Exhibit 10.1
NONSTATUTORY STOCK OPTION
AGREEMENT
THIS NONSTATUTORY STOCK OPTION AGREEMENT
(“Agreement”) is made and entered into as of the date
set forth below, by and between HepaLife Technologies, Inc., a
Florida corporation (the “Company”), and the following
Director of the Company (“Optionee”):
In consideration of the covenants herein set
forth, the parties hereto agree as follows:
(a) Optionee is a director of the
Company.
(b) The Board of Directors (the
“Board” which term shall include an authorized
committee of the Board of Directors) and shareholders of the
Company have heretofore adopted a 2001 Incentive Stock Plan (the
“Plan”), pursuant to which this Option is being
granted; and
(c) The Board has authorized the
granting to Optionee of a nonstatutory stock option
(“Option”) to purchase shares of common stock of the
Company (“Stock”) upon the terms and conditions
hereinafter stated and pursuant to an exemption from registration
under the Securities Act of 1933, as amended (the “Securities
Act”) provided by Rule 701 thereunder.
3. Shares; Price.
The Company hereby grants to Optionee the right to
purchase, upon and subject to the terms and conditions herein
stated, the number of shares of Stock set forth in Section 1(c)
above (the “Shares”) for cash (or other consideration
as is authorized under the Plan and acceptable to the Board, in
their sole and absolute discretion) at the price per Share set
forth in Section 1(d) above (the “Exercise Price”),
such price being not less than [e.g., 85%] of the fair market value
per share of the Shares covered by this Option as of the date
hereof.
4. Term of Option; Continuation
of Service. This Option shall expire, and all
rights hereunder to purchase the Shares shall terminate 10 years
from the date hereof. Nothing contained herein shall be construed
to interfere in any way with the right of the Company or its
shareholders to remove or not elect Optionee as a Director of the
Company, or to increase or decrease the compensation of Directors
from the rate in effect at the date hereof.
5. Vesting of Option.
Subject to the provisions of Sections 7 and 8 hereof,
this Option shall become exercisable during the term that Optionee
serves as a Director of the Company in five (5) equal annual
installments of twenty percent (20%) of the Shares covered by this
Option, the first installment to be exercisable on the first
anniversary of the date of this Option, with an additional twenty
percent (20%) of such Shares becoming exercisable on each of the
four (4) successive anniversary dates. The installments shall be
cumulative (i.e., this option may be exercised, as to any or all
shares covered by an installment, at any time or times after an
installment becomes exercisable and until expiration or termination
of this Option).
6. Exercise. This
Option shall be exercised by delivery to the Company of (a) written
notice of exercise stating the number of Shares being purchased (in
whole shares only) and such other information set forth on the form
of Notice of Exercise attached hereto as Appendix A, (b) a check or
cash in the amount of the Exercise Price of the Shares covered by
the notice (or such other consideration as has been approved by the
Board of Directors consistent with the Plan) and (c) a written
investment representation as provided for in Section 13 hereof.
This Option shall not be assignable or transferable, except by will
or by the laws of descent and distribution, and shall be
exercisable only by Optionee during his or her lifetime.
7. Termination of Service.
If Optionee shall cease to serve as a Director of the
Company for any reason, no further installments shall vest pursuant
to Section 5, and the maximum number of Shares that Optionee may
purchase pursuant hereto shall be limited to the number of Shares
that were vested as of the date Optionee ceases to be a Director
(to the nearest whole Share). Thereupon, Optionee shall have the
right to exercise this Option, at any time during the remaining
term hereof, to the extent, but only to the extent, that this
Option was exercisable as of the date Optionee ceases to be a
Director; provided, however, if Optionee is removed as a Director
pursuant to the Florida corporation law, the foregoing right to
exercise shall automatically terminate on the date Optionee ceases
to be a Director as to all Shares covered by this Option not
exercised prior to termination. Unless earlier terminated, all
rights under this Option shall terminate in any event on the
expiration date of this Option as defined in Section 4
hereof.
8. Death of Optionee.
If the Optionee shall die while a Director of the
Company, Optionee’s personal representative or the person
entitled to Optionee’s rights hereunder may at any time
within six (6) months after the date of Optionee’s death, or
during the remaining term of this Option, whichever is the lesser,
exercise this Option and purchase Shares to the extent, but only to
the extent, that Optionee could have exercised this Option as of
the date of Optionee’s death; provided, in any case, that
this Option may be so exercised only to the extent that this Option
has not previously been exercised by Optionee.
9. No Rights as Shareholder.
Optionee shall have no rights as a shareholder with
respect to the Shares covered by any installment of this Option
until the effective date of issuance of the Shares following
exercise of this Option, and no adjustment will be made for
dividends or other rights for which the record date is prior to the
date such stock certificate or certificates are issued except as
provided in Section 7 hereof.
10. Recapitalization.
Subject to any required action by the shareholders of
the Company, the number of Shares covered by this Option, and the
Exercise Price thereof, shall be proportionately adjusted for any
increase or decrease in the number of issued shares resulting from
a subdivision or consolidation of shares or the payment of a stock
dividend, or any other increase or decrease in the number of such
shares effected without receipt of consideration by the Company;
provided however that the conversion of any convertible securities
of the Company shall not be deemed having been “effected
without receipt of consideration by the Company”.
In the event of a proposed dissolution or
liquidation of the Company, a merger or consolidation in which the
Company is not the surviving entity, or a sale of all or
substantially all of the assets or capital stock of the Company
(collectively, a “Reorganization”), this Option shall
terminate immediately prior to the consummation of such proposed
action, unless otherwise provided by the Board; provided, however,
if Optionee shall be a Director at the time such Reorganization is
approved by the stockholders, Optionee shall have the right to
exercise this Option as to all or any part of the Shares, without
regard to the installment provisions of Section 5, for a period
beginning 30 days prior to the consummation of such Reorganization
and ending as of the Reorganization or the expiration of this
Option, whichever is earlier, subject to the consummation of the
Reorganization. In any event, the Company shall notify Optionee, at
least 30 days prior to the consummation of such Reorganization, of
his exercise rights, if any, and that the Option shall terminate
upon the consummation of the Reorganization.
Subject to any required action by the
shareholders of the Company, if the Company shall be the surviving
entity in any merger or consolidation, this Option thereafter shall
pertain to and apply to the securities to which a holder of Shares
equal to the Shares subject to this Option would have been entitled
by reason of such merger or consolidation, and the installment
provisions of Section 5 shall continue to apply.
In the event of a change in the shares of the
Company as presently constituted, which is limited to a change of
all of its authorized Stock without par value into the same number
of shares of Stock with a par value, the shares resulting from any
such change shall be deemed to be the Shares within the meaning of
this Option.
To the extent that the foregoing adjustments
relate to shares or securities of the Company, such adjustments
shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. Except as hereinbefore
expressly provided, Optionee shall have no rights by reason of any
subdivision or consolidation of shares of Stock of any class or the
payment of any stock dividend or any other increase or decrease in
the number of shares of stock of any class,
