UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
BioSante Pharmaceuticals, Inc.
------------------------------
(Name of Issuer)
Common Stock, Par Value $.0001 Per Share
----------------------------------------
(Title of Class of Securities)
09065V 10 4
-----------
(CUSIP Number)
Stephen M. Simes
BioSante Pharmaceuticals, Inc.
175 Olde Half Day Road
Lincolnshire, IL 60069
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
August 13, 2001
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following
box: / /
Page 1 of 9
CUSIP NO. 09065V 10 4 SCHEDULE 13D Page 2 of 9
- --------------------- -------------- -----------
- ---------------------------- -----------------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (entities only)
Stephen M. Simes
- ---------------------------- -----------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
Not Applicable (a) / /
(b) / /
- ---------------------------- -----------------------------------------------------------------------------------------
3 SEC USE ONLY
- ---------------------------- -----------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
Not Applicable
- ---------------------------- -----------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR
2(e) / /
- ---------------------------- -----------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
- ---------------------------- -----------------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 3,630,606 (see Item 5)
SHARES ---------------------- ------------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
EACH
REPORTING ---------------------- ------------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 3,630,606 (see Item 5)
---------------------- ------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- ---------------------------- ---------------------- ------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,630,606 (see Item 5)
- ---------------------------- -----------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES / /
Not Applicable
- ---------------------------- -----------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
5.5%
- ---------------------------- -----------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
- ---------------------------- -----------------------------------------------------------------------------------------
ITEM 1. SECURITY AND ISSUER.
This Statement on Schedule 13D relates to the common stock, par value
$.0001 per share, of BioSante Pharmaceuticals, Inc., a Delaware corporation. The
address of the principal executive offices of BioSante is 175 Olde Half Day
Road, Lincolnshire, IL 60069.
ITEM 2. IDENTITY AND BACKGROUND.
(a) This statement is filed by and on behalf of Stephen M. Simes.
(b) Mr. Simes' principal business address is 175 Olde Half Day Road,
Lincolnshire, IL 60069.
(c) Mr. Simes is the Vice Chairman, President and Chief Executive
Officer of BioSante. BioSante's business address is 175 Olde Half Day Road,
Lincolnshire, IL 60069. BioSante is a developmental stage biopharmaceutical
company.
(d) Mr. Simes has not, during the last five years, been convicted
in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) Mr. Simes has not, during the last five years, been a party to
a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, United States federal or
state securities laws or finding any violation with respect to such laws.
(f) Mr. Simes is a citizen of the United States of America.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On August 13, 2001, in consideration for services rendered to BioSante
and in lieu of his annual cash performance bonus, Mr. Simes received 125,000
shares of BioSante common stock pursuant to a stock bonus granted by BioSante's
Board of Directors at a price of $0.60 per share.
ITEM 4. PURPOSE OF TRANSACTION.
On August 13, 2001, in consideration for services rendered to BioSante
and in lieu of his annual cash performance bonus, Mr. Simes received 125,000
shares of BioSante common stock pursuant to a stock bonus granted by BioSante's
Board of Directors at a price of $0.60 per share.
Mr. Simes may from time to time be granted additional shares of
BioSante common stock as stock bonuses by BioSante's Board of Directors or may
from time to time purchase shares of BioSante common stock, either in brokerage
transactions, in the over-the-counter market or in privately negotiated
transactions. Any decision to increase his holdings in BioSante will depend,
however, upon numerous factors, including without limitation the price of the
shares of BioSante common stock, the terms and conditions relating to their
purchase and sale, the prospects and profitability of BioSante, general economic
conditions and stock and money market conditions. At any time, Mr. Simes may
also determine to dispose of some or all of his shares of BioSante common stock,
depending upon various similar considerations.
Page 3 of 9
Except as otherwise provided in this Item 4 and other than as to
matters that Mr. Simes as Vice Chairman, President and Chief Executive Officer
of BioSante may consider and discuss with other BioSante officers and board
members from time to time, Mr. Simes does not have any present plans or
proposals which relate to or would result in:
o the acquisition by any person of additional securities of
BioSante or the disposition of securities of BioSante;
o an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving BioSante;
o a sale or transfer of a material amount of assets of BioSante;
o any change in the present board of directors or management of
BioSante, including any plans or proposals to change the
number or term of directors or to fill any existing vacancies
on the board;
o any material change in the present capitalization or dividend
policy of BioSante;
o any other material change in BioSante's business or corporate
structure;
o changes in BioSante's certificate of incorporation, bylaws or
instruments corresponding thereto or other actions which may
impede the acquisition of control of BioSante by any person;
o causing a class of securities of BioSante to be delisted from
a national securities exchange or to cease to be authorized to
be quoted in an inter-dealer quotation system of a registered
national securities association;
o a class of equity securities of BioSante becoming eligible for
termination of registration pursuant to Section 12(g)(4) of
the Securities Exchange Act of 1934, or
o any action similar to any of those listed above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) 1. Amount beneficially owned: Mr. Simes' beneficial ownership
includes: (1) 663,859 shares of BioSante common stock; (2) 2,779,247 shares of
BioSante common stock issuable upon exercise of outstanding stock options which
are exercisable within 60 days; and (3) 187,500 shares of BioSante common stock
issuable upon exercise of outstanding warrants which are exercisable within 60
days.
2. Percent of class: 5.5%. The foregoing percentage is calculated
based on the 62,834,133 shares of BioSante common stock reported to be
outstanding by BioSante as of August 15, 2001.
(b) Number of shares as to which Mr. Simes has:
(i) Sole power to vote or to direct the
vote...................................... 3,630,606
(ii) Shared power to vote or to direct the
vote.............................................. 0
(iii) Sole power to dispose or to direct the disposition
of........................................ 3,630,606
Page 4 of 9
(iv) Shared power to dispose or to direct the disposition
of................................................ 0
(c) Other than the transaction described in Item 4 of this
Schedule 13D, Mr. Simes has not effected any transactions in BioSante common
stock during the past 60 days.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
In January 1998, BioSante entered into a letter agreement with Mr.
Simes pursuant to which Mr. Simes serves as BioSante's Vice Chairman, President
and Chief Executive Officer. The term of this agreement continues until December
31, 2003, after which time the term will be automatically extended for three
additional years unless on or before October 1 immediately preceding the
extension, either party gives written notice to the other of the termination of
the agreement. Under this Agreement, Mr. Simes is entitled to receive an annual
performance bonus of up to 50% of his then base salary if certain performance
criteria are met. BioSante's Board of Directors has in the past paid this bonus
in cash and in BioSante common stock. If Mr. Simes is terminated without cause
or upon a change in control or if he terminates his employment for good reason,
all of his options will become immediately exercisable and will remain
exercisable for a period of one year (for the remainder of their term in the
event of a change in control), and he will be entitled to a minimum severance
payment of 12 months base salary. Exhibit 1 to this Schedule 13D is a copy of
Mr. Simes' employment agreement with BioSante and is incorporated herein by this
reference.
Mr. Simes holds stock options to purchase an aggregate of 3,570,313
shares of BioSante common stock at exercise prices between $0.23 and $0.40 per
share. Exhibit 2 is a copy of a form of Mr. Simes' stock option agreement
with BioSante and is incorporated herein by this reference.
In connection with BioSante's May 1999 private placement, BioSante
entered into a Shareholders' Agreement, a Securities Purchase Agreement,
Registration Rights Agreement and Warrants with the investors, which included
Mr. Simes. Copies of these agreements are filed as exhibits to this Schedule 13D
and are incorporated herein by this reference. The Shareholders' Agreement
contains, among other things, a voting agreement with respect to the election
of directors. Under the Subscription Agreement and Warrant, the holders of
BioSante common stock and warrants purchased in BioSante's May 1999
private placement are entitled to certain registration rights under the
Securities Act of 1933. If at any time after BioSante becomes listed on
Nasdaq, the holders of a specified amount of these registrable shares request
that BioSante file a registration statement covering the shares, BioSante
will use commercially reasonable efforts to cause these shares to be
registered.
In connection with BioSante's April 2001 private placement, BioSante
entered into Subscription Agreements and Warrants with the investors, which
included Mr. Simes. Copies of these agreements are filed as exhibits to this
Schedule 13D and are incorporated herein by this reference. Under these
agreements and warrants, BioSante agreed to use its reasonable best efforts
to cause a registration statement to be filed and remain effective until the
earlier of (1) the
Page 5 of 9
sale of all the shares of BioSante common stock covered by the registration
statement; or (2) such time as the selling stockholders named in the
registration statement become eligible to resell the shares of BioSante common
stock and the shares of BioSante common stock issuable upon exercise of warrants
pursuant to Rule 144(k) under the Securities Act of 1933.
Except as described herein, there are no other contracts, arrangements,
understandings or relationships between Mr. Simes and any other person with
respect to any securities of BioSante.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit No. Description
----------- -----------
1 Employment Agreement, dated January 21, 1998,
between BioSante Pharmaceuticals, Inc. and
Stephen M. Simes, as amended
2 Form of Incentive Stock Option Agreement, between
BioSante Pharmaceuticals, Inc. and Stephen M. Simes
3 Securities Purchase Agreement, dated May 6, 1999,
between BioSante Pharmaceuticals, Inc. and certain
stockholders of BioSante Pharmaceuticals, Inc.
4 Shareholders' Agreement, dated May 6, 1999, between
BioSante Pharmaceuticals, Inc., Avi Ben-Abraham, M.D.
and certain shareholders of BioSante Pharmaceuticals,
Inc.
5 Registration Rights Agreement, dated May 6, 1999,
between BioSante Pharmaceuticals, Inc. and certain
stockholders of BioSante Pharmaceuticals, Inc.
6 Form of Warrant issued in connection with May 1999
Private Placement
7 Form of Subscription Agreement in connection with the
April 2001 Private Placement
8 Form of Warrant issued in connection with April 2001
Private Placement
Page 6 of 9
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: August 22, 2001 /s/ Stephen M. Simes
--------------------------------------------
Stephen M. Simes
Page 7 of 9
EXHIBIT INDEX
Exhibit No. Description Method of Filing
---------- ----------- ----------------
1 Employment Agreement, dated January 21, 1998, between BioSante
Pharmaceuticals, Inc. and Stephen M. Simes, as amended.............. Incorporated by reference to
Exhibit 10.16 contained in
BioSante's Registration
Statement on Form 10-SB, as
amended (File No. 0-28637)
2 Form of Incentive Stock Option Agreement, between BioSante
Pharmaceuticals, Inc. and Stephen M. Simes.......................... Filed herewith electronically
3 Securities Purchase Agreement, dated May 6, 1999, between
BioSante Pharmaceuticals, Inc. and certain stockholders of
BioSante Pharmaceuticals, Inc. ..................................... Incorporated by reference to
Exhibit 10.14 contained in
BioSante's Registration
Statement on Form 10-SB, as
amended (File No. 0-28637)
Page 8 of 9
4 Shareholders' Agreement, dated May 6, 1999, between BioSante
Pharmaceuticals, Inc., Avi Ben-Abraham, M.D. and certain
shareholders of BioSante Pharmaceuticals, Inc....................... Incorporated by reference to
Exhibit 10.12 contained in
BioSante's Registration
Statement on Form 10-SB, as
amended (File No. 0-28637)
5 Registration Rights Agreement, dated May 6, 1999, between
BioSante Pharmaceuticals, Inc. and certain stockholders of
BioSante Pharmaceuticals, Inc. ..................................... Incorporated by reference to
Exhibit 10.13 contained in
BioSante's Registration
Statement on Form 10-SB, as
amended (File No. 0-28637)
6 Form of Warrant issued in connection with May 1999 Private
Placement........................................................... Incorporated by reference to
Exhibit 4.1 contained in
BioSante's Registration
Statement on Form 10-SB, as
amended (File No. 0-28637)
7 Form of Subscription Agreement in connection with the April 2001
Private Placement................................................... Incorporated by reference to
Exhibit 10.20 contained in
BioSante's Registration
Statement on Form SB-2
(File No. 333-64218)
8 Form of Warrant issued in connection with April 2001 Private
Placement........................................................... Incorporated by reference to
Exhibit 4.2 contained in
BioSante's Registration
Statement on Form SB-2
(File No. 333-64218)
Page 9 of 9
EXHIBIT 2
FORM OF INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT is entered into and effective as of this ____ day of
_____________, ____ (the "Date of Grant"), by and between BioSante
Pharmaceuticals, Inc., a Delaware corporation (the "Company"), and
________________________ (the "Optionee").
A. The Company has adopted the BioSante Pharmaceuticals, Inc. 1998
Stock Option Plan (the "Plan") authorizing the Board of Directors of the
Company, or a committee as provided for in the Plan (the Board or such a
committee to be referred to as the "Committee"), to grant incentive stock
options to employees of the Company and its Subsidiaries (as defined in the
Plan).
B. The Company desires to give the Optionee an inducement to
acquire a proprietary interest in the Company and an added incentive to
advance the interests of the Company by granting to the Optionee an option to
purchase shares of common stock of the Company pursuant to the Plan.
Accordingly, the parties agree as follows:
1. GRANT OF OPTION.
The Company hereby grants to the Optionee the right, privilege, and
option (the "Option") to purchase _____________________________________
(__________) shares (the "Option Shares") of the Company's common stock, no par
value (the "Common Stock"), according to the terms and subject to the conditions
hereinafter set forth and as set forth in the Plan. Subject to Section 10 of
this Agreement, the Option is intended to be an "incentive stock option," as
that term is used in Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code").
2. OPTION EXERCISE PRICE.
The per share price to be paid by Optionee in the event of an exercise
of the Option will be $_______.
3. DURATION OF OPTION AND TIME OF EXERCISE.
3.1 INITIAL PERIOD OF EXERCISABILITY. The Option will become
exercisable with respect to the Option Shares in _______ installments. The
following table sets forth the initial dates of exercisability of each
installment and the number of Option Shares as to which this Option will become
exercisable on such dates:
INITIAL DATE OF NUMBER OF OPTION SHARES
EXERCISABILITY AVAILABLE FOR EXERCISE
---------------- ------------------------
The foregoing rights to exercise this Option will be cumulative with
respect to the Option Shares becoming exercisable on each such date,
but in no event will this Option be exercisable after, and this Option
will become void and expire as to all unexercised Option Shares at,
5:00 p.m. (Lincolnshire, Illinois time) on _______________, ____ (the
"Time of Termination").
3.2 TERMINATION OF EMPLOYMENT.
(a) TERMINATION DUE TO DEATH, DISABILITY OR RETIREMENT.
(i) In the event the Optionee's employment
with the Company and all Subsidiaries is terminated by reason
of death or Disability, this Option will remain exercisable,
to the extent exercisable as of the date of such termination,
for a period of six months after such termination (but in no
event after the Time of Termination).
(ii) In the event the Optionee's employment
with the Company and all Subsidiaries is terminated by reason
of Retirement, this Option will remain exercisable, to the
extent exercisable as of the date of such termination, for a
period of three months after such termination (but in no event
after the Time of Termination).
(b) TERMINATION FOR REASONS OTHER THAN DEATH,
DISABILITY OR RETIREMENT. In the event that the Optionee's employment
with the Company and all Subsidiaries is terminated for any reason
other than death, Disability or Retirement, or the Optionee is in the
employ of a Subsidiary and the Subsidiary ceases to be a Subsidiary of
the Company (unless the Optionee continues in the employ of the Company
or another Subsidiary), all rights of the Optionee under the Plan and
this Agreement will immediately terminate without notice of any kind,
and this Option will no longer be exercisable; provided, however, that
if such termination is due to any reason other than termination by the
Company or any Subsidiary for "cause" (as defined in the Plan), this
Option will remain exercisable to the extent exercisable as of such
termination for a period of three months after such termination (but in
no event after the Time of Termination).
3.3 CHANGE IN CONTROL. If a Change in Control (as defined in the
Plan) of the Company occurs, this Option will become immediately exercisable in
full and will remain exercisable until the Time of Termination, regardless of
whether the Optionee remains in the employ of the Company or any Subsidiary.
4. MANNER OF OPTION EXERCISE.
4.1 NOTICE. This Option may be exercised by the Optionee in
whole or in part from time to time, subject to the conditions contained in the
Plan and in this Agreement, by delivery, in person, by facsimile or electronic
transmission or through the mail, to the Company at its principal executive
office in Lincolnshire, Illinois (Attention: Chief Financial Officer), of a
written notice of exercise. Such notice must be in a form satisfactory to the
Committee, must identify the Option, must specify the number of Option Shares
with respect to which the Option
2
is being exercised, and must be signed by the person or persons so exercising
the Option. Such notice must be accompanied by payment in full of the total
purchase price of the Option Shares purchased. In the event that the Option
is being exercised, as provided by the Plan and Section 3.2 above, by any
person or persons other than the Optionee, the notice must be accompanied by
appropriate proof of right of such person or persons to exercise the Option.
As soon as practicable after the effective exercise of the Option, the
Optionee will be recorded on the stock transfer books of the Company as the
owner of the Option Shares purchased, and the Company will deliver to the
Optionee one or more duly issued stock certificates evidencing such ownership.
4.2 PAYMENT. At the time of exercise of this Option, the
Optionee must pay the total purchase price of the Option Shares to be
purchased entirely in cash (including a check, bank draft or money order,
payable to the order of the Company); provided, however, that the Committee,
in its sole discretion, may allow such payment to be made, in whole or in
part, by tender of a promissory note (on terms acceptable to the Committee in
its sole discretion) or a Broker Exercise Notice or Previously Acquired
Shares (as such terms are defined in the Plan), or by a combination of such
methods. In the event the Optionee is permitted to pay the total purchase
price of this Option in whole or in part with Previously Acquired Shares, the
value of such shares will be equal to their Fair Market Value on the date of
exercise of this Option.
5. RIGHTS OF OPTIONEE; TRANSFERABILITY.
5.1 EMPLOYMENT. Nothing in this Agreement will interfere with or
limit in any way the right of the Company or any Subsidiary to terminate the
employment of the Optionee at any time, nor confer upon the Optionee any right
to continue in the employ of the Company or any Subsidiary at any particular
position or rate of pay or for any particular period of time.
5.2 RIGHTS AS A SHAREHOLDER. The Optionee will have no rights as
a shareholder unless and until all conditions to the effective exercise of this
Option (including, without limitation, the conditions set forth in Sections 4
and 6 of this Agreement) have been satisfied and the Optionee has become the
holder of record of such shares. No adjustment will be made for dividends or
distributions with respect to this Option as to which there is a record date
preceding the date the Optionee becomes the holder of record of such shares,
except as may otherwise be provided in the Plan or determined by the Committee
in its sole discretion.
5.3 RESTRICTIONS ON TRANSFER. Except pursuant to testamentary
will or the laws of descent and distribution or as otherwise expressly permitted
by the Plan, no right or interest of the Optionee in this Option prior to
exercise may be assigned or transferred, or subjected to any lien, during the
lifetime of the Optionee, either voluntarily or involuntarily, directly or
indirectly, by operation of law or otherwise. The Optionee will, however, be
entitled to designate a beneficiary to receive this Option upon such Optionee's
death, and, in the event of the Optionee's death, exercise of this Option (to
the extent permitted pursuant to Section 3.2(a) of this Agreement) may be made
by the Optionee's legal representatives, heirs and legatees.
5.4 BREACH OF CONFIDENTIALITY OR NON-COMPETE AGREEMENTS.
Notwithstanding anything in this Agreement or the Plan to the contrary, in the
event that the Optionee materially breaches the terms of any confidentiality or
non-compete agreement entered into with the
3
Company or any Subsidiary, whether such breach occurs before or after
termination of the Optionee's employment with the Company or any Subsidiary,
the Committee in its sole discretion may immediately terminate all rights of
the Optionee under the Plan and this Agreement without notice of any kind.
6. SECURITIES LAW AND OTHER RESTRICTIONS.
Notwithstanding any other provision of the Plan or this Agreement, the
Company will not be required to issue, and the Optionee may not sell, assign,
transfer or otherwise dispose of, any Option Shares, unless (a) there is in
effect with respect to the Option Shares a registration statement under the
Securities Act of 1933, as amended, and any applicable state or foreign
securities laws or an exemption from such registration, and (b) there has been
obtained any other consent, approval or permit from any other regulatory body
which the Committee, in its sole discretion, deems necessary or advisable. The
Company may condition such issuance, sale or transfer upon the receipt of any
representations or agreements from the parties involved, and the placement of
any legends on certificates representing Option Shares, as may be deemed
necessary or advisable by the Company in order to comply with such securities
law or other restrictions.
7. WITHHOLDING TAXES.
The Company is entitled to (a) withhold and deduct from future wages
of the Optionee (or from other amounts that may be due and owing to the Optionee
from the Company), or make other arrangements for the collection of, all legally
required amounts necessary to satisfy any federal, state or local withholding
and employment-related tax requirements attributable to the Option, including,
without limitation, the grant or exercise of this Option or a disqualifying
disposition of any Option Shares, or (b) require the Optionee promptly to remit
the amount of such withholding to the Company before acting on the Optionee's
notice of exercise of this Option. In the event that the Company is unable to
withhold such amounts, for whatever reason, the Optionee agrees to pay to the
Company an amount equal to the amount the Company would otherwise be required to
withhold under federal, state or local law.
8. ADJUSTMENTS.
In the event of any reorganization, merger, consolidation,
recapitalization, liquidation, reclassification, stock dividend, stock split,
combination of shares, rights offering, divestiture or extraordinary dividend
(including a spin-off), or any other similar change in the corporate structure
or shares of the Company, the Committee (or, if the Company is not the surviving
corporation in any such transaction, the board of directors of the surviving
corporation), in order to prevent dilution or enlargement of the rights of the
Optionee, will make appropriate adjustment (which determination will be
conclusive) as to the number and kind of securities or other property (including
cash) subject to, and the exercise price of, this Option.
9. SUBJECT TO PLAN.
The Option and the Option Shares granted and issued pursuant to this
Agreement have been granted and issued under, and are subject to the terms of,
the Plan. The terms of the Plan are incorporated by reference in this Agreement
in their entirety, and the Optionee, by execution
4
of this Agreement, acknowledges having received a copy of the Plan. The
provisions of this Agreement will be interpreted as to be consistent with the
Plan, and any ambiguities in this Agreement will be interpreted by reference
to the Plan. In the event that any provision of this Agreement is
inconsistent with the terms of the Plan, the terms of the Plan will prevail.
10. INCENTIVE STOCK OPTION LIMITATIONS.
10.1 LIMITATION ON AMOUNT. To the extent that the aggregate Fair
Market Value (determined as of the date of grant) of the shares of Common Stock
with respect to which incentive stock options (within the meaning of Section 422
of the Code) are exercisable for the first time by the Optionee during any
calendar year (under the Plan and any other incentive stock option plans of the
Company or any subsidiary or parent corporation of the Company (within the
meaning of the Code)) exceeds $100,000 (or such other amount as may be
prescribed by the Code from time to time), such excess incentive stock options
will be treated as non-statutory stock options in the manner set forth in the
Plan.
10.2 LIMITATION ON EXERCISABILITY; DISPOSITION OF OPTION SHARES.
Any incentive stock option that remains unexercised more than one year following
termination of employment by reason of Disability or more than three months
following termination for any reason other than death or Disability will
thereafter be deemed to be a non-statutory stock option. In addition, in the
event that a disposition (as defined in Section 424(c) of the Code) of shares of
Common Stock acquired pursuant to the exercise of an incentive stock option
occurs prior to the expiration of two years after its date of grant or the
expiration of one year after its date of exercise (a "disqualifying
disposition"), such incentive stock option will, to the extent of such
disqualifying disposition, be treated in a manner similar to a non-statutory
stock option.
10.3 NO REPRESENTATION OR WARRANTY. Section 422 of the Code and
the rules and regulations thereunder are complex, and neither the Plan nor this
Agreement purports to summarize or otherwise set forth all of the conditions
that need to be satisfied in order for this Option to qualify as an incentive
stock option. In addition, this Option may contain terms and conditions that
allow for exercise of this Option beyond the periods permitted by Section 422 of
the Code, including, without limitation, the periods described in Section 10.2
of this Agreement. Accordingly, the Company makes no representation or warranty
regarding whether the exercise of this Option will qualify as the exercise of an
incentive stock option, and the Company recommends that the Optionee consult
with the Optionee's own advisors before making any determination regarding the
exercise of this Option or the sale of the Option Shares.
11. MISCELLANEOUS.
11.1 BINDING EFFECT. This Agreement will be binding upon the
heirs, executors, administrators and successors of the parties to this
Agreement.
11.2 GOVERNING LAW. This Agreement and all rights and obligations
under this Agreement will be construed in accordance with the Plan and governed
by the laws of the State of Delaware, without regard to conflicts of laws
provisions. Any legal proceeding related to this Agreement will be brought in an
appropriate Illinois court, and the parties to this Agreement consent to the
exclusive jurisdiction of the court for this purpose.
5
11.3 ENTIRE AGREEMENT. This Agreement and the Plan set forth the
entire agreement and understanding of the parties to this Agreement with respect
to the grant and exercise of this Option and the administration of the Plan and
supersede all prior agreements, arrangements, plans and understandings relating
to the grant and exercise of this Option and the administration of the Plan.
11.4 AMENDMENT AND WAIVER. Other than as provided in the Plan,
this Agreement may be amended, waived, modified or canceled only by a written
instrument executed by the parties to this Agreement or, in the case of a
waiver, by the party waiving compliance.
The parties to this Agreement have executed this Agreement effective
the day and year first above written.
BIOSANTE PHARMACEUTICALS, INC.
By _____________________________________
Its _________________________________
By execution of this Agreement, OPTIONEE
the Optionee acknowledges having
received a copy of the Plan. ________________________________________
(Signature)
________________________________________
(Name and Address)
________________________________________
________________________________________
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