EXHIBIT NO. 6.1
EMPLOYMENT AGREEMENT
1. AGREEMENT
This writing represents an agreement ("Agreement")
between Xxxxxxx X. Xxxxx, 000 Xxxx Xxxxxxxxx Xx., Xxxxxxxxx
Xxxxx, XX 00000 (the "Employee") and TORVEC Inc., 00 Xxxx
Xxxx Xxxxx, Xxxxxxxxx, XX, 00000 (the "Employer") and
defines the employment relationship between the Employee and
the Employer.
2. THE EMPLOYEE'S POSITION
The Employee shall hold the positions of Chairman and
Chief Executive Officer and so long as elected by the
stockholders a member of the Board of Directors of
Employer.. The Employee's duties shall be those usual to
the Employee's position in the Employer's industry;
provided, however, the Employer, at the Employer's sole
discretion, may increase, decrease or otherwise modify the
Employee's duties. The Employee shall at all times exercise
his best efforts for Employer and shall diligently and
proficiently perform his duties for the Employer.
3. EMPLOYEE COMPENSATION
A. Annual Salary:
The Employer shall pay the Employee, in equal monthly
installments, at the rate of $150,000.00 per year.
B. Stock Options:
Subject to the approval by its shareholders of the
Company's 1998 Stock Option Plan, there is hereby granted to
the Employee a non-qualified stock option to purchase up to
100,000 shares of the Company's $.01 par value Common Stock
at an exercise price of $5.00 per share. The option granted
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hereby shall be subject to the terms and conditions set
forth in the Stock Option Agreement attached hereto and made
a part hereof. The term of the option shall be for a period
of 10 years, shall vest on a cumulative basis at a rate of
20% per year, shall provide for immediate and full vesting
in the event the Company is acquired and shall provide that
the right to exercise the option in accordance with its
terms shall survive the Employee's termination of
employment.
4. EMPLOYEE BENEFITS
A. Vacation:
The Employee is entitled to three (3) weeks paid
vacation for each twelve (12) months of this Agreement.
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B. Additional Benefits:
1. The Employee will be included in such fringe
benefit programs as the Employer hereafter adopts for the
benefit of all employees.
2. Employer will provide suitable housing for
Employee during such periods as Employee physically conducts
his business from the Rochester, New York metropolitan area.
3. For a period of eighteen months after the
commencement of this Agreement, Employer will pay to
Employee as additional compensation an amount equal to the
amount actually expended by Employee to continue COBRA
insurance coverages with his present employer.
4. 12 paid holidays per year.
5. Sick pay days accrue at the same rate as
vacation days.
5. TERM OF AGREEMENT
This Agreement shall be for a period of three (3) years
commencing on the first day of the month in which Employer
receives the proceeds from its initial public offering of
securities and shall automatically renew for three (3)
years, unless the Employer informs the Employee of its
intention to allow such Agreement to expire by giving
written notice to the Employee at least six (6) months prior
to the termination date.
6. CHANGE OF OWNERSHIP
If TORVEC Inc. is bought out by another company, this
Agreement may also be bought out at the prorated lump sum of
base pay and bonus for lesser of twelve months or the
remaining months on this Agreement.
7. TERMINATION OF THE CONTRACT
A. Cause of Termination:
1. Termination by the Employee
The Employee may terminate this Agreement, for any
reason, upon written notice to the Employer not fewer than
twelve (12) months before the date of the intended
termination.
2. Termination by Employer
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The Employer may at any time terminate this Agreement
without cause, by a notice to that effect to the Employee.
As severance compensation, the Employer shall continue to
pay the Employee his base pay and bonus for a period of
twelve (12) months, subject to the limitations in Paragraph
7B2(b) below.
The Employer may terminate this Agreement without
notice for just cause, including but not limited to,
habitual neglect of or failure to perform duties after
written warning from Employer to correct such failure, theft
or misappropriation, or the Employee's continued incapacity
due to mental or physical illness to perform the Employee's
duties.
In the event of termination because of incapacity to
perform due to mental or physical illness only, the Employer
shall pay the Employee's monthly salary and minimum bonus
for twelve (12) months.
B. Effect of Termination of Agreement:
Except as otherwise provided herein, upon expiration
of the term of this Agreement, or by termination pursuant to
any provision of this Agreement, all obligations of the
Employee and the Employer shall terminate.
If the Employer gives notice to the Employee as
provided in Paragraph 7A2 herein:
1. The Employee agrees:
(a) To continue to devote his best efforts and
time to performance of his duties for the Employer and to
cooperate with the Employer in effecting an orderly transfer
of responsibilities and duties to a successor over a period
of time to be determined by the Employer in its sole
discretion, but not to exceed three (3) months.
(b) To consult with the Employer as may
reasonably be required.
2. The Employer agrees:
(a) To cooperate in the Employee's effort to
obtain new employment;
(b) To continue to pay the Employee, at the rate
required hereunder, including both salary and minimum bonus
until the Employee obtains new employment or until the
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conclusion of twelve (12) months; and, to the extent the
Employee's total compensation in his new employment is less
than his total compensation (salary and bonus) from the
Employer would have been, the Employer shall pay the
difference between the total compensation in the new
employment and the total compensation that the Employee
would have earned with the Employer until the conclusion of
the term of the twelve (12) months following termination;
(c) To provide the benefits provided by this
Agreement to the Employee until the Employee obtains new
employment or until expiration of twelve (12) months
whichever occurs first.
8. CONFIDENTIALITY AND TRANSFER OF INVENTIONS
A. Except as may be required by his employment
hereunder, Employee will not at any time or in any manner,
directly or indirectly, divulge, disclose or communicate to
any person, firm, corporation, organization or entity any
Trade Secrets of Employer. Trade Secrets include
information concerning matters affecting or relating to the
products, pricing, marketing and sales strategies, servicing
of products, processes, formulas, inventions, discoveries,
devices, finances or business of Employer or of its
customers. Employee will at all times hold inviolate and
keep secret all knowledge or information and Trade Secrets
acquired by him concerning the names of the Employer's
customers, their addresses, the prices Employer obtains or
has obtained from them for its goods or services, all
knowledge or information acquired by him concerning the
products, formulas, processes, marketing and sales
methodology and training and all other trade secrets of
Employer's customers. In addition, Employee shall make no
disclosure, directly or indirectly, of any financial
information, contractual relationships, policies, past or
contemplated future actions of policies of Employer,
personnel matters, marketing or sales strategies or data,
pricing information, technical data or specifications and
written or oral communications of any sort of Employer or
any of its customers which have not previously been
disclosed to the general public with Employer's consent or
without first obtaining the consent of Employer for such
disclosure. Upon any termination of this Agreement or
Employee's employment, Employee or his representatives shall
immediately deliver to Employer all notes, notebooks,
letters, papers, drawings, memos, communications, blueprints
or other writings or data relating to the business of
Employer or its customers.
B. Employee shall promptly disclose to Employer all
ideas, discoveries, designs, improvements, innovations and
inventions (collectively referred to herein as
"inventions"), whether patentable or not, either relating to
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the existing business, products, plans, processes, or
procedures of Employer, or any parent or subsidiary of
Employer, or suggested by or resulting from Employee's work
at Employer, or resulting wholly or in part from the use of
Employer's time, material, facilities or ideas, which
Employee makes or conceives, in whole or in part, whether or
not during working hours, alone or with others, at any time
during the term of his employment pursuant to this Agreement
or during the first six-month period immediately following
termination of his employment for any reason, and Employee
agrees that all such inventions shall be the exclusive
property of Employer.
C. Employee hereby assigns to Employer all his rights
and interests in and to all such inventions and all patents
which may be obtained on them, in this or any foreign
country. At Employer's expense, but without charge to it,
Employee agrees to execute, acknowledge and deliver to
Employer any specific assignments to any such inventions or
other relevant documents and take any such further action as
may be considered necessary by Employer at any time to
obtain or defend letters patent in any and all countries or
to obtain documents relating to registration, ownership or
transfer of copyrights, or to vest title in such inventions
in Employer or its assigns or to obtain for Employer any
other legal protection for such inventions.
D. Because Employee shall acquire by reason of his
employment and association with Employer an extensive
knowledge of Employer's Trade Secrets, customers,
procedures, and other confidential information, the parties
hereto recognize that in the event of a breach or threat of
breach by Employee of the terms and provisions contained in
this Paragraph 8, compensation alone to Employer would not
be an adequate remedy for a breach of those terms and
provisions. Therefore, it is agreed that in the event of a
breach or threat of a breach of the provisions of this
Paragraph 8 by Employee, Employer shall be entitled to an
immediate injunction from any court of competent
jurisdiction restraining Employee from committing or
continuing to commit a breach of such provisions without the
showing or proving of actual damages. Any preliminary
injunction or restraining order shall continue in full force
and effect until any and all disputes between the parties
regarding this Agreement have been finally resolved on the
merits by settlement or by a court of law. Employee hereby
waives any right he may have to require Employer to post a
bond or other security with respect to obtaining or
continuing any such injunction or temporary restraining
order and, further, hereby releases Employer, its officers,
directors, employees and agents from and waives any claim
for damages against them which he might have with respect to
Employer's obtaining in good faith any injunction or
restraining order pursuant to this Agreement.
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Employee agrees that any action for injunction brought
pursuant to this Paragraph 8 may be brought in the New York
State Supreme Court in the County of Monroe and hereby
submits to the jurisdiction of that court and waives any
objection as to venue.
9. CONSTRUCTION OF THIS AGREEMENT
A. Choice of Law:
This Agreement is to be construed pursuant to the laws
of the State of New York, including New York law regarding
choice of law.
B. Invalid Agreement Provisions:
Should any provision of this Agreement become legally
unenforceable, no other provision of this Agreement shall be
affected, and the Agreement shall continue as if the
Agreement had been executed absent the unenforceable
provision.
C. No Other Agreements:
This Agreement represents the entire Agreement between
the Employee and the Employer, and supersedes any and all
negotiations and other agreements, oral, implied or written,
in any way related to the employment relationship between
the Employee and the Employer. No agreements,
representations, or understandings (oral, written, or
implied) other than those expressly set forth herein have
been made or entered into by either party with respect to
any aspect of the Employee's employment or any of the
matters dealt with herein. In executing this Agreement,
neither the Employer nor the Employee relies upon any
promise, representation, or other inducement that is not
expressed in this Agreement. This Agreement may be modified
only by a written Agreement signed by both the Employee and
the Employer and may not be modified in any oral agreement
or representation.
D. Practices Inconsistent With This Agreement:
No provision of this Agreement shall be modified or
construed by any practice or policy that is inconsistent
with such provision, and failure by either the Employee or
the Employer to comply with any provision, shall not affect
the rights of either to thereafter comply or require the
other to comply.
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10. ARBITRATION
Any dispute between Employer and the Employee in any way
arising out of this Agreement, other than an action for an
injunction brought pursuant to Paragraph 8 of this
Agreement, including the termination of employees employment
and/or this Agreement, shall be submitted to arbitration by
an arbitrator selected by the American Arbitration
Association. The arbitrator's decision with respect to any
such dispute shall be final and binding. Any such disputes
must be submitted to arbitration within six (6) months of
termination, cancellation, or expiration of this Agreement.
Any party who, in violation of this paragraph, initiates a
lawsuit against the other party, shall pay the other party's
reasonable attorney's fees and costs incurred in such
lawsuit. Except as otherwise provided herein, such
arbitration shall take place in accordance with the Rules of
Commercial Arbitration of the American Arbitration
Association, and shall be held in Monroe County, New York.
TORVEC Inc.
Date: ______________ By: ____________________________
President
Employer
Date: ______________ ________________________________
Xxxxxxx X. Xxxxx
Employee
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STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT MADE as of this 1st day of
January, 1998 between TORVEC, INC., a New York business
corporation (herein referred to as the "Company"), and
XXXXXXX X. XXXXX (herein referred to as the "Optionee");
WITNESSETH:
1. The Company hereby grants to the Optionee an Option
(hereinafter referred to as "Option") to purchase an
aggregate of 100,000 shares of the $.01 par value Common
Stock of the Company (herein referred to as the "Shares") at
an exercise price of $5.00 per Share to be paid by the
Optionee with cash, a certified check or a bank cashier's
check made payable to the order of the Company.
Alternatively, provided the Board of Directors shall approve
the specific transfer, the Optionee may pay for the Shares,
either in whole or in part, by the delivery of Common Stock
of the Company already owned by him which will be accepted
as payment for the Shares, based upon such Common Stock's
fair market value on the date of exercise. In addition,
provided the Board of Directors shall approve the specific
transfer, payment for the Shares, either in whole or in
part, may be made by delivery of Common Stock acquired by
the Optionee under any of the Company's stock option plans,
provided, however, that if this Option is exercised in part,
Shares acquired by such partial exercise may not be used as
payment for additional Shares to be acquired under this
Agreement. In order for the Optionee to so use shares of
Common Stock previously acquired under any of the Company's
stock option plans as payment for the Shares either in whole
or in part, the transfer of such previously acquired Common
Stock as payment for all or a portion of the exercise price
under this Agreement must occur more than two years from the
date of the grant and one year from the date of exercise of
the prior option pursuant to which the Optionee acquired
such Common Stock.
2. The term during which the Option shall be
exercisable shall commence on January 1, 1998 and expire on
the close of business December 31, 2007, subject to earlier
termination as provided in the Torvec, Inc. 1998 Stock
Option Plan (herein referred to as the "Plan"). The Option
to purchase the number of Shares granted under this
Agreement shall vest on the 1st day of each of the first
five years of the Option Term on a cumulative basis, in
accordance with the following schedule:
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VESTED NON-VESTED
1/1/98 - 12/31/98 20% 80%
1/1/99 - 12/31/99 40% 60%
1/1/2000 - 12/31/2000 60% 40%
1/1/01 - 12/31/2001 80% 20%
1/1/02 - 12/31/2002 100% 0%
provided however, that to the extent the Optionee shall fail
to exercise or, due to the above limitation, be prohibited
from exercising his Option in any year during the Option
period, such annual right to exercise this Option shall not
expire, but shall be cumulative, and carry over into and be
exercisable in any subsequent year during which the Option
is outstanding.
This Option may be exercised by the Optionee in
accordance with its terms during the Option Term even
though, at the time of such exercise, whether in whole or in
part, the Optionee is no longer an employee of the Company.
3. Notwithstanding the vesting schedule set forth in
Section 2 hereof, the Optionee's right to exercise this
Option in full shall immediately vest upon the occurrence of
a change in control of the Company. For this purpose, the
term "change in control of the Company" shall generally
include a change in the ownership or effective control of
the Company or in the ownership of a substantial portion of
the assets of the Company. Specifically, the term shall
include (i) the purchase or other acquisition by any person,
entity or group of persons, within the meaning of Section
13(d) or 14(d) of the Securities Exchange Act of 1934, or
any comparable successor provisions, of the beneficial
ownership (within the meaning of Rule 13d-3 promulgated
under the Act) of more than 50% of either the outstanding
shares of common stock or the combined voting power of the
Company's then outstanding voting securities entitled to
vote generally, or (ii) the approval by the shareholders of
the Company of a reorganization, merger, or consolidation
with respect to which, in such case, persons who were
shareholders of the Company immediately prior to such
reorganization, merger, or consolidation do not immediately
thereafter, own more than 50% of either the outstanding
shares of common stock or the combined voting power of the
reorganized, merged or consolidated Company's then
outstanding voting securities entitled to vote generally or
(iii) the liquidation and/or dissolution of the Company.
4. The Option is not transferable by the Optionee
other than by Will or the laws of descent and distribution
and is exercisable, during his lifetime, only by the
Optionee. In the event that the right to exercise the
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Option passes to the Optionee's estate, or to a person to
whom such right devolves by reason of the Optionee's death,
then the Option shall be non transferable in the hands of
the Optionee's Executor or Administrator or of such person,
except that the Option may be distributed by the Optionee's
Executor or Administrator to the distributees of the
Optionee's estate as a part thereof.
5. In order for the Option to be exercised, in whole or
in part, the notice by the Optionee to the Company in the
form attached hereto must be accompanied by payment in full
of the option price for the Shares being purchased. In
addition, the Optionee agrees to tender to the Company an
additional amount, in cash, certified check, cashier's check
or bank draft, equal to the amount of any taxes required to
be collected or withheld by the company in connection with
the exercise of his Option.
6. The Company agrees that it will use its best
efforts to register the sale of the Shares to be issued upon
the exercise of the Option with the Securities and Exchange
Commission under the Securities Act of 1933. Upon the
effectiveness of the Registration Statement covering the
Shares, the Optionee shall be able to sell the Shares in
"open market transactions" free of Federal Securities Law
restrictions, provided that at the time of sale, or within
the three month period immediately prior to such sale, he is
not nor has he been an "affiliate" of the Company. The
Optionee further understands that, in accordance with
applicable Commission rules governing controlling persons of
public companies, members of the board of directors of a
public company, such as the Company, are deemed to be
"affiliates" during their term of office. The Optionee,
therefore, agrees that he will consult with the Company's
counsel as to any Securities Law restrictions, including a
limitation on the number of Shares which may be sold at any
one time, on his ability to sell the Shares prior to any
sale thereof.
7. The Company agrees to provide the Optionee with a
copy of the Prospectus prepared by the Company in connection
with the Registration Statement filed to register the
Shares, together with its exhibits, and the Company hereby
acknowledges its obligation to provide the Optionee with all
proxy and other shareholder communications, including the
annual report to security holders, for the most recently
completed fiscal year of the Company and all updates
thereof. The Optionee agrees that prior to exercise, either
in whole or in part of the Option granted to him hereunder,
he shall have read such materials, including the most recent
annual and quarterly reports to shareholders, and shall have
received, if requested, and read all the documents
incorporated by reference in the Prospectus and Registration
Statement filed with the Securities and Exchange Commission.
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8. The Optionee understands that except as provided in
Paragraph 6 above, the Company has not agreed to register
either the issuance or the resale of the Shares in
accordance with the provisions of the Securities Act of 1933
or to register either the issuance or the resale of the
Shares under any applicable State Securities Laws. Hence,
the Optionee agrees that by virtue of the provision of
certain rules respecting "restricted securities" promulgated
under such Federal and/or State Laws, unless the resale of
the Shares is registered as provided in Paragraph 6 above,
and until the registration of such Shares in accordance with
Paragraph 6 above shall have been declared effective by
order of the Commission, the Shares which the Optionee shall
purchase upon the exercise of this Option must be held
indefinitely and may not be sold, transferred, pledged,
hypothecated, or otherwise encumbered for value, unless and
until a secondary distribution and/or resale of such Shares
is subsequently registered under such Federal and/or State
Securities Laws, or unless an exemption from registration is
available, in which case the Optionee still may be limited
as to the amount of the Shares that may be sold,
transferred, pledged and/or encumbered for value. The
Optionee therefore agrees that, until the registration of
such Shares shall have been declared effective by order of
the Commission, the Company may affix upon any certificate
representing the Shares, a legend that such Shares may not
be transferred in violation of Section 5 of the Securities
Act of 1933.
9. The Optionee understands and agrees that the Shares
to be acquired upon the exercise of the Option may not be
sold, transferred, exchanged, hypothecated, encumbered,
pledged or otherwise disposed of for value for a period of
six (6) months from the date of the grant of this Option.
10. The Optionee understands that the Company has
established certain policies and procedures governing trading
in the Company's securities, including the Shares to be
acquired upon the exercise of this Option, while in
possession of material, inside information regarding the
Company and/or any of its subsidiaries, receipt of which is
hereby acknowledged. The Optionee agrees that upon exercise
of this Option, either in whole or in part, he will comply
with all of the terms and conditions of such policy,
including the procedures and guidelines established for its
implementation. In particular, the Optionee agrees that
where required under such guidelines and procedures, he will
obtain permission of the Company's Clearinghouse Committee
composed of senior management prior to effectuating any sale
or other transfer for value of the Shares to be acquired by
virtue of the exercise of this Option.
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11. All the terms and provisions of the Plan, duly
adopted at a meeting of the Company's Board of Directors on
_______________ and approved by a majority vote of the
Company's shareholders either in person or by proxy at a duly
called meeting of such shareholders held on _______________
and as amended to date, are hereby expressly incorporated
into this Stock Option Agreement and made a part hereof as if
printed herein and the Optionee, by the Optionee's signature
hereon, acknowledges receipt of a certified copy of said
Plan. If there shall be any conflict between this Agreement
and the Plan, the provisions of the Plan shall control.
12. In accordance with certain terms and conditions of
the Plan, the aggregate number and kind of shares that may be
purchased pursuant to the grant of the Option under this
Agreement shall be proportionately adjusted for any increase,
decrease or change in the total number of the outstanding
shares of the Company resulting from a stock dividend,
stock-split or other corporate reorganization which would
result in or have the effect of the Optionee being treated
differently (but for the adjustment) than he would be treated
had he been the beneficial owner of the Shares subject to the
Option on the record date for such dividend, split or
reorganization, as the case may be.
13. The Optionee understands that the Option granted
hereunder constitutes a "nonqualified stock option" for
federal, and if applicable, state income tax purposes.
Consequently, the Optionee understands that under current
provisions of federal tax law, for regular as well as for
purposes to the federal alternative minimum income tax, no
gain or loss generally is recognized to the Optionee upon the
grant of the Option. In addition, the Company will receive
no business expense deduction as a result of the grant of the
Option.
For federal income tax purposes, upon the exercise of
the Option, the difference between the exercise price and the
fair market value of the Shares on the date of exercise
constitutes ordinary income to the Optionee and is taxed to
the Optionee at normal, ordinary tax rates, except to the
extent the Shares are not transferable and are subject to a
substantial risk of forfeiture. To the extent such
difference is required to be included as income by the
Optionee, the Company is entitled to a business expense
deduction. Upon the later sale of the Shares, long or short
term capital gain or loss will be recognized by the Optionee,
depending upon the holding period (eighteen months for long
term capital gain or loss) and the extent to which the
selling price exceeds or is less than the Optionee's basis in
the stock. The amount of gain will be taxed at normal,
ordinary tax rates, with a maximum rate of 20% if the Shares
are held for a period of at least eighteen months. If the
Shares are held for a period of at least twelve months, the
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maximum rate on any gain from their sale will be taxed at
28%.
The Optionee also understands that the provisions of
federal tax law described herein are subject to change and,
consequently, the Optionee agrees to consult with his or her
own tax advisor with respect to the tax treatment to be
accorded the grant of the Option herein, the exercise of such
Option, and the disposition of the Shares.
13. Consistent with the provisions of the Plan, this
Agreement shall be binding upon and inure to the benefit of
any successor or assignee of the Company and to any executor,
administrator, legal representative, legatee, or distributee
entitled by law to the Optionee's right hereunder.
14. Except insofar as an interpretation of federal
securities law otherwise is required, or is controlling, this
Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
IN WITNESS WHEREOF, the Company has caused this Agreement
to be executed on its behalf by its duly authorized officer
and the Optionee has hereunto set his hand, as of the day and
year first above written.
TORVEC, INC.
By:____________________________
____________________________
Xxxxxxx X. Xxxxx,
Optionee
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NOTICE OF EXERCISE OF STOCK OPTION
AND
RECORD OF STOCK TRANSFER
Torvec, Inc.
0000 Xxxxx 000
Xxxxxxxxxx, Xxx Xxxx 00000
Gentlemen:
I hereby exercise my Stock Option granted to me by Torvec,
Inc. under a Stock Option Agreement dated _______________,
subject to all the terms and provisions thereof and of the
Torvec, Inc. 1998 Stock Option Plan referred to therein and
notify you of my desire to purchase Shares of
the $.01 par value Common Stock of the Company which were
offered to me pursuant to the Stock Option Agreement.
Enclosed is my payment in the sum of in full
payment of such Shares.
I understand that a Registration Statement covering the
Shares to be issued to me pursuant to this exercise of the
Option granted to me was filed with the Securities and
Exchange Commission on _______________. The Registration
Statement became effective on _______________. Consequently,
I understand that unless I am an "affiliate" of the Company,
the Shares I am acquiring are freely tradeable and may be sold
by me in "open market" transactions. If I am an "affiliate"
of the Company, however, or have been one during the three
month period prior to sale, I recognize that I may not sell
freely on the open market and therefore agree that I will
consult the Company's counsel as to the securities law
restrictions on my ability to sell the Shares.
I also understand that under the Plan, and in accordance
with the terms of the Stock Option Agreement, I may not sell,
assign, alienate, pledge, encumber or otherwise transfer for
value the Shares unless a period of six (6) months has elapsed
from the date of the grant of the Option to me.
I acknowledge that I am aware that the Company has
established a policy with respect to trading in its securities
while in possession of material inside information regarding
the Company and/or its subsidiaries, and that, in accordance
with certain guidelines and procedures designed to implement
such policy, I may be required to obtain permission from a
Clearinghouse Committee, composed of Senior Management, prior
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to any sale or other transfer for value of the Shares hereby
acquired.
I also acknowledge that I have received and have read the
Prospectus dated _______________ prepared by the Company in
connection with the grant of the Option contained herein,
together with its exhibits, and all proxy and other
shareholder communications, including the annual report to
security holders, for the most recently completed fiscal year
and all quarterly and current updates thereof. I acknowledge
that I have received all documents incorporated by reference
in the Prospectus and the Registration Statement filed with
the Securities and Exchange Commission that I requested and
have read the same. I acknowledge that I have had the
opportunity to ask questions of and receive answers from the
Company's management concerning the information set forth in
such Prospectus, reports and updates and have been satisfied
with the answers provided regarding the same.
Finally, I acknowledge that there are significant federal
income tax consequences resulting from my exercise of this
Option, that I have consulted with and received advice from
qualified tax counsel both as to the nature of such tax
consequences and their impact upon my own personal income tax
situation as the result of such exercise, and that I fully
understand such impact and have planned accordingly.
DATED: ________________ __________________________
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Receipt is hereby acknowledged of the delivery to me by Torvec,
Inc. on , 19 of stock certificates
for shares of $.01 par value common stock purchased by me
pursuant to the terms and conditions of the Torvec, Inc. 1998
Stock Option Plan referred to above.
DATED: ______________________________
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