EXHIBIT 10.42
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED 1992 STOCK OPTION PLAN
INCENTIVE STOCK OPTION
AGREEMENT entered into by and between Life Medical Sciences, Inc., a
Delaware corporation, with a principal place of business at 000 Xxxxxxxx Xxxxxx
xx Xxxxxxxxx, Xxx Xxxxxx (the "Company"), and the undersigned employee of the
Company (or one of its subsidiaries) (the Company and its subsidiaries
hereinafter together referred to as the "Company"), (said employee hereinafter
referred to as the "Optionee"), this 17th day of July, 1995.
1. The Company desires to grant the Optionee an incentive stock option
under the Company's Amended and Restated 1992 Stock Option Plan (the "Plan") to
acquire Shares of the Company's Common Stock, .001 par value (the "Shares").
2. The Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
ACCORDINGLY, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option.
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The Company hereby grants to the Optionee an incentive stock option (the
"Option") to purchase all or any part of an aggregate of 30,000 Shares on the
terms and conditions hereinafter set forth. This option shall be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
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The purchase price ("Purchase Price") for the Shares covered by the Option
shall be $ 6.88 per share.
3. Time of Vesting and Exercise of Option.
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The Option shall vest and become exercisable in three equal installments,
the first of which shall vest and become exercisable on the date hereof and the
remaining two of which shall vest and become exercisable on the first and second
anniversaries of that date hereof, respectively.
4. Term of Options; Exercisability.
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(a) Term.
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(i) The Option shall expire as to each installment five (5) years from
the date such installment shall first become exercisable but shall be subject to
earlier termination as herein provided.
(ii) Except as otherwise provided in this Section 4, if the Optionee
ceases to be an employee of the Company, the Option granted to the Optionee
hereunder shall terminate on the earlier of the last day of the month or thirty
days after the date such Optionee ceases to be an employee of the company, or on
the date on which the Option expires by its terms, whichever occurs first;
provided, however, (i) the Optionee ceases to be an employee of the Company on
account of his voluntary resignation and (ii) within thirty (30) days after such
resignation, the Board of Directors of the Company determines in good faith that
termination for Cause (as defined herein) would have been warranted based on
information that becomes known to the Company, then the Option shall terminate
on the date the Optionee voluntarily resigns from the Company. The Company shall
have the right to postpone any exercise of this Option for a period of up to
thirty (30) days following voluntary resignation by the Optionee.
(iii) If the Optionee's employment is terminated because
of dismissal for Cause (as defined herein) or because the Optionee is in breach
of any employment agreement, such Option will terminate on the date the Optionee
ceases to be an employee of the Company. "Cause" means any gross malfeasance or
conviction of a felony, in either case directly and materially affecting the
Company. The determination of "Cause" shall be made in good faith by the
Company's Board of Directors (whose determination shall be final) with a written
explanation thereof provided to the Optionee.
(iv) If the Optionee's employment is terminated because the Optionee
has become permanently disabled as defined in the Optionee's employment
agreement with the Company of even date herewith, such Option shall terminate on
the last day of the twelfth month from the date such Optionee ceases to be an
employee due to such disability, or on the date on which the Option expires by
its terms, whichever occurs first.
(v) In the event of the death of the Optionee, the Option granted to
such Optionee shall terminate on the last day of the twelfth month from the date
of death, or on the date on which the Option expires by its terms, whichever
occurs first.
(b) Exercisability.
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(i) Except as provided below, if the Optionee ceases to be an employee
of the Company, the Option granted to the Optionee hereunder shall be
exercisable only to the extent that the right to purchase Shares under such
Option has accrued and is in effect on
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the date such Optionee ceases to be an employee of the Company. No partial
exercise may be made for less than one hundred (100) full Shares of Common Stack
(ii) If the Optionee ceases to be an employee of the Company because
he or she has become permanently disabled, as defined above, the Option granted
to the Optionee hereunder shall be exercisable to the full number of Shares
covered by such Option.
(iii) In the event of the death of the Optionee, the
Option granted to such Optionee may be exercised, to the full number of Shares
covered thereby, whether or not under the provisions of Section 3 hereof the
Optionee was entitled to do so at the date of his or her death. by the estate of
such Optionee, or by any person or persons who acquired the right to exercise
such Option by bequest or inheritance or by reason of the death of such
Optionee.
5. Manner of Exercise of Option.
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(a) To the extent that the right to exercise the Option has accrued and
is in effect, the Option may be exercised in full or in part by giving written
notice to the Company stating the number of Shares exercised and accompanied by
payment in full for such Shares. Upon such exercise, delivery of a certificate
of paid-up, non-assessable Shares shall be made at the principal office of the
Company to the person exercising the Option, not less than thirty (30) and not
more than ninety (90) days from the date of receipt of the notice by the
Company.
(b) The Company shall at all times during the term of the Option
reserve and keep available such number of Shares of its Common Stock as will be
sufficient to satisfy the requirements of the Option. The Optionee shall not
have any of the rights of a stockholder of the company in respect of the Shares
until one or more certificates for such Shares shall be delivered to him or her
upon due exercise of the Option.
6. Non-Transferability.
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The right of the Optionee to exercise the Option shall not be
assignable or transferable by the Optionee otherwise than by will or the laws of
descent and distribution, and the Option may be exercised during the lifetime of
the Optionee only by him or her. The Option shall be null and void and without
effect upon the bankruptcy of the Optionee or upon any attempted assignment or
transfer. except as hereinbefore provided, including without limitation any
purported assignment, whether voluntary or by operation of law, pledge,
hypothecation or other disposition contrary to the provisions hereof, or levy of
execution, attachment, trust process or similar process, whether legal or
equitable, upon the Option.
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7. Representation Letter and Investment Legend.
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In the event that for any reason the Shares to be issued upon exercise
of the Option shall not be effectively registered under the Securities Act of
1933 (" 1933 Act"), upon any date on which the Option is exercised in whole or
in part, the person exercising the Option shall give a written representation to
the Company in the form attached hereto as Exhibit 1 and the Company shall place
an "investment legend", so-called, as described in Exhibit 1, upon any
certificate for the Shares issued by reason of such exercise.
8. Adjustments on Changes in Capitalization.
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Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Agreement.
9. No Special Employment Rights.
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Nothing contained in the Plan or this Agreement shall be construed or
deemed by any person under any circumstances to bind the Company to continue the
employment of the Optionee for the period within which this Option may be
exercised. However, during the period of the Optionee's employment, the Optionee
shall render diligently and faithfully the services which are assigned to the
Optionee from time to time by the Board of Directors or by the executive
officers of the Company and shall at no time take any action which directly or
indirectly would be inconsistent with the best interests of the Company.
10. Rights as a Stockholder.
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The Optionee shall have no rights as a stockholder with respect to any
Shares which may be purchased by exercise of this Option unless and until a
certificate or certificates representing such Shares are duly issued and
delivered to the Optionee. Except as otherwise expressly provided in the Plan,
no adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.
11. Withholding Taxes.
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Whenever Shares are to be issued upon exercise of this Option, the
Company shall have the right to require the Optionee to remit to the Company an
amount sufficient to satisfy all Federal, state and local withholding tax
requirements prior to the delivery of any certificate or certificates for such
Shares. The Company may agree to permit the Optionee to withhold Shares of
Common Stock purchased upon exercise of an option to satisfy the above-mentioned
withholding requirement; provided, however, no such agreement may be made by an
Optionee who is an officer or director within the meaning of Section 16 of the
Securities Exchange Act of 1934, as amended, except pursuant to a standing
election to so withhold Shares of Common Stock purchased upon exercise of an
option, such election to be made in the form set forth in
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Exhibit 2 hereto and to be made not less than six (6) months prior to such
exercise. Such election may be revoked only upon six (6) months prior written
notice to the Company.
12. Entire Agreement.
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This agreement reflects the parties' entire agreement with respect to
the subject matter hereof and supersedes any agreement relating thereto
including, without limitation, the employment agreement of even date herewith
between the parties hereto.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed.
and the Optionee has hereunto set his or her hand and seal. all as of the day
and year first above written.
LIFE MEDICAL SCIENCES, INC.
By: s/ Xxxxxxx Xxxxxxxxx
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Title:
OPTIONEE
s/ Xxxxxx Xxxxxx
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Signature
Xxxxxx Xxxxxx, Chief Financial Officer
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Print Name
0000 Xxxxxx Xxxx Xxxxx
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Xxxxxxx, Xxxxxxxxxxxx 00000
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Address
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Social Security Number
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EXHIBIT 1
TO STOCK OPTION AGREEMENT
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Gentlemen:
In connection with the exercise by me as to Shares of Common Stock, .001
par value, of Life Medical Sciences, Inc. (the "Company") under the Incentive
Stock Option Agreement dated hereunder granted to me under the Amended and
Restated 1992 Stock Option Plan, I hereby acknowledge that I have been informed
as follows:
1. The Shares of Common Stock of the Company to be issued to me pursuant
to the exercise of said option have not been registered under the 1933 Act, and
accordingly, must be held indefinitely unless such Shares are subsequently
registered under the 1933 Act, or an exemption from such registration is
available.
2. Routine sales of securities made in reliance upon Rule 144 under the
1933 Act can be made only after the holding period provided by that Rule, and in
any sale to which that Rule is not applicable, registration or compliance with
some other exemption under the 1933 Act will be required.
3. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.
In consideration of the issuance of certificates for the Shares to me, I
hereby represent and warrant that I am acquiring such Shares for my own account
for investment, and that I will not sell, pledge or transfer such Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the 1933 Act. In view of this representation and warranty, I
agree that there may be affixed to the certificates for the Shares to be issued
to me, and to all certificates issued hereafter representing such Shares (until
in the opinion of counsel, which opinion must be reasonably satisfactory in form
and substance to counsel for the Company, it is no longer necessary or required)
a legend as follows:
"The Shares of Common Stock represented by this certificate have not been
registered under the Federal Securities Act of 1933, as amended, and were
acquired by the registered holder pursuant to a representation and warranty
that such holder was acquiring such Shares for his own account and for
investment, with no intention of transferring or disposing of the same in
violation of the registration requirements of that Act. These Shares may
not be sold, pledged, or transferred in the absence of an effective
registration statement under such Act, or
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an opinion of counsel, which opinion is reasonably satisfactory to counsel
to the Company, to the effect that registration is not required under such
act."
I further agree that the Company may place a stop order with its Transfer
Agent, prohibiting the transfer of such Shares, so long as the legend remains on
the certificates representing the Shares.
Very truly yours,
s/ Xxxxxx X. Xxxxxx Dated: 7/17/95
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Xxxxxx X. Xxxxxx
Chief Financial Officer
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EXHIBIT 2
TO STOCK OPTION AGREEMENT
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Gentlemen:
The undersigned Optionee hereby elects and agrees that, whenever the
undersigned exercises a stock option (including any options which now or may
hereafter be granted), the Company shall withhold from that exercise such number
of Shares equal in value to the Federal and state withholding taxes due upon
such exercise. The undersigned further acknowledges and agrees that this
election may not be revoked without six (6) months prior written notice to the
Company.
OPTIONEE:
s/ Xxxxxx X. Xxxxxx
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Signature
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Xxxxxx X. Xxxxxx
Chief Financial Officer
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Social Security Number
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