UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the Securities
Exchange
Act of 1934 (Amendment No.)
Filed
by
the Registrant x
Filed
by
a Party other than the Registrant o
Check
the
appropriate box:
|
o
Preliminary Proxy
Statement
|
o
Confidential, For Use of the
Commission Only
|
|
(As
Permitted by Rule 14a-6(e)(2))
|
x
Definitive
Proxy
Statement
o
Definitive
Additional Materials
o
Soliciting
Material Pursuant to Rule
14a-11(c) or Rule 14a-12
BIOPHAN
TECHNOLOGIES, INC.
(Name
of
Registrant as Specified In Its Charter)
(Name
of
Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
x
No
fee
required
o
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:
o
Fee paid previously
with preliminary materials.
o
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:
BIOPHAN
TECHNOLOGIES, INC.
Notice
Of Special Meeting Of Stockholders
to
be
held on
Friday,
September 12, 2008
At
10:00
a.m.
The
Lennox Tech Enterprise Center
150
Lucius Gordon Drive
West
Henrietta, New York 14586
Dear
Stockholder:
You
are
invited to attend the Special Meeting of Stockholders of Biophan Technologies,
Inc. (the “Company”), which will be held at the Lennox Tech Enterprise Center,
150 Lucius Gordon Drive, West Henrietta, New York 14586, on Friday, September
12, 2008, at 10:00 a.m. Eastern Daylight Time, for the following
purposes:
| 1. |
To
amend the Articles of Incorporation of the Company to increase the
authorized number of shares of Common Stock to 800,000,000 shares,
par
value $0.005 per share, as set forth on the Certificate of Amendment
to
the Articles of Incorporation included with this Notice as Annex
A.
|
| 2. |
To
elect a Board of seven directors to hold office for the ensuing year
and
until the election and qualification of their respective
successors.
|
| 3. |
Approve
the Company’s 2008 Incentive Stock Plan, a copy of which is included with
this Notice as Annex B.
|
| 4. |
Approve
Freed, Maxick & Battaglia, CPAs, PC. as the Company’s independent
registered public accounting firm for the fiscal year ending February
28,
2009.
|
| 5. |
To
transact such other business as may properly come before the
meeting.
|
The
attached material includes the Notice of Special Meeting and the Proxy
Statement, which more fully describes the business to be transacted at the
meeting and are made a part of this Notice. We ask that you give them your
careful attention.
Stockholders
of record at the close of business on July 25, 2008 are entitled to notice
of,
and to vote at, this Special Meeting and any adjournment thereof.
We
hope
that you plan to attend the Special Meeting personally, and we look forward
to
seeing you. If you will not be attending the meeting, we request that you vote
your shares as promptly as possible. You may mark your votes, date, sign and
return the Proxy or voting instruction form in the postage-prepaid envelope
enclosed for that purpose. Any stockholder attending the meeting may vote in
person, even if he, she or it has already returned a Proxy.
The
Board
of Directors recommends that you approve the proposals set forth in this Proxy.
Thank
you
for your continued support and confidence.
|
By
Order of the Board of Directors,
|
|
/s/
John Lanzafame
|
| John Lanzafame, Chief Executive Officer |
Pittsford,
New York
August
5,
2008
TABLE
OF CONTENTS
|
Notice
of Special Meeting of Stockholders
|
1
|
|
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PROXY
STATEMENT
|
2
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|
|
Introduction
|
2
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|
|
Purpose
of the Special Meeting
|
2
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|
|
Who
Can Vote
|
3
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|
|
How
to Vote
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3
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|
|
Revoking
a Proxy
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3
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|
|
Quorum
and Voting Requirements
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3
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|
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Dissenter’s
Rights of Appraisal
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4
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|
|
Proxy
Solicitation Costs and Methods
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4
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|
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Communication
with the Board of Directors
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4
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Security
Ownership of Certain Beneficial Owners and Management
|
||
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Directors
and Executive Officers
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||
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Certain
Relationships and Related Transactions
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||
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PROPOSAL
NO. 1 - To Approve The Amended Certificate Of Incorporation
To Increase
The Number Of Shares Of Common Stock That The Company Is Authorized
To
Issue To 800,000,000 Shares.
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19
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|
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|
||
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PROPOSAL
NO. 2 - To Elect A Board Of Seven Directors To Hold Office
For The Ensuing
Year And Until The Election And Qualification Of Their Respective
Successors.
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21
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|
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PROPOSAL
NO. 3 – To Approve The Corporation’s 2008 Incentive Stock
Plan.
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22
|
|
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PROPOSAL
NO. 4 –
To Approve Freed, Maxick & Battaglia, CPAs, PC. As The Company’s
Independent Registered Public Accounting Firm For The Fiscal
Year Ending
February 28, 2009.
|
23
|
|
|
PROPOSAL
NO. 5 – To Transact Such Other Business As May Properly Come Before
The
Meeting.
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24
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|
BIOPHAN
TECHNOLOGIES, INC.
NOTICE
OF SPECIAL MEETING OF STOCKHOLDERS
TO
BE HELD ON
SEPTEMBER
12, 2008
To
the
Stockholders of
BIOPHAN
TECHNOLOGIES, INC.
NOTICE
IS
HEREBY GIVEN that the Special Meeting of Stockholders of Biophan Technologies,
Inc. (hereinafter called “Biophan” or the “Company” or the “Corporation”) will
be held at Lennox Tech Enterprise Center, 150 Lucius Gordon Drive, West
Henrietta, New York 14586 on September 12, 2008 at 10:00 a.m.. Eastern Daylight
Time for the following purposes:
| 1. |
To
amend the Articles of Incorporation of the Company to increase the
authorized number of shares of Common Stock to 800,000,000 shares,
par
value $0.005 per share, as set forth on the Amended Articles of
Incorporation included with this Notice as Annex
A.
|
| 2. |
To
elect a Board of seven directors to hold office for the ensuing year
and
until the election and qualification of their respective
successors.
|
| 3. |
Approve
the Company’s 2008 Incentive Stock Plan, a copy of which is included with
this Notice as Annex B.
|
| 4. |
Approve
Freed, Maxick & Battaglia, CPAs, PC. as the Company’s independent
registered public accounting firm for the fiscal year ending February
28,
2009.
|
| 5. |
To
transact such other business as may properly come before the
meeting.
|
The
attached material includes the Notice of Special Meeting and the Proxy
Statement, which describes the business to be transacted at the meeting. We
ask
that you give them your careful attention.
We
hope
that you plan to attend the Special Meeting personally, and we look forward
to
seeing you. If you will not be attending the meeting, we request that you vote
your shares as promptly as possible. You may mark your votes, date, sign and
return the Proxy or voting instruction form in the postage-prepaid envelope
enclosed for that purpose. Any stockholder attending the meeting may vote in
person, even if he, she or it has already returned a Proxy.
The
Board
of Directors recommends that you approve the proposals set forth in this Proxy.
Thank
you
for your continued support and confidence.
|
By
Order of the Board of Directors
|
|
/s/
John
Lanzafame
|
|
John
Lanzafame, Chief Executive Officer
|
Pittsford,
New York
August
5,
2008
1
Your
vote is important.
If
you do not plan to attend the meeting, please sign, date and promptly return
the
enclosed proxy. A postage-paid reply envelope is enclosed for your convenience.
A stockholder who submits a proxy may revoke it at any time before the vote
is
taken at the meeting, or by voting in person at the
meeting.
15
Schoen Place
Pittsford,
New York 14534
(585)
267-4800
PROXY
STATEMENT FOR
SPECIAL
MEETING OF STOCKHOLDERS
SEPTEMBER
12, 2008
The
accompanying proxy is solicited by the Board of Directors on behalf of Biophan
Technologies, Inc., a Nevada corporation, for use at the Special Meeting of
Stockholders (the “Special Meeting”) of Biophan Technologies, Inc. (the
“Company”) to be held on Friday, September 12, 2008 at Lennox Tech Enterprise
Center, 150 Lucius Gordon Drive, West Henrietta, New York 14586 at 10:00 a.m.
Eastern Daylight Time, and at any postponements or adjournments thereof. The
Company’s Board of Directors is using this proxy statement to solicit proxies
for use at the Special Meeting. The date of this Proxy Statement is July 30,
2008, the approximate date on which this Proxy Statement and the accompanying
form of proxy were first sent or given to stockholders entitled to vote at
the
Special Meeting.
The
purpose of the meeting is to vote on the following matters:
| 1. |
To
amend the Articles of Incorporation of the Company to increase the
authorized number of shares of Common Stock to 800,000,000 shares,
par
value $0.005 per share, as set forth on the Amended Articles of
Incorporation included with this Notice as Annex
A.
|
| 2. |
To
elect a Board of seven directors to hold office for the ensuing year
and
until the election and qualification of their respective
successors.
|
| 3. |
Approve
the Company’s 2008 Incentive Stock Plan, a copy of which is included with
this Notice as Annex B.
|
| 4. |
Approve
Freed, Maxick & Battaglia, CPAs, PC. as the Company’s independent
registered public accounting firm for the fiscal year ending February
28,
2009.
|
| 5. |
To
transact such other business as may properly come before the
meeting.
|
2
GENERAL
Only
stockholders of record as of the close of business on July 25, 2008 (the "Record
Date") will be entitled to vote at the meeting and any adjournment thereof.
As
of July 25, 2008, there were 174,709,892 shares of Common Stock of the Company
issued and outstanding; these are our only outstanding voting securities. Each
stockholder is entitled to one vote for each share of Common Stock held. A
majority of all of the shares of the stock entitled to vote, whether present
in
person or represented by proxy, shall constitute a quorum for the transaction
of
business at the meeting.
How
to Vote. Voting of Proxies
All
valid
proxies received prior to the meeting will be voted. All shares represented
by a
proxy will be voted, and where a stockholder specifies by means of the proxy
a
choice with respect to any matter to be acted upon, the shares will be voted
in
accordance with the specification so made. If no choice is indicated on the
proxy, the shares will be voted in favor of the proposal. A stockholder giving
a
proxy has the power to revoke his or her proxy, at any time prior to the time
it
is voted, by delivery to the Secretary of the Company of a written instrument
revoking the proxy or a duly executed proxy with a later date, or by attending
the meeting and voting in person.
If
we
receive the enclosed proxy, properly executed and dated, in time to be voted
at
the Special Meeting, the Proxy Committee, consisting of Rebecca Dunn and Stuart
McDonald, will vote the shares represented by it in accordance with the
instructions marked on the proxy. An executed proxy without instructions marked
on it will be voted:
|
|
•
|
FOR
each of the nominees for election as Director;
|
|
|
•
|
FOR
the
approval of an amendment to our Amended Certificate of Incorporation
to
increase the number of authorized shares of our common stock from
250,000,000 to 800,000,000; and
|
|
•
|
FOR
the approval of the Biophan Technologies, Inc. 2008 Incentive Stock
Plan;
and
|
|
|
|
•
|
FOR
the
ratification of the selection of Freed,
Maxick & Battaglia, CPAs, PC.
as our
independent registered public accounting firm for our fiscal year
ending
February 28, 2009.
|
The
shares may also be voted by the named proxies for such other business as may
properly come before the annual meeting or at any adjournment or postponement
of
the annual meeting.
Revoking
a Proxy
Any
person giving a proxy in response to this solicitation has the power to revoke
it at any time before it is voted. Proxies may be revoked by either of the
following actions:
1.
Filing
a written notice of revocation with the Secretary of the Company at 15 Schoen
Place, Pittsford, New York 14534; or
2.
Attending the meeting and voting in person (attendance at the meeting will
not,
by itself, revoke a proxy).
Quorum
and Voting Requirements
The
required quorum for the transaction of business at the Special Meeting is a
majority of the votes eligible to be cast by holders of shares of Common Stock
issued and outstanding on the Record Date. On the Record Date, there were
174,709,892 shares of Common Stock issued and outstanding; consequently, the
presence in person or by proxy of the holders of at least 87,354,947 shares
will
be necessary to establish a quorum. Shares that are voted "FOR," "AGAINST"
or
"ABSTAIN," on a matter are treated as being present at the meeting for purposes
of establishing a quorum.
3
Dissenters'
Rights of Appraisal
Pursuant
to the Nevada Revised Statutes, the holders of the Company's Common Stock are
not entitled to dissenters' rights in connection with the actions proposed
by
the Company herein. Furthermore, the Company does not intend voluntarily to
provide dissenting stockholders with any such rights.
Broker
Non-Votes
Under
the
rules that govern brokers who have record ownership of shares that are held
in
"street name" for their clients who are the beneficial owners of the shares,
brokers do not have discretion to vote these shares on non-routine matters.
The
only proposal to be voted on at this Special Meeting that is a non-routine
matter is the proposal to amend the Articles of Incorporation of the Company
to
increase the authorized number of shares of Common Stock to 800,000,000 shares.
Thus, if you do not otherwise instruct your broker, the broker may turn in
a
proxy card expressly instructing that the broker is NOT voting on this
non-routine matter. Broker non-votes are counted for the purpose of determining
the presence or absence of a quorum but are not counted for determining the
number of votes cast for or against a proposal.
Proxy
Solicitation Costs and Methods
The
costs
of soliciting proxies will be borne by the Company. The Company will solicit
stockholders by mail through its regular employees and will request banks and
brokers, and other custodians, nominees and fiduciaries, to solicit their
customers who have Common Stock of the Company registered in the names of such
persons and will reimburse them for their reasonable, out-of-pocket costs.
In
addition, the Company may use the services of its officers, directors, and
others to solicit proxies, personally or by telephone, without additional
compensation. The Company has engaged the services of Morrow & Co., Inc. to
assist in the solicitation of proxies. Employees and agents of Morrow & Co.,
Inc. will solicit proxies, and will request beneficial owners of our Common
Stock to instruct their banks, brokers, and other custodians, nominees and
fiduciaries to deliver proxies, using the mail, telephone and other means of
electronic communication. The fees and out-of-pocket expenses of Morrow &
Co., Inc. are estimated to be approximately $50,000 and will be borne by
the Company.
Communication
with the Board of Directors - Stockholder Proposals
Should
a
stockholder desire to include in next year’s proxy statement a proposal other
than those made by the Board, such proposal must be sent to the Secretary of
the
Company, c/o 15 Schoen Place, Pittsford, New York 14534. The Company expects
to
print its proxy statement on or about July 1, 2009. Shareholder proposals must
be received at our principal executive offices within a reasonable time before
the Company begins to print and send its proxy materials to its
stockholders.
Annual
Report on Form 10-K
We
have
enclosed with this proxy statement our annual report on Form 10-K for
fiscal year ended February 29, 2008, as filed with the Securities and Exchange
Commission. This reports include our audited financial statements, along with
other information about us, which we encourage you to read.
To
obtain
an additional copy of our annual report on Form 10-K without charge, please
address your request to Margaret V. Russell, CFO, Attention: Annual Report
Request, 15 Schoen Place, Pittsford, NY 14534, or telephone us at (585)
267-4800.
You
can
also obtain a copy of our annual report on Form 10-K and the other periodic
filings that we make with the Securities and Exchange Commission from the
Securities and Exchange Commission’s EDGAR database located at www.sec.gov.
4
INTEREST
OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Except as set forth below, none of the following persons has any substantial or material interest, directly or indirectly, by way of beneficial ownership of securities or otherwise, in any matter to be acted on at the special meeting, except as described herein.
1.
Each
of the persons standing for election as a director of the Corporation presently
is a director, and their beneficial holdings in the Corporation’s Common Stock
is set forth below:
|
Director
|
Age
|
Title
|
Beneficial Common Stock
Ownership
|
Percent Beneficially
Owned
|
||
|
|
65
|
|
Director
and Chairman of the Board
|
500,000
|
*
|
|
|
John
F. Lanzafame
|
|
41
|
|
Director,
Chief Executive Officer
|
2,068,333
|
1.2%
|
|
Theodore
A. Greenberg
|
|
48
|
|
Director
|
259,000
|
*
|
|
Bonita
L. Labosky
|
|
66
|
|
Director
|
256,000
|
*
|
|
Guenter
Jaensch
|
|
69
|
|
Director
|
1,896,000
|
1.1%
|
|
Travis
E. Baugh
|
|
53
|
|
Director
|
150,000
|
*
|
|
Harold
Gubnitsky
|
|
45
|
|
Director
|
150,000
|
*
|
The
principal occupations and business experience for at least the past five years
of each director nominee is as follows:
Stan
Yakatan is Chairman and Chief Executive Officer of Katan Associates, a private
company which he founded in May 1989 that provides advisory services and
strategic planning for companies in the life sciences industry. From June 2003
to August 2005, Mr. Yakatan was Chairman and Chief Executive Officer of Grant
Life Sciences, a publicly-traded company engaged in the research, development,
marketing, and sale of diagnostic kits for the screening, monitoring, and
diagnosis of diseases with emphasis on women's health, infectious diseases,
and
cancers. Mr. Yakatan continues to serve as a Director of Grant Life Sciences.
He
is also a Director of Response Biomedical Corp. and LifePoint, Inc. and of
several privately-held companies in the life sciences industry. From 1968 until
he founded Katan Associates in 1989, Mr. Yakatan held various senior executive
positions with New England Nuclear Corporation (a division of E.I. DuPont),
ICN
Pharmaceuticals, Inc., New Brunswick Scientific Co., Inc. and Biosearch. Mr.
Yakatan is the Chairman of Biocomm Inc., a venture capital firm, and has founded
and served as Chief Executive Officer of numerous entrepreneurial ventures
in
the biomedical and healthcare sectors. He has served as a strategic advisor
to
government agencies in Canada and Australia.
John
F.
Lanzafame joined Biophan in 2004 and was named Interim Chief Executive Officer
in October 2007. Previously Mr. Lanzafame served as Vice President - Business
Development and President of Nanolution, LLC, the drug delivery division of
Biophan. In 2006, Mr. Lanzafame was promoted to Chief Operating Officer of
Biophan and to lead operations and business development for the Company. From
1989 to 2004, Mr. Lanzafame was employed by STS Biopolymers, Inc., a privately
held medical device company that marketed high performance polymer-based
coatings for the medical device industry, including drug eluting surfaces for
devices such as coronary stents and indwelling catheters, serving in a variety
of positions from 1989 to 2003 and as President beginning in 2003. Mr. Lanzafame
left STS Biopolymers in 2004, following sale of the company to Angiotech
Pharmaceuticals, Inc.. Mr. Lanzafame is a member of the Board of Directors
of
NaturalNano, Inc.
Theodore
A. Greenberg is Chief Investment Officer, Chief Financial Officer, Secretary,
and is a member of the Board of Directors of Infinity Capital Group, Inc.,
a
business development company which he joined in 2005. Since 2004 he has been,
and continues to be, a project consultant and advisor and has provided services
to various companies. In 1999, Mr. Greenberg co-founded Park Avenue Equity
Partners, LP, a $100 million middle market private equity fund and he was a
general partner until 2003. From 1998 to 1999, Mr. Greenberg was the Chief
Financial Officer of Development Capital, LLC. Mr. Greenberg has been a director
of Biophan since April 2006.
5
Bonita
L.
Labosky has, since December 2006, been President and CEO of Cardiac Concepts,
Inc., a Minneapolis-based company developing new medical device technologies.
From 2000 until December 2006, she was Group Vice President and member of the
Executive Committee of Welch Allyn, Inc., a provider of innovative medical
diagnostic devices, patient monitoring systems, and external defibrillators.
During her tenure at Welch Allyn, Inc., Ms. Labosky also served as a member
of
the firm's Executive Committee. From 1993 until 2000, she was a Vice President
of Medtronic, Inc., serving as General Manager for Heart Failure Management
from
1997 through 2000, General Manager for Micro Interventional Systems from 1996
through 1997, and General Manager of the Promeon Division from 1993 through
1997. From 1989 through 1993, she was a research and development director at
Medtronic and from 1978 through 1988 she held various management positions
(including Vice President and General Manager) with SPSS, Inc. Ms. Labosky
joined our Board of Directors in March 2007.
Guenter
H. Jaensch, Ph.D. is the former Chairman and CEO of Siemens Pacesetter, Inc.,
a
manufacturer of cardiac pacemakers. During his more than twenty-five years
at
Siemens, Dr. Jaensch held various senior executive positions prior to running
Siemens Pacesetter, including President of Siemens Communications Systems,
Inc.
from August 1983 to March 1985, Chairman and President of Siemens Corporate
Research and Support, Inc., from April 1982 to September 1991 and Chairman
and
CEO of Siemens Pacesetter, Inc. and Head of the Cardiac Systems Division of
Siemens AG Medical Engineering Group from October 1991 to September 1994. In
1994, upon the acquisition of Pacesetter by St. Jude Medical, Inc., he joined
St. Jude Medical as Chairman and CEO of Pacesetter, Inc. and retired in 1995
to
manage his personal investments. Since December 1997 he has been a director
of
MRV Communications, a publicly traded company in the fiber optic technology
business. Dr. Jaensch has been a director of Biophan since March
2002.
Travis
E.
Baugh is currently the founder, president and chief executive officer of Lifecap
Resources, LLC, a consulting firm providing early stage life sciences companies
with expertise in a wide range of areas, including capital formation, accounting
and finance, evaluation of new technologies, formulating FDA strategy / clinical
trial design, and international regulatory strategy. In 1995, he co-founded
MicroMed Cardiovascular, Inc., a medical device company focused on the
development and marketing of a miniaturized blood pump known as the DeBakey
VAD®
that is used to treat congestive heart failure. As CFO, Mr. Baugh raised seed
funding, venture capital, and bank financing totaling over $60 million. In
2005,
he became CEO and took the company public, raising an additional $25 million
through three secondary PIPE transactions. Mr. Baugh has served on numerous
boards and is currently serving on the board of DFB Pharmaceuticals Inc., a
private diversified pharmaceutical company based in Texas.
Harold
Gubnitsky is executive vice president of XL Techgroup, Inc., a unique value
creation company focused on inventing and growing new companies in the biotech,
ecotech, and medtech business sectors. Mr. Gubnitsky is a seasoned executive
who
has worked with and within several large, medium, and small corporations with
a
wide range of responsibilities spanning executive management and operations.
In
2001, Mr. Gubnitsky founded Semtor Corporation, a technology services company,
serving as its CEO. Prior to Semtor, he was an officer and senior executive
of
Proxicom, a technology business consulting firm with a market capitalization
in
excess of $1.5 billion. Previously, Mr. Gubnitsky served as vice president
of
Cambridge Technology Partners where he led numerous vendor/partner relationships
and was responsible for selling and managing several Fortune 100 relationships.
Prior to Cambridge, Mr. Gubnitsky served as part of the management team at
Accenture.
Directors
who are also our employees do not receive additional compensation for serving
on
the Board or its committees. Non-employee directors, for their services as
directors, receive an annual cash fee of $8,000. Dr. Jaensch received an
additional $7,500 and $30,000 for serving as Chairman of the Board during years
ended February 29, 2008 and February 28, 2007, respectively. In addition,
non-employee directors have received options under our 2006 Incentive Stock
Plan
and, in the future will receive options under our 2008 Incentive Stock Plan
(if
approved by the shareholders at the Special Meeting). All directors receive
reimbursement for their reasonable expenses incurred in attending Board
meetings. An additional $3,000 per year is paid to the Chairman of the Audit
Committee. Otherwise, no additional compensation is paid to any director for
serving as a member of any committee of the Board. We maintain directors and
officers liability insurance.
6
The
following table shows compensation to non-employee nominee directors for the
fiscal years ended February 29, 2008 and February 28, 2007:
DIRECTOR
COMPENSATION (1)
|
Name
|
Fiscal
Year
|
Fees Earned or
Paid in Cash ($)
|
Option Awards ($)
(2)
|
All Other
Compensation ($)
|
Total ($)
|
|||||||||||||
|
Guenter
H. Jaensch
|
2008
|
$
|
15,500
|
(9)
|
$
|
105,937
|
(14)
|
|
$
|
0
|
$
|
121,437
|
||||||
|
|
2007
|
$
|
38,000
|
(3)
|
$
|
24,834
|
(6)
|
|
$
|
0
|
$
|
62,834
|
||||||
|
Theodore
A. Greenberg
|
2008
|
$
|
11,000
|
(10)
|
$
|
32,347
|
(15)
|
|
$
|
0
|
$
|
43,347
|
||||||
|
|
2007
|
$
|
6,000
|
(4)
|
$
|
24,834
|
(7)
|
|
$
|
0
|
$
|
30,834
|
||||||
|
Stan
Yakatan
|
2008
|
$
|
8,000
|
(11)
|
$
|
75,428
|
(16)
|
|
$
|
10,000
|
(18)
|
|
$
|
93,428
|
||||
|
|
2007
|
$
|
2,000
|
(5)
|
$
|
5,165
|
(8)
|
|
$
|
0
|
$
|
7,165
|
||||||
|
Bonita
L. Labosky
|
2008
|
$
|
8,000
|
(12)
|
$
|
27,320
|
(17)
|
|
$
|
0
|
$
|
35,320
|
||||||
|
Travis
E. Baugh
|
2008
|
$
|
0
|
(13)
|
$
|
0
|
$
|
0
|
$
|
0
|
||||||||
|
Harold
Gubnitsky
|
2008
|
$
|
0
|
(13)
|
$
|
0
|
$
|
0
|
$
|
0
|
||||||||
(1)
Certain columnar information required by Item 402(k)(2) of Regulation S-K has
been omitted for categories where there was no compensation awarded to, or
paid
to, the named directors during the fiscal years ended February 29, 2008 and
February 28, 2007.
(2)
The
reported amounts reflect the dollar amounts recognized for financial statement
reporting purposes for the fiscal years ended February 29, 2008 and February
28,
2007, in accordance with FAS 123R, of awards pursuant to our Stock Incentive
Plans and may include amounts from awards granted both in and prior to the
fiscal years ended February 29, 2008 and February 28, 2007. As required, the
amounts shown exclude the impact of any forfeitures related to service-based
vesting conditions. The actual amount realized by the director will likely
vary
based on a number of factors, including the Company's performance, stock price
fluctuations and applicable vesting.
(3)
Includes a $30,000 fee for service as Chairman of the Board and an $8,000 fee
for service on the Board.
(4)
Elected to the Board in April 2006.
(5)
Elected to the Board in December 2006.
(6)
An
option for the purchase of 40,000 shares of common stock at an exercise price
of
$1.06 per share was granted to Dr. Jaensch on July 18, 2006. This option becomes
fully vested and exercisable on the earlier of (i) completion of one year of
service as a director measured from the date of grant or (ii) continuation
of
such service through the day immediately preceding the first annual shareholders
meeting following the date of grant. The expense for this option is pro-rated
over the vesting period. This option has a termination date of July 18, 2016.
At
February 28, 2007, Dr. Jaensch held options for the purchase of an aggregate
of
715,000 shares of common stock, of which options for the purchase of 627,500
shares were exercisable.
(7)
An
option for the purchase of 40,000 shares of common stock at an exercise price
of
$1.06 per share was granted to Mr. Greenberg on July 18, 2006. This option
becomes fully vested and exercisable on the earlier of (i) completion of one
year of service as a director measured from the date of grant or (ii)
continuation of such service through the day immediately preceding the first
annual shareholders meeting following the date of grant. The expense for this
option is pro-rated over the vesting period. This option has a termination
date
of July 18, 2016. At February 28, 2007, Mr. Greenberg held options for the
purchase of an aggregate of 40,000 shares of common stock, none of which were
exercisable.
7
(8)
An
option for the purchase of 40,000 shares of common stock at an exercise price
of
$0.45 per share was granted to Mr. Yakatan on December 1, 2006. This option
becomes fully vested and exercisable on the earlier of (i) completion of one
year of service as a director measured from the date of grant or (ii)
continuation of such service through the day immediately preceding the first
annual shareholders meeting following the date of grant. The expense for this
option is pro-rated over the vesting period. This option has a termination
date
of December 1, 2016. At February 28, 2007, Mr. Yakatan held options for the
purchase of an aggregate of 40,000 shares of common stock, none of which were
exercisable.
(9)
Includes a $7,500 fee for service as Chairman of the Board and an $8,000 fee
for
service on the Board; resigned as Chairman of the Board December
2007.
(10)
Includes a $3,000 fee for services as Chairman of the Audit
Committee.
(11)
Named Chairman of the Board January 2007.
(12)
Elected to the Board in March 2007.
(13)
Elected to the Board in February 2008.
(14)
An
option for the purchase of 403,500 shares of common stock at an exercise price
of $0.28 per share was granted to Dr. Jaensch on July 27, 2007.
(15)
An
option for the purchase of 69,000 shares of common stock at an exercise price
of
$0.28 per share was granted to Mr. Greenberg on July 27, 2007. This option
became fully vested and exercisable immediately. This option has a termination
date of July 27, 2017.
(16
) An
option for the purchase of 300,000 shares of common stock at an exercise price
of $0.28 per share was granted to Mr. Yakatan on July 27, 2007. This option
became fully vested and exercisable immediately. This option has a termination
date of July 27, 2017.
(17)
An
option for the purchase of 40,000 shares of common stock at an exercise price
of
$0.42 per share was granted to Ms. Labosky on March 9, 2007. This option becomes
fully vested and exercisable on the earlier of (i) completion of one year of
service as a director measured from the date of grant or (ii) continuation
of
such service through the day immediately preceding the first annual shareholders
meeting following the date of grant. This option has a termination date of
March
9, 2017. In addition, an option for the purchase of 66,000 shares of common
stock at an exercise price of $0.28 per share was granted to Ms. Labosky on
July
27, 2007. This option became fully vested and exercisable immediately. This
option has a termination date of July 27, 2017.
(18)
Other compensation consists of fees for consulting services performed by Mr.
Yakatan.
Compensation
Discussion and Analysis
This
Discussion and Analysis describes our policies with respect to the compensation
of the Chief Executive Officer and the other executive officers during the
fiscal year ended February 29, 2008. The Compensation Committee of the Board
of
Directors (the “Compensation Committee”), consists of Stanley Yakatan and Bonita
Labosky, both of whom are independent directors who have not been officers
of
the Corporation at any time. The Compensation Committee is responsible for
setting the policies which govern base salary compensation and bonuses, as
well
as the Corporation’s benefit plans and incentive stock plans, and for
determining the amounts payable under these plans.
8
Compensation
of executive officers (with the exception of the Chief Executive Officer) is
reviewed by the Chief Executive Officer with the Compensation Committee and
is
discussed, reviewed and approved by the full Board of Directors. The
compensation of the Chief Executive Officer is discussed, reviewed and approved
by the Compensation Committee.
Overview
The
Compensation Committee is committed to developing and maintaining compensation
policies, plans and programs which are intended to retain its executive
officers. The Corporation’s compensation policies also are designed to promote
increased stockholder values, by aligning the financial interests of the
Corporation’s executive officers with those of its stockholders. The Corporation
believes that its current policies, plans and programs are adequate for this
purpose.
The
Compensation Committee has reviewed and discussed the Compensation Discussion
and Analysis with management and, based on such review and discussion, the
Compensation Committee recommended to the Board of Directors that the
Compensation Discussion and Analysis be included in this Proxy Statement and
in
the Corporation’s annual report on Form 10-K for the fiscal year ending February
28, 2009.
Components
of Biophan's Compensation Program
The
compensation program for our Named Executive Officers consists of:
(1)
Base
salary;
(2)
Long-term incentive compensation, including:
(i)
Stock
Options, Restricted Stock, and Restricted Stock Units,
(ii)
Stock Appreciation Rights, and Other Stock-Based Awards,
(iii)
Broad-based Employee Benefits
(1)
Base
Salary
With
respect to annual compensation, the fundamental objective in setting base salary
levels for the Company's senior management is to pay competitive rates to
attract and retain high quality, competent executives. Competitive pay levels
are determined based upon proxy disclosures, individual leadership, level of
responsibility, management skills and industry activities. The Company does
not
currently have a bonus program for its executives.
(2)
Long
Term Incentive Compensation
(i)
Stock
Options, Restricted Stock, and Restricted Stock Units.
As
of
February 29, 2008, the Company had two equity-based compensation plans, entitled
Biophan Technologies, Inc. 2001 Stock Option Plan and Biophan Technologies,
Inc.
2006 Incentive Stock Plan (the "Plans"), which are stockholder approved. The
Plans provide for the grant of incentive and non-qualified stock options to
employees, and the grant of non-qualified options to consultants and to
directors and advisory board members. In addition, various other types of
stock-based awards, such a stock appreciation rights, may be granted under
the
Plans. The Plans are administered by the Compensation Committee of our Board
of
Directors, which determines the individuals eligible to receive options or
other
awards under the Plans, the terms and conditions of those awards, the applicable
vesting schedule, the option price and term for any granted options, and all
other terms and conditions governing the option grants and other awards made
under the Plans. Under the 2006 Plan, non-employee directors received, and
under
the 2008 Incentive Stock Plan (if approved by the Stockholders) will receive
automatic grants of options for the purchase of 40,000 shares of common stock
(i) upon the initial election to the Board of Directors and (ii) at each
successive Annual Meeting at which they are re-elected to the Board. Under
the
2001 Plan, 13,000,000 shares of our common stock were reserved for issuance
pursuant to options or restricted stock awards; at February 29, 2008, 44,480
shares were available for future option grants and awards. Under the 2006 Plan,
7,500,000 shares of our common stock were reserved for issuance pursuant to
options or restricted stock awards; at February 29, 2008, 26,566 shares were
available for future option grants and awards.
9
To
date,
option awards have been solely in the form of non-qualified stock options
granted under the Plans. The Compensation Committee grants these stock-based
incentive awards from time to time for the purpose of attracting and retaining
key executives, motivating them to attain the Company's long-range financial
objectives, and closely aligning their financial interests with long-term
stockholder interests and share value.
Restricted
stock awards entitle recipients to acquire shares of common stock, subject
to
our right to repurchase all or part of such shares from the recipient in the
event that the conditions specified in the applicable award are not satisfied
prior to the end of the applicable restriction period established for such
award. Restricted stock unit awards entitle the recipient to receive shares
of
common stock to be delivered in the future subject to such terms and conditions
on the delivery of the shares as the Board of Directors may
determine.
Restricted
stock and restricted stock unit awards granted under the Plans may vest (a)
solely on the basis of passage of time, (b) solely based on achievement of
specified performance criteria or (c) upon the passage of time, subject to
accelerated vesting if specified performance criteria are met. The Board of
Directors may determine, at the time of grant, that restricted stock or
restricted stock unit award being made to an officer will vest solely upon
achievement of specified performance criteria designed to qualify for deduction
under Section 162(m) of the Code. The performance criteria for each restricted
stock or restricted stock unit award intended to so qualify
for
purposes of Section 162(m) of the Code will be based on one or more of the
following measures: sales, earnings per share, return on net assets, return
on
equity, and customer service levels.
Except
as
noted below, (a) restricted stock and restricted stock units that vest solely
on
the basis of passage of time may vest no faster than ratably over three years;
and (b) restricted stock and restricted stock units that vest based on
achievement of specified performance criteria, or provide for accelerated
vesting based upon achievement of specified performance criteria, may not vest
earlier than the first anniversary of the date of grant. These vesting
restrictions do not apply to restricted stock and restricted stock unit awards
collectively with respect to up to 5% of the total number of shares of common
stock covered by the 2006 Plan. In addition, the Board of Directors may make
exceptions to the vesting limitations described above in the event of the
recipient's death, a change in control or other extraordinary circumstances
specified in the Plans.
(ii)
Stock Appreciation Rights and Other Stock-Based Awards
A
stock
appreciation right, or SAR, is an award entitling the holder on exercise to
receive, at the election of the Board of Directors, an amount in cash or common
stock or a combination thereof determined in whole or in part by reference
to
appreciation, from and after the date of grant, in the fair market value of
a
share of common stock. SARs may be based solely on appreciation in the fair
market value of common stock or on a comparison of such appreciation with some
other measure of market growth such as (but not limited to) appreciation in
a
recognized market index. Under the Plans, the Board of Directors has the right
to grant other awards of common stock or awards otherwise based upon common
stock or other property, including without limitation rights to purchase shares
of common stock, having such terms and conditions as the board may
determine.
The
Company believes that, through the use of stock options, restricted stock,
restricted stock units, stock appreciation rights, and other stock-based awards,
executives' interests are directly tied to enhanced stockholder value. The
Compensation Committee has the flexibility of awarding any of these incentives
to executives. This flexibility enables the Company to fine-tune its grants
in
order to maximize the alignment of the interests of the stockholders and
management.
10
(iii)
Broad-based Employee Benefits
As
employees, our Named Executive Officers have the opportunity to participate
in a
number of benefits programs that are generally available to all eligible
employees. These benefits include:
o
Healthcare Plans— includes medical benefits, dental benefits, behavioral health
program, vision and hearing care program, and wellness programs.
o
Disability Plans— includes short-term and long-term disability income
plans.
o
Investing Plans— includes a 401(k) plan.
Qualified
Retirement Plan
We
maintain a tax-qualified retirement plan that provides all eligible employees
with an opportunity to save for retirement on a tax-advantaged basis. Under
the
401(k) Plan, participants may elect to defer a portion of their compensation
on
a pre-tax basis and have it contributed to the Plan subject to applicable annual
Internal Revenue Code limits. Pre-tax contributions are allocated to each
participant's individual account and are then invested in selected investment
alternatives according to the participants' directions. Employee elective
deferrals are 100% vested at all times. The 401(k) Plan allows for matching
contributions to be made by us. As a tax-qualified retirement plan,
contributions to the 401(k) Plan and earnings on those contributions are not
taxable to the employees until distributed from the 401(k) Plan and all
contributions are deductible by us when made.
For
eligible employees, our Investing Plans likewise use base and lump-sum merit
pay
as components of "eligible compensation" under the applicable plans (incentive
plan awards are not part of "eligible compensation"). In addition, our
"qualified" plans are subject to applicable IRS limits.
SUMMARY
COMPENSATION TABLE (1)
The
table
set forth below summarizes the compensation paid to our named executive officers
during the years ended February 29, 2008 and February 28, 2007.
|
Principal
Position
|
Year
|
Salary
|
Bonus(2)
|
Stock
Awards(3)
|
Option
Awards(4)
|
All Other
Compensation (5)
|
Total
|
|||||||||||||||||||||
|
Michael
L. Weiner
|
2008
|
$
|
185,400
|
0
|
0
|
$
|
280,000
|
(7)
|
|
$
|
238,471
|
(10)
|
|
$
|
788,471
|
|||||||||||||
|
President
and CEO
|
2007
|
$
|
260,000
|
0
|
0
|
0
|
$
|
11,758
|
$
|
271,758
|
||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||
|
John
F. Lanzafame, CEO
|
2008
|
$
|
188,419
|
$
|
100,000
|
(6)
|
|
0
|
$
|
335,600
|
(8)
|
|
0
|
$
|
623,919
|
|||||||||||||
|
Vice-President
and COO
|
2007
|
$
|
188,077
|
0
|
0
|
0
|
0
|
$
|
188,077
|
|||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||
|
Stuart
G. MacDonald
|
|
|||||||||||||||||||||||||||
|
Vice-President
-
|
2008
|
$
|
175,000
|
0
|
0
|
$
|
152,600
|
(9)
|
|
0
|
$
|
327,600
|
||||||||||||||||
|
Research
|
2007
|
$
|
175,000
|
0
|
0
|
0
|
0
|
$
|
175,000
|
|||||||||||||||||||
|
|
||||||||||||||||||||||||||||
|
Margaret
V. Russell, CFO, Secretary and Treasurer (11)
|
2008
|
0
|
0
|
0
|
0
|
0
|
0
|
|||||||||||||||||||||
11
(2)
No
bonus was paid to any named executive officer, except as noted. The Company
does
not have a formal bonus plan, but the Compensation Committee has, from time
to
time on the recommendation of management, awarded cash bonuses to employees
in
recognition of exceptional service.
(3)
The
Company did not issue any stock awards to named executive officers in the fiscal
years ended February 29, 2008 and February 28, 2007.
(4)
The
Company did not issue any options awards to named executive officers in the
fiscal year ended February 28, 2007.
(5)
Unless otherwise indicated, the aggregate amount of perquisites and other
personal benefits given to each of the named executive officers valued at the
actual cost to the Company was less than $10,000. These amounts consist of
contributions made by the Company to the 401(k) Plan and premiums for long-term
disability for each of the officers.
(6)
A
bonus was awarded to Mr. Lanzafame for his efforts in concluding the Medtronics
and Myotech Agreements
(7)
An
option for the purchase of 1,000,000 shares of common stock at an exercise
price
of $0.28 per share was granted to Mr. Weiner on July 27, 2007. This option
became fully vested and exercisable immediately. This option has a termination
date of July 27, 2017.
(8)
An
option for the purchase of 895,000 shares of common stock at an exercise price
of $0.28 per share was granted to Mr. Lanzafame on July 27, 2007. This option
became fully vested and exercisable immediately. This option has a termination
date of July 27, 2017. Mr. Lanzafame also received an option for the purchase
of
500,000 shares of common stock at an exercise price of $0.17 on September 10,
2007 with 250,000 vesting immediately. The remaining options vested and become
exercisable on September 10, 2008. This option has a termination date of
September 10, 2017.
(9)
An
option for the purchase of 545,000 shares of common stock at an exercise price
of $0.28 per share was granted to Mr. MacDonald on July 27, 2007. This option
became fully vested and exercisable immediately. This option has a termination
date of July 27, 2017.
(10)
Mr.
Weiner resigned effective October 3, 2007. Upon resignation, he received
$100,000 and approximately $125,000 of stock.
(11)
Ms.
Russell commenced employment with the Corporation on July 15, 2008.
Grants
of Plan Based Awards
The
following table summarizes information concerning stock options granted to
the
named executive officers during the last completed fiscal year ended February
29, 2008:
|
Name
|
Number of
Securities
Underlying
Options/SARS
Granted (#)
|
Percent of Total
Options/SARS
Granted to
Employees in
Fiscal Year
|
Exercise or
Base Price
($/Share)
|
Expiration Date
|
|||||||||
|
|
|
|
|
|
|||||||||
|
Michael
L. Weiner
|
1,000,000
|
14.23
|
%
|
$
|
.28
|
7/27/17
|
|||||||
|
|
|||||||||||||
|
John
F. Lanzafame
|
1,395,000
|
19.85
|
%
|
$
|
.17 to $.28
|
7/27/17 to 9/10/17
|
|||||||
|
|
|||||||||||||
|
Stuart
G. MacDonald
|
545,000
|
7.76
|
%
|
$
|
.28
|
7/2717
|
|||||||
Outstanding
Equity Awards at Fiscal Year End
The
following table presents the number and values of exercisable and unexercisable
options at February 29, 2008:
12
| Option Awards (1) | |||||||||||||||||
|
|
Number of
|
|
Number of
|
|
|
||||||||||||
|
|
Securities
|
|
Securities
|
|
|
||||||||||||
|
|
underlying
|
|
underlying
|
|
|
||||||||||||
|
|
Unexercised
|
|
Unexercised
|
|
|
||||||||||||
|
|
Options
|
|
Unearned Options
|
Option
|
|
||||||||||||
|
|
(#)
|
|
(#)
|
Exercise
|
Option
|
||||||||||||
|
|
Exercisable
|
|
Unexercisable
|
Price
|
Expiration
|
||||||||||||
|
Name
|
(Vested)
|
|
(Unvested)
|
($)
|
Date
|
||||||||||||
|
Michael
L. Weiner
|
250,000
|
(2
|
)
|
0
|
$
|
0.50
|
01/01/2011
|
||||||||||
|
250,000
|
(15
|
)
|
0
|
0.43
|
07/15/2012
|
||||||||||||
|
|
300,000
|
(3
|
)
|
0
|
0.18
|
10/31/2013
|
|||||||||||
|
|
800,000
|
(4
|
)
|
0
|
0.97
|
05/10/2014
|
|||||||||||
|
|
1,000,000
|
(14
|
)
|
0
|
0.28
|
07/27/2017
|
|||||||||||
|
|
|||||||||||||||||
|
John
F. Lanzafame
|
100,000
|
(5
|
)
|
0
|
0.67
|
07/19/2014
|
|||||||||||
|
|
150,000
|
(6
|
)
|
0
|
0.74
|
09/03/2014
|
|||||||||||
|
|
240,000
|
(7
|
)
|
60,000
|
(7)
|
|
1.80
|
03/15/2015
|
|||||||||
|
|
183,334
|
(8
|
)
|
91,666
|
(8)
|
|
1.56
|
01/06/2016
|
|||||||||
|
|
895,000
|
(14
|
)
|
0
|
.28
|
07/27/2017
|
|||||||||||
|
|
250,000
|
(9
|
)
|
250,000
|
(9)
|
|
.17
|
09/10/2017
|
|||||||||
|
|
|||||||||||||||||
|
Stuart
G. MacDonald
|
100,000
|
(10
|
)
|
0
|
0.50
|
01/01/2011
|
|||||||||||
|
|
100,000
|
(11
|
)
|
0
|
0.43
|
07/16/2012
|
|||||||||||
|
|
200,000
|
(3
|
)
|
0
|
0.18
|
10/31/2013
|
|||||||||||
|
|
340,000
|
(12
|
)
|
85,000
|
(12)
|
|
0.97
|
05/10/2014
|
|||||||||
|
|
25,000
|
(13
|
)
|
0
|
2.60
|
05/27/2015
|
|||||||||||
|
|
545,000
|
(14
|
)
|
0
|
.28
|
07/27/2017
|
|||||||||||
(1)
Certain columnar information required by Item 402(n) (2) of Regulation S-K
has
been omitted for categories where there has been no compensation awarded to,
or
paid to, the named executive officers required to be reported in the table
during fiscal year ended February 29, 2008.
(2)
These
stock options were granted on January 1, 2001, with 100,000 vesting and becoming
exercisable immediately. The remaining options vested and became exercisable
in
three equal annual installments with the first installment vesting on January
1,
2002.
(3)
These
stock options were granted on October 31, 2003. This option vested and became
exercisable in four equal annual installments with the first installment vesting
on October 31, 2003.
(4)
These
stock options were granted on May 10, 2004. This option becomes vested and
exercisable after the following contingencies were met.
a.
400,000 options upon completion of a financing deal, and,
b.
400,000 options upon completion of a substantial licensing and/or strategic
transaction.
(5)
These
stock options were granted on July 19, 2004. This option becomes vested and
exercisable in four equal annual installments with the first installment vesting
July 19, 2004.
(6)
These
stock options were granted September 3, 2004. This option becomes vested and
exercisable in four equal annual installments with the first installment vesting
September 3, 2004.
13
(7)
These
stock options were granted on March 10, 2005. This option becomes vested and
exercisable after the following contingencies are met.
a.
90,000
options upon completion of a financing deal vest and become exercisable in
three
equal semi-annual installments with the first installment vesting March 15,
2005,
b.
150,000 options upon completion of a substantial licensing and/or strategic
transaction vest and become exercisable in three equal semi-annual installments
with the first installment vesting March 15, 2005, and
c.
60,000
options upon completion of a listing on a major exchange vest and become
exercisable in three equal semi-annual installments with the first installment
vesting on the date of completion.
(8)
These
stock options were granted on January 6, 2006. This option becomes vested and
exercisable in three equal annual installments with the first installment
vesting on January 6, 2007.
(9)
These
stock options were granted on September 10, 2007. One-half vest and become
exercisable immediately and the remainder vest and become exercisable in one
year.
(10)
These stock options were granted January 1, 2001. This option vested and became
exercisable in five equal annual installments with the first installment vesting
January 1, 2002.
(11)
These stock options were granted July 16, 2002. This option vested and became
exercisable on December 31, 2002.
(12)
These stock options were granted on May 10, 2004. This option becomes vested
and
exercisable after the following contingencies are met.
a.
127,500 options upon completion of a financing deal,
b.
212,500 options upon completion of a substantial licensing and/or strategic
transaction, and
c.
85,000
options upon completion of a listing on a major exchange.
(13)
These stock options were granted May 27, 2005. This option vested and became
exercisable on May 27, 2005.
(14)
These stock options were granted July 27, 2007. They vested and became
exercisable immediately.
(15)
These stock options were granted July 16, 2002. They vested and became
exercisable immediately.
No
named executive officer exercised options in the fiscal years ended
February 29, 2008 or February 28, 2007. Options held by the following named
executive officers vested during the years ended:
|
|
February 29,
|
February 28,
|
|||||
|
|
2008
|
2007
|
|||||
|
Michael
L. Weiner
|
800,000
|
0
|
|||||
|
John
F. Lanzafame
|
1,299,167
|
154,127
|
|||||
|
Stuart
G. MacDonald
|
545,000
|
50,000
|
|||||
Employment
Agreements
Each
of
John F. Lanzafame, Chief Executive Officer, former Chief Operating Officer
and
Vice President of Business Development; Michael L. Weiner, former President
and
former Chief Executive Officer; and Stuart G. MacDonald, Vice President of
Research and Development, has entered into an employment agreement with Biophan.
Mr.
Weiner resigned effective October 3, 2007. Upon his resignation Mr. Weiner
received $100,000 severance payment, $25,000 of accrued vacation benefits and
stock valued at approximately $125,000. In addition, Mr. Weiner became
immediately vested in any options, warrants, retirement plan or agreements
then
in effect. Mr. Weiner's vested warrants and options remain exercisable for
the life of the applicable agreement.
14
The
employment agreements for Messrs. Lanzafame and MacDonald are terminable by
either us or the employee upon 30 days' notice or immediately by us for cause
(as defined in their employment agreements) or upon the death or disability
of
the employee. However, Messrs. Lanzafame and MacDonald are entitled to receive
severance equal to six months' base salary, payable in three equal installments
within fifteen (15), thirty (30) and sixty (60) days following termination
in
the event that the employee is terminated by us within ninety (90) days
following a change in control. In addition, under such circumstances each of
them will be immediately vested in any options, warrants, retirement plan or
agreements then in effect.
In
the
event of termination for cause, all unexercised warrants and options held by
the
applicable employee, whether or not vested, will be canceled and the employee
will not be eligible for severance payments. In the event of voluntary
termination, all vested warrants and options remain exercisable for the life
of
the applicable agreement.
Termination
and Change in Control Tables
The
tables below outline the potential payments to our Chief Executive Officer
and
other Named Executive Officers upon the occurrence of certain termination
triggering events. For the purposes of the table, below are the standard
definitions for the various types of termination, although exact definitions
may
vary by agreement and by person.
"Voluntary
termination" means a termination initiated by the executive
officer.
"Voluntary
termination for Good Reason" generally means termination initiated by the
executive officer (i) following a change in control as defined above (ii) due
to
a material breach by the Company under the employment agreement or (iii) a
significant change in the executive officer's duties.
"Involuntary
Termination—Disability" means entitlement to long-term disability benefits under
the Company Disability Income Plan, as amended and any successor plan, or a
determination of a permanent and total disability under a state workers
compensation statute.
"Involuntary
Termination— For Cause" means the occurrence of one or more of the following
events (i) the Executive willfully refuses to obey reasonable and lawful orders
of the CEO or the Board of Directors; (ii) the Executive has willfully breached
or habitually neglected his duty and has failed to correct his behavior within
five (5) days following receipt of written notice of such concerns; (iii) the
Executive has been convicted in a court of law of a crime or offense which
involves dishonesty or fraud; (iv) the Executive has breached any of the
Executive's obligations pursuant to this Agreement; or (v) the Executive has
committed an intentional tort against the Company or its
Executives.
"Involuntary
Termination— Not for Cause" means an involuntary termination for reasons other
than "For Cause" as defined above.
"Involuntary
Termination for Change-in-Control" occurs when a named executive is terminated
after the completion of change in control as described above in Employment
Contracts.
15
John
F.
Lanzafame
Vice-President
- Chief Executive Officer (Former Business Development, Chief Operating
Officer)
|
|
Voluntary
|
|||||||||||||||
|
|
Termination
|
|||||||||||||||
|
Executive Benefits and Payments Upon
|
Good Reason or
|
Disability or
|
Involuntary Termination
|
Change in
|
||||||||||||
|
Termination(1)
|
Retirement
|
Death
|
For Cause
|
Not For Cause
|
Control
|
|||||||||||
|
Compensation
|
||||||||||||||||
|
Severance(2)
|
0
|
0
|
0
|
0
|
$
|
99,000
|
||||||||||
|
Benefits
and Perquisites(3)
|
||||||||||||||||
|
401(k)
Match(4)
|
0
|
0
|
0
|
0
|
3,960
|
|||||||||||
|
Health
Insurance(5)
|
0
|
0
|
0
|
0
|
4,600
|
|||||||||||
|
Long-Term
Disability premiums(5)
|
0
|
0
|
0
|
0
|
240
|
|||||||||||
Stuart
G.
MacDonald
Vice-President
- Research and Development
|
|
Voluntary
|
|||||||||||||||
|
|
Termination
|
|||||||||||||||
|
Executive Benefits and Payments Upon
|
Good Reason or
|
Disability or
|
Involuntary Termination
|
Change in
|
||||||||||||
|
Termination(1)
|
Retirement
|
Death
|
For Cause
|
Not For Cause
|
Control
|
|||||||||||
|
Compensation
|
0
|
0
|
0
|
0
|
$
|
87,500
|
||||||||||
|
Severance(2)
|
||||||||||||||||
|
Benefits
and Perquisites(3)
|
0
|
0
|
0
|
0
|
3,500
|
|||||||||||
|
401(k)
Match(4)
|
||||||||||||||||
|
Health
Insurance (5)
|
0
|
0
|
0
|
0
|
1,600
|
|||||||||||
|
Long-Term
Disability premiums(5)
|
0
|
0
|
0
|
0
|
640
|
|||||||||||
(1)
For
purposes of this analysis, we assume that the Named Executive Officer's
compensation is as follows: John Lanzafame’s current base salaries are $199,000;
Stuart MacDonald's current base salary is $175,000.
(2)
Severance is calculated as follows: John Lanzafame and Stuart MacDonald receive
six (6) months of base salary for Involuntary Termination-Change in
Control.
(3)
Payments associated with benefits and perquisites are limited to the items
listed. No other continuation of benefits or perquisites occurs under the
termination scenarios listed.
(4)
401(k) Employer Match is calculated on salary paid as per Safe Harbor provision
of the 401(k) Plan up to the maximum allowable contribution.
(5)
Health Insurance and Long-Term Disability continuation is calculated as follows:
John Lanzafame and Stuart MacDonald at six (6) months.
2008
INCENTIVE STOCK PLAN
On
July
10, 2008, the Board of Directors of the Corporation, subject to approval by
the
Corporation’s stockholders, adopted the “Biophan Technologies, Inc. 2008
Incentive Stock Plan” (hereinafter referred to as the “Plan”), a copy of which
is attached as Annex B, and ratified certain stock grants made thereunder.
The
Plan permits the grant of nonqualified stock options, incentive stock
options and awards of common stock or restricted stock eligible employees,
directors and independent contractors of the Corporation and its subsidiaries.
16
The
objectives of the Plan are to optimize the profitability and growth of the
Corporation through incentives that are consistent with the Corporation’s goals
and that link the personal interests of participants in the Plan to those of
the
Corporation’s stockholders, to provide Plan participants with an incentive for
excellence in individual performance, and to promote teamwork among Plan
participants.
The
Plan
is further intended to provide flexibility to the Corporation in its
ability to motivate, attract, and retain the services of Plan participants
who
make significant contributions to the Corporation’s success and to allow Plan
Participants to share in that success.
The
Plan
shall remain in effect, subject to the right of the Board of Directors to amend
or terminate the Plan at any time pursuant to its terms, until all ten million
(10,000,000) common shares that are reserved for the Plan have been awarded,
purchased or acquired according to the Plan’s provisions. However, in no event
may an award of any incentive stock option be granted under the Plan on or
after
the tenth (10th)
anniversary of the Plan’s effective date.
Pursuant
to the Plan, the Compensation Committee of the Board of Directors may, from
time
to time, select from all eligible employees, directors and independent
contractors, those to whom awards shall be granted under the Plan and shall
determine the nature and amount of each award, and all material terms of the
award, including vesting and pricing; provided, however, that incentive stock
options shall only be awarded to employees of the
Corporation
or its subsidiaries.
Each
person who, subsequent to the effective date of the Plan, is for the first
time
elected or appointed to the Board of Directors and who qualifies, at such time,
as a non-employee director, will be granted a stock award of 150,000 shares
of
restricted stock, on terms and conditions set forth in the Plan. All restricted
stock awarded to such directors vests upon the completion by such director
of
one (1) year of board service measured from the date of the award. Each
non-employee director who remains a director for more than one year will receive
nonqualified stock options to purchase 40,000 common shares, on terms and
conditions set forth in the Plan, at an option price per share equal to the
fair
market value of a share on the date of such award, determined in accordance
with
the Plan. All Options granted to non-employee directors expire on the tenth
(10th)
anniversary of the date of award, subject to earlier termination as provided
in
the Plan. The right of non-employee directors to receive awards pursuant to
the
Plan are in lieu of all rights to receive options automatically under the
Corporation’s 2001 Stock Option Plan, the Corporation’s 2006 Incentive Stock
Plan or any other plan that does not specifically provide that such options
or
other award are in lieu of or in addition to the stock awards to which the
non-employee directors are entitled under the Plan.
Subject
to the terms and provisions of the Plan, stock options may be granted to Plan
participants in such number, and upon such terms, and at any time and from
time to time as shall be determined by the Compensation Committee of the Board.
Each stock option grant shall be evidenced by an award agreement that shall
specify the option exercise price, the duration of the option, the number of
shares to which the option pertains, the period for the vesting of rights to
exercise the options and such other provisions as the Compensation Committee
of
the Board of Directors shall determine which are not inconsistent with the
terms
of the Plan; provided, however, that the per-share exercise price shall not
be
less than the fair market value of the shares on the date of grant, as
determined in accordance with the Plan. The exercise price for each option
shall
equal the fair market value of the shares at the time such option is granted.
Except
as
otherwise provided in the Plan, each option granted to a Plan participant shall
expire at such time as the Compensation Committee of the Board of Directors
shall determine at the time of grant. Options shall be exercisable at such
times
and be subject to such restrictions and conditions as the Compensation Committee
of the Board of Directors shall in each instance approve, which need not be
the
same for each grant or for each Plan participant. Options shall be exercised
by
the delivery of a written, electronic or telephonic notice of exercise to the
Corporations or its designated agent, setting forth the number of shares with
respect to which the Option is to be exercised, accompanied by full payment
of
the option exercise price for the shares, unless the participant elects a
cashless exercise, in accordance with the terms of the Plan.
The
only
award that has been made or presently contemplated under the Plan is a grant
to
Mararet V. Russell, on July 14, 2008, in connection with her employment as
the
Corporation’s Chief Financial Officer, Secretary and Treasurer, of options to
purchase 1,700,000 shares of Common Stock as a price of $0.02 per share (the
closing price per share of the Corporation’s common stock on that date). The
options vest as to 25% as of the date of the grant and then 25% on each of
the
next three anniversaries of the initial vesting date.
EFFECTIVE
DATE
August
5, 2008
17
If
approved at the Special Meeting, the action described herein will be effective
immediately upon filing Articles of Amendment with the Secretary of State of
Nevada as described herein.
18
PROPOSAL
NO. 1
THE
BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
THE
PROPOSAL
TO AMEND THE ARTICLES OF INCORPORATION OF THE CORPORATION TO INCREASE THE
CAPITAL STOCK THAT THE CORPORATION IS AUTHORIZED TO ISSUE, SUCH THAT THE
CORPORATION WILL HAVE THE AUTHORITY TO ISSUE 800,000,000 SHARES OF COMMON STOCK,
PAR VALUE $0.005 PER SHARE.
Our
Articles of Incorporation, as amended, currently authorize the Company to issue
250,000,000 shares of Common Stock, par value $0.005 per share. The Company
proposes to amend the Articles of Incorporation to authorize 800,000,000 shares
of Common Stock. The additional authorized Common Stock shares would be a part
of the existing class of Common Stock and, if and when issued, would have the
same rights and privileges as the shares of Common Stock now issued and
outstanding.
We
propose to amend only Article 3 of our Articles of Incorporation only to change
the number of authorized shares of Common Stock. If amended, Article 3 of the
Company's Articles of Incorporation shall read as follows:
"3.
The
aggregate number of shares which the corporation shall have authority to issue
shall consist of 800,000,000 shares of Common Stock having a par value of $0.005
per share. The Common Stock of the Company may be issued from time to time
without prior approval by the stockholders. The Common Stock may be issued
for
such consideration as may be fixed from time to time by the Board of
Directors.”
A
copy of
the proposed amended Articles of Incorporation for the Company is attached
hereto as Annex A.
Other
than as described herein, the Company has no present commitments, agreements,
or
intent to issue additional shares of Common Stock, other than with respect
to
currently reserved shares, in connection with transactions in the ordinary
course of our business, or shares which may be issued under our stock option,
stock purchase, and other existing employee benefit plans, or in connection
with
currently outstanding convertible notes, options and warrants exercisable for
shares of our Common Stock.
The
Board
of Directors believes it is desirable to increase the number of shares of Common
Stock the Company is authorized to issue to provide the Company with adequate
flexibility in the future to be able to consider certain corporate opportunities
that may arise and would require that we have sufficient available shares to
enter into such corporate opportunities that may include, among other things,
equity financing, acquisition transactions or strategic relationships. However,
none are known or contemplated at this time.
19
Vote
Required
Approval
of the proposal to amend our Articles of Incorporation will require the
affirmative vote of the holders of at least a majority of the shares of Common
Stock outstanding on the Record Date, or 87,354,947 shares.
Recommendation
of our Board of Directors
On
July
10, 2008,
our
Board of Directors approved the amendment to Article 3 of our Articles of
Incorporation to bring the total number of authorized shares of Common Stock
to
800,000,000 as set forth in Annex A. The directors also directed that the
amendment be submitted to the Company's stockholders for approval as required
by
the Nevada Revised Statutes.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS PROPOSAL 1.
YOUR
VOTE IS IMPORTANT
PLEASE
SIGN, DATE AND RETURN THE PROXY CARD AS SOON AS POSSIBLE
20
PROPOSAL
NO. 2
THE
BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
THE PROPOSAL
TO ELECT STAN
YAKATAN, JOHN F. LANZAFAME, THEODORE A. GREENBERG, BONITA L. LABOSKY, GUENTER
JAENSCH, TRAVIS E. BAUGH, AND HAROLD GUBNITSKY AS MEMBERS OF THE BOARD OF
DIRECTORS FOR ONE YEAR TERMS STARTING ON THE DATE OF THE SPECIAL MEETING OR
UNTIL THEIR RESPECTIVE SUCCESSORS WILL BE ELECTED.
On
July
10, 2008,
our
Board of Directors recommended that these seven nominees be submitted to the
shareholders for election to the Board of Directors of the Company on the date
of the Special Meeting for a term of one year starting
on the date of the special meeting or until their respective successors will
be
elected.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS PROPOSAL 2.
YOUR
VOTE IS IMPORTANT
PLEASE
SIGN, DATE AND RETURN THE PROXY CARD AS SOON AS POSSIBLE
21
PROPOSAL
NO. 3
THE
BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
THE PROPOSAL
TO APPROVE THE CORPORATION’S 2008 INCENTIVE STOCK PLAN
On
February 1, 2008, the Company adopted the 2008 Incentive Stock Plan, and on
July
10, 2008, the Board of Directors approved the 2008 Incentive Stock Plan, subject
to the approval of the Company’s shareholders, resolving that the 2008 Incentive
Stock Plan should be submitted to the Company’s shareholders for approval at the
Special Meeting.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS PROPOSAL 3.
YOUR
VOTE IS IMPORTANT
PLEASE
SIGN, DATE AND RETURN THE PROXY CARD AS SOON AS POSSIBLE
22
PROPOSAL
NO. 4
THE
BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
THE PROPOSAL
TO APPROVE FREED, MAXICK & BATTAGLIA, CPAS, PC. AS THE COMPANY’S INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING FEBRUARY 28,
2009.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS PROPOSAL 4.
YOUR
VOTE IS IMPORTANT
PLEASE
SIGN, DATE AND RETURN THE PROXY CARD AS SOON AS POSSIBLE
23
PROPOSAL
NO. 5
THE
BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
THE PROPOSAL
TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS PROPOSAL 5.
YOUR
VOTE IS IMPORTANT
PLEASE
SIGN, DATE AND RETURN THE PROXY CARD AS SOON AS POSSIBLE
24
If
any
business not described herein should properly come before the meeting the Proxy
Committee, consisting of Stuart McDonald and Rebecca Dunn, will vote the shares
represented in accordance with their best judgment. At this time the proxy
statement went to press, the company knew of no other matters which might be
presented for Stockholder action at the meeting.
*
* * *
*
The
above
Notice and Proxy Statement are sent by order of the Board of
Directors.
MANAGEMENT
INFORMATION
The
following table sets forth information regarding our executive officers and
directors. Each of our executive officers has been elected by our board of
directors and serves until his or her successor is duly elected and
qualified.
|
Name
|
|
Age
|
|
Position
|
|
Stan
Yakatan
|
|
65
|
|
Director
and Chairman of the Board
|
|
John
F. Lanzafame
|
|
41
|
|
Director,
Chief Executive Officer
|
|
Theodore
A. Greenberg
|
|
48
|
|
Director
|
|
Bonita
L. Labosky
|
|
66
|
|
Director
|
|
Guenter
Jaensch
|
|
69
|
|
Director
|
|
Travis
E. Baugh
|
|
53
|
|
Director
|
|
Harold
Gubnitsky
|
|
45
|
|
Director
|
|
Stuart
G. MacDonald
|
|
58
|
|
Vice-President
— Research and Development
|
|
Margaret
V. Russell
|
43
|
Chief
Financial Officer, Secretary and
Treasurer
|
VOTING
SECURITIES
As
of
July 25, 2008, the Record Date, 174,709,892 shares of the Company’s Common Stock
were issued and outstanding. Each holder of Common Stock is entitled to one
vote
for each share held by such holder.
The
following table sets forth the beneficial ownership information of our common
stock at July 25, 2008, for:
|
·
|
each
person known to us to be the beneficial owner of more than 5% of
our
common stock
|
|
·
|
each
named executive officer;
|
|
·
|
each
of our directors; and
|
|
·
|
all
of our named executive officers and directors as a
group.
|
We
have
determined beneficial ownership in accordance with the rules of the SEC. Except
as indicated by the footnotes below, we believe, based on the information
furnished to us, that the persons and entities named in the table below have
sole voting and investment power with respect to all shares of common stock
reflected as beneficially owned. We have based our calculation of the percentage
of beneficial ownership on 174,709,892 shares of common stock outstanding on
July 25, 2008.
In
computing the number of shares of common stock beneficially owned by a person
and the percentage ownership of that person, we deemed outstanding shares of
common stock subject to options or warrants held by that person that are
currently exercisable or exercisable within 60 days of July 25, 2008. We did
not
deem these shares outstanding, however, for the purpose of computing the
percentage ownership of any other person. Beneficial ownership representing
less
than 1% is denoted with an asterisk (*).
|
|
Shares
|
Beneficially
Owned
|
|||||
|
Beneficial
Owner
|
Number
|
Percent
|
|||||
|
Directors:
|
|||||||
|
Travis
E. Baugh
|
|||||||
|
5483
Partridge Hill Road
|
|||||||
|
Great
Valley, NY 14741
|
150,000
|
(1)
|
*
|
||||
|
|
|||||||
|
Theodore
A. Greenberg
|
|||||||
|
530
F Grand Street
|
|||||||
|
New
York, NY 10002
|
259,000
|
(1)
|
*
|
||||
|
|
|||||||
|
Harold
R.Gubnitsky
|
|||||||
|
17351
SW 58th Street
|
|||||||
|
Southwest
Ranches, FL 33331
|
150,000
|
(1)
|
*
|
||||
|
|
|||||||
|
Guenter
H. Jaensch
|
|||||||
|
16065
Bristol Isle Way
|
|||||||
|
Delray
Beach, FL 33446
|
1,896,000
|
(2)
|
1.1
|
%
|
|||
|
|
|||||||
|
Bonita
L. Labosky
|
|||||||
|
3067
East Lake Road
|
|||||||
|
Skaneateles,
NY 13152
|
256,000
|
(1)
|
*
|
||||
|
|
|||||||
|
Stan
Yakatan
|
|||||||
|
155
Lyndon Street - First Court
|
|||||||
|
Hermosa
Beach, CA 90524
|
500,000
|
(3)
|
*
|
||||
|
|
|||||||
|
Named
Executives:
|
|||||||
|
|
|||||||
|
John
F. Lanzafame
|
2,068,333
|
(4)
|
1.2
|
%
|
|||
|
605
French road
|
|||||||
|
Fairport,
NY 14450
|
|||||||
|
|
|||||||
|
Stuart
G. MacDonald
|
1,400,000
|
(5)
|
*
|
||||
|
4663
East Lake Road
|
|||||||
|
Pultneyville,
NY 14538
|
|||||||
|
|
|||||||
|
Margaret
V. Russell
|
340,000
|
(6)
|
*
|
||||
|
594
Adams Road
|
|||||||
|
Webster,
NY 14580
|
|||||||
|
Other:
|
|||||||
|
Myotech,
LLC
|
4,923,080
|
2.98
|
%
|
||||
|
15
Schoen Place
|
|||||||
|
Pittsford,
NY 14534
|
|||||||
|
|
|||||||
|
All
Directors and Named Executive Officers as a Group (9
persons)
|
7,019,333
|
(7)
|
4.02
|
% | |||
25
(2)
Includes 1,071,500 shares issuable upon exercise of currently-exercisable
options and 150,000 shares of restricted stock awarded in March 2008. Also
includes 225,000 shares owned by Dr. Jaensch's wife. Dr. Jaensch disclaims
beneficial ownership of the shares held by his wife.
(3)
Includes 340,000 shares issuable upon exercise of currently-exercisable options
and 150,000 shares of restricted stock awarded in March 2008, held by Mr.
Yakatan.
(4)
Issuable upon exercise of currently-exercisable options held by Mr.
Lanzafame.
(5)
Includes 1,310,000 shares issuable upon exercise of currently-exercisable
options held by Mr. MacDonald.
(6)
Includes shares issuable upon exercise of currently-exercisable
options.
(7)
Includes shares issuable upon exercise of options, and restricted stock as
described in notes 1 through 3 above. Also includes shares as to which
beneficial ownership is disclaimed, as described in note (1)
above.
26
RATIFICATION
OF APPOINTMENT
OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
On
July
10, 2008, the Board of Directors appointed the firm of FREED, MAXICK &
BATTAGLIA, CPAS, PC. as
the
Company’s independent registered public accounting firm, subject to ratification
by the stockholders at the Special Meeting, to audit the accounts of the Company
with respect to our operations for the year ending February 28, 2009 and to
perform such other services as may be required. Should this firm of auditors
be
unable to perform these services for any reason, the Board of Directors will
appoint another independent registered public accounting firm to perform these
services. As long as a quorum is present, a majority of votes cast at the
meeting is necessary to ratify the appointment of the independent registered
public accounting firm.
The
Board
of Directors requires pre-approval of services to be provided by FREED, MAXICK
& BATTAGLIA, CPAS, PC. The Board’s policy is that each of its independent
directors has the authority to pre-approve non-audit services. Each member
is
required to report any pre-approval decisions to the entire Board of Directors
at its next scheduled meeting. The firm was not engaged by the Company to
provide services prior to the second quarter of the fiscal year ended February
29, 2008.
The
fees
paid to FREED, MAXICK & BATTAGLIA, CPAS, PC., our
principal independent registered public accounting firm, during 2008 are as
follows:
|
2008
|
||||
|
(a)
Audit Fees(1)
|
$
|
162,000
|
||
|
(b)
Audit-related fees
|
$
|
8,409
|
||
|
(c)
All Other Fees (not reflected in (a) - (b))
|
$
|
0
|
||
|
(1)
|
Includes
the aggregate fees and expenses estimated or billed for professional
services rendered by FREED, MAXICK & BATTAGLIA, CPAS, PC. for
the integrated audit of the Company’s annual consolidated financial
statements for the fiscal year and the reviews of the financial statements
included in the Company’s Quarterly Reports on Form 10-Q for the second
and third quarters of the fiscal year ended February 29, 2008. The
firm
was not engaged to provide services in connection with the Corporation’s
financial statements related to the fiscal year ended February 28,
2007.
|
Representatives
of the firm of FREED, MAXICK & BATTAGLIA, CPAS, PC. are
expected to be present at the Special Meeting. They will have the opportunity
to
make a statement if they desire to do so, and will be available to respond
to
appropriate questions from stockholders.
27
AVAILABLE
INFORMATION
We
are
currently subject to the information requirements of the Exchange Act and in
accordance therewith file periodic reports, proxy statements and other
information with the SEC relating to our business, financial statements and
other matters.
Copies
of
such reports, proxy statements and other information may be copied (at
prescribed rates) at the public reference facilities maintained by the
Securities and Exchange Commission at Room 1024, 100 Fifth Street, N.E.,
Judiciary Plaza, Washington, D.C. 20549. For further information concerning
the
SEC’s public reference room, you may call the SEC at 1-800-SEC-0330. Some of
this information may also be accessed on the World Wide Web through the SEC’s
Internet address at http://www.sec.gov.
Requests
for documents relating to the Company should be directed to Secretary
of the Company, c/o 15 Schoen Place, Pittsford, New York 14534.
28
Proxy
Card
BIOPHAN
TECHNOLOGIES, INC.
PROXY
FOR SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON
SEPTEMBER
12, 2008 AT 10:00 AM.
THE
LENNOX TECH ENTERPRISE CENTER
150
LUCIUS GORDON DRIVE,
WEST
HENRIETTA, NEW YORK 14586
29
The
undersigned hereby appoints Stuart McDonald and Rebecca Dunn, and each of them,
as proxies for the undersigned, each with full power of substitution, to
represent the undersigned and to vote all shares of Common Stock of Biophan
Technologies, Inc. (the "Company") that the undersigned is entitled to vote
in
the manner indicated on the reverse side hereof, and with discretionary
authority as to any matters that may properly come before our Special Meeting
of
Stockholders to be held on September 12, 2008, and at any and all adjournments
thereof, as set forth under the heading "Transaction of Other Business" in
the
accompanying proxy statement. IF NO OTHER INDICATION IS MADE, AT THE MEETING
AND
AT ANY AND ALL ADJOURNMENTS THEREOF, THE PROXY HOLDERS WILL VOTE FOR THE
PROPOSED AMENDMENT TO THE ARTICLES OF INCORPORATION TO INCREASE THE NUMBER
OF
AUTHORIZED SHARES OF COMMON STOCK TO 800,000,000 SHARES.
30
IF
YOU
PLAN TO ATTEND THE MEETING AND YOUR SHARES ARE HELD IN THE NAME OF A BROKER
OR
OTHER NOMINEE, PLEASE BRING A STATEMENT OR LETTER FROM THE BROKER OR NOMINEE
CONFIRMING YOUR OWNERSHIP OF SHARES.
PLEASE
MARK YOUR VOTE LIKE THIS. x
PROPOSAL
1.
1.
TO
INCREASE AUTHORIZED SHARES OF COMMON STOCK TO EIGHT HUNDRED MILLION
(800,000,000) SHARES.
o
FOR o AGAINST o
ABSTAIN
________________________________________________________
PROPOSAL
NO. 2
2.
TO
ELECT STAN YAKATAN, JOHN F. LANZAFAME, THEODORE A. GREENBERG, BONITA L. LABOSKY,
GUENTER JAENSCH, TRAVIS E. BAUGH, AND HAROLD GUBNITSKY AS DIRECTORS FOR ONE
YEAR
TERMS STARTING ON THE DATE OF THE SPECIAL MEETING OR UNTIL THEIR RESPECTIVE
SUCCESSORS WILL BE ELECTED.
o FOR o
AGAINST o ABSTAIN
__________________________________________________________
PROPOSAL
NO. 3
3.
TO
APPROVE THE CORPORATION’S 2008 INCENTIVE STOCK PLAN
o FOR o
AGAINST o ABSTAIN
_____________________________________________________________
PROPOSAL
NO. 4
4.
TO
APPROVE FREED, MAXICK & BATTAGLIA, CPAS, PC. AS THE COMPANY’S INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING FEBRUARY 28,
2009.
o FOR o
AGAINST o ABSTAIN
_______________________________________________________________
PROPOSAL
NO. 5
5.
TRANSACT ANY OTHER BUSINESS THAT PROPERLY COMES BEFORE THE MEETING
o FOR oAGAINST o
ABSTAIN
_____________________________________________________________
31
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND WILL BE VOTED AS
DIRECTED THEREIN. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR
PROPOSAL 1.
|
Dated:
______________________, 2008
|
||
| Signature | Signature (Joint Owner) | |
NOTE:
Please sign exactly as your name(s) appear(s) on your stock certificate. If
shares of stock stand of record in the names of two or more persons or in the
name of husband and wife, whether as joint tenants or otherwise, both or all
of
such persons should sign the proxy. If shares of stock are held of record by
a
corporation, the proxy should be executed by the president or vice president
and
the secretary or assistant secretary. Executors, administrators or other
fiduciaries who execute the above proxy for a stockholder should give their
full
title. Please date the proxy.
32
Annex
A
Certificate
of Amendment
(Pursuant
to NRS 78.385 and 78.390)
Certificate
of Amendment to Articles of Incorporation
For
Nevada Profit corporations
(Pursuant
to NRS 78.385 and 78.390 – After
Issuance of
Stock)
1.
Name
of corporation: Biophan Technologies, Inc.
2.
The
articles have been amended as follows (provide article numbers, if available):
Article
3
is amended to read in its entirety as follows:
"3.
The
aggregate number of shares which the corporation shall have authority
to issue shall consist of 800,000,000 shares of Common Stock having a par value
of $0.005 per share. The Common Stock of the Company may be issued from time
to
time without prior approval by the stockholders. The Common Stock may be issued
for such consideration as may be fixed from time to time by the Board of
Directors."
3.
The
vote by which the stockholders holding such shares in the corporation
entitling
them to exercise at least a majority of the voting power, or such greater
proportion of the voting power as may be required in the case of a vote by
classes or series, or as may be required by the provisions of the * articles
of
incorporation have voted in favor of the amendment is: ____%.
4.
Effective date of filing (optional):
_______________________________________
(must
not
be later than 90 days after the certificate is filed)
5.
Officer Signature
(required):_______________________________________________
*If
any
proposed amendment would alter or change any preference or any relative or
other
right given to any class or series of outstanding shares, then the amendment
must be approved by the vote, in addition to the affirmative vote otherwise
required, of the holders of shares representing a majority of the voting power
of each class or series affected by the amendment regardless of limitations
or
restrictions on the voting power thereof.
IMPORTANT:
Failure to include any of the above information and submit the proper fees
may
cause this filing to be rejected.
33
Annex
B
Biophan
Technologies, Inc.
2008
Incentive Stock Plan
34
TABLE
OF CONTENTS
|
Page
|
||
|
Article
1.
|
Establishment,
Objectives, and Duration
|
1
|
|
Article
2.
|
Definitions
|
1
|
|
Article
3.
|
Administration
|
4
|
|
Article
4.
|
Shares
Subject to this Plan and Maximum Awards
|
5
|
|
Article
5.
|
Eligibility
and Participation
|
5
|
|
Article
6.
|
Stock
Options
|
6
|
|
Article
7.
|
Reserved
|
7
|
|
Article
8.
|
Stock
Awards
|
7
|
|
Article
9.
|
Reserved
|
8
|
|
Article
10.
|
Performance
Measures
|
8
|
|
Article
11.
|
Rights
of Participants
|
9
|
|
Article
12.
|
Termination
of Employment/Directorship
|
9
|
|
Article
13.
|
Change
in Control
|
10
|
|
Article
14.
|
Amendment,
Modification, and Termination
|
10
|
|
Article
15.
|
Withholding
|
10
|
|
Article
16.
|
Successors
|
11
|
|
Article
17.
|
General
Provisions
|
11
|
Article
1. Establishment, Objectives, and Duration
1.1 Establishment
of Plan.
Biophan
Technologies, Inc., a Nevada corporation
(the “Company”), hereby adopts the “Biophan Technologies, Inc. 2008 Incentive
Stock Plan” (hereinafter referred to as the “Plan”), as set forth in this
document. This Plan permits the grant of Nonqualified Stock Options,
Incentive Stock Options and Stock Awards. Subject to approval by the Company’s
stockholders, this Plan shall become effective as of the date on which this
Plan
is approved by the Board of Directors (the “Effective Date”).
1.2 Objectives
of Plan.
The
objectives of this Plan are to optimize the profitability and growth of the
Company through incentives that are consistent with the Company’s goals and that
link the personal interests of Participants to those of the Company’s
stockholders, to provide Participants with an incentive for excellence in
individual performance, and to promote teamwork among Participants.
This
Plan
is further intended to provide flexibility to the Company and its
Subsidiaries in their ability to motivate, attract, and retain the services
of
Participants who make significant contributions to the Company’s success and to
allow Participants to share in that success.
1.3 Duration
of Plan.
This
Plan shall remain in effect, subject to the right of the Committee to amend
or
terminate this Plan at any time pursuant to Article 14 hereof, until all
Shares subject to it shall have been purchased or acquired according to this
Plan’s provisions. However, in no event may an Award of an Incentive Stock
Option be granted under this Plan on or after the tenth (10th)
anniversary of the Effective Date.
Article
2. Definitions
Whenever
used in this Plan, the following terms shall have the meanings set forth below,
and when the meaning is intended, the initial letter of the word shall be
capitalized:
2.1 “Anniversary
Date” shall
mean the date on which a Director was elected or appointed to the
Board.
2.2 “Award”
means,
individually or collectively, a grant under this Plan of Nonqualified Stock
Options, Incentive Stock Options or Stock Awards.
2.3 “Award
Agreement”
means a
written or electronic agreement entered into by the Company and a Participant
setting forth the terms and provisions applicable to an Award granted under
this
Plan.
2.4 “Beneficial
Owner”
or
“Beneficial
Ownership”
shall
have the meaning ascribed to such term in Rule 13d-3 of the General Rules and
Regulations under the Exchange Act.
2.5 “Board”
or
“Board
of Directors”
means
the Board of Directors of the Company.
2.6 “Change
in Control” shall
be
deemed to have occurred under any one or more of the following
conditions:
| i. |
if,
within one year of any merger, consolidation, sale of a substantial
part
of the Company’s assets, or contested election, or any combination of the
foregoing transactions (a “Transaction”), the persons who were Directors
of the Company immediately before the Transaction shall cease to
constitute a majority of the Board of Directors (x) of the Company
or (y)
of any successor to the Company, or (z) if the Company becomes a
subsidiary of or is merged into or consolidated with another corporation,
of such corporation (the Company shall be deemed a subsidiary of
such
other corporation if such other corporation owns or controls, directly
or
indirectly, a majority of the combined voting power of the outstanding
shares of the capital stock of the Company entitled to vote generally
in
the election of directors (“Voting
Stock”));
|
| ii. |
if,
as a result of a Transaction, the Company does not survive as an
entity,
or its shares are changed into the shares of another corporation
unless
the stockholders of the Company immediately prior to the Transaction
own a
majority of the outstanding shares of such other corporation immediately
following the Transaction;
|
| iii. |
if
any Person becomes, after the date this Plan is adopted, a beneficial
owner directly or indirectly of securities of the Company representing
50%
or more of the combined voting power of the Company’s Voting
Stock;
|
| iv. |
the
dissolution or liquidation of the Company is approved by its stockholders;
or
|
| v. |
if
the members of the Board as of the date this Plan is adopted (the
“Incumbent Board”) cease to represent at least two-thirds of the Board;
provided, that any person becoming a director subsequent to the date
hereof whose election, or nomination for election by the Company’s
stockholders, was approved by at least two-thirds of the members
comprising the Incumbent Board (either by a specific vote or by approval
of the proxy statement in which such person is named as a nominee
for
director without objection to such nomination) shall be, for purposes
of
this paragraph (v), treated as though such person were a member of
the
Incumbent Board.
|
2.7 “Code”
means
the Internal Revenue Code of 1986, as amended from time to time.
2.8 “Committee”
means
the Compensation Committee of the Board or such other committee appointed from
time to time by the Board to administer this Plan. The full Board of Directors,
in its discretion, may act as the Committee under this Plan, whether or not
a
Committee has been appointed, and shall do so with respect to grants of Awards
to Non-Employee Directors. To the extent permitted by law, the Committee may
delegate to one or more members of the Committee or officers of the Company,
individually or acting as a committee, any portion of its authority, except
as
otherwise expressly provided in this Plan. In the event of a delegation to
one
or more members of the Committee or an officer, the term "Committee" as used
herein shall include the member or members of the Committee or officer with
respect to the delegated authority. Notwithstanding any such delegation of
authority, the Committee comprised of members of the Board of Directors and
appointed by the Board of Directors shall retain overall responsibility for
the
operation of this Plan.
2.9 “Company”
means
Biophan Technologies Inc., a Nevada corporation, together will all subsidiaries
thereof, and any successor thereto as provided in Article 16 hereof.
2.10 “Covered
Employee”
means a
Participant who, as of the date of vesting and/or payout of an Award, or the
date the Company or any of its Subsidiaries is entitled to a tax deduction
as a
result of the Award, as applicable, is one of the group of “covered employees,”
as defined in the regulations promulgated under Code Section 162(m), or any
successor statute.
2.11 “Director”
means
any individual who is a member of the Board of Directors of the Company;
provided, however, that any Director who is employed by the Company shall be
treated as an Employee under this Plan.
2.12 “Disability”
shall
mean a condition whereby the Participant is unable to engage in any substantial
gainful activity by reason of any medically determinable physical impairment
which can be expected to result in death or which is or can be expected to
last
for a continuous period of not less than twelve months, all as verified by
a
physician acceptable to, or selected by, the Company.
2.13 “Effective
Date”
shall
have the meaning ascribed to such term in Section 1.1 hereof.
2.14 “Employee”
means
any employee of the Company or its Subsidiaries.
2.15 “Exchange
Act”
means
the Securities Exchange Act of 1934, as amended from time to time, or any
successor act thereto.
-
2
-
2.16 “Fair
Market Value”
as of
any date and in respect of any Share means (i) if the Shares are listed on
a
national exchange, the closing price per Share of the Company’s Shares on such
stock exchange on such date, provided at least one sale of Shares took place
on
such exchange on such date, and, if not, then on the basis of the closing price
on the last preceding date on which at least one sale on such exchange did
occur, or (ii) if the Shares are not listed on a national exchange, the last
reported sale price per Share in the over-the-counter market on such date,
as
reported by the National Association of Securities Dealers, Inc. OTC Bulletin
Board, the National Quotation Bureau Incorporated or any similar organization
or
agency reporting prices in the over-the-counter market, or (iii) if the Shares
are not publicly traded, then the value as determined by the Committee in good
faith.
2.17 “Incentive
Stock Option”
or
“ISO”
means an
option to purchase Shares granted under Article 6 hereof and that is designated
as an Incentive Stock Option and that is intended to meet the requirements
of Code Section 422.
2.18 “Independent
Contractor”
means
a
person, including without limitation a member of the Company’s Scientific
Advisory Board or a consultant, engaged by the Company for a specific task,
study or project who is not an Employee.
2.19 “Insider”
shall
mean an individual who is, on the relevant date, an executive officer, director
or ten percent (10%) beneficial owner of any class of the Company’s equity
securities that is registered pursuant to Section 12 of the Exchange Act,
all as defined under Section 16 of the Exchange Act.
2.20 “Key
Employee”
shall
mean an individual as
defined in Code
Section 416(i)
(without
regard to paragraph
(5)
thereof)
of the Company.
2.21 “Non-Employee
Director”
shall
mean any Director who is not an employee of the Company or a member of the
immediate family of an employee of the Company.
2.22 “Nonqualified
Stock Option”
or
“NQSO”
means
an option to purchase Shares granted under Article 6 hereof that is
not intended to meet the requirements of Code Section 422, or that
otherwise does not meet such requirements.
2.23 “Option”
means an
Incentive Stock Option or a Nonqualified Stock Option.
2.24 “Option
Price”
means
the price at which a Share may be purchased by a Participant pursuant to an
Option.
2.25 “Participant”
means an
Employee, Director or Independent Contractor who has been selected to receive
an
Award or who has an outstanding Award granted under this Plan.
2.26 “Performance-Based
Exception”
means
the performance-based exception from the tax deductibility limitations of Code
Section 162(m).
2.27 “Period
of Restriction”
means
the period during which the transfer of Shares of Restricted Stock is limited
in
some way (based on the passage of time, the achievement of performance goals,
or
upon the occurrence of other events as determined by the Committee, at its
discretion), and the Shares are subject to a substantial risk of forfeiture,
pursuant to the Restricted Stock Award Agreement, as provided in Article 8
hereof.
2.28 “Person”
shall
have the meaning ascribed to such term in Section 3(a)(9) of the Exchange
Act and used in Sections 13(d) and 14(d) thereof and the rules promulgated
thereunder, including a “group” as defined in Section 13(d) thereof and the
rules promulgated.
2.29 “Restricted
Stock”
means a
Stock Award granted to a Participant that is subject to conditions established
by the Board or the Committee as set forth in the Restricted Stock Award
Agreement, which may include, but are not limited to, continuous service with
the Company, achievement of specific business objectives and other measurements
of Company performance.
-
3
-
2.30 “Retirement"
means
termination of a Participant’s employment with the Company if such termination
of employment constitutes normal retirement, early retirement, disability
retirement or other retirement as provided for at the time of such termination
of employment under the applicable retirement program then maintained by the
Company, provided that the Participant does not continue in the employment
of
the Company.
2.31 “Securities
Act”
means
the Securities Act of 1933, as amended from time to time, or any successor
act
thereto.
2.32 “Shares”
means
shares of the Company’s common stock, par value $.0005 per share.
2.33 “Stock
Awards”
means a
grant of Restricted Stock or other Shares to a Participant pursuant to Article
8.
2.34 “Subsidiary”
means
any corporation, partnership, joint venture, or other entity in which the
Company, directly or indirectly, has a majority voting interest. With respect
to
Incentive Stock Options, “Subsidiary” means any entity, domestic or foreign,
whether or not such entity now exists or is hereafter organized or acquired
by
the Company or by a Subsidiary that is a “subsidiary corporation” within the
meaning of Code Section 424(d) and the rules thereunder.
2.35 “Ten
Percent Stockholder”
means an
employee who at the time an ISO is granted owns or is treated as owning under
the applicable Treasury Regulations, Shares possessing more than ten percent
of
the total combined voting power of all classes of Shares of the Company or
any
Subsidiary, within the meaning of Code Section 422.
Article
3. Administration
3.1 General.
Subject
to the terms and conditions of this Plan, this Plan shall be administered by
the
Committee. The members of the Committee shall be appointed from time to time
by,
and shall serve at the discretion of, the Board of Directors. The Committee
shall have the authority to delegate administrative duties to officers of the
Company. For purposes of making Awards intended to qualify for the Performance
Based Exception under Code Section 162(m), to the extent required under such
Code Section, the Committee shall be comprised solely of two or more individuals
who are “outside directors”, as that term is defined in Code Section 162(m) and
the regulations thereunder.
3.2 Authority
of the Committee.
Except
as limited by law or by the Certificate of Incorporation or Bylaws of the
Company, and subject to the provisions hereof, the Committee shall have full
power to select Employees, Directors and Independent Contractors who shall
be
offered the opportunity to participate in this Plan; determine the sizes and
types of Awards; determine the terms and conditions of Awards in a manner
consistent with this Plan; construe and interpret this Plan and any agreement
or
instrument entered into under this Plan; establish, amend, or waive rules and
regulations for this Plan’s administration; and amend the terms and conditions
of any outstanding Award as provided in this Plan. Further, the Committee shall
make all other determinations that it deems necessary or advisable for the
administration of this Plan. As permitted by law and the terms of this Plan,
the
Committee may delegate its authority herein to officers of the Company. No
member of the Committee shall be liable for any action taken or decision made
in
good faith relating to this Plan or any Award granted hereunder.
3.3 Decisions
Binding.
All
determinations and decisions made by the Committee pursuant to the provisions
of
this Plan and all related orders and resolutions of the Committee shall be
final, conclusive, and binding on all persons, including the Company, its
stockholders, Directors, Employees, Participants, and their estates and
beneficiaries, unless changed by the Board.
-
4
-
Article
4. Shares Subject to this Plan and Maximum Awards
4.1 Number
of Shares Available for Grants.
Subject
to adjustment as provided in Section 4.2 hereof, the number of Shares
hereby reserved for issuance to Participants under this Plan shall be ten
million (10,000,000). Of such ten million Shares, one million (1,000,000) Shares
may be issued through Incentive Stock Options and nine million (9,000,000)
Shares may be issued through Stock Awards and Non-Qualified Stock Options.
Any
Shares covered by an Award (or portion of an Award) granted under this Plan
which is forfeited or canceled or expires shall be deemed not to have been
delivered for purposes of determining the maximum number of Shares available
for
delivery under this Plan. Shares may be authorized, unissued shares or Treasury
shares. The Committee shall determine the appropriate methodology for
calculating the number of Shares issued pursuant to this Plan. The maximum
aggregate number of Shares that may be granted pursuant to Awards granted in
any
one fiscal year to any one Participant shall be 1,000,000.
4.2 Adjustments
in Authorized Shares.
Upon a
change in corporate capitalization, such as a stock split, stock dividend or
a
corporate transaction, such as any merger, consolidation, combination,
exchange of shares or the like, separation, including a spin-off, or other
distribution of stock or property of the Company, any reorganization (whether
or
not such reorganization comes within the definition of such term in Code Section
368) or any partial or complete liquidation of the Company, a proportionate
adjustment shall be made in (i) the number and class of Shares available under
this Plan, in the number and class of and/or price of Shares subject to
outstanding Awards granted under this Plan, and in all references to numbers
of
Shares set forth in this Plan, as may be determined to be appropriate and
equitable by the Committee, in its sole discretion, to prevent dilution or
enlargement of rights.
4.3 Adjustment
of Awards Upon the Occurrence of Certain Unusual or Nonrecurring
Events.
The
Committee may make adjustments in the terms and conditions of, and the criteria
included in, Awards in recognition of unusual or nonrecurring events (including,
without limitation, the events described in Section 4.2 hereof) affecting the
Company or the financial statements of the Company or of changes in applicable
laws, regulations, or accounting principles, whenever the Committee determines
that such adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under this Plan; provided that, unless the Committee determines otherwise at
the
time such adjustment is considered, no such adjustment shall be authorized
to
the extent that such authority would be inconsistent with this Plan’s or any
Award’s meeting the requirements of Section 162(m) of the Code, as from time to
time in effect.
Article
5. Eligibility and Participation
5.1 Eligibility.
Persons
eligible to participate in this Plan include all Employees, Directors and
Independent Contractors of the Company and its Subsidiaries.
5.2 Actual
Participation.
Subject
to the provisions of this Plan, the Committee may, from time to time, select
from all eligible Employees, Directors and Independent Contractors, those to
whom Awards shall be granted and shall determine the nature and amount of each
Award, provided that Incentive Stock Options shall only be awarded to Employees
of the Company or its Subsidiaries.
5.3 Awards
for Non-Employee Directors
|
(a)
|
Each
person who, subsequent to the Effective Date, is for the first time
elected or appointed to the Board and who qualifies, at such time,
as a
Non-Employee Director, shall automatically be granted a Stock Award
of
150,000 Shares of Restricted Stock, effective as of the date of his
or her
election or appointment to the Board, on the terms and conditions
set
forth in this Plan. All Restricted Stock awarded pursuant to this
Section
5.3(a) shall vest upon the completion by such Non-Employee Director
of one
(1) year of board service measured from the date of
grant.
|
|
(b)
|
Each
Non-Employee Director who remains a Director continuously during
the one
year period beginning on: (i) the date of his or her election or
appointment to the Board; or (2) his or her Anniversary Date and
ending on
the next Anniversary Date shall be granted a Nonqualified Stock Option
to
purchase 40,000 Shares, on the terms and conditions set forth in
this
Plan, at an option price per Share equal to the Fair Market Value
of a
Share on the date of such grant.
|
-
5
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|
(c)
|
Each
Option granted to a Non-Employee Director pursuant to Section 5.3(b)
shall
vest and become fully exercisable upon the completion by such Non-Employee
Director of one year of Board service measured from the date of grant.
All
Options granted to Non-Employee Directors pursuant to Section 5.3(b)
shall
expire on the tenth (10th)
anniversary of the date of grant, subject to earlier termination
as
provided in Article 12.
|
|
(d)
|
The
right of Non-Employee Directors to receive Awards pursuant to this
Section
5.3 shall be in lieu of all rights to receive options automatically
under
the Company’s 2001 Stock Option Plan (2005 Restatement), the Company’s
2006 Incentive Stock Plan or any other plan that does not specifically
provide that such options or other Award are in lieu of or in addition
to
the Stock Awards to which the Non-Employee Directors are entitled
under
this Plan.
|
Article
6. Stock Options
6.1 Grant
of Options.
Subject
to the terms and provisions of this Plan, Options may be granted to Participants
in such number, and upon such terms, and at any time and from time to time
as shall be determined by the Committee.
6.2 Award
Agreement.
Each
Option grant shall be evidenced by an Award Agreement that shall specify the
Option Price, the duration of the Option, the number of Shares to which the
Option pertains, and such other provisions as the Committee shall determine
which are not inconsistent with the terms of this Plan.
6.3 Option
Price.
The
Option Price for each grant of an Option under this Plan shall be as determined
by the Committee; provided, however, the per-share exercise price shall not
be
less than the Fair Market Value of the Shares on the date of grant. The Option
Price for each Option shall equal the Fair Market Value of the Shares at the
time such option is granted. If an ISO is granted to a Ten Percent Stockholder
the Option Price shall be at least 110 percent of the Fair Market Value of
the
stock subject to the ISO.
6.4 Duration
of Options.
Except
as otherwise provided in this Plan, each Option granted to a Participant shall
expire at such time as the Committee shall determine at the time of grant,
provided that an ISO must expire no later than the tenth (10th) anniversary
of
the date the ISO was granted. However, in the case of an ISO granted to a Ten
Percent Stockholder, the ISO by its terms shall not be exercisable after the
expiration of five years from the date such ISO is granted.
6.5 Exercise
of Options.
Options
shall be exercisable at such times and be subject to such restrictions and
conditions as the Committee shall in each instance approve, which need not
be
the same for each grant or for each Participant.
6.6 Payment.
Options
shall be exercised by the delivery of a written, electronic or telephonic notice
of exercise to the Company or its designated agent, setting forth the number
of
Shares with respect to which the Option is to be exercised, accompanied by
full
payment of the Option Price for the Shares.
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6
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Upon
the
exercise of any Option, the Option Price for the Shares being purchased pursuant
to the Option shall be payable to the Company in full either: (a) in cash
or its equivalent; or (b) subject
to the Committee’s approval, by delivery of previously acquired Shares having an
aggregate Fair Market Value at the time of exercise equal to the total Option
Price (provided that the Shares that are delivered must have been held by the
Participant for at least six (6) months prior to their delivery to satisfy
the
Option Price); or (c) by a combination of (a) and (b); or (d) by any
other method approved by the Committee in its sole discretion. Unless otherwise
determined by the Committee, the delivery of previously acquired Shares may
be
done through attestation. No fractional shares may be tendered or accepted
in
payment of the Option Price.
Unless
otherwise determined by the Committee, cashless exercises are permitted pursuant
to Federal Reserve Board’s Regulation T, subject to applicable securities
law restrictions, or by any other means which the Committee determines to be
consistent with this Plan’s purpose and applicable law.
Subject
to any governing rules or regulations, as soon as practicable after receipt
of
notification of exercise and full payment, the Company shall deliver to the
Participant, in the Participant’s name, Share certificates in an appropriate
amount based upon the number of Shares purchased pursuant to the
Option(s).
Unless
otherwise determined by the Committee, all payments under all of the methods
indicated above shall be paid in United States dollars.
6.7 Restrictions
on Share Transferability.
The
Committee may impose such restrictions on any Shares acquired pursuant to the
exercise of an Option granted under this Article 6 as it may deem advisable,
including, without limitation, restrictions under applicable federal securities
laws, under the requirements of any stock exchange or market upon which such
Shares are then listed and/or traded, or under any blue sky or state
securities laws applicable to such Shares.
6.8 Nontransferability
of Options.
| (a) |
Incentive
Stock Options.
No ISO granted under this Plan may be sold, transferred, pledged,
assigned, encumbered or otherwise alienated or hypothecated, other
than by
will or by the laws of descent and distribution. Further, all ISOs
granted
to a Participant under this Plan shall be exercisable during such
Participant’s lifetime only by such
Participant.
|
|
(b)
|
Nonqualified
Stock Options.
Except as otherwise provided in the applicable Award Agreement, no
NQSO
may be sold, transferred, pledged, assigned, encumbered or otherwise
alienated or hypothecated, other than by will or by the laws of descent
and distribution. Further, except as otherwise provided in the applicable
Award Agreement, all NQSOs granted to a Participant shall be exercisable
during such Participant’s lifetime only by such
Participant.
|
6.9 Special
Limitation on Grants of Incentive Stock Options. No
ISO
shall be granted to an Employee under this Plan or any other ISO plan of the
Company or its Subsidiaries to purchase Shares as to which the aggregate Fair
Market Value (determined as of the date of grant) of the Shares which first
become exercisable by the Employee in any calendar year exceeds $100,000. To
the
extent an Option initially designated as an ISO exceeds the value limit of
this
Section 6.9 or otherwise fails to satisfy the requirements applicable to
ISOs, it shall be deemed a NQSO and shall otherwise remain in full force and
effect.
Article
7. Reserved
Article
8. Stock Awards
8.1 Grant
of Stock Awards.
Subject
to the terms and provisions of this Plan, the Committee, at any time and from
time to time, may grant Stock Awards to Participants in such amounts as the
Committee shall determine. All or any part of any Stock Award may, but need
not
be, Restricted Stock.
8.2 Restricted
Stock Agreement.
Each
Restricted Stock grant shall be evidenced by a Restricted Stock Award Agreement
that shall specify the Period(s) of Restriction, the number of Shares of
Restricted Stock granted, and such other provisions as the Committee shall
determine which are not inconsistent with the terms of this Plan.
8.3 Transferability.
Except
as provided in the Award Agreement, the Shares of Restricted Stock granted
herein may not be sold, transferred, pledged, assigned, encumbered, or otherwise
alienated or hypothecated until the end of the applicable Period of Restriction
established by the Committee and specified in the Restricted Stock Award
Agreement, or upon earlier satisfaction of any other conditions, as specified
by
the Committee in its sole discretion and set forth in the Restricted Stock
Award
Agreement. All rights with respect to the Restricted Stock granted to a
Participant under this Plan shall be available during such Participant’s
lifetime and prior to the end of the Period of Restriction only to such
Participant.
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7
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8.4 Other
Restrictions.
The
Committee may impose such other conditions and/or restrictions on any Shares
of
Restricted Stock granted pursuant to this Plan as it may deem advisable
including, without limitation, a requirement that Participants pay a stipulated
purchase price for each Share of Restricted Stock, restrictions based upon
the
achievement of specific performance goals, time-based restrictions on vesting
following the attainment of the performance goals, time-based restrictions,
and/or restrictions under applicable federal or state securities
laws.
To
the
extent deemed appropriate by the Committee, the Company may retain the
certificates representing Shares of Restricted Stock in the Company’s possession
until such time as all conditions and/or restrictions applicable to such Shares
have been satisfied.
Except
as
otherwise provided in the Award Agreement, Shares of Restricted Stock covered
by
each Restricted Stock grant made under this Plan shall become freely
transferable by the Participant after the last day of the applicable Period
of
Restriction.
8.5 Voting
Rights.
If the
Committee so determines, Participants holding Shares of Restricted Stock granted
hereunder may be granted the right to exercise full voting rights with respect
to those Shares during the Period of Restriction.
8.6 Dividends
and Other Distributions.
During
the Period of Restriction, Participants holding Shares of Restricted Stock
granted hereunder (whether or not the Company holds the certificate(s)
representing such Shares) may, if the Committee so determines, be credited
with
dividends paid with respect to the underlying Shares while they are so held.
The
Committee may apply any restrictions to the dividends that the Committee deems
appropriate. Without limiting the generality of the preceding sentence, if
the
grant or vesting of Restricted Shares granted to a Covered Employee is
designed to comply with the requirements of the Performance-Based Exception,
the
Committee may apply any restrictions it deems appropriate to the payment of
dividends declared with respect to such Restricted Shares, such that the
dividends and/or the Restricted Shares maintain eligibility for the
Performance-Based Exception.
Article
9. Reserved.
Article
10. Performance Measures
Unless
and until the Committee proposes for stockholder vote and the Company’s
stockholders approve a change in the general performance measures set forth
in
this Article 10, the attainment of which may determine the degree of payout
and/or vesting with respect to Awards to Covered Employees that are designed
to
qualify for the Performance-Based Exception, the performance measure(s) to
be
used for purposes of such grants shall be chosen from among:
| (a) |
Earnings
per share;
|
| (b) |
Net
income (before or after taxes);
|
| (c) |
Cash
flow (including, but not limited to, operating cash flow and free
cash
flow);
|
| (d) |
Gross
revenues;
|
| (e) |
Gross
margins;
|
| (f) |
EBITDA;
and
|
| (g) |
Any
of the above measures compared to peer or other
companies.
|
| (h) |
Scientific
milestones and objectives
|
| (i) |
Cost
containment goals
|
| (j) |
Achievement
of other business objectives
|
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8
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Performance
measures may be set either at the corporate level, subsidiary level, division
level, or business unit level.
Awards
that are designed to qualify for the Performance-Based Exception, and that
are
held by Covered Employees, may not be adjusted upward (the Committee shall
retain the discretion to adjust such Awards downward).
If
applicable tax and/or securities laws change to permit Committee discretion
to
alter the governing performance measures without obtaining stockholder approval
of such changes, the Committee shall have sole discretion to make such changes
without obtaining stockholder approval.
Article
11. Rights of Participants
11.1 Employment.
Nothing
in this Plan shall confer upon any Participant any right to continue as an
Employee, Director or Independent Contractor of the Company or its Subsidiaries,
or interfere with or limit in any way the right of the Company or its
Subsidiaries to terminate any Participant’s employment, directorship or
engagement as an Independent Contractor at any time.
11.2 Participation.
Except
as expressly provided in Section 5.3 with respect to Non-Employee Directors,
no
Employee, Director or Independent Contractor shall have the right to be selected
to receive an Award under this Plan, or, having been so selected, to be selected
to receive any future Award.
11.3 Rights
as a Stockholder.
Except
as provided in Sections 8.5 and 8.6 or in applicable Award Agreement consistent
with such Sections, a Participant shall have none of the rights of a stockholder
with respect to shares of Common Stock covered by any Award until the
Participant becomes the record holder of such Shares, or the Period of
Restriction has expired, as applicable.
Article
12. Termination of Employment/Directorship/Consultancy
Upon
termination of the Participant's employment, directorship or service as a member
of the Company’s Scientific Advisory Board for any reason other than Retirement,
Disability or death, an Award granted to the Participant may be exercised by
the
Participant or permitted transferee at any time on or prior to the earlier
of
the expiration date of the Award or the expiration of three (3) months after
the
date of termination but only if, and to the extent that, the Participant was
entitled to exercise the Award at the date of termination. All Awards or any
portion thereof not yet vested or exercisable or whose Period of Restriction
has
not expired as of the date of termination (other than a termination by reason
of
Retirement, Disability or death) shall terminate and be forfeited immediately
on
the date of termination. If the employment or directorship of a Participant
terminates by reason of the Participant's Retirement, Disability or death,
all
Awards or any portion thereof not yet vested or exercisable or whose Period
of
Restriction has not expired as of the date of a Participant’s Disability or
death shall become immediately vested and/or exercisable on the date of
termination due to Retirement, Disability or death. If the employment or
directorship of a Participant terminates by reason of the Participant's
Retirement, Disability or death, the Participant (or, if appropriate, the
Participant's legal representative or permitted transferee) may exercise such
Participant’s rights under any outstanding Award at any time on or prior to the
original expiration date of the Award; provided, however, that if an Award
is an
ISO, the Participant (or, if appropriate, the Participant's legal representative
or permitted transferee) may exercise such Participant’s rights under any
outstanding Award at any time on or prior to the earlier of (i) the original
expiration date of the Award or (ii) (A) in the case of Retirement, the
expiration of three (3) months after the date of termination or (B) in the
case
of Disability or death, the first anniversary of the date of
termination.
Unless
otherwise determined by the Committee, an authorized leave of absence pursuant
to a written agreement or other leave entitling an Employee to reemployment
in a
comparable position by law or rule shall not constitute a termination of
employment for purposes of this Plan unless the Employee does not return at
or
before the end of the authorized leave or within the period for which
re-employment is guaranteed by law or rule. For purposes of this Article, a
“termination” includes an event which causes a Participant to lose his
eligibility to participate in this Plan (e.g., an individual is employed by
a
company that ceases to be a Subsidiary). In the case of an Independent
Contractor, the meaning of “termination” or “termination of employment” includes
the date that the individual ceases to provide services to the Company or its
Subsidiaries. In the case of a nonemployee director, the meaning of
“termination” includes the date that the individual ceases to be a director of
the Company or its Subsidiaries.
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9
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Notwithstanding
the foregoing, the Committee has the authority to prescribe different rules
that
apply upon the termination of a particular Participant’s service as an Employee,
Director or Independent Contractor, which shall be memorialized in the
Participant’s original or amended Award Agreement or similar
document.
An
Award
that remains unexercised after the latest date it could have been exercised
under any of the foregoing provisions or under the terms of the Award shall
be
forfeited.
Article
13. Change in Control
In
the
event of a Change in Control, unless otherwise specifically prohibited under
applicable laws, or by the rules and regulations of any governing governmental
agencies or national securities exchange or trading system, or unless the
Committee shall otherwise specify in the Award Agreement, the Board, in its
sole
discretion, may:
| (a) |
elect
to terminate Options in exchange for a cash payment equal to the
amount by
which the Fair Market Value of the Shares subject to such Option
to the
extent the Option has vested exceeds the exercise price with respect
to
such Shares;
|
| (b) |
elect
to terminate Options provided that each Participant is first notified
of
and given the opportunity to exercise his/her vested Options for
a
specified period of time (of not less than 15 days) from the date
of
notification and before the Option is
terminated;
|
| (c) |
permit
Awards to be assumed by a new parent corporation or a successor
corporation (or its parent) and replaced with a comparable Award
of the
parent corporation or successor corporation (or its
parent);
|
| (d) |
amend
an Award Agreement or take such other action with respect to an Award
that
it deems appropriate; or
|
| (e) |
implement
any combination of the foregoing.
|
Article
14. Amendment, Modification, and Termination
14.1 Amendment,
Modification, and Termination.
Subject
to the terms of this Plan, the Board may at any time and from time to time,
alter, amend, suspend, or terminate this Plan in whole or in
part.
14.2 Awards
Previously Granted.
Notwithstanding any other provision of this Plan to the contrary, no
termination, amendment, or modification of this Plan shall adversely affect
in any material way any Award previously granted under this Plan, without
the written consent of the Participant holding such Award.
14.3 Stockholder
Approval Required for Certain Amendments. Stockholder
approval will be required for any amendment of this Plan that does any of the
following: (a) increases the maximum number of Shares subject to this Plan;
(b)
changes the designation of the class of persons eligible to receive ISOs under
this Plan; or (c) modifies this Plan in a manner that requires stockholder
approval under applicable law or the rules of a stock exchange or trading system
on which Shares are traded.
Article
15. Withholding
The
Company shall have the power and the right to deduct or withhold, or require
a
Participant to remit to the Company, an amount sufficient to satisfy any
applicable taxes (including social security or social charges), domestic or
foreign, required by law or regulation to be withheld with respect to any
taxable event arising as a result of this Plan. The
Participant may satisfy, totally or in part, such Participant’s obligations
pursuant to this Section 15 by electing to have Shares withheld, to redeliver
Shares acquired under an Award, or to deliver previously owned Shares that
have
been held for at least six (6) months, provided that the election is made in
writing on or prior to (i) the date of exercise, in the case of Options, and
(ii) the expiration of the Period of Restriction in the case of Restricted
Stock. Any election made under this Section 15 may be disapproved by the
Committee at any time in its sole discretion. If an election is disapproved
by
the Committee, the Participant must satisfy his obligations pursuant to this
paragraph in cash.
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10
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Article
16. Successors
All
obligations of the Company under this Plan with respect to Awards granted
hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
through merger, consolidation, or otherwise, of all or substantially all of
the
business, stock and/or assets of the Company.
Article
17. General Provisions
17.1 Gender
and Number.
Except
where otherwise indicated by the context, any masculine term used herein also
shall include the feminine; the plural shall include the singular and the
singular shall include the plural.
17.2 Severability.
If any
provision of this Plan shall be held illegal or invalid for any reason, the
illegality or invalidity shall not affect the remaining parts of this Plan,
and
this Plan shall be construed and enforced as if the illegal or invalid provision
had not been included.
17.3 Requirements
of Law.
The
granting of Awards and the issuance of Shares under this Plan shall be subject
to all applicable laws, rules, and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required.
17.4 Securities
Law Compliance.
With
respect to Insiders, transactions under this Plan are intended to comply with
all applicable conditions of Rule 16b-3 or its successors under the
Exchange Act, unless determined otherwise by the Board. To the extent any
provision of this Plan or action by the Committee fails to so comply, it shall
be deemed null and void, to the extent permitted by law and deemed advisable
by
the Board.
17.5 Registration.
The
Company shall use reasonable endeavors to register Shares issued pursuant to
Awards under the Securities Act on Form S-8 or other suitable Form and to effect
compliance with the registration, qualification, and listing requirements of
any
state or foreign securities laws, stock exchange, or trading
system.
17.6 Inability
to Obtain Authority.
The
inability of the Company to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Company’s counsel to be necessary
to the lawful issuance and sale of any Shares hereunder, shall relieve the
Company of any liability in respect of the failure to issue or sell such Shares
as to which such requisite authority shall not have been obtained.
17.7 No
Additional Rights.
Neither
the Award nor any benefits arising under this Plan shall constitute part of
an
employment contract between the Participant and the Company or any Subsidiary,
and accordingly, subject to Section 14.2, this Plan and the benefits
hereunder may be terminated at any time in the sole and exclusive discretion
of
the Committee without giving rise to liability on the part of the Company for
severance payments.
17.8 Noncertificated
Shares.
To the
extent that this Plan provides for issuance of certificates to reflect the
transfer of Shares, the transfer of such Shares may be effected on a
noncertificated basis, to the extent not prohibited by applicable law or the
rules of any stock exchange or trading system.
17.9 Governing
Law.
This
Plan and each Award Agreement shall be governed by the laws of Nevada, excluding
any conflicts or choice of law rule or principle that might otherwise refer
construction or interpretation of this Plan to the substantive law of another
jurisdiction. Unless otherwise provided in the Award Agreement, recipients
of an
Award under this Plan are deemed to submit to the exclusive jurisdiction and
venue of the federal or state courts whose jurisdiction covers Rochester, New
York, to resolve any and all issues that may arise out of or relate to this
Plan
or any related Award Agreement.
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11
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17.10 Compliance
with Code Section 409A.
No
Award that is subject to Section 409A of the Code shall provide for deferral
of
compensation that does not comply with Section 409A of the Code, unless the
Board, at the time of grant, specifically provides that the Award is not
intended to comply with Section 409A of the Code. Notwithstanding any provision
in this Plan to the contrary, with respect to any Award subject to Section
409A,
distributions on account of a separation from service may not be made to Key
Employees before the date which is six (6) months after the date of separation
from service (or, if earlier, the date of death of the employee).
|
Dated
as of February 1, 2008
|
Biophan
Technologies, Inc.
|
|
|
By:
|
/s/
John F. Lanzafame
|
|
|
John
F. Lanzafame
|
||
|
|
|
Chief
Executive Officer
|
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12
-
BIOPHAN
TECHNOLOGIES, INC.
AWARD
AGREEMENT UNDER
2008
INCENTIVE STOCK PLAN
This
Award Agreement ("Agreement")
is
made and entered into as of the date set forth below, by and between
BIOPHAN
TECHNOLOGIES, INC., a Nevada corporation (the "Company"),
and the
employee of the Company named in Section 1(c). ("Employee"):
In
consideration of the covenants herein set forth, the parties hereto agree as
follows:
1.
Award
Information.
(a) Type
of
Award (stock, option, etc.): _________________
(b) Date
of
Award: __________________
(c) Name
of
Employee: __________________
(d) Number
of
Shares Covered by Award: _______________
(d) Exercise
Price (if any): ______________
2.
Acknowledgements.
(a)
Employee is an employee of the Company.
(b) The
Board
of Directors (the "Board"
which
term shall include an authorized committee of the Board of Directors) and
shareholders of the Company have heretofore adopted a 2008 Incentive Stock
Plan
(the "Plan"),
pursuant to which this Award is being granted.
(c) The
Board
has authorized the granting to Employee of an Award under the Plan, in the
form
of incentive stock options (the "Options")
as
defined in Section 422 of the Internal Revenue Code of 1986, as amended, (the
"Code")
to
purchase shares of common stock of the Company ("Stock")
upon
the terms and conditions hereinafter stated and pursuant to an exemption from
registration under the Securities Act of 1933, as amended (the "Securities
Act")
provided by Rule 701 thereunder.
3.
Shares;
Price.
The
Company hereby grants to Employee the right to purchase, upon and subject to
the
terms and conditions herein stated, the number of shares of Stock set forth
in
Section 1(d) above (the "Shares")
for
cash (or other consideration as is authorized under the Plan and acceptable
to
the Board, in their sole and absolute discretion) at the price per Share set
forth in Section 1(e) above (the "Exercise
Price"),
such
price being not less than the fair market value per share of the Shares covered
by the Options as of the date hereof (unless Employee is the owner of Stock
possessing ten percent or more of the total voting power or value of all
outstanding Stock of the Company, in which case the Exercise Price shall be
no
less than 110% of the fair market value of such Stock on the date
hereof).
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13
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4.
Term
of the Options; Continuation of Employment.
The
Options shall expire, and all rights hereunder to purchase the Shares shall
terminate five (5) from the date hereof. The Options shall earlier terminate
subject to Sections 7 and 8 hereof upon, and as of the date of, the termination
of Employee's employment if such termination occurs prior to the end of such
five (5) year period. Nothing contained herein shall confer upon Employee the
right to the continuation of his or her employment by the Company or to
interfere with the right of the Company to terminate such employment or to
increase or decrease the compensation of Employee from the rate in existence
at
the date hereof.
5.
Vesting
of Award; Option.
Subject
to the provisions of Sections 7 and 8 hereof, the Award (and, if Options, the
Options) shall vest (and Options shall become exercisable) during the term
of
Employee's employment in four (4) equal annual installments of twenty-five
percent (25%) of the Shares (or the Options, as the case may be) the first
installment of which shall be vested (and, in the case of Options, exercisable)
on the six (6) month anniversary of the date of this Agreement (the "Initial
Vesting Date"), with an additional twenty-five percent (25%) of such Shares
(or
Options, exercisable) on each of the three (3) successive anniversaries of
the
Initial Vesting Date. The installments shall be cumulative (i.e., this option
may be exercised, as to any or all Shares covered by an installment, at any
time
or times after an installment becomes exercisable and until expiration or
termination of this option). Additionally, and notwithstanding any other
provisions of this Agreement to the contrary, the Shares (or Options, as the
case may be) shall become fully vested (and the Options fully exercisable)
upon
the death or the Disability (as defined in the Plan) of the Employee, or in
the
event of a Change in Control (as defined in the Plan).
6.
Exercise.
The
Options shall be exercised by delivery to the Company of (a) written notice
of
exercise stating the number of Shares being purchased (in whole shares only)
and
such other information set forth on the form of Notice of Exercise attached
hereto as Appendix A, (b) a check or cash in the amount of the Exercise Price
of
the Shares covered by the notice (or such other consideration as has been
approved by the Board of Directors consistent with the Plan) and (c) a written
investment representation as provided for in Section 13 hereof. Notwithstanding
anything to the contrary contained in this Agreement, the Options may be
exercised by presentation and surrender to the Company of the Options to be
exercised, at its principal executive offices, with a written notice of the
holder’s intention to effect a cashless exercise, including a calculation of the
number of shares of Common Stock to be issued upon such exercise in accordance
with the terms hereof (a “Cashless Exercise”). In the event of a Cashless
Exercise, in lieu of paying the Exercise Price in cash, the holder shall
surrender the Options for that number of shares of Common Stock determined
by
multiplying the number of Shares to which it would otherwise be entitled by
a
fraction, the numerator of which shall be the difference between the then
current Market Price per share of the Common Stock and the Exercise Price,
and
the denominator of which shall be the then current Market Price per share of
Common Stock. For example, if the holder is exercising 100,000 Options with
a
per Share exercise price of $0.75 per share through a cashless exercise when
the
Common Stock’s current Market Price per share is $2.00 per share, then upon such
Cashless Exercise the holder will receive 62,500 shares of Common Stock. Market
Price is defined as the average of the last reported sale prices on the
principal trading market for the Common Stock during the five (5) trading days
immediately preceding such date. The
Options shall not be assignable or transferable, except by will or by the laws
of descent and distribution, and shall be exercisable only by Employee during
his or her lifetime, except as provided in Section 8 hereof.
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14
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7.
Termination
of Employment.
If
Employee shall cease to be employed by the Company for any reason, whether
voluntarily or involuntarily, other than by his or her death, Employee (or
if
the Employee shall die after such termination, but prior to such exercise date,
Employee's personal representative or the person entitled to succeed to the
Options) shall have the right at any time within three (3) months following
such
termination of employment or the remaining term of this Option, whichever is
the
lesser, to exercise in whole or in part the Options to the extent, but only
to
the extent, that the Options were exercisable as of the date of termination
of
employment and had not previously been exercised; provided, however: (i) if
Employee is permanently disabled (within the meaning of Section 22(e)(3) of
the
Code) at the time of termination, the foregoing three (3) month period shall
be
extended to six (6) months; or (ii) if Employee is terminated "for
cause"
or by
the terms of the Plan or this Option Agreement or by any employment agreement
between the Employee and the Company, the Options shall automatically terminate
as to all Shares covered by the Options not exercised prior to termination.
Unless earlier terminated, all rights under this Agreement shall terminate
in
any event on the expiration date of the Options as defined in Section 4
hereof.
8.
Death
of Employee.
If the
Employee shall die while in the employ of the Company, then all of Employee’s
Shares (or Options, as the case may be) shall vest and Employee's personal
representative or the person entitled to Employee's rights hereunder may at
any
time within six (6) months after the date of Employee's death, or during the
remaining term of the Options, whichever is the lesser, exercise the Options
and
purchase Shares to the extent, but only to the extent, that Employee could
have
exercised the Options as of the date of Employee's death if fully vested at
that
time.
9.
No
Rights as Shareholder.
Employee
shall have no rights as a shareholder with respect to the Shares covered by
any
of the Options until the effective date of issuance of Shares following exercise
of the Options, and no adjustment will be made for dividends or other rights
for
which the record date is prior to the date such stock certificate or
certificates are issued except as provided in Section 10 hereof.
10.
Recapitalization.
Subject
to any required action by the shareholders of the Company, the number of Shares
covered by the this Award (or the Shares covered by the Options, if the award
is
a grant of Options, and the Exercise Price thereof), shall be proportionately
adjusted for any increase or decrease in the number of issued shares resulting
from a subdivision or consolidation of shares or the payment of a stock
dividend, or any other increase or decrease in the number of such shares
effected without receipt of consideration by the Company; provided however
that
the conversion of any convertible securities of the Company shall not be deemed
having been "effected
without receipt of consideration by the Company".
In
the
event of a proposed dissolution or liquidation of the Company, a merger or
consolidation in which the Company is not the surviving entity, or a sale of
all
or substantially all of the assets or capital stock of the Company
(collectively, a "Reorganization"),
unless otherwise provided by the Board, the Options shall become fully vested
and exercisable immediately prior to such date.
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15
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Subject
to any required action by the shareholders of the Company, if the Company shall
be the surviving entity in any merger or consolidation, the Options thereafter
shall pertain to and apply to the securities to which a holder of Shares equal
to the Shares subject to the Options would have been entitled by reason of
such
merger or consolidation, and the installment provisions of Section 5 shall
continue to apply.
In
the
event of a change in the shares of the Company as presently constituted, which
is limited to a change of all of its authorized Stock without par value into
the
same number of shares of Stock with a par value, the shares resulting from
any
such change shall be deemed to be the Shares within the meaning of this
Agreement.
To
the
extent that the foregoing adjustments relate to shares or securities of the
Company, such adjustments shall be made by the Board, whose determination in
that respect shall be final, binding and conclusive. Except as hereinbefore
expressly provided, Employee shall have no rights by reason of any subdivision
or consolidation of shares of Stock of any class or the payment of any stock
dividend or any other increase or decrease in the number of shares of stock
of
any class, and the number and price of Shares subject to this Agreement shall
not be affected by, and no adjustments shall be made by reason of, any
dissolution, liquidation, merger, consolidation or sale of assets or capital
stock, or any issue by the Company of shares of stock of any class or securities
convertible into shares of stock of any class.
The
grant
of the Options shall not affect in any way the right or power of the Company
to
make adjustments, reclassifications, reorganizations or changes in its capital
or business structure or to merge, consolidate, dissolve or liquidate or to
sell
or transfer all or any part of its business or assets.
11.
Additional
Consideration.
Should
the Internal Revenue Service determine that the Exercise Price established
by
the Board as the fair market value per Share is less than the fair market value
per Share as of the date of this Options grant, Employee hereby agrees to tender
such additional consideration, or agrees to tender upon exercise of all or
a
portion of the Options, such fair market value per Share as is determined by
the
Internal Revenue Service.
12.
Modifications,
Extension and Renewal of Options.
The
Board or Committee, as described in the Plan, may modify, extend or renew the
Options or accept the surrender thereof (to the extent not theretofore
exercised) and authorize the granting of new options in substitution therefore
(to the extent not theretofore exercised), subject at all times to the Plan,
and
Section 422 of the Code. Notwithstanding the foregoing provisions of this
Section 12, no modification shall, without the consent of the Employee, alter
to
the Employee's detriment or impair any rights of Employee
hereunder.
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16
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13.
Investment
Intent; Restrictions on Transfer.
(a)
Employee represents and agrees that if Employee exercises the Options in whole
or in part, Employee will in each case acquire the Shares upon such exercise
for
the purpose of investment and not with a view to, or for resale in connection
with, any distribution thereof; and that upon such exercise of the Options
in
whole or in part, Employee (or any person or persons entitled to exercise the
Options under the provisions of Sections 7 and 8 hereof) shall furnish to the
Company a written statement to such effect, satisfactory to the Company in
form
and substance. If the Shares represented by the Options are registered under
the
Securities Act, either before or after the exercise of the Options in whole
or
in part, the Employee shall be relieved of the foregoing investment
representation and agreement and shall not be required to furnish the Company
with the foregoing written statement.
(b)
Employee further represents that Employee has had access to the financial
statements or books and records of the Company, has had the opportunity to
ask
questions of the Company concerning its business, operations and financial
condition, and to obtain additional information reasonably necessary to verify
the accuracy of such information.
(c)
Unless and until the Shares represented by the Options are registered under
the
Securities Act, all certificates representing the Shares and any certificates
subsequently issued in substitution therefor and any certificate for any
securities issued pursuant to any stock split, share reclassification, stock
dividend or other similar capital event shall bear legends in substantially
the
following form:
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THESE
SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER
THE
SECURITIES ACT OF 1933 (THE 'SECURITIES ACT') OR UNDER THE APPLICABLE
OR
SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST
THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF
IN THE
ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE
SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS
THEREFROM.
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THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT
TO THAT
CERTAIN AWARD AGREEMENT UNDER THE BIOPHAN TECHNOLOGIES, INC. 2008
INCENTIVE STOCK PLAN, DATED ____________, BETWEEN THE COMPANY AND
THE
ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT
TO
REPURCHASE BY THE COMPANY UNDER CERTAIN
CONDITIONS.
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or
such
other legend or legends as the Company and its counsel deem necessary or
appropriate. Appropriate stop transfer instructions with respect to the Shares
have been placed with the Company's transfer agent.
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17
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14.
Effects
of Early Disposition.
Employee
understands that if an Employee disposes of shares acquired hereunder within
two
(2) years after the date of this Agreement or within one (1) year after the
date
of issuance of such shares to Employee, such Employee will be treated for income
tax purposes as having received ordinary income at the time of such disposition
of an amount generally measured by the difference between the purchase price
and
the fair market value of such stock on the date of exercise, subject to
adjustment for any tax previously paid, in addition to any tax on the difference
between the sales price and Employee's adjusted cost basis in such shares.
The
foregoing amount may be measured differently if Employee is an officer, director
or ten percent holder of the Company. Employee agrees to notify the Company
within ten (10) working days of any such disposition.
15.
Stand-off
Agreement.
Employee
agrees that in connection with any registration of the Company's securities
under the Securities Act, and upon the request of the Company or any underwriter
managing an underwritten offering of the Company's securities, Employee shall
not sell, short any sale of, loan, grant an option for, or otherwise dispose
of
any of the Shares (other than Shares included in the offering) without the
prior
written consent of the Company or such managing underwriter, as applicable,
for
a period of at least one year following the effective date of registration
of
such offering.
16.
Restriction
Upon Transfer.
The
Shares may not be sold, transferred or otherwise disposed of and shall not
be
pledged or otherwise hypothecated by the Employee except as hereinafter
provided.
(a)
Repurchase
Right on Termination Other Than for Cause.
For the
purposes of this Section, a "Repurchase
Event"
shall
mean an occurrence of one of (i) termination of Employee's employment by the
Company, voluntary or involuntary and with or without cause; (ii) retirement
or
death of Employee; (iii) bankruptcy of Employee, which shall be deemed to have
occurred as of the date on which a voluntary or involuntary petition in
bankruptcy is filed with a court of competent jurisdiction; (iv) dissolution
of
the marriage of Employee, to the extent that any of the Shares are allocated
as
the sole and separate property of Employee's spouse pursuant thereto (in which
case this Section shall only apply to the Shares so affected); or (v) any
attempted transfer by the Employee of Shares, or any interest therein, in
violation of this Agreement. Upon the occurrence of a Repurchase Event, the
Company shall have the right (but not an obligation) to repurchase all or any
portion of the Shares of Employee at a price equal to the fair value of the
Shares as of the date of the Repurchase Event.
(b)
Repurchase
Right on Termination for Cause.
In the
event Employee's employment is terminated by the Company "for
cause",
then
the Company shall have the right (but not an obligation) to repurchase Shares
of
Employee at a price equal to the Exercise Price. Such right of the Company
to
repurchase Shares shall apply to 100% of the Shares for one (1) year from the
date of this Agreement; and shall thereafter lapse at the rate of twenty percent
(20%) of the Shares on each anniversary of the date of this Agreement. In
addition, the Company shall have the right, in the sole discretion of the Board
and without obligation, to repurchase upon termination for cause all or any
portion of the Shares of Employee, at a price equal to the fair value of the
Shares as of the date of termination, which right is not subject to the
foregoing lapsing of rights. In the event the Company elects to repurchase
the
Shares, the stock certificates representing the same shall forthwith be returned
to the Company for cancellation.
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(c)
Exercise
of Repurchase Right.
Any
Repurchase Right under Paragraphs 16(a) or 16(b) shall be exercised by giving
notice of exercise as provided herein to Employee or the estate of Employee,
as
applicable. Such right shall be exercised, and the repurchase price thereunder
shall be paid, by the Company within a ninety (90) day period beginning on
the
date of notice to the Company of the occurrence of such Repurchase Event (except
in the case of termination of employment or retirement, where such option period
shall begin upon the occurrence of the Repurchase Event). Such repurchase price
shall be payable only in the form of cash (including a check drafted on
immediately available funds) or cancellation of purchase money indebtedness
of
the Employee for the Shares. If the Company can not purchase all such Shares
because it is unable to meet the financial tests set forth in Nevada corporation
law, the Company shall have the right to purchase as many Shares as it is
permitted to purchase under such sections. Any Shares not purchased by the
Company hereunder shall no longer be subject to the provisions of this Section
16.
(d)
Right
of First Refusal.
In the
event Employee desires to transfer any Shares during his or her lifetime,
Employee shall first offer to sell such Shares to the Company. Employee shall
deliver to the Company written notice of the intended sale, such notice to
specify the number of Shares to be sold, the proposed purchase price and terms
of payment, and grant the Company an option for a period of thirty days
following receipt of such notice to purchase the offered Shares upon the same
terms and conditions. To exercise such option, the Company shall give notice
of
that fact to Employee within the thirty (30) day notice period and agree to
pay
the purchase price in the manner provided in the notice. If the Company does
not
purchase all of the Shares so offered during foregoing option period, Employee
shall be under no obligation to sell any of the offered Shares to the Company,
but may dispose of such Shares in any lawful manner during a period of one
hundred and eighty (180) days following the end of such notice period, except
that Employee shall not sell any such Shares to any other person at a lower
price or upon more favorable terms than those offered to the
Company.
(e)
Acceptance
of Restrictions.
Acceptance of the Shares shall constitute the Employee's agreement to such
restrictions and the legending of his certificates with respect thereto.
Notwithstanding such restrictions, however, so long as the Employee is the
holder of the Shares, or any portion thereof, he shall be entitled to receive
all dividends declared on and to vote the Shares and to all other rights of
a
shareholder with respect thereto.
(f)
Permitted
Transfers.
Notwithstanding any provisions in this Section 16 to the contrary, the Employee
may transfer Shares subject to this Agreement to his or her parents, spouse,
children, or grandchildren, or a trust for the benefit of the Employee or any
such transferee(s); provided, that such permitted transferee(s) shall hold
the
Shares subject to all the provisions of this Agreement (all references to the
Employee herein shall in such cases refer mutatis mutandis to the permitted
transferee, except in the case of clause (iv) of Section 16(a) wherein the
permitted transfer shall be deemed to be rescinded); and provided further,
that
notwithstanding any other provisions in this Agreement, a permitted transferee
may not, in turn, make permitted transfers without the written consent of the
Employee and the Company.
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(g)
Release
of Restrictions on Shares.
All
other restrictions under this Section 16 shall terminate five (5) years
following the date of this Agreement, or when the Company's securities are
publicly traded, whichever occurs earlier.
17.
Notices.
Any
notice required to be given pursuant to this Agreement or the Plan shall be
in
writing and shall be deemed to be delivered upon receipt or, in the case of
notices by the Company, five (5) days after deposit in the U.S. mail, postage
prepaid, addressed to Employee at the address last provided to the Company
by
Employee for his or her employee records.
18.
Agreement
Subject to Plan; Applicable Law.
This
Agreement, and the Options awarded hereby, are made pursuant to the Plan and
shall be interpreted to comply therewith. A copy of such Plan is available
to
Employee, at no charge, at the principal office of the Company. Any provision
of
this Agreement inconsistent with the Plan shall be considered void and replaced
with the applicable provision of the Plan. The Options have been granted,
executed and delivered in the State of Nevada, and the interpretation and
enforcement shall be governed by the laws thereof and subject to the exclusive
jurisdiction of the courts therein.
In
Witness Whereof,
the
parties hereto have executed this Agreement as of the date first above
written.
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COMPANY:
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BIOPHAN
TECHNOLOGIES, INC.,
a
corporation
|
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By:
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|
Name:
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|||
|
Title:
|
|||
|
EMPLOYEE:
|
|||
|
By:
|
|||
|
(signature)
|
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|
Name:
|
|||
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20
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NOTICE
OF
EXERCISE
Biophan
Technologies, Inc.
15
Schoen Place
Pittsford,
NY 14534
Re:
Incentive Stock Option
1) Notice
is
hereby given pursuant to Section 6 of my Award Agreement in connection with
the
grant of Options I received under the Company’s 2008 Incentive Stock Plan that I
elect to purchase the number of shares set forth below at the exercise price
set
forth in my option agreement:
Award
Agreement dated: ____________
Number
of
shares being purchased: ____________
Exercise
Price: $____________
A
check
in the amount of the aggregate price of the shares being purchased is
attached.
OR
2) I
elect a
cashless exercise pursuant to Section 6 of my
Incentive Stock Option.
The
Average Market Price as of _______ was $_____.
I
hereby
confirm that such shares are being acquired by me for my own account for
investment purposes, and not with a view to, or for resale in connection with,
any distribution thereof. I will not sell or dispose of my Shares in violation
of the Securities Act of 1933, as amended, or any applicable federal or state
securities laws. Further, I understand that the exemption from taxable income
at
the time of exercise is dependent upon my holding such stock for a period of
at
least one year from the date of exercise and two years from the date of grant
of
the Options.
I
understand that the certificate representing the Option Shares will bear a
restrictive legend within the contemplation of the Securities Act and as
required by such other state or federal law or regulation applicable to the
issuance or delivery of the Option Shares.
I
agree
to provide to the Company such additional documents or information as may be
required pursuant to the Company's 2008 Incentive Stock Plan.
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By:
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(signature)
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Name:
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