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Exhibit 4.3
NORTHWEST NEUROLOGIC, INC.
RESTATED 1997 STOCK INCENTIVE PLAN
(INCLUDES AMENDMENTS ADOPTED THROUGH MARCH 7, 1998)
ARTICLE 1
PURPOSE
The purpose of the Plan is to provide a means by which selected
Employees, Directors and Consultants may be given an opportunity to acquire
shares of the Company. By means of the Plan, the Company seeks to retain the
services of persons who are currently Employees, Directors or Consultants, to
secure and retain the services of new Employees, Directors and Consultants, and
to provide incentives for such persons to exert maximum efforts for the success
of the Company. Accordingly, the Plan provides for granting Incentive Stock
Options, Nonqualified Stock Options and Stock Bonuses and provides for Sales of
Stock, or any combination of the foregoing, as is best suited to the
circumstances of the particular person under consideration.
ARTICLE 2
DEFINITIONS
The following definitions shall be applicable throughout the Plan unless
specifically modified herein:
(a) "1934 Act" means the Securities Exchange Act of 1934, as
amended and in effect from time to time, or any successor statute.
(b) "Award" means, individually or collectively, any Option,
Stock Bonus or Sale of Stock.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended
and in effect from time to time, or any successor statute. Reference in the Plan
to any section of the Code shall be deemed to include any amendments or
successor provisions to any such section.
(e) "Committee" means a committee of the Board that is selected
as provided in Section 4.1(b) to administer the Plan.
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(f) "Common Stock" means the Common Stock, $.10 par value, of
the Company.
(g) "Company" means the Common Stock, $.10 par value, of the
Company.
(h) "Consultant" means any person, including an adviser, engaged
by the Company or a Subsidiary to render services and who does not render such
services as an Employee or Director.
(i) "Director" means an individual who is serving on the Board
on the date the Plan is adopted by the Board or is elected to the Board after
such date.
(j) "Disability" means the condition of being permanently
"disabled" within the meaning of Section 22(e)(3) of the Code; namely, being
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment, which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than 12 months.
(k) "Employee" means any person (including a person who also
serves as a Director) in an employment relationship with the Company or a
Subsidiary.
(l) "Fair Market Value" shall be determined, as of any specified
date, as follows:
i. At any time the Common Stock is not listed on a
securities exchange, traded in the over-the-counter market or quoted as to price
on an automated securities quotation system when a determination of the Fair
Market Value of the Common Stock is required to be made hereunder, the Board
shall determine the Fair Market Value in such manner as it deems appropriate;
ii. If the Common Stock is traded in the over-the-counter
market at the time a determination of its Fair Market Value is required to be
made hereunder, Fair Market Value shall be deemed to be equal to the average of
the reported closing bid and asked prices of the Common Stock on the business
day preceding the date of such determination, or if such prices are not reported
on that date, on the last preceding date on which such prices for the Common
Stock are so reported; and
iii. If the Common Stock becomes listed on a stock exchange,
the Board may, by resolution, revise the foregoing definition of Fair Market
Value by reference to trading prices of the Common Stock as reported for such
stock exchange.
(m) "Holder" means an Employee, a Director or a Consultant who
has been granted an Award, and any assignee or transferee of such person as
permitted under the Plan. For purposes of Section 7.8, if an Option has been
transferred as Permitted under the Plan, "Holder" shall refer to the Employee,
Consultant or Director who was granted the Award and shall not refer to that
person' s assignee or transferor.
(n) "Incentive Stock Option" or "ISO" means an "incentive stock
option" within the meaning of Section 422 of the Code.
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(o) "Nonemployee Director" means a Nonemployee Director as
defined in Rule 16b-3(b)(3)(i) of the 1934 Act.
(p) "Nonqualified Stock Option" or "NQO" means a stock option
other than an ISO.
(q) "Option" means an Award granted Pursuant to Article 6 and
described in Article 7 of the Plan. "Option" includes both ISOs and NQOs.
(r) "Optionee" means the recipient of an Option.
(s) "Option Agreement" means a written agreement between the
Company and a Holder with respect to an Option.
(t) "Plan" means the Northwest NeuroLogic, Inc. 1997 Stock
Incentive Plan, as set forth herein and as it may be hereafter amended from time
to time.
(u) "Rule 16b-3" means Rule l6b-3 promulgated under the 1934
Act, as such rule may be amended from time to time, and any successor rule,
regulation or statute fulfilling the same or similar function.
(v) "Sale of Stock" means any sale of Common Stock as provided
in Article 9.
(w) "Stock Bonus" means an Award granted pursuant to Article 6
and described in Article 8 of the Plan.
(x) "Stock Bonus Agreement" means a written agreement between
the Company and a Holder with respect to a Stock Bonus.
(y) "Stock Sale Agreement" means a written agreement between the
Company and a Holder with respect to a Sale of Stock.
(z) "Subsidiary" means a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 424(f) of the Code; namely, any
corporation in which the Company directly or indirectly controls 50 percent or
more of the total combined voting power of all classes of stock having voting
power.
ARTICLE 3
EFFECTIVE DATE AND DURATION
OF THE PLAN
The Plan shall be effective as of May 6, 1997, the date of its adoption
by the Board, provided the Plan is approved by the shareholders of the Company
within 12 months thereafter. Until the Plan has been approved by shareholders,
any Awards made under the Plan shall be conditioned upon such approval. No
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Awards may be granted under the Plan after May 5, 2007. The Plan shall remain in
effect until all Awards granted under the Plan have been satisfied or expired.
ARTICLE 4
ADMINISTRATION
4.1 Administration of Plan.
(a) Board. Unless a Committee is appointed pursuant to Section
4.1(b), the Plan shall be administered by the Board.
(b) Committee. The Board, if it so determines, may delegate to a
Committee of the Board consisting of two or more Directors any or all authority
for administration of the Plan; provided, however, that only the Board may amend
or terminate the Plan as provided in Article 11. If a Committee is appointed,
all references in the Plan to the Board shall mean and relate to such Committee,
except as limited by the immediately preceding sentence and unless the context
requires otherwise. Any Committee appointed by the Board to administer the Plan
at a time when the Common Stock is registered under the 1934 Act shall consist
solely of two or more Nonemployee Directors. The Board may from time to time
remove members from, or add members to, the Committee. Vacancies on the
Committee, however caused, shall be filled by the Board.
4.2 Authority of the Board. Subject to the provisions of the Plan, the
Board shall have sole authority, in its discretion to determine: (i) which
Employees, Directors and Consultants shall receive Awards; (ii) the time or
times when Awards shall be granted; (iii) the type or types of Awards to be
granted; and (iv) the number of shares of Common Stock that may be issued under
each Award. In making such determinations, the Board may take into account the
nature of the services rendered by the respective individuals, their present and
potential contribution to the success of the Company, and such other factors as
the Board in its discretion shall deem relevant. The Board shall also have such
additional powers as are delegated to it by the Plan. Subject to the express
provisions of the Plan, the Board is authorized to: (i) construe the Plan and
the respective agreements executed thereunder; (ii) prescribe such rules and
regulations relating to the Plan as it may deem advisable to carry out the Plan;
(iii) determine the terms, restrictions and provisions of each Award, including
such terms, restrictions and provisions as shall be requisite in the judgment of
the Board to cause designated Options to qualify as ISOs; (iv) advance the lapse
of any waiting period, accelerate any exercise date, waive or modify any
restriction applicable to an Award; and (v) make all other determinations in the
judgment of the Board necessary or advisable for administering the Plan. The
Board may correct any defect or supply any omission or reconcile any
inconsistency in any agreement relating to an Award in the manner and to the
extent it shall deem expedient to carry it into effect. The determinations of
the Board on the matters referred to in this Article 4 shall be final and
conclusive.
4.3 Liability of Board Members. No member of the Board shall be liable
for any action or determination made in good faith with respect to the Plan or
any Award.
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4.4 Costs of Plan. The costs and expenses of administering the Plan
shall be borne by the Company.
ARTICLE 5
ELIGIBILITY
Employees, Directors and Consultants are eligible to receive Options,
Stock Bonuses and Sales of Stock; provided, however, only Employees are eligible
to receive ISOs. Any Award may be granted on more than one occasion to the same
person, and may include an ISO, an NQO, a Stock Bonus, a Sale of Stock, or any
combination thereof.
ARTICLE 6
GRANT OF AWARDS; SHARES SUBJECT TO THE PLAN
The Board may from time to time grant Options and Stock Bonuses and
offer Common Stock for sale under the Plan. Subject to Article 10, the aggregate
number of shares of Common Stock that may be issued under the Plan shall not
exceed 158,750 shares; provided, however, that 46,250 of such shares may be
granted only pursuant to NQOs and not ISOs. Shares shall be deemed to have been
issued under the Plan only to the extent actually issued and delivered pursuant
to an Award. To the extent that an Award is cancelled, expires, is settled in
cash in lieu of Common Stock or is exchanged for other Awards, the shares of
Common Stock subject to such Award shall again be available for the grant of
Awards under the Plan.
ARTICLE 7
OPTIONS
7.1 Option Period. The term of each Option granted pursuant to Article 6
shall be as specified by the Board at the date of grant, except that no ISO
shall be exercisable after the expiration of 10 years from the date of grant.
7.2 Limitations on Exercise of Option. An Option shall be exercisable in
whole or in such installments and at such times as determined by the Board.
7.3 Special Limitation on ISOs. To the extent that the aggregate Fair
Market Value (determined at the time the respective ISO is granted) of Common
Stock with respect to which ISOs are exercisable for the first time by an
individual during any calendar year under all incentive stock option plans of
the Company exceeds $100,000, such ISOs shall be treated as not constitute ISOs
because of such limitation and shall notify the Holder of such determination as
soon as practicable after such determination.
7.4 ISOs Granted to Certain Shareholders. No ISO shall be granted to a
person if, at the time the ISO is granted, the person possesses more than 10
percent of the total combined voting power of all classes of stock of the
Company, unless (i) at the time such ISO is granted the exercise price is at
least 110 percent
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of the Fair Market Value of the Common Stock subject to the Option and (ii) such
ISO by its terms is not exercisable after the expiration of five years from the
date of grant.
7.5 Separate Stock Certificates. Separate stock certificates shall be
issued by the Company for those shares acquired pursuant to the exercise of an
ISO and for those shares acquired pursuant to the exercise of a NQO.
7.6 Option Agreement. Each Option shall be evidenced by an Option
Agreement in such form and containing such provisions not inconsistent with the
provisions of the Plan as the Board from time to time shall approve, including,
without limitation, provisions to qualify an ISO under Section 422 of the Code.
An Option Agreement may provide for the payment of the exercise price, in whole
or in part, by the delivery of a number of shares of Common Stock (plus cash if
necessary) having a Fair Market Value (as of the exercise date of the Option)
equal to such exercise price. Moreover, an Option Agreement may provide for a
"cashless exercise" of the Option by establishing procedures, which would take
effect only after the Common Stock is registered under the 1934 Act, whereby the
Holder, by a properly executed written notice, would direct: (i) an immediate
market sale of all or a part of the shares of Common Stock to which the Holder
is entitled upon exercise of the Option; (ii) the Company's delivery of the
shares of Common Stock directly to a brokerage firm; and (iii) the brokerage
firm's delivery to the Company of the exercise price and any withholding taxes
attributable to the issuance from the proceeds of the sale of the Common Stock.
Such Option Agreement may also include, without limitation, provisions relating
to: (i) vesting of Options; (ii) tax matters (including provisions covering any
applicable employee wage withholding requirements); and (iii) any other matters
not inconsistent with the terms and provisions of the Plan that the Board shall
in its sole discretion determine. The terms and conditions of the respective
Option Agreements need not be identical.
7.7 Exercise Price and Payment. Subject to Section 7.4, the price at
which a share of Common Stock may be purchased upon exercise of an Option shall
be determined by the Board, but such exercise price: (i) shall not be less than
the Fair Market Value of a share of Common Stock on the date such Option is
granted if the Option is an ISO; and (ii) shall be subject to adjustment as
provided in Article 10. An Option or portion thereof may be exercised by
delivery of an irrevocable notice of exercise to the Company. The exercise price
of an Option or portion thereof shall be paid in full in the manner prescribed
by the Board.
7.8 Termination of Employment or Service.
(a) In the event the employment or service of a Holder of an
Option with the Company terminates for any reason other than because of
Disability or death, such Option may be exercised at any time prior to the
expiration date of the Option or the expiration of three months after the date
of such termination, whichever is the shorter period, but only if and to the
extent the Holder was entitled to exercise the Option at the date of such
termination.
(b) In the event the employment or service of a Holder of an
Option with the Company terminates because of Disability, such Option may be
exercised at any time prior to the expiration date of the Option or the
expiration of one year after the date of such termination, whichever is the
shorter period, but only if and to the extent the Holder was entitled to
exercise the Option at the date of such termination.
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(c) In the event of the death of a Holder of an Option while
employed by or providing service to the Company, such Option may be exercised at
any time prior to the expiration date of the Option or the expiration of one
year after the date of such death, whichever is the shorter period, but only if
and to the extent the Holder was entitled to exercise the Option on the date of
death. An ISO may be exercised only by the person or persons to whom such
Holder's rights under the ISO shall pass by the Holder's will or by the laws of
descent and distribution of the state or country of domicile at the time of
death.
(d) The Board, at the time of grant or at any time thereafter,
may extend the three-month and one-year expiration periods any length of time
not later than the original expiration date of the Option, and may increase the
portion of the Option that is exercisable, subject to such terms and conditions
as the Board may determine.
(e) To the extent that the Option of any deceased Holder or of
any Holder whose employment or service terminates is not exercised within the
applicable period specified above, all further rights to purchase Common Stock
pursuant to such Option shall cease and terminate.
(f) If an Optionee's employment or consulting relationship with
the Company is terminated contemporaneously with the start of an employment or
consulting relationship with the Company's parent corporation, that optionee's
option shall not terminate, and vesting shall continue as if the optionee were
continuing to be employed by or consulting for the Company.
7.9 Rights As a Shareholder. The Holder of an Option under the Plan
shall have no rights as a shareholder with respect to the Common Stock subject
to such Option until the date of issue to the Holder of a stock certificate for
such shares. Except as otherwise expressly provided in the Plan, no adjustment
shall be made for dividends or other rights for which the record date occurs
prior to the date such stock certificate is issued.
7.10 Options in Substitution for Stock Options Granted by Other
Corporations. Options may be granted under the Plan from time to time in
substitution for stock options held by individuals employed by or serving as
directors or consultants of corporations who become Employees, Directors or
Consultants as a result of a merger or consolidation of the employing
corporation with the Company, or the acquisition by the Company of the assets of
the employing . . .
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ARTICLE 8
STOCK BONUSES
8.1 Terms and Conditions. The Board may award Common Stock under the
Plan as Stock Bonuses. The Board may not require the recipient to pay any
monetary consideration for a Stock Bonus other than amounts necessary to satisfy
any applicable federal, state or local tax withholding requirements.
8.2 Stock Bonus Agreement. Shares awarded as a Stock Bonus shall be
subject to such terms, conditions and restrictions as shall be determined by the
Board. At the time any Stock Bonus is granted under this Article 8, the Company
and the Holder shall enter into a Stock Bonus Agreement setting forth any terms,
conditions and restrictions applicable to the Stock Bonus. The terms and
provisions of the respective Stock Bonus Agreements need not be identical.
ARTICLE 9
SALES OF STOCK
9.1 Sales of Stock. The Board may offer and sell shares of Common Stock
under the Plan for such consideration (including promissory notes and services)
as determined by the Board.
9.2 Stock Sale Agreement. Shares sold under this Article 9 shall be
subject to such terms, conditions and restrictions as shall be determined by the
Board. At the time any Award is granted under this Article 9, the Company and
the Holder shall enter into a Stock Sale Agreement setting forth any terms,
conditions and restrictions applicable to the Sale of Stock. The terms and
provisions of the respective Stock Sale Agreements need not be identical.
ARTICLE 10
CHANGES IN CAPITAL STRUCTURE
10.1 Adjustments by Board. If the outstanding Common Stock is hereafter
increased or decreased or changed into or exchanged for a different number or
kind of shares or other securities of the Company or of another corporation by
reason of any reorganization, merger, consolidation, plan of exchange,
recapitalization, reclassification, stock split-up, combination of shares,
dividend payable in shares, or similar event, appropriate adjustment shall be
made by the Board in the number and kind of shares available for Awards. In
addition, the Board shall make appropriate adjustment in the number and kind of
shares as to which outstanding Options, or portions thereof then unexercised,
shall be exercisable, the exercise price of such outstanding Options and all
other matters deemed appropriate by the Board, so that the Holder's
proportionate interest before and after the occurrence of the event is
maintained. Notwithstanding the foregoing, the Board shall have no obligation to
effect any adjustment that would or might result in the issuance of fractional
shares, and any fractional shares resulting from any adjustment may be
disregarded or provided for in any manner determined by the Board. Any such
adjustment made by the Board shall be conclusive. Any adjustment provided for in
this Section 10.1 shall be subject to any required shareholder
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action. In the event of the dissolution of the Company or a merger,
consolidation, plan of exchange or similar transaction affecting the Company, in
lieu of providing for Options as provided above in this Section 10.1 or in lieu
of having the Options continue unchanged, the Board may, in its sole discretion,
provide a 30-day period prior to such event during which Holders shall have the
right to exercise Options in whole or in part without any limitation on
exercisability and, upon the expiration of such 30-day period, all unexercised
Options shall immediately terminate.
10.2 No Restriction on Corporate Acts. The existence of the Plan and the
Awards granted hereunder shall not affect in any way the right or power of the
Board or the shareholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's capital
structure or its business, any merger or consolidation of the Company, any issue
of debt or equity securities senior to or affecting Common Stock or the rights
thereof, the dissolution or liquidation of the Company, or any sale, lease,
exchange or other disposition of all or any part of its assets or business, or
any other corporate act or proceeding. No Employee, Director, Consultant,
beneficiary or other person shall have any claim against the Company as a result
of any such action.
10.3 No Adjustment for Issuances of Other Securities by Company. Except
as herein expressly provided, the issuance by the Company of shares of stock of
any class or securities convertible into shares of stock of any class, for cash,
property, labor or services, upon direct sale, upon the exercise of rights or
warrants to subscribe therefor, or upon conversion of shares or obligations of
the Company convertible into such shares or other securities, and in any case
whether or not for fair value, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number of shares of Common Stock
subject to Awards theretofore granted or the exercise price per share, if
applicable.
ARTICLE 11
AMENDMENT AND TERMINATION OF THE PLAN
The Board in its discretion may terminate the Plan at any time with
respect to any shares for which Awards have not then been granted. The Board
shall have the right to alter or amend the Plan or any part thereof from time to
time; provided, that, except as provided in Article 10, no change in any Award
may be made which would impair the rights of a Holder without the consent of the
Holder.
ARTICLE 12
MISCELLANEOUS
12.1 No Right To An Award. Neither the adoption of the Plan by the
Company nor any action of the Board shall be deemed to give an Employee, a
Director or a Consultant any right to be granted an Award or any of the rights
hereunder except as may be evidenced by an Award or by an Option Agreement,
Stock Bonus Agreement or Stock Sale Agreement duly executed on behalf of the
Company, and then only to the extent and on the terms and conditions expressly
set forth therein.
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12.2 No Employment Rights Conferred. Nothing in the Plan shall: (i)
confer upon any Employee, Director or Consultant any right with respect to
continuation of employment (or service) with the Company; or (ii) interfere in
any way with the right of the Company to terminate the Employees employment (or
service as a Director, in accordance with applicable corporate law, or service
as a Consultant) at any time for any reason, with or without cause.
12.3 Securities Law Restrictions. No Common Stock shall be issued under
the Plan unless counsel for the Company is satisfied that such issuance shall be
in compliance with applicable federal and state securities laws. Certificates
for shares delivered under the Plan may be subject to such stop-transfer orders
and other restrictions as the Board may deem advisable under the rules and
regulations of any applicable federal and state securities laws. The Board may
cause a legend or legends to be placed on any such certificates making
appropriate reference to such restrictions.
12.4 Withholding. The Company shall have the right to deduct in
connection with all Awards any taxes required by law to be withheld and to
require any payments required to enable it to satisfy its withholding
obligations. With the consent of the Board, the recipient of an Award may
deliver shares of Common Stock to the Company to satisfy any withholding
obligation.
12.5 Restriction on Transfer.
(a) Restriction on Transfer. An Award shall not be transferable
otherwise than by will or the laws of descent and distribution; provided,
however, that, with the consent of the Board, which consent may be withheld in
its sole discretion or conditioned on such requirements as the Board shall deem
appropriate, all or any portion of a NQO may be assigned or transferred to the
optionee's immediate family (i.e., children, grandchildren, spouse, parents and
siblings), to trusts for the benefit of the optionee's immediate family members,
and pursuant to qualified domestic relations orders. No consideration may be
paid for the transfer of any NQO, and, after any permitted transfer, the NQO
shall continue to be subject to the same terms and conditions as were applicable
to it immediately prior to its transfer, except that: (i) subsequent transfers
of transferred options shall be prohibited except by will or the laws of descent
and distribution; (ii) for purposes of Section 7.8, the term "Holder" shall
refer to the original Optionee; (iii) the events of termination of employment
specified in Section 7.8 shall continue to be applied with respect to the
original Optionee, following which the NQO shall be exercisable by the
transferee only to the extent, and for the periods, specified in Section 7.8;
and (iv) the original Optionee shall remain subject to withholding taxes upon
exercise of the NQO by the transferee. Before permitting any transfer, the Board
may require the transferee to agree in writing to be bound by all other terms
and conditions applicable to the NQO prior to its transfer.
(b) Exercise of ISOs. ISOs may be exercisable during the
lifetime of the Optionee only by the Optionee, or by the Optionee's guardian or
legal representative.
12.6 Governing Law. To the extent that federal laws (such as the Code
and the federal securities laws) do not otherwise control, the Plan shall be
construed in accordance with Oregon law, without giving effect to the principles
of conflicts of laws thereof.
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12.7 Headings. Headings contained in the Plan are for reference purposes
and shall not affect the meaning or interpretation of the Plan.
Adopted by the Board of Directors: May 6, 1997.
Approved by the Shareholders: October 23, 1997.
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NORTHWEST NEUROLOGIC, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
EFFECTIVE DATE:
BETWEEN: Northwest NeuroLogic, Inc., an Oregon corporation (the "Company")
AND: (the "Optionee")
---------------------------------------------
Street Address City State Zip Code
Number of Option Shares: -----------------
Option Price per Share: $
----------------
Vesting Schedule: Percentage of
Shares Vested Date of Vesting
The Company has adopted a 1997 Stock Incentive Plan (the "Plan")
that provides for the grant of nonqualified options to purchase shares of the
Company's Common Stock, no par value (the "Stock"). The Optionee is now employed
by the Company or a Subsidiary (as defined in the Plan), and the Company desires
to afford the Optionee the opportunity to obtain stock ownership in the Company
so that the Optionee may have a proprietary interest in the Company's success.
The Company's Board of Directors (the "Board") has granted to the Optionee an
option to purchase shares of Stock, upon and subject to the terms and conditions
of the Plan and of this Agreement.
NOW, THEREFORE, the parties agree as follows:
1. Grant; Terms of Option. Subject to the terms and conditions of this
Agreement and the Plan, the Company grants to the Optionee the right and option
(the "Option") to purchase any part of an aggregate number of shares of the
Company's authorized but unissued Stock stated in the caption of this Agreement
at the price per share stated in the caption of this Agreement, this price being
____ percent of the fair market value of the Stock as determined pursuant to the
Plan on the date of the grant of the Option. It is the intent of the Board that
the Option is a nonqualified stock option and
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is not an "incentive stock option," as defined in Section 422 of the Internal
Revenue Code of 1986, as amended. The Option is granted upon the following terms
and conditions:
(a) Term of Option. Subject to reductions in the Option term
provided in subparagraphs (c) and (e) below, the Option shall continue in effect
through the ___________ anniversary of the date of this Agreement.
(b) Timing of Right to Exercise. Except as provided in
subparagraph 1(c) hereof, the Option may be exercised from time to time over the
term of the Option in the amounts specified in the vesting schedule set forth in
the caption of this Agreement. If the Optionee does not purchase in any one year
the full number of shares that the Optionee is then entitled to purchase, the
Optionee's rights shall be cumulative, and, subject to the other provisions of
this Agreement, the Optionee may purchase those shares thereafter during the
term of the Option.
(c) Termination of Employment. Except as provided in this
subparagraph (c), the Option shall not be exercised unless at the time of such
exercise the Optionee is in the employ of the Company or a Subsidiary and shall
have so served continuously since the effective date of this Agreement. If the
employment of the Optionee with the Company or Subsidiary terminates by reason
of the Optionee's death or disability, the Option may be exercised by the
Optionee at any time prior to the expiration date of the Option or the
expiration of one year after the date of such termination, whichever is the
shorter period, but only if and to the extent the Optionee was entitled to
exercise the Option at the date of such termination. If the employment of the
Optionee by the Company or Subsidiary terminates for any other reason, the
Option may be exercised by the Optionee at any time prior to the expiration date
of the Option or the expiration of three months after the date of such
termination, whichever is the shorter period, but only if and to the extent the
Optionee was entitled to exercise the Option at the date of such termination. In
such event, to the extent that the Option is not exercised within the applicable
period, all further rights to purchase shares pursuant to the Option shall cease
and terminate at the expiration of such period.
(d) Manner of Exercise. Shares may be purchased pursuant to the
Option only upon receipt by the Company of written notice from the Optionee of
the Optionee's desire to purchase, specifying the number of shares the Optionee
desires to purchase and the date on which the Optionee desires to complete the
purchase. The Option may not be exercised for a fraction of a share. If required
to comply with any applicable federal or state securities laws, the notice also
shall contain a representation that it is the Optionee's intention to acquire
the shares for investment and not for resale. On the date specified for
completion of the purchase of the shares, the Optionee shall pay the Company the
full purchase price of the shares in cash or by such other method of payment as
shall be approved by the Board. No shares shall be issued until full payment has
been made, and the Optionee shall have none of the rights of a shareholder until
shares are issued. Upon notification of the amount due and prior to or
concurrently with delivery of the certificate representing the shares, the
Optionee shall pay to the Company any amounts necessary to satisfy applicable
federal, state and local withholding tax requirements.
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(e) Changes in Capital Structure. Except as provided in the
final sentence of this subparagraph (e), if the outstanding Stock is increased
or decreased or changed into or exchanged for a different number or kind of
shares or other securities of the Company or of another corporation by reason of
any reorganization, merger, consolidation, plan of exchange, recapitalization,
reclassification, stock split-up, combination of shares, dividend payable in
shares, or similar event, the Board shall make appropriate adjustment in the
number and kind of shares as to which the Option, or portion thereof then
unexercised, shall be exercisable, the exercise price of the Option and all
other matters deemed appropriate by the Board, so that the Optionee's
proportionate interest shall be maintained as before the occurrence of such
event. Any such adjustment made by the Board shall be conclusive. In the event
of the dissolution of the Company or a merger, consolidation, plan of exchange
or similar transaction affecting the Company, in lieu of adjusting the Option as
described above or in lieu of having the Option continue unchanged, the Board
may, in its sole discretion, provide a 30-day period immediately prior to such
event during which the Optionee shall have the right to exercise the Option in
whole or in part without any limitation on exercisability and upon the
expiration of such 30-day period any unexercised portion of the Option shall
immediately terminate.
2. Conditions. The obligations of the Company under this Agreement shall
be subject to the approval of such state or federal authorities or agencies as
may have jurisdiction in the matter. The Company shall use its best efforts to
take such steps as may be required by state or federal law or applicable
regulations, including rules and regulations of the Securities and Exchange
Commission, any quotation system on which the Stock may then be traded and any
stock exchange on which the Stock may then be listed, in connection with the
issuance or sale of any shares acquired pursuant to this Agreement or the
trading or listing of such shares on any such system or exchange. The Company
shall not be obligated to issue or deliver shares under this Agreement if, upon
advice of its legal counsel, such issuance or delivery would violate state or
federal securities laws.
3. Provisions Relating to Transferability.
(a) Restrictions on Transfer. With the consent of the Board, which
consent may be withheld in its sole discretion or conditioned on such
requirements as the Board shall deem appropriate, all or any portion of the
Option may be assigned or transferred to the Optionee's immediate family (i.e.,
children, grandchildren, spouse, parents and siblings), to trusts for the
benefit of the Optionee's immediate family members, and pursuant to qualified
domestic relations orders. No consideration may be paid for any permitted
transfer of the Option and, after any permitted transfer, the Option shall
continue to be subject to the same terms and conditions as were applicable to it
immediately prior to its transfer, except that: (i) subsequent transfers of the
portion of the Option that has been transferred shall be prohibited except by
will or the laws of descent and distribution; (ii) for purposes of subparagraph
1(c), the term "Optionee" shall refer to the original Optionee and not the
transferee; (iii) the events of termination of employment specified in
subparagraph 1(c) shall continue to be applied with respect to the original
Optionee, following which the Option shall be exercisable by the transferee only
to the extent, and for the period specified in subparagraph 1(c); and (iv) the
original Optionee shall remain subject to withholding taxes upon exercise
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of the Option by the transferee. Before permitting any transfer, the Board may
require the transferee to agree in writing to be bound by all other terms and
conditions applicable to the Option prior to its transfer. Except with the
consent of the Board, the Option shall not be transferable otherwise than by
will or the laws of descent and distribution.
(b) Exercise by Legal Representative or Successor. Whenever the word
"Optionee" is used in any provision of this Agreement under circumstances when
the provision should logically be construed to apply to the Optionee's guardian,
legal representative, executor, administrator, or the person or persons to whom
the Option may be transferred by testamentary disposition or by the laws of
descent and distribution, the word "Optionee" shall be deemed to include such
person or persons.
4. Legends. Certificates representing the shares subject to this
Agreement shall bear such legends as the Board shall deem appropriate to reflect
any restrictions on transfer imposed by federal or applicable state securities
laws.
5. Continuing Relationship. Nothing in the Plan or in this Agreement
shall confer upon the Optionee any right to continue as an employee of the
Company or any Subsidiary or interfere in any way with the right of the Company
or Subsidiary to terminate the Optionee's employment at any time for any reason,
with or without cause.
6. Binding Effect. This Agreement shall be binding upon and shall inure
to the benefit of any successor of the Company, but, except as provided above,
the Option shall not be assigned or otherwise disposed of by the Optionee.
7. The Plan. The Option is subject to the terms and conditions of the
Plan. In the event of a conflict between the Plan and this Agreement, the terms
of the Plan shall control. The Optionee agrees to be bound by the rules and
regulations for the administration of the Plan, as presently prescribed or
hereafter amended, and by any amendment, construction or interpretation of the
Plan properly adopted by the Company's Board.
8. Administration of Agreement by Committee. At such time as a committee
of the Board is appointed to administer the Plan, all decisions relating to this
Agreement shall be made by such committee and all references in this Agreement
to the Board shall mean and refer to such committee.
9. Notices. Parties to this Agreement shall give all notices to the
other parties concerning this Agreement by personal delivery, by telecopier or
by registered or certified mail, return receipt requested, addressed as follows:
If to the Company: Northwest NeuroLogic, Inc.
2611 S.W. Third Avenue, Suite 200
Portland, Oregon 97201
Attention: Chief Executive Officer
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16
If to the Optionee: at the Optionee's address stated in the
caption of this Agreement.
Any party may, by written notice to the other parties, designate a new address
to which notices shall thereafter be delivered. Notice hereunder shall be deemed
effective upon the earlier of actual receipt or three days after being sent by
registered or certified mail.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the date stated above.
NORTHWEST NEUROLOGIC, INC.
By
------------------------------
Title
----------------------------
OPTIONEE
---------------------------------
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NORTHWEST NEUROLOGIC, INC.
INCENTIVE STOCK OPTION AGREEMENT
EFFECTIVE DATE:
-----------, -----
BETWEEN: Northwest NeuroLogic, Inc.,
an Oregon corporation (the "Company")
AND: ------------------- (the "Optionee")
---------------------------------------------
Street Address City State Zip Code
Number of Option Shares: ------------------
Option Price per Share: $
------------------
Vesting Schedule: Percentage of Number of Years After
Shares Vested Date of Agreement
The Company has adopted a 1997 Stock Incentive Plan (the "Plan")
that provides for the grant of options meeting the requirements of Section 422
of the Internal Revenue Code to purchase shares of the Company's Common Stock,
no par value (the "Stock"). The Optionee is now employed by the Company or a
Subsidiary (as defined in the Plan), and the Company desires to afford the
Optionee the opportunity to obtain stock ownership in the Company so that the
Optionee may have a proprietary interest in the Company's success. The Company's
Board of Directors (the "Board") has granted to the Optionee an option to
purchase shares of Stock, upon and subject to the terms and conditions of the
Plan and of this Agreement.
NOW, THEREFORE, the parties agree as follows:
1. Grant; Terms of Option. Subject to the terms and conditions of this
Agreement and the Plan, the Company grants to the Optionee the right and option
(the "Option") to purchase any part of an aggregate number of shares of the
Company's authorized but unissued Stock stated in the caption of
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this Agreement at the price per share stated in the caption of this Agreement,
this price being the fair market value of the Stock as determined pursuant to
the Plan on the date of the grant of the Option. It is the intent of the Board
that the Option qualify as an "incentive stock option" under the tax laws. The
Option is granted upon the following terms and conditions:
(a) Term of Option. Subject to reductions in the Option term provided in
subparagraphs (c) and (e) below, the Option shall continue in effect through the
tenth anniversary of the date of this Agreement.
(b) Timing of Right to Exercise. Except as provided in subparagraph (c),
the Option may be exercised from time to time over the term of the Option in the
amounts specified in the vesting schedule set forth in the caption of this
Agreement. If the Optionee does not purchase in any one year the full number of
shares that the Optionee is then entitled to purchase, the Optionee's rights
shall be cumulative, and, subject to the other provisions of this Agreement, the
Optionee may purchase those shares thereafter during the term of the Option.
(c) Termination of Employment. Except as provided in this subparagraph
(c), the Option shall not be exercised unless at the time of such exercise the
Optionee is in the employ of the Company or a Subsidiary and shall have so
served continuously since the effective date of this Agreement. If the
employment of the Optionee with the Company or Subsidiary terminates by reason
of the Optionee's death or disability, the Option may be exercised by the
Optionee at any time prior to the expiration date of the Option or the
expiration of one year after the date of such termination, whichever is the
shorter period, but only if and to the extent the Optionee was entitled to
exercise the Option at the date of such termination. If the employment of the
Optionee by the Company or Subsidiary terminates for any other reason, the
Option may be exercised by the Optionee at any time prior to the expiration date
of the Option or the expiration of three months after the date of such
termination, whichever is the shorter period, but only if and to the extent the
Optionee was entitled to exercise the Option at the date of such termination. In
such event, to the extent that the Option is not exercised within the applicable
period, all further rights to purchase shares pursuant to the Option shall cease
and terminate at the expiration of such period.
(d) Manner of Exercise. Shares may be purchased pursuant to the Option
only upon receipt by the Company of written notice from the Optionee of the
Optionee's desire to purchase, specifying the number of shares the Optionee
desires to purchase and the date on which the Optionee desires to complete the
purchase. The Option may not be exercised for a fraction of a share. If required
to comply with any applicable federal or state securities laws, the notice also
shall contain a representation that it is the Optionee's intention to acquire
the shares for investment and not for resale. On the date specified for
completion of the purchase of the shares, the Optionee shall pay the Company the
full purchase price of the shares in cash or by such other method of payment as
shall be approved by the Board. No shares shall be issued until full payment has
been made, and the Optionee shall have none of the rights of a shareholder until
shares are issued. Upon notification of the amount due and prior to or
concurrently with delivery of the certificate representing the shares, the
Optionee
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shall pay to the Company any amounts necessary to satisfy applicable federal,
state and local withholding tax requirements.
(e) Changes in Capital Structure. Except as provided in the final
sentence of this subparagraph (e), if the outstanding Stock is increased or
decreased or changed into or exchanged for a different number or kind of shares
or other securities of the Company or of another corporation by reason of any
reorganization, merger, consolidation, plan of exchange, recapitalization,
reclassification, stock split-up, combination of shares, dividend payable in
shares, or similar event, the Board shall make appropriate adjustment in the
number and kind of shares as to which the Option, or portion thereof then
unexercised, shall be exercisable, the exercise price of the Option and all
other matters deemed appropriate by the Board, so that the Optionee's
proportionate interest shall be maintained as before the occurrence of such
event. Any such adjustment made by the Board shall be conclusive. In the event
of the dissolution of the Company or a merger, consolidation, plan of exchange
or similar transaction affecting the Company, in lieu of adjusting the Option as
described above or in lieu of having the Option continue unchanged, the Board
may, in its sole discretion, provide a 30-day period immediately prior to such
event during which the Optionee shall have the right to exercise the Option in
whole or in part without any limitation on exercisability and upon the
expiration of such 30-day period any unexercised portion of the Option shall
immediately terminate.
2. Conditions. The obligations of the Company under this Agreement shall
be subject to the approval of such state or federal authorities or agencies as
may have jurisdiction in the matter. The Company shall use its best efforts to
take such steps as may be required by state or federal law or applicable
regulations, including rules and regulations of the Securities and Exchange
Commission, any quotation system on which the Stock may then be traded and any
stock exchange on which the Stock may then be listed, in connection with the
issuance or sale of any shares acquired pursuant to this Agreement or the
trading or listing of such shares on any such system or exchange. The Company
shall not be obligated to issue or deliver shares under this Agreement if, upon
advice of its legal counsel, such issuance or delivery would violate state or
federal securities laws.
3. Nontransferability.
(a) Restriction. The Option is not transferable other than by
will or the laws of descent and distribution and, during the Optionee's
lifetime, may be exercised only by the Optionee.
(b) Exercise by Legal Representative or Successor. Whenever the
word "Optionee" is used in any provision of this Agreement under circumstances
when the provision should logically be construed to apply to the Optionee's
guardian, legal representative, executor, administrator, or the person or
persons to whom the Option may be transferred by testamentary disposition or by
the laws of descent and distribution, the word "Optionee" shall be deemed to
include such person or persons.
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20
4. Legends. Certificates representing the shares subject to this
Agreement shall bear such legends as the Board shall deem appropriate to reflect
any restrictions on transfer imposed by federal or applicable state securities
laws.
5. Continuing Relationship. Nothing in the Plan or in this Agreement
shall confer upon the Optionee any right to continue as an employee of the
Company or any Subsidiary or interfere in any way with the right of the Company
or Subsidiary to terminate the Optionee's employment at any time for any reason,
with or without cause.
6. Binding Effect. This Agreement shall be binding upon and shall inure
to the benefit of any successor of the Company, but, except as provided above,
the Option shall not be assigned or otherwise disposed of by the Optionee.
7. The Plan. The Option is subject to the terms and conditions of the
Plan. In the event of a conflict between the Plan and this Agreement, the terms
of the Plan shall control. The Optionee agrees to be bound by the rules and
regulations for the administration of the Plan, as presently prescribed or
hereafter amended, and by any amendment, construction or interpretation of the
Plan properly adopted by the Company's Board.
8. Administration of Agreement by Committee. At such time as a committee
of the Board is appointed to administer the Plan, all decisions relating to this
Agreement shall be made by such committee and all references in this Agreement
to the Board shall mean and refer to such committee.
9. Notices. Parties to this Agreement shall give all notices to the
other parties concerning this Agreement by personal delivery, by telecopier or
by registered or certified mail, return receipt requested, addressed as follows:
If to the Company: Northwest NeuroLogic, Inc.
2611 S.W. Third Avenue, Suite 200
Portland, Oregon 97201
Attention: Chief Executive Officer
If to Optionee: at Optionee's address stated in the caption of
this Agreement.
Any party may, by written notice to the other parties, designate a new address
to which notices shall thereafter be delivered. Notice hereunder shall be deemed
effective upon the earlier of actual receipt or three days after being sent by
registered or certified mail.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the date stated above.
NORTHWEST NEUROLOGIC, INC.
By
----------------------------------
Title
-------------------------------
OPTIONEE
------------------------------------