Exhibit 10.1 

 

OriginClear, Inc.

2015 Equity Incentive Plan

 

 

This OriginClear, Inc. 2015 Equity Incentive Plan (the "Plan") is intended as an
incentive, to retain in the employ of and as directors, officers, consultants,
advisors and employees to OriginClear, Inc. a Nevada corporation, and its
subsidiaries, directly owned or otherwise (the “Company”), persons of training,
experience and ability, to attract new directors, officers, consultants,
advisors and employees whose services are considered valuable, to encourage the
sense of proprietorship and to stimulate the active interest of such persons in
the development and financial success of the Company.

It is further intended that certain options granted pursuant to the Plan shall
constitute incentive stock options (the “Incentive Stock Options”) within the
meaning of Section 422 of the United States Internal Revenue Code of 1986, as
amended (the “Code”) while certain other options granted pursuant to the Plan
shall be nonqualified stock options (the “Nonstatutory Options”).

The Company intends that the Plan meet the requirements of Rule 16b-3 (“Rule
16b-3”) promulgated under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and that transactions of the type specified in subparagraphs
(c) to (f) inclusive of Rule 16b-3 by officers and directors of the Company
pursuant to the Plan will be exempt from the operation of Section 16(b) of the
Exchange Act. Further, the Plan is intended to satisfy the performance-based
compensation exception to the limitation on the Company’s tax deductions imposed
by Section 162(m) of the Code with respect to those Options for which
qualification for such exception is intended. In all cases, the terms,
provisions, conditions and limitations of the Plan shall be construed and
interpreted consistent with the Company’s intent as stated in these recitals.

 

1.Definitions.

 

(a)"Board" - The Board of Directors of the Company.

 

(b)"Change in Control" - Means, and shall be deemed to have occurred upon the
occurrence of, any one of the following events:

 

(i)The acquisition in one transaction by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of
beneficial ownership (within the meaning of Rule l3d-3 promulgated under the
Exchange Act) of shares or other securities (as defined in Section 3(a)(10) of
the Exchange Act) representing 51% or more of outstanding Stock of the Company;
provided, however, that a Change in Control as defined in this clause (1) shall
not be deemed to occur in connection with any acquisition by the Company, an
employee benefit plan of the Company or any Person who immediately prior to the
effective date of this Plan is a holder of Stock (a "Current Stockholder") so
long as such acquisition does not result in any Person other than the Company,
such employee benefit plan or such Current Stockholder beneficially owning
shares or securities representing 51% or more of the outstanding; or

 

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(ii)Any election has occurred of persons as directors of the Company that causes
two-thirds or more of the Board to consist of persons other than (i) persons
who, were members of the Board on the effective date of this Plan and (ii)
persons who were nominated by the Board for election as members of the Board at
a time when at least two-thirds of the Board consisted of persons who were
members of the Board on the effective date of this Plan; provided, however, that
any person nominated for election by the Board when at least two-thirds of the
members of the Board are persons described in subclause (i) or (ii) and persons
who were themselves previously nominated in accordance with this clause (2)
shall, for this purpose, be deemed to have been nominated by a Board composed of
persons described in subclause (ii); or

 

(iii)Approval by the stockholders of the Company of a reorganization, merger,
consolidation or similar transaction (a "Reorganization Transaction"), in each
case, unless, immediately following such Reorganization Transaction, more than
50% of, respectively, the outstanding shares of common stock (or similar equity
security) of the corporation or other entity resulting from or surviving such
Reorganization Transaction and the combined voting power of the securities of
such corporation or other entity entitled to vote generally in the election of
directors, is then beneficially owned, directly or indirectly, by the
individuals and entities who were the respective beneficial owners of the
outstanding Stock immediately prior to such Reorganization Transaction in
substantially the same proportions as their ownership of the outstanding Stock
immediately prior to such Reorganization Transaction; or

 

(iv)Approval by the stockholders of the Company of (i) a complete liquidation or
dissolution of the Company or (ii) the sale or other disposition of all or
substantially all of the assets of the Company to a corporation or other entity,
unless, with respect to such corporation or other entity, immediately following
such sale or other disposition more than 50% of, respectively, the outstanding
shares of common stock (or similar equity security) of such corporation or other
entity and the combined voting power of the securities of such corporation or
other entity entitled to vote generally in the election of directors, is then
beneficially owned, directly or indirectly, by the individuals and entities who
were the respective beneficial owners of the outstanding Stock immediately prior
to such sale or disposition in substantially the same proportions as their
ownership of the outstanding Stock immediately prior to such sale or
disposition.

 

(c)"Committee" - The Compensation Committee of the Company's Board, or such
other committee of the Board that is designated by the Board to administer the
Plan, composed of not less than two members of the Board who are (i)
“Independent Directors” (as such term is defined under the rules of the NASDAQ
Stock Market), (ii) “Non-Employee Directors” (as such term is defined in Rule
16b-3) and (iii) “Outside Directors” (as such term is defined in Section 162(m)
of the Code), which shall serve at the pleasure of the Board.

 

(d)"Company" – OriginClear, Inc. and its subsidiaries including subsidiaries of
subsidiaries.

 

(e)"Fair Market Value" - The fair market value of the Company's issued and
outstanding Stock as determined in good faith by the Board or Committee.

 

(f)"Grant" - The grant of any form of stock option, stock award, or stock
purchase offer, whether granted singly, in combination, or in tandem, to a
Participant pursuant to such terms, conditions and limitations as the Board or
Committee may establish in order to fulfill the objectives of the Plan.

 

(g)"Grant Agreement" - An agreement between the Company and a Participant that
sets forth the terms, conditions and limitations applicable to a Grant.

 

(h)"Option" - Either an Incentive Stock Option, in accordance with Section 422
of Code, or a Nonstatutory Option, to purchase the Company's Stock that may be
awarded to a Participant under the Plan. A Participant who receives an award of
an Option shall be referred to as an "Optionee."

 

(i)"Participant" - A director, officer, employee or consultant of the Company to
whom an award has been made under the Plan.

 

(j)"Restricted Stock Purchase Offer" - A Grant of the right to purchase a
specified number of shares of Stock pursuant to a written agreement issued under
the Plan.

 

(k)"Securities Act" - The Securities Act of 1933, as amended from time to time.

 

(l)"Stock" - Authorized and issued or unissued shares of common stock of the
Company.

 

(m)"Stock Award" - A Grant made under the Plan in stock or denominated in units
of stock for which the Participant is not obligated to pay additional
consideration.

 

2.Administration. The Plan shall be administered by the Board, provided however,
that the Board may delegate such administration to the Committee. Subject to the
provisions of the Plan, the Board and/or the Committee shall have authority to
(a) grant, in its discretion, Incentive Stock Options in accordance with Section
422 of the Code, or Nonstatutory Options, Stock Awards or Restricted Stock
Purchase Offers; (b) determine in good faith the fair market value of the Stock
covered by any Grant; (c) determine which eligible persons shall receive Grants
and the number of shares, restrictions, terms and conditions to be included in
such Grants; (d) construe and interpret the Plan; (e) promulgate, amend and
rescind rules and regulations relating to its administration, and correct
defects, omissions and inconsistencies in the Plan or any Grant; (f) consistent
with the Plan and with the consent of the Participant, as appropriate, amend any
outstanding Grant or amend the exercise date or dates thereof; (g) determine the
duration and purpose of leaves of absence which may be granted to Participants
without constituting termination of their employment for the purpose of the Plan
or any Grant; and (h) make all other determinations necessary or advisable for
the Plan's administration. The interpretation and construction by the Board of
any provisions of the Plan or selection of Participants shall be conclusive and
final. No member of the Board or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any Grant made
thereunder.

 

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3.Eligibility.

(a)General: The persons who shall be eligible to receive Grants shall be
directors, officers, employees or consultants to the Company. The term
consultant shall mean any person, other than an employee, who is engaged by the
Company to render services and is compensated for such services. An Optionee may
hold more than one Option. Any issuance of a Grant to an officer or director of
the Company subsequent to the first registration of any of the securities of the
Company under the Exchange Act shall comply with the requirements of Rule 16b-3.

 

(b)Incentive Stock Options: Incentive Stock Options may only be issued to
employees of the Company. Incentive Stock Options may be granted to officers or
directors, provided they are also employees of the Company. Payment of a
director's fee shall not be sufficient to constitute employment by the Company.

The Company shall not grant an Incentive Stock Option under the Plan to any
employee if such Grant would result in such employee holding the right to
exercise for the first time in any one calendar year, under all Incentive Stock
Options granted under the Plan or any other plan maintained by the Company, with
respect to shares of Stock having an aggregate fair market value, determined as
of the date the Option is granted, in excess of $100,000. Should it be
determined that an Incentive Stock Option granted under the Plan exceeds such
maximum for any reason other than a failure in good faith to value the Stock
subject to such option, the excess portion of such option shall be considered a
Nonstatutory Option. To the extent the employee holds two (2) or more such
Options which become exercisable for the first time in the same calendar year,
the foregoing limitation on the exercisability of such Option as Incentive Stock
Options under the Federal tax laws shall be applied on the basis of the order in
which such Options are granted. If, for any reason, an entire Option does not
qualify as an Incentive Stock Option by reason of exceeding such maximum, such
Option shall be considered a Nonstatutory Option.

 

(c)Nonstatutory Option: The provisions of the foregoing Section 3(b) shall not
apply to any Option designated as a "Nonstatutory Option" or which sets forth
the intention of the parties that the Option be a Nonstatutory Option.

 

(d)Stock Awards and Restricted Stock Purchase Offers: The provisions of this
Section 3 shall not apply to any Stock Award or Restricted Stock Purchase Offer
under the Plan.

 

4.Stock.

 

(a)Authorized Stock: Stock subject to Grants may be either unissued or
reacquired Stock.

 

(b)Number of Shares: Subject to adjustment as provided in Section 10 of the
Plan, the total number of shares of Stock which may be purchased or granted
directly by Options, Stock Awards or Restricted Stock Purchase Offers, or
purchased indirectly through exercise of Options granted under the Plan shall
not exceed 160,000,000 (One Hundred Sixty Million). If any Grant shall for any
reason terminate or expire, any shares allocated thereto but remaining
unpurchased upon such expiration or termination shall again be available for
Grants with respect thereto under the Plan as though no Grant had previously
occurred with respect to such shares. Any shares of Stock issued pursuant to a
Grant and repurchased pursuant to the terms thereof shall be available for
future Grants as though not previously covered by a Grant.

 

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(c)Reservation of Shares: The Company shall reserve and keep available at all
times during the term of the Plan such number of shares as shall be sufficient
to satisfy the requirements of the Plan. If, after reasonable efforts, which
efforts shall not include the registration of the Plan or Grants under the
Securities Act, the Company is unable to obtain authority from any applicable
regulatory body, which authorization is deemed necessary by legal counsel for
the Company for the lawful issuance of shares hereunder, the Company shall be
relieved of any liability with respect to its failure to issue and sell the
shares for which such requisite authority was so deemed necessary unless and
until such authority is obtained.

 

(d)No Obligation to Exercise: The issuance of a Grant shall impose no obligation
upon the Participant to exercise any rights under such Grant.

 

5.Terms and Conditions of Options. Options granted hereunder shall be evidenced
by agreements between the Company and the respective Optionees, in such form and
substance as the Board or Committee shall from time to time approve. The form of
Incentive Stock Option Agreement attached hereto as Exhibit A and the three
forms of a Nonstatutory Stock Option Agreement for employees, for directors and
for consultants, attached hereto as Exhibit B-1, Exhibit B-2 and Exhibit B-3,
respectively, shall be deemed to be approved by the Board. Option agreements
need not be identical, and in each case may include such provisions as the Board
or Committee may determine, but all such agreements shall be subject to and
limited by the following terms and conditions:

 

(a)Number of Shares: Each Option shall state the number of shares to which it
pertains.

 

(b)Exercise Price: Each Option shall state the exercise price, which shall be
determined as follows:

 

(i)Any Incentive Stock Option granted to a person who at the time the Option is
granted owns (or is deemed to own pursuant to Section 424(d) of the Code) stock
possessing more than ten percent (10%) of the total combined voting power or
value of all classes of stock of the Company ("Ten Percent Holder") shall have
an exercise price of no less than 110% of the Fair Market Value of the Stock as
of the date of grant; and

 

(ii)Incentive Stock Options granted to a person who at the time the Option is
granted is not a Ten Percent Holder shall have an exercise price of no less than
100% of the Fair Market Value of the Stock as of the date of grant.

 

For the purposes of this Section 5(b), the Fair Market Value shall be as
determined by the Board or Committee in good faith, which determination shall be
conclusive and binding; provided however, that if there is a public market for
such Stock, the Fair Market Value per share shall be the average of the bid and
asked prices (or the closing price if such stock is listed on the NASDAQ
National Market System or Small Cap Issue Market) on the date of grant of the
Option, or if listed on a stock exchange, the closing price on such exchange on
such date of grant.

 

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(c)Medium and Time of Payment: The exercise price shall become immediately due
upon exercise of the Option and shall be paid in cash or check made payable to
the Company. Should the Company's outstanding Stock be registered under Section
12(g) of the Exchange Act at the time the Option is exercised, then the exercise
price may also be paid as follows:

 

(i)in shares of Stock held by the Optionee for the requisite period necessary to
avoid a charge to the Company's earnings for financial reporting purposes and
valued at Fair Market Value on the exercise date, or

 

(ii)through a special sale and remittance procedure pursuant to which the
Optionee shall concurrently provide irrevocable written instructions (a) to a
Company designated brokerage firm to effect the immediate sale of the purchased
shares and remit to the Company, out of the sale proceeds available on the
settlement date, sufficient funds to cover the aggregate exercise price payable
for the purchased shares plus all applicable Federal, state and local income and
employment taxes required to be withheld by the Company by reason of such
purchase and (b) to the Company to deliver the certificates for the purchased
shares directly to such brokerage firm in order to complete the sale
transaction.

 

At the discretion of the Board, exercisable either at the time of Option grant
or of Option exercise, the exercise price may also be paid (i) by Optionee's
delivery of a promissory note in form and substance satisfactory to the Company
and permissible under applicable securities rules and bearing interest at a rate
determined by the Board in its sole discretion, but in no event less than the
minimum rate of interest required to avoid the imputation of compensation income
to the Optionee under the Federal tax laws, or (ii) in such other form of
consideration permitted by the Nevada corporations law as may be acceptable to
the Board.

 

(d)Term, Exercise and Assignability of Options: Any Option granted to an
employee of the Company shall become exercisable over a period of no longer than
five (5) years. In no event shall any Option be exercisable after the expiration
of ten (10) years from the date it is granted, and no Incentive Stock Option
granted to a Ten Percent Holder shall, by its terms, be exercisable after the
expiration of five (5) years from the date of the Option. Unless otherwise
specified by the Board or the Committee in the resolution authorizing such
Option, the date of grant of an Option shall be deemed to be the date upon which
the Board or the Committee authorizes the granting of such Option.

 

Each Option shall be exercisable to the nearest whole share, in installments or
otherwise, as the respective Option agreements may provide. To the extent not
exercised, installments (if more than one) shall accumulate, but shall be
exercisable, in whole or in part, only during the period for exercise as stated
in the Option agreement, whether or not other installments are then exercisable.

 

An Option granted under this Plan is not transferable except by will or the laws
of descent and distribution. Notwithstanding the foregoing, the Board or
Committee, in its sole discretion, may permit a transfer of a Nonstatutory
Option to (i) a trust for the benefit of the Optionee, (ii) a member of the
Optionee’s immediate family (or a trust for his or her benefit) or (iii)
pursuant to a domestic relations order. Any attempt to transfer, assign, pledge
or otherwise dispose of, or to subject to execution, attachment or similar
process, any Option contrary to the provisions hereof shall be void and
ineffective and shall give no right to the purported transferee.

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(e)Termination of Status as Employee, Consultant or Director: If Optionee's
status as an employee shall terminate for any reason other than Optionee's
disability or death, then Optionee (or if the Optionee shall die after such
termination, but prior to exercise, Optionee's personal representative or the
person entitled to succeed to the Option) shall have the right to exercise the
portions of any of Optionee's Incentive Stock Options which were exercisable as
of the date of such termination, in whole or in part, not less than 30 days nor
more than three (3) months after such termination (or, in the event of
"termination for cause" as defined in any applicable employment or consulting
agreement, or in the absence of an employment or consulting agreement then
defined as (i) Optionee’s conviction of or entrance of a plea of guilty or nolo
contendere to a felony; or (ii) Optionee is engaging or has engaged in material
fraud, material dishonesty, or other acts of willful and continued misconduct in
connection with the business affairs of the Company, the Option shall
automatically terminate as of the termination of employment as to all shares
covered by the Option).

 

With respect to Nonstatutory Options granted to employees, directors or
consultants, the Board or Committee may specify such period for exercise, not
less than 30 days (except that in the case of "termination for cause" or removal
of a director), the Option shall automatically terminate as of the termination
of employment or services as to shares covered by the Option, following
termination of employment or services as the Board or Committee deems reasonable
and appropriate. The Option may be exercised only with respect to installments
that the Optionee could have exercised at the date of termination of employment
or services. Nothing contained herein or in any Option granted pursuant hereto
shall be construed to affect or restrict in any way the right of the Company to
terminate the employment or services of an Optionee with or without cause.

 

(f)Disability of Optionee: If an Optionee is disabled (within the meaning of
Section 22(e)(3) of the Code) at the time of termination, the period set forth
in Section 5(e) shall be a period, as determined by the Board or Committee and
set forth in the Option, of not less than six months nor more than one year
after such termination.

 

(g)Death of Optionee: If an Optionee dies while employed by, engaged as a
consultant to, or serving as a Director of the Company, the portion of such
Optionee's Option which was exercisable at the date of death may be exercised,
in whole or in part, by the estate of the decedent or by a person succeeding to
the right to exercise such Option at any time within (i) a period, as determined
by the Board or Committee and set forth in the Option, of not less than six (6)
months nor more than one (1) year after Optionee's death, which period shall not
be more, in the case of a Nonstatutory Option, than the period for exercise
following termination of employment or services, or (ii) during the remaining
term of the Option, whichever is the lesser. The Option may be so exercised only
with respect to installments exercisable at the time of Optionee's death and not
previously exercised by the Optionee.

 

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(h)Nontransferability of Option: No Option shall be transferable by the
Optionee, except by will or by the laws of descent and distribution.

 

(i)Rights as a Shareholder: An Optionee shall have no rights as a shareholder
with respect to any shares covered by an Option until the effective date of the
issuance of the shares following exercise of such Option by Optionee. No
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property) or distributions or other rights for which
the record date is prior to the date such stock certificate is issued, except as
expressly provided in Section 10 hereof.

 

(j)Modification, Acceleration, Extension, and Renewal of Options: Subject to the
terms and conditions and within the limitations of the Plan, the Board or
Committee may modify an Option, or, once an Option is exercisable, accelerate
the rate at which it may be exercised, and may extend or renew outstanding
Options granted under the Plan or accept the surrender of outstanding Options
(to the extent not theretofore exercised) and authorize the granting of new
Options in substitution for such Options, provided such action is permissible
under Section 422 of the Code and applicable state securities laws.
Notwithstanding the provisions of this Section 5(j), however, no modification of
an Option shall, without the consent of the Optionee, alter to the Optionee's
detriment or impair any rights or obligations under any Option theretofore
granted under the Plan.

 

(k)Exercise Before Exercise Date: At the discretion of the Board or Committee,
the Option may, but need not, include a provision whereby the Optionee may elect
to exercise all or any portion of the Option prior to the stated exercise date
of the Option or any installment thereof. Any shares so purchased prior to the
stated exercise date shall be subject to repurchase by the Company upon
termination of Optionee's employment as contemplated by Section 5(m) hereof
prior to the exercise date stated in the Option and such other restrictions and
conditions as the Board or Committee may deem advisable.

 

(l)Other Provisions: The Option agreements authorized under the Plan shall
contain such other provisions, including, without limitation, restrictions upon
the exercise of the Options, as the Board or the Committee shall deem advisable.
Shares shall not be issued pursuant to the exercise of an Option, if the
exercise of such Option or the issuance of shares thereunder would violate, in
the opinion of legal counsel for the Company, the provisions of any applicable
law or the rules or regulations of any applicable governmental or administrative
agency or body, such as the Code, the Securities Act, the Exchange Act,
applicable state securities laws, Nevada corporation law, and the rules
promulgated under the foregoing or the rules and regulations of any exchange
upon which the shares of the Company are listed. Without limiting the generality
of the foregoing, the exercise of each Option shall be subject to the condition
that if at any time the Company shall determine that (i) the satisfaction of
withholding tax or other similar liabilities, or (ii) the listing, registration
or qualification of any shares covered by such exercise upon any securities
exchange or under any state or federal law, or (iii) the consent or approval of
any regulatory body, or (iv) the perfection of any exemption from any such
withholding, listing, registration, qualification, consent or approval is
necessary or desirable in connection with such exercise or the issuance of
shares thereunder, then in any such event, such exercise shall not be effective
unless such withholding, listing registration, qualification, consent, approval
or exemption shall have been effected, obtained or perfected free of any
conditions not acceptable to the Company.

 

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(m)Repurchase Agreement: The Board may, in its discretion, require as a
condition to the Grant of an Option hereunder, that an Optionee execute an
agreement with the Company, in form and substance satisfactory to the Board in
its discretion ("Repurchase Agreement"), (i) restricting the Optionee's right to
transfer shares purchased under such Option without first offering such shares
to the Company or another shareholder of the Company upon the same terms and
conditions as provided therein; and (ii) providing that upon termination of
Optionee's employment with the Company, for any reason, the Company (or another
shareholder of the Company, as provided in the Repurchase Agreement) shall have
the right at its discretion (or the discretion of such other shareholders) to
purchase and/or redeem all such shares owned by the Optionee on the date of
termination of his or her employment at a price determined by the Board or
Committee.

 

6.Stock Awards and Restricted Stock Purchase Offers.

 

(a)Types of Grants.

 

(i)Stock Award. All or part of any Stock Award under the Plan may be subject to
conditions established by the Board or the Committee, and set forth in the Stock
Award Agreement, which may include, but are not limited to, continuous service
with the Company, achievement of specific business objectives, increases in
specified indices, attaining growth rates and other comparable measurements of
Company performance. Such Stock Awards may be based on Fair Market Value or
other specified valuation. All Stock Awards will be made pursuant to the
execution of a Stock Award Agreement substantially in the form attached hereto
as Exhibit C.

 

(ii)Restricted Stock Purchase Offer. A Grant of a Restricted Stock Purchase
Offer under the Plan shall be subject to such (i) vesting contingencies related
to the Participant's continued association with the Company for a specified time
and (ii) other specified conditions as the Board or Committee shall determine,
in their sole discretion, consistent with the provisions of the Plan. All
Restricted Stock Purchase Offers shall be made pursuant to a Restricted Stock
Purchase Offer substantially in the form attached hereto as Exhibit D.

 

(b)Conditions and Restrictions. Shares of Stock which Participants may receive
as a Stock Award under a Stock Award Agreement or Restricted Stock Purchase
Offer under a Restricted Stock Purchase Offer may include such restrictions as
the Board or Committee, as applicable, shall determine, including restrictions
on transfer, repurchase rights, right of first refusal, and forfeiture
provisions. When transfer of Stock is so restricted or subject to forfeiture
provisions it is referred to as "Restricted Stock". Further, with Board or
Committee approval, Stock Awards or Restricted Stock Purchase Offers may be
deferred, either in the form of installments or a future lump sum distribution.
The Board or Committee may permit selected Participants to elect to defer
distributions of Stock Awards or Restricted Stock Purchase Offers in accordance
with procedures established by the Board or Committee to assure that such
deferrals comply with applicable requirements of the Code including, at the
choice of Participants, the capability to make further deferrals for
distribution after retirement. Any deferred distribution, whether elected by the
Participant or specified by the Stock Award Agreement, Restricted Stock Purchase
Offers or by the Board or Committee, may require the payment be forfeited in
accordance with the provisions of Section 6(c). Dividends or dividend equivalent
rights may be extended to and made part of any Stock Award or Restricted Stock
Purchase Offers denominated in Stock or units of Stock, subject to such terms,
conditions and restrictions as the Board or Committee may establish.

 

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(c)Cancellation and Rescission of Grants. Unless the Stock Award Agreement or
Restricted Stock Purchase Offer specifies otherwise, the Board or Committee, as
applicable, may cancel any unexpired, unpaid, or deferred Grants at any time if
the Participant is not in compliance with all other applicable provisions of the
Stock Award Agreement or Restricted Stock Purchase Offer, the Plan and with the
following conditions:

 

(i)A Participant shall not render services for any organization or engage
directly or indirectly in any business which, in the judgment of the chief
executive officer of the Company or other senior officer designated by the Board
or Committee, is or becomes competitive with the Company, or which organization
or business, or the rendering of services to such organization or business, is
or becomes otherwise prejudicial to or in conflict with the interests of the
Company. For Participants whose employment has terminated, the judgment of the
chief executive officer or other senior officer designated by the Board or
Committee shall be based on the Participant's position and responsibilities
while employed by the Company, the Participant's post-employment
responsibilities and position with the other organization or business, the
extent of past, current and potential competition or conflict between the
Company and the other organization or business, the effect on the Company's
customers, suppliers and competitors and such other considerations as are deemed
relevant given the applicable facts and circumstances. A Participant who has
retired shall be free, however, to purchase as an investment or otherwise, stock
or other securities of such organization or business so long as they are listed
upon a recognized securities exchange or traded over-the-counter, and such
investment does not represent a substantial investment to the Participant or a
greater than ten percent (10%) equity interest in the organization or business.

(ii)A Participant shall not, without prior written authorization from the
Company, disclose to anyone outside the Company, or use in other than the
Company's business, any confidential information or material, as defined in the
Company's Proprietary Information and Invention Agreement or similar agreement
regarding confidential information and intellectual property, relating to the
business of the Company, acquired by the Participant either during or after
employment with the Company.

 

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(iii)A Participant shall disclose promptly and assign to the Company all right,
title and interest in any invention or idea, patentable or not, made or
conceived by the Participant during employment by the Company, relating in any
manner to the actual or anticipated business, research or development work of
the Company and shall do anything reasonably necessary to enable the Company to
secure a patent where appropriate in the United States and in foreign countries.

(iv)Upon exercise, payment or delivery pursuant to a Grant, the Participant
shall certify on a form acceptable to the Committee that he or she is in
compliance with the terms and conditions of the Plan. Failure to comply with all
of the provisions of this Section 6(c) prior to, or during the six months after,
any exercise, payment or delivery pursuant to a Grant shall cause such exercise,
payment or delivery to be rescinded. The Company shall notify the Participant in
writing of any such rescission within two years after such exercise, payment or
delivery. Within ten days after receiving such a notice from the Company, the
Participant shall pay to the Company the amount of any gain realized or payment
received as a result of the rescinded exercise, payment or delivery pursuant to
a Grant. Such payment shall be made either in cash or by returning to the
Company the number of shares of Stock that the Participant received in
connection with the rescinded exercise, payment or delivery.

 

(d)Nonassignability.

 

(i)Except pursuant to Section 6(e)(iii) and except as set forth in Section
6(d)(ii), no Grant of Stock Award or a Restricted Stock Purchase Offer shall be
assignable or transferable, or payable to or exercisable by, anyone other than
the Participant to whom it was granted.

(ii)Where a Participant terminates employment and retains a Grant pursuant to
Section 6(e)(ii) in order to assume a position with a governmental, charitable
or educational institution, the Board or Committee, in its discretion and to the
extent permitted by law, may authorize a third party (including but not limited
to the trustee of a "blind" trust), acceptable to the applicable governmental or
institutional authorities, the Participant and the Board or Committee, to act on
behalf of the Participant with regard to such Awards.

 

(e)Termination of Employment. If the employment or service to the Company of a
Participant terminates, other than pursuant to any of the following provisions
under this Section 6(e), all unexercised, deferred and unpaid Stock Awards or
Restricted Stock Purchase Offers shall be cancelled immediately, unless the
Stock Award Agreement or Restricted Stock Purchase Offer provides otherwise:

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(i)Retirement Under a Company Retirement Plan. When a Participant's employment
terminates as a result of retirement in accordance with the terms of a Company
retirement plan, the Board or Committee may permit Stock Awards or Restricted
Stock Purchase Offers to continue in effect beyond the date of retirement in
accordance with the applicable Grant Agreement and the exercisability and
vesting of any such Grants may be accelerated.

 

(ii)Rights in the Best Interests of the Company. When a Participant resigns from
the Company and, in the judgment of the Board or Committee, the acceleration
and/or continuation of outstanding Stock Awards or Restricted Stock Purchase
Offers would be in the best interests of the Company, the Board or Committee may
(i) authorize, where appropriate, the acceleration and/or continuation of all or
any part of Grants issued prior to such termination and (ii) permit the
exercise, vesting and payment of such Grants for such period as may be set forth
in the applicable Grant Agreement, subject to earlier cancellation pursuant to
Section 9 or at such time as the Board or Committee shall deem the continuation
of all or any part of the Participant's Grants are not in the Company's best
interest.

 

(iii)Death or Disability of a Participant.

 

(1)In the event of a Participant's death, the Participant's estate or
beneficiaries shall have a period up to the expiration date specified in the
Grant Agreement within which to receive or exercise any outstanding Grant held
by the Participant under such terms as may be specified in the applicable Grant
Agreement. Rights to any such outstanding Grants shall pass by will or the laws
of descent and distribution in the following order: (a) to beneficiaries so
designated by the Participant; if none, then (b) to a legal representative of
the Participant; if none, then (c) to the persons entitled thereto as determined
by a court of competent jurisdiction. Grants so passing shall be made at such
times and in such manner as if the Participant were living.

 

(2)In the event a Participant is deemed by the Board or Committee to be unable
to perform his or her usual duties by reason of mental disorder or medical
condition which does not result from facts which would be grounds for
termination for cause, Grants and rights to any such Grants may be paid to or
exercised by the Participant, if legally competent, or a committee or other
legally designated guardian or representative if the Participant is legally
incompetent by virtue of such disability.

(3)After the death or disability of a Participant, the Board or Committee may in
its sole discretion at any time (1) terminate restrictions in Grant Agreements;
(2) accelerate any or all installments and rights; and (3) instruct the Company
to pay the total of any accelerated payments in a lump sum to the Participant,
the Participant's estate, beneficiaries or representative; notwithstanding that,
in the absence of such termination of restrictions or acceleration of payments,
any or all of the payments due under the Grant might ultimately have become
payable to other beneficiaries.

(4)In the event of uncertainty as to interpretation of or controversies
concerning this Section 6, the determinations of the Board or Committee, as
applicable, shall be binding and conclusive.

 

7.Change in Control. Unless otherwise provided in the applicable Grant
Agreement, in the event of a Change in Control, any and all Options will become
fully vested and immediately exercisable with such acceleration to occur without
the requirement of any further act by either the Company or the Participant,
subject to Section 11 hereof.

 

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8.Investment Intent. Unless and until the granting of Options or sale and
issuance of Stock subject to the Plan are registered under the Securities Act or
shall be exempt pursuant to the rules promulgated thereunder, each Grant under
the Plan shall provide that the purchases or other acquisitions of Stock
thereunder shall be for investment purposes and not with a view to, or for
resale in connection with, any distribution thereof. Further, unless the
issuance and sale of the Stock have been registered under the Securities Act,
each Grant shall provide that no shares shall be purchased upon the exercise of
the rights under such Grant unless and until (i) all then applicable
requirements of state and federal laws and regulatory agencies shall have been
fully complied with to the satisfaction of the Company and its counsel, and (ii)
if requested to do so by the Company, the person exercising the rights under the
Grant shall (A) give written assurances as to knowledge and experience of such
person (or a representative employed by such person) in financial and business
matters and the ability of such person (or representative) to evaluate the
merits and risks of exercising the Option, and (B) execute and deliver to the
Company a letter of investment intent and/or such other form related to
applicable exemptions from registration, all in such form and substance as the
Company may require. If shares are issued upon exercise of any rights under a
Grant without registration under the Securities Act, subsequent registration of
such shares shall relieve the purchaser thereof of any investment restrictions
or representations made upon the exercise of such rights.

 

9.Amendment, Modification, Suspension or Discontinuance of the Plan. The Board
or Committee may, insofar as permitted by law, from time to time, with respect
to any shares at the time not subject to outstanding Grants, suspend or
terminate the Plan or revise or amend it in any respect whatsoever, except that
without the approval of the shareholders of the Company, no such revision or
amendment shall (i) increase the number of shares subject to the Plan, (ii)
decrease the price at which Grants may be granted, (iii) materially increase the
benefits to Participants, or (iv) change the class of persons eligible to
receive Grants under the Plan; provided, however, no such action shall alter or
impair the rights and obligations under any Option, or Stock Award, or
Restricted Stock Purchase Offer outstanding as of the date thereof without the
written consent of the Participant thereunder. No Grant may be issued while the
Plan is suspended or after it is terminated, but the rights and obligations
under any Grant issued while the Plan is in effect shall not be impaired by
suspension or termination of the Plan.

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10.

Capital Change of the Company. In the event of any change in the outstanding
Stock by reason of a stock split, stock dividend, combination or
reclassification of shares, recapitalization, merger, or similar event, the
Board or the Committee may adjust proportionally (a) the number of shares of
Stock (i) reserved under the Plan, (ii) available for Incentive Stock Options
and Nonstatutory Options and (iii) covered by outstanding Stock Awards or
Restricted Stock Purchase Offers; (b) the Stock prices related to outstanding
Grants; and (c) the appropriate Fair Market Value and other price determi

nations for such Grants. In the event of any other change affecting the Stock or
any distribution (other than normal cash dividends) to holders of Stock, such
adjustments as may be deemed equitable by the Board or the Committee, including
adjustments to avoid fractional shares, shall be made to give proper effect to
such event. In the event of a corporate merger, consolidation, acquisition of
property or stock, separation, reorganization or liquidation, the Board or the
Committee shall be authorized to issue or assume stock options, whether or not
in a transaction to which Section 424(a) of the Code applies, and other Grants
by means of substitution of new Grant Agreements for previously issued Grants or
an assumption of previously issued Grants.

 

 

11.Tax Withholding. The Company shall have the right to deduct applicable taxes
from any Grant payment and withhold, at the time of delivery or exercise of
Options, Stock Awards or Restricted Stock Purchase Offers or vesting of shares
under such Grants, an appropriate number of shares for payment of taxes required
by law or to take such other action as may be necessary in the opinion of the
Company to satisfy all obligations for withholding of such taxes. If Stock is
used to satisfy tax withholding, such stock shall be valued based on the Fair
Market Value when the tax withholding is required to be made.

 

12.Notice. Any written notice to the Company required by any of the provisions
of the Plan shall be addressed to the chief personnel officer or to the chief
executive officer of the Company, and shall become effective when it is received
by the office of the chief personnel officer or the chief executive officer.

 

13.Indemnification of Board. In addition to such other rights or
indemnifications as they may have as directors or otherwise, and to the extent
allowed by applicable law, the members of the Board and the Committee shall be
indemnified by the Company against the reasonable expenses, including attorneys'
fees, actually and necessarily incurred in connection with the defense of any
claim, action, suit or proceeding, or in connection with any appeal thereof, to
which they or any of them may be a party by reason of any action taken, or
failure to act, under or in connection with the Plan or any Grant granted
thereunder, and against all amounts paid by them in settlement thereof (provided
such settlement is approved by independent legal counsel selected by the
Company) or paid by them in satisfaction of a judgment in any such claim,
action, suit or proceeding, except in any case in relation to matters as to
which it shall be adjudged in such claim, action, suit or proceeding that such
Board or Committee member is liable for negligence or misconduct in the
performance of his or her duties; provided that within sixty (60) days after
institution of any such action, suit or Board proceeding the member involved
shall offer the Company, in writing, the opportunity, at its own expense, to
handle and defend the same.

 

14.Governing Law. The Plan and all determinations made and actions taken
pursuant hereto, to the extent not otherwise governed by the Code or the
securities laws of the United States, shall be governed by the law of the State
of Nevada and construed accordingly.

 

15.Effective and Termination Dates. The Plan shall become effective on the date
it is approved by the holders of a majority of the shares of Stock then
outstanding. If the Plan is not approved by the holders of a majority of the
shares of Stock within one (1) year from the date it is adopted and approved by
the Board, all stock options granted hereunder shall be deemed Nonstatutory
Options. The Plan shall terminate ten years later, subject to earlier
termination by the Board pursuant to Section 9.

 

 

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The foregoing 2015 Incentive Stock Plan was duly adopted and approved by the
Board of Directors on October 2, 2015.

 

  OriginClear, Inc.       By:  /s/ T. Riggs Eckelberry     T. Riggs Eckelberry
Chief Executive Officer

 

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