The Company adopted the Stock Option Plan ( Plan”), which was approved by the Company’s stockholders at the Company’s Annual Meeting of Stockholders on the “Annual Meeting”). The Plan authorizes the grant of options to officers and employees of the Company, including any employee who is also a member of the Board of Directors, as well as to consultants of the Company. The Plan authorizes an aggregate grant of NQSOs and ISOs, which includes a rollover of options remaining available for issuance under the Stock Option Plan. As a result of the approval of the Stock Option Plan, further options will be granted under the Stock Option Plan. In all other respects, the Stock Option Plan will remain in full force and effect with respect to all outstanding options granted under the Stock Option Plan, which stands at Consultants of the Company can only be granted NQSOs. The term of each stock option granted under the Plan shall be fixed by the Compensation and Stock Option Committee (“Compensation Committee”), but stock options will be exercisable more than years after the grant date, or in the case of an ISO granted to a stockholder, years after the grant date. The exercise price of any ISO granted under the Plan to an individual who is a stockholder at the time of the grant shall be less than the fair market value of the shares at the time of the grant, and the exercise price of any incentive stock option granted to a stockholder shall be less than of the fair market value at the time of grant. The exercise price of any NQSOs granted under the plan shall be less than the fair market value of the shares at the time of grant.

 

At the Annual Meeting, the Company’s shareholders also approved an amendment to the Outside Directors Stock Plan ( Plan”) which authorizes the issuance of an additional shares of the Company’s common stock under the plan. Immediately prior to the approval of this amendment by the Company’s shareholders, the Plan had available for issuance approximately shares.

 

On the Company’s appropriate committees of the Board and the Board approved the grant of incentive stock options (“ISOs”) from the Plan (which was approved by our stockholders as discussed above) to our named executive officers as follows: ISOs to our Chief Executive Officer (Louis F. Centofanti); ISOs to our EVP/COO (Mr. Mark Duff); and ISOs to our Chief Financial Officer (Mr. Ben Naccarato). The ISOs granted were for a contractual term of years with - yearly vesting over a year period. The exercise price of the ISO was per share, which was equal to the fair market value of the Company’s common stock on the date of grant.

 

Mr. Robert Ferguson (“Ferguson”) is a consultant to the Company’s Board of Directors (“Board”) and a consultant to the Company in connection with the Company’s Test Bed Initiative (“TBI”) at its PFNWR facility. For Ferguson’s consulting work with the Board, he has been receiving compensation of a month. For Ferguson’s consulting work in connection with the Company’s TBI, on “grant date”), the Compensation Committee and the Board granted Ferguson a stock option from the Company’s Plan (see above for a discussion of the Plan) for the purchase of up to shares of the Company’s common stock at an exercise price of a share, which was the fair market value of the Company’s common stock on the date of grant (“Ferguson Stock Option”). The exercise of the Ferguson Stock Option is subject to the achievement of the following milestones:

 

 

 

 

The term of the Ferguson Stock Option is () years from the grant date. Each of the milestones is exclusive of each other; therefore, achievement of any of the milestones above by Ferguson by the designated date will provide Ferguson the right to exercise the number of options in accordance with the milestone attained. The Company will account for this transaction in accordance with ASC - “Equity-Based Payments to Non-Employees.”