Exhibit 3.1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
Current Report
Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 30, 2015
ORIGINCLEAR, INC.
(Name of registrant as specified in its charter)
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Nevada (State or other jurisdiction of Incorporation or organization)
5645 West Adams Boulevard Los Angeles, California (Address of principal executive offices) |
333-147980
(Commission File Number) |
26-0287664 (I.R.S. Employer Identification Number)
90016 (Zip Code) |
Registrant’s telephone number, including area code: (323) 939-6645
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.01 Completion of Acquisition or Disposition of Assets.
On October 1, 2015, OriginClear, Inc., a Nevada corporation (the “Company”), closed the transactions contemplated by the Share Exchange Agreement (the “Agreement”) with Progressive Water Treatment, Inc., a Texas corporation (“PWT”) and Marc Stevens, PWT’s sole shareholder (“Stevens”), dated July 31, 2015 (the “Agreement”).
The Company acquired PWT from Stevens through the transfer of all issued and outstanding shares of PWT in exchange (the “Exchange”) for 10,000 shares of a new series of preferred stock, the Series B Preferred Stock, filed with the State of Nevada by the Company on October 1, 2015, using a Certificate of Designation a copy of which is attached as Exhibit 3.3.
Each share of Series B Preferred Stock has a stated value of $150 per share and is convertible into shares of the Company’s common stock at a conversion price of $0.03 per share, which may be converted to the Company’s common stock in three annual increments beginning 12 months from closing. The conversion price is subject to adjustment in the case of reverse splits, stock dividends, reclassifications and the like. In addition, the conversion price is subject to certain full ratchet anti-dilution protection. The Series B Preferred Stock is entitled to vote with holders of the Company’s common stock on all corporate actions, including the election of the Company’s directors. The holders of the Series B Preferred Stock are entitled to cast one vote for each share of Series B Preferred Stock owned. This brief description of the Certificate of Designation is only a summary of the material terms and is qualified in its entirety by reference to the full text of the form of the Certificate of Designation as attached to this Current Report on Form 8-K as Exhibit 3.3.
The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Agreement, which was attached as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with he SEC on August 4, 2015 and is incorporated herein by reference, and the exhibits thereto. The Agreement has been included to provide investors and stockholders with information regarding its terms. It is not intended to provide any other factual information about the Company. The Agreement contains representations and warranties that the parties to the Agreement made to and solely for the benefit of each other, and the assertions embodied in such representations and warranties are qualified by information contained in confidential disclosure schedules that the parties exchanged in connection with signing the Agreement. Accordingly, investors and stockholders should not rely on such representations and warranties as characterizations of the actual state of facts or circumstances, since they were only made as of the date of the Agreement (or such other date as specified therein).
Item 3.02 Unregistered Sales of Equity Securities.
Series A Share Issuance
On October 1, 2015, the Company issued 1,000 shares of New Series A Preferred Stock (as defined below) to the Company’s Chief Executive Officer and Director, T. Riggs Eckelberry.
The terms of the New Series A Preferred Stock are discussed more fully in Item 3.03 of this filing.
Series B Share Issuance
On October 1, 2015, the Company issued 10,000 shares of Series B Preferred Stock as described in Item 2.01.
Consultant Issuance
On September 30, 2015, the Company issued 1,400,000 shares of its common stock in lieu of cash consideration.
The securities above were offered and sold pursuant to an exemption from the registration requirements under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and Rule 506 of Regulation D promulgated thereunder since, among other things, the transactions did not involve a public offering and the securities were acquired for investment purposes only and not with a view to or for sale in connection with any distribution thereof.
Item 3.03 Material Modification to Rights of Security Holders.
On October 1, 2015, the Company filed a Certificate of Designation for its Series A Preferred Stock with the Secretary of State of Nevada designating 1,000 shares of its authorized preferred stock as Series A Preferred Stock (the “New Series A Preferred Stock”). The shares of New Series A Preferred Stock have a par value of $0.0001 per share. The New Series A Preferred Shares do not have a dividend rate or liquidation preference and are not convertible into shares of common stock.
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For so long as any shares of the New Series A Preferred Stock remain issued and outstanding, the holders thereof, voting separately as a class, shall have the right to vote on all shareholder matters equal to 51% of the total vote (representing a super majority voting power) on all matters related to equity incentive plans of the Company, including, among other things, adoption, amendment, cancellation of any equity incentive plans of the Company. Such vote shall be determined by the holder(s) of a majority of the then issued and outstanding shares of New Series A Preferred Stock. For example, if there are 10,000 shares of the Company’s common stock issued and outstanding at the time of a shareholder vote, the holders of the New Series A Preferred Stock, voting separately as a class, will have the right to vote an aggregate of 10,400 shares, out of a total number of 20,400 shares voting.
The shares of the New Series A Preferred Stock shall be automatically redeemed by the Company at their par value on the first to occur of the following triggering events: (i) on the date that Mr. Eckelberry ceases, for any reason, to serve as officer, director or consultant of the Company, or (ii) on the date that the Company’s shares of common stock first trade on any national securities exchange provided that the listing rules of any such exchange prohibit preferential voting rights of a class of securities of the Company, or listing on any such national securities exchange is conditioned upon the elimination of the preferential voting rights of the New Series A Preferred Stock set forth in the Certificate of Designation.
Additionally, the Company is prohibited from adopting any amendments to the Company’s Bylaws, Articles of Incorporation, as amended, making any changes to the Certificate of Designation establishing the New Series A Preferred Stock, or effecting any reclassification of the New Series A Preferred Stock, without the affirmative vote of at least 66-2/3% of the outstanding shares of New Series A Preferred Stock. However, the Company may, by any means authorized by law and without any vote of the holders of shares of New Series A Preferred Stock, make technical, corrective, administrative or similar changes to such Certificate of Designation that do not, individually or in the aggregate, adversely affect the rights or preferences of the holders of shares of New Series A Preferred Stock.
The adoption of the New Series A Preferred Stock and its issuance to Mr. Eckelberry was taken to allow the Company to approve, among other things, a new equity incentive plan described in Item 5.07 below. This brief description of the Certificate of Designation is only a summary of the material terms and is qualified in its entirety by reference to the full text of the form of the Certificate of Designation as attached to this Current Report on Form 8-K as Exhibit 3.2.
Item 5.01 Changes in Control of Registrant.
On October 1, 2015, the Company issued 1,000 shares of New Series A Preferred Stock to the Company’s Chief Executive Officer and Director, T. Riggs Eckelberry. As a result of the super majority voting power of the New Series A Preferred Stock described above, Mr. Eckelberry will have the power to control the voting of shares of common stock of the Company and as such on such date, a change in control will occur.
On October 1, 2015, Mr. Eckelberry beneficially owned 33,957 shares of the Company's common stock (representing less than 1% of the outstanding common stock, as of October 1, 2015). Such shares do not include 40,000,000 shares of common stock subject to a restricted stock award grant made to Mr. Eckelberry on November 13, 2014. Upon the issuance of the 1,000 shares of the Company’s New Series A Preferred Stock and assuming the effectiveness of the super majority voting power, Mr. Eckelberry would have the voting equivalent of 202,778,212 shares of common stock or approximately 51% of the Company's voting stock.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
Withdrawal of Old Series A Preferred Stock
As previously reported, on April 16, 2015, the Company amended its Articles of Incorporation for the creation of its Series A Preferred Stock (“Old Series A Preferred Stock”) which provided supermajority voting rights to the holders of Old Series A Preferred Stock to change the name of the Company. On September 30, 2015, the Company filed a Certificate of Withdrawal of the Certificate of Designation for its Old Series A Preferred Stock with the Secretary of State of Nevada following the prior redemption of all issued and outstanding shares in that series of preferred stock. The Certificate of Withdrawal in its entirety is attached to this Current Report on Form 8-K as Exhibit 3.1.
Adoption of New Series A Preferred Stock
On October 1, 2015, the Company filed a Certificate of Designation for its New Series A Preferred Stock with the Secretary of State of Nevada designating 1,000 shares of its authorized preferred stock as New Series A Preferred Stock. The rights and privileges of the New Series A Preferred Stock are discussed more fully in Item 3.03 above and incorporated herein by reference, and the full text of the form of the Certificate of Designation is attached to this Current Report on Form 8-K as Exhibit 3.2.
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Adoption of Series B Preferred Stock
On October 1, 2015, the Company filed a Certificate of Designation for its Series B Preferred Stock. The rights and privileges of the Series B Preferred Stock are discussed more fully in Item 2.01 above and incorporated herein by reference, and the full text of the form of the Certificate of Designation is attached to this Current Report on Form 8-K as Exhibit 3.3.
Item 5.07 Submission of Matters to a Vote of Security Holders.
On September 30, 2015, the Board of Directors of the Company submitted to certain stockholders of the Company for approval, acting by written consent in lieu of a meeting, to approve the adoption of a new equity incentive plan (the “Plan”) and reservation of 8,000,000 shares of common stock under the Plan. Subsequently, on October 2, 2015, the Board of Directors of the Company submitted to certain stockholders of the Company for approval, acting by written consent in lieu of a meeting, to approve an amendment of the Plan by increasing the number of shares of common stock reserved under the Plan to 160,000,000. By written consent delivered to the Company on or before October 2, 2015, the holders of 51% of the Company’s outstanding shares of Common Stock as of October 2, 2015 approved the corporate actions described in this Item 5.07. A copy of the Plan, as amended, is attached hereto as Exhibit 10.1.
Item 7.01 Regulation FD Disclosure
On October 1, 2015, the Company issued a press release regarding the closing of the Agreement. A copy of the Company’s press release is attached hereto as Exhibit 99.1.
The information in this Current Report on Form 8-K furnished pursuant to Items 7.01 and 9.01 shall not be deemed “filed” for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that Section. This information shall not be incorporated by reference into any registration statement pursuant to the Securities Act.
Item 9.01 Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
The financial statements required by this Item will be filed by amendment to this Current Report on Form 8-K or included within Item 5 of our Form 10-Q for the quarter ended September 30, 2015, not later than 71 calendar days following the date that this Report is required to be filed.
(b) Pro forma financial information.
The pro forma financial information required by this Item will be filed by amendment to this Current Report on Form 8-K or included within Item 5 of our Form 10-Q for the quarter ended September 30, 2015, not later than 71 calendar days following the date that this Report is required to be filed.
(d) Exhibits.
| 3.1 | Certificate of Withdrawal of Certificate of Designation of Series A Preferred Stock of OriginClear, Inc. filed with the Secretary of State of Nevada on September 30, 2015 |
| 3.2 | Series A Certificate of Designation of OriginClear, Inc. filed with the Secretary of State of Nevada on October 1, 2015 |
| 3.3 | Series B Certificate of Designation of OriginOil, Inc. filed with the Secretary of State of Nevada on October 1, 2015 |
| 10.1 | OriginClear, Inc. 2015 Equity Incentive Plan |
| 99.1 | Press Release, dated October 1, 2015 |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ORIGINCLEAR, INC. | ||
| October 6, 2015 | By: | /s/ T. Riggs Eckelberry |
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Name: T. Riggs Eckelberry
Title: Chief Executive Officer |
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Exhibit 3.1
Exhibit 3.2
CERTIFICATE OF DESIGNATION OF
ORIGINCLEAR, INC.
ESTABLISHING THE DESIGNATIONS, PREFERENCES, LIMITATIONS AND RELATIVE RIGHTS OF ITS SERIES A PREFERRED STOCK
On behalf ofOriginClear, Inc., a Nevada corporation (the "Corporation"), the undersigned hereby certifies that the following resolution has been duly adopted by the board of directors of the Corporation (the "Board"):
RESOLVED, that, pursuant to the authority granted to and vested in the Board by the provisions of the articles of incorporation of the Corporation (the "Articles of Incorporation") and the provisions of Section 78.1955 of the Nevada General Corporation Law, there hereby is created, out of the twenty five million (25,000,000) shares of preferred stock, par value $0.0001 per share, of the Company authorized by the Articles oflncorporation, Series A Preferred Stock, consisting of one thousand (1,000) shares, which series shall have the following powers, designations, preferences and relative participating, optional and other special rights, and the following qualifications, limitations and restrictions:
S ECTION 1. DESIGNATION OF SERIES. The shares of such series shall be designated as the "Series A Preferred Stock" (the "Series A Preferred Stock") and the number of shares initially constituting such series shall be up to One Thousand (1,000) shares.
SECTION 2. DIVIDENDS. The holders of the Series A Preferred Stock shall not be entitled to receive dividends paid on the Common Stock.
SECTION 3. LIQUIDATION PREFERENCE. The holders of the Series A Preferred Stock shall not be entitled to any liquidation preference.
SECTION 4. VOTING.
4.1 Voting Rights. The holders of the Series A Preferred Stock will have the shareholder voting rights as described in this Section 4 or as required by law. For so long as any shares of the Series A Preferred Stock remain issued and outstanding, the holders thereof, voting separately as a class, shall have the right to vote in an amount equal to fifty-one percent (51%) of the total vote on all matters related to equity incentive plans of the Company, including, among other things, adoption, amendment, cancellation of any equity incentive plans of the Company. Such vote shall be determined by the holder(s) of a majority of the then issued and outstanding shares of Series A Preferred Stock.
For example, ifthere are 10,000 shares of the Company's common stock issued and outstanding at the time of such a shareholder vote, the holders of the Series A Preferred Stock, voting separately as a class, will have the right to vote an aggregate of 10,408 shares, out of a total number of 20,408 shares voting.
4.2 Amendments to Articles and Bylaws. So long as the Series A Preferred Stock is outstanding, the Company shall not, without the affirmative vote of the holders of at least 66-2/3% of all outstanding shares of Series A Preferred Stock, voting separately as a class (i) amend, alter or repeal any provision of the Articles of Incorporation or the Bylaws of the Company so as to adversely affect the designations, preferences, limitations and relative rights of the Series A Preferred Stock, (ii) effect any reclassification of the Series A Preferred Stock, excluding a reverse stock split or forward split, or (iii) designate any additional series of preferred stock, the designation of which adversely effects the rights, privileges, preferences or limitations of the Series A Preferred Stock set forth herein.
4.3 Amendment of Rights of Series A Preferred Stock. The Company shall not, without the affirmative vote ofthe holders of at least 66-2/3% of all outstanding shares of the Series A Preferred Stock, amend, alter or repeal any provision of this Certificate ofDesignation, PROVIDED, HOWEVER, that the Company may, by any means authorized by law and without any vote of the holders of shares of the Series A Preferred Stock, make technical, corrective, administrative or similar changes in this Certificate of Designation that do not, individually or in the aggregate, adversely affect the rights or preferences of the holders of shares of the Series A Preferred Stock.
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SECTION 5. CONVERSION RIGHTS. The shares of the Series A Preferred Stock shall have no conversion rights.
SECTION 6. REDEMPTION RIGHTS. The shares of the Series A Preferred Stock shall be automatically, and without any required action by the Company or the holders thereof, redeemed by the Company at their par value on the first to occur of the following triggering events: (i) on the date that T. Riggs Eckelberry ceases, for any reason, to serve as officer, director or consultant of the Company, it being understood that if Mr. Eckelberry continues without interruption to serve thereafter in one or more capacities as officer, director or consultant of the Company this shall not be considered a cessation of service, or (ii) on the date that the Company's shares of common stock first trade on any national securities exchange PROVIDED, HOWEVER that (a) the listing rules of any such exchange prohibit preferential voting rights of a class of securities of the Company, or (b) listing on any such national securities exchange is conditioned upon the elimination of the preferential voting rights of the Series A Preferred Stock set forth in this Certificate of Designation.
SECTION 7. NOTICES. Any notice required hereby to be given to the holders of shares ofthe Series A Preferred Stock shall be deemed given if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Company.
SECTION 8. MISCELLANEOUS.
(a) The headings of the various sections and subsections of this Certificate of Designation are for convenience of reference only and shall not affect the interpretation of any of the provisions of this Certificate of Designation.
(b) Whenever possible, each provision of this Certificate of Designation shall be interpreted in a manner as to be effective and valid under applicable law and public policy. If any provision set forth herein is held to be invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating or otherwise adversely affecting the remaining provisions of this Certificate of Designation. No provision herein set forth shall be deemed dependent upon any other provision unless so expressed herein. If a court of competent jurisdiction should determine that a provision of this Certificate of Designation would be valid or enforceable if a period of time were extended or shortened, then such court may make such change as shall be necessary to render the provision in question effective and valid under applicable law.
(c) Except as may otherwise be required by law, the shares of the Series A Preferred Stock shall not have any powers, designations, preferences or other special rights, other than those specifically set forth in this Certificate of Designation.
IN WITNESS WHEREOF, this Certificate of Designations has been executed by a duly authorized officer of the Company on this 29 day of September 2015.
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ORlGINCLEAR, INC.
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Exhibit 3.3
CERTIFICATE OF DESIGNATION OF
ORIGINCLEAR, INC.
1. The name of the corporation is OriginClear, Inc. (the "Corporation").
2. By resolution of the board of directors pursuant to a provision in the articles of incorporation this certificate establishes the following regarding the voting powers, designations, preferences, limitations, restrictions and relative rights of the following class or series of stock.
Section 1. Series B Preferred Stock. This series of the Corporation's Preferred Stock shall be designated "Series B Preferred Stock". The number of shares constituting the Series B Preferred Stock shall be Ten Thousand ( 1 0,000) shares. The total face value of this entire series is One Million Five Hundred Thousand Dollars ($1.500,000) . Each share of Series B Preferred Stock shall have a stated face value of One Hundred Fifty Dollars ($150) ("Stated Value") . The Stated Value for each share of Series B Preferred Stock is convertible into shares of Common Stock of the Corporation at a conversion price of Three Cents ($0.03) per share ("Conversion Price"), as adjusted in accordance with Section 3 below. The Series B Preferred Stock shall have the rights, preferences and privileges set forth below:
Section 2. Liquidation Preference. In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, the holder of each outstanding share of the Series B Preferred Stock shall be entitled to receive, out of the assets of the Corporation available for distribution to its shareholders upon such liquidation, whether such assets are capital or surplus of any nature, an amount equal to One Hundred Fifty Dollars ($150.00) for each such share of the Series B Preferred Stock (as adjusted for any combinations, consolidations, stock distributions or stock dividends with respect to such shares), plus all dividends, if any, declared and unpaid thereon as of the date of such distribution, before any payment shall be made or any assets distributed to the holders of the Common Stock.
| (a) | If the assets to be distributed pursuant to Section 2 above to the holders of the Series B Preferred Stock shall be insufficient to permit the receipt by such holders of the full preferential amounts aforesaid, then all of such assets shall be distributed among such holders of Series B Preferred Stock ratably in accordance with the number of such shares then held by each such holder. |
| (b) | The sale of all or substantially all of the Corporation's assets, any consolidation or merger of the Corporation with or into any other corporation or other entity or person, or any other corporate reorganization, in which the stockholders of the Corporation immediately prior to such consolidation, merger or reorganization, own less than fifty percent (50%) of the Corporation's voting power immediately after such consolidation, merger or reorganization, or any transaction or series of related transactions to which the Corporation is a party in which in excess of fifty percent (50%) of the Corporation's voting power is transferred, excluding any consolidation or merger effected exclusively to change the domicile of the Corporation, shall be deemed to be a liquidation, dissolution or winding up within the meaning of this Section 2. |
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Section 3. Conversion. The Series B Preferred Stock shall be subject to conversion into Common Stock upon the following terms and conditions:
| (a) | Timing of Conversion. |
| (i) | Conversion by the Holder. The shares of Series B Preferred Stock held by any holder may be converted in Common Stock as set forth herein, at the option of the holder according to the following schedule ("Conversion Schedule"): one-third (113) of the shares received by the holder may be converted beginning one (1) year after the first date on which a share of Series B Preferred Stock was issued (the "Original Issue Date"); one-third (1/3) of such shares may be converted beginning two (2) years after the Original Issue Date; and the remaining one-third (113) of such shares may be converted beginning three years after the Original Issue Date. Notwithstanding the foregoing schedule, holders of Series B Preferred Stock may convert their shares into Common Stock effective immediately prior to the sale of all or substantially all of the Corporation's assets. |
| (ii) | Conversion at the Option of the Corporation. Prior to any event described in Section 2(b), above, the Corporation may, at its sole option, by written notice given to the holders of the Series B Preferred Stock, cause to have such holder's shares of Series B Preferred Stock converted into Common Stock, with such conversion being deemed to have occurred immediately prior to the closing of such event. |
| (iii) | Modification of Conversion Schedule. If, within three (3) years after the Original Issue Date, the holder voluntarily resigns his employment with the Corporation, or is terminated for Cause, as defined in any written agreement between the holder and the Corporation, the Corporation may, at its sole option, change the Conversion Schedule to the following: one-fifth (115) of the shares received by the holder may be converted beginning one (1) year after the first date on which a share of Series B Preferred Stock was issued (the "Original Issue Date"); one-fifth (115) of such shares may be converted beginning two (2) years after the Original Issue Date; one-fifth(115) of such shares may be converted beginning three (3) years after the Original Issue Date; one-fifth (115) of such shares may be converted beginning four ( 4) years after the Original Issue Date; and the remaining one-fifth (115) of such shares may be converted beginning five (5) years after the Original Issue Date. |
| (b) | Mechanics of Conversion. |
| (i) | Voluntary Conversion. As a condition to any conversion of shares of the Series B Preferred Stock pursuant to Section 3(a)(i) above, the holder of the shares to be converted shall surrender the certificate or certificates therefor, duly endorsed, at the principal office of the Corporation or of any transfer agent for such stock, and shall deliver a written notice to the Secretary of the Corporation at the Corporation's principal office stating the number of such shares of the Series B Preferred Stock to be converted (the "Conversion Notice"). Promptly thereafter, the Corporation shall issue and deliver to such holder a certificate for the number of shares of the Common Stock to which such holder shall be thereby entitled. In addition, if less than all the shares represented by such certificate(s) are surrendered for conversion, the Corporation shall issue and deliver to such holder a new certificate for the balance of the close of business on the later of the date on which a proper notice is received by the Secretary of the Corporation or the date the duly endorsed certificate(s) is (are) received by the Corporation or the transfer agent, and the person or persons entitled. to receive the shares of the Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares on such effective date. |
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| (ii) | Conversion at the Option of the Corporation. In the case of conversion pursuant to Section 3(a)(ii) above, every outstanding share of the Series B Preferred Stock shall be converted automatically without any further action by the holder of such share and whether or not the certificate representing such share shall be surrendered to the Corporation or the transfer agent for such stock; provided, however, that the Corporation shall not be obligated to issue a certificate evidencing the shares of the Common Stock issuable upon such conversion unless the certificate evidencing such share of the Series B Preferred Stock shall be surrendered at the principal office of the Corporation or at the principal office of such transfer agent. Upon such surrender, the Corporation shall promptly issue and deliver to such holder a certificate for the number of shares of the Common Stock to which such holder shall be thereby entitled. The effective date of such conversion shall be the close of business on the date of the occurrence of the event described in Section 3(a)(ii) above. The person or persons entitled to receive the shares of the Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares on such effective date. |
| (c) | Adjustment to Conversion Price. If, on the date of any Conversion Notice, the Market Price of the Corporation's Common Stock, defined below, is less than the Conversion Price, then the Conversion Price shall be adjusted to the lower Market Price, for that conversion. The number of shares of Common Stock issuable for each share of converted Series B Preferred Stock shall be calculated by dividing the Stated Value by the Market Price. For the purposes of this paragraph, the Market Price shall be defined as the average of the closing trade prices of the twenty-five (25) days prior to the date of the Conversion Notice. |
| (d) | Adjustments to Conversion Price for Stock Dividends, Consolidations and Subdivisions. In case the Corporation at any time after the first issuance of a share of the Series B Preferred Stock shall declare or pay on the Common Stock any dividend in shares of Common Stock, or effect a subdivision of the outstanding shares of the Common Stock into a greater number of shares of the Common Stock (by reclassification or otherwise than by payment of a dividend payable in shares of the Common Stock), or shall combine or consolidate the outstanding shares of the Common Stock into a lesser number of shares of the Common Stock (by reclassification or otherwise), then, and in each such case, the Conversion Price (as previously adjusted) in effect immediately prior to such declaration, payment, subdivision, combination or consolidation shall, concurrently with the effectiveness of such declaration, payment, subdivision, combination or consolidation, be proportionately adjusted. | |
| (e) | Adjustments for Reclassifications and Certain Reorganizations. In case the Corporation at any time after the first issuance of a share of the Series B Preferred Stock shall reclassify or otherwise change the outstanding shares of the Common Stock, whether by capital reorganization, reclassification or otherwise, or shall consolidate with or merge with or into any other corporation where the Corporation is not the surviving corporation but not otherwise, then, and in each such case, each outstanding share of the Series B Preferred Stock shall, immediately after the effectiveness of such reclassification, other change, consolidation or merger, be convertible into the type and amount of stock and other securities or property which the holder of that number of shares of the Common Stock into which such share of the Series B Preferred Stock would have been convertible pursuant to Section 3(c) above immediately before the effectiveness of such reclassification, other change, consolidation or merger would be entitled to receive in respect of such shares of the Common Stock as the result of such reclassification, other change, consolidation or merger. | |
| (f) | Fractional Shares. No fractional shares of the Common Stock shall be issuable upon the conversion of shares of the Series B Preferred Stock and the Corporation shall pay the cash equivalent of any fractional share upon such conversion. |
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Section 4. Notices. Any notice required by the provisions of this Certificate of Designation to be given to holders of shares of the Series B Preferred Stock shall be deemed given three days following the date on which mailed by certified mail, return receipt requested, postage prepaid, addressed to such holder at the address last appearing on the books of the Corporation for such holder or given by such holder to the Corporation for the purpose of notice, or if no such address appears or is so given, at the principal office of the Corporation, or upon personal delivery to the aforementioned address.
Section 5. Voting Rights. Subject to Section 7 below, the holders of the Series B Preferred Stock shall be entitled to vote with holders of Common Stock on all corporate actions, including the election of the Corporation's directors. The holders of the Series B Preferred Stock shall be entitled to cast one vote for each share of Series B Preferred Stock owned by the holder.
Section 6. Protective Provisions . So long as any shares of the Series B Preferred Stock shall remain outstanding, the Corporation shall not, without first obtaining the approval (by vote or written consent, as provided by law) of the holders of at least a majority of the then outstanding shares of Series B Preferred Stock voting together as a class:
| (a) | alter or change the rights, preferences or privileges of the shares of the Series B Preferred Stock so as to affect materially and adversely such shares; or |
| (b) | create any new class of shares having preference over the Series B Preferred Stock. |
Section 7. Status of Converted Stock. In the event any shares of the Series B Preferred Stock shall be converted pursuant to Section 3 above, the shares so converted shall be cancelled and shall revert to the Corporation's authorized but unissued Preferred Stock.
Section 8. Transferability. The Series B Preferred Stock shall not be transferable, except provided that in the event of the death of a holder of shares of the Series B Preferred Stock, to the heirs or estate of such person.
Section 9. Redemption.
(a) If, within three (3) years after the Original Issue Date, the holder voluntarily resigns his employment with the Corporation, or is terminated for Cause, as defined in any written agreement between the holder and the Corporation, the Corporation may, at its sole option, within ninety (90) days after such termination, redeem such holder's Series B Preferred Stock.
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(b) The Corporation shall effect any such redemption by paying in cash in exchange for the shares of Series B Preferred to be redeemed a sum equal to One Hundred Fifty ($150) per share (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like) plus accrued and unpaid dividends with respect to such shares. The total amount to be paid for the Series B Preferred is hereinafter referred to as the "Redemption Price", and the date of such payment is hereinafter referred to as the "Redemption Date." At least thirty (30) days but no more than sixty (60) days prior to a Redemption Date, the Corporation shall send a notice (a "Redemption Notice") to all holder(s) of Series B Preferred to be redeemed setting forth (A) the Redemption Price for the shares to be redeemed; and (B) the place at which such holders may obtain payment of the Redemption Price upon surrender of their share certificates. If the Corporation does not have sufficient funds legally available to redeem all shares to be redeemed at the Redemption Date, then it shall redeem such shares pro rata (based on the portion of the aggregate Redemption Price payable to them) to the extent possible and shall redeem the remaining shares to be redeemed as soon as sufficient funds are legally available.
(d) On or after a Redemption Date, each holder of shares of Series B Preferred to be redeemed shall surrender such holder's certificates representing such shares to the Corporation in the manner and at the place designated in the Redemption Notice, and thereupon the Redemption Price of such shares shall be payable to the order of the person whose name appears on such certificate or certificates as the owner thereof and each surrendered certificate shall be canceled. In the event less than all the shares represented by such certificates are redeemed, a new certificate shall be issued representing the unredeemed shares. From and after such Redemption Date, unless there shall have been a default in payment of the Redemption Price or the Corporation is unable to pay the Redemption Price due to not having sufficient legally available funds, all rights of the holder of such shares as holder of Series B Preferred (except the right to receive the Redemption Price without interest upon surrender of their certificates), shall cease and terminate with respect to such shares; provided that in the event that shares of Series B Preferred are not redeemed due to a default in payment by the Corporation or because the Corporation does not have sufficient legally available funds, such shares of Series B Preferred shall remain outstanding and shall be entitled to all of the rights and preferences provided herein.
(e) The conversion rights (as set forth in Section 3) for such Series B Preferred shall terminate at the close of business on the fifth (5th) day preceding the Redemption Date, unless default is made in payment of the Redemption Price.
| 3. | Effective date of filing: Immediate. |
| 4. | Signature: |
| By: |
|
| T. Riggs Eckelberry, President |
Exhibit 10.1
OriginClear, Inc.
2015 Equity Incentive Plan
This OriginClear, Inc. 2015 Equity Incentive Plan (the " Plan ") is intended as an incentive, to retain in the employ of and as directors, officers, consultants, advisors and employees to OriginClear, Inc. a Nevada corporation, and its subsidiaries, directly owned or otherwise (the “Company”), persons of training, experience and ability, to attract new directors, officers, consultants, advisors and employees whose services are considered valuable, to encourage the sense of proprietorship and to stimulate the active interest of such persons in the development and financial success of the Company.
It is further intended that certain options granted pursuant to the Plan shall constitute incentive stock options (the “ Incentive Stock Options ”) within the meaning of Section 422 of the United States Internal Revenue Code of 1986, as amended (the “ Code ”) while certain other options granted pursuant to the Plan shall be nonqualified stock options (the “ Nonstatutory Options ”).
The Company intends that the Plan meet the requirements of Rule 16b-3 (“ Rule 16b-3 ”) promulgated under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), and that transactions of the type specified in subparagraphs (c) to (f) inclusive of Rule 16b-3 by officers and directors of the Company pursuant to the Plan will be exempt from the operation of Section 16(b) of the Exchange Act. Further, the Plan is intended to satisfy the performance-based compensation exception to the limitation on the Company’s tax deductions imposed by Section 162(m) of the Code with respect to those Options for which qualification for such exception is intended. In all cases, the terms, provisions, conditions and limitations of the Plan shall be construed and interpreted consistent with the Company’s intent as stated in these recitals.
| 1. |
Definitions.
|
| (a) | " Board " - The Board of Directors of the Company. |
| (b) | " Change in Control " - Means, and shall be deemed to have occurred upon the occurrence of, any one of the following events: |
| (i) | The acquisition in one transaction by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of beneficial ownership (within the meaning of Rule l3d-3 promulgated under the Exchange Act) of shares or other securities (as defined in Section 3(a)(10) of the Exchange Act) representing 51% or more of outstanding Stock of the Company; provided, however, that a Change in Control as defined in this clause (1) shall not be deemed to occur in connection with any acquisition by the Company, an employee benefit plan of the Company or any Person who immediately prior to the effective date of this Plan is a holder of Stock (a "Current Stockholder") so long as such acquisition does not result in any Person other than the Company, such employee benefit plan or such Current Stockholder beneficially owning shares or securities representing 51% or more of the outstanding; or |
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| (ii) | Any election has occurred of persons as directors of the Company that causes two-thirds or more of the Board to consist of persons other than (i) persons who, were members of the Board on the effective date of this Plan and (ii) persons who were nominated by the Board for election as members of the Board at a time when at least two-thirds of the Board consisted of persons who were members of the Board on the effective date of this Plan; provided, however, that any person nominated for election by the Board when at least two-thirds of the members of the Board are persons described in subclause (i) or (ii) and persons who were themselves previously nominated in accordance with this clause (2) shall, for this purpose, be deemed to have been nominated by a Board composed of persons described in subclause (ii); or |
| (iii) | Approval by the stockholders of the Company of a reorganization, merger, consolidation or similar transaction (a "Reorganization Transaction"), in each case, unless, immediately following such Reorganization Transaction, more than 50% of, respectively, the outstanding shares of common stock (or similar equity security) of the corporation or other entity resulting from or surviving such Reorganization Transaction and the combined voting power of the securities of such corporation or other entity entitled to vote generally in the election of directors, is then beneficially owned, directly or indirectly, by the individuals and entities who were the respective beneficial owners of the outstanding Stock immediately prior to such Reorganization Transaction in substantially the same proportions as their ownership of the outstanding Stock immediately prior to such Reorganization Transaction; or |
| (iv) | Approval by the stockholders of the Company of (i) a complete liquidation or dissolution of the Company or (ii) the sale or other disposition of all or substantially all of the assets of the Company to a corporation or other entity, unless, with respect to such corporation or other entity, immediately following such sale or other disposition more than 50% of, respectively, the outstanding shares of common stock (or similar equity security) of such corporation or other entity and the combined voting power of the securities of such corporation or other entity entitled to vote generally in the election of directors, is then beneficially owned, directly or indirectly, by the individuals and entities who were the respective beneficial owners of the outstanding Stock immediately prior to such sale or disposition in substantially the same proportions as their ownership of the outstanding Stock immediately prior to such sale or disposition. |
| (c) | " Committee " - The Compensation Committee of the Company's Board, or such other committee of the Board that is designated by the Board to administer the Plan, composed of not less than two members of the Board who are (i) “Independent Directors” (as such term is defined under the rules of the NASDAQ Stock Market), (ii) “Non-Employee Directors” (as such term is defined in Rule 16b-3) and (iii) “Outside Directors” (as such term is defined in Section 162(m) of the Code), which shall serve at the pleasure of the Board. |
| (d) | " Company " – OriginClear, Inc. and its subsidiaries including subsidiaries of subsidiaries. |
| (e) | " Fair Market Value " - The fair market value of the Company's issued and outstanding Stock as determined in good faith by the Board or Committee. |
| (f) | " Grant " - The grant of any form of stock option, stock award, or stock purchase offer, whether granted singly, in combination, or in tandem, to a Participant pursuant to such terms, conditions and limitations as the Board or Committee may establish in order to fulfill the objectives of the Plan. |
| (g) | " Grant Agreement " - An agreement between the Company and a Participant that sets forth the terms, conditions and limitations applicable to a Grant. |
| (h) | " Option " - Either an Incentive Stock Option, in accordance with Section 422 of Code, or a Nonstatutory Option, to purchase the Company's Stock that may be awarded to a Participant under the Plan. A Participant who receives an award of an Option shall be referred to as an " Optionee ." |
| (i) | " Participant " - A director, officer, employee or consultant of the Company to whom an award has been made under the Plan. |
| (j) | " Restricted Stock Purchase Offer " - A Grant of the right to purchase a specified number of shares of Stock pursuant to a written agreement issued under the Plan. |
| (k) | " Securities Act " - The Securities Act of 1933, as amended from time to time. |
| (l) | " Stock " - Authorized and issued or unissued shares of common stock of the Company. |
| (m) | " Stock Award " - A Grant made under the Plan in stock or denominated in units of stock for which the Participant is not obligated to pay additional consideration. |
| 2. | Administration. The Plan shall be administered by the Board, provided however, that the Board may delegate such administration to the Committee. Subject to the provisions of the Plan, the Board and/or the Committee shall have authority to (a) grant, in its discretion, Incentive Stock Options in accordance with Section 422 of the Code, or Nonstatutory Options, Stock Awards or Restricted Stock Purchase Offers; (b) determine in good faith the fair market value of the Stock covered by any Grant; (c) determine which eligible persons shall receive Grants and the number of shares, restrictions, terms and conditions to be included in such Grants; (d) construe and interpret the Plan; (e) promulgate, amend and rescind rules and regulations relating to its administration, and correct defects, omissions and inconsistencies in the Plan or any Grant; (f) consistent with the Plan and with the consent of the Participant, as appropriate, amend any outstanding Grant or amend the exercise date or dates thereof; (g) determine the duration and purpose of leaves of absence which may be granted to Participants without constituting termination of their employment for the purpose of the Plan or any Grant; and (h) make all other determinations necessary or advisable for the Plan's administration. The interpretation and construction by the Board of any provisions of the Plan or selection of Participants shall be conclusive and final. No member of the Board or the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any Grant made thereunder. |
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| 3. |
Eligibility.
|
| (a) | General: The persons who shall be eligible to receive Grants shall be directors, officers, employees or consultants to the Company. The term consultant shall mean any person, other than an employee, who is engaged by the Company to render services and is compensated for such services. An Optionee may hold more than one Option. Any issuance of a Grant to an officer or director of the Company subsequent to the first registration of any of the securities of the Company under the Exchange Act shall comply with the requirements of Rule 16b-3. |
| (b) | Incentive Stock Options: Incentive Stock Options may only be issued to employees of the Company. Incentive Stock Options may be granted to officers or directors, provided they are also employees of the Company. Payment of a director's fee shall not be sufficient to constitute employment by the Company. |
The Company shall not grant an Incentive Stock Option under the Plan to any employee if such Grant would result in such employee
holding the right to exercise for the first time in any one calendar year, under all Incentive Stock Options granted under the
Plan or any other plan maintained by the Company, with respect to shares of Stock having an aggregate fair market value, determined
as of the date the Option is granted, in excess of $100,000. Should it be determined that an Incentive Stock Option granted under
the Plan exceeds such maximum for any reason other than a failure in good faith to value the Stock subject to such option, the
excess portion of such option shall be considered a Nonstatutory Option. To the extent the employee holds two (2) or more such
Options which become exercisable for the first time in the same calendar year, the foregoing limitation on the exercisability of
such Option as Incentive Stock Options under the Federal tax laws shall be applied on the basis of the order in which such Options
are granted. If, for any reason, an entire Option does not qualify as an Incentive Stock Option by reason of exceeding such maximum,
such Option shall be considered a Nonstatutory Option.
| (c) | Nonstatutory Option: The provisions of the foregoing Section 3(b) shall not apply to any Option designated as a " Nonstatutory Option " or which sets forth the intention of the parties that the Option be a Nonstatutory Option. |
| (d) | Stock Awards and Restricted Stock Purchase Offers: The provisions of this Section 3 shall not apply to any Stock Award or Restricted Stock Purchase Offer under the Plan. |
| 4. |
Stock.
|
| (a) | Authorized Stock: Stock subject to Grants may be either unissued or reacquired Stock. |
| (b) | Number of Shares: Subject to adjustment as provided in Section 10 of the Plan, the total number of shares of Stock which may be purchased or granted directly by Options, Stock Awards or Restricted Stock Purchase Offers, or purchased indirectly through exercise of Options granted under the Plan shall not exceed 160,000,000 (One Hundred Sixty Million). If any Grant shall for any reason terminate or expire, any shares allocated thereto but remaining unpurchased upon such expiration or termination shall again be available for Grants with respect thereto under the Plan as though no Grant had previously occurred with respect to such shares. Any shares of Stock issued pursuant to a Grant and repurchased pursuant to the terms thereof shall be available for future Grants as though not previously covered by a Grant. |
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| (c) | Reservation of Shares: The Company shall reserve and keep available at all times during the term of the Plan such number of shares as shall be sufficient to satisfy the requirements of the Plan. If, after reasonable efforts, which efforts shall not include the registration of the Plan or Grants under the Securities Act, the Company is unable to obtain authority from any applicable regulatory body, which authorization is deemed necessary by legal counsel for the Company for the lawful issuance of shares hereunder, the Company shall be relieved of any liability with respect to its failure to issue and sell the shares for which such requisite authority was so deemed necessary unless and until such authority is obtained. |
| (d) | No Obligation to Exercise : The issuance of a Grant shall impose no obligation upon the Participant to exercise any rights under such Grant. |
| 5. |
Terms and Conditions of Options. Options granted hereunder shall be evidenced by agreements between
the Company and the respective Optionees, in such form and substance as the Board or Committee shall from time to time approve.
The form of Incentive Stock Option Agreement attached hereto as
Exhibit A
and the three forms of a Nonstatutory Stock Option
Agreement for employees, for directors and for consultants, attached hereto as
Exhibit B-1,
Exhibit B-2
and
Exhibit
B-3,
respectively, shall be deemed to be approved by the Board. Option agreements need not be identical, and in each case may
include such provisions as the Board or Committee may determine, but all such agreements shall be subject to and limited by the
following terms and conditions:
|
| (a) | Number of Shares: Each Option shall state the number of shares to which it pertains. |
| (b) |
Exercise Price:
Each Option shall state the exercise price, which shall be determined as
follows:
|
| (i) | Any Incentive Stock Option granted to a person who at the time the Option is granted owns (or is deemed to own pursuant to Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined voting power or value of all classes of stock of the Company ("Ten Percent Holder") shall have an exercise price of no less than 110% of the Fair Market Value of the Stock as of the date of grant; and |
| (ii) | Incentive Stock Options granted to a person who at the time the Option is granted is not a Ten Percent Holder shall have an exercise price of no less than 100% of the Fair Market Value of the Stock as of the date of grant. |
For the purposes of this Section 5(b), the Fair Market Value shall be as determined by the Board or Committee in good faith, which determination shall be conclusive and binding; provided however, that if there is a public market for such Stock, the Fair Market Value per share shall be the average of the bid and asked prices (or the closing price if such stock is listed on the NASDAQ National Market System or Small Cap Issue Market) on the date of grant of the Option, or if listed on a stock exchange, the closing price on such exchange on such date of grant.
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| (c) |
Medium and Time of Payment:
The exercise price shall become immediately due upon exercise
of the Option and shall be paid in cash or check made payable to the Company. Should the Company's outstanding Stock be registered
under Section 12(g) of the Exchange Act at the time the Option is exercised, then the exercise price may also be paid as follows:
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| (i) | in shares of Stock held by the Optionee for the requisite period necessary to avoid a charge to the Company's earnings for financial reporting purposes and valued at Fair Market Value on the exercise date, or |
| (ii) | through a special sale and remittance procedure pursuant to which the Optionee shall concurrently provide irrevocable written instructions (a) to a Company designated brokerage firm to effect the immediate sale of the purchased shares and remit to the Company, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate exercise price payable for the purchased shares plus all applicable Federal, state and local income and employment taxes required to be withheld by the Company by reason of such purchase and (b) to the Company to deliver the certificates for the purchased shares directly to such brokerage firm in order to complete the sale transaction. |
At the discretion of the Board, exercisable either at the time of Option grant or of Option exercise, the exercise price may also be paid (i) by Optionee's delivery of a promissory note in form and substance satisfactory to the Company and permissible under applicable securities rules and bearing interest at a rate determined by the Board in its sole discretion, but in no event less than the minimum rate of interest required to avoid the imputation of compensation income to the Optionee under the Federal tax laws, or (ii) in such other form of consideration permitted by the Nevada corporations law as may be acceptable to the Board.
| (d) | Term, Exercise and Assignability of Options: Any Option granted to an employee of the Company shall become exercisable over a period of no longer than five (5) years. In no event shall any Option be exercisable after the expiration of ten (10) years from the date it is granted, and no Incentive Stock Option granted to a Ten Percent Holder shall, by its terms, be exercisable after the expiration of five (5) years from the date of the Option. Unless otherwise specified by the Board or the Committee in the resolution authorizing such Option, the date of grant of an Option shall be deemed to be the date upon which the Board or the Committee authorizes the granting of such Option. |
Each Option shall be exercisable to the nearest whole share, in installments or otherwise, as the respective Option agreements may provide. To the extent not exercised, installments (if more than one) shall accumulate, but shall be exercisable, in whole or in part, only during the period for exercise as stated in the Option agreement, whether or not other installments are then exercisable.
An Option granted under this Plan is not transferable except by will or the laws of descent and distribution. Notwithstanding the foregoing, the Board or Committee, in its sole discretion, may permit a transfer of a Nonstatutory Option to (i) a trust for the benefit of the Optionee, (ii) a member of the Optionee’s immediate family (or a trust for his or her benefit) or (iii) pursuant to a domestic relations order. Any attempt to transfer, assign, pledge or otherwise dispose of, or to subject to execution, attachment or similar process, any Option contrary to the provisions hereof shall be void and ineffective and shall give no right to the purported transferee.
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| (e) | Termination of Status as Employee, Consultant or Director: If Optionee's status as an employee shall terminate for any reason other than Optionee's disability or death, then Optionee (or if the Optionee shall die after such termination, but prior to exercise, Optionee's personal representative or the person entitled to succeed to the Option) shall have the right to exercise the portions of any of Optionee's Incentive Stock Options which were exercisable as of the date of such termination, in whole or in part, not less than 30 days nor more than three (3) months after such termination (or, in the event of " termination for cause " as defined in any applicable employment or consulting agreement, or in the absence of an employment or consulting agreement then defined as (i) Optionee’s conviction of or entrance of a plea of guilty or nolo contendere to a felony; or (ii) Optionee is engaging or has engaged in material fraud, material dishonesty, or other acts of willful and continued misconduct in connection with the business affairs of the Company, the Option shall automatically terminate as of the termination of employment as to all shares covered by the Option). |
With respect to Nonstatutory Options granted to employees, directors or consultants, the Board or Committee may specify such period for exercise, not less than 30 days (except that in the case of " termination for cause " or removal of a director), the Option shall automatically terminate as of the termination of employment or services as to shares covered by the Option, following termination of employment or services as the Board or Committee deems reasonable and appropriate. The Option may be exercised only with respect to installments that the Optionee could have exercised at the date of termination of employment or services. Nothing contained herein or in any Option granted pursuant hereto shall be construed to affect or restrict in any way the right of the Company to terminate the employment or services of an Optionee with or without cause.
| (f) | Disability of Optionee: If an Optionee is disabled (within the meaning of Section 22(e)(3) of the Code) at the time of termination, the period set forth in Section 5(e) shall be a period, as determined by the Board or Committee and set forth in the Option, of not less than six months nor more than one year after such termination. |
| (g) | Death of Optionee: If an Optionee dies while employed by, engaged as a consultant to, or serving as a Director of the Company, the portion of such Optionee's Option which was exercisable at the date of death may be exercised, in whole or in part, by the estate of the decedent or by a person succeeding to the right to exercise such Option at any time within (i) a period, as determined by the Board or Committee and set forth in the Option, of not less than six (6) months nor more than one (1) year after Optionee's death, which period shall not be more, in the case of a Nonstatutory Option, than the period for exercise following termination of employment or services, or (ii) during the remaining term of the Option, whichever is the lesser. The Option may be so exercised only with respect to installments exercisable at the time of Optionee's death and not previously exercised by the Optionee. |
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| (h) | Nontransferability of Option: No Option shall be transferable by the Optionee, except by will or by the laws of descent and distribution. |
| (i) | Rights as a Shareholder: An Optionee shall have no rights as a shareholder with respect to any shares covered by an Option until the effective date of the issuance of the shares following exercise of such Option by Optionee. No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions or other rights for which the record date is prior to the date such stock certificate is issued, except as expressly provided in Section 10 hereof. |
| (j) | Modification, Acceleration, Extension, and Renewal of Options: Subject to the terms and conditions and within the limitations of the Plan, the Board or Committee may modify an Option, or, once an Option is exercisable, accelerate the rate at which it may be exercised, and may extend or renew outstanding Options granted under the Plan or accept the surrender of outstanding Options (to the extent not theretofore exercised) and authorize the granting of new Options in substitution for such Options, provided such action is permissible under Section 422 of the Code and applicable state securities laws. Notwithstanding the provisions of this Section 5(j), however, no modification of an Option shall, without the consent of the Optionee, alter to the Optionee's detriment or impair any rights or obligations under any Option theretofore granted under the Plan. |
| (k) | Exercise Before Exercise Date: At the discretion of the Board or Committee, the Option may, but need not, include a provision whereby the Optionee may elect to exercise all or any portion of the Option prior to the stated exercise date of the Option or any installment thereof. Any shares so purchased prior to the stated exercise date shall be subject to repurchase by the Company upon termination of Optionee's employment as contemplated by Section 5(m) hereof prior to the exercise date stated in the Option and such other restrictions and conditions as the Board or Committee may deem advisable. |
| (l) | Other Provisions: The Option agreements authorized under the Plan shall contain such other provisions, including, without limitation, restrictions upon the exercise of the Options, as the Board or the Committee shall deem advisable. Shares shall not be issued pursuant to the exercise of an Option, if the exercise of such Option or the issuance of shares thereunder would violate, in the opinion of legal counsel for the Company, the provisions of any applicable law or the rules or regulations of any applicable governmental or administrative agency or body, such as the Code, the Securities Act, the Exchange Act, applicable state securities laws, Nevada corporation law, and the rules promulgated under the foregoing or the rules and regulations of any exchange upon which the shares of the Company are listed. Without limiting the generality of the foregoing, the exercise of each Option shall be subject to the condition that if at any time the Company shall determine that (i) the satisfaction of withholding tax or other similar liabilities, or (ii) the listing, registration or qualification of any shares covered by such exercise upon any securities exchange or under any state or federal law, or (iii) the consent or approval of any regulatory body, or (iv) the perfection of any exemption from any such withholding, listing, registration, qualification, consent or approval is necessary or desirable in connection with such exercise or the issuance of shares thereunder, then in any such event, such exercise shall not be effective unless such withholding, listing registration, qualification, consent, approval or exemption shall have been effected, obtained or perfected free of any conditions not acceptable to the Company. |
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| (m) | Repurchase Agreement: The Board may, in its discretion, require as a condition to the Grant of an Option hereunder, that an Optionee execute an agreement with the Company, in form and substance satisfactory to the Board in its discretion (" Repurchase Agreement "), (i) restricting the Optionee's right to transfer shares purchased under such Option without first offering such shares to the Company or another shareholder of the Company upon the same terms and conditions as provided therein; and (ii) providing that upon termination of Optionee's employment with the Company, for any reason, the Company (or another shareholder of the Company, as provided in the Repurchase Agreement) shall have the right at its discretion (or the discretion of such other shareholders) to purchase and/or redeem all such shares owned by the Optionee on the date of termination of his or her employment at a price determined by the Board or Committee. |
| 6. | Stock Awards and Restricted Stock Purchase Offers. |
| (a) |
Types of Grants.
|
| (i) | Stock Award. All or part of any Stock Award under the Plan may be subject to conditions established by the Board or the Committee, and set forth in the Stock Award Agreement, which may include, but are not limited to, continuous service with the Company, achievement of specific business objectives, increases in specified indices, attaining growth rates and other comparable measurements of Company performance. Such Stock Awards may be based on Fair Market Value or other specified valuation. All Stock Awards will be made pursuant to the execution of a Stock Award Agreement substantially in the form attached hereto as Exhibit C . |
| (ii) | Restricted Stock Purchase Offer. A Grant of a Restricted Stock Purchase Offer under the Plan shall be subject to such (i) vesting contingencies related to the Participant's continued association with the Company for a specified time and (ii) other specified conditions as the Board or Committee shall determine, in their sole discretion, consistent with the provisions of the Plan. All Restricted Stock Purchase Offers shall be made pursuant to a Restricted Stock Purchase Offer substantially in the form attached hereto as Exhibit D . |
| (b) | Conditions and Restrictions. Shares of Stock which Participants may receive as a Stock Award under a Stock Award Agreement or Restricted Stock Purchase Offer under a Restricted Stock Purchase Offer may include such restrictions as the Board or Committee, as applicable, shall determine, including restrictions on transfer, repurchase rights, right of first refusal, and forfeiture provisions. When transfer of Stock is so restricted or subject to forfeiture provisions it is referred to as " Restricted Stock ". Further, with Board or Committee approval, Stock Awards or Restricted Stock Purchase Offers may be deferred, either in the form of installments or a future lump sum distribution. The Board or Committee may permit selected Participants to elect to defer distributions of Stock Awards or Restricted Stock Purchase Offers in accordance with procedures established by the Board or Committee to assure that such deferrals comply with applicable requirements of the Code including, at the choice of Participants, the capability to make further deferrals for distribution after retirement. Any deferred distribution, whether elected by the Participant or specified by the Stock Award Agreement, Restricted Stock Purchase Offers or by the Board or Committee, may require the payment be forfeited in accordance with the provisions of Section 6(c). Dividends or dividend equivalent rights may be extended to and made part of any Stock Award or Restricted Stock Purchase Offers denominated in Stock or units of Stock, subject to such terms, conditions and restrictions as the Board or Committee may establish. |
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| (c) |
Cancellation and Rescission of Grants.
Unless the Stock Award Agreement or Restricted Stock
Purchase Offer specifies otherwise, the Board or Committee, as applicable, may cancel any unexpired, unpaid, or deferred Grants
at any time if the Participant is not in compliance with all other applicable provisions of the Stock Award Agreement or Restricted
Stock Purchase Offer, the Plan and with the following conditions:
|
| (i) |
A Participant shall not render services for any organization or engage directly or indirectly in
any business which, in the judgment of the chief executive officer of the Company or other senior officer designated by the Board
or Committee, is or becomes competitive with the Company, or which organization or business, or the rendering of services to such
organization or business, is or becomes otherwise prejudicial to or in conflict with the interests of the Company. For Participants
whose employment has terminated, the judgment of the chief executive officer or other senior officer designated by the Board or
Committee shall be based on the Participant's position and responsibilities while employed by the Company, the Participant's post-employment
responsibilities and position with the other organization or business, the extent of past, current and potential competition or
conflict between the Company and the other organization or business, the effect on the Company's customers, suppliers and competitors
and such other considerations as are deemed relevant given the applicable facts and circumstances. A Participant who has retired
shall be free, however, to purchase as an investment or otherwise, stock or other securities of such organization or business so
long as they are listed upon a recognized securities exchange or traded over-the-counter, and such investment does not represent
a substantial investment to the Participant or a greater than ten percent (10%) equity interest in the organization or business.
|
| (ii) |
A Participant shall not, without prior written authorization from the Company, disclose to anyone
outside the Company, or use in other than the Company's business, any confidential information or material, as defined in the Company's
Proprietary Information and Invention Agreement or similar agreement regarding confidential information and intellectual property,
relating to the business of the Company, acquired by the Participant either during or after employment with the Company.
|
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| (iii) |
A Participant shall disclose promptly and assign to the Company all right, title and interest in
any invention or idea, patentable or not, made or conceived by the Participant during employment by the Company, relating in any
manner to the actual or anticipated business, research or development work of the Company and shall do anything reasonably necessary
to enable the Company to secure a patent where appropriate in the United States and in foreign countries.
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| (iv) | Upon exercise, payment or delivery pursuant to a Grant, the Participant shall certify on a form acceptable to the Committee that he or she is in compliance with the terms and conditions of the Plan. Failure to comply with all of the provisions of this Section 6(c) prior to, or during the six months after, any exercise, payment or delivery pursuant to a Grant shall cause such exercise, payment or delivery to be rescinded. The Company shall notify the Participant in writing of any such rescission within two years after such exercise, payment or delivery. Within ten days after receiving such a notice from the Company, the Participant shall pay to the Company the amount of any gain realized or payment received as a result of the rescinded exercise, payment or delivery pursuant to a Grant. Such payment shall be made either in cash or by returning to the Company the number of shares of Stock that the Participant received in connection with the rescinded exercise, payment or delivery. |
| (d) |
Nonassignability.
|
| (i) |
Except pursuant to Section 6(e)(iii) and except as set forth in Section 6(d)(ii), no Grant of Stock
Award or a Restricted Stock Purchase Offer shall be assignable or transferable, or payable to or exercisable by, anyone other than
the Participant to whom it was granted.
|
| (ii) | Where a Participant terminates employment and retains a Grant pursuant to Section 6(e)(ii) in order to assume a position with a governmental, charitable or educational institution, the Board or Committee, in its discretion and to the extent permitted by law, may authorize a third party (including but not limited to the trustee of a "blind" trust), acceptable to the applicable governmental or institutional authorities, the Participant and the Board or Committee, to act on behalf of the Participant with regard to such Awards. |
| (e) |
Termination of Employment.
If the employment or service to the Company of a Participant
terminates, other than pursuant to any of the following provisions under this Section 6(e), all unexercised, deferred and unpaid
Stock Awards or Restricted Stock Purchase Offers shall be cancelled immediately, unless the Stock Award Agreement or Restricted
Stock Purchase Offer provides otherwise:
|
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| (i) |
Retirement Under a Company Retirement Plan.
When a Participant's employment terminates as
a result of retirement in accordance with the terms of a Company retirement plan, the Board or Committee may permit Stock Awards
or Restricted Stock Purchase Offers to continue in effect beyond the date of retirement in accordance with the applicable Grant
Agreement and the exercisability and vesting of any such Grants may be accelerated.
|
| (ii) |
Rights in the Best Interests of the Company.
When a Participant resigns from the Company
and, in the judgment of the Board or Committee, the acceleration and/or continuation of outstanding Stock Awards or Restricted
Stock Purchase Offers would be in the best interests of the Company, the Board or Committee may (i) authorize, where appropriate,
the acceleration and/or continuation of all or any part of Grants issued prior to such termination and (ii) permit the exercise,
vesting and payment of such Grants for such period as may be set forth in the applicable Grant Agreement, subject to earlier cancellation
pursuant to Section 9 or at such time as the Board or Committee shall deem the continuation of all or any part of the Participant's
Grants are not in the Company's best interest.
|
| (iii) |
Death or Disability of a Participant.
|
| (1) |
In the event of a Participant's death, the Participant's estate or beneficiaries shall have a period
up to the expiration date specified in the Grant Agreement within which to receive or exercise any outstanding Grant held by the
Participant under such terms as may be specified in the applicable Grant Agreement. Rights to any such outstanding Grants shall
pass by will or the laws of descent and distribution in the following order: (a) to beneficiaries so designated by the Participant;
if none, then (b) to a legal representative of the Participant; if none, then (c) to the persons entitled thereto as determined
by a court of competent jurisdiction. Grants so passing shall be made at such times and in such manner as if the Participant were
living.
|
| (2) |
In the event a Participant is deemed by the Board or Committee to be unable to perform his or her
usual duties by reason of mental disorder or medical condition which does not result from facts which would be grounds for termination
for cause, Grants and rights to any such Grants may be paid to or exercised by the Participant, if legally competent, or a committee
or other legally designated guardian or representative if the Participant is legally incompetent by virtue of such disability.
|
| (3) |
After the death or disability of a Participant, the Board or Committee may in its sole discretion
at any time (1) terminate restrictions in Grant Agreements; (2) accelerate any or all installments and rights; and (3) instruct
the Company to pay the total of any accelerated payments in a lump sum to the Participant, the Participant's estate, beneficiaries
or representative; notwithstanding that, in the absence of such termination of restrictions or acceleration of payments, any or
all of the payments due under the Grant might ultimately have become payable to other beneficiaries.
|
| (4) | In the event of uncertainty as to interpretation of or controversies concerning this Section 6, the determinations of the Board or Committee, as applicable, shall be binding and conclusive. |
| 7. | Change in Control . Unless otherwise provided in the applicable Grant Agreement, in the event of a Change in Control, any and all Options will become fully vested and immediately exercisable with such acceleration to occur without the requirement of any further act by either the Company or the Participant, subject to Section 11 hereof. |
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| 8. | Investment Intent. Unless and until the granting of Options or sale and issuance of Stock subject to the Plan are registered under the Securities Act or shall be exempt pursuant to the rules promulgated thereunder, each Grant under the Plan shall provide that the purchases or other acquisitions of Stock thereunder shall be for investment purposes and not with a view to, or for resale in connection with, any distribution thereof. Further, unless the issuance and sale of the Stock have been registered under the Securities Act, each Grant shall provide that no shares shall be purchased upon the exercise of the rights under such Grant unless and until (i) all then applicable requirements of state and federal laws and regulatory agencies shall have been fully complied with to the satisfaction of the Company and its counsel, and (ii) if requested to do so by the Company, the person exercising the rights under the Grant shall (A) give written assurances as to knowledge and experience of such person (or a representative employed by such person) in financial and business matters and the ability of such person (or representative) to evaluate the merits and risks of exercising the Option, and (B) execute and deliver to the Company a letter of investment intent and/or such other form related to applicable exemptions from registration, all in such form and substance as the Company may require. If shares are issued upon exercise of any rights under a Grant without registration under the Securities Act, subsequent registration of such shares shall relieve the purchaser thereof of any investment restrictions or representations made upon the exercise of such rights. |
| 9. | Amendment, Modification, Suspension or Discontinuance of the Plan. The Board or Committee may, insofar as permitted by law, from time to time, with respect to any shares at the time not subject to outstanding Grants, suspend or terminate the Plan or revise or amend it in any respect whatsoever, except that without the approval of the shareholders of the Company, no such revision or amendment shall (i) increase the number of shares subject to the Plan, (ii) decrease the price at which Grants may be granted, (iii) materially increase the benefits to Participants, or (iv) change the class of persons eligible to receive Grants under the Plan; provided, however, no such action shall alter or impair the rights and obligations under any Option, or Stock Award, or Restricted Stock Purchase Offer outstanding as of the date thereof without the written consent of the Participant thereunder. No Grant may be issued while the Plan is suspended or after it is terminated, but the rights and obligations under any Grant issued while the Plan is in effect shall not be impaired by suspension or termination of the Plan. |
12
| 10. |
Capital Change of the Company. In the event of any change in the outstanding Stock by reason of a stock split, stock dividend, combination or reclassification of shares, recapitalization, merger, or similar event, the Board or the Committee may adjust proportionally (a) the number of shares of Stock (i) reserved under the Plan, (ii) available for Incentive Stock Options and Nonstatutory Options and (iii) covered by outstanding Stock Awards or Restricted Stock Purchase Offers; (b) the Stock prices related to outstanding Grants; and (c) the appropriate Fair Market Value and other price determi nations for such Grants. In the event of any other change affecting the Stock or any distribution (other than normal cash dividends) to holders of Stock, such adjustments as may be deemed equitable by the Board or the Committee, including adjustments to avoid fractional shares, shall be made to give proper effect to such event. In the event of a corporate merger, consolidation, acquisition of property or stock, separation, reorganization or liquidation, the Board or the Committee shall be authorized to issue or assume stock options, whether or not in a transaction to which Section 424(a) of the Code applies, and other Grants by means of substitution of new Grant Agreements for previously issued Grants or an assumption of previously issued Grants. |
| 11. | Tax Withholding. The Company shall have the right to deduct applicable taxes from any Grant payment and withhold, at the time of delivery or exercise of Options, Stock Awards or Restricted Stock Purchase Offers or vesting of shares under such Grants, an appropriate number of shares for payment of taxes required by law or to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for withholding of such taxes. If Stock is used to satisfy tax withholding, such stock shall be valued based on the Fair Market Value when the tax withholding is required to be made. |
| 12. | Notice. Any written notice to the Company required by any of the provisions of the Plan shall be addressed to the chief personnel officer or to the chief executive officer of the Company, and shall become effective when it is received by the office of the chief personnel officer or the chief executive officer. |
| 13. | Indemnification of Board. In addition to such other rights or indemnifications as they may have as directors or otherwise, and to the extent allowed by applicable law, the members of the Board and the Committee shall be indemnified by the Company against the reasonable expenses, including attorneys' fees, actually and necessarily incurred in connection with the defense of any claim, action, suit or proceeding, or in connection with any appeal thereof, to which they or any of them may be a party by reason of any action taken, or failure to act, under or in connection with the Plan or any Grant granted thereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such claim, action, suit or proceeding, except in any case in relation to matters as to which it shall be adjudged in such claim, action, suit or proceeding that such Board or Committee member is liable for negligence or misconduct in the performance of his or her duties; provided that within sixty (60) days after institution of any such action, suit or Board proceeding the member involved shall offer the Company, in writing, the opportunity, at its own expense, to handle and defend the same. |
| 14. | Governing Law. The Plan and all determinations made and actions taken pursuant hereto, to the extent not otherwise governed by the Code or the securities laws of the United States, shall be governed by the law of the State of Nevada and construed accordingly. |
| 15. | Effective and Termination Dates. The Plan shall become effective on the date it is approved by the holders of a majority of the shares of Stock then outstanding. If the Plan is not approved by the holders of a majority of the shares of Stock within one (1) year from the date it is adopted and approved by the Board, all stock options granted hereunder shall be deemed Nonstatutory Options. The Plan shall terminate ten years later, subject to earlier termination by the Board pursuant to Section 9. |
13
The foregoing 2015 Incentive Stock Plan was duly adopted and approved by the Board of Directors on October 2, 2015.
| OriginClear, Inc. | ||
| By: | /s/ T. Riggs Eckelberry | |
|
T. Riggs Eckelberry
Chief Executive Officer |
||
Exhibit 99.1
OriginClear Completes Acquisition of Progressive Water Treatment (PWT)
Tweet this: @OriginClear completes Progressive Water Treatment #acquisition and launches profitable #water services group
Los Angeles and Dallas – October 1, 2015 – OriginClear Inc . (OTC/QB: OOIL ), a leading provider of water treatment solutions, today announced it has acquired 100 percent of Dallas-based Progressive Water Treatment Inc . (PWT), a profitable and fast-growing designer, builder and service provider for a wide range of industrial water treatment applications.
This marks the first transaction in OriginClear’s corporate strategy to rapidly acquire leading U.S. water service companies focused on specialized water treatment. OriginClear aims to offer a complementary, end-to-end offering to serve growing corporate demand for outsourced water treatment.
“Today’s announcement marks an exciting time for our company. By joining the OriginClear Group of Companies™, we believe we have a major opportunity to grow our existing water services business and penetrate new markets,” said Marc Stevens, PWT’s President. “OriginClear’s business aligns perfectly with Progressive Water Treatment’s, and we look forward to continued expansion together.
Progressive Water Treatment expects to report 2015 revenues of more than $6 million, and to contribute its forecasted 4 th quarter revenues of more than $1 million to OriginClear’s 2015 full year income statement.
Based on the current backlog of orders, PWT believes it will achieve revenues of more than $7 million in 2016.
PWT is profitable. With this first acquisition, the OriginClear Group of Companies™ begins as a profitable division, contributing significantly to OriginClear’s overall operating performance.
“Industrial users are increasingly outsourcing their water treatment, but it is a very fragmented business,” said Riggs Eckelberry , CEO of OriginClear. “We believe that there is value in building a single group of water service companies, each with a specific and complementary focus. PWT is a great first acquisition in this process. We plan at least four more in the next two years.”
According to the Bank of America Merrill Lynch global research report, “ A Blue Revolution – Global Water ”, the world water services industry is expected to double to $1 trillion by 2020. With this transaction complete, OriginClear plans to seek out other companies that focus on complete service solutions, rather than just the sale of proprietary products. OriginClear is targeting companies with strong management teams and profitable operations to build an international group of water treatment solution providers under the OriginClear brand.
Progressive Water Treatment Inc., describes its mission as designing and manufacturing a complete line of water treatment systems for municipal, industrial and pure water applications. The company utilizes a wide range of technologies, including chemical injection, media filters, membrane, ion exchange and SCADA technology, in turnkey systems. The company also offers a broad range of services including maintenance contracts, retrofits and replacement assistance. In addition, PWT rents equipment in contracts of varying duration. Customers are primarily served in the United States and Canada, with the company’s reach extending worldwide from Japan to Argentina to the Middle East.
Tweet this: @OriginClear completes Progressive Water Treatment #acquisition and launches profitable #water services group http://www.originclear.com/?p=16917
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About OriginClear, Inc.
OriginClear is a leading provider of water treatment solutions and the developer of a breakthrough water cleanup technology serving the rapidly growing $500 billion world market. Through its wholly owned subsidiaries, OriginClear provides systems and services to treat water in a wide range of industries, such as municipal, pharmaceutical, semiconductors, industrial, and oil & gas. To rapidly grow this segment of the business, we strategically acquire profitable and well-managed water treatment companies, which allow us to expand our global market presence and technical expertise. To enable a new era of clean and socially responsible water treatment solutions, we invented Electro Water Separation™, a breakthrough high-speed water cleanup technology using multi-stage electrolysis, that we license worldwide to water treatment equipment manufacturers. Water is our most valuable resource, and the mission of the “Family of OriginClear Companies” is to improve the quality of water and help return it to its original and clear condition. To learn more about OriginClear®, please visit our website at www.originclear.com .
OriginClear Safe Harbor Statement:
Matters discussed in this release contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this update, the words "anticipate," "believe," "estimate," "may," "intend," "expect" and similar expressions identify such forward-looking statements. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained herein. These forward-looking statements are based largely on the expectations of the Company and are subject to a number of risks and uncertainties. These include, but are not limited to, risks and uncertainties associated with our history of losses and our need to raise additional financing, the acceptance of our products and technology in the marketplace, our ability to demonstrate the commercial viability of our products and technology and our need to increase the size of our organization. Further information on the Company's risk factors is contained in the Company's quarterly and annual reports as filed with the Securities and Exchange Commission. The Company undertakes no obligation to revise or update publicly any forward-looking statements for any reason.
Press Contact:
Sarah Mier
Antenna Group
415-977-1947
OriginClear@antennagroup.com
Investor Relations OriginClear:
Tom Becker
Toll-free: 877-999-OOIL (6645) Ext. 3
International: +1-323-939-6645 Ext. 3
Fax: 323-315-2301
ir@OriginClear.com
www.OriginClear.com
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Abstract :
Tweet this: @OriginClear completes Progressive Water Treatment #acquisition and launches profitable #water services group
Key Words:
OriginClear, OriginClear inc, Progressive Water Treatment, OOIL, Acquisition, corporate strategy, Water Treatment, Marc Stevens, Riggs Eckelberry, Electro Water Separation, EWS, Invest OOIL, Investor, chemical injection, media filters, membrane, ion exchange, SCADA technology, Turn Key Water Treatment System, flow back produced water, frack, oil & gas, oil industry, fracking, oil drilling, waste water, algae appliance, invest algae, Frack and Produced Water Cleanup System, new oil, algae oil, renewable oil, algae biofuel, chemical free process algae, algae commercialization, algae harvesting, renewable crude oil, algae extraction, Oil Services
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