EXHIBIT B
XXXXXX X. XXXX STOCK OPTION AGREEMENTS
MANNKIND CORPORATION
STOCK OPTION AWARD
This Stock Option Award ("Award") is made as of the Date of Grant
indicated below by MannKind Corporation, a Delaware corporation (the "Company"),
for the benefit of the person named below as Grantee.
WHEREAS, Xxxxxxx is a director and an employee of the Company; and
WHEREAS the Board of Directors of the Company (the "Board") has approved
the grant to Grantee of an option to purchase shares of the Common Stock, par
value $.01 per share, of the Company (the "Common Stock"), on the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing recitals and the
covenants set forth herein, the Company hereby agrees, and by accepting this
Award the Grantee agrees, as follows:
1. Grant of Option; Certain Terms and Conditions. The Company hereby
grants to Grantee, as of the Date of Grant indicated below, an option to
purchase all or any portion of the number of shares of Common Stock indicated
below (the "Option Shares") as to which the Option has become exercisable at the
Exercise Price per share indicated below, which option shall expire at 5:00
o'clock p.m., Los Angeles time, on the Expiration Date indicated below and shall
be subject to all of the terms and conditions set forth in this Award (the
"Option"). Subject to the provisions of Section 14, on each anniversary of the
Vesting Determination Date, the Option shall become exercisable to purchase that
number of Option Shares (rounded to the nearest whole share) equal to the total
number of Option Shares multiplied by the Annual Vesting Rate indicated below.
Grantee: Xxxxxx Xxxx
Date of Grant: January 22, 2002
Vesting Determination Date January 1, 2003
Number of shares purchasable: 102,917
Exercise Price per share: $8.41
Expiration Date: December 31, 2011
Annual Vesting Rate: 25%
The Option is not intended to qualify as an incentive stock option
under Section 422 of the Internal Revenue Code.
2. Termination of Option.
(a) Termination of Employment or Arrangement.
(i) Retirement. If Grantee shall cease to be a director and employee
of the Company or any of its affiliates, as determined by the Board (such
event shall be referred to herein as the "Termination" of Xxxxxxx's
"Employment") by reason of Xxxxxxx's retirement in
accordance with the Company's or any applicable employer's then-current
retirement policy ("Retirement"), then (A) the Option shall terminate on
the earlier of the Expiration Date or the date of such Retirement as to
the number of Option Shares for which it has not then become exercisable
and (B) the Option shall terminate as to the number of Option Shares for
which it has then become exercisable upon the earlier of the Expiration
Date or 30 days after the date of such Retirement. For greater certainty,
"Termination of Xxxxxxx's Employment" shall refer to termination of his
status as an employee. The date of Xxxxxxx's Retirement shall be the date
Grantee ceases to provide services to the Company regardless of whether
Grantee continues on the Company's payroll for some time thereafter;
provided, however, that the Board may extend said 30 day period for a
period not to exceed three months commencing from the date of Retirement
but not in any event beyond the Expiration Date.
(ii) Death or Permanent Disability. If Xxxxxxx's Employment is
Terminated by reason of the death or Permanent Disability (as hereinafter
defined) of Grantee, then (A) the Option shall terminate on the earlier of
the Expiration Date or the date of such Termination as to the number of
Option Shares for which it has not then become exercisable and (B) the
Option shall terminate as to the number of Option Shares for which it has
then become exercisable upon the earlier of the Expiration Date or the
first anniversary of the date of such Termination of Employment.
"Permanent Disability" shall mean the inability to engage in any
substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or
which has lasted or can be expected to last for a continuous period of not
less than 12 months. Grantee shall not be deemed to have a Permanent
Disability until proof of the existence thereof shall have been furnished
to the Board in such form and manner, and at such times, as the Board may
require. Any determination by the Board that Grantee does or does not have
a Permanent Disability shall be final and binding upon the Company and
Grantee.
(iii) Other Termination. If Xxxxxxx's Employment is Terminated for
no reason, or for any reason other than Retirement, death or Permanent
Disability, then (A) the Option shall terminate on the earlier of the date
of the Expiration Date or the date of such Termination as to the number of
Option Shares for which it has not then become exercisable and (B) the
Option shall terminate as to the number of Option Shares for which it has
then become exercisable upon the earlier of the Expiration Date or 30 days
after the date of such Termination of Employment, which Termination date
shall be the date Grantee ceases to provide services to the Company
regardless of whether Grantee continues on the Company's payroll for some
time thereafter.
(b) Death Following Certain Terminations of Employment. Notwithstanding
anything to the contrary in this Award, if Grantee shall die at any time after
the Termination of his or her Employment and prior to the earlier of the
Expiration Date or the date the Option would terminate as to Option Shares for
which it is then exercisable pursuant to clauses (a)(i) or (iii) above, then,
notwithstanding clauses (a)(i) or (iii) above, to the extent that the Option was
exercisable on the date of such death the Option shall terminate on the earlier
of the Expiration Date or the first anniversary of the date of such death.
(c) Other Events Causing Termination of Option. Notwithstanding anything
to the contrary in this Award, the Option shall terminate upon the consummation
of any of the following events:
(i) the dissolution or liquidation of the Company; or
(ii) a reorganization, merger or consolidation of the Company as a
result of which the outstanding securities of the class then subject to
the Option are exchanged for or converted into cash, property and/or
securities not issued by the Company unless provision is
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made in writing in connection with any such transaction for the assumption
of the Option or the substitution for the Option of a new option covering
the securities of a successor entity, or a parent or subsidiary thereof,
or of the Company, with appropriate adjustments as to the number and kind
of shares and prices; or
(iii) a sale of substantially all of the property and assets of the
Company.
3. Adjustments; Acceleration Upon a Change in Control.
(a) Adjustments. In the event that the outstanding securities of the class
then subject to the Option are increased, decreased or exchanged for or
converted into a different number or kind of shares or securities of the Company
as a result of a reorganization, merger, consolidation, recapitalization,
combination, reclassification, stock dividend, stock split, reverse stock split
or the like, then, unless such event shall cause the Option to terminate
pursuant to Section 2(c) hereof or the terms of such transaction shall provide
otherwise, the Board may make appropriate and proportionate adjustments in the
number and type of shares or other securities of the Company that may thereafter
be acquired upon the exercise of the Option; provided, however, that any such
adjustments in the Option shall be made without changing the aggregate Exercise
Price of the then unexercised portion of the Option.
(b) Acceleration Upon a Change in Control. Notwithstanding any contrary
waiting period or installment period in this Award, the Option shall become
exercisable in full for the aggregate number of Option Shares covered hereby, or
shall vest unconditionally, in the event of (i) the acquisition by any single
entity or group of at least fifty percent (50%) of the outstanding voting
securities of the Company or (ii) a sale of all or substantially all of the
assets of the Company to another person or entity other than an affiliate of the
Company, or a reorganization, merger, business combination or consolidation of
the Company as a result of which at least fifty percent (50%) of the voting
securities of the Company or its successor are held, directly or indirectly, by
persons or entities who did not hold at least fifty percent (50%) of the voting
securities of the Company immediately prior to such transaction. For purposes of
(i) above, "group" shall have the meaning set forth in Rule 13d-5 of the
Securities and Exchange Commission under the Exchange Act, and shall include as
to each person, entity or group, each "affiliate" of that person, entity or
group, as that term is defined in Rule 12b-2 of the Securities and Exchange
Commission under the Exchange Act. The terms "person," "entity" and "group" as
used in (i) above shall not include the Company or any of its subsidiaries, any
employee benefit plan of the Company or any of its subsidiaries, any entity
holding voting securities of the Company for or pursuant to the terms of any
such plan or any person, entity or group succeeding to the ownership of all or
any portion of the shares presently owned beneficially by Xxxxxx X. Xxxx who is
his lawfully appointed executor, administrator, guardian or custodian, his
spouse or any of his issue, any trust, partnership, corporation or entity in
which any of the foregoing have (individually or in the aggregate) more than
fifty percent (50%) of the beneficial interest or any charitable foundation
established by Xx. Xxxx or any of the foregoing persons or entities. Securities
will be deemed to constitute fifty percent (50%) of the voting securities of the
Company or its successor if the holders thereof collectively have the power to
elect at least fifty percent (50%) of the directors or, if the successor is not
a corporation, fifty percent (50%) of the other analogous controlling persons.
In order to permit the Grantee to receive the same consideration as a result of
such event as would the holder of the outstanding shares of Common Stock of the
Company, the Grantee will have the right to give notice of the exercise of the
Option in advance of the occurrence of the events described in (i) or (ii) above
effective upon the occurrence of such event, and any such exercise shall be
deemed effective upon the occurrence of the event and prior to any termination
of the Award as a result of the event.
4. Exercise. The Option shall be exercisable during Xxxxxxx's lifetime
only by Grantee or by his or her guardian or legal representative, and after
Xxxxxxx's death only by the person or entity entitled to do so under Xxxxxxx's
last will and testament or applicable intestate law. The Option
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may not be exercised with respect to any fractional share; cash shall be paid in
lieu of fractional shares. The Option may only be exercised by the delivery to
the Company of a written notice of such exercise, which notice shall be in a
form reasonably satisfactory to the Company and shall specify the number of
Option Shares to be purchased (the "Purchased Shares") and the aggregate
Exercise Price for such shares (the "Exercise Notice"). By delivering the
Exercise Notice, the Grantee shall be deemed to have agreed to pay or cause to
be paid, and shall so pay or cause to be paid, in full such aggregate Exercise
Price within five (5) business days of receipt by the Company of the Exercise
Notice. Such payment shall be in cash or by wire transfer or check payable to
the Company; provided, however, that payment of such aggregate Exercise Price
may instead be made, in whole or in part, by the delivery to the Company
concurrently with the Exercise Notice of a certificate or certificates
representing shares of Common Stock of the Company duly endorsed or accompanied
by duly executed stock powers, which delivery effectively transfers to the
Company good and valid title to such shares, free and clear of any pledge,
commitment, lien, claim or other encumbrance (such shares to be valued on the
basis of the aggregate Fair Market Value thereof on the date of such exercise),
provided that the Company is not then prohibited from purchasing or acquiring
such shares of capital stock of the Company by law or any judgment, decree,
order or agreement to which it is subject or by which it is bound.
As promptly as practicable following the receipt of an Exercise Notice
hereunder, the Company shall issue a stock certificate registered in the name of
the Grantee or his or her designee, representing the number of Purchased Shares
issued to the Grantee upon exercise of the Option.
5. Payment of Withholding Taxes. If the Company becomes obligated to
withhold an amount on account of any tax imposed as a result of the exercise of
the Option, including, without limitation, any federal, state, local or other
income tax, or any F.I.C.A., state disability insurance tax or other employment
tax, then, by exercising the Option Grantee shall be deemed to have agreed to
pay or cause to be paid, and shall pay or cause to be paid, such amount required
to be withheld in cash or by wire transfer or check, concurrently with paying
the cash portion of the Exercise Price. If the Grantee sells or otherwise
transfers Option Shares before the expiration of one year after the date of
exercise of the Option or two years after the date of grant of the Option, the
Grantee will notify the Company in writing of the sale or transfer and provide
to the Company information as to the price at which the Option Shares were sold
and such other information as the Company may reasonably request.
6. Notices. All notices and other communications required or permitted to
be given pursuant to this Award shall be in writing and shall be deemed given if
delivered personally or five days after mailing by certified or registered mail,
postage prepaid, return receipt requested, to the Company at 00000 Xxx Xxxxxxxx
Xxxx, Xxxxxx, XX, 00000, Attention: Corporate Secretary, or to Grantee at the
residence address of Grantee set forth in the records of the Company, or at such
other addresses as they may designate by written notice in the manner aforesaid.
7. Stock Exchange Requirements; Applicable Laws. Notwithstanding anything
to the contrary in this Award, no shares of stock purchased upon exercise of the
Option, and no certificate representing all or any part of such shares, shall be
issued or delivered if (a) such shares have not been admitted to listing upon
official notice of issuance on each stock exchange upon which shares of that
class are then listed, (b) such shares have not been listed on any automated
quotation system (including the Nasdaq National Market and the Nasdaq Small Cap
Market) on which shares of that class are quoted or (c) in the opinion of
counsel to the Company, such issuance or delivery may cause the Company to be in
violation of or to incur liability under any federal, state or other securities
law, or any requirement of any stock exchange listing agreement to which the
Company is a party, or any other requirement of law or of any administrative or
regulatory body having jurisdiction over the Company.
8. Nontransferability. Neither the Option nor any interest therein may be
sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise transferred
in any manner other than by
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will or the laws of descent and distribution. By accepting the Option, the
Grantee, for himself or herself and his or her transferees by will of the laws
of descent and distribution, acknowledges that the shares subject to the Option
have not been registered under the Securities Act of 1933 and, when issued, will
constitute "restricted securities" within the meaning of Rule 144 of the
Securities Exchange Commission under said Act. Optionee further acknowledges his
or her understanding that, as a result, such shares may not be sold by him or
her except in compliance with the registration requirements of said Act or an
exemption therefrom. The Company may, or may instruct its transfer agent to,
restrict further transfer of the shares in its records except upon receipt of
satisfactory evidence that said restrictions on transfer of the shares have been
satisfied. Upon each exercise of any portion of the Option, any certificate
evidencing the shares purchased shall bear an appropriate legend on the face
thereof evidencing such restrictions, and the Company may require the person
entitled to exercise the Option to furnish evidence satisfactory to the Company,
including a written and signed representation, to the effect that the shares are
being acquired subject to said restrictions.
10. Stockholder Rights. No person or entity shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of any shares until
the Option shall have been duly exercised to purchase such Option Shares in
accordance with the provisions of this Award.
11. Employment Rights. No provision of this Award or of the Option granted
hereunder shall (a) confer upon Grantee any right to continue in the employ of,
or in its current arrangement with, the Company or any of its affiliates, (b)
affect the right of the Company and each of its affiliates to terminate the
employment of Grantee, or such arrangement, with or without cause, or (c) confer
upon Grantee any right to participate in any employee welfare or benefit plan or
other program of the Company or any of its affiliates. GRANTEE, IF HE OR SHE IS
AN EMPLOYEE OF THE COMPANY OR ANY OF ITS AFFILIATES, HEREBY ACKNOWLEDGES AND
AGREES THAT THE COMPANY AND EACH OF ITS AFFILIATES MAY TERMINATE THE EMPLOYMENT
OF GRANTEE AT ANY TIME AND FOR ANY REASON, OR FOR NO REASON, UNLESS GRANTEE AND
THE COMPANY OR SUCH SUBSIDIARY ARE PARTIES TO A WRITTEN EMPLOYMENT AGREEMENT
THAT EXPRESSLY PROVIDES OTHERWISE.
12. Governing Law. This Award and the Option granted hereunder shall be
governed by and construed and enforced in accordance with the substantive laws
of the State of California (excluding the provisions of such law relating to
choice of law).
13. Fair Market Value. The "Fair Market Value" of a share of Common Stock
or of a share of another class of capital stock of the Company on any day shall
be equal to the last sale price, regular way, of such a share on the business
day preceding such day or, in case no such sale takes place on such day and
there were sales within a reasonable period before the date for which the Fair
Market Value is to be determined, the mean between the lowest and highest sale
prices, regular way, on the nearest date before the date as of which the Fair
Market Value is to be determined, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the principal national securities exchange on which such
shares are listed or admitted to trading or, if the shares trade in the Nasdaq
National Market, then in that Market, or, if such shares are not listed or
admitted to trading on any national securities exchange or the Nasdaq National
Market, the last quoted price, or if not so quoted, the average of the high bid
and low asked prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotations System or such
other system then in use. If none of the foregoing provisions for determining
Fair Market Value are applicable, the Fair Market Value will be determined by
the Board taking into account the prices at which the shares of other comparable
companies, if any, are being traded (subject to appropriate adjustment for the
dissimilarities between the companies being compared), the earnings history,
book value and prospects of the Company and other factors deemed relevant by the
Board.
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IN WITNESS WHEREOF, the Company has duly executed this Award as of the
Date of Xxxxx.
MANNKIND CORPORATION
By: /s/ XXXXXX XXXXXXXX
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Name: Xxxxxx Xxxxxxxx
Title: Director
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MANNKIND CORPORATION
STOCK OPTION AWARD
This Stock Option Award ("Award") is made as of the Date of Grant
indicated below by MannKind Corporation, a Delaware corporation (the "Company"),
for the benefit of the person named below as Grantee.
WHEREAS, Xxxxxxx is a director and an employee of the Company; and
WHEREAS the Board of Directors of the Company (the "Board") has approved
the grant to Grantee of an option to purchase shares of the Common Stock, par
value $.01 per share, of the Company (the "Common Stock"), on the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing recitals and the
covenants set forth herein, the Company hereby agrees, and by accepting this
Award the Grantee agrees, as follows:
1. Grant of Option; Certain Terms and Conditions. The Company hereby
grants to Grantee, as of the Date of Grant indicated below, an option to
purchase all or any portion of the number of shares of Common Stock indicated
below (the "Option Shares") as to which the Option has become exercisable at the
Exercise Price per share indicated below, which option shall expire at 5:00
o'clock p.m., Los Angeles time, on the Expiration Date indicated below and shall
be subject to all of the terms and conditions set forth in this Award (the
"Option"). Subject to the provisions of Section 14, on each anniversary of the
Vesting Determination Date, the Option shall become exercisable to purchase that
number of Option Shares (rounded to the nearest whole share) equal to the total
number of Option Shares multiplied by the Annual Vesting Rate indicated below.
Grantee: Xxxxxx Xxxx
Date of Grant: January 22, 2002
Vesting Determination Date January 1, 2003
Number of shares purchasable: 400,000
Exercise Price per share: $8.41
Expiration Date: December 31, 2011
Annual Vesting Rate: 25%
The Option is not intended to qualify as an incentive stock option under
Section 422 of the Internal Revenue Code.
2. Termination of Option.
(a) Termination of Employment or Arrangement.
(i) Retirement. If Grantee shall cease to be a director and employee
of the Company or any of its affiliates, as determined by the Board (such
event shall be referred to herein as the "Termination" of Xxxxxxx's
"Employment") by reason of Xxxxxxx's retirement in
accordance with the Company's or any applicable employer's then-current
retirement policy ("Retirement"), then (A) the Option shall terminate on
the earlier of the Expiration Date or the date of such Retirement as to
the number of Option Shares for which it has not then become exercisable
and (B) the Option shall terminate as to the number of Option Shares for
which it has then become exercisable upon the earlier of the Expiration
Date or 30 days after the date of such Retirement. For greater certainty,
"Termination of Xxxxxxx's Employment" shall refer to termination of his
status as an employee. The date of Xxxxxxx's Retirement shall be the date
Grantee ceases to provide services to the Company regardless of whether
Grantee continues on the Company's payroll for some time thereafter;
provided, however, that the Board may extend said 30 day period for a
period not to exceed three months commencing from the date of Retirement
but not in any event beyond the Expiration Date.
(ii) Death or Permanent Disability. If Xxxxxxx's Employment is
Terminated by reason of the death or Permanent Disability (as hereinafter
defined) of Grantee, then (A) the Option shall terminate on the earlier of
the Expiration Date or the date of such Termination as to the number of
Option Shares for which it has not then become exercisable and (B) the
Option shall terminate as to the number of Option Shares for which it has
then become exercisable upon the earlier of the Expiration Date or the
first anniversary of the date of such Termination of Employment.
"Permanent Disability" shall mean the inability to engage in any
substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or
which has lasted or can be expected to last for a continuous period of not
less than 12 months. Grantee shall not be deemed to have a Permanent
Disability until proof of the existence thereof shall have been furnished
to the Board in such form and manner, and at such times, as the Board may
require. Any determination by the Board that Grantee does or does not have
a Permanent Disability shall be final and binding upon the Company and
Grantee.
(iii) Other Termination. If Xxxxxxx's Employment is Terminated for
no reason, or for any reason other than Retirement, death or Permanent
Disability, then (A) the Option shall terminate on the earlier of the date
of the Expiration Date or the date of such Termination as to the number of
Option Shares for which it has not then become exercisable and (B) the
Option shall terminate as to the number of Option Shares for which it has
then become exercisable upon the earlier of the Expiration Date or 30 days
after the date of such Termination of Employment, which Termination date
shall be the date Grantee ceases to provide services to the Company
regardless of whether Grantee continues on the Company's payroll for some
time thereafter.
(b) Death Following Certain Terminations of Employment. Notwithstanding
anything to the contrary in this Award, if Grantee shall die at any time after
the Termination of his or her Employment and prior to the earlier of the
Expiration Date or the date the Option would terminate as to Option Shares for
which it is then exercisable pursuant to clauses (a)(i) or (iii) above, then,
notwithstanding clauses (a)(i) or (iii) above, to the extent that the Option was
exercisable on the date of such death the Option shall terminate on the earlier
of the Expiration Date or the first anniversary of the date of such death.
(c) Other Events Causing Termination of Option. Notwithstanding anything
to the contrary in this Award, the Option shall terminate upon the consummation
of any of the following events:
(i) the dissolution or liquidation of the Company; or
(ii) a reorganization, merger or consolidation of the Company as a
result of which the outstanding securities of the class then subject to
the Option are exchanged for or converted into cash, property and/or
securities not issued by the Company unless provision is
2
made in writing in connection with any such transaction for the assumption
of the Option or the substitution for the Option of a new option covering
the securities of a successor entity, or a parent or subsidiary thereof,
or of the Company, with appropriate adjustments as to the number and kind
of shares and prices; or
(iii) a sale of substantially all of the property and assets of the
Company.
3. Adjustments; Acceleration Upon a Change in Control.
(a) Adjustments. In the event that the outstanding securities of the class
then subject to the Option are increased, decreased or exchanged for or
converted into a different number or kind of shares or securities of the Company
as a result of a reorganization, merger, consolidation, recapitalization,
combination, reclassification, stock dividend, stock split, reverse stock split
or the like, then, unless such event shall cause the Option to terminate
pursuant to Section 2(c) hereof or the terms of such transaction shall provide
otherwise, the Board may make appropriate and proportionate adjustments in the
number and type of shares or other securities of the Company that may thereafter
be acquired upon the exercise of the Option; provided, however, that any such
adjustments in the Option shall be made without changing the aggregate Exercise
Price of the then unexercised portion of the Option.
(b) Acceleration Upon a Change in Control. Notwithstanding any contrary
waiting period or installment period in this Award, the Option shall become
exercisable in full for the aggregate number of Option Shares covered hereby, or
shall vest unconditionally, in the event of (i) the acquisition by any single
entity or group of at least fifty percent (50%) of the outstanding voting
securities of the Company or (ii) a sale of all or substantially all of the
assets of the Company to another person or entity other than an affiliate of the
Company, or a reorganization, merger, business combination or consolidation of
the Company as a result of which at least fifty percent (50%) of the voting
securities of the Company or its successor are held, directly or indirectly, by
persons or entities who did not hold at least fifty percent (50%) of the voting
securities of the Company immediately prior to such transaction. For purposes of
(i) above, "group" shall have the meaning set forth in Rule 13d-5 of the
Securities and Exchange Commission under the Exchange Act, and shall include as
to each person, entity or group, each "affiliate" of that person, entity or
group, as that term is defined in Rule 12b-2 of the Securities and Exchange
Commission under the Exchange Act. The terms "person," "entity" and "group" as
used in (i) above shall not include the Company or any of its subsidiaries, any
employee benefit plan of the Company or any of its subsidiaries, any entity
holding voting securities of the Company for or pursuant to the terms of any
such plan or any person, entity or group succeeding to the ownership of all or
any portion of the shares presently owned beneficially by Xxxxxx X. Xxxx who is
his lawfully appointed executor, administrator, guardian or custodian, his
spouse or any of his issue, any trust, partnership, corporation or entity in
which any of the foregoing have (individually or in the aggregate) more than
fifty percent (50%) of the beneficial interest or any charitable foundation
established by Xx. Xxxx or any of the foregoing persons or entities. Securities
will be deemed to constitute fifty percent (50%) of the voting securities of the
Company or its successor if the holders thereof collectively have the power to
elect at least fifty percent (50%) of the directors or, if the successor is not
a corporation, fifty percent (50%) of the other analogous controlling persons.
In order to permit the Grantee to receive the same consideration as a result of
such event as would the holder of the outstanding shares of Common Stock of the
Company, the Grantee will have the right to give notice of the exercise of the
Option in advance of the occurrence of the events described in (i) or (ii) above
effective upon the occurrence of such event, and any such exercise shall be
deemed effective upon the occurrence of the event and prior to any termination
of the Award as a result of the event.
4. Exercise. The Option shall be exercisable during Xxxxxxx's lifetime
only by Grantee or by his or her guardian or legal representative, and after
Xxxxxxx's death only by the person or entity entitled to do so under Xxxxxxx's
last will and testament or applicable intestate law. The Option
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may not be exercised with respect to any fractional share; cash shall be paid in
lieu of fractional shares. The Option may only be exercised by the delivery to
the Company of a written notice of such exercise, which notice shall be in a
form reasonably satisfactory to the Company and shall specify the number of
Option Shares to be purchased (the "Purchased Shares") and the aggregate
Exercise Price for such shares (the "Exercise Notice"). By delivering the
Exercise Notice, the Grantee shall be deemed to have agreed to pay or cause to
be paid, and shall so pay or cause to be paid, in full such aggregate Exercise
Price within five (5) business days of receipt by the Company of the Exercise
Notice. Such payment shall be in cash or by wire transfer or check payable to
the Company; provided, however, that payment of such aggregate Exercise Price
may instead be made, in whole or in part, by the delivery to the Company
concurrently with the Exercise Notice of a certificate or certificates
representing shares of Common Stock of the Company duly endorsed or accompanied
by duly executed stock powers, which delivery effectively transfers to the
Company good and valid title to such shares, free and clear of any pledge,
commitment, lien, claim or other encumbrance (such shares to be valued on the
basis of the aggregate Fair Market Value thereof on the date of such exercise),
provided that the Company is not then prohibited from purchasing or acquiring
such shares of capital stock of the Company by law or any judgment, decree,
order or agreement to which it is subject or by which it is bound.
As promptly as practicable following the receipt of an Exercise Notice
hereunder, the Company shall issue a stock certificate registered in the name of
the Grantee or his or her designee, representing the number of Purchased Shares
issued to the Grantee upon exercise of the Option.
5. Payment of Withholding Taxes. If the Company becomes obligated to
withhold an amount on account of any tax imposed as a result of the exercise of
the Option, including, without limitation, any federal, state, local or other
income tax, or any F.I.C.A., state disability insurance tax or other employment
tax, then, by exercising the Option Grantee shall be deemed to have agreed to
pay or cause to be paid, and shall pay or cause to be paid, such amount required
to be withheld in cash or by wire transfer or check, concurrently with paying
the cash portion of the Exercise Price. If the Grantee sells or otherwise
transfers Option Shares before the expiration of one year after the date of
exercise of the Option or two years after the date of grant of the Option, the
Grantee will notify the Company in writing of the sale or transfer and provide
to the Company information as to the price at which the Option Shares were sold
and such other information as the Company may reasonably request.
6. Notices. All notices and other communications required or permitted to
be given pursuant to this Award shall be in writing and shall be deemed given if
delivered personally or five days after mailing by certified or registered mail,
postage prepaid, return receipt requested, to the Company at 00000 Xxx Xxxxxxxx
Xxxx, Xxxxxx, XX, 00000, Attention: Corporate Secretary, or to Grantee at the
residence address of Grantee set forth in the records of the Company, or at such
other addresses as they may designate by written notice in the manner aforesaid.
7. Stock Exchange Requirements; Applicable Laws. Notwithstanding anything
to the contrary in this Award, no shares of stock purchased upon exercise of the
Option, and no certificate representing all or any part of such shares, shall be
issued or delivered if (a) such shares have not been admitted to listing upon
official notice of issuance on each stock exchange upon which shares of that
class are then listed, (b) such shares have not been listed on any automated
quotation system (including the Nasdaq National Market and the Nasdaq Small Cap
Market) on which shares of that class are quoted or (c) in the opinion of
counsel to the Company, such issuance or delivery may cause the Company to be in
violation of or to incur liability under any federal, state or other securities
law, or any requirement of any stock exchange listing agreement to which the
Company is a party, or any other requirement of law or of any administrative or
regulatory body having jurisdiction over the Company.
8. Nontransferability. Neither the Option nor any interest therein may be
sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise transferred
in any manner other than by
4
will or the laws of descent and distribution. By accepting the Option, the
Grantee, for himself or herself and his or her transferees by will of the laws
of descent and distribution, acknowledges that the shares subject to the Option
have not been registered under the Securities Act of 1933 and, when issued, will
constitute "restricted securities" within the meaning of Rule 144 of the
Securities Exchange Commission under said Act. Optionee further acknowledges his
or her understanding that, as a result, such shares may not be sold by him or
her except in compliance with the registration requirements of said Act or an
exemption therefrom. The Company may, or may instruct its transfer agent to,
restrict further transfer of the shares in its records except upon receipt of
satisfactory evidence that said restrictions on transfer of the shares have been
satisfied. Upon each exercise of any portion of the Option, any certificate
evidencing the shares purchased shall bear an appropriate legend on the face
thereof evidencing such restrictions, and the Company may require the person
entitled to exercise the Option to furnish evidence satisfactory to the Company,
including a written and signed representation, to the effect that the shares are
being acquired subject to said restrictions.
10. Stockholder Rights. No person or entity shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of any shares until
the Option shall have been duly exercised to purchase such Option Shares in
accordance with the provisions of this Award.
11. Employment Rights. No provision of this Award or of the Option granted
hereunder shall (a) confer upon Grantee any right to continue in the employ of,
or in its current arrangement with, the Company or any of its affiliates, (b)
affect the right of the Company and each of its affiliates to terminate the
employment of Grantee, or such arrangement, with or without cause, or (c) confer
upon Grantee any right to participate in any employee welfare or benefit plan or
other program of the Company or any of its affiliates. GRANTEE, IF HE OR SHE IS
AN EMPLOYEE OF THE COMPANY OR ANY OF ITS AFFILIATES, HEREBY ACKNOWLEDGES AND
AGREES THAT THE COMPANY AND EACH OF ITS AFFILIATES MAY TERMINATE THE EMPLOYMENT
OF GRANTEE AT ANY TIME AND FOR ANY REASON, OR FOR NO REASON, UNLESS GRANTEE AND
THE COMPANY OR SUCH SUBSIDIARY ARE PARTIES TO A WRITTEN EMPLOYMENT AGREEMENT
THAT EXPRESSLY PROVIDES OTHERWISE.
12. Governing Law. This Award and the Option granted hereunder shall be
governed by and construed and enforced in accordance with the substantive laws
of the State of California (excluding the provisions of such law relating to
choice of law).
13. Fair Market Value. The "Fair Market Value" of a share of Common Stock
or of a share of another class of capital stock of the Company on any day shall
be equal to the last sale price, regular way, of such a share on the business
day preceding such day or, in case no such sale takes place on such day and
there were sales within a reasonable period before the date for which the Fair
Market Value is to be determined, the mean between the lowest and highest sale
prices, regular way, on the nearest date before the date as of which the Fair
Market Value is to be determined, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the principal national securities exchange on which such
shares are listed or admitted to trading or, if the shares trade in the Nasdaq
National Market, then in that Market, or, if such shares are not listed or
admitted to trading on any national securities exchange or the Nasdaq National
Market, the last quoted price, or if not so quoted, the average of the high bid
and low asked prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotations System or such
other system then in use. If none of the foregoing provisions for determining
Fair Market Value are applicable, the Fair Market Value will be determined by
the Board taking into account the prices at which the shares of other comparable
companies, if any, are being traded (subject to appropriate adjustment for the
dissimilarities between the companies being compared), the earnings history,
book value and prospects of the Company and other factors deemed relevant by the
Board.
5
IN WITNESS WHEREOF, the Company has duly executed this Award as of the
Date of Xxxxx.
MANNKIND CORPORATION
By: /s/ XXXXXX XXXXXXXX
----------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Director
6
MANNKIND CORPORATION
STOCK OPTION AWARD
This Stock Option Award ("Award") is made as of the Date of Grant
indicated below by MannKind Corporation, a Delaware corporation (the "Company"),
for the benefit of the person named below as Grantee.
WHEREAS, Xxxxxxx is a director and an employee of the Company; and
WHEREAS the Board of Directors of the Company (the "Board") has approved
the grant to Grantee of an option to purchase shares of the Common Stock, par
value $.01 per share, of the Company (the "Common Stock"), on the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing recitals and the
covenants set forth herein, the Company hereby agrees, and by accepting this
Award the Grantee agrees, as follows:
1. Grant of Option; Certain Terms and Conditions. The Company hereby
grants to Grantee, as of the Date of Grant indicated below, an option to
purchase all or any portion of the number of shares of Common Stock indicated
below (the "Option Shares") as to which the Option has become exercisable at the
Exercise Price per share indicated below, which option shall expire at 5:00
o'clock p.m., Los Angeles time, on the Expiration Date indicated below and shall
be subject to all of the terms and conditions set forth in this Award (the
"Option"). Subject to the provisions of Section 14, on each anniversary of the
Vesting Determination Date, the Option shall become exercisable to purchase that
number of Option Shares (rounded to the nearest whole share) equal to the total
number of Option Shares multiplied by the Annual Vesting Rate indicated below.
Grantee: Xxxxxx Xxxx
Date of Xxxxx: April 30, 2002
Vesting Determination Date April 30, 2003
Number of shares purchasable: 220,000
Exercise Price per share: $8.41
Expiration Date: April 30, 2012
Annual Vesting Rate: 25%
The Option is not intended to qualify as an incentive stock option under
Section 422 of the Internal Revenue Code.
2. Termination of Option.
(a) Termination of Employment or Arrangement.
(i) Retirement. If Grantee shall cease to be a director and employee
of the Company or any of its affiliates, as determined by the Board (such
event shall be referred to herein as the "Termination" of Xxxxxxx's
"Employment") by reason of Xxxxxxx's retirement in
accordance with the Company's or any applicable employer's then-current
retirement policy ("Retirement"), then (A) the Option shall terminate on
the earlier of the Expiration Date or the date of such Retirement as to
the number of Option Shares for which it has not then become exercisable
and (B) the Option shall terminate as to the number of Option Shares for
which it has then become exercisable upon the earlier of the Expiration
Date or 30 days after the date of such Retirement. For greater certainty,
"Termination of Xxxxxxx's Employment" shall refer to termination of his
status as an employee. The date of Xxxxxxx's Retirement shall be the date
Grantee ceases to provide services to the Company regardless of whether
Grantee continues on the Company's payroll for some time thereafter;
provided, however, that the Board may extend said 30 day period for a
period not to exceed three months commencing from the date of Retirement
but not in any event beyond the Expiration Date.
(ii) Death or Permanent Disability. If Xxxxxxx's Employment is
Terminated by reason of the death or Permanent Disability (as hereinafter
defined) of Grantee, then (A) the Option shall terminate on the earlier of
the Expiration Date or the date of such Termination as to the number of
Option Shares for which it has not then become exercisable and (B) the
Option shall terminate as to the number of Option Shares for which it has
then become exercisable upon the earlier of the Expiration Date or the
first anniversary of the date of such Termination of Employment.
"Permanent Disability" shall mean the inability to engage in any
substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or
which has lasted or can be expected to last for a continuous period of not
less than 12 months. Grantee shall not be deemed to have a Permanent
Disability until proof of the existence thereof shall have been furnished
to the Board in such form and manner, and at such times, as the Board may
require. Any determination by the Board that Grantee does or does not have
a Permanent Disability shall be final and binding upon the Company and
Grantee.
(iii) Other Termination. If Xxxxxxx's Employment is Terminated for
no reason, or for any reason other than Retirement, death or Permanent
Disability, then (A) the Option shall terminate on the earlier of the date
of the Expiration Date or the date of such Termination as to the number of
Option Shares for which it has not then become exercisable and (B) the
Option shall terminate as to the number of Option Shares for which it has
then become exercisable upon the earlier of the Expiration Date or 30 days
after the date of such Termination of Employment, which Termination date
shall be the date Grantee ceases to provide services to the Company
regardless of whether Grantee continues on the Company's payroll for some
time thereafter.
(b) Death Following Certain Terminations of Employment. Notwithstanding
anything to the contrary in this Award, if Grantee shall die at any time after
the Termination of his or her Employment and prior to the earlier of the
Expiration Date or the date the Option would terminate as to Option Shares for
which it is then exercisable pursuant to clauses (a)(i) or (iii) above, then,
notwithstanding clauses (a)(i) or (iii) above, to the extent that the Option was
exercisable on the date of such death the Option shall terminate on the earlier
of the Expiration Date or the first anniversary of the date of such death.
(c) Other Events Causing Termination of Option. Notwithstanding anything
to the contrary in this Award, the Option shall terminate upon the consummation
of any of the following events:
(i) the dissolution or liquidation of the Company; or
(ii) a reorganization, merger or consolidation of the Company as a
result of which the outstanding securities of the class then subject to
the Option are exchanged for or converted into cash, property and/or
securities not issued by the Company unless provision is
2
made in writing in connection with any such transaction for the assumption
of the Option or the substitution for the Option of a new option covering
the securities of a successor entity, or a parent or subsidiary thereof,
or of the Company, with appropriate adjustments as to the number and kind
of shares and prices; or
(iii) a sale of substantially all of the property and assets of the
Company.
3. Adjustments; Acceleration Upon a Change in Control.
(a) Adjustments. In the event that the outstanding securities of the class
then subject to the Option are increased, decreased or exchanged for or
converted into a different number or kind of shares or securities of the Company
as a result of a reorganization, merger, consolidation, recapitalization,
combination, reclassification, stock dividend, stock split, reverse stock split
or the like, then, unless such event shall cause the Option to terminate
pursuant to Section 2(c) hereof or the terms of such transaction shall provide
otherwise, the Board may make appropriate and proportionate adjustments in the
number and type of shares or other securities of the Company that may thereafter
be acquired upon the exercise of the Option; provided, however, that any such
adjustments in the Option shall be made without changing the aggregate Exercise
Price of the then unexercised portion of the Option.
(b) Acceleration Upon a Change in Control. Notwithstanding any contrary
waiting period or installment period in this Award, the Option shall become
exercisable in full for the aggregate number of Option Shares covered hereby, or
shall vest unconditionally, in the event of (i) the acquisition by any single
entity or group of at least fifty percent (50%) of the outstanding voting
securities of the Company or (ii) a sale of all or substantially all of the
assets of the Company to another person or entity other than an affiliate of the
Company, or a reorganization, merger, business combination or consolidation of
the Company as a result of which at least fifty percent (50%) of the voting
securities of the Company or its successor are held, directly or indirectly, by
persons or entities who did not hold at least fifty percent (50%) of the voting
securities of the Company immediately prior to such transaction. For purposes of
(i) above, "group" shall have the meaning set forth in Rule 13d-5 of the
Securities and Exchange Commission under the Exchange Act, and shall include as
to each person, entity or group, each "affiliate" of that person, entity or
group, as that term is defined in Rule 12b-2 of the Securities and Exchange
Commission under the Exchange Act. The terms "person," "entity" and "group" as
used in (i) above shall not include the Company or any of its subsidiaries, any
employee benefit plan of the Company or any of its subsidiaries, any entity
holding voting securities of the Company for or pursuant to the terms of any
such plan or any person, entity or group succeeding to the ownership of all or
any portion of the shares presently owned beneficially by Xxxxxx X. Xxxx who is
his lawfully appointed executor, administrator, guardian or custodian, his
spouse or any of his issue, any trust, partnership, corporation or entity in
which any of the foregoing have (individually or in the aggregate) more than
fifty percent (50%) of the beneficial interest or any charitable foundation
established by Xx. Xxxx or any of the foregoing persons or entities. Securities
will be deemed to constitute fifty percent (50%) of the voting securities of the
Company or its successor if the holders thereof collectively have the power to
elect at least fifty percent (50%) of the directors or, if the successor is not
a corporation, fifty percent (50%) of the other analogous controlling persons.
In order to permit the Grantee to receive the same consideration as a result of
such event as would the holder of the outstanding shares of Common Stock of the
Company, the Grantee will have the right to give notice of the exercise of the
Option in advance of the occurrence of the events described in (i) or (ii) above
effective upon the occurrence of such event, and any such exercise shall be
deemed effective upon the occurrence of the event and prior to any termination
of the Award as a result of the event.
4. Exercise. The Option shall be exercisable during Xxxxxxx's lifetime
only by Grantee or by his or her guardian or legal representative, and after
Xxxxxxx's death only by the person or entity entitled to do so under Xxxxxxx's
last will and testament or applicable intestate law. The Option
3
may not be exercised with respect to any fractional share; cash shall be paid in
lieu of fractional shares. The Option may only be exercised by the delivery to
the Company of a written notice of such exercise, which notice shall be in a
form reasonably satisfactory to the Company and shall specify the number of
Option Shares to be purchased (the "Purchased Shares") and the aggregate
Exercise Price for such shares (the "Exercise Notice"). By delivering the
Exercise Notice, the Grantee shall be deemed to have agreed to pay or cause to
be paid, and shall so pay or cause to be paid, in full such aggregate Exercise
Price within five (5) business days of receipt by the Company of the Exercise
Notice. Such payment shall be in cash or by wire transfer or check payable to
the Company; provided, however, that payment of such aggregate Exercise Price
may instead be made, in whole or in part, by the delivery to the Company
concurrently with the Exercise Notice of a certificate or certificates
representing shares of Common Stock of the Company duly endorsed or accompanied
by duly executed stock powers, which delivery effectively transfers to the
Company good and valid title to such shares, free and clear of any pledge,
commitment, lien, claim or other encumbrance (such shares to be valued on the
basis of the aggregate Fair Market Value thereof on the date of such exercise),
provided that the Company is not then prohibited from purchasing or acquiring
such shares of capital stock of the Company by law or any judgment, decree,
order or agreement to which it is subject or by which it is bound.
As promptly as practicable following the receipt of an Exercise Notice
hereunder, the Company shall issue a stock certificate registered in the name of
the Grantee or his or her designee, representing the number of Purchased Shares
issued to the Grantee upon exercise of the Option.
5. Payment of Withholding Taxes. If the Company becomes obligated to
withhold an amount on account of any tax imposed as a result of the exercise of
the Option, including, without limitation, any federal, state, local or other
income tax, or any F.I.C.A., state disability insurance tax or other employment
tax, then, by exercising the Option Grantee shall be deemed to have agreed to
pay or cause to be paid, and shall pay or cause to be paid, such amount required
to be withheld in cash or by wire transfer or check, concurrently with paying
the cash portion of the Exercise Price. If the Grantee sells or otherwise
transfers Option Shares before the expiration of one year after the date of
exercise of the Option or two years after the date of grant of the Option, the
Grantee will notify the Company in writing of the sale or transfer and provide
to the Company information as to the price at which the Option Shares were sold
and such other information as the Company may reasonably request.
6. Notices. All notices and other communications required or permitted to
be given pursuant to this Award shall be in writing and shall be deemed given if
delivered personally or five days after mailing by certified or registered mail,
postage prepaid, return receipt requested, to the Company at 00000 Xxx Xxxxxxxx
Xxxx, Xxxxxx, XX, 00000, Attention: Corporate Secretary, or to Grantee at the
residence address of Grantee set forth in the records of the Company, or at such
other addresses as they may designate by written notice in the manner aforesaid.
7. Stock Exchange Requirements; Applicable Laws. Notwithstanding anything
to the contrary in this Award, no shares of stock purchased upon exercise of the
Option, and no certificate representing all or any part of such shares, shall be
issued or delivered if (a) such shares have not been admitted to listing upon
official notice of issuance on each stock exchange upon which shares of that
class are then listed, (b) such shares have not been listed on any automated
quotation system (including the Nasdaq National Market and the Nasdaq Small Cap
Market) on which shares of that class are quoted or (c) in the opinion of
counsel to the Company, such issuance or delivery may cause the Company to be in
violation of or to incur liability under any federal, state or other securities
law, or any requirement of any stock exchange listing agreement to which the
Company is a party, or any other requirement of law or of any administrative or
regulatory body having jurisdiction over the Company.
8. Nontransferability. Neither the Option nor any interest therein may be
sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise transferred
in any manner other than by
4
will or the laws of descent and distribution. By accepting the Option, the
Grantee, for himself or herself and his or her transferees by will of the laws
of descent and distribution, acknowledges that the shares subject to the Option
have not been registered under the Securities Act of 1933 and, when issued, will
constitute "restricted securities" within the meaning of Rule 144 of the
Securities Exchange Commission under said Act. Optionee further acknowledges his
or her understanding that, as a result, such shares may not be sold by him or
her except in compliance with the registration requirements of said Act or an
exemption therefrom. The Company may, or may instruct its transfer agent to,
restrict further transfer of the shares in its records except upon receipt of
satisfactory evidence that said restrictions on transfer of the shares have been
satisfied. Upon each exercise of any portion of the Option, any certificate
evidencing the shares purchased shall bear an appropriate legend on the face
thereof evidencing such restrictions, and the Company may require the person
entitled to exercise the Option to furnish evidence satisfactory to the Company,
including a written and signed representation, to the effect that the shares are
being acquired subject to said restrictions.
10. Stockholder Rights. No person or entity shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of any shares until
the Option shall have been duly exercised to purchase such Option Shares in
accordance with the provisions of this Award.
11. Employment Rights. No provision of this Award or of the Option granted
hereunder shall (a) confer upon Grantee any right to continue in the employ of,
or in its current arrangement with, the Company or any of its affiliates, (b)
affect the right of the Company and each of its affiliates to terminate the
employment of Grantee, or such arrangement, with or without cause, or (c) confer
upon Grantee any right to participate in any employee welfare or benefit plan or
other program of the Company or any of its affiliates. GRANTEE, IF HE OR SHE IS
AN EMPLOYEE OF THE COMPANY OR ANY OF ITS AFFILIATES, HEREBY ACKNOWLEDGES AND
AGREES THAT THE COMPANY AND EACH OF ITS AFFILIATES MAY TERMINATE THE EMPLOYMENT
OF GRANTEE AT ANY TIME AND FOR ANY REASON, OR FOR NO REASON, UNLESS GRANTEE AND
THE COMPANY OR SUCH SUBSIDIARY ARE PARTIES TO A WRITTEN EMPLOYMENT AGREEMENT
THAT EXPRESSLY PROVIDES OTHERWISE.
12. Governing Law. This Award and the Option granted hereunder shall be
governed by and construed and enforced in accordance with the substantive laws
of the State of California (excluding the provisions of such law relating to
choice of law).
13. Fair Market Value. The "Fair Market Value" of a share of Common Stock
or of a share of another class of capital stock of the Company on any day shall
be equal to the last sale price, regular way, of such a share on the business
day preceding such day or, in case no such sale takes place on such day and
there were sales within a reasonable period before the date for which the Fair
Market Value is to be determined, the mean between the lowest and highest sale
prices, regular way, on the nearest date before the date as of which the Fair
Market Value is to be determined, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the principal national securities exchange on which such
shares are listed or admitted to trading or, if the shares trade in the Nasdaq
National Market, then in that Market, or, if such shares are not listed or
admitted to trading on any national securities exchange or the Nasdaq National
Market, the last quoted price, or if not so quoted, the average of the high bid
and low asked prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotations System or such
other system then in use. If none of the foregoing provisions for determining
Fair Market Value are applicable, the Fair Market Value will be determined by
the Board taking into account the prices at which the shares of other comparable
companies, if any, are being traded (subject to appropriate adjustment for the
dissimilarities between the companies being compared), the earnings history,
book value and prospects of the Company and other factors deemed relevant by the
Board.
5
IN WITNESS WHEREOF, the Company has duly executed this Award as of the
Date of Xxxxx.
MANNKIND CORPORATION
By: /s/ XXXXXX XXXXXXXX
----------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Director
6
MANNKIND CORPORATION
STOCK OPTION GRANT NOTICE
2004 EQUITY INCENTIVE PLAN
MannKind Corporation (the "COMPANY"),pursuant to its 2004 Equity Incentive Plan
(the "PLAN"), hereby grants to Optionholder an option to purchase the number of
shares of the Company's Common Stock set forth below. This option is subject to
all of the terms and conditions as set forth herein and in the Stock Option
Agreement, the Plan and the Notice of Exercise, all of which are attached hereto
or previously delivered to Optionholder and incorporated herein in their
entirety.
Optionholder: Xxxxxx Xxxx
------------------------
Date of Grant: January 31, 2005
------------------------
Vesting Commencement Date: January 31, 2006
------------------------
Number of Shares Subject to Option: 100,000
------------------------
Exercise Price (Per Share): $13.39
------------------------
Total Exercise Price: $1,339,000.00
------------------------
Expiration Date: January 31, 2015
------------------------
TYPE OF GRANT: Nonstatutory Stock Option
EXERCISE SCHEDULE: Same as Vesting Schedule
VESTING SCHEDULE: 25% of the shares vest on the Vesting Commencement Date and
each yearly anniversary thereof.
PAYMENT: By one or a combination of the following items (described
in the Stock Option Agreement):
- By cash or check
- Pursuant to a Regulation T Program if the Shares are
publicly traded
- By delivery of already-owned shares if the Shares are
publicly traded
ADDITIONAL TERMS/ACKNOWLEDGEMENTS: The undersigned Optionholder acknowledges
receipt of, and understands and agrees to, this Stock Option Grant Notice, the
Stock Option Agreement and the Plan. Optionholder further acknowledges that as
of the Date of Grant, this Stock Option Grant Notice, the Stock Option Agreement
and the Plan set forth the entire understanding between Optionholder and the
Company regarding the acquisition of stock in the Company and supersede all
prior oral and written agreements on that subject with the exception of (i)
options previously granted and delivered to Optionholder under the Plan and
options previously granted and delivered to Optionholders under other equity
incentive plans adopted or assumed by the Company.
MANNKIND CORPORATION OPTIONHOLDER
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxxxx X. Xxxx
------------------------------- -------------------------------
Signature Signature
Title: Vice President Date:
------------- ------------------------------
Date: February 1, 2005
ATTACHMENTS: Stock Option Agreement and Notice of Exercise
