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Exhibit 4.1
NEUROCRINE BIOSCIENCES, INC.
AMENDED 1992 INCENTIVE STOCK PLAN
(as amended May 27, 1997
and May 27, 1998)
1 Purpose of the Plan. The purposes of this Incentive Stock Plan are to
attract and retain the best available personnel, to provide additional incentive
to the employees of Neurocrine Biosciences, Inc. (the "Company") and to promote
the success of the Company's business.
Options granted hereunder may be either Incentive Stock Options or
Nonstatutory Stock Options, at the discretion of the Board and as reflected in
the terms of the written option agreement. The Board also has the discretion to
grant Stock Purchase Rights.
2 Definitions.
2.1 "Board" shall mean the Committee, if one has been appointed, or
the Board of Directors of the Company, if no Committee is appointed.
2.2 "Code" shall mean the Internal Revenue Code of 1986, as amended.
2.3 "Committee" shall mean the Committee appointed by the Board of
Directors in accordance with Section 4(a) of the Plan, if one is appointed.
2.4 "Common Stock" shall mean the Common Stock of the Company.
2.5 "Company" shall mean Neurocrine Biosciences, Inc.
2.6 "Consultant" shall mean any person who is engaged by the Company
or any Parent or Subsidiary to render consulting services and is compensated for
such consulting services, and any director of the Company whether compensated
for such services or not.
2.7 "Continuous Status as an Employee or Consultant" shall mean the
absence of any interruption or termination of service as an Employee or
Consultant, as applicable. Continuous Status as an Employee or Consultant shall
not be considered interrupted in the case of sick leave, military leave, or any
other leave of absence approved by the Board; provided that such leave is for a
period of not more than 90 days or reemployment upon the expiration of such
leave is guaranteed by contract or statute.
2.8 "Employee" shall mean any persons, including officers and
directors, employed by the Company or any Parent or Subsidiary of the Company.
The payment of a director's fee by the Company shall not be sufficient to
constitute "employment" by the Company.
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2.9 "Incentive Stock Option" shall mean an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code.
2.10 "Nonstatutory Stock Option" shall mean an Option not intended
to qualify as an Incentive Stock Option.
2.11 "Option" shall mean a stock option granted pursuant to the
Plan.
2.12 "Optioned Stock" shall mean the Common Stock subject to an
Option or Stock Purchase Right.
2.13 "Optionee" shall mean an Employee or Consultant who receives an
Option.
2.14 "Parent" shall mean a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
2.15 "Plan" shall mean this 1992 Incentive Stock Plan.
2.16 "Purchaser" shall mean an Employee or Consultant who exercises
a Stock Purchase Right.
2.17 "Share" shall mean a share of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.
2.18 "Stock Purchase Right" shall mean a right to purchase Common
Stock pursuant to the Plan or the right to receive a bonus of Common Stock for
past services.
2.19 "Subsidiary" shall mean a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 424(f) of the Code.
3 Stock Subject to the Plan. Subject to the provisions of Section 11 of the
Plan, the maximum aggregate number of shares under the Plan is 4,700,000 shares
of Common Stock. The Shares may be authorized but unissued, or reacquired Common
Stock.
If an Option or Stock Purchase Right should expire or become unexercisable
for any reason without having been exercised in full, then the unpurchased
Shares which were subject thereto shall, unless the Plan shall have been
terminated, become available for future grant or sale under the Plan.
Notwithstanding any other provision of the Plan, shares issued under the Plan
and later repurchased by the Company shall not become available for future grant
or sale under the Plan.
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4 Administration of the Plan.
4.1 Procedure.
(a) Multiple Administrative Bodies. The Plan may be administered
by different Committees with respect to different groups of Employees and
Consultants.
(b) Section 162(m). To the extent that the Administrator
determines it to be desirable to qualify Options granted hereunder as
"performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.
(c) Rule 16b-3. To the extent desirable to qualify transactions
hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder
shall be structured to satisfy the requirements for exemption under Rule 16b-3.
(d) Other Administration. Other than as provided above, the Plan
shall be administered by (A) the Board or (B) a Committee, which committee shall
be constituted to satisfy applicable laws.
4.2 Powers of the Board. Subject to the provisions of the Plan, the
Board shall have the authority, in its discretion: (i) to grant Incentive Stock
Options, Nonstatutory Stock Options or Stock Purchase Rights; (ii) to determine,
upon review of relevant information and in accordance with Section 7 of the
Plan, the fair market value of the Common Stock; (iii) to determine the exercise
price per share of Options or Stock Purchase Rights, to be granted, which
exercise price shall be determined in accordance with Section 7 of the Plan;
(iv) to determine the Employees or Consultants to whom, and the time or times at
which, Options or Stock Purchase Rights shall be granted and the number of
shares to be represented by each Option or Stock Purchase Right; (v) to
interpret the Plan; (vi) to prescribe, amend and rescind rules and regulations
relating to the Plan; (vii) to determine the terms and provisions of each Option
and Stock Purchase Right granted (which need not be identical) and, with the
consent of the holder thereof, modify or amend any provisions (including
provisions relating to exercise price) of any Option or Stock Purchase Right;
(viii) to accelerate or defer (with the consent of the Optionee) the exercise
date of any Option, consistent with the provisions of Section 5 of the Plan;
(ix) to authorize any person to execute on behalf of the Company any instrument
required to effectuate the grant of an Option or Stock Purchase Right previously
granted by the Board; (x) to allow Optionees to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option or Stock Purchase Right that number of Shares
having a Fair Market Value equal to the amount required to be withheld. The Fair
Market Value of the Shares to be withheld shall be determined on the date that
the amount of tax to be withheld is to be determined. All elections by an
Optionee to have Shares withheld for this purpose shall be made in such form and
under such conditions as the Administrator may deem necessary or advisable; and
(xi) to make all other determinations deemed necessary or advisable for the
administration of the Plan.
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4.3 Effect of Board's Decision. All decisions, determinations and
interpretations of the Board shall be final and binding on all Optionees,
Purchasers and any other holders of any Options or Stock Purchase Rights granted
under the Plan.
5 Eligibility.
5.1 Options and Stock Purchase Rights may be granted to Employees
and Consultants, provided that Incentive Stock Options may only be granted to
Employees. An Employee or Consultant who has been granted an Option or Stock
Purchase Right may, if such Employee or Consultant is otherwise eligible, be
granted additional Option(s) or Stock Purchase Right(s).
5.2 Each Option shall be designated in the written option agreement
as either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate fair market
value of the Shares with respect to which Options designated as Incentive Stock
Options are exercisable for the first time by any Optionee during any calendar
year (under all plans of the Company) exceeds $100,000, such Options shall be
treated as Nonstatutory Stock Options.
5.3 For purposes of Section 5(b), Options shall be taken into
account in the order in which they were granted, and the fair market value of
the Shares shall be determined as of the time the Option with respect to such
Shares is granted.
5.4 The Plan shall not confer upon any Optionee or holder of a Stock
Purchase Right any right with respect to continuation of employment by or the
rendition of consulting services to the Company, nor shall it interfere in any
way with his or her right or the Company's right to terminate his or her
employment or services at any time, with or without cause.
5.5 The following limitations shall apply to grants of Options to
Employees:
(a) No Employee shall be granted, in any fiscal year of the
Company, Options to purchase more than 250,000 Shares.
(b) In connection with his or her initial employment, an
Employee may be granted Options to purchase up to an additional 250,000 Shares
which shall not count against the limit set forth in subsection (i) above.
(c) The foregoing limitations shall be adjusted proportionately
in connection with any change in the Company's capitalization as described in
Section 11.
(d) If an Option is canceled in the same fiscal year of the
Company in which it was granted (other than in connection with a transaction
described in Section 12), the canceled Option shall be counted against the limit
set forth in subsection (i) above. For this purpose, if the exercise price of an
Option is reduced, such reduction will be treated as a cancellation of the
Option and the grant of a new Option.
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6 Term of Plan. The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval by vote of
holders of a majority of the outstanding shares of the Company entitled to vote
on the adoption of the Plan. It shall continue in effect for a term of ten (10)
years unless sooner terminated under Section 13 of the Plan.
7 Exercise Price and Consideration.
7.1 The per Share exercise price for the Shares to be issued
pursuant to exercise of an Option or Stock Purchase Right shall be such price as
is determined by the Board, but shall be subject to the following:
(a) In the case of an Incentive Stock Option;
i. granted to an Employee who, at the time of grant of such
Incentive Stock Option, owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than 110% of the fair
market value per Share on the date of grant.
ii. granted to any other Employee, the per Share exercise
price shall be no less than 100% of the fair market value per Share on the date
of grant.
(b) In the case of a Nonstatutory Stock Option or a Stock
Purchase Right, the per Share exercise price shall be no less than 85% of the
fair market value per Share on the date of grant. In the case of a Nonstatutory
Stock Option intended to qualify as "performance-based compensation" within the
meaning of Section 162(m) of the Code, the per Share exercise price shall be no
less than 100% of the Fair Market Value per Share on the date of grant.
(c) Notwithstanding the foregoing, Options may be granted with a
per Share exercise price of less than 100% of the Fair Market Value per Share on
the date of grant pursuant to a merger or other corporate transaction.
For purposes of this Section 7(a), in the event that an Option or
Stock Purchase Right is amended to reduce the exercise price, the date of grant
of such Option or Stock Purchase Right shall thereafter be considered to be the
date of such amendment.
7.2 The fair market value shall be determined by the Board in its
discretion; provided, however, that where there is a public market for the
Common Stock, the fair market value per Share shall be the mean of the bid and
asked prices (or the closing price per share if the Common Stock is listed on
the National Association of Securities Dealers Automated Quotation ("NASDAQ")
National Market System) of the Common Stock for the date of grant, as reported
in the Wall Street Journal (or, if not so reported, as otherwise reported by the
NASDAQ System) or, in the event the Common Stock is listed on a stock exchange,
the fair market value per Share shall be the closing price on such exchange on
the date of grant of the Option or Stock Purchase Right, as reported in the Wall
Street Journal.
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7.3 The consideration to be paid for the Shares to be issued upon
exercise of an Option or Stock Purchase Right, including the method of payment,
shall be determined by the Board (and in the case of an Incentive Stock Option,
shall be determined at the time of grant) and may consist entirely of cash,
check, promissory note, other Shares of Common Stock which (i) either have been
owned by the Optionee for more than six (6) months on the date of surrender or
were not acquired directly or indirectly, from the Company, and (ii) have a fair
market value on the date of surrender equal to the aggregate exercise price of
the Shares as to which said Option shall be exercised, or any combination of
such methods of payment, or such other consideration and method of payment for
the issuance of Shares to the extent permitted under Sections 408 and 409 of the
California General Corporation Law. In making its determination as to the type
of consideration to accept, the Board shall consider if acceptance of such
consideration may be reasonably expected to benefit the Company (Section 315(b)
of the California General Corporation Law).
8 Options.
8.1 Term of Option. The term of each Option shall be the term stated
in the Option Agreement; provided, however, that the term shall be no more than
ten (10) years from the date of grant thereof. In the case of an Incentive Stock
Option granted to an Optionee who, at the time the Option is granted, owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the term of the Option shall
be five (5) years from the date of grant thereof or such shorter term as may be
provided in the Option Agreement.
8.2 Exercise of Option.
(a) Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Board, including performance criteria with respect to the
Company and/or the Optionee, and as shall be permissible under the terms of the
Plan, but in no case at a rate of less than 20% per year over five (5) years
from the date the Option is granted.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may, as authorized by the Board, consist of any
consideration and method of payment allowable under Section 7 of, the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Sock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock certificate promptly upon exercise of the Option. In the
event that the exercise of a Nonstatutory Stock Option pursuant to Section 5(b),
the Company shall issue a separate stock certificate evidencing the Shares
treated as acquired upon exercise of an Incentive
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Stock Option and a separate stock certificate evidencing the Shares treated as
acquired upon exercise of a Nonstatutory Stock Option and shall identify each
such certificate accordingly in its stock transfer records. No adjustment will
be made for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in Section 11 of the
Plan.
Exercise of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) Termination of Status as an Employee or Consultant. In the
event of termination of an Optionee's Continuous Status as an Employee or
Consultant (as the case may be), such Optionee may, but only within such period
of time as is determined by the Board, with such determination in the case of an
Incentive Stock Option not exceeding three (3) months and in the case of
Nonstatutory Stock Option not exceeding six (6) months after the date of
termination, with such determination in the case of an Incentive Stock Option
being made at the time of grant of the Option, exercise the Option to the extent
that such Employee or Consultant was entitled to exercise it at the date of such
termination (but in no event later than the date of expiration of the term of
such Option as set forth in the Option Agreement). To the extent that such
Employee or Consultant was not entitled to exercise the Option at the date of
such termination, or if such Employee or Consultant does not exercise such
Option (which such Employee or Consultant was entitled to exercise) within the
time specified herein, the Option shall terminate.
(c) Disability of Optionee. Notwithstanding the provisions of
Section 8(b)(ii) above, in the event of termination of an Optionee's Continuous
Status as an Employee or Consultant as a result of such Employee's or
Consultant's total and permanent disability (as defined in Section 22(e)(3) of
the Code), such Employee or Consultant may, but only within six (6) months (or
such other period of time not exceeding twelve (12) months as in determined by
the Board, with such determination in the case of an Incentive Stock Option
being made at the time of grant of the Option) from the date of such termination
(but in no event later than the date of expiration of the term of such Option as
set forth in the Option Agreement), exercise the Option to the extent such
Employee or Consultant was entitled to exercise it at the date of such
termination. To the extent that such Employee or Consultant was not entitled to
exercise the Option at the date of termination, or if such Employee or
Consultant does not exercise such Option (which such Employee or Consultant was
entitled to exercise) within the time specified herein, the Option shall
terminate.
(d) Death of Optionee. In the event of the death of an Optionee:
i. during the term of the Option who is at the time of his
or her death an Employee or Consultant of the Company and who shall have been in
Continuous Status as an Employee or Consultant since the date of grant of the
Option, the Option may be exercised, at any time within six (6) months (but in
no event later than the date of expiration of the term of such Option as set
forth in the Option Agreement), by the Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only to
the extent that the right to exercise would have accrued had the
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Optionee continued living and remained in Continuous Status as an Employee or
Consultant six (6) months (or such other period of time as in determined by the
Board at the time of grant of the Option) after the date of death; or
ii. within thirty (30) days (or such other period of time
not exceeding three (3) months as is determined by the Board, with such
determination in the case of an Incentive Stock Option being made at the time of
grant of the Option) after the termination of Continuous Status as an Employee
or Consultant, the Option may be exercised, at any time within six (6) months
(or such other period of time as is determined by the Board at the time of grant
of the Option) following the date of death (but in no event later than the date
of expiration of the term of such Option as set forth in the Option Agreement),
by the Optionee's estate or by a person who acquired the right to exercise the
Option by bequest or inheritance, but only to the extent of the right to
exercise that had accrued at the date of termination.
9 Stock Purchase Rights.
9.1 Rights to Purchase. After the Board of Directors determines that
it will offer an Employee or Consultant a Stock Purchase Right, it shall deliver
to the offeree a stock purchase agreement or stock bonus agreement, as the case
may be, setting forth the terms, conditions and restrictions relating to the
offer, including the number of Shares which such person shall be entitled to
purchase, and the time within which such person must accept such offer, which
shall in no event exceed six (6) months from the date upon which the Board of
Directors or its Committee made the determination to grant the Stock Purchase
Right. The offer shall be accepted by execution of a stock purchase agreement or
stock bonus agreement in the from determined by the Board of Directors.
9.2 Issuance of Shares. Forthwith after payment therefor, the Shares
purchased shall be duly issued; provided, however, that the Board may require
that the Purchaser make adequate provision for any Federal and State withholding
obligations of the Company as a condition to the Purchaser purchasing such
Shares.
9.3 Repurchase Option. Unless the Board determines otherwise, the
stock purchase agreement or stock bonus agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the Purchaser's employment with the Company for any reason (including death or
disability). If the Board so determines, the purchase price for shares
repurchased may be paid by cancellation of any indebtedness of the Purchaser to
the Company. The repurchase option shall lapse at such rate as the Board may
determine.
9.4 Other Provisions. The stock purchase agreement or stock bonus
agreement shall contain such other terms, provisions and conditions not
inconsistent with the Plan as may be determined by the Board of Directors.
10 Non-Transferability of Options and Stock Purchase Rights. Unless
determined otherwise by the Administrator, an Option or Stock Purchase Right may
not be sold, pledged, assigned, hypothecated,
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transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee. If the Administrator makes an Option or Stock
Purchase Right transferable, such Option or Stock Purchase Right shall contain
such additional terms and conditions as the Administrator deems appropriate.
11 Adjustments upon Changes in Capitalization or Merger.
11.1 Changes in Capitalization. Subject to any required action by
the shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option or Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company. The conversion of any convertible securities of
the Company shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Board, whose determination
in that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an Option or Stock Purchase Right.
11.2 Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify the
Optionee or Purchaser at least fifteen (15) days prior to such proposed action.
To the extent it has not been previously exercised, the Option or Stock Purchase
Right shall terminate immediately prior to the consummation of such proposed
action.
(a) Merger or Asset Sale. In the event of a merger, sale of all
or substantially all of the assets of the Company, tender offer or other
transaction or series of related transactions resulting in a change of ownership
of more than 50% of the voting securities of the Company ("Change in Control"),
approved by the majority of the members of the Board on the Board prior to the
commencement of such Change in Control, each outstanding Option shall be assumed
or an equivalent option or right substituted by the successor corporation or a
Parent or Subsidiary of the successor corporation; provided however, in the
event that within one year of the date of the completion of the Change in
Control, the successor corporation or a Parent or Subsidiary of the successor
corporation terminates the employment of an Optionee without Cause (as defined
below), such Optionee shall fully vest in and have the right to exercise the
options assumed or substituted for the Option as to all of the Optioned Stock,
including Shares as to which it would not otherwise be exercisable. In the event
that the successor corporation refuses to assume or substitute for the Option,
the Optionee shall fully vest in and have the right to exercise the Option as to
all of the Optioned Stock, including Shares as to which it would not otherwise
be exercisable. If an Option becomes fully vested and exercisable in lieu of
assumption or substitution in the event of a Change of Control, the
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Administrator shall notify the Optionee in writing or electronically that the
Option shall be fully vested and exercisable for a period of fifteen (15) days
from the date of such notice, and the Option shall terminate upon the expiration
of such period. For the purposes of this paragraph, the Option shall be
considered assumed if, following the Change of Control, the option confers the
right to purchase, for each Share of Optioned Stock subject to the Option
immediately prior to the Change in Control, the consideration (whether stock,
cash, or other securities or property) received in the Change of Control by
holders of Common Stock for each Share held on the effective date of the
transaction (and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the Change of Control
is not solely common stock of the successor corporation or its Parent, the
Administrator may, with the consent of the successor corporation, provide for
the consideration to be received upon the exercise of the Option, for each Share
of Optioned Stock subject to the Option, to be solely common stock of the
successor corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the Change of Control. For
purposes of this paragraph, termination shall be for "Cause" in the event of the
occurrence of any of the following: (a) any intentional action or intentional
failure to act by employee which was performed in bad faith and to the material
detriment of the successor corporation or its Parent or Subsidiary; (b) employee
willfully and habitually neglects the duties of employment; or (c) employee is
convicted of a felony crime involving moral turpitude, provided that in the
event that any of the foregoing events is capable of being cured, the successor
corporation or its Parent or Subsidiary shall provide written notice to the
employee describing the nature of such event and the employee shall thereafter
have five (5) business days to cure such event.
In the event of a Change in Control which is not approved by the
majority of the members of the Board on the Board prior to the commencement of a
Change in Control, each Optionee shall fully vest in and have the right to
exercise all outstanding Options as to all of the Optioned Stock, including
Shares as to which it would not otherwise be exercisable.
12 Date of Granting Options. The date of grant of an Option or Stock
Purchase Right shall, for all purposes, be the date on which the Board makes the
determination granting such Option or stock Purchase Right. Notice of the
determination shall be given to each Employee or Consultant to whom an Option or
Stock Purchase Right is so granted within a reasonable time after the date of
such grant.
13 Amendment and Termination of the Plan.
13.1 Amendment and Termination. The Administrator may at any time
amend, alter, suspend or discontinue the Plan, but no amendment, alteration,
suspension or discontinuation shall be made which would impair the rights of any
Optionee under any grant theretofore made, without his or her consent. In
addition, to the extent necessary and desirable to comply with Section 422 of
the Code (or any other Applicable Laws or regulation, the requirements of the
NASD or an established stock exchange), the Company shall obtain shareholder
approval of any Plan amendment in such a manner and to such a degree as
required.
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13.2 Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options or Stock Purchase Rights
already granted, and such Options and Stock Purchase Rights shall remain in full
force and effect as if this Plan had not been amended or terminated, unless
mutually agreed otherwise between the Optionee and the Administrator, which
agreement must be in writing and signed by the Optionee and the Company.
14 Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option or Stock Purchase Rights unless the
exercise of such Option or Stock Purchase Rights and the issuance and delivery
of such Shares pursuant thereto shall comply with all relevant provisions of
law, including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the Shares may then be listed, and
shall be further subject to the approval of counsel for the Company with respect
to such compliance.
As a condition to the exercise of an Option or Stock Purchase Right, the
Company may require the person exercising such Option or Stock Purchase Right to
represent and warrant at the time of any such exercise that the Shares are being
purchased only for investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required by any of the aforementioned relevant provisions of
law.
15 Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company's counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.
16 Option, Stock Purchase and Stock Bonus Agreements. Options shall be
evidenced by written option agreements in such form as the Board shall approve.
Upon the exercise of Stock Purchase Rights, the Purchaser shall sign a stock
purchase agreement or stock bonus agreement in such form as the Board shall
approve.
17 Shareholder Approval. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such shareholder approval shall be obtained
in the degree and manner required under Applicable Laws and the rules of any
stock exchange upon which the Common Stock is listed.
18 Information to Optionees and Purchasers. The Company shall provide to
each Optionee and Purchaser, during the period for which such Optionee or
Purchaser has one or more Options to Stock Purchase Rights outstanding, a
balance sheet and an income statement at least annually. The Company shall not
be required to provide such information to key employees whose duties in
connection with the Company assure there access to equivalent information.
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NEUROCRINE BIOSCIENCES, INC.
STOCK OPTION AGREEMENT
Unless otherwise defined herein, the terms defined in the Amended 1992
Incentive Stock Plan (the "Plan") shall have the same defined meanings in this
Option Agreement.
I. NOTICE OF STOCK OPTION GRANT
[Optionee's Name and Address]
You have been granted an option to purchase Common Stock of the Company,
subject to the terms and conditions of the Plan and this Option Agreement, as
follows:
Grant Number _______________________________________
Date of Grant _______________________________________
Vesting Commencement Date _________________________
Exercise Price per Share $________________________
Total Number of Shares Granted _________________________
Total Exercise Price $________________________
Type of Option: ___ Incentive Stock Option
___ Nonstatutory Stock Option
Term/Expiration Date: ________________________
Vesting Schedule:
This Option may be exercised, in whole or in part, in accordance with
the following schedule:
[25% of the Shares subject to the Option shall vest twelve months after
the Vesting Commencement Date, and 1/48 of the Shares subject to the Option
shall vest each month thereafter, subject to the Optionee continuing to be an
Employee or Consultant on such dates].
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Termination Period:
This Option may be exercised for thirty (30) days (or such other period
of time not exceeding six (6) months, as is determined by the Board) after
Optionee's Continuous Status as an Employee or Consultant terminates. Upon the
death or Disability of the Optionee, this Option may be exercised for six (6)
months after Optionee's Continuous Status as an Employee or Consultant. In no
event shall this Option be exercised later than the Term/Expiration Date as
provided above.
II. AGREEMENT
1. Grant of Option. The Plan Administrator of the Company hereby grants
to the Optionee named in the Notice of Grant attached as Part I of this
Agreement (the "Optionee") an option (the "Option") to purchase the number of
Shares, as set forth in the Notice of Grant, at the exercise price per share set
forth in the Notice of Grant (the "Exercise Price"), subject to the terms and
conditions of the Plan, which is incorporated herein by reference. Subject to
Section 13(b) of the Plan, in the event of a conflict between the terms and
conditions of the Plan and the terms and conditions of this Option Agreement,
the terms and conditions of the Plan shall prevail.
If designated in the Notice of Grant as an Incentive Stock Option
("ISO"), this Option is intended to qualify as an Incentive Stock Option under
Section 422 of the Code. However, if this Option is intended to be an Incentive
Stock Option, to the extent that it exceeds the $100,000 rule of Code Section
422(d) it shall be treated as a Nonstatutory Stock Option ("NSO").
2. Exercise of Option.
(a)Right to Exercise. This Option is exercisable during its term
in accordance with the Vesting Schedule set out in the Notice of Grant and the
applicable provisions of the Plan and this Option Agreement.
(b)Method of Exercise. This Option is exercisable by delivery of
an exercise notice, in the form attached as Exhibit A (the "Exercise Notice"),
which shall state the election to exercise the Option, the number of Shares in
respect of which the Option is being exercised (the "Exercised Shares"), and
such other representations and agreements as may be required by the Company
pursuant to the provisions of the Plan. The Exercise Notice shall be completed
by the Optionee and delivered to the President, the Chief Financial Officer or
Secretary of the Company. The Exercise Notice shall be accompanied by payment of
the aggregate Exercise Price as to all Exercised Shares. This Option shall be
deemed to be exercised upon receipt by the Company of such fully executed
Exercise Notice accompanied by such aggregate Exercise Price.
No Shares shall be issued pursuant to the exercise of this Option unless
such issuance and exercise complies with Applicable Laws. Assuming such
compliance, for income tax purposes the Exercised Shares shall be considered
transferred to the Optionee on the date the Option is exercised with respect to
such Exercised Shares.
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3. Method of Payment. Payment of the aggregate Exercise Price shall be
by any of the following, or a combination thereof, at the election of the
Optionee:
(a)cash; or
(b)check; or
(c)consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan; or
(d)surrender of other Shares which (i) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six (6) months on the date of surrender, AND (ii) have a Fair Market Value
on the date of surrender equal to the aggregate Exercise Price of the Exercised
Shares;
4. Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by the Optionee. The terms
of the Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
5. Term of Option. This Option may be exercised only within the term set
out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option Agreement.
6. Entire Agreement; Governing Law. The Plan is incorporated herein by
reference. The Plan and this Option Agreement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Optionee. This agreement is governed by the internal substantive laws, but not
the choice of law rules, of California.
7. Tax Consultation. Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee's exercise of this Option or
disposition of the Shares. Optionee represents that the Company has advised
Optionee to consult with a tax consultant of Optionee's choosing in connection
with the exercise of this Option or disposition of the Shares and that Optionee
is not relying on the Company for any tax advice.
8. NO GUARANTEE OF CONTINUED SERVICE. OPTIONEE ACKNOWLEDGES AND AGREES
THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED
ONLY BY CONTINUING AS AN EMPLOYEE OR CONSULTANT AT THE WILL OF THE COMPANY (AND
NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES
HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO
NOT CONSTITUTE AN EXPRESS OR
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IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS AN EMPLOYEE OR CONSULTANT FOR THE
VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH
OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE OPTIONEE'S RELATIONSHIP AS
AN EMPLOYEE OR CONSULTANT AT ANY TIME, WITH OR WITHOUT CAUSE.
By your signature and the signature of the Company's representative
below, you and the Company agree that this Option is granted under and governed
by the terms and conditions of the Plan and this Option Agreement. Optionee has
reviewed the Plan and this Option Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understands all provisions of the Plan and Option Agreement.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Administrator upon any questions relating to the Plan
and Option Agreement. Optionee further agrees to notify the Company upon any
change in the residence address indicated below.
OPTIONEE: NEUROCRINE BIOSCIENCES, INC.
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Signature By
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Print Name Title
Residence Address
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CONSENT OF SPOUSE
The undersigned spouse of Optionee has read and hereby approves the
terms and conditions of the Plan and this Option Agreement. In consideration of
the Company's granting his or her spouse the right to purchase Shares as set
forth in the Plan and this Option Agreement, the undersigned hereby agrees to be
irrevocably bound by the terms and conditions of the Plan and this Option
Agreement and further agrees that any community property interest shall be
similarly bound. The undersigned hereby appoints the undersigned's spouse as
attorney-in-fact for the undersigned with respect to any amendment or exercise
of rights under the Plan or this Option Agreement.
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Spouse of Optionee
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EXHIBIT A
NEUROCRINE BIOSCIENCES, INC.
AMENDED 1992 INCENTIVE STOCK PLAN
EXERCISE NOTICE
Neurocrine Biosciences, Inc.
3050 Science Park Road
San Diego, CA 92121
Attention: Secretary
1. Exercise of Option. Effective as of today, ________________, 199__,
the undersigned ("Purchaser") hereby elects to purchase ______________ shares
(the "Shares") of the Common Stock of Neurocrine Biosciences, Inc. (the
"Company") under and pursuant to the Amended 1992 Incentive Stock Plan (the
"Plan") and the Stock Option Agreement dated , 19___ (the "Option Agreement").
The purchase price for the Shares shall be $ , as required by the Option
Agreement.
2. Delivery of Payment. Purchaser herewith delivers to the Company the
full purchase price for the Shares.
3. Representations of Purchaser. Purchaser acknowledges that Purchaser
has received, read and understood the Plan and the Option Agreement and agrees
to abide by and be bound by their terms and conditions.
4. Rights as Shareholder. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the Shares, no right to vote or receive dividends or
any other rights as a shareholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. The Shares so acquired shall
be issued to the Optionee as soon as practicable after exercise of the Option.
No adjustment will be made for a dividend or other right for which the record
date is prior to the date of issuance, except as provided in Section 11 of the
Plan.
5. Tax Consultation. Purchaser understands that Purchaser may suffer
adverse tax consequences as a result of Purchaser's purchase or disposition of
the Shares. Purchaser represents that the Company has advised Purchaser to
consult with a tax consultant of Purchaser's choosing in connection with the
purchase or disposition of the Shares and that Purchaser is not relying on the
Company for any tax advice.
6. Entire Agreement; Governing Law. The Plan and Option Agreement are
incorporated herein by reference. This Agreement, the Plan and the Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Purchaser with respect to the subject matter
hereof, and may not be
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modified adversely to the Purchaser's interest except by means of a writing
signed by the Company and Purchaser. This agreement is governed by the internal
substantive laws, but not the choice of law rules, of California.
Submitted by: Accepted by:
PURCHASER: NEUROCRINE BIOSCIENCES, INC.
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Signature By
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Print Name Its
Address: Address:
Neurocrine Biosciences, Inc.
3050 Science Park Road
San Diego, CA 92121
----------------------------------------
Date Received
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