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Exhibit
10.2
OPTION AGREEMENT
THIS
OPTION AGREEMENT, effective as of May 5, 2008, by and between
LAPOLLA
INDUSTRIES, INC. a Delaware corporation (the
“Company”) and DOUGLAS J. KRAMER
(the “Executive”).
WHEREAS,
the Board of Directors of the Company previously authorized
and approved the Equity Incentive Plan, effective as of July
12, 2005 ("Plan"), which Plan was amended effective as of
January 16, 2007. The Plan provides for the grant
of Options to employees, directors and consultants of the
Company. Unless otherwise provided herein all
defined terms shall have the respective meanings ascribed to
them under the Plan;
WHEREAS,
Company and Executive previously entered into an Option
Agreement dated July 12, 2005, which Agreement was amended as
of July 28, 2005 (said Agreement and amendment are
collectively referred to as the “Prior
Agreement”);
WHEREAS,
Company and Executive have determined that it would be in the
best interests of Company and Executive to amend certain
provisions of the Prior Agreement as they relate to the
options that were granted to Executive to acquire 2,000,000
shares of the Company’s common stock, $.01 par value per
share, at any exercise price of $.67 per share
(“Existing Options”); and
WHEREAS,
the Company has determined that an option to acquire an
additional 2,000,000 shares of Company common stock, $.01 par
value per share should be granted to Executive, effective May
5, 2008.
NOW,
THEREFORE, in consideration of the respective agreements of
the parties contained herein, it is agreed as
follows:
A.
Grant and Terms of
New Options. Pursuant to authority granted to it
under the Plan, the Administrator of the Plan hereby grants to
Executive in his capacity as an employee of the Company
(“Optionee”), effective as of May 5, 2008 ("Grant
Date"), 2,000,000 options. Subject to the provisions below, each
Option permits Optionee to purchase one share of LaPolla
Industries, Inc. common stock, $.01 par value per share
("Shares").
1.
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.
2.
Exercise
Price . The Exercise Price for each Non-Qualified Stock
Option granted herein is the per Share closing price on May 5,
2008.
3.
Vesting.
The Options granted hereunder vest upon
satisfaction of the following criteria:
3.1 250,000
Options on the earlier of: (i) June 30, 2008, provided the
Company has net pre-tax income for the fiscal quarter ending
on that date, as indicated on its Form 10-Q filed with the
U.S. Securities and Exchange Commission (“Quarterly
Profit”); or (ii) the last day of the Company’s
first fiscal quarter ending after June 30, 2008 for which the
Company has Quarterly Profit, subject in all cases to
continued satisfactory employment through the vesting
date;
3.2 An
additional 250,000 options on the last day of each of the next
seven fiscal quarters for which Company has Quarterly Profit,
subject to continued satisfactory employment through the last
day of each such fiscal quarter.
4.
Exercisability.
Once vested, the options shall be exercisable, on
a cumulative basis, in accordance with the following schedule:
eight and one-third percent (8 1/3%) of the vested options
shall be exercisable twelve (12) months from the date of
vesting; sixteen and two-third percent (16 2/3%) of the vested
options shall be exercisable twenty-four (24) months from the
date of vesting; twenty-five percent (25%) of the vested
options shall be exercisable thirty-six (36) months from the
date of vesting; and one hundred percent (100%) of the vested
options shall be exercisable forty-eight (48) months from the
date of vesting.
5.
Term of
Options. All then existing and unexercised
Options, whether or not previously vested, shall expire on
December 31, 2013.
B.
Amendments to
Existing Options. Company and Optionee amend
Sections 4 and 5 of the Prior Agreement to provide, in full, as
follows:
“4.
Vesting and
Exercisability. All of the Options, whether
or not previously vested, shall be vested as of May 5,
2008. Once vested, the options shall be
exercisable, on a cumulative basis, in accordance with the
following schedule: eight and one-third percent (8 1/3%) of
the vested options shall be exercisable twelve (12) months
from the date of vesting; sixteen and two-third percent (16
2/3%) of the vested options shall be exercisable twenty-four
(24) months from the date of vesting; twenty-five percent
(25%) of the vested options shall be exercisable thirty-six
(36) months from the date of vesting; and one hundred percent
(100%) of the vested options shall be exercisable forty-eight
(48) months from the date of vesting.
5.
Term
of Options. All then existing and
unexercised Options, whether or not then vested, shall expire
on December 31, 2012.”
Except
as provided in Sections 4 and 5 above, the terms of the Prior
Agreement are the same as they were immediately prior to the
adoption of this Amendment. For ease of reference
purposes, Sections 6 through and including 13 of the Prior
Agreement are restated in their entirety in Section C
below.
C. Terms
Applicable to the New and the Existing Options.
1.
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
tender to the Company of shares of Stock 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, shall be equal to the exercise price of the
balance of shares of Stock
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