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Exhibit 10.3
Incentive Stock Option
Granted Under the 2004 Incentive Plan of CombinatoRx, Incorporated
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1. GRANT OF OPTION.
This certificate evidences an incentive stock option (this "Stock Option")
granted by CombinatoRx, Incorporated, a Delaware corporation (the "Company"), on
[________________] to [________________], an employee of the Company or its
subsidiaries (the "Participant") pursuant to the Company's 2004 Incentive
Plan (as from time to time in effect, the "Plan"). Under this Stock Option,
the Participant may purchase, in whole or in part, on the terms herein
provided, a total of [___]shares of common stock of the Company (the
"Shares") at $[_____] per Share, which is not less than the fair market value
of the Shares on the date of grant of this Stock Option. The latest date on
which this Stock Option, or any part thereof, may be exercised is [_________]
(1) (the "Final Exercise Date"). The Stock Option evidenced by this
certificate is intended to be an incentive stock option as defined in section
422 of the Internal Revenue Code of 1986, as amended from time to time (the
"Code").
This Stock Option is exercisable over the period of [48] months in the
following cumulative installments prior to the Final Exercise Date:
[_______] Shares on and after [___________________, 20__]; and
an additional [_______] Shares on and after each quarterly anniversary
thereafter, starting on [___________________, 20__].
Notwithstanding the foregoing, upon termination of the Participant's Employment,
any portion of this Stock Option that is not then exercisable will immediately
expire and the remainder of this Stock Option will remain exercisable for three
months (unless termination of the Participant's Employment resulted from reasons
that in the determination of the Administrator cast such discredit on the
Participant as to justify immediate forfeiture of this Stock Option, in which
case this entire Option shall immediately expire and no portion thereof shall
remain exercisable); PROVIDED, that any portion of this Stock Option held by the
Participant immediately prior to the Participant's death, to the extent then
exercisable, will remain exercisable for one year following the Participant's
death; AND FURTHER PROVIDED, that in no event shall any portion of this Stock
Option be exercisable after the Final Exercise Date.
2. EXERCISE OF STOCK OPTION.
Each election to exercise this Stock Option shall be in writing, signed by
the Participant or the Participant's executor, administrator, or legally
appointed representative (in the event of
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(1) DRAFTER'S NOTE: INSERT A DATE NOT MORE THAN TEN YEARS FROM THE GRANT
DATE (FIVE YEARS IN THE CASE OF AN ISO GRANTED TO A 10% SHAREHOLDER). THIS
RESTRICTION IS REQUIRED FOR ISO QUALIFICATION.
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the Participant's incapacity) or the person or persons to whom this Stock Option
is transferred by will or the applicable laws of descent and distribution
(collectively, the "Option Holder"), and received by the Company at its
principal office, accompanied by this certificate and payment in full as
provided in the Plan. Subject to the further terms and conditions provided in
the Plan, the purchase price may be paid as follows: (i) by delivery of cash or
check acceptable to the Administrator; (ii) through a broker-assisted exercise
program acceptable to the Administrator; (iii) through the delivery of Shares
that have been outstanding for at least six months (unless the Administrator
provides a shorter period) and that have a fair market value equal to the
exercise price, (iv) by other means acceptable to the Administrator, or (v)
through any combination of the foregoing. In the event that this Stock Option is
exercised by an Option Holder other than the Participant, the Company will be
under no obligation to deliver Shares hereunder unless and until it is satisfied
as to the authority of the Option Holder to exercise this Stock Option.
3. NOTICE OF DISPOSITION.
The person exercising this Stock Option shall notify the Company when
making any disposition of the Shares acquired upon exercise of this Stock
Option, whether by sale, gift or otherwise.
4. RESTRICTIONS ON TRANSFER OF SHARES.
If at the time this Stock Option is exercised the Company or any of its
stockholders is a party to any agreement restricting the transfer of any
outstanding shares of the Company's common stock, the Administrator may provide
that this Stock Option may be exercised only if the Shares so acquired are made
subject to the transfer restrictions set forth in that agreement (or if more
than one such agreement is then in effect, the agreement or agreements specified
by the Administrator).
5. WITHHOLDING; AGREEMENT TO PROVIDE SECURITY.
If at the time this Stock Option is exercised the Company determines that
under applicable law and regulations it could be liable for the withholding of
any federal or state tax upon exercise or with respect to a disposition of any
Shares acquired upon exercise of this Stock Option, this Stock Option may not be
exercised unless the person exercising this Stock Option remits to the Company
any amounts determined by the Company to be required to be withheld upon
exercise (or makes other arrangements satisfactory to the Company for the
payment of such taxes) and gives such security as the Company deems adequate to
meet its potential liability for the withholding of tax upon a disposition of
the Shares and agrees to augment such security from time to time in any amount
reasonably determined by the Company to be necessary to preserve the adequacy of
such security.
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6. NONTRANSFERABILITY OF STOCK OPTION.
This Stock Option is not transferable by the Participant otherwise than by
will or the laws of descent and distribution and is exercisable during the
Participant's lifetime only by the Participant (or in the event of the
Participant's incapacity, the person or persons legally appointed to act on the
Participant's behalf).
7. PROVISIONS OF THE PLAN.
This Stock Option is subject to the provisions of the Plan, which are
incorporated herein by reference. A copy of the Plan as in effect on the date of
the grant of this Stock Option has been furnished to the Participant. By
exercising all or any part of this Stock Option, the Participant agrees to be
bound by the terms of the Plan and this certificate. All initially capitalized
terms used herein will have the meaning specified in the Plan, unless another
meaning is specified herein.
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IN WITNESS WHEREOF, the Company has caused this instrument to be executed
by its duly authorized officer.
COMBINATORX, INCORPORATED
By
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Dated: [_________________]
Acknowledged and agreed:
_________________________________
[NAME OF PARTICIPANT]
Dated: [_________________]
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