VERSICOR INC.
INCENTIVE STOCK OPTION AGREEMENT
1. GRANT OF OPTION. Versicor Inc. a Delaware corporation (the
"Company"), hereby grants to the person (the "Optionee") listed on the above
Grant Summary an option, pursuant to the Company's 1995 Stock Option Plan
(the "Plan"), to purchase up to the number of shares of common stock ("Common
Stock"), of the Company at a price of $0.01 par value per share as set forth
on the Grant Summary as Total Shares at price per share set forth on the
Grant Summary as the Option Price. The shares of Common Stock subject to this
option purchasable as set forth in and subject to the terms and conditions of
this option and the Plan. Except where the context otherwise requires, the
term "Company" shall include the parent and all present and future
subsidiaries of the Company as defined in Sections 424(e) and 424(f) of the
Internal Revenue Code of 1986, as amended or replaced from time to time (the
"Code").
2. INCENTIVE STOCK OPTION. This option is intended to qualify as an
incentive stock option ("Incentive Stock Option") within the meaning of
Section 422 of the Code.
3. EXERCISE OF OPTION AND PROVISIONS FOR TERMINATION.
(a) VESTING SCHEDULE. Except as otherwise provided in this
Agreement, this option may be exercised prior to the tenth anniversary of the
date of grant (hereinafter the "Expiration Date") to purchase, from and after
each date set forth under the column entitled "Full Vest Date" on the
attached Grant Summary Table, the number of shares of Common Stock set forth
opposite such date. The right of exercise shall be cumulative so that if the
option is not exercised to the maximum extent permissible during any exercise
period, it shall be exercisable, in whole or in part, with respect to all
shares not so purchased at any time prior to the Expiration Date or the
earlier termination of this option. This option may not be exercised at any
time on or after the Expiration Date.
(b) EXERCISE PROCEDURE. Subject to the conditions set forth in
this Agreement, this option shall be exercised by the Optionee's delivery of
written notice of exercise to the Treasurer of the Company, specifying the
number of shares to be purchased and the purchase price to be paid therefor
and accompanied by payment in full in accordance with Section 4. Such
exercise shall be effective upon receipt by the Treasurer of the Company of
such written notice together with the required payment. The Optionee may
purchase less than the number of shares covered hereby, provided that no
partial exercise of this option may be for any fractional share or for fewer
than ten whole shares.
(c) CONTINUOUS EMPLOYMENT REQUIRED. Except as otherwise
provided in this Section 3, this option may not be exercised unless the
Optionee, at the time he or she exercises this option, is, and has been at
all times since the date of grant of this option, an employee of the Company.
For all purposes of this option, (i) "employment" shall be defined in
accordance with the provisions of Section 1.421-7(h) of the Income Tax
Regulations or any successor regulations, and (ii) if this option shall be
assumed or a new option substituted therefor in a transaction to
which Section 424(a) of the Code applies, employment by such assuming or
substituting corporation (hereinafter called the "Successor Corporation")
shall be considered for all purposes of this option to be employment by the
Company.
(d) EXERCISE PERIOD UPON TERMINATION OF EMPLOYMENT. If the
Optionee ceases to be employed by the Company for any reason, then, except as
provided in paragraphs (e) and (f) below, the right to exercise this option
shall terminate three months after such cessation (but in no event after the
Expiration Date), PROVIDED THAT this option shall be exercisable only to the
extent that the Optionee was entitled to exercise this option on the date of
such cessation. The Company's obligation to deliver shares upon the exercise
of this option shall be subject to the satisfaction of all applicable
federal, state and local income and employment tax withholding requirements,
arising by reason of this option being treated as a non-statutory option or
otherwise.
(e) EXERCISE PERIOD UPON DEATH OR DISABILITY. If the Optionee
dies or becomes disabled (within the meaning of Section 22(e)(3) of the Code)
prior to the Expiration Date while he or she is an employee of the Company,
or if the Optionee dies within three months after the Optionee ceases to be
an employee of the Company (other than as the result of a discharge for
cause" as specified in paragraph (f) below), this option shall be
exercisable, within the period of one year following the date of death or
disability of the Optionee (but in no event after the Expiration Date), by
the Optionee or by the person to whom this option is transferred by will or
the laws of descent and distribution, PROVIDED THAT this option shall be
exercisable only to the extent that this option was exercisable by the
Optionee on the date of his or her death or disability. Except as otherwise
indicated by the context, the term "Optionee", as used in this option, shall
be deemed to include the estate of the Optionee or any person who acquires
the right to exercise this option by bequest or inheritance or otherwise by
reason of the death of the Optionee.
(f) DISCHARGE FOR CAUSE. If the Optionee, prior to the
Expiration Date, is discharged by the Company for "cause" (as defined below),
the right to exercise this Option shall terminate immediately upon such
cessation of employment. "Cause" shall mean willful misconduct in connection
with the Optionee's employment or willful failure to perform his or her
employment responsibilities in the best interests of the Company (including,
without limitation, breach by the Optionee of any provision of any
employment, nondisclosure, non-competition or other similar agreement between
the Optionee and the Company), as determined by the Company, which
determination shall be conclusive. The Optionee shall be considered to have
been discharged "for cause" if the Company determines, within 30 days after
the Optionee's resignation, that discharge for cause was warranted.
4. PAYMENT OF PURCHASE PRICE.
(a) METHOD OF PAYMENT. Payment of the purchase price for
shares purchased upon exercise of this option shall be made (i) by delivery
to the Company of cash or a check to the order of the Company in an amount
equal to the purchase price of such shares, (ii) subject to the consent of
the Company, by delivery to the Company of shares of Common Stock of the
Company then owned by the Optionee having a fair market value equal in amount
to the purchase price of such shares, (iii) by any other means which the
Board of Directors determines are consistent with the purpose of the Plan and
with applicable laws and regulations (including, without limitation, the
provisions of Rule 16b-3 under the Securities Exchange Act of 1934 and
Regulation T promulgated by the Federal Reserve Board), or (iv) by any
combination of such methods of payment.
(b) VALUATION OF SHARES OR OTHER NON-CASH CONSIDERATION
TENDERED IN PAYMENT OF PURCHASE PRICE. For the purposes hereof, the fair
market value of any share of the Company's Common Stock or other non-cash
consideration which may be delivered to the Company in exercise of this
option shall be determined in good faith by the Board of Directors of the
Company.
(c) DELIVERY OF SHARES TENDERED IN PAYMENT OF PURCHASE PRICE.
If the Optionee exercises options by delivery of shares of Common Stock of
the Company, the certificate or certificates representing the shares of
Common Stock of the Company to be delivered shall be duly executed in blank
by the Optionee or shall be accompanied by a stock power duly executed in
blank suitable for purposes of transferring such shares to the Company.
Fractional shares of Common Stock of the Company will not be accepted in
payment of the purchase price of shares acquired upon exercise of this option.
(d) RESTRICTIONS ON USE OF OPTION STOCK. Notwithstanding the
foregoing, no shares of Common Stock of the Company may be tendered in
payment of the purchase price of shares purchased upon exercise of this
option if the shares to be so tendered were acquired within twelve (12)
months before the date of such tender, through the exercise of an option
granted under the Plan or any other stock option or restricted stock plan of
the Company.
5. DELIVERY OF SHARES, COMPLIANCE WITH SECURITIES LAWS ETC.
(a) GENERAL. The Company shall, upon payment of the option
price for the number of shares purchased and paid for, make prompt delivery
of such shares to the Optionee, PROVIDED that if any law or regulation
requires the Company to take any action with respect to such shares before
the issuance thereof, then the date of delivery of such shares shall be
extended for the period necessary to complete such action.
(b) LISTING, QUALIFICATION, ETC. This option shall be subject
to the requirement that if, at any time, counsel to the Company shall
determine that the listing, registration or qualification of the shares
subject hereto upon any securities exchange or under any state or federal
law, or the consent or approval of any governmental or regulatory body, or
that the disclosure of non-public information or the satisfaction of any
other condition is necessary as a condition of, or in connection with, the
issuance or purchase of shares hereunder, this option may not be exercised,
in whole or in part, unless such listing, registration, qualification,
consent or approval, disclosure or satisfaction of such other condition shall
have been effected or obtained on terms acceptable to the Board of Directors.
Nothing herein shall be deemed to require the
Company to apply for, effect or obtain such listing, registration,
qualification, or disclosure, or to satisfy such other condition.
6. NONTRANSFERABILITY OF OPTION. Except as provided in paragraph
(e) of Section 3, this option is personal and no rights granted hereunder may
be transferred, assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise) nor shall any such rights be subject to
execution, attachment or similar process. Upon any attempt to transfer,
assign, pledge, hypothecate or otherwise dispose of this option or of such
rights contrary to the provisions hereof, or upon the levy of any attachment
or similar process upon this option or such rights, this option and such
rights shall, at the election of the Company, become null and void.
7. NO SPECIAL EMPLOYMENT RIGHTS. Nothing contained in the Plan or
this option shall be construed or deemed by any person under any
circumstances to bind the Company to continue the employment of the Optionee
for the period within which this option may be exercised.
8. RIGHTS AS A SHAREHOLDER. The Optionee shall have no rights as
a shareholder with respect to any shares which may be purchased by exercise
of this option (including, without limitation, any rights to receive
dividends or non-cash distributions with respect to such shares) unless and
until a certificate representing such shares is duly issued and delivered to
the Optionee. No adjustment shall be made for dividends or other rights for
which the record date is prior to the date such stock certificate is issued.
9. ADJUSTMENT PROVISIONS.
(a) GENERAL. If, through, or as a result of, any merger,
consolidation, sale of all or substantially all of the assets of the Company,
reorganization, recapitalization, reclassification, stock dividend, stock
split, reverse stock split or other similar transaction, (i) the outstanding
shares of Common Stock are increased or decreased or are exchanged for a
different number or kind of shares or other securities of the Company, or
(ii) additional shares or new or different shares or other securities of the
Company or other non-cash assets are distributed with respect to such shares
of Common Stock or other securities, the Optionee shall, with respect to this
option or any unexercised portion hereof, be entitled to the rights and
benefits, and be subject to the limitations, set forth in Section 15(a) of
the Plan.
(b) BOARD AUTHORITY TO MAKE ADJUSTMENTS. Any adjustments
under this Section 9 will be made by the Board of Directors, whose
determination as to what adjustments, if any, will be made and the extent
thereof will be final, binding and conclusive. No fractional shares will be
issued pursuant to this option on account of any such adjustments.
(c) LIMITS ON ADJUSTMENTS. No adjustment shall be made
under this Section 9 which would, within the meaning of any applicable
provision of the Code, constitute a modification, extension or renewal of
this option or a grant of additional benefits to the Optionee.
10. MERGERS, CONSOLIDATION, DISTRIBUTIONS, LIQUIDATIONS ETC.
(a) In the event of a consolidation or merger or sale of
all or substantially all of the assets of the Company in which outstanding
shares of Common Stock are exchanged for securities, cash or other property
of any other corporation or business entity, or in the event of a liquidation
of the Company, prior to the Expiration Date or termination of this option,
the Optionee shall, with respect to this option or any unexercised portion
hereof, be entitled to the rights and benefits, and be subject to the
limitations, set forth in Section 16(a) of the Plan.
(b) Notwithstanding any other provision of this
Agreement, in the event of the sale of all or substantially all of the
business or assets of the Company by merger, sale of assets or otherwise, the
exercise dates of all options then outstanding shall be accelerated in full
and any restrictions on exercising outstanding options issued pursuant to
this Agreement prior to any given date shall terminate.
11. WITHHOLDING TAXES. The Company's obligation to deliver shares
upon the exercise of this option shall be subject to the Optionee's
satisfaction of all applicable federal, state and local income and employment
tax withholding requirements.
12. LIMITATIONS ON DISPOSITION OF INCENTIVE STOCK OPTION SHARES.
It is understood and intended that this option shall qualify as an "incentive
stock option" as defined in Section 422 of the Code. Accordingly, the
Optionee understands that in order to obtain the benefits of an incentive
stock option under Section 421 of the Code, no sale or other disposition may
be made of any shares acquired upon exercise of the option within one year
after the day of the transfer of such shares to him, nor within two years
after the grant of the option. If the Optionee intends to dispose, or does
dispose (whether by sale, exchange, gift, transfer or otherwise), of any such
shares within said periods, he or she will notify the Company in writing
within ten days after such disposition.
13. INVESTMENT REPRESENTATIONS, LEGENDS.
(a) REPRESENTATIONS. The Optionee represents, warrants and
covenants that:
(i) Any shares purchased upon exercise of this option
shall be acquired for the Optionee's account for investment
only and not with a view to, or for sale in connection with,
any distribution of the shares in violation of the Securities
Act of 1933 (the "Securities Act") or any rule or regulation
under the Securities Act.
(ii) the Optionee has had such opportunity as he or she
has deemed adequate to obtain from representatives of the
Company such information as is necessary to permit the
Optionee to evaluate the merits and risks of his or her
investment in the Company.
(iii) the Optionee is able to bear the economic risk of
holding shares acquired pursuant to the exercise of this
option for an indefinite period.
(iv) The Optionee understands that (a) the shares acquired
pursuant to the exercise of this option will not be registered
under the Securities Act and are "restricted securities"
within the meaning of Rule 144 under the Securities Act; (b)
such shares cannot be sold, transferred or otherwise disposed
of unless they are subsequently registered under the
Securities Act or an exemption from registration is then
available; (c) in any event, an exemption from registration
under Rule 144 or otherwise under the Securities Act may not
be available for at least two years and even then will not be
available unless a public market then exists for the Common
Stock, adequate information concerning the Company is then
available to the public and other terms and conditions of Rule
144 are complied with; and (D) there is now no registration
statement on file with the Securities and Exchange Commission
with respect to any stock of the Company and the Company has
no obligation or current intention to register any shares
acquired pursuant to the exercise of this option under the
Securities Act.
(v) The Optionee agrees that, if the Company offers for
the first time any of its Common Stock for sale pursuant to a
registration statement under the Securities Act, the Optionee
will not, without the prior written consent of the Company,
publicly offer, sell, contract to sell or otherwise dispose
of, directly or indirectly, any shares purchased upon exercise
of this option for a period of 90 days after the effective
date of such registration statement.
By making payment upon exercise of this option, the Optionee shall be deemed to
have reaffirmed, as of the date of such payment, the representations made in
this Section 13.
(b) LEGENDS ON STOCK CERTIFICATES. All stock certificates
representing shares of Common Stock issued to the Optionee upon exercise of
this option shall have affixed thereto legends substantially in the following
forms, in addition to any other legends required by applicable state law:
"The shares of stock represented by this certificate have not
been registered under the Securities Act of 1933 and may not
be transferred, sold or otherwise disposed of in the absence
of an effective registration statement with respect to the
shares evidenced by this certificate, filed and made effective
under the Securities Act of 1933, or an opinion of counsel
satisfactory to the Company to the effect that registration
under such Act is not required."
"The shares of stock represented by this certificate are
subject to certain restrictions on transfer contained in an
Option Agreement, a copy of which will be furnished upon
request by the issuer.
14. NONCOMPETITION/NONSOLICITATION. Optionee agrees that for a
period of one (1) year from the date of termination, the Optionee will not,
directly or indirectly:
(i) as an individual proprietor, partner, stockholder, officer, employee,
director, joint venturer, investor, lender, consultant or in any other
capacity whatsoever, develop, design, produce, market, sell or render, or
assist any other person in developing, designing, producing, marketing,
selling or rendering) products or services competitive with those developed,
designed, produced,
marketed, sold or rendered by the Company while Optionee was employed by (or,
acting as a consultant to) the Company; or
(ii) solicit, divert, or take away, or attempt to divert or to take away, the
business or patronage of any of the clients, customer or accounts, or
prospective clients, customers or accounts, of the Company which were
contacted, solicited or served by the Optionee while employed by (or, acting
as a consultant to) the Company.
15. MISCELLANEOUS.
(a) Except as provided herein, this option may not be
amended or otherwise modified unless evidenced in writing and signed by the
Company and the Optionee.
(b) All notices under this option shall be mailed or
delivered by hand to the parties at their respective addresses set forth
beneath their names below or at such other address as may be designated in
writing by either of the parties to one another.
(c) This option shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts.
