<PAGE>
As filed with the Securities and Exchange Commission on July 10, 1996
Registration No. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------
COCENSYS, INC.
-------------------------------------------------------
(Exact name of registrant as specified in its charter)
-----------------------
Delaware 33-0538836
- -------------------------------- ---------------------------------
(State of Incorporation) (I.R.S. Employer Identification No.)
-----------------------
213 Technology Drive
Irvine, CA 92718
(714) 753-6100
-------------------------------------------------------
(Address of principal executive offices)
-----------------------
1990 Stock Option Plan
Non-Statutory Stock Option
-------------------------------------------------------
(Full title of the plans)
Daniel L. Korpolinski
President & Chief Executive Officer
CoCensys, Inc.
213 Technology Drive
Irvine, CA 92718
(714) 753-6100
-------------------------------------------------------
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
-----------------------
Copies to:
Alan C. Mendelson, Esq.
Cooley Godward Castro Huddleson & Tatum
3000 El Camino Real
Palo Alto, CA 94306
(415) 843-5000
-----------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
TITLE OF SECURITIES TO AMOUNT TO BE PROPOSED MAXIMUM OFFERING PROPOSED MAXIMUM AMOUNT OF
BE REGISTERED REGISTERED PRICE PER SHARE (1) AGGREGATE OFFERING PRICE (1) REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Stock Options and Common
Stock ($.001 par value) 1,025,000 $0.50 - $9.00 $8,132,118.69 $2,804.18
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee. The offering price per share and the aggregate offering price
are based upon (a) the weighted average exercise price, for shares subject to
options previously granted under the Registrant's (i) 1990 Stock Option Plan and
(ii) for options granted outside of the Registrant's option plans in accordance
with Rule 457(h) under the Securities Act of 1933, as amended (the "Act") and
(b) the average of the high and low prices of the Registrant's Common Stock as
reported on the Nasdaq National Market on July 2, 1996 in accordance with Rule
457(c) under the Act, for (i) shares issuable pursuant to the 1990 Stock Option
Plan. The following chart illustrates the calculation of the registration fee:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
OFFERING PRICE PER AGGREGATE OFFERING
TYPE OF SHARES NUMBER OF SHARES SHARE PRICE
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Shares issuable pursuant to outstanding
options under the 1990 Stock Option Plan 399,971 $3.25 - $9.00 (1)(a)(i) $2,756,859.50
- --------------------------------------------------------------------------------------------------------------
Shares issuable outside of plans 25,000 $0.50 (1)(a)(ii) $12,500.00
- --------------------------------------------------------------------------------------------------------------
Shares issuable pursuant to the 1990 Stock
Option Plan 600,029 $8.9375 (1)(b)(i) $5,362,759.19
- --------------------------------------------------------------------------------------------------------------
Registration Fee $2,804.18
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
</TABLE>
Approximate date of commencement of proposed sale to the public: As soon
as practicable after this Registration Statement becomes effective.
ii.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by CoCensys, Inc. (the "Company") with
the Securities and Exchange Commission are incorporated by reference into
this Registration Statement:
1. The Company's annual report on Form 10-K for the fiscal year
ended December 31, 1995.
2. The Company's quarterly report on Form 10-Q for the quarter
ended March 31, 1996.
3. The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A, filed December 10, 1992.
4. The description of the Preferred Share Purchase Rights
contained in the Company's Registration Statement on Form 8-A filed May 16,
1995.
All reports and other documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to
the filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference herein and to be a
part of this registration statement from the date of the filing of such
reports and documents.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant's Certificate of Incorporation and Bylaws include
provisions to (i) eliminate the personal liability of its directors for
monetary damages resulting from breaches of their fiduciary duty to the
extent permitted by Section 102(b)(7) of the General Corporation Law of
Delaware (the "Delaware Law") and (ii) authorize the Registrant to indemnify
its directors and officers to the fullest extent permitted by Section 145 of
the Delaware Law, including circumstances in which indemnfication is
otherwise discretionary. Pursuant to Section 145 of the Delaware Law, a
corporation generally has the power to indemnify its present and former
directors, officers, employees and agents against expenses incurred by them
in connection with any suit to which they are, or are threatened to be made,
a party by reason of their serving in such positions so long as they acted in
good faith and in a manner they reasonably believed to be in, or not opposed
to, the best interests of a corporation, and with respect to any criminal
action, they had no reasonable cause to believe their conduct was unlawful.
The Registrant believes that these provisions are necessary to attract and
retain qualified persons as directors and officers. These provisions do not
eliminate liability for breach of the director's duty of loyalty to the
Registrant or its stockholders, for acts or omissions not in good faith or
involving intentional misconduct or knowing violations of law, for any
transaction from which the director derived an improper personal benefit or
for any willful or negligent payment of any unlawful dividend or any unlawful
stock purchase agreement or redemption.
The Registrant has entered into agreements with its directors and
executive officers that require the Registrant to indemnify such persons
against expenses, judgments, fines, settlements and other amounts actually
and reasonably incurred (including expenses of a derivative action) in
connection with any proceeding, whether actual or threatened, to which any
such person may be made a party by reason of the fact that such person is or
was a director or officer of the Registrant or any of its listed enterprises,
provided such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of the
Registrant and, with respect to any criminal proceeding, had no reasonable
cause to believe his or her conduct was unlawful. The indemnification
agreements also set forth certain procedures that will apply in the event of
a claim for indemnification thereunder.
The Registrant has purchased an insurance policy covering the officers
and directors of the Registrant with respect to certain liabilities arising
under the Securities Act or otherwise.
EXHIBITS
EXHIBIT
NUMBER
- ------
5 Opinion of Cooley Godward Castro Huddleson & Tatum.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Cooley Godward Castro Huddleson & Tatum is contained in
Exhibit 5 to this Registration Statement.
24 Power of Attorney is contained on the signature pages.
99.1 Form of Supplemental Stock Option
1.
<PAGE>
UNDERTAKINGS
1. The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission pursuant
to Rule 424(b) promulgated under the Securities Act if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement;
PROVIDED, HOWEVER, that paragraphs (a)(i) and (a)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the issuer
pursuant to section 13 or section 15(d) of the Exchange Act that are
incorporated by reference herein.
(b) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered herein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
2. The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be
a new registration statement relating to the securities offered herein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
3. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Irvine, State of California, on July 8, 1996.
COCENSYS, INC.
By: /s/ Daniel L. Korpolinski
-----------------------------------------
Daniel L. Korpolinski,
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Daniel L. Korpolinski and Alan C.
Mendelson, and each or any one of them, his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or any of them, or their or his substitutes or substitute, may
lawfully do or cause to be done by virtue hereof.
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ Daniel L. Korpolinski President; Chief Executive Officer; July 8, 1996
- ------------------------- Director (Principal Executive,
(Daniel L. Korpolinski) Financial and Accounting Officer)
/s/ Lowell E. Sears Chairman of the Board July 1, 1996
- -------------------------
(Lowell E. Sears)
/s/ James C. Blair Director July 8, 1996
- -------------------------
(James C. Blair)
/s/ Kelvin W. Gee Director July 8, 1996
- -------------------------
(Kelvin W. Gee)
/s/ Robert G. McNeil
- ------------------------- Director July 8, 1996
(Robert G. McNeil,
Ph.D.)
/s/ Alan C. Mendelson Director July 8, 1996
- -------------------------
(Alan C. Mendelson)
/s/ Timothy J. Rink Director July 8, 1996
- -------------------------
(Timothy J. Rink,
M.D., Sc.D.)
- ------------------------- Director ________, 1996
(Eckard Weber, M.D.)
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
5 Opinion of Cooley Godward Castro Huddleson
& Tatum.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Cooley Godward Castro Huddleson
& Tatum is contained in Exhibit 5 to this
Registration Statement
24 Power of Attorney is contained on the
signature pages.
99.1 Form of Supplemental Stock Option
4.
<PAGE>
[LETTERHEAD]
July 8, 1996
CoCensys, Inc.
213 Technology Drive
Irvine, California 92718
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in connection
with the filing by CoCensys, Inc. (the "Company") of a Registration Statement
on Form S-8 (the "Registration Statement") with the Securities and Exchange
Commission covering the offering of up to 1,000,000 shares of the Company's
Common Stock, $.001 par value, pursuant to its 1990 Stock Option Plan (the
"Plan") and up to 25,000 shares of the Company's Common Stock, $.001 par
value, pursuant to a nonstatutory stock option granted outside of the
Company's option plans (the "Shares").
In connection with this opinion, we have examined the Registration Statement,
the Plans, your Certificate of Incorporation and Bylaws, as amended, and such
other documents, records, certificates, memoranda and other instruments as we
deem necessary as a basis for this opinion. We have assumed the genuineness and
authenticity of all documents submitted to us as originals, the conformity to
originals of all documents submitted to us as copies thereof, and the due
execution and delivery of all documents where due execution and delivery are a
prerequisite to the effectiveness thereof.
On the basis of the foregoing, and in reliance thereon, we are of the opinion
that the Shares, when sold and issued in accordance with the Plan, the option
agreement and the Registration Statement, will be validly issued, fully paid,
and nonassessable (except as to shares issued pursuant to certain deferred
payment arrangements, which will be fully paid and nonassessable when such
deferred payments are made in full).
We consent to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
COOLEY GODWARD CASTRO
HUDDLESON & TATUM
/s/ Andrea Vachss
- ----------------------
Andrea Vachss
<PAGE>
Exhibit 23.1
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the 1990 Stock Option Plan and Non-Statutory Stock
Option of our report dated February 28, 1996, with respect to the
consolidated financial statements of CoCensys, Inc. included in its Annual
Report on Form 10-K for the year ended December 31, 1995, filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
Orange County, California
July 8, 1996
<PAGE>
SUPPLEMENTAL STOCK OPTION
Nancy T.Y. Lan, Optionee:
CoCensys, Inc. (the "Company") has this day granted to you, the optionee
named above, an option to purchase shares of the common stock of the Company
("Common Stock"). This option is not intended to qualify and will not be
treated as an "incentive stock option" within the meaning of Section 422A of
the Internal Revenue Code of 1986, as amended from time to time (the "Code").
All capitalized terms set forth herein are as defined in Exhibit A
attached hereto and incorporated herein by reference.
The details of your option are as follows:
1. NUMBER OF SHARES. The total number of shares of Common Stock subject
to this option is Twenty-Five Thousand (25,000). Subject to the limitations
contained herein, this option shall be exercisable with respect to each
installment shown below on or after the date of vesting applicable to such
installment, as follows:
Number of Shares Date of Earliest Exercise
(Installment) (Vest)
- -------------------- -------------------------------
6,250 January 1, 1994
520 On February 1, 1994
and on the 1st day of
each subsequent month
until fully vested.
The option may be exercisable with respect to some or all of the
shares allotted to that period, and may be exercised with respect to some or
all of the shares allotted to such period and/or any prior period as to which
the Option was not fully exercised. During the remainder of the term of the
Option (if its term extends beyond the end of the installment periods), the
Option may be exercised from time to time with respect to any shares then
remaining subject to the Option.
2. EXERCISE OF OPTION.
(a) The exercise price of this option is $.50 per share.
(b) Payment of the exercise price per share is due in full in cash
(including check) upon exercise of all or any part of each installment which
has become exercisable by you. Notwithstanding the foregoing, this option
may be exercised pursuant to a program developed
1.
<PAGE>
under Regulation T as promulgated by the Federal Reserve Board which results
in the receipt of cash (or check) by the Company prior to the issuance of
Common Stock.
(c) This option may be exercised, to the extent specified above,
by delivering a notice of exercise (in a form designated by the Company)
together with the exercise price to the Secretary of the Company, or to such
other person as the Company may designate, during regular business hours,
together with such additional documents as the Company may then require.
(d) By exercising this option you agree that the Company may
require you to enter an arrangement providing for the cash payment by you to
the Company of any tax withholding obligation of the Company arising by
reason of: (1) the exercise of this option; (2) the lapse of any substantial
risk of forfeiture to which the shares are subject at the time of exercise;
or (3) the disposition of shares acquired upon such exercise.
(e) The minimum number of shares with respect to which this option
may be exercised at any one time is one hundred (100) except (f) as to an
installment subject to exercise, as set forth in paragraph 1, which amounts
to fewer than one hundred (100) shares, in which case, as to the exercise of
that installment, the number of such shares in such installment shall be the
minimum number of shares, and (g) with respect to the final exercise of this
option this minimum shall not apply. In no event may this option be
exercised for any number of shares which would require the issuance of
anything other than whole shares.
3. REGISTRATION OF SHARES. Notwithstanding anything to the contrary
contained herein, this option may not be exercised unless the shares issuable
upon exercise of this option are then registered under the Act or, if such
shares are not then so registered, the Company has determined that such
exercise and issuance would be exempt from the registration requirements of
the Act.
4. TERM OF OPTION. The term of this option commences on the date
hereof and, unless sooner terminated as set forth below, terminates on
October 31, 2005 (which date shall be no more than ten (10) years from the
date this option is granted). This option shall terminate prior to the
expiration of its term as follows: thirty (30) days after the termination of
your Continuous Status as an Employee of the Company or an affiliate of the
Company for any reason or for no reason unless:
(a) such termination of employment is due to your permanent and
total disability (within the meaning of Section 422A(c)(6) of the Code), in
which event the option shall terminate on the earlier of the termination date
set forth above or one (1) year following such termination of your Continuous
Status as an Employee of the Company;
(b) such termination of employment is due to your death, in which
event the option shall terminate on the earlier of the termination date set
forth above or eighteen (18) months after your death; or
2.
<PAGE>
(c) during any part of such thirty (30)-day period the option is
not exercisable solely because of the condition set forth in paragraph 4
above, in which event the option shall not terminate until the earlier of the
termination date set forth above or until it shall have been exercisable for
an aggregate period of thirty (30) days after the termination of employment;
or
(d) exercise of the option within thirty (30) days after
termination of your employment with the Company or with an affiliate would
result in liability under section 16(b) of the Securities Exchange Act of
1934, in which case the option will terminate on the earlier of (i) the
termination date set forth above, (ii) the tenth (10th) day after the last
date upon which exercise would result in such liability or (iii) six (6)
months and ten (10) days after the termination of your employment with the
Company or an affiliate. However, this option may be exercised following
termination of employment only as to that number of shares as to which it was
exercisable on the date of termination of employment under the provisions of
paragraph 1 of this option.
5. TRANSFERABILITY. This option is not transferable, except by will
or by the laws of descent and distribution, or pursuant to a qualified
domestic relations order satisfying the requirements of Rule 16b-3 and the
rules thereunder (a "QDRO"), and shall be exercisable during the lifetime of
the person to whom the Option is granted only by such person or any
transferee pursuant to a QDRO. The person to whom the Option is granted may,
by delivering written notice to the Company, in a form satisfactory to the
Company, designate a third party who, in the event of the death of the
Optionee, shall thereafter be entitled to exercise the Option.
6. NOTICES. Any notices provided for in this option or the Plan shall
be given in writing and shall be deemed effectively given upon receipt or, in
the case of notices delivered by the Company to you, five (5) days after
deposit in the United States mail, postage prepaid, addressed to you at the
address specified below or at such other address as you hereafter designate
by written notice to the Company.
7. ADMINISTRATION OF OPTION. This Option shall be administered by the
Board unless and until the Board delegates administration to a Committee, as
provided below. Whether or not the Board has delegated administration, the
Board shall have the final power to determine all questions of policy and
expediency that may arise in the administration of this Option.
(a) The Board shall have the power to construe and interpret this
Option, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Option agreement, in a manner and to
the extent it shall deem necessary or expedient to make the Option fully
effective.
(b) The Board may delegate administration of the Option to a
committee composed of not fewer than two (2) members, all of the members of
which Committee shall be Disinterested Persons and may also be, in the
discretion of the Board, Outside Directors. If administration is delegated
to a Committee, the Committee shall have, in connection with the
administration of the Option, the powers theretofore possessed by the Board
(and references in
3.
<PAGE>
this Option to the Board shall thereafter be to the Committee), subject,
however, to such resolutions, not inconsistent with the provisions of the
Option, as may be adopted from time to time by the Board. The Board may
abolish the Committee at any time and revest in the Board the administration
of the Option. Additionally, and notwithstanding anything to the contrary
contained herein, the Board may expressly determine that the requirement that
the Committee be composed of two (2) members be waived and may delegate
administration of the Option to any person or persons and the term
"Committee" shall apply to any person or persons to whom such authority has
been delegated.
(c) The Board at any time, and from time to time, may amend the
terms of this Option; PROVIDED, however, that the rights and obligations
under this Option shall not be impaired by any such amendment unless (i) the
Company requests the consent of the above-named Optionee and (ii) such
Optionee consents in writing.
8. COVENANTS OF THE COMPANY. During the terms of this Option, the
Company shall keep available at all times the number of shares of stock
required to satisfy such Option.
9. MISCELLANEOUS.
(a) This option is not an employment contract and nothing in this
option shall be deemed to create in any way whatsoever any obligation on your
part to continue in the employ of the Company, or of the Company to continue
your employment with the Company. In the event that this option is granted
to you in connection with the performance of services as a consultant or
director, references to employment, employee and similar terms shall be
deemed to include the performance of services as a consultant or a director,
as the case may be, provided, however, that no rights as an employee shall
arise by reason of the use of such terms.
(b) Neither the Optionee nor any person to whom the Option is
transferred under Paragraph 7 shall be deemed to be the holder of, or to have
any of the rights of a holder with respect to, any shares subject to this
Option unless and until such person has satisfied all requirements for
exercise of this Option pursuant to its terms.
(c) Throughout the term of this Option, the Company shall provide
to the holder of this Option, not later than one hundred twenty (120) days
after the close of each of the Company's fiscal years during the Option term,
such financial and other information regarding the Company as comprises the
annual report to the stockholders of the Company provided for in the bylaws
of the Company.
(d) The Board or the Committee shall have the authority to effect,
at any time and from time to time (1) the repricing of any outstanding Option
and/or (2) with the consent of the affected holders of this Option, the
cancellation of any outstanding Options and the grant in substitution
therefor of new Options covering the same or different numbers of shares of
Common Stock, but having an exercise price per share not less than one
hundred percent (100%) of the Fair Market Value or, in the case of a ten
percent (10%) stockholder, not less than one
4.
<PAGE>
hundred and ten percent (110%) of the Fair Market Value) per share of Common
Stock on the new grant date.
10. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) If any change is made in the stock subject to this Option
(through merger, consolidation, reorganization, recapitalization, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or otherwise), this Option will be appropriately adjusted in the
class(es) and maximum number of shares subject to this Option, and the
class(es) and number of shares and price per share of stock subject to
outstanding Options.
(b) In the event of: (1) a merger or consolidation in which the
Company is not the surviving corporation or (2) a reverse merger in which the
Company is the surviving corporation but the shares of the Company's common
stock outstanding immediately preceding the merger are converted by virtue of
the merger into other property, whether in the form of securities, cash or
otherwise then to the extent permitted by applicable law: (i) any surviving
corporation shall assume any Options outstanding or shall substitute similar
Options for those outstanding, or (ii) such Options shall continue in full
force and effect. In the event any surviving corporation refuses to assume
or continue such Options, or to substitute similar Options for those
outstanding, then, such Options shall be terminated if not exercised prior to
such event. In the event of a dissolution or liquidation of the Company, any
Options outstanding shall terminate if not exercised prior to such event.
Dated: November 1, 1995.
Very truly yours,
COCENSYS, INC.
By:
--------------------------------------
Duly authorized on behalf of the Board
of Directors
5.
<PAGE>
The undersigned:
(a) Acknowledges receipt of the foregoing option and the attachments
referenced therein and understands that all rights and liabilities with
respect to this option are set forth in the option and the Plan;
(b) Acknowledges that as of the date of grant of this option, it sets
forth the entire understanding between the undersigned optionee and the
Company and its affiliates regarding the acquisition of stock in the Company
and supersedes all prior oral and written agreements on that subject with the
exception of the following agreements only:
NONE _________
(Initial)
OTHER
________________________________
________________________________
________________________________
_________________________________
Nancy T.Y. Lan, Optionee
Address:
_________________________________
_________________________________
Attachments:
Definitions
Notice of Exercise
6.
<PAGE>
EXHIBIT A
DEFINITIONS
(a) "AFFILIATE" means any parent corporation or subsidiary corporation,
whether now or hereafter existing, as those terms are defined in Sections 424(e)
and (f) respectively, of the Code.
(b) "BOARD" means the Board of Directors of the Company.
(c) "CODE" means the Internal Revenue Code of 1986, as amended.
(d) "COMMITTEE" means a Committee appointed by the Board in accordance
with subsection 3(c) of the Plan.
(e) "COMPANY" means CoCensys, Inc., a Delaware corporation.
(f) "CONSULTANT" means any person, including an advisor, engaged by the
Company or an Affiliate to render consulting services and who is compensated for
such services, provided that the term "Consultant" shall not include Directors
who are paid only a director's fee by the Company or who are not compensated by
the Company for their services as Directors.
(g) "CONTINUOUS STATUS AS AN EMPLOYEE, DIRECTOR OR CONSULTANT" means the
employment or relationship as a Director or Consultant is not interrupted or
terminated. The Board, in its sole discretion, may determine whether Continuous
Status as an Employee, Director or Consultant shall be considered interrupted in
the case of: (1) any leave of absence approved by the Board, including sick
leave, military leave, or any other personal leave, PROVIDED, HOWEVER, that for
purposes of Incentive Stock Options, any such leave may not exceed 90 days,
unless re-employment upon the expiration of such leave is guaranteed by contract
(including certain Company policies) or statute; or (2) transfers between
locations of the Company or between the Company, Affiliates or their successors.
(h) "DIRECTOR" means a member of the Board.
(i) "DISINTERESTED PERSON" means a Director who either (1) was not during
the one year prior to service as an administrator of the Plan granted or awarded
equity securities pursuant to the Plan or any other plan of the Company or any
Affiliate entitling the participants therein to acquire equity securities of the
Company or any Affiliate except as permitted by Rule 16b-3(c)(2)(i); or (2) is
otherwise considered to be a "disinterested person" in accordance with Rule 16b-
3(c)(2)(i), or any other applicable rules, regulations or interpretations of the
Securities and Exchange Commission.
(j) "EMPLOYEE" means any person, including Officers and Directors,
employed by the Company or any Affiliate of the Company. Neither service as a
Director nor payment of a director's fee by the Company shall be sufficient to
constitute "employment" by the Company.
i.
<PAGE>
(k) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
(l) "FAIR MARKET VALUE" means, as of any date, the value of the common
stock of the Company determined as follows:
(i) If the common stock is listed on any established stock exchange
or a national market system, including without limitation Nasdaq National
Market, the Fair Market Value of a share of common stock shall be the closing
sales price for such stock (or the closing bid, if no sales were reported) as
quoted on such system or exchange (or the exchange with the greatest volume of
trading in common stock) on the day of determination, as reported in the Wall
Street Journal or such other source as the Board deems reliable;
(ii) If the common stock is quoted on the Nasdaq system (but not on
the National Market thereof) or is regularly quoted by a recognized securities
dealer but selling prices are not reported, the Fair Market Value of a share of
common stock shall be the mean between the bid and asked prices for the common
stock on the last trading day prior to the day of determination, as reported in
the Wall Street Journal or such other source as the Board deems reliable;
(iii) In the absence of an established market for the common
stock, the Fair Market Value shall be determined in good faith by the Board.
(m) "INCENTIVE STOCK OPTION" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.
(n) "OFFICER" means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(o) "OPTION" means a stock option granted pursuant to the Plan.
(p) "OPTION AGREEMENT" means a written agreement between the Company and
an Optionee evidencing the terms and conditions of an individual Option grant.
Each Option Agreement shall be subject to the terms and conditions of the Plan.
(q) "OPTIONEE" means an Employee, Director or Consultant who holds an
outstanding Option.
(r) "OUTSIDE DIRECTOR" means a Director who either (1) is not a current
employee of the Company or an "affiliated corporation" (within the meaning of
the Treasury regulations promulgated under Section 162(m) of the Code), is not a
former employee of the Company or an "affiliated corporation" receiving
compensation for prior services (other than benefits under a tax qualified
pension plan), was not an officer of the Company or an "affiliated corporation"
at any time, and is not currently receiving direct or indirect remuneration from
the Company or
ii.
<PAGE>
any "affiliated corporation" for personal services in any capacity other than
as a Director, or (2) is otherwise considered an "outside director" for
purposes of Section 162(m) of the Code.
(s) "RULE 16B-3" means Rule 16b-3 of the Exchange Act or any successor to
Rule 16b-3, as in effect when discretion is being exercised with respect to the
Plan.
iii.
<PAGE>
NOTICE OF EXERCISE
CoCensys, Inc.
213 Technology Drive
Irvine, California 92718 Date of Exercise:
----------
Gentlemen:
This constitutes notice under the CoCensys, Inc. (the "Company") stock
option granted to me (the "Option") that I elect to purchase the number of
shares for the price set forth below:
Type of option (check one): Incentive Supplemental
----- -----
Stock option dated: ---------------------------------
Number of shares as to which
option is exercised: ---------------------------------
Certificates to be
issued in name of: ---------------------------------
Total exercise price: $---------------------------------
Cash payment delivered herewith: $---------------------------------
Social Security No.: ---------------------------------
By this exercise, I agree (i) to provide such additional documents as
the Company may reasonably require; (ii) to provide for the payment by me to
you (in the manner designated by you) of your withholding obligation, if any,
relating to the exercise of this Option; and (iii) that the representations
made by the undersigned in Section 6 of the Option are true and correct as of
the date hereof.
Very truly yours,
---------------------------------
Address ---------------------------------
---------------------------------
