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EXHIBIT 99.5
SHAMAN PHARMACEUTICALS, INC.
NON-EMPLOYEE DIRECTOR STOCK OPTION AGREEMENT
AGREEMENT made the ____ day of __________, 199_ by and between
Shaman Pharmaceuticals, Inc., a corporation (the "Company") organized and
existing under the laws of the State of California, and ____________________, a
member of the Company's Board of Directors to whom the option grant evidenced
by this Agreement is hereby made (the "Optionee").
WHEREAS the Company's Board of Directors (the "Board") has
adopted, and the stockholders have approved, the Company's 1992 Stock Option
Plan, as amended (the "Plan"), for the purpose of attracting and retaining the
services of key employees (including officers and directors), and non-employee
members of the Board and consultants and other independent contractors of the
Company and its parent or subsidiary organizations.
WHEREAS Optionee is a non-employee Board member who is
entitled to receive an option to acquire shares of the Company's common stock
pursuant to the automatic option grant program in effect for non-employee Board
members under the Plan. This Agreement is executed pursuant to, and is
intended to carry out the purposes of, the Plan in connection with the
automatic option grant made to such Optionee thereunder.
WHEREAS the granted option is not intended to be an incentive
stock option ("Incentive Option") within the meaning of Section 422 of the
Internal Revenue Code.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. Subject to and upon the terms and
conditions set forth in this Agreement, Company hereby grants to Optionee, as
of the date of this Agreement (the "Grant Date"), a stock option to purchase up
to ____________________ (_______) shares of the Company's common stock (the
"Option Shares"). The Option Shares shall be purchasable from time to time
during the option term at the price of $_____ per share (the "Option Price").
2. OPTION TERM. This option shall have a maximum term
of ten (10) years measured from the Grant Date and shall accordingly expire at
the close of business on the last day of such ten (10)-year period (the
"Expiration Date"), unless sooner terminated in accordance with Paragraph 5 or
Paragraph 7.A or sooner cancelled in accordance with Paragraph 8.
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3. LIMITED TRANSFERABILITY. This option may, in
connection with the Optionee's estate plan, be assigned in whole or in part
during the Optionee's lifetime to one or more members of the Optionee's
immediate family or to a trust established exclusively for one or more such
family members. The assigned portion may only be exercised by the person or
persons who acquire a proprietary interest in the option pursuant to the
assignment. The terms applicable to the assigned portion shall be the same as
those in effect for the option immediately prior to such assignment and shall
be set forth in such documents issued to the assignee as the Plan Administrator
may deem appropriate.
4. EXERCISABILITY. This option shall become exercisable
in a series of twenty-four (24) successive equal monthly installments over
Optionee's period of Board service, with the first such installment to become
exercisable one (1) month after the automatic grant date.
Once this option becomes exercisable for one or more
installments of the Option Shares, those installments shall accumulate, and
this option shall remain exercisable for the accumulated installments until the
Expiration Date or sooner termination of the option term under Paragraph 5 or
Paragraph 7.A or the cancellation of this option under Paragraph 8.
5. CESSATION OF BOARD MEMBERSHIP. Should Optionee's
service as a Board member cease for any reason while this option remains
outstanding, then the option term specified in Paragraph 2 shall terminate (and
this option shall cease to be outstanding) prior to the Expiration Date in
accordance with the following provisions:
(i) This option shall immediately
terminate and cease to be outstanding for any Option Shares for which
it is not otherwise exercisable at the time of the Optionee's
cessation of Board service.
(ii) Should Optionee cease for any reason
other than death to serve as a member of the Board, then Optionee
shall have a six (6)-month period measured from the date of such
cessation of Board service in which to exercise this option for up to
that number of Option Shares (if any) for which this option is, in
accordance with the provisions of this Agreement, exercisable at the
time of such cessation of Board service. In no event, however, may
this option be exercised at any time after the expiration of the
maximum ten (10)-year term in effect for such option.
(iii) Should Optionee die while serving as
a Board member or within six (6) months after cessation of Board
service, then the personal representative of the Optionee's estate (or
the person or persons to whom the Option is transferred pursuant to
the Optionee's will or in accordance with the laws of descent and
distribution) shall have the right to exercise this option for any or
all of the Option Shares for which this option is, in accordance with
the provisions of this Agreement, exercisable at the time of the
Optionee's cessation of Board service, less any Option Shares
subsequently purchased by Optionee
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prior to death. Such right shall cease to be exercisable, and this
option shall accordingly terminate with respect to those Option
Shares, upon the earlier of (i) the expiration of the twelve
(12)-month period measured from the date of Optionee's death or (ii)
the expiration of the ten (10)-year maximum term in effect for this
option.
6. ADJUSTMENT IN OPTION SHARES. In the event any change
is made to the common stock issuable under the Plan by reason of any stock
split, stock dividend, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding common stock as a class
effected without the Company's receipt of consideration, appropriate
adjustments shall automatically be made to (i) the class and/or number of
securities subject to this option and (ii) the Option Price payable per share
in order to prevent any dilution or enlargement of benefits hereunder. The
adjustments determined by the Plan Administrator shall be final, binding and
conclusive.
7. CORPORATE TRANSACTION/CHANGE IN CONTROL.
A. In the event of any of the following
stockholder-approved transactions to which the Company is a party (a "Corporate
Transaction"):
(i) a merger or consolidation in which the
Company is not the surviving entity, except for a transaction the
principal purpose of which is to change the State of the Company's
incorporation,
(ii) the sale, transfer or other disposition of
all or substantially all of the assets of the Company in complete
liquidation or dissolution of the Company; or
(iii) any reverse merger in which the Company is
the surviving entity but in which the securities possessing more than
fifty percent (50%) of the total combined voting power of the
Company's outstanding securities are transferred to a person or
persons different from than those who held those securities
immediately prior to such merger,
this option, to the extent outstanding at such time
but not otherwise fully exercisable, shall automatically accelerate so that the
option shall, immediately prior to the specified effective date for the
Corporate Transaction, become fully exercisable for all the Option Shares at
the time subject to this option and may be exercised for any or all of such
Option Shares. Upon the consummation of the Corporate Transaction, this option
shall terminate and cease to be outstanding, except to the extent assumed by
the successor corporation or its parent company.
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B. This option, to the extent outstanding but not
otherwise at the time fully exercisable, shall automatically accelerate in
connection with a Change in Control so that this option shall, immediately
prior to the effective date of such Change in Control, become fully exercisable
for all of the Option Shares at the time subject to this option and may be
exercised for any or all of such Option Shares. The option shall remain so
exercisable until the earliest to occur of (i) the expiration of the maximum
ten (10)-year term in effect for this option, (ii) the sooner termination of
the option in accordance with Paragraph 5 or 7.A of this Agreement or (iii) the
cancellation of this option in accordance with Paragraph 8. For purposes of
this Agreement, a Change in Control shall be deemed to occur in the event:
(i) any person or related group of persons (other
than the Company or a person that directly or indirectly controls, is
controlled by, or is under common control with, the Company) directly
or indirectly acquires beneficial ownership (within the meaning of
Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the
"1934 Act")) of securities possessing more than fifty percent (50%) of
the total combined voting power of the Company's outstanding
securities pursuant to a tender or exchange offer made directly to the
Company's stockholders; or
(ii) there is a change in the composition of the
Board over a period of twenty-four (24) consecutive months or less
such that a majority of the Board members ceases, by reason of one or
more proxy contests for the election of Board members, to be comprised
of individuals who either (A) have been Board members continuously
since the beginning of such period or (B) have been elected or
nominated for election as Board members during such period by at least
a majority of the Board members described in clause (A) who were still
in office at the time such election or nomination was approved by the
Board.
C. This Agreement shall in no way affect the right of
the Company to adjust, reclassify, reorganize or otherwise change its capital
or business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.
8. LIMITED STOCK APPRECIATION RIGHT
Optionee is hereby granted a limited stock appreciation right
in tandem with this option, exercisable upon the terms and conditions set forth
below:
(a) Should a Hostile Take-Over occur, then this
option shall automatically be cancelled with respect to all the Option
Shares at the time subject to such option. The optionee shall in
return be entitled to a cash distribution from the Company in an
amount equal to the excess of (i) the Take-Over Price of the shares of
the Company's common stock at the time subject to the cancelled option
(whether or not the option is otherwise at the time exercisable for
those shares) over (ii) the aggregate option price payable for such
shares.
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(b) The cash distribution shall be paid to the
Optionee within five (5) days following the consummation of the
Hostile Take-Over, and neither the approval of the Plan Administrator
nor the consent of the Board shall be required in connection with such
option cancellation and cash distribution. Upon receipt of such cash
distribution, this option shall be cancelled and the Optionee shall
cease to have any further right to acquire any Option Shares under
this Agreement.
(c) For purposes of this limited stock appreciation right,
the following definitions shall be in effect:
- A HOSTILE TAKE-OVER shall be deemed to occur in the event
any person or related group of persons (other than the Company or a person that
directly or indirectly controls, is controlled by, or is under common control
with, the Company) directly or indirectly acquires beneficial ownership (within
the meaning of Rule 13d-3 of the 0000 Xxx) of securities possessing more than
fifty percent (50%) of the total combined voting power of the Company's
outstanding securities pursuant to a tender or exchange offer made directly to
the Company's stockholders which the Board does not recommend such stockholders
to accept.
- The TAKE-OVER PRICE per share shall be deemed to be equal
to the greater of (a) the Fair Market Value per share of the Company's common
stock on the date of the option cancellation, as determined in accordance with
the valuation provisions of paragraph 10.B of the Agreement, or (b) the highest
reported price paid per share of such common stock by the tender offeror in
effecting the Hostile Take-Over.
9. PRIVILEGE OF STOCK OWNERSHIP. The holder of this
option shall not have any of the rights of a stockholder with respect to the
Option Shares until such individual shall have exercised the option and paid
the Option Price for the purchased shares.
10. MANNER OF EXERCISING OPTION.
A. In order to exercise this option with respect to any
or all Option Shares for which this option is at the time exercisable, Optionee
(or in the case of exercise after Optionee's death, Optionee's executor,
administrator, heir or legatee, as the case may be) must take the following
action:
(i) Execute and deliver to the Secretary of the
Company a written notice of exercise (the "Exercise Notice") in
substantially the form of attached Exhibit I.
(ii) Pay the aggregate Option Price for the
purchased shares in one or more of the following alternative forms:
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- full payment in cash or check made payable
to the Company's order;
- full payment in shares of the Company's
common stock held by the Optionee for the requisite period necessary
to avoid a charge to the Company's reported earnings and valued at
Fair Market Value on the Exercise Date (as such terms are defined
below);
- full payment in a combination of shares of
the Company's common stock held for the requisite period necessary to
avoid a charge to the Company's reported earnings and valued at Fair
Market Value on the Exercise Date and cash or check made payable to
the Company's order; or
- full payment through a sale and remittance
procedure pursuant to which the Optionee (I) shall provide irrevocable
instructions to a designated brokerage firm to effect the immediate
sale of the purchased shares and remit to the Company, out of the sale
proceeds available on the settlement date, sufficient funds to cover
the aggregate option price payable for the purchased shares and (II)
shall concurrently provide directives to the Company to deliver the
certificates for the purchased shares directly to such brokerage firm
in order to complete the sale transaction.
(iii) Furnish appropriate documentation
that the person or persons exercising the option (if not the Optionee)
have the right to exercise this option.
B. For purposes of this Agreement, the Exercise Date
shall be the date on which the executed Exercise Notice shall have been
delivered to the Company. Except to the extent the sale and remittance
procedure specified above is utilized in connection with the option exercise,
payment of the Option Price for the purchased shares must accompany such
Exercise Notice. For all valuation purposes under this Agreement, the Fair
Market Value of a share of common stock on any relevant date shall be
determined in accordance with the following provisions:
(i) If the common stock is not at the time listed
or admitted to trading on any national stock exchange but is traded on
the Nasdaq National Market, then the fair market value shall be the
closing selling price per share of common stock on the date in
question, as reported by the National Association of Securities
Dealers on the Nasdaq National Market or any successor system. If
there is no reported closing selling price for the common stock on the
date in question, then the closing selling price on the last preceding
date for which such quotation exists on the Nasdaq National Market
shall be determinative of fair market value.
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(ii) If the common stock is at the time listed or
admitted to trading on any national stock exchange, then the fair
market value shall be the closing selling price per share of common
stock on the date in question on the stock exchange determined by the
Plan Administrator to be the primary market for the common stock, as
such price is officially quoted in the composite tape of transactions
on such exchange. If there is no such reported price for the date in
question, then the fair market value shall be the closing selling
price on the exchange on the last preceding date for which such
quotation exists.
(c) As soon after the Exercise Date as practical, the
Company shall mail or deliver to or on behalf of the Optionee (or any other
person or persons exercising this option in accordance herewith) a certificate
or certificates representing the shares for which the option has been exercised
in accordance with the provisions of this Agreement.
(d) In no event may this option be exercised for any
fractional shares.
11. COMPLIANCE WITH LAWS AND REGULATIONS.
(a) The exercise of this option and the issuance of
Option Shares upon the exercise of this option shall be subject to compliance
by the Company and the Optionee with all applicable requirements of law
relating thereto and with all applicable regulations of any stock exchange on
which the Company's common stock may be listed at the time of such exercise and
issuance.
(b) In connection with the exercise of this option,
Optionee shall execute and deliver to the Company such representations in
writing as may be requested by the Company in order for it to comply with the
applicable requirements of Federal and State securities laws.
12. NOTICES. Any notice required to be given to the
Company under the terms of this Agreement shall be in writing and addressed to
the Company in care of its Chief Financial Officer at the Corporate Offices at
000 Xxxx Xxxxx Xxxxxx, Xxxxx Xxx Xxxxxxxxx, Xxxxxxxxxx XX 00000. Any notice to
be given to Optionee shall be in writing and addressed to him at the address
indicated below his signature line in this Agreement. Any such notice shall be
deemed effectively given upon personal delivery or upon deposit in the United
States Post Office, by registered or certified mail, postage prepaid and
properly addressed to the party to be notified.
13. SUCCESSORS AND ASSIGNS. Except as otherwise
expressly set forth in this Agreement, the provisions of this Agreement shall
inure to the benefit of, and be binding upon, the administrators, heirs, legal
representatives and assigns of the Optionee and of the Company.
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14. INTERPRETATION OF THIS AGREEMENT. This Agreement and
the option evidenced hereby are made and granted pursuant to the automatic
grant provisions in effect under the Plan for non-employee Board members and
are in all respects limited by and subject to the express provisions of the
Plan applicable to such automatic grants.
15. LIABILITY OF COMPANY. The inability of Company to
obtain approval from any regulatory body having authority deemed by the Company
to be necessary to the lawful issuance and sale of any common stock pursuant to
this option shall relieve the Company of any liability with respect to the
non-issuance or sale of the common stock as to which approval shall not have
been obtained. The Company however, shall use its best efforts to obtain all
such approvals.
16. GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of California applicable
to contracts entered into and wholly to be performed within the State of
California by California residents.
17. NO IMPAIRMENT OF RIGHTS. Nothing in this Agreement
or in the Plan shall be deemed to impair or otherwise restrict the rights of
the Company or the stockholders to remove the Optionee from the Board at any
time pursuant to the provisions of applicable law.
IN WITNESS WHEREOF, Shaman Pharmaceuticals, Inc. has caused
this Agreement to be executed on its behalf by its duly-authorized officer, and
the Optionee has executed this Agreement, all as of the day and year indicated
above.
SHAMAN PHARMACEUTICALS, INC.
By:
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Title:
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OPTIONEE
Address
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EXHIBIT I
NOTICE OF EXERCISE OF STOCK OPTION
I hereby notify Shaman Pharmaceuticals, Inc. (the "Company")
that I elect to purchase ________________________________________ shares of
common stock of the Company (the "Purchased Shares") at the option price of
$_____ per share (the "Option Price") pursuant to that certain option (the
"Option") granted me on _______________, 199_.
Concurrently with the delivery of this Exercise Notice to the
Chief Financial Officer of the Company, I shall hereby pay to the Company the
Option Price for the Purchased Shares in accordance with the provisions of my
agreement with the Company evidencing the Option and shall deliver whatever
additional documents may be required by such agreement as a condition for
exercise. Alternatively, I may utilize the special broker-dealer sale and
remittance procedure specified in my agreement to effect the payment of the
Option Price for the Purchased Shares.
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Date OPTIONEE
Address:
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Print name in exact manner
it is to appear on the
stock certificate:
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Address to which certificate
is to be sent, if different
from address above:
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Social Security Number:
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