etrials Worldwide, Inc. INCENTIVE STOCK OPTION AGREEMENT
Exhibit 99.3
111108
etrials
Worldwide, Inc.
THIS INCENTIVE STOCK OPTION
AGREEMENT, made and entered into as of the 12th day of November, 2008 (the
"Grant
Date"), by and between etrials Worldwide, Inc., a Delaware corporation
(the “Corporation”),
and Xxxxxxx Xxxxx Xxxxxxxxx (the “Participant”). Capitalized
terms used herein shall have the meanings set out in the Plan (defined below)
unless otherwise specified in this Agreement.
WHEREAS,
the committee (the “Committee”)
appointed under the etrials Worldwide, Inc. 2005 Performance Equity Plan
(the “Plan”)
granted Participant an option to purchase shares of the Corporation’s common
stock, $0.0001 par value per share (the “Common
Stock”) pursuant to the Plan; and
WHEREAS,
this Agreement evidences the grant of such option; and
WHEREAS,
the grant of options evidenced by this Agreement was made subject to the
condition that the Participant execute and deliver to the Corporation an
Employment Agreement in form and substance acceptable to the Corporation (the
“Employment
Agreement”).
NOW, THEREFORE, in consideration of the
foregoing, of the mutual promises set forth below and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, agree as follows:
1. Grant of
Option. Subject to the terms and conditions set forth in this
Agreement, the Board hereby grants Participant the Option to purchase from the
Corporation, during the period specified in Section 2 of this Agreement, a total
of 350,000 shares of Common Stock, at the purchase price of $1.10 per share (the
“Purchase
Price”), in accordance with the terms and conditions of this Agreement
and the Plan. The shares of Common Stock subject to the Option
granted hereby are referred to below as the “Shares.” This
Agreement shall be of no force or effort, and shall be invalid, until and unless
the Corporation and Participant sign and deliver the Employment Agreement in
form and substance acceptable to the Corporation.
2. Vesting and Exercise of
Option.
(a) The
Option shall vest and become exercisable in sixteen (16) equal increments of 21,
875 shares on the 12th day of February, May, August and November, commencing on
February 12, 2009 and thereafter until November 12, 2012, with respect to an
increment as specified only if Participant is providing services to the
Corporation on the specified date for such increment.
(b) The
schedule set forth above is cumulative, so that Shares as to which the Option
has become vested and exercisable on and after a date indicated by the schedule
may be purchased pursuant to exercise of the Option at any subsequent date prior
to termination of the Option. The Option may be exercised at any time
and from time to time to purchase up to the number of Shares as to which it is
then vested and exercisable.
(c) The
provisions of Section 5.2(h) and of Section 10 of the Plan shall apply to the
Option.
3. Termination of
Option. The Option shall remain exercisable as specified in
Section 2 above until the earliest to occur of
the dates specified below, upon which date the Option shall
terminate:
(a) the
date all of the Shares are purchased pursuant to the terms of this
Agreement;
(b) if
Participant was an employee of the Corporation upon the date hereof, upon the
expiration of ninety (90) days following the Termination of Employment (as
hereafter defined) of Participant for any reason other than Normal Retirement,
provided that in the event of the Participant’s death or Disability during such
ninety (90) day period, the Option shall remain exercisable until the expiration
of ninety (90) days following the Participant’s death or
Disability;
(c) if
Participant was a director or consultant of the Corporation upon the date
hereof, upon the expiration of ninety (90) days following the Participant
ceasing to have such status for any reason other than Normal Retirement,
provided that in the event of the Participant’s death or Disability during such
ninety (90) day period the Option shall remain exercisable until ninety (90)
days following the Participant’s death or Disability;
(d) at
5:00 P.M., eastern standard time, on the date specified in any notice issued to
Participant pursuant to Section 10.2 of the Plan, if an acquisition event
of the type described in Section 10.2 of the Plan has occurred and the Committee
has (i) authorized an acceleration of the vesting of the Option and (ii)
complied with the tender and Repurchase Value procedures set forth
thereunder;
(e) if
the Participant’s employment or service with the Corporation terminated as a
result of Normal Retirement, upon the expiration of three (3) years
following the date of either (i) such Termination of Employment or service, as
applicable, or (ii) the balance of the Option term, whichever is earlier;
or
(f) the
ten (10) year anniversary of the Grant Date at 5:00 P.M., eastern
standard time.
Upon its
termination, the Option shall have no further force or effect and Participant
shall have no further rights under the Option or to any Shares which have not
been purchased pursuant to prior exercise of the Option. For purposes
of this Agreement, “Termination of
Employment” shall mean termination of any consulting or employment
relationship of Participant with the Corporation for any reason other than
Normal Retirement, including, without limitation, death, disability,
voluntary termination, involuntary termination, dismissal with or without cause
or resignation.
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4. Acceleration of
Option.
(a) Notwithstanding
anything to the contrary contained herein, if, in the event of a Termination of
Employment pursuant to Sections 4(a) (other than a Termination of Employment
without cause upon any Change of Control, which shall be solely governed by
Section 4(b) below), 4(d) or 4(e) of the Employment Agreement, or due to Normal
Retirement, then all of Participant's Option that remains unvested at the time
of such termination shall automatically accelerate, become vested and be
available for exercise by the Participant for a period of ninety (90) days
following such termination of employment.
(b) In
the event of Participant's Termination of Employment by the Corporation without
cause (as cause is determined pursuant to Section 4 of the Employment Agreement)
at any time upon or within six (6) months following the date of a Change of
Control of the Corporation, then 50% of Participant's Option that remains
unvested at the time of such termination shall automatically accelerate, become
vested and be available for exercise by the Participant for a period of ninety
(90) days following such termination of employment.
A “Change in
Control” shall be deemed to have occurred if, (i) the direct or
indirect beneficial ownership (within the meaning of Section 13(d) of the
Securities Exchange Act of 1934, as amended (the "Act"), and
Regulation 13D thereunder) of fifty percent (50%) or more of the class of
securities then subject to this Agreement is acquired or becomes held by any
person or group of persons (within the meaning of Section 13(d)(3) of the
Act), but excluding the Corporation and any employee benefit plan sponsored or
maintained by the Corporation; (ii) a capital reorganization, merger or
consolidation involving the Corporation, unless (A) the transaction
involves only the Corporation and one or more of the Corporation’s parent
corporation and wholly-owned (excluding interests held by employees, officers
and directors) subsidiaries; or (B) the shareholders who had the power to
elect a majority of the board of directors of the Corporation immediately prior
to the transaction have the power to elect a majority of the board of directors
of the surviving entity immediately following the transaction; or (iii) the
sale of all or substantially all of the assets of the Corporation to another
corporation, person or business entity.
5. Manner of Exercise of
Option.
(a) The
Option may be exercised only by (i) Participant’s completion, execution and
delivery to the Corporation of a notice of exercise and, if required by the
Corporation, an “investment letter” as supplied by the Corporation confirming
Participant’s representations and warranties in Section 14 of this
Agreement, including the representation that Participant is acquiring the Shares
for investment only and not with a view to the resale or other distribution
thereof, and (ii) the payment to the Corporation, pursuant to the terms of
this Agreement, of an amount equal to the Purchase Price multiplied by the
number of Shares being purchased as specified in Participant’s notice of
exercise. Participant’s notice of exercise shall be given in the
manner specified in Section 10 but any exercise of the Option shall be
effective only when the items required by the preceding sentence are actually
received by the Corporation. The notice of exercise and the
“investment letter” may be in the form set forth in Exhibit A attached to
this Agreement. Payment of the aggregate Purchase Price for Shares
Participant has elected to purchase shall be made by cash or bank
check. Notwithstanding anything to the contrary in this Agreement,
the Option may be exercised only if compliance with all applicable federal and
state securities laws can be effected.
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(b) Subject
to the provisions of the Plan, upon any exercise of the Option by Participant or
as soon thereafter as is practicable, the Corporation shall issue and deliver to
Participant a certificate or certificates evidencing such number of Shares as
Participant has then elected to purchase. Such certificate or
certificates shall be registered in the name of Participant and shall bear any
legend required by any federal or state securities laws including, to the extent
required or deemed advisable by the Corporation or its counsel, a legend
indicating that the transfer or encumbrance of the Shares is restricted pursuant
to the Securities Act of 1933, as amended.
6. Rights Prior to
Exercise. Participant will have no rights as a shareholder
with respect to the Shares except to the extent that Participant has exercised
the Option and has been issued and received delivery of a certificate or
certificates evidencing the Shares so purchased.
7. Engagement of
Participant. Nothing in this Agreement shall be construed as
constituting a commitment, guarantee, agreement or understanding of any kind or
nature that the Corporation shall continue to employ Participant, nor shall this
Agreement affect in any way the right of the Corporation to terminate the
employment of Participant at any time and for any reason. By
Participant’s execution of this Agreement, Participant acknowledges and agrees
Participant’s employment is "at-will" unless otherwise set forth in the
Employment Agreement, or any future employment agreement, between the
Corporation and the Participant. No change of Participant’s duties as
an employee of the Corporation shall result in, or be deemed to be, a
modification of any of the terms of this Agreement.
8. Burden and Benefit;
Corporation. This Agreement shall be binding upon, and shall
inure to the benefit of, the Corporation and Participant, and their respective
heirs, personal and legal representatives, successors and assigns. As
used in this Section 8 as well as in Sections 2 and 3, the term the
“Corporation”
shall also include any corporation which is the parent or a subsidiary of the
Corporation or any corporation or entity which is an affiliate of the
Corporation by virtue of common (although not identical) ownership, and for
which Participant is providing services in any form during Participant’s
employment with the Corporation or any such other corporation or
entity. Participant hereby consents to the enforcement of any and all
of the provisions of this Agreement by or for the benefit of the Corporation and
any such other corporation or entity.
9. Entire Agreement; Authority
of Committee. This Agreement, together with the Employment
Agreement, contains the entire agreement between the parties with respect to the
subject matter hereof and supersedes all prior agreements or understandings,
oral or written, with respect to the subject matter
herein. Participant agrees that the terms of this Agreement govern
only the Option granted herein, and any options to purchase shares of the
Corporation granted to Participant prior to the date hereof shall be governed by
the Plan and any agreements entered into between Participant and the Corporation
for the granting thereof. Participant accepts the Option in full
satisfaction of any and all obligations of the Corporation to grant stock
options to Participant as of the date hereof. All determinations made
by the Committee with respect to the interpretation, construction and
application of any provision of this Agreement shall be final, conclusive and
binding on the parties.
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10. Notices. Any
and all notices under this Agreement shall be in writing, and sent by hand
delivery or by certified or registered mail (return receipt requested and
first-class postage prepaid), in the case of the Corporation, to its principal
executive offices to the attention of the President, and, in the case of
Participant, to Participant’s address as shown on the Corporation’s
records.
11. Governing
Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Delaware, without reference to its
conflicts of laws rules or the principles of the choice of law.
12. Modifications. No
change or modification of this Agreement shall be valid unless the same is in
writing and signed by the parties hereto.
13. Terms and Conditions of
Plan. The terms and conditions included in the Plan, the
receipt of a copy of which Participant hereby acknowledges by execution of this
Agreement, are incorporated by reference herein, and to the extent that any
conflict may exist between any term or provision of this Agreement and any term
or provision of the Plan, such term or provision of the Plan shall
control. Notwithstanding the foregoing, Employee acknowledges that he
is subject to any damages or remedy provisions found herein, in the Employment
Agreement or in the Plan (including, but not limited to, the damages and remedy
provisions of Section 13.3(a) of the Plan), which section 6 and 7 of the
Employment Agreement supersede clauses (i), (ii) and (iii) of such Section
13.3(a) for all purposes of determining the applicability of such damages and
remedy provisions).
14. Forfeiture of Economic
Benefits.
If within two years after the date of any financial statements or
other public disclosure by the Corporation, the Compensation Committee
determines that the financial statements or other public
disclosures were inaccurate or were misleading in any material
respect and the Compensation Committee determines in good faith at any time
during the course of investigation following discovery of the inaccuracy or
omission that Participant played any material role in causing such inaccuracy or
misleading omission, or that Participant was aware of such inaccuracy or
omission, then Participant shall be obligated to repay to the Corporation any
economic benefits obtained by Participant under this Agreement,
including the value of securities issued under this agreement or pursuant to the
Option, that the Compensation Committee determines in good faith was
the direct or indirect result of such material inaccuracy or omission and
further provided that either before or after such date the Corporation shall
have any other remedies available under applicable law and shall not be limited
to the remedies provided in this Section. The determination of the Compensation
Committee, if made in good faith, shall be final and binding on
Participant.
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15. Covenants and
Representations and Covenants of Participant.
Participant represents, warrants,
covenants and agrees with the Corporation as follows:
(a) The
Option is being received for Participant’s own account without the participation
of any other person, with the intent of holding the Option and the Shares
issuable pursuant thereto for investment and without the intent of
participating, directly or indirectly, in a distribution of the Shares and not
with a view to, or for resale in connection with, any distribution of the Shares
or any portion thereof.
(b) Participant
is not acquiring the Option or any Shares based upon any representation, oral or
written, by any person with respect to the future value of, or income from, the
Shares, but rather upon an independent examination and judgment as to the
prospects of the Corporation.
(c) Participant
has had the opportunity to ask questions of and receive answers from the
Corporation and its executive officers and to obtain all information necessary
for Participant to make an informed decision with respect to the investment in
the Corporation represented by the Option and any Shares issued upon its
exercise.
(d) Participant
is able to bear the economic risk of any investment in the Shares, including the
risk of a complete loss of the investment, and Participant acknowledges that
Participant must continue to bear the economic risk of any investment in Shares
received upon exercise of the Option for an indefinite period.
(e) Participant
understands and agrees that the Shares subject to the Option may be issued and
sold to Participant without registration under any state or federal laws
relating to the registration of securities and in that event will be issued and
sold in reliance on exemptions from registration under appropriate state and
federal laws.
(f) Shares
issued to Participant upon exercise of the Option will not be offered for sale,
sold or transferred by Participant other than pursuant
to: (i) an effective registration under applicable state
securities laws or in a transaction which is otherwise in compliance with those
laws; (ii) an effective registration under the Securities Act of 1933, or a
transaction otherwise in compliance with such Act; and (iii) evidence
satisfactory to the Corporation of compliance with all applicable state and
federal securities laws. The Corporation shall be entitled to rely
upon an opinion of counsel satisfactory to it with respect to compliance with
the foregoing laws.
(g) The
Corporation will be under no obligation to register the Shares issuable pursuant
to the Option or to comply with any exemption available for sale of the Shares
by Participant without registration, and the Corporation is under no obligation
to act in any manner so as to make Rule 144 promulgated under the
Securities Act of 1933 available with respect to any sale of the Shares by
Participant.
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(h) Participant
has not relied upon the Corporation with respect to any tax consequences related
to the grant or exercise of this Option, or the disposition of Shares purchased
pursuant to its exercise. Participant acknowledges that, as a result
of the grant and/or exercise of the Option, Participant may incur a substantial
tax liability. Participant assumes full responsibility for all such
consequences and the filing of all tax returns and elections Participant may be
required or find desirable to file in connection therewith. In the
event any valuation of the Option or Shares purchased pursuant to its exercise
must be made under federal or state tax laws and such valuation affects any
return or election of the Corporation, Participant agrees that the Corporation
may determine such value and that Participant will observe any determination so
made by the Corporation in all returns and elections filed by
Participant. In the event the Corporation is required by applicable
law to collect any withholding, payroll or similar taxes by reason of the grant
or any exercise of the Option, Participant agrees that the Corporation may
withhold such taxes from any monetary amounts otherwise payable by the
Corporation to Participant and that, if such amounts are insufficient to cover
the taxes required to be collected by the Corporation, Participant will pay to
the Corporation such additional amounts as are required.
(i) The
agreements, representations, warranties and covenants made by Participant herein
with respect to the Option shall also extend to and apply to all of the Shares
issued to Participant from time to time pursuant to exercise of the
Option. Acceptance by Participant of any certificate representing
Shares shall constitute a confirmation by Participant that all such agreements,
representations, warranties and covenants made herein shall be true and correct
at that time.
(j) In
the event any underwriter of securities of the Corporation requests Participant
to sign any agreement restricting resale of the Shares in connection with any
public offering by the Corporation, Participant agrees to sign such agreement,
provided the officers of the Corporation have signed an agreement no less
restrictive. The Corporation may instruct its transfer agent not to
transfer the Shares if requested by an underwriter as described
above.
(The
remainder of this page is intentionally left blank.)
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IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be executed effective as of the day and year first
above written.
|
etrials
Worldwide, Inc.
By:
/s/ Xxxxxx X. Xxxxxxxxx
III
Print
Name: Xxxxxx X Xxxxxxxxx III
PARTICIPANT:
/s/
Xxxxxxx Xxxxx Xxxxxxxxx
Print Name: Xxxxxxx Xxxxx Xxxxxxxxx |
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EXHIBIT
A
Attention: Corporate
Secretary
etrials
Worldwide, Inc.
0000
Xxxxxx Xxxxxx Xxxxxxx
Xxxxxxxxxxx,
Xxxxx Xxxxxxxx 00000
|
Re:
|
Exercise of Incentive
Stock Option
|
Dear
Secretary:
Pursuant to the terms and conditions of
that certain Incentive Stock Option Agreement dated as of November ____, 2008
(the “Agreement”)
between Xxxxx Xxxxxxxxx and etrials Worldwide, Inc. (the “Corporation”),
I desire to purchase _______________ Shares of the Common Stock of the
Corporation and hereby tender payment in full for such Shares in accordance with
the terms of the Agreement.
I hereby reaffirm that the
representations and warranties made in Section 14 of the Agreement are true and
correct on the date hereof as if made on the date hereof.
Very
truly yours,
_____________________________
Print
Name: Xxxxx Xxxxxxxxx
Date:
__________________________
A-1
