Exhibit 10.40a
NON-STATUTORY STOCK OPTION AGREEMENT
THIS NON-STATUTORY STOCK OPTION AGREEMENT ("Agreement") entered into as of this
19th day of September, 1995 by and between APPLIED BIOSCIENCE INTERNATIONAL
INC., a Delaware corporation (the "Company" or "APBI"), and XXXXXX X. XXXXX (the
"Executive").
WITNESSETH:
WHEREAS, the Executive has been employed as a senior executive officer of the
Company and/or its ENVIRON division, and as such has been granted the following
stock options under the APBI Stock Incentive Program (1990):
Option Option Option
Grant Date Share Amounts Exercise Price
07/08/91 20,000 $15.8750
12/10/91 8,224 $13.3125
12/10/91 17,204 $13.3125
06/25/93 12,976 $ 5.6250
06/25/93 39,024 $ 5.6250
09/13/94 50,000 $ 5.8750
The foregoing are referred to as the "Original Options."
WHEREAS, the Company and the Executive have agreed that the Executive's services
are no longer required on behalf of the Company or ENVIRON and have entered into
a Separation Agreement dated effective August 25, 1995 (the "Separation
Agreement");
WHEREAS, under the terms of the Separation Agreement, the Company and the
Executive have agreed that in lieu of each of the Original Options, the
Executive will receive a replacement option that is granted outside of the APBI
Stock Incentive Program (1990) ("Stock Incentive Program);
WHEREAS, this Agreement is intended to reflect the replacement option granted to
the Executive in lieu of, and in full substitution for, the Original Option
granted to the Executive on July 8, 1991;
NOW, THEREFORE, intending to be legally bound hereby, the Company and the
Executive do hereby covenant and agree as follows:
1. Grant. The Company does hereby grant to the Executive the right and option
to purchase, under the terms and conditions hereinafter set forth, in whole or
in part, 20,000 shares of Common Stock of the Company, par value $.01 per share
("Stock"), which right and option shall be in replacement of and substitution
for, the incentive stock option originally granted to the Executive on July 8,
1991 (such replacement option being referred to as the "Replacement Option").
The Replacement Option shall not constitute an incentive stock option within the
meaning of Section 422 of the Internal Revenue Code of 1986. The price at which
each share may be purchased shall be $15.875, which price is the fair market
value of such stock on the date of grant of the Original Option (the "Option
Price").
2. Terms.
(a) The Replacement Option herein granted shall expire at 12:00 midnight on the
earlier of (i) February 11, 2001 or (ii) the day immediately following any
period of twenty (20) consecutive trading days in which the last sale for shares
of APBI's common stock (as adjusted for stock splits, dividends and similar
events) for each of such trading days equaled or exceeded $20 per share as
quoted on the NASDAQ National Market System.
(b) Of the option grant award of 20,000 shares of Stock, 16,000 shall be
immediately subject to purchase through the exercise of this Replacement Option
and the balance of 4,000 shall vest and may be purchased on or after July 8,
1996.
3. Exercise. Employee may exercise the option granted hereunder by giving
written notice to the Company's chief financial officer at the principal office
of the Company at 0000 Xxxxx Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000. Such
notice shall state the number of full shares (no fractional shares may be
purchased) to which the election applies. Such notice shall be accompanied by
payment in an amount sufficient to purchase the number of shares set forth in
the notice at the per share price established by Section 1 hereof. Payment
shall be made in cash or shares of the Company's Common Stock having a fair
market value equal to the purchase price (as determined by the APBI Compensation
and Stock Plans Committee or the "APBI Compensation Committee"), or a
combination of cash and such shares.
4. Death. In the event of death of the Executive, the option shall be
exercisable by the person or persons who acquire the option by bequest or
inheritance or by reason of the death of the Executive, or by the executor or
administrator of the estate of the deceased Executive at any time before the
expiration date of the option but only to the extent the option is otherwise
exercisable at the date of the Executive's death.
5. Registration Rights. APBI shall, if requested by Executive, as soon as
reasonably practicable file a registration statement on a form of general use
under the Securities Act of 1933, as amended (the "Securities Act"), to permit
the sale or other disposition of the shares of Stock that have been or that may
be acquired upon exercise of this Replacement Option in accordance with the
intended method of sale or other disposition requested by Executive. Executive
shall provide all information reasonably requested by APBI for inclusion in any
registration statement to be filed hereunder. APBI will use its best efforts to
cause such registration statement to remain effective for such period as
Executive reasonably deems necessary to effect such sales or other dispositions
but not to exceed ninety (90) days and not after the status of the shares of
Stock subject to the Option as "restricted securities" within the meaning of
-2-
Rule 144 under the Securities Act or any successor thereto terminates. Such
registration shall be effected at APBI's expense except for underwriting
commissions and the fees and disbursements of Executive's counsel attributable
to the registration of such Stock. The filing of the registration statement
contemplated by this paragraph may be delayed for such period of time as may
reasonably be required by APBI to facilitate any public distribution of Stock by
APBI or if APBI decides in its good faith judgment that such registration would
be detrimental to the interests of APBI and its stockholders. In connection
with such registration statement, APBI and Executive shall enter into an
agreement under which each will indemnify the other with respect to information
provided by such party for use in the registration statement, such indemnities
and the procedures therefor to be in a form customarily included in registration
rights agreements. APBI further agrees to use its best efforts to register or
qualify the Stock covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as Executive shall reasonably
request, to keep such registration or qualification in effect for so long as
such registration statement remains in effect, and take any other action which
may be reasonably necessary or advisable to enable Executive to consummate the
disposition of such securities in such jurisdictions, except that APBI shall not
for any such purpose be required to qualify generally to do business as a
foreign corporation in any jurisdiction wherein it would not but for the
requirements of this sentence be obligated to be so qualified or to consent to
general service of process in any such jurisdiction. The registration right
contained in this paragraph, together with the registration rights contained in
the Executive's other Replacement Options may only be exercised three times
collectively by the Executive so that in effect the Executive has a total of
three registration rights with respect to all of the Stock issued or to be
issued pursuant to all of the Replacement Options.
6. Adjustment of Number of Shares. In the event that (i) a dividend is
declared on the Company's Common Stock payable in shares of Common Stock, (ii)
the outstanding shares of Common Stock are to be changed into or exchanged for a
different number or kind of shares of stock or securities of the Company or of
another corporation or (iii) there is any other change in the Company's
capitalization or otherwise which causes the Company to adjust the number or
kind of shares of Common Stock subject to option awards under the Company's
Stock Incentive Program, the equivalent adjustment shall be made to the shares
which are the subject of this Replacement Option and the option price therefor.
7. Effect of Reorganization. In the event of a reorganization as defined
below, provision has not been made by the surviving corporation for substitution
of new options for this Replacement Option which is satisfactory to the
Executive, such Executive will have distributed to him or her within thirty (30)
days after the reorganization in full satisfaction the following:
(i) With respect to this Replacement Option, if unexpired, cash representing
the excess, if any, of the highest market price for the Company's Common Stock
on the date, or the earliest prior date on which a price has been established
for trading purposes, preceding the reorganization over the Option Price,
without regard to the exercise dates provided in this Replacement Option or, at
the election of the surviving or acquiring corporation, stock in the surviving
or acquiring corporation or parent thereof equal in value to the above as of the
date of the reorganization, provided that stock in such survivor or parent
company is traded on a national securities exchange or quoted by the Automated
Quotation System of the National Association of Securities Dealers, Inc.
-3-
(ii) Reorganization for purposes of this Section 7(a) means a merger,
consolidation, sale of all or substantially all of the Company's assets, or
other corporate reorganization in which the Company is not the surviving
corporation (other than any such transaction the effect of which is merely to
change the jurisdiction of incorporation of the Company), or any merger in which
the Company is the surviving corporation but the holders of its shares receive
cash or securities of another corporation, or a dissolution or liquidation of
the Company.
8. No Implied Rights. Nothing contained in this Agreement, nor the granting of
any options hereunder, shall be construed as giving the Executive or any other
person any legal or equitable rights against the Company or any subsidiary
corporation or any director, officer, employee or agent thereof, except for
those rights as are herein provided. Under no circumstances shall this
Agreement, be construed as a contract of continuing employment of the Executive,
nor shall this option grant in any manner obligate the Company or any subsidiary
or affiliate of the Company to continue the employment of the Executive.
9. No Assignment. Except as contemplated by Section 4 hereof, this option and
the rights and privileges conferred hereby may not be transferred, assigned,
pledged, hypothecated or encumbered, and shall not be subject to execution,
attachment, garnishment or other similar legal processes. Upon any attempt to
transfer, assign, pledge, hypothecate or otherwise encumber or dispose of this
option, this option and the rights and privileges conferred hereunder shall
immediately become null and void. This option may be exercised during the
lifetime of the Executive only by the Executive; provided, however, that if the
Executive is declared legally incompetent, the Executive's duly appointed legal
representative may exercise the option hereunder in the manner and to the extent
that the Executive is entitled to exercise the option hereunder.
10. Governing Law. This Agreement and the rights hereunder shall be governed
by and construed under the laws of the State of Delaware.
-4-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first above written.
APPLIED BIOSCIENCE INTERNATIONAL INC.
By:/s/ Xxxxxxx X. Xxxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxxx
Senior Vice President and Chief
Financial Officer
EXECUTIVE
/s/ Xxxxxx X. Xxxxx
----------------------------------
Xxxxxx X. Xxxxx
