<PAGE>
As filed with the Securities and Exchange Commission on October 10, 1995
Registration No. 33-___________
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________________
CHIRON CORPORATION
(EXACT NAME OF ISSUER AS SPECIFIED IN ITS CHARTER)
Delaware 94-2754624
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4560 Horton St., Emeryville, California 94608
(510) 655-8730
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
__________________
1989 Stock Option Plan of Viagene, Inc.
Viagene, Inc. Amended and Restated 1993 Incentive Stock Plan
(Full title of the plan)
__________________
EDWARD E. PENHOET, PH.D.
President and Chief Executive Officer
CHIRON CORPORATION
4560 Horton Street, Emeryville, California 94608
(510) 655-8730
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Title of Securities Proposed Maximum Proposed Maximum Amount of
To Be Registered Amount To Be Registered Offering Price Per Share Aggregate Offering Price Registration Fee
- ---------------- ----------------------- ------------------------ ------------------------ ----------------
Common Stock, $0.01 par 132,100 (1) $88.375 (2) $11,674,337.50 (2) $4025.63
value (1989 Stock Option
Plan of Viagene, Viagene
Amended and Restated 1993
Incentive Stock Plan)
- -------------------------------------------------------------------------------------------------------------------------
<FN>
(1) This Registration Statement shall also covers any additional shares of Common Stock which become issuable under the
1989 Stock Option Plan of Viagene, Inc. and the Viagene, Inc. Amended and Restated 1993 Incentive Stock Plan, by
reason of any stock dividend, stock split, recapitalization or other similar transaction effected without the
receipt of consideration which results in an increase in the number of the Registrant's outstanding shares of
Common Stock.
(2) Calculated solely for the purposes of this offering under Rule 457(h) of the Securities Act of 1933 on the basis of
the average of the high and low selling prices per share of Common Stock of Chiron Corporation on October 4, 1995
as reported by the NASDAQ National Market System.
</TABLE>
This Registration Statement shall become effective immediately upon filing with
the Securities and Exchange Commission, and sales of the registered securities
will begin as soon as reasonably practicable after such effective date.
__________________
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Chiron Corporation (the "Registrant") files this Registration Statement with
the Securities and Exchange Commission (the "Commission") on Form S-8 to
register 235,000 shares of Chiron Common Stock authorized for issuance pursuant
to outstanding options under the 1989 Stock Option Plan of Viagene, Inc. and the
Viagene, Inc. Amended and Restated 1993 Incentive Stock Plan assumed by the
Registrant at the effective time of the merger of Viagene, Inc. with and into a
wholly-owned subsidiary of the Registrant, following which Viagene, Inc. became
a wholly-owned subsidiary of the Registrant.
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The Registrant hereby incorporates by reference into this Registration
Statement the following documents previously filed with the Commission:
(a) The Registrant's Annual Report on Form 10-K for the year ended
December 31, 1994 filed pursuant to Section 13(a) of the Securities Exchange Act
of 1934 (the "1934 Act");
(b) Amendment Number 1 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1994, dated April 24, 1995;
(c) The Registrant's Quarterly Report on Form 10-Q for the quarter ended
April 2, 1995 filed pursuant to Section 13 of the 1934 Act;
(d) Amendment Number 1 to Registrant's Quarterly Report on Form 10-Q for
the quarter ended April 2, 1995, dated July 28, 1995;
(e) The Registrant's Quarterly Report on Form 10-Q for the quarter ended
July 2, 1995 filed pursuant to Section 13 of the 1934 Act;
(f) The Registrant's Current Reports on Form 8-K and 8-K/A dated January
4, 1995 as amended on March 17, 1995;
(g) The Registrant's Current Report on Form 8-K dated March 6, 1995;
(h) The Registrant's Current Report on Form 8-K dated March 13, 1995;
(i) The Registrant's Current Report on Form 8-K dated April 24, 1995;
(j) The Registrant's Current Report on Form 8-K dated May 5, 1995; and
(k) The description of Registrant's Common Stock contained in its
Registration Statement on Form 8-A filed with the Commission on August 28, 1984.
II-1
<PAGE>
All reports and definitive proxy or information statements filed pursuant to
Section 13(a), 13(c), 14 or 15(d) of the 1934 Act after the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
William G. Green, who has provided an opinion to the Registrant on the
validity of the securities being registered which is Exhibit 5 to this
registration statement, is Senior Vice President, General Counsel and Secretary
of the Registrant.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware and the
Bylaws of the Registrant contain provisions covering indemnification of
corporate directors, officers and employees under certain conditions and subject
to certain limitations.
In addition, the Registrant has entered into supplemental indemnification
agreements with its directors which broaden the scope of indemnity beyond that
expressly provided by the Bylaws or the Delaware General Corporation Law. These
supplemental contracts are permissible under the Delaware General Corporation
Law and have been approved by the Registrant's stockholders. Accordingly, the
indemnification agreements with directors (i) confirm the present indemnity
provided to them by the Registrant's Bylaws and give them assurance that this
indemnity will continue to be provided despite future changes in the Bylaws, and
(ii) provide that, in addition, the directors shall be indemnified to the
fullest possible extent permitted by law against all expenses (including
attorneys' fees), judgments, fines and settlement amounts, incurred or paid by
them in any action or proceeding, including any action by or in the right of the
Registrant, on account of their service as a director or officer of the
Registrant, or as a director or officer of any subsidiary of the Registrant, or
as a director, officer or similar official of any other company or enterprise
when they are serving in such capacities at the request of the Registrant. The
indemnification agreements further provide that expenses incurred by a director
in such cases shall be paid in advance, subject to the director's obligation to
reimburse the Registrant in the event it ultimately determines that the director
is not entitled to be indemnified for such expenses under any of the provisions
of the indemnification agreement. However, no indemnity will be provided to any
director under the agreements as described in clause (ii) of the third sentence
of this paragraph on account of conduct which is finally adjudged to be
knowingly fraudulent, deliberately dishonest or to constitute willful
misconduct. In addition, no indemnification will be
II-2
<PAGE>
provided if a final court adjudication shall determine that such indemnification
is not lawful, or in respect to any suit in which judgment is rendered against a
director for an accounting of profits made from a purchase or sale of securities
of the Registrant in violation of Section 16(b) of the 1934 Act, as amended, or
of any similar statutory provision, or on account of any remuneration paid to a
director which is finally adjudged to have been paid in violation of law. The
indemnification agreements also contain provisions designed to protect the
Registrant from unreasonable settlements or redundant legal expenditures.
The Registrant maintains liability insurance for each of its directors and
officers which provides for coverage for certain liabilities for which
indemnification by the Registrant may not be permissible under applicable law
and public policy, including liabilities under the Securities Act of 1933, as
amended.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
EXHIBIT NUMBER EXHIBIT
- -------------- -------
4.01 Rights Agreement, dated as of August 25, 1994, between
the Company and Continental Stock Transfer & Trust
Company, which includes the Certificate of Designations
for the Series A Junior Participating Preferred Stock
as Exhibit A, the form of Right Certificate as Exhibit
B and the Summary of Rights to Purchase Preferred
Shares as Exhibit C, incorporated by reference to
Exhibit 4.04 of the Registrant's current report on Form
8-K dated August 25, 1994.
II-3
<PAGE>
4.02 Amendment No. 1 to Rights Agreement dated as of
November 20, 1994, between Chiron Corporation and
Continental Stock Transfer & Trust Company,
incorporated by reference to Exhibit 4.05 of the
Registrant's current report on Form 8-K, dated November
20, 1994.
5 Opinion of William G. Green.
23.1 Consent of KPMG Peat Marwick LLP, Independent Auditors,
relating to the 1994 consolidated financial statements of
Chiron Corporation.
23.2 Consent of Ernst & Young LLP, Independent Auditors,
relating to the 1993 and 1992 consolidated financial
statements of Chiron Corporation.
23.3 Consent of Ernst & Young LLP, Independent Auditors,
relating to the consolidated financial statements of Ciba
Corning Diagnostics Corp.
23.4 Consent of KPMG Peat Marwick LLP, Independent Auditors,
relating to the financial statements of The Biocine Company.
23.5 Consent of Reconta Ernst & Young, Independent Auditors,
relating to the consolidated financial statements of JV Vax
B.V.
23.6 Consent of William G. Green is contained in Exhibit 5.
24 Power of Attorney. Reference is made to pages II-6 and II-7
of this Registration Statement.
99.1 1989 Stock Option Plan of Viagene, Inc. and Forms of
Agreements.
99.2 Viagene, Inc. Amended and Restated 1993 Incentive Stock Plan
and Forms of Agreements.
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, and (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 PROVIDED, however, that clauses (1)(i) and (1)(ii) shall not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of
II-4
<PAGE>
the Securities Exchange Act of 1934 that are incorporated by reference into the
registration statement; and (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 that is incorporated by reference into 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 or controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been informed that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
1933 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 1933 Act and
will be governed by the final adjudication of such issue.
II-5
<PAGE>
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 Emeryville, State of California, on the 9th day of
October, 1995.
CHIRON CORPORATION
By EDWARD E. PENHOET
------------------------------------
Edward E. Penhoet
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officers and
directors of Chiron Corporation, a Delaware corporation, do hereby constitute
and appoint Edward E. Penhoet and William J. Rutter, and each of them, the
lawful attorneys and agents or attorney and agent with full power and authority
to do any and all acts and things and to execute any and all instruments which
said attorneys and agents, and any one of them, determine may be necessary or
advisable or required to enable said corporation to comply with the Securities
Act of 1933, as amended, and any rules or regulations or requirements of the
Securities and Exchange Commission in connection with this Registration
Statement. Without limiting the generality of the foregoing power and
authority, the powers granted include the power and authority to sign the names
of the undersigned officers and directors in the capacities indicated below this
Registration Statement, to any and all amendments, both pre-effective and post-
effective, and supplements to this Registration Statement, and to any and all
instruments or documents filed as part of or in conjunction with this
Registration Statement or amendments or supplements thereof, and each of the
undersigned hereby ratifies and confirms all that said attorneys and agents, or
any one of them shall do or cause to be done by virtue hereof. This Power of
Attorney may be signed in several counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.
II-6
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
SIGNATURE TITLE DATE
EDWARD E. PENHOET, PH.D. President, Chief Executive October 9, 1995
-------------------------------- Officer and Director (Principal
(Edward E. Penhoet, Ph.D.) Executive Officer)
WILLIAM J. RUTTER, PH.D. Chairman of the Board October 9, 1995
--------------------------------
(William J. Rutter, Ph.D.)
DENNIS L. WINGER Senior Vice President, Finance October 9, 1995
-------------------------------- and Administration, Chief
(Dennis L. Winger) Financial Officer (Principal
Financial and Accounting
Officer)
GILBERT F. AMELIO, PH.D. October 9, 1995
-------------------------------- Director
(Gilbert F. Amelio, Ph.D.)
LEWIS W. COLEMAN October 9, 1995
-------------------------------- Director
(Lewis W. Coleman)
PIERRE E. DOUAZE October 9, 1995
-------------------------------- Director
(Pierre E. Douaze)
DONALD A. GLASER, PH.D. October 9, 1995
-------------------------------- Director
(Donald A. Glaser, Ph.D.)
ALEX KRAUER, PH.D. October 9, 1995
-------------------------------- Director
(Alex Krauer, Ph.D.)
FRANCOIS L'EPLATTENIER, PH.D October 9, 1995
-------------------------------- Director
(Francois L'Eplattenier, Ph.D.)
HENRI SCHRAMEK, PH.D. October 9, 1995
-------------------------------- Director
(Henri Schramek, Ph.D.)
JACK W. SCHULER October 9, 1995
-------------------------------- Director
(Jack W. Schuler)
PIETER J. STRIJKERT, PH.D. October 9, 1995
-------------------------------- Director
(Pieter J. Strijkert, Ph.D.)
</TABLE>
II-7
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
TO
FORM S-8
UNDER
SECURITIES ACT OF 1933
CHIRON CORPORATION
<PAGE>
EXHIBIT INDEX
EXHIBIT NUMBER EXHIBIT
- -------------- -------
4.01 Rights Agreement, dated as of August 25, 1994,
between the Company and Continental Stock Transfer &
Trust Company, which includes the Certificate of
Designations for the Series A Junior Participating
Preferred Stock as Exhibit A, the form of Right
Certificate as Exhibit B and the Summary of Rights
to Purchase Preferred Shares as Exhibit C,
incorporated by reference to Exhibit 4.04 of the
Registrant's current report on Form 8-K dated August
25, 1994.
4.02 Amendment No. 1 to Rights Agreement dated as of
November 20, 1994, between Chiron Corporation and
Continental Stock Transfer & Trust Company,
incorporated by reference to Exhibit 4.05 of the
Registrant's current report on Form 8-K, dated
November 20, 1994.
<PAGE>
5 Opinion of William G. Green.
23.1 Consent of KPMG Peat Marwick LLP, Independent Auditors,
relating to the 1994 consolidated financial statements of
Chiron Corporation.
23.2 Consent of Ernst & Young LLP, Independent Auditors,
relating to the 1993 and 1992 consolidated financial
statements of Chiron Corporation.
23.3 Consent of Ernst & Young LLP, Independent Auditors,
relating to the consolidated financial statements of Ciba
Corning Diagnostics Corp.
23.4 Consent of KPMG Peat Marwick LLP, Independent Auditors,
relating to the financial statements of The Biocine Company.
23.5 Consent of Reconta Ernst & Young, Independent Auditors,
relating to the consolidated financial statements of JV Vax
B.V.
23.6 Consent of William G. Green is contained in Exhibit 5.
24 Power of Attorney. Reference is made to pages II-6 and II-7
of this Registration Statement.
99.1 1989 Stock Option Plan of Viagene, Inc. and Forms of
Agreements.
99.2 Viagene, Inc. Amended and Restated 1993 Incentive Stock Plan
and Forms of Agreements.
<PAGE>
EXHIBIT 5
October 5, 1995
Chiron Corporation
4560 Horton Street
Emeryville, CA 94608
Re: Chiron Corporation
Registration Statement for Offering of
Shares of Common Stock
Ladies and Gentlemen:
In connection with your registration of 132,100 shares of the Common Stock
of Chiron Corporation (the "Company") on Form S-8 under the Securities Act of
1933, as amended, I advise you that, in my opinion, when such shares have
been issued and sold pursuant to the provisions of the 1989 Stock Option Plan
of Viagene, Inc. and the Viagene, Inc. Amended and Restated 1993 Incentive
Stock Plan, and in accordance with the Registration Statement, such shares
will be duly authorized, validly issued, fully paid and non-assessable shares
of the Company's Common Stock.
I hereby consent to filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
WILLIAM G. GREEN
William G. Green
Senior Vice President and
General Counsel
WGG/cdb
<PAGE>
EXHIBIT 23.1
CONSENT OF KPMG PEAT MARWICK LLP, INDEPENDENT AUDITORS
We consent to incorporation herein by reference of our report dated February
17, 1995, relating to the consolidated balance sheet of Chiron Corporation as
of December 31, 1994 and the related consolidated statements of operations,
stockholders' equity and cash flows for the year then ended and the related
schedule.
KPMG PEAT MARWICK LLP
San Francisco, California
October 4, 1995
<PAGE>
EXHIBIT 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) of Chiron Corporation pertaining to the 1989 Stock Option Plan of
Viagene, Inc. and the Viagene Inc. Amended and Restated 1993 Incentive Stock
Plan of our report dated February 25, 1994, with respect to the 1993 and 1992
consolidated financial statements and schedule of Chiron Corporation included
in the Annual Report (Form 10-K) of Chiron Corporation for the year ended
December 31, 1994, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
San Francisco, California
October 4, 1995
<PAGE>
EXHIBIT 23.3
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) of Chiron Corporation pertaining to the 1989 Stock Option Plan of
Viagene, Inc. and the Viagene, Inc. Amended and Restated 1993 Incentive Stock
Plan of our report dated January 27, 1995, with respect to the consolidated
financial statements of Ciba Corning Diagnostics Corp. included in the Current
Report Form 8-K/A of Chiron Corporation dated January 4, 1995, as amended on
March 17, 1995, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Boston, Massachusetts
October 4, 1995
<PAGE>
EXHIBIT 23.4
CONSENT OF KPMG PEAT MARWICK LLP, INDEPENDENT AUDITORS
We consent to incorporation herein by reference of our report dated February
17, 1995, relating to the balance sheets of The Biocine Company as of
December 31, 1994 and 1993 and the related statements of operations,
partners' capital (deficit) and cash flows for each of the years in the three
year period ended December 31, 1994.
KPMG PEAT MARWICK LLP
San Francisco, California
October 4, 1995
4<PAGE>
EXHIBIT 23.5
CONSENT OF RECONTA ERNST & YOUNG, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) of Chiron Corporation pertaining to the 1989 Stock Option Plan of
Viagene, Inc. and the Viagene, Inc. Amended and Restated 1993 Incentive Stock
Plan of our report dated February 28, 1995, with respect to the consolidated
financial statements of JV Vax B.V. and subsidiaries included in the Current
Report Form 8-K/A of Chiron Corporation dated January 4, 1995, as amended on
March 17, 1995, filed with the Securities and Exchange Commission.
RECONTA ERNST & YOUNG
October 4, 1995
Milan, Italy
<PAGE>
AMENDED AND RESTATED
1989 STOCK PLAN OF
VIAGENE, INC.
AS ADOPTED ON NOVEMBER 28, 1989
AND AMENDED ON OCTOBER 12, 1991
AND AMENDED ON SEPTEMBER 2, 1992
SECTION 1. ESTABLISHMENT AND PURPOSE.
The Plan was established in 1989 to offer selected employees,
directors, advisors and consultants an opportunity to acquire a proprietary
interest in the success of the Company, or to increase such interest, by
purchasing Shares of the Company's Common Stock. The Plan provides both for the
direct award or sale of Shares and for the grant of Options to purchase Shares.
Options granted under the Plan may include Nonstatutory Options as well as ISOs
intended to qualify under section 422A of the Code.
SECTION 2. DEFINITIONS.
(a) "BOARD OF DIRECTORS" shall mean the Board of Directors of the
Company, as constituted from time to time.
(b) "CODE" shall mean the Internal Revenue Code of 1986, as
amended.
(c) "COMMITTEE" shall mean a committee of the Board of Directors,
as described in Section 3(a).
(d) "COMPANY" shall mean Viagene, Inc., a Delaware corporation.
<PAGE>
(e) "EMPLOYEE" shall mean (i) any individual who is a common-law
employee of the Company or of a Subsidiary, (ii) a member of the Board of
Directors and (iii) an independent contractor who performs services for the
Company or a Subsidiary. Service as a member of the Board of Directors or as an
independent contractor shall be considered employment for all purposes of the
Plan except the second sentence of Section 4(a).
(f) "EXERCISE PRICE" shall mean the amount for which one Share
may be purchased upon exercise of an Option, as specified by the Committee in
the applicable Stock Option Agreement.
(g) "FAIR MARKET VALUE" shall mean the fair market Value of a
Share, as determined by the Committee in good faith. Such determination
shall be conclusive and binding on all persons.
(h) "ISO" shall mean an employee incentive stock option described
in section 422A(b) of the Code.
(i) "NONSTATUTORY OPTION" shall mean an employee stock option not
described in sections 422(b), 422A(b), 423(b) or 424(b) of the Code.
(j) "OFFEREE" shall mean an individual to whom the Committee has
offered the right to acquire Shares under the Plan (other than upon exercise of
an Option).
(k) "OPTION" shall mean an ISO or Nonstatutory Option granted under
the Plan and entitling the holder to purchase Shares.
-2-
<PAGE>
(1) "OPTIONEE" shall mean an individual who holds an Option.
(m) "PLAN" shall mean this 1989 Stock Plan of Viagene, Inc.
(n) "PURCHASE PRICE" shall mean the consideration for which one
Share may be acquired under the Plan (other than upon exercise of an Option), as
specified by the Committee.
(o) "SERVICE" shall mean service as an Employee.
(p) "SHARE" shall mean one share of Stock, as adjusted in
accordance with Section 9 (if applicable).
(q) "STOCK" shall mean the Common Stock of the Company.
(r) "STOCK OPTION AGREEMENT" shall mean the agreement between the
Company and an Optionee which contains the terms, conditions and restrictions
pertaining to his or her option.
(s) "STOCK PURCHASE AGREEMENT" shall mean the agreement between the
Company and an Offeree who acquires Shares under the Plan which contains the
terms, conditions and restrictions pertaining to the acquisition of such Shares.
(t) "SUBSIDIARY" shall mean any corporation, if the Company and/or
one or more other Subsidiaries own not less than 50 percent of the total
combined voting power of all classes of outstanding stock of such corporation.
A corporation that attains the status of a Subsidiary on a date after the
adoption of the Plan shall be considered a Subsidiary commencing as of such
date.
-3-
<PAGE>
(u) "TOTAL AND PERMANENT DISABILITY" shall mean that the
Optionee is unable to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment which can be
expected to result in death or which has lasted, or can be expected to last,
for a continuous period of not less than six months.
SECTION 3. ADMINISTRATION.
(a) COMMITTEE MEMBERSHIP. The Plan shall be administered by the
Committee, which shall consist of members of the Board of Directors. The
members of the Committee shall be appointed by the Board of Directors. If no
Committee has been appointed, the entire Board of Directors shall constitute
the Committee.
(b) COMMITTEE PROCEDURES. The Board of Directors shall designate
one of the members of the Committee as chairman. The Committee may hold
meetings at such times and places as it shall determine. The acts of a majority
of/the Committee members present at meetings at which a quorum exists, or acts
reduced to or approved in writing by all Committee members, shall be valid acts
of the Committee.
(c) COMMITTEE RESPONSIBILITIES. Subject to the provisions of the
Plan, the Committee shall have full authority and discretion to take the
following actions:
(i) To interpret the Plan and to apply its provisions;
-4-
<PAGE>
(ii) To adopt, amend or rescind rules, procedures and forms relating
to the Plan;
(iii) To authorize any person to execute, on behalf of the Company,
any instrument required to carry out the purposes of the Plan;
(iv) To determine when Shares are to be awarded or offered for sale
and when Options are to be granted under the Plan;
(v) To select the Offerees and Optionees;
(vi) To determine the number of Shares to be offered to each Offeree
or to be made subject to each Option;
(vii) To prescribe the terms and conditions of each award or sale of
Shares, including (without limitation) the Purchase Price, and to specify
the provisions of the Stock Purchase Agreement relating to such award or
sale;
(viii) To prescribe the terms and conditions of each Option, including
(without limitation) the Exercise Price, to determine whether such Option
is to be classified as an ISO or as a Nonstatutory Option, and to specify
the provisions of the Stock Option Agreement relating to such Option;
(ix) To amend any outstanding Stock Purchase Agreement or Stock
Option Agreement, subject to applicable legal restrictions and to the
consent of
-5-
<PAGE>
the Offeree or Optionee who entered into such agreement;
(x) To prescribe the consideration for the grant of each Option or
other right under the Plan and to determine the sufficiency of such
consideration; and
(xi) To take any other actions deemed necessary or advisable for the
administration of the Plan.
All decisions, interpretations and other actions of the Committee shall be
final and binding on all Offerees, all Optionees, and all persons deriving
their rights from an Offeree or Optionee. No member of the Committee
shall be liable for any action that he or she has taken or has failed to
take in good faith with respect to the Plan, any Option, or any right to
acquire Shares under the Plan.
(d) FINANCIAL REPORTS. Not less often than annually, the Company
shall furnish to Optionees and Offerees reports of its financial condition,
unless such Optionees and Offerees have access to equivalent information through
their employment. Such reports need not be audited.
SECTION 4. ELIGIBILITY.
(a) GENERAL RULE. Only Employees shall be eligible for designation
as Optionees or Offerees by the Committee. In addition, only individuals who
are employed as common-law employees by the Company or a Subsidiary shall be
eligible for the grant of ISOS.
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<PAGE>
(b) TEN-PERCENT SHAREHOLDERS. An Employee who owns more than 10
percent of the total combined voting power of all classes of outstanding stock
of the Company or any of its Subsidiaries shall not be eligible for designation
as an Optionee or Offeree unless (i) the Exercise Price or Purchase Price (if
any) is at least 110 percent of the Fair Market Value of a Share on the date of
grant and (ii) in the case of an ISO, such,ISO by its terms is not exercisable
after the expiration of five years from the date of grant.
(c) ATTRIBUTION RULES. For purposes of Subsection (b) above, in
determining stock ownership, an Employee shall be deemed to own the stock owned,
directly or indirectly, by or for such Employee's brothers, sisters, spouse,
ancestors and lineal descendants. Stock owned, directly or indirectly, by or
for a corporation, partnership, estate or trust shall be deemed to be owned
proportionately by or for its shareholders, partners or beneficiaries. Stock
with respect to which such Employee holds an option shall not be counted.
(d) OUTSTANDING STOCK. For purposes of Subsection (b) above,
"outstanding stock" shall include all stock actually issued and outstanding
immediately after the grant. "Outstanding stock" shall not include shares
authorized for issuance under outstanding options held by the Employee or by any
other person.
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<PAGE>
SECTION 5. STOCK SUBJECT TO PLAN.
(a) BASIC LIMITATION. Shares offered under the Plan shall be
authorized but unissued Shares or treasury Shares. The aggregate number of
Shares which may be issued under the Plan (upon exercise of options or other
rights to acquire Shares) shall not exceed 2,700,000 Shares, subject to
adjustment pursuant to Section 9. The number of Shares which are subject to
Options or other rights outstanding at any time under the Plan shall not exceed
the number of Shares which then remain available for issuance under the Plan.
The Company, during the term of the Plan, shall at all times reserve and keep
available sufficient Shares to satisfy the requirements of the Plan.
(b) ADDITIONAL SHARES. In the event that any outstanding Option or
other right for any reason expires or is cancelled or otherwise terminated, the
Shares allocable to the unexercised portion of such Option or other right shall
again be available for the purposes of the Plan. In the event that Shares
issued under the Plan are reacquired by the Company pursuant to a forfeiture
provision, a right of repurchase or a right of first refusal, such Shares shall
again be available for the purposes of the Plan.
SECTION 6. TERMS AND CONDITIONS OF AWARDS OR SALES.
(a) STOCK PURCHASE AGREEMENT. Each award or sale of
Shares under the Plan (other than upon exercise of an option) shall be evidenced
by a Stock Purchase Agreement between the Offeree and the Company. Such award
or sale shall be subject to
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all applicable terms and conditions of the Plan and may be subject to any other
terms and conditions which are not inconsistent with the Plan and which the
Committee deems appropriate for inclusion in a Stock Purchase Agreement. The
provisions of the various Stock Purchase Agreements entered into under the Plan
need not be identical.
(b) DURATION OF OFFERS AND NONTRANSFERABILITY OF RIGHT;. Any right
to acquire Shares under the Plan (other than an Option) shall automatically
expire if not exercised by the Offeree within 30 days after the grant of such
right was communicated to the Offeree by the Committee. Such right shall not be
transferable and shall be exercisable only by the offeree to whom such right was
granted.
(c) PURCHASE PRICE. The Purchase Price of Shares to be offered
under the Plan shall not be less than 85 percent of the Fair Market Value of
such Shares, except as otherwise provided in Section 4(b). Subject to the
preceding sentence, the Purchase Price shall be determined by the Committee at
its sole discretion. The Purchase Price shall be payable in a form described
in Section 8.
(d) WITHHOLDING TAXES. As a condition to the purchase of Shares,
the Offeree shall make such arrangements as the Committee may require for the
satisfaction of any federal, state or local withholding tax obligations that may
arise in connection with such purchase.
(e) RESTRICTIONS ON TRANSFER OF SHARES. Any Shares awarded or sold
under the Plan shall be subject to such special
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forfeiture conditions, rights of repurchase, rights of first refusal and other
transfer restrictions as the Committee may determine. Such restrictions shall
be set forth in the applicable Stock Purchase Agreement and shall apply in
addition to any general restrictions that may apply to all holders of Shares.
Any service-based vesting conditions shall not be less rapid than the schedule
set forth in Section 7(e).
SECTION 7. TERMS AND CONDITIONS OF OPTIONS.
(a) STOCK OPTION AGREEMENT. Each grant of an Option under the Plan
shall be evidenced by a Stock Option Agreement between the Optionee and the
Company. Such Option shall be subject to all applicable terms and conditions of
the Plan and may be subject to any other terms and conditions which are not
inconsistent with the Plan and which the Committee deems appropriate for
inclusion in a Stock Option Agreement. The provisions of the various Stock
Option Agreements entered into under the Plan need not be identical.
(b) NUMBER OF SHARES. Each Stock Option Agreement shall specify
the number of Shares that are subject to the Option and shall provide for the
adjustment of such number in accordance with Section 9. The Stock Option
Agreement shall also specify whether the Option is an ISO or a Nonstatutory
Option.
(c) EXERCISE PRICE. Each Stock Option Agreement shall
specify the Exercise Price. The Exercise Price of an ISO shall not be less
than 100 percent of the Fair Market Value of a
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Share on the date of grant, except as otherwise provided in Section 4(b). The
Exercise Price of a Nonstatutory Option shall not be less than 85 percent of the
Fair Market Value of a Share on the date of grant, except as otherwise provided
in Section 4(b). Subject to the preceding two sentences, the Exercise Price
under any Option shall be determined by the Committee at its sole discretion.
The Exercise Price shall be payable in a form described in Section 8.
(d) WITHHOLDING TAXES. As a condition to the exercise of an
option, the Optionee shall make such arrangements as the Committee may require
for the satisfaction of any federal, state or local withholding tax obligations
that may arise in connection with such exercise. The Optionee shall also make
such arrangements as the Committee may require for the satisfaction of any
federal, state or local withholding tax obligations that may arise in connection
with the disposition of Shares acquired by exercising an Option.
(e) EXERCISABILITY AND TERM. Each Stock Option Agreement shall
specify the date when all or any installment of the Option is to become
exercisable. An Option shall become exercisable at least as rapidly as set
forth in the following schedule:
<TABLE>
<CAPTION>
Anniversary of Percentage of
Date of Grant Shares Exercisable
------------- ------------------
<S> <C>
First 20%
Second 40%
Third 60%
Fourth 80%
Fifth 100%
</TABLE>
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<PAGE>
Subject to the preceding sentence, the vesting of any Option shall be determined
by the Committee at its sole discretion. A Stock Option Agreement may provide
for accelerated exercisability in the event of the Optionee's death, Total and
Permanent Disability or retirement or other events. The Stock Option Agreement
shall also specify the term of the Option. The term shall not exceed 10 years
from the date of grant, except as otherwise provided in Section 4(b). Subject
to the preceding sentence, the Committee at its sole discretion shall determine
when an Option is to expire.
(f) NONTRANSFERABILITY. During an Optionee's lifetime, such
Optionee's Option(s) shall be exercisable only by him or her and shall not be
transferable. In the event of an Optionee's death, such Optionee's Option(s)
shall not be transferable other than by will or by the laws of descent and
distribution.
(g) TERMINATION OF SERVICE (EXCEPT BY DEATH). If an Optionee's
Service terminates for any reason other than the Optionee's death, then such
Optionee's Option(s) shall expire on the earliest of the following occasions:
(i) The expiration date determined pursuant to Subsection (e)
above;
(ii) The date 90 days after the termination of the Optionee's
Service for any reason other than Total and Permanent Disability; or
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(iii) The date six months after the termination of the Optionee's
Service by reason of Total and Permanent Disability.
The Optionee may exercise all or part of his or her Option(s) at any time before
the expiration of such Option(s) under the preceding sentence, but only to the
extent that such Option(s) had become exercisable before the Optionee's Service
terminated or became exercisable as a result of the termination. The balance of
such Option(s) shall lapse when the Optionee's Service terminates. In the event
that the Optionee dies after the termination of the Optionee's Service but
before the expiration of the Optionee's Option(s), all or part of such Option(s)
may be exercised (prior to expiration) by the executors or administrators of the
Optionee's estate or by any person who has acquired such Option(s) directly from
the Optionee by bequest or inheritance, but only to the extent that such
Option(s) had become exercisable before the Optionee's Service terminated or
became exercisable as a result of the termination.
(h) LEAVES OF ABSENCE. For purposes of Subsection (g) above,
Service shall be deemed to continue while the Optionee is on military leave,
sick leave or other bona fide leave of absence (as determined by the Committee).
The foregoing notwithstanding, in the case of an ISO granted under the Plan,
Service shall not be deemed to continue beyond the first 90 days of such leave,
unless the Optionee's reemployment rights are guaranteed by statute or by
contract.
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(i) DEATH OF OPTIONEE. If an Optionee dies while he or she is in
Service, then such Optionee's Option(s) shall expire on the earlier of the
following dates:
(i) The expiration date determined pursuant to Subsection (e)
above; or
(ii) The date six months after the Optionee's death.
All or part of the Optionee's Option(s) may be exercised at any time before the
expiration of such Option(s) under the preceding sentence by the executors or
administrators of the Optionee's estate or by any person who has acquired such
Option(s) directly from the Optionee by bequest or inheritance, but only to the
extent that such Option(s) had become exercisable before the Optionee's death or
became exercisable as a result of the Optionee's death. The balance of such
Option(s) shall lapse when the Optionee dies.
(j) NO RIGHTS AS A STOCKHOLDER. An Optionee, or a transferee of an
Optionee, shall have no rights as a stockholder with respect to any Shares
covered by his or her Option until the date of the issuance of a stock
certificate for such Shares. No adjustments shall be made, except as provided
in Section 9.
(k) MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. Within the
limitations of the Plan, the Committee may modify, extend or renew outstanding
Options or may accept the cancellation of outstanding Options (to the extent not
previously exercised) in return for the grant of new Options at the same or a
different price. The foregoing notwithstanding,
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no modification of an Option shall, without the consent of the Optionee, impair
such Optionee's rights or increase his or her obligations under such Option.
(1) RESTRICTIONS ON TRANSFER OF SHARES. Any Shares issued upon
exercise of an Option shall be subject to such special forfeiture conditions,
rights of repurchase, rights of first refusal and other transfer restrictions as
the Committee may determine. Such restrictions shall be set forth in the
applicable Stock Option Agreement and shall apply in addition to any general
restrictions that may apply to all holders of Shares. Any service-based vesting
conditions shall not be less rapid than the schedule set forth in Subsection (e)
above.
SECTION 8. PAYMENT FOR SHARES.
(a) GENERAL RULE. The entire Purchase Price or Exercise Price of
Shares issued under the Plan shall be payable in lawful money of the United
States of America at the time when such Shares are purchased, except as follows!
(i) In the case of Shares sold under the terms of a stock purchase
agreement subject to the Plan, payment shall be made only pursuant to the
express provisions of such stock purchase agreement. However, the Committee (at
its sole discretion) may specify in the stock purchase agreement that payment
may be made in one or both of the forms described in Subsections
(c) and (d) below.
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(ii) In the case of an ISO granted under the Plan, payment shall be
made only pursuant to the express provisions of the applicable Stock Option
Agreement. However, the Committee (at its sole discretion) may specify in
the Stock Option Agreement that payment may be made in one or both of the
forms described in Subsections (b) and (d) below.
(iii) In the case of a Nonstatutory Option granted under the Plan,
the Committee (at its sole discretion) may accept payment in one or both
of the forms described in Subsections (b) and (d) below.
(b) SURRENDER OF STOCK. To the extent that this Subsection (b) is
applicable, payment may be made all or in part with Shares which have already
been owned by the Optionee or his representative for more than 12 months and
which are surrendered to the Company in good form for transfer. Such Shares
shall be valued at their Fair Market Value on the date when the new Shares are
purchased under the Plan.
(c) SERVICES RENDERED. To the extent that this Subsection (c) is
applicable, Shares may be awarded under the Plan in consideration of services
rendered to the Company or a Subsidiary prior to the award. If Shares are
awarded without the payment of a Purchase Price in cash, the Committee shall
make a determination (at the time of the award) of the value of the services
rendered by the Offeree and the sufficiency of the consideration to meet the
requirements of Section 6(c).
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<PAGE>
(d) PROMISSORY NOTE. To the extent that this Subsection (d) is
applicable, a portion of the Purchase Price or Exercise Price, as the case may
be, of Shares issued under the Plan may be payable by a full-recourse promissory
note, provided that (i) the par value of such Shares must be paid in lawful
money of the United States of America at the time when such Shares are
purchased, (ii) the Shares are security for payment of the principal amount of
the promissory note and interest thereon, and (iii) the interest rate payable
under the terms of the promissory note shall be no less than the minimum rate
(if any) required to avoid the imputation of additional interest under the Code.
Subject to the foregoing, the Committee (at its sole discretion) shall specify
the term, interest rate, amortization requirements (if any), and other
provisions of such note.
SECTION 9. ADJUSTMENT OF SHARES.
(a) GENERAL. In the event of a subdivision of the outstanding
Stock, a declaration of a dividend payable in Shares, a declaration of a
dividend payable in a form other than Shares in an amount that has a material
effect on the value of Shares, a combination or consolidation of the
outstanding Stock (by reclassification or otherwise) into a lesser number of
Shares, a recapitalization or a similar occurrence, the Committee shall make
appropriate adjustments in one or more of (i) the number of Shares available
for future grants under Section 5, (ii) the number of Shares covered by each
outstanding
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<PAGE>
Option or (iii) the Exercise Price under each outstanding Option.
(b) MERGERS; CONSOLIDATIONS. In the event that the Company is a
party to a merger or consolidation, outstanding Options shall be subject to the
agreement of merger or consolidation. Such agreement may provide for the
assumption of outstanding Options by the surviving corporation or its parent or
for their continuation by the Company (if the Company is the surviving
corporation). In the event the Company is not the surviving corporation and the
surviving corporation will not assume the outstanding Options, the agreement of
merger or consolidation may provide for payment of a cash settlement for
exercisable options equal to the difference between the amount to be paid for
one Share under such agreement and the Exercise Price and for the cancellation
of Options not exercised or settled, in either case without the Optionees'
consent.
(c) RESERVATION OF RIGHTS. Except as provided in this Section
9, an Optionee or Offeree shall have no rights by reason of any subdivision
or consolidation of shares of stock of any class, the payment of any dividend
or any other increase or decrease in the number of shares of stock of any
class. Any issue by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the number
or Exercise Price of Shares subject to an Option. The grant of an Option
pursuant to the Plan shall not affect in any way the right or power of the
Company to make
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adjustments, reclassifications, reorganizations or changes of its capital or
business structure, to merge or consolidate or to dissolve, liquidate, sell or
transfer all or any part of its business or assets.
SECTION 10. SECURITIES LAWS.
Shares shall not be issued under the Plan unless the issuance and
delivery of such Shares complies with (or is exempt from) all applicable
requirements of law, including (without limitation) the Securities Act of 1933,
as amended, the rules and regulations promulgated thereunder, state securities
laws and regulations, and the regulations of any stock exchange on which the
Company's securities may then be listed.
SECTION 11. NO EMPLOYMENT RIGHTS.
No provision of the Plan, nor any right or Option granted under the
Plan, shall be construed to give any person any right to become, to be treated
as, or to remain an Employee. The Company and its Subsidiaries reserve the
right to terminate any person's Service at any time and for any reason.
SECTION 12. DURATION AND AMENDMENTS.
(a) TERM OF THE PLAN. The Plan, as set forth herein, shall become
effective on the date of its adoption by the Board of Directors, subject to the
approval of the Company's stockholders. In the event that the stockholders fail
to approve the Plan within 12 months after its adoption by the
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Board of Directors, any Option grants or Stock awards already made shall be null
and void, and no additional Option grants or Stock awards shall be made after
such date. The Plan shall terminate automatically 10 years after its adoption
by the Board of Directors and may be terminated on any earlier date pursuant to
Subsection (b) below.
(b) RIGHT TO AMEND OR TERMINATE THE PLAN. The Board of Directors
may amend, suspend or terminate the Plan at any time and for any reason;
provided, however, that any amendment of the Plan which increases the number of
Shares available for issuance under the Plan (except as provided in Section 9),
or which materially changes the class of persons who are eligible for the grant
of ISOS, shall be subject to the approval of the Company's stockholders.
Stockholder approval shall not be required for any other amendment of the Plan.
(c) EFFECT OF AMENDMENT OR TERMINATION. No Shares shall be issued
or sold under the Plan after the termination thereof, except upon exercise of an
Option granted prior to such termination. The termination of the Plan, or any
amendment thereof, shall not affect any Share previously issued or any Option
previously granted under the Plan.
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SECTION 13. EXECUTION.
To record the amendment and restatement of the Plan by the Board of
Directors on September 2, 1992, the Company has caused its authorized officer to
execute the same.
VIAGENE, INC.
By /s/
---------------------
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THE OPTION GRANTED PURSUANT TO THIS INCENTIVE STOCK OPTION AGREEMENT
(THE "OPTION") AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") AND MAY NOT BE PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR
THE OPTION OR THE SHARES UNDER THE SECURITIES ACT, OR AN OPINION OF COUNSEL,
WHICH IS SATISFACTORY TO THE CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION
IS NOT REQUIRED.
IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS OPTION AND THE
SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF, OR ANY INTEREST THEREIN,
OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE PRIOR WRITTEN CONSENT OF
THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, EXCEPT AS PERMITTED
IN THE COMMISSIONER'S RULES.
1989 STOCK PLAN OF VIAGENE, INC.:
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT, entered into as of ________________, 19__, between
VIAGENE, INC., a Delaware corporation (the "Company"), and ____________________
(the "Optionee"),
W I T N E S S E T H:
WHEREAS the Company's Board of Directors has established the 1989
Stock Plan of Viagene, Inc., in order to provide selected employees, directors,
consultants and advisors of the Company and its Subsidiaries with an opportunity
to acquire Common Stock of the Company; and
WHEREAS the Committee has determined that it would be in the best
interests of the Company and its stockholders to grant the Incentive Stock
Option described in this Agreement to the Optionee as an inducement to enter
into or remain in the service of the Company and as an incentive for
extraordinary efforts during such service:
<PAGE>
N o w, T h e r e f o r e, it is agreed as follows:
SECTION 1. GRANT OF OPTION.
(a) OPTION. On the terms and conditions stated below, the Company
hereby grants to the Optionee the option to purchase ___________________________
(_______) Shares for the sum of _________________________ ($________) per Share,
which is agreed to be 100% of the fair market value thereof on the Date of
Grant. This option is intended to be an Incentive Stock Option.
(b) STOCK PLAN. This option is granted pursuant to the Plan, a copy
of which the optionee acknowledges having received and read. The provisions of
the Plan are incorporated into this Agreement by this reference.
(c) STOCKHOLDER APPROVAL. This option is granted subject to approval
by the stockholders of the Company to the amendment to the Plan adopted by the
Board of Directors on October 12, 1991 (the "Amendment"). Should the Amendment
not be approved by the stockholders of the Company, this grant shall be null and
void.
SECTION 2. NO TRANSFER OR ASSIGNMENT OF OPTION.
Except as otherwise provided in this Agreement, this option and the
rights and privileges conferred hereby shall not be transferred, assigned,
pledged or hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to sale under execution, attachment or similar process.
Upon any attempt to transfer, assign, pledge, hypothecate or
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otherwise dispose of this option, or of any right or privilege conferred hereby,
contrary to the provisions hereof, or upon any attempted sale under any
execution, attachment or similar process upon the rights and privileges
conferred hereby, this option and the rights and privileges conferred hereby
shall immediately become null and void.
SECTION 3. RIGHT TO EXERCISE.
(a) VESTING. Subject to the conditions stated herein, the right to
exercise this option shall accrue on a daily basis over the five-year period
commencing ____________________. The percentage of the total number of Shares
subject to this option with respect to which this option is exercisable at any
time shall be equal to the product of 0.000547945 times the number of days that
have elapsed since ___________________; provided, however, that no part of this
option shall be exercisable with respect to any number of shares until such time
as Optionee shall have completed six months of Service (as defined by and
determined in accordance with the Plan) from ___________________. The resulting
number of Shares shall be rounded to the nearest integer.
(b) PERIODS OF NONEXERCISABILITY. Any other provision of this
Agreement notwithstanding, the Company shall have the right to designate one or
more periods of time, each of which shall not exceed 18 consecutive months in
length, during which this option shall not be exercisable if the Company
determines (in its sole discretion) that such limitation on
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exercise could in any way facilitate a lessening of any restriction on transfer
pursuant to the Securities Act or any state securities laws with respect to any
issuance of securities by the Company, facilitate the registration or
qualification of any securities by the Company under the Securities Act or any
state securities laws, or facilitate the perfection of any exemption from the
registration or qualification requirements of the Securities Act or any
applicable state securities laws for the issuance or transfer of any securities.
Such limitation on exercise shall not alter the vesting schedule set forth in
Section 3(a) other than to limit the periods during which this option shall be
exercisable. The Optionee shall be notified in writing in advance of any such
designation by the Company.
(c) STOCKHOLDER APPROVAL. Any other provision of this Agreement
notwithstanding, this option shall not be exercisable at any time prior to the
approval of the Plan by the Company's stockholders.
SECTION 4. EXERCISE PROCEDURES.
(a) NOTICE OF EXERCISE. The Optionee or the Optionee's
representative may exercise this option by giving written notice to the
Secretary of the Company pursuant to Section 12(d). The notice shall specify
the election to exercise this option, the number of Shares for which it is being
exercised and the form of payment. The notice shall be signed by the person or
persons exercising this option. In the event that this option is being
exercised by the representative of the
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Optionee, the notice shall be accompanied by proof (satisfactory to the Company)
of the representative's right to exercise this option. The optionee or the
Optionee's representative shall deliver to the Secretary or Assistant Secretary
of the Company, at the time of giving the notice, payment in a form permissible
under Section 5 for the full amount of the Purchase Price.
(b) ISSUANCE OF SHARES. After receiving a proper notice of
exercise, the Company shall cause to be issued a certificate or certificates
for the Shares as to which this option has been exercised, registered in the
name of the person exercising this option (or in the names of such person and
his or her spouse as community property or as joint tenants with right of
survivorship). The Company shall cause such certificate or certificates to be
delivered to or upon the order of the person exercising this option.
SECTION 5. PAYMENT FOR STOCK.
The entire Purchase Price may be paid in lawful money of the United
States of America. Alternatively, all or part of the Purchase Price may be paid
by the surrender of Shares in good form for transfer. Such Shares must have
been owned for more than 12 months by the Optionee or the Optionee's
representative and must have a fair market value (as determined by the
Committee) on the date of exercise of this option which, together with any
amount paid in lawful money, is equal to the Purchase Price.
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SECTION 6. TERM AND EXPIRATION.
(a) BASIC TERM. This option shall in any event expire on the date
10 years after the Date of Grant.
(b) TERMINATION OF SERVICE (EXCEPT BY DEATH). If the Optionee's
service as an Employee terminates for any reason other than death, then this
option shall expire on the earliest of the following occasions:
(i) The expiration date determined pursuant to Subsection (a)
above;
(ii) The date 90 days after the termination of the Optionee's
service as an Employee for any reason other than Total and Permanent
Disability; or
(iii) The date six months after the termination of the
Optionee's service as an Employee by reason of Total and Permanent
Disability.
The Optionee may exercise all or part of this option at any time before its
expiration under the preceding sentence, but only to the extent that this option
had become exercisable before the Optionee's service terminated. The balance of
this option shall lapse when the Optionee's service as an Employee terminates.
In the event that the Optionee dies after the termination of service but before
the expiration of this option, all or part of this option may be exercised
(prior to expiration) by the executors or administrators of the Optionee's
estate or by any person who has acquired this option directly from the Optionee
by bequest or inheritance, but only to the extent that this
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option had become exercisable before the Optionee's service terminated.
(c) DEATH OF OPTIONEE. If the Optionee dies as an Employee, then
this option shall expire on the earlier of the following dates:
(i) The expiration date determined pursuant to Subsection (a)
above; or
(ii) The date six months after the Optionee's death.
All or part of this option may be exercised at any time before its expiration
under the preceding sentence by the executors or administrators of the
Optionee's estate or by any person who has acquired this option directly from
the Optionee by bequest or inheritance, but only to the extent that this option
had become exercisable before the Optionee's death. The balance of this option
shall lapse when the optionee dies.
(d) LEAVES OF ABSENCE. For purposes of this Section 6, the Employee
relationship shall be deemed to continue during any period when the Optionee is
on military leave, sick leave or other bona fide leave of absence (to be
determined in the sole discretion of the Committee). However, if the Optionee's
reemployment rights are not guaranteed by statute or by contract, then the
Employee relationship shall not be deemed to continue beyond the 90th day of
such period.
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SECTION 7. THE COMPANY'S RIGHT OF FIRST OFFER.
In the event that the Optionee proposes to sell, pledge or otherwise
transfer to any person any Shares acquired under this Agreement, or any interest
in such Shares, such Shares shall first be offered to the Company as follows:
(a) The Optionee shall promptly deliver a notice ("Notice") to the
Company stating (i) Optionee's bona fide intention to sell or transfer such
Shares, (ii) the number of such Shares to be sold or transferred, and the basic
terms and conditions of such sale or transfer, (iii) the price for which
Optionee proposes to sell or transfer such Shares, (iv) the name of the proposed
purchaser or transferee, and (v) proof satisfactory to the Company that the
proposed sale or transfer will not violate any applicable federal or state
securities laws. The Notice shall be signed by both Optionee and the proposed
purchaser or transferee and must constitute a binding commitment subject to the
Company's rights of first offer as set forth herein.
(b) Within 30 days after receipt of the Notice, the Company may
elect to purchase all of the Shares to which the Notice refers, at the price
per Share specified in the Notice. If the Company elects not to purchase all
such Shares, the Company may assign its right to purchase all such Shares.
The assignees may elect within 30 days after receipt by the Company of the
Notice to purchase all Shares to which the Notice refers, at the price per
Share specified in the Notice. An election to purchase shall be made by
written notice to Optionee. Payment
-8-
<PAGE>
for all Shares elected to be purchased pursuant to this Section 7 shall be made
within 30 days of the receipt by the Company of the Notice.
(c) If all of the Shares to which the Notice refers are not elected
to be purchased, as provided in subparagraph 7(b) hereof, the Optionee may sell
the Shares to any person named in the Notice at the price specified in the
Notice, provided that such sale or transfer is consummated within three months
of the date of said Notice to the Company, and provided, further, that any such
sale is made in compliance with applicable federal and state securities laws and
not in violation of any other contractual restrictions to which the Optionee is
bound. The third-party Transferee shall acquire the Shares of stock free and
clear of the Company's right of first offer.
(d) Any proposed transfer on terms and conditions different from
those set forth in the notice of transfer, as well as any subsequent proposed
transfer shall again be subject to the Company's right of first offer and shall
require compliance with the procedures described in this Section 7.
(e) Optionee agrees to cooperate affirmatively with the Company, to
the extent reasonably requested by the Company, to enforce rights and
obligations pursuant to this Agreement.
(f) Notwithstanding the above, neither the Company nor any assignee
of this Company under this Section 7 shall have any right under this Section 7
at any time subsequent to the closing of a public offering of the common stock
of the Company
-9-
<PAGE>
pursuant to a registration statement declared effective under the Securities
Act.
(g) This Section 7 shall not apply to a transfer by will or
intestate succession, provided that the Transferee agrees in writing to be
bound by the terms of this Agreement.
(h) If the Company makes available, at the time and place and in
the amount and form provided in this Agreement, the consideration for the
Shares to be purchased in accordance with the provisions of Section 7 of this
Agreement, then from and after such time the person from whom such Shares are
to be purchased shall no longer have any rights as a holder of such Shares
(other than the right to receive payment of such consideration in accordance
with this Agreement). Such Shares shall be deemed to have been purchased in
accordance with the applicable provisions hereof, whether or not the
certificate(s) therefor have been delivered as required by this Agreement.
(i) The Optionee shall have the right to transfer all or any
portion of Optionee's interest in the Shares issued under this Agreement
which have been delivered to Optionee, to a trust established by the Optionee
for the benefit of optionee, Optionee's spouse or children, without being
subject to the provisions of Section 7 hereof, provided that the trustee on
behalf of the trust shall agree in writing to be bound by the terms and
conditions of this Agreement. The transferee shall execute a copy of the
attached Exhibit A and file the same with the Secretary of the Company.
-10-
<PAGE>
(j) All certificates representing the Shares issued upon exercise
of this option shall, where applicable, have endorsed thereon the following
legend:
"The shares represented by this Certificate are subject to certain
restrictions on transfer and options to purchase such shares set forth in
an agreement between Viagene, Inc. and the registered holder, or such-
holder's predecessor in interest. Such agreement imposes certain transfer
restrictions and grants certain rights of first offer to the Corporation
(or its assigns) upon the sale of the shares. A copy of such agreement is
on file at the principal office of the Corporation and will be furnished
upon written request to the Secretary of the Corporation by the holder of
record of the Shares represented by this Certificate."
SECTION 8. LEGALITY OF INITIAL ISSUANCE.
No Shares shall be issued upon the exercise of this option unless and
until the Company has determined that:
(a) It and the Optionee have taken any actions required to register
the Shares under the Securities Act or to perfect an exemption from the
registration requirements thereof;
(b) Any applicable listing requirement of any stock exchange on
which Stock is listed has been satisfied; and
(c) Any other applicable provision of state or federal law has been
satisfied
SECTION 9. NO REGISTRATION RIGHTS.
The Company may, but shall not be obligated to, register or qualify
the sale of Shares under the Securities Act or any other applicable law. The
Company shall not be obligated
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<PAGE>
to take any affirmative action in order to cause the sale of Shares under this
Agreement to comply with any law.
SECTION 10. RESTRICTIONS ON TRANSFER OF SHARES.
(a) RESTRICTIONS. Regardless of whether the offering and sale of
Shares under the Plan have been registered under the Securities Act or have been
registered or qualified under the securities laws of any state, the Company may
impose restrictions upon the sale, pledge or other transfer of such Shares
(including the placement of appropriate legends on stock certificates) if, in
the judgment of the Company and its counsel, such restrictions are necessary or
desirable in order to achieve compliance with the provisions of the Securities
Act, the securities laws of any state or any other law.
(b) INVESTMENT INTENT AT GRANT. The Optionee represents and agrees
that the Shares to be acquired upon exercising this option will be acquired for
investment, and not with a view to the sale or distribution thereof.
(c) INVESTMENT INTENT AT EXERCISE. In the event that the sale of
Shares under the Plan is not registered under the Securities Act but an
exemption is available which requires an investment representation or other
representation, the Optionee shall represent and agree at the time of exercise
that the Shares being acquired upon exercising this option are being acquired
for investment, and not with a view to the sale or distribution thereof, and
shall make such other representations
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<PAGE>
as are deemed necessary or appropriate by the Company and its counsel.
(d) LEGEND. All certificates evidencing Shares acquired under this
Agreement in an unregistered transaction shall bear the following restrictive
legend (and such other restrictive legends as are required or deemed advisable
under the provisions of any applicable law):
"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH
ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL,
THAT SUCH REGISTRATION IS NOT REQUIRED."
(e) REMOVAL OF LEGENDS. If, in the opinion of the Company and its
counsel, any legend placed on a stock certificate representing Shares sold under
this Agreement is no longer required, the holder of such certificate shall be
entitled to exchange such certificate for a certificate representing the same
number of Shares but lacking such legend.
(f) ADMINISTRATION. Any determination by the Company and its
counsel in connection with any of the matters set forth in this Section 10
shall be conclusive and binding on the Optionee and all other persons.
SECTION 11. SHARES AND ADJUSTMENTS.
(a) GENERAL. In the event of a subdivision of the outstanding
Shares, a declaration of a dividend payable in Shares, a declaration of a
dividend payable in a form other than Shares in an amount that has a material
effect on the value of
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<PAGE>
Shares, a combination or consolidation of the outstanding Shares (by
reclassification or otherwise) into a lesser number of Shares, a
recapitalization or a similar occurrence, the Committee shall make appropriate
adjustments in one or both of (i) the number of Shares covered by this option or
(ii) the Exercise Price.
(b) MERGERS; CONSOLIDATIONS. In the event that the Company is a
party to a merger or consolidation, this option shall be subject to the
agreement of merger or consolidation. Such agreement may provide for the
assumption of this option by the surviving corporation or its parent or for
their continuation by the Company (if the Company is the surviving corporation).
In the event the Company is not the surviving corporation and the surviving
corporation will not assume this option, the agreement of merger or
consolidation may provide for payment of a cash settlement for exercisable
options equal to the difference between the amount to be paid for one Share
under this agreement and the Exercise Price and for its cancellation if not
exercised or settled, in either case without the Optionee's consent.
(c) RESERVATION OF RIGHTS. Except as provided in this Section 11,
the Optionee shall have no rights by reason of any subdivision or consolidation
of shares of stock of any class, the payment of any dividend or any other
increase or decrease in the number of shares of stock of any class. Any issue
by the Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall
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<PAGE>
not affect, and no adjustment by reason thereof shall be made with respect to,
the number or Exercise Price of the Shares subject to this option. The grant of
this option shall not affect in any way the right or power of the Company to
make adjustments, reclassifications, reorganizations or changes of its capital
or business structure, to merge or consolidate or to dissolve, liquidate, sell
or transfer all or any part of its business or assets.
SECTION 12. MISCELLANEOUS PROVISIONS.
(a) WITHHOLDING TAXES. In the event that the Company determines
that it is required to withhold foreign, federal, state or local tax as a
result of the exercise of this option, the Optionee, as a condition to the
exercise of this option, shall make arrangements satisfactory to the Company
to enable it to satisfy all withholding requirements. The Optionee shall
also make arrangements satisfactory to the Company to enable it to satisfy
any withholding requirements that may arise in connection with the
disposition of Shares purchased by exercising this option.
(b) RIGHTS AS A STOCKHOLDER. Neither the Optionee nor the Optionee's
representative shall have any rights as a stockholder with respect to any Shares
subject to this option until such Shares have been issued in the name of the
Optionee or the Optionee's representative.
(c) NO EMPLOYMENT RIGHTS. Nothing in this Agreement shall be
construed as giving the Optionee the right to be
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<PAGE>
retained as an Employee. The Company reserves the right to terminate the
optionee's service at any time, with or without cause.
(d) NOTICE. Any notice required by the terms of this Agreement
shall be given in writing and shall be deemed effective upon personal
delivery or upon deposit with the United States Postal Service, by registered
or certified mail with postage and fees prepaid and addressed to the party
entitled to such notice at the address shown below such party's signature on
this Agreement, or at such other address as such party may designate by 10
days' advance written notice to the other party to this Agreement.
(e) ENTIRE AGREEMENT. This Agreement and the Plan constitute the
entire contract between the parties hereto with regard to the subject matter
hereof.
(f) CHOICE OF LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California, as such laws
are applied to contracts entered into and performed in such State.
SECTION 13. DEFINITIONS.
(a) "AGREEMENT" shall mean this Incentive Stock Option Agreement.
(b) "BOARD" shall mean the Board of Directors of the Company, as
constituted from time to time.
(c) "CODE" shall mean the Internal Revenue Code of 1986, as
amended.
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<PAGE>
(d) "COMMITTEE" shall mean the committee of the Board described in
Section 3 of the Plan or, if none has been appointed, the full Board.
(e) "DATE OF GRANT" shall mean the date on which the Committee
resolved to grant this option, which is also the date as of which this Agreement
is entered into.
(f) "EMPLOYEE" shall mean any individual who is a common-law
employee of the Company or of a Subsidiary.
(g) "EXERCISE PRICE" shall mean the amount for which one Share
may be purchased upon exercise of this option, as specified in Section l(a).
(h) "INCENTIVE STOCK OPTION" shall mean an employee incentive
stock option described in section 422A(b) of the Code.
(i) "PLAN" shall mean the 1989 Stock Plan of Viagene, Inc., as in
effect on the Date of Grant.
(j) "PURCHASE PRICE" shall mean the Exercise Price multiplied by
the number of Shares with respect to which this option is being exercised.
(k) "RIGHT OF FIRST OFFER" shall mean the Company's right of first
offer described in Section 7.
(1) "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
(m) "SHARE" shall mean one share of Stock, as adjusted in
accordance with Section 11 (if applicable).
(n) "STOCK" shall mean the Common Stock of the Company.
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<PAGE>
(o) "SUBSIDIARY" shall mean any corporation, if the Company and/or
one or more other Subsidiaries own not less than 50% of the total combined
voting power of all classes of outstanding stock of such corporation. A
corporation that attains the status of Subsidiary on a date after adoption of
the Plan shall be considered a Subsidiary commencing as of such date.
(p) "TOTAL AND PERMANENT DISABILITY" shall mean that the
Optionee is unable to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment which can be
expected to result in death or which has lasted, or can be expected to last,
for a continuous period of not less than six months.
(q) "TRANSFEREE" shall mean any person to whom the Optionee has
directly or indirectly transferred any Share acquired under this Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed on its behalf by its officer duly authorized to act on behalf of the
Committee, and the Optionee has personally executed this Agreement.
OPTIONEE VIAGENE, INC.
By
- -------------------------------- -----------------------------
Optionee's Address: Company's Address:
11075 Roselle Street
- -------------------------------- San Diego, CA 92121
- --------------------------------
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<PAGE>
EXHIBIT A
ACKNOWLEDGMENT OF AND AGREEMENT TO BE BOUND
BY THE INCENTIVE STOCK OPTION AGREEMENT OF
VIAGENER, INC.
A DELAWARE CORPORATION
The undersigned, as transferee of shares of VIAGENE, INC., hereby
acknowledges that he or she has read and reviewed the terms of the Incentive
Stock Option Agreement of Viagene, Inc. and hereby agrees to be bound by the
terms and conditions thereof, as if the undersigned had executed said Agreement
as an original party thereto.
Dated: , 19 .
-------------- ---
---------------------------------------
<PAGE>
ACKNOWLEDGMENT OF RECEIPT OF COPY
OF SECTION 260.141.11 OF
THE CALIFORNIA CORPORATE
SECURITIES RULES
Pursuant to the grant to the undersigned of an option to purchase
shares of Common Stock of Viagene, Inc., under that Incentive Stock Option
Agreement dated as of ____________, 19__, the undersigned hereby acknowledges
that he or she received a copy of section 260.141.11 of the California
Corporation Securities Rules as required by subsection (a) thereof, and that
such receipt occurred at the same time as the undersigned entered into the
aforementioned Incentive Stock Option Agreement.
---------------------------------------
<PAGE>
EXHIBIT A
ACKNOWLEDGMENT OF AND AGREEMENT TO BE BOUND
BY THE NONSTATUTORY STOCK OPTION AGREEMENT OF
VIAGENE, INC.
A DELAWARE CORPORATION
The undersigned, as transferee of shares of VIAGENE, INC., hereby
acknowledges that he or she has read and reviewed the terms of the Nonstatutory
Stock Option Agreement of Viagene, Inc. and hereby agrees to be bound by the
terms and conditions thereof, as if the undersigned had executed said Agreement
as an original party thereto.
Dated:__________________ , 19___.
-----------------------------------------
<PAGE>
ACKNOWLEDGMENT OF RECEIPT OF COPY
OF SECTION 260.141.11 OF
THE CALIFORNIA CORPORATE
SECURITIES RULES
Pursuant to the grant to the undersigned of an option to purchase shares of
Common Stock of Viagene, Inc., under that Nonstatutory Stock Option Agreement
dated as of ________, 19__, the undersigned hereby acknowledges that he or she
received a copy of section 260.141.11 of the California Corporation Securities
Rules as required by subsection (a) thereof, and that such receipt occurred at
the same time as the undersigned entered into the aforementioned Nonstatutory
Stock Option Agreement.
-------------------------------------
<PAGE>
THE OPTION GRANTED PURSUANT TO THIS NONSTATUTORY STOCK OPTION
AGREEMENT (THE "OPTION") AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE
EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") AND MAY NOT BE PLEDGED, HYPOTHECATED, SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE OPTION OR THE SHARES UNDER THE SECURITIES ACT, OR AN OPINION
OF COUNSEL, WHICH IS SATISFACTORY TO THE CORPORATION AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED.
IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS OPTION AND THE
SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF, OR ANY INTEREST THEREIN,
OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE PRIOR WRITTEN CONSENT OF
THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, EXCEPT AS PERMITTED
IN THE COMMISSIONER'S RULES.
1989 STOCK PLAN OF VIAGENE, INC.:
NONSTATUTORY STOCK OPTION AGREEMENT
THIS AGREEMENT, entered into as of ________, 19__, between VIAGENE
INC., a Delaware corporation (the "Company"), and ___________________________
(the "Optionee"),
W I T N E S S E T H:
WHEREAS the Company's Board of Directors has established the 1989
Stock Plan of Viagene, Inc., in order to provide selected employees, directors,
consultants and advisors of the Company and its Subsidiaries with an opportunity
to acquire Common Stock of the Company; and
WHEREAS the Committee has determined that it would be in the best
interests of the Company and its stockholders to grant the Nonstatutory Stock
Option described in this Agreement to the Optionee as an inducement to enter
into or remain in the service of the Company and as an incentive for
extraordinary efforts during such service:
<PAGE>
N O W, T H E R E F O R E, it is agreed as follows:
SECTION 1. GRANT OF OPTION.
(a) OPTION. On the terms and conditions stated
below, the Company hereby grants to the Optionee the option to
purchase _______________________________________ (_______) Shares for
the sum of __________________________________ ($_______) per Share, which
is agreed to be 100% of the fair market value thereof on the Date of Grant.
This option is not intended to be an Incentive Stock Option.
(b) STOCK PLAN. This option is granted pursuant to the Plan, a copy
of which the Optionee acknowledges having received and read. The provisions of
the Plan are incorporated into this Agreement by this reference.
(c) STOCKHOLDER APPROVAL. This option is granted subject to
approval by the stockholders of the Company to the amendment to the Plan adopted
by the Board of Directors on October 12, 1991 (the "Amendment"). Should the
Amendment not be approved by the stockholders of the Company, this grant shall
be null and void.
SECTION 2. NO TRANSFER OR ASSIGNMENT OF OPTION.
Except as otherwise provided in this Agreement, this option and the
rights and privileges conferred hereby shall not be transferred, assigned,
pledged or hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to sale under execution, attachment or similar process.
Upon any attempt to transfer, assign, pledge, hypothecate or
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<PAGE>
otherwise dispose of this option, or of any right or privilege conferred hereby,
contrary to the provisions hereof, or upon any attempted sale under any
execution, attachment or similar process upon the rights and privileges
conferred hereby, this option and the rights and privileges conferred hereby
shall immediately become null and void.
SECTION 3. RIGHT TO EXERCISE.
(a) VESTING. Subject to the conditions stated herein, the right to
exercise this option shall accrue on a daily basis over the five-year period
commencing on __________________. The percentage of the total number of Shares
subject to this option with respect to which this option is exercisable at any
time shall be equal to the product of 0.000547945 times the number of days that
have elapsed since___________________; provided, however, that no part of this
option shall be exercisable with respect to any number of Shares until such time
as the Optionee shall have completed six months of Service (as defined by and
determined in accordance with the Plan) from ____________________________. The
resulting number of Shares shall be rounded to the nearest integer.
(b) PERIODS OF NONEXERCISABILITY. Any other provision of this
Agreement notwithstanding the Company shall have the right to designate one or
more periods of time, each of which shall not exceed 18 consecutive months in
length, during which this option shall not be exercisable if the Company
determines (in its sole discretion) that such limitation on
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<PAGE>
exercise could in any way facilitate a lessening of any restriction on transfer
pursuant to the Securities Act or any state securities laws with respect to any
issuance of securities by the Company, facilitate the registration or
qualification of any securities by the Company under the Securities Act or any
state securities laws, or facilitate the perfection of any exemption from the
registration or qualification requirements of the Securities Act or any
applicable state securities laws for the issuance or transfer of any securities.
Such limitation on exercise shall not alter the vesting schedule set forth in
Section 3(a) other than to limit the periods during which this option shall be
exercisable. The Optionee shall be notified in writing in advance of any such
designation by the Company.
(c) STOCKHOLDER APPROVAL. Any other provision of this Agreement
notwithstanding, this option shall not be exercisable at any time prior to the
approval of the Plan by the Company's stockholders.
SECTION 4. EXERCISE PROCEDURES.
(a) NOTICE OF EXERCISE. The Optionee or the Optionee's
representative may exercise this option by giving written notice to the
Secretary of the Company pursuant to Section 12(d). The notice shall specify
the election to exercise this option, the number of Shares for which it is being
exercised and the form of payment. The notice shall be signed by the person or
persons exercising this option. In the event that this option is being
exercised by the representative of the
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<PAGE>
Optionee, the notice shall be accompanied by proof (satisfactory to the Company)
of the representative's right to exercise this option. The Optionee or the
Optionee's representative shall deliver to the Secretary or Assistant Secretary
of the Company, at the time of giving the notice, payment in a form permissible
under Section 5 for the full amount of the Purchase Price.
(b) ISSUANCE OF SHARES. After receiving a proper notice of exercise,
the Company shall cause to be issued a certificate or certificates for the
Shares as to which this option has been exercised, registered in the name of the
person exercising this option (or in the names of such person and his or her
spouse as community property or as joint tenants with right of survivorship).
The Company shall cause such certificate or certificates to be delivered to or
upon the order of the person exercising this option.
SECTION 5. PAYMENT FOR STOCK.
The entire Purchase Price may be paid in lawful money of the United
States of America. Alternatively, all or part of the Purchase Price may be paid
by the surrender of Shares in good form for transfer. Such Shares must have
been owned for more than 12 months by the Optionee or the Optionee's
representative and must have a fair market value (as determined by the
Committee) on the date of exercise of this option which, together with any
amount paid in lawful money, is equal to the Purchase Price.
-5-
<PAGE>
SECTION 6. TERM AND EXPIRATION.
(a) BASIC TERM. This option shall in any event expire on the date 10
years after the Date of Grant.
(b) TERMINATION OF SERVICE (EXCEPT BY DEATH). If the Optionee's
service as an Employee terminates for any reason other than death, then this
option shall expire on the earliest of the following occasions:
(i) The expiration date determined pursuant to Subsection (a)
above;
(ii) The date 90 days after the termination of the Optionee's
service as an Employee for any reason other than Total and Permanent
Disability; or
(iii) The date six months after the termination of the Optionee's
service as an Employee by reason of Total and Permanent Disability.
The Optionee may exercise all or part of this option at any time before its
expiration under the preceding sentence, but only to the extent that this option
had become exercisable before the Optionee's service terminated. The balance of
this option shall lapse when the Optionee's service as an Employee terminates.
In the event that the Optionee dies after the termination of service but before
the expiration of this option, all or part of this option may be exercised
(prior to expiration) by the executors or administrators of the Optionee's
estate or by any person who has acquired this option directly from the Optionee
by bequest or inheritance, but only to the extent that this
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<PAGE>
option had become exercisable before the Optionee's service terminated.
(c) DEATH OF OPTIONEE. If the Optionee dies as an Employee, then
this option shall expire on the earlier of the following dates:
(i) The expiration date determined pursuant to
Subsection (a) above; or
(ii) The date six months after the Optionee's death.
All or part of this option may be exercised at any time before its expiration
under the preceding sentence by the executors or administrators of the
Optionee's estate or by any person who has acquired this option directly from
the Optionee by bequest or inheritance, but only to the extent that this option
had become exercisable before the Optionee's death. The balance of this option
shall lapse when the Optionee dies.
(d) LEAVES OF ABSENCE. For purposes of this Section 6, the Employee
relationship shall be deemed to continue during any period when the Optionee is
on military leave, sick leave or other bona fide leave of absence (to be
determined in the sole discretion of the Committee). However, if the Optionee's
reemployment rights are not guaranteed by statute or by contract, then the
Employee relationship shall not be deemed to continue beyond the 90th day of
such period.
-7-
<PAGE>
SECTION 7. THE COMPANY'S RIGHT OF FIRST OFFER.
In the event that the Optionee proposes to sell, pledge or otherwise
transfer to any person any Shares acquired under this Agreement, or any interest
in such Shares, such Shares shall first be offered to the Company as follows:
(a) The Optionee shall promptly deliver a notice ("Notice") to the
Company stating (i) Optionee's bona fide intention to sell or transfer such
Shares, (ii) the number of such Shares to be sold or transferred, and the basic
terms and conditions of such sale or transfer, (iii) the price for which
Optionee proposes to sell or transfer such Shares, (iv) the name of the proposed
purchaser or transferee, and (v) proof satisfactory to the Company that the
proposed sale or transfer will not violate any applicable federal or state
securities laws. The Notice shall be signed by both Optionee and the proposed
purchaser or transferee and must constitute a binding commitment subject to the
Company's rights of first offer as set forth herein.
(b) Within 30 days after receipt of the Notice, the Company may elect
to purchase all of the Shares to which the Notice refers, at the price per Share
specified in the Notice. If the Company elects not to purchase all such Shares,
the Company may assign its right to purchase all such Shares. The assignees may
elect within 30 days after receipt by the Company of the Notice to purchase all
Shares to which the Notice refers, at the price per Share specified in the
Notice. An election to purchase shall be made by written notice to Optionee.
Payment
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<PAGE>
for all Shares elected to be purchased pursuant to this Section 7 shall be made
within 30 days of the receipt by the Company of the Notice.
(c) If all of the Shares to which the Notice refers are not elected
to be purchased, as provided in subparagraph 7(b) hereof, the Optionee may sell
the Shares to any person named in the Notice at the price specified in the
Notice, provided that such sale or transfer is consummated within three months
of the date of said Notice to the Company, and provided, further, that any such
sale is made in compliance with applicable federal and state securities laws and
not in violation of any other contractual restrictions to which the Optionee is
bound. The third-party Transferee shall acquire the Shares of stock free and
clear of the Company's right of first offer.
(d) Any proposed transfer on terms and conditions different from
those set forth in the notice of transfer, as well as any subsequent proposed
transfer shall again be subject to the Company's right of first offer and shall
require compliance with the procedures described in this Section 7.
(e) Optionee agrees to cooperate affirmatively with the Company, to
the extent reasonably requested by the Company, to enforce rights and
obligations pursuant to this Agreement.
(f) Notwithstanding the above, neither the Company nor any assignee
of the Company under this Section 7 shall have any right under this Section 7 at
any time subsequent to the closing of a public offering of the common stock of
the Company
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<PAGE>
pursuant to a registration statement declared effective under the Securities Act
of 1933.
(g) This Section 7 shall not apply to a transfer by will or
intestate succession, provided that the Transferee agrees in writing to be bound
by the terms of this Agreement.
(h) If the Company makes available, at the time and place and in the
amount and form provided in this Agreement, the consideration for the Shares to
be purchased in accordance with the provisions of Section 7 of this Agreement,
then from and after such time the person from whom such Shares are to be
purchased shall no longer have any rights as a holder of such Shares (other than
the right to receive payment of such consideration in accordance with this
Agreement). Such Shares shall be deemed to have been purchased in accordance
with the applicable provisions hereof, whether or not the certificate(s)
therefor have been delivered as required by this Agreement.
(i) The Optionee shall have the right to transfer all or any portion
of Optionee's interest in the Shares issued under this Agreement which have been
delivered to Optionee, to a trust established by the optionee for the benefit of
Optionee, Optionee's spouse or children, without being subject to the provisions
of Section 7 hereof, provided that the trustee on behalf of the trust shall
agree in writing to be bound by the terms and conditions of this Agreement. The
transferee shall execute a copy of the attached Exhibit A and file the same with
the Secretary of the Company.
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<PAGE>
(j) All certificates representing the Shares issued upon exercise of
this Option shall, where applicable, have endorsed thereon the following legend:
"The shares represented by this Certificate are subject to certain
restrictions on transfer and options to purchase such shares set forth in
an agreement between Viagene, Inc. and the registered holder, or such
holder's predecessor in interest. Such agreement imposes certain transfer
restrictions and grants certain rights of first offer to the Corporation
(or its assigns) upon the sale of the shares. A copy of such agreement is
on file at the principal office of the Corporation and will be furnished
upon written request to the Secretary of the Corporation by the holder of
record of the Shares represented by this Certificate."
SECTION 8. LEGALITY OF INITIAL ISSUANCE.
No Shares shall be issued upon the exercise of this option unless and
until the Company has determined that:
(a) It and the Optionee have taken any actions required to register
the Shares under the Securities Act or to perfect an exemption from the
registration requirements thereof;
(b) Any applicable listing requirement of any stock exchange on
which Stock is listed has been satisfied; and
(c) Any other applicable provision of state or federal law has been
satisfied.
SECTION 9. NO REGISTRATION RIGHTS.
The Company may, but shall not be obligated to, register or qualify
the sale of Shares under the Securities Act or any other applicable law. The
Company shall not be obligated
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to take any affirmative action in order to cause the sale of Shares under this
Agreement to comply with any law.
SECTION 10. RESTRICTIONS ON TRANSFER OF SHARES.
(a) RESTRICTIONS. Regardless of whether the offering and sale of
Shares under the Plan have been registered under the Securities Act or have been
registered or qualified under the securities laws of any state, the Company may
impose restrictions upon the sale, pledge or other transfer of such Shares
(including the placement of appropriate legends on stock certificates) if, in
the judgment of the Company and its counsel, such restrictions are necessary or
desirable in order to achieve compliance with the provisions of the Securities
Act, the securities laws of any state or any other law.
(b) INVESTMENT INTENT AT GRANT. The Optionee represents and agrees
that the Shares to be acquired upon exercising this option will be acquired for
investment, and not with a view to the sale or distribution thereof.
(c) INVESTMENT INTENT AT EXERCISE. In the event that the sale of
Shares under the Plan is not registered under the Securities Act but an
exemption is available which requires an investment representation or other
representation, the Optionee shall represent and agree at the time of exercise
that the Shares being acquired upon exercising this option are being acquired
for investment, and not with a view to the sale or distribution thereof, and
shall make such other representations
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as are deemed necessary or appropriate by the Company and its counsel.
(d) LEGEND. All certificates evidencing Shares acquired under this
Agreement in an unregistered transaction shall bear the following restrictive
legend (and such other restrictive legends as are required or deemed advisable
under the provisions of any applicable law):
"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH
ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL,
THAT SUCH REGISTRATION IS NOT REQUIRED."
(e) REMOVAL OF LEGENDS. If, in the opinion of the Company and its
counsel, any legend placed on a stock certificate representing Shares sold under
this Agreement is no longer required, the holder of such certificate shall be
entitled to exchange such certificate for a certificate representing the same
number of Shares but lacking such legend.
(f) ADMINISTRATION. Any determination by the Company and its counsel
in connection with any of the matters set forth in this Section 10 shall be
conclusive and binding on the Optionee and all other persons.
SECTION 11. SHARES AND ADJUSTMENTS.
(a) GENERAL. In the event of subdivision of the outstanding Shares,
a declaration of a dividend payable in Shares, a declaration of a dividend
payable in a form other than Shares in an amount that has a material effect on
the value of
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Shares, a combination or consolidation.of the outstanding Shares (by
reclassification or otherwise) into a lesser number of Shares, a
recapitalization or a similar occurrence, the Committee shall make appropriate
adjustments in one or both of (i) the number of Shares covered by this option or
(ii) the Exercise Price.
(b) MERGERS; CONSOLIDATIONS. In the event that the Company is a
party to a merger or consolidation, this option shall be subject to the
agreement of merger or consolidation. Such agreement may provide for the
assumption of this option by the surviving corporation or its parent or for
their continuation by the Company (if the Company is the surviving corporation).
In the event the Company is not the surviving corporation and the surviving
corporation will not assume this option, the agreement of merger or
consolidation may provide for payment of a cash settlement for exercisable
options equal to the difference between the amount to be paid for one Share
under such agreement and the Exercise Price and for its cancellation if not
exercised or settled, in either case without the Optionee's consent.
(c) RESERVATION OF RIGHTS. Except as provided in this Section 11,
the Optionee shall have no rights by reason of any subdivision or consolidation
of shares of stock of any class, the payment of any dividend or any other
increase or decrease in the number of shares of stock of any class. Any issue
by the Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall
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not affect, and no adjustment by reason thereof shall be made with respect to,
the number or Exercise Price of the Shares subject to this option. The grant of
this option shall not affect in any way the right or power of the Company to
make adjustments, reclassifications, reorganizations or changes of its capital
or business structure, to merge or consolidate or to dissolve, liquidate, sell
or transfer all or any part of its business or assets.
SECTION 12. MISCELLANEOUS PROVISIONS.
(a) WITHHOLDING TAXES. In the event that the Company determines
that it is required to withhold foreign, federal, state or local tax as a result
of the exercise of this option, the Optionee, as a condition to the exercise of
this option, shall make arrangements satisfactory to the Company to enable it to
satisfy all withholding requirements. The Optionee shall also make arrangements
satisfactory to the Company to enable it to satisfy any withholding requirements
that may arise in connection with the disposition of Shares purchased by
exercising this option.
(b) RIGHTS AS A STOCKHOLDER. Neither the Optionee nor the Optionee's
representative shall have any rights as a stockholder with respect to any Shares
subject to this option until such Shares have been issued in the name of the
Optionee or the Optionee's representative.
(c) NO EMPLOYMENT RIGHTS. Nothing in this Agreement shall be
construed as giving the Optionee the right to be
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retained as an Employee. The Company reserves the right to terminate the
optionee's service at any time, with or without cause.
(d) NOTICE. Any notice required by the terms of this Agreement shall
be given in writing and shall be deemed effective upon personal delivery or upon
deposit with the United States Postal Service, by registered or certified mail
with postage and fees prepaid and addressed to the party entitled to such notice
at the address shown below such party's signature on this Agreement, or at such
other address as such party may designate by 10 days, advance written notice to
the other party to this Agreement.
(e) ENTIRE AGREEMENT. This Agreement and the Plan constitute the
entire contract between the parties hereto with regard to the subject matter
hereof.
(f) CHOICE OF Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California, as such laws
are applied to contracts entered into and performed in such State.
SECTION 13. DEFINITIONS.
(a) "AGREEMENT" shall mean this Nonstatutory Stock Option Agreement.
(b) "BOARD" shall mean the Board of Directors of the Company, as
constituted from time to time.
(c) "CODE" shall mean the Internal Revenue Code of 1986, as amended.
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(d) "COMMITTEE" shall mean the committee of the Board described in
Section 3 of the Plan or, if none has been appointed, the full Board.
(e) "DATE OF GRANT" shall mean the date on which the Committee
resolved to grant this option, which is also the date as of which this Agreement
is entered into.
(f) "EMPLOYEE" shall mean (i) any individual who is a common-law
employee of the Company or of a Subsidiary, (ii) a member of the Board of
Directors and (iii) an independent contractor who performs services for the
Company or a Subsidiary.
(g) "EXERCISE PRICE" shall mean the amount for which one Share may
be purchased upon exercise of this option, as specified in Section l(a).
(h) "INCENTIVE STOCK OPTION" shall mean an employee incentive stock
option described in section 422A(b) of the Code.
(i) "NONSTATUTORY STOCK OPTION" shall mean an employee stock option
not described in sections 422(b), 422A(b), 432(b) or 424(b) of the Code.
(j) "PLAN" shall mean the 1989 Stock Plan of Viagene, Inc., as in
effect on the Date of Grant.
(k) "PURCHASE PRICE" shall mean the Exercise Price multiplied by the
number of Shares with respect to which this option is being exercised.
(1) "RIGHT OF FIRST OFFER" shall mean the Company's right of first
offer described in Section 7.
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(m) "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
(n) "SHARE" shall mean one share of Stock, as adjusted in accordance
with Section 11 (if applicable).
(o) "STOCK" shall mean the Common Stock of the Company.
(p) "SUBSIDIARY" shall mean any corporation, if the Company and/or
one or more other Subsidiaries own not less than 50% of the total combined
voting power of all classes of outstanding stock of such corporation. A
corporation that attains the status of a Subsidiary on a date after adoption of
the Plan shall be considered a Subsidiary commencing as of such date.
(q) "TOTAL AND PERMANENT DISABILITY" shall mean that the Optionee is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted, or can be expected to last, for a continuous period
of not less than six months.
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(r) "TRANSFEREE" shall mean any person to whom the Optionee has
directly or indirectly transferred any Share acquired under this Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed on its behalf by its officer duly authorized to act on behalf of the
Committee, and the Optionee has personally executed this Agreement.
OPTIONEE VIAGENE, INC.
By
- --------------------------- ---------------------
Optionee's Address: Company's Address:
- --------------------------- 11075 Roselle Street
San Diego, CA 92121
- ---------------------------
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VIAGENE, INC.
AMENDED AND RESTATED 1993 INCENTIVE STOCK PLAN
ARTICLE 1. INTRODUCTION.
The Plan was originally adopted by the Board on October 27, 1993, and
was approved by the Company's stockholders on November 11, 1993. The Plan was
amended and restated by the Board of Directors on March 21, 1994. The purpose
of the Plan is to promote the long-term success of the Company and the creation
of stockholder value by (a) encouraging directors, key employees and consultants
to focus on critical long-range objectives, (b) encouraging the attraction and
retention of directors, key employees and consultants with exceptional
qualifications and (c) linking directors, key employees and consultants directly
to stockholder interests through increased stock ownership. The Plan seeks to
achieve this purpose by providing for Awards in the form of Restricted Shares,
Stock Units, Options (which may constitute incentive stock options or
nonstatutory stock options) or stock appreciation rights.
The Plan shall be governed by, and construed in accordance with, the
laws of the State of California.
ARTICLE 2. ADMINISTRATION.
2.1 COMMITTEE COMPOSITION. The Plan shall be administered by the
Committee. The Committee shall consist of two or more disinterested directors
of the Company, who shall be appointed by the Board. The Board also may appoint
a separate committee of the Board, composed of one or more directors of the
Company who need not be disinterested. Such separate committee may administer
the Plan with respect to Key Employees who are not officers or directors of the
Company, may grant Awards under the Plan to such Key Employees and may determine
all terms of such Awards, subject to any limitations that the Board may impose.
2.2 DISINTERESTED DIRECTORS. A member of the Board shall be deemed
to be "disinterested" only if he or she satisfies (a) such requirements as the
Securities and Exchange Commission may establish for disinterested
administrators acting under plans intended to qualify for exemption under Rule
16b-3 (or its successor) under the Exchange Act and (b) such requirements as
the Internal Revenue Service may establish for outside directors acting under
plans intended to qualify for exemption under Section 162(m)(4)(C) of the Code.
Subject to the foregoing, an Outside Director shall not fail to be
"disinterested" solely because he or she receives the NSO grants described in
Section 4.2.
<PAGE>
2.3 COMMITTEE RESPONSIBILITIES. The Committee shall (a) select the
Key Employees who are to receive Awards under the Plan, (b) determine the type,
number, vesting requirements and other conditions of such Awards, (c) interpret
the Plan and (d) make all other decisions relating to the operation of the Plan.
The Committee may adopt such rules or guidelines as it deems appropriate to
implement the Plan. The Committee's determinations under the Plan shall be
final and binding on all persons.
ARTICLE 3. SHARES AVAILABLE FOR GRANTS.
3.1 BASIC LIMITATION. Any Common Shares issued pursuant to the Plan
may be authorized but unissued shares or treasury shares. The aggregate number
of Restricted Shares, Stock Units and Options awarded under the Plan shall not
exceed 774,367. (No additional grants shall be made under the Prior Plan after
the Effective Date.) The limitation of this Section 3.1 shall be subject to
adjustment pursuant to Article 10.
3.2 ADDITIONAL SHARES. If any Restricted Shares, Stock Units or
Options are forfeited or if any Options terminate for any other reason before
being exercised, then such Restricted Shares, Stock Units or Options shall again
become available for Awards under the Plan. If any restricted shares or options
under the Prior Plan are forfeited or if any options under the Prior Plan
terminate for any other reason before being exercised, then such restricted
shares or options shall become available for additional Awards under this Plan.
However, if Options are surrendered upon the exercise of related SARS, then such
Options shall not be restored to the pool available for Awards.
3.3 DIVIDEND EQUIVALENTS. Any dividend equivalents distributed under
the Plan shall not be applied against the number of Restricted Shares, Stock
Units or Options available for Awards, whether or not such dividend equivalents
are converted into Stock Units.
ARTICLE 4. ELIGIBILITY.
4.1 GENERAL RULES. Only Key Employees (including, without
limitation, independent contractors who are not members of the Board) shall be
eligible for designation as Participants by the Committee. In addition, only
Key Employees who are common-law employees of the Company or a Subsidiary shall
be eligible for the grant of ISOS. Key Employees who are Outside Directors
shall only be eligible for the grant of the NSOs described in Section 4.2.
4.2 OUTSIDE DIRECTORS. Any other provision of the Plan
notwithstanding, the participation of Outside Directors in the Plan shall be
subject to the following restrictions:
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(a) Outside Directors shall receive no Awards other than the NSOs
described in this Section 4.2.
(b) Each Outside Director who first becomes a member of the Board
after the Effective Date shall receive a one-time grant of an NSO covering
10,000 Common Shares (subject to adjustment under Article 10). Such
Nonstatutory Option shall be granted on the date when such Outside Director
first joins the Board and shall become exercisable in equal daily
increments over a five-year period.
(c) Upon the conclusion of each regular annual meeting of the
Company's stockholders, each Outside Director who will continue serving as
a member of the Board thereafter shall receive an NSO covering 5,000 Common
Shares (subject to adjustment under Article 10). Such NSO shall become
exercisable in full on the first anniversary of the date of grant.
(d) All NSOs granted to an Outside Director under this Section 4.2
shall also become exercisable in full in the event of (i) the termination
of such outside Director's service because of death, total and permanent
disability or voluntary retirement at or after age 70 or (ii) a Change in
Control with respect to the Company.
(e) The Exercise Price under all NSOs granted to an Outside Director
under this Section 4.2 shall be equal to 100% of the Fair Market Value of a
Common Share on the date of grant, payable in one of the forms described in
Sections 6.1, 6.2 and 6.3.
(f) All NSOs granted to an Outside Director under this Section 4.2
shall terminate on the earliest of (i) the 10th anniversary of the date of
grant, (ii) the date three months after the termination of such Outside
Director's service for any reason other than death or total and permanent
disability or (iii) the date 12 months after the termination of such
Outside Director's service because of death or total and permanent
disability.
The Committee may provide that the NSOs that otherwise would be granted to an
Outside Director under this Section 4.2 shall instead be granted to an affiliate
of such Outside Director. Such affiliate shall then be deemed to be an Outside
Director for the purposes of the Plan, provided that the service-related vesting
and termination provisions pertaining to the NSOs shall be applied with regard
to the service of the Outside Director.
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4.3 TEN-PERCENT STOCKHOLDERS. A Key Employee who owns more than 10%
of the total combined voting power of all classes of outstanding stock of the
Company or any of its Subsidiaries shall not be eligible for the grant of an ISO
unless the requirements set forth in section 422(c)(6) of the Code are
satisfied.
ARTICLE 5. OPTIONS.
5.1 STOCK OPTION AGREEMENT. Each grant of an Option under the Plan
shall be evidenced by a Stock Option Agreement between the Optionee and the
Company. Such Option shall be subject to all applicable terms of the Plan and
may be subject to any other terms that are not inconsistent with the Plan. The
Stock Option Agreement shall specify whether the Option is an ISO or an NSO.
The provisions of the various Stock Option Agreements entered into under the
Plan need not be identical.
5.2 AWARDS NONTRANSFERABLE. No Option granted under the Plan shall
be transferable by the Optionee other than by will, by a beneficiary designation
executed by the Optionee and delivered to the Company or by the laws of descent
and distribution. An Option may be exercised during the lifetime of the
Optionee only by him or her or by his or her guardian or legal representative.
No Option or interest therein may be transferred, assigned, pledged or
hypothecated by the Optionee during his or her lifetime, whether by operation of
law or otherwise, or be made subject to execution, attachment or similar
process.
5.3 NUMBER OF SHARES. Each Stock Option Agreement shall specify the
number of Common Shares subject to the Option and shall provide for the
adjustment of such number in accordance with Article 10. Options granted to any
Optionee in a single calendar year shall in no event cover more than 200,000
Common Shares, subject to adjustment in accordance with Section 10.
5.4 EXERCISE PRICE. Each Stock Option Agreement shall specify the
Exercise Price. The Exercise Price under an ISO shall not be less than 100% of
the Fair Market Value of a Common Share on the date of grant, and the Exercise
Price under an NSO shall not be less than the par value of a Common Share.
5.5 EXERCISABILITY AND TERM. Each Stock Option Agreement shall
specify the date when all or any installment of the Option is to become
exercisable. The Stock Option Agreement shall also specify the term of the
Option; provided that the term of an ISO shall in no event exceed 10 years from
the date of grant. A Stock Option Agreement may provide for accelerated
exercisability in the event of the Optionee's death, disability or retirement or
other events and may pro-
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vide for expiration prior to the end of its term in the event of the termination
of the Optionee's service. NSOs may also be awarded in combination with
Restricted Shares or Stock Units, and such an Award may provide that the NSOs
will not be exercisable unless the related Restricted Shares or Stock Units are
forfeited.
5.6 EFFECT OF CHANGE IN CONTROL. The Committee may determine, at the
time of granting an Option or thereafter, that such Option (and any SARs
included therein) shall become fully exercisable as to all Common Shares subject
to such Option in the event that a Change in Control occurs with respect to the
Company. If the Committee finds that there is at reasonable possibility that,
within the succeeding six months, a Change in Control will occur with respect to
the Company, then the Committee may determine that all outstanding Options (and
any SARs included therein) shall become fully exercisable as to all Common
Shares subject to such Options.
5.7 MODIFICATION OR ASSUMPTION OF OPTIONS. Within the limitations of
the Plan, the Committee may modify, extend or assume outstanding options or may
accept the cancellation of outstanding options (whether granted by the Company
or by another issuer) in return for the grant of new options for the same or a
different number of shares and at the same or a different exercise price. The
foregoing notwithstanding, no modification of an option shall, without the
consent of the Optionee, alter or impair his or her rights or obligations under
such Option.
ARTICLE 6. PAYMENT FOR OPTION SHARES.
6.1 GENERAL RULE. The entire Exercise Price of Common Shares issued
upon exercise of Options shall be payable in cash at the time when such Common
Shares are purchased, except as follows:
(a) In the case of an ISO granted under the Plan, payment shall be
made only pursuant to the express provisions of the applicable Stock Option
Agreement. The Stock Option Agreement may specify that payment may be made
in any form(s) described in this Article 6.
(b) In the case of an NSO, the Committee may at any time accept
payment in any form(s) described in this Article 6.
6.2 SURRENDER OF STOCK. To the extent that this Section 6.2 is
applicable, payment for all or any part of the Exercise Price may be made with
Common Shares which have already been owned by the optionee for more than six
months. Such Common Shares shall be valued at their Fair Market Value
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on the date when the new Common Shares are purchased under the Plan.
6.3 EXERCISE/SALE. To the extent that this Section 6.3 is
applicable, payment may be made by the delivery (on a form prescribed by the
Company) of an irrevocable direction to a securities broker approved by the
Company to sell Common Shares and to deliver all or part of the sales proceeds
to the Company in payment of all or part of the Exercise Price and any
withholding taxes.
6.4 EXERCISE/PLEDGE. To the extent that this Section 6.4 is
applicable, payment may be made by the delivery (on a form prescribed by the
Company) of an irrevocable direction to pledge Common Shares to a securities
broker or lender approved by the Company, as security for a loan, and to deliver
all or part of the loan proceeds to the Company in payment of all or part of the
Exercise Price and any withholding taxes.
6.5 PROMISSORY NOTE. To the extent that this Section 6.5 is
applicable, payment for all or any part of the Exercise Price may be made with a
full-recourse promissory note; provided that the par value of newly issued
Common Shares must be paid in lawful money of the U.S. at the time when such
Common Shares are purchased.
6.6 OTHER FORMS OF PAYMENT. To the extent that this Section 6.6 is
applicable, payment may be made in any other form that is consistent with
applicable laws, regulations and rules.
ARTICLE 7. STOCK APPRECIATION RIGHTS.
7.1 GRANT OF SARS. At the discretion of the Committee, an SAR may be
included in each Option granted under the Plan, other than the NSOs granted to
Outside Directors under Section 4.2. Such SAR shall entitle the Optionee (or any
person having the right to exercise the Option after his or her death) to
surrender to the Company, unexercised, all or any part of that portion of the
Option which then is exercisable and to receive from the Company Common Shares
or cash, or a combination of Common Shares and cash, as the Committee shall
determine. If an SAR is exercised, the number of Common Shares remaining
subject to the related Option shall be reduced accordingly, and vice versa.
The amount of cash and/or the Fair Market Value of Common Shares received upon
exercise of an SAR shall, in the aggregate, be equal to the amount by which the
Fair Market Value (on the date of surrender) of the Common Shares subject to the
surrendered portion of the Option exceeds the Exercise Price. In no event shall
any SAR be exercised if such Fair Market Value does not exceed the Exercise
Price. An SAR may be included in an ISO only at the time of -grant but may be
included in an NSO at the
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time of grant or at any subsequent time, but not later than six months before
the expiration of such NSO.
7.2 EXERCISE OF SARS. An SAR may be exercised to the extent that the
option in which it is included is exercisable, subject to the restrictions
imposed by Rule 16b-3 (or its successor) under the Exchange Act, if applicable.
If, on the date when an option expires, the Exercise Price under such Option is
less than the Fair Market Value on such date but any portion of such Option has
not been exercised or surrendered, then any SAR included in such Option shall
automatically be deemed to be exercised as of such date with respect to such
portion. An Option granted under the Plan may provide that it will be
exercisable as an SAR only in the event of a Change in Control.
ARTICLE 8. RESTRICTED SHARES AND STOCK UNITS.
8.1 TIME, AMOUNT AND FORM OF AWARDS. Awards under the Plan may be
granted in the form of Restricted Shares, in the form of Stock Units, or in any
combination of both. Restricted Shares or Stock Units may also be awarded in
combination with NSOS, and such an Award may provide that the Restricted Shares
or Stock Units will be forfeited in the event that the related NSOs are
exercised.
8.2 PAYMENT FOR AWARDS. To the extent that an Award is granted in
the form of newly issued Restricted Shares, the Award recipient shall be
required to pay the Company in lawful money of the U.S. an amount equal to the
par value of such Restricted Shares. To the extent that an Award is granted in
the form of Stock Units or treasury shares, no cash consideration shall be
required of Award recipients.
8.3 VESTING CONDITIONS. Each Award of Restricted Shares or Stock
Units shall become vested, in full or in installments, upon satisfaction of the
conditions specified in the Stock Award Agreement. A Stock Award Agreement may
provide for accelerated vesting in the event of the Participant' s death,
disability or retirement or other events. The Committee may determine, at the
time of making an Award or thereafter, that such Award shall become fully vested
in the event that a Change in Control occurs with respect to the Company.
8.4 FORM AND TIME OF SETTLEMENT OF STOCK UNITS. Settlement of vested
Stock Units may be made in the form of cash, in the form of Common Shares, or in
any combination of both. Methods of converting Stock Units into cash may
include (without limitation) a method based on the average Fair Market Value of
Common Shares over a series of trading days. Vested Stock Units may be settled
in a lump sum or in installments. The distribution may occur or commence when
all vesting conditions applicable to the Stock Units have been satisfied or
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have lapsed, or it may be deferred to any later date. The amount of a deferred
distribution may be increased by an interest factor or by dividend equivalents.
Until an Award of Stock Units is settled, the number of such Stock Units shall
be subject to adjustment pursuant to Article 10.
8.5 DEATH OF RECIPIENT. Any Stock Units Award that becomes payable
after the recipient's death shall be distributed to the recipient's beneficiary
or beneficiaries. Each recipient of a Stock Units Award under the Plan shall
designate one or more beneficiaries for this purpose by filing the prescribed
form with the Company. A beneficiary designation may be changed by filing the
prescribed form with the Company at any time before the Award recipient's
death. If no beneficiary was designated or if no designated beneficiary
survives the Award recipient, then any Stock Units Award that becomes payable
after the recipient's death shall be distributed to the recipient's estate.
8.6 CREDITORS, RIGHTS. A holder of Stock Units shall have no rights
other than those of a general creditor of the Company. Stock Units represent an
unfunded and unsecured obligation of the Company, subject to the terms and
conditions of the applicable Stock Award Agreement.
ARTICLE 9. VOTING AND DIVIDEND RIGHTS.
9.1 RESTRICTED SHARES. The holders of Restricted Shares awarded
under the Plan shall have the same voting, dividend and other rights as the
Company's other stockholders. A Stock Award Agreement, however, may require
that the holders of Restricted Shares invest any cash dividends received in
additional Restricted Shares. Such additional Restricted Shares shall be
subject to the same conditions and restrictions as the Award with respect to
which the dividends were paid. Such additional Restricted Shares shall not
reduce the number of Common Shares available under Article 3.
9.2 STOCK UNITS. The holders of Stock Units shall have no voting
rights. Prior to settlement or forfeiture, any Stock Unit awarded under the
Plan shall carry with it a right to dividend equivalents. Such right entitles
the holder to be credited with an amount equal to all cash dividends paid on one
Common Share while the Stock Unit is outstanding. Dividend equivalents may be
converted into additional Stock Units. Settlement of dividend equivalents may
be made in the form of cash, in the form of Common Shares, or in a combination
of both. Prior to distribution, any dividend equivalents which are not paid
shall be subject to the same conditions and restrictions as the Stock Units to
which they attach.
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ARTICLE 10. PROTECTION AGAINST DILUTION.
10.1 ADJUSTMENTS. In the event of a subdivision of the outstanding
Common Shares, a declaration of a dividend payable in Common Shares, a
declaration of a dividend payable in a form other than Common Shares in an
amount that has a material effect on the price of Common Shares, a combination
or consolidation of the outstanding Common Shares (by reclassification or
otherwise) into a lesser number of Common Shares, a recapitalization, a spinoff
or a similar occurrence, the Committee shall make appropriate adjustments in one
or more of (a) the number of Options, Restricted Shares and Stock Units
available for future Awards under Article 3, (b) the number of NSOs to be
granted to Outside Directors under Section 4.2, (c) the number of Stock Units
included in any prior Award which has not yet been settled, (d) the number of
Common Shares covered by each outstanding Option or (e) the Exercise Price under
each outstanding Option. Except as provided in this Article 10, a Participant
shall have no rights by reason of any issue by the Company of stock of any class
or securities convertible into stock of any class, any subdivision or
consolidation of shares of stock of any class, the payment of any stock
dividend or any other increase or decrease in the number of shares of stock of
any class.
10.2 REORGANIZATIONS. In the event that the Company is a party to a
merger or other reorganization, outstanding Options, Restricted Shares and Stock
Units shall be subject to the agreement of merger or reorganization. Such
agreement may provide, without limitation, for the assumption of outstanding
Awards by the surviving corporation or its parent, for their continuation by
the Company (if the Company is a surviving corporation), for accelerated vesting
or for settlement in cash.
ARTICLE 11. LONG-TERM PERFORMANCE AWARDS.
The Company may grant long-term performance awards under other plans
or programs. Such awards may be settled in the form of Common Shares issued
under this Plan. Such Common Shares shall be treated for all purposes under the
Plan like Common Shares issued in settlement of Stock Units and shall reduce the
number of Common Shares available under Article 3.
ARTICLE 12. LIMITATION ON RIGHTS.
12.1 RETENTION RIGHTS. Neither the Plan nor any Option granted
under the Plan shall be deemed to give any individual a right to remain an
employee, consultant or director of the Company or a Subsidiary. The Company
and its Subsidiaries reserve the right to terminate the service of any employee,
consultant or director at any time, with or without cause, subject to applicable
laws, the Company's certificate
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of incorporation and by-laws and a written employment agreement (if any).
12.2 STOCKHOLDERS RIGHTS. A Participant shall have no dividend
rights, voting rights or other rights as a stockholder with respect to any
Common Shares covered by his or her Award prior to the issuance of a stock
certificate for such Common Shares. No adjustment shall be made for cash
dividends or other rights for which the record date is prior to the date when
such certificate is issued, except as expressly provided in Articles 8, 9 and
10.
12.3 REGULATORY REQUIREMENTS. Any other provision of the Plan
notwithstanding, the obligation of the Company to issue Common Shares under the
Plan shall be subject to all applicable laws, rules and regulations and such
approval by any regulatory body as may be required. The Company reserves the
right to restrict, in whole or in part, the delivery of Common Shares pursuant
to any Award prior to the satisfaction of all legal requirements relating to the
issuance of such Common Shares, to their registration, qualification or listing
or to an exemption from registration, qualification or listing.
ARTICLE 13. LIMITATION ON PAYMENTS.
13.1 APPLICATION. This Article 13 shall not apply to an Award unless
the Committee, at the time of making such Award, specified in writing that this
Article 13 shall apply to such Award. If this Article 13 applies to an Award,
then it shall prevail over any contrary provision of the Plan.
13.2 BASIC RULE. If this Article 13 is applicable and if the
independent auditors most recently selected by the Board (the "Auditors")
determine that any payment or transfer by the Company to or for the benefit of a
Key Employee, whether paid or payable (or transferred or transferable) pursuant
to the terms of this Plan or otherwise (a "Payment") , would be nondeductible by
the Company for federal income tax purposes because of the provisions concerning
"excess parachute payments" in section 280G of the Code, then the aggregate
present value of all Payments shall be reduced (but not below zero) to the
Reduced Amount. For purposes of this Article 13, the "Reduced Amount" shall be
the amount, expressed as a present value, which maximizes the aggregate present
value of the Payments without causing any Payment to be nondeductible by the
Company because of section 280G of the Code.
13.3 REDUCTION OF PAYMENTS. If the Auditors determine that any
Payment would be nondeductible by the Company because of section 280G of the
Code, then the Company shall promptly give the Key Employee notice to that
effect and a copy of the detailed calculation thereof and of the Reduced
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Amount, and the Key Employee may then elect, in his or her sole discretion,
which and how much of the Payments shall be eliminated or reduced (as long as
after such election the aggregate present value of the Payments equals the
Reduced Amount) and shall advise the Company in writing of his or her election
within 10 days of receipt of notice. If no such election is made by the Key
Employee within such 10-day period, then the Company may elect which and how
much of the Payments shall be eliminated or reduced (as long as after such
election the aggregate present value of the Payments equals the Reduced Amount)
and shall notify the Key Employee promptly of such election. For purposes of
this Article 13, present value shall be determined in accordance with section
280G(d)(4) of the Code. All determinations made by the Auditors under this
Article 13 shall be binding upon the Company and the Key Employee and shall be
made within 60 days of the date when a payment becomes payable or transferable.
As promptly as practicable following such determination and the elections
hereunder, the Company shall pay or transfer to or for the benefit of the Key
Employee such amounts as are then due to him or her under the Plan and shall
promptly pay or transfer to or for the benefit of the Key Employee in the future
such amounts as become due to him or her under the Plan.
13.4 OVERPAYMENTS AND UNDERPAYMENTS. As a result of uncertainty in
the application of section 280G of the Code at the time of an initial
determination by the Auditors hereunder, it is possible that Payments will have
been made by the Company which should not have been made (an "Overpayment") or
that additional Payments which will not have been made by the Company could have
been made (an "Underpayment"), consistent in each case with the calculation of
the Reduced Amount hereunder. In the event that the Auditors, based upon the
assertion of a deficiency by the Internal Revenue Service against the Company or
the Key Employee which the Auditors believe has a high probability of success,
determine that an Overpayment has been made, such Overpayment shall be treated
for all purposes as a loan to the Key Employee which he or she shall repay to
the Company, together with interest at the applicable federal rate provided in
section 7872(f)(2) of the Code; provided, however, that no amount shall be
payable by the Key Employee to the Company if and to the extent that such
payment would not reduce the amount which is subject to taxation under section
4999 of the Code. In the event that the Auditors determine that an Underpayment
has occurred, such Underpayment shall promptly be paid or transferred by the
Company to or for the benefit of the Key Employee, together with interest at the
applicable federal rate provided in section 7872(f)(2) of the Code.
13.5 RELATED CORPORATIONS. For purposes of this Article 13, the
term "Company" shall include affiliated
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corporations to the extent determined by the Auditors in accordance with section
280G(d)(5) of the Code.
ARTICLE 14. WITHHOLDING TAXES.
14.1 GENERAL. To the extent required by applicable federal, state,
local or foreign law, the recipient of any payment or distribution under the
Plan shall make arrangements satisfactory to the Company for the satisfaction of
any withholding tax obligations that arise by reason of the receipt or vesting
of such payment or distribution. The Company shall not be required to issue any
Common Shares or make any cash payment under the Plan until such obligations are
satisfied.
14.2 SHARE WITHHOLDING. The Committee may permit a Participant to
satisfy all or part of his or her withholding or income tax obligations by
having the Company withhold a portion of any Common Shares that otherwise would
be issued to him or her or by surrendering a portion of any Common Shares that
previously were issued to him or her. Such Common Shares shall be valued at
their Fair Market Value on the date when taxes otherwise would be withheld in
cash. Any payment of taxes by assigning Common Shares to the Company may be
subject to restrictions, including any restrictions required by rules of the
Securities and Exchange Commission.
ARTICLE 15. ASSIGNMENT OR TRANSFER OF AWARDS.
Except as provided in Article 14, any Award granted under the Plan
shall not be anticipated, assigned, attached, optioned, garnished, transferred
or made subject to any creditor's process, whether voluntarily, involuntarily or
by operation of law. Any act in violation of this Article 15 shall be void.
However, this Article 15 shall not preclude a Participant from designating a
beneficiary who will receive any undistributed Awards in the event of the
Participant's death, nor shall it preclude a transfer by will or by the laws of
descent and distribution. In addition, neither this Article 15 nor any other
provision of the Plan shall preclude a Participant from transferring or
assigning Restricted Shares or Stock Units to (a) the trustee of a trust that is
revocable by such Participant alone, both at the time of the transfer or
assignment and at all times thereafter prior to such Participant's death, or (b)
the trustee of any other trust to the extent approved in advance by the
Committee in writing. A transfer or assignment of Restricted Shares or Stock
Units from such trustee to any person other than such Participant shall be
permitted only to the extent approved in advance by the Committee in writing,
and Restricted Shares or Stock Units held by such trustee shall be subject to
all of the conditions and restrictions set forth in the Plan and in the
applicable Stock Award Agreement, as if such trustee were a party to such
Agreement.
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ARTICLE 16. FUTURE OF THE PLAN.
16.1 TERM OF THE PLAN. The Plan, as set forth herein, shall become
effective on the Effective Date, subject to the approval of the Company's
stockholders. The Plan shall remain in effect until it is terminated under
Section 16.2, except that no ISOs shall be granted after March 20, 2004.
16.2 AMENDMENT OR TERMINATION. The Board may, at any time and for any
reason, amend or terminate the Plan, except that the provisions of Section 4.2
relating to the amount, price and timing of Option grants to Outside Directors
shall not be amended more than once in any six-month period. An amendment of
the Plan shall be subject to the approval of the Company's stockholders only to
the extent required by applicable laws, regulations or rules. No Awards shall
be granted under the Plan after the termination thereof. The termination of the
Plan, or any amendment thereof, shall not affect any Option previously granted
under the Plan.
ARTICLE 17. DEFINITIONS.
17.1 "AWARD" means any award of an Option (with or without a related
SAR), a Restricted Share or a Stock Unit under the Plan.
17.2 "BOARD" means the Company's Board of Directors, as constituted
from time to time.
17.3 "CHANGE IN CONTROL" means the occurrence of either of the
following events:
(a) A change in the composition of the Board, as a result of which
fewer than one-half of the incumbent directors are directors who either:
(i) Had been directors of the Company 24 months prior to such
change; or
(ii) Were elected, or nominated for election, to the Board with
the affirmative votes of at least a majority of the directors who had
been directors of the Company 24 months prior to such change and who
were still in office at the time of the election or nomination; or
(b) Any "person" (as such term is used in sections 13(d) and 14(d) of
the Exchange Act) by the acquisition or aggregation of securities is or
becomes the beneficial owner, directly or indirectly, of securities of the
Company representing 50% or more of the combined voting power of the
Company's then outstanding securities ordinarily (and apart from rights
accruing under special circumstances) having the right to vote at elections
of
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<PAGE>
directors (the "Base Capital Stock"); except that any change in the
relative beneficial ownership of the Company's securities by any person
resulting solely from a reduction in the aggregate number of outstanding
shares of Base Capital Stock, and any decrease thereafter in such person's
ownership of securities, shall be disregarded until such person increases
in any manner, directly or indirectly, such person's beneficial ownership
of any securities of the Company.
17.4 "CODE" means the Internal Revenue Code of 1986, as amended.
17.5 "COMMITTEE" means a committee of the Board, as described in
Article 2.
17.6 "COMMON SHARE" means one share of the Common Stock of the
Company.
17.7 "COMPANY" means Viagene, Inc., a Delaware corporation.
17.8 "EFFECTIVE DATE" means January 6, 1994.
17.9 "EXCHANGE ACT" means the Securities Exchange
Act of 1934, as amended.
17.10 "EXERCISE PRICE" means the amount for which one Common Share
may be purchased upon exercise of an Option, as specified in the applicable
Stock Option Agreement.
17.11 "FAIR MARKET VALUE" means the market price of Common Shares,
determined by the Committee as follows:
(a) If the Common Shares were traded over-the-counter on the date in
question but were not traded on the Nasdaq system or the Nasdaq National
Market, then the Fair Market Value shall be equal to the mean between the
last reported representative bid and asked prices quoted for such date by
the principal automated inter-dealer quotation system on which the Common
Shares are quoted or, if the Common Shares are not quoted on any such
system, the "Pink Sheets" published by the National Quotation Bureau, Inc.;
(b) If the Common Shares were traded over-the-counter on the date in
question and were traded on the Nasdaq system or the Nasdaq National
Market, then the Fair Market Value shall be equal to the last transaction
price quoted for such date by the Nasdaq system or the Nasdaq National
Market;
(c) If the Common Shares were traded on a stock exchange on the date
in question, then the Fair Market
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<PAGE>
Value shall be equal to the closing price reported by the applicable
composite transactions report for such date; and
(d) If none of the foregoing provisions is applicable, then the Fair
Market Value shall be determined by the Committee in good faith on such
basis as it deems appropriate.
Whenever possible, the determination of Fair Market Value by the Committee shall
be based on the prices reported in the Western Edition of THE WALL STREET
JOURNAL. Such determination shall be conclusive and binding on all persons.
17.12 "ISO" means an incentive stock option described in section
422(b) of the Code.
17.13 "KEY EMPLOYEE" means (a) a key common-law employee of the
Company or of a Subsidiary, as determined by the Committee, (b) an Outside
Director and (c) a consultant or adviser who provides services to the Company or
a Subsidiary as an independent contractor. Service as an Outside Director or as
an independent contractor shall be considered employment for all purposes of the
Plan, except as provided in Sections 4.1 and 4.2.
17.14 "NSO" means an employee stock option not described in
sections 422 or 423 of the Code.
17.15 "OPTION" means an ISO or NSO granted under the Plan and
entitling the holder to purchase one Common Share.
17.16 "OPTIONEE" means an individual or estate who holds an
option.
17.17 "OUTSIDE DIRECTOR" shall mean a member of the Board who is
not a common-law employee of the Company or of a Subsidiary.
17.18 "PARTICIPANT" means an individual or estate who holds an
Award.
17.19 "PLAN" means this Viagene, Inc. 1993 Incentive Stock Plan,
as it may be amended from time to time.
17.20 "PRIOR PLAN" means the 1989 Stock Plan of Viagene, Inc.
17.21 "RESTRICTED SHARE" means a Common Share awarded under the
Plan.
17.22 "SAR" means a stock appreciation right granted under the
Plan.
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<PAGE>
17.23 "STOCK AWARD AGREEMENT" means the agreement between the
Company and the recipient of a Restricted Share or Stock Unit which contains
the terms, conditions and restrictions pertaining to such Restricted Share or
Stock Unit.
17.24 "STOCK OPTION AGREEMENT" means the agreement between the
Company and an Optionee which contains the terms, conditions and restrictions
pertaining to his or her Option.
17.25 "STOCK UNIT" means a bookkeeping entry representing the
equivalent of one Common Share and awarded under the Plan.
17.26 "SUBSIDIARY" means any corporation, if the Company and/or
one or more other Subsidiaries own not less than 50% of the total combined
voting power of all classes of outstanding stock of such corporation. A
corporation that attains the status of a Subsidiary on a date after the
adoption of the Plan shall be considered a Subsidiary commencing as of such
date.
ARTICLE 18. EXECUTION.
To record the amendment and restatement of the Plan by the Board of
Directors on March 21, 1994, the Company has caused its duly authorized officer
to execute the same.
VIAGENE, INC.
By
-------------------------------
Robert T. Abbott
President and Chief Executive Officer
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VIAGENE, INC. 1993 INCENTIVE STOCK PLAN:
INCENTIVE STOCK OPTION AGREEMENT
Viagene, Inc., a Delaware corporation ("Viagene"), hereby grants an option to
purchase shares of its common stock to the optionee named below. The terms and
conditions of the option are set forth in this cover sheet, in the attachment
and in the Viagene, Inc. 1993 Incentive Stock Plan (the "Plan").
Date of Option Grant: ______________________ ____, 199__
Name of Optionee: ________________________________________________________
Optionee's Social Security Number: ____-____-____
Number of Shares of Viagene Common Stock Covered by Option: ________
Exercise Price per Share: $ ___.___
Vesting Start Date: _______________ ___, 199__
BY SIGNING THIS COVER SHEET, YOU AGREE TO ALL OF THE TERMS AND CONDITIONS
DESCRIBED IN THE ATTACHMENT AND IN THE PLAN.
Optionee: _______________________________________________________________
(Signature)
Viagene: ________________________________________________________________
(Signature)
Title: ____________________________________________
ATTACHMENT
<PAGE>
VIAGENE, INC 1993 INCENTIVE STOCK PLAN:
INCENTIVE STOCK OPTION AGREEMENT
INCENTIVE This option is intended to be an incentive stock option under
STOCK OPTION section 422 of Internal Revenue Code and will be interpreted
accordingly.
VESTING Your right to exercise this option vests on a daily basis over
the four-year period starting on the Vesting Start Date, as shown
on the cover sheet. The fraction of the total number of shares
for which this option will be exercisable at any given time is
equal to the product of 0.000684932 times the number of days of
Viagene service that have elapsed since the Vesting Start Date.
The resulting number of shares will be rounded to the nearest
whole number. No part of this option, however, is exercisable
until you have completed six consecutive months of service with
Viagene. No additional shares become exercisable after your
Viagene service has terminated for any reason.
In addition, the entire option vests and will be exercisable in
full in the event that Viagene is subject to a "Change in
Control" (as defined at the end of this Agreement).
TERM Your option will expire in any event at the close of business at
Viagene headquarters on the day before the 10th anniversary of
the Date of Grant, as shown on the cover sheet. (It will expire
earlier if your Viagene service terminates, as described below.)
REGULAR If your service as an employee, director, consultant or advisor
TERMINATION of Viagene (or any subsidiary) terminates for any reason except
death or total and permanent disability, then your option will
expire at close of business at Viagene headquarters on the 90th
day after your termination date.
Viagene determines when your service terminates for this purpose.
DEATH If you die as an employee, consultant or advisor of Viagene (or
any subsidiary), then your option will expire at the close of
business at Viagene headquarters on the date twelve months after
the date of death. During that twelve-month period, your
estate, heirs or beneficiary may exercise any previously
unexercised portion of your option.
Page 2 of 6
<PAGE>
DISABILITY If your service as an employee, director, consultant or
advisor of Viagene (or any subsidiary) terminates because of
your total and permanent disability, then your option will
expire at the close of business at Viagene headquarters on
the date twelve (12) months after your termination date.
"Total and permanent disability" means that you are unable
to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment
which can be expected to result in death or which has
lasted, or can be expected to last, for a continuous period
of no less than one year.
LEAVES OF ABSENCE For purposes of this option, your service does not terminate
when you go on a military leave, a sick leave or another
BONA FIDE leave of absence, if the leave was approved by
Viagene in writing. But your service will be treated as
terminating 90 days after you went on leave, unless your
right to return to active work is guaranteed by law or by
contract. And, your service terminates when the approved
leave ends, unless you immediately return to active work.
Viagene determines which leaves count for this purpose.
RESTRICTIONS Viagene will not permit you to exercise this option if the
ON EXERCISE issuance of shares at that time would violate any law or
regulation.
NOTICE OF When you wish to exercise this option, you must notify
EXERCISE Viagene by filing the proper "Notice or Exercise" form at
the address given on the form. Your notice must specify how
many shares you wish to purchase. Your notice must also
specify how your shares should be registered (in your name
only or in your and your spouse's names as community
property or as joint tenants with right of survivorship).
The notice will be effective, when it is received by
Viagene.
If someone else wants to exercise this option after your
death, that person must prove to Viagene's satisfaction that
he or she is entitled to do so.
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<PAGE>
FORM OF PAYMENT When you submit your notice of exercise, you must include
payment of the option price for the shares you are
purchasing. Payment may be made in one (or a combination of
two or more) of the following forms:
- Your personal check, a cashier's check or a money
order.
- Irrevocable directions to a securities broker approved
by Viagene to sell your option shares and to deliver all or
a portion of the sale proceeds to Viagene in payment of the
option price. (The balance of the sale proceeds, if any,
will be delivered to you.) The directions must be given by
signing a special "Notice of Exercise" form provided by
Viagene.
- Certificates for Viagene stock that you have owned for
at least 6 months, along with any forms needed to effect a
transfer of the shares to Viagene. The value of the shares,
determined as of the effective date of the option exercise,
will be applied to the option price.
WITHHOLDING You will not be allowed to exercise this option unless you
TAXES make acceptable arrangements to pay any withholding taxes
that may be due as a result of the option exercise.
RESTRICTIONS By signing this Agreement, you agree not to sell any option
ON RESALE shares at a time when applicable laws or Viagene policies
prohibit a sale. This restriction will apply as long as you
are an employee of Viagene (or a subsidiary).
TRANSFER OF Prior to your death, only you may exercise this option. You
OPTION cannot transfer or assign this option. For instance, you
may not sell this option or use it as security for a loan.
If you attempt to do any of these things, this option will
immediately become invalid. You may, however, dispose of
this option in your will or by a properly executed and
delivered beneficiary designation.
Regardless of any marital property settlement agreement
Viagene is not obligated to honor a notice of exercise from
your former spouse, nor is Viagene obligated to recognize
your former spouse's interest in your option in any other
way.
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<PAGE>
RETENTION Your option or this Agreement does not give you the right to
RIGHTS be retained by Viagene (or any subsidiaries) in any
capacity. Viagene (and any subsidiaries) reserves the right
to terminate your service at any time, with or without
cause.
STOCKHOLDER You, or your estate, beneficiary or heirs, have no rights as
RIGHTS a stockholder of Viagene until a certificate for your option
shares has been issued. No adjustments are made for
dividends or other rights if the applicable record date
occurs before your stock certificate is issued, except as
described in the Plan.
ADJUSTMENTS In the event of a stock split a stock dividend or similar
change in Viagene stock, the number of shares covered by
this option and the exercise price per share may be adjusted
pursuant to the Plan.
APPLICABLE LAW This Agreement will be interpreted and enforced under the
laws of the State of California.
THE PLAN AND The text of the Plan is incorporated in this Agreement by
OTHER AGREEMENTS reference.
This Agreement and the Plan constitute the entire
understanding between you and Viagene regarding this option.
Any prior agreements, commitments or negotiations concerning
this option are superseded.
DEFINITION OF For purposes of this Agreement, the term "Change in Control"
"CHANGE IN means:
CONTROL"
Page 5 of 6
<PAGE>
(1) A change in the composition of Viagene's Board of Directors as a result of
which fewer than one-half of the incumbent directors are directors (the
"Continuing Directors") who either
(a) Had been directors of Viagene 24 months prior to such
change; or
(b) Were elected, or nominated for election, to Viagene's Board
of Directors with the affirmative votes of a majority of the directors who had
been directors of Viagene 24 months prior to such change and who were still in
office at the time of the election or nomination; or
(2) Any "person" (as such term is used in sections 13 (d) and 14 (d) of the
Securities Exchange Act of 1934, as amended) by the acquisition or
aggregation of securities is or becomes the beneficial owner, directly or
indirectly, of securities of Viagene representing 50% or more of the
combined voting power of Viagene's then outstanding securities ordinarily
(and apart from rights accruing under special circumstances) having the,
right to vote at elections of directors (the "Base Capital Stock'), except
that any change in the relative beneficial ownership of Viagene's
securities by any person resulting solely from a reduction in the aggregate
number of outstanding shares of Base Capital Stock, and any decrease
thereafter in such person's ownership of securities, shall be disregarded
until such person increases in any manner, directly or indirectly, such
person's beneficial ownership of any securities of Viagene.
BY SIGNING THE COVER SHEET OF THIS AGREEMENT, YOU AGREE TO ALL OF THE TERMS AND
CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.
Page 6 of 6
<PAGE>
VIAGENE, INC. 1993 INCENTIVE STOCK PLAN:
INCENTIVE STOCK OPTION AGREEMENT
Viagene, Inc., a Delaware corporation ("Viagene"), hereby grants an option to
purchase shares of its common stock to the optionee named below. The terms and
conditions of the option are set forth in this cover sheet, in the attachment
and in the Viagene, Inc. 1993 Incentive Stock Plan (the "Plan").
Date of Option Grant: ______________________ ____, 199__
Name of Optionee: ________________________________________________________
Optionee's Social Security Number: ____-____-____
Number of Shares of Viagene Common Stock Covered by Option: ________
Exercise Price per Share: $ ___.___
Vesting Start Date: _______________ ___, 199__
BY SIGNING THIS COVER SHEET, YOU AGREE TO ALL OF THE TERMS AND CONDITIONS
DESCRIBED IN THE ATTACHMENT AND IN THE PLAN.
Optionee: _______________________________________________________________
(Signature)
Viagene: ________________________________________________________________
(Signature)
Title: ____________________________________________
ATTACHMENT
<PAGE>
VIAGENE, INC. 1993 INCENTIVE STOCK PLAN:
INCENTIVE STOCK OPTION AGREEMENT
INCENTIVE This option is intended to be an incentive stock option
STOCK OPTION under section 422 of the Internal Revenue Code and will be
interpreted accordingly.
VESTING Your right to exercise this option vests on a daily basis
over the five-year period starting on the Vesting Start
Date, as shown an the cover sheet. The fraction of the
total number of shares for which this option will be
exercisable at any given time is equal to the product of
0.000547645126 times the number of days of Viagene service
that have elapsed since the Vesting Start Date. The
resulting number of shares will be rounded to the nearest
whole number. No part of this option, however, is
exercisable until you have completed six consecutive months
of service with Viagene. No additional shares become
exercisable after your Viagene service has terminated for
any reason.
In addition, the entire option vests and will be exercisable
in full in the event that Viagene is subject to a "Change in
Control" (as defined at the end of this Agreement).
TERM Your option will expire in any event at the close of
business at Viagene headquarters on the day before the 10th
anniversary of the Date of Grant, as shown on the cover
sheet. (It will expire earlier if your Viagene service
terminates, as described below.)
REGULAR If your service as an employee of Viagene (or any
TERMINATION subsidiary) terminates for any reason except death or total
and permanent disability, then your option will expire at
the close of business at Viagene headquarters on the 90th
day after your termination date.
Viagene determines when your service terminates for this
purpose.
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<PAGE>
DEATH If you die as an employee of Viagene (or any subsidiary),
then your option will expire at the close of business at
Viagene headquarters on the date six months after the date
of death. During that six-month period, your estate, heirs
or beneficiary may exercise the vested portion of your
option.
DISABILITY If your service as an employee of Viagene (or any
subsidiary) terminates because of your total and permanent
disability, then your option will expire at the close of
business at Viagene headquarters on the date six months
after your termination date.
"Total and permanent disability" means that you are unable
to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment
which can be expected to result in death or which has
lasted, or can be expected to last, for a continuous period
of not less than one year.
LEAVES OF For purposes of this option, your service does not terminate
ABSENCE when you go on a military leave, a sick leave or another
BONA FIDE leave of absence, if the leave was approved by
Viagene in writing. But your service will be treated as
terminating 90 days after you went on leave, unless your
right to return to active work is guaranteed by law or by a
contract. And your service terminates in any event when the
approved leave ends, unless you immediately return to active
work.
Viagene determines which leaves count for this purpose.
RESTRICTIONS Viagene will not permit you to exercise this option if the
ON EXERCISE issuance of shares at that time would violate any law or
regulation.
NOTICE OF When you wish to exercise this option, you must notify
EXERCISE Viagene by filing the proper "Notice of Exercise" form at
the address given on the form. Facsimiles are not
acceptable. Your notice must specify how many shares you
wish to purchase. Your notice must also specify how your
shares should be registered (in your name only or in your
and your spouse's names as community property or as joint
tenants with right of survivorship). The notice will be
effective when it is received by Viagene.
-3-
<PAGE>
If someone else wants to exercise this option after your
death, that person must prove to Viagene's satisfaction that
he or she is entitled to do so.
FORM OF When you submit your notice of exercise, you must include
PAYMENT payment of the option price for the shares you are
purchasing. Payment may be made in one (or a combination of
two or more) of the following forms:
* Your personal check, a cashier's check or a money
order.
* Irrevocable directions to a securities broker approved
by Viagene to sell your option shares and to deliver
all or a portion of the sale proceeds to Viagene in
payment of the option price. (The balance of the sale
proceeds, if any, will be delivered to you.) The
directions must be given by signing a special "Notice
of Exercise" form provided by Viagene.
* Certificates for Viagene stock that you have owned for
at least six months, along with any forms needed to
effect a transfer of the shares to Viagene. The value
of the shares, determined as of the effective date of
the option exercise, will be applied to the option
price.
WITHHOLDING You will not be allowed to exercise this option unless you
TAXES make acceptable arrangements to pay any withholding taxes
that may be due as a result of the option exercise.
RESTRICTIONS By signing this Agreement, you agree not to sell any option
ON RESALE shares at a time when applicable laws or Viagene policies
prohibit a sale. This restriction will apply as long as you
are an employee of Viagene (or a subsidiary).
TRANSFER OF Prior to your death, only you may exercise this option. You
OPTION cannot transfer or assign this option. For instance, you
may not sell this option or use it as security for a loan.
If you attempt to do any of these things, this option will
immediately become invalid. You may, however, dispose of
this option in your will or by a properly executed and
delivered beneficiary designation.
-4-
<PAGE>
Regardless of any marital property settlement agreement,
Viagene is not obligated to honor a notice of exercise from
your former spouse, nor is Viagene obligated to recognize
your former spouse's interest in your option in any other
way.
RETENTION Your option or this Agreement do not give you the right to
RIGHTS be retained by Viagene (or any subsidiaries) in any
capacity. Viagene (and any subsidiaries) reserve the right
to terminate your service at any time, with or without
cause.
STOCKHOLDER You, or your estate or heirs, have no rights as a
RIGHTS stockholder of Viagene until a certificate for your option
shares has been issued. No adjustments are made for
dividends or other rights if the applicable record date
occurs before your stock certificate is issued, except as
described in the Plan.
ADJUSTMENTS In the event of a stock split, a stock dividend or a similar
change in Viagene stock, the number of shares covered by
this option and the exercise price per share may be adjusted
pursuant to the Plan.
APPLICABLE LAW This Agreement will be interpreted and enforced under the
laws of the State of California.
THE PLAN AND The text of the Plan is incorporated in this Agreement by
OTHER AGREE- reference.
MENTS
This Agreement and the Plan constitute the entire
understanding between you and Viagene regarding this option.
Any prior agreements, commitments or negotiations concerning
this option are superseded.
DEFINITION OF For purposes of this Agreement, the term "Change in Control"
"CHANGE IN means:
CONTROL"
-5-
<PAGE>
(1) A change in the composition of Viagene's Board of Directors as a result of
which fewer than one-half of the incumbent directors are directors (the
"Continuing Directors") who either:
(a) Had been directors of Viagene 24 months prior to such change; or.
(b) Were elected, or nominated for election, to Viagene's Board of
Directors with the affirmative votes of a majority of the directors
who had been directors of Viagene 24 months prior to such change and
who were still in office at the time of the election or nomination; or
(2) Any "person" (as such term is used in sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) by the acquisition or
aggregation of securities is or becomes the beneficial owner, directly or
indirectly, of securities of Viagene representing 50% or more of the
combined voting power of Viagene's then outstanding securities ordinarily
(and apart from rights accruing under special circumstances) having the
right to vote at elections of directors (the "Base Capital Stock"), except
that any change in the relative beneficial ownership of Viagene's
securities by any person resulting solely from a reduction in the aggregate
number of outstanding shares of Base Capital Stock, and any decrease
thereafter in such person's ownership of securities, shall be disregarded
until such person increases in any manner, directly or indirectly, such
person's beneficial ownership of any securities of Viagene.
BY SIGNING THE COVER SHEET OF THIS AGREEMENT, YOU AGREE TO ALL OF THE TERMS AND
CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.
-6-
<PAGE>
VIAGENE, INC. 1993 INCENTIVE STOCK PLAN:
NONSTATUTORY STOCK OPTION AGREEMENT
Viagene, Inc., a Delaware corporation ("Viagene"), hereby grants an option to
purchase shares of its common stock to the optionee named below. The terms and
conditions of the option are set forth in this cover sheet, in the attachment
and in the Viagene, Inc. 1993 Incentive Stock Plan (the "Plan").
Date of Option Grant: _____________ ____, 199__
Name of Optionee: _______________________________________________________
Optionee's Social Security Number: ____--____--____
Number of Shares of Viagene Common Stock Covered by Option:
_____
Exercise Price per Share: $___.___
Vesting Start Date: _____________ ____, 199___
BY SIGNING THIS COVER SHEET, YOU AGREE TO ALL OF THE TERMS AND CONDITIONS
DESCRIBED IN THE ATTACHMENT AND IN THE PLAN.
Optionee: _______________________________________________________________
(Signature)
Viagene: ________________________________________________________________
(Signature)
Title: _____________________________
ATTACHMENT
<PAGE>
Director's Annual Vesting
Revised 7/28/94
VIAGENE, INC. 1993 INCENTIVE STOCK PLAN:
NONSTATUTORY STOCK OPTION AGREEMENT
NONSTATUTORY This option is not intended to be an incentive stock option
STOCK OPTION under section 422 of the Internal Revenue Code.
VESTING Your right to exercise this option vests and becomes exercisable
in full twelve months after the Vesting Start Date.
In addition, the entire option vests and will be exercisable in
full in the event (i) that Viagene is subject to a "Change in
Control" (as defined at the end of this Agreement) or (ii) of the
termination of your service because of death, "total or permanent
disability" (as defined below under the heading "Disability") or
voluntary retirement at or after age 70.
TERM Your option will expire in any event at the close of business at
Viagene headquarters on the day before the 10th anniversary of
the Date of Grant, as shown on the cover sheet. (It will expire
earlier if your Viagene service terminates, as described below.)
REGULAR If your service as an employee, director, consultant
TERMINATION or advisor of Viagene (or any subsidiary) terminates for any
reason except death or total and permanent disability, then your
option will expire at the close of business at Viagene
headquarters on the 90th day after your termination date.
Viagene determines when your service terminates for this purpose.
DEATH If you die as an employee, consultant or advisor of Viagene (or
any subsidiary), then your option will expire at the close of
business at Viagene headquarters on the date twelve months after
the date of death. During that twelve-month period, your estate,
heirs or beneficiary may exercise any previously unexercised
portion of your option.
-2-
<PAGE>
DISABILITY If your service as an employee, director, consultant or advisor
of Viagene (or any subsidiary) terminates because of your total
and permanent disability, then your option will expire at the
close of business at Viagene headquarters on the date twelve (12)
months after your termination date.
"Total and permanent disability" means that you are unable to
engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be
expected to result in death or which has lasted, or can be
expected to last, for a continuous period of not less than one
year.
LEAVES OF For purposes of this option, your service does not terminate when
ABSENCE you go on a military leave, a sick leave or another BONA FIDE
leave of absence, if the leave was approved by Viagene in
writing. But your service will be treated is terminating 90 days
after you went on leave, unless your right to return to active
work is guaranteed by law or by contract. And, your service
terminates when the approved leave ends, unless you immediately
return to active work.
Viagene determines which leaves count for this purpose.
RESTRICTIONS Viagene will not permit you to exercise this option if the
ON EXERCISE issuance of shares at that time would violate any law or
regulation.
NOTICE OF When you wish to exercise this option, you must notify Viagene by
EXERCISE filing the proper "Notice of Exercise" form at the address given
on the form. Your notice must specify how many shares you wish
to purchase. Your notice must also specify how your shares
should be registered (in your name only or in your and your
spouse's names as community property or as joint tenants with
right of survivorship). The notice will be effective when it is
received by Viagene.
If someone else wants to exercise this option after your death,
that person must prove to Viagene's satisfaction that he or she
is entitled to do so.
-3-
<PAGE>
FORM OF When you submit your notice of exercise, you must include payment
PAYMENT of the option price for the shares you are purchasing. Payment
may be made in one (or a combination of two or more) of the
following forms:
* Your personal check, a cashier's check or a money order.
* Irrevocable directions to a securities broker approved by
Viagene to sell your option shares and to deliver all or a
portion of the sale proceeds to Viagene in payment of the
option price. (The balance of the sale proceeds, if any,
will be delivered to you.) The directions must be given by
signing a special "Notice of Exercise" form provided by
Viagene.
* Certificates for Viagene stock that you have owned for at
least 6 months, along with any forms needed to effect a
transfer of the shares to Viagene. The value of the shares,
determined as of the effective date of the option exercise,
will be applied to the option price.
WITHHOLDING You will not be allowed to exercise this option unless you make
TAXES acceptable arrangements to pay any withholding taxes that may be
due as a result of the option exercise.
RESTRICTIONS By signing this Agreement, you agree not to sell any option
ON RESALE shares at a time when applicable laws or Viagene policies
prohibit a sale. This restriction will apply as long as you are
an employee of Viagene (or a subsidiary).
TRANSFER OF Prior to your death, only you may exercise this option. You
OPTION cannot transfer or assign this option. For instance, you may not
sell this option or use it as security for a loan. If you
attempt to do any of these things, this option will immediately
become invalid. You may, however, dispose of this option in your
will or by a properly executed and delivered beneficiary
designation.
Regardless of any marital property settlement agreement, Viagene
is not obligated to honor a notice of exercise from your former
spouse, nor is Viagene obligated to recognize your former
spouse's interest in your option in any other way.
-4-
<PAGE>
RETENTION Your option or this Agreement does not give you the right to be
RIGHTS retained by Viagene (or any subsidiaries) in any capacity.
Viagene (and any subsidiaries) reserves the right to terminate
your service at any time, with or without cause.
STOCKHOLDER You, or your estate, beneficiary or heirs, have no rights as a
RIGHTS stockholder of Viagene until a certificate for your Option shares
has been issued. No adjustments are made for dividends or other
rights if the applicable record date occurs before your stock
certificate is issued, except as described in the Plan.
ADJUSTMENTS In the event of a stock split, a stock dividend or a similar
change in Viagene stock, the number of shares covered by this
option and the exercise price per share may be adjusted pursuant
to the Plan.
APPLICABLE This Agreement will be interpreted and enforced under the laws of
LAW the State of California.
THE PLAN AND The text of the Plan is incorporated in this Agreement by
OTHER AGREE- reference.
MENTS
This Agreement and the Plan constitute the entire understanding
between you and Viagene regarding this option. Any prior
agreements, commitments or negotiations concerning this option
are superseded.
DEFINITION OF
"CHANGE For purposes of this Agreement, the term "Change in Control"
IN CONTROL" means:
-5-
<PAGE>
(1) A change in the composition of Viagene's Board of Directors as a result of
which fewer than one-half of the incumbent directors are directors (the
"Continuing Directors") who either:
(a) Had been directors of Viagene 24 months prior to such change; or
(b) Were elected, or nominated for election, to Viagene's Board of
Directors with the affirmative votes of a majority of the
directors who had been directors of Viagene 24 months prior to such
change and who were still in office at the time of the election or
nomination; or
(2) Any "person" (as such term is used in sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) by the acquisition or
aggregation of securities is or becomes the beneficial owner, directly or
indirectly, of securities of Viagene representing 50% or more of the
combined voting power of Viagene's then outstanding securities ordinarily
(and apart from rights accruing under special circumstances) having the
right to vote at elections of directors (the "Base Capital Stock"), except
that any change in the relative beneficial ownership of Viagene's
securities by any person resulting solely from a reduction in the aggregate
number of outstanding shares of Base Capital Stock, and any decrease
thereafter in such person's ownership of securities, shall be disregarded
until such person increases in any manner, directly or indirectly, such
person's beneficial ownership of any securities of Viagene.
BY SIGNING THE COVER SHEET OF THIS AGREEMENT, YOU AGREE TO ALL OF THE TERMS AND
CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.
-6-
<PAGE>
VIAGENE, INC. 1993 INCENTIVE STOCK PLAN:
NONSTATUTORY STOCK OPTION AGREEMENT
Viagene, Inc., a Delaware corporation ("Viagene"), hereby grants an option to
purchase shares of its common stock to the optionee named below. The terms and
conditions of the option are set forth in this cover sheet, in the attachment
and in the Viagene, Inc. 1993 Incentive Stock Plan (the "Plan").
Date of Option Grant: , 199
----------- ----- ---
Name of Optionee:
--------------------------------------------------------------
Optionee's Social Security Number: - -
--------- --------- ---------
Number of Shares of Viagene Common Stock Covered by Option:
- ----------
Exercise Price per Share: $ .
------- ------
Vesting Start Date: , 199
--------- ----- ---
BY SIGNING THIS COVER SHEET, YOU AGREE TO ALL OF THE TERMS AND CONDITIONS
DESCRIBED IN THE ATTACHMENT AND IN THE PLAN.
Optionee:
----------------------------------------------------------------------
(Signature)
Viagene:
----------------------------------------------------------------------
(Signature)
Title:
ATTACHMENT
- ----------
20327993
<PAGE>
5-Year Daily Vesting
Revised 2/9/93
VIAGENE, INC. 1993 INCENTIVE STOCK PLAN:
NONSTATUTORY STOCK OPTION AGREEMENT
Nonstatutory This option is not intended to be an incentive stock
Stock Option option under section 422 of the Internal Revenue Code.
Vesting Your right to exercise this option vests on a daily
basis over the five-year period starting on the Vesting
Start Date, as shown on the cover sheet. The fraction
of the total number of shares for which this option
will be exercisable at any given time is equal to the
product of 0.000547645126 times the number of days of
Viagene service that have elapsed since the Vesting
Start Date. The resulting number of shares will be
rounded to the nearest whole number. No part of this
option, however, is exercisable until you have
completed six consecutive months of service with
Viagene. No additional shares become exercisable after
your Viagene service has terminated for any reason.
In addition, the entire option vests and will be
exercisable in full in the event that Viagene is
subject to a "Change in Control" (as defined at the end
of this Agreement).
Term Your option will expire in any event at the close of
business at Viagene headquarters on the day before the
10th anniversary of the Date of Grant, as shown on the
cover sheet. (it will expire earlier if your Viagene
service terminates, as described below.)
Regular If your service as an employee, director, consultant or
Termination advisor of Viagene (or any subsidiary) terminates for
any reason except death or total and permanent
disability, then your option will expire at the close
of business at Viagene headquarters on the 90th day
after your termination date.
Viagene determines when your service terminates for
this purpose.
20327993 -2-
<PAGE>
Death If you die as an employee, consultant or advisor of
Viagene (or any subsidiary), then your option will
expire at the close of business at Viagene headquarters
on the date six months after the date of death.
During that six-month period, your estate, heirs or
beneficiary may exercise the vested portion of your
option.
Disability If your service as an employee, director, consultant or
advisor of Viagene (or any subsidiary) terminates
because of your total and permanent disability, then
your option will expire at the close of business at
Viagene headquarters on the date six months after your
termination date.
"Total and permanent disability" means that you are
unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental
impairment which can be expected to result in death or
which has lasted, or can be expected to last, for a
continuous period of not less than one year.
Leaves of For purposes of this option, your service does not
Absence terminate when you go on a military leave, a sick leave
or another BONA FIDE leave of absence, if the leave was
approved by Viagene in writing. But your service will
be treated as terminating 90 days after you went on
leave, unless your right to return to active work is
guaranteed by law or by contract. And, your service
terminates when the approved leave ends, unless you
immediately return to active work.
Viagene determines which leaves count for this purpose.
Restrictions Viagene will not permit you to exercise this option if
on Exercise the issuance of shares at that time would violate any
law or regulation.
20327993 -3-
<PAGE>
Notice of When you wish to exercise this option, you must notify
Exercise Viagene by filing the proper "Notice of Exercise" form
at the address given on the form. Your notice must
specify how many shares you wish to purchase. Your
notice must also specify how your shares should be
registered (in your name only or in your and your
spouse's names as community property or as joint
tenants with right of survivorship). The notice will
be effective when it is received by Viagene.
If someone else wants to exercise this option after
your death, that person must prove to Viagene's
satisfaction that he or she is entitled to do so.
Form of When you submit your notice of exercise, you must
Payment include payment of the option price for the shares you
are purchasing. Payment may be made in one (or a
combination of two or more) of the following forms:
. Your personal check, a cashier's check or a money
order.
. Irrevocable directions to a securities broker
approved by Viagene to sell your option shares and
to deliver all or a portion of the sale proceeds
to Viagene in payment of the option price. (The
balance of the sale proceeds, if any, will be
delivered to you.) The directions must be given by
signing a special "Notice of Exercise" form
provided by Viagene.
. Certificates for Viagene stock that you have owned
for at least 6 months, along with any forms needed
to effect a transfer of the shares to Viagene.
The value of the shares, determined as of the
effective date of the option exercise, will be
applied to the option price.
Witholding You will not be allowed to exercise this option unless
Taxes you make acceptable arrangements to pay any withholding
taxes that may be due as a result of the option
exercise.
Restrictions By signing this Agreement, you agree not to sell option
on Resale shares at a time when applicable laws or Viagene
policies prohibit a sale. This restriction will apply
as long as you are an employee of Viagene (or a
subsidiary).
20327993 -4-
<PAGE>
Transfer of Prior to your death, only you may exercise this option.
Option You cannot transfer or assign this option. For
instance, you may not sell this option or use it as
security for a loan. If you attempt to do any of these
things, this option will immediately become invalid.
You may, however; dispose of this option in your will
or by a properly executed and delivered beneficiary
designation.
Regardless of any marital property settlement
agreement, Viagene is not obligated to honor a notice
of exercise from your former spouse, nor is Viagene
obligated to recognize your former spouse's interest in
your option in any other way.
Retention Your option or this Agreement does not give you the
Rights right to be retained by Viagene (or any subsidiaries)
in any capacity. Viagene (and any subsidiaries)
reserves the right to terminate your service at any
time, with or without cause.
Stockholder You, or your estate, beneficiary or heirs, have no
Rights rights as a stockholder of Viagene until a certificate
for your option shares has been issued. No adjustments
are made for dividends or other rights if the
applicable record date occurs before your stock
certificate is issued, except as described in the Plan.
Adjustments In the event of a stock split, a stock dividend or a
similar change in Viagene stock, the number of shares
covered by this option and the exercise price per share
may be adjusted pursuant to the Plan.
Applicable Law This Agreement will be interpreted and enforced under
the laws of the State of California.
The Plan and The text of the Plan is incorporated in this Agreement
Other Agree- by reference.
ments
This Agreement and the Plan constitute the entire
understanding between you and Viagene regarding this
option. Any prior agreements, commitments or
negotiations concerning this option are superseded.
20327993 -5-
