Filed Pursuant to Rule 424(b)(3)
File No. 333-199121
PROSPECTUS SUPPLEMENT NO. 5 DATED MAY 14, 2015 (TO PROSPECTUS DATED NOVEMBER 18, 2014) AS SUPPLEMENTED BY PROSPECTUS SUPPLEMENT NO. 1 DATED DECEMBER 17, 2014, PROSPECTUS SUPPLEMENT NO. 2 DATED FEBRUARY 11, 2015, PROSPECTUS SUPPLEMENT NO. 3 DATED MARCH 10, 2015 AND PROSPECTUS SUPPLEMENT NO. 4 DATED APRIL 7, 2015
APPLIED DNA SCIENCES, INC.
PROSPECTUS
$9,100,000 OF SHARES OF COMMON STOCK AND
WARRANTS TO PURCHASE SHARES OF COMMON STOCK
This Prospectus Supplement No.5 updates and supplements the prospectus of Applied DNA Sciences, Inc. (“the “Company”, “we”, “us”, or “our”) dated November 18, 2014 , as updated and supplemented by Prospectus Supplement No. 1 dated December 17, 2014, Prospectus Supplement No. 2 dated February 11, 2015, Prospectus Supplement No. 3 dated March 10, 2015, and Prospectus Supplement No. 4 dated April 7, 2015 (collectively, the “Prospectus”), with the following attached documents which we filed with the Securities and Exchange Commission:
A. | Our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015 filed with the Securities and Exchange Commission on May 11, 2015 |
B. | Our Definitive Proxy Statement for our 2015 Annual Meeting of Stockholders filed with the Securities and Exchange Commission on May 6, 2015 |
This Prospectus Supplement No. 5 should be read in conjunction with the Prospectus, which is required to be delivered with this Prospectus Supplement. This Prospectus Supplement updates, amends and supplements the information included in the Prospectus. If there is any inconsistency between the information in the Prospectus and this Prospectus Supplement, you should rely on the information in this Prospectus Supplement.
This Prospectus Supplement is not complete without, and may not be delivered or utilized except in connection with, the Prospectus, including any amendments or supplements to it.
The purchase of the securities offered through the Prospectus involves a high degree of risk. Before making any investment in our common stock and/or warrants, you should carefully consider the risk factors section beginning on page 8 of the Prospectus and the “Risk Factors” section in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on December 15, 2014, as amended on Form 10-K/A on March 6, 2015.
You should rely only on the information contained in the Prospectus, as supplemented or amended by this Prospectus Supplement No. 5 and any other prospectus supplement or amendment thereto. We have not authorized anyone to provide you with different information.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of the Prospectus and this Prospectus Supplement. Any representation to the contrary is a criminal offense.
The date of this Prospectus Supplement No. 5 is May 14, 2015
INDEX TO FILINGS
Annex | |
The Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015 filed with the Securities and Exchange Commission on May 11, 2015 | A |
The Company’s Definitive Proxy Statement for the 2015 Annual Meeting of Stockholders filed with the Securities and Exchange Commission on May 6, 2015 | B |
-i-
Annex A
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 59-2262718 |
(State or other jurisdiction of | (I.R.S. Employer |
incorporation or organization) | Identification No.) |
50 Health Sciences Drive | |
Stony Brook, New York | 11790 |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer☐ | Accelerated filer☒ |
Non-accelerated filer☐ | Smaller reporting company☐ |
(Do not check if a smaller reporting company) |
Page | |
1 | |
15 | |
23 | |
24 | |
25 | |
25 | |
25 | |
25 | |
25 | |
25 | |
26 |
March 31, 2015 | September 30, 2014 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 984,050 | $ | 1,393,132 | ||||
Accounts receivable, net of allowance of $11,257 and $9,634 at March 31, 2015 and September 30, 2014, respectively | 1,160,304 | 834,818 | ||||||
Prepaid expenses and other current assets | 155,593 | 135,365 | ||||||
Total current assets | 2,299,947 | 2,363,315 | ||||||
Property, plant and equipment, net of accumulated depreciation of $645,855 at March 31, 2015 and $759,087 at September 30, 2014 | 587,600 | 576,128 | ||||||
Other assets: | ||||||||
Deposits | 61,988 | 57,638 | ||||||
Deferred offering costs | 287,831 | 181,104 | ||||||
Intangible assets, net of accumulated amortization and impairment of $302,610 and $256,208 at March 31, 2015 and September 30, 2014, respectively | 389,470 | 327,872 | ||||||
Total Assets | $ | 3,626,836 | $ | 3,506,057 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued liabilities, including related party accrued interest of $6,597 at September 30, 2014 | $ | 1,443,665 | $ | 1,494,759 | ||||
Promissory notes payable, including $1,000,000 with a related party | — | 1,800,000 | ||||||
Deferred revenue | 227,810 | 583,362 | ||||||
Total current liabilities | 1,671,475 | 3,878,121 | ||||||
Warrant liability | — | 1,096,412 | ||||||
Total liabilities | 1,671,475 | 4,974,533 | ||||||
Commitments and contingencies (Note I) | ||||||||
Stockholders’ Equity (Deficit) | ||||||||
Preferred stock, par value $0.001 per share; 10,000,000 shares authorized; -0- shares issued and outstanding as of March 31, 2015 and September 30, 2014 | — | — | ||||||
Series A Preferred stock, par value $0.001 per share, 10,000,000 shares authorized; -0- issued and outstanding as of March 31, 2015 and September 30, 2014 | — | — | ||||||
Series B Preferred stock, par value $0.001 per share, 10,000,000 shares authorized; -0- issued and outstanding as of March 31, 2015 and September 30, 2014 | — | — | ||||||
Common stock, par value $0.001 per share; 500,000,000 and 1,350,000,000 shares authorized; 17,369,202 and 13,935,954 shares issued and outstanding as of March 31, 2015 and September 30, 2014, respectively | 17,370 | 13,937 | ||||||
Additional paid in capital | 211,412,483 | 198,277,859 | ||||||
Accumulated deficit | (209,474,492 | ) | (199,760,272 | ) | ||||
Total stockholders’ equity (deficit) | 1,955,361 | (1,468,476 | ) | |||||
Total Liabilities and Stockholders’ Equity (Deficit) | $ | 3,626,836 | $ | 3,506,057 |
1 |
Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Revenues | $ | 1,518,761 | $ | 637,146 | $ | 2,760,563 | $ | 1,234,500 | ||||||||
Operating expenses: | ||||||||||||||||
Selling, general and administrative | 2,901,207 | 3,297,739 | 7,569,950 | 7,143,317 | ||||||||||||
Research and development | 373,380 | 359,782 | 651,652 | 819,086 | ||||||||||||
Depreciation and amortization | 123,079 | 106,810 | 232,805 | 212,025 | ||||||||||||
Total operating expenses | 3,397,666 | 3,764,331 | 8,454,407 | 8,174,428 | ||||||||||||
LOSS FROM OPERATIONS | (1,878,905 | ) | (3,127,185 | ) | (5,693,844 | ) | (6,939,928 | ) | ||||||||
Other income (expense): | ||||||||||||||||
Interest income (expense), net | 16 | 239 | (31,859 | ) | 673 | |||||||||||
Other (expense) income, net | (6,693 | ) | (79,389 | ) | (13,135 | ) | 76,028 | |||||||||
Loss on conversion of promissory notes | — | — | (980,842 | ) | — | |||||||||||
Gain (loss) on change in fair value of warrant liability | — | 455,899 | (2,994,540 | ) | (2,178,859 | ) | ||||||||||
Net loss before provision for income taxes | (1,885,582 | ) | (2,750,436 | ) | (9,714,220 | ) | (9,042,086 | ) | ||||||||
Provision for income taxes | — | — | — | — | ||||||||||||
NET LOSS | $ | (1,885,582 | ) | $ | (2,750,436 | ) | $ | (9,714,220 | ) | $ | (9,042,086 | ) | ||||
Net loss per share-basic and diluted | $ | (0.11 | ) | $ | (0.20 | ) | $ | (0.59 | ) | $ | (0.68 | ) | ||||
Weighted average shares outstanding- | ||||||||||||||||
Basic and diluted | 17,362,573 | 13,470,806 | 16,404,299 | 13,316,179 |
2 |
Six Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (9,714,220 | ) | $ | (9,042,086 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 232,805 | 212,025 | ||||||
Stock based compensation expense | 2,515,843 | 1,313,331 | ||||||
Change in fair value of warrant liability | 2,994,540 | 2,178,859 | ||||||
Loss on conversion of promissory notes | 980,842 | — | ||||||
Common stock issued for consulting services | 22,676 | 337,500 | ||||||
Bad debt expense | 2,779 | 16,144 | ||||||
Change in operating assets and liabilities: | ||||||||
Accounts receivable | (328,265 | ) | 50,499 | |||||
Prepaid expenses and other current assets and deposits | (24,578 | ) | 59,134 | |||||
Accounts payable and accrued liabilities | (298,577 | ) | 344,572 | |||||
Deferred revenue | (355,552 | ) | 267,486 | |||||
Net cash used in operating activities | (3,971,707 | ) | (4,262,536 | ) | ||||
Cash flows used in investing activities: | ||||||||
Purchase of property plant and equipment | (197,875 | ) | (109,581 | ) | ||||
Purchase of intangible assets | (35,000 | ) | — | |||||
Net cash used in investing activities | (232,875 | ) | (109,581 | ) | ||||
Cash flows from financing activities: | ||||||||
Net proceeds from sale of common stock and warrants | 7,956,050 | — | ||||||
Offering costs paid | (69,598 | ) | — | |||||
Purchase and cancelation of previously issued warrants | (4,090,952 | ) | — | |||||
Net cash provided by financing activities | 3,795,500 | — | ||||||
Net decrease in cash and cash equivalents | (409,082) | (4,372,117 | ) | |||||
Cash and cash equivalents at beginning of period | 1,393,132 | 6,360,301 | ||||||
Cash and cash equivalents at end of period | $ | 984,050 | $ | 1,988,184 | ||||
Supplemental Disclosures of Cash Flow Information: | ||||||||
Cash paid during period for interest | $ | — | $ | — | ||||
Cash paid during period for taxes | $ | — | $ | — | ||||
Non-cash investing and financing activities: | ||||||||
Common stock issued for cashless exercise of options and warrants | $ | — | $ | 19,570 | ||||
Reclassification of deferred offering costs to additional paid in capital | $ | 181,104 | $ | — | ||||
Offering costs incurred, and included in accounts payable and accrued liabilities | $ | 218,233 | $ | — | ||||
Property, plant and equipment acquired, and included in accounts payable | $ | — | $ | 7,794 | ||||
Intangible assets acquired, and included in accounts payable | $ | 73,000 | $ | — | ||||
Common stock issued upon conversion of promissory notes payable | $ | 1,843,750 | $ | — |
3 |
On September 16, 2002, Applied DNA Sciences, Inc. (the “Company”) was incorporated under the laws of the State of Nevada. Effective December 17, 2008, the Company reincorporated from the State of Nevada to the State of Delaware. The Company is principally devoted to developing DNA embedded biotechnology security solutions in the United States and Europe. To date, the Company has had a limited operating history, and as a result, its operations have produced limited recurring revenues from its services and products; it has incurred expenses and has sustained losses. Consequently, its operations are subject to all the risks inherent in the establishment of a biotechnology company. For the period from inception through March 31, 2015, the Company has accumulated losses of $209,474,492.
4 |
APPLIED DNA SCIENCES, INC.
NOTE A — SUMMARY OF ACCOUNTING POLICIES (continued)
5 |
APPLIED DNA SCIENCES, INC.
NOTE A — SUMMARY OF ACCOUNTING POLICIES (continued)
2015 | 2014 | |||||||
Warrants | 4,453,835 | 617,302 | ||||||
Employee options | 3,808,894 | 3,208,083 | ||||||
8,262,729 | 3,825,385 |
6 |
NOTE A — SUMMARY OF ACCOUNTING POLICIES (continued)
7 |
March 31, 2015 (unaudited) | September 30, 2014 | |||||||
Accounts payable | $ | 997,676 | $ | 1,059,623 | ||||
Accrued consulting fees | 102,500 | 102,500 | ||||||
Accrued salaries payable | 265,484 | 245,761 | ||||||
Accrued interest payable | — | 11,875 | ||||||
Other accrued expenses | 78,005 | 75,000 | ||||||
Total | $ | 1,443,665 | $ | 1,494,759 |
8 |
9 |
Number of Shares | Weighted Average Exercise Price Per Share | |||||||
Balance at October 1, 2014 | 945,166 | $ | 9.59 | |||||
Granted | 3,912,958 | 3.51 | ||||||
Exercised | (— | ) | (— | ) | ||||
Cancelled or expired | (404,289 | ) | (13.66 | ) | ||||
Balance at March 31, 2015 | 4,453,835 | $ | 3.88 |
10 |
APPLIED DNA SCIENCES, INC.
Number of Shares | Weighted Average Exercise Price Per Share | Aggregate Intrinsic Value | |||||||||
Outstanding at October 1, 2014 | 2,909,046 | $ | 4.74 | ||||||||
Granted | 900,509 | 2.86 | |||||||||
Exercised | — | — | |||||||||
Cancelled or expired | (661 | ) | (9.77 | ) | |||||||
Outstanding at March 31, 2015 | 3,808,894 | $ | 4.30 | ||||||||
Vested at March 31, 2015 | 2,852,150 | $ | 3.99 | $ | 0.44 | ||||||
Non-vested at March 31, 2015 | 956,744 | $ | 0.19 |
11 |
Three Months Ended March31, 2015 | Six Months Ended March 31, 2015 | |||||||
Stock price | $ | 3.42 | $ | 2.86 | ||||
Exercise price | $ | 3.42 | $ | 2.86 | ||||
Expected term, years | 6.12 | 4.91 | ||||||
Dividend yield | — | % | — | % | ||||
Volatility | 139 | % | 132 | % | ||||
Risk free rate | 1.69 | % | 1.59 | % |
12 |
13 |
Fair Value Measurements of Common Stock Warrants Using Significant Unobservable Inputs (Level 3) | Six Months Ended March 31, | |||||||
2015 | 2014 | |||||||
Balance at October 1, 2014 and 2013 | $ | 1,096,412 | $ | 2,643,449 | ||||
Adjustment resulting from change in fair value (a) | 2,994,540 | 2,178,859 | ||||||
Removal of warrant upon repurchase | (4,090,952 | ) | — | |||||
Reclassification to equity upon exercise | — | (2,455,042 | ) | |||||
Balance at March 31, | $ | — | $ | 2,367,266 |
14 |
● | discuss our future expectations; |
● | contain projections of our future results of operations or of our financial condition; and |
● | state other “forward-looking” information. |
15 |
The secure cloud application also offers back-end features including DNA custody management, forensic sample submission, CODA (certificate of DNA authentication) issuance, customer account administration, order placement, status tracking and reporting, and online training. The cloud-based platform is designed to be customizable for the particular attributes of each customer’s business and conforms to strict security standards for ISO, PCI, and Federal Information Processing Standards. This digitalDNA platform is designed as the data management and reporting hub for our recently announced devices for DNA on-site authentication and optical mark in-field validation. Market-specific configurations have been demonstrated to businesses in textiles supply chain, printing/publishing, art and collectibles and law enforcement.
16 |
● | Revenue recognition; |
● | Equity based compensation. |
● | Fair value of financial instruments |
17 |
18 |
19 |
20 |
21 |
22 |
23 |
24 |
25 |
4.1 | First Amendment to Warrant Agreement dated April 1, 2015 between Applied DNA Sciences, Inc. and American Stock Transfer & Trust Company, LLC as warrant agent filed as exhibit 4.1 to the current report on Form 8-K filed with the Commission on April 1, 2015 and incorporated herein by reference. |
10.1*# | Mutual License Agreement dated March 25, 2015 between Applied DNA Sciences, Inc. and Divatex Home Fashion, Inc. |
10.2 | Form of Underwriter’s Warrant filed as exhibit 4.1 to the current report on Form 8-K filed with the Commission on March 27, 2015 and incorporated herein by reference. |
31.1* | Certification of Chief Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended |
31.2* | Certification of Chief Financial Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended |
32.1** | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer) |
32.2** | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer) |
101 INS* | XBRL Instance Document |
101 SCH* | XBRL Taxonomy Extension Schema Document |
101 CAL* | XBRL Taxonomy Extension Calculation Linkbase Document |
101 LAB* | XBRL Extension Label Linkbase Document |
101 PRE* | XBRL Taxonomy Extension Presentation Linkbase Document |
26 |
Applied DNA Sciences, Inc. | ||
Dated: May 11, 2015 | /s/ JAMES A. HAYWARD, Ph. D. | |
James A. Hayward, Ph. D. | ||
Chief Executive Officer | ||
(Duly authorized officer and principal executive officer) | ||
/s/ BETH JANTZEN | ||
Beth Jantzen, CPA | ||
Chief Financial Officer | ||
(Duly authorized officer and | ||
principal financial and accounting officer) |
27 |
Confidential materials omitted and filed separately with the Securities and Exchange Commission. Asterisks (***) denote omissions.
MUTUAL LICENSE AGREEMENT
MUTUAL LICENSE AGREEMENT (“Agreement”), dated as of March 25, 2015 (the “Effective Date”), by and between Divatex Home Fashion, Inc., a New York corporation with a place of business at 261 Fifth Avenue, Suite 501, New York, NY 10016 (“DHF”), and Applied DNA Sciences, Inc., a Delaware corporation, having an address at 50 Health Sciences Drive, Stony Brook, NY 11790 (“ADNAS”; and together with DHF, the “Parties”).
WITNESSETH:
WHEREAS, ADNAS has developed patented technologies (the “Technologies”) for the tagging of raw cotton fiber at source called SigNature® T; and
WHEREAS, DHF designs, manufactures, sources, and distributes home textile fabrics including bedding, bath and accessories. DHF has filed applications with the U.S. Patent and Trademark Office (“USPTO”) to register the following trademarks: “PimaCott”, “GizaCott” and “AmeriCott” (collectively, the “Trademarks”) for the branding and marketing of tagged cotton fiber; and
WHEREAS, the Parties contemplate entering into an agreement with commodity merchant(s) pursuant to which the merchant will be given a license to collect a tagging fee for each pound of SigNature® T tagged cotton from the cotton gins and sell the tagged cotton fibers to customers.
NOW, THEREFORE, the Parties hereto agree as follows:
ARTICLE I
GENERAL PROVISIONS
1.1 Term of the Agreement. The initial term of this Agreement shall be two (2) years, which shall automatically renew for additional one (1) year periods, unless the Agreement is mutually terminated pursuant to Section 7.1 below. (The initial term and any renewal terms shall collectively be referred to as the “Term”). If the cumulative sales for tagged cotton do not result in total sales of 45 million pounds within two (2) years, the Agreement can be terminated at the option of ADNAS.
1.2 Limitations on Liability.
(a) Neither of the Parties shall have any power to bind the other Party except as specifically provided in this Agreement.
Confidential Treatment Requested
(b) Except as otherwise provided herein, neither Party shall be responsible or liable for any indebtedness, obligation or liability of the other Party, whether incurred before or after the Effective Date of this Agreement. In the event that either Party becomes liable for any indebtedness or obligation of the other Party in contravention of the provisions of this provision, such Party shall be indemnified by the other Party pursuant to Article VI hereof.
(c) The terms and conditions of this Agreement are intended for the exclusive benefit of each Party and no third party shall be entitled to any benefit therefrom nor may any third party in any way rely upon either Party, its assets, or any of its officers, directors, employees or agents, none of whom shall have any apparent authority to bind the other Party except in the manner expressly provided herein.
ARTICLE II
RIGHTS AND DUTIES OF THE PARTIES
2.1 Contributions by the Parties.
(a) ADNAS will grant the DHF an exclusive worldwide license to use the SigNature® T technology for application in raw cotton fiber for the Term. Upon any expiration or termination of this Agreement, the grant shall expire immediately and DHF shall have no further right to use the SigNature® T technology for application in raw cotton fiber.
(b) DHF will grant ADNAS an exclusive, worldwide license to use the trademarks, “PimaCott”, “GizaCott” and “AmeriCott” for the Term. Upon any expiration or termination of this Agreement, the grant shall expire immediately and ADNAS shall have no further right to use the "PimaCott", "GizaCott" and "AmeriCott" trademarks.
2.2 Management.
DHF will be solely responsible for the following marketing and operational procedures. The Parties shall jointly determine protocols for chain of custody assurance. ADNAS agrees to provide DHF reasonable technical assistance relating to the use the SigNature® T technology for application in raw cotton fiber in DHF’s marketing efforts.
2.3 Business Plan. The Parties will agree on a business plan. DHF will use best efforts to achieve the goals set forth in such business plan which will include the sale of (a) of fifty (50) million pounds of raw cotton in the first year of the Agreement and (b) one hundred (100) million pounds of raw cotton in the second year of the Agreement.
ARTICLE III
FINANCIAL MATTERS
3.1 Expenses, Profits and Losses.
(a) DHF will be solely responsible for the marketing of the tagged cotton using Signature® T under the Trademarks to businesses that use cotton in the production and distribution of cotton goods. DHF will be responsible for its own travel expenses
2 |
Confidential Treatment Requested
(b) ADNAS will be solely responsible for the application of the tagging technology, DNA-related marketing materials and labor, and a predetermined amount per year of QC testing and authentication through the supply chain. ADNAS will work directly with merchant(s) for delivery and installation of SigNature® T technology transfer equipment at the designated gins. ADNAS will be responsible for its own travel expenses related specifically to training and installation of such equipment.
(c) The parties will reach an agreement of the cost for marketing and application of the Technology set forth in subparagraphs (a) and (b) above. DHF will be responsible for costs of subparagraph (a) and ADNAS will be responsible for the costs set forth in subparagraph (b) (collectively the “Agreed Costs”). The Agreed Costs will be as set forth in the Revenue Sharing Model attached hereto as Schedule A. The Parties will reach an agreement on any other costs that may occur that are not included in subparagraphs (a) or (b) above.
(d) ADNAS will collect the tagging fee from the merchant. Each party shall be entitled to be reimbursed therefrom for their respective Agreed Costs. The balance of the tagging fee shall be divided equally between the parties, except for the first hundred million pounds of cotton tagged, the fee will be distributed as set forth in Schedule A.
(e) DHF shall report to ADNAS with respect the Agreed Costs it has incurred as such are incurred.
(f) ADNAS will provide a quarterly statement to DHF, within ten (10) business days of the end of each calendar quarter, with respect to tagging fees collected for the previous quarter and shall pay to DHF with the report, its share of the tagging fee.
3.2 Books and Records; Audit Rights.
(a) Books and Records. Each Party shall keep adequate books and records at its place of business, setting forth a true and accurate account of all business transactions arising out of and in connection with this Agreement.
(b) Audit Rights. During the Term and for one (1) year thereafter, each Party shall have the right, at its own expense, upon five (5) business days' prior written notice through its representatives including its auditors, to examine and/or audit, and make copies and extracts from the other Party's books and records during regular business hours.
(c) Discrepancy. In the event that such inspection reveals an underpayment by ADNAS, then DHF shall promptly provide ADNAS a copy thereof and ADNAS shall within thirty (30) days of receipt of such report, remit payment to DHF in the amount of the underpayment; provided, however, that ADNAS shall have thirty (30) days from receipt of any audit report to respond with documentation reasonably refuting any claim contained therein. ADNAS shall pay any undisputed claims as set forth above. If no such documentation is provided or documentation is provided but DHF disagrees that such documentation warrants a reduction in the amount claimed by DHF to be due, then DHF shall thereafter be free to pursue its remedies under the Agreement related to non-payment. In the event that such discrepancy is greater than ten percent (10%) of monies owed to DHF, then ADNAS shall bear all reasonable expenses related to such inspection, including reasonable attorney's fees if applicable.
3 |
Confidential Treatment Requested
3.3 Insurance Each Party shall acquire and maintain at its sole cost and expense during the Term and for a period of six (6) years following the termination of this Agreement, comprehensive general liability Insurance, including product liability and contractual liability, underwritten by an insurance company with a Best’s rating of at least A-/XII. This insurance coverage shall provide protection of not less than $2,000,000 combined single limit for personal injury and property damage (on a per occurrence basis) and a deductible not to exceed ten percent (10%) of the required policy limits. All insurance policies shall name the other Party and its parents, subsidiaries and related companies and the respective owners, officers, directors, agents and employees of each of them as additional insureds. Each Party shall furnish the other Party with endorsements from insurance carriers reflecting compliance with the foregoing obligations within thirty (30) days after execution of this Agreement. Each Party’s insurance will be primary and not excess or contributory with respect to any insurance that the other Party may maintain.
4 Intellectual Property. DHF shall own all trademarks and domain names developed in the course of this Agreement. and agrees to grant and hereby grants ADNAS the worldwide, non-exclusive right and license to use such trademarks and domain names relating to the goods and services provided hereunder. In the event that DHF elects not to renew a trademark registration or domain name licensed pursuant to this Section, DHF shall notify ADNAS at least sixty (60) days prior to such renewal/expiration date and, upon ADNAS’ request, agrees to transfer such trademark registration or domain name registration to ADNAS.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES: COVENANTS
5.1 Each of the Parties represents and warrants to the other that:
(a) It is a corporation, duly formed, validly existing and in good standing under the laws of the state of its formation. The execution, delivery and performance by it of this Agreement are within its corporate power and authority and have been duly authorized by all necessary corporate action.
(b) This Agreement is its valid and binding obligation enforceable against each Party in accordance with its terms except that such enforcement may be subject to bankruptcy, insolvency, reorganization moratorium or similar laws now or hereafter in effect, or legal or equitable principles relating to or limiting creditors’ rights.
ARTICLE V
INDEMNIFICATION/CONTRIBUTION
6.1 Contribution/Indemnification.
(a) Indemnification:
i. DHF agrees to indemnify and hold ADNAS harmless with respect to any third party claims arising out of (a) the marketing and use of the Trademarks except for any ADNAS claims with respect to the efficacy of the Technology, or (b) or any claim asserting that the use of the Trademarks as contemplated herein infringes on or violates the rights of such third party.
4 |
Confidential Treatment Requested
ii. ADNAS agrees to indemnify and hold DHF harmless with respect to any third party claims arising out of the any claim that the application of the SigNature®T technology infringes on or violates the rights of such third party or that SigNature®T technology does not meet ADNAS claims with respect to efficacy.
iii. In the event that any claim for indemnification hereunder arises, the party seeking such indemnification shall promptly notify the other party in writing. Such other party shall thereupon be obligated, at the option of the party seeking indemnification, to retain and pay for counsel to defend such claim, the choice of such counsel being subject to the approval of the party entitled to indemnification, but which approval shall not be unreasonably be withheld. The parties shall further use good faith efforts to keep the costs of such indemnification, including defense cost, to a reasonable minimum as may be commercially reasonable under the circumstances. In the event that that the party entitled to indemnification does not seek defense, such party shall be entitled to have its own counsel participate in the defense of such claim at its costs and expense.
iv. The indemnification provisions herein shall also extend to the officers, employees, agents, attorneys or other persons acting on behalf of the parties.
v. No settlement of a claim shall be entered into without the consent of the party providing the indemnification, which consent shall not be unreasonably withheld.
vi. Neither party shall be entitled to indemnification for any claim that is based on the conduct of that party.
ARTICLE VI
TERMINATION
7.1 Event of Termination. Either party may terminate this Agreement upon the happening of any of the following events:
(a) An event of Bankruptcy or Insolvency of either of the Parties.
(b) Mutual written agreement of the Parties with sixty (60) days prior written notice.
(c) At ADNAS’s option if DHF does not complete the cumulative sale of 45 million pounds of DNA-marked cotton by the 2-year anniversary of this agreement as per Paragraph 1.1.
5 |
Confidential Treatment Requested
(d) A material breach by one Party of its obligations hereunder which has not been cured within thirty (30) days after written notice thereof has been received by the other Party.
ARTICLE VII
MISCELLANEOUS PROVISIONS
8.1 Confidential Information. In the course of the performance of this Agreement, the one party (“Disclosing Party”) may furnish the other party (“Receiving Party”) with confidential and proprietary information and trade secrets including any business and technical information, know-how and trade secrets (whether written, graphic or oral) related to their and their subsidiaries’ current, future and proposed products, including, but not limited to, research and development programs, improvements, methods, procedures, discoveries, patents, patent applications, inventions, processes, chemical formulae, marker compounds, DNA sequences, technology, designs, models, drawings, product plans, products, services, customers, customer lists, strategies, studies, business plans, forecasts, market information, marketing plans, techniques, engineering, testing systems, hardware configuration information, computer software and programs (including source code and related documentation), test and/or experimental data and results, laboratory notebooks, marketing, finances or other business information (collectively, “Confidential Information”). Confidential Information also includes confidential information of third parties that is observed, identified or disclosed under or as a result of this Agreement. The Receiving Party will not disclose the Confidential Information, must immediately return it upon expiration or termination of this Agreement, and must keep it in strict confidence and not use it for any purpose other than the Parties’ respective performance under this Agreement. The Receiving Party may disclose Discloser’s Confidential Information to its Affiliates, employees, officers, directors, partners, representatives, third-party service providers or contractors or other persons designated by a party to act or perform on its behalf on a “need to know” basis only, provided that each is bound by obligations of confidentiality and restrictions against disclosure at least as restrictive as those contain herein. The Disclosing Party will use reasonable efforts to mark or cause to be marked all materials containing its Confidential Information to clearly indicate ownership of the materials and their confidential status; however, failure to mark does not by itself disqualify information from being Confidential Information if other factors or circumstances, or a Party’s course of performance, clearly indicate to the Receiving Party at the time of disclosure or the Receiving Party acknowledges that the information is confidential. The Receiving Party recognizes that the Confidential Information of the Disclosing Party (1) was designed and developed by the Disclosing Party at great expense and over lengthy periods of time; (2) is secret, confidential and unique; (3) constitutes the exclusive property and/or trade secrets of the Disclosing Party; and (4) that any use of the Confidential Information by the Receiving Party for any purpose other than in accordance with this Agreement and in furtherance of obligations hereunder would be wrongful and would cause irreparable injury to the Disclosing Party for which damages are not an adequate remedy. The restrictions and obligations in this Section concerning confidentiality will survive the expiration or termination of this Agreement for a period of three (3) years. The obligations of the Parties herein will not apply to information which: (i) was known to the Receiving Party prior to receipt thereof from the Disclosing Party, as evidenced by the written records of the Receiving Party; (ii) was disclosed to the Receiving Party in good faith by a third party who is in lawful possession of and who had the right to make such disclosures; (iii) became part of the public domain, by publication or otherwise, through no fault of the Receiving Party; or, (iv) was independently developed by the Receiving Party as evidenced by the Receiving Party's written records. Each Party understands and agrees that, in the event that it violates any of the Confidentiality provisions of this paragraph 8.1, the other Party will suffer immediate and irreparable harm that cannot be accurately calculated in monetary damages. Consequently, notwithstanding anything to the contrary in this Agreement, the violating Party acknowledges and agrees that the other Party shall be entitled to immediate injunctive relief, either by temporary or permanent injunction, to prevent such a violation. The violating Party acknowledges and agrees that this injunctive relief shall be in addition to any other legal or equitable relief to which the other Party would be entitled.
6 |
Confidential Treatment Requested
8.2 Validity. In the event that any provision of this Agreement shall be held to be invalid, the same shall not affect in any respect whatsoever the validity of the remainder of this Agreement.
8.3 Integrated Agreement. This Agreement constitutes the entire understanding and agreement among the Parties with respect to the subject matter hereof and there are no agreements, understandings, restrictions or warranties among the parties.
8.4 Headings. The headings, titles and subtitles used in this Agreement are for ease of reference only and shall not control or affect the meaning or construction of any provision hereof.
8.5 Notices. Except as may be otherwise specifically provided in this Agreement, all notices required or permitted here under shall be in writing and shall be deemed to be delivered when deposited in the United States mail, postage prepaid, certified or registered mail, return receipt requested, addressed to the Parties at their respective addresses set forth in this Agreement, and addressed to the person signing this agreement on behalf of such Party. With respect to DHF, a copy of any notice shall be sent to its counsel, Paul H. Aloe, Esq., Kudman Trachten Aloe LLP, 350 Fifth Avenue, Suite 4400, New York, New York 10118 in the manner set forth above or by electronic mail to paloe@kudmanlaw.com. Either Party may change the address to which notices are to be sent, or the person to whose attention they are to be directed, by a written notice in accordance with this paragraph.
8.6 Arbitration of Disputes.Any controversy, dispute between the Parties or claim arising out of or relating to this contract, or the breach thereof, if it cannot be resolved by the Parties, shall be settled by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.
8.7 Applicable Law and Venue. This Agreement shall be construed in accordance with the laws of the State of New York without regard to any provisions of conflicts of laws. Exception arbitration as set forth above, the New York State Supreme Court, County of New York, or the United States District Court for the Southern District of New York shall have exclusive jurisdiction to adjudicate any action arising in connection with this Agreement and each party hereby consents to such jurisdiction.
7 |
Confidential Treatment Requested
8.8 Assignment. Neither Party hereto shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other Party hereto, and any such attempted assignment without the prior written consent of the other Party shall be void and of no force or effect; provided, however, that either Party may assign this Agreement or any of its rights and obligations hereunder to a related corporate entity (provided that it also assigns its rights in the Trademarks or SigNature® T to such entity). This Agreement will be binding upon the Parties’ respective assigns.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year first above written.
Divatex Home Fashion, Inc. | Applied DNA Sciences, Inc. | ||||
By: | /s/ David Greenstein | By: | /s/ James A. Hayward | ||
David Greenstein | James A. Hayward | ||||
Chief Executive Officer | Chief Executive Officer |
8 |
Confidential Treatment Requested
SCHEDULE A
ADNAS-DIVATEX REVENUE SHARING MODEL
This revenue sharing model assumes:
1. ADNAS DNA costs per lb of cotton marked
o | Includes |
§ | Marking materials and labor |
§ | QC testing |
§ | Authentication through the supply chain |
o | Excludes |
§ | Design customization and installation of marking equipment |
§ | Travel expenses |
2. Divatex marketing costs per lb of cotton marked exclude travel expenses
3. ADNAS-Divatex shared revenue (***) on remainder assuming a selling price of $*** per lb
Revenue-sharing per lb per year:
Lbs of cotton DNA-marked per year | ADNAS DIRECT
(estimated) $ per lb (1) | DIVATEX DIRECT (estimated)$ (2) | ADNAS-DIVATEX SHARED $ per lb Assume $*** per lb (3) | ADNAS TOTAL Revenue $ per lb | DIVATEX TOTAL Revenue $ per lb |
*** to *** | $*** | $*** | $*** | $*** | $*** |
*** to *** | $*** | $*** | $*** | $*** | $*** |
*** to *** | $*** | $*** | $*** | $*** | $*** |
>*** | $*** | $*** | $*** | $*** | $*** |
1. | I have reviewed this quarterly report on Form 10-Q of Applied DNA Sciences, Inc.; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and | |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): | |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. | |
Dated: May 11, 2015 |
By: | /s/ JAMES A. HAYWARD | |
James A. Hayward | ||
Chief Executive Officer | ||
Applied DNA Sciences, Inc. |
1. | I have reviewed this quarterly report on Form 10-Q of Applied DNA Sciences, Inc.; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and | |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): | |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. | |
Dated: May 11, 2015 |
By: | /s/ BETH JANTZEN | |
Beth Jantzen, CPA | ||
Chief Financial Officer | ||
Applied DNA Sciences, Inc. |
● | the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and |
● | the information in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /s/ JAMES A. HAYWARD | |
James A. Hayward | ||
Chief Executive Officer | ||
Applied DNA Sciences, Inc. | ||
Dated: May 11, 2015 |
● | the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and |
● | the information in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /s/ BETH JANTZEN | |
Beth Jantzen, CPA | ||
Chief Financial Officer | ||
Applied DNA Sciences, Inc. | ||
Dated: May 11, 2015 |
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
the Securities Exchange Act of 1934
☐ | Preliminary Proxy Statement |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
☒ | Definitive Proxy Statement |
☐ | Definitive Additional Materials |
☐ | Soliciting Material Pursuant to §240.14a-12 |
(Name of Registrant as Specified In Its Charter)
☒ | No fee required. | |
☐ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | |
1) | Title of each class of securities to which transaction applies: | |
2) | Aggregate number of securities to which transaction applies: | |
3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | |
4) | Proposed maximum aggregate value of transaction: | |
5) | Total fee paid: | |
☐ | Fee paid previously with preliminary materials. | |
☐ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |
1) | Amount Previously Paid: | |
2) | Form, Schedule or Registration Statement No.: | |
3) | Filing Party: | |
4) | Date Filed: | |
50 HEALTH SCIENCES DRIVE
STONY BROOK, NEW YORK 11790
(631) 240-8800
May 6, 2015
Very truly yours, | ||
/s/ James A. Hayward | ||
James A. Hayward | ||
Chairman, President | ||
and Chief Executive Officer |
for the Annual Meeting of Stockholders
To Be Held on June 16, 2015
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS |
● | to elect six directors, constituting the entire Board of Directors, to serve for the ensuing year; |
● | to approve an amendment to our 2005 Incentive Stock Plan to increase the number of shares of our common stock that can be issued pursuant thereto to 8,333,333 and to extend the expiration date thereof to January 25, 2025; |
● | to ratify the appointment of Marcum LLP as our independent registered public accounting firm for the fiscal year ending September 30, 2015; and |
● | to consider and act upon such other matters as may properly come before the meeting or any postponement or adjournment of the meeting. |
Stony Brook, New York May 6, 2015 | Dr. Ming-Hwa Benjamin Liang Secretary |
50 HEALTH SCIENCES DRIVE
STONY BROOK, NEW YORK 11790
PROXY STATEMENT |
● | View our proxy materials for the Annual Meeting on the internet; and |
● | Instruct us to send our future proxy materials to you electronically by email. |
1 |
2 |
● | Non-Discretionary Items. The election of directors and the approval of an amendment to our 2005 Incentive Stock Plan to increase the number of shares of our common stock that can be issued pursuant thereto to 8,333,333 and to extend the expiration date thereof to January 25, 2025 are non-discretionary items and may not be voted on by brokers, banks or other nominees who have not received specific voting instructions from beneficial owners. |
● | Discretionary Items. The ratification of the appointment of Marcum LLP as our independent registered public accounting firm for the fiscal year ending September 30, 2015 is a discretionary item. Generally, brokers, banks and other nominees that do not receive voting instructions from beneficial owners may vote on this proposal in their discretion. |
3 |
● | to approve Proposal No. 1, for election of the nominated slate of six directors to serve for the ensuing year; |
● | to approve Proposal No. 2, for the approval of an amendment to our 2005 Incentive Stock Plan to increase the number of shares of our common stock that can be issued pursuant thereto to 8,333,333 and to extend the expiration date thereof to January 25, 2025; and |
● | to approve Proposal No. 3, for ratification of the appointment of Marcum LLP as our independent registered public accounting firm for the fiscal year ending September 30, 2015. |
4 |
5 |
ELECTION OF DIRECTORS
Director | Age | Year First Became Director | Principal Occupation During the Past Five Years | |||
James A. Hayward, Ph.D., Sc.D. | 61 | 2005 | Dr. James A. Hayward has been our Chief Executive Officer since March 17, 2006 and our President and the Chairman of the Board of Directors since June 12, 2007. He was previously our acting Chief Executive Officer since October 5, 2005. He also served as Acting Chief Financial Officer from August 20, 2013 through October 13, 2013. Dr. Hayward received his Ph.D. in Molecular Biology from the State University of New York at Stony Brook in 1983 and an honorary Doctor of Science from the same institution in 2000. His experience with public companies began with the co-founding of one of England’s first biotechnology companies—Biocompatibles. Following this, Dr. Hayward was Head of Product Development for the Estee Lauder companies for five years. In 1990 he founded The Collaborative Group, a provider of products and services to the biotechnology, pharmaceutical and consumer-product industries based in Stony Brook, where he served as Chairman, President and Chief Executive Officer for 14 years. During this period, The Collaborative Group created several businesses, including The Collaborative BioAlliance, a contract developer and manufacturer of human gene products, that was sold to Dow Chemical in 2002, and Collaborative Labs, a service provider and manufacturer of ingredients for skincare and dermatology that was sold to Engelhard (now BASF) in 2004. Dr. Hayward also serves on the Board of Directors for the Regents Council, Softheon Corporation and Ward Melville Heritage Organization. |
6 |
Director | Age | Year First Became Director | Principal Occupation During the Past Five Years | |||
Our Board believes that Dr. Hayward’s current role as our Chief Executive Officer and President, the capital investments he has made to the Company throughout his tenure with us and his former senior executive positions in our industry make him an important contributor to our Board. | ||||||
John Bitzer, III | 54 | 2011 | John Bitzer, III, joined the Board of Directors on August 10, 2011. Mr. Bitzer is President and Chief Executive Officer of ABARTA, Inc., a private, third and fourth generation family holding-company with operations in the soft drink, energy, and frozen food industries (“ABARTA”). In 1985, Mr. Bitzer began his career in sales for the Cleveland Coca-Cola Bottling Company. He has been Publisher of Atlantic City Magazine in Atlantic City, N.J. In 1994 he founded the ABARTA Media Group and held the position of Group Publisher. In 1997 he was named President and Chief Operating Officer of ABARTA and has been President and Chief Executive Officer since 1999. Mr. Bitzer has a degree from the University of Southern California and an MBA from the University of Michigan. Our Board believes that Mr. Bitzer’s professional and management experience in investing in and building growing enterprises make him an important contributor to the Board. | |||
Joseph D. Ceccoli | 52 | 2014 | Joseph D. Ceccoli was appointed to the Board of Directors on December 3, 2014. Since 2010, Mr. Ceccoli has been the Founder, President and CEO of Biocogent, LLC, a bioscience company located at the Stony Brook Long Island High Technology Incubator. Biocogent is focused on the invention, development and commercialization of skin-active molecules and treatment products used in regulated (OTC / Med-care), personal care and consumer products. Prior to starting Biocogent, Mr. Ceccoli was Global Director of Operations for BASF Corporation, a global Fortune 100 company and the world’s largest global chemical company, where he was responsible for the integration, operations and growth of domestic and overseas business units from 2007 to 2008. Prior to BASF, Mr. Ceccoli was a General Manager for Engelhard Corporation, a US based fortune 500 company and chief operating officer of the Long Island based Collaborative Group from 2004 to 2007. Mr. Ceccoli holds a Bachelor of Science Degree in Biotechnology from Rochester Institute of Technology and advanced professional training in various pharmaceutical sciences, emulsion chemistry, engineering and management disciplines. He is a member of numerous professional organizations such as the American Chemical Society and the Society of Cosmetic Chemists. Our Board believes that Mr. Ceccoli’s professional, operational and management experience make him an important contributor to our Board. |
7 |
Director | Age | Year First Became Director | Principal Occupation During the Past Five Years | |||
Charles S. Ryan | 50 | 2011 | Dr. Charles S. Ryan joined the Board of Directors on August 10, 2011. Since March 2015,Dr. Ryan has been Vice President and General Counsel for Cold Spring Harbor Laboratory, a preeminent international research institution. Prior to that,Dr. Ryan was the Senior Vice President, and Chief Intellectual Property Counsel at Forest Laboratories, where he was employed from 2003 to 2014. Dr. Ryan has over 20 years’ experience in managing all aspects of intellectual property litigation, conducting due diligence investigations and prosecuting patent and trademark applications in the pharmaceutical and biotechnology industries. Dr. Ryan earned a doctorate in oral biology and pathology from SUNY Stony Brook and a law degree from Western New England College School of Law. Our Board believes that Mr. Ryan’s expertise as chief intellectual property counsel at a global company makes him an important contributor to the Board. | |||
Yacov A. Shamash | 65 | 2006 | Dr. Yacov A. Shamash has been a member of the Board of Directors since March 17, 2006. Dr. Shamash is Vice President of Economic Development at the State University of New York at Stony Brook. From 1995 to 2004, he was the Dean of Engineering and Applied Sciences at the Harriman School for Management and Policy at the University. He was founder of the New York State Center for Excellence in Wireless Technologies at the University. Dr. Shamash developed and directed the NSF Industry/University Cooperative Research Center for the Design of Analog/Digital Integrated Circuits from 1989 to 1992 and also served as Chairman of the Electrical and Computer Engineering Department at Washington State University from 1985 until 1992. Dr. Shamash also serves on the Board of Directors of Keytronic Corp. |
8 |
Director | Age | Year First Became Director | Principal Occupation During the Past Five Years | |||
As Vice President of Economic Development at the State University of New York at Stony Brook, Dr. Shamash daily encounters leaders of businesses large and small, regional and global in their reach and, as a member of our Board, has played an integral role in our business development by providing the highest-level introductions to customers, channels to market and to the media. Dr. Shamash also brings to our Board his valuable experience gained from serving as a director at other private and public companies. | ||||||
Our Board believes that Dr. Shamash’s professional and management experience, service on other companies’ boards and education make him an important contributor to our Board. | ||||||
Sanford R. Simon | 72 | 2006 | Dr. Sanford R. Simon has been a member of the Board of Directors since March 17, 2006. Dr. Simon has been a Professor of Biochemistry, Cell Biology and Pathology at Stony Brook since 1997. He joined the faculty at Stony Brook as an Assistant Professor in 1969 and was promoted to Associate Professor with tenure in 1975. Dr. Simon was a member of the Board of Directors of The Collaborative Group from 1995 to 2004. From 1967 to 1969 Dr. Simon was a Guest Investigator at Rockefeller University. Dr. Simon received a B.A. in Zoology and Chemistry from Columbia University in 1963, a Ph.D. in Biochemistry from Rockefeller University in 1967, and studied as a postdoctoral fellow with Nobel Prize winner Max Perutz in Cambridge, England. He maintains an active research laboratory studying aspects of cell invasion in cancer and inflammation and novel strategies of drug delivery; he also teaches undergraduate, graduate, medical and dental students. Dr. Simon is an expert at the use of large biomolecules in commercial media, and we have made use of his expertise in formulating DNA into commercial carriers for specific customers. As a member of our Board, Dr. Simon has advised us on patents, provided technical advice, and introduced us to corporate partners and customers. Our Board believes that Dr. Simon’s professional experience, expertise, and education make him an important contributor to our Board. |
9 |
10 |
APPROVAL OF AMENDMENT TO OUR 2005 INCENTIVE STOCK PLAN
11 |
12 |
13 |
14 |
Amended Plan | ||||||||
Name and Position | Dollar Value | Number of Options | ||||||
James A. Hayward,Chairman,Chief Executive Officer and President (1) | $ | — | — | |||||
Karol K. Gray,former Chief Financial Officer (1) | — | — | ||||||
Judith Murrah,Chief Information Officer (1) | — | — | ||||||
Ming-Hwa Liang,Chief Technology Officer and Secretary (1) | — | — | ||||||
Executive Group (2) | $ | 95,326 | 30,000 | |||||
Non-Executive Director Group (3) | $ | 300,000 | — | |||||
Non-Executive Officer Employee Group (1) | $ | — | — |
(1) Future awards under the 2005 Plan are indeterminable. No arrangements have been made at this time with respect to the shares reserved for issuance under the 2005 Plan except as set forth in (2) below. |
(2) Includes options to purchase 30,000 shares of common stock granted to Beth Jantzen, our Chief Financial Officer, the exercise of which is subject to stockholder approval of this Proposal No. 2. |
(3) Includes options to purchase common stock having a fair value of $60,000 as determined using the Black Scholes value, or as determined by the Compensation Committee, granted to each of our non-employee directors annually. |
Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) | |||||||||
(a) | (b) | (c) | ||||||||||
Equity compensation plans approved by security holders | 3,812,228 | (1) | $ | 4.30 | 4,079,371 | (2) | ||||||
2005 Incentive Stock Plan | ||||||||||||
Equity compensation plans not approved by security holders (3) | 277,240 | $ | 3.57 | — | ||||||||
Total | 4,089,468 | $ | 4.25 | 4,079,371 |
(1) | The exercise of 30,000 of these options is subject to stockholder approval of Proposal No. 2 of this proxy statement. |
(2) | Assumes stockholder approval of Proposal No. 2. |
(3) | Includes 277,240 warrants to purchase common stock issued as compensation to the underwriters in our November 2014 and April 2015 public offerings. |
15 |
16 |
RATIFICATION OF APPOINTMENT OF INDEPENDENTREGISTERED
ACCOUNTING FIRM
RBSM LLP (1) | Fiscal year ended | |||||||
September 30, 2014 | September 30, 2013 | |||||||
(i) Audit Fees | $ | 98,500 | $ | 75,000 | ||||
(ii) Audit Related Fees | 37,000 | 9,000 | ||||||
(iii) Tax Fees | 7,000 | 7,000 | ||||||
(iv) All Other Fees | — | — | ||||||
Total Fees | $ | 142,500 | $ | 91,000 | ||||
Marcum LLP (2) | Fiscal year ended | |||||||
September 30, 2014 | September 30, 2013 | |||||||
(i) Audit Fees | $ | 104,000 | $ | — | ||||
(ii) Audit Related Fees | — | — | ||||||
(iii) Tax Fees | — | — | ||||||
(iv) All Other Fees | — | — | ||||||
Total Fees | $ | 104,000 | $ | — |
(1) | RBSM served as our independent auditors through June 23, 2014. |
(2) | Marcum has served as our current independent auditors since June 23, 2014. |
17 |
18 |
THE AUDIT COMMITTEE | ||
John Bitzer, III (Chair) | ||
Charles Ryan | ||
Yacov Shamash |
19 |
20 |
Name | Audit | Compensation | Nominating | |||
James A. Hayward | — | — | — | |||
John Bitzer, III (I) | ||||||
Joseph D. Ceccoli (I) | — | — | — | |||
Charles S. Ryan (I) | — | |||||
Yacov A. Shamash (I) | ||||||
Sanford R. Simon (I) | — | — |
21 |
22 |
23 |
24 |
25 |
26 |
● | Develop a culture that embodies a commitment for our business, creative contribution and a drive to achieve established goals and performance objectives; |
● | Provide leadership to the organization in such a way as to maximize the results of our business operations; |
● | Lead us by demonstrating forward thinking in the operation, development and expansion of our business; |
● | Effectively manage organizational resources to derive the greatest value possible from each dollar invested; and |
27 |
● | Take strategic advantage of the market opportunity to expand and grow our business and revenues. |
● | Competition. Compensation should reflect the competitive marketplace, so we can retain, attract and motivate talented executives. |
● | Accountability for Business Performance. Compensation should be tied to financial performance, so that executives are held accountable through their compensation for contributions to the performance of our company as a whole as well as their performance of the business unit for which they are responsible. |
● | Accountability for Individual Performance. Compensation should be tied to the individual’s performance to encourage and reflect individual contributions to our company’s performance. We consider individual performance as well as performance of the businesses and responsibility areas that an individual oversees, and weigh these factors as appropriate in assessing a particular individual’s performance. |
● | Alignment with Stockholder Interests. Compensation should be tied to our financial performance through equity awards to align executives’ interests with those of our stockholders. |
28 |
● | individual and Company performance, measured against quantitative and qualitative goals, such as our growth, revenue, profitability and other matters; |
● | duties and responsibilities as well as the executive’s experience; and |
● | the types and amount of each element of compensation to be paid to the named executive officer. |
29 |
● | health and dental insurance; |
● | life insurance; |
● | short-and long-term disability; and |
● | 401(k) Plan (currently there is no employer matching) |
30 |
Year | Salary ($) (c) | Bonus ($) (d) | Stock Awards ($) (e) | Option Awards ($) (f)(1) | Non-Equity Incentive Plan Compensation ($) (g) | All Other Compensation ($) (i) | Total ($) (j) | |||||||||||||||||||||||
James A. Hayward | 2014 | 343,269 | — | — | 3,530,437 | — | 3,873,706 | |||||||||||||||||||||||
Chairman, President | 2013 | 319,974 | 150,000 | — | — | — | — | 469,974 | ||||||||||||||||||||||
and CEO | 2012 | 242,334 | — | — | — | — | — | 242,334 | ||||||||||||||||||||||
Karol K. Gray(2) | 2014 | 310,962 | — | — | 207,043 | 518,005 | ||||||||||||||||||||||||
CFO | 2013 | — | — | — | — | — | — | — | ||||||||||||||||||||||
2012 | — | — | — | — | — | — | — | |||||||||||||||||||||||
Judith Murrah | 2014 | 250,000 | — | 195,691 | 445,691 | |||||||||||||||||||||||||
CIO(3) | 2013 | 81,731 | — | — | — | — | — | 81,731 | ||||||||||||||||||||||
2012 | — | — | — | — | — | — | ||||||||||||||||||||||||
Ming-Hwa Liang | 2014 | 140,000 | 2,000 | — | 211,826 | 353,826 | ||||||||||||||||||||||||
CTO and Secretary | 2013 | 140,000 | 10,000 | — | — | — | — | 150,000 | ||||||||||||||||||||||
2012 | 140,000 | — | — | — | — | — | 140,000 |
(1) | The amounts in column (f) represent the grant date fair value under ASC 718 based on the Black Scholes value of the options on the grant date. |
(2) | Ms. Gray was appointed as Chief Financial Officer effective October 14, 2013 and resigned effective February 15, 2015. Beth Jantzen was promoted from Controller to Chief Financial Officer effective February 15, 2015. |
(3) | Ms. Judith Murrah has been our Chief Information Officer since June 1, 2013. Ms. Murrah’s annual salary is $250,000 and she received 33,333 options upon completing six months of employment in December 2013. |
31 |
Name | Grant Date | All Other Stock Awards: Number of Shares of Stock or Units(1) (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards(3) ($) | ||||||||||||||
James A. Hayward | 10/17/2013 | (1) | — | 833,334 | $ | 5.82 | 3,530,437 | ||||||||||||
Karol K. Gray(4) | 12/10/2013 | (2) | — | 8,334 | $ | 8.16 | 49,640 | ||||||||||||
4/14/2014 | (1) | — | 33,334 | $ | 6.60 | 157,403 | |||||||||||||
Judith Murrah | 12/02/2013 | (1) | — | 33,334 | $ | 7.02 | 170,871 | ||||||||||||
12/10/2013 | (2) | — | 4,167 | $ | 8.16 | 24,820 | |||||||||||||
Ming-Hwa Liang | 10/17/2013 | (1) | — | 50,000 | $ | 5.82 | 211,826 |
(1) | Options are exercisable for five years with vesting at 25% each anniversary over four years from the date of grant. |
(2) | Options are exercisable for five years and vested immediately. |
(3) | These amounts represent the grant date fair value under ASC 718 based on the Black Scholes value of the options on the grant date. |
(4) | Ms. Gray was appointed as Chief Financial Officer effective October 14, 2013 and resigned effective February 15, 2015. |
32 |
Option Awards | |||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | |||||||||
James A. Hayward | 283,334 | (1) | — | $ | 3.00 | 5/27/2015 | |||||||
166,667 | (2) | — | 3.60 | 7/1/2015 | |||||||||
666,667 | (3) | — | 3.51 | 7/11/2018 | |||||||||
— | (4) | 833,334 | 5.82 | 10/16/2018 | |||||||||
Karol K. Gray | 15,900 | (8) | — | 4.08 | 11/29/2016 | ||||||||
6,175 | (8) | — | 10.79 | 11/29/2017 | |||||||||
11,112 | (8) | — | 5.82 | 10/16/2018 | |||||||||
8,334 | (5) | 8.16 | 12/09/2018 | ||||||||||
— | (6) | 33,334 | 6.60 | 04/13/2019 | |||||||||
Judith Murrah | — | (7) | 33,334 | 7.02 | 12/01/2018 | ||||||||
4,167 | (5) | — | 8.16 | 12/09/2018 | |||||||||
Ming-Hwa Liang | 116,667 | (1) | — | 3.00 | 5/27/2015 | ||||||||
166,667 | (2) | — | 3.60 | 7/1/2015 | |||||||||
— | (4) | 50,000 | 5.82 | 10/16/2018 |
(1) | On May 27, 2010, our named executive officers elected to forfeit certain stock options to purchase up to 483,333 shares of our common stock at an exercise price of $6.60 that were previously granted to them under the 2005 Incentive Stock Plan. In lieu of the forfeited options, our Board of Directors granted new stock options to such named executive officers to purchase up to 483,333 shares of our common stock at an exercise price of $3.00 under the 2005 Stock Incentive Plan which are fully vested and became exercisable on June 29, 2010 following approval by our stockholders to amend our certificate of incorporation to increase our authorized shares of common stock. |
(2) | On July 1, 2010, our Board of Directors granted nonstatutory stock options under the 2005 Incentive Stock Plan to each of our named executive officers. The options granted to the named executive officers vested with respect to 25% of the underlying shares on the date of grant, and the remaining will vest ratably each anniversary thereafter until fully vested on the third anniversary of the date of grant. |
(3) | On July 11, 2011, our Board of Directors granted nonstatutory stock options under the 2005 Incentive Stock Plan to Dr. James A. Hayward, our Chairman, President and Chief Executive Officer. The options granted to Dr. Hayward vested 25% on the grant date and shall vest 37.5% on each of the next two anniversaries of the grant date, subject to Dr. Hayward’s continuous employment through the applicable vesting date, and if our revenues for any fiscal quarter beginning after the date hereof are at least $1 million more than our revenues for the immediately preceding fiscal quarter, then vesting of the next 37.5% installment will accelerate (such that, if the $1 million increase is met in at least two quarters before the second anniversary of the option grant date, all of the options will have become fully vested as of the end of the second quarter for which the $1 million increase is met). |
33 |
(4) | On October 17, 2013, we granted Dr. James A. Hayward, and Dr. Ming-Hwa Liang options to purchase 833,334 and 50,000 shares of our common stock, respectively, at an exercise price of $5.82 per share for five years with vesting at 25% each anniversary for the next four years. |
(5) | On December 10, 2013, we granted an aggregate of 35,433 options to purchase our common stock at an exercise price of $8.16 per share for five years to employees, with immediate vesting. As part of this grant, Ms. Gray and Ms. Murrah were granted 8,334 and 4,167 options, respectively. |
(6) | On April 14, 2014, we granted 33,334 options to purchase our common stock at an exercise price of $6.60 per share for five years to Ms. Gray with vesting at 25% each anniversary for the next four years. |
(7) | On December 2, 2013, we granted 33,334 options to purchase our common stock at an exercise price of $7.02 per share for five years to Ms. Murrah with vesting at 25% each anniversary for the next four years. |
(8) | These options were granted to Ms. Gray for her service on the Board of Directors prior to her appointment as the Chief Financial Officer. |
● | On December 22, 2014, we granted Dr. James A. Hayward, Chairman, Dr. Ming-Hwa Liang, Chief Technology Officer and Secretary, Judith Murrah, Chief Information Officer, and Beth Jantzen, Chief Financial Officer, of the Company options to purchase 175,000, 20,000, 75,000 and 40,000 shares of the Company’s common stock, respectively, at an exercise price of $2.86 per share for ten years with immediate vesting. |
34 |
● | As agreed to in her offer letter, on February 15, 2015, we granted 30,000 options to purchase our common stock at an exercise price of $3.45 per share for ten years to Beth Jantzen with vesting at 25% each anniversary for the next four years. |
35 |
Fees Earned or Paid in Cash ($) | Stock Awards ($) | Option Awards ($)(1) | All Other Compensation ($) | Total ($)(1)(2) | ||||||||||||||||
John Bitzer, III(3) | — | — | 45,000 | — | 45,000 | |||||||||||||||
CharlesS. Ryan(3) | — | — | 45,000 | — | 45,000 | |||||||||||||||
Yacov A. Shamash(4) | — | — | 53,350 | — | 53,350 | |||||||||||||||
Sanford R. Simon | — | — | 40,000 | — | 40,000 |
(1) | A 5-year option to purchase 11,111 shares of our common stock was granted by the Board to each of the non-employee directors on October 17, 2013 at an exercise price of $5.82 per share, vesting immediately. |
36 |
(2) | At September 30, 2014, Mr. Simon, Mr. Shamash, Mr. Bitzer, Ms. Gray and Mr. Ryan had outstanding option awards (including warrants) aggregating 48,333, 59,756, 35,882, 42,977, and 35,882 shares of our common stock, respectively. |
(3) | A 5-year option to purchase an additional 1,667 shares of our common stock at $5.82 per share was granted to both Mr. Bitzer and Mr. Ryan on October 17, 2013, vesting immediately. |
(4) | A 5-year option to purchase an additional 4,074 shares of our common stock at an exercise price of $5.82 per share was granted to Mr. Shamash on October 17, 2013, vesting immediately. |
37 |
COMPENSATION COMMITTEE John Bitzer, III Charles Ryan Yacov Shamash (Chair) |
38 |
39 |
40 |
Name and Address of Beneficial Owner | Title of Class | Number of Shares Owned(1)(2) | Percentage of Class(3) | |||||||
Executive Officers and Directors: | ||||||||||
James A. Hayward | Common Stock | 3,921,655 | (4) | 16.8 | % | |||||
Ben Liang | Common Stock | 326,426 | (5) | 1.5 | % | |||||
Karol K. Gray | Common Stock | 227,957 | (6) | 1.1 | % | |||||
Judith Murrah | Common Stock | 90,412 | (7) | * | ||||||
Beth Jantzen | Common Stock | 46,251 | (8) | * | ||||||
John Bitzer, III(9) | Common Stock | 62,749 | (10)(11) | * | ||||||
Joseph D. Ceccoli | Common Stock | -- | * | |||||||
Charles S. Ryan | Common Stock | 35,882 | (10) | * | ||||||
Yacov Shamash | Common Stock | 59,756 | (12) | * | ||||||
Sanford R. Simon | Common Stock | 48,333 | (13) | * | ||||||
All directors and officers as a group(10 persons) | Common Stock | 4,819,421 | (14) | 19.9 | % | |||||
5% Stockholders: | ||||||||||
Delabarta, Inc.(15) | Common Stock | 1,213,234 | 5.7 | % | ||||||
General American Investors Company, Inc.(16) | Common Stock | 2,035,000 | 9.2 | % |
* | indicates less than one percent |
(1) | Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to the shares shown. Except as indicated by footnote and subject to community property laws where applicable, to our knowledge, the stockholders named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them. A person is deemed to be the beneficial owner of securities that can be acquired by such person within 60 days upon the exercise of options, warrants or convertible securities (in any case, the “Currently Exercisable Options” ). |
(2) | Does not include the remaining unvested shares subject to options granted on October 17, 2013 pursuant to the 2005 Incentive Stock Plan, which vest 25% of the underlying shares ratably on each anniversary thereafter until fully vested on the fourth anniversary of the date of grant, including 625,001 to James A. Hayward and 37,500 to Ben Liang. Does not include the remaining unvested shares subject to 25,001 options granted to Judith Murrah on December 2, 2013, pursuant to the 2005 Incentive Stock Plan, which vest 25% of the underlying shares ratably on each anniversary thereafter until fully vested on the fourth anniversary of the date of grant. Does not include the remaining unvested shares subject to 36,134, 30,972, 36,134, 36,134 and 36,134 options granted on December 22, 2014 to Messrs. Bitzer, Ceccoli, Ryan, Shamash and Simon, respectively, pursuant to the 2005 Incentive Stock Plan, which vest 100% of the underlying shares on the first anniversary of the date of grant |
(3) | Based upon 21,380,202 shares of common stock outstanding as of April 17, 2015. Each beneficial owner’s percentage ownership is determined by assuming that the Currently Exercisable Options that are held by such person (but not those held by any other person) have been exercised and converted. |
(4) | Includes 2,002,401 shares underlying currently exercisable options and warrants. |
(5) | Includes 317,290 shares underlying currently exercisable options and warrants. |
41 |
(6) | Includes 226,311 shares underlying currently exercisable options and warrants. On February 9, 2015. Ms. Gray submitted her resignation as Chief Financial Officer of the Company effective February 15, 2015. In connection with her separation, Ms. Gray executed a Separation Agreement, dated February 9, 2015, which provides her with the immediate vesting of all current unvested stock options as well as five years to exercise her options. |
(7) | Includes 88,957 shares underlying currently exercisable options and warrants. |
(8) | Includes 46,251 shares underlying currently exercisable options and does not include the remaining unvested options shares subject to 30,000 options granted to Beth Jantzen on February 15, 2015, pursuant to the 2005 Incentive Stock Plan, which vest 25% of the underlying shares ratably on each anniversary thereafter until fully vested on the fourth anniversary of the date of grant. This grant is also subject to shareholder approval of the amendment and extension of the 2005 Incentive Stock Plan. Ms. Jantzen was appointed as Chief Financial Officer of the Company, effective February 15, 2015. |
(9) | Excludes 1,129,036 shares of common stock and 84,198 warrants owned by Delabarta, Inc., a wholly-owned subsidiary of ABARTA, Inc. Mr. Bitzer is President and a member of the board of directors of each of Delabarta, Inc. and ABARTA, Inc. Mr. Bitzer disclaims beneficial ownership of the shares held by Delabarta, Inc. except to the extent of his pecuniary interest therein. |
(10) | Includes 35,882 shares underlying currently exercisable options for each Messrs. Bitzer and Ryan. |
(11) | The address of the principal business office for the stockholder is 1000 Gamma Drive, Suite 500, Pittsburgh, PA 15238. John Bitzer, III, one of our directors is President and Chief Executive Officer of the stockholder. Mr. Bitzer disclaims beneficial ownership of the shares held by the stockholder, except to the extent of his pecuniary interest therein. |
(12) | Includes 59,756 shares underlying currently exercisable options and warrants. |
(13) | Includes 48,333 shares underlying currently exercisable options and warrants. |
(14) | Includes 2,861,063 shares underlying currently exercisable options and warrants. |
(15) | This information is based solely on a Schedule 13G filed with the SEC on February 25, 2015 by Delabarta, Inc. and its parent company, ABARTA, Inc. Delabarta, Inc. reported sole voting and sole dispositive power of 1,213,234 shares of common stock, which includes 84,198 shares subject to warrants that are currently exercisable. As the parent company of Delabarta, Inc., ABARTA, Inc. may be deemed to be the indirect beneficial owner of the 1,213,234 shares beneficially owned by Delabarta, Inc. The address of the principal office of Delabarta, Inc. is 1105 North Market Street, Suite 1300, Wilmington Delaware 19801. The address of the principal office of ABARTA, Inc. is 200 Alpha Drive, Pittsburgh, Pennsylvania 15238. |
(16) | This information is based solely on a Schedule 13G filed with the SEC on April 2, 2015 by General American Investors Company, Inc., which reported sole voting power and sole dispositive power with respect to 2,035,000 shares of common stock, which includes 860,000 fully exercisable warrants. The address of the principal business office for the investment manager is 100 Park Avenue, 35th Floor, New York, NY 10017. |
42 |
43 |
By Order of the Board of Directors | ||
/s/ James A. Hayward | ||
James A. Hayward | ||
Chairman, President and Chief Executive Officer | ||
44 |
1. | Definitions. |
(a) | “Board” - The Board of Directors of the Company. |
(b) | “Code” - The Internal Revenue Code of 1986, as amended from time to time. |
(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 whom are disinterested persons, as contemplated by Rule 16b-3 (“Rule 16b-3”) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). |
(d) | “Company” - APPLIED DNA SCIENCES, INC. and its subsidiaries including subsidiaries of subsidiaries. |
(e) | “Exchange Act” - The Securities Exchange Act of 1934, as amended from time to time. |
(f) | “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. |
(g) | “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 Committee may establish in order to fulfill the objectives of the Plan. |
(h) | “Grant Agreement” - An agreement between the Company and a Participant that sets forth the terms, conditions and limitations applicable to a Grant. |
(i) | “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.” |
(j) | “Participant” - A director, officer, employee or consultant of the Company to whom an Award has been made under the Plan. |
(k) | “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. |
A-1 |
(l) | “Securities Act” - The Securities Act of 1933, as amended from time to time. |
(m) | “Stock” - Authorized and issued or unissued shares of common stock of the Company. |
(n) | “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 and/or the Committee 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. |
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 or non-employee director, 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. |
A-2 |
(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 5(i) 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 8,333,333. 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. No more than 833,334 shares of Stock may be issued pursuant to Awards granted in any calendar year to any individual. |
(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) | Application of Funds: The proceeds received by the Company from the sale of Stock pursuant to the exercise of Options or rights under Stock Purchase Agreements will be used for general corporate purposes. |
(e) | No Obligation to Exercise: The issuance of a Grant shall impose no obligation upon the Participant to exercise any rights under such Grant. |
A-3 |
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. 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 and all Nonstatutory Options shall have an exercise price of no less than 100% of the Fair Market Value of the Stock as of the date of grant. |
(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: |
(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. |
A-4 |
(d) | Term and Exercise of Options: 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. |
(e) | Definitions: For the purposes hereof, the term “Cause” means an Optionee’s (a) conviction or plea of nolo contendre to a felony; (b) commission of fraud or a material act or omission involving dishonesty with respect to the Company or its Affiliates, as reasonably determined by the Company; (c) willful failure or refusal to carry out the material responsibilities of his or her employment, as reasonably determined by the Company; (d) gross negligence, willful misconduct, or engaging in a pattern of behavior which has had or is reasonably likely to have a significant adverse effect on the Company, as reasonably determined by the Company; or (e) willfully engaging in any act or omission that is in material violation of a material policy of the Company, including, without limitation, policies on business ethics and conduct, and policies on the use of inside information and insider trading. The term “Disability” shall have the meaning ascribed thereto pursuant to Section 22(e)(3) of the Code. |
(f) | Nontransferability of Option: No Option shall be transferable by the Optionee, except by will or by the laws of descent and distribution. |
(g) | Recapitalization: Subject to any required action of shareholders, the number of shares of Stock covered by each outstanding Option, the maximum number of shares of Stock that may be covered by Awards granted to any individual in any calendar year, and the exercise price per share covered by any Option shall be proportionately adjusted for any increase or decrease in the number of issued shares of Stock of the Company resulting from a stock split, stock dividend, combination, subdivision or reclassification of shares, or the payment of a stock dividend, or any other increase or decrease in the number of such shares affected without receipt of consideration by the Company; provided, however, the conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration” by the Company. |
A-5 |
(h) | 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 5(i) hereof. |
A-6 |
(i) | Modification, Acceleration, Extension, and, Renewal of Options: Subject to the terms and conditions and within the limitations of the Plan, the Board may modify an Option, or, once an Option in 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 not prohibited by Section 422 of the Code or other applicable law; 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. |
(j) | Exercise Before Exercise Date: At the discretion of the Board, 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(n) hereof prior to the exercise date stated in the Option and such other restrictions and conditions as the Board or Committee may deem advisable. |
(k) | 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. The Board or the Committee may permit Options to be exercised beyond the time periods described herein; provided, however, that no Option may be exercised more than 10 years after the date it is granted. Shares shall not be issued pursuant to the exercise of an Option, if, in the opinion of legal counsel for the Company, the exercise of such Option and/or the issuance of shares thereunder would violate applicable law 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. |
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 Awards may be based on Fair Market Value or other specified valuation. |
A-7 |
(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. |
(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, without limitation, Section 409A 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. |
(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 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. |
A-8 |
(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. |
(iii) | A Participant, pursuant to the Company’s Proprietary Information and Invention Agreement, 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. |
(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 (d)(ii), no Grant or any other benefit under the Plan 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. |
A-9 |
(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: |
(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. |
A-10 |
(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. | Investment Intent. All Grants under the Plan are intended to be exempt from registration under the Securities Act provided byRule 701 thereunder. 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 (i) 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 (ii) 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. |
8. | Amendment, Modification, Suspension or Discontinuance of the Plan. The Board 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. |
A-11 |
9. | Tax Withholding. The Company shall have the right to deduct applicable taxes from any compensation payable to the Participant, whether or not pursuant to the Plan, including, without limitation, the right to 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. |
10. | 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. |
11. | 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. |
12. | Governing Law. All rights and obligations under the Plan and each Award agreement or instrument shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to its principles of conflict of laws. |
A-12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VOTE BY INTERNET - www.proxyvote.com |
|
|
|
| ||||||
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. |
|
|
|
| ||||||
|
|
|
| |||||||
|
|
|
| |||||||
|
|
|
| |||||||
|
|
|
|
| ||||||
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS |
|
|
|
| ||||||
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. |
|
|
|
| ||||||
|
|
|
| |||||||
|
|
|
| |||||||
|
|
|
| |||||||
|
|
|
| |||||||
|
|
|
|
| ||||||
VOTE BY MAIL |
|
|
|
| ||||||
|
|
|
| |||||||
|
|
|
| |||||||
|
|
|
| |||||||
|
|
|
|
| ||||||
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
| CONTROL #à | 0000000000000000 |
| |
|
|
| |||
NAME |
|
| |||
|
|
| |||
THE COMPANY NAME INC. - COMMON |
| SHARES | 123,456,789,012.12345 | ||
THE COMPANY NAME INC. - CLASS A |
|
| 123,456,789,012.12345 | ||
THE COMPANY NAME INC. - CLASS B |
|
| 123,456,789,012.12345 | ||
THE COMPANY NAME INC. - CLASS C |
|
| 123,456,789,012.12345 | ||
THE COMPANY NAME INC. - CLASS D |
|
| 123,456,789,012.12345 | ||
THE COMPANY NAME INC. - CLASS E |
|
| 123,456,789,012.12345 | ||
THE COMPANY NAME INC. - CLASS F |
|
| 123,456,789,012.12345 | ||
THE COMPANY NAME INC. - 401 K |
|
| 123,456,789,012.12345 | ||
|
|
|
| ||
|
| PAGE 1 OF 2 | |||
|
|
|
|
|
|
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: x | KEEP THIS PORTION FOR YOUR RECORDS |
| DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| For | Withhold | For All | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
| The Board of Directors recommends you vote |
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
| 1. | Election of Directors |
|
| o | o | o |
|
|
|
|
|
|
|
|
| ||
|
|
| Nominees |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| 01 | James A. Hayward 02 John Bitzer, III 03 Joseph D. Ceccoli 04 Charles Ryan 05 Yacov Shamash |
| |||||||||||||||
|
| 06 | Sanford R. Simon |
| |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
| The Board of Directors recommends you vote FOR proposals 2 and 3. |
| For | Against | Abstain |
| |||||||||||||
|
|
|
|
|
|
|
|
| |||||||||||
| 2. | Approval of amendment to 2005 Incentive Stock Plan to increase the number of shares of common stock issuable thereunder to 8,333,333 and extend the expiration date thereof to January 25, 2025. |
|
| o | o | o |
| |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| 3. | Ratification of the selection of Marcum LLP as our independent registered public accounting firm for the fiscal year ending September 30, 2015. |
|
| o | o | o |
| |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| NOTE:Such other business as may properly come before the meeting or any adjournment thereof. |
| |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
|
|
|
|
|
|
|
| |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
|
| |||||||||||||||||
|
|
| |||||||||||||||||
|
|
| |||||||||||||||||
|
|
| |||||||||||||||||
|
|
| |||||||||||||||||
|
|
| |||||||||||||||||
|
|
| |||||||||||||||||
|
|
| |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
| Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer. |
|
|
|
|
| |||||||||||||
|
|
|
|
|
|
|
| ||||||||||||
|
|
|
|
|
|
|
|
|
| SHARES |
|
| |||||||
|
|
|
|
|
| CUSIP # |
|
| |||||||||||
|
|
|
|
|
| SEQUENCE # |
|
| |||||||||||
|
| Signature [PLEASE SIGN WITHIN BOX] | Date |
| JOB # | Signature (Joint Owners) |
| Date |
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
|
|
|
| |
|
|
| |
|
|
| |
|
|
|
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
|
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The Notice & Proxy Statement, Form 10-K, Form 10-K A, Shareholder Information is/are available atwww.proxyvote.com. |
|
|
|
|
|
|
|
|
| APPLIED DNA SCIENCES, INC. |
|
|
|
| Annual Meeting of Stockholders |
|
|
|
| This proxy is solicited by the Board of Directors |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
| The stockholder executing and delivering this Proxy hereby appoints Ms. Debbie Bailey and Ms. Beth Jantzen and each of them as Proxies, with full power of substitution, and hereby authorizes them to represent and vote, as designated below, all shares of common stock, $0.001 par value per share, of Applied DNA Sciences, Inc. held of record by the undersigned as of April 17, 2015, at the Annual Meeting of Stockholders of Applied DNA Sciences, Inc., to be held at the Center of Excellence in Wireless and Information Technology, Stony Brook, New York 11790, at 10:00 a.m., local time, on Tuesday, June 16, 2015, or at any postponements or adjournments of the meeting. |
| |
|
|
|
| |
|
| This Proxy when properly executed will be voted in the manner directed herein by the undersigned stockholder. If no direction is made, this Proxy will be in accordance with the recommendations of our Board of Directors and for such other matters as may properly come before the meeting as said proxies deem advisable. |
| |
|
|
|
| |
| THIS PROXY SHOULD BE MARKED, DATED AND SIGNED BY THE STOCKHOLDER(S) EXACTLY AS SUCH STOCKHOLDER'S NAME APPEARS HEREON AND RETURNED PROMPTLY IN THE ENCLOSED ENVELOPE. PERSONS SIGNING IN A FIDUCIARY CAPACITY SHOULD SO INDICATE. IF SHARES ARE HELD BY JOINT TENANTS OR AS COMMUNITY PROPERTY, BOTH SHOULD SIGN. |
| ||
|
|
| ||
|
|
|
| |
|
|
|
| |
|
|
|
| |
|
|
|
| |
|
|
| ||
|
|
|
|
|
|
| Continued and to be signed on reverse side |
| |
|
|
|
|