CARDIOTECH INTERNATIONAL, INC. NONQUALIFIED STOCK OPTION AGREEMENT
Exhibit
10.1
CARDIOTECH
INTERNATIONAL, INC.
Option
Agreement
Number: NSO-01
Date of
Grant/Award: October
3, 2005
Name of
Optionee: Xxxx
X. Xxxxxxx
Optionee’s
Social Security
Number: 000
00 0000
Vesting
Date: October
3, 2005
Initial
Exercise
Date: October
3, 2005
Expiration
Date: October
3, 2015
1. Dated as
of the Date of Grant/Award set forth above (the “Grant Date”), a Stock
Option (the “Option”) is hereby
granted to the above-named Optionee. The award of this Option (the
“Award”)
conveys to the Optionee the right to purchase from Cardiotech International,
Inc. (the “Company”) up to
200,000 shares of common stock (the “Option Shares”) at an
exercise price of $2.32 per share, the fair market value of the Company’s common
stock on the last business day prior to the Grant Date. The Option
Shares are fully vested on the Vesting Date. The Option awarded hereunder is
intended to be a nonqualified stock option and is specifically not intended to
be treated as an Incentive Stock Option as such term is defined under Section
422 of the Internal Revenue Code.
2. DEFINITIONS Whenever
used herein, the following terms shall have their respective meanings set forth
below:
(a)
“Change in Control” shall mean an Ownership Change Event or a series of related
Ownership Change Events (collectively, a “Transaction”) wherein the stockholders
of the Company, immediately before a Transaction, do not retain immediately
after a Transaction, in substantially the same proportions as their ownership of
shares of the Company's voting stock immediately before a Transaction, direct or
indirect beneficial ownership of more than fifty percent (50%) of the total
combined voting power of the outstanding voting securities of the Company or, in
the case of a Transaction involving the sale, exchange or transfer of all or
substantially all of the Company's assets, the corporation or other business
entity to which the assets of the Company were transferred (the “Transferee”),
as the case may be. For purposes of the preceding sentence, indirect beneficial
ownership shall include, without limitation, an interest resulting from
ownership of the voting securities of one or more corporations or other business
entities which own the Company or the Transferee, as the case may be, either
directly or through one or more subsidiary corporations
or other business entities. The Board of Directors of the Company (the “Board”)
shall have the right to determine whether multiple sales or exchanges of the
voting securities of the Company or multiple Ownership Change Events are
related, and its determination shall be final, binding and
conclusive.
(b)
“Code” means the Internal Revenue Code of 1986, as amended, and any applicable
regulations promulgated thereunder.
(c) An
“Ownership Change Event” shall be deemed to have occurred if any of the
following occurs with respect to the Company: (i) the direct or indirect
sale or exchange in a single or series of related transactions by the
stockholders of the Company of more than fifty percent (50%) of the voting stock
of the Company; (ii) a merger or consolidation in which the Company is a
party; (iii) the sale, exchange, or transfer of all or substantially all of
the assets of the Company; or (iv) a liquidation or dissolution of the
Company.
(d)
“Parent Corporation” means any present or future “parent corporation” of the
Company, as defined in Section 424(e) of the Code.
(e)
“Participating Company” means the Company or any Parent Corporation or
Subsidiary Corporation.
(f)
“Service” means the Optionee’s employment or service with the Company, whether
in the capacity of an employee, a director or a consultant. The Optionee’s
Service shall not be deemed to have terminated merely because of a change in the
capacity in which the Optionee renders Service to the Company or a change in the
Participating Company for which the Optionee renders such Service, provided that
there is no interruption or termination of the Optionee’s Service. Furthermore,
the Optionee’s Service with the Company shall not be deemed to have terminated
if the Optionee takes any military leave, sick leave, or other bona fide leave
of absence approved by the Company; provided, however, that if any such leave
exceeds ninety (90) days, on the ninety-first (91st) day of such leave the
Optionee’s Service shall be deemed to have terminated unless the Optionee’s
right to return to Service with the Company is guaranteed by statute or
contract. Notwithstanding the foregoing, unless otherwise designated by the
Company or required by law, a leave of absence shall not be treated as Service
for purposes of this Agreement unless determined otherwise by the
Company. The Optionee’s Service shall be deemed to have terminated
either upon an actual termination of service or upon the corporation for which
the Optionee performs services ceasing to be a Participating Company. Subject to
the foregoing, the Company, in its discretion, shall determine whether the
Optionee’s Service has terminated and the effective date of such
termination.
3. To the
extent not previously exercised, the Option and all rights with respect thereto,
shall terminate and become null and void when the Option Term (hereinafter
defined) expires.
4. The
Option may be exercised, in whole or in part, at any time or from time to time
prior to the Expiration Date set forth above (the “Option Term”). The
Option Term is contingent upon the continued service of the Optionee with the
Participating Company. The Option shall be exercisable after the
Optionee’s termination of Service only during the applicable time period
determined in accordance with the following provisions and thereafter shall
terminate:
(a) DISABILITY.
If the Optionee’s Service terminates because of the Disability of the Optionee,
an Option, to the extent unexercised and exercisable on the date on which the
Optionee’s Service terminated, may be exercised by the Optionee (or the
Optionee’s guardian or legal representative) at any time prior to the expiration
of twelve (12) months after the date on which the Optionee’s Service
terminated, but in any event no later than the Expiration Date.
(b) DEATH.
If the Optionee’s Service terminates because of the death of the Optionee, an
Option, to the extent unexercised and exercisable on the date on which the
Optionee’s Service terminated, may be exercised by the Optionee’s legal
representative or other person who acquired the right to exercise the Option or
Right by reason of the Optionee’s death at any time prior to the Expiration
Date.
(c) OTHER
TERMINATION OF SERVICE. If the Optionee’s Service terminates for any reason,
except Disability or death, an Option, to the extent unexercised and exercisable
by the Optionee on the date on which the Optionee’s Service terminated, may be
exercised by the Optionee at any time prior to the expiration of three
(3) months after the date on which the Optionee’s Service terminated, but
in no event any later than the Expiration Date.
5. The grant
of Awards under the Plan shall in no way affect the right of the Company to
adjust, reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.
6. The
Option may be exercised with respect to all or any part of the number of vested
Option Shares by the giving of written notice (“Notice”) of the
intent to exercise to the Company. The Notice shall specify the
exercise date and the number of Option Shares as to which the Option is to be
exercised. Full payment of the Option exercise price by any of the
means of consideration shall be made on or before the exercise date specified in
the Notice. Such full payment having occurred on or before the
exercise date specified in the Notice, or as soon thereafter as is practicable,
the Company shall cause to be delivered to the Optionee a certificate or
certificates for the Option Shares then being purchased. If the
Optionee fails to pay for any of the Option Shares specified in the Notice, or
fails to accept delivery of Option Shares, the Optionee’s right to purchase such
Option Shares may be terminated by the Company.
7. During
the Optionee’s lifetime, the Option granted hereunder shall be exercisable only
by the Optionee or by any guardian or legal representative of the Optionee, and
the Option shall not be transferable except, in the case of the death of the
Optionee, by will or by the laws of descent and distribution, nor shall the
Option be subject to attachment, execution or other similar
process.
8. The
Company may unilaterally amend the Award at any time if the Company determines,
in its sole discretion that amendment is necessary or advisable in light of any
applicable addition to or change in the Internal Revenue Code, any regulations
issued thereunder, or any federal or state securities law or other applicable
law or regulation.
9. In
the event of a Change in Control, the surviving, continuing, successor, or
purchasing corporation or other business entity or parent thereof, as the case
may be (the “Acquiring Corporation”), may, without the consent of the Optionee,
either assume the Company's rights and obligations under outstanding Options or
substitute for such outstanding Options substantially equivalent options for, or
in relation to, the Acquiring Corporation's stock.
10. Until the
date a stock certificate is issued to the Optionee, the Optionee shall have no
rights as a stockholder with respect to the Option Shares, and no adjustments
shall be made for dividends of any kind or nature, distributions, or other
rights for which the record date is prior to the date such stock certificate is
issued.
11. Nothing
contained herein shall be deemed to give the Optionee any right to employment by
the Company or by a Participating Company, or to interfere with the right of the
Company or a Participating Company to discharge any person at any time without
regard to the effect that such discharge will have upon such person's rights or
potential rights, if any, under this Agreement. The provisions of this Agreement
are in addition to, and not a limitation on, any rights a Optionee may have
against the Company or a Participating Company by reason of any employment or
other agreement with the Company or a Participating Company.
12. In the
event of any stock dividend, stock split, reverse stock split, recapitalization,
combination, reclassification or similar change in the capital structure of the
Company, appropriate adjustments shall be made in the exercise price per share
of any outstanding Option Shares.
13. The
Optionee acknowledges having received and read a copy of this Agreement and
agrees to comply with all laws, rules and regulations applicable to the Award
and to the sale or other disposition of the Stock of the Company
received.
14. Any
notice to the Company provided for in this Agreement shall be addressed to it in
care of its Secretary at its executive offices located at 000 Xxxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxxxxxxx, 00000, and any notice to the Optionee shall be
addressed to the Optionee at the address currently shown on the payroll records
of the Company. Any notice shall be deemed duly given if and when
properly addressed and posted by registered or certified mail, postage
prepaid.
15. If any
provision of this Agreement is held to be illegal or invalid for any reason, the
remaining provisions are to remain in full force and effect and are to be
construed and enforced in accordance with the purposes of this Agreement as if
the illegal or invalid provision or provisions did not exist.
16. Until the
Option Shares are registered, each certificate representing the Option Shares
shall be stamped or otherwise imprinted with a legend substantially in the
following form:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR IF APPLICABLE, STATE SECURITIES
LAWS. THESE SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
SECURITIES ACT AND APPLICABLE STATE LAWS OR COMPLIANCE WITH AN APPLICABLE
EXEMPTION THEREFROM, SUCH COMPLIANCE, AT THE OPTION OF THE COMPANY, TO BE
EVIDENCED BY AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION IS NOT REQUIRED
IN WITNESS WHEREOF, the
Company has caused its duly authorized officers to execute this nonqualified
Stock Option Agreement, and the Optionee has placed his or her signature hereon,
effective as of the Grant Date.
CARDIOTECH
INTERNATIONAL, INC.
By: /s/ Xxxxxxx
Xxxxxxx
Name: Xxxxxxx Xxxxxxx
Title: Chief
Executive Officer
ACCEPTED
AND AGREED TO:
By: /s/ Xxxx X.
Xxxxxxx
Xxxx X. Xxxxxxx
Optionee
