Biomune Systems, Inc.
Incentive Stock Option Grant and Agreement
Pursuant to the terms and conditions of Biomune Systems, Inc. 1999 Stock Option
and Incentive Plan (the "Plan"), Biomune Systems, Inc. (the "Company"), hereby
grants to the Participant an Option to purchase shares of the Company's common
stock on the following terms and conditions:
1. Identifying Provisions. As used in this Option, the
following terms shall have the
following respective meanings:
a. Participant is .
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b. Date of Xxxxx is .
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c. Number of Covered Shares is .
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d. Exercise Price Per Share is .
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2. Award. This Agreement specifies the terms of the option
("Option") granted to the Participant to purchase the number
of Covered Shares of Stock at the Exercise Price set forth
above in Paragraph 1. The Option is intended to constitute an
"incentive stock option" ("ISO") as that term is used in Code
section 422. To the extent that the aggregate Fair Market
Value (determined at the time of grant) of shares with respect
to which ISOs are exercisable for the first time by the
Participant during any calendar year under all plans of the
Company and its Affiliates exceeds $100,000, the options or
portions thereof which exceed such limit (according to the
order in which they were granted) shall be treated as
non-statutory stock options. It should be understood that
there is no assurance that the Option will in fact be treated
as an ISO.
3. Date of Exercise. Except as limited by this Agreement or by
the Plan, this Option shall become exercisable pursuant to the
vesting schedule set forth below until and including the
Expiration Date of this Option, whereupon the Option shall
expire and may thereafter no longer be exercised. Vesting
shall be immediate.
An installment shall not become exercisable on the otherwise
applicable vesting date if the Participant's Date of
Termination (as defined in Paragraph 9, below) occurs on or
before such vesting date. Notwithstanding the foregoing
provisions of this Paragraph 3, the Option shall become
exercisable with respect to all of the Covered Shares (to the
extent it is not then otherwise exercisable) as follows:
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a. The Option shall become fully exercisable upon the
Participant's Date of Termination, if the Date of
Termination occurs by reason of the Participant's death or
Disability.
b. The Option shall become fully exercisable upon a Change
in Control.
c. The Option may be exercised on or after the Date of
Termination only as to that portion of the Covered Shares
as to which it was exercisable immediately prior to the
Date of Termination, or as to which it became exercisable
on the Date of Termination in accordance with this
Paragraph 3.
4. Expiration. The Option shall not be exercisable after
the Company's close of business on the last business
day that occurs prior to the Expiration Date. The
Expiration Date shall be the earliest to occur of:
a. the five-year anniversary of the Grant Date;
b. if the Participant's Date of Termination occurs by
reason of death, Disability or Retirement, the one-year
anniversary of such Date of Termination; or
c. if the Participant's Date of Termination occurs for
reasons other than death, Disability, or Retirement, the
90-day anniversary of such Date of Termination.
5. Method of Exercise. Commencing with the date of vesting
and subject to the terms of this Agreement and the Plan,
the Option may be exercised anytime in whole or in
part by filing a written notice with the Secretary of the
Company at its corporate headquarters prior to the
Company's close of business on the last business day that
occurs prior to the Expiration Date. Such notice shall
specify the number of Covered Shares the Participant
elects to purchase, and shall be accompanied by payment
of the Exercise Price for such shares. Payment shall be
by cash or by check payable to the Company. Except as
otherwise provided by the Committee before the Option is
exercised, (i) all or a portion of the Exercise Price may
be paid by the Participant by delivery of shares of Stock
owned by the Participant and acceptable to the Committee
having an aggregate Fair Market Value (as of the date of
exercise) that is equal to the amount of cash that would
otherwise be required; and (ii) the Participant may pay
the Exercise Price by authorizing a third party to
sell shares of Stock (or a sufficient portion of the
shares) acquired upon exercise of the Option and remit
to the Company a sufficient portion of the sale proceeds
to pay the entire Exercise Price and any tax withholding
resulting from such exercise. The Option shall not be
exercisable if and to the extent the Company determines
that such exercise would violate applicable state or
federal securities laws or the rules and regulations of
any securities exchange on which the Stock is traded.
If the Company makes such a determination, it shall
use all reasonable efforts to obtain compliance with such
laws, rules or regulations. In
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making any determination hereunder, the Company may rely on
the opinion of counsel for the Company.
6. Withholding. All deliveries and distributions under this
Agreement are subject to withholding of all applicable taxes.
At the election of the Participant, and subject to such rules
and limitations as may be established by the Committee from
time to time, such withholding obligations may be satisfied
through the surrender of shares of Stock which the Participant
already owns, or to which the Participant is otherwise
entitled under the Plan.
7. Transferability. Except as otherwise provided in this
Paragraph 7, the Option is not transferable other than as
designated by the Participant by will or by the laws of
descent and distribution, and during the Participant's life,
may be exercised only by the Participant. However, the
Participant, with the prior approval of the Committee, may
transfer the Option for no consideration to or for the benefit
of the Participant's Immediate Family (including, without
limitation, to a trust for the benefit of the Participant's
Immediate Family or to a partnership or limited liability
company for one or more members of the Participant's Immediate
Family), subject to such limits as the Committee may
establish, and the transferee shall remain subject to all
terms and conditions applicable to the Option prior to such
transfer. The foregoing right to transfer the Option shall
apply to the right to consent to amendments to this Agreement
and, in the discretion of the Committee, shall also apply to
the right to transfer ancillary rights associated with the
Option. The term "Immediate Family" means the Participant's
spouse, parents, children, stepchildren, adoptive
relationships, sisters, brothers and grandchildren.
8. Definitions. Capitalized terms in this Agreement shall have
the meaning given them in the Plan, or elsewhere in this
Agreement. In addition, the following definitions shall apply:
"Affiliate" has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Exchange Act.
"Competitor" is any person or entity engaged in the
distribution or promotion of nutraceutical, medical or
functional foods and/or related services or products in the
United States.
"Date of Termination" is the first day occurring on or after
the Grant Date on which the Participant is not employed by the
Company or any Subsidiary, regardless of the reason for the
termination of employment; provided that a termination of
employment shall not be deemed to occur by reason of a
transfer of the Participant between the Company and a
Subsidiary or between two Subsidiaries; and further provided
that the Participant's employment shall not be considered
terminated while the Participant is on an authorized leave of
absence from the Company or Subsidiary.
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If, as a result of a sale or other transaction, the
Participant's employer ceases to be a Subsidiary (and the
Participant's employer is or becomes an entity that is
separate from the Company), the occurrence of such transaction
shall be treated as the Participant's Date of Termination
caused by the Participant being discharged by the employer.
9. Heirs and Successors. This Agreement shall be binding upon,
and inure to the benefit of, the Company and its successors
and assigns, and upon any person acquiring, whether by merger,
consolidation, purchase of assets or otherwise, all or
substantially all of the Company's assets and business. If any
rights exercisable by the Participant or benefits deliverable
to the Participant under this Agreement have not been
exercised or delivered, respectively, at the time of the
Participant's death, such rights shall be exercisable by the
Designated Beneficiary, and such benefits shall be delivered
to the Designated Beneficiary in accordance with the
provisions of this Agreement and the Plan. The "Designated
Beneficiary" shall be the beneficiary or beneficiaries
designated by the Participant in a writing filed with the
Committee in such form and at such time as the Committee shall
require. If a deceased Participant fails to designate a
beneficiary, or if the Designated Beneficiary does not survive
the participant, any rights that would have been exercisable
by the Participant and any benefits distributable to the
Participant shall be exercised by or distributed to the legal
representative of the estate of the Participant. If a deceased
Participant has designated a beneficiary but the Designated
Beneficiary dies before the Designated Beneficiary's exercise
of all rights under this Agreement or before the complete
distribution of benefits to the Designated Beneficiary under
this Agreement, then any rights that would have been
exercisable by the Designated Beneficiary shall be exercised
by the legal representative of the estate of the Designated
Beneficiary, and any benefits distributable to the Designated
Beneficiary shall be distributed to the legal representative
of the estate of the Designated Beneficiary.
10. Administration. The authority to manage and control the
operation and administration of this Agreement shall be vested
in the Committee, and the Committee shall have all powers with
respect to this Agreement as it has with respect to the Plan.
Any interpretation of the Agreement by the Committee and any
decision made by it with respect to the Agreement is final and
binding on all persons.
11. Plan Governs. This Option is subject to and the
Participant is bound by all of the terms and conditions of the
Plan, as the same may have been amended from time to time in
accordance with its terms. A copy of the Plan in its present
form is available from the office of the Secretary of the
Company. In the event of a conflict between the terms of the
Plan and the terms of this Agreement, the terms and provisions
of the Plan shall govern.
12. Not an Employment Contract. The Option does not confer any
right on the Participant with respect to continuation of
employment or other service with the
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Company or any Subsidiary, nor will it interfere in any way
with any right the Company or any Subsidiary would otherwise
have to terminate or modify the terms of such Participant's
employment or other service at any time.
13. Rights in Stock Before Issuance and Delivery. No person
shall be entitled to the privileges of stock ownership in
respect of any shares issuable upon exercise of this Option
unless and until such shares have been issued to such person
as fully-paid shares.
14. Notices. Any notice to be given to the Company shall be
addressed to the Company in care of its corporate Secretary at
its principal offices and any notice to be given to the
Participant shall be addressed to the Participant at the
address set forth beneath the Participant's signature hereto
or at such other address as the Participant may hereafter
designate in writing to the Company. Any such notice shall be
deemed duly given when enclosed in a properly sealed envelope
or wrapper addressed as before said, registered or certified
and deposited postage and registry or certification fees
prepaid in a post office or branch post office regularly
maintained by the United States Postal Service.
15. Other Terms. This Agreement has been executed and
delivered by the Company in Salt Lake City, Utah and shall be
construed and enforced in accordance with the laws of said
state, other than any choice of law rules calling for the
application of laws of another jurisdiction. This Agreement
may be amended by written agreement of the Participant and the
Company, without the consent of any other person. If the
Company enters into a transaction which is intended to be
accounted for using the pooling-of-interests method of
accounting, but it is determined by the Board that the Option
or any aspect thereof could reasonably be expected to preclude
such treatment, then the Board may modify (to the minimum
extent required) or revoke (if necessary) the Option or any of
the provisions thereof to the extent that the Board determines
that such modification or revocation is necessary to enable
the transaction to be subject to pooling-of-interests
accounting.
IN WITNESS WHEREOF the Company has granted this Option on the Date of Grant
specified above.
Biomune Systems, Inc.
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
By:
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Its: President and Chief Executive Officer
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Participant:
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Signature:
Address:
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NOTICE OF EXERCISE
Biomune Systems, Inc.
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Ladies and Gentlemen:
The undersigned hereby elects to purchase, pursuant to the provisions
of the Stock Option Agreement and Option held by the undersigned, dated
___________, _________ shares of Stock of Biomune Systems, Inc., a Nevada
corporation, issuable upon exercise of said Option.
The undersigned hereby represents and warrants that the undersigned is
acquiring such stock for his own account and not for resale or with a view to
distribution of any part thereof.
The undersigned hereby attaches the purchase price payable for such
shares at $______ per share in the form of ____________________________________
(specify cash, check, money order, other securities, etc.).
Dated:
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Signature
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Print Name
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Address:
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(Social Security Number)
