<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1998
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period
to
COMMISSION FILE NUMBER: 0-20580
LIFE MEDICAL SCIENCES, INC.
(Exact name of registrant as specified in its charter)
Delaware 14-1745197
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
379 Thornall Street, Edison, New Jersey 08837
(Address of principal executive offices) (Zip Code)
(732) 494-0444
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
NONE
(Title of each class)
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK -- PAR VALUE $.001 PER SHARE
UNITS
REDEEMABLE CLASS A WARRANTS
REDEEMABLE CLASS B WARRANTS
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES [X] NO [_]
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K (229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [_]
The aggregate market value of voting stock held by non-affiliates of the
registrant as of March 23, 1999 was approximately $4.5 million.
As of March 23, 1999, 7,922,559 shares of Common Stock, $.001 par value,
of the registrant were issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the registrant's definitive proxy statement to be file
pursuant to Regulations 14A in connection with solicitation of proxies for its
Annual Meeting of Stockholders to be held on May 27, 1999 are incorporated by
reference into Part III of this Form 10-K.
================================================================================
<PAGE>
INTRODUCTORY NOTE
Life Medical Sciences, Inc., a Delaware corporation (the "Company"), is a
biomaterials company engaged in the development and commercialization of
innovative and cost-effective medical devices for therapeutic applications.
Certain statements in this Report on Form 10-K (the "Report") under the
caption "Management's Discussion and Analysis of Financial Condition and Results
of Operations" and elsewhere constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995, including,
without limitation, statements regarding future cash requirements and the
ability of the company to raise capital. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors which may cause
the actual results, performance or achievements of the Company, or industry
results, to be materially different from any future results, performance, or
achievements expressed or implied by such forward-looking statements. Such
factors include, among others, the following: delays in product development;
problems or delays with clinical trials; failure to receive or delays in
receiving regulatory approval; lack of enforceability of patents and proprietary
rights; lack of reimbursement; general economic and business conditions;
industry capacity; industry trends; demographic changes; competition; material
costs and availability; the loss of any significant customers; changes in
business strategy or development plans; quality of management; availability,
terms and deployment of capital; business abilities and judgment of personnel;
availability of qualified personnel; changes in, or the failure to comply with,
government regulations; and other factors referenced in this Report. When used
in the Report, statements that are not statements of material facts may be
deemed to be forward-looking statements. Without limiting the foregoing, the
words "anticipates", "plans", "intends", "expects" and similar expressions are
intended to identify such forward-looking statements which speak only as of the
date hereof. The Company undertakes no obligation to publicly release the
results of any revisions to these forward-looking statements that may be made to
reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.
<PAGE>
PART I
Item 1. Business
General
Life Medical Sciences, Inc. is a biomaterials company engaged in the
development and commercialization of innovative and cost-effective medical
devices for therapeutic applications. During 1998, the Company focused on the
advancement and expansion of product development programs based on its
proprietary bioresorbable polymer technology. The Company intends to apply its
platform technology to the development of multiple products that address unmet
therapeutic needs or offer improved, cost-effective alternatives to current
methods of treatment. Products currently under development focus on preventing
or reducing post-operative adhesions subsequent to a broad range of surgical
procedures and are in various stages of clinical trials and preclinical studies.
In January 1999, the Company initiated a pilot clinical trial for its REPEL-CV
bioresorbable adhesion barrier film, the first surgical device approved by the
FDA for human evaluation in the prevention of adhesions after open-heart
surgical procedures. The Company has also developed a line of novel silicone
gel-filled cushions intended for the prevention and management of hypertrophic
and keloid scars. The Company launched this line under the CLINICEL TM name in
April 1998 through a consumer media campaign, expanded distribution through drug
stores, supermarket pharmacies and mass merchandise store pharmacies and
achieved 1998 sales of $1,715,000.
The Company's bioresorbable polymer technology is based on a proprietary group
of polymers. The Company believes that these polymers display desirable
properties, which enable them to be tailored to a wide variety of applications.
These properties include bioresorbability, flexibility, strength and
biocompatibility. Potential applications for products derived from these
polymers are in medical areas such as the prevention of post-operative
adhesions, sutures, stents, implantable device coatings and drug delivery. The
Company is currently developing bioresorbable adhesion barrier films for the
prevention or reduction of post-operative surgical adhesions in cardio-vascular
surgery (REPEL-CV TM), gynecological and general surgical procedures (REPEL TM),
as well as in bioresorbable adhesion barrier coatings (viscous solutions) for
the prevention or reduction of post-operative surgical adhesions in
gynecological and general abdominal surgical procedures (RESOLVE TM) and
orthopedic and spinal surgical procedures (RELIEVE TM). These products are in
various stages of development:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Adhesion Prevention Products Under Development
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Potential Est. Annual Market
Product Therapeutic Application Status Potential(A)
- -----------------------------------------------------------------------------------------------------------------
REPEL Preventing or reducing post-operative U.S. pivotal clinical $250 Million
Barrier Film surgical adhesions in gynecological trial
and general abdominal surgery.
- -----------------------------------------------------------------------------------------------------------------
REPEL-CV Preventing or reducing post-operative U.S. pilot clinical trial $250 Million
Barrier Film surgical adhesions in cardiovascular
surgery.
- -----------------------------------------------------------------------------------------------------------------
RESOLVE Preventing or reducing post-operative IDE Preparation $400 Million
Viscous Solution surgical adhesion in gynecological and
general abdominal surgery.
- -----------------------------------------------------------------------------------------------------------------
RELIEVE Preventing or reducing post-operative Preclinical trials $300 Million
Viscous Solution surgical adhesion in orthopedic and
spinal surgery.
- -----------------------------------------------------------------------------------------------------------------
(A) Sources: Techvest LLC, Vector Securities International, Inc.,
Medical Data International
</TABLE>
In April 1998, the Company launched its CLINICEL silicone-based device for
diminishing unsightly scars and associated discomfort. The Company has launched
CLINICEL through a direct to consumer marketing campaign in the United States
and is marketing the product line internationally through a series of
independent distributors. The effectiveness of CLINICEL in treating problem
scars was demonstrated in a clinical study published in the April 1998 edition
of the Journal of Plastic and Reconstructive Surgery, a widely respected peer
1
<PAGE>
review journal for plastic surgeons. CLINICEL is distributed through national
drug wholesalers including McKesson, Bergen Brunswig and Cardinal to over 6,000
retail outlets such as Eckerd Drug Stores, WalMart, Long's Drug Stores and
Publix Super Markets. This distribution has been supported by full-page
advertisements in leading women's magazines such as Cosmopolitan, Glamour, Ebony
and Vogue. Sales in 1998 totaled $1,715,000.
The Company's product development strategy is to maintain a relatively small
core of scientists and researchers within the Company. The Company currently
conducts substantially all of its research and product development through
arrangements with specialized academic and industrial organizations that broaden
the development capabilities of the Company. The Company has established
contract manufacturing arrangements for each of its product lines.
The Company previously developed and marketed the Sure-Closure SystemTM, a
disposable wound closure device. As a result of a strategic decision to focus on
the development and commercialization of its proposed products utilizing its
platform technologies, the Company, in July 1994, sold the Sure-Closure System
to MedChem Products, Inc. ("MedChem") which was subsequently acquired by C.R.
Bard, Inc. ("C.R. Bard"). In October 1996, Zimmer, Inc., a subsidiary of
Bristol - Myers Squibb ("Zimmer"), acquired the Sure - Closure System from C.R.
Bard. The Company receives a 10% royalty on all net sales of the Sure-Closure
System products through June 30, 2004.
The Company was developing three products utilizing its in-situ tissue
culturing technology: Cariel TM, primarily for chronic wound healing; Piliel TM,
for stimulating hair regrowth and reducing hair loss; and Lipoel TM, for
improving the success rate of fat transplantation from a donor site to a
recipient site for reconstructive or cosmetic surgery. During 1997, the Company
terminated all clinical development efforts on these products since they did not
yield the desired benefits to the intended user during clinical evaluation.
Proprietary Platform Technologies
Polymer Technology
The Company's polymer technology is based on a proprietary group of polymers.
The Company believes that these polymers display desirable properties which
enable them to be tailored to a wide variety of applications. These properties
include bioresorbability, flexibility, strength, and biocompatibility. Unlike
many other polymer systems which may cause untoward responses, polymers derived
from the Company's polymer technology are highly biocompatible and have not
caused any undesirable tissue responses. Medical applications include the
prevention or reduction of post-operative surgical adhesions. In addition,
potential medical implantable uses include resorbable sutures, drug delivery
systems, stents, coatings for implantable devices and drug delivery.
Utilizing its polymer technology, the Company is currently developing REPEL, a
bioresorbable barrier film, for the prevention or reduction of post-operative
adhesions in gynecological and general surgical procedures, REPEL-CV, a
bioresorbable barrier film, for the prevention or reduction of post-operative
adhesions in cardio-vascular surgical procedures, RESOLVE, a bioresorbable
barrier coating (viscous solution), for the prevention or reduction of post-
operative surgical adhesions in gynecological and general surgical procedures
and RELIEVE, a bioresorbable barrier coating (viscous solution), for the
prevention or reduction of post-operative surgical adhesions in orthopedic and
spinal surgical procedures. See "Collaborative Agreements - Polymer Technology."
REPEL and REPEL-CV are proprietary bioresorbable post-operative adhesion
barrier films based on the Company's polymer technology. The Company is also
developing RESOLVE and RELIEVE, post-operative adhesion barrier coatings
(viscous solution). REPEL, REPEL-CV, RESOLVE and RELIEVE are intended to be
used routinely during surgeries to prevent or reduce the formation of post-
operative adhesions.
Adhesions are fibrous structures that connect tissues or organ surfaces that
are not normally joined. They are an undesirable side effect of the body's
normal healing process following damage to tissue. Adhesions can cause
significant complications such as bowel obstruction following abdominal surgery,
infertility following gynecological surgery, serious complications during
secondary cardiovascular surgical procedures, restricted limb motion following
orthopedic surgery, and pain following any surgery. Moreover, adhesions that
form as a result of surgery can increase the complexity, duration and risk of
subsequent surgery. According to industry sources, in the United States,
surgeons perform an estimated 440,000 abdominal operations annually to remove
adhesions, and the annual cost in the United States for the removal of such
adhesions is approximately $1.2 billion in inpatient treatment charges.
According to industry data, adhesions occur in approximately 93% of abdominal
surgeries, between 55% and 100% of gynecologic operations and are a common
occurrence following open-heart procedures. However, as it is not possible to
predict which patients will develop adhesion related complications, the Company
believes that most surgeries will benefit from routine
2
<PAGE>
use of its adhesion prevention products. The Company believes that current
products for the prevention or reduction of adhesions are limited by various
shortcomings including: (i) undesirable handling characteristics in the surgical
environment, (ii) diminished efficacy in the presence of blood, (iii) inability
to be used in laproscopic procedures, and (iv) failure to be absorbed. The
Company believes that REPEL, REPEL-CV, RESOLVE and RELIEVE may not suffer from
these shortcomings and as a result may become the preferred method of treatment
for the prevention or reduction of adhesions. In addition, some resorbable
polymers may form particles or break-down products as they degrade which could
lead to untoward biological effects or may actually cause adhesions. The Company
believes that REPEL, REPEL-CV, RESOLVE and RELIEVE uniformly dissolve without
forming particles and do not form break-down products, which could lead to
untoward biological effects.
REPEL
REPEL adhesion barrier film is the first in the series of bioresorbable
adhesion prevention products from the patented platform technology. REPEL was
tested in a series of pre-clinical studies at the University of Southern
California in which its efficacy was evaluated in controlled, blinded,
randomized studies. These studies demonstrated that REPEL either completely
eliminated or substantially reduced the formation of adhesions in the peritoneal
cavity in such industry standard models as de novo adhesion formation, adhesion
reformation and adhesion formation in the presence of blood. Throughout these
studies, REPEL was assessed as safe and biocompatible and resorbed without
complication. In conjunction with the Investigational Device Exemption (IDE)
submission to the FDA, REPEL was rated safe in an extensive series of non-
clinical toxicologic and hematologic studies.
During 1997, a pilot clinical trial was conducted on REPEL in gynecological
surgery, at several sites in the United States. The trial was designed to test
the safety and efficacy of REPEL when applied to the anterior and posterior
surfaces of the uterus during myomectomies by laparotomy. REPEL was rated safe
and well tolerated as well as being greater than twice as effective in reducing
adhesion formation compared to the control of standard surgical technique. The
most striking result of the trial was the reduction in the extent of adhesion
formation on the posterior surface of the uterus, where adhesions are more
extensive, clinically relevant and difficult to address. On the posterior
surface, the median extent of adhesions in the REPEL patients was less than 25
percent, whereas the control patients' median extent was greater than 75
percent. Based on these results, FDA has granted approval to initiate the
pivotal clinical trial.
REPEL-CV
REPEL-CV is a bioresorbable adhesion barrier film made from a different co-
polymer formulation than REPEL which results in its being stronger and longer
lasting in the body. The clinical significance of these enhanced
characteristics was demonstrated in a series of pre-clinical studies. These
studies were conducted at the University of Southern California and at New York
Presbyterian Medical Center. Throughout these studies, REPEL-CV was rated as
safe and well-tolerated as well as virtually preventing the formation of
adhesions to the surface of the heart.
Adhesion formation after open heart surgical procedures is a well-
documented, significant complication at the point of performing a secondary
procedure. Secondary procedures (re-do's) account for 15-20% of the
approximately 600,000 open heart surgeries performed annually in the United
States. Extensive adhesions form between the surface of the heart (epicardium)
and the inner surface of the sternum after virtually every open heart surgical
procedure. These adhesions make opening the sternum and accessing the heart a
time consuming and dangerous process in the secondary procedure. There are no
FDA approved products currently available to the cardiovascular surgeon to
address post-operative adhesion formation.
In January 1999, Life Medical initiated a multi-center, randomized,
controlled U.S. pilot clinical trial for REPEL-CV in cardiovascular surgical
procedures. REPEL-CV is a bioresorbable film which is placed over the anterior
surface of the heart at the conclusion of the surgical procedure. The primary
endpoint of this trial involving 21 evaluable patients is to assess the safety
of the material. In addition, the trial is designed to provide initial data on
the efficacy in preventing adhesions between the heart and the inner surface of
the sternum. This trial is scheduled for completion in April, 1999.
RESOLVE
Coating tissue surfaces as a means of providing broad-based versus site
specific protection against adhesion formation is the objective of the RESOLVE
viscous gel development program. This approach has particular application in
gynecological and general abdominal surgery due to the "bowl shaped" anatomical
configuration of the peritoneal cavity.
3
<PAGE>
RESOLVE would be poured (open procedures) or injected (laparoscopic procedures)
into the peritoneal cavity at the conclusion of the procedure as an instillate
to coat and lubricate the tissue surfaces thereby protecting the organs from
adhesion formation.
The formulation of RESOLVE was specified through a series of pre-clinical
studies during which the preferred viscosity, tissue adherence and resorption
time were determined. In addition to being determined as safe and
biocompatible throughout the pre-clinical studies, RESOLVE proved to be
efficacious in reducing the level of adhesion formation subsequent to
gynecological surgical procedures. In one pre-clinical study, approximately
forty-five (45) percent of the tissue surfaces in the RESOLVE treated group were
free of adhesions, compared to less than ten (10) percent in the control group
and less than twenty (20) percent in the group treated with SEPRAFILM, an FDA
approved surgical adhesion barrier developed by Genzyme Corporation.
Manufacturing and packaging development programs are underway in preparation for
submission of the Investigational Device Exemption (IDE) to the FDA as a basis
for initiating the pilot clinical trial.
RELIEVE
Gels of higher viscosity may also be beneficial in addressing adhesion
formation in articulating joints subsequent to orthopaedic surgical procedures
and involving the spinal canal after spinal surgery. The RELIEVE category of
viscous gel products are under development through pre-clinical studies.
Candidate materials are being evaluated in a surrogate hand tendon model and in
a feasibility study in spinal surgery which is being funded by a major
manufacturer of spine surgery instruments.
CLINICEL--TOPICAL SCAR MANAGEMENT DEVICE
According to Vital Statistics from the U.S. Department of Commerce, 62
million new scars occur annually in the United States. Of this total, a portion
of these scars will predictably progress into unsightly, uncomfortable scars
known as hypertrophic and keloid scars. A series of focus groups were conducted
in the beginning of 1998, to determine if a target audience of 20-50 year-old
women would be interested in and motivated to purchase a self-care treatment
option to improve the appearance and symptoms of these problem scars. The
results were very positive.
Based on this research and the limited competition in this product segment,
the Company introduced the CLINICEL product line of novel, patented, silicone
gel-filled cushions intended for the prevention and management of hypertrophic
and keloid scars. The cushions are applied to intact skin for diminishing the
size, discoloration and associated discomfort of unsightly scars. Marketing of
the CLINICEL product was approved by the FDA for over-the-counter promotion
direct to the consumer. A non-controlled clinical study involving 30 patients
with various types of scars ranging in age from 4 months to 38 years
demonstrated that the use of CLINICEL accelerated the revision of the scars
compared to previous experience with silicone sheet products. The results of
this study were published in the April 1998 edition of the Journal of Plastic
and Reconstructive Surgery.
The CLINICEL line of silicone gel-filled cushions and ancillary elastic net
dressing and hypoallergenic tape products were launched in April 1998 through a
multi-faceted promotional program. Primary emphasis has been placed on consumer
advertising in such fashion journals as Cosmopolitan, Redbook and Essence with
contract inbound telemarketing for product information and order processing. To
date, approximately 90,000 consumer calls and 13,000 consumer orders have been
processed via the 800 number and website. Promotional emphasis has also been
focused, through journal advertising and conventions, at dermatologists, plastic
and gynecologic surgeons as well as pharmacists.
As consumer awareness and clinical endorsement of CLINICEL increases, the
establishment of broad retail access of CLINICEL becomes a critical factor to
support continued sales growth. CLINICEL is currently available through more
than 6,000 retail outlets including chain and independent drug stores as well as
mass merchandise and supermarket pharmacies. CLINICEL is stocked in all major
drug wholesalers and is sold through such major retailers as WalMart, Eckerd,
American Stores and Long's. Sales through December 1998 totaled $1.7 million of
which approximately $.9 million represented individual consumer orders and the
remainder were trade sales.
4
<PAGE>
Collaborative Agreements
Polymer Technology
The Company's polymer technology was developed at the Hebrew University of
Jerusalem. The Company entered into an agreement with Yissum Research
Development Company of the Hebrew University of Jerusalem ("Yissum") dated June
14, 1991, as amended in February 1994, as of January 1996 and as of October 1996
(the "Yissum Agreement"), pursuant to which the Company agreed to finance
research and development conducted at the Hebrew University of Jerusalem in the
field of biomedical polymers. Pursuant to the Yissum Agreement, Yissum has
assigned to the Company its worldwide rights to patents, patent applications and
know-how to develop, manufacture and market products relating to this
technology. Under the terms of the Yissum Agreement, all rights in the research
or products developed are owned solely by the Company, except as set forth
below. The Company is permitted to grant licenses of its polymer technology upon
certain terms and conditions. The Company has agreed to favorably consider
manufacturing in Israel products resulting from its polymer technology and to
explore opportunities to do so.
In consideration for the assignment of the patents and the patent
applications, the granting of the licensing rights and the know-how, the
research that Yissum agreed to procure pursuant to the Yissum Agreement and
Yissum's performance of its obligations thereunder, the Company paid Yissum a
fixed fee of $750,000 and is obligated to pay a royalty of five percent of all
net sales of the Company's products under the Yissum Agreement up to a maximum
amount of $5,500,000 in royalties during the term of the Yissum Agreement.
The Yissum Agreement continues until the earlier of the last date upon which
the patents covering the products governed by the Yissum Agreement expire or the
end of a period of 15 years from the date of the first commercial sale of
products under the assigned technology. Yissum has the right in its sole
discretion, subject to certain exceptions set forth in the following sentences,
to terminate the Yissum Agreement and/or enter into contracts with others in
order to grant them a license for the development, manufacture and marketing of
a product and the other rights detailed in the Yissum Agreement if, among other
things, (i) the Company does not advise Yissum of the completion of development
and manufacturing work necessary to lead to the development of a product by
December 31, 2001; (ii) the Company does not advise Yissum of the first
commercial sale by December 31, 2001; (iii) the Company does not reach total net
sales of products or achieve income of $1,000,000 by December 31, 2002; (iv) the
Company stops manufacturing and/or marketing the product for a period of more
than 12 months; or (v) the Company breaches the Yissum Agreement, a receiver or
liquidator is appointed for the Company or the Company passes a resolution for
voluntary winding up, or a winding up application is made against the Company,
an attachment is made over a substantial part of the Company's assets, or
execution proceedings are taken against the Company, and the same is not
remedied or set aside within the time periods specified in the Yissum Agreement.
Notwithstanding the foregoing: (i) in the event that the Company does not advise
Yissum of the first commercial sale by December 31, 2001, Yissum shall not
terminate the Yissum Agreement during the year ended December 31, 2002 so long
as the Company pays to Yissum a minimum royalty payment of $50,000; (ii) in the
event that the Company does not (a) advise Yissum of the first commercial sale
by December 31, 2002 or (b) reach total net sales of products or achieve income
of $1,000,000 by December 31, 2002, Yissum shall not terminate the Yissum
Agreement during the year ended December 31, 2003 so long as the Company pays to
Yissum a minimum royalty payment of $50,000; and (iii) in the event that the
Company does not reach total net sales of products or achieve income of
$1,000,000 by December 31, 2003, Yissum shall not terminate the Yissum Agreement
during the year ended December 31, 2004 so long as the Company pays to Yissum a
minimum royalty payment of $50,000. The Company has agreed to indemnify Yissum
under certain circumstances. Upon the termination of the Yissum Agreement for
any reason, the patents and patent applications assigned by Yissum to the
Company will revert in full to Yissum.
In March 1996, pursuant to the Yissum Agreement, the Company paid Yissum
$60,000 for conducting research relating to the development of surgical adhesion
barriers. Effective as of October 1996 the Yissum Agreement was amended as it
relates to the Company financing research at Yissum. The amendment provides a
research term of five years from the date of the amendment and requires Yissum
personnel to enter into confidentiality and non-competition agreements with the
Company. Pursuant to the amendment, the Company paid Yissum approximately
$276,000 for each the first and second twelve month periods of the research
term.
5
<PAGE>
CLINICEL
The CLINICEL product line was developed at The Bruce Rappaport Faculty of
Medicine at Technion-Israel Institute of Technology in Haifa, Israel (the
"Rappaport Faculty"). In July 1995, the Company entered into an agreement with
Dimotech (the "Dimotech Agreement") pursuant to which the Company agreed to
finance the research and development conducted by Dimotech with regard to
CLINICEL. Pursuant to the Dimotech Agreement, Dimotech has assigned to the
Company the worldwide rights to its patent applications, any patents which may
issue and know-how to develop, manufacture and market products relating to
CLINICEL. Under the terms of the Dimotech Agreement, all rights in the research
or products developed are owned solely by the Company, except as set forth
below. The Company has agreed to favorably consider manufacturing in Israel the
scar care products and to explore opportunities to do so.
In consideration for the assignment of the rights to the patents, patent
applications and know-how and in order to perform and finance the research and
development to be conducted under the Dimotech Agreement, the Company has paid
Dimotech an aggregate fixed fee of $25,935 and is obligated to pay a royalty of
five percent of all net sales of CLINICEL products during the term of the
Dimotech Agreement.
The Dimotech Agreement continues until the earlier of the last date upon which
the patents covering the products governed by the Dimotech Agreement expire, or
the end of a period of 15 years from the date of the first commercial sale
pursuant to the assignment. Dimotech has the right in its sole discretion to
terminate the Dimotech Agreement and/or enter into contracts with others in
order to grant them a license for the development, manufacture and marketing of
a product and other rights detailed in the Dimotech Agreement, if, among other
things, (i) the Company does not advise Dimotech of the first commercial sale by
July 16, 1999; (ii) the Company does not reach total net sales of products or
achieve income of $1,000,000 within 72 months from the date of the Dimotech
Agreement (July 2001); (iii) the Company stops manufacturing and/or marketing
the product for a period of more than 12 months; or (iv) the Company breaches
the Dimotech Agreement, a receiver or liquidator is appointed for the Company,
the Company passes a resolution for voluntary winding up, a winding up
application is made against the Company, an attachment is made over all or a
substantial part of the Company's assets, or execution proceedings are taken
against the Company, and the same is not remedied or set aside within the time
periods specified in the Dimotech Agreement. The Company has agreed to indemnify
Dimotech under certain circumstances. Upon the termination of the Dimotech
Agreement in accordance with the provisions thereof for any reason, the patents,
patent applications and know-how assigned by Dimotech to the Company will revert
in full to Dimotech and any licenses granted by the Company thereunder will
expire.
Sure-Closure System
The Sure-Closure System was invented at the Rambam Medical Center, an
affiliate of Technion-Israel Institute of Technology in Haifa, Israel. The
Company entered into an agreement with Technion dated June 28, 1992 (the "Skin-
Stretching Agreement"), pursuant to which Technion has assigned to the Company
its worldwide rights to its patents, patent applications and know-how to
develop, manufacture and market products relating to the Sure-Closure System
technology, and Technion assigned the Skin-Stretching Agreement to Dimotech. On
July 29, 1994, the Company completed the sale of its Sure-Closure System to
MedChem. The assets sold included substantially all of the Company's assets,
properties, claims, rights and interests related to the Sure-Closure System,
other than accounts receivable. The transaction provided for (i) the payment to
the Company of $4 million; (ii) the assumption of certain liabilities, in an
amount of approximately $644,000 which was recorded as deferred royalty income
and will continue to be reduced by a 10% royalty on net sales of all current and
future Sure-Closure System products to be paid to the Company through June 30,
2004. In July 1994, in connection with the sale of the Sure-Closure System,
Technion and Dimotech agreed to the assignment of all rights and duties, under
the Skin Stretching Agreement, to MedChem, relieving the Company of any
obligations under the Skin Stretching Agreement. In October 1997 the Sure-
Closure System was acquired by the Zimmer Inc. subsidiary of Bristol-Myers
Squibb.
6
<PAGE>
Government Regulation
FDA and Other Regulations
The Company's research and development activities and the production and
marketing of the Company's products are subject to regulation for safety,
efficacy and compliance with a wide range of regulatory requirements by numerous
governmental authorities in the United States and other countries. In the United
States, drugs, biologic products and medical devices are subject to rigorous FDA
review. The Federal Food, Drug, and Cosmetic Act, the Public Health Service Act
and other federal statutes and regulations govern or influence the research,
testing, manufacture, safety, labeling, storage, record keeping, approval,
distribution, reporting, advertising and promotion of such products.
Noncompliance with applicable requirements can result in fines, recall,
injunction or seizure of products, refusal to permit products to be imported
into the United States, refusal of the government to approve or clear product
approval applications or to allow the Company to enter into government supply
contracts, withdrawal of previously approved applications and criminal
prosecution. The FDA may also assess civil penalties for violations of the Food,
Drug, and Cosmetic Act relating to medical devices.
In order to obtain FDA approval of a new drug, a biologic or device, companies
must submit proof of safety and efficacy. In most cases such proof entails
extensive clinical and preclinical laboratory tests. The testing and preparation
of necessary applications and processing of those applications by the FDA is
expensive and may take several years to complete. There is no assurance that the
FDA will act favorably or in a timely manner in reviewing submitted
applications, and the Company may encounter significant difficulties or costs in
its efforts to obtain FDA approvals which could delay or preclude the Company
from marketing any product it may develop. The FDA may also require
postmarketing testing and surveillance of approved products, or place other
conditions on the approvals. These requirements could cause it to be more
difficult or expensive to sell the products, and could therefore restrict the
commercial applications of such products. Product approvals may be withdrawn if
compliance with regulatory standards is not maintained or if problems occur
following initial marketing. For patented products or technologies, delays
imposed by the governmental approval process may materially reduce the period
during which the Company will have the exclusive right to exploit such
technologies. See "Risk Factors - Risks Associated with Uncertainties of
Clinical Trials."
The conduct of non-clinical studies must be done in conformity with the FDA's
good laboratory practice (GLP) regulations. Clinical studies must comply with
the FDA's regulations for institutional review board approval and for informed
consent and, depending on the product, Investigational New Drug (IND) or
Investigational Device Exemption (IDE) regulations. In addition, a variety of
state and local permits are required under regulations relating to the Company's
proposed laboratory activity.
The Company will also be required to register as a manufacturer with the FDA
if it manufactures drugs, biologics or devices in the United States. As such,
the Company would be inspected on a routine basis by the FDA for compliance with
the FDA's good manufacturing practices (GMP) regulations. These regulations
require that the Company manufacture its products and maintain its documents in
a prescribed manner with respect to manufacturing, testing and control
activities. Foreign manufacturing facilities that produce products for sale in
the United States are also subject to these GMP requirements and to periodic FDA
inspections. FDA regulations also require that the Company provide information
to the FDA on deaths or serious injuries associated with the use of its
products, as well as other post-approval marketing experiences. In addition, the
FDA prohibits a company from marketing approved products for unapproved
applications.
Devices
The FDA categorizes devices into three regulatory classifications subject to
varying degrees of regulatory control. In general, Class I devices require
compliance with labeling and record keeping regulations, GMPs, 510(k) pre-market
notification, and are subject to other general controls. Class II devices may be
subject to additional regulatory controls, including performance standards and
other special controls, such as guidelines and postmarket surveillance. Class
III devices, which are typically invasive or life-sustaining products, or new
products never before marketed, require clinical testing to assure safety and
effectiveness and FDA approval prior to marketing and distribution. The FDA also
has the authority to require clinical testing of Class I and Class II devices.
If a medical device manufacturer can establish that a newly developed device
is substantially equivalent to a Class I or Class II device that was legally
marketed prior to May 1976, the date on which the Medical Device Amendments of
1976 were
7
<PAGE>
enacted, or to a device that was legally introduced to the market after the FDA
has found it to be substantially equivalent to a legally marketed device, the
manufacturer may seek clearance from the FDA to market the device by filing a
510(k) pre-market notification. Substantial equivalence also can be found for
pre-1976 Class III devices for which PMAs have not been required. The 510(k)
pre-market notification may need to be supported by appropriate data
establishing the claim of substantial equivalence to the satisfaction of the
FDA. Following submission of the 510(k) pre-market notification, the
manufacturer or distributor may not place the device into commercial
distribution until an order is issued by the FDA. By regulation, the FDA has no
specific time limit by which it must respond to a 510(k) pre-market
notification. At this time, the FDA responds to the submission of a 510(k) pre-
market notification in approximately 150 days on average. The FDA order may
declare that the device is substantially equivalent to another legally marketed
device and allow the proposed device to be marketed in the United States. The
FDA may, however, determine that the proposed device is not substantially
equivalent, or require further information, such as additional test data, before
the FDA is able to make a determination regarding substantial equivalence. Such
determination or request for additional information could delay the Company's
market introduction of its products and could have a material adverse effect on
the Company.
If a manufacturer or distributor of medical devices cannot establish that a
proposed device is substantially equivalent, whether or not the FDA has made a
determination in response to a 510(k) premarket notification, the manufacturer
or distributor must seek pre-market approval of the proposed device through the
submission of a PMA application. A PMA application must be supported by
extensive data, including preclinical and human clinical trial data, as well as
extensive literature, to prove the safety and efficacy of the device. Upon
receipt, the FDA conducts a preliminary review of the PMA application. If
sufficiently complete, the submission is declared fileable by the FDA. By law,
the FDA has 180 days to review a PMA application once it is filed, although PMA
application reviews more often occur over a significantly protracted time
period, and generally take approximately two years or more from the date of
filing to complete. A number of devices for which FDA marketing clearance has
been sought have never been cleared for marketing.
If human clinical trials of a proposed device are required and the device
presents a "significant risk," the manufacturer or distributor of the device
will have to file an IDE application with the FDA prior to commencing human
clinical trials. The IDE application must be supported by data, typically
including the results of animal testing. If the IDE application is approved,
human clinical trials may begin at a specified number of investigational sites
with the number of patients approved by the FDA.
Sales of devices, new drugs and biologic products outside the United States
are subject to foreign regulatory requirements that vary widely from country to
country. Whether or not FDA approval has been obtained, approval of a device,
new drug or biologic product by a comparable regulatory authority of a foreign
country must generally be obtained prior to the commencement of marketing in
those countries. The time required to obtain such approval may be longer or
shorter than that required for FDA approval.
Products utilizing the Company's polymer technology are likely to be
classified as Class III devices, requiring a PreMarket Approval ("PMA")
application review process prior to commercial distribution in the United
States. CLINICEL silicone gel-filled cushions are classified as Class 1 devices
for which a 510K pre-market notification for over-the-counter (OTC) marketing
has been approved by the FDA.
Third Party Reimbursement
Successful commercialization of the Company's proposed products may depend in
part on the availability of adequate reimbursement from third-party health care
payers such as Medicare, Medicaid, and private insurance plans. Reimbursement
matters include both coverage issues and payment issues. Questions of coverage
raise the issue of whether a product will be paid for at all and under what
circumstances. Questions of payment relate to the amount or level of payment.
Reimbursement policies vary among payers and may depend on the setting in which
a product is used.
There are numerous governmental third-party payers. Medicare is a federally
funded health insurance for persons who are age 65 or older, who have end stage
renal disease, or who otherwise qualify by virtue of a disability.
Medicare is the largest single health insurance program in the United States.
Medicaid is a joint federal-state program to provide health services to the
indigent. The Department of Veterans Affairs provides a variety of medical
services to veterans both directly and through arrangements with private health
care providers. The Civilian Health and Medical Program for the Uniformed
Services pays for care and services furnished to dependents of members of the
armed forces. There are also numerous private health insurance
8
<PAGE>
plans, including private nonprofit insurers (e.g., Blue Cross and Blue Shield
plans), commercial insurers, and various types of managed care organizations.
Patents and Proprietary Rights
In connection with the polymer technology, the Company currently holds two
issued United States patents, one Canadian patent and two Israeli patents
relating to bioresorbable polymeric compounds and polyurethane polymeric
compounds. The first United States patent claims novel bioresorbable polymeric
compounds of specified chemical structure. Also claimed are medical articles,
including sutures and prosthetic devices, made from these materials as well as
methods for making these materials. The Company does not currently have
comparable patent protection outside the United States for the bioresorbable
polymeric compounds other than in Canada and in Israel. The second United States
patent claims novel polyurethane polymeric compounds of specified chemical
structure. Also claimed are medical articles, including sutures and wound and
burn dressings. The two United States patents will remain in effect until June
2, 2008 and May 3, 2010, respectively, provided that all requisite maintenance
fees are paid to the United States Patent and Trademark Office. The Company has
one issued patent which will remain in effect until January 8, 2015, and two
pending patent applications in the United States pertaining to bioresorbable
polymeric compounds used in adhesion prevention. The Company has filed for
foreign protection on the bioresorbable polymeric compounds used in adhesion
prevention.
With regard to CLINICEL, the Company has received notification of allowance
from the U.S. Patent and Trademark Office on a design and use patent in the
field of treatment of hypertrophic and keloid scars. Similar patents have been
filed in major international markets.
Competition
REPEL, REPEL-CV, RESOLVE and RELIEVE
REPEL, REPEL-CV, RESOLVE and RELIEVE are expected to compete with various
currently marketed products such as Interceed TM, a product of Johnson &
Johnson, Seprafilm TM , a product of Genzyme Corp., and Goretex TM, a product of
WL Gore. Several other companies including LifeCore Biomedical Inc., Gliatech
Inc., Anika Therapeutics, Inc., Biomatrix Inc., Alliance Pharmaceuticals, Corp.
and Focal Inc. either are or may be pursuing the development of products for the
prevention of adhesions. The anti adhesion market is characterized by a limited
number of products currently on the market with limited (as a percent of total
surgical procedures using such products) penetration. The Company's products are
in the developmental stage in a market where clinical efficacy and, to a lesser
extent, strength of existing product lines are the principal methods of
competition.
CLINICEL
CLINICEL competes with various OTC Therapeutic Scar Treatment options
currently available direct to the consumer such as the ReJuveness silicone sheet
material marketed by RichMark International and Mederma topical ointment
marketed by Merz USA. CLINICEL will also compete with prescription-only or
surgical treatment options such as corticosteroid injections and reconstructive
surgery. There are few products in this embryonic segment and competition is
dependent upon marketing, pricing and distribution.
Manufacturing
REPEL, REPEL-CV, RESOLVE, RELIEVE and CLINICEL.
The Company intends to rely primarily on certain manufacturers to produce
REPEL, REPEL-CV, RESOLVE, RELIEVE and other proposed products for testing and
commercial production. The manufacturer procures, tests and inspects all raw
materials used in the production of the Company's proposed products. The
manufacturer relies on various sources, approved by the Company, for its raw
materials and components. The Company believes that alternative sources for
these raw materials and components are available. The Company's products would
be manufactured in a facility in compliance with regulatory requirements. The
Company has engaged a third party to inspect the product formulated by the
manufacturer for quality assurance purposes. The Company has been, and expects
to continue to be, able to obtain all materials required for its production of
its proposed products, although there can be no assurances thereof.
9
<PAGE>
As of the date of this report, the Company and its primary manufacturer have
completed various manufacturing pilot batches and scale-up studies at its
primary manufacturing partners site. The Company's manufacturing equipment,
which was used by the manufacturer in the production process, was pledged as
collateral against amounts owed to this manufacturer during 1998. The Company
has continued to produce pilot batches for use in clinical trials during 1999 at
this manufacturer and on this equipment and intends to continue this
manufacturing development and optimize, validate and utilize the process,
equipment and manufacturer to produce further clinical and commercial sale
products at this site.
CLINICEL
The Company relies on certain manufacturers to produce and supply the CLINICEL
products. The manufacturer procures, tests, and inspects all raw materials used
in the production of these products. The manufacturer relies on various
sources, approved by the Company, for its raw materials and components. The
Company believes that alternative sources for these raw materials and components
are available. The Company's CLINICEL products are manufactured in a facility
in compliance with appropriate regulatory requirements.
Marketing and Sales
The Company markets its CLINICEL products through advertisements in various
periodicals and professional journals and has established distribution in
various chain drug stores. The Company's largest customer (Eckerd) accounted for
approximately 22% of sales in 1998. Internationally, the CLINICEL products will
be marketed through a series of independent distributors. If the Company's
proposed products from its polymer technology are successfully developed, the
Company may either establish an organization for the marketing and sale of these
proposed products or enter into corporate alliances for the distribution of
certain products in the United States. The Company intends to seek joint
venture, licensing or collaborative arrangements for the marketing and sale of
these proposed products elsewhere in the world.
If development of the Company's bioresorbable polymer products is completed,
the Company will seek to have its products marketed and sold in European
countries and the United States while concurrently seeking product registration
in Japan. Products utilizing the Company's technologies are expected to be
targeted to various segments in the medical community, including physicians,
surgeons, and other care providers in both the institutional and home care
markets. The Company's future growth and profitability will depend, in large
part, on the success of its personnel and others in fostering acceptance of the
Company's products as an alternative to other available products, among the
medical community. Such acceptance will be substantially dependent on educating
the medical community as to the distinctive characteristics and potential
benefits of the Company's technologies and products.
Product Liability and Insurance
The Company's business exposes it to potential liability risks that are
inherent in the testing, manufacturing and marketing of medical products. The
Company has obtained product liability insurance for its clinical trials and
commercial sales of its products providing coverage in an aggregate amount of
$3,000,000.
Human Resources
As of March 23, 1999, the Company employed nine full time employees. Research
and development activities are conducted through arrangements with various
consultants and companies in Europe, Israel and the United States. The Company's
employees are not a party to any collective bargaining agreement. The Company
believes that it has good relations with its employees. The Company intends to
increase its number of full time employees as it expands its clinical trials and
product development activities and begins to market its products.
10
<PAGE>
Executive Officers of the Company
The Company's executive officers are as follows:
<TABLE>
<CAPTION>
Name Age Positions with the Company
---------------------- ----- ------------------------------------------
<S> <C> <C>
Dr. Herbert Moskowitz.......... 58 Chairman of the Board of Directors
Robert P. Hickey............... 53 President and Chief Executive Officer
Eli Pines, Ph.D................ 53 Vice President and Chief Scientific Officer
Drew Karazin................... 45 Vice President, Chief Financial Officer
Robert G. Conway............... 41 Vice President Operations
</TABLE>
Dr. Herbert Moskowitz is a co-founder of the Company and is currently the
Chairman of the Board of Directors. Dr. Moskowitz has served as Chairman of the
Board, President and Chief Executive Officer at various periods since the
Company's inception in 1990. Dr. Moskowitz is also president, director and a
principal stockholder of Magar Inc., a private investment firm. Magar Inc. is a
principal stockholder of the Company. He is also Executive Director of the
Andrew F. Capoccia Law Centers LLC. He is a co-founder of Advanced Tissue
Sciences, Inc., a publicly traded medical technology company, and at various
periods from 1986 to 1989 served as director, chairman of the board, president
and chief executive officer. Dr. Moskowitz, a former practicing dentist, has
been active in the healthcare field since 1958.
Robert P. Hickey has served as President and Chief Executive Officer since May
29, 1996 and as a Director since August 1996. From May 1994 until joining the
Company, Mr. Hickey was founder and president of Roberts Healthcare Resources,
Inc., a company engaged in project consulting to Fortune 500 and leading edge
companies in the healthcare industry. From 1975 to 1994 Mr. Hickey served in
various positions at Johnson & Johnson. From 1992 to 1994, Mr. Hickey was Vice
President, Marketing and Director of Ethicon, Inc., a unit of Johnson & Johnson.
Eli Pines, Ph.D. has served as a Vice President and the Chief Scientific
Officer of the Company since June 1995. From June 1992 to June 1995 Dr. Pines
served as vice president and chief technical officer for Fibratek, Inc., a
biopharmaceutical company engaged in research, development and production of
medical products. Prior to joining Fibratek, Inc., Dr. Pines was employed for
seventeen years by Johnson & Johnson, where his last position was director of
new products research and development with worldwide responsibilities for the
Surgical Specialty Division of Johnson & Johnson Medical, Inc. Dr. Pines
received a BS in Chemistry from Brooklyn College in 1968, a Ph.D. in Biophysics
from Syracuse University in 1972 and conducted post doctoral research in
Biochemistry at The Rockefeller University from 1972 to 1974.
Drew Karazin has served as Vice President and Chief Financial Officer since
July, 1998. Prior to joining the company, he served during 1996 and 1997 as
Chief Financial Officer for SCA Molnlycke, a $200 million subsidiary of a
Swedish medical device and incontinence product company. In 1996, Mr. Karazin
was President and Chief Financial Officer of Jersey Integrated Healthpractice,
one of the largest physician management companies in New Jersey. From 1983 to
1995, Mr. Karazin served in financial management positions of increasing
responsibility with Merck & Co. Inc. From 1992-1995 he was the senior executive
responsible for Finance, Business Development, Strategic Planning, Information
Systems and certain marketing and product development activities for Calgon
Vestal Laboratories Inc., a $100 million division of Merck. Mr. Karazin
graduated from Clarkson University with a B.S. in Chemical Engineering and
received an M.B.A. from Fairleigh Dickenson University.
Robert G. Conway has served as Vice President, Operations since July 1998.
Prior to joining the company, Mr. Conway worked with Life Medical Sciences as an
independent consultant with principal responsibility for the engineering and
manufacturing functions associated with Clinicel. Prior to establishing his
consulting firm, Mr. Conway served as President and COO of VasoMedx, Inc. a
venture-backed medical device company. He has held engineering and manufacturing
positions of increasing responsibility with various units in the U.S. and
Australia of Johnson & Johnson. Mr. Conway received a BS in Mechanical
Engineering from New Jersey Institute of Technology.
11
<PAGE>
Consultants and Advisors
The Company utilizes various consultants and advisors for research,
development and testing of its technologies and products. The Company
periodically confers with such consultants and advisors as necessary to discuss
research, development and testing strategies and specific details of certain
projects. Certain of the listed consultants and advisors have entered into
agreements specifying the terms and scope of their individual advisory
relationship with the Company. The Company does not believe that termination of
any individual consulting or advisory agreement would materially affect its
business. None of the consultants or advisors are employed by the Company and,
therefore, may have commitments to, or consulting or advisory contracts with,
other entities which may compete with their obligations to the Company. The
Company's consultants and advisors are as follows:
Daniel Cohn, Ph.D...... Dr. Daniel Cohn is Professor of Biomaterials Science
and Head of the Biomedical Polymers Research Group,
Casali Institute of Applied Chemistry, Hebrew
University, Jerusalem, Israel. Dr. Cohn's main areas of
research are biomedical resorbable polymers, surface
tailoring of polymeric biomaterials, biomedical
composites and the development of polymeric scaffolds
for tissue engineering. Dr. Cohn developed the
Company's polymer technology.
Alan H. DeCherney, M.D. Dr. Alan DeCherney is Professor and Chairman,
Department of Obstetrics and Gynecology at UCLA School
of Medicine. Prior to that, Dr. DeCherney was Louis E.
Phaneuf Professor and Chairman of the Department of
Obstetrics and Gynecology at Tufts University School of
Medicine, and Chief of Obstetrics and Gynecology at the
New England Medical Center. Prior to this, Dr.
DeCherney was Director of the Division of Reproductive
Endocrinology, and was John Slade Ely Professor of
Obstetrics and Gynecology at Yale University School of
Medicine. He has been President of the International
Society of Gynecologic Endoscopy, the Society of
Assisted Reproductive Technologies, the Society of
Reproductive Surgeons, the Society of Reproductive
Endocrinologists, the American Society of Reproductive
Medicine, and the Society of Gynecologic Investigation.
Dr. DeCherney is a member of the American Board of
Obstetrics and Gynecology, is an Associate Editor of
the New England Medical Journal, and Editor of Assisted
Reproductive Reviews. In 1987, Dr. DeCherney was
recipient of the President's Achievement Award of the
Society of Gynecologic Investigation.
Michael P. Diamond, M.D. Dr. Michael P. Diamond, since 1994, has served as
Professor of Obstetrics and Gynecology at Wayne State
University in Detroit, Michigan, and Director of the
Division of Reproductive Endocrinology and Infertility.
Dr. Diamond is a Board-certified
Obstetrician/Gynecologist with a subspecialization in
Reproductive Endocrinology and Infertility. Dr. Diamond
previously served on the faculty at Yale University,
and as Associate Professor of Obstetrics and
Gynecology, and Director of the Division of
Reproductive Endocrinology and Infertility at
Vanderbilt University. He has long-standing involvement
in animal and clinical trials assessing postoperative
adhesion development.
Gere S. diZerega, M.D... Dr. Gere D. diZerega is Professor,
Department of Obstetrics and Gynecology at Women's'
Hospital, University of Southern California Medical
Center. Dr. diZerega's area of research include post-
operative adhesions, peritoneal healing and post-
surgical wound repair.
12
<PAGE>
Bernard Hirshowitz, M.D. Dr. Bernard Hirshowitz is Professor Emeritus of
Plastic Surgery, The Bruce Rappaport Faculty of
Medicine, Technion-Israel Institute of Technology,
Haifa, Israel. Dr. Hirshowitz serves as consultant to
one of the major Sick Benefits Funds of Israel,
comparable to Blue Cross. Dr. Hirshowitz has held both
positions since 1989. Dr. Hirshowitz developed the
Sure-Closure System and was involved in the development
of the CLINICEL products.
Ella Lindenbaum, Ph.D.. Dr. Ella Lindenbaum is the Director of the Morphology
Research Unit, The Bruce Rappaport Faculty of Medicine,
Technion-Israel Institute of Technology, Haifa, Israel.
Dr. Lindenbaum is a cell biologist, whose work led to
the development of CLINICEL products and the in-situ
tissue culturing technology.
Gary L. Loomis, Ph.D... Dr. Gary Loomis is founder, president and senior
consultant of G. L. Loomis & Associates, Inc., a firm
providing technical expertise in polymer science to a
diverse international client base. Dr. Loomis is
internationally renowned as an expert in the
preparation, modification, evaluation and processing of
polymers, especially bioresorbable polymers for medical
devices and drug delivery applications.
Mehmet C. Oz, M.D...... Dr. Mehmet C. Oz is Irving Assistant Professor of
Surgery at Columbia University College of Physicians
and Surgeons, New York and Director of The Assist
Device Program and attending surgeon of the Division of
Cardiothoracic Surgery at New York-Presbyterian Medical
Center, New York.
Eric A. Rose, M.D..... Dr. Eric A. Rose is Chairman,
Department of Surgery at College of Physicians &
Surgeons of Columbia University, New York, Surgeon-in-
Chief of Columbia-Presbyterian Medical Center, New York
and Director, Cardio-Thoracic Services at St. Michael's
Medical Center, Newark, New Jersey.
History
The Company is a Delaware corporation which was organized in August 1990 under
the name BioMedical Polymers International, Ltd. The Company changed its name to
Life Medical Sciences, Inc. in June 1992.
Risk Factors
Risk that Technologies or Proposed Products Will Never Be Successfully Developed
The Company's polymer technology and proposed products are still under
development and are subject to the risks of failure inherent in the development
of new technologies and products based on new technologies. The Company's
polymer technology and proposed products will require significant further
research, development and testing, including extensive clinical testing and
regulatory approval, prior to commercial use. Unsuccessful results from clinical
trials of the Company's proposed products or adverse findings with respect to
these products could adversely affect some or all of the Company's proposed
products. No assurance can be given that such proposed products will prove to be
safe, efficacious and non-toxic, receive requisite regulatory approvals,
demonstrate substantial therapeutic benefit, be commercialized on a timely
basis, experience no design or manufacturing problems, be manufactured on a
large scale, be economical to market, be accepted by the marketplace, or
generate sufficient revenues to support future research and development
programs. In addition, no assurance can be given that proprietary rights of
third parties will not preclude the Company from marketing its proposed products
or that third parties will not market superior or equivalent products.
13
<PAGE>
Risks Associated With Uncertainties of Clinical Trials
The Company is required to obtain approval from the FDA prior to marketing
its proposed therapeutic products in the United States and the approval of
foreign regulatory authorities to commercialize its proposed products in other
countries. To obtain such approvals, the Company is required to prove the safety
and efficacy of its proposed products through extensive preclinical studies and
clinical trials. The Company is in various stages of such testing. The
completion of any of the Company's clinical trials is dependent upon many
factors including the rate of patient enrollment and the heterogeneity of the
patients and indications to be treated. Delays in patient enrollment, as well as
the heterogeneity of patients and indications to be treated, may result in
increased trial costs and delays in FDA submissions, which could have a material
adverse effect on the Company.
A number of companies in the biotechnology and pharmaceutical industries have
suffered significant setbacks in clinical trials, even after showing promising
results in earlier studies or trials. Although the Company has obtained
favorable results to date in preclinical studies and clinical trials of certain
of its proposed products, such results may not be predictive of results that
will ultimately be obtained in or throughout such preclinical studies and
clinical trials. There can be no assurance that the Company will not encounter
problems in its clinical trials that will cause the Company to delay or suspend
its clinical trials, that the clinical trials of its proposed products will be
completed at all, that such testing will ultimately demonstrate the safety or
efficacy of such proposed products or that any proposed products will receive
regulatory approval on a timely basis, if at all. If any such problems occur,
it could have a material adverse affect on the Company.
Capital Needs; Uncertainty of Additional Funding; Going Concern Emphasis in
Auditors Report: Loss on Sale or Merger
The Company believes that available cash will not be sufficient to meet its
cash requirements through 1999. As a result of the Company's limited capital
resources, The Company's auditors have indicated in their report that there is
substantial doubt about the Company's ability to continue as a going concern.
The Company will be required to raise substantial additional funds to fund
existing operations, continue to conduct necessary research and development,
preclinical studies and clinical trials, to commercialize its proposed products,
and to fund the growth that is expected to occur if any of its proposed products
are approved for marketing. The Company is seeking such additional funding
through collaborative arrangements with strategic partners, licensing
arrangements for certain of its proposed products, and additional public or
private financings, including equity financings. Any additional equity
financings may be dilutive to stockholders. There can be no assurance that such
arrangements or financings will be available as needed or on terms acceptable to
the Company. Insufficient funds may require the Company to delay, scale back or
eliminate some or all of its research and development programs and manufacturing
and marketing efforts, or require it to license to third parties certain
products or technologies that the Company would otherwise seek to commercialize
itself. If the Company is not able to raise additional funds as needed to
continue its research and development programs and for its intended
manufacturing and marketing efforts, it may become necessary for the Company to
attempt to be merged or sold in whole or in part with or to another entity.
There can be no assurance that such a sale or merger would be available, but if
it were, the proceeds to the Company or its stockholders from such a sale or
merger could be substantially less than the amount invested by stockholders in
the Company, resulting in significant losses to the stockholders on their
investment in the Company's securities.
Limited Operating History; History of Losses
The Company has a limited history of operations that, to date, has consisted
primarily of research, development and testing of its technologies and the
commercialization of CLINICEL and the Sure-Closure System. With the exception of
the third quarter of 1994, when the gain on the sale of the Sure-Closure System
was realized, the Company has incurred significant net losses from its
inception. The Company experienced net losses of $3,830,000, $7,660,000 and
$7,602,000 for the years ended December 31, 1996, 1997 and 1998 respectively. At
December 31, 1998, the Company had an accumulated deficit of $35,433,000 which
has increased since that date. Although recent capital constraints have reduced
spending levels, the Company continues to expend substantial financial and other
resources on (i) research, development and testing of its polymer technology and
proposed products utilizing this technology; (ii) commercialization of its
CLINICEL product line and other proposed products; (iii) research, development
and testing of other proposed products; and (iv) general and administrative
expenses. The Company expects to incur additional losses as its research,
development and preclinical studies
14
<PAGE>
and clinical trials continue to expand. The Company's ability to achieve a
profitable level of operations is dependent on the continued growth of CLINICEL
sales successfully completing the development of its proposed products,
obtaining required regulatory approvals, and manufacturing and selling its
proposed products. Accordingly, the extent of future losses and the time
required to achieve profitability, if ever, is uncertain. There can be no
assurance that the Company will achieve or sustain a profitable level of
operations.
Reliance on Outside Consultants and Contractors
The Company seeks to protect its trade secrets and proprietary know-how, in
part, through confidentiality agreements with its employees, consultants,
advisors, collaborators and others. There can be no assurance that these
agreements will not be violated by the other parties, that the Company will have
adequate remedies for any breach, or that the Company's trade secrets will not
otherwise become known or be independently developed by competitors. The Company
has relationships with a number of academic consultants who are employed by
organizations other than the Company. Accordingly, the Company has limited
control over their activities and can expect only limited amounts of their time
to be dedicated to the Company's activities. These persons may have consulting,
employment or advisory arrangements with other entities that may conflict or
compete with their obligations to the Company. Consultants generally sign
agreements that provide for confidentiality of the Company's proprietary
information and results of studies. There can be no assurance, however, that the
Company will, in connection with every relationship, be able to maintain the
confidentiality of the Company's technology, dissemination of which could have a
materially adverse effect on the Company's business. To the extent that the
Company's scientific consultants develop inventions or processes independently
that may be applicable to the Company's proposed products, disputes may arise as
to the ownership of the proprietary rights to such information. Such inventions
or processes will not necessarily become the property of the Company, but may
remain the property of such persons or their full-time employers. The Company
could be required to make payments to the owners of such inventions or
processes, either in the form of cash, equity or a combination thereof. In
addition, protracted and costly litigation may be necessary to enforce and
determine the scope and validity of the Company's proprietary rights.
No Assurance of Regulatory Approvals; Potential Delays
The Company's proposed products will be subject to regulation by the FDA and
comparable agencies in foreign countries. The regulatory approval process often
takes a number of years and requires the expenditure of substantial funds. In
the United States, the FDA enforces, where applicable, development, testing,
labeling, manufacturing, registration, notification, clearance or approval,
marketing, distribution, recordkeeping and reporting requirements for new drugs,
medical devices, biologics and cosmetics. In addition, there can be no assurance
that government regulations applicable to the Company's products or the
interpretation of those regulations will not change and thereby prevent the
Company from marketing some or all of its products temporarily or permanently.
There can be no assurance that any proposed products that may be developed by
the Company will be able to satisfy the current requirements and regulations of
the FDA or comparable foreign agencies. There can be no assurance that the
Company's proposed products will ever obtain the regulatory clearance or
approval required for marketing. Products utilizing the Company's polymer
technology are likely to be regulated by the FDA as medical devices.
Whether or not FDA approval has been obtained, approval of a drug by
comparable regulatory authorities in other countries must be obtained prior to
marketing the product in those countries. The approval process varies by country
and the time required may be longer or shorter than that required for FDA
approval. There can be no assurance that clinical testing will provide evidence
of safety and efficacy in humans or that regulatory approvals will be granted
for any of the Company's products. Manufacturers of therapeutic products are
required to obtain FDA approval of their manufacturing facilities and processes,
to adhere to applicable standards for manufacturing practices and to engage in
extensive recordkeeping and reporting. Failures to obtain or delays in obtaining
regulatory approvals would adversely affect the manufacturing and marketing of
the Company's products, the Company's financial position and the Company's
revenues or royalties. When and if approvals are granted, the Company, the
approved device, the manufacture of such device and the facilities in which such
device is manufactured are subject to ongoing regulatory review. Subsequent
discovery of previously unknown problems may result in restriction on a
product's use or withdrawal of the product from the market. Adverse government
regulation that might arise from future legislative or administrative action,
particularly as it relates to healthcare reform and product pricing, cannot be
predicted.
15
<PAGE>
Patents and Proprietary Rights; No Assurance of Enforceability or Significant
Competitive Advantage
The Company's success will depend heavily on its ability to obtain and retain
patent protection for its polymer technology and other products, to preserve its
trade secrets and to operate without infringing the proprietary rights of third
parties. The Company owns three United States patents, one Canadian patent and
two Israeli patents relating to its polymer technology. The Company has also
received notification of allowance on a U.S. patent for the CLINICEL silicone
gel filled cushion. In addition, the Company has filed for patents in a number
of countries and intends to file additional patent applications in other
countries. There can be no assurance that the claims in the pending patent
applications will issue as patents, that any issued patents will provide the
Company with significant competitive advantages, that challenges will not be
instituted against the validity or enforceability of any patent owned by the
Company, or, if instituted, that such challenges will not be successful. The
cost of litigation to uphold the validity and prevent infringement of a patent
can be substantial. Furthermore, there can be no assurance that others will not
independently develop similar or superior technologies, duplicate the Company's
technologies or design around the patented aspects of the Company's
technologies. The Company could incur substantial costs in proceedings before
the United States Patent and Trademark Office, including interference
proceedings. The proceedings could also result in adverse decisions as to the
patentability of the Company's licensed or assigned inventions. Further, there
can be no assurance that the Company will not infringe upon prior or future
patents owned by others, that the Company will not need to acquire licenses
under patents belonging to others for technology potentially useful or necessary
to the Company, or that such licenses will be available to the Company, if at
all, on terms acceptable to the Company. Moreover, there can be no assurance
that any patent issued to or licensed by the Company will not be infringed by
others. Lastly, there can be no assurance that third parties will not bring
suits against the Company for patent infringement or for declaratory judgment to
have the patents owned or licensed by the Company declared invalid. While
obtaining patents is deemed important by the Company, patents are not considered
essential to the success of its business. However, if further patents do not
issue from present or future patent applications, the Company may be subject to
greater competition. The Company also relies on trade secrets and other
unpatented proprietary technology to protect its innovations. There can be no
assurance that the Company can meaningfully protect its rights in such
unpatented technology, or that others will not independently develop
substantially equivalent or superior products and processes or otherwise gain
access to the Company's technologies, that trade secrets will be established or
that secrecy obligations will be honored. To the extent that consultants, key
employees, third parties involved in the Company's projects or others
independently develop technological information, disputes may arise as to the
proprietary rights to such information, which may not be resolved in favor of
the Company.
The Company seeks to protect its trade secrets and proprietary know-how, in
part, through confidentiality agreements with its employees, consultants,
advisors, collaborators and others. There can be no assurance that these
agreements will not be violated by the other parties, that the Company will have
adequate remedies for any breach, or that the Company's trade secrets will not
otherwise become known or be independently developed by competitors. The Company
has relationships with a number of consultants who are employed by organizations
other than the Company. These persons may have consulting, employment or
advisory arrangements with other entities that may conflict or compete with
their obligations to the Company. Consultants generally sign agreements that
provide for confidentiality of the Company's proprietary information and results
of studies. There can be no assurance, however, that the Company will, in
connection with every relationship, be able to maintain the confidentiality of
the Company's technology, dissemination of which could have a material adverse
effect on the Company. To the extent that the Company's scientific consultants
develop inventions or processes independently that may be applicable to the
Company's proposed products, disputes may arise as to the ownership of the
proprietary rights to such information. Such inventions or processes will not
necessarily become the property of the Company, but may remain the property of
such persons or their full-time employers. The Company could be required to make
payments to the owners of such inventions or processes, either in the form of
cash, equity or a combination thereof. In addition, protracted and costly
litigation may be necessary to enforce and determine the scope and validity of
the Company's proprietary rights.
Potential Dependence on Reimbursement
Successful commercialization of the Company's proposed products may depend in
part on the availability of adequate reimbursement from third-party health care
payors such as Medicare, Medicaid and private insurance plans. Reimbursement
matters include both coverage issues and payment issues. Questions of coverage
raise the issue of whether a product will be paid for at all and under what
circumstances. Questions of payment relate to the amount or level of payment.
Reimbursement policies vary among payors and may depend on the setting in which
a product is used.
16
<PAGE>
Significant uncertainty exists as to the reimbursement status of newly
approved health care products. There can be no assurance that adequate third-
party reimbursement will be available for the Company to establish and maintain
price levels sufficient for realization of an appropriate return on its
investment in developing new therapies. Government and other third-party payors
are increasingly attempting to contain health care costs by limiting both
coverage and payment levels for new therapeutic products approved for marketing
by the FDA and by refusing, in some cases, to provide any coverage for uses of
approved products for disease indications for which the FDA has not granted
marketing approval. If adequate coverage and payment levels are not provided by
government and third-party payors for the Company's proposed products, the
market acceptance of these products would be adversely affected. Failure of the
Company's proposed products to be adequately reimbursed by third-party payors
could have a material adverse effect on the Company.
Uncertain Market Acceptance of Proposed Products
The Company's future growth and profitability will depend, in large part, on
the acceptance by the medical community of the Company's proposed products. This
acceptance will be substantially dependent on educating the medical community as
to the full capabilities, distinctive characteristics, perceived benefits and
clinical efficacy of the Company's proposed products. There can be no assurance
that the Company's efforts or those of others will be successful or that any of
the Company's proposed products will receive the necessary market acceptance.
Failure of the Company's proposed products to gain market acceptance would have
a material adverse effect on the Company.
Risk of Not Obtaining Additional Manufacturing Facilities and Experienced
Manufacturing Personnel and/or Establishing Manufacturing Arrangements with
Others
The Company believes it currently has contracted for sufficient manufacturing
capabilities to allow for production of its proposed products in quantities
sufficient to support its anticipated commercial needs and clinical programs. To
be successful, however, the Company must be capable of manufacturing or
contracting for the manufacture of its products in commercial quantities, in
compliance with regulatory requirements and at acceptable costs. The Company
may manufacture certain products directly at such time, if ever, that such
products are successfully developed. The Company has no experience with the
direct manufacture of these proposed products although certain of the Company's
officers have had experience in similar activities for other companies. The
manufacture of these proposed products is complex and difficult, and will
require the Company to attract and retain experienced manufacturing personnel
and to obtain the use of a manufacturing facility in compliance with FDA and
other regulatory requirements. There can be no assurance that experienced
personnel can be attracted to or retained by the Company, or that the Company
will be able to obtain the financing necessary to manufacture these products
directly.
Dependence Upon Suppliers
The Company is dependent upon subcontractors to manufacture and deliver
certain components of its proposed products in a timely and satisfactory manner.
The Company has entered into agreements with two suppliers on whom it relies for
the manufacture, assembly, packaging, and shipping of its CLINICEL product.
While there are alternative sources for these services and the proposed
products, a level of competency has been established in these relationships.
Failure to procure such components, services or products or any interruption in
the supply of such items could have a material adverse effect on the Company.
Reliance on Arrangements With Others; Limited Marketing and Sales Experience
The Company has limited experience in marketing and sales although certain of
the Company's officers have had experience in similar activities for other
companies. The Company may rely on joint venture, licensing or collaborative
arrangements for marketing and selling certain products in certain geographic
markets. Although some agreements have been entered into, there can be no
assurance that the Company will be successful in maintaining such arrangements,
or that its co-venturer, licensee or collaborator in such arrangements will be
successful in marketing and selling such products. These
17
<PAGE>
arrangements may result in the lack of control by the Company over the marketing
and selling of its proposed products. The Company may choose to market and sell
such products directly and, to do so, the Company would have to develop a
specialized marketing and sales force with technical expertise. There can be no
assurance that the Company will be able to build such a marketing or sales
force, that the cost of establishing such a marketing or sales force will not
exceed any product revenues, or that the Company's direct sales and marketing
efforts will be successful. In addition, the Company will compete with many
other companies that currently have extensive and well-funded marketing and
sales operations.
Risk of Termination of, or Loss of Rights to, Technologies Under Agreements with
Others
The Company has acquired the rights to its technologies pursuant to
agreements with research institutions. Such agreements contain provisions
requiring the Company, among other things, to develop, commercialize and/or
market products, to achieve minimum sales and/or income levels within certain
periods of time, to meet minimum funding requirements and to make royalty
payments in order to maintain the patents and other rights granted thereunder.
In addition, the patents and proprietary rights revert to the grantor on certain
dates and/or upon the occurrence of certain conditions. As of March 24, 1999,
these conditions have not occurred, however, in light of the company's current
capital resource constraints, there can be no assurance that said conditions
will not occur. In the event that certain patents and proprietary rights were
to revert to the grantor, it would have a material adverse affect on the
Company.
Dependence Upon Third Parties For Clinical Development of Proposed Products
The Company may enter into strategic alliances for the clinical development
of certain of its proposed products. There can be no assurance that the Company
will be successful in obtaining satisfactory agreements with strategic partners.
In addition, there can be no assurance that the interests and motivations of any
strategic partner would be or remain consistent with those of the Company or
that such partner would successfully perform its obligations.
Customer Concentration
As the Company's CLINICEL business increased during 1998, wholesalers,
distributors, drug retail outlets and chains and mass merchandise chain
pharmacies were added to the customer base. The Company's largest customer
(Eckerd) accounted for approximately 22% of sales in 1998. Given the continued
market consolidation among these entities, loss of these customers could have a
material adverse affect on the Company.
Competition and Technological Obsolescence
The Company is engaged in rapidly evolving and highly competitive fields.
Competition from biotechnology companies, medical device manufacturers,
pharmaceutical and chemical companies and other competitors is intense. Many of
these companies have substantially greater capital resources, research and
development staffs, facilities and experience in obtaining regulatory approvals
than the Company as well as substantially more experience than the Company in
the manufacturing, marketing and sale of products. Academic institutions,
hospitals, governmental agencies and other public and private research
organizations are also conducting research and seeking patent protection and may
develop competing products or technologies on their own or through joint
ventures. In addition, recently developed technologies or technologies that may
be developed in the future are, or may be, the basis for competitive products.
There can be no assurance that the Company's competitors will not succeed in
developing technologies and products that are more effective and/or less costly
than those being developed by the Company, thereby rendering the Company's
technologies not competitive or obsolete. The Company's proposed products may
become obsolete before the Company can obtain approval to market them or before
it can recoup related research and development or commercialization expenses.
Competitors may also be more successful than the Company in production and
marketing.
The Company believes that its competitive position will be based on its
ability to create and maintain scientifically advanced technology and
proprietary products, obtain required government approvals on a timely basis,
develop and manufacture its proposed products on a cost-effective basis and
successfully market its products. There can be no assurance that the Company's
current or proposed products under development will be able to compete
successfully with existing products or products under development by other
companies, universities and other institutions or that they will attain
regulatory approval in the United States or elsewhere.
18
<PAGE>
Risk of Using Hazardous Materials
Medical and biopharmaceutical research and development involves the
controlled use of hazardous materials. The Company is subject to federal, state
and local laws and regulations governing the use, manufacture, storage, handling
and disposal of such materials and certain waste products. Although the Company
believes that all of its current contractors comply and future contractors will
comply with safety procedures for handling and disposing of such materials under
the standards prescribed by federal, state and local regulations, the risk of
accidental contamination or injury from those materials cannot be completely
eliminated. In the event of such an accident, the Company could be held liable
for any damages that result and any such liability could exceed the resources of
the Company. Although the Company believes that it is in compliance in all
material respects with applicable environmental laws and regulations and
currently does not expect to make material capital expenditures for environment
control facilities in the near-term, there can be no assurance that the Company
will not be required to incur significant costs to comply with environmental
laws and regulations, or any assurance that the operations, business or assets
of the Company will not be materially adversely affected by current or future
environmental laws, rules, regulations or policies.
Dependence Upon Attraction and Retention of Key Personnel and Consultants
The Company is dependent upon a limited number of key management, scientific
and technical personnel. In addition, the Company's future success will depend
in part upon its ability to attract and retain highly qualified personnel. The
Company competes for such personnel with other companies, academic institutions,
government entities and other organizations. There can be no assurance that the
Company will be successful in hiring or retaining qualified personnel. Loss of
key personnel or the inability to hire or retain qualified personnel could have
a material adverse effect on the Company. In addition, the Company relies upon
consultants and advisors to assist the Company in formulating its research and
development strategies, testing and manufacturing and marketing-related issues.
All of the Company's consultants and advisors are employed outside the Company
and may have commitments or consulting or advisory contracts with other
entities.
Risk of Product Liability Claims; Insurance
The Company's business exposes it to potential liability risks that are
inherent in the testing, manufacturing and marketing of medical products. The
use of the Company's proposed products in clinical trials may expose the Company
to product liability claims and possible adverse publicity. These risks also
exist with respect to the Company's proposed products, if any, that receive
regulatory approval for commercial sales. The Company currently has product
liability insurance coverage for the use of its proposed products in clinical
trials and for the commercial sale of CLINICEL. However, there can be no
assurance that the Company will be able to obtain additional insurance coverage
at acceptable costs, if at all, or be able to maintain the current level of
insurance. Further, there can be no assurance that a product liability claim
would not materially adversely affect the Company. A product liability or other
judgment against the Company in excess of the Company's insurance coverage could
have a material adverse effect upon the Company.
Risk Inherent in International Sales and Operations
The Company intends to sell its proposed products outside of the United
States, as well as domestically. A number of risks are inherent in international
transactions. International sales and operations may be limited or disrupted by
the imposition of governmental controls, regulation of medical devices and other
medical products, export license requirements, political instability, trade
restrictions, changes in tariffs, exchange rate fluctuations and difficulties in
managing international operations.
19
<PAGE>
Risk Related to Year 2000 Computer Programs
The Company uses a number of computer programs across its operations. The
Company has not completed its assessment of the year 2000 issue but believes
that costs of addressing this issue will not have a material adverse impact on
the Company's financial position.
The Company uses a number of third party vendors to support its operations.
The Company has not completed its assessment of the year 2000 issue with these
third parties. If these parties are unable to address this issue in a timely
manner, and the Company is unable to instead conduct operations with other third
party vendors that have addressed this issue, it could result in a material
financial risk to the Company.
Anti-Takeover Provisions
The Company's Restated Certificate of Incorporation, as amended (the
"Restated Certificate of Incorporation") authorizes the issuance of a maximum of
5,000,000 shares of preferred stock ("Preferred Stock") on terms that may be
fixed by the Company's Board of Directors without further stockholder action.
The terms of any series of Preferred Stock could adversely affect the rights of
holders of the Common Stock. No Preferred Stock has been issued to date. The
issuance of Preferred Stock could make the possible takeover of the Company more
difficult or otherwise dilute the rights of holders of the Common Stock and the
market price of the Common Stock. In addition, the Company is subject to
Delaware General Corporation Law provisions that may have the effect of
discouraging persons from pursuing a non-negotiated takeover of the Company and
preventing certain changes of control.
Shares Eligible for Future Sale; Outstanding Warrants and Options; Registration
Rights
Of the Company's 7,922,559 shares of Common Stock currently outstanding,
1,807,872 shares are "restricted securities," as defined in Rule 144 of the
Securities Act, and under certain circumstances may be sold without registration
pursuant to Rule 144. The Company is unable to predict the effect that sales
made under Rule 144, or otherwise, may have on the then prevailing market price
of the Common Stock. Any substantial sale of restricted securities pursuant to
Rule 144 may have an adverse effect on the market price of the Common Stock. The
"restricted securities" are eligible for sale under Rule 144.
The Company has outstanding (i) Class A Warrants and Class B Warrants, which
could result in the issuance of 4,768,059 additional shares of Common Stock,
(ii) 1,407,000 shares of Common Stock issuable upon exercise of options which
have been granted under the Company's Amended and Restated 1992 Stock Option
Plan (the "Plan"), and (iii) approximately 1,521,000 shares of Common Stock
issuable upon exercise of currently outstanding options granted outside the
Plan. In connection with the public offering in May 1996, the Company sold to
the underwriter of that offering, a warrant to purchase 200,000 shares of Common
Stock. Such warrant is exercisable for a period of five years, commencing May 3,
1998 and has an exercise price of $7.95 per share. The foregoing options and
warrants are likely to be exercised at a time when the Company might be able to
obtain additional equity capital on more favorable terms. While these options
and warrants are outstanding, they may adversely affect the terms on which the
Company could obtain additional capital. The Company cannot predict the effect,
if any, that market sales of Common Stock, the exercise of options or warrants
or the availability of such Common Stock for sale will have on the market price
prevailing from time to time. In addition, if the exercise price of options or
warrants are adjusted downward, such options or warrants may be exercised sooner
than otherwise with a resulting increase in the number of shares of Common Stock
available for sale on the market.
Possible Volatility of Stock Price
The stock market has from time to time experienced significant price and
volume fluctuations that are unrelated to the operating performance of
particular companies. In addition, the market price of the Company's Common
Stock and the Class A and Class B Warrants has been and is likely to continue to
be highly volatile. Factors such as fluctuations in the Company's operating
results, and/or ability to obtain capital, shortfalls in revenue or earnings
from levels expected by securities analysts, announcements of technological
innovations or new products by the Company or its competitors, governmental
regulations,
20
<PAGE>
developments with respect to patents or proprietary rights, litigation, public
concern as to the safety of products developed by the Company or others and
general market conditions may have a significant adverse effect on the market
price of the Common Stock and the Warrants.
Risk of No Dividends
The Company has never declared or paid any cash dividends on the Common Stock.
There is a risk that the Company may never declare or pay any dividends on the
common stock.
21
<PAGE>
Item 2. Properties
The Company's executive offices are located in an aggregate of approximately
3,550 square feet of office space in Edison, New Jersey, pursuant to an
operating lease for the period of November 1996 to November 2001. The lease
provides for an annual fixed rent of approximately $80,000 per year for the
five-year term, and for the payment of certain operating expenses.
The Company's research and development activities and clinical studies are
currently conducted at various hospitals and universities in the United States
and certain European countries. The Company believes that these facilities are
adequate for its current research and development needs. The Company will be
required to add additional sites in connection with its expanded development and
testing activities. Currently the Company utilizes contract manufacturing
organizations to produce its proposed products for research and development
activities, clinical studies and for commercial sale.
Item 3. Legal Proceedings
The Company is not a party to any material legal proceedings and is not aware
of any such proceedings, which may be contemplated by governmental authorities.
Item 4. Submission of Matters to a Vote of Security Holders
None.
<PAGE>
PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters.
(a) Market Information
The Company's Common Stock, Units, Class A Warrants, and Class B Warrants
traded separately on the National Association of Securities Dealers Automated
Quotation System ("Nasdaq") Stock Market under the symbols CHAI,CHAIU, CHAIW,
and CHAIZ, respectively, from September 22, 1992 to November 14, 1997. Effective
November 14, 1997, the Units were deleted from the Nasdaq Stock Market because
there were no active market makers registered to trade the securities. Effective
August 28, 1998, the Company's securities were delisted from Nasdaq because the
Company failed to satisfy applicable maintenance criteria. Since delisting from
Nasdaq, the company's Common Stock, Class A Warrants, and Class B Warrants have
been quoted on the OTC Bulletin Board. The following sets forth the quarterly
high and low sales price for the periods presented. Such quotations reflect
inter-dealer prices, without retail mark-up, mark-down or commission and may
not necessarily represent actual transactions.
<TABLE>
<CAPTION>
Class A Class B
Common Stock Unit Warrant Warrant
Sales Price Sales Price Sales Price Sales Price
-------------------- -------------------- -------------------- --------------------
High Low High Low High Low High Low
------ ------ ------ ------ ------ ------ ------ ------
Fiscal Year Ended December 31, 1997
<S> <C> <C> <C> <C> <C> <C> <C> <C>
First Quarter $7 3/16 $3 1/4 $10 1/2 $ 6 $ 3 $ 1 3/8 $1 5/16 $5/8
Second Quarter 5 1/4 3 7 1/2 6 2 1/4 1 5/16 5/16 1/2
Third Quarter 5 1/8 3 1/8 8 6 2 15/16 1 1/4 1 3/8
Fourth Quarter 5 3/4 1 3/8 6 5 1/2 2 1/4 3/8 1 1/4
Fiscal Year Ended December 31, 1998
First Quarter 2 1/4 1 5/8 1/4 1/4 1/16
Second Quarter 2 3/32 7/8 1/4 5/8 3/16 1/16
Third Quarter 1 11/16 5/8 7/16 1/32 1/4 1/64
Fourth Quarter 1.000 1/4 1/16 1/48 1/32 1/96
Fiscal Year Ended December 31, 1999
January 1 through March 23, 1999 1 3/16 9/32 1/8 1/48 1/96 1/96
</TABLE>
Each Unit consists of one share of Common Stock, one Redeemable Class
A Warrant and one Redeemable Class B Warrant. The components of the Units are
transferable separately. Each Class A Warrant entitles the holder to purchase,
at an exercise price of $8.40, subject to adjustment, 1.071474 shares of Common
Stock and one Class B Warrant, and each Class B Warrant entitles the holder to
purchase, at an exercise price of $12.60, subject to adjustment, 1.071474 shares
of Common Stock. These exercise prices were adjusted from the initial exercise
prices of $9.00 and $13.50 per share, respectively, at the time the Class A
Warrants and Class B Warrants were issued due primarily to public offerings
completed in the second half of 1993 and the first half of 1996. The Class A
Warrants and the Class B Warrants (collectively, the "Warrants") are exercisable
at any time after issuance until September 21, 1999. The Warrants are subject
to redemption by the Company for $.05 per Warrant, upon 30 days written notice,
if the average closing bid price of the Common Stock exceeds $12.60 per share
with respect to Class A Warrants and $18.90 per share with respect to Class B
Warrants (subject to adjustment in each case) for 20 consecutive business days
ending the date on which the notice of redemption is given.
As an intended means of raising additional financing to fund the
growth of CLINICEL sales and the product development programs, the Company
filed, on July 30, 1998, a registration with the Securities and Exchange
Commission(SEC) covering a proposed reduction in the exercise prices of its
Class A Warrants (Nasdaq NM:CHAIW) and Class B Warrants (Nasdaq NM:CHAIZ), both
of which were scheduled to expire on September 21,1998. Although this
registration statement was declared effective by the SEC, the Company did not
proceed with the offering due to unattractive market conditions for its
securities. The expiration of both the Class A Warrants and Class B Warrants
has been extended to September 21, 1999.
(b) Approximate Number of Equity Securities Holders
As of March 23, 1998 the number of holders of record of the Company's
Common Stock was approximately 175. The Company believes that the number of
beneficial holders of its Common Stock on such date was in excess of 3000.
(c) Dividends
The Company has never paid a cash dividend on its Common Stock and
anticipates that for the foreseeable future any earnings will be retained for
use in its business and, accordingly, does not anticipate the payment of any
cash dividends.
<PAGE>
Item 6. Selected Financial Data
The selected financial data presented below (in thousands, except per share
data), for the years ended December 31, 1994, 1995, 1996, 1997 and 1998, have
been derived from audited financial statements of the Company. The financial
statements of the Company at December 31, 1997 and 1998 and for the years ended
December 31, 1996, 1997 and 1998, together with the notes thereto and the
related report of Richard A. Eisner & Company, LLP, independent auditors, are
included elsewhere in this Form 10-K. The selected financial data set forth
below should be read in conjunction with the Financial Statements of the Company
and related notes thereto and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included elsewhere in this Form 10-K.
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------------------------------------------
1994 1995 1996 1997 1998
------------ -------------- ------------- ------------- -----------
<S> <C> <C> <C> <C> <C>
Statement of Operations Data:
Revenues:
Product Sales $1,496 $ 1,715
Royalty Income $ 245 $ 155 $ 64 55
-------- -------- -------- ------- -------
Total Revenue 1,496 245 155 64 1,770
Cost of Sales 551 820
Gross Margin 945 950
Operating expenses:
Research and development 2,013 1,994 2,779 6,721 3,584
Sales and marketing 2,931 3,142
General and administrative 2,791 1,231 1,743 2,012 1,982
-------- -------- -------- ------- -------
Operating expenses 8,286 3,225 4,522 8,283 8,708
-------- -------- -------- ------- -------
(Loss) from operations (6,790) (2,980) (4,367) (8,219) (7,758)
Interest income 78 183 540 557 161
Interest expense (41) (3) (4) (5)
Gain on sale of Sure-Closure 3,354
Net (loss) $(3,399) $(2,797) $(3,830) $(7,666) (7,602)
======== ======== ======== ======= =======
Net (loss) per share $ (.84) $ (.58) $ (.55) (.97) (.96)
======== ======== ======== ======= =======
Weighted average shares 4,061 4,820 6,976 7,919 7,923
outstanding
</TABLE>
<TABLE>
<CAPTION>
December 31,
-------------------------------------------------------------------
1994 1995 1996 1997 1998
------ -------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C>
Balance Sheet Data:
Cash, cash equivalents and investments $ 1,980 $ 3,828 $ 14,278 $ 7,569 485
Working capital (deficiency). 2,794 3,657 14,121 5,975 (1,006)
Total assets................. 3,234 3,964 14,801 7,786 1,034
Total liabilities........... 997 864 1,007 1,621 2,312
Accumulated deficit.......... (13,538) (16,335) (20,165) (27,831) (35,433)
Stockholders' equity (deficiency) 2,237 3,100 13,794 6,165 (1,278)
</TABLE>
Item 7A. Quantiative and Qualitative Disclosures About Market Risk
The Company does not invest in derivative financial instruments
<PAGE>
Item 7. Management's Discussion And Analysis of Financial
Condition And Results of Operations
Financial Overview
Since its inception, the Company has been engaged primarily in research and
development of its technologies and proposed products, and the commercialization
of CLINICEL and the Sure-Closure System. In early 1998 the Company refocused
its strategy on two areas: applying its expertise in bioresorbable materials
toward the prevention and/or reduction of post surgical adhesions and the
introduction and commercial sale of CLINICEL.
Results of Operations
1997 vs. 1998
The Company had revenue of $1,715,000 from sales of CLINICEL for the
fiscal year ended December 31, 1998 and revenue of $64,000 and $55,000 from
royalties on sales of the Sure-Closure System for the fiscal years ended
December 31, 1997 and 1998, respectively. The reduction in royalties from 1997
to 1998 can be attributed to the reduced sales of the Sure-Closure System.
Cost of goods sold of $820,000 in 1998 reflects commercial costs to produce,
package and ship CLINICEL to the Company's consumer and trade customers as well
as certain introductory start up costs.
Sales and marketing expenses of $3,142,000 in 1998 were exclusively associated
with the introduction and continued promotion of CLINICEL. The major elements
of this expense category were journal advertising to both consumer and
professional audiences and contract telemarketing costs.
The Company incurred research and development expenses of $6,271,000 and
$3,584,000 for the fiscal years ended December 31, 1997 and 1998, respectively.
This decrease can be attributed primarily to the termination of the European
clinical studies of Cariel and Piliel as well as the completion of the REPEL
U.S. pilot clinical trial as of December 1997. Finally, the Company incurred
approximately $996,000 of costs for machinery and equipment utilized in research
and development charged to expense during 1977. During 1998, expenses have been
largely associated with the development and pre-clinical assessment of the
Company's expanded range of post-operative adhesion prevention products based on
its proprietary bioresorbable polymer technology.
General and administrative expenses, which consist principally of management
compensation, professional fees, investor materials and travel expenses were
$2,012,000 and $1,982,000 for the fiscal years ended December 31, 1997 and 1998,
respectively.
Interest income was $557,000 and $161,000 for the fiscal years ended December
31, 1997 and 1998, respectively. Interest income decreased primarily as a
result of a lower average cash and investments balance in 1998 as compared to
1997 due to the use of cash and investments to fund commercialization of
CLINICEL, develop the anti-adhesion products and fund general and administrative
expenses.
Interest expense was $4,000 and $5,000 for the fiscal years ended December 31,
1997 and 1998, respectively. For both 1997 and 1998, these amounts represent
the interest on capital leases entered into during 1996 and 1997 to acquire
certain office equipment.
The Company's net loss was $7,666,000 and $7,602,000 for the fiscal years
ended December 31, 1997 and 1998, respectively.
<PAGE>
1996 vs. 1997
The Company had revenue of $155,000 and $64,000 from royalties on sales of the
Sure-Closure System for the fiscal years ended December 31, 1996 and 1997,
respectively. The reduction in royalties from 1996 to 1997 can be attributed to
the reduced sales of the Sure-Closure System.
The Company incurred research and development expenses of $2,779,000 and
$6,271,000 for the fiscal years ended December 31, 1996 and 1997, respectively.
This increase can be attributed to increased spending for the development, pre-
clinical and clinical studies and manufacturing development of bioresorbable
polymer adhesion prevention products, conduct of the European clinical studies
of Cariel and Piliel and the domestic clinical study of CLINICEL and additional
expenditures supporting the management of the research and development function.
During 1997, the Company acquired machinery and equipment for use in its
bioresorbable polymer technology research and development program for
approximately $996,000. Accordingly, this cost was charged to research and
development expense as incurred. Additionally, a non-cash expense for stock-
based compensation costs of $456,000 was recorded in 1996. There was no such
expense in 1997. Research and development expenses are expected to increase for
1998 from the 1997 levels as the Company expands development of and conducts
additional clinical trials on several products.
General and administrative expenses, which consist principally of management
compensation, professional fees, investor materials and travel expenses were
$1,743,000 and $2,012,000 for the fiscal years ended December 31, 1996 and 1997,
respectively. This increase is attributable to the additional expenditures in
connection with the business development effort during 1997.
Interest income was $540,000 and $557,000 for the fiscal years ended December
31, 1996 and 1997, respectively. Interest income increased primarily as a
result of a larger average cash balance in 1997 as compared to 1996 due to the
public offering completed in May 1996.
Interest expense was $3,000 and $4,000 for the fiscal years ended December 31,
1996 and 1997, respectively. For both 1996 and 1997, these balances represent
the interest on capital leases entered into during 1996 and 1997 to acquire
certain office equipment.
The Company's net loss was $3,830,000 and $7,666,000 for the fiscal years
ended December 31, 1996 and 1997, respectively. This increase was primarily the
result of the increased scale of operations as the Company expanded its product
development efforts and strengthened its management.
Liquidity and Capital Resources
At December 31, 1998, the Company had cash and cash equivalents of $485,000
compared to cash and cash equivalents and investments of $7,569,000 at December
31, 1997. The primary use of these funds was to fund the Company's research and
development related to anti adhesion products; introduce, produce, market and
sell the CLINICEL product; and fund general and administrative expenses
associated with these activities.
At December 31, 1998, the Company had a working capital deficit of $1,006,000.
The current cash and cash equivalents balance as of December 31, 1998 may not be
sufficient to meet its cash requirements through 1999. The Company will be
required to raise substantial additional funds to continue the clinical
development and commercialization of its proposed products and to fund the
growth that is expected to occur if any of its current and proposed products are
approved for marketing. There can be no assurance that such arrangements or
financings will be available as needed or on terms acceptable to the Company.
The Company plans to seek such additional funding through collaborative
arrangements with strategic partners, licensing arrangements for certain of its
proposed products and additional equity or debt financings. The Company
continues to be in discussion with venture and private investors regarding a
private placement of new equity in amounts sufficient to support near term
operations and with its advisors regarding other public financing vehicles. Any
additional financings may be dilutive to existing stockholders. The Company is
also pursuing other initiatives, including trade receivable financing, state tax
benefit transfers and licensing/marketing agreements intended to improve its
financial condition. The company has reduced spending on certain programs as a
means of preserving its cash resources and is currently in discussions with
third parties regarding the licensing of certain technologies which it might
otherwise seek to commercialize itself.
<PAGE>
Item 8. Financial Statements and Supplementary Data
The Index to Financial Statements appears on page F-1, the Report of
Independent Auditors appears on page F-2, and the Financial Statements and Notes
to Financial Statements appear on pages F-3 to F-15.
Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure.
None.
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant.
The information called for by this item is incorporated by reference herein
to the definitive Proxy Statement to be filed by the Company pursuant to
Regulation 14A within 120 days after the close of the 1998 fiscal year. Certain
information with regard to the executive officers of the Company is contained in
Item 4 hereof and is incorporated by reference in this Part III.
Item 11. Executive Compensation.
The information called for by this item is incorporated herein by reference
to the definitive Proxy Statement to be filed by the Company pursuant to
Regulation 14A within 120 days after the close of the 1998 fiscal year.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The information called for by this item is incorporated herein by reference
to the definitive Proxy Statement to be filed by the Company pursuant to
Regulation 14A within 120 days after the close of the 1998 fiscal year.
Item 13. Certain Relationships and Related Transactions.
The information called for by this item is incorporated herein by reference
to the definitive Proxy Statement to be filed by the Company pursuant to
Regulation 14A within 120 days after the close of the 1998 fiscal year.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) 1. Financial Statements.
An Index to Financial Statements appears on page F-1.
2. Schedules.
None
3. Exhibits.
3.1 Restated Certificate of Incorporation of Registrant, filed December
26, 1991, as amended. (1)
3.1(a) Amendment to Restated Certificate of Incorporation, dated August 21,
1992. (1)
3.2 By-Laws of Registrant. (1)
10.1 Amended and Restated 1992 Stock Option Plan of Registrant. (14) (15)
10.2 Agreement, dated June 14, 1991, between Registrant and Yissum
Research Development Company of the Hebrew University of Jerusalem
("Yissum"). (1)
10.5 Form of Indemnification Agreement entered into between Registrant and
certain officers and directors of Registrant. (2)
10.6 Agreement, dated June 1991, between Registrant and the Technion
Research and Development Foundation, Ltd. (the "Technion") as
assigned by the Technion to Dimotech, Ltd. (1)
<PAGE>
10.7 Agreement, dated as of April 14, 1992, between Registrant and Mr.
Joel Gold. (1) (15)
10.8 Assignment of rights relating to a patent on wound dressing to
Registrant by Dimotech, Ltd. (3)
10.9 Assignment of certain rights relating to the polymer technology to
Registrant by Yissum. (3)
10.10 Form of Non-Qualified Stock Option Agreement. (4) (15)
10.11 Form of Incentive Stock Option Agreement. (4) (15)
10.12 Asset Purchase Agreement between Registrant and MedChem Products,
Inc. dated as of July 29, 1994. (5)
10.13 Option Agreement, dated October 26, 1994, between Registrant and
Edward J. Quilty. (6)
10.14 Underwriting Agreement between Registrant and D.H. Blair Investment
Banking Corp. (7)
10.15 Unit Purchase Option between Registrant and D.H. Blair Investment
Banking Corp. (7)
10.16 Agreement, dated as of February 3, 1994, between Registrant and
Dimotech, Ltd. (7)
10.17 Warrant Agreement among Registrant, D. H. Blair Investment Banking
Corp. and American Stock Transfer & Trust Company including forms of
Class A and Class B Warrants. (7)
10.18 Warrant Agreement among Registrant and American Stock Transfer and
Trust Company. (7)
10.19 Agreement, dated as of February 1994, between Registrant and Yissum.
(7)
10.20 M/A Agreement, dated September 22, 1992, between Registrant and D. H.
Blair Investment Banking Corp. (7)
10.21 Option Agreement, dated as of December 13, 1993, between Registrant
and Dimotech, Ltd. (7)
10.22 Employment Agreement dated June 12, 1995 between Registrant and Eli
Pines, Ph.D. (8) (15)
10.23 Amendment No. 2 dated as of January 1, 1996 to the Agreement between
the Registrant and Yissum. (2)
10.24 Agreement dated July 16, 1995 between the Registrant and Dimotech,
Ltd. (2)
10.25 Amendment No. 2 dated February 11, 1996 to the Agreement between the
Registrant and Dimotech, Ltd. (2)
10.26 Option Agreement dated March 21, 1995 between Registrant and Herbert
Moskowitz. (2) (15)
10.27 Option Agreement dated March 21, 1995 between Registrant and Irwin
Rosenthal. (2) (15)
10.28 Assignment of rights relating to a patent for treatment of Keloid and
Hypertrophic scars to Registrant from Dimotech, Ltd. (2)
10.29 Warrant Agreement between Registrant and Wedbush Morgan Securities.
(13)
10.30 Underwriting Agreement between Registrant and Wedbush Morgan
Securities. (13)
10.31 Employment Agreement dated May 29, 1996 between Registrant and Robert
P. Hickey. (10) (15)
10.32 Employment Agreement dated May 30, 1996 between Registrant and Dr.
Herbert Moskowitz. (10) (15)
10.33 Lease Agreement dated August 13, 1996 between Registrant and Metro
Four Associates, LP, 8th Floor of 379 Thornall Street. (11)
10.34 Option Agreement dated June 12, 1995 between Registrant and Eli
Pines, Ph.D. (12) (15)
10:35 Option Agreement dated August 15, 1996 between Registrant and Walter
R. Maupay. (12) (15)
10.36 Option Agreement dated March 5, 1997 between Registrant and Edward A.
Celano (13) (15)
10.37 Amendment No. 3 dated as of October 1, 1996 to the Agreement between
the Registrant and Yissum.
10.38 Option Agreement dated June 3, 1997 between Registrant and Joel L.
Gold. (15)
<PAGE>
10.39 Option Agreement dated June 3, 1997 between Registrant and
Coy Eklund. (15)
10.40 Option Agreement dated June 3, 1997 between Registrant and
Herbert Moskowitz. (15)
10.41 Option Agreement dated June 3, 1997 between Registrant and
Irwin M. Rosenthal. (15)
10.42 Option Agreement dated June 17, 1997 between Registrant and Robert P.
Hickey.
10.43 Option Agreement dated June 17, 1997 between Registrant and Eli
Pines. (15)
10.44 Option Agreement dated June 17, 1997 between Registrant and Eli
Pines. (15)
10.45 Option Agreement dated June 17, 1997 between Registrant and Robert P.
Hickey. (15)
10.46 Option Agreement dated June 17, 1997 between Registrant and Robert P.
Hickey. (15)
10.47 Option Agreement dated June 17, 1997 between Registrant and Eli
Pines. (15)
10.48 Option Agreement dated May 28, 1998 between Registrant and Robert
Hickey. *(15)
10.49 Option Agreement dated May 28, 1998 between Registrant and Robert
Hickey. *(15)
10.50 Option Agreement dated May 28, 1998 between Registrant and Eli
Pines. *(15)
10.51 Agreement dated April 22, 1998 between Registrant and CP&S.*
10.52. Employment Agreement dated July 25, 1998 between Registrant and Drew
Karazin.*(15)
10.53. Employment Agreement dated July 1, 1998 between Registrant and Robert
G. Conway.*(15)
10.54. Option Agreement dated May 28, 1998 between Registrant and
Mark Citron.*(15)
10.55. Option Agreement dated May 28, 1998 between Registrant and
Mark Citron.*(15)
10.56. Option Agreement dated July 1, 1998 between Registrant and Robert
G. Conway.*(15)
10.57. Option Agreement dated May 28, 1998 between Registrant and Robert
Hickey.*(15)
10.58 Option Agreement dated May 28, 1998 between Registrant and Robert
Hickey.*(15)
10.59 Option Agreement dated December 31, 1998 between Registrant and
Robert Hickey.*(15)
10.60 Option Agreement dated July 20, 1998 between Registrant and Drew
Karazin.*(15)
10.61 Option Agreement dated December 31, 1998 between Registrant and Drew
Karazin.*(15)
10.62 Option Agreement dated May 28, 1998 between Registrant and Eli
Pines.*(15)
10.63 Option Agreement dated May 28, 1998 between Registrant and Ed
Celano.*(15)
10.64 Option Agreement dated May 28, 1998 between Registrant and Ed
Celano.*(15)
10.65 Option Agreement dated May 28, 1998 between Registrant and Coy
Eklund.*(15)
10.66 Option Agreement dated May 28, 1998 between Registrant and Coy
Eklund.*(15)
10.67 Option Agreement dated May 28, 1998 between Registrant and Coy
Eklund.*(15)
10.68 Option Agreement dated May 28, 1998 between Registrant and Coy
Eklund.*(15)
10.69 Option Agreement dated May 28, 1998 between Registrant and Joel
Gold.*(15)
10.70 Option Agreement dated May 28, 1998 between Registrant and Joel
Gold.*(15)
10.71 Option Agreement dated May 28, 1998 between Registrant and Joel
Gold.*(15)
10.72 Option Agreement dated May 28, 1998 between Registrant and Joel
Gold.*(15)
10.73 Option Agreement dated May 28, 1998 between Registrant and Walter
Maupay*(15)
10.74 Option Agreement dated May 28, 1998 between Registrant and Walter
Maupay*(15)
10.75 Option Agreement dated May 28, 1998 between Registrant and Walter
Maupay.*(15)
10.76 Option Agreement dated May 28, 1998 between Registrant and Herb
Moskowitz.*(15)
10.77 Option Agreement dated May 28, 1998 between Registrant and Herb
Moskowitz.*(15)
10.78 Option Agreement dated May 28, 1998 between Registrant and Herb
Moskowitz.*(15)
10.79 Option Agreement dated May 28, 1998 between Registrant and Herb
Moskowitz.*(15)
10.80 Option Agreement dated May 28, 1998 between Registrant and Irwin
Rosenthal.*(15)
10.81 Option Agreement dated May 28, 1998 between Registrant and Irwin
Rosenthal.*(15)
10.82 Option Agreement dated May 28, 1998 between Registrant and Irwin
Rosenthal.*(15)
10.83 Option Agreement dated May 28, 1998 between Registrant and Eli
Pines.*(15)
10.84 Option Agreement dated May 28, 1998 between Registrant and Eli
Pines.*(15)
10.85 Option Agreement dated May 28, 1998 between Registrant and Eli
Pines.*(15)
23.1 Consent of Richard A. Eisner & Company, LLP. *
27. Financial Data Schedule.*
* Filed herewith.
____________________
(1) Incorporated by reference to the Registrant's Registration Statement on
Form S-1 (File No. 33-94008) declared effective on September 22, 1992.
(2) Incorporated by reference to Registrant's Registration Statement on Form S-
1 (File No. 333-02588) declared effective on May 3, 1996.
(3) Incorporated by reference to the Registrant's report on Form 10-Q for the
quarter ended September 30, 1992.
(4) Incorporated by reference to the Registrant's report on Form 10-K for the
year ended December 31, 1993.
(5) Incorporated by reference to the Registrant's report on Form 8-K filed by
the Company on August 12, 1994.
(6) Incorporated by reference to the Registrant's report on Form 10-Q for the
quarter ended September 30, 1994.
(7) Incorporated by reference to the Registrant's report on Form 10-K for the
year ended December 31, 1994.
(8) Incorporated by reference to the Registrant's report on Form 10-Q for the
quarter ended June 30, 1995.
(9) Intentionally omitted
(10) Incorporated by reference to the Registrant's report on Form 10-Q for the
quarter ended June 30, 1996.
(11) Incorporated by reference to the Registrant's report on Form 10-Q for the
quarter ended September 30, 1996.
(12) Incorporated by reference to the Registrant's Registration Statement on
Form S-3 (File No. 333-19195) declared effective on January 3, 1997.
(13) Incorporated by reference to the Registrant's report on Form 10-K for the
year ended December 31, 1996.
(14) Incorporated by reference to the Registrant's report on Form 10-Q for the
quarter ended June 30, 1997.
(15) Includes compensatory plan and or arrangements required to be filed
pursuant to item 14 (c) of Form 10-K.
(b) Reports on Form 8-K
None
(c) See (a) 3.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Life Medical Sciences, Inc.
(Registrant)
By: /s/ Robert P. Hickey
--------------------------------
Robert P. Hickey
Chief Executive Officer and President
(principal executive officer)
Dated: March 24, 1999
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <C> <C>
/s/ Robert P. Hickey Director, President and March 24, 1999
- ------------------------------ Chief Executive Officer
Robert P. Hickey (principal executive
officer)
/s/ Drew Karazin Vice President, Chief Financial Officer March 24, 1999
- ------------------------------ (principal financial and
Drew Karazin accounting officer)
/s/ Herbert Moskowitz Director and Chairman of March 24, 1999
- ------------------------------ the Board
Herbert Moskowitz
/s/ Coy Eklund Director March 24, 1999
- ------------------------------
Coy Eklund
/s/ Joel L. Gold Director March 24, 1999
- ------------------------------
Joel L. Gold
/s/ Irwin M. Rosenthal Director March 24, 1999
- ------------------------------
Irwin M. Rosenthal
/s/ Walter R. Maupay Director March 24, 1999
- ------------------------------
Walter R. Maupay
/s/ Edward A. Celano Director March 24, 1999
- ------------------------------
Edward A. Celano
</TABLE>
<PAGE>
INDEX TO FINANCIAL STATEMENTS
Page
----
Number
------
REPORT OF INDEPENDENT AUDITORS ...... F-2
BALANCE SHEETS.............................................. F-3
STATEMENTS OF OPERATIONS.................................... F-4
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY) F-5
STATEMENTS OF CASH FLOWS.................................... F-6
NOTES TO FINANCIAL STATEMENTS............................... F-7
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors and Stockholders
Life Medical Sciences, Inc.
Edison, New Jersey
We have audited the accompanying balance sheets of Life Medical Sciences,
Inc. as of December 31, 1997 and 1998 and the related statements of operations,
changes in stockholders' equity (deficiency) and cash flows for each of the
years in the three-year period ended December 31, 1998. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements enumerated above present fairly,
in all material aspects, the financial position of Life Medical Sciences, Inc.
as of December 31, 1997 and 1998 and the results of its operations and its cash
flows for each of the years in the three-year period ended December 31, 1998 in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note A to the
financial statements the Company has sustained recurring losses from operations,
and has both a working capital and stockholders' deficiency at December 31,
1998. As a result, the Company has limited capital resources for its continuing
operations, which raises substantial doubt about its ability to continue as a
going concern. Management's plans in regard to these matters are also discussed
in Note A. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
RICHARD A. EISNER & COMPANY, LLP
New York, New York
March 2, 1999
<PAGE>
LIFE MEDICAL SCIENCES, INC.
BALANCE SHEETS
(In thousands, except per share data)
<TABLE>
<CAPTION>
December 31
----------------------------------
1997 1998
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents....................................... $ 2,733 $ 485
Short-term investments.......................................... 4,306
Inventory......................................................... 264
Accounts Receivable (Net of allowance of $30)..................... 120
Prepaid expenses and advances..................................... 90 33
------ ------
Total current assets...................................... 7,129 902
Long-term investments ............................................ 530
Furniture and equipment-at cost (less depreciation of $58 and $91) 114 85
Deposits 13 47
------ ------
TOTAL.................................... $ 7,786 $ 1,034
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current liabilities:
Capital lease obligation....................................... $ 8 $ 8
Accounts payable............................................... 294 710
Accrued expenses............................................... 852 991
Other Liabilities.............................................. 0 199
-------- --------
Total current liabilities................................ 1,154 1,908
Capital lease obligation......................................... 26 18
Deferred royalty income.......................................... 441 386
-------- --------
Total liabilities........................................ $ 1,621 $ 2,312
-------- --------
Commitments and other matters
Stockholders' equity (deficiency):
Preferred stock, $.01 par value: shares authorized - 5,000;
none issued ....................................................
Common stock, $.001 par value; shares authorized - 23,750;
issued and outstanding - 7,923.................................. 8 8
Additional paid-in capital........................................ 33,988 34,147
Accumulated deficit............................................... (27,831) (35,433)
-------- --------
Total stockholders' equity (deficiency) 6,165 (1,278)
-------- --------
TOTAL..................................... $ 7,786 $ 1,034
======== ========
</TABLE>
See accompanying notes to financial statements.
F-3
<PAGE>
LIFE MEDICAL SCIENCES, INC
STATEMENTS OF OPERATIONS
(In thousands, except per share data)
<TABLE>
<CAPTION>
Year Ended December 31,
1996 1997 1998
<S> <C> <C> <C>
Revenues:
Product Sales...................................... $ 1,715
Royalty income..................................... $ 155 $ 64 55
------- ------- -------
155 64 1,770
Cost of goods sold..................................... 820
-------
Gross Profit........................................... 950
Operating expenses:
Research and development expenses..................... 2,779 6,271 3,584
Sales and marketing................................... 3,142
General and administrative expenses................... 1,743 2,012 1,982
------- ------- -------
Operating expenses................................ 4,522 8,283 8,708
(Loss) from operations................................. (4,367) (8,219) (7,758)
Interest income........................................ 540 557 161
Interest expense....................................... (3) (4) (5)
------- ------- -------
Net (loss) $(3,830) $(7,666) $(7,602)
======= ======= =======
Net (loss) per share -basic & diluted.................. $(0.55) $(0.97) $(.96)
======= ======= =======
Weighted average shares outstanding - basic & diluted.. 6,976 7,919 7,923
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE>
LIFE MEDICAL SCIENCES, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY)
(In thousands)
<TABLE>
<CAPTION>
Additional
Common Stock Paid-in Accumulated
Shares Amount Capital Deficit
<S> <C> <C> <C> <C>
Balance - January 1, 1996................................. 5,422 $ 5 $ 19,430 $ (16,335)
Common stock issued (net of expenses).............. 2,493 3 14,065
Fair value of options issued for compensation...... 456
Net (loss) for the year............................ (3,830)
--------- -------- --------- ----------
Balance - December 31, 1996............................... 7,915 8 33,951 (20,165)
Common stock issued ............................... 8 37
Net (loss) for the year............................ (7,666)
--------- -------- ---------- ----------
Balance - December 31, 1997............................... 7,923 8 33,988 (27,831)
Fair value of options issued for compensation...... 159
Net (loss) for the year............................ (7,602)
--------- -------- --------- ----------
Balance - December 31, 1998............................... 7,923 $ 8 $ 34,147 $ (35,433)
========= ======== ========= ==========
</TABLE>
See accompanying notes to financial statements.
F-5
<PAGE>
LIFE MEDICAL SCIENCES, INC.
STATEMENTS OF CASH FLOWS
( In thousands )
<TABLE>
<CAPTION>
Year Ended December 31,
1996 1997 1998
<S> <C> <C> <C>
Cash flows from operating activities:
Net (loss).............................................. $ (3,830) $ (7,666) $(7,602)
Adjustments to reconcile net (loss) to net cash (used in)
operations:
Deferred royalty income......................... (139) (64) (55)
Fair value of common stock and options issued as
compensation................................ 456 159
Depreciation.................................... 33 37 33
Changes in operating assets and liabilities:....
(Increase) in accounts receivable............ (120)
(Increase) in inventory...................... (264)
(Increase) decrease in prepaid expenses and. (292) 221 57
advances................................
(Increase) decrease in deposits.............. (8) 16 (34)
Increase in accounts payable and
accrued expenses........................ 272 685 555
(Decrease) increase in other liabilities..... (15) 199
-- ------- ------
Net cash (used in) operating activities (3,523) (6,771) (7,072)
------- ------- -------
Cash flows from investing activities:
Purchase of equipment.................................... (93) (36) (4)
Disposition of equipment................................. 16 68
Purchase of investment securities........................ (7,042) (9,627)
Proceeds from maturity of investment securities.......... 4,000 7,833 4,836
------- ------- -------
Net cash provided by (used in) investing activities.. (3,119) ( 1,762) 4,832
------- ------- -------
Cash flows from financing activities:
Proceeds from issuance of common stock, net of expenses 14,068 37
Payment on capital lease obligation...................... (18) (7) (8)
------- ------- -------
Net cash provided by (used in) financing activities. 14,050 30 (8)
------- ------- -------
Net increase (decrease) in cash and cash equivalents.......... 7,408 (8,503) (2,248)
Cash and cash equivalents at beginning of year................ 3,828 11,236 2,733
------- ------- -------
Cash and cash equivalents at end of year...................... $ 11,236 $ 2,733 $ 485
======= ========= =======
Supplementary cash flow information:
Interest paid........................................... $ 3 $ 4 $ 5
Equipment purchased under capital lease.............. $ 41
</TABLE>
See accompanying notes to financial statements.
F-6
<PAGE>
LIFE MEDICAL SCIENCES, INC.
NOTES TO FINANCIAL STATEMENTS
(NOTE A)-- The Company and Basis of Presentation:
Life Medical Sciences, Inc. (the "Company") was incorporated on August 1,
1990. The Company is engaged in the development of cost-effective medical
products. The Company is developing REPEL and REPEL-CV, its resorbable adhesion
barrier films used to prevent surgical adhesions; RESOLVE and RELIEVE, its
resorbable adhesion barrier coatings used to prevent surgical adhesions and in
1998 initiated sales of its CLINICEL line of scar management products. In
September 1993, the Company commercially introduced its first product, the Sure-
Closure System, a device designed for the mechanical closure of tissue deficit
wounds. On July 29, 1994, the Company sold or assigned to MedChem Products, Inc.
("MedChem") substantially all of its assets related to the Sure-Closure System,
including rights, agreements and licenses. In April 1998, the Company
commercially introduced its second product CLINICEL, a device designed to
alleviate the discomfort of and improve the physical appearance of hypertrophic
and keloid scars. In January 1999 the Company initiated a pilot clinical trial
for REPEL-CV in open-heart surgical procedures.
The accompanying financial statements have been prepared on a going-concern
basis. As shown in the accompanying financial statements, the Company has
incurred recurring losses from operations. As a result the Company has limited
capital resources for its continuing operations and has both a working capital
and stockholders' deficiency at December 31, 1998, which raises substantial
doubt about the Company's ability to continue as a going concern. The Company
is pursuing various financing alternatives, including collaborative arrangements
with strategic partners, licensing arrangements for certain of its proposed
products and additional public or private financings including equity
financings, which management believes could result in the infusion of sufficient
capital to alleviate this concern. There is no assurance that these initiatives
will be successful or that other financing arrangements will be available. The
financial statements do not include any adjustments that might be necessary if
the Company is unable to continue as a going concern.
(NOTE B) --Summary of Significant Accounting Policies:
[1] Revenue Recognition:
Revenue is recognized when product is shipped to customers.
[2] Cash equivalents:
The Company considers all highly liquid investment instruments purchased with
a maturity of three months or less to be cash equivalents.
[3] Investments:
Investments purchased with a maturity of more than three months, and which
mature less than twelve months from the balance sheet date, are classified as
short-term investments. Long-term investments are those with maturities greater
than twelve months from the balance sheet date. The Company generally holds
investments to maturity, however, since the Company may, from time to time, sell
securities to meet cash requirements, the Company classifies its investments as
available-for-sale as defined by Statement of Financial Accounting Standard
("SFAS") No. 115, "Accounting for Certain Investments in Debt and Equity
Securities." Available-for-sale securities are carried at market value with
unrealized gains and losses reported as a separate component of stockholders'
equity. Gross realized gains and losses on the sales of investment securities
are determined on the specific identification method.
[4] Financial Instruments:
The carrying amounts of cash, investments, accounts receivable, inventories,
accounts payable, accrued expenses and capitalized lease obligations approximate
their fair values.
<PAGE>
LIFE MEDICAL SCIENCES, INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
[5] Inventory:
Inventory is valued at the lower of cost or market. Cost is determined using
an average cost method.
[6] Advertising:
Advertising costs are charged to expense as they are incurred. Total 1998
expense was $2,266,000.
[7] Depreciation:
Furniture and equipment are recorded at cost, and are depreciated using the
straight-line method based upon an estimated useful life of 5 years.
[8] Research and development:
Research and development costs, including those payments described in Note G,
are charged to expense as incurred.
[9] Patent costs:
Costs incurred in connection with acquiring patent rights and the protection
of proprietary technologies are charged to expense as incurred.
[10] Royalty income:
Royalty income is based on the quarterly sales of the Sure-Closure System and
any line extensions or embodiments thereof. Royalties are calculated and
credited to the Company within forty-five days after the last day of each
quarter. The Company recognizes such income when the amounts earned become fixed
and determinable. Royalties earned by the Company are applied to the
outstanding deferred royalty income balance.
[11] Use of estimates in the preparation of financial statements:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
[12] Stock based compensation:
The Company accounts for stock-based employee compensation under Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees", and
related interpretations. The Company has adopted the disclosure-only provisions
of SFAS No. 123, "Accounting for Stock-Based Compensation".
<PAGE>
LIFE MEDICAL SCIENCES, INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
[13] Loss per share:
The Company calculates its loss per share under the provisions of SFAS No.
128, "Earnings Per Share". SFAS No. 128 requires a dual presentation of "basic"
and "diluted" loss per share on the face of the statements of operations. Basic
loss per share is computed by dividing the loss by the weighted average number
of shares of common stock outstanding during each period. Diluted loss per
share includes the effect, if any, from the potential exercise or conversion of
securities, such as stock options and warrants, which would result in the
issuance of incremental shares of common stock. However, such potential common
shares (see Note E) have not been included in the calculation of diluted loss
per share since the effect would reduce the loss per share.
(NOTE C)--Investments:
At December 31, 1997 investments consist of commercial paper, Treasury bills
and other obligations of governmental agencies, which are held as available-for-
sale securities. Investments are presented at amortized cost which is
approximately equal to fair value at December 31, 1997. The company's long term
investments at December 31, 1997 have a maturity exceeding 25 years.
(NOTE D) - Accrued Expenses:
Accrued expenses is comprised of the following (in thousands):
December 31,
------------
1997 1998
----- -----
Research agreements....... $ 726 $ 873
Other..................... 126 118
----- -----
Total..................... $ 852 $ 991
===== =====
(NOTE E) -- Stockholders' Equity (Deficiency):
[1] Common stock:
In May 1996, the Company completed a public offering of 2,300,000 shares of
common stock at $6.625 per share (initial offering of 2,000,000 shares plus an
additional 300,000 issued due to the exercise of the underwriters' over-
allotment option) and received net proceeds of approximately $13.4 million,
including proceeds received upon the exercise of the underwriters' over-
allotment option and after deducting underwriting discounts and commissions and
offering expenses.
<PAGE>
LIFE MEDICAL SCIENCES, INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
[2] Warrants:
In 1992, the Company consummated its initial public offering of 1,150,000
units, each unit consisting of one share of common stock and two warrants. The
warrants included in each unit consist of a redeemable Class A Warrant and a
redeemable Class B Warrant. Each Class A Warrant entitles the holder to
purchase, at an exercise price of $8.40, subject to adjustment, 1.071474 shares
of Common Stock and one Class B Warrant. Each Class B Warrant entitles the
holder to purchase, at an exercise price of $12.60, subject to adjustment,
1.071474 shares of Common Stock. The warrants are redeemable by the Company for
$.05 per warrant on 30 days written notice under certain circumstances.
In 1993, the Company consummated a public offering of 500,000 units; each unit
consisting of two shares of common stock and one Class A Warrant.
At December 31, 1998 there were 1,650,000 Class A Warrants and 1,150,000
Class B Warrants outstanding. The warrants'expiration date has been extended to
September 21, 1999.
The Company sold to the underwriter of its public offering in May 1996, for
nominal consideration, a warrant to purchase 200,000 shares of Common Stock.
The warrant has an exercise price of $7.95 per share and is exercisable for a
period of five years commencing May 3, 1998.
[3] Options:
The Company may issue options to purchase up to an aggregate of 1,407,500
shares of Common Stock pursuant to its 1992 Stock Option Plan, as amended (the
"Plan"). Options to purchase shares may be granted under the Plan to persons
who, in the case of incentive stock options, are employees of the Company; or,
in the case of SARs and nonstatutory stock options, are officers and key
employees of the Company, or agents, medical and scientific advisors, directors
of or consultants to the Company, whether or not otherwise employed by the
Company. The exercise price is determined by the Stock Option Committee of the
Board of Directors at the time of the granting of an option, but in the case of
an incentive stock option, the exercise price shall not be less than the fair
market value of the stock on the date of grant. Options and SARs vest over a
period not greater than five years, and expire no later than ten years from the
date of grant.
Options to purchase up to 1,407,000 shares of Common Stock pursuant to the
Plan are outstanding as of December 31, 1998. In addition to the shares of
Common Stock reserved for issuance pursuant to the Plan, the Company has
reserved 1,521,000 shares of Common Stock for issuance upon exercise of
outstanding options pursuant to other agreements. These options vest over
various periods and expire no later than seven years from the date of vesting.
During 1998 the Company reduced the exercise price of 1,204,000 options,
which are included in the number of options forfeited and the number granted
during the year.
The Company applies APB Opinion 25 and related Interpretations in accounting
for its options to employees. Although no compensation cost has been recognized
for its stock option grants to employees, the Company has included stock based
compensation costs associated with options granted under consulting agreements,
in research and development and general and adminstrative expenses of $435,000
<PAGE>
LIFE MEDICAL SCIENCES, INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
and $21,000, respectively for 1996 and in research and development expenses of
$159,000 for 1998. Had compensation cost for the Company's stock option grants
to employees been determined based on the fair value at the grant dates for
awards consistent with the method of FASB Statement 123, the Company's net loss
and loss per share would have been increased to the pro forma amounts indicated
below (in thousands, except per share data).
<TABLE>
<CAPTION>
1996 1997 1998
------ ------ ----
<S> <C> <C> <C> <C>
Net loss As reported $(3,830) $(7,666) $(7,602)
Pro forma $(4,329) $(9,268) $(8,992)
Net loss per share- As reported $(0.55) $ (0.97) $ (0.96)
basic & diluted Pro forma $(0.62) $ (1.17) $ (1.13)
</TABLE>
A summary of the status of the Company's stock options as of December 31,
1996, 1997 and 1998, and changes during the years ended on those dates is
presented below (in thousands, except per share data):
<TABLE>
1996 1997 1998
----------------------------------- ----------------------------------- --------------------------------
Weighted-Average Weighted-Average Weighted-Average
Fixed Options Shares Exercise Price Shares Exercise Price Shares Exercise Price
- --------------- ------------ -------------------- ------------ -------------------- ------------ -------------------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at
beginning of 1,028 $5.65 1,459 $6.90 1,874 $5.50
year
Granted 625 8.01 1,025 4.53 2,688 1.73
Exercised (193) 3.85 (8) 2.50 - -
Forfeited (1) 6.00 (602) 7.29 (1,634) 5.32
Outstanding at
end of year 1,459 6.90 1,874 5.50 2,928 2.13
Options
exercisable at 926 6.35 1,299 5.64 1,935 2.64
year-end
Weighted-average
fair value
of options 4.09 2.13 0.44
granted during
the year.
</TABLE>
The following table summarizes information about fixed stock options outstanding
at December 31, 1998 (in thousands, except per share data):
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
-------------------------------------------------------------- ----------------------------------------
Number Weighted-Average Number
Range Outstanding Remaining Weighted-Average Exercisable Weighted-Average
Exercise Prices at 12/31/98 Contractual Life Exercise Price at 12/31/98 Exercise Price
- ----------------- ---------------- --------------------- --------------------- ----------------- ---------------------
<S> <C> <C> <C> <C> <C>
$0.07-0.63 442 7 years $0.09 5 $0.58
1.31-2.75 2,108 4 years 1.89 1,605 1.92
4.00-9.12 378 2 years 5.90 325 6.22
------- ---------- ------- ------- -------
2,928 4 years $2.13 1,935 $2.64
</TABLE>
<PAGE>
LIFE MEDICAL SCIENCES, INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option-pricing model with the following weighted-average
assumptions used for grants in 1996, 1997 and 1998: no dividend yield, expected
volatility of 76%, a risk-free interest rate of 5.5% to 6.0% and an expected
life of 2.5 to 3.3 years.
(NOTE F)-- Income Taxes:
At December 31, 1998, the Company has net operating loss carryforwards for
income tax purposes of approximately $32,726,000 and approximately $ 400,000 of
research and development tax credits available to offset future federal income
tax, subject to limitations for alternative minimum tax. The net operating loss
carryforwards and the research and development credit carryover are subject to
examination by the tax authorities and expire in various years from 2005 through
2018. Certain other limitations may apply. Any significant issuance of the
Company's stock, however, may trigger Section 382 limitations on the use of net
operating loss carryforwards under the Internal Revenue Code of 1986.
Deferred tax benefits, which amounted to $10,956,000 and $13,976,000 at
December 31, 1997 and 1998 are principally attributable to net operating loss
carryforwards and have been offset by a valuation allowance due to management's
uncertainty regarding the future profitability of the Company. The valuation
allowance has been increased by $1,517,000, $3,086,000 and $3,020,000 in 1996,
1997, and 1998, respectively.
(NOTE G)-- Research and License Agreements:
[1] Yissum agreement:
During June 1991, the Company entered into a research and license agreement
with Yissum Research and Development Company of the Hebrew University of
Jerusalem ("Yissum"), which was amended in February 1994, as of January 1996 and
as of October 1996, pursuant to which the Company finances and Yissum conducts
research and development at the Hebrew University of Jerusalem in the field of
biomedical polymers. In connection with the agreement, Yissum assigned to the
Company its worldwide rights to patents, patent applications and know-how to
develop, manufacture and market products relating to this technology.
Pursuant to the agreement, the Company is obligated to pay a royalty of five
percent of all net sales of the Company's products derived under the agreement.
The maximum amount of royalties to be paid during the term of the agreement is
$5,500,000. The agreement continues until the earlier of the last date upon
which the patents expire, or at the end of fifteen years from the date of the
first commercial sale pursuant to the assignment. Yissum has the right in its
sole discretion to terminate the agreement if, among other things the Company
does not attain certain milestones by specified dates. The January 1996
amendment gives the Company options for three one-year extensions, through 2003,
of the periods in which certain milestones must be attained, each for a payment
of $50,000. Upon termination of the agreement for any reason, the patents,
patent applications and know-how assigned by Yissum to the Company will revert
in full to Yissum.
<PAGE>
LIFE MEDICAL SCIENCES, INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
The October 1996 amendment provides a research term of five years from the
date of the amendment and required Yissum personnel to enter into
confidentiality and non-competition agreements with the Company.
[2] Dimotech agreement:
During July 1995, the Company entered into an agreement with Dimotech,
pursuant to which the Company financed and Dimotech conducted research and
development with regard to the scar management program. In connection with the
agreement, Dimotech has assigned to the Company its worldwide rights to the
patents and know-how to develop, manufacture and market products relating to
this technology.
Pursuant to the agreement, the Company is obligated to pay a royalty of five
percent of all net sales of the Company's products derived under this agreement
including CLINICEL. The agreement continues until the earlier of the last date
upon which the patents expire, or at the end of fifteen years from the date of
the first commercial sale pursuant to the assignment. Dimotech has the right in
its sole discretion to terminate the agreement under certain circumstances. Upon
termination of the agreement for any reason, the patents, license and know-how
assigned by Dimotech to the Company will revert in full to Dimotech.
[3] Technion agreements:
During June 1991, the Company entered into an agreement with Technion Research
and Development Foundation, Ltd., in Haifa, Israel (the "Technion"), which was
assigned to its wholly-owned subsidiary Dimotech, Ltd. ("Dimotech") and was
amended in February 1994 and February 1996, pursuant to which the Company
financed, and Dimotech conducted, research and development with regard to the
Company's in-situ tissue culturing technology. In connection with the agreement,
the Technion assigned to the Company its worldwide rights to patent
applications, any patents which may be issued and know-how to develop,
manufacture and market products relating to this technology. This agreement was
terminated by the Company in September 1998.
At December 31, 1998 Dimotech holds an option to purchase 100,000 shares of
common stock at an exercise price of $9.12. This option agreement expires at
certain dates through December 2000.
(NOTE H)-- Commitments and Other Matters:
[1] Leases:
The Company entered into an operating lease for its corporate offices in
November 1996 for approximately 3,550 square feet at an annual fixed rent of
$80,000. The initial term of this lease is for five years and includes one
five-year renewal option.
The lease provides for future aggregate minimum annual rentals, as of December
31, 1998, as follows (in thousands):
1999.................. $80
2000.................. $80
2001.................. $67
<PAGE>
LIFE MEDICAL SCIENCES, INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
The terms of the lease includes escalation for increases in real estate taxes
and certain operating expenses.
Rent expense was $56,000, $84,000 and $84,000 for the years ended December 31,
1996, 1997 and 1998, respectively.
[2] Employment agreements:
The Company has employment agreements with four executives which expire at
various dates from 1999 through 2001. Pursuant to such agreements, the Company's
commitments regarding termination benefits aggregates $280,863 at December 31,
1998.
[3] Customer Concentration:
As the Company's CLINICEL business increased during 1998, wholesalers,
distributors, drug retail outlets and chains and mass merchandise chain
pharmacies were added to the customer base. The Company's largest customer
(Eckerd) accounted for approximately 22% of sales in 1998. Given the continued
market consolidation among these entities, loss of these customers could have a
material adverse affect on the company.
<PAGE>
LIFE MEDICAL SCIENCES, INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
[4] Other:
In connection with an agreement with the Technion and Dimotech, which was
assigned to MedChem in July 1994, the Company must invest $50,000 per year, for
the five-year period ending December 31, 1999, in research and development
programs in Israel if MedChem does not make such investments. The agreement also
provides for a two percent royalty on sales of the Sure-Closure System to be
paid to the Chief Scientist in Israel. In the event that MedChem does not pay
these royalties the Company may be obligated to make such payments. In addition,
the agreement contains certain commitments to favorably consider manufacture of
future products in Israel, which if not met could result in the loss of
technology and future royalty income.
(NOTE I)-- Sure-Closure System Sale:
In July 1994, the Company sold or assigned to MedChem substantially all of its
assets related to the Sure-Closure System, including rights, agreements and
licenses. The terms of the asset purchase agreement provide that the Company is
entitled to royalties of 10% of the net sales (as defined in the agreement),
through June 30, 2004, of the Sure-Closure System and any line extensions or
future embodiments. In connection with this transaction, $644,000 was recorded
as deferred royalty income and through December 31,1998 has been reduced by
$258,000 of royalties earned after October 1, 1995.
A number of the Company's agreements with the Technion and Dimotech, related
to the Sure-Closure System, were assigned to MedChem in connection with the
sale.
(NOTE J)-- Related Party:
The Company incurred expenses of approximately $402,000, $189,000 and $103,000
in the years ended December 31, 1996, 1997 and 1998, respectively, for legal
services rendered by a firm, one of the partners at which is a director and a
principal stockholder of the Company.
(NOTE K)-- 401(k) Plan:
Effective October 1992, the Company adopted a 401(k) pension plan available to
all full time eligible employees. The Company at its discretion may make
contributions to the plan. However, no such contributions have been made through
December 31, 1998.
<PAGE>
Exhibit 10.48
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED 1992 STOCK OPTION PLAN
(incentive stock option)
AGREEMENT entered into as of the date set forth on the signature page
hereto by and between Life Medical Sciences, Inc., a Delaware corporation, with
a principal place of business at 379 Thornall Street, Edison, New Jersey
(together with its subsidiaries, if any, the "Company"), and the undersigned
(the "Optionee").
WHEREAS, the Company desires to grant to the Optionee an incentive stock
option under the Company's Amended and Restated 1992 Stock Option Plan (the
"Plan") to acquire shares of the Company's Common Stock, $.001 par value (the
"Shares"); and
WHEREAS, the Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option.
---------------
The Company hereby grants to the Optionee an incentive stock option under
the Plan (the "Option") to purchase all or any part of an aggregate of the
number of Shares set forth on the signature page to this Agreement on the terms
and conditions hereinafter set forth. The Option shall be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
--------------
The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the dollar amount per share set forth on the signature page to this
Agreement.
3. Time of Vesting and Exercise of Option.
--------------------------------------
Subject to Section 4 hereof, the Option shall vest and become exercisable
on the dates and as to the installment amounts set forth on the signature page
to this Agreement. To the extent the Option (or any portion thereof) is not
exercised by the Optionee when it becomes exercisable, it shall not expire, but
shall be carried forward and shall be exercisable, on a cumulative basis, until
the Expiration Date (as hereinafter defined) or until earlier termination as
hereinafter provided.
<PAGE>
4. Term; Extent of Exercisability.
------------------------------
(a) Term.
(i) The Option shall expire as to each installment amount on the
date set forth next to each such amount on the signature page to
this Agreement (the "Expiration Date"), subject to earlier
termination as herein provided.
(ii) Except as otherwise provided in this Section 4, if the
Optionee ceases to perform services for the Company, the Option
shall terminate on the earlier of the last day of the third month
or ninety days after the date such Optionee ceases to perform
services for the Company, or on the date on which the Option
expires by its terms, whichever occurs first.
(iii) If the Optionee ceases to perform services for the Company
because of dismissal for cause or because the Optionee is in breach
of any employment agreement, such Option will terminate on the date
the Optionee ceases to perform services for the Company.
(iv) If the Optionee ceases to perform services for the Company
because the Optionee has become permanently disabled (within the
meaning of Section 22(e)(3) of the Code), such Option shall
terminate on the last day of the twelfth month from the date such
Optionee ceases to perform services for the Company, or on the date
on which the Option expires by its terms, whichever occurs first.
(v) In the event of the death of the Optionee, the Option granted
to such Optionee shall terminate on the last day of the twelfth
month from the date of death, or on the date on which the Option
expires by its terms, whichever occurs first.
(b) Extent of Exercisability.
------------------------
(i) Except as provided below, if the Optionee ceases to perform
services for the Company, the Option shall be exercisable only to
the extent that the right to purchase Shares under such Option has
accrued and is in effect on the date such Optionee ceases to
perform services for the Company.
(ii) If the Optionee ceases to perform services for the Company
because he or she has become permanently disabled (within the
meaning of Section 22(e)(3) of the Code), the Option shall be
exercisable to the full number of Shares covered by such Option.
-2-
<PAGE>
(iii) In the event of the death of the Optionee, the Option may
be exercised with respect to the full number of Shares covered
thereby whether or not under the provisions of Section 3 hereof the
Optionee was entitled to do so at the date of his or her death, by
the estate of such Optionee, or by any person or persons who
acquired the right to exercise such Option by bequest or
inheritance or by reason of the death of such Optionee.
5. Manner of Exercise of Option.
----------------------------
(a) To the extent that the right to exercise the Option has accrued
and is in effect, the Option may be exercised in full or in part by
giving written notice to the Company stating the number of Shares as
to which the Option is being exercised and accompanied by payment in
full for such Shares. No partial exercise may be made for less than
one hundred (100) full Shares of Common Stock. Payment shall be made
in accordance with the terms of the Plan. Upon such exercise, delivery
of a certificate for paid-up, non-assessable Shares shall be made at
the principal office of the Company to the person exercising the
Option, not less than thirty (30) and not more than ninety (90) days
from the date of receipt of the notice by the Company.
(b) The Company shall at all times during the term of the Option
reserve and keep available such number of Shares of its Common Stock
as will be sufficient to satisfy the requirements of the Option.
6. Non-Transferability.
-------------------
The right of the Optionee to exercise the Option shall not be assignable or
transferable by the Optionee otherwise than by will or the laws or descent and
distribution or pursuant to a domestic relations order as defined in the Code or
Title 1 of the Employee Retirement Income Security Act or the rules thereunder,
and the Option may be exercised during the lifetime of the Optionee only by him
or her. The Option shall be null and void and without effect upon the bankruptcy
of the Optionee or upon any attempted assignment or transfer, except as herein
provided, including without limitation any purported assignment, whether
voluntary or by operation of law, pledge, hypothecation or other disposition
contrary to the provisions hereof, or levy of execution, attachment, trustee
process or similar process, whether legal or equitable, upon the Option.
7. Representation Letter and Investment Legend.
-------------------------------------------
In the event that for any reason the Shares to be issued upon exercise of
the Option shall not be effectively registered under the Securities Act of 1933
(" 1933 Act"), upon any date on which the Option is exercised in whole or in
part, the person exercising the Option shall give a written representation to
the Company in the form attached hereto as Exhibit 1 and
-3-
<PAGE>
the Company shall place an "investment legend", so-called, as described in
Exhibit 1, upon any certificate for the Shares issued by reason of such
exercise.
8. Adjustments on Changes in Capitalization.
----------------------------------------
Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Option.
9. No Special Employment Rights.
----------------------------
Nothing contained in the Plan or this Option shall be construed or deemed
by any person under any circumstances to bind the Company to continue the
employment of the Optionee for the period within which this Option may be
exercised. However, during the period of the Optionee's employment, the Optionee
shall render diligently and faithfully the services which are assigned to the
Optionee from time to time by the Board of Directors or by the executive
officers of the Company and shall at no time take any action which directly or
indirectly would be inconsistent with the best interests of the Company.
10. Rights as a Stockholder.
-----------------------
The Optionee shall have no rights as a stockholder with respect to any
Shares which may be purchased by exercise of this Option unless and until a
certificate or certificates representing such Shares are duly issued and
delivered to the Optionee. Except as otherwise expressly provided in the Plan,
no adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.
11. Withholding Taxes.
-----------------
Whenever Shares are to be issued upon exercise of this Option, the Company
shall have the right to require the Optionee to remit to the Company an amount
sufficient to satisfy all Federal, state and local withholding tax requirements
prior to the delivery of any certificate or certificates for the Shares. The
Company may agree to permit the Optionee to authorize the Company to withhold
Shares of Common Stock purchased upon exercise of the Option to satisfy the
above-mentioned withholding requirement; provided, however, no such agreement
may be made by an Optionee who is an officer or director within the meaning of
Section 16 of the Securities Exchange Act of 1934, as amended, except pursuant
to a standing election to so withhold Shares of Common Stock purchased upon
exercise of the Option, such election to be made in the form set forth in
Exhibit 2 hereto and to be made not less than six (6) months prior to such
exercise. Such election may be revoked only upon providing six (6) months prior
written notice to the Company.
12. Plan Provisions Control.
-----------------------
In the event of any inconsistency between the provisions of this Agreement
and
-4-
<PAGE>
the provisions of the Plan, the inconsistent provision(s) of this Agreement
shall be superseded by the Plan provision(s) to the extent necessary to
reconcile the inconsistency.
-5-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed,
and the Optionee has hereunto set his or her hand, all as of the 28th day of
May, 1998.
LIFE MEDICAL SCIENCES, INC.
By: Herbert Moskowitz
--------------------------------------
OPTIONEE
Print Name: Robert P. Hickey
-------------------------------
Sign Name: /s/ Robert P. Hickey
-------------------------------
OPTION INFORMATION
------------------
Total Number of Shares Underlying Option: 134,687
Purchase Price Per Share: $4.00
VESTING & EXPIRATION SCHEDULE
-----------------------------
Vesting Date Number of Shares Expiration Date
------------ ---------------- ---------------
May 29, 1996 26,937 May 29, 2001
May 29, 1997 26,937 May 29, 2002
May 29, 1998 26,937 May 29, 2003
May 29, 1999 26,937 May 29, 2004
May 29, 2000 26,937 May 29, 2005
This agreement supercedes the previous agreement dated May 29, 1996.
-6-
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
In connection with the exercise by me of an option to purchase shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company"), I
hereby acknowledge that I have been informed as follows:
1. The shares of Common Stock of the Company to be issued to me pursuant
to the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held indefinitely unless the Shares are subsequently registered under the
Securities Act, or an exemption from such registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
Securities Act can be made only after the holding period provided by that Rule
has been satisfied, and, in any sale to which that Rule is not applicable,
registration or compliance with some other exemption under the Securities Act
will be required.
3. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.
In consideration of the issuance of certificates for the Shares to me, I
hereby represent and warrant that I am acquiring the Shares for my own account
for investment, and that I will not sell, pledge or transfer the Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and warranty,
I agree that there may be affixed to the certificates for the Shares to be
issued to me, and to all certificates issued hereafter representing the Shares
(until in the opinion of counsel, which opinion must be reasonably satisfactory
in form and substance to counsel for the Company, it is no longer necessary or
required) a legend as follows:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and were acquired by the
registered holder pursuant to a representation and warranty that such holder was
acquiring the Shares for his own account and for investment, with no intention
of transfer or disposition of the same in violation of the registration
requirements of that Act. These securities may not be sold, pledged, or
transferred in the absence of an effective registration statement under such
Act, or an opinion of counsel, which opinion is reasonably satisfactory to
counsel to the Company, to the effect that registration is not required under
such Act."
-7-
<PAGE>
I further agree that the Company may place a stop transfer order with its
transfer agent, prohibiting the transfer of the Shares, so long as the legend
remains on the certificates representing the Shares.
Very truly yours,
/s/ Robert P. Hickey
Dated: 6/30/98
-------
-8-
<PAGE>
EXHIBIT 2
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
The undersigned Optionee hereby elects and agrees that, whenever the
undersigned exercises a stock option (including any options which now or may
hereafter be granted), Life Medical Sciences, Inc. (the "Company") shall
withhold from that exercise such number of Shares equal in value to the federal
and state withholding taxes due upon such exercise. The undersigned further
acknowledges and agrees that this election may not be revoked without six (6)
months' prior written notice to the Company.
OPTIONEE:
--------------------------------------------
(Signature)
--------------------------------------------
(Print Name)
-9-
<PAGE>
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED 1992 STOCK OPTION PLAN
(incentive stock option)
AGREEMENT entered into as of the date set forth on the signature page
hereto by and between Life Medical Sciences, Inc., a Delaware corporation, with
a principal place of business at 379 Thornall Street, Edison, New Jersey
(together with its subsidiaries, if any, the "Company"), and the undersigned
(the "Optionee").
WHEREAS, the Company desires to grant to the Optionee an incentive stock
option under the Company's Amended and Restated 1992 Stock Option Plan (the
"Plan") to acquire shares of the Company's Common Stock, $.001 par value (the
"Shares"); and
WHEREAS, the Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option.
---------------
The Company hereby grants to the Optionee an incentive stock option under
the Plan (the "Option") to purchase all or any part of an aggregate of the
number of Shares set forth on the signature page to this Agreement on the terms
and conditions hereinafter set forth. The Option shall be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
--------------
The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the dollar amount per share set forth on the signature page to this
Agreement.
3. Time of Vesting and Exercise of Option.
--------------------------------------
Subject to Section 4 hereof, the Option shall vest and become
exercisable on the dates and as to the installment amounts set forth on the
signature page to this Agreement. To the extent the Option (or any portion
thereof) is not exercised by the Optionee when it becomes exercisable, it shall
not expire, but shall be carried forward and shall be exercisable, on a
cumulative basis, until the Expiration Date (as hereinafter defined) or until
earlier termination as hereinafter provided.
<PAGE>
4. Term; Extent of Exercisability.
------------------------------
(a) Term.
(i) The Option shall expire as to each installment amount on the
date set forth next to each such amount on the signature page to
this Agreement (the "Expiration Date"), subject to earlier
termination as herein provided.
(ii) Except as otherwise provided in this Section 4, if the
Optionee ceases to perform services for the Company, the Option
shall terminate on the earlier of the last day of the third month
or ninety days after the date such Optionee ceases to perform
services for the Company, or on the date on which the Option
expires by its terms, whichever occurs first.
(iii) If the Optionee ceases to perform services for the Company
because of dismissal for cause or because the Optionee is in
breach of any employment agreement, such Option will terminate on
the date the Optionee ceases to perform services for the Company.
(iv) If the Optionee ceases to perform services for the Company
because the Optionee has become permanently disabled (within the
meaning of Section 22(e)(3) of the Code), such Option shall
terminate on the last day of the twelfth month from the date such
Optionee ceases to perform services for the Company, or on the
date on which the Option expires by its terms, whichever occurs
first.
(v) In the event of the death of the Optionee, the Option
granted to such Optionee shall terminate on the last day of the
twelfth month from the date of death, or on the date on which the
Option expires by its terms, whichever occurs first.
(b) Extent of Exercisability.
------------------------
(i) Except as provided below, if the Optionee ceases to perform
services for the Company, the Option shall be exercisable only to
the extent that the right to purchase Shares under such Option
has accrued and is in effect on the date such Optionee ceases to
perform services for the Company.
(ii) If the Optionee ceases to perform services for the Company
because he or she has become permanently disabled (within the
meaning of Section 22(e)(3) of the Code), the Option shall be
exercisable to the full number of Shares covered by such Option.
-2-
<PAGE>
(iii) In the event of the death of the Optionee, the Option may
be exercised with respect to the full number of Shares covered
thereby whether or not under the provisions of Section 3 hereof
the Optionee was entitled to do so at the date of his or her
death, by the estate of such Optionee, or by any person or
persons who acquired the right to exercise such Option by bequest
or inheritance or by reason of the death of such Optionee.
5. Manner of Exercise of Option.
----------------------------
(a) To the extent that the right to exercise the Option has accrued
and is in effect, the Option may be exercised in full or in part by
giving written notice to the Company stating the number of Shares as
to which the Option is being exercised and accompanied by payment in
full for such Shares. No partial exercise may be made for less than
one hundred (100) full Shares of Common Stock. Payment shall be made
in accordance with the terms of the Plan. Upon such exercise,
delivery of a certificate for paid-up, non-assessable Shares shall be
made at the principal office of the Company to the person exercising
the Option, not less than (30) and not more than ninety (90) days from
the date of receipt of the notice by the Company.
(b) The Company shall at all times during the term of the Option
reserve and keep available such number of Shares of its Common Stock
as will be sufficient to satisfy the requirements of the Option.
6. Non-Transferability.
-------------------
The right of the Optionee to exercise the Option shall not be
assignable or transferable by the Optionee otherwise than by will or the laws or
descent and distribution or pursuant to a domestic relations order as defined in
the Code or Title 1 of the Employee Retirement Income Security Act or the rules
thereunder, and the Option may be exercised during the lifetime of the Optionee
only by him or her. The Option shall be null and void and without effect upon
the bankruptcy of the Optionee or upon any attempted assignment or transfer,
except as herein provided, including without limitation any purported
assignment, whether voluntary or by operation of law, pledge, hypothecation or
other disposition contrary to the provisions hereof, or levy of execution,
attachment, trustee process or similar process, whether legal or equitable, upon
the Option.
7. Representation Letter and Investment Legend.
-------------------------------------------
In the event that for any reason the Shares to be issued upon
exercise of the Option shall not be effectively registered under the Securities
Act of 1933 ("1933 Act"), upon any date on which the Option is exercised in
whole or in part, the person exercising the Option shall give a written
representation to the Company in the form attached hereto as Exhibit 1 and
-3-
<PAGE>
the Company shall place an "investment legend", so-called, as described in
Exhibit 1, upon any certificate for the Shares issued by reason of such
exercise.
8. Adjustments on Changes in Capitalization.
----------------------------------------
Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Option.
9. No Special Employment Rights.
----------------------------
Nothing contained in the Plan or this Option shall be construed or
deemed by any person under any circumstances to bind the Company to continue the
employment of the Optionee for the period within which this Option may be
exercised. However, during the period of the Optionee's employment, the Optionee
shall render diligently and faithfully the services which are assigned to the
Optionee from time to time by the Board of Directors or by the executive
officers of the Company and shall at no time take any action which directly or
indirectly would be inconsistent with the best interests of the Company.
10. Rights as a Stockholder.
-----------------------
The Optionee shall have no rights as a stockholder with respect to any
Shares which may be purchased by exercise of this Option unless and until a
certificate or certificates representing such Shares are duly issued and
delivered to the Optionee. Except as otherwise expressly provided in the Plan,
no adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.
11. Withholding Taxes.
-----------------
Whenever Shares are to be issued upon exercise of this Option, the
Company shall have the right to require the Optionee to remit to the Company an
amount sufficient to satisfy all Federal, state and local withholding tax
requirements prior to the delivery of any certificate or certificates for the
Shares. The Company may agree to permit the Optionee to authorize the Company to
withhold Shares of Common Stock purchased upon exercise of the Option to
satisfy the above-mentioned withholding requirement; provided, however, no such
agreement may be made by an Optionee who is an officer or director within the
meaning of Section 16 of the Securities Exchange Act of 1934, as amended, except
pursuant to a standing election to so withhold Shares of Common Stock purchased
upon exercise of the Option, such election to be made in the form set forth in
Exhibit 2 hereto and to be made not less than six (6) months prior to such
exercise. Such election may be revoked only upon providing six (6) months prior
written notice to the Company.
12. Plan Provisions Control.
-----------------------
In the event of any inconsistency between the provisions of this Agreement
and
-4-
<PAGE>
the provisions of the Plan, the inconsistent provision(s) of this Agreement
shall be superseded by the Plan provision(s) to the extent necessary to
reconcile the inconsistency.
-5-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed, and the Optionee has hereunto set his or her hand, all as of the 28th
day of May, 1998.
LIFE MEDICAL SCIENCES, INC.
By: /s/ Herbert Moskowitz
-----------------------------
OPTIONEE:
Print Name: Robert P. Hickey
--------------------
Signature: /s/ Robert P. Hickey
--------------------
OPTION INFORMATION
------------------
Total Number of Shares Underlying Option: 115,313
Purchase Price Per Share: $2.00
VESTING & EXPIRATION SCHEDULE
-----------------------------
Vesting Date Number of Shares Expiration Date
------------ ---------------- ---------------
May 29, 1996 23,062 May 29, 2001
May 29, 1997 23,062 May 29, 2002
May 29, 1998 23,063 May 29, 2003
May 29, 1999 23,063 May 29, 2004
May 29, 2000 23,063 May 29, 2005
This agreement supercedes the previous agreement dated May 29, 1996.
-6-
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
In connection with the exercise by me of an option to purchase shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company"), I
hereby acknowledge that I have been informed as follows:
1. The shares of Common Stock of the Company to be issued to me pursuant
to the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held indefinitely unless the Shares are subsequently registered under the
Securities Act, or an exemption from such registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
Securities Act can be made only after the holding period provided by that Rule
has been satisfied, and, in any sale to which that Rule is not applicable,
registration or compliance with some other exemption under the Securities Act
will be required.
3. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.
In consideration of the issuance of certificates for the Shares to me, I
hereby represent and warrant that I am acquiring the Shares for my own account
for investment, and that I will not sell, pledge or transfer the Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and
warranty, I agree that there may be affixed to the certificates for the Shares
to be issued to me, and to all certificates issued hereafter representing the
Shares (until in the opinion of counsel, which opinion must be reasonably
satisfactory in form and substance to counsel for the Company, it is no longer
necessary or required) a legend as follows:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and were acquired by the
registered holder pursuant to a representation and warranty that such holder was
acquiring the Shares for his own account and for investment, with no intention
of transfer or disposition of the same in violation of the registration
requirements of that Act. These securities may not be sold, pledged, or
transferred in the absence of an effective registration statement under such
Act, or an opinion of counsel, which opinion is reasonably satisfactory to
counsel to the Company, to the effect that registration is not required under
such Act.
-7-
<PAGE>
I further agree that the Company may place a stop transfer order with its
transfer agent, prohibiting the transfer of the Shares, so long as the legend
remains on the certificates representing the Shares.
Very truly yours,
/s/ Robert P. Hickey
Dated: 7/10/98
---------
-8-
<PAGE>
EXHIBIT 10.50
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED 1992 STOCK OPTION PLAN
(non-qualified stock option)
AGREEMENT entered into as of the date set forth on the signature page hereto
by and between Life Medical Sciences, Inc., a Delaware corporation, with a
principal place of business at 379 Thornall Street, Edison, New Jersey (together
with its subsidiaries, if any, the "Company"), and the undersigned (the
"Optionee").
WHEREAS, the Company desires to grant to the Optionee a non-qualified stock
option under the Company's Amended and Restated 1992 Stock Option Plan (the
"Plan") to acquire shares of the Company's Common Stock, $.001 par value (the
"Shares"); and
WHEREAS, the Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option.
---------------
The Company hereby grants to the Optionee a non-qualified stock option under
the Plan (the "Option") to purchase all or any part of an aggregate of the
number of Shares set forth on the signature page to this Agreement on the terms
and conditions hereinafter set forth. The Option shall NOT be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
--------------
The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the dollar amount per share set forth on the signature page to this
Agreement.
3. Time of Vesting and Exercise of Option.
--------------------------------------
Subject to Section 4 hereof, the Option shall vest and become exercisable
on the dates and as to the installment amounts set forth on the signature page
to this Agreement. To the extent the Option (or any portion thereof) is not
exercised by the Optionee when it becomes exercisable, it shall not expire, but
shall be carried forward and shall be exercisable, on a cumulative basis, until
the Expiration Date (as hereinafter defined) or until earlier termination as
hereinafter provided.
-1-
<PAGE>
4. Term; Extent of Exercisability.
------------------------------
(a) Term.
(i) The Option shall expire as to each installment amount on the
date set forth next to each such amount on the signature page to this
Agreement (the "Expiration Date"), subject to earlier termination as
herein provided.
(ii) Except as otherwise provided in this Section 4, if the
Optionee ceases to perform services for the Company, the Option shall
terminate on the earlier of the last day of the third month or ninety
days after the date such Optionee ceases to perform services for the
Company, or on the date on which the Option expires by its terms,
whichever occurs first.
(iii) If such termination to perform services is because of
dismissal for cause or because the Optionee is in breach of any
employment agreement, such Option will terminate on the date the
Optionee ceases to perform services for the Company.
(iv) If such termination to perform services is because the
Optionee has become permanently disabled (within the meaning of
Section 22(e)(3) of the Code), such Option shall terminate on the last
day of the twelfth month from the date such Optionee ceases to perform
services for the Company, or on the date on which the Option expires
by its terms, whichever occurs first.
(v) In the event of the death of the Optionee, the Option granted
to such Optionee shall terminate on the last day of the twelfth month
from the date of death, or on the date on which the Option expires by
its terms, whichever occurs first.
(b) Extent of Exercisability.
------------------------
(i) Except as provided below, if the Optionee ceases to perform
services for the Company, the Option shall be exercisable only to the
extent that the right to purchase Shares under such Option has accrued
and is in effect on the date such Optionee ceases to perform services
for the Company.
(ii) If the Optionee ceases to perform services for the Company
because he or she has become permanently disabled (within the meaning
of Section 22(e)(3) of the Code), the Option shall be exercisable to
the full number of Shares covered by such Option.
-2-
<PAGE>
(iii) In the event of the death of the Optionee, the Option may be
exercised with respect to the full number of Shares covered thereby
whether or not under the provisions of Section 3 hereof the Optionee
was entitled to do so at the date of his or her death, by the estate
of such Optionee, or by any person or persons who acquired the right
to exercise such Option by bequest or inheritance or by reason of the
death of such Optionee.
5. Manner of Exercise of Option.
----------------------------
(a) To the extent that the right to exercise the Option has accrued and is
in effect, the Option may be exercised in full or in part by giving written
notice to the Company stating the number of Shares as to which the Option
is being exercised and accompanied by payment in full for such Shares. No
partial exercise may be made for less than one hundred (100) full Shares of
Common Stock. Payment shall be made in accordance with the terms of the
Plan. Upon such exercise, delivery of a certificate for paid-up, non-
assessable Shares shall be made at the principal office of the Company to
the person exercising the Option, not less than thirty (30) and not more
than ninety (90) days from the date of receipt of the notice by the
Company.
(b) The Company shall at all times during the term of the Option reserve
and keep available such number of Shares of its Common Stock as will be
sufficient to satisfy the requirements of the Option.
6. Non-Transferability.
-------------------
The right of the Optionee to exercise the Option shall not be assignable
or transferable by the Optionee otherwise than by will or the laws or descent
and distribution or pursuant to a domestic relations order as defined in the
Code or Title 1 of the Employee Retirement Income Security Act or the rules
thereunder, and the Option may be exercised during the lifetime of the Optionee
only by him or her. The Option shall be null and void and without effect upon
the bankruptcy of the Optionee or upon any attempted assignment or transfer,
except as herein provided, including without limitation any purported
assignment, whether voluntary or by operation of law, pledge, hypothecation or
other disposition contrary to the provisions hereof, or levy of execution,
attachment, trustee process or similar process, whether legal or equitable, upon
the Option.
7. Representation Letter and Investment Legend.
-------------------------------------------
In the event that for any reason the Shares to be issued upon exercise of
the Option shall not be effectively registered under the Securities Act of 1933
(" 1933 Act"), upon any date on which the Option is exercised in whole or in
part, the person exercising the Option shall give a written representation to
the Company in the form attached hereto as Exhibit 1 and the Company shall place
an "investment legend", so-called, as described in Exhibit 1, upon any
certificate for the Shares issued by reason of such exercise.
-3-
<PAGE>
8. Adjustments on Changes in Capitalization.
----------------------------------------
Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Option.
9. No Special Employment Rights.
----------------------------
The provisions of this Section 9 are applicable only to Optionee's who are
employees of the Company. Nothing contained in the Plan or this Option shall be
construed or deemed by any person under any circumstances to bind the Company to
continue the employment of the Optionee for the period within which this Option
may be exercised. However, during the period of the Optionee's employment, the
Optionee shall render diligently and faithfully the services which are assigned
to the Optionee from time to time by the Board of Directors or by the executive
officers of the Company and shall at no time take any action which directly or
indirectly would be inconsistent with the best interests of the Company.
10. Rights as a Stockholder.
-----------------------
The Optionee shall have no rights as a stockholder with respect to any
Shares which may be purchased by exercise of this Option unless and until a
certificate or certificates representing such Shares are duly issued and
delivered to the Optionee. Except as otherwise expressly provided in the Plan,
no adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.
11. Withholding Taxes.
-----------------
Whenever Shares are to be issued upon exercise of this Option, the
Company shall have the right to require the Optionee to remit to the Company an
amount sufficient to satisfy all Federal, state and local withholding tax
requirements prior to the delivery of any certificate or certificates for the
Shares. The Company may agree to permit the Optionee to authorize the Company to
withhold Shares of Common Stock purchased upon exercise of the Option to satisfy
the above-mentioned withholding requirement; provided, however, no such
agreement may be made by an Optionee who is an officer or director within the
meaning of Section 16 of the Securities Exchange Act of 1934, as amended, except
pursuant to a standing election to so withhold Shares of Common Stock purchased
upon exercise of the Option, such election to be made in the form set forth in
Exhibit 2 hereto and to be made not less than six (6) months prior to such
exercise. Such election may be revoked only upon providing six (6) months prior
written notice to the Company.
12. Plan Provisions Control.
-----------------------
In the event of any inconsistency between the provisions of this
Agreement and the provisions of the Plan, the inconsistent provision(s) of this
Agreement shall be superseded by the Plan provision(s) to the extent necessary
to reconcile the inconsistency.
-4-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed, and
the Optionee has hereunto set his or her hand, all as of the 28th day of May,
1998.
LIFE MEDICAL SCIENCES, INC.
By:
-----------------------------------------
OPTIONEE :
Print Name: Eli Pines, Ph.D.
--------------------------------
Sign Name:/s/ Eli Pines
----------------------------------
OPTION INFORMATION
------------------
Total Number of Shares Underlying Option: 3,875
Purchase Price Per Share: $ 7.00
VESTING & EXPIRATION SCHEDULE
-----------------------------
Vesting Date Number of Shares Expiration Date
- --------------- ---------------- ---------------
June 17, 1997 1,937 June 17, 2002
June 17, 1998 1,938 June 17, 2003
This agreement supercedes the previous agreement dated June 17, 1997.
-5-
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
In connection with the exercise by me of an option to purchase shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company"), I
hereby acknowledge that I have been informed as follows:
1. The shares of Common Stock of the Company to be issued to me pursuant to
the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held indefinitely unless the Shares are subsequently registered under the
Securities Act, or an exemption from such registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
Securities Act can be made only after the holding period provided by that Rule
has been satisfied, and, in any sale to which that Rule is not applicable,
registration or compliance with some other exemption under the Securities Act
will be required.
3. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.
In consideration of the issuance of certificates for the Shares to me, I
hereby represent and warrant that I am acquiring the Shares for my own account
for investment, and that I will not sell, pledge or transfer the Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and warranty,
I agree that there may be affixed to the certificates for the Shares to be
issued to me, and to all certificates issued hereafter representing the Shares
(until in the opinion of counsel, which opinion must be reasonably satisfactory
in form and substance to counsel for the Company, it is no longer necessary or
required) a legend as follows:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and were acquired
by the registered holder pursuant to a representation and warranty that
such holder was acquiring the Shares for his own account and for
investment, with no intention of transfer or disposition of the same in
violation of the registration requirements of that Act. These securities
may not be sold, pledged, or transferred in the absence of an effective
registration statement under such Act, or an opinion of counsel, which
opinion is reasonably satisfactory to counsel to the Company, to the effect
that registration is not required under such Act."
-6-
<PAGE>
I further agree that the Company may place a stop transfer order with its
transfer agent, prohibiting the transfer of the Shares, so long as the legend
remains on the certificates representing the Shares.
Very truly yours,
/s/ Eli Pine
Dated: 7/30/98
--------
-7-
<PAGE>
EXHIBIT 2
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
The undersigned Optionee hereby elects and agrees that, whenever the
undersigned exercises a stock option (including any options which now or may
hereafter be granted), Life Medical Sciences, Inc. (the "Company") shall
withhold from that exercise such number of Shares equal in value to the federal
and state withholding taxes due upon such exercise. The undersigned further
acknowledges and agrees that this election may not be revoked without six (6)
months' prior written notice to the Company.
OPTIONEE:
-----------------------------------------------
(Signature)
-----------------------------------------------
(Print Name)
-8-
<PAGE>
Exhibit 10.51
LETTER OF AGREEMENT
4/22/98
1. CP&S will provide the following services under the Food and Drug
Administration QSR guidelines:
Raw material purchasing, receipt and approval based on Life Medical
Sciences specifications (to be provided), product assembly and release per
Life Medical Sciences specifications (to be provided), maintaining
manufacturing and quality records and documentation, inventory management
and pick and ship distribution.
2. Product Pricing per product quotation. Prices are FOB CP&S. Pricing will be
re-negotiated annually to respond to changes in labor and overhead costs.
Changes in specifications and/or requirements could result in an immediate
price increase.
3. The initial term of this AGREEMENT is one year. The AGREEMENT is
"evergreen", which means it will automatically be renewed annually unless
terminated by either party with a four months advance notice.
4. CP&S will invoice Life Medical Sciences for assembly cost (raw materials,
labor, sales unit packaging and administrative cost reimbursement per item
#12) upon product assembly. CP&S will invoice Life Medical Sciences for
pick-n-ship cost (accessories [e.g. box of net or roll of tape], labor,
shipping materials and outbound shipping costs) upon pick-n-ship. The
Clinicel cushions will be purchased by Life Medical Sciences and not
included in the assembly cost Life Medical Sciences must pay CP&S net 30
days or sooner if suppliers selected by Life Medical Sciences require less
than 45 day terms. Invoices for freight must be paid in 10 days.
5. Raw material costs and subsequent supplier cost increases are a straight
pass through to Life Medical Sciences.
6. Life Medical Sciences will provide CP&S with a firm 1 month forecast and 4
month rolling forecast for each product SKU on a monthly basis.
7. Life Medical Sciences and CP&S will negotiate in good faith costs associated
with new products not detailed here.
8. Life Medical Sciences is responsible for all capital purchases or
significant purchases (over $100) including testing equipment and retains
ownership for equipment provided. Machine preventive maintenance, where
applicable, is the responsibility of CP&S. Major machine repair/parts (over
$200) is the responsibility of Life Medical Sciences.
9. If business were to grow significantly beyond forecast requiring CP&S to
work extended overtime periods. Life Medical Sciences is responsible to pay
the increased overtime rate or the increased cost associated with temporary
labor, if required. Limited overtime (1-2 days) and resource allocation to
cover special requests or unusual short term spikes in demand, will be
covered by CP&S.
10. CP&S is not responsible for any components or raw materials which are
not connected with a CP&S purchase order (i.e., if component or raw material
suppliers maintain inventory). Life Medical Sciences will fund the initial
raw material inventory purchases made by CP&S, the total value of these
purchases represent a working capital load to CP&S. This loan amount may
need to be adjusted upward to cover significant spike increases in order
volume. This "loan" will be repaid to Life Medical Sciences by CP&S at the
end of the agreement. Life Medical Sciences is financially responsible for
any raw materials CP&S maintains with suppliers at the minimum forecast
levels agreed to by both parties and reviewed quarterly.
11. Initial transfer of equipment (where applicable), and any component raw
material or finished goods inventories to CP&S is at Life Medical Sciences
expense.
12. Reimbursement for CP&S administrative costs will be through a 2.5% upcharge
on assembled component costs (raw material excluding Clinicel cushions and
direct labor) on product invoiced to Life Medical Sciences through 8/15/98.
For the remaining 8 months of the initial term and on future annual
revisions the recovery factor will be determined as follows: x% = O.H.
budget allocations / (F/C units X average assembled cost)
1.
<PAGE>
LETTER OF AGREEMENT
4/22/98
13. CP&S is a re-packager and will be held completely harmless for product
liability for any reason other than product damage which occurs in the
-------------------------
assembly, storage and/or packaging at CP&S, including if someone sues CP&S
due to lack of product performance. In the event that any product does not
conform as aforesaid, Life Medical Sciences sole remedy shall be the repair
or replacement (at CP&S' option) of such non-conforming product within a
reasonable period of time.
14. Life Medical Sciences will be financially responsible for the "out of
pocket" costs incurred by CP&S in preparation for this AGREEMENT if Life
Medical Sciences decides not to complete the transfer of
packaging/manufacture to CP&S. Up front costs are not to exceed $10,000.
CP&S will obtain Life Medical Sciences' prior written approval on any
expenditure in excess of $ 1,000.
15. Components and raw materials will be stored in CP&S' warehouse. Life
Medical Sciences agrees that no special storage conditions are necessary.
16. Manufacturing of Life Medical Sciences products will be conducted in CP&S'
current manufacturing facility environment. Life Medical Sciences agrees
that no special environmental conditions are necessary. Life Medical
Sciences agrees that no employee protective wear is necessary in the
manufacture of their product. Life Medical Sciences will supply CP&S with
the Clinicel Material Safety Data Sheet (MSDS) prior to manufacture.
17. Changes in component part suppliers would only be made with Life Medical
Sciences' prior written approval. However, if the change results in a per
unit cost reduction for comparable order quantities, then savings would be
shared evenly between CP&S and Life Medical Sciences, after qualification
costs incurred by CP&S are covered.
18. After May 15, 1998, the quantity of daily orders must exceed 50. Life
Medical Sciences will be charged a $2.00 fee per order for the difference
between actual daily orders shipped and 50 orders,
i.e. 50 - 20 (actual orders shipped) = 30 x $2.00 = $60.00
19. Assumptions listed in CP&S' 3/25/98 letter and Price Quote dated 3/27/98 to
Robert Hickey also apply to this Letter of Agreement.
20. Although the initial term of this AGREEMENT is one year, the parties agree
to reassess operational cost and facility related aspects on or about
8/15/98 or four (4) months after start of assembly. At that point, initial
EOQ standards will be established for each component.
ACCEPTED BY: ACCEPTED BY:
/s/ Robert P. Hickey /s/ Bradford Washburne
-------------------------------------- -------------------------
Robert P. Hickey Bradford Washburne
President and Chief Executive Officer President
LIFE MEDICAL SCIENCES CONSOLIDATED PRODUCTS &
SERVICES, INC.
4/27/98 4/24/98
---------------- ----------------------
Date Revision II Date Revision II
2.
<PAGE>
Exhibit 10.52
EMPLOYMENT AGREEMENT
THIS AGREEMENT made in Edison, New Jersey as of the 25th day of July 1998,
-----
between Life Medical Sciences, Inc., a Delaware corporation (the "Company") and
Drew Karazin the undersigned individual ("Executive").
In consideration of the mutual covenants and agreements hereinafter set forth,
the Company and Executive agree as follows:
1. Agreement Term.
--------------
The term of this Agreement shall be the three-year period commencing on July
----
20, 1998 (the "Employment Date") and ending on the third anniversary of the
- --
Employment Date (the "Agreement Term").
2. Employment.
----------
(a) Employment by the Company. Executive agrees to be employed by the
-------------------------
Company for the Agreement Term upon the terms and subject to the conditions set
forth in this Agreement. Executive shall have the title of Vice President and
Chief Financial Officer reporting to the President and CEO. Executive shall have
such duties as may be prescribed by the Company and shall serve in such other
and/or additional position(s) as the Company may determine from time to time.
Executive shall also serve as a Corporate Officer of the Company. The Company
will at all times treat the Executive with dignity, honesty and respect, and
will provide Executive with such resources as in the Company's judgement shall
enable the Executive to discharge his responsibilities.
(a) Performance of Duties. Throughout the Agreement Term, Executive
---------------------
shall faithfully and diligently perform Executive's duties in conformity with
the directions of the Company and serve the Company to the best of Executive's
ability. Executive shall devote Executive's entire working time, attention and
energies to the business and affairs of the Company, subject to vacations and
sick leave as provided herein and in accordance with Company policy.
(b) Place of Performance. During the Agreement Term, Executive shall,
--------------------
subject to travel requirements on behalf of the Company, be based at the
Company's offices in Edison, New Jersey or such other location(s) as the Company
may determine and, in this regard, Executive shall maintain Executive's personal
residence in such city or such other location within reasonable access to the
Company's headquarters.
1
<PAGE>
3. Compensation and Benefits.
-------------------------
(a) Base Salary. The Company agrees to pay to Executive for employment
-----------
hereunder a base salary ("Base Salary") at the annual rate of $145,000. The Base
-------
Salary shall be increased prospectively on each anniversary of the Employment
Date during the Agreement Term, by such amount as the Board of Directors of the
Company shall determine is necessary and appropriate to give effect to increases
in the cost of living. The Base Salary shall be payable in installments
consistent with the Company's payroll practices then in effect.
(b) Benefits and Perquisites; Bonus. Executive shall be entitled to
-------------------------------
participate in, to the extent Executive is otherwise eligible under the terms
thereof, the benefit plans and programs, including medical and savings and
retirement plans, and receive the benefits and perquisites, generally provided
to employees of the same level and responsibility as Executive. Executive shall
be entitled to four weeks vacation during each year of the Agreement Term.
Nothing in this Agreement shall preclude the Company from terminating or
amending from time to time any employee benefit plan or program. Executive shall
be eligible for bonuses, at such times and in such amounts as shall be
determined at the discretion of the Board of Directors of the Company based on
their assessment of Executive's performance of his duties and on the financial
performance of the Company. The Company shall obtain life insurance coverage
(assuming the Executive is insurable) on the life and for the benefit of the
Executive in an amount equal to twice the amount of the Base Salary then in
effect. The Company shall be entitled to all dividends, if any, which may be
paid under the policy. The Executive represents that the Executive is currently
in good health.
(c) Travel and Business Expenses; Car Allowance. Upon submission of
-------------------------------------------
itemized expense statements with supporting receipts in the manner specified by
the Company, Executive shall be entitled to reimbursement for reasonable travel
and other reasonable business expenses duly incurred by Executive in the
performance of Executive's duties under this Agreement in accordance with the
policies and procedures established by the Company from time to time for
employees of the same level and responsibility as Executive.
(d) Grant of Option and Terms Thereof. The Company hereby agrees that,
---------------------------------
on the date hereof, it will grant to Executive, pursuant to the Company's 1992
Stock Option Plan, as amended (the "Plan"), a non-qualified option (the
"Option") to purchase up to Seventy-Five Thousand (75,000) shares of the
--------------------- ------
Company's common stock (the "Option Shares"). The exercise price for each Option
Share will be the closing price of the Company's common stock as reported in the
Wall Street Journal for the Employment Date. The Option will vest and become
exercisable over a two-year period commencing on the date of grant, with one-
third vesting and becoming exercisable on the date of grant and on each of the
first and second anniversaries of the date of grant, subject to termination as
provided for in the Plan, and further subject to termination in the event that
(i) Executive breaches any term hereof, (ii) Executive's employment hereunder is
terminated by the Company for Cause (as hereinafter defined), or (iii) Executive
voluntarily terminates his employment hereunder. The Option will expire as to
each installment
2
<PAGE>
seven years from the date of vesting. The terms (including exercisability) of
the Option shall otherwise be governed by the Plan, as well as the applicable
option agreement to be entered into pursuant to the terms of the Plan.
Notwithstanding the foregoing, if a Change of Ownership (as hereinafter defined)
of the Company occurs, then, upon such occurrence, the vesting schedule of the
Option shall accelerate by two years so that 100% of the Option will have vested
on the Employment Date. For purposes of the preceding sentence, "Change of
Ownership" means acquisition and control of greater than 50% of the Company's
outstanding voting securities by a single entity.
(e) Temporary Living and Relocation Expense Reimbursement. The Company
-----------------------------------------------------
agrees to provide reimbursement, upon submission of itemized expense statements
with supporting receipts, for reasonable and customary expenses borne by the
Employee in conjunction with relocation to a residence reasonably accessible to
the Company's headquarters and temporary living expenses incurred prior to and
during said relocation. The sum total of all such expenses reimbursed by the
Company shall not exceed $15,000.
(f) No Other Compensation or Benefits; Payment. The compensation and
------------------------------------------
benefits specified in Sections 3 and 5 of this Agreement shall be in lieu of any
and all other compensation and benefits. Payment of all compensation and
benefits to Executive hereunder shall be made in accordance with the relevant
Company policies in effect from time to time, including normal payroll
practices, and shall be subject to all applicable employment and withholding
taxes.
(g) Cessation of Employment. In the event Executive shall cease to be
-----------------------
employed by the Company for any reason, then Executive's compensation and
benefits shall cease on the date of such event, except as otherwise provided
herein or in any applicable employee benefit plan or program.
4. Exclusive Employment; Noncompetition.
------------------------------------
(a) No Conflict; No Other Employment. During the period of Executive's
--------------------------------
employment with the Company, Executive shall not engage in any activity
which conflicts or interferes with or derogates from the performance of
Executive's duties hereunder nor shall Executive engage in any other
business activity, whether or not such business activity is pursued for
gain or profit, except as approved in advance in writing by the Board of
Directors of the Company.
(b) No Competition. Without limiting the generality of the provisions of
--------------
Sections 2(b) or 4(a), during the period of Executive's employment with the
Company, and for a period of two years thereafter (the "Restricted Period"),
Executive shall not, directly or indirectly, own, manage, operate, join,
control, participate in, invest in or otherwise be connected or associated with,
in any manner, including as an officer, director, employee, partner,
stockholder, joint venturer, lender, consultant, advisor, agent, proprietor,
trustee or investor, any Competing Business located in the United States or in
any other location where the Company
3
<PAGE>
operates or sells its products or services; provided, however, that if
Executive's employment hereunder is terminated by the Company under Section
5(d), then the provisions of this Section 4(b) shall remain in effect only
if the Company shall not have breached its obligation to pay to Executive
amounts as severance pursuant to Section 5(d).
(i) As used in this Agreement, the term "Competing Business"
shall mean any business or venture which engages in any business area, or
sells or provides products or services that compete or overlap with any
business area, in which the Company engages or is actively developing
products or technology to engage in at any time during the Agreement Term,
or any business or venture which sells or provides products or services
that compete or overlap with the products or services as sold or provided,
or are being actively developed to be sold or provided, by the Company at
any time during the Agreement Term.
(ii) For purposes of this Section 4(b), the term "invest" shall
not preclude an investment in not more than one percent (1%) of the
outstanding capital stock of a corporation whose capital stock is listed on
a national securities exchange or included in the NASDAQ Stock Market, so
long as Executive does not have the power to control or direct the
management of, or is not otherwise associated with, such corporation.
(c) No Solicitation. During the Restricted Period, Executive shall not
---------------
solicit or encourage any employee or consultant of the Company to leave the
employ, or cease his or her relationship with, the Company for any reason, nor
employ or retain such an individual in a Competing Business or any other
business .
(d) Company Customers. Executive shall not, during the Restricted
-----------------
Period, directly or indirectly, contact, solicit or do business with any
"customers" (as hereinafter defined) of the Company for the purpose of selling
or providing any product or service then sold or provided by the Company to such
customers or being actively developed to be sold or provided to such customers
during Executive's employment by the Company or at the time of termination of
Executive's employment hereunder.
For the purposes of the provisions of this Section 4(d), "customer" shall
include any entity that purchased any product or service from the Company within
twelve months of the termination of Executive's employment hereunder, without
regard to the reason for such termination. The term "customer" also includes any
former customer or potential customer of the Company which the Company has
solicited within twelve months of such termination, for the purpose of selling
or providing any product or service then sold or provided, or then actively
being developed to be sold or provided, by the Company.
4
<PAGE>
(e) Modification of Covenants. The restrictions against competition set
-------------------------
forth in this Section 4 are considered by the parties to be reasonable for the
purposes of protecting the business of the Company. However, if any such
restriction is found by any court of competent jurisdiction to be unenforceable
because it extends for too long a period of time or over too great a range of
activities or in too broad a geographic area, it shall be interpreted to extend
only over the maximum period of time, range of activities or geographic area as
to which it may be enforceable.
5. Termination of Employment.
-------------------------
(a) Termination. The Company may terminate Executive's employment for
-----------
Cause (as hereinafter defined) in which case the provisions of Section 5(b)
shall apply. The Company may also terminate Executive's employment in the event
of Executive's Disability (as hereinafter defined), in which case the provisions
of Section 5(c) shall apply. The Company may also terminate the Executive's
employment for any other reason by written notice to Executive, in which case
the provisions of Section 5(d) shall apply. If Executive's employment is
terminated by reason of Executive's death, retirement or voluntary resignation,
the provisions of Section 5(b) shall apply.
(b) Termination for Cause; Termination by Reason of Death or Retirement
-------------------------------------------------------------------
or Voluntary Resignation. (1) In the event that Executive's employment hereunder
- ------------------------
is terminated during the Agreement Term (i) by the Company for Cause (as
hereinafter defined), (ii) by reason of Executive's death or retirement or (iii)
by reason of Executive's voluntary resignation, then the Company shall pay to
Executive, within thirty (30) days of the date of such termination, only the
Base Salary through such date of termination.
(2) For purposes of this Agreement, "Cause" shall mean (i)
conviction of any crime (whether or not involving the Company) constituting
a felony in the jurisdiction involved; (ii) engaging in any substantiated
act involving moral turpitude; (iii) engaging in any act which, in each
case, subjects, or if generally known would subject, the Company to public
ridicule or embarrassment; (iv) gross neglect or misconduct in the
performance of Executive's duties hereunder; (v) willful or repeated
failure or refusal to perform such duties as may be relegated to Executive
commensurate with Executive's position; or (vi) breach of any provision of
this Agreement by Executive .
(3) In the event the Company desires to terminate Executive's
employment for Cause as defined in clauses (iv), (v) or (vi) of the
definition thereof, the Company shall first attempt to resolve the
matter(s) at issue through a meeting between Executive and the Chairman of
the Board for Directors of the Company. If such meeting fails to resolve
the matter(s), then Executive will meet with the Board of Directors of the
Company and attempt to resolve the matter(s). The decision of the Board of
Directors of the Company as to the matter(s) shall be final and binding on
the parties and not subject to review or appeal by any other person.
5
<PAGE>
(c) Disability. If, as a result of Executive's incapacity due to
----------
physical or mental illness, Executive shall have been absent from Executive's
duties hereunder on a full time basis for either (i) ninety (90) days within any
six-month period, or (ii) sixty (60) consecutive days, and within thirty (30)
days after written notice of termination is given shall not have returned to the
performance of Executive's duties hereunder on a full time basis, the Company
may terminate Executive's employment hereunder for "Disability". In that event,
the Company shall pay to Executive, within thirty (30) days of the date of such
termination, only the Base Salary through such date of termination. During any
period that Executive fails to perform Executive's duties hereunder as a result
of incapacity due to physical or mental illness (a "Disability Period"),
Executive shall continue to receive the compensation and benefits provided by
Section 3 hereof until Executive's employment hereunder is terminated; provided,
however, that the amount of compensation and benefits received by Executive
during the Disability Period shall be reduced by the aggregate amounts, if any,
payable to Executive under disability benefit plans and programs of the Company
or under the Social Security disability insurance program.
(d) Termination By Company For Any Other Reason. In the event that
-------------------------------------------
Executive's employment hereunder is terminated by the Company during the
Agreement Term for any reason other than as provided in Sections 5(b) or 5(c)
hereof, then the Company shall pay to Executive, within thirty (30) days of the
date of such termination, the Base Salary through such date of termination and,
in lieu of any further compensation and benefits for the balance of the
Agreement Term, severance pay equal to the Base Salary that Executive would have
otherwise received during the period of six months from the effective date of
such termination, commencing with such date of termination at the times and in
the amounts such Base Salary would have been paid; provided, however, that in
the event that Executive shall breach Sections 4 or 6 hereof, in addition to any
other remedies the Company may have in the event Executive breaches this
Agreement, the Company's obligation pursuant to this Section 5(d) to continue
such payments of salary shall cease and Executive's rights thereto shall
terminate and shall be forfeited.
(e) No Further Liability; Release. Payment made and performance by the
-----------------------------
Company in accordance with this Section 5 shall operate to fully discharge and
release the Company and its directors, officers, employees, subsidiaries,
affiliates, stockholders, successors, assigns, agents and representatives from
any further obligation or liability with respect to Executive's employment and
termination of employment. Other than paying Executive's Base Salary through the
date of termination of Executive's employment and making any severance payment
pursuant to and in accordance with this Section 5 (as applicable), the Company
and its directors, officers, employees, subsidiaries, affiliates, stockholders,
successors, assigns, agents and representatives shall have no further obligation
or liability to Executive or any other person under this Agreement. The Company
shall have the right to condition the payment of any severance or other amounts
pursuant to Sections 5(c) or 5(d) hereof upon the delivery by Executive to the
Company of a release in form and substance satisfactory to the Company of any
and all claims Executive may have against the Company and its directors,
officers, employees, subsidiaries, affiliates, stockholders, successors,
assigns, agents and representatives arising out of or related to Executive's
employment by the Company and termination of such employment.
6
<PAGE>
6. Confidential Information.
------------------------
(a) Existence of Confidential Information. The Company owns and has
-------------------------------------
developed and compiled, and will develop and compile, certain proprietary
technology, know-how and confidential information which have great value to its
business (referred to in this Agreement, collectively, as "Confidential
Information"). Confidential Information includes not only information disclosed
by the Company to Executive, but also information developed or learned by
Executive during the course or as a result of employment with the Company, which
information shall be the property of the Company. Confidential Information
includes all information that has or could have commercial value or other
utility in the business in which the Company is engaged or contemplates
engaging, and all information of which the unauthorized disclosure could be
detrimental to the interests of the Company, whether or not such information is
specifically labelled as Confidential Information. By way of example and without
limitation, Confidential Information includes any and all information developed,
obtained, licensed by or to or owned by the Company concerning trade secrets,
techniques, know-how (including research data, designs, plans, procedures,
merchandising, marketing, distribution and warehousing know-how, processes, and
research records), software, computer programs, and any other intellectual
property created, used or sold (through a license or otherwise) by the Company,
product know-how and processes, innovations, discoveries, improvements,
research, development, test results, reports, specifications, data, formats,
marketing data and plans, business plans, strategies, forecasts, unpublished
financial information, orders, agreements and other forms of documents, price
and cost information, merchandising opportunities, expansion plans, budgets,
projections, customer, supplier, licensee, licensor and subcontractor
identities, characteristics, agreements and operating procedures, and salary,
staffing and employment information.
(b) Protection of Confidential Information. Executive acknowledges and
--------------------------------------
agrees that in the performance of duties hereunder Executive develops and
acquires, and the Company discloses to and entrusts Executive with, Confidential
Information which is the exclusive property of the Company and which Executive
may possess or use only in the performance of duties for the Company. Executive
also acknowledges that Executive is aware that the unauthorized disclosure of
Confidential Information, among other things, may be prejudicial to the
Company's interests, an invasion of privacy and an improper disclosure of trade
secrets. Executive shall not, directly of indirectly, use, make available, sell,
disclose or otherwise communicate to any corporation, partnership, individual or
other third party, other than in the course of Executive's assigned duties and
for the benefit of the Company, any Confidential Information, either during the
Agreement Term or thereafter. In the event Executive desires to publish the
results of Executive's work for or experiences with the Company through
literature, interviews or speeches, Executive will submit requests for such
interviews or such literature or speeches to the Board of Directors of the
Company at least fourteen (14) days before any anticipated dissemination of such
information for a determination of whether such disclosure is in the best
interests of the Company, including whether such disclosure may impair trade
secret status or constitute an invasion of privacy. Executive agrees not to
publish, disclose or otherwise disseminate such information without the prior
written approval of the Board of Directors of the
7
<PAGE>
Company.
(c) Delivery of Records, Etc. In the event Executive's employment with
------------------------
the Company ceases for any reason, Executive will not remove from the Company's
premises without its prior written consent any records, notes, notebooks, files,
drawings, documents, equipment, materials and writings received from, created
for or belonging to the Company, including those which relate to or contain
Confidential Information, or any copies thereof. Upon request or when employment
with the Company terminates, Executive will immediately deliver the same to the
Company.
7. Invention and Patents.
---------------------
(a) Executive will promptly and fully disclose to the Company any and
all inventions, discoveries, trade secrets and improvements, whether or not
patentable or whether or not they are made, conceived or reduced to practice
during working hours or using the Company's data or facilities, which Executive
shall develop, make, conceive or reduce to practice during Executive's
employment by the Company, either solely or jointly with others (collectively,
"Developments"). All such Developments shall be the sole property of the
Company, and Executive hereby assigns to the Company, without further
compensation, all his right, title and interest in and to such Developments and
any and all related patents, patent applications, copyrights, copyright
applications, trademarks and trade names in the United States and elsewhere.
(b) Executive shall keep and maintain adequate and current written
records of all Developments (in the form of notes, sketches, drawings and as may
be specified by the Company), which records shall be available to and remain the
sole property of the Company at all times.
(c) Executive shall assist the Company in obtaining and enforcing
patent, copyright and other forms of legal protection for the Developments in
any country. Upon request, Executive shall sign all applications, assignments,
instruments and papers and perform all acts necessary or desired by the Company
and to enable the Company its successors, assigns and nominees, to secure and
enjoy the full exclusive benefits and advantages thereof.
(d) Executive understands that Executive's obligations under this
section will continue after the termination of his employment with the Company
and that, whether during or after his employment, Executive shall perform such
obligations without further compensation, except for reimbursement of expenses
incurred at the request of the Company.
8
<PAGE>
8. Assignment and Transfer.
-----------------------
(a) Company. This Agreement shall inure to the benefit of and be
-------
enforceable by, and may be assigned by the Company to, any purchaser of all or
substantially all of the Company's business or assets, any successor to the
Company or any assignee thereof (whether direct or indirect, by purchase,
merger, consolidation or otherwise). The Company will require any such
purchaser, successor or assignee to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such purchase, succession or assignment had taken
place.
(b) Executive. Executive's rights and obligations under this Agreement
---------
shall not be transferable by Executive by assignment or otherwise, and any
purported assignment, transfer or delegation thereof shall be void; provided,
however, that if Executive shall die, all amounts then payable to Executive
hereunder shall be paid in accordance with the terms of this Agreement to
Executive's devisee, legatee or other designee or, if there be no such designee,
to Executive's estate.
9. Miscellaneous.
-------------
(a) Other Obligations. Executive represents and warrants that he is not
-----------------
a party to any other employment agreement and that neither Executive's
employment with the Company nor Executive's performance of Executive's
obligations hereunder will conflict with or violate or otherwise are
inconsistent with any other agreements to which Executive is or has been a party
or with any other obligations, legal or otherwise, which Executive may have.
(b) Nondisclosure; Prior Employers. Executive will not disclose to the
------------------------------
Company, or use, or induce the Company to use, any proprietary information,
trade secrets or confidential business information of others. Executive
represents and warrants that Executive has returned all property, proprietary
information, trade secrets and confidential business information belonging to
all prior employers.
(c) Cooperation. Following termination of employment with the Company,
-----------
Executive shall cooperate with the Company, as requested by the Company, to
affect a transition of Executive's responsibilities and to ensure that the
Company is aware of all matters being handled by Executive.
(d) Protection of Reputation. During the Agreement Term and thereafter,
------------------------
Executive agrees that he will take no action which is intended, or could
reasonably be expected, to harm the Company or its reputation or which could
reasonably be expected to lead to unwanted or unfavorable publicity to the
Company.
9
<PAGE>
(e) Governing Law; Arbitration.
--------------------------
(i) Governing Law. This Agreement, including the validity,
-------------
interpretation, construction and performance of this Agreement, shall be
governed by and construed in accordance with the laws of the State of New Jersey
applicable to agreements made and to be performed in such state without regard
to such states conflicts of law principles.
(ii) Arbitration. Subject to Section 9(k) hereof, any controversy or
-----------
claim which arises out of or relating to this Agreement, or the breach thereof
shall be settled by arbitration in accordance with the Rules of the American
Arbitration Association then in effect. The controversy or claim shall be
submitted to three arbitrators, one of whom shall be chosen by the Employee, one
of whom shall be chosen by the Company, and one of whom shall be chosen by the
two so selected. The party desiring arbitration shall give written notice to the
other party of its desire to arbitrate the particular matter in question, naming
the arbitrator selected by it. If the other party shall fail within a period of
15 days after such notice shall have been given to reply in writing naming the
arbitrator chosen as above provided, or if the two arbitrators selected by the
parties shall fail within 15 days after their selection to agree upon the third
arbitrator, then either party may apply to the American Arbitration Association
for the appointment of an arbitrator to fill the place so remaining vacant. The
decision of any two of the arbitrators shall be final and binding upon the
parties hereto. Judgement upon the award rendered by the arbitrators may be
entered in any court having jurisdiction thereof. The proceedings shall be held
in New York, New York. The arbitrators shall have no power to award punitive or
exemplary damages or to ignore or vary the terms of this Agreement, and shall be
bound to apply controlling law. Arbitration shall be binding and the remedy for
the settlement of the controversy or claims (except as set forth in the
preceding paragraph of this Section).
(f) Entire Agreement. This Agreement (including the Exhibits hereto)
----------------
contains the entire agreement and understanding between the parties hereto in
respect of the subject matter hereof and supersedes, cancels and annuls any
prior or contemporaneous written or oral agreements, understandings, commitments
and practices between them respecting the subject matter hereof, including all
prior employment agreements, if any, between the Company and Executive, which
agreement(s) hereby are terminated and shall be of no further force or effect.
(g) Amendment. This Agreement may be amended only by a writing which
---------
makes express reference to this Agreement as the subject of such amendment and
which is signed by Executive and, on behalf of the Company, by its duly
authorized officer.
(h) Severability. If any term, provision, covenant or condition of this
------------
Agreement or part thereof, or the application thereof to any person, place or
circumstance, shall be held to be invalid, unenforceable or void, the remainder
of this Agreement and such term,
10
<PAGE>
provision, covenant or condition shall remain in full force and effect, and any
such invalid, unenforceable or void term, provision, covenant or condition shall
be deemed, without further action on the part of the parties hereto, modified,
amended and limited to the extent necessary to render the same and the remainder
of this Agreement valid, enforceable and lawful. In this regard, Executive
acknowledges that the provisions of Sections 4 and 6 are reasonable and
necessary for the protection of the Company.
(i) Construction. The headings and captions of this Agreement are
------------
provided for convenience only and are intended to have no effect in construing
or interpreting this Agreement. The language in all parts of this Agreement
shall be in all cases construed according to its fair meaning and not strictly
for or against the Company or Executive. The use herein of the word "including,"
when following any general provision, sentence, clause, statement, term or
matter, shall be deemed to mean "including, without limitation". As used herein,
"Company" shall mean the Company and its subsidiaries and any purchaser of,
successor to or assignee (whether direct or indirect, by purchase, merger,
consolidation or otherwise) of all or substantially all of the Company's
business or assets which is obligated to perform this Agreement by operation of
law. As used herein, the words "day" or "days" shall mean a calendar day or
days.
(j) Nonwaiver. Neither any course of dealing nor any failure or neglect
---------
of either party hereto in any instance to exercise any right, power or privilege
hereunder or under law shall constitute a waiver of any other right, power or
privilege or of the same right, power or privilege in any other instance. All
waivers by either party hereto must be contained in a written instrument signed
by the party to be charged and, in the case of the Company, by its duly
authorized officer.
(k) Remedies for Breach. The parties hereto agree that Executive is
-------------------
obligated under this Agreement to render personal services during the Agreement
Term of a special, unique, unusual, extraordinary and intellectual character,
thereby giving this Agreement peculiar value, and, in the event of a breach or
threatened breach of any covenant of Executive herein, the injury or imminent
injury to the value and the goodwill of the Company's business could not be
reasonably or adequately compensated in damages in an action at law.
Accordingly, Executive expressly acknowledges that the Company shall be entitled
to specific performance, injunctive relief or any other equitable remedy against
Executive, without the posting of a bond, in the event of any breach or
threatened breach of any provision of this Agreement by Executive (including
Sections 4 and 6 hereof). Without limiting the generality of the foregoing, if
Executive breaches Sections 4 or 6 hereof, such breach will entitle the Company
to enjoin Executive from disclosing any Confidential Information to any
Competing Business, to enjoin such Competing Business from receiving Executive
or using any such Confidential Information and/or to enjoin Executive from
rendering personal services to or in connection with such Competing Business.
The rights and remedies of the parties hereto are cumulative and shall not be
exclusive, and each such party shall be entitled to pursue all legal and
equitable rights and remedies and to secure performance of the obligations and
duties of the other under this Agreement, and the enforcement of one or more of
such rights and remedies by a party shall in no way preclude such party from
pursuing, at the same time or subsequently, any and all other rights and
remedies
11
<PAGE>
available to it.
(l) Notices. Any notice, request, consent or approval required or
-------
permitted to be given under this Agreement or pursuant to law shall be
sufficient if in writing, and if and when sent by certified or registered mail,
return receipt requested, with postage prepaid, to Executive's residence (as
reflected in the Company's records or as otherwise designated by Executive on
thirty (30) days' prior written notice to the Company) or to the Company's
principal executive office, attention: Chairman of the Board (with copies to the
General Counsel), as the case may be. All such notices, requests, consents and
approvals shall be effective upon being deposited in the United States mail.
However, the time period in which a response thereto must be given shall
commence to run from the date of receipt on the return receipt of the notice,
request, consent or approval by the addressee thereof. Rejection or other
refusal to accept, or the inability to deliver because of changed address of
which no notice was given as provided herein, shall be deemed to be receipt of
the notice, request, consent or approval sent.
(m) Assistance in Proceedings, Etc. Executive shall, without additional
------------------------------
compensation, during and after expiration of the Agreement Term, upon reasonable
notice, furnish such information and proper assistance to the Company as may
reasonably be required by the Company in connection with any legal or quasi-
legal proceeding, including any external or internal investigation, involving
the Company or any of its affiliates or in which any of them is, or may become,
a party.
(n) Survival. Cessation or termination of Executive's employment with
--------
the Company shall not result in termination of this Agreement. The respective
obligations of Executive and rights and benefits afforded to the Company as
provided in this Agreement shall survive cessation or termination of Executive's
employment hereunder. This Agreement shall not terminate upon, and shall remain
in full force and effect following, expiration of the Agreement Term and all
rights and obligations of the parties hereto as and to the extent provided
herein shall survive such expiration.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed
on its behalf by an officer thereunto duly authorized and Executive has duly
executed this Agreement, all as of the date and year first written above.
LIFE MEDICAL SCIENCES, INC.
By: /s/ Robert P. Hickey
---------------------------------------------
Name: Robert P. Hickey
Title: President & CEO
/s/ Drew Karazin
------------------------------------------------
DREW KARAZIN
12
<PAGE>
Exhibit 10.53
EMPLOYMENT AGREEMENT
THIS AGREEMENT made in Edison, New Jersey as of the 1st day of July 1998,
-----
between Life Medical Sciences, Inc., a Delaware corporation (the "Company") and
Robert G. Conway the undersigned individual ("Executive").
In consideration of the mutual covenants and agreements hereinafter set forth,
the Company and Executive agree as follows:
1. Agreement Term.
--------------
The term of this Agreement shall be the three-year period commencing on July
----
1st, 1998 (the "Employment Date") and ending on the third anniversary of the
- -----
Employment Date (the "Agreement Term").
2. Employment.
----------
(a) Employment by the Company. Executive agrees to be employed by the
-------------------------
Company for the Agreement Term upon the terms and subject to the conditions set
forth in this Agreement. Executive shall have the title of Vice President
Operations reporting to the President and CEO. Executive shall have such duties
as may be prescribed by the Company and shall serve in such other and/or
additional position(s) as the Company may determine from time to time. Executive
shall also serve as a Corporate Officer of the Company. The Company will at all
times treat the Executive with dignity, honesty and respect, and will provide
Executive with such resources as in the Company's judgement shall enable the
Executive to discharge his responsibilities.
(b) Performance of Duties. Throughout the Agreement Term, Executive
---------------------
shall faithfully and diligently perform Executive's duties in conformity with
the directions of the Company and serve the Company to the best of Executive's
ability. Executive shall devote Executive's entire working time, attention and
energies to the business and affairs of the Company, subject to vacations and
sick leave as provided herein and in accordance with Company policy.
(c) Place of Performance. During the Agreement Term, Executive shall,
--------------------
subject to travel requirements on behalf of the Company, be based at the
Company's offices in Edison, New Jersey or such other location(s) as the Company
may determine and, in this regard, Executive shall maintain Executive's personal
residence in such city or such other location within reasonable access to the
Company's headquarters.
Page 1
<PAGE>
3. Compensation and Benefits.
-------------------------
(a) Base Salary. The Company agrees to pay to Executive for employment
-----------
hereunder a base salary ("Base Salary") at the annual rate of $145,000.
---------
The Base Salary shall be increased prospectively on each anniversary of the
Employment Date during the Agreement Term, by such amount as the Board of
Directors of the Company shall determine is necessary and appropriate to give
effect to increases in the cost of living. The Base Salary shall be payable in
installments consistent with the Company's payroll practices then in effect.
(b) Benefits and Perquisites; Bonus. Executive shall be entitled to
-------------------------------
participate in, to the extent Executive is otherwise eligible under the terms
thereof, the benefit plans and programs, including medical and savings and
retirement plans, and receive the benefits and perquisites, generally provided
to employees of the same level and responsibility as Executive. Executive shall
be entitled to three weeks vacation during each year of the Agreement Term.
Nothing in this Agreement shall preclude the Company from terminating or
amending from time to time any employee benefit plan or program. Executive shall
be eligible for bonuses, at such times and in such amounts as shall be
determined at the discretion of the Board of Directors of the Company based on
their assessment of Executive's performance of his duties and on the financial
performance of the Company. The Company shall obtain life insurance coverage
(assuming the Executive is insurable) on the life and for the benefit of the
Executive in an amount equal to twice the amount of the Base Salary then in
effect. The Company shall be entitled to all dividends, if any, which may be
paid under the policy. The Executive represents that the Executive is currently
in good health.
(c) Travel and Business Expenses; Car Allowance. Upon submission of
-------------------------------------------
itemized expense statements with supporting receipts in the manner specified by
the Company, Executive shall be entitled to reimbursement for reasonable travel
and other reasonable business expenses duly incurred by Executive in the
performance of Executive's duties under this Agreement in accordance with the
policies and procedures established by the Company from time to time for
employees of the same level and responsibility as Executive.
(d) Grant of Option and Terms Thereof. The Company hereby agrees that,
---------------------------------
on the date hereof, it will grant to Executive, pursuant to the Company's 1992
Stock Option Plan, as amended (the "Plan"), a non-qualified option (the
"Option") to purchase up to Seventy-Five Thousand (75,000) shares of the
--------------------- ------
Company's common stock (the "Option Shares"). The exercise price for each Option
Share will be the closing price of the Company's common stock as reported in the
Wall Street Journal for the Employment Date. The Option will vest and become
exercisable over a two-year period commencing on the date of grant, with one-
third vesting and becoming exercisable on the date of grant and on each of the
first and second anniversaries of the date of grant, subject to termination as
provided for in the Plan, and further subject to termination in the event that
(i) Executive breaches any term hereof, (ii) Executive's employment hereunder is
terminated by the Company for Cause (as hereinafter defined), or (iii) Executive
voluntarily terminates his employment hereunder. The Option will expire as to
each installment seven years from the date of vesting. The terms (including
exercisability) of the Option shall otherwise be governed by the Plan, as well
as the applicable option agreement to be entered into pursuant to the
Page 2
<PAGE>
terms of the Plan. Notwithstanding the foregoing, if a Change of Ownership (as
hereinafter defined) of the Company occurs, then, upon such occurrence, the
vesting schedule of the Option shall accelerate by two years so that 100% of the
Option will have vested on the Employment Date. For purposes of the preceding
sentence, "Change of Ownership" means acquisition and control of greater than
50% of the Company's outstanding voting securities by a single entity.
(e) No Other Compensation or Benefits; Payment. The compensation and
------------------------------------------
benefits specified in Sections 3 and 5 of this Agreement shall be in lieu of any
and all other compensation and benefits. Payment of all compensation and
benefits to Executive hereunder shall be made in accordance with the relevant
Company policies in effect from time to time, including normal payroll
practices, and shall be subject to all applicable employment and withholding
taxes.
(f) Cessation of Employment. In the event Executive shall cease to be
-----------------------
employed by the Company for any reason, then Executive's compensation and
benefits shall cease on the date of such event, except as otherwise provided
herein or in any applicable employee benefit plan or program.
4. Exclusive Employment; Noncompetition.
------------------------------------
(a) No Conflict; No Other Employment. During the period of Executive's
--------------------------------
employment with the Company, Executive shall not engage in any activity which
conflicts or interferes with or derogates from the performance of Executive's
duties hereunder nor shall Executive engage in any other business activity,
whether or not such business activity is pursued for gain or profit, except as
approved in advance in writing by the Board of Directors of the Company.
(b) No Competition. Without limiting the generality of the provisions of
--------------
Sections 2(b) or 4(a), during the period of Executive's employment with the
Company, and for a period of two years thereafter (the "Restricted Period"),
Executive shall not, directly or indirectly, own, manage, operate, join,
control, participate in, invest in or otherwise be connected or associated with,
in any manner, including as an officer, director, employee, partner,
stockholder, joint venturer, lender, consultant, advisor, agent, proprietor,
trustee or investor, any Competing Business located in the United States or in
any other location where the Company operates or sells its products or services;
provided, however, that if Executive's employment hereunder is terminated by the
Company under Section 5(d), then the provisions of this Section 4(b) shall
remain in effect only if the Company shall not have breached its obligation to
pay to Executive amounts as severance pursuant to Section 5(d).
(i) As used in this Agreement, the term "Competing Business"
shall mean any business or venture which engages in any business area, or
sells or provides products or services that compete or overlap with any
business area, in which the Company engages or is actively developing
products or technology to engage in at any time during the Agreement Term,
or any business or venture which sells or provides products or services
that compete or overlap with the products or services as sold or provided,
or are being actively developed to be sold or provided, by the Company at
any time during the Agreement Term.
Page 3
<PAGE>
(ii) For purposes of this Section 4(b), the term "invest" shall
not preclude an investment in not more than one percent (1%) of the
outstanding capital stock of a corporation whose capital stock is listed on
a national securities exchange or included in the NASDAQ Stock Market, so
long as Executive does not have the power to control or direct the
management of, or is not otherwise associated with, such corporation.
(c) No Solicitation. During the Restricted Period, Executive shall not
---------------
solicit or encourage any employee or consultant of the Company to leave the
employ, or cease his or her relationship with, the Company for any reason, nor
employ or retain such an individual in a Competing Business or any other
business.
(d) Company Customers. Executive shall not, during the Restricted
-----------------
Period, directly or indirectly, contact, solicit or do business with any
"customers" (as hereinafter defined) of the Company for the purpose of selling
or providing any product or service then sold or provided by the Company to such
customers or being actively developed to be sold or provided to such customers
during Executive's employment by the Company or at the time of termination of
Executive's employment hereunder.
For the purposes of the provisions of this Section 4(d), "customer" shall
include any entity that purchased any product or service from the Company within
twelve months of the termination of Executive's employment hereunder, without
regard to the reason for such termination. The term "customer" also includes any
former customer or potential customer of the Company which the Company has
solicited within twelve months of such termination, for the purpose of selling
or providing any product or service then sold or provided, or then actively
being developed to be sold or provided, by the Company.
(e) Modification of Covenants. The restrictions against competition
-------------------------
set forth in this Section 4 are considered by the parties to be reasonable for
the purposes of protecting the business of the Company. However, if any such
restriction is found by any court of competent jurisdiction to be unenforceable
because it extends for too long a period of time or over too great a range of
activities or in too broad a geographic area, it shall be interpreted to extend
only over the maximum period of time, range of activities or geographic area as
to which it may be enforceable.
5. Termination of Employment.
-------------------------
(a) Termination. The Company may terminate Executive's employment for
-----------
Cause (as hereinafter defined) in which case the provisions of Section 5(b)
shall apply. The Company may also terminate Executive's employment in the event
of Executive's Disability (as hereinafter defined), in which case the provisions
of Section 5(c) shall apply. The Company may also terminate the Executive's
employment for any other reason by written notice to Executive, in which case
the provisions of Section 5(d) shall apply. If Executive's employment is
terminated by reason of Executive's death, retirement or voluntary resignation,
the provisions of Section 5(b) shall apply.
Page 4
<PAGE>
(b) Termination for Cause; Termination by Reason of Death or Retirement
-------------------------------------------------------------------
or Voluntary Resignation. (1) In the event that Executive's employment
- ------------------------
hereunder is terminated during the Agreement Term (i) by the Company for Cause
(as hereinafter defined), (ii) by reason of Executive's death or retirement or
(iii) by reason of Executive's voluntary resignation, then the Company shall pay
to Executive, within thirty (30) days of the date of such termination, only the
Base Salary through such date of termination.
(2) For purposes of this Agreement, "Cause" shall mean (i)
conviction of any crime (whether or not involving the Company) constituting a
felony in the jurisdiction involved; (ii) engaging in any substantiated act
involving moral turpitude; (iii) engaging in any act which, in each case,
subjects, or if generally known would subject, the Company to public ridicule or
embarrassment; (iv) gross neglect or misconduct in the performance of
Executive's duties hereunder; (v) willful or repeated failure or refusal to
perform such duties as may be relegated to Executive commensurate with
Executive's position; or (vi) breach of any provision of this Agreement by
Executive.
(3) In the event the Company desires to terminate Executive's
employment for Cause as defined in clauses (iv), (v) or (vi) of the definition
thereof, the Company shall first attempt to resolve the matter(s) at issue
through a meeting between Executive and the Chairman of the Board for Directors
of the Company. If such meeting fails to resolve the matter(s), then Executive
will meet with the Board of Directors of the Company and attempt to resolve the
matter(s). The decision of the Board of Directors of the Company as to the
matter(s) shall be final and binding on the parties and not subject to review or
appeal by any other person.
(c) Disability. If, as a result of Executive's incapacity due to
----------
physical or mental illness, Executive shall have been absent from Executive's
duties hereunder on a full time basis for either (i) ninety (90) days within any
six-month period, or (ii) sixty (60) consecutive days, and within thirty (30)
days after written notice of termination is given shall not have returned to the
performance of Executive's duties hereunder on a full time basis, the Company
may terminate Executive's employment hereunder for "Disability". In that event,
the Company shall pay to Executive, within thirty (30) days of the date of such
termination, only the Base Salary through such date of termination. During any
period that Executive fails to perform Executive's duties hereunder as a result
of incapacity due to physical or mental illness (a "Disability Period"),
Executive shall continue to receive the compensation and benefits provided by
Section 3 hereof until Executive's employment hereunder is terminated; provided,
however, that the amount of compensation and benefits received by Executive
during the Disability Period shall be reduced by the aggregate amounts, if any,
payable to Executive under disability benefit plans and programs of the Company
or under the Social Security disability insurance program.
(d) Termination By Company For Any Other Reason. In the event that
-------------------------------------------
Executive's employment hereunder is terminated by the Company during the
Agreement Term for any reason other than as provided in Sections 5(b) or 5(c)
hereof, then the Company shall pay to Executive, within thirty (30) days of the
date of such termination, the Base Salary through such date of termination and,
in lieu of any further compensation and benefits for the balance of the
Agreement Term, severance pay equal to the Base Salary that Executive would have
otherwise
Page 5
<PAGE>
received during the period of six months from the effective date of such
termination, commencing with such date of termination at the times and in the
amounts such Base Salary would have been paid; provided, however, that in the
event that Executive shall breach Sections 4 or 6 hereof, in addition to any
other remedies the Company may have in the event Executive breaches this
Agreement, the Company's obligation pursuant to this Section 5(d) to continue
such payments of salary shall cease and Executive's rights thereto shall
terminate and shall be forfeited.
(e) No Further Liability; Release. Payment made and performance by the
-----------------------------
Company in accordance with this Section 5 shall operate to fully discharge and
release the Company and its directors, officers, employees, subsidiaries,
affiliates, stockholders, successors, assigns, agents and representatives from
any further obligation or liability with respect to Executive's employment and
termination of employment. Other than paying Executive's Base Salary through the
date of termination of Executive's employment and making any severance payment
pursuant to and in accordance with this Section 5 (as applicable), the Company
and its directors, officers, employees, subsidiaries, affiliates, stockholders,
successors, assigns, agents and representatives shall have no further obligation
or liability to Executive or any other person under this Agreement. The Company
shall have the right to condition the payment of any severance or other amounts
pursuant to Sections 5(c) or 5(d) hereof upon the delivery by Executive to the
Company of a release in form and substance satisfactory to the Company of any
and all claims Executive may have against the Company and its directors,
officers, employees, subsidiaries, affiliates, stockholders, successors,
assigns, agents and representatives arising out of or related to Executive's
employment by the Company and termination of such employment.
Page 6
<PAGE>
6. Confidential Information.
------------------------
(a) Existence of Confidential Information. The Company owns and has
-------------------------------------
developed and compiled, and will develop and compile, certain proprietary
technology, know-how and confidential information which have great value to its
business (referred to in this Agreement, collectively, as "Confidential
Information"). Confidential Information includes not only information disclosed
by the Company to Executive, but also information developed or learned by
Executive during the course or as a result of employment with the Company, which
information shall be the property of the Company. Confidential Information
includes all information that has or could have commercial value or other
utility in the business in which the Company is engaged or contemplates
engaging, and all information of which the unauthorized disclosure could be
detrimental to the interests of the Company, whether or not such information is
specifically labelled as Confidential Information. By way of example and without
limitation, Confidential Information includes any and all information developed,
obtained, licensed by or to or owned by the Company concerning trade secrets,
techniques, know-how (including research data, designs, plans, procedures,
merchandising, marketing, distribution and warehousing know-how, processes, and
research records), software, computer programs, and any other intellectual
property created, used or sold (through a license or otherwise) by the Company,
product know-how and processes, innovations, discoveries, improvements,
research, development, test results, reports, specifications, data, formats,
marketing data and plans, business plans, strategies, forecasts, unpublished
financial information, orders, agreements and other forms of documents, price
and cost information, merchandising opportunities, expansion plans, budgets,
projections, customer, supplier, licensee, licensor and subcontractor
identities, characteristics, agreements and operating procedures, and salary,
staffing and employment information.
(b) Protection of Confidential Information. Executive acknowledges and
--------------------------------------
agrees that in the performance of duties hereunder Executive develops and
acquires, and the Company discloses to and entrusts Executive with, Confidential
Information which is the exclusive property of the Company and which Executive
may possess or use only in the performance of duties for the Company. Executive
also acknowledges that Executive is aware that the unauthorized disclosure of
Confidential Information, among other things, may be prejudicial to the
Company's interests, an invasion of privacy and an improper disclosure of trade
secrets. Executive shall not, directly of indirectly, use, make available, sell,
disclose or otherwise communicate to any corporation, partnership, individual or
other third party, other than in the course of Executive's assigned duties and
for the benefit of the Company, any Confidential Information, either during the
Agreement Term or thereafter. In the event Executive desires to publish the
results of Executive's work for or experiences with the Company through
literature, interviews or speeches, Executive will submit requests for such
interviews or such literature or speeches to the Board of Directors of the
Company at least fourteen (14) days before any anticipated dissemination of such
information for a determination of whether such disclosure is in the best
interests of the Company, including whether such disclosure may impair trade
secret status or constitute an invasion of privacy. Executive agrees not to
publish, disclose or otherwise disseminate such information without the prior
written approval of the Board of Directors of the Company.
Page 7
<PAGE>
(c) Delivery of Records, Etc. In the event Executive's employment
------------------------
with the Company ceases for any reason, Executive will not remove from the
Company's premises without its prior written consent any records, notes,
notebooks, files, drawings, documents, equipment, materials and writings
received from, created for or belonging to the Company, including those which
relate to or contain Confidential Information, or any copies thereof. Upon
request or when employment with the Company terminates, Executive will
immediately deliver the same to the Company.
7. Invention and Patents.
---------------------
(a) Executive will promptly and fully disclose to the Company any and all
inventions, discoveries, trade secrets and improvements, whether or not
patentable or whether or not they are made, conceived or reduced to practice
during working hours or using the Company's data or facilities, which Executive
shall develop, make, conceive or reduce to practice during Executive's
employment by the Company, either solely or jointly with others (collectively,
"Developments"). All such Developments shall be the sole property of the
Company, and Executive hereby assigns to the Company, without further
compensation, all his right, title and interest in and to such Developments and
any and all related patents, patent applications, copyrights, copyright
applications, trademarks and trade names in the United States and elsewhere.
(b) Executive shall keep and maintain adequate and current written
records of all Developments (in the form of notes, sketches, drawings and as may
be specified by the Company), which records shall be available to and remain the
sole property of the Company at all times.
(c) Executive shall assist the Company in obtaining and enforcing patent,
copyright and other forms of legal protection for the Developments in any
country. Upon request, Executive shall sign all applications, assignments,
instruments and papers and perform all acts necessary or desired by the Company
and to enable the Company its successors, assigns and nominees, to secure and
enjoy the full exclusive benefits and advantages thereof.
(d) Executive understands that Executive's obligations under this section
will continue after the termination of his employment with the Company and that,
whether during or after his employment, Executive shall perform such obligations
without further compensation, except for reimbursement of expenses incurred at
the request of the Company.
Page 8
<PAGE>
8. Assignment and Transfer.
-----------------------
(a) Company. This Agreement shall inure to the benefit of and be
-------
enforceable by, and may be assigned by the Company to, any purchaser of all or
substantially all of the Company's business or assets, any successor to the
Company or any assignee thereof (whether direct or indirect, by purchase,
merger, consolidation or otherwise). The Company will require any such
purchaser, successor or assignee to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such purchase, succession or assignment had taken
place.
(b) Executive. Executive's rights and obligations under this Agreement
---------
shall not be transferable by Executive by assignment or otherwise, and any
purported assignment, transfer or delegation thereof shall be void; provided,
however, that if Executive shall die, all amounts then payable to Executive
hereunder shall be paid in accordance with the terms of this Agreement to
Executive's devisee, legatee or other designee or, if there be no such designee,
to Executive's estate.
9. Miscellaneous.
-------------
(a) Other Obligations. Executive represents and warrants that he is
-----------------
not a party to any other employment agreement and that neither Executive's
employment with the Company nor Executive's performance of Executive's
obligations hereunder will conflict with or violate or otherwise are
inconsistent with any other agreements to which Executive is or has been a party
or with any other obligations, legal or otherwise, which Executive may have.
(b) Nondisclosure; Prior Employers. Executive will not disclose to the
------------------------------
Company, or use, or induce the Company to use, any proprietary information,
trade secrets or confidential business information of others. Executive
represents and warrants that Executive has returned all property, proprietary
information, trade secrets and confidential business information belonging to
all prior employers.
(c) Cooperation. Following termination of employment with the Company,
-----------
Executive shall cooperate with the Company, as requested by the Company, to
affect a transition of Executive's responsibilities and to ensure that the
Company is aware of all matters being handled by Executive.
(d) Protection of Reputation. During the Agreement Term and thereafter,
------------------------
Executive agrees that he will take no action which is intended, or could
reasonably be expected, to harm the Company or its reputation or which could
reasonably be expected to lead to unwanted or unfavorable publicity to the
Company.
Page 9
<PAGE>
(e) Governing Law; Arbitration.
--------------------------
(i) Governing Law. This Agreement, including the validity,
-------------
interpretation, construction and performance of this Agreement, shall be
governed by and construed in accordance with the laws of the State of New Jersey
applicable to agreements made and to be performed in such state without regard
to such states conflicts of law principles.
(ii) Arbitration. Subject to Section 9(k) hereof, any controversy or
-----------
claim which arises out of or relating to this Agreement, or the breach thereof
shall be settled by arbitration in accordance with the Rules of the American
Arbitration Association then in effect. The controversy or claim shall be
submitted to three arbitrators, one of whom shall be chosen by the Employee, one
of whom shall be chosen by the Company, and one of whom shall be chosen by the
two so selected. The party desiring arbitration shall give written notice to the
other party of its desire to arbitrate the particular matter in question, naming
the arbitrator selected by it. If the other party shall fail within a period of
15 days after such notice shall have been given to reply in writing naming the
arbitrator chosen as above provided, or if the two arbitrators selected by the
parties shall fail within 15 days after their selection to agree upon the third
arbitrator, then either party may apply to the American Arbitration Association
for the appointment of an arbitrator to fill the place so remaining vacant. The
decision of any two of the arbitrators shall be final and binding upon the
parties hereto. Judgement upon the award rendered by the arbitrators may be
entered in any court having jurisdiction thereof. The proceedings shall be held
in New York, New York. The arbitrators shall have no power to award punitive or
exemplary damages or to ignore or vary the terms of this Agreement, and shall be
bound to apply controlling law. Arbitration shall be binding and the remedy for
the settlement of the controversy or claims (except as set forth in the
preceding paragraph of this Section).
(f) Entire Agreement. This Agreement (including the Exhibits hereto)
----------------
contains the entire agreement and understanding between the parties hereto in
respect of the subject matter hereof and supersedes, cancels and annuls any
prior or contemporaneous written or oral agreements, understandings, commitments
and practices between them respecting the subject matter hereof, including all
prior employment agreements, if any, between the Company and Executive, which
agreement(s) hereby are terminated and shall be of no further force or effect.
(g) Amendment. This Agreement may be amended only by a writing which
---------
makes express reference to this Agreement as the subject of such amendment and
which is signed by Executive and, on behalf of the Company, by its duly
authorized officer.
(h) Severability. If any term, provision, covenant or condition of this
------------
Agreement or part thereof, or the application thereof to any person, place or
circumstance, shall be held to be invalid, unenforceable or void, the remainder
of this Agreement and such term, provision, covenant or condition shall remain
in full force and effect, and any such invalid, unenforceable or void term,
provision, covenant or condition shall be deemed, without further action on the
part of the parties hereto, modified, amended and limited to the extent
necessary to render the same and the remainder of this Agreement valid,
enforceable and lawful. In this regard, Executive
Page 10
<PAGE>
acknowledges that the provisions of Sections 4 and 6 are reasonable and
necessary for the protection of the Company.
(i) Construction. The headings and captions of this Agreement are
------------
provided for convenience only and are intended to have no effect in construing
or interpreting this Agreement. The language in all parts of this Agreement
shall be in all cases construed according to its fair meaning and not strictly
for or against the Company or Executive. The use herein of the word "including,"
when following any general provision, sentence, clause, statement, term or
matter, shall be deemed to mean "including, without limitation". As used herein,
"Company" shall mean the Company and its subsidiaries and any purchaser of,
successor to or assignee (whether direct or indirect, by purchase, merger,
consolidation or otherwise) of all or substantially all of the Company's
business or assets which is obligated to perform this Agreement by operation of
law. As used herein, the words "day" or "days" shall mean a calendar day or
days.
(j) Nonwaiver. Neither any course of dealing nor any failure or
---------
neglect of either party hereto in any instance to exercise any right, power or
privilege hereunder or under law shall constitute a waiver of any other right,
power or privilege or of the same right, power or privilege in any other
instance. All waivers by either party hereto must be contained in a written
instrument signed by the party to be charged and, in the case of the Company, by
its duly authorized officer.
(k) Remedies for Breach. The parties hereto agree that Executive is
-------------------
obligated under this Agreement to render personal services during the Agreement
Term of a special, unique, unusual, extraordinary and intellectual character,
thereby giving this Agreement peculiar value, and, in the event of a breach or
threatened breach of any covenant of Executive herein, the injury or imminent
injury to the value and the goodwill of the Company's business could not be
reasonably or adequately compensated in damages in an action at law.
Accordingly, Executive expressly acknowledges that the Company shall be entitled
to specific performance, injunctive relief or any other equitable remedy against
Executive, without the posting of a bond, in the event of any breach or
threatened breach of any provision of this Agreement by Executive (including
Sections 4 and 6 hereof). Without limiting the generality of the foregoing, if
Executive breaches Sections 4 or 6 hereof, such breach will entitle the Company
to enjoin Executive from disclosing any Confidential Information to any
Competing Business, to enjoin such Competing Business from receiving Executive
or using any such Confidential Information and/or to enjoin Executive from
rendering personal services to or in connection with such Competing Business.
The rights and remedies of the parties hereto are cumulative and shall not be
exclusive, and each such party shall be entitled to pursue all legal and
equitable rights and remedies and to secure performance of the obligations and
duties of the other under this Agreement, and the enforcement of one or more of
such rights and remedies by a party shall in no way preclude such party from
pursuing, at the same time or subsequently, any and all other rights and
remedies available to it.
(l) Notices. Any notice, request, consent or approval required or
-------
permitted to be given under this Agreement or pursuant to law shall be
sufficient if in writing, and if and when sent by certified or registered mail,
return receipt requested, with postage prepaid, to Executive's residence (as
reflected in the Company's records or as otherwise designated by Executive on
Page 11
<PAGE>
thirty (30) days' prior written notice to the Company) or to the Company's
principal executive office, attention: Chairman of the Board (with copies to the
General Counsel), as the case may be. All such notices, requests, consents and
approvals shall be effective upon being deposited in the United States mail.
However, the time period in which a response thereto must be given shall
commence to run from the date of receipt on the return receipt of the notice,
request, consent or approval by the addressee thereof. Rejection or other
refusal to accept, or the inability to deliver because of changed address of
which no notice was given as provided herein, shall be deemed to be receipt of
the notice, request, consent or approval sent.
(m) Assistance in Proceedings, Etc. Executive shall, without additional
------------------------------
compensation, during and after expiration of the Agreement Term, upon reasonable
notice, furnish such information and proper assistance to the Company as may
reasonably be required by the Company in connection with any legal or quasi-
legal proceeding, including any external or internal investigation, involving
the Company or any of its affiliates or in which any of them is, or may become,
a party.
(n) Survival. Cessation or termination of Executive's employment with
--------
the Company shall not result in termination of this Agreement. The respective
obligations of Executive and rights and benefits afforded to the Company as
provided in this Agreement shall survive cessation or termination of Executive's
employment hereunder. This Agreement shall not terminate upon, and shall remain
in full force and effect following, expiration of the Agreement Term and all
rights and obligations of the parties hereto as and to the extent provided
herein shall survive such expiration.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed
on its behalf by an officer thereunto duly authorized and Executive has duly
executed this Agreement, all as of the date and year first written above.
LIFE MEDICAL SCIENCES, INC.
By: /s/ Robert P. Hickey
--------------------------------------------------
Name: Robert P. Hickey
Title: President & CEO
/s/ R.G. Conway
--------------------------------------------------
ROBERT G. CONWAY
Page 12
<PAGE>
Exhibit
- -------
Title: Vice President and Chief Financial Officer
Persons to Whom Executive Shall Report: President and Chief Executive Officer
<PAGE>
Exhibit 10.54
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED 1992 STOCK OPTION PLAN
(INCENTIVE STOCK OPTION)
AGREEMENT entered into as of the date set forth on the signature page
hereto by and between Life Medical Sciences, Inc., a Delaware corporation, with
a principal place of business at 379 Thornall Street, Edison, New Jersey
(together with its subsidiaries, if any, the "Company"), and the undersigned
(the "Optionee").
WHEREAS, the Company desires to grant to the Optionee an incentive stock
option under the Company's Amended and Restated 1992 Stock Option Plan (the
"Plan") to acquire shares of the Company's Common Stock, $.001 par value (the
"Shares"); and
WHEREAS, the Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option.
---------------
The Company hereby grants to the Optionee an incentive stock option under
the Plan (the "Option") to purchase all or any part of an aggregate of the
number of Shares set forth on the signature page to this Agreement on the terms
and conditions hereinafter set forth. The Option shall be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
--------------
The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the dollar amount per share set forth on the signature page to this
Agreement.
3. Time of Vesting and Exercise of Option
--------------------------------------
Subject to Section 4 hereof, the Option shall vest and become
exercisable on the dates and as to the installment amounts set forth on the
signature page to this Agreement. To the extent the Option (or any portion
thereof) is not exercised by the Optionee when it becomes exercisable, it
shall not expire, but shall be carried forward and shall be exercisable, on
a cumulative basis, until the Expiration Date (as hereinafter defined) or
until earlier termination as hereinafter provided.
<PAGE>
4. Term, Extent of Exercisability
------------------------------
(a) Term.
(i) The Option shall expire as to each installment amount
on the date set forth next to each such amount on the signature
page to this Agreement (the "Expiration Date"), subject to
earlier termination as herein provided.
(ii) Except as otherwise provided in this Section 4, if the
Optionee ceases to perform services for the Company, the Option
shall terminate on the earlier of the last day of the third month
or ninety days after the date such Optionee ceases to perform
services for the Company, or on the date on which the Option
expires by its terms, whichever occurs first.
(iii) If the Optionee ceases to perform services for the
Company because of dismissal for cause or because the Optionee is
in breach of any employment agreement, such Option will terminate
on the date the Optionee ceases to perform services for the
Company.
(iv) If the Optionee ceases to perform services for the
Company because the Optionee has become permanently disabled
(within the meaning of Section 22(e)(3) of the Code), such Option
shall terminate on the last day of the twelfth month from the
date such Optionee ceases to perform services for the Company, or
on the date on which the Option expires by its terms, whichever
occurs first.
(v) In the event of the death of the Optionee, the Option
granted to such Optionee shall terminate on the last day of the
twelfth month from the date of death, or on the date on which the
Option expires by its terms, whichever occurs first.
(b) Extent of Exercisability.
------------------------
(i) Except as provided below, if the Optionee ceases to
perform services for the Company, the Option shall be exercisable
only to the extent that the right to purchase Shares under such
Option has accrued and is in effect on the date such Optionee
ceases to perform services for the Company.
(ii) If the Optionee ceases to perform services for the
Company because he or she has become permanently disabled (within
the meaning of Section 22(e)(3) of the Code), the Option shall be
exercisable to the full number of Shares covered by such Option.
-2-
<PAGE>
(iii) In the event of the death of the Optionee, the Option
may be exercised with respect to the full number of Shares
covered thereby whether or not under the provisions of Section 3
hereof the Optionee was entitled to do so at the date of his or
her death, by the estate of such Optionee, or by any person or
persons who acquired the right to exercise such Option by bequest
or inheritance or by reason of the death of such Optionee.
5. Manner of Exercise of Option.
----------------------------
(a) To the extent that the right to exercise the Option has accrued
and is in effect, the Option may be exercised in full or in part by
giving written notice to the Company stating the number of Shares as
to which the Option is being exercised and accompanied by payment in
full for such Shares. No partial exercise may be made for less than
one hundred (100) full Shares of Common Stock. Payment shall be made
in accordance with the terms of the Plan. Upon such exercise, delivery
of a certificate for paid-up, non-assessable Shares shall be made at
the principal office of the Company to the person exercising the
Option, not less than thirty (30) and not more than ninety (90) days
from the date of receipt of the notice by the Company.
(b) The Company shall at all times during the term of the Option
reserve and keep available such number of Shares of its Common Stock
as will be sufficient to satisfy the requirements of the Option.
6. Non-Transferability.
-------------------
The right of the Optionee to exercise the Option shall not be
assignable or transferable by the Optionee otherwise than by will or the laws
or descent and distribution or pursuant to a domestic relations order as defined
in the Code or Title 1 of the Employee Retirement Income Security Act or the
rules thereunder, and the Option may be exercised during the lifetime of the
Optionee only by him or her. The Option shall be null and void and without
effect upon the bankruptcy of the Optionee or upon any attempted assignment or
transfer, except as herein provided, including without limitation any purported
assignment, whether voluntary or by operation of law, pledge, hypothecation or
other disposition contrary to the provisions hereof, or levy of execution,
attachment, trustee process or similar process, whether legal or equitable, upon
the Option.
7. Representation Letter and Investment Legend.
--------------------------------------------
In the event that for any reason the Shares to be issued upon exercise
of the Option shall not be effectively registered under the Securities Act of
1933 (" 1933 Act"), upon any date on which the Option is exercised in whole or
in part, the person exercising the Option shall give a written representation to
the Company in the form attached hereto as Exhibit 1 and the Company shall place
an "investment legend", so-called, as described in Exhibit 1, upon any
certificate for the Shares issued by reason of such exercise.
-3-
<PAGE>
8. Adjustments on Changes in Capitalization.
----------------------------------------
Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Option.
9. No Special Employment Rights.
----------------------------
Nothing contained in the Plan or this Option shall be construed or
deemed by any person under any circumstances to bind the Company to continue the
employment of the Optionee for the period within which this Option may be
exercised. However, during the period of the Optionee's employment, the Optionee
shall render diligently and faithfully the services which are assigned to the
Optionee from time to time by the Board of Directors or by the executive
officers of the Company and shall at no time take any action which directly or
indirectly would be inconsistent with the best interests of the Company.
10. Rights as a Stockholder.
-----------------------
The Optionee shall have no rights as a stockholder with respect to any
Shares which may be purchased by exercise of this Option unless and until a
certificate or certificates representing such Shares are duly issued and
delivered to the Optionee. Except as otherwise expressly provided in the Plan,
no adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.
11. Withholding Taxes.
------------------
Whenever Shares are to be issued upon exercise of this Option, the
Company shall have the right to require the Optionee to remit to the Company an
amount sufficient to satisfy all Federal, state and local withholding tax
requirements prior to the delivery of any certificate or certificates for the
Shares. The Company may agree to permit the Optionee to authorize the Company to
withhold Shares of Common Stock purchased upon exercise of the Option to satisfy
the above-mentioned withholding requirement; provided, however, no such
agreement may be made by an Optionee who is an officer or director within the
meaning of Section 16 of the Securities Exchange Act of 1934, as amended, except
pursuant to a standing election to so withhold Shares of Common Stock purchased
upon exercise of the Option, such election to be made in the form set forth in
Exhibit 2 hereto and to be made not less than six (6) months prior to such
exercise. Such election may be revoked only upon providing six (6) months prior
written notice to the Company.
12. Plan Provisions Control.
-----------------------
In the event of any inconsistency between the provisions of this
Agreement and the provisions of the Plan, the inconsistent provision(s) of this
Agreement shall be superseded by the Plan provision(s) to the extent necessary
to reconcile the inconsistency.
-4-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed, and the Optionee has hereunto set his or her hand, all as of the 28TH
DAY OF MAY, 1998.
LIFE MEDICAL SCIENCES, INC.
BY:
---------------------------------
Title: President & CEO
OPTIONEE:
PRINT Name: Mark Citron
------------------------
SIGNATURE: /s/ Mark Citron
-------------------------
ADDRESS: 8 WENDOVER ROAD
-----------------------------
MONTCLAIR NJ 07042
-------------------------------------
SOCIAL SECURITY NUMBER: 22-3 66 1470
-------------
OPTION INFORMATION
------------------
TOTAL NUMBER OF SHARES UNDERLYING OPTION: 15,000
PURCHASE PRICE PER SHARE: $ 2.00
VESTING & EXPIRATION SCHEDULE
------------------------------
VESTING DATE NUMBER OF SHARES EXPIRATION DATE
-------------- ------------------ ----------------
September 6, 1997 7,500 September 6, 2002
September 6, 1998 7,500 September 6, 2003
This agreement supercedes the previous agreement dated September 6, 1997.
-5-
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
Gentlemen:
In connection with the exercise by me of an option to purchase shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company"), I
hereby acknowledge that I have been informed as follows:
1. The shares of Common Stock of the Company to be issued to me pursuant
to the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held indefinitely unless the Shares are subsequently registered under the
Securities Act, or an exemption from such registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
Securities Act can be made only after the holding period provided by that Rule
has been satisfied, and, in any sale to which that Rule is not applicable,
registration or compliance with some other exemption under the Securities Act
will be required.
3. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.
In consideration of the issuance of certificates for the Shares to me, I
hereby represent and warrant that I am acquiring the Shares for my own account
for investment, and that I will not sell, pledge or transfer the Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and
warranty, I agree that there may be affixed to the certificates for the Shares
to be issued to me, and to all certificates issued hereafter representing the
Shares (until in the opinion of counsel, which opinion must be reasonably
satisfactory in form and substance to counsel for the Company, it is no longer
necessary or required) a legend as follows:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and were acquired by the
registered holder pursuant to a representation and warranty that such holder was
acquiring the Shares for his own account and for investment, with no intention
of transfer or disposition of the same in violation of the registration
requirements of that Act. These securities may not be sold, pledged, or
transferred in the absence of an effective registration statement under such
Act, or an opinion of counsel, which opinion is reasonably satisfactory to
counsel to the Company, to the effect that registration is not required under
such Act."
I further agree that the Company may place a stop transfer order with its
transfer agent,
-6-
<PAGE>
prohibiting the transfer of the Shares, so long as the legend remains on the
certificates representing the Shares.
Very truly yours,
/s/ Mark Citron
Dated: June 25, 98
-----------
-7-
<PAGE>
EXHIBIT 2
TO STOCK OPTION AGREEMENT
Gentlemen:
The undersigned Optionee hereby elects and agrees that, whenever the
undersigned exercises a stock option (including any options which now or may
hereafter be granted), Life Medical Sciences, Inc. (the "Company") shall
withhold from that exercise such number of Shares equal in value to the federal
and state withholding taxes due upon such exercise. The undersigned further
acknowledges and agrees that this election may not be revoked without six (6)
months' prior written notice to the Company.
OPTIONEE:
/s/ Mark Citron
--------------------------------
(Signature)
/s/ MARK CITRON
--------------------------------
(Print Name)
-8-
<PAGE>
Exhibit 10.55
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED 1992 STOCK OPTION PLAN
(non-qualified stock option)
AGREEMENT entered into as of the date set forth on the signature page
hereto by and between Life Medical Sciences, Inc., a Delaware corporation, with
a principal place of business at 379 Thomall Street, Edison, New Jersey
(together with its subsidiaries, if any, the "Company"), and the undersigned
(the "Optionee").
WHEREAS, the Company desires to grant to the Optionee a non-qualified stock
option under the Company's Amended and Restated 1992 Stock Option Plan (the
"Plan") to acquire shares of the Company's Common Stock, $.001 par value (the
"Shares"); and
WHEREAS, the Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option.
---------------
The Company hereby grants to the Optionee a non-qualified stock option
under the Plan (the "Option") to purchase all or any part of an aggregate of the
number of Shares set forth on the signature page to this Agreement on the terms
and conditions hereinafter set forth. The Option shall NOT be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
--------------
The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the dollar amount per share set forth on the signature page to this
Agreement.
3. Time of Vesting and Exercise of Option.
--------------------------------------
Subject to Section 4 hereof, the Option shall vest and become
exercisable on the dates and as to the installment amounts set forth on the
signature page to this Agreement. To the extent the Option (or any portion
thereof) is not exercised by the Optionee when it becomes exercisable, it shall
not expire, but shall be carried forward and shall be exercisable, on a
cumulative basis, until the Expiration Date (as hereinafter defined) or until
earlier termination as hereinafter provided.
<PAGE>
4. Term, Extent of Exercisability.
------------------------------
(a) Term.
(i) The Option shall expire as to each installment amount on
the date set forth next to each such amount on the signature page
to this Agreement (the "Expiration Date"), subject to earlier
termination as herein provided.
(ii) Except as otherwise provided in this Section 4, if the
Optionee ceases to perform services for the Company, the Option
shall terminate on the last day the Optionee ceases to perform
services for the Company.
(iii) If such termination to perform services is because of
dismissal for cause or because the Optionee is in breach of any
employment agreement, such Option will terminate on the date the
Optionee ceases to perform services for the Company.
(iv) If such termination to perform services is because the
Optionee has become permanently disabled (within the meaning of
Section 22(e)(3) of the Code), such Option shall terminate on the
last day of the twelfth month from the date such Optionee ceases
to perform services for the Company, or on the date on which the
Option expires by its terms, whichever occurs first.
(v) In the event of the death of the Optionee, the Option
granted to such Optionee shall terminate on the last day of the
twelfth month from the date of death, or on the date on which the
Option expires by its terms, whichever occurs first.
(b) Extent of Exercisability.
------------------------
(i) Except as provided below, if the Optionee ceases to perform
services for the Company, the Option shall be exercisable only to
the extent that the right to purchase Shares under such Option
has accrued and is in effect on the date such Optionee ceases to
perform services for the Company.
(ii) If the Optionee ceases to perform services for the Company
because he or she has become permanently disabled (within the
meaning of Section 22(e)(3) of the Code), the Option shall be
exercisable to the fall number of Shares covered by such Option.
(iii) In the event of the death of the Optionee, the Option may
be exercised with respect to the full number of Shares covered
thereby whether or not under the provisions of Section 3 hereof
the Optionee was entitled to do so at the date of his or her
death, by the estate of such Optionee, or by any person or
persons who acquired the right to exercise such Option by bequest
or inheritance or by reason of the death of such Optionee.
-2-
<PAGE>
5. Manner of Exercise of Option.
----------------------------
(a) To the extent that the right to exercise the Option has accrued
and is in effect, the Option may be exercised in full or in part by
giving written notice to the Company stating the number of Shares as
to which the Option is being exercised and accompanied by payment in
FULL for such Shares. No partial exercise may be made for less than
one hundred (100) full Shares of Common Stock. Payment shall be made
in accordance with the terms of the Plan. Upon such exercise, delivery
of a certificate for paid-up, non-assessable Shares shall be made at
the principal office of the Company to the person exercising the
Option, not less than thirty (30) and not more than ninety (90) days
from the date of receipt of the notice by the Company.
(b) The Company shall at all times during the term of the Option
reserve and keep available such number of Shares of its Common Stock
as will be sufficient to satisfy the requirements of the Option.
6. Non-Transferability.
-------------------
The right of the Optionee to exercise the Option shall not be
assignable or transferable by the Optionee otherwise than by will or the laws or
descent and distribution or pursuant to a domestic relations order as defined in
the Code or Title 1 of the Employee Retirement Income Security Act or the rules
thereunder, and the Option may be exercised during the lifetime of the Optionee
only by him or her. The Option shall be null and void and without effect upon
the bankruptcy of the Optionee or upon any attempted assignment or transfer,
except as herein provided, including without limitation any purported
assignment, whether voluntary or by operation of law, pledge, hypothecation or
other disposition contrary to the provisions hereof, or levy of execution,
attachment, trustee process or similar process, whether legal or equitable, upon
the Option.
7. Representation Letter and Investment Legend.
-------------------------------------------
In the event that for any reason the Shares to be issued upon exercise
of the Option shall not be effectively registered under the Securities Act of
1933 ("1933 Act"), upon any date on which the Option is exercised in whole or in
part, the person exercising the Option shall give a written representation to
the Company in the form attached hereto as Exhibit 1 and the Company shall place
an "investment legend", so-called, as described in Exhibit 1, upon any
certificate for the Shares issued by reason of such exercise.
8. Adjustments on Changes in Capitalization.
----------------------------------------
Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Option.
9. No Special Employment Rights.
----------------------------
-3-
<PAGE>
The provisions of this Section 9 are applicable only to Optionee's who
are employees of the Company. Nothing contained in the Plan or this Option shall
be construed or deemed by any person under any circumstances to bind the Company
to continue the employment of the Optionee for the period within which this
Option may be exercised. However, during the period of the Optionee's
employment, the Optionee shall render diligently and faithfully the services
which are assigned to the Optionee from time to time by the Board of Directors
or by the executive officers of the Company and shall at no time take any action
which directly or indirectly would be inconsistent with the best interests of
the Company.
10. Rights as a Stockholder.
-----------------------
The Optionee shall have no rights as a stockholder with respect to any
Shares which may be purchased by exercise of this Option unless and until a
certificate or certificates representing such Shares are duly issued and
delivered to the Optionee. Except as otherwise expressly provided in the Plan,
no adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.
11. Withholdinig Taxes.
------------------
Whenever Shares are to be issued upon exercise of this Option, the
Company shall have the right to require the Optionee to remit to the Company an
amount sufficient to satisfy all Federal, state and local withholding tax
requirements prior to the delivery of any certificate or certificates for the
Shares. The Company may agree to permit the Optionee to authorize the Company to
withhold Shares of Common Stock purchased upon exercise of the Option to satisfy
the above-mentioned withholding requirement; provided, however, no such
agreement may be made by an Optionee who is an officer or director within the
meaning of Section 16 of the Securities Exchange Act of 1934, as amended, except
pursuant to a standing election to so withhold Shares of Common Stock purchased
upon exercise of the Option, such election to be made in the form set forth in
Exhibit 2 hereto and to be made not less than six (6) months prior to such
exercise. Such election may be revoked only upon providing six (6) months prior
written notice to the Company.
12. Plan Provisions Control.
-----------------------
In the event of any inconsistency between the provisions of this
Agreement and the provisions of the Plan, the inconsistent provision(s) of this
Agreement shall be superseded by the Plan provision(s) to the extent necessary
to reconcile the inconsistency.
-4-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed, and the Optionee has hereunto set his or her hand, all as of the
28/th/ day of MAY, 1998.
LIFE MEDICAL SCIENCES, INC.
BY:
-------------------------------
Title: President & CEO
OPTIONEE
Print Name: Mark Citron
-----------------------
SIGN NAME: /s/ Mark Citron
------------------------
Address: 8 WENDOVER ROAD
--------------------------
MONTCLAIR NJ 07042
----------------------------------
Social Security Number: 223661470
-----------
OPTION INFORMATION
------------------
TOTAL NUMBER OF SHARES UNDERLYING OPTION: 30,000
PURCHASE PRICE PER SHARE: $ 2.00
VESTING & EXPIRATION SCHEDULE
-----------------------------
VESTING DATE NUMBER OF SHARES EXPIRATION DATE
- ------------ ---------------- ---------------
September 3, 1996 10,000 September 3, 2001
September 3, 1997 10,000 September 3, 2002
September 3, 1998 10,000 September 3, 2003
This agreement supercedes the previous agreement dated September 3, 1996.
-5-
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
--------------------------
Gentlemen:
In connection with the exercise by me of an option to purchase shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company"), I
hereby acknowledge that I have been informed as follows:
1. The shares of Common Stock of the Company to be issued to me pursuant
to the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held indefinitely unless the Shares are subsequently registered under the
Securities Act, or an exemption from such registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
Securities Act can be made only after the holding period provided by that Rule
has been satisfied, and, in any sale to which that Rule is not applicable,
registration or compliance with some other exemption under the Securities Act
will be required.
3. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.
In consideration of the issuance of certificates for the Shares to me, I
hereby represent and warrant that I am acquiring the Shares for my own account
for investment, and that I will not sell, pledge or transfer the Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and warranty,
I agree that there may be affixed to the certificates for the Shares to be
issued to me, and to all certificates issued hereafter representing the Shares
(until in the opinion of counsel, which opinion must be reasonably satisfactory
in form and substance to counsel for the Company, it is no longer necessary or
required) a legend as follows:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and were acquired by the
registered holder pursuant to a representation and warranty that such
holder was acquiring the Shares for his own account and for investment,
with no intention of transfer or disposition of the same in violation of
the registration requirements of that Act. These securities may not be
sold, pledged, or transferred in the absence of an effective registration
statement under such Act, or an opinion of counsel, which opinion is
reasonably satisfactory to counsel to the Company, to the effect that
registration is not required under such Act."
-6-
<PAGE>
I further agree that the Company may place a stop transfer order with its
transfer agent, prohibiting the transfer of the Shares, so long as the legend
remains on the certificates representing the Shares.
Very truly yours,
/s/ Mark Citron
Dated: JUNE 25, 98
------------
-7-
<PAGE>
EXHIBIT 2
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
The undersigned Optionee hereby elects and agrees that, whenever the
undersigned exercises a stock option (including any options which now or may
hereafter be granted), Life Medical Sciences, Inc. (the "Company") shall
withhold from that exercise such number of Shares equal in value to the federal
and state withholding taxes due upon such exercise. The undersigned further
acknowledges and agrees that this election may not be revoked without six (6)
months' prior written notice to the Company.
OPTIONEE:
/s/ Mark Citron
-----------------------------------
(Signature)
/s/ MARK CITRON
------------------------------------
(Print Name)
-8-
<PAGE>
EXHIBIT 10.56
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED 1992 STOCK OPTION PLAN
(non-qualified stock option)
AGREEMENT entered into as of the date set forth on the signature page hereto
by and between Life Medical Sciences, Inc., a Delaware corporation, with a
principal place of business at 379 Thornall Street, Edison, New Jersey (together
with its subsidiaries, if any, the "Company"), and the undersigned (the
"Optionee").
WHEREAS, the Company desires to grant to the Optionee a non-qualified stock
option under the Company's Amended and Restated 1992 Stock Option Plan (the
"Plan") to acquire shares of the Company's Common Stock, $.001 par value (the
"Shares"); and
WHEREAS, the Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option.
---------------
The Company hereby grants to the Optionee a non-qualified stock option under
the Plan (the "Option") to purchase all or any part of an aggregate of the
number of Shares set forth on the signature page to this Agreement on the terms
and conditions hereinafter set forth. The Option shall NOT be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
--------------
The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the dollar amount per share set forth on the signature page to this
Agreement.
3. Time of Vesting and Exercise of Option.
--------------------------------------
Subject to Section 4 hereof, the Option shall vest and become exercisable
on the dates and as to the installment amounts set forth on the signature page
to this Agreement. To the extent the Option (or any portion thereof) is not
exercised by the Optionee when it becomes exercisable, it shall not expire, but
shall be carried forward and shall be exercisable, on a cumulative basis, until
the Expiration Date (as hereinafter defined) or until earlier termination as
hereinafter provided.
<PAGE>
4. Term; Extent of Exercisability.
------------------------------
(a) Term.
(i) The Option shall expire as to each installment amount on the
date set forth next to each such amount on the signature page to this
Agreement (the "Expiration Date"), subject to earlier termination as
herein provided.
(ii) Except as otherwise provided in this Section 4, if the Optionee
ceases to perform services for the Company, the Option shall terminate
on the earlier of the last day of the third month or ninety days after
the date such Optionee ceases to perform services for the Company, or
on the date on which the Option expires by its terms, whichever occurs
first.
(iii) If such termination to perform services is because of dismissal
for cause or because the Optionee is in breach of any employment
agreement, such Option will terminate on the date the Optionee ceases
to perform services for the Company.
(iv) If such termination to perform services is because the Optionee
has become permanently disabled (within the meaning of Section
22(e)(3) of the Code), such Option shall terminate on the last day of
the twelfth month from the date such Optionee ceases to perform
services for the Company, or on the date on which the Option expires
by its terms, whichever occurs first.
(v) In the event of the death of the Optionee, the Option granted
to such Optionee shall terminate on the last day of the twelfth month
from the date of death, or on the date on which the Option expires by
its terms, whichever occurs first.
(b) Extent of Exercisability.
------------------------
(i) Except as provided below, if the Optionee ceases to perform
services for the Company, the Option shall be exercisable only to the
extent that the right to purchase Shares under such Option has accrued
and is in effect on the date such Optionee ceases to perform services
for the Company.
(ii) If the Optionee ceases to perform services for the Company
because he or she has become permanently disabled (within the meaning
of Section 22(e)(3) of the Code), the Option shall be exercisable to
the full number of Shares covered by such Option.
-2-
<PAGE>
(iii) In the event of the death of the Optionee, the Option may be
exercised with respect to the full number of Shares covered thereby
whether or not under the provisions of Section 3 hereof the Optionee
was entitled to do so at the date of his or her death, by the estate
of such Optionee, or by any person or persons who acquired the right
to exercise such Option by bequest or inheritance or by reason of the
death of such Optionee.
5. Manner of Exercise of Option.
----------------------------
(a) To the extent that the right to exercise the Option has accrued and is
in effect, the Option may be exercised in full or in part by giving written
notice to the Company stating the number of Shares as to which the Option
is being exercised and accompanied by payment in full for such Shares. No
partial exercise may be made for less than one hundred (100) full Shares of
Common Stock. Payment shall be made in accordance with the terms of the
Plan. Upon such exercise, delivery of a certificate for paid-up, non-
assessable Shares shall be made at the principal office of the Company to
the person exercising the Option, not less than thirty (30) and not more
than ninety (90) days from the date of receipt of the notice by the
Company.
(b) The Company shall at all times during the term of the Option reserve
and keep available such number of Shares of its Common Stock as will be
sufficient to satisfy the requirements of the Option.
6. Non-Transferability.
-------------------
The right of the Optionee to exercise the Option shall not be assignable or
transferable by the Optionee otherwise than by will or the laws or descent and
distribution or pursuant to a domestic relations order as defined in the Code or
Title 1 of the Employee Retirement Income Security Act or the rules thereunder,
and the Option may be exercised during the lifetime of the Optionee only by him
or her. The Option shall be null and void and without effect upon the bankruptcy
of the Optionee or upon any attempted assignment or transfer, except as herein
provided, including without limitation any purported assignment, whether
voluntary or by operation of law, pledge, hypothecation or other disposition
contrary to the provisions hereof, or levy of execution, attachment, trustee
process or similar process, whether legal or equitable, upon the Option.
7. Representation Letter and Investment Legend.
-------------------------------------------
In the event that for any reason the Shares to be issued upon exercise of
the Option shall not be effectively registered under the Securities Act of 1933
(" 1933 Act"), upon any date on which the Option is exercised in whole or in
part, the person exercising the Option shall give a written representation to
the Company in the form attached hereto as Exhibit 1 and
-3-
<PAGE>
the Company shall place an "investment legend", so-called, as described in
Exhibit 1, upon any certificate for the Shares issued by reason of such
exercise.
8. Adjustments on Changes in Capitalization.
----------------------------------------
Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Option.
9. No Special Employment Rights.
----------------------------
The provisions of this Section 9 are applicable only to Optionee's who are
employees of the Company. Nothing contained in the Plan or this Option shall be
construed or deemed by any person under any circumstances to bind the Company to
continue the employment of the Optionee for the period within which this Option
may be exercised. However, during the period of the Optionee's employment, the
Optionee shall render diligently and faithfully the services which are assigned
to the Optionee from time to time by the Board of Directors or by the executive
officers of the Company and shall at no time take any action which directly or
indirectly would be inconsistent with the best interests of the Company.
10. Rights as a Stockholder.
-----------------------
The Optionee shall have no rights as a stockholder with respect to any
Shares which may be purchased by exercise of this Option unless and until a
certificate or certificates representing such Shares are duly issued and
delivered to the Optionee. Except as otherwise expressly provided in the Plan,
no adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.
11. Withholding Taxes.
-----------------
Whenever Shares are to be issued upon exercise of this Option, the
Company shall have the right to require the Optionee to remit to the Company an
amount sufficient to satisfy all Federal, state and local withholding tax
requirements prior to the delivery of any certificate or certificates for the
Shares. The Company may agree to permit the Optionee to authorize the Company to
withhold Shares of Common Stock purchased upon exercise of the Option to satisfy
the above-mentioned withholding requirement; provided, however, no such
agreement may be made by an Optionee who is an officer or director within the
meaning of Section 16 of the Securities Exchange Act of 1934, as amended, except
pursuant to a standing election to so withhold Shares of Common Stock purchased
upon exercise of the Option, such election to be made in the form set forth in
Exhibit 2 hereto and to be made not less than six (6) months prior to such
exercise. Such election may be revoked only upon providing six (6) months prior
written notice to the Company.
-4-
<PAGE>
12. Plan Provisions Control.
-----------------------
In the event of any inconsistency between the provisions of this
Agreement and the provisions of the Plan, the inconsistent provision(s) of this
Agreement shall be superseded by the Plan provision(s) to the extent necessary
to reconcile the inconsistency.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed,
and the Optionee has hereunto set his or her hand, all as of the 1st day of
July, 1998.
LIFE MEDICAL SCIENCES, INC.
By: /s/ Robert G. Conway
-------------------------------------------
OPTIONEE
Print Name: Robert G. Conway
------------------------------------
Sign Name: /s/ Robert G. Conway
------------------------------------
OPTION INFORMATION
------------------
Total Number of Shares Underlying Option: 75,000
Purchase Price Per Share: $ 1.40
VESTING & EXPIRATION SCHEDULE
-----------------------------
Vesting Date Number of Shares Expiration Date
- ------------ ---------------- ---------------
July 1, 1998 25,000 July 1, 2005
July 1, 1999 25,000 July 1, 2006
July 1, 2000 25,000 July 1, 2007
-5-
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
In connection with the exercise by me of an option to purchase shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company"), I
hereby acknowledge that I have been informed as follows:
1. The shares of Common Stock of the Company to be issued to me pursuant to
the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held indefinitely unless the Shares are subsequently registered under the
Securities Act, or an exemption from such registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
Securities Act can be made only after the holding period provided by that Rule
has been satisfied, and, in any sale to which that Rule is not applicable,
registration or compliance with some other exemption under the Securities Act
will be required.
3. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.
In consideration of the issuance of certificates for the Shares to me, I
hereby represent and warrant that I am acquiring the Shares for my own account
for investment, and that I will not sell, pledge or transfer the Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and warranty,
I agree that there may be affixed to the certificates for the Shares to be
issued to me, and to all certificates issued hereafter representing the Shares
(until in the opinion of counsel, which opinion must be reasonably satisfactory
in form and substance to counsel for the Company, it is no longer necessary or
required) a legend as follows:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and were acquired by the
registered holder pursuant to a representation and warranty that such
holder was acquiring the Shares for his own account and for investment,
with no intention of transfer or disposition of the same in violation of
the registration requirements of that Act. These securities may not be
sold, pledged, or transferred in the absence of an effective registration
statement under such Act, or an opinion of counsel, which opinion is
reasonably satisfactory to counsel to the Company, to the effect that
registration is not required under such Act."
-6-
<PAGE>
I further agree that the Company may place a stop transfer order with its
transfer agent, prohibiting the transfer of the Shares, so long as the legend
remains on the certificates representing the Shares.
Very truly yours,
/s/ Robert G. Conway
Dated: _____________
-7-
<PAGE>
EXHIBIT 2
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
The undersigned Optionee hereby elects and agrees that, whenever the
undersigned exercises a stock option (including any options which now or may
hereafter be granted), Life Medical Sciences, Inc. (the "Company") shall
withhold from that exercise such number of Shares equal in value to the federal
and state withholding taxes due upon such exercise. The undersigned further
acknowledges and agrees that this election may not be revoked without six (6)
months' prior written notice to the Company.
OPTIONEE:
/s/ R. G. Conway
-------------------------------------------------
(Signature)
Robert G. Conway
-------------------------------------------------
(Print Name)
-8-
<PAGE>
Exhibit 10.57
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED 1992 STOCK OPTION PLAN
(non-qualified stock option)
AGREEMENT entered into as of the date set forth on the signature page hereto
by and between Life Medical Sciences, Inc., a Delaware corporation, with a
principal place of business at 214 Carnegie Center in Princeton, New Jersey
(together with its subsidiaries, if any, the "Company"), and the undersigned
(the "Optionee").
WHEREAS, the Company desires to grant to the Optionee a non-qualified stock
option under the Company's Amended and Restated 1992 Stock Option Plan (the
"Plan") to acquire shares of the Company's Common Stock, $.001 par value (the
"Shares"); and
WHEREAS, the Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option.
---------------
The Company hereby grants to the Optionee a non-qualified stock option under
the Plan (the "Option") to purchase all or any part of an aggregate of the
number of Shares set forth on the signature page to this Agreement on the terms
and conditions hereinafter set forth. The Option shall NOT be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
--------------
The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the dollar amount per share set forth on the signature page to this
Agreement.
3. Time of Vesting and Exercise of Option.
--------------------------------------
Subject to Section 4 hereof, the Option shall vest and become exercisable on
the dates and as to the installment amounts set forth on the signature page to
this Agreement. To the extent the Option (or any portion thereof) is not
exercised by the Optionee when it becomes exercisable, it shall not expire, but
shall be carried forward and shall be exercisable, on a cumulative basis, until
the Expiration Date (as hereinafter defined) or until earlier termination as
hereinafter provided.
<PAGE>
4. Term; Extent of Exercisability.
------------------------------
(a) Term.
(i) The Option shall expire as to each installment amount on the date
set forth next to each such amount on the signature page to this
Agreement (the "Expiration Date"), subject to earlier termination as
herein provided.
(ii) Except as otherwise provided in this Section 4, if the Optionee
ceases to perform services for the Company, the Option shall terminate
on the earlier of the last day of the third month or ninety days after
the date such Optionee ceases to perform services for the Company, or
on the date on which the Option expires by its terms, whichever occurs
first.
(iii) If such termination to perform services is because of dismissal
for cause or because the Optionee is in breach of any employment
agreement, such Option will terminate on the date the Optionee ceases
to perform services for the Company.
(iv) If such termination to perform services is because the Optionee
has become permanently disabled (within the meaning of Section
22(e)(3) of the Code), such Option shall terminate on the last day of
the twelfth month from the date such Optionee ceases to perform
services for the Company, or on the date on which the Option expires
by its terms, whichever occurs first.
(v) In the event of the death of the Optionee, the Option granted to
such Optionee shall terminate on the last day of the twelfth month
from the date of death, or on the date on which the Option expires by
its terms, whichever occurs first.
(b) Extent of Exercisability.
------------------------
(i) Except as provided below, if the Optionee ceases to perform
services for the Company, the Option shall be exercisable only to the
extent that the right to purchase Shares under such Option has accrued
and is in effect on the date such Optionee ceases to perform services
for the Company.
(ii) If the Optionee ceases to perform services for the Company
because he or she has become permanently disabled (within the meaning
of Section 22(e)(3) of the Code), the Option shall be exercisable to
the full number of Shares covered by such Option.
-2-
<PAGE>
(iii) In the event of the death of the Optionee, the Option may be
exercised with respect to the full number of Shares covered thereby
whether or not under the provisions of Section 3 hereof the Optionee
was entitled to do so at the date of his or her death, by the estate
of such Optionee, or by any person or persons who acquired the right
to exercise such Option by bequest or inheritance or by reason of the
death of such Optionee.
5. Manner of Exercise of Option.
----------------------------
(a) To the extent that the right to exercise the Option has accrued and is
in effect, the Option may be exercised in full or in part by giving written
notice to the Company stating the number of Shares as to which the Option
is being exercised and accompanied by payment in full for such Shares. No
partial exercise may be made for less than one hundred (100) full Shares of
Common Stock. Payment shall be made in accordance with the terms of the
Plan. Upon such exercise, delivery of a certificate for paid-up, non-
assessable Shares shall be made at the principal office of the Company to
the person exercising the Option, not less than thirty (30) and not more
than ninety (90) days from the date of receipt of the notice by the
Company.
(b) The Company shall at all times during the term of the Option reserve
and keep available such number of Shares of its Common Stock as will be
sufficient to satisfy the requirements of the Option.
6. Non-Transferability.
-------------------
The right of the Optionee to exercise the Option shall not be assignable or
transferable by the Optionee otherwise than by will or the laws or descent and
distribution or pursuant to a domestic relations order as defined in the Code or
Title 1 of the Employee Retirement Income Security Act or the rules thereunder,
and the Option may be exercised during the lifetime of the Optionee only by him
or her. The Option shall be null and void and without effect upon the bankruptcy
of the Optionee or upon any attempted assignment or transfer, except as herein
provided, including without limitation any purported assignment, whether
voluntary or by operation of law, pledge, hypothecation or other disposition
contrary to the provisions hereof, or levy of execution, attachment, trustee
process or similar process, whether legal or equitable, upon the Option.
7. Representation Letter and Investment Legend.
-------------------------------------------
In the event that for any reason the Shares to be issued upon exercise of the
Option shall not be effectively registered under the Securities Act of 1933 ("
1933 Act"), upon any date on which the Option is exercised in whole or in part,
the person exercising the Option shall give a written representation to the
Company in the form attached hereto as Exhibit 1 and
-3-
<PAGE>
the Company shall place an "investment legend", so-called, as described in
Exhibit 1, upon any certificate for the Shares issued by reason of such
exercise.
8. Adjustments on Changes in Capitalization.
----------------------------------------
Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Option.
9. No Special Employment Rights.
----------------------------
The provisions of this Section 9 are applicable only to Optionees who are
employees of the Company. Nothing contained in the Plan or this Option shall be
construed or deemed by any person under any circumstances to bind the Company to
continue the employment of the Optionee for the period within which this Option
may be exercised. However, during the period of the Optionee's employment, the
Optionee shall render diligently and faithfully the services which are assigned
to the Optionee from time to time by the Board of Directors or by the executive
officers of the Company and shall at no time take any action which directly or
indirectly would be inconsistent with the best interests of the Company.
10. Rights as a Stockholder.
-----------------------
The Optionee shall have no rights as a stockholder with respect to any Shares
which may be purchased by exercise of this Option unless and until a certificate
or certificates representing such Shares are duly issued and delivered to the
Optionee. Except as otherwise expressly provided in the Plan, no adjustment
shall be made for dividends or other rights for which the record date is prior
to the date such stock certificate is issued.
11. Withholding Taxes.
-----------------
Whenever Shares are to be issued upon exercise of this Option, the Company
shall have the right to require the Optionee to remit to the Company an amount
sufficient to satisfy all Federal, state and local withholding tax requirements
prior to the delivery of any certificate or certificates for the Shares. The
Company may agree to permit the Optionee to authorize the Company to withhold
Shares of Common Stock purchased upon exercise of the Option to satisfy the
above-mentioned withholding requirement; provided, however, no such agreement
may be made by an Optionee who is an officer or director within the meaning of
Section 16 of the Securities Exchange Act of 1934, as amended, except pursuant
to a standing election to so withhold Shares of Common Stock purchased upon
exercise of the Option, such election to be made in the form set forth in
Exhibit 2 hereto and to be made not less than six (6) months prior to such
exercise. Such election may be revoked only upon providing six (6) months prior
written notice to the Company.
-4-
<PAGE>
12. Plan Provisions Control.
-----------------------
In the event of any inconsistency between the provisions of this Agreement and
the provisions of the Plan, the inconsistent provision(s) of this Agreement
shall be superseded by the Plan provision(s) to the extent necessary to
reconcile the inconsistency.
-5-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed, and
the Optionee has hereunto set his or her hand, all as of the 28th day of May,
1998.
LIFE MEDICAL SCIENCES, INC.
By: Herbert Moskowitz
--------------------------------------
OPTIONEE
Print Name: Robert P. Hickey
-------------------------------
Sign Name: /s/ Robert P. Hickey
-------------------------------
OPTION INFORMATION
------------------
Total Number of Shares Underlying Option: 100,000
Purchase Price Per Share: $1.31
VESTING & EXPIRATION SCHEDULE
-----------------------------
Vesting Date Number of Shares Expiration Date
-------------- ---------------- ---------------
May 28, 1998 50,000 May 28, 2005
May 28, 1999 50,000 May 28, 2006
-6-
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
In connection with the exercise by me of an option to purchase shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company"), I
hereby acknowledge that I have been informed as follows:
1. The shares of Common Stock of the Company to be issued to me pursuant to
the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held indefinitely unless the Shares are subsequently registered under the
Securities Act, or an exemption from such registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
Securities Act can be made only after the holding period provided by that Rule
has been satisfied, and, in any sale to which that Rule is not applicable,
registration or compliance with some other exemption under the Securities Act
will be required.
3. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.
In consideration of the issuance of certificates for the Shares to me, I
hereby represent and warrant that I am acquiring the Shares for my own account
for investment, and that I will not sell, pledge or transfer the Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and warranty,
I agree that there may be affixed to the certificates for the Shares to be
issued to me, and to all certificates issued hereafter representing the Shares
(until in the opinion of counsel, which opinion must be reasonably satisfactory
in form and substance to counsel for the Company, it is no longer necessary or
required) a legend as follows:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and were acquired by the
registered holder pursuant to a representation and warranty that such
holder was acquiring the Shares for his own account and for investment,
with no intention of transfer or disposition of the same in violation of
the registration requirements of that Act. These securities may not be
sold, pledged, or transferred in the absence of an effective registration
statement under such Act, or an opinion of counsel, which opinion is
reasonably satisfactory to counsel to the Company, to the effect that
registration is not required under such Act."
-7-
<PAGE>
I further agree that the Company may place a stop transfer order with its
transfer agent, prohibiting the transfer of the Shares, so long as the legend
remains on the certificates representing the Shares.
Very truly yours,
/s/ Robert P. Hickey
Dated: 6/30/98
-------
-8-
<PAGE>
Exhibit 10.58
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED 1992 STOCK OPTION PLAN
(non-qualified stock option)
AGREEMENT entered into as of the date set forth on the signature page hereto
by and between Life Medical Sciences, Inc., a Delaware corporation, with a
principal place of business at 379 Thornall Street, Edison, New Jersey (together
with its subsidiaries, if any, the "Company"), and the undersigned (the
"Optionee").
WHEREAS, the Company desires to grant to the Optionee a non-qualified stock
option under the Company's Amended and Restated 1992 Stock Option Plan (the
"Plan") to acquire shares of the Company's Common Stock, $.001 par value (the
"Shares"); and
WHEREAS, the Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option.
---------------
The Company hereby grants to the Optionee a non-qualified stock option under
the Plan (the "Option") to purchase all or any part of an aggregate of the
number of Shares set forth on the signature page to this Agreement on the terms
and conditions hereinafter set forth. The Option shall NOT be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
--------------
The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the dollar amount per share set forth on the signature page to this
Agreement.
3. Time of Vesting and Exercise of Option.
--------------------------------------
Subject to Section 4 hereof, the Option shall vest and become exercisable on
the dates and as to the installment amounts set forth on the signature page to
this Agreement. To the extent the Option (or any portion thereof) is not
exercised by the Optionee when it becomes exercisable, it shall not expire, but
shall be carried forward and shall be exercisable, on a cumulative basis, until
the Expiration Date (as hereinafter defined) or until earlier termination as
hereinafter provided.
<PAGE>
4. Term; Extent of Exercisability.
------------------------------
(a) Term.
(i) The Option shall expire as to each installment amount on the date
set forth next to each such amount on the signature page to this
Agreement (the "Expiration Date"), subject to earlier termination as
herein provided.
(ii) Except as otherwise provided in this Section 4, if the Optionee
ceases to perform services for the Company, the Option shall terminate
on the earlier of the last day of the third month or ninety days after
the date such Optionee ceases to perform services for the Company, or
on the date on which the Option expires by its terms, whichever occurs
first.
(iii) If such termination to perform services is because of
dismissal for cause or because the Optionee is in breach of any
employment agreement, such Option will terminate on the date the
Optionee ceases to perform services for the Company.
(iv) If such termination to perform services is because the Optionee
has become permanently disabled (within the meaning of Section
22(e)(3) of the Code), such Option shall terminate on the last day of
the twelfth month from the date such Optionee ceases to perform
services for the Company, or on the date on which the Option expires
by its terms, whichever occurs first.
(v) In the event of the death of the Optionee, the Option granted to
such Optionee shall terminate on the last day of the twelfth month
from the date of death, or on the date on which the Option expires by
its terms, whichever occurs first.
(b) Extent of Exercisability.
------------------------
(i) Except as provided below, if the Optionee ceases to perform
services for the Company, the Option shall be exercisable only to the
extent that the right to purchase Shares under such Option has accrued
and is in effect on the date such Optionee ceases to perform services
for the Company.
(ii) If the Optionee ceases to perform services for the Company
because he or she has become permanently disabled (within the meaning
of Section 22(e)(3) of the Code), the Option shall be exercisable to
the full number of Shares covered by such Option.
-2-
<PAGE>
(iii) In the event of the death of the Optionee, the Option may be
exercised with respect to the full number of Shares covered thereby
whether or not under the provisions of Section 3 hereof the Optionee
was entitled to do so at the date of his or her death, by the estate
of such Optionee, or by any person or persons who acquired the right
to exercise such Option by bequest or inheritance or by reason of the
death of such Optionee.
5. Manner of Exercise of Option.
----------------------------
(a) To the extent that the right to exercise the Option has accrued and is
in effect, the Option may be exercised in full or in part by giving written
notice to the Company stating the number of Shares as to which the Option
is being exercised and accompanied by payment in full for such Shares. No
partial exercise may be made for less than one hundred (100) full Shares of
Common Stock. Payment shall be made in accordance with the terms of the
Plan. Upon such exercise, delivery of a certificate for paid-up, non-
assessable Shares shall be made at the principal office of the Company to
the person exercising the Option, not less than thirty (30) and not more
than ninety (90) days from the date of receipt of the notice by the
Company.
(b) The Company shall at all times during the term of the Option reserve
and keep available such number of Shares of its Common Stock as will be
sufficient to satisfy the requirements of the Option.
6. Non-Transferability.
-------------------
The right of the Optionee to exercise the Option shall not be assignable or
transferable by the Optionee otherwise than by will or the laws or descent and
distribution or pursuant to a domestic relations order as defined in the Code or
Title 1 of the Employee Retirement Income Security Act or the rules thereunder,
and the Option may be exercised during the lifetime of the Optionee only by him
or her. The Option shall be null and void and without effect upon the bankruptcy
of the Optionee or upon any attempted assignment or transfer, except as herein
provided, including without limitation any purported assignment, whether
voluntary or by operation of law, pledge, hypothecation or other disposition
contrary to the provisions hereof, or levy of execution, attachment, trustee
process or similar process, whether legal or equitable, upon the Option.
7. Representation Letter and Investment Legend.
-------------------------------------------
In the event that for any reason the Shares to be issued upon exercise of the
Option shall not be effectively registered under the Securities Act of 1933 ("
1933 Act"), upon any date on which the Option is exercised in whole or in part,
the person exercising the Option shall give a written representation to the
Company in the form attached hereto as Exhibit 1 and
-3-
<PAGE>
the Company shall place an "investment legend", so-called, as described in
Exhibit 1, upon any certificate for the Shares issued by reason of such
exercise.
8. Adjustments on Changes in Capitalization.
----------------------------------------
Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Option.
9. No Special Employment Rights.
----------------------------
The provisions of this Section 9 are applicable only to Optionees who are
employees of the Company. Nothing contained in the Plan or this Option shall be
construed or deemed by any person under any circumstances to bind the Company to
continue the employment of the Optionee for the period within which this Option
may be exercised. However, during the period of the Optionee's employment, the
Optionee shall render diligently and faithfully the services which are assigned
to the Optionee from time to time by the Board of Directors or by the executive
officers of the Company and shall at no time take any action which directly or
indirectly would be inconsistent with the best interests of the Company.
10. Rights as a Stockholder.
-----------------------
The Optionee shall have no rights as a stockholder with respect to any Shares
which may be purchased by exercise of this Option unless and until a certificate
or certificates representing such Shares are duly issued and delivered to the
Optionee. Except as otherwise expressly provided in the Plan, no adjustment
shall be made for dividends or other rights for which the record date is prior
to the date such stock certificate is issued.
11. Withholding Taxes.
-----------------
Whenever Shares are to be issued upon exercise of this Option, the Company
shall have the right to require the Optionee to remit to the Company an amount
sufficient to satisfy all Federal, state and local withholding tax requirements
prior to the delivery of any certificate or certificates for the Shares. The
Company may agree to permit the Optionee to authorize the Company to withhold
Shares of Common Stock purchased upon exercise of the Option to satisfy the
above-mentioned withholding requirement; provided, however, no such agreement
may be made by an Optionee who is an officer or director within the meaning of
Section 16 of the Securities Exchange Act of 1934, as amended, except pursuant
to a standing election to so withhold Shares of Common Stock purchased upon
exercise of the Option, such election to be made in the form set forth in
Exhibit 2 hereto and to be made not less than six (6) months prior to such
exercise. Such election may be revoked only upon providing six (6) months prior
written notice to the Company.
-4-
<PAGE>
12. Plan Provisions Control.
-----------------------
In the event of any inconsistency between the provisions of this Agreement and
the provisions of the Plan, the inconsistent provision(s) of this Agreement
shall be superseded by the Plan provision(s) to the extent necessary to
reconcile the inconsistency.
-5-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed, and
the Optionee has hereunto set his or her hand, all as of the 28th day of May,
1998.
LIFE MEDICAL SCIENCES, INC.
By: Herbert Moskowitz
--------------------------------------
OPTIONEE
Print Name: Robert P. Hickey
-------------------------------
Sign Name: /s/ Robert P. Hickey
-------------------------------
OPTION INFORMATION
------------------
Total Number of Shares Underlying Option: 50,000
Purchase Price Per Share: $2.00
VESTING & EXPIRATION SCHEDULE
-----------------------------
Vesting Date Number of Shares Expiration Date
- ------------ ---------------- ---------------
May 28, 1998 50,000 May 28, 2005
-6-
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
In connection with the exercise by me of an option to purchase shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company"), I
hereby acknowledge that I have been informed as follows:
1. The shares of Common Stock of the Company to be issued to me pursuant to
the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held indefinitely unless the Shares are subsequently registered under the
Securities Act, or an exemption from such registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
Securities Act can be made only after the holding period provided by that Rule
has been satisfied, and, in any sale to which that Rule is not applicable,
registration or compliance with some other exemption under the Securities Act
will be required.
3. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.
In consideration of the issuance of certificates for the Shares to me, I
hereby represent and warrant that I am acquiring the Shares for my own account
for investment, and that I will not sell, pledge or transfer the Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and warranty,
I agree that there may be affixed to the certificates for the Shares to be
issued to me, and to all certificates issued hereafter representing the Shares
(until in the opinion of counsel, which opinion must be reasonably satisfactory
in form and substance to counsel for the Company, it is no longer necessary or
required) a legend as follows:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and were acquired by the
registered holder pursuant to a representation and warranty that such
holder was acquiring the Shares for his own account and for investment,
with no intention of transfer or disposition of the same in violation of
the registration requirements of that Act. These securities may not be
sold, pledged, or transferred in the absence of an effective registration
statement under such Act, or an opinion of counsel, which opinion is
reasonably satisfactory to counsel to the Company, to the effect that
registration is not required under such Act."
-7-
<PAGE>
I further agree that the Company may place a stop transfer order with its
transfer agent, prohibiting the transfer of the Shares, so long as the legend
remains on the certificates representing the Shares.
Very truly yours,
/s/ Robert P. Hickey
Dated: 7/10/98
-------
-8-
<PAGE>
EXHIBIT 10.59
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
(non-qualified stock option)
AGREEMENT entered into as of the date set forth on the signature page
hereto by and between Life Medical Sciences, Inc., a Delaware corporation, with
a principal place of business at 379 Thornall Street, Edison, New Jersey
(together with its subsidiaries, if any, the "Company"), and the undersigned
(the "Optionee").
WHEREAS, the Company desires to grant to the Optionee a non-qualified stock
option to acquire shares of the Company's Common Stock, $.001 par value (the
"Shares");
WHEREAS, the Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option.
---------------
The Company hereby grants to the Optionee a non-qualified stock option
under the Plan (the "Option") to purchase all or any part of an aggregate of the
number of Shares set forth on the signature page to this Agreement on the terms
and conditions hereinafter set forth. The Option shall NOT be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986.
as amended (the "Code").
2. Purchase Price.
--------------
The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the dollar amount per share set forth on the signature page to this
Agreement.
3. Time of Vesting and Exercise of Option.
--------------------------------------
The Option shall vest in full as of March 31, 1999.
4. Term
----
a. The Option shall expire as to each installment amount on the
date set forth next to each such amount on the signature page of
this Agreement (the "Expiration Date"), subject to earlier
termination as herein provided.
<PAGE>
b. If such termination to perform services is because of dismissal
for cause or because the Optionee is in breach of any employment
or consulting agreement, such Option will terminate on the date
the Optionee ceases to perform services for the Company.
c. In the event of the death of the Optionee, the Option granted to
such Optionee shall terminate on the last day of the twelfth
month from the date of death, or on the date on which the Option
expires by its terms, whichever occurs first.
5. Manner of Exercise of Option.
----------------------------
To the extent that the right to exercise the Option has accrued and is in
effect, the Option may be exercised in full or in part by giving written
notice to the Company stating the number of Shares as to which the Option
is being exercised and accompanied by payment in full for such Shares. No
partial exercise may be made for less than one hundred (100) full Shares of
Common Stock. Payment shall be made in accordance with the terms of the
Company's Amended and Restated 1992 Stock Option Plan. Upon such exercise,
delivery of a certificate for paid-up, non-assessable Shares shall be made
at the principal office of the Company to the person exercising the Option,
not less than thirty (30) and not more than forty-five (45) days from the
date of receipt of the notice by the Company, but subject to the following
restriction, which is that the shares will not be registered with the
Securities Exchange Commission unless and until the Company registers other
new shares subsequent to the date of this agreement. Said registration
will most likely be in conjunction with an equity financing for the
Company.
6. Non-Transferability.
-------------------
The right of the Optionee to exercise the Option shall not be assignable
or transferable by the Optionee otherwise than by will or the laws of
descent and distribution or pursuant to a domestic relations order as
defined in the Code or Title 1 of the Employee Retirement Income Security
Act or the rules thereunder, and the Option may be exercised during the
lifetime of the Optionee only by him or her. The Option shall be null and
void and without effect upon any attempted assignment or transfer, except
as herein provided, including without limitation any purported assignment,
whether voluntary or by operation of law, pledge, hypothecation or other
disposition contrary to the provisions hereof, or levy of execution,
attachment, trustee process or similar process, whether legal or equitable,
upon the Option.
<PAGE>
7. Representation Letter and Investment Legend.
-------------------------------------------
In the event that for any reason the Shares to be issued upon exercise of
the Option shall not be effectively registered under the Securities Act of 1933
("1933 Act"), upon any date on which the Option is exercised in whole or in
part, the person exercising the Option shall give a written representation to
the Company in the form attached hereto as Exhibit 1 and the Company shall place
an "investment legend", so-called, as described in Exhibit 1, upon any
certificate for the Shares issued by reason of such exercise.
8. Adjustments on Changes in Capitalization
----------------------------------------
Adjustments on changes in capitalization and the like shall be made in
accordance with the provisions of the Company's Amended and Restated 1992 Stock
Option Plan as in effect on the date of this Option.
9. No Special Employment Rights.
----------------------------
The provisions of this Section 9 are applicable only to Optionees who
are employees of the Company. Nothing contained in the Plan or this Option
shall be construed or deemed by any person under any circumstances to bind the
Company to continue the employment of the Optionee for the period within which
this Option may be exercised. However, during the period of the Optionee's
employment, the Optionee shall render diligently and faithfully the services
which are assigned to the Optionee from time to time by the Board of Directors
or by the executive officers of the Company and shall at no time take any action
which directly or indirectly would be inconsistent with the best interests of
the Company.
10. Rights as a Stockholder.
-----------------------
The Optionee shall have no rights as a stockholder with respect to any
Shares which may be purchased by exercise of this Option unless and until a
certificate or certificates representing such Shares are duly issued and
delivered to the Optionee. Except as otherwise expressly provided in the Plan,
no adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.
11. Withholding Taxes.
-----------------
Whenever Shares are to be issued upon exercise of this Option, the Company
shall have the right to require the Optionee to remit to the Company an amount
sufficient to satisfy all Federal, state and local withholding tax requirements
prior to the delivery of any certificate or certificates for the Shares. The
Company may agree to permit the Optionee to authorize the Company to withhold
Shares of Common Stock purchased upon exercise of the Option to satisfy the
above-mentioned withholding requirement; provided, however, no such agreement
may be
<PAGE>
made by an Optionee who is an officer or director within the meaning of Section
16 of the Securities Exchange Act of 1934, as amended, except pursuant to a
standing election to so withhold Shares of Common Stock purchased upon exercise
of the Option, such election to be made in the form set forth in Exhibit 2
hereto and to be made not less than six (6) months prior to such exercise. Such
election may be revoked only upon providing six (6) months prior written notice
to the Company.
12. Plan Provisions Control.
-----------------------
In the event of any inconsistency between the provisions of this Agreement
and the provisions of the Plan, the inconsistent provision(s) of this Agreement
shall be superceded by the Plan provision(s) to the extent necessary to
reconcile the inconsistency.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed,
and the Optionee has hereunto set his or her hand, all as of the 31 day of
Dec. 1998.
LIFE MEDICAL SCIENCES, INC.
By: /s/ DREW KARAZIN
---------------------------------------
OPTIONEE:
Print Name: /s/ ROBERT P. HICKEY
--------------------------------
Sign Name : Robert P. Hickey
-------------------------------
OPTION INFORMATION
------------------
Total Number of Shares Underlying Option: 20,000
Purchase Price Per Share: $.09
VESTING & EXPIRATION SCHEDULE
-----------------------------
Vesting Date Number of Shares Expiration Date
------------ ---------------- ---------------
3/31/99 20,000 3/31/06
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
In connection with the exercise by me of an option to purchase shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company'), I
hereby acknowledge that I have been informed as follows:
1 . The shares of Common Stock of the Company to be issued to me pursuant
to the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held indefinitely unless the Shares are subsequently registered under the
Securities Act, or an exemption from such registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
Securities Act can be made only after the holding period provided by that Rule
has been satisfied, and, in any sale to which that Rule is not applicable,
registration or compliance with some other exemption under the Securities Act
will be required.
3. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement,
In consideration of the issuance of certificates for the Shares to me, I
hereby represent and warrant that I am acquiring the Shares for my own account
for investment, and that I will not sell, pledge or transfer the Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and
warranty, I agree that there may be affixed to the certificates for the Shares
to be issued to me, and to all certificates issued hereafter representing the
Shares (until in the opinion of counsel, which opinion must be reasonably
satisfactory in form and substance to counsel for the Company, it is no longer
necessary or required) a legend as follows:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and were acquired by the
registered holder pursuant to a representation and warranty that such
holder was acquiring the
<PAGE>
Shares for his own account and for investment, with no intention of
transfer or disposition of the same in violation of the registration
requirements of that Act. These securities may not be sold, pledged, or
transferred in the absence of an effective registration statement under
such Act, or an opinion of counsel, which opinion is reasonably
satisfactory to counsel to the Company, to the effect that registration is
not required under such Act. "
I further agree that the Company may place a stop transfer order with its
transfer agent, prohibiting the transfer of the Shares, so long as the legend
remains on the certificates representing the Shares.
Very truly yours,
Dated:
-------------------
<PAGE>
EXHIBIT 2
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
The undersigned Optionee hereby elects and agrees that, whenever the
undersigned exercises a stock option (including any options which now or may
hereafter be granted), Life Medical Sciences, Inc. (the "Company") shall
withhold from that exercise such number of Shares equal in value to the federal
and state withholding taxes due upon such exercise. The undersigned further
acknowledges and agrees that this election may not be revoked without six (6)
months' prior written notice to the Company.
OPTIONEE:
---------------------------------------------
(Signature)
---------------------------------------------
(Print Name)
<PAGE>
[LOGO OF LIFE MEDICAL SCIENCES, INC.]
- ---------------------------------------------------------------
Improving Life Through Discovery
January 11, 1999
Robert P. Hickey
92 Gooseneck Point Rd.
Oceanport, N.J. 07757
Dear Bob:
Thank you for your participation in our Options in Lieu of Compensation Program
(Program). This Program represents one of many steps which we have undertaken
to preserve our cash resources. You will note that the company has increased
the number of options offered to you. The formula we are using is: number of
options equals dollars forgiven times 1.5 times (1/.375 stock price) or # of
options = $ forgiven x 1.5 x (I/.375 stock price).
Please find attached two originals of the Stock Option Agreement and Exhibit I
for your review and signature. Please return one signed copy to me for our
records. Also attached is a copy of the Amended and Restated 1992 Stock Option
Plan for your information.
Please also sign and return one copy of this letter whereby you acknowledge
understanding of and agreement with the following:
1) In compliance with the terms of the Program, by receipt of this Stock Option
Agreement for 20,000 shares, you agree to waive your claim to $5,000.00 due
to you from the Company at 12/31/98.
2) Participation in the Program is voluntary and at the discretion of the
Company. It is the Company's intention to terminate the Program upon
receipt of additional financing. Notification of the Program termination
will be provided. Termination of the Program in no way effects your rights
as defined in the Stock Option Agreement.
Continued .....
- --------------------------------------------------------------------------------
379 Thornall Street . Edison, NJ 08837-2227 TEL 732-494-0440 FAX 732-494-6252
http://www.lifemed.com Email: [email protected]
<PAGE>
Exhibit 10.60
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED 1992 STOCK OPTION PLAN
(non-qualified stock option)
AGREEMENT entered into as of the date set forth on the signature page hereto
by and between Life Medical Sciences, Inc., a Delaware corporation, with a
principal place of business at 379 Thornall Street, Edison, New Jersey (together
with its subsidiaries, if any, the "Company"), and the undersigned (the
"Optionee").
WHEREAS, the Company desires to grant to the Optionee a non-qualified stock
option under the Company's Amended and Restated 1992 Stock Option Plan (the
"Plan") to acquire shares of the Company's Common Stock, $.001 par value (the
"Shares"); and
WHEREAS, the Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option.
---------------
The Company hereby grants to the Optionee a non-qualified stock option under
the Plan (the "Option") to purchase all or any part of an aggregate of the
number of Shares set forth on the signature page to this Agreement on the terms
and conditions hereinafter set forth. The Option shall NOT be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
--------------
The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the dollar amount per share set forth on the signature page to this
Agreement.
3. Time of Vesting and Exercise of Option.
--------------------------------------
Subject to Section 4 hereof, the Option shall vest and become exercisable on
the dates and as to the installment amounts set forth on the signature page to
this Agreement. To the extent the Option (or any portion thereof) is not
exercised by the Optionee when it becomes exercisable, it shall not expire, but
shall be carried forward and shall be exercisable, on a cumulative basis, until
the Expiration Date (as hereinafter defined) or until earlier termination as
hereinafter provided.
<PAGE>
4. Term; Extent of Exercisability.
------------------------------
(a) Term.
(i) The Option shall expire as to each installment amount on the date
set forth next to each such amount on the signature page to this
Agreement (the "Expiration Date"), subject to earlier termination as
herein provided.
(ii) Except as otherwise provided in this Section 4, if the Optionee
ceases to perform services for the Company, the Option shall terminate
on the earlier of the last day of the third month or ninety days after
the date such Optionee ceases to perform services for the Company, or
on the date on which the Option expires by its terms, whichever occurs
first.
(iii) If such termination to perform services is because of
dismissal for cause or because the Optionee is in breach of any
employment agreement, such Option will terminate on the date the
Optionee ceases to perform services for the Company.
(iv) If such termination to perform services is because the Optionee
has become permanently disabled (within the meaning of Section
22(e)(3) of the Code), such Option shall terminate on the last day of
the twelfth month from the date such Optionee ceases to perform
services for the Company, or on the date on which the Option expires
by its terms, whichever occurs first.
(v) In the event of the death of the Optionee, the Option granted to
such Optionee shall terminate on the last day of the twelfth month
from the date of death, or on the date on which the Option expires by
its terms, whichever occurs first.
(b) Extent of Exercisability.
------------------------
(i) Except as provided below, if the Optionee ceases to perform
services for the Company, the Option shall be exercisable only to the
extent that the right to purchase Shares under such Option has accrued
and is in effect on the date such Optionee ceases to perform services
for the Company.
(ii) If the Optionee ceases to perform services for the Company
because he or she has become permanently disabled (within the meaning
of Section 22(e)(3) of the Code), the Option shall be exercisable to
the full number of Shares covered by such Option.
-2-
<PAGE>
(iii) In the event of the death of the Optionee, the Option may be
exercised with respect to the full number of Shares covered thereby
whether or not under the provisions of Section 3 hereof the Optionee
was entitled to do so at the date of his or her death, by the estate
of such Optionee, or by any person or persons who acquired the right
to exercise such Option by bequest or inheritance or by reason of the
death of such Optionee.
5. Manner of Exercise of Option.
----------------------------
(a) To the extent that the right to exercise the Option has accrued and is
in effect, the Option may be exercised in full or in part by giving written
notice to the Company stating the number of Shares as to which the Option
is being exercised and accompanied by payment in full for such Shares. No
partial exercise may be made for less than one hundred (100) full Shares of
Common Stock. Payment shall be made in accordance with the terms of the
Plan. Upon such exercise, delivery of a certificate for paid-up, non-
assessable Shares shall be made at the principal office of the Company to
the person exercising the Option, not less than thirty (30) and not more
than ninety (90) days from the date of receipt of the notice by the
Company.
(b) The Company shall at all times during the term of the Option reserve
and keep available such number of Shares of its Common Stock as will be
sufficient to satisfy the requirements of the Option.
6. Non-Transferability.
-------------------
The right of the Optionee to exercise the Option shall not be assignable or
transferable by the Optionee otherwise than by will or the laws or descent and
distribution or pursuant to a domestic relations order as defined in the Code or
Title 1 of the Employee Retirement Income Security Act or the rules thereunder,
and the Option may be exercised during the lifetime of the Optionee only by him
or her. The Option shall be null and void and without effect upon the bankruptcy
of the Optionee or upon any attempted assignment or transfer, except as herein
provided, including without limitation any purported assignment, whether
voluntary or by operation of law, pledge, hypothecation or other disposition
contrary to the provisions hereof, or levy of execution, attachment, trustee
process or similar process, whether legal or equitable, upon the Option.
7. Representation Letter and Investment Legend.
-------------------------------------------
In the event that for any reason the Shares to be issued upon exercise of the
Option shall not be effectively registered under the Securities Act of 1933 ("
1933 Act"), upon any date on which the Option is exercised in whole or in part,
the person exercising the Option shall give a written representation to the
Company in the form attached hereto as Exhibit 1 and
-3-
<PAGE>
the Company shall place an "investment legend", so-called, as described in
Exhibit 1, upon any certificate for the Shares issued by reason of such
exercise.
8. Adjustments on Changes in Capitalization.
----------------------------------------
Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Option.
9. No Special Employment Rights.
----------------------------
The provisions of this Section 9 are applicable only to Optionee's who are
employees of the Company. Nothing contained in the Plan or this Option shall be
construed or deemed by any person under any circumstances to bind the Company to
continue the employment of the Optionee for the period within which this Option
may be exercised. However, during the period of the Optionee's employment, the
Optionee shall render diligently and faithfully the services which are assigned
to the Optionee from time to time by the Board of Directors or by the executive
officers of the Company and shall at no time take any action which directly or
indirectly would be inconsistent with the best interests of the Company.
10. Rights as a Stockholder.
-----------------------
The Optionee shall have no rights as a stockholder with respect to any Shares
which may be purchased by exercise of this Option unless and until a certificate
or certificates representing such Shares are duly issued and delivered to the
Optionee. Except as otherwise expressly provided in the Plan, no adjustment
shall be made for dividends or other rights for which the record date is prior
to the date such stock certificate is issued.
11. Withholding Taxes.
-----------------
Whenever Shares are to be issued upon exercise of this Option, the Company
shall have the right to require the Optionee to remit to the Company an amount
sufficient to satisfy all Federal, state and local withholding tax requirements
prior to the delivery of any certificate or certificates for the Shares. The
Company may agree to permit the Optionee to authorize the Company to withhold
Shares of Common Stock purchased upon exercise of the Option to satisfy the
above-mentioned withholding requirement; provided, however, no such agreement
may be made by an Optionee who is an officer or director within the meaning of
Section 16 of the Securities Exchange Act of 1934, as amended, except pursuant
to a standing election to so withhold Shares of Common Stock purchased upon
exercise of the Option, such election to be made in the form set forth in
Exhibit 2 hereto and to be made not less than six (6) months prior to such
exercise. Such election may be revoked only upon providing six (6) months prior
written notice to the Company.
-4-
<PAGE>
12. Plan Provisions Control.
-----------------------
In the event of any inconsistency between the provisions of this Agreement and
the provisions of the Plan, the inconsistent provision(s) of this Agreement
shall be superseded by the Plan provision(s) to the extent necessary to
reconcile the inconsistency.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed, and
the Optionee has hereunto set his or her hand, all as of the 20th day of July,
1998.
LIFE MEDICAL SCIENCES, INC.
By:
--------------------------------------
OPTIONEE
Print Name: Drew Karazin
-------------------------------
Sign Name: /s/ Drew Karazin
-------------------------------
OPTION INFORMATION
------------------
Total Number of Shares Underlying Option: 75,000
Purchase Price Per Share: $ 1.37
VESTING & EXPIRATION SCHEDULE
-----------------------------
Vesting Date Number of Shares Expiration Date
- ------------ ---------------- ---------------
July 20, 1998 25,000 July 20, 2005
July 20, 1999 25,000 July 20, 2006
July 20, 2000 25,000 July 20, 2007
-5-
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
In connection with the exercise by me of an option to purchase shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company"), I
hereby acknowledge that I have been informed as follows:
1. The shares of Common Stock of the Company to be issued to me pursuant to
the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held indefinitely unless the Shares are subsequently registered under the
Securities Act, or an exemption from such registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
Securities Act can be made only after the holding period provided by that Rule
has been satisfied, and, in any sale to which that Rule is not applicable,
registration or compliance with some other exemption under the Securities Act
will be required.
3. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.
In consideration of the issuance of certificates for the Shares to me, I
hereby represent and warrant that I am acquiring the Shares for my own account
for investment, and that I will not sell, pledge or transfer the Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and warranty,
I agree that there may be affixed to the certificates for the Shares to be
issued to me, and to all certificates issued hereafter representing the Shares
(until in the opinion of counsel, which opinion must be reasonably satisfactory
in form and substance to counsel for the Company, it is no longer necessary or
required) a legend as follows:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and were acquired by the
registered holder pursuant to a representation and warranty that such
holder was acquiring the Shares for his own account and for investment,
with no intention of transfer or disposition of the same in violation of
the registration requirements of that Act. These securities may not be
sold, pledged, or transferred in the absence of an effective registration
statement under such Act, or an opinion of counsel, which opinion is
reasonably satisfactory to counsel to the Company, to the effect that
registration is not required under such Act."
-6-
<PAGE>
I further agree that the Company may place a stop transfer order with its
transfer agent, prohibiting the transfer of the Shares, so long as the legend
remains on the certificates representing the Shares.
Very truly yours,
/s/ Drew Karazin
Dated: 7/21/98
-------
-7-
<PAGE>
EXHIBIT 2
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
The undersigned Optionee hereby elects and agrees that, whenever the
undersigned exercises a stock option (including any options which now or may
hereafter be granted), Life Medical Sciences, Inc. (the "Company") shall
withhold from that exercise such number of Shares equal in value to the federal
and state withholding taxes due upon such exercise. The undersigned further
acknowledges and agrees that this election may not be revoked without six (6)
months' prior written notice to the Company.
OPTIONEE:
/s/ Drew Karazin
--------------------------------------------
(Signature)
Drew Karazin
--------------------------------------------
(Print Name)
-8-
<PAGE>
EXHIBIT 10.61
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
(non-qualified stock option)
AGREEMENT entered into as of the date set forth on the signature page
hereto by and between Life Medical Sciences, Inc., a Delaware corporation, with
a principal place of business at 379 Thornall Street, Edison, New Jersey
(together with its subsidiaries, if any, the "Company"), and the undersigned
(the "Optionee").
WHEREAS, the Company desires to grant to the Optionee a non-qualified stock
option to acquire shares of the Company's Common Stock, $.001 par value (the
"Shares");
WHEREAS, the Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
NOW THEREFORE. in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option.
---------------
The Company hereby grants to the Optionee a non-qualified stock option
under the Plan (the "Option") to purchase all or any part of an aggregate of the
number of Shares set forth on the signature page to this Agreement on the terms
and conditions hereinafter set forth. The Option shall NOT be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
--------------
The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the dollar amount per share set forth on the signature page to this
Agreement.
3. Time of Vesting and Exercise of Option.
--------------------------------------
The Option shall vest in full as of March 31, 1999.
4. Term
----
a. The Option shall expire as to each installment amount on the
date set forth next to each such amount on the signature page of
this Agreement (the "Expiration Date"), subject to earlier
termination as herein provided.
<PAGE>
b. If such termination to perform services is because of dismissal
for cause or because the Optionee is in breach of any employment
or consulting agreement, such Option will terminate on the date
the Optionee ceases to perform services for the Company.
c. In the event of the death of the Optionee, the Option granted to
such Optionee shall terminate on the last day of the twelfth
month from the date of death, or on the date on which the Option
expires by its terms, whichever occurs first.
5. Manner of Exercise of Option.
----------------------------
To the extent that the right to exercise the Option has accrued and is
in effect, the Option may be exercised in full or in part by giving
written notice to the Company stating the number of Shares as to which
the Option is being exercised and accompanied by payment in full for
such Shares. No partial exercise may be made for less than one hundred
(100) full Shares of Common Stock. Payment shall be made in accordance
with the terms of the Company's Amended and Restated 1992 Stock Option
Plan. Upon such exercise, delivery of a certificate for paid-up, non-
assessable Shares shall be made at the principal office of the Company
to the person exercising the Option, not less than thirty (30) and not
more than forty-five (45) days from the date of receipt of the notice
by the Company, but subject to the following restriction, which is
that the shares will not be registered with the Securities Exchange
Commission unless and until the Company registers other new shares
subsequent to the date of this agreement. Said registration will most
likely be in conjunction with an equity financing for the Company.
6. Non-Transferability.
-------------------
The right of the Optionee to exercise the Option shall not be assignable or
transferable by the Optionee otherwise than by will or the laws of descent and
distribution or pursuant to a domestic relations order as defined in the Code or
Title 1 of the Employee Retirement Income Security Act or the rules thereunder,
and the Option may be exercised during the lifetime of the Optionee only by him
or her. The Option shall be null and void and without effect upon any attempted
assignment or transfer, except as herein provided, including without limitation
any purported assignment, whether voluntary or by operation of law, pledge,
hypothecation or other disposition contrary to the provisions hereof, or levy of
execution, attachment, trustee process or similar process, whether legal or
equitable, upon the Option.
<PAGE>
7. Representation Letter and Investment Legend.
-------------------------------------------
In the event that for any reason the Shares to be issued upon exercise of
the Option shall not be effectively registered under the Securities Act of 1933
("1933 Act"), upon any date on which the Option is exercised in whole or in
part, the person exercising the Option shall give a written representation to
the Company in the form attached hereto as Exhibit 1 and the Company shall place
an "investment legend", so-called, as described in Exhibit 1, upon any
certificate for the Shares issued by reason of such exercise.
8. Adjustments on Changes in Capitalization.
----------------------------------------
Adjustments on changes in capitalization and the like shall be made in
accordance with the provisions of the Company's Amended and Restated 1992 Stock
Option Plan as in effect on the date of this Option.
9. No Special Employment Rights.
----------------------------
The provisions of this Section 9 are applicable only to Optionees who are
employees of the Company. Nothing contained in the Plan or this Option shall be
construed or deemed by any person under any circumstances to bind the Company to
continue the employment of the Optionee for the period within which this Option
may be exercised. However, during the period of the Optionee's employment, the
Optionee shall render diligently and faithfully the services which are assigned
to the Optionee from time to time by the Board of Directors or by the executive
officers of the Company and shall at no time take any action which directly or
indirectly would be inconsistent with the best interests of the Company.
10. Rights as a Stockholder.
-----------------------
The Optionee shall have no rights as a stockholder with respect to any
Shares which may be purchased by exercise of this Option unless and until a
certificate or certificates representing such Shares are duly issued and
delivered to the Optionee. Except as otherwise expressly provided in the Plan,
no adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.
11. Withholding Taxes.
-----------------
Whenever Shares are to be issued upon exercise of this Option, the Company
shall have the right to require the Optionee to remit to the Company an amount
sufficient to satisfy all Federal, state and local withholding tax requirements
prior to the delivery of any certificate or certificates for the Shares. The
Company may agree to permit the Optionee to authorize the Company to withhold
Shares of Common Stock purchased upon exercise of the Option to satisfy the
above-mentioned withholding requirement; provided, however, no such agreement
may be
<PAGE>
made by an Optionee who is an officer or director within the meaning of Section
16 of the Securities Exchange Act of 1934, as amended, except pursuant to a
standing election to so withhold Shares of Common Stock purchased upon exercise
of the Option, such election to be made in the form set forth in Exhibit 2
hereto and to be made not less than six (6) months prior to such exercise.
Such election may be revoked only upon providing six (6) months prior written
notice to the Company.
12. Plan Provisions Control.
-----------------------
In the event of any inconsistency between the provisions of this Agreement
and the provisions of the Plan, the inconsistent provision(s) of this Agreement
shall be superceded by the Plan provision(s) to the extent necessary to
reconcile the inconsistency.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed, and the Optionee has hereunto set his or her hand, all as of the
31st day of December 1998.
LIFE MEDICAL SCIENCES, INC.
By /s/ Robert P. Hickey
----------------------------------
OPTIONEE
Print Name: Drew Karazin
---------------------------
Sign Name: /s/ Drew Karazin
---------------------------
OPTION INFORMATION
------------------
Total Number of Shares Underlying Option: 20,000
Purchase Price Per Share: $.09
VESTING & EXPIRATION SCHEDULE
Vesting Date Number of Shares Expiration date
- ------------ ---------------- ---------------
3/31/99 20,000 3/31/06
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
In connection with the exercise by me of an option to purchase shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company"), I
hereby acknowledge that I have been informed as follows:
1. The shares of Common Stock of the Company to be issued to me pursuant
to the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held indefinitely unless the Shares are subsequently registered under the
Securities Act, or an exemption from such registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
Securities Act can be made only after the holding period provided by that Rule
has been satisfied, and, in any sale to which that Rule is not applicable,
registration or compliance with some other exemption under the Securities Act
will be required.
3. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.'
In consideration of the issuance of certificates for the Shares to me, I
hereby represent and warrant that I am acquiring the Shares for my own account
for investment, and that I will not sell, pledge or transfer the Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and
warranty, I agree that there may be affixed to the certificates for the Shares
to be issued to me, and to all certificates issued hereafter representing the
Shares (until in the opinion of counsel, which opinion must be reasonably
satisfactory in form and substance to counsel for the Company, it is no longer
necessary or required) a legend as follows:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and were acquired by the
registered holder pursuant to a representation and warranty that such
holder was acquiring the
<PAGE>
EXHIBIT 2
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
The undersigned Optionee hereby elects and agrees that, whenever the
undersigned exercises a stock option (including any options which now or may
hereafter be granted), Life Medical Sciences, Inc. (the "Company") shall
withhold from that exercise such number of Shares equal in value to the federal
and state withholding taxes due upon such exercise. The undersigned further
acknowledges and agrees that this election may not be revoked without six (6)
months' prior written notice to the Company.
OPTIONEE:
---------------------------------------------
(Signature)
---------------------------------------------
(Print Name)
<PAGE>
Shares for his own account and for investment, with no intention of
transfer or disposition of the same in violation of the registration
requirements of that Act. These securities may not be sold, pledged, or
transferred in the absence of an effective registration statement under
such Act, or an opinion of counsel, which opinion is reasonably
satisfactory to counsel to the Company, to the effect that registration is
not required under such Act."
I further agree that the Company may place a stop transfer order with its
transfer agent, prohibiting the transfer of the Shares, so long as the legend
remains on the certificates representing the Shares.
Very truly yours,
Dated:
---------------------
<PAGE>
[LOGO OF LIFE MEDICAL SCIENCES, INC.
- ------------------------------------------
Improving Life Through Discovery
January 11, 1999
Mr. Drew Karazin
920 Truepenny Rd.
Nether Providence, PA 19086
Dear Drew:
Thank you for your participation in our Options in Lieu of Compensation Program
(Program). This Program represents one of many steps which we have undertaken
to preserve our cash resources. You will note that the company has increased
the number of options offered to you. The formula we are using is: number of
options equals dollars forgiven times 1.5 times (1/.375 stock price) or # of
options = $ forgiven x 1.5 x (1/.375 stock price).
Please find attached two originals of the Stock Option Agreement and Exhibit I
for your review and signature. Please return one signed copy to me for our
records. Also attached is a copy of the Amended and Restated 1992 Stock Option
Plan for your information.
Please also sign and return one copy of this letter whereby you acknowledge
understanding of and agreement with the following:
1) In compliance with the terms of the Program, by receipt of this Stock Option
Agreement for 20,000 shares, you agree to waive your claim to $5,000.00 due
to you from the Company at 12/31/98.
2) Participation in the Program is voluntary and at the discretion of the
Company. It is the Company's intention to terminate the Program upon
receipt of additional financing. Notification of the Program termination
will be provided. Termination of the Program in no way effects your rights
as defined in the Stock Option Agreement.
Continued .....
- --------------------------------------------------------------------------------
379 Tronall Street . Edison NJ 08837-2227 TEL 732-494-0440 FAX 732-494-6252
http://www.lifemed.com Email: [email protected]
<PAGE>
[LOGO]
- -------------------------------------------------------
Mr. Drew Karazin
Page Two
January 11, 1999
I appreciate your understanding and support and look forward to sharing with you
in the Company's future successes.
Sincerely yours,
/s/ Robert P. Hickey
Robert P. Hickey
President and Chief Executive Officer
RPH:K
Encls.
ACCEPTED: DATE:
/s/ Drew Karazin 1/15/99
- ------------------------------ ------------------------------
<PAGE>
EXHIBIT 10.62
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED 1992 STOCK OPTION PLAN
(non-qualified stock option)
AGREEMENT entered into as of the date set forth on the signature page
hereto by and between Life Medical Sciences, Inc., a Delaware corporation, with
a principal place of business at 379 Thornall Street, Edison, New Jersey
(together with its subsidiaries, if any, the "Company"), and the undersigned
(the "Optionee").
WHEREAS, the Company desires to grant to the Optionee a non-qualified
stock option under the Company's Amended and Restated 1992 Stock Option Plan
(the "Plan") to acquire shares of the Company's Common Stock, $.001 par value
(the "Shares"); and
WHEREAS, the Plan provides that each option is to be evidenced by an
option agreement, setting forth the terms and conditions of the option.
NOW THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the Company and the Optionee hereby
agree as follows:
1. Grant of Option.
---------------
The Company hereby grants to the Optionee a non-qualified stock option
under the Plan (the "Option") to purchase all or any part of an aggregate of the
number of Shares set forth on the signature page to this Agreement on the terms
and conditions hereinafter set forth. The Option shall NOT be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
--------------
The purchase price ("Purchase Price") for the Shares covered by the
Option shall be the dollar amount per share set forth on the signature page to
this Agreement.
3. Time of Vesting and Exercise of Option.
---------------------------------------
Subject to Section 4 hereof, the Option shall vest and become
exercisable on the dates and as to the installment amounts set forth on the
signature page to this Agreement. To the extent the Option (or any portion
thereof) is not exercised by the Optionee when it becomes exercisable, it shall
not expire, but shall be carried forward and shall be exercisable, on a
cumulative basis, until the Expiration Date (as hereinafter defined) or until
earlier termination as hereinafter provided.
-1-
<PAGE>
4. Term; Extent of Exercisability.
------------------------------
(a) Term
(i) The Option shall expire as to each
installment amount on the date set forth next to each
such amount on the signature page to this Agreement (the
"Expiration Date"), subject to earlier termination as herein
provided.
(ii) Except as otherwise provided in this Section
4, if the Optionee ceases to perform services for the Company,
the Option shall terminate on the earlier of the last day of the
third month or ninety days after the date such Optionee ceases to
perform services for the Company, or on the date on which the
Option expires by its terms, whichever occurs first.
(iii) If such termination to perform services is because of
dismissal for cause or because the Optionee is in breach of any
employment agreement, such Option will terminate on the date the
Optionee ceases to perform services for the Company.
(iv) If such termination to perform services is because the
Optionee has become permanently disabled (within the meaning
of Section 22(e)(3) of the Code), such Option shall terminate on
the last day of the twelfth month from the date such Optionee
ceases to perform services for the Company, or on the date on
which the Option expires by its terms, whichever occurs first.
(v) In the event of the death of the Optionee,
the Option granted to such Optionee shall terminate on the last
day of the twelfth month from the date of death, or on the date
on which the Option expires by its terms, whichever occurs
first.
(b) Extent of Exercisability.
------------------------
(i) Except as provided below, if the Optionee ceases to
perform services for the Company, the Option shall be exercisable
only to the extent that the right to purchase Shares under such
Option has accrued and is in effect on the date such Optionee
ceases to perform services for the Company.
(ii) If the Optionee ceases to perform services for the
Company because he or she has become permanently disabled (within
the meaning of Section 22(e)(3) of the Code), the Option shall be
exercisable to the full number of Shares covered by such Option.
-2-
<PAGE>
(iii) In the event of the death of the Optionee, the Option
may be exercised with respect to the full number of Shares
covered thereby whether or not under the provisions of Section 3
hereof the Optionee was entitled to do so at the date of his or
her death, by the estate of such Optionee, or by any person or
persons who acquired the right to exercise such Option by bequest
or inheritance or by reason of the death of such Optionee.
5. Manner of Exercise of Option.
----------------------------
(a) To the extent that the right to exercise the Option has
accrued and is in effect, the Option may be exercised in full or in
part by giving written notice to the Company stating the number of
Shares as to which the Option is being exercised and accompanied by
payment in full for such Shares. No partial exercise may be made for
less than one hundred (100) full Shares of Common Stock. Payment shall
be made in accordance with the terms of the Plan. Upon such exercise,
delivery of a certificate for paid-up, non-assessable Shares shall be
made at the principal office of the Company to the person exercising
the Option, not less than thirty (30) and not more than ninety (90)
days from the date of receipt of the notice by the Company.
(b) The Company shall at all times during the term of the
Option reserve and keep available such number of Shares of its Common
Stock as will be sufficient to satisfy the requirements of the Option.
6. Non-Transferability.
-------------------
The right of the Optionee to exercise the Option shall not
be assignable or transferable by the Optionee otherwise than by will or the laws
or descent and distribution or pursuant to a domestic relations order as
defined in the Code or Title 1 of the Employee Retirement Income Security Act
or the rules thereunder, and the Option may be exercised during the lifetime of
the Optionee only by him or her. The Option shall be null and void and without
effect upon the bankruptcy of the Optionee or upon any attempted assignment or
transfer, except as herein provided, including without limitation any purported
assignment, whether voluntary or by operation of law, pledge, hypothecation or
other disposition contrary to the provisions hereof, or levy of execution,
attachment, trustee process or similar process, whether legal or equitable, upon
the Option.
7. Representation Letter and Investment Legend.
-------------------------------------------
In the event that for any reason the Shares to be issued upon
exercise of the Option shall not be effectively registered under the Securities
Act of 1933 ("1933 Act"), upon any date on which the Option is exercised in
whole or in part, the person exercising the Option shall give a written
representation to the Company in the form attached hereto as Exhibit 1 and the
Company shall place an "investment legend", so-called, as described in Exhibit
1, upon any certificate for the Shares issued by reason of such exercise.
-3-
<PAGE>
8. Adjustments on Changes in Capitalization.
----------------------------------------
Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Option.
9. No Special Employment Rights.
----------------------------
The provisions of this Section 9 are applicable only to Optionee's who
are employees of the Company. Nothing contained in the Plan or this Option
shall be construed or deemed by any person under any circumstances to bind the
Company to continue the employment of the Optionee for the period within which
this Option may be exercised. However, during the period of the Optionee's
employment, the Optionee shall render diligently and faithfully the services
which are assigned to the Optionee from time to time by the Board of Directors
or by the executive officers of the Company and shall at no time take any action
which directly or indirectly would be inconsistent with the best interests of
the Company.
10. Rights as a Stockholder.
-----------------------
The Optionee shall have no rights as a stockholder with respect to any
Shares which may be purchased by exercise of this Option unless and until a
certificate or certificates representing such Shares are duly issued and
delivered to the Optionee. Except as otherwise expressly provided in the Plan,
no adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.
11. Withholding Taxes.
-----------------
Whenever Shares are to be issued upon exercise of this Option, the
Company shall have the right to require the Optionee to remit to the Company an
amount sufficient to satisfy all Federal, state and local withholding tax
requirements prior to the delivery of any certificate or certificates for the
Shares. The Company may agree to permit the Optionee to authorized the Company
to withhold Shares of Common Stock purchased upon exercise of the Option to
satisfy the above-mentioned withholding requirement; provided, however, no such
agreement may be made by an Optionee who is an officer or director within the
meaning of Section 16 of the Securities Exchange Act of 1934, as amended, except
pursuant to a standing election to so withhold Shares of Common Stock purchased
upon exercise of the Option, such election to be made in the form set forth in
Exhibit 2 hereto and to be made not less than six (6) months prior to such
exercise. Such election may be revoked only upon providing six (6) months prior
written notice to the Company.
12. Plan Provisions Control.
-----------------------
In the event of any inconsistency between the provisions of this
Agreement and the provisions of the Plan, the inconsistent provision(s) of this
Agreement shall be superseded by the Plan provision(s) to the extent necessary
to reconcile the inconsistency.
-4-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed, and the Optionee has hereunto set his or her hand, all as of the 28th
day of May, 1998.
LIFE MEDICAL SCIENCES, INC.
By: /s/ Robert P. Hickey
-------------------------------------
OPTIONEE:
Print Name: Eli Pines, Ph.D.
-----------------------------
Sign Name: /s/ Eli Pines 7/30/98
------------------------------
OPTION INFORMATION
------------------
Total Number of Shares Underlying Option: 30,000
Purchase Price Per Share: $ 2.00
VESTING & EXPIRATION SCHEDULE
-----------------------------
Vesting Date Number of Shares Expiration Date
- ------------ ---------------- ---------------
June 17, 1997 15,000 June 17, 2002
June 17, 1998 15,000 June 17, 2003
This agreement supercedes the previous agreement dated June 17, 1997.
-5-
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
--------------------------
Gentlemen:
In connection with the exercise by me of an option to purchase shares
of Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the
"Company"), I hereby acknowledge that I have been informed as follows:
1. The shares of Common Stock of the Company to be issued to
me pursuant to the exercise of said option (the "Shares") have not been
registered under the Securities Act of 1933, as amended (the "Securities Act")
and, accordingly, must be held indefinitely unless the Shares are subsequently
registered under the Securities Act, or an exemption from such registration is
available.
2. Routine sales of securities made in reliance upon Rule 144 under
the Securities Act can be made only after the holding period provided by that
Rule has been satisfied, and, in any sale to which that Rule is not applicable,
registration or compliance with some other exemption under the Securities Act
will be required.
3. The availability of Rule 144 is dependent upon adequate
current public information with respect to the Company being available and, at
the time that I may desire to make a sale pursuant to the Rule, the Company may
neither wish nor be able to comply with such requirement.
In consideration of the issuance of certificates for the Shares to me,
I hereby represent and warrant that I am acquiring the Shares for my own account
for investment, and that I will not sell, pledge or transfer the Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and
warranty, I agree that there may be affixed to the certificates for the Shares
to be issued to me, and to all certificates issued hereafter representing the
Shares (until in the opinion of counsel, which opinion must be reasonably
satisfactory in form and substance to counsel for the Company, it is no longer
necessary or required) a legend as follows:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and were
acquired by the registered holder pursuant to a representation and
warranty that such holder was acquiring the Shares for his own
account and for investment, with no intention of transfer or
disposition of the same in violation of the registration requirements
of that Act. These securities may not be sold, pledged, or transferred
in the absence of an effective registration statement under such Act,
or an opinion of counsel, which opinion is reasonably satisfactory to
counsel to the Company, to the effect that registration is not required
under such Act."
-6-
<PAGE>
I further agree that the Company may place a stop transfer order with
its transfer agent, prohibiting the transfer of the Shares, so long as the
legend remains on the certificates representing the Shares.
Very truly yours,
/s/ Eli Pines
Dated: 7/30/98
-----------
-7-
<PAGE>
EXHIBIT 2
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
The undersigned Optionee hereby elects and agrees that, whenever the
undersigned exercises a stock option (including any options which now or may
hereafter be granted), Life Medical Sciences, Inc. (the "Company") shall
withhold from that exercise such number of Shares equal in value to the federal
and state withholding taxes due upon such exercise. The undersigned further
acknowledges and agrees that this election may not be revoked without six (6)
months' prior written notice to the Company.
OPTIONEE:
--------------------------------------------
(Signature)
--------------------------------------------
(Print Name)
-8-
<PAGE>
Exhibit 10.63
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED 1992 STOCK OPTION PLAN
(non-qualified stock option)
AGREEMENT entered into as of the date set forth on the signature page hereto
by and between Life Medical Sciences, Inc., a Delaware corporation, with a
principal place of business at 379 Thornall Street, Edison, New Jersey (together
with its subsidiaries, if any, the "Company"), and the undersigned (the
"Optionee").
WHEREAS, the Company desires to grant to the Optionee a non-qualified stock
option under the Company's Amended and Restated 1992 Stock Option Plan (the
"Plan") to acquire shares of the Company's Common Stock, $.001 par value (the
"Shares"); and
WHEREAS, the Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option.
---------------
The Company hereby grants to the Optionee a non-qualified stock option under
the Plan (the "Option") to purchase all or any part of an aggregate of the
number of Shares set forth on the signature page to this Agreement on the terms
and conditions hereinafter set forth. The Option shall NOT be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
--------------
The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the dollar amount per share set forth on the signature page to this
Agreement.
3. Time of Vesting and Exercise of Option.
--------------------------------------
Subject to Section 4 hereof, the Option shall vest and become exercisable on
the dates and as to the installment amounts set forth on the signature page to
this Agreement. To the extent the Option (or any portion thereof) is not
exercised by the Optionee when it becomes exercisable, it shall not expire, but
shall be carried forward and shall be exercisable, on a cumulative basis, until
the Expiration Date (as hereinafter defined) or until earlier termination as
hereinafter provided.
<PAGE>
4. Term; Extent of Exercisability.
------------------------------
(a) Term.
(i) The Option shall expire as to each installment amount on the
date set forth next to each such amount on the signature page to this
Agreement (the "Expiration Date"), subject to earlier termination as
herein provided.
(ii) Except as otherwise provided in this Section 4, if the Optionee
ceases to perform services for the Company, the Option shall
terminate on the earlier of the last day of the third month or ninety
days after the date such Optionee ceases to perform services for the
Company, or on the date on which the Option expires by its terms,
whichever occurs first.
(iii) If such termination to perform services is because of
dismissal for cause or because the Optionee is in breach of any
employment agreement, such Option will terminate on the date the
Optionee ceases to perform services for the Company.
(iv) If such termination to perform services is because the Optionee
has become permanently disabled (within the meaning of Section
22(e)(3) of the Code), such Option shall terminate on the last day of
the twelfth month from the date such Optionee ceases to perform
services for the Company, or on the date on which the Option expires
by its terms, whichever occurs first.
(v) In the event of the death of the Optionee, the Option granted to
such Optionee shall terminate on the last day of the twelfth month
from the date of death, or on the date on which the Option expires by
its terms, whichever occurs first.
(b) Extent of Exercisability.
------------------------
(i) Except as provided below, if the Optionee ceases to perform
services for the Company, the Option shall be exercisable only to the
extent that the right to purchase Shares under such Option has
accrued and is in effect on the date such Optionee ceases to perform
services for the Company.
(ii) If the Optionee ceases to perform services for the Company
because he or she has become permanently disabled (within the meaning
of Section 22(e)(3) of the Code), the Option shall be exercisable to
the full number of Shares covered by such Option.
-2-
<PAGE>
(iii) In the event of the death of the Optionee, the Option may be
exercised with respect to the full number of Shares covered thereby
whether or not under the provisions of Section 3 hereof the Optionee
was entitled to do so at the date of his or her death, by the estate
of such Optionee, or by any person or persons who acquired the right
to exercise such Option by bequest or inheritance or by reason of the
death of such Optionee.
5. Manner of Exercise of Option.
----------------------------
(a) To the extent that the right to exercise the Option has accrued and is
in effect, the Option may be exercised in full or in part by giving written
notice to the Company stating the number of Shares as to which the Option
is being exercised and accompanied by payment in full for such Shares. No
partial exercise may be made for less than one hundred (100) full Shares of
Common Stock. Payment shall be made in accordance with the terms of the
Plan. Upon such exercise, delivery of a certificate for paid-up, non-
assessable Shares shall be made at the principal office of the Company to
the person exercising the Option, not less than thirty (30) and not more
than ninety (90) days from the date of receipt of the notice by the
Company.
(b) The Company shall at all times during the term of the Option reserve
and keep available such number of Shares of its Common Stock as will be
sufficient to satisfy the requirements of the Option.
6. Non-Transferability.
-------------------
The right of the Optionee to exercise the Option shall not be assignable or
transferable by the Optionee otherwise than by will or the laws or descent and
distribution or pursuant to a domestic relations order as defined in the Code or
Title 1 of the Employee Retirement Income Security Act or the rules thereunder,
and the Option may be exercised during the lifetime of the Optionee only by him
or her. The Option shall be null and void and without effect upon the bankruptcy
of the Optionee or upon any attempted assignment or transfer, except as herein
provided, including without limitation any purported assignment, whether
voluntary or by operation of law, pledge, hypothecation or other disposition
contrary to the provisions hereof, or levy of execution, attachment, trustee
process or similar process, whether legal or equitable, upon the Option.
7. Representation Letter and Investment Legend.
-------------------------------------------
In the event that for any reason the Shares to be issued upon exercise of the
Option shall not be effectively registered under the Securities Act of 1933 ("
1933 Act"), upon any date on which the Option is exercised in whole or in part,
the person exercising the Option shall give a written representation to the
Company in the form attached hereto as Exhibit 1 and the Company shall place an
"investment legend", so-called, as described in Exhibit 1, upon any certificate
for the Shares issued by reason of such exercise.
-3-
<PAGE>
8. Adjustments on Changes in Capitalization.
----------------------------------------
Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Option.
9. No Special Employment Rights.
----------------------------
The provisions of this Section 9 are applicable only to Optionee's who are
employees of the Company. Nothing contained in the Plan or this Option shall be
construed or deemed by any person under any circumstances to bind the Company to
continue the employment of the Optionee for the period within which this Option
may be exercised. However, during the period of the Optionee's employment, the
Optionee shall render diligently and faithfully the services which are assigned
to the Optionee from time to time by the Board of Directors or by the executive
officers of the Company and shall at no time take any action which directly or
indirectly would be inconsistent with the best interests of the Company.
10. Rights as a Stockholder.
-----------------------
The Optionee shall have no rights as a stockholder with respect to any Shares
which may be purchased by exercise of this Option unless and until a certificate
or certificates representing such Shares are duly issued and delivered to the
Optionee. Except as otherwise expressly provided in the Plan, no adjustment
shall be made for dividends or other rights for which the record date is prior
to the date such stock certificate is issued.
11. Withholding Taxes.
-----------------
Whenever Shares are to be issued upon exercise of this Option, the Company
shall have the right to require the Optionee to remit to the Company an amount
sufficient to satisfy all Federal, state and local withholding tax requirements
prior to the delivery of any certificate or certificates for the Shares. The
Company may agree to permit the Optionee to authorize the Company to withhold
Shares of Common Stock purchased upon exercise of the Option to satisfy the
above-mentioned withholding requirement; provided, however, no such agreement
may be made by an Optionee who is an officer or director within the meaning of
Section 16 of the Securities Exchange Act of 1934, as amended, except pursuant
to a standing election to so withhold Shares of Common Stock purchased upon
exercise of the Option, such election to be made in the form set forth in
Exhibit 2 hereto and to be made not less than six (6) months prior to such
exercise. Such election may be revoked only upon providing six (6) months prior
written notice to the Company.
12. Plan Provisions Control.
-----------------------
In the event of any inconsistency between the provisions of this Agreement and
the provisions of the Plan, the inconsistent provision(s) of this Agreement
shall be superseded by the Plan provision(s) to the extent necessary to
reconcile the inconsistency.
-4-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed, and
the Optionee has hereunto set his or her hand, all as of the 28th day of May,
1998.
LIFE MEDICAL SCIENCES, INC.
By:
--------------------------------------
OPTIONEE
Print Name: Edward Celano
-------------------------------
Sign Name: /s/ Edward Celano
-------------------------------
OPTION INFORMATION
------------------
Total Number of Shares Underlying Option: 50,000
Purchase Price Per Share: $ 2.00
VESTING & EXPIRATION SCHEDULE
-----------------------------
Vesting Date Number of Shares Expiration Date
- ------------ ---------------- ---------------
March 5, 1997 16,667 March 5, 2002
March 5, 1998 16,667 March 5, 2003
March 5, 1999 16,666 March 5, 2004
This agreement supersedes the previous agreement dated March 5, 1997.
-5-
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
In connection with the exercise by me of an option to purchase shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company"), I
hereby acknowledge that I have been informed as follows:
1. The shares of Common Stock of the Company to be issued to me pursuant to
the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held indefinitely unless the Shares are subsequently registered under the
Securities Act, or an exemption from such registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
Securities Act can be made only after the holding period provided by that Rule
has been satisfied, and, in any sale to which that Rule is not applicable,
registration or compliance with some other exemption under the Securities Act
will be required.
3. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.
In consideration of the issuance of certificates for the Shares to me, I
hereby represent and warrant that I am acquiring the Shares for my own account
for investment, and that I will not sell, pledge or transfer the Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and warranty,
I agree that there may be affixed to the certificates for the Shares to be
issued to me, and to all certificates issued hereafter representing the Shares
(until in the opinion of counsel, which opinion must be reasonably satisfactory
in form and substance to counsel for the Company, it is no longer necessary or
required) a legend as follows:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and were acquired by the
registered holder pursuant to a representation and warranty that such
holder was acquiring the Shares for his own account and for investment,
with no intention of transfer or disposition of the same in violation of
the registration requirements of that Act. These securities may not be
sold, pledged, or transferred in the absence of an effective registration
statement under such Act, or an opinion of counsel, which opinion is
reasonably satisfactory to counsel to the Company, to the effect that
registration is not required under such Act."
I further agree that the Company may place a stop transfer order with its
transfer agent,
-6-
<PAGE>
prohibiting the transfer of the Shares, so long as the legend remains on the
certificates representing the Shares.
Very truly yours,
/s/ Edward Celano
Dated: 7/3/98
----------
-7-
<PAGE>
EXHIBIT 2
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
The undersigned Optionee hereby elects and agrees that, whenever the
undersigned exercises a stock option (including any options which now or may
hereafter be granted), Life Medical Sciences, Inc. (the "Company") shall
withhold from that exercise such number of Shares equal in value to the federal
and state withholding taxes due upon such exercise. The undersigned further
acknowledges and agrees that this election may not be revoked without six (6)
months' prior written notice to the Company.
OPTIONEE:
/s/ Edward Celano
--------------------------------------------
(Signature)
Edward Celano
--------------------------------------------
(Print Name)
-8-
<PAGE>
EXHIBIT 10.64
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED 1992 STOCK OPTION PLAN
(non-qualified stock option)
AGREEMENT entered into as of the date set forth on the signature page hereto
by and between Life Medical Sciences, Inc., a Delaware corporation, with a
principal place of business at 379 Thornall Street, Edison, New Jersey (together
with its subsidiaries, if any, the "Company"), and the undersigned (the
"Optionee").
WHEREAS, the Company desires to grant to the Optionee a non-qualified stock
option under the Company's Amended and Restated 1992 Stock Option Plan (the
"Plan") to acquire shares of the Company's Common Stock, $.001 par value (the
"Shares"); and
WHEREAS, the Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option.
---------------
The Company hereby grants to the Optionee a non-qualified stock option under
the Plan (the "Option") to purchase all or any part of an aggregate of the
number of Shares set forth on the signature page to this Agreement on the terms
and conditions hereinafter set forth. The Option shall NOT be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
--------------
The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the dollar amount per share set forth on the signature page to this
Agreement.
3. Time of Vesting and Exercise of Option.
--------------------------------------
Subject to Section 4 hereof, the Option shall vest and become exercisable
on the dates and as to the installment amounts set forth on the signature page
to this Agreement. To the extent the Option (or any portion thereof) is not
exercised by the Optionee when it becomes exercisable, it shall not expire, but
shall be carried forward and shall be exercisable, on a cumulative basis, until
the Expiration Date (as hereinafter defined) or until earlier termination as
hereinafter provided.
<PAGE>
4. Term; Extent of Exercisability.
------------------------------
(a) Term.
(i) The Option shall expire as to each installment amount on the
date set forth next to each such amount on the signature page to this
Agreement (the "Expiration Date"), subject to earlier termination as
herein provided.
(ii) Except as otherwise provided in this Section 4, if the Optionee
ceases to perform services for the Company, the Option shall terminate
on the earlier of the last day of the third month or ninety days after
the date such Optionee ceases to perform services for the Company, or
on the date on which the Option expires by its terms, whichever occurs
first.
(iii) If such termination to perform services is because of dismissal
for cause or because the Optionee is in breach of any employment
agreement, such Option will terminate on the date the Optionee ceases
to perform services for the Company.
(iv) If such termination to perform services is because the Optionee
has become permanently disabled (within the meaning of Section
22(e)(3) of the Code), such Option shall terminate on the last day of
the twelfth month from the date such Optionee ceases to perform
services for the Company, or on the date on which the Option expires
by its terms, whichever occurs first.
(v) In the event of the death of the Optionee, the Option granted to
such Optionee shall terminate on the last day of the twelfth month
from the date of death, or on the date on which the Option expires by
its terms, whichever occurs first.
(b) Extent of Exercisability.
------------------------
(i) Except as provided below, if the Optionee ceases to perform
services for the Company, the Option shall be exercisable only to the
extent that the right to purchase Shares under such Option has accrued
and is in effect on the date such Optionee ceases to perform services
for the Company.
(ii) If the Optionee ceases to perform services for the Company
because he or she has become permanently disabled (within the meaning
of Section 22(e)(3) of the Code), the Option shall be exercisable to
the full number of Shares covered by such Option.
-2-
<PAGE>
(iii) In the event of the death of the Optionee, the Option may be
exercised with respect to the full number of Shares covered thereby
whether or not under the provisions of Section 3 hereof the Optionee
was entitled to do so at the date of his or her death, by the estate
of such Optionee, or by any person or persons who acquired the right
to exercise such Option by bequest or inheritance or by reason of the
death of such Optionee.
5. Manner of Exercise of Option.
----------------------------
(a) To the extent that the right to exercise the Option has accrued and is
in effect, the Option may be exercised in full or in part by giving written
notice to the Company stating the number of Shares as to which the Option
is being exercised and accompanied by payment in full for such Shares. No
partial exercise may be made for less than one hundred (100) full Shares of
Common Stock. Payment shall be made in accordance with the terms of the
Plan. Upon such exercise, delivery of a certificate for paid-up, non-
assessable Shares shall be made at the principal office of the Company to
the person exercising the Option, not less than thirty (30) and not more
than ninety (90) days from the date of receipt of the notice by the
Company.
(b) The Company shall at all times during the term of the Option reserve
and keep available such number of Shares of its Common Stock as will be
sufficient to satisfy the requirements of the Option.
6. Non-Transferability.
-------------------
The right of the Optionee to exercise the Option shall not be assignable
or transferable by the Optionee otherwise than by will or the laws or descent
and distribution or pursuant to a domestic relations order as defined in the
Code or Title 1 of the Employee Retirement Income Security Act or the rules
thereunder, and the Option may be exercised during the lifetime of the Optionee
only by him or her. The Option shall be null and void and without effect upon
the bankruptcy of the Optionee or upon any attempted assignment or transfer,
except as herein provided, including without limitation any purported
assignment, whether voluntary or by operation of law, pledge, hypothecation or
other disposition contrary to the provisions hereof, or levy of execution,
attachment, trustee process or similar process, whether legal or equitable, upon
the Option.
7. Representation Letter and Investment Legend.
-------------------------------------------
In the event that for any reason the Shares to be issued upon exercise of
the Option shall not be effectively registered under the Securities Act of 1933
(" 1933 Act"), upon any date on which the Option is exercised in whole or in
part, the person exercising the Option shall give a written representation to
the Company in the form attached hereto as Exhibit 1 and
-3-
<PAGE>
the Company shall place an "investment legend", so-called, as described in
Exhibit 1, upon any certificate for the Shares issued by reason of such
exercise.
8. Adjustments on Changes in Capitalization.
----------------------------------------
Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Option.
9. No Special Employment Rights.
----------------------------
The provisions of this Section 9 are applicable only to Optionees who are
employees of the Company. Nothing contained in the Plan or this Option shall be
construed or deemed by any person under any circumstances to bind the Company to
continue the employment of the Optionee for the period within which this Option
may be exercised. However, during the period of the Optionee's employment, the
Optionee shall render diligently and faithfully the services which are assigned
to the Optionee from time to time by the Board of Directors or by the executive
officers of the Company and shall at no time take any action which directly or
indirectly would be inconsistent with the best interests of the Company.
10. Rights as a Stockholder.
-----------------------
The Optionee shall have no rights as a stockholder with respect to any
Shares which may be purchased by exercise of this Option unless and until a
certificate or certificates representing such Shares are duly issued and
delivered to the Optionee. Except as otherwise expressly provided in the Plan,
no adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.
11. Withholding Taxes.
-----------------
Whenever Shares are to be issued upon exercise of this Option, the
Company shall have the right to require the Optionee to remit to the Company an
amount sufficient to satisfy all Federal, state and local withholding tax
requirements prior to the delivery of any certificate or certificates for the
Shares. The Company may agree to permit the Optionee to authorize the Company to
withhold Shares of Common Stock purchased upon exercise of the Option to satisfy
the above-mentioned withholding requirement; provided, however, no such
agreement may be made by an Optionee who is an officer or director within the
meaning of Section 16 of the Securities Exchange Act of 1934, as amended, except
pursuant to a standing election to so withhold Shares of Common Stock purchased
upon exercise of the Option, such election to be made in the form set forth in
Exhibit 2 hereto and to be made not less than six (6) months prior to such
exercise. Such election may be revoked only upon providing six (6) months prior
written notice to the Company.
-4-
<PAGE>
12. Plan Provisions Control.
-----------------------
In the event of any inconsistency between the provisions of this
Agreement and the provisions of the Plan, the inconsistent provision(s) of this
Agreement shall be superseded by the Plan provision(s) to the extent necessary
to reconcile the inconsistency.
-5-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed,
and the Optionee has hereunto set his or her hand, all as of the 28th day of
May, 1998.
LIFE MEDICAL SCIENCES, INC.
By: /s/ Edward A. Celano
---------------------------------------------
OPTIONEE
Print Name: Edward A. Celano
--------------------------------------
Sign Name: /s/ Edward A. Celano
--------------------------------------
OPTION INFORMATION
------------------
Total Number of Shares Underlying Option: 100,000
Purchase Price Per Share: $2.00
VESTING & EXPIRATION SCHEDULE
-----------------------------
Vesting Date Number of Shares Expiration Date
- ------------ ---------------- ---------------
May 28, 1998 100,000 May 28, 2005
-6-
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
In connection with the exercise by me of an option to purchase shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company"), I
hereby acknowledge that I have been informed as follows:
1. The shares of Common Stock of the Company to be issued to me pursuant to
the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held indefinitely unless the Shares are subsequently registered under the
Securities Act, or an exemption from such registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
Securities Act can be made only after the holding period provided by that Rule
has been satisfied, and, in any sale to which that Rule is not applicable,
registration or compliance with some other exemption under the Securities Act
will be required.
3. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.
In consideration of the issuance of certificates for the Shares to me, I
hereby represent and warrant that I am acquiring the Shares for my own account
for investment, and that I will not sell, pledge or transfer the Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and warranty,
I agree that there may be affixed to the certificates for the Shares to be
issued to me, and to all certificates issued hereafter representing the Shares
(until in the opinion of counsel, which opinion must be reasonably satisfactory
in form and substance to counsel for the Company, it is no longer necessary or
required) a legend as follows:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and were acquired by the
registered holder pursuant to a representation and warranty that such
holder was acquiring the Shares for his own account and for investment,
with no intention of transfer or disposition of the same in violation of
the registration requirements of that Act. These securities may not be
sold, pledged, or transferred in the absence of an effective registration
statement under such Act, or an opinion of counsel, which opinion is
reasonably satisfactory to counsel to the Company, to the effect that
registration is not required under such Act."
-7-
<PAGE>
I further agree that the Company may place a stop transfer order with its
transfer agent, prohibiting the transfer of the Shares, so long as the legend
remains on the certificates representing the Shares.
Very truly yours,
/s/ Edward A. Celano
Dated: _____________
-8-
<PAGE>
EXHIBIT 10.65
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED 1992 STOCK OPTION PLAN
(non-qualified stock option)
AGREEMENT entered into as of the date set forth on the signature page hereto
by and between Life Medical Sciences, Inc., a Delaware corporation, with a
principal place of business at 379 Thornall Street, Edison, New Jersey (together
with its subsidiaries, if any, the "Company"), and the undersigned (the
"Optionee").
WHEREAS, the Company desires to grant to the Optionee a non-qualified stock
option under the Company's Amended and Restated 1992 Stock Option Plan (the
"Plan") to acquire shares of the Company's Common Stock, $.001 par value (the
"Shares"); and
WHEREAS, the Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option.
---------------
The Company hereby grants to the Optionee a non-qualified stock option under
the Plan (the "Option") to purchase all or any part of an aggregate of the
number of Shares set forth on the signature page to this Agreement on the terms
and conditions hereinafter set forth. The Option shall NOT be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
--------------
The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the dollar amount per share set forth on the signature page to this
Agreement.
3. Time of Vesting and Exercise of Option.
--------------------------------------
Subject to Section 4 hereof, the Option shall vest and become exercisable
on the dates and as to the installment amounts set forth on the signature page
to this Agreement. To the extent the Option (or any portion thereof) is not
exercised by the Optionee when it becomes exercisable, it shall not expire, but
shall be carried forward and shall be exercisable, on a cumulative basis, until
the Expiration Date (as hereinafter defined) or until earlier termination as
hereinafter provided.
<PAGE>
4. Term; Extent of Exercisability.
------------------------------
(a) Term.
(i) The Option shall expire as to each installment amount on the
date set forth next to each such amount on the signature page to this
Agreement (the "Expiration Date"), subject to earlier termination as
herein provided.
(ii) Except as otherwise provided in this Section 4, if the Optionee
ceases to perform services for the Company, the Option shall terminate
on the earlier of the last day of the third month or ninety days after
the date such Optionee ceases to perform services for the Company, or
on the date on which the Option expires by its terms, whichever occurs
first.
(iii) If such termination to perform services is because of dismissal
for cause or because the Optionee is in breach of any employment
agreement, such Option will terminate on the date the Optionee ceases
to perform services for the Company.
(iv) If such termination to perform services is because the Optionee
has become permanently disabled (within the meaning of Section
22(e)(3) of the Code), such Option shall terminate on the last day of
the twelfth month from the date such Optionee ceases to perform
services for the Company, or on the date on which the Option expires
by its terms, whichever occurs first.
(v) In the event of the death of the Optionee, the Option granted
to such Optionee shall terminate on the last day of the twelfth month
from the date of death, or on the date on which the Option expires by
its terms, whichever occurs first.
(b) Extent of Exercisability.
------------------------
(i) Except as provided below, if the Optionee ceases to perform
services for the Company, the Option shall be exercisable only to the
extent that the right to purchase Shares under such Option has accrued
and is in effect on the date such Optionee ceases to perform services
for the Company.
(ii) If the Optionee ceases to perform services for the Company
because he or she has become permanently disabled (within the meaning
of Section 22(e)(3) of the Code), the Option shall be exercisable to
the full number of Shares covered by such Option.
-2-
<PAGE>
(iii) In the event of the death of the Optionee, the Option may be
exercised with respect to the full number of Shares covered thereby
whether or not under the provisions of Section 3 hereof the Optionee
was entitled to do so at the date of his or her death, by the estate
of such Optionee, or by any person or persons who acquired the right
to exercise such Option by bequest or inheritance or by reason of the
death of such Optionee.
5. Manner of Exercise of Option.
----------------------------
(a) To the extent that the right to exercise the Option has accrued and is
in effect, the Option may be exercised in full or in part by giving written
notice to the Company stating the number of Shares as to which the Option
is being exercised and accompanied by payment in full for such Shares. No
partial exercise may be made for less than one hundred (100) full Shares of
Common Stock. Payment shall be made in accordance with the terms of the
Plan. Upon such exercise, delivery of a certificate for paid-up, non-
assessable Shares shall be made at the principal office of the Company to
the person exercising the Option, not less than thirty (30) and not more
than ninety (90) days from the date of receipt of the notice by the
Company.
(b) The Company shall at all times during the term of the Option reserve
and keep available such number of Shares of its Common Stock as will be
sufficient to satisfy the requirements of the Option.
6. Non-Transferability.
-------------------
The right of the Optionee to exercise the Option shall not be assignable or
transferable by the Optionee otherwise than by will or the laws or descent and
distribution or pursuant to a domestic relations order as defined in the Code or
Title 1 of the Employee Retirement Income Security Act or the rules thereunder,
and the Option may be exercised during the lifetime of the Optionee only by him
or her. The Option shall be null and void and without effect upon the bankruptcy
of the Optionee or upon any attempted assignment or transfer, except as herein
provided, including without limitation any purported assignment, whether
voluntary or by operation of law, pledge, hypothecation or other disposition
contrary to the provisions hereof, or levy of execution, attachment, trustee
process or similar process, whether legal or equitable, upon the Option.
7. Representation Letter and Investment Legend.
-------------------------------------------
In the event that for any reason the Shares to be issued upon exercise of
the Option shall not be effectively registered under the Securities Act of 1933
(" 1933 Act"), upon any date on which the Option is exercised in whole or in
part, the person exercising the Option shall give a written representation to
the Company in the form attached hereto as Exhibit 1 and
-3-
<PAGE>
the Company shall place an "investment legend", so-called, as described in
Exhibit 1, upon any certificate for the Shares issued by reason of such
exercise.
8. Adjustments on Changes in Capitalization.
----------------------------------------
Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Option.
9. No Special Employment Rights.
----------------------------
The provisions of this Section 9 are applicable only to Optionee's who are
employees of the Company. Nothing contained in the Plan or this Option shall be
construed or deemed by any person under any circumstances to bind the Company to
continue the employment of the Optionee for the period within which this Option
may be exercised. However, during the period of the Optionee's employment, the
Optionee shall render diligently and faithfully the services which are assigned
to the Optionee from time to time by the Board of Directors or by the executive
officers of the Company and shall at no time take any action which directly or
indirectly would be inconsistent with the best interests of the Company.
10. Rights as a Stockholder.
-----------------------
The Optionee shall have no rights as a stockholder with respect to any
Shares which may be purchased by exercise of this Option unless and until a
certificate or certificates representing such Shares are duly issued and
delivered to the Optionee. Except as otherwise expressly provided in the Plan,
no adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.
11. Withholding Taxes.
-----------------
Whenever Shares are to be issued upon exercise of this Option, the
Company shall have the right to require the Optionee to remit to the Company an
amount sufficient to satisfy all Federal, state and local withholding tax
requirements prior to the delivery of any certificate or certificates for the
Shares. The Company may agree to permit the Optionee to authorize the Company to
withhold Shares of Common Stock purchased upon exercise of the Option to satisfy
the above-mentioned withholding requirement; provided, however, no such
agreement may be made by an Optionee who is an officer or director within the
meaning of Section 16 of the Securities Exchange Act of 1934, as amended, except
pursuant to a standing election to so withhold Shares of Common Stock purchased
upon exercise of the Option, such election to be made in the form set forth in
Exhibit 2 hereto and to be made not less than six (6) months prior to such
exercise. Such election may be revoked only upon providing six (6) months prior
written notice to the Company.
-4-
<PAGE>
12. Plan Provisions Control.
-----------------------
In the event of any inconsistency between the provisions of this
Agreement and the provisions of the Plan, the inconsistent provision(s) of this
Agreement shall be superseded by the Plan provision(s) to the extent necessary
to reconcile the inconsistency.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed,
and the Optionee has hereunto set his or her hand, all as of the 28th day of
May, 1998.
LIFE MEDICAL SCIENCES, INC.
By: /s/ Coy Eklund
-------------------------------------------
OPTIONEE
Print Name: Coy Eklund
----------------------------------
Sign Name: /s/ Coy Eklund
----------------------------------
OPTION INFORMATION
------------------
Total Number of Shares Underlying Option: 2,500
Purchase Price Per Share: $ 4.75
VESTING & EXPIRATION SCHEDULE
-----------------------------
Vesting Date Number of Shares Expiration Date
- ------------ ---------------- ---------------
June 18, 1997 2,500 June 18, 2002
This agreement supercedes the previous agreement dated June 18, 1997.
-5-
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
In connection with the exercise by me of an option to purchase shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company"), I
hereby acknowledge that I have been informed as follows:
1. The shares of Common Stock of the Company to be issued to me pursuant to
the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held indefinitely unless the Shares are subsequently registered under the
Securities Act, or an exemption from such registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
Securities Act can be made only after the holding period provided by that Rule
has been satisfied, and, in any sale to which that Rule is not applicable,
registration or compliance with some other exemption under the Securities Act
will be required.
3. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.
In consideration of the issuance of certificates for the Shares to me, I
hereby represent and warrant that I am acquiring the Shares for my own account
for investment, and that I will not sell, pledge or transfer the Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and warranty,
I agree that there may be affixed to the certificates for the Shares to be
issued to me, and to all certificates issued hereafter representing the Shares
(until in the opinion of counsel, which opinion must be reasonably satisfactory
in form and substance to counsel for the Company, it is no longer necessary or
required) a legend as follows:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and were acquired by the
registered holder pursuant to a representation and warranty that such
holder was acquiring the Shares for his own account and for investment,
with no intention of transfer or disposition of the same in violation of
the registration requirements of that Act. These securities may not be
sold, pledged, or transferred in the absence of an effective registration
statement under such Act, or an opinion of counsel, which opinion is
reasonably satisfactory to counsel to the Company, to the effect that
registration is not required under such Act."
-6-
<PAGE>
I further agree that the Company may place a stop transfer order with its
transfer agent, prohibiting the transfer of the Shares, so long as the legend
remains on the certificates representing the Shares.
Very truly yours,
/s/ Coy Eklund
Dated: _____________
-7-
<PAGE>
EXHIBIT 2
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
The undersigned Optionee hereby elects and agrees that, whenever the
undersigned exercises a stock option (including any options which now or may
hereafter be granted), Life Medical Sciences, Inc. (the "Company") shall
withhold from that exercise such number of Shares equal in value to the federal
and state withholding taxes due upon such exercise. The undersigned further
acknowledges and agrees that this election may not be revoked without six (6)
months' prior written notice to the Company.
OPTIONEE:
/s/ Coy Eklund
-----------------------------------------------
(Signature)
Coy Eklund
-----------------------------------------------
(Print Name)
-8-
<PAGE>
Exhibit 10.66
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED 1992 STOCK OPTION PLAN
(non-qualified stock option)
AGREEMENT entered into as of the date set forth on the signature page hereto
by and between Life Medical Sciences, Inc., a Delaware corporation, with a
principal place of business at 379 Thornall Street, Edison, New Jersey (together
with its subsidiaries, if any, the "Company"), and the undersigned (the
"Optionee").
WHEREAS, the Company desires to grant to the Optionee a non-qualified stock
option under the Company's Amended and Restated 1992 Stock Option Plan (the
"Plan") to acquire shares of the Company's Common Stock, $.001 par value (the
"Shares"); and
WHEREAS, the Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option.
---------------
The Company hereby grants to the Optionee a non-qualified stock option under
the Plan (the "Option") to purchase all or any part of an aggregate of the
number of Shares set forth on the signature page to this Agreement on the terms
and conditions hereinafter set forth. The Option shall NOT be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
--------------
The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the dollar amount per share set forth on the signature page to this
Agreement.
3. Time of Vesting and Exercise of Option.
--------------------------------------
Subject to Section 4 hereof, the Option shall vest and become exercisable on
the dates and as to the installment amounts set forth on the signature page to
this Agreement. To the extent the Option (or any portion thereof) is not
exercised by the Optionee when it becomes exercisable, it shall not expire, but
shall be carried forward and shall be exercisable, on a cumulative basis, until
the Expiration Date (as hereinafter defined) or until earlier termination as
hereinafter provided.
<PAGE>
4. Term; Extent of Exercisability.
------------------------------
(a) Term.
(i) The Option shall expire as to each installment amount on the
date set forth next to each such amount on the signature page to this
Agreement (the "Expiration Date"), subject to earlier termination as
herein provided.
(ii) Except as otherwise provided in this Section 4, if the Optionee
ceases to perform services for the Company, the Option shall
terminate on the earlier of the last day of the third month or ninety
days after the date such Optionee ceases to perform services for the
Company, or on the date on which the Option expires by its terms,
whichever occurs first.
(iii) If such termination to perform services is because of
dismissal for cause or because the Optionee is in breach of any
employment agreement, such Option will terminate on the date the
Optionee ceases to perform services for the Company.
(iv) If such termination to perform services is because the Optionee
has become permanently disabled (within the meaning of Section
22(e)(3) of the Code), such Option shall terminate on the last day of
the twelfth month from the date such Optionee ceases to perform
services for the Company, or on the date on which the Option expires
by its terms, whichever occurs first.
(v) In the event of the death of the Optionee, the Option granted to
such Optionee shall terminate on the last day of the twelfth month
from the date of death, or on the date on which the Option expires by
its terms, whichever occurs first.
(b) Extent of Exercisability.
------------------------
(i) Except as provided below, if the Optionee ceases to perform
services for the Company, the Option shall be exercisable only to the
extent that the right to purchase Shares under such Option has
accrued and is in effect on the date such Optionee ceases to perform
services for the Company.
(ii) If the Optionee ceases to perform services for the Company
because he or she has become permanently disabled (within the meaning
of Section 22(e)(3) of the Code), the Option shall be exercisable to
the full number of Shares covered by such Option.
-2-
<PAGE>
(iii) In the event of the death of the Optionee, the Option may be
exercised with respect to the full number of Shares covered thereby
whether or not under the provisions of Section 3 hereof the Optionee
was entitled to do so at the date of his or her death, by the estate
of such Optionee, or by any person or persons who acquired the right
to exercise such Option by bequest or inheritance or by reason of the
death of such Optionee.
5. Manner of Exercise of Option.
----------------------------
(a) To the extent that the right to exercise the Option has accrued and is
in effect, the Option may be exercised in full or in part by giving written
notice to the Company stating the number of Shares as to which the Option
is being exercised and accompanied by payment in full for such Shares. No
partial exercise may be made for less than one hundred (100) full Shares of
Common Stock. Payment shall be made in accordance with the terms of the
Plan. Upon such exercise, delivery of a certificate for paid-up, non-
assessable Shares shall be made at the principal office of the Company to
the person exercising the Option, not less than thirty (30) and not more
than ninety (90) days from the date of receipt of the notice by the
Company.
(b) The Company shall at all times during the term of the Option reserve
and keep available such number of Shares of its Common Stock as will be
sufficient to satisfy the requirements of the Option.
6. Non-Transferability.
-------------------
The right of the Optionee to exercise the Option shall not be assignable or
transferable by the Optionee otherwise than by will or the laws or descent and
distribution or pursuant to a domestic relations order as defined in the Code or
Title 1 of the Employee Retirement Income Security Act or the rules thereunder,
and the Option may be exercised during the lifetime of the Optionee only by him
or her. The Option shall be null and void and without effect upon the bankruptcy
of the Optionee or upon any attempted assignment or transfer, except as herein
provided, including without limitation any purported assignment, whether
voluntary or by operation of law, pledge, hypothecation or other disposition
contrary to the provisions hereof, or levy of execution, attachment, trustee
process or similar process, whether legal or equitable, upon the Option.
7. Representation Letter and Investment Legend.
-------------------------------------------
In the event that for any reason the Shares to be issued upon exercise of the
Option shall not be effectively registered under the Securities Act of 1933 ("
1933 Act"), upon any date on which the Option is exercised in whole or in part,
the person exercising the Option shall give a written representation to the
Company in the form attached hereto as Exhibit 1 and
-3-
<PAGE>
the Company shall place an "investment legend", so-called, as described in
Exhibit 1, upon any certificate for the Shares issued by reason of such
exercise.
8. Adjustments on Changes in Capitalization.
----------------------------------------
Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Option.
9. No Special Employment Rights.
----------------------------
The provisions of this Section 9 are applicable only to Optionee's who are
employees of the Company. Nothing contained in the Plan or this Option shall be
construed or deemed by any person under any circumstances to bind the Company to
continue the employment of the Optionee for the period within which this Option
may be exercised. However, during the period of the Optionee's employment, the
Optionee shall render diligently and faithfully the services which are assigned
to the Optionee from time to time by the Board of Directors or by the executive
officers of the Company and shall at no time take any action which directly or
indirectly would be inconsistent with the best interests of the Company.
10. Rights as a Stockholder.
-----------------------
The Optionee shall have no rights as a stockholder with respect to any Shares
which may be purchased by exercise of this Option unless and until a certificate
or certificates representing such Shares are duly issued and delivered to the
Optionee. Except as otherwise expressly provided in the Plan, no adjustment
shall be made for dividends or other rights for which the record date is prior
to the date such stock certificate is issued.
11. Withholding Taxes.
-----------------
Whenever Shares are to be issued upon exercise of this Option, the Company
shall have the right to require the Optionee to remit to the Company an amount
sufficient to satisfy all Federal, state and local withholding tax requirements
prior to the delivery of any certificate or certificates for the Shares. The
Company may agree to permit the Optionee to authorize the Company to withhold
Shares of Common Stock purchased upon exercise of the Option to satisfy the
above-mentioned withholding requirement; provided, however, no such agreement
may be made by an Optionee who is an officer or director within the meaning of
Section 16 of the Securities Exchange Act of 1934, as amended, except pursuant
to a standing election to so withhold Shares of Common Stock purchased upon
exercise of the Option, such election to be made in the form set forth in
Exhibit 2 hereto and to be made not less than six (6) months prior to such
exercise. Such election may be revoked only upon providing six (6) months prior
written notice to the Company.
-4-
<PAGE>
12. Plan Provisions Control.
-----------------------
In the event of any inconsistency between the provisions of this Agreement and
the provisions of the Plan, the inconsistent provision(s) of this Agreement
shall be superseded by the Plan provision(s) to the extent necessary to
reconcile the inconsistency.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed, and
the Optionee has hereunto set his or her hand, all as of the 28th day of May,
1998.
LIFE MEDICAL SCIENCES, INC.
By:
--------------------------------------
OPTIONEE
Print Name: Coy Eklund
-------------------------------
Sign Name: /s/ Coy Eklund
-------------------------------
OPTION INFORMATION
------------------
Total Number of Shares Underlying Option: 25,000
Purchase Price Per Share: $ 2.00
VESTING & EXPIRATION SCHEDULE
-----------------------------
Vesting Date Number of Shares Expiration Date
- ------------ ---------------- ---------------
May 23, 1995 25,000 May 23, 2000
This agreement supersedes the previous agreement dated May 23, 1995.
-5-
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
In connection with the exercise by me of an option to purchase shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company"), I
hereby acknowledge that I have been informed as follows:
1. The shares of Common Stock of the Company to be issued to me pursuant to
the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held indefinitely unless the Shares are subsequently registered under the
Securities Act, or an exemption from such registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
Securities Act can be made only after the holding period provided by that Rule
has been satisfied, and, in any sale to which that Rule is not applicable,
registration or compliance with some other exemption under the Securities Act
will be required.
3. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.
In consideration of the issuance of certificates for the Shares to me, I
hereby represent and warrant that I am acquiring the Shares for my own account
for investment, and that I will not sell, pledge or transfer the Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and warranty,
I agree that there may be affixed to the certificates for the Shares to be
issued to me, and to all certificates issued hereafter representing the Shares
(until in the opinion of counsel, which opinion must be reasonably satisfactory
in form and substance to counsel for the Company, it is no longer necessary or
required) a legend as follows:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and were acquired by the
registered holder pursuant to a representation and warranty that such
holder was acquiring the Shares for his own account and for investment,
with no intention of transfer or disposition of the same in violation of
the registration requirements of that Act. These securities may not be
sold, pledged, or transferred in the absence of an effective registration
statement under such Act, or an opinion of counsel, which opinion is
reasonably satisfactory to counsel to the Company, to the effect that
registration is not required under such Act."
-6-
<PAGE>
I further agree that the Company may place a stop transfer order with its
transfer agent, prohibiting the transfer of the Shares, so long as the legend
remains on the certificates representing the Shares.
Very truly yours,
/s/ Coy Eklund
Dated: _____________
-7-
<PAGE>
EXHIBIT 2
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
The undersigned Optionee hereby elects and agrees that, whenever the
undersigned exercises a stock option (including any options which now or may
hereafter be granted), Life Medical Sciences, Inc. (the "Company") shall
withhold from that exercise such number of Shares equal in value to the federal
and state withholding taxes due upon such exercise. The undersigned further
acknowledges and agrees that this election may not be revoked without six (6)
months' prior written notice to the Company.
OPTIONEE:
/s/ Coy Eklund
--------------------------------------------
(Signature)
--------------------------------------------
(Print Name)
-8-
<PAGE>
Exhibit 10.67
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED 1992 STOCK OPTION PLAN
(non-qualified stock option)
AGREEMENT entered into as of the date set forth on the signature page hereto
by and between Life Medical Sciences, Inc., a Delaware corporation, with a
principal place of business at 379 Thornall Street, Edison, New Jersey (together
with its subsidiaries, if any, the "Company"), and the undersigned (the
"Optionee").
WHEREAS, the Company desires to grant to the Optionee a non-qualified stock
option under the Company's Amended and Restated 1992 Stock Option Plan (the
"Plan") to acquire shares of the Company's Common Stock, $.001 par value (the
"Shares"); and
WHEREAS, the Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option.
---------------
The Company hereby grants to the Optionee a non-qualified stock option under
the Plan (the "Option") to purchase all or any part of an aggregate of the
number of Shares set forth on the signature page to this Agreement on the terms
and conditions hereinafter set forth. The Option shall NOT be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
--------------
The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the dollar amount per share set forth on the signature page to this
Agreement.
3. Time of Vesting and Exercise of Option.
--------------------------------------
Subject to Section 4 hereof, the Option shall vest and become exercisable on
the dates and as to the installment amounts set forth on the signature page to
this Agreement. To the extent the Option (or any portion thereof) is not
exercised by the Optionee when it becomes exercisable, it shall not expire, but
shall be carried forward and shall be exercisable, on a cumulative basis, until
the Expiration Date (as hereinafter defined) or until earlier termination as
hereinafter provided.
<PAGE>
4. Term; Extent of Exercisability.
------------------------------
(a) Term.
(i) The Option shall expire as to each installment amount on the
date set forth next to each such amount on the signature page to this
Agreement (the "Expiration Date"), subject to earlier termination as
herein provided.
(ii) Except as otherwise provided in this Section 4, if the Optionee
ceases to perform services for the Company, the Option shall
terminate on the earlier of the last day of the third month or ninety
days after the date such Optionee ceases to perform services for the
Company, or on the date on which the Option expires by its terms,
whichever occurs first.
(iii) If such termination to perform services is because of
dismissal for cause or because the Optionee is in breach of any
employment agreement, such Option will terminate on the date the
Optionee ceases to perform services for the Company.
(iv) If such termination to perform services is because the Optionee
has become permanently disabled (within the meaning of Section
22(e)(3) of the Code), such Option shall terminate on the last day of
the twelfth month from the date such Optionee ceases to perform
services for the Company, or on the date on which the Option expires
by its terms, whichever occurs first.
(v) In the event of the death of the Optionee, the Option granted to
such Optionee shall terminate on the last day of the twelfth month
from the date of death, or on the date on which the Option expires by
its terms, whichever occurs first.
(b) Extent of Exercisability.
------------------------
(i) Except as provided below, if the Optionee ceases to perform
services for the Company, the Option shall be exercisable only to the
extent that the right to purchase Shares under such Option has
accrued and is in effect on the date such Optionee ceases to perform
services for the Company.
(ii) If the Optionee ceases to perform services for the Company
because he or she has become permanently disabled (within the meaning
of Section 22(e)(3) of the Code), the Option shall be exercisable to
the full number of Shares covered by such Option.
-2-
<PAGE>
(iii) In the event of the death of the Optionee, the Option may be
exercised with respect to the full number of Shares covered thereby
whether or not under the provisions of Section 3 hereof the Optionee
was entitled to do so at the date of his or her death, by the estate
of such Optionee, or by any person or persons who acquired the right
to exercise such Option by bequest or inheritance or by reason of the
death of such Optionee.
5. Manner of Exercise of Option.
----------------------------
(a) To the extent that the right to exercise the Option has accrued and is
in effect, the Option may be exercised in full or in part by giving written
notice to the Company stating the number of Shares as to which the Option
is being exercised and accompanied by payment in full for such Shares. No
partial exercise may be made for less than one hundred (100) full Shares of
Common Stock. Payment shall be made in accordance with the terms of the
Plan. Upon such exercise, delivery of a certificate for paid-up, non-
assessable Shares shall be made at the principal office of the Company to
the person exercising the Option, not less than thirty (30) and not more
than ninety (90) days from the date of receipt of the notice by the
Company.
(b) The Company shall at all times during the term of the Option reserve
and keep available such number of Shares of its Common Stock as will be
sufficient to satisfy the requirements of the Option.
6. Non-Transferability.
-------------------
The right of the Optionee to exercise the Option shall not be assignable or
transferable by the Optionee otherwise than by will or the laws or descent and
distribution or pursuant to a domestic relations order as defined in the Code or
Title 1 of the Employee Retirement Income Security Act or the rules thereunder,
and the Option may be exercised during the lifetime of the Optionee only by him
or her. The Option shall be null and void and without effect upon the bankruptcy
of the Optionee or upon any attempted assignment or transfer, except as herein
provided, including without limitation any purported assignment, whether
voluntary or by operation of law, pledge, hypothecation or other disposition
contrary to the provisions hereof, or levy of execution, attachment, trustee
process or similar process, whether legal or equitable, upon the Option.
7. Representation Letter and Investment Legend.
-------------------------------------------
In the event that for any reason the Shares to be issued upon exercise of the
Option shall not be effectively registered under the Securities Act of 1933 ("
1933 Act"), upon any date on which the Option is exercised in whole or in part,
the person exercising the Option shall give a written representation to the
Company in the form attached hereto as Exhibit 1 and
-3-
<PAGE>
the Company shall place an "investment legend", so-called, as described in
Exhibit 1, upon any certificate for the Shares issued by reason of such
exercise.
8. Adjustments on Changes in Capitalization.
----------------------------------------
Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Option.
9. No Special Employment Rights.
----------------------------
The provisions of this Section 9 are applicable only to Optionee's who are
employees of the Company. Nothing contained in the Plan or this Option shall be
construed or deemed by any person under any circumstances to bind the Company to
continue the employment of the Optionee for the period within which this Option
may be exercised. However, during the period of the Optionee's employment, the
Optionee shall render diligently and faithfully the services which are assigned
to the Optionee from time to time by the Board of Directors or by the executive
officers of the Company and shall at no time take any action which directly or
indirectly would be inconsistent with the best interests of the Company.
10. Rights as a Stockholder.
-----------------------
The Optionee shall have no rights as a stockholder with respect to any Shares
which may be purchased by exercise of this Option unless and until a certificate
or certificates representing such Shares are duly issued and delivered to the
Optionee. Except as otherwise expressly provided in the Plan, no adjustment
shall be made for dividends or other rights for which the record date is prior
to the date such stock certificate is issued.
11. Withholding Taxes.
-----------------
Whenever Shares are to be issued upon exercise of this Option, the Company
shall have the right to require the Optionee to remit to the Company an amount
sufficient to satisfy all Federal, state and local withholding tax requirements
prior to the delivery of any certificate or certificates for the Shares. The
Company may agree to permit the Optionee to authorize the Company to withhold
Shares of Common Stock purchased upon exercise of the Option to satisfy the
above-mentioned withholding requirement; provided, however, no such agreement
may be made by an Optionee who is an officer or director within the meaning of
Section 16 of the Securities Exchange Act of 1934, as amended, except pursuant
to a standing election to so withhold Shares of Common Stock purchased upon
exercise of the Option, such election to be made in the form set forth in
Exhibit 2 hereto and to be made not less than six (6) months prior to such
exercise. Such election may be revoked only upon providing six (6) months prior
written notice to the Company.
-4-
<PAGE>
12. Plan Provisions Control.
-----------------------
In the event of any inconsistency between the provisions of this Agreement and
the provisions of the Plan, the inconsistent provision(s) of this Agreement
shall be superseded by the Plan provision(s) to the extent necessary to
reconcile the inconsistency.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed, and
the Optionee has hereunto set his or her hand, all as of the 28th day of May,
1998.
LIFE MEDICAL SCIENCES, INC.
By:
--------------------------------------
OPTIONEE
Print Name: Coy Eklund
-------------------------------
Sign Name: /s/ Coy Eklund
-------------------------------
OPTION INFORMATION
------------------
Total Number of Shares Underlying Option: 47,500
Purchase Price Per Share: $ 2.00
VESTING & EXPIRATION SCHEDULE
-----------------------------
Vesting Date Number of Shares Expiration Date
- ------------ ---------------- ---------------
June 18, 1997 47,500 June 18, 2002
This agreement supersedes the previous agreement dated June 18, 1997.
-5-
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
In connection with the exercise by me of an option to purchase shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company"), I
hereby acknowledge that I have been informed as follows:
1. The shares of Common Stock of the Company to be issued to me pursuant to
the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held indefinitely unless the Shares are subsequently registered under the
Securities Act, or an exemption from such registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
Securities Act can be made only after the holding period provided by that Rule
has been satisfied, and, in any sale to which that Rule is not applicable,
registration or compliance with some other exemption under the Securities Act
will be required.
3. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.
In consideration of the issuance of certificates for the Shares to me, I
hereby represent and warrant that I am acquiring the Shares for my own account
for investment, and that I will not sell, pledge or transfer the Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and warranty,
I agree that there may be affixed to the certificates for the Shares to be
issued to me, and to all certificates issued hereafter representing the Shares
(until in the opinion of counsel, which opinion must be reasonably satisfactory
in form and substance to counsel for the Company, it is no longer necessary or
required) a legend as follows:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and were acquired by the
registered holder pursuant to a representation and warranty that such
holder was acquiring the Shares for his own account and for investment,
with no intention of transfer or disposition of the same in violation of
the registration requirements of that Act. These securities may not be
sold, pledged, or transferred in the absence of an effective registration
statement under such Act, or an opinion of counsel, which opinion is
reasonably satisfactory to counsel to the Company, to the effect that
registration is not required under such Act."
-6-
<PAGE>
I further agree that the Company may place a stop transfer order with its
transfer agent, prohibiting the transfer of the Shares, so long as the legend
remains on the certificates representing the Shares.
Very truly yours,
/s/ Coy Eklund
Dated: _____________
-7-
<PAGE>
EXHIBIT 2
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
The undersigned Optionee hereby elects and agrees that, whenever the
undersigned exercises a stock option (including any options which now or may
hereafter be granted), Life Medical Sciences, Inc. (the "Company") shall
withhold from that exercise such number of Shares equal in value to the federal
and state withholding taxes due upon such exercise. The undersigned further
acknowledges and agrees that this election may not be revoked without six (6)
months' prior written notice to the Company.
OPTIONEE:
/s/ Coy Eklund
--------------------------------------------
(Signature)
--------------------------------------------
(Print Name)
-8-
<PAGE>
EXHIBIT 10.68
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED 1992 STOCK OPTION PLAN
(non-qualified stock option)
AGREEMENT entered into as of the date set forth on the signature page
hereto by and between Life Medical Sciences, Inc., a Delaware corporation, with
a principal place of business at 214 Carnegie Center in Princeton, New Jersey
(together with its subsidiaries, if any, the "Company"), and the undersigned
(the "Optionee").
WHEREAS, the Company desires to grant to the Optionee a non-qualified stock
option under the Company's Amended and Restated 1992 Stock Option Plan (the
"Plan") to acquire shares of the Company's Common Stock, $.001 par value (the
"Shares"); and
WHEREAS, the Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1 . Grant of Option.
---------------
The Company hereby grants to the Optionee a non-qualified stock option
under the Plan (the "Option") to purchase all or any part of an aggregate of the
number of Shares set forth on the signature page to this Agreement on the terms
and conditions hereinafter set forth. The Option shall NOT be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
--------------
The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the dollar amount per share set forth on the signature page to this
Agreement.
3. Time of Vesting and Exercise of Option.
--------------------------------------
Subject to Section 4 hereof, the Option shall vest and become exercisable
on the dates and as to the installment amounts set forth on the signature page
to this Agreement. To the extent the Option (or any portion thereof) is not
exercised by the Optionee when it becomes exercisable, it shall not expire, but
shall be carried forward and shall be exercisable, on a cumulative basis, until
the Expiration Date (as hereinafter defined) or until earlier termination as
hereinafter provided.
<PAGE>
4. Term; Extent of Exercisability.
------------------------------
(a) Term.
----
(i) The Option shall expire as to each installment amount on the
date set forth next to each such amount on the signature page to
this Agreement (the "Expiration Date"), subject to earlier
termination as herein provided.
(ii) Except as otherwise provided in this Section 4, if the
Optionee ceases to perform services for the Company, the Option
shall terminate on the earlier of the last day of the third month
or ninety days after the date such Optionee ceases to perform
services for the Company, or on the date on which the Option
expires by its terms, whichever occurs first.
(iii) If such termination to perform services is because of
dismissal for cause or because the Optionee is in breach of any
employment agreement, such Option will terminate on the date the
Optionee ceases to perform services for the Company.
(iv) If such termination to perform services is because the
Optionee has become permanently disabled (within the meaning of
Section 22(e)(3) of the Code), such Option shall terminate on the
last day of the twelfth month from the date such Optionee ceases
to perform services for the Company, or on the date on which the
Option expires by its terms, whichever occurs first.
(v) In the event of the death of the Optionee, the Option granted
to such Optionee shall terminate on the last day of the twelfth
month from the date of death, or on the date on which the Option
expires by its terms, whichever occurs first.
(b) Extent of Exercisability.
------------------------
(i) Except as provided below, if the Optionee ceases to perform
services for the Company, the Option shall be exercisable only to
the extent that the right to purchase Shares under such Option
has accrued and is in effect on the date such Optionee ceases to
perform services for the Company.
(ii) If the Optionee ceases to perform services for the Company
because he or she has become permanently disabled (within the
meaning of Section 22(e)(3) of the Code), the Option shall be
exercisable to the full number of Shares covered by such Option.
-2-
<PAGE>
(iii) In the event of the death of the Optionee, the Option may
be exercised with respect to the full number of Shares covered
thereby whether or not under the provisions of Section 3 hereof
the Optionee was entitled to do so at the date of his or her
death, by the estate of such Optionee, or by any person or
persons who acquired the right to exercise such Option by bequest
or inheritance or by reason of the death of such Optionee.
5. Manner of Exercise of Option.
----------------------------
(a) To the extent that the right to exercise the Option has accrued
and is in effect, the Option may be exercised in full or in part by
giving written notice to the Company stating the number of Shares as
to which the Option is being exercised and accompanied by payment in
full for such Shares. No partial exercise may be made for less than
one hundred (100) full Shares of Common Stock. Payment shall be made
in accordance with the terms of the Plan. Upon such exercise, delivery
of a certificate for paid-up, non-assessable Shares shall be made at
the principal office of the Company to the person exercising the
Option, not less than (30) and not more than ninety (90) days from
the date of receipt of the notice by the Company.
(b) The Company shall at all times during the term of the Option
reserve and keep available such number of Shares of its Common Stock
as will be sufficient to satisfy the requirements of the Option.
6. Non-Transferability.
-------------------
The right of the Optionee to exercise the Option shall not be assignable or
transferable by the Optionee otherwise than by will or the laws or descent and
distribution or pursuant to a domestic relations order as define in the Code or
Title 1 of the Employee Retirement Income Security Act or the rules thereunder,
and the Option may be exercised during the lifetime of the Optionee only by him
or her. The Option shall be null and void and without effect upon the bankruptcy
of the Optionee or upon any attempted assignment or transfer, except as herein
provided, including without limitation any purported assignment, whether
voluntary or by operation of law, pledge, hypothecation or other disposition
contrary to the provisions hereof, or levy of execution, attachment, trustee
process or similar process, whether legal or equitable, upon the Option.
7. Representation Letter and Investment Legend.
-------------------------------------------
In the event that for any reason the Shares to be issued upon exercise of
the Option shall not be effectively registered under the Securities Act of 1933
("1933 Act"), upon any date on which the Option is exercised in whole or in
part, the person exercising the Option shall give a written representation to
the Company in the form attached hereto as Exhibit 1 and
-3-
<PAGE>
the Company shall place an "investment legend", so-called, as described in
Exhibit 1, upon any certificate for the Shares issued by reason of such
exercise.
8. Adjustments on Changes in Capitalization.
-----------------------------------------
Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Option.
9. No Special Employment Rights.
-----------------------------
The provisions of this Section 9 are applicable only to Optionees who are
employees of the Company. Nothing contained in the Plan or this Option shall be
construed or deemed by any person under any circumstances to bind the Company to
continue the employment of the Optionee for the period within which this Option
may be exercised. However, during the period of the Optionee's employment, the
Optionee shall render diligently and faithfully the services which are assigned
to the Optionee from time to time by the Board of Directors or by the executive
officers of the Company and shall at no time take any action which directly or
indirectly would be inconsistent with the best interests of the Company.
10. Rights as a Stockholder.
-----------------------
The Optionee shall have no rights as a stockholder with respect to any
Shares which may be purchased by exercise of this Option unless and until a
certificate or certificates representing such Shares are duly issued and
delivered to the Optionee. Except as otherwise expressly provided in the Plan,
no adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.
11. Withholding Taxes.
-----------------
Whenever Shares are to be issued upon exercise of this Option, the Company
shall have the right to require the Optionee to remit to the Company an amount
sufficient to satisfy all Federal, state and local withholding tax requirements
prior to the delivery of any certificate or certificates for the Shares. The
Company may agree to permit the Optionee to authorize the Company to withhold
Shares of Common Stock purchased upon exercise of the Option to satisfy the
above-mentioned withholding requirement; provided, however, no such agreement
may be made by an Optionee who is an officer or director within the meaning of
Section 16 of the Securities Exchange Act of 1934, as amended, except pursuant
to a standing election to so withhold Shares of Common Stock purchased upon
exercise of the Option, such election to be made in the form set forth in
Exhibit 2 hereto and to be made not less than six (6) months prior to such
exercise. Such election may be revoked only upon providing six (6) months prior
written notice to the Company.
-4-
<PAGE>
12. Plan Provisions Control.
-----------------------
In the event of any inconsistency between the provisions of this Agreement
and the provisions of the Plan, the inconsistent provision(s) of this Agreement
shall be superseded by the Plan provision(s) to the extent necessary to
reconcile the inconsistency.
-5-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed, and the Optionee has hereunto set his or her hand, all as of the 28th
day of May, 1998.
LIFE MEDICAL SCIENCES, INC.
By: /s/ Robert P. Hickey
-------------------------------------
OPTIONEE
Print Name: Coy Eklund
-----------------------------
Sign Name: /s/ Coy Eklund
------------------------------
Address:
------------------------------
------------------------------
Social Security Number:
------------------
OPTION INFORMATION
------------------
Total Number of Shares Underlying Option: 50,000
Purchase Price Per Share: $2.00
VESTING & EXPIRATION SCHEDULE
-----------------------------
Vesting Date Number of Shares Expiration Date
- ------------ ---------------- ---------------
May 28, 1998 50,000 May 28, 2005
-6-
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
In connection with the exercise by me of an option to purchase shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company"), I
hereby acknowledge that I have been informed as follows:
1. The shares of Common Stock of the Company to be issued to me pursuant
to the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held indefinitely unless the Shares are subsequently registered under the
Securities Act, or an exemption from such registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
Securities Act can be made only after the holding period provided by that Rule
has been satisfied, and, in any sale to which that Rule is not applicable,
registration or compliance with some other exemption under the Securities Act
will be required.
3. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.
In consideration of the issuance of certificates for the Shares to me, I
hereby represent and warrant that I am acquiring the Shares for my own account
for investment, and that I will not sell, pledge or transfer the Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and
warranty, I agree that there may be affixed to the certificates for the Shares
to be issued to me, and to all certificates issued hereafter representing the
Shares (until in the opinion of counsel, which opinion must be reasonably
satisfactory in form and substance to counsel for the Company, it is no longer
necessary or required) a legend as follows:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and were acquired by the
registered holder pursuant to a representation and warranty that such
holder was acquiring the Shares for his own account and for investment,
with no intention of transfer or disposition of the same in violation of
the registration requirements of that Act. These securities may not be
sold, pledged, or transferred in the absence of an effective registration
statement under such Act, or an opinion of counsel, which opinion is
reasonably satisfactory to counsel to the Company, to the effect that
registration is not required under such Act.
-7-
<PAGE>
I further agree that the Company may place a stop transfer order with its
transfer agent, prohibiting the transfer of the Shares, so long as the legend
remains on the certificates representing the Shares.
Very truly yours,
/s/ Coy Eklund
Dated:
---------------
-8-
<PAGE>
Exhibit 10.69
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED 1992 STOCK OPTION PLAN
(non-qualified stock option)
AGREEMENT entered into as of the date set forth on the signature page hereto
by and between Life Medical Sciences, Inc., a Delaware corporation, with a
principal place of business at 379 Thornall Street, Edison, New Jersey (together
with its subsidiaries, if any, the "Company"), and the undersigned (the
"Optionee").
WHEREAS, the Company desires to grant to the Optionee a non-qualified stock
option under the Company's Amended and Restated 1992 Stock Option Plan (the
"Plan") to acquire shares of the Company's Common Stock, $.001 par value (the
"Shares"); and
WHEREAS, the Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option.
---------------
The Company hereby grants to the Optionee a non-qualified stock option under
the Plan (the "Option") to purchase all or any part of an aggregate of the
number of Shares set forth on the signature page to this Agreement on the terms
and conditions hereinafter set forth. The Option shall NOT be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
--------------
The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the dollar amount per share set forth on the signature page to this
Agreement.
3. Time of Vesting and Exercise of Option.
--------------------------------------
Subject to Section 4 hereof, the Option shall vest and become exercisable on
the dates and as to the installment amounts set forth on the signature page to
this Agreement. To the extent the Option (or any portion thereof) is not
exercised by the Optionee when it becomes exercisable, it shall not expire, but
shall be carried forward and shall be exercisable, on a cumulative basis, until
the Expiration Date (as hereinafter defined) or until earlier termination as
hereinafter provided.
<PAGE>
4. Term; Extent of Exercisability.
------------------------------
(a) Term.
(i) The Option shall expire as to each installment amount on the date
set forth next to each such amount on the signature page to this
Agreement (the "Expiration Date"), subject to earlier termination as
herein provided.
(ii) Except as otherwise provided in this Section 4, if the Optionee
ceases to perform services for the Company, the Option shall terminate
on the earlier of the last day of the third month or ninety days after
the date such Optionee ceases to perform services for the Company, or
on the date on which the Option expires by its terms, whichever occurs
first.
(iii) If such termination to perform services is because of
dismissal for cause or because the Optionee is in breach of any
employment agreement, such Option will terminate on the date the
Optionee ceases to perform services for the Company.
(iv) If such termination to perform services is because the Optionee
has become permanently disabled (within the meaning of Section
22(e)(3) of the Code), such Option shall terminate on the last day of
the twelfth month from the date such Optionee ceases to perform
services for the Company, or on the date on which the Option expires
by its terms, whichever occurs first.
(v) In the event of the death of the Optionee, the Option granted to
such Optionee shall terminate on the last day of the twelfth month
from the date of death, or on the date on which the Option expires by
its terms, whichever occurs first.
(b) Extent of Exercisability.
------------------------
(i) Except as provided below, if the Optionee ceases to perform
services for the Company, the Option shall be exercisable only to the
extent that the right to purchase Shares under such Option has accrued
and is in effect on the date such Optionee ceases to perform services
for the Company.
(ii) If the Optionee ceases to perform services for the Company
because he or she has become permanently disabled (within the meaning
of Section 22(e)(3) of the Code), the Option shall be exercisable to
the full number of Shares covered by such Option.
-2-
<PAGE>
(iii) In the event of the death of the Optionee, the Option
may be exercised with respect to the full number of Shares covered
thereby whether or not under the provisions of Section 3 hereof the
Optionee was entitled to do so at the date of his or her death, by the
estate of such Optionee, or by any person or persons who acquired the
right to exercise such Option by bequest or inheritance or by reason
of the death of such Optionee.
5. Manner of Exercise of Option.
----------------------------
(a) To the extent that the right to exercise the Option has accrued and is
in effect, the Option may be exercised in full or in part by giving written
notice to the Company stating the number of Shares as to which the Option
is being exercised and accompanied by payment in full for such Shares. No
partial exercise may be made for less than one hundred (100) full Shares of
Common Stock. Payment shall be made in accordance with the terms of the
Plan. Upon such exercise, delivery of a certificate for paid-up, non-
assessable Shares shall be made at the principal office of the Company to
the person exercising the Option, not less than thirty (30) and not more
than ninety (90) days from the date of receipt of the notice by the
Company.
(b) The Company shall at all times during the term of the Option reserve
and keep available such number of Shares of its Common Stock as will be
sufficient to satisfy the requirements of the Option.
6. Non-Transferability.
-------------------
The right of the Optionee to exercise the Option shall not be assignable or
transferable by the Optionee otherwise than by will or the laws or descent and
distribution or pursuant to a domestic relations order as defined in the Code or
Title 1 of the Employee Retirement Income Security Act or the rules thereunder,
and the Option may be exercised during the lifetime of the Optionee only by him
or her. The Option shall be null and void and without effect upon the bankruptcy
of the Optionee or upon any attempted assignment or transfer, except as herein
provided, including without limitation any purported assignment, whether
voluntary or by operation of law, pledge, hypothecation or other disposition
contrary to the provisions hereof, or levy of execution, attachment, trustee
process or similar process, whether legal or equitable, upon the Option.
7. Representation Letter and Investment Legend.
-------------------------------------------
In the event that for any reason the Shares to be issued upon exercise of the
Option shall not be effectively registered under the Securities Act of 1933 ("
1933 Act"), upon any date on which the Option is exercised in whole or in part,
the person exercising the Option shall give a written representation to the
Company in the form attached hereto as Exhibit 1 and the Company shall place an
"investment legend", so-called, as described in Exhibit 1, upon any
-3-
<PAGE>
certificate for the Shares issued by reason of such exercise.
8. Adjustments on Changes in Capitalization.
----------------------------------------
Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Option.
9. No Special Employment Rights.
----------------------------
The provisions of this Section 9 are applicable only to Optionee's who are
employees of the Company. Nothing contained in the Plan or this Option shall be
construed or deemed by any person under any circumstances to bind the Company to
continue the employment of the Optionee for the period within which this Option
may be exercised. However, during the period of the Optionee's employment, the
Optionee shall render diligently and faithfully the services which are assigned
to the Optionee from time to time by the Board of Directors or by the executive
officers of the Company and shall at no time take any action which directly or
indirectly would be inconsistent with the best interests of the Company.
10. Rights as a Stockholder.
-----------------------
The Optionee shall have no rights as a stockholder with respect to any Shares
which may be purchased by exercise of this Option unless and until a certificate
or certificates representing such Shares are duly issued and delivered to the
Optionee. Except as otherwise expressly provided in the Plan, no adjustment
shall be made for dividends or other rights for which the record date is prior
to the date such stock certificate is issued.
11. Withholding Taxes.
-----------------
Whenever Shares are to be issued upon exercise of this Option, the Company
shall have the right to require the Optionee to remit to the Company an amount
sufficient to satisfy all Federal, state and local withholding tax requirements
prior to the delivery of any certificate or certificates for the Shares. The
Company may agree to permit the Optionee to authorize the Company to withhold
Shares of Common Stock purchased upon exercise of the Option to satisfy the
above-mentioned withholding requirement; provided, however, no such agreement
may be made by an Optionee who is an officer or director within the meaning of
Section 16 of the Securities Exchange Act of 1934, as amended, except pursuant
to a standing election to so withhold Shares of Common Stock purchased upon
exercise of the Option, such election to be made in the form set forth in
Exhibit 2 hereto and to be made not less than six (6) months prior to such
exercise. Such election may be revoked only upon providing six (6) months prior
written notice to the Company.
-4-
<PAGE>
12. Plan Provisions Control.
-----------------------
In the event of any inconsistency between the provisions of this Agreement and
the provisions of the Plan, the inconsistent provision(s) of this Agreement
shall be superseded by the Plan provision(s) to the extent necessary to
reconcile the inconsistency.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed, and
the Optionee has hereunto set his or her hand, all as of the 28th day of May,
1998.
LIFE MEDICAL SCIENCES, INC.
By:
--------------------------------------
OPTIONEE
Print Name: Joel Gold
-------------------------------
Sign Name: /s/ Joel Gold
-------------------------------
OPTION INFORMATION
------------------
Total Number of Shares Underlying Option: 10,053
Purchase Price Per Share: $ 6.00
VESTING & EXPIRATION SCHEDULE
-----------------------------
Vesting Date Number of Shares Expiration Date
- ------------ ---------------- ---------------
May 23, 1995 10,053 May 23, 2000
This agreement supersedes the previous agreement dated May 23, 1995.
-5-
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
In connection with the exercise by me of an option to purchase shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company"), I
hereby acknowledge that I have been informed as follows:
1. The shares of Common Stock of the Company to be issued to me pursuant to
the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held indefinitely unless the Shares are subsequently registered under the
Securities Act, or an exemption from such registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
Securities Act can be made only after the holding period provided by that Rule
has been satisfied, and, in any sale to which that Rule is not applicable,
registration or compliance with some other exemption under the Securities Act
will be required.
3. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.
In consideration of the issuance of certificates for the Shares to me, I
hereby represent and warrant that I am acquiring the Shares for my own account
for investment, and that I will not sell, pledge or transfer the Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and warranty,
I agree that there may be affixed to the certificates for the Shares to be
issued to me, and to all certificates issued hereafter representing the Shares
(until in the opinion of counsel, which opinion must be reasonably satisfactory
in form and substance to counsel for the Company, it is no longer necessary or
required) a legend as follows:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and were acquired by the
registered holder pursuant to a representation and warranty that such
holder was acquiring the Shares for his own account and for investment,
with no intention of transfer or disposition of the same in violation of
the registration requirements of that Act. These securities may not be
sold, pledged, or transferred in the absence of an effective registration
statement under such Act, or an opinion of counsel, which opinion is
reasonably satisfactory to counsel to the Company, to the effect that
registration is not required under such Act."
-6-
<PAGE>
I further agree that the Company may place a stop transfer order with its
transfer agent, prohibiting the transfer of the Shares, so long as the legend
remains on the certificates representing the Shares.
Very truly yours,
/s/ Joel Gold
Dated: July 6, 1998
------------
-7-
<PAGE>
EXHIBIT 2
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
The undersigned Optionee hereby elects and agrees that, whenever the
undersigned exercises a stock option (including any options which now or may
hereafter be granted), Life Medical Sciences, Inc. (the "Company") shall
withhold from that exercise such number of Shares equal in value to the federal
and state withholding taxes due upon such exercise. The undersigned further
acknowledges and agrees that this election may not be revoked without six (6)
months' prior written notice to the Company.
OPTIONEE:
/s/ Joel Gold
--------------------------------------------
(Signature)
Joel Gold
--------------------------------------------
(Print Name)
-8-
<PAGE>
EXHIBIT 10.70
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED 1992 STOCK OPTION PLAN
(non-qualified stock option)
AGREEMENT entered into as of the date set forth on the signature page hereto
by and between Life Medical Sciences, Inc., a Delaware corporation, with a
principal place of business at 214 Carnegie Center in Princeton, New Jersey
(together with its subsidiaries, if any, the "Company"), and the undersigned
(the "Optionee").
WHEREAS, the Company desires to grant to the Optionee a non-qualified stock
option under the Company's Amended and Restated 1992 Stock Option Plan (the
"Plan") to acquire shares of the Company's Common Stock, $.001 par value (the
"Shares"); and
WHEREAS, the Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option.
---------------
The Company hereby grants to the Optionee a non-qualified stock option under
the Plan (the "Option") to purchase all or any part of an aggregate of the
number of Shares set forth on the signature page to this Agreement on the terms
and conditions hereinafter set forth. The Option shall NOT be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
--------------
The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the dollar amount per share set forth on the signature page to this
Agreement.
3. Time of Vesting and Exercise of Option.
--------------------------------------
Subject to Section 4 hereof, the Option shall vest and become exercisable
on the dates and as to the installment amounts set forth on the signature page
to this Agreement. To the extent the Option (or any portion thereof) is not
exercised by the Optionee when it becomes exercisable, it shall not expire, but
shall be carried forward and shall be exercisable, on a cumulative basis, until
the Expiration Date (as hereinafter defined) or until earlier termination as
hereinafter provided.
<PAGE>
4. Term; Extent of Exercisability.
------------------------------
(a) Term.
(i) The Option shall expire as to each installment amount on the
date set forth next to each such amount on the signature page to this
Agreement (the "Expiration Date"), subject to earlier termination as
herein provided.
(ii) Except as otherwise provided in this Section 4, if the Optionee
ceases to perform services for the Company, the Option shall terminate
on the earlier of the last day of the third month or ninety days after
the date such Optionee ceases to perform services for the Company, or
on the date on which the Option expires by its terms, whichever occurs
first.
(iii) If such termination to perform services is because of dismissal
for cause or because the Optionee is in breach of any employment
agreement, such Option will terminate on the date the Optionee ceases
to perform services for the Company.
(iv) If such termination to perform services is because the Optionee
has become permanently disabled (within the meaning of Section
22(e)(3) of the Code), such Option shall terminate on the last day of
the twelfth month from the date such Optionee ceases to perform
services for the Company, or on the date on which the Option expires
by its terms, whichever occurs first.
(v) In the event of the death of the Optionee, the Option granted
to such Optionee shall terminate on the last day of the twelfth month
from the date of death, or on the date on which the Option expires by
its terms, whichever occurs first.
(b) Extent of Exercisability.
------------------------
(i) Except as provided below, if the Optionee ceases to perform
services for the Company, the Option shall be exercisable only to the
extent that the right to purchase Shares under such Option has accrued
and is in effect on the date such Optionee ceases to perform services
for the Company.
(ii) If the Optionee ceases to perform services for the Company
because he or she has become permanently disabled (within the meaning
of Section 22(e)(3) of the Code), the Option shall be exercisable to
the full number of Shares covered by such Option.
-2-
<PAGE>
(iii) In the event of the death of the Optionee, the Option may be
exercised with respect to the full number of Shares covered thereby
whether or not under the provisions of Section 3 hereof the Optionee
was entitled to do so at the date of his or her death, by the estate
of such Optionee, or by any person or persons who acquired the right
to exercise such Option by bequest or inheritance or by reason of the
death of such Optionee.
5. Manner of Exercise of Option.
----------------------------
(a) To the extent that the right to exercise the Option has accrued and is
in effect, the Option may be exercised in full or in part by giving written
notice to the Company stating the number of Shares as to which the Option
is being exercised and accompanied by payment in full for such Shares. No
partial exercise may be made for less than one hundred (100) full Shares of
Common Stock. Payment shall be made in accordance with the terms of the
Plan. Upon such exercise, delivery of a certificate for paid-up, non-
assessable Shares shall be made at the principal office of the Company to
the person exercising the Option, not less than thirty (30) and not more
than ninety (90) days from the date of receipt of the notice by the
Company.
(b) The Company shall at all times during the term of the Option reserve
and keep available such number of Shares of its Common Stock as will be
sufficient to satisfy the requirements of the Option.
6. Non-Transferability.
-------------------
The right of the Optionee to exercise the Option shall not be assignable or
transferable by the Optionee otherwise than by will or the laws or descent and
distribution or pursuant to a domestic relations order as defined in the Code or
Title 1 of the Employee Retirement Income Security Act or the rules thereunder,
and the Option may be exercised during the lifetime of the Optionee only by him
or her. The Option shall be null and void and without effect upon the bankruptcy
of the Optionee or upon any attempted assignment or transfer, except as herein
provided, including without limitation any purported assignment, whether
voluntary or by operation of law, pledge, hypothecation or other disposition
contrary to the provisions hereof, or levy of execution, attachment, trustee
process or similar process, whether legal or equitable, upon the Option.
7. Representation Letter and Investment Legend.
-------------------------------------------
In the event that for any reason the Shares to be issued upon exercise of
the Option shall not be effectively registered under the Securities Act of 1933
(" 1933 Act"), upon any date on which the Option is exercised in whole or in
part, the person exercising the Option shall give a written representation to
the Company in the form attached hereto as Exhibit 1 and
-3-
<PAGE>
the Company shall place an "investment legend", so-called, as described in
Exhibit 1, upon any certificate for the Shares issued by reason of such
exercise.
8. Adjustments on Changes in Capitalization.
----------------------------------------
Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Option.
9. No Special Employment Rights.
----------------------------
The provisions of this Section 9 are applicable only to Optionees who are
employees of the Company. Nothing contained in the Plan or this Option shall be
construed or deemed by any person under any circumstances to bind the Company to
continue the employment of the Optionee for the period within which this Option
may be exercised. However, during the period of the Optionee's employment, the
Optionee shall render diligently and faithfully the services which are assigned
to the Optionee from time to time by the Board of Directors or by the executive
officers of the Company and shall at no time take any action which directly or
indirectly would be inconsistent with the best interests of the Company.
10. Rights as a Stockholder.
-----------------------
The Optionee shall have no rights as a stockholder with respect to any
Shares which may be purchased by exercise of this Option unless and until a
certificate or certificates representing such Shares are duly issued and
delivered to the Optionee. Except as otherwise expressly provided in the Plan,
no adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.
11. Withholding Taxes.
-----------------
Whenever Shares are to be issued upon exercise of this Option, the
Company shall have the right to require the Optionee to remit to the Company an
amount sufficient to satisfy all Federal, state and local withholding tax
requirements prior to the delivery of any certificate or certificates for the
Shares. The Company may agree to permit the Optionee to authorize the Company to
withhold Shares of Common Stock purchased upon exercise of the Option to satisfy
the above-mentioned withholding requirement; provided, however, no such
agreement may be made by an Optionee who is an officer or director within the
meaning of Section 16 of the Securities Exchange Act of 1934, as amended, except
pursuant to a standing election to so withhold Shares of Common Stock purchased
upon exercise of the Option, such election to be made in the form set forth in
Exhibit 2 hereto and to be made not less than six (6) months prior to such
exercise. Such election may be revoked only upon providing six (6) months prior
written notice to the Company.
-4-
<PAGE>
12. Plan Provisions Control.
-----------------------
In the event of any inconsistency between the provisions of this
Agreement and the provisions of the Plan, the inconsistent provision(s) of this
Agreement shall be superseded by the Plan provision(s) to the extent necessary
to reconcile the inconsistency.
-5-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed,
and the Optionee has hereunto set his or her hand, all as of the 28th day of
May, 1998.
LIFE MEDICAL SCIENCES, INC.
By: Joel Gold
-----------------------------------------
OPTIONEE
Print Name: Joel Gold
---------------------------------
Sign Name: /s/ Joel Gold
---------------------------------
OPTION INFORMATION
------------------
Total Number of Shares Underlying Option: 50,000
Purchase Price Per Share: $2.00
VESTING & EXPIRATION SCHEDULE
-----------------------------
Vesting Date Number of Shares Expiration Date
- ------------ ---------------- ---------------
May 28, 1998 50,000 May 28, 2005
-6-
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
In connection with the exercise by me of an option to purchase shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company"), I
hereby acknowledge that I have been informed as follows:
1. The shares of Common Stock of the Company to be issued to me pursuant to
the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held indefinitely unless the Shares are subsequently registered under the
Securities Act, or an exemption from such registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
Securities Act can be made only after the holding period provided by that Rule
has been satisfied, and, in any sale to which that Rule is not applicable,
registration or compliance with some other exemption under the Securities Act
will be required.
3. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.
In consideration of the issuance of certificates for the Shares to me, I
hereby represent and warrant that I am acquiring the Shares for my own account
for investment, and that I will not sell, pledge or transfer the Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and warranty,
I agree that there may be affixed to the certificates for the Shares to be
issued to me, and to all certificates issued hereafter representing the Shares
(until in the opinion of counsel, which opinion must be reasonably satisfactory
in form and substance to counsel for the Company, it is no longer necessary or
required) a legend as follows:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and were acquired by the
registered holder pursuant to a representation and warranty that such
holder was acquiring the Shares for his own account and for investment,
with no intention of transfer or disposition of the same in violation of
the registration requirements of that Act. These securities may not be
sold, pledged, or transferred in the absence of an effective registration
statement under such Act, or an opinion of counsel, which opinion is
reasonably satisfactory to counsel to the Company, to the effect that
registration is not required under such Act."
-7-
<PAGE>
I further agree that the Company may place a stop transfer order with its
transfer agent, prohibiting the transfer of the Shares, so long as the legend
remains on the certificates representing the Shares.
Very truly yours,
/s/ Joel Gold
Dated: _____________
-8-
<PAGE>
Exhibit 10.71
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED 1992 STOCK OPTION PLAN
(non-qualified stock option)
AGREEMENT entered into as of the date set forth on the signature page hereto
by and between Life Medical Sciences, Inc., a Delaware corporation, with a
principal place of business at 379 Thornall Street, Edison, New Jersey (together
with its subsidiaries, if any, the "Company"), and the undersigned (the
"Optionee").
WHEREAS, the Company desires to grant to the Optionee a non-qualified stock
option under the Company's Amended and Restated 1992 Stock Option Plan (the
"Plan") to acquire shares of the Company's Common Stock, $.001 par value (the
"Shares"); and
WHEREAS, the Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option.
---------------
The Company hereby grants to the Optionee a non-qualified stock option under
the Plan (the "Option") to purchase all or any part of an aggregate of the
number of Shares set forth on the signature page to this Agreement on the terms
and conditions hereinafter set forth. The Option shall NOT be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
--------------
The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the dollar amount per share set forth on the signature page to this
Agreement.
3. Time of Vesting and Exercise of Option.
--------------------------------------
Subject to Section 4 hereof, the Option shall vest and become exercisable on
the dates and as to the installment amounts set forth on the signature page to
this Agreement. To the extent the Option (or any portion thereof) is not
exercised by the Optionee when it becomes exercisable, it shall not expire, but
shall be carried forward and shall be exercisable, on a cumulative basis, until
the Expiration Date (as hereinafter defined) or until earlier termination as
hereinafter provided.
<PAGE>
4. Term; Extent of Exercisability.
------------------------------
(a) Term.
(i) The Option shall expire as to each installment amount on the
date set forth next to each such amount on the signature page to this
Agreement (the "Expiration Date"), subject to earlier termination as
herein provided.
(ii) Except as otherwise provided in this Section 4, if the Optionee
ceases to perform services for the Company, the Option shall
terminate on the earlier of the last day of the third month or ninety
days after the date such Optionee ceases to perform services for the
Company, or on the date on which the Option expires by its terms,
whichever occurs first.
(iii) If such termination to perform services is because of
dismissal for cause or because the Optionee is in breach of any
employment agreement, such Option will terminate on the date the
Optionee ceases to perform services for the Company.
(iv) If such termination to perform services is because the Optionee
has become permanently disabled (within the meaning of Section
22(e)(3) of the Code), such Option shall terminate on the last day of
the twelfth month from the date such Optionee ceases to perform
services for the Company, or on the date on which the Option expires
by its terms, whichever occurs first.
(v) In the event of the death of the Optionee, the Option granted to
such Optionee shall terminate on the last day of the twelfth month
from the date of death, or on the date on which the Option expires by
its terms, whichever occurs first.
(b) Extent of Exercisability.
------------------------
(i) Except as provided below, if the Optionee ceases to perform
services for the Company, the Option shall be exercisable only to the
extent that the right to purchase Shares under such Option has
accrued and is in effect on the date such Optionee ceases to perform
services for the Company.
(ii) If the Optionee ceases to perform services for the Company
because he or she has become permanently disabled (within the meaning
of Section 22(e)(3) of the Code), the Option shall be exercisable to
the full number of Shares covered by such Option.
-2-
<PAGE>
(iii) In the event of the death of the Optionee, the Option may be
exercised with respect to the full number of Shares covered thereby
whether or not under the provisions of Section 3 hereof the Optionee
was entitled to do so at the date of his or her death, by the estate
of such Optionee, or by any person or persons who acquired the right
to exercise such Option by bequest or inheritance or by reason of the
death of such Optionee.
5. Manner of Exercise of Option.
----------------------------
(a) To the extent that the right to exercise the Option has accrued and is
in effect, the Option may be exercised in full or in part by giving written
notice to the Company stating the number of Shares as to which the Option
is being exercised and accompanied by payment in full for such Shares. No
partial exercise may be made for less than one hundred (100) full Shares of
Common Stock. Payment shall be made in accordance with the terms of the
Plan. Upon such exercise, delivery of a certificate for paid-up, non-
assessable Shares shall be made at the principal office of the Company to
the person exercising the Option, not less than thirty (30) and not more
than ninety (90) days from the date of receipt of the notice by the
Company.
(b) The Company shall at all times during the term of the Option reserve
and keep available such number of Shares of its Common Stock as will be
sufficient to satisfy the requirements of the Option.
6. Non-Transferability.
-------------------
The right of the Optionee to exercise the Option shall not be assignable or
transferable by the Optionee otherwise than by will or the laws or descent and
distribution or pursuant to a domestic relations order as defined in the Code or
Title 1 of the Employee Retirement Income Security Act or the rules thereunder,
and the Option may be exercised during the lifetime of the Optionee only by him
or her. The Option shall be null and void and without effect upon the bankruptcy
of the Optionee or upon any attempted assignment or transfer, except as herein
provided, including without limitation any purported assignment, whether
voluntary or by operation of law, pledge, hypothecation or other disposition
contrary to the provisions hereof, or levy of execution, attachment, trustee
process or similar process, whether legal or equitable, upon the Option.
7. Representation Letter and Investment Legend.
-------------------------------------------
In the event that for any reason the Shares to be issued upon exercise of the
Option shall not be effectively registered under the Securities Act of 1933 ("
1933 Act"), upon any date on which the Option is exercised in whole or in part,
the person exercising the Option shall give a written representation to the
Company in the form attached hereto as Exhibit 1 and the Company shall place an
"investment legend", so-called, as described in Exhibit 1, upon any
-3-
<PAGE>
certificate for the Shares issued by reason of such exercise.
8. Adjustments on Changes in Capitalization.
----------------------------------------
Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Option.
9. No Special Employment Rights.
----------------------------
The provisions of this Section 9 are applicable only to Optionee's who are
employees of the Company. Nothing contained in the Plan or this Option shall be
construed or deemed by any person under any circumstances to bind the Company to
continue the employment of the Optionee for the period within which this Option
may be exercised. However, during the period of the Optionee's employment, the
Optionee shall render diligently and faithfully the services which are assigned
to the Optionee from time to time by the Board of Directors or by the executive
officers of the Company and shall at no time take any action which directly or
indirectly would be inconsistent with the best interests of the Company.
10. Rights as a Stockholder.
-----------------------
The Optionee shall have no rights as a stockholder with respect to any Shares
which may be purchased by exercise of this Option unless and until a certificate
or certificates representing such Shares are duly issued and delivered to the
Optionee. Except as otherwise expressly provided in the Plan, no adjustment
shall be made for dividends or other rights for which the record date is prior
to the date such stock certificate is issued.
11. Withholding Taxes.
-----------------
Whenever Shares are to be issued upon exercise of this Option, the Company
shall have the right to require the Optionee to remit to the Company an amount
sufficient to satisfy all Federal, state and local withholding tax requirements
prior to the delivery of any certificate or certificates for the Shares. The
Company may agree to permit the Optionee to authorize the Company to withhold
Shares of Common Stock purchased upon exercise of the Option to satisfy the
above-mentioned withholding requirement; provided, however, no such agreement
may be made by an Optionee who is an officer or director within the meaning of
Section 16 of the Securities Exchange Act of 1934, as amended, except pursuant
to a standing election to so withhold Shares of Common Stock purchased upon
exercise of the Option, such election to be made in the form set forth in
Exhibit 2 hereto and to be made not less than six (6) months prior to such
exercise. Such election may be revoked only upon providing six (6) months prior
written notice to the Company.
-4-
<PAGE>
12. Plan Provisions Control.
-----------------------
In the event of any inconsistency between the provisions of this Agreement and
the provisions of the Plan, the inconsistent provision(s) of this Agreement
shall be superseded by the Plan provision(s) to the extent necessary to
reconcile the inconsistency.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed, and
the Optionee has hereunto set his or her hand, all as of the 28th day of May,
1998.
LIFE MEDICAL SCIENCES, INC.
By:
--------------------------------------
OPTIONEE
Print Name: Joel Gold
-------------------------------
Sign Name: /s/ Joel Gold
-------------------------------
OPTION INFORMATION
------------------
Total Number of Shares Underlying Option: 50,000
-------
Purchase Price Per Share: $ 2.00
VESTING & EXPIRATION SCHEDULE
-----------------------------
Vesting Date Number of Shares Expiration Date
- ------------ ---------------- ---------------
June 18, 1997 50,000 June 18, 2002
This agreement supersedes the previous agreement dated June 18, 1997.
-5-
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
In connection with the exercise by me of an option to purchase shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company"), I
hereby acknowledge that I have been informed as follows:
1. The shares of Common Stock of the Company to be issued to me pursuant to
the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held indefinitely unless the Shares are subsequently registered under the
Securities Act, or an exemption from such registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
Securities Act can be made only after the holding period provided by that Rule
has been satisfied, and, in any sale to which that Rule is not applicable,
registration or compliance with some other exemption under the Securities Act
will be required.
3. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.
In consideration of the issuance of certificates for the Shares to me, I
hereby represent and warrant that I am acquiring the Shares for my own account
for investment, and that I will not sell, pledge or transfer the Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and warranty,
I agree that there may be affixed to the certificates for the Shares to be
issued to me, and to all certificates issued hereafter representing the Shares
(until in the opinion of counsel, which opinion must be reasonably satisfactory
in form and substance to counsel for the Company, it is no longer necessary or
required) a legend as follows:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and were acquired by the
registered holder pursuant to a representation and warranty that such
holder was acquiring the Shares for his own account and for investment,
with no intention of transfer or disposition of the same in violation of
the registration requirements of that Act. These securities may not be
sold, pledged, or transferred in the absence of an effective registration
statement under such Act, or an opinion of counsel, which opinion is
reasonably satisfactory to counsel to the Company, to the effect that
registration is not required under such Act."
-6-
<PAGE>
I further agree that the Company may place a stop transfer order with its
transfer agent, prohibiting the transfer of the Shares, so long as the legend
remains on the certificates representing the Shares.
Very truly yours,
/s/ Joel Gold
Dated: July 6, 1998
-------------
-7-
<PAGE>
EXHIBIT 2
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
The undersigned Optionee hereby elects and agrees that, whenever the
undersigned exercises a stock option (including any options which now or may
hereafter be granted), Life Medical Sciences, Inc. (the "Company") shall
withhold from that exercise such number of Shares equal in value to the federal
and state withholding taxes due upon such exercise. The undersigned further
acknowledges and agrees that this election may not be revoked without six (6)
months' prior written notice to the Company.
OPTIONEE:
/s/ Joel Gold
--------------------------------------------
(Signature)
Joel Gold
--------------------------------------------
(Print Name)
-8-
<PAGE>
Exhibit 10.72
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED 1992 STOCK OPTION PLAN
(non-qualified stock option)
AGREEMENT entered into as of the date set forth on the signature page hereto
by and between Life Medical Sciences, Inc., a Delaware corporation, with a
principal place of business at 379 Thornall Street, Edison, New Jersey (together
with its subsidiaries, if any, the "Company"), and the undersigned (the
"Optionee").
WHEREAS, the Company desires to grant to the Optionee a non-qualified stock
option under the Company's Amended and Restated 1992 Stock Option Plan (the
"Plan") to acquire shares of the Company's Common Stock, $.001 par value (the
"Shares"); and
WHEREAS, the Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option.
---------------
The Company hereby grants to the Optionee a non-qualified stock option under
the Plan (the "Option") to purchase all or any part of an aggregate of the
number of Shares set forth on the signature page to this Agreement on the terms
and conditions hereinafter set forth. The Option shall NOT be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
--------------
The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the dollar amount per share set forth on the signature page to this
Agreement.
3. Time of Vesting and Exercise of Option.
--------------------------------------
Subject to Section 4 hereof, the Option shall vest and become exercisable on
the dates and as to the installment amounts set forth on the signature page to
this Agreement. To the extent the Option (or any portion thereof) is not
exercised by the Optionee when it becomes exercisable, it shall not expire, but
shall be carried forward and shall be exercisable, on a cumulative basis, until
the Expiration Date (as hereinafter defined) or until earlier termination as
hereinafter provided.
<PAGE>
4. Term; Extent of Exercisability.
------------------------------
(a) Term.
(i) The Option shall expire as to each installment amount on the date
set forth next to each such amount on the signature page to this
Agreement (the "Expiration Date"), subject to earlier termination as
herein provided.
(ii) Except as otherwise provided in this Section 4, if the Optionee
ceases to perform services for the Company, the Option shall terminate
on the earlier of the last day of the third month or ninety days after
the date such Optionee ceases to perform services for the Company, or
on the date on which the Option expires by its terms, whichever occurs
first.
(iii) If such termination to perform services is because of
dismissal for cause or because the Optionee is in breach of any
employment agreement, such Option will terminate on the date the
Optionee ceases to perform services for the Company.
(iv) If such termination to perform services is because the Optionee
has become permanently disabled (within the meaning of Section
22(e)(3) of the Code), such Option shall terminate on the last day of
the twelfth month from the date such Optionee ceases to perform
services for the Company, or on the date on which the Option expires
by its terms, whichever occurs first.
(v) In the event of the death of the Optionee, the Option granted to
such Optionee shall terminate on the last day of the twelfth month
from the date of death, or on the date on which the Option expires by
its terms, whichever occurs first.
(b) Extent of Exercisability.
------------------------
(i) Except as provided below, if the Optionee ceases to perform
services for the Company, the Option shall be exercisable only to the
extent that the right to purchase Shares under such Option has accrued
and is in effect on the date such Optionee ceases to perform services
for the Company.
(ii) If the Optionee ceases to perform services for the Company
because he or she has become permanently disabled (within the meaning
of Section 22(e)(3) of the Code), the Option shall be exercisable to
the full number of Shares covered by such Option.
-2-
<PAGE>
(iii) In the event of the death of the Optionee, the Option
may be exercised with respect to the full number of Shares covered
thereby whether or not under the provisions of Section 3 hereof the
Optionee was entitled to do so at the date of his or her death, by the
estate of such Optionee, or by any person or persons who acquired the
right to exercise such Option by bequest or inheritance or by reason
of the death of such Optionee.
5. Manner of Exercise of Option.
----------------------------
(a) To the extent that the right to exercise the Option has accrued and is
in effect, the Option may be exercised in full or in part by giving written
notice to the Company stating the number of Shares as to which the Option
is being exercised and accompanied by payment in full for such Shares. No
partial exercise may be made for less than one hundred (100) full Shares of
Common Stock. Payment shall be made in accordance with the terms of the
Plan. Upon such exercise, delivery of a certificate for paid-up, non-
assessable Shares shall be made at the principal office of the Company to
the person exercising the Option, not less than thirty (30) and not more
than ninety (90) days from the date of receipt of the notice by the
Company.
(b) The Company shall at all times during the term of the Option reserve
and keep available such number of Shares of its Common Stock as will be
sufficient to satisfy the requirements of the Option.
6. Non-Transferability.
-------------------
The right of the Optionee to exercise the Option shall not be assignable or
transferable by the Optionee otherwise than by will or the laws or descent and
distribution or pursuant to a domestic relations order as defined in the Code or
Title 1 of the Employee Retirement Income Security Act or the rules thereunder,
and the Option may be exercised during the lifetime of the Optionee only by him
or her. The Option shall be null and void and without effect upon the bankruptcy
of the Optionee or upon any attempted assignment or transfer, except as herein
provided, including without limitation any purported assignment, whether
voluntary or by operation of law, pledge, hypothecation or other disposition
contrary to the provisions hereof, or levy of execution, attachment, trustee
process or similar process, whether legal or equitable, upon the Option.
7. Representation Letter and Investment Legend.
-------------------------------------------
In the event that for any reason the Shares to be issued upon exercise of the
Option shall not be effectively registered under the Securities Act of 1933 ("
1933 Act"), upon any date on which the Option is exercised in whole or in part,
the person exercising the Option shall give a written representation to the
Company in the form attached hereto as Exhibit 1 and the Company shall place an
"investment legend", so-called, as described in Exhibit 1, upon any
-3-
<PAGE>
certificate for the Shares issued by reason of such exercise.
8. Adjustments on Changes in Capitalization.
----------------------------------------
Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Option.
9. No Special Employment Rights.
----------------------------
The provisions of this Section 9 are applicable only to Optionee's who are
employees of the Company. Nothing contained in the Plan or this Option shall be
construed or deemed by any person under any circumstances to bind the Company to
continue the employment of the Optionee for the period within which this Option
may be exercised. However, during the period of the Optionee's employment, the
Optionee shall render diligently and faithfully the services which are assigned
to the Optionee from time to time by the Board of Directors or by the executive
officers of the Company and shall at no time take any action which directly or
indirectly would be inconsistent with the best interests of the Company.
10. Rights as a Stockholder.
-----------------------
The Optionee shall have no rights as a stockholder with respect to any Shares
which may be purchased by exercise of this Option unless and until a certificate
or certificates representing such Shares are duly issued and delivered to the
Optionee. Except as otherwise expressly provided in the Plan, no adjustment
shall be made for dividends or other rights for which the record date is prior
to the date such stock certificate is issued.
11. Withholding Taxes.
-----------------
Whenever Shares are to be issued upon exercise of this Option, the Company
shall have the right to require the Optionee to remit to the Company an amount
sufficient to satisfy all Federal, state and local withholding tax requirements
prior to the delivery of any certificate or certificates for the Shares. The
Company may agree to permit the Optionee to authorize the Company to withhold
Shares of Common Stock purchased upon exercise of the Option to satisfy the
above-mentioned withholding requirement; provided, however, no such agreement
may be made by an Optionee who is an officer or director within the meaning of
Section 16 of the Securities Exchange Act of 1934, as amended, except pursuant
to a standing election to so withhold Shares of Common Stock purchased upon
exercise of the Option, such election to be made in the form set forth in
Exhibit 2 hereto and to be made not less than six (6) months prior to such
exercise. Such election may be revoked only upon providing six (6) months prior
written notice to the Company.
-4-
<PAGE>
12. Plan Provisions Control.
-----------------------
In the event of any inconsistency between the provisions of this Agreement and
the provisions of the Plan, the inconsistent provision(s) of this Agreement
shall be superseded by the Plan provision(s) to the extent necessary to
reconcile the inconsistency.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed, and
the Optionee has hereunto set his or her hand, all as of the 28th day of May,
1998.
LIFE MEDICAL SCIENCES, INC.
By:
--------------------------------------
OPTIONEE
Print Name: Joel Gold
-------------------------------
Sign Name: /s/ Joel Gold
-------------------------------
OPTION INFORMATION
------------------
Total Number of Shares Underlying Option: 23,281
Purchase Price Per Share: $ 2.00
VESTING & EXPIRATION SCHEDULE
-----------------------------
Vesting Date Number of Shares Expiration Date
- ------------ ---------------- ---------------
May 23, 1995 23,281 May 23, 2000
This agreement supersedes the previous agreement dated May 23, 1995.
-5-
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
In connection with the exercise by me of an option to purchase shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company"), I
hereby acknowledge that I have been informed as follows:
1. The shares of Common Stock of the Company to be issued to me pursuant to
the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held indefinitely unless the Shares are subsequently registered under the
Securities Act, or an exemption from such registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
Securities Act can be made only after the holding period provided by that Rule
has been satisfied, and, in any sale to which that Rule is not applicable,
registration or compliance with some other exemption under the Securities Act
will be required.
3. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.
In consideration of the issuance of certificates for the Shares to me, I
hereby represent and warrant that I am acquiring the Shares for my own account
for investment, and that I will not sell, pledge or transfer the Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and warranty,
I agree that there may be affixed to the certificates for the Shares to be
issued to me, and to all certificates issued hereafter representing the Shares
(until in the opinion of counsel, which opinion must be reasonably satisfactory
in form and substance to counsel for the Company, it is no longer necessary or
required) a legend as follows:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and were acquired by the
registered holder pursuant to a representation and warranty that such
holder was acquiring the Shares for his own account and for investment,
with no intention of transfer or disposition of the same in violation of
the registration requirements of that Act. These securities may not be
sold, pledged, or transferred in the absence of an effective registration
statement under such Act, or an opinion of counsel, which opinion is
reasonably satisfactory to counsel to the Company, to the effect that
registration is not required under such Act."
-6-
<PAGE>
I further agree that the Company may place a stop transfer order with its
transfer agent, prohibiting the transfer of the Shares, so long as the legend
remains on the certificates representing the Shares.
Very truly yours,
/s/ Joel Gold
Dated: July 6, 1998
------------
-7-
<PAGE>
EXHIBIT 2
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
The undersigned Optionee hereby elects and agrees that, whenever the
undersigned exercises a stock option (including any options which now or may
hereafter be granted), Life Medical Sciences, Inc. (the "Company") shall
withhold from that exercise such number of Shares equal in value to the federal
and state withholding taxes due upon such exercise. The undersigned further
acknowledges and agrees that this election may not be revoked without six (6)
months' prior written notice to the Company.
OPTIONEE:
/s/ Joel Gold
--------------------------------------------
(Signature)
Joel Gold
--------------------------------------------
(Print Name)
-8-
<PAGE>
Exhibit 10.73
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED 1992 STOCK OPTION PLAN
(non-qualified stock option)
AGREEMENT entered into as of the date set forth on the signature page hereto
by and between Life Medical Sciences, Inc., a Delaware corporation, with a
principal place of business at 379 Thornall Street, Edison, New Jersey (together
with its subsidiaries, if any, the "Company"), and the undersigned (the
"Optionee").
WHEREAS, the Company desires to grant to the Optionee a non-qualified stock
option under the Company's Amended and Restated 1992 Stock Option Plan (the
"Plan") to acquire shares of the Company's Common Stock, $.001 par value (the
"Shares"); and
WHEREAS, the Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option.
---------------
The Company hereby grants to the Optionee a non-qualified stock option under
the Plan (the "Option") to purchase all or any part of an aggregate of the
number of Shares set forth on the signature page to this Agreement on the terms
and conditions hereinafter set forth. The Option shall NOT be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
--------------
The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the dollar amount per share set forth on the signature page to this
Agreement.
3. Time of Vesting and Exercise of Option.
--------------------------------------
Subject to Section 4 hereof, the Option shall vest and become exercisable on
the dates and as to the installment amounts set forth on the signature page to
this Agreement. To the extent the Option (or any portion thereof) is not
exercised by the Optionee when it becomes exercisable, it shall not expire, but
shall be carried forward and shall be exercisable, on a cumulative basis, until
the Expiration Date (as hereinafter defined) or until earlier termination as
hereinafter provided.
<PAGE>
4. Term; Extent of Exercisability.
------------------------------
(a) Term.
(i) The Option shall expire as to each installment amount on the date
set forth next to each such amount on the signature page to this
Agreement (the "Expiration Date"), subject to earlier termination as
herein provided.
(ii) Except as otherwise provided in this Section 4, if the Optionee
ceases to perform services for the Company, the Option shall terminate
on the earlier of the last day of the third month or ninety days after
the date such Optionee ceases to perform services for the Company, or
on the date on which the Option expires by its terms, whichever occurs
first.
(iii) If such termination to perform services is because of dismissal
for cause or because the Optionee is in breach of any employment
agreement, such Option will terminate on the date the Optionee ceases
to perform services for the Company.
(iv) If such termination to perform services is because the Optionee
has become permanently disabled (within the meaning of Section
22(e)(3) of the Code), such Option shall terminate on the last day of
the twelfth month from the date such Optionee ceases to perform
services for the Company, or on the date on which the Option expires
by its terms, whichever occurs first.
(v) In the event of the death of the Optionee, the Option granted to
such Optionee shall terminate on the last day of the twelfth month
from the date of death, or on the date on which the Option expires by
its terms, whichever occurs first.
(b) Extent of Exercisability.
------------------------
(i) Except as provided below, if the Optionee ceases to perform
services for the Company, the Option shall be exercisable only to the
extent that the right to purchase Shares under such Option has accrued
and is in effect on the date such Optionee ceases to perform services
for the Company.
(ii) If the Optionee ceases to perform services for the Company
because he or she has become permanently disabled (within the meaning
of Section 22(e)(3) of the Code), the Option shall be exercisable to
the full number of Shares covered by such Option.
-2-
<PAGE>
(iii) In the event of the death of the Optionee, the Option
may be exercised with respect to the full number of Shares covered
thereby whether or not under the provisions of Section 3 hereof the
Optionee was entitled to do so at the date of his or her death, by the
estate of such Optionee, or by any person or persons who acquired the
right to exercise such Option by bequest or inheritance or by reason
of the death of such Optionee.
5. Manner of Exercise of Option.
----------------------------
(a) To the extent that the right to exercise the Option has accrued and is
in effect, the Option may be exercised in full or in part by giving written
notice to the Company stating the number of Shares as to which the Option
is being exercised and accompanied by payment in full for such Shares. No
partial exercise may be made for less than one hundred (100) full Shares of
Common Stock. Payment shall be made in accordance with the terms of the
Plan. Upon such exercise, delivery of a certificate for paid-up, non-
assessable Shares shall be made at the principal office of the Company to
the person exercising the Option, not less than thirty (30) and not more
than ninety (90) days from the date of receipt of the notice by the
Company.
(b) The Company shall at all times during the term of the Option reserve
and keep available such number of Shares of its Common Stock as will be
sufficient to satisfy the requirements of the Option.
6. Non-Transferability.
-------------------
The right of the Optionee to exercise the Option shall not be assignable or
transferable by the Optionee otherwise than by will or the laws or descent and
distribution or pursuant to a domestic relations order as defined in the Code or
Title 1 of the Employee Retirement Income Security Act or the rules thereunder,
and the Option may be exercised during the lifetime of the Optionee only by him
or her. The Option shall be null and void and without effect upon the bankruptcy
of the Optionee or upon any attempted assignment or transfer, except as herein
provided, including without limitation any purported assignment, whether
voluntary or by operation of law, pledge, hypothecation or other disposition
contrary to the provisions hereof, or levy of execution, attachment, trustee
process or similar process, whether legal or equitable, upon the Option.
7. Representation Letter and Investment Legend.
-------------------------------------------
In the event that for any reason the Shares to be issued upon exercise of the
Option shall not be effectively registered under the Securities Act of 1933 ("
1933 Act"), upon any date on which the Option is exercised in whole or in part,
the person exercising the Option shall give a written representation to the
Company in the form attached hereto as Exhibit 1 and
-3-
<PAGE>
the Company shall place an "investment legend", so-called, as described in
Exhibit 1, upon any certificate for the Shares issued by reason of such
exercise.
8. Adjustments on Changes in Capitalization.
----------------------------------------
Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Option.
9. No Special Employment Rights.
----------------------------
The provisions of this Section 9 are applicable only to Optionees who are
employees of the Company. Nothing contained in the Plan or this Option shall be
construed or deemed by any person under any circumstances to bind the Company to
continue the employment of the Optionee for the period within which this Option
may be exercised. However, during the period of the Optionee's employment, the
Optionee shall render diligently and faithfully the services which are assigned
to the Optionee from time to time by the Board of Directors or by the executive
officers of the Company and shall at no time take any action which directly or
indirectly would be inconsistent with the best interests of the Company.
10. Rights as a Stockholder.
-----------------------
The Optionee shall have no rights as a stockholder with respect to any Shares
which may be purchased by exercise of this Option unless and until a certificate
or certificates representing such Shares are duly issued and delivered to the
Optionee. Except as otherwise expressly provided in the Plan, no adjustment
shall be made for dividends or other rights for which the record date is prior
to the date such stock certificate is issued.
11. Withholding Taxes.
-----------------
Whenever Shares are to be issued upon exercise of this Option, the Company
shall have the right to require the Optionee to remit to the Company an amount
sufficient to satisfy all Federal, state and local withholding tax requirements
prior to the delivery of any certificate or certificates for the Shares. The
Company may agree to permit the Optionee to authorize the Company to withhold
Shares of Common Stock purchased upon exercise of the Option to satisfy the
above-mentioned withholding requirement; provided, however, no such agreement
may be made by an Optionee who is an officer or director within the meaning of
Section 16 of the Securities Exchange Act of 1934, as amended, except pursuant
to a standing election to so withhold Shares of Common Stock purchased upon
exercise of the Option, such election to be made in the form set forth in
Exhibit 2 hereto and to be made not less than six (6) months prior to such
exercise. Such election may be revoked only upon providing six (6) months prior
written notice to the Company.
-4-
<PAGE>
12. Plan Provisions Control.
-----------------------
In the event of any inconsistency between the provisions of this Agreement and
the provisions of the Plan, the inconsistent provision(s) of this Agreement
shall be superseded by the Plan provision(s) to the extent necessary to
reconcile the inconsistency.
-5-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed, and
the Optionee has hereunto set his or her hand, all as of the 28th day of May,
1998.
LIFE MEDICAL SCIENCES, INC.
By:
--------------------------------------
OPTIONEE
Print Name: Walter R. Maupay
-------------------------------
Sign Name: /s/ Walter R. Maupay
-------------------------------
OPTION INFORMATION
------------------
Total Number of Shares Underlying Option: 100,000
Purchase Price Per Share: $2.00
VESTING & EXPIRATION SCHEDULE
-----------------------------
Vesting Date Number of Shares Expiration Date
- ------------ ---------------- ---------------
May 28, 1998 100,000 May 28, 2005
-6-
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
In connection with the exercise by me of an option to purchase shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company"), I
hereby acknowledge that I have been informed as follows:
1. The shares of Common Stock of the Company to be issued to me pursuant to
the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held indefinitely unless the Shares are subsequently registered under the
Securities Act, or an exemption from such registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
Securities Act can be made only after the holding period provided by that Rule
has been satisfied, and, in any sale to which that Rule is not applicable,
registration or compliance with some other exemption under the Securities Act
will be required.
3. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.
In consideration of the issuance of certificates for the Shares to me, I
hereby represent and warrant that I am acquiring the Shares for my own account
for investment, and that I will not sell, pledge or transfer the Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and warranty,
I agree that there may be affixed to the certificates for the Shares to be
issued to me, and to all certificates issued hereafter representing the Shares
(until in the opinion of counsel, which opinion must be reasonably satisfactory
in form and substance to counsel for the Company, it is no longer necessary or
required) a legend as follows:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and were acquired by the
registered holder pursuant to a representation and warranty that such
holder was acquiring the Shares for his own account and for investment,
with no intention of transfer or disposition of the same in violation of
the registration requirements of that Act. These securities may not be
sold, pledged, or transferred in the absence of an effective registration
statement under such Act, or an opinion of counsel, which opinion is
reasonably satisfactory to counsel to the Company, to the effect that
registration is not required under such Act."
-7-
<PAGE>
I further agree that the Company may place a stop transfer order with its
transfer agent, prohibiting the transfer of the Shares, so long as the legend
remains on the certificates representing the Shares.
Very truly yours,
/s/ Walter R. Maupay
Dated: July 3, 1998
-----------
-8-
<PAGE>
Exhibit 10.74
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED 1992 STOCK OPTION PLAN
(non-qualified stock option)
AGREEMENT entered into as of the date set forth on the signature page hereto
by and between Life Medical Sciences, Inc., a Delaware corporation, with a
principal place of business at 379 Thornall Street, Edison, New Jersey (together
with its subsidiaries, if any, the "Company"), and the undersigned (the
"Optionee").
WHEREAS, the Company desires to grant to the Optionee a non-qualified stock
option under the Company's Amended and Restated 1992 Stock Option Plan (the
"Plan") to acquire shares of the Company's Common Stock, $.001 par value (the
"Shares"); and
WHEREAS, the Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option.
---------------
The Company hereby grants to the Optionee a non-qualified stock option under
the Plan (the "Option") to purchase all or any part of an aggregate of the
number of Shares set forth on the signature page to this Agreement on the terms
and conditions hereinafter set forth. The Option shall NOT be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
--------------
The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the dollar amount per share set forth on the signature page to this
Agreement.
3. Time of Vesting and Exercise of Option.
--------------------------------------
Subject to Section 4 hereof, the Option shall vest and become exercisable on
the dates and as to the installment amounts set forth on the signature page to
this Agreement. To the extent the Option (or any portion thereof) is not
exercised by the Optionee when it becomes exercisable, it shall not expire, but
shall be carried forward and shall be exercisable, on a cumulative basis, until
the Expiration Date (as hereinafter defined) or until earlier termination as
hereinafter provided.
<PAGE>
4. Term; Extent of Exercisability.
------------------------------
(a) Term.
(i) The Option shall expire as to each installment amount on the date
set forth next to each such amount on the signature page to this
Agreement (the "Expiration Date"), subject to earlier termination as
herein provided.
(ii) Except as otherwise provided in this Section 4, if the Optionee
ceases to perform services for the Company, the Option shall terminate
on the earlier of the last day of the third month or ninety days after
the date such Optionee ceases to perform services for the Company, or
on the date on which the Option expires by its terms, whichever occurs
first.
(iii) If such termination to perform services is because of dismissal
for cause or because the Optionee is in breach of any employment
agreement, such Option will terminate on the date the Optionee ceases
to perform services for the Company.
(iv) If such termination to perform services is because the Optionee
has become permanently disabled (within the meaning of Section
22(e)(3) of the Code), such Option shall terminate on the last day of
the twelfth month from the date such Optionee ceases to perform
services for the Company, or on the date on which the Option expires
by its terms, whichever occurs first.
(v) In the event of the death of the Optionee, the Option granted to
such Optionee shall terminate on the last day of the twelfth month
from the date of death, or on the date on which the Option expires by
its terms, whichever occurs first.
(b) Extent of Exercisability.
------------------------
(i) Except as provided below, if the Optionee ceases to perform
services for the Company, the Option shall be exercisable only to the
extent that the right to purchase Shares under such Option has accrued
and is in effect on the date such Optionee ceases to perform services
for the Company.
(ii) If the Optionee ceases to perform services for the Company
because he or she has become permanently disabled (within the meaning
of Section 22(e)(3) of the Code), the Option shall be exercisable to
the full number of Shares covered by such Option.
-2-
<PAGE>
(iii) In the event of the death of the Optionee, the Option may be
exercised with respect to the full number of Shares covered thereby
whether or not under the provisions of Section 3 hereof the Optionee
was entitled to do so at the date of his or her death, by the estate
of such Optionee, or by any person or persons who acquired the right
to exercise such Option by bequest or inheritance or by reason of the
death of such Optionee.
5. Manner of Exercise of Option.
----------------------------
(a) To the extent that the right to exercise the Option has accrued and is
in effect, the Option may be exercised in full or in part by giving written
notice to the Company stating the number of Shares as to which the Option
is being exercised and accompanied by payment in full for such Shares. No
partial exercise may be made for less than one hundred (100) full Shares of
Common Stock. Payment shall be made in accordance with the terms of the
Plan. Upon such exercise, delivery of a certificate for paid-up, non-
assessable Shares shall be made at the principal office of the Company to
the person exercising the Option, not less than thirty (30) and not more
than ninety (90) days from the date of receipt of the notice by the
Company.
(b) The Company shall at all times during the term of the Option reserve
and keep available such number of Shares of its Common Stock as will be
sufficient to satisfy the requirements of the Option.
6. Non-Transferability.
-------------------
The right of the Optionee to exercise the Option shall not be assignable or
transferable by the Optionee otherwise than by will or the laws or descent and
distribution or pursuant to a domestic relations order as defined in the Code or
Title 1 of the Employee Retirement Income Security Act or the rules thereunder,
and the Option may be exercised during the lifetime of the Optionee only by him
or her. The Option shall be null and void and without effect upon the bankruptcy
of the Optionee or upon any attempted assignment or transfer, except as herein
provided, including without limitation any purported assignment, whether
voluntary or by operation of law, pledge, hypothecation or other disposition
contrary to the provisions hereof, or levy of execution, attachment, trustee
process or similar process, whether legal or equitable, upon the Option.
7. Representation Letter and Investment Legend.
-------------------------------------------
In the event that for any reason the Shares to be issued upon exercise of the
Option shall not be effectively registered under the Securities Act of 1933 ("
1933 Act"), upon any date on which the Option is exercised in whole or in part,
the person exercising the Option shall give a written representation to the
Company in the form attached hereto as Exhibit 1 and
-3-
<PAGE>
the Company shall place an "investment legend", so-called, as described in
Exhibit 1, upon any certificate for the Shares issued by reason of such
exercise.
8. Adjustments on Changes in Capitalization.
----------------------------------------
Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Option.
9. No Special Employment Rights.
----------------------------
The provisions of this Section 9 are applicable only to Optionees who are
employees of the Company. Nothing contained in the Plan or this Option shall be
construed or deemed by any person under any circumstances to bind the Company to
continue the employment of the Optionee for the period within which this Option
may be exercised. However, during the period of the Optionee's employment, the
Optionee shall render diligently and faithfully the services which are assigned
to the Optionee from time to time by the Board of Directors or by the executive
officers of the Company and shall at no time take any action which directly or
indirectly would be inconsistent with the best interests of the Company.
10. Rights as a Stockholder.
-----------------------
The Optionee shall have no rights as a stockholder with respect to any Shares
which may be purchased by exercise of this Option unless and until a certificate
or certificates representing such Shares are duly issued and delivered to the
Optionee. Except as otherwise expressly provided in the Plan, no adjustment
shall be made for dividends or other rights for which the record date is prior
to the date such stock certificate is issued.
11. Withholding Taxes.
-----------------
Whenever Shares are to be issued upon exercise of this Option, the Company
shall have the right to require the Optionee to remit to the Company an amount
sufficient to satisfy all Federal, state and local withholding tax requirements
prior to the delivery of any certificate or certificates for the Shares. The
Company may agree to permit the Optionee to authorize the Company to withhold
Shares of Common Stock purchased upon exercise of the Option to satisfy the
above-mentioned withholding requirement; provided, however, no such agreement
may be made by an Optionee who is an officer or director within the meaning of
Section 16 of the Securities Exchange Act of 1934, as amended, except pursuant
to a standing election to so withhold Shares of Common Stock purchased upon
exercise of the Option, such election to be made in the form set forth in
Exhibit 2 hereto and to be made not less than six (6) months prior to such
exercise. Such election may be revoked only upon providing six (6) months prior
written notice to the Company.
-4-
<PAGE>
12. Plan Provisions Control.
-----------------------
In the event of any inconsistency between the provisions of this Agreement and
the provisions of the Plan, the inconsistent provision(s) of this Agreement
shall be superseded by the Plan provision(s) to the extent necessary to
reconcile the inconsistency.
-5-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed, and
the Optionee has hereunto set his or her hand, all as of the 28th day of May,
1998.
LIFE MEDICAL SCIENCES, INC.
By:
--------------------------------------
OPTIONEE
Print Name: Walter Maupay
-------------------------------
Sign Name: /s/ Walter R. Maupay
-------------------------------
OPTION INFORMATION
------------------
Total Number of Shares Underlying Option: 10,778
Purchase Price Per Share: $7.88
VESTING & EXPIRATION SCHEDULE
-----------------------------
Vesting Date Number of Shares Expiration Date
- ------------ ---------------- ---------------
August 15, 1996 3,592 August 15, 2001
August 15, 1997 3,592 August 15, 2002
August 15, 1998 3,594 August 15, 2003
This agreement supersedes the previous agreement dated August 15, 1996.
-6-
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
In connection with the exercise by me of an option to purchase shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company"), I
hereby acknowledge that I have been informed as follows:
1. The shares of Common Stock of the Company to be issued to me pursuant to
the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held indefinitely unless the Shares are subsequently registered under the
Securities Act, or an exemption from such registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
Securities Act can be made only after the holding period provided by that Rule
has been satisfied, and, in any sale to which that Rule is not applicable,
registration or compliance with some other exemption under the Securities Act
will be required.
3. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.
In consideration of the issuance of certificates for the Shares to me, I
hereby represent and warrant that I am acquiring the Shares for my own account
for investment, and that I will not sell, pledge or transfer the Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and warranty,
I agree that there may be affixed to the certificates for the Shares to be
issued to me, and to all certificates issued hereafter representing the Shares
(until in the opinion of counsel, which opinion must be reasonably satisfactory
in form and substance to counsel for the Company, it is no longer necessary or
required) a legend as follows:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and were acquired by the
registered holder pursuant to a representation and warranty that such
holder was acquiring the Shares for his own account and for investment,
with no intention of transfer or disposition of the same in violation of
the registration requirements of that Act. These securities may not be
sold, pledged, or transferred in the absence of an effective registration
statement under such Act, or an opinion of counsel, which opinion is
reasonably satisfactory to counsel to the Company, to the effect that
registration is not required under such Act."
-7-
<PAGE>
I further agree that the Company may place a stop transfer order with its
transfer agent, prohibiting the transfer of the Shares, so long as the legend
remains on the certificates representing the Shares.
Very truly yours,
/s/ Walter R. Maupay
Dated: July 3, 1998
------------
-8-
<PAGE>
EXHIBIT 10.75
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED 1992 STOCK OPTION PLAN
(non-qualified stock option)
AGREEMENT entered into as of the date set forth on the signature page hereto
by and between Life Medical Sciences, Inc., a Delaware corporation, with a
principal place of business at 379 Thornall Street, Edison, New Jersey (together
with its subsidiaries, if any, the "Company"), and the undersigned (the
"Optionee").
WHEREAS, the Company desires to grant to the Optionee a non-qualified stock
option under the Company's Amended and Restated 1992 Stock Option Plan (the
"Plan") to acquire shares of the Company's Common Stock, $.001 par value (the
"Shares"); and
WHEREAS, the Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option.
---------------
The Company hereby grants to the Optionee a non-qualified stock option under
the Plan (the "Option") to purchase all or any part of an aggregate of the
number of Shares set forth on the signature page to this Agreement on the terms
and conditions hereinafter set forth. The Option shall NOT be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
--------------
The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the dollar amount per share set forth on the signature page to this
Agreement.
3. Time of Vesting and Exercise of Option.
--------------------------------------
Subject to Section 4 hereof, the Option shall vest and become exercisable on
the dates and as to the installment amounts set forth on the signature page to
this Agreement. To the extent the Option (or any portion thereof) is not
exercised by the Optionee when it becomes exercisable, it shall not expire, but
shall be carried forward and shall be exercisable, on a cumulative basis, until
the Expiration Date (as hereinafter defined) or until earlier termination as
hereinafter provided.
<PAGE>
4. Term; Extent of Exercisability.
------------------------------
(a) Term.
(i) The Option shall expire as to each installment amount on the
date set forth next to each such amount on the signature page to this
Agreement (the "Expiration Date"), subject to earlier termination as
herein provided.
(ii) Except as otherwise provided in this Section 4, if the
Optionee ceases to perform services for the Company, the Option shall
terminate on the earlier of the last day of the third month or ninety
days after the date such Optionee ceases to perform services for the
Company, or on the date on which the Option expires by its terms,
whichever occurs first.
(iii) If such termination to perform services is because of
dismissal for cause or because the Optionee is in breach of any
employment agreement, such Option will terminate on the date the
Optionee ceases to perform services for the Company.
(iv) If such termination to perform services is because the
Optionee has become permanently disabled (within the meaning of
Section 22(e)(3) of the Code), such Option shall terminate on the
last day of the twelfth month from the date such Optionee ceases to
perform services for the Company, or on the date on which the Option
expires by its terms, whichever occurs first.
(v) In the event of the death of the Optionee, the Option granted
to such Optionee shall terminate on the last day of the twelfth month
from the date of death, or on the date on which the Option expires by
its terms, whichever occurs first.
(b) Extent of Exercisability.
------------------------
(i) Except as provided below, if the Optionee ceases to perform
services for the Company, the Option shall be exercisable only to the
extent that the right to purchase Shares under such Option has
accrued and is in effect on the date such Optionee ceases to perform
services for the Company.
(ii) If the Optionee ceases to perform services for the Company
because he or she has become permanently disabled (within the meaning
of Section 22(e)(3) of the Code), the Option shall be exercisable to
the full number of Shares covered by such Option.
-2-
<PAGE>
(iii) In the event of the death of the Optionee, the Option may be
exercised with respect to the full number of Shares covered thereby
whether or not under the provisions of Section 3 hereof the Optionee
was entitled to do so at the date of his or her death, by the estate
of such Optionee, or by any person or persons who acquired the right
to exercise such Option by bequest or inheritance or by reason of the
death of such Optionee.
5. Manner of Exercise of Option.
----------------------------
(a) To the extent that the right to exercise the Option has accrued and
is in effect, the Option may be exercised in full or in part by giving
written notice to the Company stating the number of Shares as to which the
Option is being exercised and accompanied by payment in full for such
Shares. No partial exercise may be made for less than one hundred (100)
full Shares of Common Stock. Payment shall be made in accordance with the
terms of the Plan. Upon such exercise, delivery of a certificate for paid-
up, non-assessable Shares shall be made at the principal office of the
Company to the person exercising the Option, not less than thirty (30) and
not more than ninety (90) days from the date of receipt of the notice by
the Company.
(b) The Company shall at all times during the term of the Option reserve
and keep available such number of Shares of its Common Stock as will be
sufficient to satisfy the requirements of the Option.
6. Non-Transferability.
-------------------
The right of the Optionee to exercise the Option shall not be assignable
or transferable by the Optionee otherwise than by will or the laws or descent
and distribution or pursuant to a domestic relations order as defined in the
Code or Title 1 of the Employee Retirement Income Security Act or the rules
thereunder, and the Option may be exercised during the lifetime of the Optionee
only by him or her. The Option shall be null and void and without effect upon
the bankruptcy of the Optionee or upon any attempted assignment or transfer,
except as herein provided, including without limitation any purported
assignment, whether voluntary or by operation of law, pledge, hypothecation or
other disposition contrary to the provisions hereof, or levy of execution,
attachment, trustee process or similar process, whether legal or equitable, upon
the Option.
7. Representation Letter and Investment Legend.
-------------------------------------------
In the event that for any reason the Shares to be issued upon exercise of
the Option shall not be effectively registered under the Securities Act of 1933
(" 1933 Act"), upon any date on which the Option is exercised in whole or in
part, the person exercising the Option shall give a written representation to
the Company in the form attached hereto as Exhibit 1 and
-3-
<PAGE>
the Company shall place an "investment legend", so-called, as described in
Exhibit 1, upon any certificate for the Shares issued by reason of such
exercise.
8. Adjustments on Changes in Capitalization.
----------------------------------------
Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Option.
9. No Special Employment Rights.
----------------------------
The provisions of this Section 9 are applicable only to Optionees who are
employees of the Company. Nothing contained in the Plan or this Option shall be
construed or deemed by any person under any circumstances to bind the Company to
continue the employment of the Optionee for the period within which this Option
may be exercised. However, during the period of the Optionee's employment, the
Optionee shall render diligently and faithfully the services which are assigned
to the Optionee from time to time by the Board of Directors or by the executive
officers of the Company and shall at no time take any action which directly or
indirectly would be inconsistent with the best interests of the Company.
10. Rights as a Stockholder.
-----------------------
The Optionee shall have no rights as a stockholder with respect to any
Shares which may be purchased by exercise of this Option unless and until a
certificate or certificates representing such Shares are duly issued and
delivered to the Optionee. Except as otherwise expressly provided in the Plan,
no adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.
11. Withholding Taxes.
-----------------
Whenever Shares are to be issued upon exercise of this Option, the Company
shall have the right to require the Optionee to remit to the Company an amount
sufficient to satisfy all Federal, state and local withholding tax requirements
prior to the delivery of any certificate or certificates for the Shares. The
Company may agree to permit the Optionee to authorize the Company to withhold
Shares of Common Stock purchased upon exercise of the Option to satisfy the
above-mentioned withholding requirement; provided, however, no such agreement
may be made by an Optionee who is an officer or director within the meaning of
Section 16 of the Securities Exchange Act of 1934, as amended, except pursuant
to a standing election to so withhold Shares of Common Stock purchased upon
exercise of the Option, such election to be made in the form set forth in
Exhibit 2 hereto and to be made not less than six (6) months prior to such
exercise. Such election may be revoked only upon providing six (6) months prior
written notice to the Company.
-4-
<PAGE>
12. Plan Provisions Control.
-----------------------
In the event of any inconsistency between the provisions of this Agreement
and the provisions of the Plan, the inconsistent provision(s) of this Agreement
shall be superseded by the Plan provision(s) to the extent necessary to
reconcile the inconsistency.
-5-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed,
and the Optionee has hereunto set his or her hand, all as of the 28th day of
May, 1998.
LIFE MEDICAL SCIENCES, INC.
By: /s/ Walter Maupay
----------------------------------------------
OPTIONEE
Print Name: Walter Maupay
--------------------------------------
Sign Name: /s/ Walter Maupay
--------------------------------------
OPTION INFORMATION
------------------
Total Number of Shares Underlying Option: 39,222
Purchase Price Per Share: $2.00
VESTING & EXPIRATION SCHEDULE
-----------------------------
Vesting Date Number of Shares Expiration Date
- ------------ ---------------- ---------------
August 15, 1996 13,074 August 15, 2001
August 15, 1997 13,074 August 15, 2002
August 15, 1998 13,074 August 15, 2003
This agreement supercedes the previous agreement dated August 15, 1996.
-6-
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
In connection with the exercise by me of an option to purchase shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company"), I
hereby acknowledge that I have been informed as follows:
1. The shares of Common Stock of the Company to be issued to me pursuant to
the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held indefinitely unless the Shares are subsequently registered under the
Securities Act, or an exemption from such registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
Securities Act can be made only after the holding period provided by that Rule
has been satisfied, and, in any sale to which that Rule is not applicable,
registration or compliance with some other exemption under the Securities Act
will be required.
3. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.
In consideration of the issuance of certificates for the Shares to me, I
hereby represent and warrant that I am acquiring the Shares for my own account
for investment, and that I will not sell, pledge or transfer the Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and warranty,
I agree that there may be affixed to the certificates for the Shares to be
issued to me, and to all certificates issued hereafter representing the Shares
(until in the opinion of counsel, which opinion must be reasonably satisfactory
in form and substance to counsel for the Company, it is no longer necessary or
required) a legend as follows:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and were acquired by the
registered holder pursuant to a representation and warranty that such
holder was acquiring the Shares for his own account and for investment,
with no intention of transfer or disposition of the same in violation of
the registration requirements of that Act. These securities may not be
sold, pledged, or transferred in the absence of an effective registration
statement under such Act, or an opinion of counsel, which opinion is
reasonably satisfactory to counsel to the Company, to the effect that
registration is not required under such Act."
-7-
<PAGE>
I further agree that the Company may place a stop transfer order with its
transfer agent, prohibiting the transfer of the Shares, so long as the legend
remains on the certificates representing the Shares.
Very truly yours,
/s/ Walter Maupay
Dated: _____________
-8-
<PAGE>
EXHIBIT 2
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
The undersigned Optionee hereby elects and agrees that, whenever the
undersigned exercises a stock option (including any options which now or may
hereafter be granted), Life Medical Sciences, Inc. (the "Company") shall
withhold from that exercise such number of Shares equal in value to the federal
and state withholding taxes due upon such exercise. The undersigned further
acknowledges and agrees that this election may not be revoked without six (6)
months' prior written notice to the Company.
OPTIONEE:
/s/ Walter R. Maupay
---------------------------------------------
(Signature)
/s/ Walter R. Maupay, Jr.
---------------------------------------------
(Print Name)
-9-
<PAGE>
EXHIBIT 10.76
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED 1992 STOCK OPTION PLAN
(non-qualified stock option)
AGREEMENT entered into as of the date set forth on the signature page hereto
by and between Life Medical Sciences, Inc., a Delaware corporation, with a
principal place of business at 379 Thornall Street, Edison, New Jersey (together
with its subsidiaries, if any, the "Company"), and the undersigned (the
"Optionee").
WHEREAS, the Company desires to grant to the Optionee a non-qualified stock
option under the Company's Amended and Restated 1992 Stock Option Plan (the
"Plan") to acquire shares of the Company's Common Stock, $.001 par value (the
"Shares"); and
WHEREAS, the Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option.
---------------
The Company hereby grants to the Optionee a non-qualified stock option under
the Plan (the "Option") to purchase all or any part of an aggregate of the
number of Shares set forth on the signature page to this Agreement on the terms
and conditions hereinafter set forth. The Option shall NOT be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
--------------
The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the dollar amount per share set forth on the signature page to this
Agreement.
3. Time of Vesting and Exercise of Option.
--------------------------------------
Subject to Section 4 hereof, the Option shall vest and become exercisable
on the dates and as to the installment amounts set forth on the signature page
to this Agreement. To the extent the Option (or any portion thereof) is not
exercised by the Optionee when it becomes exercisable, it shall not expire, but
shall be carried forward and shall be exercisable, on a cumulative basis, until
the Expiration Date (as hereinafter defined) or until earlier termination as
hereinafter provided.
<PAGE>
4. Term; Extent of Exercisability.
------------------------------
(a) Term.
(i) The Option shall expire as to each installment amount on the
date set forth next to each such amount on the signature page to this
Agreement (the "Expiration Date"), subject to earlier termination as
herein provided.
(ii) Except as otherwise provided in this Section 4, if the Optionee
ceases to perform services for the Company, the Option shall terminate
on the earlier of the last day of the third month or ninety days after
the date such Optionee ceases to perform services for the Company, or
on the date on which the Option expires by its terms, whichever occurs
first.
(iii) If such termination to perform services is because of dismissal
for cause or because the Optionee is in breach of any employment
agreement, such Option will terminate on the date the Optionee ceases
to perform services for the Company.
(iv) If such termination to perform services is because the Optionee
has become permanently disabled (within the meaning of Section
22(e)(3) of the Code), such Option shall terminate on the last day of
the twelfth month from the date such Optionee ceases to perform
services for the Company, or on the date on which the Option expires
by its terms, whichever occurs first.
(v) In the event of the death of the Optionee, the Option granted to
such Optionee shall terminate on the last day of the twelfth month
from the date of death, or on the date on which the Option expires by
its terms, whichever occurs first.
(b) Extent of Exercisability.
------------------------
(i) Except as provided below, if the Optionee ceases to perform
services for the Company, the Option shall be exercisable only to the
extent that the right to purchase Shares under such Option has accrued
and is in effect on the date such Optionee ceases to perform services
for the Company.
(ii) If the Optionee ceases to perform services for the Company
because he or she has become permanently disabled (within the meaning
of Section 22(e)(3) of the Code), the Option shall be exercisable to
the full number of Shares covered by such Option.
-2-
<PAGE>
(iii) In the event of the death of the Optionee, the Option may be
exercised with respect to the full number of Shares covered thereby
whether or not under the provisions of Section 3 hereof the Optionee
was entitled to do so at the date of his or her death, by the estate
of such Optionee, or by any person or persons who acquired the right
to exercise such Option by bequest or inheritance or by reason of the
death of such Optionee.
5. Manner of Exercise of Option.
----------------------------
(a) To the extent that the right to exercise the Option has accrued and is
in effect, the Option may be exercised in full or in part by giving written
notice to the Company stating the number of Shares as to which the Option
is being exercised and accompanied by payment in full for such Shares. No
partial exercise may be made for less than one hundred (100) full Shares of
Common Stock. Payment shall be made in accordance with the terms of the
Plan. Upon such exercise, delivery of a certificate for paid-up, non-
assessable Shares shall be made at the principal office of the Company to
the person exercising the Option, not less than thirty (30) and not more
than ninety (90) days from the date of receipt of the notice by the
Company.
(b) The Company shall at all times during the term of the Option reserve
and keep available such number of Shares of its Common Stock as will be
sufficient to satisfy the requirements of the Option.
6. Non-Transferability.
-------------------
The right of the Optionee to exercise the Option shall not be assignable
or transferable by the Optionee otherwise than by will or the laws or descent
and distribution or pursuant to a domestic relations order as defined in the
Code or Title 1 of the Employee Retirement Income Security Act or the rules
thereunder, and the Option may be exercised during the lifetime of the Optionee
only by him or her. The Option shall be null and void and without effect upon
the bankruptcy of the Optionee or upon any attempted assignment or transfer,
except as herein provided, including without limitation any purported
assignment, whether voluntary or by operation of law, pledge, hypothecation or
other disposition contrary to the provisions hereof, or levy of execution,
attachment, trustee process or similar process, whether legal or equitable, upon
the Option.
7. Representation Letter and Investment Legend.
-------------------------------------------
In the event that for any reason the Shares to be issued upon exercise of
the Option shall not be effectively registered under the Securities Act of 1933
(" 1933 Act"), upon any date on which the Option is exercised in whole or in
part, the person exercising the Option shall give a written representation to
the Company in the form attached hereto as Exhibit 1 and the Company shall place
an "investment legend", so-called, as described in Exhibit 1, upon any
-3-
<PAGE>
certificate for the Shares issued by reason of such exercise.
8. Adjustments on Changes in Capitalization.
----------------------------------------
Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Option.
9. No Special Employment Rights.
----------------------------
The provisions of this Section 9 are applicable only to Optionee's who are
employees of the Company. Nothing contained in the Plan or this Option shall be
construed or deemed by any person under any circumstances to bind the Company to
continue the employment of the Optionee for the period within which this Option
may be exercised. However, during the period of the Optionee's employment, the
Optionee shall render diligently and faithfully the services which are assigned
to the Optionee from time to time by the Board of Directors or by the executive
officers of the Company and shall at no time take any action which directly or
indirectly would be inconsistent with the best interests of the Company.
10. Rights as a Stockholder.
-----------------------
The Optionee shall have no rights as a stockholder with respect to any
Shares which may be purchased by exercise of this Option unless and until a
certificate or certificates representing such Shares are duly issued and
delivered to the Optionee. Except as otherwise expressly provided in the Plan,
no adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.
11. Withholding Taxes.
-----------------
Whenever Shares are to be issued upon exercise of this Option, the
Company shall have the right to require the Optionee to remit to the Company an
amount sufficient to satisfy all Federal, state and local withholding tax
requirements prior to the delivery of any certificate or certificates for the
Shares. The Company may agree to permit the Optionee to authorize the Company to
withhold Shares of Common Stock purchased upon exercise of the Option to satisfy
the above-mentioned withholding requirement; provided, however, no such
agreement may be made by an Optionee who is an officer or director within the
meaning of Section 16 of the Securities Exchange Act of 1934, as amended, except
pursuant to a standing election to so withhold Shares of Common Stock purchased
upon exercise of the Option, such election to be made in the form set forth in
Exhibit 2 hereto and to be made not less than six (6) months prior to such
exercise. Such election may be revoked only upon providing six (6) months prior
written notice to the Company.
-4-
<PAGE>
12. Plan Provisions Control.
-----------------------
In the event of any inconsistency between the provisions of this
Agreement and the provisions of the Plan, the inconsistent provision(s) of this
Agreement shall be superseded by the Plan provision(s) to the extent necessary
to reconcile the inconsistency.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed,
and the Optionee has hereunto set his or her hand, all as of the 28th day of
May, 1998.
LIFE MEDICAL SCIENCES, INC.
By: /s/ Herbert Moskowitz
----------------------------------------------
OPTIONEE
Print Name: Dr. Herbert Moskowitz
-------------------------------------
Sign Name: Herbert Moskowitz
-------------------------------------
OPTION INFORMATION
------------------
Total Number of Shares Underlying Option: 47,864
Purchase Price Per Share: $ 2.00
VESTING & EXPIRATION SCHEDULE
-----------------------------
Vesting Date Number of Shares Expiration Date
- ------------ ---------------- ---------------
June 18, 1997 47,864 June 18, 2002
This agreement supercedes the previous agreement dated June 18, 1997.
-5-
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
In connection with the exercise by me of an option to purchase shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company"), I
hereby acknowledge that I have been informed as follows:
1. The shares of Common Stock of the Company to be issued to me pursuant to
the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held indefinitely unless the Shares are subsequently registered under the
Securities Act, or an exemption from such registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
Securities Act can be made only after the holding period provided by that Rule
has been satisfied, and, in any sale to which that Rule is not applicable,
registration or compliance with some other exemption under the Securities Act
will be required.
3. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.
In consideration of the issuance of certificates for the Shares to me, I
hereby represent and warrant that I am acquiring the Shares for my own account
for investment, and that I will not sell, pledge or transfer the Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and warranty,
I agree that there may be affixed to the certificates for the Shares to be
issued to me, and to all certificates issued hereafter representing the Shares
(until in the opinion of counsel, which opinion must be reasonably satisfactory
in form and substance to counsel for the Company, it is no longer necessary or
required) a legend as follows:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and were acquired by the
registered holder pursuant to a representation and warranty that such
holder was acquiring the Shares for his own account and for investment,
with no intention of transfer or disposition of the same in violation of
the registration requirements of that Act. These securities may not be
sold, pledged, or transferred in the absence of an effective registration
statement under such Act, or an opinion of counsel, which opinion is
reasonably satisfactory to counsel to the Company, to the effect that
registration is not required under such Act."
-6-
<PAGE>
I further agree that the Company may place a stop transfer order with its
transfer agent, prohibiting the transfer of the Shares, so long as the legend
remains on the certificates representing the Shares.
Very truly yours,
/s/ Herbert Moskowitz
Dated: _____________
-7-
<PAGE>
EXHIBIT 2
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
The undersigned Optionee hereby elects and agrees that, whenever the
undersigned exercises a stock option (including any options which now or may
hereafter be granted), Life Medical Sciences, Inc. (the "Company") shall
withhold from that exercise such number of Shares equal in value to the federal
and state withholding taxes due upon such exercise. The undersigned further
acknowledges and agrees that this election may not be revoked without six (6)
months' prior written notice to the Company.
OPTIONEE:
-------------------------------------------------
(Signature)
-------------------------------------------------
(Print Name)
-8-
<PAGE>
EXHIBIT 10.77
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED 1992 STOCK OPTION PLAN
(non-qualified stock option)
AGREEMENT entered into as of the date set forth on the signature page hereto
by and between Life Medical Sciences, Inc., a Delaware corporation, with a
principal place of business at 379 Thornall Street, Edison, New Jersey (together
with its subsidiaries, if any, the "Company"), and the undersigned (the
"Optionee").
WHEREAS, the Company desires to grant to the Optionee a non-qualified stock
option under the Company's Amended and Restated 1992 Stock Option Plan (the
"Plan") to acquire shares of the Company's Common Stock, $.001 par value (the
"Shares"); and
WHEREAS, the Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option.
---------------
The Company hereby grants to the Optionee a non-qualified stock option under
the Plan (the "Option") to purchase all or any part of an aggregate of the
number of Shares set forth on the signature page to this Agreement on the terms
and conditions hereinafter set forth. The Option shall NOT be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
--------------
The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the dollar amount per share set forth on the signature page to this
Agreement.
3. Time of Vesting and Exercise of Option.
--------------------------------------
Subject to Section 4 hereof, the Option shall vest and become exercisable
on the dates and as to the installment amounts set forth on the signature page
to this Agreement. To the extent the Option (or any portion thereof) is not
exercised by the Optionee when it becomes exercisable, it shall not expire, but
shall be carried forward and shall be exercisable, on a cumulative basis, until
the Expiration Date (as hereinafter defined) or until earlier termination as
hereinafter provided.
<PAGE>
4. Term; Extent of Exercisability.
------------------------------
(a) Term.
(i) The Option shall expire as to each installment amount on the
date set forth next to each such amount on the signature page to this
Agreement (the "Expiration Date"), subject to earlier termination as
herein provided.
(ii) Except as otherwise provided in this Section 4, if the Optionee
ceases to perform services for the Company, the Option shall terminate
on the earlier of the last day of the third month or ninety days after
the date such Optionee ceases to perform services for the Company, or
on the date on which the Option expires by its terms, whichever occurs
first.
(iii) If such termination to perform services is because of dismissal
for cause or because the Optionee is in breach of any employment
agreement, such Option will terminate on the date the Optionee ceases
to perform services for the Company.
(iv) If such termination to perform services is because the Optionee
has become permanently disabled (within the meaning of Section
22(e)(3) of the Code), such Option shall terminate on the last day of
the twelfth month from the date such Optionee ceases to perform
services for the Company, or on the date on which the Option expires
by its terms, whichever occurs first.
(v) In the event of the death of the Optionee, the Option granted to
such Optionee shall terminate on the last day of the twelfth month
from the date of death, or on the date on which the Option expires by
its terms, whichever occurs first.
(b) Extent of Exercisability.
------------------------
(i) Except as provided below, if the Optionee ceases to perform
services for the Company, the Option shall be exercisable only to the
extent that the right to purchase Shares under such Option has accrued
and is in effect on the date such Optionee ceases to perform services
for the Company.
(ii) If the Optionee ceases to perform services for the Company
because he or she has become permanently disabled (within the meaning
of Section 22(e)(3) of the Code), the Option shall be exercisable to
the full number of Shares covered by such Option.
-2-
<PAGE>
(iii) In the event of the death of the Optionee, the Option may be
exercised with respect to the full number of Shares covered thereby
whether or not under the provisions of Section 3 hereof the Optionee
was entitled to do so at the date of his or her death, by the estate
of such Optionee, or by any person or persons who acquired the right
to exercise such Option by bequest or inheritance or by reason of the
death of such Optionee.
5. Manner of Exercise of Option.
----------------------------
(a) To the extent that the right to exercise the Option has accrued and is
in effect, the Option may be exercised in full or in part by giving written
notice to the Company stating the number of Shares as to which the Option
is being exercised and accompanied by payment in full for such Shares. No
partial exercise may be made for less than one hundred (100) full Shares of
Common Stock. Payment shall be made in accordance with the terms of the
Plan. Upon such exercise, delivery of a certificate for paid-up, non-
assessable Shares shall be made at the principal office of the Company to
the person exercising the Option, not less than thirty (30) and not more
than ninety (90) days from the date of receipt of the notice by the
Company.
(b) The Company shall at all times during the term of the Option reserve
and keep available such number of Shares of its Common Stock as will be
sufficient to satisfy the requirements of the Option.
6. Non-Transferability.
-------------------
The right of the Optionee to exercise the Option shall not be assignable or
transferable by the Optionee otherwise than by will or the laws or descent and
distribution or pursuant to a domestic relations order as defined in the Code or
Title 1 of the Employee Retirement Income Security Act or the rules thereunder,
and the Option may be exercised during the lifetime of the Optionee only by him
or her. The Option shall be null and void and without effect upon the bankruptcy
of the Optionee or upon any attempted assignment or transfer, except as herein
provided, including without limitation any purported assignment, whether
voluntary or by operation of law, pledge, hypothecation or other disposition
contrary to the provisions hereof, or levy of execution, attachment, trustee
process or similar process, whether legal or equitable, upon the Option.
7. Representation Letter and Investment Legend.
-------------------------------------------
In the event that for any reason the Shares to be issued upon exercise of
the Option shall not be effectively registered under the Securities Act of 1933
(" 1933 Act"), upon any date on which the Option is exercised in whole or in
part, the person exercising the Option shall give a written representation to
the Company in the form attached hereto as Exhibit 1 and the Company shall place
an "investment legend", so-called, as described in Exhibit 1, upon any
-3-
<PAGE>
certificate for the Shares issued by reason of such exercise.
8. Adjustments on Changes in Capitalization.
----------------------------------------
Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Option.
9. No Special Employment Rights.
----------------------------
The provisions of this Section 9 are applicable only to Optionee's who are
employees of the Company. Nothing contained in the Plan or this Option shall be
construed or deemed by any person under any circumstances to bind the Company to
continue the employment of the Optionee for the period within which this Option
may be exercised. However, during the period of the Optionee's employment, the
Optionee shall render diligently and faithfully the services which are assigned
to the Optionee from time to time by the Board of Directors or by the executive
officers of the Company and shall at no time take any action which directly or
indirectly would be inconsistent with the best interests of the Company.
10. Rights as a Stockholder.
-----------------------
The Optionee shall have no rights as a stockholder with respect to any
Shares which may be purchased by exercise of this Option unless and until a
certificate or certificates representing such Shares are duly issued and
delivered to the Optionee. Except as otherwise expressly provided in the Plan,
no adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.
11. Withholding Taxes.
-----------------
Whenever Shares are to be issued upon exercise of this Option, the Company
shall have the right to require the Optionee to remit to the Company an amount
sufficient to satisfy all Federal, state and local withholding tax requirements
prior to the delivery of any certificate or certificates for the Shares. The
Company may agree to permit the Optionee to authorize the Company to withhold
Shares of Common Stock purchased upon exercise of the Option to satisfy the
above-mentioned withholding requirement; provided, however, no such agreement
may be made by an Optionee who is an officer or director within the meaning of
Section 16 of the Securities Exchange Act of 1934, as amended, except pursuant
to a standing election to so withhold Shares of Common Stock purchased upon
exercise of the Option, such election to be made in the form set forth in
Exhibit 2 hereto and to be made not less than six (6) months prior to such
exercise. Such election may be revoked only upon providing six (6) months prior
written notice to the Company.
-4-
<PAGE>
12. Plan Provisions Control.
-----------------------
In the event of any inconsistency between the provisions of this Agreement
and the provisions of the Plan, the inconsistent provision(s) of this Agreement
shall be superseded by the Plan provision(s) to the extent necessary to
reconcile the inconsistency.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed,
and the Optionee has hereunto set his or her hand, all as of the 28th day of
May, 1998.
LIFE MEDICAL SCIENCES, INC.
By: /s/ Dr. Herbert Moskowitz
---------------------------------------------
OPTIONEE
Print Name: Dr. Herbert Moskowitz
------------------------------------
Sign Name: Dr. Herbert Moskowitz
------------------------------------
OPTION INFORMATION
------------------
Total Number of Shares Underlying Option: 2,136
Purchase Price Per Share: $ 4.75
VESTING & EXPIRATION SCHEDULE
-----------------------------
Vesting Date Number of Shares Expiration Date
- ------------ ---------------- ---------------
June 18, 1997 2,136 June 18, 2002
This agreement supercedes the previous agreement dated June 18, 1997.
-5-
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
In connection with the exercise by me of an option to purchase shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company"), I
hereby acknowledge that I have been informed as follows:
1. The shares of Common Stock of the Company to be issued to me pursuant to
the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held indefinitely unless the Shares are subsequently registered under the
Securities Act, or an exemption from such registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
Securities Act can be made only after the holding period provided by that Rule
has been satisfied, and, in any sale to which that Rule is not applicable,
registration or compliance with some other exemption under the Securities Act
will be required.
3. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.
In consideration of the issuance of certificates for the Shares to me, I
hereby represent and warrant that I am acquiring the Shares for my own account
for investment, and that I will not sell, pledge or transfer the Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and warranty,
I agree that there may be affixed to the certificates for the Shares to be
issued to me, and to all certificates issued hereafter representing the Shares
(until in the opinion of counsel, which opinion must be reasonably satisfactory
in form and substance to counsel for the Company, it is no longer necessary or
required) a legend as follows:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and were acquired by the
registered holder pursuant to a representation and warranty that such
holder was acquiring the Shares for his own account and for investment,
with no intention of transfer or disposition of the same in violation of
the registration requirements of that Act. These securities may not be
sold, pledged, or transferred in the absence of an effective registration
statement under such Act, or an opinion of counsel, which opinion is
reasonably satisfactory to counsel to the Company, to the effect that
registration is not required under such Act."
-6-
<PAGE>
I further agree that the Company may place a stop transfer order with its
transfer agent, prohibiting the transfer of the Shares, so long as the legend
remains on the certificates representing the Shares.
Very truly yours,
/s/ Herbert Moskowitz
Dated: _____________
-7-
<PAGE>
EXHIBIT 2
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
The undersigned Optionee hereby elects and agrees that, whenever the
undersigned exercises a stock option (including any options which now or may
hereafter be granted), Life Medical Sciences, Inc. (the "Company") shall
withhold from that exercise such number of Shares equal in value to the federal
and state withholding taxes due upon such exercise. The undersigned further
acknowledges and agrees that this election may not be revoked without six (6)
months' prior written notice to the Company.
OPTIONEE:
------------------------------------------------
(Signature)
------------------------------------------------
(Print Name)
-8-
<PAGE>
EXHIBIT 10.78
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED 1992 STOCK OPTION PLAN
(non-qualified stock option)
AGREEMENT entered into as of the date set forth on the signature page hereto
by and between Life Medical Sciences, Inc., a Delaware corporation, with a
principal place of business at 379 Thornall Street, Edison, New Jersey (together
with its subsidiaries, if any, the "Company"), and the undersigned (the
"Optionee").
WHEREAS, the Company desires to grant to the Optionee a non-qualified stock
option under the Company's Amended and Restated 1992 Stock Option Plan (the
"Plan") to acquire shares of the Company's Common Stock, $.001 par value (the
"Shares"); and
WHEREAS, the Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option.
---------------
The Company hereby grants to the Optionee a non-qualified stock option under
the Plan (the "Option") to purchase all or any part of an aggregate of the
number of Shares set forth on the signature page to this Agreement on the terms
and conditions hereinafter set forth. The Option shall NOT be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
--------------
The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the dollar amount per share set forth on the signature page to this
Agreement.
3. Time of Vesting and Exercise of Option.
--------------------------------------
Subject to Section 4 hereof, the Option shall vest and become exercisable
on the dates and as to the installment amounts set forth on the signature page
to this Agreement. To the extent the Option (or any portion thereof) is not
exercised by the Optionee when it becomes exercisable, it shall not expire, but
shall be carried forward and shall be exercisable, on a cumulative basis, until
the Expiration Date (as hereinafter defined) or until earlier termination as
hereinafter provided.
<PAGE>
4. Term; Extent of Exercisability.
------------------------------
(a) Term.
(i) The Option shall expire as to each installment amount on the
date set forth next to each such amount on the signature page to this
Agreement (the "Expiration Date"), subject to earlier termination as
herein provided.
(ii) Except as otherwise provided in this Section 4, if the Optionee
ceases to perform services for the Company, the Option shall
terminate on the earlier of the last day of the third month or ninety
days after the date such Optionee ceases to perform services for the
Company, or on the date on which the Option expires by its terms,
whichever occurs first.
(iii) If such termination to perform services is because of dismissal
for cause or because the Optionee is in breach of any employment
agreement, such Option will terminate on the date the Optionee ceases
to perform services for the Company.
(iv) If such termination to perform services is because the Optionee
has become permanently disabled (within the meaning of Section
22(e)(3) of the Code), such Option shall terminate on the last day of
the twelfth month from the date such Optionee ceases to perform
services for the Company, or on the date on which the Option expires
by its terms, whichever occurs first.
(v) In the event of the death of the Optionee, the Option granted
to such Optionee shall terminate on the last day of the twelfth month
from the date of death, or on the date on which the Option expires by
its terms, whichever occurs first.
(b) Extent of Exercisability.
------------------------
(i) Except as provided below, if the Optionee ceases to perform
services for the Company, the Option shall be exercisable only to the
extent that the right to purchase Shares under such Option has
accrued and is in effect on the date such Optionee ceases to perform
services for the Company.
(ii) If the Optionee ceases to perform services for the Company
because he or she has become permanently disabled (within the meaning
of Section 22(e)(3) of the Code), the Option shall be exercisable to
the full number of Shares covered by such Option.
-2-
<PAGE>
(iii) In the event of the death of the Optionee, the Option may be
exercised with respect to the full number of Shares covered thereby
whether or not under the provisions of Section 3 hereof the Optionee
was entitled to do so at the date of his or her death, by the estate
of such Optionee, or by any person or persons who acquired the right
to exercise such Option by bequest or inheritance or by reason of the
death of such Optionee.
5. Manner of Exercise of Option.
----------------------------
(a) To the extent that the right to exercise the Option has accrued and
is in effect, the Option may be exercised in full or in part by giving
written notice to the Company stating the number of Shares as to which the
Option is being exercised and accompanied by payment in full for such
Shares. No partial exercise may be made for less than one hundred (100)
full Shares of Common Stock. Payment shall be made in accordance with the
terms of the Plan. Upon such exercise, delivery of a certificate for paid-
up, non-assessable Shares shall be made at the principal office of the
Company to the person exercising the Option, not less than thirty (30) and
not more than ninety (90) days from the date of receipt of the notice by
the Company.
(b) The Company shall at all times during the term of the Option reserve
and keep available such number of Shares of its Common Stock as will be
sufficient to satisfy the requirements of the Option.
6. Non-Transferability.
-------------------
The right of the Optionee to exercise the Option shall not be assignable or
transferable by the Optionee otherwise than by will or the laws or descent and
distribution or pursuant to a domestic relations order as defined in the Code or
Title 1 of the Employee Retirement Income Security Act or the rules thereunder,
and the Option may be exercised during the lifetime of the Optionee only by him
or her. The Option shall be null and void and without effect upon the bankruptcy
of the Optionee or upon any attempted assignment or transfer, except as herein
provided, including without limitation any purported assignment, whether
voluntary or by operation of law, pledge, hypothecation or other disposition
contrary to the provisions hereof, or levy of execution, attachment, trustee
process or similar process, whether legal or equitable, upon the Option.
7. Representation Letter and Investment Legend.
-------------------------------------------
In the event that for any reason the Shares to be issued upon exercise of
the Option shall not be effectively registered under the Securities Act of 1933
(" 1933 Act"), upon any date on which the Option is exercised in whole or in
part, the person exercising the Option shall give a written representation to
the Company in the form attached hereto as Exhibit 1 and the Company shall place
an "investment legend", so-called, as described in Exhibit 1, upon any
-3-
<PAGE>
certificate for the Shares issued by reason of such exercise.
8. Adjustments on Changes in Capitalization.
----------------------------------------
Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Option.
9. No Special Employment Rights.
----------------------------
The provisions of this Section 9 are applicable only to Optionee's who are
employees of the Company. Nothing contained in the Plan or this Option shall be
construed or deemed by any person under any circumstances to bind the Company to
continue the employment of the Optionee for the period within which this Option
may be exercised. However, during the period of the Optionee's employment, the
Optionee shall render diligently and faithfully the services which are assigned
to the Optionee from time to time by the Board of Directors or by the executive
officers of the Company and shall at no time take any action which directly or
indirectly would be inconsistent with the best interests of the Company.
10. Rights as a Stockholder.
-----------------------
The Optionee shall have no rights as a stockholder with respect to any
Shares which may be purchased by exercise of this Option unless and until a
certificate or certificates representing such Shares are duly issued and
delivered to the Optionee. Except as otherwise expressly provided in the Plan,
no adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.
11. Withholding Taxes.
-----------------
Whenever Shares are to be issued upon exercise of this Option, the
Company shall have the right to require the Optionee to remit to the Company an
amount sufficient to satisfy all Federal, state and local withholding tax
requirements prior to the delivery of any certificate or certificates for the
Shares. The Company may agree to permit the Optionee to authorize the Company to
withhold Shares of Common Stock purchased upon exercise of the Option to satisfy
the above-mentioned withholding requirement; provided, however, no such
agreement may be made by an Optionee who is an officer or director within the
meaning of Section 16 of the Securities Exchange Act of 1934, as amended, except
pursuant to a standing election to so withhold Shares of Common Stock purchased
upon exercise of the Option, such election to be made in the form set forth in
Exhibit 2 hereto and to be made not less than six (6) months prior to such
exercise. Such election may be revoked only upon providing six (6) months prior
written notice to the Company.
-4-
<PAGE>
12. Plan Provisions Control.
-----------------------
In the event of any inconsistency between the provisions of this
Agreement and the provisions of the Plan, the inconsistent provision(s) of this
Agreement shall be superseded by the Plan provision(s) to the extent necessary
to reconcile the inconsistency.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed,
and the Optionee has hereunto set his or her hand, all as of the 28th day of
May, 1998.
LIFE MEDICAL SCIENCES, INC.
By: /s/ Herbert Moskowitz
---------------------------------------------
OPTIONEE
Print Name: Dr. Herbert Moskowitz
--------------------------------------
Sign Name: /s/ Herbert Moskowitz
--------------------------------------
OPTION INFORMATION
------------------
Total Number of Shares Underlying Option: 100,000
Purchase Price Per Share: $ 2.00
VESTING & EXPIRATION SCHEDULE
-----------------------------
Vesting Date Number of Shares Expiration Date
- ------------ ---------------- ---------------
May 28, 1998 100,000 May 28, 2005
-5-
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
In connection with the exercise by me of an option to purchase shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company"), I
hereby acknowledge that I have been informed as follows:
1. The shares of Common Stock of the Company to be issued to me pursuant to
the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held indefinitely unless the Shares are subsequently registered under the
Securities Act, or an exemption from such registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
Securities Act can be made only after the holding period provided by that Rule
has been satisfied, and, in any sale to which that Rule is not applicable,
registration or compliance with some other exemption under the Securities Act
will be required.
3. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.
In consideration of the issuance of certificates for the Shares to me, I
hereby represent and warrant that I am acquiring the Shares for my own account
for investment, and that I will not sell, pledge or transfer the Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and warranty,
I agree that there may be affixed to the certificates for the Shares to be
issued to me, and to all certificates issued hereafter representing the Shares
(until in the opinion of counsel, which opinion must be reasonably satisfactory
in form and substance to counsel for the Company, it is no longer necessary or
required) a legend as follows:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and were acquired by the
registered holder pursuant to a representation and warranty that such
holder was acquiring the Shares for his own account and for investment,
with no intention of transfer or disposition of the same in violation of
the registration requirements of that Act. These securities may not be
sold, pledged, or transferred in the absence of an effective registration
statement under such Act, or an opinion of counsel, which opinion is
reasonably satisfactory to counsel to the Company, to the effect that
registration is not required under such Act."
-6-
<PAGE>
I further agree that the Company may place a stop transfer order with its
transfer agent, prohibiting the transfer of the Shares, so long as the legend
remains on the certificates representing the Shares.
Very truly yours,
/s/ Herbert Moskowitz
Dated: _____________
-7-
<PAGE>
EXHIBIT 2
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
The undersigned Optionee hereby elects and agrees that, whenever the
undersigned exercises a stock option (including any options which now or may
hereafter be granted), Life Medical Sciences, Inc. (the "Company") shall
withhold from that exercise such number of Shares equal in value to the federal
and state withholding taxes due upon such exercise. The undersigned further
acknowledges and agrees that this election may not be revoked without six (6)
months' prior written notice to the Company.
OPTIONEE:
------------------------------------------------
(Signature)
------------------------------------------------
(Print Name)
-8-
<PAGE>
EXHIBIT 10.79
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED 1992 STOCK OPTION PLAN
(non-qualified stock option)
AGREEMENT entered into as of the date set forth on the signature page hereto
by and between Life Medical Sciences, Inc., a Delaware corporation, with a
principal place of business at 379 Thornall Street, Edison, New Jersey (together
with its subsidiaries, if any, the "Company"), and the undersigned (the
"Optionee").
WHEREAS, the Company desires to grant to the Optionee a non-qualified stock
option under the Company's Amended and Restated 1992 Stock Option Plan (the
"Plan") to acquire shares of the Company's Common Stock, $.001 par value (the
"Shares"); and
WHEREAS, the Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option.
---------------
The Company hereby grants to the Optionee a non-qualified stock option
under the Plan (the "Option") to purchase all or any part of an aggregate of the
number of Shares set forth on the signature page to this Agreement on the terms
and conditions hereinafter set forth. The Option shall NOT be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
--------------
The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the dollar amount per share set forth on the signature page to this
Agreement.
3. Time of Vesting and Exercise of Option.
--------------------------------------
Subject to Section 4 hereof, the Option shall vest and become exercisable
on the dates and as to the installment amounts set forth on the signature page
to this Agreement. To the extent the Option (or any portion thereof) is not
exercised by the Optionee when it becomes exercisable, it shall not expire, but
shall be carried forward and shall be exercisable, on a cumulative basis, until
the Expiration Date (as hereinafter defined) or until earlier termination as
hereinafter provided.
<PAGE>
4. Term; Extent of Exercisability.
------------------------------
(a) Term.
(i) The Option shall expire as to each installment amount on the
date set forth next to each such amount on the signature page to this
Agreement (the "Expiration Date"), subject to earlier termination as
herein provided.
(ii) Except as otherwise provided in this Section 4, if the
Optionee ceases to perform services for the Company, the Option shall
terminate on the earlier of the last day of the third month or ninety
days after the date such Optionee ceases to perform services for the
Company, or on the date on which the Option expires by its terms,
whichever occurs first.
(iii) If such termination to perform services is because of
dismissal for cause or because the Optionee is in breach of any
employment agreement, such Option will terminate on the date the
Optionee ceases to perform services for the Company.
(iv) If such termination to perform services is because the
Optionee has become permanently disabled (within the meaning of
Section 22(e)(3) of the Code), such Option shall terminate on the last
day of the twelfth month from the date such Optionee ceases to perform
services for the Company, or on the date on which the Option expires
by its terms, whichever occurs first.
(v) In the event of the death of the Optionee, the Option granted
to such Optionee shall terminate on the last day of the twelfth month
from the date of death, or on the date on which the Option expires by
its terms, whichever occurs first.
(b) Extent of Exercisability.
------------------------
(i) Except as provided below, if the Optionee ceases to perform
services for the Company, the Option shall be exercisable only to the
extent that the right to purchase Shares under such Option has accrued
and is in effect on the date such Optionee ceases to perform services
for the Company.
(ii) If the Optionee ceases to perform services for the Company
because he or she has become permanently disabled (within the meaning
of Section 22(e)(3) of the Code), the Option shall be exercisable to
the full number of Shares covered by such Option.
-2-
<PAGE>
(iii) In the event of the death of the Optionee, the Option may be
exercised with respect to the full number of Shares covered thereby
whether or not under the provisions of Section 3 hereof the Optionee
was entitled to do so at the date of his or her death, by the estate
of such Optionee, or by any person or persons who acquired the right
to exercise such Option by bequest or inheritance or by reason of the
death of such Optionee.
5. Manner of Exercise of Option.
----------------------------
(a) To the extent that the right to exercise the Option has accrued and is
in effect, the Option may be exercised in full or in part by giving written
notice to the Company stating the number of Shares as to which the Option
is being exercised and accompanied by payment in full for such Shares. No
partial exercise may be made for less than one hundred (100) full Shares of
Common Stock. Payment shall be made in accordance with the terms of the
Plan. Upon such exercise, delivery of a certificate for paid-up, non-
assessable Shares shall be made at the principal office of the Company to
the person exercising the Option, not less than thirty (30) and not more
than ninety (90) days from the date of receipt of the notice by the
Company.
(b) The Company shall at all times during the term of the Option reserve
and keep available such number of Shares of its Common Stock as will
be sufficient to satisfy the requirements of the Option.
6. Non-Transferability.
-------------------
The right of the Optionee to exercise the Option shall not be assignable
or transferable by the Optionee otherwise than by will or the laws or descent
and distribution or pursuant to a domestic relations order as defined in the
Code or Title 1 of the Employee Retirement Income Security Act or the rules
thereunder, and the Option may be exercised during the lifetime of the Optionee
only by him or her. The Option shall be null and void and without effect upon
the bankruptcy of the Optionee or upon any attempted assignment or transfer,
except as herein provided, including without limitation any purported
assignment, whether voluntary or by operation of law, pledge, hypothecation or
other disposition contrary to the provisions hereof, or levy of execution,
attachment, trustee process or similar process, whether legal or equitable, upon
the Option.
7. Representation Letter and Investment Legend.
-------------------------------------------
In the event that for any reason the Shares to be issued upon exercise of
the Option shall not be effectively registered under the Securities Act of 1933
(" 1933 Act"), upon any date on which the Option is exercised in whole or in
part, the person exercising the Option shall give a written representation to
the Company in the form attached hereto as Exhibit 1 and the Company shall place
an "investment legend", so-called, as described in Exhibit 1, upon any
-3-
<PAGE>
certificate for the Shares issued by reason of such exercise.
8. Adjustments on Changes in Capitalization.
----------------------------------------
Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Option.
9. No Special Employment Rights.
----------------------------
The provisions of this Section 9 are applicable only to Optionee's who are
employees of the Company. Nothing contained in the Plan or this Option shall be
construed or deemed by any person under any circumstances to bind the Company to
continue the employment of the Optionee for the period within which this Option
may be exercised. However, during the period of the Optionee's employment, the
Optionee shall render diligently and faithfully the services which are assigned
to the Optionee from time to time by the Board of Directors or by the executive
officers of the Company and shall at no time take any action which directly or
indirectly would be inconsistent with the best interests of the Company.
10. Rights as a Stockholder.
-----------------------
The Optionee shall have no rights as a stockholder with respect to any
Shares which may be purchased by exercise of this Option unless and until a
certificate or certificates representing such Shares are duly issued and
delivered to the Optionee. Except as otherwise expressly provided in the Plan,
no adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.
11. Withholding Taxes.
-----------------
Whenever Shares are to be issued upon exercise of this Option, the
Company shall have the right to require the Optionee to remit to the Company an
amount sufficient to satisfy all Federal, state and local withholding tax
requirements prior to the delivery of any certificate or certificates for the
Shares. The Company may agree to permit the Optionee to authorize the Company to
withhold Shares of Common Stock purchased upon exercise of the Option to satisfy
the above-mentioned withholding requirement; provided, however, no such
agreement may be made by an Optionee who is an officer or director within the
meaning of Section 16 of the Securities Exchange Act of 1934, as amended, except
pursuant to a standing election to so withhold Shares of Common Stock purchased
upon exercise of the Option, such election to be made in the form set forth in
Exhibit 2 hereto and to be made not less than six (6) months prior to such
exercise. Such election may be revoked only upon providing six (6) months prior
written notice to the Company.
-4-
<PAGE>
12. Plan Provisions Control.
-----------------------
In the event of any inconsistency between the provisions of this
Agreement and the provisions of the Plan, the inconsistent provision(s) of this
Agreement shall be superseded by the Plan provision(s) to the extent necessary
to reconcile the inconsistency.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed,
and the Optionee has hereunto set his or her hand, all as of the 28th day of
May, 1998 .
LIFE MEDICAL SCIENCES, INC.
By:
--------------------------------------
OPTIONEE
Print Name: Dr. Herbert Moskowitz
-----------------------------
Sign Name:/s/ Herbert Moskowitz
-------------------------------
OPTION INFORMATION
------------------
Total Number of Shares Underlying Option: 150,000
Purchase Price Per Share: $ 2.00
VESTING & EXPIRATION SCHEDULE
-----------------------------
Vesting Date Number of Shares Expiration Date
- ------------ ---------------- ---------------
March 21, 1995 150,000 March 21, 2000
This agreement supercedes the previous agreement dated March 21, 1995.
-5-
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
In connection with the exercise by me of an option to purchase shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company"), I
hereby acknowledge that I have been informed as follows:
1. The shares of Common Stock of the Company to be issued to me pursuant to
the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held indefinitely unless the Shares are subsequently registered under the
Securities Act, or an exemption from such registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
Securities Act can be made only after the holding period provided by that Rule
has been satisfied, and, in any sale to which that Rule is not applicable,
registration or compliance with some other exemption under the Securities Act
will be required.
3. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.
In consideration of the issuance of certificates for the Shares to me, I
hereby represent and warrant that I am acquiring the Shares for my own account
for investment, and that I will not sell, pledge or transfer the Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and warranty,
I agree that there may be affixed to the certificates for the Shares to be
issued to me, and to all certificates issued hereafter representing the Shares
(until in the opinion of counsel, which opinion must be reasonably satisfactory
in form and substance to counsel for the Company, it is no longer necessary or
required) a legend as follows:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and were acquired by the
registered holder pursuant to a representation and warranty that such
holder was acquiring the Shares for his own account and for investment,
with no intention of transfer or disposition of the same in violation of
the registration requirements of that Act. These securities may not be
sold, pledged, or transferred in the absence of an effective registration
statement under such Act, or an opinion of counsel, which opinion is
reasonably satisfactory to counsel to the Company, to the effect that
registration is not required under such Act."
-6-
<PAGE>
I further agree that the Company may place a stop transfer order with its
transfer agent, prohibiting the transfer of the Shares, so long as the legend
remains on the certificates representing the Shares.
Very truly yours,
/s/ Herbert Moskowitz
Dated: 9/8/98
-------
-7-
<PAGE>
EXHIBIT 2
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
The undersigned Optionee hereby elects and agrees that, whenever the
undersigned exercises a stock option (including any options which now or may
hereafter be granted), Life Medical Sciences, Inc. (the "Company") shall
withhold from that exercise such number of Shares equal in value to the federal
and state withholding taxes due upon such exercise. The undersigned further
acknowledges and agrees that this election may not be revoked without six (6)
months' prior written notice to the Company.
OPTIONEE:
------------------------------------------------
(Signature)
------------------------------------------------
(Print Name)
-8-
<PAGE>
EXHIBIT 10.80
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED 1992 STOCK OPTION PLAN
(non-qualified stock option)
AGREEMENT entered into as of the date set forth on the signature page hereto
by and between Life Medical Sciences, Inc., a Delaware corporation, with a
principal place of business at 379 Thornall Street, Edison, New Jersey (together
with its subsidiaries, if any, the "Company"), and the undersigned (the
"Optionee").
WHEREAS, the Company desires to grant to the Optionee a non-qualified stock
option under the Company's Amended and Restated 1992 Stock Option Plan (the
"Plan") to acquire shares of the Company's Common Stock, $.001 par value (the
"Shares"); and
WHEREAS, the Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option.
---------------
The Company hereby grants to the Optionee a non-qualified stock option under
the Plan (the "Option") to purchase all or any part of an aggregate of the
number of Shares set forth on the signature page to this Agreement on the terms
and conditions hereinafter set forth. The Option shall NOT be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
--------------
The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the dollar amount per share set forth on the signature page to this
Agreement.
3. Time of Vesting and Exercise of Option.
--------------------------------------
Subject to Section 4 hereof, the Option shall vest and become exercisable on
the dates and as to the installment amounts set forth on the signature page to
this Agreement. To the extent the Option (or any portion thereof) is not
exercised by the Optionee when it becomes exercisable, it shall not expire, but
shall be carried forward and shall be exercisable, on a cumulative basis, until
the Expiration Date (as hereinafter defined) or until earlier termination as
hereinafter provided.
<PAGE>
4. Term; Extent of Exercisability.
------------------------------
(a) Term.
(i) The Option shall expire as to each installment amount on the
date set forth next to each such amount on the signature page to this
Agreement (the "Expiration Date"), subject to earlier termination as
herein provided.
(ii) Except as otherwise provided in this Section 4, if the
Optionee ceases to perform services for the Company, the Option shall
terminate on the earlier of the last day of the third month or ninety
days after the date such Optionee ceases to perform services for the
Company, or on the date on which the Option expires by its terms,
whichever occurs first.
(iii) If such termination to perform services is because of
dismissal for cause or because the Optionee is in breach of any
employment agreement, such Option will terminate on the date the
Optionee ceases to perform services for the Company.
(iv) If such termination to perform services is because the
Optionee has become permanently disabled (within the meaning of
Section 22(e)(3) of the Code), such Option shall terminate on the
last day of the twelfth month from the date such Optionee ceases to
perform services for the Company, or on the date on which the Option
expires by its terms, whichever occurs first.
(v) In the event of the death of the Optionee, the Option
granted to such Optionee shall terminate on the last day of the
twelfth month from the date of death, or on the date on which the
Option expires by its terms, whichever occurs first.
(b) Extent of Exercisability.
------------------------
(i) Except as provided below, if the Optionee ceases to perform
services for the Company, the Option shall be exercisable only to the
extent that the right to purchase Shares under such Option has
accrued and is in effect on the date such Optionee ceases to perform
services for the Company.
(ii) If the Optionee ceases to perform services for the Company
because he or she has become permanently disabled (within the meaning
of Section 22(e)(3) of the Code), the Option shall be exercisable to
the full number of Shares covered by such Option.
-2-
<PAGE>
(iii) In the event of the death of the Optionee, the Option may
be exercised with respect to the full number of Shares covered
thereby whether or not under the provisions of Section 3 hereof the
Optionee was entitled to do so at the date of his or her death, by
the estate of such Optionee, or by any person or persons who acquired
the right to exercise such Option by bequest or inheritance or by
reason of the death of such Optionee.
5. Manner of Exercise of Option.
----------------------------
(a) To the extent that the right to exercise the Option has accrued and is
in effect, the Option may be exercised in full or in part by giving written
notice to the Company stating the number of Shares as to which the Option
is being exercised and accompanied by payment in full for such Shares. No
partial exercise may be made for less than one hundred (100) full Shares of
Common Stock. Payment shall be made in accordance with the terms of the
Plan. Upon such exercise, delivery of a certificate for paid-up, non-
assessable Shares shall be made at the principal office of the Company to
the person exercising the Option, not less than thirty (30) and not more
than ninety (90) days from the date of receipt of the notice by the
Company.
(b) The Company shall at all times during the term of the Option reserve
and keep available such number of Shares of its Common Stock as will be
sufficient to satisfy the requirements of the Option.
6. Non-Transferability.
-------------------
The right of the Optionee to exercise the Option shall not be assignable or
transferable by the Optionee otherwise than by will or the laws or descent and
distribution or pursuant to a domestic relations order as defined in the Code or
Title 1 of the Employee Retirement Income Security Act or the rules thereunder,
and the Option may be exercised during the lifetime of the Optionee only by him
or her. The Option shall be null and void and without effect upon the bankruptcy
of the Optionee or upon any attempted assignment or transfer, except as herein
provided, including without limitation any purported assignment, whether
voluntary or by operation of law, pledge, hypothecation or other disposition
contrary to the provisions hereof, or levy of execution, attachment, trustee
process or similar process, whether legal or equitable, upon the Option.
7. Representation Letter and Investment Legend.
-------------------------------------------
In the event that for any reason the Shares to be issued upon exercise of the
Option shall not be effectively registered under the Securities Act of 1933 ("
1933 Act"), upon any date on which the Option is exercised in whole or in part,
the person exercising the Option shall give a written representation to the
Company in the form attached hereto as Exhibit 1 and the Company shall place an
"investment legend", so-called, as described in Exhibit 1, upon any certificate
for the Shares issued by reason of such exercise.
-3-
<PAGE>
8. Adjustments on Changes in Capitalization.
----------------------------------------
Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Option.
9. No Special Employment Rights.
----------------------------
The provisions of this Section 9 are applicable only to Optionee's who are
employees of the Company. Nothing contained in the Plan or this Option shall be
construed or deemed by any person under any circumstances to bind the Company to
continue the employment of the Optionee for the period within which this Option
may be exercised. However, during the period of the Optionee's employment, the
Optionee shall render diligently and faithfully the services which are assigned
to the Optionee from time to time by the Board of Directors or by the executive
officers of the Company and shall at no time take any action which directly or
indirectly would be inconsistent with the best interests of the Company.
10. Rights as a Stockholder.
-----------------------
The Optionee shall have no rights as a stockholder with respect to any Shares
which may be purchased by exercise of this Option unless and until a certificate
or certificates representing such Shares are duly issued and delivered to the
Optionee. Except as otherwise expressly provided in the Plan, no adjustment
shall be made for dividends or other rights for which the record date is prior
to the date such stock certificate is issued.
11. Withholding Taxes.
-----------------
Whenever Shares are to be issued upon exercise of this Option, the Company
shall have the right to require the Optionee to remit to the Company an amount
sufficient to satisfy all Federal, state and local withholding tax requirements
prior to the delivery of any certificate or certificates for the Shares. The
Company may agree to permit the Optionee to authorize the Company to withhold
Shares of Common Stock purchased upon exercise of the Option to satisfy the
above-mentioned withholding requirement; provided, however, no such agreement
may be made by an Optionee who is an officer or director within the meaning of
Section 16 of the Securities Exchange Act of 1934, as amended, except pursuant
to a standing election to so withhold Shares of Common Stock purchased upon
exercise of the Option, such election to be made in the form set forth in
Exhibit 2 hereto and to be made not less than six (6) months prior to such
exercise. Such election may be revoked only upon providing six (6) months prior
written notice to the Company.
12. Plan Provisions Control.
-----------------------
In the event of any inconsistency between the provisions of this Agreement and
the provisions of the Plan, the inconsistent provision(s) of this Agreement
shall be superseded by the Plan provision(s) to the extent necessary to
reconcile the inconsistency.
-4-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed, and
the Optionee has hereunto set his or her hand, all as of the 28th day of May,
1998 .
LIFE MEDICAL SCIENCES, INC.
By:
-------------------------------------
OPTIONEE
Print Name: Irwin M. Rosenthal
-----------------------------
Sign Name: /s/ Irwin M. Rosenthal
-----------------------------
OPTION INFORMATION
------------------
Total Number of Shares Underlying Option: 50,000
Purchase Price Per Share: $ 2.00
VESTING & EXPIRATION SCHEDULE
-----------------------------
Vesting Date Number of Shares Expiration Date
- ------------ ---------------- ---------------
June 18, 1997 50,000 June 18, 2002
This agreement supersedes the previous agreement dated June 18, 1997.
-5-
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
In connection with the exercise by me of an option to purchase shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company"), I
hereby acknowledge that I have been informed as follows:
1. The shares of Common Stock of the Company to be issued to me pursuant to
the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held indefinitely unless the Shares are subsequently registered under the
Securities Act, or an exemption from such registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
Securities Act can be made only after the holding period provided by that Rule
has been satisfied, and, in any sale to which that Rule is not applicable,
registration or compliance with some other exemption under the Securities Act
will be required.
3. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.
In consideration of the issuance of certificates for the Shares to me, I
hereby represent and warrant that I am acquiring the Shares for my own account
for investment, and that I will not sell, pledge or transfer the Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and warranty,
I agree that there may be affixed to the certificates for the Shares to be
issued to me, and to all certificates issued hereafter representing the Shares
(until in the opinion of counsel, which opinion must be reasonably satisfactory
in form and substance to counsel for the Company, it is no longer necessary or
required) a legend as follows:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and were acquired by the
registered holder pursuant to a representation and warranty that such
holder was acquiring the Shares for his own account and for investment,
with no intention of transfer or disposition of the same in violation of
the registration requirements of that Act. These securities may not be
sold, pledged, or transferred in the absence of an effective registration
statement under such Act, or an opinion of counsel, which opinion is
reasonably satisfactory to counsel to the Company, to the effect that
registration is not required under such Act."
-6-
<PAGE>
I further agree that the Company may place a stop transfer order with its
transfer agent, prohibiting the transfer of the Shares, so long as the legend
remains on the certificates representing the Shares.
Very truly yours,
/s/ Irwin M. Rosenthal
Dated: _____________
-7-
<PAGE>
EXHIBIT 2
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
The undersigned Optionee hereby elects and agrees that, whenever the
undersigned exercises a stock option (including any options which now or may
hereafter be granted), Life Medical Sciences, Inc. (the "Company") shall
withhold from that exercise such number of Shares equal in value to the federal
and state withholding taxes due upon such exercise. The undersigned further
acknowledges and agrees that this election may not be revoked without six (6)
months' prior written notice to the Company.
OPTIONEE:
/s/ Irwin M. Rosenthal
------------------------------------------
(Signature)
Irwin M. Rosenthal
------------------------------------------
(Print Name)
-8-
<PAGE>
Exhibit 10.81
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED 1992 STOCK OPTION PLAN
(non-qualified stock option)
AGREEMENT entered into as of the date set forth on the signature page hereto
by and between Life Medical Sciences, Inc., a Delaware corporation, with a
principal place of business at 379 Thornall Street, Edison, New Jersey (together
with its subsidiaries, if any, the "Company"), and the undersigned (the
"Optionee").
WHEREAS, the Company desires to grant to the Optionee a non-qualified stock
option under the Company's Amended and Restated 1992 Stock Option Plan (the
"Plan") to acquire shares of the Company's Common Stock, $.001 par value (the
"Shares"); and
WHEREAS, the Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option.
---------------
The Company hereby grants to the Optionee a non-qualified stock option under
the Plan (the "Option") to purchase all or any part of an aggregate of the
number of Shares set forth on the signature page to this Agreement on the terms
and conditions hereinafter set forth. The Option shall NOT be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
--------------
The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the dollar amount per share set forth on the signature page to this
Agreement.
3. Time of Vesting and Exercise of Option.
--------------------------------------
Subject to Section 4 hereof, the Option shall vest and become exercisable on
the dates and as to the installment amounts set forth on the signature page to
this Agreement. To the extent the Option (or any portion thereof) is not
exercised by the Optionee when it becomes exercisable, it shall not expire, but
shall be carried forward and shall be exercisable, on a cumulative basis, until
the Expiration Date (as hereinafter defined) or until earlier termination as
hereinafter provided.
<PAGE>
4. Term; Extent of Exercisability.
------------------------------
(a) Term.
(i) The Option shall expire as to each installment amount on the date
set forth next to each such amount on the signature page to this
Agreement (the "Expiration Date"), subject to earlier termination as
herein provided.
(ii) Except as otherwise provided in this Section 4, if the Optionee
ceases to perform services for the Company, the Option shall terminate on
the earlier of the last day of the third month or ninety days after the
date such Optionee ceases to perform services for the Company, or on the
date on which the Option expires by its terms, whichever occurs first.
(iii) If such termination to perform services is because of
dismissal for cause or because the Optionee is in breach of any
employment agreement, such Option will terminate on the date the Optionee
ceases to perform services for the Company.
(iv) If such termination to perform services is because the Optionee
has become permanently disabled (within the meaning of Section 22(e)(3)
of the Code), such Option shall terminate on the last day of the twelfth
month from the date such Optionee ceases to perform services for the
Company, or on the date on which the Option expires by its terms,
whichever occurs first.
(v) In the event of the death of the Optionee, the Option granted to
such Optionee shall terminate on the last day of the twelfth month from
the date of death, or on the date on which the Option expires by its
terms, whichever occurs first.
(b) Extent of Exercisability.
------------------------
(i) Except as provided below, if the Optionee ceases to perform
services for the Company, the Option shall be exercisable only to the
extent that the right to purchase Shares under such Option has accrued
and is in effect on the date such Optionee ceases to perform services for
the Company.
(ii) If the Optionee ceases to perform services for the Company because
he or she has become permanently disabled (within the meaning of Section
22(e)(3) of the Code), the Option shall be exercisable to the full number
of Shares covered by such Option.
-2-
<PAGE>
(iii) In the event of the death of the Optionee, the Option may be
exercised with respect to the full number of Shares covered thereby
whether or not under the provisions of Section 3 hereof the Optionee was
entitled to do so at the date of his or her death, by the estate of such
Optionee, or by any person or persons who acquired the right to exercise
such Option by bequest or inheritance or by reason of the death of such
Optionee.
5. Manner of Exercise of Option.
----------------------------
(a) To the extent that the right to exercise the Option has accrued and is
in effect, the Option may be exercised in full or in part by giving written
notice to the Company stating the number of Shares as to which the Option
is being exercised and accompanied by payment in full for such Shares. No
partial exercise may be made for less than one hundred (100) full Shares of
Common Stock. Payment shall be made in accordance with the terms of the
Plan. Upon such exercise, delivery of a certificate for paid-up, non-
assessable Shares shall be made at the principal office of the Company to
the person exercising the Option, not less than thirty (30) and not more
than ninety (90) days from the date of receipt of the notice by the
Company.
(b) The Company shall at all times during the term of the Option reserve
and keep available such number of Shares of its Common Stock as will be
sufficient to satisfy the requirements of the Option.
6. Non-Transferability.
-------------------
The right of the Optionee to exercise the Option shall not be assignable or
transferable by the Optionee otherwise than by will or the laws or descent and
distribution or pursuant to a domestic relations order as defined in the Code or
Title 1 of the Employee Retirement Income Security Act or the rules thereunder,
and the Option may be exercised during the lifetime of the Optionee only by him
or her. The Option shall be null and void and without effect upon the bankruptcy
of the Optionee or upon any attempted assignment or transfer, except as herein
provided, including without limitation any purported assignment, whether
voluntary or by operation of law, pledge, hypothecation or other disposition
contrary to the provisions hereof, or levy of execution, attachment, trustee
process or similar process, whether legal or equitable, upon the Option.
7. Representation Letter and Investment Legend.
-------------------------------------------
In the event that for any reason the Shares to be issued upon exercise of the
Option shall not be effectively registered under the Securities Act of 1933 ("
1933 Act"), upon any date on which the Option is exercised in whole or in part,
the person exercising the Option shall give a written representation to the
Company in the form attached hereto as Exhibit 1 and the Company shall place an
"investment legend", so-called, as described in Exhibit 1, upon any certificate
for the Shares issued by reason of such exercise.
-3-
<PAGE>
8. Adjustments on Changes in Capitalization.
----------------------------------------
Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Option.
9. No Special Employment Rights.
----------------------------
The provisions of this Section 9 are applicable only to Optionees who are
employees of the Company. Nothing contained in the Plan or this Option shall be
construed or deemed by any person under any circumstances to bind the Company to
continue the employment of the Optionee for the period within which this Option
may be exercised. However, during the period of the Optionee's employment, the
Optionee shall render diligently and faithfully the services which are assigned
to the Optionee from time to time by the Board of Directors or by the executive
officers of the Company and shall at no time take any action which directly or
indirectly would be inconsistent with the best interests of the Company.
10. Rights as a Stockholder.
-----------------------
The Optionee shall have no rights as a stockholder with respect to any Shares
which may be purchased by exercise of this Option unless and until a certificate
or certificates representing such Shares are duly issued and delivered to the
Optionee. Except as otherwise expressly provided in the Plan, no adjustment
shall be made for dividends or other rights for which the record date is prior
to the date such stock certificate is issued.
11. Withholding Taxes.
-----------------
Whenever Shares are to be issued upon exercise of this Option, the Company
shall have the right to require the Optionee to remit to the Company an amount
sufficient to satisfy all Federal, state and local withholding tax requirements
prior to the delivery of any certificate or certificates for the Shares. The
Company may agree to permit the Optionee to authorize the Company to withhold
Shares of Common Stock purchased upon exercise of the Option to satisfy the
above-mentioned withholding requirement; provided, however, no such agreement
may be made by an Optionee who is an officer or director within the meaning of
Section 16 of the Securities Exchange Act of 1934, as amended, except pursuant
to a standing election to so withhold Shares of Common Stock purchased upon
exercise of the Option, such election to be made in the form set forth in
Exhibit 2 hereto and to be made not less than six (6) months prior to such
exercise. Such election may be revoked only upon providing six (6) months prior
written notice to the Company.
12. Plan Provisions Control.
-----------------------
In the event of any inconsistency between the provisions of this Agreement and
the provisions of the Plan, the inconsistent provision(s) of this Agreement
shall be superseded by the Plan provision(s) to the extent necessary to
reconcile the inconsistency.
-4-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed, and
the Optionee has hereunto set his or her hand, all as of the 28th day of May,
1998.
LIFE MEDICAL SCIENCES, INC.
By:
--------------------------------------
OPTIONEE
Print Name: Irwin Rosenthal
-------------------------------
Sign Name: /s/ Irwin M. Rosenthal
-------------------------------
OPTION INFORMATION
------------------
Total Number of Shares Underlying Option: 100,000
Purchase Price Per Share: $2.00
VESTING & EXPIRATION SCHEDULE
-----------------------------
Vesting Date Number of Shares Expiration Date
- ------------ ---------------- ---------------
May 28, 1998 100,000 May 28, 2005
-5-
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
In connection with the exercise by me of an option to purchase shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company"), I
hereby acknowledge that I have been informed as follows:
1. The shares of Common Stock of the Company to be issued to me pursuant to
the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held indefinitely unless the Shares are subsequently registered under the
Securities Act, or an exemption from such registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
Securities Act can be made only after the holding period provided by that Rule
has been satisfied, and, in any sale to which that Rule is not applicable,
registration or compliance with some other exemption under the Securities Act
will be required.
3. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.
In consideration of the issuance of certificates for the Shares to me, I
hereby represent and warrant that I am acquiring the Shares for my own account
for investment, and that I will not sell, pledge or transfer the Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and warranty,
I agree that there may be affixed to the certificates for the Shares to be
issued to me, and to all certificates issued hereafter representing the Shares
(until in the opinion of counsel, which opinion must be reasonably satisfactory
in form and substance to counsel for the Company, it is no longer necessary or
required) a legend as follows:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and were acquired by the
registered holder pursuant to a representation and warranty that such
holder was acquiring the Shares for his own account and for investment,
with no intention of transfer or disposition of the same in violation of
the registration requirements of that Act. These securities may not be
sold, pledged, or transferred in the absence of an effective registration
statement under such Act, or an opinion of counsel, which opinion is
reasonably satisfactory to counsel to the Company, to the effect that
registration is not required under such Act."
-6-
<PAGE>
I further agree that the Company may place a stop transfer order with its
transfer agent, prohibiting the transfer of the Shares, so long as the legend
remains on the certificates representing the Shares.
Very truly yours,
/s/ Irwin M. Rosenthal
Dated: _____________
-7-
<PAGE>
EXHIBIT 2
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
The undersigned Optionee hereby elects and agrees that, whenever the
undersigned exercises a stock option (including any options which now or may
hereafter be granted), Life Medical Sciences, Inc. (the "Company") shall
withhold from that exercise such number of Shares equal in value to the federal
and state withholding taxes due upon such exercise. The undersigned further
acknowledges and agrees that this election may not be revoked without six (6)
months' prior written notice to the Company.
OPTIONEE:
/s/ Irwin M. Rosenthal
--------------------------------------------
(Signature)
Irwin M. Rosenthal
--------------------------------------------
(Print Name)
-8-
<PAGE>
Exhibit 10.82
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED 1992 STOCK OPTION PLAN
(non-qualified stock option)
AGREEMENT entered into as of the date set forth on the signature page hereto
by and between Life Medical Sciences, Inc., a Delaware corporation, with a
principal place of business at 379 Thornall Street, Edison, New Jersey (together
with its subsidiaries, if any, the "Company"), and the undersigned (the
"Optionee").
WHEREAS, the Company desires to grant to the Optionee a non-qualified stock
option under the Company's Amended and Restated 1992 Stock Option Plan (the
"Plan") to acquire shares of the Company's Common Stock, $.001 par value (the
"Shares"); and
WHEREAS, the Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option.
---------------
The Company hereby grants to the Optionee a non-qualified stock option under
the Plan (the "Option") to purchase all or any part of an aggregate of the
number of Shares set forth on the signature page to this Agreement on the terms
and conditions hereinafter set forth. The Option shall NOT be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
--------------
The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the dollar amount per share set forth on the signature page to this
Agreement.
3. Time of Vesting and Exercise of Option.
--------------------------------------
Subject to Section 4 hereof, the Option shall vest and become exercisable on
the dates and as to the installment amounts set forth on the signature page to
this Agreement. To the extent the Option (or any portion thereof) is not
exercised by the Optionee when it becomes exercisable, it shall not expire, but
shall be carried forward and shall be exercisable, on a cumulative basis, until
the Expiration Date (as hereinafter defined) or until earlier termination as
hereinafter provided.
<PAGE>
4. Term; Extent of Exercisability.
------------------------------
(a) Term.
(i) The Option shall expire as to each installment amount on the
date set forth next to each such amount on the signature page to this
Agreement (the "Expiration Date"), subject to earlier termination as
herein provided.
(ii) Except as otherwise provided in this Section 4, if the Optionee
ceases to perform services for the Company, the Option shall
terminate on the earlier of the last day of the third month or ninety
days after the date such Optionee ceases to perform services for the
Company, or on the date on which the Option expires by its terms,
whichever occurs first.
(iii) If such termination to perform services is because of dismissal
for cause or because the Optionee is in breach of any employment
agreement, such Option will terminate on the date the Optionee ceases
to perform services for the Company.
(iv) If such termination to perform services is because the Optionee
has become permanently disabled (within the meaning of Section
22(e)(3) of the Code), such Option shall terminate on the last day of
the twelfth month from the date such Optionee ceases to perform
services for the Company, or on the date on which the Option expires
by its terms, whichever occurs first.
(v) In the event of the death of the Optionee, the Option granted to
such Optionee shall terminate on the last day of the twelfth month
from the date of death, or on the date on which the Option expires by
its terms, whichever occurs first.
(b) Extent of Exercisability.
------------------------
(i) Except as provided below, if the Optionee ceases to perform
services for the Company, the Option shall be exercisable only to the
extent that the right to purchase Shares under such Option has
accrued and is in effect on the date such Optionee ceases to perform
services for the Company.
(ii) If the Optionee ceases to perform services for the Company
because he or she has become permanently disabled (within the meaning
of Section 22(e)(3) of the Code), the Option shall be exercisable to
the full number of Shares covered by such Option.
-2-
<PAGE>
(iii) In the event of the death of the Optionee, the Option may be
exercised with respect to the full number of Shares covered thereby
whether or not under the provisions of Section 3 hereof the Optionee
was entitled to do so at the date of his or her death, by the estate
of such Optionee, or by any person or persons who acquired the right
to exercise such Option by bequest or inheritance or by reason of the
death of such Optionee.
5. Manner of Exercise of Option.
----------------------------
(a) To the extent that the right to exercise the Option has accrued and is
in effect, the Option may be exercised in full or in part by giving written
notice to the Company stating the number of Shares as to which the Option
is being exercised and accompanied by payment in full for such Shares. No
partial exercise may be made for less than one hundred (100) full Shares of
Common Stock. Payment shall be made in accordance with the terms of the
Plan. Upon such exercise, delivery of a certificate for paid-up, non-
assessable Shares shall be made at the principal office of the Company to
the person exercising the Option, not less than thirty (30) and not more
than ninety (90) days from the date of receipt of the notice by the
Company.
(b) The Company shall at all times during the term of the Option reserve
and keep available such number of Shares of its Common Stock as will be
sufficient to satisfy the requirements of the Option.
6. Non-Transferability.
-------------------
The right of the Optionee to exercise the Option shall not be assignable or
transferable by the Optionee otherwise than by will or the laws or descent and
distribution or pursuant to a domestic relations order as defined in the Code or
Title 1 of the Employee Retirement Income Security Act or the rules thereunder,
and the Option may be exercised during the lifetime of the Optionee only by him
or her. The Option shall be null and void and without effect upon the bankruptcy
of the Optionee or upon any attempted assignment or transfer, except as herein
provided, including without limitation any purported assignment, whether
voluntary or by operation of law, pledge, hypothecation or other disposition
contrary to the provisions hereof, or levy of execution, attachment, trustee
process or similar process, whether legal or equitable, upon the Option.
7. Representation Letter and Investment Legend.
-------------------------------------------
In the event that for any reason the Shares to be issued upon exercise of the
Option shall not be effectively registered under the Securities Act of 1933 ("
1933 Act"), upon any date on which the Option is exercised in whole or in part,
the person exercising the Option shall give a written representation to the
Company in the form attached hereto as Exhibit 1 and the Company shall place an
"investment legend", so-called, as described in Exhibit 1, upon any certificate
for the Shares issued by reason of such exercise.
-3-
<PAGE>
8. Adjustments on Changes in Capitalization.
----------------------------------------
Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Option.
9. No Special Employment Rights.
----------------------------
The provisions of this Section 9 are applicable only to Optionee's who are
employees of the Company. Nothing contained in the Plan or this Option shall be
construed or deemed by any person under any circumstances to bind the Company to
continue the employment of the Optionee for the period within which this Option
may be exercised. However, during the period of the Optionee's employment, the
Optionee shall render diligently and faithfully the services which are assigned
to the Optionee from time to time by the Board of Directors or by the executive
officers of the Company and shall at no time take any action which directly or
indirectly would be inconsistent with the best interests of the Company.
10. Rights as a Stockholder.
-----------------------
The Optionee shall have no rights as a stockholder with respect to any Shares
which may be purchased by exercise of this Option unless and until a certificate
or certificates representing such Shares are duly issued and delivered to the
Optionee. Except as otherwise expressly provided in the Plan, no adjustment
shall be made for dividends or other rights for which the record date is prior
to the date such stock certificate is issued.
11. Withholding Taxes.
-----------------
Whenever Shares are to be issued upon exercise of this Option, the Company
shall have the right to require the Optionee to remit to the Company an amount
sufficient to satisfy all Federal, state and local withholding tax requirements
prior to the delivery of any certificate or certificates for the Shares. The
Company may agree to permit the Optionee to authorize the Company to withhold
Shares of Common Stock purchased upon exercise of the Option to satisfy the
above-mentioned withholding requirement; provided, however, no such agreement
may be made by an Optionee who is an officer or director within the meaning of
Section 16 of the Securities Exchange Act of 1934, as amended, except pursuant
to a standing election to so withhold Shares of Common Stock purchased upon
exercise of the Option, such election to be made in the form set forth in
Exhibit 2 hereto and to be made not less than six (6) months prior to such
exercise. Such election may be revoked only upon providing six (6) months prior
written notice to the Company.
12. Plan Provisions Control.
-----------------------
In the event of any inconsistency between the provisions of this Agreement and
the provisions of the Plan, the inconsistent provision(s) of this Agreement
shall be superseded by the Plan provision(s) to the extent necessary to
reconcile the inconsistency.
-4-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed, and
the Optionee has hereunto set his or her hand, all as of the 28th day of May,
1998 .
LIFE MEDICAL SCIENCES, INC.
By:
--------------------------------------
OPTIONEE
Print Name: Irwin Rosenthal
-------------------------------
Sign Name: /s/ Irwin M. Rosenthal
-------------------------------
OPTION INFORMATION
------------------
Total Number of Shares Underlying Option: 50,000
Purchase Price Per Share: $ 2.00
VESTING & EXPIRATION SCHEDULE
-----------------------------
Vesting Date Number of Shares Expiration Date
- ------------ ---------------- ---------------
March 21, 1995 50,000 March 21, 2000
This agreement supersedes the previous agreement dated March 21, 1995.
-5-
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
In connection with the exercise by me of an option to purchase shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company"), I
hereby acknowledge that I have been informed as follows:
1. The shares of Common Stock of the Company to be issued to me pursuant to
the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held indefinitely unless the Shares are subsequently registered under the
Securities Act, or an exemption from such registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
Securities Act can be made only after the holding period provided by that Rule
has been satisfied, and, in any sale to which that Rule is not applicable,
registration or compliance with some other exemption under the Securities Act
will be required.
3. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.
In consideration of the issuance of certificates for the Shares to me, I
hereby represent and warrant that I am acquiring the Shares for my own account
for investment, and that I will not sell, pledge or transfer the Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and warranty,
I agree that there may be affixed to the certificates for the Shares to be
issued to me, and to all certificates issued hereafter representing the Shares
(until in the opinion of counsel, which opinion must be reasonably satisfactory
in form and substance to counsel for the Company, it is no longer necessary or
required) a legend as follows:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and were acquired by the
registered holder pursuant to a representation and warranty that such
holder was acquiring the Shares for his own account and for investment,
with no intention of transfer or disposition of the same in violation of
the registration requirements of that Act. These securities may not be
sold, pledged, or transferred in the absence of an effective registration
statement under such Act, or an opinion of counsel, which opinion is
reasonably satisfactory to counsel to the Company, to the effect that
registration is not required under such Act."
-6-
<PAGE>
I further agree that the Company may place a stop transfer order with its
transfer agent, prohibiting the transfer of the Shares, so long as the legend
remains on the certificates representing the Shares.
Very truly yours,
/s/ Irwin M. Rosenthal
Dated: _____________
-7-
<PAGE>
EXHIBIT 2
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
The undersigned Optionee hereby elects and agrees that, whenever the
undersigned exercises a stock option (including any options which now or may
hereafter be granted), Life Medical Sciences, Inc. (the "Company") shall
withhold from that exercise such number of Shares equal in value to the federal
and state withholding taxes due upon such exercise. The undersigned further
acknowledges and agrees that this election may not be revoked without six (6)
months' prior written notice to the Company.
OPTIONEE:
/s/ Irwin M. Rosenthal
--------------------------------------------
(Signature)
Irwin M. Rosenthal
--------------------------------------------
(Print Name)
-8-
<PAGE>
EXHIBIT 10.83
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED 1992 STOCK OPTION PLAN
(non-qualified stock option)
AGREEMENT entered into as of the date set forth on the signature page hereto
by and between Life Medical Sciences, Inc., a Delaware corporation, with a
principal place of business at 379 Thornall Street, Edison, New Jersey (together
with its subsidiaries, if any, the "Company"), and the undersigned (the
"Optionee").
WHEREAS, the Company desires to grant to the Optionee a non-qualified stock
option under the Company's Amended and Restated 1992 Stock Option Plan (the
"Plan") to acquire shares of the Company's Common Stock, $.001 par value (the
"Shares"); and
WHEREAS, the Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option.
---------------
The Company hereby grants to the Optionee a non-qualified stock option under
the Plan (the "Option") to purchase all or any part of an aggregate of the
number of Shares set forth on the signature page to this Agreement on the terms
and conditions hereinafter set forth. The Option shall NOT be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
--------------
The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the dollar amount per share set forth on the signature page to this
Agreement.
3. Time of Vesting and Exercise of Option.
--------------------------------------
Subject to Section 4 hereof, the Option shall vest and become exercisable on
the dates and as to the installment amounts set forth on the signature page to
this Agreement. To the extent the Option (or any portion thereof) is not
exercised by the Optionee when it becomes exercisable, it shall not expire, but
shall be carried forward and shall be exercisable, on a cumulative basis, until
the Expiration Date (as hereinafter defined) or until earlier termination as
hereinafter provided.
-1-
<PAGE>
4. Term; Extent of Exercisability.
------------------------------
(a) Term.
(i) The Option shall expire as to each installment amount on the
date set forth next to each such amount on the signature page to this
Agreement (the "Expiration Date"), subject to earlier termination as
herein provided.
(ii) Except as otherwise provided in this Section 4, if the
Optionee ceases to perform services for the Company, the Option shall
terminate on the earlier of the last day of the third month or ninety
days after the date such Optionee ceases to perform services for the
Company, or on the date on which the Option expires by its terms,
whichever occurs first.
(iii) If such termination to perform services is because of
dismissal for cause or because the Optionee is in breach of any
employment agreement, such Option will terminate on the date the
Optionee ceases to perform services for the Company.
(iv) If such termination to perform services is because the
Optionee has become permanently disabled (within the meaning of
Section 22(e)(3) of the Code), such Option shall terminate on the last
day of the twelfth month from the date such Optionee ceases to perform
services for the Company, or on the date on which the Option expires
by its terms, whichever occurs first.
(v) In the event of the death of the Optionee, the Option granted
to such Optionee shall terminate on the last day of the twelfth month
from the date of death, or on the date on which the Option expires by
its terms, whichever occurs first.
(b) Extent of Exercisability.
------------------------
(i) Except as provided below, if the Optionee ceases to perform
services for the Company, the Option shall be exercisable only to the
extent that the right to purchase Shares under such Option has accrued
and is in effect on the date such Optionee ceases to perform services
for the Company.
(ii) If the Optionee ceases to perform services for the Company
because he or she has become permanently disabled (within the meaning
of Section 22(e)(3) of the Code), the Option shall be exercisable to
the full number of Shares covered by such Option.
-2-
<PAGE>
(iii) In the event of the death of the Optionee, the Option may be
exercised with respect to the full number of Shares covered thereby
whether or not under the provisions of Section 3 hereof the Optionee
was entitled to do so at the date of his or her death, by the estate
of such Optionee, or by any person or persons who acquired the right
to exercise such Option by bequest or inheritance or by reason of the
death of such Optionee.
5. Manner of Exercise of Option.
----------------------------
(a) To the extent that the right to exercise the Option has accrued and is in
effect, the Option may be exercised in full or in part by giving written
notice to the Company stating the number of Shares as to which the Option is
being exercised and accompanied by payment in full for such Shares. No partial
exercise may be made for less than one hundred (100) full Shares of Common
Stock. Payment shall be made in accordance with the terms of the Plan. Upon
such exercise, delivery of a certificate for paid-up, non-assessable Shares
shall be made at the principal office of the Company to the person exercising
the Option, not less than thirty (30) and not more than ninety (90) days from
the date of receipt of the notice by the Company.
(b) The Company shall at all times during the term of the Option reserve and
keep available such number of Shares of its Common Stock as will be sufficient
to satisfy the requirements of the Option.
6. Non-Transferability.
-------------------
The right of the Optionee to exercise the Option shall not be assignable
or transferable by the Optionee otherwise than by will or the laws or descent
and distribution or pursuant to a domestic relations order as defined in the
Code or Title 1 of the Employee Retirement Income Security Act or the rules
thereunder, and the Option may be exercised during the lifetime of the Optionee
only by him or her. The Option shall be null and void and without effect upon
the bankruptcy of the Optionee or upon any attempted assignment or transfer,
except as herein provided, including without limitation any purported
assignment, whether voluntary or by operation of law, pledge, hypothecation or
other disposition contrary to the provisions hereof, or levy of execution,
attachment, trustee process or similar process, whether legal or equitable, upon
the Option.
7. Representation Letter and Investment Legend.
-------------------------------------------
In the event that for any reason the Shares to be issued upon exercise of
the Option shall not be effectively registered under the Securities Act of 1933
(" 1933 Act"), upon any date on which the Option is exercised in whole or in
part, the person exercising the Option shall give a written representation to
the Company in the form attached hereto as Exhibit 1 and the Company shall place
an "investment legend", so-called, as described in Exhibit 1, upon any
certificate for the Shares issued by reason of such exercise.
-3-
<PAGE>
8. Adjustments on Changes in Capitalization.
----------------------------------------
Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Option.
9. No Special Employment Rights.
----------------------------
The provisions of this Section 9 are applicable only to Optionee's who are
employees of the Company. Nothing contained in the Plan or this Option shall be
construed or deemed by any person under any circumstances to bind the Company to
continue the employment of the Optionee for the period within which this Option
may be exercised. However, during the period of the Optionee's employment, the
Optionee shall render diligently and faithfully the services which are assigned
to the Optionee from time to time by the Board of Directors or by the executive
officers of the Company and shall at no time take any action which directly or
indirectly would be inconsistent with the best interests of the Company.
10. Rights as a Stockholder.
-----------------------
The Optionee shall have no rights as a stockholder with respect to any
Shares which may be purchased by exercise of this Option unless and until a
certificate or certificates representing such Shares are duly issued and
delivered to the Optionee. Except as otherwise expressly provided in the Plan,
no adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.
11. Withholding Taxes.
-----------------
Whenever Shares are to be issued upon exercise of this Option, the
Company shall have the right to require the Optionee to remit to the Company an
amount sufficient to satisfy all Federal, state and local withholding tax
requirements prior to the delivery of any certificate or certificates for the
Shares. The Company may agree to permit the Optionee to authorize the Company to
withhold Shares of Common Stock purchased upon exercise of the Option to satisfy
the above-mentioned withholding requirement; provided, however, no such
agreement may be made by an Optionee who is an officer or director within the
meaning of Section 16 of the Securities Exchange Act of 1934, as amended, except
pursuant to a standing election to so withhold Shares of Common Stock purchased
upon exercise of the Option, such election to be made in the form set forth in
Exhibit 2 hereto and to be made not less than six (6) months prior to such
exercise. Such election may be revoked only upon providing six (6) months prior
written notice to the Company.
12. Plan Provisions Control.
-----------------------
In the event of any inconsistency between the provisions of this
Agreement and the provisions of the Plan, the inconsistent provision(s) of this
Agreement shall be superseded by the Plan provision(s) to the extent necessary
to reconcile the inconsistency.
-4-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed, and
the Optionee has hereunto set his or her hand, all as of the 28th day of May,
1998.
LIFE MEDICAL SCIENCES, INC.
By:
---------------------------------------
OPTIONEE :
Print Name: Eli Pines, Ph.D.
------------------------------
Sign Name: /s/ Eli Pines 7/20/98
--------------------------------
OPTION INFORMATION
------------------
Total Number of Shares Underlying Option: 46,125
Purchase Price Per Share: $ 2.00
VESTING & EXPIRATION SCHEDULE
-----------------------------
Vesting Date Number of Shares Expiration Date
- --------------- ---------------- ---------------
June 17, 1997 23,062 June 17, 2002
June 17, 1998 23,063 June 17, 2003
This agreement supercedes the previous agreement dated June 17, 1997.
-5-
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
In connection with the exercise by me of an option to purchase shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company"), I
hereby acknowledge that I have been informed as follows:
1. The shares of Common Stock of the Company to be issued to me pursuant to
the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held indefinitely unless the Shares are subsequently registered under the
Securities Act, or an exemption from such registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
Securities Act can be made only after the holding period provided by that Rule
has been satisfied, and, in any sale to which that Rule is not applicable,
registration or compliance with some other exemption under the Securities Act
will be required.
3. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.
In consideration of the issuance of certificates for the Shares to me, I
hereby represent and warrant that I am acquiring the Shares for my own account
for investment, and that I will not sell, pledge or transfer the Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and warranty,
I agree that there may be affixed to the certificates for the Shares to be
issued to me, and to all certificates issued hereafter representing the Shares
(until in the opinion of counsel, which opinion must be reasonably satisfactory
in form and substance to counsel for the Company, it is no longer necessary or
required) a legend as follows:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and were acquired
by the registered holder pursuant to a representation and warranty that
such holder was acquiring the Shares for his own account and for
investment, with no intention of transfer or disposition of the same in
violation of the registration requirements of that Act. These securities
may not be sold, pledged, or transferred in the absence of an effective
registration statement under such Act, or an opinion of counsel, which
opinion is reasonably satisfactory to counsel to the Company, to the effect
that registration is not required under such Act."
-6-
<PAGE>
I further agree that the Company may place a stop transfer order with its
transfer agent, prohibiting the transfer of the Shares, so long as the legend
remains on the certificates representing the Shares.
Very truly yours,
/s/ Eli Pines
Dated: 7/30/98
-------
-7-
<PAGE>
EXHIBIT 2
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
The undersigned Optionee hereby elects and agrees that, whenever the
undersigned exercises a stock option (including any options which now or may
hereafter be granted), Life Medical Sciences, Inc. (the "Company") shall
withhold from that exercise such number of Shares equal in value to the federal
and state withholding taxes due upon such exercise. The undersigned further
acknowledges and agrees that this election may not be revoked without six (6)
months' prior written notice to the Company.
OPTIONEE:
-----------------------------------------------
(Signature)
------------------------------------------------
(Print Name)
-8-
<PAGE>
EXHIBIT 10.84
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED 1992 STOCK OPTION PLAN
(incentive stock option)
AGREEMENT entered into as of the date set forth on the signature page
hereto by and between Life Medical Sciences, Inc., a Delaware corporation, with
a principal place of business at 379 Thornall Street, Edison, New Jersey
(together with its subsidiaries, if any, the "Company"), and the undersigned
(the "Optionee").
WHEREAS, the Company desires to grant to the Optionee an incentive stock
option under the Company's Amended and Restated 1992 Stock Option Plan (the
"Plan") to acquire shares of the Company's Common Stock, $.001 par value (the
"Shares"); and
WHEREAS, the Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option.
---------------
The Company hereby grants to the Optionee an incentive stock option under
the Plan (the "Option") to purchase all or any part of an aggregate of the
number of Shares set forth on the signature page to this Agreement on the terms
and conditions hereinafter set forth. The Option shall be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
--------------
The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the dollar amount per share set forth on the signature page to this
Agreement.
3. Time of Vesting and Exercise of Option.
--------------------------------------
Subject to Section 4 hereof, the Option shall vest and become
exercisable on the dates and as to the installment amounts set forth on the
signature page to this Agreement. To the extent the Option (or any portion
thereof) is not exercised by the Optionee when it becomes exercisable, it shall
not expire, but shall be carried forward and shall be exercisable, on a
cumulative basis, until the Expiration Date (as hereinafter defined) or until
earlier termination as hereinafter provided.
<PAGE>
4. Term; Extent of Exercisability.
------------------------------
(a) Term.
(i) The Option shall expire as to each installment amount on the
date set forth next to each such amount on the signature page to
this Agreement (the "Expiration Date"), subject to earlier
termination as herein provided.
(ii) Except as otherwise provided in this Section 4, if the
Optionee ceases to perform services for the Company, the Option
shall terminate on the earlier of the last day of the third month
or ninety days after the date such Optionee ceases to perform
services for the Company, or on the date on which the Option
expires by its terms, whichever occurs first.
(iii) If the Optionee ceases to perform services for the Company
because of dismissal for cause or because the Optionee is in
breach of any employment agreement, such Option will terminate on
the date the Optionee ceases to perform services for the Company.
(iv) If the Optionee ceases to perform services for the Company
because the Optionee has become permanently disabled (within the
meaning of Section 22(e)(3) of the Code), such Option shall
terminate on the last day of the twelfth month from the date such
Optionee ceases to perform services for the Company, or on the
date on which the Option expires by its terms, whichever occurs
first.
(v) In the event of the death of the Optionee, the Option granted
to such Optionee shall terminate on the last day of the twelfth
month from the date of death, or on the date on which the Option
expires by its terms, whichever occurs first.
(b) Extent of Exercisability.
------------------------
(i) Except as provided below, if the Optionee ceases to perform
services for the Company, the Option shall be exercisable only to
the extent that the right to purchase Shares under such Option
has accrued and is in effect on the date such Optionee ceases to
perform services for the Company.
(ii) If the Optionee ceases to perform services for the Company
because he or she has become permanently disabled (within the
meaning of Section 22(e)(3) of the Code), the Option shall be
exercisable to the full number of Shares covered by such Option.
-2-
<PAGE>
(iii) In the event of the death of the Optionee, the Option may
be exercised with respect to the full number of Shares covered
thereby whether or not under the provisions of Section 3 hereof
the Optionee was entitled to do so at the date of his or her
death, by the estate of such Optionee, or by any person or
persons who acquired the right to exercise such Option by bequest
or inheritance or by reason of the death of such Optionee.
5. Manner of Exercise of Option.
----------------------------
(a) To the extent that the right to exercise the Option has accrued
and is in effect, the Option may be exercised in full or in part by
giving written notice to the Company stating the number of Shares as
to which the Option is being exercised and accompanied by payment in
full for such Shares. No partial exercise may be made for less than
one hundred (100) full Shares of Common Stock. Payment shall be made
in accordance with the terms of the Plan. Upon such exercise, delivery
of a certificate for paid-up, non-assessable Shares shall be made at
the principal office of the Company to the person exercising the
Option, not less than thirty (30) and not more than ninety (90) days
from the date of receipt of the notice by the Company.
(b) The Company shall at all times during the term of the Option
reserve and keep available such number of Shares of its Common Stock
as will be sufficient to satisfy the requirements of the Option.
6. Non-Transferability.
-------------------
The right of the Optionee to exercise the Option shall not be
assignable or transferable by the Optionee otherwise than by will or the laws or
descent and distribution or pursuant to a domestic relations order as defined in
the Code or Title 1 of the Employee Retirement Income Security Act or the rules
thereunder, and the Option may be exercised during the lifetime of the Optionee
only by him or her. The Option shall be null and void and without effect upon
the bankruptcy of the Optionee or upon any attempted assignment or transfer,
except as herein provided, including without limitation any purported
assignment, whether voluntary or by operation of law, pledge, hypothecation or
other disposition contrary to the provisions hereof, or levy of execution,
attachment, trustee process or similar process, whether legal or equitable, upon
the Option.
7. Representation Letter and Investment Legend.
-------------------------------------------
In the event that for any reason the Shares to be issued upon exercise
of the Option shall not be effectively registered under the Securities Act of
1933 (" 1933 Act"), upon any date on which the Option is exercised in whole or
in part, the person exercising the Option shall give a written representation to
the Company in the form attached hereto as Exhibit 1 and the Company shall place
an "investment legend", so-called, as described in Exhibit 1, upon any
certificate for the Shares issued by reason of such exercise.
-3-
<PAGE>
8. Adjustments on Changes in Capitalization.
----------------------------------------
Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Option.
9. No Special Employment Rights.
----------------------------
Nothing contained in the Plan or this Option shall be construed or
deemed by any person under any circumstances to bind the Company to continue the
employment of the Optionee for the period within which this Option may be
exercised. However, during the period of the Optionee's employment, the Optionee
shall render diligently and faithfully the services which are assigned to the
Optionee from time to time by the Board of Directors or by the executive
officers of the Company and shall at no time take any action which directly or
indirectly would be inconsistent with the best interests of the Company.
10. Rights as a Stockholder.
-----------------------
The Optionee shall have no rights as a stockholder with respect to any
Shares which may be purchased by exercise of this Option unless and until a
certificate or certificates representing such Shares are duly issued and
delivered to the Optionee. Except as otherwise expressly provided in the Plan,
no adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.
11. Withholding Taxes.
-----------------
Whenever Shares are to be issued upon exercise of this Option, the
Company shall have the right to require the Optionee to remit to the Company an
amount sufficient to satisfy all Federal, state and local withholding tax
requirements prior to the delivery of any certificate or certificates for the
Shares. The Company may agree to permit the Optionee to authorize the Company to
withhold Shares of Common Stock purchased upon exercise of the Option to satisfy
the above-mentioned withholding requirement; provided, however, no such
agreement may be made by an Optionee who is an officer or director within the
meaning of Section 16 of the Securities Exchange Act of 1934, as amended, except
pursuant to a standing election to so withhold Shares of Common Stock purchased
upon exercise of the Option, such election to be made in the form set forth in
Exhibit 2 hereto and to be made not less than six (6) months prior to such
exercise. Such election may be revoked only upon providing six (6) months prior
written notice to the Company.
12. Plan Provisions Control.
-----------------------
In the event of any inconsistency between the provisions of this
Agreement and the provisions of the Plan, the inconsistent provision(s) of this
Agreement shall be superseded by the Plan provision(s) to the extent necessary
to reconcile the inconsistency.
-4-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed,
and the Optionee has hereunto set his or her hand, all as of the 28th day of
May, 1998.
LIFE MEDICAL SCIENCES, INC.
By:
----------------------------------------
OPTIONEE:
Print Name: Eli Pines
--------------------------------
Signature:/s/ Eli Pine 7/20/98
---------------------------------
OPTION INFORMATION
------------------
Total Number of Shares Underlying Option: 60,000
Purchase Price Per Share: $2.00
VESTING & EXPIRATION SCHEDULE
-----------------------------
Vesting Date Number of Shares Expiration Date
------------ ---------------- ---------------
June 12, 1995 20,000 June 12, 2000
June 12, 1996 20,000 June 12, 2001
June 12, 1997 20,000 June 12, 2002
This agreement supercedes the previous agreement dated June 12, 1995
-5-
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
In connection with the exercise by me of an option to purchase shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company"), I
hereby acknowledge that I have been informed as follows:
1. The shares of Common Stock of the Company to be issued to me pursuant
to the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held indefinitely unless the Shares are subsequently registered under the
Securities Act, or an exemption from such registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
Securities Act can be made only after the holding period provided by that Rule
has been satisfied, and, in any sale to which that Rule is not applicable,
registration or compliance with some other exemption under the Securities Act
will be required.
3. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.
In consideration of the issuance of certificates for the Shares to me, I
hereby represent and warrant that I am acquiring the Shares for my own account
for investment, and that I will not sell, pledge or transfer the Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and warranty,
I agree that there may be affixed to the certificates for the Shares to be
issued to me, and to all certificates issued hereafter representing the Shares
(until in the opinion of counsel, which opinion must be reasonably satisfactory
in form and substance to counsel for the Company, it is no longer necessary or
required) a legend as follows:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and were acquired by the
registered holder pursuant to a representation and warranty that such holder was
acquiring the Shares for his own account and for investment, with no intention
of transfer or disposition of the same in violation of the registration
requirements of that Act. These securities may not be sold, pledged, or
transferred in the absence of an effective registration statement under such
Act, or an opinion of counsel, which opinion is reasonably satisfactory to
counsel to the Company, to the effect that registration is not required under
such Act."
I further agree that the Company may place a stop transfer order with its
transfer agent,
-6-
<PAGE>
prohibiting the transfer of the Shares, so long as the legend remains on the
certificates representing the Shares.
Very truly yours,
/s/ Eli Pine
Dated: 7/30/98
--------
-7-
<PAGE>
EXHIBIT 2
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
The undersigned Optionee hereby elects and agrees that, whenever the
undersigned exercises a stock option (including any options which now or may
hereafter be granted), Life Medical Sciences, Inc. (the "Company") shall
withhold from that exercise such number of Shares equal in value to the federal
and state withholding taxes due upon such exercise. The undersigned further
acknowledges and agrees that this election may not be revoked without six (6)
months' prior written notice to the Company.
OPTIONEE:
------------------------------
(Signature)
------------------------------
(Print Name)
-8-
<PAGE>
EXHIBIT 10.85
LIFE MEDICAL SCIENCES, INC.
STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED 1992 STOCK OPTION PLAN
(non-qualified stock option)
AGREEMENT entered into as of the date set forth on the signature page hereto
by and between Life Medical Sciences, Inc., a Delaware corporation, with a
principal place of business at 379 Thornall Street, Edison, New Jersey (together
with its subsidiaries, if any, the "Company"), and the undersigned (the
"Optionee").
WHEREAS, the Company desires to grant to the Optionee a non-qualified stock
option under the Company's Amended and Restated 1992 Stock Option Plan (the
"Plan") to acquire shares of the Company's Common Stock, $.001 par value (the
"Shares"); and
WHEREAS, the Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Optionee hereby agree as
follows:
1. Grant of Option.
---------------
The Company hereby grants to the Optionee a non-qualified stock option under
the Plan (the "Option") to purchase all or any part of an aggregate of the
number of Shares set forth on the signature page to this Agreement on the terms
and conditions hereinafter set forth. The Option shall NOT be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price.
--------------
The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the dollar amount per share set forth on the signature page to this
Agreement.
3. Time of Vesting and Exercise of Option.
--------------------------------------
Subject to Section 4 hereof, the Option shall vest and become exercisable
on the dates and as to the installment amounts set forth on the signature page
to this Agreement. To the extent the Option (or any portion thereof) is not
exercised by the Optionee when it becomes exercisable, it shall not expire, but
shall be carried forward and shall be exercisable, on a cumulative basis, until
the Expiration Date (as hereinafter defined) or until earlier termination as
hereinafter provided.
-1-
<PAGE>
4. Term; Extent of Exercisability.
------------------------------
(a) Term.
(i) The Option shall expire as to each installment amount on the
date set forth next to each such amount on the signature page to this
Agreement (the "Expiration Date"), subject to earlier termination as
herein provided.
(ii) Except as otherwise provided in this Section 4, if the
Optionee ceases to perform services for the Company, the Option shall
terminate on the earlier of the last day of the third month or ninety
days after the date such Optionee ceases to perform services for the
Company, or on the date on which the Option expires by its terms,
whichever occurs first.
(iii) If such termination to perform services is because of
dismissal for cause or because the Optionee is in breach of any
employment agreement, such Option will terminate on the date the
Optionee ceases to perform services for the Company.
(iv) If such termination to perform services is because the
Optionee has become permanently disabled (within the meaning of
Section 22(e)(3) of the Code), such Option shall terminate on the last
day of the twelfth month from the date such Optionee ceases to perform
services for the Company, or on the date on which the Option expires
by its terms, whichever occurs first.
(v) In the event of the death of the Optionee, the Option granted
to such Optionee shall terminate on the last day of the twelfth month
from the date of death, or on the date on which the Option expires by
its terms, whichever occurs first.
(b) Extent of Exercisability.
------------------------
(i) Except as provided below, if the Optionee ceases to perform
services for the Company, the Option shall be exercisable only to the
extent that the right to purchase Shares under such Option has accrued
and is in effect on the date such Optionee ceases to perform services
for the Company.
(ii) If the Optionee ceases to perform services for the Company
because he or she has become permanently disabled (within the meaning
of Section 22(e)(3) of the Code), the Option shall be exercisable to
the full number of Shares covered by such Option.
-2-
<PAGE>
(iii) In the event of the death of the Optionee, the Option may be
exercised with respect to the full number of Shares covered thereby
whether or not under the provisions of Section 3 hereof the Optionee
was entitled to do so at the date of his or her death, by the estate
of such Optionee, or by any person or persons who acquired the right
to exercise such Option by bequest or inheritance or by reason of the
death of such Optionee.
5. Manner of Exercise of Option.
----------------------------
(a) To the extent that the right to exercise the Option has accrued and is
in effect, the Option may be exercised in full or in part by giving
written notice to the Company stating the number of Shares as to which the
Option is being exercised and accompanied by payment in full for such
Shares. No partial exercise may be made for less than one hundred (100)
full Shares of Common Stock. Payment shall be made in accordance with the
terms of the Plan. Upon such exercise, delivery of a certificate for paid-
up, non-assessable Shares shall be made at the principal office of the
Company to the person exercising the Option, not less than thirty (30) and
not more than ninety (90) days from the date of receipt of the notice by
the Company.
(b) The Company shall at all times during the term of the Option reserve
and keep available such number of Shares of its Common Stock as will be
sufficient to satisfy the requirements of the Option.
6. Non-Transferability.
-------------------
The right of the Optionee to exercise the Option shall not be assignable
or transferable by the Optionee otherwise than by will or the laws or descent
and distribution or pursuant to a domestic relations order as defined in the
Code or Title 1 of the Employee Retirement Income Security Act or the rules
thereunder, and the Option may be exercised during the lifetime of the Optionee
only by him or her. The Option shall be null and void and without effect upon
the bankruptcy of the Optionee or upon any attempted assignment or transfer,
except as herein provided, including without limitation any purported
assignment, whether voluntary or by operation of law, pledge, hypothecation or
other disposition contrary to the provisions hereof, or levy of execution,
attachment, trustee process or similar process, whether legal or equitable, upon
the Option.
7. Representation Letter and Investment Legend.
-------------------------------------------
In the event that for any reason the Shares to be issued upon exercise of
the Option shall not be effectively registered under the Securities Act of 1933
(" 1933 Act"), upon any date on which the Option is exercised in whole or in
part, the person exercising the Option shall give a written representation to
the Company in the form attached hereto as Exhibit 1 and the Company shall place
an "investment legend", so-called, as described in Exhibit 1, upon any
certificate for the Shares issued by reason of such exercise.
-3-
<PAGE>
8. Adjustments on Changes in Capitalization.
----------------------------------------
Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Option.
9. No Special Employment Rights.
----------------------------
The provisions of this Section 9 are applicable only to Optionee's who are
employees of the Company. Nothing contained in the Plan or this Option shall be
construed or deemed by any person under any circumstances to bind the Company to
continue the employment of the Optionee for the period within which this Option
may be exercised. However, during the period of the Optionee's employment, the
Optionee shall render diligently and faithfully the services which are assigned
to the Optionee from time to time by the Board of Directors or by the executive
officers of the Company and shall at no time take any action which directly or
indirectly would be inconsistent with the best interests of the Company.
10. Rights as a Stockholder.
-----------------------
The Optionee shall have no rights as a stockholder with respect to any
Shares which may be purchased by exercise of this Option unless and until a
certificate or certificates representing such Shares are duly issued and
delivered to the Optionee. Except as otherwise expressly provided in the Plan,
no adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.
11. Withholding Taxes.
-----------------
Whenever Shares are to be issued upon exercise of this Option, the
Company shall have the right to require the Optionee to remit to the Company an
amount sufficient to satisfy all Federal, state and local withholding tax
requirements prior to the delivery of any certificate or certificates for the
Shares. The Company may agree to permit the Optionee to authorize the Company to
withhold Shares of Common Stock purchased upon exercise of the Option to satisfy
the above-mentioned withholding requirement; provided, however, no such
agreement may be made by an Optionee who is an officer or director within the
meaning of Section 16 of the Securities Exchange Act of 1934, as amended, except
pursuant to a standing election to so withhold Shares of Common Stock purchased
upon exercise of the Option, such election to be made in the form set forth in
Exhibit 2 hereto and to be made not less than six (6) months prior to such
exercise. Such election may be revoked only upon providing six (6) months prior
written notice to the Company.
12. Plan Provisions Control.
-----------------------
In the event of any inconsistency between the provisions of this
Agreement and the provisions of the Plan, the inconsistent provision(s) of this
Agreement shall be superseded by the Plan provision(s) to the extent necessary
to reconcile the inconsistency.
-4-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed, and
the Optionee has hereunto set his or her hand, all as of the 28th day of May,
1998.
LIFE MEDICAL SCIENCES, INC.
By:
-----------------------------------
OPTIONEE :
Print Name: Eli Pines, Ph.D.
---------------------------
Sign Name:/s/ Eli Pines 7/20/98
----------------------------
OPTION INFORMATION
------------------
Total Number of Shares Underlying Option: 30,000
Purchase Price Per Share: $ 1.31
VESTING & EXPIRATION SCHEDULE
-----------------------------
Vesting Date Number of Shares Expiration Date
- -------------- ---------------- ---------------
May 28, 1998 15,000 May 28, 2005
May 28, 1999 15,000 May 28, 2007
-5-
<PAGE>
EXHIBIT 1
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
In connection with the exercise by me of an option to purchase shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company"), I
hereby acknowledge that I have been informed as follows:
1. The shares of Common Stock of the Company to be issued to me pursuant to
the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held indefinitely unless the Shares are subsequently registered under the
Securities Act, or an exemption from such registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
Securities Act can be made only after the holding period provided by that Rule
has been satisfied, and, in any sale to which that Rule is not applicable,
registration or compliance with some other exemption under the Securities Act
will be required.
3. The availability of Rule 144 is dependent upon adequate current public
information with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.
In consideration of the issuance of certificates for the Shares to me, I
hereby represent and warrant that I am acquiring the Shares for my own account
for investment, and that I will not sell, pledge or transfer the Shares in the
absence of an effective registration statement covering the same, except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and warranty,
I agree that there may be affixed to the certificates for the Shares to be
issued to me, and to all certificates issued hereafter representing the Shares
(until in the opinion of counsel, which opinion must be reasonably satisfactory
in form and substance to counsel for the Company, it is no longer necessary or
required) a legend as follows:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and were acquired
by the registered holder pursuant to a representation and warranty that
such holder was acquiring the Shares for his own account and for
investment, with no intention of transfer or disposition of the same in
violation of the registration requirements of that Act. These securities
may not be sold, pledged, or transferred in the absence of an effective
registration statement under such Act, or an opinion of counsel, which
opinion is reasonably satisfactory to counsel to the Company, to the effect
that registration is not required under such Act."
-6-
<PAGE>
I further agree that the Company may place a stop transfer order with its
transfer agent, prohibiting the transfer of the Shares, so long as the legend
remains on the certificates representing the Shares.
Very truly yours,
/s/ Eli Pine
Dated: 7/20/98
--------
-7-
<PAGE>
EXHIBIT 2
TO STOCK OPTION AGREEMENT
-------------------------
Gentlemen:
The undersigned Optionee hereby elects and agrees that, whenever the
undersigned exercises a stock option (including any options which now or may
hereafter be granted), Life Medical Sciences, Inc. (the "Company") shall
withhold from that exercise such number of Shares equal in value to the federal
and state withholding taxes due upon such exercise. The undersigned further
acknowledges and agrees that this election may not be revoked without six (6)
months' prior written notice to the Company.
OPTIONEE:
----------------------------------------------
(Signature)
----------------------------------------------
(Print Name)
-8-
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statements on Forms S-8 (Registration Nos. 33-60580 and 333-03895) and Form S-3
(Registration No. 333-19195) of our report dated March 2, 1999 on the financial
statements included in the 1998 annual report on Form 10-K of Life Medical
Sciences, Inc.
Richard A. Eisner & Company, LLP
New York, New York
March 25, 1999
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-K
FOR PERIOD ENDED 12/31/98 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 485
<SECURITIES> 0
<RECEIVABLES> 150
<ALLOWANCES> 30
<INVENTORY> 264
<CURRENT-ASSETS> 902
<PP&E> 176
<DEPRECIATION> 91
<TOTAL-ASSETS> 1034
<CURRENT-LIABILITIES> 1908
<BONDS> 0
0
0
<COMMON> 8
<OTHER-SE> (1286)
<TOTAL-LIABILITY-AND-EQUITY> 1034
<SALES> 1715
<TOTAL-REVENUES> 1770
<CGS> 820
<TOTAL-COSTS> 820
<OTHER-EXPENSES> 8708
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (5)
<INCOME-PRETAX> (7602)
<INCOME-TAX> 0
<INCOME-CONTINUING> (7602)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7602)
<EPS-PRIMARY> (0.96)
<EPS-DILUTED> (0.96)
</TABLE>
