NORTH AMERICAN SCIENTIFIC, INC. STOCK OPTION AGREEMENT
Exhibit
10.2
NORTH
AMERICAN SCIENTIFIC, INC.
Type
of Option (check one): xIncentive oNonstatutory
This
Stock Option Agreement (the “Agreement”) is entered into as of August
11,
2008,
by and between North American Scientific, Inc., a Delaware corporation (the
“Company”), and Xxxxx Xxxxx (the “Optionee”) pursuant to the Company’s 2006
Stock Plan, as amended (the “Plan”). Any capitalized term not defined herein
shall have the same meaning ascribed to it in the Plan.
1. Grant
of Option.
The
Company hereby grants to Optionee an option (the “Option”) to purchase all or
any portion of a total of two
hundred three thousand three hundred fifty-nine (203,359)
shares
(the “Shares”) of the Common Stock of the Company at a purchase price of
zero
and 69/100 dollars
($0.69)
per
share (the “Exercise Price”), subject to the terms and conditions set forth
herein and the provisions of the Plan. If the box marked “Incentive” above is
checked, then this Option is intended to qualify as an “incentive stock option”
as defined in Section 422 of the Internal Revenue Code of 1986, as amended
(the “Code”). If this Option fails in whole or in part to qualify as an
incentive stock option, or if the box marked “Nonstatutory” is checked, then
this Option shall to that extent constitute a nonqualified stock
option.
2. Vesting
of Option.
(a) The
right
to exercise this Option shall vest in installments, and this Option shall be
exercisable from time to time in whole or in part as to any vested installment
(“Vested Shares”). Commencing on the first anniversary of the “Vesting
Commencement Date” 25% of the Shares shall become Vested Shares and thereafter
the remaining Shares shall become Vested Shares in a series of thirty-six (36)
successive equal monthly installments for each full month of Continuous Service
provided by the Optionee, such that 100% of the Shares shall become Vested
Shares on the fourth (4th) anniversary of the “Vesting Commencement Date.” For
these purposes, the Vesting Commencement Date shall be the date hereof. No
additional Shares shall vest after the date of termination of Optionee’s
“Continuous Service” (as defined below), but this Option shall continue to be
exercisable in accordance with Section 3 below with respect to that number
of shares that have vested as of the date of termination of Optionee’s
Continuous Service. For purposes of this Agreement, the term “Continuous
Service” means such period of time during which Optionee first establishes, and
thereafter continuously maintains, his status as an Awardee Eligible to Vest,
as
set forth in Section 2(g) of the Plan.
(b) Notwithstanding
the foregoing subsection (a) of this Section 2, if the Optionee’s Continuous
Service ceases as a result of the Optionee’s death, permanent and total
disability or retirement due to age, in accordance with the Company’s or its
Subsidiary’s or Affiliate’s retirement policy, any portion of this Option that
does not constitute Vested Shares, shall immediately vest and become Vested
Shares effective upon the date of Optionee’s death, disability or retirement, as
the case may be.
3. Term
of Option.
The
right of the Optionee to exercise this Option shall terminate upon the first
to
occur of the following:
(a) The
expiration of seven (7) years from the date of this Agreement;
(b) The
date
on which the Administrator offers to purchase this Option in accordance with
the
Buyout Provisions set forth in Section 10(e) of the Plan;
(c) In
the
case of a Nonstatutory Stock Option:
(i) if
Optionee’s Continuous Service ceases due to the Optionee’s permanent and total
disability, the expiration of one (1) year from the date of such disability;
(ii) if
Optionee’s Continuous Service ceases due to the Optionee’s retirement due to
age, in accordance with the Company’s or its Subsidiary’s or Affiliate’s
retirement policy, the expiration of one (1) year from the date of such
retirement;
(iii) if
Optionee’s Continuous Service ceases due to the Optionee’s death, the expiration
of one (1) year from the date of death; or
(iv) if
Optionee’s Continuous Service ceases other than as a result of the circumstances
set forth in paragraphs (i)-(iii) of this subsection (c), the expiration of
three (3) months after Optionee’s cessation of Continuous Service.
(d) In
the
case of an Incentive Stock Option:
(i) if
Optionee’s Continuous Service ceases due to the Optionee’s permanent and total
disability, the expiration of one (1) year from the date of such disability;
(ii) if
Optionee’s Continuous Service ceases due to the Optionee’s retirement due to
age, in accordance with the Company’s or its Subsidiary’s or Affiliate’s
retirement policy, the expiration of three (3) months from the date of such
retirement;
(iii) if
Optionee’s Continuous Service ceases due to the Optionee’s death, or if death
occurs during the three-month period set forth in paragraph (ii) of this
subsection (d), the expiration of one (1) year from the date of death; or
(iv) the
expiration of three (3) months from the date of termination of Optionee’s
Continuous Service if such termination occurs for any reason other than
permanent disability, death, voluntary resignation or cause; provided, however,
that if Optionee dies during such three-month period the provisions of
Section 3(c) above shall apply;
(v) the
expiration of one (1) month from the date of termination of Optionee’s
Continuous Service if such termination occurs due to voluntary resignation;
provided, however, that if Optionee dies during such one-month period the
provisions of Section 3(d)(iii) above shall apply;
(vi) the
termination of Optionee’s Continuous Service, if such termination is for “Cause”
(as defined below); or
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(vii) upon
the
consummation of a Dissolution or Liquidation or a “Change in Control” (as
defined in Section 16(c) of the Plan), unless otherwise provided pursuant
to Sections 8 or 9 below.
For
purposes of this Agreement, “Cause” shall mean (A) the commission of any act of
fraud, embezzlement or dishonesty by Optionee which materially and adversely
affects the business of the Company, the acquiring or successor entity (or
parent or any subsidiary thereof), (B) any unauthorized use or disclosure by
Optionee of confidential information or trade secrets of the Company, the
acquiring or successor entity (or parent or any subsidiary thereof), (C) the
continued refusal or omission by the Optionee to perform any material duties
required of him if such duties are consistent with duties customary for the
position held with the Company, the acquiring or successor entity (or parent
or
any subsidiary thereof), (D) any material act or omission by the Optionee
involving malfeasance or gross negligence in the performance of Optionee’s
duties to, or material deviation from any of the policies or directives of,
the
Company or the acquiring or successor entity (or parent or any subsidiary
thereof), (E) conduct on the part of Optionee which constitutes the breach
of
any statutory or common law duty of loyalty to the Company, the acquiring or
successor entity (or parent or any subsidiary thereof), or (F) any illegal
act
by Optionee which materially and adversely affects the business of the Company,
the acquiring or successor entity (or parent or any subsidiary thereof), or
any
felony committed by Optionee, as evidenced by conviction thereof. The provisions
of this Section shall not limit the grounds for the dismissal or discharge
of
Optionee or any other individual in the service of the Company, the acquiring
or
successor entity (or parent or any subsidiary thereof).
4. Exercise
of Option.
On or
after the vesting of any portion of this Option in accordance with
Sections 2, 8 or 9 hereof, and until termination of the right to exercise
this Option in accordance with Section 3 above, the portion of this Option
that has vested may be exercised in whole or in part by the Optionee (or, after
his or her death, by the person designated in Section 5 below) upon
delivery of the following to the Company at its principal executive
offices:
(a) a
written
notice of exercise which identifies this Agreement and states the number of
Shares then being purchased (but no fractional Shares may be purchased), with
any partial exercise being deemed to cover first vested Shares and then the
earliest vesting installments of unvested Shares;
(b) a
check
or cash (denominated in currency of the United States) in the amount of the
Exercise Price (or payment of the Exercise Price in such other form of lawful
consideration as the Administrator may approve from time to time under the
provisions of Section 10 of the Plan);
(c) in
the
case of a Nonstatutory Stock Option, a check or cash (denominated in currency
of
the United States) in the amount reasonably requested by the Company to satisfy
the Company’s withholding obligations under Federal, state or other applicable
tax laws with respect to the taxable income, if any, recognized by the Optionee
in connection with the exercise of this Option (unless the Company and Optionee
shall have made other arrangements for deductions or withholding from Optionee’s
wages, bonus or other compensation payable to Optionee, or by the withholding
of
Shares issuable upon exercise of this Option or the delivery of Shares owned
by
the Optionee in accordance with Section 4(b) of the Plan, provided such
arrangements satisfy the requirements of applicable tax laws); and
(d) a
letter,
if requested by the Company, in such form and substance as the Company may
require, setting forth the investment intent of the Optionee, or person
designated in Section 5 below, as the case may be.
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5. Death
of Optionee; No Assignment.
The
rights of the Optionee under this Agreement may not be assigned or transferred
except by will or by the laws of descent and distribution, and may be exercised
during the lifetime of the Optionee only by such Optionee. Any attempt to sell,
pledge, assign, hypothecate, transfer or dispose of this Option in contravention
of this Agreement or the Plan shall be void and shall have no effect. In the
event of the Optionee’s death, Optionee’s legal representative, his or her
legatee, or the person who acquired the right to exercise this Option by reason
of the death of the Optionee (individually, a “Successor”) shall succeed to the
Optionee’s rights and obligations under this Agreement. After the death of the
Optionee, only a Successor may exercise this Option.
6. Representations
and Warranties of Optionee.
(a) Optionee
represents and warrants that this Option is being acquired by Optionee for
Optionee’s personal account, for investment purposes only, and not with a view
to the distribution, resale or other disposition thereof.
(b) Optionee
acknowledges that the Company may issue Shares upon the exercise of the Option
without registering such Shares under the Securities Act of l933, as amended
(the “Securities Act”), on the basis of certain exemptions from such
registration requirement. Accordingly, Optionee agrees that his or her exercise
of the Option may be expressly conditioned upon his or her delivery to the
Company of an investment certificate including such representations and
undertakings as the Company may reasonably require in order to assure the
availability of such exemptions, including a representation that Optionee is
acquiring the Shares for investment and not with a present intention of selling
or otherwise disposing thereof and an agreement by Optionee that the
certificates evidencing the Shares may bear a legend indicating such
non-registration under the Securities Act and the resulting restrictions on
transfer. Optionee acknowledges that, because Shares received upon exercise
of
an Option may be unregistered, Optionee may be required to hold the Shares
indefinitely unless they are subsequently registered for resale under the
Securities Act or an exemption from such registration is available.
(c) Optionee
acknowledges receipt of a copy of the Plan and understands that all rights
and
obligations connected with this Option are set forth in this Agreement and
in
the Plan.
7. Adjustments
Upon Changes in Capital Structure.
In the
event that the outstanding shares of Common Stock of the Company are hereafter
increased or decreased or changed into or exchanged for a different number
or
kind of shares or other securities of the Company by reason of a
recapitalization, stock split, combination of shares, reclassification, stock
dividend or other change in the capital structure of the Company, then
appropriate adjustment shall be made by the Administrator to the number of
Shares subject to the unexercised portion of this Option and to the Exercise
Price per share, in order to preserve, as nearly as practical, but not to
increase, the benefits of the Optionee under this Option, in accordance with
the
provisions of Section 16(a) of the Plan.
8. Dissolution
or Liquidation.
In the
event of a proposed dissolution or liquidation of the Company (as described
in
Section 16(b) of the Plan), the Administrator, in its sole discretion, may
cause
the Optionee’s right to exercise this Option to accelerate automatically and
vest in full (notwithstanding the provisions of Section 2 above) until ten
(10)
days prior to such event or such shorter administratively reasonable period
of
time as the Administrator may establish in its discretion.
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9. Change
in Control.
In the
event of a Change in Control (as defined in Section 16(c) of the
Plan):
(a) The
right
to exercise this Option shall accelerate automatically and vest in full
(notwithstanding the provisions of Section 2 above) effective as of
immediately prior to the consummation of the Change in Control unless
this
Option is to be assumed by the acquiring or successor entity (or parent thereof)
or a new option or New Incentives are to be issued in exchange therefor, as
provided in subsection (b) of this Section 9. If vesting of this Option will
accelerate pursuant to the preceding sentence, the Administrator in its
discretion may provide, in connection with the Change in Control transaction,
for the purchase or exchange of this Option for an amount of cash or other
property having a value equal to the difference (or “spread”) between:
(x) the value of the cash or other property that the Optionee would have
received pursuant to the Change in Control transaction in exchange for the
Shares issuable upon exercise of this Option had this Option been exercised
immediately prior to the Change in Control, and (y) the aggregate Exercise
Price for such Shares. If the vesting of this Option will accelerate pursuant
to
this subsection (a), then the Administrator shall cause written notice of the
Change in Control transaction to be given to the Optionee not less than fifteen
(15) days prior to the anticipated effective date of the proposed
transaction.
(b) The
vesting of this Option shall
not
accelerate if and to the extent that: (i) this Option (including the
unvested portion thereof) is to be assumed by the acquiring or successor entity
(or parent thereof) or a new option of comparable value is to be issued in
exchange therefor pursuant to the terms of the Change in Control transaction,
or
(ii) this Option (including the unvested portion thereof) is to be replaced
by the acquiring or successor entity (or parent thereof) with other incentives
of comparable value under a new incentive program (“New Incentives”) containing
such terms and provisions as the Administrator in its discretion may consider
equitable; provided, however, that in the event of a Change in Control in which
one or more of the successor or a parent or subsidiary of the successor has
issued publicly traded equity securities, such assumption of this Option or
issuance of a new option or New Incentives shall be made by an entity with
publicly traded equity securities and shall provide that the holders of such
assumed Options, new options or New Incentives shall be able to acquire publicly
traded securities. If this Option is assumed, or if a new option of comparable
value is issued in exchange therefor, then this Option or the new options shall
be appropriately adjusted, concurrently with the Change in Control, to apply
to
the number and class of securities or other property that the Optionee would
have received pursuant to the Change in Control transaction in exchange for
the
Shares issuable upon exercise of this Option had this Option been exercised
immediately prior to the Change in Control, and appropriate adjustment also
shall be made to the Exercise Price such that the aggregate Exercise Price
of
this Option or the new options shall remain the same as nearly as
practicable.
(c) If
the
provisions of subsection (b) of this Section 9 apply, then this Option, the
new
options or the New Incentives shall continue to vest in accordance with the
provisions of Section 2 above and shall continue in effect for the
remainder of the term of this Option in accordance with the provisions of
Section 3 above. However, in the event of an Involuntary Termination (as
defined below) of Optionee’s Continuous Service within twelve (12) months
following such Change in Control, then vesting of this Option, the new option
or
the New Incentives shall accelerate in full automatically effective upon such
Involuntary Termination. In addition, if the Optionee has remained with the
Company or its successor for twelve months following the Change of Control,
then
all of the Options, the new options or the New Incentives shall become fully
vested as of the twelve month anniversary of the date of the Change of
Control.
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For
purposes of this Section 9, “Involuntary Termination” shall mean the
termination of Optionee’s Continuous Service by reason of:
(A) Optionee’s
involuntary dismissal or discharge by the Company, or by the acquiring or
successor entity (or parent or any subsidiary thereof employing the Optionee)
for reasons other than Cause (as defined in Section 3 above), or
(B) Optionee’s
voluntary resignation following (x) a change in Optionee’s position with
the Company, the acquiring or successor entity (or parent or any subsidiary
thereof) which materially reduces Optionee’s duties and responsibilities or the
level of management to which Optionee reports, (y) a reduction in
Optionee’s level of compensation (including base salary, fringe benefits and
target bonus under any performance based bonus or incentive programs) by more
than ten percent (10%), or (z) a relocation of Optionee’s principal place
of employment by more than fifty (50) miles, provided and only if such change,
reduction or relocation is effected without Optionee’s written
consent.
10. Limitation
of Company’s Liability for Nonissuance.
The
Company agrees to use its reasonable best efforts to obtain from any applicable
regulatory agency such authority or approval as may be required in order to
issue and sell the Shares to the Optionee pursuant to this Option. Inability
of
the Company to obtain, from any such regulatory agency, authority or approval
deemed by the Company’s counsel to be necessary for the lawful issuance and sale
of the Shares hereunder and under the Plan shall relieve the Company of any
liability in respect of the nonissuance or sale of such shares as to which
such
requisite authority or approval shall not have been obtained.
11. No
Employment Contract Created.
Neither
the granting of this Option nor the exercise hereof shall be construed as
granting to the Optionee any right with respect to continuance of employment
by
the Company or any of its subsidiaries. The right of the Company or any of
its
subsidiaries to terminate at will the Optionee’s employment at any time (whether
by dismissal, discharge or otherwise), with or without cause, is specifically
reserved.
12. Rights
as Stockholder.
The
Optionee (or transferee of this option by will or by the laws of descent and
distribution) shall have no rights as a stockholder with respect to any Shares
covered by this Option until such person has duly exercised this Option, paid
the Exercise Price and become a holder of record of the Shares
purchased.
13. Interpretation.
This
Option is granted pursuant to the terms of the Plan, and shall in all respects
be interpreted in accordance therewith. The Administrator shall interpret and
construe this Option and the Plan, and any action, decision, interpretation
or
determination made in good faith by the Administrator shall be final and binding
on the Company and the Optionee. As used in this Agreement, the term
“Administrator” shall refer to the committee of the Board of Directors of the
Company appointed to administer the Plan, and mean the Board of
Directors.
14. Notices.
Any
notice, demand or request required or permitted to be given under this Agreement
shall be in writing and shall be deemed given when delivered personally or
three
(3) days after being deposited in the United States mail, as certified or
registered mail, with postage prepaid, (or by such other method as the
Administrator may from time to time deem appropriate), and addressed, if to
the
Company, at its principal place of business, Attention: the Chief Financial
Officer, and if to the Optionee, at his or her most recent address as shown
in
the employment or stock records of the Company.
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15. Governing
Law.
The
validity, construction, interpretation, and effect of this Option shall be
governed by and determined in accordance with the substantive laws, but not
the
choice of law rules, of the State of Delaware, to the extent not preempted
by
Federal law.
16. Severability.
Should
any provision or portion of this Agreement be held to be unenforceable or
invalid for any reason, the remaining provisions and portions of this Agreement
shall be unaffected by such holding.
17. Attorneys’
Fees.
If any
party shall bring an action in law or equity against another to enforce or
interpret any of the terms, covenants and provisions of this Agreement, the
prevailing party in such action shall be entitled to recover reasonable
attorneys’ fees and costs.
18. Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original and all of which together shall be deemed one
instrument.
[Signature
Page Follows]
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IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.
| NORTH AMERICAN SCIENTIFIC, INC. | ||
| |
|
|
| By: | /s/ Xxxx Xxxx | |
|
Xxxx Xxxx, Chief Executive Officer |
||
| OPTIONEE | ||
| |
|
|
| /s/ Xxxxx X. Xxxxx | ||
|
Xxxxx X. Xxxxx |
||
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