EXHIBIT 10.41
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED 1992 STOCK OPTION PLAN
INCENTIVE STOCK OPTION
AGREEMENT entered into as of this 12th day of June 1995 by and between Life
Medical Sciences, Inc., a Delaware corporation, with a principal place of
business at 214 Carnegie Center in Princeton, New Jersey (the "Company"), and
the undersigned employee of the Company (or one of its subsidiaries) (the
Company and its subsidiaries hereinafter together referred to as the "Company"),
(said employee hereinafter referred to as the "Optionee").
1. The Company desires to grant the Optionee an incentive stock option
under the Company's Amended and Restated 1992 Stock Option Plan (the "Plan") to
acquire Shares of the Company's Common Stock, .001 par value (the "Shares").
2. The Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
ACCORDINGLY, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option.
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The Company hereby grants to the Optionee an incentive stock option (the
"Option") to purchase all or any part of an aggregate of 60,000 Shares on the
terms and conditions hereinafter set forth. This option shall be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
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The purchase price ("Purchase Price") for the Shares covered by the Option
shall be $7.00 per share.
3. Time of Vesting and Exercise of Option.
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The Option shall vest and become exercisable in three equal installments, the
first of which shall vest and become exercisable on the date hereof and the
remaining two of which shall vest and become exercisable on the first and second
anniversaries of the date hereof, respectively.
4. Term of Options: Exercisability.
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(a) Term.
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(i) The Option shall expire as to each installment five (5) years from the
date such installment shall first become exercisable, but shall be subject to
earlier termination as herein provided.
(ii) Except as otherwise provided in this Section 4, if the Optionee ceases
to be an employee of the Company, the Option granted to the Optionee hereunder
shall terminate on the earlier of the last day of the month or thirty days after
the date such Optionee ceases to be an employee of the Company, or on the date
on which the Option expires by its terms, whichever occurs first; provided,
however, if (i) the Optionee ceases to be an employee of the Company on account
of his voluntary resignation and (ii) within thirty (30) days after such
resignation the Board of Directors of the Company determines in good faith that
termination for Cause (as defined herein) would have been warranted based on
information that becomes known to the Company, then the Option shall terminate
on the date the Optionee voluntarily resigned from the Company. The Company
shall have the right to postpone any exercise of this Option for a period of up
to thirty (30) days following voluntary resignation by the Optionee.
(iii) If the Optionee's employment is terminated because of dismissal for
Cause (as defined herein) or because the Optionee is in breach of any employment
agreement, such Option will terminate on the date the Optionee ceases to be an
employee of the Company. "Cause" means any gross malfeasance or conviction of a
felony, in either case directly and materially affecting the Company. The
determination of "Cause" shall be made in good faith by the Company's Board of
Directors (whose determination shall be final) with a written explanation
thereof provided to the Optionee.
(iv) If the Optionee's employment is terminated because the Optionee has
become Permanently Disabled (as defined in the Optionee's employment agreement
with the Company of even date herewith), such Option shall terminate on the last
day of the twelfth month from the date such Optionee ceases to be an employee
due to such disability, or on the date on which the Option expires by its terms,
whichever occurs first.
(v) In the event of the death of the Optionee, the Option granted to such
Optionee shall terminate on the last day of the twelfth month from the date of
death, or on the date on which the Option expires by its terms, whichever occurs
first.
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(b) Exercisability.
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(i) Except as provided below, if the Optionee ceases to be an employee of
the Company, the Option granted to the Optionee hereunder shall be exercisable
only to the extent that the right to purchase Shares under such Option has
accrued and is in effect on the date such Optionee ceases to be an employee of
the Company. No partial exercise may be made for less than one hundred (100)
full Shares of Common Stock.
(ii) If the Optionee ceases to be an employee of the Company because he or
she has become Permanently Disabled, as defined above, the Option granted to the
Optionee hereunder shall be exercisable to the full number of Shares covered by
such Option.
(iii) In the event of the death of the Optionee, the Option granted to the
Optionee may be exercised to the full number of Shares covered thereby whether
or not under the provisions of Section 3 hereof the Optionee was entitled to do
so at the date of his or her death, by the estate of such Optionee, or by any
person or persons who acquired the right to exercise such Option by bequest or
inheritance or by reason of the death of such Optionee.
5. Manner of Exercise of Option.
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(a) To the extent that the right to exercise the Option has accrued and is
in effect, the Option may be exercised in full or in part by giving written
notice to the Company stating the number of Shares exercised and accompanied by
payment in full for such Shares. Upon such exercise, delivery of a certificate
of paid-up, non-assessable Shares shall be made at the principal office of the
Company to the person exercising the Option, not less than thirty (30) and not
more than ninety (90) days from the date of receipt of the notice by the
Company.
(b) The Company shall at all times during the term of the Option reserve
and keep available such number of Shares of its Common Stock as will be
sufficient to satisfy the requirements of the Option. The Optionee shall not
have any of the rights of a stockholder of the company in respect of the Shares
until one or more certificates for such Shares shall be delivered to him or her
upon the due exercise of the Option.
6. Non-Transferability.
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The right of the Optionee to exercise the Option shall not be assignable or
transferable by the Optionee otherwise than by will or the laws or descent and
distribution, and the Option may be exercised during the lifetime of the
Optionee only by him or her. The Option shall be null and void and without
effect upon the bankruptcy of the Optionee or upon any attempted assignment
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or transfer, except as hereinbefore provided, including without limitation any
purported assignment, whether voluntary or by operation of law, pledge,
hypothecation or other disposition contrary to the provisions hereof, or levy of
execution, attachment, trust process or similar process, whether legal or
equitable, upon the Option.
7. Representation Letter and Investment Legend.
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In the event that for any reason the Shares to be issued upon exercise of
the Option shall not be effectively registered under the Securities Act of 1933
("1933 Act"), upon any date on which the Option is exercised in whole or in
part, the person exercising the Option shall give a written representation to
the Company in the form attached hereto as Exhibit 1 and the Company shall place
an "investment legend", so-called, as described in Exhibit 1, upon any
certificate for the Shares issued by reason of such exercise.
8. Adjustments on Changes in Capitalization.
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Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Agreement.
9. No Special Employment Rights.
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Nothing contained in the Plan or this Agreement shall be construed or
deemed by any person under any circumstances to bind the Company to continue the
employment of the Optionee for the period within which this Option may be
exercised. However, during the period of the Optionee's employment, the Optionee
shall render diligently and faithfully the services which are assigned to the
Optionee from time to time by the Board of Directors or by the executive
officers of the company and shall at no time take any action which directly or
indirectly would be inconsistent with the best interests of the Company.
10. Rights as a Stockholder.
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The Optionee shall have no rights as a stockholder with respect to any
Shares which may be purchased by exercise of this Option unless and until a
certificate or certificates representing such Shares are duly issued and
delivered to the Optionee. Except as otherwise expressly provided in the Plan,
no adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.
11. Withholding Taxes.
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Whenever Shares are to be issued upon exercise of this Option, the Company
shall have the right to require the Optionee to remit to the Company an amount
sufficient to satisfy all Federal, state and local withholding tax requirements
prior to the delivery of any certificate or certificates for such Shares. The
Company may agree to permit the Optionee to withhold Shares
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of Common Stock purchased upon exercise of an option to satisfy the above-
mentioned withholding requirement; provided, however, no such agreement may be
made by an Optionee who is an officer or director within the meaning of Section
16 of the Securities Exchange Act of 1934, as amended, except pursuant to a
standing election to so withhold Shares of Common Stock purchased upon exercise
of an option, such election to be made in the form set forth in Exhibit 2 hereto
and to be made not less than six (6) months prior to such exercise. Such
election may be revoked only upon provided in six (6) months prior written
notice to the Company.
12. Entire Agreement.
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This Agreement reflects the parties' entire agreement with respect to the
subject matter hereof and supersedes any other agreement relating thereto
including, without limitation, the employment agreement of even date herewith
between the parties hereto.
IN WITNESS WHEREOF, the company has caused this Agreement to be executed,
and the Optionee has hereunto set his or her hand and seal, all as of the day
and year first above written.
LIFE MEDICAL SCIENCES, INC.
By: s/Herbert Moskowitz
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Title: Chairman
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OPTIONEE: s/ Eli Pines
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(Signature)
NAME: Eli Pines
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(Printed)
Address: 100 Deer Run
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Watchung, NJ 07060
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Social Security #: ###-##-####
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EXHIBIT 1
TO STOCK OPTION AGREEMENT
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Gentlemen:
In connection with the exercise by me as to Shares of Common Stock,
.001 par value, of Life Medical Sciences, Inc. (the "Company") under the
Incentive Stock Option Agreement dated hereunder granted to me under the Amended
and Restated 1992 Stock Option Plan, I hereby acknowledge that I have been
informed as follows:
1. The Shares of Common Stock of the Company to be issued to me
pursuant to the exercise of said option have not been registered under the 1933
Act, and accordingly, must be held indefinitely unless such Shares are
subsequently registered under the 1933 Act, or an exemption from such
registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under
the 1933 Act can be made only after the holding period provided by that Rule,
and,in any sale to which that Rule is not applicable, registration or compliance
with some other exemption under the 1933 Act will be required.
3. The availability of Rule 144 is dependent upon adequate current
public information with respect to the Company being available and, at the time
that I may desire to make a sale pursuant to the Rule, the Company may neither
wish nor be able to comply with such requirement.
In consideration of the issuance of certificates for the Shares to me,
I hereby represent and warrant that I am acquiring such Shares for my own
account for investment, and that I will not sell, pledge or transfer such Shares
in the absence of an effective registration statement covering the same, except
as permitted by the provisions of Rule 144, if applicable, or some other
applicable exemption under the 1933 Act. In view of this representation and
warranty, I agree that there may be affixed to the certificates for the Shares
to be issued to me, and to all certificates issued hereafter representing such
Shares (until in the opinion of counsel, which opinion must be reasonable
satisfactory in form and substance to counsel for the Company, it is no longer
necessary or required) a legend as follows:
"The Shares of Common Stock represented by this certificate have not been
registered under the Federal Securities Act of 1933, as amended, and were
acquired by the registered holder pursuant to a representation and warranty
that such holder was acquiring such Shares for his own account and for
investment, with no intention of transfer or dispose of the same in violation
of the registration requirements of that Act. These Shares may not be sold,
pledged, or transferred in the absence of an effective registration statement
under such Act, or an opinion of counsel, which opinion is reasonably
satisfactory to counsel to the Company, to the effect that registration is
not required under such act."
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I further agree that the Company may place a stop order with its
Transfer Agent, prohibiting the transfer of such Shares, so long as the legend
remains on the certificates representing the shares.
Very truly yours,
Dated: s/ Eli Pines 6/12/95
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EXHIBIT 2
TO STOCK OPTION AGREEMENT
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Gentlemen:
The undersigned Optionee hereby elects and agrees that, whenever the
undersigned exercises a stock option (including any options which now or may
hereafter be granted), the Company shall withhold from that exercise such number
of Shares equal in value to the federal and state withholding taxes due upon
such exercise. The undersigned further acknowledges and agrees that this
election may not be revoked without six (6) months prior written notice to the
Company.
OPTIONEE:
s/ Eli Pines
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Signature
Eli Pines
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(Printed)
Social Security Number: 0800-36-4894
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