EXHIBIT 99.1
ISTA PHARMACEUTICALS, INC.
STAND-ALONE STOCK OPTION AGREEMENT
I. NOTICE OF STOCK OPTION XXXXX
Xxxxxx Xxxxx
[Address]
You have been granted a Nonstatutory Stock Option to purchase Common
Stock of the Company, subject to the terms and conditions of this Agreement, as
follows:
Date of Grant July 1, 2002
Vesting Commencement Date July 1, 2002
Exercise Price per Share $0.85
Total Number of Shares Granted 300,000
Total Exercise Price $255,000
Term/Expiration Date: July 1, 2012
Vesting Schedule:
This Option shall vest and may be exercised, in whole or in part, in
accordance with the following schedule:
25% of the Shares subject to the Option shall vest one year after the
Vesting Commencement Date, and 1/48th of the Shares subject to the Option shall
vest each month thereafter, so that the Option shall be fully vested four (4)
years from the Vesting Commencement Date, subject to the Optionee continuing to
be a Service Provider on such dates.
Termination Period
This Option may be exercised for three (3) months after Optionee ceases
to be a Service Provider in accordance with Section 8 of this Agreement. Upon
the death or Disability of the Optionee, this Option may be exercised for one
year after the Optionee ceases to be a Service Provider in accordance with
Sections 9 and 10 of this Agreement. In no event shall this Option be exercised
later than the Term/Expiration Date provided above.
II. AGREEMENT
1. Definitions. As used herein, the following definitions shall
apply:
(a) "Agreement" means this stock option agreement between
the Company and Optionee evidencing the terms and conditions of this Option.
(b) "Applicable Laws" means the requirements relating to
the administration of stock options under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction that may apply to this Option.
(c) "Board" means the Board of Directors of the Company
or any committee of the Board that has been designated by the Board to
administer this Agreement.
(d) "Code" means the Internal Revenue Code of 1986, as
amended.
(e) "Common Stock" means the common stock of the Company.
(f) "Company" means ISTA Pharmaceuticals, Inc., a
Delaware corporation.
(g) "Consultant" means any person, including an advisor,
engaged by the Company or a Parent or Subsidiary to render services to such
entity.
(h) "Director" means a member of the Board.
(i) "Disability" means total and permanent disability as
defined in Section 22(e)(3) of the Code.
(j) "Employee" means any person, including Officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company.
An Employee shall not cease to be such in the case of (i) any leave of absence
approved by the Company or (ii) transfers between locations of the Company or
between the Company, its Parent, any Subsidiary, or any successor. Neither
service as a Director nor payment of a director's fee by the Company shall be
sufficient to constitute "employment" by the Company.
(k) "Exchange Act" means the Securities Exchange Act of
1934, as amended.
(l) "Fair Market Value" means, as of any date, the value
of Common Stock determined as follows:
(1) If the Common Stock is listed on any
established stock exchange or a national market system, including without
limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The
Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for
such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or system on the day of determination, as reported in The Wall Street
Journal or such other source as the Administrator deems reliable;
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(2) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean between the high bid and low asked prices for the
Common Stock on the day of determination; or
(3) In the absence of an established market for
the Common Stock, the Fair Market Value thereof shall be determined in good
faith by the Board.
(m) "Nonstatutory Stock Option" means an Option not
intended to qualify as an incentive stock option within the meaning of Section
422 of the Code and the regulations promulgated thereunder.
(n) "Notice of Grant" means a written notice, in Part I
of this Agreement, evidencing certain the terms and conditions of this Option
grant. The Notice of Grant is part of the Option Agreement.
(o) "Officer" means a person who is an officer of the
Company within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(p) "Option" means this stock option.
(q) "Optioned Stock" means the Common Stock subject to
this Option.
(r) "Optionee" means the person named in the Notice of
Xxxxx or such person's successor.
(s) "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(t) "Service Provider" means an Employee, Director or
Consultant.
(u) "Share" means a share of the Common Stock, as
adjusted in accordance with Section 11 of this Agreement.
(v) "Subsidiary" means a "subsidiary corporation",
whether now or hereafter existing, as defined in Section 424(f) of the Code.
2. Grant of Option. The Board hereby grants to the Optionee named
in the Notice of Grant attached as Part I of this Agreement the Option to
purchase the number of Shares, as set forth in the Notice of Grant, at the
exercise price per share set forth in the Notice of Grant (the "Exercise
Price"), subject to the terms and conditions of this Agreement.
3. Exercise of Option.
(a) Right to Exercise. This Option is exercisable during
its term in accordance with the Vesting Schedule set out in the Notice of Grant
and the applicable provisions of this Agreement.
(b) Method of Exercise. This Option is exercisable by
delivery of an exercise notice, in the form attached as Exhibit A (the "Exercise
Notice"), which shall state the election to exercise the Option, the number of
Shares in respect of which the Option is being exercised (the "Exercised
Shares"),
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and such other representations and agreements as may be required by the Company.
The Exercise Notice shall be completed by the Optionee and delivered to
Secretary of the Company. The Exercise Notice shall be accompanied by payment of
the aggregate Exercise Price as to all Exercised Shares. This Option shall be
deemed to be exercised upon receipt by the Company of such fully executed
Exercise Notice accompanied by such aggregate Exercise Price.
(c) Legal Compliance. No Shares shall be issued pursuant
to the exercise of this Option unless such issuance and exercise complies with
Applicable Laws. Assuming such compliance, for income tax purposes the Exercised
Shares shall be considered transferred to the Optionee on the date the Option is
exercised with respect to such Exercised Shares.
(4) Method of Payment. Payment of the aggregate Exercise Price
shall be by any of the following, or a combination thereof, at the election of
the Optionee:
(a) cash or check;
(b) consideration received by the Company under a
cashless exercise program implemented by the Company; or
(c) surrender of other Shares, provided Xxxxxx acquired
from the Company, (i) have been owned by the Optionee for more than six (6)
months on the date of surrender, AND (ii) have a Fair Market Value on the date
of surrender equal to the aggregate Exercise Price of the Exercised Shares.
5. Non-Transferability of Option. This Option may not be
transferred in any manner otherwise than by will or by the laws of descent or
distribution and may be exercised during the lifetime of Optionee only by the
Optionee. The terms of this Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
6. Term of Option. This Option may be exercised only within the
term set out in the Notice of Grant, and may be exercised during such term only
in accordance with the terms of this Agreement.
7. Termination of Relationship as a Service Provider. If the
Optionee ceases to be a Service Provider (other than for death or Disability),
this Option may be exercised for a period of three (3) months after the date of
such termination (but in no event later than the expiration date of this Option
as set forth in the Notice of Grant) to the extent that the Option is vested on
the date of such termination. To the extent that the Optionee does not exercise
this Option within the time specified herein, the Option shall terminate.
8. Disability of Optionee. If the Optionee ceases to be a Service
Provider as a result of the Optionee's Disability, this Option may be exercised
for a period of twelve (12) months after the date of such termination (but in no
event later than the expiration date of this Option as set forth in the Notice
of Grant) to the extent that the Option is vested on the date of such
termination. To the extent that Optionee does not exercise this Option within
the time specified herein, the Option shall terminate.
9. Death of Optionee. If the Optionee dies while a Service
Provider, the Option may be exercised at any time within twelve (12) months
following the date of death (but in no event later than the expiration date of
this Option as set forth in the Notice of Grant), by the Optionee's estate or by
a person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent that
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the Optionee was entitled to exercise the Option at the date of death. If, after
death, the Optionee's estate or a person who acquired the right to exercise the
Option by bequest or inheritance does not exercise the Option within the time
specified herein, the Option shall terminate.
10. Adjustments Upon Changes in Capitalization, Dissolution,
Merger or Asset Sale.
(a) Changes in Capitalization. Subject to any required
action by the stockholders of the Company, the number of shares of Common Stock
covered by this Option, as well as the price per share of Common Stock covered
by this Option, shall be proportionately adjusted for any increase or decrease
in the number of issued shares of Common Stock resulting from a stock split,
reverse stock split, stock dividend, combination or reclassification of the
Common Stock, or any other increase or decrease in the number of issued shares
of Common Stock effected without receipt of consideration by the Company;
provided, however, that conversion of any convertible securities of the Company
shall not be deemed to have been "effected without receipt of consideration."
Such adjustment shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
of Common Stock subject to this Option.
(b) Dissolution or Liquidation. In the event of the
proposed dissolution or liquidation of the Company, the Board shall notify
Optionee as soon as practicable prior to the effective date of such proposed
transaction. To the extent it has not been previously exercised, the Option will
terminate immediately prior to the consummation of such proposed
(c) Merger or Asset Sale. In the event of a merger of the
Company with or into another corporation, or the sale of substantially all of
the assets of the Company, the Option shall be assumed or an equivalent option
substituted by the successor corporation or a Parent or Subsidiary of the
successor corporation. In the event that the successor corporation refuses to
assume or substitute for the Option, the Optionee shall fully vest in and have
the right to exercise the Option as to all of the Optioned Stock, including
Shares as to which it would not otherwise be vested or exercisable. If the
Option becomes fully vested and exercisable in lieu of assumption or
substitution in the event of a merger or sale of assets, the Board shall notify
the Optionee in writing or electronically that the Option shall be fully
exercisable for a period of fifteen (15) days from the date of such notice, and
the Option shall terminate upon the expiration of such period. For the purposes
of this paragraph, the Option shall be considered assumed if, following the
merger or sale of assets, the option confers the right to purchase or receive,
for each Share subject to the Option immediately prior to the merger or sale of
assets, the consideration (whether stock, cash, or other securities or property)
received in the merger or sale of assets by holders of Common Stock for each
Share held on the effective date of the transaction (and if holders were offered
a choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares); provided, however, that if such
consideration received in the merger or sale of assets is not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Option, for each Share subject to the Option,
to be solely common stock of the successor corporation or its Parent equal in
fair market value to the per share consideration received by holders of Common
Stock in the merger or sale of assets.
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11. Notices. Any notice to be given to the Company hereunder shall
be in writing and shall be addressed to the Company. at its then current
principal executive office or to such other address as the Company may hereafter
designate to the Optionee by notice as provided in this Section. Any notice to
be given to the Optionee hereunder shall be addressed to the Optionee at the
address set forth beneath his signature hereto, or at such other address as the
Optionee may hereafter designate to the Company by notice as provided herein. A
notice shall be deemed to have been duly given when personally delivered or
mailed by registered or certified mail to the party entitled to receive it.
12. Withholding Taxes. Optionee agrees to make appropriate
arrangements with the Company (or the Parent or Subsidiary employing or
retaining Optionee) for the satisfaction of all Federal, state, and local income
and employment tax withholding requirements applicable to the Option exercise.
Optionee acknowledges and agrees that the Company may refuse to honor the
exercise and refuse to deliver Shares if such withholding amounts are not
delivered at the time of exercise.
13. Entire Agreement; Governing Law. This Agreement, together with
the Employment Agreement, constitute the entire agreement of the parties with
respect to the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and Optionee with respect to the
subject matter hereof, and may not be modified adversely to the Optionee's
interest except by means of a writing signed by the Company and Optionee. This
agreement is governed by the internal substantive laws, but not the choice of
law rules, of California.
14. NO GUARANTEE OF CONTINUED SERVICE. OPTIONEE ACKNOWLEDGES AND
AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS
EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (AND
NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES
HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO
NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUES ENGAGEMENT AS A
SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL
NOT INTERFERE WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE
OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT
CAUSE.
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By Optionee's signature and the signature of the Company's
representative below, Optionee and the Company agree that this Option is granted
under and governed by the terms and conditions of this Agreement. Optionee has
reviewed this Agreement in its entirety, has had an opportunity to obtain the
advice of counsel prior to executing this Agreement and fully understands all
provisions of this Agreement. Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Board upon any
questions relating to this Agreement. Optionee further agrees to notify the
Company upon any change in the residence address indicated below.
OPTIONEE ISTA PHARMACEUTICAL, INC.
___________________________________ ___________________________________
Signature By
___________________________________ ___________________________________
Print Name Title
___________________________________
Residence Address
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EXHIBIT A
ISTA PHARMACEUTICAL, INC.
EXERCISE NOTICE
ISTA Pharmaceutical, Inc.
00000 Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention:
1. Exercise of Option. Effective as of today, ________________,
20__, the undersigned ("Purchaser") hereby elects to purchase ______________
shares (the "Shares") of the Common Stock of ISTA Pharmaceutical, Inc. (the
"Company") under and pursuant to the Stock Option Agreement dated
[_____________] (the "Option Agreement"). The purchase price for the Shares
shall be [$_______], as required by the Option Agreement.
2. Delivery of Payment. Purchaser herewith delivers to the
Company the full purchase price for the Shares together with any required
withholding taxes to be paid in connection with the exercise of the Option.
3. Representations of Purchaser. Purchaser acknowledges that
Xxxxxxxxx has received, read and understood the Option Agreement and agrees to
abide by and be bound by their terms and conditions.
4. Rights as Shareholder. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the Shares, no right to vote or receive dividends or
any other rights as a stockholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. The Shares so acquired shall
be issued to the Optionee as soon as practicable after exercise of the Option.
No adjustment will be made for a dividend or other right for which the record
date is prior to the date of issuance, except as provided in Section 11 of the
Option Agreement.
5. Tax Consultation. Purchaser understands that Purchaser may
suffer adverse tax consequences as a result of Purchaser's purchase or
disposition of the Shares. Purchaser represents that Purchaser has consulted
with any tax consultants Purchaser deems advisable in connection with the
purchase or disposition of the Shares and that Purchaser is not relying on the
Company for any tax advice.
6. Successors and Assigns. The Company may assign any of its
rights under this Exercise Notice to single or multiple assignees, and this
Exercise Notice shall inure to the benefit of the successors and assigns of the
Company. Subject to the restrictions on transfer herein set forth, this Exercise
Notice shall be binding upon Optionee and his or her heirs, executors,
administrators, successors and assigns.
7. Interpretation. Any dispute regarding the interpretation of
this Exercise Notice shall be submitted by Optionee or by the Company forthwith
to the Board, which shall review such dispute at its
next regular meeting. The resolution of such a dispute by the Board shall be
final and binding on all parties.
8. Entire Agreement; Governing Law. The Option Agreement is
incorporated herein by reference together with any documents incorporated by
reference therein. This Agreement, and the Option Agreement constitute the
entire agreement of the parties with respect to the subject matter hereof and
supersede in their entirety all prior undertakings and agreements of the Company
and Purchaser with respect to the subject matter hereof, and may not be modified
adversely to the Purchaser's interest except by means of a writing signed by the
Company and Purchaser. This agreement is governed by the internal substantive
laws, but not the choice of law rules, of California.
Submitted by: Accepted by:
OPTIONEE ISTA PHARMACEUTICAL, INC.
___________________________________ ___________________________________
Signature
___________________________________ ___________________________________
Print Name
___________________________________ ___________________________________
Address Address
___________________________________ 00000 Xxxxx Xxxxxxx, Xxxxx 000
___________________________________ Irvine, CA 92618
Date Received:__________________
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