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Exhibit
10.2
STOCK OPTION
AGREEMENT
(Non-Qualified Stock
Option)
THIS STOCK OPTION AGREEMENT (this
“Agreement”) is made effective as of July 29, 2005 (the
“Effective Date”), by and between Celsion Corporation,
a Delaware corporation (the “Company”) and Lawrence
Olanoff, M.D., Ph.D. (the “Optionee”).
WITNESSETH:
WHEREAS, the Company and the Optionee
are parties to that certain Employment Agreement, effective as of
July 29, 2005 (the “Employment Agreement”);
WHEREAS, pursuant to Section 3(c) of the
Employment Agreement, the Company has agreed to issue an option
(the “Inducement Option”) to purchase Six Million, Four
Hundred Forty Thousand (6,440,000) shares (the
“Shares”) of the common stock, par value $0.01 per
share, of the Company (the “Common Stock”), subject to
the terms and conditions of the Employment Agreement;
and
WHEREAS, as contemplated by such Section
3(c), the Company and the Employee desire to evidence the terms and
conditions relating to the grant of the Inducement
Option;
NOW, THEREFORE, in consideration of the
foregoing and other good and valuable consideration the receipt and
sufficiency of which is acknowledged by each of the parties hereto,
such parties, intending legally to be bound, hereby agree as
follows:
1. Defined Terms . When used in
this Agreement, the following capitalized terms have the respective
meanings set forth in this Section 1:
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(a) |
“Administrator” means the Company’s Board of
Directors or the Compensation Committee of the Company’s
Board of Directors if the Board of Directors has delegated to the
Compensation Committee as such, or a subcommittee of the
Compensation Committee if so designated. |
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(b) |
“Agreement” has the meaning ascribed thereto in the
Introductory Paragraph of this Agreement. |
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(c) |
“Applicable Laws” means the statutes, laws,
ordinances, including the rules and regulations promulgated
thereunder, governing the administration of stock options under
U.S. state corporate laws, U.S. federal and state securities laws,
the Code and any U.S. stock exchange, market or quotation system on
which the Common Stock is listed or quoted. |
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(d) |
“Cause” has the meaning ascribed thereto in the
Employment Agreement. |
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(e) |
“Change in Control” has the meaning ascribed
thereto in the Employment Agreement. |
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(f) |
“Code” means the Internal Revenue Code of 1986, as
amended, or any successor thereto, including the rules and
regulations promulgated thereunder as in effect from time to
time. |
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(g) |
“Common Stock” has the meaning ascribed thereto in
the Recitals to this Agreement |
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(h) |
“Company” has the meaning ascribed thereto in the
Introductory Paragraph of this Agreement. |
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(f) |
“Disability” has the meaning ascribed thereto in
the Employment Agreement. |
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(g) |
“Effective Date” has the meaning ascribed thereto
in the Introductory Paragraph to this Agreement. |
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(h) |
“Employment Agreement” has the meaning ascribed
thereto in the Recitals to this Agreement. |
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(i) |
“Fair Market Value” means, on a given day, the
closing sale price for the Common Stock as reported on the
principal securities exchange, market or quotation system on which
the Common Stock may be listed or quoted on such date or, if no
such sale occurred on that date, then for the next preceding date
on which a sale was made. If the Common Stock should not be listed
or quoted on a securities exchange, market or quotation system,
Fair Market Value shall be determined in good faith by the Board of
Directors of the Company. |
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(j) |
“Inducement Option” has the meaning ascribed
thereto in the Recitals to this Agreement. |
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(k) |
“Installment” has the meaning ascribed thereto in
Section 3(b) of this Agreement. |
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(l) |
“Optionee” has the meaning ascribed thereto in the
Introductory Paragraph of this Agreement. |
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(m) |
“Option Price” has the meaning ascribed thereto in
Section 3(a) of this Agreement. |
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(n) |
“Option Term” has the meaning ascribed thereto in
Section 3(b) of this Agreement. |
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(o) |
“Shares” has the meaning ascribed thereto in the
Recitals to this Agreement. |
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(p) |
“Vested Portion” has the meaning ascribed thereto
in Section 3(b) of this Agreement. |
2. Grant and Nature . Subject to
the terms and conditions hereof and of the Employment Agreement
including, without limitation, adjustment pursuant to Section 4 of
this Agreement, the Company hereby grants to the Optionee the
Inducement Option to purchase the Shares, consisting of Six Million
Four Hundred Forty Thousand (6,440,000) shares of Common Stock. The
Inducement Option is intended to be a nonqualified stock option,
and is not intended to qualify as an incentive stock option under
Section 422 of the Code.
3. Terms and
Conditions.
(a) Option Price . The
purchase price (the “Option Price”) to be paid by the
Optionee to the Company upon the exercise of the Inducement Option
shall be the closing price of the Common Stock on the American
Stock Exchange on the Effective Date, subject to adjustment as
provided in Section 4 of this Agreement.
(b) Vesting
.
(i) The Inducement Option
shall vest and become exercisable in four (4) equal installments of
the Inducement Option to purchase 1,610,000 Shares on the first,
second,
2
third and fourth anniversaries of the
Effective Date (each, an “Installment”) subject to
accelerated vesting and forfeiture as otherwise provided herein,
provided that, if the Optionee’s employment is
terminated by the Company prior to the first anniversary of the
Effective Date other than pursuant to Section 6 of the Employment
Agreement (death, Disability or termination for
“Cause”), the first installment of Inducement Option
shall vest on the date of such termination and the remainder of the
Inducement Option shall not vest and shall be forfeited and
further provided that, if the Optionee is not employed by
the Company on the second, third or fourth anniversary of the
Effective Date, the installments vesting on and after any such
anniversary shall not vest and the Inducement Option included
therein shall be forfeited. The portion of the Inducement Option
which has become vested and exercisable pursuant to this Section 3
is hereinafter referred to as the “Vested Portion.” The
Inducement Option shall be exercisable, once vested, for a period
ending on the tenth anniversary of the Effective Date (the
“Option Term”), subject to earlier termination as
provided herein.
(ii) In the event of the
death of the Optionee, any portion of the Inducement Option that is
vested and fully exercisable at the time of death shall remain
fully exercisable, by the Optionee’s legal representatives,
for a period of one hundred eighty (180) days from the date of
death, at which time any Vested Portion of the Inducement Option
not exercised automatically shall be forfeited. Any portion of the
Inducement Option that has not vested prior to the date of death
shall be forfeited.
(iii) In the event of the
physical or mental Disability of the Optionee, as defined in the
Employment Agreement, any portion of the Inducement Option that is
vested and fully exercisable at the time of Disability shall remain
fully exercisable, by the Optionee or his legal representatives,
should he have such, for a period of one hundred eighty (180) days
from the date of Disability, at which time any Vested Portion of
the Inducement Option not exercised automatically shall be
forfeited. Any portion of the Inducement Option that has not vested
prior to the date of Disability shall be forfeited.
(iv) In the event that the
Optionee’s employment with the Company is terminated for
“Cause” as defined in the Employment Agreement, or that
the Optionee voluntarily terminates his employment other than
pursuant to Section 7 or Section 8 of the Employment Agreement,
except as otherwise provided in subsection (i) of this Section
3(b), any portion of the Inducement Option that is vested and fully
exercisable at the time of such termination may be exercised by the
Optionee for a period of ninety (90) days after the date of
termination, at which time any Vested Portion of the Inducement
Option not exercised automatically shall be forfeited. Any portion
of the Inducement Option that has not vested prior to the date of
termination shall be forfeited.
(v) In the event that the
Optionee’s employment with the Company is terminated by the
Company other than pursuant to Section 6 of the Employment
Agreement (death, Disability, or “Cause”) or is
terminated by the Optionee pursuant to Section 7 of the Employment
Agreement (for a material breach by the Company), and such
termination does not occur within two (2) years following a Change
in Control, any portion of the Inducement Option that is vested and
fully exercisable at the time of termination shall remain fully
exercisable for a period of one hundred eighty (180) days
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