EXHIBIT 99.2
LA JOLLA DIAGNOSTICS, INC.
STOCK OPTION AGREEMENT
RECITALS
A. The Board of Directors of La Jolla Diagnostics, Inc. (the
"Company") has adopted the Company's 2000 Incentive Stock Bonus and Option Plan
(the "Plan") for the purpose of attracting, compensating and retaining the
services of selected key employees, directors and consultants who contribute to
the financial success of the Company.
B. Optionee is an individual who is to render or has rendered
valuable services to the Company, and this Agreement is executed pursuant to,
and is intended to carry out the purposes of, the Plan in connection with the
Company's grant of a stock option to Optionee.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. Subject to and upon the terms and conditions
set forth in this Agreement, the Company hereby grants to Optionee, as of the
grant date (the "GRANT DATE") specified in the accompanying Notice of Grant of
Stock Option or other employment or similar agreement notifying Optionee of the
grant of a stock option by the Company to Optionee (the "GRANT NOTICE"), an
option to purchase up to that number of shares of the Company's Common Stock
(the "OPTION SHARES") as is specified in the Grant Notice. The Grant Notice
shall also specify whether the option granted is an incentive stock option or a
nonstatutory stock option, as such terms are defined below. The Option Shares
shall be purchasable from time to time during the option term at the option
price per share (the "OPTION PRICE") specified in the Grant Notice.
1.1 Incentive stock options ("ISOs"), intended to qualify
as such under former section 422A (now Section 422) of the Internal Revenue
Code, as amended (the "Code"), shall be granted only to the Company's salaried
officers and full-time employees.
1.2 Any option granted that does not meet the required
conditions of an ISO as set forth above in subparagraph 1.1 shall be deemed a
nonstatutory stock option ("NSO").
2. OPTION TERM. This Option shall expire at the close of
business on the expiration date (the "EXPIRATION DATE") specified in the Grant
Notice, unless sooner terminated in accordance with Sections 5, 6 or 18.
3. CERTAIN OPTIONS NONTRANSFERABLE; EXCEPTION. If the
accompanying Grant Notice specifies that this Option is an ISO, or an NSO,
which has not yet vested, this Option shall be neither transferable nor
assignable by Optionee other than by will or by the laws of descent and
distribution. If this Option is an ISO, it may be exercised, during Optionee's
lifetime, only by Optionee.
4. DATES OF EXERCISE. This Option may not vest and may not be
exercised in whole or in part at any time prior to the time the Plan is
approved by the Company's shareholders in accordance with Section 18. Provided
such shareholder approval is obtained, this Option shall thereupon vest as is
specified in the Grant Notice.
5. ACCELERATED TERMINATION OF OPTION TERM. The option term
specified in Section 2 shall terminate (and this Option shall cease to be
exercisable) prior to the Expiration Date should one of the following
provisions become applicable:
5.1 Except as otherwise provided in subparagraph 5.2.
below, should Optionee's employment or other relationship terminate with the
Company ("TERMINATION"), as shall be determined by the Company's Board of
Directors or a committee designated by the Board of Directors to administer the
Plan (the "COMMITTEE"), while this Option is outstanding, then all unvested
Options shall immediately terminate and the period for exercising any vested
Option shall be reduced to a thirty (30) day period commencing on the date of
Termination. Upon the expiration of such thirty (30) day period or (if
earlier) upon the Expiration Date, this Option shall terminate and cease to be
outstanding.
5.2 Should the Termination be a result of the death or
disability of Optionee, then the personal representative of the Optionee's
estate or the person or persons to whom the Option is transferred pursuant to
the Optionee's will or in accordance with the law of descent and distribution
shall have the right to exercise any vested Option within six (6) months after
the date of the Termination. Upon the expiration of such six (6) month period
or (if earlier) upon the Expiration Date, this Option shall terminate and cease
to be outstanding.
5.3 During the limited period of exercisability applicable
under Sections 5.1 and 5.2 above, this Option may be exercised for any or all
of the Option Shares for which this Option is, at the time of the Termination,
exercisable in accordance with the exercise schedule specified in the Grant
Notice and the provisions of Section 6 of this Agreement.
6. SPECIAL TERMINATION OF OPTION.
6.1 "CORPORATE TRANSACTION" shall mean any of the
following transactions:
6.1.1 A merger or consolidation in which the
Company is not the surviving entity, except for a transaction the principal
purpose of which is to change the State of the Company's incorporation;
6.1.2 The sale, transfer or other disposition of
all or substantially all of the assets of the Company in liquidation or
dissolution of the Company;
6.1.3 Any reverse merger in which the Company is
the surviving entity, but in which fifty percent (50%) or more of the Company's
outstanding voting stock is transferred to holders different from those who
held the securities immediately prior to the merger; or
6.1.4 An acquisition by any person or related
group of persons (other than the Company or a person that directly or
indirectly controls, is controlled by or is under common control with, the
Company) of ownership of more than fifty percent (50%) of the Company's
outstanding Common Stock, pursuant to a tender or exchange offer (other than a
tender or exchange offer approved by the Board of Directors of the Company and
the Board of Directors determines in its sole discretion shall not be
considered a "Corporate Transaction").
All outstanding unexercised Options granted under this Agreement shall
automatically and immediately vest and become exercisable immediately prior to
the specified effective date for the Corporate Transaction, unless, with the
approval of the Board of Directors of the Company, the Options are assumed in
connection with such Corporate Transaction or substitute options are granted as
provided in the Plan. Upon consummation of the Corporate Transaction, all
outstanding Options under this Agreement shall terminate and cease to be
outstanding, unless assumed by the surviving successor corporation or parent
thereof.
6.2 If this Option is to be assumed in connection with the
Corporate Transaction or is otherwise to continue in effect, then it shall be
appropriately adjusted, immediately after such Corporate Transaction, to apply
and pertain to the number and class of securities which would have been
issuable, in consummation of such Corporate Transaction, to an actual holder of
the same number of shares of Common Stock as are subject to such Option
immediately prior to such Corporate Transaction. Appropriate adjustments shall
also be made to the Option Price payable per share, provided that the aggregate
Option Price payable for such securities shall remain the same.
6.3 The exercisability of this Option as an ISO under the
Federal tax laws (if designated as such in the Grant Notice) shall, in
connection with any such Corporate Transaction, be subject to the applicable
dollar limitation set forth in the Code.
6.4 This Agreement shall not in any way affect the right
of the Company to adjust, reclassify, reorganize or otherwise make changes in
its capital or business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets.
7. ADJUSTMENT IN OPTION SHARES. In the event additional shares
of Common Stock are issued pursuant to a stock split, stock dividend or other
recapitalization resulting in combinations or exchanges of shares or otherwise,
the number of shares of Common Stock then covered by each outstanding Option
shall be increased proportionately with no increase in the total Option Price
of the Common Stock then so covered, and the number of shares of Common Stock
reserved for the purpose of the Plan shall be increased by the same proportion.
In the event that the shares of Common Stock of the Company from time to time
issued and outstanding are reduced by a combination of shares, the number of
shares of Common Stock then covered by each outstanding Option shall be reduced
proportionately with no reduction in the total Option Price of the Common Stock
then so covered, and the number of shares of Common Stock reserved for the
purpose of the Plan shall be reduced by the same proportion.
8. PRIVILEGE OF STOCK OWNERSHIP. The holder of this Option shall
not have any of the rights of a shareholder with respect to the Option Shares
until such individual shall have exercised the Option and paid the Option
Price.
9. MANNER OF EXERCISING OPTION.
9.1 In order to exercise this Option with respect to all
or any part of the Option Shares for which this Option is at the time
exercisable, Optionee (or in the case of exercise after Optionee's death, the
Optionee's executor, administrator, heir or legatee, as the case may be) must
pay the aggregate Option Price in one of the following alternative forms:
(1) Full payment in cash or check; or
(2) Any other form which the Board of Directors
or the Committee, if formed, may, in its
discretion, approve at the time of exercise.
9.2 For purposes of this Agreement, the fair market value
of a share of Common Stock on any relevant date shall be determined in
accordance with the terms of the Plan.
9.3 As soon after the Exercise Date as practical, the
Company shall mail or deliver to Optionee or to the other person or persons
exercising this Option a certificate or certificates representing the shares so
purchased and paid for, with the appropriate legends affixed thereto; provided,
however, if in the determination of the Committee, based upon the advice of the
Company's tax advisors, the issuance of the Option Shares at such time would
materially reduce or eliminate any tax credit, net loss carry-over or other tax
benefit of the Company, the Company may delay issuance and delivery of the
Option Shares until up to the earlier of: (i) the day preceding the occurrence
of a Corporate Transaction; or (ii) one year after the date of exercise by
Optionee.
9.4 In no event may this Option be exercised for any
fractional shares.
10. FEDERAL INCOME TAX CONSEQUENCES. The federal income tax
consequences concerning the grant of this Option is briefly discussed in the
Plan and Section 19 below. The Company assumes no responsibility to advise
Optionee regarding the tax consequences of exercising an option or disposing of
the Option Shares and Optionee must rely solely upon Optionee's independent tax
advisors.
11. COMPLIANCE WITH LAWS AND REGULATIONS.
11.1 The exercise of this Option and the issuance of Option
Shares upon such exercise shall be subject to compliance by the Company and the
Optionee with all applicable requirements of law relating thereto.
11.2 In connection with the exercise of this Option,
Optionee shall execute and deliver to the Company such representations in
writing as may be requested by the Company in order for it to comply with the
applicable requirements of Federal and State securities laws.
12. SUCCESSORS AND ASSIGNS. Except to the extent otherwise
provided in Section 3 and Section 5 of this Agreement, the provisions of this
Agreement shall inure to the benefit of, and be binding upon, the successors,
administrators, heirs, legal representatives and assigns of Optionee and the
successors and assigns of the Company.
13. LIABILITY OF COMPANY.
13.1 If the Option Shares covered by this Agreement exceed,
as of the Grant Date, the number of shares of Common Stock which may without
shareholder approval be issued under the Plan, then this Option shall be void
with respect to such excess shares, unless shareholder approval of an amendment
sufficiently increasing the number of shares of Common Stock issuable under the
Plan is obtained.
13.2 The inability of the Company to obtain approval from
any regulatory body having authority deemed by the Company to be necessary to
the lawful issuance and sale of any Common Stock pursuant to this option shall
relieve the Company of any liability with respect to the non-issuance or sale
of the Common Stock as to which such approval shall not have been obtained.
The Company, however, shall use its diligent efforts to obtain all such
approvals.
14. NO EMPLOYMENT OR SERVICE CONTRACT. Nothing in this Agreement
or in the Plan shall confer upon the Optionee any right to continue in the
service of the Company for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Company or the rights of the
Optionee, which rights are hereby expressly reserved by each, to terminate
Optionee's Service at any time for any reason whatsoever, with or without
cause.
15. NOTICES. Any notice required to be given or delivered to the
Company under the terms of this Agreement shall be in writing and addressed to
the Company in care of Xxxxxx Xxxxxxx at 0000 Xxxxxxx Xxx., Xxxxx 000, Xx
Xxxxx, XX 00000. Any notice required to be given or delivered to Optionee
shall be in writing and addressed to Optionee at the last known address of
Optionee in Company's employment records. All notices shall be deemed to have
been given or delivered upon personal delivery or upon deposit in the U.S.
mail, postage prepaid and properly addressed to the party to be notified.
16. CONSTRUCTION. This Agreement and the option evidenced hereby
are made and granted pursuant to the Plan and are in all respects limited by
and subject to the express terms and provisions of the Plan.
17. GOVERNING LAW. The interpretation, performance, and
enforcement of this Agreement shall be governed by the laws of the State of
California without resort to that State's conflict-of-laws rules and the laws
of the United States of America.
18. SHAREHOLDER APPROVAL. The grant of this Option is subject to
approval of the Plan, and if applicable each amendment to the Plan, by the
Company's shareholders. Notwithstanding any provision of this Agreement to the
contrary, this Option may not be exercised in whole or in part until such
shareholder approval is obtained. In the event that such shareholder approval
is not obtained, then this Option shall thereupon terminate in its entirety and
the Optionee shall have no further rights to acquire any Option Shares
hereunder.
19. ADDITIONAL TERMS APPLICABLE TO AN INCENTIVE STOCK OPTION. In
the event this Option is an incentive stock option as specified in the Grant
Notice, this Option may cease to qualify for favorable tax treatment as an
incentive stock option under the Federal tax laws if (and to the extent) this
Option is exercised and the Option Shares are disposed of other than in
compliance with applicable Federal tax laws and regulations. Optionee should
rely solely upon Optionee's independent tax advisors.
20. WITHHOLDING. Optionee hereby agrees to make appropriate
arrangements with the Company for the satisfaction of all Federal, State or
local income tax withholding requirements and Federal social security employee
tax requirements applicable to the exercise of this Option.
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La Jolla Diagnostics, Inc. Optionee
