Exhibit 10.2
STOCK OPTION GRANT PROGRAM
FOR
NONEMPLOYEE DIRECTORS UNDER THE
LIGHT SCIENCES ONCOLOGY, INC. 2005 EQUITY INCENTIVE
PLAN
The following provisions set forth the terms of the stock option grant
program (the "Program") for nonemployee directors of Light Sciences Oncology,
Inc. (the "Company") under the Company's 2005 Equity Incentive Plan (the
"Plan"). The following terms are intended to supplement, not alter or change,
the provisions of the Plan, and in the event of any inconsistency between the
terms contained herein and in the Plan, the Plan shall govern. All capitalized
terms that are not defined herein shall be as defined in the Plan.
1. ELIGIBILITY
Each director of the Company elected or appointed to the Board who is not
otherwise an employee of the Company or any Related Company (an "Eligible
Director") shall be eligible to receive New Grants and Annual Grants under the
Program, as discussed below.
2. NEW GRANTS
Each Eligible Director shall automatically receive a Nonqualified Stock
Option to purchase 30,000 shares of Common Stock ("New Grant") as of the date of
such Eligible Director's initial election or appointment to the Board. New
Grants shall be fully vested and exercisable as of the date of such Eligible
Director's initial election or appointment to the Board.
3. ANNUAL GRANTS
Beginning with the first annual meeting of shareholders after effectiveness
of the Company's initial public offering, each Eligible Director shall
automatically receive a Nonqualified Stock Option to purchase 15,000 shares of
Common Stock immediately following each year's annual meeting of shareholders
(each, an "Annual Grant"); provided that any Eligible Director who received a
New Grant within five months prior to an annual meeting of shareholders shall
not receive an Annual Grant until the next year's annual meeting. Annual Grants
shall be fully vested and exercisable upon grant.
4. OPTION EXERCISE PRICE
The exercise price of an Option shall be the Fair Market Value of the
Common Stock on the Grant Date.
5. MANNER OF OPTION EXERCISE
An Option shall be exercised by giving the required notice to the Company
or a brokerage firm designated or approved by the Company, stating the number of
shares of Common Stock with respect to which the Option is being exercised,
accompanied by payment in full for such Common Stock, which payment may be, to
the extent permitted by applicable laws and regulations, in whole or in part (a)
in cash or check, (b) in shares of Common Stock owned by the Eligible Director
having a fair market value equal to the aggregate Option exercise price, or (c)
if and so long as the Common Stock is registered under the Exchange Act, by
delivery of a properly executed exercise notice, together with irrevocable
instructions to a broker, to promptly deliver to the Company the amount of
proceeds to pay the exercise price, all in accordance with the regulations of
the Federal Reserve Board.
6. TERM OF OPTIONS
Each Option shall expire upon the earlier of ten years from the Grant Date
or five years after an Eligible Director's Termination of Service.
In the event of the death of an Eligible Director, the Option may be
exercised until the earlier of five years from the date of the Eligible
Director's Termination of Service or ten years from the Grant Date by the
personal representative of the Eligible Director's estate, the person(s) to whom
the Eligible Director's rights under the Option have passed by will or the
applicable laws of descent and distribution or the beneficiary(ies) designated
pursuant to Section 13 of the Plan, as applicable.
7. TRANSFERABILITY
During an Eligible Director's lifetime, an Option may be exercised only by
the Eligible Director or a permitted assignee or transferee of the Eligible
Director (as provided below). No Options granted under the Program may be sold,
assigned, pledged or transferred by the Eligible Director or made subject to
attachment or similar proceedings other than by (a) will or the applicable laws
of descent and distribution, (b) gift or other transfer to either (i) a spouse
or other immediate family member or (ii) any trust, partnership or other entity
in which the Eligible Director or such Eligible Director's spouse or other
immediate family member has a substantial beneficial interest; or (c) the
designation by an Eligible Director in writing during the
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Eligible Director's lifetime of a beneficiary to receive and exercise Options in
the event of the Eligible Director's death (as provided in Section 13 of the
Plan); provided, however, that any Option so assigned or transferred shall be
subject to the terms and conditions of the Plan and the instrument evidencing
the Option. Any attempt to transfer, assign, pledge, hypothecate or otherwise
dispose of any Option under the Plan or of any right or privilege conferred
thereby, contrary to the provisions of the Plan, or the sale or levy or any
attachment or similar process upon the rights and privileges conferred hereby,
shall be null and void.
8. AMENDMENT
The Board may amend the provisions contained herein in such respects as it
deems advisable. Any such amendment shall not, without the consent of the
Eligible Director, impair or diminish any rights of an Eligible Director under
an outstanding Option.
9. EFFECTIVE DATE
The Program shall become effective on the date of effectiveness of the
initial registration of the Company's Common Stock under Section 12(b) or 12(g)
of the Exchange Act.
Provisions of the Plan (including any amendments) that are not discussed
above, to the extent applicable to Eligible Directors, shall continue to govern
the terms and conditions of Options granted to Eligible Directors.
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