Published on August 14, 2007
LIXTE
BIOTECHNOLOGY HOLDINGS, INC
STOCK
COMPENSATION PLAN
Section
1. Purpose
The
purpose of this Stock Compensation Plan (the “Plan”) is to advance the interests
of Lixte Biotechnology Holdings, Inc., a Delaware corporation (“Lixte”), by
enhancing its ability to attract, retain and provide incentives to directors,
officers, employees and independent contractors who are crucial to the future
growth and success of Lixte and its subsidiaries and Affiliates (as hereinafter
defined).
Section
2. Definitions
“Affiliate”
when used in conjunction with Lixte, shall include, but not be limited to,
an
entity or other person that directly or indirectly controls, or is controlled
by, or is under common control with Lixte.
“Award”
means any Option, Stock Appreciation Right, Performance Share or Restricted
Stock awarded under the Plan.
“Board”
means the board of directors of Lixte.
“Committee”
means a committee of not less than two members of the Board appointed by the
Board to administer the Plan.
“Common
Stock” or “Stock” means the Common Stock of Lixte.
“Company”
means Lixte and, except where the content requires otherwise, all present and
future subsidiaries and Affiliates of Lixte.
“Designated
Beneficiary” means the beneficiary designated by a Participant, in a manner
determined by the Board, to receive amounts due or exercise rights of the
Participant in the event of the Participant’s death or incapacity. In the
absence of an effective designation by a Participant, Designated Beneficiary
shall mean the Participant’s estate, in the event of the Participant’s death,
and the Participant’s legal guardian, in the event of the Participant’s
incapacity.
“Fair
Market Value” means with respect to Common Stock on any given date (i) if the
Common Stock is listed for trading on one or more national securities exchanges,
the mean of the high and low sales prices during regular trading hours on the
principal exchange on which it is traded on the grant date, or, if the Common
Stock shall not have been traded during regular trading hours on such principal
exchange over such period, the mean of the high and low sales prices during
regular trading hours on such principal exchange on the first day prior thereto
on which the Common Stock was so traded; (ii) if Common Stock is not listed
for
trading on a national securities exchange but is traded on the over-the-counter
market, the mean of the highest and lowest bid prices for the Common Stock
during regular trading hours on the grant date, or, if there are no such bid
prices for the Common Stock during such period, the mean of the highest and
lowest bid prices during regular trading hours on the first day prior thereto
on
which such prices appear; and (iii) in all other events, such amount as may
be
determined by the Board in good faith by any fair and reasonable
means.
“Option”
means an option to purchase shares of Common Stock awarded to a Participant
under Section 6.
“Participant”
means a person selected by the Board to receive an Award under the
Plan.
“Performance
Shares” mean shares of Common Stock which may be earned by the achievement of
performance goals awarded to a Participant under Section 8.
“Reporting
Person” means a person subject to Section 16 of the Securities Exchange Act of
1934 or any successor provision.
“Restricted
Period” means the period of time selected by the Board during which shares
subject to a Restricted Stock Award may be repurchased by or forfeited to the
Company.
“Restricted
Stock” means shares of Common Stock awarded to a Participant under Section
9.
“Stock
Appreciation Right” or “SAR” means a right to receive any excess in Fair Market
Value of shares of Common Stock over the exercise price awarded to a Participant
under Section 7.
Section
3. Administration
The
Plan
shall be administered by the Board or by a Committee to which some or all of
the
administration of the Plan is delegated by the Board. In the event the Board
appoints a Committee, references in the Plan to the Board shall, as appropriate,
be read as references to the Committee. The Board shall appoint and remove
members of the Committee in its discretion in accordance with applicable laws.
If necessary in order to comply with Rule 16b-3 under the Exchange Act, the
Committee shall, in the Board’s discretion, be comprised solely of “non-employee
directors” within the meaning of said Rule 16b-3. The foregoing notwithstanding,
the Board and/or the Committee may delegate nondiscretionary administrative
duties to such employees of the Company as it deems proper and the Board, in
its
absolute discretion, may at any time and from time to time exercise any and
all
rights and duties of the Committee under the Plan.
The
Board
shall have plenary authority in its discretion, to the maximum extent
permissible by law, subject to and not inconsistent with the express provisions
of the Plan, to administer the Plan. Without limiting the foregoing, the Board
shall have authority to make Awards, to set administrative rules, guidelines
and
practices relating to the Plan as it shall deem advisable from time to time,
and
to interpret the provisions of the Plan. In determining the persons to whom
Awards shall be made, the number of shares to be covered by each Award and
the
terms thereof (including the restriction, if any, which shall apply to the
Common Stock subject to an Award), the Board shall take into account the duties
of the respective persons, their present and potential contributions to the
success of the Company and such other factors as the Board, in its discretion,
shall deem relevant in connection with accomplishing the purposes of the Plan.
The Board’s decisions shall be final and binding. Except as otherwise required
by law, no member of the Board shall be liable for any action or determination
relating to the Plan made in good faith.
2
Section
4. Eligibility
Awards
may be made to employees and independent contractors of the Company. For
purposes hereof, independent contractors shall include consultants, advisors
and
directors of the Company.
Section
5. Stock
Available for Awards
(a) Subject
to adjustment under Section 10 below, Awards may be made under the Plan for
up
to Two Million Five Hundred Thousand (2,500,000) shares of Common Stock. If
any
Award in respect of shares of Common Stock expires or is terminated unexercised
or is forfeited for any reason or settled in a manner that results in fewer
shares outstanding than were initially awarded, the shares subject to such
Award
or so surrendered, as the case may be, to the extent of such expiration,
termination, forfeiture or decrease, shall again be available for award under
the Plan. Shares issued under the Plan may consist in whole or in part of
authorized but unissued shares or treasury shares.
(b) The
Board
may grant Awards under the Plan in substitution for stock and stock based awards
held by employees of another corporation who become employees of the Company
as
a result of a merger or consolidation of the employing corporation with the
Company or the acquisition by the Company of property or stock of the employing
corporation. The substitute Awards shall be granted on such terms and conditions
as the Board considers appropriate in the circumstances. The shares which may
be
delivered under such substitute Awards shall be in addition to the maximum
number of shares provided for in Section 5(a).
Section
6. Stock
Options
(a) General.
(i) Subject
to the provisions of the Plan, the Board may award Options and determine the
number of shares to be covered by each Option, the option price therefor, the
conditions and limitations applicable to the exercise of the Option and the
restrictions, if any, applicable to the shares of Common Stock issuable
thereunder.
(ii) The
Board
shall establish the exercise price at the time each Option is
awarded.
(iii) Subject
to Section 10(a), each Option shall be exercisable at such times and subject
to
such terms and conditions as the Board may specify in the applicable Award.
The
Board may impose such conditions with respect to the exercise of Options,
including conditions relating to applicable federal or state securities laws,
as
it considers necessary or advisable.
3
(iv) Options
granted under the Plan shall provide for the payment of the exercise price
by
delivery of cash or check in an amount equal to the exercise price of such
Options or by delivery of shares of Common Stock of the Company owned by the
optionee for at least six months (valued at Fair Market Value) and, to the
extent permitted by the Board at or after the award of the Option, may provide
for payment by (A) delivery of other property acceptable to the Board (valued
at
fair market value), (B) delivery of a promissory note of the optionee to the
Company on terms determined by the Board, (C) delivery of an irrevocable
undertaking by a broker to deliver promptly to the Company sufficient funds
to
pay the exercise price or delivery of irrevocable instructions to a broker
to
deliver promptly to the Company cash or a check sufficient to pay the exercise
price, (D) payment of such other lawful consideration as the Board may
determine, or (E) any combination of the foregoing.
(v) The
Board
may provide for the automatic award of an Option upon the delivery of shares
to
the Company in payment of the exercise price of an Option for up to the number
of shares so delivered.
(vi) The
Board
may at any time accelerate the time at which all or any part of an Option may
be
exercised.
Section
7. Stock
Appreciation Rights
(a) The
Board
may grant Stock Appreciation Rights entitling recipients on exercise of the
SAR
to receive an amount, in cash or Stock or a combination thereof (such form
to be
determined by the Board), determined in whole or in part by reference to
appreciation in the Fair Market Value of the Stock between the date of the Award
and the exercise of the Award. A Stock Appreciation Right shall entitle the
Participant to receive, with respect to each share of Stock as to which the
SAR
is exercised, the excess of the share’s Fair Market Value on the date of
exercise over its Fair Market Value on the date the SAR was
granted.
(b) SARs
may
be granted in tandem with, or independently of, Options granted under the Plan.
An SAR granted in tandem with an Option may be granted either at or after the
time the Option is granted.
(c) When
SARs
are granted in tandem with Options, the following provisions shall
apply:
(i) The
SAR
shall be exercisable only at such time or times, and to the extent, that the
related Option is exercisable and shall be exercisable in accordance with the
procedure required for exercise of the related Option.
(ii) The
SAR
shall terminate and no longer be exercisable upon the termination or exercise
of
the related Option, except that a SAR granted with respect to less than the
full
number of shares covered by an Option shall not be reduced until the number
of
shares as to which the related Option has been exercised or has terminated
exceeds the number of shares not covered by the SAR.
(iii) The
Option shall terminate and no longer be exercisable upon the exercise of the
related SAR.
4
(d) An
SAR
not granted in tandem with an Option shall become exercisable at such time
or
times, and on such conditions, as the Board may specify.
(e) The
Board
may at any time accelerate the time at which all or any part of the SAR may
be
exercised.
(f) SARs
may
not be sold, pledged, assigned or transferred in any manner other than by will
or by the laws of intestate succession, and may be exercised during the lifetime
of grantee only by the Participant. Any transfer by the Participant of any
SAR
granted under the Plan shall void such SAR and the Company shall have no further
obligation with respect to such SAR. No SAR shall be pledged or hypothecated
in
any way, nor shall any SAR be subject to execution, attachment or similar
process.
(g) SARs
granted pursuant to this Plan shall represent no more than unfunded unsecured
contractual obligations of the Company and the Company shall have no obligation
to set aside any assets to fund any SAR obligation. Amounts payable for SARs
under the Plan shall be paid from the general funds of the Company, and the
Participant and any Designated Beneficiary shall be no more than unsecured
general creditors of the Company with no special or prior right to any assets
of
the Company for payment of any SAR obligations hereunder.
Section
8. Performance
Shares
(a) The
Board
may make Performance Share Awards entitling recipients to acquire shares of
Stock upon the attainment of specified performance goals. The Board may make
Performance Share Awards independent of or in connection with the granting
of
any other Award under the Plan. The Board in its sole discretion shall determine
the performance goals applicable under each such Award, the periods during
which
performance is to be measured, and all other limitations and conditions
applicable to the awarded Performance Shares.
(b) A
Participant receiving a Performance Share Award shall have the rights of a
stockholder only as to shares actually received by the Participant under the
Plan and not with respect to shares subject to an Award but not actually
received by the Participant. Prior to receipt of shares pursuant to a
Performance Share Award, the Performance Share Award shall represent an unfunded
unsecured contractual obligation of the Company and the Company shall be under
no obligation to set aside any assets to fund such Performance Share Award.
A
Participant shall be entitled to receive a stock certificate evidencing the
acquisition of shares of Stock under a Performance Share Award only upon
satisfaction of all conditions specified in the Agreement evidencing the
Performance Share Award.
(c) The
Board
may at any time accelerate or waive any or all of the goals, restrictions or
conditions imposed under any Performance Share Award.
(d) Performance
Share Awards may not be sold, pledged, assigned or transferred in any manner
other than by will or by the laws of intestate succession. Any transfer by
the
Participant of any Performance Share Award granted under the Plan shall void
such Award and the Company shall have no further obligation with respect to
such
Award. No Performance Share Award shall be pledged or hypothecated in any way,
nor shall any Performance Share Award be subject to execution, attachment or
similar process.
5
Section
9. Restricted
Stock
(a) The
Board
may grant Restricted Stock Awards entitling recipients to acquire shares of
Stock, subject to the right of the Company to repurchase all or part of such
shares at their purchase price (or to require forfeiture of such shares if
purchased at no cost) from the recipient in the event that conditions specified
by the Board in the applicable Award are not satisfied prior to the end of
the
applicable Restricted Period or Restricted Periods established by the Board
for
such Award. Conditions for repurchase (or forfeiture) may be based on continuing
employment or service or achievement of pre-established performance or other
goals and objectives.
(b) Shares
of
Restricted Stock may not be sold, assigned, transferred, pledged or otherwise
encumbered, except as permitted by the Board during the applicable Restricted
Period. Shares of Restricted Stock shall be evidenced in such manner as the
Board may determine. Any certificates issued in respect of shares of Restricted
Stock shall be registered in the name of the Participant and, unless otherwise
determined by the Board, deposited by the Participant, together with a stock
power endorsed in blank, with the Company (or its designee). At the expiration
of the Restricted Period, the Company (or such designee) shall deliver such
certificates to the Participant or if the Participant has died, to the
Participants’ Designated Beneficiary.
(c) The
purchase price for each share of Restricted Stock shall be determined by the
Board. Such purchase price may be paid in cash or such other lawful
consideration as is determined by the Board.
(d) The
Board
may at any time accelerate the expiration of the Restricted Period applicable
to
all, or any particular, outstanding shares of Restricted Stock.
(e) Notwithstanding
the foregoing, the Board may award to Participants Restricted Stock for services
rendered or to be rendered by such Participant pursuant to the terms of any
agreement between the Company and such Participant, which award is not requested
to contain any repurchase rights or forfeiture provisions.
Section
10. General
Provisions Applicable to Awards
(a) Maximum
Term.
No
Award shall have a term exceeding ten years, measured from the date of the
Award
grant.
(b) Documentation.
Each
Award under the Plan shall be evidenced by an instrument delivered to the
Participant specifying the terms and conditions thereof and containing such
other terms and conditions not inconsistent with the provisions of the Plan
as
the Board considers necessary or advisable. Such instruments may be in the
form
of agreements to be executed by both the Company and the Participant, or
certificates, letters or similar documents, acceptance of which shall evidence
agreement to the terms thereof and of this Plan. The certificates representing
the Stock issued pursuant to an Award granted under this Plan shall bear such
legends as may be required by applicable law to give notice of restrictions
on
transfer of such shares.
6
(c) Change
in Control.
In the
event that the Company or the division, subsidiary or other affiliated entity
for which a Participant performs services is sold, merged, consolidated,
reorganized or liquidated, all unvested Options immediately vest.
(d) Board
Discretion.
Each
type of Award may be made alone, in addition to or in relation to any other
type
of Award. The terms of each type of Award need not be identical and the Board
need not treat Participants uniformly. Except as otherwise provided by the
Plan
or a particular Award, any determination with respect to an Award may be made
by
the Board at the time of the Award grant or at any time thereafter.
(e) Termination
of Status.
The
Board shall determine and specify in the Award documentation the effect on
an
Award of the disability, death, retirement, authorized leave of absence or
other
termination of employment or other status of a Participant and the extent to
which, and the period during which, the Participant’s legal representative,
guardian or Designated Beneficiary may exercise rights under such
Award.
(f) Dilutions
and Other Adjustments.
In the
event of any stock dividend or split, issuance or repurchase of stock or
securities convertible into or exchangeable for shares of stock, grants of
options, warrants or rights to purchase stock, recapitalization, combination,
exchange or similar change affecting 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, the Board in its sole discretion may equitably
adjust any or all of (i) the number and kind of shares in respect of which
Awards may be made under the Plan, (ii) the number and kind of shares subject
to
outstanding Awards, and (iii) the award, exercise or conversion price with
respect to any of the foregoing, and may make any other equitable adjustments
or
take such other equitable action as the Board, in its discretion, shall deem
appropriate, including, if considered appropriate by the Board, making provision
for a cash payment with respect to an outstanding Award. Such adjustments or
actions shall be conclusive and binding for all purposes. In the event of a
change in the Common Stock which is limited to a change in the designation
thereof to “Capital Stock” or other similar designation, or to a change in the
par value thereof, or from no par value to par value (or vice versa), without
increase or decrease in the number of issued shares, the shares resulting from
any such change shall be deemed to be Common Stock within the meaning of the
Plan. For purposes hereof, the conversion of any convertible securities of
the
Company shall not be deemed to have been “effected without receipt of
consideration.”
In
the
event that the Company or the division, subsidiary or other affiliated entity
for which a Participant performs services is sold, merged, consolidated,
reorganized or liquidated, the Board may take any one or more of the following
actions as to outstanding Awards: (i) provide that such Awards shall be
assumed, or substantially equivalent Awards shall be substituted, by the
acquiring or succeeding corporation (or an affiliate thereof) on such terms
as
the Board determines to be appropriate, (ii) upon written notice to
Participants, provide that all unexercised Options or SARs shall terminate
immediately prior to the consummation of such transaction unless exercised
by
the Participant within a specified period following the date of such notice,
(iii) in the event of a sale or similar transaction under the terms of which
holders of the Common Stock of the Company receive a payment for each share
surrendered in the transaction (the “Sales Price”), make or provide for a
payment to each Option and/or SAR holder equal to the amount by which (A) the
Sales Price times the number of shares of Common Stock subject to Participant’s
outstanding, vested Options or SARs exceeds (B) the aggregate exercise price
of
all such outstanding, vested Options or SARs, in exchange for the termination
of
such Options or SARs, (iv) or make such other adjustments, if any, as the Board
determines to be necessary or advisable to provide each Participant with a
benefit substantially similar to that to which the Participant would have been
entitled had such event not occurred.
7
(g) Withholding.
The
Participant shall pay to the Company, or make provision satisfactory to the
Board for payment of, any taxes required by law to be withheld in respect of
Awards under the Plan no later than the date of the event creating the tax
liability. In the Board’s discretion, and subject to such conditions as the
Board may establish, such tax obligations may be paid in whole or in part in
shares of Common Stock, including shares retained from the Award creating the
tax obligation, valued at their Fair Market Value. The Company may, to the
extent permitted by law, deduct any such tax obligations from any payment of
any
kind otherwise due to the Participant.
(h) Foreign
Nationals.
Awards
may be made to Participants who are foreign nationals or employed outside the
United States on such terms and conditions different from those specified in
the
Plan as the Board considers necessary or advisable to achieve the purposes
of
the Plan and comply with applicable laws and/or achieve favorable tax results
under foreign tax laws.
(i) Amendment
of Award.
The
Board may amend, modify or terminate any outstanding Award, including
substituting therefor another Award of the same or a different type, and
changing the date of exercise or realization, provided that the Participant’s
consent to such action shall be required unless the Board determines that the
action, taking into account any related action, would not materially and
adversely affect the Participant.
(j) Conditions
on Delivery of Stock.
The
Company shall not be obligated to deliver any shares of Stock pursuant to the
Plan or to remove restrictions from shares previously delivered under the Plan
(i) until all conditions of the Award have been satisfied or removed, (ii)
until, in the opinion of the Company’s counsel, all applicable federal and state
laws and regulations have been complied with, and (iii) if the outstanding
Stock
is at the time listed on any stock exchange, until the shares to be delivered
have been listed or authorized to be listed on such exchange upon official
notice of issuance. If the sale of Stock has not been registered under the
Securities Act of 1933, as amended, the Company may require, as a condition
to
exercise of the Award, such representations or agreements as the Company may
consider appropriate to avoid violation of such Act and may require that the
certificates evidencing such Stock bear an appropriate legend restricting
transfer. Except to the extent as may be specified in the documentation with
respect to a particular Award grant, the Company shall be under no obligation
to
register or qualify any shares of Common Stock subject to Awards under any
federal or state securities law or on any exchange.
Section
11. Miscellaneous
(a) No
Right To Employment or Other Status.
No
person shall have any claim or right to be granted an Award, and the grant
of an
Award shall not be construed as giving a Participant the right to continued
employment by or the right to continue to provide services to the Company.
The
Company expressly reserves the right at any time to dismiss a Participant free
from any liability or claim under the Plan, except as may be expressly provided
in the applicable Award.
8
(b) No
Rights As Stockholder.
Subject
to the provisions of the applicable Award, no Participant or Designated
Beneficiary shall have any rights as a stockholder with respect to any shares
of
Common Stock to be distributed under the Plan until he or she becomes the record
holder thereof.
(c) No
Restriction on the Right of the Company to Effect Corporate
Changes.
The
Plan and the Options granted hereunder shall not affect in any way the right
or
power of Lixte or its stockholders to make or authorize any or all adjustments,
recapitalization, reorganizations or other changes in the Company’s capital
structure or its business, or any merger or consolidation of the Company, or
any
issue of stock or of options, warrants or rights to purchase stock or of bonds,
debentures, preferred or prior preference stocks whose rights are superior
to or
affect the Common Stock or the rights of holders thereof or which are
convertible into or exchangeable for Common Stock, or the dissolution or
liquidation of Lixte or the Company, or any sale or transfer of all or any
part
of its assets or business, or any other corporate act or proceeding, whether
of
a similar character or otherwise.
(d) Exclusion
from Benefit Computations.
Except
as expressly specified in the applicable plan or program, no amount or shares
of
Common Stock payable upon exercise of an Award granted under the Plan shall
be
considered salary, wages or compensation for purposes of determining the amount
or nature of benefits that a Participant is entitled to receive under any
Company benefit plan or program.
(e) Effective
Date and Term.
This
Plan shall become effective upon adoption by the Board provided, however, that
no Award shall be exercisable unless and until written consent of the
shareholders of the Company, or approval of shareholders of the Company voting
at a validly called shareholders’ meeting, is obtained within twelve months
after adoption by the Board. If such shareholder approval is not obtained within
such time, Awards granted hereunder shall terminate and be of no force and
effect from and after expiration of such twelve-month period. Awards may be
granted or exercised under this Plan only after there has been compliance with
all applicable federal and state securities laws. No Award may be made under
the
Plan after the tenth anniversary of the Plan’s effective date, but Awards
granted before such date may extend beyond that date.
(f) Amendment
of Plan.
The
Board may amend, suspend or terminate the Plan or any portion thereof at any
time; provided, however, that no amendment shall be made without stockholder
approval if such approval is necessary to comply with any applicable tax or
regulatory requirement. Prior to any such approval, Awards may be made under
the
Plan expressly subject to such approval.
(g) Delivery
of Financial Statements.
To the
extent required by applicable laws, rules and regulations, the Company shall
deliver to each Participant financial statements of the Company at least
annually while such Participant holds an outstanding Award.
9
(h) Notices.
Any
notice to be given under the terms of the Plan shall be addressed to the Company
in care of its Secretary at its principal office, and any notice to be given
to
a Participant shall be addressed to such Participant at the address maintained
by the Company for such person or at such other address as the Participant
may
specify in writing to the Company.
(i) Governing
Law.
The
provisions of the Plan shall be governed by and interpreted in accordance with
the laws of the state of Delaware.
|
LIXTE
BIOTECHNOLOGY HOLDINGS, INC.
|
|
|
By:
|
|
| Name: John S. Kovach | |
|
Title:
President
|
10
STOCK
OPTION AGREEMENT
THIS
STOCK OPTION AGREEMENT (“Agreement”) is made by and between LIXTE BIOTECHNOLOGY
HOLDINGS, INC, a Delaware corporation (the “Company”), and
______________________ (the “Optionee”).
NOW,
THEREFORE, in consideration of the mutual benefit to be derived herefrom, the
Company and Optionee agree as follows:
1. Grant
of Option.
The
Company hereby grants to Optionee, subject to all the terms and provisions
of
the Stock Compensation Plan, as such Plan may be hereinafter amended, a copy
of
which is attached hereto and incorporated herein by this reference (the “Plan”),
the right, privilege and option (“Option”) to purchase _______ shares of its
common stock (“Stock”) at __________ per share, in the manner and subject to the
conditions provided hereinafter and in the Plan and any amendments thereto
and
any rules and regulations thereunder.
2. Vesting
and Exercise of Option.
The
Optionee shall be vested in _____ % of the total number of shares subject to
the
Option on the date of execution of this Agreement. Thereafter, the remaining
shares subject to the Option (the “Vesting Shares”) shall vest in the Optionee
and may be exercised by the Optionee as to the percentage (to a maximum of
100%)
of the Vesting Shares determined by multiplying the number of complete years
that the Optionee has been in the employ of the Company since the date of
execution of this Agreement by _____% for each complete year. Any exercise
may
be with respect to any part or all of the shares then vested and exercisable
pursuant to such Option, provided that the minimum number of shares exercisable
at any time shall not be less _______ shares or the balance of shares for which
the Option is then exercisable.
3. Termination
of Option.
Except
as otherwise provided in this Agreement or the Plan, to the extent not
previously exercised, the Option shall terminate upon the first to occur of
any
of the following events:
a. ____________,
20____, not to exceed 10 years from the date of the grant of the Option
hereunder;
b. the
date
the Optionee ceases to be employed by the Company (including any Affiliate
thereof as defined by the Plan), is no longer an officer or member of the Board
of Directors of the Company or no longer performs services for the Company,
for
any reason (other than such Optionee's death or disability), any Option granted
hereunder to such Optionee shall expire three months after the date of such
termination. The Board shall, in its sole and absolute discretion, decide
whether an authorized leave of absence or absence for military or governmental
service, or absence for any other reason, shall constitute termination of
eligibility for purposes of this Section. In the event the Optionee’s
termination results from the fact that the Optionee is “disabled,” the Option
shall expire one year after the date of such termination. Any option that has
not vested in the Optionee as of the date of termination of employment or
service with the Company, shall immediately expire and shall be null and
void.
c. six
months after the date of the Optionee’s death. The Option may be exercised
(subject to the condition that no Option shall be exercisable after its
expiration and only to the extent that the Optionee's right to exercise such
Option was vested at the time of the Optionee's death) at any time within six
months after the Optionee's death by the executors or administrators of the
Optionee or by any person or persons who shall have acquired the Option directly
from the Optionee by bequest or inheritance. Any option that has not vested
in
the Optionee as of the date of death, shall immediately expire and shall be
null
and void.
11
d. the
dissolution or liquidation of the Company; or
e. the
breach by Optionee of any provision of the Plan or this Agreement.
4. Method
of Exercise.
An
Option shall be exercised by written notice to the Company by the Optionee
(or
successor in the event of death). Such written notice shall state the number
of
shares with respect to which the Option is being exercised and designate a
time,
during normal business hours of the Company, for the delivery thereof ("Exercise
Date"), which time shall be at least 30 days after the giving of such notice
unless an earlier date shall have been mutually agreed upon. At the time
specified in the written notice, the Company shall deliver to the Optionee
at
the principal office of the Company, or such other appropriate place as may
be
determined by the Board, a certificate or certificates for such shares.
Notwithstanding the foregoing, the Company may postpone delivery of any
certificate or certificates after notice of exercise for such reasonable period
as may be required to comply with any applicable listing requirements of any
securities exchange. In the event an Option shall be exercisable by any person
other than the Optionee, the required notice under this Section shall be
accompanied by appropriate proof of the right of such person to exercise the
option. The option exercise price shall be payable in full on or before the
option Exercise Date in any one of the following alternative forms:
a. Full
payment in cash or certified bank or cashier's check;
b. A
full
recourse promissory note executed by the Optionee, made payable to the Company
bearing interest at such rate as the Board shall determine, but in no case
less
than the “Applicable Federal Rate” at the time the note is executed applicable
under the Code to obligations of the same duration. The note shall contain
such
terms and conditions as may be determined by the Board; provided, however,
that
the full principal amount of the note and all unpaid interest accrued thereon
shall be due not later than five years from the date of exercise. The Company
may obtain from the Optionee a security interest in all shares of Stock issued
to the Optionee under the Plan for the purpose of securing payment under the
note and shall retain possession of the stock certificates representing such
shares in order to perfect its security interest;
c. Full
payment in shares of Stock or other securities of the Company having a fair
market value on the Exercise Date in the amount equal to the option exercise
price;
d. A
combination of the consideration set forth in Sections (a), (b) and (c) hereof
equal to the option exercise price; or
e. Any
other
method of payment including, but not limited to, the delivery by Optionee of
an
irrevocable direction to a securities broker approved by the Company to sell
the
Stock and to deliver all or part of the sales proceeds to the Company in payment
of all or part of the exercise price and any withholding taxes.
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5. Restrictions
on Exercise and Delivery.
The
exercise of each Option shall be subject to the condition that, if at any time
the Board shall determine, in its sole and absolute discretion,
a. the
satisfaction of any withholding tax or other withholding liabilities, is
necessary or desirable as a condition of, or in connection with, such exercise
or the delivery or purchase of Stock pursuant thereto,
b. the
listing, registration, or qualification of any shares deliverable upon such
exercise is desirable or necessary, under any state or federal law, as a
condition of, or in connection with, such exercise or the delivery or purchase
of shares pursuant thereto, or
c. the
consent or approval of any regulatory body is necessary or desirable as a
condition of, or in connection with, such exercise or the delivery or purchase
of shares pursuant thereto,
then
in
any such event, such exercise shall not be effective unless such withholding,
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Board.
Optionee shall execute such documents and take such other actions as are
required by the Board to enable it to effect or obtain such withholding,
listing, registration, qualification, consent or approval. Neither the Company
nor any officer or member of the Board or the Committee, shall have any
liability with respect to the non-issuance or failure to sell shares as the
result of any suspensions of exercisability imposed pursuant to this
Section.
6. Nonassignability.
Options
may not be sold, pledged, assigned or transferred in any manner other than
by
will or by the laws of intestate succession, and may be exercised during the
lifetime of Optionee only by Optionee. Any transfer by Optionee of any Option
granted under the Plan or this Agreement shall void such Option and the Company
shall have no further obligation with respect to such Option. No Option shall
be
pledged or hypothecated in any way, nor shall any Option be subject to
execution, attachment or similar process.
7. Restrictive
Legends.
Each
certificate evidencing the shares acquired upon exercise of an Option hereunder,
including any certificate issued to any transferee thereof, shall be imprinted
with legends substantially in the form set forth in the Plan.
8. Rights
as Shareholder.
Neither
Optionee nor his executor, administrator, heirs or legatees, shall be, or have
any rights or privileges of a shareholder of the Company in respect of the
Stock
unless and until certificates representing such Stock shall have been issued
in
Optionee’s name.
9. No
Right of Employment.
Neither
the grant nor exercise of any Option nor anything in the Plan or this Agreement
shall impose upon the Company or any other corporation any obligation to employ
or continue to employ any Optionee. The right of the Company and any other
corporation to terminate any employee shall not be diminished or affected
because an Option has been granted to such employee.
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10. Definitions.
Capitalized terms shall have the meaning set forth in the Plan unless otherwise
defined herein.
11. Notices.
Any
notice to be given under the terms of this Agreement shall be addressed to
the
Company in care of its Secretary at its principal office, and any notice to
be
given to Optionee shall be addressed to such Optionee at the address maintained
by the Company for such person or at such other address as the Optionee may
specify in writing to the Company.
12. Binding
Effect.
This
Agreement shall be binding upon and inure to the benefit of Optionee, his heirs
and successors, and of the Company, its successors and assigns.
13. Governing
Law.
This
Agreement shall be governed by the laws of the State of Delaware.
14. Application
of Plan.
The
Company has delivered and the Optionee hereby acknowledges receipt of a copy
of
the Plan. The parties agree and acknowledge that the Option granted hereunder
is
granted pursuant to the Plan and subject to the terms and provisions thereof,
and the rights of the Optionee are subject to modifications and termination
in
certain events as provided in the Plan.
IN
WITNESS WHEREOF, this Agreement is effective as of, and the date of grant shall
be ___________________________.
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LIXTE
BIOTECHNOLOGY HOLDINGS, INC
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By:
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Title:_____________________________________
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OPTIONEE
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