Exhibit 10.13
BRAINSTORM CELL THERAPEUTICS INC.
OPTION AGREEMENT
Made effective as of the 31st day of December, 2004
BETWEEN: Brainstorm Cell Therapeutics Inc.
A company incorporated in Washington
(hereinafter the "Company")
on the one part
AND: Dr. Yaffa Beck
10 Hankin St., Tel Aviv
(hereinafter the "Optionee")
on the other part
WHEREAS On November 8, 2004 (the "Effective Date") the Optionee entered into
an employment agreement with the Company (the "Employment
Agreement") pursuant to which the Company undertook to grant the
Optionee Options to purchase Shares of the Company; and
WHEREAS On November 25, 2004, the Company duly adopted and the Board
approved the 2004 Global Share Option Plan (the "Plan"), and
Appendix A - Israel thereto (the "Israeli Appendix"), forming an
integral part of the Plan, a copy of which is attached as Exhibit A
hereto; and
WHEREAS Pursuant to the Plan and the Israeli Appendix, the Company has
decided to grant Options to purchase Shares of the Company to the
Optionee, and the Optionee has agreed to such grant, subject to all
the terms and conditions as set forth in the Plan, the Israeli
Appendix and as provided herein;
NOW, THEREFORE, it is agreed as follows:
1. Preamble and Definitions
1.1 The preamble to this agreement constitutes an integral part hereof.
1.2 Unless otherwise defined herein, capitalized terms used herein shall
have the meaning ascribed to them in the Plan and/or the Israeli
Appendix.
2. Grant of Options
2.1 The Company hereby grants to the Optionee the number of Options as
set forth in Exhibit B hereto, each Option shall be exercisable for
one Share, upon payment of the Purchase Price as set forth in
Exhibit B, subject to the terms and the conditions as set forth in
the Plan and/or the Israeli Appendix and as provided herein.
2.2 The Optionee is aware that the Company intends in the future to
issue additional shares and to grant additional options to various
entities and individuals, as the Company in its sole discretion
shall determine.
3. Period of Option and Conditions of Exercise
3.1 The terms of this Option Agreement shall commence on the Date of
Grant and terminate at the Expiration Date, or at the time at which
the Option expires pursuant to the terms of the Plan and/or the
Israeli Appendix or pursuant to this Option Agreement.
3.2 Options may be exercised only to purchase whole Shares, and in no
case may a fraction of a Share be purchased. If any fractional Share
would be deliverable upon exercise, such fraction shall be rounded
up one-half or less, or otherwise rounded down, to the nearest whole
number.
4. Adjustments
Notwithstanding anything to the contrary in Section 7.1 of the Plan and in
addition thereto, if in any such Transaction as described in Section 7.1
of the Plan, the Successor Company (or parent or subsidiary of the
Successor Company) does not agree to assume or substitute for the Options,
the Vesting Dates shall be accelerated so that any unvested Option shall
be immediately vested in full as of the date which is ten (10) days prior
to the effective date of the Transaction, and the Committee shall notify
the Optionee that the unexercised Options are fully exercisable for a
period of ten (10) days from the date of such notice, and that any
unexercised Options shall terminate upon the expiration of such period.
If the successor Company (or parent or subsidiary of the Successor
Company) agrees to assume or substitute for the Options and Optionee's
employment with the Successor Company is terminated by the Successor
Company without "Cause" (as defined in the Employment Agreement) within
one year of the closing of such Transaction, the Vesting Dates shall be
accelerated so that any unvested portion of the substituted Option shall
be immediately vested in full as of the date of notice of such termination
without Cause.
Notwithstanding any provisions of the Plan and/or the Israeli Appendix, in
the event that Company terminates Optionees's employment without Cause (as
defined in the Employment Agreement) or in the event that the Optionee
resigns as a result of Constructive Discharge (as defined below) or in the
event of termination of Optionee's employment by reason of Disability (as
defined below) or death of the Optionee, all of the remaining unvested
Options granted to Optionee shall vest immediately as of the date of the
notice of termination, and Optionee or her legal representative, estate or
other person to whom her rights are transferred by will or by laws of
descent or distribution, shall be entitled to exercise the vested Options
from said date until the earlier of (i) the lapse of four (4) years
thereafter, or (ii) until the Expiration Date. Notwithstanding the above,
in the event of termination of Optionee's employment by reason of
Disability or death of the Optionee within two (2) years of the Effective
Date, only 67% of the remaining unvested Options shall vest immediately as
of the date of the notice of termination and the Optionee or her legal
representative, estate, or other person to whom her rights are transferred
by will or by laws of descent or distribution, shall be entitled to
exercise the vested Options as above. The term "Constructive Discharge"
shall mean (i) material reduction in Optionee's compensation; (ii)
material reduction in the level, scope of job responsibility or status or
material change in the position of Optionee occurring without the consent
of the Optionee; (iii) relocation to an office of the Company which is
more than sixty (60) kilometers from the office where Optionee was
previously located to which Optionee has not agreed; or (iv) voluntary
termination by Optionee as a result of an M&A Transaction or within 6
months thereafter. For the purposes hereof, "M&A Transaction" shall mean a
merger, consolidation, corporate reorganization, or any transaction in
which all or substantially all of the assets or shares of Company and/or
its subsidiary are sold, leased or transferred to another company or
otherwise disposed of; and the term "Disability" shall mean a physical or
mental infirmity which impairs Optionee's ability to substantially perform
her duties under her Employment Agreement and which continues for a period
of least ninety (90) consecutive days.
5. Vesting; Period of Exercise
Subject to the provisions of the Plan and/or the Israeli Appendix and
except as otherwise provided for herein, Options shall vest and become
exercisable according to the Vesting Dates set forth in Exhibit B hereto,
provided that the Optionee is an Employee of, or providing services to,
the Company and/or its Affiliates on the applicable Vesting Date.
Except as set forth in Section 4 above or in this Section 5, all
unexercised Options granted to the Optionee shall terminate and shall no
longer be exercisable on the Expiration Date, as described in Section 2.8
of the Plan.
Notwithstanding any provisions of the Plan and/or the Israeli Appendix, in
the event that the Company terminates Optionee's employment for Cause (as
defined in the Employment Agreement), Optionee shall be entitled to
exercise the Options vested as of the date of the notice of termination
until the lapse of twelve (12) months thereof, and all Options which are
not yet vested on the date of such termination shall immediately expire.
6. Exercise of Options
6.1 Options may be exercised in accordance with the provisions of
Section 8.1 of the Plan. The Purchase Price shall be payable upon
the exercise of an Option in accordance with Section 6.2 of the
Plan.
6.2 In order for the Company to issue Shares upon the exercise of any of
the Options, the Optionee hereby agrees to sign any and all
documents required by any applicable law and/or by the Company's
incorporation documents. The Optionee further agrees that in the
event that the Company and its counsel deem it necessary or
advisable, in their sole discretion, the issuance of Shares may be
conditioned upon certain representations, warranties, and
acknowledgments by the Optionee.
6.3 The Company shall not be obligated to issue any Shares upon the
exercise of an Option if such issuance, in the opinion of the
Company, might constitute a violation by the Company of any
provision of law.
7. Restrictions on Transfer of Options and Shares
7.1 The transfer of Options and the transfer of Shares to be issued upon
exercise of the Options shall be subject to the limitations set
forth in the Plan, in the Israeli Appendix, in the Company's
incorporation documents, in any shareholders' agreement to which the
holders of common stock of the Company are bound or in any
applicable law including securities law of any jurisdiction.
7.2 With respect to any Approved 102 Option, subject to the provisions
of Section 102 and any rules or regulation or orders or procedures
promulgated thereunder, an Optionee shall not sell or release from
trust any Share received upon the exercise of an Approved 102 Option
and/or any share received subsequently following any realization of
rights, including without limitation, bonus shares, until the lapse
of the Holding Period required under Section 102 of the Ordinance.
Notwithstanding the above, if any such sale or release occurs during
the Holding Period, the sanctions under Section 102 of the Ordinance
and under any rules or regulation or orders or procedures
promulgated thereunder shall apply to and shall be borne by such
Optionee.
7.3 With respect to Unapproved 102 Option, if the Optionee ceases to be
employed by the Company or any Affiliate, the Optionee shall extend
to the Company and/or its Affiliate a security or guarantee for the
payment of tax due at the time of sale of Shares, all in accordance
with the provisions of Section 102 and the rules, regulation or
orders promulgated thereunder.
7.4 The Optionee shall not dispose of any Shares in transactions which
violate, in the opinion of the Company, any applicable laws, rules
and regulations.
7.5 The Optionee agrees that the Company shall have the authority to
endorse upon the certificate or certificates representing the Shares
such legends referring to the foregoing restrictions, and any other
applicable restrictions as it may deem appropriate (which do not
violate the Optionee's rights according to this Option Agreement).
8. Taxes; Indemnification
8.1 Any tax consequences arising from the grant or exercise of any
Option, from the payment for Shares covered thereby or from any
other event or act (of the Company and/or its Affiliates, the
Trustee or the Optionee), hereunder, shall be borne solely by the
Optionee. The Company and/or its Affiliates and/or the Trustee shall
withhold taxes according to the requirements under the applicable
laws, rules, and regulations, including withholding taxes at source.
Furthermore, the Optionee hereby agrees to indemnify the Company
and/or its Affiliates and/or the Trustee and hold them harmless
against and from any and all liability for any such tax or interest
or penalty thereon, including without limitation, liabilities
relating to the necessity to withhold, or to have withheld, any such
tax from any payment made to the Optionee.
8.2 The Optionee will not be entitled to receive from the Company and/or
the Trustee any Shares allocated or issued upon the exercise of
Options prior to the full payments of the Optionee's tax liabilities
arising from Options which were granted to him and/or Shares issued
upon the exercise of Options. For the avoidance of doubt, neither
the Company nor the Trustee shall be required to release any share
certificate to the Optionee until all payments required to be made
by the Optionee have been fully satisfied.
8.3 The receipt of the Options and the acquisition of the Shares to be
issued upon the exercise of the Options may result in tax
consequences. THE OPTIONEE IS ADVISED TO CONSULT A TAX ADVISER WITH
RESPECT TO THE TAX CONSEQUENCES OF RECEIVING OR EXERCISING THIS
OPTION OR DISPOSING OF THE SHARES.
8.4 With respect to Approved 102 Options, the Optionee hereby
acknowledges that he is familiar with the provisions of Section 102
and the regulations and rules promulgated thereunder, including
without limitations the type of Option granted hereunder and the tax
implications applicable to such grant. The Optionee accepts the
provisions of the trust agreement signed between the Company and the
Trustee, attached as Exhibit C hereto, and agrees to be bound by its
terms.
9. Miscellaneous
9.1 No Obligation to Exercise Options. The grant and acceptance of these
Options imposes no obligation on the Optionee to exercise it.
9.2 Confidentiality. The Optionee shall regard the information in this
Option Agreement and its exhibits attached hereto as confidential
information and the Optionee shall not reveal its contents to anyone
except when required by law or for the purpose of gaining legal or
tax advice.
9.3 Continuation of Employment or Service. Nothing in the Plan, the
Israeli Appendix and this Option Agreement shall be construed as
imposing any obligation on the Company or an Affiliate to continue
the Optionee's employment or service and nothing in the Plan, the
Israeli Appendix or in this Option Agreement shall confer upon the
Optionee any right to continue in the employ or service of the
Company and/or an Affiliate or restrict the right of the Company or
an Affiliate to terminate such employment or service at any time.
9.4 Entire Agreement. Subject to the provisions of the Plan and/or the
Israeli Appendix, to which this Option Agreement is subject, this
Option Agreement, together with the exhibits hereto, constitute the
entire agreement between the Optionee and the Company with respect
to Options granted hereunder, and supersedes all prior agreements,
understandings and arrangements, oral or written, between the
Optionee and the Company with respect to the subject matter hereof.
9.5 Failure to Enforce - Not a Waiver. The failure of any party to
enforce at any time any provisions of this Option Agreement or the
Plan and/or the Israeli Appendix shall in no way be construed to be
a waiver of such provision or of any other provision hereof.
9.6 Provisions of the Plan and/or the Israeli Appendix. The Options
provided for herein are granted pursuant to the Plan and/or the
Israeli Appendix and said Options and this Option Agreement are in
all respects governed by the Plan and/or the Israeli Appendix and
subject to all of the terms and provisions of the Plan and/or the
Israeli Appendix.
Any interpretation of this Option Agreement will be made in
accordance with the Plan and/or the Israeli Appendix but in the
event there is any contradiction between the provisions of this
Option Agreement and the Plan and/or the Israeli Appendix, the
provisions of the Option Agreement will prevail.
9.7 Binding Effect. The Plan, the Israeli Appendix and this Option
Agreement shall be binding upon the heirs, executors, administrators
and successors of the parties hereof.
9.8 Notices. All notices or other communications given or made hereunder
shall be in writing and shall be delivered or mailed by registered
mail or delivered by email or facsimile with written confirmation of
receipt to the Optionee and/or to the Company at the addresses shown
on the letterhead above, or at such other place as the Company may
designate by written notice to the Optionee. The Optionee is
responsible for notifying the Company in writing of any change in
the Optionee's address, and the Company shall be deemed to have
complied with any obligation to provide the Optionee with notice by
sending such notice to the address indicated below.
Company's Signature:
Name: Yoram Drucker
Position: Chief Operating Officer
Signature: /s/ Yoram Drucker
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Yoram Drucker
I, the undersigned, hereby acknowledge receipt of a copy of the Plan and the
Israeli Appendix and accept the Options subject to all of the terms and
provisions thereof. I have reviewed the Plan and the Israeli Appendix and this
Option Agreement in its entirety, have had an opportunity to obtain the advice
of counsel prior to executing this Option Agreement, and fully understand all
provisions of this Option Agreement. I agree to notify the Company upon any
change in the residence address indicated above.
12/31/04 /s/ Yaffa Beck
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Date Yaffa Beck
Optionee's signature
Exhibit A: Brainstorm Cell Therapeutics Inc. 2004 Global Share Option Plan and
Appendix A - Israel
Exhibit B: Terms of the Option
Exhibit C: Trust Agreement
EXHIBIT B
TERMS OF THE OPTION
Name of the Optionee: Dr. Yaffa Beck
Date of Grant: 12.31.04
Designation: Capital Gain Option (CGO)
1. Number of Options granted: 1,828,692
2. Purchase Price: $0.15
3. Vesting Dates: 36 equal monthly installments beginning on
December 8, 2004
Number of Options Vesting Date
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4. Expiration Date: November 8, 2014 (unless otherwise adjusted
as provided herein)
/s/ Yaffa Beck /s/ Yoram Drucker
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Yaffa Beck Yoram Drucker
Optionee Company