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EXHIBIT 99.8
INSITE VISION INCORPORATED
1994 STOCK OPTION PLAN
NON-EMPLOYEE DIRECTOR OPTION AGREEMENT
RECITALS
A. Under the Automatic Option Grant Program in effect under the
Corporation's 1994 Stock Option Plan (the "Plan"), the non-employee members of
the Corporation's Board of Directors (the "Board") will automatically receive
periodic option grants designed to reward them for services they have rendered
to the Corporation and to encourage them to continue in the service of the
Corporation.
B. Optionee is a non-employee member of the Board, and this
Agreement is executed pursuant to, and is intended to carry out the purposes of,
the Plan in connection with the automatic grant on this day of a stock option to
purchase shares of the Corporation's common stock ("Common Stock") under Article
Three of the Plan.
C. The granted option is intended to be a non-statutory option
which does not meet the requirements of Section 422 of the Internal Revenue
Code.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. Subject to and upon the terms and conditions
set forth in this Agreement, the Corporation hereby grants to Optionee, as of
the automatic grant date (the "Grant Date") specified in the accompanying Notice
of Automatic Option Grant (the "Grant Notice"), a stock option to purchase up to
that number of shares of Common Stock (the "Option Shares") as is specified in
the Grant Notice. The Option Shares shall be purchasable from time to time
during the option term at the option price per share (the "Option Price")
specified in the Grant Notice, which is one hundred percent (100%) of the fair
market value of the Common Stock on the Grant Date.
2. OPTION TERM. This option shall have a term of ten (10) years
measured from the Grant Date and shall accordingly expire at the close of
business on the expiration date specified in the Grant Notice ("Expiration
Date"), unless sooner terminated in accordance with Paragraph 5 or 6.
3. LIMITED TRANSFERABILITY. This option may, in connection with
the Optionee's estate plan, be assigned in whole or in part during the
Optionee's lifetime to one or more members of the Optionee's immediate family or
to a trust established exclusively for one or more such family members. The
assigned portion may only be exercised by the person or
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persons who acquire a proprietary interest in the option pursuant to the
assignment. The terms applicable to the assigned portion shall be the same as
those in effect for the option immediately prior to such assignment and shall be
set forth in such documents issued to the assignee as the Plan Administrator may
deem appropriate. Should Optionee die while holding this option, then this
option may be exercised by the personal representative of the Optionee's estate
or the person or persons to whom this option is transferred pursuant to
Optionee's will or in accordance with the laws of descent and distribution.
4. EXERCISABILITY. This option shall become exercisable for the
Option Shares one (1) year after the Grant Date, provided Optionee remains in
Board service through such date. This option shall thereafter remain so
exercisable until the expiration or sooner termination of the option term.
5. CESSATION OF BOARD SERVICE. Should Optionee's service as a
Board member cease while this option remains outstanding, then the option term
specified in Paragraph 2 shall terminate (and this option shall cease to be
exercisable) prior to the Expiration Date in accordance with the following
provisions:
(i) This option shall immediately terminate and cease to be
outstanding for any Option Shares for which the option is not
exercisable at the time of Optionee's cessation of Board service.
(ii) Should Optionee cease Board service (for any reason other
than Permanent Disability or death) while this option remains
outstanding, then the period for exercising this option shall be reduced
to a three (3)-month period commencing with the date of such cessation
of Board service. During such limited period of exercisability, this
option may not be exercised for more than the number of Option Shares
(if any) for which it is exercisable on the date of Optionee's cessation
of Board service. Upon the expiration of such three (3)-month period or
(if earlier) upon the Expiration Date, this option shall terminate and
cease to be exercisable.
(iii) Should Optionee cease Board service by reason of Permanent
Disability while holding this option, then Optionee shall have a period
of six (6) months (commencing with the date of such cessation of Board
service) during which to exercise this option for any or all of the
Option Shares for which this option is exercisable at the time of
Optionee's cessation of Board service. Upon the expiration of such six
(6)-month period or (if earlier) upon the Expiration Date, this option
shall terminate and cease to be exercisable.
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"Permanent Disability" shall mean the inability to engage in any
substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death
or which has lasted or can be expected to last for a continuous period
of not less than twelve (12) months.
(iv) Should Optionee die while serving as a Board member or
during the three (3)-month period following Optionee's cessation of
Board service and hold this option at the time of his or her death, then
the personal representative of Optionee's estate or the person or
persons to whom this option is transferred pursuant to Optionee's will
or in accordance with the laws of descent and distribution shall have
the right to exercise the option for any or all of the Option Shares for
which this option is exercisable at the time of Optionee's cessation of
Board service (less any Option Shares subsequently purchased by Optionee
prior to death). Such right shall lapse, and this option shall terminate
and cease to remain outstanding, upon the earlier of (A) the expiration
of the six (6)-month period measured from the date of Optionee's death
or (B) the Expiration Date.
6. ADJUSTMENT IN OPTION SHARES. In the event any change is made
to the Common Stock issuable under the Plan by reason of any stock split, stock
dividend, recapitalization, combination of shares, exchange of shares, or other
change affecting the outstanding Common Stock as a class without receipt of
consideration, then appropriate adjustments shall be made to (i) the total
number and/or class of Option Shares subject to this option and (ii) the Option
Price payable per share in order to reflect such change and thereby preclude the
dilution or enlargement of Optionee's rights and benefits hereunder.
7. SPECIAL ACCELERATION OF OPTION.
A. In the event of any of the following stockholder-approved
transactions (a "Corporate Transaction"):
(i) a merger or consolidation in which securities possessing
more than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person or
persons different from those who held those securities immediately prior
to such transaction, or
(ii) the sale, transfer or other disposition of all or
substantially all of the Corporation's assets in complete liquidation or
dissolution of the Corporation,
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this option shall, to the extent the option is at such time
outstanding but not otherwise fully exercisable, automatically accelerate so
that such option shall, immediately prior to the specified effective date for
the Corporate Transaction, become fully exercisable for all of the Option Shares
and may be exercised for all or any portion of such shares.
B. This option, to the extent not previously exercised, shall
terminate upon the consummation of the Corporate Transaction and cease to be
outstanding, except to the extent assumed by the successor corporation (or its
parent company) in such Corporate Transaction.
C. This Agreement shall not in any way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise make changes in its
capital or business structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or assets.
8. CHANGE IN CONTROL/HOSTILE TAKE-OVER.
A. In the event of any Change in Control (as defined below), the
exercisability of this option shall automatically accelerate so that the option
shall, immediately prior to the specified effective date for the Change in
Control, become fully exercisable for all of the Option Shares at the time
subject to this option and may be exercised for all or any portion of the Option
Shares at any time prior to the expiration or sooner termination of the option
term.
B. For all purposes under the Plan, a Change in Control shall mean
a change in control of the Corporation of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
whether or not the Corporation is then subject to such reporting requirement;
provided that, without limitation, a Change in Control shall be deemed to have
occurred if:
(i) any individual, partnership, firm, corporation,
association, trust, unincorporated organization or other entity,
or any syndicate or group deemed to be a person under Section
14(d)(2) of the Exchange Act, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), directly or indirectly, of
securities of the Corporation representing forty percent (40%) or
more of the combined voting power of the Corporation's then
outstanding securities entitled to vote in the election of
directors of the Corporation, pursuant to a tender or exchange
offer made directly to the Corporation's stockholders which the
Board does not recommend such stockholders to accept; or
(ii) a change in the composition of the Board occurs over
any period of two (2) consecutive years or less such that a
majority of the Board ceases for any reason to be comprised of
individuals who either (A) have been Board members continuously
since the beginning of that period or (B) have been elected or
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nominated for election as Board members during such period by a
vote of at least three-fourths (3/4) of the Board members
described in clause (A) who were still in office at the time the
Board approved such election or nomination.
C. In the event there should occur a Hostile Take-Over (as defined
below), then this option shall be automatically cancelled on the fifth (5th)
business day following such Hostile Take-Over in exchange for a cash
distribution from the Corporation in an amount equal to the excess of (I) the
Take-Over Price of all the Option Shares at the time subject to the cancelled
option, over (II) the aggregate Option Price payable for such shares.
Stockholder approval of the December 15, 1997 restatement of the Plan at the
1998 Annual Meeting shall constitute pre-approval of the cancellation of this
option in accordance with the terms of this Paragraph 8.C. No additional
approval of the Board or any Plan Administrator shall be required at the time of
the actual option cancellation and cash distribution.
D. Definitions:
A "Hostile Take-Over" shall be deemed to occur in the
event any person or related group of persons (other than the Corporation
or a person that directly or indirectly controls, is controlled by or is
under common control with, the Corporation) directly or indirectly
acquires beneficial ownership (within the meaning of Rule 13d-3 of the
Exchange Act) of securities possessing more than fifty percent (50%) of
the total combined voting power of the Corporation's outstanding
securities pursuant to a tender or exchange offer which the Board does
not recommend the Corporation's stockholders to accept.
The "Take-Over Price" per share shall be deemed to be
equal to the greater of (a) the Fair Market Value per share on the date
of cancellation (as determined in accordance with the provisions of
Paragraph 9.B below) or (b) the highest reported price per share paid in
effecting such Hostile Take-Over.
E. This Agreement shall in no way affect the right of the
Corporation 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.
9. MANNER OF EXERCISING OPTION.
A. In order to exercise this option with respect to all or any
part of the Option Shares for which this option is at the time exercisable,
Optionee (or in the case of exercise after Optionee's death, Optionee's
executor, administrator, heir or legatee, as the case may be) must take the
following actions:
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(i) Execute and deliver to the Secretary of the Corporation a
written notice of exercise in substantially the form of Exhibit I
attached hereto in which there is specified the number of Option Shares
for which the option is exercised.
(ii) Pay the aggregate Option Price for the purchased shares in
one or more of the following alternative forms:
(a) Cash or check made payable to the Corporation's order;
(b) Shares of Common Stock held by Optionee for the requisite
period necessary to avoid a charge to the Corporation's earnings for
financial reporting purposes and valued at Fair Market Value on the
Exercise Date (as such terms are defined below); or
(c) Through a broker-dealer sale and remittance procedure
pursuant to which the Optionee shall provide irrevocable instructions
(I) to a designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the
aggregate Option Price payable for the purchased shares plus all
applicable federal and state income and employment taxes required to be
withheld by the Corporation in connection with such purchase and (II) to
the Corporation to deliver the certificates for the purchased shares
directly to such brokerage firm in order to complete the sale
transaction; or
(iii) Furnish to the Corporation appropriate documentation that
the person or persons exercising the option (if other than Optionee)
have the right to exercise this option.
B. For purposes of this Agreement the Exercise Date shall be the
date on which the Exercise Notice shall have been delivered to the Corporation.
Except to the extent the sale and remittance procedure specified in subparagraph
(ii)(c) of paragraph A above may be utilized to exercise this option, payment of
the Option Price for the purchased shares must accompany such notice. For all
valuation purposes under this Agreement, the Fair Market Value per share of
Common Stock on any relevant date shall be the closing selling price per share
of Common Stock on the date in question on the American Stock Exchange. If there
is no closing selling price on the date in question, then the Fair Market Value
shall be the closing selling price on the last preceding date for which such
quotation exists on the American Stock Exchange.
C. As soon as practical after the Exercise Date, the Corporation
shall issue to or on behalf of Optionee (or any other person or persons
exercising this option) a certificate or certificates representing the Option
Shares purchased and paid for in accordance herewith.
D. In no event may this option be exercised for any fractional
shares.
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10. STOCKHOLDER RIGHTS. The holder of this option shall not have
any of the rights of a stockholder with respect to the Option Shares until such
individual shall have exercised this option, paid the Option Price for the
purchased shares and been issued one or more certificates for the purchased
shares.
11. NO IMPAIRMENT OF RIGHTS. Nothing in this Agreement shall be
construed or interpreted so as to affect adversely or otherwise impair the right
of the Corporation or the stockholders to remove Optionee from Board service at
any time in accordance with the provisions of applicable law.
12. COMPLIANCE WITH LAWS AND REGULATIONS.
A. The exercise of this option and the issuance of the Option
Shares upon such exercise shall be subject to compliance by the Corporation and
Optionee with all applicable requirements of law relating thereto and with all
applicable regulations of any stock exchange on which shares of the
Corporation's Common Stock may be listed at the time of such exercise and
issuance.
B. In connection with the exercise of this option, Optionee shall
execute and deliver to the Corporation such representations in writing as may be
requested by the Corporation in order for it to comply with the applicable
requirements of federal and state securities laws.
13. SUCCESSORS AND ASSIGNS. Except to the extent otherwise
provided in Paragraph 3 or 7, the provisions of this Agreement shall inure to
the benefit of, and be binding upon, the successors, administrators, heirs,
legal representatives and assigns of Optionee and the successors and assigns of
the Corporation.
14. LIABILITY OF CORPORATION.
A. If the Option Shares covered by this Agreement exceed, as of
the Grant Date, the number of shares of Common Stock which may without
stockholder approval be issued under the Plan, then this option shall be void
with respect to such excess shares unless stockholder approval of an amendment
sufficiently increasing the number of shares of Common Stock issuable under the
Plan is obtained in accordance with the provisions of Article Four, Section III
of the Plan.
B. The inability of the Corporation to obtain approval from any
regulatory body having authority deemed by the Corporation to be necessary to
the lawful issuance and sale of any Common Stock pursuant to this option shall
relieve the Corporation of any liability with respect to the non-issuance or
sale of the Common Stock as to which such approval shall not have been obtained.
However, the Corporation shall use its best efforts to obtain all such
approvals.
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15. NOTICES. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation in care of the Corporate Secretary at the Corporate Offices
at 000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000. Any notice required to be
given or delivered to Optionee shall be in writing and addressed to Optionee at
the address indicated below Optionee's signature line on the Grant Notice. All
notices shall be deemed to have been given or delivered upon personal delivery
or upon deposit in the U.S. mail, postage prepaid and properly addressed to the
party to be notified.
16. CONSTRUCTION/GOVERNING LAW. This Agreement and the option
evidenced hereby are made and granted pursuant to the Plan and are in all
respects limited by and subject to the express terms and provisions of the Plan.
The interpretation, performance and enforcement of this Agreement shall be
governed by the laws of the State of California without resort to that state's
conflict-of-laws rules.
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EXHIBIT I
NOTICE OF EXERCISE OF STOCK OPTION
I hereby notify InSite Vision Incorporated (the "Corporation")
that I elect to purchase _____________________ (____________) shares of the
Corporation's Common Stock (the "Purchased Shares") pursuant to that certain
option (the "Option") granted to me on _______________, 199_ to purchase up to
Ten Thousand (10,000) shares of such Common Stock at an option price of
$____________ per share (the "Option Price").
Concurrently with the delivery of this Exercise Notice to the
Secretary of the Corporation, I shall pay to the Corporation the Option Price
for the Purchased Shares in accordance with the provisions of my agreement with
the Corporation evidencing the Option and shall deliver whatever additional
documents may be required by such agreement as a condition for exercise.
____________________ ____________________________________
Date Optionee
Address: ____________________________________
____________________________________
Print name in exact manner
it is to appear on the
stock certificate:
____________________________________
____________________________________
Address to which
certificate is to be sent,
if different from address
above:
____________________________________
____________________________________
Social Security Number: ____________________________________
