Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
GENOME THERAPEUTICS CORP.
(Exact name of issuer as specified in its charter)
MASSACHUSETTS 04-2297484
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 Beaver Street
Waltham, Massachusetts 02154
(Address of Principal Executive offices including zip code)
1995 STOCK OPTION PLAN AND STOCK OPTION AGREEMENTS
(Full title of the Plan)
Fenel M. Eloi
Genome Therapeutics Corp.
100 Beaver Street
Waltham, Massachusetts 02154
(Name and address of agent for service)
(617) 893-5007
(Telephone number, including area code, of agent for service)
Please send copies of all communications to:
David C. Chapin, Esq.
Ropes & Gray
One International Place
Boston, Massachusetts 02110-2624
Telephone: (617) 951-7371
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Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
To Be To Be Price Per Offering Registration
Registered Registered Share <F1> Price <F1> Fee
Common Stock, 1,730,000 $8.188 $14,165,240 $4,292.49
$.10 par value.
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<FN>
<F1> Estimated solely for the purpose of calculating the registration fee on the
basis of the average high and low prices of the Common Stock as reported by the
National Association of Securities Dealers Automated Quotation System on
November 11, 1996. Exhibit Index can be found on page 8.
</FN>
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This is page 1 of 22 pages.
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Part II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
The Company's Annual Report on Form 10-K for the fiscal year ended
August 31, 1995, the Company's amended Annual Report on Form 10-K/A-3 for the
fiscal year ended August 31, 1995, the Company's Quarterly Report on Form 10-Q
for the quarter ended November 25, 1995, the Company's amended Quarterly Report
on Form 10-Q/A for the quarter ended November 25, 1996, the Company's Quarterly
Report on Form 10-Q for the quarter ended February 24, 1996, the Company's
amended Quarterly Report on Form 10-Q/A for the quarter ended February 24, 1996,
the Company's Quarterly Report on Form 10-Q for the quarter ended
May 25, 1996, all the reports filed by the Company with the Securities and
Exchange Commission pursuant to Sections 13(a) and (c), 14 and 15(d) of the
Securities Exchange Act of 1934 since the end of the fiscal year covered by the
Company's Annual Report referred to above, and the description of the
Company's Common Stock contained in its Form 10/A, File No. 0-10824 are
incorporated by reference and made a part of this registration statement.
All reports and other documents subsequently filed by the Company
pursuant to Sections 13(a) and (c), 14 and 15(d) of the Securities Exchange Act
of 1934, as amended, prior to the filing of a post-effective amendment which
indicates that all securities offered hereby have been sold or which deregisters
all securities remaining unsold, shall be deemed to be incorporated by reference
herein and to be a part hereof from the date of the filing of such reports and
documents.
Item 4. Description of Securities
Not Required.
Item 5. Interests of Named Experts and Counsel
Not Applicable.
Item 6. Indemnification of Directors and Officers
The Company is organized under the laws of The Commonwealth of
Massachusetts. The Massachusetts Business Corporation Law provides that
indemnification of directors, officers, employees, and other agents of another
organization, or who serve at its request is any capacity with respect to any
employee benefit plan, may be provided by the corporation to whatever extent
specified in its charter documents or votes adopted by its shareholders, except
that no indemnification may be provided for any person with respect to any
matter as to which the person shall have been adjudicated in any proceeding not
to have acted in good faith in the reasonable belief that his action was in the
best interest of the corporation. Under Massachusetts law, a corporation can
purchase and maintain insurance on behalf of any person against any liability
incurred as a director, officer, employee, agent, or person serving at the
request of the corporation as a director, officer, employee, or other agent of
another organization or with respect to any employee benefit plan, in his
capacity as such, whether or not the corporation would have power to itself
indemnify him against such liability.
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The Company's Articles of Organization provide that its directors shall
not be liable to the Company or its stockholders for monetary damages for breach
of fiduciary duty as a director, except to the extent that the exculpation from
liabilities is not permitted under the Massachusetts Business Corporation Law as
in effect at the time such liability is determined. The By-Laws provide that the
Company shall indemnify its directors and officers to the full extent permitted
by the laws of The Commonwealth of Massachusetts. In addition, the Company holds
a Directors and Officer Liability and Corporate Indemnification Policy.
Item 7. Exemption from Registration Claimed
Not Applicable.
Item 8. Exhibits.
Exhibit 4(a). The Company's 1995 Stock Option Plan.
Exhibit 4(b). Form of Stock Option Agreements and Schedule
of Agreements.
Exhibit 4(c). The Company's Restated Articles of Organi-
zation (filed as an exhibit to the Company's
Registration Statement on Form S-1
(No. 2-75230) and incorporated herein by
reference).
Exhibit 4(d). Amendment dated January 5, 1982 to
Restated Articles of Organization (filed as
an exhibit to the Company's Quarterly Report
on Form 10-Q for the quarter ended February
27, 1982 and incorporated herein by
reference).
Exhibit 4(e). Amendment dated January 24, 1983 to
Restated Articles of Organization (filed as
an exhibit to the Company's Quarterly Report
on Form 10-Q for the quarter ended February
26, 1983 and incorporated herein by
reference).
Exhibit 4(f). Amendment dated January 17, 1984 to
Restated Articles of Organization (filed as
an exhibit to the Company's Quarterly Report
on Form 10-Q for the quarter ended February
25, 1984 and incorporated herein by
reference).
Exhibit 4(g). Amendment dated December 9, 1987 to
Restated Articles of Organization (filed as
an exhibit to the Company's Quarterly Report
on Form 10-Q for the quarter ended November
28, 1987 and incorporated herein by
reference).
Exhibit 4(h). Amendment dated January 24, 1994 to
Restated Articles of Organization (filed as
an exhibit to the Company's Annual Report on
Form 10-K for the year ended August 31, 1994
and incorporated herein by reference).
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Exhibit 4(i). Amendment dated August 31, 1994 to
Restated Articles of Organization (filed as
an exhibit to the Company's Annual Report on
Form 10-K for the year ended August 31, 1994
and incorporated herein by reference).
Exhibit 4(j). The Company's By-laws (filed as an exhibit
to the Company's Registration Statement on
Form S-1 (No. 2-75230) and incorporated
herein by reference).
Exhibit 4(k). Amendment dated October 20, 1987 to
the By-laws (filed as an exhibit to the
Company's Annual Report on Form 10-K for the
fiscal year ended August 31, 1987 and
incorporated herein by reference).
Exhibit 4(l). Amendment dated October 16, 1989 to
the By-laws (filed as an exhibit to the
Company's Annual Report on Form 10-K for the
fiscal year ended August 31, 1989 and
incorporated herein by reference).
Exhibit 5. Opinion of Ropes & Gray.
Exhibit 23(a). Consent of Ropes & Gray (contained in
Exhibit 5).
Exhibit 23(b). Consent of Arthur Andersen LLP.
Exhibit 24. Power of Attorney (included as part of
the signature pages to this Registration
Statement).
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement;
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provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) will not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of any
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Waltham, Commonwealth of Massachusetts, on this 1st
day of November, 1996.
Genome Therapeutics Corp.
By:/s/Fenel M. Eloi
-------------------------
Title: Vice President,
Treasurer and
Chief Financial
Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Robert J. Hennessey and Fenel M. Eloi and each of
them, with full power to act without the other, his true and lawful
attorneys-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities to sign any
or all amendments to this registration statement, including post-effective
amendments, and to file the same with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents and each of them full power and authority
to do and perform each and every act and thing requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any substitutes lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Name Title Date
/s/ Robert J. Hennessey Chairman of the Board; November 1, 1996
- -------------------------- President and Chief
Robert J. Hennessey Executive Officer (Principal
Executive Officer)
/s/ Orrie M. Friedman Director November 1, 1996
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Orrie M. Friedman
/s/ Lawrence Levy Director November 1, 1996
Lawrence Levy
/s/ Donald J. McCarren Director November 1, 1996
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Donald J. McCarren
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Name Title Date
/s/ Steven M. Rauscher Director November 1, 1996
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Steven M. Rausher
/s/ Philip Leder Director November 1, 1996
- ------------------------------
Philip Leder
/s/ Fenel M. Eloi Vice President; Treasurer and November 1, 1996
- ------------------------------ Chief Financial Officer
Fenel M. Eloi (Principal Financial and
Accounting Officer)
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EXHIBIT INDEX
Number Title of Exhibit Page
4(a). The Company's 1995 Stock Option Plan 9
4(b). Form of Stock Option Agreements and Schedule 15
of Agreements
5. Opinion of Ropes & Gray 20
23(a). Consent of Ropes & Gray Contained in Exhibit 5
23(b). Consent of Arthur Andersen LLP 22
24. Power of Attorney Included as Part of Signature
Pages to this Registration
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EXHIBIT 4(A)
GENOME THERAPEUTICS CORP.
1995 STOCK OPTION PLAN
1. PURPOSE
The purpose of the 1995 Stock Option Plan (the "Plan") is to advance the
interests of Genome Therapeutics Corp. (the "Company") by enhancing the ability
of the Company and its subsidiaries to attract and retain employees, consultants
or advisers who are in a position to make significant contributions to the
success of the Company; to reward such individuals for their contributions; and
to encourage such individuals to take into account the long-term interests on
the Company through interests in shares of the Company's common stock ("Stock").
Any employee, consultant or adviser designated to participate in the Plan is
referred to as a "participant." The proceeds received from the sale of stock
pursuant to the Plan shall be used for general corporate purposes.
Options granted pursuant to the Plan may be incentive stock options as
defined in Section 422 of the Code (any option that is intended so to qualify as
an incentive stock option being referred to herein as an "incentive option"), or
options that are not incentive options, or both. Except as otherwise expressly
provided with respect to an option grant, no option granted pursuant to the Plan
shall be an incentive option.
2. ADMINISTRATION
The Plan shall be administered by a Stock Option Committee appointed by, or
in a manner authorized by, the Board of Directors (the "Board") of the Company
or such other committee of the Board as the Board shall from time to time
appoint or authorize to administer the Plan (the Stock Option Committee or such
other committee being hereinafter referred to as the "Committee"). The Committee
shall have authority, not inconsistent with the express provisions for the Plan,
(a) to grant awards consisting of options or stock appreciation rights ("SARs"),
or both, to such participants as the Committee may select; (b) to determine the
time or times when awards shall be granted and the number of shares of Stock
subject to each award; (c) to determine which options are, and which options are
not, incentive options; (d) to determine the terms and conditions of each award;
(e) to prescribe the form or forms of any instruments evidencing awards and any
other instruments required under the Plan and to change such forms from time to
time; (f) to adopt, amend and rescind rules and regulations for the
administration of the Plan; and (g) to interpret the Plan and to decide any
questions and settle all controversies and disputes that may arise in connection
with the Plan. Such determinations of the Committee shall be conclusive and
shall bind all parties. Subject to Section 8, the Committee shall also have the
authority, both generally and in particular instances, to waive compliance by a
participant with any obligation to be performed by him under an award, to waive
any condition or provision of an award, and to amend or cancel any award (and if
an award is canceled, to grant a new award on such terms as the Committee shall
specify), except that the Committee may not take any action with respect to an
outstanding award that would adversely affect the rights of the participant
under such award without such participant's consent. Nothing in the preceding
sentence shall be construed as limiting the power of the Board to make
adjustments required by Section 4(c) and Section 6(j).
The Committee shall consist of two or more members of the Board who are, at
the time of their appointment and any time they exercise discretion in
administering the Plan, "disinterested persons" within the meaning of Rule 16b-3
under the Securities Exchange Act of 1934, and "outside directors" within the
meaning of sec.162(m) of the Code. A majority of the members of the Committee
shall constitute a quorum, and all determinations of the Committee shall be made
by a majority of its members. Any determination of the Committee under the Plan
may be made without notice or meeting of the Committee by a writing signed by a
majority of the Committee members.
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3. EFFECTIVE DATE AND TERM OF PLAN
The Plan shall become effective on the date on which it is approved by the
shareholders of the Company. Grants of awards under the Plan may be made prior
to that date (but after Board adoption of the Plan), subject to approval of the
Plan by such shareholders.
No awards shall be granted under the Plan after the completion of ten years
from the date on which the Plan was adopted by the Board, but awards previously
granted may extend beyond that date.
4. SHARES SUBJECT TO THE PLAN
a. Number of Shares. Subject to adjustment as provided in Section 4(c), the
aggregate number of shares of Stock that may be delivered upon the exercise of
awards granted under the Plan shall be 750,000. If any award granted under the
Plan terminates without having been exercised in full, or upon exercise is
satisfied other than by delivery of Stock, the number of shares of Stock as to
which such award was not exercised shall be available for future grants within
the limits set forth in this Section 4(a).
b. Maximum Shares. Subject to Section 4(d), the maximum number of shares of
Stock with respect to which an award may be granted to any participant during
any single fiscal year is 500,000. For purposes of this paragraph, except as
otherwise provided in regulations or other guidance issued under Section 162(m)
of the Code, any repricing of an option or Stock Appreciation Right shall be
treated as an additional grant.
c. Shares to be Delivered. Shares delivered under the Plan will be common
stock of the Company and shall be authorized but unissued Stock, or, if the
Board so decides in its sole discretion, previously issued Stock acquired by the
Company and held in its treasury. No fractional shares of Stock will be
delivered under the Plan.
d. Changes in Stock. In the event of a stock dividend or other distribution
to common stock holders other than a normal cash dividend, stock split or
combination of shares, recapitalization or other change in the Company's capital
stock, the number and kind of shares of stock or securities of the Company
subject to awards then outstanding or subsequently granted under the Plan, the
exercise price of such awards, the maximum number of shares or securities that
may be delivered under the Plan, and other relevant provisions shall be
appropriately adjusted by the Board, whose determination shall be binding on all
persons.
The Board or Committee may also adjust the number of shares subject to
outstanding awards, the exercise price of outstanding awards and the terms of
outstanding awards, to take into consideration material changes in accounting
practices or principles, extraordinary dividends, consolidations or mergers
(except those described in Section 6(j)), acquisitions or dispositions of stock
or property or any other event if it is determined by the Board or Committee in
its sole discretion that such adjustment is appropriate to avoid distortion in
the operation of the Plan, provided that no such adjustment shall be made in the
case of an incentive option, without the consent of the participant, if it would
constitute a modification, extension or renewal of the option within the meaning
of section 424(h) of the Code.
5. ELIGIBILITY FOR AWARDS
Those eligible to receive awards under the Plan ("Participants") will be
employees of the Company or any of its subsidiaries ("Employees") and other
persons or entities (including without limitation non-Employee directors of the
Company or a subsidiary of the Company) who, in the opinion of the Committee,
are in a position to make a significant contribution to the success of the
Company and its subsidiaries. Incentive options shall be granted only to
"employees" as defined in the provisions of the Code or regulations thereunder
applicable to incentive stock options.
A subsidiary for purposes of the Plan shall be a corporation (i) in which
the Company owns, directly or indirectly, stock possessing 50% or more of the
total combined voting power of all classes of stock or (ii) over which the
Company has effective operating control; provided, however, that no corporation
shall be deemed a subsidiary for the purpose of any
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provisions applicable to incentive options, and no incentive options shall be
granted to employees of such corporation, unless in each case such corporation
shall constitute a subsidiary as defined in clause (i) above.
6. TERMS AND CONDITIONS OF OPTIONS AND SARs
a. Exercise Price of Options. The exercise price of each option shall be
determined by the Committee but in the case of an incentive option shall not be
less than 100% (110%, in the case of an incentive option granted to a
ten-percent shareholder) of the fair market value of the Stock at the time the
option is granted; nor shall the exercise price be less, in the case of an
original issue of authorized stock, than par value. For this purpose, "fair
market value" in the case of incentive options shall have the same meaning as it
does in the provisions of the Code and the regulations thereunder applicable to
incentive options; and "ten-percent shareholder" shall mean any participant who
at the time of grant owns directly, or by reason of the attribution rules set
forth in section 424(d) of the Code is deemed to own, stock possessing more than
10% of the total combined voting power of all classes of stock of the Company or
of any of its parent or subsidiary corporations.
b. Duration of Options. An option shall be exercisable during such period or
periods as the Committee may specify. The latest date on which an option may be
exercised (the "Final Exercise Date") shall be the date which is ten years (five
years, in the case of an incentive option granted to a "ten-percent shareholder"
as defined in (a) above) from the date the option was granted or such earlier
date as may be specified by the Committee at the time the option is granted.
c. Exercise of Options.
i. An option shall become exercisable at such time or times and upon such
conditions as the Committee shall specify. In the case of an option not
immediately exercisable in full, the Committee may at any time accelerate the
time at which all or any part of the option may be exercised.
ii. Any exercise of an option shall be in writing, signed by the proper
person and delivered or mailed to the Company, accompanied by (A) such documents
as may be required by the Committee and (B) payment in full as specified below
in Section 6(d) for the number of shares for which the option is exercised.
iii. In the case of an option that is not an incentive option, the Committee
shall have the right to require that the participant exercising the option remit
to the Company an amount sufficient to satisfy any federal, state, or local
withholding tax requirements (or make any other arrangements satisfactory to the
Company with regard to such taxes) prior to the delivery of any Stock pursuant
to the exercise of the option. If permitted by the Committee, either at the time
of the grant of the option or the time of exercise, the participant may elect,
at such time and in such manner as the Committee may prescribe, to satisfy such
withholding obligation by (A) delivering to the Company Stock owned by such
individual having a fair market value equal to such withholding obligation, or
(B) requesting that the Company withhold from the shares of Stock to be
delivered upon the exercise a number of shares of Stock having a fair market
value equal to such withholding obligation.
In the case of an incentive option, if at the time the option is exercised
the Committee determines that under applicable law and regulations the Company
could be liable for the withholding of any federal or state tax with respect to
a disposition of the Stock received upon exercise, the Committee may require as
a condition of exercise that the participant exercising the option agree (A) to
inform the Company promptly of any disposition (within the meaning of section
424(c) of the Code and the regulations thereunder) of Stock received upon
exercise, and (B) to give such security as the Committee deems adequate to meet
the potential liability of the Company for the withholding of tax, and to
augment such security from time to time in any amount reasonably deemed
necessary by the Committee to preserve the adequacy of such security.
iv. If an option is exercised by the executor or administrator of a deceased
participant, or by the person or persons to whom the option has been transferred
by the participant's will or the applicable laws of descent and distribution,
the
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Company shall be under no obligation to deliver Stock pursuant to such exercise
until the Company is satisfied as to the authority of the person or persons
exercising the option.
d. Payment for and Delivery of Stock. Stock purchased upon exercise of an
option under the Plan shall be paid for as follows: (i) in cash or by certified
check or cashier's check, bank draft or money order payable to the order of the
Company or (ii) if so permitted by the Committee (which, in the case of an
incentive option, shall specify such method of payment at the time of grant),
(A) through the delivery of shares of Stock (duly owned by the participant and
for which the participant has good title, free and clear of any liens and
encumbrances) having a fair market value on the last business day preceding the
date of exercise equal to the purchase price or (B) by delivery of an
unconditional and irrevocable undertaking by a broker to deliver promptly to the
Company sufficient funds to pay the exercise price or (C) by any combination of
the permissible forms of payment.
e. Stock Appreciation Rights. The Committee in its discretion may grant SARs
either in tandem with or independent of options awarded under the Plan. Except
as hereinafter provided, each SAR will entitle the participant to receive upon
exercise, with respect to each share of Stock to which the SAR relates, the
excess of (i) the share's value on the date of exercise, over (ii) the share's
fair market value on the date it was granted. For purposes of clause (i),
"value" shall mean fair market value; provided, that the Committee may adjust
such value to take into account dividends on the Stock and may also grant SARs
that provide, in such limited circumstances following a change in control of the
Company (as determined by the Committee) as the Committee may specify, that
"value" for purposes of clause (i) is to be determined by reference to an
average value for the Stock during a period immediately preceding the change in
control, all as determined by the Committee. The amount payable to a participant
upon exercise of an SAR shall be paid either in cash or in shares of Stock, as
the Committee determines. Each SAR shall be exercisable during such period or
periods and on such terms as the Committee may specify. No SAR shall be
exercisable after the date which is ten years from the date of grant.
f. Delivery of Stock. A participant shall not have the rights of a
shareholder with regard to awards under the Plan except as to Stock actually
received by him under the Plan.
The Company shall not be obligated to deliver any shares of Stock (i) until,
in the opinion of the Company's counsel, all applicable federal and state laws
and regulations have been complied with, (ii) if the outstanding Stock is at the
time listed on any stock exchange, until the shares to be delivered have been
listed or authorized to be listed on such exchange upon official notice of
issuance, and (iii) until all other legal matters in connection with the
issuance and delivery of such shares have been approved by the Company's
counsel. If the sale of Stock has not been registered under the Securities Act
of 1933, as amended, the Company may require, as a condition to exercise of the
award, such representation or agreements as counsel of the Company may consider
appropriate to avoid violation of such Act and may require that the certificates
evidencing such Stock bear an appropriate legend restricting transfer.
g. Nontransferability of Awards. Except as the Board may otherwise determine
in connection with the gifts, no award may be transferred other than by will or
by the laws of descent and distribution, and during a participant's lifetime, an
award may be exercised only by him (or in the event of the participant's
incapacity, the person or persons legally appointed to act on the participant's
behalf).
h. Death. If a participant dies, each award held by the participant
immediately prior to death may be exercised, to the extent it was exercisable
immediately prior to death, by his executor or administrator, or by the person
or persons to whom the award is transferred by will or the applicable laws of
descent and distribution, at any time within the three-year period ending with
the third anniversary of the participant's death (or such shorter or longer
period as the Board or Committee may determine) but in no event beyond the Final
Exercise Date. All awards held by a participant immediately prior to death that
are not then exercisable shall terminate on the date of death.
i. Other Termination of Service. If an employee's employment with the
Company and its subsidiaries terminates for any reason other than death, all
awards held by the employee that are not then exercisable on the date employment
terminates shall continue to be exercisable for a period of three months (or
such longer period as the Committee may
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determine, but in no event beyond the Final Exercise Date) unless the employee
was discharged for cause which in the opinion of the Committee casts such
discredit on him as to justify termination of his awards. After completion of
that three-month period (or such shorter or longer period as the Board or
Committee may determine) such awards shall terminate to the extent not
previously exercised, expired or terminated. For purposes of this Section 6(i),
employment shall not be considered terminated (i) in the case of sick leave or
other bona fide leave of absence approved for purposes of the Plan by the
Committee, so long as the employee's right to reemployment is guaranteed either
by statute or by contract, or (ii) in the case of a transfer of employment
between the Company and a subsidiary or between subsidiaries, or to the
employment of a corporation (or a parent or subsidiary corporation of such
corporation) issuing or assuming an award in a transaction to which section
424(a) of the Code applies.
In the case of a participant who is not an employee, provisions relating to
the exercisability of awards following termination of service shall be specified
in the award. If not so specified, all awards held by such participant that are
not then exercisable shall terminate upon termination of service.
j. Mergers, etc. In the event of a consolidation or merger in which the
Company is not the surviving corporation or which results in the acquisition of
substantially all the Company's outstanding Stock by a single person or entity
or by a group of persons and/or entities acting in concert, or in the event of
the sale or transfer of substantially all the Company's assets, all outstanding
awards shall thereupon terminate, provided that at least 20 days prior to the
effective date of any such merger, consolidation or sale of assets, the Board or
Committee shall either (i) make all outstanding awards exercisable immediately
prior to consummation of such merger, consolidation or sale of assets or (ii) if
there is a surviving or acquiring corporation, arrange, subject to consummation
of the merger, consolidation or sale of assets, to have that corporation or an
affiliate of that corporation grant to participants replacement awards which in
the case of incentive awards satisfy, in the determination of the Board or
Committee, the requirement of section 424(a) of the Code.
The Board or Committee may grant awards under the Plan in substitution for
awards held by employees, consultants or advisers of another corporation who
concurrently becomes employees, consultants or advisers of the Company or a
subsidiary of the Company as a result of a merger or consolidation of that
corporation with the Company or a subsidiary of the Company, or as the result of
the acquisition by the Company or a subsidiary of the Company of property or
stock of that corporation. The Company may direct that substitute awards be
granted on such terms and conditions as the Board or Committee considers
appropriate in the circumstances.
7. EMPLOYMENT RIGHTS
Neither the adoption of the Plan nor the grant of awards shall confer upon
any participant any right to continue as an employee of, or consultant or
adviser to, the Company or any parent or subsidiary or affect in any way the
right of the Company or parent or subsidiary to terminate such participant at
any time. Except as specifically provided by the Committee in any particular
case, the loss of existing or potential profit in awards granted under this Plan
shall not constitute an element of damages in the event of termination of the
relationship of a participant even if the termination is in violation of an
obligation of the Company to the participant by contract or otherwise.
8. EFFECT, DISCONTINUANCE, CANCELLATION, AMENDMENT AND TERMINATION
Neither adoption of the Plan nor the grant of awards to a participant shall
affect the Company's right to make awards to such participant that are not
subject to the Plan, to issue to such participant Stock as a bonus or otherwise,
or to adopt other plans or arrangements under which Stock may be issued.
The Committee may at any time discontinue granting awards under the Plan.
With the consent of the participant, the Committee may at any time cancel an
existing award in whole or in part and grant another award for such number of
shares as the Committee specified. The Board may at any time or times amend the
Plan or any outstanding award for the purpose of satisfying the requirements of
section 422 of the Code or of any changes in applicable laws or regulations or
for any other purpose that may at the time be permitted by law, or may at any
time terminate the Plan as to any further
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<PAGE>
grants of awards, provided that (except to the extent expressly required or
permitted by the Plan) no such amendment shall, without the approval of the
stockholders of the Company effectuate a change for which stockholder approval
is required in order for the Plan to continue to qualify under Rule 16b-3 under
the Securities Exchange Act of 1934 or Section 422 of the Code, and no such
amendment shall adversely affect the rights of any participant (without his
consent) under any award previously granted.
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<PAGE>
EXHIBIT 4(b)
GENOME THERAPEUTICS CORP.
STOCK OPTION AGREEMENT
(Non-Statutory Option)
Non-Statutory Stock Option granted by Genome Therapeutics Corp., a Massachusetts
corporation (the "Company"), to [Optionee], a director 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 shall
terminate on November 16, 2005, and is subject to earlier termination as
provided in Sections 5 and 6 below. Subject to the other terms hereof, this
option is exercisable as follows: as to ______ if the average closing price of
the Common Stock is, for a period of ten (10) out of twenty (20) consecutive
trading days, $_____ or higher, as reported on the NASDAQ National
Market ("NASDAQ") (or such principal securities exchange as the Common Stock
may be traded; and as to an additional ______ shares if the average closing
price of the Common Stock is, for a period of ten (10) out of twenty (20)
consecutive trading days, $_____ or higher, as reported on NASDAQ (or such
principal securities exchange as the Common Stock may be traded..
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
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<PAGE>
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 as a Director
If the Optionee ceases to be a director of the Company for any reason other than
his death, he may thereafter exercise this option to the extent he was entitled
to exercise it on the date when his service as a director 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 the option would not be
exercisable had the Optionee's service as a director continued. For purposes of
this provision, the Optionee's service as a director 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
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<PAGE>
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. 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.
8. 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.
9. 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.
10. 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
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<PAGE>
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 10, and no such
amendment will adversely affect the rights of the Optionee without his consent.
11. Governing Law
This agreement shall be governed by and construed in accordance with the
internal laws of The Commonwealth of Massachusetts.
12. Stockholder Approval
This agreement shall not become effective unless and until the option granted
hereby is approved by the stockholders of the Company.
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:___________________________
President
Date: As of February 16, 1996
Accepted and Agreed:
- -----------------------------
[Optionee]
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<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SCHEDULE OF STOCK OPTION AGREEMENTS
Price Per Grant Expiration Shares Exercise
Optionee Share Date Date Granted Dates
Robert J.
Hennessey $8.87 12/21/95 12/21/05 300000 <F1>
Philip Leder $7.25 11/16/95 11/16/05 20000 <F2>
Lawrence Levy $7.25 11/16/95 11/16/05 20000 <F2>
Donald J.
McCarren $7.25 11/16/95 11/16/05 20000 <F2>
Steven M.
Rauscher $7.25 11/16/95 11/16/05 20000 <F2>
Bernd R.
Seizinger $7.44 7/12/96 7/12/06 600000 <F3>
<FN>
<F1> The options are exercisable by their terms on December 21, 2000 or
earlier as follows: (i) 75,000 options are exercisable if the average closing
price of the Common Stock for a period of 10 out of 20 consecutive trading days
after the date of grant is $10.25 or higher; (ii) an additional 100,000
options shall be exercisable if the average closing price of the Common Stock
for a period of 10 out of 20 consecutive trading days after the date of grant
is $12.25 or higher and (iii) an additional 125,000 options shall be
exercisable if the average closing price of the Common Stock for a period
of 10 out of 20 consecutive trading days after the date of grant is $14.25 or
higher.
<F2> The options are exercisable by their terms on November 16, 2000, or earlier
as follows: (i) 50% of the options are exercisable if the average closing price
of the Common Stock for a period of 10 out of 20 consecutive trading days after
the date of grant is $9.425 or higher; and (ii) an additional 50% of the options
shall be exercisable if the average closing price of the Common Stock for a
period of 10 out of 20 consecutive trading days after the date of grant is
$11.60 or higher.
<F3> The options are exercisable by their terms as follows: (i) an aggregate of
300,000 options are exercisable with respect to equal installments over four
years, commencing on September 1, 1997; (ii) 100,000 options shall be
exercisable if the closing price of the Common Stock for a period of 10 out of
20 consecutive trading days after the date of grant is $14.25 or higher; (iii)
100,000 options shall be exercisable if the closing price of the Common Stock
for a period of 10 out of 20 consecutive trading days after the date of grant is
$18.25 or higher; (iv) and the remaining 100,000 options shall be exercisable if
the closing price of the Common Stock for a period of 10 out of 20 consecutive
trading days after the date of grant is $20.25 or higher.
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</FN>
</TABLE>
<PAGE>
EXHIBIT 5
November 12, 1996
Genome Therapeutics Corp.
100 Beaver Street
Waltham, Massachusetts 02154
Ladies and Gentlemen:
We have acted as counsel for Genome Therapeutics Corp., a Massachusetts
corporation (the "Company") in connection with the preparation of a registration
statement on Form S-8 and all exhibits thereto (the "Registration Statement")
filed with the Securities and Exchange Commission under the Securities Act of
1933, as amended, for the registration of 1,730,000 shares of Common Stock, $.10
par value (the "Shares").
Of the shares being registered, 750,000 shares are issuable upon the
exercise of options granted pursuant to the Company's 1995 Stock Option Plan
(the "Plan") and 980,000 are issuable upon the exercise of options granted
pursuant to certain stock option agreements (the "Agreements") between the
Company and the respective holders. The Company has informed us that the Shares
issuable upon the exercise of options granted under the Agreements may
be authorized but unissued shares or shares held from time to time in its
treasury.
For purposes of this opinion, we have examined a copy of the
Registration Statement; a copy of the Plan; copies of the Agreements; the
Restated Articles of Organization of the Company, as amended to date; the
By-laws of the Company, as amended to date; the votes of the Board of Directors
and the stockholders of the Company approving and adopting the Plan and the
Agreements; and such other documents and records as we deem necessary for
purposes of this opinion.
We have assumed that the Shares will be issued only against payment
therefor as provided in the Plan and the Agreements and that the purchase price
for such shares
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<PAGE>
will not be less than the par value per share of the Company's Common Stock. We
have also assumed that the issuance of any such shares will not result in the
issuance by the Company of more than its authorized shares of Common Stock.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Company is a duly organized and validly existing
corporation under the laws of The Commonwealth of Massachusetts.
2. The Shares, when issued and paid for upon the exercise of options,
pursuant to the terms and conditions of the Plan and the Agreements, will be
validly issued and will be fully paid and nonassessable.
In connection with any issue and sale of the Shares, steps should be
taken to effect compliance with all applicable laws, rules and regulations of
governmental authorities regulating sales and offerings of securities.
We understand that this opinion is to be used in connection with the
Registration Statement. We consent to the filing of this opinion as an exhibit
to the Registration Statement and to the use of our name therein.
Very truly yours,
/s/ Ropes & Gray
Ropes & Gray
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EXHIBIT 23(b)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement of our reports
dated October 4, 1995 (except with respect to the matter discussed
in Note 10(b) as to which the date is December 6, 1995) in Genome Therapeutics
Corp.'s Form 10-K for the year ended August 31, 1995 and to all references
to our Firm included in this Registration Statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
November 7, 1996
<PAGE>
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