Form of] INCENTIVE AND NONQUALIFIED STOCK OPTION AGREEMENT Under the Intellect Neurosciences, Inc. 2005 Stock Option Plan
Exhibit 4.1
ISO: #
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NQ: # |
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[Form
of]
INCENTIVE AND NONQUALIFIED STOCK OPTION AGREEMENT
Under the Intellect Neurosciences, Inc.
2005 Stock Option Plan
Under the Intellect Neurosciences, Inc.
2005 Stock Option Plan
THIS AGREEMENT dated as of the [DAY]th day of
[MONTH], 200___, between
Intellect Neurosciences, Inc., a Delaware Corporation (the “Company”),
and [EMPLOYEE] (the “Optionee”).
W I T N
E S S E T H:
In consideration of the mutual promises and covenants made herein and
the mutual benefits to be derived herefrom, the parties hereto agree as
follows:
1. Grant of Stock Option. Subject to the provisions of this Agreement and to
the provisions of the Intellect Neurosciences, Inc. 2005 Stock Option Plan (the “Plan”), the
Company hereby grants to the Optionee on [DATE] (the “Grant Date”) the right and option (the “Stock
Option”) to purchase [NUMBER] shares of common stock of the Company, par value $.01 per share
(“Common Stock”), at the fair market value of such shares on the Grant Date. The fair market value
of the Company’s common shares as of [DATE] shall be determined by CBIZ Valuation Group, LLC, 0000
Xxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxxxxx, XX 00000, independent consultants to the Compensation
Committee of the Company, and their determination shall be final for purposes of this Agreement.
The Stock Option is intended to qualify as an Incentive Stock
Option (ISO), within the meaning of Section 422 of the Internal Revenue
Code, as amended (the “Code”). Nevertheless, to the extent that it exceeds
the $100,000 rule of Code Section 422(d), this Option shall be treated as a
Non Qualified Stock Option (NQ). Unless earlier terminated pursuant to the
terms of this Agreement, the Stock Option shall expire on the tenth
anniversary of the date hereof. Capitalized terms not defined herein shall
have the meaning set forth in the Plan.
The Company cannot guarantee that the special tax treatment described
in Section 422 of the Code will apply. For example, if the Optionee sells
the Common Stock acquired pursuant to the exercise of the Stock Option
either within two years after the date of this Agreement or within one year
after the date the Stock Option (or any part thereof) is exercised, this
special tax treatment will not apply.
If the Stock Option (or any part thereof) does not qualify for
Incentive Stock Option treatment for any reason, then, to the extent of
such nonqualification, the Stock Option (or such portion thereof) shall be
treated as a Nonqualified Stock Option
granted under the Plan, provided that the Stock Option (or such portion thereof) otherwise
satisfies the terms and conditions of the Plan generally relating to Nonqualified Stock Options.
2. Exercisability of the Stock Option. The Stock Option shall become
vested and exercisable with respect to the shares covered thereby on a monthly basis pro
rata over a two year period beginning on the Grant Date. Upon the Optionee’s
termination of employment for any reason, the portion of the Stock Option that is not
vested as of such date shall cease vesting and terminate immediately.
3. Method of Exercise of the Stock Option.
(a) The portion of the Stock Option as to which the Optionee is vested shall be
exercisable by delivery to the Company of a written or electronic notice stating the number of
whole shares to be purchased pursuant to this Agreement and accompanied by payment of the full
purchase price of the shares of Common Stock to be purchased. Fractional share interests shall be
disregarded except they may be accumulated.
(b) The exercise price of the Stock Option shall be paid: (i) in cash or by certified
check or bank draft payable to the order of the Company; (ii) by exchange of shares of unrestricted
Common Stock of the Company already owned by the Optionee (that have been held by the Optionee for
six (6) months prior to exercise or which were acquired in the open market) and having an aggregate
Fair Market Value equal to the aggregate purchase price, provided, that the Optionee represents and
warrants to the Company that the Optionee has held the shares of Common Stock free and clear of
liens and encumbrances and has held the shares for at least six (6) months prior to exercise or
that such shares were acquired in the open market; (iii) by delivering, along with a properly
executed exercise notice to the Company, a copy of irrevocable instructions to a broker to deliver
promptly to the Company the aggregate exercise price and, if requested by the Optionee, the amount
of any applicable federal, state, local or foreign withholding taxes required to be withheld by the
Company, provided, however, that such exercise may be implemented solely under a program or
arrangement established and approved by the Company with a brokerage firm selected by the Company
(iv) by promissory note; or (v) by any other procedure approved by the Committee, or by a
combination of the foregoing.
4.
Termination of Employment Other Than Due to Death or
Disability.
(a) Except as provided in Section 4(b) below with regard to the Optionee’s
termination of employment for Cause or following an event that would be grounds for a termination
of employment for Cause and Section 5 below with regard to the Optionee’s termination of employment
due to death or Disability, in the event of the Optionee’s termination of employment, the portion
of the Stock Option, if any, which is exercisable at the time of such termination may be exercised
prior to the first to occur of
(a) the expiration of the 180 day (180) period commencing on the date of termination or
(b) the expiration date of the Stock Option.
(b) In the event of the Optionee’s termination of employment for
Cause, the Optionee’s Stock Option (whether or not vested) shall be fortified and
cancelled in its entirety upon such termination of employment.
(c) Nothing in this Agreement or the Plan shall confer upon the
Optionee any right to continue in the employ of the Company or any of its subsidiaries or
affiliates or interfere in any way with the right of the Company or any such subsidiaries
or affiliates to terminate the Optionee’s employment at any time.
5. Death or Disability of Optionee.
(a) In the event of the Optionee’s termination of employment due to
death (or, in the event of the Optionee’s death following termination of employment
while the Stock Option remains exercisable) the portion of the Stock Option, if any,
which is exercisable at the time of death may be exercised by the Optionee’s estate or by
a person who acquired the right to exercise such Stock Option by bequest or inheritance
or otherwise by reason of the death of the Optionee at any time on or prior to the first to
occur of (i) the anniversary of the date of death or (ii) the expiration date of the Stock
Option.
(b) In the event of the Optionee’s termination of employment due to
Disability, the portion of the Stock Option, if any, that is exercisable at the time of such
termination may be exercised by the Optionee or the Optionee’s guardian or legal
representative at any time on or prior to the first to occur of (i) the anniversary of such
termination of employment or (ii) the expiration date of the Stock Option.
6. Nontransferability of the Stock Option. The Stock Option is
non-transferable by the Optionee other than by will or the laws of descent and
distribution, or pursuant to a qualified domestic relations order, and the Stock Option
may be exercised, during the lifetime of the Optionee, only by the Optionee or by the
Optionee’s guardian or legal representative or any transferee described above.
7. Rights as a Stockholder. An Optionee or a transferee of the Stock
Option shall have no rights as a stockholder with respect to any shares covered by such
Stock Option until the date that his or her purchase is entered upon the records of the duly
authorized transfer agent of the Company. No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property) or distribution of
other rights for which the record date is prior to the date a stock certificate is issued,
except as provided in the Plan.
8. Adjustment in the Event of Change in Stock. In the event of any change
in corporate capitalization, (including, but not limited to, a change in the number of shares of
Common Stock outstanding), such as a stock split, reverse stock split, stock dividend, combination
or reclassification of the Common Stock, or any other increase or decrease in the number of issued
shares of Common Stock effected without receipt of consideration by the Company, the number and
kind of shares subject to the Stock Option and/or the exercise price per share will be
appropriately adjusted by the Committee consistent with such change and consistent with adjustments
made under the Plan for other Plan participants who have an outstanding Stock Option. The
determination of the Committee regarding any adjustment will be final and conclusive.
9.
Payment of Transfer Taxes, Fees and Other Expenses. The Company agrees to
pay any and all original issue taxes and stock transfer taxes that may be imposed on the issuance
of shares acquired pursuant to exercise of the Stock Option, together with any and all other fees
and expenses necessarily incurred by the Company in connection therewith. Notwithstanding the
foregoing, the Optionee shall be solely responsible for any other taxes (including, without
limitation, federal, state, local or foreign income, social security, estate or excise taxes) that
may be payable as a result of the Optionee’s participation in the Plan or as a result of the
exercise of the Stock Option and/or the sale, disposition or transfer of any shares of Common Stock
acquired upon the Optionee’s exercise of the Stock Option.
10. Other Restrictions. The exercise of the Stock Option shall be
subject to the requirement that, if at any time the Committee shall determine that (i) the
listing, registration or qualification of the shares of Common Stock subject or related
thereto upon any securities exchange or under any state or federal law, or (ii) the consent
or approval of any government regulatory body or (iii) an agreement by the Optionee
with respect to the disposition of shares of Common Stock, is necessary or desirable as a
condition of, or in connection with, such exercise or the delivery or purchase of shares
pursuant thereto, then in any such event, such exercise shall not be effective unless such
listing, registration, qualification, consent, approval or agreement shall have been
effected or obtained free of any conditions not acceptable to the Committee.
The Company may, but will in no event be obligated to, register any securities issuable upon
the exercise of all or any portion of the Stock Option pursuant to the Securities Act of 1933 (as
now in effect or as hereafter amended) or to take any other affirmative action in order to cause
the exercise of the Stock Option or the issuance of shares pursuant thereto to comply with any law
or regulation of any governmental authority. The certificates representing shares issued to
Optionee hereunder shall bear such legends as Company determines appropriate referring to
restrictions on the transfer of such shares imposed by this Agreement and such other legends as are
required or appropriate under applicable law.
11. Disqualifying Disposition. The Optionee agrees and covenants
that if he disposes of any of the Common Stock in a “disqualifying disposition,” as
described in Section 422 of the Code, he will immediately contact the Company to
inform it of such event.
12.
Taxes and Withholding. No later than the date of exercise of the
Stock Option granted hereunder, the Optionee shall pay to the Company or make
arrangements satisfactory to the Committee regarding payment of any federal, state or
local taxes of any kind required by law to be withheld upon the exercise of such Stock
Option and the Company shall, to the extent permitted or required by law, have the right
to deduct from any payment of any kind otherwise due to the Optionee, federal, state and
local taxes of any kind required by law to be withheld upon the exercise of such Stock
Option.
13. Notices. All notices and other communications under this
Agreement shall be in writing and shall be given by hand delivery to the other party or by
facsimile, overnight courier, or registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Optionee:
[name]
[address]
[address]
If to the Company:
Attn: Office of the Controller
Intellect Neurosciences, Inc.
0 Xxxx 00xx Xxxxxx, 0xx xxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Intellect Neurosciences, Inc.
0 Xxxx 00xx Xxxxxx, 0xx xxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or to such other address or facsimile number as any party shall have furnished to the
other in writing in accordance with this Section 13. Notice and communications shall be
effective when actually received by the addressee.
14. Effect of Agreement. Except as otherwise provided hereunder, this
Agreement shall be binding upon and shall inure to the benefit of any successor or
successors of the Company, and to any transferee or successor of the Optionee pursuant
to Section 6.
15. Laws Applicable to Construction. The interpretation, performance
and enforcement of this Agreement shall be governed by the laws of the State of
Delaware without reference to principles of conflict of laws, as applied to contracts
executed in and performed wholly within the State of Delaware.
16. Severability. The invalidity or enforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other provision of this
Agreement. If the final judgment of a court of competent jurisdiction declares that any
provision of this Agreement is invalid or unenforceable, the parties hereto agree that the
court making the determination of invalidity or unenforceability shall have the power,
and is hereby directed, to reduce the scope, duration or area of the provision, to
delete specific words or phrases and to replace any invalid or unenforceable provision with a
provision that is valid and enforceable and that comes closest to expressing the intention of the
invalid or unenforceable provision and this Agreement shall be
enforceable as so modified.
17. Conflicts and Interpretation. This Agreement is subject to all the
terms, conditions and provisions of the Plan. In the event of any conflict between this
Agreement and the Plan, the Plan shall control. In the event of any ambiguity in this
Agreement, any term that is not defined in this Agreement, or any matters as to which
this Agreement is silent, the Plan shall govern, including, without limitation, the
provisions thereof pursuant to which the Committee has the power, among others, to (i)
interpret the Plan, (ii) prescribe, amend and rescind rules and regulations relating to the
Plan and (iii) make all other determinations deemed necessary or advisable for the
administration of the Plan.
18. Headings. The headings of Sections herein are included solely for
convenience of reference and shall not affect the meaning or interpretation of any of the
provisions of this Agreement.
19. Amendment. This Agreement may not be modified, amended or
waived except by an instrument in writing signed by both parties hereto. The waiver by
either party of compliance with any provision of this Agreement shall not operate or be
construed as a waiver of any other provision of this Agreement, or of any subsequent
breach by such party of a provision of this Agreement.
20. Term. The term of this Agreement is ten years from the date of
grant, unless terminated prior to such date in accordance with the provisions
herein.
21.
Counterparts. This Agreement may be executed in counterparts,
which together shall constitute one and the same original.
IN WITNESS WHEREOF, as of the date first above written, the Company has caused this Agreement to be
executed on its behalf by a duly authorized officer and the Optionee has hereunto set the
Optionee’s hand.
| INTELLECT NEUROSCIENCES, INC | ||||
| /s/ Xxxxxx Xxxx | ||||
| By: Xxxxxx Xxxx, CFO | ||||
| [employee signature] | ||||
| Employee |
