Document:

Exhibit 10.1

 

THE SECURITY REPRESENTED BY THIS CERTIFICATE HAS BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE
OR DISTRIBUTION THEREOF.  NO SUCH SALE OR
DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO
THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF
1933.

 

STOCK OPTION AGREEMENT

 

CollaGenex Pharmaceuticals, Inc., a Delaware
corporation (the “Company”), hereby grants to George
M. Lasezkay (the “Optionee”) an Option to purchase a total of 25,000 shares of Common Stock (the “Shares”),
at the price determined as provided herein, and in all respects subject to the
terms, definitions and provisions of the 1996 Non-Employee Director Stock
Option Plan, as amended, (the “Plan”) adopted by the Company, which is
incorporated herein by reference.  Unless
otherwise defined herein, the terms defined in the Plan shall have the same
defined meanings herein.

 

1.             Nature of the Option.  This
Option is a Nonstatutory Stock Option and is not intended to qualify for any
special tax benefits to the Optionee.

 

2.             Exercise Price.  The exercise price is $9.78 for each Share of Common Stock, which
price is 100% of the fair market value per Share of Common Stock on the Grant
Date. The exercise price may be adjusted in accordance with Section 10 of
the Plan.

 

3.             Exercise of Option.  This
Option shall be exercisable during its term in accordance with the provisions
of Section 9 of the Plan as follows:

 

(i)            Right
to Exercise

 

(a)           Subject to
subsections 3(i)(b), (c), (d), (e) and (f) below, one-fifth (1/5) of
the total number of Shares subject to this Option shall become exercisable on
each of the first five anniversaries of the Grant Date, until all of such
Shares are exercisable.

 

(b)           If the
Optionee attends less than 75% of the Board meetings of the Company (whether
regular or special) held in any fiscal year (a “Default Year”), then either (i) the
Optionee shall forfeit his exercise rights with respect to the installment of
this Option which vested on the preceding annual vesting date, in proportion to
the percentage of Board meetings actually attended by such Optionee during the
Default Year; or (ii) in the event that the Optionee does not own a
sufficient number of exercisable options to satisfy the forfeiture obligation
described above, the Optionee shall forfeit his right to receive the next
succeeding annual installment of this Option, in proportion to the percentage
of Board meetings which the Optionee actually attended in
the Default Year.

 

(c)           In the
event of Optionee’s death or permanent disability or other termination of
status as a Board Member, the exercisability of this Option is governed by
Sections 7 and 8 below, subject to the limitations contained in subsections
3(i)(d) hereof.

 

 

(d)           In no
event may this Option be exercised after the date of expiration of the term of
this Option as set forth in Section 10 below.

 

(e)           This
Option may not be exercised for a fraction of a Share.

 

(f)            There
shall be no exercise at any one time as to fewer than one hundred (100) Shares
or all the remaining Shares then purchasable by the Optionee, if fewer than one
hundred (100) Shares.

 

(g)           Upon any
merger, consolidation, sale of all (or substantially all) of the assets of the
Company, or a business combination involving the sale or transfer of all (or
substantially all) of the capital stock or assets of the Company in which the
Company is not the surviving entity, or, if it is the surviving entity, does
not survive as an operating going concern in substantially the same line of
business, then this Option shall, immediately prior to the consummation of any
of the foregoing events, become fully vested and immediately exercisable by the
Optionee.

 

(ii)           Method
of Exercise.  This Option shall be
exercisable by written notice in the form attached as Exhibit A, which
shall state the election to exercise the Option, the number of Shares with
respect to which the Option is being exercised, and such other representations
and agreements as to the holder’s investment intent with respect to such Shares
of Common Stock as may be required by the Company pursuant to the provisions of
the Plan.  Such written notice shall be
signed by Optionee and shall be delivered in person or by certified mail to the
Chief Financial Officer.  The written
notice shall be accompanied by full payment of the exercise price.  This Option shall be deemed to be exercised
upon receipt by the Company of such written notice accompanied by the exercise
price.  Until the issuance (as evidenced
by the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company) of the stock certificate evidencing such Shares,
no right to vote or receive dividends or any other rights as a shareholder
shall exist with respect to the Optioned Stock, notwithstanding the exercise of
the Option.  The Company shall issue (or
cause to be issued) such stock certificate promptly upon exercise of the Option.

 

No Shares will be issued
pursuant to the exercise of an Option unless such issuance and such exercise
shall comply with all relevant provisions of law and the requirements of any
stock exchange upon which the Shares may then be listed.  Assuming such compliance, for income tax
purposes, the Shares shall be considered transferred to the Optionee on the
date on which the Option is exercised with respect to such Shares.

 

4.             Investment Representations; Restrictions on
Transfer.

 

(i)            By
receipt of this Option, by its execution and by its exercise in whole or in
part, Optionee represents to the Company the following:

 

(a)           Optionee
understands that this Option and any Shares purchased upon its exercise are
securities, the issuance of which requires compliance with federal and state
securities laws.

 

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(b)           Optionee
is aware of the Company’s business affairs and financial condition and has
acquired sufficient information about the Company to reach an informed and
knowledgeable decision to acquire the securities.  Optionee is acquiring these securities for
investment for Optionee’s own account only and not with a view to, or for
resale in connection with, any “distribution” thereof within the meaning of the
Securities Act of 1933, as amended (the “Securities Act”).

 

(c)           Optionee
acknowledges and understands that the securities constitute “restricted
securities” under the Securities Act and must be held indefinitely unless they
are subsequently registered under the Securities Act or an exemption from such
registration is available.  Optionee
further acknowledges and understands that the Company is under no obligation to
register the securities.  Optionee
understands that the certificate evidencing the securities will be imprinted
with a legend which prohibits the transfer of the securities unless they are
registered or such registration is not required in the opinion of counsel
satisfactory to the Company and any other legend required under applicable
state securities laws.

 

(d)           Optionee
is familiar with the provisions of Rule 701 and Rule 144, each
promulgated under the Securities Act, which, in substance, permit limited
public resale of “restricted securities” acquired, directly or indirectly, from
the issuer thereof, in a non-public offering subject to the satisfaction of
certain conditions.  Rule 701
provides that if the issuer qualifies under Rule 701 at the time of
exercise of the Option by the Optionee, such exercise will be exempt from
registration under the Securities Act. 
In the event the Company later becomes subject to the reporting
requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, ninety (90) days thereafter the securities exempt under Rule 701 may
be resold, subject to the satisfaction of certain of the conditions specified
by Rule 144, including among other things: (1) the sale being made
through a broker in an unsolicited “broker’s transaction” or in transactions
directly with a market maker (as said term is defined under the Securities
Exchange Act of 1934); and, in the case of an affiliate, (2) the
availability of certain public information about the Company, and the amount of
securities being sold during any three-month period not exceeding the
limitations specified in Rule 144(e), if applicable.  Notwithstanding this paragraph 4(i)(d), the Optionee acknowledges and agrees to the
restrictions set forth in paragraph 4(ii) below.

 

In the event that the
Company does not qualify under Rule 701 at the time of exercise of the
Option, then the securities may be resold in certain limited circumstances
subject to the provisions of Rule 144, which requires among other
things:  (1) the availability of
certain public information about the Company; (2) the resale occurring not
less than two years after the party has purchased, and made full payment for,
within the meaning of Rule 144, the securities to be sold; and (3) in
the case of an affiliate, or of a non-affiliate who has held the securities
less than three years, the sale being made through a broker in an unsolicited “broker’s
transaction” or in transactions directly with a market maker (as said term is
defined under the Securities Exchange Act of 1934) and the amount of securities
being sold during any three month period not exceeding the specified
limitations stated therein, if applicable.

 

5.             Method of Payment.  Payment
of the purchase price shall be (a) in United States dollars in cash or by
check, (b) in whole or in part in shares of Common Stock of the Company
already owned by the Optionee or Shares subject to the option being exercised
(subject to such

 

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restrictions and guidelines as the Board may adopt from time to time)
valued at fair market value determined in accordance with the provisions of Section 2,
or (c) consistent with applicable law, through the delivery of an
assignment to the Company of a sufficient amount of the proceeds from the sale
of the Common Stock acquired upon exercise of the option and an authorization
to the broker or selling agent to pay that amount to the Company, which sale
shall be at the Optionee’s direction at the time of exercise.

 

6.             Restrictions on Exercise.  This
Option may not be exercised if the issuance of such Shares upon such exercise
or the method of payment of consideration for such Shares would constitute a
violation of any applicable federal or state securities or other law or
regulation, including any rule under Part 207 of Title 12 of the Code
of Federal Regulations (Regulation G) as promulgated by the Federal Reserve
Board, or if the conditions of Section 11 of the Plan are not
satisfied.  As a condition to the
exercise of this option, the Company may require Optionee to make any
representation and warranty to the Company as may be required by any applicable
law or regulation.

 

7.             Death or Disability of Optionee.  In the
event that an Optionee ceases to be a member of the Board by reason of his or
her death or permanent disability, any option granted to such Optionee shall be
immediately and automatically accelerated and become fully vested and all
unexercised options shall be exercisable by the Optionee (or by the Optionee’s
personal representative, heir or legatee, in the event of death) at any time
prior to the scheduled expiration date of the option.

 

8.             Termination of Status as Board Member. In the event any Optionee:  (i) ceases to be a member of the Board
of Directors at the request of the Company; (ii) is removed without cause;
or (iii) otherwise does not stand for nomination or re-election as a
Director of the Company at the request of the Company, then any unexercised
portion of this Option, to the extent not vested at the date of the applicable
event, shall immediately terminate and become void, and to the extent any such
unexercised portion of this Option is vested at such date, it shall continue to
be exercisable for a period of one year from the date of the applicable event; provided,
however, that no portion of this Option, vested or unvested, may be
exercised if the Optionee is removed from the Board of Directors for any one of
the following reasons:  (i) disloyalty,
gross negligence, dishonesty or breach of fiduciary duty to the Company; (ii) the
commission of an act of embezzlement, fraud or deliberate disregard of the rules or
policies of the Company which results in loss, damage or injury to the Company,
whether directly or indirectly; (iii) the unauthorized disclosure of any
trade secret or confidential information of the Company; (iv) the
commission of an act which constitutes unfair competition with the Company or
which induces any customer of the Company to breach a contract with the
Company; or (v) engages in any conduct or activity on behalf of any
organization or entity which is a competitor of the Company (unless such
conduct or activity is approved by a majority of the members of the Board of
Directors).

 

9.             Non-Transferability of Option.  This
Option may not be transferred in any manner other than by will or by the laws
of descent or distribution and may be exercised during the lifetime of Optionee
only by Optionee.  The terms of this
Option shall be binding upon the executors, administrators, heirs, successors
and assigns of Optionee.

 

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10.           Term of Option.  Notwithstanding Section 9 of
the Plan, this Option may not be exercised more than ten years from the date of
grant of this Option, and may be exercised during such term only in accordance
with the Plan and the terms of this Option.

 

11.           Withholding of Income Taxes.  Upon the
exercise of this Option, the Company, in accordance with Section 3402(a) of
the Internal Revenue Code, as amended, may require the Optionee to pay
withholding taxes in respect of amounts considered to be compensation
includible in the Optionee’s gross income.

 

12.           Tax Consequences.  The Optionee understands that any
of the foregoing references to taxation are based on federal income tax laws
and regulations now in effect.  The
Optionee has reviewed with the Optionee’s own tax advisors the federal, state,
local and foreign tax consequences of the transactions contemplated by this
Agreement.  The Optionee is relying
solely on such advisors and not on any statements or representations of the
Company or any of its agents.  The
Optionee understands that the Optionee (and not the Company) shall be
responsible for the Optionee’s own tax liability that may arise as a result of
the transactions contemplated by this Agreement.

 

13.           Governing Law.  The validity and construction of
this Stock Option Agreement shall be governed by the laws of the State of
Delaware, without giving effect to the principles of conflicts of law thereof.

 

DATE OF GRANT:  September 22, 2005

 

	
   

  	
  CollaGenex
  Pharmaceuticals, Inc.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Andrew K. Powell

  	
   

  
	
   

  	
   

  	
  Name:  Andrew K. Powell

  
	
   

  	
   

  	
  Title:  Secretary

  
					

 

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OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF
SHARES PURSUANT TO SECTION 3 HEREOF IS EARNED ONLY BY CONTINUING SERVICE
AS A MEMBER OF THE BOARD OF DIRECTORS OF THE COMPANY (NOT THROUGH THE ACT OF
BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER).  OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT
THIS OPTION, THE COMPANY’S PLAN WHICH IS INCORPORATED HEREIN BY REFERENCE, THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH
HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT
AS A MEMBER OF THE BOARD OF DIRECTORS OF THE COMPANY FOR THE VESTING PERIOD,
FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH OPTIONEE’S RIGHT OR THE
COMPANY’S RIGHT TO TERMINATE THE OPTIONEE’S MEMBERSHIP ON THE BOARD OF
DIRECTORS AT ANY TIME, WITH OR WITHOUT CAUSE.

 

Optionee acknowledges receipt of a copy of the Plan, a
copy of which is annexed hereto, represents that Optionee is familiar with the
terms and provisions thereof, and hereby accepts this Option subject to all of
the terms and provisions thereof. 
Optionee has reviewed the Plan and this Option in their entirety, has
had an opportunity to obtain the advice of counsel prior to executing this
Option and fully understands all provisions of the Option.  Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Board or of the
Committee upon any questions arising under the Plan.  Optionee further agrees to notify the Company
upon any change in the residence address indicated below.

 

	
  Dated:

  	
   September 22, 2005

  	
   

  
	
   

  	
  Signature:

  	
  /s/ George M. Lasezkay

  	
   

  
	
   

  	
  Name:

  	
  George M.
  Lasezkay

  
	
   

  	
  Residence
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
  Social Security
  No.:

  	
   

  
							

 

6

 

EXHIBIT A

 

NOTICE OF EXERCISE OF
STOCK OPTION

 

TO:

 

FROM:

 

DATE:

 

	
  RE:

  	
   

  	
  Exercise of
  Stock Option

  

 

I hereby exercise my option to purchase           
Shares of Common Stock at $          
per Share (total exercise price of $               ),
effective today’s date.  This notice is
given in accordance with the terms of my Stock Option Agreement dated                  ,
20             .  The option price and vested amount is in
accordance with Sections 2 and 3 of the Stock Option Agreement.

 

Attached is a check payable to CollaGenex
Pharmaceuticals, Inc. for the total exercise price of the Shares being purchased.  The
undersigned confirms the representations made in Section 4 of the Stock
Option Agreement.

 

Please prepare the stock certificate in the following
name(s):

 

 

 

If the stock is to be registered in a name other than
your name, please so advise the Company. 
The Stock Option Agreement requires the Company’s approval for
registration in a name other than your name and requires certain agreements
from any joint owner.

 

	
   

  	
  Sincerely,

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Signature)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Print or Type Name)

  	
   

  
	
   

  	
   

  	
   

  
	
  Letter and consideration

  	
   

  	
   

  
	
  received on                  ,
  20           .

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
					

 

 

A-1Exhibit
10.04

 

Certificate
of the Secretary of Isonics Corporation

 

The Board of Directors of Isonics
Corporation (“Isonics” or the “Company”) engaged in the discussion set forth
below, and adopted the resolutions set forth below, on January 30, 2000,
which resolutions constitute the 1998 Directors’ Plan.

 

In discussion, the board described the
plan as reflecting “the intention of the Board of Directors that each person
serving as a member of the Board who is not an employee of the Company receive
options to purchase 20,000 shares of the Company’s common stock when such
person accepts his position as a director, and receives an additional option to
purchase 10,000 shares when such person is re-elected as a director provided
such person is not an employee of the Company at such time.  The exercise price for the options is
intended to be Fair Market Value (as defined in the Executives’ Plan) on the
date that such person becomes a director, and such options are intended to be
exercisable for five years from such date. 
Such options would vest immediately, but would terminate prior to the
expiration of their term if a director resigns from or is not reelected to the
Board.  In such event, the director would
have three months to exercise the options or the options would terminate.”  The Board discussion referred to this as the “Directors’
Plan.”

 

The
option exercise price under the Directors’ Plan is to be determined by
reference to the 1996 Executives Incentive Plan.  In the 1996 Executives Incentive Plan, the
term “Fair Market Value” means, as of any date, the value of a share of Isonics
Common Stock determined as follows:

 

(a) 
if such Common Stock is then quoted on the Nasdaq
National Market, its closing price on the Nasdaq National Market on the date of
determination as reported in The Wall Street Journal;

 

(b) 
if such Common Stock is publicly traded and is then listed on a national
securities exchange, its closing price on the date of determination on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading as reported in The Wall Street Journal;

 

(c) 
if such Common Stock is publicly traded but is not quoted on the Nasdaq
National Market nor listed or admitted to trading on a national securities
exchange, the average of the closing bid and asked prices on the date of
determination as reported in The Wall Street Journal;

 

(d) 
in the case of an Award made on the Effective Date, the price per share at
which shares of the Company’s Common Stock are initially offered for sale to
the public by the Company’s underwriters in the initial public offering of the
Company’s Common Stock pursuant to a registration statement filed with the SEC

 

1

 

under
the Securities Act; or

 

(d)         if none
of the foregoing is applicable, by the Committee in good faith.

 

The
Board approved the following resolutions unanimously:

 

RESOLVED, that the Directors’ Plan as
described above be and hereby is approved, ratified, and confirmed; and further

 

RESOLVED,
that when options granted pursuant to the Directors’ Plan are exercised in
accordance therewith, the shares issued will be legally and validly issued,
fully-paid, and non-assessable.

 

The Directors’ Plan has
been described in proxy statements issued by Isonics Corporation since (and
including) the proxy statement on Schedule 14A for the annual meeting of
shareholders held on April 26, 2000, filed with the Securities and
Exchange Commission on March 16, 2000.

 

 

	
  September 26, 2005

  	
   

  	
  /s/ John Sakys,
  Secretary

  	
   

  
	
   

  	
   

  	
  John Sakys, Secretary

  
	
   

  	
   

  	
  Isonics Corporation

  

 

2

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