Exhibit 99.4
QUORUM SCIENCES, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT dated as of April 18, 2000 (the "Date of Grant") by and
between QUORUM SCIENCES, INC., a Delaware corporation, 000-0 Xxxx Xxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000 (the "Company"), and UTE MUH, c/o 3403 Xxxxx
Science Building, University of Iowa, Xxxx Xxxx, XX 00000 (the "Optionee").
1. DEFINITIONS. For the purposes of this Agreement, except where the
context otherwise indicates, the following definitions shall be applicable.
SECTION 1.1 AGREEMENT. "Agreement" shall mean this Nonqualified
Stock Option Agreement and shall include the applicable provisions of the Plan,
which is hereby incorporated into and made a part of the Agreement.
SECTION 1.2 CHANGE IN CONTROL TRANSACTION. "Change in Control" shall
mean either of the following in which a majority of the shares or interests in
the acquiring or surviving entity immediately after the transaction is not owned
directly or indirectly by holders of the shares of the Common Stock of the
Company immediately prior to the transaction: (i) any sale, exchange or other
disposition to an entity of substantially all of the Company's assets or over
50% of its Common Stock; or (ii) any merger, share exchange, consolidation or
other reorganization or business combination with another entity in which the
Company is not the surviving or continuing corporation, or in which the
Company's stockholders become entitled to receive cash or securities of another
issuer.
SECTION 1.3 CODE. "Code" shall mean the Internal Revenue Code of
1986, Title 26 of the United States Code, as amended, and any regulations issued
thereunder.
SECTION 1.4 EXCHANGE ACT. "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended, Xxxxxxx 0X xx Xxxxx 00 xx xxx Xxxxxx Xxxxxx
Code.
SECTION 1.5 EXERCISE DATE. "Exercise Date" shall mean the date on
which the Company receives the written notice required under Section 3.1 of this
Agreement that Optionee has exercised the Option.
SECTION 1.6 IPO. "IPO" shall mean the occurrence of any public
offering of any class of equity securities of the Company.
SECTION 1.7 PLAN. "Plan" shall mean the Quorum Sciences, Inc.
Nonqualified Stock Option Plan.
2. GRANT OF OPTION. Pursuant to our letter to you dated July 1, 2000, the
Company hereby grants to the Optionee, subject to the terms and conditions set
forth
herein, the right and option (the "Option") to purchase from the Company all or
any part of an aggregate of Ten Thousand (10,000) shares of Common Stock, par
value $0.001 per share, of the Company ("Stock") at the purchase price of $0.50
per share ("Exercise Price"). This Option is not intended to qualify as an
incentive stock option within the meaning of Section 422 of the Internal Revenue
Code.
3. EXERCISE OF OPTION. Optionee shall be entitled to first exercise this
Option with respect to the following percentages of the shares of Stock subject
to this Option on the dates listed in the vesting schedule below, provided the
Optionee remains an employee of the Company on any such date:
Percentage of Shares
of Stock Subject to
this Option First Exercisable
----------------------- -----------------------------------------
25% 1st Anniversary of Optionee's date of
employment with the Company
25% 2nd Anniversary of Optionee's date of
employment with the Company
25% 3rd Anniversary of Optionee's date of
employment with the Company.
25% 4th Anniversary of Optionee's date of
employment with the Company
After shares of Stock are subject to exercise in accordance with the above
schedule, Optionee may exercise this Option with respect to those shares in
whole or in part at any time or times prior to the expiration date as defined in
Section 4 hereof.
4. TERM OF OPTION. The Option granted pursuant to Section 2 shall expire
on the first to occur of (i) the tenth (10th) anniversary of the Date of Grant
of the Option, or (ii) ninety (90) days after the date of termination of the
Employee's employment with the Company (the "Expiration Date").
5. LIMITATION ON EXERCISE. This Option may not be exercised in whole or in
part by Optionee for less than 100 shares of Stock unless only less than 100
shares of Stock remain subject to the Option.
6. METHOD OF EXERCISE. This Option shall be exercisable by a written
notice which shall:
(i) State the election to exercise the Option, the number of
shares of Stock with respect to which it is being exercised,
the person in whose name the stock certificate or certificates
for such shares of Stock is to be registered, his or her
address and Social Security
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Number (or if more than one, the names, addresses and Social
Security Numbers of such persons);
(ii) Be signed by the person or persons entitled to exercise the
Option and, if the Option is being exercised by any person or
persons other than the Optionee, be accompanied by proof,
satisfactory to counsel for the company, of the right of such
person or persons to exercise the Option;
(iii) Be delivered in person or by registered or certified mail to
the President of the Company; and
(iv) Be accompanied by signed written instructions acceptable to
the Company in the event that Optionee desires the Company to
deliver the Stock to Optionee's broker or to any party other
than Optionee.
Such notice shall be accompanied by payment of the full purchase price of the
shares of Stock with respect to which the Option is being exercised. Payment
shall be by certified or bank cashier's check, by the surrender and delivery to
the Company of certificates representing shares of its Stock duly endorsed for
transfer or accompanied by a duly executed assignment, or by an agreement signed
by the Optionee to surrender and deliver to the Company certificates
representing shares of its Stock duly endorsed for transfer, which may be
effected by means of a duly executed assignment, transferring to the Company
shares of Stock acquired through the exercise of the Option, or by a combination
of such methods of payment. The certificate or certificates for shares of Stock
as to which the Option shall be exercised shall be registered in the name of the
person or persons exercising the Option.
7. LOCK-UP PROVISION. In connection with any underwritten public offering
by the Company of its equity securities pursuant to an effective Registration
Statement filed under the 1933 Act, including the Company's initial public
offering, Optionee shall not sell, make any short sale of, loan, hypothecate,
pledge, grant any option for the purchase of, or otherwise dispose or transfer
for value or otherwise agree to engage in any of the foregoing transactions with
respect to, any shares of Stock without the prior written consent of the
Company. Such restriction (the "Market Stand-Off") shall be in effect for such
period of time from and after the effective date of the final prospectus for the
offerings as may be requested by the Company or the underwriters. In no event,
however, shall such period exceed one hundred eighty (180) days after the
effective date of the Company's Registration Statement with respect to such
offering. Optionee shall be subject to the Market Stand-Off provided and only if
the officers and directors of the Company holding common stock of the Company
are also subject to similar restrictions.
8. NON-TRANSFERABILITY OF OPTION. This Option may not be transferred in
any manner other than by will or the laws of descent and distribution and may be
exercised during the period that the Optionee is an employee of the Company, and
only by the
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Optionee. The terms of this Option shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
9. REPRESENTATIONS AND WARRANTIES. The Optionee represents and warrants to
the Company, upon which representations and warranties the Company is relying in
entering into this Agreement, as follows:
(a) The Optionee has been afforded the opportunity by the Company to
ask questions and request information to acquire detailed knowledge
and information concerning the business affairs and operations of
the Company and its financial condition and prospects. As a result
of such opportunity to ask questions and review information and the
business background, training, and expertise of the Optionee (and/or
of the advisors with whom the Optionee has consulted), the Optionee
is capable of evaluating the merits and risks of an investment in
the Stock and is in a position to comprehend, weigh, and assess such
knowledge and information in a meaningful fashion.
(b) The Optionee acknowledges and agrees that, in entering into this
Agreement and in exercising the Option, the Optionee is not relying
upon, and will not rely upon, any statements, representations, or
warranties, whether oral or written, made by any stockholder,
officers, director, representative, agent, or employee of the
Company, or any affiliate thereof, except for those set forth in any
historic financial statements provided to the Optionee by the
Company. Further, the Optionee acknowledges and agrees that any
business and financial projections of the Company that may be
provided by the Company are solely for purposes of describing the
Company's future business and financial goals and are not intended
to be, nor are they, representations or guaranties of the Company's
future performance. Accordingly, the Optionee is not relying upon,
and will not rely upon, any such projections in entering into this
Agreement or in exercising the Option.
(c) The address set forth above is the true and correct residence of
the Optionee, and the Optionee has no present intention of becoming
a resident of any other state or jurisdiction.
(d) The Optionee understands that neither the Option nor the Stock
subject to the Option may have been registered under the Securities
Act, or any state securities laws and that there is no present
intention to so register them.
(e) The Option is being acquired by the Optionee solely for the
Optionee's own account, for investment, and not with a view to or
for the resale, distribution, subdivision, or fractionalization of
the Stock that is permitted to be acquired by the Optionee
thereunder. At such times as the
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Optionee may exercise the Option, unless the Stock has been
registered under the Securities Act, the Stock so acquired will be
acquired solely for the Optionee's own account, for investment, and
not with a view to or for the resale, distribution, subdivision, or
fractionalization thereof.
(f) The Optionee acknowledges and is aware that (i) there are
substantial restrictions on the transferability of the Stock, (ii)
the Stock will not be, and investors in the Company have no rights
to require that the Company be, registered under the Securities Act
or any state securities law, (iii) there will be no public market
for the Stock and accordingly, if the Option is exercised, the
Optionee may have to hold the Stock indefinitely without the
possibility of liquidating the Optionee's investment in the Company,
and (iv) any shares received through exercise of the Option will
bear legends restricting the transfer of such shares.
(g) As of the date of this Agreement and at such time(s) as the
Optionee may exercise the Option, the Optionee has and will have (i)
adequate means of providing for Optionee's needs and possible
personal and family contingencies and (ii) the ability to bear the
economic risk of an investment in the Stock.
(h) The Optionee has entered into this Agreement voluntarily.
10. NON-MARKETABILITY OF STOCK. No representations or promises have been
made to the Optionee concerning the present or future marketability or value of
the Stock. The Optionee agrees that, unless the Stock is registered under the
Securities Act or relevant state securities laws, the Stock cannot be resold or
transferred unless (a) (i) they are subsequently registered thereunder or
exemptions from such registrations are available or (ii) the Company receives an
opinion of counsel satisfactory (both as to counsel and opinion) to the Company
that such transfer complies with federal and state securities laws, including
but not limited to Section 701 of the Securities Act of 1933, as amended, and
(b) the applicable restrictions on transfer contained in Section 11 of this
Agreement have been complied with.
11. TRANSFER RESTRICTIONS. The Optionee acknowledges that he will be
required to offer any shares of Stock obtained upon exercise of this Option to
the Company at the price and terms offered to him by a proposed transferee for a
period of 30 days prior to transferring such shares. In the event the Company
elects not to exercise its right of first refusal, the Optionee will be
permitted to transfer his shares at such price and upon such terms to the
proposed transferee during the 60-day period following expiration of the 30-day
period described above provided that the transferee agrees to be bound by the
provisions of this Section.
12. ADJUSTMENTS. In the event of any change in the Stock of the Company by
reason of any stock dividend, recapitalization, reorganization, merger,
consolidation, split-up, combination or exchange of shares, or of any similar
change affecting the
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common Stock, then in any such event the number and kind of shares subject to
this Option and their purchase price per share shall be appropriately adjusted
consistent with such change in such manner as the committee appointed by the
Company may deem equitable to prevent substantial dilution or enlargement of the
rights granted to Optionee hereunder. Any adjustment so made shall be final and
binding upon Optionee.
13. NO RIGHTS AS STOCKHOLDER. Optionee shall have no rights as a
stockholder with respect to any shares of Stock subject to this Option prior to
the date of issuance to him of a certificate or certificates for such shares.
Optionee agrees to execute, deliver and perform any stockholders agreement that
may then be in force by and among the Company and its stockholders.
14. NO RIGHTS TO CONTINUED EMPLOYMENT. This Option shall not confer upon
Optionee any right with respect to continuance of employment.
15. COMPLIANCE WITH LAW AND REGULATIONS.
(a) This Option and the obligation of the Company to sell and
deliver shares hereunder, shall be subject to all (i) applicable federal and
state laws, rules and regulations, (ii) such approvals by any government or
regulatory agency as may be required, and (iii) applicable rules and regulations
of any stock exchange or Nasdaq on which the Stock may be listed from time to
time. The Company shall not be obligated to issue any shares of Stock issuable
under this Agreement until such time as such shares of Stock have been
registered under the Securities Act, and all applicable state securities laws or
until the Company receives an opinion of counsel satisfactory (both as to
opinion and counsel) to the Company that such issuance is exempt from
registration under said laws. Moreover, this Option may not be exercised if its
exercise, or the receipt of shares of Stock pursuant thereto, would be contrary
to applicable law.
(b) The inability of the Company to obtain approval from any
regulatory body having authority deemed by the Company to be necessary to the
lawful issuance and sale of any Common Stock pursuant to this option shall
relieve the Company of any liability with respect to the non-issuance or sale of
the Common Stock as to which such approval shall not have been obtained. The
Company, however, shall use its best efforts to obtain all such approvals.
16. WITHHOLDING OF TAXES. The Company or any affiliate shall have the
right to deduct from any compensation or any other payment of any kind
(including withholding the issuance of shares of Common Stock) due Grantee the
amount of any federal, state or local taxes required by law to be withheld as
the result of the exercise of the Option or the disposition (as that term is
defined in ss.424(c) of the Code) of shares of Common Stock acquired pursuant to
the exercise of the Option; provided, however, that the value of the shares of
Common Stock withheld may not exceed the statutory minimum withholding amount
required by law. In lieu of such deduction, the Committee may require Grantee to
make a cash payment to the Company or an affiliate equal to the amount required
to be withheld. If Grantee does not make such payment when requested,
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the Company may refuse to issue any Common Stock certificate under the Agreement
until arrangements satisfactory to the Company or the committee of the Company
for such payment have been made.
17. COVENANTS AS TO STOCK. The Company has taken all action necessary and
appropriate to grant to Optionee the Option. The Company covenants and agrees
that the Stock issuable on the exercise of the Option shall, at delivery, be
fully paid and non-assessable, free from taxes, liens and charges with respect
to its purchase. The Stock subject to the Option has not been and for the
Exercise Period will not be transferred, assigned, pledged or otherwise
encumbered in any way by the Company, and no other person or entity has or
during the Exercise Period, will have any rights, direct or indirect, in the
Stock subject to this Agreement or the rights of the Optionee hereunder.
18. EXCHANGE FOR OTHER DENOMINATIONS. The Option shall be exchangeable for
new instruments of like tenor and date representing in the aggregate the right
to exercise the Option in denominations designated by the Holder at the time of
surrender.
19. LOSS, THEFT, DESTRUCTION OR MUTILATION OF OPTION. Upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Option, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it, and upon
reimbursement to the Company of all reasonable expenses incidental thereto, and
upon surrender and cancellation of the Option, if mutilated, the Company will
make and deliver a new option of like tenor and date, in lieu of the Option.
20. MISCELLANEOUS.
(a) This Agreement has been executed in two counterparts each of
which shall constitute one and the same instrument.
(b) In case any provision of this Agreement shall be invalid,
illegal or unenforceable, or partially invalid, illegal or unenforceable, the
provision shall be enforced to the extent, if any, that it may legally be
enforced and the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
(c) This Agreement and any term hereof may be changed, waived,
discharged or terminated only by a statement in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
(d) Any covenants, representations, warranties and agreements made
by the parties shall be deemed to have been relied upon by the parties, shall
survive this Agreement, shall continue until the applicable statute of
limitations bars any claim thereon, and shall be effective regardless of any
investigation which may have been made at any time by or on behalf of a party.
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(e) This Agreement shall be binding upon the heirs, personal
representatives, and permitted successors and assigns of the parties hereto.
(f) This Agreement is made, is entered into, and is to be performed
in, and shall be governed by and construed in accordance with, the laws of the
State of Delaware without regard to principles of conflict of laws.
(g) Any notices required to be given or delivered to the Company
under the terms of this Agreement shall be in writing and addressed to the
Company at its principal corporate offices. Any notice required to be given or
delivered to Optionee shall be in writing and addressed to Optionee at the
address indicated below Optionee's signature line on this Agreement. All notices
shall be deemed effective upon personal delivery or upon deposit in the U.S.
mail, postage prepaid and properly addressed to the party to be notified.
(h) This Agreement constitutes and contains the entire agreement and
understanding of the parties, and shall supersede any and all prior
negotiations, correspondence, understandings and agreements between the parties
respecting the subject matter hereof.
IN WITNESS WHEREOF, Quorum Sciences, Inc. has caused this Agreement to be
executed by its President and Optionee has executed this Agreement, both as of
the day and year first above written.
QUORUM SCIENCES, INC.
/s/ Xxxxxx X. Xxxxxxxxxx /s/ Xxxxxxx Xxxxxx
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Witness Name:
XXXXXX X. XXXXXXXXXX Title: President
/s/ Xxxx Xxxxxxx /s/ Ute Muh
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Witness UTE MUH
Xxxx Xxxxxxx
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