KORU Medical Systems Inc

In 2024, the Board adopted a Long Term Incentive Program (“LTIP”), the purpose of which is to incentivize the retention and performance of executives and certain other employees of the Company through annual equity-based awards. All awards under the LTIP are granted under, and in accordance with, the Company’s 2024 Omnibus Equity Incentive Plan. Participants in the LTIP are (i) “executive participants”, which are officers of the Company who are subject to Section 16 of the Securities Exchange Act of 1934, as amended, (ii) “management participants”, which are management-level employees with “vice president” titles, and (iii) “other participants”, which are certain other employees identified by the Committee upon the recommendation of the CEO. The LTIP is administered by the Compensation Committee of the Board (the “Committee”).

Each fiscal year of the Company, each participant will have an aggregate target value for such year’s awards under the LTIP. Unless otherwise determined by the Committee, for each executive participant, the aggregate target value shall be based on median market and peer data provided by a compensation consultant selected by the Committee, multiplied by a percentage determined by the Committee (and upon the recommendation of the CEO with respect to other participants) taking into account the participant’s experience and position with the Company. The number of shares subject to awards equal to the aggregate target value shall be based on the arithmetic mean of the high and low prices of a share of the Company’s common stock as reported on the Nasdaq Capital Market on the last trading day before the grant date.

Each fiscal year of the Company, for executive participants and management participants, (i) 33% (25% in the case of the CEO) of the participant’s aggregate target value will be granted as an annual award in the form of restricted stock units with time-based vesting requirements (RSUs), (ii) 33% (50% in the case of the CEO) of the participant’s aggregate target value will be granted as an annual award in the form of restricted stock units with performance-based vesting requirements (PSUs), and (iii) 33% (25% in the case of the CEO) of the participant’s aggregate target value will be granted as an annual award in the form of nonqualified stock options (Options) with time-based vesting requirements. Each fiscal year, for other participants, 100% of the participant’s aggregate target value shall be granted as in the form of RSUs.

Unless otherwise determined by the Committee, RSUs and Options awarded under the LTIP will vest as to one-fourth of the shares of Common Stock subject to such awards on each of the first four anniversaries of the date of grant, subject to the participant’s continued employment with the Company through the applicable vesting date (except as may be otherwise provided in the award agreement), and will have such other terms and conditions as shall be set forth in the applicable award agreement approved by the Committee.

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PSUs awarded under the LTIP will vest based on performance criteria determined by the Committee and set forth in the Award Agreement, which criteria may include (without limitation) targeted or growth of revenue, cash flow, earnings per share, earnings before one or more of interest, taxes, depreciation, and amortization, return on equity, income or net income, operating income or net operating income, gross margin, operating margin, or profit margin. The PSU Award Agreement will provide a target percentage range for the actual number of LTIP PSUs that may become vested, based on the level of achievement of the foregoing or other performance measure(s), as determined by the Committee, and may provide that the payout based on the actual number of LTIP PSUs be modified based on performance criteria determined by the Committee.

The Committee may provide accelerated vesting of awards under the LTIP in the event of a change in control of the Company, as defined in the LTIP.