THE SECURITY REPRESENTED BY THIS CERTIFICATE HAS BEEN ACQUIRED FOR INVESTMENT
AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.
NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.
NONSTATUTORY STOCK OPTION AGREEMENT
Senesco Technologies, Inc., an Idaho corporation (the "Company"), hereby
grants to Xxxxxx & Xxxxxx (the "Optionee") an Option to purchase a total of Five
Thousand (5,000) shares of Common Stock (the "Shares"), at the price determined
as provided herein, and in all respects subject to the terms set forth below.
1. Nature of the Option. This Option is a Nonstatutory Stock Option, is
--------------------
not intended to qualify for any special tax benefits to the Optionee and is
granted outside of the Company's 1998 Stock Incentive Plan, as amended.
2. Exercise Price. The exercise price is $7.00 for each share of Common
--------------
Stock, which is the Fair Market Value per share of Common Stock on the date of
grant, as determined by the Board. Fair Market Value shall mean the closing
price of the Company's Common Stock as reported on the NASD OTC Bulletin Board,
Nasdaq National Market, Nasdaq SmallCap Market, or such other stock exchange.
3. Exercise of Option. This Option shall be exercisable during its term
------------------
as follows:
(i) Right to Exercise
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(a) Subject to subsections 3(i)(b) and (c) below, shares subject to
this Option shall become exercisable based upon the following schedule
until all of such shares are exercisable:
Vesting Period Percentage Exercisable
-------------- ----------------------
Date of Grant 33 1/3%
12 months from Date of Grant 33 1/3%
24 months from Date of Grant 33 1/3%
(b) This Option may not be exercised for a fraction of a Share.
(c) In no event may this Option be exercised after the date of
expiration of the term of this Option as set forth in Section 8 below.
(ii) Method of Exercise. This Option shall be exercisable by written notice
------------------
in the form attached as Exhibit A, which shall state the election to exercise
the Option, the number of Shares in respect of which the Option is being
exercised, and such other representations and agreements as to the holder's
investment intent with respect to such shares of Common Stock as may be required
by the Company. Such written notice shall be signed by Optionee and shall be
delivered in person or by certified mail to the President, Secretary or Chief
Financial Officer of the Company or such other agent designated in writing by
the Company. The written notice shall be accompanied by payment of the exercise
price. This Option shall be deemed to be exercised upon receipt by the Company
of such written notice accompanied by the exercise price. Until the issuance (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company) of the stock certificate evidencing
such Shares, no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to the Optioned Stock, notwithstanding the
exercise of the Option. The Company shall issue (or cause to be issued) such
stock certificate promptly upon exercise of the Option.
No shares will be issued pursuant to the exercise of an Option unless such
issuance and such exercise shall comply with all relevant provisions of law and
the requirements of any stock exchange upon which the Shares may then be listed.
Assuming such compliance, for income tax purposes the Shares shall be considered
transferred to the Optionee on the date on which the Option is exercised with
respect to such Shares.
4. Investment Representations; Restrictions on Transfer.
----------------------------------------------------
(i) By receipt of this Option, by its execution and by its exercise in
whole or in part, Optionee represents to the Company the following:
(a) Optionee understands that this Option and any Shares purchased
upon its exercise are securities, the issuance of which requires compliance
with federal and state securities laws.
(b) Optionee is aware of the Company's business affairs and financial
condition and has acquired sufficient information about the Company to
reach an informed and knowledgeable decision to acquire the securities.
Optionee is acquiring these securities for investment for Optionee's own
account only and not with a view to, or for resale in connection with, any
"distribution" thereof within the meaning of the Securities Act of 1933, as
amended (the "Securities Act").
(c) Optionee acknowledges and understands that the securities
constitute "restricted securities" under the Securities Act and must be
held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available.
Optionee further acknowledges and understands that the Company is under no
obligation to register the securities. Optionee understands that the
certificate evidencing the securities will be imprinted with a legend which
prohibits the transfer of the securities unless they are registered or such
registration is not required in
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the opinion of counsel satisfactory to the Company and any other legend
required under applicable state securities laws.
(d) Optionee is familiar with the provisions of Rule 701 and Rule 144,
each promulgated under the Securities Act, which, in substance, permit
limited public resale of "restricted securities" acquired, directly or
indirectly, from the issuer thereof, in a non-public offering subject to
the satisfaction of certain conditions. Rule 701 provides that if the
issuer qualifies under Rule 701 at the time of exercise of the Option by
the Optionee, such exercise will be exempt from registration under the
Securities Act. In the event the Company later becomes subject to the
reporting requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, ninety (90) days thereafter the securities exempt under Rule
701 may be resold, subject to the satisfaction of certain of the conditions
specified by Rule 144, including among other things: (1) the sale being
made through a broker in an unsolicited "broker's transaction" or in
transactions directly with a market maker (as said term is defined under
the Securities Exchange Act of 1934); and, in the case of an affiliate, (2)
the availability of certain public information about the Company, and the
amount of securities being sold during any three-month period not exceeding
the limitations specified in Rule 144(e), if applicable. Notwithstanding
this paragraph 4(i)(d), the Optionee acknowledges and agrees to the
restrictions set forth in paragraph 4(ii) below.
In the event that the Company does not qualify under Rule 701 at the
time of exercise of the Option, then the securities may be resold in
certain limited circumstances subject to the provisions of Rule 144, which
requires among other things: (1) the availability of certain public
information about the Company; (2) the resale occurring not earlier than
the time period prescribed by Rule 144 after the party has purchased, and
made full payment for, within the meaning of Rule 144, the securities to be
sold; and (3) in the case of an affiliate, or of a non-affiliate who has
held the securities less than the time period prescribed by Rule 144, the
sale being made through a broker in an unsolicited "broker's transaction"
or in transactions directly with a market maker (as said term is defined
under the Securities Exchange Act of 1934) and the amount of securities
being sold during any three month period not exceeding the specified
limitations stated therein, if applicable.
(ii) Optionee agrees, in connection with an underwritten public offering of
the Company's securities, (1) not to sell, make short sale of, loan, grant any
options for the purchase of, or otherwise dispose of any shares of Common Stock
of the Company held by Optionee (other than those shares included in the
registration) without the prior written consent of the underwriters managing
such underwritten public offering of the Company's securities for a period of
one hundred eighty (180) days from the effective date of such registration (the
"Lock Up Period"), and (2) further agrees to execute any agreement reflecting
clause (1) above, or extending the Lock Up Period, as may be requested by the
underwriters at the time of the public offering.
-3-
5. Method of Payment. Payment of the exercise price shall be made by cash
-----------------
or check.
6. Restrictions on Exercise. This Option may not be exercised if the
-------------------------
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation, including any rule under
the Code of Federal Regulations as promulgated by the Federal Reserve Board. As
a condition to the exercise of this option, the Company may require Optionee to
make any representation and warranty to the Company as may be required by any
applicable law or regulation.
7. Non-Transferability of Option. This Option may not be transferred in
-----------------------------
any manner other than by will or by the laws of descent or 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, heirs, successors
and assigns of Optionee.
8. Term of Option. This Option may not be exercised more than ten years
--------------
from the date of grant of this Option, and may be exercised during such term
only in accordance with the terms of this Option Agreement.
9. Adjustments Upon Changes in Capitalization or Merger. The number of
------------------------------------------------------
shares of Common Stock covered by each outstanding Option shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of issued shares of Common Stock effected
without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be deemed to
have been "effected without receipt of consideration." Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an Option.
In the event of the proposed dissolution or liquidation of the Company, the
Board shall notify the Optionee at least fifteen (15) days prior to such
proposed action. To the extent it has not been previously exercised, the Option
will terminate immediately prior to the consummation of such proposed action. In
the event of a merger or consolidation of the Company with or into another
corporation or the sale of all or substantially all of the Company's assets
(hereinafter, a "merger"), the Option shall be assumed or an equivalent option
shall be substituted by such successor corporation or a parent or subsidiary of
such successor corporation. In the event that such successor corporation does
not agree to assume the Option or to substitute an equivalent option, the Board
shall, in lieu of such assumption or substitution, provide for the Optionee to
have the right to exercise the Option as to all of the Optioned Stock, including
Shares as to which the Option would not otherwise be exercisable. If the Board
makes an Option fully exercisable in lieu of assumption or substitution in the
event of a merger, the Board shall notify the Optionee that the Option shall be
fully exercisable for a period of fifteen (15) days from the date of such
-4-
notice, and the Option will terminate upon the expiration of such period. For
the purposes of this paragraph, the Option shall be considered assumed if,
following the merger, the Option or right confers the right to purchase, for
each Share of stock subject to the Option immediately prior to the merger, the
consideration (whether stock, cash, or other securities or property) received in
the merger by holders of Common Stock for each Share held on the effective date
of the transaction (and if holders were offered a choice of consideration, the
type of consideration chosen by the holders of a majority of the outstanding
Shares); provided, however, that if such consideration received in the merger
was not solely common stock of the successor corporation or its Parent, the
Board may, with the consent of the successor corporation and the participant,
provide for the consideration to be received upon the exercise of the Option,
for each Share of stock subject to the Option, to be solely common stock of the
successor corporation or its Parent equal in Fair Market Value to the per share
consideration received by holders of Common Stock in the merger or sale of
assets.
10. Repurchase Rights of the Company. The Optionee understands that the
---------------------------------
Company has the option to repurchase any Shares issued by the Company upon the
exercise of any portion of this Agreement, provided, however, that such
issuances were made pursuant to the exercise of Options prior to the effective
date of the Company's initial underwritten public offering of the Company's
securities. Such repurchases shall be at the Fair Market Value of the Shares
repurchased as of the date on which the Company exercises such option.
11. Taxation Upon Exercise of Option. Optionee understands that, upon
---------------------------------
exercise of this Option, Optionee will recognize income for tax purposes in an
amount equal to the excess of the then Fair Market Value of the Shares over the
exercise price. Optionee hereby agrees to notify the Company in writing within
thirty (30) days after the date of any such disposition. Upon a resale of such
Shares by the Optionee, any difference between the sale price and the Fair
Market Value of the Shares on the date of exercise of the option will be treated
as capital gain or loss.
12. Tax Consequences. The Optionee understands that any of the foregoing
----------------
references to taxation are based on federal income tax laws and regulations now
in effect. The Optionee has reviewed with the Optionee's own tax advisors the
federal, state, local and foreign tax consequences of the transactions
contemplated by this Agreement. The Optionee is relying solely on such advisors
and not on any statements or representations of the Company or any of its
agents. The Optionee understands that the Optionee (and not the Company) shall
be responsible for the Optionee's own tax liability that may arise as a result
of the transactions contemplated by this Agreement.
DATE OF GRANT: September 7, 1999
-----------------
SENESCO TECHNOLOGIES, INC.
By:
-------------------------------------
Xxxxxxx X. Xxxxxxxxxx
Chairman, Chief Executive Officer and
President
-5-
OPTIONEE ACKNOWLEDGES AND AGREES THAT THIS OPTION, THE TRANSACTIONS
CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT
CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A CONSULTANT
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 CONSULTING RELATIONSHIP AT
ANY TIME, WITH OR WITHOUT CAUSE.
Optionee has reviewed this Option Agreement in its 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.
Optionee agrees to notify the Company upon any change in the residence address
indicated below.
Dated:
----------------------
-----------------------------------
Name:
------------------------------
Residence Address:
-----------------------------------
-----------------------------------
-----------------------------------
Social Security No.
----------------
EXHIBIT A
NOTICE OF EXERCISE OF STOCK OPTION
TO:
FROM:
DATE:
RE: Exercise of Stock Option
I hereby exercise my option to purchase shares of Common
--------------
Stock at $ per share (total exercise price of $ ),
------------ ------------
effective today's date. This notice is given in accordance with the terms of my
Stock Option Agreement dated , 19 . The option price and vested
---------- ----
amount is in accordance with Sections 2 and 3 of the Stock Option Agreement.
Attached is a check payable to Senesco Technologies, Inc. for the total
exercise price of the shares being purchased, if applicable, or such other
method of payment as provided by Section 5 of the Stock Option Agreement. The
undersigned confirms the representations made in Section 4 of the Stock Option
Agreement.
Please prepare the stock certificate in the following name(s):
------------------------------------------
------------------------------------------
If the stock is to be registered in a name other than your name, please so
advise the Company. The Stock Option Agreement requires the Company's approval
for registration in a name other than your name and requires certain agreements
from any joint owner.
Sincerely,
-----------------------------------
(Signature)
-----------------------------------
(Print or Type Name)
Letter and consideration
received on , 20 .
------------------- --
By:
---------------------------
