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EXHIBIT 4.19
EXHIBIT A
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of February 7, 2000 (the "Effective Date")
between Viragen, Inc. a Delaware Corporation (the "Company") and Xxxxxx Xxxxx
("Optionee").
The Company hereby grants to Optionee a Non-Statutory Option ("NSO") to acquire
Common Stock, par value $.01 per share, of the Company (the "Common Stock"),
subject to the following terms and conditions:
1. GRANT OF OPTION. The Company hereby grants to Optionee (the
"Option") to purchase up to 1,000,000 shares of Common Stock (the "Shares"), to
be transferred upon the exercise thereof, fully paid and nonassessable.
Optionee and the Company acknowledge that this Option supercedes and replaces
Optionees' right to purchase 1,000,000 shares, exercisable at $0.50 per share
for a period of five (5) years from the grant date, granted by the Company on
October 6, 1995 ("Replaced Option") and that the Replaced Option is hereby
cancelled.
2. EXERCISE PRICE. The exercise price of the Shares subject to the
Option shall be at $0.50 per share. The Company shall pay all original issue or
transfer taxes upon the exercise of the Option by Optionee.
3. EXERCISABILITY OF OPTION; RIGHTS AND PRIVILEGES. Subject to the
provisions of Paragraph 6 hereof, the Option shall be exercisable by Optionee in
whole or in part, at any time and from time to time, commencing on the Effective
Date (the "Exercise Date") through October 5, 2003
All granted but unexercised Options shall continue to be fully exercisable in
accordance with the provisions herein:
(i) if there occurs any corporate transaction (which shall include
a series of corporate transactions occurring within 60 days or occurring
pursuant to a plan), that has the result that shareholders of the Company
immediately before such transaction cease to own at least 66 2/3 percent of the
voting stock of the Company in a (a) reorganization, (b) consolidation, (c)
merger, (d) liquidation or (e) a similar of corporate transaction;
(ii) if the shareholders of the Company shall approve a plan of
merger, consolidation, reorganization, liquidation or dissolution in which the
Company does not survive (unless the approved merger, consolidation,
reorganization, liquidation or dissolution is subsequently abandoned); or
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(iii) if the shareholders of the Company shall approve a plan for
the sale, lease, exchange or other disposition of all or substantially all the
property and assets of the Company (unless such plan is subsequently abandoned).
4. NON-ASSIGNABILITY OF OPTION. The Option shall not be given, granted,
sold, exchanged, transferred, pledged, encumbered, assigned or otherwise
disposed of by Optionee, other than by will or the laws of descent and
distribution, and during the lifetime of Optionee, shall not be exercisable by
any other person, but only by Optionee.
5. METHOD OF EXERCISE OF OPTION. Optionee shall notify the Company by
written notice, in the form of the Notice of Exercise attached hereto
(Attachment A), delivered to the Company's principal office, attention: Chief
Financial Officer. At the Optionee's option, the payment for the Shares may be
made either by Optionee's check payable to the order to the Company in full
payment for the total exercise price of the number of Shares purchased or by
execution and delivery by the Optionee to the Company of a Note(s), in similar
form and content as Notes previously used by the Company for similar purposes
("Note(s)"), dated as of each Notice of Exercise. As soon as practicable after
the receipt of such Notice of Exercise and accompanying payment for the purchase
of Shares, the Company shall, at its principal office, tender to Optionee a
certificate or certificates issued in Optionee's name evidencing the Shares
purchased by Optionee hereunder.
6. TERMINATION OF OPTION. To the extent exercisable but not exercised,
the Option shall terminate upon the first to occur of the following dates:
(a) October 5, 2003
(b) the expiration of ninety (90) days following the date
Optionee's employment terminates with the Company and/or any of its subsidiaries
included in the Plan with Cause, as defined in Optionee's Employment Agreement
dated March 1, 1999.
Subject to the provisions of this paragraph, in the event of Optionee's death,
the exercisable but unexercised portion of the Option may be exercised by the
estate of Optionee, or by the person who acquired the right to exercise the
Option by bequest or inheritance or by reason of the death of Optionee.
In the event of Employee's termination without Cause, all granted but
unexercised Options shall continue to be fully exercisable in accordance with
the provisions herein. Additionally, in the event this Agreement is not renewed
at the end of the Employment Term, then all granted but unexercised Options
shall continue to be fully exercisable in accordance with the provisions herein.
7. PLEDGE OF SHARES. If payment for the purchase of Shares under this
Option is made through execution and delivery of a Note(s), effective upon
Optionee's purchase(s) of the Shares and the delivery of the Note(s), in order
to secure the Company's obligations under the Note(s), Optionee hereby pledges,
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assigns and sets over to the Company, and grants to the Company a security
interest in, the Shares. The Shares pledged pursuant hereto shall be maintained
in escrow with Atlas, Xxxxxxxx, Trop & Borkson, P.A. pursuant to the terms of a
Pledge and Escrow Agreement previously used by the Company for similar purposes,
which shall be executed by Optionee and the Company upon delivery of a Note(s).
As long as any Shares remain subject to the lien of the Pledge, such Shares may
not be further pledged or encumbered in any manner, and shall not be sold,
transferred or otherwise disposed of. The Escrow Agent shall not be required to
relinquish the Pledge or the Escrow Agent's possession of the certificates
evidencing the Shares, unless no later than concurrently with the sale of the
Shares pursuant to an S-8 registration, all Notes which are secured by such
Shares are paid in full. In the event any of the Shares are to be titled in the
name of an immediate family member of Optionee or a trust pursuant to the terms
herein, as a condition thereto the designated title holder(s) of such Shares
shall execute and deliver to the Company a pledge and escrow agreement, in form
and content reasonably satisfactory to the Company and its counsel, consistent
with the terms herein. No transfer of Shares to, or designation by Optionee of
(for the purposes of owning Shares) any person or entity shall relieve Optionee
of any of his obligations under the Note(s) or this Agreement. With respect to
each Note under which a voluntary prepayment is made by Optionee, provided that
interest payments on such Note are current through the date of prepayment and
such Note is not in default and has not been accelerated, for each $5,000 of
principal paid by Optionee under such Note, 10,000 Shares of the Shares pledged
to secure such Note shall be released from the lien of the Pledge. As long as no
event of default has occurred with respect to a Note and no event giving right
to accelerate such Note has occurred, Optionee shall retain all voting rights
with respect to all Shares securing such Note. Following an event of default or
an acceleration event, the Company shall have and may exercise all voting rights
with respect to such Shares. Optionee hereby irrevocably appoints the Company
Optionee's attorney-in-fact for such purpose, it being acknowledged that such
appointment is coupled with an interest. Any dividends or distributions payable
in respect of any Shares subject to the Pledge shall automatically be applied to
pay down the Note(s) in inverse order of their respective maturity date(s). In
the event of a default under any Note, in addition to and not in limitation or
lieu of any other rights or remedies the Company may have against Optionee as a
result of such default, the Company may exercise all of its rights at law and in
equity as a secured party, including without limitation under the Uniform
Commercial Code, with respect to all Shares then securing the Note with respect
to which the default has occurred. Upon a default, without limiting any of the
Company's other rights and remedies, the Company may conduct a public or private
foreclosure sale of the Shares securing the Note with respect to which the
default has occurred. Optionee agrees that 10 days notice to him of any private
sale is fair and reasonable. The Company may be the purchaser at any public
foreclosure sale, and may bid any commercially reasonable amount at such sale.
In all events, in the event of a public or private foreclosure sale, Optionee
shall be liable for any deficiency. All of the Company's rights and remedies
under the Note(s), the Pledge and this Agreement, and at law or in equity, are
cumulative, and none is intended to be in substitution or in lieu of, nor is the
exercise of one intended to be a waiver of, any other. The Company shall have no
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obligation to proceed against the Shares before proceeding against Optionee with
respect to any default under any of the Notes.
8. SECURITIES LAWS. Employer represents and warrants that (i) all
shares underlying the Options will be issued from shares authorized by and
subject to the provisions of the Plan; (ii) the Plan and the shares underlying
the Options shall be registered under the applicable regulations of the
Securities and Exchange Commission on Form S-8; and (iii) such registration
covering the shares underlying the Options will be maintained as effective for
the longer of (a) the Employment Term or (b) the Exercise Period of the Options
as defined herein.
9. ADJUSTMENT OF SHARES. If at any time prior to the expiration or
exercise in full of the Option, there shall be any increase or decrease in the
number of issued and outstanding shares of the Common Stock through the
declaration of a stock dividend or through any recapitalization resulting in a
stock split-up, combination or exchange of the Common Stock, then and in such
event:
(i) appropriate adjustment shall be made in the maximum number of
Shares available for grant, so that the same percentage of the Company's issued
and outstanding Shares shall continue to be subject to being so optioned; and
(ii) appropriate adjustment shall be made in the number of Shares,
and the exercise price per Share thereof, that remain unexercised under the
Option, so that the same percentage of the Company's issued and outstanding
shares of Common Stock shall remain subject to purchase at the same aggregate
exercise price.
Except as otherwise expressly provided herein, the issuance by the Company of
shares of its capital stock of any class, or securities convertible into shares
of capital stock of any class, either in connection with a direct sale of upon
the exercise of rights or warrants to subscribe therefore, or upon conversions
of shares or obligations the Company convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number of exercise price of the Shares that remain
unexercised under the Option.
Without limiting the generality of the foregoing, the existence of unexercised
Shares under the Option shall not affect in any manner the right or power of the
Company to make, authorize or consummate (i) any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business; (ii) any merger or consolidation of the Company;
(iii) any issue by the Company of debt securities, or preferred or preference
stock that would rank above the Shares issuable upon exercise of the Option;
(iv) the dissolution or liquidation of the Company; (v) any sale, transfer or
assignment of all or any part of the assets or business of the Company; or (vi)
any other corporate act or proceeding, whether of a similar character or
otherwise.
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10. NO RIGHTS AS STOCKHOLDER. Optionee shall have no rights as a
stockholder of the Company in respect of the Shares as to which the Option shall
not have been exercised and payments made therefore as herein provided.
11. BINDING EFFECT. Except as otherwise provided herein, this Agreement
shall be binding upon and inure to the benefit of the parties hereto, their
heirs, legal representatives, successors and permitted assigns.
12. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to the
conflict of laws principles thereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
VIRAGEN, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Executive Vice President/CFO
OPTIONEE
/s/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx
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ATTACHMENT A
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise the within Option to the
extent of purchasing __________ shares of Common Stock of Viragen, Inc., a
Delaware Corporation, and hereby makes payments of $________ in payment
therefor.
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Signature
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Date
INSTRUCTIONS FOR ISSUANCE OF STOCK AND CORPORATE RECORDS
Name:
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(Please type or print in block letters)
Address:
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Social Security #:
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Phone #: ( )
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Fax #: ( )
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