Exhibit 10.7
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THE SECURITIES REPRESENTED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED
WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN
OPINION OF COUNSEL, SATISFACTORY TO THE CORPORATION AND ITS
COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.
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BioDrain Medical, Inc.
DIRECTOR STOCK OPTION AGREEMENT
(Non-Statutory)
This
Director Stock Option Agreement is made and entered as of the 22nd
day of August, 2006 (the Agreement Date”) by and between
BioDrain Medical, Inc., a Minnesota corporation
(“Company”) and Board of Directors member Thomas J.
McGoldrick (the “ Optionee ”) as consideration
for Board membership.
1. Stock Option
Grant.
(a)
Annual Grant. In accordance with the Director Stock Option
Agreement entered as of August 22, 2005 and for the preceding year
ending August 21, 2006 of, Optionee’s Board membership,
Optionee is hereby granted 10,000 Option Shares subject to the
terms set forth below.
2. Nonstatutory Option.
The Option is granted to purchase up to the number of shares of
authorized but unissued common stock of the Company specified in
Section 1 (the “Shares”). The Option will expire, and
all rights to exercise it will terminate on the earliest of: (a)
the date provided below in Sections 8 and 9, and (b) the Expiration
Date. This Option is intended by the Company and the Optionee to be
a Non-Statutory Stock Option and does not qualify for any special
tax benefits to the Optionee.
3. Exercise Price. The
Exercise Price for each Option Share of the Company will be
$1.00.
4. Period of Exercise The
Options will expire at 5:00 p.m. on the fifth anniversary of this
Grant Date.
5. Vesting of Options.
Optionee will have the right to exercise the Stock Option in
accordance with the following schedule:
The
Shares subject to the Stock Option will vest in 90 days from the
Annual Grant Date for each succeeding year.
6. Transferability. The
Option is not transferable except by will or the laws of descent
and distribution and may be exercised during the lifetime of the
Optionee only by the Optionee, and if exercised following the
Optionee’s death, by the Optionee’s legal
representative upon presenting evidence of authority to act on
behalf of the Optionee’s estate acceptable to the
Company.
7. Change in Control. If
the Company enters into a binding agreement during the time that
Optionee is a Board member of the Company that results in a change
in control (as defined in the following sentence), then 100% of the
Shares will vest. For purposes of this Option Agreement,
“change in control” means that:
(1)
any individual, partnership, firm, corporation, association, trust,
unincorporated organization or other entity or person, or any
syndicate or group deemed to be a person under Section 14(d)(2) of
the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), is or becomes the “beneficial
owner” (as defined in Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), directly or indirectly, of
securities of the Corporation representing fifty percent (50%) or
more of the combined voting power of the Company’s then
outstanding securities entitled to vote in the election of
directors of the Company; or
(2)
there occurs a reorganization, merger, consolidation or other
corporate transaction involving the Company
(“Transaction”), in each case, with respect to which
the stockholders of the
1
Company immediately prior to such
Transaction do not, immediately after the Transaction, own more
than fifty percent (50%) of the combined voting power of the
Company or other corporation resulting from such Transaction;
or
(3)
all or substantially all of the assets of the Company are sold,
liquidated or distributed.
8. Termination of Services by
the Company. If at any time prior to August 22, 2008,
Optionee’s membership on the Board of Directors of the
Company is terminated by the Company without “Cause”,
then Optionee may exercise the Option as to one hundred percent
(100%) of the remaining 40,000 Shares of the Initial Grant which
are not otherwise vested on the date of the termination.
9. Option Lapse. The
Option will lapse and becomes unexercisable in full on the earliest
of the following events:
(a)
the first anniversary of the Optionee’s death, as provided
below in Section 10;
(b)
the date otherwise provided below in Section 10, unless the Board
of Directors otherwise extends such period before the applicable
expiration date.
10. Board Resignation. If
Optionee ceases to be a Board member for any reason other than that
described in this Section 10, Optionee will have the right, subject
to the other provisions of this Agreement, to exercise the Option
for the term of the Option but only to the extent that on the date
of termination the Optionee’s right to exercise such Option
had vested, and at the end of such period the Option will expire,
and all rights to exercise it will terminate.
(a)
If Optionee dies while a Board member, or after ceasing to be a
Board member but during the period while he could have exercised an
Option under the preceding sub-Sections, the Option granted to the
Optionee may be exercised, to the extent it has vested at the time
of death and subject to the Plan, at any time within twelve (12)
months after the Optionee’s death, by the executors or
administrators of his estate or by any person or persons who
acquire the Option by will or the laws of descent and distribution,
but not beyond the otherwise applicable term of the
Option.
11 . Adjustment in
C
