Document:

Exhibit 10.2

  

 

 

MICROVISION, INC.

 

1996 STOCK OPTION PLAN,

AS AMENDED

 

TABLE OF CONTENTS

	

  1.

  	

  Purpose

  
	

   

  	

   

  
	

  2.

  	

  Administration

  
	

   

  	

   

  	

   

  
	

   

  	

  2.1

  	

  Procedures

  
	

   

  	

   

  	

   

  
	

   

  	

  2.2

  	

  Powers

  
	

   

  	

   

  	

   

  
	

   

  	

  2.3

  	

  Limited Liability

  
	

   

  	

   

  	

   

  
	

   

  	

  2.4

  	

  Securities Exchange Act of 1934

  
	

   

  	

   

  
	

  3.

  	

  Stock Subject to This Plan

  
	

   

  	

   

  
	

  4.

  	

  Eligibility

  
	

   

  	

   

  	

   

  
	

   

  	

  4.1

  	

  Optionees

  
	

   

  	

   

  	

   

  
	

   

  	

  4.2

  	

  Subsidiaries

  
	

   

  	

   

  
	

  5.

  	

  Awards

  
	

   

  	

   

  	

   

  
	

   

  	

  5.1

  	

  Incentive Stock Options

  
	

   

  	

   

  	

   

  
	

   

  	

  5.2

  	

  Non-Qualified Stock Options

  
	

   

  	

   

  	

   

  
	

   

  	

  5.3

  	

  Vesting

  
	

   

  	

   

  	

   

  
	

   

  	

  5.4

  	

  Nontransferability

  
	

   

  	

   

  	

   

  
	

   

  	

  5.5

  	

  Termination of Options

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (a)

  Generally

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (b)

  For Cause; Resignation

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (c)

  Retirement

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (d)

  Disability

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (e) Death

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (f)

  Extension of Exercise Period Applicable to Termination

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (g) Failure to Exercise Option

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (h) Transfers; Leaves

  
	

   

  	

   

  
	

  6.

  	

  Exercise

  
	

   

  	

   

  	

   

  
	

   

  	

  6.1

  	

  Procedure

  
	

   

  	

   

  	

   

  
	

   

  	

  6.2

  	

  Payment

  
	

   

  	

   

  	

   

  
	

   

  	

  6.3

  	

  Withholding

  
	

   

  	

   

  	

   

  
	

   

  	

  6.4

  	

  Conditions Precedent to Exercise

  
	

   

  	

   

  
	

  7.

  	

  Foreign Qualified Grants

  
	

   

  	

   

  
	

  8.

  	

  Corporate Mergers, Acquisitions, Etc.

  
	

   

  	

   

  
	

  9.

  	

  Holding Period

  

 

i

 

	

  10.

  	

  Option Agreements

  
	

   

  	

   

  
	

  11.

  	

  Adjustments On Changes in Capitalization

  
	

   

  	

   

  	

   

  
	

   

  	

  11.1

  	

  Stock Splits, Capital Stock Adjustments

  
	

   

  	

   

  	

   

  
	

   

  	

  11.2

  	

  Effect of Merger, Sale of Assets, Liquidation or

  Dissolution

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (a) Mergers, Sale of Assets, Other Transactions

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (b)

  Liquidation; Dissolution

  
	

   

  	

   

  	

   

  
	

   

  	

  11.3

  	

  Fractional Shares

  
	

   

  	

   

  	

   

  
	

   

  	

  11.4

  	

  Determination of Board to Be Final

  
	

   

  	

   

  
	

  12.

  	

  Securities Regulations

  
	

   

  	

   

  
	

  13.

  	

  Amendment and Termination

  
	

   

  	

   

  	

   

  
	

   

  	

  13.1

  	

  Plan

  
	

   

  	

   

  	

   

  
	

   

  	

  13.2

  	

  Options

  
	

   

  	

   

  	

   

  
	

   

  	

  13.3

  	

  Automatic Termination

  
	

   

  	

   

  
	

  14.

  	

  Miscellaneous

  
	

   

  	

   

  	

   

  
	

   

  	

  14.1

  	

  Time of Granting Options

  
	

   

  	

   

  	

   

  
	

   

  	

  14.2

  	

  No Status as Shareholder

  
	

   

  	

   

  	

   

  
	

   

  	

  14.3

  	

  Status as an Employee

  
	

   

  	

   

  	

   

  
	

   

  	

  14.4

  	

  Reservation of Shares

  
	

   

  	

   

  
	

  15.

  	

  Effectiveness of This Plan

  

 

ii

 

MICROVISION, INC.

1996 STOCK OPTION PLAN,

AS AMENDED

        1.    Purpose.    The

purpose of the 1996 Stock Option Plan (the “Plan”) is to provide a means by

which Microvision, Inc. (the “Company”), may attract, reward, and retain

the services or advice of current or future employees, officers, consultants or

independent contractors of, and other advisors to, the Company and to provide

added incentives to them by encouraging stock ownership in the Company.

        2.    Administration.    This

Plan shall be administered by the Board of Directors of the Company (the

“Board”) or, if the Board shall authorize a committee to administer this Plan,

by such committee to the extent so authorized; provided, however, that only the

Board of Directors may suspend, amend or terminate this Plan as provided in

Section 13, and provided further that a committee that includes officers

of the Company shall not be permitted to grant options to persons who are

officers of the Company. The administrator of this Plan is referred to as the

“Plan Administrator.”

        2.1    Procedures.    The

Board of Directors shall designate one member of the Plan Administrator as

chairman. The Plan Administrator may hold meetings at such times and places as

it shall determine. The acts of a majority of the members of the Plan

Administrator present at meetings at which a quorum exists, or acts approved in

writing by all Plan Administrator members, shall constitute valid acts of the

Plan Administrator.

        2.2    Powers.    Subject

to the specific provisions of this Plan, the Plan Administrator shall have the

authority, in its discretion: (a) to grant the stock options described in

Section 5, including Incentive Stock Options and Non-Qualified Stock

Options, and to designate each option granted as an Incentive Stock Option or a

Non-Qualified Stock Option; (b) to determine, in accordance with

Section 5.1(f) of this Plan, the fair market value of the shares of Common

Stock subject to options; (c) to determine the exercise price per share of

options; (d) to determine the Optionees to whom, and the time or times at

which, options shall be granted and the number of shares of Common Stock to be

represented by each option; (e) to interpret this Plan; (f) to

prescribe, amend and rescind rules and regulations relating to this Plan;

(g) to determine the terms and provisions of each option granted (which

need not be identical) and, with the consent of the Optionee, modify or amend

each option; (h) to reduce the exercise price per share of outstanding and

unexercised options; (i) to defer, with the consent of the Optionee, or to

accelerate the exercise date of any option; (j) to waive or modify any

term or provision contained in any option applicable to the underlying shares

of Common Stock; (k) to authorize any person to execute on behalf of the

Company any instrument required to effectuate the grant of an option previously

granted by the Plan Administrator; and (l) to make all other

determinations deemed necessary or advisable for the administration of this

Plan. The interpretation and construction by the Plan Administrator of any

terms or provisions of this Plan, any option issued hereunder or of any rule or

regulation promulgated in connection herewith and all actions taken by the Plan

Administrator shall be conclusive and binding on all interested parties. The

Plan Administrator may delegate administrative functions to individuals who are

officers or employees of the Company.

        2.3    Limited

Liability.    No member of the Board of

Directors or the Plan Administrator or officer of the Company shall be liable

for any action or inaction of the entity or body, or another person or, except

in circumstances involving bad faith, of himself or herself. Subject only to

compliance with the explicit provisions hereof, the Board of Directors and Plan

Administrator may act in their absolute discretion in all matters related to

the Plan.

 

1

 

        2.4    Securities

Exchange Act of 1934.    At any time that the

Company has a class of securities registered pursuant to Section 12 of the

Securities Exchange Act of 1934, as amended (the “Exchange Act”), this Plan

shall be administered in accordance with Rule 16b-3 adopted under the

Exchange Act and Section 162(m) of the Internal Revenue Code of 1986, as

amended, and the regulations, proposed and final, thereunder, as all may be

amended from time to time, and each member of the Plan Administrator shall be a

“disinterested director” and an “outside director” within the meaning of such

Rule 16b-3 and Section 162(m), respectively.

        3.    Stock

Subject to This Plan.    Subject to

adjustment as provided below and in Section 11 hereof, the stock subject

to this Plan shall be the Company’s common stock (the “Common Stock”), and the

total number of shares of Common Stock to be delivered on the exercise of all

options granted under this Plan shall not exceed 8,000,000 shares, as such

Common Stock was constituted on the date on which this Plan was last amended by

the Board as set forth on the last page hereof. If any option granted under

this Plan expires, is surrendered, exchanged for another option, canceled or

terminated for any reason without having been exercised in full, the

unpurchased shares subject thereto shall again be available for purposes of

this Plan, including for replacement options that may be granted in exchange

for such surrendered, canceled or terminated options. Shares issued on exercise

of options granted under this Plan may be subject to restrictions on transfer,

repurchase rights or other restrictions as determined by the Plan

Administrator.

        4.    Eligibility.

        4.1    Optionees.    The

Plan Administrator may award options to any current or future employee,

officer, consultant or independent contractor of, or other advisor to, the

Company or its subsidiaries. Non-employee directors of the Company shall not be

eligible to participate in the Plan. Any party to whom an option is granted under

this Plan is referred to as an “Optionee.”

        4.2    Subsidiaries.    As

used in this Plan, the term “subsidiary” of a company shall include any

corporation in which such company owns, directly or indirectly, at the time of

the grant of an option hereunder, stock having 50% or more of the total

combined voting power of all classes of stock thereof.

        5.    Awards.    The

Plan Administrator, from time to time, may take the following actions,

separately or in combination, under this Plan: (a) grant Incentive Stock

Options, as defined in Section 422 of the Internal Revenue Code of 1986,

as amended (the “Code”), to any employee of the Company or its subsidiaries, as

provided in Section 5.1 of this Plan; (b) grant options other than

Incentive Stock Options (“Non-Qualified Stock Options”), as provided in

Section 5.2 of this Plan; (c) grant options to officers, employees

and others in foreign jurisdictions, as provided in Section 7 of this

Plan; and (d) grant options in certain acquisition transactions, as

provided in Section 8 of this Plan. No employee may be granted options to

acquire more than 100,000 shares in any fiscal year of the Company.

        5.1    Incentive

Stock Options.    Incentive Stock Options shall

be subject to the following terms and conditions:

        (a)  Incentive

Stock Options may be granted under this Plan only to employees of the Company

or its subsidiaries, including employees who are directors.

        (b)  No

employee may be granted Incentive Stock Options under this Plan to the extent

that the aggregate fair market value, on the date of grant, of the Common Stock

with respect to which Incentive Stock Options are exercisable for the first

time by that employee during any calendar year, under this Plan and under any

other incentive stock option plan (within the meaning of Section 422 of

the Code) of the Company or any

 

2

 

subsidiary, exceeds $100,000. To the extent that any option

designated as an Incentive Stock Option exceeds the $100,000 limit, such option

shall be treated as a Non-Qualified Stock Option. In making this determination,

options shall be taken into account in the order in which they were granted,

and the fair market value of the shares of Common Stock shall be determined as

of the time that the option with respect to such shares was granted.

        (c)  An

Incentive Stock Option may be granted under this Plan to an employee possessing

more than 10% of the total combined voting power of all classes of stock of the

Company (as determined pursuant to the attribution rules contained in

Section 424(d) of the Code) only if the exercise price is at least 110% of

the fair market value of the Common Stock subject to the option on the date the

option is granted, as described in Section 5.1(f) of this Plan, and only

if the option by its terms is not exercisable after the expiration of five

years from the date it is granted.

        (d)  Except

as provided in Section 5.5 of this Plan, no Incentive Stock Option granted

under this Plan may be exercised unless at the time of such exercise the

Optionee is employed by the Company or any subsidiary of the Company and the

Optionee has been so employed continuously since the date such option was

granted.

        (e)  Subject

to Sections 5.1.(c) and 5.1.(d) of this Plan, Incentive Stock Options granted

under this Plan shall continue in effect for the period fixed by the Plan

Administrator, except that no Incentive Stock Option shall be exercisable after

ten years from the date it is granted.

        (f)    The

exercise price shall not be less than 100% of the fair market value of the

shares of Common Stock covered by the Incentive Stock Option at the date the

option is granted. The fair market value of shares shall be the closing price

per share of the Common Stock on the date of grant as reported on a securities

quotation system or stock exchange. If such shares are not so reported or

listed, the Plan Administrator shall determine the fair market value of the

shares of Common Stock in its discretion.

        (g)  The

provisions of clauses (b) and (c) of this Section shall not apply if

either the applicable sections of the Code or the regulations thereunder are

amended so as to change or eliminate such limitations or to permit appropriate

modifications of those requirements by the Plan Administrator.

        5.2    Non-Qualified

Stock Options.    Non-Qualified Stock Options

shall be subject to the following terms and conditions:

        (a)  The

exercise price may be more or less than or equal to the fair market value of

the shares of Common Stock covered by the Non-Qualified Stock Option on the

date the option is granted, and the exercise price may fluctuate based on

criteria determined by the Plan Administrator. The fair market value of shares

of Common Stock covered by a Non-Qualified Stock Option shall be determined by

the Plan Administrator, as described in Section 5.1(f).

        (b)  Unless

otherwise established by the Plan Administrator, any Non-Qualified Stock Option

shall terminate ten years after the date it is granted.

        5.3    Vesting.    To

ensure that the Company will achieve the purposes of and receive the benefits

contemplated in this Plan, any option granted to any Optionee hereunder shall

be exercisable according to the vesting schedule, if any, established by the

Plan Administrator and set forth in the Option Agreement issued to each

Optionee.

 

3

 

        5.4    Nontransferability.    Options

granted under this Plan and the rights and privileges conferred hereby may not

be transferred, assigned, pledged or hypothecated in any manner (whether by

operation of law or otherwise) other than by will or by the applicable laws of

descent and distribution, shall not be subject to execution, attachment or

similar process, and shall be exercisable during the Optionee’s lifetime only

by the Optionee. Any purported transfer or assignment in violation of this

provision shall be void.

        5.5    Termination

of Options.

        (a)    Generally.    Unless

otherwise determined by the Plan Administrator or specified in the Optionee’s

Option Agreement, if the Optionee’s employment or service with the Company

terminates for any reason other than for cause, resignation in lieu of

dismissal, retirement, disability or death, and unless by its terms the option

sooner terminates or expires, then the Optionee may exercise, for a three-month

period, that portion of the Optionee’s option that was exercisable at the time

of such termination of employment or service (provided the conditions of

Section 6.4 and any other conditions specified in the Option Agreement

shall have been met by the date of exercise of such option).

        (b)    For Cause;

Resignation.    Unless otherwise determined by

the Plan Administrator or specified in the Optionee’s Option Agreement:

        (i)    If

an Optionee is terminated for cause or resigns in lieu of dismissal, any option

granted hereunder shall be deemed to have terminated as of the time of the

first act that led or would have led to the termination for cause or

resignation in lieu of dismissal, and such Optionee shall thereupon have no

right to purchase any shares of Common Stock pursuant to the exercise of such

option, and any such exercise shall be null and void. Termination for “cause”

shall include (i) the violation by the Optionee of any reasonable rule or

policy of the Company; (ii) any willful misconduct or gross negligence by

the Optionee in the responsibilities assigned to him or her; (iii) any

willful failure to perform his or her job as required to meet the objectives of

the Company; (iv) any wrongful conduct of an Optionee that has an adverse

impact on the Company or that constitutes a misappropriation of the assets of

the Company; (v) unauthorized disclosure of confidential information; or

(vi) the Optionee’s performing services for any other company or person

that competes with the Company while he or she is employed by or provides

services to the Company, without the written approval of the chief executive

officer of the Company. “Resignation in lieu of dismissal” shall mean a

resignation by an Optionee of employment with or service to the Company if

(i) the Company has given prior notice to such Optionee of its intent to

dismiss the Optionee for circumstances that constitute cause, or

(ii) within two months of the Optionee’s resignation, the chief operating

officer or the chief executive officer of the Company or the Board of Directors

determines, which determination shall be final and binding, that such

resignation was related to an act that would have led to a termination for

cause.

        (ii)  If

an Optionee resigns from the Company, the right of the Optionee to exercise his

or her option shall be suspended for a period of two months from the date of

resignation, unless the chief executive officer of the Company or the Board of

Directors determines otherwise in writing. Thereafter, unless there is a

determination that the Optionee resigned in lieu of dismissal, the option may

be exercised at any time before the earlier of (i) the expiration date of

the option (which shall have been similarly suspended) or (ii) the

expiration of three months after the date of resignation, for that portion of

the Optionee’s option that was exercisable at the time of such resignation

(provided the conditions of Section 6.4

 

4

 

and any other conditions specified in the Option Agreement

shall have been met at the date of exercise of such option).

        (c)    Retirement.    Unless

otherwise determined by the Plan Administrator or specified in the Optionee’s

Option Agreement, if an Optionee’s employment or service with the Company is

terminated with the Company’s approval for reasons of age, the Option may be

exercised at any time before the earlier of (a) the expiration date of the

option or (b) the expiration of three months after the date of such

termination of employment or service, for that portion of the Optionee’s option

that was exercisable at the time of such termination of employment or service

(provided the conditions of Section 6.4 and any other conditions specified

in the Option Agreement shall have been met at the date of exercise of such

option).

        (d)    Disability.    Unless

otherwise determined by the Plan Administrator or specified in the Optionee’s

Option Agreement, if an Optionee’s employment or relationship with the Company

terminates because of a permanent and total disability (as defined in

Section 22(e)(3) of the Code), the option may be exercised at any time

before the earlier of (a) the expiration date of the option or

(b) the expiration of 12 months after the date of such termination,

for up to the full number of shares of Common Stock covered thereby, including

any portion not yet vested (provided the conditions of Section 6.4 and any

other conditions specified in the Option Agreement shall have been met by the

date of exercise of such option).

        (e)    Death.    Unless

otherwise determined by the Plan Administrator or specified in the Optionee’s

Option Agreement, in the event of the death of an Optionee while employed by or

providing service to the Company, the option may be exercised at any time

before the earlier of (a) the expiration date of the option or

(b) the expiration of 12 months after the date of death by the person

or persons to whom such Optionee’s rights under the option shall pass by the

Optionee’s will or by the applicable laws of descent and distribution, for up

to the full number of shares of Common Stock covered thereby, including any

portion not yet vested (provided the conditions of Section 6.4 and any

other conditions specified in the Option Agreement shall have been met by the

date of exercise of such option).

        (f)    Extension

of Exercise Period Applicable to Termination.    The

Plan Administrator, at the time of grant or at any time thereafter, may extend

the one-month, three-month and 12-month exercise periods to any length of time

not longer than the original expiration date of the option, and may increase

the portion of an option that is exercisable, subject to such terms and

conditions as the Plan Administrator may determine; provided, that any

extension of the exercise period or other modification of an Incentive Stock

Option shall be subject to the written agreement and acknowledgment by the

Optionee that the extension or modification disqualifies the option as an

Incentive Stock Option.

        (g)    Failure to

Exercise Option.    To the extent that the

option of any deceased Optionee or of any Optionee whose employment or service

terminates is not exercised within the applicable period, all rights to

purchase shares of Common Stock pursuant to such options shall cease and

terminate.

        (h)    Transfers;

Leaves.    For purposes of this

Section 5.5, a transfer of employment or other relationship between or

among the Company and/or any subsidiaries shall not be deemed to constitute a

termination of employment or other cessation of relationship with the Company

or any of its subsidiaries. For purposes of this Section 5.5, with respect

to Incentive Stock Options, employment shall be deemed to continue while the

Optionee is

 

5

 

on military leave, sick leave or other bona fide leave of

absence (as determined by the Plan Administrator) in accordance with the

policies of the Company.

        6.    Exercise.

        6.1    Procedure.    Subject

to the provisions of Section 5.3 above, each option may be exercised in

whole or in part; provided, however, that no fewer than 100 shares (or the

remaining shares then purchasable under the option, if less than 100 shares)

may be purchased on any exercise of any option granted hereunder and that only whole

shares will be issued pursuant to the exercise of any option (the number of 100

shares shall not be changed by any transaction or action described in

Section 8 or Section 11 unless the Plan Administrator determines that

such a change is appropriate). Options shall be exercised by delivery to the

Secretary of the Company or his or her designated agent of notice of the number

of shares with respect to which the option is exercised, together with payment

in full of the exercise price and any applicable withholding taxes.

        6.2    Payment.    Payment

of the option exercise price shall be made in full when the notice of exercise

of the option is delivered to the Secretary of the Company or his or her

designated agent and shall be in cash or bank certified or cashier’s check or

through irrevocable instructions to a stock broker to deliver the amount of

sales proceeds necessary to pay the appropriate exercise price and withholding

tax obligations, all in accordance with applicable governmental regulations,

for the shares of Common Stock being purchased. The Plan Administrator may

determine at the time the option is granted for Incentive Stock Options, or at

any time before exercise for Non-Qualified Stock Options, that additional forms

of payment will be permitted.

        6.3    Withholding.    Before

the issuance of shares of Common Stock on the exercise of an option, the

Optionee shall pay to the Company the amount of any applicable federal, state

or local tax withholding obligations. The Company may withhold any distribution

in whole or in part until the Company is so paid. The Company shall have the

right to withhold such amount from any other amounts due or to become due from

the Company to the Optionee, including salary (subject to applicable law) or to

retain and withhold a number of shares having a market value not less than the

amount of such taxes required to be withheld by the Company to reimburse it for

any such taxes and cancel (in whole or in part) any such shares so withheld.

        6.4    Conditions

Precedent to Exercise.    The Plan Administrator

may establish conditions precedent to the exercise of any option, which shall

be described in the relevant Option Agreement.

        7.    Foreign

Qualified Grants    Options under this Plan may

be granted to officers and employees of the Company and other persons described

in Section 4 who reside in foreign jurisdictions as the Plan Administrator

may determine from time to time. The Board of Directors may adopt supplements

to the Plan as needed to comply with the applicable laws of such foreign

jurisdictions and to give Optionees favorable treatment under such laws;

provided, however, that no award shall be granted under any such supplement on

terms more beneficial to such Optionees than those permitted by this Plan.

        8.    Corporate

Mergers, Acquisitions, Etc.    The Plan

Administrator may also grant options under this Plan having terms, conditions

and provisions that vary from those specified in this Plan provided that such

options are granted in substitution for, or in connection with the assumption

of, existing options granted, awarded or issued by another corporation and

assumed or otherwise agreed to be provided for by the Company pursuant to or by

reason of a transaction involving a corporate merger, consolidation,

acquisition of property or stock, reorganization or liquidation to which the

Company is a party.

 

6

 

        9.    Holding

Period.    Unless otherwise determined by the

Plan Administrator, if a person subject to Section 16 of the Exchange Act

exercises an option within six months of the date of grant of the option, the

shares of Common Stock acquired on exercise of the option may not be sold until

six months after the date of grant of the option.

        10.    Option

Agreements.    Options granted under this Plan

shall be evidenced by written stock option agreements (the “Option Agreements”)

that shall contain such terms, conditions, limitations and restrictions as the

Plan Administrator shall deem advisable and that are consistent with this Plan.

All Option Agreements shall include or incorporate by reference the applicable

terms and conditions contained in this Plan.

        11.    Adjustments

On Changes in Capitalization.

        11.1    Stock

Splits, Capital Stock Adjustments.    The

aggregate number and class of shares for which options may be granted under

this Plan, the number and class of shares covered by each outstanding option

and the exercise price per share thereof (but not the total price), and each

such option, shall all be proportionately adjusted for any increase or decrease

in the number of issued shares of Common Stock of the Company resulting from a

stock split, stock dividend or consolidation of shares or any like capital

stock adjustment.

        11.2    Effect of

Merger, Sale of Assets, Liquidation or Dissolution.

        (a)    Mergers,

Sale of Assets, Other Transactions.    In the

event of a merger, consolidation or plan of exchange to which the Company is a

party or a sale of all or substantially all of the Company’s assets (each, a

“Transaction”), the Board of Directors, in its sole discretion and to the

extent possible under the structure of the Transaction, shall select one of the

following alternatives for treating outstanding options under this Plan:

        (i)    Outstanding

options shall remain in effect in accordance with their terms;

        (ii)  Outstanding

options shall be converted into options to purchase stock in the corporation

that is the surviving or acquiring corporation in the Transaction. The amount,

type of securities subject thereto and exercise price of the converted options

shall be determined by the Board of Directors of the Company, taking into

account the relative values of the companies involved in the Transaction and

the exchange rate, if any, used in determining shares of the surviving

corporation to be issued to holders of shares of the Company. Unless otherwise

determined by the Board of Directors, the converted options shall be vested

only to the extent that the vesting requirements relating to options granted

hereunder have been satisfied;

        (iii)  The

Board of Directors provides a period before the consummation of the Transaction

during which outstanding options shall be exercisable to the extent vested and,

on the expiration of such period, all unexercised options shall immediately

terminate. The Board of Directors, in its sole discretion, may accelerate the

vesting of such options so that they are exercisable in full during such

period; or

        (iv)  The

Board of Directors shall take such other action with respect to outstanding

options as the Board deems to be in the best interests of the Company.

        (b)    Liquidation;

Dissolution.    If the Company is liquidated or

dissolved, options shall be treated in accordance with

Section 11.2(a)(iii).

        11.3    Fractional

Shares.    If the number of shares covered by

any option is adjusted, any fractional shares resulting from such adjustment

shall be disregarded and each such option shall cover only the number of full

shares resulting from such adjustment.

 

7

 

        11.4    Determination

of Board to Be Final    All adjustments under

this Section 11 shall be made by the Board of Directors, and its

determination as to what adjustments shall be made, and the extent thereof,

shall be final, binding and conclusive. Unless an Optionee agrees otherwise,

any change or adjustment to an Incentive Stock Option shall be made, if

possible, in such a manner so as not to constitute a “modification,” as defined

in Section 424(h) of the Code, and so as not to cause the Optionee’s

Incentive Stock Option to fail to continue to qualify as an Incentive Stock

Option.

        12.    Securities Regulations.

        Shares

of Common Stock shall not be issued with respect to an option granted under

this Plan unless the exercise of such option and the issuance and delivery of

such shares pursuant thereto shall comply with all relevant provisions of law,

including, without limitation, any applicable state securities laws, the

Securities Act of 1933, as amended, the Exchange Act, the rules and regulations

promulgated thereunder, applicable laws of foreign countries and other

jurisdictions and the requirements of any quotation service or stock exchange

on which the shares may then be listed, and shall be further subject to the

approval of counsel for the Company with respect to such compliance, including

the availability of an exemption from registration for the issuance and sale of

any shares hereunder. The inability of the Company to obtain, from any

regulatory body having jurisdiction, the authority deemed by the Company’s

counsel to be necessary for the lawful issuance and sale of any shares

hereunder or the unavailability of an exemption from registration for the

issuance and sale of any shares hereunder shall relieve the Company of any

liability with respect of the nonissuance or sale of such shares as to which

such requisite authority shall not have been obtained.

        As

a condition to the exercise of an option, the Company may require the Optionee

to represent and warrant at the time of any such exercise that the shares of

Common Stock are being purchased only for investment and without any present

intention to sell or distribute such shares if, in the opinion of counsel for

the Company, such a representation is required by any relevant provision of the

aforementioned laws. The Company may place a stop-transfer order against any

shares of Common Stock on the official stock books and records of the Company,

and a legend may be stamped on stock certificates to the effect that the shares

of Common Stock may not be pledged, sold or otherwise transferred unless an

opinion of counsel is provided (concurred in by counsel for the Company)

stating that such transfer is not in violation of any applicable law or

regulation. The Plan Administrator may also require such other action or

agreement by the Optionees as may from time to time be necessary to comply with

the federal and state securities laws. THIS PROVISION SHALL NOT OBLIGATE THE

COMPANY TO UNDERTAKE REGISTRATION OF THE OPTIONS OR STOCK THEREUNDER.

        If

any of the Company’s capital stock of the same class as the Common Stock

subject to options granted hereunder is listed on a national securities

exchange, all shares of Common Stock issued hereunder if not previously listed

on such exchange shall be authorized by that exchange for listing thereon

before the issuance thereof.

        13.    Amendment

and Termination.

        13.1    Plan.    The

Board of Directors may at any time suspend, amend or terminate this Plan,

provided that, except as set forth in Section 8, the approval of the

Company’s shareholders is necessary within twelve months before or after the

adoption by the Board of Directors of any amendment that will:

        (a)  increase

the number of shares of Common Stock to be reserved for the issuance of options

under this Plan;

        (b)  permit

the granting of stock options to a class of persons other than those now

permitted to receive stock options under this Plan; or

 

8

 

        (c)  require

shareholder approval under applicable law, including Section 16(b) of the

Exchange Act.

        13.2    Options.    Subject

to the requirements of Section 422 of the Code with respect to Incentive

Stock Options and to the terms and conditions and within the limitations of

this Plan, the Plan Administrator may modify or amend outstanding options

granted under this Plan. The modification or amendment of an outstanding option

shall not, without the consent of the Optionee, impair or diminish any of his

or her rights or any of the obligations of the Company under such option.

Except as otherwise provided in this Plan, no outstanding option shall be

terminated without the consent of the Optionee. Unless the Optionee agrees

otherwise, any changes or adjustments made to outstanding Incentive Stock

Options granted under this Plan shall be made in such a manner so as not to

constitute a “modification,” as defined in Section 425(h) of the Code, and

so as not to cause any Incentive Stock Option issued hereunder to fail to

continue to qualify as an Incentive Stock Option as defined in

Section 422(b) of the Code.

        13.3    Automatic

Termination.    Unless sooner terminated by the

Board of Directors, this Plan shall terminate ten years from the date on which

this Plan is adopted by the Board. No option may be granted after such

termination or during any suspension of this Plan. The amendment or termination

of this Plan shall not, without the consent of the Optionee, alter or impair

any rights or obligations under any option theretofore granted under this Plan.

        14.    Miscellaneous.

        14.1    Time of

Granting Options.    The date of grant of an

option shall, for all purposes, be the date on which the Company completes the

required corporate action relating to the grant of an option; the execution of

an Option Agreement and the conditions to the exercise of an option shall not

defer the date of grant.

        14.2    No Status as

Shareholder.    Neither the Optionee nor any

party to which the Optionee’s rights and privileges under the option may pass

shall be, or have any of the rights or privileges of, a shareholder of the

Company with respect to any of the shares of Common Stock issuable on the

exercise of any option granted under this Plan unless and until such option has

been exercised and the issuance (as evidenced by the appropriate entry on the

books of the Company or duly authorized transfer agent of the Company) of the

stock certificate evidencing such shares.

        14.3    Status as

an Employee.    Nothing in this Plan or in any

option granted pursuant to this Plan shall confer on any Optionee any right to

continue in the employ of the Company, or to interfere in any way with the

right of the Company to terminate his or her employment or other relationship

with the Company at any time for any reason.

        14.4    Reservation

of Shares.    The Company, during the term of

this Plan, at all times will reserve and keep available such number of shares

of Common Stock as shall be sufficient to satisfy the requirements of this

Plan.

        15.    Effectiveness

of This Plan.    This Plan shall become

effective on the date on which it is adopted by the Board of Directors of the

Company. No option granted under this Plan to any officer or director of the

Company shall become exercisable until the Plan is approved by the

shareholders, and any option granted before such approval shall be conditioned

on and is subject to such approval.

Adopted

by the Board of Directors on July 10, 1996, and approved by the

shareholders on August 9, 1996.

Amended

by the Board of Directors on November 8, 1996.

 

9

 

Amended

by the shareholders, pursuant to the recommendation of the Board of Directors,

on October 15, 1998.

Amended

by the shareholders, pursuant to the recommendation of the Board of Directors,

on June 22, 2000.

Amended

by the Board of Directors on October 19, 2000.

Amended

by the Board of Directors on April 26, 2001.

 

10

 

FORM OF

SPECIAL OPTION GRANT

MICROVISION, INC.

STOCK OPTION AGREEMENT

FOR INDEPENDENT DIRECTORS

(NON-PLAN GRANT)

        THESE OPTIONS AND THE UNDERLYING SHARES OF COMMON

STOCK HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED

(THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE, AND ARE BEING OFFERED IN RELIANCE

UPON EXEMPTIONS FROM REGISTRATION UNDER THE ACT AND STATE SECURITIES LAWS.

        «Date»

To:    «Title»

«First» «Mid» «Last»

        You

have been awarded an option to purchase the number of shares of Common Stock of

Microvision, Inc. (the “Company”) specified below. The grant of this option is subject to shareholder

approval and this option cannot be exercised until such approval is obtained.

The terms of your option are summarized below. A complete description of the

terms and conditions to which this option is subject is set forth in the “Terms

and Conditions of Grant” attached as Exhibit A

hereto.

        1.    Number of Shares.    You

may purchase a maximum of

«Total            Shares»

shares of the Company’s Common Stock pursuant to this option.

        2.    Date Option Granted.    October 24,

2001.

        3.    Term of This Option.    Unless

sooner terminated, this option must be exercised on or before «term», as

described more fully in the Exercise Schedule attached as Exhibit B hereto.

        4.    Exercise Schedule and Prices.    This

option shall vest and become exercisable upon shareholder approval and have an

exercise price of $15.00 per share.

        5.    How to Exercise.    To

exercise this option in whole or in part (i.e., in increments of no less than

100 shares), you must deliver to the Secretary of the Company at least two full

business days prior to the date on which you wish to exercise the option, a

written notice of exercise and the exercise price, payable by personal, bank certified

or cashier’s check, for the number of shares that you desire to purchase. A

form of Notice of Exercise that you may use has been attached to this Agreement

as Exhibit B. You must pay

all applicable withholding taxes upon exercise of this option. At the Company’s

discretion, you also may pay the exercise price through irrevocable

instructions to a stock broker to deliver the amount of sales proceeds

necessary to pay the exercise price and applicable withholding tax in

accordance with applicable governmental regulations.

        The

Company also may require you to execute other documents as a condition to

exercising this option. You should contact the Secretary in advance when you

are considering an exercise of this option.

        6.    Termination of Option.    This

option shall expire and all rights thereto shall cease and terminate in

accordance with the provisions of Section 4 of the “Terms and Conditions

of Grant” attached as Exhibit A

hereto.

        7.    No Transfer of Option.    This

option cannot be transferred except by will or the applicable laws of descent

and distribution.

        8.    Certain Tax Matters.    This

option is not intended to qualify as an “Incentive Stock Option” as that term

is defined in Section 422A of Code and its tax consequences are different

than such an option. The time at which you exercise this option or dispose of

any shares thus acquired may affect significantly your resultant tax burden.

You are counseled to seek tax advice in this regard.

        9.    Securities Compliance.    This

option cannot be exercised until it is approved by the shareholders of the

Company. The Company intends to submit a proposal relating to the grant of this

 

 

 

and

certain other options granted to the non-employee directors of the Company for

approval by the shareholders at the 2002 annual meeting of shareholders. If the

shareholders approve the proposal, then promptly thereafter the Company intends

to register the offer and sale of the shares of Common Stock issuable upon

exercise of this option under the Securities Act of 1933, as amended, by filing

a registration statement on Form S-8 with the Securities and Exchange

Commission. Until such registration statement becomes effective, the shares of

Common Stock issuable upon exercise of this option will not be registered and

the issuance thereof will be subject to applicable securities laws, as

described in Section 7 of the “Terms and Conditions of Grant” attached as Exhibit A hereto. Shares purchased

through the exercise of this option cannot be sold or otherwise transferred

unless they are subsequently registered or exemptions from registration are

available.

        Please

complete and sign the Election to Accept or Decline Stock Option attached

hereto at Exhibit C

indicating whether you accept or decline this option upon the terms set forth

in this Agreement, including the Terms and Conditions of Grant, and return a

copy of the Election to the Company. 

	

   

  	

  Very truly yours,

  
	

   

  	

   

  	

   

  
	

   

  	

  MICROVISION, INC.

  
	

   

  	

   

  	

   

  
	

   

  	

  By

  	

   

  
	

   

  	

   

  	

  Richard A. Raisig,

  Chief Financial Officer

  

 

11

 

Exhibit A

Terms and Conditions of Grant

        1.    Administration.    This

option shall be administered by the Board of Directors of the Company (the

“Board”) or, if the Board shall authorize a committee of the Board, by such committee

to the extent so authorized. The administrator of this option is referred to as

the “Administrator.”

        1.1    Powers.    Subject

to the specific provisions of these terms and conditions, the Administrator

shall have the authority, in its discretion: (a) to interpret the terms

and conditions of this option; (b) to prescribe, amend, and rescind rules

and regulations relating to the exercise of this option; (c) with the

consent of the Optionee, modify or amend each option; (d) to reduce the

exercise price per share of this option; (e) to defer, with the consent of

the Optionee, or to accelerate the exercise date of any option; (f) to

waive or modify any term or provision contained in this option applicable to

the underlying shares of Common Stock; and (g) to make all other

determinations deemed necessary or advisable for the administration of this

option. The interpretation and construction by the Administrator of any terms

or provisions of this option or of any rule or regulation promulgated in connection

herewith and all actions taken by the Administrator shall be conclusive and

binding on all interested parties. The Administrator may delegate

administrative functions to individuals who are officers or employees of the

Company.

        1.2    Limited Liability.    No

member of the Board or the Administrator or any officer of the Company shall be

liable for any action or inaction of the entity or body, or another person or,

except in circumstances involving bad faith, of himself or herself, with respect

to any matter related to this option. Subject only to compliance with the

explicit provisions hereof, the Board and Administrator may act in their

absolute discretion in all matters related to this option.

        2.    Stock Subject to This Option.    If

this option expires, is surrendered, exchanged for another option, canceled or

terminated for any reason without having been exercised in full, the

unpurchased shares subject thereto shall again be available for issuance by the

Company, including for replacement options that may be granted in exchange for

such surrendered, canceled or terminated options. Shares issued on exercise of

this option may be subject to restrictions on transfer, repurchase rights or

other restrictions as determined by the Administrator.

        3.    Nontransferability.    This

option and the rights and privileges conferred hereby may not be transferred,

assigned, pledged or hypothecated in any manner (whether by operation of law or

otherwise) other than by will or by the applicable laws of descent and

distribution, shall not be subject to execution, attachment or similar process,

and shall be exercisable during the Optionee’s lifetime only by the Optionee.

Any purported transfer or assignment in violation of this provision shall be

void.

        4.    Termination of Option.

        4.1    Generally

        Unless

earlier termination results from the application of the provisions of this

Section 4, each option granted hereunder shall expire and all rights

thereto shall cease and terminate on the tenth anniversary of the date of

grant.

        4.2    Disability or Death

        If the

Optionee is unable to continue his or her service as an Independent Director of

the Company as a result of his or her permanent and total disability (as

defined in Section 22(e)(3) of the Code) or death, all unvested options

issued hereunder will become vested immediately as of the date of disability or

death. In such an event, this option may be exercised at any time before the

earlier of (i) the expiration date of the option or (ii) twelve

(12) months after the date of (A) permanent and total disability or

(B) death (by the person or persons to whom your rights

 

A-1

 

under the option shall pass by your will or by the

applicable laws of descent and distribution), for up to the full number of

shares of Common Stock covered thereby.

        4.3    Failure to Exercise Option;

Expiration

        To the

extent that an Optionee fails to exercise this option within the period

provided in this Section 4, all rights to purchase shares of Common Stock

pursuant to this option shall cease and terminate.

        5.    Exercise.

        5.1    Procedure

        Each option

may be exercised, subject to its vesting schedule, in whole or in part;

provided, however, that no fewer than 100 shares (or the remaining shares then

purchasable under the option, if less than 100 shares) may be purchased on any

exercise of any option granted hereunder and that only whole shares will be

issued pursuant to the exercise of any option (the number of 100 shares shall

not be changed by any transaction or action described in Section 6 unless

the Administrator determines that such a change is appropriate). Options shall

be exercised by delivery to the Secretary of the Company or his or her

designated agent of notice of the number of shares with respect to which the

option is being exercised, together with payment in full of the exercise price

and any applicable withholding taxes.

        5.2    Payment

        Payment of

the option exercise price shall be made in full when the notice of exercise of

the option is delivered to the Secretary of the Company or his or her

designated agent and shall be by personal, bank certified or cashier’s check or

through irrevocable instructions to a stock broker to deliver to the Company

the amount of sales proceeds necessary to pay the appropriate exercise price

and withholding tax obligations, all in accordance with applicable governmental

regulations, for the shares of Common Stock being purchased. The Administrator

may determine at any time before exercise that additional forms of payment will

be permitted.

        5.3    Withholding

        Before the

issuance of shares of Common Stock on the exercise of an option, the Optionee

shall pay to the Company the amount of any applicable federal, state or local

tax withholding obligations. The Company may withhold any distribution in whole

or in part until the Company is so paid. The Company shall have the right,

subject to applicable law, to withhold such amount from any other amounts due

or to become due from the Company to the Optionee, or to retain and withhold a

number of shares having a market value not less than the amount of such taxes

required to be withheld by the Company, to reimburse it for any such taxes and

cancel (in whole or in part) any such shares so withheld.

        6.    Adjustments On Changes in

Capitalization.

        6.1    Stock Splits, Capital Stock

Adjustments.    The number and class of shares

covered by this option and the exercise price per share thereof (but not the

total price) shall all be proportionately adjusted for any increase or decrease

in the number of issued shares of Common Stock of the Company resulting from a

stock split, stock dividend or consolidation of shares or any like capital

stock adjustment.

        6.2    Effect of Merger, Sale of

Assets, Liquidation or Dissolution.

        (a)    Mergers, Sale of Assets,

Other Transactions.    In the event of a merger,

consolidation or plan of exchange to which the Company is a party or a sale of

all or substantially all of the Company’s assets (each, a “Transaction”), the

Board, in its sole discretion and to the extent

 

A-2

 

possible under the structure of the Transaction, shall

select one of the following alternatives for treating this option:

          (i)  This

option shall remain in effect in accordance with its terms;

        (ii)  This

option shall be converted into options to purchase stock in the corporation

that is the surviving or acquiring corporation in the Transaction. The amount,

type of securities subject thereto and exercise price of the converted option

shall be determined by the Board, taking into account the relative values of

the companies involved in the Transaction and the exchange rate, if any, used

in determining shares of the surviving corporation to be issued to holders of

shares of the Company. Unless otherwise determined by the Board, the converted

option shall be vested only to the extent that the vesting requirements

relating to this option have been satisfied;

        (iii)  The

Board provides a period before the consummation of the Transaction during which

this option shall be exercisable to the extent vested and, on the expiration of

such period, this option shall immediately terminate. The Board, in its sole

discretion, may accelerate the vesting of this option so that it is exercisable

in full during such period; or

        (iv)  The

Board shall take such other action with respect to this option as the Board

deems to be in the best interests of the Company.

        (b)    Liquidation; Dissolution.    If

the Company is liquidated or dissolved, options shall be treated in accordance

with Section 6.2(a)(iii).

        6.3    Fractional Shares.    If

the number of shares covered by this option is adjusted, any fractional shares

resulting from such adjustment shall be disregarded and this option shall cover

only the number of full shares resulting from such adjustment.

        6.4    Determination of Board to Be

Final.    All adjustments under this Section 6

shall be made by the Board, and its determination as to what adjustments shall

be made, and the extent thereof, shall be final, binding and conclusive.

        7.    Securities Regulations.

        Shares

of Common Stock shall not be issued with respect to this option unless the

exercise of the option and the issuance and delivery of such shares pursuant

hereto shall comply with all relevant provisions of law, including, without

limitation, any applicable state and federal securities laws and the rules and

regulations promulgated thereunder, applicable laws of foreign countries and

other jurisdictions, and the requirements of any stock exchange or market on

which the shares may then be listed, and shall be further subject to the

approval of counsel for the Company with respect to such compliance, including

the availability of an exemption from registration for the issuance and sale of

any shares hereunder. The inability of the Company to obtain, from any

regulatory body having jurisdiction, the authority deemed by the Company’s

counsel to be necessary for the lawful issuance and sale of any shares

hereunder or the unavailability of an exemption from registration for the

issuance and sale of any shares hereunder shall relieve the Company of any

liability with respect of the nonissuance or sale of such shares as to which

such requisite authority shall not have been obtained.

        As

a condition to the exercise of an option, the Company may require the Optionee

to represent and warrant at the time of any such exercise that the shares of

Common Stock are being purchased only for investment and without any present

intention to sell or distribute such shares if, in the opinion of counsel for

the Company, such a representation is required by any relevant provision of the

aforementioned laws. The Company may place a stop-transfer order against any

shares of Common Stock on the official stock books and records of the Company,

and a legend may be stamped on stock certificates to the effect that the shares

of Common Stock may not be pledged, sold or otherwise transferred unless an

opinion of counsel is provided (concurred in by counsel for the Company)

stating

 

A-3

 

that

such transfer is not in violation of any applicable law or regulation. The

Administrator may also require such other action or agreement by the Optionee

as may from time to time be necessary to comply with the federal and state

securities laws. THIS PROVISION SHALL NOT OBLIGATE THE COMPANY TO UNDERTAKE

REGISTRATION OF THIS OPTION OR THE STOCK ISSUABLE UPON EXERCISE HEREOF.

        8.    Amendment and Termination.

        8.1    Options.    Subject

to the terms and conditions hereof, the Administrator may modify or amend this

option. The modification or amendment of this option shall not, without the

consent of the Optionee, impair or diminish any of his or her rights or any of

the obligations of the Company hereunder. Except as otherwise provided in this

option, this option shall not be terminated without the consent of the

Optionee.

        8.2    Automatic Termination.    Unless

sooner terminated, this option shall terminate ten (10) years from the

date of grant.

        9.    Miscellaneous.

        9.1    No Status as Shareholder.    Neither

the Optionee nor any party to which the Optionee’s rights and privileges under

the option may pass shall be, or have any of the rights or privileges of, a

shareholder of the Company with respect to any of the shares of Common Stock

issuable on the exercise of this option unless and until this option has been exercised

and the issuance (as evidenced by the appropriate entry on the books of the

Company or duly authorized transfer agent of the Company) of the stock

certificate evidencing such shares.

        9.2    Reservation of Shares.    The

Company, during the term of this option, at all times will reserve and keep

available such number of shares of Common Stock as shall be sufficient to

satisfy the requirements hereof.

 

A-4

 

Exhibit B

Notice of Exercise of Non-Qualified Stock Option

Date:

To:    Microvision, Inc.

        I

hereby exercise the non-qualified stock option granted to me by

Microvision, Inc. (the “Company”) on «grant», subject to all the terms and

provisions thereof, and notify the Company of my desire to purchase

             shares

of Common Stock of the Company at the exercise price of $            per share, or an aggregate

exercise price of $               .

        I

hereby deliver the full exercise price and all applicable withholding taxes

with respect to this exercise as follows: 

	

   

  	

   

  	

  personal, bank certified or cashier’s check, or

  
	

   

  	

   

  	

  irrevocable instructions to a stock broker to

  deliver the necessary sales proceeds, all in accordance with applicable

  governmental regulations.

  
	

   

  

        I

further agree to execute such other documents as the Company may request. 

	

  By:

  	

   

  
	

   

  	

   

  
	

  Print Name:

  	

   

  
	

   

  	

   

  
	

  Address:

  	

   

  
	

   

  	

   

  
	

   

  	

   

  

 

B-1

 

Exhibit C

Election to Accept or Decline Stock Option

Date:

To:    Microvision, Inc.

        I

             ACCEPT

            

DECLINE the non-qualified stock option granted to me pursuant to the Stock

Option Agreement, dated as of

                        .

If I accept the grant of this option, I acknowledge that I have received and

understand, and agree to, the terms of the Stock Option Agreement, including

the “Terms and Conditions of Grant” attached as Exhibit A to the Agreement. 

	

   

  	

  Yours very truly,

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  «First» «Last»

  Optionee

  

 

C-1

 

Schedule

of Special Option Grants 

	

  Optionee

  	

   

  	

  # of

  option shares

  	

   

  
	

  Jacqueline

  Brandwynne

  	

   

  	

  4,030

  	

   

  
	

  Jacob Brouwer

  	

   

  	

  8,867

  	

   

  
	

  Richard A.

  Cowell

  	

   

  	

  8,867

  	

   

  
	

  Walter J. Lack

  	

   

  	

  8,867

  	

   

  
	

  William A. Owens

  	

   

  	

  8,867

  	

   

  
	

  Robert A.

  Ratliffe

  	

   

  	

  8,867

  	

   

  
	

  Dennis Reimer

  	

   

  	

  8,867Exhibit 10.1

Timothy T. Soncrant, M.D.

President

CURE, LLC

1300 Atwood Road

Silver Spring, MD 20906

 

May 27,2002

 

Re:          Axonyx Inc.

(“Axonyx”) with CURE LLC (“Cure”)

 

Dear Mr. Soncrant,

 

Thank you for taking the time to meet with me today to discuss, among other

things, the status of the Phenserine project. 

This letter agreement (the “Letter Agreement”) sets forth our recent

understandings with respect to the Phenserine Development Program governed by

the February 27,1997 License Agreement between Cure and Axonyx (the “License

Agreement”).  Accordingly, and intending

to be mutually bound, Axonyx and Cure hereby agree as follows:

 

1.    Amendment

of License Agreement.  The License Agreement is hereby amended and

supplemented as follows:

 

1.1  Section 10. 

The first sentence of Section 10 of the License Agreement is hereby

deleted in its entirety and replaced with the following:

 

In the event that LICENSEE fails either to:  (a) commence Phase I testing within three (3) months after the

date of approval of an IND, (b) Phase II testing within fourteen (14) months of

the date of such approval, (c) Phase III testing within forty-two (42) months

of the date of such approval, or (d) submit an NDA for approval in the United

States, Japan, the U.K., Germany, France, Belgium, or Canada within six and one

half (6.5) years  of the date of the IND approval, then CURE may make a written

demand that LICENSEE begin such phase of testing or submit such NDA for

approval, it being understood, however that if the delay in commencing such

phase of testing or obtaining such approval is a result of difficulties in

recruiting clinical research subjects for Phase III clinical trials,  or

the result of other similar technical or logistical difficulties with respect

to factors outside of LICENSEE’s or its sub-licensee’s control,

then CURE shall refrain from making the aforementioned written demand so long

as, in CURE’s reasonable judgment, LICENSEE and/or its sub-licensee is acting

in good faith and using its best efforts to recruit such clinical research

subjects, or to address such other difficulties.

 

2.    Amendment

of PHS Agreement.  The parties acknowledge that (i) The

intellectual property sublicensed to Axonyx pursuant to the License Agreement

was licensed to Cure from The National Institutes of Health, the Centers for

Disease Control and Prevention or the Food and Drug Administration

(collectively, “PHS”); (ii) Section 10 of the PHS Agreement, which obligates

Cure or its sublicensee to comply with Appendix E and Appendix F, is incorporated

into Section 3 of the License Agreement (entitled “Pass Through Obligations

from PHS Agreement”); and (iii) Section 10 of the PHS Agreement provides that

Appendix E and Appendix F may be modified by the parties.  The parties hereby agrees that in the event

Appendix E and/or Appendix F (or any other provisions) of the PHS Agreement are

modified, such modified Appendices or provisions shall, upon their

modification, be deemed to automatically replace the original appendices or

provisions in the License Agreement.

 

This Letter Agreement constitutes our entire understanding with respect

to the subject matter hereof and may not be amended without a writing signed by

both parties.  Unless specifically

modified herein, all terms and conditions of the License Agreement shall remain

in full force and effect.  This Letter

Agreement may be executed in counterparts and shall be governed by the laws of

the State of New York.

 

I would be grateful if you would please indicate your consent to the

above agreements by signing below and returning an executed copy of this letter

to me.

1

Sincerely,

 

 

 

	

  /s/ Gosse Bruinsma, M.D.

  
	

  Gosse Bruinsma, M.D.

  

 

 

 

AGREED TO AND ACCEPTED

 

 

 

	

  /s/ Timothy Soncrant, M.D.

  
	

  By:

  	

  Timothy T. Soncrant, M.D.

  
	

   

  	

  President

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00042-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00042-of-00352.parquet"}]]