EXHIBIT 10.5
EARLY EXERCISE STOCK PURCHASE AGREEMENT
This Agreement is made by and between Cell Pathways, Inc. a Delaware
corporation (the "Corporation"), and ____________________________ ("Purchaser").
Witnesseth:
Whereas, Purchaser holds a _________ stock option to purchase shares of
common stock of the Corporation pursuant to the Corporation's 1993 Stock Option
Plan (the "Plan") which Purchaser desires to exercise; and
Whereas, Purchaser wishes to take advantage of the early exercise provision
of his option and therefore to enter into this Agreement;
Now, Therefore, It Is Agreed between the parties as follows:
1. Purchaser hereby agrees to purchase from the Corporation, and the
Corporation hereby agrees to sell to Purchaser, an aggregate of _______ shares
of the common stock (the "Stock") of the Corporation, for an exercise price of
$_______ per share (total exercise price: ______________ ($______)), payable in
cash.
The closing hereunder shall occur at the offices of the Corporation on the
date of this Agreement or at such other time and place as the parties may
mutually agree upon in writing.
At the closing, Purchaser shall deliver three (3) stock assignments in the
form of Exhibit A duly endorsed (with date and number of shares left blank) and
the total exercise price in cash.
At the closing or as soon thereafter as practicable, the Purchaser shall
redeliver to the Corporation share certificates for all of the Stock that has
not yet vested ("Unvested Stock") and is to be subject to the Purchase Option
(as defined in paragraph 2 below).
2. Any Unvested Stock purchased by Purchaser pursuant to this Agreement
shall be subject to the following option ("Purchase Option"):
(a) In the event that Purchaser shall cease to provide services to
the Corporation for any reason (including his death), or no reason, with or
without cause, the Purchase Option may be exercised. The Corporation shall have
the right at any time within the ninety (90) day period after Purchaser's
termination of service with the Corporation or such longer period as may be
agreed to by the Corporation and Purchaser (for example, for purposes of
satisfying the requirements of Section 1202(c)(3) of the Internal Revenue Code)
to purchase from Purchaser or his personal representative, as the case may be,
at the price per share paid by Purchaser pursuant to this Agreement ("Option
Price") any or all shares of Unvested Stock.
1.
(b) The Corporation shall be entitled to pay for any shares purchased
pursuant to its Purchase Option at the Corporation's option in cash, by offset
against any indebtedness owing to the Corporation by Purchaser, or a combination
of both.
(c) As used herein, the relationship with the Corporation shall
include such relationship with an affiliate of the Corporation.
(d) This Agreement is not an employment contract and nothing in this
Agreement shall be deemed to create in any way whatsoever any obligation on the
part of the Purchaser to continue the relationship with the Corporation, or of
the Corporation to continue the relationship with the Purchaser.
(e) The Corporation shall deliver to the Purchaser the share
certificates for Unvested Stock at such time, if any, as such Unvested Stock
shall have vested prior to exercise of this Purchase Option.
3. The Purchase Option may be exercised by giving written notice of
exercise delivered or mailed as provided in paragraph 12. Upon providing such
notice and payment or tender of the purchase price, the Corporation shall become
the legal and beneficial owner of the Stock being purchased and all rights and
interests therein or related thereto.
4. If from time to time during the term of the Purchase Option there is
any stock dividend or liquidating dividend or distribution of cash and/or
property, stock split or other change in the character or amount of any of the
outstanding securities of the Corporation, then, in such event, any and all new,
substituted or additional securities or other property to which Purchaser is
entitled by reason of his ownership of Stock will be immediately subject to the
Purchase Option and be included in the word "Stock" for all purposes of the
Purchase Option with the same force and effect as the shares of Stock then
subject to the Purchase Option. While the total Option Price shall remain the
same after each such event, the Option Price per share of Stock upon exercise of
the Purchase Option shall be appropriately adjusted.
5. All certificates representing any shares of Stock of the Corporation
subject to the provisions of this Agreement shall have endorsed thereon legends
in substantially the following form:
(i) "The shares represented by this certificate are subject to an
option set forth in an agreement between the Corporation and the registered
holder, or his predecessor in interest, a copy of which is on file at the
principal office of this corporation. Any transfer or attempted transfer of any
shares subject to such option is void without the prior express written consent
of the issuer of these shares."
(ii) "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, ARE HELD FOR INVESTMENT PURPOSES
ONLY AND MAY NOT BE SOLD, TRANSFERRED OR DISTRIBUTED AT ANY TIME UNLESS A
REGISTRATION STATEMENT IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO THE
2.
SECURITIES ACT OF 1933 COVERING SUCH SHARES OR UNLESS, IN THE
OPINION OF COUNSEL FOR THE COMPANY, SUCH A REGISTRATION STATEMENT IS NOT
REQUIRED."
6. Purchaser acknowledges that he is aware that the Stock to be issued to
him by the Corporation pursuant to this Agreement has not been registered under
the Securities Act of 1933, as amended (the "Act"), on the basis that no
distribution or public offering of the Stock is to be effected, and in this
connection acknowledges that the Corporation is relying on the following
representations: Purchaser warrants and represents to the Corporation that he is
acquiring the Stock for investment and not with a view to or for sale in
connection with any distribution of the Stock or with any present intention of
distributing or selling the Stock and he does not presently have reason to
anticipate any change in circumstances or any particular occasion or event which
would cause him to sell the Stock. Purchaser recognizes that the Stock must be
held indefinitely unless it is subsequently registered under the Act or an
exemption from such registration is available and, further, recognizes that the
Corporation is under no obligation to register the Stock or to comply with any
exemption from such registration.
7. Purchaser is aware that the Stock may not be sold pursuant to Rule 144
adopted under the Act unless certain conditions are met and until Purchaser has
held the Stock for at least two (2) years. Among the conditions for use of Rule
144 is the availability of specified current public information about the
Corporation. Purchaser recognizes that the Corporation presently has no plans to
make such information available to the public.
Whether or not the Purchase Option is exercised or has lapsed, Purchaser
further agrees not to make any disposition of any of the Stock in any event
unless and until:
(a) There is then in effect a registration statement under the Act
covering such proposed disposition and such disposition is made in accordance
with such registration statement; or
(b) (i) Purchaser shall have notified the Corporation of the proposed
disposition and shall have furnished the Corporation with a detailed statement
of the circumstances surrounding the proposed disposition, and (ii) Purchaser
shall have given the Corporation an opinion of counsel, which opinion and
counsel shall be satisfactory to the Corporation, to the effect that such
disposition will not require registration of the Stock under the Act.
8. Purchaser shall not sell or transfer any of the Stock subject to the
Purchase Option or any interest therein so long as such Stock is subject to the
Purchase Option.
9. The Corporation shall not be required (i) to transfer on its books any
shares of Stock of the Corporation which shall have been sold or transferred in
violation of any of the provisions set forth in this Agreement or (ii) to treat
as owner of such shares or to accord the right to vote as such owner or to pay
dividends to any transferee to whom such shares shall have been so transferred.
3.
10. Subject to the provisions of paragraphs 8 and 9 above, Purchaser (but
not any unapproved transferee) shall, during the term of this Agreement,
exercise all rights and privileges of a stockholder of the Corporation with
respect to the Stock.
11. The parties agree to execute such further instruments and to take such
further action as reasonably may be necessary to carry out the intent of this
Agreement.
12. Any notice required or permitted hereunder shall be given in writing
and shall be deemed effectively given upon personal delivery or five days after
deposit in any United States Post Office Box, by registered or certified mail
with postage and fees prepaid, addressed to the other party hereto as his
address hereinafter shown below his signature or at such other address as such
party may designate by ten (10) days' advance written notice to the other party
hereto.
13. This Agreement shall bind and inure to the benefit of the successors
and assigns of the Corporation and, subject to the restrictions on transfer
herein set forth, inure to the benefit of and be binding upon Purchaser, his
heirs, executors, administrators, successors, and assigns. Without limiting the
generality of the foregoing, the Purchase Option of the Corporation hereunder
shall be assignable by the Corporation at any time or from time to time, in
whole or in part.
In Witness Whereof, the parties hereto have executed this Agreement as of
the ____ day of __________, 19__.
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By
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Address: --------------------------------------
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Purchaser
Address: --------------------------------------
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Attachments:
Exhibit A Assignment Separate from Certificate
4.
