NONQUALIFIED STOCK OPTION AGREEMENT
AGREEMENT made as of the 25th day of September, 1996, by and
between HUMASCAN INC., a Delaware corporation (the "Company"), and Zsigmond X.
Xxxx, Ph.D. (the "Former Director").
WHEREAS, the Former Director resigned from the Company's Board
of Directors (the "Board") prior to June 20, 1996 at the request of the Company
and in order to facilitate the Company's initial public offering of securities;
and
WHEREAS, in January 1996, the Former Director received, in his
capacity as a nonemployee director of the Company and pursuant to the Company's
former Nonemployee Director Stock Incentive Plan, options to purchase 1,500
shares of the Company's Common Stock, $.01 par value (the "Common Stock"); and
WHEREAS, by their terms, such options are no longer
exercisable as a consequence of the termination of the Former Director's
membership on the Board; and
WHEREAS, on September 25, 1996 (the "Grant Date"), in
replacement of the options previously granted under the Nonemployee Director
Stock Incentive Plan, the Board authorized the grant to the Former Director of
an option (the "Option") to purchase an aggregate of 1,500 shares of the
authorized but unissued Common Stock, conditioned upon the Former Director's
acceptance thereof upon the terms and conditions set forth in this Agreement;
and
WHEREAS, the Former Director desires to acquire the Option on
the terms and conditions set forth in this Agreement;
IT IS AGREED:
1. Grant of Stock Option. The Company hereby grants the Former
Director the Option to purchase all or any part of an aggregate of 1,500 shares
of Common Stock (the "Option Shares") on the terms and conditions set forth
herein.
2. Nonqualified Stock Option. The Option represented hereby is
not intended to be an Option which qualifies as an "Incentive Stock Option"
under Section 422 of the Internal Revenue Code of 1986, as amended.
3. Exercise Price. The exercise price of the Option shall be
$6.00 per share, subject to adjustment as hereinafter provided.
4. Exercisability. The right to purchase 25% of the Option
Shares shall become exercisable on January 12 of each year for four years
beginning January 12, 1997. After a portion of the Option becomes exercisable,
it shall remain exercisable except as otherwise provided herein, until the close
of business on September 25, 2006 (the "Exercise Period").
1
5. Adjustments. In the event of any merger, reorganization,
consolidation, recapitalization, dividend (other than cash dividend), stock
split, reverse stock split, or other change in corporate structure affecting the
number of issued shares of Common Stock, the Company shall adjust the number and
kind of Option Shares and the exercise price of the Option proportionally in
order to prevent the dilution or enlargement of the Former Director's
proportionate interest in the Company and his rights hereunder, provided that
the number of Option Shares shall always be a whole number and any fractional
shares resulting from such adjustments shall be eliminated.
6. Method of Exercise.
6.1 Notice to the Company. The Option shall be
exercised in whole or in part by written notice in substantially the form
attached hereto as Exhibit A directed to the Company at its principal place of
business accompanied by full payment as hereinafter provided of the exercise
price for the number of Option Shares specified in the notice.
6.2 Delivery of Option Shares. The Company shall
deliver a certificate for the Option Shares to the Former Director as soon as
practicable after payment therefor.
6.3 Payment of Purchase Price.
6.3.1 Cash Payment. The Former Director
shall make cash payments by wire transfer, certified or bank check or personal
check, in each case payable to the order of the Company; the Company shall not
be required to deliver certificates for Option Shares until the Company has
confirmed the receipt of good and available funds in payment of the purchase
price thereof.
6.3.2 Cashless Payment. The Former
Director may, with the consent of the Board, use Common Stock of the Company
owned by him or her to pay the purchase price for the Option Shares by delivery
of stock certificates in negotiable form which are effective to transfer good
and valid title thereto to the Company, free of any liens or encumbrances.
Shares of Common Stock used for this purpose shall be valued at the fair market
value, as determined by the Board in its sole discretion. Alternatively, at the
election of the Former Director and with the consent of the Board, the Company
may retain from the Option Shares that number of shares having a fair market
value on the date of exercise (as determined by the Board in its sole
discretion) equal to the option price of the number of Option Shares for which
the Option is being exercised.
6.3.3 Exchange Act Compliance.
Notwithstanding the foregoing, the Company shall have the right to reject
payment in the form of Common Stock if in the opinion of counsel for the
Company, (i) it could result in an event of "recapture" under Section 16(b) of
the Securities Exchange Act of 1934 ("Exchange Act"); (ii) such shares of Common
Stock may not be sold or transferred to the Company; or (iii) such transfer
could create legal difficulties for the Company.
7. Nonassignability. The Option shall not be assignable or
transferable except by will or by the laws of descent and distribution in the
event of the death of the Former
2
Director. No transfer of the Option by the Former Director by will or by the
laws of descent and distribution shall be effective to bind the Company unless
the Company shall have been furnished with written notice thereof and a copy of
the will and such other evidence as the Company may deem necessary to establish
the validity of the transfer and the acceptance by the transferee or transferees
of the terms and conditions of the Option.
8. Company Representations. The Company hereby represents and
warrants to the Former Director that:
(i) the Company, by appropriate and all required
action, is duly authorized to enter into this Agreement and consummate
all of the transactions contemplated hereunder; and
(ii) the Option Shares, when issued and delivered by
the Company to the Former Director in accordance with the terms and
conditions hereof, will be duly and validly issued and fully paid and
non-assessable.
9. Former Director Representations. The Former Director hereby
represents and warrants to the Company that:
(i) he or she is acquiring the Option and shall
acquire the Option Shares for his or her own account and not with a
view towards the distribution thereof;
(ii) he or she has received a copy of all reports and
documents required to be filed by the Company with the Commission
pursuant to the Exchange Act within the last 24 months and all reports
issued by the Company to its stockholders;
(iii) he or she understands that he or she must bear
the economic risk of the investment in the Option Shares, which cannot
be sold by him or her unless they are registered under the Securities
Act of 1933 (the "Securities Act") or an exemption therefrom is
available thereunder and that the Company is under no obligation to
register the Option Shares for sale under the Securities Act;
(iv) he or she has had both the opportunity to ask
questions and receive answers from the officers and directors of the
Company and all persons acting on its behalf concerning the terms and
conditions of the offer made hereunder and to obtain any additional
information to the extent the Company possesses or may possess such
infor mation or can acquire it without unreasonable effort or expense
necessary to verify the accuracy of the information obtained pursuant
to clause (ii) above;
(v) he or she is aware that the Company shall place
stop transfer orders with its transfer agent against the transfer of
the Option Shares in the absence of registration under the Securities
Act or an exemption therefrom as provided herein; and
(vi) The certificates evidencing the Option Shares
shall bear the following legends:
3
"The shares represented by this certificate have been
acquired for investment and have not been registered
under the Securities Act of 1933. The shares may not
be sold or transferred in the absence of such
registration or an exemption therefrom under said
Act."
"The shares represented by this certificate have been
acquired pursuant to a Stock Option Agreement, dated
as of September 25, 1996, a copy of which is on file
with the Company, and may not be transferred, pledged
or disposed of except in accordance with the terms
and conditions thereof."
10. Restriction on Transfer of Option Shares. Anything in this
Agreement to the contrary notwithstanding, the Former Director hereby agrees
that he or she shall not sell, transfer by any means or otherwise dispose of the
Option Shares acquired by him or her without registration under the Securities
Act, or in the event that they are not so registered, unless (i) an exemption
from the Securities Act registration requirements is available thereunder, and
(ii) the Former Director has furnished the Company with notice of such proposed
transfer and the Company's legal counsel, in its reasonable opinion, shall deem
such proposed transfer to be so exempt.
11. Miscellaneous.
11.1 Notices. All notices, requests, deliveries,
payments, demands and other communications which are required or permitted to be
given under this Agreement shall be in writing and shall be either delivered
personally or sent by registered or certified mail, or by private courier,
return receipt requested, postage prepaid to the parties at their respective
addresses set forth herein, or to such other address as either shall have
specified by notice in writing to the other. Notice shall be deemed duly given
hereunder when delivered or mailed as provided herein.
11.2 Stockholder Rights. The Former Director
shall not have any of the rights of a stockholder with respect to the Option
Shares until such shares have been issued after the due exercise of the Option.
11.3 Waiver. The waiver by any party hereto of a
breach of any provision of this Agreement shall not operate or be construed as a
waiver of any other or subsequent breach.
11.4 Entire Agreement. This Agreement constitutes
the entire agreement between the parties with respect to the subject matter
hereof. This Agreement may not be amended except by writing executed by the
Former Director and the Company.
11.5 Binding Effect; Successors. This Agreement
shall inure to the benefit of and be binding upon the parties hereto and, to the
extent not prohibited herein, their respective heirs, successors, assigns and
representatives. Nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto and as provided
4
above, their respective heirs, successors, assigns and representatives any
rights, remedies, obligations or liabilities.
11.6 Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
(without regard to choice of law provisions).
11.7 Headings. The headings contained herein are
for the sole purpose of convenience of reference, and shall not in any way limit
or affect the meaning or interpretation of any of the terms or provisions of
this Agreement.
IN WITNESS WHEREOF, the parties hereto have signed this
Agreement as of the day and year first above written.
HUMASCAN INC. Address:
000 Xxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
By:
----------------------------
FORMER DIRECTOR:
----------------------------
5
EXHIBIT A
FORM OF NOTICE OF EXERCISE OF OPTION
--------------------
DATE
HumaScan Inc.
000 Xxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attention: Board of Directors
Re: Purchase of Option Shares
Gentlemen:
In accordance with my Stock Option Agreement dated as of
September 25, 1996 ("Agreement") with HumaScan Inc. (the "Company"), I hereby
irrevocably elect to exercise the right to purchase _________ shares of the
Company's common stock, par value $.01 per share ("Common Stock"), which are
being purchased for investment and not for resale.
As payment for my shares, enclosed is (check and complete
applicable box[es]):
a [personal check] [certified check] [bank check] payable to the order of
"HumaScan Inc." in the sum of $_________;
confirmation of wire transfer in the amount of $_____________; and/or
certificate for ____ shares of the Company's Common Stock, free and clear of any
encumbrances, duly endorsed, having a fair market value of $_________.
I hereby represent, warrant to, and agree with, the Company
that:
(i) I am acquiring the Option and shall acquire the
Option Shares for my own account and not with a view towards the
distribution thereof;
(ii) I have received a copy of all reports and
documents required to be filed by the Company with the Commission
pursuant to the Securities Exchange Act of 1934 within the last 24
months and all reports issued by the Company to its stockholders;
(iii) I understand that I must bear the economic risk
of the investment in the Option Shares, which cannot be sold by me
unless they are registered under the Securities Act of 1933 (the
"Securities Act") or an exemption therefrom is available and that the
Company is under no obligation to register the Option Shares for sale
under the Securities Act;
(iv) I have had both the opportunity to ask questions
and receive answers from the officers and directors of the Company and
all persons acting on its behalf concerning the terms and conditions of
the offer made hereunder and to obtain any additional information
1
to the extent the Company possesses or may possess such information or
can acquire it without unreasonable effort or expense necessary to
verify the accuracy of the information obtained pursuant to clause (ii)
above;
(v) I am aware that the Company shall place stop
transfer orders with its transfer agent against the transfer of the
Option Shares in the absence of registration under the Securities Act
or an exemption therefrom as provided herein;
(vi) the certificates evidencing the Option Shares
shall bear the following legends:
"The shares represented by this certificate have been
acquired for investment and have not been registered
under the Securities Act of 1933. The shares may not
be sold or transferred in the absence of such
registration or an exemption therefrom under said
Act."
"The shares represented by this certificate have been
acquired pursuant to a Stock Option Agreement, dated
as of September 25, 1996, a copy of which is on file
with the Company, and may not be transferred, pledged
or disposed of except in accordance with the terms
and conditions thereof."
Kindly forward to me my certificate at your earliest convenience.
Very truly yours,
------------------------- -----------------------------
(Signature) (Address)
------------------------- -----------------------------
(Print Name) (Address)
-----------------------------
(Social Security Number)
2
