INCENTIVE STOCK OPTION AGREEMENT SIRION HOLDINGS, INC.
Exhibit 10.1
2006 STOCK INCENTIVE PLAN
THIS
INCENTIVE STOCK OPTION AGREEMENT is made and entered into this
day of ,
2006 by and between SIRION HOLDINGS, INC. (the “Company”) and ___
(“Grantee”).
WITNESSETH:
WHEREAS, the Grantee has provided and will continue to provide valuable services to the
Company and/or one or more of its Affiliates in a key management capacity and, through such
services, is expected to contribute to the development and growth of the Company and its
Affiliates; and
WHEREAS, the Company has adopted the Sirion Holdings, Inc. 2006 Stock Incentive Plan (the
“Plan”) to provide a vehicle for rewarding certain key management and executive employees
by providing them an opportunity for an equity participation in the Company; and
WHEREAS, to reward Grantee for his/her performance to the Company the Company desires to grant
options to Grantee pursuant to this Agreement and the Plan.
AGREEMENT:
NOW, THEREFORE, the parties hereto, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, hereby agree
to the provisions of this Agreement as set forth below. All capitalized terms not otherwise
defined herein shall have the respective meanings ascribed to them in the Plan:
1. Grant of Option. Pursuant to the Plan, the Company hereby grants to Grantee an
option to purchase from the Company a total of ___(___) full Shares (“Optioned
Shares”) of the Company at an exercise price per share of $___, during the vesting periods,
and otherwise upon the terms and conditions set forth in this Agreement. The Date of Grant of this
Option is ___, 2006. This Option is an ISO.
2. Subject to Plan. This Option and its exercise are subject to the terms and
conditions of the Plan, provided, however, that the terms of the Plan shall not be considered an
enlargement of any benefits provided Grantee under this Agreement. This Option shall be subject to
any rules promulgated pursuant to the Plan by the Board or the Committee and communicated to the
Grantee in writing.
3. Vesting; Time of Exercise. Except as specifically provided in this Agreement and
subject to certain restrictions and conditions set forth in the Plan, this Option is exercisable in
the following cumulative installments:
First installment. Up to one-third (1/3) of the total Optioned Shares at any time
following the first anniversary of the Date of Grant.
Second installment. Up to an additional one-third (1/3) of the total Optioned Shares
at any time following the second anniversary of the Date of Grant.
Third installment. Up to an additional one-third (1/3) of the total Optioned Shares
at any time following the third anniversary of the Date of Grant.
No fractional Shares will be issued pursuant to this Option.
4. Term. All unexercised Options granted to the Grantee hereunder, unless sooner
terminated or forfeited pursuant to the Plan or to the terms of this
Agreement, shall terminate on
the fifth anniversary of the date of this Agreement (the “Option Expiration Date”).
5. Effect of Termination of Employment.
(a) Disability. If the Grantee’s employment with the Company is terminated because of
the disability of the Grantee, the Option, to the extent vested but unexercised on the date on
which the Grantee’s service terminated, may be exercised by the Grantee (or the Grantee’s guardian
or legal representative) at any time prior to the expiration of twelve (12) months after the date
on which the Grantee’s service terminated, but in any event not later than the Option Expiration
Date. To the extent not vested, such Option shall immediately terminate and be canceled upon the
effective date of termination of Employment. For purposes hereof, the term “disability” shall mean
a permanent and total disability within the meaning of Section 22(e)(3) of the Code, as reasonably
determined by the Board. If any determination by the Board with respect to disability is disputed
by the Grantee, the parties hereto agree that, upon written notice from the dissenting Grantee,
they will abide by the decision of a panel of three physicians. The Grantee and the Company shall
each appoint one member, and the third member of the panel shall be appointed by the other two
members. The Grantee agrees to make himself available for and submit to examinations by such
physicians as may be directed by the Company. Failure to submit to any such examination shall
constitute a breach of a material part of this Agreement. If any such dispute is not settled
within forty-five (45) days from the date of written notice, either party may petition a court of
competent jurisdiction to appoint an arbitrator to conduct a binding arbitration regarding the
dispute under procedures and rules determined by the appointing court.
(b) Death. If the Grantee’s employment with the Company is terminated because of the
death of the Grantee, the Option, to the extent vested but unexercised on the date on which the
Grantee’s service terminated, may be exercised by the Grantee’s legal representative or other
person who acquired the right to exercise the Option by reason of the Grantee’s death (and as
otherwise permitted by the terms of this Agreement and the Plan) at any time prior to the
expiration of one (1) year after the date on which the Grantee’s service terminated, but in any
event no later than the Option Expiration Date. The Grantee’s service shall be deemed to have
terminated on account of death if the Grantee dies within three (3) months after the Grantee’s
termination of employment with the Company. To the extent not vested, such Option shall
immediately terminate and be canceled upon the effective date of service termination.
(c) Other Termination of Service. If the Grantee’s employment with the Company
terminates for any reason, except disability or death, the Option, to the extent vested but
unexercised by the Grantee on the date on which the Grantee’s service terminated, may be exercised
by the Grantee within three (3) months after the date on which the Grantee’s service terminated,
but in any event no later than the Option Expiration Date. Notwithstanding the foregoing, the
Company may, in its sole discretion, cancel the Option in its entirety, both vested and unvested,
if there has been a Termination for Cause of the Grantee. “Termination for Cause” shall mean
termination by the Company (or any successor Subsidiary or Affiliate) of the Grantee’s employment
or service with the Company for any of the following reasons:
(i) engaging in theft, falsification of any employment or other Company records (or
those of any Subsidiary or Affiliate), or in any acts or omissions constituting dishonesty,
intentional breach of fiduciary obligation or intentional wrongdoing, malfeasance, or intent
to injure the Company;
(ii) the Grantee’s failure or inability (due to other than disability) to perform any
reasonable assigned duties after written notice from Company of, and a reasonable
opportunity to cure, such failure or inability;
(iii) any material breach by the Grantee of any employment agreement or any other
agreement between Grantee and Company or any Subsidiary, or other Affiliate, which breach is
not cured pursuant to the terms of such agreement, or if such agreement has no cure
provisions, if such breach or failure by its nature is incapable of being cured, or such
breach or failure remains uncured for more than thirty (30) days following receipt by
Grantee of written notice from the Company specifying the nature of the breach or failure
and demanding the cure thereof; or
(iv) the Grantee’s conviction of any felony or other criminal act which impairs
Grantee’s ability to perform his or her duties with Company or which involves moral
turpitude, fraud, dishonesty or a breach of trust.
“Termination for Cause” pursuant to the foregoing shall be determined in the sole but
reasonably exercised discretion of the Company. “Termination for Cause” shall not include any
action by the Grantee in connection with his or her duties if Grantee acted in good faith and in a
manner he or she reasonably believed to be in, and not opposed to, the best interest of Company and
for which Grantee had no reasonable cause to believe his or her
conduct was unlawful.
6. Manner of Exercise. To exercise an Option under the Plan, the Grantee must give
written notice to the Company, in the form of Exhibit “A” attached hereto, specifying the number of
Shares with respect to which the Grantee elects to exercise the Option together with full payment
of the Exercise Price and payment to the Company of any tax withholding required in connection with
your exercise of the Option (including FICA, Medicare, and local, state, or federal income taxes).
The date of exercise will be the date on which the Company receives the notice. Payment may be made
by any means determined by the Committee in its sole discretion and consistent with the terms of
the Plan.
Upon payment of all amounts due from the Grantee, the Company shall cause certificates for the
Optioned Shares then being purchased to be delivered to the Grantee (or the person exercising the
Grantee’s Option in the event of his/her death) at its principal business office within ten (10)
business days after the Exercise Date. The obligation of the Company to deliver Shares shall,
however, be subject to the terms of the Plan and to the condition that if at any time the Committee
shall determine in its discretion that the listing, registration, or qualification of the Option or
the Optioned Shares upon any securities exchange or under any state or federal law, or the consent
or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in
connection with, the Option or the issuance or purchase of Shares thereunder. Then, the Option may
not be exercised in whole or in part unless such listing, registration, qualification, consent, or
approval shall have been effected or obtained free of any conditions not acceptable to the
Committee.
If the Grantee fails to pay for any of the Optioned Shares specified in such notice or fails
to accept delivery thereof, then the Grantee’s right to purchase such Optioned Shares may be
terminated by the Company.
7. Disqualifying Disposition. In the event that any Shares acquired upon exercise of
this Option are disposed of by the Grantee prior to the expiration of either two years from the
Date of Grant of such Option or one year from the transfer of shares to the Grantee pursuant to the
exercise of such Option, such Grantee shall notify the Company in writing within thirty (30) days
after such disposition of the date and terms of such disposition.
8. Non-Assignability. This Option is not assignable or transferable by the Grantee
except by will or by the laws of descent and distribution.
9. Rights as Stockholder. The Grantee will have no rights as a stockholder with
respect to any shares covered by this Option until the issuance of a certificate or certificates to
the Grantee for the shares. Except as otherwise provided in Section 11 hereof, no adjustment shall
be made for dividends or other rights for which the record date is prior to the issuance of such
certificate or certificates.
10. No Right of Employment. Nothing in the Plan or in any Option granted shall confer
any right on Grantee to continue in the employ of the Company or its Subsidiaries or Affiliates or
shall interfere in any way with the right of the Company or its Subsidiaries or Affiliates to
terminate such Grantee’s employment at any time.
11. Adjustment of Number of Shares and Related Matters. The number of Shares covered
by this Option and the Option Price are subject to adjustment in accordance with Section 8 of the
Plan.
12. Grantee’s Representations. Notwithstanding any of the provisions hereof, the
Grantee hereby agrees that he/she will not exercise the Option granted hereby, and that the Company
will not be obligated to issue any shares to the Grantee hereunder, if the exercise thereof or the
issuance of such shares shall constitute a violation by the Grantee or the Company of any provision
of any law or regulation of any governmental authority. Any determination in this connection by the
Committee shall be final, binding, and conclusive. The obligations of the Company and the rights of
the Grantee are subject to all applicable laws, rules, and regulations.
13. Investment Representation. Unless the Shares are issued to him/her in a
transaction registered under applicable federal and state securities laws, by his or her execution
hereof, the Grantee represents and warrants to the Company that all Shares which may be purchased
hereunder will be acquired by the Grantee for investment purposes for his or her own account and
not with any intent for resale or distribution in violation of federal or state securities laws.
Unless the Shares are issued to him/her in a transaction registered under the applicable federal
and state securities laws, all certificates issued with respect to the Shares shall bear an
appropriate restrictive investment legend. The Company, in its discretion, may also require the
exercising Grantee to make such customary securities laws and other respresentations and warranties
as it may, upon advise of counsel, deem appropriate from time to time.
14. Grantee’s Acknowledgments. The Grantee acknowledges receipt of a copy of the Plan
and of the Summary Plan Description and prospectus pertaining to the Plan, which are annexed as
Exhibit “B” hereto, and represents that he or she is familiar with the terms and provisions
thereof, and hereby accepts this Option subject to all the terms and provisions thereof. The
Grantee hereby agrees to accept as binding, conclusive, and final all decisions or interpretations
of the Board, as that term is defined in the Plan, upon any questions arising under the Plan or
this Agreement.
15. Miscellaneous
(a) Governing Law. This Agreement shall be governed by, construed, and
enforced in accordance with the laws of the State of Delaware (excluding any conflict of
laws, rules, or principles of Delaware law that might refer the governance, construction, or
interpretation of this agreement to the laws of another state).
(b) Legal Construction. In the event that any one or more of the terms,
provisions, or agreements that are contained in this Agreement shall be held by a Court of
competent jurisdiction to be invalid, illegal, or unenforceable in any respect for any
reason, the invalid, illegal, or unenforceable term, provision, or agreement shall not
affect any other term, provision, or agreement that is contained in this Agreement and this
Agreement shall be construed in all respects as if the invalid, illegal, or unenforceable
term, provision, or agreement had never been contained herein.
(c) Covenants and Agreements as Independent Agreements. Each of the covenants
and agreements that is set forth in this Agreement shall be construed as a covenant and
agreement independent of any other provision of this Agreement. The existence of any claim
or cause of action of the Grantee against the Company, whether predicated on this Agreement
or otherwise, shall not constitute a defense to the enforcement by the Company of the
covenants and agreements that are set forth in this Agreement.
(d) Entire Agreement. This Agreement together with the Plan supersede any and
all other prior understandings and agreements, either oral or in writing, between the
parties with respect to the subject matter hereof and constitute the sole and only
agreements between the parties with respect to the said subject matter. All prior
negotiations and agreements between the parties with respect to the subject matter hereof
are merged into this Agreement. Each party to this Agreement acknowledges that no
representations, inducements, promises, or agreements, orally or otherwise, have been made
by any party or by anyone acting on behalf of any party, which are not embodied in this
Agreement or the Plan and that any agreement, statement or promise that is not contained in
this Agreement or the Plan shall not be valid or binding or of any force or effect.
(e) Parties Bound. The terms, provisions, representations, warranties,
covenants, and agreements that are contained in this Agreement shall apply to, be binding
upon, and inure to the benefit of the parties and their respective heirs, executors,
administrators, legal representatives, and permitted successors and assigns.
(f) Modification. Except as otherwise specifically set forth in this Agreement
or the Plan, no change or modification of this Agreement shall be valid or binding upon the
parties unless the change or modification is in writing and signed by the parties.
Notwithstanding the foregoing, Grantee acknowledges that the Company, in the exercise of its
sole discretion and without the consent of the Grantee, may amend or modify this Option
Agreement in any manner and delay the payment of any amounts payable pursuant to this Option
Agreement to the extent necessary to meet the requirements of Section 409A of the Code as
amplified by any Internal Revenue Service or U.S. Treasury Department regulations or
guidance as the Company deems appropriate or advisable.
(g) Headings. The headings that are used in this Agreement are used for
reference and convenience purposes only and do not constitute substantive matters to be
considered in construing the terms and provisions of this Agreement.
(h) Gender and Number. Words of any gender used in this Agreement shall be
held and construed to include any other gender, and words in the singular number shall be
held to include the plural, and vice versa, unless the context requires otherwise.
(i) Notice. Any notice or communication required to be delivered or which
otherwise may be given under this Agreement shall be in writing and addressed to the Grantee
or the Company (as the case may be) at the address of Grantee set forth in the employment
records of the Company or of the Company as set forth on the Notice of Exercise. All
required notices shall be deemed given or delivered (i) upon personal delivery, (ii) three
delivery days following deposit in the U.S. Mail, certified and return receipt requested,
postage prepaid and properly addressed to the Grantee, (iii) upon confirmed delivery by
Fed-Ex or comparable nationally recognized overnight courier, or (iv) by facsimile upon the
date of transmission, with machine confirmation and subsequent delivery pursuant to
(i)-(iii) above. All communications to the Company shall be to the attention of the
Corporate Secretary of the Company.
[This space intentionally left blank. Signatures on following page.]
IN WITNESS WHEREOF, the Company has caused this Incentive Option Agreement to be executed by
its duly authorized officer, and the Grantee, to evidence his or her consent and approval of all
the terms hereof, has duly executed this Agreement, as of the date first set forth hereinabove.
| SIRION HOLDINGS, INC. |
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| By: | ||||||
| Print Name: | ||||||
| Title: | ||||||
| Grantee: |
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| signature | ||||
| print name | ||||
EXHIBIT “A”
to Incentive Option Agreement
to Incentive Option Agreement
NOTICE OF EXERCISE OF OPTION
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ATTENTION: Corporate Secretary |
The undersigned hereby irrevocably elects to exercise the purchase rights granted under
the Incentive Option Agreement dated as of ___(the “Option Agreement”) between
Sirion Holdings, Inc. (the “Company”) and the undersigned (“Grantee”) pursuant to Sirion
Holdings, Inc. 2006 Stock Incentive Plan (“Plan”). The undersigned Grantee hereby exercises
his/her right to purchase ___(___) Shares in the Company, as constituted
on the date hereof, and herewith makes full payment of ___Dollars
($___) therefore, in form provided for in the Plan.
DATED: ____________________________
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| Signature | ||||
| Name:_________________________________________________________________ | ||||
| Address:_______________________________________________________________ | ||||
| Please Print | ||||
EXHIBIT “B”
to Incentive Option Agreement
to Incentive Option Agreement
Sirion Holdings, Inc. 2006 Stock Incentive Plan
and Summary Plan Description
and Summary Plan Description