Document:

2015 EMPLOYEES/CONSULTANTS STOCK COMPENSATION PLAN

OF

SECTION 1 - ESTABLISHMENT AND PURPOSE

The Plan was established on May 1st, 2015, effective May 15th, 2015, to offer directors, officers and selected key employees, advisors and consultants an opportunity to acquire a proprietary interest in the success of the Company to receive compensation, or to increase such interest, by purchasing Shares of the Company's common stock.  The Plan provides both for the direct award or sale of Shares and for the grant of Options to purchase Shares. Options granted under the Plan may include non-statutory options, as well as ISOs intended to qualify under section 422 of the Code.

The Plan is intended to comply in all respects with Rule 16.3 (or its successor) under the Exchange Act and shall be construed accordingly.

SECTION 2 - DEFINITIONS

(A)  "BOARD OF DIRECTORS" shall mean the Board of Directors of the Company, as constituted from time to time.

(B)  "CODE" shall mean the Internal Revenue Code of 1986, as amended.

(C)  "COMMITTEE" shall mean a committee of the Board of Directors, as described in Section 3(a).

(D)  "COMPANY" shall mean APPYEA, INC., a South Dakota corporation.

(E)  "EMPLOYEE" shall mean (i) any individual who is a common-law employee of the Company or of a Subsidiary, (ii) an Outside Director, (iii) an independent contractor who performs services for the Company or a Subsidiary and who is not a member of the Board of Directors, including consultants and advisors that provide professional, technical, financial, legal, accounting, capital markets related and other services.  Service as an Outside Director or independent contractor shall be considered employment for all purposes of the Plan, except as provided in Subsections (a) and (b) of Section 4,

(F)  "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.

(G)  "EXERCISE PRICE" shall mean the amount for which one share may be purchased upon exercise of an Option, as specified by the Committee in the applicable Stock Option Agreement.

(H)  "FAIR MARKET VALUE" shall mean the market price of Stock, determined by the Committee as follows:

(i)  If Stock was traded on a stock exchange on the date in question, then the Fair Market Value shall be equal to the closing price reported for such date by the applicable composite-transactions report;

(ii)  If stock was traded over-the-counter on the date in question and was traded on the Nasdaq system or the Nasdaq National Market, then the Fair Market Value shall be equal to the last transaction price quoted for such date by the Nasdaq system or the Nasdaq National Market;

(iii)  If Stock was traded over-the-counter with sufficient liquidly on the date in question but was not traded on the Nasdaq system or the Nasdaq National Market, then the Fair Market Value shall be equal to the mean between the last reported representative to the average of the three highest bid prices quoted for such date by the principal automated inter-dealer quotation system on which Stock is quoted or, if the Stock is not quoted on any such system, by the "Pink Sheets" published by the National Quotation Bureau, Inc.; and

(iv)  If none of the foregoing provisions is applicable, then the Fair Market Value shall be determined by the Committee in good faith on such basis as it deems appropriate.

In all cases, the determination of Fair Market Value by the Committee shall be conclusive and binding on all persons.

(I)  "ISO" shall mean an employee incentive stock option described in section 422(b) of the Code.

(J)  "NON-STATUTORY OPTION" shall mean an employee stock option not described in sections 422(b) or 423(b) of the Code.

(K)  "OFFEREE" shall mean an individual to whom the Committee has offered the right to acquire Shares under the Plan (other than upon exercise of an Option)

(L)  "OPTION" shall mean an ISO or Non-statutory Option granted under the Plan and entitling the holder to purchase Shares.

(M)  "OPTIONEE" shall mean an individual who holds an Option.

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                (N)  "OUTSIDE DIRECTOR" shall mean a member of the Board of Directors who is not a common--law employee of the Company or of a Subsidiary.

(O)  COMMITTEE PROCEDURES.  The Committee shall designate one of its members as chairman. The Committee may hold meetings at such times and places as it shall determine. The acts of a majority of the Committee members present at meetings at which a quorum exists, or acts reduced to or approved in writing by all Committee members, shall be valid acts of the Committee.

(P)  COMMITTEE RESPONSIBILITIES. Subject to the provisions of the Plan, the Committee shall have the authority and discretion to take the following actions:

(i)  To interpret the Plan and to apply its provisions;

(ii)  To adopt, amend or rescind rules, procedures and forms relating to the Plan;

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

(iv)  To determine when Shares are to be awarded or offered for sale and when Options are to be granted under the Plan;

(v)  To select the Offerees and Optionees;

(vi)  To determine the number of Shares to be offered to each Offeree or to be made subject to each Option;

(vii)  To prescribe the terms and conditions of each award or sale of Shares, including (without limitation) the Purchase Price, and to specify the provisions of the Stock Purchase Agreement relating to such award or sale;

(viii)  To prescribe the terms and conditions of each Option, including (without limitation) the Exercise Price, to determine whether such Option is to be classified as an ISO or as a Non-statutory Option, and to specify the provisions of the Stock Option Agreement relating to such Option;

(ix)  To amend any outstanding Stock Purchase Agreement or Stock Option Agreement, subject to applicable legal restrictions and, to the extent such amendments adverse to the Offeree's or Optionee's interest, to the consent of the Offeree or Optionee who entered into such agreement;

(x)  To prescribe the consideration for the grant of each Option or other right under the Plan and to determine the sufficiency of such consideration; and

(xi)  To take any other actions deemed necessary or advisable for the administration of the Plan.

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All decisions, interpretations and other actions of the Committee shall be final and binding on all Offerees, all Optionees, and all persons deriving their rights from an Offeree or Optionee. No member of the Committee shall be liable for any action that he or she has taken or has failed to take in good faith with respect to the Plan, any Option, or any right to acquire Shares under the Plan.

SECTION 3 - INTENTIONALLY OMITTED

SECTION 4 - ELIGIBILITY

(A)  GENERAL RULES. Only Employees (including, without limitation, independent contractors, consultants and legal counsel who are not members of the Board of Directors) shall be eligible for designation as Optionees or Offerees by the Committee. In addition, only Employees who are common-law employees of the Company or a Subsidiary shall be eligible for the grant of ISOs. Employees who are Outside Directors shall only be eligible for the grant of the Non-statutory Options described in Subsection (b) below.

(B)  OUTSIDE DIRECTORS. Any other provision of the Plan notwithstanding, the participation of Outside Directors in the Plan shall be subject to the following restrictions:

(i)  outside Directors shall receive no grants other than the Non-statutory options described in this Subsection (b)

(ii)  All Non-statutory Options granted to an Outside Director under this Subsection (b) shall also become exercisable in full in the event of the termination of such Outside Director's service because of death, Total and Permanent Disability or voluntary retirement at or after age 65.

(iii)  The Exercise Price under all Non-statutory Options granted to an Outside Director under this Subsection (b) shall be equal to 100 percent of the Fair Market Value of a Share on the date of grant, payable in one of the forms described in Subsection (a), (b), (c) or (d) of Section 6.

(iv)  Non-statutory options granted to an outside Director under this Subsection (b) shall terminate on the earliest of (A) the 10th anniversary of the date of grant, (B) the date three months after the termination of such Outside Director's service for any reason other than death or Total and Permanent Disability or (C) the date 12 months after the termination of such Outside Director's service because of death or Total and Permanent Disability.

The committee may provide that the Non-statutory Options that otherwise would be granted to an Outside Director under this Subsection (b) shall instead be granted to an affiliate of such Outside Director. Such affiliate shall then be deemed to be an Outside Director for purposes of the Plan, provided that the service—related vesting and termination provisions pertaining to the Non-statutory Options shall be applied with regard to the service of the Outside Director.

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(C)  ATTRIBUTION RULES. For purposes of Subsection (c) above, in determining stock ownership, an Employee shall be deemed to own the stock owned, directly or indirectly, by or for such Employee's brothers, sisters, spouse, ancestors and lineal descendants. Stock owned, directly or indirectly, by or for a corporation, partnership, estate or trust shall be deemed to be owned proportionately by or for its stockholders, partners or beneficiaries. Stock with respect to which such Employee holds an option shall not be counted.

(D)  OUTSTANDING STOCK. For purposes of Subsection (c) above, "outstanding stock" shall include all stock actually issued and outstanding immediately after the grant. "Outstanding stock" shall not include shares authorized for issuance under outstanding options held by the Employee or by any other person.

SECTION 5 - STOCK SUBJECT TO PLAN

(A)  BASIC LIMITATION. Shares offered under the Plan shall be authorized but unissued Shares or treasury Shares.  The aggregate number of Shares which may be issued under the Plan (upon exercise of Options or other rights to acquire Shares) shall be 3,700,000 Shares, subject to adjustment pursuant to Section 9. The number of Shares which are subject to Options or other rights outstanding at any time under the Plan shall not exceed the number of Shares which then remain available for issuance under the Plan. The Company, during the term of the Plan, shall at all times reserve and keep available sufficient Shares to satisfy the requirements of the Plan.

(B)  ADDITIONAL SHARES. In the event that any outstanding Option or other right for any reason expires or is cancelled or otherwise terminated, the Shares allocable to the unexercised portion of such Option or other right shall again be available for the purposes of the Plan. In the event that Shares issued under the Plan are reacquired by the Company pursuant to a forfeiture provision, a right of repurchase or a right of first refusal. Such Shares shall again be available for the purposes of the Plan.

SECTION 6 - TERMS AND CONDITIONS OF AWARDS OR SALES

(A)  AGREEMENT. Each award or sale of Shares under the Plan (other than upon exercise of an Option) shall be evidenced by an Agreement between the offeree and the Company. Such award or sale shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan and which the Committee deems appropriate for inclusion in an Agreement.  The provisions of the various Agreements entered into under the Plan need not be identical.

(B)  DURATION OF OFFERS AND NONTRANSFERABILITY OF RIGHTS.  Any right to acquire Shares under the Plan (other than an Option) shall automatically expire if not exercised by the Offeree within 30 days after the grant of such right was communicated to the Offeree by the Committee. Such right shall not be transferable and shall be exercisable only by the Offeree to whom such right was granted.

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                (C)  PURCHASE PRICE. The Purchase Price of Shares to be offered under the Plan shall not be less than 100 percent of the Fair Market Value of such Shares. The Purchase Price shall be payable in a form described in Section 6.

(D)  WITHHOLDING TAXES.  As a condition to the award, sale or vesting of Shares, the offeree shall make such arrangements as the Committee may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that arise in connection with such Shares. The Committee may permit the Offeree to satisfy all or part of his or her tax obligations related to such Shares by having the Company withhold a portion of any Shares that otherwise would be issued to him or her or by surrendering any Shares that previously were acquired by him or her.  The Shares withheld or surrendered shall be valued at their Fair Market Value on the date when taxes otherwise would be withheld in cash. The payment of taxes by assigning Shares to the Company, if permitted by the committee, shall be subject to such restrictions as the Committee may impose, including any restrictions required by rules of the Securities and Exchange Commission.

(E)  RESTRICTIONS ON TRANSFER OF SHARES.  Any Shares awarded or sold under the Plan shall be subject to such special forfeiture conditions, rights of repurchase, rights of first refusal and other transfer restrictions as the Committee may determine. Such restrictions shall be set forth in the applicable Stock Purchase Agreement and shall apply in addition to any general restrictions that may apply to all holders of Shares.

SECTION 7 - TERMS AND CONDITIONS OF OPTIONS

(A)  STOCK OPTION AGREEMENT.  Each grant of an Option under the Plan shall be evidenced by a Stock Option Agreement between the Optionee and the Company. Such Option shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan and which the Committee deems appropriate for inclusion in a Stock Option Agreement. The provisions of the various Stock Option Agreements entered into under the Plan need not be identical.

(B)  NUMBER OF SHARES.  Each Stock Option Agreement shall specify the number of Shares that are subject to the Option and shall provide for the adjustment of such number in accordance with Section 9. The Stock Option Agreement shall also specify whether the Option is an ISO or a Non-statutory Option.

(C)  EXERCISE PRICE. Each Stock Option Agreement shall specify the Exercise Price. The Exercise Price of an ISO shall not be less than 100 percent of the Fair Market Value of a Share on the date of grant, except as otherwise provided in Section 4(c). The Exercise Price of a Non-statutory Option shall not be less than 100 percent of the Fair Market Value of a Share on the date of grant. The Exercise Price shall be payable in a form described in Section 8.

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                (D)  WITHHOLDING TAXES. As a condition to the exercise of an Option, the Optionee shall make such arrangements as the Committee may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that arise in connection with such exercise. The Optionee shall also make such arrangements as the Committee may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with the disposition of Shares acquired by exercising an Option. The Committee may permit the Optionee to satisfy all or part of his or her tax obligations related to the Option by having the Company withhold a portion of any Shares that otherwise would be issued to him or her or by surrendering any Shares that previously were acquired by him or her. Such Shares shall be valued at their Fair Market Value on the date when taxes otherwise would be withheld in cash. The payment of taxes by assigning Shares to the Company, if permitted by the Committee, shall be subject to such restrictions as the Committee may impose, including any restrictions required by rules of the Securities and Exchange Commission.

(E)  EXERCISABILITY AND TERM.  Each Stock Option Agreement shall specify the date when all or any installment of the Option is to become exercisable. The vesting of any Option shall be determined by the Committee at its sole discretion. A Stock Option Agreement may provide for accelerated exercisability in the event of the Optionee's death, Total and Permanent Disability or retirement or other events. The Stock Option Agreement shall also specify the term of the Option. The term shall not exceed 10 years from the date of grant, except as otherwise provided in Section 4(c).  Subject to the preceding sentence, the Committee at its sole discretion shall determine when an Option is to expire.

(F)  NONTRANSFERABILITY.  During an Optionee's lifetime, such Optionee's Option(s) shall be exercisable only by him or her and shall not be transferable, unless permitted by the Stock Option Agreement. In the event of an Optionee's death, such Optionee's Option(s) shall not be transferable other than by will, by a beneficiary designation executed by the Optionee and delivered to the Company, or by the laws of descent and distribution.

(G)  TERMINATION OF SERVICE (EXCEPT BY DEATH).   If an Optionee's Service terminates for any reason other than the Optionee's death, then such Optionee's Option(s) shall expire on the earliest of the following occasions:

(i)  The expiration date determined pursuant to Subsection (e) above;

(ii) The date 90 days after the termination of the Optionees Service for any reason other than Total and Permanent Disability; or

(iii)  The date six months after the termination of the Optionee s Service by reason of Total and Permanent Disability.

The Optionee may exercise all or part of his or her Option(s) at any time before the expiration of such Option(s) under the preceding sentence, but only to the extent that such Option(s) had become exercisable before the Optionee's Service terminated or became exercisable as a result of the termination. The balance of such Option(s) shall lapse when the Optionee's Service terminates. In the event that the Optionee dies after the termination of the Optionee's Service but before the expiration of the Optionee's Option(s), all or part of such Option(s) may be exercised (prior to expiration) by his or her designated beneficiary (if applicable), by the executors or administrators of the Optionee's estate or by any person who has acquired such Option(s) directly from the Optionee by bequest or inheritance, but only to the extent that such Option(s) had become exercisable before the Optionee's Service terminated or became exercisable as a result of the termination.

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                (H)  LEAVES OF ABSENCE.  For purposes of Subsection (g) above, Service shall be deemed to continue while the Optionee is on sick leave or other bona fide leave of absence (as determined by the Committee) . The foregoing notwithstanding, in the case of an ISO granted under the Plan. Service shall not be deemed to continue beyond the first 90 days of such leave, unless the Optionee's reemployment rights are guaranteed by statute or by contract.

(I)  DEATH OF OPTIONEE.  If an Optionee dies while he or she is in Service, then such Optionee's Option(s) shall expire on the earlier of the following dates:

(i)  The expiration date determined pursuant to Subsection (e) above; or

(ii)  The date six months after the Optionee's death.

All or part of the Optionee's Option(s) may be exercised at any time before the expiration of such Option(s) under the preceding sentence by his or her designated beneficiary (if applicable), by the executors or administrators of the optionee's estate or by any person who has acquired such Option(s) directly from the Optionee by bequest or inheritance, but only to the extent that such Option(s) had become exercisable before the Optionee's death or became exercisable as a result of the Optionee's death. The balance of such Option(s) shall lapse when the Optionee dies.

(J)  NO RIGHTS AS A STOCKHOLDER.  An Optionee, or a transferee of an Optionee, shall have no rights as a stockholder with respect to any Shares covered by his or her Option until the date of the issuance of a stock certificate for such Shares. No adjustments shall be made, except as provided in Section 9.

(K)  MODIFICATION. EXTENSION AND RENEWAL OF OPTIONS.  Within the limitations of the Plan, the Committee may modify, extend or renew outstanding Options or may accept the cancellation of outstanding Options (to the extent not previously exercised) in return for the grant of new Options at the same or a different price. The foregoing notwithstanding, no modification of an option shall, without the consent of the Optionee's, impair such Optionee s rights or increase his or her obligations under such Option.

(L)  RESTRICTIONS ON TRANSFER OF SHARES.  Any Shares issued upon exercise of an Option shall be subject to such special forfeiture conditions, rights of repurchase, rights of first refusal and other transfer restrictions as the Committee may determine. Such restrictions shall be set forth in the applicable Stock Option Agreement and shall apply in addition to any general restrictions that may apply to all holders of Shares.

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SECTION 8 - PAYMENT FOR SHARES

(A)  GENERAL RULE.  The entire Purchase Price or Exercise Price of Shares issued under the Plan shall be payable in lawful money of the United States of America at the time when such Shares are purchased, except as follows:

(i)  In the case of Shares sold under the terms of a Stock Purchase Agreement subject to the Plan, payment shall be made only pursuant to the express provisions of such Stock Purchase Agreement. However, the Committee (at its sole discretion) may specify in the Stock Purchase Agreement that payment may be made in one or all of the forms described in Subsections (e), (f) and (g) below.

(ii)  In the case of an ISO granted under the Plan, payment shall be made only pursuant to the express provisions of the applicable Stock Option Agreement. However, the Committee (at its sole discretion) may specify in the Stock Option Agreement that payment may be made pursuant to Subsections (b), (c), (d), (1) or (g) below.

(iii)  In the case of a Non-statutory Option granted under the Plan, the committee (at its sole discretion) may accept payment pursuant to Subsections (b), (c), (d), (f) or (g) below.

(B)  SURRENDER OF STOCK. To the extent that this Subsection (b) is applicable, payment may be made all or in part with Shares which have already been owned by the Optionee or his or her representative for more than 12 months and which are surrendered to the Company in good form for transfer. Such Shares shall be valued at their Fair Market Value on the date when the new Shares are purchased under the Plan.

(C)  EXERCISE/SALE. TO THE EXTENT THAT THIS SUBSECTION (C) is applicable, payment may be made by the delivery (on a form prescribed by the Company) of an irrevocable direction to a securities broker approved by the Company to sell Shares and to deliver all or part of the sales proceeds to the Company in payment of all or part of the Exercise Price and any withholding taxes.

(D)  EXERCISE/PLEDGE. To the extent that this Subsection (d) is applicable, payment may be made by the delivery (on a form prescribed by the Company) of an irrevocable direction to pledge Shares to a securities broker or lender approved by the Company, as security for a loan, and to deliver all or part of the loan proceeds to the Company in payment of all or part of the Exercise Price and any withholding taxes.

(E)  SERVICES RENDERED.  To the extent that this Subsection (e) is applicable, Shares may be awarded under the Plan in consideration of services rendered to the Company or a Subsidiary prior to the award. If Shares are awarded without the payment of a Purchase Price in cash, the Committee shall make a determination (at the time of the award) of the value of the services rendered by the Offeree and the sufficiency of the consideration to meet the requirements of Section 6(c).

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                (F)  PROMISSORY NOTE. To the extent that this Subsection (f) is applicable, a portion of the Purchase Price or Exercise Price, as the case may be, of Shares issued under the Plan maybe payable by a full recourse promissory note, provided that (i) the par value of such Shares must be paid in lawful money of the United States of America at the time when such Shares are purchased, (ii) the Shares are security for payment of the principal amount of the promissory note and interest thereon and (iii) the interest rate payable under the terms of the promissory note shall be no less than the minimum rate (if any) required to avoid the imputation of additional interest under the Code. Subject to the foregoing, the Committee (at its sole discretion) shall specify the term, interest rate, amortization requirements (if any) and other provisions of such note.

(G)  OTHER FORMS OF PAYMENT. To the extent that this Subsection (g) is applicable, payment may be made in any other form approved by the Committee, consistent with applicable laws, regulations and rules.

SECTION 9 - ADJUSTMENT OF SHARES

(A)  GENERAL. In the event of a subdivision of the outstanding Stock, a declaration of a dividend payable in Shares, a declaration of a dividend payable in a form other than Shares in an amount that has a material effect on the value of Shares, a combination or consolidation of the outstanding Stock (by reclassification or otherwise) into a lesser number of Shares, a recapitalization, a spinoff or a similar occurrence, the Committee shall make appropriate adjustments in one or more of (i) the number of Shares available for future grants under Section 5, (ii) the number of Non-statutory Options to be granted to Outside Directors under Section 4(b), (iii) the number of Shares covered by each outstanding Option or (iv) the Exercise Price under each outstanding Option.

(B)  REORGANIZATIONS. In the event that the company is a party to a merger or other reorganization, outstanding Options shall be subject to the agreement of merger or reorganization. Such agreement may provide, without limitation, for the assumption of outstanding Options by the surviving corporation or its parent, for their continuation by the Company (if the Company is a surviving corporation) , for payment of a cash settlement equal to the difference between the amount to be paid for one Share under such agreement and the Exercise Price, or for the acceleration of their exercisability followed by the cancellation of Options not exercised, in all cases without the Optionees' consent. Any cancellation shall not occur until after such acceleration is effective and Optionees have been notified of such acceleration. In the case of Options that have been outstanding for less than 12 months, a cancellation need not be preceded by acceleration.

(C)  RESERVATION OF RIGHTS. Except as provided in this Section 9, an Optionee or Offeree shall have no rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any dividend or any other increase or decrease in the number of shares of stock of any class. Any issue by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to; the number or Exercise Price of Shares subject to an Option. The grant of an Option pursuant to the Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, to merge or consolidate or to dissolve, liquidate, sell or transfer all or any part of its business or assets.

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SECTION 10 - SECURITIES LAWS

Shares shall not be issued under the Plan unless the issuance and delivery of such Shares complies with (or is exempt from) all applicable requirements of law, including (without limitation) the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder, state securities laws and regulations, and the regulations of any stock exchange on which the Company's securities may then be listed.

SECTION 11 - NO RETENTION RIGHTS

Neither the Plan nor any Option shall be deemed to give any individual a right to remain an employee, consultant or director of the Company or a Subsidiary. The Company and its Subsidiaries reserve the right to terminate the service of any employee, consultant or director. at any time, with or without cause, subject to applicable laws, the Company's certificate of incorporation and by-laws and a written employment agreement (if any).

SECTION 12 - DURATION AND AMENDMENTS

(A)  TERM OF THE PLAN.  The Plan, as set forth herein, shall become effective as of May 15th, 2015. The Plan shall terminate automatically 15 years after its initial adoption by the Board of Directors on May 15th, 2030, and may be terminated on any earlier date pursuant to Subsection (b) below.

(B)  RIGHT TO AMEND OR TERMINATE THE PLAN. The Board of Directors may, subject to applicable law, amend, suspend or terminate the Plan at any time and for any reason. An amendment to the Plan shall require stockholder approval only to the extent required by applicable law.

(C)  EFFECT OF AMENDMENT OR TERMINATION. No Shares shall be issued or sold under the Plan after the termination thereof, except upon exercise of an Option granted prior to such termination. The termination of the Plan, or any amendment thereto shall not affect any Share previously issued or any Option previously granted under the Plan.

 

SECTION 13 - EXECUTION

To record the adoption of the Plan by the Board of Directors on May 1st, 2015, the Company has caused its authorized officer to execute the same.

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The APPYEA Inc a South Dakota corporation

By:

     Jackie D. Williams Jr., President/CEO

12Exhibit 10.02

Exhibit 10.02

STOCK EQUIVALENT PROGRAM 
FOR NONEMPLOYEE DIRECTORS OF
XCEL ENERGY INC.

(As First Effective May 20, 2015)
ARTICLE I

PURPOSE, DEFINITIONS AND GENERAL PROVISIONS

1.1    Purpose.  The purposes of this Program are: (a) to enable a portion of the compensation of each Nonemployee Director of Xcel Energy Inc. to be tied to the performance of the common stock of the Company; and (b) to permit each such Nonemployee Director to defer receipt of all or a portion of his/her retainer, board or committee meeting fees.

The Company intends the Program to be compliant with Section 409A of the Internal Revenue Code and the regulations and other guidance issued thereunder. This Program is considered a “subplan” of the Xcel Energy Inc. 2015 Omnibus Incentive Plan (the “Plan”) as such term is used in the Plan, and a successor plan to the Stock Equivalent Plan for Non-Employee Directors of Xcel Energy Inc. (the “Predecessor Plan”).  The terms and conditions of the Program shall be considered part of an Award Agreement under the Plan with respect to any Program Award to any Nonemployee Director.  Except as otherwise provided, any capitalized term used herein shall have the same meaning as given the term by the Plan.
1.2    Definitions.

		
	(a)
	"Award" for purposes of the Program shall mean a Deferral Award or a Discretionary Award.  

		
	(b)
	"Award Date" shall mean with respect to a Discretionary Award, the Grant Date of such an Award as specified in or pursuant to an action by the Board, and shall mean with respect to a Deferral Award the date the Compensation subject to the Deferral Award would otherwise have been paid to the Nonemployee Director as specified in or pursuant to an action by the Board.

		
	(c)
	"Beneficiary" shall mean the last person or persons (including, without limitation, the trustees of any testamentary or inter vivos trust) designated in writing by a Participant, on a form approved by and filed with the Company, to receive payments under the Plan after the death of such Participant, or, in the absence of any such designation or in the event that such designated persons or person shall predecease such Participant, or shall not be in existence or shall otherwise be unable to receive such payments, the person or persons designated under such Participant's last will and testament or, in the absence of such designation, to the Participant's estate.  Any Beneficiary designation may be changed from time to time by like notice similarly delivered.

		
	(d)
	"Compensation" shall mean cash payments which a Nonemployee Director receives or is entitled to receive from the Company for services as a member of 

its Board.  Such payments may include directors' retainers, including annual retainers and retainers for committee, chair or lead director service, board meeting fees and committee meeting fees, but shall exclude direct reimbursement of expenses.
		
	(e)
	"Deferral Award" shall mean an Award of Stock Equivalents made pursuant to a deferral election described in Section 1.4 hereof.

		
	(f)
	"Discretionary Award" shall mean an Award of Stock Equivalents or cash made at the sole discretion of the Board pursuant to Section 1.3 hereof.

		
	(g)
	“Effective Date” shall mean the date this Program becomes effective, as provided in Section 3.9.

		
	(h)
	"Participant" shall mean any Nonemployee Director who receives an Award.

		
	(i)
	“Plan” shall mean the Xcel Energy Inc. 2015 Omnibus Incentive Plan, as from time to time amended and in effect.

		
	(j)
	"Program" shall mean this Stock Equivalent Program for Non-Employee Directors of the Company, as from time to time amended and in effect.

		
	(k)
	"Stock Account" shall mean the bookkeeping account to which Awards are credited in the name of a Participant as described in Section 2.2 of this Program.

		
	(l)
	"Stock Equivalents" shall mean the units, representing a like number of Shares, that are credited to a Nonemployee Director's Stock Account under Article II of this Plan.

		
	(m)
	"Xcel Energy Stock" shall mean the common stock of the Company, par value $2.50 per share.  Each share of Xcel Energy Stock is referred to as a “Share.”

1.3    Discretionary Awards.  Subject to Section 16.3 of the Plan, the Board may make Discretionary Awards to Participants from time to time in such amount and number as the Board shall determine in its sole discretion.  Each Discretionary Award shall contain such terms, restrictions and conditions as the Board may determine that are not inconsistent with this Program or the Plan.  Discretionary Awards shall be denominated in Stock Equivalents or as a dollar amount (which shall be converted into Stock Equivalents as provided in Section 2.2), as determined in the sole discretion of the Board.  

1.4    Deferral Awards.  In accordance with this Section, a Nonemployee Director may elect to receive Deferral Awards in lieu of all or a portion of his/her Compensation by filing with the Secretary of the Company an election in writing on a form approved by the Company.  Deferral Awards shall be made in a dollar amount equal to the amount of Compensation the Nonemployee Director has elected to defer and shall be converted into Stock Equivalents and credited to a Participant's Stock Account as provided in Section 2.2.  A deferral election with respect to Compensation for a calendar year must be made prior to the beginning of that calendar year.  In the case of an individual who becomes a Nonemployee Director after the first 

day of a calendar year, a deferral election must be made within 30 days of the date such individual becomes a Nonemployee Director, and shall be effective only as to Compensation for services performed after the date the election is made.  A deferral election shall continue in effect until the Nonemployee Director's “separation from service” (as the term is defined for purposes of Section 409A of the Code) as a member of the Board (a “Termination of Service”) or, if the Nonemployee Director provides the Secretary of the Company with earlier written notice to discontinue or change the deferral election, the end of the calendar year in which such written notice is received by the Secretary.  Notwithstanding the foregoing, the deferral election (including any default election) made by a Nonemployee Director under the Predecessor Plan with respect to 2015 Compensation shall be applied for purposes of this Program to all 2015 Compensation payable on or after the Effective Date.  No new deferral elections may be made for 2015 Compensation for a Nonemployee Director in place as of the Effective Date.

ARTICLE II

TREATMENT OF AWARDS
2.1    Stock Accounts.  The Company shall establish on its books a Stock Account in the name of each Participant to reflect the Company's liability to each Participant who has received an Award.  To this Stock Account shall be credited Awards plus other items as described hereafter.  A Participant's Stock Account may be divided into two or more subaccounts as the Board determines necessary or desirable for the administration of the Program.  Payments to a Participant or Beneficiary following Termination of Service shall be debited to the Stock Account.  In addition, debits and credits to the Stock Account shall be made in the manner provided hereafter.  Despite the maintenance of such Stock Account for each Participant, the Company's obligation to make distributions under the Program shall be made from the Company's general assets and property.  The Company may, in its sole discretion, establish a separate fund or account to make payment to a Participant or Beneficiary hereunder.  Whether the Company, in its sole discretion, does establish such a fund or account, no Participant or Beneficiary or any person shall have, under any circumstances, any interest whatever in any particular property or assets of the Company by virtue of this Program or of the Plan.
2.2    Crediting of Awards.  An Award in the form of Stock Equivalents shall be credited to a Participant's Stock Account as of the applicable Award Date.  An Award in dollars shall be credited to a Participant's Stock Account as of the applicable Award Date by converting the dollar amount of the Award into a number of Stock Equivalents equal to the number of Shares, calculated to three decimal places, that could be purchased on the Award Date with the dollar amount of such Award at Fair Market Value. 
2.3    Crediting of Dividend Equivalents/Capitalization Adjustments.
(a)    On each date on which a dividend in cash or property (other than a stock dividend) is distributed by the Company on issued and outstanding Shares, the Stock Account of a Participant shall be credited, subject to Section 2.1(b), with additional Stock Equivalents as follows:  (i) the dollar amount of the fair market value of the cash or property so distributed per issued and outstanding Share shall be multiplied by the number of Stock Equivalents (including fractions) in the Participant's Stock Account on the record date for such distribution; (ii) this 

dollar amount shall then be converted into Stock Equivalents equal to the number of Shares, calculated to three decimal places, that could be purchased on the payment date for such distribution by dividing such dollar amount by a price per share equal to the Fair Market Value on such payment date.  
(b)    If an equity restructuring (within the meaning of FASB Topic 718) affecting the Shares such as stock split or stock dividend occurs, the Board shall, in accordance with Section 4.4 of the Plan, appropriately adjust the number of Stock Equivalents in each Participant’s Stock Account to prevent dilution or enlargement of Participants’ rights under the Program.  The Board may make similar adjustments in connection with other changes in the Company’s corporate capitalization as provided in Section 4.4 of the Plan.

2.4    Change in Ownership.  If the Company shall be a party or subject to any consolidation, merger, share exchange or other transaction which, in any case, constitutes either a “change in the ownership” of the Company or a “change in the ownership of a substantial portion of the assets” of the Company within the meaning of Section 409A of the Code (a “Change in Ownership”), then in connection with such transaction either (i) the acquiring, surviving or successor corporation (or its direct or indirect parent corporation) shall continue the Program in accordance with Section 22.21 of the Plan and the Stock Equivalents in each Participant's Stock Account on the day immediately preceding the effective date of such transaction shall be converted into an appropriate number of stock equivalents of such other entity, or (ii) the Board shall terminate the Program and the entire remaining balance in each Participant's Stock Account shall be paid in a single distribution to the Participant in Shares, cash or a combination of both within the time periods permitted by and otherwise in accordance with the requirements of Section 409A of the Code.  For purposes of any cash payment made pursuant to this Section 2.4, the value of a Stock Equivalent shall be computed as the greater of (a) the Fair Market Value on or nearest the date on which the Change in Ownership is deemed to occur, or (b) the highest per Share actually paid in connection with the Change in Control. 
2.5    Time of Payment of Awards.
(a)    Except as provided in Section 2.7, Awards shall not be payable to a Participant prior to the Participant's Termination of Service.

Upon a Termination of Service, except as provided in subsection (c) below, the balance of a Participant's Stock Account shall be paid in the manner selected by the Participant, which may either be in the form of a lump sum or in substantially equal annual installments payable over a period that may range between 2 and 10 years.  Such lump sum payment shall be made, or such installment payments shall commence, between January 1st and March 31st of the year following Termination of Service, with subsequent installment payments made during the same time period each year.  The number of Shares and cash in lieu of any fractional Stock Equivalent to be distributed shall be calculated as set forth in Section 2.6.  A Participant may only make one distribution election, and once made, such election shall be irrevocable.  Any distribution election must be made at the earlier of (i) the time the Participant makes his or her initial deferral election under section 1.4, or (ii) prior to the beginning of the calendar year for which the Participant first receives a Discretionary Award.  The distribution election must be made in writing on a form approved by the Company.  Notwithstanding the foregoing, the 

distribution election (including any default election) made by a Nonemployee Director under the Predecessor Plan with respect to 2015 Compensation and Discretionary Awards shall be applied for purposes of this Program to all Compensation payable and Discretionary Awards received on or after the Effective Date.  No new distribution elections may be made for 2015 Compensation or Discretionary Awards for a Nonemployee Director in place as of the Effective Date.  

(b)    Notwithstanding any election made by a Participant, in the event of a Participant's death prior to payment in full of a Participant's Stock Account, the entire remaining balance in the Participant's Account shall be paid in a single distribution to the Participant's Beneficiary within 90 days after the Participant’s death (and in no event shall the Beneficiary directly or indirectly be permitted to designate the year of payment).
2.6    Form of Payment.  Except as otherwise provided in the Program, Awards shall be payable to a Participant only as a distribution of whole Shares equal to the number of whole Stock Equivalents credited to the Participant's Stock Account to be distributed, and cash for any fractional Stock Equivalent to be distributed.  In converting a fractional Stock Equivalent in a Participant's Stock Account into cash for payment purposes, such conversion shall be based on the Fair Market Value of a Share [on the distribution date].  
2.7    Acceleration of Payments.  In the event of a Participant's Disability, the Board shall accelerate the payment of such Participant's Stock Account balance in a lump sum to such Participant within 90 days following the Participant’s Disability. 
ARTICLE III

OTHER PROVISIONS

3.1    Amendment or Termination.  The Board may amend or terminate this Program at any time; provided, however, that no amendment or termination shall adversely affect any prior Awards or rights under this Program. Any termination of this Program shall comply in all respects to the requirements of Section 409A of the Code and the regulations issued thereunder to the extent applicable.
3.2    Expenses.  The expenses of administering the Program shall be borne by the Company, and shall not be charged against any Participant's Awards.
3.3    No Trust.  No action by the Company or the Board under this Program shall be construed as creating a trust, escrow or other secured or segregated fund or other fiduciary relationship of any kind in favor of any Participant, Beneficiary, or any other persons otherwise entitled to Awards.  The status of the Participant and Beneficiary with respect to any liabilities assumed by the Company hereunder shall be solely those of unsecured creditors of the Company.  Any asset acquired or held by the Company in connection with liabilities assumed by it hereunder, shall not be deemed to be held under any trust, escrow or other secured or segregated fund or other fiduciary relationship of any kind for the benefit of the Participant or Beneficiary or to be security for the performance of the obligations of the Company, but shall 

be, and remain, a general, unpledged, unrestricted asset of the Company at all times subject to the claims of general creditors of the Company.

3.4    No Impact on Directorship.  This Program shall not be construed to confer any right on the part of a Participant to be or remain a Director or to receive any, or any particular rate of, Compensation.

3.5    Administration.  The Board shall administer this Program in accordance with Article 3 of the Plan. 

3.6    Shareholder Rights.  A Participant shall not be deemed for any purpose to be or have rights as a shareholder of the Company as a result of the crediting of Stock Equivalents to the Participant’s Stock Account, until and unless the Participant becomes the record holder of the underlying Shares as provided in Section 20.3 of the Plan.

3.7    Securities Laws.  Distribution of Shares to a Participant upon distribution of his/her Stock Account shall be subject to compliance with applicable laws and stock exchange rules as provided in Article 22 of the Plan.

3.8    Relationship to the Plan.  This Program has been adopted pursuant to the Plan, and the Program and all Awards hereunder are subject to the terms of the Plan.  If there is any conflict or inconsistency between the terms of the Program and the terms of the Plan, the terms of the Plan shall control.

3.9    Effective Date.  This Program shall be effective as of May 20, 2015, subject to the Plan’s approval by the shareholders of the Company, at the 2015 annual meeting of shareholders of the Company.

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