0001017386-14-000181.txt : 20140730 0001017386-14-000181.hdr.sgml : 20140730 20140730123027 ACCESSION NUMBER: 0001017386-14-000181 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20140730 DATE AS OF CHANGE: 20140730 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: LAPOLLA INDUSTRIES INC CENTRAL INDEX KEY: 0000875296 STANDARD INDUSTRIAL CLASSIFICATION: PAINTS, VARNISHES, LACQUERS, ENAMELS & ALLIED PRODUCTS [2851] IRS NUMBER: 133545304 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-56557 FILM NUMBER: 141002031 BUSINESS ADDRESS: STREET 1: INTERCONTINENTAL BUSINESS PARK STREET 2: 15402 VANTAGE PARKWAY EAST, STE. 322 CITY: HOUSTON STATE: TX ZIP: 77032 BUSINESS PHONE: 281-219-4700 MAIL ADDRESS: STREET 1: INTERCONTINENTAL BUSINESS PARK STREET 2: 15402 VANTAGE PARKWAY EAST, STE. 322 CITY: HOUSTON STATE: TX ZIP: 77032 FORMER COMPANY: FORMER CONFORMED NAME: IFT CORP DATE OF NAME CHANGE: 20050103 FORMER COMPANY: FORMER CONFORMED NAME: URECOATS INDUSTRIES INC DATE OF NAME CHANGE: 19990217 FORMER COMPANY: FORMER CONFORMED NAME: NATURAL CHILD CARE INC DATE OF NAME CHANGE: 19931117 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Nadel Jay C CENTRAL INDEX KEY: 0001387021 FILING VALUES: FORM TYPE: SC 13D MAIL ADDRESS: STREET 1: 15402 VANTAGE PARKWAY EAST, SUITE 322 CITY: DEMAREST STATE: NJ ZIP: 07627 SC 13D 1 lapolla_nadel-13d.htm SCHEDULE 13D FILED BY JAY C. NADEL

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. __)*

Lapolla Industries, Inc.

(Name of Issuer)

Common Stock, $.01 par value

(Title of Class of Securities)

516648 10 2

(CUSIP Number)

Jay C. Nadel

c/o Lapolla Industries, Inc.

Intercontinental Business Park

15402 Vantage Parkway East, Suite 322

Houston, Texas 77032

(281) 219-4700

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

December 31, 2012

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. ¨

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

^* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 516648 10 2

1. Names of Reporting Persons.

Jay C. Nadel

2. Check the Appropriate Box if a Member of a Group (See Instructions)

(a) ¨

(b) ¨

3. SEC Use Only

4. Source of Funds (See Instructions)

5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

6. Citizenship or Place of Organization

U.S.A.

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

7. Sole Voting Power

8,041,640 ⁽¹⁾⁽²⁾

8. Shared Voting Power

9. Sole Dispositive Power

8,041,640⁽¹⁾⁽²⁾

10. Shared Dispositive Power

11. Aggregate Amount Beneficially Owned by Each Reporting Person

8,041,640⁽¹⁾

12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o

13. Percent of Class Represented by Amount in Row (11)

7.0% ⁽³⁾

14. Type of Reporting Person (See Instructions)

(1)

Includes (i) 7,591,640 shares of common stock, and (ii) 450,000 shares of common stock issuable upon exercise of options that are exercisable within 60 days of the date of this report.

(2)

This amount does not reflect an additional (i) 100,000 shares of common stock issuable upon exercise of options that are subject to vesting and are not exercisable within 60 days of the date of this report, and (ii) 100,000 shares of restricted Common Stock subject to vesting. The reporting person does not have voting or dispositive control with respect shares of restricted common stock subject to vesting.

(3)

The percentage ownership interest is determined based on 114,840,941 shares of common stock outstanding as of May 5, 2014, as reported by Lapolla Industries, Inc. in its Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 15, 2014.

Item 1. Security and Issuer.

The class of equity securities to which this Schedule 13D relates is the common stock, par value $0.01 per share (“Common Stock”) of Lapolla Industries, Inc., a Delaware corporation (the “Issuer”). The principal business address of the Issuer is 15402 Vantage Parkway East, Suite 322, Houston, Texas 77032.

Item 2. Identity and Background.

(a)

This Schedule 13D is filed by Jay C. Nadel (the “Reporting Person”).

(b)

The Reporting Person’s business address is c/o Lapolla Industries, Inc., 15402 Vantage Parkway East, Suite 322, Houston, Texas 77032.

(c)

The Reporting Person’s principal occupation is serving as an Advisor and Consultant and Vice Chairman of the Issuer.

(d)

During the last five years, the Reporting Person has not been convicted in a criminal proceeding.

(e)

During the last five years, the Reporting Person has not been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

(f)

The Reporting Person is a citizen of the United States.

Item 3. Source and Amount of Funds or Other Consideration.

The Reporting Person has acquired shares of Common Stock and options to purchase shares of Common Stock pursuant to the following transactions:

(i)

On January 16, 2007, in connection with his appointment to the Board of Directors of the Issuer and certain committees of the Board of Directors, the Issuer granted to the Reporting Person five-year options to purchase 450,000 shares of Common Stock at an exercise price of $.60 per share, which options became exercisable by the Reporting Person as follows: 50,000 options on January 16, 2009, 100,000 options on January 16, 2010, 150,000 options on January 16, 2011, 100,000 options on January 16, 2012, and 50,000 options on January 16, 2013. The expiration date of the options was extended two times and such options currently expire on January 15, 2017. Except as set forth herein, the options were not purchased by the Reporting Person for any additional amount of funds or other consideration.

(ii)

On February 19, 2008, Mr. Kurtz, Chairman of the Board and majority stockholder, and Mr. Nadel, a director, entered into a private agreement whereby Mr. Kurtz agreed to transfer approximately 1,084,000 shares, in two installments, of his restricted common stock to Mr. Nadel in order to secure his continued attention and hands on participation required with his role as a Board member for a two year period. The first installment of 500,000 shares was transferred to Mr. Nadel on February 19, 2008 and second installment of 584,000 shares was transferred to Mr. Nadel on February 18, 2009 by Mr. Kurtz. The installments vested one year after the date of each installment. Except as set forth herein, the restricted Common Stock was not purchased by the Reporting Person for any amount of funds or other consideration.

(iii)

Effective July 1, 2010, the Issuer established the Director Plan, which provided for the grant of an aggregate of 500,000 shares of restricted Common Stock to the Reporting Person. The stock grant is subject to vesting over a four and half year period, with one fifth vesting at the end of each calendar year beginning on December 31, 2010; provided, however, if there is a change in the control of the Company, all stock grants, which have not vested, will vest immediately upon the change in control. As of the date of this report, a total of 400,000 shares of restricted Common Stock have vested. The remaining 100,000 shares are scheduled to vest on December 31, 2014 provided that the Reporting Person remains as a member of the Board of Directors of the Issuer on the applicable vesting date. The Reporting Person does not have dispositive or voting control over unvested shares of Restricted Stock. Except as set forth herein, the restricted Common Stock was not purchased by the Reporting Person for any amount of funds or other consideration.

(iv)

On February 22, 2011, the Issuer entered into an agreement with the Reporting Person wherein he became a consultant and Vice Chairman (and resigned as Audit Committee Chairperson and Financial Expert, as well as member of the Compensation Committee) (“Nadel Agreement”). In addition to any other compensation the Reporting Person was currently receiving from the Issuer at the time, he was granted 5,000,000 shares of restricted Common Stock, which vest monthly on a pro-rata basis over a 3 year period on the last day of each calendar month during the period commencing February 22, 2011 and ending January 31, 2014, with an additional pro-rata number of shares vesting on February 21, 2014. Further, the Nadel Agreement also included certain anti-dilution aspects which continue so long as the agreement is not terminated. As of the date of filing this report, all 5,000,000 shares of restricted Common Stock have vested and 1,107,640 vested anti-dilution shares have been issued. Except as set forth herein, the restricted Common Stock was not purchased by the Reporting Person for any amount of funds or other consideration.

(v)

On April 28, 2014, in connection with his continued service as a member of the Board of Directors of the Issuer, the Issuer granted to the Reporting Person five-year options to purchase 100,000 shares of Common Stock at an exercise price of $.42 per share, which vests vest over a period of two (2) years at the rate of 50,000 options on April 30, 2015 and 50,000 options on April 30, 2016, and become exercisable after one (1) year from each respective vesting date, provided that the Reporting Person remains as a member of the Board of Directors of the Issuer on the applicable vesting dates. All stock options automatically vest and are exercisable upon a change in control. Except as set forth herein, the options were not purchased by the Reporting Person for any additional amount of funds or other consideration.

Item 4. Purpose of the Transaction.

The information set forth in Item 3 hereof is incorporated herein by reference.

The Reporting Person acquired the shares of Common Stock and the options to purchase shares of Common Stock reported in this Schedule 13D for investment purposes only. Consistent with his individual investment purposes, the Reporting Person at any time and/or from time to time may acquire additional shares of Common Stock or dispose of Common Stock, based on prevailing market conditions, other investment opportunities, liquidity requirement of the Reporting Person and or other investment considerations.

The Reporting Person is currently the Vice Chairman of the Board of Directors and an advisor and consultant to the Issuer and takes an active role in the management, operations and finances of the Issuer. Except as set forth herein, the Reporting Person has no present plans or proposals that would relate to or result in any of the matters set forth in subparagraphs (a)-(j) of Item 4 of Schedule 13D.

Item 5. Interest in Securities of the Issuer.

(a), (b) and (c) – The information contained on the cover pages to this Schedule 13D and the information set forth or incorporated in Items 2, 3, 4 and 6 hereof are incorporated herein by reference.

As of the date of this report on Schedule 13D, the Reporting Person beneficially owns directly 8,041,640 shares of Common Stock, which includes 7,591,640 shares of restricted Common Stock and 450,000 shares of Common Stock issuable upon exercise of options that are vested and exercisable within 60 days of the date of this report. The aforementioned number of shares represents approximately 7.0% of the shares of Common Stock outstanding as of such date. The above percentage interest is determined based on 114,840,941 shares of Common Stock outstanding as of May 5, 2014, as reported by the Issuer in its Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 15, 2014. The Reporting Person has sole voting and dispositive power over 7.0% shares of Common Stock and will have sole and dispositive power over any shares of Common Stock issued upon exercise of the stock options held by the Reporting Person.

The 8,041,640 shares of Common Stock reported above as beneficially owned by the Reporting Person does not include (i) options to purchase an additional 100,000 shares of Common Stock (Refer to Item 3(v) above) and (ii) 100,000 shares of restricted Common Stock subject to the satisfaction of all conditions to vesting (Refer to Item 3(iii) above), all of which remain subject to vesting and are not currently exercisable or issuable, respectively, within 60 days of the date of this report. Further, pursuant to the Nadel Agreement, certain anti-dilution shares are expected to be issued in the future subject to continuation of that agreement which amount of shares is not determinable at this time (Refer to Item 3(iv) above).

(d) Not applicable.

(e) Not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

The information set forth or incorporated in Items 3 and 5 hereof is incorporated herein by reference in this Item 6.

Item 7. Material to be Filed as Exhibits.

The following exhibits are filed as exhibits hereto:

Exhibit	Description of Exhibit
10.1	Option Agreement, dated January 16, 2007, by and between Lapolla Industries, Inc. and Jay C. Nadel.
10.2	Agreement dated February 22, 2011 between Jay C. Nadel and Lapolla Industries, Inc. (incorporated by reference to Exhibit 10.1 to the Issuer’s Form 8-K dated February 22, 2011 filed with the SEC on February 28, 2011).
10.3	Option Agreement, dated April 28, 2014, by and between Lapolla Industries, Inc. and Jay C. Nadel.

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Date: July 29, 2014

/s/ Jay C. Nadel

Jay C. Nadel

EXHIBIT INDEX

Exhibit	Description of Exhibit
10.1	Option Agreement, dated January 16, 2007, by and between Lapolla Industries, Inc. and Jay C. Nadel.
10.2	Agreement dated February 22, 2011 between Jay C. Nadel and Lapolla Industries, Inc. (incorporated by reference to Exhibit 10.1 to the Issuer’s Form 8-K dated February 22, 2011 filed with the SEC on February 28, 2011).
10.3	Option Agreement, dated April 28, 2014, by and between Lapolla Industries, Inc. and Jay C. Nadel.

EX-10.1 2 exhibit_10-1.htm OPTION AGREEMENT, DATED JANUARY 16, 2007, BY AND BETWEEN LAPOLLA INDUSTRIES, INC. AND JAY C. NADEL.

Exhibit 10.1

OPTION AGREEMENT

THE BOARD OF DIRECTORS of Lapolla Industries, Inc. authorized and approved the Equity Incentive Plan ("Plan"). The Plan provides for the grant of Options to employees, directors and consultants of Lapolla Industries, Inc. (“Company”). Unless otherwise provided herein all defined terms shall have the respective meanings ascribed to them under the Plan.

1. Grant of Option. Pursuant to authority granted under the Plan, the Administrator responsible for administering the Plan hereby grants to JAY C. NADEL, as a director of the Company (“Optionee”) and as of JANUARY 16, 2007 ("Grant Date"), the following Option: 450,000. Each Option permits you to purchase one share of Lapolla Industries, Inc.’s common stock, $.01 par value per share ("Shares").

2. Character of Options. Pursuant to the Plan, Options granted herein may be Incentive Stock Options or Non-Qualified Stock Options, or both. To the extent permitted under the Plan and by law, such Options shall first be considered Incentive Stock Options.

3. Exercise Price. The Exercise Price for each Non-Qualified Stock Option granted herein is $ .60 per Share, and the exercise price for each Incentive Stock Option granted herein shall be $ .60 per Share [except that an Incentive Stock Option granted to a Ten Percent Owner shall be $ .66 per Share].

4. Exercisability. The exercisability of the Options granted hereby is subject to the following performance criteria and restrictions: A description and illustration is attached hereto as Exhibit 1 and incorporated in its entirety herein by this reference.

5. Term of Options. The term of each Option granted herein shall be for a term of up to five (5) years from the Grant Date, provided, however, that the term of any Incentive Stock Option granted herein to an Optionee who is at the time of the grant, a Ten Percent Owner, shall not be exercisable after the expiration of five (5) years from the Grant Date.

6. Payment of Exercise Price. Options represented hereby may be exercised in whole or in part by delivering to the Company your payment of the Exercise Price of the Option so exercised (i) in cash, by check or cash equivalent, (ii) by tender to the Company of shares of Stock owned by the Participant having a Fair Market Value not less than the exercise price; (iii) by tender to the Company of a written consent to accept a reduction in the number of shares of Stock to which the Option relates (“Reduced Number of Shares”), which Reduced Number of Shares, when ascribed a value, shall be equal to the exercise price of the balance of shares of Stock covered by the Option; (iv) by delivery of a properly executed notice of exercise together with irrevocable instructions to a broker providing for the assignment to the Company of the proceeds of a sale or loan with respect to some or all of the shares being acquired upon the exercise of the Option (including, without limitation, through an exercise complying with the provisions of Regulation T as promulgated from time to time by the Board of Governors of the Federal Reserve System) (a "Cashless Exercise"), (v) by such other consideration as may be approved by the Committee from time to time to the extent permitted by applicable law, or (vi) by any combination thereof. The Company reserves, at any and all times, the right, in the Company's sole and absolute discretion, to establish, decline to approve or terminate any program or procedures for the exercise of Options by means of a Cashless Exercise.

7. Limits on Transfer of Options. The Option granted herein shall not be transferable by you otherwise than by will or by the laws of descent and distribution, except for gifts to family members subject to any specific limitation concerning such gift by the Administrator in its discretion; provided, however, that you may designate a beneficiary or beneficiaries to exercise your rights and receive any Shares purchased with respect to any Option upon your death. Each Option shall be exercisable during your lifetime only by you or, if permissible under applicable law, by your legal representative. No Option herein granted or Shares underlying any Option shall be pledged, alienated, attached or otherwise encumbered, and any purported pledge, alienation, attachment or encumbrance thereof shall be void and unenforceable against the Company. Notwithstanding the foregoing, to the extent permitted by the Administrator, in its discretion, an Option shall be assignable or transferable subject to the applicable limitations, if any, described in the General Instructions to Form S-8 Registration Statement under the Securities Act of 1933, as amended.

8. Termination of Employment. If your employment is terminated with the Company, the Option and any unexercised portion shall be subject to the provisions below:

(a) Upon the termination of your employment with the Company, to the extent not theretofore exercised, your Option shall continue to be valid; provided, however, that: (i) If the Participant shall die while in the employ of the Company or during the one (1) year period, whichever is applicable, specified in clause (ii) below and at a time when such Participant was entitled to exercise an Option as herein provided, the legal representative of such Participant, or such Person who acquired such Option by bequest or inheritance or by reason of the death of the Participant, may, not later than fifteen (15) months from the date of death, exercise such Option, to the extent not theretofore exercised, in respect of any or all of such number of Shares specified by the Administrator in such Option; and (ii) If the employment of any Participant to whom such Option shall have been granted shall terminate by reason of the Participant's retirement (at such age upon such conditions as shall be specified by the Board of Directors), disability (as described in Section 22(e) of the Code) or dismissal by the Company other than for cause (as defined below), and while such Participant is entitled to exercise such Option as herein provided, such Participant shall have the right to exercise such Option so granted, to the extent not theretofore exercised, in respect of any or all of such number of Shares as specified by the Administrator in such Option, at any time up to one (1) year from the date of termination of the Optionee's employment by reason of retirement or dismissal other than for cause or disability, provided, that if the Optionee dies within such twelve (12) month period, subclause (i) above shall apply.

(b) If you voluntarily terminate your employment, or are discharged for cause, any Options granted hereunder shall forthwith terminate with respect to any unexercised portion thereof.

(c) If any Options granted hereunder shall be exercised by your legal representative if you should die or become disabled, or by any person who acquired any Options granted hereunder by bequest or inheritance or by reason of death of any such person written notice of such exercise shall be accompanied by a certified copy of letters testamentary or equivalent proof of the right of such legal representative or other person to exercise such Options.

(d) For all purposes of the Plan, the term "for cause" shall mean "cause" as defined in the Plan or your employment agreement with the Company.

9. Restriction; Securities Exchange Listing. All certificates for shares delivered upon the exercise of Options granted herein shall be subject to such stop transfer orders and other restrictions as the Administrator may deem advisable under the Plan or the rules, regulations and other requirements of the Securities and Exchange Commission and any applicable federal or state securities laws, and the Administrator may cause a legend or legends to be placed on such certificates to make appropriate reference to such restrictions. If the Shares or other securities are traded on a national securities exchange, the Company shall not be required to deliver any Shares covered by an Option unless and until such Shares have been admitted for trading on such securities exchange.

10. Adjustments. If there is any change in the capitalization of the Company affecting in any manner the number or kind of outstanding shares of Common Stock of the Company, whether by stock dividend, stock split, reclassification or recapitalization of such stock, or because the Company has merged or consolidated with one or more other corporations (and provided the Option does not thereby terminate pursuant to Section 5 hereof), then the number and kind of shares then subject to the Option and the price to be paid therefor shall be appropriately adjusted by the Board of Directors; provided, however, that in no event shall any such adjustment result in the Company's being required to sell or issue any fractional shares. Any such adjustment shall be made without change in the aggregate purchase price applicable to the unexercised portion of the option, but with an appropriate adjustment to the price of each Share or other unit of security covered by this Option.

11. Change in Control. In the event of a Change in Control (as defined in the Plan), the surviving, continuing, successor, or purchasing entity or parent thereof, as the case may be (the "Acquiror"), may, without the consent of any Participant, either assume the Company's rights and obligations under outstanding Options or substitute for outstanding Options substantially equivalent options for the Acquiror's stock. In the event the Acquiror elects not to assume or substitute for outstanding Options in connection with a Change in Control, the Committee shall provide that any unexercised and/or unvested portions of outstanding Options shall be immediately exercisable and vested in full as of the date thirty (30) days prior to the date of the Change in Control. The exercise and/or vesting of any Option that was permissible solely by reason of this Section 11 shall be conditioned upon the consummation of the Change in Control. Any Options which are not assumed by the Acquiror in connection with the Change in Control nor exercised as of the time of consummation of the Change in Control shall terminate and cease to be outstanding effective as of the time of consummation of the Change in Control.

12. Amendment to Options Herein Granted. The Options granted herein may not be amended without your consent.

13. Withholding Taxes. As provided in the Plan, the Company may withhold from sums due or to become due to Optionee from the Company an amount necessary to satisfy its obligation to withhold taxes incurred by reason of the disposition of the Shares acquired by exercise of the Options in a disqualifying disposition (within the meaning of Section 421(b) of the Code), or may require you to reimburse the Company in such amount.

LAPOLLA INDUSTRIES, INC.

/s/ Michael T. Adams, Secretary	1/16/07
Corporate Secretary	Date

OPTIONEE




/s/ Jay C. Nadel	Jay C. Nadel	1/16/07
Signature	Printed Name	Date

EXHIBIT 1

Description and Illustration of Exercisability Restrictions

Jay C. Nadel
	1/16/2007	1/16/2008	1/16/2009	1/16/2010	1/16/2011	1/16/2012
Grant Date	450,000

Vesting Dates		150,000	150,000	150,000

Exercisability Dates (1/15/2008)		50,000	50,000	50,000

Exercisability Dates (1/15/2009)			50,000	50,000	50,000

Exercisability Dates (1/15/2010)				50,000	50,000	50,000

EX-10.3 3 exhibit_10-3.htm OPTION AGREEMENT, DATED APRIL 28, 2014, BY AND BETWEEN LAPOLLA INDUSTRIES, INC. AND JAY C. NADEL.

Exhibit 10.3

OPTION AGREEMENT

THE BOARD OF DIRECTORS of Lapolla Industries, Inc. (the “Company”) authorized and approved the Equity Incentive Plan ("Plan"). The Plan provides for the grant of Options to employees of the Company. Unless otherwise provided herein all defined terms shall have the respective meanings ascribed to them under the Plan.

1. Grant of Option. Pursuant to authority granted to it under the Plan, the Administrator responsible for administering the Plan hereby grants to Jay C. Nadel, a director of the Company (“Optionee”) and as of April 28, 2014 ("Grant Date"), the following stock options: 100,000 stock options (“Options”). Each Option permits you to purchase one share of the Company’s common stock, par value $.01 per share, at the Exercise Price ("Shares").

3. Exercise Price. The exercise price (“Exercise Price”) for each Non-Qualified Stock Option granted herein is 42¢ ($ 0.42) per Share, and the Exercise Price for each Incentive Stock Option granted herein shall be 42¢ ($ 0.42) per Share.

4. Vesting and Exercisability. The Options shall vest over a period of two (2) years at the rate of 50,000 options on April 30, 2015 and 50,000 options on April 30, 2016, and are exercisable after one (1) year from each respective vesting date, subject to continued satisfactory services with the Company prior to and upon exercise, in accordance with the terms and conditions of the Plan and this agreement.

5. Term of Options. The term of each Option granted herein shall be for a term of up to five (5) years from Grant Date.

6. Payment of Exercise Price. Options represented hereby may be exercised in whole or in part by delivering to the Company your payment of the Exercise Price for the number of Options so exercised (i) in cash, by check or cash equivalent, (ii) by tender to the Company of shares of Stock owned by the Participant having a Fair Market Value not less than the exercise price for the number of Options exercised; (iii) by tender to the Company of a written consent to accept a reduction in the number of shares of Stock issuable upon exercise (“Reduced Number of Shares”), which Reduced Number of Shares, when ascribed a value, shall have a value equal to the Exercise Price for the number of Options exercised; (iv) by delivery of a properly executed notice of exercise together with irrevocable instructions to a broker providing for the assignment to the Company of the proceeds of a sale or loan with respect to some or all of the shares being acquired upon the exercise of the Option or portion thereof exercised (including, without limitation, through an exercise complying with the provisions of Regulation T as promulgated from time to time by the Board of Governors of the Federal Reserve System) (a "Cashless Exercise"), (v) by such other consideration as may be approved by the Committee from time to time to the extent permitted by applicable law, or (vi) by any combination thereof. The Company reserves, at any and all times, the right, in the Company's sole and absolute discretion, to establish, decline to approve or terminate any program or procedures for the exercise of Options by means of a Cashless Exercise.

8. Termination of Services. If your service is terminated with the Company, the Option and any unexercised portion shall be subject to the provisions below:

(a) Upon the termination of your services with the Company, to the extent not theretofore exercised, your Option shall continue to be valid; provided, however, that: (i) If the Participant’s service is terminated by dismissal by the Company other than for cause (as defined below), disability (as described in Section 22(e) of the Code) or death while in the employ of the Company and at a time when such Participant was entitled to exercise an Option as herein provided, any unvested Options shall automatically vest and become exercisable as of the date of termination, and the Participant or their legal representative of such Participant, as the case may be, or such Person who acquired such Option by bequest or inheritance or by reason of the death of the Participant, may, not later than fifteen (15) months from the date of death, exercise such Option, to the extent not theretofore exercised, in respect of any or all of such number of Shares specified by the Administrator in such Option; and (ii) If the services of any Participant to whom such Option shall have been granted shall terminate by reason of the Participant's retirement (at such age upon such conditions as shall be specified by the Board of Directors), and while such Participant is entitled to exercise such Option as herein provided, any unvested Options shall automatically vest and become exercisable as of the date of retirement, such Participant shall have the right to exercise such Option so granted, to the extent not theretofore exercised, in respect of any or all of such number of Shares as specified by the Administrator in such Option, at any time up to one (1) year from the date of termination of the Optionee's services by reason of retirement.

(b) If you voluntarily terminate your services, Participant shall have the right to exercise such Option that has vested, to the extent not theretofore exercised, at any time up to ninety (90) days from the date of termination of the Optionee's services, or if you are discharged for cause, any Options granted hereunder shall forthwith terminate with respect to any unexercised portion thereof.

(d) For all purposes of the Plan, the term "for cause" shall mean "cause" as defined in the Plan.

12. Amendment to Options Herein Granted. The Options granted herein may not be amended without your consent.

LAPOLLA INDUSTRIES, INC.

/s/ Michael T. Adams, Secretary

Corporate Secretary

OPTIONEE

/s/ Jay C. Nadel

Jay C. Nadel