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EXHIBIT 10.12
CAMBRIDGE NEUROSCIENCE, INC.
1992 DIRECTOR STOCK OPTION PLAN
The purpose of the 1992 Director Stock Option Plan (the "Plan") of
CAMBRIDGE NEUROSCIENCE, INC. (the "Company") is to attract and retain highly
qualified non-employee Directors of the Company and to encourage ownership of
stock of the Company by such Directors so as to provide additional incentives to
promote the success of the Company.
1. ADMINISTRATION OF THE PLAN.
The Plan shall be administered by the Board of Directors of the Company
(the "Board"). The Board shall have authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the operation of the
Plan as it shall from time to time consider advisable, and to interpret the
provisions of the Plan. The Board's decision shall be final and binding. To the
extent permissible by law, the Board may delegate to a committee consisting of
one or more Directors appointed by the Board the power to grant stock options to
Eligible Directors (defined below) pursuant to Section 6(a) hereof and to make
all determinations under the Plan with respect thereto.
2. PERSONS ELIGIBLE TO PARTICIPATE IN THE PLAN.
All Directors of the Company who are not employees of the Company or
employees of or otherwise affiliated with any corporation or entity which owns
more than five percent (5%) of the capital stock of the Company (an "Affiliated
Entity") or any subsidiary of the Company or any Affiliated Entity shall be
eligible to participate in the Plan (an "Eligible Director").
3. SHARES SUBJECT TO THE PLAN.
(a) The aggregate number of Shares of the Company which may be optioned
under this Plan is 100,000 shares. Shares issued under the Plan may consist in
whole or in part of authorized but unissued shares or treasury shares.
(b) In the event of a stock dividend, split-up, combination or
reclassification of shares, recapitalization or other similar capital change
relating to the Company's Common Stock, the maximum aggregate number and kind of
shares or securities of the Company as to which options may be granted under
this Plan and as to which options then outstanding shall be exercisable, and the
option price of such options shall be appropriately adjusted so that the
proportionate number of shares or other securities as to which options may be
granted and the proportionate interest of holders of outstanding options shall
be maintained as before the occurrence of such event.
(c) In the event of a consolidation or merger of the Company with another
corporation where the Company's stockholders do not own a majority in interest
of the surviving or resulting corporation, or the sale or exchange of all or
substantially all of the assets of the Company, or a reorganization or
liquidation of the Company, any deferred exercise period shall be automatically
accelerated and each holder of an outstanding option shall be entitled to
receive upon exercise and payment in accordance with the terms of the option the
same shares, securities or property as he would have been entitled to receive
upon the occurrence of such event if he had been, immediately prior to such
event, the holder of the number of shares of Common Stock purchasable under his
or her option; provided, however, that in lieu of the foregoing the Board may
upon written notice to each holder of an outstanding option or right under the
Plan, provide that such option or right shall terminate on a date not less than
20 days after the date of such notice unless theretofore exercised.
(d) Whenever options under this Plan lapse or terminate or otherwise become
unexercisable the shares of Common Stock which were subject to such options may
again be subjected to options under this
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Exhibit 10.12
Plan. The Company shall at all times while this Plan is in force reserve such
number of shares of Common Stock as will be sufficient to satisfy the
requirements of this Plan.
4. NON-STATUTORY STOCK OPTION.
All options granted under this Plan shall be non-statutory options not
entitled to special tax treatment under Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code").
5. FORM OF OPTIONS.
Options granted hereunder shall be in substantially such form as the Board
or any committee appointed pursuant to Section 1 above may from time to time
determine.
6. GRANT OF OPTIONS AND OPTION TERMS.
(a) Automatic Initial Grants of Options. At each annual meeting of the
stockholders of the Company following the approval of this Plan by the
stockholders, each Director elected for the first time as a Director at that
meeting who is eligible to receive options to purchase Common Stock under this
Plan shall automatically be granted options to purchase 20,000 shares of Common
Stock under the Plan. In addition, upon the initial election of a Director who
is eligible to receive options to purchase Common Stock (whether by the Board of
Directors or the stockholders and whether to fill a vacancy or otherwise), such
Director shall automatically be granted options to purchase 20,000 shares of
Common Stock under the Plan. The "Date of Grant" for options granted under this
Section 6(a) shall be the date of election of an Eligible Director as a
Director. No options shall be granted hereunder after ten years from the date on
which this Plan was initially approved by the stockholders.
(b) Discretionary Grants of Options. Subject to the provisions of the Plan,
the Board may from time to time, in its discretion, grant options to Eligible
Directors and determine the number of shares to be covered by each such option,
subject to Section 6(c)-(h) below. The Board may impose such conditions with
respect to the exercise of options, including but not limited to conditions
relating to applicable federal or state securities laws, as it considers
necessary or advisable. The "Date of Grant" for options granted under this
Section 6(b) shall be the date on which such options are granted by the Board.
No options shall be granted hereunder after ten years from the date on which
this Plan was initially approved by the stockholders.
(c) Option Price. The option price for each option granted under this Plan
shall be the last sale price for the Company's Common Stock as reported by the
National Association of Securities Dealers Automated Quotations National Market
System for the business day on the Date of Grant.
(d) Term of Option. The term of each option granted under this Plan shall
be ten years from the Date of Grant.
(e) Exercisability of Options. Options granted under this Plan shall become
exercisable with respect to twenty-five percent of the shares on the first
anniversary of the Date of Grant and as to 6.25% of the shares quarterly
thereafter.
(f) General Exercise Terms. Directors holding exercisable options under
this Plan who cease to serve as members of the Board may, during their lifetime,
exercise the rights they had under such options at the time they ceased being a
Director for the full unexpired term of such option. Any rights that have not
yet become exercisable shall terminate upon cessation of membership on the
Board. Upon the death of a Director, those entitled to do so shall have the
right, at any time within twelve months after the date of death, to exercise in
whole or in part any rights which were available to the Director at the time of
his or her death. The rights of the option holder may be exercised by the
holder's guardian or legal representative
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in the case of disability and by the beneficiary designated by the holder in
writing delivered to the Company or, if none has been designated, by the
holder's estate or his or her transferee on death in accordance with this Plan,
in the case of death. Options granted under the Plan shall terminate, and no
rights thereunder may be exercised, after the expiration of the applicable
exercise period. Notwithstanding the foregoing provisions of this section, no
rights under any options may be exercised after the expiration of ten years from
their Date of Grant.
(g) Method of Exercise and Payment. Options may be exercised only by
written notice to the Company at its office accompanied by payment of the full
option price for the shares of Common Stock as to which they are exercised. The
option price shall be paid in cash or by check or in shares of Common Stock of
the Company, or in any combination thereof. Shares of Common Stock surrendered
in payment of the option price shall have been held by the person exercising the
option for at least six months, unless otherwise permitted by the Board. The
value of shares delivered in payment of the option price shall be their fair
market value, as determined in accordance with Section 6(c) above, as of the
date of exercise. Upon receipt of such notice and payment, the Company shall
promptly issue and deliver to the optionee (or other person entitled to exercise
the option) a certificate or certificates for the number of shares as to which
the exercise is made.
(h) Non-transferability. Options granted under this Plan shall not be
transferable by the holder thereof otherwise than by will or the laws of descent
and distribution or as permitted by Rule 16b-3 (or any successor provision)
under the Securities Exchange Act of 1934, as amended ("Rule 16b-3").
7. LIMITATION OF RIGHTS.
(a) No Right to Continue as a Director. Neither the Plan, nor the granting
of an option or any other action taken pursuant to the Plan, shall constitute an
agreement or understanding, express or implied, that the Company will retain an
option holder as a Director for any period of time or at any particular rate of
compensation.
(b) No Stockholders' Rights for Options. A Director shall have no rights as
a stockholder with respect to the shares covered by options until the date the
Director exercises such options and pays the option price to the Company, and no
adjustment will be made for dividends or other rights for which the record date
is prior to the date such option is exercised and paid for.
8. AMENDMENT OR TERMINATION.
The Board may amend or terminate this Plan at any time, provided that, to
the extent necessary to comply with Rule 16b-3, this Plan shall not be amended
more than once every six months, other than to comport with changes in the Code,
ERISA or the rules thereunder.
9. STOCKHOLDER APPROVAL.
This Plan is subject to approval by the stockholders of the Company by the
affirmative vote of the holders of a majority of the shares of Common Stock of
the Company present, or represented and entitled to vote, at a meeting duly held
in accordance with the laws of Delaware. In the event such approval is not
obtained, all options granted under this Plan shall be void and without effect.
10. GOVERNING LAW.
The Plan shall be governed by and interpreted in accordance with the laws
of the State of Delaware.
As Amended through April 28, 1997
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