INFORMATION STATEMENT
(Preliminary)
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE
REQUESTED NOT TO SEND US A PROXY
NOTICE OF STOCKHOLDER ACTION BY WRITTEN CONSENT
GENERAL INFORMATION
To the Holders of Common Stock of Network CN, Inc.:
This Information Statement is first being mailed on or about
April 3, 2023 to the holders of record of the outstanding common stock, $0.001 par value per share (the “Common Stock”) of
Network CN Inc., a Delaware corporation (the “Company”), as of the close of business on March 22, 2023 (the “Record
Date”), pursuant to Rule 14c-2 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
This Information Statement relates to actions taken by written consent in lieu of a meeting, March 22, 2023 (the “Written Consent”)
of the stockholders of the Company owning a majority of the outstanding shares of Common Stock of the Company (the “Majority Stockholders”)
as of the Record Date. Except as otherwise indicated by the context, references in this Information Statement to “Company,”
“we,” “us,” or “our” are references to Network CN Inc..
The Written Consent:
| 1. | approved to amend the Company's Certificate of Incorporation, as amended, to decrease the total number
of authorized shares of Common Stock from 100,000,000,000 to 100,000,000 (the "Authorized Shares Decrease"). A copy of the Amendment
is attached as Exhibit A to this Information Statement. |
| 2. | approved to amend the 2023 Equity Incentive Plan to decrease the maximum number of shares of common stock
of the Company that may be issued and sold from 20,000,000 to 10,000,000 (“Amended Plan”). A copy of the Amended Plan is attached
as Exhibit B to this Information Statement. |
The Written Consent constitutes
the consent of a majority of the total number of shares of outstanding Common Stock and is sufficient under the General Corporation Law
of the State of Delaware (“DGCL”) and our Bylaws to approve the actions described herein. Accordingly, they are not presently
being submitted to our other stockholders for a vote. Pursuant to Rule 14c-2 under the Securities Exchange Act of 1934, as amended, the
actions described herein will not be implemented until a date at least 20 days after the date on which this Information Statement has
been first mailed to the stockholders.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT
TO SEND A PROXY.
This Information Statement has been filed with the Securities
and Exchange Commission and is being furnished, pursuant to Section 14C of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), to the holders (the “Stockholders”) of common stock, par value $0.001 per share (the “Common
Stock”), of the Company to notify the Stockholders of the Authorized Shares Decrease and the Amended Plan. Stockholders of record
at the close of business on March 22,2023, are entitled to notice of this stockholder action by written consent. Because this action has
been approved by the holders of the required majority of the voting power of our voting stock, no proxies were or are being solicited.
The Authorized Shares Decrease and Amended Plan will not be effected until at least 20 calendar days after the mailing of the Information
Statement accompanying this Notice. We will mail the Notice of Stockholder Action by Written Consent to the Stockholders on or about April
3, 2023.
PLEASE NOTE THAT THIS IS NOT A NOTICE OF A MEETING OF STOCKHOLDERS
AND NO STOCKHOLDERS MEETING WILL BE HELD TO CONSIDER THE MATTERS DESCRIBED HEREIN. THIS INFORMATION STATEMENT IS BEING FURNISHED TO YOU
SOLELY FOR THE PURPOSE OF INFORMING STOCKHOLDERS OF THE MATTERS DESCRIBED HEREIN PURSUANT TO SECTION 14(C) OF THE EXCHANGE ACT AND THE
REGULATIONS PROMULGATED THEREUNDER, INCLUDING REGULATION 14C.
| |
By Order of the Board of Directors, |
| |
|
| |
|
| |
/s/ Earnest Leung |
|
| |
Chief Executive Officer |
|
| |
April 3, 2023 |
|
INTRODUCTION
This Information Statement is being
first mailed on or about April 3, 2023, to stockholders of the Company by the Board of Directors to provide material information regarding
corporate actions that have been approved by the Written Consent of the Majority Stockholders.
Only one copy of this Information Statement
is being delivered to two or more stockholders who share an address unless we have received contrary instruction from one or more of such
stockholders. We will promptly deliver, upon written or oral request, a separate copy of the Information Statement to a security holder
at a shared address to which a single copy of the document was delivered. If you would like to request additional copies of the Information
Statement, or if in the future you would like to receive multiple copies of information statements or proxy statements, or annual reports,
or, if you are currently receiving multiple copies of these documents and would, in the future, like to receive only a single copy, please
so instruct us by writing to the corporate secretary at the Company’s executive offices at the address specified above.
PLEASE NOTE THAT THIS IS NOT A REQUEST
FOR YOUR VOTE OR A PROXY STATEMENT, BUT RATHER AN INFORMATION STATEMENT DESIGNED TO INFORM YOU OF THE MATTERS DESCRIBED HEREIN.
The entire cost of furnishing this
Information Statement will be borne by the Company. We will request brokerage houses, nominees, custodians, fiduciaries and other like
parties to forward this Information Statement to the beneficial owners of the Common Stock held of record by them.
AUTHORIZATION BY THE BOARD OF DIRECTORS
AND THE MAJORITY STOCKHOLDERS
Under the DGCL and the Company’s
Bylaws, any action that can be taken at an annual or special meeting of stockholders may be taken without a meeting, without prior notice
and without a vote, if the holders of outstanding stock having not less than the minimum number of votes that will be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon were present and voted consent to such action in writing.
The approval of 1) the filing of a Certificate of Amendment to effect the decrease in authorized shares of our Common Stock and 2) amendment
of the 2023 Equity Incentive Plan to decrease the maximum number of shares of common stock of the Company that may be issued and sold
from 20,000,000 to 10,000,000 require the affirmative vote or written consent of a majority of the issued and outstanding shares of Common
Stock. Each Stockholder is entitled to one vote per share of Common Stock held of record on any matter which may properly come before
the stockholders.
On the Record Date, the Company had
21,355,899 shares of Common Stock issued and outstanding with the holders thereof being entitled to cast one vote per share.
On March 22, 2023, the Majority Stockholders
unanimously adopted resolutions approving the filing of a Certificate of Amendment as set forth in Exhibit A to effect the decrease
in authorized shares of our Common Stock and the amendment of the 2023 Equity Incentive Plan to decrease the maximum number of shares
of common stock of the Company that may be issued and sold from 20,000,000 to 10,000,000.
CONSENTING STOCKHOLDERS
On the Record date, the Majority Stockholders being the record
holders of 15,138,201 shares of our Common Stock, constituting approximately 70.89% of the issued and outstanding shares of our Common
Stock, consented in writing to approve the filing of the Certificate of Amendment to effect the decrease in authorized shares of our Common
Stock and the amendment of the 2023 Equity Incentive Plan to decrease the maximum number of shares of common stock of the Company that
may be issued and sold from 20,000,000 to 10,000,000 (together, the “Stockholder Actions”).
We are not seeking written consent from any other stockholder,
and the other stockholders will not be given an opportunity to vote with respect to the foregoing Stockholder Actions. All necessary corporate
approvals have been obtained. This Information Statement is furnished solely for the purposes of advising stockholders of the action taken
by Written Consent and giving stockholders notice of such actions taken as required by the Exchange Act.
As the Stockholder Actions were taken by Written Consent,
there will be no security holders’ meeting and representatives of the principal accountants for the current year and for the most
recently completed fiscal year will not have the opportunity to make a statement if they desire to do so and will not be available to
respond to appropriate questions from our stockholders.
DISSENTER’S RIGHTS
Under Delaware law, holders of our Common Stock are not entitled
to dissenter’s rights of appraisal with respect to the Stockholder Actions.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables set forth information as of March 22, 2023,
regarding the beneficial ownership of our common stock (a) by each stockholder who is known by the Company to own beneficially in excess
of 5% of our outstanding common stock; (b) by each of the Company’s officers and directors; (c) and by the Company’s officers
and directors as a group. Except as otherwise indicated, all persons listed below have (i) sole voting power and investment power with
respect to their shares of common stock, except to the extent that authority is shared by spouses under applicable law, and (ii) record
and beneficial ownership with respect to their shares of stock. Unless otherwise identified, the address of the directors and officers
of the Company listed above is Unit 705B, 7th FL, New East Ocean Centre, 9 Science Museum Road, TST, KLN, Hong Kong.
| Title of Class | |
Name and Address of Beneficial Owner | |
Office, If Any | |
Amount & Nature of Beneficial Ownership (1) | | |
Percent of Class (2) | |
| Common Stock | |
Earnest Leung | |
CEO and Director | |
| 13,749,017 | | |
| 64.38 | |
| Common Stock | |
Shirley Cheng | |
CFO and director | |
| - | | |
| - | |
| Common Stock | |
Frederick Wong | |
Director | |
| - | | |
| - | |
| All Officers and Directors as a group | |
| |
| |
| 13,749,017 | | |
| | |
| Common Stock | |
Keywin Holdings Limited (3)
Office A, 18/F., Lucky Plaza, Nos. 315-321 Lockhart Road, Wanchai, Hong Kong
| |
5% Security Holder | |
| 44,707 (3) | | |
| 0.21 | |
| Common Stock | |
Sino Portfolio International Ltd(4)
P.O. Box 1239, Offshore Incorporations Centre, Victoria, Seychelles | |
5% Security Holder | |
| 1,835,753 | | |
| 8.60 | |
| Common Stock | |
Wong Yuk Chor | |
5% Security Holder | |
| 1,344,378 | | |
| 6.30 | |
| | |
| |
| |
| | | |
| | |
| Total Shares Owned by Persons Named above | |
| |
| |
| 16,973,855 | | |
| | |
______
(1) Beneficial ownership is determined in accordance with the rules
of the SEC and generally includes voting or investment power with respect to securities.
(2) A total of 21,355,899
shares of our common stock outstanding are considered to be outstanding pursuant to SEC Rule 13d-3(d)(1) as of March 22, 2023. For each
beneficial owner above, any options exercisable within 60 days have been included in the denominator.
(3) Dr.
Earnest Leung, its sole director, and Ms. Pui Chu Tang, its shareholder and Dr. Leung’s spouse, have voting and dispositive control
over the shares held by Keywin Holdings Limited.
(4) Ms. Angela Chan, its sole director, and Mrs.
Chen Yang Foo Oi, its shareholder, have voting and dispositive control over the shares held by Sino Portfolio International Ltd.
INTEREST OF CERTAIN PERSONS IN OR OPPOSITION TO MATTERS TO
BE ACTED UPON
No person who has been our officer or director, or to our knowledge,
any of their associates, has any substantial interest, direct or indirect, by security holdings or otherwise in any matter to be acted
upon. None of our directors opposed the actions to be taken by the Company.
ADDITIONAL INFORMATION
The Company files annual, quarterly and current reports and
other information with the SEC under the Exchange Act. You may obtain copies of this information by mail from the Public Reference Room
of the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may obtain information on the operation of the public reference
rooms by calling the SEC at 1-800-SEC-0330. The SEC also maintains an internet website that contains reports and other information about
issuers that file electronically with the SEC. The address of that website is www.sec.gov.
DELIVERY OF DOCUMENTS TO SECURITY HOLDERS SHARING AN ADDRESS
If hard copies of the materials are requested, we will send
only one Information Statement and other corporate mailings to stockholders who share a single address unless we received contrary instructions
from any stockholder at that address. This practice, known as “householding,” is designed to reduce our printing and postage
costs. However, the Company will deliver promptly upon written or oral request a separate copy of the Information Statement to a stockholder
at a shared address to which a single copy of the Information Statement was delivered. You may make such a written or oral request by
(a) sending a written notification stating (i) your name, (ii) your shared address and (iii) the address to which the Company should direct
the additional copy of the Information Statement, to the Company at Unit 705B, 7th FL, New East Ocean Centre, 9 Science Museum Road, TST,
KLN, Hong Kong.
If multiple Stockholders sharing an address have received one
copy of this Information Statement or any other corporate mailing and would prefer the Company to mail each stockholder a separate copy
of future mailings, you may mail notification to, or call the Company at, its principal executive offices. Additionally, if current stockholders
with a shared address received multiple copies of this Information Statement or other corporate mailings and would prefer the Company
to mail one copy of future mailings to stockholders at the shared address, notification of such request may also be made by mail or telephone
to the Company’s principal executive offices.
This Information Statement is provided to the holders of Common
Stock of the Company only for information purposes in connection with the Name Change, pursuant to and in accordance with Rule 14c-2 of
the Exchange Act. Please carefully read this Information Statement.
WHERE YOU CAN FIND MORE INFORMATION ABOUT US
Network CN Inc. is subject to the informational requirements
of the Securities Exchange Act of 1934, and in accordance therewith files reports and other information with the Securities and Exchange
Commission. Such reports and other information and a copy of the registration statement and the exhibits and schedules that were filed
with the registration statement may be inspected without charge at the public reference facilities maintained by the SEC in 100 F Street,
N.E., Washington, D.C. 20549. Statements made in this prospectus regarding the contents of any contract, agreement or other document that
is filed as an exhibit to the registration statement are not necessarily complete, and we refer you to the full text of the contract or
other document filed as an exhibit to the registration statement. Copies of all or any part of the registration statement may be obtained
from the SEC upon payment of the prescribed fee. Information regarding the operation of the public reference rooms may be obtained by
calling the SEC at 1-800-SEC-0330. The SEC maintains a web site that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the SEC. The address of the site is http://www.sec.gov.
| |
BY ORDER OF THE BOARD OF DIRECTORS |
| |
|
| |
|
| |
/s/ Earnest Leung |
|
| |
Earnest Leung, Chief Executive Officer |
|
| |
April 3, 2023 |
|
Exhibit A
CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION
OF
NETWORK CN INC.
(Pursuant to Section 242 of the Delaware General
Corporation Law)
NETWORK CN INC., a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:
FIRST: That the Amended and Restated Certificate
if Incorporation of the Corporation is amended by replacing the entire content of the Article thereof numbered “FOURTH” with
the following text:
“The
total number of shares of stock which the corporation is authorized to issue is 105,000,000 shares,
of which 100,000,000 shall be shares of common stock, par value $0.001 per share (the “Common
Stock”) and 5,000,000 shares shall be shares of preferred stock, par value $0.001 per share (the “Preferred Stock”).
The shares of Common Stock and Preferred Stock may be issued by the corporation from time to time as approved by the board of directors
of the corporation without the approval of the stockholders, except as otherwise provided by applicable law. The powers, designations,
preferences and relative, participating, optional and other rights of the Preferred Stock shall be provided for in a resolution or resolutions
adopted by the board of directors of the corporation and set forth in a certificate of designations executed, acknowledged and filed as
provided in Section 151(g) of the General Corporation Law of the State of Delaware, amending this Article Fourth.
SECOND: This Certificate of Amendment has been
duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware by the joint written
consent of all of the members of the Board of Directors of the Corporation and the holder of a majority of the Corporation’s issued
and outstanding common stock pursuant to Sections 141(f) and 228 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this
Certificate to be executed this ___ day of _____, 2023.
| |
By |
/s/ Earnest Leung |
| |
|
Earnest Leung |
| |
|
Chief Executive Officer |
Exhibit B
NETWORK CN INC.
2023 EQUITY INCENTIVE PLAN
ARTICLE ONE
GENERAL PROVISIONS
This Plan is intended to
promote the interests of Network CN Inc. (the “Corporation”), by providing eligible persons employed by or serving the Corporation
or any Subsidiary or Parent with the opportunity to acquire a proprietary interest, or otherwise increase their proprietary interest,
in the Corporation as an incentive for them to continue in such employ or service.
Capitalized terms herein
shall have the meanings assigned to such terms in the attached Appendix.
| 1.2.1 | The Plan shall be divided into two separate equity programs: |
| (a) | the Option Grant Program under which eligible persons may, at the discretion of the Plan Administrator,
be granted options to purchase shares of Common Stock, and |
| (b) | the Stock Issuance Program under which eligible persons may, at the discretion of the Plan Administrator,
be issued shares of Common Stock directly, either through the immediate purchase of such shares or as a bonus for services rendered the
Corporation (or any Parent or Subsidiary). |
| 1.2.2 | The provisions of Articles One and Four shall apply to both equity programs under the Plan and shall accordingly
govern the interests of all persons under the Plan. |
| 1.3 | ADMINISTRATION OF THE PLAN |
| 1.3.1 | The Board shall administer the Plan. However, any or all administrative functions otherwise exercisable
by the Board may be delegated to a Committee. Members of the Committee shall serve for such period of time as the Board may determine
and shall be subject to removal by the Board at any time. The Board may also at any time terminate the functions of the Committee and
reassume all powers and authority previously delegated to the Committee. The initial Committee and Plan Administrator shall be the Chief
Executive Officer of the Corporation; provided that he/she remains a director of the Corporation. |
| 1.3.2 | The Plan Administrator shall have full power and authority (subject to the provisions of the Plan) to
establish such rules and procedures as it may deem appropriate for proper administration of the Plan and to make such determinations under,
and issue such interpretations of, the Plan and any outstanding options or stock issued under the Plan as it may deem necessary or advisable.
Decisions of the Plan Administrator shall be final and binding on all parties who have an interest in the Plan or any option grant or
stock issued under the Plan. |
| 1.3.3 | The Plan Administrator shall have full authority to determine, (1) with respect to the grants made under
the Option Grant Program, which eligible persons are to receive such grants, the time or times when those grants are to be made, the number
of shares to be covered by each such grant, the status of the granted option as either an Incentive Option or a Non-Statutory Option,
the time or times when each option is to become exercisable, the vesting schedule (if any) applicable to the option shares and the maximum
term for which the option is to remain outstanding, and (2) with respect to stock issuances made under the Stock Issuance Program, which
eligible persons are to receive such issuances, the time or times when those issuances are to be made, the number of shares to be issued
to each Participant, the vesting schedule (if any) applicable to the issued shares and the consideration to be paid by the Participant
for such shares. Each option grant or stock issuance approved by the Plan Administrator shall be evidenced by the appropriate documentation. |
| 1.4.1 | The persons eligible to participate in the Plan are as follows: |
| (b) | members of the Board and the members of the board of directors of any Parent or Subsidiary; and |
| (c) | independent contractors who provide services to the Corporation (or any Parent or Subsidiary). |
| 1.5 | STOCK SUBJECT TO THE PLAN |
| 1.5.1 | The shares issuable under the Plan shall be shares of authorized but unissued or reacquired shares of
Common Stock. The maximum number of shares of Common Stock that may be issued and outstanding or subject to options outstanding under
the Plan shall not exceed Ten Million (10,000,000) shares. |
| 1.5.2 | Shares of Common Stock subject to outstanding options shall be available for subsequent issuance under
the Plan to the extent (1) the options expire or terminate for any reason prior to exercise in full or (2) the options are cancelled in
accordance with the cancellation and re-grant provisions of Article Two. Unvested Shares issued under the Plan and subsequently repurchased
by the Corporation, at a price per share not greater than the option exercise or direct issue price paid per share, pursuant to the Corporation’s
repurchase rights under the Plan shall be added back to the number of shares of Common Stock reserved for issuance under the Plan and
shall accordingly be available for reissuance through one or more subsequent option grants or direct stock issuances under the Plan. |
| 1.5.3 | Should any change be made to the Common Stock by reason of any stock split, stock dividend, reverse stock
split, recapitalization, combination of shares, exchange of shares or other change affecting the outstanding Common Stock as a class without
the Corporation’s receipt of consideration, appropriate adjustments shall be made to (1) the maximum number and/or class of securities
issuable under the Plan and (2) the number and/or class of securities and the exercise price per share in effect under each outstanding
option in order to prevent the dilution or enlargement of benefits thereunder. The adjustments determined by the Plan Administrator shall
be final and binding. In no event shall any such adjustments be made in connection with the conversion of one or more outstanding shares
of the Corporation’s preferred stock into shares of Common Stock. |
| 1.5.4 | The grant of options or the issuance of shares of Common Stock under the Plan shall in no way affect the
right of the Corporation to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or assets. |
ARTICLE TWO
OPTION GRANT PROGRAM
| 2.1.1 | Exercise. Each option shall be in such form and shall contain such terms and conditions
as the Board or Committee shall deem appropriate. All Options shall be separately designated Incentive Stock Options or Non-Statutory
Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates will be issued for shares
of Common Stock purchased on exercise of each type of Option. The provisions of separate Options need not be identical, but each Option
shall be subject to the terms and conditions of the Plan: |
| 2.1.2 | Exercise Price. The Plan Administrator shall fix the exercise price per share, subject to
any requirements of U.S. federal and state securities laws. However, with respect to Incentive Stock Options, (a) if the option is granted
to a 10% Stockholder, the exercise price per share must not be less than 110% of the Fair Market Value per share of Common Stock on the
date the option is granted, and (b) if the option is granted to an Optionee who is not a 10% Stockholder, the exercise price per share
shall not be less than 100% of the Fair Market Value per share of Common Stock on the date the option is granted. Notwithstanding the
foregoing, options may be granted with a per share exercise price other than as required above pursuant to a merger or other corporate
transaction. The exercise price shall become immediately due upon exercise of the option and shall, subject to the provisions of Section
4.1 and the documents evidencing the option, be payable in cash or check made payable to the Corporation. Should the Common Stock be registered
under Section 12 of the 1934 Act at the time the option is exercised, then the exercise price (and any applicable withholding taxes) may
also be paid as follows: |
| (a) | in shares of Common Stock held for the requisite period, if any, necessary to avoid a charge to the Corporation’s
earnings for financial reporting purposes and valued at Fair Market Value on the Exercise Date, or |
| (b) | to the extent the option is exercised for Vested Shares, through a special sale and remittance procedure
pursuant to which the Optionee shall concurrently provide irrevocable instructions (i) to a Corporation-designated brokerage firm to effect
the immediate sale of the purchased shares and remit to the Corporation, out of the sale proceeds available on the settlement date, sufficient
funds to cover the aggregate exercise price payable for the purchased shares plus all applicable income and employment taxes required
to be withheld by the Corporation by reason of such exercise and (ii) to the Corporation to deliver the certificates for the purchased
shares directly to such brokerage firm in order to complete the sale. |
Except to the extent such sale and remittance
procedure is utilized, payment of the exercise price for the purchased shares must be made on the Exercise Date.
| 2.1.3 | Exercise and Term of Options Each option shall be exercisable at such time or times, during
such period and for such number of shares as shall be determined by the Plan Administrator and set forth in the documents evidencing the
option grant. However, no Incentive Stock Option shall have a term in excess of ten years measured from the option grant date. |
| 2.1.4 | Effect of Termination of Service. |
| (a) | The following provisions shall govern the exercise of any options granted to the Optionee that remain
outstanding at the time the Optionee’s Service ceases: |
| (i) | Should the Optionee cease to remain in Service for any reason other than death, Disability or Misconduct,
then each option shall be exercisable for the number of shares subject to the option that were Vested Shares at the time the Optionee’s
Service ceased and shall remain exercisable until the close of business on the earlier of (i) the three month anniversary of the
date Optionee’s Service ceased or (ii) the expiration date of the option. |
| (ii) | Should the Optionee cease to remain in Service by reason of death or Disability, then each option shall
be exercisable for the number of shares subject to the option which were Vested Shares at the time of the Optionee’s Service ceased
and shall remain exercisable until the close of business on the earlier of (i) the twelve month anniversary of the date Optionee’s
Service ceased or (ii) expiration date of the option. |
| (iii) | No additional vesting will occur after the date the Optionee’s Service ceases, and the option shall
immediately terminate with respect to the Unvested Shares. Upon the expiration of any post-Service exercise period or (if earlier) upon
the expiration date of the term of the option, the option shall terminate with respect to the Vested Shares.
|
| (iv) | Should the Optionee’s Service be terminated for Misconduct or should the Optionee otherwise engage
in Misconduct, then each outstanding option granted to the Optionee shall terminate immediately with respect to all shares. |
| (b) | Understanding that there may be adverse tax and accounting consequences to doing so, the Plan Administrator
shall have the discretion, exercisable either at the time an option is granted or at any time while the option remains outstanding, to: |
| (i) | extend the period of time for which the option is to remain exercisable following the Optionee’s
cessation of Service for such period of time as the Plan Administrator shall deem appropriate, but in no event beyond the expiration of
the option, and/or |
| (ii) | permit the option to be exercised, during the applicable post-Service exercise period, not only with respect
to the number of Vested Shares for which such option is exercisable at the time of the Optionee’s cessation of Service but also
with respect to one or more additional installments in which the Optionee would have vested under the option had the Optionee continued
in Service. |
| 2.1.5 | Stockholder Rights. The holder of an option shall have no stockholder rights with respect
to the shares subject to the option until such person shall have exercised the option, paid the exercise price and become the recordholder
of the purchased shares. |
| 2.1.6 | Unvested Shares. The Plan Administrator shall have the discretion to grant options that
are exercisable for Unvested Shares. Should the Optionee’s Service cease while the shares issued upon the early exercise of the
Optionee’s option are still unvested, the Corporation shall have the right to repurchase, any or all of those Unvested Shares at
the lower of (1) the exercise price paid per share, or (2) the Fair Market Value per share on the date the Optionee’s Service
ceased. Once the Corporation exercises its repurchase right, the Optionee shall have no further stockholder rights with respect to those
shares. The terms upon which such repurchase right shall be exercisable (including the period and procedure for exercise and the appropriate
vesting schedule for the purchased shares) shall be established by the Plan Administrator and set forth in the document evidencing such
repurchase right. Any such repurchase must be made in accordance with applicable corporate law. The Plan Administrator may set the vesting
schedule, subject to applicable U.S. federal and state securities laws. |
| 2.1.7 | Limited Transferability of Options. An Incentive Option shall be exercisable only by the
Optionee during his or her lifetime and shall not be assignable or transferable other than by will or by the laws of inheritance following
the Optionee’s death. A Non-Statutory Option may be assigned in whole or in part during the Optionee’s lifetime to one or
more members of the Optionee’s family (as defined in Rule 701 promulgated by the Securities and Exchange Commission) or to a trust
established exclusively for one or more such family members or to the Optionee’s former spouse, to the extent such assignment is
in connection with the Optionee’s estate plan or pursuant to a domestic relations order. The terms applicable to the assigned portion
shall be the same as those in effect for the option immediately prior to such assignment and shall be set forth in such documents
issued to the assignee as the Plan Administrator may deem appropriate. |
The terms specified below
shall be applicable to all Incentive Options. Except as modified by the provisions of this Section 2.2, all the provisions of Articles
One, Two and Four shall be applicable to Incentive Options. Options that are specifically designated as Non-Statutory Options shall not
be subject to the terms of this Section 2.2.
| 2.2.1 | Eligibility. Incentive Options may only be granted to Employees. |
| 2.2.2 | Dollar Limitation. The aggregate Fair Market Value of the shares of Common Stock (determined
as of the respective date or dates of grant) for which one or more options granted to any Employee under the Plan (or any other option
plan of the Corporation or any Parent or Subsidiary) may for the first time become exercisable as Incentive Options during any one calendar
year shall not exceed $100,000. |
| 2.2.3 | Term of Option Granted to a 10% Stockholder. If any Employee to whom an Incentive Option
is granted is a 10% Stockholder, then the option term shall not exceed five years measured from the date the option is granted. |
| 2.3.1 | The shares subject to each option outstanding under the Plan at the time of a Change in Control shall
automatically become Vested Shares, and each such option shall, immediately prior to the effective date of the Change in Control, become
exercisable for all of the shares of Common Stock at the time subject to that option. However, the shares subject to an outstanding option
shall not become Vested Shares on an accelerated basis if and to the extent: (1) such option is assumed by the successor corporation
(or parent thereof) or otherwise continued in full force and effect pursuant to the terms of the Change in Control transaction or (2)
such option is to be replaced with a cash incentive program of the Corporation or any successor corporation which preserves the spread
existing on the Unvested Shares at the time of the Change in Control and provides for subsequent payout of that spread no later than the
time the Optionee would vest in those Unvested Shares or (3) the acceleration of such option is subject to other limitations imposed by
the Plan Administrator. |
| 2.3.2 | All outstanding repurchase rights under the Option Grant Program shall also terminate automatically, and
the shares of Common Stock subject to those terminated rights shall immediately become Vested Shares, in the event of any Change in Control,
except to the extent: (1) those repurchase rights are assigned to the successor corporation (or parent thereof) or otherwise continued
in effect pursuant to the terms of the Change in Control transaction, (2) the property (including cash payments) issued with respect to
Unvested Shares is to be held in escrow and released in accordance with the vesting schedule in effect for the Unvested Shares pursuant
to the Change in Control transaction or (3) such accelerated vesting is precluded by other limitations imposed by the Plan Administrator. |
| 2.3.3 | Immediately following the consummation of the Change in Control, all outstanding options shall terminate,
except to the extent assumed by the successor corporation (or parent thereof) or otherwise continued in effect pursuant to the terms of
the Change in Control transaction. |
| 2.3.4 | Each option that is assumed in connection with a Change in Control or otherwise continued in effect shall
be appropriately adjusted, immediately after such Change in Control, to apply to the number and class of securities which would have been
issuable to the Optionee in consummation of such Change in Control, had the option been exercised immediately prior to such Change in
Control. Appropriate adjustments shall also be made to (1) the number and class of securities available for issuance under the Plan following
the consummation of such Change in Control and (2) the exercise price payable per share under each outstanding option, provided
the aggregate exercise price payable for such securities shall remain the same. To the extent the holders of the Common Stock receive
cash consideration for their Common Stock in consummation of the Change in Control, the successor corporation may, in connection with
the assumption of the outstanding options under this Plan, substitute one or more shares of its own common stock with a fair market value
equivalent to the cash consideration paid per share of Common Stock in such Change in Control. |
| 2.3.5 | The Plan Administrator shall have the discretion, exercisable either at the time the option is granted
or at any time while the option remains outstanding, to structure one or more options so that the option shall become immediately exercisable
and some or all of the shares subject to those options shall automatically become Vested Shares (and some or all of the repurchase rights
of the Corporation with respect to the Unvested Shares subject to those options shall immediately terminate) upon the occurrence of a
Change in Control or another specified event, or the Optionee’s Involuntary Termination within a designated period following a specified
event. |
| 2.3.6 | In addition, the Plan Administrator may provide that one or more of the Corporation’s outstanding
repurchase rights with respect to some or all of the shares held by the Optionee at the time of a Change in Control or other specified
event, or the Optionee’s Involuntary Termination following a specified event, shall immediately terminate on an accelerated basis,
and the shares subject to those terminated rights shall become Vested Shares at that time. |
| 2.3.7 | The portion of any Incentive Option accelerated in connection with a Change in Control shall remain exercisable
as an Incentive Option only to the extent the applicable $100,000 limitation set forth in Section 2.2.2 is not exceeded. To the extent
such dollar limitation is exceeded, the accelerated portion of such option shall be exercisable as a Non-Statutory Option under the federal
tax laws. |
| 2.4 | CANCELLATION AND REGRANT OF OPTIONS |
The Plan Administrator shall
have the authority to effect, at any time and from time to time, with the consent of the affected option holders, the cancellation of
any or all outstanding options under the Plan and to grant in substitution therefor new options covering the same or different number
of shares of Common Stock.
ARTICLE THREE
STOCK ISSUANCE PROGRAM
| 3.1.1 | Stock Awards. Each stock bonus agreement and restricted stock purchase agreement shall be
in such form and shall contain such terms and conditions as the Board or Committee shall deem appropriate. The term and conditions as
the Board shall deem appropriate. The terms and conditions of such stock bonus and restricted stock purchase agreements may change from
time to time, and the terms and conditions of separate stock bonus or restricted stock purchase agreements need not be identical, but
each stock bonus and restricted stock purchase agreement shall be subject to the terms and conditions of the Plan. |
| (a) | The Plan Administrator shall fix the purchase price per share, subject to any requirements of U.S. federal
and state securities laws. |
| (b) | Shares of Common Stock may be issued under the Stock Issuance Program for any of the following items of
consideration which the Plan Administrator may deem appropriate in each individual instance: |
| (i) | cash or check made payable to the Corporation, |
| (ii) | past services rendered to the Corporation (or any Parent or Subsidiary), or |
| (iii) | a promissory note to the extent permitted by Section 4.1. |
| (a) | Shares of Common Stock issued under the Stock Issuance Program may, in the discretion of the Plan Administrator,
be Vested Shares or may vest in one or more installments over the Participant’s period of Service or upon attainment of specified
performance objectives. |
| (b) | Any new, substituted or additional securities or other property (including money paid other than as a
regular cash dividend) which the Participant may have the right to receive with respect to the Participant’s Unvested Shares by
reason of any stock dividend, stock split, reverse stock split, recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without the Corporation’s receipt of consideration shall be issued subject to
(a) the same vesting requirements applicable to the Participant’s Unvested Shares treated as if acquired on the same date as the
Unvested Shares and (b) such escrow arrangements as the Plan Administrator shall deem appropriate. |
| (c) | The Participant shall have full stockholder rights with respect to any shares of Common Stock issued to
the Participant under the Stock Issuance Program, whether or not the Participant’s interest in those shares is vested. Accordingly,
the Participant shall have the right to vote such shares and to receive any regular cash dividends paid on such shares. |
| (d) | Should the Participant cease to remain in Service while holding one or more Unvested Shares issued under
the Stock Issuance Program or should the performance objectives not be attained with respect to one or more such Unvested Shares, then
the Corporation shall have the right to repurchase the Unvested Shares at the lower of (a) the purchase price paid per share or
(b) the Fair Market Value per share on the date Participant’s Service ceased or the performance objective was not attained. The
terms upon which such repurchase right shall be exercisable shall be established by the Plan Administrator and set forth in the document
evidencing such repurchase right. Any repurchase must be made in compliance with applicable law. |
| (e) | The Plan Administrator may in its discretion waive the surrender and cancellation of one or more Unvested
Shares (or other assets attributable thereto) which would otherwise occur upon the non-completion of the vesting schedule applicable to
those shares. Such waiver shall result in the immediate vesting of the Participant’s interest in the shares of Common Stock as to
which the waiver applies. Such waiver may be effected at any time, whether before or after the Participant’s Service ceases or he
or she attains the applicable performance objectives. |
| 3.2.1 | Upon the occurrence of a Change in Control, all outstanding repurchase rights under the Stock Issuance
Program shall terminate automatically, and the shares of Common Stock subject to those terminated rights shall immediately become Vested
Shares, except to the extent: (1) those repurchase rights are assigned to the successor corporation (or parent thereof) or otherwise continued
in effect pursuant to the terms of the Change in Control transaction, (2) the property (including cash payments) issued with respect to
the Unvested Shares is held in escrow and released in accordance with the vesting schedule in effect for the Unvested Shares pursuant
to the terms of the Change in Control transaction, or (3) such accelerated vesting is precluded by other limitations imposed by the Plan
Administrator. |
| 3.2.2 | The Plan Administrator shall have the discretionary authority, exercisable either at the time the Unvested
Shares are issued or any time while the Corporation’s repurchase rights with respect to those shares remain outstanding, to provide
that those rights shall automatically terminate in whole or in part on an accelerated basis, and some or all of the shares of Common Stock
subject to those terminated rights shall immediately become Vested Shares, in the event of a Change of Control or other event or the Participant’s
Service is terminated by reason of an Involuntary Termination within a designated period following a Change in Control or any other specified
event. |
ARTICLE FOUR
MISCELLANEOUS
The Plan Administrator may
permit any Optionee or Participant to pay the option exercise price under the Option Grant Program or the purchase price for shares issued
under the Stock Issuance Program by delivering a full-recourse, interest bearing promissory note secured by the purchased shares. The
Plan Administrator, after considering the potential adverse tax and accounting consequences, shall set the remaining terms of the note.
In no event may the maximum credit available to the Optionee or Participant exceed the sum of (A) the aggregate option exercise price
or purchase price payable for the purchased shares (less the par value of those shares) plus (B) any applicable income and employment
tax liability incurred by the Optionee or the Participant in connection with the option exercise or share purchase.
Upon the grant of options
or shares, the Corporation may impose a right of first refusal with respect to any proposed disposition by the Optionee or Participant
(or any successor in interest) of any shares of Common Stock issued under the Plan. Such right of first refusal shall be exercisable and
lapse in accordance with the terms established by the Plan Administrator and set forth in the document evidencing such right.
Unvested Shares may, in the
Plan Administrator’s discretion, be held in escrow by the Corporation until the Unvested Shares vest or may be issued directly to
the Participant or Optionee with restrictive legends on the certificates evidencing the fact that the Participant or Optionee does not
have a vested right to them.
| 4.4 | EFFECTIVE DATE AND TERM OF PLAN |
| 4.4.1 | The Plan shall become effective when adopted by the Board, but no Incentive Stock Options granted under
the Plan may be exercised until the Corporation’s stockholders approve the Plan. Subject to such limitation, the Plan Administrator
may grant options and issue shares under the Plan at any time after the effective date of the Plan and before the date fixed herein for
termination of the Plan. |
| 4.4.2 | The Plan shall terminate upon the earlier of (1) the expiration of the ten year period measured
from the date the Plan is adopted by the Board or (2) termination by the Board. All options and unvested stock issuances outstanding at
the time of the termination of the Plan shall continue in effect in accordance with the provisions of the documents evidencing those options
or issuances. |
| 4.5 | AMENDMENT OR TERMINATION OF THE PLAN |
| 4.5.1 | The Board shall have complete and exclusive power and authority to amend or terminate the Plan or any
awards made thereunder in any or all respects. However, no such amendment or termination shall adversely affect the rights and obligations
with respect to options or unvested stock issuances at the time outstanding under the Plan unless the Optionee or the Participant consents
to such amendment or termination. In addition, certain amendments may require stockholder approval pursuant to applicable laws and regulations. |
| 4.5.2 | Although there may be adverse accounting consequences to doing so, options may be granted under the Option
Grant Program and shares may be issued under the Stock Issuance Program which are in each instance in excess of the number of shares of
Common Stock then available for issuance under the Plan, provided any excess shares actually issued under those programs shall be held
in escrow until there is obtained stockholder approval of an amendment sufficiently increasing the number of shares of Common Stock available
for issuance under the Plan. If such stockholder approval is not obtained within twelve months after the date the first such excess grants
or issuances are made, then (1) any unexercised options granted on the basis of such excess shares shall terminate and (2) the Corporation
shall promptly refund to the Optionees and the Participants the exercise or purchase price paid for any excess shares issued under
the Plan and held in escrow, together with interest (at the applicable Short Term Federal Rate) for the period the shares were held in
escrow, and such shares shall thereupon be automatically cancelled. |
Any cash proceeds received
by the Corporation from the sale of shares of Common Stock under the Plan shall be used for any corporate purpose.
The Corporation’s obligation
to deliver shares of Common Stock upon the exercise of any options granted under the Plan or upon the issuance or vesting of any shares
issued under the Plan shall be subject to the satisfaction of all applicable income and employment tax withholding requirements.
The implementation of the
Plan, the granting of any options under the Plan and the issuance of any shares of Common Stock (A) upon the exercise of any option or
(B) under the Stock Issuance Program shall be subject to the Corporation’s procurement of all approvals and permits required by
regulatory authorities having jurisdiction over the Plan, the options granted under it and the shares of Common Stock issued pursuant
to it.
| 4.9 | NO EMPLOYMENT OR SERVICE RIGHTS |
Nothing in the Plan shall
confer upon the Optionee or the Participant any right to continue in Service for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Corporation (or any Parent or Subsidiary employing or retaining such person) or of the
Optionee or the Participant, which rights are hereby expressly reserved by each, to terminate such person’s Service at any time
for any reason, with or without cause.
The Plan and all Agreements
shall be construed in accordance with and governed by the laws of the State of Delaware.
Adopted by the Board of Directors on March 22, 2023
APPENDIX
The following definitions
shall be in effect under the Plan:
A. Board
shall mean the Corporation’s Board of Directors.
B. Change in
Control shall mean a change in ownership or control of the Corporation effected through any of the following transactions:
(i) a stockholder-approved merger, consolidation or other reorganization in which securities representing more than 50% of the total combined
voting power of the Corporation’s outstanding securities are beneficially owned, directly or indirectly, by a person or persons
different from the person or persons who beneficially owned those securities immediately prior to such transaction;
(ii) a stockholder-approved sale, transfer or other disposition of all or substantially all of the Corporation’s assets; or
(iii) the acquisition, directly or indirectly, by any person or related group of persons (other than the Corporation or a person that
directly or indirectly controls, is controlled by, or is under common control with, the Corporation), of beneficial ownership (within
the meaning of Rule 13-d3 of the 1934 Act) of securities possessing more than 50% of the total combined voting power of the Corporation’s
outstanding securities from a person or persons other than the Corporation.
In no event shall any public
offering of the Corporation’s securities be deemed to constitute a Change in Control. In no event shall a merger of the Corporation’s
Parent with the Corporation constitute a Change in Control.
C. Code shall
mean the Internal Revenue Code of 1986, as amended.
D. Committee
shall mean a committee of one or more Board members appointed by the Board to exercise one or more administrative functions under the
Plan.
E. Common Stock
shall mean the Corporation’s common stock.
F. Corporation
shall mean Network CN Inc., a Delaware corporation, or the successor to all or substantially all of the assets or the voting stock of
Network CN Inc. which has assumed the Plan.
G. Disability
shall mean the inability of the Optionee or the Participant to engage in any substantial gainful activity by reason of any medically determinable
physical or mental impairment that is expected to result in death or has lasted or can be expected to last for a continuous period of
twelve months or more.
H. Employee
shall mean an individual who is in the employ of the Corporation (or any Parent or Subsidiary), subject to the control and direction of
the employer entity as to both the work to be performed and the manner and method of performance.
I. Exercise
Date shall mean the date on which the option has been exercised in accordance with the applicable option documentation.
J. Fair
Market Value per share of Common Stock on any relevant date shall be determined in accordance with the following provisions:
(i) If the Common
Stock is at the time listed on the Nasdaq Stock Market, then the Fair Market Value shall be the closing selling price per share of Common
Stock on the date in question, as such price is reported by the National Association of Securities Dealers on the Nasdaq Stock Market
and published in The Wall Street Journal. If there is no closing selling price for the Common Stock on the date in question, then
the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists.
(ii)
If the Common Stock is at the time listed on any stock exchange, then the Fair Market Value shall be the closing selling price per share
of Common Stock on the date in question on the stock exchange determined by the Plan Administrator to be the primary market for the Common
Stock, as such price is officially quoted in the composite tape of transactions on such exchange and published in The Wall Street Journal.
If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling
price on the last preceding date for which such quotation exists.
(iii)
If the sales prices of the Common Stock is at the time quoted in the over-the-counter market on the electronic bulletin board, the last
reported sales price or, if no such price is reported for such security, the average of the bid prices of all market makers for such security
as reported in the “pink sheets” by the National Quotation Bureau, Inc., in each case for such date or, is such date was not
a trading day for such security, on the next preceding date that was a trading day.
(iv) If
the Common Stock is at the time neither listed on any stock exchange or the Nasdaq Stock Market or quoted in the over-the-counter market
on the electronic bulletin board or in the “pink sheets” by the National Quotation Bureau, Inc., then the Fair Market Value
shall be determined by the Plan Administrator after taking into account such factors as the Plan Administrator shall deem appropriate
but shall be determined without regard to any restriction other than a restriction which, by its term will never lapse.
K. Incentive Option
shall mean an option that satisfies the requirements of Code Section 422.
L. Involuntary
Termination shall mean the termination of the Service of any individual which occurs by reason of:
(i) such
individual’s involuntary dismissal or discharge by the Corporation (or any Parent or Subsidiary) for reasons other than Misconduct,
or
(ii) such individual’s
voluntary resignation following (A) a change in his or her position with the Corporation (or any Parent or Subsidiary) which materially
reduces his or her duties and responsibilities, (B) a reduction in his or her base salary by more than 15%, unless the base salaries of
all similarly situated individuals are reduced by the Corporation or any Parent or Subsidiary employing the individual, or (C) a relocation
of such individual’s place of employment by more than fifty miles, provided and only if such change, reduction or relocation
is effected without the individual’s written consent.
M. Misconduct
shall mean the commission of any act of fraud, embezzlement or dishonesty by the Optionee or Participant, any unauthorized use or disclosure
by such person of confidential information or trade secrets of the Corporation (or any Parent or Subsidiary), or any other intentional
misconduct by such person adversely affecting the business or affairs of the Corporation (or any Parent or Subsidiary) in a material manner;
provided, however, that if the term or concept has been defined in an employment agreement between the Corporation and the
Optionee or Participant, then Misconduct shall have the definition set forth in such employment agreement. The foregoing definition shall
not in any way preclude or restrict the right of the Corporation (or any Parent or Subsidiary) to discharge or dismiss any Optionee, Participant
or other person in the Service of the Corporation (or any Parent or Subsidiary) for any other acts or omissions, but such other acts or
omissions shall not be deemed, for purposes of the Plan, to constitute grounds for termination for Misconduct.
N. 1934 Act
shall mean the Securities Exchange Act of 1934, as amended.
O. Non-Statutory Option
shall mean an option that does not satisfy the requirements of Code Section 422.
P. Option Grant Program
shall mean the option grant program in effect under the Plan.
Q. Optionee
shall mean any person to whom an option is granted under the Plan.
R. Parent shall
mean any corporation (other than the Corporation) in an unbroken chain of corporations ending with the Corporation, provided each corporation
in the unbroken chain (other than the Corporation) owns, at the time of the determination, stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in such chain.
S. Participant
shall mean any person who is issued shares of Common Stock under the Stock Issuance Program.
T. Plan shall
mean the Network CN Inc. 2007 Stock Option/Stock Issuance Plan, as set forth in this document.
U. Plan Administrator
shall mean either the Board or the Committee acting in its capacity as administrator of the Plan.
V. Service
shall mean the provision of services to the Corporation (or any Parent or Subsidiary) by a person in the capacity of an Employee, a member
of the board of directors or an independent contractor, except to the extent otherwise specifically provided in the documents evidencing
the option grant.
W. Stock Issuance Agreement
shall mean the agreement entered into by the Corporation and the Participant at the time of issuance of shares of Common Stock under the
Stock Issuance Program.
X. Stock Issuance Program
shall mean the stock issuance program in effect under the Plan.
Y. Subsidiary
shall mean any corporation (other than the Corporation) in an unbroken chain of corporations beginning with the Corporation, provided
each corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing 50%
or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.
Z. 10% Stockholder
shall mean the owner of stock (after taking into account the constructive ownership rules of Section 424(d) of the Code) possessing more
than 10% of the total combined voting power of all classes of stock of the Corporation (or any Parent or Subsidiary).
AA. Unvested Shares
shall mean shares of Common Stock which have not vested in accordance with the vesting schedule applicable to those shares or any special
vesting acceleration provisions and which are subject to the Corporation’s repurchase right.
BB. Vested Shares
shall mean shares of Common Stock which have vested in accordance with the vesting schedule applicable to those shares or any special
vesting acceleration provisions and which are no longer subject to the Corporation’s repurchase right.
19