STOCK OPTION AGREEMENT AND NOTICE OF GRANT Date of Grant: February 5, 2007
EXHIBIT
10.16
AND
NOTICE
OF GRANT
Date
of
Grant: February 5, 2007
Xxxxx
X.
XxXxxxx
c/o
Century Capital Associates LLC
000
Xxxxxx Xxxxxx
Xxxxxx
Xxxx, Xxx Xxxxxx 00000
Dear
Xxxxx:
In
recognition of your service to Scivanta Medical Corporation (“Scivanta”) and to
encourage you to continue to take into account the long-term interests of
Scivanta, the Board of Directors of Scivanta (the “Board”) has authorized the
grant to you of an option (the “Option”) to purchase five-hundred thousand
(500,000) shares (the “Shares”) of Scivanta’s common stock, par value $.001 per
share (“Common Stock”), under the Scivanta Medical Corporation 2002 Equity
Incentive Plan (the “Equity Incentive Plan”).
1.
Equity
Incentive Plan.
The
Option is a non-qualified stock option (defined as a NSO under the Equity
Incentive Plan) and subject to each and every provision of the Equity Incentive
Plan which are incorporated by reference herein, as well as the terms and
provisions set forth in this Stock Option Agreement and Notice of Grant (this
“Stock Option Agreement”). The Equity Incentive Plan shall govern and be
conclusive as to all matters not expressly provided for in this Stock Option
Agreement. In the event of any conflict between the terms of this Stock Option
Agreement and the Equity Incentive Plan, the terms of this Stock Option
Agreement shall govern. All capitalized terms contained herein which are not
otherwise defined herein shall have the meanings ascribed to them in the Equity
Incentive Plan. By accepting the Option you agree to be bound by the provisions
of the Equity Incentive Plan and this Stock Option Agreement. A copy of the
Equity Incentive Plan has been previously provided to you.
2. Exercise
Price and Procedure.
The
per
share exercise price of the Option is $.20 (the “Option Price”), which is equal
to the closing price of Scivanta’s Common Stock on February 5, 2007. The Option
Price may be adjusted as provided for in the Equity Incentive Plan. Full payment
shall be made for any Shares to be purchased under the Option at the time of
exercise of the Option. Payment for the Shares to be purchased upon the exercise
of the Option shall be made by personal check or in cash in an amount equal
to
the aggregate Option Price. Alternatively, payment for the Shares to be
purchased upon the exercise of the Option may be made by (a) delivery of a
number of shares of Common Stock owned by you which have an aggregate Fair
Market Value equal to or greater than the aggregate Option Price, or (b)
instructing Scivanta to withhold from the Shares deliverable upon exercise
of
the Option that number of Shares which have an aggregate Fair Market Value
equal
to or greater than the aggregate Option Price. The portion of any payment in
the
form of Common Stock which exceeds the aggregate Option Price, will be returned
to you in the form of a cash payment.
Subject
to the terms of this Stock Option Agreement and the Equity Incentive Plan,
the
Option shall become exercisable on the date or dates, and subject to such
conditions, as are set forth herein. To the extent that a portion of the Option
is or becomes exercisable and is not exercised, such portion shall accumulate
and be exercisable by you in whole or in part at any time prior to expiration
of
the Option, subject to the terms of this Stock Option Agreement and the Equity
Incentive Plan. You expressly acknowledge that the Option may vest and be
exercisable only upon such terms and conditions as are provided in this Stock
Option Agreement and the Equity Incentive Plan.
To
exercise all or any portion of the Option, you must provide to Scivanta (a)
written notice of such exercise, which is to include the number of Shares of
Scivanta’s Common Stock to be purchased upon such exercise (the “Notice of
Exercise”), and (b) payment of the aggregate Option Price as provided above. A
form of Notice of Exercise is attached hereto. The Notice of Exercise is to
be
delivered to Scivanta at the following address:
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Scivanta
Medical Corporation
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Xxxxxx
Xxxx, Xxx Xxxxxx 00000
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| Attn: | Xxxxxx X. Xxxxxxx | |
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Executive
Vice President,
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Chief
Financial Officer and
Secretary
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Upon
the
exercise of the Option in whole or in part and payment of the aggregate Option
Price in accordance with the provisions of this Stock Option Agreement, Scivanta
shall, as soon thereafter as practicable, deliver to you a certificate or
certificates for the Shares purchased.
3. Term
and Vesting of Options.
The date
of grant of the Option is February 5, 2007 and the Option shall expire on and
may not be exercised after February 5, 2017 (the “Term”), unless such Term is
reduced or extended as provided for herein or in the Equity Incentive
Plan.
The
Shares of Common Stock underlying the Option vest at a rate of 14,000 Shares
per
month as of the last day of each calendar month with the first date of vesting
being February 28, 2007. The vesting of the Shares underlying the Option can
be
accelerated as follows: (i) 25,000 Shares upon execution of a Board-approved
agreement between the Company and a medical device company for the purpose
of
collaboration on the development of the Xxxxxx Cardiac Monitoring System (the
“HCMS”) or the distribution of the HCMS; (ii) 100,000 Shares upon the Company’s
receipt of approval from the United States Food and Drug Administration to
market the HCMS; (iii) 50,000 Shares upon the Company’s receipt of cash in the
amount of $2,000,000 (whether by debt, equity or otherwise) for use in the
development and/or marketing of the HCMS, the payment of general and
administrative expenses and for other purposes; (iv) 50,000 Shares upon the
Company’s acquisition of a product or technology other than the HCMS; and (v)
50,000 Shares upon the Company’s receipt of cash in the amount of $3,000,000
(whether by debt, equity or otherwise) for use in the development and/or
marketing of the HCMS or any other acquired product, the payment of general
and
administrative expenses and for other purposes.
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Unless
the Board determines otherwise, upon the termination of your employment with
Scivanta for any reason whatsoever, including death and disability, your right
to purchase any Shares underlying the Option which have not vested shall
terminate and be of no further effect. Any Shares of Common Stock underlying
the
Option which have vested at the time your employment with Scivanta terminates,
for any reason other than death, shall remain subject to purchase through the
remainder of the Term.
Upon
your
death, all vested Shares of Common Stock underlying the Option may be purchased
by the administrator of your estate for a period of one year following your
death. Your right to purchase any vested Shares of Common Stock available for
purchase under the Option which have not been purchased within one year from
the
date of your death, shall automatically terminate on the one year anniversary
of
your death and be of no further effect.
In
the
event of a Change in Control (as defined below) of Scivanta, the Option becomes
fully vested as of ten days prior to the Change in Control. For purposes of
the
Option and this Stock Option Agreement, a Change of Control means any
recapitalization, reorganization, reclassification, consolidation, merger,
sale
of all or substantially all of Scivanta’s assets to another individual,
partnership, corporation or other such entity or any other transaction which
is
effected in such a way that holders of more than 50% of the shares of Common
Stock then outstanding are entitled to receive (either directly or upon
subsequent liquidation) stock, securities or assets of another individual,
partnership, corporation or other such entity with respect to or in exchange
for
their Common Stock.
4. Miscellaneous.
4.01. Non-Qualified
Stock Option.
The
Option is a non-qualified stock option which is not qualified for favorable
tax
treatment under Sections 422 or 423 of the Internal Revenue Code of 1986, as
amended (the “Code”). Scivanta recommends that you consult with your tax advisor
regarding the tax consequences related to the Option.
4.02. Restrictions
on Transferability of the Option and Shares.
The
Option is not transferable by you except by will or the laws of descent and
distribution. The Shares to be acquired by you pursuant to the exercise of
the
Option have not been registered under the Securities Act of 1933, as amended,
or
any state securities act or law, and, as a result, are subject to certain
restrictions on transfer thereunder.
4.03. Withholding.
As a
condition to the issuance of Shares upon the exercise of the Option, Scivanta
can require you to remit to it the amount which Scivanta has determined must
be
withheld in respect of federal or state income or employment taxes attributable
to any taxable income to be recognized by you in connection with the exercise
of
the Option.
4.04. Employment
Rights.
No
provision of this Stock Option Agreement or of the Equity Incentive Plan shall
give you any right to continue in the employ of Scivanta, create any inference
as to the length your employment with Scivanta, affect the right of Scivanta
to
terminate the employment of you, with or without cause, or give you any right
to
participate in any employee welfare or benefit plan or other program of
Scivanta.
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4.05. Governing
Law and Jurisdiction.
The
Equity Incentive Plan and this Stock Option Agreement shall be construed and
their respective provisions enforced and administered in accordance with the
laws of the State of Nevada.
4.06. Compliance
with Code Section 409A.
Notwithstanding any other provision in this Stock Option Agreement or the Equity
Incentive Plan to the contrary, if and to the extent that Section 409A (“Section
409A”) of the Code is deemed to apply to the Equity Incentive Plan, this Stock
Option Agreement or the Option granted hereby, it is the general intention
of
Scivanta that the Equity Incentive Plan, this Stock Option Agreement and the
Option shall comply with Section 409A, related regulations or other guidance,
and the Equity Incentive Plan, this Stock Option Agreement and the Option shall,
to the extent practicable, be construed in accordance therewith.
If
you
wish to accept the Option granted hereby pursuant to the terms set forth herein,
please signify your acceptance by countersigning this Stock Option Agreement
below where designated. Any comments or questions should be directed to Xxxxxx
X. Xxxxxxx, Executive Vice President, Chief Financial Officer and Secretary
at
Scivanta Medical Corporation, 000 Xxxxxx Xxxxxx, Xxxxxx Xxxx, Xxx Xxxxxx 00000.
The phone number of Scivanta is (000) 000-0000.
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Very
truly yours,
Scivanta
Medical Corporation
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/s/ Xxxxxx
X. Xxxxxxx
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Name:
Xxxxxx
X. Xxxxxxx
Title:
Executive
Vice President, Chief Executive Officer and
Secretary
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By
the execution hereof, I accept the grant of Option provided for herein
and
agree to be bound by the terms and provisions set forth in this Stock
Option Agreement and the Equity Incentive Plan.
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/s/
Xxxxx X. XxXxxxx
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Xxxxx
X. XxXxxxx
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4
NOTICE
OF EXERCISE
Date:
_______ __, 20__
Scivanta
Medical Corporation
000
Xxxxxx Xxxxxx
Xxxxxx
Xxxx, Xxx Xxxxxx 00000
Attention:
Xxxxxx X. Xxxxxxx, Executive Vice President, Chief Financial Officer and
Secretary
Dear
Xx.
Xxxxxxx:
I
hereby
exercise the non-qualified stock option (the “Option”) granted to me on February
5, 2007 for the purchase of ________ shares (the “Shares”) of common stock, par
value $.001 per share (“Common Stock”), of Scivanta Medical Corporation
(“Scivanta”). I was granted the Option under the Scivanta Medical Corporation
2002 Equity Incentive Plan (the “Equity Incentive Plan”). The per share exercise
price is $.20 (the “Option Price”) and the aggregate Option Price for the Shares
being purchased is $___________.
Please
check the box next to the applicable payment provision:
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As
full payment for the Shares being purchased, enclosed with this Notice
of
Exercise is a personal check or cash in the amount of the aggregate
Option
Price of $___________. (Checks
should be made payable to “Scivanta Medical Corporation”.)
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I
wish to pay for the Shares being purchased by delivering to Scivanta
that
number of Shares of Common Stock which have an aggregate Fair Market
Value
(as defined in the Equity Incentive Plan) equal to or greater than
the
aggregate Option Price.
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I
wish to pay for the Shares being purchased by having Scivanta withhold
therefrom the number of Shares of Common Stock which have an aggregate
Fair Market Value equal to or greater than the aggregate Option
Price.
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I
agree
hereby that Scivanta is not required to issue me the Shares to be purchased
pursuant to my exercise of the Option as provided for in this Notice of
Exercise, until I have remitted to Scivanta the aggregate amount of any
applicable withholding taxes which Scivanta has notified me shall be withheld
in
connection with the exercise of the Option.
I
hereby
understand that the Shares to be acquired by me pursuant to the exercise of
the
Option have not been registered under the Securities Act of 1933, as amended,
or
any state securities act or law, and, as a result, are subject to certain
restrictions on transfer thereunder.
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Signature
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Print
Name
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Address
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Tax
Identification Number
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