OMNIMMUNE CORP. Executive Stock Option Agreement
Exhibit
4.1
OMNIMMUNE
CORP.
Omnimmune
Corp., a Texas corporation (the “Company”), hereby grants to the undersigned
optionee (“Optionee”) a non-qualified option (this “Option”) to purchase the
total number of shares of common stock of the Company shown below (“Shares”) at
the exercise price per Share set forth below (the “Exercise Price”), subject to
all of the terms and conditions set forth in this Agreement (the
“Agreement”). The term “Company” means and includes the Company as
well as any successor entity resulting from the merger or consolidation of the
Company with another entity.
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Shares
Subject to Option:
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Exercise
Price Per Share:
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Term
of Option:
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Vesting:
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Grant
Date:
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1. Exercise Period
of Option. Subject to the
terms and conditions of this Agreement, and unless otherwise modified in writing
signed by the Company and Optionee, this Option may be exercised with respect to
all of the Shares subject to this Option prior to the date which is the last day
of the Term (hereinafter “Expiration Date”).
2. Restrictions on
Exercise. This Option may
not be exercised, unless such exercise is in compliance with the Securities Act
of 1933 and all applicable state securities laws, as they are in effect on the
date of exercise, and the requirements of any stock exchange or national market
system on which the Company’s Shares may be listed at the time of
exercise. Optionee understands that the Company is under no
obligation to register, qualify or list the Shares subject to this Option with
the Securities and Exchange Commission (“SEC”), any state securities commission
or any stock exchange to effect such compliance.
3. Manner of
Exercise.
(a) Exercise
Agreement. This Option shall be exercisable by delivery to the
Company of an executed Exercise Agreement (“Exercise Agreement”) in the form of
the Exercise Agreement delivered to Optionee, if applicable, or in such form as
may be approved or accepted by the Company, which shall set forth Optionee’s
election to exercise this Option with respect to some or all of the Shares
subject to this Option, the number of Shares subject to this Option being
purchased, and any restrictions imposed on the Shares subject to this Option
(including, without limitation, investment intent restrictions, restrictions on
transfer, “lock up” type restrictions in the case of a public offering of the
Company’s securities, restrictions or limitations that would be applied to
Shareholders under any applicable restriction agreement among the Shareholders,
and restrictions under applicable federal securities laws, under the
requirements of any stock exchange or market upon which such Shares are then
listed and/or traded, and/or under any blue sky or state securities laws
applicable to such Shares). The Company may modify the required
Exercise Agreement at any time.
(b) Exercise Price. Such Exercise
Agreement shall be accompanied by full payment of the Exercise Price for the
Shares being purchased. Payment for the Shares being purchased may be
made in U.S. dollars in cash (by check), or by delivery to the Company of a
number of Shares which have been owned and completely paid for by the holder for
the requisite period necessary to avoid a charge to the Company’s earnings for
financial reporting purposes having an aggregate Fair Market Value (as defined
below) equal to the amount to be tendered, or a combination
thereof. In addition, this Option may be exercised through a
brokerage transaction following registration of the Company’s equity securities
under Section 12 of the Securities Exchange Act of 1934 as permitted under the
provisions of Regulation T applicable to cashless exercises promulgated by the
Federal Reserve Board.
(c) Withholding
Taxes. Prior to the issuance of Shares upon exercise of this
Option, Optionee must pay, or make adequate provision for, any applicable
federal or state withholding obligations of the Company. Optionee may
provide for payment of withholding taxes upon exercise of the Option by
requesting that the Company retain Shares with a Fair Market Value equal to the
minimum amount of taxes required to be withheld. In such case, the
Company shall issue the net number of Shares to Optionee by deducting the Shares
retained from the Shares exercised.
(d) Issuance of Shares. Provided
that such Exercise Agreement and payment are in form and substance satisfactory
to counsel for the Company, the Company shall cause the Shares purchased to be
issued in the name of Optionee or Optionee’s legal
representative. Optionee shall not be considered a shareholder until
such time as Shares have been issued as noted on the books of the
Company. If this Option should be exercised in part only, the Company
shall, upon surrender of this Option for cancellation, execute and deliver a new
Option evidencing the right of the Optionee to purchase the balance of the
Shares subject hereto.
(e) Securities
Regulation. Upon the receipt of Shares as a result of the
exercise of this Option, Optionee shall hold such Shares for investment and not
with a view of resale or distribution to the public. In addition, if
the Optionee is an officer, director or ten percent (10%) beneficial owner of
any class of the Company’s equity securities that is registered pursuant to
Section 12 of the Exchange Act, a tender of Shares or a cashless exercise must
(1) meet the requirements of an exemption under Rule 16b-3 promulgated under the
Exchange Act, or (2) be a subsequent transaction the terms of which were
provided for in a transaction initially meeting the requirements of an exemption
under Rule 16b-3 promulgated under the Exchange Act.
(f) Cashless
Exercise. In lieu of the payment of the Exercise Price in cash
or by delivery of previously owned Shares, the Optionee may require the Company
to convert this Option, in whole or in part, into Shares (“cashless
exercise”). Upon such cashless exercise, the Company shall deliver to
the Optionee that number of Shares equal to the quotient obtained by dividing
(x) the value of this Option (or portion thereof if being exercised in part) at
the time of the cashless exercise (determined by subtracting the aggregate
Exercise Price of the Shares as to which the Option is being exercised from the
aggregate Fair Market Value of the Shares as to which the Option is being
exercised) by (y) the Fair Market Value of one Share immediately prior to the
cashless exercise.
For purposes of this Agreement, “Fair
Market Value” of each Share on any date shall be deemed to be the average of the
daily closing prices for the five consecutive trading days immediately preceding
the date in question. The closing price for each day shall be the
last reported sales price or, in case no such reported sale takes place on such
day, the closing bid price, in either case on the principal national securities
exchange on which the Shares are listed or admitted to trading or, if the Shares
are not listed or admitted to trading on any national securities exchange, the
highest reported bid price for the Shares as furnished by the National
Association of Securities Dealers, Inc. through Nasdaq or a similar organization
if Nasdaq is no longer reporting such information. In the absence of
an established public trading market for the Shares, the Fair Market Value of a
Share shall be determined in good faith by the board. For all purposes of this Agreement,
Fair Market Value shall be determined by the Company consistent with the
requirements of Section 409A of the Internal Revenue Code of 1986, as may be
amended from time to time.
4. Antidilution
Protection. If at any time
following the Grant Date the Company shall sell or issue additional shares of
common stock, the number of Shares shall be automatically increased such that
the Shares shall at all times following the Grant Date during the Term represent
five percent (5%) of the issued and outstanding common stock of the
Company. Immediately following the closing of each such sale or
issuance of additional shares of common stock, the Company shall deliver to
Optionee written notice of such increase in the number of Shares and/or an
additional Stock Option Agreement granting the Optionee such number of
additional options such that Optionee, upon exercise thereof, will own five
percent (5%) of the issued and outstanding common stock of the Company and which
options shall have a per share exercise price of no less than the Fair Market
Value of a share of common stock of the Company as of the date of such
grant.
5. Adjustments.
(a) Capital
Adjustments. In case the Company shall at any time after the
Grant Date: (i) declare a dividend on the outstanding common stock payable in
shares of its capital stock, (ii) subdivide its outstanding common stock, or
(iii) combine the outstanding common stock into a smaller number of shares,
then, in each case, the Exercise Price in effect, and the number of Shares, at
the time of the record date for such dividend or of the effective date of such
subdivision or combination, shall be proportionately adjusted so that the
Optionee shall be entitled to receive the aggregate number and kind of Shares,
for the same aggregate Exercise Price as in effect immediately prior to such
dividend, subdivision or combination, which, if this Option had been exercised
immediately prior to such time, the Optionee would have owned upon such exercise
and been entitled to receive by virtue of such dividend, subdivision, or
combination. Such adjustment shall be made successively whenever any
event listed above shall occur. Any adjustment under this paragraph
shall become effective at the close of business on the date the dividend,
subdivision or combination becomes effective.
(b) Mergers, Consolidations or Sale of
Assets. If the Company is a party to a reorganization, or a
merger or consolidation with or into another corporation, or the sale of the
Company’s properties and assets as, or substantially as, an entirety to any
other person, then, as a part of such transaction, lawful provision shall be
made so that this Option shall pertain and apply to the securities and/or other
property to which the Optionee of the number of shares of common stock of the
Company then covered by this Option would have been entitled had this Option
been exercised in whole immediately prior to the effective date of such
reorganization, merger, consolidation or sale. In any such case,
appropriate adjustment shall be made in the application of the provisions of
this Option with respect to the rights and interests of the Optionee after the
reorganization, merger, consolidation or sale to the end that the provisions of
this Option shall be applicable after that event, as near as reasonably may be,
in relation to any securities or other property deliverable after that event
upon exercise of this Option. The Company shall not effect any such
reorganization, merger, consolidation or sale unless upon or prior to the
consummation thereof the successor corporation, or if the Company shall be the
surviving corporation and is not the issuer of the shares of stock or other
securities or property to be delivered to the Optionee, then such issuer, shall
assume by written instrument the obligation to deliver to the Optionee such
shares of stock, securities, cash or other property as the Optionee shall be
entitled to purchase in accordance with the foregoing provisions.
(c) Notice to Optionee of
Adjustment. Whenever the number of Shares or the Exercise
Price is adjusted as herein provided, the Company shall cause to be mailed to
the Optionee a notice (i) stating that the number of Shares have been adjusted,
(ii) setting forth the adjusted number of Shares, (iii) the Exercise Price, as
adjusted, and (iv) showing in reasonable detail the computations and the facts,
including the amount of consideration received or deemed to have been received
by the Company, upon which such adjustments are based.
(d) De Minimis
Adjustments. All calculations under this Section 6 shall be
made to the nearest cent or to the nearest share, as the case may be; provided,
however that, no adjustment in the Exercise Price shall be required if such
adjustment is less than $.01; and provided, further, that any adjustments which
by reason of this Section 6 are not required to be made shall be carried forward
and taken into account in any subsequent adjustment.
6. Nontransferability
of Option. This Option may
not be transferred in any manner, other than by will or by the laws of descent
and distribution, and by the Optionee as a bona fide gift (i) to his spouse,
lineal descendant or lineal ascendant, siblings and children by adoption, (ii)
to a trust for the benefit of one or more individuals described in clause (i)
and no other persons, or (iii) to a partnership of which the only partners are
one or more individuals described in clause (i), in which case the transferee
shall be subject to all provisions hereof. This Option may be
exercised during Optionee’s lifetime only by Optionee or to the extent allowed
by the Agreement. The terms of this Option shall be binding upon the
executor, administrators, successors and assigns of Optionee.
7. Change of Control
of the Company. If a Change of Control occurs and if the
agreements effectuating the Change of Control do not provide for the assumption
or substitution of the Option granted under this Agreement, the Board, in its
sole and absolute discretion, may take any or all of the following actions to be
effective as of the date of the Change of Control (or as of any other date fixed
by the Board occurring within the thirty (30) day period immediately preceding
the date of the Change of Control, but only if such action remains contingent
upon the effectuation of the Change of Control) (such date referred to as the
“Option Action Effective Date”):
(a) Unilaterally
cancel this Option in exchange for:
(i) whole
and/or fractional Shares (or for whole Shares and cash in lieu of any fractional
Share) or whole and/or fractional Shares of a successor (or for whole Shares of
a successor and cash in lieu of any fractional Share) that, in the aggregate,
are equal in value to the excess of the Fair Market Value of the Shares, as such
term is defined below, that could be purchased subject to such this Option
determined as of the Option Action Effective Date over the aggregate Exercise
Price for such Shares; or
(ii) cash
or other property equal in value to the excess of the Fair Market Value of the
Shares that could be purchased subject to such this Option determined as of the
Option Action Effective Date over the aggregate Exercise Price for such
Shares.
(b) Unilaterally
cancel this Option after providing Optionee with (i) an opportunity to exercise
the Option to the extent vested within a specific period prior to the date of
the Change of Control, and (ii) notice of such opportunity to exercise prior to
the commencement of such specified period.
For the
purposes of this Agreement, a “Change in Control” shall mean either of the
following:
(a) any
transaction or series of transactions pursuant to which the Company sells,
transfers, leases, exchanges or disposes of substantially all (i.e., at least eighty percent
(80%)) of its assets for cash or property, or for a combination of cash and
property, or for other consideration; or
(b) any
transaction pursuant to which persons who are not current shareholders of the
Company acquire by merger, consolidation, reorganization, division or other
business combination or transaction, or by a purchase of an interest in the
Company, an interest in the Company so that after such transaction, the
shareholders of the Company immediately prior to such transaction no longer have
a controlling (i.e.,
50% or more) voting interest in the Company.
However,
notwithstanding the foregoing, in no event shall a registered public offering of
securities of the Company consummated after the date hereof constitute a Change
of Control or be included in the calculations above to determine whether a
Change of Control has occurred.
8. Tax
Consequences. Optionee
understands that the grant and exercise of this Option, and the sale of Shares
obtained through the exercise of this Option, may have tax implications that
could result in adverse tax consequences to Optionee. Optionee
represents that Optionee has consulted with, or will consult with, his or her
tax advisor; Optionee further acknowledges that Optionee is not relying on the
Company for any tax, financial or legal advice; and it is specifically
understood by the Optionee that no representations or assurances are made as to
any particular tax treatment with respect to the Option.
9. Interpretation. Any dispute
regarding the interpretation of this Agreement shall be submitted to the
Board. The resolution of such a dispute by the Board or a committee
thereof shall be final and binding on the Company and Optionee.
10. Entire Agreement
and Other Matters. Any Exercise
Agreement attached hereto is incorporated herein by
reference. Optionee acknowledges and agrees that the granting of this
Option constitutes a full accord, satisfaction and release of all obligations or
commitments made to Optionee by the Company or any of its officers, directors,
shareholders or affiliates with respect to the issuance of any securities, or
rights to acquire securities, of the Company or any of its
affiliates. This Agreement and the Exercise Agreement constitute the
entire agreement of the parties hereto, and supersede all prior understandings
and agreements with respect to the subject matter hereof. This
Agreement and the underlying Option are void ab initio unless this
Agreement has been executed by the Optionee and the Optionee has agreed to all
terms and provisions hereof.
Optionee hereby represents that
Optionee has read and understands the terms and provisions of the Agreement, and
accepts this Option subject to all the terms and conditions of the Agreement and
this Agreement. Optionee acknowledges that there may be adverse tax
consequences upon exercise of this Option or disposition of Shares purchased by
exercise of this Option, and that Optionee should consult a tax adviser prior to
such exercise or disposition.
OPTIONEE:
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IN WITNESS
WHEREOF, this Agreement has been executed by the Company by a duly
authorized officer as of the date specified hereon.
Omnimmune
Corp.
By:
Name:
Title:
