EXHIBIT 99.3
EMPLOYEE STOCK OPTION AGREEMENT
EMPLOYEE STOCK OPTION AGREEMENT, dated as of [DATE OF GRANT], 20__
(this "Agreement"), by and between INHIBITEX, INC., a Delaware corporation (the
"Company"), and ___________ (the "Optionee").
RECITALS:
WHEREAS, the Company has adopted the Amended and Restated 2004 Stock
Incentive Plan (the "Plan") to provide long-term performance incentives to those
employees, contractors and consultants of the Company and its Subsidiaries who
are largely responsible for the management, growth and protection of the
business of the Company and its Subsidiaries; and
WHEREAS, the Company desires to grant to the Optionee an option (the
"Option") to purchase a number of shares of the common stock, $0.001 par value,
of the Company (the "Stock") pursuant to the Plan and on the terms and
conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the Company and the Optionee hereby
agree as follows:
Section 1. Grant of Option. The Company hereby grants to the Optionee,
pursuant to the Plan and on the terms and conditions set forth herein, an Option
to purchase that number of shares of Stock and at the exercise price as set
forth on Schedule A hereto.
(a) Except as otherwise may be provided in Section 2, the Option
hereby granted shall vest in installments as provided on Schedule A.
Notwithstanding the foregoing, in the event of a Change of Control, if the
Optionee has been employed by the Company:
(i) For less than six (6) months on the date of the Change of
Control, the Option shall vest as to that number of whole shares of Stock
(rounding down) as is equal to twenty-five percent (25%) of the number of
unvested shares subject to the Option.
(ii) For six (6) months or more but less than twelve (12) months,
the Option shall vest as to that number of whole shares of Stock (rounding down)
as is equal to fifty percent (50%) of the number of unvested shares subject to
the Option.
(iii) For twelve (12) months or more but less than twenty-four
(24) months, the Option shall vest as to that number of whole shares of Stock
(rounding down) as is equal to seventy-five percent (75%) of the number of
unvested shares subject to the Option.
(iv) For twenty-four (24) months or more, the Option shall vest
as to that number of whole shares of Stock (rounding down) as is equal to
one-hundred percent (100%) of the number of unvested shares subject to the
Option.
(b) Any shares of Stock subject to the Option that remain unvested
after a Change of Control shall vest in installments as provided on Schedule A,
except that "the number of shares subject to the Option" shall be the number of
shares of Stock subject to the Option that remain unvested after the Change of
Control, if any.
(c) If so designated on Schedule A hereto, this Option is intended to
be an Incentive Stock Option within the meaning of Section 422 of the Code.
Section 2. Term of Option. Unless earlier terminated pursuant to the
other provisions herein, the Option hereby granted shall terminate at the close
of business on the date six (6) years from the date of this Agreement (the
"Expiration Date").
(a) In addition, at the close of business on the date the Optionee's
employment with the Company or any Subsidiary terminates for any reason
whatsoever (other than by reason of death, Disability or Retirement), the Option
shall terminate as to that number of shares of Stock as to which the Option is
not vested on that date.
(b) If the Optionee's employment is terminated for Cause, the
unexercised portion of the Option will terminate immediately upon the Optionee's
termination of employment.
(c) If the Optionee's employment with the Company or any Subsidiary
terminates for any reason other than Cause, death, Disability or Retirement,
then the Option may be exercised to the extent vested on the date of the
Optionee's termination of employment at any time prior to the earlier of the
Expiration Date and three (3) months after the date of the Optionee's
termination of employment, and any part of the Option which is not so exercised
within such period shall thereupon terminate.
(d) If the Optionee's employment with the Company or any Subsidiary
terminates by reason of his or her death or Disability, then the vesting of the
Option shall accelerate such that the Option may be exercised, as to the entire
number of whole shares of Stock that are covered by the Option on the date of
the Optionee's death or Disability, at any time prior to the earlier of the
Expiration Date and twelve (12) months after the date of the Optionee's death or
Disability, and any part of the Option which is not so exercised within such
period shall thereupon terminate.
(e) If the Optionee's employment with the Company or any Subsidiary
terminates by reason of his or her Retirement, then the vesting of the Option
shall accelerate such that the Option may be exercised, as to the entire number
of whole shares of Stock that are covered by the Option on the date of the
Optionee's termination of employment, at any time prior to the earlier of the
Expiration Date and twenty-four (24) months after the date of the Optionee's
Retirement, and any part of the Option which is not so exercised within such
period shall thereupon terminate.
(f) For all purposes of this Agreement, the Optionee's employment with
the Company or any Subsidiary shall terminate at the time when the employment
relationship between the Optionee and the Company or any Subsidiary is
terminated for any reason, which time shall be conclusively determined from the
records of the Company and its Subsidiaries. No
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termination of employment shall be deemed to occur (i) when there is a
simultaneous reemployment of an Optionee by the Company or any Subsidiary, (ii)
at the discretion of the Committee, when the severance of employment is
temporary or pursuant to a leave of absence granted by the Company, and (iii) at
the discretion of the Committee, when the termination is followed by the
simultaneous establishment of a consulting relationship by the Company or a
Subsidiary with the Optionee. The Committee, in its absolute discretion, shall
determine the effect of all matters and questions relating to termination of
employment, including, but not by way of limitation, the question of whether a
termination of employment resulted from a discharge for Cause.
(g) For purposes of this Agreement, "Retirement" shall mean the
cessation of employment with the Company after an Optionee has attained age
sixty-four (64) and completed five (5) or more consecutive years of service with
the Company or any Subsidiary.
(h) For purposes of this Agreement, "Disability" shall mean
"disability" as defined in any employment agreement between the Optionee and the
Company or any Subsidiary, or if not defined therein or if there is no such
agreement, as defined in the Company's long-term disability plan.
Section 3. Manner of Exercise.
(a) To exercise the Option, the Optionee shall provide written notice
of such exercise in the form provided in Annex 1 hereto to the Secretary of the
Company at the Company's then principal office. The notice shall specify the
number of shares of Stock for which the Option is being exercised and shall be
accompanied by a payment to the Company in cash or Stock or any combination
thereof equal to the product of (i) the exercise price and (ii) the number of
shares of Stock to be purchased at that time, plus the amount of the withholding
taxes estimated in accordance with Section 6 to be due upon the purchase of such
number of shares of Stock, unless the Committee shall have consented to the
making of other arrangements with the Optionee.
(b) Delivery of the notice of exercise shall constitute an irrevocable
election to purchase the Stock specified in the notice, and the date on which
the Company receives the notice accompanied by payment in full of the exercise
price for the Stock covered by the notice and the applicable withholding taxes
shall be the date as of which the Stock so purchased shall be deemed to have
been issued.
(c) An Optionee may use other Stock that the Optionee has owned for at
least six (6) months as payment of all or any part of the exercise price, which
Stock will be valued at its Fair Market Value as of the date of exercise.
(d) To exercise the Option upon the Optionee's death, the persons who
acquire the right to exercise the Option must prove to the Committee's
satisfaction that they have duly acquired the Option and that they have paid (or
have provided for payment of) any taxes, such as estate, transfer, inheritance
or death taxes, payable with respect to the Option or to the Stock to which it
relates.
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Section 4. Transferability. If the Option hereby granted is designated
on Schedule A as an "Incentive Stock Option," the Option may only be transferred
by will or the laws of descent and distribution and may be exercised during the
Optionee's lifetime only by the Optionee. If this Option is designated on
Schedule A as a "Non-Qualified Stock Option," the Option may be transferred,
without consideration, to immediate family members (i.e., children,
grandchildren or spouse) of the Optionee, to trusts for the benefit of immediate
family members of the Optionee and to partnerships in which the only partners
are immediate family members of the Optionee. Except as permitted by the
preceding sentence, this Option may only be transferred by will or the laws of
descent and distribution and may be exercised during the Optionee's lifetime
only by the Optionee.
Section 5. [Reserved]
Section 6. Withholding Taxes.
(a) At the time of the exercise of all or any part of this Option, the
Optionee shall pay to the Company (or otherwise make arrangements satisfactory
to the Committee for the payment of) the amount of the Federal, state and local
and foreign income and employment taxes required, in the Company's sole
judgment, to be collected or withheld with respect to the exercise of the
Option. Such amount shall be paid to the Company in cash or by the surrender of
that number of whole shares of Stock with a Fair Market Value (valued on the
date of exercise) as shall be equal to, but does not exceed, the minimum
statutory amounts required to be collected or withheld by the Company with
respect to the exercise of the Option.
(b) If the Option herein granted is designated as an Incentive Stock
Option, then the Optionee agrees that at the time of any "disqualifying
disposition" (as defined in Prop. Treas. Reg. Section 1.422A-1(b)(1)) of the
Stock acquired upon exercise of this Option on or after January 1, 2003, the
Optionee shall pay to the Company (or otherwise make arrangements satisfactory
to the Committee for the payment of) the amount of the Federal, state and local
and foreign income and employment taxes required, in the Company's sole
judgment, to be collected or withheld with respect to the disqualifying
disposition of the Stock acquired upon exercise of the Option. Such amount shall
be paid to the Company in cash or by the surrender of that number of whole
shares of Stock with a Fair Market Value (valued on the date of exercise) as
shall be equal to, but does not exceed, the minimum statutory amounts required
to be collected or withheld by the Company with respect to the exercise of the
Option.
Section 7. Lock-Up Period. The Optionee agrees that, if so requested
by the Company or any representative of the underwriters (the "Managing
Underwriter") in connection with any firm commitment underwritten public
offering of any securities of the Company under the Securities Act of 1933, as
amended (the "Securities Act"), the Optionee shall not sell or otherwise
transfer any shares of Stock or other securities of the Company (other than any
securities of the Company being registered in such offering) or enter into any
swap or other arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of the Stock, without the prior written
consent of the Company and the Managing Underwriter, commencing on the initial
date that securities are offered for sale under such offering and continuing for
up to 180 days (the "Market Standoff Period") thereafter or such greater period,
not to exceed an additional twenty (20) days, in order to permit the
underwriters to issue research reports in compliance with NASD Rule 2711(f)(4).
The Optionee further
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agrees to execute promptly such agreements as may be reasonably requested by the
Managing Underwriter in connection with such offering that are not inconsistent
with this Section and that are deemed reasonably necessary by such Managing
Underwriter to further evidence or to give further effect hereto. The Company
may impose stop-transfer instructions with respect to securities subject to the
foregoing restrictions until the end of such Market Standoff Period.
Section 8. Rights in Stock Before Issuance and Delivery. No person
shall be entitled to become a stockholder of the Company, unless and until such
Stock has been issued (or deemed to have been issued) to such person as fully
paid Stock.
Section 9. No Right to Employment. Nothing contained herein shall be
construed to confer on the Optionee any right to continue as an employee of the
Company or to derogate from any right of the Company to retire, request the
resignation of or discharge the Optionee, or to lay off or require a leave of
absence of the Optionee, with or without pay, at any time, with or without
Cause.
Section 10. Qualifications to Exercise. Anything in this Agreement to
the contrary notwithstanding, in no event may the Option be exercisable if the
Company shall, at any time and in its sole discretion, determine that (a) the
listing, registration or qualification of any shares of Stock otherwise
deliverable upon such exercise, upon any securities exchange or under any state
or federal law, or (b) the consent or approval of any regulatory body, is
necessary or desirable in connection with such exercise. In such event, such
exercise shall be held in abeyance and shall not be effective unless and until
such listing, registration, qualification or approval shall have been effected
or obtained free of any conditions not acceptable to the Company.
Section 11. Conditions to Transfer. Unless the issuance of the shares
of Stock upon the exercise of the Option has been registered under the
Securities Act, the Committee may require as a condition to the right to
exercise the Option hereunder that the Company receive from the person
exercising the Option representations, warranties and agreements, at the time of
any such exercise, to the effect that the shares of Stock are being purchased
for investment only and without any present intention to sell or otherwise
distribute such shares of Stock and that such shares of Stock will not be
disposed of in transactions which, in the opinion of counsel to the Company,
would violate the registration provisions of the Securities Act and the rules
and regulations thereunder. The certificate issued to evidence such shares of
Stock shall bear appropriate legends summarizing these restrictions on the
disposition thereof.
Section 12. Entire Agreement. This Agreement and the Plan contain the
entire agreement between the parties hereto with respect to the matters
contemplated herein and supersede all prior agreements or understandings among
the parties related to such matters.
Section 13. Binding Effect. Subject to the restrictions on transfer
herein set forth, this Agreement shall be binding upon and inure to the benefit
of the Company and its successors and assigns and upon the Optionee and his or
her assigns, heirs, executors, administrators and legal representatives.
Section 14. Amendment or Modification; Waiver. This Agreement may be
amended, modified, superseded, canceled, renewed or extended, and the terms or
covenants
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hereof may be waived, only by a written instrument executed on behalf of the
Company (as authorized by the Committee) and the Optionee.
Section 15. Governing Law. This Agreement shall be construed and
enforced in accordance with the laws of the State of Delaware, without giving
effect to the principles of conflicts of law thereof.
Section 16. Defined Terms. Capitalized terms used in this Agreement
and not otherwise defined herein have the meaning ascribed to them in the Plan.
Section 17. The Plan. The Optionee acknowledges having received a copy
of the Plan. The Option herein granted is subject to all of the terms and
provisions of the Plan, all of which are hereby incorporated herein by
reference. In the event of any inconsistency between the provisions of this
Agreement and the provisions of the Plan, the provisions of the Plan shall
govern.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first set forth above.
INHIBITEX, INC.
By:
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Title:
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OPTIONEE:
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SCHEDULE A
Name of Optionee: __________________________________________
Date of Grant: _______, 20__
Option Exercise Price: $____________________ per share
Number of Shares Subject to Option: __________________________________________
The Option is designated as an ____ Incentive Stock Option ____ Non-Qualified
Stock Option
Vesting Terms: On each anniversary date of the grant of
this Option, the Option shall vest as to
that number of whole shares (rounding
down) as is equal to ____% of the number
of shares subject to the Option.
INHIBITEX, INC.
By:
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Title:
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ANNEX 1
FORM OF ELECTION TO EXERCISE
(To be executed upon exercise of Option).
The undersigned hereby elects to exercise the right pursuant to the Stock
Option Agreement, dated as of ___________, 20__, by and between Inhibitex, Inc.
(the "Company") and __________________________, to purchase _____ shares of
Stock, $0.001 par value per share (the "Shares").
Choose one or more of the following options:
_____ (i) Cash payment for __________ Shares in the amount of $____________.
_____ (ii) Payment for __________ Shares by the delivery of a certificate
representing _________ shares of Company stock. The undersigned
must tender a certificate representing the whole and/or fractional
shares of Company stock, owned by the undersigned for at least six
(6) months, required for payment of the Shares, accompanied by an
executed stock power.
_____ (iii) Payment for __________ Shares through a cashless exercise
arrangement. The undersigned's broker must forward the amount of
cash necessary to purchase the Shares and pay any withholding
taxes described in Section 6 of the Agreement. Such broker will
receive the Shares, and will forward the net proceeds of the
cashless exercise to the undersigned.
_____ (iv) Payment for __________ Shares by attestation. The undersigned must
provide a notarized statement attesting to the number of shares of
Company stock, owned by the undersigned for at least six (6)
months, that are intended to serve as payment for the Shares.
The undersigned requests that certificates for the Shares be registered in the
name of the undersigned.
Dated: _________, 20__
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Optionee
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Social Security Number
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