Exhibit 10.8
FLEMINGTON PHARMACEUTICAL CORPORATION
NONQUALIFIED STOCK OPTION AGREEMENT
AGREEMENT, made as of this 1st day of _________, by and between
FLEMINGTON PHARMACEUTICAL CORPORATION, a New Jersey corporation, having offices
at 00 Xxxxx Xxxxxx, Xxxxxxxxxx, XX 00000 (the "Company"), and _______________
(the "Optionee"). Capitalized terms not defined herein shall have the meanings
ascribed thereto in the Plan.
WHEREAS, on January 1, 1997, the Board of Directors of the Company (the
"Board") adopted the Flemington Pharmaceutical Corporation 1997 Stock Option
Plan (the "Plan"), subject to approval by the stockholders of the Company by
December 31, 1997; and
WHEREOF, on June 30, 1997 the stockholders of the Company, by written
consent in lieu of a meeting of the stockholders, approved the Board's adoption
of the Plan.
WHEREAS, on _________ (the "Grant Date") pursuant to the terms and
conditions of the Plan, the Board authorized the grant to the Optionee of an
Option (the "Option") to purchase an aggregate of _______ shares of the
authorized but unissued Common Stock (the "Option Shares"), conditioned upon the
Optionee's acceptance thereof upon the terms and conditions set forth in this
Agreement and subject to the terms and conditions of the Plan; and
WHEREAS, the Optionee desires to acquire the Option on the terms and
conditions set forth in this Agreement and subject to the terms and conditions
of the Plan;
NOW, THEREFORE, it is agreed:
1. Date of Grant. The date of grant of this Option is _________.
2. Nature of the Option. This Option is a nonqualified Option.
3. Exercise Price. The exercise price is $____ for each share of Common
Stock, subject to adjustment in accordance with the Plan.
4. Exercisability of Option. This Option shall be exercisable during its term
as follows:
4.1 This Option shall be exercisable in whole or in part to the extent
of ________ Option Shares on or after ________________.
4.2 This Option may not be exercised for a fraction of a share.
4.3 After a portion of the Option becomes exercisable it shall remain
exercisable except as otherwise provided herein, until the close of business on
April 30, 2002.
5. Method of Exercise.
5.1 Notice to the Company. The Option shall be exercised in whole or in
part by written notice in substantially the form attached hereto as Exhibit A
directed to the Company at its principal place of business accompanied by full
payment as hereinafter provided of the exercise price for the number of Option
Shares specified in the notice.
5.2 Delivery of Option Shares. The Company shall deliver a certificate
for the Option Shares to the Optionee as soon as practicable after payment
therefor.
5.3 Payment of Purchase Price.
5.3.1 Cash Payment. The Optionee shall make all payments by
wire transfer, certified or bank check or company check, in each case payable to
the order of the Company; the Company shall not be required to deliver
certificates for Option Shares until the Company has confirmed the receipt of
good and available funds in payment of the purchase price thereof.
5.3.2 Payment Price of Withholding Tax. Any required
withholding tax shall be paid in cash or certified or bank check or company
check.
5.3.3 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 Part 207 of Title 12 of the Code of Federal Regulations ("Regulation
G") as promulgated by the Federal Reserve Board. As a condition to the exercise
of this Option, the Company may require the Optionee to make any representation
and warranty to the Company as may be required by any applicable law or
regulation.
6. Optionee's Representations. The Optionee hereby represents and
warrants to the Company that
6.1 Investment Intent. The Optionee is acquiring the Option and shall
acquire the Option Shares for its own account and not with a view towards the
distribution thereof;
6.2 Option Shares Restricted. The Optionee understands that the
Optionee must, for an indefinite period of time, bear the economic risk of the
investment in the Option Shares, which cannot be sold by it unless they are
registered under the Securities Act of 1933, as amended (the "1933 Act") or an
exemption therefrom is available thereunder and that the Company is under no
obligation to register the Option Shares for sale under the 1933 Act;
6.3 Access to Information. In its position with the Company, the
Optionee has had both the opportunity to ask questions and receive answers from
the officers and directors of the Company and all persons acting on its behalf
concerning the terms and conditions of the offer made hereunder and to obtain
any additional information to the extent the Company possesses or may possess
such
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information or can acquire it without unreasonable effort or expense
necessary to verify the accuracy of the information contained in the Company's
offering documents.
6.4 Transfer Restrictions. The Optionee is aware that the Company shall
place stop transfer orders with its transfer agent against the transfer of the
Option Shares in the absence of registration under the 1933 Act or an exemption
therefrom as provided herein; and
6.5 Legends. The certificates evidencing the Option Shares shall bear
the following legends:
"The shares represented by this certificate have been acquired
for investment and have not been registered under the
Securities Act of 1933. The shares may not be sold or
transferred in the absence of such registration or an
exemption therefrom under the 1933 Act."
"The shares represented by this certificate have been acquired
pursuant to a Stock Option Agreement, dated as of _________, a
copy of which is on file with the Company, and may not be
transferred, pledged or disposed of except in accordance with
the terms and conditions thereof."
7. Withholding Tax. Not later than the date as of which an amount first becomes
includable in the gross income of the Optionee for Federal income tax purposes
with respect to the Option, the Optionee shall pay to the Company, or make
arrangements satisfactory to the Committee regarding the payment of, any
Federal, state and local taxes of any kind required by law to be withheld or
paid with respect to such amount. The obligations of the Company under the Plan
and pursuant to this Agreement shall be conditional upon such payment or
arrangements with the Company and the Company shall, to the extent permitted by
law, have the right to deduct any such taxes from any payment of any kind
otherwise due to the Optionee from the Company.
8. Effect of Termination of Consulting Agreement. If the Optionee's Consulting
Agreement with the Company dated _________ (the "Consulting Agreement") is
terminated by the Company for any reason other than Company's breach thereof,
the Optionee may, but only within twelve (12) months from the date of
termination the Consulting Agreement, exercise this Option to the extent the
Optionee was entitled to exercise it at the date of such termination, or if the
Optionee does not exercise such Option (which the Optionee was entitled to
exercise) within the time specified herein, the Option shall terminate.
9. Disability of Optionee. [intentionally omitted]
10. Death of Optionee. [intentionally omitted]
11. Non-Transferability of Option. This Option may not be transferred in any
manner without the Optionee obtaining the express written consent of the Company
prior to the proposed transfer.
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12. Early Disposition of Shares. [Intentionally omitted]
13. Term of Option. This Option may not be exercised more than five (5) years
from the date of grant of this Option, and may be exercised during such term
only in accordance with the Plan and the terms of this Option Agreement.
14. Restriction on Transfer of Option Shares. Anything in this Agreement to the
contrary notwithstanding, the Optionee hereby agrees that it shall not sell,
transfer by any means or otherwise dispose of the Option Shares acquired by it
without registration under the 1933 Act, or in the event that they are not so
registered, unless (i) an exemption from the 1933 Act registration requirements
is available thereunder, and (ii) the Optionee has furnished the Company with
notice of such proposed transfer and the Company's legal counsel, in its
reasonable opinion, shall deem such proposed transfer to be so exempt.
15. Miscellaneous.
15.1 Notices. All notices, requests, deliveries, payments, demands and
other communications which are required or permitted to be given under this
Agreement shall be in writing and shall be either delivered personally or sent
by registered or certified mail, or by private courier, return receipt
requested, postage prepaid to the Company at its principal executive office and
to the Optionee at its address set forth below, or to such other address as
either party shall have specified by notice in writing to the other. Notice
shall be deemed duly given hereunder when delivered or mailed as provided
herein.
15.2 Plan Paramount; Conflicts with Plan. This Agreement and the Option
shall, in all respects, be subject to the terms and conditions of the Plan,
whether or not stated herein. In the event of a conflict between the provisions
of the Plan and the provisions of this Agreement, the provisions of the Plan
shall in all respects be controlling.
15.3 Stockholder Rights. The Optionee shall not have any of the rights
of a stockholder with respect to the Option Shares until such shares have been
issued after the due exercise of the Option.
15.4 Waiver. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
other or subsequent breach.
15.5 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof. This Agreement
may not be amended except by writing executed by the Optionee and the Company.
15.6 Binding Effect; Successors. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and, to the extent not
prohibited herein, their respective heirs, successors, assigns and
representatives. Nothing in this Agreement expressed or implied, is intended to
confer on any person other than the parties hereto and as provided above, their
respective heirs, successors, assigns and representatives any rights, remedies,
obligations or liabilities.
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15.7 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New Jersey (without regard to choice
of law provisions).
15.8 Headings. The headings contained herein are for the sole purpose
of convenience of reference, and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of
the day and year first above written.
FLEMINGTON
PHARMACEUTICAL CORPORATION
(a New Jersey corporation)
By:______________________________
Xxxxx X. Xxxxxx III, President
Optionee acknowledges receipt of a copy of the Plan, a copy of
which is annexed hereto, and represents that the Optionee is familiar with the
terms and provisions thereof, and hereby accepts this Option subject to all of
the terms and provisions thereof. Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Board upon any
questions arising under the Plan.
---------------------------------
Optionee
By:______________________________
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EXHIBIT A
FORM OF NOTICE OF EXERCISE OF OPTION
-------------------------
Date
Flemington Pharmaceutical Corporation
Attention: Board of Directors
Re: Flemington Pharmaceutical Corporation 1997 Stock Option Plan
Purchase of Option Shares
Gentlemen:
In accordance with the Stock Option Agreement dated as of _________
("Agreement") between Saggi Capital Corp. ("Optionee") and with Flemington
Pharmaceutical Corporation (the "Company"), the Optionee hereby irrevocably
elects to exercise the right to purchase 200,000 shares of the Company's common
stock, par value $.01 per share ("Common Stock"), which are being purchased for
investment and not for resale. All capitalized terms not defined herein shall
have the meanings ascribed to them in the Plan.
As payment for my shares, enclosed is (check and complete applicable
box[es]):
------
a [company check] [certified check] [bank check]
payable to the order of "Flemington Pharmaceutical
Corporation" in the sum of $__________;
------
------
confirmation of wire transfer in the amount of
$__________; and/or
------
The Optionee hereby represents, warrants to, and agrees with, the
Company that
(i) The Optionee is acquiring the Option Shares for its own
account for investment purposes only and not with a view to, or for the resale
in connection with any "distribution" thereof for purposes of the Securities Act
of 1933 (the "Securities Act");
(ii) The Optionee is aware of the Company's business affairs
and financial condition, and have acquired sufficient information about the
Company to reach an informed and knowledgeable decision to acquire the
securities. The Optionee has received a copy of all reports and documents
required to be filed by the Company with the Commission pursuant to the Exchange
Act within the last 24 months and all reports issued by the Company to its
stockholders;
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(iii) The Optionee understands that it must bear for an
indefinite period of time the economic risk of an investment in the Option
Shares, which cannot be sold by me unless they are registered under the
Securities Act or an exemption therefrom is available thereunder and that the
Company is under no obligation to register the Option Shares for sale under the
1933 Act;
(iv) In its position with the Company, the Optionee has had
both the opportunity to ask questions and receive answers from the officers and
directors of the Company and all persons acting on its behalf concerning the
terms and conditions of the offer made hereunder and to obtain any additional
information to the extent the Company possess or may possess such information or
can acquire it without unreasonable effort or expense necessary to verify the
accuracy of the information obtained pursuant to clause (ii) above;
(v) The Optionee is aware that the Company shall place stop
transfer orders with its transfer agent against the transfer of the Option
Shares in the absence of registration under the 1933 Act or an exemption
therefrom as provided herein;
(vi) The Optionee's rights with respect to the Option Shares
shall, in all respects, be subject to the terms and conditions of this Company's
1997 Stock Option Plan and this Agreement; and
(vii) the certificates evidencing the Option Shares shall bear
the following legends:
"The shares represented by this certificate have been acquired
for investment and have not been registered under the
Securities Act of 1933. The shares may not be sold or
transferred in the absence of such registration or an
exemption therefrom under said Act."
"The shares represented by this certificate have been acquired
pursuant to a Stock Option Agreement, dated as of
____________, a copy of which is on file with the Company, and
may not be transferred, pledged or disposed of except in
accordance with the terms and conditions thereof."
(viii) The Optionee is familiar with the provisions of Rule
144, promulgated under the Securities Act, which, in substance, permits limited
public resale of "restricted securities" acquired, directly or indirectly, from
the issuer thereof (or from an affiliate of such issuer), in a non-public
offering subject to the satisfaction of certain conditions, including, among
other things: (1) the availability of certain public information about the
Company; (2) the resale occurring not less than two years after the party has
purchased, and made full payment within the meaning of Rule 144, for the
securities to be sold; and, in the case of an affiliate, or of a non-affiliate
who has held the securities less than three years, (3) 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 in Rule 144,
if applicable.
(ix) The Optionee further understands that at the time it
decides to sell the securities there may be no public market upon which to make
such a sale, and that, even if such a
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public market then exists, the Company may not be satisfying the current public
information requirements of Rule 144, and that, in such event, the Optionee
would be precluded from selling the securities under Rule 144 even if the
two-year minimum holding period is satisfied.
(x) The Optionee further understands that in the event all of
the applicable requirements of Rule 144 are not satisfied, registration under
the Securities Act, compliance with Regulation A, or some other registration
exemption will be required; and that, notwithstanding the fact that Rule 144 is
not exclusive, the Staff of the SEC has expressed its opinion that persons
proposing to sell private placement securities other than in a registered
offering and otherwise than pursuant to Rule 144 will have a substantial burden
of proof in establishing that an exemption from registration is available for
such offers or sales, and that such persons and their respective brokers who
participate in such transactions do so at their own risk.
Kindly forward to me my certificate at your earliest convenience.
Very truly yours,
--------------------------------- ----------------------------------
(Signature) (Address)
--------------------------------- ----------------------------------
(Print Name)
----------------------------------
(Social Security Number)
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