1
EXHIBIT 4.7
LIFEQUEST MEDICAL, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
This Non-Qualified Stock Option Agreement (the "Agreement") dated May
11, 1998, is entered into between LifeQuest Medical, Inc., a Delaware
corporation (the "Company"), and Richard A. Woodfield ("Optionee").
Recitals
A. On the date hereof, Optionee and the Company have entered into an
Employment Agreement (the "Employment Agreement") whereby Optionee has agreed to
become an employee of the Company, and the Company desires to encourage Optionee
to enter into the Employment Agreement, encourage the stock ownership of
Optionee and create a proprietary interest of Optionee in the
Company.
B. The Company desires to grant to Optionee an option to purchase up to
250,000 shares of Common Stock, $.001 par value ("Common Stock"), of the
Company.
Agreements
In consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
.1. Grant of Option. Subject to the terms and conditions set forth in
this Agreement, the Company hereby grants to Optionee the option to purchase,
during the period commencing on the date of this Agreement and ending May 10,
2008, at an exercise price equal to $4.00 per share, up to, but not exceeding in
the aggregate, 250,000 shares of Common Stock, $.001 par value ("Common Stock"),
of the Company (such option is hereinafter called the "Option").
.2. Non-Qualified Status. The Option is intended to be a non-qualified
stock option which does not satisfy the requirements of Section 422A of the
Internal Revenue Code of 1986, as amended. The Option is granted outside of and
therefore shall not be subject to the terms and provisions of the Company's 1989
Stock Option Plan, as amended and/or restated.
2
.3. Vesting of Option. Subject to Paragraph 6, the Option evidenced
hereby may be exercised from time to time as to the following number of shares,
on a cumulative basis (as to options to purchase shares not previously
exercised):
62,500 shares on each of the following dates if, except as
otherwise provided in Paragraph 6, the Optionee is employed by the
Company on such date:
(a) May 11, 1999;
(b) May 11, 2000;
(c) May 11, 2001; and
(d) May 11, 2002.
.4. Exercise of Option. The Option shall be exercised by Optionee's
delivery of written notice to the Company setting forth the number of shares
with respect to which the Option is to be exercised and the address to which the
certificates representing shares of Common Stock issuable upon the exercise of
the Option shall be mailed. In order to be effective, such written notice shall
be accompanied, at the time of its actual receipt by the Company, by payment of
the option price of such shares, which payment shall be made by check in an
amount equal to the option price of such shares. As promptly as practicable
after the receipt by the Company of (a) such written notice from Optionee
setting forth the number of shares with respect to which the Option is to be
exercised and (b) payment of the option price of such shares in the form
required by the foregoing provisions, the Company shall deliver to Optionee
certificates representing the number of shares with respect to which the Option
has been so exercised, such certificates to be registered in the name of
Optionee. Delivery of such certificates shall be considered to have been made
when such certificates shall have been mailed, postage prepaid, to Optionee at
the address specified for such purpose in such written notice from Optionee to
the Company.
.5. Transferability of Option. The Option shall not be transferable by
Optionee except through his last will and testament or under the laws of descent
and distribution, and shall be exercisable, during his lifetime, only by him.
Any assignment or transfer of the Option except through his last will and
testament or under the laws of descent and distribution, whether voluntarily or
involuntarily, by operation of law or otherwise, shall not vest in the assignee
or transferee any interest or rights whatsoever, but immediately upon such
assignment or transfer the Option shall terminate and become of no further
effect.
.6. Termination of Employment or Death of Optionee. The Option granted
to Optionee shall terminate on the earlier of the date of the expiration of the
Option or upon severance of the employment relationship between the Company and
Optionee for any reason, for or without cause, other than the termination of the
Employment Agreement by the Company without Cause (as defined in the
-2-
3
Employment Agreement) pursuant to Section 5.04 of the Employment Agreement. If
the Company terminates the Employment Agreement without Cause pursuant to
Section 5.04 thereof, notwithstanding the provisions of Paragraph 3 hereinabove,
Optionee shall immediately have the right, at any time prior to its expiration,
to exercise his Option as to any and all of the 250,000 shares for which
Optionee has not previously exercised his Option. If Optionee shall die while in
the employ of the Company and before the date of expiration of his Option, his
Option shall terminate on the earlier of the date of expiration or one year
following the date of death. After the death of Optionee, his executor,
administrator or any person or persons to whom his Option may be transferred by
will or by the laws of descent and distribution, shall have the right, at any
time prior to its termination, to exercise his Option to the extent Optionee
could have exercised it at the time of his death.
.7. No Rights as Stockholder. Optionee shall not have rights as a
stockholder with respect to shares covered by the Option until the date of
issuance of a stock certificate for such shares; and, except as otherwise
provided in Paragraph 8 hereof, no adjustment for dividends or otherwise shall
be made if the record date therefor is prior to the date of issuance of such
certificate.
.8. Changes in the Company's Capital Structure. The existence of the
Option shall not affect in any way the right or power of the Company 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 issuance of bonds, debentures, preferred or
prior preference stock ahead or affecting the Common Stock or the rights
thereof, or the dissolution or liquidation of 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.
If the Company shall effect a subdivision or consolidation of shares or
other capital readjustment, the payment of a stock dividend, or other increase
or reduction of the number of shares of Common Stock outstanding, without
receiving compensation therefor in money, services or property, then (a) the
number, class and per share price of shares of stock subject to the Option
hereunder shall be appropriately adjusted in such a manner as to entitle
Optionee to receive upon exercise of the Option, for the same aggregate cash
consideration, the same total number and class of shares as he would have
received had he exercised the Option in full immediately prior to the event
requiring the adjustment; and (b) the number and class of shares then reserved
for issuance under this Agreement shall be adjusted by substituting for the
total number and class of shares of Common Stock then reserved that number and
class of shares of stock that would have been received by the owner of an equal
number of outstanding shares of each class of Common Stock as the result of the
event requiring the adjustment.
-3-
4
Except as provided herein, if the Company is merged or consolidated
with another corporation or if the Company is liquidated or sells or otherwise
disposes of substantially all its assets while the Option remains unexercised
under this Agreement, (x) subject to the provisions of clause (z) below, after
the effective date of such merger, consolidation, liquidation, sale or other
disposition, as the case may be, Optionee shall be entitled, upon exercise of
the Option, to receive, in lieu of shares of Common Stock, the number and class
or classes of shares of such stock or other securities or property to which
Optionee would have been entitled if, immediately prior to such merger,
consolidation, liquidation, sale or other disposition, Optionee had been the
holder of record of a number of shares of Common Stock equal to the number of
shares as to which the Option shall be so exercised; (y) the limitations set
forth in Paragraph 3 hereof may be waived by the Company, in its sole
discretion, so that the Option, from and after a date prior to the effective
date of such merger, consolidation, liquidation, sale or other disposition, as
the case may be, shall be exercisable in full; and (z) the Option may be
canceled by the Company as of the effective date of any such merger,
consolidation, liquidation, sale or other disposition, provided that (i) notice
of such cancellation shall be given to Optionee and (ii) Optionee shall have the
right to exercise the Option in full (without regard to any limitations set
forth in Paragraph 3 hereof) during a period set by the Company preceding the
effective date of such merger, consolidation, liquidation, sale or other
disposition and, provided further, that in the event the Option may not be
exercised in full under applicable securities laws without registration of the
shares of Common Stock issuable on exercise of the Option, the Company may limit
the exercise of the Option to such number of shares of Common Stock, if any, as
may be issued without such registration, the method of choosing the number of
shares of Common Stock for which the Option may be exercised to be solely within
the discretion of the Company.
Except as hereinbefore expressly provided, the issue by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, for cash or property, or for labor or services either upon direct
sale or 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, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number, class or price of shares of Common Stock
then subject to the Option.
.9. Requirements of Law. The Company shall not be required to sell or
issue any shares under the Option if the issuance of such shares shall
constitute or result in a violation by Optionee or the Company of any provision
of any law, statute or regulation of any governmental authority. Specifically,
in connection with any applicable statute or regulation relating to the
registration of securities, upon exercise of the Option, the Company shall not
be required to issue such shares unless the Company has received evidence
satisfactory to it to the effect that Optionee will not transfer such shares
except in accordance with applicable law,
-4-
5
including receipt of an opinion of counsel satisfactory to the Company to the
effect that any proposed transfer complies with applicable law. The Company may,
but shall in no event be obligated to, register any shares covered hereby
pursuant to applicable securities laws of any county or political subdivision
thereof. In the event the shares issuable on exercise of the Option are not so
registered, the Company may imprint on the certificate evidencing such shares
any legend that counsel for the Company considers necessary or advisable to
comply with applicable law. The Company shall not be obligated to take any other
affirmative action in order to cause the exercise of the Option or the issuance
of shares pursuant to the Option to comply with any law or regulation of any
governmental authority.
.10. Notices. Every notice or other communication relating to this
Agreement shall be in writing, and shall be mailed to or delivered to the party
for whom it is intended at such address as may from time to time be designated
by such party in a notice mailed or delivered to the other party as herein
provided, provided that, unless and until some other address be so designated,
all notices or communications by Optionee to the Company shall be mailed or
delivered to the Company at:
LifeQuest Medical, Inc.
12961 Park Central, Suite 1300
San Antonio, Texas 78216
Attention: Chief Financial Officer
and all notices or communications by the Company to Optionee may be given to
Optionee personally or may be mailed to him at:
Richard A. Woodfield
604 Mountain View Drive
Wayne, Pennsylvania 19087
This Agreement is effective as of the date first written above.
COMPANY
LIFEQUEST MEDICAL, INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
OPTIONEE
-5-
6
--------------------------------
RICHARD A. WOODFIELD
-6-