EXHIBIT 7
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AMERICAN BIOGENETIC SCIENCES, INC.
1996 STOCK OPTION PLAN
INCENTIVE STOCK OPTION CONTRACT
THIS INCENTIVE STOCK OPTION CONTRACT entered into as of
October 20, 1999 between AMERICAN BIOGENETIC SCIENCES, INC., a Delaware
corporation (the "Company"), and Xxxxxx X. Xxxxx (the "Optionee"), residing at
000 Xxxxx Xxxxx, Xxxxxxxxxxx, Xxx Xxxx 00000.
W I T N E S S E T H:
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1. The Company, in accordance with the allotment made by the
Compensation Committee of the Company's Board of Directors (the "Committee") and
subject to the terms and conditions of the 1996 Stock Option Plan of the Company
(the "Plan"), grants to the Optionee an option to purchase an aggregate of
100,000 shares of the Class A Common Stock, $.001 par value per share, of the
Company ("Common Stock") at an exercise price of $0.308 per share, being at
least equal to 110% of the fair market value of such shares of Common Stock on
the date hereof. This option is intended to constitute an incentive stock option
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), although the Company makes no representation or warranty
as to such qualification.
2. The term of this option shall be five years from the date
hereof, subject to earlier termination as provided in the Plan. However, this
option shall not be exercisable until April 20, 2000, at which time it shall
become fully exercisable. The right to purchase shares of Common Stock under
this option shall be cumulative, so that if the full number of shares
purchasable in a period shall not be purchased, the balance may be purchased at
any time or from time to time thereafter, but not after the expiration of the
option. Notwithstanding the foregoing, in no event may a fraction of a share of
Common Stock be purchased under this option.
3. This option shall be exercised by giving written notice to the
Company at its then New York office, presently 0000 Xxxxx Xxxxxx, Xxxxxxxx, Xxx
Xxxx 00000, Attention: Vice President, Finance, stating that the Optionee is
exercising the option hereunder, specifying the number of shares being purchased
and accompanied by payment in full of the aggregate purchase price therefor (a)
in cash or by certified check, (b) with previously acquired shares of Common
Stock which have been held by the Optionee for at least six months, or (c) a
combination of the foregoing.
4. The Company and/or any Subsidiary may withhold cash and/or
shares of Common Stock to be issued to the Optionee in the amount which the
Company determines is
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necessary to satisfy its obligation to withhold taxes or other amounts incurred
by reason of the grant or exercise of this option or the disposition of the
underlying shares of Common Stock. Alternatively, the Company may require the
Optionee to pay the Company such amount in cash promptly upon demand.
5. In the event of any disposition of the shares of Common Stock
acquired pursuant to the exercise of this option within two years from the date
hereof or one year from the date of transfer of such shares to him, the Optionee
shall notify the Company thereof in writing within 30 days after such
disposition. In addition, the Optionee shall provide the Company on demand with
such information as the Company shall reasonably request in connection with
determining the amount and character of the Optionee's income, the applicable
deduction and the obligation to withhold taxes or other amount incurred by
reason of such disqualifying disposition, including the amount thereof. The
Optionee shall pay the Company and/or the Subsidiary, as the case may be, in
cash on demand the amount, if any, which the Company determines is necessary to
satisfy such withholding obligation.
6. Notwithstanding the foregoing, this option shall not be
exercisable by the Optionee unless (a) a Registration Statement under the
Securities Act of 1933, as amended (the "Securities Act") with respect to the
shares of Common Stock to be received upon the exercise of this option shall be
effective and current at the time of exercise or (b) there is an exemption from
registration under the Securities Act for the issuance of the shares of Common
Stock upon such exercise. The Optionee hereby represents and warrants to the
Company that, unless such a Registration Statement is effective and current at
the time of exercise of this option, the shares of Common Stock to be issued
upon the exercise of this option will be acquired by the Optionee for his own
account, for investment only and not with a view to the resale or distribution
thereof. In any event, the Optionee will notify the Company of any proposed
resale of the shares of Common Stock issued to him upon exercise of this option.
If (i) the Optionee is an "affiliate" of the Company within the meaning of the
Securities Act at the time of any such resale or (ii) at the time of exercise of
this option the shares issued were not subject to a current and effective
Registration Statement under the Securities Act covering their issuance, then
any subsequent resale or distribution of shares of Common Stock by the Optionee
will be made only pursuant to (x) a Registration Statement under the Securities
Act which is effective and current with respect to the Optionee's sale of shares
of Common Stock being sold, or (y) a specific exemption from the registration
requirements of the Securities Act, but in claiming such exemption, the Optionee
shall, prior to any offer of sale or sale of such shares of Common Stock,
provide the Company (unless waived by the Company) with a favorable written
opinion of counsel, in form and substance satisfactory to the Company, as to the
applicability of such exemption to the proposed sale or distribution. Such
representations and warranties shall also be deemed to be made by the Optionee
upon each exercise of this option. Nothing herein shall be construed as
requiring the Company to register the shares subject to this option under the
Securities Act.
7. Notwithstanding anything herein to the contrary, if at any time
the Committee shall determine, in its discretion, that the listing or
qualification of the shares of Common Stock subject to this option on any
securities exchange or under any applicable law, or the consent or approval of
any governmental regulatory body, is necessary or desirable as a condition to,
or in connection with, the granting of an option or the issue of shares of
Common
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Stock hereunder, this option may not be exercised in whole or in part unless
such listing, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Committee.
8. The Company may affix appropriate legends upon the certificates
for shares of Common Stock issued upon exercise of this option and may issue
such "stop transfer" instructions to its transfer agent in respect of such
shares as it determines, in its discretion, to be necessary or appropriate to
(a) prevent a violation of, or to perfect an exemption from, the registration
requirements of the Securities Act, (b) implement the provisions of the Plan or
this Contract or any other agreement between the Company and the Optionee with
respect to such shares of Common Stock, or (c) permit the Company to determine
the occurrence of a "disqualifying disposition," as described in Section 421(b)
of the Code, of the shares of Common Stock transferred upon the exercise of this
option.
9. Nothing in the Plan or herein shall confer upon the Optionee
any right to continue in the employ of the Company, any Parent or any of its
Subsidiaries, or interfere in any way with any right of the Company, any Parent
or its Subsidiaries to terminate such employment at any time for any reason
whatsoever without liability to the Company, any Parent or any of its
Subsidiaries.
10. The Company and the Optionee agree that they will both be
subject to and bound by all of the terms and conditions of the Plan, a copy of
which is attached hereto and made a part hereof. Any capitalized term not
defined herein shall have the meaning ascribed to it in the Plan. In the event
of a conflict between the terms of this Contract and the terms of the Plan, the
terms of the Plan shall govern.
11. The Optionee represents and agrees that he will comply with
all applicable laws relating to the Plan and the grant and exercise of this
option and the disposition of the shares of Common Stock acquired upon exercise
of the option, including without limitation, federal and state securities and
"blue sky" laws.
12. This option is not transferable by the Optionee otherwise than
by will or the laws of descent and distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee or the Optionee's legal
representatives.
13. This Contract shall be binding upon and inure to the benefit
of any successor or assign of the Company and to any heir, distributee,
executor, administrator or legal representative entitled to the Optionee's
rights hereunder.
14. This Contract shall be governed by, and construed and enforced
in accordance with, the laws of the State of Delaware, without regard to the
conflicts of law rules thereof.
15. The invalidity or illegality of any provision herein shall not
affect the validity of any other provision.
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16. The Optionee agrees that the Company may amend the Plan and
the options granted to the Optionee under the Plan, subject to the limitations
contained in the Plan.
IN WITNESS WHEREOF, the parties hereto have executed this Contract
as of the day and year first above written.
AMERICAN BIOGENETIC SCIENCES, INC.
By:/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx, Secretary-Treasurer
/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx, Optionee
000 Xxxxx Xxxxx
Xxxxxxxxxxx, Xxx Xxxx 00000
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