Document:

Exhibit 10.9

 

 

ORIGINCLEAR, INC.

Director
NONSTATUTORY STOCK OPTION AGREEMENT

 

 

This
Director Nonstatutory Stock Option Agreement ("Agreement") is made and entered into as of the date
set forth below, by and between OriginClear, Inc., a Nevada corporation (the "Company"), and the Director of
the Company ("Optionee") named in Section 1(b):

 

In consideration
of the covenants herein set forth, the parties hereto agree as follows:

 

1. Option Information.

 

		 	(a)	Date
    of Option:	October
    6, 2015	 
	 	 	 	 	 	 
	 	 	(b)	Optionee:	Byron Elton	 
	 	 	 	 	 	 
	 	 	(c)	Number
    of Shares:	500,000	 
	 	 	 	 	 	 
	 	 	(d)	Exercise
    Price:	$0.0375	 

 

2.
Acknowledgements.

 

(a) Optionee is a
member of the Board of the Company.

 

(b)
The Board of Directors (the "Board" which term shall include an authorized committee of the Board of Directors)
of the Company have heretofore adopted a 2015 Equity Incentive Plan (the "Plan"), pursuant to which this Option
is being granted.

 

(c)
The Board has authorized the granting to Optionee of a nonstatutory stock option ("Option") to purchase shares
of common stock of the Company ("Stock") upon the terms and conditions hereinafter stated and pursuant to an
exemption from registration under the Securities Act of 1933, as amended (the "Securities Act") provided by Section
4(a)(2) thereunder.

 

3. Shares; Price. The Company hereby grants to Optionee the right to purchase, upon and subject
to the terms and conditions herein stated, the number of shares of Stock set forth in Section 1(c) above (the "Shares")
for cash (or other consideration as is acceptable to the Board of Directors of the Company, in their sole and absolute discretion)
at the price per Share set forth in Section 1(d) above (the "Exercise Price").

 

4. Term of Option;
Continuation of Service. This Option shall expire, and all rights hereunder to purchase the Shares shall terminate four years
from the date hereof. This Option shall earlier terminate subject to Sections 7 and 8 hereof upon, and as of the date of, the
termination of Optionee's service as Director terminates prior to the end of such four year period.

 

    

     

    

 

5.
Vesting of Option. Subject to the provisions of Sections 7 and 8 hereof, this Option shall become exercisable during the
term of Optionee's service as Director. An initial amount of fifty percent (50%) of the Shares shall vest on the Date of Option
set forth in Section 1 above and fifty percent (50%) shall vest on the one year anniversary of the Date of Option set forth in
Section 1 above.

 

6. Exercise.
This Option shall be exercised by delivery to the Company of (a) written notice of exercise stating the number of Shares being
purchased (in whole shares only) and such other information set forth on the form of Notice of Exercise attached hereto as Appendix
A, (b) a check or cash in the amount of the Exercise Price of the Shares covered by the notice (or such other consideration as
has been approved by the Board of Directors consistent with the Plan) and (c) a written investment representation as provided
for in Section 12 hereof. This Option shall not be assignable or transferable, except by will or by the laws of descent and distribution,
and shall be exercisable only by Optionee during his or her lifetime, except as provided in Section 8 hereof..

 

7. Termination
of Service. If Optionee shall cease to serve as a Director of the Company for any reason, no further installments shall vest
pursuant to Section 5, and the maximum number of Shares that Optionee may purchase pursuant hereto shall be limited to the number
of Shares that were vested as of the date Optionee ceases to be a Director (to the nearest whole Share). Thereupon, Optionee shall
have the right to exercise this Option, at any time during the remaining term hereof, to the extent, but only to the extent, that
this Option was exercisable as of the date Optionee ceases to be a Director; provided, however, if Optionee is removed as a Director
pursuant to the Nevada corporation law, the foregoing right to exercise shall automatically terminate on the date Optionee ceases
to be a Director as to all Shares covered by this Option not exercised prior to termination. Unless earlier terminated, all rights
under this Option shall terminate in any event on the expiration date of this Option as defined in Section 4 hereof.

 

8. Death of Optionee.
If the Optionee shall die while serving as Director of the Company, Optionee's personal representative or the person entitled
to Optionee's rights hereunder may at any time within six (6) months after the date of Optionee's death, or during the remaining
term of this Option, whichever is the lesser, exercise this Option and purchase Shares to the extent, but only to the extent,
that Optionee could have exercised this Option as of the date of Optionee's death; provided, in any case, that this Option may
be so exercised only to the extent that this Option has not previously been exercised by Optionee.

 

9. No Rights as Shareholder.
Optionee shall have no rights as a shareholder with respect to the Shares covered by any installment of this Option until the
effective date of issuance of the Shares following exercise of this Option, and no adjustment will be made for dividends or other
rights for which the record date is prior to the date such stock certificate or certificates are issued except as provided in
Section 8 of the Plan.

 

10. Taxation upon
Exercise of Option. Optionee understands that, upon exercise of this Option, Optionee will recognize income, for Federal and
state income tax purposes, in an amount equal to the amount by which the fair market value of the Shares, determined as of the
date of exercise, exceeds the Exercise Price. The acceptance of the Shares by Optionee shall constitute an agreement by Optionee
to report such income in accordance with then applicable law and to cooperate with Company in establishing the amount of such
income and corresponding deduction to the Company for its income tax purposes. Withholding for federal or state income and employment
tax purposes will be made, if and as required by law, from Optionee's then current compensation, or, if such current compensation
is insufficient to satisfy withholding tax liability, the Company may require Optionee to make a cash payment to cover such liability
as a condition of the exercise of this Option.

 

11. Modification,
Extension and Renewal of Options. The Board or Committee, as described in the Plan, may modify, extend or renew this Option
or accept the surrender thereof (to the extent not theretofore exercised) and authorize the granting of a new option in substitution
therefore (to the extent not theretofore exercised), subject at all times to the Plan and the Code. Notwithstanding the foregoing
provisions of this Section 11, no modification shall, without the consent of the Optionee, alter to the Optionee's detriment or
impair any rights of Optionee hereunder.

 

    -2-

     

    

 

12.
Investment Intent; Restrictions on Transfer.

 

a) Optionee represents and agrees that
if Optionee exercises this Option in whole or in part, Optionee will in each case acquire the Shares upon such exercise for the
purpose of investment and not with a view to, or for resale in connection with, any distribution thereof; and that upon such exercise
of this Option in whole or in part, Optionee (or any person or persons entitled to exercise this Option under the provisions of
Sections 7 and 8 hereof) shall furnish to the Company a written statement to such effect, satisfactory to the Company in form
and substance. If the Shares represented by this Option are registered under the Securities Act, either before or after the exercise
of this Option in whole or in part, the Optionee shall be relieved of the foregoing investment representation and agreement and
shall not be required to furnish the Company with the foregoing written statement.

 

(b) Optionee further represents that Optionee has had access
to the financial statements or books and records of the Company, has had the opportunity to ask questions of the Company concerning
its business, operations and financial condition, and to obtain additional information reasonably necessary to verify the accuracy
of such information.

 

(c) Unless and until the Shares represented by this Option
are registered under the Securities Act, all certificates representing the Shares and any certificates subsequently issued in substitution
therefor and any certificate for any securities issued pursuant to any stock split, share reclassification, stock dividend or other
similar capital event shall bear legends in substantially the following form:

 

			THESE SECURITIES HAVE NOT BEEN REGISTERED
OR OTHERWISE QUALIFIED UNDER THE SECURITIES ACT OF 1933 (THE 'SECURITIES ACT') OR UNDER THE APPLICABLE OR SECURITIES LAWS OF ANY
STATE. NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE
OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.

 

			THE SHARES REPRESENTED BY THIS CERTIFICATE
HAVE BEEN ISSUED PURSUANT TO THAT CERTAIN NONSTATUTORY STOCK OPTION AGREEMENT DATED __10/06/15__ BETWEEN THE COMPANY AND
THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO REPURCHASE BY THE COMPANY UNDER CERTAIN CONDITIONS.

 

and/or such other legend or legends as
the Company and its counsel deem necessary or appropriate. Appropriate stop transfer instructions with respect to the Shares have
been placed with the Company's transfer agent.

 

    -3-

     

    

 

(d) For the purpose
of any transfer of any Shares represented by this Option under Rule 144 promulgated under the Securities Act (and for that purpose
only), the Optionee shall be considered an affiliate of the Company, regardless of whether the Optionee is an affiliate of the
Company as such term affiliate is defined in Rule 144, and shall be subject to the same limitations on the amount that can be
sold pursuant to Rule 144(e) or any successor rule.

 

13. Stand-off
Agreement. Optionee agrees that, in connection with any registration of the Company's securities under the Securities Act,
and upon the request of the Company or any underwriter managing an underwritten offering of the Company's securities, Optionee
shall not sell, short any sale of, loan, grant an option for, or otherwise dispose of any of the Shares (other than Shares included
in the offering) without the prior written consent of the Company or such managing underwriter, as applicable, for a period of
at least one year following the effective date of registration of such offering.

 

14. Notices.
Any notice required to be given pursuant to this Option or the Plan shall be in writing and shall be deemed to be delivered upon
receipt or, in the case of notices by the Company, five (5) days after deposit in the U.S. mail, postage prepaid, addressed to
Optionee at the address last provided by Optionee to the Company.

 

15. Agreement
Subject to Plan; Applicable Law. This Option is made pursuant to the Plan and shall be interpreted to comply therewith. A
copy of such Plan is available to Optionee, at no charge, at the principal office of the Company. Any provision of this Option
inconsistent with the Plan shall be considered void and replaced with the applicable provision of the Plan. This Option has been
granted, executed and delivered in the State of Nevada, and the interpretation and enforcement shall be governed by the laws thereof
and subject to the exclusive jurisdiction of the courts located in the State of Nevada.

 

[SIGNATURE
PAGE FOLLOWS]

    -4-

     

    

In
Witness Whereof, the parties hereto have executed this Option as of the date first
above written.

 

	COMPANY: 	OriginClear, Inc.	 
	 	 	 
	 	By:	 
	 	Name:T. Riggs Eckelberry	 
	 	Title: President & CEO	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	OPTIONEE:	By:	 
	 	(signature)	 
	 	 	 
	 	Name: Byron Elton	 

(one of the following,
as appropriate, shall be signed)

 

	I certify that as of the date hereof I am unmarried	 	
        By
        his or her signature, the spouse of Optionee hereby agrees to be bound by the provisions of the foregoing NONSTATUTORY STOCK OPTION
        AGREEMENT

         

	 	 	 
	Optionee	 	Spouse of Optionee

 

    -5-

     

    

 

Appendix A

 

NOTICE
OF EXERCISE

 

ORIGINCLEAR, INC.

_________________

_________________

_________________

 

Re: Nonstatutory
Stock Option

 

Notice is hereby
given pursuant to Section 6 of my Nonstatutory Stock Option Agreement that I elect to purchase the number of shares set forth
below at the exercise price set forth in my option agreement:

 

Nonstatutory Stock
Option Agreement dated: ____________

 

Number of shares
being purchased: ____________

 

Exercise Price: $____________

 

A check in the amount
of the aggregate price of the shares being purchased is attached.

 

I hereby confirm
that such shares are being acquired by me for my own account for investment purposes, and not with a view to, or for resale in
connection with, any distribution thereof. I will not sell or dispose of my Shares in violation of the Securities Act of 1933,
as amended, or any applicable federal or state securities laws. Further, I understand that the exemption from taxable income at
the time of exercise is dependent upon my holding such stock for a period of at least one year from the date of exercise and two
years from the date of grant of the Option.

 

I understand that
the certificate representing the Option Shares will bear a restrictive legend within the contemplation of the Securities Act and
as required by such other state or federal law or regulation applicable to the issuance or delivery of the Option Shares.

 

I agree to provide
to the Company such additional documents or information as may be required pursuant to the 2015 Equity Incentive Plan.

 

	 	By:	 
	 	(signature)	 
	 	 	 
	 	Name:	 
	 	 	 

 

-6-Exhibit 4.2

  

PAR TECHNOLOGY CORPORATION

2015 EQUITY INCENTIVE PLAN

(Effective Date: March 13, 2015)

1.            Purpose and Eligibility.  The purpose of this 2015 Equity Incentive Plan (the “Plan”) of PAR Technology Corporation, a Delaware corporation (the “Company”) is to provide stock options, stock issuances and other equity interests in the Company (each, an “Award”) to (a) key employees, officers, directors, consultants and advisors of the Company and its Subsidiaries, and (b) any other Person who is determined by the Board to have made (or is expected to make) contributions to the Company.  Any person to whom an Award has been granted under the Plan is called a “Participant”.  Additional definitions are contained in Section 10.

2.            Administration.

a.         Administration by Board of Directors. The Plan will be administered by the Board of Directors of the Company (the “Board”). The Board, in its sole discretion, shall have the authority to grant and amend Awards, to adopt, amend and repeal rules relating to the Plan and to interpret and correct the provisions of the Plan and any Award. The Board shall have authority, subject to the express limitations of the Plan, (i) to construe and determine the respective Stock Option Agreement, Awards and the Plan, (ii) to prescribe, amend and rescind rules and regulations relating to the Plan and any Awards, (iii) to determine the terms and provisions of the respective Stock Option Agreements and Awards, which need not be identical, (iv) to initiate an Option Exchange Program, and (v) to make all other determinations in the judgment of the Board of Directors necessary or desirable for the administration and interpretation of the Plan. The Board may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any Stock Option Agreement or Award in the manner and to the extent it shall deem expedient to carry the Plan, any Stock Option Agreement or Award into effect and it shall be the sole and final judge of such expediency. All decisions by the Board shall be final and binding on all interested persons.  Neither the Company nor any member of the Board shall be liable for any action or determination relating to the Plan.

 

b.        Appointment of Committee.  To the extent permitted by applicable law, the Board may delegate any or all of its powers under the Plan to the Compensation Committee (the “Committee”).  All references in the Plan to the “Board” shall mean such Committee or the Board.  The Committee may consult with the Company’s Stock Option Committee, which shall make recommendations, with respect to Participants eligible to receive Awards and the number of shares subject to the Award, to the Committee for its review and final approval.

 

c.         Delegation to Executive Officers.  To the extent permitted by applicable law, the Board may delegate to one or more executive officers of the Company the power to grant Awards and exercise such other powers under the Plan as the Board may determine, provided that the Board shall fix the maximum number of Awards to be granted and the maximum number of shares issuable to any one Participant pursuant to Awards granted by such executive officers.

 

d.        Applicability of Section Rule 16b-3.  Anything to the contrary in the foregoing notwithstanding if, or at such time as, the Common Stock is or becomes registered under Section 12 of the Exchange Act of 1934, as amended (the “Exchange Act”), or any successor statute, the Plan shall be administered in a manner consistent with Rule 16b-3 promulgated thereunder, as it may be amended from time to time, or any successor rules (“Rule 16b-3”), such that all subsequent grants of Awards hereunder to Reporting Persons, as hereinafter defined, shall be exempt under such rule.  Those provisions of the Plan which make express reference to Rule 16b-3 or which are required in order for certain option transactions to qualify for exemption under Rule 16b-3 shall apply only to such persons as are required to file reports under Section 16 (a) of the Exchange Act (a “Reporting Person”).

 

e.         Applicability of Section 162 (m).  Any provisions in this Plan to the contrary notwithstanding, whenever the Board is authorized to exercise its discretion in the administration or amendment of this Plan or any Award hereunder or otherwise, the Board may not exercise such discretion in a manner that would cause any outstanding Award that would otherwise qualify as performance-based compensation under Section 162 (m) of the Code to fail to so qualify under Section 162 (m).

 

3.            Stock Available for Awards.

a.         Number of Shares.  Subject to adjustment under Section 3(c), the aggregate number of shares of Common Stock of the Company (the “Common Stock”) that may be issued pursuant to the Plan is 1,000,000.  If any Award expires, or is terminated, surrendered or forfeited, in whole or in part, the unissued Common Stock covered by such Award shall again be available for the grant of Awards under the Plan. If an Award granted under the Plan shall expire or terminate for any reason without having been exercised in full, the unpurchased shares subject to such Award shall again be available for subsequent Awards under the Plan, and if shares of Common Stock issued pursuant to the Plan are repurchased by, or are surrendered or forfeited to, the Company at no more than the price paid for such shares, such shares of Common Stock shall again be available for the grant of Awards under the Plan. Shares issued under the Plan may consist in whole or in part of authorized but unissued shares or treasury shares.

 

b.        Per-Participant Limit. Subject to adjustment under Section 3(c), no Participant may be granted Awards during any one fiscal year to purchase more than the number of shares of Common Stock that are authorized for issuance pursuant to the Plan.

 

c.         Adjustment to Common Stock.  Subject to Section 7, in the event of any stock split, reverse stock split, stock dividend, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, combination, exchange of shares, liquidation, spin-off, split-up, or other similar change in capitalization or similar event, (i) the number and class of securities available for Awards under the Plan and the per-Participant share limit, (ii) the number and class of securities, vesting schedule and exercise price per share subject to each outstanding Option, (iii) the repurchase price per security subject to repurchase, and (iv) the terms of each other outstanding Award shall be adjusted by the Company (or substituted Awards may be made if applicable) to the extent the Board shall determine, in good faith, that such an adjustment (or substitution) is appropriate.

 

4.            Stock Options.

a.         General.  The Board may grant options to purchase Common Stock (each, an “Option”) and determine the number of shares of Common Stock to be covered by each Option, the exercise price of each Option and the conditions and limitations applicable to the exercise of each Option and the shares of Common Stock issued upon the exercise of each Option, including, but not limited to, vesting provisions, repurchase provisions and restrictions relating to applicable federal or state securities laws.  Each Option will be evidenced by a Stock Option Agreement, consisting of a Notice of Stock Option Award and a Stock Option Award Agreement (collectively, a “Stock Option Agreement”).

 

b.         Incentive Stock Options. An Option that the Board intends to be an incentive stock option (an “Incentive Stock Option”) as defined in Section 422 of the Code, as amended, or any successor statute (“Section 422”), shall be granted only to an employee of the Company and shall be subject to and shall be construed consistently with the requirements of Section 422 and regulations thereunder.  The Board and the Company shall have no liability if an Option or any part thereof that is intended to be an Incentive Stock Option does not qualify as such. An Option or any part thereof that does not qualify as an Incentive Stock Option is referred to herein as a “Nonstatutory Stock Option” or “Non-Qualified Stock Option”.

 

c.         Dollar Limitation. For so long as the Code shall so provide, Options granted to any employee under the Plan (and any other incentive stock option plans of the Company) which are intended to qualify as Incentive Stock Options shall not qualify as Incentive Stock Options to the extent that such Options, in the aggregate, become exercisable for the first time in any one calendar year for shares of Common Stock with an aggregate Fair Market Value (determined as of the respective date or dates of grant) of more than $100,000. The amount of Incentive Stock Options which exceed such $100,000 limitation shall be deemed to be Non-Qualified Stock Options.  For the purpose of this limitation, unless otherwise required by the Code or regulations of the Internal Revenue Service or determined by the Board, Options shall be taken into account in the order granted, and the Board may designate that portion of any Incentive Stock Option that shall be treated as Non-Qualified Stock Option in the event that the provisions of this paragraph apply to a portion of any Option.  The designation described in the preceding sentence may be made at such time as the Committee considers appropriate, including after the issuance of the Option or at the time of its exercise.

 

d.        Exercise Price.  The Board shall establish the exercise price (or determine the method by which the exercise price shall be determined) at the time each Option is granted and specify the exercise price in the applicable Stock Option Agreement, provided, however, in no event may the per share exercise price be less than the Fair Market Value (as defined below) of the Common Stock. In the case of an Incentive Stock Option granted to a Participant who, at the time of grant of such Option, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any parent or subsidiary, then the exercise price shall be no less than 110% of the Fair Market Value of the Common Stock on the date of grant.

 

e.         Duration of Options.  Each Option shall be exercisable at such times and subject to such terms and conditions as the Board may specify in the applicable Stock Option Agreement; provided, that the term of any Incentive Stock Option may not be more than ten (10) years from the date of grant.  In the case of an Incentive Stock Option granted to a Participant who, at the time of grant of such Option, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any parent or subsidiary, the term of the Option shall be no longer than five (5) years from the date of grant.

 

f.         Exercise of Option. Options may be exercised only by delivery to the Company of a written notice of exercise signed by the proper person together with payment in full as specified in Section 4(g) and the Stock Option Agreement for the number of shares for which the Option is exercised.

 

g.        Payment Upon Exercise.  Common Stock purchased upon the exercise of an Option shall be paid for by one or any combination of the following forms of payment as permitted by the Board in its sole and absolute discretion:

 

i.                by check payable to the order of the Company;

ii.              only if the Common Stock is then publicly traded, by delivery of an irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to the Company sufficient funds to pay the exercise price, or delivery by the Participant to the Company of a copy of irrevocable and unconditional instructions to a creditworthy broker to deliver promptly to the Company cash or a check sufficient to pay the exercise price;

iii.            to the extent explicitly provided in the applicable Stock Option Agreement, by delivery of shares of Common Stock owned by the Participant valued at Fair Market Value (as determined by the Board or as determined pursuant to the applicable Stock Option Agreement); or

iv.            payment of such other lawful consideration as the Board may determine.

The Board shall determine in its sole and absolute discretion and subject to securities laws and its Insider Trading Policy whether to accept consideration other than cash. The Fair Market Value of any shares of the Company's Common Stock or other non-cash consideration which may be delivered upon exercise of an Option shall be determined in such manner as may be prescribed by the Board.

h.        Acceleration, Extension, Etc. The Board may, in its sole discretion, and in all instances subject to any relevant tax (including Section 409A of the Code) and accounting considerations which may adversely impact or impair the Company, (i) accelerate the date or dates on which all or any particular Options or Awards granted under the Plan may be exercised, or (ii) extend the dates during which all or any particular Options or Awards granted under the Plan may be exercised; provided, however, in no event may any extension exceed the lesser of the option term permitted under Section 4(e) herein or the term set forth in the governing Stock Option Agreement.

 

i.         Determination of Fair Market Value. If, at the time an Option is granted under the Plan, the Company's Common Stock is publicly traded under the Exchange Act, “Fair Market Value” shall mean (i) if the Common Stock is listed on any established stock exchange, its Fair Market Value shall be the last reported sales price for such stock (on that date) or the closing bid, if no sales were reported as quoted on such exchange or system as reported in The Wall Street Journal or such other source as the Board deems reliable; or (ii) the average of the closing bid and asked prices last quoted (on that date) by an established quotation service for over-the-counter securities, if the Common Stock is not reported on a national market system. In the absence of an established market for the Common Stock, the Fair Market Value thereof shall be determined in good faith by the Board after taking into consideration all factors which it deems appropriate.

 

5.            Restricted Stock.

a.         Grants.  The Board may grant Awards entitling recipients to acquire shares of Common Stock, subject to (i) delivery to the Company by the Participant of a check in an amount at least equal to the par value of the shares purchased, and (ii) the right of the Company to repurchase all or part of such shares at their issue price or other stated or formula price from the Participant in the event that conditions specified by the Board in the applicable Award are not satisfied prior to the end of the applicable restriction period or periods established by the Board for such Award (each, a “Restricted Stock Award”).

 

b.        Terms and Conditions.  The Board shall determine the terms and conditions of any such Restricted Stock Award. Any stock certificates issued in respect of a Restricted Stock Award shall be registered in the name of the Participant and, unless otherwise determined by the Board, deposited by the Participant, together with a stock power endorsed in blank, with the Company (or its designee).  After the expiration of the applicable restriction periods, the Company (or such designee) shall deliver the certificates no longer subject to such restrictions to the Participant or, if the Participant has died, to the beneficiary designated by a Participant, in a manner determined by the Board, to receive amounts due or exercise rights of the Participant in the event of the Participant's death (the “Designated Beneficiary”). In the absence of an effective designation by a Participant, Designated Beneficiary shall mean the Participant's estate.

 

6.            Other Stock-Based Awards.  The Board shall have the right to grant other Awards based upon the Common Stock having such terms and conditions as the Board may determine, including, without limitation, the grant of shares based upon certain conditions, the grant of securities convertible into Common Stock and the grant of stock appreciation rights, phantom stock awards or stock units; provided, however, that any such grant that would be subject to Section 409A of the Code shall in all respects be compliant with Section 409A.

 

7.            General Provisions Applicable to Awards.

 

a.         Transferability of Awards. Except as the Board may otherwise determine or provide in an Award, Awards shall not be sold, assigned, transferred, pledged or otherwise encumbered by the person to whom they are granted, either voluntarily or by operation of law, except by will or the laws of descent and distribution, and, during the life of the Participant, shall be exercisable only by the Participant; provided, however, except as the Board may otherwise determine or provide in an Award, that Nonstatutory Options and Restricted Stock Awards may be transferred pursuant to a qualified domestic relations order (as defined in Employee Retirement Income Security Act of 1974, as amended) or to a grantor-retained annuity trust or a similar estate-planning vehicle in which the trust is bound by all provisions of the Stock Option Agreement and Restricted Stock Award, which are applicable to the Participant. References to a Participant, to the extent relevant in the context, shall include references to authorized transferees.

 

b.        Documentation.  Each Award under the Plan shall be evidenced by a written instrument in such form as the Board shall determine or as executed by an officer of the Company pursuant to authority delegated by the Board.  Each Award may contain terms and conditions in addition to those set forth in the Plan, provided that such terms and conditions do not contravene the provisions of the Plan or applicable law.

 

c.         Board Discretion.  The terms of each type of Award need not be identical, and the Board need not treat Participants uniformly.

 

d.        Additional Award Provisions.  The Board may, in its sole discretion, include additional provisions in any Stock Option Agreement, Restricted Stock Award or other Award granted under the Plan, including without limitation restrictions on transfer, repurchase rights, commitments to pay cash bonuses, to make, arrange for or guaranty loans or to transfer other property to Participants upon exercise of Awards, or transfer other property to Participants upon exercise of Awards, or such other provisions as shall be determined by the Board; provided that such additional provisions shall not be inconsistent with any other term or condition of the Plan or applicable law (including Section 409A of the Code).

 

e.         Termination of Status. The Board shall determine the effect on an Award of the disability (as defined in Code Section 22(e)(3)), death, retirement, authorized leave of absence or other change in the employment or other status of a Participant and the extent to which, and the period during which, the Participant, or the Participant's legal representative, conservator, guardian or Designated Beneficiary, may exercise rights under the Award, subject to applicable law and the provisions of the Code related to Incentive Stock Options.

 

f.         Change of Control of the Company.

  

i.          Unless otherwise expressly provided in the applicable Stock Option Agreement or Restricted Stock Award or other Award, in connection with the occurrence of a Change in Control (as defined below), the Board shall, in its sole discretion as to any outstanding Award (including any portion thereof; on the same basis or on different bases, as the Board shall specify), take one or any combination of the following actions:

 

A.            make appropriate provision for the continuation of such Award by the Company or the assumption of such Award by the surviving or acquiring entity and by substituting on an equitable basis for the shares then subject to such Award either (x) the consideration payable with respect to the outstanding shares of Common Stock in connection with the Change of Control, (y) shares of stock of the surviving or acquiring corporation or (z) such other securities as the Board deems appropriate, the Fair Market Value of which (as determined by the Board in its sole discretion) shall not materially differ from the Fair Market Value of the shares of Common Stock subject to such Award immediately preceding the Change of Control;

B.             accelerate the date of exercise or vesting of such Award; or

C.             permit the exchange of such Award for the right to participate in any stock option or other employee benefit plan of any successor corporation.

D.            For the purpose of this Agreement, a “Change of Control” shall mean:

(a)            The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended [the “Exchange Act”]) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of the then outstanding shares of voting stock of the Company (the “Outstanding Voting Stock”); provided, however, that any acquisition by the Company or its subsidiaries, or any employee benefit plan (or related trust) of the Company or its subsidiaries of 50% or more of Outstanding Voting Stock shall not constitute a Change in Control; and provided, further, that any acquisition by a corporation with respect to which, following such acquisition, more than 50% of the then outstanding shares of common stock of such corporation, is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Voting Stock immediately prior to such acquisition in substantially the same proportion as their ownership, immediately prior to such acquisition, of the Outstanding Voting Stock, shall not constitute a Change in Control; or

(b)            Individuals who, as of the Effective Date, constitute the Board (the “Incumbent Directors”) cease for any reason to constitute a majority of the members of this Board; provided that any individual who becomes a director after the Effective Date whose election or nomination for election by the Company’s Shareholders was approved by a majority of the members of the Incumbent Directors (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened “election contest” relating to the election of the Directors of the Company (as such terms are used in Rule 14a-11 under the Exchange Act), “tender offer” (as such term is used in Section 14(d) of the Exchange Act) or a proposed Merger (as defined below) shall be deemed to be members of the Incumbent Directors; or

 

(c)            The consummation of (i) a reorganization, merger or consolidation (any of the foregoing, a “Merger”), in each case, with respect to which all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Voting Stock immediately prior to such Merger do not, following such Merger, beneficially own, directly or indirectly, more than 50% of the then outstanding shares of common stock of the corporation resulting from Merger, (ii) a complete liquidation or dissolution of the Company or (iii) the sale or other disposition of all or substantially all of the assets of the Company, excluding a sale or other disposition of assets to a subsidiary of the Company.

g.        Dissolution or Liquidation.  In the event of the proposed dissolution or liquidation of the Company, the Board shall notify each Participant as soon as practicable prior to the effective date of such proposed transaction.  The Board in its sole discretion may provide for a Participant to have the right to exercise his or her Award until fifteen (15) days prior to such transaction as to all of the shares of Common Stock covered by the Option or Award, including shares as to which the Option or Award would not otherwise be exercisable, which exercise may in the sole discretion of the Board, be made subject to and conditioned upon the consummation of such proposed transaction.  In addition, the Board may provide that any Company repurchase option applicable to any shares of Common Stock purchased upon exercise of an Option or Award shall lapse as to all such shares of Common Stock, provided the proposed dissolution and liquidation takes place at the time and in the manner contemplated.  To the extent it has not been previously exercised, an Award will terminate upon the consummation of such proposed action.

 

h.        Assumption of Options Upon Certain Events. In connection with a merger or consolidation of an entity with the Company or the acquisition by the Company of property or stock of an entity, the Board may grant Awards under the Plan in substitution for stock and stock-based awards issued by such entity or an affiliate thereof.

 

i.          The substitute Awards shall be granted on such terms and conditions as the Board considers appropriate in the circumstances.

 

j.          Parachute Payments and Parachute Awards.  Notwithstanding the provisions of Section 7(f), if, in connection with a Change of Control described therein, a tax under Section 4999 of the Code would be imposed on the Participant (after taking into account the exceptions set forth in Sections 280G(b)(4) and 280G(b)(5) of the Code, if applicable), then the number of Awards which shall become exercisable, realizable or vested as provided in such Section shall be reduced (or delayed), to the minimum extent necessary, so that no such tax would be imposed on the Participant (the Awards not becoming so accelerated, realizable or vested, the “Parachute Awards”); provided, however, that if the “aggregate present value” of the Parachute Awards would exceed the tax that, but for this sentence, would be imposed on the Participant under Section 4999 of the Code in connection with the Change of Control, then the Awards shall become immediately exercisable, realizable and vested without regard to the provisions of this sentence. For purposes of the preceding sentence, the “aggregate present value” of an Award shall be calculated on an after-tax basis (other than taxes imposed by Section 4999 of the Code) and shall be based on economic principles rather than the principles set forth under Section 280G of the Code and the regulations promulgated thereunder. All determinations required to be made under this Section 7(j) shall be made by the Company.

 

k.         Amendment of Awards.  The Board may amend, modify or terminate any outstanding Award including, but not limited to, substituting therefor another Award of the same or a different type, changing the date of exercise or realization, and converting an Incentive Stock Option to a Nonstatutory Stock Option, provided that the Participant's consent to such action shall be required unless the Board determines that the action, taking into account any related action, would not materially and adversely affect the Participant.

 

1.          Conditions on Delivery of Stock. The Company will not be obligated to deliver any shares of Common Stock pursuant to the Plan or to remove restrictions from shares previously delivered under the Plan until (i) all conditions of the Award have been met or removed to the satisfaction of the Company, (ii) in the opinion of the Company's counsel, all other legal matters in connection with the issuance and delivery of such shares have been satisfied, including any applicable securities laws and any applicable stock exchange or stock market rules and regulations, and (iii) the Participant has executed and delivered to the Company such representations or agreements as the Company may consider appropriate to satisfy the requirements of any applicable laws, rules or regulations.

 

m.        Acceleration. The Board may at any time provide that any Options shall become immediately exercisable in full or in part, that any Restricted Stock Awards shall be free of some or all restrictions, or that any other stock-based Awards may become exercisable in full or in part or free of some or all restrictions or conditions, or otherwise realizable in full or in part, as the case may be, despite the fact that the foregoing actions may (i) cause the application of Sections 280G and 4999 of the Code if a change in control of the Company occurs, or (ii) disqualify all or part of the Option as an Incentive Stock Option.

8.            Withholding.  The Company shall have the right to deduct from payments of any kind otherwise due to the optionee or recipient of an Award any federal, state or local taxes of any kind required by law to be withheld with respect to any shares issued upon exercise of Options under the Plan or the purchase of shares subject to the Award. Subject to the prior approval of the Company, including without limitation, its determination that such withholding complies with applicable tax and securities laws, which may be withheld by the Company in its sole discretion, the optionee or recipient of an Award may elect to satisfy such obligation, in whole or in part, (a) by causing the Company to withhold shares of Common Stock otherwise issuable pursuant to the exercise of an Option or the purchase of shares subject to an Award or (b) by delivering to the Company shares of Common Stock already owned by the optionee or Award recipient of an Award. The shares so delivered or withheld shall have a Fair Market Value of the shares used to satisfy such withholding obligation as shall be determined by the Company as of the date that the amount of tax to be withheld is to be determined. An optionee or recipient of an Award who has made an election pursuant to this Section may only satisfy his or her withholding obligation with shares of Common Stock which are not subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements.

9.            No Exercise of Option if Engagement or Employment Terminated for Cause.  If the employment or engagement of any Participant is terminated “for Cause”, the Award may terminate, upon a determination of the Board, on the date of such termination and the Option shall thereupon not be exercisable to any extent whatsoever and the Company shall have the right to repurchase any shares of Common Stock subject to a Restricted Stock Award whether or not such shares have vested.  For purposes of this Section 9, “for Cause” shall be defined as follows:  (i) if the Participant has executed an employment agreement, the definition of “Cause” contained therein, if any, shall govern, or (ii) conduct, as determined by the Board of Directors, involving one or more of the following: (a) gross misconduct; or (b) the commission of an act of embezzlement, fraud or theft, which results in economic loss, damage or injury to the Company; or (c) the unauthorized disclosure of any trade secret or confidential information of the Company (or any client, customer, supplier or other third party who has a business relationship with the Company) or the violation of any noncompetition or nonsolicitation covenant or assignment of inventions obligation with the Company; or (d) the commission of an act which constitutes unfair competition with the Company or which induces any customer or prospective customer of the Company to breach a contract with the Company or to decline to do business with the Company; or (e) the indictment of the Participant for a felony or serious misdemeanor offense, either in connection with the performance of his or her obligations to the Company or which shall adversely affect the Participant’s ability to perform such obligations; or (f) the commission of an act of fraud or breach of fiduciary duty which results in loss, damage or injury to the Company; or (g) the failure of the Participant to perform in a material respect his or her employment, consulting or advisory obligations without proper cause; or (h) intentional violation of securities laws or the Company’s Insider Trading Policy.  In making such determination, the Board shall act fairly and in utmost good faith. The Board may in its discretion waive or modify the provisions of this Section at a meeting of the Board with respect to any individual Participant with regard to the facts and circumstances of any particular situation involving a determination under this Section.

 

10.          Miscellaneous.

 

a.         Definitions.

 

i.                “Company”, for purposes of eligibility under the Plan, shall include any present or future subsidiary corporations of PAR Technology Corporation, as defined in Section 424(f) of the Code (a “Subsidiary”), and any present or future parent corporation of the Company, as defined in Section 424(e) of the Code. For purposes of Awards other than Incentive Stock Options, the term “Company” shall include any other business venture in which the Company has a direct or indirect significant interest, as determined by the Board in its sole discretion.

 

ii.              “Code” means the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder.

iii.          “Employee” for purposes of eligibility under the Plan shall include a person to whom an offer of employment has been extended by the Company.

iv.            “Option Exchange Program” means a program whereby outstanding options are exchanged for options with a lower exercise price.

b.         No Right To Employment or Other Status.  No person shall have any claim or right to be granted an Award, and the grant of an Award shall not be construed as giving a Participant the right to continued employment or any other relationship with the Company. The Company expressly reserves the right at any time to dismiss or otherwise terminate its relationship with a Participant free from any liability or claim under the Plan.

 

c.         No Rights As Stockholder.  Subject to the provisions of the applicable Award, no Participant or Designated Beneficiary shall have any rights as a stockholder with respect to any shares of Common Stock to be distributed with respect to an Award until becoming the record holder thereof.

 

d.        Effective Date and Term of Plan. The Plan shall become effective on the date on which it is adopted by the Board (the “Effective Date”).  No Awards shall be granted under the Plan after the completion of ten years from the date on which the Plan was adopted by the Board, but Awards previously granted may extend beyond that date.

 

e.         Amendment of Plan. The Board may amend, suspend or terminate the Plan or any portion thereof at any time.

  

f.         Settlement of Awards.  Any other provision of the Plan to the contrary notwithstanding, if any provision of the Plan permits a Participant, at his or her election, to receive a cash settlement of Options or other Awards under the Plan, or requires the Company to pay a cash settlement of Options or Awards under the Plan, the Participant shall be entitled to receive the cash settlement, and the Company shall be obligated to pay the cash settlement, only if the Company determines, in its sole and absolute discretion, to make such payment.

g.        Governing Law. The provisions of the Plan and all Awards made hereunder shall be governed by and interpreted in accordance with the laws of the state of incorporation of the Company, Delaware, without regard to any applicable conflicts of law.

  

Approvals:

Original Plan:

Adopted by the Board of Directors on:  March 13, 2015

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