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EXHIBIT 10.31
[XXXXXX SCIENCES LOGO]
NON-QUALIFIED STOCK OPTION AGREEMENT
TO: Xxx X. Xxxxx
FROM: Xxxxxxx Xxxxxx
DATE: August 21, 1996
The Board of Directors, the Corporation hereby grants you an option (the
"Option") to purchase 45,000 shares of the Common Stock, $.10 par value, of the
Corporation (the "Shares") at $27.000 per share, upon the terms and conditions
contained in this Agreement.
1. The Option is intended to be an option which does not qualify as an
incentive stock option within the meaning of the Internal Revenue Code of
1986, as amended.
2. The Option may not be transferred by you otherwise than by will or by the
laws of descent and distribution and, during your lifetime, the Option is
exercisable only by you.
3. Subject to the terms contained in this Agreement, you may exercise the
Option in accordance with the following schedule:
5,000 shares will be exercisable on May 1, 1997
10,000 shares will be exercisable on May 1, 1998
15,000 shares will be exercisable on May 1, 1999
10,000 shares will be exercisable on May 1, 2000
5,000 shares will be exercisable on May 1, 2001
4. In the event of a change in control of the Corporation, the right to
exercise all options shall vest immediately upon such change. For
purposes of this provision, "change in control" means any of the
following: (1) the acquisition of beneficial ownership by any person or
entity (or more than one (1) person or entity acting as a group) of a
majority of the outstanding voting shares of the Corporation; (2) a tender
offer made and consummated for at least thirty-three percent (33%) of
Corporation's common stock; (3) the acquisition or beneficial ownership by
any person or entity (or more than one (1) person or entity acting as a
group) of more than fifty-one percent (51%) of the total fair market value
of the Corporation's assets; or (4) a majority of the members of the Board
are replaced within a one (1) year period.
5. This Option will expire (to the extent not previously exercised) on the
tenth anniversary of the date of this Agreement, unless terminated earlier
upon your termination of employment with the Corporation or any subsidiary
or your death, which are governed by Paragraphs 5 and 6 of this Agreement,
respectively.
6. If your employment with the Corporation or any subsidiary of the
Corporation terminates for any reason other than your death, you have the
right for a period of 90 days following such termination, but in no event
subsequent to the expiration date of the Option, to
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exercise that portion of the Option, if any, which is exercisable by
you on the date of termination of your employment.
7. If your employment with the Corporation or any subsidiary of the
Corporation terminates by reason of your death, the Option, to the extent
it is exercisable on the date of your death, may be exercised for a period
of 180 days following your death, but in no event subsequent to the
expiration date of the Option, by your legal representative or by the
person or persons to whom your rights shall pass by will or by the laws of
descent and distribution.
8. The Option shall be exercised by giving a written notice to the Secretary
of the Corporation. Such notice shall specify the number of Shares to be
purchased, the name in which you desire to have the shares registered,
your address and your social security number and shall be accompanied by
payment in full in cash, or, with the consent of the Corporation's Board
of Directors, in Common Stock of the Corporation, of the aggregate option
price for the number of Shares purchased. Such exercise shall be
effective only upon the actual receipt of such written notice and no
rights or privileges of a shareholder of the Corporation in respect of any
of the Shares issuable upon exercise of any part of the Option shall inure
to you or any other person who is entitled to exercise the Option unless
and until certificates representing such Shares shall have been issued.
9. Nothing contained in this Agreement, nor any action taken by the
Corporation, shall confer upon you any right with respect to continuation
of your employment by the Corporation or any subsidiary of the
Corporation.
10. If, upon or as a result of your exercise of the Option, there shall be
payable by the Corporation any amount for income tax withholding, you will
pay such amount to the Corporation to reimburse the Corporation for such
income tax withholding.
11. By agreeing to and accepting this agreement, you agree that the option
previously granted to you on May 1, 1996, by the Compensation Committee of
the Board of Directors of the Corporation, is hereby rescinded and
cancelled, and the option spoken of in this agreement is in lieu thereof.
Sincerely yours,
XXXXXX SCIENCES INC.
/s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx
Chairman of the Board
The above is agreed to and accepted:
/s/ Xxx X. Xxxxx
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Dated: August 21, 1996
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