Exhibit 10.8
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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 11th
day of November, 2006 (the Agreement Date”) by and between
BioDrain Medical, Inc., a Minnesota corporation
(“Company”) and Board of Directors member Andrew P.
Reding (the “ Optionee ”) as consideration for
Board membership..
1. Stock Option
Grant.
(a)
Initial Grant. The Company hereby grants to the Optionee an
option (the “Option”) to purchase 30,000 shares
(“Option Shares”, with each being an “Option
Share”) of its $0.01 par value common stock
(“Share”), under the terms and conditions set forth
below.
(b)
Annual Grant. For each succeeding year of the
Optionee’s Board membership, and on the anniversary of this
Agreement (“Annual Grant Date”), Optionee will be
granted an additional 10,000 Option Shares subject to the same
terms as set forth below with the exception of the Exercise Price,
the Expiration Date and Vesting schedule identified in 3, 4 and
5.
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.
(a)
Initial Grant. The exercise price of each Option Share of
the Company for the Initial Grant as of any exercise date is $1.00
per Share.
(b)
Annual Grant. The Exercise Price for each Option Share of
the Company for each Annual Grant will be determined by the
prevailing price of the Company’s common stock at the time of
the Annual Grant.
4. Period of
Exercise.
(a)
Initial Grant. The Option for the Initial Grant will expire
at 5:00 p.m. on the fifth anniversary of the Agreement Date
(“the Expiration Date”).
(b)
Annual Grant. Annual Grant Options will expire at 5:00 p.m.
on the fifth anniversary of their respective Grant
Dates.
5. Vesting of Options.
Optionee will have the right to exercise the Stock Option in
accordance with the following schedule:
(a)
Initial Grant. 30,000 Shares
(i)
The Shares subject to the Stock Option will vest in three equal
increments of 10,000 Shares on the anniversary of the date of the
Grant.
1
(ii)
The right to exercise the Option will be cumulative. Optionee may
buy all, or from time to time any part, of the maximum number of
shares which are exercisable under the Option, but in no case may
Optionee exercise the Option with regard to a fraction of a share,
or for any share for which the Option is not
exercisable.
(b)
Annual Grant 10,000 Shares. 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 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 30,000 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
