Exhibit 10.39
INCENTIVE STOCK OPTION
__________________________, Optionee:
CoCensys, Inc. (the "Company"), pursuant to its 1996 Equity Incentive
Plan (the "Plan"), has granted to you, the optionee named above, an option to
purchase shares of the common stock of the Company ("Common Stock"). This
option is intended to qualify as an "incentive stock option" within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").
The grant hereunder is in connection with and in furtherance of the
Company's compensatory benefit plan for participation of the Company's
employees (including officers), directors or consultants. Defined terms not
explicitly defined in this agreement but defined in the Plan shall have the
same definitions as in the Plan.
The details of your option are as follows:
1. TOTAL NUMBER OF SHARES SUBJECT TO THIS OPTION. The total number of
shares of Common Stock subject to this option is ____________________
(______).
2. VESTING. Subject to the limitations contained herein, [25%] of the
shares will vest (become exercisable) on ____________, 19__ and the remaining
shares will vest in [thirty-six (36)] equal monthly installments thereafter
until either (i) you cease to provide services to the Company for any reason,
or (ii) this option becomes fully vested.
3. EXERCISE PRICE AND METHOD OF PAYMENT.
(A) EXERCISE PRICE. The exercise price of this option is
_________________ ($____) per share, being not less than the fair market value
of the Common Stock on the date of grant of this option.
(B) METHOD OF PAYMENT. Payment of the exercise price per share is
due in full upon exercise of all or any part of each installment which has
accrued to you. You may elect, to the extent permitted by applicable
statutes and regulations, to make payment of the exercise price under one of
the following alternatives:
(I) Payment of the exercise price per share in cash
(including check) at the time of exercise;
(II) Payment pursuant to a program developed under
Regulation T as promulgated by the Federal Reserve Board which, prior to the
issuance of Common Stock, results in either the receipt of cash (or check) by
the Company or the receipt of irrevocable instructions to pay the aggregate
exercise price to the Company from the sales proceeds;
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(III) Provided that at the time of exercise the Company's
Common Stock is publicly traded and quoted regularly in the Wall Street
Journal, payment by delivery of already-owned shares of Common Stock, held
for the period required to avoid a charge to the Company's reported earnings,
and owned free and clear of any liens, claims, encumbrances or security
interests, which Common Stock shall be valued at its fair market value on the
date of exercise; or
(IV) Payment by a combination of the methods of payment
permitted by subparagraph 3(b)(i) through 3(b)(iii) above.
4. WHOLE SHARES. This option may only be exercised for whole shares.
5. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the
contrary contained herein, this option may not be exercised unless the shares
issuable upon exercise of this option are then registered under the
Securities Act or, if such shares are not then so registered, the Company has
determined that such exercise and issuance would be exempt from the
registration requirements of the Securities Act.
6. TERM. The term of this option commences on ____________, 19__, the
date of grant, and expires on _________________ (the "Expiration Date"),
which date shall be no more than ten (10) years from date this option is
granted, unless this option expires sooner as set forth below or in the Plan.
In no event may this option be exercised on or after the Expiration Date.
This option shall terminate prior to the Expiration Date as follows: three
(3) months after the termination of your Continuous Status as an Employee,
Director or Consultant with the Company or an Affiliate of the Company unless
one of the following circumstances exists:
(A) Your termination of Continuous Status as an Employee, Director
or Consultant is due to your disability. This option will then expire on the
earlier of the Expiration Date set forth above or twelve (12) months
following such termination of Continuous Status as an Employee, Director or
Consultant. You should be aware that if your disability is not considered a
permanent and total disability within the meaning of Section 422(c)(6) of the
Code, and you exercise this option more than three (3) months following the
date of your termination of employment, your exercise will be treated for tax
purposes as the exercise of a "nonstatutory stock option" instead of an
"incentive stock option."
(B) Your termination of Continuous Status as an Employee, Director
or Consultant is due to your death or your death occurs within three (3)
months following your termination of Continuous Status as an Employee,
Director or Consultant for any other reason. This option will then expire on
the earlier of the Expiration Date set forth above or twelve (12) months
after your death.
(C) If during any part of such three (3)-month period you may not
exercise your option solely because of the condition set forth in paragraph 5
above, then your option will not expire until the earlier of the Expiration
Date set forth above or until this option shall have been exercisable for an
aggregate period of three (3) months after your termination of Continuous
Status as an Employee, Director or Consultant.
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(D) If your exercise of the option within three (3) months after
termination of your Continuous Status as an Employee, Director or Consultant
with the Company or with an Affiliate of the Company would result in
liability under Section 16(b) of the Securities Exchange Act of 1934, then
your option will expire on the earlier of (i) the Expiration Date set forth
above, (ii) the tenth (10th) day after the last date upon which exercise
would result in such liability or (iii) six (6) months and ten (10) days
after the termination of your Continuous Status as an Employee, Director or
Consultant with the Company or an Affiliate of the Company.
However, this option may be exercised following termination of
Continuous Status as an Employee, Director or Consultant only as to that
number of shares as to which it was exercisable on the date of termination of
Continuous Status as an Employee, Director or Consultant under the provisions
of paragraph 2 of this option.
In order to obtain the federal income tax advantages associated with an
"incentive stock option," the Code requires that at all times beginning on
the date of grant of the option and ending on the day three (3) months before
the date of the option's exercise, you must be an employee of the Company or
an Affiliate of the Company, except in the event of your death or permanent
and total disability. The Company has provided for continued vesting or
extended exercisability of your option under certain circumstances for your
benefit, but cannot guarantee that your option will necessarily be treated as
an "incentive stock option" if you provide services to the Company or an
Affiliate of the Company as a consultant or exercise your option more than
three (3) months after the date your employment with the Company and all
Affiliates of the Company terminates.
7. EXERCISE.
(A) This option may be exercised, to the extent specified above,
by delivering a notice of exercise (in a form designated by the Company)
together with the exercise price to the Secretary of the Company, or to such
other person as the Company may designate, during regular business hours,
together with such additional documents as the Company may then require
pursuant to subsection 12(e) of the Plan.
(B) By exercising this option you agree that:
(I) as a precondition to the completion of any exercise
of this option, the Company may require you to enter an arrangement providing
for the payment by you to the Company of any tax withholding obligation of
the Company arising by reason of (1) the exercise of this option; (2) the
lapse of any substantial risk of forfeiture to which the shares are subject
at the time of exercise; or (3) the disposition of shares acquired upon such
exercise; and
(II) you will notify the Company in writing within
fifteen (15) days after the date of any disposition of any of the shares of
the Common Stock issued upon exercise of this option that occurs within two
(2) years after the date of this option grant OR within one (1) year after
such shares of Common Stock are transferred upon exercise of this option.
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8. TRANSFERABILITY. This option is not transferable, except by will
or by the laws of descent and distribution, and is exercisable during your
life only by you. Notwithstanding the foregoing, by delivering written
notice to the Company, in a form satisfactory to the Company, you may
designate a third party who, in the event of your death, shall thereafter be
entitled to exercise this option.
9. OPTION NOT A SERVICE CONTRACT. This option is not an employment
contract and nothing in this option shall be deemed to create in any way
whatsoever any obligation on your part to continue in the employ of the
Company, or of the Company to continue your employment with the Company. In
addition, nothing in this option shall obligate the Company or any Affiliate
of the Company, or their respective shareholders, Board of Directors,
officers or employees to continue any relationship which you might have as a
Director or Consultant for the Company or Affiliate of the Company.
10. NOTICES. Any notices provided for in this option or the Plan shall
be given in writing and shall be deemed effectively given upon receipt or, in
the case of notices delivered by the Company to you, five (5) days after
deposit in the United States mail, postage prepaid, addressed to you at the
address specified below or at such other address as you hereafter designate
by written notice to the Company.
11. GOVERNING PLAN DOCUMENT. This option is subject to all the
provisions of the Plan, a copy of which is attached hereto and its provisions
are hereby made a part of this option, including without limitation the
provisions of Section 6 of the Plan relating to option provisions, and is
further subject to all interpretations, amendments, rules and regulations
which may from time to time be promulgated and adopted pursuant to the Plan.
In the event of any conflict between the provisions of this option and those
of the Plan, the provisions of the Plan shall control.
Dated the ____ day of __________________, 19__.
Very truly yours,
CoCensys, Inc.
By:_________________________________________________
Duly authorized on behalf
of the Board of Directors
ATTACHMENTS:
1996 Equity Incentive Plan
Notice of Exercise
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The undersigned:
(A) Acknowledges receipt of the foregoing option and the attachments
referenced therein and understands that all rights and liabilities with
respect to this option are set forth in the option and the Plan; and
(B) Acknowledges that as of the date of grant of this option, it sets
forth the entire understanding between the undersigned optionee and the
Company and its Affiliates regarding the acquisition of stock in the Company
and supersedes all prior oral and written agreements on that subject with the
exception of (i) the options previously granted and delivered to the
undersigned under stock option plans of the Company, and (ii) the following
agreements only:
NONE ___________________
(Initial)
OTHER ___________________
___________________
___________________
OPTIONEE______________________________________
Address: __________________________________
__________________________________
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NOTICE OF EXERCISE
CoCensys, Inc.
______________________
______________________
Date of Exercise:__________________
Ladies and Gentlemen:
This constitutes notice under my stock option that I elect to purchase
the number of shares for the price set forth below.
Type of option: Incentive
Stock option dated: _________________________
Number of shares as to
which option is exercised: _________________________
Certificates to be
issued in name of: _________________________
Total exercise price: $_________________________
Cash payment delivered
herewith: $_________________________
Value of ______ shares of
common stock delivered
herewith(1): $_________________________
By this exercise, I agree (i) to provide such additional documents as
you may require pursuant to the terms of the Company's 1996 Equity Incentive
Plan, (ii) to provide for the payment by me to you (in the manner designated
by you) of your withholding obligation, if any,
___________________________
(1) Shares must meet the public trading requirements set forth in the option.
Shares must be valued in accordance with the terms of the option being
exercised, must have been owned for the minimum period required in the
option, and must be owned free and clear of any liens, claims, encumbrances
or security interests. Certificates must be endorsed or accompanied by an
executed assignment separate from certificate.
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relating to the exercise of this option, and (iii) to notify you in writing
within fifteen (15) days after the date of any disposition of any of the
shares of Common Stock issued upon exercise of this option that occurs within
two (2) years after the date of grant of this option OR within one (1) year
after such shares of Common Stock are issued upon exercise of this option.
Very truly yours,
__________________________________________
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