EXHIBIT 4.7
STOCK OPTION AGREEMENT
AGREEMENT made as of November 15, 1996 by and between CADUS PHARMACEUTICAL
CORPORATION (the "Corporation"), a Delaware corporation having offices at 000
Xxx Xxx Xxxx Xxxxx Xxxx, Xxxxxxxxx, Xxx Xxxx 00000-0000, and
_____________________ ("Director"), residing at _____________________________.
W I T N E S S E T H:
WHEREAS, Director desires to participate in the equity ownership of the
Corporation and the Corporation desires to provide Director with an incentive to
remain a director of the Corporation by granting to Director the right and
option, subject to certain conditions, to purchase shares of the common stock,
$.01 par value, of the Corporation (the "Common Stock");
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, the parties hereto agree as follows:
1. Grant of Stock Option.
As an inducement to Director to continue to serve as a director of
the Corporation, the Corporation hereby grants to Director the right and option
(the "Option") to purchase from the Corporation Twelve Thousand (12,000) shares
of Common Stock (the "Shares"), subject to adjustment as provided in Paragraph 7
hereof, on the terms and subject to the conditions hereinafter set forth.
2. Purchase Price.
Subject to adjustment as provided in Paragraph 7 hereof, the
purchase price (the "Option Purchase Price") to be paid upon exercise of the
Option shall be $6.75 per share.
3. Exercisability of Option.
(a) The Option shall be exercisable, on a cumulative basis, during a
period of ten (10) years commencing from the date hereof and terminating at the
close of business on November 14, 2006, as follows:
(i) up to 3,000 Shares subject to the Option may be purchased
by Director after November 15, 1997;
(ii) up to an additional 3,000 Shares subject to the Option
may be purchased by Director after November 15, 1998;
(iii) up to an additional 3,000 Shares subject to the Option
may be purchased by Director after November 15, 1999; and
(iv) up to an additional 3,000 Shares subject to the Option
may be purchased by Director after November 15, 2000.
(b) The unexercised portion of the Option will automatically and
without notice terminate and become null and void at the close of business on
November 14, 2006. If, however, Director ceases to serve as a director of the
Corporation before the close of business on November 14, 2006, the Option will
terminate on the applicable date as described below; provided, however, that the
Compensation Committee of the Board of Directors shall have the authority to
accelerate the vesting schedule and/or extend the termination date and the time
for exercise of all or any part of the Option in any such event; and provided
further that none of the events described below shall extend the period of
exercisability of the Option beyond the close of business on November 14, 2006:
(i) the date Director ceases serving as a director of the
Corporation, if Director resigns or otherwise voluntarily ceases serving as a
director of the Corporation or if Director is removed as a director of the
Corporation for "cause" (as hereinafter defined);
(ii) the expiration of five (5) years after Director's death
or his ceasing to serve as a director of the Corporation by reason of his
"disability" (as hereinafter defined); or
(iii) the expiration of four (4) years from the date Director
involuntarily ceases serving as a director of the Corporation by reason of his
not being re-elected at an annual meeting of stockholders of the Corporation or
the date Director is removed as a director of the Corporation without "cause".
(c) For the purposes of this Agreement, the term "cause" shall mean
the commission by Director of any material act of malfeasance, fraud,
dishonesty, or breach of fiduciary duty against the Corporation or any
unauthorized disclosure of confidential information by Director. The
determination of cause by the Board of Directors of the Corporation shall be
final and binding for all purposes.
2
(d) For purposes of this Agreement, the term "disability" shall mean
such physical or mental illness or incapacity or Director as shall (i) prevent
Director from serving as a director of the Corporation and (ii) continue during
any period of one hundred twenty (120) consecutive days or for periods
aggregating one hundred eighty (180) days in any 365 day period.
4. Exercise of Option.
(a) The Option may be exercised by Director as to all or a portion
of the Shares (but not as to a fractional share of Common Stock) as to which the
Option has become exercisable, at any time within the applicable period
specified in Paragraph 3 hereof, by the giving of written notice of the exercise
thereof to the Corporation in the manner provided in Paragraph 14 hereof and
substantially in the form annexed hereto as Exhibit A, which notice shall be
accompanied by payment in full of the purchase price therefor by certified or
bank cashier's or other acceptable check. Such exercise shall be effective upon
receipt by the Corporation of such written notice and payment; and Director, to
the extent permitted by law, shall be deemed the owner of the Shares being
purchased as of the close of business on the date of such exercise and payment.
The Corporation shall cause a certificate or certificates representing the
Shares purchased to be delivered to Director within ten (10) days after the
effective date of such exercise. Director agrees that such certificate or
certificates shall bear such legend or legends as the Board of Directors of the
Corporation, in its sole discretion, determines to be necessary or appropriate
to prevent a violation of, or to perfect an exemption from, the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act").
(b) In lieu of the check provided for in subparagraph 4(a) above,
Director may, at his sole option and to the extent permitted by applicable law,
pay for the purchase price of the Shares being purchased by the exercise of the
Option, by delivering to the Corporation shares of Common Stock (in proper form
for transfer and accompanied by all requisite stock transfer tax stamps or cash
in lieu thereof) owned by Director having a Fair Market Value (as hereinafter
defined in subparagraph 4(c) hereof) equal to such purchase price. Director may
elect to make such delivery to the Corporation of shares of Common Stock from
Shares he is purchasing pursuant to his exercise of the Option by including such
election in his notice of exercise.
(c) The Fair Market Value of a share of Common Stock as of a
particular date (the "Determination Date") shall mean:
(i) If the Corporation's Common Stock is traded on an exchange
or is quoted through the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") National Market System, then the closing or last
sale price, respectively, reported for the last business day immediately
preceding the Determination Date.
3
(ii) If the Corporation's Common Stock is not listed on an
exchange or quoted on the NASDAQ National Market System but is traded in the
over-the-counter market, then the mean of the closing bid and asked prices
reported for the last business day immediately preceding the Determination Date.
(iii) Except as provided in subparagraph 4(c)(iv) below, if
the Corporation's Common Stock is not publicly traded, then as determined in
good faith by the Corporation's Board of Directors upon a review of relevant
factors.
(iv) If the Determination Date is the date of a liquidation,
dissolution or winding up of the Corporation, then all amounts to be payable per
share to holders of the Common Stock in the event of such liquidation,
dissolution or winding up.
5. Purchase for Investment.
Director agrees that at the request of the Corporation and upon
exercise of the Option, he shall execute and deliver to the Corporation a
written statement, in form satisfactory to the Corporation, representing and
warranting that he is purchasing the Shares for his own account, for investment
only and not with a view to the resale or distribution thereof and that any
subsequent offer for sale or sale of any of such Shares shall be made either
pursuant to (a) a registration statement on an appropriate form under the
Securities Act, which registration statement has become effective and is current
with respect to the shares being offered and sold, or (b) a specific exemption
from the registration requirements of the Securities Act, but in claiming such
exemption Director shall, prior to any offer for sale or sale of such shares,
obtain a favorable written opinion from counsel for or approved by the
Corporation as to the availability of such exemption.
6. Non-Transferability of Option.
The Option shall not be transferable by Director other than by will
or the laws of descent and distribution.
7. Adjustment of Shares.
If any change is made in the Shares deliverable upon exercise of the
Option (through merger, consolidation, reorganization, recapitalization, stock
dividend, stock split, split-up, spin-off, split-off, subdivision or combination
of shares, exchange of shares, issuance of rights to subscribe, change in
capital structure or similar event), such adjustments or substitutions shall be
made by the Board of Directors of the Corporation in or for the Shares
(including adjustments in the number of Shares and in the per share price of
Shares subject to the Option) as the Board of Directors of the Corporation
reasonably shall determine to be appropriate and equitable to prevent dilution
or enlargement of Director's rights hereunder.
4
8. Covenants of the Corporation.
The Corporation hereby covenants and agrees that:
(a) During the period within which the Option may be exercised, the
Corporation shall at all times reserve and keep available by all necessary
corporate action out of its shares of Common Stock for the purpose of issuance
or transfer upon exercise of the Option the number of shares of Common Stock
included in the Shares and such additional securities as may from time to time
be deliverable hereunder. Such shares may be authorized but unissued shares, or
may be shares held in the treasury of the Corporation or a combination thereof,
at the option of the Corporation.
(b) All shares which may be issued upon exercise of the Option or
delivered pursuant to this Agreement will, upon issuance and payment therefor as
provided herein, be validly issued, fully paid, nonassessable and free from all
liens and charges with respect to the issue thereof.
9. Representations and Warranties of the Corporation.
The Corporation represents and warrants to Director as follows:
(a) The Corporation is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
(b) The Corporation has all requisite legal and corporate
power to execute this Agreement. The execution, delivery and performance by the
Corporation of this Agreement and the consummation of the transactions
contemplated hereby have been authorized by all necessary corporate action on
the part of the Corporation.
(c) This Agreement has been duly executed by the Corporation
and, assuming due and valid execution and delivery of the same by Director,
constitutes the valid and legally binding obligation of the Corporation
enforceable in accordance with its terms.
10. No Fractional Shares.
Upon the exercise of the Option, the Corporation shall not be
required to issue any fractional shares or scrip certificates evidencing any
fractional interest in shares. In any case where, pursuant to the terms of the
Option, Director would be entitled, except for the provisions of this Paragraph
10, to receive a fractional share, the number of shares issuable upon such
exercise shall be rounded to the next larger whole share if
5
such fractional share interest is a major fraction; if such fractional share
interest is not a major fraction, it shall be disregarded.
11. "Lock-Up" Agreement.
Director, if so requested by the Corporation and an underwriter of
Common Stock or other securities of the Corporation, shall not sell, grant any
option or right to buy or sell, or otherwise transfer or dispose of in any
manner, whether in privately-negotiated or open-market transactions, any Shares
held by him or which he has the right to acquire during the 180-day period
following the effective date of a registration statement of the Corporation
filed with the Securities and Exchange Commission in connection with such
offering or such shorter period as such underwriter shall have advised the
Corporation in writing is adequate to permit the successful and orderly
distribution of the Common Stock or such other securities; provided, however,
that such "lock-up" agreement shall be in writing and in form and substance
satisfactory to the Corporation and such underwriter. The Corporation may impose
stop-transfer instructions with respect to the Shares subject to the foregoing
restrictions until the end of said 180-day period. This Paragraph 11 shall
survive the termination or exercise of the Option.
12. Entire Agreement Amendments.
This Agreement sets forth the entire understanding of the parties
with respect to the subject matter hereof, and no statement, representation,
warranty or covenant has been made by either party except as expressly set forth
herein. This Agreement supersedes and cancels all prior agreements between the
parties, whether written or oral, with respect to the subject matter hereof. No
alteration, amendment or modification of any of the terms and provisions hereof
shall be valid unless made pursuant to a written instrument signed by all of the
parties hereto.
13. Applicable Law.
This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of Delaware.
14. Notices.
All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered
personally or mailed, first class, postage prepaid, certified mail, return
receipt requested, to the other party at its address as set forth at the
beginning of this Agreement or as either of the parties may designate in
conformity with the foregoing.
6
15. Paragraph Headings.
The paragraph headings set forth in this Agreement are for reference
purposes only and shall not be considered as part of this Agreement in any
respect nor shall they in any way affect the substance of any provisions
contained in this Agreement.
16. Successors and Assigns.
This Agreement shall not be assignable by Director, but the rights
hereunder may be transferred as described in Paragraph 6 hereof. All of the
terms and provisions of this Agreement shall be binding upon and inure to the
benefit of and be enforceable by Director, the Corporation, the heirs and
personal representatives of Director and the successors and assigns of the
Corporation.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date first above written.
CADUS PHARMACEUTICAL CORPORATION
By: ________________________________
Xxxxxx X. Xxxxx, President
_________________________________
[Director]
7
EXHIBIT A
[Date of Exercise]
Cadus Pharmaceutical Corporation
000 Xxx Xxx Xxxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000-0000
Attention: Corporate Secretary
Re: Stock Option
Dear Sir:
I am the holder of a Stock Option granted to me by Cadus
Pharmaceutical Corporation (the "Corporation"), pursuant to a Stock Option
Agreement dated as of November 15, 1996, to purchase 12,000 shares of Common
Stock of the Corporation ("Shares"). I hereby exercise such option with respect
to __________ Shares, the total purchase price for which is $_________, and [I
enclose a certified or bank cashier's or other acceptable check payable to the
order of the Corporation in the amount of $______________, representing the
total purchase price for the Shares] [I hereby elect to pay the purchase price
by delivering to the Corporation __________ shares of Common Stock of the
Corporation having a fair market value equal to $__________ from the Shares I am
purchasing pursuant to the exercise of such option]. The certificate or
certificates representing the Shares should be registered in my name and should
be forwarded to me at ___________________________________.
Please acknowledge receipt of the exercise of my stock option on the
attached copy of this letter.
Very truly yours,
[Director]
RECEIPT ACKNOWLEDGED:
CADUS PHARMACEUTICAL CORPORATION
By: ________________________________
