Item
2.02 Results of Operations and Financial Condition.
On
December 16, 2008, Applied DNA Sciences, Inc. (the “Company”) announced by press
release its financial results for its fourth fiscal quarter and fiscal year
ended September 30, 2008. A copy of the press release is attached
hereto as Exhibit 99.1.
The
information in Item 2.02 of this Current Report shall not be deemed “filed” for
the purposes of Section 18 of the Securities Exchange Act of 1934, as amended,
or otherwise subject to the liabilities of that section. The
information in Item 2.02 of this Current Report shall not be incorporated by
reference into any registration statement or other document pursuant to the
Securities Act of 1933, except as shall be expressly set forth by specific
reference in such filing.
Item
5.02. Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
(e) 2005 Incentive Stock
Plan.
On June
17, 2008, the Board of Directors of the Company unanimously adopted an amendment
to the Company’s 2005 Incentive Stock Plan (the “2005 Plan”) in order to increase the number of shares of
common stock subject to the Company’s 2005 Incentive Stock Plan from 20 million to 100 million and
to limit to 25 million the number of shares
that can be covered by awards made to any participant in any calendar
year (the “Share Increase
Amendment”). On December 16,
2008, the Company’s stockholders approved the Share Increase Amendment to the
2005 Plan at the Company’s 2008 Annual Meeting of Stockholders.
The
following description of the 2005 Plan is qualified in its entirety by reference
to the full text of the 2005 Plan, as amended and restated in its entirety, a
copy of which will be filed as an exhibit to our quarterly report on Form 10-Q
for the quarter ending December 31, 2008.
Types
of Awards
Awards
under the 2005 Plan may be in the form of options to purchase shares of our
common stock (including options intended to qualify as “incentive stock options”
(“ISOs”) within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the “Code”) and options which do not qualify as ISOs), restricted
stock awards, deferred stock awards and other forms of stock based
awards.
Authorized
Shares
Subject
to adjustment to reflect stock splits, stock dividends and other changes in
capitalization, an aggregate of 100 million shares of our common stock may be
issued under the 2005 Plan. For this purpose, shares subject to an award that is
forfeited, terminated or expired and shares repurchased pursuant to the 2005
Plan will remain available for issuance pursuant to the 2005 Plan.
Eligibility
Awards
under the 2005 Plan may be granted to any of our directors, officers, employees
or consultants. ISOs
may only be issued to our employees. There are currently
approximately 13 employees eligible to be granted options under the 2005
Plan.
Administration
of the 2005 Plan
The 2005
Plan is administered by the Compensation Committee of our Board of
Directors.
Terms
and Conditions of Awards under the 2005 Plan
Subject
to the provisions of the 2005 Plan, the Compensation Committee, acting in its
discretion, has the responsibility and full power and authority to select the
persons to whom awards will be made, to prescribe the terms and conditions of
each award and make amendments thereto, to construe, interpret and apply the
provisions of the 2005 Plan and of any agreement or other instrument evidencing
an award and to make any and all determinations and take any and all other
actions as it deems necessary or desirable in order to carry out the 2005
Plan.
Stock options. Stock options
shall have such vesting and other terms and conditions as the Compensation
Committee, acting in its discretion, may determine. The exercise price per share
of our common stock covered by an option may not be less than 100% of the fair
market value per share on the date of grant (110% of fair market value in the
case of ISOs granted to an employee who is a 10% stockholder within the meaning
of the Internal Revenue Code). The Compensation Committee, acting in its sole
discretion, may permit the exercise price to be paid in whole or in part in cash
or by check, by means of a broker assisted cashless exercise procedure, or in
the form of unrestricted shares of previously owned shares of our common stock.
Unless sooner terminated, an option shall automatically expire on the tenth
anniversary of the date it is granted (the fifth anniversary in the case of an
ISO granted to an employee who is a 10% stockholder). Unless the terms of an
option provide otherwise, the non-vested portion of an option will be forfeited
upon termination of a participant’s employment or other service, and the vested
portion will terminate if and to the extent it is not exercised within 90 days
after termination of employment (one year if the termination is due to death or
disability). However, if a participant’s employment or service is terminated for
“cause” (as defined in the 2005 Plan), the participant’s outstanding options
will terminate immediately, whether or not otherwise vested). If we are sold or
merge with another company, outstanding options may be converted into
economically equivalent options of the acquiring or successor company. If the
outstanding options are not so converted, then vesting of the options may be
accelerated and, in any event, the outstanding options that are not exercised
will terminate immediately before the sale or merger is completed.
Restricted Stock and other Stock
Awards. In general, restricted stock is common stock that is subject to
transfer restrictions and forfeiture conditions as determined by the
Compensation Committee. Restricted stock awards may vest on the basis of the
satisfaction of performance conditions established by the Compensation Committee
or on the passage of time. The Compensation Committee may provide that
participants who receive restricted stock awards are entitled to vote their
shares of restricted stock and/or receive the dividends paid on the
shares.
In
general, a deferred stock award is a right to receive one share of our common
stock or cash equal to the value of one share at the end of a specified period,
subject to such conditions as the Compensation Committee may determine. Deferred
stock awards may vest on the basis of the satisfaction of performance conditions
established by the Compensation Committee or on the passage of time. The holder
of a deferred stock award has no rights as a stockholder with respect to the
underlying shares unless and until the award vests and the award is settled in
shares. However, the Compensation Committee may provide for the
payment of dividend equivalents in the form of cash or shares in an amount equal
to the dividends that would have been payable if the shares were
outstanding.
Amendment
and Termination
Our Board
of Directors may terminate the 2005 Plan or amend it in any respect, except that
stockholder approval shall be required for any amendment that would (a) increase
the number of shares subject to the 2005 Plan, (b) decrease the price at which
awards may be granted, (c) materially increase the benefits to participants, or
(d) change the class of persons eligible to receive awards. However, participant
consent will be required with respect to an amendment that would alter or impair
the participant’s rights and obligations under any outstanding award. If not
sooner terminated, the 2005 Plan will expire on the tenth anniversary of the
date of its original adoption. Any awards outstanding at the time of such
termination or expiration will continue in accordance with their
terms.
Equity
Award Grants.
On June
17, 2008, the Board of Directors of the Company granted nonstatutory stock
options under the 2005 Plan to certain key employees of the Company, including
our named executive officers (“NEOs”).
Following
the stockholders’ approval of the Share Increase Amendment to the 2005 Plan at
the Company’s 2008 Annual Meeting of Stockholders, the Company will enter into an Employee Nonstatutory Stock Option
Agreement with each of the
following NEOs:
|
Name
|
|
Award Type
|
|
Number of
Awards
|
|
Exercise
Price
|
|
Award
Plan
|
|
James A.
Hayward
|
|
Nonstatutory Stock
Options
|
|
17,000,000
|
|
$0.11
|
|
2005 Incentive Stock
Plan
|
|
Kurt H.
Jensen
|
|
Nonstatutory Stock
Options
|
|
5,000,000
|
|
$0.11
|
|
2005 Incentive Stock
Plan
|
|
Ming-Hwa
Liang
|
|
Nonstatutory Stock
Options
|
|
7,000,000
|
|
$0.11
|
|
2005 Incentive Stock
Plan
|
The
options granted to the NEOs vested with respect to 25% of the underlying shares
on the date of grant, and the remaining will vest ratably each anniversary
thereafter until fully vested on the third anniversary of the date of
grant.
Item
8.01. Other Events.
2008
Annual Meeting of Stockholders
On
December 16, 2008, the Company’s 2008 Annual Meeting of Stockholders was held at
the Charles B. Wang Center, Stony Brook University, Stony Brook, New
York. On December 16, 2008, the Company issued a press release
announcing the results of its 2008 Annual Meeting of Stockholders. At
the 2008 Annual Meeting of Stockholders, the Company’s stockholders elected
three incumbent director nominees to the Company’s Board of Directors for one
year terms; approved the reincorporation of the Company from the State of Nevada
to the State of Delaware; approved an amendment to increase the number of shares
subject to the Company’s 2005 Incentive Stock Plan and limit the number of
shares that can be covered by awards made to any participant in any calendar
year; and ratified the selection of RBSM LLP as the Company’s independent
registered public accounting firm for the fiscal year ending September 30,
2008.
A copy of
the press release is attached hereto as Exhibit 99.2.
Change
of Domicile
On
December 17, 2008, the Company filed with the Nevada Secretary of State articles
of conversion and filed with the Delaware Secretary of State (i) a certificate
of conversion and (ii) a certificate of incorporation that will govern the
Company as a Delaware corporation. Upon the effectiveness of such
filings, instead of being subject to the corporate laws of Nevada, the Company
will be subject to the Delaware General Corporation Law. In addition,
the Board of Directors of the Company will adopt bylaws for the resulting
Delaware corporation.