NONQUALIFIED STOCK OPTION AGREEMENT NQSO-006
THIS NONQUALIFIED STOCK OPTION AGREEMENT ("Agreement") is made and
entered into on February 4, 1993, by and between XXXXXXX LABORATORIES, INC.,
a California corporation ("Company"), and Xxxxxx X. Xxxxx ("Optionee").
1. GRANT OF OPTION. The Company hereby irrevocably grants to the
Optionee, on the terms and subject to the conditions set forth in this
Agreement, the right and option ("Option") to purchase all or any part of an
aggregate of 20,000 shares ("Option Shares") of the Company's common stock, such
number being subject to adjustment as provided in Section 9 hereof. It is
understood by the parties hereto that the Option is not intended to qualify as
an "incentive stock option" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"). If Optionee is an employee of
the Copmany or a parent or a subsidiary of the Company, it is further understood
by the parties hereto that the Option has been granted as a matter of separate
inducement and agreement in connection with the employment of the Optionee and
is not in lieu of any salary or other compensation for the Optionee's services.
2. OPTION EXERCISE PRICE. The exercise price for the Option Shares shall
be $5.50 per share. The exercise price shall be paid in full as provided in
Section 10 hereof.
3. TERM OF OPTION. The term of the Option shall be for a period of five
(5) years from the date hereof, subject to earlier termination as provided in
Sections 7 and 8 hereof.
4. EXERCISABILITY OF OPTION.
(a) Subject to the provisions of Section 4(b) hereof, the Option
shall be exercisable in accordance with the following schedule:
Percentage of Option
Date Shares Purchasable
---- --------------------
On or after February 4, 1993 20%
On or after February 4, 1994 40%
On or after February 4, 1995 60%
On or after February 4, 1996 80%
On or after February 4, 1997 100%
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The Optionee's right to exercise the Option shall be cumulative as to the Option
Shares covered thereby.
(b) The Company's grant of the Option is based upon the assumption that
the Optionee's exercise of the Option and the Company's issuance of the Option
Shares as a result of such exercise will be exempt from registration under the
Securities Act of 1933, as amended (the "Securities Act"). In the event that
the Company's assumption is erroneous, the Option may not be exercised unless
and until a registration statement under the Securities Act relating to the
Option Shares shall be in effect, or unless and until the issuance of the Option
Shares upon the exercise of the Option shall be exempt from registration under
the Securities Act, in either of which events the term of the Option shall be
deemed to have been automatically extended through and including a period of
ninety (90) days from and after the date that such registration statement under
the Securities Act relating to the Option Shares first becomes effective or the
date that the issuance of the Option Shares upon the exercise of the Option
first becomes exempt from registration under the Securities Act, as the case may
be. In this regard, the Company shall use its best efforts to either register
the Option Shares in accordance with the registration requirements of the
Securities Act or to comply with any exemption therefrom with regard to the
issuance of the Option Shares. The Company shall promptly notify Optionee of
any automatic extension in the term of the Option in the event the foregoing
provisions become applicable. In all events, the Optionee shall give a written
representation satisfactory to legal counsel to the Company upon his exercise of
the Option that he is acquiring the Option Shares for investment purposes and
not with a view to, or for resale in connection with, the distribution of any
Option Shares or other securities of the Company.
5. LIMITATION ON OPTIONEE'S RIGHTS.
(a) The Optionee shall not have any of the rights of a shareholder of
the Company with respect to the Option Shares except to the extent that one or
more certificates for the Option Shares shall be delivered to him upon the due
exercise of the Option.
(b) If Optionee is an employee of the Company or a parent or a
subsidiary of the Company, nothing contained in this Agreement shall confer upon
the Optionee any right with respect to the continuation of his employment by the
Company or a parent or a subsidiary of the Company or interfere in any way with
the right of the Company or a parent or a subsidiary of the Company (subject to
the terms of any separate employment agreement to the contrary) to terminate his
employment at any time or to increase or decrease the compensation payable to
the Optionee.
6. NONTRANSFERABILITY OF OPTION. The Option shall not be transferable by
the Optionee otherwise than by will or the laws of descent and distribution, and
the Option
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may be exercised during the lifetime of the Optionee only by him. More
particularly, but without limiting the generality of the foregoing, the
Option may not be assigned, transferred (except upon the death of the
Optionee), pledged or hypothecated in any way, shall not be assignable by
operation of law and shall not be subject to execution, attachment or similar
process. Any attempted assignment, transfer, pledge, hypothecation or other
disposition of the Option contrary to the provisions hereof, and the levy of
any execution, attachment or similar process upon the Option, shall be null
and void and without effect.
7. EARLY TERMINATION OF OPTION. If Optionee is an employee of the
Company or a parent or a subsidiary of the Company as of the date of the grant
of the Option by the Company, the Option and all rights under this Agreement, to
the extent such rights shall not have been previously exercised, shall terminate
and become immediately null and void on the expiration of ninety (90) days after
the Optionee ceases to be an employee (whether by resignation, retirement,
dismissal, total disability, death or otherwise) of the Company or a parent or a
subsidiary of the Company; provided, however, the Option may thereafter by
exercised as follows:
(a) If the termination of employment was due to the Optionee's forced
retirement after becoming totally disabled, the Optionee may, at any time or
from time to time during a period of one hundred eighty (180) days after such
termination of his employment, exercise the Option (except that in no event may
the Option be exercised to any extent after the expiration of the term specified
in Section 3 hereof) to the extent such Option was exercisable by him on the
date of such termination of his employment.
(b) If the termination of employment was due to the death of the
Optionee while in the employ of the Company or a parent or a subsidiary of the
Company or in the event of his death within ninety (90) days after termination
of his employment, then the Option, to the extent that the Optionee was entitled
to exercise such Option on the date of his death in the first instance or the
date of his termination of employment in the second instance, may be exercised
within one (l) year after such death by the Optionee's executors,
administrators, heirs or legatees; provided, however, that in no event may the
Option be exercised to any extent after the expiration of the term specified in
Section 3 hereof.
8. NONSURVIVAL OF COMPANY. Where dissolution or liquidation of the
Company or any merger or combination in which the Company is not the surviving
corporation is involved, the Option shall terminate as of the effective date of
such liquidation, dissolution, merger or combination to the extent that the
Option is not assumed by, or replaced by equivalent options granted by, the
surviving corporation, if any, in such liquidation, dissolution, merger or
combination, but, in such event, the Optionee shall have the right, for a period
of thirty (30) days immediately prior to the effective date of such liquidation,
dissolution, or merger or combination, to exercise his Option, in whole or in
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part, to the extent that such Option shall not have been previously exercised
or so assumed or so replaced, without regard to any installment exercise
provisions.
9. CHANGES IN CAPITAL STRUCTURE. In the event that the outstanding
shares of common stock of the Company are changed into or exchanged for a
different number or kind of shares or other securities of the Company or of
another corporation by reason of merger, consolidation, other reorganization,
recapitalization, reclassification, combination of shares, stock dividend, stock
split or reverse stock split, the rights of the Optionee shall be appropriately
adjusted both as to the number of shares and the Option exercise price.
10. METHOD OF EXERCISING OPTION.
(a) Subject to the terms and conditions of this Agreement, the Option
may be exercised by written notice ("Exercise Notice") from the Optionee or
other person entitled to exercise the Option delivered to the Company stating
the election to exercise the Option and the number of the Option Shares in
respect of which it is being exercised, and shall be signed by the person or
persons so exercising the Option. The Exercise Notice shall be accompanied by
the full exercise price for the Option Shares in respect of which the Option is
being exercised. In the event the Option shall be exercised pursuant to Section
7(b) hereof by any person or persons other than the Optionee, the Exercise
Notice shall be accompanied by appropriate proof of the right of such person or
persons to exercise the Option.
(b) Payment of the exercise price shall be made by certified or bank
cashier's check, personal check or the equivalent thereof payable to the order
of the Company.
(c) The certificate or certificates for the Option Shares in respect
of which the Option shall have been exercised shall be registered in the name of
the person or persons exercising the Option, or, if the Option is exercised by
the Optionee and if the Optionee shall so request in the Exercise Notice, shall
be registered in the name of the Optionee and another person jointly, with right
of survivorship, and shall be delivered as provided above to or upon the written
order of the person or persons exercising the Option.
All of the Option Shares purchased upon the exercise of the Option as provided
herein shall, when issued, be fully paid and nonassessable.
11. ADEQUATE AUTHORIZED CAPITALIZATION. The Company shall at all times
during the term of the Option reserve and keep available or otherwise have
authorized such number of shares of the Company's common stock as will be
sufficient to satisfy the requirements of this Agreement, shall pay all fees and
expenses necessarily incurred by the Company in connection therewith, and shall
from time to time use its best efforts to comply
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with all laws and regulations which, in the opinion of legal counsel to the
Company, shall be applicable thereto.
12. NOTICES. All notices, requests, demands and other communications
called for or contemplated hereunder shall be in writing and shall be deemed to
have been duly given when personally delivered or when mailed by United States
certified or registered mail, postage prepaid, addressed to the following
parties or their successors in interest at the following addresses, or at such
other addresses as the parties may designate by written notice in the manner
aforesaid:
If to the Company: Xxxxxxx Laboratories, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attn: President
If to Optionee: (See address on signature page)
13. SUCCESSORS AND ASSIGNS. Subject to the limitations on transferability
contained in Section 6 hereof, this Agreement shall be binding upon and shall
inure to the benefit of the parties hereto, the Company's successors in interest
and assigns, and the Optionee's permitted successors in interest.
14. APPLICABLE LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first above written.
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"Company" "Optionee"
XXXXXXX LABORATORIES, INC. Xxxxxx X. Xxxxx
By: /s/ Xxxxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxx
--------------------------- -----------------------------
Its: President Signature
-----------------------
-----------------------------
Number and Street
-----------------------------
City, State and Zip Code
(If Optionee is unmarried as
of the date hereof, then he
shall sign his name again
below.)
I certify that, as of the date
hereof, I am not married.
-----------------------------
Name of Optionee
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