Document:

EXHIBIT
10.20

 

 

Omega
Flex, Inc.

 

2006
Phantom Stock Plan

 

(as
amended and restated effective as of January 1, 2023)

 

451
Creamery Way, Exton, Pennsylvania, 19341

 

    	 

     

    

 

OMEGA
FLEX, INC.

2006
PHANTOM STOCK PLAN

(as
amended and restated effective as of January 1, 2023)

 

ARTICLE
1 - PURPOSE

 

The
Omega Flex, Inc. 2006 Phantom Stock Plan was initially adopted by Omega Flex, Inc. effective on April 1, 2006, was further amended effective
December 9, 2009 to add divided equivalents and is now further amended and restated, effective as of January 1, 2023, to revise the vesting
schedule for Phantom Stock units granted on or after the Effective Date. The purpose of the Omega Flex, Inc. 2006 Phantom Stock Plan,
as amended and restated effective as of January 1, 2023, (the “Plan”) is to retain the services of a select group of employees
as well as the services of certain directors of Omega Flex, Inc. and its subsidiaries to motivate them to contribute to the growth and
profits of the Company. The Plan is intended to comply with the provisions of Section 409A of the Internal Revenue Code of 1986, as amended,
and the Plan shall be interpreted in a manner consistent with such intent.

 

ARTICLE
2 - DEFINITIONS

 

As
used herein, the following terms shall have the meaning specified below unless the context clearly indicates to the contrary:

 

“Beneficiary”
shall mean any person or persons (including, without limitation, the trustees of any testamentary or inter vivos trust), as designated
from time to time in writing pursuant to Article 5, to whom any benefits may be payable upon the death of a Participant.

 

“Cause”
shall mean any of the following acts or omissions on the part of the Participant:

 

	 	(i)	dishonesty
    or fraud resulting in damage to the business of the Company;
	 	 	 
	 	(ii)	embezzlement
    or theft of assets of the Company;
	 	 	 
	 	(iii)	breach
    of the representations, warranties or obligations of Participant in any employment, or other agreement between the Company and any
    such Participant;
	 	 	 
	 	(iv)	conviction
    or plea of guilty or nolo contendere to a felony resulting in damage to the business of the Company; or
	 	 	 
	 	(v)	failure
    by any Participant to perform the Participant’s employment, other duties to the best of the Participant’s abilities,
    or willful failure to carry out the lawful and proper directions of the President or the Board of Directors of the Company.

 

“Committee”
shall mean the Compensation Committee of the Board of Directors of Omega Flex, Inc.

 

“Code”
shall mean the Internal Revenue Code of 1986, as amended.

 

    	1

     

    

 

“Company”
shall mean Omega Flex, Inc., including any Subsidiary thereof, and any successor or successors thereto.

 

“Disabled”
or “Disability” shall mean that a Participant has terminated Service with the Company and is entitled to disability benefits
under the Company’s group disability insurance plan (or would be so entitled if the Participant was a participant in such plan).

 

“Dividend
Equivalent Amount” means an amount equal to the value of any dividend (whether ordinary or extraordinary, and whether in cash,
securities or other property) declared on one share of Omega Common Stock. For purposes of the preceding sentence, the per share cash
value of any stock dividend declared on Omega Common Stock shall be the closing price of the Omega Common Stock on the dividend payment
date, or if the closing price is not available on that date, the latest date prior to the dividend payment date for which the closing
price is available.

 

“Dividend
Equivalent Account” means a separate account established on the books of the Company for each Participant with respect to each
grant of Phantom Stock hereunder. A Participant’s Dividend Equivalent Accounts shall be unfunded bookkeeping accounts and shall
not constitute or be treated as a trust fund of any kind. Amounts credited to a Participant’s Dividend Equivalent Accounts shall
not be adjusted for earnings or losses (except as otherwise determined by the Committee in its sole discretion).

 

“Effective
Date” shall mean January 1, 2023, which is the effective date of this amendment and restatement of the Plan.

 

“Grant
Date” shall mean the effective date on which the Committee grants Phantom Stock to a Participant.

 

“Maturity
Date” shall mean the date on which a Participant’s vested Phantom Stock units are deemed to mature, which shall be the date
set forth in the Plan Agreement; provided however that in no event shall the Maturity Date be a date prior to the date when all the Phantom
Stock units granted in the Plan Agreement are scheduled to become fully vested.

 

“Maturity
Price” shall mean the Value of a unit of Phantom Stock on the Maturity Date.

 

“Omega
Common Stock” shall mean the common stock of Omega Flex, Inc.

 

“Participant”
shall mean an officer, employee or director who has been selected by the Committee to participate in the Plan and who executes and returns
to the Committee the Plan Agreement. Any officer, employee or director of a Subsidiary shall also be eligible to participate in the Plan,
subject to the selection and approval by the management of Omega Flex, Inc. and the Committee.

 

“Phantom
Stock” shall mean units designated by the Company which represent a contractual right to payment of the Value of the shares of
Omega Common Stock. Phantom Stock units are not shares of Omega Common Stock or the assets of Omega Flex, Inc., nor does the Phantom
Stock provide any rights to obtain ownership of any shares of Omega Common Stock, or to exercise any rights incident to ownership of
Omega Common Stock.

 

“Plan”
shall mean Omega Flex, Inc. 2006 Phantom Stock Plan, as amended and restated effective as of January 1, 2023.

 

    	2

     

    

 

“Plan
Agreement” shall mean one or more written agreements, as may be amended from time to time, which is entered into by and between
the Company and a Participant. The terms of any Plan Agreement may not vary any of the terms set forth in the Plan

 

“Retirement”
shall mean the voluntary separation from Service, within the meaning of Code Section 409A, of a Participant who is an employee of the
Company for a reason other than Cause, death or Disability and after the Participant’s completion of 1 (one) year of continuous
Service and attainment of age 67.

 

“Service”
shall mean the performance of services for the Company as an employee, director, and/or consultant, as determined by the Committee in
its sole discretion. If a Participant transfers between the Company and another affiliated entity, then the Committee, in its sole discretion,
shall decide whether Service has been terminated; provided that no termination of Service will be deemed to have occurred unless it constitutes
a “separation from service” within the meaning of Code Section 409A and regulations thereunder.

 

“Subsidiary”
shall mean any corporation, company, partnership or other business organization in which Omega Flex, Inc. has a direct or indirect controlling
equity interest.

 

“Termination
Other than for Cause” shall mean a termination of the Participant’s Service for any reason other than Cause.

 

“Value”
of a unit of Phantom Stock for any given date shall be equal to the closing price on that date of one share of Omega Common Stock as
listed on a national exchange or quoted on a national automated quotation system, or if the closing price is not available on that date,
the latest date prior to that date for which the closing price is available. If Omega Common Stock is not listed on a national exchange
or national automated quotation system, then the “Value” of a unit of Phantom Stock shall be determined by the Committee
and the Participants shall not have any right to challenge the Committee’s determination.

 

ARTICLE
3 - ELIGIBILITY, GRANT AND VESTING

 

3.1
Eligibility/Grant. Participation in the Plan shall be limited to a select group of officers, employees, and directors of the Company.
The Company’s President may recommend to the Committee officers or employees of the Company, and the Compensation Committee may
recommend to the Board one or more directors of the Company, that may participate in the Plan. The grant of Phantom Stock to any recommended
individual employee will be at the sole and exclusive discretion of the Compensation Committee, and the grant of Phantom Stock to any
recommended director will be at the sole and exclusive discretion of the Board of Directors. The recommendation that all members of the
Board of Directors participate in the Plan will not be deemed to constitute a conflict of interest prohibiting any director to vote upon
such recommendation.

 

3.2
Phantom Stock Units. The Committee authorizes the issuance of 1,000,000 Phantom Stock units under this Plan, subject to adjustment
as provided in Section 6.7. Previously issued Phantom Stock units which are forfeited under the terms of this Plan shall be added back
to the number of authorized but unissued Phantom Stock units, and may be subsequently granted to a Participant under this Plan.

 

    	3

     

    

 

3.3
Plan Agreement. Each Participant who receives Phantom Stock shall receive a Plan Agreement. As a condition to the effectiveness
of the grant, the Participant shall acknowledge and agree to be bound by the terms, conditions, and restrictions of the Plan by signing
a copy of the Plan Agreement. The Participant shall be entitled to benefits, if any, in accordance with the Participant’s Plan
Agreement and this Plan. In the event of any conflict between the terms of this Plan and a Plan Agreement, the terms of this Plan shall
be controlling. The Plan Agreement will set forth the following terms of the grant:

 

	 	(a)	The
                                            number of Phantom Stock units;
	 	 	 
		(b)	the
                                            Grant Date;
	 	 	 
		(c)	the
                                            Maturity Date; and
	 	 	 
		(d)	the
                                            vesting schedule.

 

3.4
Vesting. The Participant shall have no rights to any payments with respect to the Participant’s Phantom Stock until the
units of the Phantom Stock have vested. Except as provided in Section 3.5, any grants of Phantom Stock shall be conditioned upon the
continuous Service of the Participant during the vesting period, and if the Participant’s Service is terminated during the vesting
period, the Participant’s unvested Phantom Stock units shall terminate and become forfeited on such date.

Each grant of Phantom Stock granted prior to the Effective Date shall vest according to the following schedule:

 

	Number
    of Years

    

    Following
    Grant Date
	Percentage
    of Phantom Stock

    

    to
    Vest

	1	33%
	2	and
    an additional 33%
	3	and
    an additional 34%

 

Each
grant of Phantom Stock granted on or after the Effective Date shall vest in full (“cliff vest”) on the third anniversary
of the Grant Date.

 

3.5
Acceleration of Vesting, The Participant’s Phantom Stock units shall be fully vested in the event of the Participant’s
termination of Service due to death or Disability, provided that the Participant’s Service with the Company was continuous for
one (1) year prior to such event. If the Participant’s Service with the Company was continuous for one (1) year prior to such Participant’s
Retirement, such Participant’s Phantom Stock units shall vest in accordance with the following schedule:

 

    	4

     

    

 

	Number
    of Completed Years that

    Retirement

    

    Follows
    Grant Date
	Percentage
    of Phantom Stock

    

    to
    Vest upon Retirement

	1	33%
	2	and
    an additional 33%
	3	and
    an additional 34%

 

The
Participant’s Phantom Stock units that vest in accordance with this Section 3.5 shall be paid as set forth in Section 4.1 below.

 

3.6
Rights as a Shareholder. With respect to any issued Phantom Stock units, a Participant shall have no rights as a shareholder of
Omega Flex, Inc. (whether in terms of voting at meetings of the shareholders, or sharing in the payment of any dividend or distribution
except as otherwise provided in Section 3.7 below), nor shall a Participant obtain any rights to acquire shares of Omega Common Stock
in the future. Except as provided in Sections 3.7 and 6.7, no rights shall accrue to a Participant and no adjustments shall be made to
the Participant’s outstanding Phantom Stock units on account of dividends (whether ordinary or extraordinary, and whether in cash,
securities or other property) or distributions or other rights declared on, or credited in, the Omega Common Stock.

 

3.7
Dividend Equivalents. If a dividend (whether ordinary or extraordinary, and whether in cash, securities or other property) is
declared on Omega Common Stock, the Participant’s Dividend Equivalent Account shall be credited, as of the applicable record date,
with an amount equal to the number of the Participant’s outstanding Phantom Stock units attributable to such Account multiplied
by the Dividend Equivalent Amount, except that no amount shall be credited if (a) the Maturity Date of the Phantom Stock units attributable
to such Account is earlier than the record date of the dividend, or (b) the Phantom Stock units attributable to such Account have been
forfeited.

 

Amounts
credited to the Participant’s Dividend Equivalent Account shall vest at the same time as the underlying Phantom Stock units vest.
If the Participant’s underlying Phantom Stock units terminate and are forfeited, amounts credited to the Participant’s Dividend
Equivalent Account that are attributable to such Phantom Stock units shall also be forfeited. Except as otherwise provided in Section
4.2, the Participant’s Dividend Equivalent Account, to the extent vested, shall be paid in cash to the Participant at the same
time as the underlying vested Phantom Stock units as set forth in Section 4.1.

 

ARTICLE
4 - BENEFITS

 

4.1
Entitlement to Benefits (Maturity). Except as otherwise provided in Section 4.2, the Participant’s vested Phantom Stock
units shall mature on the Maturity Date. If no Maturity Date is specified in the Plan Agreement, then the Maturity Date shall be the
date that is one year after the date on which all of the Phantom Stock units granted under a Plan Agreement are scheduled to be fully
vested. The Company shall pay to the Participant the amount provided for in Section 4.3 below for such vested Phantom Stock units within
60 days of the earlier to occur of: (i) the Maturity Date; or (ii) the date of the Participant’s Termination Other than for Cause;
provided, if the Participant is a “specified employee” (as described in Section 409A of the Code and Treasury regulations
promulgated thereunder), then the Company shall pay to the Participant the amount provided for in Section 4.3 below (determined as of
the date of termination) for the vested Phantom Stock units on the date 6 months and one day after the Participant’s Service terminates
(or, if earlier, the date of the Participant’s death). Any unvested Phantom Stock units shall terminate and become forfeited on
the date of the Participant’s termination of Service with the Company in accordance with Section 3.4.

 

    	5

     

    

 

4.2
Termination of Service for Cause. If the Company terminates the Participant’s Service for Cause, then all vested and unvested
Phantom Stock units shall terminate and become forfeited as of the date of termination of Service and the Participant shall not be entitled
to receive any amount for such Phantom Stock units. Prior to the forfeiture of any vested Phantom Stock units due to a termination for
Cause for reasons set forth in clause (v) of the definition of “Cause” in Article 2, the circumstances and rationale for
such termination shall be submitted by the Company to the Committee for review and approval at the discretion of the Committee. Such
review by the Committee shall only be for the purposes of relating to the Plan, and shall not affect the employment or service relationship
between the Company and any Participant.

 

4.3
Payment Amount. (a) For each vested Phantom Stock unit that is outstanding on the Maturity Date, the Participant shall be entitled
to receive an amount equal to his or her vested Phantom Stock unit multiplied by the Maturity Price as of the Maturity Date.

 

(b)
For each vested Phantom Stock unit that is outstanding on the date of the Participant’s death, Disability or Retirement, the Maturity
Price of such Phantom Stock units shall be the closing price of Omega Common Stock on the date of the Participant’s death, Disability
or Retirement, or if the closing price is not available on that date, the latest date prior to the Participant’s death, Disability
or Retirement for which the closing price is available.

 

ARTICLE
5 - BENEFICIARY

 

5.1
Designation. At the time participation in the Plan commences, or at any later date, each Participant shall designate on a form
satisfactory to the Committee one or more Beneficiaries to receive any benefits which may become payable hereunder in the event of his
or her death (Beneficiary Designation). A Participant may change any such Beneficiary at any time prior to his or her death upon written
notice to the Committee.

 

5.2
Multiple Beneficiarv Designations. If the Participant shall have made more than one Beneficiary Designation, the Beneficiary Designation
most recently filed with the Committee prior to the time of the Participant’s death shall govern.

 

5.3
Participant’s Obligation. All Participants and Beneficiaries shall have the obligation to keep the Committee informed of
their current address until such time as all benefits due have been paid.

 

5.4
No Beneficiarv Designation. If any amounts under the Plan become payable following a Participant’s death at a time when
no Beneficiary Designation is applicable or when no Beneficiary is in existence, such payments shall be made in a lump sum to such Participant’s
surviving spouse, or if none, such amounts shall be paid to such Participant’s estate.

 

ARTICLE
6 - MISCELLANEOUS

 

6.1
Amendment and Termination. The Committee reserves the right to amend or to terminate this Plan and Plan Agreements at any time;
provided, however, that no such action shall reduce the benefits that the Participant earned prior to the date of any such amendment
or termination.

 

    	6

     

    

 

Notwithstanding
any other provision of the Plan or any Plan Agreement to the contrary, the Committee may, in good faith, amend the Plan or any Plan Agreement
without Participant consent to the extent necessary, appropriate or desirable to comply with the requirements under any applicable federal
or state law, rule, or regulation, including Section 409A of the Code or to prevent the Participant from being subject to any additional
tax or penalty under Section 409A of the Code, while maintaining to the maximum extent practicable the original intent of the Plan and
the Plan Agreement. Notwithstanding the foregoing, neither the Company nor the Committee shall be liable to any Participant if such Participant’s
Phantom Stock units are subject to Section 409A of the Code, or the Participant otherwise is subject to any additional tax or penalty
under Section 409A of the Code.

 

6.2
Rights to Terminate Service. Nothing in the Plan or in any Plan Agreement shall confer upon any Participant the right to continue
in the Service of the Company or affect any right the Company may have to terminate the Service of such person.

 

6.3
Benefits not Transferable. Except as otherwise provided in Section 6.13, the rights and benefits under this Plan shall not be
subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge or encumbrance by any Participant or Beneficiary.
Benefits under this Plan shall not be subject to or liable for the debts, contracts, liabilities, engagements or torts of any Participant
or any Beneficiary, nor may the same be subject to attachment or seizure by any creditor of any Participant or any Beneficiary under
any circumstances. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of any Phantom Stock units or of any
right or privilege conferred by this Plan contrary to the provisions hereof, or upon the sale, levy or any attachment or similar process
upon the rights and privileges conferred by this Plan, such Phantom Stock units shall thereupon terminate and become forfeited.

 

6.4
Source of Funds. Amounts payable to a Participant under this Plan shall be from the general funds of the Company. No special or
separate fund shall be established, and no other segregation of assets shall be made to assure payout of benefits under the Plan. No
Participant shall have any interest in any property or assets of the Company and the rights of Participants to unpaid amounts under the
Plan shall be solely those of an unsecured creditor of the Company.

 

6.5
Plan Administration. The Plan shall be administered by, and in the sole discretion of, the Committee. The Committee may delegate
all or some of its responsibilities under the Plan to one or more individuals, who may not be Participants under the Plan. The Committee
may establish such rules and regulations as it deems necessary or desirable, make amendments in a manner consistent with Section 6.1
above, interpret the Plan and Plan Agreements, make factual findings and determinations, and otherwise make all determinations and take
such action in connection with the Plan as it, in its sole discretion, deems appropriate. The decisions of the Committee shall be final,
conclusive and binding upon all parties and the Committee shall not be liable for any action or determination made in good faith with
respect to the Plan or any Plan Agreement. The Committee and each person to whom duties and responsibilities have been delegated shall
be indemnified and held harmless by the Company against all claims, demands, damages, costs, liabilities, fines, and penalties, and all
expenses reasonably incurred by or imposed upon such individuals (including but not limited to reasonable attorneys’ fees) which
arise as a result of actions or failure to act in connection with the operation and administration of the Plan.

 

    	7

     

    

 

6.6
Determination of Benefits

 

(a)
General. The Committee may require any person claiming benefits under the Plan (“Claimant”) to submit an application
therefor in writing to the Claims Administrator, together with such other documents and information as the Committee may require.

 

(b)
Claims. Claims for benefits, benefit determinations, appeals and reviews of any adverse benefit determination and all associated
notifications shall, at a minimum, comply with Section 503 of ERISA and the applicable provisions of 29 C.F.R. § 2560.503-1
(“ERISA Regulations”).

 

(c)
Claims Administrator. The Claims Administrator shall be designated by the Committee. The Committee reserves the right to change
the Claims Administrator from time to time and to designate a special Claims Administrator when deemed necessary to avoid a conflict
of interest.

 

(d)
Notification of Benefit Determination. The Claims Administrator will notify the Claimant of a benefit determination in writing
within a reasonable time. Notification that a claim is wholly or partially denied will normally be given no later than 90 days after
receipt of the claim. The notice shall (1) specify the reasons for the adverse decision, (2) refer to the specific provisions of the
Plan on which the decision is based, (3) describe any additional material necessary to complete the claim and the reasons that such material
is necessary, (4) describe the appeal and review procedures and the applicable time limits, and (5) inform the Claimant of the right
to bring the matter to binding arbitration in accordance with Section 6.9 following review. Should special circumstances require an extension
of time for processing the claim, written notice of the extension shall be furnished to the Claimant prior to the expiration of the initial
ninety day period. The notice shall indicate the special circumstances requiring an extension of time and the date by which a final decision
is expected to be rendered. In no event shall the period of the extension exceed ninety days from the end of the initial ninety-day period.
Claims not acted upon within the time prescribed herein shall be deemed denied for purposes of proceeding to the review stage.

 

(e)
Review. A Claimant is entitled to have an adverse benefit determination reviewed by the Committee or its designee (the “Named
Fiduciary”). The request for review must be in writing and filed with the Claims Administrator no later than 60 days following
the Claimant’s receipt of the adverse determination. The Claimant may submit written comments and other information and documents
relating to the claim and have reasonable access to and receive copies of all documents and information relevant to the claim. The Claimant
may request a hearing. The Claims Administrator will promptly forward the request for review and the claim file to the Named Fiduciary.
The decision of the Named Fiduciary shall be made promptly, and not later than sixty days after the Named Fiduciary’s receipt of
a request for review, unless special circumstances require an extension of time for processing. In such a case, a decision shall be rendered
as soon as possible, but not later than one hundred twenty days after receipt of the request for review.

 

(f)
Named Fiduciary. The Named Fiduciary shall not be the Claims Administrator nor subordinate to the Claims Administrator. The Committee
reserves the right to change the Named Fiduciary from time to time, and to designate a special Named Fiduciary for appeals when deemed
necessary.

 

    	8

     

    

 

(g)
Review Procedure. The Named Fiduciary has the discretion to decide all questions regarding relevance and reasonable access. In
addition, the Named Fiduciary has the discretion as to whether a hearing shall be held. The Named Fiduciary will afford no deference
to the Claims Administrator’s decision, and will insure a full and fair review de nova.

 

(h)
Notification of Benefit Determination on Review. The Named Fiduciary’s decision will be in writing and sent to the Claims
Administrator. The Claims Administrator will then notify the Claimant either by hand delivery or by first class mail within a reasonable
time, and normally not later than 60 days after receipt of the claim for review. If the Named Fiduciary issues an adverse benefit decision
to the Claimant, the decision shall (1) specify the reasons for the decision, (2) refer to specific plan provisions on which the decision
was based, (3) inform the Claimant of the right to review all information reviewed by the Named Fiduciary, even information not relied
on in making the decision, and (4) inform the Claimant of the right to bring the matter to binding arbitration in accordance with Section
6.9.

 

(i)
Exhaustion of Remedies. No legal action for benefits under the Plan may be brought unless and until the Claimant has exhausted
his remedies under this Section 6.6.

 

6.7
Capital Structure Adjustments.

 

(a)
In the event of a change in the form of entity, recapitalization, reorganization, merger, consolidation, separation, financing, or like
change in the organizational or capital structure of the Company, the Committee shall make such changes to the Plan and/or Plan Agreement(s)
as the Committee deems appropriate. These changes may include, but are not limited to, changes to the definition of “Value”
and “Company”, or changes to the number of Phantom Stock units granted to any one or more Participants. The Committee’s
determination shall be final, binding, and conclusive. The Committee shall interpret this section in a manner it believes (in its discretion)
to be consistent with the intent to place Participants in substantially the same economic position as they would have had in the absence
of such an organizational or capital structure change.

 

(b)
The Plan shall not affect, in any way, the right or power of the Company to make adjustments, re-classifications, reorganizations, or
changes of its capital or business structures, to make distributions to its shareholders, or to merge or to consolidate or to dissolve,
liquidate or sell, or transfer all or part of its business or assets.

 

6.8
Satisfaction of Claims. Any payment to a Participant or Beneficiary or the legal representative of either, in accordance with
the terms of this Plan and the applicable Plan Agreement shall to the extent thereof be in full satisfaction of all claims such person
may have against the Company. The Committee may require such payee, as a condition to such payment, to execute a receipt and release
therefore in such form as shall be determined by the Committee.

 

    	9

     

    

 

6.9
Governing Law/Arbitration. The Plan shall be construed, administered, and governed in all respects in accordance with the laws
of the Commonwealth of Pennsylvania, without regard to its conflict of laws or choice of law provisions or principles. In the event any
claim or controversy arises under or concerning any provision of this Plan, such claim or controversy shall be settled by binding arbitration.
The arbitration proceedings will be conducted in Philadelphia, Pennsylvania in accordance with the Employment Arbitration Rules and Mediation
Procedures of the American Arbitration Association then in effect. Each Participant and the Company mutually agree that notwithstanding
the rules of the arbitral body, that (a) any arbitration shall be presided over by a neutral arbitrator who shall have been admitted
to the practice of law, and be in good standing or on retirement status in any one state of the United States, (b) the arbitrator shall
base his/her decision on the facts as presented into evidence, and in accordance with the laws of the jurisdiction chosen by the parties
under this Plan, (c) the arbitrator shall prepare a written memorandum of decision setting forth the findings of fact and conclusions
of law, and (d) in the course of performing his/her duties hereunder and in rendering his/her decision, the arbitrator shall have no
power or authority to add to, delete from, or otherwise modify this Plan, or any term, condition, covenant, representation, warranty,
or provision contained herein. The decision of the arbitrator shall be final, and judgment may be entered upon it in accordance with
the applicable law in any court having jurisdiction. Any claim for relief made under this Plan shall be made within one (1) year from
the date upon which the party claiming relief knew or should have known of the cause of action constituting such claim. The arbitrator
may award monetary damages to the prevailing party only for actual damages, but may not award punitive, consequential, special or incidental
damages as between the parties.

 

6.10
Captions. The captions of this Plan are descriptive only and do not affect the intent or interpretation of the Plan.

 

6.11
Severability. The invalidity or unenforceability of any provision or portion thereof of this Plan shall not affect the validity
or enforceability of any other provision or portion thereof.

 

6.12
Notices. Any notice required or permitted to be given hereunder shall be in writing sent by either personal delivery, overnight
delivery, or United States, registered or certified mail, return receipt requested, all of which shall be properly addressed with postage
or delivery charges prepaid, to the Committee or Participant or Beneficiary at their respective addresses listed below, or at such other
addresses as either the Company or Participant or Beneficiary may hereafter designate to the other in writing:

 

	 	To
    the Committee:	Omega
    Flex, Inc.	 
	 	 	c/o
    Legal Department	 
	 	 	451
    Creamery Way	 
	 	 	Exton,
    PA 19341	 
	 	 	 	 
	 	To
    Participant:	See
    Plan Agreement	 

 

Notices
sent by personal delivery shall be deemed given upon actual receipt. Notices sent by overnight delivery shall be deemed given on the
next business day. Notices sent via United States registered or certified mail shall be deemed given two business days from mailing.

 

6.13
Withholding. Payments made under this Plan constitute compensation and the Company shall deduct from all such payments an amount
sufficient to satisfy any federal, state, local and/or employment tax withholding requirements and may withhold any other sums as required
by the Company’s employee benefit plans.

 

    	10

     

    

 

IN
WITNESS WHEREOF, the Committee has caused this amended and restated Plan to be executed as of the Effective Date.

 

	 	Committee
    under the Omega Flex, Inc. 2006 Phantom Stock Plan (as amended and restated effective as of January 1, 2023)
	 	 	 
	 	By:	/S/
    Stewart B. Reed
	 	Its:	Chairman

 

    	11EXHIBIT 10.21

 

PHANTOM STOCK AGREEMENT

 

THIS PHANTOM STOCK AGREEMENT effective
as of [DATE], 20[ ] is between Omega Flex, Inc., a Pennsylvania corporation (“Company”), and [GRANTEE] (“Recipient”).

 

BACKGROUND

 

A. Pursuant
to the Company’s 2006 Phantom Stock Plan, as amended and restated effective as of January 1, 2023 (the “Plan”), the
Compensation Committee of the Company’s Board of Directors (the “Committee”) is authorized to grant phantom stock units
(“Phantom Stock Units”) to directors, officers and other key employees of the Corporation.

 

B. The
Board regards Recipient as a key contributor to the Company and, in order to provide additional incentive to Recipient to further his
efforts for Company, the Committee has directed that there be granted to Recipient Phantom Stock Units set forth below, upon the terms
and conditions set forth in the Plan and this Agreement.

 

AGREEMENTS

 

In consideration of the mutual
promises and covenants herein contained, the parties hereto hereby agree as follows:

 

1. Basic
Terms. Pursuant to the terms and conditions of the Plan and of this Agreement, Company hereby grants to Recipient units of
Phantom Stock as defined under the Plan as follows:

 

	Number:	[INSERT NUMBER]
	
    Grant Date:

    Maturity Date:

     

    Vesting:
	
    [INSERT DATE]

    [INSERT DATE]

     

    All Phantom Stock units cliff vest on the third anniversary
    of the Grant Date; provided the Recipient is then an employee or director, as applicable.

     

	Accelerated Vesting:	All Phantom Stock units fully vest in the event of the Recipient’s termination of Service due to death or Disability; provided the Recipient’s Service with the Company was continuous for one year prior to such event. If the Participant’s Service with the Company was continuous for one year prior to Retirement, the Recipient’s Phantom Stock units vest as follows: 

 

	
    Number of Completed Years that

    Retirement Follows Grant Date
	
    Percentage of Phantom Stock

    To Vest Upon Retirement

	1	33%
	2	and an additional 33%
	3	and an additional 34%

 

    	-1-

     

    

 

2.
No Rights; Capital Stock. Recipient shall not have any rights as a shareholder of Omega Flex, Inc. with respect to any Phantom
Stock units granted to Recipient under this Agreement.

 

3. No
Rights; Employment. The grant of the Phantom Stock units, execution of this Agreement or the vesting of any Phantom Stock units shall
not confer upon Recipient any right to, or guaranty of, continued employment with Company or membership on the Board of Company or any
of its Subsidiaries, nor in any way limit the right of Company or such Subsidiaries to terminate at any time the employment of or relationship
with the Recipient.

 

4. Benefits
not Transferable. Except for applicable withholding, Phantom Stock units shall not be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge or encumbrance by any Participant or Beneficiary. Phantom Stock units shall not be subject to or liable
for the debts, contracts, liabilities, engagements or torts of any Participant or any Beneficiary, nor may the same be subject to attachment
or seizure by any creditor of any Participant or any Beneficiary under any circumstances. Upon any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of any Phantom Stock units or of any right or privilege conferred by the Plan contrary to its provisions,
or upon the sale, levy or any attachment or similar process upon the rights and privileges conferred by the Plan, such Phantom Stock units
shall thereupon terminate and become forfeited.

 

5. Beneficiary
Designation. The names of each Beneficiary, if any, their relationship to the Recipient, and their respective interests in the Phantom
Stock units, are set forth in Exhibit A attached hereto.

 

6. Notices.
All notices to Recipient or other persons then entitled to benefits hereunder shall be delivered at the address below or such other address
as shall be specified in writing by Recipient or such other person. All notices to Company shall be delivered to the attention of its
Secretary at its principal offices.

 

7. Governing
Law. The Plan and this Agreement shall be construed under and governed by the laws of the Commonwealth of Pennsylvania as to all matters,
including, but not limited to, matters of validity, construction, effect and performance.

 

8. Arbitration. The
Recipient acknowledges that the Plan provides for mandatory arbitration of any disputes arising under the Plan and this Agreement,
or either of them, and the Recipient agrees to be bound by the arbitration provisions of the Plan. 

 

The parties understand
that by agreeing to arbitrate claims or controversies arising under or concerning any provision of the Plan and this Agreement, or either
of them, they are waiving the right to bring an action in a court of law, either state of federal, and are waiving the right to have claims
and damages (if any) determined by a jury.

 

9. Entire
Agreement, Amendment. This Agreement and the Plan contain the entire agreement between the parties hereto relating to the subject
matter hereof and shall not be modified or amended in any way except in a writing signed by all of the parties hereto. All terms which
are not defined in this Agreement shall bear the meaning ascribed to such terms in the Plan. This Agreement is made pursuant to and in
accordance with the Plan, and in the event of any conflict or discrepancy between the terms of this Agreement and the terms of the Plan,
the terms of the Plan shall have precedence over any conflicting or discrepant terms in this Agreement.

 

    	-2-

     

    

 

	 	COMPANY:
	 	OMEGA FLEX, INC.
	 	 	 
	 	By	
	 	 	 
	 	Name:	(Print)
	 	 	 
	 	Title:	 
	 	 	 
	 	RECIPIENT:
	 	 	
	 	Name:	[INSERT]
	 	Address:	[INSERT]

 

    	-3-

     

    

 

EXHIBIT A

 

Designation of Beneficiary

 

The undersigned, [ ], hereby designate [ ], as my beneficiary
under the Phantom Stock Agreement dated [____], between the undersigned and Omega Flex, Inc., until such time as the undersigned shall
change such designation in writing provided to Omega Flex, Inc.

 

	 	 
	 	[NAME]

 

	State of ________________	}	 
	County of ______________	}	ss.

 

On this _____ day of __________, before me, the undersigned notary public,
personally appeared [NAME], proved to me through satisfactory evidence of identification to be the person whose name is signed on the
preceding or attached document, and acknowledged to me that he or she signed it voluntarily for its stated purpose.

 

	 	__________________________________
	 	, Notary Public
	 	 
	 	My commission expires _____________________________

 

    	-4-

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