EXHIBIT 10.52
MICROISLET, INC.
2005 EQUITY INCENTIVE PLAN
STOCK OPTION AGREEMENT
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Unless otherwise defined herein, the terms defined in the MicroIslet,
Inc. 2005 Equity Incentive Plan (the "Plan") shall have the same defined
meanings in this Option Agreement.
I. NOTICE OF STOCK OPTION GRANT.
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You have been granted an option to purchase Common Stock, subject to
the terms and conditions of the Plan and this Option Agreement, as follows:
Name of Optionee: ▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D., Ph.D.
Total Number of Shares Granted: 1,750,000
Type of Option: Incentive Stock Option
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X Nonstatutory Stock Option
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Exercise Price per Share: $2.20
Grant Date: January 20, 2006
Vesting Commencement Date: January 20, 2006
Vesting Schedule: This option may be exercised, in
whole or in part, in accordance with
the following schedule:
1/4 of the Shares subject to the
option shall vest on the Vesting
Commencement Date, and 1/4 of the
Shares subject to the option shall
vest on each of the first, second
and third anniversaries of the
Vesting Commencement Date, subject
to your continuing service as the
Company's principal executive
officer on each such vesting date.
Termination Period: This option may be exercised for
three months after the optionee
ceases to be a Service Provider. The
Administrator determines when the
optionee incurs a Termination of
Service for this purpose. Upon the
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death or Total and Permanent
Disability of the optionee, this
option may be exercised for 12
months after the optionee ceases to
be a Service Provider. In no event
shall this option be exercised later
than the Term/Expiration Date
provided for below. These time
periods may be extended as set forth
in Section II.I and Section II.J
below.
Term/Expiration Date: 10 years after Grant Date
II. AGREEMENT.
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▇. ▇▇▇▇▇ OF OPTION. The Administrator hereby grants to the optionee
named in the Notice of Stock Option Grant attached as Part I of this Option
Agreement (the "Optionee") an option (the "Option") to purchase the number of
Shares, as set forth in the Notice of Stock Option Grant, at the exercise price
per Share set forth in the Notice of Stock Option Grant (the "Exercise Price"),
subject to the terms and conditions of this Option Agreement and the Plan. This
Option is intended to be an Incentive Stock Option ("ISO") or a Nonstatutory
Stock Option ("NSO"), as provided in the Notice of Stock Option Grant.
B. EXERCISE OF OPTION.
1. VESTING/RIGHT TO EXERCISE. This Option is exercisable
during its term in accordance with the Vesting Schedule set forth in the Notice
of Stock Option Grant, this Option Agreement and the applicable provisions of
the Plan. This Option will in no event become exercisable for additional Shares
after a Termination of Service for any reason. Notwithstanding the foregoing,
this Option becomes exercisable in full if the Company is subject to a Change in
Control before the Optionee's Termination of Service. For purposes of this
Option, the term "Change in Control" shall not include any underwritten public
offering of Shares registered under the Securities Act of 1933, as amended (the
"Act"). This Option may also become exercisable in accordance with Section II.J.
below.
2. METHOD OF EXERCISE. This Option is exercisable by
delivering to the Administrator a fully executed "Exercise Notice" or by any
other method approved by the Administrator. The Exercise Notice shall provide
that the Optionee is electing to exercise the Option, the number of Shares in
respect of which the Option is being exercised (the "Exercised Shares"), and
such other representations and agreements as may be required by the
Administrator. The Exercise Notice shall be accompanied by payment of the full
aggregate Exercise Price as to all Exercised Shares. This Option shall be deemed
to be exercised upon receipt by the Administrator of such fully executed
Exercise Notice accompanied by such aggregate Exercise Price. The Optionee is
responsible for filing any reports of remittance or other foreign exchange
filings required in order to pay the Exercise Price.
C. LIMITATION ON EXERCISE. The grant of this Option and the issuance of
Shares upon exercise of this Option is subject to compliance with all Applicable
Laws. This Option may not be exercised if the issuance of Shares upon exercise
would constitute a violation of any Applicable Laws. In addition, this Option
may not be exercised unless (i) a registration statement under the Act is in
effect at the time of exercise of this Option with respect to the Shares or (ii)
in the opinion of legal counsel to the Company, the Shares issuable upon
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exercise of this Option may be issued in accordance with the terms of an
applicable exemption from the registration requirements of the Act. THE OPTIONEE
IS CAUTIONED THAT THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING
CONDITIONS ARE SATISFIED. ACCORDINGLY, THE OPTIONEE MAY NOT BE ABLE TO EXERCISE
THE OPTION WHEN DESIRED EVEN THOUGH THE OPTION IS VESTED. As a condition to the
exercise of this Option, the Company may require the Optionee to satisfy any
qualifications that may be necessary or appropriate, to evidence compliance with
any applicable law or regulation and to make any representation or warranty with
respect thereto as may be requested by the Company. Any shares which are issued
pursuant to an exemption from the registration requirements of the Act will be
"restricted securities" as that term is defined in Rule 144 under the Act, and
will bear an appropriate restrictive legend, unless they are registered under
the Act. The Company is under no obligation to register the Shares issuable upon
exercise of this Option.
D. METHOD OF PAYMENT. Payment of the aggregate Exercise Price shall be
by any of the following methods; provided, however, the payment shall be in
strict compliance with all procedures established by the Administrator:
1. cash;
2. check or wire transfer;
3. consideration received by the Company under a
broker-assisted sale and remittance program acceptable to the Administrator,
also known as a "cashless exercise" (provided that Officers and Directors shall
not be permitted to use this procedure if this procedure would violate Section
402 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, as amended); or
4. any combination of the foregoing methods of payment.
E. LEAVE OF ABSENCE. The Optionee shall not incur a Termination of
Service when the Optionee goes on a military leave, a sick leave or another bona
fide leave of absence, if the leave was approved by the Company (or Affiliate
employing him or her) in writing and if continued crediting of service is
required by the terms of the leave or by applicable law. However, the Optionee
incurs a Termination of Service when the approved leave ends, unless the
Optionee immediately returns to active work.
For purposes of ISOs, no leave of absence may exceed three months,
unless reemployment upon expiration of such leave is provided by statute or
contract. If reemployment upon expiration of a leave of absence approved by the
Company (or Affiliate employing him or her) is not so provided by statute or
contract, the Optionee shall be deemed to have incurred a Termination of Service
on the first day immediately following such three month period of leave for ISO
purposes and this Option shall cease to be treated as an ISO and shall terminate
upon the expiration of the three month period following the date the employment
relationship is deemed terminated.
F. 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 the Optionee only by the Optionee. The
terms of this Option Agreement and the Plan shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee. This Option may
not be assigned, pledged or hypothecated by the Optionee whether by operation of
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law or otherwise, and is not subject to execution, attachment or similar
process. Notwithstanding the foregoing, if this Option is designated as a
Nonstatutory Stock Option, the Administrator may, in its sole discretion, allow
the Optionee to transfer this Option as a gift to one or more family members.
For purposes of this Option Agreement, "family member" means a child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling,
niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law or sister-in-law (including adoptive relationships), any
individual sharing the Optionee's household (other than a tenant or employee), a
trust in which one or more of these individuals have more than 50% of the
beneficial interest, a foundation in which the Optionee or one or more of these
persons control the management of assets, and any entity in which the Optionee
or one or more of these persons own more than 50% of the voting interest.
G. TERM OF OPTION. This Option may be exercised only within the term
set out in the Notice of Stock Option Grant, and may be exercised during such
term only in accordance with this Option Agreement and the Plan.
H. TAX OBLIGATIONS.
1. WITHHOLDING TAXES. The Optionee agrees to make appropriate
arrangements with the Administrator for the satisfaction of all applicable
Federal, state, local, and foreign income taxes, employment tax, and any other
taxes that are due as a result of the Option exercise. With the Administrator's
consent, these arrangements may include withholding Shares that otherwise would
be issued to the Optionee pursuant to the exercise of this Option. The 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.
2. NOTICE OF DISQUALIFYING DISPOSITION OF ISO SHARES. If the
Option is an ISO, and if the Optionee sells or otherwise disposes of any of the
Shares acquired pursuant to the exercise of the ISO on or before the later of
(i) the date two years after the Grant Date, or (ii) the date one year after the
date of exercise, the Optionee shall immediately notify the Administrator in
writing of such disposition. The Optionee agrees that the Optionee may be
subject to income tax withholding by the Company on the compensation income
recognized by the Optionee.
I. EXTENSION IF THE OPTIONEE SUBJECT TO SECTION 16(b). If a sale within
the applicable Termination Period set forth in Section I of Shares acquired upon
the exercise of this Option would subject the Optionee to suit under Section
16(b) of the Exchange Act, this Option shall remain exercisable until the
earliest to occur of (i) the tenth (10th) day following the date on which a sale
of such shares by the Optionee would no longer be subject to such suit, (ii) the
one hundred and ninetieth (190th) day after the Optionee's Termination of
Service, or (iii) the Expiration Date.
J. SPECIAL TERMINATION PERIOD. The Company has established an ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ Policy (as such policy shall be amended from time to time, the "Policy")
relative to trading while in possession of material, undisclosed information.
Under the Policy, officers, directors, employees and consultants of the Company
and its subsidiaries are prohibited from trading in securities of the Company
during certain "Blackout Periods" as described in the Policy. If (i) the last
day of the Termination Period set forth in Section I is during such a Blackout
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Period, or (ii) exercise of the Option on the last day of the Termination Period
set forth in Section I is prevented by operation of Section II.C above, then
this Option shall automatically remain exercisable until fourteen (14) days
after (x) the first date on which such Blackout Period is no longer applicable
to the Optionee (if sale of Shares was prevented by clause (i) above) and/or (y)
the first date after the last day of the Termination Period that the Option
becomes exercisable (if exercise was prevented by clause (ii) above).
Notwithstanding the provisions of this Section II.J, in no event may this Option
by exercised after the Expiration Date.
K. CHANGE IN CONTROL. In the event of a Change in Control prior to the
Optionee's Termination of Service, the Option will be assumed or an equivalent
option or right 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 will
fully vest in and have the right to exercise the Option. In addition, if the
Option becomes fully vested and exercisable in lieu of assumption or
substitution in the event of a Change in Control, the Administrator will notify
the Optionee in writing or electronically that the Option will be fully vested
and exercisable for a period of time determined by the Administrator in its sole
discretion, and the Option will terminate upon the expiration of such period.
L. RESTRICTIONS ON RESALE. The Optionee agrees not to sell any Shares
at a time when Applicable Law, Company policies or an agreement between the
Company and its underwriters prohibit a sale. This restriction shall apply as
long as the Optionee is a Service Provider and for such period of time after the
Optionee's Termination of Service as the Administrator may specify.
M. LOCK-UP AGREEMENT. The Optionee hereby agrees that in connection
with any underwritten public offering of Shares made by the Company pursuant to
a registration statement filed under the Act, the Optionee shall not offer,
sell, contract to sell, pledge, hypothecate, grant any option to purchase or
make any short sale of, or otherwise dispose of any Shares (including but not
limited to Shares subject to this Option) or any rights to acquire Shares of the
Company for such period of time beginning on the date of filing of such
registration statement with the Securities and Exchange Commission and ending at
the time as may be established by the underwriters for such public offering;
provided, however, that such period of time shall end not later than one hundred
eighty (180) days from the effective date of such registration statement. The
foregoing limitation shall not apply to shares registered for sale in such
public offering.
N. ENTIRE AGREEMENT; GOVERNING LAW. This Option Agreement and the Plan
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 Option Agreement is
governed by the internal substantive laws, but not the choice of law rules, of
California.
O. NO GUARANTEE OF CONTINUED SERVICE. THE OPTIONEE ACKNOWLEDGES AND
AGREES THAT THE VESTING OF THE OPTION 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
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HEREUNDER). THE OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS OPTION
AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET
FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED
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.
By the Optionee's signature and the signature of the Company's
representative below, the Optionee and the Company agree that this Option is
granted under and governed by the terms and conditions of this Option Agreement
and the Plan. The Optionee has reviewed this Option Agreement and the Plan in
their entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Option Agreement and fully understands all provisions of this
Option Agreement and the Plan. The Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Administrator upon
any questions relating to this Option Agreement and the Plan.
The Optionee further agrees that the Company may deliver by
email all documents relating to the Plan or this Option (including, without
limitation, prospectuses required by the Securities and Exchange Commission) and
all other documents that the Company is required to deliver to its security
holders (including, without limitation, annual reports and proxy statements).
The Optionee also agrees that the Company may deliver these documents by posting
them on a web site maintained by the Company or by a third party under contract
with the Company.
OPTIONEE: MICROISLET, INC.
_________________________ By _________________________________
Signature
_________________________ Title ______________________________
Print Name
_________________________
Residence Address
________________________
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