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NO. 1 EXHIBIT 10.049
ALLERGY XXXXXXXXXX.XXX, INC.
1999 EQUITY INCENTIVE PLAN
STOCK OPTION AGREEMENT
This Stock Option Agreement (this "AGREEMENT") is made and entered
into as of the Date of Grant set forth below (the "DATE OF GRANT") by and
between Allergy Xxxxxxxxxx.xxx, Inc., a Delaware corporation (the "COMPANY"),
and the Optionee named below ("OPTIONEE"). Capitalized terms not defined herein
shall have the meanings ascribed to them in the Company's 1999 Equity Incentive
Plan (the "PLAN").
OPTIONEE: XXXXXXX X. XXXXX
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SOCIAL SECURITY NUMBER:
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OPTIONEE'S ADDRESS: 0000 XXXXXXXXX XXXXXXX
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XXXXXXXX, XXXXXXX 00000
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TOTAL OPTION SHARES: 2,250,000
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EXERCISE PRICE PER SHARE: $2.00
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DATE OF GRANT: MAY 6, 1999
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VESTING START DATE: MAY 6, 1999
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EXPIRATION DATE: MAY 5, 2004
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(unless earlier terminated under Section
3 hereof)
TYPE OF STOCK OPTION
(CHECK ONE): [ ] INCENTIVE STOCK OPTION
[XX] NONQUALIFIED STOCK OPTION
1. GRANT OF OPTION. The Company hereby grants to Optionee an option
(this "OPTION") to purchase up to the total number of shares of Common Stock of
the Company set forth above as Total Option Shares (collectively, the "SHARES")
at the Exercise Price Per Share set forth above (the "EXERCISE PRICE"), subject
to all of the terms and conditions of this Agreement and the Plan. If designated
as an Incentive Stock Option above, this Option is intended to qualify as an
"incentive stock option" ("ISO") within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "CODE"), to the extent permitted
under Code Section 422.
2. VESTING; EXERCISE PERIOD.
2.1 Vesting of Shares. This Option shall be vested and
immediately exercisable.
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2.2 Vesting of Options. Shares that are vested pursuant to the
schedule set forth in Section 2.1 hereof are "VESTED SHARES." Shares that are
not vested pursuant to the schedule set forth in Section 2.1 hereof are
"UNVESTED SHARES."
2.3 Expiration. This Option shall expire on the Expiration
Date set forth above and must be exercised, if at all, on or before the earlier
of the Expiration Date or the date on which this Option is earlier terminated in
accordance with the provisions of Section 3 hereof.
3. TERMINATION.
3.1 Termination for Any Reason Except Death, Disability or
Cause. If Optionee is Terminated for any reason except Optionee's death,
Disability or Cause, then this Option, to the extent (and only to the extent)
that it is vested in accordance with the schedule set forth in Section 2.1
hereof on the Termination Date, may be exercised by Optionee no later than three
(3) months after the Termination Date, but in any event no later than the
Expiration Date.
3.2 Termination Because of Death or Disability. If Optionee is
Terminated because of death or Disability of Optionee (or the Optionee dies
within three (3) months after Termination other than for Cause or because of
Disability), then this Option, to the extent that it is vested in accordance
with the schedule set forth in Section 2.1 hereof on the Termination Date, may
be exercised by Optionee (or Optionee's legal representative or authorized
assignee) no later than twelve (12) months after the Termination Date, but in
any event no later than the Expiration Date. Any exercise after three months
after the Termination Date when the Termination is for any reason other than
Optionee's disability, within the meaning of Code Section 22(e)(3), shall be
deemed to be the exercise of a nonqualified stock option.
3.3 Termination for Cause. If Optionee is Terminated for
Cause, this Option will expire on the Optionee's date of Termination.
3.4 No Obligation to Employ. Nothing in the Plan or this
Agreement shall confer on Optionee any right to continue in the employ of, or
other relationship with, the Company or any Parent or Subsidiary of the Company,
or limit in any way the right of the Company or any Parent or Subsidiary of the
Company to terminate Optionee's employment or other relationship at any time,
with or without Cause.
4. MANNER OF EXERCISE.
4.1 Stock Option Exercise Agreement. To exercise this Option,
Optionee (or in the case of exercise after Optionee's death, Optionee's
executor, administrator, heir or legatee, as the case may be) must deliver to
the Company an executed stock option exercise agreement in the form attached
hereto as Exhibit A, or in such other form as may be approved by the Company
from time to time (the "EXERCISE AGREEMENT"), which shall set forth, inter alia,
Optionee's election to exercise this Option, the number of shares being
purchased, any restrictions imposed on the Shares and any representations,
warranties and agreements regarding Optionee's investment intent and access to
information as may be required by the Company to comply with applicable
securities laws. If someone other than Optionee exercises this Option, then such
person must submit documentation reasonably acceptable to the Company that such
person has the right to exercise this Option.
4.2 Limitations on Exercise. This Option may not be exercised
unless such exercise is in compliance with all applicable federal and state
securities laws, as they are in effect on the date of exercise. This Option may
not be exercised as to fewer than 100 Shares unless it is exercised as to all
Shares as to which this Option is then exercisable.
4.3 Payment. The Exercise Agreement shall be accompanied by
full payment of the Exercise Price for the Shares being purchased in cash (by
check), or where permitted by law:
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(a) by cancellation of indebtedness of the Company to the
Optionee;
(b) by surrender of shares of the Company's Common Stock that
either: (1) have been owned by Optionee for more than six (6) months and have
been paid for within the meaning of SEC Rule 144 (and, if such shares were
purchased from the Company by use of a promissory note, such note has been fully
paid with respect to such shares); or (2) were obtained by Optionee in the open
public market; and (3) are clear of all liens, claims, encumbrances or security
interests;
(c) by tender of a full recourse promissory note having such
terms as may be approved by the Committee and bearing interest at a rate
sufficient to avoid imputation of income under Sections 483 and 1274 of the
Code; provided, however, that Participants who are not employees or directors of
the Company shall not be entitled to purchase Shares with a promissory note
unless the note is adequately secured by collateral other than the Shares;
(d) by waiver of compensation due or accrued to Optionee for
services rendered;
(e) provided that a public market for the Company's stock
exists: (1) through a "same day sale" commitment from Optionee and a
broker-dealer that is a member of the National Association of Securities Dealers
(an "NASD DEALER") whereby Optionee irrevocably elects to exercise this Option
and to sell a portion of the Shares so purchased to pay for the Exercise Price
and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to
forward the exercise price directly to the Company; or (2) through a "margin"
commitment from Optionee and an NASD Dealer whereby Optionee irrevocably elects
to exercise this Option and to pledge the Shares so purchased to the NASD Dealer
in a margin account as security for a loan from the NASD Dealer in the amount of
the Exercise Price, and whereby the NASD Dealer irrevocably commits upon receipt
of such Shares to forward the Exercise Price directly to the Company; or
(f) by any combination of the foregoing.
4.4 Tax Withholding. Prior to the issuance of the Shares upon
exercise of this Option, Optionee must pay or provide for any applicable federal
or state withholding obligations of the Company. If the Committee permits,
Optionee may provide for payment of withholding taxes upon exercise of this
Option by requesting that the Company retain Shares with a Fair Market Value
equal to the minimum amount of taxes required to be withheld. In such case, the
Company shall issue the net number of Shares to the Optionee by deducting the
Shares retained from the Shares issuable upon exercise.
4.5 Issuance of Shares. Provided that the Exercise Agreement
and payment are in form and substance satisfactory to counsel for the Company,
the Company shall issue the Shares registered in the name of Optionee,
Optionee's authorized assignee, or Optionee's legal representative, and shall
deliver certificates representing the Shares with the appropriate legends
affixed thereto.
5. NOTICE OF DISQUALIFYING DISPOSITION OF ISO SHARES. To the
extent this Option is an ISO, if Optionee sells or otherwise disposes of any of
the Shares acquired pursuant to the ISO on or before the later of (a) the date
two (2) years after the Date of Grant, and (b) the date one (1) year after
transfer of such Shares to Optionee upon exercise of this Option, then Optionee
shall immediately notify the Company in writing of such disposition.
6. COMPLIANCE WITH LAWS AND REGULATIONS. The exercise of this
Option and the issuance and transfer of Shares shall be subject to compliance by
the Company and Optionee with all applicable requirements of federal and state
securities laws and with all applicable requirements of any stock exchange on
which the Company's Common Stock may be listed at the time of such issuance or
transfer. Optionee understands that the Company is under no obligation to
register or qualify the Shares with the SEC, any state securities commission or
any stock exchange to effect such compliance.
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7. NONTRANSFERABILITY OF OPTION. This Option may not be transferred in
any manner other than by will or by the laws of descent and distribution and may
be exercised during the lifetime of Optionee only by Optionee. The terms of this
Option shall be binding upon the executors, administrators, successors and
assigns of Optionee.
8. TAX CONSEQUENCES. Set forth below is a brief summary as of the date
the Board adopted the Plan of some of the federal and California tax
consequences of exercise of this Option and disposition of the Shares. THIS
SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT
TO CHANGE. OPTIONEE SHOULD CONSULT A TAX ADVISOR BEFORE EXERCISING THIS OPTION
OR DISPOSING OF THE SHARES.
8.1 Exercise of Incentive Stock Option. To the extent this Option
qualifies as an ISO, there will be no regular federal or Georgia income tax
liability upon the exercise of this Option, although the excess, if any, of the
fair market value of the Shares on the date of exercise over the Exercise Price
will be treated as a tax preference item for federal income tax purposes and may
subject the Optionee to the alternative minimum tax in the year of exercise.
8.2 Exercise of Nonqualified Stock Option. To the extent this
Option does not qualify as an ISO, there may be a regular federal and Georgia
income tax liability upon the exercise of this Option. Optionee will be treated
as having received compensation income (taxable at ordinary income tax rates)
equal to the excess, if any, of the fair market value of the Shares on the date
of exercise over the Exercise Price. The Company may be required to withhold
from Optionee's compensation or collect from Optionee and pay to the applicable
taxing authorities an amount equal to a percentage of this compensation income
at the time of exercise.
8.3 Disposition of Shares. The following tax consequences may
apply upon disposition of the Shares.
a. Incentive Stock Options. If the Shares are held for more
than twelve (12) months after the date of the transfer of the Shares pursuant to
the exercise of an ISO and are disposed of more than two (2) years after the
Date of Grant, any gain realized on disposition of the Shares will be treated as
long-term capital gain for federal and California income tax purposes. If Shares
purchased under an ISO are disposed of within the applicable one (1) year or two
(2) year period, any gain realized on such disposition will be treated as
compensation income (taxable at ordinary income rates) to the extent of the
excess, if any, of the fair market value of the Shares on the date of exercise
over the Exercise Price.
b. Nonqualified Stock Options. If the Shares are held for
more than twelve (12) months after the date of the transfer of the Shares
pursuant to the exercise of an NQSO, any gain realized on disposition of the
Shares will be treated as long-term capital gain.
c. Withholding. The Company may be required to withhold from
Participant's compensation or collect from the Participant and pay to the
applicable taxing authorities an amount equal to a percentage of this
compensation income.
9. PRIVILEGES OF STOCK OWNERSHIP. Optionee shall not have any of the
rights of a stockholder with respect to any Shares until the Shares are issued
to Optionee.
10. INTERPRETATION. Any dispute regarding the interpretation of this
Agreement shall be submitted by Optionee or the Company to the Committee for
review. The resolution of such a dispute by the Committee shall be final and
binding on the Company and Optionee.
11. ENTIRE AGREEMENT. The Plan is incorporated herein by reference.
This Agreement and the Plan and the Exercise Agreement constitute the entire
agreement and understanding of the parties hereto with respect to the subject
matter hereof and supersede all prior understandings and agreements with respect
to such subject matter.
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12. NOTICES. Any notice required to be given or delivered to the
Company under the terms of this Agreement shall be in writing and addressed to
the Corporate Secretary of the Company at its principal corporate offices. Any
notice required to be given or delivered to Optionee shall be in writing and
addressed to Optionee at the address indicated above or to such other address as
such party may designate in writing from time to time to the Company. All
notices shall be deemed to have been given or delivered upon: personal delivery;
three (3) days after deposit in the United States mail by certified or
registered mail (return receipt requested); one (1) business day after deposit
with any return receipt express courier (prepaid); or one (1) business day after
transmission by facsimile.
13. SUCCESSORS AND ASSIGNS. The Company may assign any of its rights
under this Agreement. This Agreement shall be binding upon and inure to the
benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer set forth herein, this Agreement shall be binding upon
Optionee and Optionee's heirs, executors, administrators, legal representatives,
successors and assigns.
14. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Gorgia, without regard to that
body of law pertaining to choice of law or conflict of law.
15. ACCEPTANCE. Optionee hereby acknowledges receipt of a copy of the
Plan and this Agreement. Optionee has read and understands the terms and
provisions thereof, and accepts this Option subject to all the terms and
conditions of the Plan and this Agreement. Optionee acknowledges that there may
be adverse tax consequences upon exercise of this Option or disposition of the
Shares and that the Company has advised Optionee to consult a tax advisor prior
to such exercise or disposition.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
in duplicate by its duly authorized representative and Optionee has executed
this Agreement in duplicate as of the Date of Grant.
ALLERGY XXXXXXXXXX.XXX, INC. OPTIONEE
By:
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Name: Name: Xxxxxxx X. Xxxxx
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Title: Title: CEO
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EXHIBIT A
STOCK OPTION EXERCISE AGREEMENT
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EXHIBIT A
ALLERGY XXXXXXXXXX.XXX, INC.
1999 EQUITY INCENTIVE PLAN (THE "PLAN")
STOCK OPTION EXERCISE AGREEMENT
I hereby elect to purchase the number of shares of Common Stock of Allergy
Xxxxxxxxxx.xxx, Inc. (the "Company") as set forth below:
Optionee:
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Number of Shares Purchased:
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Social Security Number:
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Purchase Price per Share:
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Address:
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Aggregate Purchase Price:
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Date of Option Agreement:
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Type of Option: [ ] Incentive Stock Option
[ ] Nonqualified Stock Option
Exact Name of Title to Shares:
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1. DELIVERY OF PURCHASE PRICE. Optionee hereby delivers to the Company the
Aggregate Purchase Price, to the extent permitted in the Option Agreement (the
"Option Agreement") as follows (check as applicable and complete):
[ ] in cash (by check) in the amount of $_____________________, receipt
of which is acknowledged by the Company;
[ ] by cancellation of indebtedness of the Company to Optionee in the
amount of $___________________________________;
[ ] by delivery of ______________________________ fully-paid,
nonassessable and vested shares of the Common Stock of the Company
owned by Optionee for at least six (6) months prior to the date hereof
(and which have been paid for within the meaning of SEC Rule 144), or
obtained by Optionee in the open public market, and owned free and
clear of all liens, claims, encumbrances or security interests, valued
at the current Fair Market Value of $____________________ per share;
[ ] by tender of a full recourse promissory note in the principal
amount of $__________________________, secured by a Pledge Agreement of
even date herewith (the par value of the Shares is tendered in cash (by
check) receipt of which is acknowledged by the Company);
[ ] by the waiver hereby of compensation due or accrued to Optionee for
services rendered in the amount of $_________________________________;
[ ] through a "same-day-sale" commitment, delivered herewith, from
Optionee and the NASD Dealer named therein, in the amount of
$_______________________________; or
[ ] through a "margin" commitment, delivered herewith from Optionee and
the NASD Dealer named therein, in the amount of $_____________________.
2. MARKET STANDOFF AGREEMENT. Optionee, if requested by the Company and an
underwriter of Common Stock (or other securities) of the Company, agrees not to
sell or otherwise transfer or dispose
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of any Common Stock (or other securities) of the Company held by Optionee during
the period requested by the managing underwriter following the effective date of
a registration statement of the Company filed under the Securities Act, provided
that all officers and directors of the Company are required to enter into
similar agreements. Such agreement shall be in writing in a form satisfactory to
the Company and such underwriter. The Company may impose stop-transfer
instructions with respect to the shares (or other securities) subject to the
foregoing restriction until the end of such period.
3. TAX CONSEQUENCES. OPTIONEE UNDERSTANDS THAT OPTIONEE MAY SUFFER ADVERSE TAX
CONSEQUENCES AS A RESULT OF OPTIONEE'S PURCHASE OR DISPOSITION OF THE SHARES.
OPTIONEE REPRESENTS THAT OPTIONEE HAS CONSULTED WITH ANY TAX CONSULTANT(S)
OPTIONEE DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR DISPOSITION OF THE
SHARES AND THAT OPTIONEE IS NOT RELYING ON THE COMPANY FOR ANY TAX ADVICE.
4. ENTIRE AGREEMENT. The Plan and Option Agreement are incorporated herein by
reference. This Exercise Agreement, the Plan and the Option Agreement constitute
the entire agreement and understanding of the parties and supersede in their
entirety all prior understandings and agreements of the Company and Optionee
with respect to the subject matter hereof, and are governed by California law
except for that body of law pertaining to choice of law or conflict of law.
Date:
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SIGNATURE OF OPTIONEE
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SPOUSAL CONSENT
I acknowledge that I have read the foregoing Stock Option Exercise
Agreement (the "AGREEMENT") and that I know its contents. I hereby consent to
and approve all of the provisions of the Agreement, and agree that the shares of
the Common Stock of Allergy Xxxxxxxxxx.xxx, Inc. purchased thereunder (the
"SHARES") and any interest I may have in such Shares are subject to all the
provisions of the Agreement. I will take no action at any time to hinder
operation of the Agreement on these Shares or any interest I may have in or to
them.
Date:
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SIGNATURE OF OPTIONEE'S SPOUSE
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SPOUSE'S NAME - TYPED OR PRINTED
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OPTIONEE'S NAME - TYPED OR PRINTED
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