Exhibit 10.2
NON-QUALIFIED STOCK OPTION
AWARD
OF HEALTH DISCOVERY
CORPORATION
THIS
NON-QUALIFIED STOCK OPTION AWARD (the “Award”) is made
as of the Grant Date by HEALTH DISCOVERY CORPORATION, a corporation
organized under the laws of the State of Georgia (the
“Company”) to R. Scott Tobin (the
“Optionee”).
Upon and subject to the Terms and Conditions
attached hereto and incorporated herein by reference, the Company
hereby awards as of the Grant Date to Optionee a non-qualified
stock option (the “Option”), as described below, to
purchase the Option Shares. Capitalized terms used but not defined
herein have the meanings ascribed to them in the Terms and
Conditions.
|
|
|
Grant
Date: April 29, 2009.
|
|
|
|
|
|
|
|
Type of
Option: Non-Qualified Stock Option.
|
|
|
|
|
|
|
|
Plan under
which Option is granted: This Award is not granted under
or pursuant to any plan.
|
|
|
|
|
|
|
|
Option
Shares: All or any part of 4,500,000 shares of the
Company’s common stock (the “Common Stock”),
subject to adjustment as provided in the attached Terms and
Conditions.
|
|
|
|
|
|
|
|
Exercise
Price: $0.08 per share, subject to adjustment as
provided in the attached Terms and Conditions. The
Exercise Price is, in the judgment of the Board of Directors, not
less than 100% of the Fair Market Value of a share of Common Stock
on the Grant Date.
|
|
|
|
|
|
|
|
Option Period:
The Option may be exercised only during the Option Period which
commences on the Grant Date and ends on the earliest of
(a) the tenth (10th) anniversary of the Grant Date;
(b) three (3) months following the date of the
Optionee’s termination of employment with the Company and all
Affiliates for any reason other than by the Company for Cause; or
(c) the date of the Optionee’s termination of employment
with the Company or an Affiliate for Cause; provided, however, that
the Option may be exercised as to no more than the vested Option
Shares determined pursuant to the Vesting Schedule.
Note that other restrictions to exercising the Option, as
described in the attached Terms and Conditions, may apply
.
|
|
|
|
|
|
|
|
Vesting
Schedule: The Shares shall become vested in accordance
with Schedule 1.
|
IN WITNESS
WHEREOF, the parties have executed and sealed this Award as of the
Grant Date set forth above.
|
|
|
|
HEALTH
DISCOVERY CORPORATION
|
|
|
|
|
|
|
|
|
|
|
/s/ R. Scott
Tobin
|
|
|
/s/ Stephen D.
Barnhill
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TERMS AND CONDITIONS TO
THE
NON-QUALIFIED STOCK OPTION
AWARD
OF HEALTH DISCOVERY
CORPORATION
1.
Exercise of Option . Subject to the provisions
provided herein or in the Award:
(a) The
Option may be exercised with respect to all or any portion of the
vested Option Shares at any time during the Option Period by the
delivery to the Company, at its principal place of business, of (i)
a written notice of exercise in substantially the form attached
hereto as Exhibit 1 , which shall be actually delivered to
the Company no earlier than thirty (30) days and no later than ten
(10) days prior to the date upon which Optionee desires to exercise
all or any portion of the Option; (ii) payment to the Company of
the Exercise Price multiplied by the number of shares being
purchased (the “Purchase Price”) in the manner provided
in Subsection (b); and (iii) satisfaction of the withholding tax
obligations as provided in Section 2, if applicable; provided,
however, that in the event the Optionee is given notice of
termination for Cause under any employment or other agreement
between the Optionee and the Company or any Affiliate or otherwise,
the Optionee’s ability to exercise the Option shall be
suspended from the giving of such notice until such time as the
Optionee cures the circumstance(s) constituting Cause, if expressly
permitted by the applicable employment or other agreement or
otherwise, or, if there is no opportunity to cure or no cure is
timely effected, from and after the giving of such notice through
and including the effective date that the Optionee’s
employment or other service relationship is terminated for
Cause.
(b) The
Purchase Price shall be paid in full upon the exercise of an Option
and no Option Shares shall be issued or delivered until full
payment therefor has been made. Payment of the Purchase Price for
all Option Shares purchased pursuant to the exercise of an Option
shall be made:
(i) by
tendering cash or certified check in an amount equal to the
Purchase Price;
(ii) by
the delivery to the Company of a number of shares of Common Stock
owned by the Optionee prior to the date of the Option’s
exercise, having a Fair Market Value on the date of exercise either
equal to the Purchase Price;
(iii) if
and when the Common Stock becomes traded by brokers, whether on a
national securities exchange or otherwise, by delivery of the
Purchase Price in cash from a broker, dealer or other
“creditor” as defined by Regulation T issued by the
Board of Governors of the Federal Reserve System following delivery
by the Optionee to the Company of instructions in a form acceptable
to the Company regarding delivery to such broker, dealer or other
creditor of that number of Option Shares with respect to which the
Option is exercised;
(iv) by
having the number of shares of Common Stock to be issued upon
exercise of the Option reduced by the number of whole shares of
Common Stock having a Fair Market Value equal to the Purchase
Price; or
(v) in
any combination of the foregoing.
Upon acceptance
of such notice and receipt of payment in full of the Purchase Price
and, if applicable, all required tax withholdings, the Company
shall cause to be issued a certificate representing the Option
Shares purchased.
2.
Withholding . To the extent necessary, the
Optionee must satisfy his federal, state, and local, if any,
withholding taxes imposed by reason of the exercise of the Option
either by paying to the Company the full amount of the withholding
obligation in cash; by electing, irrevocably and in writing in
substantially the form attached hereto as Exhibit 2 (a
“Withholding Election”), to have the actual number of
shares of Common Stock issuable upon exercise reduced by the
smallest number of whole shares of Common Stock which, when
multiplied by the Fair Market Value of the Common Stock as of the
date the Option is exercised, is sufficient to satisfy the amount
of the withholding tax; or by any combination of the
above. The Optionee may make a Withholding Election only
if the following conditions are met:
(a) the
Withholding Election is made on or prior to the date on which the
amount of tax required to be withheld is determined by executing
and delivering to the Company a properly completed Withholding
Election; and
(b) any
Withholding Election made will be irrevocable; however, the Board
of Directors may, in its sole discretion, disapprove and give no
effect to any Withholding Election.
3.
Rights as Shareholder . Until the stock
certificates reflecting the Option Shares accruing to the Optionee
upon exercise of the Option are issued to the Optionee, the
Optionee shall have no rights as a shareholder with respect to such
Option Shares. The Company shall make no adjustment for
any dividends or distributions or other rights on or with
respect to Option Shares for which the record date is prior to the
issuance of that stock certificate, except as this Award otherwise
provides.
4.
Restriction on Transfer of Option and Option Shares
.
(a) The
Option evidenced hereby is nontransferable other than pursuant to
Section 4(b) below and by will or the laws of descent and
distribution. The Option shall be exercisable during the
lifetime of the Optionee or the Permitted Transferee (as defined
below in Section 4(b)), if applicable, only by the Optionee or such
Permitted Transferee, if applicable (or in the event of the his
Disability, if applicable, by his personal representative) and
after his death, only by his legatee or the executor of his
estate. In the event the Permitted Transferee is an
entity, the Option shall be exercisable during the Option Period
only by an authorized representative of the Permitted Transferee,
such as the grantor or trustee of a trust or the general partner of
a family partnership, as applicable.
(b) The
Optionee may transfer the Option to one or more members of his
immediate family, provided any such family member has attained age
21 on or before the intended date of transfer, to a trust
established solely for the benefit of the Optionee’s
immediate family, or to a partnership, provided the only partners
in the partnership on the intended date of transfer are members of
the Optionee’s immediate family (a “Permitted
Transferee”). Solely in accordance with the
following, for purposes of this Section 4(b), the term
“immediate family” means only individuals with one of
the following relationships to the Optionee: spouse, children,
stepchildren, grandchildren, parents, stepparents, grandparents,
siblings, nieces, nephews and in-laws.
(c) In
the event the Option is transferred by the Optionee to a
Permissible Transferee, the Permissible Transferee shall be
prohibited from making any subsequent transfer other than, to the
extent applicable, by will or the laws of descent and
distribution.
(d) Notwithstanding
the foregoing, the Company shall not be obligated to give effect to
any transfer of the Option to a Permitted Transferee unless the
Optionee has provided the Company with advance written notice of
the transfer.
5.
Changes in Capitalization .
(a) The
number of Option Shares and the Exercise Price shall be
proportionately adjusted for nonreciprocal transactions between the
Company and the holders of capital stock of the Company that cause
the per share value of the shares of Common Stock underlying the
Option to change, such as a stock dividend, stock split, spinoff,
rights offering, or recapitalization through a large, nonrecurring
cash dividend (each, an “Equity
Restructuring”).
(b) In the event
of a merger, consolidation, extraordinary dividend, sale of
substantially all of the Company’s assets or other material
change in the capital structure of the Company, or a tender offer
for shares of Common Stock that in each case is not an Equity
Restructuring, the Board of Directors or its designee shall take
such action to make such adjustments in the Option or the terms of
this Award as the Board of Directors or its designee, in its sole
discretion, determines in good faith is necessary or appropriate,
including, without limitation, adjusting the number and class of
securities subject to the Option, with a corresponding adjustment
in the Exercise Price, substituting a new option to replace the
Option, accelerating the termination of the Option Period or
terminating the Option in consideration of a cash payment to the
Optionee in an amount equal to the excess of the then Fair Market
Value of the Option Shares over the aggregate Exercise Price of the
Option Shares. Any determination made by the Board of Directors or
its designee pursuant to this Section 5(b) will be final and
binding on the Optionee. Any action taken by the Board
of Directors or its designee need not treat all optionees
equally.
(c) The
existence of the Option granted pursuant to this Award shall not
affect in any way the right or power of the Company to make or
authorize any adjustment, reclassification, reorganization or other
change in its capital or business structure, any merger or
consolidation of the Company, any issue of debt or equity
securities having preferences or priorities as to the Common Stock
or the rights thereof, the dissolution or liquidation of the
Company, any sale or transfer of all or any part of its business or
assets, or any other corporate act or proceeding. Any adjustment
pursuant to this Section may provide, in the Board of
Directors’ discretion, for the elimination without payment
therefor of any fractional shares that might otherwise become
subject to any Option.
6.
Special Limitation on Exercise . No purported
exercise of the Option shall be effective without the approval of
the Board of Directors, which may be withheld to the extent that
the exercise, either individually or in the aggregate together with
the exercise of other previously exercised stock options and/or
offers and sales pursuant to any prior or contemplated offering of
securities, would, in the sole and absolute judgment of the Board
of Directors, require the filing of a registration statement with
the United States Securities and Exchange Commission or with the
securities commission of any state. If a registration
statement is not in effect under the Securities Act of 1933 or any
applicable state securities law with respect to shares of Common
Stock purchasable or otherwise deliverable under the Option, the
Optionee (a) shall deliver to the Company, prior to the exercise of
the Option or as a condition to the delivery of Common Stock
pursuant to the exercise of an Option, such information,
representations and warranties as the Company may reasonably
request in order for the Company to be able to satisfy itself that
the Option Shares are being acquired in accordance with the terms
of an applicable exemption from the securities registration
requirements of applicable federal and state securities laws and
(b) shall agree that the shares of Common Stock so acquired will
not be disposed of except pursuant to an effective registration
statement, unless the Company shall have received an opinion of
counsel that such disposition is exempt from such requirement under
the Securities Act of 1933 and any applicable state securities
law.
7.
Legend on Stock Certificates . Certificates evidencing
the Option Shares, to the extent appropriate at the time, shall
have noted conspicuously on the certificates a legend intended to
give all persons full notic
|
