<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
Mark One:
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-27324
SYNAPTIC PHARMACEUTICAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 22-2859704
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
215 College Road
Paramus, NJ 07652
(Address of principal executive offices) (Zip Code)
(201) 261-1331
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
As of April 22, 1996, there were 7,558,317 shares of the registrant's Common
Stock outstanding.
<PAGE>
SYNAPTIC PHARMACEUTICAL CORPORATION
INDEX TO QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1996
PART I. FINANCIAL INFORMATION
Page
----
Item 1. Financial Statements 1
Balance Sheets at March 31, 1996 and December 31, 1995 1
Statements of Operations for the three months ended
March 31, 1996 and 1995 2
Statements of Cash Flows for the three months ended
March 31, 1996 and 1995 3
Note to Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 5
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 8
Signatures 9
(i)
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
SYNAPTIC PHARMACEUTICAL CORPORATION
BALANCE SHEETS
ASSETS
<CAPTION>
March 31, December 31,
1996 1995
---------- -----------
(Unaudited) (Audited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $29,311,442 $27,680,969
Marketable securities--current maturities 6,339,203 7,932,322
Revenue receivable under collaborative agreement 516,832 129,208
Restricted security 770,000 770,000
Other current assets 452,763 350,796
----------- -----------
Total current assets 37,390,240 36,863,295
Property and equipment, net 2,188,846 2,232,418
Marketable securities -- 404,375
Patent and patent application costs,
net of accumulated amortization 1,487,708 1,412,155
Other assets 500 500
----------- -----------
$41,067,294 $40,912,743
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of capital lease obligations $ 141,934 $ 152,282
Accounts payable 274,770 196,750
Accrued liabilities 384,986 660,481
Accrued compensation 84,000 306,851
Unearned revenue under collaborative agreement -- 820,720
----------- -----------
Total current liabilities 885,690 2,137,084
Capital lease obligations, less current portion 83,626 106,472
Stockholders' equity:
Preferred Stock, $.01 par value; authorized--
1,000,000 shares; issued--none -- --
Common Stock, $.01 par value; authorized--
25,000,000 shares; issued--7,539,368 shares in
1996 and 7,326,368 shares in 1995; outstanding--
7,538,493 shares in 1996 and 7,325,493 shares in 1995 75,394 73,264
Additional paid-in capital 62,424,102 59,952,735
Net unrealized gains (losses) on securities 209,597 196,384
Deferred compensation (169,331) (208,952)
Note receivable from stockholder -- (6,134)
Accumulated deficit (22,440,139) (21,336,465)
----------- -----------
40,099,623 38,670,832
Less: Treasury stock, at cost (1,645) (1,645)
----------- -----------
Total stockholders' equity 40,097,978 38,669,187
----------- -----------
$41,067,294 $40,912,743
=========== ============
</TABLE>
See note to financial statements.
1
<PAGE>
<TABLE>
SYNAPTIC PHARMACEUTICAL CORPORATION
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
For the three months
ended March 31,
1996 1995
----------- -----------
<S> <C> <C>
Revenues:
Contract revenue $ 1,711,084 $ 1,657,500
Grant revenue 70,000 112,000
----------- -----------
Total revenues 1,781,084 1,769,500
Expenses:
Research and development 2,662,628 2,501,769
General and administrative 685,271 557,909
----------- -----------
Total expenses 3,347,899 3,059,678
------------ -----------
Loss from operations (1,566,815) (1,290,178)
Other income, net:
Interest income 469,418 186,664
Interest expense (6,277) (9,476)
Gain on sale of securities -- (334)
----------- -----------
Other income, net 463,141 176,854
----------- -----------
Net loss $(1,103,674) $(1,113,324)
=========== ===========
Net loss per share $(0.15) $(2.66)
====== ======
Shares used in computation of net loss
per share 7,494,020 419,103
========= =======
</TABLE>
See note to financial statements.
2
<PAGE>
<TABLE>
SYNAPTIC PHARMACEUTICAL CORPORATION
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
For the three months
ended March 31,
1996 1995
----------- -----------
<S> <C> <C>
Operating activities:
Net loss $(1,103,674) $(1,113,324)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 252,482 186,132
Amortization of deferred compensation 36,992 16,468
Compensation resulting from forgiveness of notes
receivable from employee -- 364
Gain on sale of securities -- 334
Changes in operating assets and liabilities:
(Increase) in other current assets (101,967) (145,651)
(Decrease) in accounts payable, accrued liabilities
and accrued compensation (420,326) (480,395)
(Increase) in collaborative agreement
revenue receivable (387,624) (391,482)
(Decrease) in deferred revenue (820,720) --
----------- -----------
Net cash (used in) operating activities (2,544,837) (1,927,554)
Investing activities:
Sale or maturity of investments 2,000,000 3,093,621
Purchase of investments -- (3,669,006)
Purchases of property and equipment (128,629) (22,252)
Increase in patent and patent application costs (145,126) (120,417)
Principal payments made by employee/stockholders -- 365
----------- -----------
Net cash provided by (used in) investing activities 1,726,245 (717,689)
Financing activities:
Issuance of common stock, net of repurchases 2,476,125 249,934
Payments on capital lease (33,194) (29,994)
Payments on notes receivable from stockholders 6,134 5,652
----------- -----------
Net cash provided by financing activities 2,449,065 225,592
----------- -----------
Net increase (decrease) in cash and cash
equivalents 1,630,473 (2,419,651)
Cash and cash equivalents at beginning of period 27,680,969 2,563,902
----------- -----------
Cash and cash equivalents at end of period $29,311,442 $ 144,251
=========== ===========
</TABLE>
See note to financial statements.
3
<PAGE>
SYNAPTIC PHARMACEUTICAL CORPORATION
NOTE TO FINANCIAL STATEMENTS
March 31, 1996
Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-Q and may not include all
information and footnotes required for a presentation in accordance with
generally accepted accounting principles. In the opinion of the management of
Synaptic Pharmaceutical Corporation (the "Company"), these financial
statements include all normal and recurring adjustments necessary for a fair
presentation of the financial position and the results of operations and cash
flows of the Company for the interim periods presented. For more complete
financial information, these financial statements should be read in
conjunction with the audited financial statements for the fiscal year ended
December 31, 1995, and notes thereto included in the Company's 1995 Annual
Report on Form 10-K. The results of operations for the fiscal quarter ended
March 31, 1996, are not necessarily indicative of the results of operations to
be expected for the full year.
4
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Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Overview
Synaptic Pharmaceutical Corporation ("Synaptic" or the "Company") is a
biotechnology company engaged in the development of a broad platform of
enabling technology which it calls "human receptor-targeted drug design
technology." It is utilizing this technology both to discover and clone the
genes that code for human receptor subtypes associated with specific disorders
and to design compounds that can potentially be developed as drugs for
treating these disorders. The Company is engaged in collaborations with four
pharmaceutical companies: Eli Lilly and Company ("Lilly"), Merck and Co., Inc.
("Merck"), Ciba-Geigy Limited ("Ciba-Geigy"), and The Dupont Merck
Pharmaceutical Company ("Dupont Merck"). Since inception, the Company has
financed its operations primarily through the sale of stock and through funds
provided by its collaborative partners Lilly, Merck and Ciba-Geigy under
collaborative agreements.
Under its collaborative agreements, the Company may receive one or two types
of revenue from its collaborative partners: contract revenue and license
revenue. Contract revenue includes research funding to support a specified
number of the Company's scientists and payments upon the achievement of
specified research and development milestones. Research funding revenue is
recognized ratably over the period of the agreement to which it relates and is
based upon predetermined funding requirements. Research milestone payment
revenue is recognized when the related research milestone is achieved.
License revenue represents nonrefundable payments for licenses to the
Company's technology and drug discovery systems. Non-refundable payments for
licenses are recognized immediately upon execution of the related agreement
since the terms of these licenses are generally in perpetuity and the Company
does not have significant future performance obligations. In addition, if a
drug is developed as a result of any of the collaborative agreements between
the Company and its collaborative partners, the Company will receive royalty
payments based upon the sale of such drugs.
The Company also receives revenues from government grants under the Small
Business Innovative Research ("SBIR") program of the National Institutes of
Health.
To date, the Company's expenditures have been for research and development
related expenses, general and administrative expenses, fixed asset purchases
and various patent related expenditures incurred in protecting the Company's
technologies. The Company has been unprofitable since its inception and had
an accumulated deficit of $22,440,139 at March 31, 1996. The Company expects
to continue to incur significant operating losses for a number of years and
may not become profitable, if at all, until it begins to receive royalty
revenue. To date, the Company has not received any royalty revenue and does
not expect to receive such revenue for a significant number of years, if at
all.
Results of Operations
Comparison of the Three Months Ended March 31, 1996 and 1995
Revenues. The Company recognized revenue of $1,781,084 and $1,769,500 for the
three months ended March 31, 1996 and 1995, respectively. The increase of
$11,584 was attributable primarily to an increase in contract revenue of
5
<PAGE>
$53,584 which was partially offset by a reduction in grant revenue of $42,000.
The increase in contract revenue was primarily due to annual increases in the
rates charged to the Company's collaborative partners per full time equivalent
scientist.
Research and Development Expenses. The Company incurred research and
development expenses of $2,662,628, and $2,501,770 for the three months ended
March 31, 1996 and 1995, respectively. The increase of $160,858, or 6.4%,
in research and development expenses was attributable primarily to: annual
salary increases for the scientific staff and related increases in fringe
benefit expense; and increased depreciation and patent amortization expense.
General and Administrative Expenses. The Company incurred general and
administrative expenses of $685,271 and $557,909 for the three months ended
March 31, 1996 and 1995, respectively. The increase of $127,362 was
attributable primarily to: an increase of approximately $64,000 in expenses
relating to being a public company; an increase of approximately $17,000 in
certain computer related expenses; and an increase of approximately $52,000
attributable primarily to annual salary increases for the administrative staff
as well as other recurring administrative expenses.
Other Income, Net. The Company received other income, net of interest
expense, of $463,141 and $176,855 for the three months ended March 31, 1996
and 1995, respectively. The increase of $286,286 in other income, net of
interest expense, was attributable primarily to an increase in interest income
of $282,753, resulting from higher average cash, cash equivalent and
marketable security balances during the first quarter of 1996 as compared to
the first quarter of 1995.
Net Loss. The net loss incurred by the Company was $1,103,674, and $1,113,324
for the three months ended March 31, 1996 and 1995, respectively. The
decrease of $9,650 in net loss was attributable to the increase in revenue and
other income offset by the higher expenses of research and development and
general and administrative.
The Company does not believe that inflation has had a material impact on its
results of operations.
Liquidity and Capital Resources
At March 31, 1996 and December 31, 1995, cash, cash equivalents and marketable
securities were in the aggregate $35,650,645 and $36,017,666, respectively.
During the first quarter of 1996 the Company sold 213,000 shares of its common
stock pursuant to the exercise of the over-allotment option granted to the
underwriters of the Company's initial public offering which closed in December
1995, raising additional capital, net of related expenses, of approximately
$2,460,000. To date, the Company has met its cash requirements through the
sale of its stock, through licensing fees, research funding and milestone
payments received under the collaborative agreements with Lilly, Merck and
Ciba-Geigy, through SBIR grants and through interest earned on its
investments. To date, the Company's principal use of funds has been to fund
research and development, to purchase fixed assets used primarily in its
research activities, to create its patent estate and to pay general and
administrative support costs.
At March 31, 1996, the Company was involved in collaborative arrangements with
Lilly, Merck, Ciba-Geigy and Dupont Merck. Lilly, Merck and Ciba-Geigy are
expected to provide research funding to the Company during 1996. The
Company's collaborative arrangement with DuPont Merck, which began in February
6
<PAGE>
1996, does not provide for any research funding by Dupont Merck. Research
funding under the Lilly Agreement is scheduled to expire on December 31, 1998
but Lilly has the right to terminate such funding earlier by giving six
months' prior written notice. The initial term of the Merck collaborative
arrangement will expire on November 30, 1996 but Merck has the right to
terminate the collaboration, and the research funding, earlier by giving 90
days' prior written notice. The Ciba-Geigy Agreement has an expiration
date of August 4, 1997. As part of their collaborative agreements with the
Company, as well as in the Company's initial public offering, Eli Lilly and
Ciba-Geigy invested an aggregate of $14,500,000 in the Company's Common Stock,
$.01 par value (the "Common Stock").
At March 31, 1996, the Company had invested an aggregate of $4,582,217 in
property and equipment. Included within the $4,582,217 is $658,077 of
equipment under capital leases. The net present value of obligations under
capital leases at March 31, 1996, was $225,560. This amount is secured by a
treasury note in the amount of $270,000 which is recorded in the balance sheet
as "Restricted Securities." This treasury note must be renewed annually in an
amount equal to the then aggregate unpaid balances under the lease agreements.
The last of these lease agreements will expire on December 5, 1997.
The Company leases laboratory and office facilities under an agreement
expiring on December 31,1999. The minimum annual payment under the lease is
$646,000. A standby letter of credit for approximately $413,000 has been
issued to the Company's landlord as a security deposit and is secured by a
treasury note in the amount of $500,000 which is recorded in the balance sheet
as "Restricted Securities."
At March 31, 1996 the Company had available funds of $35,650,645. The Company
intends to utilize these funds primarily to pay its operating expenses (to the
extent revenues and other income are insufficient to cover such expenses), to
expand its research programs and to make leasehold improvements to its
facilities beyond the level which existed on March 31, 1996. It is anticipated
that the Company will continue to incur significant operating losses for a
number of years. The Company believes that its cash on hand, together with
the funds it will receive from its collaborative partners, interest income and
funds received under SBIR grants, will be sufficient to fund an increased
operating expense level at least through 1998.
Except for the historical information contained herein, this management
discussion and analysis of financial condition and results of operations
contains "forward looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. Although the Company believes that the expectations
reflected in such forward looking statements are reasonable, it can give no
assurance that such expectations will prove to be correct. Certain important
factors that could cause actual results to differ materially from the
Company's expectations include the early termination of one or more of the
Company's collaborative agreements and other risk factors set forth as
"Cautionary Statements" in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995, or detailed from time to time in filings
that the Company makes with the Securities and Exchange Commission.
7
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
No. Description
- - ------- -----------
+10.25 Incentive Stock Option Agreement dated as of March 21, 1996,
between the Company and Kathleen P. Mullinix
+10.26 Incentive Stock Option Agreement dated as of March 21, 1996,
between the Company and Robert L. Spence
+10.27 Incentive Stock Option Agreement dated as of March 21, 1996,
between the Company and Lisa L. Reiter
+10.28 Incentive Stock Option Agreement dated as of March 21, 1996,
between the Company and Richard L. Weinshank
+10.29 Form of Incentive Stock Option Agreement under the 1996 Incentive
Plan of the Registrant
+10.30 Form of Nonqualified Stock Option Agreement under the 1996
Incentive Plan of the Registrant
11 Statement Regarding Computation of Per Share Earnings (Loss)
27 Financial Data Schedule
+ Management contracts and compensatory plans or arrangements
(b) Reports on Form 8-K
On January 9, 1996, the Company filed a Current Report on Form 8-K describing
the issuance by the Company of a press release announcing that it had been
awarded two additional United States patents covering serotonin receptor
genes.
On January 17, 1996, the Company filed a Current Report on Form 8-K disclosing
the purchase by the Company's underwriters of its initial public offering of
213,000 shares of Common Stock pursuant to the exercise of their
over-allotment option.
On February 14, 1996, the Company filed a Current Report on Form 8-K
disclosing the execution by the Company and The DuPont Merck Pharmaceutical
Company of a Collaborative Research Agreement.
Except for the three reports described above, the Company did not file Current
Reports on Form 8-K during the fiscal quarter ended March 31, 1996.
8
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SIGNATURE PAGE
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
SYNAPTIC PHARMACEUTICAL CORPORATION
(Registrant)
Date: May 9, 1996 By:/s/ Kathleen P. Mullinix
-----------------------------
Name: Kathleen P. Mullinix
Title: Chairman, President &
Chief Executive Officer
By:/s/ Robert L. Spence
-----------------------------
Name: Robert L. Spence
Title: Chief Financial Officer &
Treasurer
9
NONTRANSFERABLE
INCENTIVE STOCK OPTION AGREEMENT
---------------------------------
THIS AGREEMENT, dated as of the 21st day of March,
1996, is by and between SYNAPTIC PHARMACEUTICAL CORPORATION, a
Delaware corporation (the "Company"), and Kathleen P. Mullinix
(the "Optionee," which term as used herein shall be deemed to
include any successor to the Optionee by will or by the laws of
descent and distribution, unless the context shall otherwise
require).
W I T N E S S E T H:
WHEREAS, the Company and the Optionee are parties to an
Employment Agreement (the "Employment Agreement") dated as of
October 1, 1993; and
WHEREAS, pursuant to the Synaptic Pharmaceutical
Corporation 1996 Incentive Plan (the "Plan"), the Company, acting
through the Compensation Committee (the "Committee") of its Board
of Directors (the "Board"), on March 21, 1996 (the "Start Date"),
granted to the Optionee an option to purchase up to an aggregate
of 10,000 shares of Common Stock, $0.01 par value, of the Company
(the "Common Stock"), at the price of $16.75 per share, such
option to be for the term and upon the terms and conditions
hereinafter stated.
NOW, THEREFORE, in consideration of the mutual premises
and undertakings hereinafter set forth, the parties hereto agree
as follows:
1. Option; Option Price. Pursuant to said action of
the Committee, the Company has granted to the Optionee the option
(the "Option") to purchase, upon and subject to the terms and
conditions of this Agreement and the terms and conditions of the
Plan (which are hereby incorporated by reference herein) 10,000
shares (the "Option Shares") of Common Stock of the Company at
the price of $16.75 per share (the "Option Price"), which Option
is intended to qualify for Federal income tax purposes as an
"incentive stock option" within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code").
2. Term. The term (the "Option Term") of the Option
shall commence on the Start Date and expire on the tenth
anniversary of the Start Date, unless the Option shall
theretofore have been terminated in accordance with the terms
hereof or of the Plan.
3. Exercisability; Time of Exercise.
(a) General. Unless accelerated in the discretion of
the Committee or as otherwise provided herein, the Option shall
be exercisable as to 25% of the Option Shares from and after the
Start Date, and shall become exercisable as to an additional 25%
of the Option Shares on January 1 of each of 1997, 1998, and
1999; provided, however, that in the event of the termination of
the Optionee's employment (i) as a result of her death or legal
or other incapacity pursuant to Section 3.1.1 or 3.1.2 of the
Employment Agreement, (ii) by the Company pursuant to Section
3.1.4 of the Employment Agreement or (iii) after a change in
control as contemplated by Section 4.3 of the Employment
Agreement, at any time prior to January 1, 1999, then the Option
shall as of the date of such termination become exercisable as to
all of the Option Shares; provided further, however, that in the
event the Optionee retires with the consent of the Company any
time prior to January 1, 1999, then the Option shall be
exercisable as to the greater of (i) 25% of the Option Shares and
(ii) that number of Option Shares which is equal to the product
of (A) the total number of Option Shares and (B) 2-1/12% times
the number of full calendar months which shall have elapsed
during the period commencing on January 1, 1996, and ending on
the date of the Optionee's retirement. The Option shall remain
exercisable as to all of such shares until the expiration of the
Option Term, unless it is terminated earlier as provided in any
of the other paragraphs of this Section 3 or Section 6 or as
provided in the Plan.
(b) Termination for Cause. If the Optionee shall cease
to be an employee of the Company as a result of a termination by
the Company for cause (as hereinafter defined), the Option shall
automatically terminate on, and the Optionee shall have no
further right to exercise the Option on or after, the date as of
which notice of such termination is given to the Optionee by the
Company. For purposes of this Agreement, the term "cause" shall
have the meaning ascribed thereto in Section 3.1.3 of the
Employment Agreement.
(c) Termination without Cause. If the Optionee's
employment with the Company terminates for any reason other than
cause or the Optionee's death or Disability or Retirement (as
defined in the Plan), the Option shall thereafter be exercisable
only to the extent of the purchase rights, if any, which shall
have accrued pursuant to paragraph (a) of this Section 3 as of
the date of such termination, and the Option and such accrued
rights to purchase shall in any event terminate upon, and the
Optionee shall have no further right to exercise the Option
after, (i) in the case of any such termination pursuant to
Section 3.1.1, 3.1.2, 3.1.4 or 4.3 of the Employment Agreement,
the earlier of (A) the expiration of the Option Term and (B) 120
days after the date of such termination; provided, however, that,
in the case of any such termination other than a termination
resulting from the Optionee being "disabled" within the meaning
of Section 22(e)(3) of the Code, the Option shall no longer be
treated as an "incentive stock option" within the meaning of
Section 422 of the Code unless exercised within three (3) months
following the date of such termination, and (ii) in the case of
any such termination not described in the foregoing clause (i),
the earlier of (A) the expiration of the Option Term and (B) 90
days after the date of such termination.
(d) Termination as a Result of Disability or
Retirement. If the Optionee's employment with the Company
terminates as a result of the Optionee's Disability or
Retirement, the Option shall thereafter be exercisable only to
the extent of the purchase rights, if any, which shall have
accrued pursuant to paragraph (a) of this Section 3 as of the
date of such termination, and the Option and such accrued rights
to purchase shall in any event terminate upon, and the Optionee
shall have no further right to exercise the Option after, the
earlier of (i) the expiration of the Option Term and (ii) 180
days after the date of such termination; provided, however, that,
in the case of any such termination other than a termination
resulting from the Optionee being "disabled" within the meaning
of Section 22(e)(3) of the Code, the Option shall no longer be
treated as an "incentive stock option" within the meaning of
Section 422 of the Code unless exercised within three (3) months
following the date of such termination
(e) Termination as a Result of Death. If the
Optionee's employment with the Company terminates as a result of
the Optionee's death, the Option shall thereafter be exercisable
by the Optionee's Designated Beneficiary (as defined in the Plan)
or personal representatives, heirs or legatees (as provided in
the Plan), but only to the extent of the purchase rights, if any,
which shall have accrued pursuant to paragraph (a) of this
Section 3 as of the date of such termination, and the Option and
such accrued rights to purchase shall in any event terminate
upon, and the Optionee shall have no further right to exercise
the Option after, the earlier of (i) the expiration of the Option
Term and (ii) one (1) year after the date of death.
Notwithstanding anything contained in the Plan to the contrary,
the Option shall continue to be treated as an "incentive stock
option" within the meaning of Section 422 of the Code even if it
is not exercised until after the third month following the date
of the Optionee's death.
(f) Death Following Disability or Retirement. In the
event of the Optionee's death within 180 days following the
Optionee's termination of employment as a result of the
Optionee's Disability or Retirement, the Option shall thereafter
be exercisable by the Optionee's Designated Beneficiary or
personal representatives, heirs or legatees, to the extent of the
purchase rights, if any, which shall have accrued pursuant to
paragraph (a) of this Section 3 as of the date of such
termination, for a period of one (1) year following the date of
death but in no event later than the expiration of the Option
Term; provided, however, that, in the case in which the
Optionee's termination of employment resulted from the Optionee
being "disabled" within the meaning of Section 22(e)(3) of the
Code, the Option shall no longer be treated as an "incentive
stock option" within the meaning of Section 422 of the Code
unless exercised within one (1) year following the date of such
termination; and provided further, however, that, in all other
cases, the Option shall no longer be treated as an "incentive
stock option" within the meaning of Section 422 of the Code
unless exercised within three (3) months following the date of
such termination.
4. Procedure for Exercise. (a) The Option may be
exercised, from time to time, in whole or in part (but for the
purchase of whole shares only), by delivery of a written notice
(the "Notice") from the Optionee to the Secretary of the Company,
which Notice shall:
(i) state that the Optionee elects to exercise
the Option;
(ii) state the number of shares with respect to
which the Optionee is exercising the Option
(the "Acquired Shares");
(iii) include any representations of the Optionee
required under Section 7(b) hereof;
(iv) state the method of payment for the Acquired
Shares pursuant to Section 4(b);
(v) in the event that the Option shall be
exercised by any person other than the Optionee
pursuant to Sections 3 and 8, include appropriate
proof of the right of such person to exercise the
Option; and
(vi) state the date upon which the Optionee desires to
consummate the purchase of the Acquired Shares
(which date must be prior to the termination of such
Option).
(b) Payment of the Option Price for the Acquired
Shares shall, unless otherwise provided by the Committee, be made
in cash or by personal or certified check.
5. No Rights as a Stockholder. The Optionee shall not
have any privileges of a stockholder with respect to any Option
Shares until the date of a stock certificate representing such
Option Shares is issued to the Optionee.
6. Adjustments.
(a) Stock Dividends, Splits, Subdivisions or
Combinations. Subject to the other provisions of this Section 6,
if, at any time while the Option is outstanding, the Common Stock
is changed by reason of dividends payable in Common Stock or
splits, subdivisions or combinations of shares of Common Stock,
then the number of shares of Common Stock deliverable upon the
exercise thereafter of the Option shall be increased or decreased
proportionately, as the case may be, without change in the
aggregate Option Price.
(b) Cash Mergers. Upon the occurrence of a merger on
consolidation of the Company with another corporation in a
transaction in which the stockholders of the Company receive cash
consideration in exchange for their shares of capital stock of
the Company (a "cash merger"), the Option shall automatically
terminate; provided, however, that the Optionee shall be given
(i) written notice of such cash merger at least 20 days prior to
its proposed effective date (as specified in such notice) and
(ii) an opportunity, during the period commencing with delivery
of such notice and ending ten (10) days prior to such proposed
effective date, to exercise the Option in full as to all of the
Option Shares, whether or not then vested.
(c) Assumption or Substitution of Options.
Notwithstanding anything contained herein or in the Plan to the
contrary, Section 6(b) shall not be applicable if provision shall
be made in connection with such cash merger for the assumption of
the Option by, or the substitution for the Option of a new option
covering the stock of, the surviving, successor or purchasing
corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number, kind and option price of shares
subject to such option; provided, however, that the Board shall,
to the extent not inconsistent with the best interests of the
Company or its subsidiaries (such best interests to be determined
in good faith by the Board, in its sole discretion), use its best
efforts to ensure that any such assumption or substitution will
not constitute a modification, extension or renewal of the Option
within the meaning of Section 424(h) of the Code and the
regulations thereunder.
(d) Corporate Transactions. Notwithstanding anything
contained herein or in the Plan to the contrary, upon the
occurrence of (i) a merger or consolidation of the Company with
another corporation in a transaction (other than a cash merger)
in which the Company shall not survive or in which the Company is
the survivor but its capital stock is exchanged for stock,
securities, or property of another entity or (ii) a sale of all
or substantially all of the assets of the Company (any
transaction described in clause (i) or (ii) being referred to
herein as a "corporate transaction"), provision shall be made in
connection with such corporate transaction for the assumption of
the Option by, or the substitution for the Option of a new option
covering the stock of, the surviving, successor or purchasing
corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number, kind and option price of shares
subject to such option; provided, however, that the Board shall,
to the extent not inconsistent with the best interests of the
Company or its subsidiaries (such best interests to be determined
in good faith by the Board, in its sole discretion), use its best
efforts to ensure that any such assumption or substitution will
not constitute a modification, extension or renewal of the Option
within the meaning of Section 424(h) of the Code and the
regulations thereunder.
(e) Termination within One Year of Cash Merger or
Corporate Transaction. Notwithstanding anything contained herein
or in the Plan to the contrary, in the event the Optionee's
employment with the Company or the person which is the surviving,
successor or purchasing corporation in a cash merger to which
Section 6(c) applies or a corporate transaction to which Section
6(d) applies, or a parent or subsidiary thereof, is terminated
without cause (as defined in Section 3(b)) and other than as a
result of the Optionee's death or disability, at any time prior
to the first anniversary of such transaction or merger, the
Option shall become exercisable in full as to all Option Shares,
whether or not vested, as of the date on which notice of
termination is given to the Optionee, and the Optionee shall have
the right to exercise the Option as to any or all of such shares
until the earlier of (i) the expiration of the Option Term and
(ii) the 90th day following the date of such termination, at
which time the Option shall terminate.
7. Additional Provisions Related to Exercise. (a)
The Option shall be exercisable only on such date or dates and
during such period and for such number of shares of Common Stock
as are set forth in this Agreement.
(b) To exercise the Option, the Optionee shall follow
the procedures set forth in Section 4 hereof. Upon the exercise
of the Option as a time when there is not in effect a
registration statement under the Securities Act of 1933, as
amended, relating to the shares of Common Stock issuable upon
exercise of the Option, the Optionee shall provide the Company
with such representations and warranties as may be required by
the Committee to the effect that the Acquired Shares are being
acquired for investment and not with a view to the distribution
thereof. Anything contained herein to the contrary
notwithstanding, in the event the Board shall determine, in its
sole and subjective discretion, that the registration,
qualification or listing of the Option Shares upon a securities
exchange or under any state or Federal law, or the consent or
approval or any government or regulatory body, is necessary or
desirable as a condition of or in connection with the exercise of
the Option, the Option may not be exercised, in whole or in part,
unless and until such registration, qualification, listing,
consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Board.
(c) The Option shall not be affected by any change of
duties or position of the Optionee (including transfer to or from
a subsidiary), so long as the Optionee continues to be an
employee of the Company or one of its subsidiaries. Nothing in
the Option granted hereunder shall confer upon the Optionee any
right to continue in the employ of the Company or any of its
subsidiaries or interfere in any way with the right of the
Company or its subsidiaries or the stockholders of the Company,
as the case may be, to terminate the Optionee's employment or to
increase or decrease the Optionee's compensation at any time.
8. Restriction on Transfer. The Option may not be
transferred, pledged, assigned, hypothecated (whether by
operation of law or otherwise), sold or otherwise disposed of in
any way by the Optionee, except by will or by the laws of descent
and distribution, and may be exercised during the lifetime of the
Optionee only by the Optionee. If the Optionee dies, the Option
shall thereafter be exercisable, during the applicable period
specified in Section 3, by the Optionee's Designated Beneficiary
or personal representatives, heirs or legatees (as provided in
the Plan) to the full extent to which the Option was exercisable
by the Optionee at the time of the Optionee's death as provided
herein. The Option shall not be subject to execution, attachment
or similar process. Any attempted transfer, pledge, assignment,
hypothecation, sale or other disposition of the Option contrary
to the provisions hereof, and the levy of any execution,
attachment or similar process upon the Option, shall be null and
void and without effect.
9. Restrictive Legend. In order to reflect certain
restrictions on disposition of the shares acquired upon exercise
of the Option (the "Restricted Shares"), all stock certificates
representing the Restricted Shares issued shall, if determined by
the Company to be appropriate, have affixed thereto a legend
substantially in the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THE SHARES HAVE
BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE TRANSFERRED, PLEDGED,
ASSIGNED, HYPOTHECATED, SOLD OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES
UNDER THE SECURITIES ACT OF 1933 OR AN OPINION OF COUNSEL
SATISFACTORY TO SYNAPTIC PHARMACEUTICAL CORPORATION THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER SAID ACT."
10. Notices. All notices or other communications
which are required or permitted hereunder shall be in writing and
sufficient if (i) personally delivered or sent by telecopier,
(ii) sent by nationally-recognized overnight courier or (iii)
sent by registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
if to the Optionee, to:
Kathleen P. Mullinix
975 Park Avenue, Apt. 2D
New York, New York 10028
if to the Corporation, to:
Synaptic Pharmaceutical Corporation
215 College Road
Paramus, New Jersey 07652
Attention: General Counsel
Telecopier: 201-261-0623
or to such other address as the party to whom notice is to be
given may have furnished to each other party in writing in
accordance herewith. Any such communication shall be deemed to
have been given (i) when delivered, if personally delivered, sent
by telecopier or sent by nationally-recognized overnight courier
and (ii) on the third Business Day (as hereinafter defined)
following the date on which the piece of mail containing such
communication is posted, if sent by mail. As used herein,
"Business Day" means a day that is not a Saturday, Sunday or a
day on which banking institutions in the city to which the notice
or communication is to be sent are not required to be open.
11. No Waiver. No waiver of any breach or condition
of this Agreement shall be deemed to be a waiver of any other or
subsequent breach or condition, whether of like or different
nature.
12. Optionee Undertaking. The Optionee hereby agrees
to take whatever additional actions and execute whatever
additional documents the Company may in its reasonable judgement
deem necessary or advisable in order to carry out or effect one
or more of the obligations or restrictions imposed on the
Optionee pursuant to the express provisions of this Agreement.
13. Modification of Rights. The rights of the
Optionee are subject to modification and termination in certain
events as provided in this Agreement and the Plan.
14. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of
New Jersey without giving effect to principles of conflicts of
laws.
15. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the
same instrument.
16. Entire Agreement. This Agreement, the Employment
Agreement (the provisions relating to stock options of which are
hereby incorporated herein by reference) and the Plan constitute
the entire agreement between the parties with respect to the
subject matter hereof and thereof, and supersede all previously
written or oral negotiations, commitments, representations and
agreements with respect thereto. In the event of any
inconsistency among the terms of this Agreement, the terms of the
Employment Agreement and the terms of the Plan, the terms of the
Employment Agreement shall control.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first written above.
SYNAPTIC PHARMACEUTICAL CORPORATION
By:/s/Lisa L. Reiter
--------------------------------------------
Lisa L. Reiter
Vice President, General Counsel and Secretary
/s/Kathleen P. Mullinix
-----------------------------------------------
Kathleen P. Mullinix
NONTRANSFERABLE
INCENTIVE STOCK OPTION AGREEMENT
---------------------------------
THIS AGREEMENT, dated as of the 21st day of March,
1996, is by and between SYNAPTIC PHARMACEUTICAL CORPORATION, a
Delaware corporation (the "Company"), and Robert L. Spence (the
"Optionee," which term as used herein shall be deemed to include
any successor to the Optionee by will or by the laws of descent
and distribution, unless the context shall otherwise require).
W I T N E S S E T H:
WHEREAS, the Company and the Optionee are parties to an
Employment Agreement (the "Employment Agreement") dated as of
January 1, 1994; and
WHEREAS, pursuant to the Synaptic Pharmaceutical
Corporation 1996 Incentive Plan (the "Plan"), the Company, acting
through the Compensation Committee (the "Committee") of its Board
of Directors (the "Board"), on March 21, 1996 (the "Start Date"),
granted to the Optionee an option to purchase up to an aggregate
of 10,000 shares of Common Stock, $0.01 par value, of the Company
(the "Common Stock"), at the price of $16.75 per share, such
option to be for the term and upon the terms and conditions
hereinafter stated.
NOW, THEREFORE, in consideration of the mutual premises
and undertakings hereinafter set forth, the parties hereto agree
as follows:
1. Option; Option Price. Pursuant to said action of
the Committee, the Company has granted to the Optionee the option
(the "Option") to purchase, upon and subject to the terms and
conditions of this Agreement and the terms and conditions of the
Plan (which are hereby incorporated by reference herein) 10,000
shares (the "Option Shares") of Common Stock of the Company at
the price of $16.75 per share (the "Option Price"), which Option
is intended to qualify for Federal income tax purposes as an
"incentive stock option" within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code").
2. Term. The term (the "Option Term") of the Option
shall commence on the Start Date and expire on the tenth
anniversary of the Start Date, unless the Option shall
theretofore have been terminated in accordance with the terms
hereof or of the Plan.
3. Exercisability; Time of Exercise.
(a) General. Unless accelerated in the discretion of
the Committee or as otherwise provided herein, the Option shall
be exercisable as to 25% of the Option Shares from and after the
Start Date, and shall become exercisable as to an additional 25%
of the Option Shares on January 1 of each of 1997, 1998, and
1999; provided, however, that if the Optionee dies or retires
with the consent of the Company any time prior to January 1,
1999, then the Option shall be exercisable as to the greater of
(i) 25% of the Option Shares and (ii) that number of Option
Shares which is equal to the product of (A) the total number of
Option Shares and (B) 2-1/12% times the number of full calendar
months which shall have elapsed during the period commencing on
January 1, 1996, and ending on the date of the Optionee's death
or retirement; provided further, however, that if, at any time
prior to January 1, 1999, the Optionee's employment with the
Company is terminated in contemplation of, or at any
time within one (1) year following, a Change in Control
(capitalized terms used and not defined herein having the
meanings ascribed to them in the Employment Agreement ) and such
termination constitutes a Termination Without Cause or a
Resignation for Good Reason, then the Option shall, as of the date of
such termination, become exercisable in full as to all of the Option Shares.
The Option shall remain exercisable as to all of such shares until the
expiration of the Option Term, unless it is terminated earlier as
provided in any of the other paragraphs of this Section 3 or
Section 6 or as provided in the Plan.
(b) Termination for Cause. If the Optionee shall cease
to be an employee of the Company as a result of a termination by
the Company for Cause, the Option shall automatically terminate
on, and the Optionee shall have no further right to exercise the
Option on or after, the date as of which notice of such
termination is given to the Optionee by the Company.
(c) Termination without Cause. If the Optionee's
employment with the Company terminates for any reason other than
Cause or the Optionee's death or Disability or Retirement (as
defined in the Plan), the Option shall thereafter be exercisable
only to the extent of the purchase rights, if any, which shall
have accrued pursuant to paragraph (a) of this Section 3 as of
the date of such termination, and the Option and such accrued
rights to purchase shall in any event terminate upon, and the
Optionee shall have no further right to exercise the Option
after, the earlier of (i) the expiration of the Option Term and
(ii) (A) in the case of any such termination governed by Section
11 of the Employment Agreement, 120 days after the date of such
termination and (B) in the case of any such termination not
governed by said Section 11, 90 days after the date of such
termination; provided, however, that, in the case of any such
termination other than a termination resulting from the Optionee
being "disabled" within the meaning of Section 22(e)(3) of the
Code, the Option shall no longer be treated as an "incentive
stock option" within the meaning of Section 422 of the Code
unless exercised within three (3) months following the date of
such termination.
(d) Termination as a Result of Disability or
Retirement. If the Optionee's employment with the Company
terminates as a result of the Optionee's Disability or
Retirement, the Option shall thereafter be exercisable only to
the extent of the purchase rights, if any, which shall have
accrued pursuant to paragraph (a) of this Section 3 as of the
date of such termination, and the Option and such accrued rights
to purchase shall in any event terminate upon, and the Optionee
shall have no further right to exercise the Option after, the
earlier of (i) the expiration of the Option Term and (ii) 180
days after the date of such termination; provided, however, that,
in the case of any such termination other than a termination
resulting from the Optionee being "disabled" within the meaning
of Section 22(e)(3) of the Code, the Option shall no longer be
treated as an "incentive stock option" within the meaning of
Section 422 of the Code unless exercised within three (3) months
following the date of such termination.
(e) Termination as a Result of Death. If the
Optionee's employment with the Company terminates as a result of
the Optionee's death, the Option shall thereafter be exercisable
by the Optionee's Designated Beneficiary (as defined in the Plan)
or personal representatives, heirs or legatees (as provided in
the Plan), but only to the extent of the purchase rights, if any,
which shall have accrued pursuant to paragraph (a) of this
Section 3 as of the date of such termination, and the Option and
such accrued rights to purchase shall in any event terminate
upon, and the Optionee shall have no further right to exercise
the Option after, the earlier of (i) the expiration of the Option
Term and (ii) one (1) year after the date of death.
Notwithstanding anything contained in the Plan to the contrary,
the Option shall continue to be treated as an "incentive stock
option" within the meaning of Section 422 of the Code even if it
is not exercised until after the third month following the date
of the Optionee's death.
(f) Death Following Disability or Retirement. In the
event of the Optionee's death within 180 days following the
Optionee's termination of employment as a result of the
Optionee's Disability or Retirement, the Option shall thereafter
be exercisable by the Optionee's Designated Beneficiary or
personal representatives, heirs or legatees, to the extent of the
purchase rights, if any, which shall have accrued pursuant to
paragraph (a) of this Section 3 as of the date of such
termination, for a period of one (1) year following the date of
death but in no event later than the expiration of the Option
Term; provided, however, that, in the case in which the
Optionee's termination of employment resulted from the Optionee
being "disabled" within the meaning of Section 22(e)(3) of the
Code, the Option shall no longer be treated as an "incentive
stock option" within the meaning of Section 422 of the Code
unless exercised within one (1) year following the date of such
termination; and provided further, however, that, in all other
cases, the Option shall no longer be treated as an "incentive
stock option" within the meaning of Section 422 of the Code
unless exercised within three (3) months following the date of
such termination.
4. Procedure for Exercise. (a) The Option may be
exercised, from time to time, in whole or in part (but for the
purchase of whole shares only), by delivery of a written notice
(the "Notice") from the Optionee to the Secretary of the Company,
which Notice shall:
(i) state that the Optionee elects to exercise
the Option;
(ii) state the number of shares with respect to
which the Optionee is exercising the Option
(the "Acquired Shares");
(iii) include any representations of the
Optionee required under Section 7(b)
hereof;
(iv) state the method of payment for the Acquired
Shares pursuant to Section 4(b);
(v) in the event that the Option shall be
exercised by any person other than the
Optionee pursuant to Sections 3 and 8,
include appropriate proof of the right of
such person to exercise the Option; and
(vi) state the date upon which the Optionee
desires to consummate the purchase of the
Acquired Shares (which date must be prior to
the termination of such Option).
(b) Payment of the Option Price for the Acquired
Shares shall, unless otherwise provided by the Committee, be made
in cash or by personal or certified check.
5. No Rights as a Stockholder. The Optionee shall not
have any privileges of a stockholder with respect to any Option
Shares until the date of a stock certificate representing such
Option Shares is issued to the Optionee.
6. Adjustments.
(a) Stock Dividends, Splits, Subdivisions or
Combinations. Subject to the other provisions of this Section 6,
if, at any time while the Option is outstanding, the Common Stock
is changed by reason of dividends payable in Common Stock or
splits, subdivisions or combinations of shares of Common Stock,
then the number of shares of Common Stock deliverable upon the
exercise thereafter of the Option shall be increased or decreased
proportionately, as the case may be, without change in the
aggregate Option Price.
(b) Cash Mergers. Upon the occurrence of a merger on
consolidation of the Company with another corporation in a
transaction in which the stockholders of the Company receive cash
consideration in exchange for their shares of capital stock of
the Company (a "cash merger"), the Option shall automatically
terminate; provided, however, that the Optionee shall be given
(i) written notice of such cash merger at least 20 days prior to
its proposed effective date (as specified in such notice) and
(ii) an opportunity, during the period commencing with delivery
of such notice and ending ten (10) days prior to such proposed
effective date, to exercise the Option in full as to all of the
Option Shares, whether or not then vested.
(c) Assumption or Substitution of Options.
Notwithstanding anything contained herein or in the Plan to the
contrary, Section 6(b) shall not be applicable if provision shall
be made in connection with such cash merger for the assumption of
the Option by, or the substitution for the Option of a new option
covering the stock of, the surviving, successor or purchasing
corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number, kind and option price of shares
subject to such option; provided, however, that the Board shall,
to the extent not inconsistent with the best interests of the
Company or its subsidiaries (such best interests to be determined
in good faith by the Board, in its sole discretion), use its best
efforts to ensure that any such assumption or substitution will
not constitute a modification, extension or renewal of the Option
within the meaning of Section 424(h) of the Code and the
regulations thereunder.
(d) Corporate Transactions. Notwithstanding anything
contained herein or in the Plan to the contrary, upon the
occurrence of (i) a merger or consolidation of the Company with
another corporation in a transaction (other than a cash merger)
in which the Company shall not survive or in which the Company is
the survivor but its capital stock is exchanged for stock,
securities, or property of another entity or (ii) a sale of all
or substantially all of the assets of the Company (any
transaction described in clause (i) or (ii) being referred to
herein as a "corporate transaction"), provision shall be made in
connection with such corporate transaction for the assumption of
the Option by, or the substitution for the Option of a new option
covering the stock of, the surviving, successor or purchasing
corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number, kind and option price of shares
subject to such option; provided, however, that the Board shall,
to the extent not inconsistent with the best interests of the
Company or its subsidiaries (such best interests to be determined
in good faith by the Board, in its sole discretion), use its best
efforts to ensure that any such assumption or substitution will
not constitute a modification, extension or renewal of the Option
within the meaning of Section 424(h) of the Code and the
regulations thereunder.
(e) Termination within One Year of Cash Merger or
Corporate Transaction. Notwithstanding anything contained herein
or in the Plan to the contrary, in the event the Optionee's
employment with the Company or the person which is the surviving,
successor or purchasing corporation in a cash merger to which
Section 6(c) applies or a corporate transaction to which Section
6(d) applies, or a parent or subsidiary thereof, is terminated
without Cause and other than as a result of the Optionee's death
or disability, at any time prior to the first anniversary of such
transaction or merger, the Option shall become exercisable in
full as to all Option Shares, whether or not vested, as of the
date on which notice of termination is given to the Optionee, and
the Optionee shall have the right to exercise the Option as to
any or all of such shares until the earlier of (i) the expiration
of the Option Term and (ii) the 90th day following the date of
such termination, at which time the Option shall terminate.
7. Additional Provisions Related to Exercise. (a)
The Option shall be exercisable only on such date or dates and
during such period and for such number of shares of Common Stock
as are set forth in this Agreement.
(b) To exercise the Option, the Optionee shall follow
the procedures set forth in Section 4 hereof. Upon the exercise
of the Option as a time when there is not in effect a
registration statement under the Securities Act of 1933, as
amended, relating to the shares of Common Stock issuable upon
exercise of the Option, the Optionee shall provide the Company
with such representations and warranties as may be required by
the Committee to the effect that the Acquired Shares are being
acquired for investment and not with a view to the distribution
thereof. Anything contained herein to the contrary
notwithstanding, in the event the Board shall determine, in its
sole and subjective discretion, that the registration,
qualification or listing of the Option Shares upon a securities
exchange or under any state or Federal law, or the consent or
approval or any government or regulatory body, is necessary or
desirable as a condition of or in connection with the exercise of
the Option, the Option may not be exercised, in whole or in part,
unless and until such registration, qualification, listing,
consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Board.
(c) The Option shall not be affected by any change of
duties or position of the Optionee (including transfer to or from
a subsidiary), so long as the Optionee continues to be an
employee of the Company or one of its subsidiaries. Nothing in
the Option granted hereunder shall confer upon the Optionee any
right to continue in the employ of the Company or any of its
subsidiaries or interfere in any way with the right of the
Company or its subsidiaries or the stockholders of the Company,
as the case may be, to terminate the Optionee's employment or to
increase or decrease the Optionee's compensation at any time.
8. Restriction on Transfer. The Option may not be
transferred, pledged, assigned, hypothecated (whether by
operation of law or otherwise), sold or otherwise disposed of in
any way by the Optionee, except by will or by the laws of descent
and distribution, and may be exercised during the lifetime of the
Optionee only by the Optionee. If the Optionee dies, the Option
shall thereafter be exercisable, during the applicable period
specified in Section 3, by the Optionee's Designated Beneficiary
or personal representatives, heirs or legatees (as provided in
the Plan) to the full extent to which the Option was exercisable
by the Optionee at the time of the Optionee's death as provided
herein. The Option shall not be subject to execution, attachment
or similar process. Any attempted transfer, pledge, assignment,
hypothecation, sale or other disposition of the Option contrary
to the provisions hereof, and the levy of any execution,
attachment or similar process upon the Option, shall be null and
void and without effect.
9. Restrictive Legend. In order to reflect certain
restrictions on disposition of the shares acquired upon exercise
of the Option (the "Restricted Shares"), all stock certificates
representing the Restricted Shares issued shall, if determined by
the Company to be appropriate, have affixed thereto a legend
substantially in the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THE SHARES HAVE
BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE TRANSFERRED, PLEDGED,
ASSIGNED, HYPOTHECATED, SOLD OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES
UNDER THE SECURITIES ACT OF 1933 OR AN OPINION OF COUNSEL
SATISFACTORY TO SYNAPTIC PHARMACEUTICAL CORPORATION THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER SAID ACT."
10. Notices. All notices or other communications
which are required or permitted hereunder shall be in writing and
sufficient if (i) personally delivered or sent by telecopier,
(ii) sent by nationally-recognized overnight courier or (iii)
sent by registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
if to the Optionee, to:
Robert L. Spence
50 Jackson Place
Lyndhurst, NJ 07071
if to the Corporation, to:
Synaptic Pharmaceutical Corporation
215 College Road
Paramus, New Jersey 07652
Attention: President
Telecopier: 201-261-0623
or to such other address as the party to whom notice is to be
given may have furnished to each other party in writing in
accordance herewith. Any such communication shall be deemed to
have been given (i) when delivered, if personally delivered, sent
by telecopier or sent by nationally-recognized overnight courier
and (ii) on the third Business Day (as hereinafter defined)
following the date on which the piece of mail containing such
communication is posted, if sent by mail. As used herein,
"Business Day" means a day that is not a Saturday, Sunday or a
day on which banking institutions in the city to which the notice
or communication is to be sent are not required to be open.
11. No Waiver. No waiver of any breach or condition
of this Agreement shall be deemed to be a waiver of any other or
subsequent breach or condition, whether of like or different
nature.
12. Optionee Undertaking. The Optionee hereby agrees
to take whatever additional actions and execute whatever
additional documents the Company may in its reasonable judgement
deem necessary or advisable in order to carry out or effect one
or more of the obligations or restrictions imposed on the
Optionee pursuant to the express provisions of this Agreement.
13. Modification of Rights. The rights of the
Optionee are subject to modification and termination in certain
events as provided in this Agreement and the Plan.
14. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of
New Jersey without giving effect to principles of conflicts of
laws.
15. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the
same instrument.
16. Entire Agreement. This Agreement, the Employment
Agreement(the provisions relating to stock options of which are
hereby incorporated herein by reference) and the Plan constitute
the entire agreement between the parties with respect to the
subject matter hereof and thereof, and supersede all previously
written or oral negotiations, commitments, representations and
agreements with respect thereto. In the event of any
inconsistency among the terms of this Agreement, the terms of the
Employment Agreement and the terms of the Plan, the terms of the
Employment Agreement shall control.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first written above.
SYNAPTIC PHARMACEUTICAL CORPORATION
By:/s/Kathleen P. Mullinix
---------------------------------------
Kathleen P. Mullinix
Chairman, President and Chief Executive
Officer
/s/Robert L. Spence
------------------------------------------
Robert L. Spence
NONTRANSFERABLE
INCENTIVE STOCK OPTION AGREEMENT
---------------------------------
THIS AGREEMENT, dated as of the 21st day of March,
1996, is by and between SYNAPTIC PHARMACEUTICAL CORPORATION, a
Delaware corporation (the "Company"), and Lisa L. Reiter (the
"Optionee," which term as used herein shall be deemed to include
any successor to the Optionee by will or by the laws of descent
and distribution, unless the context shall otherwise require).
W I T N E S S E T H:
WHEREAS, the Company and the Optionee are parties to an
Employment Agreement (the "Employment Agreement") dated as of
February 7, 1994; and
WHEREAS, pursuant to the Synaptic Pharmaceutical
Corporation 1996 Incentive Plan (the "Plan"), the Company, acting
through the Compensation Committee (the "Committee") of its Board
of Directors (the "Board"), on March 21, 1996 (the "Start Date"),
granted to the Optionee an option to purchase up to an aggregate
of 10,000 shares of Common Stock, $0.01 par value, of the Company
(the "Common Stock"), at the price of $16.75 per share, such
option to be for the term and upon the terms and conditions
hereinafter stated.
NOW, THEREFORE, in consideration of the mutual premises
and undertakings hereinafter set forth, the parties hereto agree
as follows:
1. Option; Option Price. Pursuant to said action of
the Committee, the Company has granted to the Optionee the option
(the "Option") to purchase, upon and subject to the terms and
conditions of this Agreement and the terms and conditions of the
Plan (which are hereby incorporated by reference herein) 10,000
shares (the "Option Shares") of Common Stock of the Company at
the price of $16.75 per share (the "Option Price"), which Option
is intended to qualify for Federal income tax purposes as an
"incentive stock option" within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code").
2. Term. The term (the "Option Term") of the Option
shall commence on the Start Date and expire on the tenth
anniversary of the Start Date, unless the Option shall
theretofore have been terminated in accordance with the terms
hereof or of the Plan.
3. Exercisability; Time of Exercise.
(a) General. Unless accelerated in the discretion of
the Committee or as otherwise provided herein, the Option shall
be exercisable as to 25% of the Option Shares from and after the
Start Date, and shall become exercisable as to an additional 25%
of the Option Shares on January 1 of each of 1997, 1998, and
1999; provided, however, that if the Optionee dies or retires
with the consent of the Company any time prior to January 1,
1999, then the Option shall be exercisable as to the greater of
(i) 25% of the Option Shares and (ii) that number of Option
Shares which is equal to the product of (A) the total number of
Option Shares and (B) 2-1/12% times the number of full calendar
months which shall have elapsed during the period commencing on
January 1, 1996, and ending on the date of the Optionee's death
or retirement; provided further, however, that if, at any time
prior to January 1, 1999, the Optionee's employment with the
Company is terminated in contemplation of, or at any
time within one (1) year following, a Change in Control
(capitalized terms used and not defined herein having the
meanings ascribed to them in the Employment Agreement ) and such
termination constitutes a Termination Without Cause or a
Resignation for Good Reason, then the Option shall, as of the date of
such termination, become exercisable in full as to all of the Option Shares.
The Option shall remain exercisable as to all of such shares until the
expiration of the Option Term, unless it is terminated earlier as
provided in any of the other paragraphs of this Section 3 or
Section 6 or as provided in the Plan.
(b) Termination for Cause. If the Optionee shall cease
to be an employee of the Company as a result of a termination by
the Company for Cause, the Option shall automatically terminate
on, and the Optionee shall have no further right to exercise the
Option on or after, the date as of which notice of such
termination is given to the Optionee by the Company.
(c) Termination without Cause. If the Optionee's
employment with the Company terminates for any reason other than
Cause or the Optionee's death or Disability or Retirement (as
defined in the Plan), the Option shall thereafter be exercisable
only to the extent of the purchase rights, if any, which shall
have accrued pursuant to paragraph (a) of this Section 3 as of
the date of such termination, and the Option and such accrued
rights to purchase shall in any event terminate upon, and the
Optionee shall have no further right to exercise the Option
after, the earlier of (i) the expiration of the Option Term and
(ii) (A) in the case of any such termination governed by Section
11 of the Employment Agreement, 120 days after the date of such
termination and (B) in the case of any such termination not
governed by said Section 11, 90 days after the date of such
termination; provided, however, that, in the case of any such
termination other than a termination resulting from the Optionee
being "disabled" within the meaning of Section 22(e)(3) of the
Code, the Option shall no longer be treated as an "incentive
stock option" within the meaning of Section 422 of the Code
unless exercised within three (3) months following the date of
such termination.
(d) Termination as a Result of Disability or
Retirement. If the Optionee's employment with the Company
terminates as a result of the Optionee's Disability or
Retirement, the Option shall thereafter be exercisable only to
the extent of the purchase rights, if any, which shall have
accrued pursuant to paragraph (a) of this Section 3 as of the
date of such termination, and the Option and such accrued rights
to purchase shall in any event terminate upon, and the Optionee
shall have no further right to exercise the Option after, the
earlier of (i) the expiration of the Option Term and (ii) 180
days after the date of such termination; provided, however, that,
in the case of any such termination other than a termination
resulting from the Optionee being "disabled" within the meaning
of Section 22(e)(3) of the Code, the Option shall no longer be
treated as an "incentive stock option" within the meaning of
Section 422 of the Code unless exercised within three (3) months
following the date of such termination.
(e) Termination as a Result of Death. If the
Optionee's employment with the Company terminates as a result of
the Optionee's death, the Option shall thereafter be exercisable
by the Optionee's Designated Beneficiary (as defined in the Plan)
or personal representatives, heirs or legatees (as provided in
the Plan), but only to the extent of the purchase rights, if any,
which shall have accrued pursuant to paragraph (a) of this
Section 3 as of the date of such termination, and the Option and
such accrued rights to purchase shall in any event terminate
upon, and the Optionee shall have no further right to exercise
the Option after, the earlier of (i) the expiration of the Option
Term and (ii) one (1) year after the date of death.
Notwithstanding anything contained in the Plan to the contrary,
the Option shall continue to be treated as an "incentive stock
option" within the meaning of Section 422 of the Code even if it
is not exercised until after the third month following the date
of the Optionee's death.
(f) Death Following Disability or Retirement. In the
event of the Optionee's death within 180 days following the
Optionee's termination of employment as a result of the
Optionee's Disability or Retirement, the Option shall thereafter
be exercisable by the Optionee's Designated Beneficiary or
personal representatives, heirs or legatees, to the extent of the
purchase rights, if any, which shall have accrued pursuant to
paragraph (a) of this Section 3 as of the date of such
termination, for a period of one (1) year following the date of
death but in no event later than the expiration of the Option
Term; provided, however, that, in the case in which the
Optionee's termination of employment resulted from the Optionee
being "disabled" within the meaning of Section 22(e)(3) of the
Code, the Option shall no longer be treated as an "incentive
stock option" within the meaning of Section 422 of the Code
unless exercised within one (1) year following the date of such
termination; and provided further, however, that, in all other
cases, the Option shall no longer be treated as an "incentive
stock option" within the meaning of Section 422 of the Code
unless exercised within three (3) months following the date of
such termination.
4. Procedure for Exercise. (a) The Option may be
exercised, from time to time, in whole or in part (but for the
purchase of whole shares only), by delivery of a written notice
(the "Notice") from the Optionee to the Secretary of the Company,
which Notice shall:
(i) state that the Optionee elects to exercise
the Option;
(ii) state the number of shares with respect to
which the Optionee is exercising the Option
(the "Acquired Shares");
(iii) include any representations of the
Optionee required under Section 7(b)
hereof;
(iv) state the method of payment for the Acquired
Shares pursuant to Section 4(b);
(v) in the event that the Option shall be
exercised by any person other than the
Optionee pursuant to Sections 3 and 8,
include appropriate proof of the right of
such person to exercise the Option; and
(vi) state the date upon which the Optionee
desires to consummate the purchase of the
Acquired Shares (which date must be prior to
the termination of such Option).
(b) Payment of the Option Price for the Acquired
Shares shall, unless otherwise provided by the Committee, be made
in cash or by personal or certified check.
5. No Rights as a Stockholder. The Optionee shall not
have any privileges of a stockholder with respect to any Option
Shares until the date of a stock certificate representing such
Option Shares is issued to the Optionee.
6. Adjustments.
(a) Stock Dividends, Splits, Subdivisions or
Combinations. Subject to the other provisions of this Section 6,
if, at any time while the Option is outstanding, the Common Stock
is changed by reason of dividends payable in Common Stock or
splits, subdivisions or combinations of shares of Common Stock,
then the number of shares of Common Stock deliverable upon the
exercise thereafter of the Option shall be increased or decreased
proportionately, as the case may be, without change in the
aggregate Option Price.
(b) Cash Mergers. Upon the occurrence of a merger on
consolidation of the Company with another corporation in a
transaction in which the stockholders of the Company receive cash
consideration in exchange for their shares of capital stock of
the Company (a "cash merger"), the Option shall automatically
terminate; provided, however, that the Optionee shall be given
(i) written notice of such cash merger at least 20 days prior to
its proposed effective date (as specified in such notice) and
(ii) an opportunity, during the period commencing with delivery
of such notice and ending ten (10) days prior to such proposed
effective date, to exercise the Option in full as to all of the
Option Shares, whether or not then vested.
(c) Assumption or Substitution of Options.
Notwithstanding anything contained herein or in the Plan to the
contrary, Section 6(b) shall not be applicable if provision shall
be made in connection with such cash merger for the assumption of
the Option by, or the substitution for the Option of a new option
covering the stock of, the surviving, successor or purchasing
corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number, kind and option price of shares
subject to such option; provided, however, that the Board shall,
to the extent not inconsistent with the best interests of the
Company or its subsidiaries (such best interests to be determined
in good faith by the Board, in its sole discretion), use its best
efforts to ensure that any such assumption or substitution will
not constitute a modification, extension or renewal of the Option
within the meaning of Section 424(h) of the Code and the
regulations thereunder.
(d) Corporate Transactions. Notwithstanding anything
contained herein or in the Plan to the contrary, upon the
occurrence of (i) a merger or consolidation of the Company with
another corporation in a transaction (other than a cash merger)
in which the Company shall not survive or in which the Company is
the survivor but its capital stock is exchanged for stock,
securities, or property of another entity or (ii) a sale of all
or substantially all of the assets of the Company (any
transaction described in clause (i) or (ii) being referred to
herein as a "corporate transaction"), provision shall be made in
connection with such corporate transaction for the assumption of
the Option by, or the substitution for the Option of a new option
covering the stock of, the surviving, successor or purchasing
corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number, kind and option price of shares
subject to such option; provided, however, that the Board shall,
to the extent not inconsistent with the best interests of the
Company or its subsidiaries (such best interests to be determined
in good faith by the Board, in its sole discretion), use its best
efforts to ensure that any such assumption or substitution will
not constitute a modification, extension or renewal of the Option
within the meaning of Section 424(h) of the Code and the
regulations thereunder.
(e) Termination within One Year of Cash Merger or
Corporate Transaction. Notwithstanding anything contained herein
or in the Plan to the contrary, in the event the Optionee's
employment with the Company or the person which is the surviving,
successor or purchasing corporation in a cash merger to which
Section 6(c) applies or a corporate transaction to which Section
6(d) applies, or a parent or subsidiary thereof, is terminated
without Cause and other than as a result of the Optionee's death
or disability, at any time prior to the first anniversary of such
transaction or merger, the Option shall become exercisable in
full as to all Option Shares, whether or not vested, as of the
date on which notice of termination is given to the Optionee, and
the Optionee shall have the right to exercise the Option as to
any or all of such shares until the earlier of (i) the expiration
of the Option Term and (ii) the 90th day following the date of
such termination, at which time the Option shall terminate.
7. Additional Provisions Related to Exercise. (a)
The Option shall be exercisable only on such date or dates and
during such period and for such number of shares of Common Stock
as are set forth in this Agreement.
(b) To exercise the Option, the Optionee shall follow
the procedures set forth in Section 4 hereof. Upon the exercise
of the Option as a time when there is not in effect a
registration statement under the Securities Act of 1933, as
amended, relating to the shares of Common Stock issuable upon
exercise of the Option, the Optionee shall provide the Company
with such representations and warranties as may be required by
the Committee to the effect that the Acquired Shares are being
acquired for investment and not with a view to the distribution
thereof. Anything contained herein to the contrary
notwithstanding, in the event the Board shall determine, in its
sole and subjective discretion, that the registration,
qualification or listing of the Option Shares upon a securities
exchange or under any state or Federal law, or the consent or
approval or any government or regulatory body, is necessary or
desirable as a condition of or in connection with the exercise of
the Option, the Option may not be exercised, in whole or in part,
unless and until such registration, qualification, listing,
consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Board.
(c) The Option shall not be affected by any change of
duties or position of the Optionee (including transfer to or from
a subsidiary), so long as the Optionee continues to be an
employee of the Company or one of its subsidiaries. Nothing in
the Option granted hereunder shall confer upon the Optionee any
right to continue in the employ of the Company or any of its
subsidiaries or interfere in any way with the right of the
Company or its subsidiaries or the stockholders of the Company,
as the case may be, to terminate the Optionee's employment or to
increase or decrease the Optionee's compensation at any time.
8. Restriction on Transfer. The Option may not be
transferred, pledged, assigned, hypothecated (whether by
operation of law or otherwise), sold or otherwise disposed of in
any way by the Optionee, except by will or by the laws of descent
and distribution, and may be exercised during the lifetime of the
Optionee only by the Optionee. If the Optionee dies, the Option
shall thereafter be exercisable, during the applicable period
specified in Section 3, by the Optionee's Designated Beneficiary
or personal representatives, heirs or legatees (as provided in
the Plan) to the full extent to which the Option was exercisable
by the Optionee at the time of the Optionee's death as provided
herein. The Option shall not be subject to execution, attachment
or similar process. Any attempted transfer, pledge, assignment,
hypothecation, sale or other disposition of the Option contrary
to the provisions hereof, and the levy of any execution,
attachment or similar process upon the Option, shall be null and
void and without effect.
9. Restrictive Legend. In order to reflect certain
restrictions on disposition of the shares acquired upon exercise
of the Option (the "Restricted Shares"), all stock certificates
representing the Restricted Shares issued shall, if determined by
the Company to be appropriate, have affixed thereto a legend
substantially in the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THE SHARES HAVE
BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE TRANSFERRED, PLEDGED,
ASSIGNED, HYPOTHECATED, SOLD OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES
UNDER THE SECURITIES ACT OF 1933 OR AN OPINION OF COUNSEL
SATISFACTORY TO SYNAPTIC PHARMACEUTICAL CORPORATION THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER SAID ACT."
10. Notices. All notices or other communications
which are required or permitted hereunder shall be in writing and
sufficient if (i) personally delivered or sent by telecopier,
(ii) sent by nationally-recognized overnight courier or (iii)
sent by registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
if to the Optionee, to:
Lisa L. Reiter
530 East 72nd Street
New York, New York 10021
if to the Corporation, to:
Synaptic Pharmaceutical Corporation
215 College Road
Paramus, New Jersey 07652
Attention: President
Telecopier: 201-261-0623
or to such other address as the party to whom notice is to be
given may have furnished to each other party in writing in
accordance herewith. Any such communication shall be deemed to
have been given (i) when delivered, if personally delivered, sent
by telecopier or sent by nationally-recognized overnight courier
and (ii) on the third Business Day (as hereinafter defined)
following the date on which the piece of mail containing such
communication is posted, if sent by mail. As used herein,
"Business Day" means a day that is not a Saturday, Sunday or a
day on which banking institutions in the city to which the notice
or communication is to be sent are not required to be open.
11. No Waiver. No waiver of any breach or condition
of this Agreement shall be deemed to be a waiver of any other or
subsequent breach or condition, whether of like or different
nature.
12. Optionee Undertaking. The Optionee hereby agrees
to take whatever additional actions and execute whatever
additional documents the Company may in its reasonable judgement
deem necessary or advisable in order to carry out or effect one
or more of the obligations or restrictions imposed on the
Optionee pursuant to the express provisions of this Agreement.
13. Modification of Rights. The rights of the
Optionee are subject to modification and termination in certain
events as provided in this Agreement and the Plan.
14. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of
New Jersey without giving effect to principles of conflicts of
laws.
15. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the
same instrument.
16. Entire Agreement. This Agreement, the Employment
Agreement(the provisions relating to stock options of which are
hereby incorporated herein by reference) and the Plan constitute
the entire agreement between the parties with respect to the
subject matter hereof and thereof, and supersede all previously
written or oral negotiations, commitments, representations and
agreements with respect thereto. In the event of any
inconsistency among the terms of this Agreement, the terms of the
Employment Agreement and the terms of the Plan, the terms of the
Employment Agreement shall control.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first written above.
SYNAPTIC PHARMACEUTICAL CORPORATION
By:/s/Kathleen P. Mullinix
---------------------------------------
Kathleen P. Mullinix
Chairman, President and Chief Executive
Officer
/s/Lisa L. Reiter
------------------------------------------
Lisa L. Reiter
NONTRANSFERABLE
NONQUALIFIED STOCK OPTION AGREEMENT
-----------------------------------
THIS AGREEMENT, dated as of the 21st day of March,
1996, is by and between SYNAPTIC PHARMACEUTICAL CORPORATION, a
Delaware corporation (the "Company"), and Richard L. Weinshank
(the "Optionee," which term as used herein shall be deemed to
include any successor to the Optionee by will or by the laws of
descent and distribution, unless the context shall otherwise
require).
W I T N E S S E T H:
WHEREAS, the Company and the Optionee are parties to an
Employment Agreement (the "Employment Agreement") dated as of
April 6, 1995; and
WHEREAS, pursuant to the Synaptic Pharmaceutical
Corporation 1996 Incentive Plan (the "Plan"), the Company, acting
through the Compensation Committee (the "Committee") of its Board
of Directors (the "Board"), on March 21, 1996 (the "Start Date"),
granted to the Optionee an option to purchase up to an aggregate
of 2,500 shares of Common Stock, $0.01 par value, of the Company
(the "Common Stock"), at the price of $13.00 per share, such
option to be for the term and upon the terms and conditions
hereinafter stated.
NOW, THEREFORE, in consideration of the mutual premises
and undertakings hereinafter set forth, the parties hereto agree
as follows:
1. Option; Option Price. Pursuant to said action of
the Committee, the Company has granted to the Optionee the option
(the "Option") to purchase, upon and subject to the terms and
conditions of this Agreement and the terms and conditions of the
Plan (which are hereby incorporated by reference herein) 2,500
shares (the "Option Shares") of Common Stock of the Company at
the price of $13.00 per share (the "Option Price"), which Option
is not intended to qualify for Federal income tax purposes as an
"incentive stock option" within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code").
2. Term. The term (the "Option Term") of the Option
shall commence on the Start Date and expire on the tenth
anniversary of the Start Date, unless the Option shall
theretofore have been terminated in accordance with the terms
hereof or of the Plan.
3. Exercisability; Time of Exercise.
(a) General. Unless accelerated in the discretion of
the Committee or as otherwise provided herein, the Option shall
become exercisable as to 25% of the Option Shares on January 1,
1997, and shall become exercisable as to an additional 25% of the
Option Shares on January 1 of each of 1998, 1999, and 2000;
provided, however, that if the Optionee dies or retires with the
consent of the Company any time prior to January 1, 2000, then
the Option shall be exercisable as to that number of Option
Shares which is equal to the product of (i) the total number of
Option Shares and (ii) 2-1/12% times the number of full calendar
months which shall have elapsed during the period commencing on
January 1, 1996, and ending on the date of the Optionee's death
or retirement; provided further, however, that if, at any time
prior to January 1, 2000, the Optionee's employment with the
Company is terminated in contemplation of, or at any time within one (1)
year following, a Change in Control (capitalized terms used and not defined
herein having the meanings ascribed to them in the Employment Agreement ) and
such termination constitutes a Termination Without Cause or a
Resignation for Good Reason, then the Option shall, as of the date of such
termination, become exercisable in full as to all of the Option Shares.
The Option shall remain exercisable as to all of such shares until the
expiration of the Option Term, unless it is terminated earlier as
provided in any of the other paragraphs of this Section 3 or
Section 6 or as provided in the Plan.
(b) Termination for Cause. If the Optionee shall cease
to be an employee of the Company as a result of a termination by
the Company for Cause, the Option shall automatically terminate
on, and the Optionee shall have no further right to exercise the
Option on or after, the date as of which notice of such
termination is given to the Optionee by the Company.
(c) Termination without Cause. If the Optionee's
employment with the Company terminates for any reason other than
Cause or the Optionee's death or Disability or Retirement (as
defined in the Plan), the Option shall thereafter be exercisable
only to the extent of the purchase rights, if any, which shall
have accrued pursuant to paragraph (a) of this Section 3 as of
the date of such termination, and the Option and such accrued
rights to purchase shall in any event terminate upon, and the
Optionee shall have no further right to exercise the Option
after, the earlier of (i) the expiration of the Option Term and
(ii) (A) in the case of any such termination governed by Section
11 of the Employment Agreement, 120 days after the date of such
termination and (B) in the case of any such termination not
governed by said Section 11, 90 days after the date of such
termination.
(d) Termination as a Result of Disability or
Retirement. If the Optionee's employment with the Company
terminates as a result of the Optionee's Disability or
Retirement, the Option shall thereafter be exercisable only to
the extent of the purchase rights, if any, which shall have
accrued pursuant to paragraph (a) of this Section 3 as of the
date of such termination, and the Option and such accrued rights
to purchase shall in any event terminate upon, and the Optionee
shall have no further right to exercise the Option after, the
earlier of (i) the expiration of the Option Term and (ii) 180
days after the date of such termination.
(e) Termination as a Result of Death. If the
Optionee's employment with the Company terminates as a result of
the Optionee's death, the Option shall thereafter be exercisable
by the Optionee's Designated Beneficiary (as defined in the Plan)
or personal representatives, heirs or legatees (as provided in
the Plan), but only to the extent of the purchase rights, if any,
which shall have accrued pursuant to paragraph (a) of this
Section 3 as of the date of such termination, and the Option and
such accrued rights to purchase shall in any event terminate
upon, and the Optionee shall have no further right to exercise
the Option after, the earlier of (i) the expiration of the Option
Term and (ii) one (1) year after the date of death.
(f) Death Following Disability or Retirement. In the
event of the Optionee's death within 180 days following the
Optionee's termination of employment as a result of the
Optionee's Disability or Retirement, the Option shall thereafter
be exercisable by the Optionee's Designated Beneficiary or
personal representatives, heirs or legatees, to the extent of the
purchase rights, if any, which shall have accrued pursuant to
paragraph (a) of this Section 3 as of the date of such
termination, for a period of one (1) year following the date of
death but in no event later than the expiration of the Option
Term.
4. Procedure for Exercise. (a) The Option may be
exercised, from time to time, in whole or in part (but for the
purchase of whole shares only), by delivery of a written notice
(the "Notice") from the Optionee to the Secretary of the Company,
which Notice shall:
(i) state that the Optionee elects to exercise
the Option;
(ii) state the number of shares with respect to
which the Optionee is exercising the Option
(the "Acquired Shares");
(iii) include any representations of the
Optionee required under Section 7(b)
hereof;
(iv) state the method of payment for the Acquired
Shares pursuant to Section 4(b);
(v) in the event that the Option shall be
exercised by any person other than the
Optionee pursuant to Sections 3 and 8,
include appropriate proof of the right of
such person to exercise the Option; and
(vi) state the date upon which the Optionee
desires to consummate the purchase of the
Acquired Shares (which date must be prior to
the termination of such Option).
(b) Payment of the Option Price for the Acquired
Shares shall, unless otherwise provided by the Committee, be made
in cash or by personal or certified check.
5. No Rights as a Stockholder. The Optionee shall not
have any privileges of a stockholder with respect to any Option
Shares until the date of a stock certificate representing such
Option Shares is issued to the Optionee.
6. Adjustments.
(a) Stock Dividends, Splits, Subdivisions or
Combinations. Subject to the other provisions of this Section 6,
if, at any time while the Option is outstanding, the Common Stock
is changed by reason of dividends payable in Common Stock or
splits, subdivisions or combinations of shares of Common Stock,
then the number of shares of Common Stock deliverable upon the
exercise thereafter of the Option shall be increased or decreased
proportionately, as the case may be, without change in the
aggregate Option Price.
(b) Cash Mergers. Upon the occurrence of a merger on
consolidation of the Company with another corporation in a
transaction in which the stockholders of the Company receive cash
consideration in exchange for their shares of capital stock of
the Company (a "cash merger"), the Option shall automatically
terminate; provided, however, that the Optionee shall be given
(i) written notice of such cash merger at least 20 days prior to
its proposed effective date (as specified in such notice) and
(ii) an opportunity, during the period commencing with delivery
of such notice and ending ten (10) days prior to such proposed
effective date, to exercise the Option in full as to all of the
Option Shares, whether or not then vested.
(c) Assumption or Substitution of Options.
Notwithstanding anything contained herein or in the Plan to the
contrary, Section 6(b) shall not be applicable if provision shall
be made in connection with such cash merger for the assumption of
the Option by, or the substitution for the Option of a new option
covering the stock of, the surviving, successor or purchasing
corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number, kind and option price of shares
subject to such option.
(d) Corporate Transactions. Notwithstanding anything
contained herein or in the Plan to the contrary, upon the
occurrence of (i) a merger or consolidation of the Company with
another corporation in a transaction (other than a cash merger)
in which the Company shall not survive or in which the Company is
the survivor but its capital stock is exchanged for stock,
securities, or property of another entity or (ii) a sale of all
or substantially all of the assets of the Company (any
transaction described in clause (i) or (ii) being referred to
herein as a "corporate transaction"), provision shall be made in
connection with such corporate transaction for the assumption of
the Option by, or the substitution for the Option of a new option
covering the stock of, the surviving, successor or purchasing
corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number, kind and option price of shares
subject to such option.
(e) Termination within One Year of Cash Merger or
Corporate Transaction. Notwithstanding anything contained herein
or in the Plan to the contrary, in the event the Optionee's
employment with the Company or the person which is the surviving,
successor or purchasing corporation in a cash merger to which
Section 6(c) applies or a corporate transaction to which Section
6(d) applies, or a parent or subsidiary thereof, is terminated
without Cause and other than as a result of the Optionee's death
or disability, at any time prior to the first anniversary of such
transaction or merger, the Option shall become exercisable in
full as to all Option Shares, whether or not vested, as of the
date on which notice of termination is given to the Optionee, and
the Optionee shall have the right to exercise the Option as to
any or all of such shares until the earlier of (i) the expiration
of the Option Term and (ii) the 90th day following the date of
such termination, at which time the Option shall terminate.
7. Additional Provisions Related to Exercise. (a)
The Option shall be exercisable only on such date or dates and
during such period and for such number of shares of Common Stock
as are set forth in this Agreement.
(b) To exercise the Option, the Optionee shall follow
the procedures set forth in Section 4 hereof. Upon the exercise
of the Option as a time when there is not in effect a
registration statement under the Securities Act of 1933, as
amended, relating to the shares of Common Stock issuable upon
exercise of the Option, the Optionee shall provide the Company
with such representations and warranties as may be required by
the Committee to the effect that the Acquired Shares are being
acquired for investment and not with a view to the distribution
thereof. Anything contained herein to the contrary
notwithstanding, in the event the Board shall determine, in its
sole and subjective discretion, that the registration,
qualification or listing of the Option Shares upon a securities
exchange or under any state or Federal law, or the consent or
approval or any government or regulatory body, is necessary or
desirable as a condition of or in connection with the exercise of
the Option, the Option may not be exercised, in whole or in part,
unless and until such registration, qualification, listing,
consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Board.
(c) The Option shall not be affected by any change of
duties or position of the Optionee (including transfer to or from
a subsidiary), so long as the Optionee continues to be an
employee of the Company or one of its subsidiaries. Nothing in
the Option granted hereunder shall confer upon the Optionee any
right to continue in the employ of the Company or any of its
subsidiaries or interfere in any way with the right of the
Company or its subsidiaries or the stockholders of the Company,
as the case may be, to terminate the Optionee's employment or to
increase or decrease the Optionee's compensation at any time.
8. Restriction on Transfer. The Option may not be
transferred, pledged, assigned, hypothecated (whether by
operation of law or otherwise), sold or otherwise disposed of in
any way by the Optionee, except by will or by the laws of descent
and distribution, and may be exercised during the lifetime of the
Optionee only by the Optionee. If the Optionee dies, the Option
shall thereafter be exercisable, during the applicable period
specified in Section 3, by the Optionee's Designated Beneficiary
or personal representatives, heirs or legatees (as provided in
the Plan) to the full extent to which the Option was exercisable
by the Optionee at the time of the Optionee's death as provided
herein. The Option shall not be subject to execution, attachment
or similar process. Any attempted transfer, pledge, assignment,
hypothecation, sale or other disposition of the Option contrary
to the provisions hereof, and the levy of any execution,
attachment or similar process upon the Option, shall be null and
void and without effect.
9. Restrictive Legend. In order to reflect certain
restrictions on disposition of the shares acquired upon exercise
of the Option (the "Restricted Shares"), all stock certificates
representing the Restricted Shares issued shall, if determined by
the Company to be appropriate, have affixed thereto a legend
substantially in the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THE SHARES HAVE
BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE TRANSFERRED, PLEDGED,
ASSIGNED, HYPOTHECATED, SOLD OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES
UNDER THE SECURITIES ACT OF 1933 OR AN OPINION OF COUNSEL
SATISFACTORY TO SYNAPTIC PHARMACEUTICAL CORPORATION THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER SAID ACT."
10. Notices. All notices or other communications
which are required or permitted hereunder shall be in writing and
sufficient if (i) personally delivered or sent by telecopier,
(ii) sent by nationally-recognized overnight courier or (iii)
sent by registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
if to the Optionee, to:
Richard L. Weinshank
268 Vandelinda Avenue
Teaneck, New Jersey 07666
if to the Corporation, to:
Synaptic Pharmaceutical Corporation
215 College Road
Paramus, New Jersey 07652
Attention: President
Telecopier: 201-261-0623
or to such other address as the party to whom notice is to be
given may have furnished to each other party in writing in
accordance herewith. Any such communication shall be deemed to
have been given (i) when delivered, if personally delivered, sent
by telecopier or sent by nationally-recognized overnight courier
and (ii) on the third Business Day (as hereinafter defined)
following the date on which the piece of mail containing such
communication is posted, if sent by mail. As used herein,
"Business Day" means a day that is not a Saturday, Sunday or a
day on which banking institutions in the city to which the notice
or communication is to be sent are not required to be open.
11. No Waiver. No waiver of any breach or condition
of this Agreement shall be deemed to be a waiver of any other or
subsequent breach or condition, whether of like or different
nature.
12. Optionee Undertaking. The Optionee hereby agrees
to take whatever additional actions and execute whatever
additional documents the Company may in its reasonable judgement
deem necessary or advisable in order to carry out or effect one
or more of the obligations or restrictions imposed on the
Optionee pursuant to the express provisions of this Agreement.
13. Modification of Rights. The rights of the
Optionee are subject to modification and termination in certain
events as provided in this Agreement and the Plan.
14. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of
New Jersey without giving effect to principles of conflicts of
laws.
15. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the
same instrument.
16. Entire Agreement. This Agreement, the Employment
Agreement(the provisions relating to stock options of which are
hereby incorporated herein by reference) and the Plan constitute
the entire agreement between the parties with respect to the
subject matter hereof and thereof, and supersede all previously
written or oral negotiations, commitments, representations and
agreements with respect thereto. In the event of any
inconsistency among the terms of this Agreement, the terms of the
Employment Agreement and the terms of the Plan, the terms of the
Employment Agreement shall control.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first written above.
SYNAPTIC PHARMACEUTICAL CORPORATION
By:/s/Kathleen P. Mullinix
---------------------------------------
Kathleen P. Mullinix
Chairman, President and Chief Executive
Officer
/s/Richard L. Weinshank
------------------------------------------
Richard L. Weinshank
[FORM OF]
NONTRANSFERABLE
INCENTIVE STOCK OPTION AGREEMENT
---------------------------------
THIS AGREEMENT, dated as of the ___day of __________
19__, is by and between SYNAPTIC PHARMACEUTICAL CORPORATION, a
Delaware corporation (the "Company"), and ________________ (the
"Optionee," which term as used herein shall be deemed to include
any successor to the Optionee by will or by the laws of descent
and distribution, unless the context shall otherwise require).
W I T N E S S E T H:
WHEREAS, pursuant to the Synaptic Pharmaceutical
Corporation 1996 Incentive Plan (the "Plan"), the Company, acting
through the Compensation Committee (the "Committee") of its Board
of Directors (the "Board"), on _____________, 19__ (the "Start
Date"), granted to the Optionee an option to purchase up to an
aggregate of ___ shares of Common Stock, $0.01 par value, of the
Company (the "Common Stock"), at the price of $____ per share,
such option to be for the term and upon the terms and conditions
hereinafter stated.
NOW, THEREFORE, in consideration of the mutual premises
and undertakings hereinafter set forth, the parties hereto agree
as follows:
1. Option; Option Price. Pursuant to said action of
the Committee, the Company has granted to the Optionee the option
(the "Option") to purchase, upon and subject to the terms and
conditions of this Agreement and the terms and conditions of the
Plan (which are hereby incorporated by reference herein) ___
shares (the "Option Shares") of Common Stock of the Company at
the price of $____ per share (the "Option Price"), which Option
is intended to qualify for Federal income tax purposes as an
"incentive stock option" within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code").
2. Term. The term (the "Option Term") of the Option
shall commence on the Start Date and expire on the tenth
anniversary of the Start Date, unless the Option shall
theretofore have been terminated in accordance with the terms
hereof or of the Plan.
3. Exercisability; Time of Exercise.
(a) General. Unless accelerated in the discretion of
the Committee or as otherwise provided herein, the Option shall
become exercisable as to 25% of the Option Shares on the first
anniversary of ____________, 199_, and shall become exercisable
as to an additional 25% of the Option Shares on each subsequent
anniversary thereof; provided, however, that if the Optionee dies
or retires with the consent of the Company any time prior to the
fourth anniversary of the Start Date, then the Option shall be
exercisable as to that number of Option Shares which is equal to
the product of (i) the total number of Option Shares and (ii) 2-1/12%
times the number of full calendar months which shall have
elapsed during the period commencing on the Start Date and ending
on the date of the Optionee's death or retirement. The Option
shall remain exercisable as to all of such shares until the
expiration of the Option Term, unless it is terminated earlier as
provided in any of the other paragraphs of this Section 3 or
Section 6 or as provided in the Plan.
(b) Termination for Cause. If the Optionee shall cease
to be an employee of the Company as a result of a termination by
the Company for cause (as hereinafter defined), the Option shall
automatically terminate on, and the Optionee shall have no
further right to exercise the Option on or after, the date as of
which notice of such termination is given to the Optionee by the
Company. For purposes of this Agreement, the term "cause" shall
mean (i) the Optionee's willful failure to perform those duties
the Optionee is required to perform as an employee of the
Company, (ii) the Optionee's conviction, or plea of guilty or
nolo contendere to the commission, of a felony, (iii) the
Optionee's commission of any fraud, misappropriation or
misconduct which causes demonstrable injury to the Company, (iv)
an act of dishonesty by the Optionee resulting or intending to
result, directly or indirectly, in gain or personal enrichment at
the expense of the Company, (v) any breach of the Optionee's
fiduciary duties to the Company or (vi) a failure by the Optionee
to devote the Optionee's full time and attention exclusively to
the business and affairs of the Company; provided, however, that
the term "cause" shall not include a violation of the foregoing
clause (i), (v) or (vi) if the violation results from the
Optionee being required to perform the Optionee's employment
duties beyond a 50-mile radius of New York City.
(c) Termination without Cause. If the Optionee's
employment with the Company terminates for any reason other than
cause or the Optionee's death or Disability or Retirement (as
defined in the Plan), the Option shall thereafter be exercisable
only to the extent of the purchase rights, if any, which shall
have accrued pursuant to paragraph (a) of this Section 3 as of
the date of such termination, and the Option and such accrued
rights to purchase shall in any event terminate upon, and the
Optionee shall have no further right to exercise the Option
after, the earlier of (i) the expiration of the Option Term and
(ii) 30 days after the date of such termination.
(d) Termination as a Result of Disability or
Retirement. If the Optionee's employment with the Company
terminates as a result of the Optionee's Disability or
Retirement, the Option shall thereafter be exercisable only to
the extent of the purchase rights, if any, which shall have
accrued pursuant to paragraph (a) of this Section 3 as of the
date of such termination, and the Option and such accrued rights
to purchase shall in any event terminate upon, and the Optionee
shall have no further right to exercise the Option after, the
earlier of (i) the expiration of the Option Term and (ii) 180
days after the date of such termination; provided, however, that,
in the case of any such termination other than a termination
resulting from the Optionee being "disabled" within the meaning
of Section 22(e)(3) of the Code, the Option shall no longer be
treated as an "incentive stock option" within the meaning of
Section 422 of the Code unless exercised within three (3) months
following the date of such termination.
(e) Termination as a Result of Death. If the
Optionee's employment with the Company terminates as a result of
the Optionee's death, the Option shall thereafter be exercisable
by the Optionee's Designated Beneficiary (as defined in the Plan)
or personal representatives, heirs or legatees (as provided in
the Plan), but only to the extent of the purchase rights, if any,
which shall have accrued pursuant to paragraph (a) of this
Section 3 as of the date of such termination, and the Option and
such accrued rights to purchase shall in any event terminate
upon, and the Optionee shall have no further right to exercise
the Option after, the earlier of (i) the expiration of the Option
Term and (ii) one (1) year after the date of death.
Notwithstanding anything contained in the Plan to the contrary,
the Option shall continue to be treated as an "incentive stock
option" within the meaning of Section 422 of the Code even if it
is not exercised until after the third month following the date
of the Optionee's death.
(f) Death Following Disability or Retirement. In the
event of the Optionee's death within 180 days following the
Optionee's termination of employment as a result of the
Optionee's Disability or Retirement, the Option shall thereafter
be exercisable by the Optionee's Designated Beneficiary or
personal representatives, heirs or legatees, to the extent of the
purchase rights, if any, which shall have accrued pursuant to
paragraph (a) of this Section 3 as of the date of such
termination, for a period of one (1) year following the date of
death but in no event later than the expiration of the Option
Term; provided, however, that, in the case in which the
Optionee's termination of employment resulted from the Optionee
being "disabled" within the meaning of Section 22(e)(3) of the
Code, the Option shall no longer be treated as an "incentive
stock option" within the meaning of Section 422 of the Code
unless exercised within one (1) year following the date of such
termination; and provided further, however, that, in all other
cases, the Option shall no longer be treated as an "incentive
stock option" within the meaning of Section 422 of the Code
unless exercised within three (3) months following the date of
such termination.
4. Procedure for Exercise. (a) The Option may be
exercised, from time to time, in whole or in part (but for the
purchase of whole shares only), by delivery of a written notice
(the "Notice") from the Optionee to the Secretary of the Company,
which Notice shall:
(i) state that the Optionee elects to exercise
the Option;
(ii) state the number of shares with respect to
which the Optionee is exercising the Option
(the "Acquired Shares");
(iii) include any representations of the Optionee
required under Section 7(b) hereof;
(iv) state the method of payment for the Acquired
Shares pursuant to Section 4(b);
(v) in the event that the Option shall be
exercised by any person other than the
Optionee pursuant to Sections 3 and 8,
include appropriate proof of the right of
such person to exercise the Option; and
(vi) state the date upon which the Optionee
desires to consummate the purchase of the
Acquired Shares (which date must be prior to
the termination of such Option).
(b) Payment of the Option Price for the Acquired
Shares shall, unless otherwise provided by the Committee, be made
in cash or by personal or certified check.
5. No Rights as a Stockholder. The Optionee shall not
have any privileges of a stockholder with respect to any Option
Shares until the date of a stock certificate representing such
Option Shares is issued to the Optionee.
6. Adjustments.
(a) Stock Dividends, Splits, Subdivisions or
Combinations. Subject to the other provisions of this Section 6,
if, at any time while the Option is outstanding, the Common Stock
is changed by reason of dividends payable in Common Stock or
splits, subdivisions or combinations of shares of Common Stock,
then the number of shares of Common Stock deliverable upon the
exercise thereafter of the Option shall be increased or decreased
proportionately, as the case may be, without change in the
aggregate Option Price.
(b) Cash Mergers. Upon the occurrence of a merger on
consolidation of the Company with another corporation in a
transaction in which the stockholders of the Company receive cash
consideration in exchange for their shares of capital stock of
the Company (a "cash merger"), the Option shall automatically
terminate; provided, however, that the Optionee shall be given
(i) written notice of such cash merger at least 20 days prior to
its proposed effective date (as specified in such notice) and
(ii) an opportunity, during the period commencing with delivery
of such notice and ending ten (10) days prior to such proposed
effective date, to exercise the Option in full as to all of the
Option Shares, whether or not then vested.
(c) Assumption or Substitution of Options.
Notwithstanding anything contained herein or in the Plan to the
contrary, Section 6(b) shall not be applicable if provision shall
be made in connection with such cash merger for the assumption of
the Option by, or the substitution for the Option of a new option
covering the stock of, the surviving, successor or purchasing
corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number, kind and option price of shares
subject to such option; provided, however, that the Board shall,
to the extent not inconsistent with the best interests of the
Company or its subsidiaries (such best interests to be determined
in good faith by the Board, in its sole discretion), use its best
efforts to ensure that any such assumption or substitution will
not constitute a modification, extension or renewal of the Option
within the meaning of Section 424(h) of the Code and the
regulations thereunder.
(d) Corporate Transactions. Notwithstanding anything
contained herein or in the Plan to the contrary, upon the
occurrence of (i) a merger or consolidation of the Company with
another corporation in a transaction (other than a cash merger)
in which the Company shall not survive or in which the Company is
the survivor but its capital stock is exchanged for stock,
securities, or property of another entity or (ii) a sale of all
or substantially all of the assets of the Company (any
transaction described in clause (i) or (ii) being referred to
herein as a "corporate transaction"), provision shall be made in
connection with such corporate transaction for the assumption of
the Option by, or the substitution for the Option of a new option
covering the stock of, the surviving, successor or purchasing
corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number, kind and option price of shares
subject to such option; provided, however, that the Board shall,
to the extent not inconsistent with the best interests of the
Company or its subsidiaries (such best interests to be determined
in good faith by the Board, in its sole discretion), use its best
efforts to ensure that any such assumption or substitution will
not constitute a modification, extension or renewal of the Option
within the meaning of Section 424(h) of the Code and the
regulations thereunder.
(e) Termination within One Year of Cash Merger or
Corporate Transaction. Notwithstanding anything contained herein
or in the Plan to the contrary, in the event the Optionee's
employment with the Company or the person which is the surviving,
successor or purchasing corporation in a cash merger to which
Section 6(c) applies or a corporate transaction to which Section
6(d) applies, or a parent or subsidiary thereof, is terminated
without cause (as defined in Section 3(b)) and other than as a
result of the Optionee's death or disability at any time prior to
the first anniversary of such transaction or merger, the Option
shall become exercisable in full as to all Option Shares, whether
or not vested, as of the date on which notice of termination is
given to the Optionee, and the Optionee shall have the right to
exercise the Option as to any or all of such shares until the
earlier of (i) the expiration of the Option Term and (ii) the
90th day following the date of such termination, at which time
the Option shall terminate.
7. Additional Provisions Related to Exercise. (a)
The Option shall be exercisable only on such date or dates and
during such period and for such number of shares of Common Stock
as are set forth in this Agreement.
(b) To exercise the Option, the Optionee shall follow
the procedures set forth in Section 4 hereof. Upon the exercise
of the Option as a time when there is not in effect a
registration statement under the Securities Act of 1933, as
amended, relating to the shares of Common Stock issuable upon
exercise of the Option, the Optionee shall provide the Company
with such representations and warranties as may be required by
the Committee to the effect that the Acquired Shares are being
acquired for investment and not with a view to the distribution
thereof. Anything contained herein to the contrary
notwithstanding, in the event the Board shall determine, in its
sole and subjective discretion, that the registration,
qualification or listing of the Option Shares upon a securities
exchange or under any state or Federal law, or the consent or
approval or any government or regulatory body, is necessary or
desirable as a condition of or in connection with the exercise of
the Option, the Option may not be exercised, in whole or in part,
unless and until such registration, qualification, listing,
consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Board.
(c) The Option shall not be affected by any change of
duties or position of the Optionee (including transfer to or from
a subsidiary), so long as the Optionee continues to be an
employee of the Company or one of its subsidiaries. Nothing in
the Option granted hereunder shall confer upon the Optionee any
right to continue in the employ of the Company or any of its
subsidiaries or interfere in any way with the right of the
Company or its subsidiaries or the stockholders of the Company,
as the case may be, to terminate the Optionee's employment or to
increase or decrease the Optionee's compensation at any time.
8. Restriction on Transfer. The Option may not be
transferred, pledged, assigned, hypothecated (whether by
operation of law or otherwise), sold or otherwise disposed of in
any way by the Optionee, except by will or by the laws of descent
and distribution, and may be exercised during the lifetime of the
Optionee only by the Optionee. If the Optionee dies, the Option
shall thereafter be exercisable, during the applicable period
specified in Section 3, by the Optionee's Designated Beneficiary
or personal representatives, heirs or legatees (as provided in
the Plan) to the full extent to which the Option was exercisable
by the Optionee at the time of the Optionee's death as provided
herein. The Option shall not be subject to execution, attachment
or similar process. Any attempted transfer, pledge, assignment,
hypothecation, sale or other disposition of the Option contrary
to the provisions hereof, and the levy of any execution,
attachment or similar process upon the Option, shall be null and
void and without effect.
9. Restrictive Legend. In order to reflect certain
restrictions on disposition of the shares acquired upon exercise
of the Option (the "Restricted Shares"), all stock certificates
representing the Restricted Shares issued shall, if determined by
the Company to be appropriate, have affixed thereto a legend
substantially in the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THE SHARES HAVE
BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE TRANSFERRED, PLEDGED,
ASSIGNED, HYPOTHECATED, SOLD OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES
UNDER THE SECURITIES ACT OF 1933 OR AN OPINION OF COUNSEL
SATISFACTORY TO SYNAPTIC PHARMACEUTICAL CORPORATION THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER SAID ACT."
10. Notices. All notices or other communications
which are required or permitted hereunder shall be in writing and
sufficient if (i) personally delivered or sent by telecopier,
(ii) sent by nationally-recognized overnight courier or (iii)
sent by registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
if to the Optionee, to:
Name
Address
Address
if to the Corporation, to:
Synaptic Pharmaceutical Corporation
215 College Road
Paramus, New Jersey 07652
Attention: President
Telecopier: 201-261-0623
or to such other address as the party to whom notice is to be
given may have furnished to each other party in writing in
accordance herewith. Any such communication shall be deemed to
have been given (i) when delivered, if personally delivered, sent
by telecopier or sent by nationally-recognized overnight courier
and (ii) on the third Business Day (as hereinafter defined)
following the date on which the piece of mail containing such
communication is posted, if sent by mail. As used herein,
"Business Day" means a day that is not a Saturday, Sunday or a
day on which banking institutions in the city to which the notice
or communication is to be sent are not required to be open.
11. No Waiver. No waiver of any breach or condition
of this Agreement shall be deemed to be a waiver of any other or
subsequent breach or condition, whether of like or different
nature.
12. Optionee Undertaking. The Optionee hereby agrees
to take whatever additional actions and execute whatever
additional documents the Company may in its reasonable judgement
deem necessary or advisable in order to carry out or effect one
or more of the obligations or restrictions imposed on the
Optionee pursuant to the express provisions of this Agreement.
13. Modification of Rights. The rights of the
Optionee are subject to modification and termination in certain
events as provided in this Agreement and the Plan.
14. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of
New Jersey without giving effect to principles of conflicts of
laws.
15. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the
same instrument.
16. Entire Agreement. This Agreement and the Plan
constitute the entire agreement between the parties with respect
to the subject matter hereof and thereof, and supersedes all
previously written or oral negotiations, commitments,
representations and agreements with respect thereto. In the
event of any inconsistency between the terms of this Agreement
and the terms of the Plan, the terms of the Plan shall control.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first written above.
SYNAPTIC PHARMACEUTICAL CORPORATION
By:_________________________________________
Kathleen P. Mullinix
Chairman, President and Chief Executive
Officer
____________________________________________
Name
[FORM OF]
NONTRANSFERABLE
NONQUALIFIED STOCK OPTION AGREEMENT
-----------------------------------
THIS AGREEMENT, dated as of the __ day of _________
19__ , is by and between SYNAPTIC PHARMACEUTICAL CORPORATION, a
Delaware corporation (the "Company"), and ________________ (the
"Optionee," which term as used herein shall be deemed to include
any successor to the Optionee by will or by the laws of descent
and distribution, unless the context shall otherwise require).
W I T N E S S E T H:
WHEREAS, pursuant to the Synaptic Pharmaceutical
Corporation 1996 Incentive Plan (the "Plan"), the Company, acting
through the Compensation Committee (the "Committee") of its Board
of Directors (the "Board"), on _____________, 19__ (the "Start
Date"), granted to the Optionee an option to purchase up to an
aggregate of ___ shares of Common Stock, $0.01 par value, of the
Company (the "Common Stock"), at the price of $____ per share,
such option to be for the term and upon the terms and conditions
hereinafter stated.
NOW, THEREFORE, in consideration of the mutual premises
and undertakings hereinafter set forth, the parties hereto agree
as follows:
1. Option; Option Price. Pursuant to said action of
the Committee, the Company has granted to the Optionee the option
(the "Option") to purchase, upon and subject to the terms and
conditions of this Agreement and the terms and conditions of the
Plan (which are hereby incorporated by reference herein) ___
shares (the "Option Shares") of Common Stock of the Company at
the price of $____ per share (the "Option Price"), which Option
is not intended to qualify for Federal income tax purposes as an
"incentive stock option" within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code").
2. Term. The term (the "Option Term") of the Option
shall commence on the Start Date and expire on the tenth
anniversary of the Start Date, unless the Option shall
theretofore have been terminated in accordance with the terms
hereof or of the Plan.
3. Exercisability; Time of Exercise.
(a) General. Unless accelerated in the discretion of
the Committee or as otherwise provided herein, the Option shall
become exercisable as to 25% of the Option Shares on the first
anniversary of ____________, 199_, and shall become exercisable
as to an additional 25% of the Option Shares on each subsequent
anniversary thereof; provided, however, that if the Optionee dies
or retires with the consent of the Company any time prior to the
fourth anniversary of the Start Date, then the Option shall be
exercisable as to that number of Option Shares which is equal to
the product of (i) the total number of Option Shares and (ii) 2-1/12%
times the number of full calendar months which shall have
elapsed during the period commencing on the Start Date and ending
on the date of the Optionee's death or retirement. The Option
shall remain exercisable as to all of such shares until the
expiration of the Option Term, unless it is terminated earlier as
provided in any of the other paragraphs of this Section 3 or
Section 6 or as provided in the Plan.
(b) Termination for Cause. If the Optionee shall cease
to be an employee of the Company as a result of a termination by
the Company for cause (as hereinafter defined), the Option shall
automatically terminate on, and the Optionee shall have no
further right to exercise the Option on or after, the date as of
which notice of such termination is given to the Optionee by the
Company. For purposes of this Agreement, the term "cause" shall
mean (i) the Optionee's willful failure to perform those duties
the Optionee is required to perform as an employee of the
Company, (ii) the Optionee's conviction, or plea of guilty or
nolo contendere to the commission, of a felony, (iii) the
Optionee's commission of any fraud, misappropriation or
misconduct which causes demonstrable injury to the Company, (iv)
an act of dishonesty by the Optionee resulting or intending to
result, directly or indirectly, in gain or personal enrichment at
the expense of the Company, (v) any breach of the Optionee's
fiduciary duties to the Company or (vi) a failure by the Optionee
to devote the Optionee's full time and attention exclusively to
the business and affairs of the Company; provided, however, that
the term "cause" shall not include a violation of the foregoing
clause (i), (v) or (vi) if the violation results from the
Optionee being required to perform the Optionee's employment
duties beyond a 50-mile radius of New York City.
(c) Termination without Cause. If the Optionee's
employment with the Company terminates for any reason other than
cause or the Optionee's death or Disability or Retirement (as
defined in the Plan), the Option shall thereafter be exercisable
only to the extent of the purchase rights, if any, which shall
have accrued pursuant to paragraph (a) of this Section 3 as of
the date of such termination, and the Option and such accrued
rights to purchase shall in any event terminate upon, and the
Optionee shall have no further right to exercise the Option
after, the earlier of (i) the expiration of the Option Term and
(ii) 30 days after the date of such termination.
(d) Termination as a Result of Disability or
Retirement. If the Optionee's employment with the Company
terminates as a result of the Optionee's Disability or
Retirement, the Option shall thereafter be exercisable only to
the extent of the purchase rights, if any, which shall have
accrued pursuant to paragraph (a) of this Section 3 as of the
date of such termination, and the Option and such accrued rights
to purchase shall in any event terminate upon, and the Optionee
shall have no further right to exercise the Option after, the
earlier of (i) the expiration of the Option Term and (ii) 180
days after the date of such termination.
(e) Termination as a Result of Death. If the
Optionee's employment with the Company terminates as a result of
the Optionee's death, the Option shall thereafter be exercisable
by the Optionee's Designated Beneficiary (as defined in the Plan)
or personal representatives, heirs or legatees (as provided in
the Plan), but only to the extent of the purchase rights, if any,
which shall have accrued pursuant to paragraph (a) of this
Section 3 as of the date of such termination, and the Option and
such accrued rights to purchase shall in any event terminate
upon, and the Optionee shall have no further right to exercise
the Option after, the earlier of (i) the expiration of the Option
Term and (ii) one (1) year after the date of death.
(f) Death Following Disability or Retirement. In the
event of the Optionee's death within 180 days following the
Optionee's termination of employment as a result of the
Optionee's Disability or Retirement, the Option shall thereafter
be exercisable by the Optionee's Designated Beneficiary or
personal representatives, heirs or legatees, to the extent of the
purchase rights, if any, which shall have accrued pursuant to
paragraph (a) of this Section 3 as of the date of such
termination, for a period of one (1) year following the date of
death but in no event later than the expiration of the Option
Term.
4. Procedure for Exercise. (a) The Option may be
exercised, from time to time, in whole or in part (but for the
purchase of whole shares only), by delivery of a written notice
(the "Notice") from the Optionee to the Secretary of the Company,
which Notice shall:
(i) state that the Optionee elects to exercise
the Option;
(ii) state the number of shares with respect to
which the Optionee is xercising the Option
(the "Acquired Shares");
(iii) include any representations of the
Optionee required under Section 7(b)
hereof;
(iv) state the method of payment for the Acquired
Shares pursuant to ection 4(b);
(v) in the event that the Option shall be
exercised by any person other han the
Optionee pursuant to Sections 3 and 8,
include appropriate proof of the right of
such person to exercise the Option; and
(vi) state the date upon which the Optionee
desires to consummate the urchase of the
Acquired Shares (which date must be prior to
the termination of such Option).
(b) Payment of the Option Price for the Acquired
Shares shall, unless otherwise provided by the Committee, be made
in cash or by personal or certified check.
5. No Rights as a Stockholder. The Optionee shall not
have any privileges of a stockholder with respect to any Option
Shares until the date of a stock certificate representing such
Option Shares is issued to the Optionee.
6. Adjustments.
(a) Stock Dividends, Splits, Subdivisions or
Combinations. Subject to the other provisions of this Section 6,
if, at any time while the Option is outstanding, the Common Stock
is changed by reason of dividends payable in Common Stock or
splits, subdivisions or combinations of shares of Common Stock,
then the number of shares of Common Stock deliverable upon the
exercise thereafter of the Option shall be increased or decreased
proportionately, as the case may be, without change in the
aggregate Option Price.
(b) Cash Mergers. Upon the occurrence of a merger on
consolidation of the Company with another corporation in a
transaction in which the stockholders of the Company receive cash
consideration in exchange for their shares of capital stock of
the Company (a "cash merger"), the Option shall automatically
terminate; provided, however, that the Optionee shall be given
(i) written notice of such cash merger at least 20 days prior to
its proposed effective date (as specified in such notice) and
(ii) an opportunity, during the period commencing with delivery
of such notice and ending ten (10) days prior to such proposed
effective date, to exercise the Option in full as to all of the
Option Shares, whether or not then vested.
(c) Assumption or Substitution of Options.
Notwithstanding anything contained herein or in the Plan to the
contrary, Section 6(b) shall not be applicable if provision shall
be made in connection with such cash merger for the assumption of
the Option by, or the substitution for the Option of a new option
covering the stock of, the surviving, successor or purchasing
corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number, kind and option price of shares
subject to such option.
(d) Corporate Transactions. Notwithstanding anything
contained herein or in the Plan to the contrary, upon the
occurrence of (i) a merger or consolidation of the Company with
another corporation in a transaction (other than a cash merger)
in which the Company shall not survive or in which the Company is
the survivor but its capital stock is exchanged for stock,
securities, or property of another entity or (ii) a sale of all
or substantially all of the assets of the Company (any
transaction described in clause (i) or (ii) being referred to
herein as a "corporate transaction"), provision shall be made in
connection with such corporate transaction for the assumption of
the Option by, or the substitution for the Option of a new option
covering the stock of, the surviving, successor or purchasing
corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number, kind and option price of shares
subject to such option.
(e) Termination within One Year of Cash Merger or
Corporate Transaction. Notwithstanding anything contained herein
or in the Plan to the contrary, in the event the Optionee's
employment with the Company or the person which is the surviving,
successor or purchasing corporation in a cash merger to which
Section 6(c) applies or a corporate transaction to which Section
6(d) applies, or a parent or subsidiary thereof, is terminated
without cause (as defined in Section 3(b)) and other than as a
result of the Optionee's death or disability at any time prior to
the first anniversary of such transaction or merger, the Option
shall become exercisable in full as to all Option Shares, whether
or not vested, as of the date on which notice of termination is
given to the Optionee, and the Optionee shall have the right to
exercise the Option as to any or all of such shares until the
earlier of (i) the expiration of the Option Term and (ii) the
90th day following the date of such termination, at which time
the Option shall terminate.
7. Additional Provisions Related to Exercise. (a)
The Option shall be exercisable only on such date or dates and
during such period and for such number of shares of Common Stock
as are set forth in this Agreement.
(b) To exercise the Option, the Optionee shall follow
the procedures set forth in Section 4 hereof. Upon the exercise
of the Option as a time when there is not in effect a
registration statement under the Securities Act of 1933, as
amended, relating to the shares of Common Stock issuable upon
exercise of the Option, the Optionee shall provide the Company
with such representations and warranties as may be required by
the Committee to the effect that the Acquired Shares are being
acquired for investment and not with a view to the distribution
thereof. Anything contained herein to the contrary
notwithstanding, in the event the Board shall determine, in its
sole and subjective discretion, that the registration,
qualification or listing of the Option Shares upon a securities
exchange or under any state or Federal law, or the consent or
approval or any government or regulatory body, is necessary or
desirable as a condition of or in connection with the exercise of
the Option, the Option may not be exercised, in whole or in part,
unless and until such registration, qualification, listing,
consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Board.
(c) The Option shall not be affected by any change of
duties or position of the Optionee (including transfer to or from
a subsidiary), so long as the Optionee continues to be an
employee of the Company or one of its subsidiaries. Nothing in
the Option granted hereunder shall confer upon the Optionee any
right to continue in the employ of the Company or any of its
subsidiaries or interfere in any way with the right of the
Company or its subsidiaries or the stockholders of the Company,
as the case may be, to terminate the Optionee's employment or to
increase or decrease the Optionee's compensation at any time.
8. Restriction on Transfer. The Option may not be
transferred, pledged, assigned, hypothecated (whether by
operation of law or otherwise), sold or otherwise disposed of in
any way by the Optionee, except by will or by the laws of descent
and distribution, and may be exercised during the lifetime of the
Optionee only by the Optionee. If the Optionee dies, the Option
shall thereafter be exercisable, during the applicable period
specified in Section 3, by the Optionee's Designated Beneficiary
or personal representatives, heirs or legatees (as provided in
the Plan) to the full extent to which the Option was exercisable
by the Optionee at the time of the Optionee's death as provided
herein. The Option shall not be subject to execution, attachment
or similar process. Any attempted transfer, pledge, assignment,
hypothecation, sale or other disposition of the Option contrary
to the provisions hereof, and the levy of any execution,
attachment or similar process upon the Option, shall be null and
void and without effect.
9. Restrictive Legend. In order to reflect certain
restrictions on disposition of the shares acquired upon exercise
of the Option (the "Restricted Shares"), all stock certificates
representing the Restricted Shares issued shall, if determined by
the Company to be appropriate, have affixed thereto a legend
substantially in the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THE SHARES HAVE
BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE TRANSFERRED, PLEDGED,
ASSIGNED, HYPOTHECATED, SOLD OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES
UNDER THE SECURITIES ACT OF 1933 OR AN OPINION OF COUNSEL
SATISFACTORY TO SYNAPTIC PHARMACEUTICAL CORPORATION THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER SAID ACT."
10. Notices. All notices or other communications
which are required or permitted hereunder shall be in writing and
sufficient if (i) personally delivered or sent by telecopier,
(ii) sent by nationally-recognized overnight courier or (iii)
sent by registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
if to the Optionee, to:
Name
Address
Address
if to the Corporation, to:
Synaptic Pharmaceutical Corporation
215 College Road
Paramus, New Jersey 07652
Attention: President
Telecopier: 201-261-0623
or to such other address as the party to whom notice is to be
given may have furnished to each other party in writing in
accordance herewith. Any such communication shall be deemed to
have been given (i) when delivered, if personally delivered, sent
by telecopier or sent by nationally-recognized overnight courier
and (ii) on the third Business Day (as hereinafter defined)
following the date on which the piece of mail containing such
communication is posted, if sent by mail. As used herein,
"Business Day" means a day that is not a Saturday, Sunday or a
day on which banking institutions in the city to which the notice
or communication is to be sent are not required to be open.
11. No Waiver. No waiver of any breach or condition
of this Agreement shall be deemed to be a waiver of any other or
subsequent breach or condition, whether of like or different
nature.
12. Optionee Undertaking. The Optionee hereby agrees
to take whatever additional actions and execute whatever
additional documents the Company may in its reasonable judgement
deem necessary or advisable in order to carry out or effect one
or more of the obligations or restrictions imposed on the
Optionee pursuant to the express provisions of this Agreement.
13. Modification of Rights. The rights of the
Optionee are subject to modification and termination in certain
events as provided in this Agreement and the Plan.
14. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of
New Jersey without giving effect to principles of conflicts of
laws.
15. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the
same instrument.
16. Entire Agreement. This Agreement and the Plan
constitute the entire agreement between the parties with respect
to the subject matter hereof and thereof, and supersedes all
previously written or oral negotiations, commitments,
representations and agreements with respect thereto. In the
event of any inconsistency between the terms of this Agreement
and the terms of the Plan, the terms of the Plan shall control.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first written above.
SYNAPTIC PHARMACEUTICAL CORPORATION
By:________________________________________
Kathleen P. Mullinix
Chairman, President and Chief Executive
Officer
___________________________________________
Name
<PAGE>
EXHIBIT 11
SYNAPTIC PHARMACEUTICAL CORPORATION
Computation of Primary Net Loss Per Share
Three Months Ended March 31,
1996 1995
---------- ----------
Weighted average common shares outstanding 7,494,020 384,438
Shares sold and shares underlying options
granted within 12 months of initial
registration statement filing, considered
outstanding for periods prior to the
initial public offering, based on the
treasury stock method and the initial
public offering price -- 34,665
---------- ----------
7,494,020 419,103
========== ==========
Net loss ($1,103,674) ($1,113,324)
========== ==========
Net loss per share $(0.15) ($2.66)
==== =====
<PAGE>
EXHIBIT 11
SYNAPTIC PHARMACEUTICAL CORPORATION
Computation of Fully Diluted Net Loss Per Share
Three Months Ended March 31,
1996 1995
--------- --------
Weighted average common shares outstanding 7,494,020 384,438
Shares underlying common stock options outstanding
considered exercised, based on the treasury
stock method 338,546 225,799
Shares underlying 1993 Warrants outstanding
considered exercised, based on the treasury
stock method 101,040 --
Shares sold and shares underlying options granted
within 12 months of initial registration
statement filing, considered outstanding for
periods prior to the initial public offering,
based on the treasury stock method and the
initial public offering price -- 34,665
Weighted average convertible preferred stock
outstanding, as if converted:
Series 1 -- 1,260,245
Series 2 -- 1,207,848
Series 3 -- 1,924,574
Series 4 -- 535,715
--------- ---------
Shares used in computation of net loss per share 7,933,606 5,573,284
========= =========
Net loss ($1,103,674) ($1,113,324)
========== ==========
Net loss per share ($0.14) ($0.20)
===== =====
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 29,311,442
<SECURITIES> 6,339,203
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 37,390,240
<PP&E> 4,582,217
<DEPRECIATION> (2,393,371)
<TOTAL-ASSETS> 41,067,294
<CURRENT-LIABILITIES> 885,690
<BONDS> 0
0
0
<COMMON> 75,394
<OTHER-SE> 40,022,584
<TOTAL-LIABILITY-AND-EQUITY> 41,067,294
<SALES> 0
<TOTAL-REVENUES> 1,781,084
<CGS> 0
<TOTAL-COSTS> 3,347,899
<OTHER-EXPENSES> (463,141)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,277
<INCOME-PRETAX> (1,103,674)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,103,674)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,103,674)
<EPS-PRIMARY> (.15)
<EPS-DILUTED> 0
</TABLE>
