EXHIBIT 4(a)
GENOME THERAPEUTICS CORP.
STOCK OPTION AGREEMENT
(Non-Statutory Option)
NON-STATUTORY STOCK OPTION granted by Genome Therapeutics Corp., a Massachusetts
corporation (the "Company"), to ___________, an employee of the Company (the
"Optionee").
1. GRANT OF OPTION
This agreement evidences the grant by the Company to the Optionee of an option
to purchase, on the terms provided herein, a total of __________ shares of the
Company's Common Stock, $.10 par value ("Common Stock"), at a price of $_____
per share. This option does not constitute an incentive stock option within the
meaning of Section 422A of the Internal Revenue Code. This option is subject to
earlier termination as provided in Sections 5, 6 and 7 below. Subject to the
other terms hereof, an aggregate of ________ shares of Common Stock subject to
this option shall become exercisable with respect to _________ of such shares on
December 16 in each of 2000, 2001, 2002 and 2003. Subject to the other terms
hereof, the remaining ___________ shares subject to this option shall become
exercisable as follows: as to ____________ shares if the average closing price
of the Common Stock as reported on the NASDAQ National Market ("NASDAQ") (or
such other principal securities exchange as the Common Stock may be traded) for
a period of ten (10) out of twenty (20) consecutive trading days after the date
of grant is $8.00 or higher; and as to the remaining ___________ shares if the
average closing price of the Common Stock as reported on NASDAQ (or such other
principal securities exchange as the Common Stock may be traded) for a period of
ten (10) out of twenty (20) consecutive trading days after the date of grant is
$10.00 or higher.
2. EXERCISE OF OPTION
Each election to exercise this option shall be in writing, signed by the
Optionee or by his executor or administrator or the person or persons to whom
this option is transferred by will or the applicable laws of descent and
distribution (the "Legal Representative"), and received by the Company at its
principal office in Waltham, Massachusetts, accompanied by this agreement and
payment in full as provided in Section 3 below. In the event the option is
exercised by such Legal Representative, the Company shall be under no obligation
to deliver stock hereunder unless and until the Company is satisfied that the
person or persons exercising the option is or are the duly appointed executor or
administrator of the deceased Optionee or the person or persons to whom this
option has been transferred by Optionee's will or by the applicable laws of
descent and distribution.
3. PAYMENT FOR STOCK
Shares shall be issued only upon receipt by the Company of full payment of the
purchase price for the shares as to which the option is exercised. The purchase
price is payable by the Optionee to the Company either (i) in cash or by
certified check or cashier's check payable to the order of the Company; or (ii)
through the delivery of shares of Common Stock (duly owned by the Optionee and
as to which the Optionee has good title free and clear of any liens and
encumbrances) having a fair market value (as determined by the Board of
Directors of the Company) equal to the purchase price; or (iii) by a combination
of cash and Common Stock as provided above. The Company will not be obligated to
deliver any shares unless and until, in the opinion of the Company's counsel,
all applicable federal and state laws and regulations have been complied with,
nor, in the event the outstanding common stock is at the time listed upon any
stock exchange, unless and until the shares to be delivered have been listed or
authorized to be added to the list upon official notice of legal matters in
connection with the issuance and delivery of shares have been approved by the
Company's counsel. Without limiting the generality of the foregoing, the Company
may require from the Optionee such investment representation or such agreement,
if any, as counsel for the Company may consider necessary in order to comply
with the Securities Act of 1933, as amended and may require that the Optionee
agree that he will notify the Company when he makes any disposition of the
shares whether by sale, gift or otherwise. The Company will use its best efforts
to effect any such compliance or listing, and the Optionee will take any action
reasonably requested by the Company in such connection. The Optionee will have
the rights of a shareholder only as to shares actually acquired by him upon
exercise of the option granted hereby.
4. NON-TRANSFERABILITY OF OPTION
This option may not be transferred by the Optionee otherwise than by will or by
the laws of descent and distribution; and during the Optionee's lifetime this
option may be exercised only by him.
5. TERMINATION OF SERVICE
If the Optionee ceases to be an employee of the Company for any reason other
than his death, he may thereafter exercise this option to the extent he was
entitled to exercise them on the date when his service terminated, but only
within three months after the date of such termination (unless a longer period
is allowed by the Board of Directors of the Company). In no event, however, may
the Optionee exercise this option at a time when they would not be exercisable
had the Optionee's service as an employee continued. For purposes of this
provision, the Optionee's service as an employee will not be considered
terminated in the case of a bona fide leave of absence approved by the Board of
Directors of the Company.
6. DEATH
If the Optionee dies at a time when he is entitled to exercise this option, then
at any time or times within three years after his death (or such longer period
as the Board of Directors of the Company may allow) such option may be
exercised, as to all or any of the shares that the Optionee was entitled to
purchase immediately prior to his death, by his executor or administrator or the
person or persons to whom the option is transferred by will or the applicable
laws of descent and distribution, and except as so exercised such option will
expire at the end of such period. In no event, however, may this option be
exercised after the termination of the option.
7. CHANGE OF CONTROL
In the event of a Change of Control of the Company, this option shall
immediately vest, provided that the undersigned remains employed by the Company
at least 120 days following such Change of Control. For purposes of the
Agreement, "Change of Control" shall mean (i) the acquisition of 35% or more of
the outstanding common stock of the Company by a person, group, or entity; (ii)
a merger or other business combination in which the Company is not the surviving
corporation; or (iii) diminution of employment status in either responsibility
or compensation as a direct result of a Change in Control.
8. ADMINISTRATION
The option granted by this agreement will be administered by the Board of
Directors of the Company which will have the authority to interpret this
agreement and to decide all questions and settle all controversies and dispute
which may arise in connection therewith. All decisions, determinations and
interpretations of the Board of Directors will be binding on all parties
concerned. A majority of the members of the Board of Directors will constitute a
quorum, and all determinations of the Board of Directors will be made by a
majority of its members. Any determination of the Board of Directors under this
agreement may be made without notice or meeting of the Board of Directors by a
written instrument signed by a majority of the members of the Board of
Directors.
9. STOCK TO BE DELIVERED
Stock to be delivered upon exercised of this option will be common stock of the
Company and may constitute an original issue of authorized but unissued stock or
may consist of previously issued stock acquired by the Company as determined
from time to time by the Board of Directors. The Board of Directors and the
proper officers of the Company will take any appropriate action required for
such delivery.
10. CHANGES IN STOCK
In the event of a stock dividend, split-up or combination of shares,
recapitalization or merger in which the Company is the surviving corporation, or
other similar capital change, the number and kind of shares of stock or
securities of the Company subject to the option granted hereby, the option price
and other relevant provisions will be appropriately adjusted by the Board of
Directors of the Company, whose determination will be binding on the Optionee.
In the event of a consolidation or merger in which the Company is not the
surviving corporation, or in the event of complete liquidation of the Company,
the option granted hereby will thereupon terminate, provided that at least
twenty days prior to the effective date of any such consolidation or merger, the
Board of Directors shall either (a) make the option granted hereby immediately
exercisable, or (b) arrange to have the surviving corporation grant a
replacement option to the Optionee.
11. AMENDMENTS
The Board of Directors of the Company may at any time or times amend the option
granted hereby for the purpose of satisfying the requirements of any changes in
applicable laws or regulations or for any other purpose which may at the time be
permitted by law, provided that (except to the extent explicitly required or
permitted hereinabove) no such amendment will, without the approval of the
stockholders of the Company, (a) increase the number of shares issuable upon
exercise of the option, (b) reduce the exercise price of the option, (c) extend
the period within which the option may be exercised, or (d) amend the provisions
of this Section 11, and no such amendment will adversely affect the rights of
the Optionee without his consent.
12. GOVERNING LAW
This agreement shall be governed by and construed in accordance with the
internal laws of The Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the Company has caused this agreement
to be executed by its duly authorized officer, under its corporate seal. This
option is granted at the Company's office, on the date stated below.
GENOME THERAPEUTICS CORP.
By:___________________________
Chairman
Date: As of _______________
Accepted and Agreed:
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[Optionee]
