EXHIBIT 10.1
PHAGE THERAPEUTICS INTERNATIONAL INC.
2000 STOCK PLAN
1. Purposes of the Plan. The purposes of this Stock Plan are to attract and
retain the best available personnel for positions of substantial responsibility,
to provide additional incentive to Employees, Directors and Consultants and to
promote the success of the Company's business. Options granted under the Plan
may be Incentive Stock Options or Non-statutory Stock Options, as determined by
the Administrator at the time of grant. Stock Purchase Rights may also be
granted under the Plan.
2. Definitions. As used in this Stock Plan, the following definitions will
apply:
(a) "Administrator" means the Board or any of its Committees as will
be administering the Plan under Section 4 of the Plan.
(b) "Applicable Laws" means the requirements relating to the
administration of stock option plans under U.S. state
corporate laws, U.S. federal and state securities laws, the
Code, any stock exchange or quotation system on which the
Common Stock is listed or quoted and the applicable laws of
any other country or jurisdiction where Options or Stock
Purchase Rights are granted under the Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means a committee of Directors appointed by the Board
under Section 4 of the Plan.
(f) "Common Stock" means the Common Stock of the Company.
(g) "Company" means Phage Therapeutics International Inc., a Florida
corporation.
(h) "Consultant" means any person who is engaged by the Company or
any Parent or Subsidiary to render consulting or advisory
services to such entity.
(i) "Director" means a member of the Board of Directors of the
Company.
(j) "Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code.
(k) "Employee" means any person, including Officers and Directors,
employed by the Company or any Parent or Subsidiary of the
Company. A Service Provider will not cease to be an Employee in
the case of (i) any leave of absence approved by the Company or
(ii) transfers between locations of the Company or between the
Company, its Parent, any Subsidiary, or any successor. For
purposes of Incentive Stock Options, no such leave may exceed
ninety days, unless re-employment on expiration of such leave is
guaranteed by statute or contract. If re-employment on expiration
of a leave of absence approved by the Company is not so
guaranteed, on the 181st day of such leave any Incentive Stock
Option held by the Optionee will cease to be treated as an
Incentive Stock Option and will be treated for tax purposes as a
Non-statutory Stock Option. Neither service as a Director nor
payment of a director's fee by the Company will be sufficient to
constitute "employment" by the Company.
(l) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(m) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without
limitation the Nasdaq National Market or The Nasdaq SmallCap
Market of The Nasdaq Stock Market, its Fair Market Value
will be the closing sales price for the stock (or the
closing bid, if no sales were reported) as quoted on the
exchange or system for the last market trading day prior to
the time of determination, as reported in The Wall Street
Journal or any other source as the Administrator considers
reliable;
(ii) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are
not reported, its Fair Market Value will be the mean
between the high bid and low asked prices for the
Common Stock on the last market trading day prior to
the day of determination; or
(iii) In the absence of an established market for the
Common Stock, the Fair Market Value will be
determined in good faith by the Administrator.
(n) "Incentive Stock Option" means an Option intended to qualify
as an incentive stock option within the meaning of Section 422
of the Code.
(o) "Non-statutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.
(p) "Officer" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(q) "Option" means a stock option granted pursuant to the Plan.
(r) "Option Agreement" means a written or electronic agreement
between the Company and an Optionee evidencing the terms and
conditions of an individual Option grant. The Option Agreement
is subject to the terms and conditions of the Plan.
(s) "Option Exchange Program" means a program whereby outstanding
Options are exchanged for Options with a lower exercise price.
(t) "Optioned Stock" means the Common Stock subject to an Option or a
Stock Purchase Right.
(u) "Optionee" means the holder of an outstanding Option or Stock
Purchase Right granted under the Plan.
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(v) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(w) "Plan" means this 2000 Stock Plan.
(x) "Restricted Stock" means shares of Common Stock acquired
pursuant to a grant of a Stock Purchase Right under Section 11
below.
(y) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being
exercised with respect to the Plan.
(z) "Section 16(b)" means Section 16(b) of the Exchange Act.
(aa) "Service Provider" means an Employee, Director or Consultant.
(bb) "Share" means a share of the Common Stock, as adjusted under
Section 12 below.
(cc) "Stock Purchase Right" means a right to purchase Common Stock
pursuant to Section 11 below.
(dd) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 12 of the
Plan, the maximum aggregate number of Shares that may be subject to option and
sold under the Plan is 3,000,000 Shares. The Shares may be authorized but
unissued, or reacquired Common Stock.
If an Option or Stock Purchase Right expires or becomes unexercisable without
having been exercised in full, or is surrendered pursuant to an Option Exchange
Program, the unpurchased underlying Shares will become available for future
grant or sale under the Plan (unless the Plan has terminated). However, Shares
that have actually been issued under the Plan, on exercise of either an Option
or Stock Purchase Right, will not be returned to the Plan and will not become
available for future distribution under the Plan, except that if Shares of
Restricted Stock are repurchased by the Company at their original purchase
price, the Shares will become available for future grant under the Plan.
4. Administration of the Plan.
(a) Procedure.
(i) Multiple Administrative Bodies. The Plan may be administered by
different Committees with respect to different groups of Service
Providers.
(ii) Section 162(m). To the extent that the Administrator
determines it to be desirable to qualify Options
granted hereunder as "performance-based
compensation," within the meaning of Section 162(m)
of the Code, the Plan will be administered by a
Committee of two or more "outside directors," within
the meaning of Section 162(m) of the Code.
(iii) Rule 16b-3. To the extent desirable to qualify
transactions hereunder as exempt under Rule 16b-3,
the transactions contemplated hereunder will be
structured to satisfy the requirements for exemption
under Rule 16b-3.
(iv) Other Administration. Other than as provided above, the Plan will
be administered by (A) the Board or (B) a Committee, which
committee will be constituted to satisfy Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the
Plan and, in the case of a Committee, the specific duties
delegated by the Board to the Committee, and subject to the
approval of any relevant authorities, the Administrator will
have the authority in its discretion: (i) to determine the
Fair Market Value; (ii) to select the Service Providers to
whom Options and Stock Purchase Rights may from time to time
be granted hereunder;
(iii) to determine the number of Shares to be covered by each
award granted under the Plan; (iv) to approve forms of
agreement for use under the Plan; (v) to determine the terms
and conditions, of any Option or Stock Purchase Right granted
under the
Plan. The terms and conditions include, but are not
limited to, the exercise price, the time or times
when Options or Stock Purchase Rights may be
exercised (which may be based on performance
criteria), any vesting acceleration or waiver of
forfeiture restrictions, and any restriction or
limitation regarding any Option or Stock Purchase
Right or underlying Common Stock, based in each case
on the factors as the Administrator, in its sole
discretion, will determine;
(vi) to determine whether and under what circumstances an Option may
be settled in cash under subsection 9(e) instead of Common Stock;
(vii) to reduce the exercise price of any Option to the
then current Fair Market Value if the Fair Market
Value of the Common Stock covered by the Option has
declined since the date the Option was granted;
(viii) to initiate an Option Exchange Program;
(ix) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations
relating to sub-plans established for the purpose of
qualifying for preferred tax treatment under foreign
tax laws;
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(x) to allow Optionees to satisfy withholding tax
obligations by electing to have the Company withhold
from the Shares to be issued on exercise of an Option
or Stock Purchase Right that number of Shares having
a Fair Market Value equal to the amount required to
be withheld. The Fair Market Value of the Shares to
be withheld will be determined on the date that the
amount of tax to be withheld is to be determined. All
elections by Optionees to have Shares withheld for
this purpose will be made in the form and under the
conditions as the Administrator may consider
necessary or advisable; and
(xi) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan.
(c) Effect of Administrator's Decision. All decisions, determinations
and interpretations of the Administrator will be final and
binding on all Optionees.
5. Eligibility.
(a) Non-statutory Stock Options and Stock Purchase Rights may be
granted to Service Providers. Incentive Stock Options may be
granted only to Employees.
(b) Each Option will be designated in the Option Agreement as either
an Incentive Stock Option or a Non-statutory Stock Option.
However, notwithstanding the designation, to the extent that the
aggregate Fair Market Value of the Shares with respect to which
Incentive Stock Options are exercisable for the first time by the
Optionee during any calendar year (under all plans of the Company
and any Parent or Subsidiary) exceeds $100,000, the Options will
be treated as Non-statutory Stock Options. For purposes of this
Section 5(b), Incentive Stock Options will be taken into account
in the order in which they were granted. The Fair Market Value of
the Shares will be determined as of the time the Option with
respect to the Shares is granted.
(c) Neither the Plan nor any Option or Stock Purchase Right will
confer on any Optionee any right with respect to continuing the
Optionee's relationship as a Service Provider with the Company,
nor will it interfere in any way with his or her right or the
Company's right to terminate the relationship at any time, with
or without cause.
(d) The following limitations will apply to grants of Options:
(i) No Service Provider will be granted, in any fiscal
year of the Company, Options to purchase more than
10% of the total issued and outstanding Shares.
(ii) The foregoing limitations will be adjusted
proportionately in connection with any change in the
Company's capitalization as described in Section 12.
(iii) If an Option is cancelled in the same fiscal year of
the Company in which it was granted (other than in
connection with a transaction described in Section
12), the cancelled Option will be counted against the
limits set forth in subsections (i) and (ii) above.
For this purpose, if the exercise price of an Option
is reduced, the transaction will be treated as a
cancellation of the Option and the grant of a new
Option.
6. Term of Plan. The Plan will become effective on its adoption by the Board. It
will continue in effect for a term of ten (10) years unless terminated at an
earlier date under Section 14 of the Plan.
7. Term of Option. The term of each Option will be stated in the Option
Agreement; provided, however, that the term will be no more than ten (10) years
from the date of grant. In the case of an Incentive Stock Option granted to an
Optionee who, at the time the Option is granted, owns stock representing more
than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the term of the Option will be five (5)
years from the date of grant or a shorter term as may be provided in the Option
Agreement.
8. Option Exercise Price and Consideration.
(a) Option Exercise Price. The per share exercise price for the
Shares to be issued on exercise of an Option will be the price as
is determined by the Administrator, but will be subject to the
following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of
grant of the Option, owns stock representing
more than ten percent (10%) of the voting
power of all classes of stock of the Company
or any Parent or Subsidiary, the exercise
price will be no less than 110% of the Fair
Market Value per Share on the date of grant.
(B) granted to any other Employee, the per Share
exercise price will be no less than 100% of
the Fair Market Value per Share on the date
of grant.
(ii) In the case of a Non-statutory Stock Option, the per
Share exercise price will be determined by the
Administrator. In the case of a Non-statutory Stock
Option intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of
the Code, the per Share exercise price will be no
less than 100% of the Fair Market Value per Share on
the date of grant.
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(iii) Notwithstanding the foregoing, Options may be granted
with a per Share exercise price other than as
required above pursuant to a merger or other
corporate transaction.
(b) Consideration. The consideration to be paid for the Shares to be
issued on exercise of an Option, including the method of payment,
will be determined by the Administrator (and, in the case of an
Incentive Stock Option, will be determined at the time of grant).
The consideration may consist of:
(i) cash,
(ii) check,
(iii) promissory note,
(iv) other Shares which:
(A) in the case of Shares acquired on exercise
of an Option, have been owned by the
Optionee for more than six months on the
date of surrender, and
(B) have a Fair Market Value on the date of
surrender equal to the aggregate exercise
price of the Shares as to which the Option
will be exercised,
(v) consideration received by the Company under a cashless
exercise program implemented by the Company in connection
with the Plan, or
(vi) any combination of the foregoing methods of payment.
In making its determination as to the type of consideration to
accept, the Administrator will consider if acceptance of the
consideration may be reasonably expected to benefit the
Company.
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Shareholder. Any Option
granted under the Plan will be exercisable according to the
terms of the Plan at the times, and under any other conditions
as determined by the Administrator and set forth in the Option
Agreement. Unless the Administrator provides otherwise,
vesting of Options granted to Officers and Directors will be
tolled during any unpaid leave of absence. An Option may not
be exercised for a fraction of a Share.
An Option will be considered exercised when the Company
receives:
(i) written or electronic notice of exercise (under the Option
Agreement) from the person entitled to exercise the Option,
and
(ii) full payment for the Shares with respect to which the
Option is exercised. Full payment may consist of any
consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the
Plan. Shares issued on exercise of an Option will be issued in
the name of the Optionee or, if requested by the Optionee, in
the name of the Optionee and his or her spouse. Until the
Shares are issued (as evidenced by the appropriate entry on
the books of the Company or of a duly authorized transfer
agent of the Company), no right to vote or receive dividends
or any other rights as a shareholder will exist with respect
to the Shares, notwithstanding the exercise of the Option. The
Company will issue (or cause to be issued) the Shares promptly
after the Option is exercised. No adjustment will be made for
a dividend or other right for which the record date is prior
to the date the Shares are issued, except as provided in
Section 12 of the Plan.
Exercise of an Option in any manner will result in a decrease
in the number of Shares thereafter available, both for
purposes of the Plan and for sale under the Option, by the
number of Shares as to which the Option is exercised.
(b) Termination of Relationship as a Service Provider. If an
Optionee ceases to be a Service Provider, the Optionee may
exercise his or her Option within the period of time as is
specified in the Option Agreement to the extent that the
Option is vested on the date of termination (but in no event
later than the expiration of the term of the Option as set
forth in the Option Agreement). In the absence of a
specified time in the Option Agreement, the Option will
remain exercisable for three (3) months following the
Optionee's termination. If, on the date of termination, the
Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option will
revert to the Plan. If, after termination, the Optionee does
not exercise his or her Option within the time specified by
the Administrator, the Option will terminate, and the Shares
covered by the Option will revert to the Plan.
(c) Disability of Optionee. If an Optionee ceases to be a
Service Provider as a result of the Optionee's Disability,
the Optionee may exercise his or her Option within the
period of time as is specified in the Option Agreement to
the extent the Option is vested on the date of termination
(but in no event later than the expiration of the term of
the Option as set forth in the Option Agreement). In the
absence of a specified time in the Option Agreement, the
Option will remain exercisable for twelve (12) months
following the Optionee's termination. If, on the date of
termination, the Optionee is not vested as to his or her
entire Option, the Shares covered by the unvested portion of
the Option will revert to the Plan. If, after termination,
the Optionee does not exercise his or her Option within the
time specified, the Option will terminate, and the Shares
covered by the Option will revert to the Plan.
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(d) Death of Optionee. If an Optionee dies while a Service
Provider, the Option may be exercised within the period of
time as is specified in the Option Agreement to the extent
that the Option is vested on the date of death (but in no
event later than the expiration of the term of the Option as
set forth in the Option Agreement) by the Optionee's estate
or by a person who acquires the right to exercise the Option
by bequest or inheritance. In the absence of a specified
time in the Option Agreement, the Option will remain
exercisable for twelve (12) months following the Optionee's
termination. If, at the time of death, the Optionee is not
vested as to the entire Option, the Shares covered by the
unvested portion of the Option will immediately revert to
the Plan. If the Option is not so exercised within the time
specified, the Option will terminate, and the Shares covered
by the Option will revert to the Plan.
(e) Buyout Provisions. The Administrator may at any time offer
to buy out for a payment in cash or Shares, an Option
previously granted, based on the terms and conditions as the
Administrator will establish and communicate to the Optionee
at the time that the offer is made.
10. Non-Transferability of Options and Stock Purchase Rights. The Options and
Stock Purchase Rights may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee.
11. Stock Purchase Rights.
(a) Rights to Purchase. Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other awards granted
under the Plan and/or cash awards made outside of the Plan.
After the Administrator determines that it will offer Stock
Purchase Rights under the Plan, it will advise the offeree in
writing or electronically of the terms, conditions and
restrictions related to the offer, including the number of
Shares that the person will be entitled to purchase, the price
to be paid, and the time within which the person must accept
the offer. The offer will be accepted by execution of a
Restricted Stock purchase agreement in the form determined by
the Administrator.
(b) Repurchase Option. Unless the Administrator determines
otherwise, the Restricted Stock purchase agreement will grant
the Company a repurchase option exercisable on the voluntary
or involuntary termination of the purchaser's service with the
Company for any reason (including death or disability). The
purchase price for Shares repurchased pursuant to the
Restricted Stock purchase agreement will be the original price
paid by the purchaser and may be paid by cancellation of any
indebtedness of the purchaser to the Company. The repurchase
option will lapse at the rate as the Administrator may
determine.
(c) Other Provisions. The Restricted Stock purchase agreement
will contain any other terms, provisions and conditions not
inconsistent with the Plan as may be determined by the
Administrator in its sole discretion.
(d) Rights as a Shareholder. Once the Stock Purchase Right is
exercised, the purchaser will have rights equivalent to those
of a shareholder and will be a shareholder when his or her
purchase is entered on the records of the duly authorized
transfer agent of the Company. No adjustment will be made for
a dividend or other right for which the record date is prior
to the date the Stock Purchase Right is exercised, except as
provided in Section 12 of the Plan.
12. Adjustments On Changes in Capitalization, Merger or Asset Sale.
(a) Changes in Capitalization. Subject to any required action by
the stockholders of the Company, the number of shares of
Common Stock covered by each outstanding Option or Stock
Purchase Right, and the number of shares of Common Stock
which have been authorized for issuance under the Plan but
as to which no Options or Stock Purchase Rights have yet
been granted or which have been returned to the Plan on
cancellation or expiration of an Option or Stock Purchase
Right, as well as the price per share of Common Stock
covered by each outstanding Option or Stock Purchase Right,
will be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock
resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common
Stock, or any other increase or decrease in the number of
issued shares of Common Stock effected without receipt of
consideration by the Company. The conversion of any
convertible securities of the Company will not be considered
to have been "effected without receipt of consideration."
The adjustment will be made by the Board, whose
determination in that respect will be final, binding and
conclusive. Except as expressly provided in this Plan, no
issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class,
will affect, and no adjustment will be made to, the number
or price of shares of Common Stock subject to an Option or
Stock Purchase Right.
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(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator
will notify the Optionee not less than fifteen (15) days prior
to the proposed action. To the extent it has not been
previously exercised, the Option or Stock Purchase Right will
terminate immediately prior to the consummation of the
proposed action.
(c) Merger. In the event of a merger, sale or reorganization of
the Company with or into any other corporation or
corporations or a sale of all or substantially all of the
assets or outstanding stock of the Company, in which
transaction the Company's stockholders immediately prior to
the transaction own immediately after the transaction less
than 50% of the equity securities of the surviving
corporation or its parent, all Options that have not been
terminated under the Stock Option Agreement that will become
vested within 18 months of the closing date of the merger,
sale or reorganization will be accelerated. In the event of
a merger of the Company with or into another corporation,
each outstanding Option or Stock Purchase Right may be
assumed or an equivalent option or right may be substituted
by the successor corporation or a parent or subsidiary of
the successor corporation. If, in the event, an Option or
Stock Purchase Right is not assumed or substituted, the
Option or Stock Purchase Right will terminate as of the date
of the closing of the merger. For the purposes of this
paragraph, the Option or Stock Purchase Right will be
considered assumed if, following the merger, the Option or
Stock Purchase Right confers the right to purchase or
receive, for each Share of Optioned Stock subject to the
Option or Stock Purchase Right immediately prior to the
merger, the consideration (whether stock, cash, or other
securities or property) received in the merger by holders of
Common Stock for each Share held on the effective date of
the transaction (and if the holders are offered a choice of
consideration, the type of consideration chosen by the
holders of a majority of the outstanding Shares). If the
consideration received in the merger is not solely common
stock of the successor corporation or its Parent, the
Administrator may, with the consent of the successor
corporation, provide for the consideration to be received on
the exercise of the Option or Stock Purchase Right, for each
Share of Optioned Stock subject to the Option or Stock
Purchase Right, to be solely common stock of the successor
corporation or its Parent equal in fair market value to the
per share consideration received by holders of Common Stock
in the merger.
13. Non-Transferability of Options and Stock Purchase Rights. Unless determined
otherwise by the Administrator, an Option or Stock Purchase Right may not be
sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner
other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee. If the
Administrator makes an Option or Stock Purchase Right transferable, the Option
or Stock Purchase Right will contain all additional terms and conditions as the
Administrator considers appropriate.
14. Time of Granting Options and Stock Purchase Rights. The date of grant of an
Option or Stock Purchase Right will, for all purposes, be the date on which the
Administrator makes the determination granting the Option or Stock Purchase
Right, or any other date as is determined by the Administrator. Notice of the
determination will be given to each Service Provider to whom an Option or Stock
Purchase Right is so granted within a reasonable time after the date of the
grant.
15. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend,
alter, suspend or terminate the Plan.
(b) Shareholder Approval. The Board will obtain shareholder
approval of any Plan amendment to the extent necessary and
desirable to comply with Applicable Laws.
(c) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan will impair the rights
of any Optionee, unless mutually agreed otherwise between the
Optionee and the Administrator, which agreement must be in
writing and signed by the Optionee and the Company.
Termination of the Plan will not affect the Administrator's
ability to exercise the powers granted to it with respect to
Options granted under the Plan prior to the date of
termination.
16. Conditions On Issuance of Shares.
(a) Legal Compliance. Shares will not be issued pursuant to the
exercise of an Option unless the exercise of the Option and
the issuance and delivery of the Shares will comply with
Applicable Laws and will be further subject to the approval of
counsel for the Company with respect to such compliance.
(b) Investment Representations. As a condition to the exercise of
an Option, the Administrator may require the person exercising
the Option to represent and warrant at the time of exercise
that the Shares are being purchased only for investment and
without any present intention to sell or distribute the Shares
if, in the opinion of counsel for the Company, such a
representation is required.
17. Inability to Obtain Authority. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
considered by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares the Plan, will relieve the Company of any liability in
respect of the failure to issue or sell the Shares as to which the requisite
authority may not have been obtained.
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18. Reservation of Shares. The Company, during the term of this Plan, will at
all times reserve and keep available a sufficient number of Shares to satisfy
the requirements of the Plan.
19. Shareholder Approval. The Plan will be subject to approval by the
shareholders of the Company within twelve (12) months after the date the Plan is
adopted. Shareholder approval must be obtained in the degree and manner required
under Applicable Laws.
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PHAGE THERAPEUTICS INTERNATIONAL INC.
2000 STOCK PLAN
STOCK OPTION AGREEMENT
Unless otherwise defined in this Stock Option Agreement, the terms defined in
the 2000 Stock Plan will have the same defined meanings in this Stock Option
Agreement.
1. Notice of Stock Option Grant.
Name: "Optionee"
--------------------------
The Optionee has been granted an Option to purchase Common Stock of the Company,
subject to the terms and conditions of the Plan and this Option Agreement, as
follows:
Date of Grant:
--------------------------------
Vesting Commencement Date: "VCD"
-----------------------------------
Exercise Price per Share:
----------------------
Total Number of Shares Granted: Number of shares
----------------
Total Exercise Price: Total Price
-----------------------
Type of Option: X Incentive Stock Option
--- -----------------------------------------------
_________________________ Non-statutory Stock Option
Term/Expiration Date:
------------------------------------
Vesting Schedule:
The vesting schedule will be determined by the Administrator in its
sole discretion.
Termination Period:
This Option will be exercisable for one month after Optionee ceases to
be a Service Provider. On Optionee's death or Disability, this Option
may be exercised for one year after Optionee ceases to be a Service
Provider. In no event may Optionee exercise this Option after the
Term/Expiration Date as provided above.
2. Agreement.
12) Grant of Option. The Plan Administrator of the Company grants
to the Optionee named in the Notice of Grant (the "Optionee"),
an option (the "Option") to purchase the number of Shares set
forth in the Notice of Grant, at the exercise price per Share
set forth in the Notice of Grant (the "Exercise Price"), and
subject to the terms and conditions of the Plan, which is
incorporated by reference. Subject to Section 14(c) of the
Plan, in the event of a conflict between the terms and
conditions of the Plan and this Option Agreement, the terms
and conditions of the Plan will prevail.
If designated in the Notice of Grant as an Incentive Stock
Option ("ISO"), this Option is intended to qualify as an
Incentive Stock Option as defined in Section 422 of the Code.
Nevertheless, to the extent that it exceeds the $100,000 rule
of Code Section 422(d), this Option will be treated as a
Non-statutory Stock Option ("NSO").
13) Exercise of Option.
(i) Right to Exercise. This Option will be exercisable
during its term under the Vesting Schedule set out in
the Notice of Grant and with the applicable
provisions of the Plan and this Option Agreement.
(ii) Method of Exercise. This Option will be exercisable
by delivery of an exercise notice in the form
attached as Exhibit A (the "Exercise Notice") which
will state the election to exercise the Option, the
number of Shares with respect to which the Option is
being exercised, and any other representations and
agreements as may be required by the Company. The
Exercise Notice will be accompanied by payment of the
aggregate Exercise Price as to all Exercised Shares.
This Option will be considered to be exercised on
receipt by the Company of a fully executed Exercise
Notice accompanied by the aggregate Exercise Price.
<PAGE>
No Shares will be issued pursuant to the exercise of
an Option unless the issuance and exercise complies with
Applicable Laws. Assuming compliance, for income tax purposes
the Shares will be considered transferred to the Optionee on
the date on which the Option is exercised with respect to the
Shares.
3. Optionee's Representations. In the event the Shares have not been registered
under the Securities Act of 1933, as amended, at the time this Option is
exercised, the Optionee will, if required by the Company, concurrently with the
exercise of all or any portion of this Option, deliver to the Company his or her
Investment Representation Statement in the form attached hereto as Exhibit B.
4. Lock-Up Period. Optionee hereby agrees that, if so requested by the Company
or any representative of the underwriters (the "Managing Underwriter") in
connection with any registration of the offering of any securities of the
Company under the Securities Act, Optionee will not sell or otherwise transfer
any Shares or other securities of the Company during the 180-day period (or such
other period as may be requested in writing by the Managing Underwriter and
agreed to in writing by the Company) (the "Market Standoff Period") following
the effective date of a registration statement of the Company filed under the
Securities Act. Such restriction will apply only to the first registration
statement of the Company to become effective under the Securities Act that
includes securities to be sold on behalf of the Company to the public in an
underwritten public offering under the Securities Act. The Company may impose
stop-transfer instructions with respect to securities subject to the foregoing
restrictions until the end of such Market Standoff Period.
5. Method of Payment. Payment of the aggregate Exercise Price will be by any of
the following, or a combination of the following, at the election of the
Optionee:
(a) cash or check;
(b) consideration received by the Company under a formal
cashless exercise program adopted by the Company in
connection with the Plan; or
(c) surrender of other Shares which:
(i) in the case of Shares acquired on exercise of an option,
have been owned by the Optionee for more than six (6) months
on the date of surrender, and
(ii) have a Fair Market Value on the date of surrender
equal to the aggregate Exercise Price of the
Exercised Shares.
6. Restrictions on Exercise. This Option may not be exercised until such time as
the Plan has been approved by the shareholders of the Company, or if the
issuance of the Shares on the exercise or the method of payment of consideration
for the shares would constitute a violation of any Applicable Law.
7. Non-Transferability of Option. This Option may not be transferred in any
manner otherwise than by will or by the laws of descent or distribution and may
be exercised during the lifetime of Optionee only by Optionee. The terms of the
Plan and this Option Agreement will be binding on the executors, administrators,
heirs, successors and assigns of the Optionee.
8. Term of Option. This Option may be exercised only within the term set out in
the Notice of Grant, and may be exercised during the term only under the Plan
and the terms of this Option.
9. Tax Consequences. Set forth below is a brief summary as of the date of this
Option of some of the federal tax consequences of exercise of this Option and
disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX
LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX
ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
(a) Exercise of NSO. There may be a regular federal income tax
liability on the exercise of an NSO. The Optionee will be
treated as having received compensation income (taxable at
ordinary income tax rates) equal to the excess, if any, of
the Fair Market Value of the Shares on the date of exercise
over the Exercise Price. If Optionee is an Employee or a
former Employee, the Company will be required to withhold
from Optionee's compensation or collect from Optionee and
pay to the applicable taxing authorities an amount in cash
equal to a percentage of this compensation income at the
time of exercise, and may refuse to honor the exercise and
refuse to deliver Shares if the withholding amounts are not
delivered at the time of exercise.
(b) Exercise of ISO. If this Option qualifies as an ISO, there
will be no regular federal income tax liability on the
exercise of the Option, although the excess, if any, of the
Fair Market Value of the Shares on the date of exercise over
the Exercise Price will be treated as an adjustment to the
alternative minimum tax for federal tax purposes and may
subject the Optionee to the alternative minimum tax in the
year of exercise.
<PAGE>
(c) Disposition of Shares. In the case of an NSO, if Shares are
held for not less than one year, any gain realized on
disposition of the Shares will be treated as long-term
capital gain for federal income tax purposes. In the case of
an ISO, if Shares transferred pursuant to the Option are
held for not less than one year after exercise and of not
less than two years after the Date of Grant, any gain
realized on disposition of the Shares will also be treated
as long-term capital gain for federal income tax purposes.
If Shares purchased under an ISO are disposed of within one
year after exercise or two years after the Date of Grant,
any gain realized on such disposition will be treated as
compensation income (taxable at ordinary income rates) to
the extent of the difference between the Exercise Price and
the lesser of:
(i) the Fair Market Value of the Shares on the date of exercise,
or
(ii) the sale price of the Shares. Any additional gain
will be taxed as capital gain, short-term or
long-term depending on the period that the ISO Shares
were held.
(d) Notice of Disqualifying Disposition of ISO Shares. If the
Option granted to Optionee is an ISO, and if Optionee sells or
otherwise disposes of any of the Shares acquired pursuant to
the ISO on or before the later of:
(i) the date two years after the Date of Grant, or
(ii) the date one year after the date of exercise, the
Optionee will immediately notify the Company in
writing of such disposition.
Optionee agrees that Optionee may be subject to income tax
withholding by the Company on the compensation income
recognized by the Optionee.
10. Entire Agreement; Governing Law. The Plan is incorporated by reference. The
Plan and this Option Agreement constitute the entire agreement of the parties
and supersede in their entirety all prior undertakings and agreements of the
Company and Optionee with respect to Options and Stock Purchase Rights, and may
not be modified adversely to the Optionee's interest except by means of a
writing signed by the Company and Optionee. This agreement is governed by the
internal substantive laws but not the choice of law rules of Florida.
11. No Guarantee of Continued Service. OPTIONEE ACKNOWLEDGES AND AGREES THAT THE
VESTING OF SHARES PURSUANT TO THE APPLICABLE VESTING SCHEDULE IS EARNED ONLY BY
CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT
OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER).
OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS
CONTEMPLATED HEREUNDER AND THE ATTACHED VESTING SCHEDULE DO NOT CONSTITUTE AN
EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE
VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND WILL NOT INTERFERE IN ANY WAY
WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE OPTIONEE'S
RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.
<PAGE>
Optionee acknowledges receipt of a copy of the Plan and represents that he or
she is familiar with the terms and provisions of the Plan, and accepts this
Option subject to all of the terms and provisions of the Plan. Optionee has
reviewed the Plan and this Option in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Option and fully
understands all provisions of the Option. Optionee agrees to accept as binding,
conclusive and final all decisions or interpretations of the Administrator on
any questions arising under the Plan or this Option. Optionee further agrees to
notify the Company on any change in the residence address indicated below.
OPTIONEE: PHAGE THERAPEUTICS INTERNATIONAL INC.
--------------------------------- --------------------------------
Signature By: _____________________
------------------------------------------
Print Name Title
---------------------------------
Social Security Number
Residential Address:
CONSENT OF SPOUSE
The undersigned spouse of Optionee has read and approves the terms and
conditions of the Plan and this Option Agreement. In consideration of the
Company's granting his or her spouse the right to purchase Shares as set forth
in the Plan and this Option Agreement, the undersigned agrees to be irrevocably
bound by the terms and conditions of the Plan and this Option Agreement and
further agrees that any community property interest will be similarly bound. The
undersigned appoints the undersigned's spouse as attorney-in-fact for the
undersigned with respect to any amendment or exercise of rights under the Plan
or this Option Agreement.
---------------------------------
Spouse of Optionee
<PAGE>
EXHIBIT A
2000 STOCK PLAN
EXERCISE NOTICE
Phage Therapeutics International, Inc.
22116 23rd Drive S.E.
Bothwll, Washington 98201
1. Exercise of Option. Effective as of today, ___________, 20__, the
undersigned ("Optionee") elects to exercise Optionee's option to purchase
_________ shares of the Common Stock (the "Shares") of Phage Therapeutics
Interntational Inc. (the "Company") under and pursuant to the 2000 stock plan
(the "Plan") and the stock option agreement dated ________, 20__ (the "Option
Agreement"). The purchase price for the Shares will be $________, as required by
the Option Agreement.
2. Delivery of Payment. Purchaser has delivered to the Company the full
purchase price of the Shares.
3. Representations of Optionee. Optionee acknowledges that Optionee has
received, read and understood the Plan and the Option Agreement and agrees to
abide by and be bound by their terms and conditions.
4. Rights as Shareholder. Until the issuance of the Shares (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive dividends
or any other rights as a shareholder will exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. The Shares will be issued to
the Optionee as soon as practicable after the Option is exercised. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date of issuance except as provided in Section 12 of the Plan.
5. Tax Consultation. Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee's purchase or disposition of
the Shares. Optionee represents that Optionee has consulted with any tax
consultants Optionee considers advisable in connection with the purchase or
disposition of the Shares and that Optionee is not relying on the Company for
any tax advice.
6. Restrictive Legends and Stop-Transfer Orders.
(a) Legends. Optionee understands and agrees that the Company will
cause the legends set forth below or legends substantially
equivalent thereto, to be placed on any certificate(s)
evidencing ownership of the Shares together with any other
legends that may be required by the Company or by state or
federal securities laws:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"ACT") AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER THE ACT OR, IN THE OPINION OF
COMPANY COUNSEL SATISFACTORY TO THE ISSUER OF THESE
SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR
HYPOTHECATION IS IN COMPLIANCE THEREWITH.
(b) Stop-Transfer Notices. Optionee agrees that, in order to
ensure compliance with the restrictions referred to herein,
the Company may issue appropriate "stop transfer" instructions
to its transfer agent, if any, and that, if the Company
transfers its own securities, it may make appropriate
notations to the same effect in its own records.
(c) Refusal to Transfer. The Company will not be required:
(i) to transfer on its books any Shares that have been sold or
otherwise transferred in violation of any of the provisions
of this Exercise Notice or
(ii) to treat as owner of such Shares or to accord the
right to vote or pay dividends to any purchaser or
other transferee to whom such Shares will have been
so transferred.
8. Successors and Assigns. The Company may assign any of its rights
under this Exercise Notice to single or multiple assignees, and this Exercise
Notice shall inure to the benefit of the successors and assigns of the Company.
Subject to the restrictions on transfer herein set forth, this Exercise Notice
shall be binding on Optionee and his or her heirs, executors, administrators,
successors and assigns.
<PAGE>
9. Interpretation. Any dispute regarding the interpretation of this
Exercise Notice will be submitt ed by Optionee or by the Company immediately to
the Administrator which will review the dispute at its next regular meeting. The
resolution of a dispute by the Administrator will be final and binding on all
parties.
10. Entire Agreement/Governing Law. The Plan and Option Agreement are
incorporated by reference. This Exercise Notice, the Plan, the Option Agreement
and the Investment Representation Statement constitute the entire agreement of
the parties concerning Options and Stock Purchase Rights and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee
concerning Options and Stock Purchase Rights, and may not be modified adversely
to the Optionee's interest except by means of a writing signed by the Company
and Optionee. This Exercise Notice is governed by the internal substantive laws
but not the choice of law rules, of Florida.
Submitted By: Accepted By:
OPTIONEE: PHAGE THERAPEUTICS INTERNATIONAL INC.
--------------------------------- ---------------------------------
Signature By:_______________________
_________________________________
-------------------------------------
Print Name Title
---------------------------------
Social Security Number
Date Received: _____________________
<PAGE>
EXHIBIT B
INVESTMENT REPRESENTATION STATEMENT
OPTIONEE:
-------------------------------------------
COMPANY: Phage Therapeutics International Inc.
SECURITY: Common Stock
--------------------------------------------------
AMOUNT:
---------------------------------------
DATE: _______________________________
In connection with the purchase of the above-listed Securities, the undersigned
Optionee represents to the Company the following:
1. Possesses Knowledge About Company. Optionee is aware of the Company's
business affairs and financial condition and has acquired sufficient
information about the Company to reach an informed and knowledgeable
decision to acquire the Securities.
2. Investment Purpose. Optionee is acquiring these Securities for investment
for Optionee's own account only and not with a view to, or for resale in
connection with, any "distribution" thereof within the meaning of the
Securities Act of 1933, as amended (the "Securities Act").
3. Restricted Securities. Optionee acknowledges and understands that the
Securities constitute "restricted securities" under the Securities Act and
have not been registered under the Securities Act in reliance on a specific
exemption therefrom, which exemption depends on, among other things, the
bona fide nature of Optionee's investment intent as expressed herein. In
this connection, Optionee understands that, in the view of the Securities
and Exchange Commission, the statutory basis for such exemption may be
unavailable if Optionee's representation was predicated solely on a present
intention to hold these Securities for the minimum capital gains period
specified under tax statutes, for a deferred sale, for or until an increase
or decrease in the market price of the Securities, or for a period of one
year or any other fixed period in the future.
4. Securities May be Subject to Indefinite Hold Period. Optionee further
understands that the Securities must be held indefinitely unless they
are subsequently registered under the Securities Act or an exemption
from such registration is available. Optionee further acknowledges and
understands that the Company is under no obligation to register the
Securities. Optionee understands that the certificate evidencing the
Securities will be imprinted with a legend which prohibits the transfer
of the Securities unless they are registered or such registration is
not required in the opinion of counsel satisfactory to the Company, a
legend prohibiting their transfer as required under applicable state
securities laws.
5. Rule 701 and Rule 144. Optionee is familiar with the provisions of Rule 701
and Rule 144, each promulgated under the Securities Act, which, in
substance, permit limited public resale of "restricted securities"
acquired, directly or indirectly from the issuer thereof, in a non-public
offering subject to the satisfaction of certain conditions. Rule 701
provides that if the issuer qualifies under Rule 701 at the time of the
grant of the Option to the Optionee, the exercise will be exempt from
registration under the Securities Act. In the event the Company becomes
subject to the reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, ninety (90) days thereafter (or such
longer period as any market stand-off agreement may require) the Securities
exempt under Rule 701 may be resold, subject to the satisfaction of certain
of the conditions specified by Rule 144, including: (a) the resale being
made through a broker in an unsolicited "broker's transaction" or in
transactions directly with a market maker (as said term is defined under
the Securities Exchange Act of 1934); and, in the case of an affiliate, (b)
the availability of certain public information about the Company, (c) the
amount of Securities being sold during any three month period not exceeding
the limitations specified in Rule 144(e), and (d) the timely filing of a
Form 144, if applicable.
<PAGE>
In the event that the Company does not qualify under Rule 701 at the
time of grant of the Option, then the Securities may be resold in
certain limited circumstances subject to the provisions of Rule 144,
which requires the resale to occur not less than one year after the
later of the date the Securities were sold by the Company or the date
the Securities were sold by an affiliate of the Company, within the
meaning of Rule 144; and, in the case of acquisition of the Securities
by an affiliate, or by a non-affiliate who subsequently holds the
Securities less than two years, the satisfaction of the conditions set
forth in sections (a), (b), (c) and (d) of the paragraph immediately
above.
6. Other Registration Exemption Not Assured. Optionee further understands that
in the event all of the applicable requirements of Rule 701 or 144 are not
satisfied, registration under the Securities Act, compliance with
Regulation A, or some other registration exemption will be required; and
that, notwithstanding the fact that Rules 144 and 701 are not exclusive,
the Staff of the Securities and Exchange Commission has expressed its
opinion that persons proposing to sell private placement securities other
than in a registered offering and otherwise than pursuant to Rules 144 or
701 will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales, and that
such persons and their respective brokers who participate in such
transactions do so at their own risk. Optionee understands that no
assurances can be given that any such other registration exemption will be
available in such event.
OPTIONEE:
---------------------------------
Signature
Print Name
---------------------------------
Social Security Number
