UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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1934
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
ZW DATA ACTION TECHNOLOGIES INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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ZW DATA ACTION TECHNOLOGIES INC.
Room 1811, Xinghuo Keji Plaza, No. 2 Fengfu Road
Fengtai District
Beijing, PRC 100070
___________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held on October 18, 2023
___________
TO THE STOCKHOLDERS OF ZW DATA ACTION TECHNOLOGIES INC.:
The Annual Meeting of the stockholders of ZW Data Action
Technologies Inc., a Nevada corporation (the “Company”), will be held on October 18, 2023, at 10:00 a.m. local time, at 10th Floor,
Tower A, No. 68 First Helong Road, Baiyun District, Guangzhou City, Guangdong Province, PRC 510440, for the following purposes:
1. |
To elect five (5) directors (Proposal 1); |
2. |
To ratify the appointment of ARK Pro CPA & Co., as the Company’s independent accountants, for the fiscal year ending December 31, 2023 (Proposal 2); |
3. |
To conduct an advisory vote to approve the compensation paid to the Company’s named executive officers, as disclosed under the caption Election of Directors – Executive Compensation (Proposal 3); |
4. |
To amend the Company’s articles of incorporation, as amended, to increase the number of the Company’s authorized shares of common stock from 20,000,000 to 50,000,000 (Proposal 4); |
5. |
To ratify the Company’s 2023 Omnibus Equity Incentive Plan (Proposal 5); and |
6. |
To transact any other business as may properly be presented at the Annual Meeting or any adjournment thereof. |
A proxy statement, providing information, and a form of
proxy to vote, with respect to the foregoing matters accompany this notice.
|
By Order of the Board of Directors, |
|
/s/ Handong Cheng |
|
Handong Cheng |
|
Chairman of the Board, Chief Executive Officer and President |
Dated: September 7, 2023
Important Notice Regarding Availability of Proxy Materials for the Stockholders
Meeting
To Be Held on October 18, 2023.
The Proxy Statement and the Company’s annual report to Stockholders are available at the Company’s
website, www.zdat.com.
IMPORTANT
Whether or not you expect to attend the Annual Meeting, please complete,
date, and sign the accompanying proxy, and return it promptly in the enclosed return envelope. If you grant a proxy, you may revoke it
at any time prior to the Annual Meeting, vote a subsequent proxy, or vote in person at the Annual Meeting.
PLEASE NOTE: If your shares are held in street name, your broker, bank,
custodian, or other nominee holder cannot vote your shares in the election of directors (Proposal 1) or with respect to Proposal 3, Proposal
4 and Proposal 5, unless you direct the nominee holder how to vote, by marking your proxy card.
ZW DATA ACTION TECHNOLOGIES INC.
Room 1811, Xinghuo Keji Plaza, No. 2 Fengfu Road
Fengtai District, Beijing, PRC 100070
___________
PROXY STATEMENT
for
Annual Meeting of Stockholders
to be held on October 18, 2023
PROXY SOLICITATION
ZW Data Action Technologies Inc., a Nevada corporation
(the “Company”) is soliciting proxies on behalf of the Board of Directors of the Company (the “Board”) in connection
with the annual meeting of stockholders on October 18, 2023 and at any adjournment thereof. The Company will bear the entire cost of preparing,
assembling, printing and mailing this Proxy Statement, the accompanying proxy, and any additional material that may be furnished to stockholders.
Proxies also may be solicited through the mails or direct communication with certain stockholders or their representatives by the Company’s
officers, directors, or employees, who will receive no additional compensation therefor.
September , 2023 is the approximate
date on which this Proxy Statement and the accompanying form of proxy are first being sent to stockholders.
GENERAL INFORMATION ABOUT VOTING
Record Date, Outstanding Shares, and Voting Rights
As of September 15, 2023, the record date for the meeting,
the Company had outstanding 7,204,506 shares of common stock, par value $0.001 per share (the “Common Stock”) being the class
of stock entitled to vote at the meeting. Each share of Common Stock entitles its holder to one vote.
Procedures for Voting or Revoking Proxies
You may vote your proxy by completing, dating, signing,
and mailing the accompanying form of proxy in the return envelope provided. The persons authorized by any of those means to vote your
shares will vote them as you specify or, in absence of your specification, as stated on the form of proxy. Abstentions and broker non-votes
represented by submitted proxies will be included in the calculation of the number of the shares present at the Annual Meeting for the
purposes of determining a quorum. “Broker non-votes” means shares held of record by a broker that are not voted because the
broker has not received voting instructions from the beneficial owner of the shares and either lacks or declines to exercise the authority
to vote the shares in its discretion. You may revoke any proxy by notifying the Company in writing at the above address, ATTN: Secretary,
or by voting a subsequent proxy or in person at the meeting.
Proposal One. Directors are elected by a plurality, and
the nominees who receive the most votes will be elected. Proposal One is considered a “non-routine” matter under NASDAQ Stock
Market (“NASDAQ”) rules, and, accordingly, brokerage firms and nominees do not have the authority to vote their clients’
unvoted shares on Proposal One or to vote their clients’ shares if the clients have not furnished voting instructions within a specified
period of time prior to the Annual Meeting. Abstentions and broker non-votes will not be counted as votes cast and will have no effect
on the outcome of the vote on Proposal One.
Proposal Two. To be approved, the ratification of ARK Pro CPA
& Co. as the Company’s independent accountants must receive the affirmative vote of the majority of the shares of Common Stock
present in person or by proxy and cast at the Annual Meeting. Proposal Two is considered a “routine” matter under NASDAQ rules,
and, accordingly, brokerage firms and nominees have the authority to vote their clients’ unvoted shares on Proposal Two as well
as to vote their clients’ shares where the clients have not furnished voting instructions within a specified period of time prior
to the Annual Meeting. Abstentions and broker non-votes will not be counted as votes cast and will have no effect on the outcome of the
vote on Proposal Two.
Proposal Three. To be approved, the proposal regarding
the Company's executive compensation for the fiscal year ended December 31, 2022 must receive the affirmative vote of the majority of
the shares of Common Stock present in person or by proxy and cast at the Annual Meeting. Proposal Three is considered a "non-routine"
matter under NASDAQ rules, and, accordingly, brokerage firms and nominees do not have the authority to vote their clients' unvoted shares
on Proposal Three or to vote their clients' shares if the clients have not furnished voting instructions within a specified period of
time prior to the Annual Meeting. Abstentions and broker non-votes will not be counted as votes cast and will have no effect on the outcome
of the vote on Proposal Three. The vote on Proposal Three is advisory and therefore not binding on the Company, the Compensation Committee
or the Board of Directors. Although non-binding, the Board of Directors values the opinions that the stockholders express in their votes,
and the votes will provide information to the Compensation Committee regarding investor sentiment about the Company's executive compensation
philosophy, policies and practices, which the Compensation Committee will be able to consider when determining executive compensation
in the future.
Proposal Four. To be approved, the proposal regarding the
Company's proposed increase in number of the Company’s authorized shares of Common Stock must receive the affirmative vote of the
majority of issued and outstanding shares of Common Stock. Proposal Four is considered a "non-routine" matter under NASDAQ rules,
and, accordingly, brokerage firms and nominees do not have the authority to vote their clients' unvoted shares on Proposal Four or to
vote their clients' shares if the clients have not furnished voting instructions within a specified period of time prior to the Annual
Meeting. Abstentions and broker non-votes will not be counted as votes cast and will have no effect on the outcome of the vote on Proposal
Four.
Proposal Five. To be approved, the proposal to ratify the
Company’s 2023 Equity Incentive Plan must receive the affirmative vote of the majority of the shares of Common Stock present in
person or by proxy at the Annual Meeting and cast at the Annual Meeting. Proposal Five is considered a "non-routine" matter
and, accordingly, brokerage firms and nominees do not have the authority to vote their clients' unvoted shares on Proposal Five or to
vote the clients' shares if the clients have not furnished voting instructions within a specified period of time prior to the Annual Meeting.
Abstentions and broker non-votes will not be counted as votes cast and will have no effect on the outcome of the vote on Proposal Five.
Attending the Meeting
You may obtain directions to the meeting at www.zdat.com
or by writing to the Company at the above address, ATTN: Secretary. If you attend the meeting, you may vote there in person, regardless
of whether you have voted by any of the other means mentioned in the preceding paragraph.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding
beneficial ownership of Common Stock, as of the record date of the meeting, by each of the Company’s directors and executive officers;
all executive officers and directors as a group, and each person known to the Company to own beneficially more than 5% of Company’s
Common Stock. Except as otherwise noted, the persons identified have sole voting and investment powers with respect to their shares.
|
|
Common Stock |
Name of Beneficial Owner (1) |
|
Number
of Shares |
|
Percent of
Class (2) |
Handong Cheng (3)(5) |
|
|
1,107,094 |
|
|
|
15.37 |
% |
George Kai Chu (6) |
|
|
96,947 |
|
|
|
1.35 |
% |
Zhiqing Chen (7) |
|
|
14,000 |
|
|
|
* |
|
Chang Qiu (8) |
|
|
60,000 |
|
|
|
* |
|
Pau Chung Ho |
|
|
- |
|
|
|
- |
|
All Directors and Executive Officers as a Group (5 persons) |
|
|
1,278,041 |
|
|
|
17.74 |
% |
Rise King Investments Limited (3)(4) |
|
|
588,396 |
|
|
|
8.17 |
% |
Zhige Zhang (3)(9) |
|
|
593,056 |
|
|
|
8.23 |
% |
Xuanfu Liu (3)(10) |
|
|
598,396 |
|
|
|
8.31 |
% |
____________________
* Less than one percent.
(1) The address of each director and executive officer
is c/o ZW Data Action Technologies Inc., Room 1811, Xinghuo Keji Plaza, No. 2 Fengfu Road, Fengtai District,
Beijing PRC 100070.
(2) Beneficial ownership is determined in accordance
with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of Common Stock subject
to securities anticipated to be exercisable or convertible at or within 60 days of September 15, 2023, are deemed outstanding for computing
the percentage of the person holding such option or warrant but are not deemed outstanding for computing the percentage of any other person.
The indication herein that shares are anticipated to be beneficially owned is not an admission on the part of the listed stockholder that
he, she or it is or will be a direct or indirect beneficial owner of those shares.
(3) Rise King Investments Limited (“Rise King”) is collectively owned by Handong
Cheng, Xuanfu Liu and Zhige Zhang. As a result, Mr. Cheng, Mr. Liu and Mr. Zhang may be deemed to be beneficial owners of the shares of
Common Stock held by Rise King. Each of Mr. Cheng, Mr. Liu and Mr. Zhang disclaim such beneficial ownership, and nothing herein shall
be deemed to be an admission that Mr. Cheng, Mr. Liu or Mr. Zhang is the beneficial owner of any such shares for any purpose. Information
regarding this beneficial owner is furnished in reliance upon the Form 4, dated August 18, 2015.
(4) The business address of Rise King Investments Limited
is P.O. Box 957, Offshore Incorporations Center, Road Town, Tortola, British Virgin Islands. Information regarding this beneficial owner
is furnished in reliance upon the Schedule 13D, dated July 6, 2009.
(5) Consists of (i) 588,396 shares of Common Stock owned
by Rise King and which are deemed to be beneficially owned by Mr. Cheng; and (ii) 518,698 shares of Common Stock owned directly by Mr.
Cheng.
(6) Consists of 96,947 shares of Common Stock.
(7) Consists of 14,000 shares of Common Stock.
(8) Consists of 60,000 shares of Common Stock.
(9) Consists of (i) 588,396 shares of Common Stock beneficially
owned by Rise King and which are deemed to be beneficially owned by Mr. Zhang; and (ii) 4,660 shares of Common Stock owned directly by
Mr. Zhang. The address of Mr. Zhang is 27th Floor, Yingdu Plaza, No. Jia 48, Zhichunlu, Haidian District, Beijing, PRC 100086.
(10) Consists of (i) 588,396 shares of Common Stock beneficially
owned by Rise King and which are deemed to be beneficially owned by Mr. Liu; and (ii) 10,000 shares of Common Stock owned directly by
Mr. Liu. The address of Mr. Liu is Building 6, Block 3, Hanwei Guoji Guangchang Zhongguancun Kejiyuan Fengtaiyuan, Fentai District,
Beijing, PRC 100070.
PROPOSAL 1
ELECTION OF DIRECTORS
Nominees of the Board of Directors
The Board, upon the recommendation of the Nominating and
Corporate Governance Committee, has nominated the persons identified below for election as directors, to serve until the next annual meeting
and until their successors have been elected and qualified, unless such directors resign or are terminated prior thereto. If any nominee
becomes unavailable for election, which is not expected, the persons named in the accompanying proxy intend to vote for any substitute
whom the Board nominates.
Name |
|
Age |
|
Other positions with Company; other directorships held In last five years |
|
Has served as Company director since |
Handong Cheng |
|
52 |
|
Chairman of the Board, Chief Executive Officer and President |
|
September 2007 |
George Kai Chu |
|
47 |
|
Director |
|
June 2015 |
Pau Chung Ho |
|
64 |
|
Independent Non-Executive Director |
|
August 2019 |
Zhiqing Chen |
|
50 |
|
Independent Non-Executive Director |
|
November 2009 |
Chang Qiu |
|
59 |
|
Independent Non-Executive Director |
|
December 2014 |
The business experience during the last five years of each
of these individuals is as follows:
Handong Cheng, Chairman of the Board, Chief Executive
Officer and President. Mr. Cheng has served as Chairman of the Board, Chief Executive Officer
and President of our company since September 2007. Mr. Cheng has served as Acting Chief Financial Officer and Secretary of our company
since May 2023. Prior to that role, from October 2003 to September 2007, Mr. Cheng acted as President of ChinaNet Online Advertising Limited.
Mr. Cheng holds an EMBA degree from Guanghua School of Management at the Peking University, and a degree in economic law from the College
of Law of Wuhan University.
George Kai Chu, Director.
Mr. Chu has served as a director of our company since June 2015. Mr. Chu was our Chief Operating Officer and Secretary from May 2010 to
August 2020. From December 2007 to May 2010, Mr. Chu served as the Special Executive to the Chairman of Dachan Food (Asia) Ltd. in Beijing
and also served at Dachan Food as the Head of the Beijing and Hebei Operations. From June 2007 to December 2007, Mr. Chu acted as Senior
Business Advisor to the Chinese Aviation and Space Industry Development Association (CASIDA) in Taipei. From January 2005 to June 2007,
Mr. Chu served as a Senior Vice President at the Royal Bank of Canada Financial Group, Asset Management in Vancouver, Toronto and New
York. Mr. Chu has a joint major bachelor’s degree in accounting and management information systems from Simon Fraser University,
an MBA degree from Harvard University and an EMBA degree from Guanghua School of Management at the Peking University.
Pau Chung Ho, Director. Mr.
Pau has served as an independent director of our company since August 2019. Prior to joining the Company, Mr. Pau served as
the General Manager of The Regal Riverfront Hotel Jiangmen from April 2018 to June 2019. From February 2014 to June 2017, Mr. Pau served
as the General Manager of The Holiday Inn Resort Chaohu, and from September 2011 to February 2014, Mr. Pau served as the General Manager
of The Regal Poly Guiyang Hotel. Mr. Pau holds a Bachelors of Arts in Hospitality Management from the University of Birmingham, United
Kingdom.
Zhiqing Chen, Director.
Mr. Chen has served as an independent director of our company since November 2009. Mr. Chen has been a partner at Chen & Partners
Law Firm since July 2010. From January 2002 to June 2010, Mr. Chen was a partner at Jin Mao P.R.C. Lawyers in Shanghai, a law firm specializing
in corporate law, including foreign investments and mergers and acquisitions. Mr. Chen’s clients include local PRC enterprises as
well as international corporations. Prior to joining the Company, Mr. Chen served as a non-management director for Shanghai Fumai Investment
Management Co., Ltd., Shanghai Zhijinwu Investment Management Co., Ltd, and Shanghai Merciful Groups Co., Ltd. Mr. Chen received a bachelor’s
degree in international law from East China University and an EMBA degree from Guanghua School of Management at the Peking University.
Chang Qiu, Director.
Mr. Qiu has served as an independent director of our company since December 2014. Mr. Qiu has served as the President and Chief Executive
Officer of Forun Technologies Inc. since July 2018. From April 2007 to June 2018, he served as a Principal of Sansar Capital Management.
From 2001 through March 2007, Mr. Qiu served as the Founder, Managing Director and Senior Equity Analyst of Forun Technologies Inc. Prior
to that, Mr. Qiu worked at IBM and other organizations in business and research functions. Mr. Qiu received an MBA degree from Columbia
Business School, a Ph.D. degree from Colorado School of Mines, and a bachelor’s degree from Wuhan University, China.
No director or executive officer is related to any other
director or executive officer.
The Board has determined that Zhiqing Chen, Chang Qiu and
Pau Chung Ho are “independent” under the current independence standards of Rule 5605(a)(2) of the Marketplace Rules of The
NASDAQ Stock Market, LLC and meet the criteria set forth in Rule 10A(m)(3) under the U.S. Securities Exchange Act of 1934, as amended
(the “Exchange Act”).
Board Operations
Board Leadership Structure
Mr. Handong Cheng
holds the positions of chief executive officer and chairman of the Board of the Company. The Board believes that Mr. Cheng’s services
as both chief executive officer and chairman of the Board is in the best interest of the Company and its shareholders. Mr. Cheng possesses
detailed and in-depth knowledge of the issues, opportunities and challenges facing the Company in its industries and businesses and is
thus best positioned to develop agendas that ensure the Board’s time and attention are focused on the most critical matters relating
to the business of the Company. His combined role enables decisive leadership, ensures clear accountability, and enhances the Company’s
ability to communicate its message and strategy clearly and consistently to the Company’s shareholders, employees and customers.
The Board has not
designated a lead director. Given the limited number of directors comprising the Board, the independent directors call and plan their
executive sessions collaboratively and, between meetings of the Board, communicate with management and one another directly. Under these
circumstances, the directors believe designating a lead director to take on responsibility for functions in which they all currently participate
might detract from rather than enhance performance of their responsibilities as directors.
Director Qualifications
The Company seeks
directors with established strong professional reputations and experience in areas relevant to the strategy and operations of its businesses.
The Company also seeks directors who possess the qualities of integrity and candor, who have strong analytical skills and who are willing
to engage management and each other in a constructive and collaborative fashion, in addition to the ability and commitment to devote time
and energy to service on the Board and its committees. We believe that all of our directors meet the foregoing qualifications.
The Nominating and
Corporate Governance Committee and the Board believe that the leadership skills and other experience of the Board members, as described
below, provide the Company with a range of perspectives and judgment necessary to guide our strategies and monitor their execution.
Handong Cheng. Mr.
Cheng is the founder of the Company and has been serving the franchise and advertising media industries for more than fifteen years. In
2003, he participated in the establishment of Beijing CNET Online Advertising Co., Ltd. and Business Opportunity Online (Beijing) Networking
Technology Ltd. (www.28.com), and engaged in operational, administration and management activities. Mr. Cheng has contributed to the Board’s
strong leadership and vision for the development of the Company.
George Kai Chu. Mr.
Chu had been our Chief Operating Officer and Secretary from May 2010 to August 2020. Mr. Chu has years of experience in capital markets,
financial and business management.
Zhiqing Chen. Mr.
Chen contributes to the Board extensive legal knowledge with respect to foreign investments and mergers and acquisitions. Mr. Chen also
has experience working with PRC enterprises and international corporations.
Chang Qiu. Mr.
Qiu has extensive experience working with PRC enterprises and international corporations. Mr. Qiu contributes to the Board his knowledge
with respect to foreign investments, business strategy and corporate finance.
Pau Chung Ho. Mr. Pau has extensive experience in
operation management, business strategy development and corporate governance.
Meetings of the Board of Directors
The Board held three meetings during 2022. During 2022,
no director attended fewer than 75% of the meetings of the Board and Board committees of which the director was a member.
The Company’s directors are expected to attend board
meetings as frequently as necessary to properly discharge their responsibilities and to spend the time needed to prepare for each such
meeting. The Company’s directors are expected to attend annual meetings of stockholders, but we do not have a formal policy requiring
them to do so. All directors of ours attended the 2022 annual meeting of stockholders held on December 15, 2022.
Code of Ethics
The Company adopted
a Code of Ethics applicable to its directors, officers and employees on December 21, 2009. The Code of Ethics is designed to deter wrongdoing
and to promote ethical conduct and full, fair, accurate, timely and understandable reports that the Company files or submits to the Securities
and Exchange Commission and others. A printed copy of the Code of Ethics may be obtained free of charge by writing to us at our headquarters
located at Room 1811, Xinghuo Keji Plaza, No. 2 Fengfu Road, Fengtai District, Beijing,
PRC 100070 or on our website, www.zdat.com.
Board Committees
The Board has a standing audit, compensation, and nominating
and corporate governance committee, comprised solely of independent directors. Each committee has a charter, which is available at the
Company’s website, www.zdat.com.
Audit Committee
The Audit Committee, which is established in accordance
with Section 3(a)(58)(A) of the Exchange Act, engages Company’s independent accountants, reviewing their independence and performance;
reviews the Company’s accounting and financial reporting processes and the integrity of its financial statements; the audits of
the Company’s financial statements and the appointment, compensation, qualifications, independence and performance of the Company’s
independent auditors; the Company’s compliance with legal and regulatory requirements; and the performance of the Company’s
internal audit function and internal control over financial reporting. The Audit Committee held four meetings during 2022.
The members of the Audit Committee are Chang Qiu, Zhiqing
Chen and Pau Chung Ho. The Board has determined that Mr. Qiu is an audit committee financial expert, as defined in the Exchange Act.
Audit Committee Report
With respect to the audit of the Company’s financial
statements for the year ended December 31, 2022, the Audit Committee:
|
·
|
reviewed and discussed the audited financial statements with management; |
|
·
|
discussed with the Company’s independent accountants the matters required to be discussed by the statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1, AU section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T; and |
|
·
|
received the written disclosures and the letter from the independent accountant required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence and has discussed with the independent accountant the independent accountant’s independence. |
Based upon the foregoing review and discussion, the Audit Committee recommended
to the Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December
31, 2022, which was filed on April 17, 2023.
Chang Qiu, Chair
Zhiqing Chen
Pau Chung Ho
Compensation Committee
The Compensation
Committee reviews annually the Company’s corporate goals and objectives relevant to the officers’ compensation, evaluates
the officers’ performance in light of such goals and objectives, determines and approves the officers’ compensation level
based on this evaluation; makes recommendations to the Board regarding approval, disapproval, modification, or termination of existing
or proposed employee benefit plans, makes recommendations to the Board with respect to non-CEO and non-CFO compensation and administers
the Company’s incentive-compensation plans and equity-based plans. The Compensation Committee has the authority to delegate any
of its responsibilities to subcommittees as it may deem appropriate in its sole discretion. The chief executive officer of the Company
may not be present during voting or deliberations of the Compensation Committee with respect to his compensation. The Company’s
executive officers do not play a role in suggesting their own salaries. Neither the Company nor the Compensation Committee has engaged
any compensation consultant who has a role in determining or recommending the amount or form of executive or director compensation. The
Compensation Committee held two meetings during 2022.
The members of the Compensation Committee are Zhiqing Chen,
Chang Qiu and Pau Chung Ho.
Nominating and Corporate Governance Committee
The Nominating and
Corporate Governance Committee assists the Board in identifying qualified individuals to the Board as its nominees for election as directors,
in determining the composition of the Board, and in assessing the Board’s effectiveness. The Nominating and Corporate Governance
Committee did not hold any meeting during 2022.
The members of the Nominating and Corporate Governance
Committee are Zhiqing Chen, Chang Qiu and Pau Chung Ho.
The Nominating and Corporate Governance
Committee will consider director candidates recommended by security holders. Potential nominees to the Board are required to have such
experience in business or financial matters as would make such nominee an asset to the Board and may, under certain circumstances, be
required to be “independent”, as such term is defined under Rule 5605 of the listing standards of NASDAQ and applicable SEC
regulations. Security holders wishing to submit the name of a person as a potential nominee to the Board must send the name, address,
and a brief (no more than 500 words) biographical description of such potential nominee to the Nominating and Corporate Governance Committee
at the following address: Nominating and Corporate Governance Committee of the Board of Directors, c/o ZW Data Action Technologies Inc., Room
1811, Xinghuo Keji Plaza, No. 2 Fengfu Road, Fengtai District, Beijing, PRC. Potential director
nominees will be evaluated by personal interview, such interview to be conducted by one or more members of the Nominating and Corporate
Governance Committee, and/or any other method the Nominating and Corporate Governance Committee deems appropriate, which may, but need
not, include a questionnaire. The Nominating and Corporate Governance Committee may solicit or receive information concerning potential
nominees from any source it deems appropriate. The Nominating and Corporate Governance Committee need not engage in an evaluation process
unless (i) there is a vacancy on the Board, (ii) a director is not standing for re-election, or (iii) the Nominating and Corporate Governance
Committee does not intend to recommend the nomination of a sitting director for re-election. A potential director nominee recommended
by a security holder will not be evaluated differently from any other potential nominee. Although it has not done so in the past, the
Nominating and Corporate Governance Committee may retain search firms to assist in identifying suitable director candidates.
The Board does not have a formal policy
on Board candidate qualifications. The Board may consider those factors it deems appropriate in evaluating director nominees made either
by the Board or stockholders, including judgment, skill, strength of character, experience with businesses and organizations comparable
in size or scope to the Company, experience and skill relative to other Board members, and specialized knowledge or experience. Depending
upon the current needs of the Board, certain factors may be weighed more or less heavily. In considering candidates for the Board, the
directors evaluate the entirety of each candidate’s credentials and do not have any specific minimum qualifications that must be
met. “Diversity,” as such, is not a criterion that the Committee considers. The
directors will consider candidates from any reasonable source, including current Board members, stockholders, professional search firms
or other persons. The directors will not evaluate candidates differently based on who has made the recommendation.
Stockholder Communications
Stockholders can
mail communications to the Board, c/o Secretary, ZW Data Action Technologies Inc., Room
1811, Xinghuo Keji Plaza, No. 2 Fengfu Road, Fengtai District, Beijing, PRC, who will forward the
correspondence to each addressee.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires
Company’s directors and executive officers and any beneficial owner of more than 10% of any class of Company equity security to
file reports of ownership and changes in ownership with the Securities and Exchange Commission and furnish copies of the reports to Company.
Based solely on the Company’s review of copies of such forms and written representations by Company’s executive officers and
directors received by it, the Company believes that during 2022, all such reports were filed timely, except
for the following:
Name |
|
Late Reports |
|
Transactions
Covered |
|
Number of
Shares (1) |
Mark Li (2) |
|
Form 4 |
|
Common Stock |
|
|
13,000 (3) |
Chang Qiu |
|
Form 4 |
|
Common Stock |
|
|
6,000 (3) |
Chi Wa Chiu (4) |
|
Form 4 |
|
Common Stock |
|
|
90,000 (5) |
George Kai Chu |
|
Form 4 |
|
Common Stock |
|
|
80,000 (5) |
| (1) | Retrospectively restated for effect of the 1-for-5 reverse stock split on January 18, 2023. |
| (2) | On May 4, 2023, Mark Li resigned as our Chief Financial Officer and Secretary. |
| (3) | Representing Common Stock granted and issued under the Company’s 2020 Omnibus
Equity Incentive Plan during 2022. |
| (4) | On February 15, 2023, Chi Wa Chiu resigned as our Chief Operating Officer. |
| (5) | Representing Common Stock sold during 2022. |
Executive Compensation
Our Board of Directors
has not adopted or established a formal policy or procedure for determining the amount of compensation paid to our executive officers.
No pre-established, objective performance goals or metrics have been used by the Board of Directors in determining the compensation of
our executive officers.
Elements of Compensation
Our executive officers receive a base salary to compensate
them for services rendered during the year. In additional to their base salary, we also provide equity incentives to attract and retain
executive talent for the Company’s continued success.
Base Salary and Bonus. The value of base
salary and bonus for each our executive reflects his skill set and the market value of that skill set in the sole discretion of the Board
of Director.
Equity Incentives. The ZW Data
Action Technologies Inc. (f/k/a, ChinaNet Online Holdings, Inc.) 2020 Omnibus Equity Incentive
Plan (the “2020 Plan”) provides for the granting of distribution equivalent rights, incentive stock options, non-qualified
stock options, performance share awards, performance unit awards, restricted stock awards, restricted stock unit awards, stock appreciation
rights, tandem stock appreciation rights, unrestricted stock awards or any combination of the foregoing, as may be best suited to the
circumstances of the particular employee, director or consultant as provided therein (the “Awards”). Certain Awards are intended
to qualify as “incentive stock options” within the meaning of the Internal Revenue Code (the “Code”). The 2020
Plan was approved by our stockholders on October 12, 2020.
Retirement Benefits. Our executive officers are not presently
entitled to company-sponsored retirement benefits.
Perquisites. We have not provided our executive officers
with any material perquisites and other personal benefits and, therefore, we do not view perquisites as a significant or necessary element
of our executive’s compensation.
Deferred Compensation. We do not provide our executives
the opportunity to defer receipt of annual compensation.
Summary Compensation Table
The following table
sets forth information regarding compensation of the named executive officers for each of the two fiscal years in the period ended December
31, 2022.
SUMMARY COMPENSATION OF NAMED EXECUTIVE OFFICERS
Name and Principal Position |
|
Year |
|
Salary
($) |
|
Stock
Awards
($) (3) |
|
Option
Awards
($) |
|
Total |
Handong Cheng (Principal Executive Officer) (1) |
|
2022 |
|
36,477 |
|
- |
|
- |
|
36,477 |
|
|
2021 |
|
46,113 |
|
1,670,000 |
|
- |
|
1,716,113 |
Mark Li (Principal Financial Officer and Secretary) (1) |
|
2022 |
|
- |
|
41,600 |
|
- |
|
41,600 |
|
|
2021 |
|
20,796 |
|
- |
|
- |
|
20,796 |
Chi Wa Chiu (Chief Operating Officer) (2) |
|
2022 |
|
- |
|
- |
|
- |
|
- |
|
|
2021 |
|
- |
|
751,500 |
|
- |
|
751,500 |
(1) On May 4, 2023, Mark Li resigned as our Chief Financial Officer and Secretary.
On that same date, our Board of Directors, by unanimous written consent, appointed Handong Cheng, our Chief Executive Officer, to
serve as our Acting Chief Financial Officer and Secretary.
(2) On February 15, 2023, Chi Wa Chiu resigned as our Chief Operating Officer.
(3) The aggregate grant date fair value of the restricted stock awarded to
each named executive officer is computed in accordance with FASB ASC Topic 718.
Our executive officers are reimbursed by us for any out-of-pocket
expenses incurred in connection with activities conducted on our behalf. There is no limit on the amount of these out-of-pocket expenses
and there will be no review of the reasonableness of such expenses by anyone other than our Board, which includes persons who may seek
reimbursement, or a court of competent jurisdiction if such reimbursement is challenged.
Employment Agreements
We enter into a standard employment contract
with our executive officers for a set period of years. According to the contracts, these executive officers will devote substantially
all of his/her time to the service of our company and may not compete directly or indirectly with us. These executive officers also agreed
that in the event that his/her employment with us is terminated, for a period of two year following the date of his/her termination of
employment, he/she will not contact, for any commercial purpose, or provide to a third party, information about clients or entities with
which we were acquainted during the term of his employment with us. Subject to certain exceptions, either party may terminate the employment
agreement upon 30 days prior written notice.
We do not have change-in-control agreements
with any of our directors or executive officers, and we are not obligated to pay severance or other enhanced benefits to executive officers
upon termination of their employment.
Outstanding Equity Awards
There were none outstanding equity incentive
awards held by the named executive officers as of the fiscal year ended December 31, 2022.
Compensation of Directors
The following table sets forth information regarding compensation
of each director, other than named executive officers, for fiscal 2022.
FISCAL 2022 DIRECTOR COMPENSATION
Name |
|
Fees
Earned or Paid
in Cash ($) |
|
Stock
Awards (1)
($) |
|
Option
Awards
($) |
|
Non-Equity
Incentive Plan
Compensation
($) |
|
Nonqualified
Deferred
Compensation
Earnings ($) |
|
All Other
Compensation
($) |
|
Total
($) |
Zhiqing Chen |
|
|
6,102 |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
6,102 |
|
Chang Qiu |
|
|
6,102 |
|
|
|
21,300 |
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
27,402 |
|
(1) The aggregate grant date fair value of the restricted stock awarded to each named executive
officer is computed in accordance with FASB ASC Topic 718.
Certain Relationships and Related Transactions
It is our policy
to not enter any transaction (other than compensation arrangements in the ordinary course) with any director, executive officer, employee,
or principal stockholder or party related to them, unless authorized by a majority of the directors having no interest in the transaction,
upon a favorable recommendation by the Audit Committee (or a majority of its disinterested members).
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”
THE ELECTION OF THE BOARD OF DIRECTORS’ NOMINEES.
PLEASE NOTE: If your shares are held in street name, your broker, bank,
custodian, or other nominee holder cannot vote your shares in the election of directors, unless you direct the holder how to vote, by
marking your proxy card.
PROPOSAL 2
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT ACCOUNTANTS
On July 26, 2023, the Audit Committee of our Board approved
the dismissal of Centurion ZD CPA & Co. (“Centurion”) as our independent accountant, effective immediately.
Centurion’s reports on our consolidated financial
statements for the fiscal years ended December 31, 2022 and 2021 did not contain an adverse opinion or a disclaimer of opinion and were
not qualified or modified as to uncertainty, audit scope or accounting principles.
During the two most recent fiscal years ended December
31, 2022 and 2021, and the subsequent interim period through July 26, 2023, there were no disagreements with Centurion on any matter of
accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved
to the satisfaction of Centurion, would have caused Centurion to make reference to the subject matter of the disagreements in connection
with its reports on our consolidated financial statements for such years. Also, during this time, there were no “reportable events,”
as defined in Item 304(a)(1)(v) of Regulation S-K. We provided Centurion with a copy of the aforesaid disclosures and requested that Centurion
furnish us with a letter addressed to the Securities and Exchange Commission (“SEC”) stating whether or not it agrees with
the statements made aforesaid. A copy of Centurion’s letter dated July 26, 2023 was attached as an exhibit to a Current Report on
Form 8-K that was filed by us with the SEC on July 26, 2023.
On July 26, 2023, we engaged ARK Pro CPA & Co. (“ARK”)
as our independent registered public accounting firm for the fiscal year ending December 31, 2023, effective immediately. The decision
to engage ARK as our principal independent accountant was approved by the Audit Committee of our company on July 26, 2023. During the
fiscal years ended December 31, 2022 and 2021 and through July 26, 2023, neither us nor anyone on our behalf consulted with ARK regarding
(i) the application of accounting principles to any specified transaction, either completed or proposed or the type of audit opinion that
might be rendered on our consolidated financial statements, and neither a written report nor oral advice was provided to us that ARK concluded
was an important factor considered by us in reaching a decision as to any accounting, auditing, or financial reporting issue, or (ii)
any matter that was either the subject of a “disagreement,” as defined in Item 304(a)(1)(iv) of Regulation S-K, or a “reportable
event,” as defined in Item 304(a)(1)(v) of Regulation S-K.
Representatives of ARK are expected to be present at the
Annual Meeting to respond to appropriate questions and will have an opportunity to make a statement, if they so desire.
In the event the stockholders fail to ratify the selection
of ARK, the Audit Committee will reconsider whether to retain the firm. Even if the selection is ratified, the Audit Committee and the
Board, in their discretion, may direct the appointment of a different independent accounting firm at any time during the year if they
determine that such a change would be in the best interests of the Company and its stockholders.
Services and Fees of Independent Accountants
The following table sets forth the aggregate fees billed
to us by categories specified below in connection with certain professional services rendered by Centurion, our former independent registered
public accounting firm, that we dismissed on July 26, 2023, and by Marcum Asia CPAs LLP (formerly known as Marcum Bernstein & Pinchuk
LLP”), our former independent registered public accounting firm that we dismissed on October
7, 2019. ARK did not render any professional services to us and did not bill to us any fees for the fiscal years ended December
31, 2022 and 2021.
Fees |
|
2022 |
|
2021 |
Audit Fees |
|
$ |
150,027 |
|
|
$ |
272,831 |
* |
Audit Related Fees |
|
|
– |
|
|
|
– |
|
Tax Fees |
|
|
– |
|
|
|
– |
|
All Other Fees |
|
|
– |
|
|
|
– |
|
Total |
|
$ |
150,027 |
* |
|
$ |
272,831* |
|
* Including approximately US$0.02 million fees billed by Marcum
Asia CPAs LLP (formally known as Marcum Bernstein & Pinchuk LLP), our former independent registered accountant, for the year ended
December 31, 2021.
Audit Fees
This category includes aggregate fees billed by our independent
auditors for the audit of our annual financial statements, review of financial statements included in our quarterly reports on Form 10-Q
and services that are normally provided by the auditor in connection with statutory and regulatory filings for those fiscal years.
Audit-Related Fees
This category consists of services by our independent auditors
that, including accounting consultations on transaction related matters, are reasonably related to the performance of the audit or review
of our financial statements and are not reported above under Audit Fees.
Tax Fees
This category consists of professional services rendered
for tax compliance and preparation of our corporate tax returns and other tax advice.
All Other Fees
This category consists of professional services rendered
for products and services provided, other than the services reported above under Audit Fees, Audit- Related Fees and Tax Fees.
Pre-Approval of Services
The Audit Committee must pre-approve all audit, review,
attest and permissible non-audit services (including any permissible internal control-related services) to be provided to the company
or its subsidiaries by the independent auditors. The Audit Committee may establish pre-approval policies and procedures in compliance
with applicable SEC rules. All services described under the caption Services and Fees of Independent Accountants were pre-approved.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR”
RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT ACCOUNTANTS.
PROPOSAL 3
ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
Pursuant to Securities Exchange Act Section 14A, we
are submitting to stockholders an advisory vote to approve the compensation paid to the Company’s named executive offices, as disclosed
under the caption Election of Directors—Executive Compensation, pursuant to Item 402 (m) through (q) of Regulation S-K, compensation
tables, and narrative discussion.
The advisory vote is not binding on the Company, the
Board of Directors, or management; if executive compensation is not approved by a majority of the votes cast, the Compensation Committee
will take account of this fact when considering executive compensation for future years.
The Company intends to submit to stockholders an advisory
vote to approve executive compensation every two years. The Company plans to submit the next vote at the second annual meeting succeeding
this year’s Annual Meeting.
A majority of votes cast is required for advisory approval
of executive compensation.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE
“FOR” THE FOLLOWING ADVISORY RESOLUTION:
RESOLVED, that the compensation paid to Company’s named executive
offices, as disclosed under the caption Election of Directors—Executive Compensation, pursuant to Item 402 (m) through (q) of Regulation
S-K, compensation tables, and narrative discussion, be, and hereby is, approved.
PLEASE NOTE: If your shares are held in street name, your
broker, bank, custodian, or other nominee holder cannot vote your shares on this proposal, unless you direct the holder how to vote, by
marking your proxy card or by following the instructions on the proxy card to vote.
PROPOSAL 4
APPROVAL OF THE INCREASE IN NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK
General
The Board has approved an amendment, or the Authorized
Shares Amendment, to the Company’s Articles of Incorporation, as amended, or the Articles of Incorporation, to increase the number
of authorized shares of Common Stock, par value $0.001 per share, from 20,000,000 to 50,000,000. The Authorized Shares Amendment will
not change the number of authorized shares of preferred stock, which currently consists of 20,000,000 shares of preferred stock, par value
$0.001 per share.
The additional shares of Common Stock authorized for
issuance by the Authorized Shares Amendment would be a part of the existing class of Common Stock and, if and when issued, would have
the same rights and privileges as the Common Stock presently issued and outstanding. The full text of the proposed Authorized Shares Amendment
is attached to this Proxy Statement as Appendix A. However, the text of the Authorized Shares Amendment is subject to revision
to include such changes as may be required by the Secretary of State of the State of Nevada and as deemed necessary and advisable to effect
the Authorized Shares Amendment.
Provided the stockholders approve the Authorized Shares
Amendment, the increased number of shares would be authorized for issuance, but would remain unissued until a Board-approved issuance
of such shares.
Adoption of the Authorized Shares Amendment would not
affect the rights of the holders of currently outstanding Common Stock, except for effects incidental to increasing the number of shares
of our Common Stock outstanding, such as dilution of the earnings per share and voting rights of current holders of Common Stock, to the
extent that any additional shares of Common Stock are ultimately issued out of the increase in authorized shares proposed in the Authorized
Shares Amendment.
If the proposed Authorized Shares Amendment is approved
by the requisite vote of the stockholders, it will become effective upon the filing of a Certificate of Amendment to our Articles of Incorporation
with the Secretary of State of the State of Nevada. The Board reserves its right to elect not to proceed with and abandon the Authorized
Shares Amendment if it determines, in its sole discretion at any time, that this proposal is no longer in the best interests of our stockholders.
If we fail to obtain stockholder approval of this proposal
at the Annual Shareholder Meeting, we intend to continue to seek to obtain stockholder approval at each subsequent annual meeting of stockholders
and/or special meetings of stockholders until such approval has been obtained and we will incur the costs associated therewith.
Background; Purposes and Effects of the Authorized Shares Amendment
The Board believes it is in the best interest
of the Company to increase the number of authorized shares of our capital stock in order to give the Company greater flexibility in considering
and planning for future general corporate needs, including, but not limited to, stock dividends, grants under equity compensation plans,
stock splits, financings, potential strategic transactions, as well as other general corporate transactions. The Board believes that additional
authorized shares of capital stock will enable the Company to take timely advantage of market conditions and favorable financing and acquisition
opportunities that become available to the Company.
The Company has no current plan, commitment, arrangement,
understanding or agreement regarding the issuance of additional shares of capital stock from the additional shares to be authorized herein.
The authorized but unissued shares will only be issued at the direction of the Board, and upon separate shareholder approval if and as
required by applicable law.
There are currently 20,000,000 authorized shares
of Common Stock. As of the Record Date, there were, (i) 7,204,506 shares of our Common Stock issued and outstanding; (ii) 1,000,343
shares of our Common Stock reserved for issuance upon the exercise of our warrants to purchase our Common Stock; (iii) 67,853 shares of
our Common Stock reserved for issuance under our 2020 Omnibus Equity Incentive Plan, leaving a balance of 11,727,298 shares of our Common
Stock available for issuance. In addition, no shares of our preferred stock are issued and outstanding leaving a balance of 20,000,000
shares that are authorized but unissued. There are currently no shares of our preferred stock reserved for issuance.
If our stockholders do not approve the Authorized
Shares Amendment in this Proposal 4, we may not have enough authorized shares to meet our needs in connection with future financings or
strategic transactions and properly incentivizing our key personnel. The Board is recommending the proposed increase in the authorized
number of shares of Common Stock to provide the Company with appropriate flexibility to issue additional shares in the future on a timely
basis if such need arises in connection with potential financings, business combinations or other corporate purposes. Approval of the
Authorized Shares Amendment could enable the Company to take advantage of market conditions, the availability of more favorable financing,
and opportunities for business combinations and other strategic transactions, without the potential delay and expense associated with
convening a special stockholders’ meeting.
Our success also depends in part on our continued
ability to attract, retain and motivate highly qualified management and key personnel. If this proposal is not approved by our stockholders,
the lack of unissued and unreserved authorized shares of Common Stock to provide future equity incentive opportunities could adversely
impact our ability to achieve these goals. In short, if our stockholders do not approve this proposal, we may not be able to access the
capital markets, complete corporate collaborations or partnerships, attract, retain and motivate employees, and pursue other business
opportunities integral to our growth and success.
The proposed increase in the number of authorized
shares of Common Stock will not, by itself, have an immediate dilutive effect on our current stockholders. However, if this proposal is
approved, unless otherwise required by applicable law or stock exchange rules, the Board will be able to issue the additional shares of
Common Stock from time to time in its discretion without further action or authorization by the stockholders. The newly authorized shares
of Common Stock would be issuable for any proper corporate purpose, including capital raising transactions of equity or convertible debt
securities, the establishment of collaborations or other strategic agreements, stock splits, stock dividends, issuance under current or
future equity incentive plans, future acquisitions, investment opportunities, or for other corporate purposes. The future issuance of
additional shares of Common Stock or securities convertible into our Common Stock may occur at times or under circumstances that could
result in a dilutive effect on the earnings per share, book value per share, voting power and percentage interest of the present holders
of our Common Stock, some of whom have preemptive rights to subscribe for additional shares that we may issue.
Potential Anti-Takeover Effect
An increase in the number of authorized but unissued
shares of Common Stock relative to the number of outstanding shares of Common Stock may also, under certain circumstances, be construed
as having an anti-takeover effect. Although not designed or intended for such purposes, the effect of the Authorized Shares Amendment
might be to render more difficult or to discourage a merger, tender offer, proxy contest or change in control of us and the removal of
management, which stockholders might otherwise deem favorable. For example, the authority of the Board to issue Common Stock might be
used to create voting impediments or to frustrate an attempt by another person or entity to effect a takeover or otherwise gain control
of us because the issuance of additional Common Stock would dilute the voting power of the Common Stock then outstanding. Our Common Stock
could also be issued to purchasers who would support the Board in opposing a takeover bid which our board determines not to be in our
best interests and those of our stockholders. In addition to the Authorized Shares Amendment, the Company’s Articles of Incorporation
and Bylaws also include other provisions that may have an anti-takeover effect. These provisions, among other things, permit the Board
to issue preferred stock with rights senior to those of the Common Stock without any further vote or action by the stockholders, provide
that special meetings of stockholders may only be called by the Board and some of our officers, and do not provide for cumulative voting
rights, which could make it more difficult for stockholders to effect certain corporation actions and may delay or discourage a change
in control. The Board is not presently aware of any attempt, or contemplated attempt, to acquire control of the Company and the Authorized
Shares Amendment is not part of any plan by the Board to recommend or implement a series of anti-takeover measures.
Appraisal Rights
Pursuant to the Nevada Revised Statutes, shareholders
are not entitled to appraisal rights with respect to the Authorized Shares Amendment.
Vote Required
Approval of Proposal 4 requires “For”
votes of a majority of the outstanding shares of our Common Stock. If you hold your shares in your own name and abstain from voting on
this matter, your abstention will have the same effect as a negative vote. If you hold your shares through a broker and you do not instruct
the broker on how to vote on this proposal, your broker will not have authority to vote your shares. Broker non-votes will have the same
effect as a negative vote. Abstentions and broker non-votes will each be counted as present for purposes of determining the presence of
a quorum.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR”
APPROVAL OF THE INCREASE IN NUMBER OF AUTHORIZED SHARES OF COMMON STOCK PROPOSAL.
PLEASE NOTE: If your shares are held in street name, your broker, bank, custodian, or other nominee
holder cannot vote your shares on this proposal, unless you direct the holder how to vote, by marking your proxy card or by following
the instructions on the proxy card to vote.
PROPOSAL 5
RATIFICATION OF THE COMPANY’S 2023 OMNIBUS EQUITY INCENTIVE PLAN
The Company is seeking ratification of the stockholders to adopt the Company’s
2023 Omnibus Equity Incentive Plan (the “2023 Plan”). The purpose of the 2023 Plan is to assist the Company to attract, retain
and provide incentives to employees and directors of, and consultants and advisers to, the Company and its subsidiaries. If the 2023 Plan
is approved, awards under the 2023 Plan will be limited in the aggregate to One Million Five Hundred Thousand (1,500,000) shares of our
common stock.
Equity Compensation Plan Information
As of the date of this proxy statement, the number of shares
of the Company’s common stock available for issuance under the Company’s 2020 Equity Incentive Plan (the “2020 Plan”)
is 67,853 shares.
The total number shares of common stock under the 2020
Plan, including shares originally authorized by equity holders and shares remaining for future issuance as of December 31, 2022, is as
follows:
Plan category |
|
Number of securities to be issued upon exercise of outstanding options, warrants
and rights
(a) |
|
Weighted-average exercise price of outstanding options, warrants and rights
(b) |
|
Number of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column (a))
(c) |
Equity compensation plans approved by security holders |
|
- |
|
- |
|
67,853 |
Equity compensation plans not approved by security holders |
|
- |
|
- |
|
- |
Total |
|
- |
|
- |
|
67,853 |
General
The following summary of the 2023 Plan is qualified in
its entirety by reference to the complete text of the 2023 Plan, a copy of which is attached to this proxy statement as Appendix
B. Capitalized terms used and not otherwise defined in this section discussing the adoption of the 2023 Plan shall have the meanings
given to them in the 2023 Plan.
Our Board of Directors has adopted and approved the 2023
Plan, subject to the effectiveness of stockholder approval. Upon shareholders’ approval, the 2023 Plan will become effective on
October 18, 2023 and is a comprehensive incentive compensation plan under which we can grant equity-based and other incentive awards to
officers, employees and directors of, and consultants and advisers to, the Company. The purpose of the 2023 Plan is to help us attract,
motivate and retain such persons and thereby enhance shareholder value.
Administration.
Upon effectiveness, the 2023 Plan will be administered
by a Committee of the Board of Directors (the “Plan Committee”) consisting of two or more persons who will each be (i) “non-employee
directors” within the meaning of Rule 16b-3 of the Exchange Act, and (ii) “independent” for purposes of any applicable
listing requirements. If a member of the Plan Committee is eligible to receive an award under the 2023 Plan, such Plan Committee member
shall have no authority hereunder with respect to his or her own award. Among other things, the Plan Committee has complete discretion,
subject to the terms of the 2023 Plan, to determine the employees, directors and consultants to be granted awards under the 2023 Plan,
the type of awards to be granted, the number of shares subject to each award, the exercise price under each option and the base price
for each stock appreciation right (“SAR”), the term of each award, the vesting schedule for an award, whether to accelerate
vesting, the value of the shares underlying the award, and the required withholdings, if any. The Plan Committee is also authorized to
construe the award agreements, and may prescribe rules relating to the 2023 Plan. Except to the extent (i) approved in advance by
holders of a majority of the shares of the Company entitled to vote generally in the election of directors, or (ii) as a result of any
Change of Control or any adjustment as provided in the 2023 Plan, the Plan Committee shall not have the power or authority to reduce,
whether through amendment or otherwise, the exercise price under any outstanding Option or Stock Appreciation Right, or to grant any new
Award or make any payment of cash in substitution for or upon the cancellation of Options and/or Stock Appreciation Rights previously
granted.
Grant of Awards; Shares Available for Awards.
The 2023 Plan provides for the grant of awards which are
incentive stock options (“ISOs”), non-qualified stock options (“NQSOs”), unrestricted stock, restricted stock,
restricted stock units, performance stock, performance units, SARs, tandem stock appreciation rights or any combination of the foregoing,
to key management employees, directors, and consultants of the Company or any of its subsidiaries (each a “participant”).
We have reserved a total of 1,500,000 shares for issuance as or under awards to be made under the 2023 Plan. To the extent that an award
lapses, expires, is canceled, is terminated unexercised or ceases to be exercisable for any reason, or the rights of its holder terminate,
any shares subject to such award shall again be available for the grant of a new award. The 2023 Plan shall continue in effect, unless
sooner terminated, until the tenth (10th) anniversary of the date on which it is adopted by the Board of Directors (except as to awards
outstanding on that date). The Board of Directors in its discretion may terminate the 2023 Plan at any time with respect to any shares
for which awards have not theretofore been granted; provided, however, that the 2023 Plan’s termination shall not materially and
adversely impair the rights of a holder, without the consent of the holder, with respect to any award previously granted.
Options.
The term of each stock option shall be as specified in
the option agreement; provided, however, that except for stock options which are ISOs, granted to an employee who owns or is deemed to
own (by reason of the attribution rules applicable under Code Section 424(d)) more than 10% of the total combined voting power of all
classes of shares of the Company or of any parent corporation or subsidiary corporation thereof (both as defined in Section 424 of the
Code), within the meaning of Section 422(b)(6) of the Code (a “ten percent shareholder”), no option shall be exercisable after
the expiration of ten (10) years from the date of its grant (five (5) years for an employee who is a ten percent shareholder).
The price at which a share may be purchased upon exercise
of a stock option shall be determined by the Plan Committee; provided, however, that such option price (i) shall not be less than the
fair market value of a share on the date such stock option is granted, and (ii) shall be subject to adjustment as provided in the 2023
Plan. The Plan Committee or the Board of Directors shall determine the time or times at which, or the circumstances under which, a stock
option may be exercised in whole or in part, the time or times at which options shall cease to be or become exercisable following termination
of the stock option holder’s employment or upon other conditions, the methods by which such exercise price may be paid or deemed
to be paid, the form of such payment, and the methods by or forms in which shares will be delivered or deemed to be delivered to participants
who exercise stock options.
Options which are ISOs shall comply in all respects with
Section 422 of the Code. In the case of an ISO granted to a ten percent shareholder, the per share exercise price under such ISO (to the
extent required by the Code at the time of grant) shall be no less than 110% of the fair market value of a share on the date such ISO
is granted. ISOs may only be granted to employees of the Company. In addition, the aggregate fair market value of the shares subject to
an ISO (determined at the time of grant) which are exercisable for the first time by an employee during any calendar year under all plans
of the Company which provide for the grant of ISOs may not exceed $100,000. Any Option which specifies that it is not intended to qualify
as an ISO or any Option that fails to meet the ISO requirements at any point in time will automatically be treated as a NQSO under the
terms of the 2023 Plan.
Unrestricted Stock Awards.
Pursuant to the terms of the applicable unrestricted stock
award agreement, an unrestricted stock award is the award or sale of shares to employees, directors or consultants, which are not subject
to transfer restrictions in consideration for past services rendered to the Company or for other valid consideration.
Restricted Stock Awards.
A restricted stock award is a grant or sale of shares of
Common Stock to the holder, subject to such restrictions on transferability, risk of forfeiture and other restrictions, if any, as the
Plan Committee or the Board of Directors may impose, which restrictions may lapse separately or in combination at such times, under such
circumstances (including based on achievement of performance goals and/or future service requirements), in such installments or otherwise,
as the Plan Committee or the Board of Directors may determine at the date of grant or purchase or thereafter. If provided for under the
restricted stock award agreement, a participant who is granted or has purchased restricted stock shall have all of the rights of a shareholder,
including the right to vote the restricted stock and the right to receive dividends thereon (subject to any mandatory reinvestment or
other requirement imposed by the Plan Committee or the Board of Directors or in the award agreement). During the restricted period applicable
to the restricted stock, subject to certain exceptions, the restricted stock may not be sold, transferred, pledged, exchanged, hypothecated,
or otherwise disposed of by the participant.
Restricted Stock Unit Awards.
A restricted stock unit award provides for a grant of shares
of Common Stock or a cash payment to be made to the holder upon the satisfaction of predetermined individual service-related vesting requirements,
based on the number of units awarded to the holder. The Plan Committee shall set forth in the applicable restricted stock unit award agreement
the individual service-based vesting requirements which the holder would be required to satisfy before the holder would become entitled
to payment and the number of units awarded to the holder. At the time of such award, the Plan Committee may, in its sole discretion, prescribe
additional terms and conditions or restrictions. The holder of a restricted stock unit shall be entitled to receive a cash payment equal
to the fair market value of a share, as determined in the sole discretion of the 2023 Plan Committee and as set forth in the restricted
stock unit award agreement, for each restricted stock unit subject to such restricted stock unit award, if and to the extent the holder
satisfies the applicable vesting requirements. Such payment or distribution shall be made no later than by the fifteenth (15th) day of
the third (3rd) calendar month next following the end of the calendar year in which the restricted stock unit first becomes vested, unless
otherwise structured to comply with Code Section 409A.
Performance Stock Awards.
A performance stock award provides for the distribution
of shares (or cash equal to the fair market value of shares) to the holder upon the satisfaction of predetermined individual and/or Company
goals or objectives. The Plan Committee shall set forth in the applicable performance stock award agreement the performance goals and
objectives (and the period of time to which such goals and objectives shall apply) which the holder and/or Company would be required to
satisfy before the holder would become entitled to the receipt of shares (or cash equal to the fair market value of shares) pursuant to
such holder’s performance stock award and the number of shares of shares subject to such performance stock award. The vesting restrictions
under any performance stock award shall constitute a “substantial risk of forfeiture” under Section 409A of the Code and,
if such goals and objectives are achieved, the distribution of such shares shall be made no later than by the fifteenth (15th) day of
the third (3rd) calendar month next following the end of our fiscal year to which such goals and objectives relate, unless otherwise structured
to comply with Code Section 409A. At the time of such award, the Plan Committee may, in its sole discretion, prescribe additional terms
and conditions or restrictions. The holder of a performance stock award shall have no rights as a shareholder until such time, if any,
as the holder actually receives shares pursuant to the performance stock award.
Performance Unit Awards.
A performance unit award provides for a cash payment to
be made to the holder upon the satisfaction of predetermined individual and/or Company (or affiliate) performance goals or objectives
based on selected performance criteria, based on the number of units awarded to the holder. The Plan Committee shall set forth in the
applicable performance unit award agreement the performance goals and objectives (and the period of time to which such goals and objectives
shall apply) which the holder and/or Company would be required to satisfy before the holder would become entitled to payment, the number
of units awarded to the holder and the dollar value assigned to each such unit. At the time of such award, the Plan Committee may, in
its sole discretion, prescribe additional terms and conditions or restrictions. The holder of a performance unit shall be entitled to
receive a cash payment equal to the dollar value assigned to such unit under the applicable performance unit award agreement if the holder
and/or the Company satisfies (or partially satisfies, if applicable under the applicable performance unit award agreement) the performance
goals and objectives set forth in such performance unit award agreement. If achieved, such payment shall be made no later than by the
fifteenth (15th) day of the third (3rd) calendar month next following the end of the Company’s fiscal year to which such performance
goals and objectives relate, unless otherwise structured to comply with Code Section 409A.
Stock Appreciation Rights.
A SAR provides the participant to whom it is granted the
right to receive, upon its exercise, cash or shares of Common Stock equal to the excess of (A) the fair market value of the number of
shares subject to the SAR on the date of exercise, over (B) the product of the number of shares subject to the SAR multiplied by the base
value for the SAR, as determined by the Plan Committee or the Board of Directors. The Plan Committee shall set forth in the applicable
SAR award agreement the terms and conditions of the SAR, including the base value for the SAR (which shall not be less than the fair market
value of a share on the date of grant), the number of shares subject to the SAR and the period during which the SAR may be exercised and
any other special rules and/or requirements which the Plan Committee imposes on the SAR. No SAR shall be exercisable after the expiration
of ten (10) years from the date of grant. A tandem SAR is a SAR granted in connection with a related option, the exercise of some or all
of which results in termination of the entitlement to purchase some or all of the shares under the related option. If the Plan Committee
grants a SAR which is intended to be a tandem SAR, the tandem SAR shall be granted at the same time as the related option and additional
restrictions apply.
Recapitalization or Reorganization.
Subject to certain restrictions, the 2023 Plan provides
for the adjustment of shares underlying awards previously granted if, and whenever, prior to the expiration or distribution to the holder
of shares underlying an award theretofore granted, the Company shall effect a subdivision or consolidation of our Common Stock or the
payment of a stock dividend on Common Stock without receipt of consideration by the Company. If the Company recapitalizes or otherwise
changes its capital structure, thereafter upon any exercise or satisfaction, as applicable, of a previously granted award, the holder
shall be entitled to receive (or entitled to purchase, if applicable) under such award, in lieu of the number of shares then covered by
such award, the number and class of shares and securities to which the holder would have been entitled pursuant to the terms of the recapitalization
if, immediately prior to such recapitalization, the holder had been the holder of record of the number of shares then covered by such
award. The 2023 Plan also provides for the adjustment of shares underlying awards previously granted in the event of changes to the outstanding
shares by reason of an extraordinary cash dividend, reorganization, merger, consolidation, combination, split-up, spin-off, exchange or
other relevant change in capitalization occurring after the date of the grant of any award, subject to certain restrictions.
Clawback Policy.
All Awards (including on a
retroactive basis) granted under the Plan are subject to the terms of any Company forfeiture, incentive compensation recoupment, clawback
or similar policy as it may be in effect from time to time, as well as any similar provisions of applicable laws, as well as any other
policy of the Company that may apply to the Awards, such as anti-hedging or pledging policies, as they may be in effect from time to time.
In particular, these policies and/or provisions shall include, without limitation, (i) any Company policy established to comply with
applicable laws (including, without limitation, Section 304 of the Sarbanes-Oxley Act and Section 954 of the Dodd-Frank Wall Street Reform
and Consumer Protection Act), and/or (ii) the rules and regulations of the applicable securities exchange or inter-dealer quotation
system on which the shares of Stock or other securities are listed or quoted, and these requirements shall be deemed incorporated by reference
into all outstanding Award Agreements.
Amendment and Termination.
The 2023 Plan shall continue in effect, unless sooner terminated pursuant
to its terms, until the tenth (10th) anniversary of the date on which it became effective (except as to awards outstanding on that date).
The Board of Directors may terminate the 2023 Plan at any time with respect to any shares for which awards have not theretofore been granted;
provided, however, that the 2023 Plan’s termination shall not materially and adversely impair the rights of a holder with respect
to any award theretofore granted without the consent of the holder. The Board of Directors shall have the right to alter or amend the
2023 Plan or any part thereof from time to time; provided, however, that without the approval by a majority of the votes cast at a meeting
of our shareholders at which a quorum representing a majority of our shares entitled to vote generally in the election of directors is
present in person or by proxy, no amendment or modification of the 2023 Plan may (i) except as otherwise expressly provided in law, materially
increase the number of shares subject to the 2023 Plan or the individual award agreements, (ii) materially modify the requirements for
participation, or (iii) amend, modify or suspend certain re-pricing prohibitions or amendment and termination provisions as specified
therein. In addition, no change in any award theretofore granted may be made which would materially and adversely impair the rights of
a holder with respect to such award without the consent of the holder (unless such change is required to cause the 2023 Plan and/or award
to be exempt from or comply with Section 409A of the Code).
As of the date hereof, no awards will have been granted
under the 2023 Plan.
Certain U.S. Federal Income Tax Consequences of the 2023 Plan
The following is a general summary of certain U.S. federal
income tax consequences under current tax law to the Company (to the extent it is subject to U.S. federal income taxation on its net income)
and to participants in the 2023 Plan who are individual citizens or residents of the United States for federal income tax purposes (“U.S.
Participants”) of stock options which are ISOs, or stock options which are NQSOs, unrestricted stock, restricted stock, restricted
stock units, performance stock, performance units and SARs. This summary does not purport to cover all of the special rules that may apply,
including special rules relating to limitations on our ability to deduct certain compensation, special rules relating to deferred compensation,
golden parachutes, U.S. Participants subject to Section 16(b) of the Exchange Act or the exercise of a stock option with previously-acquired
Common Stock. This summary assumes that U.S. Participants will hold their Common Stock as capital assets within the meaning of Section
1221 of the Code. In addition, this summary does not address the foreign, state or local or other tax consequences, or any U.S. federal
non-income tax consequences, inherent in the acquisition, ownership, vesting, exercise, termination or disposition of an award under the
2023 Plan, or shares issued pursuant thereto. Participants are urged to consult with their own tax advisors concerning the tax consequences
to them of an award under the 2023 Plan or shares issued thereunder pursuant to the 2023 Plan.
A U.S. Participant generally does not recognize taxable
income upon the grant of a NQSO if structured to be exempt from or comply with Code Section 409A. Upon the exercise of a NQSO, the U.S.
Participant generally recognizes ordinary compensation income in an amount equal to the excess, if any, of the fair market value of the
shares acquired on the date of exercise over the exercise price thereof, and the Company generally will be entitled to a deduction for
such amount at that time. If the U.S. Participant later sells shares acquired pursuant to the exercise of a NQSO, the U.S. Participant
recognizes a long-term or short-term capital gain or loss, depending on the period for which the shares were held. A long-term capital
gain is generally subject to more favorable tax treatment than ordinary income or a short-term capital gain. The deductibility of capital
losses is subject to certain limitations.
A U.S. Participant generally does not recognize taxable
income upon the grant or, except for purposes of the U.S. alternative minimum tax (“AMT”) the exercise, of an ISO. For purposes
of the AMT, which is payable to the extent it exceeds the U.S. Participant’s regular income tax, upon the exercise of an ISO, the
excess of the fair market value of the shares subject to the ISO over the exercise price is a preference item for AMT purposes. If the
U.S. Participant disposes of the shares acquired pursuant to the exercise of an ISO more than two years after the date of grant and more
than one year after the transfer of the shares to the U.S. Participant, the U.S. Participant generally recognizes a long-term capital
gain or loss, and the Company will not be entitled to a deduction. However, if the U.S. Participant disposes of such shares prior to the
end of either of the required holding periods, the U.S. Participant will have ordinary compensation income equal to the excess (if any)
of the fair market value of such shares on the date of exercise (or, if less, the amount realized on the disposition of such shares) over
the exercise price paid for such shares, and the Company generally will be entitled to deduct such amount.
A U.S. Participant generally does not recognize income
upon the grant of a SAR. The U.S. Participant recognizes ordinary compensation income upon exercise of the SAR equal to the increase in
the value of the underlying shares, and the Company generally will be entitled to a deduction for such amount.
A U.S. Participant generally does not recognize income
on the receipt of a performance stock award, performance unit award, restricted stock unit award or unrestricted stock award until a cash
payment or a distribution of shares is received thereunder. At such time, the U.S. Participant recognizes ordinary compensation income
equal to the excess, if any, of the fair market value of the shares or the amount of cash received over any amount paid therefor, and
the Company generally will be entitled to deduct such amount at such time.
A U.S. Participant who receives a restricted stock award
generally recognizes ordinary compensation income equal to the excess, if any, of the fair market value of such shares at the time the
restriction lapses over any amount paid for the shares. Alternatively, the U.S. Participant may make an election under Section 83(b) of
the Code to be taxed on the fair market value of such shares at the time of grant. The Company generally will be entitled to a deduction
at the same time and in the same amount as the income that is required to be included by the U.S. Participant.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION
OF ZW DATA ACTION TECHNOLIGES INC. 2023 OMNIBUS EQUITY INCENTIVE PLAN
PLEASE NOTE: If your shares are held in street name, your broker, bank, custodian, or
other nominee holder cannot vote your shares on this proposal, unless you direct the holder how to vote, by marking your proxy card or
by following the instructions on the proxy card to vote.
OTHER INFORMATION
The Company’s 2022 annual report on Form 10-K, excluding
exhibits, will be mailed without charge to any stockholder entitled to vote at the meeting, upon written request to Mr. Handong Cheng,
Chief Executive Officer, ZW Data Action Technologies Inc., Room 1811, Xinghuo Keji Plaza, No. 2 Fengfu Road, Fengtai District, Beijing,
PRC 100070, telephone number +86-10-6084-6616.
Important Notice Regarding Delivery of Stockholder Documents
If your shares are held in street name,
your broker, bank, custodian, or other nominee holder may deliver only one copy of this proxy statement and the annual report to stockholders
to multiple stockholders sharing an address, absent contrary instructions from one or more of the stockholders. The Company will deliver
a separate copy of the proxy materials to a stockholder at a shared address to which a single copy was delivered, upon written or oral
request, to Mr. Handong Cheng, Chief Executive Officer, ZW Data Action Technologies Inc., Room 1811, Xinghuo Keji Plaza, No. 2 Fengfu
Road, Fengtai District, Beijing, PRC 100070, telephone number +86-10-6084-6616. Stockholders sharing an address and receiving multiple
copies of the proxy materials who wish to receive a single copy should contact their broker, bank, custodian or other nominee holder.
Other Matters to Be Presented at the Annual Meeting
The Company is not aware any matter to be presented for
action at the Annual Meeting, except as discussed in this proxy statement. The persons authorized by the accompanying form of proxy will
vote in their discretion as to any other matter that comes before the Annual Meeting.
Stockholder Proposals for Next Annual Meeting
Stockholder proposals intended to be included in the proxy
statement for the 2024 annual meeting must be received by the Company within a reasonable time before the Company prints and mails its
proxy statement for the 2024 annual meeting, which is anticipated to occur on or about , 2024.
|
By Order of the Board of Directors, |
|
/s/ Handong Cheng |
|
Handong Cheng |
|
Chairman of the Board, Chief Executive Officer and President |
Appendix A
Form of the Authorized Shares Amendment
The proposed amendment (the “Authorized Shares
Amendment”) would amend and restate Article Three of our Articles of Incorporation, as amended, to read in its entirety as follows:
ARTICLE 3 Authorized Capital Stock. The total number
of shares of stock that the Corporation shall have authority to issue is 70,000,000, consisting of (i) 50,000,000 shares of Common Stock,
par value $0.001 per share (the “Common Stock”) and (ii) 20,000,000 shares of Preferred Stock, par value $0.001 per share
(the “Preferred Stock”).
Appendix B
ZW DATA ACTION TECHNOLOGIES INC.
2023 OMNIBUS EQUITY INCENTIVE PLAN
ZW DATA ACTION TECHNOLOGIES INC.
2023 OMNIBUS EQUITY INCENTIVE PLAN
Article
I
PURPOSE
The purpose of this ZW Data
Action Technologies Inc. 2023 Omnibus Equity Incentive Plan (the “Plan”) is to benefit ZW Data Action Technologies
Inc., a Nevada corporation (the “Company”) and its stockholders, by assisting the Company and its subsidiaries to attract,
retain and provide incentives to key management employees, directors, and consultants of the Company and its Affiliates, and to align
the interests of such service providers with those of the Company’s stockholders. Accordingly, the Plan provides for the granting
of Non-qualified Stock Options, Incentive Stock Options, Restricted Stock Awards, Restricted Stock Unit Awards, Stock Appreciation Rights,
Performance Stock Awards, Performance Unit Awards, Unrestricted Stock Awards, Distribution Equivalent Rights or any combination of the
foregoing.
Article
II
DEFINITIONS
The following definitions
shall be applicable throughout the Plan unless the context otherwise requires:
2.1
“Affiliate” shall mean any corporation which, with respect to the Company, is a “subsidiary corporation”
within the meaning of Section 424(f) of the Code or other entity in which the Company has a controlling interest in such entity or another
entity which is part of a chain of entities in which the Company or each entity has a controlling interest in another entity in the unbroken
chain of entities ending with the applicable entity.
2.2
“Award” shall mean, individually or collectively, any Option, Restricted Stock Award, Restricted Stock
Unit Award, Performance Stock Award, Performance Unit Award, Stock Appreciation Right, Distribution Equivalent Right or Unrestricted Stock
Award.
2.3
“Award Agreement” shall mean a written agreement between the Company and the Holder with respect to an
Award, setting forth the terms and conditions of the Award, as amended.
2.4
“Board” shall mean the Board of Directors of the Company.
2.5
“Base Value” shall have the meaning given to such term in Section 14.2.
2.6
“Cause” shall mean (i) if the Holder is a party to an employment or service agreement with the Company
or an Affiliate which agreement defines “Cause” (or a similar term), “Cause” shall have the same meaning
as provided for in such agreement, or (ii) for a Holder who is not a party to such an agreement, “Cause” shall mean
termination by the Company or an Affiliate of the employment (or other service relationship) of the Holder by reason of the Holder’s
(A) intentional failure to perform reasonably assigned duties, (B) dishonesty or willful misconduct in the performance of the Holder’s
duties, (C) involvement in a transaction which is materially adverse to the Company or an Affiliate, (D) breach of fiduciary duty involving
personal profit, (E) willful violation of any law, rule, regulation or court order (other than misdemeanor traffic violations and misdemeanors
not involving misuse or misappropriation of money or property), (F) commission of an act of fraud or intentional misappropriation or conversion
of any asset or opportunity of the Company or an Affiliate, or (G) material breach of any provision of the Plan or the Holder’s
Award Agreement or any other written agreement between the Holder and the Company or an Affiliate, in each case as determined in good
faith by the Board, the determination of which shall be final, conclusive and binding on all parties.
ZW Data Action Technologies Inc. 2023 Omnibus Equity Incentive Plan
2.7
“Change of Control” shall mean: (i) for a Holder who is a party to an employment or consulting agreement
with the Company or an Affiliate which agreement defines “Change of Control” (or a similar term), “Change of Control”
shall have the same meaning as provided for in such agreement, or (ii) for a Holder who is not a party to such an agreement, “Change
of Control” shall mean the satisfaction of any one or more of the following conditions (and the “Change of Control”
shall be deemed to have occurred as of the first day that any one or more of the following conditions shall have been satisfied):
(a)
Any person (as such term is used in paragraphs 13(d) and 14(d)(2) of the Exchange Act, hereinafter in this definition, “Person”),
other than the Company or an Affiliate or an employee benefit plan of the Company or an Affiliate, becomes the beneficial owner (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%)
of the combined voting power of the Company’s then outstanding securities;
(b)
The closing of a merger, consolidation or other business combination (a “Business Combination”) other
than a Business Combination in which holders of the Shares immediately prior to the Business Combination have substantially the same proportionate
ownership of the common stock or ordinary shares, as applicable, of the surviving corporation immediately after the Business Combination
as immediately before;
(c)
The closing of an agreement for the sale or disposition of all or substantially all of the Company’s assets to any
entity that is not an Affiliate;
(d)
The approval by the holders of shares of Shares of a plan of complete liquidation of the Company, other than a merger of
the Company into any subsidiary or a liquidation as a result of which persons who were stockholders of the Company immediately prior to
such liquidation have substantially the same proportionate ownership of shares of common stock or ordinary shares, as applicable, of the
surviving corporation immediately after such liquidation as immediately before; or
(e)
Within any twenty-four (24) month period, the Incumbent Directors shall cease to constitute at least a majority of the Board
or the board of directors of any successor to the Company; provided, however, that any director elected to the Board, or
nominated for election, by a majority of the Incumbent Directors then still in office, shall be deemed to be an Incumbent Director for
purposes of this paragraph (e), but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result
of either an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of an individual, entity or “group” other than the Board (including, but
not limited to, any such assumption that results from paragraphs (a), (b), (c), or (d) of this definition).
ZW Data Action Technologies Inc. 2023 Omnibus Equity Incentive Plan
2.8
“Code” shall mean the United States of America Internal Revenue Code of 1986, as amended. Reference in
the Plan to any section of the Code shall be deemed to include any amendments or successor provisions to any section and any regulation
under such section.
2.9
“Committee” shall mean a committee comprised of two (2) or more members of the Board who are selected
by the Board as provided in Section 4.1.
2.10
“Company” shall have the meaning given to such term in the introductory paragraph, including any successor
thereto.
2.11 “Consultant”
shall mean any non-Employee (individual or entity) advisor to the Company or an Affiliate who or which has contracted directly with the
Company or an Affiliate to render bona fide consulting or advisory services thereto.
2.12
“Director” shall mean a member of the Board or a member of the board of directors of an Affiliate, in
either case, who is not an Employee.
2.13
“Distribution Equivalent Right” shall mean an Award granted under Article XIII of the Plan which entitles
the Holder to receive bookkeeping credits, cash payments and/or Share distributions equal in amount to the distributions that would have
been made to the Holder had the Holder held a specified number of Shares during the period the Holder held the Distribution Equivalent
Right.
2.14
“Distribution Equivalent Right Award Agreement” shall mean a written agreement between the Company and
a Holder with respect to a Distribution Equivalent Right Award.
2.15 “Effective
Date” shall mean October 18, 2023.
2.16
“Employee” shall mean any employee, including any officer, of the Company or an Affiliate.
2.17
“Exchange Act” shall mean the United States of America Securities Exchange Act of 1934, as amended.
2.18
“Fair Market Value” shall mean, as of any specified date, the closing sales price of the Shares for such
date (or, in the event that the Shares are not traded on such date, on the immediately preceding trading date) on the NASDAQ Stock Market
(“NASDAQ”), as reported by NASDAQ, or such other domestic or foreign national securities exchange on which the Shares may
be listed. If the Shares are not listed on NASDAQ or on a national securities exchange, but are quoted on the OTC Bulletin Board or by
the National Quotation Bureau, the Fair Market Value of the Shares shall be the mean of the highest bid and lowest asked prices per Share
for such date. If the Shares are not quoted or listed as set forth above, Fair Market Value shall be determined by the Board in good faith
by any fair and reasonable means (which means may be set forth with greater specificity in the applicable Award Agreement). The Fair Market
Value of property other than Shares shall be determined by the Board in good faith by any fair and reasonable means consistent with the
requirements of applicable law.
ZW Data Action Technologies Inc. 2023 Omnibus Equity Incentive Plan
2.19
“Family Member” of an individual shall mean any child, stepchild, grandchild, parent, stepparent, 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, including
adoptive relationships, any person sharing the Holder’s household (other than a tenant or employee of the Holder), a trust in which
such persons have more than fifty percent (50%) of the beneficial interest, a foundation in which such persons (or the Holder) control
the management of assets, and any other entity in which such persons (or the Holder) own more than fifty percent (50%) of the voting interests.
2.20
“Holder” shall mean an Employee, Director or Consultant who has been granted an Award or any such individual’s
beneficiary, estate or representative, who has acquired such Award in accordance with the terms of the Plan, as applicable.
2.21 “Incentive
Stock Option” shall mean an Option which is intended by the Committee to constitute an “incentive stock option”
and conforms to the applicable provisions of Section 422 of the Code.
2.22 “Incumbent Director” shall mean, with respect to any period of time specified under the Plan for purposes
of determining whether or not a Change of Control has occurred, the individuals who were members of the Board at the beginning of such
period.
2.23 “Non-qualified Stock Option” shall mean an Option which is not an Incentive Stock Option or which is
designated as an Incentive Stock Option but does not meet the applicable requirements of Section 422 of the Code.
2.24 “Option” shall mean an Award granted under Article VII of the Plan of an option to purchase Shares and
shall include both Incentive Stock Options and Non-qualified Stock Options.
2.25
“Option Agreement” shall mean a written agreement between the Company and a Holder with respect to an
Option.
2.26
“Performance Criteria” shall mean the criteria selected by the Committee for purposes of establishing
the Performance Goal(s) for a Holder for a Performance Period.
ZW Data Action Technologies Inc. 2023 Omnibus Equity Incentive Plan
2.27
“Performance Goals” shall mean, for a Performance Period, the written goal or goals established by the
Committee for the Performance Period based upon the Performance Criteria, which may be related to the performance of the Holder, the Company
or an Affiliate.
2.28 “Performance
Period” shall mean one or more periods of time, which may be of varying and overlapping durations, selected by the Committee,
over which the attainment of the Performance Goals shall be measured for purposes of determining a Holder’s right to, and the payment
of, a Performance Stock Award or a Performance Unit Award.
2.29
“Performance Stock Award” or “Performance Stock” shall mean an Award granted under
Article XII of the Plan under which, upon the satisfaction of predetermined Performance Goals, Shares are paid to the Holder.
2.30
“Performance Stock Agreement” shall mean a written agreement between the Company and a Holder with respect
to a Performance Stock Award.
2.31
“Performance Unit” shall mean a Unit awarded to a Holder pursuant to a Performance Unit Award.
2.32
“Performance Unit Award” shall mean an Award granted under Article XI of the Plan under which, upon the
satisfaction of predetermined Performance Goals, a cash payment shall be made to the Holder, based on the number of Units awarded to the
Holder.
2.33
“Performance Unit Agreement” shall mean a written agreement between the Company and a Holder with respect
to a Performance Unit Award.
2.34
“Plan” shall mean this ZW Data Action Technologies Inc. 2023 Omnibus Equity Incentive Plan, as amended
from time to time, together with each of the Award Agreements utilized hereunder.
2.35
“Restricted Stock Award” and “Restricted Stock” shall mean an Award granted under
Article VIII of the Plan of Shares, the transferability of which by the Holder is subject to Restrictions.
2.36
“Restricted Stock Agreement” shall mean a written agreement between the Company and a Holder with respect
to a Restricted Stock Award.
2.37 “Restricted
Stock Unit Award” and “RSUs” shall refer to an Award granted under Article X of the Plan under which, upon
the satisfaction of predetermined individual service-related vesting requirements, a cash payment shall be made to the Holder, based
on the number of Units awarded to the Holder.
2.38
“Restricted Stock Unit Agreement” shall mean a written agreement between the Company and a Holder with
respect to a Restricted Stock Award.
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2.39 “Restriction
Period” shall mean the period of time for which Shares subject to a Restricted Stock Award shall be subject to Restrictions,
as set forth in the applicable Restricted Stock Agreement.
2.40
“Restrictions” shall mean the forfeiture, transfer and/or other restrictions applicable to Shares awarded
to an Employee, Director or Consultant under the Plan pursuant to a Restricted Stock Award and set forth in a Restricted Stock Agreement.
2.41
“Rule 16b-3” shall mean Rule 16b-3 promulgated by the Securities and Exchange Commission under the Exchange
Act, as such may be amended from time to time, and any successor rule, regulation or statute fulfilling the same or a substantially similar
function.
2.42
“Shares” or “Stock” shall mean the common stock of the Company, par value $0.001 per
share.
2.43
“Share Reserve” has the meaning set forth in Section 5.1.
2.44
“Stock Appreciation Right” or “SAR” shall mean an Award granted under Article XIV
of the Plan of a right, granted alone or in connection with a related Option, to receive a payment equal to the increase in value of a
specified number of Shares between the date of Award and the date of exercise.
2.45
“Stock Appreciation Right Agreement” shall mean a written agreement between the Company and a Holder
with respect to a Stock Appreciation Right.
2.46
“Tandem Stock Appreciation Right” shall mean a Stock Appreciation Right granted in connection with a
related Option, the exercise of some or all of which results in termination of the entitlement to purchase some or all of the Shares under
the related Option, all as set forth in Article XIV.
2.47
“Ten Percent Stockholder” shall mean an Employee who, at the time an Option is granted to him or her,
owns shares possessing more than ten percent (10%) of the total combined voting power of all classes of shares of the Company or of any
parent corporation or subsidiary corporation thereof (both as defined in Section 424 of the Code), within the meaning of Section 422(b)(6)
of the Code.
2.48
“Termination of Service” shall mean a termination of a Holder’s employment with, or status as a
Director or Consultant of, the Company or an Affiliate, as applicable, for any reason, including, without limitation, Total and Permanent
Disability or death, except as provided in Section 6.4. In the event Termination of Service shall constitute a payment event with respect
to any Award subject to Code Section 409A, Termination of Service shall only be deemed to occur upon a “separation from service”
as such term is defined under Code Section 409A and applicable authorities.
2.49
“Total and Permanent Disability” of an individual shall mean the inability of such individual to engage
in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result
in death or which has lasted or can be expected to last for a continuous period of not less than twelve (12) months, within the meaning
of Section 22I(3) of the Code.
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2.50
“Unit” shall mean a bookkeeping unit, which represents such monetary amount as shall be designated by
the Committee in each Performance Unit Agreement, or represents one Share for purposes of each Restricted Stock Unit Award.
2.51
“Unrestricted Stock Award” shall mean an Award granted under Article IX of the Plan of Shares which are
not subject to Restrictions.
2.52
“Unrestricted Stock Agreement” shall mean a written agreement between the Company and a Holder with respect
to an Unrestricted Stock Award.
Article
III
EFFECTIVE DATE OF PLAN
The Plan shall be effective
as of the Effective Date, provided that the Plan is approved by the stockholders of the Company within twelve (12) months of such date.
Article
IV
ADMINISTRATION
4.1
Composition of Committee. The Plan shall be administered by the Committee, which shall be appointed by the Board.
If necessary, in the Board’s discretion, to comply with Rule 16b-3 under the Exchange Act or relevant securities exchange or inter-dealer
quotation service, the Committee shall consist solely of two (2) or more Directors who are each (i) “non-employee directors”
within the meaning of Rule 16b-3 and (ii) “independent” for purposes of any applicable listing requirements. If a member of
the Committee shall be eligible to receive an Award under the Plan, such Committee member shall have no authority hereunder with respect
to his or her own Award.
4.2
Powers. Subject to the other provisions of the Plan, the Committee shall have the sole authority, in its discretion,
to make all determinations under the Plan, including but not limited to (i) determining which Employees, Directors or Consultants shall
receive an Award, (ii) the time or times when an Award shall be made (the date of grant of an Award shall be the date on which the Award
is awarded by the Committee), (iii) what type of Award shall be granted, (iv) the term of an Award, (v) the date or dates on which an
Award vests, (vi) the form of any payment to be made pursuant to an Award, (vii) the terms and conditions of an Award (including the forfeiture
of the Award, and/or any financial gain, if the Holder of the Award violates any applicable restrictive covenant thereof), (viii) the
Restrictions under a Restricted Stock Award, (ix) the number of Shares which may be issued under an Award, (x) Performance Goals applicable
to any Award and certification of the achievement of such goals, and (xi) the waiver of any Restrictions or Performance Goals, subject
in all cases to compliance with applicable laws. In making such determinations the Committee may take into account the nature of the services
rendered by the respective Employees, Directors and Consultants, their present and potential contribution to the Company’s (or the
Affiliate’s) success and such other factors as the Committee in its discretion may deem relevant.
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4.3
Additional Powers. The Committee shall have such additional powers as are delegated to it under the other provisions
of the Plan. Subject to the express provisions of the Plan, the Committee is authorized to construe the Plan and the respective Award
Agreements executed hereunder, to prescribe such rules and regulations relating to the Plan as it may deem advisable to carry out the
intent of the Plan, to determine the terms, restrictions and provisions of each Award and to make all other determinations necessary or
advisable for administering the Plan. The Committee may correct any defect or supply any omission or reconcile any inconsistency in any
Award Agreement in the manner and to the extent the Committee shall deem necessary, appropriate or expedient to carry it into effect.
The determinations of the Committee on the matters referred to in this Article IV shall be conclusive and binding on the Company and all
Holders.
4.4
Committee Action. Subject to compliance with all applicable laws, action by the Committee shall require the consent
of a majority of the members of the Committee, expressed either orally at a meeting of the Committee or in writing in the absence of a
meeting. No member of the Committee shall have any liability for any good faith action, inaction or determination in connection with the
Plan.
Article
V
SHARES SUBJECT TO PLAN AND LIMITATIONS THEREON
5.1
Authorized Shares and Award Limits. The Committee may from time to time grant Awards to one or more Employees, Directors
and/or Consultants determined by it to be eligible for participation in the Plan in accordance with the provisions of Article VI.
Subject to adjustment provided under Article XV, the maximum number of Shares that are available for Award under this Plan shall be equal
to One Million Five Hundred Thousand (1,500,000) as of the Effective Date (the “Share Reserve”). Shares shall be deemed
to have been issued under the Plan solely to the extent actually issued and delivered pursuant to an Award. To the extent that an Award
lapses, expires, is canceled, is terminated unexercised or ceases to be exercisable for any reason, or the rights of its Holder terminate,
any Shares subject to such Award shall again be available for the grant of a new Award.
5.2
Types of Shares. The Shares to be issued pursuant to the grant or exercise of an Award may consist of authorized
but unissued Shares, Shares purchased on the open market or Shares previously issued and outstanding and reacquired by the Company.
Article
VI
ELIGIBILITY AND TERMINATION OF SERVICE
6.1
Eligibility. Awards made under the Plan may be granted solely to individuals or entities who, at the time of grant,
are Employees, Directors or Consultants. An Award may be granted on more than one occasion to the same Employee, Director or Consultant,
and, subject to the limitations set forth in the Plan, such Award may include, a Non-qualified Stock Option, a Restricted Stock Award,
a Restricted Stock Unit Award, an Unrestricted Stock Award, a Distribution Equivalent Right Award, a Performance Stock Award, a Performance
Unit Award, a Stock Appreciation Right, a Tandem Stock Appreciation Right, or any combination thereof, and solely for Employees, an Incentive
Stock Option.
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6.2
Termination of Service. Except to the extent inconsistent with the terms of the applicable Award Agreement and/or
the provisions of Section 6.3 or 6.4, the following terms and conditions shall apply with respect to a Holder’s Termination of Service
with the Company or an Affiliate, as applicable:
(a)
The Holder’s rights, if any, to exercise any then exercisable Options and/or Stock Appreciation Rights shall terminate:
(i) If
such termination is for a reason other than the Holder’s Total and Permanent Disability or death, ninety (90) days after the date
of such Termination of Service;
(ii) If such termination is on account of the Holder’s Total and Permanent Disability, one (1) year after the date of such
Termination of Service; or
(iii) If
such termination is on account of the Holder’s death, one (1) year after the date of the Holder’s death.
Upon such applicable date the Holder (and such
Holder’s estate, designated beneficiary or other legal representative) shall forfeit any rights or interests in or with respect
to any such Options and Stock Appreciation Rights. Notwithstanding the foregoing, the Committee, in its sole discretion, may provide for
a different time period in the Award Agreement, or may extend the time period, following a Termination of Service, during which the Holder
has the right to exercise any vested Non-qualified Stock Option or Stock Appreciation Right, which time period may not extend beyond the
expiration date of the Award term.
(b)
In the event of a Holder’s Termination of Service for any reason prior to the actual or deemed satisfaction and/or
lapse of the Restrictions, vesting requirements, terms and conditions applicable to a Restricted Stock Award and/or Restricted Stock Unit
Award, such Restricted Stock and/or RSUs shall immediately be canceled, and the Holder (and such Holder’s estate, designated beneficiary
or other legal representative) shall forfeit any rights or interests in and with respect to any such Restricted Stock and/or RSUs. Notwithstanding
the immediately preceding sentence, the Committee, in its sole discretion, may determine, prior to or within thirty (30) days after the
date of such Termination of Service that all or a portion of any such Holder’s Restricted Stock and/or RSUs shall not be so canceled
and forfeited.
6.3 Special
Termination Rule. Except to the extent inconsistent with the terms of the applicable Award Agreement, and notwithstanding anything
to the contrary contained in this Article VI, if a Holder’s employment with, or status as a Director of, the Company or an Affiliate
shall terminate, and if, within ninety (90) days of such termination, such Holder shall become a Consultant, such Holder’s rights
with respect to any Award or portion thereof granted thereto prior to the date of such termination may be preserved, if and to the extent
determined by the Committee in its sole discretion, as if such Holder had been a Consultant for the entire period during which such Award
or portion thereof had been outstanding. Should the Committee effect such determination with respect to such Holder, for all purposes
of the Plan, such Holder shall not be treated as if his or her employment or Director status had terminated until such time as his or
her Consultant status shall terminate, in which case his or her Award, as it may have been reduced in connection with the Holder’s
becoming a Consultant, shall be treated pursuant to the provisions of Section 6.2, provided, however, that any such Award which is intended
to be an Incentive Stock Option shall, upon the Holder’s no longer being an Employee, automatically convert to a Non-qualified
Stock Option. Should a Holder’s status as a Consultant terminate, and if, within ninety (90) days of such termination, such Holder
shall become an Employee or a Director, such Holder’s rights with respect to any Award or portion thereof granted thereto prior
to the date of such termination may be preserved, if and to the extent determined by the Committee in its sole discretion, as if such
Holder had been an Employee or a Director, as applicable, for the entire period during which such Award or portion thereof had been outstanding,
and, should the Committee effect such determination with respect to such Holder, for all purposes of the Plan, such Holder shall not
be treated as if his or her Consultant status had terminated until such time as his or her employment with the Company or an Affiliate,
or his or her Director status, as applicable, shall terminate, in which case his or her Award shall be treated pursuant to the provisions
of Section 6.2.
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6.4
Termination of Service for Cause. Notwithstanding anything in this Article VI or elsewhere in the Plan to the
contrary, and unless a Holder’s Award Agreement specifically provides otherwise, in the event of a Holder’s Termination of
Service for Cause, all of such Holder’s then outstanding Awards shall expire immediately and be forfeited in their entirety upon
such Termination of Service.
Article
VII
OPTIONS
7.1
Option Period. The term of each Option shall be as specified in the Option Agreement; provided, however,
that except as set forth in Section 7.3, no Option shall be exercisable after the expiration of ten (10) years from the date of its grant.
7.2
Limitations on Exercise of Option. An Option shall be exercisable in whole or in such installments and at such times
as specified in the Option Agreement.
7.3
Special Limitations on Incentive Stock Options. To the extent that the aggregate Fair Market Value (determined at
the time the respective Incentive Stock Option is granted) of Shares with respect to which Incentive Stock Options are exercisable for
the first time by an individual during any calendar year under all plans of the Company and any parent corporation or subsidiary corporation
thereof (both as defined in Section 424 of the Code) which provide for the grant of Incentive Stock Options exceeds One Hundred Thousand
Dollars ($100,000) (or such other individual limit as may be in effect under the Code on the date of grant), the portion of such Incentive
Stock Options that exceeds such threshold shall be treated as Non-qualified Stock Options. The Committee shall determine, in accordance
with applicable provisions of the Code, Treasury Regulations and other administrative pronouncements, which of a Holder’s Options,
which were intended by the Committee to be Incentive Stock Options when granted to the Holder, will not constitute Incentive Stock Options
because of such limitation, and shall notify the Holder of such determination as soon as practicable after such determination. No Incentive
Stock Option shall be granted to an Employee if, at the time the Incentive Stock Option is granted, such Employee is a Ten Percent Stockholder,
unless (i) at the time such Incentive Stock Option is granted the Option price is at least one hundred ten percent (110%) of the Fair
Market Value of the Shares subject to the Incentive Stock Option, and (ii) such Incentive Stock Option by its terms is not exercisable
after the expiration of five (5) years from the date of grant. No Incentive Stock Option shall be granted more than ten (10) years from
the earlier of the Effective Date or date on which the Plan is approved by the Company’s stockholders. The designation by the Committee
of an Option as an Incentive Stock Option shall not guarantee the Holder that the Option will satisfy the applicable requirements for
“incentive stock option” status under Section 422 of the Code.
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7.4 Option
Agreement. Each Option shall be evidenced by an Option Agreement in such form and containing such provisions not inconsistent with
the other provisions of the Plan as the Committee from time to time shall approve, including, but not limited to, provisions intended
to qualify an Option as an Incentive Stock Option. An Option Agreement may provide for the payment of the Option price, in whole or in
part, by the delivery of a number of Shares (plus cash if necessary) that have been owned by the Holder for at least six (6) months and
having a Fair Market Value equal to such Option price, or such other forms or methods as the Committee may determine from time to time,
in each case, subject to such rules and regulations as may be adopted by the Committee. Each Option Agreement shall, solely to the extent
inconsistent with the provisions of Sections 6.2, 6.3, and 6.4, as applicable, specify the effect of Termination of Service on the exercisability
of the Option. Moreover, without limiting the generality of the foregoing, a Non-qualified Stock Option Agreement may provide for a “cashless
exercise” of the Option, in whole or in part, by (a) establishing procedures whereby the Holder, by a properly-executed written
notice, directs (i) an immediate market sale or margin loan as to all or a part of Shares to which he is entitled to receive upon
exercise of the Option, pursuant to an extension of credit by the Company to the Holder of the Option price, (ii) the delivery of
the Shares from the Company directly to a brokerage firm and (iii) the delivery of the Option price from sale or margin loan proceeds
from the brokerage firm directly to the Company, or (b) reducing the number of Shares to be issued upon exercise of the Option by
the number of such Shares having an aggregate Fair Market Value equal to the Option price (or portion thereof to be so paid) as of the
date of the Option’s exercise. An Option Agreement may also include provisions relating to: (i) subject to the provisions
hereof, accelerated vesting of Options, including but not limited to, upon the occurrence of a Change of Control, (ii) tax matters (including
provisions covering any applicable Employee wage withholding requirements and requiring additional “gross-up” payments to
Holders to meet any excise taxes or other additional income tax liability imposed as a result of a payment made upon a Change of Control
resulting from the operation of the Plan or of such Option Agreement) and (iii) any other matters not inconsistent with the terms and
provisions of the Plan that the Committee shall in its sole discretion determine. The terms and conditions of the respective Option Agreements
need not be identical.
7.5
Option Price and Payment. The price at which an Share may be purchased upon exercise of an Option shall be determined
by the Committee; provided, however, that such Option price (i) shall not be less than the Fair Market Value of an
Share on the date such Option is granted (or 110% of Fair Market Value for an Incentive Stock Option held by Ten Percent Stockholder,
as provided in Section 7.3), and (ii) shall be subject to adjustment as provided in Article XV. The Option or portion thereof may
be exercised by delivery of an irrevocable notice of exercise to the Company. The Option price for the Option or portion thereof shall
be paid in full in the manner prescribed by the Committee as set forth in the Plan and the applicable Option Agreement, which manner,
with the consent of the Committee, may include the withholding of Shares otherwise issuable in connection with the exercise of the Option.
Separate share certificates shall be issued by the Company for those Shares acquired pursuant to the exercise of an Incentive Stock Option
and for those Shares acquired pursuant to the exercise of a Non-qualified Stock Option.
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7.6
Stockholder Rights and Privileges. The Holder of an Option shall be entitled to all the privileges and rights of
a stockholder of the Company solely with respect to such Shares as have been purchased under the Option and for which share certificates
have been registered in the Holder’s name.
7.7
Options and Rights in Substitution for Stock or Options Granted by Other Corporations. Options may be granted under
the Plan from time to time in substitution for stock options held by individuals employed by entities who become Employees, Directors
or Consultants as a result of a merger or consolidation of the employing entity with the Company or any Affiliate, or the acquisition
by the Company or an Affiliate of the assets of the employing entity, or the acquisition by the Company or an Affiliate of stock or shares
of the employing entity with the result that such employing entity becomes an Affiliate.
7.8
Prohibition Against Re-Pricing. Except to the extent (i) approved in advance by holders of a majority of the
shares of the Company entitled to vote generally in the election of directors, or (ii) as a result of any Change of Control or any
adjustment as provided in Article XV, the Committee shall not have the power or authority to reduce, whether through amendment or
otherwise, the exercise price under any outstanding Option or Stock Appreciation Right, or to grant any new Award or make any payment
of cash in substitution for or upon the cancellation of Options and/or Stock Appreciation Rights previously granted.
Article
VIII
RESTRICTED STOCK AWARDS
8.1 Award.
A Restricted Stock Award shall constitute an Award of Shares to the Holder as of the date of the Award which are subject to a “substantial
risk of forfeiture” as defined under Section 83 of the Code during the specified Restriction Period. At the time a Restricted Stock
Award is made, the Committee shall establish the Restriction Period applicable to such Award. Each Restricted Stock Award may have a
different Restriction Period, in the discretion of the Committee. The Restriction Period applicable to a particular Restricted Stock
Award shall not be changed except as permitted by Section 8.2.
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8.2 Terms
and Conditions. At the time any Award is made under this Article VIII, the Company and the Holder shall enter into a Restricted Stock
Agreement setting forth each of the matters contemplated thereby and such other matters as the Committee may determine to be appropriate.
The Company shall cause the Shares to be issued in the name of Holder, either by book-entry registration or issuance of one or more stock
certificates evidencing the Shares, which Shares or certificates shall be held by the Company or the stock transfer agent or brokerage
service selected by the Company to provide services for the Plan. The Shares shall be restricted from transfer and shall be subject to
an appropriate stop-transfer order, and if any certificate is issued, such certificate shall bear an appropriate legend referring to
the restrictions applicable to the Shares. After any Shares vest, the Company shall deliver the vested Shares, in book-entry or certificated
form in the Company’s sole discretion, registered in the name of Holder or his or her legal representatives, beneficiaries or heirs,
as the case may be, less any Shares withheld to pay withholding taxes. If provided for under the Restricted Stock Agreement, the Holder
shall have the right to vote Shares subject thereto and to enjoy all other stockholder rights, including the entitlement to receive dividends
on the Shares during the Restriction Period. At the time of such Award, the Committee may, in its sole discretion, prescribe additional
terms and conditions or restrictions relating to Restricted Stock Awards, including, but not limited to, rules pertaining to the effect
of Termination of Service prior to expiration of the Restriction Period. Such additional terms, conditions or restrictions shall, to
the extent inconsistent with the provisions of Sections 6.2, 6.3 and 6.4, as applicable, be set forth in a Restricted Stock Agreement
made in conjunction with the Award. Such Restricted Stock Agreement may also include provisions relating to: (i) subject to the
provisions hereof, accelerated vesting of Awards, including but not limited to accelerated vesting upon the occurrence of a Change of
Control, (ii) tax matters (including provisions covering any applicable Employee wage withholding requirements and requiring additional
“gross-up” payments to Holders to meet any excise taxes or other additional income tax liability imposed as a result of a
payment made in connection with a Change of Control resulting from the operation of the Plan or of such Restricted Stock Agreement) and
(iii) any other matters not inconsistent with the terms and provisions of the Plan that the Committee shall in its sole discretion
determine. The terms and conditions of the respective Restricted Stock Agreements need not be identical. All Shares delivered to a Holder
as part of a Restricted Stock Award shall be delivered and reported by the Company or the Affiliate, as applicable, to the Holder at
the time of vesting.
8.3 Payment
for Restricted Stock. The Committee shall determine the amount and form of any payment from a Holder for Shares received pursuant
to a Restricted Stock Award, if any, provided that in the absence of such a determination, a Holder shall not be required to make any
payment for Shares received pursuant to a Restricted Stock Award, except to the extent otherwise required by law.
Article
IX
UNRESTRICTED STOCK AWARDS
9.1 Award.
Shares may be awarded (or sold) to Employees, Directors or Consultants under the Plan which are not subject to Restrictions of any kind,
in consideration for past services rendered thereby to the Company or an Affiliate or for other valid consideration.
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9.2
Terms and Conditions. At the time any Award is made under this Article IX, the Company and the Holder shall enter
into an Unrestricted Stock Agreement setting forth each of the matters contemplated hereby and such other matters as the Committee may
determine to be appropriate.
9.3
Payment for Unrestricted Stock. The Committee shall determine the amount and form of any payment from a Holder for
Shares received pursuant to an Unrestricted Stock Award, if any, provided that in the absence of such a determination, a Holder shall
not be required to make any payment for Shares received pursuant to an Unrestricted Stock Award, except to the extent otherwise required
by law.
Article
X
RESTRICTED STOCK UNIT AWARDS
10.1 Award.
A Restricted Stock Unit Award shall constitute a promise to grant Shares (or cash equal to the Fair Market Value of Shares) to the Holder
at the end of a specified Restriction Period. At the time a Restricted Stock Unit Award is made, the Committee shall establish the Restriction
Period applicable to such Award. Each Restricted Stock Unit Award may have a different Restriction Period, in the discretion of the Committee.
A Restricted Stock Unit shall not constitute an equity interest in the Company and shall not entitle the Holder to voting rights, dividends
or any other rights associated with ownership of Shares prior to the time the Holder shall receive a distribution of Shares pursuant
to Section 10.3.
10.2 Terms
and Conditions. At the time any Award is made under this Article X, the Company and the Holder shall enter into a Restricted Stock
Unit Agreement setting forth each of the matters contemplated thereby and such other matters as the Committee may determine to be appropriate.
The Restricted Stock Unit Agreement shall set forth the individual service-based vesting requirement which the Holder would be required
to satisfy before the Holder would become entitled to distribution pursuant to Section 10.3 and the number of Units awarded to the Holder.
Such conditions shall be sufficient to constitute a “substantial risk of forfeiture” as such term is defined under Section
409A of the Code. At the time of such Award, the Committee may, in its sole discretion, prescribe additional terms and conditions or
restrictions relating to Restricted Stock Unit Awards in the Restricted Stock Unit Agreement, including, but not limited to, rules pertaining
to the effect of Termination of Service prior to expiration of the applicable vesting period. The terms and conditions of the respective
Restricted Stock Unit Agreements need not be identical.
10.3 Distributions of Shares. The Holder of a Restricted Stock Unit shall be entitled to receive a cash payment equal
to the Fair Market Value of an Share, or one Share, as determined in the sole discretion of the Committee and as set forth in the Restricted
Stock Unit Agreement, for each Restricted Stock Unit subject to such Restricted Stock Unit Award, if the Holder satisfies the applicable
vesting requirement. Such distribution shall be made no later than by the fifteenth (15th) day of the third (3rd)
calendar month next following the end of the calendar year in which the Restricted Stock Unit first becomes vested (i.e., no longer subject
to a “substantial risk of forfeiture”).
ZW Data Action Technologies Inc. 2023 Omnibus Equity Incentive Plan
Article
XI
PERFORMANCE UNIT AWARDS
11.1 Award.
A Performance Unit Award shall constitute an Award under which, upon the satisfaction of predetermined individual and/or Company (and/or
Affiliate) Performance Goals based on selected Performance Criteria, a cash payment shall be made to the Holder, based on the number
of Units awarded to the Holder. At the time a Performance Unit Award is made, the Committee shall establish the Performance Period and
applicable Performance Goals. Each Performance Unit Award may have different Performance Goals, in the discretion of the Committee. A
Performance Unit Award shall not constitute an equity interest in the Company and shall not entitle the Holder to voting rights, dividends
or any other rights associated with ownership of Shares.
11.2 Terms and Conditions. At the time any Award is made under this Article XI, the Company and the Holder shall enter
into a Performance Unit Agreement setting forth each of the matters contemplated thereby and such other matters as the Committee may determine
to be appropriate. The Committee shall set forth in the applicable Performance Unit Agreement the Performance Period, Performance Criteria
and Performance Goals which the Holder and/or the Company would be required to satisfy before the Holder would become entitled to payment
pursuant to Section 11.3, the number of Units awarded to the Holder and the dollar value or formula assigned to each such Unit. Such payment
shall be subject to a “substantial risk of forfeiture” under Section 409A of the Code. At the time of such Award, the Committee
may, in its sole discretion, prescribe additional terms and conditions or restrictions relating to Performance Unit Awards, including,
but not limited to, rules pertaining to the effect of Termination of Service prior to expiration of the applicable performance period.
The terms and conditions of the respective Performance Unit Agreements need not be identical.
11.3 Payments.
The Holder of a Performance Unit shall be entitled to receive a cash payment equal to the dollar value assigned to such Unit under the
applicable Performance Unit Agreement if the Holder and/or the Company satisfy (or partially satisfy, if applicable under the applicable
Performance Unit Agreement) the Performance Goals set forth in such Performance Unit Agreement. All payments shall be made no later than
by the fifteenth (15th) day of the third (3rd) calendar month next following the end of the Company’s fiscal
year to which such performance goals and objectives relate.
Article
XII
PERFORMANCE STOCK AWARDS
12.1 Award.
A Performance Stock Award shall constitute a promise to grant Shares (or cash equal to the Fair Market Value of Shares) to the Holder
at the end of a specified Performance Period subject to achievement of specified Performance Goals. At the time a Performance Stock Award
is made, the Committee shall establish the Performance Period and applicable Performance Goals based on selected Performance Criteria.
Each Performance Stock Award may have different Performance Goals, in the discretion of the Committee. A Performance Stock Award shall
not constitute an equity interest in the Company and shall not entitle the Holder to voting rights, dividends or any other rights associated
with ownership of Shares unless and until the Holder shall receive a distribution of Shares pursuant to Section 11.3.
ZW Data Action Technologies Inc. 2023 Omnibus Equity Incentive Plan
12.2 Terms
and Conditions. At the time any Award is made under this Article XII, the Company and the Holder shall enter into a Performance Stock
Agreement setting forth each of the matters contemplated thereby and such other matters as the Committee may determine to be appropriate.
The Committee shall set forth in the applicable Performance Stock Agreement the Performance Period, selected Performance Criteria and
Performance Goals which the Holder and/or the Company would be required to satisfy before the Holder would become entitled to the receipt
of Shares pursuant to such Holder’s Performance Stock Award and the number of Shares subject to such Performance Stock Award. Such
distribution shall be subject to a “substantial risk of forfeiture” under Section 409A of the Code. If such Performance Goals
are achieved, the distribution of Shares (or the payment of cash, as determined in the sole discretion of the Committee), shall be made
no later than by the fifteenth (15th) day of the third (3rd) calendar month next following the end of the Company’s
fiscal year to which such goals and objectives relate. At the time of such Award, the Committee may, in its sole discretion, prescribe
additional terms and conditions or restrictions relating to Performance Stock Awards, including, but not limited to, rules pertaining
to the effect of the Holder’s Termination of Service prior to the expiration of the applicable performance period. The terms and
conditions of the respective Performance Stock Agreements need not be identical.
12.3 Distributions
of Shares. The Holder of a Performance Stock Award shall be entitled to receive a cash payment equal to the Fair Market Value of
a Share, or one Share, as determined in the sole discretion of the Committee, for each Performance Stock Award subject to such Performance
Stock Agreement, if the Holder satisfies the applicable vesting requirement. Such distribution shall be made no later than by the fifteenth
(15th) day of the third (3rd) calendar month next following the end of the Company’s fiscal year to which
such performance goals and objectives relate.
Article
XIII
DISTRIBUTION EQUIVALENT RIGHTS
13.1 Award.
A Distribution Equivalent Right shall entitle the Holder to receive bookkeeping credits, cash payments and/or Share distributions equal
in amount to the distributions that would have been made to the Holder had the Holder held a specified number of Shares during the specified
period of the Award.
13.2 Terms
and Conditions. At the time any Award is made under this Article XIII, the Company and the Holder shall enter into a Distribution
Equivalent Rights Award Agreement setting forth each of the matters contemplated thereby and such other matters as the Committee may
determine to be appropriate. The Committee shall set forth in the applicable Distribution Equivalent Rights Award Agreement the terms
and conditions, if any, including whether the Holder is to receive credits currently in cash, is to have such credits reinvested (at
Fair Market Value determined as of the date of reinvestment) in additional Shares or is to be entitled to choose among such alternatives.
Such receipt shall be subject to a “substantial risk of forfeiture” under Section 409A of the Code and, if such Award becomes
vested, the distribution of such cash or Shares shall be made no later than by the fifteenth (15th) day of the third (3rd)
calendar month next following the end of the Company’s fiscal year in which the Holder’s interest in the Award vests. Distribution
Equivalent Rights Awards may be settled in cash or in Shares, as set forth in the applicable Distribution Equivalent Rights Award Agreement.
A Distribution Equivalent Rights Award may, but need not be, awarded in tandem with another Award (other than an Option or a SAR), whereby,
if so awarded, such Distribution Equivalent Rights Award shall expire, terminate or be forfeited by the Holder, as applicable, under
the same conditions as under such other Award.
ZW Data Action Technologies Inc. 2023 Omnibus Equity Incentive Plan
13.3 Interest
Equivalents. The Distribution Equivalent Rights Award Agreement for a Distribution Equivalent Rights Award may provide for the crediting
of interest on a Distribution Rights Award to be settled in cash at a future date (but in no event later than by the fifteenth (15th)
day of the third (3rd) calendar month next following the end of the Company’s fiscal year in which such interest is
credited and vested), at a rate set forth in the applicable Distribution Equivalent Rights Award Agreement, on the amount of cash payable
thereunder.
Article
XIV
STOCK APPRECIATION RIGHTS
14.1 Award.
A Stock Appreciation Right shall constitute a right, granted alone or in connection with a related Option, to receive a payment equal
to the increase in value of a specified number of Shares between the date of Award and the date of exercise.
14.2 Terms
and Conditions. At the time any Award is made under this Article XIV, the Company and the Holder shall enter into a Stock Appreciation
Right Agreement setting forth each of the matters contemplated thereby and such other matters as the Committee may determine to be appropriate.
The Committee shall set forth in the applicable Stock Appreciation Right Agreement the terms and conditions of the Stock Appreciation
Right, including (i) the base value (the “Base Value”) for the Stock Appreciation Right, which shall be not less than
the Fair Market Value of an Share on the date of grant of the Stock Appreciation Right, (ii) the number of Shares subject to the Stock
Appreciation Right, (iii) the period during which the Stock Appreciation Right may be exercised; provided, however, that
no Stock Appreciation Right shall be exercisable after the expiration of ten (10) years from the date of its grant, and (iv) any other
special rules and/or requirements which the Committee imposes upon the Stock Appreciation Right. Upon the exercise of some or all of
the portion of a Stock Appreciation Right, the Holder shall receive a payment from the Company, in cash or in the form of Shares having
an equivalent Fair Market Value or in a combination of both, as determined in the sole discretion of the Committee, equal to the product
of:
ZW Data Action Technologies Inc. 2023 Omnibus Equity Incentive Plan
(a)
The excess of (i) the Fair Market Value of an Share on the date of exercise, over (ii) the Base Value, multiplied by,
(b)
The number of Shares with respect to which the Stock Appreciation Right is exercised.
14.3 Tandem
Stock Appreciation Rights. If the Committee grants a Stock Appreciation Right which is intended to be a Tandem Stock Appreciation
Right, the Tandem Stock Appreciation Right shall be granted at the same time as the related Option, and the following special rules shall
apply:
(a)
The Base Value shall be equal to or greater than the per Share exercise price under the related Option;
(b)
The Tandem Stock Appreciation Right may be exercised for all or part of the Shares which are subject to the related Option,
but solely upon the surrender by the Holder of the Holder’s right to exercise the equivalent portion of the related Option (and
when a Share is purchased under the related Option, an equivalent portion of the related Tandem Stock Appreciation Right shall be canceled);
(c)
The Tandem Stock Appreciation Right shall expire no later than the date of the expiration of the related Option;
(d)
The value of the payment with respect to the Tandem Stock Appreciation Right may be no more than one hundred percent (100%)
of the difference between the per Share exercise price under the related Option and the Fair Market Value of the Shares subject to the
related Option at the time the Tandem Stock Appreciation Right is exercised, multiplied by the number of the Shares with respect to which
the Tandem Stock Appreciation Right is exercised; and
(e)
The Tandem Stock Appreciation Right may be exercised solely when the Fair Market Value of the Shares subject to the related
Option exceeds the per Share exercise price under the related Option.
Article
XV
RECAPITALIZATION OR REORGANIZATION
15.1 Adjustments
to Shares. The shares with respect to which Awards may be granted under the Plan are Shares as presently constituted; provided,
however, that if, and whenever, prior to the expiration or distribution to the Holder of Shares underlying an Award theretofore
granted, the Company shall effect a subdivision or consolidation of the Shares or the payment of an Share dividend on Shares without
receipt of consideration by the Company, the number of Shares with respect to which such Award may thereafter be exercised or satisfied,
as applicable, (i) in the event of an increase in the number of outstanding Shares, shall be proportionately increased, and the
purchase price per Share shall be proportionately reduced, and (ii) in the event of a reduction in the number of outstanding Shares,
shall be proportionately reduced, and the purchase price per Share shall be proportionately increased. Notwithstanding the foregoing
or any other provision of this Article XV, any adjustment made with respect to an Award (x) which is an Incentive Stock Option, shall
comply with the requirements of Section 424(a) of the Code, and in no event shall any adjustment be made which would render any Incentive
Stock Option granted under the Plan to be other than an “incentive stock option” for purposes of Section 422 of the Code,
and (y) which is a Non-qualified Stock Option, shall comply with the requirements of Section 409A of the Code, and in no event shall
any adjustment be made which would render any Non-qualified Stock Option granted under the Plan to become subject to Section 409A of
the Code.
ZW Data Action Technologies Inc. 2023 Omnibus Equity Incentive Plan
15.2 Recapitalization.
If the Company recapitalizes or otherwise changes its capital structure, thereafter upon any exercise or satisfaction, as applicable,
of a previously granted Award, the Holder shall be entitled to receive (or entitled to purchase, if applicable) under such Award, in
lieu of the number of Shares then covered by such Award, the number and class of shares and securities to which the Holder would have
been entitled pursuant to the terms of the recapitalization if, immediately prior to such recapitalization, the Holder had been the holder
of record of the number of Shares then covered by such Award.
15.3 Other
Events. In the event of changes to the outstanding Shares by reason of an extraordinary cash dividend, reorganization, merger,
consolidation, combination, split-up, spin-off, exchange or other relevant change in capitalization occurring after the date of the
grant of any Award and not otherwise provided for under this Article XV, any outstanding Awards and any Award Agreements evidencing
such Awards shall be adjusted by the Board in its discretion in such manner as the Board shall deem equitable or appropriate taking
into consideration the applicable accounting and tax consequences, as to the number and price of Shares or other consideration
subject to such Awards. In the event of any adjustment pursuant to Sections 15.1, 15.2 or this Section 15.3, the aggregate number of
Shares available under the Plan pursuant to Section 5.1 may be appropriately adjusted by the Board, the determination of which shall
be conclusive. In addition, the Committee may make provision for a cash payment to a Holder or a person who has an outstanding
Award. In addition, the Committee may make provision for a cash payment to a Holder or a person who has an outstanding Award.
15.4 Change
of Control. The Committee may, in its sole discretion, at the time an Award is made or at any time prior to, coincident with or after
the time of a Change of Control, cause any Award either (i) to be canceled in consideration of a payment in cash or other consideration
in amount per share equal to the excess, if any, of the price or implied price per Share in the Change of Control over the per Share
exercise, base or purchase price of such Award, which may be paid immediately or over the vesting schedule of the Award; (ii) to be assumed,
or new rights substituted therefore, by the surviving corporation or a parent or subsidiary of such surviving corporation following such
Change of Control; (iii) accelerate any time periods, or waive any other conditions, relating to the vesting, exercise, payment or distribution
of an Award so that any Award to a Holder whose employment has been terminated as a result of a Change of Control may be vested, exercised,
paid or distributed in full on or before a date fixed by the Committee; (iv) to be purchased from a Holder whose employment has been
terminated as a result of a Change of Control, upon the Holder’s request, for an amount of cash equal to the amount that could
have been obtained upon the exercise, payment or distribution of such rights had such Award been currently exercisable or payable; or
(v) terminate any then outstanding Award or make any other adjustment to the Awards then outstanding as the Committee deems necessary
or appropriate to reflect such transaction or change. The number of Shares subject to any Award shall be rounded to the nearest whole
number.
ZW Data Action Technologies Inc. 2023 Omnibus Equity Incentive Plan
15.5 Powers Not Affected. The existence of the Plan and the Awards granted hereunder shall not affect in any way the right
or power of the Board or of the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other
change of the Company’s capital structure or business, any merger or consolidation of the Company, any issue of debt or equity securities
ahead of or affecting Shares or the rights thereof, the dissolution or liquidation of the Company or any sale, lease, exchange or other
disposition of all or any part of its assets or business or any other corporate act or proceeding.
15.6 No
Adjustment for Certain Awards. Except as hereinabove expressly provided, the issuance by the Company of shares of any class or 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, and
in any case whether or not for fair value, shall not affect previously granted Awards, and no adjustment by reason thereof shall be made
with respect to the number of Shares subject to Awards theretofore granted or the purchase price per Share, if applicable.
Article
XVI
AMENDMENT AND TERMINATION OF PLAN
The Plan shall continue in
effect, unless sooner terminated pursuant to this Article XVI, until the tenth (10th) anniversary of the date on which it is
adopted by the Board (except as to Awards outstanding on that date). The Board in its discretion may terminate the Plan at any time with
respect to any shares for which Awards have not theretofore been granted; provided, however, that the Plan’s termination
shall not materially and adversely impair the rights of a Holder with respect to any Award theretofore granted without the consent of
the Holder. The Board shall have the right to alter or amend the Plan or any part hereof from time to time; provided, however,
that without the approval by a majority of the votes cast at a meeting of stockholders at which a quorum representing a majority of the
shares of the Company entitled to vote generally in the election of directors is present in person or by proxy, no amendment or modification
of the Plan may (i) except as otherwise expressly provided in law, materially increase the number of Shares subject to the Plan or
the individual Award Agreements specified in Article V, (ii) materially modify the requirements for participation in the Plan, or
(iii) amend, modify or suspend Section 7.7 (re-pricing prohibitions) or this Article XVI. In addition, no change in any Award theretofore
granted may be made which would materially and adversely impair the rights of a Holder with respect to such Award without the consent
of the Holder (unless such change is required in order to exempt the Plan or any Award from Section 409A of the Code).
ZW Data Action Technologies Inc. 2023 Omnibus Equity Incentive Plan
Article
XVII
MISCELLANEOUS
17.1 No
Right to Award. Neither the adoption of the Plan by the Company nor any action of the Board or the Committee shall be deemed to give
an Employee, Director or Consultant any right to an Award except as may be evidenced by an Award Agreement duly executed on behalf of
the Company, and then solely to the extent and on the terms and conditions expressly set forth therein.
17.2 No Rights Conferred. Nothing contained in the Plan shall (i) confer upon any Employee any right with respect
to continuation of employment with the Company or any Affiliate, (ii) interfere in any way with any right of the Company or any Affiliate
to terminate the employment of an Employee at any time, (iii) confer upon any Director any right with respect to continuation of
such Director’s membership on the Board, (iv) interfere in any way with any right of the Company or an Affiliate to terminate
a Director’s membership on the Board at any time, (v) confer upon any Consultant any right with respect to continuation of
his or her consulting engagement with the Company or any Affiliate, or (vi) interfere in any way with any right of the Company or
an Affiliate to terminate a Consultant’s consulting engagement with the Company or an Affiliate at any time.
17.3 Other
Laws; No Fractional Shares; Withholding. The Company shall not be obligated by virtue of any provision of the Plan to recognize the
exercise of any Award or to otherwise sell or issue Shares in violation of any laws, rules or regulations, and any postponement of the
exercise or settlement of any Award under this provision shall not extend the term of such Award. Neither the Company nor its directors
or officers shall have any obligation or liability to a Holder with respect to any Award (or Shares issuable thereunder) (i) that
shall lapse because of such postponement, or (ii) for any failure to comply with the requirements of any applicable law, rules or
regulations, including but not limited to any failure to comply with the requirements of Section 409A of this Code. No fractional Shares
shall be delivered, nor shall any cash in lieu of fractional Shares be paid. The Company shall have the right to deduct in cash (whether
under this Plan or otherwise) in connection with all Awards any taxes required by law to be withheld and to require any payments required
to enable it to satisfy its withholding obligations. In the case of any Award satisfied in the form of Shares, no Shares shall be issued
unless and until arrangements satisfactory to the Company shall have been made to satisfy any tax withholding obligations applicable
with respect to such Award. Subject to such terms and conditions as the Committee may impose, the Company shall have the right to retain,
or the Committee may, subject to such terms and conditions as it may establish from time to time, permit Holders to elect to tender,
Shares (including Shares issuable in respect of an Award) to satisfy, in whole or in part, the amount required to be withheld.
17.4 No
Restriction on Corporate Action. Nothing contained in the Plan shall be construed to prevent the Company or any Affiliate from taking
any corporate action which is deemed by the Company or such Affiliate to be appropriate or in its best interest, whether or not such
action would have an adverse effect on the Plan or any Award made under the Plan. No Employee, Director, Consultant, beneficiary or other
person shall have any claim against the Company or any Affiliate as a result of any such action.
ZW Data Action Technologies Inc. 2023 Omnibus Equity Incentive Plan
17.5 Restrictions
on Transfer. No Award under the Plan or any Award Agreement and no rights or interests herein or therein, shall or may be assigned,
transferred, sold, exchanged, encumbered, pledged or otherwise hypothecated or disposed of by a Holder except (i) by will or by
the laws of descent and distribution, or (ii) where permitted under applicable tax rules, by gift to any Family Member of the Holder,
subject to compliance with applicable laws. An Award may be exercisable during the lifetime of the Holder only by such Holder or by the
Holder’s guardian or legal representative unless it has been transferred by gift to a Family Member of the Holder, in which case
it shall be exercisable solely by such transferee. Notwithstanding any such transfer, the Holder shall continue to be subject to the
withholding requirements provided for under Section 17.3 hereof.
17.6 Beneficiary
Designations. Each Holder may, from time to time, name a beneficiary or beneficiaries (who may be contingent or successive beneficiaries)
for purposes of receiving any amount which is payable in connection with an Award under the Plan upon or subsequent to the Holder’s
death. Each such beneficiary designation shall serve to revoke all prior beneficiary designations, be in a form prescribed by the Company
and be effective solely when filed by the Holder in writing with the Company during the Holder’s lifetime. In the absence of any
such written beneficiary designation, for purposes of the Plan, a Holder’s beneficiary shall be the Holder’s estate.
17.7 Rule
16b-3. It is intended that the Plan and any Award made to a person subject to Section 16 of the Exchange Act shall meet all of the
requirements of Rule 16b-3. If any provision of the Plan or of any such Award would disqualify the Plan or such Award under, or
would otherwise not comply with the requirements of, Rule 16b-3, such provision or Award shall be construed or deemed to have been
amended as necessary to conform to the requirements of Rule 16b-3.
17.8 Clawback
Policy. All Awards (including on a retroactive basis) granted under the Plan are subject to the terms of any Company forfeiture,
incentive compensation recoupment, clawback or similar policy as it may be in effect from time to time, as well as any similar provisions
of applicable laws, as well as any other policy of the Company that may apply to the Awards, such as anti-hedging or pledging policies,
as they may be in effect from time to time. In particular, these policies and/or provisions shall include, without limitation, (i) any
Company policy established to comply with applicable laws (including, without limitation, Section 304 of the Sarbanes-Oxley Act and Section
954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act), and/or (ii) the rules and regulations of the applicable securities
exchange or inter-dealer quotation system on which the shares of Stock or other securities are listed or quoted, and these requirements
shall be deemed incorporated by reference into all outstanding Award Agreements.
17.9 Section 409A of the Code
ZW Data Action Technologies Inc. 2023 Omnibus Equity Incentive Plan
(a)
Notwithstanding any provision of this Plan to the contrary, all Awards made under this Plan are intended to be exempt from
or, in the alternative, comply with Section 409A of the Code and the authoritative guidance thereunder, including the exceptions for stock
rights and short-term deferrals. The Plan shall be construed and interpreted in accordance with such intent. Each payment under an Award
shall be treated as a separate payment for purposes of Section 409A of the Code.
(b)
If a Holder is a “specified employee” (as such term is defined for purposes of Section 409A of the Code) at
the time of his termination of service, no amount that is nonqualified deferred compensation subject to Section 409A of the Code and that
becomes payable by reason of such termination of service shall be paid to the Holder (or in the event of the Holder’s death, the
Holder’s representative or estate) before the earlier of (x) the first business day after the date that is six months following
the date of the Holder’s termination of service, and (y) within 30 days following the date of the Holder’s death. For
purposes of Section 409A of the Code, a termination of service shall be deemed to occur only if it is a “separation from service”
within the meaning of Section 409A of the Code, and references in the Plan and any Award Agreement to “termination of service”
or similar terms shall mean a “separation from service.” If any Award is or becomes subject to Section 409A of the Code, unless
the applicable Award Agreement provides otherwise, such Award shall be payable upon the Holder’s “separation from service”
within the meaning of Section 409A of the Code. If any Award is or becomes subject to Section 409A of the Code and if payment of such
Award would be accelerated or otherwise triggered under a Change of Control, then the definition of Change of Control shall be deemed
modified, only to the extent necessary to avoid the imposition of any additional tax under Section 409A of the Code, to mean a “change
in control event” as such term is defined for purposes of Section 409A of the Code.
(c)
Any adjustments made pursuant to Article XV to Awards that are subject to Section 409A of the Code shall be made in compliance
with the requirements of Section 409A of the Code, and any adjustments made pursuant to Article XV to Awards that are not subject to Section
409A of the Code shall be made in such a manner as to ensure that after such adjustment, the Awards either (x) continue not to be subject
to Section 409A of the Code or (y) comply with the requirements of Section 409A of the Code.
17.10 Indemnification. Each person who is or shall have been a member of the Committee or of the Board shall be indemnified
and held harmless by the Company against and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred
thereby in connection with or resulting from any claim, action, suit, or proceeding to which such person may be made a party or may be
involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid thereby in settlement
thereof, with the Company’s approval, or paid thereby in satisfaction of any judgment in any such action, suit, or proceeding against
such person; provided, however, that such person shall give the Company an opportunity, at its own expense, to handle and
defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall
not be exclusive and shall be independent of any other rights of indemnification to which such persons may be entitled under the Company’s
Articles of Incorporation or By-laws, by contract, as a matter of law, or otherwise.
ZW Data Action Technologies Inc. 2023 Omnibus Equity Incentive Plan
17.11 Other Benefit Plans. No Award, payment or amount received hereunder shall be taken into account in computing an Employee’s
salary or compensation for the purposes of determining any benefits under any pension, retirement, life insurance or other benefit plan
of the Company or any Affiliate, unless such other plan specifically provides for the inclusion of such Award, payment or amount received.
Nothing in the Plan shall be construed to limit the right of the Company to establish other plans or to pay compensation to its employees,
in cash or property, in a manner which is not expressly authorized under the Plan.
17.12 Limits
of Liability. Any liability of the Company with respect to an Award shall be based solely upon the contractual obligations created
under the Plan and the Award Agreement. None of the Company, any member of the Board nor any member of the Committee shall have any liability
to any party for any action taken or not taken, in good faith, in connection with or under the Plan.
17.13 Governing
Law. Except as otherwise provided herein, the Plan shall be construed in accordance with the laws of the State of Nevada, without
regard to principles of conflicts of law.
17.14 Subplans. The Board may from time to time establish one or more sub-plans under the Plan for purposes of satisfying
applicable blue sky, securities or tax laws of various jurisdictions. The Board shall establish such sub-plans by adopting supplements
to the Plan setting forth (i) such limitations on the Committee’s discretion under the Plan as the Board deems necessary or desirable
and (ii) such additional terms and conditions not otherwise inconsistent with the Plan as the Board shall deem necessary or desirable.
All supplements adopted by the Board shall be deemed to be part of the Plan, but each supplement shall apply only to Holders within the
affected jurisdiction and the Company shall not be required to provide copies of any supplement to Holders in any jurisdiction that is
not affected.
17.15 Notification of Election Under Section 83(b) of the Code. If any Holder, in connection with the acquisition of Stock
under an Award, makes the election permitted under Section 83(b) of the Code, if applicable, the Holder shall notify the Company of the
election within ten days of filing notice of the election with the Internal Revenue Service.
17.16 Paperless
Administration. If the Company establishes, for itself or using the services of a third party, an automated system for the documentation,
granting or exercise of Awards, such as a system using an internet website or interactive voice response, then the paperless documentation,
granting or exercise of Awards by a Holder may be permitted through the use of such an automated system.
ZW Data Action Technologies Inc. 2023 Omnibus Equity Incentive Plan
17.17 Broker-Assisted Sales. In the event of a broker-assisted sale of Stock in connection with the payment of amounts
owed by a Holder under or with respect to the Plan or Awards: (a) any Stock to be sold through the broker-assisted sale will be sold on
the day the payment first becomes due, or as soon thereafter as practicable; (b) the Stock may be sold as part of a block trade with
other Holders in the Plan in which all participants receive an average price; (c) the applicable Holder will be responsible for all
broker’s fees and other costs of sale, and by accepting an Award, each Holder agrees to indemnify and hold the Company harmless
from any losses, costs, damages, or expenses relating to any such sale; (d) to the extent the Company or its designee receives proceeds
of the sale that exceed the amount owed, the Company will pay the excess in cash to the applicable Holder as soon as reasonably practicable;
(e) the Company and its designees are under no obligation to arrange for the sale at any particular price; and (f) if the proceeds
of the sale are insufficient to satisfy the Holder’s applicable obligation, the Holder may be required to pay immediately upon demand
to the Company or its designee an amount in cash sufficient to satisfy any remaining portion of the Holder’s obligation.
17.18 Data
Privacy. As a condition for receiving any Award, each Holder explicitly and unambiguously consents to the collection, use and transfer,
in electronic or other form, of personal data as described in this Section 17.19 by and among the Company and its subsidiaries and Affiliates
exclusively for implementing, administering and managing the Holder’s participation in the Plan. The Company and its subsidiaries
and Affiliates may hold certain personal information about a Holder, including the Holder’s name, address and telephone number;
birthdate; social security, insurance number or other identification number; salary; nationality; job title(s);
any Stock held in the Company or its subsidiaries and Affiliates; and Award details, to implement, manage and administer the Plan
and Awards (the “Data”). The Company and its subsidiaries and Affiliates may transfer the Data amongst themselves
as necessary to implement, administer and manage a Holder’s participation in the Plan, and the Company and its subsidiaries and
Affiliates may transfer the Data to third parties assisting the Company with Plan implementation, administration and management. These
recipients may be located in the Holder’s country, or elsewhere, and the Holder’s country may have different data privacy
laws and protections than the recipients’ country. By accepting an Award, each Holder authorizes the recipients to receive, possess,
use, retain and transfer the Data, in electronic or other form, to implement, administer and manage the Holder’s participation
in the Plan, including any required Data transfer to a broker or other third party with whom the Company or the Holder may elect to deposit
any Stock. The Data related to a Holder will be held only as long as necessary to implement, administer, and manage the Holder’s
participation in the Plan. A Holder may, at any time, view the Data that the Company holds regarding the Holder, request additional information
about the storage and processing of the Data regarding the Holder, recommend any necessary corrections to the Data regarding the Holder
or refuse or withdraw the consents in this Section 17.19 in writing, without cost, by contacting the local human resources representative.
The Company may cancel Holder’s ability to participate in the Plan and, in the Committee’s discretion, the Holder may forfeit
any outstanding Awards if the Holder refuses or withdraws the consents in this Section 17.19.
ZW Data Action Technologies Inc. 2023 Omnibus Equity Incentive Plan
17.19 Severability
of Provisions. If any provision of the Plan is held invalid or unenforceable, such invalidity or unenforceability shall not affect
any other provision of the Plan, and the Plan shall be construed and enforced as if such invalid or unenforceable provision had not been
included in the Plan.
17.20 No
Funding. The Plan shall be unfunded. The Company shall not be required to establish any special or separate fund or to make any other
segregation of funds or assets to ensure the payment of any Award. Prior to receipt of Shares or a cash distribution pursuant to the
terms of an Award, such Award shall represent an unfunded unsecured contractual obligation of the Company and the Holder shall have no
greater claim to the Shares underlying such Award or any other assets of the Company or Affiliate than any other unsecured general creditor.
17.21 Headings. Headings used throughout the Plan are for convenience only and shall not be given legal significance.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY
FOR THE ANNUAL MEETING OF STOCKHOLDERS OF
ZW DATA ACTION TECHNOLOGIES INC.
TO BE HELD ON OCTOBER 18, 2023
Unless otherwise specified, this proxy will be voted FOR Proposals
1, 2, 3, 4 and 5. The Board of Directors recommends a vote FOR Proposals 1, 2, 3, 4 and 5.
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FOR all nominees listed below (except as marked to the contrary below) |
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WITHHOLD AUTHORITY to vote for all nominees listed below |
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1) Handong Cheng |
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2) George Kai Chu |
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3) Zhiqing Chen |
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4) Chang Qiu |
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5) Pau Chung Ho |
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INSTRUCTION: To withhold authority to vote for any nominee, write the nominee’s name in
the space provided below.
2. |
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT ACCOUNTANTS |
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☐ FOR |
☐ AGAINST |
☐ ABSTAIN |
3. |
TO CONDUCT AN ADVISORY VOTE TO APPROVE THE COMPENSATION PAID TO THE COMPANY’S NAMED EXECUTIVE OFFICERS |
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☐ FOR |
☐ AGAINST |
☐ ABSTAIN |
4. |
APPROVAL OF THE INCREASE IN NUMBER OF AUTHORIZED SHARES OF COMMON STOCK |
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☐ FOR |
☐ AGAINST |
☐ ABSTAIN |
5. |
RATIFICATION OF THE COMPANY’S 2023 OMNIBUS EQUITY INCENTIVE PLAN |
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☐ FOR |
☐ AGAINST |
☐ ABSTAIN |
Please sign exactly as your name appears below. When shares are held by joint tenants, each should
sign. When signing as attorney, executor, administrator, trustee, guardian, corporate officer, or partner, please give full title as such.
Date: __________, 2023 |
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Signature |
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Signature if held jointly |
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
ZW Data Action Technologies Inc.
Annual Meeting of Stockholders
October 18, 2023
Important Notice Regarding the Availability of Proxy Materials for the
Annual Meeting of Stockholders
To Be Held on October 18, 2023
The undersigned, hereby appoints Handong Cheng, Chief Executive
Officer, with full power of substitution, as proxy to represent and vote all shares of Common Stock, par value $0.001 per share, of ZW
Data Action Technologies Inc. (the “Company”), which the undersigned will be entitled to vote if personally present at the
Annual Meeting of the Stockholders of the Company to be held on October 18, 2023, at 10:00 a.m. local time the offices of 10th Floor,
Tower A, No. 68 First Helong Road, Baiyun District, Guangzhou City, Guangdong Province, PRC 510440, upon matters set forth in the
Notice of Annual Meeting of Stockholders and Proxy Statement, a copy of which has been received by the undersigned. Materials are also
available on www.zdat.com. Each share of Common Stock is entitled to one vote. The proxies are further authorized to vote, in their discretion,
upon such other business as may properly come before the meeting.
This proxy, when properly executed, will be voted as directed.
If no direction is made, the proxy shall be voted FOR the election of the listed nominees as directors, FOR the ratification
of ARK Pro CPA & Co. as our independent registered public accounting firm for the fiscal year ending December 31, 2023, FOR the
approval of the compensation paid to the Company’s named executive officers, FOR the approval of the increase in number of
authorized shares of Common Stock, and FOR the ratification of the Company’s 2023 Omnibus Equity Incentive Plan, in the case
of other matters that legally come before the meeting, as said proxy(s) may deem advisable.
Please check here if you plan to attend the Annual Meeting
of Stockholders on October 18, 2023 at 10:00 a.m. (Local Time). ☐
(Continued and to be signed on Reverse Side)
34
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