CUBIST PHARMACEUTICALS, INC.
INCENTIVE STOCK OPTION AGREEMENT
This INCENTIVE STOCK OPTION AGREEMENT, dated as of May 19, 1997 (this
"Agreement"), is between CUBIST PHARMACEUTICALS, INC., a Delaware corporation
(the "Company"), and Xxxx X. Xxxxxx (the "Optionee").
1. Grant of Option. Pursuant to the Company's Amended and Restated 1993
Stock Option Plan, a copy of which is attached hereto as Exhibit A (the "Plan"),
the Company grants to the Optionee an option (the "Option") to purchase from the
Company all or any part of a total of 200,000 shares (the "Optioned Shares") of
the Company's common stock, $.001 par value (the "Stock"), at a price of $8.00
per share. This Option is granted as of May 19, 1997 (the "Grant Date").
2. Character of Option. This Option is intended to be treated as an
"incentive stock option" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code").
3. Duration of Option. Unless subject to earlier expiration or termination
pursuant to the terms of the Plan, this Option shall expire on May 18, 2007.
4. Exercise of Option. Until its expiration, this Option may be exercised,
in the manner specified in Sections 7.4 and 9 of the Plan, in those amounts of
the Optioned Shares identified in the table below, in full or in part, within
the exercise period set opposite each such amount; provided, however, that,
after termination of the Optionee's employment with the Company, this Option
shall, until its expiration, be exercisable only to the extent exercisable
immediately prior to such termination:
CUMULATIVE OPTIONED EXERCISE PERIOD FOR
SHARES EXERCISABLE OPTIONED SHARES
------------------- -------------------
10,000 05/19/97-07/10/97
21,875 07/11/97-10/10/97
33,750 10/11/97-01/10/98
45,625 01/11/98-04/10/98
57,500 04/11/98-07/10/98
CUMULATIVE OPTIONED EXERCISE PERIOD FOR
SHARES EXERCISABLE OPTIONED SHARES
(Continued) (Continued)
------------------- -------------------
69,375 07/11/98-10/08/98
81,250 10/11/98-01/10/99
93,125 01/11/99-04/10/99
105,000 04/11/99-07/10/99
116,875 07/11/99-10/10/99
128,750 10/11/99-01/10/00
140,625 01/11/00-04/10/00
152,500 04/11/00-07/10/00
164,375 07/11/00-10/10/00
172,250 10/11/00-01/10/01
188,125 01/11/01-04/10/01
200,000 04/11/01-05/18/07
5. Transfer of Options. This Option may not be transferred except by will
or the laws of decent and distribution and, during the lifetime of the
Optionee, may be exercised only by the Optionee. Notwithstanding the
foregoing, in the event that this Option ceases to qualify as an "incentive
stock option" within the meaning of Section 422 of the Code for any reason
other than a transfer or exercise of this Option in violation of the
provisions set forth in the first sentence of this Section 5, then this
Option may be transferred to a third party subject to, and in accordance
with, the provisions of Section 14 of the Plan. The restrictions on
transferability set forth in this Section 5 shall in no way preclude the
Holder (as defined in Section 1.14 of the Plan) of this Option from effecting
"cashless" exercises of this Option pursuant to, and in accordance with,
Section 9(b) of the Plan.
6. Incorporation of Plan Terms. This Option is granted subject to all of
the applicable terms and provisions of the Plan, including, but not limited
to, the limitations on the Company's obligation to deliver Optioned Shares
upon exercise set forth in Section 10 (Restrictions on Issue of Shares),
Section 11 (Purchase for Investment; Subsequent Registration) and Section 12
(Withholding; Notice of Disposition of Stock Prior to Expiration of Specified
Holding Period).
7. Miscellaneous. This Agreement shall be construed and enforced in
accordance with the laws of the Commonwealth of Massachusetts and shall be
binding upon and inure to the benefit of any successor or assign of the
Company and any executor, administrator, trustee, guardian, or other legal
representative of the Optionee.
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IN WITNESS WHEREOF, the parties have executed this Agreement as a sealed
instrument as of the date first above written.
CUBIST PHARMACEUTICALS, INC. OPTIONEE
By: /s/ Xxxxx X. Xxxxxxxx /s/ Xxxx X. Xxxxxx
------------------------- ------------------------------
Xxxxx X. Xxxxxxxx Xxxx X. Xxxxxx
President and CEO 00 Xxxxx Xxxx
Xxxxxxx, XX 00000
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