Document:

Exhibit 10.17

 

 

PAR TECHNOLOGY CORPORATION

2005 EQUITY INCENTIVE PLAN

NOTICE OF AWARD

  

Unless otherwise defined herein, the terms defined in the Company’s 2005 Equity Incentive Plan shall have the same defined meanings in this Notice of Award and the attached Award Terms, which are incorporated herein by reference (together, the “Award Agreement”).

Stock options and/or restricted stock awarded to the Participant, and the vesting conditions applicable to each, are described in Part I of this Award Agreement.  The terms and conditions applicable only to stock option awards are described in Part II of this Award Agreement.  The terms and conditions applicable only to restricted stock awards are described in Part III of this Award Agreement.  The terms and conditions that apply to both stock option awards and restricted stock awards are described in Part IV of this Award Agreement.

 

	
Date of Grant by the Board of Directors:

	
 

	
Participant (the “Participant”):

	
 

	
Name:

	
 

	
Address:

	
 

 

PART I

STOCK OPTION AND/OR RESTRICTED STOCK AWARD

Stock Option Grant

The undersigned Participant has been granted an Option to purchase Common Stock of the Company, subject to the terms and conditions of the Plan and this Award Agreement, as follows:

 

	
“Effective Date” of Grant

	
 

	
Total Exercise Price

	
 

	 			
	
Exercise Price per Share

	
 

	
Type of Option

	
 

	 			
	
Total “Option Shares” Granted

	
 

	
Option Expiration Date

	
 

Option Vesting Schedule

Subject to any additional vesting conditions described below, this Option shall be exercisable, in whole or in part, according to the following vesting schedule:

 

	
Months (or years) of Service Following

Effective Date of Grant

	
% of Grant (or # of Shares) Exercisable

	
 

	
 

	
 

	
 

 

Additional Stock Option Vesting Conditions

[Insert additional vesting conditions, if any]

 

Restricted Stock Grant

The undersigned Participant has been granted the right to purchase, and has agreed to purchase, ___________ “Restricted Shares” of the Company’s Common Stock at a purchase price of $0.02 per share.  The aggregate purchase price for the Restricted Shares is __________ Dollars ($_______) (the “Purchase Price”), which shall be paid by the Participant.  The Participant acknowledges and agrees that the Participant’s right to retain such Restricted Shares is subject to the vesting, forfeiture, and other terms and conditions set forth in the Plan and in this Award Agreement.

Restricted Stock Vesting Schedule

Subject to any additional vesting conditions described below, the Restricted Shares shall become vested, in whole or in part, according to the following vesting schedule:

 

	
Months (or years) of Service Following 

Effective Date of Grant

	
% of Grant (or # of Shares) Vested

	
 

	
 

	
 

	
 

 

Additional Restricted Stock Vesting Conditions

[Insert additional vesting conditions, if any]

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SPECIAL TERMS:  [Company to mark all that apply]

	o	Change of Control

As an exception to the vesting schedules and vesting conditions described above, but subject to the applicable limitations imposed by the Plan, if a Change of Control (as defined in the Plan) occurs in connection with the Company (or the Company’s business unit by whom the Stockholder is employed) prior to the vesting of all Options or Restricted Shares granted pursuant to this Award Agreement, and if the Participant maintains a continuous Business Relationship with the Company (or employee of the relevant business unit, as the case may be) through the effective date of the Change of Control, then, as of such effective date, the Participant shall vest in the right to exercise the entire Option and shall vest in all of the Restricted Shares to the extent that the Option and the Restricted Shares are then outstanding (i.e. those Options and Restricted Shares under this Award Agreement which have not already vested, expired or have been forfeited under the terms of this Award Agreement as of the effective date of the Change of Control).  For purposes of this Award Agreement, a “Business Relationship” means an employment or other business relationship with the Company or with an affiliate or subsidiary of the Company (i.e., any business organization controlling, controlled by, or under common control with, the Company).

	o	
Other

[Insert additional Special Terms, if any]

 

This Award Agreement is entered into pursuant to and subject to the terms of the Plan, the applicable terms of which are incorporated herein by reference.  This Award Agreement (inclusive of Parts I through IV), any Exhibits to this Award Agreement and applicable terms of the Plan constitute the entire agreement between the parties, and all premises, representations, understandings, warranties and agreements with reference to the subject matter hereof have been expressed herein or in the documents incorporated herein by reference.

 

	
Participant

	
 

	
PAR Technology Corporation

	
 

		
 

	
 

		
 

	
 

	By:	 	
 

	By:	 	
 

		
 

	
 

		
 

	
 

	
Printed Name:

	
 

	
 

	
Printed Name:

	 	
 

		
 

	
 

		
 

	
 

	Title: 	 	
 

	Title: 	 	
 

		
 

	
 

		
 

	
 

	Date:	 	
 

	Date:	 	
 

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PAR TECHNOLOGY CORPORATION

2005 EQUITY INCENTIVE PLAN

NOTICE OF AWARD

 

PART II

STOCK OPTION AWARD TERMS

1.            Grant of Option.  The Participant named in the Notice of Award has been granted an option (the “Option”) to purchase the number of shares of Common Stock set forth in the Notice of Award, at the exercise price per Share set forth in the Notice of Award (the “Exercise Price”), and subject to the terms and conditions of the 2005 Equity Incentive Plan (the “Plan”), which is incorporated herein by reference.  In the event of a conflict between the terms and conditions of the Plan and this Award Agreement, the terms and conditions of the Plan shall prevail.

If designated in the Notice of Award as an Incentive Stock Option (“ISO”), this Option is intended to qualify as an Incentive Stock Option as defined in Section 422 of the Code.  Nevertheless, to the extent that it exceeds the $100,000 limitation rule of Code Section 422(d), this Option shall be treated as a Non-statutory Stock Option ("NSO").

2.            Exercise of Option.

(a)            Right to Exercise.  This Option may be exercised during its term in accordance with the vesting conditions set out in the Notice of Award and with the applicable provisions of the Plan and this Award Agreement.

(b)            Method of Exercise.  This Option shall be exercisable by delivery of an exercise notice in the form attached as Exhibit A (the “Exercise Notice”) which shall state the election to exercise the Option, the number of shares of Common Stock with respect to which the Option is being exercised (the “Exercised Shares”), and such other representations and agreements as may be required by the Company.  The Exercise Notice shall be accompanied by payment of the aggregate Exercise Price as to all Exercised Shares.  This Option shall be deemed to be exercised upon receipt by the Company of such fully executed Exercise Notice accompanied by either (i) payment of the aggregate Exercise Price, or (ii) such permitted directions or other means to satisfy the aggregate Exercise Price

No shares of Common Stock shall be issued pursuant to the exercise of an Option unless such issuance and such exercise comply with applicable laws.  Assuming such compliance, for income tax purposes the shares of Common Stock shall be considered transferred to the Participant on the date on which the Option is exercised with respect to such shares.

3.            Termination. To the extent then vested, this Option shall be exercisable for 90 days after the date that the Participant’s Business Relationship with the Company ends; provided, however, if the Participant’s Business Relationship with the Company ends “for Cause” (as defined in the Plan), this Option shall immediately terminate.  If the Participant’s Business Relationship with the Company ends as a result of the Participant's death, disability or retirement, this Option may be exercised until the earlier of (i) the first anniversary of the date the Business Relationship ends, or (ii) the expiration of the Term as described in Section 6 below.  However, in no event may this Option be exercised after the Expiration Date specified in the Notice of Award.

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4.            Restrictions on Exercise.  This Option may not be exercised if the issuance of such shares of Common Stock upon such exercise or the method of payment of consideration for such shares would constitute a violation of any applicable law, including without limitation securities laws or the Company’s Insider Trading Policy.

5.            Non-Transferability of Option.  This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Participant only by Participant.  The terms of the Plan and this Award Agreement shall be binding upon the executors, heirs, successors and assigns of the Participant.

6.            Term of Option.  This Option may be exercised only within the Term set out in the Notice of Award which Term may not exceed ten years from the Date of Grant, and may be exercised during such Term only in accordance with the Plan and the terms of this Award Agreement.

7.            Restrictions on Transfers of Exercised Shares.  Exercised Shares may be sold or transferred in accordance with Company trading policy as follows:

(a)            Exercised Shares may be sold or transferred in such number as the Company reasonably estimates will be sufficient to provide the Participants with enough after-tax cash to pay the exercise price and related broker commission, as well as the income and employment taxes that become due as a result of the exercise of the Option;

(b)            fifty percent (50%) of the Exercised Shares that remain after the sale or transfer described in (a) above may be sold or transferred at the Participant’s discretion; and

(c)            fifty percent (50%) of the Exercised Shares that remain after the sale or transfer described in (a) must be held by the Participant until such time as the Participant owns (free of restrictions) shares of Common Stock having a fair market value at least equal to 200 percent of the Participant’s annualized base salary; any excess may be sold or transferred at the Participant’s discretion.

8.            Return of Exercised Shares and Excess Profits.  This Option and any Exercised Shares which are subject to recovery under any law, government regulation or stock exchange listing requirement, will be subject to such deductions and clawback as may be required to be made pursuant to such law, government regulation or stock exchange listing requirement (or any policy adopted by the Company pursuant to any such law, government regulation or stock exchange listing requirement).

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EXHIBIT A

2005 EQUITY INCENTIVE PLAN

EXERCISE NOTICE

PAR Technology Corporation

8383 Seneca Turnpike

New Hartford, NY 13413

Attention:  President

		1.	Exercise of Option.  Effective as of today, ______________, 20__, the undersigned ("Participant") hereby elects to exercise Participant's option to purchase _________ shares of the Common Stock (the "Shares") of PAR Technology Corporation (the "Company") under and pursuant to the 2005 Equity Incentive Plan (the "Plan") and the Stock Option Award Agreement dated  ____________, 20__ (the "Award Agreement").

		2.	Delivery of Payment.  Purchaser herewith delivers to the Company the full purchase price of the Shares, as set forth in the Award Agreement.

		3.	Representations of Participant.  Participant acknowledges that Participant has received, read and understood the Plan and the Award Agreement and agrees to abide by and be bound by their terms and conditions.

		4.	Rights as Stockholder.  Until the issuance of the Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option.  The Shares shall be issued to the Participant as soon as practicable after the Option is exercised.  No adjustment shall be made for a dividend or other right for which the record date is prior to the date of issuance except as provided in Section 3(c) of the Plan.

		5.	Tax Consultation.  Participant understands that Participant may suffer adverse tax consequences as a result of Participant's purchase or disposition of the Shares.  Participant represents that Participant has consulted with any tax consultants Participant deems advisable in connection with the purchase or disposition of the Shares and that Participant is not relying on the Company for any tax advice.

		6.	Interpretation.  Any dispute regarding the interpretation of this Notice, the Plan or the Award Agreement shall be submitted by Participant or by the Company forthwith to the Company’s Compensation Committee which shall review such dispute at its next regular meeting.  The resolution of such a dispute by the Committee shall be final and binding on all parties.

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		7.	Governing Law; Severability.  This Notice, the Plan and the Award Agreement shall be governed by the laws of the state of Delaware excluding its conflict of law provisions.

 

	
Submitted by:

	
 

	
Accepted by:

	
 

	 			
	
PARTICIPANT

	
 

	
PAR Technology Corporation

	
 

	
 

	
 

	
 

	
 

	
Signature

	
 

	
By

	
 

	
 

	
 

	
 

	
 

	
Print Name

	
 

	
Title

	
 

	
 

	
 

	
 

	
 

	
Address:

	
 

	
Address:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
8383 Seneca Turnpike

	
 

	
 

	
 

	
New Hartford, NY 13413

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Date Received

	
 

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PAR TECHNOLOGY CORPORATION

2005 EQUITY INCENTIVE PLAN

NOTICE OF AWARD

 

PART III

RESTRICTED STOCK AWARD TERMS

1.            Grant of Restricted Shares.  The Participant named in the attached Notice of Award has been granted the number of Restricted Shares set forth in the Notice of Award, subject to the applicable terms and conditions set forth in the Company’s 2005 Equity Incentive Plan (the “Plan”), which terms and conditions are incorporated herein by reference.  In the event of a conflict between the terms and conditions of the Plan and this Award Agreement, the terms and conditions of the Plan shall prevail.

2.            Stock Power.  Simultaneously with execution of this Award Agreement, the Participant shall execute the Stock Power attached hereto as Exhibit B.  Upon receipt of the executed Stock Power and full payment of the Purchase Price set forth in the Notice of Award, the Company shall issue and hold in escrow one or more certificates in the name of the Participant for that number of Restricted Shares purchased by the Participant, subject to the other terms and conditions of this Award Agreement.  While in escrow, the Participant shall not sell, assign, transfer, pledge, hypothecate or otherwise dispose of, by operation of law or otherwise (collectively “transfer”), any of the Restricted Shares, or any interest therein.  As an alternative to issuing physical certificates, the Company may record ownership of the Restricted Shares, and the applicable restrictions, in book form (or in any other form of un-certificated ownership).

3.            Vesting.  The Restricted Shares shall vest pursuant to those terms set forth in the Notice of Award.  Until vesting has been achieved, the Restricted Shares shall be referred to as Unvested Restricted Shares.  Upon vesting, the Restricted Shares shall be referred to as Vested Restricted Shares and shall be released from escrow.  However, certificates for Vested Restricted Shares shall bear a restrictive legend that indicates, among other things, that the Vested Restricted Shares are subject to the restrictions on transfer set forth in this Award Agreement.

4.            Forfeiture and Claw-Back.

(a)            Forfeiture.  Unvested Restricted Shares shall be forfeited and subject to the Company’s Repurchase Rights described below upon the earlier of (i) the date the Participant ceases to have a Business Relationship with the Company, for any reason or no reason, or (ii) the date of expiration of the vesting and/or measurement period for any performance vesting triggers (including the associated catch-up provisions, if any) specified in the Notice of Award (“Forfeiture Date”).  In the event of a forfeiture, the Company shall repurchase (the “Repurchase Right”) from the Participant each of the Unvested Restricted Shares for the per share Purchase Price stated in the Notice of Award ($0.02 per share).  In no event shall the Repurchase Right obligate the Company to purchase from the Participant any Vested Shares.

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(b)            Termination for Cause.  In addition to the Repurchase Right described in 4(a) above, in the event the Business Relationship between the Participant and the Company is terminated by the Company “for Cause” (as defined in the Plan), all of the Participant’s rights and benefits under this Award Agreement shall immediately terminate.

(c)            Return/Claw-Back of Shares with Performance Vesting.  Restricted Shares (including both Unvested Restricted Shares and Vested Restricted Shares) which are subject to recovery under any law, government regulation or stock exchange listing requirement, will be subject to such deductions and claw-back as may be required to be made pursuant to such law, government regulation or stock exchange listing requirement (or any policy adopted by the Company pursuant to any such law, government regulation or stock exchange listing requirement).

(d)            Exercise of Repurchase Right and Closing.

(i)        The Company shall exercise the Repurchase Right described in this Section 4 by delivering or mailing to the Participant (or Participant’s estate) written notice of exercise within 30 days after the Forfeiture Date or the date the Business Relationship between the Participant and the Company is terminated by the Company “for Cause” or such deduction/clawback period pursuant to any applicable law, government regulation or stock exchange listing requirement.

(ii)        Within ten days after receipt of the Company’s notice of the exercise of the Repurchase Right described above, the Participant (or Participant’s estate or escrow agent) shall tender to the Company at its principal offices the certificate or certificates, if applicable, representing the Restricted Shares which the Company has elected to purchase, duly endorsed in blank by the Participant or with duly executed stock powers attached thereto, all in form suitable for the transfer of such Restricted Shares to the Company.  If ownership of the Restricted Shares is reflected in book form (or in any other form of un-certificated ownership), the Participant shall execute and provide any and all such documentation or other authorization suitable for the transfer of such Restricted Shares to the Company.

(iii)        After the time at which any Restricted Shares are required to be delivered to the Company for transfer to the Company pursuant to subsection (ii) above, the Company shall not pay any dividend to the Participant on account of such Restricted Shares or permit the Participant to exercise any of the privileges or rights of a stockholder with respect to such Restricted Shares, but shall, insofar as permitted by law, treat the Company as the owner of such Restricted Shares.

(iv)        The Company shall not purchase any fraction of a Restricted Share upon exercise of the Repurchase Right, and any fraction of a Restricted Share shall be rounded to the nearest whole Restricted Share (with any fraction greater than or equal to one-half (1/2) Restricted Share being rounded upward).

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5.            Restrictions on Transfers of Vested Restricted Shares.  Restricted Shares may be sold or transferred in accordance with Company trading policy as follows:

(a)            Vested Restricted Shares may be sold or transferred in such number as the Company reasonably estimates will be sufficient to provide the Participants with enough after-tax cash to pay income and employment taxes that become due as a result of the exercise of the Option;

(b)            fifty percent (50%) of the Vested Restricted Shares that remain after the sale or transfer described in (a) above may be sold or transferred at the Participant’s discretion; and

(c)            fifty percent (50%) of the Vested Restricted Shares that remain after the sale or transfer described in (a) must be held by the Participant until such time as the Participant owns (free of restrictions) shares of Common Stock having a fair market value at least equal to 200 percent of the Participant’s annualized base salary; any excess may be sold or transferred at the Participant’s discretion.

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EXHIBIT B

IRREVOCABLE STOCK POWER

FOR VALUE RECEIVED, the undersigned does hereby sell, assign and transfer to PAR Technology Corporation

 

__________ shares of the common stock of PAR Technology Corporation represented by Certificate(s) No(s) _____________ inclusive, standing in the name of the undersigned on the books of said Company.

The undersigned does hereby irrevocably constitute and appoint ________ attorney to transfer the said stock, as the case may be, on the books of said Company, with full power of substitution in the premises.

 

	
 

	
Dated:

	
 

	
(x)

	
 

	
 

	
 

	
 

	
 

	
PERSON EXECUTING THIS POWER SIGN HERE

	
IMPORTANT  -  READ CAREFULLY

	
 

	
 

	
The signature(s) to this Power must correspond with the name(s) as written upon the face of the certificate(s) in every particular without alternation or enlargement or any change whatever.

	
 

	
                            

 

 

	
 

	
 

	
IMPRINT SIGNATURE MEDALLION HERE

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EXHIBIT C

Election under Section 83(b) on Behalf of Taxpayer

(Soft copy available upon request)

The undersigned Taxpayer hereby elects under Section 83(b) of the Internal Revenue Code of 1986, as amended, and Section 1.83-2(a) of the Income Tax Regulations, to include in his gross income the excess of the fair market value of the property described below over the amount paid therefor by the Taxpayer.  In compliance with Reg. § 1.83-2(e) the Taxpayer provides the following information:

 

	1.  	
The Taxpayer’s name, address and taxpayer identification number are as follows:

 

Name:

Address:

Taxpayer identification number: 

 

	2.	
The property with respect to which this election is being made is:  _________________ shares of common stock of PAR Technology Corporation, a Delaware corporation (the “Company”), $0.02 par value per share (the “Shares”).

 

	3.  	
The date of the transfer of the Shares is _________, 20___.  This election is made for the taxable year of the Taxpayer ending December 31, 20____.

 

	4.	The nature of the restrictions to which the Shares are subject is as follows:

 

	5.  	
The fair market value of such Shares at the time of transfer to the Taxpayer, determined without regard to any lapse restrictions as defined in Reg. § 1.83-3(i), is ____________ per share.

 

	6.	
The amount paid for the Shares is $0.02 per share.

 

	7. 	
A copy of this election has been furnished by personal delivery to the Company.

 

The date of this election is ___, 20__.

	
 

	
 

	
 

	
Taxpayer

	
 

	
 

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PAR TECHNOLOGY CORPORATION

2005 EQUITY INCENTIVE PLAN

NOTICE OF AWARD

 

PART IV

GENERAL AWARD TERMS

1.                  Adjustments for Stock Splits, Stock Dividends, etc.  If there is any stock split-up, stock dividend, stock distribution or other reclassification of the Common Stock of the Company, any and all new, substituted or additional securities to which the Participant is entitled by reason of his or her ownership of the Option and/or Restricted Shares shall be immediately subject to the restrictions on transfer and the other provisions of this Award Agreement in the same manner and to the same extent as the Option and Restricted Shares.  The Exercise Price and Purchase Price shall be appropriately adjusted.

2.                 Market “Stand-Off” Agreement.  During the period of duration (not to exceed 180 days) specified by the Company and an underwriter of Common Stock or other securities of the Company, following the effective date of a registration statement of the Company filed under the Act, the Participant shall not, to the extent requested by the Company and such underwriter, directly or indirectly sell, offer to sell, contract to sell (including without limitation, any short sale), grant any option to purchase or otherwise transfer or dispose of (other than to donees who agree to be similarly bound) any securities of the Company held by the Participant at any time during such period except shares included in such registration; provided, however, that all officers and directors of the Company enter into similar agreements.  The market “stand-off” agreement established pursuant to this Section shall survive termination or expiration of this Award Agreement.

3.                 Transfers in Violation of Agreement.  If any transfer of the Option, Exercised Shares or Restricted Shares is made or attempted contrary to the provisions of this Award Agreement, the Company shall have the right to purchase the Exercised Shares and Restricted Shares from the owner thereof or his transferee at any time before or after the transfer, as herein provided.  In the event that the Company elects to exercise its right under this Section, it may do so by canceling the certificate(s) representing the affected Exercised Shares and Restricted Shares and depositing the purchase price, which shall be the stated par value of each applicable share of Common Stock, in a bank account for the benefit of Participant, whereupon such shares shall be, for all purposes, canceled and neither the Participant nor any transferee shall have any rights as one of the Company’s stockholders with respect to such shares for any purpose, including without limitation dividend and voting rights.  In addition to any other legal or equitable remedies which it may have, the Company may enforce its rights by actions for specific performance (to the extent permitted by law).

4.                 Restrictive Covenants.  In consideration for the grant of the Option and/or Restricted Shares, Participant agrees to the restrictive covenants set forth in this Section 4.  If the Participant violates any of the restrictive covenants described in this Section 4, then in addition to any other legal and equitable remedies (including injunctive relief) that may be available to the Company, this Award Agreement shall immediately terminate and the Company shall have the right to repurchase (for the stated par value per share) any of the Exercised Shares and any of the Restricted Shares whether or not such shares have vested.  The exercise of the Company’s right to repurchase shall be accomplished in the manner described in Section 4 of Part III of this Award Agreement.

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(a)            Confidentiality.  Participant agrees that s/he shall not, without the prior written consent of the Company, disclose or use in any way, either during employment by the Company or thereafter, except to perform services as an employee or director of the Company, any confidential business or technical information or trade secret acquired in the course of employment by the Company that is not in the public domain.  Participant covenants to use her or his best efforts to prevent the publication or disclosure of any trade secret or confidential information that is not in the public domain and that relates to the business or finances of the Company or the Company's affiliates, or any of its or their dealings, transactions or affairs which may come to her or his knowledge in the pursuance of her or his duties or employment.

(b)            Non-Solicitation.  While Participant is employed by the Company, and for a period of one year after employment with the Company ends for any reason, Participant shall not directly or indirectly solicit (other than on behalf of the Company) business or contracts for any products or services of the type provided, developed or under development by the Company during employment by the Company, from or with (i) any person or entity which was a customer of the Company for such products or services as of, or within 24 months prior to, the date of termination of employment with the Company, or (ii) any prospective customer which the Company was soliciting as of, or within 24 months prior to, termination.  Additionally, while Participant is employed by the Company, and for a period of one year after employment with the Company ends for any reason, Participant will not directly or indirectly contract with any such customer or prospective customer for any product or service of the type provided, developed or which was under development by the Company during employment with the Company.  Participant will not at any time knowingly interfere or attempt to interfere with any transaction, agreement or business relationship in which the Company was involved or was contemplating during Participant’s employment with the Company, including but not limited to relationships with investors, prospective investors, customers, prospective customers, agents, contractors, vendors, service providers and suppliers.

(d)            Non-Recruitment.  While Participant is employed by the Company, and for a period of one year after employment with the Company ends for any reason, Participant shall not, directly or indirectly, solicit, recruit or hire, or in any manner assist in the hiring, solicitation or recruitment, of any individual who is or was an employee of the Company, or who otherwise provided services to the Company, within 24 months prior to the termination of Participant’s employment with the Company.

5.                 Investment and Tax Representations.  The Participant represents, warrants and covenants as follows:

(a)            Participant has had such opportunity as s/he has deemed adequate to obtain from representatives of the Company such information as is necessary to permit her/him to evaluate the merits and risks of an investment in the Company.  The Participant acknowledges that certain of such information may be forward-looking and is therefore speculative and subject to known and unknown risks and uncertainties and other factors which may cause the actual performance of the Company to be materially and adversely different from any performance expressed or implied by such forward-looking statements.

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(b)            Participant has sufficient experience in business, financial and investment matters to be able to evaluate the risks involved in an investment in Common Stock and to make an informed investment decision with respect to such investment.

(c)            Participant can afford the complete loss of the value of the Exercised Shares and Restricted Shares and is able to bear the economic risk of holding such Exercised Shares and Restricted Shares for an indefinite period of time.

(d)            Participant understands that (i) the Federal income tax consequences to the Participant of the purchase and sale of the shares of Common Stock will vary depending upon (among other things) whether the Participant makes an election under Section 83(b) of the Internal Revenue Code of 1986, as amended (the “Code”), (ii) the Participant understands that the Company is not providing the Participant with any advice as to whether to make such election, (iii) the Participant has been advised to seek, and has sought, the counsel of her or his own tax advisor as to whether, where and how to make such election, (iv) such election, if made, must be filed with the Internal Revenue Service within 30 days of the date of this Award Agreement, and (v) the Participant must notify the Company upon making such election.  A sample election form is provided in Exhibit B.

6.                 Withholding Taxes.

(a)            The Participant acknowledges and agrees that the Company has the right to deduct from payments of any kind otherwise due to the Participant any federal, state or local taxes of any kind required by law to be withheld with respect to the exercise of the Option and the purchase of, and the vesting in, the Restricted Shares by the Participant.

(b)            If the Participant elects, in accordance with Section 83(b) of the Code to recognize ordinary income in the year of acquisition of the Restricted Shares, the Company will require at the time of such election an additional payment for withholding tax purposes based on the difference, if any, between the purchase price for such Restricted Shares and the fair market value of such Restricted Shares as of the date of the purchase of such Restricted Shares by the Participant.

7.                  No Rights to Business Relationship.  Nothing contained in this Award Agreement shall be construed as giving the Participant any right to continue his or her Business Relationship with the Company.

8.                 Waiver; Disposition of Stock.  From time to time the Company may waive its rights hereunder either generally or with respect to one or more specific transfers which have been proposed, attempted or made.  All action to be taken by the Company hereunder shall be taken by vote of a majority of its independent members of the Board of Directors then in office.  Any Exercised Shares or Restricted Shares which the Company has elected to purchase hereunder may be disposed of by the Board of Directors in such manner as it deems appropriate, with or without further restrictions upon the transfer thereof.

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9.                 Restrictive Legends.  All certificates representing Restricted Shares shall have affixed thereto legends in substantially the following form:

“The shares of stock represented by this certificate are subject to restrictions on transfer and an option to purchase set forth in a certain Award Agreement between the Corporation and the registered owner of this certificate (or such owner’s predecessor in interest), and such agreement is available for inspection without charge at the office of the Secretary of the Corporation.”

10.              Acknowledgments by Participant.  Participant acknowledges receipt of a copy of the Plan and further acknowledges that s/he has been advised, and that Participant understands, that:

(a)            the grant of the Option and Restricted Shares, and the issuance of any shares pursuant to this Award Agreement, may be subject to, or may become subject to, applicable reporting, disclosure and holding period restrictions imposed by Rule 144 under the Securities Act of 1933 and Section 16 of the Securities Exchange Act of 1934 (“Section 16”); and

(b)            shares acquired could be subject to Section 16(a) reporting requirements as well as the short swing trading prohibition contained in Section 16(b) which precludes any profit taking with respect to any stock transactions which occur within any six-month period.

11.              Successors and Assigns; Assignment.  This Award Agreement shall be binding upon the parties hereto and their heirs, representatives, successors and assigns.  The Company may assign its rights hereunder either generally or from time to time.

12.              Notices.  All notices to a party hereto shall be in writing and shall be deemed to have been adequately given if delivered in person or if given by registered or certified mail, postage prepaid at such address as either party may from time to time designate for itself by notice in writing given to the other party.

13.              Term and Termination.  This Award Agreement shall remain in effect until all repurchase rights contained in this Award Agreement have expired.

14.              Amendments.  This Award Agreement may be amended or modified in whole or in part only by an instrument in writing signed by the Company and the Participant.

15.              Applicable Law; Severability.  This Award Agreement shall be governed by and construed and enforced in accordance with Delaware law excluding its conflict of law provisions.  Wherever possible, each provision of this Award Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision hereof shall be prohibited by or invalid under any such law, that provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating or nullifying the remainder of that provision or any other provisions of this Award Agreement.

 

 

163DICON CORPORATION

2014 EQUITY INCENTIVE PLAN

	 

 

THIS 3DICON CORPORATION 2014
EQUITY INCENTIVE PLAN (the "Plan") is designed to retain directors, executives and selected employees
and consultants and reward them for making contributions to the success of the Company.  These objectives are accomplished
by making long-term incentive awards under the Plan thereby providing Participants with a proprietary interest in the growth and
performance of the Company.

 

	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

 

	 	(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)	"Code" - The Internal Revenue Code of 1986, as amended from time to time.

 

	 	(d)	"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 disinterested persons, as contemplated by Rule 16b-3 (" Rule 16b-3 ") promulgated under the Securities Exchange Act of 1934, as amended (the " Exchange Act ").

 

	 	(e)	"Company" -3DIcon Corporation and its subsidiaries including subsidiaries of subsidiaries.

 

	 	(f)	"Exchange Act" - The Securities Exchange Act of 1934, as amended from time to time.

 

	 	(g)	"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.

 

    	 

    	 

    

 

	
 

 

	 	(h)	"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 Committee may establish in order to fulfill the objectives of the Plan.

 

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

 

	 	(j)	"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 ."

 

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

 

	 	(l)	"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.

 

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

 

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

 

	 	(o)	"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.

 

	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.

 

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	 	(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 5(i) 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 FIFTY MILLION (50,000,000).  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.

 

	 	(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)	Application of Funds: The proceeds received by the Company from the sale of Stock pursuant to the exercise of Options or rights under Stock Purchase Agreements will be used for general corporate purposes.

 

	 	(e)	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.
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 Incentive Stock 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 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.

 

The exercise price of each Nonstatutory Stock Option shall be
determined at the discretion of the Board of Directors of the Corporation.

   

	 	(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.

 

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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 corporations
law of the State of Oklahoma as may be acceptable to the Board.

 

	 	(d)	Term and Exercise 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. During the lifetime of an Optionee,
the Option shall be exercisable only by the Optionee and shall not be assignable or transferable by the Optionee, and no other
person shall acquire any rights therein. 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.

 

	 	(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, within 90 days after such termination (or, in the event of " termination for good cause " as that term is defined in case law related thereto, or by the terms of the Plan or the Option Agreement or an employment agreement, 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 may specify such period for exercise, not less than 90 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 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 ninety (90) day period set forth in Section 5(e) shall be a period, as determined by the Board 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 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.

 

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

 

	 	(i)	Recapitalization:  Subject to any required action of shareholders, the number of shares of Stock covered by each outstanding Option, and the exercise price per share thereof set forth in each such Option, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Stock of the Company resulting from a stock split, stock dividend, combination, subdivision or reclassification of shares, or the payment of a stock dividend, or any other increase or decrease in the number of such shares affected without receipt of consideration by the Company; provided, however, the conversion of any convertible securities of the Company shall not be deemed to have been " effected without receipt of consideration " by the Company.

 

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In the event of a proposed dissolution
or liquidation of the Company, a merger or consolidation in which the Company is not the surviving entity, or a sale of all or
substantially all of the assets or capital stock of the Company (collectively, a " Reorganization "), unless otherwise
provided by the Board, this Option shall terminate immediately prior to such date as is determined by the Board, which date shall
be no later than the consummation of such Reorganization.  In such event, if the entity which shall be the surviving
entity does not tender to Optionee an offer, for which it has no obligation to do so, to substitute for any unexercised Option
a stock option or capital stock of such surviving entity, as applicable, which on an equitable basis shall provide the Optionee
with substantially the same economic benefit as such unexercised Option, then the Board may grant to such Optionee, in its sole
and absolute discretion and without obligation, the right for a period commencing thirty (30) days prior to and ending immediately
prior to the date determined by the Board pursuant hereto for termination of the Option or during the remaining term of the Option,
whichever is the lesser, to exercise any unexpired Option or Options without regard to the installment provisions of Paragraph
6(d) of the Plan; provided, that any such right granted shall be granted to all Optionees not receiving an offer to receive substitute
options on a consistent basis, and provided further, that any such exercise shall be subject to the consummation of such Reorganization.

 

Subject to any required action of shareholders,
if the Company shall be the surviving entity in any merger or consolidation, each outstanding Option thereafter shall pertain to
and apply to the securities to which a holder of shares of Stock equal to the shares subject to the Option would have been entitled
by reason of such merger or consolidation.

 

In the event of a change in the Stock of
the Company as presently constituted, which is limited to a change of all of its authorized shares without par value into the same
number of shares with a par value, the shares resulting from any such change shall be deemed to be the Stock within the meaning
of the Plan.

 

To the extent that the foregoing adjustments
relate to stock or securities of the Company, such adjustments shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. Except as expressly provided in this Section 5(i), the Optionee shall have no rights by
reason of any subdivision or consolidation of shares of stock of any class or the payment of any stock dividend or any other increase
or decrease in the number of shares of stock of any class, and the number or price of shares of Stock subject to any Option shall
not be affected by, and no adjustment shall be made by reason of, any dissolution, liquidation, merger, consolidation or sale of
assets or capital stock, or any issue by the Company of shares of stock of any class or securities convertible into shares of stock
of any class.

 

The Grant of an Option pursuant to the
Plan shall not affect in any way the right or power of the Company to make any adjustments, reclassifications, reorganizations
or changes in its capital or business structure or to merge, consolidate, dissolve, or liquidate or to sell or transfer all or
any part of its business or assets.

 

	 	(j)	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 5(i) hereof.

 

	 	(k)	Modification, Acceleration, Extension, and Renewal of Options:  Subject to the terms and conditions and within the limitations of the Plan, the Board 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(k), 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.

 

	 	(l)	Exercise Before Exercise Date:  At the discretion of the Board, 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(n) hereof prior to the exercise date stated in the Option and such other restrictions and conditions as the Board or Committee may deem advisable.

  

	 	(m)	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, Oklahoma 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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	 	(n)	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 equal to: (A) the fair value of such shares as of such date of termination; or (B) if such repurchase right lapses at 20% of the number of shares per year, the original purchase price of such shares, and upon terms of payment permissible under the applicable state securities laws; provided that in the case of Options or Stock Awards granted to officers, directors, consultants or affiliates of the Company, such repurchase provisions may be subject to additional or greater restrictions as 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 Awards may be based on Fair Market Value or other specified valuation.

 

	 	(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.

 

	 	(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.

  

	 	(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 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 or any other benefit under the Plan 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:

 

	 	(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.

 

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	 	(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, 50% of the vesting restrictions applicable to each Participant’s Grant(s) shall terminate fully and the Participant shall immediately have the right to the delivery of share certificates or exercise of Options, i.e. to the extent that a Participant’s Option(s) are unvested, 50% of such unvested portion shall vest.

 

	8. 	Investment Intent.  All Grants under the Plan are intended to be exempt from registration under the Securities Act provided by Rule 701 thereunder. 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 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.

 

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 determinations
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.

 

	10.	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.

 

	11.	Availability of Information. During the term of the Plan and any additional period during which a Grant granted pursuant to the Plan shall be exercisable, the Company shall make available, not later than one hundred and twenty (120) days following the close of each of its fiscal years, such financial and other information regarding the Company as is required by the bylaws of the Company and applicable law to be furnished in an annual report to the shareholders of the Company.

 

	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.

 

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	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 Oklahoma and construed accordingly.

 

	15.	Termination Dates. The Plan shall terminate ten years later, subject to earlier termination by the Board pursuant to Section 9.

 

The foregoing 3DIcon Corporation 2014 Equity Incentive Plan
(consisting of 9 pages, including this page) was duly adopted and approved by the Board of Directors on March 12, 2014.

 

	 	3DICON CORPORATION	 
	 	 	 
	 	By: 	/s/ Victor F. Keen	 
	 	Name:	
         Victor F. Keen

        
	 
	 	Title: 	Chief Executive Officer	 

 

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