Plastic2Oil Inc (PTOI)

[loanranger]

You can't simply ignore that the directors must be Qualified, as defined in the letter, as well as independent. Heddle and Bradley aren't Qualified.

These things are true:
"Rich Heddle and Phillip Bradley were simply appointed to the board. There was no vote I am aware of."
"Heddle and Bradley are now the board."
The upcoming election is for the purpose of confirming those appointments.

This is the only logical assumption...although the logic of the act itself is strange.:
"I assume that appointment was done by the remaining members of the previous board."
At the time that was Ingham and Bogolin. Presumably their parting gifts were contingent on those appointments.

"So I suppose four additional Independent Directors could simply be "appointed" by Heddle and Bradley by November 15 (or two additional Independent Directors later) and the whole issue may just go away."
Again, the QUALIFIED requirement itself does not just go away, unless by agreement of the parties.....we haven't heard anything suggesting that to be the case. In fact, the 3 day old DEF14A covers the letter fairly thoroughly and didn't suggest that any of its terms had changed.


My problem with your post had nothing to do with any of that, but rather with the impact of the failure to install 5 QID's. Rather than JB being obligated to purchase their common (Investors Put option), as you said, JB will be required to sell his Preferred A pro rata to the Investors based on their holdings at $.001/share (Investors Call option). That is where the issue of "change of control" that we've heard about comes into play.


This is the wording from the proxy statement, which I believe is an accurate reporting of the terms of the letter agreement. Your confusion probably came about as the result of the sequence in which the repercussions were presented, which showed the actions which would create the Call privilege and then immediately followed that with the pricing for the Put. It was poorly done. Try again when your head stops hurting.:
"In addition, the Letter Agreement provides that in the event that Mr. Bordynuik violates the terms of the non-compete provisions of his employment agreement with the Company or attempts to transfer his shares of Series A Preferred Stock, except as provided in the Letter Agreement, then he will be required to offer to purchase 100% of the respective shares of common stock owned by each Investor (the “Purchaser’s Put Right”). The Letter Agreement also provides that in the event Mr. Bordynuik takes the actions discussed in the preceding sentence or additionally Kevin Rauber, the President of the Company at such time, is terminated by the Company “without cause” or resigns “with good reason” (as such terms are defined in Mr. Rauber’s employment agreement with the Company) and at such time the Board is comprised of fewer than three Qualified Independent Directors, or Mr. Bordynuik materially breaches certain sections of the Letter Agreement, then he shall offer to sell 100% of his shares of Series A Preferred Stock to the Purchasers pro rata (the “Purchaser’s Call Right”). The purchase price for exercise of the Purchaser’s Put Right shall be the greater of (x) $1.00 and (y) the volume-weighted average trading price of the common stock in the 30 consecutive day period immediately preceding the date of the event triggering the purchase. The sale price for exercise of the Purchaser’s Call Right shall be the par value of $0.001 per share of the Series A Preferred Stock."


Edit in response to your edit:
That term had to do with certain conditions related to Rauber....it turned out not to apply and you can ignore it.