AURIGA LABORATORIES, INC.
THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE, AND MAY BE OFFERED
AND SOLD ONLY IF REGISTERED AND QUALIFIED PURSUANT TO THE RELEVANT PROVISIONS
OF
FEDERAL AND STATE SECURITIES LAWS OR IF THE COMPANY IS PROVIDED AN OPINION
OF
COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION AND QUALIFICATION UNDER
FEDERAL AND STATE SECURITIES LAWS IS NOT REQUIRED.
2008
Omnibus Stock Grant and Option Plan
Auriga
Laboratories, Inc. (the “Company”), hereby grants an Option to purchase shares
of its common stock (“Shares”) to the Optionee named below. The terms and
conditions of the Option are set forth in this cover sheet, in the attachment
and in the Company’s 2008 Omnibus Stock Grant and Option Plan (the
“Plan”).
Date
of
Grant: ___________________________
Name
of
Optionee: ___________________________
Optionee’s
Social Security Number: ___________________________
Number
of
Shares Covered by Option: ___________________________
Exercise
Price per Share: $___________________________
Vesting
Start Date: ___________________________
| o |
Check
here if Optionee is a 10% owner (so that exercise price must be 100%
of
fair market value).
|
By
signing this cover sheet, you agree to all of the terms and conditions described
in the attached Agreement and in the Plan, a copy of which is also
attached.
|
Optionee:
|
||
|
(Signature)
|
||
|
Company:
|
||
|
(Signature)
|
||
|
Title:
|
|
-
1
-
THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE, AND MAY BE OFFERED
AND SOLD ONLY IF REGISTERED AND QUALIFIED PURSUANT TO THE RELEVANT PROVISIONS
OF
FEDERAL AND STATE SECURITIES LAWS OR IF THE COMPANY IS PROVIDED AN OPINION
OF
COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION AND QUALIFICATION UNDER
FEDERAL AND STATE SECURITIES LAWS IS NOT REQUIRED.
2008
Omnibus Stock Grant and Option Plan
|
Nonstatutory
Stock Option
|
This
Option is not intended to be an incentive stock option under section
422
of the Internal Revenue Code and will be interpreted
accordingly.
|
|
Vesting
|
No
Shares will vest until you have performed _______ (____) months of
Service
from the commencement of your employment with the Company. Your Option
shall vest as to _______ of the Shares on the date _______ (____)
months
from the Vesting Start Date as shown on the cover sheet. Thereafter,
Shares shall vest at the rate of ________ of the Shares at the end
of each
full month thereafter. After you have completed ________ (____) months
of
Service, the number of Shares which vest under this Option at the
Exercise
Price shall be equal to the product of the number of full months
of your
continuous employment with the Company (“Service”) (including any approved
leaves of absence) from the Vesting Start Date times the number of
Shares
covered by this Option times ________. The resulting number of Shares
will
be rounded to the nearest whole number. No additional Shares will
vest
after your Service has terminated for any reason.
You
should note that you may exercise the Option prior to vesting. In
that
case, the Company has a right to repurchase the unvested shares at
the
original exercise price if you terminate employment before vesting
in all
shares you purchased. Also, if you exercise before vesting, you should
consider making an 83(b) election. Please see the attached Tax Summary.
The
83(b) election must be filed within thirty (30) days of the date
you
exercise.
|
|
Term
|
Your
Option will expire in any event at the close of business at Company
headquarters on the day before the tenth anniversary of the Date
of Grant,
as shown on the cover sheet. (It will expire earlier if your Service
terminates, as described below.)
|
-
2
-
|
Regular
Termination
|
If
your Service terminates for any reason except death, Disability,
or for
“Cause” your Option will expire at the close of business at Company
headquarters on the 30th day after your termination date. During
such
30-day period, you may exercise that portion of your Option that
was
vested on your termination date.
|
|
Death
|
If
you die while in Service with the Company, your Option will expire
at the
close of business at Company headquarters on the date six (6) months
after
the date of death. During that six-month period, your estate or heirs
may
exercise that portion of your Option that was vested on your date
of
death.
|
|
Disability
|
If
your Service terminates because of your Disability, your Option will
expire at the close of business at Company headquarters on the date
six
(6) months after your termination date. During that six-month period,
you
may exercise that portion of your Option that was vested on your
date of
Disability.
“Disability”
means that you are unable to engage in any substantial gainful activity
by
reason of any medically determinable physical or mental
impairment.
|
|
Leaves
of Absence
|
For
purposes of this Option, your Service does not terminate when you
go on a
bona
fide
leave of absence that was approved by the Company in writing, if
the terms
of the leave provide for continued service crediting, or when continued
service crediting is required by applicable law. However, your Service
will be treated as terminating thirty (30) days after you went on
leave,
unless your right to return to work is guaranteed by law or by a
contract.
Your service terminates in any event when the approved leave ends
unless
you immediately return to Service. The Company determines which leaves
count for this purpose, and when your Service terminates for all
purposes
under the Plan. The Company also determines the extent to which you
may
exercise the vested portion of your Option during a leave of
absence.
|
|
Notice
of Exercise
|
When
you wish to exercise this Option, you must execute Exhibit
A
(and if exercise is prior to vesting you must also execute Exhibits
B and D).
Your Exercise will be effective when it is received by the Company.
If
someone else wants to exercise this Option after your death, that
person
must prove to the Company’s satisfaction that he or she is entitled to do
so.
|
|
Form
of Payment
|
When
you submit Exhibit
A,
you must include payment of the Exercise Price for the Shares you
are
purchasing. Payment may be made in one (or a combination) of the
following
forms at the discretion of the committee:
· Your
personal check, a cashier’s check or a money order.
· Shares
which you have owned for six (6) months and which are surrendered
to the
Company. The value of the Shares, determined as of the effective
date of
the Option exercise, will be applied to the Exercise
Price.
|
-
3
-
|
· To
the extent that a public market for the Shares exists as determined
by the
Company, by delivery (on a form prescribed by the Committee) of an
irrevocable direction to a securities broker to sell Shares and to
deliver
all or part of the sale proceeds to the Company in payment of the
aggregate Exercise Price.
· Any
other form of legal consideration approved by the
Committee.
|
|
|
Withholding
Taxes
|
You
will not be allowed to exercise this Option unless you make acceptable
arrangements to pay any withholding or other taxes that may be due
as a
result of the Option exercise or the sale of Shares acquired upon
exercise
of this Option.
|
|
Restrictions
on Resale
|
By
signing this Agreement, you agree not to exercise this Option or
sell any
Shares acquired upon exercise of this Option at a time when applicable
laws, regulations or Company or underwriter trading policies prohibit
exercise or sale. In particular, the Company shall have the right
to
designate one or more periods of time, each of which shall not exceed
one
hundred eighty (180) days in length, during which this Option shall
not be
exercisable if the Company determines (in its sole discretion) that
such
limitation on exercise could in any way facilitate a lessening of
any
restriction on transfer pursuant to the Securities Act or any state
securities laws with respect to any issuance of securities by the
Company,
facilitate the registration or qualification of any securities by
the
Company under the Securities Act or any state securities laws, or
facilitate the perfection of any exemption from the registration
or
qualification requirements of the Securities Act or any applicable
state
securities laws for the issuance or transfer of any securities. Such
limitation on exercise shall not alter the vesting schedule set forth
in
this Agreement other than to limit the periods during which this
Option
shall be exercisable.
Furthermore,
in respect of any underwritten public offering by the Company, you
agree
that you will not sell or otherwise transfer or dispose of any Shares
covered by this Option during a reasonable and customary period of
time as
agreed to by the Company and the underwriters, not to exceed the
greater
of (a) one hundred eighty (180) days following the effective date
of the
registration statement of the Company filed under the Securities
Act in
respect of such offering and (b) such other period of time as agreed
to by
holders of a majority of the then outstanding Shares. By signing
this
Agreement you agree to execute and deliver such other agreements
as may be
reasonably requested by the Company or the underwriter which are
consistent with the foregoing or which are necessary to give further
effect thereto. The Company may impose stop-transfer instructions
with
respect to the Shares subject to the foregoing restriction until
the end
of such period.
|
-
4
-
|
If
the sale of Shares under the Plan is not registered under the Securities
Act of 1933, as amended (the “Securities Act”), but an exemption is
available which requires an investment or other representation, you
shall
represent and agree at the time of exercise that the Shares being
acquired
upon exercise of this Option are being acquired for investment, and
not
with a view to the sale or distribution thereof, and shall make such
other
representations as are deemed necessary or appropriate by the Company
and
its counsel.
|
|
|
The
Company’s Right of First Refusal
|
In
the event that you propose to sell, pledge or otherwise transfer
to a
third party any Shares acquired under this Agreement, or any interest
in
such Shares, the Company shall have the “Right of First Refusal” with
respect to all (and not less than all) of such Shares. If you desire
to
transfer Shares acquired under this Agreement, you must give a written
“Transfer Notice” to the Company describing fully the proposed transfer,
including the number of Shares proposed to be transferred, the proposed
transfer price and the name and address of the proposed transferee.
The
Transfer Notice shall be signed both by you and by the proposed transferee
and must constitute a binding commitment of both parties to the transfer
of the Shares.
The
Company and its assignees shall have the right to purchase all, and
not
less than all, of the Shares on the terms described in the Transfer
Notice
(subject, however, to any change in such terms permitted in the next
paragraph) by delivery of a notice of exercise of the Right of First
Refusal within thirty (30) days after the date when the Transfer
Notice
was received by the Company.
The
Company’s rights under this Subsection shall be freely assignable, in
whole or in part.
If
the Company fails to exercise its Right of First Refusal within thirty
(30) days after the date when it received the Transfer Notice, you
may,
not later than sixty (60) days following receipt of the Transfer
Notice by
the Company, conclude a transfer of the Shares subject to the Transfer
Notice on the terms and conditions described in the Transfer Notice.
Any
proposed transfer on terms and conditions different from those described
in the Transfer Notice, as well as any subsequent proposed transfer
by
you, shall again be subject to the Right of First Refusal and shall
require compliance with the procedure described in the paragraph
above. If
the Company exercises its Right of First Refusal, you and the Company
(or
its assignees) shall consummate the sale of the Shares on the terms
set
forth in the Transfer Notice.
The
Company’s Right of First Refusal shall inure to the benefit of its
successors and assigns and shall be binding upon any transferee of
the
Shares.
|
-
5
-
|
Right
of Repurchase
|
Following
termination of your Service for any reason, the Company shall have
the
right to purchase all of those vested Shares that you have or will
acquire
under this Option (unvested Shares which have been exercised are
subject
to a Repurchase Option set forth in Exhibit
A).
If the Company fails to provide you with written notice of its intention
to purchase such Shares before or within thirty (30) days of the
date the
Company receives written notice from you of your termination of Service,
the Company’s right to purchase such Shares shall terminate. If the
Company exercises its right to purchase such Shares, the Company
will
consummate the purchase of such Shares within sixty (60) days of
the date
of its written notice to you. The purchase price for any Shares
repurchased shall be the higher of the fair market value of the Shares
on
the date of purchase or the aggregate Exercise Price for such Shares
and
shall be paid in cash. The Company’s right of repurchase shall terminate
in the event that Stock is listed on an established stock exchange
or is
quoted regularly on the Nasdaq National Market. The fair market value
shall be determined by the Board of Directors in its sole
discretion.
|
|
Transfer
of Option
|
Prior
to your death, only you may exercise this Option. You cannot transfer
or
assign this Option. For instance, you may not sell this Option or
use it
as security for a loan. If you attempt to do any of these things,
this
Option will immediately become invalid. You may, however, dispose
of this
Option in your will.
Regardless
of any marital property settlement agreement, the Company is not
obligated
to honor a Notice of Exercise from your spouse or former spouse,
nor is
the Company obligated to recognize such individual’s interest in your
Option in any other way.
|
|
Retention
Rights
|
This
Agreement does not give you the right to be retained by the Company
in any
capacity. The Company reserves the right to terminate your Service
at any
time and for any reason.
|
|
Shareholder
Rights
|
Neither
you, nor your estate or heirs, have any rights as a shareholder of
the
Company until a certificate for the Shares acquired upon exercise
of this
Option has been issued. No adjustments are made for dividends or
other
rights if the applicable record date occurs before your stock certificate
is issued, except as described in the Plan.
|
|
Adjustments
|
In
the event of a stock split, a stock dividend or a similar change
in the
Company Stock, the number of Shares covered by this Option and the
Exercise Price per share may be adjusted pursuant to the Plan. Your
Option
shall be subject to the terms of the agreement of merger, liquidation
or
reorganization in the event the Company is subject to such corporate
activity.
|
|
Legends
|
All
certificates representing the Shares issued upon exercise of this
Option
shall, where applicable, have endorsed thereon the following
legends:
|
-
6
-
|
“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AND OPTIONS TO PURCHASE SUCH SHARES SET
FORTH IN
AN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER, OR SUCH
HOLDER’S PREDECESSOR IN INTEREST. SUCH AGREEMENT IMPOSES CERTAIN TRANSFER
RESTRICTIONS AND GRANTS CERTAIN REPURCHASE RIGHTS TO THE COMPANY
(OR ITS
ASSIGNS) UPON THE SALE OF THE SHARES OR UPON TERMINATION OF SERVICE
WITH
THE COMPANY. A COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL
OFFICE
OF THE COMPANY AND WILL BE FURNISHED UPON WRITTEN REQUEST TO THE
SECRETARY
OF THE COMPANY BY THE HOLDER OF SHARES REPRESENTED BY THIS
CERTIFICATE.
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER
THE SECURITIES ACT OF 1933, OR THE SECURITIES LAWS OF ANY STATE,
AND MAY
BE OFFERED AND SOLD ONLY IF REGISTERED AND QUALIFIED PURSUANT TO
THE
RELEVANT PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS OR IF THE
COMPANY
IS PROVIDED AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND
ITS
COUNSEL, THAT REGISTRATION AND QUALIFICATION UNDER FEDERAL AND STATE
SECURITIES LAWS IS NOT REQUIRED.”
|
|
|
Applicable
Law
|
This
Agreement will be interpreted and enforced under the laws of the
State of
California (without regard to their choice of law
provisions).
|
|
The
Plan and Other Agreements
|
The
text of the Plan is incorporated in this Agreement by reference.
Certain
capitalized terms used in this Agreement are defined in the
Plan.
This
Agreement and the Plan constitute the entire understanding between
you and
the Company regarding this Option. Any prior agreements, commitments
or
negotiations concerning this Option are
superseded.
|
By
signing the cover sheet of this Agreement, you agree to all of the terms and
conditions described above and in the Plan. You also acknowledge that you have
read Section 11, “Purchaser’s Investment Representations” of Attachment A and
that you can and hereby do make the same representations with respect to the
grant of this Option.
-
7
-
