~~The Board~~directors has fixed the close of business on ~~April~~ ~~30,~~ ~~2018~~August 13, 2020 as the record date ~~(the “Record Date”)~~ for ~~a determination of shareholders~~determining the stockholders entitled to notice of and to vote at ~~this~~the Annual Meeting orand at any adjournment ~~thereof.~~

~~For admission to the meeting, each shareholder may be asked to present valid picture identification, such as~~request a ~~driver’s license or passport, and proof of stock ownership as~~printed copy of the ~~Record Date, such as~~proxy materials. These “e-proxy” rules allow us to provide you with the ~~enclosed proxy card or a brokerage statement reflecting stock ownership. Cameras, recording devices~~information you need, while lowering the cost of delivery and ~~other electronic devices will not be permitted at~~reducing the ~~meeting.~~

If you do not plan on attending the meeting, please vote your shares via the internet, by phone or by signing and dating the enclosed proxy and return it in the business envelope provided. Your vote is very important.

Ifmeeting, we urge you to vote to ensure your vote is counted. You may still attend the meeting and vote your shares ~~are held~~if you have already voted by proxy. Only the latest vote you submit will be counted. For instructions on how to change your vote, see the “Can I change my vote or revoke my proxy?” section below.

4

Table of Contents

Beneficial Owner. If you hold your shares in “street name” as a ~~stock brokerage account, a~~beneficial owner of shares registered in the name of your broker, bank or ~~other holder~~nominee (“broker”), you must vote your shares in the manner prescribed by your broker. Your broker has enclosed or otherwise provided a voting instruction card for you to use in directing the broker how to vote your shares. Check the voting instruction card used by that organization to see if it offers internet or telephone voting.

Instead of directing your broker how to vote your shares, you may elect to attend the Annual Meeting and vote your shares during the meeting. Instructions on how to vote during the Annual Meeting webcast are posted at www.virtualshareholdermeeting.com/VRME2020. Votes submitted during the Annual Meeting must be received no later than the closing of the polls at the Annual Meeting.

How many votes do I have?

On each matter to be voted upon, you have one vote for each share of common stock you owned as of August 13, 2020, the record date for the Annual Meeting.

What is the quorum requirement?

A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if at least a majority of the outstanding shares entitled to vote are “present” at the meeting. As of the record date, there were 5,575,554 shares of our common stock issued and outstanding and entitled to vote.

If you are a stockholder of record, ~~you are considered~~your shares will be counted as “present” at the ~~“beneficial owner” of those shares held in “street name.”~~ meeting if:

·

You are present and vote at the meeting;

·

You have voted by internet or telephone; or

·

You have properly submitted a proxy card.

If your shares are held in street name, ~~these proxy materials have been forwarded to you by that organization. As the beneficial owner, you have the right to instruct this organization on how to vote your shares.~~

~~Record holders and beneficial owners may attend the Annual Meeting. If~~ your shares ~~are held in street name, you~~ will ~~need to bring a copy of a brokerage statement or other documentation reflecting your stock ownership~~be counted as ~~of the Record Date. Please see below for instructions on how to vote~~“present” at the ~~Annual Meeting~~meeting if your ~~shares are held in street name.~~

broker has voted on a discretionary item or your broker has otherwise voted based on your instructions.

Abstentions and broker non-votes on non-discretionary items will be counted towards the quorum requirement. If ~~you vote by Internet or phone, please DO NOT mail your proxy card.~~

~~To carry on the business of the Annual Meeting, we must have a quorum. A~~there is no quorum, ~~is present when~~ a majority of the ~~outstanding~~ shares ~~of stock~~present at the meeting and entitled to vote ~~as of the Record Date, are represented in person or by proxy.~~

Shares owned by the Company are not considered outstanding or considered to be present at the Annual Meeting. Broker non-votes (because there are non-routine matters presented at the Annual Meeting) and abstentions are counted as present for the purpose of determining the existence of a quorum.

If a quorum is not present to transact business at the Annual Meeting or if we do not receive sufficient votes in favor of the proposals by the date of the Annual Meeting, Norman Gardner, the Company’s Chairman of the Board, or Patrick White, the Company’s Chief Executive Officer are authorized tomay adjourn the ~~annual~~ meeting ~~until a quorum is present or represented.~~

~~If your shares are held in street name, you must instruct the organization who holds your shares how~~ to vote your shares. If you do not provide voting instructions, your shares will not be voted on any non-routine proposal. This vote is called a “broker non-vote.” Broker non-votes do not count as a vote “FOR” or “AGAINST” any of the Proposals.

If you are the shareholder of record, and you sign and return a proxy card without giving specific voting instructions, then the proxy holders will vote your shares in the manner recommended by the Board on all matters presented in this Proxy Statement and as the proxy holders may determine in their discretion with respect to any other matters properly presented for a vote at the meeting. If your shares are held in street name and you do not provide specific voting instructions to the organization that holds your shares, the organization may generally vote at its discretion on routine matters, but not on non-routine matters. If you sign your vote instruction form but do not provide instructions on how your broker should vote, your broker will vote your shares as recommended by the Board on any non-routine matter. See the note below and the following question and answer.

Abstentions only have an effect on the outcome of any matter being voted on that requires the approval based on the Company’s total voting stock outstanding. On matters where abstentions have an effect, Abstentions will reduce the number of affirmative votes received, but not the required amount needed for the proposal to pass.

In voting by proxy with regard to the election of directors, you may vote in favor of all nominees, withhold your votes as to all nominees, or withhold your votes as to specific nominees. With regard to the remaining proposals, you may vote in favor of each proposal or against each proposal, or in favor of some proposals and against others, or you may abstain from voting on any of these proposals. You should specify your respective choices on the accompanying proxy card or your vote instruction form.

All of the expenses involved in preparing, assembling and mailing these proxy materials and all costs of soliciting proxies will be paid by the Company. In addition to the solicitation by mail, proxies may be solicited by the Company’s officers and regular employees by telephone or in person. Such persons will receive no compensation for their services other than their regular salaries. Arrangements will also be made with brokerage houses and other custodians, nominees and fiduciaries to forward solicitation materials to the beneficial owners of the shares held of record by such persons, and we may reimburse such persons for reasonable out of pocket expenses incurred by them in so doing. We may hire an independent proxy solicitation firm.

Other than the items of business described in this Proxy Statement, we are not aware of any other business to be acted upon at the Annual Meeting. If you submit a signed proxy card, the persons named as proxy holders will have the discretion to vote your shares on any additional matters properly presented for a vote at the Annual Meeting. If for any reason any of the Company’s nominees are not available as a candidate for director, the persons named as proxy holders will vote your proxy for such other candidate or candidates as may be nominated by the Board.

Record holders who have the same address and last name will receive only one copy of their proxy materials, unless we are notified that one or more of these record holders wishes to continue receiving individual copies. This procedure will reduce the Company’s printing costs and postage fees. Shareholders who participate in householding will continue to receive separate proxy cards.

If you are eligible for householding, but you and other record holders with whom you share an address, receive multiple copies of these proxy materials, or if you hold VerifyMe stock in more than one account, and in either case you wish to receive only a single copy of each of these documents for your household, please contact the Company’s Corporate Secretary at: VerifyMe, Inc., ~~Clinton Square, 75 S. Clinton Ave, Suite 510 Rochester, NY 14604~~ ~~Attention: Corporate Secretary.~~

If you participate in householding and wish to receive a separate copy of these proxy materials, or if you do not wish to continue to participate in householding and prefer to receive separate copies of these documents in the future, please contact the Company’s Corporate Secretary as indicated above. Beneficial owners can request information about householding from their brokers, banks or other holders of record.

~~Appraisal rights are not available to VerifyMe shareholders with any of the proposals brought before the Annual Meeting.~~

No business may be transacted at the 2019 Annual Meeting of shareholders (the “2019 Annual Meeting”) other than business that is: (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board (or any duly authorized committee thereof); (b) otherwise properly brought before the meeting by or at the direction of the Board (or any duly authorized committee thereof); or (c) in the case of an annual meeting, otherwise properly brought before the meeting by any shareholder of the Company, (i) who is a shareholder of record on the date of the giving of the notice and on the record date for the determination of shareholders entitled to vote at such meeting, and (ii) who complies with the notice procedures set forth in the Company’s Bylaws.

Proposals by shareholders and persons nominated for election as directors by shareholders shall be considered at the 2019 Annual Meeting only if advance notice thereof has been timely given by the shareholder and such proposals or nominations are otherwise proper for consideration under applicable law, the Company’s Amended and Restated Articles of Incorporation, and the Company’s Amended and Restated Bylaws (the “Bylaws”). Notice of any proposal to be presented by any shareholder or of the name of any person to be nominated by any shareholder for election as a director of the Company at any meeting of shareholders shall be delivered to the secretary of the Company at its principal office not less than 60 nor more than 90 days prior to the day of the meeting; provided, however, that if the date of the meeting is first publicly announced or disclosed (in a public filing or otherwise) less than 70 days prior to the day of the meeting, such advance notice shall be given not more than 10 days after such date is first so announced or disclosed. Public notice shall be deemed to have been given more than 70 days in advance of the 2019 Annual Meeting if the Company shall haveBoard of Directors of GP Strategies Corporation (NYSE:GPX) since August 2018. He previously disclosed, in the Bylaws, as amended, or otherwise, that the annual meeting in each year is to be held on a determinable date, unless and until the Board determines to hold the meeting on a different date.

~~A nomination or other proposal will be disregarded if it does not comply with the above procedures. All proposals and nominations should be sent to VerifyMe, Inc.,~~ ~~Clinton Square, 75 S. Clinton Ave, Suite 510 Rochester, NY 14604~~ ~~Attention: Corporate Secretary.~~

~~We reserve the right to amend the Company’s Bylaws and any change will apply to the 2019 Annual Meeting unless otherwise specified in the amendment.~~

~~Except in the election to the Company’s nominees, none of the officers or directors have any interest in any of the matters to be acted upon at the Annual Meeting.~~

We currently have eight directors. The terms of all of the Company’s current directors will expire at this Annual Meeting. We have adopted a resolution reducing the number of directors to seven, effective with the commencement of the opening of polls to elect directors. The Board proposes the election of the following nominees as directors:

All of the nominees listed above are currently directors of the Company. Additionally, all of the nominees have been nominated and have agreed to serve if elected. One current director has advised us that he is not a candidate for re-election. The seven persons who receive the most votes cast will be elected and will serve as directors until the next Annual Meeting. If a nominee becomes unavailable for election before this Annual Meeting, the Board can name a substitute nominee and proxies will be voted for such substitute nominee unless an instruction to the contrary is written on the proxy card. Furthermore, we may appoint an additional person as a nominee before the Annual Meeting. ~~The principal occupation and certain other information about the nominees and the Company’s executive officers are set forth on the following pages.~~

The Board oversees, counsels, and directs management in regard to the long-term interests of the Company and its shareholders. The Board’s responsibilities include establishing broad corporate policies and reviewing the overall performance of the Company. The Board is not involved in the operating details on a day-to-day basis. In May 2017, the Board formed an Executive Committee of three Directors —Messrs. Gardner, Goldberg and Schafran— which has all of the powers of the Board and actively interacts with management.

The Board and its committees meet throughout the year and act by written consent from time to time as appropriate. The Board delegates various responsibilities and authority to its Board committees. On September 5, 2017, the Board established three committees: the Audit Committee, the Compensation Committee, and the Governance and Nominating Committee which function in addition to the Executive Committee.

~~The following table identifies the current committee members:~~

~~With~~

The listing standards of The Nasdaq Stock Market LLC (“Nasdaq”) require that a majority of our board of directors be independent. No director will qualify as independent unless the ~~exception~~board affirmatively determines that the director has no relationship with us that would interfere with the exercise of ~~Mr. White~~independent judgment in carrying out the responsibilities of a director. Based upon the Nasdaq listing standards and ~~Mr. Gardner,~~applicable SEC rules and regulations, our ~~Board~~board has determined that ~~all of our present directors~~Chris Gardner, Marshall Geller, Howard Goldberg, Scott Greenberg and Arthur Laffer are independent, and Laurence Blickman and Carl Berg, who resigned in ~~accordance with standards under~~February 2019, and Eugene Robin, who resigned in September 2019, were independent during the ~~Nasdaq Listing Rules.~~

~~Our Board determined that as a result~~period of ~~being a~~their service. Norman Gardner is not considered independent because he is our consultant, ~~to the Company, Mr. Gardner~~and Patrick White, President and Chief Executive Officer, is not an independent because he is our employee.

Board Leadership Structure

We separate the roles of Chief Executive Officer and Chairman of the board because we believe that our corporate governance is most effective when these positions are not held by the same person. The board recognizes the differences between the two roles and believes that separating them allows each person to focus on his individual responsibilities. Under this leadership structure, our Chief Executive Officer can focus his attention on generating sales, overseeing sales and marketing, and managing the day-to-day company operations, while our Chairman can focus his attention on board responsibilities.

Although the board has not adopted a formal policy regarding the separation of the roles of the Chairman and the Chief Executive Officer, we believe that having separate positions is the appropriate leadership structure for us at this time. Depending on the circumstances, other leadership models, such as combining the role of Chairman with the role of Chief Executive Officer, might be appropriate. Accordingly, our board of directors intends to periodically review our leadership structure.

Lead Independent Director

The board of directors has appointed a lead independent director, currently Howard Goldberg, in order to promote independent leadership of the board. The lead independent director presides over the executive sessions of the independent directors, chairs board meetings in the Chairman’s absence, and is available to engage directly with major stockholders where appropriate. The guidance and direction provided by the lead independent director reinforce the board’s independent oversight of management and contribute to communication among members of the board of directors.

Board Committees

The board of directors has established an Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee. In 2018, the board also established a Finance and Uplisting Committee whose members consisted of Messrs. Geller (Chair), Goldberg and Laffer, which was dissolved on July 14, 2020. The table below shows the number of meetings held during fiscal year 2019 and the names of the directors who served during fiscal year 2019 and currently serving on each committee.

13

Table of Contents

Committee Name	Number of Meetings Held	Committee Members
Audit	6	Mr. Blickman ⁽¹⁾ Mr. Geller Mr. Goldberg	Mr. Greenberg ⁽²⁾ Mr. Robin ⁽³⁾
Compensation	2	Mr. Berg ⁽¹⁾ Mr. C. Gardner ⁽⁴⁾ Mr. Geller ⁽⁴⁾	Mr. Goldberg Mr. Greenberg Mr. Laffer ⁽²⁾
Nominating and Corporate Governance Committee	1	Mr. Blickman ⁽¹⁾ Mr. C. Gardner ⁽²⁾	Mr. Geller Mr. Goldberg

⁽¹⁾ Messrs. Blickman and Berg served as directors and members of the committee until February 2019.

⁽²⁾ Chair

⁽³⁾ Mr. Robin served as a director and member of the Audit Committee until September 2019.

⁽⁴⁾The director served as a member of the committee until July 2020.

In addition on July 14, 2020, the board established an Executive Committee and a Mergers & Acquisitions Committee. The current members of the Executive Committee are Messrs. N. Gardner (Chair), Geller and ~~because he is an employee, Mr. White would not be an independent director~~Goldberg. The current members of the Mergers & Acquisitions Committee are Messrs. Geller (Chair), Goldberg and Greenberg.

Each committee acts pursuant to a written charter adopted by our board of directors. The current charters for each board committee are available on our website, www.verifyme.com under the ~~Nasdaq Listing Rules.~~

~~Our Board~~accordance with Section 3(a)(58)(A) of the Exchange Act. The board of directors has determined that each member of ~~Harvey Eisen~~the audit committee meets the independence and ~~Larry Schafran is qualified~~financial literacy requirements applicable to audit committee members under the Nasdaq listing standards and SEC rules. The board of directors has further determined that Mr. Greenberg qualifies as an ~~Audit~~“audit committee financial expert” in accordance with the applicable rules and regulations of the SEC.

Compensation Committee ~~Financial Expert, as that term is defined~~

The Compensation Committee reviews, recommends and approves salaries and other compensation of the Company’s executive officers, and administers the Company’s equity incentive plans (including reviewing, recommending and approving stock option and other equity incentive grants to executive officers).

14

Table of Contents

The Compensation Committee meets in executive session to determine the compensation of the Chief Executive Officer of the Company. In determining the amount, form, and terms of such compensation, the Committee considers the annual performance evaluation of the Chief Executive Officer conducted by the ~~rules~~board in light of our goals and objectives relevant to Chief Executive Officer compensation, competitive market data pertaining to Chief Executive Officer compensation at comparable companies, and such other factors as it deems relevant, and is guided by, and seeks to promote, the best interests of the ~~SEC, in compliance with the Sarbanes-Oxley Act of 2002.~~

~~The function of~~Company and its stockholders.

In addition, subject to existing agreements, the Compensation Committee ~~which currently consists of Laurence Blickman~~determines the salaries, bonuses, and ~~Marshall Geller, is~~other matters relating to ~~review VerifyMe’s~~ compensation of ~~our~~the executive officers ~~and make recommendations to~~of the Company ~~regarding compensation. The Compensation Committee has the power to set~~using similar parameters. It sets performance targets for determining periodic bonuses payable to executive ~~officers~~officers. It also reviews and ~~may review~~makes recommendations to the board regarding executive and ~~make~~employee compensation and benefit plans and programs generally, including employee bonus and retirement plans and programs (except to the extent specifically delegated to a board appointed committee with authority to administer a particular plan). In addition, the Compensation Committee approves the compensation of non-employee directors and reports it to the full board.

The Compensation Committee also reviews and makes recommendations with respect to ~~shareholder~~stockholder proposals related to compensation matters. ~~Additionally,~~The committee administers the Company’s equity incentive plans, including the review and grant of stock options and other equity incentive grants to executive officers and other employees and consultants.

The Compensation Committee may, in its sole discretion and at the Company’s cost, retain or obtain the advice of a compensation consultant, legal counsel or other adviser. The Compensation Committee is directly responsible for the appointment, compensation and oversight of the work of any compensation consultant, legal counsel and other adviser retained by the committee.

The board of directors has determined that each member of the Compensation Committee meets the independence requirements applicable to compensation committee members under the Nasdaq listing standards.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee identifies individuals qualified to become members of the board, consistent with criteria approved by the board; recommends to the board the director nominees for the next annual meeting of stockholders or special meeting of stockholders at which directors are to be elected; recommends to the board candidates to fill any vacancies on the board; develops, recommends to the board, and reviews the corporate governance guidelines applicable to the Company; and oversees the evaluation of the board and management.

In recommending director nominees for the next annual meeting of stockholders, the Nominating and Corporate Governance Committee ensures the Company complies with its contractual obligations, if any, governing the nomination of directors. It considers and recruits candidates to fill positions on the board, including as a result of the removal, resignation or retirement of any director, an increase in the size of the board or otherwise. The committee conducts, subject to applicable law, any and all inquiries into the background and qualifications of any candidate for the board and such candidate’s compliance with the independence and other qualification requirements established by the committee. The committee also recommends candidates to fill positions on committees of the board.

15

Table of Contents

In selecting and recommending candidates for election to the board or appointment to any committee of the board, the committee does not believe that it is ~~responsible for administering~~appropriate to select nominees through mechanical application of specified criteria. Rather, the committee shall consider such factors at it deems appropriate, including, without limitation, the following: personal and professional integrity, ethics and values; experience in corporate management, such as serving as an officer or former officer of a publicly-held company; experience in the Company’s ~~Equity Incentive Plans.~~ industry; experience as a board member of another publicly-held company; diversity of expertise and experience in substantive matters pertaining to the Company’s business relative to other directors of the Company; practical and mature business judgment; and composition of the board (including its size and structure).

The ~~Compensation~~committee develops and recommends to the board a policy regarding the consideration of director candidates recommended by the Company’s stockholders and procedures for submission by stockholders of director nominee recommendations.

In appropriate circumstances, the committee, in its discretion, will consider and may recommend the removal of a director, in accordance with the applicable provisions of our Amended and Restated Articles of Incorporation and Bylaws. If we are subject to a binding obligation that requires director removal structure inconsistent with the foregoing, then the removal of a director shall be governed by such instrument.

The committee oversees the evaluation of the board and management. It also develops and recommends to the board a set of corporate governance guidelines applicable to us, which the committee shall periodically review and revise as appropriate. In discharging its oversight role, the committee is empowered to investigate any matter brought to its attention.

The board of directors has determined that each member of the Nominating and Corporate Governance Committee ~~held no~~meets the director independence requirements of the Nasdaq listing standards.

Executive Committee

The Executive Committee acts on behalf of the board between regularly scheduled board meetings, ~~in 2017.~~

~~The Governance and Nominating Committee, which consists~~the powers of ~~Laurence Blickman, Marshall Geller and Howard Goldberg, is required to review~~the board in the management of the ~~Company~~business, affairs and ~~make recommendations~~property of our Company.

Mergers & Acquisitions Committee

The Mergers & Acquisitions Committee is empowered to ~~the Board concerning the Company’s corporate governance~~review and ~~nominate members of the Board.~~ ~~The Governance~~assess, and ~~Nominating Committee held no meetings in 2017.~~

~~For 2017, the~~ in reviewing and assessing, potential mergers, acquisitions, joint ventures and strategic investments.

Board ~~had four meetings. There were no directors who attended fewer than 75 percent of the total meetings or committee meetings of the Board for 2017.~~

Diversity

While we do not have a formal policy on diversity, the ~~Board~~board considers diversity to include the skill set, background, reputation, type and length of business experience of the ~~Board~~board members as well as a particular nominee’s contributions to that mix. The ~~Board~~board believes that diversity brings a variety of ideas, judgments and considerations that benefit the Company and its ~~shareholders.~~stockholders. Although there are many other factors, the ~~Board~~board seeks individuals with experience on operating and growing businesses.

~~Mr.~~

Director Attendance at Annual Meetings

Although the Company does not have a policy regarding director attendance of our annual meeting of stockholders, board members are encouraged to attend. Patrick White and Norman Gardner ~~serves as~~attended the ~~Chairman~~2019 annual meeting of stockholders.

16

Table of Contents

Role of the Board ~~and actively interfaces with management, the Board and counsel on a daily basis. We believe that this Board leadership structure is the most appropriate for the Company.~~

The ~~Board~~board has adopted a Code of Business Conduct and Ethics (the “Code of Ethics”) that applies to all of ~~the Company’s~~our employees, including ~~the Company’s~~our Chief Executive Officer and Chief Financial Officer. Although not required, the Code of Ethics also applies to ~~the Company’s~~our directors. The Code of Ethics provides written standards that we believe are reasonably designed to deter wrongdoing and promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships, full, fair, accurate, timely and understandable disclosure and compliance with laws, rules and regulations and the prompt reporting of illegal or unethical ~~behavior.~~ behavior, and accountability for adherence to the Code of Ethics. The ~~code~~Code of ~~business conduct and ethics~~Ethics is available on ~~the Company’s~~our website at ~~http://~~www.verifyme.com/~~code-conduct~~code-of-conduct. The information contained on our website is not a part of this proxy statement.

Anti-Hedging Policy

We have a no hedging policy that prohibits directors, officers and employees from engaging in transactions that hedge or offset any decrease in the ~~Company~~ ~~will provide a copy, without charge,~~market value of equity securities granted as compensation.

Stockholder Communications

Stockholders may send correspondence by mail to ~~anyone that requests one~~the full board of directors or to individual directors. Stockholders should address correspondence to the board of directors or individual board members in ~~writing to~~care of: VerifyMe, Inc.,~~Clinton Square,~~ 75 S. Clinton Ave, Suite 510, Rochester, NYNew York 14604, Attention: Corporate Secretary.

~~Section 16(a)~~

All stockholder correspondence will be compiled by our Corporate Secretary and forwarded as appropriate. In general, correspondence relating to corporate governance issues, long-term corporate strategy, or similar substantive matters will be forwarded to the board of directors, the individual director, one of the ~~Securities Exchange Act~~aforementioned committees of ~~1934 (the “Exchange Act”) requires~~the board, or a committee member for review. Correspondence relating to ordinary business affairs or those matters more appropriately addressed by our officers or their designees will be forwarded to such persons accordingly.

17

Table of Contents

MANAGEMENT AND EXECUTIVE OFFICERS

We are currently served by four executive officers, Mr. White, Ms. Gezerlis, Mr. Goldstein and Mr. Fliderman.

Patrick White, age 67, is our President and Chief Executive Officer. Additional information about Mr. White can be found under “Proposal One: Election of Directors.”

Margaret Gezerlis, age 39, has been our Chief Financial Officer since May 2018. In November 2018, Ms. Gezerlis became our employee. Ms. Gezerlis was previously an employee of the CFO Squad LLC from February 2018 until November 2018, where she worked as an independent contractor for the Company. Previously, Ms. Gezerlis was a Financial Reporting Manager at Bankrate.com from March 2017 until February 2018. Prior to her position at Bankrate.com, Ms. Gezerlis was a financial reporting manager for Westport Fuel Systems Inc. (Nasdaq:WPRT), previously Fuel Systems Solutions, Inc. (Nasdaq:FSYS), from September 2015 to November 2016, a senior financial analyst from March 2014 to September 2015 and a performance services manager for Workiva Inc. (NYSE:WK) from June 2012 to March 2014. Ms. Gezerlis holds an international accounting qualification from the Association of Chartered Certified Accountants.

Keith Goldstein, age 52, has served as the acting Chief Operating Officer of the Company since September 2017. Mr. Goldstein is the manager and principal of POC Advisory Group, LLC, which provides business advisory services, since May 2017. We contract with POC Advisory Group, LLC for Mr. Goldstein’s services. Mr. Goldstein was the Chief Executive Officer of Infinacom, a provider of biometric based security solutions, from April 2018 until March 2019. He was previously Chief Executive Officer of ABCorp., North America, a supplier of secure payment, retail and identification cards, vital record and transaction documents, systems and services to governments and financial institutions, from 2011 until April 2017, and has provided professional sales and advisory services to ABCorp. since April 2017.

Sandy Fliderman, age 43, has been the Company’s ~~directors,~~Chief Technology Officer since 2015. Mr. Fliderman is the President and Co-Founder of Industry FinTech Inc. since February 1, 2017. Prior to his current role with the Company, Mr. Fliderman was the Chief Information Officer at VEEDIMS, LLC, an Internet of Things technology company specializing in data collection and distribution in the aerospace and marine industries. In addition IT/IS, R&D and Operations, Mr. Fliderman lead the charge for VEEDIMS, LLC to attain the AS9100 and ISO9001:2008 certifications needed to do business in the aerospace markets. Mr. Fliderman started his career working on the trading floor at JPMorgan Chase & Co. (NYSE:JPM) for a number of years before founding the NYC based digital creative agency called Zaah where he was Chief Technology Officer and Founder for almost 15 years. Mr. Fliderman was co-inventor on a number of patents and created the technology behind VerifyMe.

18

Table of Contents

EXECUTIVE COMPENSATION

This proxy statement contains information about the compensation earned and paid to our named executive officers during fiscal year 2019 and ~~persons who own more than 10% of the Company’s common stock to file initial reports of ownership and changes~~fiscal year ended December 31, 2018 (“fiscal year 2018”). For fiscal year 2019, in ~~ownership of the Company’s common stock and other equity securities~~accordance with the ~~SEC. These individuals are required by the~~executive compensation disclosure rules and regulations of the SEC, ~~to furnish us with copies of all Section 16(a) forms they file. Based solely on a review of the copies of the forms furnished to us,~~ we ~~believe~~determined that the following ~~Company~~ officers directors and 10% beneficial owners failed to comply with Section 16(a) as of the end of fiscal year 2017: Laurence Blickman (four transactions); Marshall Geller (two transactions ); Larry Schafran (four transactions); Claudio Ballard (one transaction) and Paul Klapper, one of the Company’s former directors (11 transactions).were our named executive officers:

·

Patrick White, our President and Chief Executive Officer;

·

Keith Goldstein, our acting Chief Operating Officer; and

·

Margaret Gezerlis, our Chief Financial Officer.

Summary Compensation Table

Name and Principal Position	Year	Salary ($)			Stock Awards ($)			Option Awards ($) ⁽¹⁾		All Other Compensation ($) ⁽²⁾		Total Compensation ($)
Patrick White	2019		200,000	⁽³⁾		15,290	⁽⁴⁾		89,075		14,400		318,765
CEO	2018		200,000	⁽³⁾		16,240	⁽⁴⁾		48,466		14,400		279,106

Keith Goldstein ⁽⁵⁾	2019		170,000			--			163,286		14,400		348,307
Acting COO	2018		145,000			--			238,810		14,400		431,145

Margaret Gezerlis ⁽⁶⁾	2019		84,000			--			27,280		12,000		123,280
CFO	2018		10,500			--			4,032		10,000		24,532

(1)

Represents the grant date fair value of the option award, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification (“ASC”) 718, “Compensation – Stock Compensation,” or ASC 718. The assumptions used in calculating the grant date fair value of the option awards are set forth in Note 1 of the financial statements to our Form 10-K for the year ended December 31, 2019.

(2)

The amounts shown in this column reflect amounts paid by us to or on behalf of each named executive officer for medical insurance reimbursement.

(3)

Pursuant to Mr. White’s Employment Agreement, $50,000 of his annual salary was deferred for each year of the two-year term beginning August 15, 2017, for a total deferred salary of $100,000. This amount was subsequently deferred for another year and was to become due on August 15, 2020. See “Employment and Consulting Agreements with Named Executive Officers” below.

(4)

Represents the aggregate grant date fair value of the restricted stock awards granted to Mr. White for his service as a director, calculated in accordance with ASC 718. The assumptions used in calculating the grant date fair value of the restricted stock awards are set forth in Note 1 to our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019.

(5)

We have a consulting agreement with POC Advisory Group, LLC, of which Mr. Goldstein is the managing member, pursuant to which Mr. Goldstein serves as the Company’s acting Chief Operating Officer. The Company compensates POC Advisory Group, LLC for Mr. Goldstein’s time at a rate of $14,500 per month.

19

Table of Contents

~~Communication with the Company’s Board~~

~~Although VerifyMe does not have a formal policy regarding communications with the Board, shareholders may communicate with the Board by writing to us at VerifyMe, Inc.,~~ ~~Clinton Square, 75 S. Clinton Ave, Suite 510 Rochester, NY 14604~~ ~~Attention: Corporate Secretary. Shareholders who would like their submission directed to a member of the Board may so specify, and the communication will be forwarded, as appropriate.~~

~~Related person transactions~~

~~In addition~~

(6)

Ms. Gezerlis was appointed Chief Financial Officer on May 17, 2018. On November 15, 2018, Ms. Gezerlis became a part-time employee of the Company. For 2018, the amounts paid to Ms. Gezerlis also include her consulting fees.

Employment and Consulting Agreements ~~disclosed elsewhere in this Proxy Statement, we engaged in a number~~with Named Executive Officers

Patrick White - Chief Executive Officer

The Company entered into an Employment Agreement, dated as of ~~transactions~~August 15, 2017, with ~~our executive officers and directors.~~

~~In August 2017,~~Patrick White, the Chief Executive Officer of the Company, ~~issued Norman Gardner 10,000,000 stock options, exercisable at $0.07 per share,~~with an annual salary of $200,000. Mr. White agreed to defer $50,000 each year until August 15, 2019 in ~~accordance with the terms of his Consulting Agreement.~~ ~~In January 2018, Norman Gardner made a cashless exercise of options related~~order to ~~services in 2017, amounting to an issuance of 4,027,778 shares.~~

In February and March 2017, in connection with loans made to the Company, Laurence Blickman lent the Company $276,000 and was issued notes and a total of 6,125,000 warrants, exercisable at $0.07, to purchase shares ofimprove the Company’s ~~common stock. The notes were subsequently converted~~liquidity. On August 13, 2019, Mr. White entered into an Amendment to his Employment Agreement, extending it for one year at the same ~~consideration as~~base annual salary of $200,000 and deferring the $100,000 he was owed and $50,000 of his current salary until August 15, 2020. In connection with the Amendment, the board granted Mr. White immediately vesting incentive stock options under the Company’s ~~private placement and the warrants were cancelled prior to exercise. As a result he received 4,022,611~~2017 Equity Incentive Plan (the “2017 Plan”) for 10,000 shares of common stock that expires five-years from the date of grant with an exercise price of $7.00 per share. On April 16, 2020, we awarded Mr. White a restricted stock award of 37,500 shares of our common stock in lieu of the $150,000 in deferred salary. The restricted stock award vests in full one-year from the date of grant, subject to Mr. White’s continued services as an officer and employee on the ~~same number~~vesting date. In the event of ~~$0.15 five-year warrants.~~

Mr. White’s termination without cause, Mr. White is entitled to receive any unpaid salary and expenses, a payment equal to 12 months of his salary, and a continuation of benefits for six months. In connection with ~~the conversion~~his 2017 Employment Agreement and a Consulting Agreement, dated as of ~~the Company’s Series D Convertible Preferred Stock and warrants the Company issued a total~~June 2, 2017, he received grants of ~~2,482,145~~options for 100,000 shares of common stock ~~to entities owned by Laurence Blickman.~~

15

In ~~2017~~that expire five years from the ~~Company authorized a private placement~~date of grant with ~~a maximum offering amount~~an exercise price of ~~$2,100,000 (the “Offering”) allowing investors to purchase units consisting of 715,000~~$3.50 per share, and on April 17, 2018, he received options for 40,000 shares of common stock which expire five years from the date of grant and ~~715,000 five-year warrants exercisable at $0.15~~have an exercise price of $3.50 per share. ~~As previously discussed~~These awards were amended in April 2020 to extend the ~~Company’s filing~~term such that the options expire eight years from the date of grant. All of Mr. White’s stock options are vested. In the event Mr. White is terminated or his title as Chief Executive Officer changes within 12 months following a change in control, Mr. White will be entitled to receive any unpaid salary and expenses, a payment equal to 18 months of his salary at the rate in effect on ~~January 25, 2018,~~the date of such termination, and a continuation of benefits for a period of 18 months. On May 19, 2020, we agreed to extend Mr. White’s Employment Agreement until August 15, 2021 and to include automatic renewal provisions for one-year terms. In addition, Mr. White agreed that if we have not listed our securities on ~~Form 8-K, in January 2018~~a national securities exchange by August 15, 2020, he will continue to defer $50,000 of his annual salary until the ~~Company approved an increase in the offering. The following directors or former directors~~earlier of the ~~Company purchased~~completion of a capital raise of $5 million or more or the ~~following securities~~Compensation Committee’s decision to reinstate such salary in ~~connection with~~full or part. On August 15, 2020, the ~~Offering:~~

·

~~Carl Berg - $400,000 for 5,720,000 shares and 5,720,000 warrants;~~

·

~~Laurence Blickman $291,777 for 4,172,411 shares and 4,172,411 warrants;~~

·

~~Harvey Eisen - $50,000 for 715,000 shares and 715,000 warrants;~~

·

~~Marshall Geller - $250,000 for 3,575,000 shares and 3,575,000 warrants;~~

·

~~Howard Goldberg - $115,000 for 1,644,500 shares and 1,644,500 warrants ;~~

·

~~Larry Schafran - $115,000 for 1,644,500 shares and 1,644,500 warrants (including shares issued to a member of Schafran’s household);~~

·

~~Paul Klapper - $26,000 for 371,800 shares and 371,800 warrants.~~

~~In August~~deferral of Mr. White’s salary ends and his salary will be restored to its full amount of $200,000.

Keith Goldstein - Acting Chief Operating Officer

On September 1, 2017, the Company granted Laurence Blickman, Marshall Geller, Howard Goldberg, Claudio Ballard, Lawrence Schafran, and Paul Klapper each 300,000 shares of restricted common stock vesting quarterly over one-year period subject to continued service as of each applicable vesting date (the “August Grant”). In February 2018, Carl Berg was appointed to the Board and granted 300,000 shares of restricted common stock vesting quarterly over one-year period subject to continued service as of each applicable vesting date (the “February Grant”). Effective April 23, 2018, the Board approved the immediate vesting of all restricted stock grants made in the August Grant (except Mr. Klapper) and the February Grant.

On February 19, 2018, the Company authorized a warrant reduction program (the “Program”) permitting warrant holders of the Company’s outstanding $0.15 warrants to exercise their warrants for $0.10 (the “Reduced Price”) under the terms of the Program. As of April 24, 2018, the Company has received total gross proceeds of approximately $~~1,763,027~~ ~~from the exercise of warrants under the Program at the Reduced Price.~~ Included in the above amounts are gross proceeds of $1,097,624 from directors of the Company including $572,000 from Carl Berg, $110,000 from Marshall Geller, $71,5000 from Harvey Eisen, and $334,123 from Laurence Blickman.

In January 2017, in connection with loans made to the Company, Paul Klapper was issued notes and a total of 1,000,000 warrants, exercisable at $0.07, to purchase shares of the Company’s common stock. The notes were subsequently converted at the same consideration as the Company’s private placement and the warrants were cancelled prior to exercise.

On October 19, 2017, the Company issued 464,775 shares of common stock to Paul Klapper, a former director, in connection with a $25,000 loan made to the Company on October 9, 2014, by an entity he controls.

~~In January 2018, the Company issued 1,749,683 shares to Paul Klapper relating to a note payable conversion that took place in June 2017 prior to the time he became a director.~~

~~In March 2018,~~ the Company entered into a ~~Confidential Settlement~~six-month Consulting Agreement ~~(the “Settlement Agreement”) with Paul Klapper, who was at the time~~pursuant to which Mr. Goldstein served as our acting Chief Operating Officer and received a ~~member~~monthly fee of $10,000 per month plus 4% of any sales made by Mr. Goldstein on behalf of the ~~Company’s Board,~~Company. Mr. Goldstein was granted options to purchase 40,000 shares of our common stock with an exercise price of $2.00 per share and ~~certain other parties named~~a five-year term that vested in equal monthly increments over the ~~Settlement Agreement. Pursuant~~initial six-month term.

20

Table of Contents

On March 1, 2018, the Company amended the Consulting Agreement with POC Advisory Group, LLC, an entity controlled by Mr. Goldstein, for a one-year term which expired on February 28, 2019, under which Mr. Goldstein received a monthly fee of $12,500 per month. The amendment provided Mr. Goldstein with additional options to purchase 20,000 shares of our common stock with an exercise price of $10.51 per share that have a five-year term. Options with respect to 10,000 shares vested upon execution of the amendment and options with respect to the remaining 10,000 shares vested on February 28, 2019. The amendment also terminated Mr. Goldstein’s right to the 4% sales commission. In February 2019, the Company agreed to renew Mr. Goldstein’s agreement on a month-to-month basis on the terms of the ~~Settlement~~amendment, pending board approval of a new agreement. On April 9, 2019, we entered into a Second Amendment to the Consulting Agreement with POC Advisory Group, LLC. The key provisions of the second amendment to the Consulting Agreement include the following:

·

Mr. Goldstein receives a monthly consulting fee of $14,500 for services provided;

·

Mr. Goldstein received a grant of stock options under the 2017 Plan to purchase 20,000 shares of our common stock with an exercise price of $9.75 per share. The options vest annually in equal increments over a two-year period with the first vesting date being March 1, 2020, subject to Mr. Goldstein performing services for the Company as of each applicable vesting date and executing the Company’s standard stock option agreement. Any unvested options will vest immediately upon a change of control;

·

the Second Amendment is for a two-year term beginning March 1, 2019 and expiring on March 1, 2021.

The Consulting Agreement, as amended, may be terminated at any time by the Company ~~(i) paid a total of $500,000 (the “Settlement Amount”)~~for cause. If terminated without cause, Mr. Goldstein is entitled to ~~a fund controlled by Paul Klapper~~any unpaid fees and ~~an additional party~~any unpaid and ~~(ii) issued a total of 1,000,000 shares~~accrued expenses. The Consulting Agreement, as amended, contains non-compete provisions prohibiting Mr. Goldstein from competing with us during the term of the ~~Company’s~~Consulting Agreement and for one year after termination.

Margaret Gezerlis - Chief Financial Officer

On May 17, 2018, we appointed Margaret Gezerlis as our Chief Financial Officer and entered into a Consulting Agreement with Ms. Gezerlis under which the Company agreed to pay Ms. Gezerlis a $1,000 signing bonus and a consulting fee of $1,500 per month. Prior to her appointment, Ms. Gezerlis had been an employee of the CFO Squad LLC since February 2018 and had provided services to the Company through her employment at CFO Squad LLC.

On November 15, 2018, we entered into an Employment Agreement with Ms. Gezerlis with an initial term of one year, which automatically renews for additional one year terms until either party gives 30 day notice of non-renewal or otherwise terminates the agreement according to its terms. Under the Employment Agreement, Ms. Gezerlis is entitled to an annual base salary of $84,000 per year as well as a monthly stipend of $1,000 in lieu of benefits. The Employment Agreement also provides that Ms. Gezerlis’ annual base salary will increase to $145,000 upon the successful listing of our common stock toon a national securities exchange. On June 18, 2020, upon the ~~fund~~listing of our common stock and the third party (the “Settlement Shares”). The Settlement Agreement provides for the cancellation of certain revenue sharing agreements, as of March 31, 2018, between the Company and Mr. Klapper (or an affiliate) and the third party, and terminates the Company’s obligation to issue Mr. Klapper or affiliates warrants to purchase ~~3.7 million~~common stock on The Nasdaq Capital Market, Ms. Gezerlis’ annual base salary increased to $145,000 and she received the money accrued for the interim salary increase. Additionally, pursuant to the Employment Agreement, on March 11, 2019, Ms. Gezerlis was granted options to purchase 2,000 shares of ~~the Company’s~~ common stock at an exercise price of ~~$0.40~~$16.05 per share. AsThe options vested quarterly in equal installments over one year. The Employment Agreement can be terminated by us for cause or by Ms. Gezerlis for good reason. Additionally, by its terms the Employment Agreement terminates automatically upon a ~~condition~~change of ~~entering into~~control. If terminated by us without cause or by Ms. Gezerlis with good reason Ms. Gezerlis is entitled to any accrued and unpaid salary and expenses, a payment equal to 12 months of her then base salary, and six months of benefits. If the ~~Settlement~~Employment Agreement terminates due to a change of control of our company, Ms. Gezerlis will be entitled to a payment equal to 18 months of her then base salary and 18 months of benefits. If terminated upon us giving notice of non-renewal and she remains employed until the ~~Company accelerated the vesting of 150,000 shares of restricted common stock held by Mr. Klapper which were part~~end of the ~~300,000 share August 2017 grant. Additionally, the Company agreed~~respective term, Ms. Gezerlis is entitled to ~~register~~any accrued and unpaid salary and expenses and six months of benefits.

On January 7, 2020, Ms. Gezerlis received a ~~number~~grant of stock options for 4,000 shares of common stock ~~held by Mr. Klapper, the third party,~~that expire in five-years which are exercisable at $3.50 per share and ~~funds~~ ~~Mr. Klapper~~ ~~controls~~ vest quarterly over 2020 subject to continued service as an officer on ~~behalf of investors in the funds. Mr. Klapper joined the Board on July 14, 2017 and resigned as of March 31, 2018.~~

16

Oneach applicable vesting date. In April ~~25, 2018,~~2020, the Company approved a salary increase of $4,000 per month, to a total of $11,000 per month, for Ms. Gezerlis, half of which we deferred and paid in full upon the closing of our June 2020 public offering of our securities. Ms. Gezerlis now receives the full amount of the salary increase on a monthly basis. On May 7, 2020, Ms. Gezerlis became entitled to receive a commission equal to 5.0% of the gross sales price of Company products and services sold by Ms. Gezerlis beginning on April 21, 2020.

21

Table of Contents

Other Consulting Agreement

On June 29, 2017, we entered into a Consulting Agreement with Norman Gardner. Under the terms of the Consulting Agreement, Norman Gardner will receive a monthly consulting fee of $12,500 over a three-year term beginning June 30, 2017. The Consulting Agreement provides that we will reimburse Mr. Gardner for up to $1,000 a month for health insurance and other medical expenses and will provide Mr. Gardner with a grant of stock options to purchase 200,000 shares of common stock at an exercise price of $3.50 per share. The options are fully vested and exercisable over a five-year term. This award was amended in April 2020 to extend the term such that the options expire eight years from the date of grant. In the event of termination without cause, Mr. Gardner is entitled to receive any unpaid salary and expenses, a payment equal to 12 months of ~~$30,000~~his consulting fee, and a continuation of benefits for a period of 12 months. The Consulting Agreement further provides for 18 months of severance and health insurance reimbursement upon a change of control if Mr. Gardner terminates the agreement within one year of the change of control. On May 19, 2020, we amended Mr. Gardner’s agreement to ~~Mr. Laurence Blickman~~include automatic renewal provisions for one-year terms.

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth the ~~services he rendered in connection with negotiating~~outstanding equity awards for our Named Executive Officers as of December 31, 2019.

Name (a)	Option Awards
Name (a)	Number of Securities Underlying Unexercised Options (#) Exercisable (b)	Number of Securities Underlying Unexercised Options (#) Unexercisable (c)	Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (d)	Option Exercise Price ($)(e)	Option Expiration Date (f)
Patrick White	140,000	-	-	3.50	8/08/2022
	10,000	-	-	7.00	8/14/2024
Keith Goldstein	20,000 ⁽¹⁾	-	-	10.51	3/01/2023
	40,000 ⁽¹⁾	-	-	2.00	8/31/2022
	-	20,000 ⁽¹⁾⁽²⁾		9.75	4/05/2024
Margaret Gezerlis	2,000	-	-	16.05	11/15/2023

(1)

These options are held by POC Advisory Group LLC, of which Mr. Goldstein is the managing member.

(2)

Vest in equal annual installments beginning on March 1, 2020.

22

Table of Contents

DIRECTOR COMPENSATION

Our directors are eligible to receive options, restricted stock and ~~resolving~~ other equity linked grants under our equity incentive plans. Board compensation is determined on an annual basis.

The following table sets forth information about the ~~transactions pertaining~~compensation earned by or paid to our directors during our fiscal year ended December 31, 2019. Please refer to the ~~Settlement Agreement.~~“Summary Compensation Table” above for compensation earned by Mr. White as a member of the board of directors.

Name	Fees Earned or Paid in Cash ($)		Stock Awards ($)⁽¹⁾⁽²⁾		All Other Compensation ($)			Total Compensation ($)
Norman Gardner		-		15,290		162,000	⁽³⁾		177,290
Howard Goldberg		-		84,760		-			84,760
Marshall Geller		-		77,115		-			77,115
Dr. Arthur Laffer		-		55,825		-			55,825
Chris Gardner		-		35,540		-			35,540
Scott Greenberg		-		1,519		-			1,519
Eugene Robin ⁽⁴⁾		-		38,071		-			38,071

(1)

Amounts reported represent the aggregate grant date fair value of awards granted without regards to forfeitures granted to the independent members of our board of directors during 2019, computed in accordance with ASC 718. This amount does not reflect the actual economic value realized by the director. The assumptions used in calculating the grant date fair value of the option awards are set forth in Note 1 to our audited financial statements for the year ended December 31, 2019.

(2)

Represents grants of restricted common stock in 2019 vesting quarterly over a one-year period, and restricted stock granted in 2018 that vested in 2019. Mr. Robin resigned in September 2019 and forfeited 2,400 shares which had not vested.

(3)

Mr. Gardner receives a monthly consulting fee of $12,500 and is reimbursed up to $1,000 a month for health insurance and other medical expenses. See “Other Consulting Agreement” above.

(4)

Mr. Robin is a former director.

The table below sets forth the unexercised options held by each of our non-employee directors outstanding as of December 31, 2019.

Name			Aggregate Number of Unexercised Option Awards Outstanding at December 31, 2019
Norman Gardner			90,000 ⁽¹⁾
Chris Gardner			--
Marshall Geller			--
Howard Goldberg			--
Scott Greenberg			--
Arthur Laffer			--

(1)	The expiration date for these options is June 28, 2025 and the exercise price is $3.50 per share.

23

Table of Contents

~~Voting securities~~

Security Ownership of management

and ~~principal holders thereof~~

Certain Beneficial Owners

The following table sets forth the number of shares of ~~VerifyMe’~~ our common stock beneficially owned as of ~~the Record Date~~August 13, 2020, by (i) those persons known by ~~VerifyMe~~us to be owners of more than 5% of its common stock, (ii) each director, ~~and director nominee,~~ (iii) ~~the Named Executive Officers~~our named executive officers (as disclosed in the Summary Compensation Table), and (iv) ~~VerifyMe’~~our executive officers and directors as a group. Unless otherwise specified in the notes to this table, the address for each person is: VerifyMe, Inc., ~~Clinton Square,~~ 75 S. Clinton ~~Ave,~~Avenue, Suite 510, Rochester, ~~NY 14604~~ ~~Attention: Corporate Secretary.~~

Title of Class
Beneficial
Owner

Amount of
Beneficial
Ownership
(1)

Percent
Beneficially
Owned (1)

Named Executive
Officers:

Common Stock Norman Gardner (2) 9,464,469 10.50 %
Common Stock Thomas Nicolette (3)
127,946
*
Common Stock Patrick White (4) 5,000,000 5.57 %
_
Non-Officer
Directors:

Common Stock Carl Berg 11,740,000 (5) 13.85 %
Common Stock Laurence Blickman 17,407,380 (6) 19.94 %
Common Stock Harvey Eisen 1,430,000 (7) 1.69 %
Common Stock Marshall Geller 7,450,000 (8) 8.54 %
Common Stock Howard Goldberg 3,636,755 (9) 4.21 %
Common Stock Lawrence Schafran 4,414,000 (10) 5.06 %
Common Stock All directors and executive officers as a group (9 persons)
60,670,550

58.1
%

5% Shareholders:
Common Stock Stephen Silver (11) 4,903,068 5.68 %

New York 14604. We also have 0.85 share of Series B Convertible Preferred Stock outstanding held by the Estate of Claudio Ballard.

Beneficial Owner	Amount of Beneficial Ownership of Common Stock ⁽¹⁾			Percent of Common Stock Beneficially Owned ⁽¹⁾
Named Executive Officers:
Patrick White		250,500	⁽²⁾		4.4	%
Sandy Fliderman		63,728	⁽³⁾		1.1	%
Keith Goldstein		70,000	⁽⁴⁾		1.2	%
Margaret Gezerlis		5,000	⁽⁵⁾		*
Directors:
Norman Gardner		219,290	⁽⁶⁾		3.9	%
Chris Gardner		74,318	⁽⁷⁾		1.3	%
Marshall Geller		306,282	⁽⁸⁾		5.4	%
Howard Goldberg		143,636	⁽⁹⁾		2.6	%
Scott Greenberg		52,106	⁽¹⁰⁾		*
Arthur Laffer		129,421	⁽¹¹⁾		2.3	%
All current directors and executive officers as a group (10 persons)		1,314,281			21.2	%

* indicates less than 1%

17

(1)

Based on ~~84,760,454~~5,575,554 shares of common stock issued and outstanding as of ~~April 27, 2018.~~August 13, 2020. Beneficial ownership is determined under the rules of the SEC and generally includes voting or investment power with respect to securities. A person is deemed to be the beneficial owner of securities that can be acquired by such person within 60 days whether upon the exercise of options ~~warrants~~ or ~~conversion of notes.~~warrants. Unless otherwise indicated in the footnotes to this table, ~~VerifyMe believes~~we believe that each of the ~~shareholders~~stockholders named in the table has sole voting and investment power with respect to the shares of common stock indicated as beneficially owned by them. This table does not include any unvested stock options or warrants except for those vesting within 60 days. As for the 5% stockholders, we are relying upon reports filed by each 5% stockholder with the SEC.

(2)

Includes 60,000 and 37,500 shares of time-vested restricted stock that vests in full on August 5, 2021 and April 16, 2021, respectively, and 140,000 and 10,000 shares of common stock underlying stock options exercisable at $3.50 per share and $7.00 per share, respectively.

24

Table of Contents

~~(2)~~(3)

~~Mr. Gardner was previously the Company’s Chief Executive Officer from February 1, 2017 until August 15, 2017. Consists of 4,049,469~~Includes 33,614 shares of common stock ~~165,000~~and 25,614 shares of common stock underlying warrants exercisable at ~~$0.11~~$4.60 per share ~~250,000~~held by Industry Private Capital LLC, which are beneficially owned by Mr. Fliderman. Mr. Fliderman is the majority owner and co-manager of Industry Private Capital LLC.

(4)

Includes 10,000 shares of common stock underlying ~~warrants exercisable at $0.25 per share, and 5,000,000~~ stock options exercisable at ~~$0.07~~$9.75 per share, 40,000 shares of common stock underlying stock options exercisable at $2.00 per share and 20,000 shares of common stock underlying stock options exercisable at $10.51 per share all of which are held ~~directly~~by POC Advisory Group LLC, which are beneficially owned by Mr. ~~Gardner.~~Goldstein. Mr. ~~Gardner’s beneficial ownership~~Goldstein is ~~subject to a 10% ownership limitation contained within his consulting agreement.~~the managing member and primary owner of POC Advisory Group LLC.

(5)

Includes 2,000 shares of common stock underlying stock options exercisable at $16.05 per share and 3,000 shares of common stock underlying stock options exercisable at $3.505 per share.

(6)

Includes 40,000 shares of time-vested restricted stock that vests in full on August 5, 2021, 3,300 shares of common stock underlying stock options exercisable at $5.50 per share, 5,000 shares of common stock underlying stock options exercisable at $12.50 per share, and 90,000 shares of common stock underlying stock options exercisable at $3.50 per share. Does not include Mr. Gardner’s minority ownership of an entity that holds ~~the Company’s Series A Convertible Preferred Stock which currently equates to 44,820 shares.~~896 shares of our common stock.

~~(3)~~(7)

~~Mr. Nicolette was appointed Chief Executive Officer~~Includes 15,000 shares of time-vested restricted stock that vests in full on ~~May 1, 2016 and resigned on January 31, 2017.~~ ~~Consists of 127,946~~August 5, 2021, 16,009 shares of common stock ~~held by Mr. Nicolette directly.~~

~~(4)~~

~~Mr. White has been the Company’s Chief Executive Officer since August 15, 2017. Consists of 5,000,000~~underlying warrants exercisable at $4.60 per share and 10,000 and 7,500 shares of common stock underlying stock options exercisable at ~~$0.07~~$3.505 per ~~share held by Mr. White directly.~~share.

~~(5)~~(8)

~~Consists of 300,000~~Includes 40,000 shares of ~~common~~time-vested restricted stock ~~held directly by Mr. Berg and 11,440,000 shares of common stock held by Berg & Berg Enterprises, LLC (“BB”), which are beneficially owned by Mr. Berg, the managing member and primary owner of BB.~~ ~~The address for Mr. Berg and BB is 10050 Bandley Dr., Cupertino CA, 95014.~~

~~(6)~~

~~Consists of 674,426 shares of common stock held by the Blickman 2005 Family Trust~~ ~~which are beneficially owned by Mr. Blickman; 2,517,863~~that vests in full on August 5, 2021, 7,000 shares of common stock underlying warrants exercisable at ~~$0.15~~$4.60 per share, ~~and 7,900,181 shares of common stock held by the Laurence J. Blickman ’91 Trust~~ ~~which are beneficially owned by Mr. Blickman; 5,158,381 shares of common stock held by the Laurence J. Blickman Defined Benefit Plan~~ ~~which are beneficially owned by Mr. Blickman; and~~ ~~1,156,529 shares of common stock held by the Blickman SEP IRA~~ ~~which are beneficially owned by Mr. Blickman~~.

~~(7)~~

~~Consists of 1,430,000~~ ~~shares of common stock held directly by Mr. Eisen. The address for Mr. Eisen is 177 West Putnam Avenue, Greenwich CT 06830.~~

~~(8)~~

Consists of 1,716,000 shares of common stock underlying warrants exercisable at $0.15 per share and 2,016,000 shares of common stock held by Mr. Geller; 759,000 shares of common stock underlying warrants exercisable at $0.15 per shares and 2,959,000150,341 shares of common stock held by the Marshall & Patricia Geller Living Trust (the “Geller Trust”), which are beneficially owned by Mr. Geller,.

~~(9)~~

~~Consists~~ 3,000 shares of ~~1,644,500~~common stock underlying stock options exercisable at $5.295 per share held by the Geller Trust, 10,000 and 7,500 shares of common stock underlying stock options exercisable at $3.505 per share held by the Geller Trust, 31,941 shares of common stock underlying warrants exercisable at ~~$0.15 and 1,992,255 shares of common stock~~$4.60 per share held by ~~Mr. Goldberg.~~

~~(10)~~

~~Consists of 1,644,500~~the Geller Trust, 14,300 shares of common stock underlying warrants exercisable at ~~$0.15~~$7.50 per share ~~825,000 shares of common stock underlying stock options and 1,944,500 shares of common stock~~ held by ~~Mr. Schafran~~ ~~and Mr. Schafran’s spouse which are deemed to be beneficially owned by Mr. Schafran.~~

~~(11)~~

~~Consists of 828,068 shares of common stock and 715,000~~the Geller Trust, 22,880 shares of common stock underlying warrants exercisable at ~~$0.15~~$7.50 per share held ~~directly~~ by ~~Mr. Silver; 1,930,000 shares of common stock~~the Geller Trust, and ~~1,430,000~~12,320 shares of common stock underlying warrants exercisable at ~~$0.15~~$7.50 per share held by the ~~Stephen H. Silver Family Trust Dated 12/7/12.~~Geller Trust.

(9)

Includes 35,000 shares of time-vested restricted stock that vests in full on August 5, 2021, 4,290 and 28,600 shares of common stock underlying warrants exercisable at $7.50 per share, 5,000 shares of common stock underlying stock options exercisable at $5.295 per share, and 10,000 and 7,500 shares of common stock underlying stock options exercisable at $3.505 per share. Mr. Goldberg’s shares are held directly in a pledged account with Merrill Lynch, but as of August 13, 2020, no debt is outstanding in this account.

(10)

Includes 25,000 shares of time-vested restricted stock that vests in full on August 5, 2021, 7,500 shares of common stock underlying stock options exercisable at $3.505 per share and 6,403 shares of common stock underlying warrants exercisable at $4.60 per share.

(11)

Includes 15,000 shares of time-vested restricted stock that vests in full on August 5, 2021, 25,600 and 10,800 shares of common stock underlying warrants exercisable at $4.60 per share, 10,000 and 7,500 shares of common stock underlying stock options exercisable at $3.505 per share, and 3,000 shares of common stock underlying stock options exercisable at $4.025 per share.

25

Table of Contents

PROPOSAL TWO:

TO APPROVE the VerifyMe, Inc. 2020 Equity Incentive Plan

We are asking our stockholders to approve the adoption of the VerifyMe, Inc. 2020 Equity Incentive Plan (the “2020 Plan”). The Compensation Committee selected and retained Frederic W. Cook & Co., Inc. (“FW Cook”), an independent compensation consulting firm, and instructed FW Cook to advise the Committee on the design and terms of the 2020 Plan. Following consultation with FW Cook, our board of directors approved and adopted the 2020 Plan on August 10, 2020, subject to stockholder approval. The 2020 Plan is now being submitted to our stockholders for their approval.

The 2020 Plan will become effective upon stockholder approval, and no awards may be granted under the 2020 Plan after the date that is 10 years from the date the 2020 Plan was last approved by our stockholders.

If approved, the 2020 Plan will replace the Company’s 2017 Plan, and no further awards would be granted under the 2017 Plan.

The closing stock price of a share of the Company’s common stock as reported on the Nasdaq Stock Market on August 13, 2020, our record date, was $4.47.

Description of the 2020 Plan

The full text of the 2020 Plan is attached to this proxy statement as Exhibit A. The principal terms of the 2020 Plan are described below, but the description is qualified in its entirety by reference to the 2020 Plan itself. In the event of a conflict between the description and the terms of the 2020 Plan itself, the terms of the 2020 Plan will govern. The 2020 Plan will not become effective unless approved by our stockholders.

Purpose

The purpose of the 2020 Plan is to promote stockholder value and our future success by providing appropriate retention and performance incentives to employees and non-employee directors of the Company or its affiliates, and any other individuals who perform services for the Company or its affiliates.

Administration

Except as noted below, the 2020 Plan will be administered by the Compensation Committee (the “Committee”) of the board of directors. Under the 2020 Plan, each member of the Committee is required to be, and currently is, both a “Non-Employee Director” within the meaning of Rule 16b-3 under the Exchange Act, and a non-employee director meeting the independence requirements for compensation committee members under the rules and regulations of the exchange on which the Company’s shares of common stock are traded.

The Committee will have the authority to select the employees and other individuals (other than non-employee directors) to receive awards under the 2020 Plan, to determine the type, size and terms of the award to be made to each individual selected, to determine the time when awards will be granted, to establish performance objectives, and to prescribe the form of award agreement. The Committee is also authorized to interpret the 2020 Plan and the awards granted under the 2020 Plan, to establish, amend and rescind any rules and regulations relating to the 2020 Plan, and to make any other determinations that it deems necessary or desirable for the administration of the 2020 Plan. The Committee may authorize any one or more of its members or any officer of the Company or any affiliate to execute and deliver documents or to take any other action on behalf of the Committee with respect to awards made or to be made to participants, subject to the requirements of applicable law, including without limitation, Section 16 of the Exchange Act.

26

Table of Contents

~~Summary Compensation Table~~

The ~~following information~~board of directors has all the powers otherwise vested in the Committee by the terms of the 2020 Plan in respect of awards granted to non-employee directors.

Notwithstanding the foregoing, except for permitted adjustments in connection with a corporate transaction or recapitalization, neither the Committee nor the board may, without the prior approval of the stockholders of the Company, (a) reduce, directly or indirectly, the per-share exercise price of an outstanding option or stock appreciation right after it is granted; (b) cancel an option or stock appreciation right when the exercise price of the option or stock appreciation right exceeds the fair market value of a share in exchange for cash or another award (other than in connection with a change in control); or (c) take any other action that is treated as a repricing under United States generally accepted accounting principles or by the rules or regulations of the exchange on which the Company’s shares are traded.

No member of the Committee and no officer of the Company will be liable for anything done or omitted to be done by him or her, by any other member of the Committee or by any officer of the Company in connection with the performance of duties under the 2020 Plan, except for his or her own willful misconduct or gross negligence, or as expressly provided by applicable law, and the Company will indemnify each member of the Committee and officer of the Company against any such liability.

Eligible Participants

Employees and non-employee directors of the Company or its affiliates, and other individuals who perform services for the Company or any of its affiliates, are eligible to receive awards under the 2020 Plan. As of August 13, 2020, approximately 20 persons, including four executive officers, six non-employee directors and approximately 10 other individuals may be considered for awards under the 2020 Plan.

Neither the Committee nor the board has made any decisions with respect to the individuals who may receive awards under the 2020 Plan on or after September 30, 2020 or the amount or nature of future awards.

Authorized Shares

The maximum number of shares available for grant and issuance under the 2020 Plan will be (a) 1,069,110, plus (b) the number of shares available for issuance under the 2017 Plan on September 30, 2020.

Awards will be counted against the available share reserve on the date of grant, based on the maximum number of shares that may be issued pursuant to the award. Any shares of common stock related to awards issued under the ~~compensation paid, distributed~~2020 Plan or ~~accrued~~the 2017 Plan that are forfeited, canceled, expired or otherwise terminated without the issuance of shares of common stock for any reason will be added back and again be available for issuance under the 2020 Plan. In addition, shares of common stock that are retained or reacquired by usthe Company to satisfy the exercise price or purchase price of an award or to satisfy the tax withholding obligation in connection with an award, as well as any shares of common stock covered by an award that is settled in cash, will be added back and again be available for issuance under the 2020 Plan.

Awards granted through the assumption of, or substitution for, outstanding awards previously granted by a company acquired by the Company or any affiliate, or with which the Company or any affiliate combines, will not reduce the maximum number of shares of common stock that may be issued under the 2020 Plan.

Types of Awards

The 2020 Plan allows for the granting of the following types of awards: stock options (both incentive stock options and nonqualified stock options); stock appreciation rights; restricted stock; restricted stock units; and other stock-based awards. Each award granted under the 2020 Plan is subject to an award agreement containing the particular terms and conditions of that award, subject to the limitations imposed by the 2020 Plan.

27

Table of Contents

Stock Options. A stock option is the right to purchase a specified number of shares for a specified exercise price. Stock options may be either (a) incentive stock options, which are stock options that meet the requirements under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), or (b) nonqualified stock options, which are stock options that do not meet the requirements of Section 422 of the Code or that are designated as a nonqualified stock option. Only employees of the Company and certain of its affiliates may receive awards of incentive stock options, and incentive stock options are subject to additional limitations. Stock options (other than stock options assumed or granted in substitution for outstanding stock options of a company acquired by the Company or any affiliate) are subject to the following: (i) the exercise price shall be equal to or greater than the fair market value of the shares subject to such stock option on the date of grant; and (ii) the expiration date shall be no later than 10 years ~~ended December 31, 2017~~from the date of grant. Notwithstanding the foregoing, in the event that on the expiration date of a nonqualified stock option, (a) the exercise of the option is prohibited by applicable law, or (b) shares of common stock may not be purchased or sold by certain employees or directors of the Company due to the “black-out period” under a Company policy or a “lock-up” agreement undertaken in connection with an issuance of securities by the Company, the Committee may, to the extent permitted by Section 409A of the Code, extend the expiration date of the nonqualified stock option, but not beyond a period of 30 days following the end of the legal prohibition, black-out period or lock-up agreement period, and ~~2016~~provided further that no extension may be made if the exercise price of the option is above the fair market value of a share of common stock on the initial expiration date. The exercise price may be payable either in (1) cash, (2) if permitted by the Committee, by delivery of irrevocable instructions to ~~our Chief Executive Officer (principal executive officer)~~a broker to deliver promptly the proceeds from the sale of shares, (3) if permitted by the Committee, by tendering shares previously acquired, (4) if permitted by the Committee, by withholding shares that would otherwise be issued having a fair market value on the exercise date equal to the exercise price, or (5) any combination of the foregoing.

Stock Appreciation Rights. A stock appreciation right is a right to receive cash or other property based on the increase in the value of a share over the per share exercise price. Stock appreciation rights (other than stock appreciation rights assumed or granted in substitution for outstanding stock appreciation rights of a company acquired by the Company or any affiliate) are subject to the following: (a) the exercise price shall be equal to or greater than the fair market value of the shares subject to such stock appreciation right on the date of grant; and ~~former Chief Executive Officers serving during~~(b) the ~~last fiscal year.~~expiration date shall be no later than 10 years from the date of grant. Notwithstanding the foregoing, in the event that on the expiration date of a stock appreciation right, (a) the exercise of the stock appreciation right is prohibited by applicable law, or (b) shares of common stock may not be purchased or sold by certain employees or directors of the Company due to the “black-out period” under a Company policy or a “lock-up” agreement undertaken in connection with an issuance of securities by the Company, the Committee may, to the extent permitted by Section 409A of the Code, extend the expiration date of the stock appreciation right, but not beyond a period of 30 days following the end of the legal prohibition, black-out period or lock-up agreement period, and provided further that no extension may be made if the exercise price of the stock appreciation right is above the fair market value of a share of Common Stock on the initial expiration date.

Restricted Stock. Restricted stock is an award of shares that is subject to vesting conditions. Prior to the expiration of the vesting period, a participant who has received an award of restricted stock has the right to vote and to receive dividends on the underlying unvested shares, subject, however, to the restrictions and limitations imposed pursuant to the 2020 Plan and award agreement.

Restricted Stock Units. A restricted stock unit is an award that is valued by reference to shares, which may be paid to a participant upon vesting in shares, cash or other property.

28

Table of Contents

18

~~Summary Compensation Table~~

Stock Option All Other Total
Name and Principal Salary Bonus Awards Awards Compensation Compensation
Position Year ($) ($) ($) (1) ($) (1) ($) ($)

Patrick White (2)
2017 56,250 - - 240,631 25,000 321,881
CEO

Norman Gardner (3) 2017 75,000 - - 682,007 62,529 819,536
Former CEO & Secretary
Treasurer

Thomas Nicolette (4)
2017 6,483 - - - 26,007 32,490
Former CEO
2016 72,354 - - - 49,885 122,239

~~(1)~~ ~~Represents~~

Other Stock-Based Awards. An other stock-based award is an award denominated or payable in shares, other than a stock option, stock appreciation right, restricted stock or restricted stock unit. Other stock-based awards may be settled in cash, shares or other property.

Performance Awards. The Committee may grant awards of restricted stock, restricted stock units or other stock-based awards as “performance awards,” with the vesting or payment of such awards based on the achievement of specified performance objectives. Performance objectives may be based upon the attainment of specific or per-share amounts of, or changes in, one or more, or a combination of two or more, of the following: (i) earnings including operating income, economic income, economic net income, earnings before or after taxes, earnings before or after interest, depreciation, amortization, or extraordinary or special items or book value per share (which may exclude nonrecurring items); (ii) pre-tax income or after-tax income; (iii) earnings per common share (basic or diluted); (iv) operating profit; (v) revenue, revenue growth or rate of revenue growth; (vi) return on assets (gross or net), return on investment, return on capital, or return on equity; (vii) returns on sales or revenues; (viii) operating expenses; (ix) stock price appreciation; (x) cash flow, free cash flow, cash flow return on investment (discounted or otherwise), net cash provided by operations, or cash flow in excess of cost of capital; (xi) implementation or completion of critical projects or processes; (xii) economic value created; (xiii) cumulative earnings per share growth; (xiv) operating margin or profit margin; (xv) common stock price or total stockholder return; (xvi) cost targets, reductions and savings, productivity and efficiencies; (xvii) strategic business criteria, consisting of one or more objectives based on meeting specified market penetration, geographic business expansion, customer satisfaction, employee satisfaction, human resources management, supervision of litigation, information technology, and goals relating to acquisitions, divestitures, joint ventures and similar transactions, and budget comparisons; (xviii) personal professional objectives, including any of the foregoing performance goals, the implementation of policies and plans, the negotiation of transactions, the development of long-term business goals, formation of joint ventures, research or development collaborations, and the completion of other corporate transactions; (xix) such other performance objectives determined by the Committee in its sole discretion; and (xx) any combination of any of the foregoing. The Committee may provide that, in measuring the achievement of the performance objectives, an award may include or exclude items such as realized investment gains and losses, extraordinary, unusual, non-recurring or infrequently recurring items, asset write-downs, effects of force majeure events (such as a pandemic), accounting changes, currency fluctuations, acquisitions, divestitures, reserve-strengthening and other non-operating items. Performance goals may be expressed in terms of attaining a specified level of the particular criteria or the attainment of a percentage increase or decrease in the particular criteria, and may be applied to one or more of the Company or an affiliate, or a division or strategic business unit of the Company or an affiliate, or may be applied to the performance of the Company relative to a market index, a group of other companies or a combination thereof, or other pre-established target or designated comparison group, all as determined by the Committee. Performance goals may include a threshold level of performance below which no payment will be made (or no vesting will occur), levels of performance at which specified payments will be made (or specified vesting will occur), and a maximum level of performance above which no additional payment will be made (or at which full vesting will occur).

Dividend Equivalents. Awards other than stock options and stock appreciation rights may include the right to receive dividends or dividend equivalents, subject to such terms, conditions, restrictions or limitations, if any, as the Committee may establish.

Award Limitations

Non-Employee Director Award Limitation. The aggregate of (a) the grant date fair value for financial reporting purposes of any awards granted during any fiscal year to a non-employee director, and (b) the total amount of any cash fees or other property paid to such non-employee director during the fiscal year, in respect of the director’s service as a member of the board during such year, shall not exceed $300,000. The independent members of the board may make exceptions to this limit for a non-executive chair of the board, provided that the non-employee director receiving such additional compensation may not participate in the decision to award such compensation.

29

Table of Contents

Incentive Stock Options. Incentive stock options may be granted only to employees of the Company or an affiliate, provided such affiliate is also a “parent corporation” of the Company within the meaning of Section 424(e) of the Code or a “subsidiary corporation” of the Company within the meaning of Section 424(f) of the Code, on the date of grant. The aggregate fair market value (determined as of the time the incentive stock option ~~award, calculated~~is granted) of the shares of common stock with respect to which incentive stock options are exercisable for the first time by any individual during any calendar year (under all plans of the Company and its affiliates) shall not exceed $100,000, and any incentive stock option or portions thereof which exceed such limit (according to the order in ~~accordance with FASB Accounting Standard Codification 718, “Compensation – Stock Compensation,”~~which they were granted) will be treated as a nonqualified stock option. If, at the time an incentive stock option is granted, the employee recipient owns (after application of the rules contained in Section 424(d) of the Code) shares of common stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or ~~ASC 718. The assumptions used in calculating~~its subsidiaries, then: (a) the ~~grant date~~exercise price for such incentive stock option will be at least 110% of the fair market value of the shares of common stock subject to such incentive stock option ~~awards~~on the date of grant; and (b) such incentive stock option will not be exercisable after the date five years from the date such incentive stock option is granted. The maximum number of shares of common stock that may be issued under the 2020 Plan pursuant to incentive stock options may not exceed, in the aggregate, 1,000,000.

Transferability. A participant’s rights in an award may be assigned or transferred only in the event of death; provided, however, that the Committee may allow a participant to assign or transfer without consideration an award (other than an incentive stock option) to one or more members of his or her immediate family, to a partnership of which the only partners are ~~set forth in Note 1~~the participant or members of the ~~Financial Statements~~participant’s immediate family, or to ~~our Form 10-K~~a trust established by the participant for the ~~year ended December 31, 2017.~~

~~(2) - Mr. White was appointed Chief Executive Officer on August 15, 2017.~~

~~(3) - Mr. Gardner was appointed Chief Executive Officer on February 1, 2017 and resigned on August 15, 2017. Mr. Gardner remains the Company’s Chairman~~exclusive benefit of the ~~Board.~~

~~(4) - Mr. Nicolette was appointed Chief Executive Officer on May 1, 2016~~participant or one or more members of his or her immediate family. Incentive stock options may not be transferable by a participant other than by will or the laws of descent and ~~resigned on January 31, 2017.~~

~~Employment~~distribution and ~~Compensation Agreements~~

~~Patrick White entered into~~may only be exercisable during the participant’s lifetime by the participant.

Tax Withholding

The exercise or payment of awards and the issuance of shares under the 2020 Plan is conditioned upon a ~~two-year Employment Agreement~~participant making satisfactory arrangements for the satisfaction of any liability to withhold federal, state, local or foreign income or other taxes. In accordance with rules established by the Committee, the required tax withholding obligations may be settled in cash, or with shares, including shares that are part of the award that gives rise to the withholding requirement.

Effect of Certain Events

Death, Disability or Termination. The Committee may include in an award agreement provisions related to the death, disability or termination of employment or service of a participant, including without limitation the acceleration of the exercisability, vesting or settlement of, or the lapse of restrictions or deemed satisfaction of performance objectives with respect to, an award.

Change in Control. The Committee may provide in an award agreement provisions relating to a “change in control” of the Company, including without limitation the acceleration of the exercisability, vesting or settlement of, or the lapse of restrictions or deemed satisfaction of performance objectives with respect to, an award.

30

Table of Contents

“Change in ~~August 2017. Under that Employment Agreement, Mr. White receives annual~~control” generally means the occurrence of any one or more of the following events:

(a)

an individual, entity or group of persons acquires the ownership, directly or indirectly, of the Company’s securities representing more than 50% of the combined voting power of the Company’s outstanding securities, other than (i) through a merger, consolidation or similar transaction; (ii) in connection with a financing by the Company through the issuance of equity securities; and (iii) by an overall reduction in the number of the Company’s outstanding securities;

(b)

a merger, consolidation or similar transaction in which the Company’s stockholders immediately before such transaction do not own, directly or indirectly, more than 50% of the combined voting power of the surviving entity (or the parent of the surviving entity) in substantially the same proportions as their ownership immediately prior to such transaction;

(c)

a sale, lease, exclusive license or other disposition of all or substantially all of the Company’s assets, other than to an entity more than 50% of the combined voting power of which is owned by the Company’s stockholders in substantially the same proportions as their ownership of the Company’s outstanding voting securities immediately prior to such transaction;

(d)

a majority of the members of the board serving on the date the 2020 Plan is approved by the stockholders (the “Incumbent Board”) were no longer serving on the board within any 24-month period; provided that any new board member approved or recommended by a majority of the Incumbent Board then in office (other than as a result of any settlement of a proxy or consent solicitation contest or any action taken to avoid such a contest) will be considered a member of the Incumbent Board; or

(e)

the complete dissolution or liquidation of the Company.

No change in control shall be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the capital stock of the Company immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions.

Recoupment

Notwithstanding anything in the 2020 Plan or in any award agreement to the contrary, the Company will be entitled to the extent required by applicable law (including, without limitation, Section 10D of the Exchange Act and any regulations promulgated with respect thereto) or stock exchange listing conditions, in each case as in effect from time to time, to recoup compensation of ~~$200,000 per year~~ ~~of which $50,000 is being deferred until~~whatever kind paid under the ~~earlier of: (i)~~2020 Plan by the Company ~~has positive cash flow from operations; (ii) approval by the Board’s Compensation Committee; or (iii) August 9, 2019. Mr. White received a grant of 5,000,000 five-year stock options exercisable~~ at ~~$0.07 per share of which 3,000,000 vested upon execution of the Company’s standard Stock Option Agreement and the remaining 2,000,000 vest annually, in equal increments over a two year period.Mr. White received an additional grant of 2,000,000 five-year vested stock options exercisable at $0.07 per share.~~ any time.

Adjustments

In the event of any change in the outstanding shares of the Company by reason of any corporate transaction or change in corporate capitalization such as a stock split, reverse stock split, stock dividend, split-up, split-off, spin-off, recapitalization, merger, consolidation, rights offering, reorganization, combination, consolidation, subdivision or exchange of shares, a sale by the Company of all or part of its assets, any distribution to stockholders other than a normal cash dividend, partial or complete liquidation of the Company or similar event, the Committee or board, as applicable, shall adjust the (a) the class and aggregate number of shares available under the 2020 Plan; (b) the class, number and exercise price of outstanding stock options and stock appreciation rights granted under the 2020 Plan; and (c) the class and number of shares subject to any other awards granted under the 2020 Plan and the terms of such awards (including, without limitation, any applicable performance goals), as may be determined to be appropriate by the Committee or board.

31

Table of Contents

Amendments and Termination

The 2020 Plan may be amended in whole or in part at any time and from time to time by the board, and the terms of any outstanding award under the 2020 Plan may be amended from time to time by the Committee (or board as applicable) in its discretion provided that no amendment may be made without stockholder approval if such amendment would (a) increase the number of shares available for grant under the 2020 Plan; (b) change the class of persons eligible to receive incentive stock options; (c) decrease the minimum stock option or stock appreciation right exercise price; or (d) amend or repeal the prohibitions against repricing or exchange. No amendment may adversely affect in a material manner any right of a participant under an award without his or her written consent.

The 2020 Plan may be suspended in whole or in part at any time and from time to time by the board. The 2020 Plan shall terminate upon the adoption of a resolution of the board terminating the 2020 Plan. No award may be granted under the 2020 Plan after the date that is 10 years from the date the 2020 Plan was last approved and adopted by the stockholders of the Company. No termination of ~~Mr. White’s Employment Agreement~~the 2020 Plan shall materially alter or impair any of the rights or obligations of any person, without ~~cause, Mr. White~~his or her consent, under any award granted under the 2020 Plan.

New Plan Benefits

The benefits or amounts to be received by or allocated to participants and the number of shares to be granted under the 2020 Plan cannot be determined at this time because the amount and form of grants to be made to any eligible participant in any year is determined at the discretion of the Committee or board, as applicable.

Certain U.S. Federal Income Tax Consequences of 2020 Plan Awards

The following discussion is intended to provide only a general outline of the U.S. federal income tax consequences of participation in the 2020 Plan and the receipt of awards or payments thereunder by participants subject to U.S. taxes. It does not address any other taxes imposed by the United States, taxes imposed by any state or political subdivision thereof or foreign jurisdiction, or the tax consequences applicable to participants who are not subject to U.S. taxes. The discussion set forth below does not purport to be a complete analysis of all potential tax consequences relevant to recipients of awards, particular circumstances, or all awards available under the 2020 Plan. It is based on U.S. federal income tax law and interpretational authorities as of the date of this proxy statement, which are subject to change at any time.

Nonqualified stock options. A participant who exercises a nonqualified stock option recognizes taxable ordinary income in the year the stock option is exercised in an amount equal to the excess of the fair market value of the shares purchased on the exercise date over the exercise price. Subject to applicable provisions of the Code, including Section 162(m), the Company is entitled to ~~receive any unpaid salary and expenses,~~ a ~~payment~~tax deduction in an amount equal to ~~12 months~~the ordinary income recognized by the participant. Any gain or loss realized by the participant upon the subsequent disposition of ~~his salary~~the shares will be taxed as short-term (if held one year or less) or long-term (if held more than one year) capital gain, but will not result in any further deduction for the Company.

Incentive stock options. A participant who exercises an incentive stock option does not recognize ordinary income at the ~~rate in effect on~~time of exercise (although, the participant may be subject to alternative minimum tax), and the Company is not entitled to a tax deduction. Upon the disposition of the shares obtained from the exercise of the incentive stock option more than two years after the date of ~~such termination,~~grant and a continuation of benefits for a period of six-months. Additionally, in the event of termination, all options granted to Mr. White shall immediately vest and he shall be entitled to exercise those options for a period of one-year frommore than one year after the date of ~~termination.~~

19

~~On June 29, 2017,~~exercise, the ~~Company entered into a Consulting Agreement with Norman Gardner. Under the terms~~excess of the ~~Consulting Agreement Norman Gardner will receive a monthly consulting fee~~sale price of ~~$12,500~~the shares over ~~a three-year term beginning June 30, 2017. The Consulting Agreement provides that~~ the ~~Company will reimburse Mr. Gardner for up to $1,000 a month for health insurance and other medical expenses and will provide Mr. Gardner with a~~exercise price of the incentive stock option is taxed as long-term capital gain. If the shares are sold within two years of the grant of 10,000,000 stock options exercisable at $0.07 per share which are fully vested and exercisable over a five-year term. In the event of termination without cause, Mr. Gardner is entitled to receive any unpaid salary and expenses, a payment equal to 12 months of his consulting fee, and a continuation of benefits for a period of six-months. The Consulting Agreement further provides for 12 months of severance and health insurance reimbursement if it is terminated without cause and 18 months of severance and health insurance reimbursement upon a change of control if Mr. Gardner terminates the Agreementdate and/or within one year of the ~~change~~date of ~~control.~~

~~On October 6, 2017,~~exercise, the ~~Company entered into a Compensation Agreement with Howard Goldberg, terminating~~excess of the Company’s prior Agreement with Mr. Goldberg. Under the Compensation Agreement, the Company issued Mr. Goldberg the equivalent of $100,000 worth of units in its private placement, equivalent to 1,430,000 shares of common stock and 1,430,000 five-year warrants exercisable at $0.15 per share. Allfair market value of the shares on the date of exercise (or sale proceeds if less) over the exercise price is taxed as ordinary income, and, ~~warrants vested~~subject to applicable provisions of the Code, including Section 162(m), the Company is entitled to a tax deduction for this amount; any remaining gain is taxed as short-term capital gain, without a Company tax deduction.

32

Table of Contents

Stock appreciation rights. A participant who exercises a stock appreciation right recognizes taxable ordinary income in the year the stock appreciation right is exercised in an amount equal to the cash and/or the fair market value of any shares or other property received. Subject to applicable provisions of the Code, including Section 162(m), the Company is entitled to a tax deduction in an amount equal to the ordinary income recognized by the participant.

Restricted stock and restricted stock units. A participant normally will not recognize taxable income and the Company will not be entitled to a deduction upon the grant of shares of restricted stock, restricted stock units or other stock-based awards. When the restricted stock vests, the restricted stock units settle or the other stock-based awards are paid or settle, the participant will recognize taxable ordinary income in an amount equal to the fair market value of the shares or other property received at that time, less the amount, if any, paid for the shares, and, subject to applicable provisions of the Code, including Section 162(m), the Company will be entitled at that time to a deduction in the same amount. However, a participant may elect to recognize taxable ordinary income in the year shares of restricted stock are granted in an amount equal to the excess of their fair market value at the grant date, determined without regard to certain restrictions, over the amount, if any, paid for the shares. In that event, subject to applicable provisions of the Code, including Section 162(m), the Company will be entitled to a deduction in such year in the same amount. Any gain or loss realized by the participant upon the subsequent disposition of shares received will be taxed as short-term or long-term capital gain, but will not result in any further deduction for the Company.

Equity Compensation Plan Information as of December 31, ~~2017.~~ 2019

	Equity Compensation Plan Information
Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted average exercise price of outstanding options, warrants and rights	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)	(b)	(c)
Equity compensation plans approved by security holders ⁽¹⁾	177,800	$8.00	345,250
Equity compensation plans not approved by security holders ⁽²⁾	180,471	3.50	--
Total	358,271	$11.50	345,250

(1)

As of December 31, 2019, under the 2013 Omnibus Equity Compensation Plan, as amended, (the “2013 Plan”) and the 2017 Plan, grants of restricted stock and options to purchase 56,750 shares of common stock have been issued and are unvested or unexercised, and 345,250 shares of common stock remain available for grants under the 2013 Plan and the 2017 Plan.

(2)

Consists of individual grants to employees and consultants for services rendered to the Company which were not made under the Company’s existing equity incentive plans.

33

Table of Contents

Vote Required

The ~~$100,000 was comprised of~~ ~~$57,750 owed to Mr. Goldberg for consulting services, $10,750 due to Norman Gardner as accrued compensation which was transferred to Mr. Goldberg, and one-half~~affirmative vote of a ~~loan made~~majority of the shares cast on this proposal is required for approval of the 2020 Plan.

The board of directors recommends that you vote FOR the proposal to approve the 2020 Equity Incentive Plan.

34

Table of Contents

PROPOSAL THREE:

RATIFICATION OF THE appointment of

OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee has selected the accounting firm of MaloneBailey, LLP (“MaloneBailey”) to serve as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2020. The stockholders are being asked to ratify the Audit Committee’s selection of MaloneBailey.

Stockholder ratification of the selection of MaloneBailey is not required by our Bylaws or otherwise. However, the board is submitting the selection of our independent registered accounting firm to the stockholders for ratification as a ~~third party valued~~matter of good corporate governance. If the stockholders fail to ratify this appointment, the Audit Committee may, but is not required to, reconsider whether to retain MaloneBailey. Even if the appointment is ratified, the Audit Committee in its discretion may direct the appointment of a different accounting firm at ~~$31,500 which Mr. Goldberg was entitled to.~~

~~On January 9, 2018,~~any time during the year if it determines that such a change would be in the best interests of the Company ~~entered into~~and its stockholders. We have been advised by MaloneBailey that a ~~Consulting Services Agreement with~~representative will be present at the ~~CFO Squad LLC (the “CFOS”). Pursuant~~Annual Meeting and will be available to respond to appropriate questions. We intend to give such representative an opportunity to make a statement if he or she should so desire.

The board of directors recommends that you vote FOR the ~~terms~~proposal to ratify the selection of ~~the Consulting Services Agreement, CFOS provides the Company with outsourced chief financial services,~~MaloneBailey, LLP as our independent registered public accounting and pre-audit services for $48,000 per year, payable in equal monthly amounts. On January 11, 2018, in connection with the Consulting Services Agreement, the Company appointed Mr. James S. Cardwell as Chief Financial Officer (“CFO”), on a part-time basis. Under a one-year Consulting Agreement, Mr. Cardwell is being compensated at an annual rate of $12,000, per year, payable in equal monthly amounts. Either party may terminate the Consulting Services Agreement upon 10 days written notice and either party may terminate the Consulting Agreement upon 10 days written notice.

~~In August 2017 the Company entered into~~ a one-year Consulting Agreement with Mr. Vasan Thatham, the Company’s former Chief Financial Officer, to compensate Mr. Thatham at an annual rate of $48,000, per year, payable in equal monthly amounts. The Company provided Mr. Thatham with the required 60 days’ notice of termination in Mr. Thatham’s Consulting Agreement in January 2018 after learning of his serious health issues.

~~Outstanding equity awards at fiscal year-end~~

~~The table in the “Summary Compensation Table” section of this Proxy Statement sets forth the outstanding equity awards~~firm for the ~~Company’s Named Executive Officers as of the end of our~~ fiscal year ~~ended~~ending December 31, ~~2017.~~

~~The table in the “Director Compensation” Section of this Proxy Statement sets forth the outstanding equity awards~~2020.

Fees for ~~the Company’s Directors as of the end of our fiscal year ended December 31, 2017.~~

Except for those listed in the “Summary Compensation Table” and “Director Compensation” sections of this Proxy Statement, there were no outstanding equity awards at the end of our fiscal year ended December 31, 2017.

20

~~Director Compensation~~ ~~for the Fiscal Year ending 2017~~

Stock Option Other Total
Name and Principal Awards Awards Compensation Compensation
Position Year ($) ($) ($) ($)
Norman Gardner 2017 682,007 (2) 682,007
Laurence Blickman (3) 2017 4,388 4,388
Marshall Geller (3) 2017 4,388 4,388
Howard Goldberg (3) 2017 4,388 (4) 21,829 100,000 126,167
Claudio Ballard (1) (3) 2017 4,388 4,388
Paul Klapper (3) (5) 2017 4,388 4,388
Lawrence G. Schafran (3) 2017 4,388 4,388
Patrick White 2017 240,631 (2) 240,631

~~(1) Deceased.~~

(2) Represents the grant date fair value of an option award, calculated in accordance with FASB Accounting Standard Codification 718, “Compensation – Stock Compensation,” or ASC 718. The assumptions used in calculating the grant date fair value of the option awards are set forth in Note 1 of our Consolidated Financial Statements ~~on our Form 10-K for the year ended December 31, 2017~~.

(3). Represents a grant of 300,000 shares of restricted common stock in August 2017, vesting quarterly subject to continued service as a director. See the “Related Person Transactions” section above for a description of the accelerated vesting of the restricted common stock.

(4~~). Includes 1,430,000 vested five-year Warrants included as Non-equity incentive plan compensation.~~

(5~~). See “Related Person Transactions” beginning at page with respect to acceleration of Mr. Klapper’s options and related transactions.~~

~~Our non-employee directors are eligible to receive options, restricted stock and other equity linked grants under our equity incentive plans.~~

21

~~Outstanding Equity Awards at Fiscal Year-End~~

Name Option awards
Number of
securities
underlying
unexercised
options
(#) exercisable
Number of securities
underlying
unexercised
options
(#) unexercisable
Equity
incentive
plan awards: Number of
securities
underlying
unexercised
unearned
options
(#)
Option
exercise price
($)
Option
expiration date
(a) (b) (c) (d) (e) (f)
Norman Gardner 10,415,000 (1) (2)
Thomas Nicolette 100,000 (3) $0.01 5/01/2021
Patrick White 5,000,000 2,000,000 (4) 8/15/2022

~~(1) 10,000,000 options are exercisable at $0.07 per share, 165,000 options are exercisable at $0.11 per share, and 250,000 options are exercisable at $0.25 per share.~~

~~(2) 10,000,000 options expire on June 28, 2022, and 415,000 options expire on December 21, 2021.~~

~~(3) Subsequently exercised in February 2018.~~

~~(4) 5,000,000 options are exercisable on 08/15/2017, 1,000,000 options are exercisable on 8/15/2018, and 1,000,000 are exercisable on 8/15/2019.~~

22

~~Equity compensation plan information~~

During 2013, the Board adopted, and our shareholders approved, a new comprehensive incentive compensation plan (the “2013 Plan”) which served as the successor incentive compensation plan to a 2003 Stock Option Plan covering (i) 20,000,000 new shares of our common stock, plus (ii) the number of shares of our common stock subject to outstanding grants under the 2003 Plan as of the date of the 2013 Annual Meeting, plus (iii) the number of shares of our common stock remaining available for issuance under the 2003 Plan.

~~The 2013 Plan covers~~ ~~22,013,530~~ ~~outstanding options and no longer will be used for future grants.~~

On November 14, 2017, the Company adopted the Company’s 2017 Equity Incentive Plan (the “Plan”) which provides for the issuance of awards covering 13,000,000 shares of common stock under the Plan. Awards granted under the Plan may be Incentive Stock Option, Non-Qualified Stock Options, Stock Appreciation Rights, or Restricted Stock Units which are awarded to all employees, consultants and directors of the Company.

~~Equity compensation plan information as of December 31, 2017~~

(a) (b) (c)
Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity
compensation plans
approved by
security holders*
22,013,530 $0.11 n/a
Equity
compensation plans
not approved by
security
holders
0 n/a 13,050,000
Total 22,013,530 $0.11 13,050,000

* As of December 31, 2017, under the 2013 Equity Incentive Plan and 2017 Equity Incentive Plan.

23

~~Legal proceedings~~

From time to time, the Company may be a party to, or otherwise involved in, legal proceedings arising in the normal course of business. As of the date of the mailing of this proxy statement, the Company is not aware of any proceedings, threatened or pending, against it which, if determined adversely, would have a material effect on its business, results of operations, cash flows or financial position.

~~Principal Accounting Fees and~~Professional Services

~~All of the services provided and fees charged~~ Provided by MaloneBailey, LLP~~, our principal accountant, were approved by our Audit Committee.~~

The following table shows ~~the~~ fees ~~paid to~~ for professional services provided by MaloneBailey ~~LLP~~ ~~for~~during the fiscal year ended December 31, ~~2017~~2019, which we refer to as fiscal year 2019 and ~~the fees paid to our former auditor,~~ ~~Morison Cogen LLP, for~~ the fiscal year ended December 31, ~~2016.~~

Year Ended
December 31,
2017
($)

Year Ended
December 31,
2016
($)

Audit Fees – Morison Cogan (1) 59,500 66,900
Audit Fees – MaloneBailey (1) 38,000 0
Audit Related Fees (2) 4,000 0
Tax Fees 0 0
All Other Fees 0 0
Total 101,500 66,900

~~———————~~

2018, which we refer to as fiscal year 2018.

	Fiscal Year 2019		Fiscal Year 2018
Audit Fees ⁽¹⁾	$	57,000	$	44,000
Tax Fees ⁽²⁾		5,000		5,000
All Other Fees ⁽³⁾		8,640		3,000
Total	$	70,640	$	52,000

(1)

Audit ~~fees – these~~ fees relate to services rendered for the audits of our annual ~~consolidated~~ financial statements, for the review of our quarterly financial statements, and for services that are normally provided by the auditor in connection with statutory and regulatory filings or engagements.

(2)

Tax fees relate to services performed in connection with the Company’s annual tax return.

(3)

All other fees relate to services rendered in connection with our registration statement filings with the SEC.

We did not incur any audit related fees in fiscal years 2019 or 2018.


~~(2)~~35	~~Audit related fees – these fees relate to audit related consulting.~~

24

Table of Contents

~~Audit Committee’s~~

Policy on Pre-Approval ~~Policy~~

of Retention of Independent Registered Public Accounting Firm

The Audit Committee pre-approves all audit and permissible non-audit services on a case-by-case basis. In its review of non-audit services, the Audit Committee considers whether the engagement could compromise the independence of our independent registered public accounting firm, and whether the reasons of efficiency or convenience is in our best interest to engage our independent registered public accounting firm to perform the services. All of the services provided and fees charged by MaloneBailey ~~LLP~~ were approved by our Audit Committee.

~~PROPOSAL 2. TO RATIFY THE ADOPTION~~

Independence Analysis by Audit Committee

The Audit Committee considered whether the provision of the services described above was compatible with maintaining the independence of MaloneBailey and determined that the provision of these services was compatible with the firm’s independence.

REPORT OF THE ~~COMPANY’S 2017 EQUITY INCENTIVE PLAN~~AUDIT COMMITTEE

In connection with our financial statements for the fiscal year ended December 31, 2019, the Audit Committee has (1) reviewed and discussed the audited financial statements with management; (2) discussed with the independent registered public accounting firm (the “Auditors”) the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the SEC; and (3) received the written disclosures and the letter from the Auditors required by applicable requirements of the Public Company Accounting Oversight Board regarding the Auditors’ communications with the audit committee concerning independence, and has discussed with the Auditors their independence.

Based on the review and discussions referred to in items (1) through (3) of the above paragraph, the Audit Committee recommended to the board of directors that the audited financial statements be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 for filing with the SEC.

Scott Greenberg, Chair

Marshall Geller

Howard Goldberg

36

Table of Contents

DELINQUENT SECTION 16(a) REPORTS

Section 16(a) of the Exchange Act requires directors, officers and greater than 10% stockholders to file with the SEC reports of ownership and changes in ownership regarding their holdings in Company securities. During fiscal year 2019, all of our directors and officers timely complied with the filing requirements of Section 16(a) of the Exchange Act, except for Patrick White, a director and officer, who filed one late Form 4 with respect to one transaction, and Chris Gardner, a director, who filed a late Form 3 and reported four late Form 4 transactions on a timely filed Form 5. In making this statement, we have relied upon the written representations of our directors and officers, and copies of the reports that they have filed with the SEC.

Certain Relationships and Related person Transactions

The ~~Board has adopted~~following is a ~~resolution declaring it advisable~~summary of transactions since January 1, 2018 to which we have been a party in which the amount involved exceeded the lesser of $120,000 or one percent of the average of our total assets at the end of the last two recent fiscal years and in which any of our executive officers, directors, director nominees or beneficial holders of more than five percent of our capital stock had or will have a direct or indirect material interest, other than compensation arrangements which are described under the ~~best interests~~sections of ~~VerifyMe~~this proxy statement entitled “Executive Compensation” and ~~its shareholders~~“Director Compensation.”

On March 6, 2020, we completed the offering of $1,992,000 of senior secured convertible debentures (the “2020 Debentures”) and 498,000 warrants to purchase common stock (the “2020 Warrants”). Certain of our directors and officers participated in the offering as follows:

·

Chris Gardner - $50,000 of 2020 Debentures and 2020 Warrants for 12,500 shares;

·

Marshall Geller - $100,000 of 2020 Debentures and 2020 Warrants for 25,000 shares;

·

Scott Greenburg - $20,000 of 2020 Debentures and 2020 Warrants for 5,000 shares;

·

Arthur Laffer - $80,000 of 2020 Debentures and 2020 Warrants for 20,000 shares; and

·

Sandy Fliderman, through an entity of which he is a 51% owner and co-manager - $80,000 of 2020 Debentures and 2020 Warrants for 20,000 shares.

On June 22, 2020, we completed an underwritten public offering of units (the “Units”) consisting of one share of our common stock and a warrant to purchase one share of common stock at an exercise price equal to $4.60 per share of common stock. The public offering price was $4.60 per Unit. Marshall Geller purchased 7,000 Units in the offering for an approximate purchase price of $32,000, and Arthur Laffer purchased 10,800 Units in the offering for an approximate purchase price of $50,000.

Also on June 22, 2020, immediately upon closing of the offering described above, we cancelled the 2020 Warrants issued to the four directors and the entity related to Sandy Fliderman and in lieu thereof, the directors and the entity related to Sandy Fliderman received 0.4 share of common stock for each share formerly underlying such cancelled 2020 Warrant. As a result, Chris Gardner received 5,000 shares of common stock with approximate value of $20,000; Marshall Geller received 10,000 shares of common stock with an approximate value of $40,000; Scott Greenberg received 2,000 shares of common stock with an approximate value of $8,000; and Arthur Laffer and the entity related to Sandy Fliderman each received 8,000 shares of common stock with an approximate value of $32,000.

37

Table of Contents

Also on June 22, 2020, immediately upon the closing of the offering described above, the 2020 Debentures issued to the four directors and the entity related to Sandy Fliderman were automatically converted into shares of common stock and warrants to purchase shares of common stock. As a result, Chris Gardner received 16,009 shares of common stock and warrants to purchase 16,009 shares of common stock with an approximate value of $64,000; Marshall Geller received 31,941 shares of common stock and warrants to purchase 31,941 shares of common stock with an approximate value of $128,000; Scott Greenberg received 6,403 shares of common stock and warrants to purchase 6,403 shares of common stock with an approximate value of $26,000; Arthur Laffer received 25,600 shares of common stock and warrants to purchase 25,600 shares of common stock with an approximate value of $103,000; and the entity related to Sandy Fliderman received 25,614 shares of common stock and warrants to purchase 25,614 shares of common stock with an approximate value of $103,000.

In January 2018, we issued 34,994 shares and 34,994 warrants to purchase common stock at an exercise price of $7.50 per share to entities controlled by Paul Klapper, a former member of our board of directors, relating to a note payable conversion that took place in June 2017 prior to the ~~Plan~~time he became a director.

On February 19, 2018, we authorized a warrant reduction program (the “Program”) permitting warrant holders of our outstanding $7.50 warrants to exercise their warrants for $5.00 (the “Reduced Price”) under the terms of the Program. We received total gross proceeds of approximately $2,079,345 from the exercise of warrants under the Program at the Reduced Price. Included in the above amounts are gross proceeds of $1,205,458 from then directors including $572,000 from Carl Berg, $110,000 from Marshall Geller, $71,500 from Harvey Eisen, and $451,958 from Laurence Blickman.

On March 31, 2018, we entered into the Settlement Agreement with Paul Klapper, who was at the time a member of our board, and certain other parties named in the Settlement Agreement. Pursuant to the terms of the Settlement Agreement, we (i) paid a total of $500,000 (the “Settlement Amount”) to a fund controlled by Paul Klapper and an additional party and (ii) issued a total of 20,000 shares of our common stock to the fund and the third party (the “Settlement Shares”). The Settlement Agreement provides for the cancellation of certain revenue sharing agreements, as of March 31, 2018, between us and Mr. Klapper (or an affiliate) and the third party, and terminates our obligation to issue Mr. Klapper or affiliates warrants to purchase 74,000 shares of our common stock at an exercise price of $20.00 per share. As a condition of entering into the Settlement Agreement, we accelerated the vesting of 3,000 shares of restricted common stock held by Mr. Klapper which were part of a 6,000 share grant on August 2017. Mr. Klapper joined the board on July 14, 2017 and resigned as of March 31, 2018.

On July 31, 2018, our former director, Laurence Blickman, exercised 28,790 warrants held by an entity under his control at an exercise price of $7.50 per share for a total price of $215,929.

In 2017, we authorized a private placement with a maximum offering amount of $2,100,000 allowing investors to purchase units consisting of 14,300 shares of common stock and 14,300 five-year warrants exercisable at $7.50 per share. In January 2018, we approved an increase in the offering. The following directors or former directors of ours purchased the following securities in connection with the offering:

·

Carl Berg - $400,000 for 114,400 shares and 114,400 warrants;

·

Laurence Blickman $ 292,343 for 83,448 shares and 83,448 warrants;

·

Harvey Eisen - $50,000 for 14,300 shares and 14,300 warrants;

·

Marshall Geller - $250,000 for 71,500 shares and 71,500 warrants;

·

Howard Goldberg - $115,000 for 32,890 shares and 32,890 warrants;

·

Larry Schafran - $120,000 for 34,320 shares and 34,320 warrants (including shares issued to a member of Schafran’s household);

·

Paul Klapper - $26,000 for 7,436 shares and 7,436 warrants.

38

Table of Contents

OTHER MATTERS

As of the date of this proxy statement, the board of directors does not know of any other matters that are to be ~~approved by our shareholders. The Board recommends that such proposal be submitted to VerifyMe’s shareholders~~presented for action at the Annual Meeting. ~~A copy of~~Should any other matter come before the ~~Plan is attached to this Proxy Statement as~~ ~~Annex A.~~

~~Overview and purpose of~~Annual Meeting, the ~~shareholder approval~~

The Plan, will allow us to incentivize the Company’s key employees with long-term compensation awards, such as stock options and restricted stock. Equity incentives may form an integral part of the compensation paid to the Company’s employees, particularly those in positions of key importance. Approval of the Plan is therefore critical to the Company’s ability to continue to attract, retain, engage and focus highly motivated and qualified employees, particularlypersons named in the ~~competitive labor market that exists today.~~

~~No appraisal rights~~

~~Shareholders~~enclosed proxy will have ~~no rights under the Nevada Revised Statutes or under the Company’s charter documents~~discretionary authority to ~~exercise dissenters’ rights of appraisal~~vote all proxies with respect to the ~~approval~~matter in accordance with their judgment.

	By Order of the Board of Directors

	Patrick White
	President and Chief Executive Officer

Rochester, New York
August 20, 2020

We will make available at no cost, upon your written request, a copy of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (without exhibits) as filed with the Securities and Exchange Commission. Copies of exhibits to our Form 10-K will be made available, upon your written request and payment to us of the reasonable costs of reproduction and mailing, if any. Written requests should be made to: Patrick White, President and Chief Executive Officer, VerifyMe, Inc., 75 S. Clinton Ave., Suite 510, Rochester, New York 14604.

39

Table of Contents

APPENDIX A

VERIFYME, INC.

2020 EQUITY INCENTIVE PLAN

Section 1. Purpose

The purpose of the ~~Plan.~~

~~Description~~VerifyMe, Inc. 2020 Equity Incentive Plan (the “Plan”) is to promote stockholder value and the future success of VerifyMe, Inc. (the “Company”) by providing appropriate retention and performance incentives to the ~~Plan~~

~~In the following paragraphs we provide a summary of the terms of the Plan.~~

~~Background~~

~~The Plan is a broad-based equity incentive plan in which all~~ employees ~~consultants~~ and non-employee directors of the Company and its ~~affiliates~~Affiliates (as defined below), and ~~such~~any other individuals ~~designated by the Board or committee administering the plan~~ who are reasonably expected to become employees, consultants and directors are eligible to participate (collectively the “Eligible Parties”). The purpose of the Plan is to further the growth and development ofperform services for the Company ~~by providing, through ownership~~or its Affiliates.

Section 2. Definitions

2.1 “Affiliate” means any entity in which the Company has a direct or indirect equity interest of ~~stock~~50 percent or more, any entity included in the audited consolidated financial statements of the Company and any other ~~equity-based awards,~~entity in which the Company has a substantial ownership interest and which has been designated as an ~~incentive to its Eligible Parties who are in a position to contribute materially to the prosperity~~Affiliate for purposes of the ~~Company,~~Plan by the Committee in its sole discretion.

2.2 “Award” means any form of incentive or performance award granted under the Plan to ~~increase such persons’ interests~~a Participant by the Committee pursuant to any terms and conditions that the Committee may establish and set forth in the ~~Company’s welfare, by encouraging them to continue their services to the Company, and by enabling the Company to attract individuals of outstanding ability to become Eligible Parties of the Company.~~

25

~~Administration and eligibility~~

The Plan is to be administered by the Board, or by the Compensation Committee if appointed by the Board to administer the Plan, which collectively we refer to as the “Administrator.” The Board may delegate to officers of the Company the power to grant awards to the extent permitted by the laws of the state of Nevada.

applicable Award Agreement. Awards granted under the Plan may ~~be Incentive Stock Option (“ISOs”), Non-Qualified Stock~~consist of: (a) Options granted pursuant to Section 7; (b) Stock Appreciation Rights ~~(“SARs”) or~~granted pursuant to Section 8; (c) Restricted Stock ~~which are awarded~~granted pursuant to ~~Eligible Parties, who, in~~Section 9; (d) Restricted Stock Units granted pursuant to Section 9; and (e) Other Stock-Based Awards granted pursuant to Section 10.

2.3 “Award Agreement” means the ~~opinion~~written or electronic document(s) evidencing the grant of an Award to a Participant.

2.4 “Board” means the Board of Directors of the ~~Administrator, have contributed,~~Company.

2.5 “Change in Control” means the happening of any of the following:

(a) any Exchange Act Person becomes the owner, directly or ~~are expected to contribute, materially to~~indirectly, of securities of the Company representing more than 50 percent of the combined voting power of the Company’s ~~success.~~

~~The identification~~then outstanding securities other than by virtue of ~~individuals entitled~~a merger, consolidation or similar transaction. Notwithstanding the foregoing, a Change in Control will not be deemed to ~~receive awards, the terms~~occur (A) on account of the ~~awards, and~~acquisition of securities of the Company by an investor, any affiliate thereof or any other Exchange Act Person from the Company in a transaction or series of related transactions the primary purpose of which is to obtain financing for the Company through the issuance of equity securities or (B) solely because the level of ownership held by any Exchange Act Person (the “Subject Person”) exceeds the designated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition of voting securities by the Company reducing the number of shares outstanding, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of voting securities by the Company, and after such share acquisition, the Subject Person becomes the owner of any additional voting securities that, assuming the repurchase or other acquisition had not occurred, increases the percentage of the then outstanding voting securities owned by the Subject Person over the designated percentage threshold, then a Change in Control will be deemed to occur;

A-1

Table of Contents

(b) there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not own, directly or indirectly, either (A) outstanding voting securities representing more than 50 percent of the combined outstanding voting power of the surviving entity in such merger, consolidation or similar transaction or (B) more than 50 percent of the combined outstanding voting power of the parent of the surviving entity in such merger, consolidation or similar transaction, in each case in substantially the same proportions relative to each other as their ownership of the outstanding voting securities of the Company immediately prior to such transaction;

(c) there is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets of the Company and its Affiliates, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its Affiliates to an entity, more than 50 percent of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions relative to each other as their ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, license or other disposition;

(d) individuals who, immediately following the Effective Date, are members of the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the members of the Board within any 24-month period; provided, however, that if the appointment or election (or nomination for election) of any new Board member was approved or recommended by a majority vote of the members of the Incumbent Board then still in office (other than as a result of any settlement of a proxy or consent solicitation contest or any action taken to avoid such a contest), such new member will, for purposes of the Plan, be considered as a member of the Incumbent Board; or

(e) the complete dissolution or liquidation of the Company.

Notwithstanding the foregoing, a “Change in Control” will not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the capital stock of the Company immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions.

In addition, solely with respect to any Award that constitutes “deferred compensation” subject to ~~individual awards,~~Section 409A and that is payable on account of a Change in Control (including any installments that are ~~determined by~~accelerated on account of a Change in Control), a Change in Control will occur only if such event also constitutes a “change in the ~~Administrator,~~ownership,” “change in ~~its sole discretion. As~~effective control,” or a “change in the ownership of a substantial portion of assets” of the ~~Record Date, approximately nine Eligible Parties were eligible to participate in the Plan.~~

~~Stock options~~

~~The Administrator may grant either qualified options, which~~Company as those terms are ~~options that qualify as ISOs under~~defined by Section ~~422(b)~~1.409A-3(i)(5) of the Treasury Regulations, but only to the extent necessary to establish a time or form of payment that complies with Section 409A, without altering the definition of Change in Control for purposes of determining whether a Participant’s rights to such Award become vested or otherwise unconditional upon the Change in Control.

2.6 “Code” means the Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated and other official guidance issued thereunder.

2.7 “Committee” means the Compensation Committee of the Board, or ~~Non-Qualified Stock Options. A stock option entitles~~any successor committee that the ~~recipient~~Board may designate to ~~purchase~~administer the Plan, provided such Committee consists of two or more individuals. Each member of the Committee must be (a) a ~~specified number~~“Non-Employee Director” within the meaning of Rule 16b-3 under the Exchange Act, and (b) a non-employee director meeting the independence requirements for compensation committee members under the rules and regulations of the Exchange on which the shares of ~~common stock at a fixed price subject~~Common Stock are traded. References to ~~terms and conditions set by~~“Committee” include persons to whom the Administrator, including conditions for exercise that must be satisfied, which typically will be based solely on continued provision of services. The purchase price of shares of common stock covered by a stock option cannot be less than 100% of the fair market valueCommittee has delegated authority pursuant to Section 3.4.

A-2

Table of Contents

2.8 “Common Stock” means the common stock, ~~on the last trading day prior to the date the option is granted. Fair market~~par value $0.001 per share, of the ~~common~~Company, and stock ~~is generally equal~~of any other class or company into which such shares may thereafter be changed.

2.9 “Company” means VerifyMe, Inc., a Nevada corporation.

2.10 “Disability” with respect to a Participant, has the ~~closing price for~~meaning assigned to such term under the ~~common stock on the trading date before the option is granted.~~

~~Stock appreciation rights~~

~~A SAR entitles the holder to receive, as designated~~long-term disability plan maintained by the ~~Administrator, cash~~Company or shares of common stock, having a value equal to the excess of the fair market value of a specified number of shares of common stock at the time of exercise over the exercise price established by the Administrator.

~~The exercise price of each SAR granted under the Plan shall be established by the Administrator or shall be determined by the method established by the Administrator~~an Affiliate in which such Participant is covered at the time the ~~SAR~~determination is made, and if there is no such plan, means the permanent inability as a result of accident or sickness to perform any and every duty pertaining to such Participant’s occupation or employment for which the Participant is suited by reason of the Participant’s previous training, education and experience; provided that, for Incentive Stock Options, Disability will mean a “permanent and total disability” as defined by Section 22(e) of the Code; and provided further, that to the extent an Award subject to Section 409A is payable upon a Participant’s Disability, a Disability will not be deemed to have occurred for such purposes unless the circumstances would also result in a “disability” within the meaning of Section 409A, unless otherwise provided in the Award Agreement.

2.11 “Effective Date” means the date on which the Plan is approved by the stockholders of the Company.

2.12 “Exchange” means the Nasdaq Stock Market, or such other principal securities market on which the shares of Common Stock are traded.

2.13 “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the regulations and interpretations thereunder.

2.14 “Exchange Act Person” means any natural person, entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act), except that “Exchange Act Person” will not include (i) the Company or any Affiliate, (ii) any employee benefit plan of the Company or any Affiliate or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Affiliate, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, (iv) an entity owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company; or (v) any natural person, entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the Effective Date, is the owner, directly or indirectly, of securities of the Company representing more than 50 percent of the combined voting power of the Company’s then outstanding securities.

2.15 “Fair Market Value” of a share of Common Stock as of any specific date means the per share closing price reported by the Exchange on such date, or, if there is no such reported closing price on such date, then the per share closing price reported by the Exchange on the last previous day on which such closing price was reported, or such other value as determined by the Committee in accordance with applicable law. The Fair Market Value of any property other than shares of Common Stock means the market value of such property as determined by the Committee using such methods or procedures as it may establish from time to time.

A-3

Table of Contents

2.16 “Incentive Stock Option” means an Option that qualifies as an incentive stock option under Section 422 of the Code.

2.17 “Nonqualified Stock Option” means an Option that does not qualify as an Incentive Stock Option or which is designated a Nonqualified Stock Option.

2.18 “Option” means a right to purchase shares of Common Stock at a specified exercise price that is granted ~~provided~~subject to certain terms and conditions pursuant to Section 7, and includes both Incentive Stock Options and Nonqualified Stock Options.

2.19 “Other Stock-Based Award” means an Award denominated in shares of Common Stock that is granted subject to certain terms and conditions pursuant to Section 10.

2.20 “Participant” means an individual who has been granted an Award under the ~~exercise price shall~~Plan, or in the event of the death of such individual, the individual’s beneficiary.

2.21 “Person” means any individual, corporation, firm, partnership, joint venture, limited liability company, estate, trust, business association, organization, or other entity.

2.22 “Prior Plan” means the VerifyMe, Inc. 2017 Equity Incentive Plan.

2.23 “Restricted Period” means the period during which Restricted Stock may not be ~~less than 100%~~sold, assigned, transferred, pledged, hypothecated or otherwise disposed of.

2.24 “Restricted Stock” means an Award of shares of Common Stock that is granted subject to certain terms and conditions pursuant to Section 9.

2.25 “Restricted Stock Unit” means an Award of a right to receive shares of Common Stock (or an equivalent value in cash or other property, or any combination thereof) that is granted subject to certain terms and conditions pursuant to Section 9.

2.26 “Section 409A” means Section 409A of the ~~fair market~~Code.

2.27 “Stock Appreciation Right” means a right to receive (without payment to the Company) cash, shares of Common Stock or other property, or any combination thereof, as determined by the Committee, based on the increase in the value of a share of ~~common stock~~Common Stock over the per share exercise price, that is granted subject to certain terms and conditions pursuant to Section 8.

2.28 “Treasury Regulations” means the tax regulations promulgated under the Code.

Section 3. Administration

3.1 Administration and Authority. Except as otherwise specified herein, the Plan will be administered solely by the Committee. Subject only to Section 3.2, the Committee has all the powers vested in it by the terms of the Plan set forth herein, such powers to include exclusive authority to select the employees and other individuals to be granted Awards under the Plan, to determine the type, size and terms of the Award to be made to each individual selected, to determine the time when Awards will be granted, to establish performance objectives, to prescribe the form of Award Agreement and to modify the terms of any Award that has been granted. The Committee is authorized to interpret the Plan and the Awards granted under the Plan, to establish, amend and rescind any rules and regulations relating to the Plan, and to make any other determinations that it deems necessary or desirable for the administration of the Plan. The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any Award in the manner and to the extent the Committee deems necessary or desirable to carry it into effect. Any decision of the Committee in the interpretation and administration of the Plan, as described herein, will lie within its sole and absolute discretion and will be final, conclusive and binding on all parties concerned.

A-4

Table of Contents

3.2 Non-Employee Director Awards. In respect of Awards granted to non-employee directors of the Company or its Affiliates, the Board has all the powers otherwise vested in the Committee by the terms of the Plan set forth herein, including the exclusive authority to select the non-employee directors to be granted Awards under the Plan, to determine the type, size and terms of the Award to be made to each non-employee director selected, to modify the terms of any Award that has been granted to a non-employee director, to determine the time when Awards will be granted to non-employee directors and to prescribe the form of the Award Agreement embodying Awards made under the Plan to non-employee directors.

3.3 Repricing Prohibited Absent Stockholder Approval. Notwithstanding any provision of the Plan, except for adjustments pursuant to Section 12, neither the Board nor the Committee may, without the prior approval of the stockholders of the Company, (a) reduce, directly or indirectly, the per-share exercise price of an outstanding Option or Stock Appreciation Right after it is granted; (b) cancel an Option or Stock Appreciation Right when the exercise price of the Option or Stock Appreciation Right exceeds the Fair Market Value of a Share in exchange for cash or another Award (other than in connection with a Change in Control); or (c) take any other action that is treated as a repricing under United States generally accepted accounting principles or by the rules or regulations of the Exchange.

3.4 Delegation. The Committee may authorize any one or more of its members or any officer of the Company to execute and deliver documents or to take any other action on behalf of the Committee with respect to Awards made or to be made to Participants, subject to the requirements of applicable law, including without limitation, Section 16 of the Exchange Act.

3.5 Indemnification. No member of the Committee and no officer of the Company will be liable for anything done or omitted to be done by him, by any other member of the Committee or by any officer of the Company in connection with the performance of duties under the Plan, except for his own willful misconduct or gross negligence, or as expressly provided by applicable law, and the Company will indemnify each member of the Committee and officer of the Company against any such liability.

Section 4. Participation

4.1 Eligible Individuals. Consistent with the purposes of the Plan, subject to Section 3.2, the Committee will have exclusive power to select the employees and non-employee directors of the Company and its Affiliates and other individuals performing services for the Company and its Affiliates who may participate in the Plan and be granted Awards under the Plan.

4.2 Condition to Receipt of Awards. Unless otherwise waived by the Committee, no prospective Participant will have any rights with respect to an Award unless and until such Participant has executed an Award Agreement evidencing the Award, delivered a fully executed copy thereof to the Company, and otherwise complied with the applicable terms and conditions of such Award.

A-5

Table of Contents

Section 5. Shares Subject to Plan

5.1 Maximum Number of Shares that May Be Issued.

(a) Available Shares. Subject to adjustment as provided in Section 12, the maximum number of shares of Common Stock reserved and available for grant and issuance pursuant to the Plan as of the Effective Date will be (i) 1,069,110, plus (ii) the number of shares of Common Stock available for issuance under the Prior Plan on the Effective Date. If the Plan is approved by the stockholders of the Company on the Effective Date, no awards may be granted under the Prior Plan on or after the Effective Date.

(b) Share Counting. For purposes of counting shares against the maximum number of shares of Common Stock that may be issued under the Plan as described in Section 5.1(a), on the date of grant, Awards denominated solely in shares of Common Stock (such as Options and Restricted Stock) and other Awards that may be exercised for, settled in or convertible into shares of Common Stock will be counted against the Plan reserve on the date of grant of the Award based on the maximum number of shares that may be issued pursuant to the Award, as determined by the Committee.

(c) Shares Added Back. Shares of Common Stock related to Awards issued under the Plan or the Prior Plan that are forfeited, canceled, expired or otherwise terminated without the issuance of shares of Common Stock will be added back and again available for issuance under the Plan. In addition, shares of Common Stock that are retained or reacquired by the Company to satisfy the exercise price or purchase price of an Award or to satisfy the tax withholding obligation in connection with an Award, as well as any shares of Common Stock covered by an Award that is settled in cash, will be added back and again be available for issuance under the Plan.

(d) Source of Shares. Shares of Common Stock issued pursuant to the Plan may be authorized but unissued shares, treasury shares, reacquired shares or any combination thereof.

(e) Assumed or Substituted Awards. Awards granted through the assumption of, or substitution for, outstanding awards previously granted by a company acquired by the Company or any Affiliate, or with which the Company or any Affiliate combines, will not reduce the maximum number of shares of Common Stock that may be issued under the Plan as described in Section 5.1(a).

(f) Fractional Shares. No fractional shares of Common Stock may be issued under the Plan, and unless the Committee determines otherwise, an amount in cash equal to the Fair Market Value of any fractional share of Common Stock that would otherwise be issuable will be paid in lieu of such fractional share of Common Stock. The Committee may, in its sole discretion, cancel, terminate, otherwise eliminate or transfer or pay other securities or other property in lieu of issuing any fractional share of Common Stock.

Section 6. Awards Under Plan

6.1 Types of Awards. Awards under the Plan may include one or more of the following types: Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units and Other Stock-Based Awards.

A-6

Table of Contents

6.2 Dividend Equivalents. Other than with respect to Options or Stock Appreciation Rights, the Committee may choose, at the time of the grant of an Award or any time thereafter up to the ~~SAR,~~time of the Award’s payment, to include or to exclude as part of such ~~higher price~~Award an entitlement to receive cash dividends or dividend equivalents, subject to such terms, conditions, restrictions or limitations, if any, as isthe Committee may establish. Dividends and dividend equivalents will be paid in such form and manner (i.e., lump sum or installments), and at such times as the Committee will determine.

6.3 Transferability. An Award and a Participant’s rights and interest under the Award, may not be sold, assigned or transferred, hypothecated or encumbered in whole or in part either directly or by operation of law or otherwise (except in the event of a Participant’s death) including, but not by way of limitation, execution, levy, garnishment, attachment, pledge, bankruptcy or in any other manner; provided, however, that the Committee may allow a Participant to assign or transfer without consideration an Award (other than an Incentive Stock Option) to one or more members of his immediate family, to a partnership of which the only partners are the Participant or members of the Participant’s immediate family, or to a trust established by the ~~Administrator. Shares~~Participant for the exclusive benefit of ~~common stock delivered pursuant~~the Participant or one or more members of his immediate family.

6.4 Award Agreement. Unless otherwise determined by the Committee, each Award will be evidenced by an Award Agreement in such form as the Committee will prescribe from time to time in accordance with the ~~exercise~~Plan, including a written agreement, contract, certificate or other instrument or document containing the terms and conditions of ~~a SAR shall~~an individual Award granted under the Plan which may, in the discretion of the Company, be transmitted electronically. Each Award and Award Agreement will be subject to ~~such~~the terms and conditions of the Plan.

6.5 Method of Payment. The Committee may, in its discretion, settle any Award through the payment of cash, the delivery of shares of Common Stock or other property, or a combination thereof, as the Committee determines or as specified by the Plan or an Award Agreement. Any Award settlement, including payment deferrals, may be subject to conditions, restrictions and contingencies as the ~~Administrator~~Committee determines.

6.6 Death, Disability and Termination. The Committee may ~~establish~~include in an Award Agreement provisions related to the death, Disability or termination of employment or service of a Participant, including without limitation the acceleration of the exercisability, vesting or settlement of, or the lapse of restrictions or deemed satisfaction of performance objectives with respect to, an Award.

6.7 Change in Control. The Committee may include in an Award Agreement provisions related to a Change in Control, including without limitation the acceleration of the exercisability, vesting or settlement of, or the lapse of restrictions or deemed satisfaction of performance objectives with respect to, an Award.

6.8 Forfeiture Provisions. The Committee may, in its discretion, provide in an Award Agreement that an Award will be canceled if the Participant, without the consent of the Company, while employed by or providing services to the Company or any Affiliate or after termination of such employment or service, violates a non-competition, non-solicitation or non-disclosure covenant or agreement, or otherwise engages in activity that is in conflict with or adverse to the interest of the Company or any Affiliate, including fraud or conduct contributing to any financial restatements or irregularities, as determined by the Committee in its sole discretion. Notwithstanding the foregoing, none of the non-disclosure restrictions in this Section 6.8 or in any Award Agreement will, or will be interpreted to, impair the Participant from exercising any legally protected whistleblower rights (including under Rule 21F under the Exchange Act).

A-7

Table of Contents

6.9 Recoupment Provisions. Notwithstanding anything in the Plan or in any Award Agreement to the contrary, the Company will be entitled to the extent required by applicable ~~SAR agreement~~law (including, without limitation, Section 10D of the Exchange Act and any regulations promulgated with respect thereto) or ~~document, if any.~~

~~Restricted stock~~Exchange listing requirement, in each case as in effect from time to time, to recoup compensation of whatever kind paid under the Plan by the Company at any time.

6.10 Non-Employee Director Award Limitation. The aggregate of (a) the grant date fair value for financial reporting purposes of any Awards granted during any fiscal year to a non-employee director, and (b) the total amount of any cash fees or other property paid to such non-employee director during the fiscal year, in respect of the director’s service as a member of the Board during such year, may not exceed $300,000. The independent members of the Board may make exceptions to this limit for a non-executive chair of the Board, provided that the non-employee director receiving such additional compensation may not participate in the decision to award such compensation.

Section 7. Options

7.1 Grant of Options. The Committee may grant Awards of Options. The Committee may grant Incentive Stock Options provided the terms of such grants comply with Section 7.4 and the requirements of Section 422 of the Code. Each Option granted under the Plan will comply with the following terms and conditions, and with such other terms and conditions as the Committee, in its discretion, may establish.

7.2 Exercise Price; Expiration Date. Except for Options granted through the assumption of, or substitution for, outstanding awards

~~A restricted stock award gives~~ previously granted by a company acquired by the ~~recipient a stock award~~Company or any Affiliate, or with which the Company or any Affiliate combines, the exercise price will be equal to or greater than the Fair Market Value of the shares of Common Stock subject to ~~restriction~~such Option on ~~sale.~~the date that the Option is granted. The ~~Administrator determines~~Committee in its discretion will establish the expiration date of an Option; provided that in no event will the expiration date be later than 10 years from the date that the Option is granted. Notwithstanding the foregoing, in the event that on the expiration date of a Nonqualified Stock Option, (a) the exercise of the Nonqualified Stock Option is prohibited by applicable law, or (b) shares of Common Stock may not be purchased or sold by certain employees or directors of the Company due to the “black-out period” under a Company policy or a “lock-up” agreement undertaken in connection with an issuance of securities by the Company, the Committee may, to the extent permitted by Section 409A, extend the expiration date of the Nonqualified Stock Option, but not beyond a period of 30 days following the end of the legal prohibition, black-out period or lock-up agreement period, and provided further that no extension may be made if the exercise price of the Nonqualified Stock Option is above the Fair Market Value of a share of Common Stock on the initial expiration date.

7.3 Exercisability. The Option will not be exercisable unless the Option has vested, and payment in full of the exercise price for the shares of Common Stock being acquired thereunder at the time of exercise is made in such form as the Committee may determine in its discretion, including, but not limited to:

(a) cash;

(b) if permitted by the Committee, by instructing the Company to withhold a number of shares of Common Stock that would otherwise be issued having a Fair Market Value equal to the applicable portion of the exercise price being so paid;

A-8

Table of Contents

(c) if permitted by the Committee, by tendering (actually or by attestation) to the Company a number of previously acquired shares of Common Stock that have been held by the Participant for at least six months (or such short period, if any, determined by the Committee in consideration of applicable accounting standards) and that have a Fair Market Value equal to the applicable portion of the exercise price being so paid;

(d) if permitted by the Committee, by authorizing a third party to sell, on behalf of the Participant, the appropriate number of shares of Common Stock otherwise issuable to the Participant upon the exercise of the Option and to remit to the Company a sufficient portion of the sale proceeds to pay the entire exercise price and any tax withholding resulting from such exercise; or

(e) any combination of the foregoing.

7.4 Limitations for Incentive Stock Options. The terms and conditions of ~~restricted~~any Incentive Stock Options granted hereunder will comply with the requirements of Section 422 of the Code. Incentive Stock Options may be granted only to employees of the Company or an Affiliate, provided such Affiliate is also a “parent corporation” of the Company within the meaning of Section 424(e) of the Code or a “subsidiary corporation” of the Company within the meaning of Section 424(f) of the Code, on the date of grant. The aggregate Fair Market Value (determined as of the time the Incentive Stock Option is granted) of the shares of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any individual during any calendar year (under all plans of the Company and its Affiliates) may not exceed $100,000, and any Incentive Stock Option or portions thereof which exceed such limit (according to the order in which they were granted) will be treated as a Nonqualified Stock Option. Incentive Stock Option may not be transferable by a Participant other than by will or the laws of descent and distribution and may only be exercisable during the Participant’s lifetime by the Participant. If, at the time an Incentive Stock Option is granted, the employee recipient owns (after application of the rules contained in Section 424(d) of the Code) shares of Common Stock possessing more than 10 percent of the total combined voting power of all classes of stock of the Company or its subsidiaries, then: (a) the exercise price for such Incentive Stock Option will be at least 110 percent of the Fair Market Value of the shares of Common Stock subject to such Incentive Stock Option on the date of grant; and (b) such Incentive Stock Option will not be exercisable after the date five years from the date such Incentive Stock Option is granted. The maximum number of shares of Common Stock that may be issued under the Plan pursuant to Incentive Stock Options may not exceed, in the aggregate, 1,000,000.

Section 8. Stock Appreciation Rights

8.1 Grant of Stock Appreciation Rights. The Committee may grant Awards of Stock Appreciation Rights. Each Award of Stock Appreciation Rights granted under the Plan will comply with the following terms and conditions, and with such other terms and conditions as the Committee, in its discretion, may establish.

8.2 Exercise Price; Expiration Date. Except for Stock Appreciation Rights granted through the assumption of, or substitution for, outstanding awards ~~including~~previously granted by a company acquired by the Company or any Affiliate, or with which the Company or any Affiliate combines, the exercise price will be equal to or greater than the Fair Market Value of the shares of Common Stock subject to such Stock Appreciation Right on the date that the Stock Appreciation Right is granted. The Committee in its discretion will establish the expiration date of a Stock Appreciation Right; provided that in no event will the expiration date be later than 10 years from the date that the Stock Appreciation Right is granted. Notwithstanding the foregoing, in the event that on the expiration date of a Stock Appreciation Right, (a) the exercise of the Stock Appreciation Right is prohibited by applicable law, or (b) shares of Common Stock may not be purchased or sold by certain employees or directors of the Company due to the “black-out period” under a Company policy or a “lock-up” agreement undertaken in connection with an issuance of securities by the Company, the Committee may, to the extent permitted by Section 409A, extend the expiration date of the Stock Appreciation Right, but not beyond a period of 30 days following the end of the legal prohibition, black-out period or lock-up agreement period, and provided further that no extension may be made if the exercise price of the Stock Appreciation Right is above the Fair Market Value of a share of Common Stock on the initial expiration date.

A-9

Table of Contents

8.3 Exercisability. Stock Appreciation Rights may not be exercisable unless the Stock Appreciation Rights have vested.

8.4 Exercise and Settlement. An Award of Stock Appreciation Rights entitles the Participant to exercise such Award and to receive from the Company in exchange therefore, without payment to the Company, that number of shares of Common Stock having an aggregate Fair Market Value equal to (or, in the discretion of the Committee, less than) the excess of the Fair Market Value of one share of Common Stock, at the date of such exercise, over the exercise price per share, times the number of shares of ~~restricted stock granted,~~Common Stock for which the Award is being exercised. The Committee will be entitled in its discretion to elect to settle the obligation arising out of the exercise of a Stock Appreciation Right by the payment of cash or other property, or any combination thereof, as determined by the Committee, equal to the aggregate Fair Market Value of the shares of Common Stock it would otherwise be obligated to deliver.

Section 9. Restricted Stock and Restricted Stock Units

9.1 Grant of Restricted Stock and Restricted Stock Units. The Committee may grant Awards of Restricted Stock or Restricted Stock Units. Each Award of Restricted Stock or Restricted Stock Units under the Plan will comply with the following terms and conditions, ~~for vesting that must be satisfied, which~~and with such other terms and conditions as the Committee, in its discretion, may establish.

9.2 Restricted Stock Issuance. Shares of Common Stock issued to a Participant in accordance with the Award of Restricted Stock may be ~~based principally~~issued in certificate form or ~~solely~~through the entry of an uncertificated book position on ~~continued provision~~the records of ~~services,~~the Company’s transfer agent and ~~also~~registrar. The Company may ~~include~~impose appropriate restrictions on the transfer of such shares of Common Stock, which will be evidenced in the manner permitted by law as determined by the Committee in its discretion, including but not limited to (a) causing a ~~performance-based component.~~legend or legends to be placed on any certificates evidencing such Restricted Stock, or (b) causing “stop transfer” instructions to be issued, as it deems necessary or appropriate.

9.3 Vesting Conditions. The vesting of an Award of Restricted Stock or Restricted Stock Units may be conditioned upon the attainment of specific performance objectives as the Committee may determine, including but not limited to such performance objectives described in Section 11.2.

9.4 Stockholder Rights. Unless otherwise ~~provided~~determined by the Committee in its discretion, prior to the ~~award agreement,~~expiration of the ~~holder~~Restricted Period, a Participant to whom an Award of ~~a restricted stock award generally~~Restricted Stock has been made will have ~~the rights~~ownership of ~~a shareholder from the date~~such shares of ~~grant of the award,~~Common Stock, including the right to vote the same and to receive dividends or other distributions made or paid with respect to such shares of Common Stock, subject, however, to the restrictions and limitations imposed thereon pursuant to the Plan or Award Agreement.

A-10

Table of Contents

Section 10. Other Stock-Based Awards

10.1 Grant of Other Stock-Based Awards. The Committee may grant Other Stock-Based Awards. Each Other Stock-Based Award granted under the Plan will comply with the following terms and conditions, and with such other terms and conditions as the Committee, in its discretion, may establish.

10.2 Vesting Conditions. The vesting of Other Stock-Based Awards may be conditioned upon the attainment of specific performance objectives as the Committee may determine, including but not limited to such performance objectives described in Section 11.2.

10.3 Settlement. The Committee will be entitled in its discretion to settle the obligation under an Other Stock-Based Award by the payment of cash, shares of Common Stock or other property, or any combination thereof.

Section 11. Performance Awards

11.1 Grant of Performance Awards. The Committee may grant Awards of Restricted Stock, Restricted Stock Units or Other Stock-Based Awards as “Performance Awards,” with the vesting or payment of such Awards based on the achievement of specified performance objectives.

11.2 Performance Objectives.

(a) Amounts earned under Performance Awards will be based upon the attainment of performance objectives established by the Committee. Such performance objectives may vary by Participant and by Award, and may be based upon the attainment of specific or per-share amounts of, or changes in, one or more, or a combination of two or more, of the following: (i) earnings including operating income, economic income, economic net income, earnings before or after taxes, earnings before or after interest, depreciation, amortization, or extraordinary or special items or book value per share (which may exclude nonrecurring items); (ii) pre-tax income or after-tax income; (iii) earnings per common share (basic or diluted); (iv) operating profit; (v) revenue, revenue growth or rate of revenue growth; (vi) return on assets (gross or net), return on investment, return on capital, or return on equity; (vii) returns on sales or revenues; (viii) operating expenses; (ix) stock price appreciation; (x) cash flow, free cash flow, cash flow return on investment (discounted or otherwise), net cash provided by operations, or cash flow in excess of cost of capital; (xi) implementation or completion of critical projects or processes; (xii) economic value created; (xiii) cumulative earnings per share growth; (xiv) operating margin or profit margin; (xv) common stock price or total stockholder return; (xvi) cost targets, reductions and savings, productivity and efficiencies; (xvii) strategic business criteria, consisting of one or more objectives based on meeting specified market penetration, geographic business expansion, customer satisfaction, employee satisfaction, human resources management, supervision of litigation, information technology, and goals relating to acquisitions, divestitures, joint ventures and similar transactions, and budget comparisons; (xviii) personal professional objectives, including any of the foregoing performance goals, the implementation of policies and plans, the negotiation of transactions, the development of long-term business goals, formation of joint ventures, research or development collaborations, and the ~~right~~completion of other corporate transactions; (xix) such other performance objectives determined by the Committee in its sole discretion; and (xx) any combination of any of the foregoing. The Committee may provide that, in measuring the achievement of the performance objectives, an Award may include or exclude items such as realized investment gains and losses, extraordinary, unusual, non-recurring or infrequently recurring items, asset write-downs, effects of force majeure events (such as a pandemic), accounting changes, currency fluctuations, acquisitions, divestitures, reserve-strengthening and other non-operating items.

A-11

Table of Contents

(b) Where applicable, the performance goals may be expressed in terms of attaining a specified level of the particular criteria or the attainment of a percentage increase or decrease in the particular criteria, and may be applied to ~~receive~~one or more of the Company or an Affiliate, or a division or strategic business unit of the Company or an Affiliate, or may be applied to the performance of the Company relative to a market index, a group of other companies or a combination thereof, or other pre-established target or designated comparison group, all as determined by the Committee. The performance goals may include a threshold level of performance below which no payment will be made (or no vesting will occur), levels of performance at which specified payments will be made (or specified vesting will occur), and a maximum level of performance above which no additional payment will be made (or at which full vesting will occur).

Section 12. Dilution and Other Adjustments

12.1 Adjustment for Corporate Transaction or Change in Corporate Capitalization. In the event of any change in the outstanding shares of Common Stock of the Company by reason of any corporate transaction or change in corporate capitalization such as a stock split, reverse stock split, stock dividend, split-up, split-off, spin-off, recapitalization, merger, consolidation, rights offering, reorganization, combination, consolidation, subdivision or exchange of shares, a sale by the Company of all or part of its assets, any distribution to stockholders other than a normal cash ~~dividends~~dividend, partial or complete liquidation of the Company or other extraordinary or unusual event, the Committee or Board, as applicable, will make such adjustment in (a) the class and ~~share and property distributions on the shares.~~

26

~~Restricted stock units~~

~~A restricted stock unit gives the recipient the right to receive a~~maximum number of shares of Common Stock that may be delivered under the Plan as described in Section 5.1, (b) the class, number and exercise price of outstanding Options and Stock Appreciation Rights, and (c) the class and number of shares subject to any other Awards granted under the Plan (provided that the number of shares of any class subject to Awards will always be a whole number) and the terms of such Awards (including, without limitation, any applicable performance goals), as may be determined to be appropriate by the Committee or Board, as applicable, and such adjustments will be final, conclusive and binding for all purposes of the Plan.

12.2 Adjustment for Merger or Consolidation. In the event of any merger, consolidation or similar transaction as a result of which the holders of shares of Common Stock receive consideration consisting exclusively of securities of the surviving entity (or the parent of the surviving entity) in such transaction, the Committee or Board, as applicable, will, to the extent deemed appropriate by the Committee or Board, as applicable, adjust each Award outstanding on the date of such merger, consolidation or similar transaction so that it pertains and applies to the securities which a holder of the number of shares of Common Stock subject to such Award would have received in such merger, consolidation or similar transaction.

12.3 Assumption or Substitution of Awards. In the event of a dissolution or liquidation of the Company; a sale of all or substantially all of the Company’s ~~common stock on~~assets (on a consolidated basis); or a merger, consolidation or similar transaction involving the ~~applicable vesting~~ Company in which the holders of shares of Common Stock receive securities and/or other ~~dates. Delivery~~property, including cash, other than shares of the ~~underlying restricted stock may be deferred beyond vesting~~surviving entity in such transaction (or the parent of such surviving entity), the Committee or Board, as applicable, will, to the extent deemed appropriate by the Committee or Board, as applicable, have the power to provide for the exchange of each Award (whether or not then exercisable or vested) for an Award with respect to: (a) some or all of the property which a holder of the number of shares of Common Stock subject to such Award would have received in such transaction; or (b) securities of the acquirer or surviving entity (or parent of such acquirer or surviving entity) and, incident thereto, make an equitable adjustment as determined by the ~~Administrator. The Administrator determines~~Committee or Board, as applicable, in the ~~terms and conditions~~exercise price of ~~restricted stock units, including~~the Award, or the number of ~~units~~shares or amount of property subject to the Award or provide for a payment (in cash or other property) to the Participant to whom such Award was granted in partial consideration for the exchange of the Award. In addition, the Committee will, to the extent deemed appropriate by the Committee or Board, as applicable, have the power to cancel, effective immediately prior to the occurrence of such event, each Award (whether or not then exercisable or vested), and, ~~conditions~~in full consideration of such cancellation, pay to the Participant to whom such Award was granted an amount in cash, for ~~vesting~~each share of Common Stock subject to such Award, equal to the value, as determined by the Committee or Board, as applicable, of such Award, provided that must be satisfied, which may be based principally or solely on continued provision of services, and also may include a performance-based component. The holder of a restricted stock unit award will not have voting rights with respect to ~~the award and possess no incidents of ownership with respect~~any outstanding Option or Stock Appreciation Right such value will be equal to the ~~underlying common stock.~~

~~Term, termination and amendment~~

~~The~~excess of (i) the value, as determined by the Committee or Board, ~~may terminate the Plan at any time. Unless sooner terminated, the Plan shall terminate 10 years after the effective date~~as applicable, of the ~~Plan. No award~~property (including cash) received by the holder of shares of Common Stock as a result of such event, over (ii) the exercise price of such Option or Stock Appreciation Right, provided further that the value of any outstanding Option or Stock Appreciation Right will be zero where the exercise price of such Option or Stock Appreciation Right is greater than the value, as determined by the Committee or Board, as applicable, of the property (including cash) received by the holder of shares of Common Stock as a result of such event; and that no change to the original timing of payment will be made to the extent it would violate Section 409A.

A-12

Table of Contents

Section 13. Amendment and Termination

13.1 Amendment. The Plan may be ~~granted under the Plan once it is terminated. Termination of the Plan shall not impair rights~~amended in whole or ~~obligations under any award granted while the Plan is~~ in ~~effect, except with the written consent of the grantee. The Board~~part at any time and from time to time by the Board, and the terms of any outstanding Award under the Plan may ~~amend~~be amended from time to time by the ~~Plan;~~ Committee or Board, as applicable, in its discretion in any manner that it deems necessary or appropriate; provided, however,, that no amendment ~~shall~~may be ~~effective unless approved by~~made without stockholder approval if such amendment would:

(a) increase the ~~shareholders~~number of shares available for grant specified in Section 5.1(a) (other than pursuant to Section 12);

(b) change the ~~Company~~class of persons eligible to receive Incentive Stock Options;

(c) decrease the minimum Option exercise price set forth in Section 7.2 or the minimum Stock Appreciation Rights exercise price set forth in Section 8.2 (in each case, other than changes made pursuant to Section 12);

(d) amend or repeal the prohibition against repricing or exchange set forth in Section 3.3; or

(e) require stockholder approval under applicable law, regulation, rule or Exchange listing requirement.

No such amendment may adversely affect in a material manner any right of a Participant under an Award without his written consent. Any stockholder approval requirement under the Plan will be met if such approval is obtained in accordance with applicable law. Notwithstanding the foregoing, any amendment to the ~~extent shareholder approval is necessary~~Plan or any outstanding Award under the Plan will be made in a manner as to ~~satisfy any applicable laws~~ensure that an Award intended to be exempt from Section 409A will continue to be exempt from Section 409A and that an Award intended to comply with Section 409A will continue to comply with Section 409A.

13.2 Termination. The Plan may be suspended in whole or ~~required by the rules of the principal national securities exchange or trading market upon which the Company’s common stock trades.~~

~~The Board~~in part at any time and from time to time ~~may amend~~by the ~~terms~~Board. The Plan will terminate upon the adoption of ~~any one or more awards; provided, however, that the rights under the award shall not be impaired by any such amendment, except with the written consent~~a resolution of the ~~grantee. In addition, any amendment of~~Board terminating the ~~purchase price or exercise price of any outstanding award will not be effective without shareholder approval.~~

~~The number of shares with respect to which options or stock awards~~Plan. No Award may be granted under the Plan after the ~~number~~date that is 10 years from the date the Plan was last approved and adopted by the stockholders of ~~shares covered~~the Company. No termination of the Plan will materially alter or impair any of the rights or obligations of any person, without his consent, under any Award theretofore granted under the Plan.

A-13

Table of Contents

Section 14. Miscellaneous

14.1 Loans. No loans from the Company or any Affiliate to a Participant will be permitted in connection with the Plan.

14.2 Reservation of Rights of Company. No employee or other person will have any claim or right to be granted an Award under the Plan. Neither the Plan nor any action taken hereunder will be construed as giving any employee or other person any right to continue to be employed by ~~each outstanding option~~ or ~~SAR,~~perform services for the Company or any Affiliate, and the ~~purchase price per share~~ ~~shall be proportionately adjusted~~right to terminate the employment of or performance of services by any Participant at any time and for any ~~increases~~reason is specifically reserved.

14.3 Non-Uniform Treatment. Determinations made by the Committee under the Plan need not be uniform and may be made selectively among eligible individuals under the Plan, whether or ~~decrease in~~not such eligible individuals are similarly situated.

14.4 General Conditions of Awards. No Participant or other person will have any right with respect to the ~~number of issued~~Plan, the shares of Common Stock ~~resulting from~~reserved for issuance under the Plan or in any Award, contingent or otherwise, until written evidence of the Award has been delivered to the recipient and all the terms, conditions and provisions of the Plan and the Award applicable to such recipient (and each person claiming under or through him) have been met.

14.5 Rights as a Stockholder. Unless otherwise determined by the Committee in its discretion, a Participant holding Options, Stock Appreciation Rights, Restricted Stock Units or Other Stock-Based Awards will have no rights as a stockholder with respect to any shares of Common Stock (or as a holder with respect to other securities), if any, issuable pursuant to any such Award until the date of the issuance of a stock ~~split, reverse stock split, stock dividend, combination~~certificate to him or ~~reclassification~~the entry on his behalf of an uncertificated book position on the records of the Company’s transfer agent and registrar for such shares of Common Stock or other instrument of ownership, if any. Except as provided in Section 12, no adjustment will be made for dividends, distributions or other rights (whether ordinary or extraordinary, and whether in cash, securities, other property or other forms of consideration, or any combination thereof) for which the record date is prior to the date such book entry is made or a stock certificate or other ~~increase or decrease in the number~~instrument of ~~issued~~ownership, if any, is issued.

14.6 Compliance with Applicable Laws. No shares of Common Stock ~~effected without receipt~~or other property may be issued or paid hereunder with respect to any Award unless counsel for the Company is satisfied that such issuance will be in compliance with applicable federal, state, local and foreign legal, securities exchange and other applicable requirements. The Company will be under no obligation to effect the registration pursuant to the Securities Act of ~~consideration~~1933, as amended, of any shares of Common Stock to be issued hereunder or to effect similar compliance under any state or local laws.

14.7 Withholding of Taxes. The Company and its Affiliates will have the authority and right to deduct or withhold from any payment made under the Plan, or require a Participant to remit to the Company or Affiliate, the federal, state or local income or other taxes required by law to be withheld with respect to the ~~Company.~~

~~All vested~~exercise, lapse of restriction, settlement, payment or ~~unvested awards are immediately forfeited at~~other taxable event of any Award under the ~~option of~~Plan. It will be a condition to the ~~Board in the event that the recipient performs certain acts against the interests~~obligation of the Company to issue shares of Common Stock or other property, or any combination thereof, upon exercise, settlement or payment of any Award under the Plan, that the Participant remit to the Company, upon its demand, such amount as may be requested by the Company for the purpose of satisfying any liability to withhold federal, state or local income or other taxes. If the amount requested is not paid, the Company may refuse to issue or pay shares of Common Stock or other property, or any combination thereof. The Committee may, in its discretion, permit an eligible Participant to elect to pay a portion or all of the amount requested by the Company for such taxes with respect to such Award, at such time and in such manner as the Committee deems to be appropriate, including, but not limited to, by authorizing the Company to withhold, or agreeing to surrender to the Company on or about the date such tax liability is determinable, shares of Common Stock or other property, or any combination thereof that would otherwise be distributed, or have been distributed, as the case may be, pursuant to such Award to such person, having a ~~termination~~Fair Market Value equal to the minimum amount required to be withheld, or if permitted by the Company, up to such greater amount that will not trigger adverse accounting consequences and is permitted under applicable tax withholding rules.

A-14

Table of Contents

14.8 Unfunded Nature of ~~employment for cause, violating~~Plan. The Plan will be unfunded. The Company will not be required to establish any special or separate fund or to make any other segregation of assets to assure the payment of any Award under the Plan, and the rights to the payment of Awards will be no greater than the rights of the Company’s ~~insider trading guidelines, breach~~general creditors.

14.9 Consent. By accepting any Award or other benefit under the Plan, each Participant and each person claiming under or through him will be conclusively deemed to have indicated his acceptance and ratification of, ~~a duty~~and consent to, any action taken under the Plan by the Company, the Board or the Committee.

14.10 No Warranty of ~~confidentiality, competing~~Tax Effect. Although the Company may structure an Award to qualify for favorable federal, state, local or foreign tax treatment, or to avoid adverse tax treatment, no person connected with the Plan in any capacity, including, but not limited to, the Company ~~soliciting Company personnel after employment is terminated, failure~~and its directors, officers, agents and employees, makes any representation, commitment or guarantee that any intended tax treatment will be applicable with respect to any Award under the Plan, or that such tax treatment will apply to or be available to a Participant or his or her beneficiary. Furthermore, the ~~Company after termination~~existence of ~~employment if such failure is a condition of any agreement, failure to assign any invention~~an Award will not affect the right or technology to the Company if such assignment is a condition of employment or any other agreements between the Company and the participant, or other conduct by the participant that is detrimental to the business or reputationpower of the Company or its ~~affiliates as determined by~~stockholders to take any corporate action, regardless of the ~~Board. Any award~~potential effect of such action on the tax treatment of an Award under the Plan.

14.11 Interpretation. Unless the context indicates otherwise, references to “Sections” in the Plan ~~which~~refer to Sections of the Plan. Headings of Sections herein are inserted only for convenience of reference and are not to be considered in the construction of the Plan. In the Plan, the use of the masculine pronoun will include the feminine and the use of the singular will include the plural, as appropriate.

14.12 Severability. If any provision of the Plan is ~~subject to recovery under any law, government regulation~~held unlawful or ~~stock exchange listing requirement,~~otherwise invalid or unenforceable in whole or in part by a court of competent jurisdiction, such provision will be ~~subject to such deductions and clawback as may be required to be made pursuant to such law, government regulation or stock exchange listing requirement (or any policy adopted by the Board).~~

27

~~Adjustments upon changes in capitalization~~

The number of shares of common stock covered by each outstanding stock right, and the number of shares of common stock which have been authorized for issuance under the Plan as well as the price per share of common stock (or cash, as applicable) covered by each such outstanding option or SAR, shall be proportionately adjusted for any increases or decrease in the number of issued shares of common stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification, or any other increase or decrease in the number of issued shares of common stock effected without receipt of consideration by the Company. Such adjustment shall be made by the Administrator.

~~Federal income tax consequences~~

~~The following is a brief summary of the principal U.S. federal income tax consequences with respect to awards granted under the Plan.~~

~~Restricted stock awards~~

~~The recipient of a restricted stock award does not have taxable income upon receipt of the award except~~deemed limited to the extent that ~~award is vested~~such court of competent jurisdiction deems it lawful, valid or enforceable and as so limited will remain in full force and effect, and will not ~~subject to a substantial risk~~affect any other provision of ~~forfeiture. When~~ the ~~restricted stock award is vested,~~Plan or part thereof, each of which will remain in full force and effect.

14.13 Choice of Law. The validity, construction, interpretation, administration and effect of the ~~recipient will recognize ordinary income in an amount equal~~Plan, and of its rules and regulations, and rights relating to the ~~difference~~Plan and to Awards granted under the Plan, will be governed by the substantive laws, but not the choice of law rules, of the ~~fair market value~~State of ~~the shares on the date of vesting and the amount paid for such restricted stock award, if any.~~Nevada.

A-15

Table of Contents

~~Upon the vesting of a restricted stock award, the Company will be entitled to a corresponding income tax deduction in the tax year in which the restricted stock award vested.~~

~~The recipient may, however, elect under~~

14.14 Section ~~83(b) of the Code to include as ordinary income in the year the shares are~~409A. Awards granted an amount equal to the excess of (i) the fair market value of the shares on the date of issuance, over (ii) the purchase price, if any, paid for the shares. If the Section 83(b) election is made, the recipient will not realize any additional taxable income when the shares become vested.

~~Stock options~~

The recipient does not recognize any taxable income as a result of a grant of a Non-Qualified Stock Option. Upon exercise of a Non-Qualified Stock Option, the recipient will recognize ordinary income in an amount equal to the difference between the fair market value of the shares on the date of exercise and the exercise price. When the shares are sold, any difference between the sale price and the fair market value of the shares on the date of exercise will generally be treated as long term or short term capital gain or loss, depending on whether the stock was held for more than one year. Upon the exercise of a Non-Qualified Stock Option, the Company will be entitled to a corresponding income tax deduction in the tax year in which the option was exercised.

28

Upon exercise of an ISO, the excess of the fair market value of the shares of common stock acquired over the option exercise price will be an item of tax preference to the participant, which may be subject to an alternative minimum tax for the year of exercise. If no disposition of the shares is made within two years from the date of granting of the ISO or within one year after the transfer of the shares to the participant, the participant does not realize taxable income as a result of exercising the ISO; the tax basis of the shares received for capital gain treatment is the option exercise price; any gain or loss realized on the sale of the shares is long-term capital gain or loss. If the recipient disposes of the shares within the two-year or one-year periods referred to above, the recipient will realize ordinary income at that time in an amount equal to the excess of the fair market value of the shares at the time of exercise (or the net proceeds of disposition, if less) over the option exercise price. For capital gains treatment on such a disposition, the tax basis of the shares will be their fair market value at the time of exercise.

~~Stock appreciation rights~~

A recipient does not recognize any taxable income upon the receipt of an SAR. Upon the exercise of an SAR, the recipient will recognize ordinary income in an amount equal to cash received or the excess of the fair market value of the underlying shares of common stock on the exercise date over the exercise price.

~~Upon the exercise of an SAR, the Company will be entitled to a corresponding income tax deduction in the tax year in which the SAR was exercised.~~

~~Transfer~~

~~Except for ISOs, all awards are transferable subject to compliance with the securities laws and the Plan. ISOs are only transferable by will or by the laws of descent and distribution.~~

~~Equity compensation plan information~~

~~The Company had not granted any equity compensation as of the Record Date.~~

~~New plan benefits~~

~~Because future grants of awards~~ under the Plan are ~~subject~~intended to qualify for an exception from or comply with Section 409A, and the ~~discretion~~Plan and Award Agreements will be administered, construed and interpreted in accordance with such intent. Notwithstanding the foregoing, the Company makes no representation that Awards qualify for an exception from or comply with Section 409A and in no event will the Company be liable for all or any portion of ~~the Board~~any taxes, penalties, interest or ~~the Compensation Committee, the future awards~~other expenses that may be ~~granted~~incurred by a Participant on account of non-compliance with Section 409A. Notwithstanding anything in the Plan or any Award Agreement to ~~participants cannot be determined at this time. There are no grants that have been previously made which are contingent upon receiving shareholder approval~~the contrary, if a Participant is a “specified employee” (within the meaning of Section 409A(2)(B)) as of the ~~grant.~~

~~The Board recommends a vote “For” this proposal.~~

~~PROPOSAL 3. TO APPROVE VERIFYME’S NAMED EXECUTIVE OFFICER COMPENSATION~~

~~Overview~~

~~Pursuant to Section 14A~~date of the Exchange Act, we are asking our shareholders to vote to approve, on a non-binding, advisory basis, the compensation of our Named Executive Officers, commonly referred to as the “say-on-pay” vote. In accordance with the Exchange Act requirements, we are providing our shareholders with an opportunity to express their views on our Named Executive Officers’ compensation. Although this advisory vote is nonbinding, our Board and the Compensation Committee will review and consider the voting results when making future decisions regarding our Named Executive Officer compensation and related executive compensation programs.

29

We encourage shareholders to read the “Executive Compensation” section in this proxy statement, including the compensation tables and the related narrative disclosure, which describes the structure and amounts of the compensation of our Named Executive Officers. The compensation of our Named Executive Officers is designed to enable us to attract and retain talented and experienced executives to lead us successfully in a competitive environment. The Committee and our Board believe that our executive compensation strikes the appropriate balance between utilizing responsible, measured pay practices and effectively incentivizing our Named Executive Officers to dedicate themselves fully to value creation for our shareholders.

~~Accordingly, we ask our shareholders to vote “FOR” the following resolution at the Annual Meeting:~~

“RESOLVED, that the compensation paid to VerifyMe’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the compensation tables and narrative discussion is hereby APPROVED.”

~~The Board recommends a vote “For” this proposal.~~

30

~~PROPOSAL 4. TO VOTE, ON A NON-BINDING ADVISORY BASIS, WHETHER A NON-BINDING ADVISORY VOTE ON VERIFYME’S NAMED EXECUTIVE OFFICER COMPENSATION SHOULD BE HELD EVERY ONE, TWO OR THREE YEARS~~

~~In addition to the advisory vote on executive compensation described in Proposal~~ 3,such Participant’s separation from service (as determined pursuant to Section ~~14A~~409A), then to the extent any Award payable to such Participant on account of such separation from service would be considered nonqualified deferred compensation under Section 409A, such payment or benefit will be paid or provided in a lump sum upon the earlier of the ~~Exchange Act, we are asking our shareholders~~first day of the seventh month following such separation from service and the date of the Participant’s death. Unless the Committee determines otherwise, any provision of the Plan that would cause the grant of an Award or the payment, settlement or deferral thereof to ~~vote,~~fail exception from or compliance with Section 409A may be amended to qualify for exception from or comply with Section 409A, which may be made on a ~~non-binding, advisory~~retroactive basis, on the frequency of future votes to approve the compensation of our Named Executive Officers. This non-binding “frequency” vote is required to be submitted to our shareholders at least once every six years. Shareholders may indicate whether they prefer that we conduct future advisory votes to approve the compensation of our Named Executive Officers every one, two or three years, or abstain.

The Board has determined that holding an advisory vote to approve the compensation of our Named Executive Officers every three years is the most appropriate policy at this time, and recommends that future advisory votes to approve the compensation of our Named Executive Officers occur every third year. Our executive compensation program is designed to create long-term value for our shareholders, and a triennial vote will allow shareholders to better judge our executive compensation program in relation to our long-term performance. We also believe that a vote every three years is an appropriate frequency to provide sufficient time to thoughtfully consider shareholders’ input and to implement any appropriate changes to our executive compensation program, in light of the timing that would be required to implement any decisions related to such changes.

accordance with Section 409A.

* * * * *

Shareholders will be able to specify one of four choices for this proposal on the proxy card: one year, two years, three years, or abstain. The voting frequency option that receives the highest number of votes cast by shareholders will be deemed the frequency for the advisory vote on executive compensation that has been selected by shareholders. Although this advisory vote on the frequency of future advisory votes to approve the compensation of our Named Executive Officers is nonbinding, the Board will carefully review and consider the voting results when determining the frequency of future advisory votes to approve the compensation of our Named Executive Officers.

~~The Board recommends that the shareholders vote to conduct future advisory votes to approve the compensation of our Named Executive Officers every~~ ~~three years~~.

31

~~OTHER MATTERS~~

VerifyMe has no knowledge of any other matters that may come before the Annual Meeting and does not intend to present any other matters. However, if any other matters shall properly come before the Meeting or any adjournment, the persons soliciting proxies will have the discretion to vote as they see fit unless directed otherwise.

If you do not plan to attend the Annual Meeting, in order that your shares may be represented and in order to assure the required quorum, please sign, date and return your proxy promptly. In the event you are able to attend the Annual Meeting, at your request, VerifyMe will cancel your previously submitted proxy.

32

A-16

~~VERIFYME~~

~~THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS~~

~~ANNUAL MEETING OF SHAREHOLDERS – June~~ ~~14,~~Table of Contents ~~2018 AT~~ ~~10:00 AM~~

VERIFYME, INC.

75 S. CLINTON AVE., SUITE 510

ROCHESTER, NY 14604

VOTE BY INTERNET

Before The Meeting - Go to ~~VOTING INSTRUCTIONS~~www.proxyvote.com

Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on Tuesday, September 29, 2020 (the day before the meeting). Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.

During The Meeting - Go to www.virtualshareholdermeeting.com/VRME2020

You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.

VOTE BY PHONE - 1-800-690-6903

Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time on Tuesday, September 29, 2020 (the day before the meeting). Have your proxy card in hand when you call and then follow the instructions.

VOTE BY MAIL

Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.

~~If you vote by phone or internet, please DO NOT mail your proxy card.~~

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:

	D21644-P43398	KEEP THIS PORTION FOR YOUR RECORDS
	~~MAIL:~~	DETACH AND RETURN THIS PORTION ONLY

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

VERIFYME, INC.

The Board of Directors recommends you vote FOR all the
nominees listed.

For
All

Withhold
All

For All
Except

To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below.

1. Election of Directors

o

________________________________

Nominees:

01) Norman Gardner

05) Scott Greenberg

02) Chris Gardner

06) Arthur Laffer

03) Marshall Geller

07) Patrick White

04) Howard Goldberg

The Board of Directors recommends you vote FOR Proposals 2 and 3.

For

Against

Abstain

2. To approve the VerifyMe, Inc. 2020 Equity Incentive Plan.

o

3. To ratify the appointment of MaloneBailey, LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2020.

o

NOTE: In their discretion, and in accordance with applicable law, the proxies are authorized to vote upon such other matters that may properly come before the meeting or any adjournment or postponement of the meeting.

Please ~~mark,~~ sign ~~date, and return this Proxy Card promptly using the enclosed envelope.~~exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.

Signature [PLEASE SIGN WITHIN BOX]

Date

Signature (Joint Owners)

Date

Table of Contents

Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be held on September 30, 2020:
The Notice and Proxy Statement and Annual Report on Form 10-K are available at www.proxyvote.com.


	~~PHONE:~~	~~Call~~ ~~1-800-690-6903~~

	~~INTERNET:~~	~~https://www.proxyvote.com~~ D21645-P43398

~~Control ID:~~

~~Proxy ID:~~

~~Password:~~

~~MARK “X” HERE IF YOU PLAN TO ATTEND THE MEETING:~~ ☐

~~MARK HERE FOR ADDRESS CHANGE~~ ☐ ~~New Address (if applicable):~~

~~____________________________~~

~~IMPORTANT:~~ Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.

~~Dated: ________________________, 2018~~

~~(Print Name of Shareholder and/or Joint Tenant)~~

~~(Signature of Shareholder)~~

~~(Second Signature if held jointly)~~

VERIFYME, INC.

Annual Meeting of Stockholders

September 30, 2020 at 10:00 AM (Eastern Time)

This proxy is solicited on behalf of our Board of Directors

and each matter to be voted on at the

Annual Meeting has been proposed by our Board of Directors.

The ~~shareholder(s)~~undersigned hereby appoints Patrick White and Norman Gardner, and each of them, as ~~proxy,~~proxies, with the power to appoint a substitute, and hereby authorizes ~~him~~them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of ~~voting~~common stock of VerifyMe, Inc. that the ~~shareholder(s) is/are~~undersigned is entitled to vote at the Annual Meeting of ~~Shareholder(s)~~Stockholders to be held virtually at www.virtualshareholdermeeting.com/VRME2020 at 10:00 ~~a.m., local time~~AM (Eastern Time) on ~~June 14,~~ ~~2018, at~~ ~~Nason, Yeager, Gerson, White & Lioce, P.A., 3001 PGA Boulevard, Suite 305, Palm Beach Gardens, Florida 33410,~~Wednesday, September 30, 2020, and any adjournment or postponement thereof.

This ~~proxy, when properly executed, will be voted in the manner directed herein. If~~ ~~no such direction is made, this~~ proxy will be voted ~~in accordance with~~as specified by you and it revokes any prior proxy given by you.

Unless you withhold authority to vote for one or more of the ~~Board~~nominees according to the instructions on the reverse side of ~~Director’s recommendations. If any other business is presented at the meeting,~~ this proxy, your signed proxy will be voted byFOR the ~~above-named proxies at the direction~~election of the ~~Board~~seven director nominees listed on the reverse side of ~~Directors. At~~this proxy and described in the ~~present time,~~accompanying Proxy Statement.

Unless you specify otherwise, your signed proxy will be voted FOR Proposals 2 and 3 listed on the ~~Board~~reverse side of ~~Directors knows~~this proxy and described in the accompanying Proxy Statement.

You acknowledge receipt with this proxy of ~~no other business~~a copy of the Notice of Annual Meeting and Proxy Statement dated August 20, 2020, describing more fully the proposals listed in this proxy.

Continued and to be ~~presented at the meeting.~~

~~The Board of Directors recommends you vote FOR the following Nominees~~:

~~1. To elect members of VerifyMe’s Board of Directors.~~

~~Norman~~ ~~Gardner~~	~~FOR~~ ☐	~~WITHHELD~~ ☐

~~Carl Berg~~	~~FOR~~ ☐	~~WITHHELD~~ ☐

~~Laurence~~ ~~Blickman~~	~~FOR~~ ☐	~~WITHHELD~~ ☐

~~Harvey~~ ~~Eisen~~	~~FOR~~ ☐	~~WITHHELD~~ ☐

~~Marshall~~ ~~Geller~~	~~FOR~~ ☐	~~WITHHELD~~ ☐

~~Howard~~ ~~Goldberg~~	~~FOR~~ ☐	~~WITHHELD~~ ☐

~~Patrick~~ ~~White~~	~~FOR~~ ☐	~~WITHHELD~~ ☐

~~The Board of Directors recommends you vote FOR each of the following Proposals (you may vote for one answer to proposal 4):~~


~~2. To ratify the adoption of VerifyMe’s Equity Incentive Plan~~			~~FOR [ ] AGAINST [ ] ABSTAIN [ ]~~

~~3. To approve VerifyMe’s named executive officers compensation.~~			~~FOR [ ] AGAINST [ ] ABSTAIN [ ]~~

~~4. To vote, on a non-binding advisory basis, whether a non-binding advisory vote on VerifyMe’s named executive officer compensation, should be held every one, two or three years.~~			~~1 YEAR [ ] 2 YEARS [ ]~~ ~~3 YEARS [ ] ABSTAIN [ ]~~

~~Control ID:~~

~~Proxy ID:~~

~~Password:~~

~~Annex A~~

~~VERIFYME, INC.~~

~~2017 EQUITY INCENTIVE PLAN~~

1.~~Scope of Plan; Definitions~~.

(a) This 2017 Equity Incentive Plan (the “Plan”) is intended to advance the interests of VerifyMe, Inc. (the “Company”) and its Related Corporations by enhancing the ability of the Company to attract and retain qualified employees, consultants, Officers, and directors, by creating incentives and rewards for their contributions to the success of the Company and its Related Corporations. This Plan will provide to (a) Officers and other employees of the Company and its Related Corporations opportunities to purchase common stock (“Common Stock”) of the Company pursuant to Options granted hereunder which qualify as incentive stock options (“ISOs”) under Section 422(b) of the Internal Revenue Code of 1986 (the “Code”), (b) directors, Officers, employees and consultants of the Company and Related Corporations opportunities to purchase Common Stock in the Company pursuant to options granted hereunder which do not qualify as ISOs (“Non-Qualified Options”); (c) directors, Officers, employees and consultants of the Company and Related Corporations opportunities to receive shares of Common Stock of the Company which normally are subject to restrictionssigned on sale (“Restricted Stock”); (d) directors, Officers, employees and consultants of the Company and Related Corporations opportunities to receive grants of stock appreciation rights (“SARs”); and (e) directors, Officers, employees and consultants of the Company and Related Corporations opportunities to receive grants of restricted stock units (“RSUs”). ISOs and Non-Qualified Options are referred to hereafter as (“Options”). Options, Restricted Stock and RSUs are sometimes referred to hereafter collectively as (“Stock Rights”). Any of the Options and/or Stock Rights may in the Compensation Committee’s discretion be issued in tandem to one or more other Options and/or Stock Rights to the extent permitted by law.reverse side

~~(b) For purposes of the Plan, capitalized words and terms shall have the following meaning:~~

~~“Board” means the board of directors of the Company.~~

“Change of Control” means the occurrence of any of the following events: (i) the consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets in a transaction which requires shareholder approval under applicable state law; or (ii) the consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least 50% of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.

~~“Code”~~ ~~shall have the meaning given to it in Section 1(a).~~

~~“Common Stock”~~ ~~shall have the meaning given to it in Section 1(a).~~

~~“Company” shall have the meaning given to it in Section 1(a).~~

~~“Compensation Committee” means the compensation committee of the Board, if any, which~~ shall consist of two or more members of the Board, each of whom shall be both an “outside director” within the meaning of Section 162(m) of the Code and a “non-employee director” within the meaning of Rule 16b-3. All references in this Plan to the Compensation Committee shall mean the Board when (i) there is no Compensation Committee or (ii) the Board has retained the power to administer this Plan.

~~“Disability” means “permanent and total disability” as defined in Section 22(e)(3) of the Code or successor statute.~~

“Disqualifying Disposition” means any disposition (including any sale) of Common Stock underlying an ISO before the later of (i) two years after the date of employee was granted the ISO or (ii) one year after the date the employee acquired Common Stock by exercising the ISO.

~~“Exchange Act” means the Securities Exchange Act of 1934.~~

~~“Fair Market Value” shall be determined as of the last Trading Day before the date a Stock Right is granted and shall mean:~~

~~(1)the closing price on the principal market if the Common Stock is listed on a national securities exchange or the OTCQB.~~

~~(2)~~if the Company’s shares are not listed on a national securities exchange or the OTCQB, then the closing price if reported or the average bid and asked price for the Company’s shares as quoted by OTC Pink;

~~(3)~~if there are no prices available under clauses (1) or (2), then Fair Market Value shall be based upon the average closing bid and asked price as determined following a polling of all dealers making a market in the Company’s Common Stock; or

(4) if there is no regularly established trading market for the Company’s Common Stock or if the Company’s Common Stock is listed, quoted or reported under clauses (1) or (2) but it trades sporadically rather than every day, the Fair Market Value shall be established by the Board or the Compensation Committee taking into consideration all relevant factors including the most recent price at which the Company’s Common Stock was sold.

~~“ISO” shall have the meaning given to it in Section 1(a).~~

~~“Non-Qualified Options” shall have the meaning given to it in Section 1(a).~~

2

~~“Officers” means a person who is an executive officer of the Company and is required to file ownership reports under Section 16(a) of the Exchange Act.~~

~~“Options” shall have the meaning given to it in Section 1(a).~~

~~“Plan” shall have the meaning given to it in Section 1(a).~~

~~“Related Corporations” shall mean a corporation which is a subsidiary corporation with respect to the Company within the meaning of Section 425(f) of the Code.~~

~~“Restricted Stock” shall have the meaning contained in Section 1(a).~~

~~“RSU” shall have the meaning given to it in Section 1(a).~~

~~“SAR” shall have the meaning given to it in Section 1(a).~~

~~“Securities Act” means the Securities Act of 1933.~~

~~“Stock Rights” shall have the meaning given to it in Section 1(a).~~

~~“Trading Day” shall mean a day on which the New York Stock Exchange is open for business.~~

This Plan is intended to comply in all respects with Rule 16b-3 (“Rule 16b-3”) and its successor rules as promulgated under Section 16(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) for participants who are subject to Section 16 of the Exchange Act. To the extent any provision of the Plan or action by the Plan administrators fails to so comply, it shall be deemed null and void to the extent permitted by law and deemed advisable by the Plan administrators. ~~Provided~~, ~~however~~, such exercise of discretion by the Plan administrators shall not interfere with the contract rights of any grantee. In the event that any interpretation or construction of the Plan is required, it shall be interpreted and construed in order to ensure, to the maximum extent permissible by law, that such grantee does not violate the short-swing profit provisions of Section 16(b) of the Exchange Act and that any exemption available under Rule 16b-3 or other rule is available.

3

2.~~Administration of the Plan~~.

~~(a)~~The Plan may be administered by the entire Board or by the Compensation Committee. Once appointed, the Compensation Committee shall continue to serve until otherwise directed by the Board. A majority of the members of the Compensation Committee shall constitute a quorum, and all determinations of the Compensation Committee shall be made by the majority of its members present at a meeting. Any determination of the Compensation Committee under the Plan may be made without notice or meeting of the Compensation Committee by a writing signed by all of the Compensation Committee members. Subject to ratification of the grant of each Stock Right by the Board (but only if so required by applicable state law), and subject to the terms of the Plan, the Compensation Committee shall have the authority to (i) determine the employees of the Company and Related Corporations (from among the class of employees eligible under Section 3 to receive ISOs) to whom ISOs may be granted, and to determine (from among the class of individuals and entities eligible under Section 3 to receive Non-Qualified Options, Restricted Stock, RSUs and SARs) to whom Non-Qualified Options, Restricted Stock, RSUs and SARs may be granted; (ii) determine when Stock Rights may be granted; (iii) determine the exercise prices of Stock Rights other than Restricted Stock and RSUs, which shall not be less than the Fair Market Value; (iv) determine whether each Options granted shall be an ISO or a Non-Qualified Option; (v) determine when Stock Rights shall become exercisable, the duration of the exercise period and when each Stock Right shall vest; (vi) determine whether restrictions such as repurchase options are to be imposed on shares subject to or issued in connection with Stock Rights, and the nature of such restrictions, if any, and (vii) interpret the Plan and promulgate and rescind rules and regulations relating to it. The interpretation and construction by the Compensation Committee of any provisions of the Plan or of any Stock Right granted under it shall be final, binding and conclusive unless otherwise determined by the Board. The Compensation Committee may from time to time adopt such rules and regulations for carrying out the Plan as it may deem best.

No members of the Compensation Committee or the Board shall be liable for any action or determination made in good faith with respect to the Plan or any Stock Right granted under it. No member of the Compensation Committee or the Board shall be liable for any act or omission of any other member of the Compensation Committee or the Board or for any act or omission on his own part, including but not limited to the exercise of any power and discretion given to him under the Plan, except those resulting from his own gross negligence or willful misconduct.

(b) The Compensation Committee may select one of its members as its chairman and shall hold meetings at such time and places as it may determine. All references in this Plan to the Compensation Committee shall mean the Board if no Compensation Committee has been appointed. From time to time the Board may increase the size of the Compensation Committee and appoint additional members thereof, remove members (with or without cause) and appoint new members in substitution therefor, fill vacancies however caused or remove all members of the Compensation Committee and thereafter directly administer the Plan.

(c) Stock Rights may be granted to members of the Board, whether such grants are in their capacity as directors, Officers, or consultants. All grants of Stock Rights to members of the Board shall in all other respects be made in accordance with the provisions of this Plan applicable to other eligible persons. Members of the Board who are either (i) eligible for Stock Rights pursuant to the Plan or (ii) have been granted Stock Rights may vote on any matters affecting the administration of the Plan or the grant of any Stock Rights pursuant to the Plan.

4

~~(d)~~In addition to such other rights of indemnification as he may have as a member of the Board, and with respect to administration of the Plan and the granting of Stock Rights under it, each member of the Board and of the Compensation Committee shall be entitled without further act on his part to indemnification from the Company for all expenses (including advances of litigation expenses, the amount of judgment and the amount of approved settlements made with a view to the curtailment of costs of litigation) reasonably incurred by him in connection with or arising out of any action, suit or proceeding, including any appeal thereof, with respect to the administration of the Plan or the granting of Stock Rights under it in which he may be involved by reason of his being or having been a member of the Board or the Compensation Committee, whether or not he continues to be such member of the Board or the Compensation Committee at the time of the incurring of such expenses; ~~provided~~, ~~however~~, that such indemnity shall be subject to the limitations contained in any Indemnification Agreement between the Company and the Board member or Officer. The foregoing right of indemnification shall inure to the benefit of the heirs, executors or administrators of each such member of the Board or the Compensation Committee and shall be in addition to all other rights to which such member of the Board or the Compensation Committee would be entitled to as a matter of law, contract or otherwise.

~~(e) The Board may delegate the powers to grant Stock Rights to Officers to the extent permitted by the laws of the Company’s state of incorporation.~~

3.~~Eligible Employees and Others~~.ISOs may be granted to any employee of the Company or any Related Corporation. Those Officers and directors of the Company who are not employees may not be granted ISOs under the Plan. Subject to compliance with Rule 16b-3 and other applicable securities laws, Non-Qualified Options, Restricted Stock, RSUs and SARs may be granted to any director (whether or not an employee), Officers, employees or consultants of the Company or any Related Corporation. The Compensation Committee may take into consideration a recipient’s individual circumstances in determining whether to grant an ISO, a Non-Qualified Option, Restricted Stock, RSUs or a SAR. Granting of any Stock Right to any individual or entity shall neither entitle that individual or entity to, nor disqualify him from participation in, any other grant of Stock Rights.

4.~~Common Stock~~.The Common Stock subject to Stock Rights shall be authorized but unissued shares of Common Stock, par value $0.001, or shares of Common Stock reacquired by the Company in any manner, including purchase, forfeiture, or otherwise. The aggregate number of shares of Common Stock which may be issued pursuant to the Plan is 13,000,000 ~~less any Stock Rights previously granted or exercised~~ subject to adjustment as provided in Section 14. Any such shares may be issued under ISOs, Non-Qualified Options, Restricted Stock, RSUs or SARs, so long as the number of shares so issued does not exceed the limitations in this Section. If any Stock Rights granted under the Plan shall expire or terminate for any reason without having been exercised in full or shall cease for any reason to be exercisable in whole or in part, or if the Company shall reacquire any unvested shares, the unpurchased shares subject to such Stock Rights and any unvested shares so reacquired by the Company shall again be available for grants under the Plan.

5.~~Granting of Stock Rights~~.

~~(a)The date of grant of a Stock Right under the Plan will be the date specified by the Board or Compensation Committee at the time it grants the Stock Right;~~ ~~provided~~, ~~however~~, that such date shall not be prior to the date on which the Board or Compensation Committee acts to approve the grant. The Board or Compensation Committee shall have the right, with the consent of the optionee, to convert an ISO granted under the Plan to a Non-Qualified Option pursuant to Section 17.

5

(b) The Board or Compensation Committee shall grant Stock Rights to participants that it, in its sole discretion, selects. Stock Rights shall be granted on such terms as the Board or Compensation Committee shall determine except that ISOs shall be granted on terms that comply with the Code and regulations thereunder.

~~(c)A SAR entitles the holder to receive, as designated by the~~ ~~Board or~~ Compensation Committee, cash or shares of Common Stock, value equal to (or otherwise based on) the excess of: (a) the Fair Market Value of a specified number of shares of Common Stock at the time of exercise over (b) an exercise price established by the ~~Board or~~ ~~Compensation Committee. The exercise price of each SAR granted under this Plan shall be established by the Compensation Committee or shall be determined by a method established by the~~ ~~Board or~~ Compensation Committee at the time the SAR is granted, provided the exercise price shall not be less than 100% of the Fair Market Value of a share of Common Stock on the date of the grant of the SAR, or such higher price as is established by the ~~Board or~~ ~~Compensation Committee. A SAR shall be exercisable in accordance with such terms and conditions and during such periods as may be established by the~~ ~~Board or~~ ~~Compensation Committee. Shares of Common Stock delivered pursuant to the exercise of a SAR shall be subject to such conditions, restrictions and contingencies as the~~ ~~Board or~~ ~~Compensation Committee may establish in the applicable SAR agreement or document, if any. The~~ ~~Board or~~ ~~Compensation Committee, in its discretion, may impose such conditions, restrictions and contingencies with~~ respect to shares of Common Stock acquired pursuant to the exercise of each SAR as the Board or Compensation Committee determines to be desirable. A SAR under the Plan shall be subject to such terms and conditions, not inconsistent with the Plan, as the Board or Compensation Committee shall, in its discretion, prescribe. The terms and conditions of any SAR to any grantee shall be reflected in such form of agreement as is determined by the Board or Compensation Committee. A copy of such document, if any, shall be provided to the grantee, and the Board or Compensation Committee may condition the granting of the SAR on the grantee executing such agreement.

(d) An RSU gives the grantee the right to receive a number of shares of the Company’s Common Stock on applicable vesting or other dates. Delivery of the RSUs may be deferred beyond vesting as determined by the Board or Compensation Committee. RSUs shall be evidenced by an RSU agreement in the form determined by the Board or Compensation Committee. With respect to an RSU, which becomes non-forfeitable due to the lapse of time, the Compensation Committee shall prescribe in the RSU agreement the vesting period. With respect to the granting of the RSU, which becomes non-forfeitable due to the satisfaction of certain pre-established performance-based objectives imposed by the Board or Compensation Committee, the measurement date of whether such performance-based objectives have been satisfied shall be a date no earlier than the first anniversary of the date of the RSU. A recipient who is granted an RSU shall possess no incidents of ownership with respect to such underlying Common Stock, although the RSU agreement may provide for payments in lieu of dividends to such grantee.

(e) Notwithstanding any provision of this Plan, the Board or Compensation Committee may impose conditions and restrictions on any grant of Stock Rights including forfeiture of vested Options, cancellation of Common Stock acquired in connection with any Stock Right and forfeiture of profits.

6

~~(f) The Options and SARs shall not be exercisable for a period of more than 10 years from the date of grant.~~

6.~~Sale of Shares~~. The shares underlying Stock Rights granted to any Officers, director or a beneficial owner of 10% or more of the Company’s securities registered under Section 12 of the Exchange Act shall not be sold, assigned or transferred by the grantee until at least six months elapse from the date of the grant thereof.

7.~~ISO Minimum Option Price and Other Limitations~~.

(a) The exercise price per share relating to all Options granted under the Plan shall not be less than the Fair Market Value per share of Common Stock on the last Trading Day prior to the date of such grant. For purposes of determining the exercise price, the date of the grant shall be the later of (i) the date of approval by the Board or Compensation Committee or the Board, or (ii) for ISOs, the date the recipient becomes an employee of the Company. In the case of an ISO to be granted to an employee owning Common Stock which represents more than 10% of the total combined voting power of all classes of stock of the Company or any Related Corporation, the price per share shall not be less than 110% of the Fair Market Value per share of Common Stock on the date of grant and such ISO shall not be exercisable after the expiration of five years from the date of grant.

(b) In no event shall the aggregate Fair Market Value (determined at the time an ISO is granted) of Common Stock for which ISOs granted to any employee are exercisable for the first time by such employee during any calendar year (under all stock option plans of the Company and any Related Corporation) exceed $100,000.

8.~~Duration of Stock Rights~~. Subject to earlier termination as provided in Sections 3, 5, 9, 10 and 11, each Option and SAR shall expire on the date specified in the original instrument granting such Stock Right (except with respect to any part of an ISO that is converted into a Non-Qualified Option pursuant to Section 17), ~~provided~~, ~~however~~, that such instrument must comply with Section 422 of the Code with regard to ISOs and Rule 16b-3 with regard to all Stock Rights granted pursuant to the Plan to Officers, directors and 10% shareholders of the Company.

9.~~Exercise of Options and SARs; Vesting of Stock Rights. Subject to the provisions of Sections 3 and 9 through 13, each Option and SAR granted under the Plan shall be exercisable as follows:~~

(a) The Options and SARs shall either be fully vested and exercisable from the date of grant or shall vest and become exercisable in such installments as the Board or Compensation Committee may specify.

(b) Once an installment becomes exercisable it shall remain exercisable until expiration or termination of the Option and SAR, unless otherwise specified by the Board or Compensation Committee.

7

(c) Each Option and SAR or installment, once it becomes exercisable, may be exercised at any time or from time to time, in whole or in part, for up to the total number of shares with respect to which it is then exercisable.

~~(d)The Board or Compensation Committee shall have the right to accelerate the vesting date of any installment of any Stock Right;~~ ~~provided~~ that the Board or Compensation Committee shall not accelerate the exercise date of any installment of any Option granted to any employee as an ISO (and not previously converted into a Non-Qualified Option pursuant to Section 17) if such acceleration would violate the annual exercisability limitation contained in Section 422(d) of the Code as described in Section 7(b).

~~10.Termination of Employment~~. Subject to any greater restrictions or limitations as may be imposed by the Board or Compensation Committee or by a written agreement, if an optionee ceases to be employed by the Company and all Related Corporations other than by reason of death or Disability, no further installments of his Options shall vest or become exercisable, and his Options shall terminate as provided for in the grant or on the day 12 months after the day of the termination of his employment (except three months for ISOs), whichever is earlier, but in no event later than on their specified expiration dates. Employment shall be considered as continuing uninterrupted during any bona fide leave of absence (such as those attributable to illness, military obligations or governmental service) provided that the period of such leave does not exceed 90 days or, if longer, any period during which such optionee’s right to re-employment is guaranteed by statute. A leave of absence with the written approval of the Board shall not be considered an interruption of employment under the Plan, provided that such written approval contractually obligates the Company or any Related Corporation to continue the employment of the optionee after the approved period of absence. ISOs granted under the Plan shall not be affected by any change of employment within or among the Company and Related Corporations so long as the optionee continues to be an employee of the Company or any Related Corporation.

~~11.Death; Disability. Unless otherwise determined by the Board or Compensation Committee or by a written agreement:~~

(a) If the holder of an Option or SAR ceases to be employed by the Company and all Related Corporations by reason of his death, any Options or SARs held by the optionee may be exercised to the extent he could have exercised it on the date of his death, by his estate, personal representative or beneficiary who has acquired the Options or SARs by will or by the laws of descent and distribution, at any time prior to the earlier of: (i) the Options’ or SARs specified expiration date or (ii) one year (except three months for an ISO) from the date of death.

(b) If the holder of an Option or SAR ceases to be employed by the Company and all Related Corporations, or a director or Director Advisor can no longer perform his duties, by reason of his Disability, any Options or SARs held by the optionee may be exercised to the extent he could have exercised it on the date of termination due to Disability until the earlier of (i) the Options’ or SARs’ specified expiration date or (ii) one year from the date of the termination.

8

~~12.Assignment, Transfer or Sale~~.

(a) No ISO granted under this Plan shall be assignable or transferable by the grantee except by will or by the laws of descent and distribution, and during the lifetime of the grantee, each ISO shall be exercisable only by him, his guardian or legal representative.

~~(b) Except for ISOs, all Stock Rights are transferable subject to compliance with applicable securities laws and Section 6 of this Plan.~~

~~13.Terms and Conditions of Stock Rights~~. Stock Rights shall be evidenced by instruments (which need not be identical) in such forms as the Board or Compensation Committee may from time to time approve. Such instruments shall conform to the terms and conditions set forth in Sections 5 through 12 hereof and may contain such other provisions as the Board or Compensation Committee deems advisable which are not inconsistent with the Plan. In granting any Stock Rights, the Board or Compensation Committee may specify that Stock Rights shall be subject to the restrictions set forth herein with respect to ISOs, or to such other termination and cancellation provisions as the Board or Compensation Committee may determine. The Board or Compensation Committee may from time to time confer authority and responsibility on one or more of its own members and/or one or more Officers of the Company to execute and deliver such instruments. The proper Officers of the Company are authorized and directed to take any and all action necessary or advisable from time to time to carry out the terms of such instruments.

~~14.Adjustments Upon Certain Events~~.

~~(a)~~Subject to any required action by the shareholders of the Company, the number of shares of Common Stock covered by each outstanding Stock Right, and the number of shares of Common Stock which have been authorized for issuance under the Plan but as to which no Stock Rights have yet been granted or which have been returned to the Plan upon cancellation or expiration of a Stock Right, as well as the price per share of Common Stock (or cash, as applicable) covered by each such outstanding Option or SAR, shall be proportionately adjusted for any increases or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of Common Stock, or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company; ~~provided~~, ~~however~~, that conversion of any convertible securities of the Company or the voluntary cancellation whether by virtue of a cashless exercise of a derivative security of the Company or otherwise shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made by the ~~Board or~~ Compensation Committee, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to a Stock Right. No adjustments shall be made for dividends or other distributions paid in cash or in property other than securities of the Company.

~~(b)In the event of the proposed dissolution or liquidation of the Company, the~~ ~~Board or~~ Compensation Committee shall notify each participant as soon as practicable prior to the effective date of such proposed transaction. To the extent it has not been previously exercised, a Stock Right will terminate immediately prior to the consummation of such proposed action.

9

~~(c)~~In the event of a merger of the Company with or into another corporation, or a Change of Control, each outstanding Stock Right shall be assumed (as defined below) or an equivalent option or right substituted by the successor corporation or a parent or subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute for the Stock Rights, the participants shall fully vest in and have the right to exercise their Stock Rights as to which it would not otherwise be vested or exercisable. If a Stock Right becomes fully vested and exercisable in lieu of assumption or substitution in the event of a merger or sale of assets, the ~~Board or~~ Compensation Committee shall notify the participant in writing or electronically that the Stock Right shall be fully vested and exercisable for a period of at least 15 days from the date of such notice, and any Options or SARs shall terminate one minute prior to the closing of the merger or sale of assets.

For the purposes of this Section 14(c), the Stock Right shall be considered “assumed” if, following the merger or Change of Control, the option or right confers the right to purchase or receive, for each share of Common Stock subject to the Stock Right immediately prior to the merger or Change of Control, the consideration (whether stock, cash, or other securities or property) received in the merger or Change of Control by holders of Common Stock for each share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); ~~provided~~, ~~however, that if such consideration received in the merger or Change of Control is not solely common stock of the successor corporation or its parent, the~~ ~~Board or~~ Compensation Committee may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Stock Right, for each share of Common Stock subject to the Stock Right, to be solely common stock of the successor corporation or its parent equal in Fair Market Value to the per share consideration received by holders of Common Stock in the merger or Change of Control.

~~(d)Notwithstanding the foregoing, any adjustments made pursuant to Section 14(a), (b) or (c) with respect to ISOs shall be made only after the~~ ~~Board or~~ Compensation Committee, after consulting with counsel for the Company, determines whether such adjustments would constitute a “modification” of such ISOs (as that term is defined in Section 425(h) of the Code) or would cause any adverse tax consequences for the holders of such ISOs. If the ~~Board or~~ ~~Compensation Committee determines that such adjustments made with respect to ISOs would constitute a modification of such ISOs it may refrain from making such adjustments.~~

~~(e) No fractional shares shall be issued under the Plan and the optionee shall receive from the Company cash in lieu of such fractional shares.~~

10

~~15.Means of Exercising Stock Rights~~.

(a) An Option or SAR (or any part or installment thereof) shall be exercised by giving written notice to the Company at its principal office address. Such notice shall identify the Stock Right being exercised and specify the number of shares as to which such Stock Right is being exercised, accompanied by full payment of the exercise price therefor (to the extent it is exercisable in cash) either (i) in United States dollars by check or wire transfer; or (ii) at the discretion of the Board or Compensation Committee, through delivery of shares of Common Stock having a Fair Market Value equal as of the date of the exercise to the cash exercise price of the Stock Right; or (iii) at the discretion of the Board or Compensation Committee, by any combination of (i) and (ii) above. If the Board or Compensation Committee exercises its discretion to permit payment of the exercise price of an ISO by means of the methods set forth in clauses (ii) or (iii) of the preceding sentence, such discretion need not be exercised in writing at the time of the grant of the Stock Right in question. The holder of a Stock Right shall not have the rights of a shareholder with respect to the shares covered by his Stock Right until the date of issuance of a stock certificate to him for such shares. Except as expressly provided above in Section 14 with respect to changes in capitalization and stock dividends, no adjustment shall be made for dividends or similar rights for which the record date is before the date such stock certificate is issued.

(b) Each notice of exercise shall, unless the shares of Common Stock are covered by a then current registration statement under the Securities Act, contain the holder’s acknowledgment in form and substance satisfactory to the Company that (i) such shares are being purchased for investment and not for distribution or resale (other than a distribution or resale which, in the opinion of counsel satisfactory to the Company, may be made without violating the registration provisions of the Securities Act), (ii) the holder has been advised and understands that (1) the shares have not been registered under the Securities Act and are “restricted securities” within the meaning of Rule 144 under the Securities Act and are subject to restrictions on transfer and (2) the Company is under no obligation to register the shares under the Securities Act or to take any action which would make available to the holder any exemption from such registration, and (iii) such shares may not be transferred without compliance with all applicable federal and state securities laws. Notwithstanding the above, should the Company be advised by counsel that issuance of shares should be delayed pending registration under federal or state securities laws or the receipt of an opinion that an appropriate exemption therefrom is available, the Company may defer exercise of any Stock Right granted hereunder until either such event has occurred.

~~16.Term, Termination, and Amendment~~.

~~(a) This Plan was adopted by the Board. This Plan may be approved by the Company’s shareholders, which approval is required for ISOs.~~

(b) The Board may terminate the Plan at any time. Unless sooner terminated, the Plan shall terminate on November 14, 2027. No Stock Rights may be granted under the Plan once the Plan is terminated. Termination of the Plan shall not impair rights and obligations under any Stock Right granted while the Plan is in effect, except with the written consent of the grantee.

~~(c)The Board at any time, and from time to time, may amend the Plan.~~ ~~Provided~~, ~~however~~, except as provided in Section 14 relating to adjustments in Common Stock, no amendment shall be effective unless approved by the shareholders of the Company to the extent (i) shareholder approval is necessary to satisfy the requirements of Section 422 of the Code or (ii) required by the rules of the principal national securities exchange or trading market upon which the Company’s Common Stock trades. Rights under any Stock Rights granted before amendment of the Plan shall not be impaired by any amendment of the Plan, except with the written consent of the grantee.

11

~~(d)The Board at any time, and from time to time, may amend the terms of any one or more Stock Rights;~~ ~~provided~~, ~~however, that the rights under the Stock Right shall not be impaired by any such amendment, except with the written consent of the grantee.~~

~~17.Conversion of ISOs into Non-Qualified Options; Termination of ISOs. The~~ ~~Board or~~ Compensation Committee, at the written request of any optionee, may in its discretion take such actions as may be necessary to convert such optionee’s ISOs (or any installments or portions of installments thereof) that have not been exercised on the date of conversion into Non-Qualified Options at any time prior to the expiration of such ISOs, regardless of whether the optionee is an employee of the Company or a Related Corporation at the time of such conversion. ~~Provided~~, ~~however, the~~ ~~Board or~~ Compensation Committee shall not reprice the Options or extend the exercise period or reduce the exercise price of the appropriate installments of such Options without the approval of the Company’s shareholders. At the time of such conversion, the Board or Compensation Committee (with the consent of the optionee) may impose such conditions on the exercise of the resulting Non-Qualified Options as the Board or Compensation Committee in its discretion may determine, provided that such conditions shall not be inconsistent with this Plan. Nothing in the Plan shall be deemed to give any optionee the right to have such optionee’s ISOs converted into Non-Qualified Options, and no such conversion shall occur until and unless the Board or Compensation Committee takes appropriate action. The Compensation Committee, with the consent of the optionee, may also terminate any portion of any ISO that has not been exercised at the time of such termination.

~~18.Application of Funds. The proceeds received by the Company from the sale of shares pursuant to Options or SARS (if cash settled) granted under the Plan shall be used for general corporate purposes.~~

~~19.Governmental Regulations~~. The Company’s obligation to sell and deliver shares of the Common Stock under this Plan is subject to the approval of any governmental authority required in connection with the authorization, issuance or sale of such shares.

~~20.Withholding of Additional Income Taxes~~. In connection with the granting, exercise or vesting of a Stock Right or the making of a Disqualifying Disposition the Company, in accordance with Section 3402(a) of the Code, may require the optionee to pay additional withholding taxes in respect of the amount that is considered compensation includable in such person’s gross income.

To the extent that the Company is required to withhold taxes for federal income tax purposes as provided above, if any optionee may elect to satisfy such withholding requirement by (i) paying the amount of the required withholding tax to the Company; (ii) delivering to the Company shares of its Common Stock (including shares of Restricted Stock) previously owned by the optionee; or (iii) having the Company retain a portion of the shares covered by an Option exercise. The number of shares to be delivered to or withheld by the Company times the Fair Market Value of such shares shall equal the cash required to be withheld.

12

~~21.Notice to Company of Disqualifying Disposition~~. Each employee who receives an ISO must agree to notify the Company in writing immediately after the employee makes a Disqualifying Disposition of any Common Stock acquired pursuant to the exercise of an ISO. If the employee has died before such stock is sold, the holding periods requirements of the Disqualifying Disposition do not apply and no Disqualifying Disposition can occur thereafter.

~~22.Continued Employment~~. The grant of a Stock Right pursuant to the Plan shall not be construed to imply or to constitute evidence of any agreement, express or implied, on the part of the Company or any Related Corporation to retain the grantee in the employ of the Company or a Related Corporation, as a member of the Company’s Board or in any other capacity, whichever the case may be.

~~23.Governing Law; Construction~~. The validity and construction of the Plan and the instruments evidencing Stock Rights shall be governed by the laws of the Company’s state of incorporation. In construing this Plan, the singular shall include the plural and the masculine gender shall include the feminine and neuter, unless the context otherwise requires.

~~24.(a)~~ ~~Forfeiture of Stock Rights Granted to Employees or Consultants~~. Notwithstanding any other provision of this Plan, and unless otherwise provided for in a Stock Rights Agreement, all vested or unvested Stock Rights granted to employees or consultants shall be immediately forfeited at the discretion of the Board if any of the following events occur:

~~(1) Termination of the relationship with the grantee for cause including, but not limited to, fraud, theft, dishonesty, and violation of Company policy;~~

~~(2) Purchasing or selling securities of the Company in violation of the Company’s insider trading guidelines then in effect;~~

~~(3) Breaching any duty of confidentiality including that required by the Company’s insider trading guidelines then in effect;~~

~~(4) Competing with the Company;~~

~~(5) Being unavailable for consultation after leaving the Company’s employment if such availability is a condition of any agreement between the Company and the grantee;~~

~~(6) Recruitment of Company personnel after termination of employment, whether such termination is voluntary or for cause;~~

~~(7) Failure to assign any invention or technology to the Company if such assignment is a condition of employment or any other agreements between the Company and the grantee; or~~

~~(8) A finding by the Board that the grantee has acted disloyally and/or against the interests of the Company.~~

13

~~(b)Forfeiture of Stock Rights Granted to Directors~~. Notwithstanding any other provision of this Plan, and unless otherwise provided for in a Stock Rights Agreement, all vested or unvested Stock Rights granted to directors shall be immediately forfeited at the discretion of the Board if any of the following events occur:

~~(1) Purchasing or selling securities of the Company in violation of the Company’s insider trading guidelines then in effect;~~

~~(2) Breaching any duty of confidentiality including that required by the Company’s insider trading guidelines then in effect;~~

~~(3) Competing with the Company;~~

~~(4) Recruitment of Company personnel after ceasing to be a director; or~~

~~(5) A finding by the Board that the grantee has acted disloyally and/or against the interests of the Company.~~

The Company may impose other forfeiture restrictions which are more or less restrictive and require a return of profits from the sale of Common Stock as part of said forfeiture provisions if such forfeiture provisions and/or return of provisions are contained in a Stock Rights Agreement.

~~(c)Profits on the Sale of Certain Shares; Redemption~~. If any of the events specified in Section 24(a) or (b) of the Plan occur within one year from the date the grantee last performed services for the Company in the capacity for which the Stock Rights were granted (the “Termination Date”) (or such longer period required by any written agreement), all profits earned from the sale of the Company’s securities, including the sale of shares of common stock underlying the Stock Rights, during the two-year period commencing one year prior to the Termination Date shall be forfeited and immediately paid by the grantee to the Company. Further, in such event, the Company may at its option redeem shares of common stock acquired upon exercise of the Stock Right by payment of the exercise price to the grantee. To the extent that another written agreement with the Company extends the events in Section 24(a) or (b) beyond one year following the Termination Date, the two-year period shall be extended by an equal number of days. The Company’s rights under this Section 24(c) do not lapse one year form the Termination Date but are contract rights subject to any appropriate statutory limitation period.

14

Filed by Registrant	☑þ

Filed by Party other than Registrant	☐

Check the appropriate box:

☐	Preliminary Proxy Statement	☐	Confidential, for Use of the Commission
			Only (as permitted by Rule 14a-6(e)(2))

☒þ	Definitive Proxy Statement	☐	Definitive Additional Materials

☐	Soliciting Materials Pursuant to §240.14a-12

Payment of Filing Fee (Check the appropriate box):

☑þ	No fee required.

☐	Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

	(1)	Title of each class of securities to which transaction applies:
	(2)	Aggregate number of securities to which transaction applies:
	(3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):
		$_____ per share as determined under Rule 0-11 under the Exchange Act.
	(4)	Proposed maximum aggregate value of transaction:
	(5)	Total fee paid:

☐	Fee paid previously with preliminary materials.

~~Proposals~~ Proposal		~~Vote~~ Description~~Required~~		~~Broker~~ Vote Required~~Discretionary~~ ~~Vote~~ ~~Allowed~~
One		~~Effect~~Election of ~~Abstentions~~ on the ~~Proposal~~
1	~~To elect~~ seven ~~members to VerifyMe’s Board of Directors;~~directors		Plurality		No	No effect* of the votes of the shares cast at the Annual Meeting

Two
2	To ~~ratify~~approve the ~~adoption of VerifyMe’s 2017~~VerifyMe, Inc. 2020 Equity Incentive ~~Plan;~~Plan		~~Majority~~Affirmative vote of a majority of the ~~votes~~shares cast		No	No effect* on the proposal

Norman Gardner
Age: 77 Director since: November 1999 to January 2013; December 2016	Chairman of the Board Board Committee: Executive
Mr. Gardner, our founder, was previously a director and Vice-Chairman of the Company from the Company’s inception in November 1999 until January 2013. Mr. Gardner served as our Chief Executive Officer from November 1999 until January 2013, and from January 2017 until August 2017. Mr. Gardner has been a consultant to the Company since June 2017 and was previously a consultant to the Company from January 2013 until January 2017.

Experience and Qualifications

Mr. Gardner’s extensive knowledge of the Company’s products, structure, history, major stockholders and culture give him the qualifications, skills and financial expertise to serve on our board of directors.

	(1)	Amount previously paid:
	(2)	Form, Schedule or Registration Statement No.:
	(3)	Filing Party:
	(4)	Date Filed:

	By ~~the~~ Order of the Board of Directors

	~~/s/~~ ~~Patrick White~~ ~~Patrick White~~ ~~Chief Executive Officer~~
	Patrick White
	President and Chief Executive Officer
Rochester, New York
August 20, 2020

PROXY STATEMENT	1
questions and answers about these proxy materials ANd VOTING	1
pROPOSAL ONE: Election of Directors	9
CORPORATE GOVERNANCE	13
MANAGEMENT AND EXECUTIVE OFFICERS	18
Executive Compensation	19
Director Compensation	23
Security Ownership of management and Certain Beneficial Owners	24
proposal TWO: TO APPROVE THE VerifyMe, Inc. 2020 Equity Incentive Plan	26
proposal Three: Ratification of THE APPOINTMENT of Our Independent Registered Public Accounting Firm	35
REPORT OF THE AUDIT COMMITTEE	36
DELINQUENT SECTION 16(a) REPORTS	37
Certain Relationships and Related person Transactions	37
Other matters	39
aPPENDIX a - vERIFYME, iNC. 2020 EQUITY INCENTIVE PLAN	A-1

	1.	~~Vote by Internet. The website address for internet voting is on your proxy card.~~
	2.	~~Vote by phone. Call~~ ~~1-800-690-6903~~ ~~and follow the instructions on your proxy card.~~
	3.	~~Vote by mail. Mark, date, sign and mail promptly the enclosed proxy card (a postage-paid envelope is provided for mailing in the United States).~~
	4.	~~Vote in person. Attend and vote at the Annual Meeting.~~

	1.	~~Vote by Internet. The website address for internet voting is on your vote instruction form.~~
	2.	~~Vote by mail. Mark, date, sign and mail promptly the enclosed vote instruction form (a postage-paid envelope is provided for mailing in the United States).~~
	3.	~~Vote in person. Obtain a valid legal proxy from the organization that holds your shares and attend and vote at the Annual Meeting.~~

Chris Gardner
Age: 66 Director since: May 2019	Board Committee: Nominating and Corporate Governance (Chair)
Mr. Gardner is an international best-selling author and award-winning film producer. Mr. Gardner was a Senior Advisor to Wisdom Tree Investments, Inc. (NASDAQ:WETF), an exchange-traded fund, from June 2018 to June 2020. From October 2010 until April 2016, he was the Ambassador of Happyness for AARP, a nonprofit organization dedicated to empowering Americans age 50 and older. Mr. Gardner established the institutional brokerage firm of Gardner Rich and Company in 1989 that closed in December 2012. Chris Gardner is not related to Norman Gardner.

Experience and Qualifications

Mr. Gardner’s entrepreneurial experience and network of relationships which we believe are valuable assets to the Company and its growth give him the qualifications, skills and financial expertise to serve on our board of directors.

3	~~To approve VerifyMe’s named executive officer compensation;~~Marshall Geller
~~Majority~~ Age: 81 Director since: July 2017	Board Committee: Audit; Nominating and Corporate Governance; Executive; Mergers & Acquisitions (Chair)
Mr. Geller has been a director and a member of the ~~votes cast~~audit committee of GP Strategies Corporation (NYSE:GPX) since 2002. Mr. Geller was a director of Wright Investors’ Service Holdings Inc. (OTCMKT:WISH), formerly National Patent Development Corporation, from January 2015 until October 2018. He is also currently a Director of Easy Smart Pay, a public-private partnership of the California State Association of Counties Finance Corporation. Mr. Geller formerly served as a director of California Pizza Kitchen, Inc., (formerly Nasdaq:CPKI) from 2008 until 2011, and Hexcel Corporation (NYSE:HXL) from 1994 until 2003. Mr. Geller was a founder of St. Cloud Capital, a Los Angeles based private equity fund, and Senior Investment Advisor from December 2001 until September 2017. He has spent more than 50 years in corporate finance and investment banking, including 21 years as a Senior Managing Partner of Bear, Stearns & Co., with oversight of all operations in Los Angeles, San Francisco, Chicago, Hong Kong and the Far East. Mr. Geller is currently on the Board of Directors of UCLA Health System and on the Board of Governors of Cedars Sinai Medical Center, Los Angeles. Mr. Geller also serves on the Dean’s Advisory Council for the College of Business & Economics at California State University, Los Angeles.

Experience and Qualifications

Mr. Geller’s financial and business experience, including as a managing partner of a private equity fund, and his many years of experience and expertise as an investor in and adviser to companies in various sectors as well as his experience with serving on the boards of directors of other public and private corporations give him the qualifications, skills and financial expertise to serve on our board of directors.

Howard Goldberg
No effect* Age: 75 Director since: July 2017		Lead Independent Director Board Committee: Audit; Compensation; Nominating and Corporate Governance; Executive; Mergers & Acquisitions
Mr. Goldberg has served as our Lead Independent director during 2020, having served from time to time in that capacity. From 2003 through 2005, Mr. Goldberg served as a part-time consultant to Laser Lock Technologies, Inc., the predecessor to VerifyMe, and provided consulting service to us again from 2016 through December 2017. Mr. Goldberg has been a private investor in both real estate and start-up companies and has provided consulting services to start-up companies since 1999. From 1994 through 1998, Mr. Goldberg served as President, CEO and board member of Player’s International, a publicly traded company in the gaming business prior to its sale to Harrah’s Entertainment Inc. Mr. Goldberg served on the Board of Directors and Audit Committee of Imall Inc., a publicly traded company that provided on-line shopping prior to its sale to Excite-at-Home. Mr. Goldberg served as a member of the Board of Directors and the Audit Committee of the Shelbourne Entities from August 2002 until their liquidation in April 2004. Mr. Goldberg served as a member of the Board of Trustees of Winthrop Realty Trust, a publicly traded real estate investment trust, from December 2003 to August 2016 when Winthrop’s assets were transferred to a liquidating trust. Mr. Goldberg was a member of Winthrop’s Audit Committee and Nominating and Corporate Governance Committee and was its lead independent trustee. Mr. Goldberg served as a trustee for Winthrop Realty Liquidating Trust until December 2019 when it was finally liquidated. Mr. Goldberg was a director of New York REIT, Inc. from March 2017 until October 2018, when it converted to a limited liability company called New York REIT LLC. Since October 2018, Mr. Goldberg has been a manager of New York REIT LLC. Mr. Goldberg has a law degree from New York University and was previously the managing partner of a New Jersey law firm where he specialized in gaming regulatory law and real estate from 1970 through 1994.

Experience and Qualifications

Mr. Goldberg’s experience as a director of other public companies and his legal expertise give him the qualifications, skills and financial expertise to serve on our board of directors.

~~Name~~	~~Age~~	~~Position~~
~~Norman Gardner~~	75	~~Chairman and Director~~
~~Carl Berg~~	80	~~Director~~
~~Laurence Blickman~~	65	~~Director~~
~~Harvey Eisen~~	75	~~Director~~
~~Marshall Geller~~	79	~~Director~~
~~Howard Goldberg~~	72	~~Director~~
~~Patrick White~~	65	~~Director~~
~~Lawrence Schafran~~	79	~~Director~~

Arthur Laffer
Age: 80 Director since: March 2019	Board Committee: Compensation (Chair)
Dr. Laffer is the founder and chairman of Laffer Associates, an institutional economic research and consulting firm. Dr. Laffer has served as a director of NexPoint Residential Trust Inc. (NYSE:NXRT) since May 2015 and NexPoint Real Estate Finance Inc. (NYSE:NREF) since February 2020. He was a director of EVO Transportation & Energy Services, Inc. (OTCPINK:EVOA) from August 2018 to December 2019 and the GEE Group Inc. (NYSE American:JOB) from January 2015 to March 2020. Dr. Laffer’s economic acumen and influence in triggering a world-wide tax-cutting movement in the 1980s have earned him the distinction in many publications as “The Father of Supply-Side Economics.” Dr. Laffer was a member of President Reagan’s Economic Policy Advisory Board for both of his two terms (1981-1989). Dr. Laffer also advised Prime Minister Margaret Thatcher on fiscal policy in the UK during the 1980s. In the early 1970s, Dr. Laffer was the first to hold the title of Chief Economist at the Office of Management and Budget under George Shultz. Additionally, Dr. Laffer served as Charles B. Thornton Professor of Business Economics at the University of Southern California and as Associate Professor of Business Economics at the University of Chicago. In June 2019, Dr. Laffer received the Presidential Medal of Freedom.

Experience and Qualifications

Dr. Laffer’s expertise in economics and his experience as a director of multiple companies give him the qualifications, skills and financial expertise to serve on our board of directors.

Patrick White
Age: 67 Director since: July 2017
Mr. White has served as our President and Chief Executive Officer since August 2017. Mr. White founded Document Security Systems, Inc. (NYSE:DSS), a technology company, serving as its Chief Executive Officer and director from August 2002 until December 2012 and as its business consultant from 2012 to March 2015. He has been a director of Box Score Brands, Inc. (formerly, U-Vend, Inc.) since 2009. Mr. White was a Financial Adviser for the Monroe County Government from April 2016 until May 2017. Mr. White worked as an independent consultant from March 2015 until March 2016. Mr. White was a consultant to the Company from June 2017 through August 2017, when he was appointed President and Chief Executive Officer.

Experience and Qualifications

Mr. White’s prior experience as the chief executive officer of a public company gives him the qualifications and skills to serve on our board of directors.

Title of Class	Beneficial Owner	Amount of Beneficial Ownership (1)			Percent Beneficially Owned (1)

Named Executive Officers:


Common Stock	Norman Gardner (2)		9,464,469			10.50	%
Common Stock	Thomas Nicolette (3)		127,946				*
Common Stock	Patrick White (4)		5,000,000			5.57	%
_
Non-Officer Directors:
Common Stock	Carl Berg		11,740,000	(5)		13.85	%
Common Stock	Laurence Blickman		17,407,380	(6)		19.94	%
Common Stock	Harvey Eisen		1,430,000	(7)		1.69	%
Common Stock	Marshall Geller		7,450,000	(8)		8.54	%
Common Stock	Howard Goldberg		3,636,755	(9)		4.21	%
Common Stock	Lawrence Schafran		4,414,000	(10)		5.06	%
Common Stock	All directors and executive officers as a group (9 persons)		60,670,550			58.1	%

5% Shareholders:
Common Stock	Stephen Silver (11)		4,903,068			5.68	%

						Stock		Option		All Other		Total
Name and Principal		Salary		Bonus		Awards		Awards		Compensation		Compensation
Position	Year	($)		($)		($) (1)		($) (1)		($)		($)

Patrick White (2)	2017		56,250		-		-		240,631		25,000		321,881
CEO


Norman Gardner (3)	2017		75,000		-		-		682,007		62,529		819,536
Former CEO & Secretary
Treasurer

Thomas Nicolette (4)	2017		6,483		-		-		-		26,007		32,490
Former CEO	2016		72,354		-		-		-		49,885		122,239

		Stock		Option	Other	Total
Name and Principal		Awards		Awards	Compensation	Compensation
Position	Year	($)		($)	($)	($)
Norman Gardner	2017	682,007	(2)			682,007
Laurence Blickman (3)	2017	4,388				4,388
Marshall Geller (3)	2017	4,388				4,388
Howard Goldberg (3)	2017	4,388	(4)	21,829	100,000	126,167
Claudio Ballard (1) (3)	2017	4,388				4,388
Paul Klapper (3) (5)	2017	4,388				4,388
Lawrence G. Schafran (3)	2017	4,388				4,388
Patrick White	2017	240,631	(2)			240,631

	(a)	(b)	(c)
Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by security holders*	22,013,530	$0.11	n/a
Equity compensation plans not approved by security holders	0	n/a	13,050,000
Total	22,013,530	$0.11	13,050,000

	Year Ended December 31, 2017 ($)		Year Ended December 31, 2016 ($)
Audit Fees – Morison Cogan (1)		59,500		66,900
Audit Fees – MaloneBailey (1)		38,000		0
Audit Related Fees (2)		4,000		0
Tax Fees		0		0
All Other Fees		0		0
Total		101,500		66,900