Document:

exv4w13

Exhibit 4.13

NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED FOR THE PURCHASER’S OWN
ACCOUNT AND PURCHASER HAS NO CURRENT ARRANGEMENTS OR UNDERSTANDINGS FOR THE RESALE OR DISTRIBUTION
TO OTHERS. NO SUCH TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED
THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

POLYMEDIX, INC.

WARRANT TO PURCHASE [     ] SHARES OF COMMON STOCK

Date of Issuance: November [     ], 2009

VOID AFTER [               ], 2014

Warrant No.:

     THIS CERTIFIES THAT, for value received,                     , or permitted registered assigns (the
“Holder”), is entitled, subject to the terms set forth below, to subscribe for and purchase at the
Exercise Price (defined below) from PolyMedix, Inc., a Delaware corporation (the “Company”), at any
time during the Exercise Period, up to [          ] fully paid and nonassessable shares of the
Company’s class of common stock, par value $0.001 per share (“Common Stock”). This warrant is one
of a series of warrants to purchase shares of Common Stock (the “Warrants”) issued pursuant to that
certain Placement Agency Agreement (“Placement Agency Agreement”), dated as of November ___, 2009,
by and between the Company and the parties referred to therein.

     1. CERTAIN DEFINITIONS. As used herein, the following terms shall have the following
respective meanings:

          (a) “Exercise Period” shall mean the period commencing with the date that is 180 days
immediately following the effective date of the Registration Statement (as defined in the Placement
Agency Agreement) and ending on the fifth anniversary of the Issuance Date, if such falls on a day
other than a Trading Day, the next succeeding day that is a Trading Day, unless sooner terminated
as provided below.

          (b) “Exercise Price” shall mean $  per share, subject to adjustment as provided herein.

          (c) “Exercise Shares” shall mean the shares of Common Stock issuable upon exercise of this
Warrant.

          (d) “Fair Market Value” means, for one share of Common Stock, as of any date, the value
determined by the first of the following clauses that applies: (i) if the Common

 

 

Stock is then listed on an exchange, the average of the closing sales prices for the shares of
Common Stock on the principal exchange where such security is listed or traded as reported by
Bloomberg L.P. (or a comparable reporting service of national reputation selected by the Company
and reasonably acceptable to the Holder if Bloomberg L.P. is not then reporting sales prices of
such security) (collectively, “Bloomberg”) for the ten (10) consecutive Trading Days immediately
preceding such date, or (ii) if the Common Stock is then quoted on the OTC Bulletin Board, the
average of the reported sales prices reported by Bloomberg on the OTC Bulletin Board during the
same period, or, if there is no sales price for such period, the last sales price reported by
Bloomberg for such period, (iii) if prices for the Common Stock are then reported in the “Pink
Sheets” published by Pink Sheets, LLC (or a similar organization or agency succeeding to its
functions of reporting prices), the last sales price of such security in the “Pink Sheets”
published by Pink Sheets, LLC (or a similar organization or agency succeeding to its functions of
reporting prices) for such security as reported by Bloomberg, or if no sales price is so reported
for such security, the last bid price of such security as reported by Bloomberg; or (iv) in all
other cases, the fair market value of a share of Common Stock as determined in good faith by the
board of directors of the Company.

          (e) “Issuance Date” shall mean the Date of Issuance first written above.

          (f) “Principal Market” shall mean the OTC Bulletin Board.

          (g) “Required Holders” shall mean holders of Warrants representing at least a majority of the
shares of Common Stock underlying the Warrants then outstanding.

          (h) “Trading Day” shall mean any day on which the Common Stock is traded or quoted on the
Principal Market, or, if the Principal Market is not the principal trading market for the Common
Stock, then on the principal securities exchange or securities market on which the Common Stock is
then traded or quoted; provided that “Trading Day” shall not include any day on which the Common
Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the
Common Stock is suspended from trading during the final hour of trading on such exchange or market
(or if such exchange or market does not designate in advance the closing time of trading on such
exchange or market, then during the hour ending at 4:00:00 p.m., New York City time).

          (i) “VWAP” means, for the Common Stock, as of any date, the price determined by the first of
the following clauses that applies: (a) if the Common Stock is then listed on an exchange, the
daily volume weighted average price of the Common Stock for such date (or the nearest preceding
date) on the principal exchange on which the Common Stock is then listed for trading as reported by
Bloomberg (based on a Trading Day from 9:30:01 a.m., New York City time, to 4:00:00 p.m., New York
City time); (b) if the Common Stock is then quoted on the OTC Bulletin Board, the volume weighted
average price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin
Board; (c) if prices for the Common Stock are then reported in the “Pink Sheets” published by Pink
Sheets, LLC (or a similar organization or agency succeeding to its functions of reporting prices),
the most recent bid price per share of the Common Stock so reported; or (d) in all other cases, the
fair market value of a share of Common Stock as mutually determined by the Company and the Required
Holders.

 

 

     2. EXERCISE OF WARRANT.

          (a) The rights represented by this Warrant may, subject to Section 3 below, be exercised in
whole or in part at any time during the Exercise Period, by delivery of the following to the
Company at its address set forth on the signature page hereto (or at such other address as it may
designate by notice in writing to the Holder):

               (i) An executed Notice of Exercise in the form attached hereto; and

               (ii) Payment of the Exercise Price either in cash or by check (subject to Section 6
below).

Execution and delivery of the Notice of Exercise shall have the same effect as cancellation of the
original Warrant and issuance of a new Warrant evidencing the right to purchase the remaining
number of Exercise Shares, if any. If requested by the Company, Holder agrees to provide this
Warrant, or an affidavit of lost security, to the Company within a reasonable period after the
delivery of the Notice of Exercise.

          (b) On or before the third business day following the delivery of the Notice of Exercise and
payment of the aggregate Exercise Price, the Company shall, (X) provided that the Company’s
transfer agent is participating in The Depository Trust Company (“DTC”) Fast Automated Securities
Transfer Program (the “FAST Program”) and so long as the certificates therefor are not required to
bear a legend regarding restriction on transferability, upon the request of the Holder, credit such
aggregate number of shares of Common Stock to which the Holder is entitled pursuant to such
exercise to the Holder’s or its designee’s balance account with DTC through its Deposit Withdrawal
Agent Commission system, or (Y), if the Company’s transfer agent is not participating in the FAST
Program or if the certificates are required to bear a legend regarding restriction on
transferability, issue and dispatch by overnight courier to the address as specified in the Notice
of Exercise, a certificate, registered in the Company’s share register in the name of the Holder or
its designee, for the number of shares of Common Stock to which the Holder is entitled pursuant to
such exercise.

          (c) The person in whose name any Exercise Shares are to be issued upon exercise of this
Warrant shall be deemed to have become the holder of record of such shares on the date on which the
payment of the Exercise Price was made, irrespective of the date such Exercise Shares are credited
to the Holder’s DTC account or the date of delivery of the certificates evidencing such Exercise
Shares, as the case may be, except that, if the date of such payment is a date when the stock
transfer books of the Company are closed, such person shall be deemed to have become the holder of
such shares on the next succeeding date on which the stock transfer books are open.

          (d) To the extent permitted by law, the Company’s obligations to issue and deliver Exercise
Shares in accordance with the terms hereof are absolute and unconditional, irrespective of any
action or inaction by the Holder to enforce the same, any waiver or consent with respect to any
provision hereof, the recovery of any judgment against any person or entity or any action to
enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach
or alleged breach by the Holder or any other person or entity of any

 

 

obligation to the Company or any violation or alleged violation of law by the Holder or any
other person or entity, and irrespective of any other circumstance which might otherwise limit such
obligation of the Company to the Holder in connection with the issuance of Exercise Shares.
Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder,
at law or in equity including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company’s failure to timely deliver certificates representing
shares of Common Stock upon exercise of this Warrant as required pursuant to the terms hereof.

          (e) Upon any partial exercise and surrender of this Warrant, the Company, at its expense, will
forthwith and, in any event within five business days, issue and deliver to the Holder a new
warrant or warrants of like tenor, registered in the name of the Holder, exercisable, in the
aggregate, for the balance of the number of shares of Common Stock remaining available for purchase
under this Warrant.

     3. EXERCISE LIMITATIONS; HOLDER’S RESTRICTIONS.

          (a) The Holder shall not have the right to exercise any portion of this Warrant, pursuant to
Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise, the
Holder (together with the Holder’s affiliates), as set forth on the applicable Notice of Exercise,
would beneficially own in excess of 9.99% of the number of shares of the Common Stock outstanding
immediately after giving effect to such issuance, unless the Holder of this Warrant elects to waive
the provisions of this Section 3(a) upon not less than 61 days’ prior notice to the Company. For
purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the
Holder and its affiliates shall include the number of shares of Common Stock issuable upon exercise
of this Warrant with respect to which the determination of such sentence is being made, but shall
exclude the number of shares of Common Stock which would be issuable upon (a) exercise of the
remaining, non-exercised portion of this Warrant beneficially owned by such Holder or any of its
affiliates, and (b) exercise or conversion of the unexercised or non-converted portion of any other
securities of the Company (including, without limitation, any other shares of Common Stock or
Warrants) subject to a limitation on conversion or exercise analogous to the limitation contained
herein beneficially owned by such Holder or any of its affiliates. Except as set forth in the
preceding sentence, for purposes of this Section 3(a), beneficial ownership shall be calculated in
accordance with Section 13(d) of the Exchange Act, it being acknowledged by the Holder that the
Company is not representing to the Holder that such calculation is in compliance with Section 13(d)
of the Exchange Act, and the Holder is solely responsible for any schedules required to be filed in
accordance therewith. To the extent that the limitation contained in this Section 3(a) applies,
the determination of whether this Warrant is exercisable (in relation to other securities
beneficially owned by the Holder and his or its affiliates) and of which a portion of this Warrant
is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of
Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable
(in relation to other securities beneficially owned by the Holder and his or its affiliates) and of
which portion of this Warrant is exercisable, in each case subject to such aggregate percentage
limitation, and the Company shall have no obligation to verify or confirm the accuracy of such
determination. For purposes of this Section 3(a), in determining the number of outstanding shares
of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as
reflected in (x) the Company’s most recent Form 10-Q or Form 10-K,

 

 

as the case may be, (y) a more recent public announcement by the Company or (z) any other
notice by the Company or the Company’s transfer agent setting forth the number of shares of Common
Stock outstanding. Upon the written or oral request of the Holder, the Company shall within two
Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock then
outstanding. In any case, the number of outstanding shares of Common Stock shall be determined
after giving effect to the conversion or exercise of securities of the Company, including this
Warrant, by the Holder or its affiliates since the date as of which such number of outstanding
shares of Common Stock was reported.

          (b) This Warrant may not be exercised to purchase Exercise Shares to the extent that the
purchase of such Exercise Shares (or the right to purchase such Exercise Shares) would cause such
Holder to become an “Acquiring Person,” as that term is used in that certain Rights Agreement dated
as of May 12, 2009, between the Company and American Stock Transfer & Trust Company, LLC, as rights
agent (the “Rights Agreement”).

     4. CALL OF WARRANT. Subject to the provisions of this Section 4, if at any time
during the Exercise Period, the average VWAP for any                      (                    ) consecutive Trading Days exceeds
                                        percent (                    %) of the Exercise Price (as it may be adjusted from time to time as
provided herein), then the Company may call for cancellation, for no consideration to the Holder,
any portion of this Warrant which remains unexercised as of the Call Time (as defined below). To
exercise this right, the Company must deliver to the Holder an irrevocable written notice (a “Call
Notice”), indicating therein the portion of the unexercised portion of this Warrant to which such
notice applies. Any portion of this Warrant subject to a valid Call Notice which remain
unexercised will be cancelled at 4:00:00 p.m., New York City time, on the tenth Trading Day after
the date of the Call Notice (the “Call Time”). Any unexercised portion of this Warrant to which
the Call Notice does not pertain will be unaffected by such Call Notice. The Company covenants and
agrees that it will honor all exercises with respect to Exercise Shares subject to a Call Notice
that are made in accordance with Section 2 from the time of the Call Notice through the Call Time.
The parties agree that any exercise made following a Call Notice shall first reduce the number of
Exercise Shares subject to such Call Notice prior to reducing the remaining Exercise Shares
available for purchase under this Warrant. Subject again to the provisions of this Section 4, the
Company may deliver subsequent Call Notices for any unexercised portion of this Warrant. Unless
otherwise agreed to by the Holder of this Warrant, a Call Notice must be given to all holders of
outstanding Warrants in proportion to the amounts of Common Stock which then may be purchased by
such respective holders in accordance with the respective Warrants held by each.

     5. COVENANTS AS TO EXERCISE SHARES. The Company covenants and agrees that all
Exercise Shares that may be issued upon the exercise of the rights represented by this Warrant
will, upon issuance, be validly issued and outstanding, fully paid and nonassessable, and free from
all taxes, liens and charges with respect to the issuance thereof. The Company further covenants
and agrees that the Company will, at all times during the Exercise Period, have authorized and
reserved, free from preemptive rights, a sufficient number of shares of Common Stock to provide for
the exercise of the rights represented by this Warrant. If at any time during the Exercise Period
the number of authorized but unissued shares of Common Stock shall not be sufficient to permit
exercise of this Warrant in full, the Company will take such corporate action

 

 

as may, in the opinion of its counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient for such purposes.

     6. CASHLESS EXERCISE. If at any time during the Exercise Period there is no effective
registration statement under the Securities Act of 1933, as amended (“Securities Act”), or no
current prospectus for the sale of the Exercise Shares, then, this Warrant may be exercised at such
time by means of a “cashless exercise,” whereupon delivery of the Notice of Exercise, the Company
will issue, or cause its transfer agent to issue, a certificate bearing a legend regarding
restriction on transferability, for the number of Exercise Shares equal to the quotient obtained by
dividing [(A-B) (X)] by (A), where:

          (A) = the VWAP on the Trading Day immediately preceding the date of
the Notice of Exercise;

          (B) = the Exercise Price (as adjusted as provided herein); and

          (X) = the number of Exercise Shares issuable upon exercise of this
Warrant by means of a cash exercise;

provided, that any fractional shares shall be paid in accordance with Section 9.

     7. NO IMPAIRMENT. Except and to the extent as waived or consented to by each holder
of Warrants, the Company will not, by amendment of its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the
terms to be observed or performed hereunder by the Company, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the taking of all such
action as may be necessary or appropriate in order to protect the exercise rights of the Holder
against impairment.

     8. ADJUSTMENT OF EXERCISE PRICE AND SHARES.

          (a) In the event of any change in the outstanding Common Stock of the Company by reason of
stock dividends, split-ups, recapitalizations, reclassifications, combinations or exchanges of
shares, separations, reorganizations, liquidations, consolidation, acquisition of the Company
(whether through merger or acquisition of substantially all the assets or stock of the Company), or
the like, then the number, class and type of securities issuable upon exercise of this Warrant and
the Exercise Price shall be correspondingly adjusted to give the Holder, on exercise for the same
aggregate Exercise Price, the total number, class, and type of securities as the Holder would have
been entitled to receive had this Warrant (or the unexercised portion hereof) been exercised prior
to such event and had the Holder continued to hold the Exercise Shares issuable upon such exercise
through such event. This Warrant need not be changed because of any adjustment in the number,
class and type of securities issuable upon exercise of this Warrant.

 

 

          (b) If at any time or from time to time the holders of Common Stock of the Company (or any
shares of stock or other securities at the time receivable upon the exercise of this Warrant) shall
have received or become entitled to receive, without payment therefor,

          (i) Common Stock or any shares of stock or other securities which are at any time
directly or indirectly convertible into or exchangeable for Common Stock, or any rights or
options to subscribe for, purchase or otherwise acquire any of the foregoing by way of
dividend or other distribution (other than a dividend or distribution covered in Section
8(a) above);

          (ii) any cash paid or payable otherwise than as a cash dividend; or

          (iii) Common Stock or additional stock or other securities or property (including cash)
by way of spinoff, split-up, reclassification, combination of shares or similar corporate
rearrangement (other than an event covered in Section 8(a) above),

then and in each such case, the Holder will, upon the exercise of this Warrant, be entitled to
receive, in addition to the number of shares of Common Stock issuable thereupon, and without
payment of any additional consideration therefor, the amount of stock and other securities and
property, as applicable, (including cash in the cases referred to in clauses (ii) and (iii) above)
which such Holder would hold on the date of such exercise had such Holder been the holder of record
of such Common Stock as of the date on which holders of Common Stock received or became entitled to
receive such shares or all other additional stock and other securities and property.

          (c) Upon the occurrence of each adjustment pursuant to this Section 8, the Company at its
expense will, at the written request of the Holder, promptly compute such adjustment in accordance
with the terms of this Warrant and prepare a certificate setting forth such adjustment, including a
statement of the adjusted Exercise Price and adjusted number or type of Exercise Shares or other
securities issuable upon exercise of this Warrant, as applicable, describing the transactions
giving rise to such adjustments and showing in detail the facts upon which such adjustment is
based. Upon written request, the Company will promptly deliver a copy of each such certificate to
the Holder and to the Company’s transfer agent.

     9. FRACTIONAL SHARES. No fractional shares shall be issued upon the exercise of this
Warrant or as a consequence of any adjustment pursuant hereto. All Exercise Shares (including
fractions) issuable upon exercise of this Warrant may be aggregated for purposes of determining
whether the exercise would result in the issuance of any fractional share. If, after aggregation,
the exercise would result in the issuance of a fractional share, the Company shall, in lieu of
issuance of any fractional share, pay the Holder otherwise entitled to such fractional share a sum
in cash equal to the product resulting from multiplying the then current Fair Market Value of an
Exercise Share by such fractional share.

     10. FUNDAMENTAL TRANSACTIONS. If, at any time while this Warrant is outstanding,
(i) the Company effects any merger or consolidation of the Company with or into another entity, in
which the shareholders of the Company as of immediately prior to the transaction own less than a
majority of the outstanding stock of the surviving entity, (ii) the

 

 

Company effects any sale of all or substantially all of its assets in one or a series of
related transactions, (iii) any tender offer or exchange offer (whether by the Company or another
person or entity) is completed pursuant to which holders of Common Stock are permitted to tender or
exchange their shares for other securities, cash or property, or (iv) the Company effects any
reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common
Stock is effectively converted into or exchanged for other securities, cash or property (other than
as a result of a subdivision or combination of shares of Common Stock covered by Section 8 above)
(each, a “Fundamental Transaction”), then the Holder shall have the right thereafter to receive,
upon exercise of this Warrant, the same amount and kind of securities, cash or property, as
applicable, as the Holder would have been entitled to receive upon the occurrence of such
Fundamental Transaction if the Holder had been, immediately prior to such Fundamental Transaction,
the holder of the number of Exercise Shares then issuable upon exercise in full of such Warrant.
Following any transaction contemplated by this Section 10, the term Exercise Shares shall be deemed
to refer to the shares for which this Warrant is thereafter exercisable in accordance with the
provisions hereof. In addition, if holders of Common Stock are given a choice as to the
securities, cash, or property to be received in a Fundamental Transaction (including a right to
elect to receive any particular one or combination of more than one of the foregoing), then the
Holder shall be given the same choice of consideration upon any exercise of this Warrant following
such Fundamental Transaction, which choice of consideration can be made at the time of exercise at
any time prior to the expiration of the Exercise Period.

     11. NO STOCKHOLDER RIGHTS. This Warrant in and of itself shall not entitle the Holder
to any voting rights or other rights as a stockholder of the Company.

          (a) TRANSFER OF WARRANT. This Warrant and the Common Stock issuable upon exercise of
this Warrant shall not be transferable except upon compliance with the provisions of the Securities
Act, applicable state securities laws and applicable rules and regulations of the Financial
Industry Regulatory Authority (“FINRA”). Subject to compliance with any such applicable laws, this
Warrant and all rights hereunder are transferable, by the Holder in person or by duly authorized
attorney, upon delivery of this Warrant and the form of assignment attached hereto to any
transferee designated by the Holder.

     12. PIGGYBACK REGISTRATION RIGHTS. Subject to Section 3 above, if the Company at any
time proposes for any reason to register any of its Common Stock (either for its own account or for
the account of other security holders) under the Securities Act (other than on Form S-4 or Form S-8
promulgated under the Securities Act (or any successor forms thereto)) and the shares of Common
Stock issuable upon exercise of this Warrant are not already subject to an existing registration
statement, the Company shall give written notice to the Holder of its intention to so register
shares of Common Stock at least ten days (10) days before the initial filing of the registration
statement related thereto and, upon the request, delivered to the Company within three (3) days
after delivery of any such notice by the Company, of the Holder to include in such registration any
shares of Common Stock issuable upon exercise of this Warrant (which request shall specify the
number of shares of Common Stock proposed to be included in such registration), the Company shall
use reasonable efforts to cause all such shares of Common Stock to be included in such registration
on the same terms and conditions as the securities otherwise being sold in such registration;
provided, however, that if the managing underwriter, placement agent or the Company, determines
that the inclusion of all such shares of

 

 

Common Stock requested to be included in such registration would interfere with the successful
marketing (including pricing) of the shares of Common Stock proposed to be registered by the
Company, then the number of shares of Common Stock proposed to be included in such registration
shall be reduced in the sole discretion of the underwriters, placement agent or the Company, as the
case may be. Notwithstanding the foregoing, if, at any time after giving written notice of its
intention to register any securities and prior to the effective date of the registration statement
filed in connection with such registration, the Company shall determine for any reason either not
to register or to delay registration of such securities, the Company may, at its election, give
written notice of such determination to the Holder and, thereupon (i) in the case of a
determination not to register, shall be relieved of its obligation to register any shares of Common
Stock issuable upon exercise of this Warrant and (ii) in the case of a determination to delay
registering, shall be permitted to delay registering any shares of Common Stock issuable upon
exercise of this Warrant, for the same period as the delay in registering such shares of Common
Stock.

     13. Restrictive Legend. Each certificate for shares of Common Stock initially issued
upon the exercise of any Warrant and each certificate for shares of Common Stock issued to a
subsequent transferee of such certificate shall, unless otherwise permitted by applicable law, bear
on the face thereof a legend reading substantially as follows:

“The securities represented by this certificate were issued in a
private placement, without registration under the Securities Act of
1933, as amended (the “Securities Act”), and may not be sold,
assigned, pledged or otherwise transferred in the absence of an
effective registration under the Securities Act or qualification or
an exemption therefrom.”

     14. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT. If this Warrant is lost, stolen,
mutilated or destroyed, the Company may, on such terms as to indemnity or otherwise as it may
reasonably impose (which shall, in the case of a mutilated Warrant, include the surrender thereof),
issue a new Warrant of like denomination and tenor as this Warrant so lost, stolen, mutilated or
destroyed. Any such new Warrant shall constitute an original contractual obligation of the
Company, whether or not the allegedly lost, stolen, mutilated or destroyed Warrant shall be at any
time enforceable by anyone.

     15. NOTICES, ETC. All notices required or permitted hereunder shall be in writing and
shall be deemed effectively given: (a) upon personal delivery to the party to be notified,
(b) when sent by confirmed telex, electronic transmission or facsimile if sent during normal
business hours of the recipient, if not, then on the next business day, (c) five days after having
been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one
day after deposit with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt. All communications shall be sent to the Company at the
address listed on the signature page hereto and to the Holder at the applicable address set forth
on the applicable signature page to the Purchase Agreements dated as of November [ ], 2009, by
and between the Company and the initial Holder, or at such other address as the Company or the
Holder may designate by ten (10) days advance written notice to the other parties hereto.

 

 

     16. ACCEPTANCE. Receipt of this Warrant by the Holder shall constitute acceptance of
and agreement to all of the terms and conditions contained herein.

     17. GOVERNING LAW. This Warrant shall be governed by, and construed in accordance
with, the laws of the State of New York. The Holder hereby submits to the non-exclusive
jurisdiction of the Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Warrant or the transactions contemplated
thereby. The Holder irrevocably and unconditionally waives any objection to the laying of venue of
any suit or proceeding arising out of or relating to this Warrant in Federal and state courts in
the Borough of Manhattan in The City of New York and irrevocably and unconditionally waives and
agrees not to plead or claim in any such court that any such suit or proceeding in any such court
has been brought in an inconvenient forum.

     18. AMENDMENT OR WAIVER. Any term of this Warrant may be amended or waived (either
generally or in a particular instance and either retroactively or prospectively) with the written
consent of the Company and the Required Holders. Notwithstanding the foregoing, (a) this Warrant
may be amended and the observance of any term hereunder may be waived without the written consent
of the Holder only in a manner which applies to all Warrants in the same fashion, and (b) the
number of Exercise Shares subject to this Warrant and the Exercise Price of this Warrant may not be
amended, and the right to exercise this Warrant may not be waived, without the written consent of
the Holder. The Company shall give prompt written notice to the Holder of any amendment hereof or
waiver hereunder that was effected without the Holder’s written consent. No waivers of any term,
condition or provision of this Warrant, in any one or more instances, shall be deemed to be, or
construed as, a further or continuing waiver of any such term, condition or provision.

[Signature Page Follows]

 

 

     IN WITNESS WHEREOF, the Company caused this Series C Warrant to Purchase Common Stock to be
executed by its duly authorized officer as of the date first set forth above.

	 	 	 	 	 	 	 
	 	 	 	 	PolyMedix, Inc.
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
 Nicholas
Landekic
	 

	 	 	 	 	 	President and Chief Executive Officer
	 
	 	 	 	 	 	 
	[Corporate Seal]
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	170 N. Radnor-Chester Road, Suite 300

Radnor, PA 19087

Fax: 484-598-2401

Email: nlandekic@polymedix.com

 

 

NOTICE OF EXERCISE

TO: POLYMEDIX, INC.

     (1) The undersigned hereby elects to purchase                                        
                      shares of the common stock,
par value $0.001 (the “Common Stock”), of PolyMedix, Inc. (the “Company”) pursuant to the terms of
the attached Warrant, and tenders herewith payment of the exercise price in full, together with all
applicable transfer taxes, if any, subject to the limitations set forth in the Warrant.

     (2) Please issue the certificate for shares of Common Stock in the name of, and pay any cash
for any fractional share to:

	 	 	 	 	 
	 
	 	 

Print or type name
	 	 
	 	 	 	 	 
	 
	 	 

Social Security or other Identifying Number
	 	 
	 	 	 	 	 
	 
	 	 

Street Address
	 	 
	 	 	 	 	 
	 
	 	 

City, State, Zip Code
	 	 

     (3) If such number of shares shall not be all the shares purchasable upon the exercise of the
Warrants evidenced by this Warrant, a new warrant certificate for the balance of such Warrants
remaining unexercised shall be registered in the name of and delivered to:

     Please insert Social Security or other identifying number:                                      
                       

(Please print name and address)

	 	 	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 	 	 
	 

	 	 

(Date)
	 	 	 	 

(Signature)
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 

(Print Name)
	 	 

 

 

ASSIGNMENT FORM

     (To assign the foregoing Warrant, execute this form and supply required information. Do not
use this form to purchase shares.)

     FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned
to

	 	 	 	 	 
	Name:

	 	 	 	 
 (Please
Print)
	 
	 	 	 	 
	Address:

	 	 	 	 
 (Please
Print)
	 
	 	 	 	 
	Dated:

	 	 	 	                                        , 20                    
	 
	 	 	 	 
	Holder’s Signature:
	 	 	 	 
	 

	 	 	 	 
 
	 
	 	 	 	 
	Holder’s Address:
	 	 	 	 
	 

	 	 	 	 
 

NOTE: The signature to this Assignment Form must correspond with the name as it appears on the
face of the Warrant, without alteration or enlargement or any change whatever. Officers of
corporations and those acting in a fiduciary or other representative capacity should file proper
evidence of authority to assign the foregoing Warrant.exv10w1

Exhibit 10.1

	 	 	 
	 
	 
	 	 
	Notice of Grant of Stock Options

and Option Agreement

	 	CorVel Corporation

ID: 33-0282651

2010 Main Street Suite 600  

Irvine, California 92614
	 
	 	 
	 

Daniel
J. Starck

You have been granted an option to acquire CorVel Corporation (the
“Corporation”) common stock (the “Common Stock”) as follows:

	 	 	 	 	 
	Non-Qualified Stock Option Grant No.
	 	 	004208	 
	Date of Grant
	 	 	11/2/2009	 
	Stock Option Plan
	 	 	1988	 
	Option Price Per Share
	 	$	28.92	 
	Total Number of Shares Granted
	 	 	20,000.00	 
	Total Price of Shares Granted
	 	$	578,400.00	 
	Expiration Date
	 	 	11/2/2014	 

Provided you continue to be a Service Provider (as defined in the Stock
Option Agreement attached hereto as Exhibit A) throughout the specified
period, the Option will become exercisable in accordance with Schedule A.

Optionee (and Optionee’s spouse) hereby agree(s) that the option is
granted pursuant to and in accordance with the express terms and
conditions of the Stock Option Agreement and the Corporation’s Restated
Omnibus Incentive Plan.

	 	 	 	 	 	 	 
	/s/ V. Gordon Clemons

	 	 
	 	November 4, 2009
	 	 
	 

	 	 	 	 	 	 
	CorVel Corporation

	 	 	 	Date	 	 
	 
	 	 	 	 	 	 
	/s/ Daniel J. Starck

	 	 	 	November 6, 2009	 	 
	 

	 	 	 	 	 	 
	Daniel J. Starck

	 	 	 	Date	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Spouse

	 	 	 	Date	 	 

Date: 11/4/2009

Time: 4:10:17PM

 

CONFIDENTIAL TREATMENT REQUESTED

Schedule A

Performance Option

Grant: 20,000 shares

Definitions:

“EPS” shall mean fully diluted net income per share (as reported in the Company’s financial
statements filed with the Securities and Exchange Commission).

“Calendar 2010 Achieve Target” shall mean the Company achieves EPS of at least $*.** per share
during calendar year 2010.

“Calendar 2010 Achieve Alternate Target” shall mean the Company achieves EPS of at least $*.** per
share during calendar year 2010.

“Calendar 2011 Achieve Target” shall mean the Company achieves EPS of at least $*.** per share
during calendar year 2011.

“Calendar 2011 Achieve Alternate Target” shall mean the Company achieves EPS of at least $*.** per
share during calendar year 2011.

“Calendar 2012 Achieve Target” shall mean the Company achieves EPS of at least $*.** per share
during calendar year 2012.

“Calendar 2012 Achieve Alternate Target” shall mean the Company achieves EPS of at least $*.** per
share during calendar year 2012.

Unless otherwise defined herein, capitalized terms used herein shall have the meanings assigned to
them in the Stock Option Agreement.

 

			
	*	 	Confidential treatment requested pursuant to Rule 24b-2 under the Securities Exchange Act of
1934. In accordance with Rule 24b-2, these confidential portions have been omitted from this
exhibit and filed separately with the Securities and Exchange Commission.

 

 

CONFIDENTIAL TREATMENT REQUESTED

Vesting Schedule:

Upon the Company achieving the specified targets set forth in the table below, the Option shall
become exercisable during each stated calendar year for the number of Option Shares set forth
opposite such targets described in the table below.

Performance Vesting

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Performance	 	Number of Option Shares That Will Vest	 	 	 	 
	2010	 	2011	 	2012	 	2010	 	2011	 	2012	 	Total	 	 	 	 
	Achieve Target
	 	Achieve Target	 	Achieve Target	 	 	6,000	 	 	 	6,000	 	 	 	8,000	 	 	 	20,000	 	 	 	100	%
	Achieve Target
	 	Achieve Target	 	Achieve Alternate Target	 	 	6,000	 	 	 	6,000	 	 	 	4,000	 	 	 	16,000	 	 	 	80	%
	Achieve Target
	 	Achieve Target	 	Fail to Achieve Any Target	 	 	6,000	 	 	 	6,000	 	 	 	0	 	 	 	12,000	 	 	 	60	%
	Achieve Target
	 	Achieve Alternate Target	 	Achieve Target	 	 	6,000	 	 	 	3,000	 	 	 	8,000	 	 	 	17,000	 	 	 	85	%
	Achieve Target
	 	Achieve Alternate Target	 	Achieve Alternate Target	 	 	6,000	 	 	 	3,000	 	 	 	4,000	 	 	 	13,000	 	 	 	65	%
	Achieve Target
	 	Achieve Alternate Target	 	Fail to Achieve Any Target	 	 	6,000	 	 	 	3,000	 	 	 	0	 	 	 	9,000	 	 	 	45	%
	Achieve Target
	 	Fail to Achieve Any Target	 	Achieve Target	 	 	6,000	 	 	 	0	 	 	 	10,000	 	 	 	16,000	 	 	 	80	%
	Achieve Target
	 	Fail to Achieve Any Target	 	Achieve Alternate Target	 	 	6,000	 	 	 	0	 	 	 	5,000	 	 	 	11,000	 	 	 	55	%
	Achieve Target
	 	Fail to Achieve Any Target	 	Fail to Achieve Any Target	 	 	6,000	 	 	 	0	 	 	 	0	 	 	 	6,000	 	 	 	30	%
	Achieve Alternate Target
	 	Achieve Target	 	Achieve Target	 	 	3,000	 	 	 	6,000	 	 	 	8,000	 	 	 	17,000	 	 	 	85	%
	Achieve Alternate Target
	 	Achieve Target	 	Achieve Alternate Target	 	 	3,000	 	 	 	6,000	 	 	 	4,000	 	 	 	13,000	 	 	 	65	%
	Achieve Alternate Target
	 	Achieve Target	 	Fail to Achieve Any Target	 	 	3,000	 	 	 	6,000	 	 	 	0	 	 	 	9,000	 	 	 	45	%
	Achieve Alternate Target
	 	Achieve Alternate Target	 	Achieve Target	 	 	3,000	 	 	 	3,000	 	 	 	8,000	 	 	 	14,000	 	 	 	70	%
	Achieve Alternate Target
	 	Achieve Alternate Target	 	Achieve Alternate Target	 	 	3,000	 	 	 	3,000	 	 	 	4,000	 	 	 	10,000	 	 	 	50	%
	Achieve Alternate Target
	 	Achieve Alternate Target	 	Fail to Achieve Any Target	 	 	3,000	 	 	 	3,000	 	 	 	0	 	 	 	6,000	 	 	 	30	%
	Achieve Alternate Target
	 	Fail to Achieve Any Target	 	Achieve Target	 	 	3,000	 	 	 	0	 	 	 	10,000	 	 	 	13,000	 	 	 	65	%
	Achieve Alternate Target
	 	Fail to Achieve Any Target	 	Achieve Alternate Target	 	 	3,000	 	 	 	0	 	 	 	5,000	 	 	 	8,000	 	 	 	40	%
	Achieve Alternate Target
	 	Fail to Achieve Any Target	 	Fail to Achieve Any Target	 	 	3,000	 	 	 	0	 	 	 	0	 	 	 	3,000	 	 	 	15	%
	Fail to Achieve Any Target
	 	Achieve Target	 	Achieve Target	 	 	0	 	 	 	8,000	 	 	 	8,000	 	 	 	16,000	 	 	 	80	%
	Fail to Achieve Any Target
	 	Achieve Target	 	Achieve Alternate Target	 	 	0	 	 	 	8,000	 	 	 	4,000	 	 	 	12,000	 	 	 	60	%
	Fail to Achieve Any Target
	 	Achieve Target	 	Fail to Achieve Any Target	 	 	0	 	 	 	8,000	 	 	 	0	 	 	 	8,000	 	 	 	40	%
	Fail to Achieve Any Target
	 	Achieve Alternate Target	 	Achieve Target	 	 	0	 	 	 	4,000	 	 	 	8,000	 	 	 	12,000	 	 	 	60	%
	Fail to Achieve Any Target
	 	Achieve Alternate Target	 	Achieve Alternate Target	 	 	0	 	 	 	4,000	 	 	 	4,000	 	 	 	8,000	 	 	 	40	%
	Fail to Achieve Any Target
	 	Achieve Alternate Target	 	Fail to Achieve Any Target	 	 	0	 	 	 	4,000	 	 	 	0	 	 	 	4,000	 	 	 	20	%
	Fail to Achieve Any Target
	 	Fail to Achieve Any Target	 	Achieve Target	 	 	0	 	 	 	0	 	 	 	10,000	 	 	 	10,000	 	 	 	50	%
	Fail to Achieve Any Target
	 	Fail to Achieve Any Target	 	Achieve Alternate Target	 	 	0	 	 	 	0	 	 	 	5,000	 	 	 	5,000	 	 	 	25	%
	Fail to Achieve Any Target
	 	Fail to Achieve Any Target	 	Fail to Achieve Any Target	 	 	0	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	0	%

Notwithstanding anything to the contrary in this Schedule A or the Stock Option Agreement
to which this Schedule A is attached, the Company shall have the right, in its sole
discretion, with or without the consent of the Optionee, to amend this Schedule A to adjust
any or all of the targets, dates and/or target EPS amounts as it deems equitable to recognize
unusual or non-recurring events, including, but not limited to the Company’s acquisition of another
business entity or assets, a corporate merger or other consolidation, or the sale or
discontinuation of significant business operations or business units of the Company; changes in tax
laws or accounting procedures; and any other extraordinary circumstances.

 

 

Section 16 Insiders Discretionary Option Grant Program

CorVel Corporation

Stock Option Agreement

     A. The Board has adopted the Plan for the purpose of retaining the services of
selected Employees, non-employee members of the Board (or the board of directors of any
Parent or Subsidiary) and consultants and advisors who provide services to the Company (or
any Parent or Subsidiary).

     B. Optionee is to render valuable services to the Company (or a Parent or Subsidiary),
and this Agreement is executed pursuant to, and is intended to carry out the purposes of,
the Plan in connection with the Company’s grant of an option to Optionee.

     C. All capitalized terms in this Agreement shall have the meaning assigned to them in
the attached Appendix.

          Now, therefore, it is hereby agreed as follows:

          1. Grant of Option. Subject to and upon the terms and conditions set forth in
this Agreement, Optionee is hereby granted, as of the Grant Date, an option to
purchase the Option Shares. The Option Shares shall be purchasable from time to
time during the option term at the Exercise Price.

          2. Option Term. This option shall expire at the close of business on the
Expiration Date, unless sooner terminated in accordance with this Agreement.

          3. Limited Transferability.

               (a) During Optionee’s lifetime, this option shall be exercisable only
by Optionee and shall not be assignable or transferable other than by
will, by the laws of descent and distribution following the Optionee’s
death, or to any “Family Member” (as such term is defined in the General
Instructions to Form S-8 (or any successor to such Instructions or such
Form) under the Securities Act), provided that Optionee may not receive
any consideration for such transfer, the Family Member may not make any
subsequent transfers other than by will or by the laws of descent and
distribution and the Company receives written notice of such transfer.
This assigned portion may only be exercised by the person or persons who
acquire a proprietary interest in the option pursuant to the assignment.
The terms applicable to the assigned portion shall be the same as those in
effect for this option immediately prior to such assignment and shall be
set forth in such documents issued to the assignee as the Company may deem appropriate.

               (b) Should Optionee die while holding this option, then this option
shall be transferred in accordance with Optionee’s will or the laws of
inheritance. However, Optionee may designate one or more persons as the
beneficiary or beneficiaries of this option, and this option shall, in
accordance with such designation, automatically be transferred to such

 

 

beneficiary or beneficiaries upon Optionee’s death while holding this option. Such beneficiary or
beneficiaries shall take the transferred option subject to all the terms and conditions of this
Agreement, including (without limitation) the limited time period during which this option may,
pursuant to Paragraph 5, be exercised following Optionee’s death.

          4. Exercisability. This option shall become exercisable in one or more
installments as specified in the Grant Notice. As the option becomes exercisable
for such installments, those installments shall accumulate, and the option shall
remain exercisable for the accumulated installments until the Expiration Date or
sooner termination of the option term.

          5. Effect of Cessation of Service.

               (a) Should Optionee cease to be a Service Provider for any reason
(other than death, Permanent Disability or Misconduct) while this option
is outstanding, then this option shall remain exercisable until the
earlier of (i) the expiration of the three month period commencing with
the date of such cessation of Service Provider status or (ii) the
Expiration Date.

               (b) Should Optionee cease to be a Service Provider by reason of
Permanent Disability or death while this option is outstanding, then the
option shall remain exercisable until the earlier of (i) the expiration of
the twelve month period commencing with the date of such cessation of
Service Provider status or (ii) the Expiration Date.

               (c) Should Optionee cease to be a Service Provider due to termination
for Misconduct, then this option shall terminate immediately.

               (d) During the limited period of post-service exercisability, this
option may not be exercised in the aggregate for more than the number of
Option Shares for which the option is exercisable at the time Optionee
ceased to be a Service Provider. This option shall, immediately when
Optionee ceases to be a Service Provider for any reason, terminate with
respect to any Option Shares for which this option is not otherwise at that time
exercisable. Upon the expiration of the limited post-service exercise
period or (if earlier) upon the Expiration Date, this option shall
terminate entirely.

          6. Effect of Corporate Transaction.

               (a) This option, to the extent outstanding at the time of a Corporate
Transaction but not otherwise fully exercisable, shall automatically
accelerate so that this option shall, immediately prior to the effective
date of such Corporate Transaction, become exercisable for all of the
Option Shares at the time subject to this option. However, this option
shall not become exercisable on such an accelerated basis, if and to the
extent: (i) this option is, in connection with the Corporate Transaction,
to be assumed by the successor corporation (or parent thereof) or to be
replaced with a comparable option to purchase shares of the capital stock
of the successor corporation (or parent thereof) or (ii) this option is to
be replaced with a cash incentive program of the successor corporation
which preserves the spread existing at the time of the Corporate
Transaction on any Option Shares for which this option is not otherwise at
that

2

 

time exercisable (the excess of the Fair Market Value of those Option Shares over the aggregate
Exercise Price payable for such shares) and provides for subsequent payout in accordance with the
same exercise schedule for those Option Shares set forth in the Grant Notice.

               (b) Upon the consummation of the Corporate Transaction, this option
shall terminate, except to the extent assumed by the successor corporation
(or parent thereof) in connection with the Corporate Transaction.

               (c) If this option is assumed in connection with a Corporate
Transaction, then this option shall be appropriately adjusted, immediately
after such Corporate Transaction, to apply to the number and class of
securities which would have been issuable to Optionee as a result of the
consummation of such Corporate Transaction had the option been exercised
immediately prior to such Corporate Transaction, and appropriate
adjustments shall also be made to the Exercise Price, provided the
aggregate Exercise Price shall remain the same.

               (d) This Agreement shall not in any way affect the right of the
Company to adjust, reclassify, reorganize or otherwise change its capital
or business structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or assets.

          7. Adjustment in Option Shares. Should any change be made to the Common Stock
by reason of any stock split, reverse stock split, stock dividend,
recapitalization, combination of shares, exchange of shares, reorganization,
merger, consolidation, split-up, spinoff, or other change affecting the outstanding
Common Stock as a class without the Company’s receipt of consideration, appropriate
adjustments shall be made to (a) the total number and/or class of securities
subject to this option and (b) the Exercise Price in order to reflect such change
and thereby preclude a dilution or enlargement of benefits hereunder.

          8. Stockholder Rights. The holder of this option shall not have any
stockholder rights with respect to the Option Shares until such person shall have
exercised the option in accordance with the provisions of Paragraph 9, paid the
Exercise Price and become a holder of record of the purchased shares.

          9. Manner of Exercising Option.

               (a) In order to exercise this option with respect to all or any part
of the Option Shares for which this option is at the time exercisable,
Optionee (or any other person or persons exercising the option) must take
the following actions:

               (i) Execute and deliver to the Company (A) a Notice of
Exercise, in substantially the form attached hereto as Exhibit I,
that specifies the number of Option Shares for which the option is
being exercised and (B) any additional documents which the
Committee may, in its discretion, deem advisable.

3

 

               (ii) Pay the aggregate Exercise Price for the purchased
shares in one or more of the following forms:

               (A) cash or check payable to the Company’s order;

               (B) shares of Common Stock held by Optionee for the
requisite period necessary to avoid a charge to the
Company’s reported earnings and valued at Fair Market
Value on the Exercise Date; or

               (C) through a special sale and remittance procedure
pursuant to which Optionee is to provide irrevocable
written instructions (1) to a brokerage firm to effect the
immediate sale of the purchased shares and remit to the
Company, out of the sale proceeds available on the
settlement date,
an amount sufficient to cover the aggregate Exercise
Price payable for the purchased shares plus all applicable
Federal and state income and employment taxes required to
be withheld by the Company by reason of such purchase and
(2) to the Company to deliver the certificates for the
purchased shares directly to such brokerage firm in order
to complete the sale transaction.

               (iii) Furnish to the Company appropriate documentation that
the person or persons exercising the option (if other than
Optionee) have the right to exercise this option.

               (iv) Make appropriate arrangements with the Company (or
Parent or Subsidiary employing or retaining Optionee) for the
satisfaction of all Federal, state and local income and employment
tax withholding requirements applicable to the option exercise.

               (b) If payment of the exercise price is made by means of the
surrender of shares of Common Stock which are subject to certain
restrictions, the number of shares of Common Stock issued upon the
exercise of the option equal to the number of shares of restricted stock
surrendered shall be subject to the same restrictions as the restricted
stock that was surrendered.

               (c) Except to the extent the sale and remittance procedure specified
in Paragraph 9(a)(ii)(C) is utilized in connection with the option
exercise, payment of the option price for the purchased shares must
accompany the Notice of Exercise.

               (d) Assuming Optionee does not sell the purchased shares of Common
Stock on the Exercise Date, as soon as practical after the Exercise Date,
the Company shall either (i) issue to or on behalf of Optionee (or any
other person or persons exercising this option) a certificate for the
purchased Option Shares, with the appropriate legends affixed thereto, or
(ii) instruct the Company’s transfer agent to make a book-entry reflecting
the purchase on its stockholder ledger.

4

 

               (e) In no event may this option be exercised for any fractional shares.

          10. Tax Withholding. The Committee may, in its discretion and upon such terms
and conditions as it may deem appropriate (including the applicable safe-harbor
provisions of Securities and Exchange Commission Rule 16b-3 or any successor rule
or regulation) provide Optionee (if Optionee is an Employee) with the election to
surrender previously acquired shares of Common Stock or have shares withheld
in satisfaction of the tax withholding obligations. To the extent necessary to
avoid adverse accounting treatment, the number of shares that may be withheld for
this purpose shall not exceed the minimum number needed to satisfy the applicable
income and employment tax withholding rules. If Common Stock is used to satisfy
the Company’s tax withholding obligations, the shares of Common Stock shall have
been held by Optionee for the requisite period necessary to avoid a charge to the
Company’s reported earnings and shall be valued at their Fair Market Value when
the tax withholding is required to be made.

          11. Compliance with Laws and Regulations.

               (a) The exercise of this option and the issuance of the Option Shares
upon such exercise shall be subject to compliance by the Company and
Optionee with all applicable requirements of law relating thereto and with
all applicable regulations of any Stock Exchange (or the Nasdaq Stock
Market, if applicable) on which the Common Stock may be listed for trading
at the time of such exercise and issuance.

               (b) The inability of the Company to obtain approval from any
regulatory body having authority deemed by the Company to be necessary to
the lawful issuance and sale of any Common Stock pursuant to this option
shall relieve the Company of any liability with respect to the
non-issuance or sale of the Common Stock as to which such approval shall
not have been obtained. The Company, however, shall use reasonable
efforts to obtain all such approvals.

          12. Successors and Assigns. Except to the extent otherwise provided in this
Agreement, the provisions of this Agreement shall inure to the benefit of, and be
binding upon, the Company and its successors and assigns and Optionee, Optionee’s
assigns, the legal representatives, heirs and legatees of Optionee’s estate and any
beneficiaries of this option designated by Optionee.

          13. Notices. Any notice required to be given or delivered to the Company
under the terms of this Agreement shall be in writing and addressed to the Company
at its principal corporate offices. Any notice required to be given or delivered
to Optionee shall be in writing and addressed to Optionee at the address indicated
below Optionee’s signature line on the Grant Notice. All notices shall be deemed
effective upon personal delivery or three days after deposit in the U.S. mail,
postage prepaid and properly addressed to the party to be notified.

          14. Construction. This Agreement and the option evidenced hereby are made and
granted pursuant to the Plan and are in all respects limited by and subject to the
terms of the Plan. In the event of a
conflict between the terms and conditions of the Plan and the terms and
conditions of this Agreement, the terms and conditions of this Agreement shall
prevail. All

5

 

decisions of the Committee with respect to any question or issue arising under the Plan or this
Agreement shall be conclusive and binding on all persons having an interest in this option.

          15. Governing Law. The interpretation, performance and enforcement of this
Agreement shall be governed by the laws of the State of Delaware without resort to
its conflict-of-laws rules.

          16. No Employment/Service Contract. Nothing in this Agreement or in the Plan
shall confer upon Optionee any right to continue to be a Service Provider of the
Company (or any Parent or Subsidiary) for any period of specific duration or
otherwise interfere with or restrict in any way the rights of the Company (or such
Parent or Subsidiary) or Optionee, which rights are hereby expressly reserved by
each, to terminate Optionee’s Service Provider status at any time and for any
reason whatsoever, with or without cause.

6

 

EXHIBIT I

NOTICE OF EXERCISE OF STOCK OPTION

     I hereby notify
CorVel Corporation (the “Company”) that I, __________________,
elect to purchase _______________
shares of Common Stock of the Corporation (the “Purchased Shares”) at an option price
of $__________________ per share (the “Option
Price”) pursuant to the option
(the “Option”) granted to me on __________________.

          My option was granted as a non-qualified stock option. I will need to report taxable
income at the time I exercise this Option and pay the corresponding withholding tax (the
“Withholding
Tax”) to the Corporation. The Withholding Tax is computed on the difference between the Option
Price
and the Fair Market Value of the stock on the date I exercise the Option.

          Concurrently with the delivery of the Exercise Notice to the Chief Financial Officer of
the Corporation, I shall hereby pay to the Corporation the Option Price and Withholding Tax for the
Purchased Shares in accordance with the provisions of my agreement with the Corporation evidencing
the Option and shall deliver whatever additional documents may be required by such agreement as a
condition for exercise.

	 	 	 
	 
	Date

	 	Optionee’s Signature

	 
	 	 
	If applicable, print name in exact manner it
is to appear on the stock certificate:
	 	 
	 
	 	 
	Optionee’s Mailing Address:
	 	 
	 
	 	 
	 
	 	 
	Address to which certificate is to be sent, if
different from address above:
	 	 
	 
	 	 
	 
	 	 
	Brokerage Account Information
(Broker Name, Contact Info., Account #)
	 	 
	 
	 	 
	 
	 	 

A-1

 

APPENDIX

          The following definitions shall be in effect under this Agreement:

     A. Agreement shall mean this Stock Option Agreement.

     B. Board shall mean the Board of Directors of the Company.

     C. Common Stock shall mean shares of the Company’s common stock, $0.0001 par value.

     D. Code shall mean the Internal Revenue Code of 1986, as amended.

     E. Committee shall mean a committee designated by the Board to administer the Plan,
which initially shall be the compensation committee of the Board. The Committee shall be
comprised of at least two directors but not less than such number of directors as shall be
required to permit awards granted under the Plan to qualify under Rule 16b-3 under the
Securities Act and Section 162(m) of the Code, and each member of the Committee shall be a
“Non-Employee Director “ within the meaning of Rule 16b-3 under the Securities Act and an
“Outside Director” within the meaning of Section 162(m) of the Code.

     F. Company shall mean CorVel Corporation, a Delaware corporation, or
any corporate successor which shall assume the Plan.

     G. Corporate Transaction shall mean any of the following transactions for which the
approval of the Company’s stockholders is obtained:

     (i) a merger or acquisition in which the Company is not the surviving entity,
except for a transaction the principal purpose of which is to change the state of
the Company’s incorporation,

     (ii) the sale, transfer or other disposition of all or substantially all of
the assets of the Company to any entity other than a parent or subsidiary of the
Company, or

     (iii) any reverse merger in which the Company is the surviving entity but in
which fifty percent (50%) or more of the Company’s outstanding voting stock is
transferred to holders different from those who held such fifty percent (50%) or
greater interest immediately prior to such merger.

     H. Employee shall mean an individual for whom the Company or one or more of its Parent
or Subsidiaries reports his or her earnings on a Form W-2.

     I. Exercise Date shall mean the date on which the option shall have been exercised in
accordance with Paragraph 9.

A-2

 

     J. Exercise Price shall mean the exercise price per Option Share as specified in the
Grant Notice.

     K. Expiration Date shall mean the date on which the option expires as specified in the
Grant Notice.

     L. Fair Market Value per share of Common Stock on any relevant date shall be
determined in accordance with the following provisions:

     (i) If the Common Stock is at the time listed on the Nasdaq National Market
or the Nasdaq Capital Market, then the Fair Market Value shall be the closing
selling price per share of Common Stock on the date in question, as such price is
reported by the National Association of Securities Dealers on the Nasdaq National
Market or the Nasdaq Capital Market and published in The Wall Street Journal.

     (ii) If the Common Stock is at the time listed on any Stock Exchange, then
the Fair Market Value shall be the closing selling price per share of Common Stock
on the date in question on the Stock Exchange determined by the Committee to be the
primary market for the Common Stock, as such price is officially quoted in the
composite tape of transactions on such exchange and published in The Wall Street
Journal.

     (iii) If the Common Stock is not listed on the Nasdaq National Market, Nasdaq
Capital Market or a national securities exchange, the Fair
Market Value shall be the average of the closing bid and ask prices of the
Common Stock on that day as reported by the Nasdaq bulletin board or any comparable
system on that day.

     (iv) If the Common Stock is not traded included in the Nasdaq bulletin board
or any comparable system, the Fair Market Value shall be the average of the closing
bid and ask prices on that day as furnished by any member of the National
Association of Securities Dealers, Inc. selected from time to time by the Company
for that purpose.

     (v) If the date in question is not a trading day, then the Fair Market Value
shall be determined based on prices for the trading day prior to the date in
question.

     M. Grant Date shall mean the date of grant of the option as specified in the Grant Notice.

     N. Grant Notice shall mean the Notice of Grant of Stock Option accompanying this
Agreement, pursuant to which Optionee has been informed of the basic terms of the option
evidenced hereby.

     O. Misconduct shall mean any of the following:

          (i) Optionee’s intentional misconduct or continuing gross neglect of
duties which materially and adversely affects the business and operations
of the Company or any Parent or Subsidiary employing Optionee;

A-3

 

          (ii) Optionee’s unauthorized use or disclosure of (or attempt to use
or disclose) confidential information or trade secrets of the Company or
any Parent or Subsidiary; or

          (iii) Optionee’s commission of an act involving embezzlement, theft,
fraud, falsification of records, destruction of property or commission of
a crime or other offense involving money or other property of the Company
or any Parent or Subsidiary employing Optionee.

               The reasons for termination of Optionee as a Service Provider set forth in this subparagraph
are not intended to be an exclusive list of all acts or omissions which the Company (or any Parent
or Subsidiary) may deem to constitute misconduct or other grounds for terminating Optionee (or any
other individual).

     P. Non-Statutory Option shall mean an option not intended to satisfy the requirements
of Code Section 422.

     Q. Notice of Exercise shall mean the notice of exercise in the form attached hereto as
Exhibit I.

     R. Option Shares shall mean the number of shares of Common Stock subject to the option as specified in the Grant Notice.

     S. Optionee shall mean the person to whom the option is granted as specified in the
Grant Notice.

     T. Parent shall mean any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company, provided each such corporation in the unbroken chain
(other than the Company) owns, at the time of the determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain.

     U. Permanent Disability shall have the meaning assigned to “permanent and total
disability” as set forth in Code Section 22(e)(3).

     V. Plan shall mean the CorVel Corporation Restated Omnibus Incentive Plan (Formerly
The Restated 1988 Executive Stock Option Plan).

     W. Securities Act shall mean the Securities Act of 1933, as amended.

     X. Service Provider shall mean an individual who renders service on a periodic basis
to the Company, its Parent and/or any of its Subsidiaries as an Employee, a non-Employee
member of the board of directors or a consultant or independent advisor.

     Y. Stock Exchange shall mean the American Stock Exchange or the New York Stock
Exchange, or any other national stock exchange.

A-4

 

     Z. Subsidiary shall mean any corporation (other than the Company) in an unbroken chain
of corporations beginning with the Company, provided such corporation (other than the last
corporation in the unbroken chain) owns, at the time of determination, stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of stock in
one of the other corporations in such chain. For purposes of all Non-Statutory Option
grants under the Plan and all Corporate Transaction provisions of the Plan, the term
“Subsidiary” shall also include any partnership, joint venture or other business entity of
which the Company owns, directly or indirectly through another entity, more than a fifty
percent (50%) interest in voting power, capital or profits.

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