Published on November 14, 2007
STOCK
OPTION AGREEMENT
THIS
STOCK OPTION AGREEMENT (“Agreement”) is made by and between LIXTE BIOTECHNOLOGY
HOLDINGS, INC, a Delaware corporation (the “Company”), and STEPHEN
K. CARTER
(the
“Optionee”).
WHEREAS,
Optionee has been elected a director of the Company.
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 200,000 shares of its
common stock (“Stock”) at $0.33 1/3 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 50% of the total number of shares subject to
the
Option on the first anniversary of the date of execution of this Agreement.
Thereafter, the remaining shares subject to the Option shall vest in the
Optionee and may be exercised by the Optionee on the second anniversary of
the
date hereof. Any exercise may be with respect to any part or all of the shares
then vested and exercisable pursuant to such Option.
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. Five
years from the date of the vesting of a particular tranche
hereunder;
b. the
date
the Optionee is no longer a member of the Board of Directors of the Company.
Any
vested Option granted hereunder to such Optionee to expire three months after
the date of such termination. In the event the Optionee’s termination results
from the fact that the Optionee is “disabled,” any vested 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 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.
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 ten 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.
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.
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 September 12, 2007.
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LIXTE
BIOTECHNOLOGY HOLDINGS, INC
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By:________________________________
Name: John
S. Kovach
Title: President
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OPTIONEE
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____________________________________
Stephen
K. Carter
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