Document:

Exhibit 10.2

 

 

Stock Option Grant

 

	
            1.
 	
            Grant of Option
 

 

Advanced Magnetics, Inc., a Delaware corporation (the “Company”), hereby grants to Brian J.G. Pereira (the “Employee”), an option to purchase 100,000 shares of Common Stock, $.01 par value per share, of the Company as hereinafter set forth (the “Option”), pursuant and subject to the terms and provisions of the Company’s Amended and Restated 2000 Stock Plan (the “Plan”).  The date of grant of this Option is February 7, 2006.

 

All terms which are defined in the Plan shall have the same meanings herein.

 

	
            2.
 	
            Vesting of Option
 

 

This Option shall be exercisable in cumulative installations on each of the following dates, as follows:

 

	
            Date Exercisable
 	
            Number of Shares Exercisable
 
	
            On date of grant
 	
             
 	
            0
 	
             
 
	
             
 	
             
 	
            

 	
             
 
	
            November 16, 2006
  	
             
 	
            33,333
 	
             
 
	
             
 	
             
 	
            

 	
             
 
	
            November 16, 2007
  	
             
 	
            66,666
 	
             
 
	
             
 	
             
 	
            

 	
             
 
	
            November 16, 2008
  	
             
 	
            100,000
 	
             
 
	
             
 	
             
 	
            

 	
             
 

 

Subject to the other provisions of this Section 2 and Section 6 below, no additional shares shall vest and become exercisable between each of the vesting dates set forth above.

 

Notwithstanding the foregoing, this Option shall become immediately exercisable in full with respect to all 100,000 shares issuable hereunder upon the consummation of a Change of Control.  A “Change of Control” shall mean the first to occur of any of the following: (a) any “person” or “group” (as defined in the Securities Exchange Act of 1934) becomes the beneficial owner of a majority of the combined voting power of the then outstanding voting securities with respect to the election of the Board of Directors of the Company; (b) any merger, consolidation or similar transaction involving the Company, other than a transaction in which the stockholders of the Company immediately prior to the transaction hold immediately thereafter in the same proportion as immediately prior to the transaction not less than 50% of the combined voting power of the then voting
securities with respect to the election of the Board of Directors of the resulting entity; (c) any sale of all or substantially all of the assets of the Company; or (d) any other acquisition by a third party of all or substantially all of the business or assets of the Company, as determined by the Board of Directors of the Company, in its sole discretion. 

 

 

	
            Stock Option Agreement
 	
            Confidential Document
 	
            1
 

61 Mooney Street  Cambridge, MA  02138   Tel:  [617] 497-2070  Fax: [617] 547-2445

 

 

Advanced Magnetics, Inc.

 

 

	
            3.
 	
            Term of Option
 

 

This Option shall terminate in ten (10) years on February 7, 2016.

 

	
            4.
 	
            Exercise Price
 

 

The exercise price of this Option shall be nineteen dollars and ninety eight cents ($19.98) per share.

 

	
            5.
 	
            Exercise and Payment
 

 

	
             
 	
            (a)
 	
            Method of Payment.    This Option shall be exercisable by delivery to the Company of written notice of exercise, specifying the number of shares for which this Option is being exercised (subject to Section 2 hereof), together with payment to the Company for the total exercise price thereof in cash, by check or, subject to the Company’s approval, by Common Stock of the Company owned by the Employee for more than six (6) months, or by some combination thereof.
 

 

	
             
 	
            (b)
 	
            Valuation of Shares Tendered in Payment of Purchase Price.    For the purposes hereof, the fair market value of any share of the Company's Common Stock which may be delivered to the Company in exercise of this Option shall be determined in good faith by the Board of Directors of the Company, or, in the absence of such determination, shall be equal to the closing price of a share of the Company’s Common Stock as reported on the American Stock Exchange on the date of exercise of this Option.
 

 

	
             
 	
            (c)
 	
            Delivery of Shares Tendered in Payment of Purchase Price.    If the Company permits the Employee to exercise Options by delivery of shares of Common Stock of the Company, the certificate or certificates representing the shares of Common Stock of the Company to be delivered shall be duly executed in blank by the Employee or shall be accompanied by a stock power duly executed in blank suitable for purposes of transferring such shares to the Company.  Fractional shares of Common Stock of the Company will not be accepted in payment of the purchase price of shares acquired upon exercise of this Option.
 

 

	
            6.
 	
            Effect of Termination of Employment or Death
 

 

This Option shall not be assignable or transferable either voluntarily or by operation of law, except as set forth in this Section 6.

 

In the event the Employee during his or her lifetime ceases to be an employee of the Company or of any subsidiary for any reason, other than death, disability, termination by the Company without “cause,” or termination by the Employee for “good reason” (each as defined in the Employment Agreement dated as of November 22, 2005 by and between the Company and the Employee (the “Employment Agreement”)), any unexercised portion of this Option which was otherwise 

 

	
            Stock Option Agreement
 	
            Confidential Document
 	
            2
 

61 Mooney Street  Cambridge, MA  02138   Tel:  [617] 497-2070  Fax: [617] 547-2445

 

Advanced Magnetics, Inc.

 

exercisable on the date of termination of employment shall expire unless exercised within three months of that date, but in no event after the expiration of the term hereof.

 

In the event the Company terminates the Employee’s employment with the Company without “cause” or the Employee terminates his employment for “good reason” (each as defined in the Employment Agreement), this Option shall become exercisable in full with respect to all 100,000 shares covered hereby as of the effective date of such termination.

 

In the event of the death or disability of the Employee (i) while an employee of the Company or any subsidiary, or (ii) during the three-month period following termination of his or her employment for any reason other than death or disability, this Option shall be exercisable for the number of shares otherwise exercisable on the date of death, disability or termination, by the Employee or his or her personal representatives, heirs or legatees, as the case may be, at any time prior to the expiration of one (1) year from the date of the death or disability of the Employee, but in no event after the expiration of the term hereof.

 

Notwithstanding the foregoing, if the Employee, prior to the termination date of this Option, violates the confidentiality provisions of the Employment Agreement or any confidentiality or other agreement between the Employee and the Company, the right to exercise this Option shall terminate immediately upon written notice to the Employee from the Company describing such violation.

 

	
            7.
 	
            Employment
 

 

Nothing contained in this Option or in the Plan shall be construed as giving the Employee any right to be retained in the employ of the Company or any of its subsidiaries.

 

	
            8.
 	
            Withholding Taxes
 

 

The Employee acknowledges and agrees that the Company has the right to deduct from payments of any kind otherwise due to the Employee any federal, state or local taxes of any kind required by law to be withheld with respect to exercise of this Option.

 

	
            9.
 	
            Plan Provisions
 

 

Except as otherwise expressly provided herein, this Option and the rights of the Employee hereunder shall be subject to and governed by the terms and provisions of the Plan, including without limitation the provisions of Section 4 thereof.

 

	
            10.
 	
            Employee Representation; Stock Certificate Legend
 

 

The Employee hereby represents that he or she has received and read the Prospectus filed with the Securities and Exchange Commission as a part of the Registration Statement on Form S-8, which registered the shares under the Plan.

 

 

	
            Stock Option Agreement
 	
            Confidential Document
 	
            3
 

61 Mooney Street  Cambridge, MA  02138   Tel:  [617] 497-2070  Fax: [617] 547-2445

 

Advanced Magnetics, Inc.

 

 

If the Employee is an "affiliate" of the Company (as defined in Rule 144 promulgated under the Securities Act of 1933), all stock certificates representing shares of Common Stock issued to such Employee pursuant to this Option shall have affixed thereto legends substantially in the following form:

 

"The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended (the "Act") and may not be sold, transferred or assigned unless such shares are registered under the Act or an opinion of counsel, satisfactory to the corporation, is obtained to the effect that such sale, transfer or assignment is exempt from the registration requirements of the Act."

 

	
            11.
 	
            Notice
 

 

Any notice required to be given under the terms of this Option shall be properly addressed as follows:  to the Company at its principal executive offices, and to the Employee at his address set forth below, or at such other address as either of such parties may hereafter designate in writing to the other.

 

	
            12.
 	
            Non-Qualified Stock Option
 

 

It is understood that this Option is not intended to qualify as an "incentive stock option" as defined in Section 422 of the Internal Revenue Code.

 

	
            13.
 	
            Enforceability
 

 

This Option shall be binding upon the Employee, his estate, and his or her personal representatives and beneficiaries.

 

	
            14.
 	
            Effective Date
 

 

The effective date of this Option is February 7, 2006.

 

 

	
            Stock Option Agreement
 	
            Confidential Document
 	
            4
 

61 Mooney Street  Cambridge, MA  02138   Tel:  [617] 497-2070  Fax: [617] 547-2445

 

Advanced Magnetics, Inc.

 

 

IN WITNESS WHEREOF, this Option has been executed by a duly authorized officer of the Company as of the effective date.

 

	
             
 	
            Advanced Magnetics, Inc.
 
	
             
 	
             
 
	
             
 	
             
 
	
             
 	
            By:  /s/ Michael N. Avallone
 
	
             
 	
            Michael N. Avallone
 
	
             
 	
            Chief Financial Officer
 
	
             
 	
             
 
	
            Employee’s Acceptance:
 	
             
 
	
             
 	
             
 
	
            The undersigned hereby accepts this Option and agrees to the terms and provisions set forth in this Option and in the Plan (a copy of which has been delivered to him/her).
 	
             
 
	
             
 	
             
 
	
             
 	
             
 
	
            /s/ Brian J.G. Pereira
 	
             
 
	
            (Signature of Employee)
 	
             
 
	
             
 	
             
 
	
             
 	
             
 
	
            Brian J.G. Pereira
 	
             
 
	
            (Print Name of Employee)
 	
             
 
	
             
 	
             
 
	
             
 	
             
 
	
            Address:           54 Rowena Road
 	
             
 
	
            Newton, MA 02459
 	
             
 
	
             
 	
             
 
	
             
 	
             
 
	
            Date:          February 7, 2006
 	
             
 

 

	
            Stock Option Agreement
 	
            Confidential Document
 	
            5
 

61 Mooney Street  Cambridge, MA  02138   Tel:  [617] 497-2070  Fax: [617] 547-2445Exhibit 10.3

 

ADVANCED MAGNETICS, INC.

 

Restricted Stock Unit Agreement

 

Advanced Magnetics, Inc. (the “Company”) hereby enters into this Restricted Stock Unit Agreement, dated as of the date set forth below, with the Recipient named herein (the “Agreement”) and grants to the Recipient the Restricted Stock Units (“RSUs”) specified herein pursuant to its Amended and Restated 2000 Stock Plan, as amended and in effect from time to time.  The Terms and Conditions attached hereto are also a part hereof.

 

	
            Name of recipient (the “Recipient”):
 	
            Brian J.G. Pereira
 
	
             
 	
             
 
	
            Date of this RSU grant:
 	
            February 7, 2006
 
	
             
 	
             
 
	
            Number of shares of the Company’s Common Stock (the “Underlying Shares”) underlying the equivalent number of restricted stock units (the “RSUs”) granted pursuant to this Agreement:
 	
            20,000
 
	
             
 	
             
 
	
            Vesting Start Date:
 	
            February 7, 2006
 
	
             
 	
             
 
	
            Number of RSUs that are vested on the Vesting Start Date:
 	
            0
  
	
             
 	
             
 
	
            Number of RSUs that are unvested on the Vesting Start Date:
 	
            20,000
 
	
             
 	
             
 

 

Vesting Schedule:

 

	
            One year from the Vesting Start Date:
 	
            5,000 units
 
	
            Two years from the Vesting Start Date:
 	
            5,000 units
 
	
            Three years from the Vesting Start Date:
 	
            5,000 units
 
	
            Four years from the Vesting Start Date:
 	
            5,000 units
 

 

 

	
            /s/ Brian J.G. Pereira

Signature of Recipient

 

Brian J.G. Pereira

c/o Advanced Magnetics, Inc.

61 Mooney Street

Cambridge, Massachusetts  02138
 	
            ADVANCED MAGNETICS, INC.

 

 

By:  /s/ Jerome Goldstein

Jerome Goldstein

Chief Executive Officer

 
 

 

 

 

 

 

 

ADVANCED MAGNETICS, INC.

 

Restricted Stock Unit Agreement – Terms and Conditions

 

Advanced Magnetics, Inc. (the “Company”) agrees to award to the recipient specified on the cover page hereof (the “Recipient”), and the Recipient agrees to accept from the Company, the number of restricted stock units (the “RSUs”) specified on the cover page hereof representing an equivalent number of shares of the Company’s Common Stock (the “Underlying Shares”), on the following terms:

 

1.            Grant Under Plan.  This Restricted Stock Agreement (the “Agreement”) is made pursuant to and is governed by the Company’s Amended and Restated 2000 Stock Plan, as amended and in effect from time to time (the “Plan”), and, unless the context otherwise requires, capitalized terms used herein shall have the same meanings as in the Plan.

 

	
             
 	
            2.
 	
            Vesting if Business Relationship Continues.
 

 

(a)          Vesting Schedule.  If the Recipient has maintained continuously a Business Relationship with the Company through each date specified on the cover page hereof, a portion of the RSUs shall vest on such date in such amounts as are set forth opposite each such date on the cover page hereof.  Except as otherwise set forth herein, if the Recipient’s Business Relationship with the Company is terminated by the Company or by the Recipient for any reason, whether voluntarily or involuntarily, no additional RSUs shall become vested RSUs under any circumstances with respect to the Recipient.  Any determination under this Agreement as to Business Relationship status or other matters referred to above shall be made in good faith by the Board, whose
decision shall be final and binding on all parties.

 

“Business Relationship” means service to the Company or its successor in the capacity of an employee, officer, director, consultant, or advisor.

 

(b)          Termination of Business Relationship.  For purposes hereof, a Business Relationship shall not be considered as having terminated during any military leave, sick leave, or other leave of absence if approved in writing by the Company and if such written approval, or applicable law, contractually obligates the Company to continue the Business Relationship of the Recipient after the approved period of absence (an “Approved Leave of Absence”).  In the event of an Approved Leave of Absence, vesting of RSUs shall be suspended (and all subsequent vesting dates shall be postponed by the length of the period of the Approved Leave of Absence) unless
otherwise provided in the Company’s written approval of the leave of absence that specifically refers to this Agreement.  For purposes hereof, a Business Relationship shall include a consulting arrangement between the Recipient and the Company that immediately follows termination of employment, but only if so stated in a written consulting agreement executed by the Company that specifically refers to this Agreement.

 

 

 

 

- 2 -

 

 

(c)          Acceleration.  These RSUs shall become immediately vested in full with respect to all 20,000 shares of Common Stock issuable hereunder upon the consummation of a Change of Control.  A “Change of Control” shall mean the first to occur of any of the following: (a) any “person” or “group” (as defined in the Securities Exchange Act of 1934) becomes the beneficial owner of a majority of the combined voting power of the then outstanding voting securities with respect to the election of the Board of Directors of the Company; (b) any merger, consolidation or similar transaction involving the Company, other than a transaction in which the stockholders of the Company immediately
prior to the transaction hold immediately thereafter in the same proportion as immediately prior to the transaction not less than 50% of the combined voting power of the then voting securities with respect to the election of the Board of Directors of the resulting entity; (c) any sale of all or substantially all of the assets of the Company; or (d) any other acquisition by a third party of all or substantially all of the business or assets of the Company, as determined by the Board of Directors of the Company, in its sole discretion. 

 

In the event the Company terminates the Recipient’s employment with the Company without “cause” or the Recipient terminates his employment for “good reason” (each as defined in the Employment Agreement dated as of November 22, 2005 by and between the Company and the Recipient (the “Employment Agreement”)), the RSUs evidenced herein shall become immediately vested in full with respect to all 20,000 shares of Common Stock issuable hereunder as of the effective date of such termination.

 

3.            Issuance of Underlying Shares.  With respect to any RSUs that become vested RSUs pursuant to Section 2, subject to Section 5, the Company shall issue to the Recipient, as soon as practicable following the applicable vesting date specified on the cover page hereof, the number of Underlying Shares equal to the number of RSUs vesting on such vesting date, provided that, if the vesting date of any portion of the RSUs shall occur during either a regularly scheduled or special “blackout period” of the Company wherein Recipient is precluded from selling shares of the Company’s Common Stock, the receipt of the corresponding Underlying Shares issuable with respect to such vesting date pursuant to this Agreement shall be deferred until after the
expiration of such blackout period.  The Underlying Shares the receipt of which was deferred as provided above shall be issued to Recipient as soon as practicable after the expiration of the blackout period.

 

4.            Restrictions on Transfer.  The Recipient shall not sell, assign, transfer, pledge, encumber or dispose of all or any of his or her RSUs.

 

5.            Withholding Taxes.  All grants made pursuant to this Agreement shall be subject to withholding of all applicable income and employment taxes resulting from the issuance or vesting of the RSUs or the delivery of the Underlying Shares (the “Tax Obligations”).  The Company may, and the Recipient hereby agrees and authorizes the Company on his behalf to, withhold, sell, and/or arrange for the sale of such number of Underlying Shares otherwise issuable to the Recipient pursuant to this Agreement as deemed necessary by the Company, in its sole discretion, to ensure that the Tax Obligations can be satisfied, including the right to sell shares having a fair market value greater than the Tax
Obligations; provided, however, that for 

 

 

 

- 3 -

 

this purpose the Tax Obligations shall be computed based on the minimum statutory withholding rates for federal, state, local, and foreign income and employment tax purposes; provided, further, however, that if the Company decides to satisfy the Tax Obligations by withholding shares otherwise issuable hereunder (rather than by selling or arranging for the sale of shares on behalf of the Recipient), the Company shall not withhold shares having a fair market value greater than the Tax Obligations.  The Recipient further agrees that, if the Company elects not to withhold, sell, or arrange for the sale of the amount of Underlying Shares sufficient to satisfy the full amount of the Tax Obligations, the Company may withhold such shortfall in cash from wages or other
remuneration or the Recipient will deliver to the Company, in cash, the amount of such shortfall.  The Recipient further agrees that the Recipient shall not sell any of the Underlying Shares during the period of time that the Company is acting on the Recipient’s behalf to withhold, sell, and/or arrange for the sale of the number of Underlying Shares necessary to satisfy the Recipient’s Tax Obligations.  Notwithstanding the preceding three sentences, the Recipient may, by written notice to the Company at least ten business days before the applicable vesting date specified on the cover page hereof, elect to pay in cash the applicable Tax Obligations, or make other appropriate provisions acceptable to the Company for the payment of the applicable Tax Obligations, including the withholding from any payroll or other amounts due to the Recipient.

 

Recipient further agrees to take any further actions and execute any additional documents as may be necessary to effectuate the provisions of this Section 5 and the Recipient hereby grants the Company a irrevocable power of attorney to sign such additional documents on the Recipient’s behalf if the Company is unable after reasonable efforts to obtain Recipient’s signature on such additional documents.  This power of attorney is coupled with an interest and is irrevocable by the Recipient.

 

6.            Provision of Documentation to Recipient.  By signing the cover page of this Agreement, the Recipient acknowledges receipt of a copy of this entire Agreement, a copy of the Plan, and a copy of the Plan’s related prospectus.

 

7.            Section 409A of the Internal Revenue Code.  The RSUs granted hereunder are intended to avoid the potential adverse tax consequences to the Recipient of Section 409A of the Internal Revenue Code of 1986, as amended, and the Board may make such modifications to this Agreement as it deems necessary or advisable to avoid such adverse tax consequences.

 

8.            Rights as Stockholder.  The Recipient shall have no rights as a stockholder of the Company with respect to any RSUs covered by this Agreement until the issuance of the Underlying Shares.  

 

	
             
 	
            9.
 	
            Miscellaneous.
 

 

(a)          Notices.  All notices hereunder shall be in writing and shall be deemed given when sent by certified or registered mail, postage prepaid, return receipt requested, if to the Recipient, to the address set forth on the cover page hereof or at the address shown on the records of the Company, and if to the Company, to the Company’s principal executive offices, attention of the Corporate Secretary.  

 

 

 

- 4 -

 

 

(b)          Entire Agreement; Modification.  This Agreement constitutes the entire agreement between the parties relative to the subject matter hereof, and supersedes all proposals, written or oral, and all other communications between the parties relating to the subject matter of this Agreement.  This Agreement may be modified, amended or rescinded only by a written agreement executed by both parties signatories to this Agreement.  In the event of a conflict between the terms of this Agreement and the Plan, the terms of the Plan shall control.

 

(c)          Fractional RSUs or Underlying Shares.  All fractional RSUs or Underlying Shares resulting from the adjustment provisions contained in the Plan shall be rounded down to the nearest whole unit or share.

 

(d)          Severability.  The invalidity, illegality or unenforceability of any provision of this Agreement shall in no way affect the validity, legality or enforceability of any other provision.

 

(e)          Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, subject to the limitations set forth herein.

 

(f)           Governing Law.  This Agreement shall be governed by and interpreted in accordance with the laws of Delaware without giving effect to the principles of the conflicts of laws thereof.

 

(g)          No Obligation to Continue Business Relationship.  Neither the Plan, nor this Agreement, nor any provision hereof imposes any obligation on the Company to continue a Business Relationship with the Recipient.

 

(h)          For purposes of Sections 2, 5 and 9(g), the “Company” shall mean the Company as defined in Section 8(a) of the Plan.

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