Document:

EX-10.1

 Exhibit 10.1 
  

 
 June 26, 2020 

Mr. Scott S. Packman 
 c/o Madison Square Garden
Entertainment Corp. 
 Two Pennsylvania Plaza 
 New York, NY
10121 
 Dear Scott:     
 This letter
agreement (the “Agreement”), effective as of July 1, 2020 (the “Effective Date”), will confirm the terms of your employment with Madison Square Garden Entertainment Corp. (the “Company”) following the Effective
Date. 
 1. Your title will be Executive Vice President and General Counsel and you will report to the Chief Executive Officer of the Company. You agree to
devote all of your business time and attention to the business and affairs of the Company and to perform your duties in a diligent, competent, professional and skillful manner and in accordance with applicable law. You shall not undertake any
outside business commitments without the Company’s consent. Notwithstanding the preceding sentence, the Company acknowledges that you are currently providing certain consulting services with respect to three separate transactions for the
investment in, or acquisition of, musical compositions and/or recordings. Until such transactions are consummated or abandoned, you will be permitted to continue to provide such services with respect to such transactions, so long as such services,
and the transactions to which they relate, do not interfere with (i) the business of the Company, or (ii) the performance of your Company duties hereunder. 

2. Your annual base salary will be not less than $800,000 annually, paid bi-weekly, subject to annual review and
potential increase by the Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”) in its discretion. The Compensation Committee will review your compensation package on an annual basis to ensure that
you are paid consistently with other similarly situated executives as well as external peers. 
 3. 

 

	 	(a)	 Commencing with the Company’s fiscal year starting July 1, 2020, you will also participate in our
discretionary annual bonus program with an annual target bonus opportunity equal to not less than 100% of your annual base salary. Bonus payments depend on a number of factors including Company, unit and individual performance. However, the decision
of whether or not to pay a bonus, and the amount of that bonus, if any, is made by the Compensation Committee in its sole discretion. Annual bonuses are typically paid early in the subsequent fiscal year. Except as otherwise provided herein, in
order to receive a bonus, you must be employed by the Company at the time bonuses are being paid. 

 Mr. Scott S. Packman 

 Page
 2
 
  

	 	(b)	 In addition to the cash compensation described above, you will be entitled to a
one-time special cash payment of $250,000, paid within thirty days of the Effective Date (the “Special Cash Award”). If at any time prior to the first anniversary of the Effective Date your
employment with the Company terminates as a result of (i) your resignation (other than for “Good Reason”), or (b) an involuntary termination by the Company for “Cause” (each as defined below), then you shall immediately
refund to the Company the gross amount of the Special Cash Award. 

 4. Commencing with the Company’s fiscal year starting
July 1, 2020, you will also, subject to your continued employment by the Company and actual grant by the Compensation Committee, participate in such equity and other long-term incentive programs that are made available in the future to
similarly situated executives at the Company. It is expected that such awards will consist of annual grants of cash and/or equity awards with an annual target value of not less than $1,200,000, all as determined by the Compensation Committee in its
discretion. All awards described in this Paragraph, in addition to being subject to actual grant by the Compensation Committee, would be pursuant to the applicable plan document and would be subject to any terms and conditions established by the
Compensation Committee in its sole discretion that would be detailed in separate agreements you would receive after any award is actually made; provided, however, that such terms and conditions shall be consistent with those in awards granted to
similarly situated executives. Long-term incentive awards are currently expected to be subject to three-year vesting. 
 5. You will also be eligible to
participate in our standard benefits program, subject to meeting the relevant eligibility requirements, payment of the required premiums, and the terms of the plans themselves. We currently offer medical, dental, vision, life, and accidental death
and dismemberment insurance; short- and long- term disability insurance; a savings and retirement program; and ten paid holidays. You will also to be eligible for paid time off to be accrued and used in accordance with Company policy. 

6. If your employment with the Company is terminated on or prior to June 30, 2023 (the “Scheduled Expiration Date”) (i) by the Company (other
than for “Cause”); or (ii) by you for “Good Reason” (other than if “Cause” then exists); then, subject to your execution and delivery, within 60 days after the date of termination of your employment, and non-revocation (within any applicable revocation period) of the Separation Agreement (as defined below), the Company will provide you with the following: 

 

	 	(a)	 Severance in an amount to be determined by the Company (the “Severance Amount”), but in no event less
than two (2) times the sum of your annual base salary and your annual target bonus as in effect at the time your employment terminates. Sixty percent (60%) of the Severance Amount will be payable to you on the
six-month anniversary of the date your employment so terminates (the 

 Mr. Scott S. Packman 

 Page
 3
 
  

	 	
“Termination Date”) and the remaining forty percent (40%) of the Severance Amount will be payable to you on the twelve-month anniversary of the Termination Date; 

 

	 	(b)	 Any unpaid annual bonus for the Company’s fiscal year prior to the fiscal year which includes your
Termination Date, and a pro rated bonus based on the amount of your base salary actually earned by you during the Company’s fiscal year through the Termination Date, each of which will be paid to you when such bonuses are generally paid
to similarly situated active executives and will be based on your then current annual target bonus as well as Company and your business unit performance for the applicable fiscal year as determined by the Company in its sole discretion, but without
adjustment for your individual performance; 

  

	 	(c)	 Each of your outstanding long-term cash awards, if any, granted under the plans of the Company shall
immediately vest in full and shall be payable to you at the same time as such awards are paid to active executives of the Company and the payment amount of such award shall be to the same extent that other similarly situated active executives
receive payment as determined by the Compensation Committee (subject to satisfaction of any applicable performance criteria but without adjustment for your individual performance); 

 

	 	(d)	 (i) All of the time-based restrictions on each of your outstanding restricted stock or restricted stock unit
awards granted to you under the plans of the Company shall immediately be eliminated, (ii) deliveries with respect to your restricted stock that are not subject to performance criteria or are subject to performance criteria that have previously
been satisfied (as certified by the Compensation Committee) shall be made immediately after the effective date of the Separation Agreement, (iii) payment and deliveries with respect to your restricted stock units that are not subject to
performance criteria or are subject to performance criteria that have previously been satisfied (as certified by the Compensation Committee) shall be made on the 90th day after the termination of
your employment and (iv) payments or deliveries with respect to your restricted stock and restricted stock units that are subject to performance criteria that have not yet been satisfied shall be made on the 90th day after the applicable performance criteria is certified by the Compensation Committee as having been satisfied; and 

 

	 	(e)	 Each of your outstanding stock options and stock appreciation awards, if any, under the plans of the Company
shall immediately vest and become exercisable, and you shall have the right to exercise each of those options and stock appreciation awards for the remainder of the term of such option or award. 

If you die after a termination of your employment that is subject to this Paragraph 6, your estate or beneficiaries will be provided with any remaining
benefits and rights under this Paragraph 6. 

 Mr. Scott S. Packman 

 Page
 4
 
  

 7. If you cease to be an employee of the Company prior to the Scheduled Expiration Date as a result of your
death or your Disability (as defined in the Company’s Long Term Disability Plan), and at such time Cause does not exist then, subject (other than in the case of death) to your execution and delivery, within 60 days after the date of termination
of your employment, and non-revocation (within any applicable revocation period) of the Separation Agreement, you or your estate or beneficiary shall be provided with the benefits and rights set forth in
Paragraphs 6(b), (d) and (e) above, and each of your outstanding long-term cash awards, if any, granted under the plans of the Company shall immediately vest in full, whether or not subject to performance criteria and shall be payable on the 90th day after the termination of your employment; provided, that if any such award is subject to any performance criteria, then (i) if the measurement period for such performance criteria has not
yet been fully completed, then the payment amount shall be at the target amount for such award and (ii) if the measurement period for such performance criteria has already been fully completed, then the payment of such award shall be at the
same time and to the extent that other similarly situated executives receive payment as determined by the Compensation Committee (subject to satisfaction of the applicable performance criteria). 

8. For purposes hereof, “Separation Agreement” shall mean the Company’s standard severance agreement (modified to reflect the terms of this
Agreement) which will include, without limitation, the provisions set forth in Paragraphs 6, 7 and 9 hereof and Annex A hereto regarding non-compete (limited to one year),
non-disparagement, non-hire/non-solicitation, confidentiality (including, without limitation, the last paragraph of
Section 3 of Annex A), and further cooperation obligations and restrictions on you (with Company reimbursement of your associated expenses and payment for your services as described in Annex A in connection with any required post-employment
cooperation) as well as a general release by you of the Company and its affiliates (and their respective directors and officers), but shall otherwise contain no post-employment covenants unless agreed to by you. The Company shall provide you with
the form of Separation Agreement within seven days of your termination of employment. For avoidance of doubt, your rights of indemnification under the Company’s Amended and Restated Certificate of Incorporation, under your indemnification
agreement with the Company and under any insurance policy, or under any other resolution of the Board of Directors of the Company shall not be released, diminished or affected by any Separation Agreement or release or any termination of your
employment. 
 9. Except as otherwise set forth in Paragraphs 6 and 7 hereof, in connection with any termination of your employment, your then outstanding
equity and cash incentive awards shall be treated in accordance with their terms and, other than as provided in this Agreement, you shall not be eligible for severance benefits under any other plan, program or policy of the Company. Nothing in this
Agreement is intended to limit any more favorable rights that you may be entitled to under your equity and/or cash incentive award agreements, including, without limitation, your rights in the event of a termination of your employment, a “Going
Private Transaction” or a “Change of Control” (as those terms are defined in the applicable award agreement). 

 Mr. Scott S. Packman 

 Page
 5
 
  

 10. For purposes of this Agreement, “Cause” means your (i) commission of an act of
fraud, embezzlement, misappropriation, willful misconduct, gross negligence or breach of fiduciary duty against the Company or an affiliate thereof, or (ii) commission of any act or omission that results in a conviction, plea of no contest,
plea of nolo contendere, or imposition of unadjudicated probation for any crime involving moral turpitude or any felony. 
 For purposes of
this Agreement, “Good Reason” means that (1) without your written consent, (A) your annual base salary or annual target bonus (as each may be increased from time to time in the Compensation Committee’s sole
discretion) is reduced, (B) your title (as in effect from time to time) is diminished, (C) you report to someone other than to the Chief Executive Officer or the Executive Chairman of the Board of the Company, (D) you are no longer
the Company’s most senior legal officer, (E) the Company requires that your principal office be located outside of the Borough of Manhattan, or (F) the Company materially breaches its obligations to you under this Agreement,
(2) you have given the Company written notice, referring specifically to this Agreement and definition, that you do not consent to such action, (3) the Company has not corrected such action within 15 days of receiving such notice,
and (4) you voluntarily terminate your employment with the Company within 90 days following the happening of the action described in subsection (1) above. 

11. This Agreement does not constitute a guarantee of employment for any definite period. Your employment is at will and may be terminated by you or the
Company at any time, with or without notice or reason. 
 12. The Company may withhold from any payment due to you any taxes required to be withheld under
any law, rule or regulation. If any payment otherwise due to you hereunder would result in the imposition of the excise tax imposed by Section 4999 of the Code, the Company will instead pay you either (i) such amount or (ii) the
maximum amount that could be paid to you without the imposition of the excise tax, depending on whichever amount results in your receiving the greater amount of after-tax proceeds. In the event that the
payments and benefits payable to you would be reduced as provided in the previous sentence, then such reduction will be determined in a manner which has the least economic cost to you and, to the extent the economic cost is equivalent, such payments
or benefits will be reduced in the inverse order of when the payments or benefits would have been made to you (i.e. later payments will be reduced first) until the reduction specified is achieved. If the Company elects to retain any
accounting or similar firm to provide assistance in calculating any such amounts, the Company shall be responsible for the costs of any such firm. 
 13. It
is intended that this Agreement will comply with Section 409A to the extent this Agreement is subject thereto, and that this Agreement shall be interpreted on a basis consistent with such intent. If and to the extent that any payment or benefit
under this Agreement, or any plan, award or arrangement of the Company or its affiliates, constitutes “non-qualified deferred compensation” subject to Section 409A and is payable to you by
reason of your termination of employment, then (a) such payment or benefit shall be made or provided to you only upon a “separation from service” as defined for purposes of Section 409A under applicable regulations

 Mr. Scott S. Packman 

 Page
 6
 
  

 
and (b) if you are a “specified employee” (within the meaning of Section 409A as determined by the Company), such payment or benefit shall not be made or provided before the
date that is six months after the date of your separation from service (or your earlier death). Any amount not paid or benefit not provided in respect of the six month period specified in the preceding sentence will be paid to you, together with
interest on such delayed amount at a rate equal to the average of the one-year LIBOR fixed rate equivalent for the ten business days prior to the date of your employment termination, in a lump sum or provided
to you as soon as practicable after the expiration of such six month period. Each payment or benefit provided under this Agreement shall be treated as a separate payment for purposes of Section 409A to the extent Section 409A applies to
such payment. 
 14. To the extent you are entitled to any expense reimbursement from the Company that is subject to Section 409A, (i) the amount
of any such expenses eligible for reimbursement in one calendar year shall not affect the expenses eligible for reimbursement in any other taxable year (except under any lifetime limit applicable to expenses for medical care), (ii) in no event shall
any such expense be reimbursed after the last day of the calendar year following the calendar year in which you incurred such expense, and (iii) in no event shall any right to reimbursement be subject to liquidation or exchange for another
benefit. 
 15. The Company will not take any action, or omit to take any action, that would expose any payment or benefit to you to the additional tax of
Section 409A, unless (i) the Company is obligated to take the action under an agreement, plan or arrangement to which you are a party, (ii) you request the action, (iii) the Company advises you in writing that the action may
result in the imposition of the additional tax and (iv) you subsequently request the action in a writing that acknowledges you will be responsible for any effect of the action under Section 409A. The Company will hold you harmless for any
action it may take or omission in violation of this Paragraph 15, including any attorney’s fees you may incur in enforcing your rights. 
 16. It
is our intention that the benefits and rights to which you could become entitled in connection with termination of employment be exempt from or comply with Section 409A. If you or the Company believes, at any time, that any of such benefit or
right is not exempt or does not comply, it will promptly advise the other and will negotiate reasonably and in good faith to amend the terms of such arrangement such that it complies (with the most limited possible economic effect on you and on the
Company). 
 17. This Agreement is personal to you and without the prior written consent of the Company shall not be assignable by you. This Agreement shall
inure to the benefit of and be enforceable by your legal representatives. This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. The rights or obligations of the Company under this Agreement may
only be assigned or transferred pursuant to a merger or consolidation in which the Company is not the continuing entity, or the sale or liquidation of all or substantially all of the assets of Company; provided, however, that the assignee or
transferee is the successor to all or substantially all of the assets of Company and such assignee or transferee assumes the liabilities and duties of Company, as contained in this Agreement, either contractually or as a matter of law. 

 Mr. Scott S. Packman 

 Page
 7
 
  

 18. To the extent permitted by law, you and the Company waive any and all rights to a jury trial with
respect to any matter relating to this Agreement (including the covenants set forth in Annex A hereof). This Agreement will be governed by and construed in accordance with the law of the State of New York applicable to contracts made and to be
performed entirely within that State. 
 19. Both the Company and you hereby irrevocably submit to the jurisdiction of the courts of the State of New
York and the federal courts of the United States of America in each case located in the City of New York, Borough of Manhattan, solely in respect of the interpretation and enforcement of the provisions of this Agreement, and each party hereby
waives, and agrees not to assert, as a defense that either party, as appropriate, is not subject thereto or that the venue thereof may not be appropriate. You and the Company each agree that mailing of process or other papers in connection with any
such action or proceeding in any manner as may be permitted by law shall be valid and sufficient service thereof. 
 20. This Agreement may not be amended
or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement. It is the parties’ intention that this Agreement not be construed more strictly with regard to you or the Company. 

21. This Agreement reflects the entire understanding and agreement of you and the Company with respect to the subject matter hereof and supersedes all prior
understandings or agreements relating thereto. 
 22. This Agreement will automatically terminate, and be of no further force or effect, on the Scheduled
Expiration Date; provided, however, that the provisions of Paragraphs 6 through 9, 12 through 22 and Annex A, and any amounts earned but not yet paid to you pursuant to the terms of this Agreement as of the Scheduled Expiration Date shall survive
the termination of the Agreement and remain binding on you and the Company in accordance with their terms. 

 Mr. Scott S. Packman 

 Page
 8
 
  

 
			
	Sincerely,
	
	MADISON SQUARE GARDEN ENTERTAINMENT CORP.
	
	 /s/ James L. Dolan

			
	By:	 	James L. Dolan
	Title:	 	Executive Chairman and Chief Executive Officer

  

	
	Accepted and Agreed:
	
	 /s/ Scott S. Packman

	Scott S. Packman

 Mr. Scott S. Packman 

 Page
 9
 
  

 ANNEX A 

ADDITIONAL COVENANTS 
 (This Annex
constitutes part of the Agreement) 
 You agree to comply with the following covenants in addition to those set forth in the Agreement. 

1. CONFIDENTIALITY 
 You agree to retain in strict confidence and
not divulge, disseminate, copy or disclose to any third party any Confidential Information, other than for legitimate business purposes of the Company and its subsidiaries. As used herein, “Confidential Information” means any non-public information that is material or of a confidential, proprietary, commercially sensitive or personal nature of, or regarding, the Company or any of its subsidiaries or any current or former director,
officer or member of senior management of any of the foregoing (collectively “Covered Parties”). The term Confidential Information includes information in written, digital, oral or any other format and includes, but is not limited to
(i) information designated or treated as confidential; (ii) budgets, plans, forecasts or other financial or accounting data; (iii) customer, guest, fan, vendor, sponsor, marketing affiliate or shareholder lists or data;
(iv) technical or strategic information regarding the Covered Parties’ advertising, entertainment, theatrical, or other businesses; (v) advertising, sponsorship, business, sales or marketing tactics, strategies or information;
(vi) policies, practices, procedures or techniques; (vii) trade secrets or other intellectual property; (viii) information, theories or strategies relating to litigation, arbitration, mediation, investigations or matters relating to
governmental authorities; (ix) terms of agreements with third parties and third party trade secrets; (x) information regarding employees, talent, players, coaches, agents, consultants, advisors or representatives, including their
compensation or other human resources policies and procedures; (xi) information or strategies relating to any potential or actual business development transactions and/or any potential or actual business acquisition, divestiture or joint
venture, and (xii) any other information the disclosure of which may have an adverse effect on the Covered Parties’ business reputation, operations or competitive position, reputation or standing in the community. 

If disclosed, Confidential Information or Other Information could have an adverse effect on the Company’s standing in the community, its business
reputation, operations or competitive position or the standing, reputation, operations or competitive position of any of its affiliates, subsidiaries, officers, directors, employees, coaches, consultants or agents or any of the Covered Parties. 

Notwithstanding the foregoing, the obligations of this section, other than with respect to subscriber information, shall not apply to Confidential Information
which is: 
 a) already in the public domain or which enters the public domain other than by your breach of this Paragraph 1; 

 Mr. Scott S. Packman 

 Page
 10
 
  

 b) disclosed to you by a third party with the right to disclose it in good faith; or 

c) specifically exempted in writing by the Company from the applicability of this Agreement. 

Notwithstanding anything elsewhere in this Agreement, including this Paragraph 1 and Paragraph 3 below, you are authorized to make any disclosure required of
you by any federal, state and local laws or judicial, arbitral or governmental agency proceedings (including making truthful statements in connection with a judicial or arbitral proceeding to enforce your rights under this Agreement, to the extent
reasonably required and made in good faith), after, to the extent legal and practicable, providing the Company with prior written notice and an opportunity to respond prior to such disclosure. In addition, this Agreement in no way restricts or
prevents you from providing truthful testimony concerning the Company to judicial, administrative, regulatory or other governmental authorities. 
 2. NON-COMPETE 
 You acknowledge that due to your executive position in the Company and the knowledge of the Company’s
and its affiliates’ confidential and proprietary information which you will obtain during the term of your employment hereunder, your employment by certain businesses would be irreparably harmful to the Company and/or its affiliates. During
your employment with the Company and thereafter through the first anniversary of the date on which your employment with the Company has terminated for any reason, you agree, to the extent permissible under applicable rules of professional
responsibility, not to (other than with the prior written consent of the Company), become employed by any Competitive Entity (as defined below). A “Competitive Entity” shall mean any any arena or theater (with at least 1,000 seats) that
competes in the same city as any of the Company’s arena’s or theaters, respectively. The ownership by you of not more than 1% of the outstanding equity of any publicly traded company shall not, by itself, be a violation of this Paragraph.

 3. ADDITIONAL UNDERSTANDINGS 
 You agree, for yourself and
others acting on your behalf, that you (and they) have not disparaged and will not disparage, make negative statements about (either “on the record” or “off the record”) or act in any manner which is intended to or does damage to
the good will of, or the business or personal reputations of the Company or any of its incumbent or former officers, directors, agents, consultants, employees, successors and assigns or any of the Covered Parties. 

The Company agrees that, except as necessary to comply with applicable law or the rules of the New York Stock Exchange or any other stock exchange on which
the Company’s stock may be traded (and any public statements made in good faith by the Company in connection therewith), it and its corporate officers and directors, employees in its public relations department or third party public relations
representatives retained by the Company will not disparage you or make negative statements in the press or other media which are damaging to your business or personal 

 Mr. Scott S. Packman 

 Page
 11
 
  

 
reputation. In the event that the Company so disparages you or makes such negative statements, then notwithstanding the “Additional Understandings” provision to the contrary, you may
make a proportional response thereto. 
 In addition, you agree that the Company is the owner of all rights, title and interest in and to all documents,
tapes, videos, designs, plans, formulas, models, processes, computer programs, inventions (whether patentable or not), schematics, music, lyrics and other technical, business, financial, advertising, sales, marketing, customer or product
development plans, forecasts, strategies, information and materials (in any medium whatsoever) developed or prepared by you or with your cooperation in connection with your employment by the Company (the “Materials”). The Company will have
the sole and exclusive authority to use the Materials in any manner that it deems appropriate, in perpetuity, without additional payment to you. 
 If
requested by the Company, you agree to deliver to the Company upon the termination of your employment, or at any earlier time the Company may request, all memoranda, notes, plans, files, records, reports, and software and other documents and data
(and copies thereof regardless of the form thereof (including electronic copies)) containing, reflecting or derived from Confidential Information or the Materials of the Company or any of its affiliates which you may then possess or have under your
control. If so requested, you shall provide to the Company a signed statement confirming that you have fully complied with this Paragraph. Notwithstanding the foregoing, you shall be entitled to retain your contacts, calendars and personal diaries
and any materials needed for your tax return preparation or related to your compensation. 
 In addition, you agree for yourself and others acting on your
behalf, that you (and they) shall not, at any time, participate in any way in the writing or scripting (including, without limitation, any “as told to” publications) of any book, periodical story, movie, play, or other similar written or
theatrical work or video that (i) relates to your services to the Company or any of its affiliates or (ii) otherwise refers to the Company or its respective businesses, activities, directors, officers, employees or representatives (other
than identifying your biographical information), without the prior written consent of the Company. 
 4. FURTHER COOPERATION 

Following the date of termination of your employment with the Company (the “Expiration Date”), you will no longer provide any regular services to the
Company or represent yourself as a Company agent. If, however, the Company so requests, you agree to cooperate fully with the Company in connection with any matter with which you were involved prior to the Expiration Date, or in any litigation or
administrative proceedings or appeals (including any preparation therefore) where the Company believes that your personal knowledge, attendance and participation could be beneficial to the Company. This cooperation includes, without limitation,
participation on behalf of the Company in any litigation or administrative proceeding brought by any former or existing Company employees, representatives, agents or vendors. The Company will pay you for your services rendered under this provision
at the rate of $5,450 per day for each day or part thereof, within 30 days of the approval of the invoice therefor. 

 Mr. Scott S. Packman 

 Page
 12
 
  

 The Company will provide you with reasonable notice in connection with any cooperation it requires in
accordance with this section and will take reasonable steps to schedule your cooperation in any such matters so as not to materially interfere with your other professional and personal commitments. The Company will reimburse you for any reasonable out-of-pocket expenses you reasonably incur in connection with the cooperation you provide hereunder as soon as practicable after you present appropriate documentation
evidencing such expenses. You agree to provide the Company with an estimate of such expense before you incur the same. 
 5.
NON-HIRE OR SOLICIT 
 You agree not to hire, seek to hire, or cause any person or entity to hire or seek to hire
(without the prior written consent of the Company), directly or indirectly (whether for your own interest or any other person or entity’s interest) any person who is or was in the prior six months an employee of the Company, or any of its
subsidiaries, until the first anniversary of the date of your termination of employment with the Company. This restriction does not apply to any former employee who was discharged by the Company or any of its affiliates. In addition, this
restriction will not prevent you from providing references. If you remain continuously employed with the Company through the Scheduled Expiration Date, then this agreement not to hire or solicit will expire on the Scheduled Expiration Date. 

6. ACKNOWLEDGMENTS 
 You acknowledge that the restrictions
contained in this Annex A, in light of the nature of the Company’s business and your position and responsibilities, are reasonable and necessary to protect the legitimate interests of the Company. You acknowledge that the Company has no
adequate remedy at law and would be irreparably harmed if you breach or threaten to breach the provisions of this Annex A, and therefore agree that the Company shall be entitled to injunctive relief, to prevent any breach or threatened breach of any
of those provisions and to specific performance of the terms of each of such provisions in addition to any other legal or equitable remedy it may have. You further agree that you will not, in any equity proceeding relating to the enforcement of the
provisions of this Annex A, raise the defense that the Company has an adequate remedy at law. Nothing in this Annex A shall be construed as prohibiting the Company from pursuing any other remedies at law or in equity that it may have or any other
rights that it may have under any other agreement. If it is determined that any of the provisions of this Annex A or any part thereof, is unenforceable because of the duration or scope (geographic or otherwise) of such provision or because of
applicable rules of professional responsibility, it is the intention of the parties that the duration or scope of such provision, as the case may be, shall be reduced so that such provision becomes enforceable and, in its reduced form, such
provision shall then be enforceable and shall be enforced. 

 Mr. Scott S. Packman 

 Page
 13
 
  

 7. SURVIVAL 

The provisions of this Annex A shall survive any termination of your employment by the Company or the expiration of the Agreement except as otherwise provided
herein.Exhibit
10.1

 

SIGMA
LABS, INC. 2020 STOCK APPRECIATION RIGHTS PLAN

 

1.
Purpose; Eligibility.

 

1.1
General Purpose. The name of this plan
is the Sigma Labs, Inc. 2020 Stock Appreciation Rights Plan (the “Plan”). The purposes of the Plan are to (a)
enable Sigma Labs, Inc., a Nevada corporation (the “Company”), and any Affiliate to attract and retain the
types of Employees, Consultants and Directors who will contribute to the Company’s long range success; (b) provide incentives
that align the interests of Employees, Consultants and Directors with those of the shareholders of the Company; and (c) promote
the success of the Company’s business.

 

1.2
Eligible Award Recipients. The persons
eligible to receive Awards are the Employees, Consultants and Directors of the Company and its Affiliates and such other individuals
designated by the Committee who are reasonably expected to become Employees, Consultants and Directors after the receipt of Awards.

 

1.3
Available Awards. Awards that may be granted
under the Plan include Stock Appreciation Rights.

 

2.
Definitions.

 

“Affiliate”
means a corporation or other entity that, directly or through one or more intermediaries, controls, is controlled by or is under
common control with, the Company.

 

“Applicable
Laws” means the requirements related to or implicated by the administration of the Plan under applicable state corporate
law, United States federal and state securities laws, the Code, any stock exchange or quotation system on which the shares of
Common Stock are listed or quoted, and the applicable laws of any foreign country or jurisdiction where Awards are granted under
the Plan.

 

“Award”
means any Stock Appreciation Right granted under the Plan.

 

“Award
Agreement” means a written agreement, contract, certificate or other instrument or document evidencing the terms and
conditions of an individual Award granted under the Plan which may, in the discretion of the Company, be transmitted electronically
to any Participant. Each Award Agreement shall be subject to the terms and conditions of the Plan.

 

“Beneficial
Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating
the beneficial ownership of any particular Person, such Person shall be deemed to have beneficial ownership of all securities
that such Person has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable
or is exercisable only after the passage of time. The terms “Beneficially Owns” and “Beneficially Owned”
have a corresponding meaning.

 

“Board”
means the Board of Directors of the Company, as constituted at any time.

 

“Cause”
means:

 

With
respect to any Employee or Consultant, unless the applicable Award Agreement states otherwise:

 

    	 

     

    

 

	 	(a)
        If the Employee or Consultant is a party to an employment agreement with the Company or its Affiliates and such agreement
        provides for a definition of Cause, the definition contained therein; or

         

        (b)
        If no such agreement exists, or if such agreement does not define Cause: (i) the commission of, or plea of guilty or no
        contest to, a felony or a crime involving moral turpitude or the commission of any other act involving willful malfeasance
        or material fiduciary breach with respect to the Company or an Affiliate; (ii) conduct that brings or is reasonably likely
        to bring the Company or an Affiliate negative publicity or into public disgrace, embarrassment, or disrepute; (iii) gross
        negligence or willful misconduct with respect to the Company or an Affiliate; (iv) material violation of state or federal
        securities laws; or (v) material violation of the Company’s written policies or codes of conduct, including written
        policies related to discrimination, harassment, performance of illegal or unethical activities, and ethical misconduct.

         

        With
        respect to any Director, unless the applicable Award Agreement states otherwise, a determination by a majority of the
        disinterested Board members that the Director has engaged in any of the following: (a) malfeasance in office; (b) gross
        misconduct or neglect; (c) false or fraudulent misrepresentation inducing the director’s appointment; (d) willful
        conversion of corporate funds; or (e) repeated failure to participate in Board meetings on a regular basis despite having
        received proper notice of the meetings in advance.

 

The
Committee, in its absolute discretion, shall determine the effect of all matters and questions relating to whether a Participant
has been discharged for Cause.

 

“Change
in Control” means (i) a liquidation or dissolution of the Company; (ii) a merger or consolidation of the Company with
or into another corporation or entity (other than a merger with a wholly-owned subsidiary); (iii) a sale of all or substantially
all of the assets of the Company; or (iv) a purchase or other acquisition of more than 70% of the outstanding stock of the Company
by one person or by more than one person acting in concert.

 

“Code”
means the Internal Revenue Code of 1986, as it may be amended from time to time. Any reference to a section of the Code shall
be deemed to include a reference to any regulations promulgated thereunder.

 

“Committee”
means a committee of one or more members of the Board appointed by the Board to administer the Plan in accordance with Section
3.3 and Section 3.4.

 

“Common
Stock” means the common stock, $0.001 par value per share, of the Company.

 

“Company”
means Sigma Labs, Inc, a Nevada corporation, and any successor thereto.

 

“Consultant”
means any individual or entity which performs bona fide services to the Company, other than as an Employee or Director.

 

“Continuous
Service” means that the Participant’s service with the Company or an Affiliate, as an Employee, Consultant or
Director, is not interrupted or terminated. The Participant’s Continuous Service shall not be deemed to have terminated
merely because of a change in the capacity in which the Participant renders service to the Company as an Employee, Consultant
or Director, provided that there is no interruption or termination of the Participant’s Continuous Service; provided
further that if any Award is subject to Section 409A of the Code, this sentence shall only be given effect to the extent consistent
with Section 409A of the Code. For example, a change in status from an Employee of the Company to solely a Director will not constitute
an interruption of Continuous Service. The Committee or its delegate, in its sole discretion, may determine whether Continuous
Service shall be considered interrupted in the case of any leave of absence approved by that party, including sick leave, military
leave or any other personal or family leave of absence. The Committee or its delegate, in its sole discretion, may determine whether
a Company transaction, such as a sale or spin-off of a division or subsidiary that employs a Participant, shall be deemed to result
in a termination of Continuous Service for purposes of affected Awards, and such decision shall be final, conclusive and binding.

 

    	2

     

    

 

“Director”
means a member of the Board.

 

“Disability”
means, unless the applicable Award Agreement says otherwise, that the Participant is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment. The determination of whether an individual has
a Disability shall be determined under procedures established by the Committee. The Committee may rely on any determination that
a Participant is disabled for purposes of benefits under any long-term disability plan maintained by the Company or any Affiliate
in which a Participant participates.

 

“Effective
Date” shall mean the date as of which this Plan is adopted by the Board.

 

“Employee”
means any person employed by the Company or an Affiliate.

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

“Fair
Market Value” means, as of any date, the value of the Common Stock as determined below. If the Common Stock is listed
on any established stock exchange or a national market system, including without limitation, the New York Stock Exchange or the
Nasdaq Stock Market, the Fair Market Value shall be the closing price of a share of Common Stock (or if no sales were reported
the closing price on the date immediately preceding such date) as quoted on such exchange or system on the day of determination,
as reported in the Wall Street Journal. In the absence of an established market for the Common Stock, the Fair Market Value
shall be determined in good faith by the Committee and such determination shall be conclusive and binding on all persons.

 

“Grant
Date” means the date on which the Committee adopts a resolution, or takes other appropriate action, expressly granting
an Award to a Participant that specifies the key terms and conditions of the Award or, if a later date is set forth in such resolution,
then such date as is set forth in such resolution.

 

“Non-Employee
Director” means a Director who is a “non-employee director” within the meaning of Rule 16b-3.

 

“Participant”
means an eligible person to whom an Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding
Award.

 

“Person”
means a person as defined in Section 13(d)(3) of the Exchange Act.

 

“Plan”
means this Sigma Labs, Inc. 2020 Stock Appreciation Rights Plan, as amended and/or amended and restated from time to time.

 

    	3

     

    

 

“Rule
16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect from time to
time.

 

“Securities
Act” means the Securities Act of 1933, as amended.

 

“Stock
Appreciation Right” means the right pursuant to an Award granted under Section 5 to receive, upon exercise, an amount
payable in cash equal to the number of shares subject to the Stock Appreciation Right that is being exercised multiplied by the
excess of (a) the Fair Market Value of a share of Common Stock on the date the Award is exercised, over (b) the exercise price
specified in the Stock Appreciation Right Award Agreement.

 

3.
Administration.

 

3.1
Authority of Committee. The Plan shall
be administered by the Committee or, in the Board’s sole discretion, by the Board. Subject to the terms of the Plan, the
Committee’s charter and Applicable Laws, and in addition to other express powers and authorization conferred by the Plan,
the Committee shall have the authority:

 

(a)
to construe and interpret the Plan and apply its provisions;

 

(b)
to promulgate, amend, and rescind rules and regulations relating to the administration of the Plan;

 

(c)
to authorize any person to execute, on behalf of the Company, any instrument required to carry out the purposes of the Plan;

 

(d)
to delegate its authority to one or more persons who is an officer of the Company within the meaning of Section 16 of the Exchange
Act and the rules and regulations promulgated thereunder with respect to Awards that do not involve “insiders” within
the meaning of Section 16 of the Exchange Act;

 

(e)
to determine when Awards are to be granted under the Plan and the applicable Grant Date;

 

(f)
from time to time to select, subject to any limitations set forth in this Plan, those eligible Award recipients to whom Awards
shall be granted;

 

(g)
to determine the number of shares of Common Stock to be made subject to each Award;

 

(h)
to prescribe the terms and conditions of each Award, including, without limitation, the exercise price and medium of payment and
vesting provisions, and to specify the provisions of the Award Agreement relating to such grant;

 

(i)
to amend any outstanding Awards, including for the purpose of modifying the time or manner of vesting, or the term of any outstanding
Award; provided, however, that if any such amendment impairs a Participant’s rights or increases a Participant’s
obligations under his or her Award or creates or increases a Participant’s federal income tax liability with respect to
an Award, such amendment shall also be subject to the Participant’s consent;

 

    	4

     

    

 

(j)
to determine the duration and purpose of leaves of absences which may be granted to a Participant without constituting termination
of their employment for purposes of the Plan, which periods shall be no shorter than the periods generally applicable to Employees
under the Company’s employment policies;

 

(k)
to make decisions with respect to outstanding Awards that may become necessary upon a change in corporate control;

 

(l)
to interpret, administer, reconcile any inconsistency in, correct any defect in and/or supply any omission in the Plan and any
instrument or agreement relating to, or Award granted under, the Plan; and

 

(m)
to exercise discretion to make any and all other determinations which it determines to be necessary or advisable for the administration
of the Plan.

 

The
Committee also may modify the exercise price of any outstanding Award.

 

3.2
Committee Decisions Final. All decisions
made by the Committee pursuant to the provisions of the Plan shall be final and binding on the Company and the Participants, unless
such decisions are determined by a court having jurisdiction to be arbitrary and capricious.

 

3.3
Delegation. The Committee or, if no Committee
has been appointed, the Board may delegate administration of the Plan to a committee or committees of one or more members of the
Board, and the term “Committee” shall apply to any person or persons to whom such authority has been delegated.
The Committee shall have the power to delegate to a subcommittee any of the administrative powers the Committee is authorized
to exercise (and references in this Plan to the Board or the Committee shall thereafter be to the committee or subcommittee),
subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by
the Board. The Board may abolish the Committee at any time and revest in the Board the administration of the Plan. The members
of the Committee shall be appointed by and serve at the pleasure of the Board. From time to time, the Board may increase or decrease
the size of the Committee, add additional members to, remove members (with or without cause) from, appoint new members in substitution
therefor, and fill vacancies, however caused, in the Committee. The Committee shall act pursuant to a vote of the majority of
its members or, in the case of a Committee comprised of only two members, the unanimous consent of its members, whether present
or not, or by the written consent of the majority of its members and minutes shall be kept of all of its meetings and copies thereof
shall be provided to the Board. Subject to the limitations prescribed by the Plan and the Board, the Committee may establish and
follow such rules and regulations for the conduct of its business as it may determine to be advisable.

 

3.4
Committee Composition. Except as otherwise
determined by the Board, the Committee shall consist solely of two or more Non-Employee Directors. The Board shall have discretion
to determine whether or not it intends to comply with the exemption requirements of Rule 16b-3. However, if the Board intends
to satisfy such exemption requirements, with respect to any insider subject to Section 16 of the Exchange Act, the Committee shall
be a compensation committee of the Board that at all times consists solely of two or more Non-Employee Directors. Within the scope
of such authority, the Board or the Committee may delegate to a committee of one or more members of the Board who are not Non-Employee
Directors the authority to grant Awards to eligible persons who are not then subject to Section 16 of the Exchange Act. Nothing
herein shall create an inference that an Award is not validly granted under the Plan in the event Awards are granted under the
Plan by a compensation committee of the Board that does not at all times consist solely of two or more Non-Employee Directors.

 

    	5

     

    

 

3.5
Indemnification. In addition to such other
rights of indemnification as they may have as Directors or members of the Committee, and to the extent allowed by Applicable Laws,
the Committee shall be indemnified by the Company against the reasonable expenses, including attorney’s fees, actually incurred
in connection with any action, suit or proceeding or in connection with any appeal therein, to which the Committee may be party
by reason of any action taken or failure to act under or in connection with the Plan or any Award granted under the Plan, and
against all amounts paid by the Committee in settlement thereof (provided, however, that the settlement has been approved
by the Company, which approval shall not be unreasonably withheld) or paid by the Committee in satisfaction of a judgment in any
such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding
that such Committee did not act in good faith and in a manner which such person reasonably believed to be in the best interests
of the Company, or in the case of a criminal proceeding, had no reason to believe that the conduct complained of was unlawful;
provided, however, that within 60 days after the institution of any such action, suit or proceeding, such Committee shall,
in writing, offer the Company the opportunity at its own expense to handle and defend such action, suit or proceeding.

 

4.
Eligibility.

 

4.1
Eligibility for Specific Awards. Awards
may be granted to Employees, Consultants and Directors, and those individuals whom the Committee determines are reasonably expected
to become Employees, Consultants and/or Directors following the Grant Date.

 

5.
Stock Appreciation Rights. Each Stock
Appreciation Right granted under the Plan shall be evidenced by an Award Agreement. Each Stock Appreciation Right so granted shall
be subject to the conditions set forth in this Section 5, and to such other conditions not inconsistent with the Plan as may be
reflected in the applicable Award Agreement.

 

5.1
Term The term of a Stock Appreciation
Right granted under the Plan shall be determined by the Committee; provided, however, no Stock Appreciation Right shall
be exercisable later than the tenth anniversary of the Grant Date.

 

5.2
Vesting 

 

Each
Stock Appreciation Right may, but need not, vest and therefore become exercisable in periodic installments that may, but need
not, be equal. The Stock Appreciation Right may be subject to such other terms and conditions on the time or times when it may
be exercised as the Committee may deem appropriate. The vesting provisions of individual Stock Appreciation Rights may vary. The
Committee may, but shall not be required to, provide for an acceleration of vesting and exercisability in the terms of any Stock
Appreciation Right upon the occurrence of a specified event.

 

5.3
Exercise and Payment Upon exercise of
a Stock Appreciation Right, the holder shall be entitled to receive from the Company an amount equal to the number of shares of
Common Stock subject to the Stock Appreciation Right that is being exercised multiplied by the excess of (i) the Fair Market Value
of a share of Common Stock on the date the Award is exercised, over (ii) the exercise price specified in the Stock Appreciation
Right. Payment with respect to the exercise of a Stock Appreciation Right shall be made on the date of exercise. Payment shall
be made in the form of cash.

 

    	6

     

    

 

5.4
Exercise Price The exercise price of a
Stock Appreciation Right shall be determined by the Committee, but shall not be less than 100% of the Fair Market Value of one
share of Common Stock on the Grant Date of such Stock Appreciation Right.

 

6.
Miscellaneous.

 

6.1
Acceleration of Exercisability and Vesting.
The Committee shall have the power to accelerate the time at which an Award may first be exercised or the time during which an
Award or any part thereof will vest in accordance with the Plan, notwithstanding the provisions in the Award stating the time
at which it may first be exercised or the time during which it will vest.

 

6.2
No Employment or Other Service Rights.
Nothing in the Plan or any instrument executed or Award granted pursuant thereto shall confer upon any Participant any right to
continue to serve the Company or an Affiliate in the capacity in effect at the time the Award was granted or shall affect the
right of the Company or an Affiliate to terminate (a) the employment of an Employee with or without notice and with or without
Cause or (b) the service of a Director pursuant to the By-laws of the Company or an Affiliate, and any applicable provisions of
the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be.

 

6.3
Transfer; Approved Leave of Absence. For
purposes of the Plan, no termination of employment by an Employee shall be deemed to result from either (a) a transfer of employment
to the Company from an Affiliate or from the Company to an Affiliate, or from one Affiliate to another, or (b) an approved leave
of absence for military service or sickness, or for any other purpose approved by the Company, if the Employee’s right to
reemployment is guaranteed either by a statute or by contract or under the policy pursuant to which the leave of absence was granted
or if the Committee otherwise so provides in writing, in either case, except to the extent inconsistent with Section 409A of the
Code if the applicable Award is subject thereto.

 

7.
Adjustments Upon Changes in Stock. In
the event of changes in the outstanding Common Stock or in the capital structure of the Company by reason of any stock split,
reverse stock split, an extraordinary corporate transaction such as any recapitalization, reorganization, merger, consolidation,
combination, exchange, or other relevant change in capitalization occurring after the Grant Date of any Award, Awards granted
under the Plan and any Award Agreements, the exercise price of Stock Appreciation Rights, will be equitably adjusted or substituted,
as to the number, price or kind of a share of Common Stock or other consideration subject to such Awards to the extent necessary
to preserve the economic intent of such Award. Any adjustments made under this Section 7 shall be made in a manner which does
not adversely affect the exemption provided pursuant to Rule 16b-3 under the Exchange Act. The Company shall give each Participant
notice of an adjustment hereunder and, upon notice, such adjustment shall be conclusive and binding for all purposes.

 

8.
Effect of Change in Control.

 

8.1
Unless otherwise provided in an Award Agreement, notwithstanding any provision of the Plan to the contrary:

 

(a)
In the event of a Change in Control, all outstanding Stock Appreciation Rights shall become immediately exercisable with respect
to 100% of the shares subject to such Stock Appreciation Rights.

 

8.2
The obligations of the Company under the Plan shall be binding upon any successor corporation or organization resulting from the
merger, consolidation or other reorganization of the Company, or upon any successor corporation or organization succeeding to
all or substantially all of the assets and business of the Company and its Affiliates, taken as a whole.

 

    	7

     

    

 

9.
Amendment of the Plan and Awards.

 

9.1
Amendment of Plan. The Board at any time,
and from time to time, may amend or terminate the Plan.

 

9.2
Contemplated Amendments. It is expressly
contemplated that the Board may amend the Plan in any respect the Board deems necessary or advisable to provide eligible Employees,
Consultants and Directors with the maximum benefits provided or to be provided under the provisions of the Code and the regulations
promulgated thereunder relating to the nonqualified deferred compensation provisions of Section 409A of the Code and/or to bring
the Plan and/or Awards granted under it into compliance therewith.

 

9.3
No Impairment of Rights. Rights under
any Award granted before amendment of the Plan shall not be impaired by any amendment of the Plan unless (a) the Company requests
the consent of the Participant and (b) the Participant consents in writing.

 

9.4
Amendment of Awards. The Committee at
any time, and from time to time, may amend the terms of any one or more Awards; provided, however, that the Committee may
not affect any amendment which would otherwise constitute an impairment of the rights under any Award unless (a) the Company requests
the consent of the Participant and (b) the Participant consents in writing.

 

10.
General Provisions.

 

10.1
Forfeiture Events. The Committee may specify
in an Award Agreement that the Participant’s rights, payments and benefits with respect to an Award shall be subject to
reduction, cancellation, forfeiture or recoupment upon the occurrence of certain events, in addition to applicable vesting conditions
of an Award. Such events may include, without limitation, breach of restrictive covenants that are contained in the Award Agreement
or otherwise applicable to the Participant, a termination of the Participant’s Continuous Service for Cause, or other conduct
by the Participant that is detrimental to the business or reputation of the Company and/or its Affiliates.

 

10.2
Clawback. Notwithstanding any other provisions
in this Plan, all Awards granted under the Plan shall be subject to recoupment in accordance with any clawback policy that the
Company is required to adopt pursuant to the listing standards of any national securities exchange on which the Company’s
securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable
law. No recovery of compensation under such a clawback policy shall be an event giving rise to a right to resign for “good
reason” or “constructive termination” (or similar term) under the Plan or any agreement with the Company.

 

10.3
Other Compensation Arrangements. Nothing
contained in this Plan shall prevent the Board 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.

 

10.4
Sub-Plans. The Committee may from time
to time establish sub-plans under the Plan for purposes of satisfying securities, tax or other laws of various jurisdictions in
which the Company intends to grant Awards. Any sub-plans shall contain such limitations and other terms and conditions as the
Committee determines are necessary or desirable. All sub-plans shall be deemed a part of the Plan, but each sub-plan shall apply
only to the Participants in the jurisdiction for which the sub-plan was designed.

 

    	8

     

    

 

10.5
Unfunded Plan. The Plan shall be unfunded.
Neither the Company, the Board nor the Committee shall be required to establish any special or separate fund or to segregate any
assets to assure the performance of its obligations under the Plan.

 

10.6
Recapitalizations. Each Award Agreement
shall contain provisions required to reflect the provisions of Section 7.

 

10.7
Delivery. Upon exercise of a right granted
under this Plan, the Company shall pay any amounts due within a reasonable period of time thereafter. Subject to any statutory
or regulatory obligations the Company may otherwise have, for purposes of this Plan, 30 days shall be considered a reasonable
period of time.

 

10.8
Other Provisions. The Award Agreements
authorized under the Plan may contain such other provisions not inconsistent with this Plan, including, without limitation, restrictions
upon the exercise of Awards, as the Committee may deem advisable.

 

10.9
Section 409A. The Plan is intended to
comply with Section 409A of the Code to the extent subject thereto, and, accordingly, to the maximum extent permitted, the Plan
shall be interpreted and administered to be in compliance therewith. Any payments described in the Plan that are due within the
“short-term deferral period” as defined in Section 409A of the Code shall not be treated as deferred compensation
unless Applicable Laws require otherwise. Notwithstanding anything to the contrary in the Plan, to the extent required to avoid
accelerated taxation and tax penalties under Section 409A of the Code, amounts that would otherwise be payable and benefits that
would otherwise be provided pursuant to the Plan during the six (6) month period immediately following the Participant’s
termination of Continuous Service shall instead be paid on the first payroll date after the six-month anniversary of the Participant’s
separation from service (or the Participant’s death, if earlier). Notwithstanding the foregoing, neither the Company nor
the Committee shall have any obligation to take any action to prevent the assessment of any additional tax or penalty on any Participant
under Section 409A of the Code and neither the Company nor the Committee will have any liability to any Participant for such tax
or penalty.

 

10.10
Section 16. It is the intent of the Company
that the Plan satisfy, and be interpreted in a manner that satisfies, the applicable requirements of Rule 16b-3 as promulgated
under Section 16 of the Exchange Act so that Participants will be entitled to the benefit of Rule 16b-3, or any other rule promulgated
under Section 16 of the Exchange Act, and will not be subject to short-swing liability under Section 16 of the Exchange Act. Accordingly,
if the operation of any provision of the Plan would conflict with the intent expressed in this Section 10.10, such provision to
the extent possible shall be interpreted and/or deemed amended so as to avoid such conflict.

 

10.11
Beneficiary Designation. Each Participant
under the Plan may from time to time name any beneficiary or beneficiaries by whom any right under the Plan is to be exercised
in case of such Participant’s death. Each designation will revoke all prior designations by the same Participant, shall
be in a form reasonably prescribed by the Committee and shall be effective only when filed by the Participant in writing with
the Company during the Participant’s lifetime.

 

10.12
Expenses. The costs of administering the
Plan shall be paid by the Company.

 

    	9

     

    

 

10.13
Severability. If any of the provisions
of the Plan or any Award Agreement is held to be invalid, illegal or unenforceable, whether in whole or in part, such provision
shall be deemed modified to the extent, but only to the extent, of such invalidity, illegality or unenforceability and the remaining
provisions shall not be affected thereby.

 

10.14
Plan Headings. The headings in the Plan
are for purposes of convenience only and are not intended to define or limit the construction of the provisions hereof.

 

10.15
Non-Uniform Treatment. The Committee’s
determinations under the Plan need not be uniform and may be made by it selectively among persons who are eligible to receive,
or actually receive, Awards. Without limiting the generality of the foregoing, the Committee shall be entitled to make non-uniform
and selective determinations, amendments and adjustments, and to enter into non-uniform and selective Award Agreements.

 

11.
Effective Date of Plan. The Plan shall
become effective as of the Effective Date.

 

12.
Termination or Suspension of the Plan.
The Plan shall terminate automatically on June 1, 2030. No Award shall be granted pursuant to the Plan after such date, but Awards
theretofore granted may extend beyond that date. The Board may suspend or terminate the Plan at any earlier date pursuant to Section
9.1 hereof. No Awards may be granted under the Plan while the Plan is suspended or after it is terminated.

 

13.
Choice of Law. The law of the State of
Nevada shall govern all questions concerning the construction, validity and interpretation of this Plan, without regard to such
state’s conflict of law rules.

 

As
adopted by the Board of Directors of Sigma Labs, Inc. on June 23, 2020.

 

    	10

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00311-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00311-of-00352.parquet"}]]