DERMA SCIENCES, INC.
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT, made and dated as of the 23rd day of July,
1997 between Derma Sciences, Inc., a Pennsylvania corporation (the "Company"),
and Xxxxxxx X. Xxxxx, CPA, MST (the "Optionee").
WHEREAS, the Company desires to afford the Optionee, in consideration for
his services to the Company as its Chief Financial Officer, an opportunity to
purchase shares of Common Stock of the Company ("Shares") as hereinafter
provided,
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration the legal sufficiency of
which is hereby acknowledged, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. Grant of Option. The Company hereby grants to the Optionee the right and
option to purchase all or any part of an aggregate of 75,000 shares (the
"Option") which Option is intended as a "nonqualified stock option". The Option
is in all respects limited and conditioned as hereinafter provided.
2. Purchase Price. The purchase price per share (the "Option Price") of the
Shares covered by the Option (the "Option Shares") shall be the offering price
of the Company's Common Stock in the Company's current private offering, to wit:
$1.00.
3. Term. The Option shall expire on July 22, 2007 (the "Expiration Date").
4. Vesting and Exercise of Option. The right of the Optionee to purchase
the Option Shares may be exercised, cumulatively and in whole or in part, at the
times hereinbelow provided:
Date Installment Number of
Becomes Exercisable Option Shares
August 22, 1997 4,166
September 22, 1997 4,167
October 22, 1997 4,167
November 22, 1997 4,166
December 22, 1997 4,167
January 22, 1998 4,167
February 22, 1998 4,166
March 22, 1998 4,167
April 22, 1998 4,167
May 22, 1998 4,166
June 22, 1998 4,167
July 22, 1998 4,167
August 22, 1998 4,166
September 22, 1998 4,167
October 22, 1998 4,167
November 22, 1998 4,166
December 22, 1998 4,167
January 22, 1999 4,167
5. Acceleration of Vesting. Vesting of the Option shall accelerate and the
Option shall become 100% exercisable upon the occurrence of either of the
following: (1) the sale by the Company of all or substantially all of its assets
to any person (as such term is used in Section 13(d) and 14(d) of the Securities
Exchange Act of 1934), the consolidation of the Company with any person, or the
merger of the Company with any person as a result of which merger the Company is
not the surviving entity, or if the surviving entity, the Company is owned by a
parent company; or (2) the sale or transfer by one or more of the Company's
shareholders in one or more transactions, related or unrelated, to one or more
persons under circumstances whereby any person and its "affiliates" (as defined
herein) shall own, as a result of such sale or transfer, at least Fifty percent
(50%) of the outstanding shares of the Company.
6. Method of Exercising Option. (a) Subject to the terms and conditions of
this Option Agreement, the Option may be exercised by giving written notice to
the Company at its principal office specifying the number of Option Shares to be
purchased and accompanied by payment in full of the aggregate purchase price for
the Shares. Only full Shares shall be delivered and any fractional share which
might otherwise be deliverable upon exercise of an Option granted hereunder
shall be forfeited. Attached as Exhibit 1 is a form of written notice acceptable
to the Company.
(b) The purchase price shall be payable: (i) in cash or its
equivalent, or (ii) in whole or in part through the transfer of Common
Stock previously acquired by the Optionee.
(c) Upon receipt of such notice and payment, the Company, as promptly
as possible, shall deliver or cause to be delivered a certificate or
certificates representing the Shares with respect to which the Option is so
exercised. The certificate or certificates for such Shares shall be
registered in the name of the person or persons exercising the Option (or,
if the Optionee shall so request in the notice exercising the Option, in
the name of the Optionee and his spouse, jointly, with right of
survivorship) and shall be delivered as provided above to or upon the
written order of the person or persons exercising the Option. In the event
the Option is exercised by any person or persons after the death or legal
disability of the Optionee, such notice shall be accompanied by appropriate
proof of the right of such person or persons to exercise the Option. All
shares that are purchased upon the exercise of the Option as provided
herein shall be fully paid and nonassessable.
7. Non-transferability of Option. Save as hereinafter provided, the Option
is not assignable or transferable, in whole or in part, by the Optionee other
than by will or by the laws of descent and distribution. During the lifetime of
the Optionee, the Option shall be exercisable only by the Optionee or, in the
event of his legal disability, by his legal representative. Provided, however,
Optionee may assign, without limitation, the unexercised portion of this Option
to the firm of Xxxxxx, Xxxxx & Company, Princeton, New Jersey.
8. Withholding of Taxes. The obligation of the Company to deliver Shares
upon the exercise of any Option shall be subject to any applicable federal,
state and local tax withholding requirements.
9. Governing Law. This Agreement shall, to the maximum extent possible, be
construed in a manner consistent with the Internal Revenue Code provisions
concerning nonqualified stock options and its interpretation shall otherwise be
governed by Pennsylvania law.
IN WITNESS WHEREOF, the parties have set their hands and seals as of the
day and year first hereinabove written.
DERMA SCIENCES, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, Chairman
OPTIONEE
By: /s/ Xxxxxxx X. Xxxxx, CPA, MST
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Xxxxxxx X. Xxxxx, CPA, MST
EXHIBIT 1
DERMA SCIENCES, INC.
NOTICE OF EXERCISE OF STOCK OPTION
I hereby exercise nonqualified stock options granted to me on
_______________ by Derma Sciences, Inc. with respect to the following number of
shares of Derma Sciences, Inc. Common Stock, $.01 par value per share,
("Shares") covered by said option:
Number of Shares to be purchased ________________
Option price per Share ________________
Total option price ________________
Enclosed is my check in the amount of $_______ (and/or ______ Shares)1.
Please have the certificate or certificates representing the purchased Shares
registered in the following name or names2 ________________________________ and
sent to _________________________________________________.
DATED: ______________, ____.
OPTIONEE
_________________________
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1The option price may be paid in whole or in part by delivery of Shares, subject
to the terms of the Optionee's Stock Option Agreement.
2Certificates may be registered in the name of the Optionee alone or in the
joint names of the Optionee and his/her spouse.
