WAFERGEN BIO-SYSTEMS, INC. NONSTATUTORY STOCK OPTION AGREEMENT
EXHIBIT 10.5
This Nonstatutory Stock Option Agreement (this “Agreement”) is executed August 27th, 2014, by and between WAFERGEN BIO-SYSTEMS, INC., a Delaware corporation (the “Company”), and Xxxxxxx X. Xxxxxxxx (“Employee”).
(a) Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Employment Agreement.
(b) The Administrator (as defined below) shall make all interpretations, rules and regulations necessary to administer this Agreement, and such determinations of the Administrator shall be binding upon Employee. For purposes of this Agreement, the term “Administrator” shall mean the Compensation Committee of the Board of Directors.
(1) for one (1) year after Employee’s death, but in no event subsequent to the expiration dates specified in Section 3(b), above; and
(2) only (i) by the designated beneficiary of Employee (such designation to be made in writing at such time and in such manner as the Administrator shall approve or prescribe), or (ii) if Employee dies without a surviving designated beneficiary, by the personal representative, administrator, or other representative of the estate of Employee, or by the person or persons to whom the deceased rights of Employee under the Option shall pass by will or the laws of descent and distribution. Employee may change the beneficiary designation at any time, by giving written notice to the Administrator, subject to such conditions and requirements as the Administrator may prescribe in accordance with applicable law.
2
5. Method of Exercising Option. Except as otherwise permitted by the Administrator, the Option shall be exercisable by delivery to the Company (to the attention of its Secretary), at its offices in Fremont, California, of (i) written notice identifying the Option and stating the number of Shares with respect to which it is being exercised, (ii) payment in full of the exercise price of the Shares then being acquired as provided in Section 6, below, and (iii) execution of such other documentation as is determined to be necessary or appropriate by the Administrator from time to time the form of which shall be provided to Employee at the time of execution and delivery of this Agreement. The Company shall have the right to delay the issue or delivery of any Shares to be delivered hereunder until (i) the completion of such registration or qualification of such Shares under federal, state, or foreign law, ruling, or regulation as the Company shall deem to be necessary or advisable, and (ii) receipt from Employee of such documents and information as the Administrator may deem necessary or appropriate in connection with such registration or qualification or the issuance of Shares hereunder.
3
10. Notices. Any notice to be given to the Company under the terms of this Agreement shall be given in writing to the Company at its offices in Fremont, California. Any notice to be given to Employee may be addressed to Employee’s address as it appears on the payroll records of the Company or any subsidiary thereof. Any such notice shall be deemed to have been duly given if and when actually received by the party to whom it is addressed, as evidenced by a written receipt to that effect.
4
arrangement provided to Employee unless expressly so provided by such other plan, contract or arrangement, or unless the Administrator expressly determines otherwise.
15. Entire Agreement. This Agreement, together with the Employment Agreement by and between the Employee and Company effective August 25th, 2014 (the “Employment Agreement”), constitutes the final understanding between Employee and the Company regarding the Option.
16. Severability. In the event any provision of this Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Agreement, and this Agreement shall be construed and enforced as if the illegal or invalid provision had not been included.
17. Governing Law. This Agreement and all actions taken hereunder shall be governed by, and construed in accordance with, the laws of the State of California, applied without regard to the laws of any other jurisdiction that otherwise would govern under conflict of law principles.
[Signature Page Follows]
5
By:
|
/s/ Xxxx Xxxxxxxxxxx
|
|
Name: Xxxx Xxxxxxxxxxx
|
||
Title: President and Chief Executive Officer
|
The undersigned Employee hereby accepts the foregoing Option and agrees to the several terms and conditions hereof.
/s/ Xxxxxxx X. Xxxxxxxx
|
|
Xxxxxxx X. Xxxxxxxx
|
[Signature Page - Option Award Agreement]
Annex 1
For so long as Employee remains continuously an employee of the Company, this Option shall vest and become exercisable over a three (3) year period with one-third (1/3) of the Option vesting on the first (1st) anniversary hereof, and the remaining two-thirds (2/3) of the Option vesting in eight (8) equal quarterly installments over two (2) years following the first (1st) anniversary hereof.
Notwithstanding the foregoing, if the Company terminates Employee’s employment with the Company other than For Cause within three (3) months before or twelve (12) months following a “Change of Control”, this Option shall vest and become exercisable in full on the date of such termination. For purposes of this Agreement, “Change of Control” shall mean (A) a sale or disposition (including by way of liquidation) of all or substantially all of the assets of the Company; or (B) the acquisition of the Company by another entity by means of any reorganization, merger or consolidation (but excluding any reorganization, merger or consolidation effected exclusively for the purpose of changing the domicile of the Company) or series of related transactions, in each case in which the Company’s stockholders of record as constituted immediately prior to such transaction or series of related transactions will, immediately after such transaction or series of related transactions (by virtue of securities issued in such transaction or series of related transactions) fail to hold at least 50% of the voting power of the resulting or surviving corporation following such transaction or series of related transactions; provided, however, that (i) any transaction or series of transactions principally for bona fide equity financing purposes in which cash is received by the Company or indebtedness of the Company is cancelled or converted (or a combination thereof) shall not be deemed to be a Change of Control; (ii) any transaction or series of transactions resulting in Great Point Partners, LLC, Deerfield Management or their affiliates owning individually or together in the aggregate 50% or more of the voting power of the resulting or surviving corporation following such transaction or series of related transactions shall not be deemed to be a Change of Control; or (iii) any transaction or series of transactions in which individual investors are selling their equity interests in the Company to individual buyers in privately-negotiated transactions to which the Company is not a party shall not be deemed to be a Change of Control.
Except as described in the preceding paragraph or determined by the Administrator, upon Employee’s termination of employment for any reason, Employee shall forfeit the Option or portion of the Option that has not vested at the time of such termination. Notwithstanding the foregoing, the Administrator may, in its discretion, accelerate the date that any installment of this Option becomes exercisable. The foregoing rights are cumulative and may be exercised only before the date which is seven (7) years from the date of this Option. Following the expiration of this Option in accordance with the preceding sentence, all of Employee’s rights hereunder will be forfeited and canceled in their entirety.
If Employee ceases to remain continuously an employee of the Company, other than by reason of death or Disability or termination For Cause, no further installments of this Option shall become exercisable, and this Option shall expire (may no longer be exercised) after the passage of ninety (90) days from Employee’s last day of employment, but in no event later than the scheduled expiration date. Following the expiration of this Option in accordance with the preceding
sentence, all of Employee’s rights to exercise the Option will be forfeited and canceled in their entirety.
If Employee ceases to remain continuously an employee of the Company as the result of termination For Cause, this Option shall expire (that is, may no longer be exercised) upon Employee’s receipt of written notice of such termination and shall thereafter not be exercisable to any extent whatsoever. Following the expiration of this Option in accordance with the preceding sentence, all of Employee’s rights hereunder to exercise the Option will be forfeited and canceled in their entirety.
If Employee dies while employed by the Company, this Option may be exercised, to the extent otherwise exercisable on the date of death, by Employee’s estate, personal representative or beneficiary to whom this Option has been transferred, only at any time within one (1) year after the date of death, but not later than the scheduled expiration date. Following the expiration of this Option in accordance with the preceding sentence, all of Employee’s rights to exercise the Option will be forfeited and canceled in their entirety.
If Employee ceases to remain continuously an employee of the Company by reason of Disability, this Option may be exercised, to the extent otherwise exercisable on the date of cessation of employment, only at any time within one year after such cessation of employment, but not later than the scheduled expiration date. Following the expiration of this Option in accordance with the preceding sentence, all of Employee’s rights to exercise the Option will be forfeited and canceled in their entirety.