Attached files
Exhibit 10.5
Tenax Therapeutics, Inc.
Plan for Employee Inducement Stock Option Grants
(As approved on July 6, 2021 by the Compensation
Committee)
1.1 Establishment.
Tenax Therapeutics, Inc. (the “Company”) hereby
establishes an employee inducement stock compensation plan to be
known as the Plan for Employee Inducement Stock Option
Grants (the
“Plan”), as set forth in this document. The Plan
permits Awards of Inducement Options as inducement material
to New Employees entering into initial employment with the Company
and in accordance with
the employment inducement grant exception to the shareholder
approval requirements of the NASDAQ Stock Market LLC
(“NASDAQ”) set forth in NASDAQ Listing Rule
5635(c)(4). The Plan became effective on July 6, 2021 when
approved by the members of the Company’s Compensation
Committee and remains in effect as provided in Section 1.3
hereof.
1.2 Purpose
of the Plan; Compliance with NASDAQ Exemption from Shareholder
Approval.
(a) Purpose
of the Plan. The purpose of the
Plan is to award Inducement Options to New Employees to advance the
interests of the Company and its shareholders by giving New
Employees a personal stake in the Company’s growth,
development and financial success. The Inducement Options under the
Plan will motivate a New Employee to devote his or her best efforts
to the business of the Company and also attract and retain the
services of New Employee who are in the position to make
significant contributions to the Company’s future success and
align them with shareholder interests.
2.1 (b) Compliance
with NASDAQ Exemption from
Shareholder Approval. The
Company may award Inducement Options to a New Employee under this
Plan pursuant to the exception from NASDAQ shareholder approval
requirements for the issuance of such securities as set forth in
NASDAQ Listing Rule 5635(c))(4). A New Employee who receives an
Award under this Plan must have no relationship with the
Company (or its Affiliates or Subsidiaries) prior to his or her employment with the Company
either as a current or former employee or consultant to the
Company (or its Affiliates or Subsidiaries), including without limitation as a member of the
Board of Directors of the Company, its Affiliates or its
Subsidiaries. This restriction is to ensure that Awards made
pursuant to this Plan are “arms-length” between the
Company and all New Employees and are
made in accordance with NASDAQ Listing Rule 5635(c))(4). The
Company’s Compensation Committee must approve any Awards
under this Plan. In addition, the Company must disclose in a press
release the material terms of any Award, including but not limited
to a New Employee’s name, title, and the number of Shares
underlying any Award, and file a Listing of Additional Shares
Notification Form with NASDAQ regarding the Shares underlying any
Award.
1.3 Duration
of the Plan. Unless sooner terminated as provided herein,
the Plan shall terminate ten (10) years from the Effective Date.
After the Plan’s termination, no new Awards may be granted,
but Awards previously granted shall remain outstanding in
accordance with their applicable terms and conditions, including
the terms and conditions of the Plan. Notwithstanding the
foregoing, no Incentive Stock Options may be granted more than ten
(10) years after the earlier of: (a) the date the Plan is adopted
by the Board, or (b) the Effective Date.
Article
2.
Definitions
Whenever used in
this Plan, the following terms shall have the meanings set forth
below, and when the meaning is intended, the initial letter of the
word shall be capitalized:
2.2 “Affiliate”
shall mean any corporation or other entity (including, but not
limited to, a partnership or a limited liability company) that is
affiliated with the Company through stock or equity ownership or
otherwise, and is designated as an Affiliate for purposes of this
Plan by the Compensation Committee.
2.3 “Annual
Award Limit” or “Annual Award Limits” have
the meaning set forth in Section 4.3.
2.4 “Award”
means, individually or collectively, a grant under this Plan
of Nonqualified Stock Options and Incentive Stock Options, in each
case subject to the terms of this Plan.
2.5 “Award
Agreement” means either: (a) a written agreement
entered into by the Company and a New Employee setting forth the
terms and provisions applicable to an Award granted under this
Plan, or (b) a written or electronic statement issued by the
Company to a New Employee describing the terms and provisions of
such Award, including any amendment or modification thereof. The
Compensation Committee may provide for the use of electronic,
Internet, or other nonpaper Award Agreements, and the use of
electronic, Internet, or other nonpaper means for the acceptance
thereof and actions thereunder by a New Employee.
2.6 “Beneficial
Owner” or “Beneficial Ownership” shall
have the meaning ascribed to such terms in Rule 13d-3 promulgated
under the Exchange Act.
2.7 “Board”
or “Board of
Directors” means the Board of Directors of
the Company.
2.8 “Cause”
shall have the meaning ascribed thereto in any employment agreement
between the Company or any of its subsidiaries and a New Employee,
or, if there is no employment agreement or if any such employment
agreement does not contain a definition of “cause”,
then Cause shall mean a finding by the Compensation Committee that
a New Employee has (i) been charged with a felony or a crime
involving moral turpitude, (ii) committed an act of fraud or
embezzlement against the Company or its subsidiaries, (iii)
materially violated any policy of the Company or its subsidiaries,
(iv) failed, refused or neglected to substantially perform their
duties (other than by reason of a physical or mental impairment) or
to implement the directives of the Company, or (v) willfully
engaged in conduct that is materially injurious to the Company,
monetarily or otherwise.
2.9 “Change
in Control” for purposes of this Plan means the
happening of any of the following:
(i)
When any
“person” as such term is used in Section 13(d) and
14(d) of the Exchange Act (other than the Company, a Subsidiary or
a Company benefit plan, including any trustee of such plan acting
as a trustee) is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing fifty percent
(50%) or more of the combined voting power of the Company’s
then outstanding securities entitled to vote generally in the
election of directors;
(ii)
A merger or
consolidation of the Company with any other corporation, other than
a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) at
least fifty percent (50%) of the total voting power represented by
the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the
shareholders of the Company approve an agreement for the sale or
disposition by the Company of all or substantially all the
Company’s assets; or
(iii)
A change in the
composition of the Board of Directors of the Company occurring
within a two-year period, as a result of which fewer than a
majority of the directors are Incumbent Directors. “Incumbent
Directors” for such purposes shall mean non-executive
Directors who either (A) are Directors of the Company as of the
date the Plan is approved by shareholders, or (B) are elected, or
nominated for election to the Board with the affirmative votes of
at least a majority of the Incumbent Directors at the time of such
election or nomination (but shall not include an individual whose
election or nomination is in connection with an actual or
threatened proxy contest relating to the election of Directors to
the Company).
Notwithstanding the
foregoing, an Award that is subject to Code Section 409A will not
be paid or settled upon a Change in Control unless the Change in
Control constitutes a “change in control event” under
Code Section 409A and Treasury Regulation Section
1.409A-3(i)(5).
2.10 “Change
in Control Price” means the price per Share paid in
conjunction with any transaction resulting in a Change in Control
(as determined in good faith by the Compensation Committee if any
part of the offered price is payable other than in cash) or, in the
case of a Change in Control occurring solely by reason of events
not related to a transfer of Shares, the highest Fair Market Value
of a Share on any of the thirty (30) consecutive trading days
ending on the last trading day before the Change in Control
occurs.
2.11 “Code”
means the U.S. Internal Revenue Code of 1986, as amended from time
to time. For purposes of this Plan, references to sections of the
Code shall be deemed to include references to any applicable
regulations thereunder and any successor or similar
provision.
2.12 “Company”
means Tenax Therapeutics, Inc., a Delaware corporation, and any
successor thereto as provided in Article 14
herein.
2.13 “Compensation
Committee” means the Compensation Committee of the
Board, composed of independent members
of the Board of Directors in compliance with NASDAQ Listing Rule
5605(d)(2).
2.14 “Director”
means any individual who is a member of the Board of Directors of
the Company.
2.15 “Effective
Date” has the meaning set forth in Section
1.1.
2.16 “Exchange
Act” means the Securities Exchange Act of 1934, as
amended from time to time, or any successor act
thereto.
2.17 “Fair
Market Value” or “FMV” means the closing price of a
Share reported on an established stock exchange on the applicable
date, the preceding trading day, the next succeeding trading day,
or an average of trading days, as determined by the Compensation
Committee in its discretion. In the event Shares are not publicly
traded at the time a determination of their value is required to be
made hereunder, the determination of their Fair Market Value shall
be made in good faith by the Compensation Committee, taking into
account such factors as the Compensation Committee deems
appropriate.
2.18 “Incentive
Stock Option” or “ISO” means an Option to
purchase Shares granted under Article 6 to a New Employee, that is
designated as an Incentive Stock Option and that is intended
to meet the requirements of Code Section 422 or any successor
provision.
2.19 “Inducement
Options” mean any Nonqualified Stock Options and
Incentive Stock Options awarded by the Compensation Committee
pursuant to this Plan as an inducement
material to a New Employee entering into initial employment with
the Company and made in accordance with NASDAQ Listing Rule
5635(c)(4).
2.20 “Insider”
shall mean an individual who is, on the relevant date, an officer
or Director of the Company, or a more than ten percent (10%)
Beneficial Owner of any class of the Company’s equity
securities that is registered pursuant to Section 12 of the
Exchange Act, as determined by the Board or Committee in accordance
with Section 16 of the Exchange Act.
2.21 “New
Employee(s)” means a participant eligible to receive
an Award under this Plan at the time of his or her initial
employment with the Company who has no relationship with the
Company (or its Affiliates or Subsidiaries) prior to his or her
employment with the Company either as a current or former employee
or consultant to the Company (or its Affiliates or Subsidiaries),
including without limitation as a member of the Board of Directors
of the Company, its Affiliates or its Subsidiaries. This
restriction is to ensure that Awards made pursuant to this Plan are
“arms-length” between the Company and all New Employees
and are made in accordance with NASDAQ
Listing Rule 5635(c))(4).
2.22 “Nonqualified
Stock Option” or “NQSO” means an Option
that is not intended to meet the requirements of Code
Section 422 or that otherwise does not meet such
requirements.
2.23 “Option”
means an Incentive Stock Option or a Nonqualified
Stock Option, as described in Article 6.
2.24 “Option
Price” means the price at which a Share may be
purchased by a New Employee pursuant to an Option.
2.25 “Performance
Period” means the period of time during which the
performance goals must be met in order to determine the degree of
payout and/or vesting with respect to an Award.
2.26 “Person”
shall have the meaning ascribed to such term in Section 3(a)(9) of
the Exchange Act and used in Sections 13(d) and 14(d) thereof,
including a “group” as defined in Section 13(d)
thereof.
2.27 “Plan” means this Plan for Employee
Inducement Stock Option Grants.
2.28 “Plan
Year” means the calendar year.
2.29 “Share” means a share of
common stock of the Company, par value $0.0001 per
share.
2.30 “Subsidiary”
means any corporation or other entity, whether domestic or foreign,
in which the Company has or obtains, directly or indirectly, a
proprietary interest of more than fifty percent (50%) by reason of
stock ownership or otherwise.
2.31 “Termination”
or “Terminate” means cessation of the
employee-employer relationship between a New Employee and the
Company and all Affiliates and Subsidiaries for any reason.
Notwithstanding the foregoing, with respect to any Award subject to
Code Section 409A, any such cessation or termination also must
constitute a “separation from service” as defined under
Treasury Regulation Section 1.409A-1(h).
Article
3.
Administration
3.1 General.
The Compensation Committee shall be responsible for administering
the Plan, subject to this Article 3 and the other provisions of
this Plan. The Compensation Committee may employ attorneys,
consultants, accountants, agents, and other advisors, any of whom
may be an employee of the Company, and the Compensation Committee,
the Company, and its officers and Directors shall be entitled to
rely upon the advice, opinions, or valuations of any such advisors.
All actions taken and all interpretations and determinations made
by the Compensation Committee shall be final and binding upon a New
Employee, the Company, and all other interested
individuals.
3.2 Authority
of the Compensation Committee. Subject to any express
provisions set forth in the Plan, the Compensation Committee shall
have full and exclusive discretionary power under this Plan to: (i)
designate a New Employee to be recipients of Awards; (ii) determine
the type and size of Awards; (iii) determine the terms and
conditions of Awards; (iv) certify satisfaction of any performance
goals; (v) construe and interpret the terms and the intent of the
Plan and any Award Agreement or other instrument entered into under
the Plan; (vi) establish, amend, or waive rules and regulations for
the Plan’s administration; (vii) subject to the provisions of
Articles 10 and 12, amend the terms and conditions of any
outstanding Award; and (viii) make any other determination and take
any other action that it deems necessary or desirable for the
administration of the Plan, provided that all authority exercised
by the Compensation Committee is in accordance with Nasdaq Listing Rule
5635(c))(4).
Article
4.
Shares Subject to This Plan and Maximum Awards
4.1 Number
of Shares Available for Awards. Subject to adjustment as
provided in Section 4.4 herein, the maximum number of Shares
currently available for issuance under this Plan shall
be Seven Hundred and Fifty Thousand (750,000) Shares
and may only be granted by the Compensation Committee as an
inducement material to the employment of a New Employee. All
such Shares shall be available for issuance in the form of any of
the Inducement Options authorized under the Plan, as determined by
the Compensation Committee in its discretion.
4.2 Share
Usage. Shares covered by an Award shall be reserved for that
award while the reward remains outstanding but shall only be
counted as used to the extent they are actually issued. Further,
any Shares withheld to satisfy tax-withholding obligations on
Awards issued under the Plan and Shares tendered to pay the
exercise price of Awards under the Plan will not be eligible to be
returned as available Shares under the Plan.
4.3 Annual
Award Limits. The following limits (each an “Annual
Award Limit” and, collectively, “Annual Award
Limits”) shall apply to grants of such Awards under this
Plan: the maximum aggregate number of
Shares subject to Awards granted in any one Plan Year to a New
Employee under this Plan and subject to any award of incentive
equity made pursuant the Company’s 2016 Stock Incentive Plan
shall be one million (1,000,000), as adjusted pursuant to Sections
4.4 and/or 12.2.
4.4 Adjustments
in Authorized Shares. In
the event any recapitalization, forward or reverse split,
reorganization, merger, consolidation, incorporation, spin-off,
combination, repurchase, exchange of Shares or other securities,
dividend or distribution of Shares or other special and
nonrecurring dividend or distribution (other than cash dividends or
distributions), liquidation, dissolution, sale or purchase of
assets or other similar transactions or events, affects the Shares
such that an adjustment is determined by the Compensation Committee
to be appropriate in order to prevent dilution or enlargement of
the rights of grantees under the Plan, then the Compensation
Committee shall equitably adjust any or all of (i) the number and
kind of securities deemed to be available thereafter for grants of
Awards under this Plan or under particular forms of Awards, (ii)
the number and kind of securities subject to outstanding Awards,
(iii) the Option Price or Grant Price applicable to outstanding
Awards, (iv) the Annual Award Limits or (v) other value
determinations applicable to outstanding Awards.
In
addition, the Compensation Committee is authorized to make
adjustments in the terms and conditions of, and the criteria
included in, outstanding Awards (including, without limitation,
acceleration of the expiration date of such Awards, cancellation of
such Awards in exchange for the intrinsic (i.e., in-the-money)
value, if any, of the vested portion thereof, substitution of
outstanding Awards using securities or other obligations of a
successor or other entity, modifications of performance goals,
changes in the length of Performance Periods, or payment of a bonus
or dividend equivalent) in recognition of unusual or nonrecurring
events (including, without limitation, a Change in Control of the
Company, an event described in the preceding sentence, or a cash
dividend or distribution) affecting the Company or any subsidiary
of the Company or the financial statements of the Company or any
subsidiary of the Company, or in response to changes in applicable
laws, regulations, or accounting principles.
Notwithstanding
anything to the contrary in this Section 4.4, an adjustment to an
Option shall be made only to the extent such adjustment complies
with the requirements of Code Section 409A.
Subject
to the provisions of Article 12 and notwithstanding anything else
herein to the contrary, without affecting the number of Shares
reserved or available hereunder, the Compensation Committee may
authorize the issuance or assumption of benefits under this Plan in
connection with any merger, consolidation, acquisition of property
or stock, or reorganization upon such terms and conditions as it
may deem appropriate (including, but not limited to, a conversion
of equity awards into Awards under this Plan in a manner consistent
with applicable accounting standards, subject to compliance with
the rules under Code Sections, 422 and 424, as and where
applicable.
Article
5.
Eligibility and Leave of Absence
5.1 Eligibility.
Only New Employees are eligible to participate in this
Plan.
5.2 Leave
of Absence. If a New Employee takes a “leave of
absence” (as such term is defined in the Company’s
employee handbook, or, if no such definition exists, as otherwise
defined by the Compensation Committee in its direction), she or he
or she may be considered as still in the employ of the Company, an
Affiliate or Subsidiary for purposes of continued vesting of Awards
under the Plan, if so determined by the Compensation Committee in
its discretion.
Article
6.
Stock Options
6.1 Grant
of Options. Subject to the terms and provisions of this
Plan, Options may be granted to a New Employee in such number, and
upon such terms, and at any time and from time to time as
shall be determined by the Compensation Committee, in its sole
discretion, provided that ISOs may be granted a New Employee only
if he or she is employed by the Company or of any parent or
subsidiary corporation (as permitted under Code Sections 422 and
424). A New Employee, who is employed by an Affiliate and/or
Subsidiary and is subject to Code Section 409A, may only be granted
Options to the extent the Affiliate and/or Subsidiary is part of
the Company’s consolidated group for United States federal
tax purposes.
6.2 Award
Agreement. Each Option grant shall be evidenced by an Award
Agreement that shall specify the Option Price, the maximum duration
of the Option, the number of Shares to which the Option pertains,
the conditions upon which an Option shall become vested and
exercisable, and such other provisions as the Compensation
Committee shall determine which are not inconsistent with the terms
of this Plan. The Award Agreement also shall specify whether the
Option is intended to be an ISO or an NQSO.
6.3 Option
Price. The Option Price for each grant of an Option under
this Plan shall be determined by the Compensation Committee in its
sole discretion and shall be specified in the Award Agreement;
provided, however, the Option Price on the date of grant must be at
least equal to one hundred percent (100%) of the FMV of the Shares
as determined on the date of grant; provided, further, however,
that the Option Price must be at least equal to one hundred and ten
percent (110%) of the FMV of a Share on the date of grant with
respect to any ISO issued to a New Employee who, on the date of
grant, owns (as defined in Code Section 424(d)) stock possessing
more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or of its subsidiary
corporation (as defined in Code Section 424(f)) (a “10%
Shareholder”).
6.4 Term
of Options. Each Option granted to a New Employee shall
expire at such time as the Compensation Committee shall determine
at the time of grant; provided, however, no Option shall be
exercisable later than the tenth (10th) anniversary date
of its grant; provided, further, however, that no ISO granted
to a 10% Shareholder shall be exercisable later than the day before
the fifth (5th) anniversary of its date of grant.
6.5 Exercise
of Options. Options granted under this Article 6 shall
be exercisable at such times and be subject to such restrictions
and conditions as the Compensation Committee shall in each instance
approve, which terms and restrictions need not be the same for each
grant or for each New Employee. Notwithstanding anything in this
Plan to the contrary, to the extent that the aggregate FMV of the
Shares (determined as of the date of grant of the applicable ISO)
with respect to which ISOs are exercisable for the first time by a
New Employee during any calendar year (under all plans of the
Company and its subsidiary corporations (as defined in
Code Section 424(f)) exceeds $100,000, such Options shall be
treated as NQSOs.
Options
granted under this Article 6 shall be exercised by the delivery of
a notice of exercise to the Company or an agent designated by the
Company in a form specified or accepted by the Compensation
Committee setting forth the number of Shares with respect to which
the Option is to be exercised, accompanied by full payment for the
Shares, or by complying with any alternative exercise procedures
the Compensation Committee may authorize.
6.6 Payment.
A condition of the issuance of the Shares as to which an Option
shall be exercised shall be the payment of the Option Price. The
Option Price of any Option shall be payable to the Company in full
either: (a) in cash or its equivalent; (b) by tendering
(either by actual delivery or attestation) previously acquired
Shares having an aggregate Fair Market Value at the time of
exercise equal to the Option Price (provided that the Compensation
Committee may in its discretion require the Shares that are
tendered have been held by a New Employee for at certain period of
time prior to their tender to satisfy the Option Price if acquired
under this Plan or any other compensation plan maintained by the
Company or purchased on the open market); (c) by a cashless
(broker-assisted) exercise; (d) by a combination of (a), (b),
and/or (c); or (e) any other method approved or accepted by the
Compensation Committee in its sole discretion.
Unless
otherwise determined by the Compensation Committee, all payments
under all of the methods indicated above shall be paid in United
States dollars.
6.7 Restrictions
on Shares. The Compensation Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an
Option granted under this Article 6 as it deems advisable,
including, without limitation, minimum holding period requirements,
restrictions under applicable federal securities laws, under the
requirements of any stock exchange or market upon which such Shares
are then listed and/or traded, or under any blue sky or state
securities laws as may be applicable to such Shares.
6.8 Termination
of Employment/Service. A New Employee’s Award
Agreement shall set forth the extent to which a New Employee shall
have the right to exercise the Option following a New
Employee’s Termination. Such provisions shall be determined
in the sole discretion of the Compensation Committee, shall be
included in the Award Agreement entered into with each New
Employee, need not be uniform among all Options issued pursuant to
this Article 6, and may reflect distinctions based on the reasons
for Termination.
6.9 Notification
of Disqualifying Disposition. If a New Employee shall make
any disposition of Shares issued pursuant to the exercise of an ISO
under the circumstances described in Code Section 421(b) (relating
to certain disqualifying dispositions), a New Employee shall notify
the Company of such disposition within ten (10) calendar days
thereof.
Article
7.
Transferability and Forfeiture of Awards
7.1 Transfer
Restrictions. Except as provided in Section 7.2 below,
during a New Employee’s lifetime, his or her Awards shall be
exercisable only by a New Employee or a New Employee’s legal
representative. Awards shall not be transferable other than by will
or the laws of descent and distribution; no Awards shall be
subject, in whole or in part, to attachment, execution, or levy of
any kind; and any purported transfer in violation hereof shall be
null and void. The Compensation Committee may establish such
procedures as it deems appropriate for a New Employee to designate
a beneficiary to whom any amounts payable or Shares deliverable in
the event of, or following, a New Employee’s death, may be
provided.
7.2 Committee
Action. The Compensation Committee may, in its discretion,
determine that notwithstanding Section 7.1, any or all Awards
(other than ISOs) shall be transferable to and exercisable by such
transferees, and subject to such terms and conditions, as the
Compensation Committee may deem appropriate; provided, however, no
Award may be transferred for value (as defined in the General
Instructions to Form S-8).
7.3 Forfeiture
of Awards. Notwithstanding anything else to the contrary
contained herein, the Compensation Committee in granting any Award
shall have the full power and authority to determine whether, to
what extent and under what circumstances such Award shall be
forfeited, cancelled or suspended. Unless an Award Agreement
includes provisions expressly superseding the provisions of this
Section 7.3, the provisions of this Section 7.3 shall apply to all
Awards. Any such forfeiture shall be effected by the Company in
such manner and to such degree as the Compensation Committee, in
its sole discretion, determines, and will in all events (including
as to the provisions of this Section 7.3) be subject to applicable
laws.
In
order to effect a forfeiture under this Section 7.3, the
Compensation Committee may require that a New Employee sell Shares
received upon exercise or settlement of an Award to the Company or
to such other person as the Company may designate at such price and
on such other terms and conditions as the Compensation Committee in
its sole discretion may require. Further, as a condition of each
Award, the Company shall have, and each New Employee shall be
deemed to have given the Company, a proxy on each New
Employee’s behalf, and each New Employee shall be required
and be deemed to have agreed to execute any other documents
necessary or appropriate to carry out this Section
7.3.
Unless
otherwise specified by the Compensation Committee, in addition to
any vesting or other forfeiture or repurchase conditions that may
apply to an Award and Shares issued pursuant to an Award, each
Award granted under the Plan will be subject to the following
forfeiture conditions:
(a) Breach of a Restrictive Covenant. All
outstanding Awards and Shares issued pursuant to an Award held by
an New Employee will be forfeited in their entirety (including as
to any portion of an Award or Shares subject thereto that are
vested or as to which any repurchase or resale rights or forfeiture
restrictions in favor of the Company or its designee with respect
to such Shares have previously lapsed) if a New Employee breaches
any noncompetition, confidentiality or other restrictive covenant
that may apply to a New Employee, as determined by the Compensation
Committee in its sole discretion; provided, that if a New Employee has
sold Shares issued upon exercise or settlement of an Award within
six (6) months prior to the date on which a New Employee would
otherwise have been required to forfeit such Shares or the Option
under this subsection (a) as a result of a New Employee’s
breach, then the Company will be entitled to recover any and all
profits realized by a New Employee in connection with such
sale.
(b) Termination for Cause. All outstanding
Awards and Shares issued pursuant to an Award held by a New
Employee will be forfeited in their entirety (including as to any
portion of an Award or Shares subject thereto that are vested or as
to which any repurchase or resale rights or forfeiture restrictions
in favor of the Company or its designee have previously lapsed) if
a New Employee’s employment or service is terminated by the
Company for Cause; provided, however, that if a New Employee has
sold Shares issued upon exercise or settlement of an Award within
six (6) months prior to the date on which a New Employee would
otherwise have been required to forfeit such Shares under this
subsection (b) as a result of termination of a New Employee’s
employment or service for Cause, then the Company will be entitled
to recover any and all profits realized by a New Employee in
connection with such sale; and provided further, that in the event the
Compensation Committee determines that it is necessary to establish
whether grounds exist for termination for Cause, the Award will be
suspended during any period required to conduct such determination,
meaning that the vesting, exercisability and/or lapse of
restrictions otherwise applicable to the Award will be tolled and
if grounds for such termination are determined to exist, the
forfeiture specified by this subsection (b) will apply as of the
date of suspension, and if no such grounds are determined to exist,
the Award will be reinstated on its original terms.
Article
8.
Performance Measures
8.1 Performance
Measures. The performance goals upon which the payment or
vesting of an Award to a New Employee shall be limited to the
following Performance Measures:
(a)
Commercial
milestones
(b)
Clinical
development milestones
(c)
Regulatory
development milestones
Any
Performance Measure(s) may be used to measure the performance of
the Company, Subsidiary, and/or Affiliate as a whole or any
business unit of the Company, Subsidiary, and/or Affiliate or any
combination thereof, as the Compensation Committee may deem
appropriate, or any of the above Performance Measures as compared
to the performance of a group of comparator companies, or published
or special index that the Compensation Committee, in its sole
discretion, deems appropriate. The Compensation Committee also has
the authority to provide for accelerated vesting of any Award based
on the achievement of performance goals pursuant to the Performance
Measures specified in this Article 8.
8.2 Evaluation
of Performance. The Compensation Committee may provide in
any such Award that any evaluation of achievement of Performance
Measures may include or exclude any of the following events that
occur during a Performance Period: (a) asset write-downs, (b)
litigation or claim judgments or settlements, (c) the effect of
changes in tax laws, accounting principles, or other laws or
provisions affecting reported results, (d) any reorganization and
restructuring programs, (e) extraordinary nonrecurring items as
described in Accounting Principles Board Opinion No. 30 and/or in
management’s discussion and analysis of financial condition
and results of operations appearing in the Company’s annual
report to shareholders for the applicable year, (f) acquisitions or
divestitures, and (g) foreign exchange gains and losses; and (h)
changes in material liability estimates. To the extent such
inclusions or exclusions affect Awards to a New Employee, they
shall be prescribed in a form that meets the requirements of Code
Section 162(m) for deductibility.
8.3 Adjustment
of Performance-Based Compensation. Awards that are intended
to qualify as Performance-Based Compensation may not be adjusted
upward. The Compensation Committee shall retain the discretion to
adjust such Awards downward, either on a formula or discretionary
basis, or any combination, based on market, performance or service
conditions, as the Compensation Committee determines.
8.4 Committee
Discretion. In the event that applicable tax and/or
securities laws change to permit Committee discretion to alter the
governing Performance Measures without obtaining shareholder
approval of such changes, the Compensation Committee shall have
sole discretion to make such changes without obtaining shareholder
approval. In addition, in the event that the Compensation Committee
determines that it is advisable to grant Awards that shall not
qualify as Performance-Based Compensation, the Compensation
Committee may make such grants without satisfying the requirements
of Code Section 162(m) and base vesting on Performance Measures
other than those set forth in Section 8.1.
Article
9.
Dividends and Dividend Equivalents
A New
Employee may be granted dividends or dividend equivalents based on
the dividends declared on Shares that are subject to any Award, to
be credited as of dividend payment dates, during the period between
the date the Award is granted and the date the Award is exercised,
vests, or expires, as determined by the Compensation Committee;
provided, however, that dividends or dividend equivalents credited
with respect to performance-based Awards will be subject to the
same underlying performance-based vesting conditions as the Awards
and will not be subject to Committee discretion. The dividends or
dividend equivalents may be subject to any limitations and/or
restrictions determined by the Compensation Committee. Such
dividend equivalents shall be converted to cash or additional
Shares by such formula and at such time and subject to such
limitations as may be determined by the Compensation
Committee.
Article
10.
Change in Control of the Company
10.1 Awards
Assumed or Substituted in Connection with a Change in
Control. Unless otherwise expressly provided in an Award
Agreement, with respect to each outstanding Award that is assumed
or substituted in connection with a Change in Control of the
Company, in the event that (1) a Change in Control occurs and (2) a
New Employee’s employment or service is involuntarily
terminated by the Company, its successor or affiliate thereof
without Cause on or after the effective time of the Change in
Control but prior to eighteen (18) months following said Change in
Control, then:
(a) Any and all Options
granted hereunder shall become exercisable, and shall remain
exercisable in accordance with their terms;
(b) For
Plan purposes, an Award will be considered assumed if, following
the Change in Control, the Award confers the right to purchase or
receive, for each Share subject to the Award immediately prior to
the Change in Control, the consideration (whether stock, cash, or
other securities or property) received in the Change in Control by
holders of Common Stock for each Share held on the effective date
of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares); provided, however, that if
such consideration received in the Change in Control is not solely
common stock of the successor corporation or its parent, the
Compensation Committee may, with the consent of the successor
corporation, provide for the consideration to be received upon the
exercise of an Option, for each Share subject to such Award, to be
solely common stock of the successor corporation or its parent
equal in fair market value to the per share consideration received
by holders of Common Stock in the Change in Control.
(c) Awards
shall be considered assumed or substituted if, upon the occurrence
of a Change in Control after which there will be a generally
recognized U.S. public market for (1) the Company’s Stock,
(2) common stock for which the
Company’s Stock is exchanged, or (3) the common stock of
a successor or acquirer entity (such publicly traded stock,
“Public Shares”), the then outstanding Awards are
assumed, exchanged or substituted for by a successor or acquirer
entity such that following the Change in Control, the Awards relate
to such Public Shares and, except as otherwise provided by this
Section 10.1, remain subject to such terms and conditions that
were applicable to the Awards prior to the Change in
Control.
10.2 No
Assumption or Substitution in Connection with Change in
Control. Unless
otherwise expressly provided in an Award Agreement, with respect to
each outstanding Award that is not assumed or substituted in
connection with a Change in Control, then prior to the occurrence
of a Change in Control, any and all Options granted hereunder shall
vest in full and become immediately exercisable in accordance with
their terms and the Compensation Committee will notify a New
Employee in writing that the Options will be exercisable for a
period of time determined by the Compensation Committee in the
Compensation Committee’s sole discretion and the Option will
terminate upon the expiration of said period.
10.3 Cashout
and Cancellation of Awards. Notwithstanding any other
provisions of the Plan, in the event that each outstanding Award is
not assumed or substituted in connection with a Change in Control
and except as would otherwise result in adverse tax consequences
under Section 409A of the Code, the Compensation Committee may, in
its discretion, provide that each Award shall, immediately upon the
occurrence of a Change in Control, be cancelled in exchange for a
payment in cash or securities in an amount equal to (x) the excess
if any of the consideration paid per Share in the Change in Control
over the exercise or purchase price per Share subject to the Award
multiplied by (y) the number of Shares granted under the Award.
Without limiting the generality of the foregoing, in the event that
the consideration paid per Share in the Change in Control is lesser
than or equal to the exercise price or purchase price per Share
subject to the Award, the Compensation Committee may, in its
discretion, cancel such Award without any consideration upon the
occurrence of a Change in Control.
Article
11.
Rights of a New Employee
11.1 Employment
/ Service. Nothing in this Plan or an Award Agreement shall
interfere with or limit in any way the right of the Company, its
Affiliates, and/or its Subsidiaries to terminate a New
Employee’s employment or service on the Board or to the
Company at any time or for any reason not prohibited by law, nor
confer upon a New Employee any right to continue his employment or
service as a director or third party service provider
for any specified period of time.
Neither
an Award nor any benefits arising under this Plan shall constitute
an employment contract with the Company, its Affiliates, and/or its
Subsidiaries and, accordingly, subject to Articles 3 and 12,
this Plan and the benefits hereunder may be terminated at any time
in the sole and exclusive discretion of the Compensation Committee
without giving rise to any liability on the part of the Company,
its Affiliates, and/or its Subsidiaries.
11.2 Participation.
No individual shall have the right to be selected to receive an
Award under this Plan other than a New Employee and no Awards may
be made to a New Employee by the Compensation Committee under this
Plan other than in connection with his initial employment by the
Company.
11.3 Rights
as a Shareholder. Except as otherwise provided herein or in
any Award Agreement, a New Employee shall have none of the rights
of a shareholder with respect to Shares covered by any Award until
a New Employee becomes the record holder of such
Shares.
Article
12.
Amendment, Modification, Suspension, and Termination
12.1 Amendment,
Modification, Suspension, and Termination. Subject to
Section 12.3, the Compensation Committee may, at any time and
from time to time, alter, amend, modify, suspend, or terminate this
Plan and any Award Agreement in whole or in part; provided,
however, that, without the prior approval of the Company’s
shareholders and except as provided in Section 4.4, (a) Options
will not be repriced, replaced, or regranted through cancellation,
or by lowering the Option Price of a previously granted Option, and
(b) no payment shall be made to cancel an Option, as the case may
be, exceeds the Fair Market Value. No material amendment of this Plan shall be
made without shareholder approval if shareholder approval is
required by law, regulation, or stock exchange rule.
12.2 Adjustment
of Awards Upon the Occurrence of Certain Unusual or Nonrecurring
Events. The Compensation Committee may make adjustments in
the terms and conditions of, and the criteria included in, Awards
in recognition of unusual or nonrecurring events (including,
without limitation, the events described in Section 4.4 hereof)
affecting the Company or the financial statements of the Company or
of changes in applicable laws, regulations, or accounting
principles, whenever the Compensation Committee determines that
such adjustments are appropriate in order to prevent unintended
dilution or enlargement of the benefits or potential benefits
intended to be made available under this Plan. The determination of
the Compensation Committee as to the foregoing adjustments, if any,
shall be conclusive and binding on a New Employee under this
Plan.
12.3 Awards
Previously Granted. Notwithstanding any other
provision of this Plan to the contrary (other than Section 12.4),
no termination, amendment, suspension, or modification of this Plan
or an Award Agreement shall adversely affect in any material
way any Award previously granted under this Plan, without the
written consent of a New Employee.
12.4 Amendment
to Conform to Law. Notwithstanding any other
provision of this Plan to the contrary, the Board may amend the
Plan or an Award Agreement, to take effect retroactively or
otherwise, as deemed necessary or advisable for the purpose of
conforming the Plan or an Award Agreement to any present or future
law relating to plans of this or similar nature (including, but not
limited to, Code Section 409A), and to the administrative
regulations and rulings promulgated thereunder. By accepting an
Award under this Plan, a New Employee agrees to any amendment made
pursuant to this Section 12.4 to any Award granted under the Plan
without further consideration or action.
Article
13.
Withholding
13.1 Tax
Withholding. The Company shall have the power and the right
to deduct or withhold, or require a New Employee to remit to the
Company, the minimum statutory amount to satisfy federal, state,
and local taxes, domestic or foreign, required by law or regulation
to be withheld with respect to any taxable event arising as a
result of this Plan.
13.2 Share
Withholding. With respect to withholding required upon the
exercise of Options or any other taxable event arising as a result
of an Award granted hereunder, a New Employee may elect, subject to
the approval of the Compensation Committee, to satisfy the
withholding requirement, in whole or in part, by having the Company
withhold Shares having a Fair Market Value on the date the tax is
to be determined equal to the minimum statutory total tax that
could be imposed on the transaction. All such elections shall be
irrevocable, made in writing, and signed by a New Employee, and
shall be subject to any restrictions or limitations that the
Compensation Committee, in its sole discretion, deems
appropriate.
Article
14.
Successors
All
obligations of the Company under this Plan with respect to Awards
granted hereunder shall be binding on any successor to the Company,
whether the existence of such successor is the result of a direct
or indirect purchase, merger, consolidation, or otherwise, of all
or substantially all of the business and/or assets of the
Company.
Article
15.
General Provisions
15.1 Legend.
The certificates for Shares may include any legend that the
Compensation Committee deems appropriate to reflect any
restrictions on transfer of such Shares.
15.2 Gender
and Number. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine, the
plural shall include the singular, and the singular shall include
the plural.
15.3 Severability. In
the event any provision of this Plan shall be held illegal or
invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of this Plan, and this Plan shall be
construed and enforced as if the illegal or invalid provision had
not been included.
15.4 Requirements
of Law. The
granting of Awards and the issuance of Shares under this Plan shall
be subject to all applicable laws, rules, and regulations, and to
such approvals by any governmental agencies or stock exchange as
may be required.
15.5 Delivery
of Title. The
Company shall have no obligation to issue or deliver evidence of
title for Shares issued under this Plan prior to:
(a) Obtaining any
approvals from governmental agencies that the Company determines
are necessary or advisable; and
(b) Completion of any
registration or other qualification of the Shares under any
applicable national or foreign law or ruling of any governmental
body that the Company determines to be necessary or
advisable.
15.6 Inability
to Obtain Authority. The inability of the Company to
obtain authority from any regulatory body having jurisdiction,
which authority is deemed by the Company’s counsel to be
necessary to the lawful issuance and sale of any Shares hereunder,
shall relieve the Company of any liability in respect of the
failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.
15.7 Investment
Representations. The Compensation Committee may
require any individual receiving Shares pursuant to an Award under
this Plan to represent and warrant in writing that the individual
is acquiring the Shares for investment and without any present
intention to sell or distribute such Shares.
15.8 State
Securities Laws. Notwithstanding any provision of this Plan
to the contrary, the Compensation Committee, in its sole
discretion, shall have the power and authority to modify the terms
and conditions of any Award granted to a New Employee if he or she
resides in one or more individual states to the extent necessary or
desirable under applicable state securities laws. Any modifications
to Plan terms and procedures established under this Section 15.8 by
the Compensation Committee shall be attached to this Plan document
as appendices.
15.9 Uncertificated
Shares. To the extent that this Plan provides for issuance
of certificates to reflect the transfer of Shares and the Shares
are publicly traded, the transfer of such Shares may be effected on
a non-certificated basis, to the extent not prohibited by
applicable law or the rules of any stock exchange.
15.10 Unfunded
Plan. A New
Employee shall have no right, title, or interest whatsoever in or
to any investments that the Company and/or its Subsidiaries and/or
its Affiliates may make to aid it in meeting its obligations under
this Plan. Nothing contained in this Plan, and no action taken
pursuant to its provisions, shall create or be construed to create
a trust of any kind, or a fiduciary relationship between the
Company and any New Employee, beneficiary, legal representative, or
any other individual. To the extent that any individual acquires a
right to receive payments from the Company, its Subsidiaries,
and/or its Affiliates under this Plan, such right shall be no
greater than the right of an unsecured general creditor of the
Company, a Subsidiary, or an Affiliate, as the case may be. All
payments to be made hereunder shall be paid from the general funds
of the Company, a Subsidiary, or an Affiliate, as the case may be,
and no special or separate fund shall be established and no
segregation of assets shall be made to assure payment of such
amounts except as expressly set forth in this Plan.
15.11 No
Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to this Plan or any Award. The Compensation
Committee shall determine whether cash, Awards, or other property
shall be issued or paid in lieu of fractional Shares or whether
such fractional Shares or any rights thereto shall be forfeited or
otherwise eliminated.
15.12 Retirement
and Welfare Plans. Neither Awards made under this Plan nor
Shares issued pursuant to such Awards may be included as
“compensation” for purposes of computing the benefits
payable to a New Employee under the Company’s or any
Subsidiary’s or Affiliate’s retirement plans (both
qualified and nonqualified) or welfare benefit plans unless such
other plan expressly provides that such compensation shall be taken
into account in computing a New Employee’s
benefit.
15.13 Deferred
Compensation. No
deferral of compensation (as defined under Code Section 409A
or guidance thereto) is intended under this Plan. Notwithstanding
this intent, if any Award would be considered deferred compensation
as defined under Code Section 409A, and if this Plan fails to meet
the requirements of Code Section 409A with respect to such Award,
then such Award shall be null and void. However, the Compensation
Committee may permit deferrals of compensation pursuant to the
terms of a New Employee’s Award Agreement, a separate plan,
or a subplan that meets the requirements of Code Section 409A and
any related guidance. Additionally, to the extent any Award is
subject to Code Section 409A, notwithstanding any provision herein
to the contrary, the Plan does not permit the acceleration of the
time or schedule of any distribution related to such Award, except
as permitted by Code Section 409A, the regulations thereunder,
and/or the Secretary of the United States Treasury.
15.14 Nonexclusivity
of This Plan. The adoption of this Plan shall not be
construed as creating any limitations on the power of the Board or
Committee to adopt such other compensation arrangements as it may
deem desirable for any New Employee.
15.15 No
Constraint on Corporate Action. Nothing in this Plan shall
be construed to: (a) limit, impair, or otherwise affect the
Company’s or a Subsidiary’s or an Affiliate’s
right or power to make adjustments, reclassifications,
reorganizations, or changes of its capital or business structure,
or to merge or consolidate, or dissolve, liquidate, sell, or
transfer all or any part of its business or assets; or, (b) limit
the right or power of the Company or a Subsidiary or an Affiliate
to take any action which such entity deems to be necessary or
appropriate.
15.16 Governing
Law. The Plan and each Award Agreement shall be governed by
the laws of the State of Delaware, excluding any conflicts or
choice of law rule or principle that might otherwise refer
construction or interpretation of this Plan to the substantive law
of another jurisdiction. Unless otherwise provided in the Award
Agreement, recipients of an Award under this Plan are deemed to
submit to the exclusive jurisdiction and venue of the federal or
state courts of Delaware to resolve any and all issues that may
arise out of or relate to this Plan or any related Award
Agreement.
15.17 Indemnification. Subject
to requirements of Delaware law, each individual who is or shall
have been a member of the Board, or a committee appointed by the
Board, or an officer of the Company to whom authority was delegated
in accordance with Article 3, shall be indemnified and held
harmless by the Company against and from any loss, cost, liability,
or expense that may be imposed upon or reasonably incurred by a New
Employee in connection with or resulting from any claim, action,
suit, or proceeding to which a New Employee may be a party or in
which a New Employee may be involved by reason of any action taken
or failure to act under this Plan and against and from any and all
amounts paid by a New Employee in settlement thereof, with the
Company’s approval, or paid by a New Employee in satisfaction
of any judgment in any such action, suit, or proceeding against a
New Employee, provided a New Employee shall give the Company an
opportunity, at its own expense, to handle and defend the same
before a New Employee undertakes to handle and defend it on a New
Employee’s own behalf, unless such loss, cost, liability, or
expense is a result of a New Employee’s own willful
misconduct or except as expressly provided by statute.
The
foregoing right of indemnification shall not be exclusive of any
other rights of indemnification to which such individuals may be
entitled under the Company’s Articles of Incorporation or
Bylaws, as a matter of law, or otherwise, or any power that the
Company may have to indemnify them or hold them
harmless.
15.18 Recoupment.
A New Employee will be obligated to return to the Company payments
received with respect to Awards in the event of an overpayment to a
New Employee of incentive compensation due to inaccurate financial
data, in accordance with any applicable Company clawback or
recoupment policy, as such policy may be amended and in effect from
time to time, or as otherwise required by law or applicable stock
exchange listing standards, including, without limitation Section
10D of the Securities Exchange Act of 1934, as amended. Each New
Employee, by accepting an Award pursuant to the Plan, agrees to
return the full amount required under this Section 15.18 at such
time and in such manner as the Compensation Committee shall
determine in its sole discretion and consistent with applicable
law.
FORM OF
TENAX THERAPEUTICS, INC.
PLAN FOR EMPLOYEE INDUCEMENT STOCK OPTION GRANTS
AWARD AGREEMENT
(Awarding Incentive Stock Option to Employee)
THIS
AWARD AGREEMENT (this “Agreement”) is made and entered
into as of [DATE OF OPTION] by and between Tenax Therapeutics,
Inc., a Delaware corporation (the “Company”), and
[OPTIONEE] (the
“Optionee”) pursuant to the provisions of the Tenax
Therapeutics, Inc. Plan for Employee Inducement Stock Option Grants
(the “Plan”), which is incorporated herein by
reference. Capitalized terms not defined in this Agreement shall
have the meanings given to them in the Plan.
WITNESSETH:
WHEREAS, the
Optionee is providing, or has agreed to provide, services to the
Company as [OPTIONEE TITLE]; and
WHEREAS, the
Compensation Committee of the Company’s Board of Directors
desires to award a stock option to purchase shares of the $0.0001
par value common stock of the Company (the “Shares”) to
the Optionee as an employment inducement grant (within the meaning
of NASDAQ Listing Rule 5635(c)(4)).
NOW,
THEREFORE, in consideration of the premises and the mutual
agreements set forth herein, the parties agree as
follows:
1. Grant of Option. Effective as
of [DATE OF GRANT] (the “Date of Grant”),
the Company hereby grants to the Optionee an option (the
“Option”) to purchase up to [NUMBER OF
SHARES] Shares
(“Optioned Shares”) at the Option Price per Share of
[OPTION PRICE] (the
“Option Price”), subject to the terms and conditions of
the Plan and this Agreement, in accordance with the employment
inducement grant exception to the shareholder approval requirements
of the NASDAQ Stock Market LLC (“NASDAQ”) set forth in
NASDAQ Listing Rule 5635(c)(4). The future value of such Shares is
unknown and cannot be predicted with certainty. If such Shares do
not increase in value, the Option will have no value.
2. Term of Option. Subject to
earlier termination under Section 4 hereof, the term of the
Option shall be ten (10) years (the
“Term”).
3. Vesting Schedule. The Option
shall vest and become exercisable for purchase of the Optioned
Stock on the following schedule: [VESTING DETAILS]. The
Option shall not vest for any Optioned Stock that has not vested
prior to the date the Optionee’s Continuous Status as an
Employee or Consultant (as defined in the Plan)
terminates.
In no
event will any portion of the Option that is not vested and
exercisable at the time of the termination of the Optionee’s
service relationship become vested and exercisable following such
termination.
4. Termination of Option. Except
as otherwise provided herein, the Option shall terminate on the
earliest to occur of the following:
(a)
The expiration of
the Term of the Option.
(b)
The 91st day after
termination of the Optionee’s service relationship for any
reason other than one specified in (c) or
(d) below.
(c)
The 366th day after
termination of the Optionee’s service relationship as a
result of the Optionee’s death, or a disability or retirement
that is approved by the Committee for this purpose.
(d)
Termination of the
Optionee’s service relationship by the Company for reasons
that would constitute Cause if the Optionee were an
employee.
5. Exercise of Option. The vested portion of the Option
may be exercised in whole or in part by delivery of an exercise
notice in the form attached as Exhibit A (the
“Exercise Notice”) which shall state the election to
exercise the Option and set forth the number of Shares with respect
to which the Option is being exercised. The Exercise Notice shall
be accompanied by payment of an amount equal to the aggregate
Option Price as to all exercised Shares. Payment of such amount
shall be by any of the following methods, or combination thereof,
at the election of the Optionee: (a) in cash or its
equivalent; (b) by tendering (either by actual delivery or
attestation) previously acquired Shares having an aggregate Fair
Market Value at the time of exercise equal to the Option Price;
(c) by a cashless (broker-assisted) exercise; or (d) any
other method approved or accepted by the Committee in its sole
discretion. The Option
shall be deemed to be exercised upon receipt by the Company of such
fully executed Exercise Notice accompanied by the aggregate Option
Price.
6. Non-Transferability of Option.
This Option may not be transferred in any manner otherwise than by
will or the laws of descent and distribution and, during the
Optionee’s lifetime, may only be exercised by the
Optionee.
7. Restrictions on Shares. This
Agreement shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or
stock exchange as may be required. The Optionee agrees to take all
steps the Committee determines are necessary to comply with all
applicable provisions of federal and state securities law in
exercising his or her rights under this Agreement. The Committee
may impose such restrictions on any Shares acquired pursuant to the
exercise of this Option as it deems advisable, including, without
limitation, minimum holding period requirements, restrictions under
applicable federal securities laws, under the requirements of any
stock exchange or market upon which such Shares are then listed
and/or traded, or under any blue sky or state securities laws
as may be applicable to such Shares.
8. Forfeiture. Where an Optionee engages in certain competitive
activity or is terminated by the Company for Cause, his or her
Option and Shares are subject to forfeiture conditions under
Section 7.3 of the Plan. Upon the occurrence of any of the
events set forth in Section 7.3 of the Plan, in addition to the
remedies provided in Section 7.3, the Company shall be entitled to
issue a stop transfer order and other documents implementing the
forfeiture to its transfer agent, the depository or any of its
nominees, and any other person with respect to this Option and the
Shares.
9. Successors and Assigns. The
Company may assign any of its rights under this Agreement to single
or multiple assignees, and this Agreement shall inure to the
benefit of the successors and assigns of the Company. Subject to
the restrictions on transfer herein set forth, the terms and
conditions of the Plan and this Agreement shall be binding upon the
Optionee and his or her heirs, executors, administrators,
successors and assigns.
10. Interpretation. Any dispute
regarding the interpretation of this Agreement shall be submitted
by the Optionee or by the Company forthwith to the Committee, which
shall review such dispute at its next regular meeting. The
resolution of such a dispute by the Committee shall be final and
binding on all parties.
11. Tax Consequences. The exercise
of this Option and the subsequent disposition of the Shares may
cause the Optionee to be subject to federal, state and/or foreign
taxation. The Optionee should consult a tax advisor before
exercising this Option or disposing of the Shares purchased
hereunder.
12. Acknowledgement. The Optionee
acknowledges and agrees: (i) that the Plan is discretionary in
nature and may be suspended or terminated by the Company at any
time; (ii) that the grant of the Option does not create any
contractual or other right to receive future grants of options or
any right to continue the Optionee’s service relationship
with the Company (for the vesting period or otherwise);
(iii) that the Optionee remains subject to discharge from such
relationship to the same extent as if the Option had not been
granted; (iv) that all determinations with respect to any such
future grants, including, but not limited to, when and on what
terms they shall be made, will be at the sole discretion of the
Committee; (v) that participation in the Plan is voluntary;
(vi) that the value of the Option is an extraordinary item of
compensation that is outside the scope of the Optionee’s
employment contract if any; and (vii) that the Option is not
part of normal or expected compensation for purposes of calculating
any severance, resignation, redundancy, end of service payments,
bonuses, long-service awards, pension or retirement benefits or
similar benefits.
13. Optionee Data Privacy. As a
condition of the grant of this Option, the Optionee consents to the
collection, use and transfer of personal data as described in this
paragraph. The Optionee understands that the Company and its
Affiliates hold certain personal information about the Optionee,
including but not limited to the Optionee’s name, home
address and telephone number, date of birth, social security
number, salary, nationality, job title, shares of common stock or
directorships held in the Company, details of all Options or other
entitlement to shares of common stock awarded, cancelled,
exercised, vested, unvested or outstanding in the Optionee’s
favor for the purpose of managing and administering the Plan
(“Data”). The Optionee further understands that the
Company and/or its Affiliates will transfer Data amongst themselves
as necessary for the purposes of implementation, administration and
management of the Optionee’s participation in the Plan, and
that the Company and/or any of its Affiliates may each further
transfer Data to any third parties assisting the Company in the
implementation, administration and management of the Plans. The
Optionee understands that these recipients may be located in the
Optionee’s country of residence or elsewhere. The Optionee
authorizes them to receive, possess, use, retain and transfer Data
in electronic or other form, for the purposes of implementing,
administering and managing the Optionee’s participation in
the Plan, including any requisite transfer of such Data as may be
required for the administration of the Plan and/or the subsequent
holding shares of common stock on the Optionee’s behalf to a
broker or other third party with whom the shares acquired on
exercise may be deposited. The Optionee understands that the
Optionee may, at any time, view the Data, require any necessary
amendments to it or withdraw the consent herein in writing by
contacting the local human resources representative.
14. Confidentiality. The Optionee
agrees not to disclose the terms of this offer to anyone other than
the members of the Optionee’s immediately family or the
Optionee’s counsel or financial advisors and agrees to advise
such persons of the confidential nature of this offer.
15. Entire Agreement; Governing
Law. The Plan is incorporated herein by reference. The Plan
and this Agreement constitute the entire agreement of the parties
with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and
the Optionee with respect to the subject matter hereof, and may not
be modified adversely to the Optionee’s interest except by
means of a writing signed by the Company and Optionee. This
Agreement is governed by the internal substantive laws but not the
choice of law rules of Delaware.
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OPTIONEE
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TENAX THERAPEUTICS, INC.
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By:
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Signature:
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Name:
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[NAME
OF OFFICER]
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Name:
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[OPTIONEE]
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Title:
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[TITLE
OF OFFICER]
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Exhibit A
FORM OF
EXERCISE NOTICE FOR STOCK OPTIONS
GRANTED PURSUANT TO THE PLAN FOR
EMPLOYEE INDUCEMENT STOCK OPTION GRANTS1
Tenax
Therapeutics, Inc.
One
Copley Parkway, Suite 490
Morrisville,
North Carolina 27560
Attention: Stock
Plan Administrator
1. Exercise of Option. Effective
as of today, ,
20 , the
undersigned (the “Optionee”) hereby elects to exercise
the Optionee’s option (the “Option”) to
purchase shares
of the Common Stock (the “Shares”) of Tenax
Therapeutics, Inc. (the “Company”) under and pursuant
to the Tenax Therapeutics, Inc. Plan for Employee Inducement Stock
Option Grants (the “Plan”) and the Award Agreement with
a grant date of ,
20 (the
“Award”). The Grant Number of the Option
is ,
and the per share exercise price is $ .
2. Delivery of Payment. The
Optionee herewith delivers to the Company the aggregate exercise
price of the Option, as set forth in the Award, by means
of (check
one):
☐
a check
in U.S. dollars made payable to Tenax Therapeutics, Inc., or bank
transfer;
or
☐
(i) a
share certificate (or certificates) representing previously
acquired shares and (ii) a check in U.S. Dollars made payable to
Tenax Therapeutics, Inc. or bank transfer that, in combination,
have an aggregate value (the Fair Market Value of the shares
delivered plus the check or bank transfer amount) equal to the
aggregate exercise price of the Option.
3. Representations of Optionee.
The Optionee acknowledges that the Optionee has received, read and
understood the Plan and the Award and agrees to abide by and be
bound by their terms and conditions. In making the decision to
exercise the option(s) the Optionee has relied upon his or her own
independent investigations or those made by his or her
representatives, if any (including professional, financial, tax,
legal and other advisors). The Optionee (and his or her
representatives, if any) has had an opportunity to review
information with respect to the Company, desires no further
additional information concerning the Company or its operations,
and deems such information reviewed adequate to evaluate the merits
and risks of the Optionee’s investment in the Company. The
Optionee understands that the Option has been granted in accordance
with the employment inducement grant exception to the shareholder
approval requirements of the NASDAQ Stock Market LLC (the
“NASDAQ”) set forth in NASDAQ Listing Rule
5635(c)(4).
The
Optionee acknowledges that the Company is relying upon each of the
above representations in connection with the exercise of the option
and the issuance of the underlying Shares.
4. Rights as Shareholder. Until
the issuance of the Shares (as evidenced by the appropriate entry
on the books of the Company or of a duly authorized transfer agent
of the Company), no right to vote or receive dividends or any other
rights as a shareholder shall exist with respect to the Shares,
notwithstanding the exercise of the Option. The Shares shall be
issued to the Optionee as soon as practicable after the Option is
exercised. No adjustment shall be made for a dividend or other
right for which the record date is prior to the date of issuance
except as provided in the Plan.
______________________________
5. Tax Consultation and
Withholding. The Optionee understands that the Optionee may
suffer adverse tax consequences as a result of the Optionee’s
purchase or disposition of the Shares. The Optionee represents that
the Optionee has consulted with any tax consultants the Optionee
deems advisable in connection with the purchase or disposition of
the Shares and that the Optionee is not relying on the Company for
any tax advice.
6. Restrictive Legends. The
Optionee understands and agrees that the Company shall cause the
legends set forth below or legends substantially equivalent
thereto, to be placed upon any certificate(s) evidencing ownership
of the Shares together with any other legends that may be required
by the Company or by state or federal securities laws:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TENAX
THERAPEUTICS, INC. CHRISTOPHER THOMAS GIORDANO PLAN FOR EMPLOYEE
INDUCEMENT STOCK OPTION GRANTS, AS SUCH PLAN MAY BE ALTERED,
AMENDED, RESTATED OR MODIFIED FROM TIME TO TIME, AND ANY TRANSFEREE
OF THESE SECURITIES SHALL BE SUBJECT TO THE TERMS OF SUCH PLAN.
COPIES OF THE FOREGOING PLAN ARE MAINTAINED WITH THE CORPORATE
RECORDS OF THE ISSUER AND ARE AVAILABLE FOR INSPECTION AT THE
PRINCIPAL OFFICES OF THE ISSUER.
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO AN
AWARD AGREEMENT BETWEEN THE ISSUER AND THE HOLDER, AS SUCH
AGREEMENT MAY BE AMENDED, RESTATED OR MODIFIED FROM TIME TO TIME,
AND ANY TRANSFEREE OF THESE SECURITIES SHALL BE SUBJECT TO THE
TERMS OF SUCH AGREEMENT. COPIES OF THE FOREGOING AGREEMENT ARE
MAINTAINED WITH THE CORPORATE RECORDS OF THE ISSUER AND ARE
AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICES OF THE
ISSUER.
7. Governing Law. This Agreement
shall be governed by the internal substantive laws but not the
choice of law rules of Delaware.
8. Entire Agreement. The Plan and
Award are incorporated herein by reference. This Agreement, the
Plan, and the Award constitute the entire agreement of the parties
with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and
the Optionee with respect to the subject matter hereof, and may not
be modified adversely to the Optionee’s interest except by
means of a writing signed by the Company and the
Optionee.
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Submitted
by:
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Accepted
by:
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OPTIONEE
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TENAX THERAPEUTICS, INC.
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By:
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Signature:
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Name:
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Name:
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Title:
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Date:
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