Form of Director Option Agreement
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS NON-QUALIFIED STOCK OPTION AGREEMENT (the Agreement) entered into as of July 1, 2019 (the Grant Date) between GelTech Solutions, Inc. (the Company) and [______________] (the Optionee).
WHEREAS, by action taken by the Board of Directors (the Board) it has adopted the 2017 Equity Incentive Plan (the Plan); and
WHEREAS, pursuant to the Plan, it has been determined that in order to enhance the ability of the Company to attract and retain qualified employees, consultants and directors, the Company has granted the Optionee the right to purchase the common stock of the Company pursuant to stock options.
NOW THEREFORE, in consideration of the mutual covenants and promises hereafter set forth and for other good and valuable consideration, receipt of which is acknowledged, the parties hereto agree as follows:
Grant of Non-Qualified Options. The Company irrevocably granted to the right and option to purchase all or any part of [____________] shares of authorized but unissued or treasury common stock of the Company (the Options) on the terms and conditions herein set forth. This Agreement replaces any stock option agreement or offer letter previously provided to the Optionee, if any, with respect to these Options. The Optionee acknowledges receipt of a copy of the Plan, as amended. The Optionee has read and understands the terms and provisions thereof, and accepts the Options subject to all of the terms and conditions of the Plan and this Agreement. Capitalized terms used but not defined herein shall have the meaning ascribed to them in the Plan.
Price. The exercise price of the Options is $__________ per share.
Vesting - When Exercisable.
The Options shall vest on June 30, 2020, subject to the Optionees Continous Service on the vesting date.
Subject to Sections 3(c) and 4 of this Agreement, the Options may be exercised until 6:00 p.m. New York time for 10 years from the Grant Date (the Expiration Date).
Notwithstanding any other provision of this Agreement, at the discretion of the Board or the Compensation Committee, all Options will be immediately forfeited if any of the following events occur:
The Continuous Service of the Optionee is terminated for Cause;
The Optionee purchases or sells securities of the Company in violation of the Companys insider trading guidelines then in effect;
The Optionee breaches any duty of confidentiality including that required by the Companys insider trading guidelines then in effect; or
The Optionee fails to assign any invention, technology, or related intellectual property rights to the Company if such assignment is a condition of any agreement between the Company and the Optionee.
Termination of Relationship.
If the Optionees Continuous Service terminates for any reason (other than death, Disability or removal or termination for Cause), the Optionee may exercise all vested Options at any time within 12 months following such termination, subject to Section 3(c) above.
If the Optionees Continuous Service terminates as a result of the Optionees death, the Optionees estate or any Transferee shall have the right to exercise the Optionees vested Options within the time provided in the Plan, subject to Section 3(c) above. For the purpose of this Agreement, Transferee shall mean a person to whom such shares are transferred by will or by the laws of descent and distribution.
If the Optionees Continuous Service terminates as a result of the Optionees Disability, the Optionee shall have the right to exercise the Optionees vested options within the time provided in the Plan, subject to Section 3(c) above.
If the Optionee is removed or terminated for Cause, the Options (whether vested or unvested) shall immediately terminate and cease to be exercisable.
Notwithstanding anything contained in this Section 4, the Options may not be exercised after the Expiration Date.
For purposes of this Section 4 Company shall include subsidiaries and/or affiliates of the Company.
Profits on the Sale of Certain Shares; Redemption. If any of the events specified in Section 3(c) of this Agreement occur within one year following the termination of the Continuous Service (the date of termination is the Termination Date) (or such longer period required by any written agreement), all profits earned from the sale of the Companys securities, including the sale of shares of common stock underlying the Options, during the two-year period commencing one year prior to the Termination Date shall be forfeited and immediately paid by the Optionee to the Company. Further, in such event, the Company may at its option redeem shares of common stock acquired upon exercise of this Option by payment of the exercise price to the Optionee. To the extent that another written agreement with the Company extends the events in Section 3(c) beyond one year following the Termination Date, the two-year period shall be extended by an equal number of days. The Companys rights under this Section 5 do not lapse one year from the Termination Date but are a contract right subject to any appropriate statutory limitation period.
Method of Exercise. The Options shall be exercisable by a written notice which shall:
state the election to exercise the Options, the number of shares to be exercised, the person in whose name the stock certificate or certificates for such shares of common stock is to be registered, address and social security number of such person (or if more than one, the names, addresses and social security numbers of such persons);
if applicable, contain such representations and agreements as to the holders investment intent with respect to such shares of common stock as set forth in Section 11 hereof;
be signed by the person or persons entitled to exercise the Options and, if the Options are being exercised by any person or persons other than the Optionee, be accompanied by proof, satisfactory to counsel for the Company, of the right of such person or persons to exercise the Options;
be accompanied by full payment of the exercise price by tender to the Company of an amount equal to the exercise price multiplied by the number of underlying shares being purchased either in cash, by wire transfer, or by certified check or bank cashiers check, payable to the order of the Company; and
be accompanied by payment of any amount that the Company, in its sole discretion, deems necessary to comply with any federal, state or local withholding requirements for income and employment tax purposes. If the Optionee fails to make such payment in a timely manner, the Company may: (i) decline to permit exercise of the Options or (ii) withhold and set-off against compensation and any other amounts payable to the Optionee the amount of such required payment. Such withholding may be in the shares underlying the Options at the sole discretion of the Company.
The certificate or certificates for shares of common stock as to which the Options shall be exercised shall be registered in the name of the person or persons exercising the Options.
Sale of Shares Acquired Upon Exercise of Options. If the Optionee is an Officer or a Director of the Company, any shares of the Companys common stock acquired pursuant to the Options cannot be sold by the Optionee until at least six months elapse from the Grant Date except in case of death or Disability or if the grant was exempt from the short-swing profit provisions of Section 16(b).
Anti-Dilution Provisions. The Options shall have the anti-dilution rights set forth in the Plan.
Necessity to Become Holder of Record. Neither the Optionee, the Optionees estate, nor any Transferee shall have any rights as a shareholder with respect to any of the shares underlying the Options until such person shall have become the holder of record of such shares. No cash dividends or cash distributions, ordinary or extraordinary, shall be provided to the holder if the record date is prior to the date on which such person became the holder of record thereof.
Tax Liability and Withholding. Notwithstanding any action the Company takes with respect to any or all income tax, social insurance, payroll tax, or other tax-related withholding (Tax-Related Items), the ultimate liability for all Tax-Related Items is and remains the Optionees responsibility and the Company: (a) makes no representations or undertakings regarding the treatment of any Tax-Related Items in connection with the grant, vesting, or exercise of the Option or the subsequent sale of any shares acquired on exercise; and (b) does not commit to structure the Option to reduce or eliminate the Optionees liability for Tax-Related Items.
Conditions to Exercise of Options. If a Registration Statement on Form S-8 (or any other successor form) is not effective as to the shares of common stock issuable upon exercise of the Options, the remainder of this Section 11 is applicable as to federal law. In order to enable the Company to comply with the Securities Act of 1933 (the Securities Act) and relevant state law, the Company may require the Optionee, the Optionees estate, or any Transferee as a condition of the exercising of the Options granted hereunder, to give written assurance satisfactory to the Company that the shares underlying the Options are being acquired for such persons own account, for investment only, with no view to the distribution of same, and that any subsequent resale of any such shares either shall be made pursuant to a registration statement under the Securities Act and applicable state law which has become effective and is current with regard to the shares being sold, or shall be pursuant to an exemption from registration under the Securities Act and applicable state law.
The Options are subject to the requirement that, if at any time the Board shall determine, in its discretion, that the listing, registration, or qualification of the shares of common stock underlying the Options upon any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body, is necessary as a condition of, or in connection with the issue or purchase of the shares underlying the Options, the Options may not be exercised in whole or in part unless such listing, registration, qualification, consent or approval shall have been effected.
Transfer. No transfer of the Options by the Optionee by will or by the laws of descent and distribution shall be effective to bind the Company unless the Company shall have been furnished with written notice thereof and a copy of the letters testamentary or such other evidence as the Board may deem necessary to establish the authority of the estate and the acceptance by the Transferee or Transferees of the terms and conditions of the Options.
Duties of the Company. The Company will at all times during the term of the Options:
Reserve and keep available for issue such number of shares of its authorized and unissued common stock as will be sufficient to satisfy the requirements of this Agreement;
Pay all original issue taxes with respect to the issuance of shares pursuant hereto and all other fees and expenses necessarily incurred by the Company in connection therewith;
Use its best efforts to comply with all laws and regulations which, in the opinion of counsel for the Company, shall be applicable thereto.
Parties Bound by Plan. The Plan and each determination, interpretation or other action made or taken pursuant to the provisions of the Plan shall be final and shall be binding and conclusive for all purposes on the Company and the Optionee and the Optionees respective successors in interest.
Severability. In the event any parts of this Agreement are found to be void, the remaining provisions of this Agreement shall nevertheless be binding with the same effect as though the void parts were deleted.
Arbitration. Any controversy, dispute or claim arising out of or relating to this Agreement, or its interpretation, application, implementation, breach or enforcement which the parties are unable to resolve by mutual agreement, shall be settled by submission by either party of the controversy, claim or dispute to binding arbitration in
Palm Beach County, Florida (unless the parties agree in writing to a different location), before a single arbitrator in accordance with the rules of the American Arbitration Association then in effect. The decision and award made by the arbitrator shall be final, binding and conclusive on all parties hereto for all purposes, and judgment may be entered thereon in any court having jurisdiction thereof.
Benefit. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their legal representatives, successors and assigns.
Notices and Addresses. All notices, offers, acceptance and any other acts under this Agreement (except payment) shall be in writing, and shall be sufficiently given if delivered to the addressees in person, by FedEx or similar receipted delivery, or email (followed by receipted delivery) as follows:
To the Optionee at the address on the signature page
of this Agreement
GelTech Solutions, Inc.
1460 Park Lane South, Suite 1
Jupiter, FL 33458
Attention: Michael Hull
or to such other address as either of them, by notice to the other may designate from time to time.
Attorneys Fees. In the event that there is any controversy or claim arising out of or relating to this Agreement, or to the interpretation, breach or enforcement thereof, and any action or proceeding is commenced to enforce the provisions of this Agreement, the prevailing party shall be entitled to a reasonable attorneys fee, costs and expenses.
Governing Law. This Agreement and any dispute, disagreement, or issue of construction or interpretation arising hereunder whether relating to its execution, its validity, the obligations provided herein or performance shall be governed or interpreted according to the laws of the State of Delaware without regard to choice of law considerations.
Oral Evidence. This Agreement constitutes the entire Agreement between the parties and supersedes all prior oral and written agreements between the parties hereto with respect to the subject matter hereof. Neither this Agreement nor any provision hereof may be changed, waived, discharged or terminated orally, except by a statement in writing signed by the party or parties against whom enforcement or the change, waiver discharge or termination is sought.
Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. The execution of this Agreement may be by actual, PDF, electronic or facsimile signature.
Section or Paragraph Headings. Section headings herein have been inserted for reference only and shall not be deemed to limit or otherwise affect, in any matter, or be deemed to interpret in whole or in part any of the terms or provisions of this Agreement.
The Optionee agrees that, in order to ensure compliance with the restrictions set forth in the Plan and this Agreement, the Company may issue appropriate stop transfer instructions to its duly authorized transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.
The Company shall not be required (i) to transfer on its books any shares of the Companys common stock that have been sold or otherwise transferred in violation of any of the provisions of the Plan or the Agreement or (ii) to treat the owner of such shares of common stock or to accord the right to vote or pay dividends to any purchaser or other Transferee to whom such shares of common stock shall have been so transferred.
[Signature Page to Follow]
IN WITNESS WHEREOF the parties hereto have set their hand and seals the day and year first above written.
GELTECH SOLUTIONS, INC.
Chief Financial Officer
Address of the Optionee:
NOTICE OF EXERCISE
Attention _________, _______________
Facsimile: (____) _____-______
Please be advised that I hereby elect to exercise my option to purchase shares of ___________, pursuant to the Stock Option Agreement dated __________________.
Number of Shares to Be Purchased:
Multiplied by: Purchase Price Per Share
Total Purchase Price
Please check the payment method below:
Enclosed is a check for the total purchase price above.
Wire transfer sent on _____________, 20__.
Please contact me as soon as possible to discuss the possible payment of withholding taxes and any other documents we may require.
Name of Option Holder (Please Print): ________________________________
Address of Option Holder
Telephone Number of Option Holder:
Social Security Number of Option Holder:
If the certificate is to be issued to person other than the Option Holder, please provide the following for such person:
(Social Security Number)
In connection with the issuance of the Common Stock, if the Common Stock may not be immediately publicly sold, I hereby represent to the Company that I am acquiring the Common Stock for my own account for investment and not with a view to, or for resale in connection with, a distribution of the shares within the meaning of the Securities Act of 1933 (the Securities Act).
I am______ am not ______ [please initial one] an accredited investor for at least one of the reasons on the attached Exhibit A. If the SEC has amended the rule defining the definition of accredited investor, I acknowledge that as a condition to exercise the Options, the Company may request updated information regarding the Holders status as an accredited investor. My exercise of the Options shall be in compliance with the applicable exemptions under the Securities Act and applicable state law.
Signature of Option Holder
To Notice of Exercise of Stock Option Agreement
For Individual Investors Only:
A person who has an individual net worth, or a person who with his or her spouse has a combined net worth, in excess of $1,000,000. For purposes of calculating net worth under this paragraph (1), (i) the primary residence shall not be included as an asset, (ii) to the extent that the indebtedness that is secured by the primary residence is in excess of the fair market value of the primary residence, the excess amount shall be included as a liability, and (iii) if the amount of outstanding indebtedness that is secured by the primary residence exceeds the amount outstanding 60 days prior to exercising the stock options, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability.
A person who had individual income (exclusive of any income attributable to the persons spouse) of more than who has $200,000 in each of the two most recently completed years and who reasonably expects to have an individual income in excess of $200,000 this year.
Alternatively, a person, who with his or her spouse, has joint income in excess of $300,000 in each applicable year.
A director or executive officer of the Company.
Any bank as defined in Section 3(a)(2) of the Securities Act of 1933 (Securities Act) whether acting in its individual or fiduciary capacity; any broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934; insurance company as defined in Section 2(13) of the Securities Act; investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act; Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958; any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company, or registered investment advisor, or if the employee benefit plan has total assets in excess of $5,000,000, or if a self-directed plan, with investment decisions made solely by persons that are accredited investors.
A private business development company as defined in Section 202(a)(22) of the Investment Advisors Act of 1940.
An organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000.
A trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) of the Securities Act.
An entity in which all of the equity owners are accredited investors.