STOCK OPTION AGREEMENT
AGREEMENT, dated September 11, 2000, between SELECT THERAPEUTICS INC. (the
"Company"), a Delaware corporation with offices at 124 Mount Auburn Street,
Suite 200 North, Cambridge, Massachusetts, 02138, and BONNI DUTCHER (the
"Optionee"), residing at 13304 Sunny Brook Place, Potomac, Maryland 20854.
WHEREAS, in consideration for the termination of optionee's consulting
agreement with the Company dated May 18, 2000, the Company desires to give the
Optionee an opportunity to purchase shares of its common stock (the "Common
Stock"), subject to the terms and conditions set forth in this Agreement.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Option Grant. The Company hereby grants to the Optionee the option (the
"Option") to purchase 15,000 shares (the "Optioned Shares") of Common Stock
from the Company at a price of US $4.00 per share. The Optionee shall have
the right to exercise the Option immediately upon the execution of this
Agreement through and including September 10, 2002. The Option may be
exercised in whole at any time or in part from time to time during the
exercise period and is subject to adjustment as to price and number of
shares as set forth in Section 5 hereof.
2. Option Exercise; Cashless Exercise. The Option may be exercised by notice
to the Company of the intent to exercise the
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Option, an acceptable form of which notice is set forth as Exhibit A hereto
and made a part hereof, specifying the number of Optioned Shares in respect
of which the Option is being exercised and the Option exercise price and
accompanied by payment for such Shares by cash, wire transfer or a bank or
certified check payable to the order of the Company. This Option also is
exercisable by a broker-dealer, acting on behalf of the Optionee, if (a)
such broker-dealer and the Optionee shall agree to comply with the
applicable provisions of Section 220.3(e)(4) of Regulation T of the Federal
Reserve Board, (b) if the broker-dealer agrees to remit the Option exercise
price to the Company out of the net sales proceeds of the Optioned Shares
being acquired and (c) if the Company receives written instructions, signed
by the Optionee, requesting the Company to deliver such Shares to such
broker dealer and specifying the account into which such Shares should be
deposited. The Optionee agrees to make adequate provision for the payment
of any withholding taxes due upon exercise of the Option.
3. Option Transferable Only Upon the Death of the Optionee. During the life of
the Optionee, the Option shall not be transferable and may be exercised
only by the Optionee; provided, however, that in the event of the death of
the Optionee prior to the Expiration Date, the Option, to the extent not
theretofore exercised, shall be exercisable in full by the person to whom
the Option is transferred by will or by the applicable laws of descent and
distribution, and the Option shall terminate upon its expiration date and
not prior to such date.
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4. Reservation of Common Stock. During the period within which the Option may
be exercised the Company shall at all times have authorized and reserved
for issuance upon such exercise a sufficient number of shares of Common
Stock to provide for its exercise. The Company agrees that its issuance of
this Agreement shall constitute full authority to its officers who are
charged with the duty of causing the issuance of stock certificates of the
Company to take all action necessary or appropriate to cause to be issued
the necessary stock certificates for the shares of Common Stock issuable
upon the proper exercise of the Option.
5. Adjustment of Option Price and Number of Optioned Shares. With respect to
the Option granted hereunder, the Option price and the number and kind of
securities purchasable upon the exercise of the Option shall be subject to
adjustment from time to time upon the occurrence of certain events as
follows:
(a) In case the Company shall (i) pay a dividend in shares of its
capital stock, (ii) subdivide its outstanding shares of Common Stock, (iii)
reduce, consolidate, or combine its outstanding shares of Common Stock into
a smaller number of shares, or (iv) issue by reclassification of its shares
of Common Stock any shares of Common Stock of the Company, the Option price
in effect immediately prior thereto shall be adjusted to that amount,
determined by multiplying the Option price in effect immediately prior to
such date by a fraction, of which the numerator shall be the number of
shares of Common Stock outstanding on such date before giving effect to
such event, and of which the denominator shall be the number of shares of
Common Stock outstanding after
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giving effect thereto. An adjustment made pursuant to this Section 5(a)
shall become effective retroactively, immediately after the record date in
the case of a dividend, and immediately after the effective date in the
case of a subdivision, reduction, consolidation, combination or
reclassification. Each such adjustment shall be made successively whenever
any such effective date or record date shall occur.
(b) If the Common Stock issuable upon the exercise of the Option shall
be changed into the same or a different number of shares of any class or
classes of stock, whether by capital reorganization, reclassification or
otherwise (other than a subdivision or combination of shares or stock
dividend, or a reorganization, merger, consolidation or sale of assets
provided for in this Section 5), then, and in each such event, the Optionee
shall have the right thereafter to receive, without payment of any
additional consideration therefor, the kind and amount of shares of Common
Stock and other securities properly receivable upon such reorganization,
reclassification or other change by holders of the number of shares of
Common Stock into which the Option might have been exercised, as reasonably
determined by the Company's Board of Directors, immediately prior to such
reorganization, reclassification or change, all subject to further
adjustment as provided in this Section 5.
(c) If at any time or from time to time there shall be a capital
reorganization of the Common Stock (other than a subdivision, combination,
reclassification or exchange of shares provided for in this Section 5) or a
merger or consolidation of the Company with or into another corporation, or
the sale of all or substantially all of the Company's properties and assets
to any
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other person, then, as a part of such reorganization, merger, consolidation
or sale, provision shall be made as reasonably determined by the Company's
Board of Directors so that the Optionee shall thereafter be entitled to
receive upon exercise of the Option, without payment of any additional
consideration therefor, the number of shares of capital stock or other
securities or property of the Company or of the successor corporation
resulting from such merger or consolidation or sale, to which a holder of
Common Stock deliverable upon exercise of the Option would have been
entitled on such capital reorganization, merger, consolidation or sale.
(d) Upon each adjustment in the Option price, the number of shares of
Common Stock purchasable hereunder shall be adjusted, to the nearest whole
share to the product obtained, by multiplying the number of shares of
Common Stock purchasable immediately prior to such adjustment in the Option
price by a fraction, the numerator of which shall be the Option price
immediately prior to such adjustment and the denominator of which shall be
the Option price immediately thereafter.
(e) The adjustments provided for in this Section 5 are cumulative and
shall apply to successive divisions, subdivisions, reductions,
combinations, consolidations, issues, distributions or other events
contemplated herein resulting in any adjustment under the provisions of
this Section 5; provided, however, that, notwithstanding any other
provision of this Section 5, no adjustment of the Option price shall be
required if (1) the issue of Common Stock is being made pursuant to any
stock option or stock purchase plan in force from time to time for officers
and/or employees of the Company, or any other option(including warrants)
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outstanding at the date of issuance of this Option or (2) unless such
adjustment would require an increase or decrease of more than five percent
(5%) in the Option price then in effect; and provided further, however,
that any adjustments in the Option price, which by reason of this Section
5(e), are not required then to be made shall be carried forward and taken
into account in any subsequent adjustment.
6. Certificate of Adjustment. Whenever the Option price is adjusted, as
provided in Section 5 above, the Company shall promptly deliver to the
Optionee a certificate of the principal financial officer of the Company
setting forth the Option price after such adjustment and setting forth a
brief statement of the facts requiring such adjustments and the calculation
thereof.
7. No Fractional Shares. No fractional shares of Common Stock will be issued
in connection with any exercise of the Option. In lieu of any fractional
shares which would otherwise be issuable, the Company shall pay cash equal
to the product of such fraction multiplied by the Option price in effect on
the date of exercise.
8. Notice of Certain Events. If at any time prior to the expiration or full
exercise of the Option, the Company shall:
(a) Take a record of the holders of any class of securities of the
Company for the purpose of determining the holders thereof who are entitled
to receive any dividend (other than a cash dividend at the same rate as the
rate of the last cash dividend theretofore paid) or other distribution, or
any rights to subscribe for, purchase or otherwise acquire any shares of
capital
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stock of any class or any other securities or property, or to receive any
other right;
(b) Offer for subscription pro rata to holders of Common Stock of the
Company any additional shares of capital stock of any class or other
rights;
(c) Propose any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or
any consolidation or merger of the Company with, or sale of all or
substantially all of its assets to, another corporation or business
organization; or
(d) Be the subject of any voluntary or involuntary dissolution,
liquidation or winding-up;
then, in each such event, the Company shall mail to the Optionee a notice
specifying (i) the date or expected date on which any such record is to be taken
for the purpose of such dividend, distribution or right, and (ii) the date or
expected date upon which any such reorganization, reclassification,
recapitalization, dissolution, liquidation, winding-up or offering is to take
place and the time, if any, to be fixed, as of which the holders of record of
Common Stock shall be entitled to exchange their shares of Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, recapitalization, dissolution, liquidation or winding-up. Such
notice shall be mailed at least forty-five (45) days prior to the earlier of the
dates specified in clauses (i) and (ii) above.
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9. Rights as a Stockholder.
(a) The Optionee shall not be deemed for any purposes to be a
stockholder of the Company with respect to any of the Optioned Shares
except to the extent that the Option shall have been duly exercised with
respect thereto.
(b) The existence of an Option shall not affect in any way the right
or power of the Company or its stockholders 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 issue of bonds, debentures, preferred or prior
preference stock ahead of or affecting the Common Stock or the rights
thereof, or 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.
10. Compliance with Securities Laws.
(a) Until such time as the Optioned Shares shall have been either
registered under the Securities Act of 1933, as amended (the "Securities
Act"), or sold pursuant to an exemption from registration, the Company
shall utilize its best efforts to comply with the reporting requirements of
Sections 13 and 15(d) of the Securities Exchange Act of 1934 (whether or
not it shall be required to do so pursuant to such sections) and will use
its best efforts to comply with all other public information reporting
requirements of the Securities and Exchange Commission (the "SEC")
(including, without limitation, Rule 144 promulgated by the SEC under the
Securities Act) from time to time in effect and relating
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to the availability of an exemption from registration under the Securities
Act for the sale of restricted securities. The Company also will cooperate
with the Optionee in supplying such information as may be necessary for the
Optionee to complete and file any information reporting forms presently or
hereafter required by the SEC as a condition to the availability of such an
exemption.
(b) As a condition precedent to the valid exercise of an Option the
Optionee shall represent in writing to the Company that he is acquiring
such Shares for his own account as an investment and not with a view to, or
for sale in connection with, the distribution of any thereof and each
certificate representing Optioned Shares shall bear a legend customary for
securities not registered under the Securities Act.
11. Notices. All notices required or desired to be given hereunder shall be in
writing and shall be deemed properly given to a party if personally
delivered or mailed by certified mail, return receipt requested, to such
party at the address set forth at the head of this Agreement or to such
other address as shall be specified by notice duly given. Notices given by
certified mail shall be deemed given three business days after the date of
mailing, and notices delivered in person shall be deemed given on the date
of delivery.
12. Entire Agreement; Breach and Waiver. The provisions hereof constitute the
entire agreement between the parties with respect to the subject matter
hereof and supersede any prior written or oral understanding. This
Agreement may not be amended or modified in any manner, except by an
instrument in writing
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signed by both parties hereto. The failure of either party hereto to
enforce at any time any of the provisions hereof shall in no way be
construed to be a waiver of any such provision or any other provision, or
of the right of such party thereafter to enforce each and every such
provision or other provision in the event of a subsequent breach. Any
waiver must be in writing and duly authorized.
13. Agreement Binding Upon Successors. This Agreement shall inure to the
benefit of, and shall be binding upon the Company, its successors and
assigns, and upon the Optionee, his successors and assigns, heirs,
executors, administrators and legal representatives.
14. Counterparts. This Agreement may be executed in several counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
15. Construction. This Agreement shall be governed by, and construed in
accordance with, the local laws of the State of New York.
16. Headings. The headings herein are solely for the convenience of reference
and shall be given no effect in the construction or interpretation hereof
and shall not constitute, or be deemed to constitute, a part hereof.
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IN WITNESS WHEREOF, the Company and the Optionee have executed this
Agreement as of the day and year first above written.
SELECT THERAPEUTICS INC.
By: /s/ Robert Bender
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Robert Bender, Chairman
Optionee:
/s/ Bonni Dutcher
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Bonni Dutcher
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EXHIBIT A
Date: , 200
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Select Therapeutics Inc.
124 Mount Auburn Street
Suite 200 North
Cambridge, Massachusetts 02138
Attn: Chairman
Re: Exercise of Stock Option
Gentlemen:
Please be advised that I wish to exercise my Stock Option by purchasing
_________ shares of Common Stock of the Company at the option price of US $ per
share. I enclose herewith a check in the amount of US $_______________ in full
payment for said shares.
Please deliver the certificate(s) to me at the following address:
Sincerely,
Name:______________________
Address:___________________
___________________________
___________________________
Social Security Number:
___________________________
Enclosure
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