STOCK OPTION AGREEMENT (Officer Incentive Stock Option)
Exhibit
10.16
(Officer
Incentive Stock Option)
This Stock Option
Agreement (this “Agreement”), effective as of «GrantDate» (the “Grant
Date”), is by and between Lexicon Pharmaceuticals,
Inc., a Delaware corporation (the “Company”), and «Name»
(“Optionee”).
To carry
out the purposes of the Lexicon Pharmaceuticals, Inc. Equity Incentive Plan (the
“Plan”), by providing Optionee the opportunity to purchase shares of Common
Stock, par value $0.001 per share, of the Company (“Stock”), and in
consideration of the mutual agreements and other matters set forth herein and in
the Plan, the Company and Optionee hereby agree as follows:
1. Grant of
Option. The Company hereby grants to Optionee the right and
option (the “Option”) to purchase all or any part of an aggregate of «Shares»
shares of Stock, on the terms and conditions set forth in this Agreement and in
the Plan. The Option shall be treated as an “incentive stock option”
within the meaning of section 422(b) of the Internal Revenue Code of 1986, as
amended (the “Code”), to the maximum extent permitted under the Code, and as a
non-statutory stock option to the extent it exceeds the limitations imposed by
the Code for incentive stock options.
(b) A
“Change in Control” shall be deemed to have occurred if any of the following
shall have taken place: (i) any “person” (as such term is used in Sections 13(d)
and 14(d)(2) of the Securities Exchange Act of 1934 (the “Exchange Act”)) other
than Invus, L.P. and its affiliates (collectively, “Invus”) is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act, or any
successor provisions thereto), directly or indirectly, of securities of the
Company representing 35% or more of the combined voting power of the Company’s
then-outstanding voting securities; (ii) Invus becomes the “beneficial owner”
(as defined in Rule 13d-3 under the Exchange Act, or any successor provisions
thereto), directly or indirectly, of securities of the Company representing 50%
or more of the combined voting power of the Company’s then-outstanding voting
securities; (iii) the approval by the stockholders of the Company of a
reorganization, merger, or consolidation, in each case with respect to which
persons who were stockholders of the Company immediately prior to such
reorganization, merger or consolidation do not, immediately thereafter, own or
control more than 50% of the combined voting power of the reorganized, merged or
consolidated Company’s then-outstanding securities entitled to vote generally in
the election of directors in substantially the same proportions as their
ownership of the Company’s outstanding voting securities prior to such
reorganization, merger or consolidation; (iv) a liquidation or dissolution of
the Company or the sale of all or substantially all of the Company’s assets; (v)
in the event any person is elected by the stockholders of the Company to the
Company’s board of directors (the “Board”) who has not been nominated for
election by a majority of the Board or any duly appointed committee thereof; or
(vi) following the election or removal of directors, a majority of the Board
consists of individuals who were not members of the Board two years before such
election or removal, unless the election of each director who is not a director
at the beginning of such two-year period has been approved in advance by
directors representing at least a majority of the directors then in office who
were directors at the beginning of the two-year period. The
Compensation Committee of the Board, in its discretion, may deem any other
corporate event affecting the Company to be a “Change in Control”
hereunder.
8. Termination of
Option. If Optionee’s Continuous Service is terminated
for any reason other than (i) the Disability (as defined in the Plan) or death
of Optionee or (ii) the Company’s termination of Optionee’s employment without
cause, the Option shall remain exercisable, with respect to the shares of Stock
that had vested under the terms of this Agreement before the date of such
termination, for a period of 90 days after the date of such termination (but in
no event later than the expiration date of the Option specified in Section 3 of
this Agreement), following which 90-day period this Agreement and Optionee’s
right to exercise the Option shall terminate. If Optionee’s
Continuous Service is terminated because of (i) the Disability or death of
Optionee or (ii) the Company’s termination of Optionee’s employment without
cause, the Option shall remain exercisable, with respect to the shares of Stock
that had vested under the terms of this Agreement before the date of such
termination, for a period of one year after the date of such termination (but in
no event later than the expiration date of the Option specified in Section 3 of
this Agreement), following which one-year period this Agreement and Optionee’s
right to exercise the Option shall terminate; provided that the Option shall not
be treated as an “incentive stock option” within the meaning of the Code if the
Option is exercised more than 90 days following the termination of Optionee’s
Continuous Service as a result of the Company’s termination of Optionee’s
employment without cause. Notwithstanding the foregoing, if the
employment of Optionee by the Company is terminated for cause, this Agreement
and Optionee’s right to exercise any portion of the Option, whether or not
vested, shall terminate at the commencement of business on the date of such
termination. For purposes of this Agreement, “cause” shall mean (x)
the breach of a material obligation of Optionee under any agreement between
Optionee and the Company, (y) gross negligence or willful or intentional
wrongdoing or misconduct on the part of Optionee, or (z) Optionee’s conviction
of a felony offense or a crime involving moral turpitude.
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(b) Optionee
further agrees that the Option granted herein shall be subject to the
requirement that if at any time the administrator of the Plan shall determine,
in its discretion, that the listing, registration or qualification of the shares
of Stock subject to such Option upon any securities exchange or market or under
any state or federal law, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition of, or in connection
with, the purchase or issuance of shares of Stock hereunder, such Option may not
be exercised in whole or in part unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not reasonably acceptable to the administrator of the
Plan.
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13. Governing
Law. This Agreement and all actions taken hereunder shall be
governed by and construed in accordance with the laws of the State of
Delaware.
IN
WITNESS WHEREOF, the Company has caused this Agreement to be duly executed and
Optionee has executed this Agreement as of the day and year first above
written.
Lexicon
Pharmaceuticals, Inc.
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By:
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Xxxxxx
X. Xxxxx, M.D., Ph.D.
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President
and Chief Executive Officer
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Optionee
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[Name]
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