EXHIBIT 10.34
COLLATERAL THERAPEUTICS, INC.
RESTRICTED STOCK ISSUANCE AGREEMENT
AGREEMENT made as of this day of , 199__, by and among Collateral
Therapeutics, Inc., a California corporation (the "Corporation"), , a
participant ("Participant") in the Corporation's 1995 Stock Option/Stock
Issuance Plan (the "Plan") and , the Participant's spouse.
I. PURCHASE OF SHARES
1.1 Purchase. The Participant hereby purchases, and the Corporation
hereby sells to Participant, __________ shares (the "Shares") of the
Corporation's common stock ("Common Stock") at a purchase price of $_________
per share (the "Purchase Price") pursuant to the provisions of the Plan, with a
vesting start date of __________________ ___, 199__ (the "Vesting Start Date").
1.2 Payment. Concurrently with the execution of this Agreement, the
Participant shall deliver to the Corporate Secretary of the Corporation (i) the
aggregate Purchase Price payable for the Shares in cash or cash equivalent and
(ii) a duly-executed blank Assignment Separate from Certificate (in the form
attached hereto as Exhibit A).
1.3 Delivery of Certificates. The certificates representing the
Shares hereunder shall be held in escrow by the Secretary of the Corporation as
provided in Article VII hereof.
1.4 Shareholder Rights. Until such time as the Corporation actually
exercises its repurchase right, rights of first refusal or special purchase
right under this Agreement, Participant (or any successor in interest) shall
have all the rights of a shareholder (including voting and dividend rights) with
respect to the Shares, including the Shares held in escrow under Article VII,
subject, however, to the transfer restrictions of Article IV.
II. SECURITIES LAW COMPLIANCE
2.1 Purchase Entirely for Own Account. This Agreement is made with
Participant in reliance upon Participant's representation to the Corporation,
which by Participant's execution of this Agreement Participant hereby confirms,
that the Shares are being acquired for investment for Participant's own account,
not as a nominee or agent, and not with a view to the resale or distribution of
any part thereof, and that Participant has no present intention of selling,
granting any participation in, or otherwise distributing the same. By executing
this Agreement, Participant further represents that Participant does not have
any
contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participations to such person or to any third person, with
respect to any of the Shares. Participant represents that he has full power and
authority to enter into this Agreement.
2.2 Exemption from Registration. The Shares have not been registered
under the Securities Act of 1933, as amended (the "1933 Act"), and are
accordingly being issued to Participant in reliance upon the exemption from such
registration provided by Rule 701 of the Securities and Exchange Commission for
stock issuances under compensatory benefit plans such as the Plan. Participant
hereby acknowledges receipt of a copy of the documentation for such Plan in the
form of Exhibit B attached hereto.
2.3 Restricted Securities.
A. Participant hereby confirms that Participant has been informed
that the Shares are restricted securities under the 1933 Act and may not be
resold or transferred unless the Shares are first registered under the Federal
securities laws or unless an exemption from such registration is available.
Accordingly, Participant hereby acknowledges that Participant is prepared to
hold the Shares for an indefinite period and that Participant is aware that Rule
144 of the Securities and Exchange Commission issued under the 1933 Act is not
presently available to exempt the sale of the Shares from the registration
requirements of the 1933 Act.
B. Upon the expiration of the ninety (90)-day period immediately
following the date on which the Corporation first becomes subject to the
reporting requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), the Shares, to the extent vested under Article V, may be sold
(without registration) pursuant to the applicable requirements of Rule 144. If
Participant is at the time of such sale an affiliate of the Corporation for
purposes of Rule 144 or was such an affiliate during the preceding three (3)
months, then the sale must comply with all the requirements of Rule 144
(including the volume limitation on the number of shares sold, the
broker/market-maker sale requirement and the requisite notice to the Securities
and Exchange Commission); however, the two-year holding period requirement of
the Rule will not be applicable. If Participant is not at the time of the sale
an affiliate of the Corporation nor was such an affiliate during the preceding
three (3) months, then none of the requirements of Rule 144 (other than the
broker/market-maker sale requirement for Shares held for less than three (3)
years following payment in cash of the Purchase Price therefor) will be
applicable to the sale.
C. Should the Corporation not become subject to the reporting
requirements of the Exchange Act, then Participant may, provided he/she is not
at the time an affiliate of the Corporation (nor was such an affiliate during
the preceding three (3) months), sell the Shares (without registration) pursuant
to paragraph (k) of Rule 144 after the Shares have been held for a period of
three (3) years following the payment in cash of the Purchase Price for such
shares.
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2.4 Disposition of Shares. Participant hereby agrees that
Participant shall make no disposition of the Shares (other than a permitted
transfer under paragraph 4.1) unless and until there is compliance with all of
the following requirements:
(a) Participant shall have notified the Corporation of the
proposed disposition and provided a written summary of the terms and
conditions of the proposed disposition.
(b) Participant shall have complied with all requirements of
this Agreement applicable to the disposition of the Shares.
(c) Participant shall have provided the Corporation with
written assurances, in form and substance satisfactory to the Corporation,
that (i) the proposed disposition does not require registration of the
Shares under the 1933 Act or (ii) all appropriate action necessary for
compliance with the registration requirements of the 1933 Act or of any
exemption from registration available under the 1933 Act (including Rule
144) has been taken.
(d) Participant shall have provided the Corporation with
written assurances, in form and substance satisfactory to the Corporation,
that the proposed disposition will not result in the contravention of any
transfer restrictions applicable to the Shares pursuant to the provisions
of the Commissioner Rules identified in paragraph 2.5.
The Corporation shall not be required (i) to transfer on its books
any Shares which have been sold or transferred in violation of the provisions of
this Article II nor (ii) to treat as the owner of the Shares, or otherwise to
accord voting or dividend rights to, any transferee to whom the Shares have been
transferred in contravention of this Agreement.
2.5 Restrictive Legends. In order to reflect the restrictions on
disposition of the Shares, the stock certificates for the Shares will be
endorsed with restrictive legends, including one or more of the following
legends:
(a) "The shares represented by this certificate have not been
registered under the Securities Act of 1933. The shares may not be sold or
offered for sale in the absence of (i) an effective registration statement
for the shares under such Act, (ii) a 'no action' letter of the Securities
and Exchange Commission with respect to such sale or offer, or (iii)
satisfactory assurances to the Corporation that registration under such
Act is not required with respect to such sale or offer."
(b) "The shares represented by this certificate are unvested
and accordingly may not be sold, assigned, transferred, encumbered,
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or in any manner disposed of except in conformity with the terms of a
written agreement dated _____________, 19__, between the Corporation and
the registered holder of the shares (or the predecessor in interest to the
shares). Such agreement grants certain repurchase rights and rights of
first refusal to the Corporation (or its assignees) upon the sale,
assignment, transfer, encumbrance or other disposition of the
Corporation's shares or upon termination of service with the Corporation.
The Corporation will upon written request furnish a copy of such agreement
to the holder hereof without charge."
III. SPECIAL TAX PROVISIONS
3.1 Section 83(b) Election. The Participant understands that under
Section 83 of the Code, the excess of the fair market value of the Shares on the
date any forfeiture restrictions applicable to such shares lapse over the
Purchase Price for such Shares will be reportable as ordinary income on such
lapse date. For this purpose, the term "forfeiture restrictions" includes the
right of the Corporation to repurchase the Shares pursuant to the Repurchase
Right provided under Article V of this Agreement. Participant understands that
he/she may elect under Section 83(b) of the Internal Revenue Code of 1986, as
amended (the "Code") to be taxed at the time the Shares are acquired hereunder,
rather than when and as such Shares cease to be subject to such forfeiture
restrictions. Such election must be filed with the Internal Revenue Service
within thirty (30) days after the date of this Agreement. Even if the fair
market value of the Shares on the date of this Agreement equals the Purchase
Price paid (and thus no tax is payable), the election must be made to avoid
adverse tax consequences in the future. The form for making this election is
attached as Exhibit C hereto. Participant understands that failure to make this
filing within the thirty (30)-day period will result in the recognition of
ordinary income by the Participant as the forfeiture restrictions lapse.
3.2 PARTICIPANT ACKNOWLEDGES THAT IT IS PARTICIPANT'S SOLE
RESPONSIBILITY, AND NOT THE CORPORATION'S, TO FILE A TIMELY ELECTION UNDER
SECTION 83(b), EVEN IF PARTICIPANT REQUESTS THE CORPORATION OR ITS
REPRESENTATIVES TO MAKE THIS FILING ON HIS/HER BEHALF. This filing should be
made by registered or certified mail, return receipt requested, and Participant
must retain two (2) copies of the completed form for filing with his/her State
and Federal tax returns for the current tax year and an additional copy for
his/her personal records.
IV. TRANSFER RESTRICTIONS
4.1 Restriction on Transfer. Participant shall not transfer, assign,
encumber or otherwise dispose of any of the Shares which are subject to the
Corporation's Repurchase Right under Article V. In addition, Shares which are
released from the Repurchase Right shall not be transferred, assigned,
encumbered or otherwise made the
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subject of disposition in contravention of the Corporation's First Refusal Right
under Article VI. Such restrictions on transfer, however, shall not be
applicable to (i) a gratuitous transfer of the Shares made to the Participant's
spouse or issue, including adopted children, or to a trust for the exclusive
benefit of the Participant or the Participant's spouse or issue, provided and
only if the Participant obtains the Corporation's prior written consent to such
transfer, (ii) a transfer of title to the Shares effected pursuant to the
Participant's will or the laws of intestate succession or (iii) a transfer to
the Corporation in pledge as security for any purchase-money indebtedness
incurred by the Participant in connection with the acquisition of the Shares.
4.2 Transferee Obligations. Each person (other than the Corporation)
to whom the Shares are transferred by means of one of the permitted transfers
specified in paragraph 4.1 must, as a condition precedent to the validity of
such transfer, acknowledge in writing to the Corporation that such person is
bound by the provisions of this Agreement and that the transferred shares are
subject to (i) both the Corporation's Repurchase Right and the Corporation's
First Refusal Right granted hereunder and (ii) the market stand-off provisions
of paragraph 4.4, to the same extent such Shares would be so subject if retained
by the Participant.
4.3 Definition of Owner. For purposes of Articles IV, V, VI and VII
of this Agreement, the term "Owner" shall include the Participant and all
subsequent holders of the Shares who derive their chain of ownership through a
permitted transfer from the Participant in accordance with paragraph 4.1.
4.4 Market Stand-Off Provisions.
A. In connection with any underwritten public offering by the
Corporation of its equity securities pursuant to an effective registration
statement filed under the 1933 Act, including the Corporation's initial public
offering, Owner shall not sell, make any short sale of, loan, hypothecate,
pledge, grant any option for the purchase of, or otherwise dispose or transfer
for value or otherwise agree to engage in any of the foregoing transactions with
respect to, any Shares without the prior written consent of the Corporation or
its underwriters. Such limitations shall be in effect for such period of time
from and after the effective date of such registration statement as may be
requested by the Corporation or such underwriters; provided, however, that in no
event shall such period exceed one hundred-eighty (180) days. The limitations of
this paragraph 4.4 shall remain in effect for the two-year period immediately
following the effective date of the Corporation's initial public offering and
shall thereafter terminate and cease to have any force or effect.
B. Owner shall be subject to the market stand-off provisions of this
paragraph 4.4 provided and only if the officers and directors of the Corporation
are also subject to similar arrangements.
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C. In the event of any stock dividend, stock split, recapitalization
or other change affecting the Corporation's outstanding Common Stock effected
without receipt of consideration, then any new, substituted or additional
securities distributed with respect to the Shares shall be immediately subject
to the provisions of this paragraph 4.4, to the same extent the Shares are at
such time covered by such provisions.
D. In order to enforce the limitations of this paragraph 4.4, the
Corporation may impose stop-transfer instructions with respect to the Shares
until the end of the applicable market stand-off period.
V. REPURCHASE RIGHT
5.1 Grant. The Corporation is hereby granted the right (the
"Repurchase Right"), exercisable at any time during the sixty (60)-day period
following the date the Participant ceases for any reason to remain in Service or
(if later) during the sixty (60)-day period following the execution date of this
Agreement, to repurchase at the Purchase Price all or (at the discretion of the
Corporation and with the consent of the Participant) any portion of the Shares
in which the Participant has not acquired a vested interest in accordance with
the vesting provisions of paragraph 5.3 below (such shares to be hereinafter
called the "Unvested Shares"). For purposes of this Agreement, the Participant
shall be deemed to remain in Service for so long as the Participant continues to
render periodic services to the Corporation or any parent or subsidiary
corporation, whether as an employee, a non-employee member of the board of
directors, or an independent contractor or consultant.
5.2 Exercise of the Repurchase Right. The Repurchase Right shall be
exercisable by written notice delivered to the Owner of the Unvested Shares
prior to the expiration of the applicable sixty (60)-day period specified in
paragraph 5.1. The notice shall indicate the number of Unvested Shares to be
repurchased and the date on which the repurchase is to be effected, such date to
be not more than thirty (30) days after the date of notice. To the extent one or
more certificates representing Unvested Shares may have been previously
delivered out of escrow to the Owner, then Owner shall, prior to the close of
business on the date specified for the repurchase, deliver to the Secretary of
the Corporation the certificates representing the Unvested Shares to be
repurchased, each certificate to be properly endorsed for transfer. The
Corporation shall, concurrently with the receipt of such stock certificates
(either from escrow in accordance with paragraph 7.3 or from Owner as herein
provided), pay to Owner in cash or cash equivalents (including the cancellation
of any purchase-money indebtedness), an amount equal to the Purchase Price
previously paid for the Unvested Shares which are to be repurchased.
5.3 Termination of the Repurchase Right. The Repurchase Right shall
terminate with respect to any Unvested Shares for which it is not timely
exercised under paragraph 5.2. In addition, the Repurchase Right shall
terminate, and cease to be exercisable, with respect to any and all Shares in
which the Participant vests in accordance with the
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schedule below. Accordingly, as the Participant continues in Service, the
Participant shall acquire a vested interest in, and the Repurchase Right shall
lapse with respect to, the Shares in installments in accordance with the
following provisions:
(a) The Participant shall not acquire any vested interest in,
nor shall the Repurchase Right lapse with respect to, any Shares unless
and until the Participant has completed twelve (12) months of Service
measured from the Vesting Start Date.
(b) Upon the completion of the twelve (12) month Service
period specified in subparagraph (a) above, the Participant shall acquire
a vested interest in, and the Repurchase Right shall lapse with respect
to, 25% of the Shares.
(c) The Participant shall acquire a vested interest in, and
the Repurchase Right shall lapse with respect to, the remaining Shares in
a series of successive equal monthly installments over each of the next
thirty-six (36) months of Service completed by the Participant after the
initial vesting date under subparagraph (b) above.
All Shares as to which the Repurchase Right lapses shall, however,
continue to be subject to (i) the First Refusal Right and (ii) the market
stand-off provisions of paragraph 4.4.
5.4 Fractional Shares. No fractional shares shall be repurchased by
the Corporation. Accordingly should the Repurchase Right extend to a fractional
share (in accordance with the vesting computation provisions of paragraph 5.3)
at the time the Participant ceases Service, then such fractional share shall be
added to any fractional share in which the Participant is at such time vested in
order to make one whole vested share no longer subject to the Repurchase Right.
5.5 Additional Shares or Substituted Securities. In the event of any
stock dividend, stock split, recapitalization or other change affecting the
Corporation's outstanding Common Stock as a class effected without receipt of
consideration, then any new, substituted or additional securities or other
property (including money paid other than as a regular cash dividend) which is
by reason of any such transaction distributed with respect to the Shares shall
be immediately subject to the Repurchase Right, but only to the extent the
Shares are at the time covered by such right. Appropriate adjustments to reflect
the distribution of such securities or property shall be made to the number of
Shares at the time subject to the Repurchase Right hereunder and to the price
per share to be paid upon the exercise of the Repurchase Right in order to
reflect the effect of any such transaction upon the Corporation's capital
structure; provided, however, that the aggregate Purchase Price shall remain the
same.
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5.6 Corporate Transaction.
A. Immediately prior to the consummation of any of the following
shareholder-approved transactions (a "Corporate Transaction"):
(i) a merger or consolidation in which the Corporation is not
the surviving entity,
(ii) the sale, transfer or other disposition of all or
substantially all of the Corporation's assets, or
(iii) any transaction (other than an issuance of shares by the
Corporation for cash) in or by means of which one or more persons acting
in concert acquire, in the aggregate, more than 50% of the outstanding
shares of the stock of the Corporation,
the Corporation may exercise the Repurchase Right with respect to the then
Unvested Shares. The Repurchase Right shall automatically lapse with respect to
all Unvested Shares not repurchased hereunder, except to the extent the
Repurchase Right is to be assigned to the successor corporation (or its parent
company) in connection with such Corporate Transaction.
B. To the extent the Repurchase Right remains in effect following
such Corporate Transaction, it shall apply to the new capital stock or other
property (including cash) received in exchange for the Shares in consummation of
the Corporate Transaction, but only to the extent the Shares are at the time
covered by such right. Appropriate adjustments shall be made to the price per
share payable upon exercise of the Repurchase Right to reflect the effect of the
Corporate Transaction upon the Corporation's capital structure; provided,
however, that the aggregate Purchase Price shall remain the same.
VI. RIGHT OF FIRST REFUSAL
6.1 Grant. The Corporation is hereby granted rights of first refusal
(the "First Refusal Right"), exercisable in connection with any proposed
transfer of the Purchased Shares in which the Optionee has vested in accordance
with the vesting provisions of Article V. For purposes of this Article VI, the
term "transfer" shall include any sale, assignment, pledge, encumbrance or other
disposition for value of the Purchased Shares intended to be made by the Owner,
but shall not include any of the permitted transfers under paragraph 4.1.
6.2 Notice of Intended Disposition. In the event the Owner desires
to accept a bona fide third-party offer for the transfer of any or all of the
Purchased Shares (the shares subject to such offer to be hereinafter called the
"Target Shares"), Owner shall
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promptly (i) deliver to the Corporate Secretary of the Corporation written
notice (the "Disposition Notice") of the terms and conditions of the offer,
including the purchase price and the identity of the third-party offeror, and
(ii) provide satisfactory proof that the disposition of the Target Shares to
such third-party offeror would not be in contravention of the provisions set
forth in Articles II and IV of this Agreement.
6.3 Exercise of Right. The Corporation shall, for a period of
forty-five (45) days following receipt of the Disposition Notice, have the right
to repurchase any or all of the Target Shares specified in the Disposition
Notice upon the same terms and conditions specified therein or upon terms and
conditions which do not materially vary from those specified therein. Such right
shall be exercisable by delivery of written notice (the "Exercise Notice") to
Owner prior to the expiration of the forty-five (45)-day exercise period. If
such right is exercised with respect to all the Target Shares specified in the
Disposition Notice, then the Corporation (or its assignees) shall effect the
repurchase of the Target Shares, including payment of the purchase price, not
more than ten (10) business days after delivery of the Exercise Notice; and at
such time Owner shall deliver to the Corporation the certificates representing
the Target Shares to be repurchased, each certificate to be properly endorsed
for transfer. To the extent any of the Target Shares are at the time held in
escrow under Article VII, the certificates for such shares shall automatically
be released from escrow and delivered to the Corporation for purchase. Should
the purchase price specified in the Disposition Notice be payable in property
other than cash or evidences of indebtedness, the Corporation (or its assignees)
shall have the right to pay the purchase price in the form of cash equal in
amount to the value of such property. If the Owner and the Corporation (or its
assignees) cannot agree on such cash value within ten (10) days after the
Corporation's receipt of the Disposition Notice, the valuation shall be made by
an appraiser of recognized standing selected by the Owner and the Corporation
(or its assignees) or, if they cannot agree on an appraiser within twenty (20)
days after the Corporation's receipt of the Disposition Notice, each shall
select an appraiser of recognized standing and the two appraisers shall
designate a third appraiser of recognized standing, whose appraisal shall be
determinative of such value. The cost of such appraisal shall be shared equally
by the Owner and the Corporation. The closing shall then be held on the later of
(i) the tenth business day following delivery of the Exercise Notice or (ii) the
tenth business day after such cash valuation shall have been made.
6.4 Non-Exercise of Right. In the event the Exercise Notice is not
given to Owner within forty-five (45) days following the date of the
Corporation's receipt of the Disposition Notice, Owner shall have a period of
thirty (30) days thereafter in which to sell or otherwise dispose of the Target
Shares to the third-party offeror identified in the Disposition Notice upon
terms and conditions (including the purchase price) no more favorable to such
third-party offeror than those specified in the Disposition Notice; provided,
however, that any such sale or disposition must not be effected in contravention
of the provisions of Article II of this Agreement. To the extent any of the
Target Shares are at the time held in escrow under Article VII, the certificates
for such shares shall automatically be released from escrow and surrendered to
the Owner. The third-party offeror shall acquire the Target Shares free and
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clear of the Corporation's Repurchase Right under Article V and the
Corporation's First Refusal Right hereunder, but the acquired shares shall
remain subject to (i) the securities law restrictions of subparagraph 2.3A. and
(ii) the market stand-off provisions of paragraph 4.4. In the event Owner does
not effect such sale or disposition of the Target Shares within the specified
thirty (30)-day period, the Corporation's First Refusal Right shall continue to
be applicable to any subsequent disposition of the Target Shares by Owner until
such right lapses in accordance with paragraph 6.7.
6.5 Partial Exercise of Right. In the event the Corporation (or its
assignees) makes a timely exercise of the First Refusal Right with respect to a
portion, but not all, of the Target Shares specified in the Disposition Notice,
Owner shall have the option, exercisable by written notice to the Corporation
delivered within thirty (30) days after the date of the Disposition Notice, to
effect the sale of the Target Shares pursuant to one of the following
alternatives:
(a) sale or other disposition of all the Target Shares to the
third-party offeror identified in the Disposition Notice, but in full
compliance with the requirements of paragraph 6.4, as if the Corporation
did not exercise the First Refusal Right hereunder; or
(b) sale to the Corporation (or its assignees) of the portion
of the Target Shares which the Corporation (or its assignees) has elected
to purchase, such sale to be effected in substantial conformity with the
provisions of paragraph 6.3.
Failure of Owner to deliver timely notification to the Corporation
under this paragraph 6.5 shall be deemed to be an election by Owner to sell the
Target Shares pursuant to alternative (a) above.
6.6 Recapitalization/Merger.
A. In the event of any stock dividend, stock split, recapitalization
or other transaction affecting the Corporation's outstanding Common Stock as a
class effected without receipt of consideration, then any new, substituted or
additional securities or other property which is by reason of such transaction
distributed with respect to the Purchased Shares shall be immediately subject to
the Corporation's First Refusal Right hereunder, but only to the extent the
Purchased Shares are at the time covered by such right.
B. In the event of any of the following transactions:
(i) a merger or consolidation in which the Corporation is not
the surviving entity,
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(ii) a sale, transfer or other disposition of all or
substantially all of the Corporation's assets,
(iii) a reverse merger in which the Corporation is the
surviving entity but in which the Corporation's outstanding voting
securities are transferred in whole or in part to person or persons other
than those who held such securities immediately prior to the merger, or
(iv) any transaction effected primarily to change the State in
which the Corporation is incorporated, or to create a holding company
structure,
the Corporation's First Refusal Right shall remain in full force and effect and
shall apply to the new capital stock or other property received in exchange for
the Purchased Shares in consummation of the transaction but only to the extent
the Purchased Shares are at the time covered by such right.
6.7 Lapse. The First Refusal Right under this Article VI shall lapse
and cease to have effect upon the earliest to occur of (i) the first date on
which shares of the Corporation's Common Stock are held of record by more than
five hundred (500) persons, (ii) a determination is made by the Corporation's
Board of Directors that a public market exists for the outstanding shares of the
Corporation's Common Stock, or (iii) a firm commitment underwritten public
offering pursuant to an effective registration statement under the 1933 Act,
covering the offer and sale of the Corporation's Common Stock in the aggregate
amount of at least $5,000,000. However, the market stand-off provisions of
paragraph 4.4 shall continue to remain in full force and effect following the
lapse of the First Refusal Right hereunder.
VII. ESCROW
7.1 Deposit. Upon issuance, the certificates for any Unvested Shares
purchased hereunder shall be deposited in escrow with the Corporation to be held
in accordance with the provisions of this Article VII. Each deposited
certificate shall be accompanied by a duly executed Assignment Separate from
Certificate in the form of Exhibit A. The deposited certificates, together with
any other assets or securities from time to time deposited with the Corporation
pursuant to the requirements of this Agreement, shall remain in escrow until
such time or times as the certificates (or other assets and securities) are to
be released or otherwise surrendered for cancellation in accordance with
paragraph 7.3. Upon delivery of the certificates (or other assets and
securities) to the Corporation, the Owner shall be issued an instrument of
deposit acknowledging the number of Unvested Shares (or other assets and
securities) delivered in escrow to the Corporation.
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7.2 Recapitalization. All regular cash dividends on the Unvested
Shares (or other securities at the time held in escrow) shall be paid directly
to the Owner and shall not be held in escrow. However, in the event of any stock
dividend, stock split, recapitalization or other change affecting the
Corporation's outstanding Common Stock as a class effected without receipt of
consideration or in the event of a Corporate Transaction, any new, substituted
or additional securities or other property which is by reason of such
transaction distributed with respect to the Unvested Shares shall be immediately
delivered to the Corporation to be held in escrow under this Article VII, but
only to the extent the Unvested Shares are at the time subject to the escrow
requirements of paragraph 7.1.
7.3 Release/Surrender. The Unvested Shares, together with any other
assets or securities held in escrow hereunder, shall be subject to the following
terms and conditions relating to their release from escrow or their surrender to
the Corporation for repurchase and cancellation:
(a) Should the Corporation (or its assignees) elect to exercise the
Repurchase Right under Article V with respect to any Unvested Shares, then the
escrowed certificates for such Unvested Shares (together with any other assets
or securities issued with respect thereto) shall be delivered to the
Corporation, concurrently with payment to the Owner, in cash or cash equivalent
(including the cancellation of any purchase-money indebtedness), of an amount
equal to the aggregate Purchase Price for such Unvested Shares, and the Owner
shall cease to have any further rights or claims with respect to such Unvested
Shares (or other assets or securities attributable to such Unvested Shares).
(b) Should the Corporation (or its assignees) elect to exercise its
First Refusal Right under Article VI with respect to any vested Target Shares
held at the time in escrow hereunder, then the escrowed certificates for such
Target Shares (together with any other assets or securities attributable
thereto) shall, concurrently with the payment of the paragraph 6.3 purchase
price for such Target Shares to the Owner, be surrendered to the Corporation,
and the Owner shall cease to have any further rights or claims with respect to
such Target Shares (or other assets or securities).
(c) Should the Corporation (or its assignees) elect not to exercise
its First Refusal Right under Article VI with respect to any Target Shares held
at the time in escrow hereunder, then the escrowed certificates for such Target
Shares (together with any other assets or securities attributable thereto) shall
be surrendered to the Owner for disposition in accordance with the provisions of
paragraph 6.4.
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(d) As the interest of the Participant in the Unvested Shares (or
any other assets or securities attributable thereto) vests in accordance with
the provisions of Article V, the certificates for such vested shares (as well as
all other vested assets and securities) shall be released from escrow and
delivered to the Owner in accordance with the following schedule:
(i) The initial release of vested shares (or other vested assets
and securities) from escrow shall be effected within thirty (30) days
following the expiration of the initial twelve (12)-month period measured
from the initial vesting date under paragraph 5.3.
(ii) Subsequent releases of vested shares (or other vested assets
and securities) from escrow shall be effected at semi-annual intervals
thereafter, with the first such semi-annual release to occur six (6)
months after the initial paragraph 5.3 vesting date.
(iii) Upon the Participant's cessation of Service, any escrowed
Shares (or other assets or securities) in which the Participant is at the
time vested shall be promptly released from escrow.
(iv) Upon any earlier termination of the Corporation's Repurchase
Right in accordance with the applicable provisions of Article V, the
Shares (or other assets or securities) at the time held in escrow
hereunder shall promptly be released to the Owner as fully-vested shares
or other property.
(e) All Shares (or other assets or securities) released from escrow
in accordance with the provisions of subparagraph (d) above shall nevertheless
remain subject to (I) the Corporation's First Refusal Right under Article VI
until such right lapses pursuant to paragraph 6.7, (II) the market stand-off
provisions of paragraph 4.4 until such provisions terminate in accordance
therewith and (III) the Special Purchase Right under Article VIII.
VIII. MARITAL DISSOLUTION OR LEGAL SEPARATION
8.1 Grant. In connection with the dissolution of the Participant's
marriage or the legal separation of the Participant and the Participant's
spouse, the Corporation shall have the right (the "Special Purchase Right"),
exercisable at any time during the thirty (30)- day period following the
Corporation's receipt of the required Dissolution Notice under paragraph 8.2, to
purchase from the Participant's spouse, in accordance with the provisions of
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paragraph 8.3, all or any portion of the Shares which would otherwise be awarded
to such spouse in settlement of any community property or other marital property
rights such spouse may have in such shares.
8.2 Notice of Decree or Agreement. The Participant shall promptly
provide the Secretary of the Corporation with written notice (the "Dissolution
Notice") of (i) the entry of any judicial decree or order resolving the property
rights of the Participant and the Participant's spouse in connection with their
marital dissolution or legal separation or (ii) the execution of any contract or
agreement relating to the distribution or division of such property rights. The
Dissolution Notice shall be accompanied by a copy of the actual decree of
dissolution or settlement agreement between the Participant and the
Participant's spouse which provides for the award to the spouse of one or more
Shares in settlement of any community property or other marital property rights
such spouse may have in such shares.
8.3 Exercise of Special Purchase Right. The Special Purchase Right
shall be exercisable by delivery of the Purchase Notice to the Participant and
the Participant's spouse within thirty (30) days after the Corporation's receipt
of the Dissolution Notice. The Purchase Notice shall indicate the number of
shares to be purchased by the Corporation, the date such purchase is to be
effected (such date to be not less than five (5) business days, nor more than
ten (10) business days, after the date of the Purchase Notice), and the fair
market value to be paid for such Shares. The Participant (or the Participant's
spouse, to the extent such spouse has physical possession of the Shares) shall,
prior to the close of business on the date specified for the purchase, deliver
to the Corporate Secretary of the Corporation the certificates representing the
shares to be purchased, each certificate to be properly endorsed for transfer.
To the extent any of the shares to be purchased by the Corporation are at the
time held in escrow under Article VII, the certificates for such shares shall be
promptly delivered out of escrow to the Corporation. The Corporation shall,
concurrently with the receipt of the stock certificates, pay to the
Participant's spouse (in cash or cash equivalents) an amount equal to the fair
market value specified for such shares in the Purchase Notice.
If the Participant's spouse does not agree with the fair market
value specified for the shares in the Purchase Notice, then the spouse shall
promptly notify the Corporation in writing of such disagreement and the fair
market value of such shares shall thereupon be determined by an appraiser of
recognized standing selected by the Corporation and the spouse. If they cannot
agree on an appraiser within twenty (20) days after the date of the Purchase
Notice, each shall select an appraiser of recognized standing, and the two
appraisers shall designate a third appraiser of recognized standing whose
appraisal shall be determinative of such value. The cost of the appraisal shall
be shared equally by the Corporation and the Participant's spouse. The closing
shall then be held on the fifth business day following the completion of such
appraisal; provided, however, that if the appraised value is more than fifteen
percent (15%) greater than the fair market value specified for the shares in the
Purchase Notice, the Corporation shall have the right, exercisable prior to the
expiration of
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such five (5) business-day period, to rescind the exercise of the Special
Purchase Right and thereby revoke its election to purchase the shares awarded to
the spouse.
8.4 Lapse. The Special Purchase Right under this Article VIII shall
lapse and cease to have effect upon the earlier to occur of (i) the first date
on which the First Refusal Right under Article VI lapses or (ii) the expiration
of the thirty (30)-day exercise period specified in paragraph 8.3, to the extent
the Special Purchase Right is not timely exercised in accordance with such
paragraph.
IX. GENERAL PROVISIONS
9.1 Assignment. The Corporation may assign its Repurchase Right
under Article V, its First Refusal Right under Article VI and/or its Special
Purchase Right under Article VIII to any person or entity selected by the
Corporation's Board of Directors, including (without limitation) one or more
shareholders of the Corporation.
If the assignee of the Repurchase Right is other than a one hundred
percent (100%) owned subsidiary corporation of the Corporation or the parent
corporation owning one hundred percent (100%) of the Corporation, then such
assignee must make a cash payment to the Corporation, upon the assignment of the
Repurchase Right, in an amount equal to the excess (if any) of (i) the fair
market value of the Unvested Shares at the time subject to the assigned
Repurchase Right over (ii) the aggregate repurchase price payable for Unvested
Shares thereunder.
9.2 Definitions.
(a) Except as otherwise provided herein, capitalized terms
shall have the meanings assigned to them in the Plan.
(b) For purposes of this Agreement, the following provisions
shall be applicable in determining the parent and subsidiary corporations
of the Corporation:
(i) Any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation
shall be considered to be a parent corporation of the
Corporation, provided each such corporation in the unbroken
chain (other than the Corporation) owns, at the time of the
determination, stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one
of the other corporations in such chain.
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(ii) Each corporation (other than the Corporation) in an
unbroken chain of corporations beginning with the Corporation
shall be considered to be a subsidiary of the Corporation,
provided each such corporation (other than the last
corporation) in the unbroken chain owns, at the time of the
determination, stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one
of the other corporations in such chain.
9.3 No Employment or Service Contract. Nothing in this Agreement or
in the Plan shall confer upon the Participant any right to continue in the
Service of the Corporation (or any parent or subsidiary corporation employing or
retaining Participant) for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Corporation (or any parent or
subsidiary corporation employing or retaining Participant) or the Participant,
which rights are hereby expressly reserved by each, to terminate the
Participant's Service at any time for any reason whatsoever, with or without
cause.
9.4 Notices. Any notice required in connection with (i) the
Repurchase Right, the Special Purchase Right or the First Refusal Right or (ii)
the disposition of any Shares covered thereby shall be given in writing and
shall be deemed effective upon personal delivery or upon deposit in the United
States mail, registered or certified, postage prepaid and addressed to the party
entitled to such notice at the address indicated below such party's signature
line on this Agreement or at such other address as such party may designate by
ten (10) days advance written notice under this paragraph 9.4 to all other
parties to this Agreement.
9.5 No Waiver. The failure of the Corporation (or its assignees) in
any instance to exercise the Repurchase Right granted under Article V, or the
failure of the Corporation (or its assignees) in any instance to exercise the
First Refusal Right granted under Article VI, or the failure of the Corporation
(or its assignees) in any instance to exercise the Special Purchase Right
granted under Article VIII shall not constitute a waiver of any other repurchase
rights and/or rights of first refusal that may subsequently arise under the
provisions of this Agreement or any other agreement between the Corporation and
the Participant or the Participant's spouse. No waiver of any breach or
condition of this Agreement shall be deemed to be a waiver of any other or
subsequent breach or condition, whether of like or different nature.
9.6 Cancellation of Shares. If the Corporation (or its assignees)
shall make available, at the time and place and in the amount and form provided
in this Agreement, the consideration for the Shares to be repurchased in
accordance with the provisions of this Agreement, then from and after such time,
the person from whom such shares are to be repurchased shall no longer have any
rights as a holder of such shares (other than the right to receive payment of
such consideration in accordance with this Agreement), and such shares
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shall be deemed purchased in accordance with the applicable provisions hereof
and the Corporation (or its assignees) shall be deemed the owner and holder of
such shares, whether or not the certificates therefor have been delivered as
required by this Agreement.
X. MISCELLANEOUS PROVISIONS
10.1 Participant Undertaking. Participant hereby agrees to take
whatever additional action and execute whatever additional documents the
Corporation may in its judgment deem necessary or advisable in order to carry
out or effect one or more of the obligations or restrictions imposed on either
the Participant or the Shares pursuant to the express provisions of this
Agreement.
10.2 Agreement is Entire Contract. This Agreement constitutes the
entire contract between the parties hereto with regard to the subject matter
hereof. This Agreement is made pursuant to the provisions of the Plan and shall
in all respects be construed in conformity with the express terms and provisions
of the Plan.
10.3 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California, as such laws
are applied to contracts entered into and performed in such State without resort
to that State's conflict of laws rules.
10.4 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
10.5 Successors and Assigns. The provisions of this Agreement shall
inure to the benefit of, and be binding upon, the Corporation and its successors
and assigns and the Participant and the Participant's legal representatives,
heirs, legatees, distributees, assigns and transferees by operation of law,
whether or not any such person shall have become a party to this Agreement and
have agreed in writing to join herein and be bound by the terms and conditions
hereof.
10.6 Power of Attorney. Participant's spouse hereby appoints
Participant his or her true and lawful attorney in fact, for him or her and in
his or her name, place and ▇▇▇▇▇, and for his or her use and benefit, to agree
to any amendment or modification of this Agreement and to execute such further
instruments and take such further actions as may reasonably be necessary to
carry out the intent of this Agreement. Participant's spouse further gives and
grants unto Participant as his or her attorney in fact full power and authority
to do and perform every act necessary and proper to be done in the exercise of
any of the foregoing powers as fully as he or she might or could do if
personally present, with full power of substitution and revocation, hereby
ratifying and confirming all that Participant shall lawfully do and cause to be
done by virtue of this power of attorney.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
day and year first indicated above.
Collateral Therapeutics, Inc.
By:
--------------------------------
Title:
--------------------------------
Address:
--------------------------------
--------------------------------
--------------------------------
Participant(1)
Address:
--------------------------------
--------------------------------
The undersigned spouse of Participant has read and hereby approves
the foregoing Restricted Stock Purchase Agreement. In consideration of the
Corporation's granting the Participant the right to acquire the Shares in
accordance with the terms of such Agreement, the undersigned hereby agrees to be
irrevocably bound by all the terms and provisions of such Agreement, including,
(specifically) the right of the Corporation (or its assignees) to purchase any
and all interest or right the undersigned may otherwise have in such shares
pursuant to community property laws or other marital property rights.
Participant's Spouse
--------------------------------
----------
(1) I have executed the Section 83(b) election that was attached hereto as
Exhibit C. As set forth in Article III, I understand that I, and not the
Corporation, will be responsible for completing the form and filing the election
with the appropriate offices of the federal and state tax authorities and that
if such filing is not completed within thirty (30) days after the date of this
Agreement, I will not be entitled to the tax benefits provided by Section 83(b).
EXHIBIT A
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, __________ hereby sell(s), assign(s) and
transfer(s) unto Collateral Therapeutics, Inc. (the "Corporation")
_______________ (________) shares of the Common Stock of the Corporation
standing in his\her name on the books of the Corporation represented by
Certificate No.__________ and does hereby irrevocably constitute and appoint
____________ as attorney to transfer the said stock on the books of the
Corporation with full power of substitution in the premises.
Dated:
----------------
Signature
-------------------------------
Instruction: Please do not fill in any blanks other than the signature line. The
purpose of this assignment is to enable the Corporation to exercise the
Repurchase Right set forth in the Agreement without requiring additional
signatures on the part of the Participant.
A-1
EXHIBIT B
1995 STOCK OPTION/STOCK ISSUANCE PLAN
B-1
AS AMENDED MAY 16, 1997
COLLATERAL THERAPEUTICS, INC.
1995 STOCK OPTION/STOCK ISSUANCE PLAN
ARTICLE I
GENERAL PROVISIONS
1. PURPOSE
This 1995 Stock Option/Stock Issuance Plan ("Plan") is intended to
promote the interests of Collateral Therapeutics, Inc., a California corporation
(the "Corporation"), by providing individuals who render valuable services to
the Corporation (or any Parent or Subsidiary) with the opportunity to acquire
ownership interests in the Corporation so as to encourage them to continue to
render services to the Corporation (or any Parent or Subsidiary).
2. STRUCTURE OF THE PLAN; TERMINOLOGY
This Plan has two separate components: the Option Grant Program set
forth in Article II and the Stock Issuance Program set forth in Article III. For
the purposes of this Plan, any capitalized term shall have the meaning assigned
under Article IV, Section 8 hereof.
3. ADMINISTRATION OF THE PLAN
A. This Plan shall be administered by either the Board or a
committee of two (2) or more Board members appointed by the Board to which the
Board has delegated administrative functions under the Plan (the "Plan
Administrator"). Members of any committee to which the Board has delegated any
administrative functions shall serve for such terms as the Board shall determine
and subject to the Board's right of removal. All delegations of authority to any
committee shall be and remain revocable by the Board.
B. The Plan Administrator shall have full power and authority to
implement, interpret and administer the Plan, to establish all such rules and
regulations as it deems appropriate, and to make such determinations under the
Plan and any outstanding option grants or share issuances as it deems necessary
or advisable. Decisions of the Plan Administrator shall be final and binding on
all parties who have an interest in the Plan or any outstanding option or share
issuance.
4. SELECTION OF OPTIONEES AND PARTICIPANTS
A. The persons eligible to receive share issuances under the Stock
Issuance Program and/or option grants pursuant to the Option Grant Program are
limited to Employees; non-employee members of the Board of the Corporation (or
of any Parent or Subsidiary); and consultants and other independent contractors
who provide valuable services to the Corporation (or to any Parent or
Subsidiary).
B. The Plan Administrator shall have the absolute discretion and
authority to determine, subject to the provisions of this Plan, the terms of any
option grant or share issuance. In addition to any other matters over which the
Plan Administrator has discretion hereunder, the Plan Administrator shall
determine which, if any, eligible individuals will be granted options in
accordance with Article II of the Plan and which will be issued shares in
accordance with Article III of the Plan. With respect to option grants made
under the Plan, the Plan Administrator will determine the number of shares to be
covered by each such grant, the status of the granted option as either an
Incentive Option or a Non-Statutory Option, the time or times at which each
granted option is to become exercisable, the vesting schedule (if any)
applicable to shares issued pursuant to the granted options, and the maximum
term for which the option may remain outstanding. With respect to share
issuances under the Stock Issuance Program, in addition to other matters over
which the Plan Administrator has discretion hereunder, the Plan Administrator
will determine the number of shares to be issued to each issuee, the vesting
schedule (if any) applicable to the issued shares, and the consideration to be
paid by the individual for such shares.
C. Common Stock issuable under the Plan, whether under the Option
Grant Program or the Stock Issuance Program, may be subject to such restrictions
on transfer, repurchase rights or other restrictions as may be imposed by the
Plan Administrator and set forth in the documents governing such option or
issuance.
5. STOCK SUBJECT TO THE PLAN
A. Common Stock of the Corporation ("Common Stock") will be issued
under the Plan. The maximum number of shares of Common Stock which may be issued
over the term of the Plan shall not exceed 562,359 shares, subject to adjustment
from time to time in accordance with the provisions of this Section 5 of Article
I.
B. Shares reserved for issuance under granted options but not in
fact issued pursuant to options granted under the Plan due to the expiration or
termination of the option or the cancellation of the option in accordance with
Section 3 of Article II, will again become available for issuance under the
Plan. Shares actually issued under the Plan, whether pursuant
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to the exercise of an option under the Option Grant Program or a stock issuance
pursuant to the Stock Issuance Program, which are subsequently repurchased by
the Corporation will not become available for future issuance.
C. In the event any change is made to the Common Stock issuable
under the Plan by reason of any stock dividend, stock split, combination of
shares, exchange of shares or other change affecting the outstanding Common
Stock as a class without receipt of consideration, then appropriate adjustments
shall be made to (i) the aggregate number and/or class of shares issuable under
the Plan and (ii) the aggregate number and/or class of shares and the option
price per share in effect under each outstanding option in order to prevent the
dilution or enlargement of benefits thereunder. The adjustments determined by
the Plan Administrator shall be final, binding and conclusive.
6. AMENDMENT OF THE PLAN AND AWARDS
A. The Board shall have complete and exclusive power and authority
to amend or modify the Plan in any or all respects whatsoever. However, no such
amendment or modification shall adversely affect the rights and obligations of
an optionee with respect to options at the time outstanding under the Plan, nor
adversely affect the rights of any issuee with respect to Common Stock issued
under the Plan prior to such action unless such optionee or issuee consents to
such amendment. In addition, the Board shall not, without the approval of the
Corporation's shareholders, amend the Plan so as to (i) increase the maximum
number of shares issuable under the Plan (except for adjustments required under
Article I, subsection 5. C.), (ii) materially increase the benefits accruing to
individuals who participate in the Plan, or (iii) materially modify the
eligibility requirements for participation in the Plan.
B. Options to purchase shares of Common Stock may be granted under
the Option Grant Program and shares of Common Stock may be issued under the
Stock Issuance Program, which are in excess of the number of shares then
available for issuance under the Plan, provided any excess shares actually
issued under the Option Grant Program or the Stock Issuance Program are held in
escrow until shareholder approval of an amendment sufficiently increasing the
number of shares of Common Stock available for issuance under the Plan is
obtained. If such approval is not obtained within twelve (12) months after the
date the initial excess issuances are made, then (i) any unexercised options
representing such excess shall terminate and cease to be exercisable and (ii)
the Corporation shall promptly refund to the optionees and issuees the option or
purchase price paid for any excess shares issued under the Plan and held in
escrow, together with interest (at the applicable short term federal rate) for
the period the shares were held in escrow, and such shares shall thereupon be
automatically cancelled and cease to be outstanding.
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7. EFFECTIVE DATE AND TERM OF PLAN
A. The Plan shall become effective when adopted by the Board.
Options to purchase shares of Common Stock may be granted under the Option Grant
Program and shares of Common Stock may be issued under the Stock Issuance
Program from and after the effective date, provided any shares actually issued
under the Plan are held in escrow until shareholder approval of the Plan is
obtained. If such approval is not obtained within twelve (12) months after the
effective date, then (i) all options shall terminate and cease to be
exercisable, (ii) the Corporation shall promptly refund to the optionees and
issuees the option or purchase price paid for any shares issued under the Plan,
together with interest (at the applicable short term federal rate) for the
period the shares were held in escrow, and such shares shall thereupon be
automatically cancelled and cease to be outstanding, and (iii) this Plan shall
terminate in its entirety.
B. Unless sooner terminated by reason of subsection 7. A. of this
Article I, the Plan shall terminate upon the earlier of (i) November 14, 2005,
or (ii) the date on which all shares available for issuance under the Plan have
been issued pursuant to the exercise of options granted under Article II or the
issuance of shares under Article III. The termination of the Plan shall have no
effect on any outstanding options under or shares issued and outstanding under
the Plan, and such securities shall thereafter continue to have force and effect
in accordance with the provisions of the agreements evidencing such options and
issuances.
8. NO EMPLOYMENT OR SERVICE RIGHTS
Nothing in the Plan shall confer upon any person any right to
continue in Service for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Corporation (or any Parent or
Subsidiary) or of the optionee or the issuee, which rights are hereby expressly
reserved by each, to terminate Service of the optionee or issuee at any time for
any reason whatsoever, with or without cause or to engage in any Corporate
Transaction.
ARTICLE II
OPTION GRANT PROGRAM
1. TERMS AND CONDITIONS OF OPTIONS
Options granted pursuant to the Plan shall be authorized by action
of the Plan Administrator and may, at the Plan Administrator's discretion, be
either Incentive Options or Non-Statutory Options except that individuals who
are not Employees may only be granted Non-Statutory Options. Each granted option
shall be evidenced by one or more instruments in the form approved by the Plan
Administrator; provided, however, that each such instrument shall comply with
the terms and conditions of Sections 1 and 3 of this Article II and each
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instrument evidencing an Incentive Option shall, in addition, comply with the
provisions of Section 2 of this Article II.
A. Option Price.
(i) The option price per share shall be fixed by the Plan
Administrator. In no event, however, shall the option price per share be less
than eighty-five percent (85%) of the Fair Market Value of a share of Common
Stock on the date of the option grant.
(ii) The option price per share shall become immediately due
upon exercise of the option and shall, subject to the provisions of Article IV,
Section 1 and the agreement evidencing such grant, be payable in cash or check
drawn to the Corporation's order. Notwithstanding the above, should the
Corporation's outstanding Common Stock be registered under Section 12(g) of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), at the time the
option is exercised, then the option price may also be paid as follows:
- in shares of Common Stock held by the optionee for the
requisite period necessary to avoid a charge to the Corporation's earnings
for financial reporting purposes and valued at Fair Market Value; or
- through a special sale and remittance procedure
pursuant to which the optionee provides irrevocable written instructions
(a) to a designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, an amount sufficient to cover the
aggregate option price payable for the purchased shares plus all
applicable Federal and State income and employment taxes required to be
withheld by the Corporation by reason of such purchase and (b) to the
Corporation to deliver the certificates for the purchased shares directly
to such brokerage firm in order to effect the sale transaction.
Except to the extent such sale and remittance procedure is utilized, payment of
the option price must occur at the time the option is exercised.
B. Term and Exercise of Options. Each option granted under the Plan
shall be exercisable at such time or times, during such period, and for such
number of shares as shall be determined by the Plan Administrator and set forth
in the stock option agreement evidencing such option. However, no option granted
under the Plan shall have a term in excess of ten (10) years from the grant
date.
C. No Assignment. During the lifetime of the optionee, the option
shall be exercisable only by the optionee and shall not be assignable or
transferable by the optionee
-5-
otherwise than by will or by the laws of descent and distribution following the
optionee's death.
D. Termination of Service. The following provisions shall govern the
exercise period applicable to any options held by the optionee at the time of
cessation of Service or death:
(i) Should the optionee cease to remain in Service for any
reason other than death or Permanent Disability, then the period during which
each outstanding option held by such optionee is to remain exercisable shall be
limited to the three (3)-month period following the date of such cessation of
Service.
(ii) Should such Service terminate by reason of Permanent
Disability or should the optionee die while holding one or more outstanding
options, then the period during which each such option is to remain exercisable
shall be limited to the twelve (12)- month period following the date of the
optionee's cessation of Service or death. During the limited exercise period
following the optionee's death, the option may be exercised by the personal
representative of the optionee's estate or by the person or persons to whom the
option is transferred pursuant to the optionee's will or in accordance with the
laws of descent and distribution.
(iii) The Plan Administrator shall have full power and
authority to extend (either at the time the option is granted or at any time
while the option remains outstanding) the period of time for which the option is
to remain exercisable following the optionee's cessation of Service, from the
limited period otherwise applicable under subsection 1. C. of this Article II,
to such greater period of time as the Plan Administrator may deem appropriate
under the circumstances.
(iv) Notwithstanding the above, no option shall be exercisable
after the specified expiration date of the option term.
(v) Each such option shall, during the applicable limited
exercise period, be exercisable only with respect to the shares for which the
option was exercisable on the date of the optionee's cessation of Service.
E. Shareholder Rights. An optionee shall not have rights as a
shareholder with respect to any shares subject to an option until such optionee
shall have exercised the option and paid the option price.
2. INCENTIVE OPTIONS
All provisions of the Plan shall be applicable to Incentive Options
granted hereunder and, in addition, the terms and conditions specified in this
Section 2 shall be
-6-
applicable to Incentive Options granted under the Plan. Options which are
specifically designated as Non-Statutory Options when issued under the Plan
shall not be subject to such terms and conditions set forth herein.
A. Option Price.
(i) The option price per share of the Common Stock subject to
an Incentive Option shall in no event be less than one hundred percent (100%) of
the Fair Market Value of a share of Common Stock on the grant date.
(ii) If the individual to whom the option is granted is a 10%
Shareholder, then the option price per share shall not be less than one hundred
ten percent (110%) of the Fair Market Value of the Common Stock on the date of
the option grant.
B. Dollar Limitation. The aggregate Fair Market Value (determined as
of the date or dates of grant) of Common Stock which first becomes exercisable
during any one calendar year under Incentive Options granted to any Employee
under any option plan of the Corporation (or any parent or subsidiary
corporation) shall not exceed the sum of One Hundred Thousand Dollars
($100,000). To the extent the Employee holds options which become exercisable in
the same calendar year, the foregoing limitation on such options shall be
applied on the basis of the order in which such options are granted. Any options
in excess of such limitation shall automatically be treated as Non-Statutory
Options.
C. Term of Option for 10% Shareholders. No option granted to a 10%
Shareholder shall have a term in excess of five (5) years from the grant date.
3. CANCELLATION AND NEW GRANT OF OPTIONS
The Plan Administrator shall have the authority to effect, at any
time and from time to time, with the consent of the affected optionees, the
cancellation of any or all outstanding options under the Plan and the grant in
substitution therefor of new options under the Plan covering the same or a
different number of shares of Common Stock but having an option price per share
established at the time of such cancellation and regrant in accordance with the
provisions of this Plan.
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ARTICLE III
STOCK ISSUANCE PROGRAM
1. STOCK ISSUANCES
Shares of Common Stock shall be issuable under the Stock Issuance
Program through direct and immediate issuances without any intervening stock
option grants. Each such stock issuance shall be evidenced by a Stock Issuance
Agreement ("Issuance Agreement") in a form acceptable to the Plan Administrator,
which form shall be in compliance with the provisions of the Plan.
2. ISSUE PRICE
The purchase price per share shall be fixed by the Plan
Administrator, but in no event shall it be less than eighty-five percent (85%)
of the Fair Market Value of a share of Common Stock at the time of issuance.
3. PAYMENT OF ISSUE PRICE
Except as provided in Article IV, Section 1, shares shall be issued
only in exchange for cash, a check payable to the Corporation, for services
previously rendered to the Corporation (or any Parent or Subsidiary) or such
other lawful consideration as may be acceptable to the Plan Administrator.
ARTICLE IV
MISCELLANEOUS
1. LOANS
A. The Plan Administrator may assist any optionee or issuee (other
than a non-employee director) in the exercise of one or more options granted to
such optionee under the Option Grant Program or the purchase of one or more
shares to be issued to such issuee under the Stock Issuance Program, including
the satisfaction of any Federal and State income and employment tax obligations
arising therefrom, by (i) authorizing the extension of a loan from the
Corporation to such optionee or issuee, or (ii) permitting the optionee or
issuee to pay the option price or purchase price for the purchased Common Stock
in installments over a period of years.
B. The terms of any loan or installment method of payment (including
the interest rate and terms of repayment) shall be established by the Plan
Administrator in its sole discretion. Loans or installment payments may be
authorized with or without security or collateral. However, any loan made to a
consultant or other non-employee advisor must be secured by property other than
the purchased shares of Common Stock. In all events the
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maximum credit available to each optionee or issuee may not exceed the sum of
(i) the aggregate option price or purchase price payable for the purchased
shares plus (ii) any Federal and State income and employment tax liability
incurred by the optionee or issuee in connection with such exercise or purchase.
C. The Plan Administrator may, in its absolute discretion, determine
that one or more loans extended under the financial assistance program shall be
subject to forgiveness by the Corporation in whole or in part upon such terms
and conditions as the Board in its discretion deems appropriate.
2. VESTING OF SHARES AND REPURCHASE RIGHTS
A. The Plan Administrator, in its absolute discretion, may issue
fully and immediately vested shares of Common Stock, or the Plan Administrator
may impose such vesting requirements as it deems appropriate with the
Corporation retaining a right to repurchase any unvested shares. The terms of
the vesting schedule and of the Corporation's repurchase rights shall be as
determined by the Plan Administrator and set forth in the agreement governing
such issuance.
B. Any new, additional or different shares of stock or other
property (including money paid other than as a regular cash dividend) which the
holder of unvested Common Stock may have the right to receive by reason of a
stock dividend, stock split, reclassification or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration shall be issued subject to (i) the same vesting and repurchase
limitations applicable to the unvested Common Stock with respect to which it was
paid or arose, and (ii) such escrow arrangements as the Plan Administrator shall
deem appropriate.
C. No person to whom shares of Common Stock have been issued
pursuant to the Plan may transfer any such shares which have not vested.
Notwithstanding the above, the issuee shall have the right to make a gift of
unvested shares acquired under the Plan to his spouse, parents or issue or to a
trust established for such spouse, parents or issue, provided the transferee of
such shares delivers to the Corporation a written agreement to be bound by all
the provisions of the Plan and the Issuance Agreement or Stock Purchase
Agreement executed by the issuee at the time of his acquisition of the gifted
shares.
3. MARKET STAND-OFF AGREEMENTS
The Plan Administrator may require each person to whom any shares
are issued under this Plan to enter into an agreement which restricts or
prohibits the sale of any stock of the Corporation by such person for a
reasonable period of time following a public offering of any shares of stock by
the Corporation.
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4. RIGHT OF FIRST REFUSAL
Until such time as the Corporation's outstanding shares of Common
Stock are first registered under Section 12(g) of the 1934 Act, the Plan
Administrator may subject any shares issued pursuant to the Plan to a right of
first refusal with respect to any proposed disposition of such shares other than
a transfer permitted by Section 2. C. of this Article IV. Such right of first
refusal shall be exercisable by the Corporation (or its assignees) in accordance
with the terms and conditions specified in the instrument governing the issuance
of such shares.
5. SECURITIES LAWS; LEGENDS
A. No shares of Common Stock or other assets shall be issued or
delivered under this Plan unless and until the Corporation shall have determined
that there has been full and adequate compliance with all applicable
requirements of the Federal and state securities laws and all other applicable
legal and regulatory requirements.
B. Shares issued under the Plan shall bear such legends as the Plan
Administrator deems necessary or appropriate, including such restrictive legends
as the Plan Administrator shall require to reflect the terms of any agreement
between the issuee and the Corporation.
6. SHAREHOLDER RIGHTS
Subject to the rights of the Corporation set forth herein or in any
other agreement entered into between the Corporation and an issuee of shares
under the Plan, each person to whom shares of Common Stock have been issued
under the Plan shall have all the rights of a shareholder with respect to those
shares whether or not his interest in such shares is vested. Accordingly, the
issuee shall have the right to vote such shares and to receive any cash
dividends or other distributions paid or made with respect to such shares.
7. ACCELERATION
The Plan Administrator may, in its discretion, provide for the
automatic acceleration upon a change of control and/or Corporate Transaction of
the time at which any option will become exercisable or for the lapse of any
repurchase right tied to vesting by including a provision to such effect in the
documents evidencing the rights of the optionee or issuee.
8. DEFINITIONS
The following definitions shall be in effect under this Plan:
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A. Board shall mean the Board of Directors of the Corporation.
B. Common Stock shall mean the common stock of the Corporation.
C. Corporate Transaction shall mean either of the following
shareholder-approved transactions to which the Corporation is a party:
(i) any transaction or series of related transactions
(including, without limitation, any reorganization, merger or
consolidation) in which more than fifty percent (50%) of the Corporation's
outstanding voting stock is transferred to a person or persons different
from those who held the stock immediately prior to such transaction, or
(ii) the sale, transfer or other disposition of all or
substantially all of the Corporation's assets in complete liquidation or
dissolution of the Corporation.
D. Employee shall mean an individual who is in the employ of the
Corporation or any Parent or Subsidiary, subject to the control and direction of
the employer entity as to both the work to be performed and the manner and
method of performance.
E. Fair Market Value per share of Common Stock on any relevant date
under the Plan shall be the value determined in accordance with the following
provisions:
(i) If the Common Stock is not at the time listed or admitted to
trading on any Stock Exchange but is traded on the Nasdaq National Market,
the Fair Market Value shall be the closing selling price per share of
Common Stock on the date in question, as the price is reported by the
National Association of Securities Dealers through the Nasdaq National
Market or any successor system. If there is no closing selling price for
the Common Stock on the date in question, then the Fair Market Value shall
be the closing selling price on the last preceding date for which such
quotation exists.
(ii) If the Common Stock is at the time listed or admitted to
trading on any Stock Exchange, then the Fair Market Value shall be the
closing selling price per share of Common Stock on the date in question on
the Stock Exchange determined by the Plan Administrator to be the primary
market for the Common Stock, as such price is officially quoted in the
composite tape of transactions on such exchange. If there is no closing
selling price for the Common Stock on the date in question, then the Fair
Market Value shall be the closing selling price on the last preceding date
for which such quotation exists.
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(iii) If the Common Stock is at the time neither listed nor
admitted to trading on any Stock Exchange nor traded on the Nasdaq
National Market, then such Fair Market Value shall be determined by the
Plan Administrator after taking into account such factors as the Plan
Administrator shall deem appropriate.
F. Incentive Option shall mean a stock option which satisfies the
requirements of the Internal Revenue Code of 1986, as amended (the "Code")
Section 422.
G. Non-Statutory Option shall mean a stock option not intended to
meet the requirements of Code Section 422.
H. Parent shall mean any corporation (other than the Corporation) in
an unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
I. Permanent Disability shall have the meaning assigned to such term
in Code Section 22(e)(3).
J. Service shall mean the provision of services to the Corporation
or any Parent or Subsidiary by an individual in the capacity of an Employee, a
non-employee member of the Board or a consultant or independent contractor.
K. Subsidiary shall mean each corporation (other than the
Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each such corporation (other than the last corporation) in
the unbroken chain owns, at the time of the determination, stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
L. 10% Shareholder shall mean the owner of stock (as determined
under Code Section 424(d)) possessing ten percent (10%) or more of the total
combined voting power of all classes of stock of the Corporation.
9. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the issuance of
shares of Common Stock under the Plan shall be used for general corporate
purposes.
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10. WITHHOLDING
The Corporation's obligation to deliver shares upon the exercise of
any options granted under Article II or the purchase of any shares issued under
Article III shall be subject to the satisfaction of all applicable Federal,
state and local income and employment tax withholding requirements.
11. REGULATORY APPROVALS
The implementation of the Plan, the granting of any options under
the Option Grant Program, the issuance of any shares under the Stock Issuance
Program, and the issuance of Common Stock upon the exercise of the option grants
made hereunder shall be subject to the Corporation's procurement of all
approvals and permits required by regulatory authorities having jurisdiction
over the Plan, the options granted under it, and the Common Stock issued
pursuant to it.
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EXHIBIT C
SECTION 83(b) TAX ELECTION
This statement is being made under Section 83(b) of the Internal Revenue Code,
pursuant to Treas. Reg. Section 1.83-2.
(1) The taxpayer who performed the services is:
Name:
Address:
Taxpayer Ident. No.:
(2) The property with respect to which the election is being made
is _____________ shares of the common stock of Collateral Therapeutics,
Inc.
(3) The property was issued on ____________, 19__.
(4) The taxable year in which the election is being made is the calendar year
19__.
(5) The property is subject to a repurchase right pursuant to which the issuer
has the right to acquire the property at the original purchase price if
for any reason taxpayer's employment with the issuer is terminated. The
issuer's repurchase right lapses in a series of annual and monthly
installments over a four (4) year period ending on _______________.
(6) The fair market value at the time of transfer (determined without regard
to any restriction other than a restriction which by its terms will never
lapse) is $_______ per share.
(7) The amount paid for such property is $________ per share.
(8) A copy of this statement was furnished to Collateral Therapeutics, Inc.
for whom taxpayer rendered the service underlying the transfer of
property.
(9) This statement is executed as of: __________________, 19__.
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Spouse (if any) Taxpayer
This form must be filed with the Internal Revenue Service Center with which
taxpayer files his/her Federal income tax returns. The filing must be made
within 30 days after the execution date of the Restricted Stock Issuance
Agreement.
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