OPTION AGREEMENT
Exhibit
10.2
THE BOARD
OF DIRECTORS of LAPOLLA INDUSTRIES, INC. authorized and approved the Equity
Incentive Plan, as amended ("Plan"). The Plan provides for the grant of common
stock (“Stock”) options (the “Options”) to employees of Company (“Company”).
Unless otherwise provided herein all defined terms shall have the respective
meanings ascribed to them under the Plan.
1.
Grant of
Option. Pursuant to authority granted to it under the Plan,
the Administrator responsible for administering the Plan hereby grants to Xxxx
X. Xxxxx, as an employee of the Company (“Optionee”) and as of October 28, 2009
("Grant Date"), 20,000 Options. Each Option permits you to purchase
one share of Lapolla Industries, Inc.’s common stock, $.01 par value per share
("Shares").
2.
Character of
Options. Pursuant to the Plan, Options granted herein may be
Incentive Stock Options or Non-Qualified Stock Options, or both. To the extent
permitted under the Plan and by law, such Options shall first be considered
Incentive Stock Options.
3.
Exercise
Price. The Exercise Price for each Non-Qualified Stock Option granted
herein is $.37 per Share, and exercise price for each Incentive Stock Option
granted herein shall be $.37 per Share.
4.
Exercisability. The
exercisability of the Options granted hereby is subject to prior vesting and the
following criteria and restrictions:
4.1 Vesting Criteria. The
Options granted herein will automatically vest if the Company is profitable for
the 2010 calendar year. Once vested, the Options are immediately
exercisable.
4.2 Vesting
Determination. The determination of whether or not the Company
was profitable for the 2010 calendar year will be made by the Compensation
Committee based on the annual audited financial results as approved by the Audit
Committee. If the Company was not profitable, the Options granted
hereunder are forfeited. For the purposes of this Agreement,
“Profitability” is defined as Net Income (inclusive of any expense relating to
this Option hereunder) before Dividends on Preferred Stock.
5.
Term of
Options. The term of each Option granted herein shall be for a
term of up to five (5) years from the Grant Date, provided, however, that the
term of any Incentive Stock Option granted herein to the Optionee who is at the
time of the grant, a Ten Percent Owner, shall not be exercisable after the
expiration of five (5) years from the Grant Date.
6.
Payment of Exercise
Price. Options represented hereby may be exercised in whole or
in part by delivering to the Company your payment of the Exercise Price of the
Option so exercised (i) in cash, by check or cash equivalent, (ii) by
assignment and tender to the Company of shares of Stock (as defined in the Plan)
owned by the Participant having a Fair Market Value not less than the exercise
price; (iii) by tender to the Company of a written consent to accept a reduction
in the number of shares of Stock to which the Option relates (“Reduced Number of Shares”),
which Reduced Number of Shares, when ascribed a value, such value shall be equal
to the exercise price of the balance of shares of Stock covered by the Option;
(iv) by delivery of a properly executed notice of exercise together with
irrevocable instructions to a broker providing for the assignment to the Company
of the proceeds of a sale or loan with respect to some or all of the shares
being acquired upon the exercise of the Option (including, without limitation,
through an exercise complying with the provisions of Regulation T as
promulgated from time to time by the Board of Governors of the Federal Reserve
System) (a "Cashless
Exercise"), (v) by such other consideration as may be approved by
the Committee from time to time to the extent permitted by applicable law, or
(vi) by any combination thereof. The Company reserves, at any and all
times, the right, in the Company's sole and absolute discretion, to establish,
decline to approve or terminate any program or procedures for the exercise of
Options by means of a Cashless Exercise.
7.
Limits on Transfer of
Options. The Option granted herein shall not be transferable
by you otherwise than by will or by the laws of descent and distribution, except
for gifts to family members subject to any specific limitation concerning such
gift by the Administrator in its discretion; provided, however, that you may
designate a beneficiary or beneficiaries to exercise your rights and receive any
Shares purchased with respect to any Option upon your death. Each
Option shall be exercisable during your lifetime only by you or, if permissible
under applicable law, by your legal representative. No Option herein
granted or Shares underlying any Option shall be pledged, alienated, attached or
otherwise encumbered, and any purported pledge, alienation, attachment or
encumbrance thereof shall be void and unenforceable against the Company.
Notwithstanding the foregoing, to the extent permitted by the Administrator, in
its discretion, an Option shall be assignable or transferable subject to the
applicable limitations, if any, described in the General Instructions to
Form S-8 Registration Statement under the Securities Act of 1933, as
amended.
8.
Termination of
Employment. If your employment is terminated with the Company,
the Option and any unexercised portion shall be subject to the provisions
below:
(a) Upon
the termination of your employment with the Company, to the extent not
theretofore exercised, your Option shall continue to be valid; provided,
however, that:
(i) If
the Participant shall die while in the employ of the Company or during the one
(1) year period, whichever is applicable, specified in clause (ii) below and at
a time when such Participant was entitled to exercise an Option as herein
provided, the legal representative of such Participant, or such Person who
acquired such Option by bequest or inheritance or by reason of the death of the
Participant, may, not later than fifteen (15) months from the date of death,
exercise such Option, to the extent not theretofore exercised, in respect of any
or all of such number of Shares specified by the Administrator in such Option;
and
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(ii) If
the employment of any Participant to whom such Option shall have been granted
shall terminate by reason of the Participant's retirement (at such age upon such
conditions as shall be specified by the Board of Directors), disability (as
described in Section 22(e) of the Code) or dismissal by the Company other than
for cause (as defined below), and while such Participant is entitled to exercise
such Option as herein provided, such Participant shall have the right to
exercise such Option so granted, to the extent not theretofore exercised, in
respect of any or all of such number of Shares as specified by the Administrator
in such Option, at any time up to one (1) year from the date of termination of
the Optionee's employment by reason of retirement or dismissal other than for
cause or disability, provided, that if the Optionee dies within such twelve (12)
month period, subclause (i) above shall apply.
(b) If
you voluntarily terminate your employment, or are discharged for cause, any
Options granted hereunder shall forthwith terminate with respect to any
unexercised portion thereof.
(c) If
any Options granted hereunder shall be exercised by your legal representative if
you should die or become disabled, or by any person who acquired any Options
granted hereunder by bequest or inheritance or by reason of death of any such
person written notice of such exercise shall be accompanied by a certified copy
of letters testamentary or equivalent proof of the right of such legal
representative or other person to exercise such Options.
(d) For
all purposes of the Plan, the term "for cause" shall mean "cause" as defined in
the Plan or your employment agreement with the Company.
9.
Restriction; Securities
Exchange Listing. All certificates for shares delivered upon the exercise
of Options granted herein shall be subject to such stop transfer orders and
other restrictions as the Administrator may deem advisable under the Plan or the
rules, regulations and other requirements of the Securities and Exchange
Commission and any applicable federal or state securities laws, and the
Administrator may cause a legend or legends to be placed on such certificates to
make appropriate reference to such restrictions.
10. Adjustments. If there
is any change in the capitalization of the Company affecting in any manner the
number or kind of outstanding shares of Common Stock of the Company, whether by
stock dividend, stock split, reclassification or recapitalization of such stock,
or because the Company has merged or consolidated with one or more other
corporations (and provided the Option does not thereby terminate pursuant to
Section 5 hereof), then the number and kind of shares then subject to the Option
and the price to be paid therefor shall be appropriately adjusted by the Board
of Directors; provided, however, that in no event shall any such adjustment
result in the Company's being required to sell or issue any fractional shares.
Any such adjustment shall be made without change in the aggregate purchase price
applicable to the unexercised portion of the option, but with an appropriate
adjustment to the price of each Share or other unit of security covered by this
Option.
11. Change in
Control. In the event of a Change in Control (as defined in
the Plan), the surviving, continuing, successor, or purchasing entity or parent
thereof, as the case may be (the "Acquiror"), may, without the
consent of any Participant, either assume the Company's rights and obligations
under outstanding Options or substitute for outstanding Options substantially
equivalent options for the Acquiror's stock. In the event the Acquiror elects
not to assume or substitute for outstanding Options in connection with a Change
in Control, the Committee shall provide that any unexercised and/or unvested
portions of outstanding Options shall be immediately exercisable and vested in
full as of the date thirty (30) days prior to the date of the Change in Control.
The exercise and/or vesting of any Option that was permissible solely by reason
of this Section 11 shall be conditioned upon the consummation of the Change in
Control. Any Options which are not assumed by the Acquiror in
connection with the Change in Control nor exercised as of the time of
consummation of the Change in Control shall terminate and cease to be
outstanding effective as of the time of consummation of the Change in
Control.
12. Amendment to Options Herein
Granted. The Options granted herein may not be amended without
your consent.
13. Withholding
Taxes. As provided in the Plan, the Company may withhold from
sums due or to become due to Optionee from the Company an amount necessary to
satisfy its obligation to withhold taxes incurred by reason of the disposition
of the Shares acquired by exercise of the Options in a disqualifying disposition
(within the meaning of Section 421(b) of the Code), or may require you to
reimburse the Company in such amount.
LAPOLLA
INDUSTRIES, INC.
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/s/ Xxxxxxx X. Xxxxx,
Secretary
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10/28/09
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Xxxxxxx
X. Xxxxx, Secretary
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Date
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OPTIONEE
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/s/ Xxxx X. Xxxxx
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10/28/09
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Xxxx
X. Xxxxx
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Date
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