior to the merger or consolidation would own at least a majority of the voting power of the surviving corporation (or the direct or indirect parent company of the surviving corporation) immediately after the merger or consolidation; (iv) the date of the approval by Shareholders of any sale, lease, exchange, or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets of the Company; (v) the adoption of any plan or proposal for the liquidation (but not a partial liquidation) or dissolution of the Company; or (vi) such other event as the Committee shall, in its sole and absolute discretion, deem to be a “Change in Control.”

 

11.2 Acceleration of Award. Except as otherwise provided in this Plan or an Award agreement and to the extent it would not trigger adverse taxation under Section 409A of the Code, immediately upon the occurrence of a Change in Control:

 

	 	
			(a)

				
			all outstanding Stock Options automatically become fully exercisable;

			

 

	 	
			(b)

				
			all Restricted Share Awards automatically become fully Vested;

			

 

	 	
			(c)

				
			all Restricted Share Unit Awards automatically become fully Vested (or, if such Restricted Share Unit Awards are subject to performance-based restrictions, shall become Vested on a pro-rated basis as described in Section 11.2(d)) and, to the extent Vested, convertible to Shares at the election of the holder;

			

 

	 	
			(d)

				
			all participants holding Performance Share Awards become entitled to receive a partial payout in an amount which is the number of Shares which would have been earned by the participant if 100% of the performance objectives for the current Performance Period had been achieved pro-rated based on the ratio of the number of months of active employment in the Performance Period to the total number of months in the Performance Period; and

			

 

	 	
			(e)

				
			Stock Appreciation Rights automatically become fully Vested and fully exercisable.

			

 

22

 

 

ARTICLE 12 

Transferability of Awards

 

12.1 Awards Are Non-Transferable. Except as provided in Sections 12.2 and 12.3, Awards are non-transferable and any attempts to assign, pledge, hypothecate or otherwise alienate or encumber (whether by operation of law or otherwise) any Award shall be null and void.

 

12.2 Inter-Vivos Exercise of Awards. During a participant’s lifetime, Awards are exercisable only by the participant or, as permitted by applicable law and notwithstanding Section 12.1 to the contrary, the participant’s guardian or other legal representative.

 

12.3 Limited Transferability of Certain Awards. Notwithstanding Section 12.1 to the contrary, Awards may be transferred by will and by the laws of descent and distribution. Moreover, the Committee, in its discretion, may allow at or after the time of grant the transferability of Awards which are Vested, provided that the permitted transfer is made (a) to the Company (for example in the case of forfeiture of Restricted Shares), an Affiliate or a person acting as the agent of the foregoing or which is otherwise determined by the Committee to be in the interests of the Company; or (b) by the participant for no consideration to Immediate Family Members or to a bona fide trust, partnership or other entity controlled by and for the benefit of one or more Immediate Family Members. “Immediate Family Members” means the participant’s spouse, children, stepchildren, parents, stepparents, siblings (including half brothers and sisters), in-laws and other individuals who have a relationship to the participant arising because of a legal adoption. The Committee in its discretion may impose additional terms and conditions upon transferability.

 

ARTICLE 13 

Amendment and Discontinuation

 

13.1 Amendment or Discontinuation of this Plan. The Board of Directors may amend, alter, or discontinue this Plan at any time, provided that no amendment, alteration, or discontinuance may be made:

 

	 	
			(a)

				
			which would materially and adversely affect the rights of a participant under any Award granted prior to the date such action is adopted by the Board of Directors without the participant’s written consent thereto; and

			

 

	 	
			(b)

				
			without Shareholder approval, if Shareholder approval is required under applicable laws, regulations or exchange requirements.

			

 

However, unless Shareholder approval is obtained, no amendment shall increase the aggregate number of Shares that may be issued under the Plan, or shall permit the Exercise Price of outstanding Stock Options or Stock Appreciation Rights to be reduced, except as permitted by Section 3.4.

 

23

 

 

Notwithstanding the foregoing, this Plan may be amended without affecting participants’ consent to: (i) comply with any law; (ii) preserve any intended favorable tax effects for the Company, the Plan or participants; or (iii) avoid any unintended unfavorable tax effects for the Company, the Plan or participants.

 

13.2 Amendment of Grants. The Committee may amend, prospectively or retroactively, the terms of any outstanding Award, provided that no such amendment may be inconsistent with the terms of this Plan (specifically including the prohibition on granting Stock Options or Stock Appreciation Rights with an Exercise Price less than 100% of the Fair Market Value of the Common Shares on the Date of Grant) or would materially and adversely affect the rights of any holder without his or her written consent.

 

ARTICLE 14 

Share Certificates

 

14.1 Delivery of Share Certificates. The Company is not required to issue or deliver any certificates for Shares issuable with respect to Awards under this Plan prior to the fulfillment of all of the following conditions:

 

	 	
			(a)

				
			payment in full for the Shares and for any tax withholding (See Article 15);

			

 

	 	
			(b)

				
			completion of any registration or other qualification of such Shares under any Federal or state laws or under the rulings or regulations of the Securities and Exchange Commission or any other regulating body which the Committee in its discretion deems necessary or advisable;

			

 

	 	
			(c)

				
			if applicable, admission of such Shares to listing on any stock exchange on which the Shares are listed;

			

 

	 	
			(d)

				
			in the event the Shares are not registered under the Securities Act of 1933, qualification as a private placement under said Act;

			

 

	 	
			(e)

				
			obtaining of any approval or other clearance from any Federal or state governmental agency which the Committee in its discretion determines to be necessary or advisable; and

			

 

	 	
			(f)

				
			the Committee is fully satisfied that the issuance and delivery of Shares under this Plan is in compliance with applicable Federal, state or local law, rule, regulation or ordinance or any rule or regulation of any other regulating body, for which the Committee may seek approval of counsel for the Company.

			

 

24

 

 

14.2 Applicable Restrictions on Shares. Shares issued with respect to Awards may be subject to such stock transfer orders and other restrictions as the Committee may determine necessary or advisable under any applicable Federal or state securities law rules, regulations and other requirements, the rules, regulations and other requirements of the OTC Markets or any stock exchange upon which the Shares are then-listed, and any other applicable Federal or state law and will include any restrictive legends the Committee may deem appropriate to include.

 

14.3 Book Entry. In lieu of the issuance of stock certificates evidencing Shares, the Company may use a “book entry” system in which a computerized or manual entry is made in the records of the Company to evidence the issuance of such Shares. Such Company records are, absent manifest error, binding on all parties.

 

ARTICLE 15 

Tax Withholding

 

15.1 In General. The Committee shall cause the Company or Affiliate to withhold any taxes which it determines it is required by law or required by the terms of this Plan to withhold in connection with any payments incident to this Plan. The participant or other recipient shall provide the Committee with such Stock Powers and additional information or documentation as may be necessary for the Committee to discharge its obligations under this Section.

 

15.2 Delivery of Withholding Proceeds. The Committee shall cause the Company or Affiliate to deliver withholding proceeds to the Internal Revenue Service and/or other taxing authority.

 

ARTICLE 16 

General Provisions

 

16.1 No Implied Rights to Awards, Employment or Directorship. No potential participant has any claim or right to be granted an Award under this Plan, and there is no obligation of uniformity of treatment of participants under this Plan. Neither this Plan nor any Award thereunder shall be construed as giving any individual any right to continued employment or continued directorship with the Company or any Affiliate. The Plan does not constitute a contract of employment, and the Company and each Affiliate expressly reserve the right at any time to terminate employees free from liability, or any claim, under this Plan, except as may be specifically provided in this Plan or in an Award agreement.

 

16.2 Other Compensation Plans. Nothing contained in this Plan prevents the Board of Directors from adopting other or additional compensation arrangements, subject to Shareholder approval if such approval is required, and such arrangements may be either generally applicable or applicable only in specific cases.

 

16.3 Rule 16b-3 Compliance. The Plan is intended to comply with all applicable conditions of Rule 16b 3 of the Exchange Act, as such rule may be amended from time to time (“Rule 16b 3”). All transactions involving any participant subject to Section 16(a) shall be subject to the conditions set forth in Rule 16b 3, regardless of whether such conditions are expressly set forth in this Plan. Any provision of this Plan that is contrary to Rule 16b 3 does not apply to such participants.

 

25

 

 

16.4 Successors. All obligations of the Company with respect to Awards granted under this Plan are binding on any successor to the Company, whether as a result of a direct or indirect purchase, merger, consolidation or otherwise of all or substantially all of the business and/or assets of the Company.

 

16.5 Severability. In the event any provision of this Plan, or the application thereof to any person or circumstances, is held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of this Plan, or other applications, and this Plan is to be construed and enforced as if the illegal or invalid provision had not been included.

 

16.6 Governing Law. To the extent not preempted by Federal law, this Plan and all Award agreements pursuant thereto are construed in accordance with and governed by the laws of the State of Ohio. This Plan is not intended to be governed by the Employee Retirement Income Security Act and shall be so construed and administered.

 

16.7 Compliance with Section 409A of the Code.

 

	 	
			(a)

				
			To the extent applicable, it is intended that this Plan and any Awards made hereunder comply with, or be exempt from, the provisions of Section 409A of the Code, so that the income inclusion provisions of Section 409A(a)(1) of the Code do not apply to the participants. This Plan and any Awards made hereunder will be administered in a manner consistent with this intent. Any reference in this Plan to Section 409A of the Code will also include any regulations or any other formal guidance promulgated with respect to such section by the U.S. Department of the Treasury or the Internal Revenue Service.

			

 

	 	
			(b)

				
			Neither a participant nor any of a participant’s creditors or beneficiaries will have the right to subject any deferred compensation (within the meaning of Section 409A of the Code) payable under this Plan and Awards hereunder to any anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment. Except as permitted under Section 409A of the Code, any deferred compensation (within the meaning of Section 409A of the Code) payable to a participant or for a participant’s benefit under this Plan and Awards made hereunder may not be reduced by, or offset against, any amount owing by a participant to the Company or any of its subsidiaries.

			

 

26

 

 

	 	
			(c)

				
			Notwithstanding any provision of this Plan and Awards made hereunder to the contrary, if, at the time of a participant’s separation from service (within the meaning of Section 409A of the Code), (i) the participant is a specified employee (within the meaning of Section 409A of the Code and using the identification methodology selected by the Company from time to time) and (ii) the Company makes a good faith determination that an amount payable hereunder constitutes deferred compensation (within the meaning of Section 409A of the Code) the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A of the Code in order to avoid taxes or penalties under Section 409A of the Code, then the Company will not pay such amount on the otherwise scheduled payment date but will instead pay it, without interest, on the tenth business day of the seventh month after such separation from service.

			

 

	 	
			(d)

				
			Notwithstanding any provision of this Plan and Awards hereunder to the contrary, in light of the uncertainty with respect to the proper application of Section 409A of the Code, the Company reserves the right to make amendments to this Plan and Awards made hereunder as the Company deems necessary or desirable to avoid the imposition of taxes or penalties under Section 409A of the Code. In any case, each participant will be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on such participant or for such participant’s account in connection with this Plan and Awards made hereunder (including any taxes and penalties under Section 409A of the Code), and neither the Company nor any of its affiliates will have any obligation to provide any gross-up for the tax consequences of any provision of, or any payment under, this Plan or any Awards hereunder. In addition, neither the Company nor any of its affiliates will have any obligation to indemnify or otherwise hold any participant harmless from any or all of such taxes or penalties.

			

 

ARTICLE 17 

Effective Date and Term

 

Effective Date and Term. The effective date of this Hickok Incorporated Amended and Restated 2013 Omnibus Equity Plan is the date on which the Shareholders of the Company approve it at a duly held stockholders’ meeting (the “Effective Date”). No Award will be granted under this Plan more than 10 years after the Effective Date, but all Awards granted on or prior to such date will continue in effect thereafter subject to the terms

 

27EXECUTIVE EMPLOYMENT AGREEMENT

    

    

    THIS EXECUTIVE EMPLOYMENT
          AGREEMENT (the “Agreement”) is made the 1st day of April, 2019 (the “Effective Date”), between ADDvantage Technologies Group, Inc. (“Company”) and Don Kinison (“Executive”).

    

    

    WHEREAS, the
        Company and Executive desire to memorialize the terms and conditions under which Executive will be employed by the Company in the position set forth on Exhibit A,
        which is attached hereto and made a part hereof;

    

    

    NOW, THEREFORE,
        intending to be legally bound, the Company agrees to employ Executive, and Executive hereby agrees to be employed by the Company, upon the following terms and conditions:

    

    

    1. Term of Agreement.  The Company
        hereby employs Executive and Executive accepts such employment, subject to all of the terms and conditions of this Agreement.  Except as otherwise expressly provided herein, the term of this Agreement and of Executive’s employment under this
        Agreement will commence on the Effective Date and continue in effect until Executive ceases to be employed by the Company pursuant to Section 4 (the “Term”).

    2. Duties.  Executive will hold
        the office and title set forth on Exhibit A and will have such duties assigned to Executive under the Bylaws of the Company, by the Board of Directors of
        the Company, by the chief executive officer of the Company or by the officer to whom Executive directly reports as described on Exhibit A.  Executive agrees
        to use his best efforts to promote the interests of the Company, and to devote his full productive time and working attention to the business and affairs of the Company.

    3.  Compensation, Benefits and Expenses.

    3.1. Base Salary.  Commencing on the Effective Date, the Company shall pay to Executive an
        annual base salary (“Annual Base Salary”) in the amount set forth on Exhibit A for all services to be rendered by Executive hereunder.  The Annual Base Salary shall be payable in accordance with the Company’s normal payroll practices for employees, and the Company shall deduct or cause to be
        deducted from the Annual Base Salary all taxes and amounts required by law to be withheld.  Executive’s performance and base salary will be reviewed annually by the compensation committee of the Board of Directors.  Future increases of the Annual
        Base Salary, if any, shall be determined by the Board of Directors of the Company in their sole and absolute discretion.

    

    

    3.2. Performance Bonus.  The Executive shall be eligible to receive an annual bonus with a
        target level at a percentage set forth in Exhibit A, based on meeting certain performance metrics and stock performance as determined in the sole and
        absolute discretion of the Board of Directors of the Company.  The Board of Directors may, in its sole and absolute discretion, establish a bonus plan.  There is no guarantee of a bonus in any year and under no circumstances shall a bonus be
        considered a required part of Executive’s annual compensation.

    
      
        

    

    
    

    

    3.3. Benefits.  During the Term of this Agreement, Executive shall be entitled to
        participate in all savings and retirement plans, health, dental, life, accident and short and long term disability, and policies and other programs maintained by the Company for the benefit of its full-time employees.

    

    

    3.4. Reimbursement of Expenses.  Executive shall be reimbursed for all reasonable
        out-of-pocket expenses paid to third parties incurred by Executive in connection with the performance of his duties hereunder within thirty (30) days of presentation of expense statements and vouchers and other supporting documentation and such
        other information as the Company may reasonably require.

    

    

    3.5. Personal Leave.  During the Term, Executive shall be entitled to a certain amount, as
        set forth on Exhibit A, of paid personal time off (“PTO”)

        during each calendar year (pro rated for partial years) in accordance with the Company’s policies in effect from time to time.

    

    

    3.6 Car Expenses.  The Company shall pay Executive a monthly allowance in an amount as set
        forth on Exhibit A for gas expense and mileage.  Executive shall not be entitled to receive any other amounts related to car usage.

    

    

    3.7 Phone Expenses.  The Company shall pay Executive a monthly allowance in an amount as
        set forth on Exhibit A for a cellular phone plan.  Executive shall not be entitled to receive any other amounts related to his cellular phone or monthly
        cellular phone bill.

    

    

    4. Termination of Employment.

    4.1. Events of Termination.  Executive’s employment with the Company shall cease upon:

    

    

    (i) Executive’s death.

    

    

    (ii) Executive’s disability, which means his incapacity due to physical or mental illness such that he is unable to perform his previously assigned duties where (1) such incapacity
        has been determined to exist by either (x) the Company’s disability insurance carrier or (y) by the concurring opinions of two licensed physicians (one selected by the Company and one by Executive), and (2) the Company has determined, that such
        incapacity will continue for such period of time of at least ninety (90) days, whether or not consecutive, in any twelve (12) month period.

    

    

    (iii) Termination by the Company.  Such termination will require delivery to Executive of a written notice that Executive has been terminated with or without Cause.

    

    

    (iv) Executive’s voluntary resignation or retirement upon not less than thirty (30) days’ prior written notice to the Company that Executive has resigned or retired.

    

    

    (v) By mutual written consent of the Company and Executive.

    
      2

      
        

    

    

    

    (vi) Termination by the Company or the Executive within ninety (90) days of the occurrence of a Change in Control.

    

    

    4.2. Benefits Payable Upon Termination.

    

    

    (i) Within thirty (30) days following the termination of Executive’s employment with the Company pursuant to any manner described in Section 4.1 hereof, the Company shall pay to Executive: (a) any Annual Base Salary earned, but unpaid, for services rendered to the Company on or prior to the date of termination, (b) any
        unreimbursed expenses reimbursable to Executive pursuant to Section 3.4 hereof for expenses incurred on or prior to the date of termination, and (c) any
        accrued and unpaid PTO pursuant to Section 3.5 hereof.

    

    

    (ii) In the event that Executive’s employment is terminated by the Company without Cause or is terminated by the Company or the Executive under Section 4.1(vi) above, contingent upon Executive’s execution and delivery of a Release Agreement substantially in the form attached hereto as Exhibit B with such changes to such form as the Company shall reasonably request (the “Release
          Agreement”), the Company will pay to Executive an amount described on Exhibit A, payable in a lump sum within 30 days of termination under Section 4.1(vi) and payable over a six (6) month period in equal installments at such times as the Company routinely pays its employees in the case of
        termination without Cause (the “Severance Payments”); provided, however, that in the event of Executive’s breach of Sections 5, 6 or 7 of this Agreement then if Severance Payments are being paid through installments, the Company’s obligation to pay additional Severance Payments after the breach
        occurs shall terminate and be of no further force or effect and if Severance Payments have been made in a lump sum, the Executive shall be obligated to pay to the Company upon written demand that portion of the Severance Payments equal to the
        portion of the Non-Solicitation Period remaining at the time of the breach.  The Company shall deduct, or cause to be deducted, from the Severance Payments all taxes and amounts required by law to be withheld.  If Employee fails to execute the
        Release Agreement, or revokes his acceptance of such release following its execution, Executive shall not be entitled to any Severance Payments.

    

    

    (iii) If Executive’s employment with the Company ends for any reason set forth in Section 4.1
        hereof other than termination by the Company without Cause or termination by the Company or the Executive under Section 4.1(vi), the Company’s obligations
        to pay any compensation or benefits under this Agreement will cease effective on the date of termination and Executive will receive no Severance Payments.  Executive’s right to receive any other benefits will be determined under the provisions of
        applicable plans, programs or other coverages.

    

    

    5. Non-solicitation and Non-disparagement.

    5.1. Non-solicitation.  Executive acknowledges that in
        the course of his employment with the Company he will become familiar with the Company’s and Affiliated Companies’ trade secrets and with other confidential information concerning the Company and its Affiliated Companies and that his services will
        be of special, unique and extraordinary value to the Company and its Affiliated Companies.  Therefore, Executive agrees that during the Non-

    
      3

      
        

    

    solicitation Period he shall not, singly, jointly, or as a partner, member, employee, agent, officer, director,
        stockholder, equity holder, lender, consultant, independent contractor, or joint venturer of any other person, or in any other capacity, directly or indirectly (i) employ, retain, engage, induce or attempt to employ, retain, engage or induce any
        employee, consultant or independent contractor of the Company or any Affiliated Companies to leave the employ of the Company or such Affiliated Companies, or in any way interfere with the relationship between the Company or any Affiliated Companies
        and any employee thereof, or (ii) induce or attempt to induce any Customer, dealer, supplier, licensee or other business relation of the Company or any Affiliated Companies to cease doing business with, or modify its business relationship with, the
        Company or such Affiliated Companies, or in any way interfere with the relationship or understanding between any such Customer, dealer, supplier, licensee or business relation and the Company or any Affiliated Companies.  The Company shall have the
        right to assign the benefits of this Section 5 to any entity that acquires the Company’s business while the Executive is still employed by the
        Company and assumes the Company’s obligations to Executive, which assumption shall not release the Company.

    5.2. Non-disparagement by Executive.  Following
        termination, Executive and the Company agree not to make to any person, including but not limited to customers, dealers, suppliers or licensees of the Company or its Affiliated Companies, any statement that disparages the other or which reflects
        negatively upon the other, including but not limited to statements regarding the Company’s financial condition, the financial condition of its Affiliated Companies, its officers, directors, stockholders, employees and Affiliates, but excepting any
        statement required by law, or made in response to an order or subpoena of a court or government agency of competent jurisdiction.

    5.3. Enforcement.  If, at the time of enforcement of Section 5 of this Agreement, a court holds that the restrictions stated herein are unreasonable under circumstances then existing, the parties hereto agree that
        the maximum duration and scope reasonable under such circumstances shall be substituted for the stated period or scope and that the court shall be allowed to revise the restrictions contained herein to cover the maximum duration and scope permitted
        by law.

    6. Confidential Information. 
        Executive acknowledges that the information, observations and data obtained by him during the course of his performance under this Agreement concerning the business and affairs of the Company and its Affiliate Companies are the property of the
        Company and Affiliated Companies, including information concerning acquisition opportunities in or reasonably related to the Company’s or its Affiliate Companies’ business or industry of which Executive becomes aware during the Term and any
        Severance Period.  Therefore, Executive agrees that he will not disclose to any unauthorized person or use for his own account any of such information, observations or data without the Company’s written consent unless and to the extent that the
        aforementioned matters become generally known to and available for use by the public other than as a result of Executive’s acts or omissions.  Executive agrees to deliver to the Company on the date of termination, or at any other time the Company
        may request in writing, all memoranda, notes, plans, records, reports and other documents (and copies thereof) relating to the business of the Company and its Affiliated Companies (including, without limitation, all acquisition prospects, lists and
        contact information) which he may then possess or have under his control.  This Section 6 does not apply 

    
      4

      
        

    

    to personal contacts Executive had prior to his employment with the Company, provided that no Company
        confidential information is disclosed to those contacts.

    7. Executive’s Representations and Warranties. 

        Executive represents and warrants that Executive is not a party to any other employment, non-competition, or other agreement or restriction which could interfere with Executive’s employment with the Company or Executive’s or the Company’s rights
        and obligations hereunder and that Executive’s acceptance of employment with the Company and the performance of Executive’s duties hereunder will not breach the provisions of any contract, agreement, or understanding to which Executive is party or
        any duty owed by Executive to any other person or organization.

    8. Definitions.

    (i) “Affiliated Companies” shall mean any
        subsidiary of the Company.

    (ii) “Cause” shall mean Executive’s: (1) conviction of a felony or pleading
        guilty to a felony charge; (2) participation as an employee, officer or principal owner/organizer in any business engaged in activities in direct competition with Company without the consent of Company; (3) gross and willful neglect of
        responsibilities; (4) other offenses against Company, including without limitation theft, embezzlement, dishonesty, gross and willful violation of Company policy, or the willful release of proprietary or confidential information in a manner that
        would be detrimental to Company's best interest; or (5) willful material breach of this Agreement or material breach of Executive’s fiduciary duties to the Company or any of its Affiliated Companies.

    

    

    (iii) “Change in Control” shall mean any one of the following events or
        transactions:

    

    

    (1) Any “person” (as that term is used in Sections 13(d) and 14(d)(2) of the Exchange Act ) after the Effective Date becomes the beneficial owner (as defined in Rule 13d-3 under the
        Exchange Act) directly or indirectly, of securities representing 50% or more of the combined voting power for election of directors of the then outstanding securities of the Company or any successor to the Company; provided, however, the following
        transactions shall not constitute a Change in Control hereunder (A) any acquisition of such securities by the Company, (B) any acquisition of such securities by any employee benefit plan (or related trust) sponsored or maintained by the Company or
        any corporation controlled by the Company, (C) any acquisition of such securities by any person who, immediately before such acquisition, had beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of 20% or more of (i) the fair
        market value of then then outstanding securities of the Company or (ii) the combined voting power of the outstanding voting securities of the Company entitled to vote generally in the election of directors to the Board or (D) any acquisition by any
        person or entity, including without limitation, any corporation pursuant to a transaction which satisfies the requirements of clauses (A), (B) or (C) of this paragraph;

    

    

    (2) During any period of two consecutive years or less, individuals who at the beginning of such period constitute the Board cease for any reason (whether beginning on or after the
        Effective Date) to constitute at least a majority of the Board, unless the election or

    
      5

      
        

    

     nomination for election of each new director was approved by a vote of at least two-thirds of the directors then still in office who
        were directors as of the beginning of the period;

    

    

    (3) Shareholders of the Company approve any dissolution or liquidation of the Company; or

    

    

    (4) Shareholders of the Company approve any reorganization, merger, consolidation or share exchange unless (A) the persons who were the beneficial owners of the outstanding shares
        of the common stock of the Company immediately before the consummation of such transaction beneficially own more than 60% of the outstanding shares of the common stock of the successor or survivor corporation in such transaction immediately
        following the consummation of such transaction and (B) the number of shares of the common stock of such successor or survivor corporation beneficially owned by the persons described in clause (A) immediately following the consummation of such
        transaction is beneficially owned by each such person in substantially the same proportion that each such person had beneficially owned shares of the Company common stock immediately before the consummation of such transaction, provided (C) the
        percentage described in clause (A) of this paragraph of the beneficially owned shares of the successor or survivor corporation and the number described in clause (B) of this paragraph of the beneficially owned shares of the successor or survivor
        corporation shall be determined exclusively by reference to the shares of the successor or survivor corporation which result from the beneficial ownership of shares of common stock of the Company by the persons described in clause (A) of this
        paragraph immediately before the consummation of such transaction.

    

    

    (iv) “Customer” shall mean any and all persons, business, or other legal
        entities that received goods or services provided by the Company, or that the Company marketed to for goods or services provided by the Company, within two (2) years prior to the termination of his employment with the Company.

    

    

    (v) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

    

    

    (vi) “Non-solicitation Period” shall mean
        twelve (12) months following termination of Executive’s employment with the Company.

    (vii) “Prorated Bonus” shall mean a prorated
        portion of the cash bonus Executive earned in the fiscal year preceding the fiscal year in which Termination of Executive's Employment occurs (based on the number of days Executive was employed by the Company during the year of such Termination).

    (viii) “Severance Period” shall mean the time
        period when Executive is receiving Severance Payments from the Company under Section 4.2(ii) and Exhibit A hereof.

    9. Notices.  All demands, notices,
        requests, consents and other communications required or permitted under this Agreement shall be in writing and shall be personally delivered or sent by facsimile machine (with a confirmation copy sent by one of the other methods authorized in this
        Section), reputable commercial overnight delivery service (including Federal 

    
      6

      
        

    

    Express and U.S. Postal Service overnight delivery service) or, deposited with the U.S. Postal Service mailed
        first class, registered or certified mail, postage prepaid, as set forth below:

    If to the Company, addressed to:

    

    

    ADDvantage Technologies Group, Inc.

    1221 East Houston

    Broken Arrow, OK   74012

    Facsimile:  (918) 251-0792

    

    

    If to Executive, addressed to:

    

    

    Executive’s notice address

    as set forth on Exhibit

            A.

    

    

    

    

    

    

    or to such other address as any party may have furnished to the other in writing in accordance herewith, except that notices of change of
        address shall be effective only upon receipt.

    

    

    10. Entire Agreement.  This
        Agreement constitutes the full and entire understanding and agreement between the parties with respect to the subject hereof and supersede all prior agreements and understandings, whether written or oral, among the parties with respect thereto.

    11. Assignment.  This Agreement,
        being for the personal services of Executive, shall not be assignable by him.  The provisions hereof shall inure to the benefit of, and be binding upon, the Company’s successors and assigns.  The Company may assign this Agreement and its rights,
        together with its obligations hereunder, in connection with any sale, transfer or other disposition of all or substantially all o fits assets or business, whether by merger, consolidation or otherwise.

    12. Waivers and Amendments.  The
        respective rights and obligations of the Company and Executive under this Agreement may be waived (either generally or in a particular instance, either retroactively or prospectively, and either for a specified period of time or indefinitely) or
        amended only with the written consent of a duly authorized representative of the Company and Executive.

    13. Controlling Law and Consent to
            Jurisdiction.  This Agreement will be governed by and construed in accordance with the laws of the State of Oklahoma without giving effect to any choice of law or conflicting provision or rule.

    14. Equitable Remedies.  The
        parties hereto agree that irreparable harm would occur in the event that any of the agreements and provisions of this Agreement were not performed fully by the parties hereto in accordance with their specific terms or conditions or were otherwise
        breached, and that money damages are an inadequate remedy for breach of this Agreement because of the difficulty of ascertaining and quantifying the amount of damage that will be suffered by the parties hereto in the event that this Agreement is
        not performed in accordance with its terms or conditions or is otherwise breached.  It is accordingly hereby agreed that the

    
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     parties hereto shall be entitled to an injunction or injunctions or other equitable relief to restrain, enjoin
        and prevent breaches of this Agreement by the other parties and to enforce specifically such terms and provisions of this Agreement (without posting a bond or other security), such remedy being in addition to and not in lieu of, any other rights
        and remedies to which the other parties are entitled to at law or in equity.  The Company and Executive agree that the covenants set forth in this Agreement shall be enforced to the fullest extent permitted by law.  Accordingly, if, in any judicial
        proceedings, a court shall determine that such covenant is unenforceable for any reason, including without limitation because it survives too long, then the parties intend that such covenant shall be deemed to cover only the maximum period of time,
        if applicable, and/or shall otherwise be deemed to be limited in such manner as will permit enforceability by such court.  In the event that any one or more of such covenants shall, either by itself or together with other covenants be adjudged to
        go beyond what is reasonable in all the circumstances for the protection of the interests of the Company, but would be adjudged reasonable if any particular covenant or covenants or parts thereof were deleted, restricted, or limited in a particular
        manner, then the said covenants shall apply with such deletions, restrictions, or limitations, as the case may be.  The Company and Executive further agree that the covenants set forth in this Agreement are reasonable in all circumstances for the
        protection of the legitimate interests of the Company.

    15. Survival.  Sections 4-16 of this Agreement shall survive termination of this Agreement for the period of duration specified in such Section, and if no period of duration is
        specified, then the provision shall survive termination indefinitely.

    16. Severability; Titles and Subtitles;
            Gender; Singular and Plural; Counterparts; Facsimile.

    (i) In case any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the
        remaining provisions of this Agreement shall not in any way be affected or impaired thereby.

    (ii) The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing
        this Agreement.

    (iii) The use of any gender in this Agreement shall be deemed to include the other genders, and the use of the singular in this Agreement shall be
        deemed to include the plural (and vice versa), wherever appropriate.

    (iv) This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together constitute one
        instrument.

    (v) Counterparts of this Agreement (or applicable signature pages hereof) that are manually signed and delivered by facsimile transmission shall be deemed to constitute signed
        original counterparts hereof and shall bind the parties signing and delivering in such manner.

    

    

    17. Section 409A Compliance.

    
      8

      
        

    

    

    

    (i) Compliance.  This Agreement shall be construed to avoid the imposition of additional
        taxes, interest and penalties pursuant to Section 409A of the Internal Revenue Code (“Section 409A”).  The parties acknowledge and agree that the
        interpretation of Section 409A and its application to the terms of this Agreement is uncertain and may be subject to change as additional guidance and interpretations become available.  In no event whatsoever shall the Company be liable for any
        tax, interest or penalties that may be imposed on the Executive by Section 409A or any damages for failing to comply with Section 409A; provided, however, that if the failure to comply results from the Company’s negligence or willful acts, the
        Company will reimburse the Executive so that, on an after-tax basis, he is in the same position he would have been in had the failure to comply not occurred.

    

    

    (ii) Termination as a Separation From Service.  A termination of employment shall not be
        deemed to have occurred for purposes of this Agreement providing for the payment of any amounts or benefits that are considered nonqualified deferred compensation under Section 409A upon or following a termination of employment, unless such
        termination is also a “separation from service” within the meaning of Section 409A and the payment thereof prior to a “separation from service” would violate Section 409A.  For purposes of such provision in this Agreement relating to any such
        payments or benefits, references to “termination,” “termination of employment” or like terms shall mean “separation from service.”

    

    

    (iii) Six Month Delay for Specified Employees.  If any payment, compensation or other
        benefit provided to the Executive in connection with a termination of employment is determined, in whole or in part, to constitute “nonqualified deferred compensation” within the meaning of Section 409A and the Executive is a specified employee as
        defined in Section 409A(2)(B)(i), no part of such payments shall be paid before the earlier of (i) the day that is six months plus one day after the Executive’s date of termination and (ii) the date of Executive’s death (the “New Payment Date”).  The aggregate of any payments that otherwise would have been paid to the Executive during the period between the date of
        termination and the New Payment Date shall be paid to the Executive in a lump sum on such New Payment Date.  Thereafter, any payments that remain outstanding as of the day immediately following the New Payment Date shall be paid without delay over
        the time period originally scheduled, in accordance with the terms of this Agreement.

    

    

    (iv) Reimbursements and In-Kind Benefits.  All reimbursements for costs and expenses under this Agreement shall be paid in no event later than the end of the calendar year following the calendar year in which the Executive incurs such expense. 
        With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A, (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange
        for another benefit, and (ii) the amount of expenses eligible for reimbursements or in-kind benefits provided during any taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits to be provided in any other taxable
        year.

    

    

    (v) Payments within Specified Number of Days.  Whenever a payment under this Agreement specifies a payment period with reference to a number of days, the actual date of payment within such period shall be within the sole discretion of the Company.

    
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    (vi) Installments as Separate Payment.  If under this Agreement, an amount is paid in two or more installments, for purposes of Section 409A, each installment shall be treated as a separate payment.

    

    

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    WITNESS THE DUE EXECUTION AND DELIVERY HEREOF
        on the date first above written.

    

    

    

    

    COMPANY:

    

    

    ADDvantage Technologies Group, Inc.

    

    

    

    

    By:  /s/ Joseph E. Hart 

        

    

    

    

    

    

    

    EXECUTIVE:

    

    

    /s/ Don Kinison

    Don Kinison

    

    

    
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    EXHIBIT A

    

    

    TERMS

    

    

    	
            Position

          	
            President of the Telecommunications Division

          
	
            Officer to whom Executive Directly Reports

          	
            Chief Executive Officer

          
	
            Annual Base Salary

          	
            $220,000.00

          
	
            Performance Target Level

          	
            50% of  Annual Base Salary

          
	
            PTO

          	
            4 weeks per year

          
	
            Car Allowance

          	
            $1,000.00 per month

          
	
            Cell Phone Allowance

          	
            $150.00 per month

          
	
            Severance Payment

          	
            6 Months of Base Salary at the time of Termination plus the Executive’s Prorated Bonus

          
	
            Executive’s Notice Address

          	
            1010 Twin Oaks Drive Prosper, TX 75078

          

    

    

    
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    EXHIBIT B

    

    

    CONFIDENTIAL SEVERANCE AND RELEASE
            AGREEMENT

    

    

    This Confidential Severance and Release Agreement (the “Agreement”) is made and entered into by and between Don Kinison (“Executive”) and
        ADDvantage Technologies Group, Inc. (the “Company”) (collectively referred to as the “Parties”).

    WITNESSETH:

    WHEREAS,
        Executive has been employed by the Company as the President of the Telecommunications Division;

    WHEREAS,

        the Executive’s employment has been terminated; and

    WHEREAS,
        in accordance with and subject to Section 4.2(ii) of the Executive Employment Agreement between the Parties, in exchange for a release of claims, the
        Company will pay Executive severance payments in the amount and at the times specified in the Executive Employment Agreement (the “Severance Payments”).

    NOW,

          THEREFORE, in consideration of the premises, the mutual promises herein, and other good and valuable considerations, the receipt and sufficiency of which are hereby acknowledged, it is agreed as follows:

    1. Release.  Executive, for
        himself, his spouse, heirs, executors, administrators and assigns, hereby unconditionally releases and forever discharges the Company and its related entities, successors, assigns, agents, directors, officers, employees, representatives, and all
        persons acting by, through, under or in concert with any of them from any and all causes of action whether known or unknown, with respect to or arising out of all those claims asserted or which could have been asserted by Executive and/or arising
        out of, or alleged to have been suffered by him in or as a consequence of his employment, contact or relationship to date with the Company, including rights or claims arising under any agreement with the Company or under any federal, state or local
        laws, including, but not limited to Title VII of the Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991, the Equal Pay Act, the Age Discrimination in Employment Act of 1967 and the Older Worker’s Benefit Protection Act of 1990,
        the Civil Rights Act of 1866, as amended, the Family Medical Leave Act, the Employee Retirement Income Security Act of 1974, the Oklahoma
        Workers’ Compensation Act, the Fair Labor Standards Act, the Americans With Disabilities Act, as amended, the Rehabilitation Act of 1973, the
        Vietnam Era Veterans’ Readjustment Assistance Act, the Genetic Information Nondiscrimination Act, the Oklahoma Anti-Discrimination Act, Oklahoma public policy, and all other federal, state or local laws.  This release also applies to any claims or
        rights Executive may have arising out of any legal or equitable restrictions on Executive’s right not to continue an employment (or other) relationship with the Company, including any express or implied employment contracts, and to any claims
        Executive may have against the Company for fraudulent inducement or misrepresentation, tortious interference with business/contractual relations, defamation, wrongful termination, public policy tort, or other retaliation claims in connection with
        workers’ compensation or alleged “whistleblower” status or on any other basis 

    
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    whatsoever.  Executive does not, however, waive any rights or claims that may arise and accrue after the date
        this Agreement is executed by him.  Further, Executive understands and agrees that this Agreement does not cover, affect, or alter any rights that cannot, by law, be released by private agreement.

    2. Consideration.  In
        consideration for Executive agreeing to the terms of this Agreement, the Company shall pay or provide to Executive the Severance Payments as set forth in the Executive Employment Agreement between the Parties.  Executive agrees that he will be
        responsible for satisfying any tax obligation that he may have or incur with regard to the Severance Payments received from the Company.

    3. Compliance with ADEA and OWBPA. 
        To comply with the Age Discrimination in Employment Act (“ADEA”) and the Older Worker’s Benefit Protection Act (“OWBPA”), the Company has advised Executive of the legal requirements of the OWBPA and fully incorporates the legal requirements by reference into this Agreement as follows:

    
      
        	

              	a.	
                This Agreement is written in layman’s terms, and Executive understands and comprehends its terms;

              

      

    

    
      
        	

              	b.	
                Executive has been advised of his right to consult an attorney to review this Agreement;

              

      

    

    
      
        	

              	c.	
                Executive does not waive any rights or claims that may arise after this Agreement is executed;

              

      

    

    
      
        	

              	d.	
                Executive is receiving consideration beyond anything of value to which he is already entitled; and

              

      

    

    
      
        	

              	e.	
                Executive acknowledges that he has had a reasonable period of time within which to consider this Agreement.

              

      

    

    Executive acknowledges that he has been given a period of twenty-one (21) calendar days during
        which to consider whether to enter into this Agreement.  Executive further acknowledges that he will have seven (7) calendar days from the date he signs and delivers a copy of the Agreement to the Company, during which time Executive may revoke the
        Agreement as to his release of claims under the ADEA and OWBPA only, by delivering a signed and dated notice of revocation to the Company.  This Agreement becomes immediately effective and enforceable as to all claims, except those arising under
        the ADEA and OWBPA.  This Agreement becomes effective and enforceable as to claims under the ADEA and OWBPA when the seven (7) day revocation period has expired if Executive has not delivered a written revocation to the Company before that time. 
        Executive acknowledges that he is giving up any rights to receive any benefits or remedial relief (such as reinstatement, back pay or front pay) as a consequence of any charge or complaint filed with the courts or any other governmental entity.  If
        Executive does file a charge or complaint with the court or any other governmental entity, then Executive agrees to forfeit any future benefits or payments that he may receive as enhanced severance pay and that Executive must repay the Company for
        any benefits or payments that he has already received as enhanced severance pay.

    4. Confidentiality.  Executive
        will not, unless required by law, disclose to others the terms of this Agreement, the benefits being paid under it or the fact of its payment, except that Executive may disclose this information to his attorney, accountant or other professional
        advisor 

    
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    to whom he must make the disclosure in order for them to render professional services to him.  Executive will
        instruct them, however, to maintain the confidentiality of this information just as he must.

    5. Voluntary Nature of Agreement. 
        Executive represents and agrees that he fully understands his right to discuss all aspects of this Agreement with an attorney and that he has had adequate opportunity to seek counsel regarding the legal and binding effect of this Agreement. 
        Executive acknowledges that he has carefully read and fully understands all the provisions of this Agreement.  Executive further acknowledges that he is voluntarily entering into this Agreement and is not under any duress or coercion whatsoever. 
        Executive agrees that the Company and its counsel have not made any additional promises to him, and he does not expect to receive anything more than what is reflected in this Agreement and the Executive Employment Agreement, pursuant to the
        conditions outlined within.

    6. Agreement Not to be Used as Evidence. 

        This Agreement shall not be admissible as evidence in any proceeding except one in which a party to this Agreement seeks to enforce this Agreement or alleges this Agreement has been breached, or one in which a court or administrative agency of
        competent jurisdiction orders Executive or the Company to produce this Agreement.  If a court or administrative agency orders production of this Agreement or disclosure of the terms of this Agreement is sought, Executive or the Company shall
        immediately notify the other party of same and shall cooperate with any efforts to obtain a protective order from that court or agency preventing such production or requiring that this Agreement be produced or filed only under seal and that other
        parties to any such proceedings and their counsel shall not disclose the existence or terms of this Agreement for purposes not related to the proceeding in which this Agreement was ordered to be produced.

    7. Assignment; Binding Effect. 
        This Agreement may not be assigned by Executive.  This Agreement is binding upon and shall inure to the benefit of the Parties hereto and their respective successors, assigns, personal representatives, officers, directors, agents, attorneys,
        parents, subsidiaries, partners, principals, and affiliates.

    8. Controlling Law and Consent to
            Jurisdiction.  This Agreement will be governed by and construed in accordance with the laws of the State of Oklahoma without giving effect to any choice of law or conflicting provision or rule.

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    PLEASE READ CAREFULLY.  THIS CONFIDENTIAL SEVERANCE AND RELEASE AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN
        CLAIMS.

    

    

    

    

    /s/ Don Kinison                                   4/22/19   

                    

    Don Kinison Date

      

    

    

    ADDvantage Technologies Group, Inc.

    

    

    By: /s/ Joseph E. Hart                             4/22/19   

         Name: Joseph E. Hart                           Date  

      

         Title: President and Chief Executive Officer

      

     

      

     

      

     

      

     

      

     

      

     

      

     

      

     

      

     

      

     

      

  

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