**Exhibit 10.10**

 

TANOX, INC.

 

NON-QUALIFIED STOCK OPTION AGREEMENT

*2000 Non-Employee Directors’Stock Option Plan*

 

1.                                       Grant of Option.

 

TANOX, INC., a Delaware corporation (the “Company”),hereby grants to                         (the “Director”), an option pursuant to the Company’s 2000 Non-EmployeeDirectors’ Stock Option Plan (the “Plan”) to purchase an aggregate of                  shares of Common Stock, $.01 par value per share, of the Company (“Common Stock”)at a price of $             per share, purchasable as set forth in and subject to the terms and conditionsof this option and the Plan.  A copy ofthe Plan is attached hereto and is hereby incorporated by reference herein. Thedate of grant of this option is hereinafter referred to as the “Grant Date.”

 

2.                                       Exercise of Option.

 

(a)                                  Except as otherwise provided herein, thisoption is exercisable for the first time with respect to 1/36th ofthe shares initially covered hereby on each monthly anniversary date of theGrant Date, such that the option shall be exercisable in full three years afterthe Grant Date.  To the extent notexercised, installments shall be cumulative and shall be exercisable in wholeor in part; provided that no partial exercise of the option shall be for lessthan 10 whole shares.

 

This option shall become fully exercisable,irrespective of the limitations set forth above, provided that the Director hasbeen in Continuous Service since the Grant Date, upon the Director beingremoved from the Board of Directors following a Change in Control.  This option may not be exercised at any timeafter the tenth anniversary of the Grant Date.

 

(b)                                 Subject to the conditions hereof, this optionshall be exercisable by the Director contacting the Company’s designated stockoption administration representative, specifying the number of shares to bepurchased and the exercise price to be paid therefor and accompanied by paymentof the exercise price in verifiable funds or as otherwise provided for in thePlan.

 

(c)                                  A “Change in Control” shall be deemed to haveoccurred as of the date that one or more of the following occurs:

 

(i)                                     Individuals who, as of the date hereof,constitute the entire Board of Directors of the Company (“Incumbent Directors”)cease for any reason to constitute at least a majority of the Board; provided,however, that any individual becoming a director subsequent to the date hereofwhose election, or nomination for election by the Company’s stockholders, wasapproved by a vote of at least a majority of the then

 

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IncumbentDirectors shall be considered as though such individual was an IncumbentDirector, but excluding, for this purpose any such individual whose initialassumption of office occurs as a result of either an actual or threatenedelection contest, as such terms are used in Rule 14a-11 under the SecuritiesExchange Act of 1934, as amended (“Exchange Act”) or other actual or threatenedsolicitation of proxies or consents by or on behalf of any Person (as definedbelow) other than the Board;

 

(ii)                                  The stockholders of the Company shall approve(A) any merger, consolidation or recapitalization of the Company (or, if thecapital stock of the Company is affected, any subsidiary of the Company), orany sale, lease, or other transfer (in one transaction or a series of transactionscontemplated or arranged by any party as a single plan) of all or substantiallyall of the assets of the Company (each of the foregoing being an “AcquisitionTransaction”) where (1) the stockholders of the Company immediately prior tosuch Acquisition Transaction would not immediately after such AcquisitionTransaction beneficially own, directly or indirectly, shares or other ownershipinterests representing in the aggregate fifty one percent (51%) or more of (a)the then outstanding common stock or other equity interests of the corporationor other entity surviving or resulting from such merger, consolidation orrecapitalization or acquiring such assets of the Company, as the case may be(the “Surviving Entity”) (or of its ultimate parent corporation or otherentity, if any), and (b) the Combined Voting Power of the then outstandingVoting Securities of the Surviving Entity (or of its ultimate parentcorporation or other entity, if any) or (2) the Incumbent Directors at the timeof the initial approval of such Acquisition Transaction would not immediatelyafter such Acquisition Transaction constitute a majority of the Board ofDirectors, or similar managing group, of the Surviving Entity (or of itsultimate parent corporation or other entity, if any), or (B) any plan orproposal for the liquidation or dissolution of the Company; or

 

(iii)  Any Person other than Nancy T. Chang or TseWen Chang shall be or become the beneficial owner (as defined in Rules 13d-3and 13d-5 under the Exchange Act), directly or indirectly, of securities of theCompany representing in the aggregate more than forty percent (40%) of either(A) the then outstanding shares of common stock of the Company (“Common Stock”)or (B) the Combined Voting Power of all then outstanding Voting Securities ofthe Company; provided, however, that notwithstanding the foregoing, a Change inControl shall not be deemed to have occurred for purposes of this Subsection (iii):

 

(1)Solely as a result of an acquisition of securities by the Company which, byreducing the number of Common Stock or other Voting Securities outstanding,increases (a) the proportionate number of Common Stock beneficially owned byany Person to more than forty percent (40%) of the Common Stock thenoutstanding, or (b) the proportionate voting power represented by the VotingSecurities beneficially owned by any Person to more than forty percent (40%) ofthe Combined Voting Power of all then outstanding Voting Securities; or

 

(2)Solely as a result of an acquisition of securities directly from the Companyexcept for any conversion of a security that was not acquired directly from theCompany,

 

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(3)provided, further, that if any Person referred to in paragraph (1) or (2) ofthis Subsection (iii) shall thereafter become the beneficial owner of anyadditional Common Stock or other Voting Securities of the Company (other thanpursuant to a stock split, stock dividend or similar transaction), then aChange in Control shall be deemed to have occurred for purposes of this Subsection (iii).

 

(iv)                              For purposes of this Section (c):

 

(1)  “Affiliate” shall mean, as to a specifiedPerson, another Person that directly, or indirectly through one or moreintermediaries, controls or is controlled by, or is under common control with,the specified Person, within the meaning of such terms as used in Rule 405under the Securities Act of 1933, as amended (“Securities Act”), or anysuccessor rule.

 

(2)  “Combined Voting Power” shall mean theaggregate votes entitled to be cast generally in the election of the Board ofDirectors, or similar managing group, of a corporation or other entity byholders of then outstanding Voting Securities of such corporation or otherentity.

 

(3)  “Person” shall mean any individual, entity(including, without limitation, any corporation, partnership, trust, jointventure, association or governmental body) or group (as defined in Sections14(d)(3) or 15(d)(2) of the Exchange Act and the rules and regulationsthereunder); provided, however, that Person shall not include the Company, anyof its subsidiaries, any employee benefit plan of the Company or any of itsmajority-owned subsidiaries or any entity organized, appointed or establishedby the Company or such subsidiaries for or pursuant to the terms of any suchplan.

 

(4)  “Voting Securities” shall mean all securitiesof a corporation or other entity having the right under ordinary circumstancesto vote in an election of the Board of Directors, or similar managing group, ofsuch corporation or other entity.

 

3.                                       Delivery of Shares.

 

The Representative shall, upon receipt of theexercise price, together with all applicable taxes and fees, and verificationof funds for the number of shares purchased and paid for, make prompt deliveryof such shares to the Director, provided that if any law or regulation requiresthe Representative or the Company to take any action with respect to suchshares before the issuance thereof, then the date of delivery of such sharesshall be extended for the period necessary to complete such action.  No shares shall be issued and delivered uponexercise of any option unless and until, in the opinion of counsel for theCompany, any applicable registration requirements of the Securities Act, anyapplicable listing requirements of any national securities exchange on whichstock of the same class is then listed, and any other requirements of law or ofany regulatory bodies having jurisdiction over such issuance and delivery,shall have been fully complied with.

 

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4.                                       Miscellaneous.

 

(a)                                  Except as provided herein, this Agreement maynot be amended or otherwise modified unless evidenced in writing and signed bythe Company and the Director.

 

(b)                                 All notices under this Agreement shall bemailed or delivered by hand to the parties at their respective addresses set forthbeneath their names below or at such other address as may be designated inwriting by either of the parties to one another.

 

(c)                                  This Agreement shall be governed by andconstrued in accordance with the laws of the State of Texas.

 

 
| Grant Date: | TANOX, INC. |   |
|-------------|-------------|--------|
|        |        | By:    |   |   |   |
|        | Title:      |   |   |
|        | Address:    |   |   |
|             |             |        |  |  |  |  |  |

 

DIRECTOR’SACCEPTANCE

 

Theundersigned hereby accepts the foregoing option and agrees to the terms andconditions thereof.

 
| DIRECTOR  |
|-----------|
|      |   |
|      |   |
| Signature |

 

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TANOX, INC.

NON-QUALIFIED STOCK OPTIONAGREEMENT

*2000 Non-Employee Directors’ Stock Option Plan*

 

1.Grant of Option.

 

TANOX,INC., a Delaware corporation (the Company”), hereby grants to                   (the “Director”) an option pursuant to the Company’s 2000 Non-EmployeeDirectors’ Stock Option Plan (the “Plan”) to purchase an aggregate of              shares of Common Stock, $01 par value per share, of the Company (“Common Stock”)at a price of                  per share, purchasable as set forth in and subject to the terms and conditionsof this option and the Plan. A copy of the Plan is attached hereto and ishereby incorporated by reference herein. The date of grant of this option ishereinafter referred to as the “date of grant.”

 

2.Exercise of Option.

 

(a)                                  Except as otherwise provided herein, thisoption is exercisable for the first time with respect to 1/36th of the sharesinitially covered hereby on each monthly anniversary date of the date of grant,such that the option shall be exercisable in full three years after the date ofgrant. To the extent not exercised, installments shall be cumulative and shallbe exercisable in whole or in part; provided that no partial exercise of theoption shall be for less than 10 whole shares.

 

Inaddition to any provisions contained in the Plan with respect to a change incontrol of the Company, this option shall become fully exercisable,irrespective of the limitations set forth above, provided that the Director hasbeen in Continuous Service since the date of grant, upon the Director beingremoved from the Board of Directors following a Change in Control (as definedbelow). This option may not be exercised at any time after the tenthanniversary of the date of grant.

 

(b)                                 Subject to the conditions hereof, this optionshall be exercisable by the Director giving written notice of exercise to theCompany, specifying the number of shares to be purchased and the purchase priceto be paid therefor and accompanied by payment of the exercise price in cash orby check or as otherwise provided for in the Plan. Such exercise shall beeffective upon receipt by the Treasurer of the Company of the written noticetogether with the required payment.

 

(c)                                  A “Change in Control” for purposes of thisagreement shall be deemed to have occurred as of the date that one or more ofthe following occurs:

 

(i)                                     Individuals who, as of the date hereof,constitute the entire Board of Directors of the Company (“Incumbent Directors”)cease for any reason to constitute at least a majority of the Board; provided,however, that any individual becoming a director subsequent to the date hereofwhose election, or nomination for election by the Company’s stockholders, wasapproved by a vote of at least a majority of the then

 

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IncumbentDirectors shall be considered as though such individual was an Incumbent Director,but excluding, for this purpose any such individual whose initial assumption ofoffice occurs as a result of either an actual or threatened election contest,as such terms are used in Rule 1 4a-1 1 under the Securities Exchange Act of1934, as amended (“Exchange Act”) or other actual or threatened solicitation ofproxies or consents by or on behalf of any Person (as defined below) other thanthe Board;

 

(ii)                                  The stockholders of the Company shall approve(A) any merger, consolidation or recapitalization of the Company (or, if thecapital stock of the Company is affected, any subsidiary of the Company), orany sale, lease, or other transfer (in one transaction or a series oftransactions contemplated or arranged by any party as a single plan) of all orsubstantially all of the assets of the Company (each of the foregoing being an ‘AcquisitionTransaction”) where (1) the stockholders of the Company immediately prior tosuch Acquisition Transaction would not immediately after such AcquisitionTransaction beneficially own, directly or indirectly, shares or other ownershipinterests representing in the aggregate fifty one percent (51%) or more of (a)the then outstanding common stock or other equity interests of the corporationor other entity surviving or resulting from such merger, consolidation orrecapitalization or acquiring such assets of the Company, as the case may be(the “Surviving Entity) (or of its ultimate parent corporation or other entity,if any), and (b) the Combined Voting Power of the then outstanding VotingSecurities of the Surviving Entity (or of its ultimate parent corporation orother entity, if any) or (2) the Incumbent Directors at the time of the initialapproval of such Acquisition Transaction would not immediately after such AcquisitionTransaction constitute a majority of the Board of Directors, or similarmanaging group, of the Surviving Entity (or of its ultimate parent corporationor other entity, if any), or (B) any plan or proposal for the liquidation ordissolution of the Company; or

 

(iii)Any Person other than Nancy T. Chang or Tse Wen Chang shall be or become thebeneficial owner (as defined in Rules 1 3d-3 and 1 3d-5 under the ExchangeAct), directly or indirectly, of securities of the Company representing in theaggregate more than forty percent (40%) of either (A) the then outstandingshares of common stock of the Company (“Common Stock”) or (B) the CombinedVoting Power of all then outstanding Voting Securities of the Company;provided, however, that notwithstanding the foregoing, a Change in Controlshall not be deemed to have occurred for purposes of this Subsection (iii):

 

(1)                                  Solely as a result of an acquisition ofsecurities by the Company which, by reducing the number of Common Stock orother Voting Securities outstanding, increases (a) the proportionate number ofCommon Stock beneficially owned by any Person to more than forty percent (40%)of the Common Stock then outstanding, or (b) the proportionate voting powerrepresented by the Voting Securities beneficially owned by any Person to morethan forty percent (40%) of the Combined Voting Power of all then outstandingVoting Securities; or

 

(2)                                  Solely as a result of an acquisition ofsecurities directly from the Company except for any conversion of a securitythat was not acquired directly from the Company,

 

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(3)                                  provided, further, that if any Personreferred to in paragraph (1) or (2) of this Subsection (iii) shallthereafter become the beneficial owner of any additional Common Stock or otherVoting Securities of the Company (other than pursuant to a stock split, stockdividend or similar transaction), then a Change in Control shall be deemed tohave occurred for purposes of this Subsection (iii).

 

(iv)For purposes of this Section (c):

 

(1)                                  “Affiliate” shall mean, as to a specifiedPerson, another Person that directly, or indirectly through one or moreintermediaries, controls or is controlled by, or is under common control with,the specified Person, within the meaning of such terms as used in Rule 405under the Securities Act of 1933, as amended (“Securities Act”), or anysuccessor rule.

 

(2)                                  “Combined Voting Power” shall mean theaggregate votes entitled to be cast generally in the election of the Board ofDirectors, or similar managing group, of a corporation or other entity byholders of then outstanding Voting Securities of such corporation or otherentity.

 

(3)                                  “Person” shall mean any individual, entity(including, without limitation, any corporation, partnership, trust, jointventure, association or governmental body) or group (as defined in Sections14(d)(3) or 1 5(d)(2) of the Exchange Act and the rules and regulationsthereunder); provided, however, that Person shall not include the Company, anyof its subsidiaries, any employee benefit plan of the Company or any of itsmajority-owned subsidiaries or any entity organized, appointed or establishedby the Company or such subsidiaries for or pursuant to the terms of any suchplan.

 

(4)                                  “Voting Securities” shall mean all securitiesof a corporation or other entity having the right under ordinary circumstancesto vote in an election of the Board of Directors, or similar managing group, ofsuch corporation or other entity.

 

3.                                       Delivery of Shares.

 

TheCompany shall, upon receipt of the purchase price, and verification of fundsfor the number of shares purchased and paid for, make prompt delivery of suchshares to the Director, provided that if any law or regulation requires theCompany to take any action with respect to such shares before the issuancethereof, then the date of delivery of such shares shall be extended for theperiod necessary to complete such action. No shares shall be issued anddelivered upon exercise of any option unless and until, in the opinion ofcounsel for the Company, any applicable registration requirements of theSecurities Act, any applicable listing requirements of any national securitiesexchange on which stock of the same class is then listed, and any otherrequirements of law or of any regulatory bodies having jurisdiction over such issuanceand delivery, shall have been fully complied with.

 

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4.                                       Certain Limits.

 

Notwithstandinganything in this Agreement to the contrary, if any amounts due to the Directorunder this Agreement and any other plan or program of the Company constitute a “parachutepayment,” as such term is defined in Code Section 280G(b)(2), and theamount of the parachute payment, reduced by all federal, state and local taxesapplicable thereto, including the excise tax imposed pursuant to Code Section 4999,is less than the amount the Director would receive if he were paid three timeshis “base amount,” as defined in Code Section 280G(b)(3), less one dollar,reduced by all federal, state and local taxes applicable thereto, then theaggregate of the amounts constituting the parachute payment shall be reduced toan amount that will equal three times his base amount less one dollar. Thedeterminations to be made with respect to this section shall be made by anaccounting firm jointly selected by the Company’s Board of Directors and theDirector and paid by the Company, and which may be the Company’s independentauditors.

 

5.Miscellaneous.

 

(a)                                  Except as provided herein, this Agreement maynot be amended or otherwise modified unless evidenced in writing and signed bythe Company and the Director.

 

(b)                                 All notices under this Agreement shall bemailed or delivered by hand to the parties at their respective addresses setforth beneath their names below or at such other address as may be designatedin writing by either of the parties to one another.

 

(c)                                  This Agreement shall be governed by andconstrued in accordance with the laws of the State of Texas.

 

 
| Date of Grant: | TANOX, INC. |
|----------------|-------------|
|           |        | By: |   |   |
|           | Title:      |   |   |
|           | Address:    |   |   |
|                |             |  |  |  |  |  |  |  |

 

DIRECTOR’SACCEPTANCE

 

Theundersigned hereby accepts the foregoing option and agrees to the terms andconditions thereof.

 
| DIRECTOR  |
|-----------|
|      |   |
| Signature |
| Address:  |   |   |
|           |  |  |  |

 

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STOCK OPTION AGREEMENT

 

Agreementmade effective as of the                            ,between TANOX, INC., a Delaware corporation (the “Company”), and                     (“Director’) to carry out the purposes of the Tanox, Inc. 1992 Non-EmployeeDirectors Stock Option Plan (the Plan”), a copy of which is attached hereto asExhibit A, by affording Director the opportunity to purchase shares of the $01par value common stock of the Company (the “Stock”).

 

Inconsideration of the mutual agreements and other matters set forth herein andin the Plan, the Company and Director hereby agree as follows:

 

1.Grant of Option.

 

TheCompany hereby grants to Director an option pursuant to the Plan to purchase anaggregate of               shares of Stock at a price of                 per share, purchasable as set forth in and subject to the terms and conditionsof this Option and the Plan.

 

TheOption may not be assigned, transferred or disposed of by Director other thanby will or the laws of descent and distribution. For purposes of thisParagraph, “disposed of” shall mean any gift or inter vivos transfer; anytransfer to a trust; any lien, pledge, mortgage or other encumbrance; anytransfer by reason of marital property laws or any decree of divorce,separation or property division; any disposition pursuant to court, bankruptcy,administrative or similar proceedings; or any disposition whatsoever, whethervoluntary or involuntary. During Director’s lifetime, the Option shall beexercisable only by Director. Upon death, disability, cessation of service orvoluntary resignation, the Option shall be exercisable under the terms of Article VIof the Plan.

 

2.                                       Exercise of Option.

 

(a)Subject to the earlier expiration or termination of this Option as providedunder the Plan, this Option may be exercised for such percentage of theaggregate number of shares covered by this Option as determined in accordancewith the following schedule:

 

1/36th of the shares initially covered by this Option shall become exercisable oneach monthly anniversary of the date of grant, such that the Option shall befully exercisable three years after the date of grant.

 

Tothe extent not exercised, installments shall be cumulative and shall beexercisable in whole or in part; provided that no partial exercise of theOption shall be for less than 10 whole shares.

 

Providedthat Director has been in Continuous Service (as defined below) since the dateof grant, this option shall become fully exercisable, irrespective of thelimitations set forth above, upon the Director being removed from the Board ofDirectors following

 

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aChange in Control (as defined below). This option may not be exercised at any timeafter the tenth anniversary of the date of grant.

 

(b)Subject to the conditions hereof, Director may exercise giving written noticethereof to the Company, specifying the number of shares to be purchased and thepurchase price to be paid therefor and accompanied by payment of the exerciseprice in cash or by check or as otherwise provided for in the Plan. Suchexercise shall be effective upon receipt by the Company of the written noticetogether with the required payment.

 

(c)A “Change in Control” for purposes of this agreement shall be deemed to haveoccurred as of the date that one or more of the following occurs:

 

(i)                                     Individuals who, as of the date hereof,constitute the entire Board of Directors of the Company (“Incumbent Directors”)cease for any reason to constitute at least a majority of the Board; provided,however, that any individual becoming a director subsequent to the date hereofwhose election, or nomination for election by the Company’s stockholders, wasapproved by a vote of at least a majority of the then Incumbent Directors shallbe considered as though such individual was an Incumbent Director, butexcluding, for this purpose any such individual whose initial assumption ofoffice occurs as a result of either an actual or threatened election contest,as such terms are used in Rule 14a-1 1 under the Securities Exchange Act of1934, as amended (“Exchange Act”) or other actual or threatened solicitation ofproxies or consents by or on behalf of any Person (as defined below) other thanthe Board;

 

(ii)                                  The stockholders of the Company shall approve(A) any merger, consolidation or recapitalization of the Company (or, if thecapital stock of the Company is affected, any subsidiary of the Company), orany sale, lease, or other transfer (in one transaction or a series oftransactions contemplated or arranged by any party as a single plan) of all orsubstantially all of the assets of the Company (each of the foregoing being an “AcquisitionTransaction’) where (1) the stockholders of the Company immediately prior tosuch Acquisition Transaction would not immediately after such AcquisitionTransaction beneficially own, directly or indirectly, shares or other ownershipinterests representing in the aggregate fifty one percent (51%) or more of (a)the then outstanding common stock or other equity interests of the corporationor other entity surviving or resulting from such merger, consolidation orrecapitalization or acquiring such assets of the Company, as the case maybe(the “Surviving Entity”) (or of its ultimate parent corporation or otherentity, if any), and (b) the Combined Voting Power of the then outstandingVoting Securities of the Surviving Entity (or of its ultimate parentcorporation or other entity, if any) or (2) the Incumbent Directors at the timeof the initial approval of such Acquisition Transaction would not immediatelyafter such Acquisition Transaction constitute a majority of the Board ofDirectors, or similar managing group, of the Surviving Entity (or of itsultimate parent corporation or other entity, if any), or (B) any plan orproposal for the liquidation or dissolution of the Company; or

 

(iii)Any Person other than Nancy T. Chang or Tse Wen Chang shall be or become thebeneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act),directly

 

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orindirectly, of securities of the Company representing in the aggregate morethan forty percent (40%) of either (A) the then outstanding shares of commonstock of the Company (“Common Stock”) or (B) the Combined Voting Power of allthen outstanding Voting Securities of the Company; provided, however, thatnotwithstanding the foregoing, a Change in Control shall not be deemed to haveoccurred for purposes of this Subsection (iii):

 

(1)*                                 *Solely as a result of an acquisition ofsecurities by the Company which, by reducing the number of Common Stock orother Voting Securities outstanding, increases (a) the proportionate number ofCommon Stock beneficially owned by any Person to more than forty percent (40%)of the Common Stock then outstanding, or (b) the proportionate voting powerrepresented by the Voting Securities beneficially owned by any Person to morethan forty percent (40%) of the Combined Voting Power of all then outstandingVoting Securities; or

 

(2)                                  Solely as a result of an acquisition ofsecurities directly from the Company except for any conversion of a securitythat was not acquired directly from the Company,

 

(3)                                  provided further, that, if any Personreferred to in paragraph (1) or (2) of this Subsection (iii) shallthereafter become the beneficial owner of any additional Common Stock or otherVoting Securities of the Company (other than pursuant to a stock split, stockdividend or similar transaction), then a Change in Control shall be deemed tohave occurred for purposes of this Subsection (iii).

 

(iv)For purposes of this Section (c):

 

(1)                                  “Affiliate’ shall mean, as to a specifiedPerson, another Person that directly, or indirectly through one or moreintermediaries, controls or is controlled by, or is under common control with,the specified Person, within the meaning of such terms as used in Rule 405under the Securities Act of 1933, as amended (“Securities Act”), or anysuccessor rule.

 

(2)                                  “Combined Voting Power” shall mean theaggregate votes entitled to be cast generally in the election of the Board ofDirectors, or similar managing group, of a corporation or other entity byholders of then outstanding Voting Securities of such corporation or otherentity.

 

(3)                                  “Person” shall mean any individual, entity(including, without limitation, any corporation, partnership, trust, jointventure, association or governmental body) or group (as defined in Sections14(d)(3) or 15(d)(2) of the Exchange Act and the rules and regulationsthereunder); provided, however, that Person shall not include the Company, anyof its subsidiaries, any employee benefit plan of the Company or any of itsmajority-owned subsidiaries or any entity organized, appointed or establishedby the Company or such subsidiaries for or pursuant to the terms of any suchplan.

 

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(4)                                  “Voting Securities” shall mean all securitiesof a corporation or other entity having the right under ordinary circumstancesto vote in an election of the Board of Directors, or similar managing group, ofsuch corporation or other entity.

 

Inno event shall this Option be exercisable after the expiration of ten (10)years from the date of grant hereof. The purchase price of shares as to whichthis Option is exercised shall be paid in full at the time of exercise (a) incash (including electronic wire, certified bank draft or money order payable tothe order of the Company), (b) by delivering to the Company unrestricted sharesof Stock held by Director for more than six months having a fair market valueequal to the purchase price, or (c) a combination of cash and such shares ofStock. For purposes of this Agreement, fair market value of the Stock shall bedetermined in accordance with the provisions of the Plan. No fraction of ashare of Stock shall be issued by the Company upon exercise of a option oraccepted by the Company in payment of the exercise price thereof; rather,Director shall provide a cash payment for such cash amount as is necessary toeffect the issuance and acceptance of only whole shares of Stock.

 

Unlessand until a certificate or certificates representing such shares shall havebeen issued by the Company to Director, Director (or the person permitted toexercise this Option in the event of Director’s death) shall not be or have anyof the rights or privileges of a shareholder of the Company with respect toshares acquirable upon an exercise of this Option.

 

3.Withholding of Tax.

 

Tothe extent that the exercise of this Option or the disposition of shares ofStock acquired by exercise of this Option results in compensation income toDirector for federal or state income tax purposes, Director shall pay to theCompany at the time of such exercise or disposition such amount of money as theCompany may require to meet its obligation under applicable tax laws or regulationsand, if Director fails to do so, the Company is authorized to withhold from anycash remuneration then or thereafter payable to Director any tax required to bewithheld by reason of such resulting compensation income.

 

4.Termination of Relationship.

 

Anyquestion as to whether and when there has been a termination of Director’sposition with the Company, and the cause of such termination, shall bedetermined by the Board of Directors of Company, and its determination shall befinal. Neither the Plan, this Agreement nor the award of this Option shall bedeemed to create any obligation on the part of the Company or its Board ofDirectors-to nominate Director for reelection by the Company’s shareholders,nor confer upon Director the right to remain a member of the Board of Directorsfor any period of time, or at any particular rate of compensation.

 

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5.Binding Effect. This Agreement shall be binding upon and inure to thebenefit of any successors to the Company and all persons lawfully claimingunder Director.

 

INWITNESS WHEREOF, the Company has caused this Agreement to be executed by one ofits duly authorized officers, and Director has executed this Agreement, all asof the day and year first above written.

 
|   | TANOX, INC. |
|--------|-------------|
|   | By:         |   |   |
|   |        |
|   |        |   |
|   | Director    |

 

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STOCK OPTION AGREEMENT

 

Agreementmade effective as of the          dayof               ,between TANOX, INC., a Texas corporation (the “Company”), and                       (‘Director”).

 

Tocarry out the purposes of the Tanox Biosystems, Inc. 1992 Non-EmployeeDirectors Stock Option Plan (the “Plan”), a copy of which is attached hereto asExhibit A, by affording Director the opportunity to purchase shares of the $01par value common stock of the Company (the “Stock”), and in consideration ofthe mutual agreements and other matters set forth herein and in the Plan, theCompany and Director hereby agree as follows:

 

1.                                       Grant of Option. The Company hereby irrevocably grants toDirector the right and option (“Option”) to purchase all or any part of an aggregateof             shares of Stock, on the terms and conditions set forth herein and in the Plan,which is incorporated herein by reference as a part of this Option. This Optionis not intended to constitute an incentive stock option, within the meaning of section 422A(b) of the Internal Revenue Code of 1986, as amended (the “Code”).

 

ThisAgreement, the grant of the Option, the Option and the exercise of the Optionare in all respects governed by the provisions of the Plan. The Option may notbe assigned, transferred or disposed of by Director other than by will or thelaws of descent and distribution. For purposes of this Paragraph, ‘disposed of’shall mean any gift or inter vivos transfer; any transfer to a trust: any lien,pledge, mortgage or other encumbrance; any transfer by reason of maritalproperty laws or any decree of divorce, separation or property division; anydisposition pursuant to court, bankruptcy, administrative or similarproceedings; or any disposition whatsoever, whether voluntary or involuntary.During Director’s lifetime, the Option shall be exercisable only by Director.Upon death, disability, cessation of service or voluntary resignation, theOption shall be exercisable under the terms of Article VI of the Plan. +

 

2.                                       Purchase Price. The purchase price of Stock purchasedpursuant to the exercise of this Option shall be             per share.

 

3.                                       Exercise of Option. Subject to the earlier expiration ortermination of this Option as provided under the Plan, this Option shall becumulative and may be exercised, by written notice to the Company, only at suchtime or times and for such percentage of the aggregate number of shares offeredby this Option, determined by the number of full years from the date of granthereof to the date of such exercise, in accordance with the following schedule:

 

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| **Number of  Full Years** | ** ** | **Number of  Shares  Purchasable** | ** ** | **Cumulative  Shares  Purchasable** | ** ** |
|---------------------------|------------|------------------------------------|------------|-------------------------------------|------------|
| 1 year                    |       |                               |       |                                |       |
| 2years                    |       |                               |       |                                |       |
| 3 years                   |       |                               |       |                                |       |

 

Notwithstandingthe foregoing, no Option shall be exercisable until the information required byRule 1 6b-3(b) of the Securities Exchange act of 1934, as amended, with respectto the Plan is disseminated in accordance with the provisions of such Rule onor prior to the date of the first annual meeting of shareholders held after thefirst registration of an equity security of the Company under Section 12of such Act.

 

Ator prior to the time this Option becomes exercisable, the Company shall provideto Director certain information regarding the Company and the Stock useful toDirector in making an investment decision, if such information is not otherwiseavailable to Director.

 

Inno event shall this Option be exercisable after the expiration of One HundredTwenty-One (121) months from the date of grant hereof. The purchase price ofshares as to which this Option is exercised shall be paid in full at the timeof exercise (a) in cash (including check, bank draft or money order payable tothe order of the Company), (b) by delivering to the Company unrestricted sharesof Stock held by Director for more than six months having a fair market valueequal to the purchase price, or (c) a combination of cash and such shares ofStock. For purposes of this Agreement, fair market value of the Stock shall bedetermined in accordance with the provisions of the Plan. No fraction of ashare of Stock shall be issued by the Company upon exercise of a option oraccepted by the Company in payment of the exercise price thereof; rather,Director shall provide a cash payment for such cash amount as is necessary toeffect the issuance and acceptance of only whole shares of Stock.

 

Unlessand until a certificate or certificates representing such shares shall havebeen issued by the Company to Director, Director (or the person permitted toexercise this Option in the event of Directors death) shall not be or have anyof the rights or privileges of a shareholder of the Company with respect toshares acquirable upon an exercise of this Option.

 

4.                                       Withholding of Tax. To the extent that the exercise of this Optionor the disposition of shares of Stock acquired by exercise of this Optionresults in compensation income to Director for federal or state income taxpurposes, Director shall pay to the Company at the time of such exercise ordisposition such amount of money as the Company may require to meet itsobligation under applicable tax laws or regulations and, if Director fails todo so, the Company is authorized to withhold from any cash remuneration then orthereafter payable to Director any tax required to be withheld by reason ofsuch resulting compensation income.

 

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5.                                       Status of Stock. The Company may register for issue underthe Securities Act of 1933, as amended (the “Act”), the Option and the sharesof Stock acquirable upon exercise of this Option, and may keep suchregistration effective throughout the period this Option is exercisable. In theabsence of such effective registration or an available exemption fromregistration under the Act, exercise of this Option and delivery of shares ofStock acquirable upon such exercise will be delayed until registration of suchshares is effective or an exemption from registration under the Act isavailable. If the stock is not registered and an exemption from registrationunder the Act is available upon an exercise of this Option, Director (or theperson permitted to exercise this Option in the event of Director’s death orincapacity), if requested by the Company to do so, will be required to executeand deliver to the Company in writing an agreement containing suchrepresentations and other provisions as the Company may require to evidenceDirector’s qualification to acquire the Stock and otherwise assure compliancewith applicable securities laws.

 

Nosale, transfer or other disposition of any shares of Stock acquired uponexercise of this Option shall be made in the absence of an effectiveregistration statement being on file with respect to such shares under the Actunless an opinion of counsel satisfactory to the Company that such sale ordisposition will not constitute a violation of the Act or any other applicablesecurities laws is first delivered by Director to the Company.

 

Thecertificates representing shares of Stock acquired under this Option may bearsuch legend as the Committee deems appropriate, referring to the provisions ofthis Paragraph 5.

 

6.                                       Termination of Relationship. Any question as to whether and when therehas been a termination of Director’s position with the Company, and the causeof such termination, shall be determined by the Board of Directors of Company,and its determination shall be final. Neither the Plan, this Agreement nor theaward of this Option shall be deemed to create any obligation on the part ofthe Company or its Board of Directors to nominate Director for reelection bythe Company’s shareholders, nor confer upon Director the right to remain amember of the Board of Directors for any period of time, or at any particularrate of compensation.

 

7.                                       Binding Effect. This Agreement shall be binding upon andinure to the benefit of any successors to the Company and all persons lawfullyclaiming under Director.

 

INWITNESS WHEREOF, the Company has caused this Agreement to be executed by one ofits duly authorized officers, and Director has executed this Agreement, all asof the day and year first above written.

 
|   | TANOX, INC. |
|--------|-------------|
|   | BY:         |   |   |
|   |        |   |
|   |        |   |
|   | Director    |
|        |             |  |  |  |

 

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