MILESTONE SCIENTIFIC INC.
STOCK OPTION AGREEMENT
(NON QUALIFIED)
Dated: As of May 10, 2004
Milestone Scientific Inc. a Delaware corporation (the "COMPANY"), grants to
R. Xxxxx Xxxxxxx (the "OPTIONEE"), a stock option to purchase a total of 40,000
shares of the Company's Common Stock, par value $.001 per share, at $2.25 per
share on the terms and conditions set forth herein.
1. DURATION.
This option shall expire five (5) years from the date hereof (the
"TERMINATION DATE").
2. CHARACTERIZATION OF OPTIONS.
Intentionally omitted.
3. ANTI-DILUTION PROVISIONS.
(a) If there is any stock dividend, stock split, or combination of
shares of Common Stock of the Company, the number and amount of shares then
subject to this option shall be proportionately and appropriately adjusted; no
change shall be made in the aggregate purchase price to be paid for all shares
subject to this option, but the aggregate purchase price shall be allocated
among all shares subject to this option after giving effect to the adjustment.
(b) If there is any other change in the Common Stock of the Company,
including recapitalization, reorganization, sale or exchange of assets, exchange
of shares, offering of subscription rights, or a merger or consolidation in
which the Company is the surviving corporation, an adjustment, if any, shall be
made in the shares then subject to this option as the Board of Directors may
deem equitable. Failure of the Board of Directors to provide for an adjustment
pursuant to this subparagraph prior to the effective date of any
Company action referred to herein shall be conclusive evidence that no
adjustment is required in consequence of such action.
(c) If the Company is merged into or consolidated with any other
corporation, or if it sells all or substantially all of its assets to any other
corporation, then either (i) the Company shall cause provisions to be made for
the continuance of this option after such event, or for the substitution for
this option of an option covering the number and class of securities which the
Optionee would have been entitled to receive in such merger or consolidation by
virtue of such sale if the Optionee had been the holder of record of a number of
shares of Common Stock of the Company equal to the number of shares covered by
the unexercised portion of this option, or (ii) the Company shall give to the
Optionee written notice of its election not to cause such provision to be made
and this option shall become exercisable in full (or, at the election of the
Optionee, in part) at any time during a period of 20 days, to be designated by
the Company, ending not more than 10 days prior to the effective date of the
merger, consolidation or sale, in which case this option shall not be
exercisable to any extent after the expiration of such 20-day period. In no
event, however, shall this option be exercisable after the Termination Date.
4. INVESTMENT REPRESENTATION; LEGEND ON CERTIFICATES; SPECIAL RESTRICTION
ON RESALE.
The Optionee agrees that until such time as a registration statement
under the Securities Act of 1933 becomes effective with respect to the option
and/or the stock, the Optionee is taking this option and will take the stock
underlying this option, for his own account, for investment and not with a view
to the resale or distribution thereof. The Company shall have the right to place
upon the face of any stock certificate or certificates evidencing shares
issuable upon the exercise of this option such legend as the Board of Directors
may prescribe for the purpose of preventing disposition of such shares in
violation of the Securities Act of 1933, as now or hereafter provided.
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5. NON-TRANSFERABILITY.
This option shall not be transferable by the Optionee other than by
will or by the laws of descent or distribution, and is exercisable during the
lifetime of the Optionee only by the Optionee.
6. CERTAIN RIGHTS NOT CONFERRED BY OPTION.
The Optionee shall not, by virtue of holding this option, be entitled
to any rights of a stockholder in the Company.
7. EXPENSES.
The Company shall pay all original issue and transfer taxes with
respect to the issuance and transfer of shares of Common Stock of the Company
pursuant hereto and all other fees and expenses necessarily incurred by the
Company in connection therewith.
8. EXERCISE OF OPTIONS.
(a) This option shall be exercisable in accordance with its terms as
of the date of grant.
13,333 one year after the date of grant
13,334 two years after the date of grant
13,333 three years after the date of grant
(b) An option shall be exercisable by written notice of such exercise,
in the form prescribed by the Board of Directors, to the Secretary or Treasurer
of the Company at its principal office. The notice shall specify the number of
shares for which the option is being exercised (which number, if less than all
of the shares then subject to exercise, shall be 50 or a multiple thereof) and
shall be accompanied by payment (i) in cash or by check in the amount of the
full exercise price of such options, or (ii) in such other manner as the Board
shall deem acceptable. No shares shall be delivered upon exercise of any option
until all laws, rules and regulations, which the Board of Directors may deem
applicable, have been complied with.
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(c) The person exercising an option shall not be considered a record
holder of the stock so purchased for any purpose until the date on which he is
actually recorded as the holder of such stock in the records of the Company.
(d) In the event of death of the Optionee during the term hereof, the
option may be exercised, at any time within twelve (12) months following the
date of death, by the Optionee's estate or by a person who acquired the right to
exercise this option by bequest or inheritance, but only to the extent of the
right that would have accrued had the Optionee continued living one (1) month
after the date of death. Notwithstanding the provisions of this Section (d), in
no event shall this option be exercisable after the Termination Date.
9. Nothing herein shall be deemed to create any employment agreement
between the Optionee and the Company.
MILESTONE SCIENTIFIC INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------
Xxxxxxx X. Xxxxx, Chairman & CEO
Accepted as of the date
first set forth above.
/s/ R. Xxxxx Xxxxxxx
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OPTIONEE
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