EXHIBIT 10.31
NON-STATUTORY STOCK OPTION AGREEMENT
THIS AGREEMENT is entered into and effective as of this ______ day of
________, ____ (the "Date of Grant"), by and between BioSante Pharmaceuticals,
Inc., a Delaware corporation (the "Company"), and ________________________ (the
"Optionee").
A. The Company has adopted the BioSante Pharmaceuticals, Inc.
Amended and Restated 1998 Stock Plan (the "Plan") authorizing the Board of
Directors of the Company, or a committee as provided for in the Plan (the Board
or such a committee to be referred to as the "Committee"), to grant
non-statutory stock options to employees and non-employee directors, officers,
consultants and independent contractors of the Company and its Subsidiaries (as
defined in the Plan).
B. The Company desires to give the Optionee an inducement to
acquire a proprietary interest in the Company and an added incentive to advance
the interests of the Company by granting to the Optionee an option to purchase
shares of common stock of the Company pursuant to the Plan.
Accordingly, the parties agree as follows:
1. Grant of Option.
The Company hereby grants to the Optionee the right, privilege, and
option (the "Option") to purchase ____ ( ) shares (the "Option Shares") of the
Company's common stock, $0.0001 par value per share (the "Common Stock"),
according to the terms and subject to the conditions hereinafter set forth and
as set forth in the Plan. The Option is not intended to be an "incentive stock
option," as that term is used in Section 422 of the Internal Revenue Code of
1986, as amended (the "Code").
2. Option Exercise Price.
The per share price to be paid by Optionee in the event of an exercise
of the Option will be $________.
3. Duration of Option and Time of Exercise.
3.1 Initial Period of Exercisability. The Option will become
exercisable with respect to the Option Shares in _______ installments. The
following table sets forth the initial dates of exercisability of each
installment and the number of Option Shares as to which this Option will become
exercisable on such dates:
Initial Date of Number of Option Shares
Exercisability Available for Exercise
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The foregoing rights to exercise this Option will be cumulative with
respect to the Option Shares becoming exercisable on each such date,
but in no event will this Option be exercisable after, and this Option
will become void and expire as to all unexercised Option Shares at,
5:00 p.m. (Lincolnshire, Illinois time) on _______________, ____ (the
"Time of Termination").
3.2 Termination of Employment or Other Service.
(a) Termination Due to Death, Disability or Retirement.
(i) In the event the Optionee's employment or
other service with the Company and all Subsidiaries is
terminated by reason of death or Disability, this Option will
remain exercisable, to the extent exercisable as of the date
of such termination, for a period of six months after such
termination (but in no event after the Time of Termination).
(ii) In the event the Optionee's employment or
other service with the Company and all Subsidiaries is
terminated by reason of Retirement, this Option will remain
exercisable, to the extent exercisable as of the date of such
termination, for a period of three months after such
termination (but in no event after the Time of Termination).
(b) Termination for Reasons Other Than Death, Disability
or Retirement. In the event that the Optionee's employment or other
service with the Company and all Subsidiaries is terminated for any
reason other than death, Disability or Retirement, or the Optionee is
in the employ or service of a Subsidiary and the Subsidiary ceases to
be a Subsidiary of the Company (unless the Optionee continues in the
employ or service of the Company or another Subsidiary), all rights of
the Optionee under the Plan and this Agreement will immediately
terminate without notice of any kind, and this Option will no longer be
exercisable; provided, however, that if such termination is due to any
reason other than termination by the Company or any Subsidiary for
"cause" (as defined in the Plan), this Option will remain exercisable
to the extent exercisable as of such termination for a period of three
months after such termination (but in no event after the Time of
Termination).
3.3 Change in Control. If a Change in Control (as defined in the
Plan) of the Company occurs, this Option will become immediately exercisable in
full and will remain exercisable until the Time of Termination, regardless of
whether the Optionee remains in the employ or service of the Company or any
Subsidiary.
4. Manner of Option Exercise.
4.1 Notice. This Option may be exercised by the Optionee in whole
or in part from time to time, subject to the conditions contained in the Plan
and in this Agreement, by delivery, in person, by facsimile or electronic
transmission or through the mail, to the Company at its principal executive
office in Lincolnshire, Illinois (Attention: Chief Financial Officer), of a
written notice of exercise. Such notice must be in a form satisfactory to the
Committee, must identify the Option, must specify the number of Option Shares
with respect to which the Option
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is being exercised, and must be signed by the person or persons so exercising
the Option. Such notice must be accompanied by payment in full of the total
purchase price of the Option Shares purchased. In the event that the Option is
being exercised, as provided by the Plan and Section 3.2 above, by any person or
persons other than the Optionee, the notice must be accompanied by appropriate
proof of right of such person or persons to exercise the Option. As soon as
practicable after the effective exercise of the Option, the Optionee will be
recorded on the stock transfer books of the Company as the owner of the Option
Shares purchased, and the Company will deliver to the Optionee one or more duly
issued stock certificates evidencing such ownership.
4.2 Payment. At the time of exercise of this Option, the Optionee
must pay the total purchase price of the Option Shares to be purchased entirely
in cash (including a check, bank draft or money order, payable to the order of
the Company); provided, however, that the Committee, in its sole discretion, may
allow such payment to be made, in whole or in part, by tender of a promissory
note (on terms acceptable to the Committee in its sole discretion) or a Broker
Exercise Notice or Previously Acquired Shares (as such terms are defined in the
Plan), or by a combination of such methods. In the event the Optionee is
permitted to pay the total purchase price of this Option in whole or in part
with Previously Acquired Shares, the value of such shares will be equal to their
Fair Market Value on the date of exercise of this Option.
5. Rights of Optionee; Transferability.
5.1 Employment or Service. Nothing in this Agreement will
interfere with or limit in any way the right of the Company or any Subsidiary to
terminate the employment or service of the Optionee at any time, nor confer upon
the Optionee any right to continue in the employ or service of the Company or
any Subsidiary.
5.2 Rights as a Stockholder. The Optionee will have no rights as a
stockholder unless and until all conditions to the effective exercise of this
Option (including, without limitation, the conditions set forth in Sections 4
and 6 of this Agreement) have been satisfied and the Optionee has become the
holder of record of such shares. No adjustment will be made for dividends or
distributions with respect to this Option as to which there is a record date
preceding the date the Optionee becomes the holder of record of such shares,
except as may otherwise be provided in the Plan or determined by the Committee
in its sole discretion.
5.3 Restrictions on Transfer. Except pursuant to testamentary will
or the laws of descent and distribution or as otherwise expressly permitted by
the Plan, no right or interest of the Optionee in this Option prior to exercise
may be assigned or transferred, or subjected to any lien, during the lifetime of
the Optionee, either voluntarily or involuntarily, directly or indirectly, by
operation of law or otherwise. The Optionee will, however, be entitled to
designate a beneficiary to receive this Option upon such Optionee's death. In
the event of the Optionee's death, payment of any amounts due under the Plan
will be made to, and exercise of this Option (to the extent permitted pursuant
to Section 3.2(a) of this Agreement) may be made by the Optionee's designated
beneficiary.
5.4 Breach of Confidentiality or Non-Compete Agreements.
Notwithstanding anything in this Agreement or the Plan to the contrary, in the
event that the Optionee materially breaches the terms of any confidentiality or
non-compete agreement entered into with the
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Company or any Subsidiary, whether such breach occurs before or after
termination of the Optionee's employment or other service with the Company or
any Subsidiary, the Committee in its sole discretion may immediately terminate
all rights of the Optionee under the Plan and this Agreement without notice of
any kind.
6. Securities Law and Other Restrictions.
Notwithstanding any other provision of the Plan or this Agreement, the
Company will not be required to issue, and the Optionee may not sell, assign,
transfer or otherwise dispose of, any Option Shares, unless (a) there is in
effect with respect to the Option Shares a registration statement under the
Securities Act of 1933, as amended, and any applicable state or foreign
securities laws or an exemption from such registration, and (b) there has been
obtained any other consent, approval or permit from any other regulatory body
which the Committee, in its sole discretion, deems necessary or advisable. The
Company may condition such issuance, sale or transfer upon the receipt of any
representations or agreements from the parties involved, and the placement of
any legends on certificates representing Option Shares, as may be deemed
necessary or advisable by the Company in order to comply with such securities
law or other restrictions.
7. Withholding Taxes.
The Company is entitled to (a) withhold and deduct from future wages of
the Optionee (or from other amounts that may be due and owing to the Optionee
from the Company), or make other arrangements for the collection of, all legally
required amounts necessary to satisfy any federal, state or local withholding
and employment-related tax requirements attributable to the Option, including,
without limitation, the grant or exercise of this Option or a disqualifying
disposition of any Option Shares, or (b) require the Optionee promptly to remit
the amount of such withholding to the Company before acting on the Optionee's
notice of exercise of this Option. In the event that the Company is unable to
withhold such amounts, for whatever reason, the Optionee agrees to pay to the
Company an amount equal to the amount the Company would otherwise be required to
withhold under federal, state or local law.
8. Adjustments.
In the event of any reorganization, merger, consolidation,
recapitalization, liquidation, reclassification, stock dividend, stock split,
combination of shares, rights offering, divestiture or extraordinary dividend
(including a spin-off), or any other similar change in the corporate structure
or shares of the Company, the Committee (or, if the Company is not the surviving
corporation in any such transaction, the board of directors of the surviving
corporation), in order to prevent dilution or enlargement of the rights of the
Optionee, will make appropriate adjustment (which determination will be
conclusive) as to (a) the number and kind of securities or other property
(including cash) subject to this Option and (b) the exercise price of this
Option.
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9. Subject to Plan.
The Option and the Option Shares granted and issued pursuant to this
Agreement have been granted and issued under, and are subject to the terms of,
the Plan. The terms of the Plan are incorporated by reference in this Agreement
in their entirety, and the Optionee, by execution of this Agreement,
acknowledges having received a copy of the Plan. The provisions of this
Agreement will be interpreted as to be consistent with the Plan, and any
ambiguities in this Agreement will be interpreted by reference to the Plan. In
the event that any provision of this Agreement is inconsistent with the terms of
the Plan, the terms of the Plan will prevail.
10. Miscellaneous.
10.1 Binding Effect. This Agreement will be binding upon the heirs,
executors, administrators and successors of the parties to this Agreement.
10.2 Governing Law. This Agreement and all rights and obligations
under this Agreement will be construed in accordance with the Plan and governed
by the laws of the State of Delaware, without regard to conflicts of laws
provisions. Any legal proceeding related to this Agreement will be brought in an
appropriate Illinois court, and the parties to this Agreement consent to the
exclusive jurisdiction of the court for this purpose.
10.3 Entire Agreement. This Agreement and the Plan set forth the
entire agreement and understanding of the parties to this Agreement with respect
to the grant and exercise of this Option and the administration of the Plan and
supersede all prior agreements, arrangements, plans and understandings relating
to the grant and exercise of this Option and the administration of the Plan.
10.4 Amendment and Waiver. Other than as provided in the Plan, this
Agreement may be amended, waived, modified or canceled only by a written
instrument executed by the parties to this Agreement or, in the case of a
waiver, by the party waiving compliance.
The parties to this Agreement have executed this Agreement effective
the day and year first above written.
BIOSANTE PHARMACEUTICALS, INC.
By_________________________________
Its____________________________
By execution of this Agreement, OPTIONEE
the Optionee acknowledges having
received a copy of the Plan. ___________________________________
(Signature)
___________________________________
(Name and Address)
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