UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON,Washington, D.C. 20549

ScheduleSCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of

the Securities

Exchange Act of 1934

(Amendment No.)

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CODA OCTOPUS GROUP, INC.

(Name of registrantRegistrant as specifiedSpecified in its charter)

Its Charter)

(Name of person(s) filing proxy statement,Person(s) Filing Proxy Statement, if other than the registrant)

Registrant)

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£CODA OCTOPUS GROUP, INC.

Fee paid previously with preliminary materials.7380 W. Sand Lake Road, Suite 500,

£Orlando, Florida 32819

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

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June ____, 2008

To Our Stockholders:


On behalf of the Board of Directors, I cordially invite you to attend the

The Annual Meeting of Stockholders of Coda Octopus Group, Inc. The Annual Meeting will be held on July 24, 2018, at 9:10:00 a.m., on Tuesday, July 1, 2008 at the offices of Sichenzia Ross Friedman Ference LLP.


Please vote on all the matters listed in the enclosed Notice of Annual Meeting of Stockholders, each of which is more fully described in the enclosed Proxy Statement. The Board of Directors recommends a vote FOR each of these proposals.

All holders of common stock and the holders of Series A Preferred Stock are invited to attend the Annual Meeting in person. If, however, you do not expect to be present at the Annual Meeting and wish your shares to be voted, you should complete, sign and date the enclosed form of proxy and return it by mail in the enclosed envelope, in accordance with the instructions on the proxy card or other voting instructions included with the proxy materials.

I appreciate your interest and support of Coda Octopus and urge you to vote your shares either in person or by granting your proxy as promptly as possible.

Sincerely,

Jason Reid
Chief Executive Officer




Paul Nussbaum
Chairman of the Board of Directors
Coda Octopus Group, Inc.
164 West 25th Street, 6th Floor, New York, NY 10001

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TIME AND DATE: 9:00 AM, Eastern Daylight Time, on Tuesday, July 1, 2008

PLACE: Theat our corporate offices of Sichenzia Ross Friedman Ference LLP, 61 Broadway, 32nd Floor, New York, New York 10006.

ITEMS OF BUSINESS:
located at 7380 W. Sand Lake Road, Suite 500, Orlando, Florida for the following purposes:

1.To elect threefive directors for a termto serve until the annual meeting of one year.stockholders in 2019 or until their respective successors have been duly elected and qualified;

2.To approve the Coda Octopus Group, Inc. 2008 Employees, Directors, Officers and Consultants2017 Stock Option and Stock Award Plan, which provides, among other things, for the awarding of up to 2,500,000 shares of common stock and/or options to purchase 2,500,000 shares of common stock.Incentive Plan;
3.To increase the Company’s authorized share capitalvote on a proposal to 150,000,000 shares of common stock.
4.To ratify the appointment of RBSM LLPFrazier & Deeter, LLC as the Company’s independent registered public accounting firm for 2018;
4.

To vote, on an advisory basis, on a proposal to approve the fiscal year ending October 31, 2008.compensation of our named executive officers; and

5.To transact such other business as may properly come before the meeting.

To transact other business as may properly come before the annual meeting and any adjournment or postponement thereof.

RECORD DATE: You may vote if you were a holder of common stock

Only stockholders of record at the close of business on June 2, 2008. In addition, you may vote if you are a holder of Series A Preferred Stock as of that date. The terms of the Series A Preferred Stock entitle the holders thereof to 100 votes for each share of Series A Preferred Stock on all matters that the holders of the common stock25, 2018 are entitled to vote.


PROXY VOTING: It is important that your shares be representednotice of and votedto vote at the annual meeting. You can vote your shares by completingAnnual Meeting or any postponements or adjournments thereof.

YOUR VOTE IS IMPORTANT.Whether or not you plan to attend the Annual Meeting in person, we encourage you to complete and returningreturn your proxy card. You can revoke acard or voting instruction form at your earliest convenience.

By Order of the Board of Directors
Annmarie Gayle
Chairman and Chief Executive Officer

Orlando, Florida

June __, 2018

CODA OCTOPUS GROUP, INC.

7380 W. Sand Lake Road, Suite 500,

Orlando, Florida 32819

PROXY STATEMENT

General

We are providing this proxy at any time prior to its exercise at the annual meeting by following the instructions in the accompanying Proxy Statement.


BY ORDER OF THE BOARD OF DIRECTORS




Richard Lewis
Secretary Coda Octopus Group, Inc.
164 West 25th Street, 6th Floor, New York, NY 10001
Phone: (212) 924 3442

This Proxy Statement is furnished to the stockholders of Coda Octopus Group, Inc., a Delaware corporation (the “Company” or “Coda Octopus”),statement in connection with the solicitation by the Company’s Board of Directors (the “Board of Directors”)Coda Octopus Group, Inc. of proxies for use in votingto be voted at the Company’sour Annual Meeting of Stockholders (the “Annual Meeting”). Theand at any postponement or adjournment of the meeting. Our Annual Meeting will be held on Tuesday July 1, 2008 at 9:00 AM10 a.m., Eastern Daylight Time, on July 24, 2018, at theour corporate offices of Sichenzia Ross Friedman Ference LLP, 61 Broadway, 32nd Floor, New York, New York 10006. The shares of the Company’s common stock, par value $0.001 per share (“Common Stock”), presentlocated at the Annual Meeting or represented by proxies, properly marked, dated and executed and not revoked, will be voted at the Annual Meeting. This Proxy Statement and the accompanying annual report for the year ended October 31, 20077380 W. Sand Lake Road, Suite 500, Orlando, Florida.

Our proxy materials are being mailedmade available to the Company’sour stockholders beginning on or about June 10, 2008.


Any proxy given pursuant to this solicitationJuly 22018.

Solicitation of proxies on behalf of the Board of Directors may be revokedmade by our employees through the person giving it at any time before it is exercised by delivering to the Company, to the attention of Corporate Secretary, a written notice of revocation or by executing a later-dated proxy by telephone or mail or by attendingin person. We will pay all costs of the Annual Meetingsolicitation. We also will reimburse brokerage houses and votingother nominees for their reasonable expenses in person.


forwarding proxy materials to beneficial owners

SolicitationOutstanding Securities and Voting ProceduresRights


This solicitation

Only holders of proxies is being made byrecord of our common stock at the Company by mail; and the Company will bear all attendant costs. These costs include the expense of preparing and mailing proxy materials for the Annual Meeting and any reimbursements paid to brokerage firms and others for their expenses incurred in forwarding the solicitation materials regarding the Annual Meeting to the beneficial owners of Common Stock. The Company may conduct further solicitations personally, by telephone or by facsimile through its officers, directors and employees, none of whom will receive additional compensation for assisting with the solicitation.


The close of business on Monday, June 2, 2008 has been fixed as25, 2018, the record date, (the “Record Date”) for determining the holders of shares of Common Stockwill be entitled to notice of, and to vote at, the Annual Meeting. AsOn the record date, ____________ shares of our common stock were issued and outstanding.

Each holder of record of our common stock as of the close of business on the Record Date, the Company had 48,399,896 shares outstanding, all of which arerecord date is entitled to cast one vote per share. The presence, in person or by proxy, of the holders of a majority of the outstanding shares of our common stock entitled to vote is necessary to constitute a quorum at the Annual Meeting. StockholdersDirectors are elected by a plurality of the votes cast. Abstentions, although counted for purposes of determining whether there is a quorum, will have no effect on the vote. In addition, where brokers are prohibited from exercising discretionary authority in voting on a matter because beneficial owners have not provided voting instructions (commonly referred to as “broker non-votes”), the broker-non-votes will have no effect on the vote. However, if shares are deemed represented for any purpose at the meeting (for example, with respect to a matter for which a broker is permitted to exercise discretionary voting authority), the shares will be counted for purposes of determining whether there is a quorum at the meeting.

Under Delaware law, none of our stockholders are entitled to one voterights of appraisal on any proposal referred to herein.

How to Vote

The process for each share of Commonvoting your shares depends on how your shares are held. Generally, you may hold shares as a record holder or through a broker, bank or other nominee. If your shares are registered directly in your name with our transfer agent, Olde Monmouth Stock Transfer Co., Inc., you are considered a record holder with respect to such shares. If your shares are held by them. In addition, there were issued and outstanding 6,287through a bank, broker, or other nominee (such shares of Series A Preferred Stock entitling the holders thereofare often referred to 628,700 votes. Under the termsas being held in “street name”), you are considered a beneficial owner of the Series A Preferred Stock, the holders thereofshares held in street name.

Voting by Stockholders of Record

If you are a record holder, you may vote together as a classthrough one of the following methods:

●attend the Annual Meeting and submit a ballot; or
●sign and date each proxy card you receive and return it in the prepaid envelope included in your proxy materials;

Shares for which voting instructions are provided by properly executed and returned proxy cards will be voted at the Annual Meeting in accordance with the holdersinstructions provided. If a proxy is provided without voting instructions, the shares represented by the proxy will be voted FOR the election of common stock.


Holderseach of recordthe five nominees for election as director named in this proxy statement, FOR approval of Commonthe Coda Octopus Group, Inc. 2017 Stock can voteIncentive Plan, FOR ratification of the appointment of Frazier & Deeter LLC as our independent registered public accounting firm for 2018 and FOR a proposal to approve the compensation of our named executive officers. You may revoke your proxy at any time prior to its use by maildelivering or mailing to our Corporate Secretary at the address listed above a signed notice of revocation or a later-dated signed proxy, or by attending the Annual Meeting and voting by ballot. To vote by mail, holders should mark, date and sign the enclosed proxy card and return it in the envelope provided.

Beneficial holders of Common Stock and Series A Preferred Stock as of the Record Date will receive voting instructions from their bank, broker or other holder of record.

Voting by mail will not limit the right of a stockholder of record as of the Record Date to vote in personperson. Attendance at the Annual Meeting. Meeting will not in itself constitute the revocation of a proxy.

Voting by Beneficial Owners of Shares Held in Street Name

If a stockholder’syour shares are held in the name of a broker, bank broker or other holder of record, such stockholder must obtain a proxy, executednominee (in other words, your shares are held in his, herstreet name), please refer to the instructions provided by that firm for voting your shares, including information as to whether the firm offers internet or its favor, from the holder of record to be abletelephone voting. If you want to vote at the Annual Meeting. Allthose shares for which a proxy has been duly executed and delivered and not revoked will be voted at the Annual Meeting. If a stockholder of record signs and returns a proxy card but does not give voting instructions, the shares represented by that proxy will be voted as recommended by the Board of Directors.

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The presencein person at the Annual Meeting, you must bring a signed proxy from the broker, bank or other nominee, indicating that you were a beneficial owner of a majorityshares as of the voting powerclose of business on June 25, 2018, as well as the outstanding common stock, either in person ornumber of shares of which you were the beneficial owner on the record date, and appointing you as the record holder’s proxy to vote the shares covered by that proxy will constitute a quorum for the transaction of business at the Annual Meeting.

A plurality of the votes cast at the Annual Meeting will be required

Under New York Stock Exchange rules for the election of each candidate to the Board of Directors. This means that the director nominee with the most votes for a particular slot is elected for that slot. Only votes voted “for” or “withheld” affect the outcome. Abstentions are not counted for the purposes of the election of directors.


The affirmative vote of a majority of the voting power present at the Annual Meeting will be required for the approval of all other matters submitted to the vote of the Company’s stockholders. Abstentions are counted as present at the Annual Meeting for purposes of determining a quorum and have the effect of a vote “against” any matter as to which they are specified, other than the election of directors. Broker non-votes are not considered shares present and will not affect the outcome of the vote. A “broker non-vote” occurs whenmember organizations, a broker holding shares for the account of a beneficial owner doesis not permitted to vote the shares on the election of directors or on the advisory vote on a particular proposal because the broker does not have discretionaryexecutive compensation unless it receives voting power for that particular item and has not received instructions from the beneficial owner.

Stockholders Sharing Although Coda Octopus Group, Inc. is listed on the Same Address

We may send only one copyNasdaq Capital Market, the NYSE rules affect us because a portion of the Proxy Statementcommon stock held in street name is held by NYSE member brokers. Therefore, if your shares are held by a broker, it is important that you provide voting instructions to stockholders who shareyour broker so that your vote with respect to these matters is counted.

If you wish to revoke your voting instructions, you should contact the same lastbroker, bank or other nominees that holds your shares in street name for information on how to revoke your voting instructions.

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PROPOSAL 1. ELECTION OF DIRECTORS

Nominees for Election and address, unless theyExecutive Officers

The Board of Directors recently resolved to reduce the number of directors from six to five, effective following the annual meeting. Accordingly, at the annual meeting, five directors are to be elected for a term expiring at our 2019 annual meeting or until their successors have notifiedbeen duly elected and qualified.

The Board of Directors believes that its nominees described below will be able to serve as directors, if elected. If any nominee is unable to serve, proxies will be voted for the election of such other person as the Board of Directors may recommend.

Set forth below is certain information concerning the nominees for election as directors:

NameAgePosition
Annmarie Gayle51Chairman and Chief Executive Officer
Michael Hamilton70Director
Per Wimmer49Director
Mary Losty58Director
G. Tyler Runnels61Director nominee

Annmarie Gayle has been our Chief Executive Officer and a member of the Board of Directors since 2011 and our Chairman since March 2017. She is also our Chief Executive Officer for our flagship products business, Coda Octopus Products, Limited (UK) since 2013. Prior thereto, she spent two years assisting with the restructuring of our Company. She previously served with the Company as Senior Vice President of Legal Affairs between 2006 and 2007. Earlier in her career she worked for a major London law practice, the United Nations and the European Union. Ms. Gayle has a strong background in restructuring and has spent more than 12 years in a number of countries where she has been the lead adviser to a number of transitional administrations on privatizing banks and reforming state-owned assets in the Central Eastern European countries including banking, infrastructure, mining and telecommunications assets. Ms. Gayle has also managed a number of large European Union funded projects. Ms. Gayle holds a Law degree gained at the University of London and a Masters of Law degree in International Commercial Law from Cambridge University. She is qualified to practice as a solicitor in England & Wales. Because of her wealth of experience in corporate governance, large scale project management, restructuring, strategy, structuring and managing corporate transactions, we believe that they wantshe is highly qualified to act as our Chairman and Chief Executive Officer.

Michael Hamilton was our Chairman of the Board between June 2010 and March 2017. He is currently serving as an independent director of our Board. Since 2014, Mr. Hamilton has provided accounting and valuation services for a varied list of clients. He was Senior Vice President of Powerlink Transmission Company from 2011 through 2014. From 1988 to 2003, he was an audit partner at PriceWaterhouseCoopers. He holds a Bachelor of Science in Accounting from St. Frances College and is a certified public accountant and is accredited in business valuation. Because of Mr. Hamilton’s background in auditing, strategic corporate finance solutions, financial management and financial reporting, we believe that he is highly qualified to be a member of our Board of Directors.

Per Wimmerhas been a director since May 2017. Since 2011, Mr. Wimmer has been the Chief Executive Officer of Wimmer Family Office, a London based private investment firm founded by him. In 2007, he founded Wimmer Financial, a merchant bank/corporate advisory firm specializing in natural resources, real estate, infrastructure, aviation, shipping and project debt financing. Prior thereto, he was active in the institutional sales area at Goldman Sachs & Co.’s New York and London offices where he focused his attention primarily on advising Scandinavian financial institutions. Mr. Wimmer holds law degrees from the University of Copenhagen and the University of London. He also earned a Master of Public Administration from Harvard University with concentrations in business, finance and international relations. Mr. Wimmer is the author of a number of books including “Wall Street” that discusses bubbles in the financial markets, and “The Green Bubble”, that promotes the argument that for green energy to be truly sustainable, it must be commercially sustainable. His interests are wide ranging and include space travel and exploration. He has completed space training and has been working closely with Richard Branson to develop Virgin Galactic’s space program. The Company’s board of directors believes that Mr. Wimmer’s extensive experience in global finance and cross border investments makes him highly qualified to be a member of our Board of Directors.

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Mary Losty has been a director since July 2017. She is a private investor in both US equities and real estate. She currently serves as Commissioner on both Dorchester County and the City of Cambridge, Maryland’s Planning and Zoning Commissions. She also serves as a Committeeman for the Eastern Shore Land Conservancy as well as the Pine Street Committee of Cambridge, MD. She served as a member of the Board of Procera Networks, Inc. from March 2007 until that company was successfully sold in June 2015 to a private equity firm. She was a member of that company’s Audit Committee and the former Chairman of the Nominating and Governance Committee. Ms. Losty was a director of Blue Earth, Inc. (formerly Genesis Fluid Solutions Holdings, Inc.) from 2009 to 2011. Ms. Losty retired in 2010 as the General Partner at Cornwall Asset Management, LLC, a portfolio management firm located in Baltimore, Maryland, where she was responsible for the firm’s investment in numerous companies since 1998. Ms. Losty’s prior experience includes working as a portfolio manager at Duggan & Associates from 1992 to 1998 and as an equity research analyst at M. Kimelman & Company from 1990 to 1992. Prior to that, she worked as an investment banker at Morgan Stanley and Co., and for several years prior to that she was the top aide to James R. Schlesinger, a five-time U.S. cabinet secretary. Ms. Losty received both her BS and JD from Georgetown University, the latter with magna cum laude distinction. We believe that Ms. Losty’s extensive dealings with the investment community makes her highly qualified to be a member of our Board of Directors.

G. Tyler Runnels. Mr. Runnels has been nominated by our board to be elected as a director at the 2018 annual meeting to fill a vacancy created by the departure of two of our directors. Mr. Runnels has nearly 30 years of investment banking experience including debt and equity financings, private placements, mergers and acquisitions, initial public offerings, bridge financings, and financial restructurings. Since 2003 Mr. Runnels has been the Chairman and Chief Executive Officer of T.R. Winston & Company, LLC, an investment bank and member of FINRA, where he began working in 1990. Mr. Runnels was an early stage investor in our company and T.R. Winston & Company, LLC has served as our exclusive placement agent in one of our private placements raising early rounds of capital for our company. Mr. Runnels has successfully completed and advised on numerous transactions for clients in a variety of industries, including healthcare, oil and gas, business services, manufacturing, and technology. Mr. Runnels is also responsible for working with high net worth clients seeking to diversify their portfolios to include real estate products through established relationships with real estate brokers, accountants, attorneys, qualified intermediaries and financial advisors. Prior to joining T.R. Winston & Co., LLC, Mr. Runnels held the position of Senior Vice President of Corporate Finance for H.J. Meyers & Company, a regional investment bank. Mr. Runnels is a member of the board of directors of Lilis Energy, Inc. (NYSE American: LLEX) and Level Brands, Inc. (NYSE American: LEVB) and serves on the Pepperdine University President’s Campaign Cabinet. Mr. Runnels received a B.S. and MBA from Pepperdine University. Mr. Runnels holds FINRA Series 7, 24, 55, 63 and 79 licenses. We selected Mr. Runnels to serve on our board of directors based upon his significant experience both as an investor and advisor, as well as his experience as a board member of a number of listed companies.

Family Relationships

None of our Directors are related by blood, marriage, or adoption to any other Director, executive officer, or other key employees.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTEFOR EACH OF ITS NOMINEES FOR ELECTION AS A DIRECTOR.

CORPORATE GOVERNANCE

Board Leadership Structure

The Board of Directors is currently chaired by the Chief Executive Officer of the Company, Annmarie Gayle. The Company believes that combining the positions of Chief Executive Officer and Chairman of the Board of Directors helps to ensure that the Board of Directors and management act with a common purpose. Integrating the positions of Chief Executive Officer and Chairman can provide a clear chain of command to execute the Company’s strategic initiatives. The Company also believes that it is advantageous to have a Chairman with an extensive history with and knowledge of the Company. Notwithstanding the combined role of Chief Executive Officer and Chairman, key strategic initiatives and decisions involving the Company are discussed and approved by the entire Board of Directors. The Company believes that the current leadership structure and processes maintain an effective oversight of management and independence of the Board of Directors as a whole without separate designation of a lead independent director. However, the Board of Directors will continue to receive multiple copies. This practice, known as “householding,” is designedmonitor its functioning and will consider appropriate changes to reduce duplicate mailingsensure the effective independent function of the Board of Directors in its oversight responsibilities.

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Independence of the Board of Directors and printingsits Committees

After review of all relevant transactions or relationships between each director, or any of his or her family members, and postage costs. However, if any stockholder residing at such address wishes to receive a separate Annual Report or Proxy Statement in the future, he or she may contactCompany, its senior management and its Independent Registered Public Accounting Firm, the Corporate Secretary atBoard of Directors has determined that all of the address listed above.


References to fiscal Years

Company’s directors are independent within the meaning of the applicable NASDAQ listing standards, except Ms. Gayle, the Company’s Chairman and Chief Executive Officer. The Company’s fiscal year ends on October 31Board of each calendar year. Each reference to a fiscal year refers to the fiscal year ending in the calendar year indicated (e.g., fiscal 2007 refers toDirectors met four times and acted by unanimous written consent four times during the fiscal year ended October 31, 2007).
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CORPORATE GOVERNANCE

Introduction

The Company has in place a comprehensive corporate governance framework. The Company has adopted a set of Corporate Governance Guidelines and a Code of Business Conduct and Ethics and charters for various committees2017. Each member of the Board of Directors the full texts of which are available in print to any stockholder upon request to the Corporate Secretary.

The Board of Directors has affirmatively determined that a majority of the members of the Board of Directors are “independent” and that the Compensation Committee is comprised entirely of independent directors.

Director Independence

The Board of Directors uses the following categorical standards in determining the “independence” of its directors:

1. During the past two years, the Company shall not have employed the director, or, except in a non-officer capacity, any of the director’s immediate family members;
2. During the past three years the director shall not have received, and shall not have an immediate family member who has received, during any twelve-month period within the last three years, more than $100,000 in direct compensation from the Company, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service);
3. (a) Neither the director nor any of his or her immediate family members shall be a current partner of a firm that is the Company’s internal or external auditor, (b) the director shall not be a current employee of such firm, (c) the director shall not have an immediate family member who is a current employee of such firm who participates in the firm’s audit, assurance or tax compliance (but not tax planning) practice, and (d) neither the director nor any of his or her immediate family members shall have been, within the last three years, a partner or employee of such firm and personally worked on the Company’s audit within that time;
4. Neither the director, nor any of his or her immediate family members, shall be, or shall have been within the last three years, employed as an executive officer of another company where any of the Company’s present executive officers at the same time serves on that company’s compensation (or equivalent) committee;
5. The director shall not be a current employee and shall not have an immediate family member who is a current executive officer of a company that has made payments to, or received payments from, the Company for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of (a) $1 million or (b) 2% of the consolidated gross revenues of such other company;
6. During the past five years, the director shall not have had a personal services contract with the Company, the Chairman of the Board, the Chief Executive Officer, any other executive officer or any affiliate of the Company;
7. The director shall not be an executive officer of a tax exempt organization to which the Company has made contributions in any of the last three fiscal years that have exceeded the greater of (a) $1 million or (b) 2% of the consolidated gross revenues of such tax exempt organization; and
8. The director shall not, either directly or indirectly as a partner, stockholder or officer of another company, own more than five percent of any class of equity securities of the Company.

The Board of Directors has determined that each of Paul Nussbaum and Rodney Peacock is “independent” in accordance with the above specified standards.
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Board of Directors and Committees

The Board of Directors held five meetings in fiscal 2007. In fiscal 2007, each of the Company’s directors attended or participated in each of (i) the total number ofall meetings of the Board of Directors held in the last fiscal year during the period infor which each such director served ashe or she was a director and (ii) the total number of meetings held by all committees of the Boardmeetings of Directorsthe committees on which he or she served held in the last fiscal year during the period infor which each such director served on such committee.  

he or she was a committee member.

The Board of Directors has established an Audit Committee, a Nominating Committee, and a Compensation Committee.


Audit Committee

The Audit Committee’s purpose is:

ཉbeing directly responsible for the appointment, compensation and oversight of the independent auditor, which shall report directly to the Audit Committee, including resolution of disagreements between management and auditors regarding financial reporting for the purpose of preparing or issuing an audit report or related work;
ཉto oversee management’s preparation of the Company’s financial statements and management’s conduct regarding the accounting and financial reporting processes;
ཉto oversee management’s maintenance of internal controls and procedures for financial reporting;
ཉto oversee the Company’s compliance with applicable legal and regulatory requirements, including without limitation, those requirements relating to financial controls and reporting;
ཉto oversee the independent auditor’s qualifications and independence;
ཉto oversee the performance of the independent auditors, including the annual independent audit of the Company’s financial statements;
ཉto prepare the report required by the rules of the SEC to be included in the Company’s proxy statement; and
ཉto discharge such duties and responsibilities as may be required of the Audit Committee by the provisions of applicable law or rule or regulation of the American Stock Exchange and the Sarbanes-Oxley Act of 2002.

The members ofthree committees: the Audit Committee, are Paul Nussbaum, who serves as Chairman and Rodney Peacock, each of whom is an “independent director” under the standards of Item 7(d)(3)(iv) of Schedule 14A of the Securities Exchange Act of 1934, as amended. Mr Nussbaum is our “audit committee financial expert” as defined by Section 407 of the Sarbanes-Oxley Act of 2002. We believe that the composition of our Audit Committee meets the requirements for independence under the current requirements of the Sarbanes-Oxley Act of 2002 and SEC rules and regulations. We believe that the functioning of the Audit Committee complies with the applicable requirements of the Sarbanes-Oxley Act of 2002, as well as SEC rules and regulations.

The Audit Committee operates under a written Audit Committee charter adopted by the Board of Directors. The Audit Committee held two meetings during fiscal 2007.

Compensation Committee

The Compensation Committee which is made up of Messrs Nussbaum and Peacock, is responsible for, among other things, reviewing and evaluating all compensation arrangements for the executive officers of the Company and administrating the Company’s 2004 Employees, Directors, Officers and Consultants Stock Option and Stock Award Plan (the “2004 Plan”), as well as the Company’s 2006 Employees, Directors, Officers and Consultants Stock Option and Stock Award Plan (the “2006 Plan”). The Compensation
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Committee approved the restrictions contained in the definitive agreements relating to the issuance of the convertible secured loan note by us on February 21, 2008, which limits the amount of options which may be awarded during the term and the price at which such options may be issued.

The Compensation Committee held one meeting during fiscal 2007. The Compensation Committee operates underNominating Committee. Below is a written charter adopted bydescription of each committee of the Board of Directors. The Board of Directors has determined that alleach member of each committee meets the applicable rules and regulations regarding “independence” and that each member is free of any relationship that would interfere with his or her individual exercise of independent judgment with regard to the Company.

Audit Committee

The Audit Committee of the Board of Directors oversees the Company’s corporate accounting and financial reporting process. For this purpose, the Audit Committee performs several functions. The Audit Committee, among other things: evaluates the performance, and assesses the qualifications, of the Independent Registered Public Accounting Firm; determines and pre-approves the engagement of the Independent Registered Public Accounting Firm to perform all proposed audit, review and attest services; reviews and pre-approves the retention of the Independent Registered Public Accounting Firm to perform any proposed, permissible non-audit services; determines whether to retain or terminate the existing Independent Registered Public Accounting Firm or to appoint and engage a new Independent Registered Public Accounting Firm for the ensuing year; confers with management and the Independent Registered Public Accounting Firm regarding the effectiveness of internal controls over financial reporting; establishes procedures as required under applicable law, for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters and the confidential and anonymous submission by employees of concerns regarding questionable accounting or auditing matters; reviews the financial statements to be included in the Company’s Annual Report on Form 10-K and recommends whether or not such financial statements should be so included; and discusses with management and the Independent Registered Public Accounting Firm the results of the annual audit and review of the Company’s quarterly financial statements.

The Audit Committee is currently composed of four outside directors: Michael Hamilton (Chairman), Francis (Chuck) Rogers, Nina Hoque and Mary Losty. The Audit Committee met two times during the fiscal year ended October 31, 2017. Mr. Rogers and Ms. Hoque are not standing for reelection. The Audit Committee Charter is available on the Company’s website,www.codaoctopusgroup.com.

The Board of Directors periodically reviews the NASDAQ listing standards’ definition of independence for Audit Committee members and has determined that all members of the Company’s Audit Committee are independent (as independence is currently defined in Rule 5605(c)(2)(A) of the NASDAQ listing standards and Rule 10A-3(b)(1) of the Securities Exchange Act of 1934, as amended). The Board of Directors has determined that Michael Hamilton qualifies as an “audit committee financial expert,” as defined in applicable SEC rules. The Board of Directors made a qualitative assessment of Mr. Hamilton’s level of knowledge and experience based on a number of factors, including his formal education and his service in professional capacities having financial oversight responsibilities.

Compensation Committee

The Compensation Committee of the Board of Directors reviews, modifies and approves the overall compensation strategy and policies for the Company. The Compensation Committee, among other things: reviews and approves corporate performance goals and objectives relevant to the compensation of the Company’s officers; determines and approves the compensation and other terms of employment of the Company’s Chief Executive Officer; determines and approves the compensation and other terms of employment of the other officers of the Company; and administers the Company’s stock option and purchase plans, pension and profit sharing plans and other similar programs.

The Compensation Committee is currently composed of three outside directors: Michael Hamilton (Chair), Francis (Chuck) Rogers and Per Wimmer. Mr. Rogers is not standing for reelection. All members of the Compensation Committee are “independent.”


independent (as independence is currently defined in Rule 5605(a)(2) of the NASDAQ listing standards). The Compensation Committee did not meet during the fiscal year ended October 31, 2017. The Compensation Committee Charter is available on the Company’s website,www.codaoctopusgroup.com.

Compensation Committee Interlocks and Insider Participation

No member of our compensation committee has at any time been an employee of ours. None of our executive officers serves as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving as a member of our board of directors or compensation committee.

Nominating Committee


The Nominating Committee of the Board of Directors is responsible for, overseeing nominationsamong other things: identifying, reviewing and evaluating candidates to serve as directors of the Company; reviewing, evaluating and considering incumbent directors; recommending to the Board of Directors including: (i) developingfor selection candidates for election to the criteriaBoard of Directors; making recommendations to the Board of Directors regarding the membership of the committees of the Board of Directors; and assessing the performance of the Board of Directors.

The Nominating and Governance Committee is currently composed of four outside directors: Francis (Chuck) Rogers (Chair), Per Wimmer, Michael Hamilton and Mary Losty. Mr. Rogers is not standing for reelection. All members of the Nominating Committee are independent (as independence is currently defined in Rule 5605(a)(2) of the NASDAQ listing standards). The Nominating Committee did not meet during the fiscal year ended October 31, 2017. The Nominating Committee Charter is available on the Company’s website,www.codaoctopusgroup.com.

The Nominating Committee has not established any specific minimum qualifications that must be met for membershiprecommendation for a position on the Board of Directors, (ii) recommendingDirectors. Instead, in considering candidates to fill new or vacant positions onfor director the Board of Directors, and (iii) conducting appropriate inquiries into backgrounds of potential candidates. The Nominating Committee currently consists of Messrs. Reid and Nussbaum (who is independent). The Nominating Committee operates under a written charter adopted by the Board of Directors. The Nominating Committee will generally consider director candidates recommended byall relevant factors, including among others the Company’s stockholders. Stockholders may recommend director candidates by contactingcandidate’s applicable education, expertise and demonstrated excellence in his or her field, the Chairmanusefulness of the Board. The Nominating Committee considers candidates suggested by its members, other directors, senior management and stockholders in anticipation of upcoming elections and actual or expected board vacancies. All candidates, including those recommended by stockholders, are evaluated onexpertise to the same basis in lightCompany, the availability of the entiretycandidate to devote sufficient time and attention to the affairs of their credentialsthe Company, the candidate’s reputation for personal integrity and ethics and the needcandidate’s ability to exercise sound business judgment. Other relevant factors, including diversity, experience and skills, will also be considered. Candidates for director are reviewed in the context of the existing membership of the Board of Directors (including the qualities and skills of the existing directors), the operating requirements of the Company and the Company. Of particular importance are the candidate’s integritylong-term interests of its stockholders.

The Nominating Committee considers each director’s executive experience and judgment, professional achievements and experience relevant to the Company’s business and strategic challenges, his or her familiarity and experience with the various operational, scientific and/or financial aspects of managing companies in our industry.

With respect to diversity, the Nominating Committee seeks a diverse group of individuals who have executive leadership experience and a complementary mix of backgrounds and skills necessary to provide meaningful oversight of the Company’s activities. The Nominating Committee annually reviews the Board’s composition in light of the Company’s changing requirements. The Nominating Committee uses the Board of Director’s network of contacts when compiling a list of potential contributiondirector candidates and may also engage outside consultants. Pursuant to its charter, the diversity ofNominating Committee will consider, but not necessarily recommend to the Board of Directors, potential director candidates recommended by stockholders. All potential director candidates are evaluated based on the factors set forth above, and his or her willingness to devote adequate time to fulfill duties as a director. Thethe Nominating Committee did not hold any meetings in fiscal 2007.has established no special procedure for the consideration of director candidates recommended by stockholders.

Code of Ethics

We have a Code of Ethics applicable to all of our officers, other employees and directors. The Code of Ethics is available on the Company’s website,www.codaoctopusgroup.com.

6

Director CommunicationsEmployment Agreements


Interested parties may express their concernsAnnmarie Gayle

Pursuant to the Company’s non-management directors by contacting the Chairmanterms of the Board of Directors, c/o Corporate Secretary, Coda Octopus Group, Inc., 164 West 25th Street, 6th Floor, New York, NY 10001. The Corporate Secretary will relay all such correspondence to the Chairman of the Board of Directors who will relay such correspondence to the entire Board of Directors.


Non-Employee Director Compensation

Each person who is a non-employee director ofan employment agreement dated March 16, 2017, the Company receivedemploys Ms. Gayle as its Chief Executive Officer on a grantfull-time basis and a member of shares of common stock and options to purchase common stock. New non-employee directors receive an automatic grant of options on the date that they become a director.

All such grants of options and restricted stock to non-employee directors are subject to certain terms and conditions (including, without limitation, a term of five years for options and limitations on exercisability of options following cessation of service with the Company as a director) described in the 2004 Plan and the 2006 Plan. The exercise price for options granted to non-employee directors under the 2004 Plan was $1.00 and under the 2006 Plan ranges from $1.00-$1.50.

PROPOSAL NO. 1:
ELECTION OF DIRECTORS

There are currently three directors on theits Board of Directors. Each director holds office until such director’s successor has been duly elected and qualified, or until his or her earlier resignation or removal.

A totalThe annual salary is $230,000 payable on a monthly basis. Ms. Gayle is also entitled to an annual performance bonus of three directors have been nominated for re-election at the Annual Meetingup to serve for a term of one year until the annual meeting of stockholders$100,000, upon achieving certain targets that are to be helddefined on an annual basis. The agreement provides for 30 days of paid holidays in fiscal 2009,addition to public holidays observed in Scotland.

The agreement has no definitive term and their successors are duly electedmay be terminated only upon twelve months’ prior written notice by Ms. Gayle. In the event that the Company terminates her at any time without cause, she is entitled to a payment equal to her annual salary as well as a separation bonus of $150,000. The Company may terminate the agreement for cause, immediately and qualified until the earlier of their resignationwithout notice. Among others, “for cause” includes gross misconduct, a serious or removal. A pluralityrepeated breach of the votes cast atagreement and negligence and incompetence as reasonably determined by the Annual Meeting shall elect each director. StockholdersCompany’s Board. The agreement includes a 12-month non-compete and non-solicitation provision.

Blair Cunningham

Under the terms of an employment contract dated January 1, 2013, our wholly owned subsidiary Coda Octopus Products, Inc. employs Blair Cunningham as its Chief Executive Officer and President of Technology. He is being paid an annual base salary of $175,000 with effect from January 1, 2018, subject to review by the Company’s Chief Executive Officer. Mr. Cunningham is entitled to 25 vacation days in addition to any public holiday.

The agreement may not votebe terminated only upon twelve-month prior written notice without cause. The Company may terminate the agreement for more than three persons, which iscause, immediately and without notice. Among others, “for cause” includes gross misconduct, a serious or repeated breach of the numberagreement and negligence and incompetence as reasonably determined by the Company’s Board. The agreement includes a 18-month non-compete and non-solicitation provision.

Michael Midgley

Pursuant to the terms of nominees identified herein.


The nominees are Jason Reid, Rodney Peacock, and Paul Nussbaum, each of whom is an incumbent director and has consented to be named in this proxy statement and to serve if elected. Certain information aboutemployment agreement dated June 1, 2011, Mike Midgley was appointed the nominees is furnished below.

Jason Reid has served since June, 2004 as a director, President and Chief Executive Officer of our wholly owned subsidiary Coda Octopus Group,Colmek, Inc. (“Colmek”) and our Chief Financial Officer. He is being paid an annual salary of $200,000 subject to an annual review by Colmek’s Board of Directors and the Company’s Chief Executive Officer. Mr. Reid has been affiliated with Coda Octopus Products Ltd.,Midgley is entitled to 20 vacation days in addition to any public holiday.

The agreement may be terminated at any time upon 4 months prior written notice. The Company may terminate the current key operating subsidiary, since 1994, initially asagreement for cause, immediately and without notice. Among others, “for cause” includes gross misconduct, a founder and independent director and, since 2002, as Managing Director. Mr. Reid is a directorserious or repeated breach of the agreement and negligence and incompetence as reasonably determined by the Company’s subsidiaries, Coda Octopus Products Ltd., Coda Octopus Omnitech AS (Norway), Coda Octopus Products, Inc., Innalogic, Inc., Port Security Group, Inc.Board. The agreement includes a 12-month non-compete and Martech Systems (Weymouth) Limited. He is also a director of Fairwater Holdings Ltd. and Fairwater Technology Group Ltd, a principal stockholder of the Company. He was a founding partner, in 1984, of Weight Management Group Ltd, a $20m Scottish company which competes directly with Weight Watchers International, Inc., and which is market leader in Scotland. From 1992-2004, he was Managing Director of Weight Management Group Ltd, acquiring, in 2001, Green Meadow Foods Ltd, which distributed controlled dietary foods throughout Scotland to the major retail trade. In 2003, he oversaw the successful national UK launch of a new magazine title, published by Weight Management Group Ltd. He became a non-executive director of both companies when he assumed the role of President and CEO of Coda Octopus Group, Inc. in 2004. Between 1993 and 2004 he was also chairman of a software development company in Scotland, Softworks Business Systems Solutions Ltd., producing commercial software for public companies, including Bulthaup and Manchester Ship Canal, part of Peel Holdings plc. In 1997, he was a Director of William Grant Mining Ltd. In the past, he also served as a director of Slimmer Clubs Ltd.


Rodney Peacock has served as a Director of Coda Octopus Group, Inc. since January 2005. He has been Managing Director of Axiom Marketing & Management Ltd, a consultancy firm, since November 1997. From 1990 to 1997, he served as Joint Managing Director of the Brand Development Company and from 1985-90, Managing Director of NPL, an Addison Group Subsidiary. He was, from 1981-85, head of the Marketing Group of Arthur Young Consultancy and from 1976-81 General Manager, Retail Products Division of Tate & Lyle. From 1970-76, he served as Brand Group Manager of United Biscuits and from 1964 to 1970, Research Chemist of Ilford Films. Mr. Peacock received his BSc (Hons) in Physics and Chemistry from London University.

Paul Nussbaum has served since January 2005 as Chairman ofnon-solicitation provision. On December 6, 2017, the Board of Directors of Coda Octopus Group, Inc. in a non-executive capacity. He is the chairman ofCompany appointed Mr. Midgley to be the Waramaug Partners Group, a private real estateCompany’s Chief Financial Officer. In connection with this appointment, all rights and special situations equity firm. He is the former Chairman Emeritus of Wyndham International, Inc., (NYSE:WYN), successorobligations under Mr. Midgley’s employment agreement with Colmek were transferred to Patriot American Hospitality, Inc. From 1991 to 1999 he served as Founder, Chairman & Chief Executive Officer for the Patriot American Group of Companies, including Patriot American Hospitality, Inc., a paired share real estate investment trust which owned the Wyndham, Grand Bay, Malmaison, Summerfield Suites, and Clubhouse Inn proprietary hotel brands. From 1979 to 1991, Mr. Nussbaum served as chairman of the real estate practice group of Schulte Roth & Zabel, a law firm in New York. From 1971 to 1979, he was an associate and later a partner in the Dreyer & Traub law firm in New York. Mr. Nussbaum earned his B.A. degree from the State University of New York at Buffalo and his J.D. degree from Georgetown University Law Center.

It is the intention of the persons named as proxies in the accompanying proxy, unless instructed otherwise, to vote for the persons nominatedhave been assumed by the Board of Directors. If any nominee should become unavailable to serve, the proxy may be voted for the election of such substitute nominee as may be designated by the Board of Directors. The Board of Directors has no reason to believe that any of the nominees will be unable to serve if elected.

Company.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE EXECUTIVE COMPENSATION

FOR THE ELECTION OF THE NOMINEES NAMED ABOVE.  


Directors and Executive Officers

The current directors and executive officers of the Company are as follows:

Name
 
Age
 
Position(s)
Position
Jason ReidAnnmarie Gayle 42President, Chief Executive Officer and Director
Paul Nussbaum6051 Chairman of the Board of Directorsand Chief Executive Officer
Rodney PeacockMichael Midgley 61Director
Jody E. Frank5566 Chief Financial Officer, Chief Executive Officer of Coda Octopus Colmek, Inc.
Blair Cunningham 38Chief Technology Officer
Anthony Davis4148 President US Operationsof Technology

Annmarie Gayle.For information regarding Ms. Gayle, please see Proposal 1 discussed above.

Frank B. Moore72Senior Vice President, Government Relations
Geoff Turner54President European Operations
Angus Lugsdin31Senior Vice President, Market Development7

Michael Midgley has been our Chief Financial Officer since December 2017 and our acting Chief Financial Officer since 2013. He has also been Chief Executive Officer of Colmek since 2010, which he joined in 2008. He is a qualified CPA and has had his own practice as well as working for regional accounting firms, specializing in SEC and Tax practice areas. Mr. Midgley attended the University of Utah where he obtained a BA in Accounting. Due to Mr. Midgley’s expertise in financial reporting, we believe that he is highly qualified to serve as the Company’s Chief Financial Officer.

Blair Cunningham has served as Chiefbeen with the Company since July 2004 and has had a number of roles including President of Technology Officerand CEO of Coda Octopus Group,Products, Inc. (current positions), Chief Technology Officer since 2005 and Technical Manager of Coda Octopus Products Ltd between July 2004 and July 2005. Mr. Cunningham is also a Director of the Company’s subsidiaries, Martech and Coda Octopus (UK) Holdings Limited. From March 1992 to present he has served as a Director of Softworks Business Systems Solutions Ltd, an Aberdeen, Scotland based software company which developed turnkey software solutions for large public companies. From 1990-92, Mr. Cunningham was an Analyst/Programmer with Weight Management Group Ltd, Aberdeen. Mr. Cunningham received an HND in Computer Science in 1989 from Moray College of Further Education, Elgin, Scotland.

Anthony Davis has served, initially as Chief Commercial OfficerBecause of Coda Octopus Group, Inc. since July 2005Mr. Cunningham’s expertise in technology, systems software development and since November 1, 2007, as President US Operations. Previously,project management, the Company believes that he served as Business Development Manageris highly qualified to serve in his current roles.

Summary Compensation Table

The following Summary Compensation Table shows certain compensation information for services rendered for the fiscal years ended October 31, 2017 and 2016 by our executive officers. The following information includes the dollar value of Coda Octopus Products Ltd from 2002-04, prior to which he was a Sales Manager between 1998base salaries, bonus awards, stock options grants and 2002. Mr. Davis is also a Directorcertain other compensation, if any, whether paid or deferred. In accordance with the rules and regulations of the Company’s subsidiaries, MartechSecurities and Coda Octopus (UK) Holdings Limited. He was a Project Manager from 1996Exchange Commission the table omits columns that are not applicable.

Name and Principal
Position		 Year  Salary  Restricted Stock Awards  *All Other Compensation  Total 
     ($)  ($)  ($)  ($) 
                
Annmarie Gayle,  2017   230,000   15,500   -0-   245,500 
Chief Executive Officer  2016   230,000   -0-   -0-   230,000 
                     
Michael Midgley  2017   200,000   11,000   13,332   224,332 
Chief Financial Officer  2016   200,000   -0-   16,805   216,805 
                     
Blair Cunningham  2017   160,000   15,290   17,393   192,683 
President of Technology  2016   160,000   -0-   17,278   177,278 

*The amounts described in the category of “All Other Compensation” comprise Health, Dental, Vision, Short Term Disability, Long Term Disability and Accidental Death and Dismemberment insurance premiums which the Company contributed to 1998 at Cable & Wireless Marine, Chelmsford, England and Survey Manager in Abu Dhabi for NPCC from 1994the officers’ identified plan.

Director Compensation

The following table sets forth the compensation paid to 1996. He served as a Project Geophysicist in Singapore for Ocean Science International from 1992 to 1994, as an Offshore Geophysicist for NESA in Delft from 1990-91 and as a Logging Engineer for Schlumberger in Aberdeen from 1987 to 1990. He earned his BSc Geology & Geophysics at Edinburgh University in 1987.


Frank B. Moore has served as Senior Vice President, Government Relations of Coda Octopus Group, Inc. since May 2006. Mr. Moore is also a Directoreach of our key subsidiary, Colmek. Since December, 2001, Mr. Moore has served as Chairman of Ulysses Financial, a company engaged in private equity financing. Between January 1977 and January 1981, Mr. Moore served as Assistant to the President of the United States. His chief responsibility was the Administration’s relations with Congress. Mr. Moore reported directly to the President anddirectors (who are not also worked on international matters such as the Panama Canal Treaty and the Strategic Arms Limitations Talks (S.A.L.T. II). Prior to his position in the White House, Mr. Moore served as Assistant, and later as Chief of Staff, to the Governor of Georgia, Jimmy Carter. Between July, 1982 and September, 1998, Mr. Moore was Vice President for Government Affairs and Public Policy for Waste Management. Mr. Moore earned his BBA from the University of Georgia and completed the Advanced Management Program at Harvard Business School.

Geoff Turner has served initially as Senior Vice President, Mergers and Acquisitions of Coda Octopus Group, Inc. since May 2006, and, since November 1, 2007, as President European Operations. Previously, he served as a consultant from November 2005 to April 2006 through his consultancy company Taktos Limited. Mr. Turner is also a Director of the Company’s subsidiaries, Martech and Coda Octopus (UK) Holdings Limited. He has been involved in the IT industry for over 30 years, in both technical and commercial roles. He spent the 13 years up to 1999 with GE Information Services (& International Network Services), the then global market leader in Electronic Commerce, where he was Director of Business Development for Europe, Middle East and Africa. During this time, in addition to his business development roles he held posts as Software Products Director, and in global channel sales management. Since leaving GE in 1999, Mr. Turner has been involved as a stockholder and a consultant through Taktos Limited in a number of businesses ranging from financial services businesses to a provider of supply chain management software.
Angus Lugsdin, who has been with us since 2002, has recently been appointed as Senior Vice President of Market Development. Prior to this, Mr. Lugsdin was Vice President of Market Development from November 2006. He has held a number of positions with us including Sales Manager of Octopus Marine (which was acquired by us in 2002) from July 1999 to May 2002, Sales Manager of Coda Octopus Inc from May 2002 to June 2004 and Strategic Development Executive from July to October 2006. He earned his BSC in Marine Geography from University of Wales in 1998.

Relationships among Directors or Executive Officers
There are no familial relationships among any of the directors or executive officers of the Company.

Company) for the fiscal year ended October 31, 2017, in connection with their services to the company. In accordance with the Commission’s rules, the table omits columns showing items that are not applicable. Except as set forth in the table, no persons were paid any compensation for director services.

Name Fees Earned or Paid in
Cash ($)		  Stock
Awards ($)		  Total ($) 
Michael Hamilton  20,000       20,000 
Francis (Chuck) Rogers  10,000       10,000 
Per Wimmer  5,000   30,715   35,715 
Nina Hoque  2,500   30,715   33,215 
Mary Losty  0   32,308   32,308 

SECURITYSECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information as of June 2, 200819, 2018, regarding the beneficial ownership of our Common Stock, based on information provided by (i) each of our executive officers and directors; (ii) all executive officers and directors as a group; and (iii) each person who is known by us to beneficially own more than 5% of the outstanding shares of our Common Stock. The percentage ownership in this table is based on 48,409,92710,415,416 shares issued and outstanding as of June 2, 2008.

Unless otherwise indicated, the address of each beneficial owner is in care of the Company, 164 West 25 th Street, 6 th Floor, New York, NY 10001. 19, 2018.

Unless otherwise indicated, we believe that all persons named in the following table have sole voting and investment power with respect to all shares of Common Stock that they beneficially own.


Name and Address of Beneficial Owner (1) 
Amount and Nature
Of Beneficial Ownership of
Common Stock (2) 
 
Percent of
Common Stock 
 
Jason Reid (3) 23,736,877  49.0%
Paul Nussbaum (4) 708,295  1.5%
Rodney Peacock (5) 517,064  1.1% 
Blair Cunningham (6) 490,159  1.0% 
Anthony Davis (7) 390,159  * 
Frank B. Moore (8) 215,159  * 
Geoff Turner (9) 190,159  * 
Jody Frank (10) 187,908  * 
Angus Lugsdin (12) 237,587    
Vision Opportunity Master Fund Limited (11 )
317 Madison Avenue, Suite 1220
New York, NY 10017
 5,157,472  9.9%
       
All Directors and Executive Officers as a Group (nine persons): 
 26,673,367  55.1%

Name and Address of Beneficial Owner(1) Amount and Nature of Beneficial Ownership of Common Stock  

Percent of

Common Stock

 
Michael Hamilton  7,143   * 
Annmarie Gayle(2)  13,037   * 
Michael Midgley  7,143   * 
Blair Cunningham  24,297   * 
Francis Rogers  7,143   * 
Per Wimmer  7,143   * 
Nina Hoque  7,143   * 
Mary Losty  82,143   * 
Niels Sondergaard(2)
Carit Etlars Vej 17A
8700 Horsens
Denmark		  2,213,485   21.3%

BKF Asset Holding Inc.(3)

31248 Oak Crest Drive, Suite 110

Westlake Village, CA 91361

  743,453   7.2%

G. Tyler Runnels(4)

2049 Century Park East, Suite 320

Los Angeles, CA 90067

  1,310,946   12.6%

J. Steven Emerson(5)

1522 Ensley Avenue

Los Angeles, CA 90024

  1,088,225   10.7%

Bryan Ezralow(6)

23622 Calabasas Rd. Suite 200

Calabasas, CA 91302

  1,163,410   11.3%

Forest Manor NV

Albert Hahnplantsoen 23

Amsterdam

The Netherlands

  1,251,007   9.9%
All Directors and Executive Officers as a Group (Eight persons):  80,200   * 

*)Less than 1%.

(1)   Unless otherwise indicated, the address of all individual

1)Unless otherwise indicated, the address of all individuals and entities listed below is c/o Coda Octopus Group, Inc. 7380 Sand Lake Road, Suite #500, Orlando, FL 32819.
2)Does not include 2,213,485 shares beneficially owned by Ms. Gayle’s domestic partner. Ms. Gayle disclaims any beneficial ownership in those shares.
3)Includes 25,000 shares held by International Advisors, LLC. The Company has been advised that Steven N. Bronson has voting and dispositive power over the shares held by these two entities.
4)Includes 1,002,852 shares held by the G. Tyler Runnels and Jasmine Niklas Runnels TTEES of The Runnels Family Trust DTD 1-11-2000 of which Mr. Runnels is a trustee; 219,300 shares held by T.R. Winston; 25,140 shares held by High Tide LLC; 24,368 shares held by TRW Capital Growth Fund, Ltd.; and 14,286 shares held by Pangaea Partners. The Company has been advised that Mr. Runnels has voting and dispositive power with respect to all of these shares.
5)Includes the following: 138,776 held by IRA R/O II; 126,685 shares held by Roth IRA; 49,328 shares held by the Brian Emerson IRA; 329,569 shares held by Emerson Partners; 8,286 shares held by the Alleghany Meadows IRA; and 8,286 shares held by the Jill Meadows IRA. The Company has been advised that Mr. Emerson has voting and dispositive power with respect to all of these shares.
6)Consists of 986,369 shares held by the Bryan Ezralow 1994 Trust u/t/d 12/22/1994; and 177,041 shares held by EZ MM&B Holdings, LLC. The Company has been advised that Mr. Ezralow has voting and dispositive power with respect to these shares.

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

On or around October 24, 2016 our Chief Executive Officer provided Coda Octopus Colmek with a working capital loan of $1,000,000. The loan accrues interest of 4.5% per annum. This loan is due to be repaid on November 30, 2018.

AUDIT COMMITTEE REPORT

The Audit Committee assists the Board in its oversight of the integrity of the Company’s financial statements and compliance with legal and regulatory requirements. Management has responsibility for preparing the financial statements and for the financial reporting process. In addition, management has the responsibility to assess the effectiveness of the Company’s internal control over financial reporting. Frazier & Deeter LLC, the Company’s independent registered public accounting firm, is responsible for expressing an opinion on the conformity of the Company’s audited financial statements to accounting principles generally accepted in the United States of America and on whether the financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of the Company.

In this context, the Audit Committee has:

(1)reviewed and discussed with management and Frazier & Deeter LLC the audited financial statements and management’s evaluation of the Company’s internal control over financial reporting.
(2)discussed with Frazier & Deeter LLC the matters required to be discussed by Public Company Accounting Oversight Board Auditing Standard No. 1301, “Communications with Audit Committees.”
(3)received the written disclosures and the letter from Frazier & Deeter LLC required by applicable requirements of the Public Company Accounting Oversight Board regarding Frazier & Deeter LLC’s communications with the Audit Committee concerning independence, and discussed with Frazier & Deeter LLC that firm’s independence.

Based on the review and discussion referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2017, for filing with the Securities and Exchange Commission.

Michael Hamilton (Chairman)

Chuck Rogers

Nina Hoque

Mary Losty

10

PROPOSAL 2. APPROVAL OF THE CODA OCTOPUS GROUP, INC. 2017 STOCK INCENTIVE PLAN

On December 6, 2017, the Board of Directors adopted the Coda Octopus Group, Inc. 164 West 25th Street, 6th Floor, New York NY10001.     

(2)2017 Stock Incentive Plan (the “Plan”), subject to the approval of our stockholders at the Annual Meeting. The following summary of the principal features of the Plan is qualified in its entirety by reference to the full text of the Plan which is attached to this proxy statement asAnnex A.

Summary of the Plan

Purpose of the Plan. The purpose of the Plan is to advance the interests of the Company and its stockholders by enabling the Company and its subsidiaries to attract and retain qualified individuals through opportunities for equity participation in the Company, and to reward those individuals who contribute to the Company’s achievement of its economic objectives.

Shares Available. The number of shares indicated includes (i) shares issuable upon the exercise of outstanding stock options or warrants held by each individual or group to the extent such options and warrants are exercisable within sixty days of February 15, 2008 and (ii) shares of restricted stock, including restricted stock awards issuable within 60 days of February 15, 2008.     

(3)   Includes the following: (i) 400,000 shares issuable upon exercise of options (ii) 19,523,251 shares and 2,746,418 shares issuable upon exercise of warrants held by Fairwater Technology Group Ltd., of which Mr. Reid may be deemed to be a control person, and (iii) 280,720 shares and 50,000 shares issuable upon exercise of warrants held by Softworks Business Systems Solutions Limited, of which Mr. Reid may be deemed to be a control person; includes 511,266 shares held by Mr. Jason Reid, and (iv) includes 172,540 held by Mr. Reid’s wife and (v) includes 23,364 shares earned during the quarter ended October 31, 2007 that have not been issued to date.     
(4)   Includes 275,000 shares issuable upon exercise of options and 60,000 shares issuable upon the exercise of two five year warrants and 7,009 shares earned during the quarter ended October 31, 2007 that have not been issued to date.     
(5)   Includes 250,000 shares issuable upon exercise of options and 4,673 shares earned during the quarter ended October 31, 2007 that have not been issued to date.      
(6)   Includes 200,000 shares issuable upon exercise of options and 50,000 shares held by Softworks Limited of which Mr. Cunningham is a director and 11,682 shares earned during the quarter ended October 31, 2007 that have not been issued to date. 
(7)   Includes 150,000 shares issuable upon exercise of options and 11,682 shares earned during the quarter ended October 31, 2007 that have not been issued to date. 
(8)   Includes 150,000 shares issuable upon exercise of options and 11,682 shares earned during the quarter ended October 31, 2007 that have not been issued to date.     
(9)   Includes 150,000 shares issuable upon exercise of options and 11,682 shares earned during the quarter ended October 31, 2007 that have not been issued to date. 
(10)   Consist of 175,000 shares issuable upon exercise of options, 1,226 shares issued in quarter ended July 31, 2007 and 11,682 shares earned during the quarter ended October 31, 2007 that have not been issued to date. Does not include 350,000 shares issuable upon options, 175,000 of which will vest in March 2008, and the balance of which will vest in March 2009.  
(11)   Includes 746,572 shares issuable upon exercise of warrants. Does not include 8,453,428 additional shares issuable upon exercise of warrants that it is not permitted to exercise under the terms of the warrants. The warrants contain a provision that limits exercise of the warrants to the extent that its ownership percentage would exceed 9.9% of our issued and outstanding common stock of the Company. Adam Benowitz, portfolio manager, has investment and dispositive power of the shares held by this entity.
(12) Includes 100,000 shares issuable upon exercise of options and 11,682 shares earned during the quarter ended October 31, 2007 that have not been issued to date.
ITEM 10. EXECUTIVE COMPENSATION

The Summary Compensation Table shows certain compensation information for services rendered for the fiscal years ended October 31, 2007 and 2006 by our executive officers. The following information includes the dollar value of base salaries, bonus awards, stock options grants and certain other compensation, if any, whether paid or deferred. Conversion rates were used for 2007 and 2006 of $1.9840 and $1.8097 to GBP 1 Pound, respectively.

Name and Principal Position
  
Year
  
Salary
  
Bonus
  
Restricted Stock
Awards
   
Option
Awards
   
All Other
Compensation
  
Total
 
      
($)
  
($)
  
($)
   
($) (2)
   
($) (3)
  
($)
 
                         
Jason Reid
President & Chief Executive Officer
  
2007
2006
  
350,000
250,000
  
-0-
-0-
  
100,000
100,000
(5)
(6)
  
-0-
-0-
   
50,385
12,667
  
400,385
362,667
 
Blair Cunningham (1)
Chief Technology Officer
  
2007
2006
  
175,000
144,072
  
-0-
-0-
  
50,000
43,750
(7)
(8)
  
-0-
-0-
   
18,866
20,249
  
243,866
208,071
 
Anthony Davis (1)
President US Operations
  
2007
2006
  
175,000
163,796
  
-0-
-0-
  
50,000
43,750
(7)
(8)
  
-0-
-0-
   
11,962
10,858
  
236,962
218,404
 
Jody Frank
Chief Financial Officer
  
2007
2006
  
104,808
-0-
(4) 
-0-
-0-
  
12,908
-0-
(9)  
281,243
-0-
(10)  
1,750
-0-
  
400,709
-0-
 

(1) A portion of these amounts were paid in UK Pounds (the conversion rate used in this table for these amounts is stated above).
(2) Amount represents the aggregate grant date fair value computed in accordance with Statement of Financial Accounting Standards No. 123R, “ Share-Based Payment” (“SFAS 123R”). Information regarding the assumptions made in the valuation reported and material terms of each grant are incorporated herein by reference from “Note 4 Capital Stock” to our Consolidated Financial Statements for the Year Ended October 31, 2006.
(3) All other compensation consisted of car allowances, re-location expenses, disability payments, health insurance, pension benefits and/or pay for vacation not taken.
(4) Jody Frank is getting paid at the annual rate of  $350,000. However, he started his employment with the Company in July 2007, hence the values shown are pro-rated for this period.
(5) Comprising 80,317 shares valued at $100,000.
(6) Comprising 140,000 shares valued at $100,000.
(7) Comprising 40,159 shares valued at $50,000.
(8) Comprising 50,000 shares values at $43,750.
(9) Comprising 12,908 shares valued at $14,400.
(10) Comprising 237,500 options issued at $1.30, and vesting 34% immediately, 33% in 2008 and 33% in 2009.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2007*
Option Awards
Name
(a)
 
Number of
Securities Underlying
Unexercised Options
(#)
Exercisable
(b)
 
Number of
Securities Underlying
Unexercised Options
(#)
Unexercisable
(c)
  
Option
Exercise
Price
($)
(e)
 
Option
Expiration Date
(f)
 
Jason Reid
President and Chief Executive Officer    
  400,000     $1.00  May 2010 
Blair Cunningham
Chief Technology Officer    
  200,000     $1.00  May 2010 
Anthony Davis
President US Operations    
  150,000     $1.00  May 2010 
Geoff Turner
President European Operations    
  150,000     $1.00  November 2010 
Frank Moore
Senior  VP  Government  Relations
  100,500  49,500 ** $1.00  May 2011 
Angus Lugsdin
Senior VP Market Development
  100,000     $1.00  May 2010 
* In accordance with the rules promulgated by the Securities and Exchange Commission, certain columns relating to information that is not applicable have been omitted from this table.
** Options vest May 1, 2008.


DIRECTOR COMPENSATION*
(During Last Completed Fiscal Year)
              
Name
(a)
 
Fees Earned or Paid
in Cash
($)
(b)
   
Stock Awards ($)
(c)
   
Option Awards ($)
(d) (4)
 
Total
($)
(j)
 
Paul Nussbaum $30,000  (2) $30,000  (5) $109,573(4a)$169,573 
Rodney Peacock $20,000  (3) $20,000  (6) $73,049(4b)  $113,049 
* In accordance with the rules promulgated by the Securities and Exchange Commission, certain columns relating to information that is not applicable have been omitted from this table.

(2)Consists of an annual retainer in the amount of $45,000 and $3,750 per board meeting attended. Half of these amounts is payable in the Company’s Stock.
(3)Consists of an annual retainer in the amount of $25,000 and $3,750 per board meeting attended. Half of these amounts is payable in the Company’s Stock.
(4a)Comprising 75,000 options valued based on date of issue using Black Scholes method and booked into our accounts as an expense.
(4b)Comprising 50,000 options valued based on date of issue using Black Scholes method and booked into our accounts as an expense.
(5)Consist of 24,095 shares.
(6)Consist of 15,532 shares.

Compensation of Directors

Pursuant to Agreements dated January 26, 2005 with our non-employee directors, Paul Nussbaum and Rodney Peacock, each receives a fee of $2,500 per board and committee meeting attended (which amount was increased to $3,750 per meeting starting November 1, 2006) and are reimbursed for expenses incurred in connection with attending board and committee meetings. Our board chairman receives an annual retainer of $40,000 and Mr. Peacock receives an annual retainer of $20,000. Messrs. Nussbaum and Peacock received 100,000 shares and 150,000 shares, respectively, on January 26, 2005. On May 1, 2005, each director also received five-year options to purchase 200,000 shares of our common stock exercisable at $1.00 per share, and vesting 34% immediately, and 33% oninitially reserved for issuance under the first and second anniversariesPlan is 913,612. This number is subject to adjustment in the event of any reorganization, merger, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock split, combination of shares or any other change in the corporate structure or shares of the award. Messrs. Nussbaum and Peacock will receive options to purchase 75,000 shares and 50,000 shares, respectively, atCompany.

Eligibility. Awards under the first board meeting in each fiscal year, at an exercise price to be established by the Board. Each director is also entitled while serving as a director and for a period of three years thereafter, to participate in directors and officers liability insurance and to indemnification of all costs and expenses, including cost of legal counsel, selected and retained by the director, in connection with any action, suit or proceeding to which the directorPlan may be a party by reasonmade to all employees, officers and directors of the director, acting in such capacity. All options, granted but not vested to Messrs. NussbaumCompany or any of its subsidiaries, and Peacock unless exercised terminate at such time as the individual is no longer serving asany person who has a director.


The Compensation Committee awarded the following increases on November 1, 2006 (i) fees for each board and committee meeting to $3,750. Mr. Nussbaum was also awarded an increase on annual retainer of $5,000 making his current annual retainer $45,000 and similarly Mr. Peacock was awarded an increase on his annual retainer of $5,000 making his current annual retainer of $25,000. Both Mr. Nussbaum and Mr. Peacock’s payments made under the retainers are half cash and half common stock.

For the fiscal year commencing November 1, 2007, the Compensation Committee reviewed the fee arrangements for directors. The Board Meeting fees were reduced from $3,750 to $1,875. Half of this amount is payable in the Company’s stock.

Employment Agreements

Jason Reid

On April 1, 2005, the Company entered into an Employment Agreement with Jason Reid. The Agreement commenced on April 1, 2005 and has an indefinite term until terminated pursuant to said Agreement. Mr. Reid agreed to serve as President and Chief Executive Officer. Pursuant to said Agreement, we are paying Mr. Reid a base annual salary of $250,000 from April 1, 2005 through October 31, 2006. Thereafter, Mr. Reid shall be entitled to receive an annual cash and stock incentive bonus for each fiscal year based upon a level of accomplishment of management and performance objectives as established by the Compensation Committee subject to a minimum bonus of $50,000 for the preceding year on the basis that the Employment Agreement is renewed after each one year term. At its meeting held in October 2006 and in accordance with its remit the Compensation Committee approved an increase in the base annual salary to $350,000 effective November 1, 2006. The bonus stipulated for 2005-06 was waived.
At the end of each quarter during the contract, Mr. Reid shall be entitled to receive a restricted stock grant of $25,000 paid in common stock. The value shall be calculated using the average closing price for each trading day in that quarter unless in the opinion of the Compensation Committee the market for the Company’s common stock lacks sufficient liquidity to establish a market price in which event the value for the common stock for that quarter will be $1.00 per share. Mr. Reid is entitled to 40 business days vacation for each calendar year, reimbursement for business expenses, entitled to directors and officers liability insurance during his employmentrelationship with the Company or any of its subsidiaries, except for incentive stock options which may be granted only to our employees.

Administration.Generally, the Plan will be administered by either the entire Board or a committee of the Board, which shall consist of at least two members of the Board, each of whom must qualify as a “non-employee director” under Rule 16b-3 under the Exchange Act.

Awards to be Granted to Certain Individuals and for a periodGroups. The Plan administrator, in its discretion, selects the persons to whom awards may be granted, determines the type of three years after termination, is entitledawards, determines the times at which awards will be made, determines the number of shares subject to receive up to $15,000 for relocation expenses to New Yorkeach such award (or the dollar value of certain performance awards), and up to $850 per month in lieu of specific reimbursement expenses for use of a personal vehicledetermines the other terms and indemnificationconditions relating to the maximum extent permittedawards. For this reason, it is not possible to determine the benefits or amounts that will be received by law against all costsany particular person in the future.

Discretionary Option Awards. The Plan administrator may grant either incentive stock options or non-statutory stock options. A stock option entitles the recipient to purchase a specified number of shares of our common stock at a fixed price subject to terms and expenses incurred by him, including cost of his legal counsel. Mr. Reid is also entitled to participate in all Company life, health and disability insurance, pension, deferred compensation and incentive plans, options and awards, performance bonuses and other benefits extendedconditions set by the Company as a matterPlan administrator, including conditions for exercise that must be satisfied, which typically will be based on continued provision of policyservices. The exercise price of incentive stock options granted under the Plan cannot be less than 100% of the fair market value of our common stock on the date the option is granted (or 110% in the case of incentive stock options granted to its executive employees. He shall also be entitled, atpersons owning more than 10% of the Company’s cost,stock). Fair market value of our common stock is generally equal to the benefitclosing price of our common stock on the principal securities exchange on which our common stock is traded on the date the option is granted (or if there was no closing price on that date, on the last preceding date on which a disability insurance policyclosing price was reported).

The Plan permits payment of the exercise price of stock options to be made by cash or, plan during his employment.


For the current fiscal year, the Compensation Committee decided that whilst Mr. Reid’s remuneration package would remain the same, the breakdown would be changed as follows: Basic Pay (cash $375,000 instead of $350,000) and stock $75,000 instead of $100,000. Mr. Reid’s employment contract is deemed amended in these respects.

Anthony Davis

On July 1, 2005, the Company entered into an Employment Agreement with Anthony Davis. The Agreement commenced on July 1, 2005 and has an indefinite term until terminated pursuant to said Agreement. Mr. Davis agreed to serve as Senior Vice-President, Commercial Division (now President of US Operations). Pursuant to said Agreement, we are paying Mr. Davis a base annual salary of approximately $150,000, which is subject to increase at the discretion of the Compensation Committee. In addition, Mr. Davis is entitled to receive an annual cash andcommittee administering the Plan, shares of our common stock incentive bonus for each fiscal year based upon a level of accomplishment of management and performance objectives as establishedpreviously acquired by the Compensation Committee. At its meeting held in October 2006 and in accordance with its remitoptionee. All options granted under the Compensation Committee approved an increase in the base annual salary to $175,000 effective November 1, 2006.

Mr. Davis is entitled to receive 50,000 shares of the Company’s common stock for services performed through October 31, 2006 and thereafter $50,000 of common stock annually, paid quarterly. Mr. Davis is entitled to 35 business days vacation for each calendar year, reimbursed for business expenses, entitled to directors and officers liability insurance during his employment with the Company and for a period of threePlan expire no later than ten years after termination, shall receive a mutually agreed upon amount of relocation expenses to New York and either provided with a vehicle or up to $5,000 per annum in lieu of specific reimbursement expenses for use of a personal vehicle and indemnification to the maximum extent permitted by law against all costs and expenses incurred by him, including cost of his legal counsel. Mr. Davis is also entitled to participate in all Company life, health and disability insurance, pension, deferred compensation and incentive plans, options and awards, performance bonuses and other benefits extended by the Company as a matter of policy to its executive employees. He shall also be entitled, at the Company’s cost, to the benefit of a disability insurance policy or plan during his employment.


Blair Cunningham

On July 1, 2005, the Company entered into an Employment Agreement with Blair Cunningham. The Agreement commenced on July 1, 2005 and has an indefinite term until terminated pursuant to said Agreement. Mr. Cunningham agreed to serve as Senior Vice-President, Products Division (now Chief Technology Officer). Pursuant to said Agreement, we are paying Mr. Cunningham a base annual salary of approximately $150,000, which is subject to increase at the discretion of the Compensation Committee. Mr. Cunningham shall be entitled to receive an annual cash and stock incentive bonus for each fiscal year based upon a level of accomplishment of management and performance objectives as established by the Compensation Committee. At its meeting held in October 2006 and in accordance with its remit the Compensation Committee approved an increase in the base annual salary to $175,000, effective November 1, 2006.

Mr. Cunningham is entitled to receive 50,000 shares of the Company’s common stock for services performed through October 31, 2006 and thereafter $50,000 of common stock annually, paid quarterly. Mr. Cunningham is entitled to 40 business days vacation for each calendar year, reimbursed for business expenses, entitled to directors and officers liability insurance during his employment with the Company and for a period of three years after termination, shall receive a mutually agreed upon amount of relocation expenses to New York and either provided with a vehicle or up to $5,000 per annum in lieu of specific reimbursement expenses for use of a personal vehicle and indemnification to the maximum extent permitted by law against all costs and expenses incurred by him, including cost of his legal counsel. Mr. Cunningham is also entitled to participate in all Company life, health and disability insurance, pension, deferred compensation and incentive plans, options and awards, performance bonuses and other benefits extended by the Company as a matter of policy to its executive employees. He shall also be entitled, at the Company’s cost, to the benefit of a disability insurance policy or plan during his employment.
Frank B. Moore

On May 1, 2006, the Company entered into an Employment Agreement with Frank B. Moore. The Agreement commenced on May 1, 2006 and has an indefinite term until terminated pursuant to said Agreement. Mr. Moore agreed to serve as Senor Vice-President, Government Relations. Pursuant to said Agreement, we are paying Mr. Moore a base annual salary of approximately $150,000, which is subject to increase at the discretion of the Compensation Committee. Mr. Moore shall be entitled to receive an annual cash and stock incentive bonus for each fiscal year based upon a level of accomplishment of management and performance objectives as established by the Compensation Committee. At its meeting held in October 2006 and in accordance with its remit the Compensation Committee approved an increase in the base annual salary to $175,000 effective November 1, 2006.

Mr. Moore is entitled to receive 25,000 shares of the Company’s common stock for services performed through October 31, 2006 and thereafter $50,000 of common stock annually, paid quarterly. Mr. Moore is entitled to 30 business days vacation for each calendar year, reimbursed for business expenses, entitled to directors and officers liability insurance during his employment with the Company and for a period of three years after termination, shall be provided with either a vehicle or paid up to $5,000 per annum in lieu of specific reimbursement expenses for use of a personal vehicle and indemnification to the maximum extent permitted by law against all costs and expenses incurred by him, including cost of his legal counsel. Mr. Moore is also entitled to participate in all Company life, health and disability insurance, pension, deferred compensation and incentive plans, options and awards, performance bonuses and other benefits extended by the Company as a matter of policy to its executive employees. He shall also be entitled, at the Company’s cost, to the benefit of a disability insurance policy or plan during his employment.
Angus Lugsdin

On July 1 2005, the Company entered into an Employment Agreement with Mr. Angus Lugsdin. The Agreement commenced on July 1, 2005 and has an indefinite term until terminated pursuant to said Agreement. Mr. Lugsdin, atfrom the date of grant.

Restricted Stock Awards. Restricted stock awards may be issued under the employment agreedPlan either alone or in addition to serve as Vice President, Strategic Business Development. Since then Mr. Lugsdin has been promoted to Senior Vice President, Market Developmentother awards granted under the Plan. The Plan administrator determines the terms and conditions of direct stock awards, including the said employment agreement is deemed amended from November 1, 2007. Pursuant to said Agreement, we are paying Mr. Lugsdin a base annual salarynumber of approximately $175,000, which is subject to increase at the discretion of the Compensation Committee. Other terms relating to his compensation package are: entitlement to (i) receive $50,000 shares of the Company’s common stock issued quarterly following Board approval; (ii) a minimum of 30 business days vacation for each calendar year; (iii) Reimbursement against submission of proper receipts for business expenses; (iv) directors and officers liability insurance during his employment with the Company and for a period of three years after termination, and indemnification to the maximum extent permitted by law against all costs and expenses incurred by him, including cost of his legal counsel; (vi) participate in all Company life, health and disability insurance, pension, deferred compensation and incentive plans, options and awards, performance bonuses and other benefits extended by the Company as a matter of policy to its executive employees; (vi) at the Company’s cost, to the benefit of a disability insurance policy or plan during his employment; (vii) to receive annual cash and stock incentive bonus for each fiscal year based upon a level of accomplishment of management and performance objectives as established by the Compensation Committee. 

Geoff Turner
On November 1, 2006, the Company entered into a one year Consulting Agreement with Taktos Ltd., a United Kingdom corporation owned by Geoff Turner. The Agreement requires Taktos Ltd. to provide the services of Geoff Turner during the term of the Agreement to provide the following services:
(a)assist the Company’s Management with the analysis and effective and optimal implementation of its business plan;
(b)oversee the Company’s European operations and performance of the Group;
(c)explore acquisitions, strategic alliances, partnering opportunities and other cooperative ventures within and without its industry focus;
(d)evaluate possible acquisitions and strategic strategies and partnering candidates, including the evaluation of targets and the structuring of related transactions; and
(e)advise and consult with executive officers with respect to any of the above described matters.
The Company is paying approximately $178,000 per annum to the consultant for providing the services of Mr. Turner. Consultant is also entitled to reimbursement of travel and other expenses. Pursuant to a separate option agreement with Mr. Turner who serves as an executive officer, the Company has granted him five year options to purchase 150,000 shares of common stock granted, and the conditions for vesting that must be satisfied, if any, which typically will be based on continued provision of services but may include a performance-based component. Unless otherwise provided in the award agreement, the holder of a restricted stock award will have the rights of a stockholder from the date of grant of the award, including the right to vote the shares of common stock and the right to receive distributions on the shares. Except as otherwise provided in the award agreement, any shares or other property (other than cash) distributed with 34% having vested on November 1, 2005respect to the award will be subject to the same restrictions as the award.

11

Performance Stock Awards. The Plan Administrator may grant performance stock awards which may be subject to the future achievement of performance criteria or be free of any performance or vesting conditions.

Nontransferability of Awards. In general, except pursuant to testamentary will or the laws of descent and with 33%distribution or as otherwise expressly permitted under the Plan, no right or interest of any Plan participant in an incentive award prior to the exercise (in the case of options) or vesting on each(in the case of November 1, 2006 and 2007. He is also entitledrestricted stock awards) of such incentive award will be assignable or transferable, or subjected to directors and officers liability insuranceany lien, during his tenure as an executive officer withthe lifetime of the Plan participant, either voluntarily or involuntarily, directly or indirectly, by operation of law or otherwise.

Change in Control. If a Change in Control of the Company and for a period of three years after termination. The Compensation Committee approved in October 2006 the renewal of this contract and approved an increase in the compensation package paid for the services of Mr. Turner and with effect from November 1, 2006 we are paying Taktos Limited $178,000 for his services.


Jody Frank

Effective July 16, 2007, the Company entered into an Employment Agreement with Jody Frank to act as our Chief Financial Officer. The Agreement has an indefinite term until terminated pursuant to the terms of the Agreement. During the first two years of the Agreement, either party may only terminate the Employment Agreement for cause. Mr. Frank agreed to serve as Chief Financial Officer. Pursuant to said Agreement, we will be paying Mr. Frank a base annual salary of approximately $350,000, which is subject to increase at the discretion of the Compensation Committee. Mr. Frank will also be entitled to receive an annual cash and stock incentive bonus for each fiscal year based upon a level of accomplishment of management and performance objectives as established by the Compensation Committee.

During the term of the Employment Agreement, Mr. Frank is also entitled to receive annually $50,000 shares of the Company’s common stock for services rendered, distributed quarterly. Mr. Frank is entitled to 30 days vacation for each calendar year, reimbursement for business expenses, and directors and officers liability insurance during his employment with the Company and for a period of three years after termination. The Company will also reimburse Mr. Frank for up to $5,000 per annum in lieu of specific reimbursement expenses for use of a personal vehicle. In addition, Mr. Frank is also entitled to participate in all Company life, health and disability insurance, pension, deferred compensation and incentive plans, options and awards, performance bonuses and other benefits extended by the Company as a matter of policy to its executive employees. He is also entitled, at the Company’s cost, to the benefit of a disability insurance policy or plan during his employment.

In respect of all the foregoing officers named, the Compensation Committee decided not to grant any increases in the level of compensation for the fiscal year 2007-8. The Compensation Committee also decided not to grant any more stock to these employees on a quarterly basisoccurs (as is provided in their contracts) but to grant options instead. Each of their employment contracts is deemed amended in this respect.

Termination Provisions in Employment Agreements

With the exception of the employment agreement between the Company and Mr. Jody Frank, under which neither party may terminate the agreement without cause for the first two years, the Company may terminate any Executive’s employment at any time upon 90 days prior written notice, if such termination is for cause as defined in the Agreement. Executive may terminate his or her Employment Agreement without good reason upon givingPlan), if approved by the Company 90 days written notice orPlan administrator, all awards will be subject to accelerated vesting, as follows: (a) all Options that have been outstanding for at least six months will become immediately exercisable in full and will remain exercisable in accordance with their terms; (b) all restricted stock awards that have been outstanding for at least six months will become immediately fully vested and non-forfeitable; and (c) any conditions to the Company’s sole discretion, it may substitute 90 days salary in lieuissuance of notice. Executiveshares of Common Stock pursuant to performance stock awards that have been outstanding for at least six months will lapse.

The Plan administrator may also terminate hisdetermine that: (a) some or her Employment Agreement upon written noticeall Plan participants holding outstanding Options will receive, with respect to the Company for good reason as defined in the Agreement. Hissome or her Employment Agreement shall also terminate upon his or her death or, upon 30 days prior written notice of his or her disability, which lasts for a period of at least 90 days. In the event Executive’s employment is terminated for cause or without good reason, Executive shall be entitled to the following (“Minimum Termination Pay and Benefits”):

·the unpaid portion of his or her base salary;
·reimbursement for out-of-pocket expenses;
·continued insurance benefits to the extent required by law;
·payment of any vested but unpaid rights as required by any bonus or incentive pay or stock plan or any other employee benefit plan; and
·any unpaid bonus or incentive compensation that was approved (except in the case of termination for cause).
In the event his or her termination is by the Company without cause or by Executive for good reason, he or she shall be entitled to the Minimum Termination Pay and Benefits in addition to the following:

·a lump sum payment equal to one times the sum of (x) the Executive’s then current Base Salary and (y) the greater of (A) the average of the Executive’s bonuses (taking into account a payment of no bonus or a payment of a bonus of $0) with respect to the preceding three fiscal years (or the period of the Executive’s employment if shorter), (B) the Executive’s bonus with respect to the preceding fiscal year and (C) in the event that such termination of employment occurs before the first anniversary of the Commencement Date, the Executive’s annualized projected bonus for such year (the “Severance Payment”). The Severance Payment shall be paid to the Executive within 60 days following the Date of Termination;
·continued payment by Coda Octopus for life, health and disability insurance coverage and salary and other benefits for the Executive and the Executive’s spouse and dependents for one year following the Date of Termination to the same extent that Coda Octopus paid for such coverage immediately prior to the termination of the Executive’s employment and subject to the eligibility requirements and other terms and conditions of such insurance coverage, provided that if any such insurance coverage shall become unavailable during the one year period, Coda Octopus thereafter shall be obliged only to pay to the Executive an amount which, after reduction for income and employment taxes, is equal to the employer premiums for such insurance for the remainder of such severance period; and
·vesting as of the Date of Termination in any unvested portion of any stock option, restricted stock and any other long term incentive award previously issued to the Executive by Coda Octopus. Each such stock option must be exercised by the Executive within 180 days after the Date of Termination or the date of the remaining option term, if earlier.

Termination Following Change in Control

If during the employment period and within 12 months following a change in control as defined in the Employment Agreement, Coda Octopus (or its successor) terminates the Executive’s employment without cause or the Executive terminates his or her employment for Good Reason, or the Executive, by notice given during the 90 day period commencing on the three-month anniversaryall of the dateshares of the Change in Control (the “Notice Period”), terminates his or her employment for any reason, which termination shall be effective on the last day of the Notice Period, the Executive shall be entitled to receive the same termination pay and benefits as if he or she were terminated by the Company without cause or by the Executive for good reason, plus a Tax Gross-up Payment. In the event that any termination payment or any insurance benefits, accelerated vesting, pro-rated bonus or other benefit payable to the Executive (under the Employment Agreement or otherwise), constitute “parachute payments” within the meaning of Section 280G (as it may be amended or replaced) of the Internal Revenue Code of 1986, as amended (the “Code”) and areCommon Stock subject to the excise tax imposed by Section 4999 (as it may be amended or replaced) of the Codesuch options (“the Excise Tax”Option Shares”), then Coda Octopus shall pay to the Executiveeither (i) cash in an additional amount (the “Gross-Up Amount”) such that the net benefits retained by the Executive after the deduction of the Excise Tax (including interest and penalties) and any federal, or local income and employment taxes (including interest and penalties) upon the Gross-Up Amount shall be equal to the benefits that would have been delivered hereunder had the Excise Tax not been applicable and the Gross-Up Amount not been paid.
Termination Provisions of Consulting Agreement Geoff Turner
Consulting Agreement with Taktos Limited under which the services of Mr. Turner are provided stipulates that the agreement continues unless terminated by either party giving 3 months notice in writing.
Stock Option Plans

2004 Plan

In October 2004, the Board approved and on June 27, 2006, the stockholders ratified the Company’s 2004 Employees, Directors, Officers and Consultants Stock Option and Stock Award Plan (the “2004 Plan”), which provides for, among other things, the award of up to 2,500,000 shares of Common Stock.

Pursuant to the 2004 Plan, officers, employees, directors and consultantsexcess of the Company and certainfair market value of its subsidiaries are eligible to receive awardssuch Option Shares over the exercise price per share of stock options and restricted stock. Options granted under the 2004 Plan may be ISOs or non-qualified stock options (“NQSOs”). Restricted stock may be granted in addition to or in lieu of any other award made under the 2004 Plan.

The maximumsuch Option Shares, (ii) a number of shares of Common Stock reservedhaving an aggregate fair market value equal to the excess of the fair market value of the Option Shares over the exercise price per share of such Option Shares; or (iii) any combination of cash or shares of Common Stock; and (b) some or all Participants holding performance stock awards will receive cash in an amount equal the Fair Market Value of such shares immediately prior to the effective date of such Change in Control.

Adjustments upon Changes in Capitalization. In the event of any reorganization, merger, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock split, combination of shares or any other change in the corporate structure or shares of the Company, the Plan administrator (or, if the Company is not the surviving corporation in any such transaction, the board of directors of the surviving corporation) will make appropriate adjustment as to the number and kind of securities or other property (including cash) available for issuance or payment under the grantPlan and, in order to prevent dilution or enlargement of the rights of Plan participants, the number and kind of securities or other property (including cash) subject to outstanding Incentive Awards and the exercise price of outstanding Options.

Termination of Employment.

Termination Due to Death or Disability. In the event a Plan participant’s employment or other service is terminated by reason of death or disability: (a) all outstanding Options will, to the extent exercisable as of such termination, remain exercisable for a period of six (6) months after such termination (but in no event after the expiration date of any such Option); and (b) all restricted stock awards then held by the Plan participant that have not vested as of such termination will be terminated and forfeited; and (c) all outstanding performance stock awards then held by the Plan participant that have not vested as of such termination will be terminated and forfeited.

Termination Due to Retirement. If a Plan participant’s employment or other service is terminated by reason of retirement: (a) all outstanding Options then held by the Plan participant will, to the extent exercisable as of such termination, remain exercisable in full for a period of three months after such termination. Options not exercisable as of such retirement will be forfeited and terminate; and (b) all restricted stock awards then held by the Plan participant that have not vested as of such termination will be terminated and forfeited; and (c) all outstanding performance stock awards then held by the Plan participant that have not vested as of such termination will be terminated and forfeited.

Termination for Reasons Other than Death, Disability or Retirement. If a Plan participant’s employment or other service is terminated for any reason other than death, disability or retirement: (a) all outstanding Options will, to the extent exercisable as of such termination, remain exercisable in full for a period of three months after such termination (but in no event after the expiration date of any such Option). Options not exercisable as of such termination will be forfeited and terminate; and (b) all restricted stock awards that have not vested as of such termination will be terminated and forfeited; and (c) all outstanding performance stock awards that have not vested as of such termination will be terminated and forfeited.

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Amendment and Termination. The Board may suspend or terminate the Plan or any portion thereof at any time, and may amend the Plan from time to time in such respects as the Board may deem advisable in order that Incentive Awards under the Plan will conform to any change in applicable laws or regulations or in any other respect the Board may deem to be in the best interests of the Company; provided, however, that no such amendments to the Plan will be effective without approval of the Company’s stockholders if stockholder approval of the amendment is then required pursuant to Section 422 of the Internal Revenue Code (the “Code”) or the rules of any stock exchange or the NASDAQ Global Select, Global or Capital Market or similar regulatory body. Subject to limited exceptions, no termination, suspension or amendment of the Plan may adversely affect any outstanding Incentive Award without the consent of the affected Plan participant.

The Plan will terminate at midnight on December 6, 2027 and may be terminated prior to such time by Board action. No Incentive Award will be granted after termination of the Plan. Incentive Awards outstanding upon termination of the Plan may continue to be exercised, or become free of restrictions, according to their terms.

Federal Income Tax Consequences.

The following discussion summarizes certain federal income tax considerations of awards under the 2004Plan. However, it does not purport to be complete and does not describe the state, local or foreign tax considerations or the consequences for any particular individual. Each individual is advised to consult with his or her own tax advisor.

We intend, and this summary assumes, that all awards granted under the Plan either will be exempt from or will comply with the requirements of Section 422 of the Code, or Section 409A, regarding nonqualified deferred compensation such that its income inclusion and tax penalty provisions will not apply to the participants. The Plan and any awards made under the Plan will be administered consistently with this intent. In any case, a participant will be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on a participant in connection with awards (including any taxes and penalties under Section 409A) and the Company will have no obligation to indemnify or otherwise hold a participant harmless from any such taxes or penalties.

Stock Options. A participant does not realize ordinary income on the grant of a stock option. Upon exercise of a non-qualified stock option, the participant will realize ordinary income equal to the excess of the fair market value of the shares of common stock over the option exercise price. The cost basis of the shares acquired for capital gain treatment is 2,500,000. Such share reserves aretheir fair market value at the time of exercise. Upon exercise of an incentive stock option, 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 further adjustmentan 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 incentive stock option 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 incentive stock option; 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 participant disposes of the shares within the two-year or one-year periods referred to above, the participant 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 gain treatment on such a disposition, the tax basis of the shares will be their fair market value at the time of exercise.

Section 55 of the Code imposes an “alternative minimum tax” on an individual’s income to the extent the amount of the alternative minimum tax exceeds the individual’s regular tax for the year. For purposes of computing the alternative minimum tax, the excess of the fair market value (on the date of exercise) of the shares received upon the exercise of an incentive stock option over the exercise price paid is included in alternative minimum taxable income in the event of specified changesyear the option is exercised. If the shares are sold in the same year that the option is exercised, the regular tax treatment and the alternative tax treatment will be the same. If the shares are sold during a year subsequent to that in which the capital structureoption was exercised, the basis of the Company. The shares may be made available either fromstock acquired will equal its fair market value on the Company’s authorized but unissued capital stock or from capital stock reacquired bydate of exercise for purposes of computing alternative minimum taxable income in the Company.

The Compensation Committeeyear of the Boardsale. For example, assume that an individual pays an exercise price of Directors administers the 2004 Plan. The Compensation Committee may interpret the plan and may at any time adopt such rules and regulations for the plan as it deems advisable, including the delegation of certain of its authority. It has delegated authority$10 to the Company’s management for determining the type of awards, when and to which executives awards will be granted, the number of shares covered by each award and the terms, provisions and kind of consideration payable (if any), with respect to awards. In determining the persons to whom awards shall be granted and the number of shares covered by each award, the Company’s management takes into account the duties of the respective persons, their present and potential contributions to the success of the Company and such other factors as it deems relevant.

The Compensation Committee may provide for the payment of the option price in cash, by delivery of commonpurchase stock having a fair market value of $15 on the date of exercise. The amount included in alternative minimum taxable income is $5, and the stock has a basis of $10 for regular tax purposes and $15 for alternative minimum tax purposes. If the individual sells the stock in a subsequent year for $20, the gain recognized is $10 for regular tax purposes and $5 for alternative minimum tax purposes.

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Restricted Stock Awards. The participant will not realize ordinary income upon the grant of a restricted stock award (or a performance stock award if the shares of common stock are issued on grant), but will realize ordinary income when the shares subject to the award become vested in an amount equal to such optionthe excess of the fair market value of the shares on the vesting date over the purchase price, by deliveryif any, paid for the shares. The participant may, however, elect under Section 83(b) of options or warrants havingthe Code to include as ordinary income in the year the shares are granted an intrinsic valueamount equal to such optionthe excess of the fair market value of the shares on the date of issuance, over the purchase price, if any, paid for the shares. If the Section 83(b) election is made, the participant will not realize any additional taxable income when the shares become vested. The participant will not realize ordinary income on the grant of a restricted stock award, but will recognize ordinary income on the vesting and transfer date, which are the same date, equal to the fair market value of the shares on the vesting and transfer date. Upon disposition of shares of common stock acquired under a restricted stock award, performance award or restricted stock unit award, the participant will realize a capital gain or loss equal to the difference between the selling price and the sum of the amount paid for the shares plus any amount realized as ordinary income upon grant or vesting of the shares. Upon disposition of shares of common stock acquired under a restricted stock award or performance award, the participant will realize a capital gain or loss equal to the difference between the selling price and the sum of the amount paid for the shares plus any amount realized as ordinary income upon grant or vesting of the shares.

Company Tax Deduction. We generally will be entitled to a tax deduction in connection with an award under the Plan, subject to the provisions of Section 162(m) and Section 280G of the Code, in an amount equal to the ordinary income realized by a combination thereof orparticipant at the time the participant realizes such income (for example, on the exercise of a nonqualified stock option). Section 162(m) of the Code disallows a tax deduction to public companies for compensation paid in excess of $1 million to covered employees as defined under Section 162(m). Prior to its amendment by anythe Tax Cuts and Jobs Act (the TCJA), which was enacted December 22, 2017, there was an exception to this $1 million deduction limitation for performance-based compensation if certain requirements set forth in Section 162(m) and the applicable regulations were met. The TCJA generally amended Section 162(m) to eliminate this exception for performance-based compensation, effective for taxable years following December 31, 2017. The $1 million compensation limit was also expanded to apply to a public company’s chief financial officer and apply to certain individuals who were covered employees in years other method. Optionsthan the then-current taxable year. The Compensation Committee maintains a practice of considering the anticipated tax treatment to the Company in its review and establishment of compensation programs and awards. The Compensation Committee intends to continue to consider the deductibility of compensation as a factor in assessing whether a particular arrangement is appropriate, taking into account the goals of maintaining a competitive executive compensation system generally, motivating executives to achieve corporate performance objectives and increasing stockholder value.

Section 409A of the Code. Any awards granted under the 2004 Plan, will become exercisable at such timesthat are considered to be deferred compensation, must satisfy the requirements of Code Section 409A to avoid adverse tax consequences to participants, which include the current inclusion of deferred amounts into income, as well as interest and under such conditions as the Compensation Committee shall determine.


The Board of Directors may ata surtax on any time and from timeamount included in income. We intend to time suspend, amend, modify or terminate the 2004 Plan; provided, however, that, to the extent required by any other law, regulation or stock exchange rule, no such change shall be effective without the requisite approval of the Company’s stockholders. In addition, no such change may adversely affect an award previously granted, except with the written consent of the grantee.

The Company has issued all the options allowable under the 2004 Plan and all of said options are Non-qualified options as stockholder approval of the 2004 Plan was not obtained within one year of Board approval, as required under the Internal Revenue Code of 1986, as amended.

2006 Plan

On March 2, 2006, the Board approved and on June 27, 2006, the stockholders ratified the Company’s 2006 Employees, Directors, Officers and Consultants Stock Option and Stock Award Plan (the “2006 Plan”), which provides for, among other things, the award of up to 2,500,000 shares of Common Stock.

Pursuant to the 2006 Plan, officers, employees, directors and consultants of the Company and certain of its subsidiaries are eligible to receive awards of stock options and restricted stock. Options granted under the 2006 Plan may be ISOs or non-qualified stock options (“NQSOs”). Restricted stock may be granted in addition to or in lieu of any other award made under the 2006 Plan.

The maximum number of shares of Common Stock reserved for the grant ofstructure awards under the 2006 Plan is 2,500,000. Such share reservesto meet the requirements of Section 409A, or an applicable exemption, in order to avoid its adverse tax consequences. Incentive stock options are subject to further adjustment in the event of specified changes to the capital structure of the Company. The shares may be made available eithergenerally exempt from the Company’s authorized but unissued capitalrequirements of Section 409A. Generally, for nonqualified stock or from capital stock reacquired by the Company.

The Compensation Committee of the Board of Directors administers the 2006 Plan. The Compensation Committee may interpret the plan and may at any time adopt such rules and regulations for the plan as it deems advisable, including the delegation of certain of its authority. It has delegated authorityoptions to the Company’s management for determining the type of awards, when and to which executives awards will be granted, the number of shares covered by each award and the terms, provisions and kind of consideration payable (if any), with respect to awards. In determining the persons to whom awards shall be granted and the number of shares covered by each award, the Company’s management takes into account the duties of the respective persons, their present and potential contributions to the success of the Company and such other factors as it deems relevant.

An option may be granted on such terms and conditions as the Compensation Committee may approve, and generally may be exercised for a period of up to ten yearsexempt from the daterequirements of grant. Generally, ISOs willSection 409A, they must be granted with an exercise price at the minimumleast equal to the “Fair Market Value”fair market value of the underlying shares on the date of grant.grant, and must not include any feature for the deferral of compensation. Restricted stock and restricted stock unit awards granted under the Plan are intended to be structured to be exempt from the requirements of Section 409A.

Plan Benefits

Future awards to our employees and directors are discretionary. Therefore, the benefits that may be received by our employees and directors if our stockholders approve the Plan, and the benefits that would have been received by our employees and directors during the fiscal year ended October 31, 2017 if the Plan had been in effect, cannot be determined at this time. In addition, because the casevalue of ISOs,the common stock issuable under certain limitationsaspects of the Plan will applydepend upon the fair market value of our common stock at future dates, it is not possible to determine exactly the benefits that might be received by participants under the Plan.

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Required Vote

The affirmative vote of the holders of a majority of the outstanding shares of our common stock present in person or by proxy and entitled to vote at the Annual Meeting is required to approve the Plan. This proposal is considered a non-routine matter under applicable rules. A broker, bank or other nominee may not vote without instructions on this matter, so there may be broker non-votes in connection with this proposal. Broker non-votes will have no effect on this proposal. Abstentions will be the equivalent of a vote against this proposal.

Recommendation of the Board of Directors

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” APPROVAL OF THE 2017 CODA OCTOPUS GROUP, INC. STOCK INCENTIVE PLAN.

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PROPOSAL 3. RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee of the Board of Directors has selected Frazier & Deeter LLC (“Frazier & Deeter”) as our independent registered public accounting firm for 2018. Although stockholder ratification of the appointment of our independent registered public accounting firm is not required by our Bylaws or otherwise, we are submitting the selection of Frazier & Deeter to our stockholders for ratification to enable stockholders to participate in this important decision. If our stockholders do not ratify the Audit Committee’s selection, the Audit Committee may reconsider its selection. Even if the selection is ratified, the Audit Committee may select a different independent registered public accounting firm at any time during the year if it determines that selection of a different firm would be in the best interests of our company.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF FRAZIER & DEETER, LLC.

Fees Paid to Independent Registered Public Accounting Firm

Audit Fees. The aggregate fees billed by Frazier & Deeter, LLC, our principal accountants, for professional services rendered for the audit of the Company’s annual financial statements for the last two fiscal years and for the reviews of the financial statements included in the Company’s Quarterly reports on Form 10-Q during the last two fiscal years 2017 and 2016 were $151,506 and $161,046, respectively.

No other fees were billed by or paid to Frazier & Deeter, LLC. during fiscal 2016 or 2017.

Prior to the Company’s engagement of its independent auditor, such engagement is approved by the Company’s audit committee. The services provided under this engagement may include audit services, audit-related services, tax services and other services. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. Pursuant to the Company’s Audit Committee Charter, the independent auditors and management are required to report to the Company’s audit committee at least quarterly regarding the extent of services provided by the independent auditors in accordance with this pre-approval, and the fees for the services performed to date. The audit committee may also pre-approve particular services on a case-by-case basis. All audit-related fees, tax fees and other fees incurred by the Company for the year ended October 31, 2017, were approved by the Company’s audit committee.

PROPOSAL 4. ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION

Section 14A of the Securities Exchange Act of 1934 enables our stockholders to vote to approve, on an advisory (non-binding) basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with the SEC’s rules. Specifically, these rules address the information we must provide in the compensation tables and related disclosures included in this proxy statement.

As indicated in the compensation tables included in this proxy statement, we have structured our compensation program to reflect the size of our operations. While we believe that our executive compensation is modest, we design our compensation with a view towards retaining our executives, motivating them to devote their efforts towards profitable growth of our businesses and aligning their interests with those of our stockholders.

Accordingly, the Board recommends that our stockholders vote in favor of the following resolution:

RESOLVED, that the stockholders of Coda Octopus Group, Inc. approve, on an advisory basis, the compensation paid to our named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the compensation tables and any related materials disclosed in the proxy statement for the 2018 Annual Meeting.

This is an advisory vote, which means that the stockholder vote is not binding on us. Nevertheless, we value the opinions expressed by our stockholders and will carefully consider the outcome of the vote when making future compensation decisions for our named executive officers.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

HOUSEHOLDING OF PROXY MATERIALS

The SEC has adopted rules that permit companies and intermediaries to satisfy delivery requirements for proxy statements and annual reports to stockholders, with respect to two or more stockholders sharing the aggregate value of option shares which can become exercisable for the first time during any one calendar year, and certain additional limitations will apply to ISOs granted to “Ten Percent Stockholders”same address, by delivering a single copy of the Company (as definedmaterials addressed to those stockholders. This process, commonly referred to as “householding,” is designed to reduce duplicate printing and postage costs. We and some brokers may household annual reports to stockholders and proxy materials by delivering a single copy of the materials to multiple stockholders sharing the same address, unless contrary instructions have been received from the affected stockholders.

If a stockholder wishes in the 2006 Plan). The Compensation Committee may provide forfuture to receive a separate annual report to stockholders and proxy statement, or if a stockholder received multiple copies of some or all of these materials and would prefer to receive a single copy in the paymentfuture, the stockholder should submit a request to the stockholder’s broker if the shares are held in a brokerage account or to our Corporate Secretary, Coda Octopus Group, Inc., 7380 W. Sand Lake Road, Suite 500, Orlando, Florida 32819, if the stockholder is a record holder. We will send additional copies of the option price in cash, by deliveryrelevant material following receipt of common stock having a fair market value equal to such option price, by delivery of options or warrants having an intrinsic value equal to such option price or by a combination thereof or by any other method. Options granted under the 2006 Plan will become exercisable at such times and under such conditions as the Compensation Committee shall determine.


The Board of Directors may at any time and from time to time suspend, amend, modify or terminate the 2006 Plan; provided, however, that, to the extent required by any other law, regulation or stock exchange rule, no such change shall be effective without the requisite approvalrequest for additional copies.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Under Section 16(a) of the Company’s stockholders. In addition, no such change may adversely affect an award previously granted, except with the written consentSecurities Exchange Act of the grantee.



As of October 31, 2007, we had granted non-qualified options to purchase an aggregate of 4,535,900 shares of its common stock at exercise prices ranging from $1.00 per share to $1.80 per share, of which 3,484,100 have vested.
New Stock Option Plan

Under the Subscription Agreement entered into between the Company and The Royal Bank of Scotland, plc on February 21, 2008, there are certain restrictions on the adoption of new Stock Option Plans by the Company. In particular, until the redemption of the notes, the Company may only adopt new stock option plans on substantially similar terms to its existing stock option plan 2006 and it may not issue stock options at a price which is less than $1.05.
Section 16(a) Beneficial Ownership Reporting Compliance
Under the Exchange Act,1934, our directors, our executive officers, and any persons holding more than 10% of our common stock are required to report their ownership of the common stock and any changes in that ownership to the Securities and Exchange Commission. To our knowledge, based solely on our review of the copies of such reports received or written representations from certain reporting persons that no other reports were required, except as set forth below, we believe that during our fiscal year ended October 31, 2007 all2017, no reports relating to our securities required to be filed by current reporting persons timelywere filed all such reports.

Reportslate.

Initial statements of beneficial ownership on Form 3 were filed a few days after the Compensation Committeeapplicable due date for each of Per Wimmer and the Audit CommitteeNina Hoque. We will continue monitoring Section 16 compliance by each of the Board of Directors follow.


Report of the Compensation Committee

Philosophy

The compensation philosophy of the Company is to developour directors and implement policies that will attract and retain executive officers who bring valuable experience and skills to the Company and motivate them to contribute to the Company’s long-term success. By maintaining competitive compensation levels, the Company is able to attract and retain those individuals who are instrumental in helping it achieve its business objectives, thereby increasing long-term stockholder value.

The Compensation Committee believes that the development of compensation policies and the review of compensation programs is an evolving process that must take into account significant corporate developments and market dynamics. To that end, the Compensation Committee met once during fiscal 2007 to, among other things, (i) develop a comprehensive list of parameters for use in evaluating the performance of the Chief Executive Officer of the Company, (ii) discuss, review and approve bonuses and awards of stock options and restricted stock to executive officers and (iii) review the base salaries of all executive officers.

In fiscal 2008, the Compensation Committee intends to continue to reassess the Company’s existing compensation policies and to review outstanding executive officer pay packages and agreements.

Evaluation of Executive Performance
When assessing executive performance, the Compensation Committee does not rely solely on predetermined formulas. Rather, the Compensation Committee considered each executive’s overall contributions to the Company’s long-term and short-term goals. The Compensation Committee, working with senior management of the Company, has compiled the following list of parameters (listedwill assist them where possible in no particular order) for the Compensation Committee to use as it evaluates the performance of the Chief Executive Officer:

their filing obligations.

•STOCKHOLDER PROPOSALSearnings per share;

•

Any stockholder value;

•core business growth, revenue growth, revenue diversification;
•free cash flow;
•the strength of the Company’s balance sheet;
•intellectual property exploitation;
•legal and regulatory compliance;
•the extent to which budgetary objectives are met;
•the development of a strategic vision and a strategic plan;
•organizational transparency;
•increasing revenues, earnings;
•improving operating margins and successful cost reduction efforts;
•expanding the number of geographic markets served;
•rolling out new products and programs;
•developing new products; and
•developing leadership talent.

The Compensation Committee considers the need for the management of the Company to balance short-term goals, such as generating earnings per share, with longer terms goals, such as fostering the Company’s entrepreneurial investments and maintaining a strong balance sheet. The success of the effort to balance these often-competing objectives and their benefits to the Company cannot always be quantified, but the Compensation Committee believes that these efforts are critical to the Company’s on-going success.

Structure of Compensation Programs

The Company’s compensation programs provide executives with incentives to advance both the short-term and long-term interests of the Company. Accordingly, the Company’s compensation programs of both cash-based and equity-based compensation consist of base salary, quarterly cash bonuses, annual cash bonuses, stock options and restricted stock. In addition to reviewing the individual components of the compensation program, the Compensation Committee also reviews the totality of the compensation packages.

Base Salaries and Bonuses
Salaries and bonuses for the Company’s executive officers are determined primarily on the basis of each executive officer’s responsibility, the general salary practices of technology-based companies and each officer’s individual qualifications and experience.

Bonuses for the Company’s executive officers are based on various financial and non-financial results of the Company. By providing an annual bonus, the Compensation Committee believes that it also provides management with incentives to also focus on long-term goals and not merely quarter-to-quarter objectives.

Stock Option and Restricted Stock Grants
Stock options and shares of restricted stock are awarded to executive officers and other employees. Stock options provide value to the executive only when the Company’s stock price exceeds the stock option exercise price. Accordingly, the Compensation Committee believes that the appreciation of stock value underlying stock options provides a strong incentive for recipients of awards to manage the Companywho, in accordance with SEC rules, wishes to present a proposal for inclusion in the interests of the Company’s stockholders. Grants of restricted stock further a sense of stock ownership by executive officers and better align their interests with those of the stockholders. The Compensation Committee determines the number of options or restricted stockproxy materials to be granted baseddistributed in connection with next year’s annual meeting must submit the proposal to our Corporate Secretary, 7380 W. Sand Lake Road, Suite 500, Orlando, Florida 32819. Stockholder proposals for inclusion in our proxy statement for the 2019 Annual Meeting must be received on or before March 1, 2019 and must comply in all other respects with applicable SEC rules.

Any stockholder who wishes to propose any business to be considered by the executive’s levelstockholders at the 2019 Annual Meeting of responsibility, prior performance,Stockholders other than a proposal for inclusion in the proxy statement pursuant to the SEC’s rules, or who wants to nominate a person for election to the board of directors at that meeting, must notify our Corporate Secretary in writing and other compensation.


THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS

Paul Nussbaum Rodney Peacock

Report ofprovide the Audit Committee

The primary purpose of the Audit Committee is to assist the Board of Directors in its general oversight of the Company’s financial reporting process. The Audit Committee’s function is more fullyspecified information described in its charter.our Bylaws concerning the proposed business or nominee. The Committee reviews the charter on an annual basis. The Board of Directors has also determined that Paul Nussbaum qualifies as an “audit committee financial expert.”

Management is responsible for the preparation, presentation, and integrity of the Company’s financial statements, accounting and financial reporting principles, internal controls, and procedures designednotice must be delivered to ensure compliance with accounting standards, applicable laws, and regulations. The Company’s independent registered public accounting firm, RBSM LLP, is responsible for performing independent audits of (i) the consolidated financial statements and expressing an opinion on the conformity of those financial statements with U.S. generally accepted accounting principles, (ii) management’s assessment of the effectiveness of internal control over financial reporting, and (iii) the effectiveness of internal control over financial reporting.

THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

Paul Nussbaum Rodney Peacock

PROPOSAL NO. 2:
APPROVAL OF THE 2008 EMPLOYEES, DIRECTORS, OFFICERS AND CONSULTANTS
STOCK OPTION AND STOCK AWARD PLAN

At the Annual Meeting, the Company's stockholders are being asked to approve the 2008 Employees, Directors, Officers and Consultants Stock Option and Stock Award Plan (the "2008 Incentive Plan") and to authorize 2,500,000 shares of Common Stock for issuance thereunder. The following is a summary of the principal features of the 2008 Incentive Plan. The summary, however, does not purport to be a complete description of all the provisions of the 2008 Incentive Plan and is qualified by the terms of the actual plan a copy of which is attached hereto as Exhibit A.
General
The 2008 Incentive Plan was adopted by the Board of Directors on March 26, 2008. The Board of Directors has initially reserved 2,500,000 shares of Common Stock for issuance under the 2008 Incentive Plan. Under the Plan, options may be granted which are intended to qualify as Incentive Stock Options ("ISOs") under Section 422 of the Internal Revenue Code of 1986 (the "Code") or which are not ("Non-ISOs") intended to qualify as Incentive Stock Options thereunder.
The 2008 Incentive Plan and the right of participants to make purchases thereunder are intended to qualify as an "employee stock purchase plan" under Section 423 of the Internal Revenue Code of 1986, as amended (the "Code"). The 2008 Incentive Plan is not a qualified deferred compensation plan under Section 401(a) of the Internal Revenue Code and is not subjectmailed to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA").
Purpose
The primary purpose of the 2008 Incentive Plan is to attract and retain the best available personnel for the Company in order to promote the success of the Company's business and to facilitate the ownership of the Company's stock by employees. In the event that the 2008 Incentive Plan is not adopted the Company may have considerable difficulty in attracting and retaining qualified personnel, officers, directors and consultants.
Administration
The 2008 Incentive Plan, when approved, will be administered by the Company's Board of Directors, as the Board of Directors may be composed from time to time. All questions of interpretation of the 2008 Incentive Plan are determined by the Board, and its decisions are final and binding upon all participants. Any determination by a majority of the members of the Board of Directors at any meeting, or by written consent in lieu of a meeting, shall be deemed to have been made by the whole Board of Directors.
Notwithstanding the foregoing, the Board of Directors may at any time, or from time to time, appoint a committee (the "Committee") of the Board of Directors, and delegate to the Committee the authority of the Board of Directors to administer the Plan. Upon such appointment and delegation, the Committee shall have all the powers, privileges and duties of the Board of Directors, and shall be substituted for the Board of Directors, in the administration of the Plan, subject to certain limitations.
Members of the Board of Directors who are eligible employees are permitted to participate in the 2008 Incentive Plan and may vote on any matter affecting the administration of the 2008 Incentive Plan or the grant of any option pursuant to it. In the event that any member of the Board of Directors is at any time not a "disinterested person" to the extent that such member is the recipient of a grant under the 2008 Incentive Plan, then such grant under the Plan shall not be administered by said member of the Board of Directors, and may only by administered by a Committee all the members of which are disinterested persons, as so defined or by the remaining members of the Board of Directors who are not recipients of the grant in question.
Eligibility
Under the 2008 Incentive Plan, options may be granted to key employees, officers, directors or consultants of the Company and its affiliates, as provided in the 2008 Incentive Plan.
Terms of Options
The term of each Option granted under the 2008 Incentive Plan shall be contained in a stock option agreement between the Optionee and the Company and such terms shall be determined by the Board of Directors consistent with the provisions of the 2008 Incentive Plan, including the following:
(a) Purchase Price. The purchase price of the Common Shares subject to each ISO shall not be less than the fair market value (asaddress set forth in the 2008 Incentive Plan), or in the case of the grant of an ISO to a Principal Stockholder,preceding paragraph and received at our principal executive offices no later than March 1, 2019

OTHER BUSINESS

We are not less that 110% of fair market value of such Common Shares at the time such Option is granted. The purchase price of the Common Shares subject to each Non-ISO shall be determined at the time such Option is granted.

(b) Vesting. The dates on which each Option (or portion thereof) shall be exercisable and the conditions precedent to such exercise, if any, shall be fixed by the Board of Directors, in its discretion, at the time such Option is granted.
(c) Expiration. The expiration of each Option shall be fixed by the Board of Directors, in its discretion, at the time such Option is granted; however, unless otherwise determined by the Board of Directors at the time such Option is granted, an Option shall be exercisable for five (5) years after the date on which it was granted (the "Grant Date"). Each Option shall be subject to earlier termination as expressly provided in the 2008 Incentive Plan or as determined by the Board of Directors, in its discretion, at the time such Option is granted.
(d) Transferability. No Option shall be transferable, except by will or the laws of descent and distribution, and, during the lifetime of the Optionee, Options may be exercised by the Optionee only. No Option granted under the Plan shall be subject to execution, attachment or other process.
(e) Option Adjustments. The aggregate number and class of shares as to which Options may be granted under the Plan, the number and class of shares covered by each outstanding Option and the exercise price per share thereof (but not the total price), and all such Options, shall each be proportionately adjusted for any increase decrease in the number of issued Common Shares resulting from split-up spin-off or consolidation of shares or any like Capital adjustment or the paymentaware of any stock dividend.
(f) Termination, Modification and Amendment. The 2008 Incentive Plan (but not Options previously granted under the Plan) shall terminate ten (10) years from the date of its adoption by the Board of Directors, and no Option shall be granted after termination of the Plan. Subject to certain restrictions, the Plan may at any time be terminated and from time to time be modified or amended by the affirmative vote of the holders of a majority of the outstanding shares of the capital stock of the Company present, or represented, and entitled to vote at a meeting duly held in accordance with the applicable laws of the State of Delaware.
Federal Income Tax Aspects of the 2008 Incentive Plan
THE FOLLOWING IS A BRIEF SUMMARY OF THE EFFECT OF FEDERAL INCOME TAXATION UPON THE PARTICIPANTS AND THE COMPANY WITH RESPECT TO THE PURCHASE OF SHARES UNDER THE 2008 INCENTIVE PLAN. THIS SUMMARY DOES NOT PURPORT TO BE COMPLETE AND DOES NOT ADDRESS THE FEDERAL INCOME TAX CONSEQUENCES TO TAXPAYERS WITH SPECIAL TAX STATUS. IN ADDITION, THIS SUMMARY DOES NOT DISCUSS THE PROVISIONS OF THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH THE PARTICIPANT MAY RESIDE, AND DOES NOT DISCUSS ESTATE, GIFT OR OTHER TAX CONSEQUENCES OTHER THAN INCOME TAX CONSEQUENCES. THE COMPANY ADVISES EACH PARTICIPANT TO CONSULT HIS OR HER OWN TAX ADVISOR REGARDING THE TAX CONSEQUENCES OF PARTICIPATION IN THE 2008 INCENTIVE PLAN AND FOR REFERENCE TO APPLICABLE PROVISIONS OF THE CODE.
The 2008 Incentive Plan and the right of participants to make purchases thereunder are intended to qualify under the provisions of Sections 421, 422 and 423 of the Code. Under these provisions, no income will be recognized by a participant prior to disposition of shares acquired under the 2008 Incentive Plan.
If the shares are sold or otherwise disposed of (including by way of gift) morematters, other than two years after the first day of the offering period during which shares were purchased (the "Offering Date"), a participant will recognize as ordinary income at the time of such disposition the lesser of (a) the excess of the fair market value of the shares at the time of such disposition over the purchase price of the shares or (b) 15% of the fair market value of the shares on the first day of the offering period. Any further gain or loss upon such disposition will be treated as long-term capital gain or loss. If the shares are sold for a sale price less than the purchase price, there is no ordinary income and the participant has a capital loss for the difference.
If the shares are sold or otherwise disposed of (including by way of gift) before the expiration of the two-year holding period describedindicated above, the excess of the fair market value of the shares on the purchase date over the purchase price will be treated as ordinary income to the participant. This excess will constitute ordinary income in the year of sale or other disposition even if no gain is realized on the sale or a gift of the shares is made. The balance of any gain or loss will be treated as capital gain or loss and will be treated as long-term capital gain or loss if the shares have been held more than one year.
In the case of a participant who is subject to Section 16(b) of the Exchange Act, the purchase date for purposes of calculating such participant's compensation income and beginning of the capital gain holding period may be deferred for up to six months under certain circumstances. Such individuals should consult with their personal tax advisors prior to buying or selling shares under the 2008 Incentive Plan.
The ordinary income reported under the rules described above, added to the actual purchase price of the shares, determines the tax basis of the shares for the purpose of determining capital gain or loss on a sale or exchange of the shares.
The Company is entitled to a deduction for amounts taxed as ordinary income to a participant only to the extent that ordinary income must be reported upon disposition of shares by the participant before the expiration of the two-year holding period described above.
Restrictions on Resale
Certain officers and directors of the Company may be deemed to be "affiliates" of the Company as that term is defined under the Securities Act. The Common Stock acquired under the 2008 Incentive Plan by an affiliate may be reoffered or resold only pursuant to an effective registration statement or pursuant to Rule 144 under the Securities Act or another exemption from the registration requirements of the Securities Act.
Required Vote
The approval of the 2008 Incentive Plan and the reservation of 2,500,000 shares for issuance requires the affirmative vote of the holders of a majority of the shares of the Company's Common Stock present at the Annual Meeting in person or by proxy and entitled to vote and constituting at least a majority of the required quorum.
The proxy holders intend to vote the shares represented by proxies to approve the 2008 Incentive Plan.
RECOMMENDATION OF THE BOARD:
THE BOARD RECOMMENDS A VOTE FOR APPROVAL OF THE 2008 INCENTIVE PLAN.


PROPOSAL NO. 3:
APPROVAL OF AMENDMENT TO CERTIFICATE OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES
TO 150,000,000 SHARES OF COMMON STOCK.

At the Annual Meeting, the Company's stockholders are being asked to approve an amendment to the Company’s certificate of incorporation to increase the number of shares of common stock it is authorized to issue to 150,000,000. The Company’s certificate of incorporation currently authorizes the issuance of 105,000,000 shares of capital stock, of which 5,000,000 shares are classified as preferred stock, par value $0.001 per share, and 100,000,000 shares are classified as common stock, par value $0.001 per share. The purpose of the amendment to the Company’s charter is to increase the authorized shares of capital stock to 155,000,000, of which 5,000,000 shares are classified as preferred stock, and 150,000,000 shares are classified as common stock. On March 26, 2008, the Board of Directors adopted a resolution authorizing the amendment, subject to stockholder approval.
Adoption of this proposal would permit the Board of Directors, without further approval of the stockholders (except as may be required by applicable law or stock exchange listing requirements), to issue additional shares of common stock from time to time as the Board of Directors may determine, for such consideration as the Board of Directors establishes. In addition to providing the Company with the ability to issue shares under its equity compensation, employee benefit and stockholder investment plans, the availability of additional shares of common stock would provide flexibility in structuring possible acquisitions of other businesses, enable the Company to raise additional equity capital if and when needed, and enable the Board of Directors, in its discretion, to declare stock splits or stock dividends in the future. The additional shares of common stock would enable us to act quickly in response to opportunities that may arise for these types of transactions, without the necessity of obtaining further stockholder approval, except as may be required by applicable law or stock exchange listing requirements. The Company has no present plans, arrangements, or understandings with respect to possible acquisitions or financings requiring the availability of additional authorized common stock. However, we review and evaluate potential capital-raising activities, strategic transactions and other fundamental corporate transactions on an on-going basis to determine if such transactions would be in the best interests of us and our stockholders, and any such transaction could involve the issuance of some or all of our authorized but unissued common stock.

The amendment may be viewed as having the possible effect of diluting the stock ownership of current stockholders to the extent that some or all of the additional authorized shares of common stock are issued in the future. In addition, the ability to issue additional shares of common stock could discourage, under certain circumstances, an unsolicited attempt by another person or entity to acquire control of the Company. Although the Board of Directors has no present intention of doing so, the Company’s authorized but unissued common stock could be issued in one or more transactions which would make a takeover of the Company more difficult or costly. Notwithstanding the above, the proposed charter amendment will ensure that the Company continues to have additional shares available for future issuance from time to time as approved by the Board of Directors for any proper corporate purpose, including those referenced above.
Effective Date of the Charter Amendment
If the charter amendment is adopted by the required vote of stockholders, the charter amendment will become effective when the Articles of Amendment to the Company’s charter are filed with and accepted for record by the Secretary of State of the State of Delaware. The Company anticipates that this filing will be made promptly following the Annual Meeting, or as soon as practicable thereafter.

RECOMMENDATION OF THE BOARD:

THE BOARD RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENT TO CERTIFICATE OF INCORPORATION
PROPOSAL NO. 4:
RATIFICATION OF RBSM LLP AS
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM FOR 2008
General
The Audit Committee has appointed RBSM LLP (formerly Russell Bedford Stefanou Mirchandani LLP), as the independent registered public accounting firm of Coda Octopus Group, Inc. for the fiscal year ending October 31, 2008. A member of RBSM LLP will be at the annual meeting and will have the opportunity to make a statement and answer appropriate questions. If the stockholders fail to ratify RBSM LLP as the independent registered public accounting firm, the Audit Committee will reconsider its selection.
Fees
Audit Fees. The aggregate fees billed by RBSM LLP for professional services rendered for the audit of the Company's annual financial statements for the last two fiscal years and for the reviews of the financial statements included in the Company's Quarterly reports on Form 10-QSB during the last two fiscal years 2007 and 2006 were $268,992 and $92,314, respectively.
Audit-Related Fees. The aggregate fees billed by RBSM LLP for professional services rendered in connection with the audits of acquired businesses, the review of and consent to the filing of registration statements, and assistance in responding to comment letters issued by the Securities & Exchange Commission during the last two fiscal years 2007 and 2006 were $134,562 and $0, respectively.
Tax Fees. The aggregate fees billed by the Company's principal accountants for tax compliance, tax advice and tax planning.


OTHER MATTERS

The Board of Directors knows of no other business that will be presented for action at the Annual Meeting. IfHowever, if any other business ismatters properly broughtcome before the Annual Meeting, it is intended that proxies granted will be voted in respect thereof in accordance with the judgments ofmeeting, the persons voting the proxies.

It is important that the proxies be returned promptly and that your shares be represented. Stockholders are urged to fill in, sign and promptly return the accompanying formnamed in the enclosed envelope.

BY ORDER OF THE BOARD OF DIRECTORS
form of proxy intend to vote such proxy in their discretion on such matters.

Copies of our Annual Report on Form 10-K for the year ended October 31, 2017, including financial statements and schedules thereto filed with the SEC, but excluding exhibits, are available without charge to stockholders upon written request addressed to Corporate Secretary, Coda Octopus Group, Inc., 7380 W. Sand Lake Road, Suite 500, Orlando, Florida 32819. The Form 10-K includes a list of exhibits to the Form 10-K. Copies of exhibits will be furnished to stockholders upon written request and upon payment of reproduction and mailing expenses.

Orlando, Florida

June 10, 2008


EXHIBIT____, 2018

ANNEX A

CODA OCTOPUS GROUP, INC.

20082017 STOCK INCENTIVE STOCK OPTION PLAN


SECTION 1. PURPOSE OF THE PLAN.

1.Purpose of Plan.

The purpose of the Coda Octopus Group, Inc. 2008 Employees, Directors and Officers Consultants2017 Stock Option and Stock AwardIncentive Plan (“Plan”(the “Plan”) is to maintainadvance the abilityinterests of Coda Octopus Group, Inc., a Delaware corporation (the “Company”), and its subsidiariesstockholders by enabling the Company and its Subsidiaries to attract and retain highly qualified and experienced directors, officers, employees and consultants and to give directors, officers, employees and consultants a continued proprietary interestindividuals through opportunities for equity participation in the success of the Company, and to reward those individuals who contribute to the Company’s achievement of its subsidiaries. In addition,economic objectives.

2.Definitions.

The following terms will have the Plan is intendedmeanings set forth below, unless the context clearly otherwise requires:

2.1       “Board” means the Company’s Board of Directors.

2.2       “Broker Exercise Notice” means a written notice pursuant to encourage ownershipwhich a Participant, upon exercise of common stock, $.001 par value (“Common Stock”),an Option, irrevocably instructs a broker or dealer to sell a sufficient number of shares or loan a sufficient amount of money to pay all or a portion of the Company byexercise price of the employees, directors, officers,Option and/or any related withholding tax obligations and consultants ofremit such sums to the Company and directs the Company to deliver stock certificates to be issued upon such exercise directly to such broker or dealer or their nominee.

2.3       “Cause” means (i) dishonesty, fraud, misrepresentation, embezzlement or deliberate injury or attempted injury, in each case related to the Company or any Subsidiary, (ii) any unlawful or criminal activity of its Affiliates (asa serious nature, (iii) any intentional and deliberate breach of a duty or duties that, individually or in the aggregate, are material in relation to the Participant’s overall duties, (iv) any material breach of any confidentiality or noncompete agreement entered into with the Company or any Subsidiary, or (v) with respect to a particular Participant, any other act or omission that constitutes “cause” as may be defined below)in any employment, consulting or similar agreement between such Participant and to provide increased incentive for such persons to render services and to exert maximum effort for the successCompany or any Subsidiary.

2.4       “Change in Control” means an event described in Section 11.1 of the Company business. The Plan provides eligible employees, directors, officers, consultants and affiliates the opportunity to participate in the enhancement of shareholder value by the grants of options, stock appreciation rights, awards of restricted stock, bonuses and/or fees payable in unrestricted stock, or any combination thereof. In addition, the Company expects that the Plan will further strengthen the identification of the directors, officers, employees and consultants with the stockholders. Certain options to be granted under this Plan are intended to qualify as Incentive Stock Options (“ISOs”) pursuant to Section 422 ofPlan.

2.5       “Code” means the Internal Revenue Code of 1986, as amended (“Code”), while other options granted under thisamended.

2.6       “Committee” means the group of individuals administering the Plan, will be nonqualified options which are not intended to qualify as ISOs (“Nonqualified Options”), either or both as provided in the agreements evidencing the options as provided in Section 6 hereof. Employees, consultants and directors who participate or become eligible to participate in this Plan from time to time are referred to collectively herein as “Participants.3 of the Plan.

2.7       “Common Stock” As used in this Plan,means the term “Affiliates” means any “parent corporation”common stock of the Company, $0.001 par value per share, or the number and any “subsidiary corporation”kind of shares of stock or other securities into which such Common Stock may be changed in accordance with Section 4.3 of the CompanyPlan.

2.8       “Disability” means the disability of the Participant means the permanent and total disability of the Participant within the meaning of Code Sections 424(e) and (f), respectively.Section 22(e)(3) of the Code.


SECTION 2. ADMINISTRATION OF THE PLAN.

(a) 2.9       “Composition of Committee.Effective Date
The Plan” means December 6, 2017, but no Incentive Stock Option shall be administeredexercised unless and until the Plan has been approved by the Board of Directorsstockholders of the Company, (the “Board”)which approval shall be within twelve (12) months before or a committeeafter the date the Plan is adopted by the Board.

2.10       “Eligible Recipients” means all employees, officers and directors of the Board. When acting in such capacity the Board is herein referred to as the “Committee,” which shall also designate the Chairman of the Committee. IfCompany or any Subsidiary, and any person who has a relationship with the Company is governed by Rule 16b-3 promulgated by the Securities and or any Subsidiary.

2.11       “Exchange Commission (“Commission”) pursuant toAct” means the Securities Exchange Act of 1934, as amended (“Exchange Act”), no director shall serveamended.

2.12       “Fair Market Value” means, with respect to the Common Stock, as a memberof any date: (i) the mean between the reported high and low sale prices of the Common Stock at the end of the regular trading session if the Common Stock is listed, admitted to unlisted trading privileges, or reported on any national securities exchange or on the NASDAQ Global Select or Global Market on such date (or, if no shares were traded on such day, as of the next preceding day on which there was such a trade); or (ii) if the Common Stock is not so listed, admitted to unlisted trading privileges, or reported on any national exchange or on the NASDAQ Global Select or Global Market, the closing bid price as of such date at the end of the regular trading session, as reported by the Nasdaq Capital Market, OTC Bulletin Board, The OTC Market, or other comparable service; or (iii) if the Common Stock is not so listed or reported, such price as the Committee unless hedetermines in good faith in the exercise of its reasonable discretion.

2.13       “Incentive Award” means an Option, Restricted Stock Award or she isPerformance Stock Award granted to an Eligible Recipient pursuant to the Plan.

2.14       “Incentive Stock Option” means a “disinterested person”right to purchase Common Stock granted to an Eligible Recipient pursuant to Section 6 of the Plan that qualifies as an “incentive stock option” within the meaning of Section 422 of the Code.

2.15       “Non-Statutory Stock Option” means a right to purchase Common Stock granted to an Eligible Recipient pursuant to Section 6 of the Plan that does not qualify as an Incentive Stock Option.

2.16       “Option” means an Incentive Stock Option or a Non-Statutory Stock Option.

2.17       “Participant” means an Eligible Recipient who receives one or more Incentive Awards under the Plan.

2.18       “Performance Criteria” means the performance criteria that may be used by the Committee in granting Performance Stock Awards contingent upon achievement of such Rule 16b-3.


(b) performance goals as the Committee Action.
may determine in its sole discretion. The Committee shall hold its meetings atmay select one criterion or multiple criteria for measuring performance, and the measurement may be based upon Company, Subsidiary or business unit performance, or the individual performance of the Eligible Recipient, either absolute or by relative comparison to other companies, other Eligible Recipients or any other external measure of the selected criteria.

2.19       “Performance Stock Awards” means an award of Common Stock granted to an Eligible Recipient pursuant to Section 8 of the Plan and which may be subject to the future achievement of Performance Criteria or be free of any performance or vesting conditions.

2.20       “Previously Acquired Shares” means shares of Common Stock that are already owned by the Participant or, with respect to any Incentive Award, that are to be issued upon the grant, exercise or vesting of such timesIncentive Award.

2.21       “Restricted Stock Award” means an award of Common Stock granted to an Eligible Recipient pursuant to Section 7 of the Plan that is subject to the restrictions on transferability and placesthe risk of forfeiture imposed by the provisions of such Section 7.

2.22       “Retirement” means normal or approved early termination of employment or service.

2.23       “Securities Act” means the Securities Act of 1933, as it may determine. A majorityamended.

2.24       “Subsidiary” means any entity that is directly or indirectly controlled by the Company or any entity in which the Company has a significant equity interest, as determined by the Committee.

3.Plan Administration.

3.1.       The Committee. The Plan will be administered by the Board or by a committee of the Board. So long as the Company has a class of its members shall constitute a quorum, and all determinationsequity securities registered under Section 12 of the Committee shall be madeExchange Act, any committee administering the Plan will consist solely of two or more members of the Board who are “non-employee directors” within the meaning of Rule 16b-3 under the Exchange Act. Such a committee, if established, will act by not less than a majority approval of its members. Any decision or determination reducedthe members (unanimous approval with respect to writingaction by written consent), and signed by a majority of the members shall be fullyof such a committee will constitute a quorum. As used in the Plan, “Committee” will refer to the Board or to such a committee, if established. To the extent consistent with applicable corporate law of the Company’s jurisdiction of incorporation, the Committee may delegate to any officers of the Company the duties, power and authority of the Committee under the Plan pursuant to such conditions or limitations as effective as if it had been made by a majority votethe Committee may establish; provided, however, that only the Committee may exercise such duties, power and authority with respect to Eligible Recipients who are subject to Section 16 of its members at a meeting duly called and held.the Exchange Act. The Committee may designateexercise its duties, power and authority under the SecretaryPlan in its sole and absolute discretion without the consent of any Participant or other party, unless the Plan specifically provides otherwise. Each determination, interpretation or other action made or taken by the Committee pursuant to the provisions of the Plan will be conclusive and binding for all purposes and on all persons, and no member of the Committee will be liable for any action or determination made in good faith with respect to the Plan or any Incentive Award granted under the Plan.

3.2.       Authority of the Committee.

(a)       In accordance with and subject to the provisions of the Plan, the Committee will have the authority to determine all provisions of Incentive Awards as the Committee may deem necessary or desirable and as consistent with the terms of the Plan, including, without limitation, the following: (i) the Eligible Recipients to be selected as Participants; (ii) the nature and extent of the Incentive Awards to be made to each Participant (including the number of shares of Common Stock to be subject to each Incentive Award, any exercise price, the manner in which Incentive Awards will vest or become exercisable and whether Incentive Awards will be granted in tandem with other Incentive Awards) and the form of written agreement, if any, evidencing such Incentive Award; (iii) the time or times when Incentive Awards will be granted; (iv) the duration of each Incentive Award; and (v) the restrictions and other conditions to which the payment or vesting of Incentive Awards may be subject. In addition, the Committee will have the authority under the Plan in its sole discretion to pay the economic value of any Incentive Award in the form of cash, Common Stock or any combination of both.

(b)       Subject to Section 3.2(d), below, the Committee will have the authority under the Plan to amend or modify the terms of any outstanding Incentive Award in any manner, including, without limitation, the authority to modify the number of shares or other terms and conditions of an Incentive Award, extend the term of an Incentive Award, accelerate the exercisability or vesting or otherwise terminate any restrictions relating to an Incentive Award, accept the surrender of any outstanding Incentive Award or, to the extent not previously exercised or vested, authorize the grant of new Incentive Awards in substitution for surrendered Incentive Awards; provided, however that the amended or modified terms are permitted by the Plan as then in effect and that any Participant adversely affected by such amended or modified terms has consented to such amendment or modification.

(c)       In the event of (i) any reorganization, merger, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock split, combination of shares, rights offering, extraordinary dividend or divestiture (including a spin-off) or any other change in corporate structure or shares; (ii) any purchase, acquisition, sale, disposition or write-down of a significant amount of assets or a significant business; (iii) any change in accounting principles or practices, tax laws or other such laws or provisions affecting reported results; or (iv) any other similar change, in each case with respect to the Company or any other entity whose performance is relevant to the grant or vesting of an Incentive Award, the Committee (or, if the Company is not the surviving corporation in any such transaction, the board of directors of the surviving corporation) may, without the consent of any affected Participant, amend or modify the vesting criteria (including Performance Criteria) of any outstanding Incentive Award that is based in whole or in part on the financial performance of the Company (or any Subsidiary or division or other subunit thereof) or such other entity so as equitably to reflect such event, with the desired result that the criteria for evaluating such financial performance of the Company or such other Company employees to assistentity will be substantially the Committee insame (in the administration of the Plan, and may grant authority to such persons to execute award agreements or other documents on behalfsole discretion of the Committee andor the Company. Any duly constituted committeeboard of directors of the Board satisfyingsurviving corporation) following such event as prior to such event; provided, however, that the qualificationsamended or modified terms are permitted by the Plan as then in effect.

(d)       Notwithstanding any other provision of this Plan other than Section 4.3, the Committee may not, without prior approval of the Company’s stockholders, seek to effect any re-pricing of any previously granted, “underwater” Option by: (i) amending or modifying the terms of the Option to lower the exercise price; (ii) canceling the underwater Option and granting either (A) replacement Options having a lower exercise price; (B) Restricted Stock Awards; or (C) Performance Stock Awards in exchange; or (iii) repurchasing the underwater Options and granting new Incentive Awards under this Plan. For purposes of this Section 2 may3.2(d) and Section 11.4, an Option will be appointed asdeemed to be “underwater” at any time when the Committee.



(c) Committee Expenses.
All expenses and liabilities incurred by the Committee in the administrationFair Market Value of the Plan shall be borne byCommon Stock is less than the Company. The Committee may employ attorneys, consultants, accountants or other persons.

SECTION 3. STOCK RESERVED FOR THE PLAN.
exercise price of the Option.

4.Shares Available for Issuance.

4.1.       Maximum Number of Shares Available; Certain Restrictions on Awards. Subject to adjustment as provided in Section 6(m) hereof, the aggregate number4.3 of Shares that may be optioned or issued under the Plan, is 2,500,000. The Shares subject to the Plan shall consist of authorized but unissued Shares and suchmaximum number of shares shallof Common Stock that will be and is hereby reservedavailable for sale for such purpose. Any of such Shares which may remain unsold and which are not subject to outstanding options at the termination of the Plan shall cease to be reserved for the purpose of the Plan, but until termination of the Plan or the termination of the last of the options granted under the Plan, whichever last occurs, the Company shall at all times reserve a sufficient number of shares to meet the requirements of the Plan. Should any option expire or be canceled prior to its exercise in full, the Shares theretofore subject to such option may again be made subject to an option under the Plan.

Immediately upon the grant of any option or award, the number of Shares that may be issued or optionedissuance under the Plan will be increased.913,612. The increase shallshares available for issuance under the Plan may, at the election of the Committee, be an amount sucheither treasury shares or shares authorized but unissued, and, if treasury shares are used, all references in the Plan to the issuance of shares will, for corporate law purposes, be deemed to mean the transfer of shares from treasury.

4.2.       Accounting for Incentive Awards. Shares of Common Stock that immediately after such increaseare issued under the totalPlan or that are subject to outstanding Incentive Awards will be applied to reduce the maximum number of shares of Common Stock remaining available for issuance under the Plan; provided, however, that shares subject to an Incentive Award that lapses, expires, is forfeited (including issued shares forfeited under a Restricted Stock Award) or for any reason is terminated unexercised or unvested or is settled or paid in cash or any form other than shares of Common Stock will automatically again become available for issuance under the Plan. To the extent that the exercise price of any Option and/or associated tax withholding obligations are paid by tender or attestation as to ownership of Previously Acquired Shares, or to the extent that such tax withholding obligations are satisfied by withholding of shares otherwise issuable upon exercise of the Option, only the number of shares of Common Stock issued net of the number of shares tendered, attested to or withheld will be applied to reduce the maximum number of shares of Common Stock remaining available for issuance under the Plan.

4.3.       Adjustments to Shares and Incentive Awards. In the event of any reorganization, merger, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock split, combination of shares or any other change in the corporate structure or shares of the Company, the Committee (or, if the Company is not the surviving corporation in any such transaction, the board of directors of the surviving corporation) will make appropriate adjustment (which determination will be conclusive) as to the number and kind of securities or other property (including cash) available for issuance or payment under the Plan and, reserved for issuance uponin order to prevent dilution or enlargement of the rights of Participants, the number and kind of securities or other property (including cash) subject to outstanding Incentive Awards and the exercise price of outstanding optionsOptions.

5.Participation.

Participants in the Plan will equal not more than 20%be those Eligible Recipients who, in the judgment of the total number of issued and outstanding Shares. Such increase in the number of Shares subjectCommittee, have contributed, are contributing or are expected to contribute to the Plan shall occur without the necessityachievement of any further corporate action of any kind or character.


SECTION 4. ELIGIBILITY.
The Participants shall include directors, employees, including officers,economic objectives of the Company andor its divisions and subsidiaries, and consultants and attorneys who provide bona fide servicesSubsidiaries. Eligible Recipients may be granted from time to time one or more Incentive Awards, singly or in combination or in tandem with other Incentive Awards, as may be determined by the Company. Participants are eligibleCommittee in its sole discretion. Incentive Awards will be deemed to be granted options, restricted stock, unrestricted stock and other awards under this Plan and to have their bonuses and/or consulting fees payableas of the date specified in restricted stock, unrestricted stock and other awards. A Participant who has been granted an option hereunderthe grant resolution of the Committee, which date will be the date of any related agreement with the Participant.

6.Options.

6.1.       Grant. An Eligible Recipient may be granted an additional optionone or options, if the Committee shall so determine.


SECTION 5. GRANT OF OPTIONS.
(a) Discretion.
The Committee shall have sole and absolute discretionary authority (i) to determine, authorize, and designate those persons pursuant to this Plan who are to receive options, restricted Shares or non-restricted Sharesmore Options under the Plan, (ii)and such Options will be subject to determinesuch terms and conditions, consistent with the number of Shares to be covered by such grant or such options and the terms thereof, (iii) to determine the type of Shares granted: restricted Shares, unrestricted Shares or a combination of both, and (iv) to determine the type of option granted: ISO, nonqualified option or a combination of both determinations as evidenced by a written option agreement. Subject to the expressother provisions of the Plan, as may be determined by the Committee shall have discretionary authorityin its sole discretion. The Committee may designate whether an Option is to prescribe, amend and rescind rules and regulations relating to the Plan, to interpret the Plan, to prescribe and amend the terms of the option agreements (which need not be identical) and to make all other determinations deemed necessary or advisable for the administration of the Plan.

(b) Stockholder Approval.
All ISOs granted under this Plan are subject to, and may not be exercised before, the approval of this Plan by the stockholders prior to the first anniversary date of the Board meeting held to approve the Plan, by the affirmative vote of the holders of a majority of the outstanding shares of the Company present, or represented by proxy, and entitled to vote thereat, or by written consent in accordance with the laws of the State of Delaware, provided that if such approval by the stockholders of the Company is not forthcoming, all options and stock awards previously granted under this Plan other than ISOs shall be valid in all respects.
(c) Limitation onconsidered an Incentive Stock Options.
The aggregate fair market value (determined in accordance with Section 6(b) of this Plan atOption or a Non-Statutory Stock Option. To the time the option is granted) of the Commonextent that any Incentive Stock with respect to which ISOs may be exercisable for the first time by any Participant during any calendar year under all such plans of the Company and its Affiliates shall not exceed $1,000,000.

SECTION 6. TERMS AND CONDITIONS.
Each optionOption granted under the Plan shallceases for any reason to qualify as an “incentive stock option” for purposes of Section 422 of the Code, such Incentive Stock Option will continue to be evidencedoutstanding for purposes of the Plan but will thereafter be deemed to be a Non-Statutory Stock Option.

6.2.       Exercise Price. The per share price to be paid by a Participant upon exercise of an agreement, in a form approvedOption will be determined by the Committee which shall be subject toin its discretion at the following express terms and conditions and to such other terms and conditions as the Committee may deem appropriate.


(a) Option Period.
The Committee shall promptly notify the Participanttime of the option grant and a written agreement shall promptlyOption grant; provided, however, that such price will not be executed and delivered by and on behalfless than 100% of the Company and the Participant, provided that the option grant shall expire if a written agreement is not signed by said Participant (or his agent or attorney) and returned to the Company within 60 days from dateFair Market Value of receipt by the Participantone share of such agreement. The date of grant shall be the date the option is actually granted by the Committee, even though the written agreement may be executed and delivered by the Company and the Participant after that date. Each option agreement shall specify the period for which the option thereunder is granted (which in no event shall exceed ten years from the date of grant) and shall provide that the option shall expire at the end of such period. If the original term of an option is less than ten years fromCommon Stock on the date of grant the option may be amended priorwith respect to its expiration, with the approvalany Incentive Stock Option (110% of the Committee and the Participant, to extend the term so that the term as amended is not more than ten years from the date of grant. However, in the case of an ISO grantedFair Market Value with respect to an individual who,Incentive Stock Option if, at the time of grant,such Incentive Stock Option is granted, the Participant owns, stock possessingdirectly or indirectly, more than 10 percent10% of the total combined voting power of all classes of stock of the Company or its Affiliate (“Ten Percent Stockholder”),any parent or subsidiary corporation of the Company).

6.3.       Exercisability and Duration. An Option will become exercisable at such period shall not exceed five years from the date of grant.


(b) Option Price.
The purchase price of each Share subject to each option granted pursuant to the Plan shalltimes and in such installments and upon such terms and conditions as may be determined by the Committee at the time the option is granted and, in the case of ISOs, shall not be less than 100% of the fair market value of a Share on the date the option is granted, as determined by the Committee. In the case of an ISO granted to a Ten Percent Stockholder, the option price shall not be less than 110% of the fair market value of a Share on the date the option is granted. The purchase price of each Share subject to a Nonqualified Option under this Plan shall be determined by the Committee prior to granting the option. The Committee shall set the purchase price for each Share subject to a Nonqualified Option at either the fair market value of each Share on the date the option is granted, or at such other price as the Committee in its sole discretion shall determine.

Atat the time a determinationof grant (including without limitation (i) the achievement of one or more of the fair market valuePerformance Criteria and/or (ii) that the Participant remain in the continuous employ or service of the Company or a ShareSubsidiary for a certain period); provided, however, that if the Committee does not specify the expiration date of the Option, the expiration date shall be 10 years from the date on which the Option was granted. In no case may an Option may be exercisable after 10 years from its date of grant (five years from its date of grant in the case of an Incentive Stock Option if, at the time the Incentive Stock Option is requiredgranted, the Participant owns, directly or indirectly, more than 10% of the total combined voting power of all classes of stock of the Company or any parent or subsidiary corporation of the Company).

6.4.       Payment of Exercise Price. The total purchase price of the shares to be purchased upon exercise of an Option will be paid entirely in cash (including check, bank draft or money order); provided, however, that the Committee, in its sole discretion and upon terms and conditions established by the Committee, may allow such payments to be made, hereunder,in whole or in part, by tender of a Broker Exercise Notice, by tender, or attestation as to ownership, of Previously Acquired Shares that have been held for the determinationperiod of time necessary to avoid a charge to the Company’s earnings for financial reporting purposes and that are otherwise acceptable to the Committee, or by a combination of such methods. For purposes of such payment, Previously Acquired Shares tendered or covered by an attestation will be valued at their Fair Market Value on the exercise date.

6.5.       Manner of Exercise. An Option may be exercised by a Participant in whole or in part from time to time, subject to the conditions contained in the Plan and in the agreement evidencing such Option, by delivery in person, by facsimile or electronic transmission or through the mail of written notice of exercise to the Company at its fair market value shalllegal department and by paying in full the total exercise price for the shares of Common Stock to be madepurchased in accordance with Section 6.4 of the Plan.

7.Restricted Stock Awards.

7.1.       Grant. An Eligible Recipient may be granted one or more Restricted Stock Awards under the Plan, and such Restricted Stock Awards will be subject to such terms and conditions, consistent with the other provisions of the Plan, as may be determined by the Committee in its sole discretion. The Committee may impose such mannerrestrictions or conditions, not inconsistent with the provisions of the Plan, to the vesting of such Restricted Stock Awards as it deems appropriate.

(c) Exercise Period.
The Committee may provideappropriate, including, without limitation, (i) the achievement of one or more of the Performance Criteria and/or (ii) that the Participant remain in the option agreement that an option may be exercised in whole, immediately,continuous employ or is to be exercisable in increments. In addition, the Committee may provide that the exercise of all or part of an option is subject to specified performance by the Participant. However, no portion of any option may be exercisable by a Participant prior to the approval of the Plan by the stockholders of the Company.
(d) Procedure for Exercise.
Options shall be exercised by the delivery of written notice to the Secretary of the Company setting forth the number of shares with respect to which the option is being exercised. Such notice shall be accompanied by cash or cashier’s check, bank draft, postal or express money order payable to the orderservice of the Company or at the optiona Subsidiary for a certain period.

7.2.       Rights as a Stockholder; Transferability. Except as provided in Sections 7.1, 7.3, 7.4 and 12.3 of the Committee, inPlan, a Participant will have all voting, dividend, liquidation and other rights with respect to shares of Common Stock theretofore owned by suchissued to the Participant (or any combinationas a Restricted Stock Award under this Section 7 upon the Participant becoming the holder of cash and Common Stock). Notice may also be delivered by fax or telecopy provided that the purchase pricerecord of such shares is delivered toas if such Participant were a holder of record of shares of unrestricted Common Stock.

7.3.       Dividends and Distributions. Unless the Company via wire transfer onCommittee determines otherwise in its sole discretion (either in the same dayagreement evidencing the fax is received byRestricted Stock Award at the Company. The notice shall specifytime of grant or at any time after the address to whichgrant of the certificates for such shares are to be mailed. A Participant shall be deemed to be a stockholderRestricted Stock Award), any dividends or distributions (other than regular quarterly cash dividends) paid with respect to Shares covered by an option on the date the Company receives such written notice and such option payment. As promptly as practicable after receiptshares of such written notification and payment, the Company shall deliverCommon Stock subject to the Participant certificates forunvested portion of a Restricted Stock Award will be subject to the number ofsame restrictions as the shares with respect to which such option has been so exercised, issueddividends or distributions relate. The Committee will determine in its sole discretion whether any interest will be paid on such dividends or distributions.

7.4.       Enforcement of Restrictions. To enforce the restrictions referred to in this Section 7, the Committee may place a legend on the stock certificates referring to such restrictions and may require the Participant, until the restrictions have lapsed, to keep the stock certificates, together with duly endorsed stock powers, in the Participant’s name or such other name as Participant directs; provided, however, that such delivery shall be deemed effected for all purposes when a stock transfer agent of the Company shall have deposited such certificates in the United States mail, addressed to the Participant at the address specified pursuant to this Section 6(d).


(e) Termination of Employment.
If an executive officer to whom an option is granted ceases to be employed by the Company for any reason other than death or disability, any option which is exercisable on the date of such termination of employment may be exercised during a period beginning on such date and ending at the time set forth in the option agreement; provided, however, that if a Participant’s employment is terminated because of the Participant’s theft or embezzlement from the Company, disclosure of trade secretscustody of the Company or its transfer agent, or to maintain evidence of stock ownership, together with duly endorsed stock powers, in a certificateless book-entry stock account with the commission of a willful, felonious act while in the employment of the Company (such reasons shall hereinafter be collectively referred to as “for cause”), then any option or unexercised portion thereof granted to said Participant shall expire upon such termination of employment. Notwithstanding the foregoing, no ISOCompany’s transfer agent.

8.Performance Stock Awards.

8.1.       An Eligible Recipient may be exercised later than three months after an employee’s termination of employment for any reason other than deathgranted one or disability.


(f) Disability or Death of Participant.
In the event of the determination of disability or death of a Participantmore Performance Stock Awards under the Plan, while he or she is employedand the issuance of shares of Common Stock pursuant to such Performance Stock Awards will be subject to such terms and conditions, if any, consistent with the other provisions of the Plan, as may be determined by the Company,Committee in its sole discretion, including, but not limited to, the options previously granted to him may be exercised (to the extent heachievement of one or she would have been entitled to do so at the datemore of the determinationPerformance Criteria.

8.2.       Restrictions on Transfers. The right to receive shares of disabilityPerformance Stock Awards on a deferred basis may not be sold, assigned, transferred, pledged or death) at any time and from time to time, within a period beginning on the date of such determination of disability or death and ending at the time set forth in the option agreement, by the former employee, the guardian of his estate, the executor or administrator of his estate or by the person or persons to whom his rights under the option shall passotherwise encumbered, other than by will or the laws of descent and distribution, but in nodistribution.

9.Effect of Termination of Employment or Other Service.

9.1.       Termination Due to Death or Disability. In the event may the option be exercised after its expiration under the terms of the option agreement. Notwithstanding the foregoing, no ISO may be exercised later than one year after the determination of disability or death. A Participant shall be deemed to be disabled if, in the opinion of a physician selected by the Committee, he or she is incapable of performing services for the Company of the kind he or she was performing at the time the disability occurred by reason of any medically determinable physical or mental impairment which can be expected to result in death or to be of long, continued and indefinite duration. The date of determination of disability for purposes hereof shall be the date of such determination by such physician.


(g) Assignability.
An option shall not be assignable or otherwise transferable except by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order as defined in the Code or Title I of the Employee Retirement Income Security Act, as amended, or the rules thereunder. During the lifetime of a Participant, an option shall be exercisable only by the Participant.

(h) Incentive Stock Options.
Each option agreement may contain such terms and provisions as the Committee may determine to be necessary or desirable in order to qualify an option designated as an incentive stock option.
(i) Restricted Stock Awards.
Awards of restricted stock under this Plan shall be subject to all the applicable provisions of this Plan, including the following terms and conditions, and to such other terms and conditions not inconsistent therewith, as the Committee shall determine:

(A) Awards of restricted stock may be in addition to or in lieu of option grants. Awards may be conditioned on the attainment of particular performance goals based on criteria established by the Committee at the time of each award of restricted stock. During a period set forth in the agreement (the “Restriction Period”), the recipient shall not be permitted to sell, transfer, pledge, or otherwise encumber the shares of restricted stock; except that such shares may be used, if the agreement permits, to pay the option price pursuant to any option granted under this Plan, provided an equal number of shares delivered to the Participant shall carry the same restrictions as the shares so used. Shares of restricted stock shall become free of all restrictions if during the Restriction Period, (i) the recipient dies, (ii) the recipient’s directorship,Participant’s employment or consultancy terminates by reason of permanent disability, as determined by the Committee, (iii) the recipient retires after attaining both 59 1/2 years of age and five years of continuousother service with the Company and/and all Subsidiaries is terminated by reason of death or a division or subsidiary, or (iv) if provided inDisability:

(a)       All outstanding Options then held by the agreement, there is a “change in control” of the Company (as defined in such agreement). The Committee may require medical evidence of permanent disability, including medical examinations by physicians selected by it. Unless andParticipant will, to the extent otherwise providedexercisable as of such termination, remain exercisable for a period of six (6) months after such termination (but in no event after the expiration date of any such Option); and

(b)       All Restricted Stock Awards then held by the Participant that have not vested as of such termination will be terminated and forfeited; and

(c)       All outstanding Performance Stock Awards then held by the Participant that have not vested as of such termination will be terminated and forfeited.

9.2.       Termination Due to Retirement. Subject to Section 9.5 of the Plan, in the agreement, sharesevent a Participant’s employment or other service with the Company and all Subsidiaries is terminated by reason of restricted stock shallRetirement:

(a)       All outstanding Options then held by the Participant will, to the extent exercisable as of such termination, remain exercisable in full for a period of three (3) months after such termination (but in no event after the expiration date of any such Option). Options not exercisable as of such Retirement will be forfeited and revertterminate; and

(b)       All Restricted Stock Awards then held by the Participant that have not vested as of such termination will be terminated and forfeited; and

(c)       All outstanding Performance Stock Awards then held by the Participant that have not vested as of such termination will be terminated and forfeited.

9.3.       Termination for Reasons Other than Death, Disability or Retirement. Subject to Section 9.5 of the Plan, in the event a Participant’s employment or other service is terminated with the Company upon the recipient’s termination of directorship, employment or consultancy during the Restriction Periodand all Subsidiaries for any reason other than death, permanent disability,Disability or Retirement, or a Participant is in the employ of a Subsidiary and the Subsidiary ceases to be a Subsidiary of the Company (unless the Participant continues in the employ of the Company or another Subsidiary):

(a)       All outstanding Options then held by the Participant will, to the extent exercisable as of such termination, remain exercisable in full for a period of three months after such termination (but in no event after the expiration date of any such Option). Options not exercisable as of such termination will be forfeited and terminate; and

(b)       All Restricted Stock Awards then held by the Participant that have not vested as of such termination will be terminated and forfeited; and

(c)       All outstanding Performance Stock Awards then held by the Participant that have not vested as of such termination will be terminated and forfeited.

9.4.       Modification of Rights Upon Termination. Notwithstanding the other provisions of this Section 9, the Committee may, in its sole discretion (which may be exercised in connection with the grant or after the date of grant, including following such termination), determine that upon a Participant’s termination of employment or other service with the Company and all Subsidiaries, any Options (or any part thereof) then held by such Participant may become or continue to become exercisable and/or remain exercisable following such termination of employment or service, and Restricted Stock Awards and Performance Stock Awards then held by such Participant may vest and/or continue to vest or become free of restrictions and conditions to issuance, as the case may be, following such termination of employment or service, in each case in the manner determined by the Committee.

9.5.       Effects of Actions Constituting Cause. Notwithstanding anything in the Plan to the contrary, in the event that a Participant is determined by the Committee, retirementacting in its sole discretion, to have committed any action which would constitute Cause as defined in Section 2.3, irrespective of whether such action or the Committee’s determination occurs before or after attaining both 59 1/2 yearstermination of age and five years of continuoussuch Participant’s employment or service with the Company and/or any Subsidiary, all rights of the Participant under the Plan and any agreements evidencing an Incentive Award then held by the Participant shall terminate and be forfeited without notice of any kind. The Company may defer the exercise of any Option or the vesting of any Restricted Stock Award for a subsidiary or division, or,period of up to ninety (90) days in order for the Committee to make any determination as to the extent providedexistence of Cause.

9.6.       Determination of Termination of Employment or Other Service. Unless the Committee otherwise determines in its sole discretion, a Participant’s employment or other service will, for purposes of the agreement, a “change in control”Plan, be deemed to have terminated on the date recorded on the personnel or other records of the Company (as defined in such agreement), except toor the extentSubsidiary for which the Participant provides employment or service, as determined by the Committee in its sole discretion findsbased upon such records.

10.Payment of Withholding Taxes.

10.1.       General Rules. The Company is entitled to (a) withhold and deduct from future wages of the Participant (or from other amounts that may be due and owing to the Participant from the Company or a Subsidiary), or make other arrangements for the collection of, all legally required amounts necessary to satisfy any and all federal, foreign, state and local withholding and employment-related tax requirements attributable to an Incentive Award, including, without limitation, the grant, exercise or vesting of, or payment of dividends with respect to, an Incentive Award or a disqualifying disposition of stock received upon exercise of an Incentive Stock Option, or (b) require the Participant promptly to remit the amount of such forfeiture might notwithholding to the Company before taking any action, including issuing any shares of Common Stock, with respect to an Incentive Award.

10.2.       Special Rules. The Committee may, in its sole discretion and upon terms and conditions established by the Committee, permit or require a Participant to satisfy, in whole or in part, any withholding or employment-related tax obligation described in Section 10.1 of the Plan by electing to tender, or by attestation as to ownership of, Previously Acquired Shares that have been held for the period of time necessary to avoid a charge to the Company’s earnings for financial reporting purposes and that are otherwise acceptable to the Committee, by delivery of a Broker Exercise Notice or a combination of such methods. For purposes of satisfying a Participant’s withholding or employment-related tax obligation, Previously Acquired Shares tendered or covered by an attestation will be valued at their Fair Market Value.

11.Change in Control.

11.1.       A “Change in Control” shall be deemed to have occurred if the best interestsevent set forth in any one of the following paragraphs has occurred:

(a)       the sale, lease, exchange or other transfer, directly or indirectly, of substantially all of the assets of the Company (in one transaction or in a series of related transactions) to any Successor;

(b)       the approval by the stockholders of the Company of any plan or proposal for the liquidation or dissolution of the Company;

(c)       any Successor (as defined in Section 11.2 below), other than a Bona Fide Underwriter (as defined in Section 11.2 below), becomes after the effective date of the Plan the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of (i) 25% or more, but not 50% or more, of the combined voting power of the Company’s outstanding securities ordinarily having the right to vote at elections of directors, unless the transaction resulting in such ownership has been approved in advance by the Continuity Directors (as defined in Section 11.2 below), or (ii) more than 50% of the combined voting power of the Company’s outstanding securities ordinarily having the right to vote at elections of directors (regardless of any approval by the Continuity Directors);

(d)       a merger or consolidation to which the Company is a party if the stockholders of the Company immediately prior to effective date of such merger or consolidation have “beneficial ownership” (as defined in Rule 13d-3 under the Exchange Act), immediately following the effective date of such merger or consolidation, of securities of the surviving corporation representing (i) 50% or more, but not more than 80%, of the combined voting power of the surviving corporation’s then outstanding securities ordinarily having the right to vote at elections of directors, unless such merger or consolidation has been approved in advance by the Continuity Directors, or (ii) less than 50% of the combined voting power of the surviving corporation’s then outstanding securities ordinarily having the right to vote at elections of directors (regardless of any approval by the Continuity Directors); or

(e)       the Continuity Directors cease for any reason to constitute at least 50% or more of the Board.

11.2.Change in Control Definitions. For purposes of this Section 11:

(a)       “Continuity Directors” of the Company will mean any individuals who are members of the Board on the effective date of the Plan and therefore, waivesany individual who subsequently becomes a member of the Board whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the Continuity Directors (either by specific vote or by approval of the Company’s proxy statement in which such individual is named as a nominee for director without objection to such nomination).

(b)       “Bona Fide Underwriter” means an entity engaged in business as an underwriter of securities that acquires securities of the Company through such entity’s participation in good faith in a firm commitment underwriting until the expiration of 40 days after the date of such acquisition.

(c)       “Successor” means any individual, corporation, partnership, group, association or other “person,” as such term is used in Section 13(d) or Section 14(d) of the Exchange Act, other than the Company, any “affiliate” (as defined below) or any benefit plan(s) sponsored by the Company or any affiliate that succeeds to, or has the practical ability to control (either immediately or solely with the passage of time), the Company’s business directly, by merger, consolidation or other form of business combination, or indirectly, by purchase of the Company’s outstanding securities ordinarily having the right to vote at the election of directors or all or partsubstantially all of its assets or otherwise. For this purpose, an “affiliate” is (i) any corporation at least a majority of whose outstanding securities ordinarily having the applicationright to vote at elections of this provision todirectors is owned directly or indirectly by the restricted stock held by such recipient. Certificates for restricted stock shall be registeredCompany; (ii) any other form of business entity in the name of the recipient but shall be imprinted with the appropriate legend and returned towhich the Company, by virtue of a direct or indirect ownership interest, has the recipient, together withright to elect a stock power endorsedmajority of the members of such entity’s governing body or (iii) any entity that at the time of the approval of this Plan owns in blank byexcess of 10% of the recipient. The recipient shall be entitled to vote shares of restrictedCompany’s common stock and shall be entitled to all dividends paid thereon, except that dividends paid in Common Stock or other property shall also be subject toits affilates.

11.3.       Acceleration of Vesting. Without limiting the same restrictions.


(B) Restricted Stock shall become freeauthority of the foregoing restrictions upon expirationCommittee under Sections 3.2 and 4.3 of the applicable Restriction Period andPlan, if a Change in Control of the Company shalloccurs, then, deliver to the recipient Common Stock certificates evidencing such stock. Restricted stock and any Common Stock received upon the expiration of the restriction period shall be subject to such other transfer restrictions and/or legend requirements as are specified in the applicable agreement.

(j) Bonuses and Past Salaries and Fees Payable in Unrestricted Stock.

(A) In lieu of cash bonuses otherwise payable under the Company’s or applicable division’s or subsidiary’s compensation practices to employees and consultants eligible to participate in this Plan,if approved by the Committee in its sole discretion may determineeither in an agreement evidencing an Incentive Award at the time of grant or at any time after the grant of an Incentive Award: (a) all Options that such bonuses shall be payablehave been outstanding for at least six months will become immediately exercisable in restricted or unrestricted Commonfull and will remain exercisable in accordance with their terms; (b) all Restricted Stock or partly in Common StockAwards that have been outstanding for at least six months will become immediately fully vested and partly in cash. Such bonuses shall be in consideration of services previously performednon-forfeitable; and as an incentive toward future services and shall consist(c) any conditions to the issuance of shares of unrestrictedCommon Stock pursuant to Performance Stock Awards that have been outstanding for at least six months will lapse.

11.4.       Cash Payment. If a Change in Control of the Company occurs, then the Committee, if approved by the Committee in its sole discretion either in an agreement evidencing an Incentive Award at the time of grant or at any time after the grant of an Incentive Award, and without the consent of any Participant affected thereby, may determine that:

(a)       Some or all Participants holding outstanding Options will receive, with respect to some or all of the shares of Common Stock subject to such termsOptions (“Option Shares”), either (i) as of the effective date of any such Change in Control, cash in an amount equal to the excess of the Fair Market Value of such Option Shares on the last business day prior to the effective date of such Change in Control over the exercise price per share of such Option Shares, (ii) immediately prior to such Change of Control, a number of shares of Common Stock having an aggregate Fair Market Value equal to the excess of the Fair Market Value of the Option Shares as of the last business day prior to the effective date of such Change in Control over the exercise price per share of such Option Shares; or (iii) any combination of cash or shares of Common Stock with the amount of each component to be determined by the Committee not inconsistent with the foregoing clauses (i) and (ii), as proportionally adjusted; and

(b)       any Options which, as of the effective date of any such Change in Control, are “underwater” (as defined in Section 3.2(d)) shall terminate as of the effective date of any such Change in Control; and

(c)       some or all Participants holding Performance Stock Awards will receive, with respect to some or all of the shares of Common Stock subject to such Performance Stock Awards that remain subject to issuance based upon the future achievement of Performance Criteria as of the effective date of any such Change in Control of the Company, cash in an amount equal the Fair Market Value of such shares immediately prior to the effective date of such Change in Control.

11.5.       Limitation on Change in Control Payments. Notwithstanding anything in Section 11.3 or 11.4 of the Plan to the contrary, if, with respect to a Participant, the acceleration of the exercisability of an Option as provided in Section 11.3 or the payment of cash or shares of Common Stock in exchange for all or part of an Option as provided in Section 11.4 (which acceleration or payment could be deemed a “payment” within the meaning of Section 280G(b)(2) of the Code), together with any other “payments” that such Participant has the right to receive from the Company or any corporation that is a member of an “affiliated group” (as defined in Section 1504(a) of the Code without regard to Section 1504(b) of the Code) of which the Company is a member, would constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code), then the “payments” to such Participant pursuant to Section 11.3 or 11.4 of the Plan will be reduced to the largest amount as will result in no portion of such “payments” being subject to the excise tax imposed by Section 4999 of the Code; provided, however, that if a Participant is subject to a separate agreement with the Company or a Subsidiary which specifically provides that payments attributable to one or more forms of employee stock incentives or to payments made in lieu of employee stock incentives will not reduce any other payments under such agreement, even if it would constitute an excess parachute payment, or provides that the Participant will have the discretion to determine which payments will be reduced in order to avoid an excess parachute payment, then the limitations of this Section 11.4 will, to that extent, not apply.

12.Rights of Eligible Recipients and Participants; Transferability.

12.1.       Employment or Service. Nothing in the Plan will interfere with or limit in any way the right of the Company or any Subsidiary to terminate the employment or service of any Eligible Recipient or Participant at any time, nor confer upon any Eligible Recipient or Participant any right to continue in the employ or service of the Company or any Subsidiary.

12.2.       Rights as a Stockholder. As a holder of Incentive Awards (other than Restricted Stock Awards), a Participant will have no rights as a stockholder unless and until such Incentive Awards are exercised for, or paid in the form of, shares of Common Stock and the Participant becomes the holder of record of such shares. Except as otherwise provided in the Plan, no adjustment will be made for dividends or distributions with respect to such Incentive Awards as to which there is a record date preceding the date the Participant becomes the holder of record of such shares, except as the Committee may determine in its sole discretion. The number of shares of unrestricted Common Stock payable in lieu of a bonus otherwise payable shall be determined by dividing such bonus amount by the fair market value of one share of Common Stock

12.3.       Restrictions on the date the bonus is payable, with fair market value determined as of such date in accordance with Section 6(b)Transfer. In the event restricted Common Stock is issued in lieu of a bonus, a discount to fair market value may be taken at the discretion of the Committee.

(B) In lieu of salaries and fees otherwise payable by the Company’s to employees, attorneys and consultants eligible to participate in this Plan that were incurred for services rendered during 2004, the Committee, in its sole discretion, may determine that such unpaid salaries and fees shall be payable in restricted or unrestricted Common Stock or partly in Common Stock and partly in cash. Such awards shall be in consideration of services previously performed and as an incentive toward future services and shall consist of shares of unrestricted Common Stock subject to such terms as the Committee may determine in its sole discretion. The number of shares of unrestricted Common Stock payable in lieu of salaries and fees otherwise payable shall be determined by dividing each calendar month’s of unpaid salary or fee amount by the average trading value of the Common Stock for the calendar month during which the subject services were provided. In the event restricted Common Stock is issued in lieu of salary, a discount to fair market value may be taken at the discretion of the Committee.

(k) No Rights as Stockholder.
No Participant shall have any rights as a stockholder with respect to shares covered by an option until the option is exercised by the written notice and accompanied by payment as provided in clause (d) above.

(l) Extraordinary Corporate Transactions.
The existence of outstanding options shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations, exchanges, or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company, or any issuance of Common Stock or other securities or subscription rights thereto, or any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. If the Company recapitalizes or otherwise changes its capital structure, or merges, consolidates, sells all of its assets or dissolves (each of the foregoing a “Fundamental Change”), then thereafter upon any exercise of an option theretofore granted the Participant shall be entitled to purchase under such option, in lieu of the number of Shares as to which option shall then be exercisable, the number and class of Shares and other securities to which the Participant would have been entitled

(a)       Except pursuant to the terms of the Fundamental Change if, immediately prior to such Fundamental Change, the Participant had been the holder of record of the number of Shares as to which such option is then exercisable. If (i) the Company shall not be the surviving entity in any merger or consolidation (or survives only as a subsidiary of another entity), (ii) the Company sells all or substantially all of its assets to any other person or entity (other than a wholly-owned subsidiary), (iii) any person or entity (including a “group” as contemplated by Section 13(d)(3) of the Exchange Act) acquires or gains ownership or control of (including, without limitation, power to vote) more than 50% of the outstanding Shares, (iv) the Company is to be dissolved and liquidated, or (v) as a result of or in connection with a contested election of directors, the persons who were directors of the Company before such election shall cease to constitute a majority of the Board (each such event in clauses (i) through (v) above is referred to herein as a “Corporate Change”), the Committee, in its sole discretion, may accelerate the time at which all or a portion of a Participant’s options may be exercised for a limited period of time before or after a specified date.


(m) Changes in Company’s Capital Structure.
If the outstanding Shares or other securities of the Company, or both, for which the option is then exercisable shall at any time be changed or exchanged by declaration of a stock dividend, stock split, combination of shares, recapitalization, or reorganization, the number and kind of Shares or other securities which are subject to the Plan or subject to any options theretofore granted, and the option prices, shall be appropriately and equitably adjusted so as to maintain the proportionate number of shares or other securities without changing the aggregate option price.
(n) Acceleration of Options.
Except as hereinbefore expressly provided, (i) the issuance by the Company of Shares or any class of securities convertible into Shares of any class, for cash, property, labor or services, upon direct sale, upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, (ii) the payment of a dividend in property other than Common Stock or (iii) the occurrence of any similar transaction, and in any case whether or not for fair value, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number of Shares subject to options theretofore granted or the purchase price per share, unless the Committee shall determine, in its sole discretion, that an adjustment is necessary to provide equitable treatment to Participant. Notwithstanding anything to the contrary contained in this Plan, the Committee may, in its sole discretion, accelerate the time at which any option may be exercised, including, but not limited to, upon the occurrence of the events specified in this Section 6, and is authorized at any time (with the consent of the Participant) to purchase options pursuant to Section 7.

SECTION 7. RELINQUISHMENT OF OPTIONS.
(a) The Committee, in granting options hereunder, shall have discretion to determine whether or not options shall include a right of relinquishment as hereinafter provided by this Section 7. The Committee shall also have discretion to determine whether an option agreement evidencing an option initially granted by the Committee without a right of relinquishment shall be amended or supplemented to include such a right of relinquishment. Neither the Committee nor the Company shall be under any obligation or incur any liability to any person by reason of the Committee’s refusal to grant or include a right of relinquishment in any option granted hereunder or in any option agreement evidencing the same. Subject to the Committee’s determination in any case that the grant by it of a right of relinquishment is consistent with Section 1 hereof, any option granted under this Plan, and the option agreement evidencing such option, may provide:

(i) That the Participant, or his or her heirs or other legal representatives to the extent entitled to exercise the option under the terms thereof, in lieu of purchasing the entire number of shares subject to purchase thereunder, shall have the right to relinquish all or any part of the then unexercised portion of the option (to the extent then exercisable) for a number of Shares to be determined in accordance with the following provisions of this clause (i):

(A) The written notice of exercise of such right of relinquishment shall state the percentage of the total number of Shares issuable pursuant to such relinquishment (as defined below) that the Participant elects to receive;

(B) The number of Shares, if any, issuable pursuant to such relinquishment shall be the number of such shares, rounded to the next greater number of full shares, as shall be equal to the quotient obtained by dividing (i) the Appreciated Value by (ii) the purchase price for each of the Shares specified in such option; (x) the total current market value of the Shares covered by the option or the portion thereof to be relinquished over (y) the total purchase price for such shares specified in such option;

(ii) That such right of relinquishment may be exercised only upon receipt by the Company of a written notice of such relinquishment which shall be dated the date of election to make such relinquishment; and that, for the purposes of this Plan, such date of election shall be deemed to be the date when such notice is sent by registered or certified mail, or when receipt is acknowledged by the Company, if mailed by other than registered or certified mail or if delivered by hand or by any telegraphic communications equipment of the sender or otherwise delivered, provided, that, in the event the method just described for determining such date of election shall not be or remain consistent with the provisions of Section 16(b) of the Exchange Act or the rules and regulations adopted by the Commission thereunder, as presently existing or as may be hereafter amended, which regulations exempt from the operation of Section 16(b) of the Exchange Act in whole or in part any such relinquishment transaction, then such date of election shall be determined by such other method consistent with Section 16(b) of the Exchange Act or the rules and regulations thereunder as the Committee shall in its discretion select and apply;
(iii) That the “current market value” of a share of Common Stock on a particular date shall be deemed to be its fair market value on that date as determined in accordance with Paragraph 6(b); and

(iv) That the option, or any portion thereof, may be relinquished only to the extent that (A) it is exercisable on the date written notice of relinquishment is received by the Company, and
(B) the holder of such option pays, or makes provision satisfactory to the Company for the payment of, any taxes which the Company is obligated to collect with respect to such relinquishment.

(b) The Committee shall have sole discretion to consent to or disapprove, and neither the Committee nor the Company shall be under any liability by reason of the Committee’s disapproval of, any election by a holder of an option to relinquish such option in whole or in part as provided in Paragraph 7(a), except that no such consent to or approval of a relinquishment shall be required under the following circumstances. Each Participant who is subject to the short-swing profits recapture provisions of Section 16(b) of the Exchange Act (“Covered Participant”) shall not be entitled to receive Shares when options are relinquished during any window period commencing on the third business day following the Company’s release of a quarterly or annual summary statement of sales and earnings and ending on the twelfth business day following such release (“Window Period”). A Covered Participant shall be entitled to receive Shares upon the relinquishment of options outside a Window Period.

(c) The Committee, in granting options hereunder, shall have discretion to determine the terms upon which such options shall be relinquishable, subject to the applicable provisions of this Plan, and including such provisions as are deemed advisable to permit the exemption from the operation from Section 16(b) of the Exchange Act of any such relinquishment transaction, and options outstanding, and option agreements evidencing such options, may be amended, if necessary, to permit such exemption. If an option is relinquished, such option shall be deemed to have been exercised to the extent of the number of Shares covered by the option or part thereof which is relinquished, and no further options may be granted covering such Shares.

(d) Neither any option nor any right to relinquish the same to the Company as contemplated by this Paragraph 7 shall be assignable or otherwise transferable except bytestamentary will or the laws of descent and distribution or pursuant to a qualified domestic relations order as defined in the Code or Title I of the Employee Retirement Income Security Act, as amended, or the rules thereunder.

(e) Except as provided in Section 7(f)otherwise expressly permitted by subsections (b) and (c) below, no right of relinquishment may be exercised within the first six months after the initial award of any Option containing, or the amendment or supplementation of any existing option agreement adding, the right relinquishment.

(f) No right of relinquishment may be exercised after the initial award of any option containing, or the amendment or supplementation of any existing option agreement adding the right of relinquishment, unless such right of relinquishment is effective upon the Participant’s death, disability or termination of his relationship with the Company for a reason other than “for cause.”
SECTION 8. AMENDMENTS OR TERMINATION.
The Board may amend, alter or discontinue the Plan, but no amendment or alteration shall be made which would impair the rightsinterest of any Participant without his consent, underin an Incentive Award prior to the exercise (in the case of Options) or vesting (in the case of Restricted Stock Awards) of such Incentive Award will be assignable or transferable, or subjected to any option theretofore granted, or which, withoutlien, during the approvallifetime of the stockholders, would: (i) except as is providedParticipant, either voluntarily or involuntarily, directly or indirectly, by operation of law or otherwise.

(b)       A Participant will be entitled to designate a beneficiary to receive an Incentive Award upon such Participant’s death, and in Section 6(k)the event of such Participant’s death, payment of any amounts due under the Plan increasewill be made to, and exercise of any Options (to the total number of shares reserved for the purposes of the Plan (exceptextent permitted pursuant to Section 39 of the Plan), (ii) change may be made by, such beneficiary. If a deceased Participant has failed to designate a beneficiary, or if a beneficiary designated by the classParticipant fails to survive the Participant, payment of persons eligible to participate inany amounts due under the Plan as provided inwill be made to, and exercise of any Options (to the extent permitted pursuant to Section 49 of the Plan, (iii) extendPlan) may be made by, the applicable maximum option period provided for in Section 6(a)Participant’s legal representatives, heirs and legatees. If a deceased Participant has designated a beneficiary and such beneficiary survives the Participant but dies before complete payment of the Plan, (iv) extend the expiration date of this Plan set forth in Section 15 of the Plan, (v) except as provided in Section 6(k) of the Plan, decrease the option price of any option grantedall amounts due under the Plan or (vi) withdrawexercise of all exercisable Options, then such payments will be made to, and the administrationexercise of such Options may be made by, the legal representatives, heirs and legatees of the Plan frombeneficiary.

(c)       Upon a Participant’s request, the Committee.


SECTION 9. COMPLIANCE WITH OTHER LAWS AND REGULATIONS.
The Plan, the grant and exerciseCommittee may, in its sole discretion, permit a transfer of options thereunder, and the obligationall or a portion of a Non-Statutory Stock Option, other than for value, to such Participant’s child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, any person sharing such Participant’s household (other than a tenant or employee), a trust in which any of the Company to sellforegoing have more than fifty percent of the beneficial interests, a foundation in which any of the foregoing (or the Participant) control the management of assets, and deliver shares under such options, shall beany other entity in which these persons (or the Participant) own more than fifty percent of the voting interests. Any permitted transferee will remain subject to all the terms and conditions applicable federal and state laws, rules and regulations and to such approvals by any governmental or regulatory agency as may be required. The Company shall not be required to issue or deliver any certificates for Sharesthe Participant prior to the completion of any registration or qualification oftransfer. A permitted transfer may be conditioned upon such shares under any federal or state law or issuance of any ruling or regulation of any government body whichrequirements as the Company shall,Committee may, in its sole discretion, determine, including, but not limited to be necessary execution and/or advisable. Any adjustments provided for in subparagraphs 6(j), (k) and (i) shall be subject to any shareholder action required by Delaware corporate law.

SECTION 10. PURCHASE FOR INVESTMENT.
Unless the options and Shares covered by this Plan have been registered under the Securities Actdelivery of 1933, as amended, and the Company has determined that such registration is unnecessary, each person acquiringappropriate acknowledgements, opinion of counsel, or exercising an option under this Plan may be requiredother documents by the Company to give a representation in writing that he or she is acquiring such option or such shares for his own account for investment and not with a view to, or for sale in connection with, the distribution of any part thereof.

SECTION 11. TAXES.
transferee.

(a) The Company may, but is not obligated to, make such provisions as it may deem appropriate for the withholding of any taxes which it determines is required in connection with any options granted under this Plan.


(b) Notwithstanding the terms of Paragraph 11 (a), any Participant may pay all or any portion12.4.       Non-Exclusivity of the taxes required to be withheld by the Company or paid by him or her in connection with the exercise of a Nonqualified Option by electing to have the Company withhold Shares, or by delivering previously owned Shares, having a fair market value, determined in accordance with Paragraph 6(b), equal to the amount required to be withheld or paid. A Participant must make the foregoing election on or before the date that the amount of tax to be withheld is determined (“Tax Date”)Plan. All such elections are irrevocable and subject to disapproval by the Committee. Elections by Covered Participants are subject to the following additional restrictions: (i) such election may not be made within six months of the grant of an option, provided that this limitation shall not applyNothing contained in the event of deathPlan is intended to modify or disability, and (ii) such election must be made either six monthsrescind any previously approved compensation plans or more prior to the Tax Date or in a Window Period. Where the Tax Date in respect of an option is deferred until six months after exercise and the Covered Participant elects share withholding, the full amount of Shares will be issued or transferred to him upon exercise of the option, but he or she shall be unconditionally obligated to tender back to the Company the number of shares necessary to discharge the Company’s withholding obligation or his estimated tax obligation on the Tax Date.
SECTION 12. REPLACEMENT OF OPTIONS.
The Committee from time to time may permit a Participant under the Plan to surrender for cancellation any unexercised outstanding option and receive from the Company in exchange an option for such number of Shares as may be designated by the Committee. The Committee may, with the consent of the person entitled to exercise any outstanding option, amend such option, including reducing the exercise price of any option to not less than the fair market value of the Common Stock at the time of the amendment and extending the term thereof.

SECTION 13. NO RIGHT TO COMPANY EMPLOYMENT.
Nothing in this Plan or as a result of any option granted pursuant to this Plan shall confer on any Participant any right to continue in the employprograms of the Company or interfere in any way with the right of the Company to terminate any Participant's employment at any time. The option agreements may, but is not obligated, contain such provisions as the Committee may approve with reference to the effect of approved leaves of absence.

SECTION 14. LIABILITY OF COMPANY.
The Company and any Affiliate which is in existence or hereafter comes into existence shall not be liable to a Participant or other persons as to:

(a) The Non-Issuance of Shares.
The non-issuance or sale of Shares as to which the Company has been unable to obtain from any regulatory body having jurisdiction the authority deemed by the Company’s counsel to be necessary to the lawful issuance of any Shares hereunder; and

(b) Tax Consequences.
Any tax consequence expected, but not realized, by any Participant or other person due to the exercise of any option granted hereunder.

SECTION 15. EFFECTIVENESS AND EXPIRATION OF PLAN.
The Plan shall be effective on the date the Board adopts the Plan. If the stockholders of the Company fail to approve the Plan within twelve months of the date the Board approved the Plan, the Plan shall terminate and all options previously granted under the Plan shall become void and of no effect. The Plan shall expire ten years after the date the Board approves the Plan and thereafter no option shall be granted pursuant to the Plan.

SECTION 16. NON-EXCLUSIVITY OF THE PLAN.
Neither the adoption by the Board nor the submission of the Plan to the stockholders of the Company for approval shall be construed as creatingcreate any limitations on the power or authority of the Board to adopt such additional or other incentivecompensation arrangements as itthe Board may deem desirable, including without limitation,necessary or desirable.

13.Securities Law and Other Restrictions.

Notwithstanding any other provision of the grantingPlan or any agreements entered into pursuant to the Plan, the Company will not be required to issue any shares of restricted stockCommon Stock under this Plan, and a Participant may not sell, assign, transfer or stock options otherwise thandispose of shares of Common Stock issued pursuant to Incentive Awards granted under the Plan, unless (a) there is in effect with respect to such shares a registration statement under the Securities Act and any applicable securities laws of a state or foreign jurisdiction or an exemption from such arrangementsregistration under the Securities Act and applicable state or foreign securities laws, and (b) there has been obtained any other consent, approval or permit from any other U.S. or foreign regulatory body which the Committee, in its sole discretion, deems necessary or advisable. The Company may condition such issuance, sale or transfer upon the receipt of any representations or agreements from the parties involved, and the placement of any legends on certificates representing shares of Common Stock, as may be either generallydeemed necessary or advisable by the Company in order to comply with such securities law or other restrictions.

14.Plan Amendment, Modification and Termination.

The Board may suspend or terminate the Plan or any portion thereof at any time, and may amend the Plan from time to time in such respects as the Board may deem advisable in order that Incentive Awards under the Plan will conform to any change in applicable laws or applicable onlyregulations or in specific cases.


SECTION 17. GOVERNING LAW.
Thisany other respect the Board may deem to be in the best interests of the Company; provided, however, that no such amendments to the Plan will be effective without approval of the Company’s stockholders if: (i) stockholder approval of the amendment is then required pursuant to Section 422 of the Code or the rules of any stock exchange or the NASDAQ Global Select, Global or Capital Market or similar regulatory body; or (ii) such amendment seeks to modify Section 3.2(d) hereof. No termination, suspension or amendment of the Plan may adversely affect any outstanding Incentive Award without the consent of the affected Participant; provided, however, that this sentence will not impair the right of the Committee to take whatever action it deems appropriate under Sections 3.2(c), 4.3 and 11 of the Plan.

15.Effective Date and Duration of the Plan.

The Plan is effective as of the Effective Date. The Plan will terminate at midnight on December 6, 2027, and may be terminated prior to such time by Board action. No Incentive Award will be granted after termination of the Plan. Incentive Awards outstanding upon termination of the Plan may continue to be exercised, or become free of restrictions, according to their terms.

16.Miscellaneous.

16.1.       Governing Law. Except to the extent expressly provided herein or in connection with other matters of corporate governance and authority (all of which shall be governed by the laws of the Company’s jurisdiction of incorporation), the validity, construction, interpretation, administration and effect of the Plan and any agreements hereunder shallrules, regulations and actions relating to the Plan will be interpretedgoverned by and construed exclusively in accordance with the internal laws of the State of Delaware without reference to choicenotwithstanding the conflicts of law principalslaws principles of any jurisdictions.

16.2.       Successors and applicable federal law.

SECTION 18. CASHLESS EXERCISE.
Assigns. The Committee also may allow cashless exercises as permitted under Federal Reserve Board’s Regulation T, subject to applicable securities law restrictions or by any other means which the Committee determines toPlan will be consistent with the Plan’s purposebinding upon and applicable law.

SECTION 19. PROCEEDS FROM EXERCISE
The proceeds from such exercise of options under the Plan shall be addedinure to the general fundsbenefit of the successors and permitted assigns of the Company and shall be used for general corporate purposes.the Participants.


IN WITNESS WHEREOF, and as conclusive evidence of the adoption of the foregoing by directors of the Company, Coda Octopus Group, Inc., has caused these presents to be duly executed in its name and behalf by its proper officers thereunto duly authorized as of this [ ] 2008.



CODA OCTOPUS GROUP, INC.

By: _________________________Jason Reid

Its: President


By: _________________________Richard Lewis

Its: Secretary