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SIGNAL PHARMACEUTICALS, INC.
STOCK OPTION GRANT NOTICE,
AGREEMENT AND NOTICE OF EXERCISE
(1998 EQUITY INCENTIVE PLAN)
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SIGNAL PHARMACEUTICALS, INC.
EXHIBIT 10.4
STOCK OPTION GRANT NOTICE
(1998 EQUITY INCENTIVE PLAN)
SIGNAL PHARMACEUTICALS, INC. (the "Company"), pursuant to its 1998 Equity
Incentive Plan (the "Plan"), hereby grants to Optionee an option to purchase the
number of shares of the Company's common stock set forth below. This option is
subject to all of the terms and conditions as set forth herein and in
Attachments I, II and III, which are incorporated herein in their entirety.
Optionee: _________________________________
Date of Grant: _________________________________
Vesting Commencement Date: _________________________________
Shares Subject to Option: _________________________________
Exercise Price Per Share: _________________________________
Expiration Date: _________________________________
____ Incentive Stock Option ____ Nonstatutory Stock Option
EXERCISE SCHEDULE: Exercisable as vested.
VESTING SCHEDULE: One fourth (1/4th) of the shares subject
to this option shall vest on the first anniversary
of the Vesting Commencement Date of this option and
the balance of the shares shall vest in equal
successive monthly installments over each of the
next thirty-six (36) months until this option is
fully vested or vesting terminates as provided in
the Plan or the Stock Option Agreement.
PAYMENT: Any one or a combination of the following: (i) by cash or check, (ii)
pursuant to a Regulation T program, as set forth in the Stock Option Agreement
or (iii) by delivering shares of previously-owned common stock of the Company,
as set forth in the Stock Option Agreement.
ADDITIONAL TERMS/ACKNOWLEDGEMENTS: The undersigned Optionee acknowledges receipt
of, and understands and agrees to, this Grant Notice, the Stock Option Agreement
and the Plan. Optionee further acknowledges that as of the Date of Grant, this
Grant Notice, the Stock Option Agreement and the Plan set forth the entire
understanding between Optionee and the Company regarding the acquisition of
stock in the Company and supersedes all prior oral and written agreements on
that subject with the exception of (i) options previously granted and delivered
to Optionee under the Plan, and (ii) the following agreements only:
OTHER AGREEMENTS: ____________________________________________
____________________________________________
SIGNAL PHARMACEUTICALS, INC. OPTIONEE:
By: _______________________________ ___________________________________
Signature
Title: ____________________________
Date: _____________________________ Date: _____________________________
Attachment I: Stock Option Agreement
Attachment II: 1998 Equity Incentive Plan
Attachment III: Notice of Exercise
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STOCK OPTION AGREEMENT
Pursuant to the Grant Notice and this Stock Option Agreement, the
Company has granted you an option to purchase the number of shares of the
Company's common stock ("Common Stock") indicated in the Grant Notice at the
exercise price indicated in the Grant Notice. Defined terms not explicitly
defined in this Stock Option Agreement but defined in the Plan shall have the
same definitions as in the Plan.
The details of your option are as follows:
1. VESTING. Subject to the provisions contained herein, this option will
vest as provided in the Grant Notice, provided that vesting will cease upon the
termination of your Continuous Status as an Employee, Director or Consultant.
2. METHOD OF PAYMENT.
(a) PAYMENT OPTIONS. Payment of the exercise price by cash or check is
due in full upon exercise of all or any part of this option, provided that you
may elect, to the extent permitted by applicable law and the Grant Notice, to
make payment of the exercise price under one of the following alternatives:
(i) 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;
(ii) 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
(iii) Payment by a combination of the above methods.
3. WHOLE SHARES. This option may only be exercised for whole shares.
4. 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.
5. TERM.
(a) The term of this option commences on the Date of Xxxxx and expires
upon the earliest of:
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(i) the Expiration Date indicated in the Grant Notice;
(ii) the tenth (10th) anniversary of the Date of Xxxxx;
(iii) twelve (12) months after your death, if you die during, or within
three (3) months after the termination of your Continuous Status as an Employee,
Director or Consultant;
(iv) twelve (12) months after the termination of your Continuous Status
as an Employee, Director or Consultant due to disability;
(v) immediately upon the termination of your Continuous Status as an
Employee, Director or Consultant for Cause (as defined below); or
(vi) three (3) months after the termination of your Continuous Status as
an Employee, Director or Consultant for any other reason, provided that if
during any part of such three (3)-month period the option is not exercisable
solely because of the condition set forth in paragraph 4 (Securities Law
Compliance), in which event the option shall not expire until the earlier of the
Expiration Date or until it shall have been exercisable for an aggregate period
of three (3) months after the termination of Continuous Status as an Employee,
Director or Consultant.
(b) "Cause" shall include, but not be limited to, the commission of any
act of fraud, embezzlement or dishonesty, any unauthorized use or disclosure of
confidential information or trade secrets of the Company or any acquiring or
surviving corporation, or any other intentional misconduct adversely affecting
the business or affairs of the Company or any acquiring or surviving corporation
in a material manner. The foregoing definition shall not be deemed to be
inclusive of all the acts or omissions which the Company or any acquiring or
surviving corporation may consider as Cause for your dismissal or discharge.
Nothing herein will limit the right of you and your beneficiaries to contest the
validity or propriety of any such determination.
(c) To obtain the federal income tax advantages associated with an
"incentive stock option," the Code requires that at all times beginning on the
grant date 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, except in the
event of your death or "permanent and total disability" (as defined in the
Code). The Company cannot guarantee that an Incentive Stock Option will be
treated as an "incentive stock option" if it is exercised more than three (3)
months after the date your employment with the Company terminates.
6. EXERCISE.
(a) You may exercise the vested portion of this option during its term
(and the unvested portion of this option if the Grant Notice so permits) 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.
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(b) By exercising this option you agree that:
(i) as a condition to 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) if this option is an Incentive Stock Option 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 Grant or within one (1) year after
such shares of Common Stock are transferred upon exercise of this option;
7. 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.
8. 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, its shareholders, board of
directors, officers or employees to continue any relationship which you might
have as a director or consultant for the Company.
9. 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 last address
you provided to the Company.
10. GOVERNING PLAN DOCUMENT. This option is subject to all the
provisions of the Plan, the provisions of which are hereby made a part of this
option, including without limitation the provisions 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.
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NOTICE OF EXERCISE
Signal Pharmaceuticals, 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 ___ Nonstatutory
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 1998 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, relating to the exercise of the
Option, and (iii) to the extent the Option is an incentive stock option, 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 the Option or within one
(1) year after such shares of Common Stock are issued upon exercise of the
Option.
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(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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I hereby make the following certification and representation with
respect to the number of shares of Common Stock (the "Shares"), which are being
acquired by me for my own account upon exercise of the Option as set forth
above:
I acknowledge that all certificates representing any of the Shares
subject to the provisions of the Option shall have endorsed thereon appropriate
legends reflecting any restrictions imposed pursuant to the Company's Articles
of Incorporation, Bylaws and/or applicable securities laws.
Very truly yours,
_______________________________
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