Document:

Exhibit 10.2

 

FRESH VINE WINE, INC. 

2021 EQUITY INCENTIVE PLAN

 

Effective December 9, 2021

 

TABLE OF CONTENTS 

 

	1.	Purpose	3
	 	 	 
	2.	Administration	3
	 	 	 
	3.	Eligible Participants	3
	 	 	 
	4.	Types of Incentives	3
	 	 	 
	5.	Shares Subject to the Plan	4
	 	5.1.	Number of Shares	4
	 	5.2.	Cancellation	4
	 	5.3.	Type of Common Stock	4
	 	5.4.	Limitation on Awards Granted to Non-Employee Directors	4
	 	 	 	 
	6.	Stock Options	4
	 	6.1.	Price	4
	 	6.2.	Number	5
	 	6.3.	Duration and Time for Exercise	5
	 	6.4.	Manner of Exercise	5
	 	6.5.	Incentive Stock Options	5
	 	 	 	 
	7.	Stock Appreciation Rights	6
	 	7.1.	Price	6
	 	7.2.	Number	6
	 	7.3.	Duration	6
	 	7.4.	Exercise	6
	 	7.5.	Issuance of Shares Upon Exercise	6
	 	 	 	 
	8.	Stock Awards, Restricted Stock and Restricted Stock Units	7
	 	8.1.	Number of Shares	7
	 	8.2.	Sale Price	7
	 	8.3.	Restrictions	7
	 	8.4.	Enforcement of Restrictions	8

 

     

     

    

 

	 	8.5.	End of Restrictions	8
	 	8.6.	Rights of Holders of Restricted Stock and Restricted Stock Units	8
	 	8.7.	Settlement of Restricted Stock Units	8
	 	8.8.	Dividend Equivalents	8
	 	 	 	 
	9.	Performance Awards	8
	 	 	 	 
	10.	General	9
	 	10.1.	Plan Effective Date and Stockholder Approval; Termination of Plan	9
	 	10.2.	Duration	9
	 	10.3.	Non-transferability of Incentives	9
	 	10.4.	Effect of Termination or Death	9
	 	10.5.	Restrictions under Securities Laws	9
	 	10.6.	Adjustment	10
	 	10.7.	Incentive Plans and Agreements	10
	 	10.8.	Withholding	10
	 	10.9.	No Continued Employment, Engagement or Right to Corporate Assets	11
	 	10.10.	Payments Under Incentives	11
	 	10.11.	Amendment of the Plan	11
	 	10.12.	Amendment of Agreements for Incentives; No Repricing	11
	 	10.13.	Sale, Merger, Exchange or Liquidation	11
	 	10.14.	Definition of Fair Market Value	12
	 	10.15.	Definition of Grant Date	13
	 	10.16.	Compliance with Code Section 409A	13

 

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FRESH VINE WINE, INC. 

2021 EQUITY INCENTIVE PLAN

 

1. Purpose. The purpose
of the 2021 Equity Incentive Plan (the “Plan”) of Fresh Vine Wine, Inc., a Nevada corporation (the “Company”),
is to increase stockholder value and to advance the interests of the Company by furnishing a variety of economic incentives (“Incentives”)
designed to attract, retain and motivate employees, certain key consultants and directors of the Company. Incentives may consist of opportunities
to purchase or receive shares of common stock, $0.001 par value, of the Company (“Common Stock”) or other incentive awards
on terms determined under this Plan.

 

2. Administration.
The Plan shall be administered by the board of directors of the Company (the “Board of Directors”) or by a stock option or
compensation committee (the “Committee”) of the Board of Directors. The Committee shall consist of at least one director
of the Company and shall be appointed from time to time by the Board of Directors. Each member of the Committee shall be (a) a “non-employee
director” within the meaning of Rule 16b-3 of the Securities Exchange Act of 1934 (including the regulations promulgated thereunder,
the “1934 Act”) (a “Non-Employee Director”), and (b) shall be independent directors under listing rules of the
NYSE American or, if the Company is no longer listed on the NYSE American, then any national securities exchange on which the Company’s
common stock may be listed. The Committee shall have complete authority to award Incentives under the Plan, to interpret the Plan, and
to make any other determination which it believes necessary and advisable for the proper administration of the Plan. The Committee’s
decisions and matters relating to the Plan shall be final and conclusive on the Company and its participants. If at any time there is
no stock option or compensation committee, the term “Committee”, as used in the Plan, shall refer to the Board of Directors.
The Committee or the Board of Directors may delegate to one or more officers the authority to do one or both of the following (i) designate
employees who are not officers to be recipients of Stock Options (and, to the extent permitted by applicable law, other Incentives) and,
to the extent permitted by applicable law, the terms of such Incentives (which need not be identical), and (ii) determine the number
of shares of Common Stock to be subject to such Incentives; provided, however, that (y) the Committee or Board of Director resolutions
regarding such delegation shall specify the maximum number of shares of Common Stock that may be subject to Incentives granted by such
officer(s) during any fiscal year, as well as any other limitations on such officer’s authority, and (z) that such officer may
not grant an Incentive to himself or herself. Any such Incentives will be granted on the form of Incentive agreement most recently approved
for use by the Committee or the Board of Directors, unless otherwise provided in the resolutions approving the delegation authority.
The officer(s) shall report each Incentive granted pursuant to such delegation of authority at the first meeting of the Board of Directors
(or, if applicable, the Committee) following the date of such grant.

 

3. Eligible Participants.
Officers of the Company, employees of the Company or its subsidiaries, members of the Board of Directors, and consultants or other independent
contractors who provide services to the Company or its subsidiaries shall be eligible to receive Incentives under the Plan when designated
by the Committee. Participants may be designated individually or by groups or categories (for example, by pay grade) as the Committee
deems appropriate. Participation by officers of the Company or its subsidiaries and any performance objectives relating to such officers
must be approved by the Committee. Participation by others and any performance objectives relating to others may be approved by groups
or categories (for example, by pay grade) and authority to designate participants who are not officers and to set or modify such targets
may be delegated.

 

4. Types of Incentives.
Incentives under the Plan may be granted in any one or a combination of the following forms: (a) incentive stock options and non-statutory
stock options (Section 6); (b) stock appreciation rights (“SARs”) (Section 7); (c) stock awards (Section 8); (d) restricted
stock (Section 8); restricted stock units (Section 8) and performance awards (Section 9). Subject to the specific limitations provided
in this Plan, payment of Incentives may be in the form of cash, Common Stock or combinations thereof as the Committee shall determine,
and with such other restrictions as it may impose.

 

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5. Shares Subject to the
Plan.

 

5.1. Number
of Shares. Subject to adjustment as provided in Section 10.6, the number of shares of Common Stock which may be issued under the
Plan shall not exceed 1,800,000 shares of Common Stock. Shares of Common Stock that are issued under the Plan or are subject to Incentives
awarded under the Plan will be applied to reduce the maximum number of shares of Common Stock remaining available for issuance under
the Plan.

 

5.2. Cancellation.
If an Incentive granted under the Plan expires or is terminated or canceled unexercised as to any shares of Common Stock or forfeited
or reacquired by the Company pursuant to rights reserved upon issuance thereof, such forfeited and reacquired shares may again be issued
under the Plan pursuant to another Incentive. If any Shares subject to an Incentive granted under the Plan are withheld or applied as
payment in connection with the exercise of an Incentive (including the withholding of shares on the exercise of a stock option or the
exercise of an SAR that is settled in shares) or the withholding or payment of taxes related thereto, such shares shall not again be
available for grant under the Plan.

 

5.3. Type of
Common Stock. Common Stock issued under the Plan in connection with Incentives will be authorized and unissued shares.

 

5.4. Limitation
on Awards Granted to Non-Employee Directors. No member of the Board of Directors who is not also an employee of the Company may be
granted any Incentive or Incentives that exceed in the aggregate $500,000 in value (such value computed as of the date of grant in accordance
with applicable financial accounting rules) in any calendar year (provided that service solely as a director, or payment of a fee for
such services, will not cause a director to be considered an “employee” for purposes of this Section 5.4). The foregoing
limit shall not apply to any Incentive made pursuant to any election by the directors to receive an Incentive in lieu of all or a portion
of annual and committee retainers and meeting fees that are otherwise required to be paid in cash.

 

6. Stock Options.
A stock option is a right to purchase shares of Common Stock from the Company. Each stock option granted by the Committee under this
Plan shall be subject to the following terms and conditions:

 

6.1. Price.
The option price per share shall be determined by the Committee, subject to adjustment under Section 10.6. Notwithstanding the foregoing
sentence, the option price per share shall not be less than the Fair Market Value (as defined in Section 10.14) of the Common Stock on
the Grant Date (as defined in Section 10.15).

 

6.2. Number.
The number of shares of Common Stock subject to a stock option shall be determined by the Committee, subject to adjustment as provided
in Section 10.6. The number of shares of Common Stock subject to a stock option shall be reduced in the same proportion that the holder
thereof exercises an SAR if any SAR is granted in conjunction with or related to the stock option.

 

6.3. Duration
and Time for Exercise. Subject to earlier termination as provided in Section 10.3, the term of each stock option shall be determined
by the Committee but shall not exceed ten years and one day from the Grant Date. Each stock option shall become exercisable at such time
or times during its term as shall be determined by the Committee at the time of grant. The Committee may accelerate the exercisability
of any stock option. Subject to the first sentence of this paragraph, the Committee may extend the term of any stock option to the extent
provided in Section 10.4.

 

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6.4. Manner
of Exercise. A stock option may be exercised, in whole or in part, by giving written notice to the Company, specifying the number
of shares of Common Stock to be purchased and accompanied by the full purchase price for such shares. The option price shall be payable
(a) in United States dollars upon exercise of the option and may be paid by cash, uncertified or certified check or bank draft; (b) unless
otherwise provided in the option agreement, by delivery of shares of Common Stock in payment of all or any part of the option price,
which shares shall be valued for this purpose at the Fair Market Value on the date such option is exercised; or (c) unless otherwise
provided in the option agreement, by instructing the Company to withhold from the shares of Common Stock issuable upon exercise of the
stock option shares of Common Stock in payment of all or any part of the exercise price and/or any related withholding tax obligations
consistent with Section 10.8, which shares shall be valued for this purpose at the Fair Market Value or in such other manner as may be
authorized from time to time by the Committee. Before the issuance of shares of Common Stock upon the exercise of a stock option, a participant
shall have no rights as a stockholder.

 

6.5. Incentive
Stock Options. Notwithstanding anything in the Plan to the contrary, the following additional provisions shall apply to the grant
of stock options which are intended to qualify as Incentive Stock Options (as such term is defined in Code Section 422):

 

(a) The
aggregate Fair Market Value (determined as of the time the option is granted) of the shares of Common Stock with respect to which Incentive
Stock Options are exercisable for the first time by any participant during any calendar year (under all of the Company’s plans)
shall not exceed $100,000. The determination will be made by taking Incentive Stock Options into account in the order in which they were
granted. If such excess only applies to a portion of an Incentive Stock Option, the Committee, in its discretion, will designate which
shares will be treated as shares to be acquired upon exercise of an Incentive Stock Option.

 

(b) Any
option agreement for an Incentive Stock Option under the Plan shall contain such other provisions as the Committee shall deem advisable,
but shall in all events be consistent with and contain all provisions required in order to qualify the options as Incentive Stock Options.

 

(c) All
Incentive Stock Options must be granted within ten years from the earlier of the date on which this Plan was adopted by Board of Directors
or the date this Plan was approved by the stockholders.

 

(d) Unless
sooner exercised, all Incentive Stock Options shall expire no later than ten years after the Grant Date.

 

(e) The
option price for Incentive Stock Options shall be not less than the Fair Market Value of the Common Stock subject to the option on the
Grant Date.

 

(f) If
Incentive Stock Options are granted to any participant who, at the time such option is granted, would own (within the meaning of Code
Section 422) stock possessing more than 10% of the total combined voting power of all classes of stock of the employer corporation or
of its parent or subsidiary corporation, (i) the option price for such Incentive Stock Options shall be not less than 110% of the Fair
Market Value of the Common Stock subject to the option on the Grant Date and (ii) such Incentive Stock Options shall expire no later than
five years after the Grant Date.

 

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7. Stock Appreciation
Rights. An SAR is a right to receive, without payment to the Company, a number of shares of Common Stock, the amount of which is
determined pursuant to the formula set forth in Section 7.5. An SAR may be granted (a) with respect to any stock option granted under
this Plan, either concurrently with the grant of such stock option or at such later time as determined by the Committee (as to all or
any portion of the shares of Common Stock subject to the stock option), or (b) alone, without reference to any related stock option.
Each SAR granted by the Committee under this Plan shall be subject to the following terms and conditions:

 

7.1. Price.
The exercise price per share of any SAR granted without reference to a stock option shall be determined by the Committee, subject to
adjustment under Section 10.6. Notwithstanding the foregoing sentence, the exercise price per share shall not be less than the Fair Market
Value of the Common Stock on the Grant Date.

 

7.2. Number.
Each SAR granted to any participant shall relate to such number of shares of Common Stock as shall be determined by the Committee, subject
to adjustment as provided in Section 10.6. In the case of an SAR granted with respect to a stock option, the number of shares of Common
Stock to which the SAR relates shall be reduced in the same proportion that the holder of the option exercises the related stock option.

 

7.3. Duration.
Subject to earlier termination as provided in Section 10.3, the term of each SAR shall be determined by the Committee but shall not exceed
ten years and one day from the Grant Date. Unless otherwise provided by the Committee, each SAR shall become exercisable at such time
or times, to such extent and upon such conditions as the stock option, if any, to which it relates is exercisable. The Committee may
in its discretion accelerate the exercisability of any SAR. Subject to the first sentence of this paragraph, the Committee may extend
the term of any SAR to the extent provided in Section 10.4.

 

7.4. Exercise.
An SAR may be exercised, in whole or in part, by giving written notice to the Company, specifying the number of SARs which the holder
wishes to exercise. Upon receipt of such written notice, the Company shall, within 90 days thereafter, deliver to the exercising holder
certificates for the shares of Common Stock or cash or both, as determined by the Committee, to which the holder is entitled pursuant
to Section 7.5.

 

7.5. Issuance
of Shares Upon Exercise. The number of shares of Common Stock which shall be issuable upon the exercise of an SAR shall be determined
by dividing:

 

(a) the
number of shares of Common Stock as to which the SAR is exercised multiplied by the amount of the appreciation in such shares (for this
purpose, the “appreciation” shall be the amount by which the Fair Market Value of the shares of Common Stock subject to the
SAR on the exercise date exceeds (1) in the case of an SAR related to a stock option, the purchase price of the shares of Common Stock
under the stock option or (2) in the case of an SAR granted alone, without reference to a related stock option, an amount which shall
be determined by the Committee at the time of grant, subject to adjustment under Section 10.6); by

 

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(b) the
Fair Market Value of a share of Common Stock on the exercise date.

 

No fractional shares
of Common Stock shall be issued upon the exercise of an SAR; instead, the holder of the SAR shall be entitled to receive a cash adjustment
equal to the same fraction of the Fair Market Value of a share of Common Stock on the exercise date or to purchase the portion necessary
to make a whole share at its Fair Market Value on the date of exercise.

 

8. Stock Awards, Restricted
Stock and Restricted Stock Units. A stock award consists of the transfer by the Company to a participant of shares of Common Stock,
with or without other payment therefor, as additional compensation for services to the Company. A share of restricted stock consists
of shares of Common Stock which are sold or transferred by the Company to a participant at a price, if any, determined by the Committee
and subject to restrictions on their sale or other transfer by the participant. Restricted stock units represent the right to receive
shares of Common Stock at a future date. The transfer of Common Stock pursuant to stock awards, ,the transfer or sale of restricted stock
and restricted stock units shall be subject to the following terms and conditions:

 

8.1. Number
of Shares. The number of shares to be transferred or sold by the Company to a participant pursuant to a stock award or as restricted
stock, or the number of shares that may be issued pursuant to a restricted stock unit, shall be determined by the Committee.

 

8.2. Sale Price.
The Committee shall determine the price, if any, at which shares of restricted stock shall be sold to a participant, which may vary from
time to time and among participants and which may be below the Fair Market Value of such shares of Common Stock at the date of sale.

 

8.3. Restrictions.
All shares of restricted stock transferred or sold by the Company hereunder, and all restricted stock units granted hereunder, shall
be subject to such restrictions as the Committee may determine, including, without limitation any or all of the following:

 

(a) a
prohibition against the sale, transfer, pledge or other encumbrance of the shares of restricted stock, or the delivery of shares pursuant
to restricted stock units, such prohibition to lapse at such time or times as the Committee shall determine (whether in annual or more
frequent installments, at the time of the death, disability or retirement of the holder of such shares, or otherwise);

 

(b) a
requirement that the holder of shares of restricted stock or restricted stock units forfeit, or (in the case of shares sold to a participant)
re-sell back to the Company at his or her cost, all or a part of such shares in the event of termination of his or her employment, service
on the Board of Directors or consulting engagement during any period in which such shares are subject to restrictions; and

 

(c) such
other conditions or restrictions as the Committee may deem advisable. 

 

8.4. Enforcement
of Restrictions. In order to enforce the restrictions imposed by the Committee pursuant to Section 8.3, the participant receiving
restricted stock or restricted stock units shall enter into an agreement with the Company setting forth the conditions of the grant.
Shares of restricted stock shall be registered in the name of the participant and deposited, together with a stock power endorsed in
blank, with the Company. Each such certificate shall bear a legend that refers to the Plan and the restrictions imposed under the applicable
agreement. At the Committee’s election, shares of restricted stock may be held in book entry form subject to the Company’s
instructions until any restrictions relating to the restricted stock grant lapse.

 

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8.5. End of
Restrictions. Subject to Section 10.5, at the end of any time period during which the shares of restricted stock are subject to forfeiture
and restrictions on transfer, such shares will be delivered free of all restrictions to the participant or to the participant’s
legal representative, beneficiary or heir. Subject to Section 10.5, upon the lapse or waiver of restrictions applicable to restricted
stock units, or at a later time specified in the agreement governing the grant of restricted stock units, any shares derived from the
restricted stock units shall be issued and delivered to the holder of the restricted stock units.

 

8.6. Rights
of Holders of Restricted Stock and Restricted Stock Units. Subject to the terms and conditions of the Plan, each participant receiving
restricted stock shall have all the rights of a stockholder with respect to shares of stock during any period in which such shares are
subject to forfeiture and restrictions on transfer, including without limitation, the right to vote such shares. Any holder of restricted
stock units shall not be, and shall not have rights and privileges of, a stockholder with respect to any shares that may be derived from
the restricted stock units unless and until such shares have been issued.

 

8.7. Settlement
of Restricted Stock Units. Restricted stock units may be satisfied by delivery of shares of stock, cash equal to the Fair Market
Value of the specified number of shares covered by the restricted stock units, or a combination thereof, as determined by the Committee
at the date of grant or thereafter.

 

8.8. Dividend
Equivalents. In connection with any award of restricted stock units, the Committee may grant the right to receive cash, shares of
stock or other property equal in value to dividends paid with respect to the number of shares represented by the restricted stock units
(“Dividend Equivalents”). Unless otherwise determined by the Committee at the date of grant, any Dividend Equivalents that
are granted with respect to any award of restricted stock units shall be either (a) paid with respect to such restricted stock units
at the dividend payment date in cash or in shares of unrestricted stock having a Fair Market Value equal to the amount of such dividends,
or (b) deferred with respect to such restricted stock units and the amount or value thereof automatically deemed reinvested in additional
restricted stock units until the time for delivery of shares (if any) pursuant to the terms of the restricted stock unit award.

 

9. Performance Awards.
The right of a participant to exercise or receive a grant or settlement of any Incentive, and the timing thereof, may be subject to such
performance conditions as may be specified by the Committee (such an Incentive is referred to as a “Performance Award”).
The Committee may use such business criteria and other measures of performance as it may deem appropriate in establishing any performance
conditions, and may exercise its discretion to change the amounts payable under any Incentive subject to performance conditions.

 

10. General.

 

10.1. Plan Effective
Date and Stockholder Approval; Termination of Plan. The Plan shall become effective on the Effective Date, subject to subsequent
approval within twelve (12) months of its adoption by the Board by stockholders of the Company eligible to vote in the election of directors,
by a vote sufficient to meet the requirements of Code Section 422, Rule 16b-3 under the Exchange Act (if applicable), applicable requirements
of any stock exchange, if any, and other laws, regulations, and obligations of the Company applicable to the Plan. Awards may be granted
subject to stockholder approval, but may not be exercised or otherwise settled in the event stockholder approval is not obtained. The
Plan shall terminate no later than ten (10) years from the date of the later of (x) the Effective Date and (y) the date an increase in
the number of shares reserved for issuance under the Plan is approved by the Board (so long as such increase is also approved by the
stockholders).

 

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10.2. Duration.
The Plan shall remain in effect until all Incentives granted under the Plan have either been satisfied by the issuance of shares of Common
Stock or the payment of cash or been terminated under the terms of the Plan and all restrictions imposed on shares of Common Stock in
connection with their issuance under the Plan have lapsed. No Incentives may be granted under the Plan after the tenth anniversary of
the Effective Date of the Plan.

 

10.3. Non-transferability
of Incentives. No stock option, SAR, restricted stock or stock award may be transferred, pledged or assigned by the holder thereof
(except, in the event of the holder’s death, by will or the laws of descent and distribution to the limited extent provided in
the Plan or the Incentive, or pursuant to a qualified domestic relations order as defined by the Code or Title I of the Employee Retirement
Income Security Act, or the rules thereunder), and the Company shall not be required to recognize any attempted assignment of such rights
by any participant. Notwithstanding the preceding sentence, stock options (other than stock options intended to qualify as Incentive
Stock Options pursuant to Section 6.5) may be transferred by the holder thereof to the holder’s spouse, children, grandchildren
or parents (collectively, the “Family Members”), to trusts for the benefit of Family Members, to partnerships or limited
liability companies in which Family Members are the only partners or stockholders, or to entities exempt from federal income taxation
pursuant to Code Section 501(c)(3). During a participant’s lifetime, a stock option may be exercised only by him or her, by his
or her guardian or legal representative or by the transferees permitted by this Section 10.3.

 

10.4. Effect
of Termination or Death. If a participant ceases to be an employee of or consultant to the Company for any reason, including death
or disability, any Incentives may be exercised or shall expire at such times as may be set forth in the agreement, if any, applicable
to the Incentive, or otherwise as determined by the Committee; provided, however, the term of an Incentive may not be extended beyond
the term originally prescribed when the Incentive was granted, unless the Incentive satisfies (or is amended to satisfy) the requirements
of Code Section 409A, including the rules and regulations promulgated thereunder (together, “Code Section 409A”); and provided
further that the term of an Incentive may not be extended beyond the maximum term permitted under this Plan.

 

10.5. Restrictions
under Securities Laws. Notwithstanding anything in this Plan to the contrary: (a) the Company may, if it shall determine it necessary
or desirable for any reason, at the time of award of any Incentive or the issuance of any shares of Common Stock pursuant to any Incentive,
require the recipient of the Incentive, as a condition to the receipt thereof or to the receipt of shares of Common Stock issued pursuant
thereto, to deliver to the Company a written representation of present intention to acquire the Incentive or the shares of Common Stock
issued pursuant thereto for his or her own account for investment and not for distribution; and (b) if at any time the Company further
determines, in its sole discretion, that the listing, registration or qualification (or any updating of any such document) of any Incentive
or the shares of Common Stock issuable pursuant thereto is necessary on any securities exchange or under any federal or state securities
or blue sky law, or that the consent or approval of any governmental regulatory body is necessary or desirable as a condition of, or
in connection with the award of any Incentive, the issuance of shares of Common Stock pursuant thereto, or the removal of any restrictions
imposed on such shares, such Incentive shall not be awarded or such shares of Common Stock shall not be issued or such restrictions shall
not be removed, as the case may be, in whole or in part, unless such listing, registration, qualification, consent or approval shall
have been effected or obtained free of any conditions not acceptable to the Company.

 

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10.6. Adjustment.
In the event of any recapitalization, stock dividend, stock split, combination of shares or other change in the Common Stock, the number
of shares of Common Stock then subject to the Plan, including shares subject to outstanding Incentives, and the other numbers of shares
of Common Stock provided in the Plan, shall be adjusted in proportion to the change in outstanding shares of Common Stock. In the event
of any such adjustments, the purchase price of any option, the performance objectives of any Incentive, and the shares of Common Stock
issuable pursuant to any Incentive shall be adjusted as and to the extent appropriate, in the discretion of the Committee, to provide
participants with the same relative rights before and after such adjustment.

 

10.7. Incentive
Plans and Agreements. Except in the case of stock awards, the terms of each Incentive shall be stated in a plan or agreement approved
by the Committee. The Committee may also determine to enter into agreements with holders of options to reclassify or convert certain
outstanding options, within the terms of the Plan, as Incentive Stock Options or as non-statutory stock options and in order to eliminate
SARs with respect to all or part of such options and any other previously issued options. The Committee shall communicate the key terms
of each award to the participant promptly after the Committee approves the grant of such award.

 

10.8. Withholding.

 

(a) The
Company shall have the right to withhold from any payments made under the Plan or to collect as a condition of payment, any taxes required
by law to be withheld. If so permitted by the Committee at the time of the award of any Incentive or at a later time, at any time when
a participant is required to pay to the Company an amount required to be withheld under applicable income tax laws in connection with
a distribution of Common Stock or upon exercise of an option or SAR or upon vesting of restricted stock, the participant may satisfy this
obligation in whole or in part by electing (the “Election”) to have the Company withhold, from the distribution or from such
shares of restricted stock, shares of Common Stock having a value up to the minimum amount of withholding taxes required to be collected
on the transaction. The value of the shares to be withheld shall be based on the Fair Market Value of the Common Stock on the date that
the amount of tax to be withheld shall be determined (“Tax Date”).

 

(b) Each
Election must be made before the Tax Date. The Committee may disapprove of any Election, may suspend or terminate the right to make Elections,
or may provide with respect to any Incentive that the right to make Elections shall not apply to such Incentive. An Election is irrevocable.

 

10.9. No Continued
Employment, Engagement or Right to Corporate Assets. No participant under the Plan shall have any right, because of his or her participation,
to continue in the employ of the Company for any period of time or to any right to continue his or her present or any other rate of compensation.
Nothing contained in the Plan shall be construed as giving an employee, a consultant, such persons’ beneficiaries or any other
person any equity or interests of any kind in the assets of the Company or creating a trust of any kind or a fiduciary relationship of
any kind between the Company and any such person.

 

10.10. Payments
Under Incentives. Payment of cash or distribution of any shares of Common Stock to which a participant is entitled under any Incentive
shall be made as provided in the Incentive. Except as permitted under Section 10.17, payments and distributions may not be deferred under
any Incentive unless the deferral complies with the requirements of Code Section 409A.

 

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10.11. Amendment
of the Plan. The Board of Directors may amend, modify, suspend, discontinue or terminate the Plan at any time. However, no such amendment
or discontinuance shall adversely change or impair, without the consent of the recipient, an Incentive previously granted. Further, any
amendment or modification that (a) increases the total number of shares available for issuance pursuant to Incentives granted under the
Plan (except as contemplated by the provisions of Section 10.6 relating to a recapitalization, stock dividend, stock split, combination
of shares or other change in the Common Stock), or (b) requires the approval of the Company’s shareholders pursuant to any applicable
law, regulation or securities exchange rule or listing requirement, shall be subject to approval by the Company’s stockholders.

 

10.12. Amendment
of Agreements for Incentives; No Repricing. Except as otherwise provided in this Section 10.12 or Section 10.17, the terms of an
existing Incentive may be amended by agreement between the Committee and the participant. Notwithstanding the foregoing sentence, in
the case of a stock option or SAR, no such amendment shall (a) without stockholder approval, lower the exercise price of a previously
granted stock option or SAR, cancel a stock option or SAR when the exercise price per share exceeds the Fair Market Value of the underlying
shares in exchange for another Incentive or cash, or take any other action with respect to a stock option that may be treated as a repricing
under the federal securities laws or generally accepted accounting principles; or (b) extend the term of the Incentive, except as provided
in Sections 10.4 and 10.17.

 

10.13. Sale,
Merger, Exchange or Liquidation. Unless otherwise provided in the agreement for an Incentive, in the event of an acquisition of the
Company through the sale of substantially all of the Company’s assets or through a merger, exchange, reorganization or liquidation
of the Company or a similar event as determined by the Committee (collectively a “transaction”), the Committee shall be authorized,
in its sole discretion, to take any and all action it deems equitable under the circumstances, including but not limited to any one or
more of the following:

 

(a) providing
that the Plan and all Incentives shall terminate and the holders of (i) all outstanding vested options shall receive, in lieu of any shares
of Common Stock they would be entitled to receive under such options, such stock, securities or assets, including cash, as would have
been paid to such participants if their options had been exercised and such participant had received Common Stock immediately before such
transaction (with appropriate adjustment for the exercise price, if any), (ii) SARs that entitle the participant to receive Common Stock
shall receive, in lieu of any shares of Common Stock each participant was entitled to receive as of the date of the transaction pursuant
to the terms of such Incentive, if any, such stock, securities or assets, including cash, as would have been paid to such participant
if such Common Stock had been issued to and held by the participant immediately before such transaction, and (iii) any Incentive under
the Employment Agreement which does not entitle the participant to receive Common Stock shall be equitably treated as determined by the
Committee.

 

(b) providing
that participants holding outstanding vested Common Stock based Incentives shall receive, with respect to each share of Common Stock issuable
pursuant to such Incentives as of the effective date of any such transaction, at the determination of the Committee, cash, securities
or other property, or any combination thereof, in an amount equal to the excess, if any, of the Fair Market Value of such Common Stock
on a date within ten days before the effective date of such transaction over the option price or other amount owed by a participant, if
any, and that such Incentives shall be cancelled, including the cancellation without consideration of all options that have an exercise
price below the per share value of the consideration received by the Company in the transaction.

 

    11

     

    

 

(c) providing
that the Plan (or replacement plan) shall continue with respect to Incentives not cancelled or terminated as of the effective date of
such transaction and provide to participants holding such Incentives the right to earn their respective Incentives on a substantially
equivalent basis (taking into account the transaction and the number of shares or other equity issued by such successor entity) with respect
to the equity of the entity succeeding the Company by reason of such transaction.

 

(d) providing
that all unvested, unearned or restricted Incentives, including but not limited to restricted stock for which restrictions have not lapsed
as of the effective date of such transaction, shall be void and deemed terminated, or, in the alternative, for the acceleration or waiver
of any vesting, earning or restrictions on any Incentive.

 

The Board of Directors
may restrict the rights of participants or the applicability of this Section 10.13 to the extent necessary to comply with Section 16(b)
of the 1934 Act, the Code or any other applicable law or regulation. The grant of an Incentive award pursuant to the Plan shall not limit
in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business
structure or to merge, exchange or consolidate or to dissolve, liquidate, sell or transfer all or any part of its business or assets.

 

10.14. Definition
of Fair Market Value. For purposes of this Plan, the “Fair Market Value” of a share of Common Stock at a specified date
shall, unless otherwise expressly provided in this Plan, be the amount which the Committee determines in good faith to be 100% of the
fair market value of such a share as of the date in question. Notwithstanding the foregoing:

 

(a) If
such shares are listed on a U.S. securities exchange, then Fair Market Value shall be determined by reference to the last sale price of
a share of Common Stock on such U.S. securities exchange on the applicable date. If such U.S. securities exchange is closed for trading
on such date, or if the Common Stock does not trade on such date, then the last sale price used shall be the one on the date the Common
Stock last traded on such U.S. securities exchange.

 

(b) If
such shares are publicly traded but are not listed on a U.S. securities exchange, then Fair Market Value shall be determined by reference
to the trading price of a share of Common Stock on such date (or, if the applicable market is closed on such date, the last date on which
the Common Stock was publicly traded), by a method consistently applied by the Committee.

 

(c) If
such shares are not publicly traded, then the Committee’s determination will be based upon a good faith valuation of the Company’s
Common Stock as of such date, which shall be based upon such factors as the Committee deems appropriate. The valuation shall be accomplished
in a manner that complies with Code Section 409A and shall be consistently applied to Incentives under the Plan.

 

10.15. Definition
of Grant Date. For purposes of this Plan, the “Grant Date” of an Incentive shall be the date on which the Committee approved
the award or, if later, the date established by the Committee as the date of grant of the Incentive.

 

    12

     

    

 

10.16. Compliance
with Code Section 409A.

 

(a) Except
to the extent such acceleration or deferral is permitted by the requirements of Code Section 409A, neither the Committee nor a participant
may accelerate or defer the time or schedule of any payment of, or the amount scheduled to be paid under, an Incentive that constitutes
Deferred Compensation (as defined in paragraph(d) below); provided, however, that payment shall be permitted if it is in accordance with
a “specified time” or “fixed schedule” or on account of “separation from service,” “disability,”
death, “change in control” or “ unforeseeable emergency” (as those terms are defined under Code Section 409A)
that is specified in the agreement evidencing the Incentive.

 

(b) Notwithstanding
anything in this Plan, unless the agreement evidencing the Incentive specifically provides otherwise, if a participant is treated as a
Specified Employee (as defined in paragraph (d) and as determined under Code Section 409A by the Committee in good faith) as of the date
of his or her “separation from service” as defined for purposes of Code Section 409A, the Company may not make payment to
the participant of any Incentive that constitutes Deferred Compensation, earlier than 6 months following the participant’s separation
from service (or if earlier, upon the Specified Employee’s death), except as permitted under Code Section 409A. Any payments that
otherwise would be payable to the Specified Employee during the foregoing 6-month period will be accumulated and payment delayed until
the first date after the 6-month period. The Committee may specify in the Incentive agreement, that the amount of the Deferred Compensation
delayed under this paragraph shall accumulate interest, earnings or Dividend Equivalents (as applicable) during the period of such delay.

 

(c) The
Committee may, however, reform any provision in an Incentive that is intended to comply with (or be exempt from) Code Section 409A, to
maintain to the maximum extent practicable the original intent of the applicable provision without violating the provisions of Code Section
409A.

 

(d) For
purposes of this Section 10.17, “Deferred Compensation” means any Incentive under this Plan that provides for the “deferral
of compensation” under a “nonqualified deferred compensation plan” (as those terms are defined under Code Section 409A)
and that would be subject to the taxes specified in Code Section 409A(a)(1) if and to the extent that the Plan and the agreement evidencing
the Incentive do not meet or are not operated in compliance with the requirements of paragraphs (a)(2), (a)(3) and (a)(4) of Code Section
409A . Deferred Compensation shall not include any amount that is otherwise exempt from the requirements of Code Section 409A. A “Specified
Employee” means a Participant who is a “key employee” as described in Code Section 416 (i) (disregarding paragraph (5)
thereof) at any time during the Company’s fiscal year ending on January 31, or such other “identification date” that
applies consistently for all plans of the Company that provide “deferred compensation” that is subject to the requirements
of Code Section 409A. Each participant will be identified as a Specified Employee in accordance with Code Section 409A, including with
respect to the merger of the Company with any other company or any spin-off or similar transaction, and such identification shall apply
for the 12-month period commencing on the first day of the fourth month following the identification date. Notwithstanding the foregoing,
no participant shall be a Specified Employee unless the stock of the Company (or other member of a “controlled group of corporations”
as determined under Code Section 1563) is publicly traded on an established securities market (or otherwise) as of the date of the participant’s
“separation from service” as defined in Code Section 409A.

 

Approved by the Board of Directors on December
9, 2021.

 

Approved by the stockholders of the Company on
December 11, 2021.

 

 

13Exhibit
4.1

 

DESCRIPTION
OF THE REGISTRANT’S SECURITIES

REGISTERED
PURSUANT TO SECTION 12

OF
THE SECURITIES EXCHANGE ACT OF 1934

 

Introduction

 

The
following is a summary of information concerning the capital stock of Optex Systems Holdings, Inc. (the “Company”). This
discussion is subject to the relevant provisions of Delaware law and is qualified in its entirety by reference to the Company’s
Certificate of Incorporation, Bylaws, Certificate of Designation of Series A Convertible Preferred Stock (“Series A Certificate
of Designation”), Certificate of Designation, Number, Powers, Preferences and Relative, Participating, Optional, and other Special
Rights and the Qualifications, Limitations, Restrictions, and other Distinguishing Characteristics of Series B Preferred Stock (“Series
B Certificate of Designation”), and Certificate of Designation of Preferences, Rights and Limitations of Series C Convertible Preferred
Stock (“Series C Certificate of Designation”). The Company’s Certificate of Incorporation, Bylaws, Series A Certificate
of Designation, Series B Certificate of Designation and Series C Certificate of Designation include more details regarding the provisions
described below and other provisions. The Company has filed copies of those documents with the United States Securities and Exchange
Commission (“SEC”).

 

Authorized
Capital Stock

 

The
Company’s authorized capital stock consists of 2,000,000,000 shares of common stock, par value $0.001 per share (“Common
Stock”), and 5,000 shares of preferred stock, par value $0.001 per share (“Preferred Stock”), of which (i) 1,027 are
designed as Series A Convertible Preferred Stock (“Series A Shares”), (ii) 1,010 are designed as Series B Convertible Preferred
Stock (“Series B Shares”), and (iii) 400 are designed as Series C Convertible Preferred Stock (“Series C Shares”).

 

Common
Stock

 

Dividends.
Holders of shares of our Common Stock will be entitled to receive dividends when, as and if declared by the Company’s Board of
Directors (the “Board”) at its discretion out of funds legally available for that purpose, subject to the preferential rights
of any outstanding shares of Preferred Stock. The timing, declaration, amount and payment of future dividends depends on the Company’s
financial condition, earnings, capital requirements and debt service obligations, as well as legal requirements, regulatory constraints,
industry practice and other factors that the Board deems relevant. The Company’s Board makes all decisions regarding its payment
of dividends from time-to-time in accordance with applicable law.

 

Voting
Rights. The holders of the Company’s Common Stock are entitled to one vote for each share held of record on all matters submitted
to a vote of the stockholders. With certain exceptions, a majority of the votes cast at a stockholder meeting at which a quorum is present
must approve all stockholder matters. Except with respect to vacancies or new directorships, the Company’s Bylaws provide that
directors are elected by a plurality of the votes cast on the election of directors at a stockholder meeting at which a quorum is present.
The holders of the Company’s Common Stock do not have cumulative voting rights for the election of directors or for any other purpose.

 

    	 

     

    

 

Other
Rights. Subject to any preferential liquidation rights of holders of Preferred Stock that may be outstanding, upon the Company’s
dissolution, the holders of Common Stock will be entitled to share ratably in its assets legally available for distribution to the Company’s
stockholders. The holders of the Common Stock do not have preemptive rights or preferential rights to subscribe for shares of the Company’s
capital stock.

 

Fully
Paid. The issued and outstanding shares of Common Stock are fully paid and non-assessable. Any additional shares of Common Stock
that may be issued in the future will also be fully paid and non-assessable.

 

Undesignated
Preferred Stock

 

The
Company currently has no outstanding shares of Preferred Stock, with all previously issued Series A Shares, Series B Shares and Series
C Shares having been converted or redeemed. The Board has no present intention to issue any shares of Preferred Stock. The Company is
authorized to issue up to 5,000 shares of Preferred Stock in one or more class or series. An aggregate of 2,437 shares of Preferred Stock
were previously designated as Series A Shares, Series B Shares or Series C Shares, so only 2,563 shares of authorized Preferred Stock
remain available for issuance in a new class or series. The Board, without further action by the holders of the Common Stock, may issue
shares of Preferred Stock. The Board is vested with the authority to fix by resolution the designations, preferences and relative, participating,
optional or other special rights, and the qualifications, limitations or restrictions of any Preferred Stock issued, including, without
limitation, redemption rights, dividend rights, liquidation preferences and conversion or exchange rights of any class or series of Preferred
Stock, and to fix the number of classes or series of Preferred Stock, the number of shares constituting each class or series and the
voting powers for each class or series.

 

Anti-Takeover
Provisions of the Company’s Certificate of Incorporation and Bylaws and Delaware Law

 

The
Company’s Certificate of Incorporation and Bylaws include a number of provisions that may have the effect of delaying, deferring
or preventing another party from acquiring control of it and encouraging persons considering unsolicited tender offers or other unilateral
takeover proposals to negotiate with the Company’s Board rather than pursue non-negotiated takeover attempts. These provisions
include the items described below.

 

Filling
Vacancies. Any vacancy on the Board, however occurring, including a vacancy resulting from an increase in the size of the Board,
may be filled by the affirmative vote of a majority of the Board’s directors then in office, even if less than a quorum. The treatment
of vacancies may have the effect of making it more difficult for stockholders to change the composition of the Board.

 

    	 

     

    

 

Section
203 of the Delaware General Corporation Law. The Company is subject to the provisions of Section 203 of the Delaware General Corporation
Law. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a “business combination” with
an “interested stockholder” for a three-year period following the time that this stockholder becomes an interested stockholder,
unless the business combination is approved in a prescribed manner. Under Section 203, a business combination between a corporation and
an interested stockholder is prohibited unless it satisfies one of the following conditions:

 

	 	●	before
    the stockholder became interested, the Board approved either the business combination or the transaction which resulted in the stockholder
    becoming an interested stockholder;
	 	 	 
	 	●	upon
    consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder
    owned at least 85% of the Company’s voting stock outstanding at the time the transaction commenced, excluding for purposes
    of determining the voting stock outstanding, shares owned by persons who are directors and also officers, and employee stock plans,
    in some instances, but not the outstanding voting stock owned by the interested stockholder; or
	 	 	 
	 	●	at
    or after the time the stockholder became interested, the business combination was approved by the Board and authorized at an annual
    or special meeting of the stockholders by the affirmative vote of at least two-thirds of the outstanding voting stock which is not
    owned by the interested stockholder.

 

Section
203 defines a business combination to include:

 

	 	●	any
    merger or consolidation involving the Company and the interested stockholder;
	 	 	 
	 	●	any
    sale, transfer, lease, pledge or other disposition involving the interested stockholder of 10% or more of the Company’s our
    assets;
	 	 	 
	 	●	subject
    to exceptions, any transaction that results in the issuance or transfer by the Company of any of its stock to the interested stockholder;
	 	 	 
	 	●	subject
    to exceptions, any transaction involving the Company that has the effect of increasing the proportionate share of the stock of any
    of the Company’s class or series beneficially owned by the interested stockholder; and
	 	 	 
	 	●	the
    receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided
    by or through the Company.

 

In
general, Section 203 defines an interested stockholder as any entity or person beneficially owning 15% or more of the outstanding voting
stock of the Company and any entity or person affiliated with or controlling or controlled by the entity or person.

 

Undesignated
Preferred Stock. The Company’s Certificate of Incorporation provides for 5,000 authorized shares of Preferred Stock, with 2,563
of such Preferred Stock remaining available for designation and issuance in a new class or series. The existence of authorized but unissued
shares of Preferred Stock may enable the Board to discourage an attempt to obtain control of the Company by means of a merger, tender
offer, proxy contest or otherwise. For example, if in the due exercise of its fiduciary obligations, the Board were to determine that
a takeover proposal is not in the best interests of the Company’s stockholders, the Board could cause shares of Preferred Stock
to be issued without stockholder approval in one or more private offerings or other transactions that might dilute the voting or other
rights of the proposed acquirer or insurgent stockholder or stockholder group. In this regard, the Company’s Certificate of Incorporation
grants the Board broad power to establish the rights and preferences of authorized and unissued shares of Preferred Stock. The issuance
of shares of Preferred Stock could decrease the amount of earnings and assets available for distribution to holders of shares of Common
Stock. The issuance may also adversely affect the rights and powers, including voting rights, of these holders and may have the effect
of delaying, deterring or preventing a change in control of the Company.

 

Transfer
Agent

 

Our
transfer agent is Equity Stock Transfer LLC.

 

Listing

 

Our
Common Stock is quoted on the OTCQB under the symbol “OPXS”.

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