Non-Plan Option
NONTRANSFERABLE
NONQUALIFIED STOCK OPTION AGREEMENT
for
Xxxxx xx Xxxxx
-----------------------------------
THIS AGREEMENT (this "Agreement"), dated as of September 9, 2002, is by and
between SYNAPTIC PHARMACEUTICAL CORPORATION, a Delaware corporation (the
"Company"), and Xxxxx xx Xxxxx (the "Optionee," which term as used herein shall
be deemed to include any successor to the Optionee by will or by the laws of
descent and distribution, unless the context shall otherwise require).
W I T N E S S E T H:
WHEREAS, the Company and the Optionee are parties to an Employment
Agreement dated as of September 9, 2002 (the "Employment Agreement");
WHEREAS, the Employment Agreement provides for the grant of an option to
acquire 750,000 shares of the Company's common stock on the terms provided
herein, such option not be granted under, or subject to the terms of, the
Synaptic Pharmaceutical Corporation 1996 Incentive Plan;
WHEREAS, the Company, acting through the Compensation Committee (the
"Committee") of its Board of Directors (the "Board"), effective September 9,
2002 (the "Start Date"), granted to the Optionee an option to purchase up to an
aggregate of 750,000 shares of Common Stock, $0.01 par value, of the Company
(the "Common Stock"), at the price of $5.75 per share, such option to be for the
term and upon the terms and conditions hereinafter stated.
NOW, THEREFORE, in consideration of the mutual premises and undertakings
hereinafter set forth, the parties hereto agree as follows:
1. Option; Option Price. Pursuant to said action of the Committee, the
Company has granted to the Optionee the option (the "Option") to purchase, upon
and subject to the terms and conditions of this Agreement, 750,000 shares (the
"Option Shares") of Common Stock of the Company at the price of $5.75 per share
(the "Option Price"), which Option is not intended to qualify for Federal income
tax purposes as an "incentive stock option" within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code").
2. Term. The term (the "Option Term") of the Option shall commence on the
Start Date and expire on the tenth anniversary of the Start Date, unless the
Option shall theretofore have been terminated in accordance with the terms
hereof.
3. Exercisability; Time of Exercise.
(a) General. Unless accelerated in the discretion of the Committee or as
otherwise provided herein, the Option shall vest and become exercisable as to
1/48th of the Option Shares each month, commencing on the one-month anniversary
of the Start Date, so that the Option shall be vested and exercisable as to all
of the Option Shares on the 48-month anniversary of the Start Date. The Option
shall remain exercisable as to all shares as to which is becomes vested and
exercisable until the expiration of the Option Term, unless it is terminated
earlier as provided in any of the other paragraphs of this Section 3 or Section
6 .
(b) Termination for Cause. If the Optionee shall cease to be an employee of
the Company as the result of a Termination for Cause (as defined in the
Employment Agreement), the Option shall automatically terminate on, and the
Optionee shall have no further right to exercise the Option on or after, the
date as of which notice of such termination is given to the Optionee by the
Company. As used in this Agreement, the term "Cause" has the meaning given to
such term in the Employment Agreement.
(c) Termination Without Cause; Resignation for Good Reason. If the
Optionee's employment with the Company terminates and such termination
constitutes a Termination Without Cause (as defined in the Employment Agreement)
or a Resignation for Good Reason (as defined in the Employment Agreement), the
vesting of the Option shall accelerate so that, as of the date of such
termination, the Option shall be exercisable for the Option Shares, if any, for
which it has become exercisable pursuant to paragraph (a) of this Section 3 as
of the date of such termination plus an additional 24/48ths of the Option Shares
(up to the total number of Option Shares). The Option shall in any event
terminate upon, and the Optionee shall have no further right to exercise the
Option after, the earlier of (i) the expiration of the Option Term and (ii) 30
days after the date of such a termination.
(d) Voluntary Termination. If the Optionee terminates his employment with
the Company by a Voluntary Termination (as defined in the Employment Agreement),
the Option shall be exercisable for the Option Shares, if any, for which it has
become exercisable pursuant to paragraph (a) of this Section 3 as of the date
the Optionee gives notice of such termination. The Option shall in any event
terminate upon and the Optionee shall have no further right to exercise the
Option after, the earlier of (i) the expiration of the Option Term and (ii) 30
days after the date the Optionee gives notice of such termination.
(e) Disability Termination. If the Optionee's employment with the Company
terminates and such termination constitutes a Disability Termination (as defined
in the Employment Agreement), the vesting of the Option shall accelerate so
that, as of the date of such termination, the Option shall be exercisable for
the Option Shares, if any, for which it has become exercisable pursuant to
paragraph (a) of this Section 3 as of the date of such termination plus an
additional 12/48ths of the Option Shares (up to the total number of Option
Shares). The Option shall in any event terminate upon, and the Optionee shall
have no further right to exercise the Option after, the earlier of (i) the
expiration of the Option Term and (ii) 180 days after the date of such a
termination. For purposes of this Agreement, the term "Disability" has the
meaning given to the term "Employee's Disability" in the Employment Agreement.
(f) Termination as a Result of Death. If the Optionee's employment with the
Company terminates as a result of the Optionee's death, the Option shall, as of
the date of such termination, be exercisable by the beneficiary designated by
the Optionee for such purpose (the "Designated Beneficiary") or, if the
Designated Beneficiary shall predecease the Optionee, by the personal
representatives, heirs or legatees of the Optionee, and the vesting of the
Option shall accelerate so that, as of the date of such termination, the Option
shall be exercisable for the Option Shares, if any, for which it has become
exercisable pursuant to paragraph (a) of this Section 3 as of the date of such
termination plus an additional 12/48ths of the Option Shares (up to the total
number of Option Shares). The Option shall in any event terminate upon, and the
Optionee (and the Designated Beneficiary) shall have no further right to
exercise the Option after, the earlier of (i) the expiration of the Option Term
and (ii) one year after the date of the Optionee's death.
(g) Death Following Disability. In the event of the Optionee's death within
180 days following a Disability Termination (as defined in the Employment
Agreement), the Option shall thereafter be exercisable by the Optionee's
Designated Beneficiary or personal representatives, heirs or legatees, to the
extent, if any, which it shall have vested and become exercisable pursuant to
paragraphs (a) and (e) of this Section 3 for a period of one (1) year following
the date of death but in no event later than the expiration of the Option Term.
4. Procedure for Exercise. (a) The Option may be exercised, from time to
time, in whole or in part (but for the purchase of whole shares only), by
delivery of a written notice (the "Notice") from the Optionee to the Secretary
of the Company, which Notice shall:
(i) state that the Optionee elects to exercise the Option under this
Agreement;
(ii) state the number of shares with respect to which the Optionee is
exercising the Option (the "Acquired Shares");
(iii) include any representations of the Optionee required under Section
7(b) hereof;
(iv) state the method of payment for the Acquired Shares pursuant to
Section 4(b);
(v) in the event that the Option shall be exercised by any person other
than the Optionee pursuant to Sections 3 and 8, include appropriate proof of the
right of such person to exercise the Option; and
(vi) state the date upon which the Optionee desires to consummate the
purchase of the Acquired Shares (which date must be prior to the termination of
such Option).
(b) Payment of the Option Price for the Acquired Shares shall, unless
otherwise provided by the Committee, be made (i) in cash or by personal or
certified check, or (ii) by delivery of shares of the Company's Common Stock
owned by the Optionee for more than six months prior to the date of exercise
having a value equal to the aggregate Option Price of the Acquired Shares, with
such delivered shares to be valued at the closing sale price of the Company's
Common Stock on the Nasdaq National Market on the date of exercise (provided
that, if the Company's Common Stock does not trade on the Nasdaq National Market
at such time, the value thereof shall be determined by the Committee in a manner
it deems appropriate).
5. No Rights as a Stockholder. The Optionee shall not have any privileges
of a stockholder with respect to any Option Shares until the date a stock
certificate representing such Option Shares is issued to the Optionee.
6. Adjustments.
(a) Stock Dividends, Splits, Subdivisions or Combinations. Subject to the
other provisions of this Section 6, if, at any time while the Option is
outstanding, the Common Stock is changed by reason of dividends payable in
Common Stock or splits, subdivisions or combinations of shares of Common Stock,
then the number of shares of Common Stock deliverable upon the exercise
thereafter of the Option shall be increased or decreased proportionately, as the
case may be, without change in the aggregate Option Price.
(b) Cash Mergers. Upon the occurrence of a merger on consolidation of the
Company with another corporation in a transaction in which the stockholders of
the Company receive cash consideration in exchange for their shares of capital
stock of the Company (a "cash merger"), the Option shall automatically
terminate; provided, however, that the Optionee shall be given (i) written
notice of such cash merger at least 20 days prior to its proposed effective date
(as specified in such notice) and (ii) an opportunity, during the period
commencing with delivery of such notice and ending ten (10) days prior to such
proposed effective date, to exercise the Option in full as to all of the Option
Shares, whether or not then vested.
(c) Assumption or Substitution of Options. Notwithstanding anything
contained herein to the contrary, Section 6(b) shall not be applicable if
provision shall be made in connection with such cash merger for the assumption
of the Option by, or the substitution for the Option of a new option covering
the stock of, the surviving, successor or purchasing corporation, or a parent or
subsidiary thereof, with appropriate adjustments as to the number, kind and
option price of shares subject to such option.
(d) Corporate Transactions. Notwithstanding anything contained herein to
the contrary, upon the occurrence of (i) a merger or consolidation of the
Company with another corporation in a transaction (other than a cash merger) in
which the Company shall not survive or in which the Company is the survivor but
its capital stock is exchanged for stock, securities, or property of another
entity or (ii) a sale of all or substantially all of the assets of the Company
(any transaction described in clause (i) or (ii) being referred to herein as a
"corporate transaction"), provision shall be made in connection with such
corporate transaction for the assumption of the Option by, or the substitution
for the Option of a new option covering the stock of, the surviving, successor
or purchasing corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number, kind and option price of shares subject to such
option.
(e) Termination Following a Change of Control. Notwithstanding anything
contained herein to the contrary, in the event the Optionee's employment with
the Company or the person which is the surviving, successor or purchasing
corporation, is terminated at any time following any Change of Control (as
defined in the Employment Agreement) and such termination constitutes a
Termination Without Cause (as defined in the Employment Agreement) or a
Resignation for Good Reason (as defined in the Employment Agreement), the Option
shall become exercisable in full as to all Option Shares, whether or not vested,
as of the date of such termination, and the Optionee shall have the right to
exercise the Option as to any or all of such shares until the earlier of (i) the
expiration of the Option Term and (ii) the 90th day following the date of such
termination, at which time the Option shall terminate.
7. Additional Provisions Related to Exercise. (a) The Option shall be
exercisable only on such date or dates and during such period and for such
number of shares of Common Stock as are set forth in this Agreement.
(b) To exercise the Option, the Optionee shall follow the procedures set
forth in Section 4 hereof. Upon the exercise of the Option as a time when there
is not in effect a registration statement under the Securities Act of 1933, as
amended, relating to the shares of Common Stock issuable upon exercise of the
Option, the Optionee shall provide the Company with such representations and
warranties as may be required by the Committee to the effect that the Acquired
Shares are being acquired for investment and not with a view to the distribution
thereof. Anything contained herein to the contrary notwithstanding, in the event
the Board shall determine, in its sole and subjective discretion, that the
registration, qualification or listing of the Option Shares upon a securities
exchange or under any state or Federal law, or the consent or approval or any
government or regulatory body, is necessary or desirable as a condition of or in
connection with the exercise of the Option, the Option may not be exercised, in
whole or in part, unless and until such registration, qualification, listing,
consent or approval shall have been effected or obtained free of any conditions
not acceptable to the Board.
(c) The Option shall not be affected by any change of duties or position of
the Optionee (including transfer to or from a subsidiary), so long as the
Optionee continues to be an employee of the Company or one of its subsidiaries.
Nothing in the Option granted hereunder shall confer upon the Optionee any right
to continue in the employ of the Company or any of its subsidiaries or interfere
in any way with the right of the Company or its subsidiaries or the stockholders
of the Company, as the case may be, to terminate the Optionee's employment or to
increase or decrease the Optionee's compensation at any time.
8. Restriction on Transfer. The Option may not be transferred, pledged,
assigned, hypothecated (whether by operation of law or otherwise), sold or
otherwise disposed of in any way by the Optionee, except by will or by the laws
of descent and distribution, and may be exercised during the lifetime of the
Optionee only by the Optionee. If the Optionee dies, the Option shall thereafter
be exercisable, during the applicable period specified in Section 3, by the
Optionee's Designated Beneficiary or, if the Designated beneficiary predeceases
the Optionee, by the personal representatives, heirs or legatees to the full
extent to which the Option was exercisable by the Optionee at the time of the
Optionee's death as provided herein. The Option shall not be subject to
execution, attachment or similar process. Any attempted transfer, pledge,
assignment, hypothecation, sale or other disposition of the Option contrary to
the provisions hereof, and the levy of any execution, attachment or similar
process upon the Option, shall be null and void and without effect.
9. Restrictive Legends. In order to reflect certain restrictions on
disposition of the shares acquired upon exercise of the Option (the "Restricted
Shares"), all stock certificates representing the Restricted Shares issued shall
have affixed thereto any legends determined by the Company to be appropriate.
10. Notices. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if (i) personally
delivered or sent by telecopier, (ii) sent by nationally-recognized overnight
courier or (iii) sent by registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
if to the Optionee, to:
Xxxxx xx Xxxxx
c/o Synaptic Pharmaceutical Corporation
000 Xxxxxxx Xxxx
Xxxxxxx, Xxx Xxxxxx 00000
with a copy to:
Xxxxxx X. Xxxxxxxx
Managing Partner
Xxxxx Xxxxx & Partners
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
if to the Corporation, to:
Synaptic Pharmaceutical Corporation
000 Xxxxxxx Xxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attention: President Telecopier: 201-261-0623
With a copy to:
Xxxxxx Xxxxxx, Esq.
Xxxxx Xxxxx L.L.P.
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Xxxxxxx X. Xxxxxxxxxx, Esq.
Dechert
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
or to such other address as the party to whom notice is to be given may
have furnished to each other party in writing in accordance herewith. Any such
communication shall be deemed to have been given (i) when delivered, if
personally delivered, sent by telecopier or sent by nationally-recognized
overnight courier and (ii) on the third Business Day (as hereinafter defined)
following the date on which the piece of mail containing such communication is
posted, if sent by mail. As used herein, "Business Day" means a day that is not
a Saturday, Sunday or a day on which banking institutions in the city to which
the notice or communication is to be sent are not required to be open.
11. No Waiver. No waiver of any breach or condition of this Agreement shall
be deemed to be a waiver of any other or subsequent breach or condition, whether
of like or different nature.
12. Optionee Undertaking. The Optionee hereby agrees to take whatever
additional actions and execute whatever additional documents the Company may in
its reasonable judgement deem necessary or advisable in order to carry out or
effect one or more of the obligations or restrictions imposed on the Optionee
pursuant to the express provisions of this Agreement.
13. Modification of Rights. The rights of the Optionee are subject to
modification and termination in certain events as provided in this Agreement.
14. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New Jersey without giving effect to
principles of conflicts of laws.
15. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
16. Withholding. The Company shall have the right to require the Optionee
or his beneficiaries or legal representatives, including without limitation the
Designated Representative, to remit to the Company an amount sufficient to
satisfy Federal, state and local withholding tax requirements, or deduct from
all payments under this Agreement, amounts sufficient to satisfy any withholding
tax requirements. Whenever payments, if any, are to be made to the Optionee
under this Agreement in cash, such payments shall be net of any amounts
sufficient to satisfy all withholding tax requirements.
17. Interpretation. The Committee shall have sole discretionary authority
to interpret the terms of this Agreement, to administer this Agreement and to
make any factual determinations which it believes to be necessary or desirable
for the administration of this Agreement. All actions taken and interpretations
and determinations made by the Committee in good faith shall be final and
binding on the Optionee.
18. Entire Agreement. This Agreement and the Employment Agreement (the
provisions of which related to stock options are hereby incorporated herein by
reference) constitute the entire agreement between the parties with respect to
the subject matter hereof and thereof, and supersede all previously written or
oral negotiations, commitments, representations and agreements with respect
thereto. In the event of any inconsistency between the terms of this Agreement
and the terms of the Employment Agreement, the terms of the Employment Agreement
shall control.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
SYNAPTIC PHARMACEUTICAL CORPORATION
By:/s/ Xxxxxxxx Xxxx
---------------------------------
Name:
Title:
OPTIONEE
/s/ Xxxxx X. Xx Xxxxx
------------------------------------
Xxxxx xx Xxxxx
