EMPLOYMENT AGREEMENT
BETWEEN ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ AND
HYPERTENSION DIAGNOSTICS, INC.
THIS AGREEMENT is made and entered into as of the 1st day of July, 1997,
by and between HYPERTENSION DIAGNOSTICS, INC. (the "COMPANY") a Minnesota
corporation and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (the "EMPLOYEE").
WHEREAS, Company desires to retain the Employee to be its Vice
President of Finance and Chief Financial Officer and Employee desires to be
the Company's Vice President of Finance and Chief Financial Officer; and
WHEREAS, the Employee has represented to the Company that, except
as specifically stated at the end hereof, Employee is not a party to any
other agreement or has any obligation which will interfere with or be in
conflict with the Employee's ability to fully comply with all terms and
conditions hereof;
NOW, THEREFORE, in consideration of the foregoing promises, the
mutual covenants and obligations of this Agreement and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. EMPLOYMENT. Subject to all of the terms and conditions of
this Agreement, Company hereby employs Employee and Employee hereby accepts
employment with Company as its Vice President of Finance and Chief Financial
Officer ("CFO");
2. DUTIES. Employee will devote sufficient business hours to,
and make the best use of his energy, knowledge and training in, performing
his duties within the general guidelines established by the Company.
3. TERM. The term of this Agreement shall be from July 1, 1997
through June 30, 1999. This Agreement may be extended beyond June 30, 1999 by
mutual agreement of the parties. This Agreement may be terminated for any of
the reasons set forth in Section 9 below. In addition, the parties may, at
any time, mutually agree to terminate this Agreement. Payments to Employee
upon termination will be made by Company as set forth in Section 10 below.
4. COMPENSATION. As compensation for all of Employee's services
under this Agreement, Company agrees to provide Employee the following
compensation:
a. BASE SALARY. It is expected that performance of this
Agreement will require Employee to provide full-time services to the
Company, that is, at least 40 hours per week. Employee's base salary (the
"BASE SALARY") shall be $76,800 annually, subject to adjustments, if any,
to increase same by the Board of Directors following an annual review in
June 1998, payable in accordance with Company's standard payroll practices,
withholdings and deductions.
b. STOCK OPTIONS. Employee is entitled to certain incentive
stock options under this Agreement, which are more fully described in
Exhibit 1 to this Agreement.
5. INSURANCE AND BENEFITS. Employee shall be entitled to
contributory participation in all life insurance, major medical health
insurance, dental insurance, disability insurance, and other benefit plans of
Company as may be approved from time to time by the Board of Directors of
Company.
6. REIMBURSEMENT OF BUSINESS EXPENSES. Company shall, in
accordance with, and to the extent of, its policies in effect from time to
time, bear all ordinary and necessary business expenses incurred by the
Employee in performing his duties as an employee of Company, provided that
Employee accounts promptly for such expense to Company in the manner
prescribed from time to time by Company.
7. WITHHOLDINGS. Company may make such withholdings, deductions
or payments from sums payable to Employee under this Agreement as are
required or permitted by law.
8. VACATION. Employee shall be entitled to a minimum of three
(3) weeks paid vacation each calendar year. Vacation shall accumulate, so
that if the full vacation is not taken in a particular year, any unused
portion will be carried into the following year(s). Upon termination of
employment, Employee shall be paid for all accrued but unused vacation days
at a daily rate equivalent to the amount obtained by dividing 360 days into
his then current Base Salary.
9. TERMINATION. This Agreement and Employee's employment may be
terminated by the Company if the Company determines, in good faith, that the
Employee is not meeting performance expectations, standards or objectives.
If the Company terminates this Agreement for performance reasons, it will
provide Employee with thirty (30) days' notice (which notice will contain, in
reasonable detail, the reasons for such termination), but the Company
reserves the right to, at its option, terminate Employee's employment
immediately by delivering one month's pay with the termination notice. This
Agreement may also be terminated for any of the following reasons:
a. DEATH. In the event of the Employee's death, Base Salary
shall terminate as of the end of the sixth (6th) month following the
Employee's death.
b. DISABILITY. In the event of disability, the Employee's Base
Salary shall be terminated as of the end of the month in which the last day
of the six (6) month period of Employee's inability to perform his duties
occurs. Employee shall be presumed to have such a disability for the
purpose of this Agreement if Employee is substantially incapable of
performing his duties for a period of more than eight (8) weeks.
c. VOLUNTARY TERMINATION. The Employee may, upon thirty (30)
days written notice, terminate this Agreement and Employee's employment.
d. EXPIRATION OF AGREEMENT. Unless otherwise mutually agreed
by the parties, the Agreement will expire at the close of business June 30,
1999.
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10. PAYMENTS UPON TERMINATION. If this Agreement and Employee's
employment are terminated pursuant to Section 9 above, Employee shall be paid
the following: (i) his Base Salary through the date of termination; and (ii)
any unpaid expense reimbursement. If Employee is terminated for any other
reason, Employee shall be paid the following: (i) his Base Salary through
June 30, 1999; and (ii) any unpaid expense reimbursement.
11. NON-DISCLOSURE OF TRADE SECRETS AND CONFIDENTIAL INFORMATION.
Employee shall not during the term of his employment or at any time
thereafter divulge, furnish or make accessible to anyone or use in any way
other than for the benefit of the Company in the ordinary course of business
of the Company any trade secrets or confidential information of the Company
which the Employee has acquired or has become acquainted with or will acquire
or become acquainted with during the term of his employment, whether
developed by Employee or by others. Confidential information includes any
information or compilation of information that derives independent economic
value from not being generally known or readily ascertainable by proper means
by other persons and which relates to any aspect of the Company's business,
including, but not limited to, trade secret information relating to the
Company's scientific technology, processes, systems and products; research
and development; the Company philosophies and strategies; vendor and customer
lists. All information disclosed to the Employee, or to which he obtains
access, whether originated by Employee or by others, during the period of his
employment, which he has reasonable basis to believe to be confidential
information, or which is treated by the Company as being confidential
information, shall be presumed to be confidential information.
12. CONFLICT OF INTERESTS. During the term of this Employment
Agreement, Employee agrees to avoid relationships with individuals or
businesses which might impair or appear to impair the proper performance of
his responsibilities. During the term of this Employment Agreement, Employee
is prohibited from engaging in gainful work or other activities in conflict
with his job responsibilities at the Company if such activity:
- Competes with the Company or provides services or
assistance to a competitor.
- Interferes in any way with his Company duties,
such as requiring Company time or facilities.
- Embarrasses or interferes with the Company's
ability to meet with its objectives.
13. SEVERABILITY. To the extent any provision of this Agreement
shall be invalid or unenforceable, it shall be considered deleted herefrom
and the remainder of such provision of this Agreement shall be unaffected and
shall continue in full force and effect. Notwithstanding the foregoing, in
the event that any provision of this Agreement is unenforceable because it is
over broad, then such provision shall be limited to the extent necessary to
make it enforceable under applicable law and enforced as so limited. The
Employee acknowledges the uncertainty of the law in this respect and
expressly stipulates that this Agreement be given the construction which
renders its provisions
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valid and enforceable to the maximum extent (not exceeding its express terms)
possible under applicable law.
14. MINNESOTA LAW. This Agreement shall be construed and enforced
in accordance with the laws of the State of Minnesota.
15. WAIVER. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach by either party.
16. ENTIRE AGREEMENT. This Agreement, including Exhibit 1,
supersedes any prior employment agreements between the parties and contains
the entire Agreement of the parties with respect to employment and employment
issues. There are no terms other than those contained herein. No amendment
or modification of this Agreement shall be deemed effective unless or until
executed in writing by the parties hereto with the same formality attending
execution of this Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer and the Employee has signed this
Agreement as of the day and year first above written.
HYPERTENSION DIAGNOSTICS, INC.
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, President
"COMPANY"
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
"EMPLOYEE"
###-##-####
------------------------------------------------
Social Security Number
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EXHIBIT 1
HYPERTENSION DIAGNOSTICS, INC.
1995 LONG TERM INCENTIVE AND STOCK OPTION PLAN
NOTICE OF STOCK OPTION GRANT
Optionee's Name and Address:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
You have been granted an option to purchase Common Stock of Hypertension
Diagnostics, Inc. (the "Company") as follows:
GRANT NUMBER: 4
-----
OPTION PRICE PER SHARE: $2.00
TOTAL NUMBER OF SHARES GRANTED: 53,100 Shares
DATE OF GRANT: July 1, 1997
TYPE OF OPTION: X Incentive Stock Option
---- Nonstatutory Stock Option
TERM/EXPIRATION DATE: 06/30/2006
VESTING SCHEDULE: DATE OF VESTING NUMBER OF SHARES
--------------- ----------------
July 31, 1997 1,106
August 31, 1997 1,106
September 30, 1997 1,106
October 31, 1997 1,107
November 30, 1997 1,106
December 31, 1997 1,106
January 31, 1998 1,106
February 28, 1998 1,107
March 31, 1998 1,106
April 30, 1998 1,106
May 31, 1998 1,106
June 30, 1998 1,107
July 31, 1998 1,106
August 31, 1998 1,106
September 30, 1998 1,106
October 31, 1998 1,107
November 30, 1998 1,106
December 31, 1998 1,106
January 31, 1999 1,106
VESTING SCHEDULE: DATE OF VESTING NUMBER OF SHARES
--------------- ----------------
February 28, 1999 1,107
March 31, 1999 1,106
April 30, 1999 1,106
May 31, 1999 1,106
June 30, 1999 1,107
July 31, 1999 1,106
August 31, 1999 1,106
September 30, 1999 1,106
October 31, 1999 1,107
November 30, 1999 1,106
December 31, 1999 1,106
January 31, 2000 1,106
February 29, 2000 1,107
March 31, 2000 1,106
April 30, 2000 1,106
May 31, 2000 1,106
June 30, 2000 1,107
July 31, 2000 1,106
August 31, 2000 1,106
September 30, 2000 1,106
October 31, 2000 1,107
November 30, 2000 1,106
December 31, 2000 1,106
January 31, 2001 1,106
February 28, 2001 1,107
March 31, 2001 1,106
April 30, 2001 1,106
May 31, 2001 1,106
June 30, 2001 1,107
-----
Total 53.100
------
------
If Optionee's employment is terminated pursuant to Section 9
of the Employment Agreement between ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and
Hypertension Diagnostics, Inc. dated as of July 1, 1997 (the
"EMPLOYMENT AGREEMENT"), Optionee shall vest in the
scheduled option shares through the date of termination of
employment. If the Company terminates the Optionee's
employment pursuant to Section 9 of the Employment
Agreement, by delivering one month's pay with the
termination notice, Optionee shall be vested in the
scheduled option shares through the date covering such
one-month pay. If Optionee's employment is terminated for
any other reason than pursuant to Section 9 of the
Employment Agreement, Optionee shall receive full vesting of
all unvested portions of the scheduled option shares as of
the Optionee's termination date.
TERMINATION PERIOD: Option may be exercised after termination of employment
except as set out in Sections 7 and 8 of the Stock Option
Agreement (but in no event later than the Expiration Date).
By your signature and the signature of the Company's
representative below, you and the Company agree that this
option is granted under and governed by the
2
terms and conditions of the 1995 Long Term Incentive and
Stock Option Plan and the Stock Option Agreement, all of
which are attached and made a part of this document.
OPTIONEE: HYPERTENSION DIAGNOSTICS, INC.
By:
-------------------- -------------------------------------
Signature ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Title: President
--------------------
Print Name
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HYPERTENSION DIAGNOSTICS, INC.
1995 LONG TERM INCENTIVE AND STOCK OPTION PLAN
STOCK OPTION AGREEMENT
1. GRANT OF OPTION. Hypertension Diagnostics, Inc., a Minnesota
corporation (the "COMPANY"), hereby grants to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (the "Optionee")
named in the Notice of Stock Option Grant dated July 1, 1997, an option (the
"OPTION") to purchase a total number of shares of Common Stock (the "SHARES")
set forth in the Notice of Stock Option Grant, at the exercise price per share
set forth in the Notice of Stock Option Grant (the "EXERCISE PRICE") subject to
the terms, definitions and provisions of the 1995 Long Term Incentive and Stock
Option Plan (the "PLAN") adopted by the Company, which is incorporated herein by
reference. Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Option.
If designated an Incentive Stock Option, this option is intended to
qualify as an Incentive Stock Option as defined in Section 422 of the Code.
2. EXERCISE OF OPTION. This Option shall be exercisable during its term
in accordance with the Vesting Schedule set out in the Notice of Grant and with
the provisions of Section 7 of the Plan as follows:
(i) RIGHT TO EXERCISE.
(a) This Option may not be exercised for a fraction of a share.
(b) In the event of Optionee's death, disability or other
termination of employment, the exercisability of the Option is governed by
Section 6 below and Section 7 of the Plan, subject to the limitation
contained in subsection 2(i)(c).
(c) In no event may this Option be exercised after the date of
expiration of the term of this Option as set forth in the Notice of Stock
Option Grant.
(ii) METHOD OF EXERCISE. This Option shall be exercisable by written
notice (in the form attached as Exhibit A) which shall state the election to
exercise the Option, the number of Shares in respect of which the Option is
being exercised, and such other representations and agreements as to the
holder's investment intent with respect to such shares of Common Stock as may be
required by the Company pursuant to the provisions of the Plan. Such written
notice shall be signed by the Optionee and shall be delivered in person or by
certified mail to the Secretary of the Company. The written notice shall be
accompanied by payment of the Exercise Price.
No Shares will be issued pursuant to the exercise of an Option unless such
issuance and such exercise shall comply with all relevant provisions of law and
the requirements of any stock exchange upon which the Shares may then be listed.
Assuming such compliance, for income tax
purposes the Shares shall be considered transferred to the Optionee on the date
on which the Option is exercised with respect to such Shares.
3. OPTIONEE'S REPRESENTATIONS. In the event the Shares purchasable
pursuant to the exercise of this Option have not been registered under the
Securities Act of 1933, as amended, at the time this Option is exercised,
Optionee shall, if required by the Company, concurrently with the exercise of
all or any portion of this Option, deliver to the Company his Investment
Representation Statement in the form attached hereto as Exhibit B.
4. METHOD OF PAYMENT. Payment of the Exercise Price shall be by any of
the following, or a combination thereof, at the election of the Optionee:
i. cash; or
ii. check; or
iii. surrender of other shares of Common Stock of the Company which
(A) in the case of Shares acquired pursuant to the exercise of a Company
option, have been owned by the Optionee for more than six (6) months on the
date of surrender, and (B) have a fair market value on the date of
surrender equal to the Exercise Price of the Shares as to which the option
is being exercised; or
iv. delivery of a properly executed exercise notice together with
such other documentation as the Administrator and the broker, if
applicable, shall require to effect an exercise of the Option and delivery
to the Company of the sale or loan proceeds required to pay the exercise
price.
5. RESTRICTIONS ON EXERCISE. This Option may not be exercised if the
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation, including any rule under
Part 207 of Title 12 of the Code of Federal Regulations ("Regulation G") as
promulgated by the Federal Reserve Board. As a condition to the exercise of
this Option, the Company may require Optionee to make any representation and
warranty to the Company as may be required by any applicable law or regulation.
6. TERMINATION OF RELATIONSHIP. In the event of termination of
Optionee's Continuous Status as an Employee, Optionee may, to the extent
otherwise so entitled pursuant hereto or under the terms set forth in the Notice
of Stock Option Grant, exercise this Option during the Termination Period set
out in the Notice of Stock Option Grant. To the extent that Optionee was not
entitled to exercise this Option at the date of such termination, or if Optionee
does not exercise this Option within the time specified herein, the Option shall
terminate.
7. NON-TRANSFERABILITY OF OPTION. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the
2
lifetime of Optionee only by him. The terms of this Option shall be binding
upon the executors, administrators, heirs, successors and assigns of the
Optionee.
8. TERM OF OPTION. This Option may be exercised only within the term set
out in the Notice of Stock Option Grant, and may be exercised during such term
only in accordance with the Plan and the terms of this Option.
9. TAX CONSEQUENCES. The exercise of this Option, and the subsequent
sale or disposition of Shares thus acquired, shall have income tax consequences
for the Optionee, and it is Optionee's responsibility to determine any such
income tax liability.
HYPERTENSION DIAGNOSTICS, INC.
a Minnesota corporation
By:
---------------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, President
OPTIONEE ACKNOWLEDGES AND AGREES THAT, EXCEPT AS OTHERWISE PROVIDED IN
OPTIONEE'S EMPLOYMENT AGREEMENT OR NOTICE OF STOCK OPTION GRANT, THE VESTING OF
SHARES PURSUANT TO THE OPTION HEREOF IS EARNED ONLY BY CONTINUING EMPLOYMENT AT
THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS
OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES
THAT NOTHING IN THIS AGREEMENT, NOR IN THE COMPANY'S STOCK OPTION PLAN WHICH IS
INCORPORATED HEREIN BY REFERENCE, SHALL CONFER UPON OPTIONEE ANY RIGHT WITH
RESPECT TO CONTINUATION OF EMPLOYMENT BY THE COMPANY, NOR SHALL IT INTERFERE IN
ANY WAY WITH HIS RIGHT OR THE COMPANY'S RIGHT TO TERMINATE HIS EMPLOYMENT AT ANY
TIME, WITH OR WITHOUT CAUSE.
Optionee acknowledges receipt of a copy of the Plan and represents that he
is familiar with the terms and provisions thereof, and hereby accepts this
Option subject to all of the terms and provisions thereof. Optionee has
reviewed the Plan and this Option in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Option and fully
understands all provisions of the Option. Optionee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions arising under the Plan or this Option.
Dated:
------------------ ---------------------------------------------
Optionee
3
CONSENT OF SPOUSE
The undersigned spouse of Optionee has read and hereby approves the terms
and conditions of the Plan and this Option Agreement. In consideration of the
Company's granting his or her spouse the right to purchase Shares as set forth
in the Plan and this Option Agreement, the undersigned hereby agrees to be
irrevocably bound by the terms and conditions of the Plan and this Option
Agreement and further agrees that any community property interest shall be
similarly bound. The undersigned hereby appoints the undersigned's spouse as
attorney-in-fact for the undersigned with respect to any amendment or exercise
of rights under the Plan or this Option Agreement.
---------------------------------------
Spouse of Optionee
4
EXHIBIT A
1995 LONG TERM INCENTIVE AND STOCK OPTION PLAN
EXERCISE NOTICE
---------------
---------------
---------------
1. EXERCISE OF OPTION. Effective as of today,
, 19 , the undersigned ("OPTIONEE") hereby elects to exercise Optionee's
option to purchase shares of the Common Stock (the "SHARES") of
Hypertension Diagnostics, Inc. (the "COMPANY") under and pursuant to the
Company's 1995 Long Term Incentive and Stock Option Plan (the "PLAN") and the
[ ] Incentive [ ] Nonstatutory Stock Option Agreement dated __________, 1996
(the "OPTION AGREEMENT").
2. REPRESENTATIONS OF OPTIONEE. Optionee acknowledges that Optionee has
received, read and understood the Plan and the Option Agreement and agrees to
abide by and be bound by their terms and conditions. Optionee represents that
Optionee is purchasing the Shares for Optionee's own account for investment and
not with a view to, or for sale in connection with, a distribution of any of
such Shares.
3. RIGHTS AS SHAREHOLDER. Until the stock certificate evidencing such
Shares is issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to vote
or receive dividends or any other rights as a shareholder shall exist with
respect to the optioned Stock, notwithstanding the exercise of the Option. The
Company shall issue (or cause to be issued) such stock certificate promptly
after the Option is exercised. No adjustment will be made for a dividend or
other right for which the record date is prior to the date the stock certificate
is issued.
Optionee shall enjoy rights as a shareholder until such time as Optionee
disposes of the Shares or the Company and/or its assignee(s) exercises the Right
of First Refusal hereunder. Upon such exercise, Optionee shall have no further
rights as a holder of the Shares so purchased except the right to receive
payment for the Shares so purchased in accordance with the provisions of this
Agreement, and Optionee shall forthwith cause the certificate(s) evidencing the
Shares so purchased to be surrendered to the Company for transfer or
cancellation.
4. TAX CONSULTATION. Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee's purchase or disposition of
the Shares. Optionee represents that Optionee has consulted with any tax
consultants Optionee deems advisable in connection with the purchase or
disposition of the Shares and that Optionee is not relying on the Company for
any tax advice.
5. RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.
(a) LEGENDS. Optionee understands and agrees that the Company shall
cause the legends set forth below or legends substantially equivalent thereto,
to be placed upon any certificates) evidencing ownership of the Shares together
with any other legends that may be required by state or federal securities laws:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR,
IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY
TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR
TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE
THEREWITH.
(b) STOP-TRANSFER NOTICES. Optionee agrees that, in order to ensure
compliance with the restrictions referred to herein, the Company may issue
appropriate "stop transfer" instructions to its transfer agent, if any, and
that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.
(c) REFUSAL TO TRANSFER. The Company shall not be required (i) to
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Agreement or (ii) to treat as owner
of such Shares or to accord the right to vote or pay dividends to any purchaser
or other transferee to whom such Shares shall have been so transferred.
6. MARKET STANDOFF AGREEMENT. Optionee hereby agrees that if so
requested by the Company or any representative of the underwriters in connection
with any registration of the offering of any securities of the Company under the
1933 Act, Optionee shall not sell or otherwise transfer any Shares or other
securities of the Company during the 180-day period following the effective date
of a registration statement of the Company filed under the 1933 Act; provided,
however, that such restriction shall only apply to the first two registration
statements of the Company become effective under the 1933 Act which include
securities be sold on behalf of the Company to the public in an underwritten
public offering under the 1933 Act. The Company may impose stop-transfer
instructions with respect to securities subject t trial foregoing restrictions
until the end of such 180-day period.
7. SUCCESSORS AND ASSIGNS. The Company may assign any of its rights under
this Agreement to single or multiple assignees, and this Agreement shall inure
to the benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer herein set forth, this Agreement shall be binding upon
Optionee and his or her heirs, executors, administrators, successors and
assigns.
2
8. INTERPRETATION. Any dispute regarding the interpretation of this
Agreement shall, be submitted by Optionee or by the Company forthwith to the
Company's Board of Directors or the committee thereof that administers the Plan,
which shall review such dispute at its next regular meeting. The resolution of
such a dispute by the Board or committee shall be final and binding on the
Company and on Optionee.
9. GOVERNING LAW; SEVERABILITY. This Agreement shall be governed by and
construed in accordance with the laws of the State of Minnesota excluding that
body of law pertaining to conflicts of law. Should any provision of this
Agreement be determined by a court of law to be illegal or unenforceable, the
other provisions shall nevertheless remain effective and shall remain
enforceable.
10. DELIVERY OF PAYMENT. Optionee herewith delivers to the Company the
full Exercise Price for the Shares.
11. ENTIRE AGREEMENT. The Plan and Notice of Grant/Option Agreement are
incorporated herein by reference. This Agreement, the Plan and the Notice of
Grant/Option Agreement constitute the entire agreement of the parties and
supersede in their entirety all prior undertakings and agreements of the Company
and Optionee with respect to the subject matter hereof, and is governed by
Minnesota law except for that body of law pertaining to conflict of laws.
Submitted by: Accepted by:
OPTIONEE: Hypertension Diagnostics, Inc.
By:
----------------------------------------
Its:
------------------------- ---------------------------------------
(Signature)
ADDRESS: ADDRESS:
------------------------- -------------------------------------------
------------------------- -------------------------------------------
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EXHIBIT B
INVESTMENT REPRESENTATION STATEMENT
OPTIONEE :
COMPANY : Hypertension Diagnostics, Inc.
SECURITY : Common Stock
AMOUNT :
DATE :
In connection with the purchase of the above-listed Securities, the undersigned
Optionee represents to the Company the following:
(a) Optionee is aware of the Company's business affairs and financial
condition and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision to acquire the securities. Optionee is
acquiring these securities for investment for Optionee's own account only and
not with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act").
(b) Optionee acknowledges and understands that the securities
constitute "restricted securities" under the Securities Act and have not been
registered under the Securities Act in reliance upon a specific exemption
therefrom, which exemption depends upon, among other things, the bona fide
nature of Optionee's investment intent as expressed herein. In this connection,
Optionee understands that, in the view of the Securities and Exchange
Commission, the statutory basis for such exemption may be unavailable if
Optionee's representation was predicated solely upon a present intention to hold
these Securities for the minimum capital gains period specified under tax
statutes, for a deferred sale, for or until an increase or decrease in the
market price of the Securities, or for a period of one year or any other fixed
period in the future. Optionee further understands that the Securities must be
held indefinitely unless they are subsequently registered under the Securities
Act or an exemption from such registration is available. Optionee further
acknowledges and understands that the Company is under no obligation to register
the securities. Optionee understands that the certificate evidencing the
securities will be imprinted with a legend which prohibits the transfer of the
Securities unless they are registered or such registration is not required in
the opinion of counsel satisfactory to the Company, and any other legend
required under applicable state securities laws.
(c) Optionee is familiar with the provisions of Rule 701 and Rule
144, each promulgated under the Securities Act, which, in substance, permit
limited public resale of "restricted securities" acquired, directly or
indirectly from the issuer thereof, in a nonpublic offering subject to the
satisfaction of certain conditions. Rule 701 provides that if the issuer
qualifies under Rule 701 at the time of exercise of the Option by the Optionee,
such exercise will be exempt from registration under the Securities Act. In the
event the Company later becomes subject to the reporting requirements of Section
13 or 15(d) of the Securities Exchange Act of 1934, ninety (90) days thereafter
(or such longer period as any market stand-off agreement may require) the
securities exempt under Rule 701 may be resold, subject to the satisfaction of
certain of the conditions specified by Rule 144, including among other things:
(1) the sale being made through a broker in an unsolicited "broker's
transaction" or in transactions directly with a market maker (as said term is
defined under the Securities Exchange Act of 1934); and, in the case of an
affiliate, (2) the availability of certain public information about the company,
and the amount of securities being sold during any three month period not
exceeding the limitations specified in Rule 144(e), if applicable.
In the event that the Company does not qualify under Rule 701 at the time
of exercise of the Option, then the securities may be resold in certain limited
circumstances subject to the provisions of Rule 144, which requires among other
things: (1) the resale occurring not less than two years after the party has
purchased, and made full payment for, within the meaning of Rule 144, the
securities to be sold; and, in the case of an affiliate, or of a non-affiliate
who has held the securities less than three years, (2) the availability of
certain public information about the Company, (3) the sale being made through a
broker in an unsolicited "broker's transaction" or in transactions directly with
a market maker (as said term is defined under the Securities Exchange Act of
1934), and (4) the amount of securities being sold during any three month period
not exceeding the specified limitations stated therein, if applicable.
(d) Optionee agrees, in connection with the Company's initial
underwritten public offering of the Company's securities, (1) not to sell, make
short sale of, loan, grant any options for the purchase of, or otherwise dispose
of any shares of Common Stock of the Company held by Optionee (other than those
shares included in the registration) without the prior written consent of the
Company or the underwriters managing such initial underwritten public offering
of the Company's securities for one hundred eighty (180) days from the effective
date of such registration, and (2) further agrees to execute any agreement
reflecting (1) above as may be requested by the underwriters at the time of the
public offering; PROVIDED HOWEVER that the officers and directors of the Company
who own the stock of the Company also agree to such restrictions.
(e) Optionee further understands that in the event all of the
applicable requirements of Rule 701 or 144 are not satisfied, registration under
the Securities Act, compliance with Regulation A, or some other registration
exemption will be required; and that, notwithstanding the fact that Rules 144
and 701 are not exclusive, the Staff of the Securities and Exchange Commission
has expressed its opinion that persons proposing to sell private placement
securities other than in a registered offering and otherwise than pursuant to
Rules 144 or 701 will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales, and that such
persons and their respective brokers who participate in such transactions do so
at their own risk. Optionee understands that no assurances can be given that
any such other registration exemption will be available in such event.
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Signature of Optionee:
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Date: 19
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