Exhibit 99.12
DISCOVERY LABORATORIES, INC.
STOCK OPTION ASSUMPTION AGREEMENT
Optionee: 1~
STOCK OPTION ASSUMPTION AGREEMENT issued as of the 16th day of June,
1998 by Discovery Laboratories, Inc., a Delaware corporation ("Discovery").
WHEREAS, the undersigned individual ("Optionee") holds one or more
outstanding options to purchase shares of the common stock of Acute
Therapeutics, Inc., a Delaware corporation ("ATI"), which were granted to
Optionee under the ATI 1996 Stock Option/Stock Issuance Plan (the "Plan"), and
are evidenced by a Stock Option Agreement (the "Option Agreement") between ATI
and Optionee.
WHEREAS, ATI has been acquired by Discovery through the merger of a
wholly-owned Discovery subsidiary ("Acquisition Sub") with and into ATI (the
"Merger") pursuant to the Agreement and Plan of Merger dated as of March 5, 1998
by and among Discovery, ATI, Acquisition Sub and certain shareholders of ATI
(the "Merger Agreement").
WHEREAS, the provisions of the Merger Agreement require Discovery to
assume all obligations of ATI under all options outstanding under the Plan at
the consummation of the Merger and to issue to the holder of each outstanding
option an agreement evidencing the assumption of such option.
WHEREAS, pursuant to the provisions of the Merger Agreement, the
exchange ratio (the "Exchange Ratio") in effect for the Merger is 3.90 shares of
Discovery common stock (the "Discovery Stock") for each outstanding share of ATI
common stock (the "ATI Stock").
WHEREAS, this Agreement is to become effective immediately upon the
consummation of the Merger (the "Effective Time") in order to reflect certain
adjustments to Optionee's outstanding options under the Plan which have become
necessary by reason of the assumption of those options by Discovery in
connection with the Merger.
NOW, THEREFORE, it is hereby agreed as follows:
1. The stock options held by Optionee under the Plan immediately
prior to the Effective Time (the "ATI Options") and the exercise price payable
per share are set forth in Exhibit A hereto. Discovery hereby assumes, as of the
Effective Time, all the duties and obligations of ATI under each of the ATI
Options. In connection with such assumption, the number of shares of Discovery
Stock purchasable under each ATI Option hereby assumed and the exercise price
payable thereunder have been adjusted to reflect the Exchange Ratio at which
shares of ATI Stock were converted into shares of Discovery Stock in
consummation of the Merger. Accordingly, the number of shares of Discovery Stock
subject to each ATI Option hereby assumed shall be as specified for that option
in attached Exhibit B, and the adjusted
exercise price payable per share of Discovery Stock under the assumed ATI Option
shall be as indicated for that option in attached Exhibit B.
2. The intent of the foregoing adjustments to each assumed ATI
Option is to assure that the spread between the aggregate fair market value of
the shares of Discovery Stock purchasable under each such option and the
aggregate exercise price as adjusted pursuant to this agreement will,
immediately after the consummation of the Merger, equal the spread which
existed, immediately prior to the Merger, between the then aggregate fair market
value of the ATI Stock subject to the ATI Option and the aggregate exercise
price in effect at such time under the Option Agreement. Such adjustments are
also designed to preserve, immediately after the Merger, on a per share basis,
the same ratio of exercise price per option share to fair market value per share
which existed under the ATI Option immediately prior to the Merger.
3. The following provisions shall govern each ATI Option hereby
assumed by Discovery:
(a) Unless the context otherwise requires, all
references to the "Corporation" in each Option Agreement and in the
Plan shall mean Discovery, all references to "Common Stock" shall
mean shares of Discovery Stock, and all references to the "Board" or
the "Committee" shall mean the Board of Directors of Discovery or
the Compensation Committee of such Board.
(b) The grant date and the expiration date of each
assumed ATI Option and all other provisions which govern either the
exercisability or the termination of the assumed ATI Option shall
remain the same as set forth in the Option Agreement applicable to
that option and shall accordingly govern and control Optionee's
rights under this Agreement to purchase Discovery Stock.
(c) Each assumed ATI Option shall continue to vest and
become exercisable in accordance with the same vesting/exercise
schedule in effect under the applicable Option Agreement immediately
prior to the Effective Time, with the number of shares of Discovery
Stock subject to each such installment adjusted to reflect the
Exchange Ratio. Accordingly, no accelerated vesting of the ATI
Options shall be deemed to automatically occur by reason of the
Merger.
(d) For purposes of applying any and all provisions of
the Option Agreement relating to Optionee's "Service" with ATI,
Optionee shall be deemed to continue in Service for so long as
Optionee renders services as an employee, non-employee Board member
or consultant or independent advisor to Discovery or any present or
future Discovery subsidiary, including (without limitation) ATI.
(e) The adjusted exercise price payable for the
Discovery Stock subject to each assumed ATI Option shall be payable
in any of the forms authorized under the Option Agreement applicable
to that option.
2.
(f) In order to exercise each assumed ATI Option,
Optionee must deliver to Discovery a written notice of exercise in
which the number of shares of Discovery Stock to be purchased
thereunder must be indicated. The exercise notice must be
accompanied by payment of the adjusted exercise price payable for
the purchased shares of Discovery Stock and should be delivered to
Discovery at the following address:
Discovery Laboratories, Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Option Plan Administrator
4. Except to the extent specifically modified by this Option
Assumption Agreement, all of the terms and conditions of each Option Agreement
as in effect immediately prior to the Merger shall continue in full force and
effect and shall not in any way be amended, revised or otherwise affected by
this Stock Option Assumption Agreement.
3.
IN WITNESS WHEREOF, Discovery Laboratories, Inc. has caused this
Stock Option Assumption Agreement to be executed on its behalf by its
duly-authorized officer as of the 16th day of June, 1998.
DISCOVERY LABORATORIES, INC.
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing Stock Option
Assumption Agreement and understands that all rights and liabilities with
respect to each of his or her ATI Options hereby assumed by Discovery
Laboratories, Inc. are as set forth in the Option Agreement, the Plan and such
Stock Option Assumption Agreement.
___________________________________________
1~, OPTIONEE
DATED: __________________, 199__
4.
EXHIBIT A
Optionee's Outstanding Options to Purchase Shares of
Acute Therapeutics, Inc.
Common Stock (Pre-Merger)
Number of Option Shares Exercise Price
----------------------- --------------
2~ 3~
EXHIBIT B
Optionee's Outstanding Options to Purchase Shares of
Discovery Laboratories, Inc.
Common Stock (Post-Merger)
Number of Option Shares Exercise Price
----------------------- --------------
4~ 5~
