Stock Option Agreement Relating to but not under the DOV Pharmaceutical, Inc.
Relating
to but not under the DOV Pharmaceutical, Inc.
2000
Stock Option and Grant Plan
| Name of Optionee: |
Xxxxx
Xxxxx (the
“Optionee”)
|
| No. of Option Shares: | 285,000 Shares of Common Stock |
| Grant Date: | December 1, 2005 (the “Grant Date”) |
| 50% Vesting Date | 50% on June 1, 2007 |
| Further Vesting Schedule | 8.33% ratably thereafter per quarter (subject to change of control acceleration pursuant to Section 2.03 (b) of December 1, 2005 employment agreement) |
| Expiration Date: | December 1, 2015 (the “Expiration Date”) |
| Option Exercise Price/Share: | $14.28 (the “Option Exercise Price”) |
DOV
Pharmaceutical, Inc., a Delaware corporation (together with all successors
thereto, the Company), hereby grants to the Optionee, who is an officer,
employee, director, consultant or other key person of the Company or any of
its
Subsidiaries, an option (the Stock Option) to purchase on or prior to the
Expiration Date, or such earlier date as is specified herein, all or any part
of
the number of shares of Common Stock, par value $0.0001 per share (Common
Stock),
of the
Company indicated above (the Option Shares, and such shares once issued shall
be
referred to as the Issued Shares), at the Option Exercise Price, subject to
the
terms and conditions set forth in this Qualified Stock Option Agreement (this
“Agreement”).
1. Definitions.
For the
purposes of this Agreement, the following terms shall have the following
respective meanings. All capitalized terms used herein and not otherwise defined
shall have the respective meanings set forth in the Plan.
An
Affiliate
of any
Person means a Person that directly or indirectly, through one or more
intermediaries, controls, is controlled by or is under common control with
the
first mentioned Person. A Person shall be deemed to control another Person
if
such first person possesses directly or indirectly the power to direct, or
cause
the direction of, the management and
policies of the second Person, whether through the ownership of voting
securities, by contract or otherwise.
Bankruptcy
shall
mean (i) the filing of a voluntary petition under any bankruptcy or insolvency
law, or a petition for the appointment of a receiver or the making of an
assignment for the benefit of creditors, with respect to the Optionee or any
Permitted Transferee, or (ii) the Optionee or any Permitted Transferee being
subjected involuntarily to such a petition or assignment or to an attachment
or
other legal or equitable interest with respect to the Optionee¢s
or such
Permitted Transferee¢s
assets,
which involuntary petition or assignment or attachment is not discharged within
sixty (60) days after its date, and (iii) the Optionee or any Permitted
Transferee being subject to a transfer of the Stock Option or the Issued Shares
by operation of law, except by reason of death.
Cause
shall
mean a vote of the Board resolving that the Optionee should be dismissed as
a
result of (i) the commission of any act by the Optionee constituting financial
dishonesty against the Company (which act would be chargeable as a crime under
applicable law); (ii) the Optionee¢s
engaging in any other act of dishonesty, fraud, intentional misrepresentation,
moral turpitude, illegality or harassment which, as determined in good faith
by
the Board, would: (A) materially adversely affect the business or the reputation
of the Company with its current or prospective customers, suppliers, lenders
and/or other third parties with whom it does or might do business; or (B) expose
the Company to a risk of civil or criminal legal damages, liabilities or
penalties; (iii) the repeated failure by the Optionee to follow the directives
of the Company¢s
chief
executive officer or Board or (iv) any material misconduct, violation of the
Company¢s
policies, or willful and deliberate non-performance of duty by the Optionee
in
connection with the business affairs of the Company.
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Permitted
Transferees
shall
mean any of the following to whom the Optionee may transfer Issued Shares
hereunder: the Optionee¢s
spouse,
children (natural or adopted), stepchildren or a trust for their sole benefit
of
which the Optionee is the settlor; provided,
however,
that
any such trust does not require or permit distribution of any Issued Shares
during the term of this Agreement unless subject to its terms. Upon the death
of
the Optionee (or a Permitted Transferee to whom shares have been transferred
hereunder), the term Permitted Transferees shall also include such deceased
Optionee¢s
(or
such deceased Permitted Transferees) estate, executions, administrations,
personal representations, heirs, legatees and distributees, as the case may
be.
Person
shall
mean any individual, corporation, partnership (limited or general), limited
liability company, limited liability partnership, association, trust, joint
venture, unincorporated organization or any similar entity.
Sale
Event
shall
mean, regardless of form thereof, consummation of (i) the dissolution or
liquidation of the Company, (ii) the sale of all or substantially all the assets
of the Company on a consolidated basis to an unrelated person or entity, (iii)
a
merger, reorganization or consolidation in which the outstanding shares of
Stock
are converted into or exchanged for a different kind of securities of the
successor entity and the holders of the Company¢s
outstanding voting power immediately prior to such transaction do not own a
majority of the outstanding voting power of the successor entity immediately
upon completion of such transaction, (iv) the sale of all or a majority of
the
outstanding capital stock of the Company to an unrelated person or entity or
(v)
any other transaction in which the owners of the Company¢s
outstanding voting power immediately prior to such transaction do not own at
least a majority of the outstanding voting power of the successor entity
immediately upon completion of the transaction.
Service
Relationship
shall
mean any relationship as an employee, part-time employee, director or consultant
of the Company or any Subsidiary of the Company such that, for example, a
Service Relationship shall be deemed to continue without interruption in the
event the Optionee¢s
status
changes from full-time employee to part-time employee or
consultant.
Subsidiary
shall
mean any corporation (other than the Company) in any unbroken chain of
corporations or other entities beginning with the Company if each of the
corporations (other than the last corporation in the unbroken chain) owns stock
or other interests possessing 50 percent or more of the total combined voting
power of all classes of stock or in one of the other corporations in the
chain.
2. Vesting,
Exercisability, and Termination.
(a) No
portion of this Stock Option may be exercised until such portion shall have
vested.
(b) Except
as
set forth in Section 6, and subject to the determination of the Committee
to accelerate the above vesting schedule, this Stock Option shall be vested
and
exercisable with respect to the Option Shares as set forth above.
(c) Termination.
Except
as may otherwise be provided by the Committee, if the Optionee¢s
Service
Relationship with the Company or a Subsidiary is terminated, the period within
which to exercise this Stock Option may be subject to earlier termination as
set
forth below:
(i) Termination
Due to Death, Disability or Retirement.
If the
Optionee¢s
Service
Relationship terminates by reason of such Optionee¢s
death,
disability (as defined in Section 422(c) of the Code) or retirement (after
attainment of age sixty (60)) this Stock Option may be exercised, to the extent
exercisable on the date of such termination, by the Optionee, the
Optionee¢s
legal
representative or legatee for a period of twelve (12) months from the date
of
death, disability or retirement or until the Expiration Date, if
earlier.
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(ii) Other
Termination.
If the
Optionee¢s
employment terminates for any reason other than death, disability or retirement
(after attainment of age sixty (60)), and unless otherwise determined by the
Committee, this Stock Option may be exercised, to the extent exercisable on
the
date of termination, for a period of ninety (90) days from the date of
termination or until the Expiration Date, if earlier, provided
however,
if the
Optionee¢s
Service
Relationship is terminated for Cause, this Stock Option shall terminate
immediately upon the date of such termination.
For
purposes hereof, the Committee¢s
determination of the reason for termination of the Optionee¢s
Service
Relationship shall be conclusive and binding on the Optionee and his or her
representatives or legatees. Any portion of the Stock Option that is not
exercisable on the date of termination of the Service Relationship shall
terminate immediately and be null and void.
(d) It
is
understood and intended that this Stock Option is not intended to qualify as
an
incentive stock option as defined in Section 422 of the Code.
3. Exercise
of Stock Option.
(a) The
Optionee may exercise this Stock Option only in the following manner: Prior
to
the Expiration Date (subject to Section 6), the Optionee may deliver a Stock
Option exercise notice (an Exercise
Notice)
in the
form of Appendix
A
hereto
indicating his or her election to purchase some or all of the Option Shares
with
respect to which this Stock Option is exercisable at the time of such notice.
Such notice shall specify the number of Option Shares to be purchased. Payment
of the purchase price may be made by one or more of the methods described below.
Payment instruments will be received subject to collection.
(i) in
cash,
by certified or bank check, or other instrument acceptable to the Committee
in
U.S. funds payable to the order of the Company in an amount equal to the
purchase price of such Option Shares;
(ii) by
the
Optionee delivering to the Company a promissory note if the Board has expressly
authorized the loan of funds to the Optionee for the purpose of enabling or
assisting the Optionee to effect the exercise of his or her Stock Option;
provided that at least so much of the exercise price as represents the par
value
of the Stock shall be paid other than with a promissory note if otherwise
required by state law; or
(iii) if
the
Initial Public Offering has occurred, then (A) through the delivery (or
attestation to ownership) of shares of Common Stock that have been purchased
by
the Optionee on the open market or that have been held by the Optionee for
at
least six months and are not subject to restrictions under any plan of the
Company, (B) by the Optionee delivering to the Company a properly executed
Exercise Notice together with irrevocable instructions to a broker to promptly
deliver to the Company cash or a check payable and acceptable to the Company
to
pay the option purchase price, provided that in the event the Optionee chooses
to pay the option purchase price as so provided, the Optionee and the broker
shall comply with such procedures and enter into such agreements of indemnity
and other agreements as the Committee shall prescribe as a condition of such
payment procedure, or (C) a combination of (i), (ii), (iii)(A) and (iii)(B)
above.
(b) Certificates
for the Option Shares so purchased will be issued and delivered to the Optionee
upon compliance to the satisfaction of the Committee with all requirements
under
applicable laws or regulations in connection with such issuance. Until the
Optionee shall have complied with the requirements hereof, the Company shall
be
under no obligation to issue the Option Shares subject to this Stock Option,
and
the determination of the Committee as to such compliance shall be final and
binding on the Optionee. The Optionee shall not be deemed to be the holder
of,
or to have any of the rights of a holder with respect to, any shares of Common
Stock subject to this Stock Option unless and until this Stock Option shall
have
been exercised pursuant to the terms hereof, the Company shall have issued
and
delivered the Issued Shares to the Optionee, and the Optionee¢s
name
shall have been entered as a stockholder of record on the books of the Company.
Thereupon, the Optionee shall have full dividend and other ownership rights
with
respect to such Issued Shares, subject to the terms of this
Agreement.
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(c) Notwithstanding
any other provision hereof, no portion of this Stock Option shall be exercisable
after the Expiration Date.
4. Incorporation
of Plan.
Notwithstanding anything herein to the contrary, this Stock Option shall also
be
subject to and governed by all the terms and conditions of the Plan that are
not
necessary to achieve or maintain incentive stock option status under section
422
of the Code.
5. Transferability
of Stock Option.
This
Agreement is personal to the Optionee and is not transferable by the Optionee
in
any manner other than by will or by the laws of descent and distribution. The
Stock Option may be exercised during the Optionee¢s
lifetime only by the Optionee (or by the Optionee¢s
guardian or personal representative in the event of the Optionee¢s
incapacity). The Optionee may elect to designate a beneficiary by providing
written notice of the name of such beneficiary to the Company, and may revoke
or
change such designation at any time by filing written notice of revocation
or
change with the Company; such beneficiary may exercise the Optionee¢s
Stock
Option in the event of the Optionee¢s
death
to the extent provided herein. If the Optionee does not designate a beneficiary,
or if the designated beneficiary predeceases the Optionee, the legal
representative of the Optionee may exercise this Stock Option to the extent
provided herein in the event of the Optionee¢s
death.
6. Effect
of Certain Transactions.
In
the
case of a Sale Event, this Stock Option shall terminate upon the effective
time
of any such Sale Event unless provision is made in connection with such
transaction in the sole discretion of the parties thereto for the continuation
or assumption of this Stock Option heretofore granted, or the substitution
of
this Stock Option with a new Stock Option of the successor entity or a parent
thereof, with such adjustment as to the number and kind of shares and the per
share exercise prices as such parties shall agree. In the event of such
termination, the Optionee shall be permitted, for a specified period of time
prior to the consummation of the Sale Event as determined by the Committee,
to
exercise all or portions of the Stock Option which are then
exercisable.
7. Withholding
Taxes.
The
Optionee shall, not later than the date as of which the exercise of this Stock
Option becomes a taxable event for federal income tax purposes, pay to the
Company or make arrangements satisfactory to the Committee for payment of any
federal, state and local taxes required by law to be withheld on account of
such
taxable event. Subject to approval by the Committee, the Optionee may elect
to
have the minimum tax withholding obligation satisfied, in whole or in part,
by
authorizing the Company to withhold from shares of Common Stock to be issued
or
transferring to the Company, a number of shares of Common Stock with an
aggregate Fair Market Value that would satisfy the minimum withholding amount
due. The Optionee acknowledges and agrees that the Company or any Subsidiary
of
the Company has the right to deduct from payments of any kind otherwise due
to
the Optionee, or from the Option Shares to be issued in respect of an exercise
of this Stock Option, any federal, state or local taxes of any kind required
by
law to be withheld with respect to the issuance of Option Shares to the
Optionee.
8. Restrictions
on Transfer of Issued Shares.
None of
the Issued Shares acquired upon exercise of the Stock Option shall be sold,
assigned, transferred, pledged, hypothecated, given away or in any other manner
disposed of or encumbered, whether voluntarily or by operation of law, unless
such transfer is in compliance with all applicable securities laws (including,
without limitation, the Securities Act of 1933, as amended, and the rules and
regulations thereunder (the Act)),
and
such disposition is in accordance with the terms and conditions of Sections
8
and 9. In connection with any transfer of Issued Shares, the Company may require
the transferor to provide at the Optionee¢s
own
expense an opinion of counsel to the transferor, satisfactory to the Company,
that such transfer is in compliance with all foreign, federal and state
securities laws (including, without limitation, the Act). Any attempted
disposition of Issued Shares not in accordance with the terms and conditions
of
Sections 8 and 9 shall be null and void, and the Company shall not reflect
on
its records any change in record ownership of any Issued Shares as a result
of
any such disposition, shall otherwise refuse to recognize any such disposition
and shall not in any way give effect to any such disposition of any Issued
Shares. Subject to the foregoing general provisions, Issued Shares may be
transferred pursuant to the following specific terms and
conditions:
4
(a) Transfers
to Permitted Transferees.
The
Optionee may sell, assign, transfer or give away any or all of the Issued Shares
to Permitted Transferees; provided,
however,
that
such Permitted Transferee(s) shall, as a condition to any such transfer, agree
to be subject to the provisions of this Agreement to the same extent as the
Optionee (including, without limitation, the provisions of Sections 8, 9, 10
and
12) and shall have delivered a written acknowledgment to that effect to the
Company.
(b) Transfers
Upon Death.
Upon
the death of the Optionee, any Issued Shares then held by the Optionee at the
time of such death and any Issued Shares acquired thereafter by the
Optionee¢s
legal
representative pursuant to this Agreement shall be subject to the provisions
of
Sections 8, 9, 10 and 12, if applicable, and the Optionee¢s
estate,
executors, administrators, personal representatives, heirs, legatees and
distributees shall be obligated to convey such Issued Shares to the Company
or
its assigns under the terms contemplated hereby.
(c) Company’s
Right of First Refusal.
In the
event that the Optionee (or any Permitted Transferee holding Issued Shares
subject to this Section 8(c)) desires to sell or otherwise transfer all or
any
part of the Issued Shares, the Optionee (or Permitted Transferee) first shall
give written notice to the Company of the Optionee¢s
(or
Permitted Transferee¢s)
intention to make such transfer. Such notice shall state the number of Issued
Shares which the Optionee (or Permitted Transferee) proposes to sell (the
Offered
Shares),
the
price and the terms at which the proposed sale is to be made and the name and
address of the proposed transferee. At any time within thirty (30) days after
the receipt of such notice by the Company, the Company or its assigns may elect
to purchase all or any portion of the Offered Shares at the price and on the
terms offered by the proposed transferee and specified in the notice. The
Company or its assigns shall exercise this right by mailing or delivering
written notice to the Optionee (or Permitted Transferee) within the foregoing
30-day period. If the Company or its assigns elect to exercise its purchase
rights under this Section 8(c), the closing for such purchase shall, in any
event, take place within forty-five (45) days after the receipt by the Company
of the initial notice from the Optionee (or Permitted Transferee). In the event
that the Company or its assigns do not elect to exercise such purchase right,
or
in the event that the Company or its assigns do not pay the full purchase price
within such 45-day period, the Optionee (or Permitted Transferee) may, within
sixty (60) days thereafter, sell the Offered Shares to the proposed transferee
and at the same price and on the same terms as specified in the
Optionee¢s
(or
Permitted Transferee¢s)
notice. Any Shares purchased by such proposed transferee shall no longer be
subject to the terms of this Agreement. Any Shares not sold to the proposed
transferee shall remain subject to this Agreement.
9. Company¢s
Right of Repurchase.
(a) Right
of Repurchase.
The
Company shall have the right (the Repurchase
Right)
upon
the occurrence of any of the events specified in Section 9(b) below (the
Repurchase
Event)
to
repurchase from the Optionee (or any Permitted Transferee) some or all (as
determined by the Company) of the Issued Shares held or subsequently acquired
upon exercise of this Stock Option in accordance with the terms hereof by the
Optionee (or any Permitted Transferee) at the price per share specified below.
The Repurchase Right may be exercised by the Company within twenty-four (24)
months following the date of such event (the Repurchase
Period).
The
Repurchase Right shall be exercised by the Company by giving the holder written
notice on or before the last day of the Repurchase Period of its intention
to
exercise the Repurchase Right, and, together with such notice, tendering to
the
holder an amount equal to the Fair Market Value of the shares, determined as
provided in Section 9(c). The Company may assign the Repurchase Right to one
or
more Persons. Upon such notification, the Optionee and any Permitted Transferees
shall promptly surrender to the Company any certificates representing the Issued
Shares being purchased, together with a duly executed stock power for the
transfer of such Issued Shares to the Company or the Company¢s
assignee or assignees. Upon the Company¢s
or its
assignee¢s
receipt
of the certificates from the Optionee or any Permitted Transferees, the Company
or its assignee or assignees shall deliver to him, her or them a check for
the
Repurchase Price of the Issued Shares being purchased; provided,
however,
that
the Company may pay the Repurchase Price for such shares by offsetting and
canceling any indebtedness then owed by the Optionee to the Company. At such
time, the Optionee and/or any holder of the Issued Shares shall deliver to
the
Company the certificate or certificates representing the Issued Shares so
repurchased, duly endorsed for transfer, free and clear of any liens or
encumbrances.
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(b) Company¢s
Right to Exercise Repurchase Right.
The
Company shall have the Repurchase Right in the event that any of the following
events shall occur:
(i) The
termination of the Optionee¢s
Service
Relationship with the Company and its Subsidiaries for any reason whatsoever,
regardless of the circumstances thereof, and including without limitation upon
death, disability, retirement, discharge or resignation for any reason, whether
voluntarily or involuntarily; or
(ii) The
Optionee¢s
or
Permitted Transferee¢s
Bankruptcy.
(c) Determination
of Fair Market Value.
The
fair market value of the Issued Shares shall be, for purposes of this Section
9,
determined by the Board as of the date the Board elects to exercise its
repurchase rights in connection with a Repurchase Event.
10. Drag
Along Right.
In the
event the holders of a majority of the Company¢s
equity
securities then outstanding (the Majority
Shareholders)
determine to sell or otherwise dispose of all or substantially all the assets
of
the Company or all or fifty percent (50%) or more of the capital stock of the
Company in each case in a transaction constituting a change in control of the
Company, to any non-Affiliate(s) of the Company or any of the Majority
Shareholders, or to cause the Company to merge with or into or consolidate
with
any non-Affiliate(s) of the Company or any of the Majority Shareholders (in
each
case, the Buyer)
in a
bona
fide
negotiated transaction (a Sale),
the
Optionee, including any Permitted Transferees, shall be obligated to and shall
upon the written request of a Majority Shareholders (subject to Section 6):
(a)
sell, transfer and deliver, or cause to be sold, transferred and delivered,
to
the Buyer, his or her Issued Shares (including for this purpose all of such
Optionee¢s
or his
or her Permitted Transferee¢s
Issued
Shares that presently or as a result of any such transaction may be acquired
upon the exercise of options (following the payment of the exercise price
therefor)) on substantially the same terms applicable to the Majority
Shareholders (with appropriate adjustments to reflect the conversion of
convertible securities, the redemption of redeemable securities and the exercise
of exercisable securities as well as the relative preferences and priorities
of
preferred stock); and (b) execute and deliver such instruments of conveyance
and
transfer and take such other action, including voting such Issued Shares in
favor of any Sale proposed by the Majority Shareholders and executing any
purchase agreements, merger agreements, indemnity agreements, escrow agreements
or related documents, as the Majority Shareholders or the Buyer may reasonably
require in order to carry out the terms and provisions of this
Section 10.
11. Escrow
Arrangement.
(a) Escrow.
In
order to carry out the provisions of Sections 8, 9 and 10 of this Agreement
more
effectively, the Company shall hold any Issued Shares in escrow together with
separate stock powers executed by the Optionee in blank for transfer, and any
Permitted Transferee shall, as an additional condition to any transfer of Issued
Shares, execute a like stock power as to such Issued Shares. The Company shall
not dispose of the Issued Shares except as otherwise provided in this Agreement.
In the event of any repurchase by the Company (or any of its assigns), the
Company is hereby authorized by the Optionee and any Permitted Transferee,
as
the Optionee¢s
and
each such Permitted Transferee¢s
attorney-in-fact, to date and complete the stock powers necessary for the
transfer of the Issued Shares being purchased and to transfer such Issued Shares
in accordance with the terms hereof. At such time as any Issued Shares are
no
longer subject to the Company¢s
repurchase and first refusal rights, the Company shall, at the written request
of the Optionee, deliver to the Optionee (or the relevant Permitted Transferee)
a certificate representing such Issued Shares with the balance of the Issued
Shares to be held in escrow pursuant to this Section 11.
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(b) Remedy.
Without
limitation of any other provision of this Agreement or other rights, in the
event that the Optionee, any Permitted Transferees or any other person or entity
is required to sell the Optionee¢s
Issued
Shares pursuant to the provisions of Sections 8, 9 and 10 of this Agreement
and
in the further event that he or she refuses or for any reason fails to deliver
to the Company or its designated purchaser of such Issued Shares the certificate
or certificates evidencing such Issued Shares together with a related stock
power, the Company or such designated purchaser may deposit the applicable
purchase price for such Issued Shares with a bank designated by the Company,
or
with the Company¢s
independent public accounting firm, as agent or trustee, or in escrow, for
the
Optionee, any Permitted Transferees or other person or entity, to be held by
such bank or accounting firm for its benefit of and for delivery thereto, or
in
its discretion, pay such purchase price by offsetting any indebtedness then
owed
by the Optionee as provided above. Upon any such deposit and/or offset by the
Company or its designated purchaser of such amount and upon notice to the person
or entity who was required to sell the Issued Shares to be sold pursuant to
the
provisions of Sections 8, 9 and 10, such Issued Shares shall at such time be
deemed to have been sold, assigned, transferred and conveyed to such purchaser,
the holder thereof shall have no further rights thereto (other than the right
to
withdraw the payment thereof held in escrow, if applicable), and the Company
shall record such transfer in its stock transfer book or in any appropriate
manner.
12. Lockup
Provision.
The
Optionee agrees, if requested by the Company and any underwriter engaged by
the
Company, not to sell or otherwise transfer or dispose of any Issued Shares
(including, without limitation pursuant to Rule 144 under the Act) held by
him
or her for such period following the effective date of any registration
statement of the Company filed under the Act as the Company or such underwriter
shall specify reasonably and in good faith, not to exceed one hundred eighty
(180) days in the case of the Company¢s
Initial
Public Offering or ninety (90) days in the case of any other public offering.
13. Miscellaneous
Provisions.
(a) Termination.
The
Company¢s
repurchase rights under Section 9, the restrictions on transfer of Issued Shares
under Section 8(c) and the Drag Along obligations under Section 10 shall
terminate upon the closing of the Company¢s
Initial
Public Offering or upon consummation of any Sale Event, as a result of which
shares of the Company (or successor entity) of the same class as the Issued
Shares are registered under Section 12 of the Exchange Act and publicly traded
on NASDAQ/NMS or any national security exchange.
(b) Equitable
Relief.
The
parties hereto agree and declare that legal remedies may be inadequate to
enforce the provisions of this Agreement and that equitable relief, including
specific performance and injunctive relief, may be used to enforce the
provisions of this Agreement.
. (c) Adjustments
for Changes in Capital Structure.
If, as
a result of any reorganization, recapitalization, reclassification, stock
dividend, stock split, reverse stock split or other similar change in the Common
Stock, the outstanding shares of Common Stock are increased or decreased or
are
exchanged for a different number or kind of shares of the Company¢s
stock,
the restrictions contained in this Section 8 shall apply with equal force to
additional and/or substitute securities, if any, received by the Optionee in
exchange for, or by virtue of his or her ownership of, Issued
Shares.
(d) Change
and Modifications.
This
Agreement may not be orally changed, modified or terminated, nor shall any
oral
waiver of any of its terms be effective. This Agreement may be changed, modified
or terminated only by an agreement in writing signed by the Company and the
Optionee.
(e) Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
Delaware without regard to conflict of law principles.
7
(f ) Headings.
The
headings are intended only for convenience in finding the subject matter and
do
not constitute part of the text of this Agreement and shall not be considered
in
the interpretation of this Agreement.
(g) Saving
Clause.
If any
provision(s) of this Agreement shall be determined to be illegal or
unenforceable, such determination shall in no manner affect the legality or
enforceability of any other provision hereof.
(h) Notices.
All
notices, requests, consents and other communications shall be in writing and
be
deemed given when delivered personally, by telex or facsimile transmission
or
when received if mailed by first class registered or certified mail, postage
prepaid. Notices to the Company or the Optionee shall be addressed as set forth
underneath their signatures below, or to such other address or addresses as
may
have been furnished by such party in writing to the other.
(i) Benefit
and Binding Effect.
This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto, their respective successors, permitted assigns, and legal
representatives. The Company has the right to assign this Agreement, and such
assignee shall become entitled to all the rights of the Company hereunder to
the
extent of such assignment.
(j) Dispute
Resolution.
Except
as provided below, any dispute arising out of or relating to this Agreement
or
the breach, termination or validity hereof shall be finally settled by binding
arbitration conducted expeditiously in accordance with the J.A.M.S./Endispute
Comprehensive Arbitration Rules and Procedures (the J.A.M.S. Rules). The
arbitration shall be governed by the United States Arbitration Act, 9 U.S.C.
sec.
1-16,
and
judgment upon the award rendered by the arbitrators may be entered by any court
having jurisdiction thereof. The place of arbitration shall be located within
the State of New Jersey.
The
parties covenant and agree that the arbitration shall commence within sixty
(60)
days of the date on which a written demand for arbitration is filed by any
party
hereto. In connection with the arbitration proceeding, the arbitrator shall
have
the power to order the production of documents by each party and any third-party
witnesses. In addition, each party may take up to three (3) depositions as
of
right, and the arbitrator may in his or her discretion allow additional
depositions upon good cause shown by the moving party. However, the arbitrator
shall not have the power to order the answering of interrogatories or the
response to requests for admission. In connection with any arbitration, each
party shall provide to the other, no later than seven (7) business days before
the date of the arbitration, the identity of all persons that may testify at
the
arbitration and a copy of all documents that may be introduced at the
arbitration or considered or used by a party¢s
witness
or expert. The arbitrator¢s
decision and award shall be made and delivered within six (6) months of the
selection of the arbitrator. The arbitrator¢s
decision shall set forth a reasoned basis for any award of damages or finding
of
liability. The arbitrator shall not have power to award damages in excess of
actual compensatory damages and shall not multiply actual damages or award
punitive damages or any other damages that are specifically excluded under
this
Agreement, and each party hereby irrevocably waives any claim to such
damages.
The
parties covenant and agree that they will participate in the arbitration in
good
faith. This Section 13(j) applies equally to requests for temporary, preliminary
or permanent injunctive relief, except that in the case of temporary or
preliminary injunctive relief any party may proceed in court without prior
arbitration for the limited purpose of avoiding immediate and irreparable
harm.
8
Each
of
the parties hereto (i) hereby irrevocably submits to the jurisdiction of any
United States District Court of competent jurisdiction for the purpose of
enforcing the award or decision in any such proceeding, (ii) hereby waives,
and
agrees not to assert, by way of motion, as a defense, or otherwise, in any
such
suit, action or proceeding, any claim that it is not subject personally to
the
jurisdiction of the above-named courts, that its property is exempt or immune
from attachment or execution (except as protected by applicable law), that
the
suit, action or proceeding is brought in an inconvenient forum, that the venue
of the suit, action or proceeding is improper or that this Agreement or the
subject matter hereof may not be enforced in or by such court, and hereby waives
and agrees not to seek any review by any court of any other jurisdiction which
may be called upon to grant an enforcement of the judgment of any such court.
Each of the parties hereto hereby consents to service of process by registered
mail at the address to which notices are to be given. Each of the parties hereto
agrees that its, his or her submission to jurisdiction and its, his or her
consent to service of process by mail is made for the express benefit of the
other parties hereto. Final judgment against any party hereto in any such
action, suit or proceeding may be enforced in other jurisdictions by suit,
action or proceeding on the judgment, or in any other manner provided by or
pursuant to the laws of such other jurisdiction.
(k) Counterparts.
For the
convenience of the parties and to facilitate execution, this Agreement may
be
executed in two or more counterparts, each of which shall be deemed an original,
but all of which shall constitute one and the same document.
[SIGNATURE
PAGE FOLLOWS]
9
The
foregoing Agreement is hereby accepted and the terms and conditions thereof
hereby agreed to by the undersigned as of the date first above
written.
| DOV PHARMACEUTICAL, INC. | ||
| |
|
|
| By: | /s/ J. Xxxxxx Xxxxxx | |
|
J. Xxxxxx Xxxxxx |
||
| SVP and General Counsel | ||
|
Address:
000
Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx,
XX 00000
|
||
The
foregoing Agreement is hereby accepted and the terms and conditions thereof
hereby agreed to by the undersigned as of the date first above
written.
| OPTIONEE | ||
| |
|
|
| By: | /s/ Xxxxx Xxxxx | |
|
Xxxxx Xxxxx |
||
| Grant Date: December 1, 2005 | ||
|
Address:
________________________
________________________
________________________
|
||
A-1
[SPOUSE¢S
CONSENT
I
acknowledge that I have read the
foregoing
Incentive Stock Option Agreement
and
understand the contents thereof.
____________________________________][A
spouse’s consent is required only if the Optionee’s state of residence is one of
the following community property states: Arizona, California, Idaho, Louisiana,
New Mexico, Nevada, Texas, Washington and Wisconsin (check WI
statute).]
| DESIGNATED BENEFICIARY: | ||
| |
|
|
|
|
||
|
Beneficiary's
Address:
________________________
________________________
________________________
|
||
A-2
Appendix
A
STOCK
OPTION EXERCISE NOTICE
DOV
Pharmaceutical, Inc.
Attention:
Chief Financial Officer
____________________________
____________________________
Pursuant
to the terms of my stock option agreement dated __________ (the Agreement),
I,
_______________, hereby [Circle One] partially/fully exercise such option by
including herein payment in the amount of $______ representing the purchase
price for [Fill in number of Option Shares] _______ option shares. I have chosen
the following form(s) of payment:
[
] 1. Cash
[
] 2. Certified
or bank check payable to DOV Pharmaceutical, Inc.
[
] 3. Other
(as
described in the Agreement (please describe))
_____________________________________________________.
Sincerely
yours,
____________________________________
Name:
Address:
_________________________________
_________________________________
_________________________________
