Blueprint
2017 EMPLOYEE STOCK OPTION PLAN
OF
TRIO-TECH INTERNATIONAL
1. PURPOSES OF THE
PLAN
This
2017 Employee Stock Option Plan (the “Plan”) of
Trio-Tech International, a California corporation (the
“Company”), is hereby established effective as of
September 14, 2017, the date that the Plan was approved and
adopted by the Company’s Board of Directors. The purposes of
the Plan are to:
1.1
Encourage selected employees (including directors who are also
employees), consultants and advisers to improve operations and
increase profits of the Company;
1.2
Encourage selected employees (including directors who are also
employees), consultants and advisers to accept or continue
employment or association with the Company or its Affiliates;
and
1.3
Increase the interest of selected employees (including directors
who are also employees), consultants and advisers in the
Company’s welfare through participation in the growth in
value of the common stock of the Company (the “Common
Stock”).
Options
granted under this Plan (“Options”) may be
“incentive stock options” (“ISOs”) intended
to satisfy the requirements of Section 422 of the Internal
Revenue Code of 1986, as amended (the “Code”), or
“nonqualified options” (“NQOs”). The
Company shall have no liability to any optionee hereunder with
respect to the tax treatment of any Option granted and in effect
under the Plan. The Plan is designed to be exempt from Code
Section 409A.
2. ELIGIBLE
PERSONS
Every
person who at the date of grant of an Option is a full-time
employee of the Company or of any Affiliate (as defined below) of
the Company is eligible to receive NQOs or ISOs under this Plan.
Every person who at the date of grant is a consultant to the
Company or any Affiliate (as defined below) of the Company is
eligible to receive NQOs under this Plan. The term
“Affiliate” as used in the Plan means a parent or
subsidiary corporation as defined in the applicable provisions
(currently Sections 424(e) and (f), respectively) of the Code. The
term “employee” includes an officer or director who is
an employee of the Company. The term “consultant”
includes persons employed by, or otherwise affiliated with, a
consultant.
3. STOCK SUBJECT TO THIS
PLAN; MAXIMUM NUMBER OF GRANTS
Subject
to the provisions of Section 6.1.1 of the Plan, the total number of
shares of stock which may be issued under Options granted pursuant
to this Plan shall not exceed 300,000 shares of Common Stock. The
shares covered by the portion of any grant under the Plan which
expires unexercised shall become available again for grants under
the Plan. No eligible person shall be granted Options during any
twelve-month period covering more than 100,000 shares.
4. ADMINISTRATION
4.1
The Plan shall be administered by the Board of Directors of the
Company (the “Board”) or by a committee (the
“Committee”) to which administration of the Plan, or of
part of the Plan, is delegated by the Board (in either case, the
“Administrator”). The Board shall appoint and remove
members of the Committee in its discretion in accordance with
applicable laws. If necessary in order to comply with Rule 16b-3
promulgated by the Securities and Exchange Commission (“Rule
16b-3”), or any successor rule thereto, and Section 162(m) of
the Code, the Committee shall, in the Board’s discretion, be
comprised solely of “non-employee directors” within the
meaning of Rule 16b-3 and “outside directors” within
the meaning of Section 162(m) of the Code. The foregoing
notwithstanding, the Administrator may delegate nondiscretionary
administrative duties to such employees of the Company as it deems
proper and the Board, in its absolute discretion, may at any time
and from time to time exercise any and all rights and duties of the
Administrator under the Plan.
4.2
Subject to the other provisions of this Plan, the Administrator
shall have the authority, in its discretion: (i) to grant Options;
(ii) to determine the fair market value of the Common Stock subject
to Options; (iii) to determine the exercise price of Options
granted; (iv) to determine the persons to whom, and the time or
times at which, Options shall be granted, and the number of shares
subject to each Option; (v) to interpret this Plan; (vi) to
prescribe, amend, and rescind rules and regulations relating to
this Plan; (vii) to determine the terms and provisions of each
Option granted (which need not be identical), including but not
limited to, the time or times at which Options shall vest and be
exercisable; (viii) to modify, amend, terminate or replace any
Option; (ix) to authorize any person to execute on behalf of the
Company any instrument evidencing the grant of an Option; and (x)
to make all other determinations deemed necessary or advisable for
the administration of this Plan. The Administrator may delegate
nondiscretionary administrative duties to such employees of the
Company as it deems proper.
4.3
All questions of interpretation, implementation, and application of
this Plan shall be determined by the Administrator. Such
determinations shall be final and binding on all
persons.
5. GRANTING OF OPTIONS;
OPTION AGREEMENT
5.1
No Options shall be granted under this Plan after ten years from
the date of adoption of this Plan by the Board and, if not sooner
terminated by action of the Company’s Board of Directors, the
Plan shall terminate automatically as of such tenth anniversary
date.
5.2
Each Option shall be evidenced by a written stock option agreement,
in form satisfactory to the Administrator, executed by the Company
and the person to whom such Option is granted; provided, however,
that the failure by the Company, the optionee, or both to execute
such an agreement shall not invalidate the granting of an Option in
accordance with the terms of such written option agreement as
offered under the Plan, although the exercise of each Option shall
be subject to Section 6.1.3.
5.3
The stock option agreement shall specify whether each Option it
evidences is an NQO or an ISO.
5.4
Subject to Section 6.3.3 with respect to ISOs, the Administrator
may approve the grant of Options under this Plan to persons who are
expected to become employees or consultants of the Company, but are
not employees or consultants at the date of approval, and the date
of approval shall be deemed to be the date of grant unless
otherwise specified by the Administrator. However, no such Options
approved in anticipation of hire by the Company shall be
exercisable or validly existing and in effect before the actual
date of hire.
6. TERMS AND CONDITIONS
OF OPTIONS
Each
Option granted under this Plan shall be subject to the terms and
conditions set forth in Section 6.1. NQOs shall be also subject to
the terms and conditions set forth in Section 6.2, but not those
set forth in Section 6.3. ISOs shall also be subject to the terms
and conditions set forth in Section 6.3, but not those set forth in
Section 6.2.
6.1 Terms and Conditions
to which All Options Are Subject. All Options granted under this Plan shall be
subject to the following terms and conditions:
6.1.1 Changes in Capital
Structure. In the event of
changes in the outstanding Common Stock by reason of stock
dividends, stock splits, reverse stock splits, split ups,
consolidations, recapitalizations, reorganizations or like events,
an appropriate adjustment shall be made in the number of shares
reserved under the Plan, in the number of shares set forth in
Section 3 hereof, and in the number of shares and the option price
per share specified in any stock option agreement with respect
toany unpurchased shares; provided, however, that the Company shall
not be required to issue fractional shares as a result of any such
adjustments but may make such adjustment as the Administrator deems
appropriate. The Company shall give prompt notice to all optionees
of any adjustment pursuant to this Section.
6.1.2 Corporate
Transactions. Section
6.1.1 above to the contrary notwithstanding, in the event of any
merger, consolidation or other reorganization of the Company in
which the Company is not the surviving or continuing corporation or
in the event of the liquidation or dissolution of the Company, all
options granted hereunder shall terminate on the effective date of
the merger, consolidation, reorganization, liquidation, or
dissolution unless the agreement with respect thereto provides for
the assumption of such options by the continuing or surviving
corporation. Any other provision of this Plan or the applicable
stock option agreement to the contrary notwithstanding, all
outstanding options granted hereunder shall be fully exercisable
for a period of 30 days prior to the effective date of any such
merger, consolidation, reorganization, liquidation, or dissolution
unless such options are assumed by the continuing or surviving
corporation. The Committee shall notify the holders of all
outstanding options in advance of any such window period for
exercising options.
6.1.3 Time
of Option Exercise. Subject to
Section 5 and Section 6.3.4, Options granted under this
Plan shall be exercisable (a) immediately as of the effective
date of the stock option agreement granting the Option, or
(b) in accordance with a schedule related to the date of the
grant of the Option, the date of first employment, or such other
date as may be set by the Administrator (in any case, the
“Vesting Base Date”) and specified in the written stock
option agreement relating to such Option. In any case, no Option
shall be exercisable until a written stock option agreement in form
satisfactory to the Company is executed by the Company and the
optionee.
6.1.4 Option Grant
Date. Except in the case of
advance approvals described in Section 5(d), the date of grant of
an Option under this Plan shall be the date as of which the
Administrator approves the grant with respect to at least the
following determinable features: the identity of the grantee, type
of grant, number of shares, exercise price, vesting schedule and
expiration date. For this purpose, the default provisions of the
Plan shall be deemed incorporated into any grant to the extent that
other terms are not specified for the grant.
6.1.5 Nontransferability of
Option Rights. No Option
granted under this Plan shall be assignable or otherwise
transferable by the optionee except by will or by the laws of
descent and distribution. During the life of the optionee, an
Option shall be exercisable only by (or on behalf of) the
optionee.
6.1.6 Payment.
Except as provided below, payment in full, in cash, of the exercise
price shall be made for all stock purchased at the time written
notice of exercise of an Option is given to the Company, and
proceeds of any payment shall constitute general funds of the
Company. At the time an Option is granted or exercised, the
Administrator, in the exercise of its absolute discretion after
considering any tax, accounting and financial consequences, may
authorize any one or more of the following additional methods of
payment:
6.1.6.1
Subject to the discretion of the Administrator and the terms of the
stock option agreement granting the Option, by delivery of a
properly executed notice of exercise together with irrevocable
instructions to a broker providing for the assignment to the
Company of the proceeds of a sale or loan with respect to some or
all of the shares being acquired upon the exercise of the Option
(including, without limitation, through an exercise complying with
the provisions of Regulation T as promulgated from time to time by
the Board of Governors of the Federal Reserve System) (a
“Cashless Exercise”)); and
6.1.6.2 Subject
to the discretion of the Administrator and the terms of the stock
option agreement granting the Option, delivery by the optionee of
Common Stock already owned by the optionee for all or part of the
Option exercise price, provided the value (determined as set forth
in Section 6.1.10) of such Common Stock is equal on the date of
exercise to the Option exercise price, or such portion thereof as
the optionee is authorized to pay by delivery of such stock. In
such case, prior to the acceptance of such shares of Common Stock,
the optionee shall supply the Board with written representations
and warranties, including without limitation a representation and
warranty that the optionee has good and marketable title to such
shares free and clear of liens and encumbrances. No share of Common
Stock shall be issued until full payment therefor has been made,
and until any tax withholding obligations have been satisfied in a
manner acceptable to the Company.
6.1.7 Termination
of Employment. If for any reason
other than death, permanent and total disability, or Cause (see
Section 6.1.8 below), an optionee ceases to be employed by the
Company or any of its Affiliates (such event being called a
“Termination”), Options held at the date of Termination
(to the extent then exercisable) may be exercised in whole or in
part at any time within three months of the date of such
Termination, or such other period of not less than 30 days
after the date of such Termination as is specified in the Option
Agreement (but in no event after the Expiration Date); provided,
however, that if such exercise of the Option would result in
liability for the optionee under Section 16(b) of the Exchange Act,
then such three-month period automatically shall be extended until
the tenth day following the last date upon which optionee has any
liability under Section 16(b) (but in no event after the Expiration
Date). If an optionee dies or becomes permanently and totally
disabled (within the meaning of Section 22(e)(3) of the Code)
while employed by the Company or an Affiliate or within the period
that the Option remains exercisable after Termination, Options then
held (to the extent then exercisable) may be exercised, in whole or
in part, by the optionee, by the optionee’s personal
representative or by the person to whom the Option is transferred
by devise or the laws of descent and distribution, at any time
within six months after the death or six months after the permanent
and total disability of the optionee or any longer period
specified in the Option Agreement (but in no event after the
Expiration Date). For purposes of this Section 6.1.7,
“employment” includes service as a consultant for the
Company or an Affiliate. For purposes of this Section 6.1.7,
an optionee’s employment shall not be deemed to terminate by
reason of sick leave, military leave or other leave of absence
approved by the Company, for as long as the period of any such
leave does not exceed 90 days or, if longer, the duration of
the optionee’s right to reemployment by the Company or any
Affiliate as guaranteed either contractually or by
statute.
6.1.8 Termination
for Cause. Notwithstanding any
other provision of the Plan to the contrary, if the
optionee’s Service is terminated for Cause, the Option shall
terminate in its entirety and cease to be exercisable immediately
upon such termination of Service. For the purposes of this Plan,
Cause means any of the following: (i) the optionee’s theft,
dishonesty, willful misconduct, breach of fiduciary duty for
personal profit, or falsification of any Company documents or
records; (ii) the optionee’s material failure to abide by the
Company’s code of conduct or other policies (including,
without limitation, policies relating to confidentiality and
reasonable workplace conduct); (iii) the optionee’s
unauthorized use, misappropriation, destruction or diversion of any
tangible or intangible asset or corporate opportunity of the
Company (including, without limitation, the optionee’s
improper use or disclosure of the Company’s confidential or
proprietary information); (iv) any intentional act by the optionee
which has a material detrimental effect on the Company’s
reputation or business; (v) the optionee’s repeated failure
or inability to perform any reasonable assigned duties after
written notice from the Company of, and a reasonable opportunity to
cure, such failure or inability; (vi) any material breach by the
optionee of any employment or service agreement between the
optionee and the Company, which breach is not cured pursuant to the
terms of such agreement; or (vii) the optionee’s conviction
(including any plea of guilty or nolo contendere) of any criminal
act involving fraud, dishonesty, misappropriation or moral
turpitude, or which impairs the optionee’s ability to perform
his or her duties with the Company.
6.1.9 Withholding and
Employment Taxes. At the time
of exercise of an Option and as a condition thereto, or at such
other time as the amount of such obligations becomes determinable
(the “Tax Date”), the optionee shall remit to the
Company in cash all applicable federal and state withholding and
employment taxes. Such obligation to remit may be satisfied, if
authorized by the Administrator in its sole discretion, after
considering any tax, accounting and financial consequences, by the
optionee’s (a) paying cash, (b) electing to have the Company
withhold cash or shares having with a fair market value equal to
the amount required to be withheld, (c) delivering to the Company
already-owned shares having a fair market value equal to the
minimum amount required to be withheld or remitted, provided the
delivery of such shares will not result in any adverse accounting
consequences as the Administrator determines in its sole
discretion, (d) selling a sufficient number of shares otherwise
deliverable to the optionee through such means as the Administrator
may determine in its sole discretion (whether through a broker or
otherwise) equal to the tax obligations required to be withheld,
(e) retaining from salary or other amounts payable to the optionee
cash having a sufficient value to satisfy the tax obligations, or
(f) any other means which the Administrator, in its sole
discretion, determines to both comply with applicable laws, and to
be consistent with the purposes of the Plan. The amount of tax
obligations will be deemed to include any amount that the
Administrator agrees may be withheld at the time the election is
made, not to exceed the amount determined by using the maximum
federal, state or local marginal income tax rates applicable to the
optionee or the Company, as applicable, with respect to the Option
on the date that the amount of tax or social insurance liability to
be withheld or remitted is to be determined. The fair market value
of the shares to be withheld or delivered shall be determined as of
the date that the tax obligations are required to be
withheld.
6.1.10 Other
Provisions. Each Option granted
under this Plan may contain such other terms, provisions, and
conditions not inconsistent with this Plan as may be determined by
the Administrator, and each ISO granted under this Plan shall
include such provisions and conditions as are necessary to qualify
the Option as an “incentive stock option” within the
meaning of Section 422 of the Code.
6.1.11 Determination of
Value. For purposes of the
Plan, the value of Common Stock or other securities of the Company
shall be determined as follows:
6.1.11.1
If the Common Stock (or other security) is readily tradable on an
established securities market, its fair market value shall be
determined, in accordance with regulations under Code Section 409A,
by any of the following methods selected and consistently followed
by the Administrator from time to time: (i) the last sale before or
the first sale after the grant; (ii) the closing price on the
trading day before or the trading day of the grant; (iii) the
arithmetic mean of the high and low prices on the trading day
before or the trading day of the grant; or (iv) any other
reasonable method using actual transactions in the Common Stock (or
other security) as reported by such market.
6.1.11.2
If the Common Stock (or other security) is not readily tradable on
an established securities market, its fair market value shall be
determined in good faith by the Administrator by a reasonable
application of a reasonable valuation method, taking into
consideration all relevant factors as provided in regulations under
Code Section 409A, or the Administrator may consistently apply,
from time to time, one of the valuation methods presumed to be
reasonable as set forth in said regulations.
6.1.12 Option
Term. Subject to Section
6.3.5, no Option shall be exercisable more than ten years after the
date of grant, or such lesser period of time as is set forth in the
stock option agreement (the end of the maximum exercise period
stated in the stock option agreement is referred to in this Plan as
the “Expiration Date”).
6.2 Terms and Conditions
to Which Only NQOs Are Subject.
Options granted under this Plan which are designated as NQOs shall
be subject to the following terms and
conditions:
6.2.1 Exercise
Price. The exercise price of a
NQO shall be not less than the fair market value (determined in
accordance with Section 6.1.10) of the stock subject to the Option
on the date of grant. NQOs granted under this Plan shall not be
discounted; accordingly they are intended to be exempt from Code
Section 409A.
6.3 Terms and Conditions
to Which Only ISOs Are Subject.
Options granted under this Plan which are designated as ISOs shall
be subject to the following terms and
conditions:
6.3.1 Exercise
Price.
6.3.1.1
Except as set forth in Section 6.3.1.2, the exercise price of an
ISO shall be determined in accordance with the applicable
provisions of the Code and shall in no event be less than the fair
market value (determined in accordance with Section 6.1.10) of the
stock covered by the Option at the time the Option is
granted.
6.3.1.2
The exercise price of an ISO granted to any person who owns,
directly or by attribution under the Code (currently Section
424(d)), stock possessing more than ten percent of the total
combined voting power of all classes of stock of the Company or of
any Affiliate (a “Ten Percent Shareholder”) shall in no
event be less than 110% of the fair market value (determined in
accordance with Section 6.1.10) of the stock covered by the Option
at the time the Option is granted.
6.3.2 Disqualifying
Dispositions. If stock acquired
by exercise of an ISO granted pursuant to this Plan is disposed of
in a “disqualifying disposition” within the meaning of
Section 422 of the Code, the holder of the stock immediately before
the disposition shall promptly notify the Administrator in writing
of the date and terms of the disposition and shall provide such
other information regarding the Option as the Administrator may
reasonably require.
6.3.3 Grant
Date. If an ISO is granted in
anticipation of employment as provided in Section 5(d), the
Option shall be deemed granted, without further approval, on the
date the grantee assumes the employment relationship forming the
basis for such grant, and, in addition, satisfies all requirements
of this Plan for Options granted on that date.
6.3.4 Vesting.
Notwithstanding any other provision of this Plan, ISOs granted for
any particular optionee under all incentive stock option plans of
the Company and its subsidiaries may not “vest” for
more than $100,000 in fair market value of stock (measured on the
grant dates(s)) in any calendar year. For purposes of the preceding
sentence, an Option “vests” when it first becomes
exercisable. If, by their terms, such ISOs taken together would
vest to a greater extent than the foregoing vesting limit in a
calendar year, and unless otherwise provided by the Administrator,
the vesting limitation described above shall be applied by
deferring (only to the extent necessary to satisfy the $100,000
limit) the exercisability of those ISOs or portions of ISOs which
have the highest per share exercise prices. The ISOs or portions of
ISOs whose exercisability is so deferred shall become exercisable
on the first day of the first subsequent calendar year during which
they may be exercised, as determined by applying these same
principles and all other provisions of this Plan including those
relating to the expiration and termination of ISOs. In no event,
however, will the operation of this Section 6.3.4 cause an ISO to
vest before its terms or, having vested, cease to be vested. To the
extent that any portion of an ISO cannot be deferred to any later
calendar year, then the portion of such ISO that exceeds the
foregoing annual vesting limit for the last calendar year in which
any portion of that ISO is permitted to vest as an ISO, shall be
converted and treated thereafter as an NQO under the Plan and the
optionee shall be notified of that conversion.
6.3.5 Term.
Notwithstanding Section 6.1.11, no ISO granted to any Ten
Percent Shareholder shall be exercisable more than five years after
the date of grant.
7. MANNER OF
EXERCISE
7.1
An optionee wishing to exercise an Option shall give written notice
to the Company at its principal executive office, to the attention
of the officer of the Company designated by the Administrator,
accompanied by payment of the exercise price and withholding taxes
as provided in Sections 6.1.6 and 6.1.8. The date the Company
receives written notice of an exercise hereunder accompanied by
full payment or satisfaction of the exercise price will be
considered as the date such Option was exercised.
7.2
Promptly after receipt of written notice of exercise of an Option
and all payments called for by Section 7.1, the Company shall issue
or cause to be issued the shares acquired pursuant to an option and
shall deliver such shares to or for the benefit of the Optionee by
means of one or more of the following: (a) by delivering to the
optionee evidence of book entry shares of stock credited to the
account of the optionee, (b) by depositing such shares of stock for
the benefit of the optionee with any broker with which the optionee
has an account relationship, or (c) by delivering such shares of
stock to the optionee in certificate form,. An optionee or
permitted transferee of an optionee shall not have any privileges
as a shareholder with respect to any shares of stock covered by the
Option until the date of issuance (as evidenced by the appropriate
entry on the books of the Company or a duly authorized transfer
agent) of such shares.
7.3 Unless exempted by
the Administrator, if an officer or director who is subject to the
provisions of Section 16(b) of the Exchange Act exercises an Option
within six months of the grant of such Option, the shares acquired
upon exercise of such Option may not be disposed of until six
months after the date of grant of such Option.
8. PERFORMANCE-BASED
AWARDS UNDER CODE SECTION 162(M)
8.1 General.
If the Administrator, in its discretion, decides to grant an Option
intended to qualify as “performance-based compensation”
under Section 162(m) of the Code, the provisions of this Section 8
will control over any contrary provision in the Plan. The
Administrator, in its discretion, also may grant Options that are
not intended to qualify as “performance-based
compensation” under Section 162(m) of the
Code.
8.2 Performance
Goals. The granting and/or
vesting of Options under the Plan may, in the discretion of the
Administrator, be made subject to the achievement of one or more
Performance Goals. For the purposes of this Plan,
“Performance Goals” means the goal(s) (or combined
goal(s)) determined by the Administrator in its discretion to be
applicable to an optionee with respect to an Option. As determined
by the Administrator, the Performance Goals applicable to an Option
shall provide for a targeted level or levels of achievement using
one or more of the following measures: (a) cash flow, (b) earnings
per share, (c) gross revenue, (d) market share, (e) return on
capital, (f) total shareholder return, or (g) operating
profits.
8.3 Procedures.
To the extent necessary to comply with the “performance-based
compensation” provisions of Section 162(m) of the Code, with
respect to any Option granted subject to Performance Goals and
intended to qualify as “performance-based compensation”
under such section, on or before the determination date (i.e.,
within the first 25% of the performance period, but in no event
more than ninety (90) days following the commencement of any
performance period or such other time as may be required or
permitted by Section 162(m) of the Code), the Administrator will,
in writing, (i) designate one or more optionees to whom an Option
will be made, (ii) determine the performance period, (iii)
establish the Performance Goals and amounts that may be earned for
the performance period, and (iv) determine any other terms and
conditions applicable to the Option(s).
8.4 Additional
Limitations. Notwithstanding
any other provision of the Plan, any Option that is granted to an
optionee and is intended to constitute qualified
“performance-based compensation” under Section 162(m)
of the Code will be subject to any additional limitations set forth
in the Code (including any amendment to Section 162(m)) or any
regulations and ruling issued thereunder that are requirements for
qualification as “performance- ased compensation” under
Section 162(m) of the Code, and the Plan will be deemed amended to
the extent necessary to conform to such
requirements.
8.5 Determination of
Amounts Earned. Following the
completion of each performance period, the Administrator will
certify in writing whether the applicable Performance Goals have
been achieved for such performance period. An optionee will be
eligible to receive payment pursuant to an Option intended to
qualify as “performance-based compensation” under
Section 162(m) of the Code for a performance period only if the
Performance Goals for such period are achieved. In determining the
amounts earned by an optionee pursuant to an Option intended to
qualified as “performance-based compensation” under
Section 162(m) of the Code, the Administrator will have the right
to (a) reduce or eliminate (but not to increase) the amount payable
at a given level of performance to take into account additional
factors that the Administrator may deem relevant to the assessment
of individual or corporate performance for the performance period,
(b) determine what actual Option, if any, will be paid in the event
of a termination of employment as the result of an optionee’s
death or disability or upon a corporate transaction (as described
in Section 6.1.2) or in the event of a termination of employment
following a corporate transaction prior to the end of the
performance period, and (c) determine what actual Award, if any,
will be paid in the event of a termination of employment other than
as the result of a optionee’s death or disability prior to a
Change of Control and prior to the end of the Performance Period to
the extent an actual Award would have otherwise been achieved had
the optionee remained employed through the end of the Performance
Period.
9. EMPLOYMENT OR
CONSULTING RELATIONSHIP
Nothing
in this Plan or any Option granted hereunder shall interfere with
or limit in any way the right of the Company or of any of its
Affiliates to terminate any optionee’s employment or
consulting at any time, nor confer upon any optionee any right to
continue in the employ of, or consult with, the Company or any of
its Affiliates.
10. CONDITIONS UPON
ISSUANCE OF SHARES
Shares
of Common Stock shall not be issued pursuant to the exercise of an
Option unless the exercise of such Option and the issuance and
delivery of such shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended (the “Securities
Act”).
11. NONEXCLUSIVITY OF THE
PLAN
The
adoption of the Plan shall not be construed as creating any
limitations on the power of the Company to adopt such other
incentive arrangements as it may deem desirable, including, without
limitation, the granting of stock options other than under the
Plan.
12. AMENDMENTS TO
PLAN
The
Board may at any time amend, alter, suspend or discontinue this
Plan. Without the consent of an optionee, no amendment, alteration,
suspension or discontinuance may adversely affect outstanding
Options except to conform this Plan and Options granted under this
Plan to the requirements of federal or other tax laws relating to
such stock Options. No amendment, alteration, suspension or
discontinuance shall require shareholder approval unless
(a) shareholder approval is required to preserve incentive
stock option treatment for federal income tax purposes, or
(b) the Board otherwise concludes that shareholder approval is
advisable; provided, however, that no such amendment shall, without
the approval of the shareholders of the Company, effectuate a
change for which shareholder approval is required in order for the
Plan to continue to qualify under Rule 16b-3 (while it is in
effect) or any successor rule thereto.
13. EFFECTIVE DATE OF
PLAN
No
Option shall be exercisable unless and until written consent of the
shareholders of the Company, or approval of shareholders of the
Company voting at a validly called shareholders’ meeting, is
obtained within twelve months after adoption of the Plan by the
Board. If such shareholder approval is not obtained within such
time, Options granted hereunder shall terminate and be of no force
and effect from and after expiration of such twelve-month period to
the extent required by applicable law; otherwise such Options (if
ISOs) shall be converted to NQOs if such conversion would allow
them to remain in effect. Options may be granted and exercised
under this Plan only after there has been compliance with all
applicable federal and state securities laws.
14. CHOICE OF
LAW
Except
to the extent governed by applicable local law, the validity,
interpretation, construction and performance of the Plan and each
Award Agreement shall be governed by the laws of the State of
California, without regard to its conflict of law
rules.
IN
WITNESS WHEREOF, this Plan, having been first duly adopted by the
Board of Directors, is hereby executed below by a duly authorized
officer of the Company on this 14th day of September, 2017, to take
effect as of such date as provided herein.
TRIO-TECH
INTERNATIONAL
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By:
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/s/
A.
Charles Wilson
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A. Charles
Wilson
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Chairman of the
Board
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