NONQUALIFIED STOCK OPTION AGREEMENT NQSO-010
THIS NONQUALIFIED STOCK OPTION AGREEMENT ("Agreement") is made and entered
into on July 3, 1995, by and between XXXXXXX LABORATORIES, INC., a California
corporation ("Company"), and XXXXXX X. XXXXXX ("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 15,000 shares ("Option Shares") of the Company's common stock, such
number being subject to adjustment as provided in Section 8 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 Company 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 $7.00 per share. The exercise price shall be paid in full as provided in
Section 9 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
Section 7 hereof.
4. EXERCISABILITY OF OPTION.
(a) Subject to the provisions of Section 4(b) hereof, the Option
shall be exercisable as to all of the Option Shares throughout the term hereof.
(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
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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 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. TERMINATION OF OPTION UPON COMPANY'S ACQUISITION. In the event that
the Company is involved in a merger, consolidation or other combination with one
or more other corporations in which the Company is not the surviving corporation
or in the event that the Company is liquidated and dissolved following the
Company's sale of all, or substantially all, of its operating assets and
goodwill to another corporation, the Option shall terminate as of the effective
date of such merger, consolidation or other combination
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or as of the effective date of such sale of this corporation's operating
assets and goodwill, as the case may be, to the extent that the Option has
not theretofore been exercised by the Optionee and/or is not agreed to be
assumed by, or replaced by equivalent options granted by, the surviving
corporation in such merger, consolidation or other combination or the
purchasing corporation in such sale of this corporation's operating assets
and goodwill.
8. 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, combination,
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.
9. 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 and dated 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 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 the delivery of a
bank cashier's check, personal check or the equivalent thereof payable to the
order of the Company, by the delivery of shares of the Company's common stock
duly endorsed in favor of the Company or accompanied by a duly executed stock
power in favor of the Company or by a combination of the foregoing. If shares
of the Company's common stock are delivered in full or partial payment of the
aggregate exercise price, such shares shall be valued at the average of the per
share closing bid and asked prices for shares of the Company's common stock in
the over-the-counter market on the date immediately preceding the date the
Exercise Notice is dated or, in the absence of any reported sales on such date,
the first preceding date on which there were such sales.
(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
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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.
10. 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 with all laws and regulations
which, in the opinion of legal counsel to the Company, shall be applicable
thereto.
11. 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: Xxx Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
12. 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.
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13. 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.
"Company" "Optionee"
XXXXXXX LABORATORIES, INC.
By: /s/ Xxxxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxxx
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Its: President Xxxxxx X. Xxxxxx
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