The laws of
the State of Delaware require that, in order for us to amend our Certificate of
Incorporation through the Charter Amendment, the amendment must be approved by
the affirmative vote of the holders of a majority of our common shares. The
Charter Amendment was approved on July 1, 2011. The Charter Amendment will
become effective on the effective date of the applicable certificate of
amendment to our Certificate of Incorporation with the office of the Department
of State of the State of Delaware, which we would expect to be 20 days after
this Information Statement was first mailed to our stockholders. However, the
exact timing of the filing of the Charter Amendment will be determined by the
Board of Directors based upon its evaluation as to when such action will be most
advantageous to us and our stockholders, and the Board of Directors reserves
the right to delay filing the amendment for up to 12 months following
stockholder approval thereof. In addition, the Board of Directors reserves the
right, notwithstanding stockholder approval and without further action by the
stockholders, to elect not to proceed with the filing of the Charter Amendment
if, at any time prior to filing the amendment, the Board of Directors, in its
sole discretion, determines that it is no longer in the best interests of our
company and our stockholders. In the ordinary course, future issuances of
shares, up to the authorized number of shares provided for in our Certificate
of Incorporation, will not require the approval of our stockholders under
Delaware law.
APPROVAL
OF THE 2010 PLAN
On
July 29, 2010, our Board of Directors authorized the 2010 Plan. Our
Board of Directors adopted the 2010 Plan to permit us to offer to our
employees, officers, directors and consultants whose past, present and/or
potential contributions to our company have been, are or likely to be,
important to our success an opportunity to acquire a proprietary interest in
our company. We believe that the types of long-term incentive awards that may
be provided under the 2010 Plan will enable us to respond to changes in
compensation practices, tax laws, accounting regulations and the size and
diversity of our businesses.
The
2010 Plan authorizes the grant of:
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•
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options which quality as “incentive stock options” (“
ISOs
”)
under Section 422(b) of the Internal Revenue Code of 1986, as amended (the “
Code
”);
and
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•
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options which do not qualify as ISOs (“
non-qualified options
” or “
NSOs
”).
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A copy of
the 2010 Plan is included as
Exhibit B
to this Information Statement.
The
issuance of grants under the 2010 Plan will be made to persons who are closely
related to us and who provide bona fide services to us in connection with our
business. We have currently reserved 4,000,000 of our authorized but unissued
shares of common stock for issuance under the 2010 Plan and as of May 31, 2011
we have granted options to purchase an aggregate of 1,456,389 shares under the
2010 Plan with exercise prices ranging from $0.197 to $0.28 per share.
Under the
Code, unless the 2010 Plan was approved by our stockholders by July 29, 2011,
which was one year from the date of adoption by our Board of Directors, no ISOs
may be granted and all ISOs that may have been previously granted would
automatically be converted into non-qualified options. We obtained stockholder
consent of the 2010 Plan so that we might continue to grant ISOs.
The 2010
Plan is administered by our Board of Directors or the Compensation Committee of
the Board of Directors (the “
Committee
”). The Board of Directors or the
Committee determines from time to time to whom plan options are to be granted,
the terms and provisions of the respective option agreements, the time or times
at which such options shall be granted, the type of options to be granted, the
dates such plan options become exercisable, the number of shares subject to
each option, the purchase price of such shares and the form of payment of such
purchase price. All other questions relating to the administration of the 2010
Plan, and the interpretation of the provisions thereof and of the related
option agreements, are resolved by the Board or Committee.
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The term of
each plan option and the manner in which it may be exercised is determined by
the Board of Directors or the compensation committee, provided that no option
may be exercisable more than 10 years after the date of its grant and, in the
case of an incentive option granted to an eligible employee owning more than
10% of the common stock, no more than five years after the date of the grant.
The
exercise price per share for each NSO granted cannot be less 75% of the fair
market value of our common stock on the date of grant and the exercise price
per share for each ISO granted cannot be less than the fair market value per
share of common stock on the date of such grant. In the case of an ISO to be
granted to an employee owning stock possessing more than 10% of the total
combined voting power of all classes of our company, the price per share cannot
be less than 110% of the fair market value per share of common stock on the
date of grant.
In the
event of any stock split of our outstanding common stock, the Board of
Directors in its discretion may elect to maintain the stated amount of shares reserved
under the 2010 Plan without giving effect to such stock split. The 2010 Plan
provides that, if our outstanding shares are increased, decreased, exchanged or
otherwise adjusted due to a share dividend, forward or reverse share split,
recapitalization, reorganization, merger, consolidation, combination or
exchange of shares, an appropriate and proportionate adjustment shall be made
in the number or kind of shares subject to unexercised options and in the
purchase price per share under such options. Any adjustment, however, does not
change the total purchase price payable for the shares subject to outstanding
options. In the event of our proposed dissolution or liquidation, a proposed
sale of all or substantially all of our assets, a merger or tender offer for
our shares of common stock, the Board of Directors may declare that each option
granted under the 2010 Plan will terminate as of a date to be fixed by the
Board of Directors; provided that not less than 30 days written notice of the
date so fixed shall be given to each participant holding an option, and each
such participant will have the right, during the period of 30 days preceding
such termination, to exercise the participant’s option, in whole or in part,
including as to options not otherwise exercisable.
Plan
options are exercisable by delivery of written notice to us stating the number
of shares with respect to which the option is being exercised, together with
full payment of the purchase price therefor. Payment for the exercise price of
the plan option can be in cash, check, certified or bank cashier’s check,
promissory note secured by the shares issued through exercise of the related
options, shares of common stock or in such other form or combination of forms
which shall be acceptable to the Board of Directors or the Committee; provided
that any loan or guarantee by us of the purchase price may only be made upon
resolution of the Board or Committee that such loan or guarantee is reasonably
expected to benefit us.
All plan
options are non-assignable and non-transferable except by will or by the laws
of descent and distribution and during the lifetime of the optionee may be
exercised only by such optionee. If an optionee dies while our employee or
within three months after termination of employment by us because of
disability, or retirement or otherwise, such options may be exercised, to the
extent that the optionee shall have been entitled to do so on the date of death
or termination of employment, by the person or persons to whom the optionee’s
right under the option pass by will or applicable law, or if no such person has
such right, by his executors or administrators.
In the
event of termination of employment because of death while an employee or
because of disability, the optionee’s options may be exercised not later than
the expiration date specified in the option or one year after the optionee’s
death, whichever date is earlier, or in the event of termination of employment
because of retirement or otherwise, not later than the expiration date
specified in the option or one year after the optionee’s death, whichever date
is earlier. If an optionee’s employment by us terminates because of disability
and such optionee has not died within the following three months, the options
may be exercised, to the extent that the optionee shall have been entitled to
do so at the date of the termination of employment, at any time, or from time
to time, but not later than the expiration date specified in the option or one
year after termination of employment, whichever date is earlier.
7
If an
optionee’s employment should terminate by reason of his/her retirement in
accordance with the terms of any tax-qualified retirement plans for our company
or with the consent of the Board or the Committee or involuntarily other than
by termination for cause, and such optionee has not died within the following
three months, he may exercise his or her option to the extent the optionee
shall have been entitled to do so at the date of the termination of employment,
at any time and from to time, but not later than the expiration date specified
in the option or 30 days after termination of employment, whichever date is
earlier. If an optionee’s employment shall terminate for any reason other than
death, disability or retirement, all right to exercise the option shall
terminate at date of such termination of employment.
The Board
of Directors or Committee may amend, suspend or terminate the 2010 Plan at any
time; however, no such action may prejudice the rights of any holder of a stock
grant or optionee who has prior thereto been granted options under the plan. In
addition, no amendment may be made to the 2010 Plan which has the effect of
increasing the aggregate number of shares subject to this plan (except for
adjustments due to changes in our capitalization) or changing the definition of
“eligible person” under the plan unless and until approved by our stockholders,
if required, in the same manner as approval of the 2010 Plan. Any such
termination of the 2010 Plan shall not affect the validity of any options
previously granted thereunder. Unless the 2010 Plan shall have earlier been
suspended or terminated by the Board of Directors, the plan will terminate on
July 29, 2020.
DISSENTER’S
RIGHTS
No
dissenter’s rights are afforded to our stockholders under Delaware law as a
result of the adoption of the Charter Amendment or the 2010 Plan.
DELIVERY OF DOCUMENTS TO SECURITY HOLDERS
SHARING AN ADDRESS
The SEC has
adopted rules that permit companies and intermediaries such as brokers to
satisfy delivery requirements for information statements with respect to two or
more stockholders sharing the same address by delivering a single information
statement addressed to those stockholders. This process, which is commonly
referred to as “householding,” potentially provides extra convenience for
stockholders and cost savings for companies. We and some brokers deliver a
single information statement to multiple stockholders sharing an address unless
contrary instructions have been received from the affected stockholders. Once
you have received notice from your broker or us that they are or we will be
householding materials to your address, householding will continue until you are
notified otherwise or until you revoke your consent. If, at any time, you no
longer wish to participate in householding and would prefer to receive a
separate information statement, or if you currently receive multiple
information statements and would prefer to participate in householding, please
notify your broker if your shares are held in a brokerage account or us if you
hold registered shares. You can notify us by sending a written request to, Puradyn Filter Technologies Incorporated,
2017 High Ridge Road, Boynton Beach, Florida 33426 Attention: Corporate
Secretary, or by faxing a communication to (561) 547-2360.
WHERE YOU CAN OBTAIN ADDITIONAL INFORMATION
We file
annual and special reports and other information with the SEC. Certain of our SEC
filings are available over the Internet at the SEC’s web site at
http://www.sec.gov. You may also read and copy any document we file with the
SEC at its public reference facilities:
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Public
Reference Room Office
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100 F
Street, N.E.
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Room 1580
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Washington,
D.C. 20549
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8
You
may also obtain copies of the documents at prescribed rates by writing to the
Public Reference Section of the SEC at 100 F Street, N.E., Room 1580,
Washington, D.C. 20549. Callers in the United States can also call 1-202-551-8090
for further information on the operations of the public reference facilities.
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BY ORDER OF THE BOARD OF DIRECTORS:
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PURADYN FILTER TECHNOLOGIES INCORPORATED
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By:
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/s/ Joseph
V. Vittoria
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July 5, 2011
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Joseph V.
Vittoria, Chairman and CEO
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9
EXHIBIT A
CERTIFICATE
OF AMENDMENT
TO THE CERTIFICATE OF INCORPORATION
OF
PURADYN FILTER TECHNOLOGIES INCORPORATED
(A Delaware Corporation)
Pursuant to
Section 242 of the Delaware General Corporations Law, the undersigned, being
the Chairman and Chief Executive Officer of Puradyn Filter Technologies
Incorporated, a corporation organized and existing under the laws of the State
of Delaware (the “Corporation”), does hereby certify that the following
resolutions were adopted by the Corporation’s Board of Directors and its
stockholders as hereinafter described:
RESOLVED
, that the Certificate of
Incorporation of the Corporation, as amended, shall be further amended by
deleting the first paragraph of Article V Capital Stock and replacing it as follows:
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The
aggregate number of shares of all classes of capital stock which the
Corporation has authority to issue is 100,500,000 of which 100,000,000 are to
be shares of Common Stock, $.001 par value per share, and of which 500,000
are to be shares of Preferred Stock, $.001 par value per share. The shares
may be issued by the Corporation from time to time as approved by the Board
of Directors of the Corporation without the approval of the stockholders.
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FURTHER
RESOLVED,
except for the
deletion and substitution of the first paragraph of Article V Capital Stock of
the Corporation’s Certificate of Incorporation, as amended, all other
provisions of the Corporation’s Certificate of Incorporation, as amended, shall
remain in full force and effect.
The
foregoing resolution and this Certificate of Amendment were adopted by the
Board of Directors of the Corporation pursuant to a written consent of the
Directors of the Corporation dated May 23, 2011 in accordance with Section 141
of the Delaware General Corporation Law, and by the written consent dated July
1, 2011 of the holders of shares of the Corporation’s voting stock having not
less than the minimum number of votes that would be necessary to authorize or
take such action at a meeting at which all shares entitled to vote thereon were
present and voted in accordance with Section 228 of the Delaware General
Corporation Law.
IN WITNESS
WHEREOF
, the Corporation has caused this certificate to be signed by
Joseph V. Vittoria, its Chief Executive Officer, this ______ day of _________,
2011.
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Puradyn Filter Technologies Incorporated
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By:
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Joseph V. Vittoria, Chairman and CEO
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1
EXHIBIT B
PURADYN FILTER TECHNOLOGIES INCORPORATED
2010 STOCK OPTION PLAN
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1.
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Grant of Options; General.
In accordance with the provisions hereinafter set forth in this stock option
plan, the name of which is the
Puradyn
Filter Technologies Incorporated 2010 Stock Option Plan
(the
‘Plan’), the Board of Directors (the ‘Board’) or, the Compensation Committee
(the ‘Committee’) of Puradyn Filter Technologies Incorporated (‘the
Corporation’) is hereby authorized to issue from time to time on the
Corporations behalf to any one or more Eligible Persons, as hereinafter
defined, options to acquire shares of the Corporation’s $.001 par value
common stock (the ‘Stock’).
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2.
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Type of Options.
The Board or the Committee is authorized to issue options which meet the
requirements of Section §422 of the Internal Revenue Code of 1986, as amended
(the ‘Code’), which options are hereinafter referred to collectively as ISOs,
or singularly as an ISO. The Board or the Committee is also, in its
discretion, authorized to issue options which are not ISOs, which options are
hereinafter referred to collectively as NSOs, or singularly as an NSO. Except
where the context indicates to the contrary, the term ‘Option’ or ‘Options’
mean ISOs and NSOs.
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3.
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Amount of Stock.
The aggregate number of shares of Stock which may be purchased pursuant to
the exercise of Options shall be 2,000,000 shares. Of this amount, the Board
or the Committee shall have the power and authority to designate whether any
Options so issued shall be ISOs or NSOs, subject to the restrictions on ISOs
contained elsewhere herein. If an Option ceases to be exercisable, in whole
or in part, the shares of Stock underlying such Option shall continue to be
available under this Plan. Further, if shares of Stock are delivered to the
Corporation as payment for shares of Stock purchased by the exercise of an
Option granted under this Plan, such shares of Stock shall also be available
under this Plan. If there is any change in the number of shares of Stock on
account of the declaration of stock dividends, recapitalization resulting in
stock split-ups, or combinations or exchanges of shares of Stock, or
otherwise, the number of shares of Stock available for purchase upon the
exercise of Options, the shares of Stock subject to any Option and the
exercise price of any outstanding Option shall be appropriately adjusted by
the Board or the Committee ; provided however that the Board or Committee
shall in its sole discretion determine whether such change requires an
adjustment in the aggregate number of shares reserved for issuance under the
Plan or to retain the number of shares reserved and available under the
Plan.. The Board or the Committee shall give notice of any adjustments to
each Eligible Person granted an Option under this Plan, and such adjustments
shall be effective and binding on all Eligible Persons. If because of one or
more recapitalizations, reorganizations or other corporate events, the holder
of outstanding Stock receive something other than shares of Stock then, upon
exercise of an Option, the Eligible Person will receive what the holder would
have owned if the holder had exercised the Option immediately before the
first such corporate event and not disposed of anything the holder received
as a result of the corporate event.
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4.
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Eligible Persons
.
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(a)
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With respect to ISOs, an Eligible Person means any individual who is
employed by the Corporation or by any subsidiary of the Corporation.
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(b)
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With respect to NSOs, an Eligible Person means:
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i.
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any individual who has been employed by the Corporation or by any
subsidiary of the Corporation;
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ii.
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any director of the Corporation or any subsidiary of the Corporation;
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iii.
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any member of the Corporation’s advisory board member or of any of
the Corporation’s subsidiary(ies); or
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iv.
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any consultant of the Corporation or by any subsidiary of the
Corporation.
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5.
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Grant of Options
.
The Board or the Committee has the right to issue the Options established by
the Plan to Eligible Persons. The Board or the Committee shall follow the
procedures prescribed for it elsewhere in this Plan. A grant of Options shall
be set forth in writing signed on behalf of the Corporation or by a majority
of the members of the Committee. The writing shall identify whether the
Option being granted is an ISO or an NSO and shall set forth the terms which
govern the Option. The terms shall be determined by the Board or the
Committee, and may include, among other terms, the number of shares of Stock
that may be acquired pursuant to the exercise of the Options, when the
Options may be exercised, the period for which the Option is granted and
including the expiration date, the effect on the Options if the Eligible
Person terminated employment and whether the Eligible Person may deliver
shares of Stock to pay for the shares of Stock to be purchased by the exercise
of the Option. However, no term shall be set forth in the writing which is
inconsistent with ay of the terms of this Plan. The terms of an Option
granted to an Eligible Person may differ from the terms of an Option granted
to another Eligible Person, and may differ from the terms of an earlier
Option granted to the same Eligible Person.
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6.
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Option Price
.
The option price per share shall be determined by the Board or the Committee
at the time any Option is granted, and shall be not less than:
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(a)
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In the case of an ISO , the fair market value,
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(b)
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In the case of an ISO granted to a 10% or greater stockholder, 110%
of the fair market value, or
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(c)
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In the case of an NSO, not less than 75% of the fair market value
(but in no event less than the par value) of one share of Stock on the date
the Option is granted, as determined by the Board or the Committee. Fair
Market Value as used herein shall be:
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i.
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If shares of Stock shall be traded on an exchange or over the counter
(OTC) market, the closing price or the closing bid price of such Stock on
such exchange or OTC market on which such shares shall be traded on that
date, or if such exchange of OTC market is closed or if no shares shall have
traded on such date, on the last preceding date on which such shares shall
have traded.
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ii.
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If shares of Stock shall not be traded on an exchange or OTC market,
the value as determined by the Board of Directors or the Committee of the
Corporation.
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7.
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Purchase of Shares.
An Option shall be exercised by the tender to the Corporation of the full
purchase price of the Stock with respect to which the Option is exercised and
written notice of the exercise. The purchase price of the Stock shall be in
United States dollars, payable in cash or by check, or in property or
Corporation stock, if so permitted by the Board or the Committee in
accordance with the discretion granted in Paragraph 5 hereof, having a value
equal to such purchase price. The Corporation shall not be required to issue
or deliver any certificates for shares of Stock purchased upon the exercise
of an Option prior to:
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(a)
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If requested by the Corporation, the filing with the Corporation by
the Eligible Person of a representation in writing this is the Eligible
Persons’ then present intention to acquire the Stock being purchased for
investment and not for resale, and/or
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(b)
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The completion of any registration or other qualification of such
shares under any government regulatory body, which the Corporation shall
determine to be necessary or advisable.
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8.
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Compensation Committee.
The Committee may be appointed from time to time by the Corporation’s Board
of Directors. The Board may from time to time remove members from or add
members to the Committee. The Committee shall be constituted so as to permit
the Plan to comply in all respects with the provisions set forth in Paragraph
19 herein. The members of the Committee may elect one of its members as its
chairman. The Committee shall hold its meetings at such times and places as
its chairman shall determine. A majority of the Committee’s members present
in person shall constitute a quorum for the transaction of business. All
determinations of the Committee will be made by the majority vote of the
members constituting the quorum. The members may participate in a meeting of
the Committee by conference telephone of similar communications equipment by
means of which all members participating in the meeting can hear each other.
Participation in a meeting in that manner will constitute presence in person
at the meeting. Any decision or determination reduced to writing and signed
by all members of the Committee will be effective as if it had been made by a
majority vote of all members of the Committee at a meeting which is duly
called and held.
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9.
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Administration of Plan.
In addition to granting Options and to exercising the authority granted to it
elsewhere in this Plan, the Board or the Committee is granted the full right
and authority to interpret and construe the provisions of this Plan,
promulgate, amend and rescind rules and procedures relating to the
implementation of the Plan and to make all other determinations necessary or
advisable for the administration of the Plan, consistent, however, with the
intent of the Corporation that Options granted or awarded pursuant to the
Plan comply with the provisions of Paragraph 19. All determinations made by
the Board or the Committee shall be final, binding and conclusive on all
persons including the Eligible Person, the Corporation and its stockholders,
employees, officers and directors and consultants. No member of the Board or
the committee will be liable for any act or omission in connection with the
administration of the Plan unless it is attributable to that member’s willful
misconduct.
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10.
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Provisions Applicable to ISOs.
The following provisions shall apply to all ISOs granted by the Board or the
Committee and are incorporated by reference into any writing granting and
ISO:
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(a)
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An ISO may only be granted within ten (10) years from July 29, 2010,
the date that this Plan was originally adopted by the Corporation’s Board of
Directors.
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(b)
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An ISO may not be exercised after the expiration of ten (10) years
from the date the ISO is granted.
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(c)
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The option price may not be less than the FMV of the Stock at the
time the ISO is granted.
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(d)
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An ISO is not transferrable by the Eligible Person to whom it is
granted except by will, or the laws of descent and distribution, and is
exercisable during his or her lifetime only by the Eligible Person.
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(e)
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If the Eligible Person receiving the ISO owns at the time of the
grant stock possessing more than ten (10%) percents of the total combined
voting power of all classes of stock of the employer corporation or of its
parent or subsidiary corporation (as those terms are defined in the Code),
then the option price shall be at least 110% of the FMV of the Stock, and the
ISO shall not be exercisable after the expiration of five (5) years from the
date the ISO is granted.
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(f)
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The aggregate FMV (determined at the time the ISO is granted) of the
Stock with respect to which the ISO is first exercisable by the Eligible
Person during any calendar year (under this Plan and any other incentive
stock option plan of the Corporation) shall not exceed $100,000.
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(g)
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Even if the shares of Stock which are issued upon exercise of an ISO
are sold within one year following the exercise of such ISO so that the sale
constitutes a disqualifying disposition for ISO treatment under the Code, no
provision of this Plan shall be construed as prohibiting such a sale.
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(h)
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This Plan was adopted by the Corporation July 29, 2010, by virtue of
its approval by the Corporation’s Board of Directors. Approval by a majority
of the stockholders of the Corporation occurred on July 29, 2010, and an
information statement furnished to inform the Corporation’s non-majority
stockholders of the adoption of this Plan was mailed to all stockholders on
July 29, 2010.
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11.
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Determination of Fair Market Value.
In granting ISOs under this Plan, the Board or the Committee shall make a
good faith determination as to the FMV of the Stock at the time of granting
the ISO.
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12.
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Restrictions on Issuance of Stock
.
The Corporation shall not be obligated to sell or issue any shares of Stock
pursuant to the exercise of an Option unless the Stock with respect to which
the Option is being exercised is at that time effectively registered or
exempt from registration under the Securities Act of 1933, as amended, and
any other applicable laws, rules and regulation. The Corporation may
condition the exercise of an Option granted in accordance herewith upon
receipt from the Eligible Person, or any other purchaser thereof, of a
written representation that at the time of such exercise it is his or her
then-present intention to acquire the shares of Stock for investment and not
with a view to, or for sale in connection with, any distribution thereof;
except that, in the case of a legal representative of an Eligible Person, ‘distribution’
shall be defined to exclude distribution by will or under the laws of descent
and distribution. Prior to issuing any shares of Stock pursuant to the
exercise of an Option, the Corporation shall takes such steps as it deems
necessary to satisfy any withholding tax obligations imposed upon it by any
level of government.
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13.
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Exercise in the Event of Death or
Termination of Employment.
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(a)
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If an optionee shall die:
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i.
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While an employee of the Corporation or a subsidiary, or
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ii.
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Within three months after termination of his employment with the
Corporation or a subsidiary because of his/her disability, or retirement or
otherwise, his/her Options may be exercised, to the extent that the optionee
shall have been entitled to do so on the date of his death or such
termination of employment, by the person or persons to whom the optionee’s
right under the Option pass by will or applicable law, or if no such persona
has such right, by his executors or administrators, at any time, or from time
to time. In the event of termination of employment because of his/her death
while an employee or because of disability, his/her Options may be exercised
not later than the expiration date specified in Paragraph 5 or one year after
the optionee’s death, whichever date is earlier, or in the event of
termination of employment because of retirement or otherwise, not later than
the expiration date specified in Paragraph 5 hereof or one year after the
optionee’s death, whichever date is earlier.
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(b)
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If an optionee’s employment by the Corporation or a Subsidiary shall
terminate because of his disability and such optionee has not died within the
following three months, he may exercise his Options, to the extent that he
shall have been entitled to do so at the date of the termination of his
employment, at any time, or from time to time, but not later than the
expiration date specified in Paragraph 5 hereof or one year after termination
of employment, whichever date is earlier.
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4
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(c)
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If an optionee’s employment shall terminate by reason of his/her
retirement in accordance with the terms of the Corporation’s tax-qualified
retirement plans or with the consent of the Board or the Committee or
involuntarily other than by termination for cause, and such optionee has not
died within the following three months, he may exercise his Option to the
extent he shall have been entitled to do so at the date of the termination of
his employment, at any time and from to time, but not later than the
expiration date specified in Paragraph 5 hereof or thirty (30) days after
termination of employment, whichever date is earlier. For purposes of this
Paragraph 13, termination for cause shall mean termination of employment by
reason of the optionee’s commission of a felony, frauds or willful misconduct
which has resulted, or is likely to result, in substantial and material
damage to the Corporation or a Subsidiary, all as the Board or the Committee
in its sole discretion may determine.
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(d)
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If an optionee’s employment shall terminate for any reason other than
death, disability, retirement or otherwise, all right to exercise his Option
shall terminate at the date of such termination of employment.
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14.
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Corporate Events.
In the event of the proposed dissolution or liquidation of the Corporation, a
proposed sale of all or substantially all of the assets of the Corporation, a
merger or tender for the Corporation’s shares of Common Stock the Board of
Directors shall declare that each Option granted under this Plan shall terminate
as of a date to be fixed by the Board of Directors; provided that not less
than thirty (30) days written notice of the date so fixed shall be given to
each Eligible Person holding an Option, and each such Eligible Person shall
have the right, during the period of thirty (30) days preceding such
termination, to exercise his Option as to all or any part of the shares of
Stock covered thereby, including shares of Stock as to which such Option
would not otherwise be exercisable. Nothing set forth herein shall extend the
term set for purchasing the shares of Stock set forth in the Option.
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15.
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No Guarantee of Employment.
Nothing in this Plan or in any writing granting an Option will confer upon
any Eligible Person the right to continue in the employ of the Eligible
Person’s employer, or will interfere with or restrict in any way the right of
the Eligible Person’s employer to discharge such Eligible Person at any time
for any reason whatsoever, with or without cause.
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16.
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Non-transferability.
No Option granted under the Plan shall be transferable other than by will or
by the laws of descent and distribution. During the lifetime of the optionee,
an Option shall be exercisable only by him.
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17.
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No Rights as Stockholder.
No optionee shall have any rights as a stockholder with respect to any shares
subject to his Option prior to the date of issuance to him of a certificate
or certificates for such shares.
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18.
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Amendment and Discontinuance of Plan.
The Corporation’s Board of Directors may amend, suspend or discontinue this
Plan at any time. However, no such action may prejudice the rights of any
Eligible Person who has prior thereto been granted Options under this Plan.
Further, no amendment to this Plan which has the effect of
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(a)
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Increasing the aggregate number of shares of Stock subject to this
Plan (except for adjustments pursuant to Paragraph 3 herein), or
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5
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(b)
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Changing the definition of Eligible Person under this Plan, may be
effective unless and until approval of the stockholders of the Corporation is
obtained in the same manner as approval of this Plan is required. The
Corporation’s Board of Directors is authorized to seek the approval of the
Corporation’s stockholders for any other changes it proposes to make to this
Plan which require such approval, however, the Board of Directors may modify
the Plan, as necessary, to effectuate the intent of the Plan as a result of
any changes in the tax, accounting or securities laws treatment of Eligible
Persons and the Plan, subject to the provisions set forth in this Paragraph
18 and Paragraph 19.
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19.
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Compliance with Code.
The aspects of this Plan on ISOs are intended to comply in every respect with
Section 422 of the Code and the regulations promulgated hereunder. In the
event any future statute or regulation shall modify the existing statute, the
aspects of this Plan on ISOs shall be deemed to incorporate by reference such
modification. Any stock option agreement relating to any Option granted
pursuant to this Plan outstanding and unexercised at the time any modifying
statute or regulation becomes effective shall also be deemed to incorporate
by reference such modification and no notice of such modification need by
given to optionee.
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If any provision of the aspects of this Plan on ISOs is determined to
disqualify the shares purchasable pursuant to the Options granted under this
Plan from the special tax treatment provided by Code Section 422, such
provision shall be deemed null and void and to incorporate by reference the
modification required to qualify the shares for said tax treatment.
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20.
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Compliance with Other Laws and Regulations.
The Plan, the grant and exercise of Options thereunder, and the obligation of
the Corporation to sell and deliver Stock under such options, shall be
subject to all applicable federal and state laws, rules, and regulations and
to such approvals by any government or regulatory agency as may be required.
The Corporation shall not be required to issue or deliver any certificates
for shares of Stock prior to
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(a)
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The listing of such shares on any stock exchange or over-the-counter
market on which the Stock may then be listed and
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(b)
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The completion of any registration or qualification of such shares
under any federal or state law, or any ruling or regulation of any government
body which the Corporation shall, in its sole discretion, determine to be
necessary or advisable. Moreover, no Option may be exercised if its exercise
or the receipt of Stock pursuant thereto would be contrary to applicable laws.
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21.
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Disposition of Shares.
In the event any share of Stock acquired by an exercise of an ISO granted
under the Plan shall be transferable other than by will or by the laws of
descent and distribution within two years of the date such ISO was granted or
within one year after the transfer of such Stock pursuant to such exercise,
the optionee shall give prompt written notice thereof to the Corporation or
the Committee.
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22.
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Name.
The Plan
shall be known as the ‘Puradyn Filter Technologies Incorporated 2010 Stock
Option Plan.’
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6
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23.
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Notices
.
Any
notice hereunder shall be in writing and sent by certified mail, return
receipt requested or by facsimile transmission (with electronic or written
confirmation of receipt) and when addressed to either the Corporation or the
Committee shall be sent to it at the Corporation’s main office, 2017 High
Ridge Road, Boynton Beach, FL 33426, subject to the right of either party to
designate at any time hereafter in writing some other address, facsimile
number or person to whose attention such notice shall be sent.
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24.
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Headings
.
The
headings preceding the text of Sections and subparagraphs hereof are inserted
solely for convenience of reference, and shall not constitute a part of this
Plan nor shall they affect its meaning, construction or effect.
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25.
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Effective Date
.
This Plan, the Puradyn Filter Technologies Incorporated 2010 Stock Option
Plan, was adopted by the Board of Directors of the Corporation on July 29,
2010. The effective date of the Plan shall be the same date.
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26.
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Governing Law.
The Plan, and all Option agreements issued under the Plan, shall be governed
by, and construed in accordance with, the laws of the State of Florida.
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Dated as of July 29, 2010
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Puradyn Filter Technologies Incorporated
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/s/ Joseph
V. Vittoria
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By: Joseph
V. Vittoria
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Its:
Chairman and Chief Executive Officer
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7
AMENDMENT NO. 1 TO THE
PURADYN FILTER TECHNOLOGIES INCORPORATED
2010 STOCK OPTION PLAN
Pursuant to
the authority granted to the Board of Directors of Puradyn Filter Technologies
Incorporated (the “
Corporation
”) pursuant to Section 18 of the 2010 Stock
Option Plan (the “
Plan
”), by resolution of the Board of Directors on May 23,
2011 the number of shares reserved for issuance under the Plan was increased
from 2,000,000 shares to 4,000,000 shares. Accordingly, Section 3 of the Plan
is hereby deleted in its entirety and substituted with the following:
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3.
Amount of Stock
.
The aggregate number of shares of Stock which may be purchased pursuant to
the exercise of Options shall be 4,000,000 shares. Of this amount, the Board
or the Committee shall have the power and authority to designate whether any
Options so issued shall be ISOs or NSOs, subject to the restrictions on ISOs
contained elsewhere herein. If an Option ceases to be exercisable, in whole
or in part, the shares of Stock underlying such Option shall continue to be
available under this Plan. Further, if shares of Stock are delivered to the
Corporation as payment for shares of Stock purchased by the exercise of an
Option granted under this Plan, such shares of Stock shall also be available
under this Plan. If there is any change in the number of shares of Stock on
account of the declaration of stock dividends, recapitalization resulting in
stock split-ups, or combinations or exchanges of shares of Stock, or
otherwise, the number of shares of Stock available for purchase upon the
exercise of Options, the shares of Stock subject to any Option and the
exercise price of any outstanding Option shall be appropriately adjusted by
the Board or the Committee ; provided however that the Board or Committee
shall in its sole discretion determine whether such change requires an
adjustment in the aggregate number of shares reserved for issuance under the
Plan or to retain the number of shares reserved and available under the
Plan.. The Board or the Committee shall give notice of any adjustments to
each Eligible Person granted an Option under this Plan, and such adjustments
shall be effective and binding on all Eligible Persons. If because of one or
more recapitalizations, reorganizations or other corporate events, the holder
of outstanding Stock receive something other than shares of Stock then, upon
exercise of an Option, the Eligible Person will receive what the holder would
have owned if the holder had exercised the Option immediately before the
first such corporate event and not disposed of anything the holder received
as a result of the corporate event.
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Dated as of May 23, 2011
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Puradyn Filter Technologies Incorporated
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/s/ Joseph
V. Vittoria
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By: Joseph
V. Vittoria
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Its:
Chairman and Chief Executive Officer
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1
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