NON-QUALIFIED STOCK PLAN NONQUALIFIED STOCK OPTION AGREEMENT
A.P.
pharma, inc.
NON-QUALIFIED
STOCK PLAN
NONQUALIFIED
STOCK OPTION AGREEMENT
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(A)
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Name
of Optionee:
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Name
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(B)
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Grant
Date:
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Grant
Date
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(C)
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Number
of Shares:
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Shares
Granted
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(D)
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Exercise
Price:
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Grant
Exercise
Price(FMV)
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(E)
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Vesting
Base Date:
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Vest
Start Date
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(F)
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Effective
Date:
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Effective
Date
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THIS
NONQUALIFIED STOCK OPTION AGREEMENT (the “Agreement”),
is made and entered into as of the date set forth in Item F above (the “Effective
Date”) between A.P.
Pharma, Inc., a Delaware corporation (the “Company”)
and Enter Name (“Optionee”).
THE
PARTIES AGREE AS FOLLOWS:
1. Grant
of
Option. The Company hereby grants to Optionee pursuant to the
Company’s Non-Qualified Stock Plan (the “Plan”),
a
copy of which is attached to this Agreement as Exhibit 1, a nonqualified stock
option (the “NQO”)
to
purchase all or any part of an aggregate of the number of shares (the “NQO
Shares”) of the Company’s Common Stock (as defined in the Plan) listed in
Item C above on the terms and conditions set forth herein and in the Plan,
the
terms and conditions of the Plan being hereby incorporated into this Agreement
by reference.
2. Exercise
Price. The exercise price for purchase of each share of Common
Stock covered by this NQO shall be the price set forth in Item D
above.
3. Term. This
NQO shall expire ten (10) years after the Grant
Date
4. Adjustment
of
NQOs. The Company shall adjust the number and kind of shares
and the exercise price thereof in certain circumstances in accordance with
the
provisions of Section 3(b) of the Plan.
5. Exercise
of
Options.
5.1 Vesting;
Time of
Exercise. This NQO shall be exercisable according to the
schedule set forth on Exhibit 5.1 attached hereto. Such schedule
shall commence as of the date set forth in Item (E) above (the “Vesting
Base
Date”).
5.2 Exercise
After
Termination of Status as an Employee, Director or
Consultant. In the event of termination of Optionee’s
continuous status as an employee, director or consultant, this NQO may be
exercised in whole or in part at
any time within 90 days of the date of such termination (but in no event after
the expiration date of this NQO pursuant to Section 3), provided, however,
that
in the event of death or disability, this NQO may be exercised in accordance
with the provisions of Section 9(d) of the Plan.
5.3 Manner
of
Exercise. Optionee may exercise this NQO, or any portion of
this NQO, by giving written notice to the Company at its principal executive
office, to the attention of the officer of the Company designated by the Plan
Administrator, accompanied by payment of the exercise price and payment of
any
applicable withholding or employment taxes. The date the Company
receives written notice of an exercise hereunder accompanied by payment will
be
considered as the date this NQO was exercised.
5.4 Payment. Except
as provided in Exhibit 5.4 attached hereto, if any (the absence of such exhibit
indicating that no exhibit was intended), payment may be made for NQO Shares
purchased at the time written notice of exercise of the NQO is given to the
Company, by delivery of cash, check or, in the exercise of the absolute
discretion of the Administrator, previously owned shares of Common Stock
(including constructive delivery) or a full recourse promissory note equal
to up
to 90% of the exercise price and payable over no more than five
years. Any applicable taxes must be paid in cash. The
proceeds of any payment shall constitute general funds of the
Company.
5.5 Delivery
of
Certificate. Promptly after receipt of payment and written
notice of exercise of the NQO, the Company shall, without stock issue or
transfer taxes to the Optionee or other person entitled to exercise, deliver
to
the Optionee or other person a certificate or certificates for the requisite
number of NQO Shares or shall register the Optionee as a shareholder on the
books of the Company. An Optionee or transferee of an Optionee shall
not have any privileges as a shareholder with respect to any NQO Shares covered
by the option until the date of issuance of a stock certificate or, if
applicable, such registration.
6. Nonassignability
of NQO. This NQO is not assignable or transferable by Optionee
except by will or by the laws of descent and distribution. During the
life of Optionee, the NQO is exercisable only by the Optionee. Any
attempt to assign, pledge, transfer, hypothecate or otherwise dispose of this
NQO in a manner not herein permitted, and any levy of execution, attachment,
or
similar process on this NQO, shall be null and void.
7. Company’s
Right
of Repurchase Upon Termination of Employment. The NQO Shares
arising from exercise of this NQO shall be subject to a right of repurchase
in
favor of the Company (the “Right
of
Repurchase”) to
the extent set forth on Exhibit 7 attached hereto (the absence of such exhibit
indicating that no such exhibit was intended and that the NQO shall be subject
only to the limitations set forth on Exhibit 5.1).
8. Restriction
on
Transfer. Regardless whether the sale of the NQO Shares has
been registered under the Securities Act or has been registered or qualified
under the securities laws of any state, the Company may impose restrictions
upon
the sale, pledge, or other transfer of NQO Shares (including the placement
of
appropriate legends on stock certificates) if, in the judgment of the Company
and the Company’s counsel, such restrictions are necessary or desirable in order
to achieve compliance with the provisions of the Securities Act, the securities
laws of any state, or any other law, or if the Company does not desire to have
a
trading market develop for its securities.
9. Tax
Advice. The Company has made no warranties or representations
to Purchaser with respect to the income tax consequences of the transactions
contemplated by the agreement pursuant to which the NQO Shares will be purchased
and Purchaser is in no manner relying on the Company or its representatives
for
an assessment of such tax consequences.
10. Assignment;
Binding Effect. Subject to the limitations set forth in this
Agreement, this Agreement shall be binding upon and inure to the benefit of
the
executors, administrators, heirs, legal representatives, and successors of
the
parties hereto; provided, however, that Optionee may not assign any of
Optionee’s rights under this Agreement.
11. Damages. Optionee
shall be liable to the Company for all costs and damages, including incidental
and consequential damages, resulting from a disposition of NQO Shares which
is
not in conformity with the provisions of this Agreement.
12. Governing
Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California excluding those laws that
direct the application of the laws of another jurisdiction.
13. Notices. All
notices and other communications under this Agreement shall be in
writing. Unless and until the Optionee is notified in writing to the
contrary, all notices, communications, and documents directed to the Company
and
related to the Agreement, if not delivered by hand, shall be mailed, addressed
as follows:
A.P.
Pharma, Inc.
000
Xxxxxxx Xxxxx
Xxxxxxx
Xxxx, XX 00000
Attention: President
Unless
and until the Company is notified in writing to the contrary, all notices,
communications, and documents intended for the Optionee and related to this
Agreement, if not delivered by hand, shall be mailed to Optionee’s last known
address as shown on the Company’s books. Notices and communications
shall be mailed by first class mail, postage prepaid; documents shall be mailed
by registered mail, return receipt requested, postage prepaid. All
mailings and deliveries related to this Agreement shall be deemed received
when
actually received, if by hand delivery, and two business days after mailing,
if
by mail.
14. Arbitration. Any
and all disputes or controversies arising out of this Agreement shall be finally
settled by arbitration conducted in California in accordance with the then
existing rules of the American Arbitration Association, and judgment upon the
award rendered by the arbitrators may be entered in any court having
jurisdiction thereof; provided that nothing in this Section 14 shall prevent
a
party from applying to a court of competent jurisdiction to obtain temporary
relief pending resolution of the dispute through arbitration. The
parties hereby agree that service of any notices in the course of such
arbitration at their respective addresses as provided for in Section 13 shall
be
valid and sufficient.
15. Entire
Agreement. Company and Optionee agree that this Agreement
(including its attached Exhibits) is the complete and exclusive statement
between Company and Optionee regarding its subject matter and supersedes all
prior proposals, communications, and agreements of the parties, whether oral
or
written, regarding the grant of stock options or issuances of shares to
Optionee.
IN
WITNESS WHEREOF, the parties have executed this Nonqualified Stock Option
Agreement as of the Effective Date.
A.P.
Pharma, Inc.
By: Xxxxxxx
Xxxxxxxx
Title: Chief
Financial Officer
The
Optionee hereby accepts and agrees to be bound by all of the terms and
conditions of this Agreement and the Plan.
Name
Optionee’s
spouse indicates by the execution of this Nonqualified Stock Option Agreement
his or her consent to be bound by the terms thereof as to his or her interests,
whether as community property or otherwise, if any, in the option granted
hereunder, and in any NQO Shares purchased pursuant to this
Agreement.
Optionee’s
Spouse
EXHIBITS
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Exhibit
1
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Non-Qualified
Stock Plan
|
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Exhibit
5.1
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Time
of Exercise
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Exhibit
5.4
(if
applicable)
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Payment
(not applicable)
|
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Exhibit
7
(if
applicable)
|
Right
of Repurchase (not applicable)
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EXHIBIT
1 OF THE NONQUALIFIED STOCK
OPTION
AGREEMENT
NON-QUALIFIED
STOCK PLAN
EXHIBIT
5.1 OF THE NONQUALIFIED STOCK
OPTION
AGREEMENT
The
NQO
shall be exercisable with respect to 25% of the total number of NQO Shares
one
year after the Vesting Base Date and with respect to an additional 1/48 of
the
total number of NQO Shares on the monthly anniversary of the Vesting Base Date
of each month thereafter, so that the NQO shall be exercisable with respect
to
all of the NQO Shares on and after four years after the Vesting Base
Date.
Executed
by:
A.P.
Pharma, Inc.
______________________
By: Xxxxxxx
Xxxxxxxx
Title: Chief
Financial Officer
______________________
Name
