EXHIBIT 10.3
XXXXXXXXXX LABORATORIES, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
WITH OUTSIDE DIRECTOR
This Agreement, made as of __________, by and between XXXXXXXXXX
LABORATORIES, INC., a Texas corporation (the "Company"), and
______________ ("Optionee"),
W I T N E S S E T H:
WHEREAS, the Company's 1995 Stock Option Plan, as amended (the
"Plan"), provides that four-year, nonqualified stock options to
purchase shares of the Company's Common Stock may be granted to the
persons who are Outside Directors (as defined below); and
WHEREAS, Optionee is an Outside Director, and it has been
determined that such an option should be granted to him;
NOW, THEREFORE, the Company and Optionee hereby agree as
follows:
1. Definitions. As used in this Agreement, the following
terms have the following meanings, respectively:
(a) "Affiliate" has the meaning set forth in Article I,
Section 1.02(a) of the Plan and includes any party now or
hereafter coming within that definition.
(b) "Board" means the Board of Directors of the Company.
(c) "Commencement Date" means the date of this Agreement.
(d) "Common Stock" has the meaning set forth in Article I,
Section 1.02(e) of the Plan.
(e) "Expiration Date" means the date that is four (4)
years from and inclusive of the date of this Agreement. (By way
of example, if the date of this Agreement were June 1, 1998, the
Expiration Date would be May 31, 2002.)
(f) "Outside Director" has the meaning set forth in
Article I, Section 1.02(n) of the Plan.
2. Option. The Company hereby grants to Optionee the option
to purchase, on the terms hereinafter set forth, ________ shares of
the Company's Common Stock at a price of $5.25 per share during the
period beginning on the Commencement Date and ending on the
Expiration Date. Except as otherwise provided herein, this option
shall remain effective during its entire term, regardless of whether
Optionee continues to serve as an Outside Director. In the event of
Optionee's death on or before the Expiration Date, the executor or
administrator of Optionee's estate or anyone who shall have acquired
this option by will or pursuant to the laws of descent and
distribution may exercise this option at any time on or before the
Expiration Date, to the extent Optionee was entitled to do so at the
time of his death. Notwithstanding anything to the contrary herein,
this option shall terminate immediately on the termination of
Optionee's Board membership if he ceases to serve on the Board by
reason of his (a) fraud or intentional misrepresentation, or (b)
embezzlement, misappropriation or conversion of assets or
opportunities of the Company or any Affiliate.
The Stock Option Committee that administers the Plan shall
have the authority to make, in its sole discretion, any and all
determinations that are required to be made in connection with this
Agreement regarding the reasons for or circumstances of Optionee's
ceasing to serve on the Board, including but not limited to the
determinations of (i) whether Optionee ceased to serve on the Board
for any of the reasons set forth in clause (a) or clause (b) of
the immediately preceding paragraph and (ii) what criteria or
requirements, if any, should be applied in making the determinations
described in clause (1) of this sentence.
3. Exercisability. Subject to the provisions of Section 2
hereof, this option may be exercised in whole at any time, or in part
from time to time, during the period beginning on the Commencement
Date and ending on the Expiration Date. Notwithstanding any contrary
indication in this Agreement, no fractional shares of Common Stock
may be purchased upon exercise of this option.
4. Manner of Exercise. This option may be exercised by
written notice signed by the person entitled to exercise the same and
delivered to the President of the Company or sent by United States
registered mail addressed to the Company (for the attention of the
President) at its corporate office in Irving, Texas. Such notice
shall state the number of shares of Common Stock as to which this
option is exercised and shall be accompanied by payment of the full
purchase price of such shares, plus the amount of any federal, state
or local taxes required by law to be paid or withheld in connection
with such exercise.
5. Payment. The purchase price for shares of Common Stock
purchased upon exercise of this option shall be paid in cash or by
check in United States dollars.
6. Delivery of Shares. Delivery of the certificate or
certificates representing the shares of Common Stock purchased upon
exercise of this option shall be made promptly after the Company's
receipt of notice of exercise and payment. If the Company so elects,
its obligation to deliver shares of Common Stock upon the exercise of
this option shall be conditioned upon its receipt from the person
exercising this option of any additional documents that, in the
opinion of the Company and its legal counsel, are required in order
to comply with any applicable law.
7. Adjustments. In the event that, before delivery by the
Company of all the shares of Common Stock in respect of which this
option is granted, the Company shall have effected a Common Stock
split or a dividend payable in Common Stock, or the outstanding
Common Stock of the Company shall have been combined into a smaller
number of shares, the shares of Common Stock still subject to this
option shall be increased or decreased to reflect proportionately the
increase or decrease in the number of shares outstanding, and the
purchase price per share shall be decreased or increased to make the
aggregate purchase price for all the shares then subject to this
option the same as immediately prior to such stock split, stock
dividend or combination. In the event of a reclassification of the
shares of Common Stock not covered by the foregoing, or in the event
of a liquidation or reorganization (including a merger, consolidation
or sale of assets) of the Company, the Board shall make such
adjustments, if any, as it may deem appropriate in the number,
purchase price and kind of shares still subject to this option.
8. Transferability. This option is not transferable otherwise
than by will or the laws of descent and distribution, and during the
lifetime of Optionee this option is exercisable only by Optionee or,
if Optionee is legally incompetent, by Optionee's legal
representative.
9. Board Membership. Nothing in this Agreement confers upon
Optionee any right to continue to serve as an Outside Director, nor
shall this Agreement interfere in any manner with the right of the
Company's shareholders to terminate Optionee's position as an Outside
Director with or without cause at any time.
10. Option Subject to Plan. By execution of this Agreement,
Optionee agrees that this option and the shares of Common Stock to be
received upon exercise hereof shall be governed by and subject to all
applicable provisions of the Plan.
11. Construction. This option shall not be treated as an
incentive stock option under Section 422 of the Internal Revenue Code
of 1986, as amended. This Agreement is governed by, and shall be
construed and enforced in accordance with, the laws of the State of
Texas. Words of any gender used in this Agreement shall be construed
to include any other gender, unless the context requires otherwise.
The headings of the various sections of this Agreement are intended
for convenience of reference only and shall not be used in construing
the terms hereof.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first set forth above.
XXXXXXXXXX LABORATORIES, INC.
By:____________________________________
Xxxxxxx X. Xxxxxx, Ph.D., President
RECORD OF EXERCISE
DATE NO. OF SHARES EXERCISED INITIAL/AGREED
