UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
__________________
FORM
8-K
Current
Report
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
__________________
Date of
Report (Date of earliest event reported):
June
12, 2008
BIOSANTE
PHARMACEUTICALS, INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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001-31812
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58-2301143
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(State
or Other Jurisdiction of Incorporation)
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(Commission
File Number)
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(I.R.S.
Employer Identification Number)
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111
Barclay Boulevard
Lincolnshire,
Illinois
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60069
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(847)
478-0500
(Registrant’s
Telephone Number, Including Area Code)
N/A
(Former
Name or Former Address, If Changed Since Last Report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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£
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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£
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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£
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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£
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Section
5 – Corporate Governance and Management
Item
5.02. Departure of Directors or Certain
Officers; Election of Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
(e) On
June 12, 2008, upon recommendation of the Board of Directors, the stockholders
of BioSante Pharmaceuticals, Inc. approved and adopted the BioSante
Pharmaceuticals, Inc. 2008 Stock Incentive Plan. The 2008 plan has
replaced the BioSante Pharmaceuticals, Inc. Amended and Restated 1998 Stock
Plan, which was terminated with respect to future grants upon the effectiveness
of the 2008 plan.
The major features of the 2008 plan are
summarized below. The summary below is qualified in its entirety by
reference to the full text of the 2008 plan, a copy of which is attached as
Exhibit 10.1 to this report and incorporated herein by this
reference.
As used in this report, references to
“BioSante,” “we,” “our,” “us” or “our company,” unless the context otherwise
requires, refer to BioSante Pharmaceuticals, Inc. As used in this
report, references to the “2008 plan” refer to the BioSante Pharmaceuticals,
Inc. 2008 Stock Incentive Plan and references to the “1998 plan” refer to the
BioSante Pharmaceuticals, Inc. Amended and Restated 1998 Stock
Plan.
Purpose. The
purpose of the 2008 plan is to advance the interests of our company and our
stockholders by enabling us to attract and retain qualified individuals through
opportunities for equity participation in our company, and to reward those
individuals who contribute to the achievement of our economic
objectives.
Eligibility. All
employees (including officers and directors who are also employees),
non-employee directors, consultants, advisors and independent contractors of
BioSante or any subsidiary, will be eligible to receive incentive awards under
the 2008 plan.
Shares Available for
Issuance. The maximum number of shares of our common stock
reserved for issuance under the 2008 plan is 2,000,000. None of the
shares of our common stock remaining available for grant under our 1998 stock
plan at the time of its termination carried forward for issuance under the 2008
plan. The number of shares available for issuance under the 2008 plan
is subject to increase to the extent that we issue shares or incentive awards
under the 2008 plan in connection with certain merger and acquisition
transactions, or assume any plan in a merger or acquisition
transaction. However, any available shares in an assumed plan may
only be utilized to the extent permitted under the Marketplace Rules of the
NASDAQ Stock Market.
Shares of
our common stock that are issued under the 2008 plan or that are potentially
issuable pursuant to outstanding incentive awards reduce the number of shares
remaining available. All shares so subtracted from the amount
available under the 2008 plan with respect to an incentive award that lapses,
expires, is forfeited or for any reason is terminated, unexercised or unvested
and any shares of our common stock that are subject to an incentive award that
is settled or paid in cash or any other form other than shares of our common
stock will automatically again become available for issuance under the 2008
plan. However, any shares not issued due to the exercise of an option
by a “net exercise” or the tender or attestation as to ownership of previously
acquired shares (as described below), as well as shares covered by a stock
appreciation right, to the extent exercised, and shares withheld by us to
satisfy any tax withholding obligations will not again become available for
issuance under the 2008 plan.
Grant
Limits. Under the terms of the 2008 plan no more than
2,000,000 shares of our common stock may be issued pursuant to the exercise of
incentive options and no more than 250,000 shares of our common stock may be
issued or issuable in connection with restricted stock grants, stock unit
awards, performance awards and stock bonuses.
All of
the share limitations in the 2008 plan may be adjusted to reflect changes in our
corporate structure or shares, as described below. In addition, the
limits on the number of shares that may be issued as incentive options will not
apply to certain incentive awards granted upon our assumption or substitution of
like awards in any merger or acquisition.
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 our corporate structure or shares, we
must adjust:
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the
number and kind of securities available for issuance under the 2008 plan;
and
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in
order to prevent dilution or enlargement of the rights of participants,
the number, kind and, where applicable, the exercise price of securities
subject to outstanding incentive
awards.
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Administration. The
2008 plan will be administered by the Board of Directors of BioSante or by a
committee of the Board. Any such committee will consist of at least
two members of the Board, all of whom are “non-employee directors” within the
meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended, and
who are “independent directors” within the meaning of the Marketplace Rules of
the NASDAQ Stock Market. We expect the Compensation Committee of the
Board of Directors to administer the 2008 plan, subject to certain limitations
on the Compensation Committee’s authority as described in its formal written
charter. The Board of Directors or the committee administering the
2008 plan is referred to as the “committee.” Although under the terms
of the 2008 plan, the committee may delegate its duties, power and authority
under the 2008 plan to any of our officers to the extent consistent with
applicable Delaware corporate law, except with respect to participants subject
to Section 16 of the Securities Exchange Act of 1934, we currently do not expect
the committee to do so.
The
committee has the authority to determine all provisions of incentive awards
consistent with terms of the 2008 plan, including, the eligible recipients who
will be granted one or more incentive awards under the 2008 plan, the nature and
extent of the incentive awards to be made to each participant, the time or times
when incentive awards will be granted, the duration of each incentive award, and
the restrictions and other conditions to which the payment or vesting of
incentive awards may be subject. The committee has the authority to
pay the economic value of any incentive award in the form of cash, our common
stock or any combination of both, and may amend or modify the terms of
outstanding incentive awards (except for any prohibited “re-pricing” of options,
discussed below) so long as the amended or modified terms are permitted under
the 2008 plan and any adversely affected participant has consented to the
amendment or modification.
Except in
connection with certain specified changes in our corporate structure or shares,
the committee may not, without prior approval of our stockholders, seek to
effect any re-pricing of any previously granted, “underwater” option or stock
appreciation right by:
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amending
or modifying the terms of the underwater option or stock appreciation
right to lower the exercise price;
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canceling
the underwater option or stock appreciation right and granting replacement
options or stock appreciation rights having a lower exercise price, or
other incentive awards in exchange;
or
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repurchasing
the underwater options and stock appreciation rights and granting new
incentive awards under the 2008
plan.
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For
purposes of the 2008 plan, an option or stock appreciation right is deemed to be
“underwater” at any time when the fair market value of the our common stock is
less than the exercise price.
In the
event of any reorganization, merger, consolidation, recapitalization,
liquidation, reclassification, stock dividend, stock split, combination of
shares, rights offering, extraordinary dividend or divestiture (including a spin
off) or any other similar change in corporate structure or shares; any purchase,
acquisition, sale, disposition or write-down of a significant amount of assets
or a significant business; any change in accounting principles or practices, tax
laws or other such laws or provisions affecting reported results; any uninsured
catastrophic losses or extraordinary non-recurring items as described in
Accounting Principles Board Opinion No. 30 or in management’s discussion and
analysis of financial performance appearing in our annual report to stockholders
for the applicable year; or any other similar change, in each case with respect
to our company or any other entity whose performance is relevant to the grant or
vesting of an incentive award, the committee (or, if our company is not the
surviving corporation in any such transaction, the board of directors of the
surviving corporation) may, without the consent of any affected participant,
amend or modify the vesting criteria of any outstanding incentive award that is
based in whole or in part on the financial performance of our company (or any
subsidiary or division or other subunit thereof) or such other entity so as
equitably to reflect such event, with the desired result that the criteria for
evaluating such financial performance of our company or such other entity will
be substantially the same (in the sole discretion of the committee or the board
of directors of the surviving corporation) following such event as prior to such
event; provided, however, that the amended or modified terms are permitted by
the 2008 plan as then in effect.
Types of Incentive
Awards. The 2008 plan allows us to award eligible
recipients:
• options
to purchase shares of our common stock that qualify as “incentive stock options”
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (“incentive options”);
• options
to purchase shares of our common stock that do not qualify as incentive options
(“non-statutory options”);
• rights
to receive a payment from us, in the form of shares of our common stock, cash or
a combination of both, equal to the difference between the fair market value of
one or more shares of our common stock and a specified exercise price of such
shares (“stock appreciation rights”);
• shares
of our common stock that are subject to certain forfeiture and transferability
restrictions (“restricted stock awards”);
• rights
to receive the fair market value of one or more shares of our common stock,
payable in cash, shares of our common stock, or a combination of both, the
payment, issuance, retention and/or vesting of which is subject to the
satisfaction of specified conditions, which may include achievement of specified
performance objectives (“stock unit awards” or “restricted stock
unit”);
• rights
to receive an amount of cash, a number of shares of our common stock, or a
combination of both, contingent upon achievement of specified performance
objectives during a specified period (“performance awards” or “performance
units”); and
• rights
to receive an award of shares of our common stock (“stock
bonuses”).
In the
following summary, we refer to both incentive options and non-statutory options
as “options,” and to options, stock appreciation rights, restricted stock
awards, stock unit awards or restricted stock units, performance awards or
performance units and stock bonuses as “incentive awards.”
Options. The
exercise price to be paid by a participant at the time an option is exercised
may not be less than 100 percent of the fair market value of one share of our
common stock on the date of grant (or 110 percent of the fair market value of
one share of our common stock on the date of grant of an incentive option if the
participant owns, directly or indirectly, more than 10 percent of the total
combined voting power of all classes of stock of BioSante or any parent or
subsidiary). However, in the event options are granted as a result of
our assumption or substitution of options in a merger or acquisition, the
exercise price will be the price determined by the committee pursuant to the
conversion terms applicable to the transaction. At any time while the
our common stock is listed on the NASDAQ Global Market, “fair market value”
under the 2008 plan means the closing sale price of a share at the end of the
regular trading session as reported by the NASDAQ Global Market as of the date
in question (or, if no shares were traded on such date, the next preceding day
on which there was such a trade).
The total
purchase price of the shares to be purchased upon exercise of an option will be
paid entirely in cash; provided, however, that the committee may allow exercise
payments to be made, in whole or in part, by delivery of a broker exercise
notice (pursuant to which a broker or dealer is irrevocably instructed to sell
enough shares or loan the optionee enough money to pay the exercise price and to
remit such sums to us), by tender or attestation as to ownership of shares of
our common stock that are acceptable to the committee, by a “net exercise” of
the option or by a combination of such methods. In the case of a “net
exercise” of an option, we will not require a payment of the exercise price of
the option from the participant but will reduce the number of shares of our
common stock issued upon the exercise by the largest number of whole shares
having a fair market value that does not exceed the aggregate exercise price for
the shares exercised. Any shares of our common stock tendered or
covered by an attestation will be valued at their fair market value on the
exercise date.
Options
may be exercised in whole or in installments, as determined by the committee,
and the committee may impose conditions or restrictions to the exercisability of
an option, including that the participant remain continuously employed by us for
a certain period or that the participant or us (or any subsidiary, division or
other subunit of our company) satisfy certain specified performance
objectives. An option may not become exercisable, nor remain
exercisable after 10 years from its date of grant (five years from its date of
grant in the case of an incentive option if the participant owns, directly or
indirectly, more than 10 percent of the total combined voting power of all
classes of stock of our company or any parent or subsidiary).
Stock Appreciation
Rights. A stock appreciation right is the right to receive a
payment from us, in the form of shares of our common stock, cash or a
combination of both, equal to the difference between the fair market value of
one or more shares of our common stock and a specified exercise price of such
shares. Stock appreciation rights will be subject to such terms and
conditions, if any, consistent with the other provisions of the 2008 plan, as
may be determined by the committee. The committee will have the sole
discretion to determine the form in which payment of the economic value of stock
appreciation rights will be made to a participant (i.e., cash, our common stock
or any combination thereof) or to consent to or disapprove the election by a
participant of the form of such payment.
The
exercise price of a stock appreciation right will be determined by the
committee, in its discretion, at the date of grant but may not be less than 100
percent of the fair market value of one share of our common stock on the date of
grant, except as provided below in connection with certain “tandem” grants (as
further defined below). However, in the event that stock appreciation
rights are granted as a result of our assumption or substitution of stock
appreciation rights in a merger or acquisition, the exercise price will be the
price determined by the committee pursuant to the conversion terms applicable to
the transaction. A stock appreciation right will become exercisable
at such time and in such installments as may be determined by the committee in
its sole discretion at the time of grant; provided, however, that no stock
appreciation right may be exercisable after 10 years from its date of
grant.
Stock
appreciation rights may be granted alone or in addition to other incentive
awards, or in tandem with an option, at the time of grant of the
option. A stock appreciation right granted in tandem with an option
shall cover the same number of shares of our common stock as covered by the
option (or such lesser number as the committee may determine), shall be
exercisable at such time or times and only to the extent that the related option
is exercisable, have the same term as the option and will have an exercise price
equal to the exercise price for the option. Upon the exercise of a
stock appreciation right granted in tandem with an option, the option shall be
canceled automatically to the extent of the number of shares covered by such
exercise; conversely, upon exercise of an option having a related stock
appreciation right, the stock appreciation right will be canceled automatically
to the extent of the number of shares covered by the option
exercise.
Restricted Stock
Awards. A restricted stock award is an award of our common
stock that vests at such times and in such installments as may be determined by
the committee and, until it vests, is subject to restrictions on transferability
and/or the possibility of forfeiture. The committee may impose such
restrictions or conditions to the vesting of restricted stock awards as it deems
appropriate, including that the participant remain continuously employed by us
for a certain period or that the participant or us (or any subsidiary, division
or other subunit of our company) satisfy specified performance
objectives. To enforce the restrictions, the committee may place a
legend on the stock certificates referring to such restrictions and may take
other steps to enforce the restrictions.
Unless
the committee determines otherwise, any dividends (other than regular quarterly
cash dividends) or distributions paid with respect to shares of our common stock
subject to the unvested portion of a restricted stock award will be subject to
the same restrictions as the shares to which such dividends or distributions
relate. Additionally, unless the 2008 plan provides otherwise, a
participant will have all voting, liquidation and other rights with respect to
shares of our common stock issued to the participant as a restricted stock award
upon the participant becoming the holder of record of such shares as if the
participant were a holder of record of shares of our unrestricted common
stock.
Stock Unit Award or Restricted Stock
Units. A stock unit award or restricted stock unit is a right
to receive the fair market value of one or more shares of our common stock,
payable in cash, shares of our common stock, or a combination of both, the
payment, issuance, retention and/or vesting of which is subject to the
satisfaction of specified conditions, which may include achievement of specified
performance objectives. Stock unit awards or restricted stock units
will be subject to such terms and conditions, if any, consistent with the other
provisions of the 2008 plan, as may be determined by the committee.
Performance Awards or
Units. A participant may be granted one or more performance
awards or units under the 2008 plan, and such performance awards or units will
be subject to such terms and conditions, if any, consistent with the other
provisions of the 2008 plan, as may be determined by the committee in its sole
discretion, including, but not limited to, the achievement of one or more
specified performance objectives.
Stock Bonuses. A
participant may be granted one or more stock bonuses under the 2008 plan, and
such stock bonuses will be subject to such terms and conditions, if any,
consistent with the other provisions of the 2008 plan, as may be determined by
the committee in its sole discretion, including, but not limited to, the
achievement of one or more specified performance objectives.
Change in
Control. In the event a “change in control” of our company
occurs, then, unless otherwise provided at the time of the grant of the
incentive award, all options and stock appreciation rights will become
immediately exercisable in full and will remain exercisable for the remainder of
their terms, regardless of whether the holder to whom such option and stock
appreciation rights have been granted remains in the employ or service of our
company or any subsidiary, all outstanding restricted stock awards will become
immediately fully vested and non-forfeitable; and any conditions to the payment
of stock unit awards or restricted stock units, performance awards or units and
stock bonuses will lapse.
In
addition, the committee in its sole discretion may determine that some or all
participants holding outstanding options will receive cash in an amount equal to
the excess of the fair market value of such shares immediately prior to the
effective date of such change in control over the exercise price per share of
the options (or, in the event that there is no excess, that such options will be
terminated), and that some or all participants holding performance awards or
units will receive, with respect to some or all of the shares subject
to the performance awards or units, cash in an amount equal the fair market
value of such shares immediately prior to the effective date of such change in
control.
For
purposes of the 2008 plan, a “change in control” of our company occurs
upon:
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the
sale, lease, exchange or other transfer of substantially all of the assets
of our company (in one transaction or in a series of related transaction)
to a person or entity that is not controlled, directly or indirectly, by
our company;
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the
approval by our stockholders of any plan or proposal for the liquidation
or dissolution of us;
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any
person becomes after the effective date of the 2008 plan the ‘beneficial
owner” (as defined in Rule 13d-3 under the Securities Exchange Act of
1934, as amended), directly or indirectly, of (A) 20 percent or more, but
not 50 percent or more, of the combined voting power of our outstanding
securities ordinarily having the right to vote at elections of directors,
unless the transaction resulting in such ownership has been approved in
advance by the continuity directors, or (B) 50 percent or more of the
combined voting power of our outstanding securities ordinarily having the
right to vote at elections of directors (regardless of any approval by the
continuity directors);
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a
merger or consolidation to which our company is a party if our
stockholders immediately prior to effective date of such merger or
consolidation do not have “beneficial ownership” (as defined in Rule 13d-3
under the Exchange Act) immediately following the effective date of such
merger or consolidation of securities of the surviving corporation
represent (A) more than 50 percent but less than 80 percent of the
combined voting power of the surviving corporation’s then outstanding
securities ordinarily having the right to vote at elections of directors,
unless such merger or consolidation has been approved in advance by the
continuity directors, or (B) 50 percent or less of the combined voting
power of the surviving corporation’s then outstanding securities
ordinarily having the right to vote at elections of directors (regardless
of any approval by the continuity
directors);
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the
continuity directors cease for any reason to constitute at least a
majority of the Board of Directors;
or
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any
other change in control of us of a nature that would be required to be
reported pursuant to Section 13 or 15(d) of the Exchange Act, whether or
not we are then subject to such reporting
requirements.
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Effect of Termination of Employment
or Other Services. If a participant ceases to be employed by,
or perform other services for, us, all incentive awards held by the participant
will be treated as set forth below unless provided otherwise in the agreement
evidencing the incentive award or modified by the committee in its discretion as
set forth below. Upon termination due to death, disability or retirement, all
outstanding, exercisable options and stock appreciation rights then held by the
participant will remain exercisable for a period of one year thereafter (but in
no event after the expiration date of any such option or stock appreciation
rights), all unvested restricted stock awards, all outstanding stock unit awards
or restricted stock units, performance awards or units and stock bonuses then
held by the participant will be terminated and forfeited. Upon termination for a
reason, other than death, disability or retirement, which is not also for
“cause” (as defined in the 2008 plan), all outstanding options and stock
appreciation rights then held by the participant will, to the extent exercisable
as of such termination, remain exercisable in full for a period of three months
after such termination (but in no event after the expiration date of any such
option or stock appreciation right). Also, upon such termination all
options and stock appreciation rights that are not exercisable; all unvested
restricted stock awards; and all outstanding stock unit awards or restricted
stock units , performance awards or units and stock bonuses then held by the
participant will be terminated and forfeited.
If a
participant is determined by the committee, acting in its sole discretion, to
have committed any action which would constitute cause, regardless of whether
such action or the committee’s determination occurs before or after the
termination of the participant’s employment with us or any subsidiary, all
rights of the participant under the 2008 plan and any award agreements
evidencing an incentive award then held by the participant shall terminate and
be forfeited without notice of any kind. Additionally, as applicable,
we may defer exercise, vesting, or payment of any incentive award for a period
of up to 45 days in order for the committee to make a determination as to the
existence of cause.
The
committee may at any time (including on or after the date of grant or following
termination), in connection with a participant’s termination, cause options or
stock appreciation rights held by the participant to terminate, become or
continue to become exercisable and/or remain exercisable, and restricted stock
awards, stock unit awards or restricted stock units, performance awards or units
or stock bonuses then held by the participant to, terminate, vest or become free
of restrictions and conditions to payment, as the case may be.
Dividend
Rights. Except as discussed above in connection with
restricted stock awards, no adjustment will be made in the amount of cash
payable or in the number of shares of our common stock issuable under incentive
awards denominated in or based on the value of shares of our common stock as a
result of cash dividends or distributions paid to stockholders generally at any
time prior to the issuance of shares under incentive awards.
Term; Termination;
Amendments. Unless terminated earlier, the 2008 plan will
terminate at midnight on June 11, 2018. Incentive awards outstanding
at the time the 2008 plan is terminated may continue to be exercised, earned or
become free of restriction, according to their terms. The Board may
suspend or terminate the 2008 plan or any portion of the plan at any time. In
addition to the committee’s authority to amend the 2008 plan with respect to
participants resident outside of the United States or employed by a non-U.S.
subsidiary, the Board may amend the 2008 plan from time to time in order that
incentive awards under the 2008 plan will conform to any change in applicable
laws or regulations or in any other respect that the Board may deem to be in our
best interests; provided, however, that no amendments to the 2008 plan will be
effective without stockholder approval, if it is required under Section 422 of
the Internal Revenue Code or the Marketplace Rules of the NASDAQ Stock Market,
or if the amendment seeks to increase the number of shares reserved for issuance
under the 2008 plan (other than as a result of a permitted adjustment upon
certain corporate events, such as stock splits) or to modify the prohibitions on
underwater option re-pricing discussed above. Termination, suspension or
amendment of the 2008 plan will not adversely affect any outstanding incentive
award without the consent of the affected participant, except for adjustments in
the event of changes in our capitalization or a “change in control” of our
company.
Transferability. In
general, no right or interest in any incentive award may be assigned or
transferred by a participant, except by will or the laws of descent and
distribution, or subjected to any lien or otherwise
encumbered. However, a participant is entitled to designate a
beneficiary to receive an incentive award on such participant’s death, and in
the event of such participant’s death, payment of any amounts due under the 2008
plan, will be made to, and exercise of any options or stock appreciation rights
may be made by, such beneficiary. Additionally, upon a participant’s
request, the committee may permit a participant to transfer all or a portion of
a non-statutory option, other than for value, to certain of the participant’s
family members or related family trusts, foundations or
partnerships. Permitted transferees of non-statutory options will
remain subject to all the terms and conditions of the incentive award applicable
to the participant.
Attached
as Exhibits 10.2, 10.3 and 10.4 to this report are forms of option agreements
that we expect to use in connection with the grant of stock options under the
2008 plan.
Section
9 – Financial Statements and Exhibits
Item
9.01. Financial Statements and Exhibits.
(c) Exhibits.
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Exhibit
No.
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Description
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10.1
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BioSante
Pharmaceuticals, Inc. 2008 Stock Incentive Plan
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10.2
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Form
of Incentive Stock Option Agreement between BioSante Pharmaceuticals, Inc.
and its Executive Officers Under 2008 Stock Incentive
Plan
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10.3
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Form
of Non-Statutory Stock Option Agreement between BioSante Pharmaceuticals,
Inc. and its Executive Officers Under 2008 Stock Incentive
Plan
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10.4
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Form
of Non-Statutory Stock Option Agreement between BioSante Pharmaceuticals,
Inc. and its Directors Under 2008 Stock Incentive
Plan
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
BIOSANTE
PHARMACEUTICALS, INC.
By: /s/ Phillip B.
Donenberg
Phillip
B. Donenberg
Chief
Financial Officer, Treasurer and Secretary
Dated: June 13,
2008
BIOSANTE
PHARMACEUTICALS, INC.
FORM
8-K
Exhibit
Index
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Exhibit
No.
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Description
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Method
of Filing
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10.1
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BioSante
Pharmaceuticals, Inc. 2008 Stock Incentive Plan
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Filed
herewith
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10.2
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Form
of Incentive Stock Option Agreement between BioSante Pharmaceuticals, Inc.
and its Executive Officers Under 2008 Stock Incentive Plan
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Filed
herewith
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10.3
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Form
of Non-Statutory Stock Option Agreement between BioSante Pharmaceuticals,
Inc. and its Executive Officers Under 2008 Stock Incentive
Plan
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Filed
herewith
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10.4
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Form
of Non-Statutory Stock Option Agreement between BioSante Pharmaceuticals,
Inc. and its Directors Under 2008 Stock Incentive Plan
|
Filed
herewith
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BIOSANTE
PHARMACEUTICALS, INC.
2008
STOCK INCENTIVE PLAN
1. Purpose of
Plan.
The
purpose of the BioSante Pharmaceuticals, Inc. 2008 Stock Incentive Plan (the
“Plan”) is to advance the interests of BioSante Pharmaceuticals, Inc.
(the “Company”) and its stockholders by enabling the Company and its
Subsidiaries to attract and retain qualified persons to perform services for the
Company and its Subsidiaries by providing an incentive to such individuals
through opportunities for equity participation in the Company, and by rewarding
such individuals who contribute to the achievement of the Company’s economic
objectives.
2. Definitions.
The
following terms will have the meanings set forth below, unless the context
clearly otherwise requires:
2.1 “Board” means the
Board of Directors of the Company.
2.2 “Broker Exercise
Notice” means a written notice pursuant to which a Participant, upon
exercise of an Option, irrevocably instructs a broker or dealer to sell a
sufficient number of shares or loan a sufficient amount of money to pay all or a
portion of the exercise price of the Option and/or any related withholding tax
obligations and remit such sums to the Company and directs the Company to
deliver stock certificates to be issued upon such exercise directly to such
broker or dealer or their nominee.
2.3 “Cause” means “cause”
as defined in any employment or other agreement or policy applicable to the
Participant, or if no such agreement or policy exists, will mean (i) dishonesty,
fraud, misrepresentation, embezzlement or deliberate injury or attempted injury,
in each case related to the Company or any Subsidiary, (ii) any unlawful or
criminal activity of a serious nature, (iii) any intentional and deliberate
breach of a duty or duties that, individually or in the aggregate, are material
in relation to the Participant’s overall duties, or (iv) any material breach of
any employment, service, confidentiality, non-compete or non-solicitation
agreement entered into with the Company or any Subsidiary.
2.4 “Change in Control”
means an event described in Section 14.1 of the Plan; provided, however, if
under an Incentive Award that is subject to Section 409A of the Code is
triggered by a Change in Control, the term Change in Control will mean a change
in the ownership or effective control of the Company, or in the ownership of a
substantial portion of the assets of the Company, as such term is defined in
Section 409A of the Code.
2.5 “Code” means the
Internal Revenue Code of 1986, as amended (including, when the context requires,
all regulations, interpretations and rulings issued thereunder).
2.6 “Committee” means the
group of individuals administering the Plan, as provided in Section 3 of the
Plan.
2.7 “Common Stock” means
the common stock of the Company, par value $0.0001 per share, or the number and
kind of shares of stock or other securities into which such Common Stock may be
changed in accordance with Section 4.3 of the Plan.
2.8 “Disability” means the
disability of the Participant such as would entitle the Participant to receive
disability income benefits pursuant to the long-term disability plan of the
Company or Subsidiary then covering the Participant or, if no such plan exists
or is applicable to the Participant, the permanent and total disability of the
Participant within the meaning of Section 22(e)(3) of the Code; provided,
however, if distribution of an Incentive Award subject to Section 409A of the
Code is triggered by an Eligible Recipient’s Disability, such term will mean
that the Eligible Recipient is disabled as defined by Section 409A of the Code
and the regulations and rulings issued thereunder.
2.9 “Eligible Recipients”
means (a) for the purposes of granting Incentive Stock Options, all employees
(including, without limitation, officers and directors who are also employees)
of the Company or any Subsidiary and (b) for the purposes of granting
Non-Statutory Stock Options and other Incentive Awards, all employees
(including, without limitation, officers and directors who are also employees)
of the Company or any Subsidiary and any non-employee directors, consultants,
advisors and independent contractors of the Company or any
Subsidiary
2.10 “Exchange Act” means
the Securities Exchange Act of 1934, as amended.
2.11 “Fair Market Value”
means, with respect to the Common Stock, as of any date: (i) the closing sale
price of the Common Stock at the end of the regular trading session, as reported
by The NASDAQ Stock Market, The New York Stock Exchange, The American Stock
Exchange or any national exchange on which the Common Stock is then listed or
quoted (or, if no shares were traded on such date, as of the next preceding date
on which there was such a trade); or (ii) if the Common Stock is not so listed,
admitted to unlisted trading privileges, or reported on any national exchange
or, the closing sale price as of such date at the end of the regular trading
session, as reported by OTC Bulletin Board or the Pink Sheets LLC, or other
comparable service (or, if no shares were traded or quoted on such date, as of
the next preceding date on which there was such a trade or quote); or (iii) if
the Common Stock is not so listed or reported, such price as the Committee
determines in good faith, and consistent with the definition of “fair market
value” under Section 409A of the Code.
2.12 “Incentive Award”
means an Option, Stock Appreciation Right, Restricted Stock Award, Stock Unit
Award, Performance Award or Stock Bonus granted to an Eligible Recipient
pursuant to the Plan.
2.13 “Incentive Stock
Option” means a right to purchase shares of Common Stock granted to an
Eligible Recipient pursuant to Section 6 of the Plan that qualifies as an
“incentive stock option” within the meaning of Section 422 of the
Code.
2.14 “Non-Statutory Stock
Option” means a right to purchase shares of Common Stock granted to an
Eligible Recipient pursuant to Section 6 of the Plan that does not qualify as an
Incentive Stock Option.
2.15 “Option” means an
Incentive Stock Option or a Non-Statutory Stock Option.
2.16 “Participant” means an
Eligible Recipient who receives one or more Incentive Awards under the
Plan.
2.17 “Performance Award”
means a right granted to an Eligible Recipient pursuant to Section 10 of the
Plan to receive an amount of cash, a number of shares of Common Stock, or a
combination of both, contingent upon achievement of specified performance
objectives during a specified period. A Performance Award is also
commonly referred to as a “performance unit.”
2.18 “Previously Acquired
Shares” means shares of Common Stock that are already owned by the
Participant or, with respect to any Incentive Award, that are to be issued to
the Participant upon the grant, exercise or vesting of such Incentive
Award.
2.19 “Restricted Stock
Award” means an award of shares of Common Stock granted to an Eligible
Recipient pursuant to Section 8 of the Plan that are subject to restrictions on
transferability and/or a risk of forfeiture.
2.20 “Retirement” means
termination of employment or service at age 55 or older and completion of at
least ten years of continuous service.
2.21 “Securities Act” means
the Securities Act of 1933, as amended.
2.22 “Stock Appreciation
Right” means a right granted to an Eligible Recipient pursuant to Section
7 of the Plan to receive a payment from the Company, in the form of shares of
Common Stock, cash or a combination of both, equal to the difference between the
Fair Market Value of one or more shares of Common Stock and a specified exercise
price of such shares.
2.23 “Stock Bonus” means an
award of shares of Common Stock granted to an Eligible Recipient pursuant to
Section 11 of the Plan.
2.24 “Stock Unit Award”
means a right granted to an Eligible Recipient pursuant to Section 9 of the Plan
to receive the Fair Market Value of one or more shares of Common Stock, payable
in cash, shares of Common Stock, or a combination of both, the payment,
issuance, retention and/or vesting of which is subject to the satisfaction of
specified conditions, which may include achievement of specified performance
objectives. A Stock Unit Award when payable in shares of Common Stock
is also commonly referred to as a “restricted stock unit.”
2.25 “Subsidiary” means any
entity that is directly or indirectly controlled by the Company or any entity in
which the Company has a significant equity interest, as determined by the
Committee, provided the Company has a “controlling interest” in the Subsidiary
as defined in Treas. Reg. Sec. 1.409A-1(b)(5)(iii)(E)(1).
2.26 “Tax Date” means the
date any withholding tax obligation arises under the Code for a Participant with
respect to an Incentive Award.
3. Plan
Administration.
3.1 The
Committee. The Plan will be administered by the Board or by a
committee of the Board. So long as the Company has a class of its
equity securities registered under Section 12 of the Exchange Act, any committee
administering the Plan will consist solely of two or more members of the Board
who are “non-employee directors” within the meaning of Rule 16b-3 under the
Exchange Act and who are “independent” as required by the listing standards of
The NASDAQ Stock Market (or other applicable exchange or market on which the
Company’s Common Stock may be traded or quoted). Such a committee, if
established, will act by majority approval of the members (but may also take
action by the written consent of all of the members of such committee), and a
majority of the members of such a committee will constitute a
quorum. As used in the Plan, “Committee” will refer to the
Board or to such a committee, if established. To the extent
consistent with applicable corporate law of the Company’s jurisdiction of
incorporation, the Committee may delegate to any officers of the Company the
duties, power and authority of the Committee under the Plan pursuant to such
conditions or limitations as the Committee may establish; provided, however,
that only the Committee may exercise such duties, power and authority with
respect to Eligible Recipients who are subject to Section 16 of the Exchange
Act. The Committee may exercise its duties, power and authority under
the Plan in its sole and absolute discretion without the consent of any
Participant or other party, unless the Plan specifically provides
otherwise. Each determination, interpretation or other action made or
taken by the Committee pursuant to the provisions of the Plan will be final,
conclusive and binding for all purposes and on all persons, and no member of the
Committee will be liable for any action or determination made in good faith with
respect to the Plan or any Incentive Award granted under the Plan.
3.2 Authority of the
Committee.
(a) In
accordance with and subject to the provisions of the Plan, the Committee will
have the authority to determine all provisions of Incentive Awards as the
Committee may deem necessary or desirable and as consistent with the terms of
the Plan, including, without limitation, the following: (i) the
Eligible Recipients to be selected as Participants; (ii) the nature and extent
of the Incentive Awards to be made to each Participant (including the number of
shares of Common Stock to be subject to each Incentive Award, any exercise
price, the manner in which Incentive Awards will vest or become exercisable and
whether Incentive Awards will be granted in tandem with other Incentive Awards)
and the form of written agreement, if any, evidencing such Incentive Award;
(iii) the time or times when Incentive Awards will be granted; (iv) the duration
of each Incentive Award; and (v) the restrictions and other conditions to which
the payment or vesting of Incentive Awards may be subject. In
addition, the Committee will have the authority under the Plan in its sole
discretion to pay the economic value of any Incentive Award in the form of cash,
Common Stock or any combination of both.
(b) Subject
to Section 3.2(d) of the Plan, the Committee will have the authority under the
Plan to amend or modify the terms of any outstanding Incentive Award in any
manner, including, without limitation, the authority to modify the number of
shares or other terms and conditions of an Incentive Award, extend the term of
an Incentive Award, accelerate the exercisability or vesting or otherwise
terminate any restrictions relating to an Incentive Award, accept the surrender
of any outstanding Incentive Award or, to the extent not previously exercised or
vested, authorize the grant of new Incentive Awards in substitution for
surrendered Incentive Awards; provided, however that the amended or modified
terms are permitted by the Plan as then in effect and that any Participant
adversely affected by such amended or modified terms has consented to such
amendment or modification.
(c) In the
event of (i) any reorganization, merger, consolidation, recapitalization,
liquidation, reclassification, stock dividend, stock split, combination of
shares, rights offering, extraordinary dividend or divestiture (including a
spin-off) or any other similar change in corporate structure or shares; (ii) any
purchase, acquisition, sale, disposition or write-down of a significant amount
of assets or a significant business; (iii) any change in accounting principles
or practices, tax laws or other such laws or provisions affecting reported
results; (iv) any uninsured catastrophic losses or extraordinary non-recurring
items as described in Accounting Principles Board Opinion No. 30 or in
management’s discussion and analysis of financial performance appearing in the
Company’s annual report to stockholders for the applicable year; or (v) any
other similar change, in each case with respect to the Company or any other
entity whose performance is relevant to the grant or vesting of an Incentive
Award, the Committee (or, if the Company is not the surviving corporation in any
such transaction, the board of directors of the surviving corporation) may,
without the consent of any affected Participant, amend or modify the vesting
criteria (including any performance objectives) of any outstanding Incentive
Award that is based in whole or in part on the financial performance of the
Company (or any Subsidiary or division or other subunit thereof) or such other
entity so as equitably to reflect such event, with the desired result that the
criteria for evaluating such financial performance of the Company or such other
entity will be substantially the same (in the sole discretion of the Committee
or the board of directors of the surviving corporation) following such event as
prior to such event; provided, however, that the amended or modified terms are
permitted by the Plan as then in effect, including the limitations in Section
3.2(a) and 3.2(b).
(d) Notwithstanding
any other provision of this Plan other than Section 4.3, the Committee may not,
without prior approval of the Company’s stockholders, seek to effect any
re-pricing of any previously granted, “underwater” Option or Stock Appreciation
Right by: (i) amending or modifying the terms of the Option or Stock
Appreciation Right to lower the exercise price; (ii) canceling the underwater
Option or Stock Appreciation Right and granting either (A) replacement Options
or Stock Appreciation Rights having a lower exercise price; (B) Restricted Stock
Awards; or (C) Stock Unit Awards, Performance Awards or Stock Bonuses in
exchange; or (iii) repurchasing the underwater Options or Stock Appreciation
Rights and granting new Incentive Awards under this Plan. For
purposes of this Section 3.2(d), Options and Stock Appreciation Rights will be
deemed to be “underwater” at any time when the Fair Market Value of the Common
Stock is less than the exercise price of the Option or Stock Appreciation
Right.
(e) In
addition to the authority of the Committee under Section 3.2(b) of the Plan and
notwithstanding any other provision of the Plan, the Committee may, in its sole
discretion, amend the terms of the Plan or Incentive Awards with respect to
Participants resident outside of the United States or employed by a non-U.S.
Subsidiary in order to comply with local legal requirements, to otherwise
protect the Company’s or Subsidiary’s interests, or to meet objectives of the
Plan, and may, where appropriate, establish one or more sub-plans (including the
adoption of any required rules and regulations) for the purposes of qualifying
for preferred tax treatment under foreign tax laws. The Committee
shall have no authority, however, to take action pursuant to this Section 3.2(e)
of the Plan: (i) to reserve shares or grant Incentive Awards in excess of the
limitations provided in Section 4.1 of the Plan; (ii) to effect any re-pricing
in violation of Section 3.2(d) of the Plan; (iii) to grant Options or Stock
Appreciation Rights having an exercise price in violation of Section 6.2 or 7.2
of the Plan, as the case may be; or (iv) for which stockholder approval would
then be required pursuant to Section 422 of the Code or the rules of The NASDAQ
Stock Market (or other applicable exchange or market on which the Company’s
Common Stock may be traded or quoted).
4. Shares Available for
Issuance.
4.1 Maximum Number of Shares
Available; Certain Restrictions on Awards. Subject to
adjustment as provided in Section 4.3 of the Plan, the maximum number of shares
of Common Stock that will be available for issuance under the Plan will be the
sum of:
(a) 2,000,000;
(b) the
number of shares issued or Incentive Awards granted under the Plan in connection
with the settlement, assumption or substitution of outstanding awards or
obligations to grant future awards as a condition of the Company and/or any
Subsidiary(ies) acquiring, merging or consolidating with another entity;
and
(c) the
number of shares that are unallocated and available for grant under a stock plan
assumed by the Company or any Subsidiary(ies) in connection with the merger,
consolidation, or acquisition of another entity by the Company and/or any of its
Subsidiaries, based on the applicable exchange ratio and other transaction
terms, but only to the extent that such shares may be utilized by the Company or
its Subsidiaries following the transaction pursuant to the rules and regulations
of The NASDAQ Stock Market (or other applicable exchange or market on which the
Company’s Common Stock may be traded or quoted).
The
shares available for issuance under the Plan may, at the election of the
Committee, be either treasury shares or shares authorized but unissued, and, if
treasury shares are used, all references in the Plan to the issuance of shares
will, for corporate law purposes, be deemed to mean the transfer of shares from
treasury.
Notwithstanding
any other provisions of the Plan to the contrary, (i) no more than 2,000,000
shares of Common Stock may be issued pursuant to the exercise of Incentive Stock
Options granted under the Plan; and (ii) no more than 250,000 shares of Common
Stock may be issued or issuable under the Plan in connection with the grant of
Incentive Awards, other than Options or Stock Appreciation
Rights. All of the foregoing share limits are subject, in each case,
to adjustment as provided in Section 4.3 of the Plan. Incentive Stock
Options issued as a result of the Company’s assumption or substitution of like
awards issued by any acquired, merged or consolidated entity pursuant to
applicable provisions of the Code will not count towards the limit in clause
(i).
4.2 Accounting for Incentive
Awards. Shares of Common Stock that are issued under the Plan
or that are potentially issuable pursuant to outstanding Incentive Awards will
be applied to reduce the maximum number of shares of Common Stock remaining
available for issuance under the Plan. All shares so subtracted from
the amount available under the Plan with respect to an Incentive Award that
lapses, expires, is forfeited (including issued shares forfeited under a
Restricted Stock Award) or for any reason is terminated unexercised or unvested
or is settled or paid in cash or any form other than shares of Common Stock will
automatically again become available for issuance under the Plan; provided,
however, that (i) any shares which would have been issued upon any exercise of
an Option but for the fact that the exercise price was paid by a “net exercise”
pursuant to Section 6.4(b) of the Plan or the tender or attestation as to
ownership of Previously Acquired Shares pursuant to Section 6.4(a) of the Plan
will not again become available for issuance under the Plan; (ii) shares covered
by a Stock Appreciation Right, to the extent exercised, will not again become
available for issuance under the Plan; and (iii) shares withheld by the Company
to satisfy any tax withholding obligation will not again become available for
issuance under the Plan.
4.3 Adjustments to Shares and
Incentive Awards. 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) will make appropriate adjustment (which
determination will be conclusive) as to the number and kind of securities or
other property (including cash) available for issuance or payment under the Plan
and, in order to prevent dilution or enlargement of the rights of Participants,
(a) the number and kind of securities or other property (including cash) subject
to outstanding Incentive Awards, and (b) the exercise price of outstanding
Options and Stock Appreciation Rights.
5. Participation.
Participants
in the Plan will be those Eligible Recipients who, in the judgment of the
Committee, have contributed, are contributing or are expected to contribute to
the achievement of economic objectives of the Company or its
Subsidiaries. Eligible Recipients may be granted from time to time
one or more Incentive Awards, singly or in combination or in tandem with other
Incentive Awards, as may be determined by the Committee in its sole
discretion. Incentive Awards will be deemed to be granted as of the
date specified in the grant resolution of the Committee, which date will be the
date of any related agreement with the Participant.
6. Options.
6.1 Grant. An
Eligible Recipient may be granted one or more Options under the Plan, and such
Options will be subject to such terms and conditions, consistent with the other
provisions of the Plan, as may be determined by the Committee in its sole
discretion. The Committee may designate whether an Option is to be
considered an Incentive Stock Option or a Non-Statutory Stock
Option. To the extent that any Incentive Stock Option (or portion
thereof) granted under the Plan ceases for any reason to qualify as an
“incentive stock option” for purposes of Section 422 of the Code, such Incentive
Stock Option (or portion thereof) will continue to be outstanding for purposes
of the Plan but will thereafter be deemed to be a Non-Statutory Stock
Option.
6.2 Exercise
Price. The per share price to be paid by a Participant upon
exercise of an Option will be determined by the Committee in its discretion at
the time of the Option grant, provided that such price will not be less than
100% of the Fair Market Value of one share of Common Stock on the date of grant
(or 110% of the Fair Market Value of one share of Common Stock on the date of
grant of an Incentive Stock Option if, at the time the Incentive Stock Option is
granted, the Participant owns, directly or indirectly, more than 10% of the
total combined voting power of all classes of stock of the Company or any parent
or subsidiary corporation of the Company). Notwithstanding the
foregoing, to the extent that Options are granted under the Plan as a result of
the Company’s assumption or substitution of options issued by any acquired,
merged or consolidated entity, the exercise price for such Options shall be the
price determined by the Committee pursuant to the conversion terms applicable to
the transaction.
6.3 Exercisability and
Duration. An Option will become exercisable at such times and
in such installments and upon such terms and conditions as may be determined by
the Committee in its sole discretion at the time of grant (including without
limitation (i) the achievement of one or more specified performance objectives;
and/or that (ii) the Participant remain in the continuous employ or service of
the Company or a Subsidiary for a certain period); provided, however, that no
Option may be exercisable after ten (10) years from its date of grant (five
years from its date of grant in the case of an Incentive Stock Option if, at the
time the Incentive Stock Option is granted, the Participant owns, directly or
indirectly, more than 10% of the total combined voting power of all classes of
stock of the Company or any parent or subsidiary corporation of the
Company).
6.4 Payment of Exercise
Price.
(a) The total
purchase price of the shares to be purchased upon exercise of an Option will be
paid entirely in cash (including check, bank draft or money order); provided,
however, that the Committee, in its sole discretion and upon terms and
conditions established by the Committee, may allow such payments to be made, in
whole or in part, by (i) tender of a Broker Exercise Notice; (ii) by tender, or
attestation as to ownership, of Previously Acquired Shares that are acceptable
to the Committee; (iii) by a “net exercise” of the Option (as further described
in paragraph (b), below); or (iv) by a combination of such
methods.
(b) In the
case of a “net exercise” of an Option, the Company will not require a payment of
the exercise price of the Option from the Participant but will reduce the number
of shares of Common Stock issued upon the exercise by the largest number of
whole shares that has a Fair Market Value on the exercise date that does not
exceed the aggregate exercise price for the shares exercised under this method.
Shares of Common Stock will no longer be outstanding under an Option (and will
therefore not thereafter be exercisable) following the exercise of such Option
to the extent of (i) shares used to pay the exercise price of an Option under
the “net exercise,” (ii) shares actually delivered to the Participant as a
result of such exercise and (iii) any shares withheld for purposes of tax
withholding pursuant to Section 13.1 of the Plan.
(c) Previously
Acquired Shares tendered or covered by an attestation as payment of an Option
exercise price will be valued at their Fair Market Value on the exercise
date.
6.5 Manner of
Exercise. An Option may be exercised by a Participant in whole
or in part from time to time, subject to the conditions contained in the Plan
and in the agreement evidencing such Option, by delivery in person, by facsimile
or electronic transmission or through the mail of written notice of exercise to
the Company at its principal executive office in Lincolnshire, Illinois and by
paying in full the total exercise price for the shares of Common Stock to be
purchased in accordance with Section 6.4 of the Plan.
7. Stock Appreciation
Rights.
7.1 Grant. An
Eligible Recipient may be granted one or more Stock Appreciation Rights under
the Plan, and such Stock Appreciation Rights will be subject to such terms and
conditions, consistent with the other provisions of the Plan, as may be
determined by the Committee in its sole discretion. The Committee
will have the sole discretion to determine the form in which payment of the
economic value of Stock Appreciation Rights will be made to a Participant (i.e.,
cash, shares of Common Stock or any combination thereof) or to consent to or
disapprove the election by a Participant of the form of such
payment.
7.2 Exercise
Price. The exercise price of a Stock Appreciation Right will
be determined by the Committee, in its discretion, at the date of grant but may
not be less than 100% of the Fair Market Value of one share of Common Stock on
the date of grant. Notwithstanding the foregoing, to the extent that
Stock Appreciation Rights are granted under the Plan as a result of the
Company’s assumption or substitution of stock appreciation rights issued by any
acquired, merged or consolidated entity, the exercise price for such Stock
Appreciation Rights shall be the price determined by the Committee pursuant to
the conversion terms applicable to the transaction.
7.3 Exercisability and
Duration. A Stock Appreciation Right will become exercisable
at such time and in such installments as may be determined by the Committee in
its sole discretion at the time of grant; provided, however, that no Stock
Appreciation Right may be exercisable after ten (10) years from its date of
grant. A Stock Appreciation Right will be exercised by giving notice
in the same manner as for Options, as set forth in Section 6.5 of the
Plan.
7.4 Grants in Tandem with
Options. Stock Appreciation Rights may be granted alone or in
addition to other Incentive Awards, or in tandem with an Option, at the time of
grant of the Option. A Stock Appreciation Right granted in tandem
with an Option shall cover the same number of shares of Common Stock as covered
by the Option (or such lesser number as the Committee may determine), shall be
exercisable at such time or times and only to the extent that the related Option
is exercisable, have the same term as the Option and shall have an exercise
price equal to the exercise price for the Option. Upon the exercise
of a Stock Appreciation Right granted in tandem with an Option, the Option shall
be canceled automatically to the extent of the number of shares covered by such
exercise; conversely, upon exercise of an Option having a related Stock
Appreciation Right, the Stock Appreciation Right shall be canceled automatically
to the extent of the number of shares covered by the Option
exercise.
8. Restricted Stock
Awards.
8.1 Grant. An
Eligible Recipient may be granted one or more Restricted Stock Awards under the
Plan, and such Restricted Stock Awards will be subject to such terms and
conditions, consistent with the other provisions of the Plan, as may be
determined by the Committee in its sole discretion. The Committee may
impose such restrictions or conditions, not inconsistent with the provisions of
the Plan, to the vesting of such Restricted Stock Awards as it deems
appropriate, including, without limitation, (i) the achievement of one or more
specified performance objectives; and/or that (ii) the Participant remain in the
continuous employ or service of the Company or a Subsidiary for a certain
period.
8.2 Rights as a Stockholder;
Transferability. Except as provided in Sections 8.1, 8.3, 8.4
and 15.3 of the Plan, a Participant will have all voting, dividend, liquidation
and other rights with respect to shares of Common Stock issued to the
Participant as a Restricted Stock Award under this Section 8 upon the
Participant becoming the holder of record of such shares as if such Participant
were a holder of record of shares of unrestricted Common Stock.
8.3 Dividends and
Distributions. Unless the Committee determines otherwise in
its sole discretion (either in the agreement evidencing the Restricted Stock
Award at the time of grant or at any time after the grant of the Restricted
Stock Award), any dividends or distributions (other than regular quarterly cash
dividends) paid with respect to shares of Common Stock subject to the unvested
portion of a Restricted Stock Award will be subject to the same restrictions as
the shares to which such dividends or distributions relate. The
Committee will determine in its sole discretion whether any interest will be
paid on such dividends or distributions.
8.4 Enforcement of
Restrictions. To enforce the restrictions referred to in this
Section 8, the Committee may place a legend on the stock certificates referring
to such restrictions and may require the Participant, until the restrictions
have lapsed, to keep the stock certificates, together with duly endorsed stock
powers, in the custody of the Company or its transfer agent, or to maintain
evidence of stock ownership, together with duly endorsed stock powers, in a
certificateless book-entry stock account with the Company’s transfer
agent.
9. Stock Unit
Awards.
An
Eligible Recipient may be granted one or more Stock Unit Awards under the
Plan, and such Stock Unit Awards will be subject to such terms and
conditions, consistent with the other provisions of the Plan, as may be
determined by the Committee in its sole discretion. The Committee may
impose such restrictions or conditions, not inconsistent with the provisions of
the Plan, to the payment, issuance, retention and/or vesting of such
Stock Unit Awards as it deems appropriate, including, without limitation,
(i) the achievement of one or more specified performance objectives; and/or that
(ii) the Participant remain in the continuous employ or service of the Company
or a Subsidiary for a certain period.
10. Performance
Awards.
An
Eligible Recipient may be granted one or more Performance Awards under the Plan,
and such Performance Awards will be subject to such terms and conditions, if
any, consistent with the other provisions of the Plan, as may be determined by
the Committee in its sole discretion, including, but not limited to, the
achievement of one or more specified performance objectives.
11. Stock
Bonuses.
An
Eligible Recipient may be granted one or more Stock Bonuses under the Plan, and
such Stock Bonuses will be subject to such terms and conditions, if any,
consistent with the other provisions of the Plan, as may be determined by the
Committee in its sole discretion, including, but not limited to, the
achievement of one or more specified performance objectives.
12. Effect of Termination of
Employment or Other Service. The following provisions shall
apply upon termination of a Participant’s employment or other service with the
Company and all Subsidiaries, except to the extent that the Committee provides
otherwise in an agreement evidencing an Incentive Award at the time of grant or
determines pursuant to Section 12.3 of the Plan.
12.1 Termination Due to Death,
Disability or Retirement. In the event a Participant’s
employment or other service with the Company and all Subsidiaries is terminated
by reason of death, Disability or Retirement:
(a) All
outstanding Options and Stock Appreciation Rights then held by the Participant
will, to the extent exercisable as of such termination, remain exercisable in
full for a period of one year after such termination (but in no event after the
expiration date of any such Option or Stock Appreciation
Right). Options and Stock Appreciation Rights not exercisable as of
such termination will be forfeited and terminate.
(b) All
Restricted Stock Awards then held by the Participant that have not vested as of
such termination will be terminated and forfeited; and
(c) All
outstanding but unpaid Stock Unit Awards, Performance Awards and Stock Bonuses
then held by the Participant will be terminated and forfeited.
12.2 Termination for Reasons
Other than Death, Disability or Retirement. Subject to Section 12.4 of
the Plan, in the event a Participant’s employment or other service is terminated
with the Company and all Subsidiaries for any reason other than death,
Disability or Retirement, or a Participant is in the employ or service of a
Subsidiary and the Subsidiary ceases to be a Subsidiary of the Company (unless
the Participant continues in the employ or service of the Company or another
Subsidiary):
(a) All
outstanding Options and Stock Appreciation Rights then held by the Participant
will, to the extent exercisable as of such termination, remain exercisable in
full for a period of three months after such termination (but in no event after
the expiration date of any such Option or Stock Appreciation
Right). Options and Stock Appreciation Rights not exercisable as of
such termination will be forfeited and terminate;
(b) All
Restricted Stock Awards then held by the Participant that have not vested as of
such termination will be terminated and forfeited; and
(c) All
outstanding but unpaid Stock Unit Awards, Performance Awards and Stock Bonuses
then held by the Participant will be terminated and forfeited.
12.3 Modification of Rights Upon
Termination. Notwithstanding the other provisions of this
Section 12, upon a Participant’s termination of employment or other service with
the Company and all Subsidiaries, the Committee may, in its sole discretion
(which may be exercised at any time on or after the date of grant, including
following such termination), except as provided in clause (ii), below, cause
Options or Stock Appreciation Rights (or any part thereof) then held by such
Participant to terminate, become or continue to become exercisable and/or remain
exercisable following such termination of employment or service, and Restricted
Stock Awards, Stock Unit Awards, Performance Awards or Stock Bonuses then held
by such Participant to terminate, vest or become free of restrictions and
conditions to payment, as the case may be, following such termination of
employment or service, in each case in the manner determined by the Committee;
provided, however, that any such action adversely affecting any outstanding
Incentive Award will not be effective without the consent of the affected
Participant (subject to the right of the Committee to take whatever action it
deems appropriate under Sections 3.2(c), 4.3 and 14 of the Plan).
12.4 Effects of Actions
Constituting Cause. Notwithstanding anything in the Plan to
the contrary, in the event that a Participant is determined by the Committee,
acting in its sole discretion, to have committed any action which would
constitute Cause as defined in Section 2.3 of the Plan, irrespective of whether
such action or the Committee’s determination occurs before or after termination
of such Participant’s employment with the Company or any Subsidiary, all rights
of the Participant under the Plan and any agreements evidencing an Incentive
Award then held by the Participant shall terminate and be forfeited without
notice of any kind. The Company may defer the exercise of any Option,
the vesting of any Restricted Stock Award or the payment of any Stock Unit
Award, Performance Award or Stock Bonus for a period of up to forty-five (45)
days in order for the Committee to make any determination as to the existence of
Cause.
12.5 Determination of Termination
of Employment or Other Service.
(a) The
change in a Participant’s status from that of an employee of the Company or any
Subsidiary to that of a non-employee consultant, director or advisor of the
Company or any Subsidiary will, for purposes of the Plan, be deemed to result in
a termination of such Participant’s employment with the Company and its
Subsidiaries, unless the Committee otherwise determines in its sole
discretion.
(b) The
change in a Participant’s status from that of a non-employee consultant,
director or advisor of the Company or any Subsidiary to that of an employee of
the Company or any Subsidiary will not, for purposes of the Plan, be deemed to
result in a termination of such Participant’s service as a non-employee
consultant, director or advisor with the Company and its Subsidiaries, and such
Participant will thereafter be deemed to be an employee of the Company or its
Subsidiaries until such Participant’s employment is terminated, in which event
such Participant will be governed by the provisions of this Plan relating to
termination of employment or service (subject to paragraph (a),
above).
(c) Unless
the Committee otherwise determines in its sole discretion, a Participant’s
employment or other service will, for purposes of the Plan, be deemed to have
terminated on the date recorded on the personnel or other records of the Company
or the Subsidiary for which the Participant provides employment or other
service, as determined by the Committee in its sole discretion based upon such
records.
(d) Notwithstanding
the foregoing, if payment of an Incentive Award that is subject to Section 409A
of the Code is triggered by a termination of a Participant’s employment or other
service, such termination must also constitute a “separation from service”
within the meaning of Section 409A of the Code, and any change in employment
status that constitutes a “separation from service” under Section 409A of the
Code shall be treated as a termination of employment or service, as the case may
be.
12.6 Breach of Employment,
Consulting, Confidentiality or Non-Compete
Agreements. Notwithstanding anything in the Plan to the
contrary and in addition to the rights of the Committee under Section 12.4 of
the Plan, in the event that a Participant materially breaches the terms of any
employment, consulting, confidentiality or non-compete agreement entered into
with the Company or any Subsidiary (including an employment, consulting,
confidentiality or non-compete agreement made in connection with the grant of an
Incentive Award), whether such breach occurs before or after termination of such
Participant’s employment or other service with the Company or any Subsidiary,
the Committee in its sole discretion may require the Participant to surrender
shares of Common Stock received, and to disgorge any profits (however defined by
the Committee), made or realized by the Participant in connection with any
Incentive Awards or any shares issued upon the exercise or vesting of any
Incentive Awards.
13. Payment of Withholding
Taxes.
13.1 General
Rules. The Company is entitled to (a) withhold and deduct from
future wages of the Participant (or from other amounts that may be due and owing
to the Participant from the Company or a Subsidiary), or make other arrangements
for the collection of, all amounts the Company reasonably determines are
necessary to satisfy any and all federal, foreign, state and local withholding
and employment-related tax requirements attributable to an Incentive Award,
including, without limitation, the grant, exercise or vesting of, or payment of
dividends with respect to, an Incentive Award or a disqualifying disposition of
stock received upon exercise of an Incentive Stock Option; (b) withhold cash
paid or payable or shares of Common Stock from the shares issued or otherwise
issuable to the Participant in connection with an Incentive Award; or (c)
require the Participant promptly to remit the amount of such withholding to the
Company before taking any action, including issuing any shares of Common Stock,
with respect to an Incentive Award. Shares of Common Stock issued or
otherwise issuable to the Participant in connection with an Incentive Award that
gives rise to the tax withholding obligation that are withheld for purposes of
satisfying the Participant’s withholding or employment-related tax obligation
will be valued at their Fair Market Value on the Tax Date.
13.2 Special
Rules. The Committee may, in its sole discretion and upon
terms and conditions established by the Committee, permit or require a
Participant to satisfy, in whole or in part, any withholding or
employment-related tax obligation described in Section 13.1 of the Plan by
electing to tender, or by attestation as to ownership of, Previously Acquired
Shares, by delivery of a Broker Exercise Notice or a combination of such
methods. For purposes of satisfying a Participant’s withholding or
employment-related tax obligation, Previously Acquired Shares tendered or
covered by an attestation will be valued at their Fair Market Value on the Tax
Date.
14. Change in
Control.
14.1 A “Change in Control”
shall be deemed to have occurred if the event set forth in any one of the
following paragraphs shall have occurred:
(a) the sale,
lease, exchange or other transfer, directly or indirectly, of substantially all
of the assets of the Company (in one transaction or in a series of related
transactions) to a person or entity that is not controlled by the
Company;
(b) the
approval by the stockholders of the Company of any plan or proposal for the
liquidation or dissolution of the Company;
(c) any
person becomes after the effective date of the Plan the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of (A)
20% or more, but not 50% or more, of the combined voting power of the Company’s
outstanding securities ordinarily having the right to vote at elections of
directors, unless the transaction resulting in such ownership has been approved
in advance by the Continuity Directors, or (B) 50% or more of the combined
voting power of the Company’s outstanding securities ordinarily having the right
to vote at elections of directors (regardless of any approval by the Continuity
Directors);
(d) a merger
or consolidation to which the Company is a party if the stockholders of the
Company immediately prior to effective date of such merger or consolidation have
“beneficial ownership” (as defined in Rule 13d-3 under the Exchange Act),
immediately following the effective date of such merger or consolidation, of
securities of the surviving corporation representing (A) more than 50%, but less
than 80%, of the combined voting power of the surviving corporation’s then
outstanding securities ordinarily having the right to vote at elections of
directors, unless such merger or consolidation has been approved in advance by
the Continuity Directors (as defined below), or (B) 50% or less of the
combined voting power of the surviving corporation’s then outstanding securities
ordinarily having the right to vote at elections of directors (regardless of any
approval by the Continuity Directors);
(e) the
Continuity Directors cease for any reason to constitute at least a majority of
the Board; or
(f) any other
change in control of the Company of a nature that would be required to be
reported pursuant to Section 13 or 15(d) of the Exchange Act, whether or not the
Company is then subject to such reporting requirements.
For
purposes of this Section 14, “Continuity Directors”
of the Company will mean any individuals who are members of the Board on the
Effective Date and any individual who subsequently becomes a member of the Board
whose election, or nomination for election by the Company’s stockholders, was
approved by a vote of at least a majority of the Continuity Directors (either by
specific vote or by approval of the Company’s proxy statement in which such
individual is named as a nominee for director without objection to such
nomination).
14.2 Acceleration of
Vesting. Without limiting the authority of the Committee under
Sections 3.2 and 4.3 of the Plan, if a Change in Control of the Company occurs,
then, unless otherwise provided by the Committee in its sole discretion either
in the agreement evidencing an Incentive Award at the time of grant or at any
time after the grant of an Incentive Award: (a) all Options and Stock
Appreciation Rights will become immediately exercisable in full and will remain
exercisable in accordance with their terms; (b) all Restricted Stock Awards will
become immediately fully vested and non-forfeitable; and (c) any conditions to
the payment of Stock Unit Awards, Performance Awards and Stock Bonuses will
lapse.
14.3 Cash
Payment. If a Change in Control of the Company occurs, then
the Committee, if approved by the Committee in its sole discretion either in an
agreement evidencing an Incentive Award at the time of grant or at any time
after the grant of an Incentive Award, and without the consent of any
Participant affected thereby, may determine that: (i) some or all Participants
holding outstanding Options will receive, with respect to some or all of the
shares of Common Stock subject to such Options, as of the effective date of any
such Change in Control of the Company, cash in an amount equal to the excess of
the Fair Market Value of such shares immediately prior to the effective date of
such Change in Control of the Company over the exercise price per share of such
Options (or, in the event that there is no excess, that such Options will be
terminated); and (ii) some or all Participants holding Performance Awards will
receive, with respect to some or all of the shares of Common Stock subject to
such Performance Awards, as of the effective date of any such Change in Control
of the Company, cash in an amount equal the Fair Market Value of such shares
immediately prior to the effective date of such Change in Control.
15. Rights of Eligible
Recipients and Participants; Transferability.
15.1 Employment or
Service. Nothing in the Plan will interfere with or limit in
any way the right of the Company or any Subsidiary to terminate the employment
or service of any Eligible Recipient or Participant at any time, nor confer upon
any Eligible Recipient or Participant any right to continue in the employ or
service of the Company or any Subsidiary.
15.2 Rights as a Stockholder;
Dividends. As a holder of Incentive Awards (other than
Restricted Stock Awards), a Participant will have no rights as a stockholder
unless and until such Incentive Awards are exercised for, or paid in the form
of, shares of Common Stock and the Participant becomes the holder of record of
such shares. Except as otherwise provided in the Plan or otherwise
provided by the Committee, no adjustment will be made in the amount of cash
payable or in the number of shares of Common Stock issuable under Incentive
Awards denominated in or based on the value of shares of Common Stock as a
result of cash dividends or distributions paid to holders of Common Stock prior
to the payment of, or issuance of shares of Common Stock under, such Incentive
Awards.
15.3 Restrictions on
Transfer.
(a) Except
pursuant to testamentary will or the laws of descent and distribution or as
otherwise expressly permitted by subsections (b) and (c) below, no right or
interest of any Participant in an Incentive Award prior to the exercise (in the
case of Options) or vesting or issuance (in the case of Restricted Stock Awards
and Performance Awards) of such Incentive Award will be assignable or
transferable, or subjected to any lien, during the lifetime of the Participant,
either voluntarily or involuntarily, directly or indirectly, by operation of law
or otherwise.
(b) A
Participant will be entitled to designate a beneficiary to receive an Incentive
Award upon such Participant’s death, and in the event of such Participant’s
death, payment of any amounts due under the Plan will be made to, and exercise
of any Options or Stock Appreciation Rights (to the extent permitted pursuant to
Section 12 of the Plan) may be made by, such beneficiary. If a
deceased Participant has failed to designate a beneficiary, or if a beneficiary
designated by the Participant fails to survive the Participant, payment of any
amounts due under the Plan will be made to, and exercise of any Options or Stock
Appreciation Rights (to the extent permitted pursuant to Section 12 of the Plan)
may be made by, the Participant’s legal representatives, heirs and
legatees. If a deceased Participant has designated a beneficiary and
such beneficiary survives the Participant but dies before complete payment of
all amounts due under the Plan or exercise of all exercisable Options or Stock
Appreciation Rights, then such payments will be made to, and the exercise of
such Options or Stock Appreciation Rights may be made by, the legal
representatives, heirs and legatees of the beneficiary.
(c) Upon a
Participant’s request, the Committee may, in its sole discretion, permit a
transfer of all or a portion of a Non-Statutory Stock Option, other than for
value, to such Participant’s child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law,
any person sharing such Participant’s household (other than a tenant or
employee), a trust in which any of the foregoing have more than fifty percent of
the beneficial interests, a foundation in which any of the foregoing (or the
Participant) control the management of assets, and any other entity in which
these persons (or the Participant) own more than fifty percent of the voting
interests. Any permitted transferee will remain subject to all the
terms and conditions applicable to the Participant prior to the
transfer. A permitted transfer may be conditioned upon such
requirements as the Committee may, in its sole discretion, determine, including,
but not limited to execution and/or delivery of appropriate acknowledgements,
opinion of counsel, or other documents by the transferee.
15.4 Non-Exclusivity of the
Plan. Nothing contained in the Plan is intended to modify or
rescind any previously approved compensation plans or programs of the Company or
create any limitations on the power or authority of the Board to adopt such
additional or other compensation arrangements as the Board may deem necessary or
desirable.
16. Securities Law and Other
Restrictions.
Notwithstanding
any other provision of the Plan or any agreements entered into pursuant to the
Plan, the Company will not be required to issue any shares of Common Stock under
this Plan, and a Participant may not sell, assign, transfer or otherwise dispose
of shares of Common Stock issued pursuant to Incentive Awards granted under the
Plan, unless (a) there is in effect with respect to such shares a registration
statement under the Securities Act and any applicable securities laws of a state
or foreign jurisdiction or an exemption from such registration under the
Securities Act and applicable state or foreign securities laws, and (b) there
has been obtained any other consent, approval or permit from any other U.S. or
foreign 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
shares of Common Stock, as may be deemed necessary or advisable by the Company
in order to comply with such securities law or other restrictions.
17. Compliance with Section
409A.
It is
intended that the Plan and all Incentive Awards hereunder be administered in a
manner that will comply with the requirements of Section 409A of the Code, or
the requirements of an exception to Section 409A of the Code. The
Committee is authorized to adopt rules or regulations deemed necessary or
appropriate to qualify for an exception from or to comply with the requirements
of Section 409A of the Code (including any transition or grandfather rules
relating thereto). Notwithstanding anything in this Section 17 to the
contrary, with respect to any Incentive Award subject to Section 409A of the
Code, no amendment to or payment under such Incentive Award will be made unless
and only to the extent permitted under Section 409A of the Code.
18. Plan Amendment, Modification
and Termination.
The Board
may suspend or terminate the Plan or any portion thereof at any
time. In addition to the authority of the Committee to amend the Plan
under Section 3.2(e) of the Plan, the Board may amend the Plan from time to time
in such respects as the Board may deem advisable in order that Incentive Awards
under the Plan will conform to any change in applicable laws or regulations or
in any other respect the Board may deem to be in the best interests of the
Company; provided, however, that no such amendments to the Plan will be
effective without approval of the Company’s stockholders if: (i) stockholder
approval of the amendment is then required pursuant to Section 422 of the Code
or the rules of The NASDAQ Stock Market (or other applicable exchange or market
on which the Company’s Common Stock may be traded or quoted); or (ii) such
amendment seeks to increase the number of shares authorized for issuance
hereunder (other than by virtue of an adjustment under Section 4.3 of the Plan)
or to modify Section 3.2(d) of the Plan. No termination, suspension
or amendment of the Plan may adversely affect any outstanding Incentive Award
without the consent of the affected Participant; provided, however, that this
sentence will not impair the right of the Committee to take whatever action it
deems appropriate under Sections 3.2(c), 4.3 and 14 of the Plan.
19. Effective Date and Duration
of the Plan.
The Plan
will be effective as of June 12, 2008, or such later date on
which the Plan is initially approved by the Company’s stockholders (the
“Effective Date”). The Plan will terminate at midnight on the day
before the tenth (10th) anniversary of the Effective Date, and may be terminated
prior to such time by Board action. No Incentive Award will be
granted after termination of the Plan. Incentive Awards outstanding
upon termination of the Plan may continue to be exercised, earned or become free
of restrictions, according to their terms.
20. Miscellaneous.
20.1 Fractional
Shares. No fractional shares of Common Stock will be issued or
delivered under the Plan or any Award. The Committee will determine whether
cash, other Awards or other property will be issued or paid.
20.2 Governing
Law. Except to the extent expressly provided herein or in
connection with other matters of corporate governance and authority (all of
which shall be governed by the laws of the Company’s jurisdiction of
incorporation), the validity, construction, interpretation, administration and
effect of the Plan and any rules, regulations and actions relating to the Plan
will be governed by and construed exclusively in accordance with the laws of the
State of Illinois, notwithstanding the conflicts of laws principles of any
jurisdictions.
20.3 Successors and
Assigns. The Plan will be binding upon and inure to the
benefit of the successors and permitted assigns of the Company and the
Participants.
20.4 Construction. Wherever
possible, each provision of the Plan and any agreement evidencing an Incentive
Award granted under the Plan will be interpreted so that it is valid under the
applicable law. If any provision of the Plan or any agreement
evidencing an Incentive Award granted under the Plan is to any extent invalid
under the applicable law, that provision will still be effective to the extent
it remains valid. The remainder of the Plan and the Incentive Award
agreement also will continue to be valid, and the entire Plan and Incentive
Award agreement will continue to be valid in other jurisdictions.
FORM
OF INCENTIVE STOCK OPTION AGREEMENT
THIS INCENTIVE STOCK OPTION AGREEMENT
is entered into and effective as of this ____ day of ____________,
______ (the “Date of Grant”), by and between BioSante Pharmaceuticals, Inc. (the
“Company”) and _________________ (the
“Optionee”).
A. The
Company has adopted the BioSante Pharmaceuticals, Inc. 2008 Stock Incentive Plan
(the “Plan”) authorizing the Board of Directors (the “Board”) 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, $0.0001 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 9 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 $______, which
represents 100% of the Fair Market Value of a share of Common Stock on the Date
of Grant, as determined in accordance with the Plan.
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 [immediately/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:
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.] 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. In the event the Optionee’s
employment with the Company and all Subsidiaries is terminated by reason of
death, Disability or Retirement, this Option will remain exercisable, to the
extent exercisable as of the date of such termination, for a period of one year
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).
(c) Breach of Employment,
Consulting, Confidentiality or Non-Compete
Agreements. Notwithstanding anything in this Agreement to the
contrary and in addition to the rights of the Committee under Section 12.4 of
the Plan, in the event that the Optionee materially breaches the terms of any
employment, consulting, confidentiality or non-compete agreement entered into
with the Company or any Subsidiary (including an employment, consulting,
confidentiality or non-compete agreement made in connection with the grant of
the Option), 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 require the Optionee to surrender shares of Common Stock
received, and to disgorge any profits (however defined by the Committee), made
or realized by the Optionee in connection with this Option or any shares issued
upon the exercise or vesting of this Option.
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. In addition,
if a Change in Control of the Company occurs, the Committee, in its sole
discretion and without the consent of the Optionee, may determine that the
Optionee will receive, with respect to some or all of the Option Shares, as of
the effective date of any such Change in Control of the Company, cash in an
amount equal to the excess of the Fair Market Value (as defined in the Plan) of
such Option Shares immediately prior to the effective date of such Change in
Control of the Company over the option exercise price per share of this Option
(or, in the event that there is no excess, that this Option will be
terminated).
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, 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 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 certificated or uncertificated (“book entry”)
shares. In the event that the Option is being exercised, as provided
by resolutions of the Committee and Section 4.2 below, by tender of a Broker
Exercise Notice, the Company will deliver such shares directly to the Optionee’s
broker or dealer or their nominee.
4.2 Payment.
(a) 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 check, bank
draft or money order); provided, however, that the Committee, in its sole
discretion and upon terms and conditions established by the Committee, may allow
such payments to be made, in whole or in part, by (i) tender of a Broker
Exercise Notice; (ii) by tender, or attestation as to ownership, of Previously
Acquired Shares that are acceptable to the Committee; (iii) by a “net exercise”
of the Option (as described below); or (iv) by a
combination of such methods.
(b) 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.
(c) In the
case of a “net exercise” of an Option, the Company will not require a payment of
the exercise price of the Option from the Optionee but will reduce the number of
shares of Common Stock issued upon the exercise by the largest number of whole
shares that has a Fair Market Value on the exercise date that does not exceed
the aggregate exercise price for the shares exercised under this
method.
(d) Shares of
Common Stock will no longer be outstanding under this Option (and will therefore
not thereafter be exercisable) following the exercise of such Option to the
extent of (i) shares used to pay the exercise price of an Option under the “net
exercise,” (ii) shares actually delivered to the Optionee as a result of such
exercise and (iii) any shares withheld for purposes of tax
withholding.
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
Stockholder. The Optionee will have no rights as a stockholder
of the Company 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.
6. 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 a Subsidiary), or
make other arrangements for the collection of, all amounts the Company
reasonably determines are necessary to satisfy any and all federal, foreign,
state and local withholding and employment-related tax requirements attributable
to the Option, including, without limitation, the grant, exercise or vesting of,
this Option or a disqualifying disposition of any Option Shares; (b) withhold
cash paid or payable or shares of Common Stock from the shares issued or
otherwise issuable to the Optionee in connection with this Option; or (c)
require the Optionee promptly to remit the amount of such withholding to the
Company before taking any action, including issuing any shares of Common Stock,
with respect to this Option. Shares of Common Stock issued or
otherwise issuable to the Optionee in connection with this Option that gives
rise to the tax withholding obligation that are withheld for purposes of
satisfying the Optionee’s withholding or employment-related tax obligation will
be valued at their Fair Market Value on the Tax Date.
7. 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.
8. Stock 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 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.
9. Incentive Stock Option
Limitations.
9.1 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.
9.2 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 death or 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.
9.3 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
9.2 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.
10. Miscellaneous.
10.1 Binding
Effect. This Agreement will be binding upon the heirs,
executors, administrators and successors of the parties to this
Agreement.
10.2 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 Illinois, 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.
10.3 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.
10.4 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.
10.5 Construction. Wherever
possible, each provision of this Agreement will be interpreted so that it is
valid under the applicable law. If any provision of this Agreement is
to any extent invalid under the applicable law, that provision will still be
effective to the extent it remains valid. The remainder of this
Agreement also will continue to be valid, and the entire Agreement will continue
to be valid in other jurisdictions.
10.6 Counterparts. For
convenience of the parties hereto, this Agreement may be executed in any number
of counterparts, each such counterpart to be deemed an original instrument, and
all such counterparts together to constitute the same agreement.
[Remainder
of page intentionally left blank]
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)
|
|
|
|
|
FORM
OF NON-STATUTORY STOCK OPTION AGREEMENT
THIS NON-STATUTORY STOCK OPTION
AGREEMENT is entered into and effective as of this ____ day of
____________, ______ (the “Date of Grant”), by and between BioSante
Pharmaceuticals, Inc. (the “Company”) and _________________
(the “Optionee”).
A. The
Company has adopted the BioSante Pharmaceuticals, Inc. 2008 Stock Incentive Plan
(the “Plan”) authorizing the Board of Directors (the “Board”) 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 non-statutory stock options to
employees (including, without limitation, officers and directors who are also
employees) of the Company or any Subsidiary, and any non-employee directors,
consultants, advisors and independent contractors of the Company or any
Subsidiary (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, $0.0001 par value (the “Common Stock”), according to the terms and
subject to the conditions hereinafter set forth and as set forth in the
Plan. The Option is not 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 $______, which
represents 100% of the Fair Market Value of a share of Common Stock on the Date
of Grant, as determined in accordance with the Plan.
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 [immediately/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:
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.] 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 or
Other Service.
(a) Termination Due to Death,
Disability or Retirement. In the event the Optionee’s
employment or other service with the Company and all Subsidiaries is terminated
by reason of death, Disability or Retirement, this Option will remain
exercisable, to the extent exercisable as of the date of such termination, for a
period of one year 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 or other service 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 or performs services to a Subsidiary and the
Subsidiary ceases to be a Subsidiary of the Company (unless the Optionee
continues in the employ of or performs services to 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).
(c) Breach of Employment,
Consulting, Confidentiality or Non-Compete
Agreements. Notwithstanding anything in this Agreement to the
contrary and in addition to the rights of the Committee under Section 12.4 of
the Plan, in the event that the Optionee materially breaches the terms of any
employment, consulting, confidentiality or non-compete agreement entered into
with the Company or any Subsidiary (including an employment, consulting,
confidentiality or non-compete agreement made in connection with the grant of
the Option), whether such breach occurs before or after termination of the
Optionee’s employment or other service with the Company or any Subsidiary, the
Committee in its sole discretion may require the Optionee to surrender shares of
Common Stock received, and to disgorge any profits (however defined by the
Committee), made or realized by the Optionee in connection with this Option or
any shares issued upon the exercise or vesting of this Option.
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. In addition,
if a Change in Control of the Company occurs, the Committee, in its sole
discretion and without the consent of the Optionee, may determine that the
Optionee will receive, with respect to some or all of the Option Shares, as of
the effective date of any such Change in Control of the Company, cash in an
amount equal to the excess of the Fair Market Value (as defined in the Plan) of
such Option Shares immediately prior to the effective date of such Change in
Control of the Company over the option exercise price per share of this Option
(or, in the event that there is no excess, that this Option will be
terminated).
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, 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 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 certificated or uncertificated (“book entry”)
shares. In the event that the Option is being exercised, as provided
by resolutions of the Committee and Section 4.2 below, by tender of a Broker
Exercise Notice, the Company will deliver such shares directly to the Optionee’s
broker or dealer or their nominee.
4.2 Payment.
(a) 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 check, bank
draft or money order); provided, however, that the Committee, in its sole
discretion and upon terms and conditions established by the Committee, may allow
such payments to be made, in whole or in part, by (i) tender of a Broker
Exercise Notice; (ii) by tender, or attestation as to ownership, of Previously
Acquired Shares that are acceptable to the Committee; (iii) by a “net exercise”
of the Option (as described below); or (iv) by a
combination of such methods.
(b) 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.
(c) In the
case of a “net exercise” of an Option, the Company will not require a payment of
the exercise price of the Option from the Optionee but will reduce the number of
shares of Common Stock issued upon the exercise by the largest number of whole
shares that has a Fair Market Value on the exercise date that does not exceed
the aggregate exercise price for the shares exercised under this
method.
(d) Shares of
Common Stock will no longer be outstanding under this Option (and will therefore
not thereafter be exercisable) following the exercise of such Option to the
extent of (i) shares used to pay the exercise price of an Option under the “net
exercise,” (ii) shares actually delivered to the Optionee as a result of such
exercise and (iii) any shares withheld for purposes of tax
withholding.
5. Rights of Optionee;
Transferability.
5.1 Employment or
Service. Nothing in this Agreement will interfere with or
limit in any way the right of the Company or any Subsidiary to terminate the
employment or service of the Optionee at any time, nor confer upon the Optionee
any right to continue in the employ of or provide services to 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
Stockholder. The Optionee will have no rights as a stockholder
of the Company 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.
6. 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 a Subsidiary), or
make other arrangements for the collection of, all amounts the Company
reasonably determines are necessary to satisfy any and all federal, foreign,
state and local withholding and employment-related tax requirements attributable
to the Option, including, without limitation, the grant, exercise or vesting of,
this Option or a disqualifying disposition of any Option Shares; (b) withhold
cash paid or payable or shares of Common Stock from the shares issued or
otherwise issuable to the Optionee in connection with this Option; or (c)
require the Optionee promptly to remit the amount of such withholding to the
Company before taking any action, including issuing any shares of Common Stock,
with respect to this Option. Shares of Common Stock issued or
otherwise issuable to the Optionee in connection with this Option that gives
rise to the tax withholding obligation that are withheld for purposes of
satisfying the Optionee’s withholding or employment-related tax obligation will
be valued at their Fair Market Value on the Tax Date.
7. 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.
8. Stock 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 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.
9. Miscellaneous.
9.1 Binding
Effect. This Agreement will be binding upon the heirs,
executors, administrators and successors of the parties to this
Agreement.
9.2 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 Illinois, 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.
9.3 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.
9.4 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.
9.5 Construction. Wherever
possible, each provision of this Agreement will be interpreted so that it is
valid under the applicable law. If any provision of this Agreement is
to any extent invalid under the applicable law, that provision will still be
effective to the extent it remains valid. The remainder of this
Agreement also will continue to be valid, and the entire Agreement will continue
to be valid in other jurisdictions.
9.6 Counterparts. For
convenience of the parties hereto, this Agreement may be executed in any number
of counterparts, each such counterpart to be deemed an original instrument, and
all such counterparts together to constitute the same agreement.
[Remainder
of page intentionally left blank]
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)
|
|
|
|
|
FORM
OF NON-STATUTORY STOCK OPTION AGREEMENT
(Non-Employee
Director)
THIS NON-STATUTORY STOCK OPTION
AGREEMENT is entered into and effective as of this ____ day of
____________, ______ (the “Date of Grant”), by and between BioSante
Pharmaceuticals, Inc. (the “Company”) and _________________
(the “Optionee”).
A. The
Company has adopted the BioSante Pharmaceuticals, Inc. 2008 Stock Incentive Plan
(the “Plan”) authorizing the Board of Directors (the “Board”) 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 non-statutory stock options to, among
other individuals, non-employee directors of the Company (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, $0.0001 par value (the “Common Stock”), according to the terms and
subject to the conditions hereinafter set forth and as set forth in the
Plan. The Option is not 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 $______, which
represents 100% of the Fair Market Value of a share of Common Stock on the Date
of Grant, as determined in accordance with the Plan.
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 full on the one-year anniversary of the Date of
Grant/in four annual installments 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:
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.] 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 Service as a
Director.
(a) Termination Due to Death,
Disability or Retirement. In the event the Optionee’s service
as a director of the Company is terminated by reason of death, Disability or
Retirement, this Option will remain exercisable, to the extent exercisable as of
the date of such termination, for a period of one year 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 service as a director of the Company is terminated for any reason
other than death, Disability or Retirement, 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 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).
(c) Breach of Consulting,
Confidentiality or Non-Compete Agreements. Notwithstanding
anything in this Agreement to the contrary and in addition to the rights of the
Committee under Section 12.4 of the Plan, in the event that the Optionee
materially breaches the terms of any consulting, confidentiality or non-compete
agreement entered into with the Company or any Subsidiary (including a
consulting, confidentiality or non-compete agreement made in connection with the
grant of the Option), whether such breach occurs before or after termination of
the Optionee’s service with the Company or any Subsidiary, the Committee in its
sole discretion may require the Optionee to surrender shares of Common Stock
received, and to disgorge any profits (however defined by the Committee), made
or realized by the Optionee in connection with this Option or any shares issued
upon the exercise or vesting of this Option.
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. In addition,
if a Change in Control of the Company occurs, the Committee, in its sole
discretion and without the consent of the Optionee, may determine that the
Optionee will receive, with respect to some or all of the Option Shares, as of
the effective date of any such Change in Control of the Company, cash in an
amount equal to the excess of the Fair Market Value (as defined in the Plan) of
such Option Shares immediately prior to the effective date of such Change in
Control of the Company over the option exercise price per share of this Option
(or, in the event that there is no excess, that this Option will be
terminated).
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, 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 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 certificated or uncertificated (“book entry”)
shares. In the event that the Option is being exercised, as provided
by resolutions of the Committee and Section 4.2 below, by tender of a Broker
Exercise Notice, the Company will deliver such shares directly to the Optionee’s
broker or dealer or their nominee.
4.2 Payment.
(a) 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 check, bank
draft or money order); provided, however, that the Committee, in its sole
discretion and upon terms and conditions established by the Committee, may allow
such payments to be made, in whole or in part, by (i) tender of a Broker
Exercise Notice; (ii) by tender, or attestation as to ownership, of Previously
Acquired Shares that are acceptable to the Committee; (iii) by a “net exercise”
of the Option (as described below); or (iv) by a
combination of such methods.
(b) 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.
(c) In the
case of a “net exercise” of an Option, the Company will not require a payment of
the exercise price of the Option from the Optionee but will reduce the number of
shares of Common Stock issued upon the exercise by the largest number of whole
shares that has a Fair Market Value on the exercise date that does not exceed
the aggregate exercise price for the shares exercised under this
method.
(d) Shares of
Common Stock will no longer be outstanding under this Option (and will therefore
not thereafter be exercisable) following the exercise of such Option to the
extent of (i) shares used to pay the exercise price of an Option under the “net
exercise,” (ii) shares actually delivered to the Optionee as a result of such
exercise and (iii) any shares withheld for purposes of tax
withholding.
5. Rights of Optionee;
Transferability.
5.1 Service. Nothing
in this Agreement will interfere with or limit in any way the right of the
Company or any Subsidiary to terminate the service of the Optionee as a director
of the Company at any time, nor confer upon the Optionee any right to provide
services to 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
Stockholder. The Optionee will have no rights as a stockholder
of the Company unless and until all conditions to the effective exercise of this
Option (including, without limitation, the conditions set forth in Section 4 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.
6. 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.
7. Stock 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 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.
8. Miscellaneous.
8.1 Binding
Effect. This Agreement will be binding upon the heirs,
executors, administrators and successors of the parties to this
Agreement.
8.2 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 Illinois, 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.
8.3 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.
8.4 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.
8.5 Construction. Wherever
possible, each provision of this Agreement will be interpreted so that it is
valid under the applicable law. If any provision of this Agreement is
to any extent invalid under the applicable law, that provision will still be
effective to the extent it remains valid. The remainder of this
Agreement also will continue to be valid, and the entire Agreement will continue
to be valid in other jurisdictions.
8.6 Counterparts. For
convenience of the parties hereto, this Agreement may be executed in any number
of counterparts, each such counterpart to be deemed an original instrument, and
all such counterparts together to constitute the same agreement.
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The parties to this Agreement have
executed this Agreement effective the day and year first above
written.
BIOSANTE PHARMACEUTICALS,
INC.
By
Its
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By
execution of this Agreement,
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OPTIONEE
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the
Optionee acknowledges having
received
a copy of the
Plan.
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(Signature)
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(Name
and Address)
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