<PAGE> 1
As filed with the Securities and Exchange Commission on June 9, 1995
File No. 33-_______
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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VIRAGEN, INC.
(Exact name of issuer as specified in its charter)
Delaware 59-2101668
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2343 West 76th Street
Hialeah, Florida 33016
(Address of principal executive offices) (Zip Code)
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VIRAGEN, INC. 1995 STOCK OPTION PLAN
EMPLOYMENT CONTRACTS WITH KEY EXECUTIVES
STOCK OPTION AGREEMENTS WITH DIRECTORS
(Full title of the plan)
---------------
Gerald Smith
2343 West 76th Street
Hialeah, Florida 33016
(305) 557-6000
(Name and address of agent for service)
Copy to:
Jim Schneider, Esq.
Atlas, Pearlman, Trop & Borkson, P.A.
200 East Las Olas Boulevard, Suite 1900
Fort Lauderdale, Florida 33301
(305) 763-1200
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===========================================================================
Proposed Proposed
maximum maximum
offering aggregate Amount of
Title of securities Amount to be price per offering registration
to be registered registered(1) share(1) price(1) fee (1)
===========================================================================
<S> <C> <C> <C> <C>
Common Stock
($.01 par value) 8,242,847 shares $.857634 $7,069,346 $2,438
===========================================================================
</TABLE>
(1) Pursuant to Rule 457(h), the maximum offering price was calculated
based upon the exercise price as to outstanding options covering
3,205,000 shares (weighted average exercise price of $0.63 per share),
and as to the remaining 5,037,847 shares at the closing price of the
Company's Common Stock on June 6, 1995 ($1.00 closing price).
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VIRAGEN, INC.
CROSS REFERENCE SHEET REQUIRED BY ITEM 501(b) OF REGULATION S-K
<TABLE>
<CAPTION>
Form S-8 Item Number
and Caption Caption in Prospectus
-------------------- ---------------------
<S> <C> <C>
1. Forepart of Registration State- Facing Page of Registration
ment and Outside Front Cover Statement and Cover Page of
Page of Prospectus Prospectus
2. Inside Front and Outside Back Inside Cover Page of Pro-
Cover Pages of Prospectus spectus and Outside Cover
Page of Prospectus
3. Summary Information, Risk Fac- Not Applicable
tors and Ratio of Earnings to
Fixed Charges
4. Use of Proceeds Not Applicable
5. Determination of Offering Price Not Applicable
6. Dilution Not Applicable
7. Selling Security Holders Sales by Selling Security
Holders
8. Plan of Distribution Cover Page of Prospectus
and Sales by Selling
Security Holders
9. Description of Securities to be Description of Securities;
Registered Viragen, Inc. 1995 Stock
Option Plan, Employment
Contracts with Key
Executives and Stock
Option Agreements with
Directors
10. Interests of Named Experts and Legal Matters
Counsel
11. Material Changes Not Applicable
12. Incorporation of Certain Infor- Incorporation of Certain
mation by Reference Documents by Reference
13. Disclosure of Commission Posi- Indemnification
tion on Indemnification for
Securities Act Liabilities
</TABLE>
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PROSPECTUS
VIRAGEN, INC.
8,242,847 SHARES OF COMMON STOCK
($.01 PAR VALUE)
Issued Pursuant to the
Viragen, Inc. 1995 Stock Option Plan, Employment Contracts
with Key Executives and Stock Option
Agreements with Directors
This Prospectus is part of a Registration Statement which registers an
aggregate of 8,242,847 shares of Common Stock, $.01 par value (such shares
being collectively referred to as the "Shares") of Viragen, Inc. (the "Company"
or "Viragen") which may be issued, as set forth herein, to officers, directors,
key employees and consultants of the Company pursuant to (i) the exercise of
non-qualified or incentive stock options to purchase up to 7,205,000 shares of
Common Stock under and in accordance with the Viragen, Inc. 1995 Stock Option
Plan (the "Plan") (the Plan covers the issuance of up to 4,000,000 shares of
Common Stock), and separate stock option agreements with employees and
directors (the "Option Agreements") (such options being collectively referred
to as "Options") or (ii) shares of Common Stock which have been issued, as set
forth herein, to certain key executives and/or directors of the Company
pursuant to written employment agreements (the "Agreements") providing for the
issuance of the shares. All of the Options or Shares were granted or issued to
such officers, directors and key employees pursuant to individual written
options or employment agreements. Such selling stockholders may sometimes
hereafter be collectively referred to as the "Selling Security Holders." The
Company has been advised by the Selling Security Holders that they may sell all
or a portion of the Shares from time to time in the over-the-counter market, in
negotiated transactions, directly or through brokers or otherwise, and that
such shares will be sold at market prices prevailing at the time of such sales
or at negotiated prices, and the Company will not receive any proceeds from
such sales except upon exercise of the Options.
No person has been authorized by the Company to give any information
or to make any representation other than as contained in this Prospectus, and
if given or made, such information or representation must not be relied upon as
having been authorized by the Company. Neither the delivery of this Prospectus
nor any distribution of the Shares issuable upon exercise of the Options or
under the terms of the Agreements shall, under any circumstances, create any
implication that there has been no change in the affairs of the Company since
the date hereof.
---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
---------------
This Prospectus does not constitute an offer to sell securities in any
state to any person to whom it is unlawful to make such offer in such state.
The date of this Prospectus is June 9, 1995.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Reports, proxy
statements and other information filed with the Commission can be inspected and
copied at the public reference facilities of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549. Copies of this material can also be
obtained at prescribed rates from the Public Reference Section of the
Commission at its principal office at 450 Fifth Street, N.W., Washington, D.C.
20549. The Company's Common Stock is traded on the OTC Bulletin Board under
the symbol "VRGN."
The Company has filed with the Commission a Registration Statement on
Form S-8 (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Act"), with respect to an aggregate of 8,242,847 shares of the
Company's Common Stock, issued or to be issued to officers, directors, key
employees or consultants to the Company under the Plan, the Option Agreements
or the Agreements, as the case may be. This Prospectus, which is Part I of the
Registration Statement, omits certain information contained in the Registration
Statement. For further information with respect to the Company and the shares
of the Common Stock offered by this Prospectus, reference is made to the
Registration Statement, including the exhibits thereto. Statements in this
Prospectus as to any document are not necessarily complete, and where any such
document is an exhibit to the Registration Statement or is incorporated by
reference herein, each such statement is qualified in all respects by the
provisions of such exhibit or other document, to which reference is hereby
made, for a full statement of the provisions thereof. A copy of the
Registration Statement, with exhibits, may be obtained from the Commission's
office in Washington, D.C. (at the above address) upon payment of the fees
prescribed by the rules and regulations of the Commission, or examined there
without charge.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Securities and
Exchange Commission are incorporated herein by reference and made a part
hereof:
1. The Company's Annual Report on Form 10-K for the year ended
June 30, 1994;
2. The Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1994; and
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3. The Company's Quarterly Report on Form 10-QSB/A-1 for the
quarter ended December 31, 1994.
4. The Company's Quarterly Report on Form 10-QSB for the quarter
ended March 31, 1995.
All reports and documents filed by the Company pursuant to Section 13,
14 or 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part hereof from the respective
date of filing of such documents. Any statement incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document, which also is or is deemed to be incorporated by
reference herein, modifies or supersedes such statement. Any statement
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute part of this Prospectus.
The Company hereby undertakes to provide without charge to each
person, including any beneficial owner, to whom a copy of the Prospectus has
been delivered, on the written request of any such person, a copy of any or all
of the documents referred to above which have been or may be incorporated by
reference in this Prospectus, other than exhibits to such documents. Written
requests for such copies should be directed to Corporate Secretary, Viragen,
Inc., 2343 West 76th Street, Hialeah, Florida 33016, telephone (305) 557-6000.
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<PAGE> 7
THE COMPANY
Viragen, Inc. was organized in December 1980 to engage in research,
development and manufacture of certain immunological products for commercial
application, particularly human leukocyte interferon, for antiviral and
therapeutic applications and as anticancer agents. Viragen's primary product
(the "Product") is a natural human leukocyte alpha interferon ("Natural
Interferon"). Natural Interferon is a protein substance that inhibits
malignant cell growth without materially interfering with normal cells.
Natural Interferon stimulates and modulates the human immune system and, in
addition, impedes the growth and propagation of various viruses. The Product
is a natural product produced from human white blood cells. Alpha LeukoferonTM
is the trade name for Viragen's Product in injectable form. The Company's
Product has not been approved by the United States Food and Drug Administration
("FDA") and there can be no assurances that approval of the Product will be
obtained at any time in the future.
Viragen has been granted an investigatory license by the Florida
Department of Health and Rehabilitative Services ("HRS") under Florida Statute
499 of the Florida Drug and Cosmetic Act to conduct Investigation Study
Programs (hereinafter referred to as the "499 Program") and distribute the
Product to physicians for use in the treatment of Florida residents with
multiple sclerosis ("MS"), HIV/AIDS, AIDS-Related Complex and Kaposi's Sarcoma.
Viragen initially obtained approval for use of the Product through approved
investigational protocols in 1983 under Florida Statute 402.36 (Cancer
Therapeutic Act), the predecessor to Florida Statute 499. In 1984, Florida
Statute 499.018 was amended to include the Company's protocols and Florida
Statute 402.36 was repealed. Under its HRS investigatory license, Viragen has
been able to distribute the Product to authorized Florida physicians for use
in treating their Florida patients under approved study protocols. Presently,
the primary application for Viragen's Product is the treatment of MS. Through
March 31, 1995, the Company has received $1,083,317 in revenues under such HRS
investigatory license.
The Company intends to seek to obtain FDA approvals for various uses
of the Product in the future. Such approval is expected to require several
years of clinical trials and substantial additional funding. To date, Viragen
has not distributed the Product other than for research and pursuant to its
investigatory license, and until May 1993, Viragen had not actively operated
due to insufficient funds. Viragen expects to concentrate its efforts in
preparing, filing and processing its applications and obtaining approvals for
its Product from the FDA and the European Union ("EU"). The Company has
assembled an advisory committee consisting of scientists, medical researchers
and clinicians to assist the Company in its application to the FDA and the EU.
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<PAGE> 8
In December 1994, the Company received notification from the Florida
Health and Rehabilitative Services to postpone enrollment of new patients under
its 499 Program until such time as the Company has provided certain
administrative reports to the HRS and satisfied certain FDA inspection-related
comments concerning the Company's manufacturing processes and facility. On
March 17, 1995, the Company received further notice from HRS requesting that
Viragen demonstrate that its production technology complies with FDA current
Good Manufacturing Practices ("cGMP") and for the Company to postpone the
enrollment of new patients under the 499 Program until the Company has
demonstrated such compliance. The HRS also proposes to require that existing
patients currently receiving treatment with the Company's Product or enrolled
in the Company's 499 Program acknowledge their recognition of possible
deficiencies relative to cGMP.
The Company is continuing to provide its Products to patients
currently receiving treatment or enrolled in the Company's 499 Program
consistent with existing treatment protocols and reporting procedures
established for the 499 Program. The Company believes it has since obtained
substantial compliance with cGMP requirements (i.e., sufficient conformance
with cGMP requirements to permit continued distribution of the Product under
the 499 Program) and has requested a hearing from the HRS for purposes of
substantiating its compliance, which hearing is expected to be held prior to
June 30, 1995. There can be no assurances that the Company will be successful
in substantiating that its 499 Program is in conformance with cGMP or that the
Company will be authorized to enroll new patients in its 499 Program as a
result of its submissions at such hearing. However, the Company does not
believe that the results of the HRS hearing will affect its capacity to provide
its Product to patients currently enrolled in its 499 Program. While management
believes that the postponement of enrollment of new patients will limit the
revenues that it would currently be eligible to receive under the 499 Program,
such postponement will not affect the undertaking of clinical trials and the
approval process for the Company's Product following submission to the FDA and
the EU, which submission will represent the focus of the Company's efforts at
the present time.
Viragen's administrative office and manufacturing facilities are
located at 2343 West 76th Street, Hialeah, Florida 33016 (Telephone No.
305/557-6000; Facsimile No. 305/364-8158).
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<PAGE> 9
VIRAGEN, INC. 1995 STOCK OPTION PLAN
EMPLOYMENT CONTRACTS WITH EXECUTIVES
STOCK OPTION AGREEMENTS WITH DIRECTORS
VIRAGEN, INC. 1995 STOCK OPTION PLAN
INTRODUCTION
The following descriptions summarize certain provisions of the Plan
and the form of agreements to be entered into by recipients of options
thereunder. Such summaries do not purport to be complete and are qualified by
reference to the full text of the Plan and form of agreement. A copy of the
Plan is on file as an exhibit to the Registration Statement of which this
Prospectus is a part. Each person receiving an option under the Plan should
read the Plan and related option agreement in its entirety.
The Company's 1995 Stock Option Plan was adopted by the Board of
Directors on May 15, 1995, effective as of that date. Under the Plan, the
Company has reserved an aggregate of 4,000,000 shares of Common Stock for
issuance pursuant to options granted under the Plan ("Plan Options"). The
purpose of the Plan is to encourage stock ownership by officers, directors, key
employees and consultants of the Company, and to give such persons a greater
personal interest in the success of the Company's business and an added
incentive to continue to advance and contribute to the Company. The
Compensation Committee of the Board of Directors (the "Committee") of the
Company administers the Plan including, without limitation, the selection of
the persons who will be granted Plan Options under the Plan, the type of Plan
Options to be granted, the number of shares subject to each Plan Option and the
Plan Option price.
Plan Options granted under the Plan may either be options qualifying
as incentive stock options ("Incentive Options") under Section 422 of the
Internal Revenue Code of 1986, as amended, or options that do not so qualify
("Non-Qualified Options"). In addition, the Plan also allows for the inclusion
of a reload option provision ("Reload Option"), which permits an eligible
person to pay the exercise price of the Plan Option with shares of Common Stock
owned by the eligible person and receive a new Plan Option to purchase shares
of Common Stock equal in number to the tendered shares. As discussed
hereafter, any Incentive Option granted under the Plan must provide for an
exercise price of not less than 100% of the fair market value of the underlying
shares on the date of such grant, but the exercise price of any Incentive
Option granted to an eligible employee owning more than 10% of the outstanding
Common Stock of the Company must not be less than 110% of such fair market
value as determined on the date of the grant. The term of each Plan Option and
the manner in which it may be exercised is determined by the Board of Directors
or the Committee, provided
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that no Plan Option may be exercisable more than 10 years after the date of its
grant and, in the case of an Incentive Option granted to an eligible employee
owning more than 10% of the Common Stock, no more than five years after the
date of the grant.
The Plan was authorized by the Board of Directors on May 15, 1995, and
the Company will subsequently seek approval and ratification of the Plan by the
stockholders of the Company at a meeting to be convened subsequently.
ELIGIBILITY
Officers, directors, key employees and consultants of the Company and
its subsidiaries are eligible to receive Non-Qualified Options under the
Viragen, Inc. 1995 Stock Option Plan. Only officers, directors and employees
of the Company who are employed by the Company or by any subsidiary thereof are
eligible to receive Incentive Options.
ADMINISTRATION
The Plan is administered by the Company's Compensation Committee of
the Board of Directors. The Committee determines from time to time those
officers, directors, key employees and consultants of the Company or any of its
subsidiaries to whom Plan Options are to be granted, the terms and provisions
of the respective option agreements, the time or times at which such Plan
Options shall be granted, the type of Plan Options to be granted, the dates
such Plan Options become exercisable, the number of shares subject to each Plan
Option, the purchase price of such shares and the form of payment of such
purchase price. All other questions relating to the administration of the
Plan, and the interpretation of the provisions thereof and of the related
option agreements, are resolved by the Committee.
SHARES SUBJECT TO AWARDS
The Company has reserved 4,000,000 of its authorized but unissued
shares of Common Stock or shares maintained in the treasury of the Company for
issuance under the Plan, and a maximum of 4,000,000 shares may be issued
thereunder. In connection with the adoption and approval of the Plan, the
Company's Board of Directors resolved that the aggregate number of total shares
of the Company's Common Stock issuable under the Plan may not exceed 4,000,000
shares (subject to adjustment in the event of certain changes in the Company's
capitalization) without further action by the Company's Board of Directors and
stockholders, as required. Except for such limitation on the aggregate number
of shares issuable under the Plan, there is no maximum or minimum number of
shares of Common Stock as to which a Plan Option may be granted to
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any person. Shares used for Plan Options may be authorized and unissued shares
or shares reacquired by the Company, including shares purchased in the open
market. Shares covered by Plan Options which terminate unexercised will again
become available for additional Plan Options, without decreasing and maximum
number of shares issuable under the Plan, although such shares may also be used
by the Company for other purposes.
The Plan provides that, if the Company's outstanding shares are
increased, decreased, exchanged or otherwise adjusted due to a share dividend,
forward or reverse share split, recapitalization, reorganization, merger,
consolidation, combination or exchange of shares, an appropriate and
proportionate adjustment shall be made in the number or kind of shares subject
to the Plan or subject to unexercised Plan Options and in the purchase price
per share under such Plan Options. Any adjustment, however, does not change
the total purchase price payable for the shares subject to outstanding Plan
Options. The Board of Directors shall have the right to accelerate the
exercise provisions of any outstanding Plan Option in the event of a tender
offer for the Company's shares, the adoption of a plan of merger under which
all the shares of the Company would be eliminated, a sale of substantially all
of the Company's assets or business or the liquidation or dissolution of the
Company.
TERMS OF EXERCISE
The Plan provides that the Plan Options granted thereunder shall be
exercisable from time to time in whole or in part, unless otherwise specified
in the agreement representing the Plan Options or by the Committee or by the
Board of Directors. Each Plan Option may be exercised in whole or in part at
any time during the period from the date of the grant until the end of the
period covered by the Plan Option period.
The Plan provides that, with respect to Incentive Stock Options, the
aggregate fair market value (determined as of the time the option is granted)
of the shares of Common Stock, with respect to which Incentive Stock Options
are first exercisable by any option holder during any calendar year (including
all incentive stock option plans of the Company, any parent or any subsidiaries
which are qualified under Section 422 of the Internal Revenue Code of 1986)
shall not exceed $100,000.
EXERCISE PRICE
The purchase price for shares subject to Incentive Stock Options must
be at least 100% of the fair market value of the Company's Common Stock on the
date the option is granted, except that the purchase price must be at least
110% of the fair market value in the case of an Incentive Stock Option granted
to a person
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who is a "10% stockholder." A "10% stockholder" is a person who owns (within
the meaning of Section 422(b)(6) of the Internal Revenue Code of 1986) at the
time the Incentive Stock Option is granted, shares possessing more than 10% of
the total combined voting power of all classes of the outstanding shares of the
Company, any parent or any subsidiaries. The Plan provides that fair market
value shall be determined by the Board or the Committee in accordance with
procedures which it may from time to time establish. If the purchase price is
paid with consideration other than cash, the Board or the Committee shall
determine the fair value of such consideration to the Company in monetary
terms.
The exercise price of Non-Qualified Options shall be determined by the
Board of Directors or the Committee.
The per share purchase price of shares subject to Plan Options granted
under the Plan may be adjusted in the event of certain changes in the Company's
capitalization, but any such adjustment shall not change the total purchase
price payable upon the exercise in full of Plan Options granted under the Plan.
MANNER OF EXERCISE
Plan Options are exercisable under the Plan by delivery of written
notice to the Company stating the number of shares with respect to which the
Plan Option is being exercised, together with full payment of the purchase
price therefor. Payment shall be in cash, checks, certified or bank cashier's
checks, shares of Common Stock or in such other form or combination of forms
which shall be acceptable to the Board of Directors or the Committee, provided
that any loan or guarantee by the Company of the purchase price may only be
made upon resolution of the Board or Committee that such loan or guarantee is
reasonably expected to benefit the Company.
OPTION PERIOD
All Incentive Stock Options shall expire on or before the tenth (10th)
anniversary of the date the option is granted except as limited above.
Non-Qualified Options shall expire ten (10) years and one (1) day from the date
of grant unless otherwise provided under the terms of the option grant.
TERMINATION
All Plan Options are nonassignable and nontransferable, except by will
or by the laws of descent and distribution, and during the lifetime of the
optionee, may be exercised only by such optionee. If an optionee's employment
is terminated for any reason, other than his death or disability or termination
for cause, or if an optionee is not an employee of the Company but is a member
of the
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Company's Board of Directors and his service as a director is terminated for
any reason, other than death or disability, the Plan Option granted to him
shall lapse to the extent unexercised on the earlier of the expiration date or
30 days following the date of termination. If the optionee dies during the
term of his employment, the Plan Option granted to him shall lapse to the
extent unexercised on the earlier of the expiration date of the Plan Option or
the date one year following the date of the optionee's death. If the optionee
is permanently and totally disabled within the meaning of Section 22(c)(3) of
the Internal Revenue Code of 1986, the Plan Option granted to him lapses to the
extent unexercised on the earlier of the expiration date of the option or one
year following the date of such disability.
MODIFICATION AND TERMINATION OF PLANS
The Board of Directors or Committee may amend, suspend or terminate
the Plan at any time, except that no amendment shall be made which (i)
increases the total number of shares subject to the Plan or changes the minimum
purchase price therefor (except in either case in the event of adjustments due
to changes in the Company's capitalization), (ii) affects outstanding Plan
Options or any exercise right thereunder, (iii) extends the term of any Plan
Option beyond ten years, or (iv) extends the termination date of the Plan.
Unless the Plan shall theretofore have been suspended or terminated by the
Board of Directors, the Plan shall terminate on May 15, 2005. Any such
termination of the Plan shall not affect the validity of any Plan Options
previously granted thereunder.
FEDERAL INCOME TAX EFFECTS
The following discussion applies to the Viragen, Inc. 1995 Stock
Option Plan and is based on federal income tax laws and regulations in effect
on March 31, 1995. It does not purport to be a complete description of the
federal income tax consequences of the Plan, nor does it describe the
consequences of state, local or foreign tax laws which may be applicable.
Accordingly, any person receiving a grant under the Plan should consult with
his own tax adviser.
The Plan is not subject to the provisions of the Employee Retirement
Income Security Act of 1974 and is not qualified under Section 401(a) of the
Internal Revenue Code of 1986, as amended (the "Code").
An employee granted an Incentive Stock Option does not recognize
taxable income either at the date of grant or at the date of its timely
exercise. However, the excess of the fair market value of Common Stock
received upon exercise of the Incentive Stock Option over the Option exercise
price is an item of tax preference under Section 57(a)(3) of the Code and may
be subject to the
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alternative minimum tax imposed by Section 55 of the Code. Upon disposition of
stock acquired on exercise of an Incentive Stock Option, long-term capital gain
or loss is recognized in an amount equal to the difference between the sales
price and the Incentive Stock Option exercise price, provided that the option
holder has not disposed of the stock within two years from the date of grant
and within one year from the date of exercise. If the Incentive Stock Option
holder disposes of the acquired stock (including the transfer of acquired stock
in payment of the exercise price of an Incentive Stock Option) without
complying with both of these holding period requirements ("Disqualifying
Disposition"), the option holder will recognize ordinary income at the time of
such Disqualifying Disposition to the extent of the difference between the
exercise price and the lesser of the fair market value of the stock on the date
the Incentive Stock Option is exercised (the value six months after the date of
exercise may govern in the case of an employee whose sale of stock at a profit
could subject him to suit under Section 16(b) of the Securities Exchange Act of
1934) or the amount realized on such Disqualifying Disposition. Any remaining
gain or loss is treated as a short-term or long-term capital gain or loss,
depending on how long the shares are held. In the event of a Disqualifying
Disposition, the Incentive Stock Option tax preference described above may not
apply (although, where the Disqualifying Disposition occurs subsequent to the
year the Incentive Stock Option is exercised, it may be necessary for the
employee to amend his return to eliminate the tax preference item previously
reported). The Company and its subsidiary are not entitled to a tax deduction
upon either exercise of an Incentive Stock Option or disposition of stock
acquired pursuant to such an exercise, except to the extent that the Option
holder recognized ordinary income in a Disqualifying Disposition.
If the holder of an Incentive Stock Option pays the exercise price, in
full or in part, with shares of previously acquired Common Stock, the exchange
should not affect the Incentive Stock Option tax treatment of the exercise. No
gain or loss should be recognized on the exchange, and the shares received by
the employee, equal in number to the previously acquired shares exchanged
therefor, will have the same basis and holding period for long-term capital
gain purposes as the previously acquired shares. The employee will not,
however, be able to utilize the old holding period for the purpose of
satisfying the Incentive Stock Option statutory holding period requirements.
Shares received in excess of the number of previously acquired shares will have
a basis of zero and a holding period which commences as of the date the Common
Stock is issued to the employee upon exercise of the Incentive Stock Option.
If an exercise is effected using shares previously acquired through the
exercise of an Incentive Stock Option, the exchange of the previously acquired
shares will be considered a disposition of such shares for the purpose of
determining whether a Disqualifying Disposition has occurred.
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<PAGE> 15
In respect to the holder of Non-Qualified Options, the option holder
does not recognize taxable income on the date of the grant of the Non-Qualified
Option, but recognizes ordinary income generally at the date of exercise in the
amount of the difference between the option exercise price and the fair market
value of the Common Stock on the date of exercise. However, if the holder of
Non-Qualified Options is subject to the restrictions on resale of Common Stock
under Section 16 of the Securities Exchange Act of 1944, such person generally
recognizes ordinary income at the end of the six-month period following the
date of exercise in the amount of the difference between the option exercise
price and the fair market value of the Common Stock at the end of the six-month
period. Nevertheless, such holder may elect within 30 days after the date of
exercise to recognize ordinary income as of the date of exercise. The amount
of ordinary income recognized by the option holder is deductible by the Company
in the year that income is recognized.
SECURITIES ISSUED UNDER EMPLOYMENT AGREEMENTS WITH EXECUTIVES
On November 19, 1993, Mr. Gerald Smith, the Chairman of the Board and
President of the Company, entered into a two-year employment agreement with the
Company, as amended by Modified Employment Agreement dated December 15, 1994,
which provided for the sale at the inception of the employment agreement of
750,000 shares of Common Stock at $.30 per share, payable through the issuance
of a promissory note with the shares being issued into escrow pending receipt
of cash payments for the shares, to be released from escrow in increments of
not less than $3,000. These shares were purchased through the issuance of a
note in April 1994, with Mr. Smith receiving a bonus equal to the par value
($7,500) of the shares purchased. On May 15, 1995, the Company forgave Mr.
Smith's note in lieu of bonus for the 1995 fiscal year, following unanimous
approval of the independent members of the Board of Directors. The employment
agreement also provides for the issuance of options to purchase up to an
aggregate of 750,000 shares of Common Stock exercisable at $.30 per share at
any time on or prior to November 19, 1998. The right to exercise such options
have accelerated based on the Company receiving financing involving receipt of
gross proceeds of in excess of $3,000,000.
On May 9, 1995, the Company entered into a two-year employment
agreement expiring May 9, 1997 with Robert H. Zeiger to serve as Chief
Executive Officer and Chief Operating Officer of the Company at an annual
salary of $120,000. The agreement provides for health, life and similar
employee benefits generally made available to other employees of the Company,
use of an automobile and related maintenance expenses and reimbursement for
expenses incurred in fulfilling his normal responsibilities to the Company.
The agreement provides for the issuance of options to purchase the aggregate of
1,000,000 shares of Common Stock of the Company at an
15
<PAGE> 16
exercise price of $.96 per share, exercisable with respect to 500,000 shares
commencing May 8, 1996 through May 8, 2000 and exercisable for the remaining
500,000 shares commencing May 8, 1997 through May 8, 2001. The right to
exercise such options may be accelerated upon the occurrence of certain
material corporate transactions. The options are terminable prior to the lapse
of their respective terms only if Mr. Zeiger's employment should be terminated
for cause, and, in that event, the options must be exercised to the extent that
they have theretofore accrued within 90 days of such termination.
On July 1, 1994, the Company entered into a two-year employment
agreement with Mr. Charles F. Fistel, its then Chief Executive Officer, as
amended by Modified Employment Agreement dated December 15, 1994, which
provided for the issuance of options to purchase up to an aggregate of 300,000
Shares of Common Stock of the Company at an exercise price of $.30 per share,
exercisable with respect to 150,000 Shares commencing June 30, 1995 through
July 1, 1999 and exercisable for the remaining 150,000 Shares commencing June
30, 1996 through July 1, 2000. The right to exercise such options have
accelerated based on the Company receiving financing involving receipt of gross
proceeds of in excess of $3 million.
In April 1994, Mr. Dennis W. Healey, the former Chairman of the Board
and present Executive Vice President and Chief Financial Officer of the
Company, entered into a two-year employment agreement with the Company, as
amended by Modified Employment Agreement dated December 15, 1994, which
provided for the sale of 125,000 shares of Common Stock at $.30 per share for
services as a director, payable through the issuance of a Promissory Note with
the shares being issued into escrow pending cash payments for the shares, to be
released from escrow in increments of not less than $3,000. These shares were
purchased by Mr. Healey in June 1994. On May 15, 1995, the Company forgave Mr.
Healey's note in lieu of bonus for the 1995 fiscal year, following unanimous
approval of the independent members of the Board of Directors. The employment
agreement also provides for the issuance of 125,000 options to purchase Common
Stock at $.30 per share. The options are exercisable in whole or in part on or
prior to April 8, 1999. The right to exercise such options have accelerated
based on the Company receiving financing involving receipt of gross proceeds of
in excess of $3,000,000. In addition, previously, Mr. Healey elected to receive
300,000 shares of Common Stock in lieu of salary theretofore accrued and in
consideration for the termination of his prior existing employment agreement
with the Company.
Between May 13, 1994 and March 31, 1995, the Company entered into
employment agreements with Messrs. Robert Feldman, Hipolito Hartman, David
Squillacote, W. Richard Lueck, Joseph Morris and Steven Sanders pursuant to
which they were issued five-year options
16
<PAGE> 17
(from issuance) to purchase 25,000 shares ($.72 exercise price), 50,000 shares
($.72 exercise price), 105,000 shares (60,000 shares at $.30 per share, 25,000
shares at $.40 per share and 20,000 shares at $.80 per share), 250,000 shares
($.30 per share), 100,000 shares ($1.00 per share) and 100,000 shares ($.81) of
Common Stock of the Company.
STOCK OPTION AGREEMENTS WITH DIRECTORS.
The Company has issued Options to Purchase up to an aggregate of
650,000 shares of Common Stock of the Company to its directors pursuant to
Stock Option Agreements with such directors. Options to purchase up to an
aggregate of 300,000 shares are exercisable at $.30 per share on or prior to
June 23, 1999, and Options to purchase the remaining 350,000 Shares of Common
Stock are exercisable at $1.00 per share on or prior to August 31, 1999.
FEDERAL INCOME TAX EFFECTS.
An option holder does not recognize taxable income on the date of the
grant of the Option, which is a non-statutory option, but recognizes ordinary
income generally at the date of exercise in the amount of the difference
between the Option exercise price and the fair market value of the Common Stock
on the date of exercise. However, if the holder is subject to the restrictions
on resale of common stock under Section 16 of the Securities Exchange Act of
1934, such person generally recognizes ordinary income at the end of the
six-month period following the date of exercise in the amount of the difference
between the Option exercise price and the fair market value of the Common Stock
at the end of the six-month period. Nevertheless, such holder may elect within
30 days after the date of exercise to recognize ordinary income as of the date
of exercise. The amount of ordinary income recognized by the Option holder is
deductible by the Company in the year that income is recognized.
Common Stock issued to an employee in connection with the performance
of services must be included in gross income of the employee, to the extent
such issuance is for less than fair market value, based on the difference
between the price actually paid and the fair market value of the shares in the
first taxable year in which the shares are issued and not subject to a
"substantial risk of forfeiture". A substantial risk of forfeiture exists
where rights and property that have been transferred are conditioned, directly
or indirectly, upon the future performance (or refraining from performance) of
substantial services by any person, or the occurrence of any condition related
to the purpose of the transfer, and the possibility of forfeiture is
substantial if such condition is not satisfied. Common Stock received by a
participant who is subject to the short-swing profit recovery rule of Section
16(b) of the Securities Exchange Act of 1934 is considered subject to a
17
<PAGE> 18
substantial risk of forfeiture so long as the sale of such property at a profit
could subject the participant to suit under that action. Nevertheless, such
holder may elect within 30 days after the date of receipt to recognize ordinary
income as of the date of receipt. Inasmuch as the receipt of the shares was
not subject to a substantial risk of forfeiture, the recipient of the shares in
lieu of salary was required to include in gross income the fair market value of
the Shares at the time of receipt.
RESTRICTIONS UNDER SECURITIES LAWS
The sale of the Shares must be made in compliance with federal and
state securities laws. Officers, directors and 10% or greater stockholders of
the Company, as well as certain other persons or parties who may be deemed to
be "affiliates" of the Company under the Federal Securities Laws, should be
aware that resales by affiliates can only be made pursuant to an effective
Registration Statement, Rule 144 or any other applicable exemption. Officers,
directors and 10% and greater stockholders are also subject to the "short
swing" profit rule of Section 16(b) of the Securities Exchange Act of 1934.
SALES BY SELLING SECURITY HOLDERS
The following table sets forth as at June 6, 1995 the name of the
Selling Security Holders, the amount of shares of Common Stock held directly or
indirectly, the maximum amount of shares of Common Stock to be offered by the
Selling Security Holders, the exercise price of the Options held by the Selling
Security Holders referred to herein, the amount of Common Stock to be owned by
the Selling Security Holders following sale of such shares of Common Stock and
the percentage of shares of Common Stock to be owned by each Selling Security
Holder following completion of such offering. The number of shares of Common
Stock reflected as being owned by the various individuals designated hereunder
includes an aggregate of 3,205,000 shares of Common Stock underlying Options
held by such individuals. At June 6, 1995, there were 35,355,532 shares of
Common Stock of the Company outstanding.
18
<PAGE> 19
<TABLE>
<CAPTION>
Percentage
Per Share Shares to be to be Owned
Name of Selling Number of Shares to Exercise Owned After After
Security Holder Shares Owned be Offered Price Offering Offering
- --------------- ------------ ---------- --------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Gerald Smith 1,162,847(1) 1,162,847 $ .30/$1.00 - -
Robert H. Zeiger 1,000,000(2) 1,000,000 $ .96 - -
Dennis W. Healey 600,000(3) 600,000 $ .30/$1.00 - -
Charles F. Fistel 561,225(4) 300,000 $ .30 261,225 0.7%
Sydney Dworkin 225,244(5) 50,000 $1.00 175,244 0.5%
Peter D. Fischbein 300,000(6) 175,000 $ .30/$1.00 125,000 0.4%
Jay M. Haft 320,744(7) 100,000 $ .30/$1.00 220,744 0.6%
William B. Saeger 1,631,854(8) 50,000 $1.00 1,581,854 4.5%
Jerome E. Treisman 128,668(9) 50,000 $1.00 78,668 0.2%
W. Richard Leuck 250,000(10) 250,000 $ .30 -
Joseph P. Morris 100,000(10) 100,000 $1.00 - -
Robert Feldman 25,000(10) 25,000 $ .72 - -
Hipolito Hartman 50,000(10) 50,000 $ .72 - -
David Squillacote 105,000(10) 105,000 $ .30/.40/.80 - -
Steven Sanders 100,000(10) 100,000 $ .81 - -
</TABLE>
______________________
(1) Includes 362,847 shares owned directly by Mr. Smith and options to
purchase 800,000 shares of Common Stock previously described.
(2) Represents options to purchase shares of Common Stock of the Company
previously described.
(3) Includes 425,000 shares owned directly by Mr. Healey and options to
purchase 175,000 shares previously described.
(4) Includes 261,255 shares owned directly by Mr. Fistel and options to
purchase 300,000 shares previously described.
(5) Includes 175,244 shares owned directly by Mr. Dworkin and options to
purchase 50,000 shares previously described.
(6) Includes 125,000 shares owned directly by Mr. Fischbein and options to
purchase 175,000 shares previously described.
(7) Includes 220,744 shares owned directly by Mr. Haft and options to
purchase 100,000 shares previously described.
(8) Includes 26,100 shares owned directly by Mr. Saeger, 1,555,755 shares
held by certain affiliated entities of Mr. Saeger and options to purchase
50,000 shares previously described.
(9) Includes 78,668 shares owned directly by Mr. Treisman and options to
purchase 50,000 shares previously described.
(10) All shares reflected represent options to purchase shares of Common
Stock of the Company previously described.
DESCRIPTION OF SECURITIES
The Company is currently authorized to issue up to 50,000,000 shares
of Common Stock, par value $.01 per share, of which 35,355,532 shares were
outstanding as of June 6, 1995. The Company is also authorized to issue up to
375,000 shares of Preferred Stock, par value $1.00 per share, of which 3,450
shares of Series A Preferred Stock were outstanding as of June 6, 1995.
COMMON STOCK
Subject to the dividend rights of the holders of Preferred Stock,
holders of shares of Common Stock are entitled to share, on a ratable basis,
such dividends as may be declared by the Board of
19
<PAGE> 20
Directors out of funds, legally available therefor. Upon liquidation,
dissolution or winding up of the Company, after payment to creditors and
holders of Preferred Stock that may be outstanding, the assets of the Company
will be divided pro rata on a per share basis among the holders of the Common
Stock.
Each share of Common Stock entitles the holders thereof to one vote.
Holders of Common Stock do not have cumulative voting rights which means that
the holders of more than 50% of the shares voting for the election of Directors
can elect all of the Directors if they choose to do so, and, in such event, the
holders of the remaining shares will not be able to elect any Directors. The
By-Laws of the Company require that only a majority of the issued and
outstanding shares of Common Stock of the Company need be represented to
constitute a quorum and to transact business at a stockholders' meeting. The
Common Stock has no preemptive, subscription or conversion rights and is not
redeemable by the Company.
PREFERRED STOCK
The Company is authorized to issue 375,000 shares of Preferred Stock,
par value $1.00 per share. The Company currently has 3,450 shares of Series A
Preferred Stock outstanding. The Preferred Stock may be issued by resolutions
of the Company's Board of Directors from time to time without any action of the
stockholders. Such resolutions may authorize issuances of such Preferred Stock
in one or more series and may fix and determine dividend and liquidation
preferences, voting rights, conversion privileges, redemption terms and other
privileges and rights of the shares of each authorized series. The Company has
no present intention to issue any additional shares of its Preferred Stock for
any purpose. While the Company includes such Preferred Stock in its
capitalization in order to enhance its financial flexibility, such Preferred
Stock could possibly be used by the Company as a means to preserve control by
present management in the event of a potential hostile takeover of the Company.
In addition, the issuance of large blocks of Preferred Stock could possibly
have a dilutive effect with respect to the existing holders of Common Stock of
the Company.
The Series A Preferred Stock was established by the Board of Directors
January 1984. Each share of Series A Preferred Stock is immediately
convertible into 4.26 shares of Common Stock. Dividends on the preferred stock
are cumulative, have priority to the Common Stock and are payable in either
cash or Common Stock, at the option of the Company. The Company anticipates
approval by its Board of Directors of a preferred stock dividend during the
second fiscal quarter of 1995.
The Series A Preferred Stock has voting rights only if dividends are
in arrears for five annual dividends. Upon such
20
<PAGE> 21
occurrence, the voting would be limited to the election of two directors.
Voting rights terminate upon payment of the cumulative dividends. The Series A
Preferred Stock is redeemable at the option of the Company at any time after
expiration of ten consecutive business days during which the bid or last sale
price for the Common Stock is $6.00 per share or higher. There is no mandatory
redemption or sinking fund obligation with respect to the preferred stock.
Owners of the Series A Preferred Stock of which there are eight record
holders, will be entitled to receive $10.00 per share (plus accrued and unpaid
dividends) before any distribution or payment is made to holders of the Common
Stock or other stock of the Company junior to the Series A Preferred Stock upon
liquidation, dissolution or winding up of the Company. If in any such event
the assets of the Company distributable among the holders of Series A Preferred
Stock or any stock of the Company ranking on a par with the Series A Preferred
Stock upon liquidation, dissolution or winding up are insufficient to permit
such payment, the holders of the Series A Preferred Stock and of such other
stock will be entitled to ratable distribution of the available assets in
accordance with the respective amounts that would be payable on such shares if
all amounts payable thereon were paid in full.
CONVERTIBLE DEBENTURES
In November 1993, the Company issued $200,000 principal amount of its
8 1/2% three-year convertible debentures. These debentures were converted into
666,668 shares of Common Stock of the Company at a conversion price of $.30 per
share on October 31, 1994.
COMMON STOCK PURCHASE WARRANTS
In January 1994, the Company sold 1,000,000 Common Stock purchase
warrants to Northlea Partners, Ltd. for $20,000, exercisable at $.30 per share
on or prior to January 6, 1999. The Company repurchased warrants to acquire
584,160 shares of Common Stock at the time of the termination of the Management
Consulting Agreement with Northlea Partners, Ltd. in July 1994 resulting in
warrants to purchase 415,850 shares remaining outstanding.
In connection with the completion of the Company's $3.5 private
placement offering in August 1994, the Company issued to the placement agent
and its designees Common Stock Purchase Warrants to purchase 765,650 shares of
Common Stock. These warrants are exercisable at $.52 per share on/or prior to
August 15, 1999.
In March 1995, the Company issued 64,500 Common Stock purchase
warrants to Mr. Moty Herman and designees in consideration for
21
<PAGE> 22
financial consulting services to be undertaken on behalf of the Company. The
warrants are for a five year term and are exercisable presently at $.60 per
share.
OVER-THE-COUNTER MARKET
The Company's Common Stock is traded on the OTC Bulletin Board under
the symbol "VRGN." The Company intends to apply for inclusion of its Common
Stock on the NASDAQ System. If for any reason the Common Stock is not accepted
for inclusion on the NASDAQ System, then in such case the Company's Common
Stock would be expected to continue to be traded in the over-the-counter
markets through the "pink sheets" or the NASD's OTC Bulletin Board. In the
event the Common Stock were not included in the NASDAQ System, the Company's
Common Stock would be covered by a Securities and Exchange Commission rule that
imposes additional sales practice requirements on broker-dealers who sell such
securities to persons other than established customers and accredited investors
(generally institutions with assets in excess of $5,000,000 or individuals with
net worth in excess of $1,000,000 or annual income exceeding $200,000 or
$300,000 jointly with their spouse). For transactions covered by the rule, the
broker-dealer must make a special suitability determination for the purchaser
and receive the purchaser's written agreement to the transaction prior to the
sale. Consequently, the rule may affect the ability of broker-dealers to sell
the Company's securities and also may affect the ability of purchasers in this
offering to sell their shares in the secondary market. The ability of the
Company to secure a symbol on the NASDAQ System does not imply that a
meaningful trading market in its Common Stock will ever develop.
TRANSFER AGENT
The Transfer Agent for the shares of Common Stock is Continental Stock
Transfer & Trust Company, Two Broadway, New York, New York 10004.
LEGAL MATTERS
Certain legal matters in connection with the securities being offered
hereby will be passed upon for the Company by Atlas, Pearlman, Trop & Borkson,
P.A., 200 East Las Olas Boulevard, Suite 1900, Fort Lauderdale, Florida 33301.
The firm owns 25,000 shares of Common Stock of the Company.
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<PAGE> 23
EXPERTS
The consolidated financial statements of Viragen, Inc. incorporated by
reference in the Viragen, Inc. Annual Report (Form 10-K) for the year ended
June 30, 1994, have been audited by Ernst & Young LLP, independent certified
public accountants, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
INDEMNIFICATION
Section 145 of the General Corporation Law of Delaware, under which
jurisdiction the Company is incorporated, empowers a corporation to indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative by reason of the fact that he or she
is or was a director, officer, employee or agent of the corporation or is or
was serving at the request of the corporation as a director, officer, employee
or agent of another corporation or enterprise. A corporation may indemnify
against expenses (including attorneys' fees) and, other than in respect of an
action by or in the right of the corporation, against judgments, fines and
amounts paid in settlement actually and reasonably incurred in connection with
such action, suit or proceeding if the person indemnified acted in good faith
and in a manner he or she reasonably believed to be in or not opposed to the
best interests of the corporation, and with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
In the case of an action by or in the right of the corporation, no
indemnification of expenses may be made in respect to any claim, issue or
matter as to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of Chancery or the
court in which such action was brought shall determine that, despite the
adjudication of liability, such person is fairly and reasonably entitled to
indemnity for such expenses which the court shall deem proper. Section 145 of
the General Corporation Law of Delaware further provides that to the extent a
director, officer, employee or agent of the corporation has been successful in
the defense of any action, suit or proceeding referred to above or in the
defense of any claim, issue or matter therein, he or she shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred
by him or her in connection therewith.
The Certificate of Incorporation and By-Laws of the Company will
require the Company to indemnify its Directors and officers to the fullest
extent permitted by the General Corporation Law of the State of Delaware.
23
<PAGE> 24
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The documents listed in (a) through (e) below are incorporated by
reference in the Registration Statement. All documents subsequently filed by
the Registrant pursuant to Section 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in the Registration Statement and to be part
thereof from the date of filing of such documents.
(a) The Registrant's latest annual report or transitional
report filed pursuant to Section 13(a) or 15(d) of the Exchange Act, or, in the
case of the Registrant, either (1) the latest prospectus filed pursuant to Rule
424(b) under the Securities Act of 1933, as amended (the "Act"), that contains
audited financial statements for the Registrant's latest fiscal year for which
such statements have been filed or (3) the Registrant's effective registration
statement on Form 10 or 30F filed under the Exchange Act containing audited
financial statements for the Registrant's latest fiscal year.
(b) The Registrant's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1994.
(c) The Registrant's Quarterly Report on Form 10-QSB/A-1
for the quarter ended December 31, 1994.
(d) The Company's Quarterly Report on Form 10-QSB for the
quarter ended March 31, 1995.
(e) All other reports filed pursuant to Section 13(a) or
15(d) of the Exchange Act since the end of the fiscal year covered by the
Registrant's document referred to in (a) above.
(f) The description of the Common Stock of the Company
which is contained in a Registration Statement filed under the Exchange Act,
including any amendment or report filed for the purpose of updating such
description.
ITEM 4. DESCRIPTION OF SECURITIES
The class of securities to be offered hereby is registered under
Section 12 of the Securities Exchange Act of 1934, as amended. A description
of the Registrant's securities is set forth
i
<PAGE> 25
in the Prospectus incorporated as a part of this Registration Statement.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of Delaware, under which
jurisdiction the Company is incorporated, empowers a corporation to indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative by reason of the fact that he or she
is or was a director, officer, employee or agent of the corporation or is or
was serving at the request of the corporation as a director, officer, employee
or agent of another corporation or enterprise. A corporation may indemnify
against expenses (including attorneys' fees) and, other than in respect of an
action by or in the right of the corporation, against judgments, fines and
amounts paid in settlement actually and reasonably incurred in connection with
such action, suit or proceeding if the person indemnified acted in good faith
and in a manner he or she reasonably believed to be in or not opposed to the
best interests of the corporation, and with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
In the case of an action by or in the right of the corporation, no
indemnification of expenses may be made in respect to any claim, issue or
matter as to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of Chancery or the
court in which such action was brought shall determine that, despite the
adjudication of liability, such person is fairly and reasonably entitled to
indemnity for such expenses which the court shall deem proper. Section 145 of
the General Corporation Law of Delaware further provides that to the extent a
director, officer, employee or agent of the corporation has been successful in
the defense of any action, suit or proceeding referred to above or in the
defense of any claim, issue or matter therein, he or she shall be indemnified
against expenses (including attorneys' fees) actually and reason-ably incurred
by him or her in connection therewith.
The Certificate of Incorporation and By-Laws of the Company will
require the Company to indemnify its Directors and officers to the fullest
extent permitted by the General Corporation Law of the State of Delaware.
ii
<PAGE> 26
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Inasmuch as the employees, executives, directors and consultants who
received the Shares of the Company were knowledge-able, sophisticated or had
access to comprehensive information relevant to the Company, such transaction
was undertaken in reliance on the exemption from registration provided by
Section 4(2) of the Act. As a condition precedent to such grant, such security
holders were required to express an investment intent and consent to the
imprinting of a restrictive legend on each stock certificate to be received
from the Registrant.
ITEM 8. EXHIBITS
Exhibit Description
- ------- -----------
4(a) Viragen, Inc. 1995 Stock Option Plan
4(b) Form of Stock Option Agreements issued pursuant to the 1995
Stock Option Plan
4(c) Modified Employment Agreement between Gerald Smith and the
Company dated December 15, 1994*
4(d) Modified Employment Agreement between Dennis W. Healey and the
Company dated December 15, 1994*
4(e) Modified Employment Agreement between Charles F. Fistel and
the Company dated December 15, 1994*
4(f) Employment Agreement between Robert H. Zeiger and the Company
dated May 9, 1995
4(g) Form of Employment Agreements with Messrs. Joseph P. Morris,
Robert Feldman, Hipolito Hartman, Alex Canales, David
Squillacote and W. Richard Leuck and the Company
4(h) Form of Stock Option Agreement with Directors and the Company
(5) Opinion of Atlas, Pearlman, Trop & Borkson, P.A. relating to
the issuance of shares of Common Stock pursuant to the above
agreement
(24.1) Consent of Atlas, Pearlman, Trop & Borkson, P.A. included in
the opinion filed as exhibit (5) hereto
(24.2) Consent of independent certified public accountants
* Incorporated by reference to the Company's Registration Statement on
Form SB-2 (File No. 33-88070)
iii
<PAGE> 27
ITEM 9. UNDERTAKINGS
(1) The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offerings or
sales are being made, a post-effective amendment to this Registration Statement
to include any material information with respect to the plan of distribution
not previously disclosed in the Registration Statement or any material change
to such information in the Registration Statement;
(b) That, for the purposes of determining any liability
under the Act, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(c) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
(2) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) Insofar as indemnification for liabilities arising under the
Act may be permitted to Directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a Director, officer of controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by
such Director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
iv
<PAGE> 28
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-8 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Hialeah and the State of
Florida, on the 9th day of June 1995.
VIRAGEN, INC.
By: /s/ Gerald Smith
--------------------------
Gerald Smith
Chairman of the Board,
Principal Executive Officer
and President
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
Chairman of the
/s/ Gerald Smith Board, Principal June 9, 1995
- ------------------------- Executive Officer
Gerald Smith and President
Chief Operating Officer
- ------------------------- , 1995
Robert H. Zeiger ------
/s/ Charles F. Fistel
- ------------------------- Executive Vice
Charles F. Fistel President June 9, 1995
Executive Vice
President, Treas-
urer, Principal
Financial and
Accounting Officer
/s/ Dennis W. Healey and Director June 9, 1995
- -------------------------
Dennis W. Healey
</TABLE>
v
<PAGE> 29
<TABLE>
<S> <C> <C>
/s/ Peter Fischbein Director June 9, 1995
- -------------------------
Peter Fischbein
Director , 1995
- ------------------------- ------
Sidney Dworkin
/s/ Jay M. Haft Director June 9, 1995
- -------------------------
Jay M. Haft
/s/ William B. Saeger Director June 9, 1995
- -------------------------
William B. Saeger
</TABLE>
vi
<PAGE> 30
*************************
EXHIBITS OF VIRAGEN, INC.
FILE WITH
FORM S-8 REGISTRATION STATEMENT
FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION
*************************
vii
<PAGE> 31
EXHIBIT INDEX
VIRAGEN, INC.
<TABLE>
<CAPTION>
Exhibit
Number Description Page
- ------ ----------- ----
<S> <C>
4(a) Viragen, Inc. 1995 Stock Option Plan
4(b) Form of Stock Option Agreements issued pursuant to the 1995
Stock Option Plan Company
4(c) Modified Employment Agreement between Gerald Smith and the
Company dated December 15, 1994*
4(d) Modified Employment Agreement between Dennis W. Healey and the
Company dated December 15, 1994*
4(e) Modified Employment Agreement between Charles F. Fistel and
the Company dated December 15, 1994*
4(f) Employment Agreement between Robert H. Zeiger and the Company
dated May 9, 1995
4(g) Form of Employment Agreements with Messrs. Joseph P. Morris,
Robert Feldman, Hipolito Hartman, Alex Canales, David
Squillacote and W. Richard Leuck and the Company
4(h) Form of Stock Option Agreement with Directors and the Company
(5) Opinion of Atlas, Pearlman, Trop & Borkson, P.A. relating to
the issuance of shares of Common Stock pursuant to the above
agreement
(24.1) Consent of Atlas, Pearlman, Trop & Borkson, P.A. included in
the opinion filed as exhibit (5) hereto
(24.2) Consent of independent certified public accountants
</TABLE>
<PAGE> 1
EXHIBIT 4(a)
Viragen, Inc. 1995 Stock Option Plan
<PAGE> 2
VIRAGEN, INC.
1995 STOCK OPTION PLAN
1. GRANT OF OPTIONS; GENERALLY. In accordance with the
provisions hereinafter set forth in this stock option plan, the name of which
is the VIRAGEN, INC. 1995 STOCK OPTION PLAN (the "Plan"), the Board of
Directors (the "Board") or, the Compensation Committee (the "Stock Option
Committee") of Viragen, Inc. (the "Corporation") is hereby authorized to issue
from time to time on the Corporation's behalf to any one or more Eligible
Persons, as hereinafter defined, options to acquire shares of the Corporation's
$.01 par value common stock (the "Stock").
2. TYPE OF OPTIONS. The Board or the Stock Option Committee is
authorized to issue options which meet the requirements of Section Section 422
of the Internal Revenue Code of 1986, as amended (the "Code"), which options
are hereinafter referred to collectively as ISOs, or singularly as an ISO. The
Board or the Stock Option Committee is also, in its discretion, authorized to
issue options which are not ISOs, which options are hereinafter referred to
collectively as NSOs, or singularly as an NSO. The Board or the Stock Option
Committee is also authorized to issue "Reload Options" in accordance with
Paragraph 8 herein, which options are hereinafter referred to collectively as
Reload Options, or singularly as a Reload Option. Except where the context
indicates to the contrary, the term "Option" or "Options" means ISOs, NSOs and
Reload Options.
3. AMOUNT OF STOCK. The aggregate number of shares of Stock
which may be purchased pursuant to the exercise of Options shall be 4,000,000
shares. Of this amount, the Board or the Stock Option Committee shall have the
power and authority to designate whether any Options so issued shall be ISOs or
NSOs, subject to the restrictions on ISOs contained elsewhere herein. If an
Option ceases to be exercisable, in whole or in part, the shares of Stock
underlying such Option shall continue to be available under this Plan.
Further, if shares of Stock are delivered to the Corporation as payment for
shares of Stock purchased by the exercise of an Option granted under this Plan,
such shares of Stock shall also be available under this Plan. If there is any
change in the number of shares of Stock on account of the declaration of stock
dividends, recapitalization resulting in stock split-ups, or combinations or
exchanges of shares of Stock, or otherwise, the number of shares of Stock
available for purchase upon the exercise of Options, the shares of Stock
subject to any Option and the exercise price of any outstanding Option shall be
appropriately adjusted by the Board or the Stock Option Committee. The Board
or the Stock Option Committee shall give notice of any adjustments to each
Eligible Person granted an Option under this Plan, and such adjustments shall
be effective and binding on all Eligible Persons. If because
<PAGE> 3
of one or more recapitalizations, reorganizations or other corporate events,
the holders of outstanding Stock receive something other than shares of Stock
then, upon exercise of an Option, the Eligible Person will receive what the
holder would have owned if the holder had exercised the Option immediately
before the first such corporate event and not disposed of anything the holder
received as a result of the corporate event.
4. ELIGIBLE PERSONS.
(a) With respect to ISOs, an Eligible Person means any
individual who has been employed by the Corporation or by any subsidiary of the
Corporation, for a continuous period of at least sixty (60) days.
(b) With respect to NSOs, an Eligible Person means (i)
any individual who has been employed by the Corporation or by any subsidiary of
the Corporation, for a continuous period of at least sixty (60) days, (ii) any
director of the Corporation or by any subsidiary of the Corporation or (iii)
any consultant of the Corporation or by any subsidiary of the Corporation.
5. GRANT OF OPTIONS. The Board or the Stock Option Committee has
the right to issue the Options established by this Plan to Eligible Persons.
The Board or the Stock Option Committee shall follow the procedures prescribed
for it elsewhere in this Plan. A grant of Options shall be set forth in a
writing signed on behalf of the Corporation or by a majority of the members of
the Stock Option Committee. The writing shall identify whether the Option
being granted is an ISO or an NSO and shall set forth the terms which govern
the Option. The terms shall be determined by the Board or the Stock Option
Committee, and may include, among other terms, the number of shares of Stock
that may be acquired pursuant to the exercise of the Options, when the Options
may be exercised, the period for which the Option is granted and including the
expiration date, the effect on the Options if the Eligible Person terminates
employment and whether the Eligible Person may deliver shares of Stock to pay
for the shares of Stock to be purchased by the exercise of the Option.
However, no term shall be set forth in the writing which is inconsistent with
any of the terms of this Plan. The terms of an Option granted to an Eligible
Person may differ from the terms of an Option granted to another Eligible
Person, and may differ from the terms of an earlier Option granted to the same
Eligible Person.
6. OPTION PRICE. The option price per share shall be determined
by the Board or the Stock Option Committee at the time any Option is granted,
and shall be not less than (i) in the case of an ISO, the fair market value,
(ii) in the case of an ISO granted to a ten percent or greater stockholder, 110
percent of the fair market value, or (iii) in the case of an NSO, not less than
75% of the fair market value (but in no event less than the par
2
<PAGE> 4
value) of one share of Stock on the date the Option is granted, as determined
by the Board or the Stock Option Committee. Fair market value as used herein
shall be:
(a) If shares of Stock shall be traded on an exchange or
over-the-counter market, the mean between the high and low sales prices of
Stock on such exchange or over-the-counter market on which such shares shall be
traded on that date, or if such exchange or over-the-counter market is closed
or if no shares shall have traded on such date, on the last preceding date on
which such shares shall have traded.
(b) If shares of Stock shall not be traded on an exchange
or over-the-counter market, the value as determined by a recognized appraiser
as selected by the Board or the Stock Option Committee.
7. PURCHASE OF SHARES. An Option shall be exercised by the
tender to the Corporation of the full purchase price of the Stock with respect
to which the Option is exercised and written notice of the exercise. The
purchase price of the Stock shall be in United States dollars, payable in cash
or by check, or in property or Corporation stock, if so permitted by the Board
or the Stock Option Committee in accordance with the discretion granted in
Paragraph 5 hereof, having a value equal to such purchase price. The
Corporation shall not be required to issue or deliver any certificates for
shares of Stock purchased upon the exercise of an Option prior to (i) if
requested by the Corporation, the filing with the Corporation by the Eligible
Person of a representation in writing that it is the Eligible Person's then
present intention to acquire the Stock being purchased for investment and not
for resale, and/or (ii) the completion of any registration or other
qualification of such shares under any government regulatory body, which the
Corporation shall determine to be necessary or advisable.
8. GRANT OF RELOAD OPTIONS. In granting an Option under this
Plan, the Board or the Stock Option Committee may include a Reload Option
provision therein, subject to the provisions set forth in Paragraphs 20 and 21
herein. A Reload Option provision provides that if the Eligible Person pays
the exercise price of shares of Stock to be purchased by the exercise of an
ISO, NSO or another Reload Option (the "Original Option") by delivering to the
Corporation shares of Stock already owned by the Eligible Person (the "Tendered
Shares"), the Eligible Person shall receive a Reload Option which shall be a
new Option to purchase shares of Stock equal in number to the tendered shares.
The terms of any Reload Option shall be determined by the Board or the Stock
Option Committee consistent with the provisions of this Plan.
9. STOCK OPTION COMMITTEE. The Stock Option Committee may be
appointed from time to time by the Corporation's Board of Directors. The Board
may from time to time remove members from or
3
<PAGE> 5
add members to the Stock Option Committee. The Stock Option Committee shall be
constituted so as to permit the Plan to comply in all respects with the
provisions set forth in Paragraph 20 herein. The members of the Stock Option
Committee may elect one of its members as its chairman. The Stock Option
Committee shall hold its meetings at such times and places as its chairman
shall determine. A majority of the Stock Option Committee's members present in
person shall constitute a quorum for the transaction of business. All
determinations of the Stock Option Committee will be made by the majority vote
of the members constituting the quorum. The members may participate in a
meeting of the Stock Option Committee by conference telephone or similar
communications equipment by means of which all members participating in the
meeting can hear each other. Participation in a meeting in that manner will
constitute presence in person at the meeting. Any decision or determination
reduced to writing and signed by all members of the Stock Option Committee will
be effective as if it had been made by a majority vote of all members of the
Stock Option Committee at a meeting which is duly called and held.
10. ADMINISTRATION OF PLAN. In addition to granting Options and
to exercising the authority granted to it elsewhere in this Plan, the Board or
the Stock Option Committee is granted the full right and authority to interpret
and construe the provisions of this Plan, promulgate, amend and rescind rules
and procedures relating to the implementation of the Plan and to make all other
determinations necessary or advisable for the administration of the Plan,
consistent, however, with the intent of the Corporation that Options granted or
awarded pursuant to the Plan comply with the provisions of Paragraph 20 and 21
herein. All determinations made by the Board or the Stock Option Committee
shall be final, binding and conclusive on all persons including the Eligible
Person, the Corporation and its stockholders, employees, officers and directors
and consultants. No member of the Board or the Stock Option Committee will be
liable for any act or omission in connection with the administration of this
Plan unless it is attributable to that member's willful misconduct.
11. PROVISIONS APPLICABLE TO ISOS. The following provisions shall
apply to all ISOs granted by the Board or the Stock Option Committee and are
incorporated by reference into any writing granting an ISO:
(a) An ISO may only be granted within ten (10) years from
______________ 1995, the date that this Plan was originally adopted by the
Corporation's Board of Directors.
(b) An ISO may not be exercised after the expiration of
ten (10) years from the date the ISO is granted.
(c) The option price may not be less than the fair market
value of the Stock at the time the ISO is granted.
4
<PAGE> 6
(d) An ISO is not transferrable by the Eligible Person to
whom it is granted except by will, or the laws of descent and distribution, and
is exercisable during his or her lifetime only by the Eligible Person.
(e) If the Eligible Person receiving the ISO owns at the
time of the grant stock possessing more than ten (10%) percent of the total
combined voting power of all classes of stock of the employer corporation or of
its parent or subsidiary corporation (as those terms are defined in the Code),
then the option price shall be at least 110% of the fair market value of the
Stock, and the ISO shall not be exercisable after the expiration of five (5)
years from the date the ISO is granted.
(f) The aggregate fair market value (determined at the
time the ISO is granted) of the Stock with respect to which the ISO is first
exercisable by the Eligible Person during any calendar year (under this Plan
and any other incentive stock option plan of the Corporation) shall not exceed
$100,000.
(g) Even if the shares of Stock which are issued upon
exercise of an ISO are sold within one year following the exercise of such ISO
so that the sale constitutes a disqualifying disposition for ISO treatment
under the Code, no provision of this Plan shall be construed as prohibiting
such a sale.
(h) This Plan was adopted by the Corporation on
_____________, 1995, by virtue of its approval by the Corporation's Board of
Directors. Approval by the stockholders of the Corporation is to occur prior
to ____________, 1996.
12. DETERMINATION OF FAIR MARKET VALUE. In granting ISOs under
this Plan, the Board or the Stock Option Committee shall make a good faith
determination as to the fair market value of the Stock at the time of granting
the ISO.
13. RESTRICTIONS ON ISSUANCE OF STOCK. The Corporation shall not
be obligated to sell or issue any shares of Stock pursuant to the exercise of
an Option unless the Stock with respect to which the Option is being exercised
is at that time effectively registered or exempt from registration under the
Securities Act of 1933, as amended, and any other applicable laws, rules and
regulations. The Corporation may condition the exercise of an Option granted
in accordance herewith upon receipt from the Eligible Person, or any other
purchaser thereof, of a written representation that at the time of such
exercise it is his or her then present intention to acquire the shares of Stock
for investment and not with a view to, or for sale in connection with, any
distribution thereof; except that, in the case of a legal representative of an
Eligible Person, "distribution" shall be defined to exclude distribution by
will or under the laws of descent and distribution. Prior to issuing any
shares of Stock
5
<PAGE> 7
pursuant to the exercise of an Option, the Corporation shall take such steps as
it deems necessary to satisfy any withholding tax obligations imposed upon it
by any level of government.
14. EXERCISE IN THE EVENT OF DEATH OF TERMINATION OR EMPLOYMENT.
(a) If an optionee shall die (i) while an employee of the
Corporation or a Subsidiary or (ii) within three months after termination of
his employment with the Corporation or a Subsidiary because of his disability,
or retirement or otherwise, his Options may be exercised, to the extent that
the optionee shall have been entitled to do so on the date of his death or such
termination of employment, by the person or persons to whom the optionee's
right under the Option pass by will or applicable law, or if no such person has
such right, by his executors or administrators, at any time, or from time to
time. In the event of termination of employment because of his death while an
employee or because of disability, his Options may be exercised not later than
the expiration date specified in Paragraph 5 or one year after the optionee's
death, whichever date is earlier, or in the event of termination of employment
because of retirement or otherwise, not later than the expiration date
specified in Paragraph 5 hereof or one year after the optionee's death,
whichever date is earlier.
(b) If an optionee's employment by the Corporation or a
Subsidiary shall terminate because of his disability and such optionee has not
died within the following three months, he may exercise his Options, to the
extent that he shall have been entitled to do so at the date of the termination
of his employment, at any time, or from time to time, but not later than the
expiration date specified in Paragraph 5 hereof or one year after termination
of employment, whichever date is earlier.
(c) If an optionee's employment shall terminate by reason
of his retirement in accordance with the terms of the Corporation's
tax-qualified retirement plans or with the consent of the Board or the Stock
Option Committee or involuntarily other than by termination for cause, and such
optionee has not died within the following three months, he may exercise his
Option to the extent he shall have been entitled to do so at the date of the
termination of his employment, at any time and from to time, but not later than
the expiration date specified in Paragraph 5 hereof or thirty (30) days after
termination of employment, whichever date is earlier. For purposes of this
Paragraph 14, termination for cause shall mean termination of employment by
reason of the optionee's commission of a felony, fraud or willful misconduct
which has resulted, or is likely to result, in substantial and material damage
to the Corporation or a Subsidiary, all as the Board or the Stock Option
Committee in its sole discretion may determine.
6
<PAGE> 8
(d) If an optionee's employment shall terminate for any
reason other than death, disability, retirement or otherwise, all right to
exercise his Option shall terminate at the date of such termination of
employment.
15. CORPORATE EVENTS. In the event of the proposed dissolution or
liquidation of the Corporation, a proposed sale of all or substantially all of
the assets of the Corporation, a merger or tender for the Corporation's shares
of Common Stock the Board of Directors may declare that each Option granted
under this Plan shall terminate as of a date to be fixed by the Board of
Directors; provided that not less than thirty (30) days written notice of the
date so fixed shall be given to each Eligible Person holding an Option, and
each such Eligible Person shall have the right, during the period of thirty
(30) days preceding such termination, to exercise his Option as to all or any
part of the shares of Stock covered thereby, including shares of Stock as to
which such Option would not otherwise be exercisable. Nothing set forth herein
shall extend the term set for purchasing the shares of Stock set forth in the
Option.
16. NO GUARANTEE OF EMPLOYMENT. Nothing in this Plan or in any
writing granting an Option will confer upon any Eligible Person the right to
continue in the employ of the Eligible Person's employer, or will interfere
with or restrict in any way the right of the Eligible Person's employer to
discharge such Eligible Person at any time for any reason whatsoever, with or
without cause.
17. NONTRANSFERABILITY. No Option granted under the Plan shall be
transferable other than by will or by the laws of descent and distribution.
During the lifetime of the optionee, an Option shall be exercisable only by
him.
18. NO RIGHTS AS STOCKHOLDER. No optionee shall have any rights
as a stockholder with respect to any shares subject to his Option prior to the
date of issuance to him of a certificate or certificates for such shares.
19. AMENDMENT AND DISCONTINUANCE OF PLAN. The Corporation's Board
of Directors may amend, suspend or discontinue this Plan at any time. However,
no such action may prejudice the rights of any Eligible Person who has prior
thereto been granted Options under this Plan. Further, no amendment to this
Plan which has the effect of (a) increasing the aggregate number of shares of
Stock subject to this Plan (except for adjustments pursuant to Paragraph 3
herein), or (b) changing the definition of Eligible Person under this Plan, may
be effective unless and until approval of the stockholders of the Corporation
is obtained in the same manner as approval of this Plan is required. The
Corporation's Board of Directors is authorized to seek the approval of the
Corporation's stockholders for any other changes it proposes to make to this
Plan which require such approval, however, the Board of Directors may
7
<PAGE> 9
modify the Plan, as necessary, to effectuate the intent of the Plan as a result
of any changes in the tax, accounting or securities laws treatment of Eligible
Persons and the Plan, subject to the provisions set forth in this Paragraph 19,
and Paragraphs 20 and 21.
20. COMPLIANCE WITH RULE 16B-3. This Plan is intended to comply
in all respects with Rule 16b-3 ("Rule 16b-3") promulgated by the Securities
and Exchange Commission under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), with respect to participants who are subject to Section
16 of the Exchange Act, and any provision(s) herein that is/are contrary to
Rule 16b-3 shall be deemed null and void to the extent appropriate by either
the Stock Option Committee or the Corporation's Board of Directors.
21. COMPLIANCE WITH CODE. The aspects of this Plan on ISOs is
intended to comply in every respect with Section 422 of the Code and the
regulations promulgated thereunder. In the event any future statute or
regulation shall modify the existing statute, the aspects of this Plan on ISOs
shall be deemed to incorporate by reference such modification. Any stock
option agreement relating to any Option granted pursuant to this Plan
outstanding and unexercised at the time any modifying statute or regulation
becomes effective shall also be deemed to incorporate by reference such
modification and no notice of such modification need be given to optionee.
If any provision of the aspects of this Plan on ISOs is
determined to disqualify the shares purchasable pursuant to the Options granted
under this Plan from the special tax treatment provided by Code Section 422,
such provision shall be deemed null and void and to incorporate by reference
the modification required to qualify the shares for said tax treatment.
22. COMPLIANCE WITH OTHER LAWS AND REGULATIONS. The Plan, the
grant and exercise of Options thereunder, and the obligation of the Corporation
to sell and deliver Stock under such options, shall be subject to all
applicable federal and state laws, rules, and regulations and to such approvals
by any government or regulatory agency as may be required. The Corporation
shall not be required to issue or deliver any certificates for shares of Stock
prior to (a) the listing of such shares on any stock exchange or
over-the-counter market on which the Stock may then be listed and (b) the
completion of any registration or qualification of such shares under any
federal or state law, or any ruling or regulation of any government body which
the Corporation shall, in its sole discretion, determine to be necessary or
advisable. Moreover, no Option may be exercised if its exercise or the receipt
of Stock pursuant thereto would be contrary to applicable laws.
23. DISPOSITION OF SHARES. In the event any share of Stock
acquired by an exercise of an Option granted under the Plan shall
8
<PAGE> 10
be transferable other than by will or by the laws of descent and distribution
within two years of the date such Option was granted or within one year after
the transfer of such Stock pursuant to such exercise, the optionee shall give
prompt written notice thereof to the Corporation or the Stock Option Committee.
24. NAME. The Plan shall be known as the "Viragen, Inc. 1995
Stock Option Plan."
25. NOTICES. Any notice hereunder shall be in writing and sent by
certified mail, return receipt requested or by facsimile transmission (with
electronic or written confirmation of receipt) and when addressed to the
Corporation shall be sent to it at its office, 2343 West 76th Street, Hialeah,
Florida 33016, and when addressed to the Committee shall be sent to it at 2343
West 76th Street, Hialeah, Florida 33016, subject to the right of either party
to designate at any time hereafter in writing some other address, facsimile
number or person to whose attention such notice shall be sent.
26. HEADINGS. The headings preceding the text of Sections and
subparagraphs hereof are inserted solely for convenience of reference, and
shall not constitute a part of this Plan nor shall they affect its meaning,
construction or effect.
27. EFFECTIVE DATE. This Plan, the Viragen, Inc. 1995 Stock
Option Plan, was adopted by the Board of Directors of the Corporation on
________________, 1995. The effective date of the Plan shall be the same
date.
Dated as of __________, 1995.
VIRAGEN, INC.
By:
---------------------------
Its: President
9
<PAGE> 1
EXHIBIT 4(b)
Form of Stock Option Agreements issued pursuant
to the 1995 Stock Option Plan Company
<PAGE> 2
[NSO GRANT FORM]
VIRAGEN, INC.
2343 West 76th Street
Hialeah, Florida 33016
Date: __________
__________
__________
__________
Dear __________:
The Board of Directors of Viragen, Inc. (the "Corporation") is pleased
to award you an Option pursuant to the provisions of the 1995 Stock Option Plan
(the "Plan"). This letter will describe the Option granted to you. Attached
to this letter is a copy of the Plan. The terms of the Plan also set forth
provisions governing the Option granted to you. Therefore, in addition to
reading this letter you should also read the Plan. Your signature on this
letter is an acknowledgement to us that you have read and understand the Plan
and that you agree to abide by its terms. All terms not defined in this letter
shall have the same meaning as in the Plan.
1. TYPE OF OPTION. You are granted an NSO. Please see in
particular Section 11 of the Plan.
2. RIGHTS AND PRIVILEGES. Subject to the conditions hereinafter
set forth, we grant you the right to purchase __________ shares of Stock at
$__________ per share, the current fair market value of a share of Stock. The
right to purchase the shares of Stock accrues in __________ installments over
the time periods described below:
The right to acquire __________ shares accrues on __________.
The right to acquire __________ shares accrues on __________.
3. TIME OF EXERCISE. The Option may be exercised at any time and
from time to time beginning when the right to purchase the shares of Stock
accrues and ending when they terminate as provided in Section 5 of this letter.
4. METHOD OF EXERCISE. The Options shall be exercised by written
notice to the Chairman of the Board of Directors at the Corporation's principal
place of business. The notice shall set forth the number of shares of Stock to
be acquired and shall contain a check payable to the Corporation in full
payment for the
10
<PAGE> 3
Stock or that number of already owned shares of Stock equal in value to the
total Exercise Price of the Option. We shall make delivery of the shares of
Stock subject to the conditions described in Section 13 of the Plan.
5. TERMINATION OF OPTION. To the extent not exercised, the
Option shall terminate upon the first to occur of the following dates:
(a) __________, 199_, being __________ years from the
date of grant pursuant to the provisions of Section 2 of this Agreement; or
(b) The expiration of three months following the date
your employment terminates with the Corporation and any of its subsidiaries
included in the Plan for any reason, other than by reason of death or permanent
disability. As used herein, "permanent disability" means your inability to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than 12 months; or
(c) The expiration of 12 months following the date your
employment terminates with the Corporation and any of its subsidiaries included
in the Plan, if such employment termination occurs by reason of your death or
by reason of your permanent disability (as defined above).
6. SECURITIES LAWS.
The Option and the shares of Stock underlying the Option have
not been registered under the Securities Act of 1933, as amended (the "Act").
The Corporation has no obligations to ever register the Option or the shares of
Stock underlying the Option. All shares of Stock acquired upon the exercise of
the Option shall be "restricted securities" as that term is defined in Rule 144
promulgated under the Act. The certificate representing the shares shall bear
an appropriate legend restricting their transfer. Such shares cannot be sold,
transferred, assigned or otherwise hypothecated without registration under the
Act or unless a valid exemption from registration is then available under
applicable federal and state securities laws and the Corporation has been
furnished with an opinion of counsel satisfactory in form and substance to the
Corporation that such registration is not required.
7. BINDING EFFECT. The rights and obligations described in this
letter shall inure to the benefit of and be binding upon both of us, and our
respective heirs, personal representatives, successors and assigns.
11
<PAGE> 4
8. DATE OF GRANT. The Option shall be treated as having been
granted to you on the date of this letter even though you may sign it at a
later date.
Very truly yours,
By:
-------------------------------
President
AGREED AND ACCEPTED:
- -----------------------------
- -----------------
12
<PAGE> 5
Date: ________________
VIRAGEN, INC.
2343 West 76th Street
Hialeah, Florida 33016
_______________
_______________
_______________
Dear _______________:
The Board of Directors of Viragen, Inc. (the "Corporation") is pleased
to award you an Option pursuant to the provisions of the 1995 Stock Option Plan
(the "Plan"). This letter will describe the Option granted to you. Attached
to this letter is a copy of the Plan. The terms of the Plan also set forth
provisions governing the Option granted to you. Therefore, in addition to
reading this letter you should also read the Plan. Your signature on this
letter is an acknowledgement to us that you have read and understand the Plan
and that you agree to abide by its terms. All terms not defined in this letter
shall have the same meaning as in the Plan.
1. TYPE OF OPTION. You are granted an ISO. Please see in
particular Section 11 of the Plan.
2. RIGHTS AND PRIVILEGES. Subject to the conditions hereinafter
set forth, we grant you the right to purchase __________ shares of Stock at
$__________ per share, the current fair market value of a share of Stock. The
right to purchase the shares of Stock accrues in __________ installments over
the time periods described below:
The right to acquire __________ shares accrues on __________.
The right to acquire __________ shares accrues on __________.
The right to acquire __________ shares accrues on __________.
The right to acquire __________ shares accrues on __________.
The right to acquire __________ shares accrues on __________.
The right to acquire __________ shares accrues on __________.
3. TIME OF EXERCISE. The Option may be exercised at any time and
from time to time beginning when the right to purchase the shares of Stock
accrues and ending when they terminate as provided in Section 5 of this letter.
13
<PAGE> 6
4. METHOD OF EXERCISE. The Options shall be exercised by written
notice to the Chairman of the Board of Directors at the Corporation's principal
place of business. The notice shall set forth the number of shares of Stock to
be acquired and shall contain a check payable to the Corporation in full
payment for the Stock or that number of already owned shares of Stock equal in
value to the total Exercise Price of the Option. We shall make delivery of the
shares of Stock subject to the conditions described in Section 13 of the Plan.
5. TERMINATION OF OPTION. To the extent not exercised, the
Option shall terminate upon the first to occur of the following dates:
(a) _____________, 199___, being __________ years from
the date of grant pursuant to the provisions of Section 2 of this Agreement; or
(b) The expiration of thirty (30) days following the date
your employment terminates with the Corporation and any of its subsidiaries
included in the Plan for any reason, other than by reason of death or permanent
disability. As used herein, "permanent disability" means your inability to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than 12 months; or
(c) The expiration of 12 months following the date your
employment terminates with the Corporation and any of its subsidiaries included
in the Plan, if such employment termination occurs by reason of your death or
by reason of your permanent disability (as defined above).
6. SECURITIES LAWS.
The Option and the shares of Stock underlying the Option have
not been registered under the Securities Act of 1933, as amended (the "Act").
The Corporation has no obligations to ever register the Option or the shares of
Stock underlying the Option. All shares of Stock acquired upon the exercise of
the Option shall be "restricted securities" as that term is defined in Rule 144
promulgated under the Act. The certificate representing the shares shall bear
an appropriate legend restricting their transfer. Such shares cannot be sold,
transferred, assigned or otherwise hypothecated without registration under the
Act or unless a valid exemption from registration is then available under
applicable federal and state securities laws and the Corporation has been
furnished with an opinion of counsel satisfactory in form and substance to the
Corporation that such registration is not required.
14
<PAGE> 7
7. BINDING EFFECT. The rights and obligations described in this
letter shall inure to the benefit of and be binding upon both of us, and our
respective heirs, personal representatives, successors and assigns.
8. DATE OF GRANT. The Option shall be treated as having been
granted to you on the date of this letter even though you may sign it at a
later date.
Very truly yours,
By:
-------------------------------
President
AGREED AND ACCEPTED:
- ------------------------------
- -------------
15
<PAGE> 8
[NSO GRANT FORM
WITH RELOAD OPTIONS]
VIRAGEN, INC.
2343 West 76th Street
Hialeah, Florida 33016
Date: __________
__________
__________
__________
Dear __________:
The Board of Directors of Viragen, Inc. (the "Corporation") is pleased
to award you an Option pursuant to the provisions of the 1993 Stock Option Plan
(the "Plan"). This letter will describe the Option granted to you. Attached
to this letter is a copy of the Plan. The terms of the Plan also set forth
provisions governing the Option granted to you. Therefore, in addition to
reading this letter you should also read the Plan. Your signature on this
letter is an acknowledgement to us that you have read and understand the Plan
and that you agree to abide by its terms. All terms not defined in this letter
shall have the same meaning as in the Plan.
1. TYPE OF OPTION. You are granted an NSO. Please see in
particular Section 11 of the Plan.
2. RIGHTS AND PRIVILEGES.
(a) Subject to the conditions hereinafter set forth, we
grant you the right to purchase __________ shares of Stock at $__________ per
share, the current fair market value of a share of Stock. The right to
purchase the shares of Stock accrues in __________ installments over the time
periods described below:
The right to acquire __________ shares accrues on __________.
The right to acquire __________ shares accrues on __________.
(b) In addition to the Option granted hereby (the
"Underlying Option"), the Corporation will grant you a reload option (the
"Reload Option") as hereinafter provided. A Reload Option is hereby granted to
you if you acquire shares of Stock pursuant to the exercise of the Underlying
Option and pay for such shares of Stock with shares of Common Stock already
owned by you (the "Tendered Shares"). The Reload Option grants you the right
to
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<PAGE> 9
purchase shares of Stock equal in number to the number of Tendered Shares. The
date on which the Tendered Shares are tendered to the Corporation in full or
partial payment of the purchase price for the shares of Stock acquired pursuant
to the exercise of the Underlying Option is the Reload Grant Date. The
exercise price of the Reload Option is the fair market value of the Tendered
Shares on the Reload Grant Date. The fair market value of the Tendered Shares
shall be the low bid price per share of the Corporation's Common Stock on the
Reload Grant Date. The Reload Option shall vest equally over a period of
__________ (___) years, commencing on the first anniversary of the Reload Grant
Date, and on each anniversary of the Reload Grant Date thereafter; however, no
Reload Option shall vest in any calendar year if it would allow you to purchase
for the first time in that calendar year shares of Stock with a fair market
value in excess of $100,000, taking into account ISOs previously granted to
you. The Reload Option shall expire on the earlier of (i) __________ (___)
years from the Reload Grant Date, or (ii) in accordance with Paragraph 5(b), or
(iii) in accordance with Paragraph 5(c) as set forth herein. If vesting of the
Reload Option is deferred, then the Reload Option shall vest in the next
calendar year, subject, however, to the deferral of vesting previously
provided. Except as provided herein the Reload Option is subject to all of the
other terms and provisions of this Agreement governing Options.
3. TIME OF EXERCISE. The Option may be exercised at any time and
from time to time beginning when the right to purchase the shares of Stock
accrues and ending when they terminate as provided in Section 5 of this letter.
4. METHOD OF EXERCISE. The Options shall be exercised by written
notice to the Chairman of the Board of Directors at the Corporation's principal
place of business. The notice shall set forth the number of shares of Stock to
be acquired and shall contain a check payable to the Corporation in full
payment for the Stock or that number of already owned shares of Stock equal in
value to the total Exercise Price of the Option. We shall make delivery of the
shares of Stock subject to the conditions described in Section 13 of the Plan.
5. TERMINATION OF OPTION. To the extent not exercised, the
Option shall terminate upon the first to occur of the following dates:
(a) __________, 199_, being __________ years from the
date of grant pursuant to the provisions of Section 2 of this Agreement; or
(b) The expiration of three months following the date
your employment terminates with the Corporation and any of its subsidiaries
included in the Plan for any reason, other than by reason of death or permanent
disability. As used herein,
17
<PAGE> 10
"permanent disability" means your inability to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or which has lasted or can
be expected to last for a continuous period of not less than 12 months; or
(c) The expiration of 12 months following the date your
employment terminates with the Corporation and any of its subsidiaries included
in the Plan, if such employment termination occurs by reason of your death or
by reason of your permanent disability (as defined above).
6. SECURITIES LAWS.
The Option and the shares of Stock underlying the Option have
not been registered under the Securities Act of 1933, as amended (the "Act").
The Corporation has no obligations to ever register the Option or the shares of
Stock underlying the Option. All shares of Stock acquired upon the exercise of
the Option shall be "restricted securities" as that term is defined in Rule 144
promulgated under the Act. The certificate representing the shares shall bear
an appropriate legend restricting their transfer. Such shares cannot be sold,
transferred, assigned or otherwise hypothecated without registration under the
Act or unless a valid exemption from registration is then available under
applicable federal and state securities laws and the Corporation has been
furnished with an opinion of counsel satisfactory in form and substance to the
Corporation that such registration is not required.
7. BINDING EFFECT. The rights and obligations described in this
letter shall inure to the benefit of and be binding upon both of us, and our
respective heirs, personal representatives, successors and assigns.
8. DATE OF GRANT. The Option shall be treated as having been
granted to you on the date of this letter even though you may sign it at a
later date.
Very truly yours,
By:
-------------------------------
President
AGREED AND ACCEPTED:
- ------------------------------
- -----------------
18
<PAGE> 1
EXHIBIT 4(f)
Employment Agreement between Robert H. Zeiger
and the Company dated May 9, 1995
<PAGE> 2
EXHIBIT 4(f)
EMPLOYMENT AGREEMENT
AGREEMENT dated May 9, 1995 by and between VIRAGEN, INC., a Delaware
Corporation ("Employer or the "Company"), and ROBERT H. ZEIGER ("Employee").
W I T N E S S E T H
WHEREAS, Employer desires to employ Employee upon the terms and
conditions hereinafter set forth and Employee desires to accept employment upon
such terms and conditions; and
WHEREAS, Employer and Employee desire to set forth in writing the
terms and conditions of their agreements and understandings with respect to
Employee's employment by Employer.
NOW, THEREFORE, Employer hereby to employs Employee and Employee
hereby accepts employment under the following modified terms and conditions:
1. EMPLOYMENT
Employer hereby employs Employee, and Employee hereby accepts
employment by Employer, upon all the terms and conditions hereinafter set
forth.
2. TERM
Subject to the provisions for earlier termination set forth in
Section 9 hereof, this Agreement shall commence on the Effective Date (date of
execution of this Agreement) and shall end as of the close of business of the
day immediately preceding the second anniversary of the Effective Date (the
"Employment Term"). Notwithstanding any of the foregoing to the contrary, if
this Employment Agreement is terminated prior to the expiration of the
Employment Term, a year shall mean, with respect to the year during which
termination occurs, the period commencing on the first day of such year and
ending as of the close of business of the day of termination of Employee's
employment, and "Employment Term" shall mean the period commencing on the
Effective Date and ending as of the close of business of the day of termination
of Employee's employment.
3. EMPLOYEE'S REPRESENTATIONS AND WARRANTIES
Employee represents and warrants to Employer that he is free
to accept employment with Employer as contemplated herein and has no other
written or oral
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<PAGE> 3
obligations or commitments of any kind or nature which would in any way
interfere with his acceptance of employment pursuant to the terms hereof or the
full performance of his obligations hereunder or the exercise of his best
efforts in his employment hereunder.
4. DUTIES AND EXTENT OF SERVICES
Employee shall be employed as Employer's Chief Executive
Officer and Chief Operating Officer, as such, shall, subject to the direction
of Employer's President, supervise the conduct of Employer's operations and
affairs, consistent with the position of Chief Executive Officer and Chief
Operating Officer, and perform such other duties and responsibilities as may be
reasonably assigned to Employee from time to time consistent with such title by
the Employer's President. Employee agrees to devote sufficient time, skill,
attention and energy to perform the duties and responsibilities reasonably
assigned to him hereunder or pursuant hereto to the best of his abilities.
Employee shall use his best efforts to be loyal and faithful at all times and
constantly endeavor to improve his ability and his knowledge of the business of
Employer in an effort to increase the value of his services for the mutual
benefit of Employer and Employee. Employee agrees not to enter into any other
employment agreement during the term hereof.
5. COMPENSATION
Employee shall receive an annual salary of $120,000 during the
Employment Term payable in accordance with the Company's normal payroll
process, currently bi-weekly. Employee is also entitled to receive fringe
benefits that shall be made available to Employee described in this Agreement.
6. FRINGE BENEFITS AND EXPENSES
A. Employee Plans. Employee shall be eligible (subject to
the terms and conditions of particular plans and programs) to participate in
such medical, hospitalization, group health, accident, disability and life
insurance programs and plans, such pension, profit sharing, stock option,
incentive compensation and stock purchase plans and such other employee benefit
programs to the same extent such plans and programs are made generally
available from time to time by Employer to all of its other executives;
provided, however, Employer shall be under no obligation to make any of such
plans or programs available to its employees or continue any which currently or
in the future exist, except as otherwise required by law.
B. Other Expenses. Employer shall promptly pay directly or
reimburse Employee for his reasonable out-of-pocket costs and expenses
incurred in connection with the performance of his duties and responsibilities
hereunder subject to the submission by Employee of appropriate invoices,
receipts and other supporting documentation, consistent with Employer's
customary reimbursement policies and procedures.
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<PAGE> 4
C. Automobile. For the term of this Agreement, Employer
shall provide to Employee an automobile, the type of vehicle to be approved by
the President, with related gas, maintenance and insurance expense, for
performance of Employee's duties to Employer as specified herein.
7. VACATIONS
Employee shall be entitled to normal vacation (of not less
than two weeks) taken by other members of senior management during each
twelve-month period of the Employment Term. Employee shall not be entitled to
be compensated for any unused vacation upon termination of this Agreement. The
periods during which Employee will be absent from work shall be determined by
Employee taking into account the needs of Employer's business and shall be
subject to the approval of the President (which shall not be unreasonably
withheld).
8. FACILITIES
Employer shall provide and maintain (or cause to be provided
and maintained) such facilities, equipment, supplies and personnel as it
reasonably determines is adequate for Employee's performance of his duties and
responsibilities under this Agreement.
9. TERMINATION OF EMPLOYMENT
A. Termination Events. Notwithstanding any provisions of
this Agreement to the contrary, Employee's employment may be terminated by
Employer with Cause (as hereinafter defined) effective upon the delivery of
written notice to Employee. In addition, Employee's employment shall terminate
(i) upon Employee's death or (ii) upon Employee becoming Disabled (as
hereinafter defined).
B. Definition of Disabled. For purposes of this Agreement,
Employee shall be deemed to be "Disabled" when, by reason of physical or mental
illness or of injury as confirmed by competent medical evidence, he is unable
to perform substantially all of the duties and responsibilities required of him
in connection with his employment hereunder. No disability shall be deemed to
exist until after Employee shall be unable to perform his duties hereunder for
ninety (90) consecutive days (the "Disability Period"). If Employee shall have
been under a disability but shall have returned to work prior to the end of the
Disability Period, any new disability commencing within thirty (30) days of the
termination of the prior disability shall be a continuation of the prior
disability, and the period of all such disabilities shall be added together to
determine whether, or how much of, the Disability Period has elapsed.
3
<PAGE> 5
C. Definition of Cause. For purposes of this Agreement,
"Cause" shall be: (a) felony conviction for fraud or criminal conduct (other
than conviction of, or a plea of guilty to, a traffic violation), from which no
appeal can be taken; (b) habitual drunkenness or drug addiction; (c)
embezzlement; (d) material sanctions against Employee in his capacity as an
employee of Employer by regulatory agencies governing Employer or against
Employer because of wrongful acts or conduct of Employee which have a material
adverse affect upon the Employer and its business; (e) material breach or
default by Employee of any of the material terms or conditions of this
Agreement, and the continuation of such material breach or default by Employee
for a period of seven (7) days following the date of receipt of written notice
from Employer specifying the material breach of default of Employee or (f) the
resignation or quitting of Employee prior to the end of the Employment Term (in
this last event, Employee's employment shall be deemed terminated with cause on
the date that he resigns or quits).
If Employee's employment is terminated by Employer without Cause as
defined in this Section, Employee shall be given sixty (60) days written notice
of termination by Employer and be entitled to receive the greater of (i) two
years compensation and fringe benefits/expenses as provided for in Sections 5 &
6 hereof or (ii) compensation and fringe benefits/expenses as provided for in
sections 5 & 6 payable through the remainder of the Employment Term as provided
for in Section 2 hereof. Additionally, in the event of termination without
Cause, any outstanding but unexercised stock options or warrants granted to
Employee, including those described in Section 14 hereof, shall immediately
vest and become fully exercisable through their stated respective Exercise
Period(s).
If Employee's employment is terminated for cause, Employee will be
entitled to receive the equivalent of one month's salary from the date of such
termination.
10. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION
A. Confidential Information. Employee acknowledges that
Employee has been informed that it is the policy of Employer to maintain as
secret and confidential all information relating to (i) the financial
condition, businesses and interests of Employer and its affiliates, (ii) the
systems, know-how, products, services, costs, inventions, patents, patent
applications, formulae, research and development procedures, notes and results,
computer software programs, marketing and sales techniques and/or programs,
methods, methodologies, manuals, lists and other trade secrets heretofore or
hereafter acquired, sold, developed and/or used by Employer and its affiliates
and (iii) the nature and terms of Employer's and its affiliates' relationships
with their respective customers, clients, suppliers, lenders, vendors,
consultants, independent contractors and employees (all such information being
hereinafter collectively referred to as "Confidential Information"), and
Employee further acknowledges that such Confidential Information is of great
value to Employer and its affiliates and, in and by reason and as a result of
Employee's employment by Employer, Employee will be making use of, acquiring
and/or adding to such Confidential Information.
4
<PAGE> 6
Therefore, Employee understands that it is reasonably necessary to protect
Employer's and its affiliates' trade secrets, good will and business interests
that Employee agree and, accordingly, Employee does hereby agree, that Employee
will not directly or indirectly (except where authorized by the President of
Employer for the benefit of Employer and/or its affiliate(s) and/or as required
in the course of his employment) at any time hereafter divulge or disclose for
any purpose whatsoever to any persons, firms, corporations or other entities
other than Employer or its affiliates (hereinafter referred to collectively as
"Third Parties"), or use or cause or authorize any Third Parties to use, any
such Confidential Information, except as otherwise required by law.
B. Employer's Materials. In accordance with the foregoing,
Employee furthermore agrees that (i) Employee will at no time retain or remove
from the premises of Employer or its affiliates any research and development
materials, drawings, notebooks, notes, reports, formulae, software programs or
discs or other containers of software, manuals, data, books, records, materials
or documents of any kind or description for any purpose unconnected with the
strict performance of Employee's duties with Employer and (ii) upon the
cessation or termination of Employee's employment with Employer for any reason,
Employee shall forthwith deliver or cause to be delivered up to Employer any
and all research and development materials, drawings, notebooks, notes,
reports, formulae, software programs or discs or other containers of software,
manuals, data, books, records, materials and other documents and materials in
Employee's possession or under Employee's control relating to any Confidential
Information or any property or information which is otherwise the property of
Employer or its affiliates.
11. COVENANT-NOT-TO-COMPETE
In view of the Confidential Information to be obtained by or
disclosed to Employee, because of the know-how acquired and to be acquired by
Employee, and as a material inducement to Employer to enter into this Agreement
and continue to employ Employee, Employee covenants and agrees that, so long as
Employee is employed by Employer and for a period of two (2) years after
Employee ceases for any reason to be employed by Employer, Employee shall not,
directly or indirectly (i) divert business from, (ii) solicit or transact any
business competitive with Employer or its affiliates with, or (iii) sell any
products or services sold or offered by Employer or its affiliates to, any
customer or former customer of Employer or its affiliates. In addition,
Employee covenants and agrees that, so long as Employee is employed by Employer
and for a period of two (2) years after Employee ceases for any reason to be
employed by Employer, Employee hereby agrees to refrain from, anywhere in the
world (the "Geographical Area"), directly or indirectly owning, managing,
operating, controlling or financing, or participating in the ownership,
management, control or financing, or participating in the ownership,
management, control or financing of, or being connected with or having an
interest in, or otherwise taking any part as a stockholder, director, officer,
employee, agent, consultant, partner or otherwise in, any business competitive
with that engaged in or being developed by Employer or its affiliates during
5
<PAGE> 7
Employee's term of employment. Employer's business is acknowledged to be the
development, manufacture and sale of human leukocyte interferon therapy
products and other derivative natural or recombinant technologies aimed at
enhancing the human immune system, including cosmetic applications. Employee
acknowledges that Employer's business is anticipated to be international in
scope, that a similar business could effectively compete with Employer's and
its affiliates businesses from any location in the world, and that, therefore,
the restricted Geographical Area is reasonable in scope to protect Employer's
and its affiliates' trade secrets and legitimate business interests.
12. EMPLOYER'S REMEDIES FOR BREACH
OF SECTIONS 10 AND 11
Employee covenants and agrees that if Employee shall violate
or breach any of Employee's covenants or agreements provided for in Sections 10
and 11 hereof, Employer and/or its affiliates shall be entitled to an
accounting and repayment of all profits, compensation, commissions,
remunerations or benefits which Employee directly or indirectly has realized or
realizes as a result of, growing out of or in connection with any such
violation or breach. In addition, in the event of a breach or violation or
threatened or imminent breach or violation of any provisions of Sections 10 or
11 hereof, Employer and/or its affiliates shall be entitled to a temporary and
permanent injunction or any other appropriate decree of specific performance or
equitable relief, without posting of bond, from a court of competent
jurisdiction in order to prevent, prohibit or restrain any such breach or
violation or threatened or imminent breach or violation by Employee, by
Employee's partners, agents, representatives, servants, employers or employees
and/or by any third parties. Employer shall be entitled to such injunctive or
other equitable relief in addition to any damages which are suffered, and the
prevailing party shall be entitled to reasonable attorneys' and paralegals'
fees and costs and other costs incurred in connection with any such litigation,
both before and at trial and at all tribunal levels. Resort by Employer and/or
its affiliates to such injunctive or other equitable relief shall not be deemed
to waive or to limit in any respect any other rights or remedies which Employer
or its affiliates may have with respect to such breach or violation.
13. REASONABLENESS OF RESTRICTIONS
A. Reasonableness. Employee acknowledges that any breach or
violation of Sections 10 or 11 hereof will cause irreparable injury and damage
and incalculable harm to Employer and its affiliates and that it would be very
difficult or impossible to measure the damages resulting from any such breach
or violation. Employee further acknowledges that Employee has carefully read
and considered the provisions of Sections 10, 11 and 12 hereof and, having done
so, agrees that the restrictions and remedies set forth in such Sections
(including, but not limited to, the time period, geographical and types of
restrictions imposed) are fair and reasonable and are reasonably required for
the protection of the business, trade secrets, interests and good will of
Employer and its affiliates.
6
<PAGE> 8
B. Severability. Employee understands and intends that each
provision and restriction agreed to by Employee in Sections 10, 11 and 12
hereof shall be construed as separate and divisible from every other provision
and restriction and that, in the event that any one of the provisions of, or
restrictions in, Sections 10, 11 and/or 12 hereof shall be held to be invalid
or unenforceable, the remaining provisions thereof and restrictions therein
shall nevertheless continue to be valid and enforceable as though the invalid
or unenforceable provisions or restrictions had not been included therein, and
any one or more of such valid provisions and restrictions may be enforced in
whole or in part as the circumstances warrant. In the event that any such
provision relating to time period and/or geographical and/or type of
restriction shall be declared by a court of competent jurisdiction to exceed
the maximum or permissible time period, geographical area or type of
restriction such court deems reasonable and enforceable, said time period
and/or geographical and/or type of restriction shall be deemed to become and
shall thereafter be the maximum time period and/or geographical restriction
and/or type of restriction which such court deems reasonable and enforceable.
C. Survivability. The restrictions, acknowledgments,
covenants and agreements of Employee set forth in Sections 10, 11, 12 and 13 of
this Agreement shall survive any termination of this Agreement or of Employee's
employment (for any reason, including expiration of the Employment Term).
D. Comparable Restrictions. Employer agrees that it will use
its best efforts to have other senior executives execute and observe agreements
containing similar provisions as are contained in Sections 10, 11 and 12
hereof.
14. STOCK OPTIONS
Effective the Effective Date, Employer hereby grants to
Employee options to acquire up to 1,000,000 shares of Employer's Common Stock
(the "Options"), subject to and upon the following terms and conditions:
(a) The Options shall be exercisable by Employee (i)
with respect to up to 500,000 shares of Common Stock, during the period
commencing on the day immediately preceding the 1st anniversary of the
Effective Date and shall end as of the close of business on the day immediately
preceding the end of the 60th month following the Effective Date (the "First
Exercise Period"), and (ii) with respect to 500,000 shares of Common Stock,
during the period commencing on the day immediately preceding the second
anniversary of the Effective Date, and shall end as of the close of business on
the day immediately preceding the end of the 60th month following the first
anniversary of the Effective Date (the "Second Exercise Period").
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<PAGE> 9
(b) In the event Employee's employment is
terminated with Cause, all unexercised Options, and all Options which have been
exercised but which exercise has not been consummated by tender of payment for
the purchase of Common Stock, shall automatically terminate 90 days from the
date of Termination with Cause.
(c) In the event of Employee's termination without
Cause, all outstanding but unexercised Options shall immediately vest and become
fully exercisable in accordance with the provisions of this Section 14. In the
event this Agreement is not renewed at the end of the initial Employment Term,
then the Options shall continue to be exercisable in accordance with the
provisions of this Section 14.
(d) All outstanding but unexercised Options shall
immediately vest and become fully exercisable in accordance with the provisions
of this Section 14:
(i) if there occurs any corporate
transaction (which shall include a series of corporate transactions occurring
within 60 days or occurring pursuant to a plan), that has the result that
shareholders of the Employer immediately before such transaction cease to own
at least 66 2/3 percent of the voting stock of the Employer or of any entity
that results from the participation of the Employer in a (a) reorganization,
(b) consolidation, (c) merger, (d) liquidation or (e) a similar of corporate
transaction;
(ii) if the shareholders of the Employer
shall approve a plan of merger, consolidation, reorganization, liquidation or
dissolution in which the Employer does not survive (unless the approved merger,
consolidation, reorganization, liquidation or dissolution is subsequently
abandoned); or
(iii) if the shareholders of the Employer
shall approve a plan for the sale, lease, exchange or other disposition of all
or substantially all the property and assets of the Employer (unless such plan
is subsequently abandoned).
(e) In the event Employee dies or becomes
Disabled, Employee or his personal representative shall have a period of twelve
(12) months following the date of Employee's death or the last day of the
Disability period (as the case may be) to exercise all Options which were
exercisable on the date of Employee's death or that he became Disabled (as the
case may be).
(f) Employee may, within the First Exercise
Period, exercise the Options with the respect to up to 500,000 shares of Common
Stock, by delivering written notice of exercise to Employer during the First
Exercise Period ("Exercise Notice"). Such Options may be exercised, in whole
or in part, as specified in the Exercise Notice. Employee may, within the
Second Exercise Period, whether or not Options have been exercised during the
First Exercise Period, exercise the Options with the respect to up to 500,000
shares of Common Stock, in whole or in part, by delivering the Exercise Notice
to Employer;
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<PAGE> 10
provided, however, that, notwithstanding anything in this Section 14 to the
contrary, to the extent that Employee fails to exercise all of the Options
which he is entitled to exercise during the First Exercise Period, Employee
shall be entitled during the Second Exercise Period to exercise, in addition to
the Options exercisable during the Second Exercise Period pursuant to
subsection (a) (ii) above, the Options exercisable during the First Exercise
Period pursuant to subsection (a) (i) above which were not exercised during the
First Exercise Period.
(g) The purchase price payable for the Common
Stock pursuant to the Options shall be 80% of the average market price of the
Common Stock calculated over the 60 days preceding the effective date of this
Agreement or ("Option Purchase Price"). At the Employee's option, the payment
for the shares of Common Stock may be made either by check payable to the
Employer or by execution and delivery by the Employee to Employer of a Note(s)
dated as of each Exercise Notice. The Note referred to herein shall be in the
identical form attached as Exhibit A to Gerald Smith's (the Company's
President) Employment Agreement dated November 19, 1993, as may be modified
from time to time. The manner in which shares are pledged as collateral (if a
Note is used) shall be in accordance with Section 15 herein. In the event that
Employee exercises Options during the First Exercise Period, the purchase price
for the Common Stock to be purchased by Employee shall equal the number of
shares of Common Stock (up to 500,000) with respect to which Employee has
exercised the Options, multiplied the "Option Purchase Price". In the event
that employee exercises Options during he Second Exercise Period, the purchase
price for the Common Stock to be purchased by Employee shall equal the number
of shares of Common Stock (up to 1,000,000, less the number of shares, if any,
acquired during the First Exercise Period) with respect to which Employee has
exercised the Options, multiplied the "Option Purchase Price".
(h) The closing of the purchase of shares of
Common Stock pursuant to the exercise of Options during the First Exercise
Period or the Second Exercise Period (as the case may be, an "Option Closing"),
shall occur no later than on the tenth (10th) business day following the date
the applicable exercise Notice was given. At the Option Closing (or at each
Option Closing, if more than one), Employer shall issue to Employee a stock
certificate evidencing the First Option Purchased Stock or the Second Option
Purchased Stock, as the case may be.
(i) At Employee's request, subject to the
provisions of Section 15 & 16 and any applicable securities laws, Employee may
designate his spouse, parents, children, siblings, nieces or nephews or a trust
for their benefit of which Employee is sole trustee to own and hold record or
beneficial title to all or portions of the First Option Purchased Stock and
Second Option Purchased Stock.
(j) The Options granted hereunder are personal to
Employee, and, except as permitted by subsection (e) and (i) above, may not be
sold, assigned, devised, transferred, pledged, hypothecated or in any way
disposed of, by operation of law or
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otherwise, at any time. Any purported sale, assignment, devise, transfer,
pledge, hypothecation or disposition shall be utterly void and of no force or
effect.
(k) If at any time while unexercised Options are
outstanding, there shall be any increase or decrease in the number of issued
and outstanding Shares through the declaration of a stock dividend or through
any recapitalization resulting in a stock split-up, combination or exchange of
Shares, then and in such event:
(i) appropriate adjustment shall be made in
the maximum number of Shares available for grant, so that the same percentage
of the Employers issued and outstanding Shares shall continue to be subject to
being so optioned; and
(ii) appropriate adjustment shall be made in
the number of Shares and the exercise price per Share thereof then subject to
any outstanding Option, so that the same percentage of the Employers issued and
outstanding shares shall remain subject to purchase at the same aggregate
exercise price.
(l) Employer grants Piggyback Registration Rights to
Employee and agrees that in the event of the Employer's filing of any stock
registrations on Form S-8 or other available registration form under the
Securities Act of 1933, the Employer will register any and all shares purchased
by Employee under the First Exercise Period and/or the Second Exercise Period.
In the event that the Options under the First Exercise Period and/or the Second
Exercise Period have not been exercised, in whole or in part, the Employer
agrees to include in such registrations any and all such shares underlying the
Options. Employer shall pay all costs and expenses of such registrations,
excluding fees and expenses of counsel for and other professionals advising
Employee, and underwriting discounts, commissions or expenses of Employee with
respect to the sale of the stock. Employer shall also register Employee's
stock in those reasonable jurisdictions in which Employee reasonably expects to
sell his stock; provided however, that Employer shall not be required to
qualify to do business in such jurisdiction or commit to a general consent to
service of process within the jurisdiction.
In the case of any registrations pursuant to this Subsection (l),
Employer (i) will keep Employee advised as to the initiation and progress of
proceedings for such registrations and as to the completion thereof, and (ii)
at its expense will keep such registrations effective for a period of at least
nine months from the initial effective date of the registrations. Employee
agrees to provide such information to Employer as is reasonably requested by
Employer which Employer believes is necessary in order for Employer to register
the stock, and Employee shall execute such documents, certificates and other
instruments as Employer reasonably determines is necessary or appropriate in
connection therewith.
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15. PLEDGE OF STOCK
Effective upon Employee's purchase of the Common Stock (the
"Stock") and the delivery of the Note(s), if same occurs, in order to secure
Employee's obligations under the Note(s), Employee hereby pledges, assigns and
sets over to Employer, and grants to Employer a security interest in, the
Stock. The Stock pledged pursuant hereto shall be maintained in escrow with
Atlas, Pearlman, Trop & Borkson, P.A. pursuant to the same terms of a Pledge
and Escrow Agreement attached as Exhibit B to Gerald Smith's Employment
Agreement dated November 19, 1993, as may be modified from time to time. As
long as any shares of Stock remain subject to the lien of the Pledge, such
shares of Stock may not be further pledged or encumbered in any manner, and
shall not be sold, transferred or otherwise disposed of, or attempted so to be,
except pursuant to a registration of the Stock pursuant to Section 14 above.
In the event of a registration, the Escrow Agent shall not be required to
relinquish the Pledge or the Escrow Agent's possession of the certificates
evidencing the Stock, unless no later than concurrently with the sale of the
Stock pursuant to the registration all Employee Notes which are secured by such
Stock are paid in full. In the event any of the Stock is to be titled in the
name of an immediate family member of Employee or a trust pursuant to Section
14, as a condition thereto the designated title holder(s) of such Stock shall
execute and deliver to Employer a pledge and escrow agreement, in form and
content reasonably satisfactory to Employer and its counsel, consistent with
the terms of this Section 15. No transfer of Stock to, or designation by
Employee of (for the purposes of owning Stock) any person or entity shall
relieve Employee of any of his obligations under the Employee Note(s) or this
Agreement. With respect to each Employee Note under which a voluntary
prepayment is made by Employee, provided that interest payments on such
Employee Note are current through the date of prepayment and such Employee Note
is not in default and has not been accelerated, Employee may pay sufficient
principal such that for each such transaction 10,000 shares of the Stock
pledged to secure such Employee Note shall be released from the lien of the
Pledge. As long as no event of default has occurred with respect to an
Employee Note and no event giving right to accelerate such Employee Note has
occurred, Employee shall retain all voting rights with respect to all Stock
securing such Employee Note. Following an event of default or a acceleration
event, Employer shall have an may exercise all voting rights with respect
to such Stock. Employee hereby irrevocably appoints Employer Employee's
attorney-in-fact for such purpose, it being acknowledged that such
appointment is coupled with an interest. Any dividends or distributions
payable in respect of any Stock subject to the Pledge shall automatically be
applied to pay down the Employee Note(s) in inverse order of their respective
maturity date(s). In the event of a default under any Employee Note, in
addition to and not in limitation or lieu of any other rights or remedies
Employer may have against Employee as a result of such default, Employer may
exercise all of its rights at law and in equity as a secured party, including
without limitation under the Uniform Commercial Code, with respect to all Stock
then securing the Employee Note with respect to which the default has occurred.
Upon a default, without limiting any of Employer's other rights and remedies,
Employer may conduct a public or private foreclosure sale of the Stock securing
the Employee Note with
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respect to which the default has occurred. Employee agrees that 10 days notice
to him of any private sale is fair and reasonable. Employer may be the
purchaser at any public foreclosure sale, and may bid any commercially
reasonable amount at such sale. In all events, in the event of a public or
private foreclosure sale, Employee shall be liable for any deficiency. All of
Employer's rights and remedies under the Employee Note(s), the Pledge and this
Agreement, and at law or in equity, are cumulative, and none is intended to be
in substitution or in lieu of, nor is the exercise of one intended to be a
waiver of, any other. Employer shall have no obligation to proceed against the
Stock before proceeding against Employee with respect to any default under any
of the Employee Notes.
16. EMPLOYEE'S DISCLOSURES AND REPRESENTATIONS
AND WARRANTIES.
Employee hereby acknowledges, represents and warrants
to, and/or agrees with, Employer as follows:
(a) That Employee and his representatives and
agents (i) have received and read and are familiar with this Agreement. (ii)
are familiar with the business and operations conducted and to be conducted by
Employer and the risks attendant thereto, (iii) have been given access to and
have examined or have had an opportunity to examine before the date hereof all
applicable agreements, documents, records and books and such other applicable
information as are available and relevant to such business and operations and
to enable them to verify the accuracy of any information, agreements,
documents, records or books provided to them.
(b) That Employee and/or his representatives and
agents have had an opportunity to ask questions of and receive satisfactory
answers from Employer and/or a person or persons authorized to act on
Employer's behalf concerning the terms and conditions of this Agreement, this
transaction and Employer and its currently contemplated business and
operations.
(c) That Employee has been represented by such
legal and other professional advisors (if any), each of whom has been
personally selected by Employee, as Employee has found necessary to consult
concerning the transactions contemplated in or by this Agreement.
(d) That Employee has full right, power and
authority to perform all obligations under this Agreement.
Employee hereby agrees to indemnify and hold harmless Employer
and its shareholders, directors, officers, employees and agents from and
against any and all loss, damage, liability, cost or expense (including
reasonable attorneys' and paralegals' fees and costs before and at trial and at
all appellate levels) due to or arising out of any inaccuracy in,
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or breach of, any representation, warranty or covenant of Employee contained in
this Section 16.
17. INDEPENDENT COUNSEL
Employer and Employee agree that each of them have been, or
were advised and fully understand that they are entitled to be, represented by
independent legal counsel with respect to all matters contemplated herein, from
the commencement of negotiations at all times through the execution hereof.
18. LAW APPLICABLE
This Agreement shall be governed by and construed pursuant to
the laws of the State of Florida, without giving effect to conflicts of laws
principles.
19. NOTICES
Any notices required or permitted to be given pursuant to this
Agreement shall be sufficient, if in writing, and if personally delivered or
sent by certified or registered mail, return receipt requested, to his
residence, in the case of Employee, or to its then principal office, in the
case of Employer.
20. SUCCESSION
This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective legal representatives, heirs,
assignees and/or successors in interest of any kind whatsoever; provided,
however, that Employee acknowledges and agrees that he cannot assign or
delegate any of his rights, duties, responsibilities or obligations hereunder
to any other person or entity.
21. ENTIRE AGREEMENT
This Agreement constitutes the entire final agreement between
the parties with respect to, and supersedes any and all prior agreements
between the parties hereto both oral and written concerning, the subject matter
hereof and may not be amended, modified or terminated except by a writing
signed by the parties hereto.
22. SEVERABILITY
If any provision of this Agreement shall be held to be invalid
or unenforceable, and is not reformed by a court of competent jurisdiction,
such invalidity or unenforceability shall attach only to such provision and
shall not in any way affect or render
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invalid or unenforceable any other provision of this Agreement, and this
Agreement shall be carried out as if such invalid or unenforceable provision
were not contained herein.
23. NO WAIVER
A waiver of any breach or violation by either party of any
term, provision or covenant contained herein shall not be deemed a continuing
waiver or a waiver of any future or past breach or violation. No oral waiver
shall be binding.
24. ATTORNEYS' FEES
In the event that either of the parties to this Agreement
institutes suit against the other party to this Agreement to enforce any of his
or its rights hereunder, the prevailing party in such action shall be entitled
to recover from the other party all reasonable costs thereof, including
reasonable attorneys' and paralegals' fees and costs incurred before and at
trial and at all tribunal levels.
25. INDEMNITY OF EMPLOYEE
Employer shall indemnify and hold harmless Employee from and
against any and all claims, judgments, fines, penalties, liabilities, losses,
costs and expenses (including reasonable attorneys' fees and costs) asserted
against or incurred by Employee as a result of acts or omissions of Employee
taken or made in the course of performing his duties for Employer or by reason
of Employee acting or having acted as an officer of Employer, to the maximum
extend permitted by law, including Section 607.0850, Florida Statutes
(including the advancement of expense provisions thereof); provided, however,
that such indemnity shall not apply to acts or omissions of Employee which
constitute misconduct, gross negligence or which were intended by Employee to
personally benefit Employee, directly or indirectly, at the expense of
Employer, unless the matter which benefits Employee was first fully disclosed
to the Board of Directors of Employer and approved by said Board.
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IN WITNESS WHEREOF, the undersigned have hereunto set their hands on
the day and year first above written.
VIRAGEN, INC.
By:
---------------------------------
GERALD SMITH
President
---------------------------------
ROBERT H. ZEIGER
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EXHIBIT 4(g)
Form of Employment Agreements with Messrs. Joseph P. Morris,
Robert Feldman, Hipolito Hartman, Alex Canales,
David Squillacote and W. Richard Leuck and the Company
<PAGE> 2
EXHIBIT 4(g)
EMPLOYMENT AGREEMENT
AGREEMENT dated _______(the "Effective Date"), by and between VIRAGEN,
INC., a Delaware Corporation ("Employer" or the "Company"), and ___________
("Employee").
W I T N E S S E T H:
WHEREAS, Employer desires to employ Employee upon the terms and
conditions hereinafter set forth and Employee desires to accept employment upon
such terms and conditions; and
WHEREAS, Employer and Employee desire to set forth in writing the
terms and conditions of their agreements and understandings with respect to
Employee's employment by Employer.
NOW, THEREFORE, Employer hereby employs Employee and Employee hereby
accepts employment under the following terms and conditions:
1. EMPLOYMENT
Employer hereby employs Employee, and Employee hereby accepts
employment by Employer, upon all the terms and conditions hereinafter set
forth.
2. TERM
Subject to the provisions for earlier termination set forth in
Section 9 hereof, this Agreement shall commence on the Effective Date and shall
end as of the close of business of the day immediately preceding the first
anniversary of the Effective Date (the "Employment Term"). Notwithstanding any
of the foregoing to the contrary, if this Employment Agreement is terminated
prior to the expiration of the Employment Term, a year shall mean, with respect
to the year during which termination occurs, the period commencing on the first
day of such year and ending as of the close of business of the day of
termination of Employee's employment, and "Employment Term" shall mean the
period commencing on the Effective Date and ending as of the close of business
of the day of termination of Employee's employment.
3. EMPLOYEE'S REPRESENTATIONS AND WARRANTIES
Employee represents and warrants to Employer that he is free
to accept full-time employment with Employer as contemplated herein and has no
other written or oral obligations or commitments of any kind or nature which
would in any way interfere with his acceptance of employment pursuant to the
terms hereof or the full performance of his obligations hereunder or the
exercise of his best efforts in his employment hereunder. Employee
represents and
<PAGE> 3
warrants that he is not in breach of any existing confidentiality or covenant
not to complete agreements, if any, the Employee may have executed with other
third parties prior to the Effective Date.
4. DUTIES AND EXTENT OF SERVICES
Employee shall be employed as__________, and as such, shall,
subject to the direction of the Company's President, perform such duties and
responsibilities as may be assigned to Employee from time to time by the
Company's President and/or Executive Committee.
Employee agrees to devote sufficient time, skill, attention and energy
diligently and competently to perform the duties and responsibilities assigned
to him hereunder or pursuant hereto. Employee shall use his best efforts to be
loyal and faithful at all times and constantly endeavor to improve his ability
and his knowledge of the business of Employer in an effort to increase the
value of his services for the mutual benefit of Employer and Employee.
Employee agrees not to enter into any other employment agreement with any third
party during the term hereof.
5. COMPENSATION
Employee shall receive a salary of ________ per year during
the term of this Agreement payable in accordance with the Company's normal
payroll process, currently bi-weekly. Employee is also entitled to receive
fringe benefits that shall be made available to Employee described in this
Agreement.
6. FRINGE BENEFITS AND EXPENSES
A. Employee Plans. Employee shall be eligible (subject to
the terms and conditions of particular plans and programs) to participate in
such medical, hospitalization, group health, accident, disability and life
insurance programs and plans, such pension, profit sharing, stock option,
incentive compensation and stock purchase plans and such other employee benefit
programs to the same extent such plans and programs are made generally
available from time to time by Employer to all of its other similarly-situated
employees; provided, however, Employer shall be under no obligation to make any
of such plans or programs available to its employees or continue any which
currently or in the future exist, except as otherwise required by law.
B. Other Expenses. Employer shall reimburse Employee for his
reasonable out-of-pocket costs and expenses, approved by the Company's
President in advance, incurred in connection with the performance of his duties
and responsibilities hereunder. Reimbursement of such expenses shall be
subject to the submission by Employee of appropriate invoices, receipts and
other supporting documentation, consistent with Employer's customary
reimbursement policies and procedures.
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7. VACATIONS
Employee shall be entitled to normal vacation taken by other
similar employees during the Employment Term. Employee shall not be entitled
to be compensated for any unused vacation upon termination of this Agreement.
The periods during which Employee will be absent from work shall be determined
by Employee taking into account the needs of Employer's business and shall be
subject to the approval of the Executive Committee of the Company (which shall
not be unreasonably withheld).
8. FACILITIES
Employer shall provide and maintain (or cause to be provided
and maintained) such facilities, equipment, supplies and personnel as it
reasonably determines is adequate for Employee's performance of his duties and
responsibilities under this Agreement.
9. TERMINATION OF EMPLOYMENT
A. Termination Events. Notwithstanding any provisions of
this Agreement to the contrary, Employee's employment may be terminated by
Employer with Cause (as hereinafter defined) effective upon the delivery of
written notice to Employee. In addition, Employee's employment shall terminate
(i) upon Employee's death or (ii) upon Employee becoming Disabled (as
hereinafter defined).
B. Definition of Disabled. For purposes of this
Agreement, Employee shall be deemed to be "Disabled" when, by reason of
physical or mental illness or of injury, he is unable to perform substantially
all of the duties and responsibilities required of him in connection with his
employment hereunder. No disability shall be deemed to exist until after
Employee shall be unable to perform his duties hereunder for ninety (90)
consecutive days (the "Disability Period"). If Employee shall have been under
a disability but shall have returned to work prior to the end of the Disability
Period, any new disability commencing within thirty (30) days of the
termination of the prior disability shall be a continuation of the prior
disability, and the period of all such disabilities shall be added together to
determine whether, or how much of, the Disability Period has elapsed.
C. Definition of Cause. For purposes of this Agreement,
"Cause" shall include, but not limited to: (a) conviction for fraud or criminal
conduct (other than conviction of, or a plea of guilty to, a non-DUI related
traffic violation) (b) habitual drunkenness or drug addiction; (c)
embezzlement; (d) sanctions against Employee in his capacity as an employee of
Employer by regulatory agencies governing Employer or against Employer because
of wrongful acts or conduct of Employee; (e) material breach or default by
Employee of any of the terms or conditions of this Agreement; or (f) the
resignation or quitting of Employee prior to the end of the Employment Term (in
this last event, Employee's employment shall be deemed terminated with Cause on
the date that he resigns or quits).
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<PAGE> 5
10. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION
A. Confidential Information. Employee acknowledges that
Employee has been informed that it is the policy of Employer to maintain as
secret and confidential all information relating to (i) the financial
condition, businesses and interests of Employer and its affiliates, (ii) the
systems, know-how, products, services, costs, inventions, patents, patent
applications, formulae, research and development procedures, notes and results,
computer software programs, marketing and sales techniques and/or programs,
methods, methodologies, manuals, lists and other trade secrets heretofore or
hereafter acquired, sold, developed and/or used by Employer and its affiliates
and (iii) the nature and terms of Employer's and its affiliates' relationships
with their respective customers, clients, suppliers, lenders, vendors,
consultants, independent contractors and employees (all such information being
hereinafter collectively referred to as "Confidential Information"), and
Employee further acknowledges that such Confidential Information is of great
value to Employer and its affiliates and, in and by reason and as a result of
Employee's employment by Employer, Employee will be making use of, acquiring
and/or adding to such Confidential Information. Therefore, Employee
understands that it is reasonably necessary to protect Employer's and its
affiliates' trade secrets, good will and business interests that Employee agree
and, accordingly, Employee does hereby agree, that Employee will not directly
or indirectly (except where authorized by the President of Employer for the
benefit of Employer and/or its affiliate(s) and/or as required in the course of
his employment) at any time hereafter divulge or disclose for any purpose
whatsoever to any persons, firms, corporations or other entities other than
Employer or its affiliates (hereinafter referred to collectively as "Third
Parties"), or use or cause or authorize any Third Parties to use, any such
Confidential Information, except as otherwise required by law.
B. Employer's Materials. In accordance with the
foregoing, Employee furthermore agrees that (i) Employee will at no time retain
or remove from the premises of Employer or its affiliates any research and
development materials, drawings, notebooks, notes, reports, formulae, software
programs or discs or other containers of software, manuals, data, books,
records, materials or documents of any kind or description for any purpose
unconnected with the strict performance of Employee's duties with Employer and
(ii) upon the cessation or termination of Employee's employment with Employer
for any reason, Employee shall forthwith deliver or cause to be delivered up to
Employer any and all research and development materials, drawings, notebooks,
notes, reports, formulae, software programs or discs or other containers of
software, manuals, data, books, records, materials and other documents and
materials in Employee's possession or under Employee's control relating to any
Confidential Information or any property or information which is otherwise the
property of Employer or its affiliates.
11. COVENANT-NOT-TO-COMPETE
In view of the Confidential Information to be obtained by or
disclosed to Employee, because of the know-how acquired and to be acquired by
Employee, and as a
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<PAGE> 6
material inducement to Employer to enter into this Agreement and continue to
employ Employee, Employee covenants and agrees that, so long as Employee is
employed by Employer and for a period of two (2) years after Employee ceases
for any reason to be employed by Employer, Employee shall not, directly or
indirectly (i) divert business from, (ii) solicit or transact any business
competitive with Employer or its affiliates with, or (iii) sell any products or
services sold or offered by Employer or its affiliates to, any customer or
former customer of Employer or its affiliates. In addition, Employee covenants
and agrees that, so long as Employee is employed by Employer and for a period
of two (2) years after Employee ceases for any reason to be employed by
Employer, Employee hereby agrees to refrain from, anywhere in the world (the
"Geographical Area"), directly or indirectly owning, managing, operating,
controlling or financing, or participating in the ownership, management,
control or financing, or participating in the ownership, management, control or
financing of, or being connected with or having an interest in, or otherwise
taking any part as a stockholder, director, officer, employee, agent,
consultant, partner or otherwise in, any biopharmaceutical product competitive
with products developed or being developed by Employer or its affiliates during
Employee's term of employment including, but not limited to, natural human
leukocyte-derived interferon alpha and any derivative product therefrom.
Without limitation of the foregoing, Employer's business is acknowledged to
include the development, manufacture and sale of human leukocyte interferon
therapy and products and other natural or recombinant technologies aimed at
enhancing the human immune system. Employee acknowledges that Employer's
business is anticipated to be international in scope, that a similar business
could effectively compete with Employer's and its affiliates businesses from
any location in the world, and that, therefore, the restricted Geographical
Area is reasonable in scope to protect Employer's and its affiliates' trade
secrets and legitimate business interests.
12. EMPLOYER'S REMEDIES FOR BREACH OF SECTIONS 10 AND 11
Employee covenants and agrees that if Employee shall violate
or breach any of Employee's covenants or agreements provided for in Sections 10
and 11 hereof, Employer and/or its affiliates shall be entitled to an
accounting and repayment of all profits, compensation, commissions,
remunerations or benefits which Employee directly or indirectly has realized or
realizes as a result of, growing out of or in connection with any such
violation or breach. In addition, in the event of a breach or violation or
threatened or imminent breach or violation of any provisions of Sections 10 or
11 hereof, Employer and/or its affiliates shall be entitled to a temporary and
permanent injunction or any other appropriate decree of specific performance or
equitable relief, without posting of bond, from a court of competent
jurisdiction in order to prevent, prohibit or restrain any such breach or
violation or threatened or imminent breach or violation by Employee, by
Employee's partners, agents, representatives, servants, employers or employees
and/or by any third parties. Employer shall be entitled to such injunctive or
other equitable relief in addition to any damages which are suffered, and the
prevailing party shall be entitled to reasonable attorneys' and paralegals'
fees and costs and other costs incurred in connection with any such litigation,
both before and at trial and at all tribunal levels. Resort by Employer and/or
its affiliates to such injunctive or other equitable relief shall not be deemed
to
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<PAGE> 7
waive or to limit in any respect any other rights or remedies which Employer or
its affiliates may have with respect to such breach or violation.
13. REASONABLENESS OF RESTRICTIONS
A. Reasonableness. Employee acknowledges that any
breach or violation of Sections 10 or 11 hereof will cause irreparable injury
and damage and incalculable harm to Employer and its affiliates and that it
would be very difficult or impossible to measure the damages resulting from any
such breach or violation. Employee further acknowledges that Employee has
carefully read and considered the provisions of Sections 10, 11 and 12 hereof
and, having done so, agrees that the restrictions and remedies set forth in
such Sections (including, but not limited to, the time period, geographical and
types of restrictions imposed) are fair and reasonable and are reasonably
required for the protection of the business, trade secrets, interests and good
will of Employer and its affiliates.
B. Severability. Employee understands and intends that
each provision and restriction agreed to by Employee in Sections 10, 11 and 12
hereof shall be construed as separate and divisible from every other provision
and restriction and that, in the event that any one of the provisions of, or
restrictions in, Sections 10, 11 and/or 12 hereof shall be held to be invalid
or unenforceable, the remaining provisions thereof and restrictions therein
shall nevertheless continue to be valid and enforceable as though the invalid
or unenforceable provisions or restrictions had not been included therein, and
any one or more of such valid provisions and restrictions may be enforced in
whole or in part as the circumstances warrant. In the event that any such
provision relating to time period and/or geographical and/or type of
restriction shall be declared by a court of competent jurisdiction to exceed
the maximum or permissible time period, geographical area or type of
restriction such court deems reasonable and enforceable, said time period
and/or geographical and/or type of restriction shall be deemed to become and
shall thereafter be the maximum time period and/or geographical restriction
and/or type of restriction which such court deems reasonable and enforceable.
C. Survivability. The restrictions, acknowledgements,
covenants and agreements of Employee set forth in Sections 10, 11, 12 and 13 of
this Agreement shall survive any termination of this Agreement or of Employee's
employment (for any reason, including expiration of the Employment Term).
14. STOCK OPTIONS
Effective the Effective Date, Employer hereby grants to
Employee options to acquire up to _______ shares of Common Stock (the
"Options"), subject to and upon the following terms and conditions:
(a) The Options shall be exercisable by Employee (i)
with respect to up to _______ shares of Common Stock, during the period
commencing on the Effective Date and
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<PAGE> 8
shall end as of the close of business on the day immediately preceding the end
of the 60th month following the Effective Date (the "First Exercise Period"),
and (ii) with respect to up to _______ shares of Common Stock, subject to
Employee's satisfaction of performance criteria to be established by the
Company's President and Employee on a case-by-case basis, during the period
commencing on the first anniversary of the Effective Date, and shall end as of
the close of business on the day immediately preceding the end of the 60th
month following the first anniversary of the Effective Date (the "Second
Exercise Period").
The exercise price with respect to (i) up to ______ shares
during the First Exercise Period and (ii) up to ______shares during the Second
Exercise Period shall be market close price at the date of grant (the "Exercise
Price").
(b) In the event Employee's employment is
terminated with Cause, all unexercised Options, and all Options which have been
exercised but which exercise has not been consummated by tender of payment for
the purchase of Common Stock, shall automatically terminate on the date of
Termination.
(c) In the event Employee dies or becomes
Disabled, Employee or his personal representative shall have a period of twelve
(12) months following the date of Employee's death or the last day of the
Disability period (as the case may be) to exercise all Options which were
exercisable on the date of Employee's death or that he became Disabled (as the
case may be).
(d) Employee may, within the First Exercise
Period, exercise the Options with the respect to up to ______ shares of Common
Stock, by delivering written notice of exercise to Employer during the First
Exercise Period ("Exercise Notice"). Such Options may be exercised, in whole
or in part, as specified in the Exercise Notice. Employee may, if such options
become exercisable within the Second Exercise Period, whether or not Options
have been exercised during the First Exercise Period, exercise the Options with
the respect to up to ________shares of Common Stock, in whole or in part, by
delivering the Exercise Notice to Employer.
(e) In the event that Employee exercises Options
during the First Exercise Period, the purchase price for the Common Stock to be
purchased by Employee shall be by cashiers check payable to the Employer the
amount equal to the number of shares of Common Stock (up to _____) with respect
to which Employee has exercised the Options, multiplied by the Exercise Price
(the "First Option Purchase Price"). In the event that Employee exercises
Options during the Second Exercise Period, the purchase price for the Common
Stock to be purchased by Employee shall be by cashiers check payable to the
Employer the amount equal to the number of shares of Common Stock (up to
______) with respect to which Employee has exercised the Options, multiplied by
the Exercise Price (the "Second Option Purchase Price").
7
<PAGE> 9
(f) The closing of the purchase of shares of
Common Stock pursuant to the exercise of Options during the First Exercise
Period or the Second Exercise Period (as the case may be, an "Option Closing"),
shall occur on or before the tenth (10th) business day following the date the
applicable exercised Notice was given. At the Option Closing (or at each
Option Closing, if more than one), Employer shall issue to Employee a stock
certificate evidencing the First Option Purchased Stock or the Second Option
Purchased Stock, as the case may be.
(g) At Employee's request, subject to the
provisions of any applicable securities laws, Employee may designate his
spouse, children, siblings, nieces or nephews or a trust for their benefit of
which Employee is sole trustee to own and hold record or beneficial title to
all or portions of the First Option Purchased Stock and Second Option Purchased
Stock.
(h) The Options granted hereunder are personal to
Employee, and, except as permitted by subsection (g) above, may not be sold,
assigned, devised, transferred, pledged, hypothecated or in any way disposed
of, by operation of law or otherwise, at any time. Any purported sale,
assignment, devise, transfer, pledge, hypothecation or disposition shall be
utterly void and of no force or effect.
15. EMPLOYEE'S DISCLOSURES AND REPRESENTATIONS
AND WARRANTIES.
Employee hereby acknowledges, represents and warrants
to, and/or agrees with, Employer as follows:
(a) That Employee and his representatives and
agents (i) have received and read and are familiar with this Agreement, and
(ii) are familiar with the business and operations conducted and to be
conducted by Employer and the risks attendant thereto.
(b) That Employee and/or his representatives and
agents have had an opportunity to ask questions of and receive satisfactory
answers from Employer and/or a person or persons authorized to act on
Employer's behalf concerning the terms and conditions of this Agreement, this
transaction and Employer and its currently contemplated business and
operations.
(c) That Employee has been represented by such
legal and other professional advisors (if any), each of whom has been
personally selected by Employee, as Employee has found necessary to consult
concerning the transactions contemplated in or by this Agreement.
(d) That Employee has full right, power and
authority to perform all obligations under this Agreement.
8
<PAGE> 10
Employee hereby agrees to indemnify and hold harmless Employer
and its shareholders, directors, officers, employees and agents from and
against any and all loss, damage, liability, cost or expense (including
reasonable attorneys' and paralegals' fees and costs before and at trial and at
all appellate levels) due to or arising out of any inaccuracy in, or breach of,
any representation, warranty or covenant of Employee contained in this Section
15.
16. INDEPENDENT COUNSEL
Employer and Employee agree that each of them have been, or
were advised and fully understand that they are entitled to be, represented by
independent legal counsel with respect to all matters contemplated herein, from
the commencement of negotiations at all times through the execution hereof.
17. LAW APPLICABLE
This Agreement shall be governed by and construed pursuant to
the laws of the State of Florida, without giving effect to conflicts of laws
principles.
18. NOTICES
Any notices required or permitted to be given pursuant to this
Agreement shall be sufficient, if in writing, and if personally delivered or
sent by certified or registered mail, return receipt requested, to his
residence, in the case of Employee, or to its then principal office, in the
case of Employer.
19. SUCCESSION
This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective legal representatives, heirs,
assignees and/or successors in interest of any kind whatsoever; provided,
however, that Employee acknowledges and agrees that he cannot assign or
delegate any of his rights, duties, responsibilities or obligations hereunder
to any other person or entity, except as provided for in Section 14(g) herein.
20. ENTIRE AGREEMENT
This Agreement constitutes the entire final agreement between
the parties with respect to, and supersedes any and all prior agreements
between the parties hereto both oral and written concerning, the subject matter
hereof and may not be amended, modified or terminated except by a writing
signed by the parties hereto.
9
<PAGE> 11
21. SEVERABILITY
If any provision of this Agreement shall be held to be invalid
or unenforceable, and is not reformed by a court of competent jurisdiction,
such invalidity or unenforceability shall attach only to such provision and
shall not in any way affect or render invalid or unenforceable any other
provision of this Agreement, and this Agreement shall be carried out as if such
invalid or unenforceable provision were not contained herein.
22. NO WAIVER
A waiver of any breach or violation of any term, provision or
covenant contained herein shall not be deemed a continuing waiver or a waiver
of any future or past breach or violation. No oral waiver shall be binding.
23. ATTORNEYS' FEES
In the event that either of the parties to this Agreement
institutes suit against the other party to this Agreement to enforce any of his
or its rights hereunder, the prevailing party in such action shall be entitled
to recover from the other party all reasonable costs thereof, including
reasonable attorneys' and paralegals' fees and costs incurred before and at
trial and at all tribunal levels.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands on
the day and year first above written.
VIRAGEN, INC.
By:
-----------------------------
EMPLOYEE
By:
-----------------------------
10
<PAGE> 1
EXHIBIT 4(h)
Form of Stock Option Agreement with Directors and the Company
<PAGE> 2
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, DATED AS OF ___________, between Viragen, Inc. a
Delaware Corporation (the "Company") and _______ ("Optionee").
In consideration for services rendered to the Company as a director, the
Company hereby grants to Optionee the option to acquire Common Stock, par value
$.01 per share, of the Company (the "Common Stock"), upon the following terms
and conditions:
1. Grant of Option. The Company hereby grants to Optionee the
right and option (the "Option") to purchase up to 50,000 shares of Common Stock
(the "Shares"), to be transferred upon the exercise thereof, fully paid and
nonassessable.
2. Exercise Price. The exercise price of the Shares subject to
the Option shall be $1.00 per share. The Company shall pay all original issue
or transfer taxes on the exercise of the Option.
3. Exercisability of Option. Subject to the provisions of
Paragraph 6 hereof, the Option shall be exercisable by Optionee in whole or in
part, at any time and from time to time, commencing on August 15, 1994 and
ending on August 14, 1999.
4. Non-Assignability of Option. The Option shall not be given,
granted, sold, exchanged, transferred, pledged, encumbered, assigned or
otherwise disposed of by Optionee, other than by will or the laws of descent
and distribution, and during the lifetime of Optionee, shall not be exercisable
by any other person, but only by him.
5. Method of Exercise of Option. Optionee shall notify the
Company by written notice, in the form of the Notice of Exercise attached
hereto (attachment A), delivered to the Company's principal office, attention:
Chief Executive Officer, accompanied by Optionee's cashier's check payable to
the order to the Company for the full exercise price of the Shares purchased.
As soon as practicable after the receipt of such Notice of Exercise, the
Company shall, at its principal office, tender to Optionee a certificate or
certificates issued in Optionee's name evidencing the Shares purchased by
Optionee hereunder.
6. Termination of Service; Death.
(a) In the event Optionee ceases to be a director of the Company at
any time prior to expiration of the Option, for any reason other than his
death, the unexcercised portion of the Option may be exercised by Optionee for
a period of ninety (90) days from the date of such cessation.
<PAGE> 3
(b) In the event of Optionee's death at any time prior to the
expiration of the Option, the Unexercised portion of the Option may be
exercised by the estate of Optionee, or by the person who acquired the right to
exercise the Option by bequest or inheritance or by reason of the death of
Optionee, at any time within twelve (12) months after the date of Optionee's
death.
7. Shares of Common Stock as Investment. By accepting the
Option, Optionee agrees that nay and all Shares purchased upon the exercise
thereof, unless registered at the time of purchase under the Securities Act of
1933, as amended (the "Securities Act"), shall be acquired for investment and
not for distribution, and upon the issuance of any or all of the Shares subject
to the Option, Optionee shall deliver to the Company a representation in
writing that such Shares are being acquired in good faith for investment and
not with a view to resale or distribution. The Company may place an
appropriate restrictive legend on the certificate or certificates evidencing
such Shares.
8. Adjustment of Shares.
(a) If at any time prior to the expiration or exercise in full of
the Option, there shall be any increase or decrease in the number of issued and
outstanding shares of the Common Stock through the declaration of a stock
dividend or through any recapitalization resulting in a stock split-up,
combination or exchange of the Common Stock, then and in such event,
appropriate adjustment shall be made in the number of Shares, and the exercise
price per Share thereof, that remain unexercised under the Option, so that the
same percentage of the Company's issued and outstanding shares of Common Stock
shall remain subject to purchase at the same aggregate exercise price.
(b) Except as otherwise expressly provided herein, the issuance by
the Company of shares of its capital stock of any class, or securities
convertible into shares of capital stock of any class, either in connection
with a direct sale of upon the exercise of rights or warrants to subscribe
therefore, or upon conversions of shares or obligations 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 of exercise price of
the Shares that remain unexercised under the Option.
(c) Without limiting the generality of the foregoing, the
existence of unexercised Shares under the Option shall not affect in any manner
the right or power of the Company to make, authorize or consummate (i) any or
all adjustments, recapitalizations, reorganizations or other change sin the
Company's capital structure or its business; (ii) any merger or consolidation
of the Company; (iii) any issue by the Company of debt securities, or preferred
or preference stock that would rank above the Shares issuable upon exercise of
the Option; (iv) the dissolution or liquidation of the Company; (v) any sale,
transfer or assignment of all or any part of the assets or business of the
Company; or (vi) any other corporate act or proceeding, whether of a similar
character or otherwise.
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<PAGE> 4
9. No Rights as Stockholder. Optionee shall have no rights as a
stockholder of the Company in respect of the Shares as to which the Option
shall not have been exercised and payments made therefore as herein provided.
10. Binding Effect. Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the parties hereto,
their heirs, legal representatives, successors and permitted assigns.
11. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without giving
effect to the conflict of laws principles thereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
VIRAGEN, INC.
By:
------------------------
OPTIONEE
----------------------------
3
<PAGE> 5
ATTACHMENT A
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise the within Option to the
extent of purchasing __________ shares of Common Stock of Viragen, Inc., a
Delaware Corporation, and hereby makes payments of $________ in payment
therefor.
------------------------------
Signature
------------------------------
Date
INSTRUCTIONS FOR ISSUANCE OF STOCK
Name:
---------------------------------------
(Please type or print in block letters)
Address:
---------------------------------------
---------------------------------------
Soc Sec No:
---------------------------------------
4
<PAGE> 1
EXHIBIT (5)
Opinion of Atlas, Pearlman, Trop & Borkson, P.A. relating
to the issuance of shares of Common Stock
pursuant to the above agreement
<PAGE> 2
ATLAS, PEARLMAN, TROP & BORKSON, P.A.
ATTORNEYS AT LAW
NEW RIVER CENTER, SUITE 1900
200 EAST LAS OLAS BOULEVARD
FORT LAUDERDALE, FLORIDA 33301
TELEPHONE (305) 763-1200
MIAMI (305) 940-7847
WEST PALM BEACH (407) 737-2627
FACSIMILE (305) 523-1952
DIRECT LINE: (305) 766-7858
June 9, 1995
Viragen, Inc.
2343 West 76th Street
Hialeah, Florida 33016
Re: REGISTRATION STATEMENT ON FORM S-8; VIRAGEN, INC. (THE "COMPANY");
8,242,847 SHARES OF COMMON STOCK
Gentlemen:
This opinion is submitted pursuant to the applicable rules of the
Securities and Exchange Commission with respect to the registration by the
Company and the resale of an aggregate of 8,242,847 shares of Common Stock, par
value $.01 per share (the "Common Stock") to be sold by the Selling Security
Holders designated in the Registration Statement or pursuant to the Company's
1995 Stock Option Plan ("Plan"). The shares of Common Stock to be sold consist
of (i) 1,037,847 shares of Common Stock issued to certain of the Selling
Security Holders pursuant to various incentive compensation and employment
agreements and (ii) 7,205,000 shares of Common Stock issuable upon exercise of
the Company's Common Stock purchase options (the "Options") by the Selling
Security Holders and other optionees pursuant to the Plan.
In our capacity as counsel to the Company, we have examined the original,
certified, conformed, photostat or other copies of the Company's Certificate of
Incorporation, By-Laws, the Plan and various agreements and written options
provided to officers, directors and key employees of the Company, corporate
minutes provided to us by the Company and such other documents and instruments
as we deemed necessary. In all such examinations, we have assumed the
genuineness of all signatures on original documents, and the conformity to
originals or certified documents of all copies submitted to us as conformed,
photostat or other copies. In passing upon certain records and documents of
the Company, we have necessarily assumed the correctness and completeness of
the statements made or included therein by the Company, and we express no
opinion thereon.
Based upon and in reliance of the foregoing, we are of the opinion that
the Common Stock presently outstanding is, and the Common Stock to be issued
upon exercise of the Options, when issued in accordance with the terms thereof,
will be validly issued, fully paid and non-assessable.
We hereby consent to the use of this opinion in the Registration Statement
on Form S-8 to be filed with the Commission.
Very truly yours,
ATLAS, PEARLMAN, TROP & BORKSON, P.A.
ATLAS, PEARLMAN, TROP & BORKSON, P.A.
ATTORNEYS AT LAW
<PAGE> 1
EXHIBIT (24.2)
Consent of independent certified public accountants
<PAGE> 2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-8) pertaining to the 1995 Stock Option Plan,
Contracted Options and Stock Issuances to Key Executives and Option Agreements
with Directors of Viragen, Inc., and to the incorporation by reference therein
of our report dated October 7, 1994, with respect to the consolidated financial
statements of Viragen, Inc. included in its Annual Report (Form 10-K) for
the year ended June 30, 1994, filed with the Securities and Exchange
Commission.
June 6, 1995
Miami, Florida Ernst & Young LLP
