etrials Worldwide, Inc. NONQUALIFIED STOCK OPTION AGREEMENT
Exhibit
99.4
etrials
Worldwide, Inc.
THIS
NONQUALIFIED STOCK OPTION AGREEMENT, made and entered into as of the 18th day
of
May, 2007, by and between etrials Worldwide, Inc., a Delaware corporation (the
“Corporation”),
and
Xxxxxx Xxxxxxxx (the “Participant”).
WHEREAS,
on May 18, 2007, (the “Original
Grant Date”),
the
Board granted Participant an option to purchase Three Hundred Seventy Thousand
(370,000) shares of the Corporation’s common stock, $0.0001 par value per share
(the “Common
Stock”);
and
WHEREAS,
such option grant was approved by the Board of Directors of the Company,
including by a majority of the “Independent” Directors, as defined in NASDAQ
Rules, and the Non-Employee Directors as defined in Rule 16b-3 of the Securities
and Exchange Commission; and
WHEREAS,
such option granted pursuant to the 2005 Performance Equity Plan of the
Corporation (the “Plan”) (capitalized terms used herein shall have the meanings
set out in the Plan unless otherwise specified in this Agreement);
and
WHEREAS,
such option was granted as required by an Employment Agreement dated May 18,
2007 between the Company and Participant and the provisions of this Agreement
are subject to certain provisions of the Employment Agreement, which upon the
occurrence of certain events supersedes vesting, exercise and termination
provisions of this Agreement; and
WHEREAS,
this Agreement evidences the grant of such option.
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.
The
Corporation hereby grants Participant an option to purchase from the
Corporation, during the period specified in Section 2 of this Agreement, a
total
of Three Hundred Seventy thousand (370,000) shares of Common Stock, at the
purchase price of Four Dollars and Seventy Cents ($4.70)
per share (the “Purchase
Price”),
in
accordance with the terms and conditions stated in this Agreement. The shares
of
Common Stock subject to the option granted hereby are referred to below as
the
“Shares,”
and
the option to purchase such Shares is referred to below as the “Option.”
2. Vesting
and Exercise of Option.
The
Option shall vest and become exercisable in increments in accordance with the
schedule set forth below, provided that the Option shall vest and become
exercisable with respect to an increment as specified only if Participant is
providing services to the Corporation on the specified date for such
increment:
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(a) on
each
of the sixteen (16) quarterly anniversaries of the Original Grant Date
Twenty-Three Thousand One Hundred Twenty-Five (23,125) Options shall vest and
become exercisable.
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.
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 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 last date specified in any notice issued
to
Participant pursuant to Section 10.2 of the Plan that the Corporation has
accelerated the vesting of the Option, provided that the provisions in Section
10.2 regarding the tender of the Repurchase Value of such award have been
complied with;
(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 Termination of Employment or termination of service, as applicable;
or
(f) the
five
(5) year anniversary of the Grant Date at 5:00 P.M., eastern standard
time.
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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 whatsoever other than Normal Retirement,
includ-ing, without limitation, death, disability, voluntary termination,
involuntary termination, dismissal with or without cause or
resignation.
4. 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 13 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 9 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 good 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.
(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 evi-dencing 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.
5. 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.
6. 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 Corpo-ration 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, Partici-pant
acknowledges and agrees that Participant’s employment is “at will” unless
otherwise set forth in a written employment agreement between the Corporation
or
one of its affiliates 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.
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7. Burden
and Benefit; Corporation.
This
Agreement shall be binding upon, and shall inure to the benefit of, the
Corpora-tion and Participant, and their respective heirs, personal and legal
representatives, successors and assigns. As used in this Section 7 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
Corpora-tion or any corporation or entity which is an affiliate of the
Corporation by virtue of common (although not identical) owner-ship, 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
corpo-ration or entity.
8. Entire
Agreement; Authority of Committee.
This
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 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.
9. 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.
10.
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.
11.
Modifications.
No
change or modification of this Agreement shall be valid unless the same is
in
writing and signed by the parties hereto.
12.
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
incorpo-rated 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.
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13.
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 Company, Participant agrees to sign such agreement,
provided the officers of the Company 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/ Xxxxx X. Xxxxx, Xx.
Xxxxx
X.
Xxxxx, Xx.
Chief
Financial Officer
PARTICIPANT:
/s/
Xxxxxx Xxxxxxxx
Xxxxxx
Xxxxxxxx
Address:
_________________________
_________________________
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EXHIBIT
A
Attention:
Corporate Secretary - Xxxxx X. Xxxxx, Xx.
etrials
Worldwide, Inc.
0000
Xxxxxx Xxxxxx Xxxxxxx
Xxxxxxxxxxx,
Xxxxx Xxxxxxxx 00000
Re: Exercise
of Nonqualified Stock Option
Dear
Secretary:
Pursuant
to the terms and conditions of that certain Nonqualified Stock Option Agreement
dated as of _________________ ____, 200__ (the “Agreement”)
between ____________________________________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 13 of the
Agreement are true and correct on the date hereof as if made on the date
hereof.
Very
truly yours,
Print
Name:
Date:
__________________________
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