<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 7, 1997
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------------
MEGABIOS CORP.
(Exact name of registrant as specified in its charter)
-----------------------------
DELAWARE 94-3156660
(State of Incorporation) (I.R.S. Employer
Identification No.)
-----------------------------
MEGABIOS CORP.
863A MITTEN ROAD
BURLINGAME, CA 94010
(650) 697-1900
(Address and telephone number of principal executive offices)
-----------------------------
1997 EQUITY INCENTIVE PLAN
EMPLOYEE STOCK PURCHASE PLAN
NON-PLAN OPTION GRANTS
(Full title of the plans)
PATRICK G. ENRIGHT
CHIEF FINANCIAL OFFICER AND VICE PRESIDENT
MEGABIOS CORP.
863A MITTEN ROAD
BURLINGAME, CA 94010
(650) 697-1900
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
----------------------------
Copies to:
PATRICK A. POHLEN, ESQ.
ANN E. HABERNIGG, ESQ.
COOLEY GODWARD LLP
FIVE PALO ALTO SQUARE
3000 EL CAMINO REAL
PALO ALTO, CA 94306-2155
(650) 843-5000
----------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=============================================================================================================================
AMOUNT TO PROPOSED MAXIMUM
TITLE OF SECURITIES TO BE BE OFFERING PROPOSED MAXIMUM AMOUNT OF
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) 1,508,025 $0.30 - $14.9375 $15,611,639.43 $4,731.00
==============================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(h). The offering price per share and
aggregate offering price are based upon (a) the weighted average exercise
price, for shares subject to outstanding options granted by Megabios Corp.
(the "Registrant") under (i) the Registrant's 1997 Equity Incentive Plan
(the "Incentive Plan") and (ii) outstanding stock options granted outside
the Incentive Plan (pursuant to Rule 457(h) under the Securities Act of
1933, as amended (the "Act")) or (b) the average of the high and low prices
of the Registrant's Common Stock as reported on the Nasdaq Stock Market for
October 31, 1997, for (i) shares reserved for future grant pursuant to the
Incentive Plan and (ii) shares issuable pursuant to the Employee Stock
Purchase Plan (pursuant to Rule 457(c) under the Act).
<PAGE>
NOTES TO CALCULATION OF REGISTRATION FEE
================================================================================
The chart below details the calculations of the registration fee:
<TABLE>
<CAPTION>
TYPE OF SHARES NUMBER OF SHARES OFFERING PRICE PER SHARE AGGREGATE OFFERING PRICE
- ------------------------------------------ ---------------- ---------------------------- ------------------------
<S> <C> <C> <C>
Shares issuable pursuant to outstanding 85,722 $ 0.30 (1)(a)(i) $ 25,716.60
options under 1997 Equity Incentive
Plan 321,319 $ 1.50 (1)(a)(i) $ 481,978.50
Shares issuable pursuant to outstanding 21,996 $ 2.70 (1)(a)(ii) $ 59,389.20
options granted outside the 1997 Equity
Incentive Plan 88,976 $ 2.88 (1)(a)(ii) $ 256,250.88
Shares reserved for future issuance 790,012 $14.9375 (1)(b)(i) $11,800,804.25
pursuant to the 1997 Equity Incentive
Plan
Shares issuable pursuant to the 200,000 $14.9375 (1)(b)(ii) $ 2,987,500.00
Employee Stock Purchase Plan
Proposed Maximum Offering Price $15,611,639.43
Registration Fee $ 4,730.80
</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 Megabios Corp. (the "Registrant") with the
Securities and Exchange Commission are incorporated by reference into this
Registration Statement:
(a) The Registrant's prospectus filed pursuant to Rule 424(b) under the
Securities Act of 1933, as amended (the "Securities Act"), on September 16, 1997
(No. 333-32593).
(b) The description of the Registrant's Common Stock, which is contained in
the Registration Statement on Form 8-A, filed August 15, 1997, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), including any
amendment or report for the purpose of updating such description.
All reports and other documents subsequently filed by the Registrant
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.
INTERESTS OF NAMED EXPERTS AND COUNSEL
The legality of the Common Stock offered hereby will be passed upon for the
Company by Cooley Godward LLP, Palo Alto, California ("Cooley Godward"). As of
the date of this prospectus, certain members of Cooley Godward own an aggregate
of approximately 11,587 shares of the Registrant's Common Stock.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Section 145 of the Delaware General Corporation Law, the Registrant
has broad powers to indemnify its directors and officers against liabilities
they may incur in such capacities, including liabilities under the Securities
Act. The Registrant's Bylaws also provide that the Registrant will indemnify its
directors and officers and may indemnify its employees and other agents to the
fullest extent not prohibited by Delaware law.
The Registrant's Amended and Restated Certificate of Incorporation provides
for the elimination of liability for monetary damages for breach of the
directors' fiduciary duty of care to the Registrant and its stockholders. These
provisions do not eliminate the directors' duty of care and, in appropriate
circumstances, equitable remedies such as injunctive or other forms of non-
monetary relief will remain available under Delaware law. In addition, each
director will continue to be subject to liability for breach of the director's
duty of loyalty to the Registrant, for acts or omissions not in good faith or
involving intentional misconduct, for knowing violations of law, for any
transaction from which the director derived an improper personal benefit, and
for payment of dividends or approval of stock repurchases or redemptions that
are unlawful under Delaware law. The provision does not affect a director's
responsibilities under any other laws, such as the federal securities laws.
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 executive officer of
the Registrant or any of its affiliated enterprises. No indemnity will be
provided, however, to any director or executive officer on account of conduct
that is knowingly fraudulent or deliberately dishonest or constitutes willful
misconduct. No indemnification will be available if such indemnification is
unlawful,
1.
<PAGE>
or in respect of any accounting of profits made from the purchase or sale of
securities of the Registrant in violation of Section 16(b) of the Exchange Act.
The indemnification agreements also set forth certain procedures that will apply
in the event of a claim for indemnification thereunder.
EXHIBITS
EXHIBIT
NUMBER
4.1* Amended and Restated Certificate of Incorporation of the Registrant.
4.2* Bylaws of the Registrant.
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Cooley Godward llp. Reference is made to Exhibit 5.1.
24.1 Power of Attorney is contained on the signature pages.
99.1* The Registrant's 1997 Equity Incentive Plan.
99.2* Form of Incentive Stock Option under the 1997 Equity Incentive Plan.
99.3* Form of Nonstatutory Stock Option under the 1997 Equity Incentive Plan.
99.4* Employee Stock Purchase Plan.
99.5* Employee Stock Purchase Plan Offering Document.
99.6 Form of Nonstatutory Stock Option granted outside the 1997 Equity
Incentive Plan.
* Documents incorporated by reference from the Registrant's Registration
Statement on Form S-1, as amended (333-32593), filed with the SEC on
July 31, 1997.
UNDERTAKINGS
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) 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.
2.
<PAGE>
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
-------- -------
registration statement is on Form S-3 or Form S-8 and 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 in the registration
statement.
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.
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.
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.
3.
<PAGE>
SIGNATURES
THE REGISTRANT. 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 Burlingame, State of
California, on October 28, 1997.
MEGABIOS CORP.
By /s/ Benjamin F. McGraw
--------------------------------------
Benjamin F. McGraw, III
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Benjamin F. McGraw, III and Patrick G.
Enright 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.
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.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Benjamin F. McGraw President, Chief Executive Officer and Director October 28, 1997
- --------------------------------- (Principal Executive Officer)
Benjamin F. McGraw, III
/s/ Patrick G. Enright Vice President and Chief Financial Officer October 28, 1997
- --------------------------------- (Principal Financial and Accounting Officer)
Patrick G. Enright
/s/ Frank J. Caufield Director October 28, 1997
- ---------------------------------
Frank J. Caufield
/s/ Edward L. Erickson Director October 28, 1997
- ---------------------------------
Edward L. Erickson
/s/ A. Grant Heidrich Director October 28, 1997
- ---------------------------------
A. Grant Heidrich
/s/ Russell C. Hirsch Director October 28, 1997
- ---------------------------------
Russell C. Hirsch
/s/ Raju Kucherlapati Director October 28, 1997
- ---------------------------------
Raju Kucherlapati
====================================================================================================
</TABLE>
4.
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
NUMBER
<S> <C>
4.1* Amended and Restated Certificate of Incorporation of the Registrant.
4.2* Bylaws of the Registrant.
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Cooley Godward LLP. Reference is made to Exhibit 5.1.
24.1 Power of Attorney is contained on the signature pages.
99.1* The Registrant's 1997 Equity Incentive Plan.
99.2* Form of Incentive Stock Option under the 1997 Equity Incentive Plan.
99.3* Form of Nonstatutory Stock Option under the 1997 Equity Incentive
Plan.
99.4* Employee Stock Purchase Plan.
99.5* Employee Stock Purchase Plan Offering Document.
99.6 Form of Nonstatutory Stock Option granted outside the 1997 Equity
Incentive Plan.
</TABLE>
* Documents incorporated by reference from the Registrant's Registration
Statement on Form S-1, as amended (333-32593), filed with the SEC on
July 31, 1997.
5.
<PAGE>
Exhibit 5.1
[LETTERHEAD OF COOLEY GODWARD LLP APPEARS HERE]
November 4, 1997
Megabios Corp.
863A Mitten Road
Burlingame, CA 94010
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in connection
with the filing by Megabios Corp. (the "Company") of a Registration Statement on
Form S-8 (the "Registration Statement") with the Securities and Exchange
Commission covering the offering of 1,508,025 shares of the Company's Common
Stock, $.001 par value, (the "Shares") with respect to (a) 990,012 of the Shares
issuable pursuant to its 1997 Equity Incentive Plan and Employee Stock Purchase
Plan (collectively, the "Plans") and (b) 407,041 of the Shares issuable pursuant
to outstanding options granted pursuant to its 1997 Equity Incentive Plan and
110,972 of the Shares issuable pursuant to outstanding options granted outside
the Plans (the "Non-Plan Option Agreements").
In connection with this opinion, we have examined the Registration Statement and
related prospectus, your Amended and Restated 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 Plans, the Non-Plan
Option Agreements, the Registration Statement and related prospectus, 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 LLP
By: /s/ Patrick A. Pohlen
----------------------
Patrick A. Pohlen
<PAGE>
Exhibit 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to incorporation by reference in the Registration Statement on
Form S-8 pertaining to the 1997 Equity Incentive Plan, the Employee Stock
Purchase Plan and Non-Plan Option Grants of Megabios Corp., of our report dated
August 4, 1997, except for Note 11, as to which the date is September 8, 1997,
with respect to the financial statements of Megabios Corp. included in its
Registration Statement on Form S-1, as amended (No. 333-32593), filed with the
Securities and Exchange Commission.
Palo Alto, California
November 3, 1997
<PAGE>
MEGABIOS CORP.
NONSTATUTORY STOCK OPTION
(NON-PLAN)
______________________ , Optionee:
MEGABIOS CORP. (the "Company"), hereby grants to you, the optionee named
above, an option (the "Option") to purchase shares of the common stock of the
Company ("Common Stock"). This option is not intended to qualify as and will
not be treated as an "incentive stock option" within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended (the "Code").
The grant hereunder is intended to comply with the provisions of (i) Rule
701 promulgated by the Securities and Exchange Commission under the Securities
Act of 1933, as amended (the "Securities Act") and (ii) Section 25102(f) of the
California Corporations Code.
The details of the Option are as follows:
1. TOTAL NUMBER OF SHARES SUBJECT TO THIS OPTION. The total number of
shares of Common Stock subject to this option is __________________________(__).
2. VESTING. Subject to the limitations contained herein, this option
shall be exercisable with respect to each installment of shares subject to this
option on or after the date of vesting applicable to such installment. The
shares subject to this option shall vest as follows:
(a) Twenty-five percent (25%) of the total number of shares subject to
this option shall vest one year after the Vesting Commencement Date, which is
________________, 19__; and
(b) One thirty-sixth (1/36) of the remaining seventy-five percent
(75%) of the shares subject to this option shall vest at the end of each
additional one-month period following the vesting of the first 25% pursuant to
subsection (a) above.
3. EXERCISE PRICE AND METHOD OF PAYMENT.
(a) EXERCISE PRICE. The exercise price of the Option is __________
($___) per share.
(b) METHOD OF PAYMENT. Payment of the exercise price per share is
due in full upon exercise of all or any part of each installment which has
accrued to you. You may elect, to the extent permitted by applicable statutes
and regulations, to make payment of the exercise price under one of the
following alternatives:
1.
<PAGE>
(i) Payment of the exercise price per share in cash (including
check) at the time of exercise;
(ii) Payment pursuant to a program developed 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;
(iii) Provided that at the time of exercise the Company's Common
Stock is publicly traded and quoted regularly in the Wall Street Journal,
payment by delivery of already-owned shares of Common Stock, held for the period
required to avoid a charge to the Company's reported earnings, and owned free
and clear of any liens, claims, encumbrances or security interests, which Common
Stock shall be valued at its fair market value on the date of exercise;
(iv) Payment by a combination of the above methods.
4. EXERCISE PRIOR TO VESTING PERMITTED.
(a) CONDITIONS OF EARLY EXERCISE. Subject to the provisions of this
option, you may elect at any time while you are providing services to the
Company to exercise the option as to any part or all of those shares subject to
this option which have not yet vested as stated in paragraph 2 hereof; provided,
however, that:
(i) a partial exercise of this option shall be deemed to cover
first vested shares and then the earliest vesting installment of unvested
shares;
(ii) any shares so purchased from installments which have not
vested as of the date of exercise shall be subject to the purchase option in
favor of the Company as described in the Early Exercise Stock Purchase Agreement
in the form provided by the Company; and
(iii) you shall enter into an Early Exercise Stock Purchase
Agreement in the form provided by the Company with a vesting schedule that will
result in the same vesting as if no early exercise had occurred.
(b) EXPIRATION OF EARLY EXERCISE ELECTION. The election provided in
this paragraph 4 to purchase shares upon the exercise of this option prior to
the vesting dates shall cease upon termination of your service with the Company
and may not be exercised after the date thereof.
5. INTERPRETATION OF THE OPTION TERMS. To the extent not inconsistent
with the terms hereof, the Company shall interpret the terms of the Option in
accordance with its interpretation of provisions of its 1997 Equity Incentive
Plan (the "Equity Plan").
2.
<PAGE>
6. WHOLE SHARES. This option may not be excercised for any number of
shares which would require the issuance of anything other than whole shares.
7. SECURITIES LAW COMPLIANCE. 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.
8. TERM. The term of this option commences on the date hereof, and
expires on _____________ (the "Expiration Date"), (which date shall be no more
than ten (10) years from the date this option is granted), unless this option
expires sooner as set forth below. In no event may this option be exercised on
or after the Expiration Date. This option shall terminate prior to the
Expiration Date as follows: three (3) months after the termination of your
service with the Company for any reason or for no reason unless:
(a) such termination of your service is due to your permanent and
total disability (within the meaning of Section 422(c)(6) of the Code), in which
event the option shall expire on the earlier of the Expiration Date set forth
above or twelve (12) months following such termination of your service; or
(b) such termination of your service is due to your death, in which
event the option shall expire on the earlier of the Expiration Date set forth
above or twelve (12) months after your death; or
(c) during any part of such three (3) month period the option is not
exercisable solely because of the condition set forth in paragraph 7 above, in
which event the option shall not expire until the earlier of the Expiration Date
set forth above or until it shall have been exercisable for an aggregate period
of three (3) months after the termination of your service.
However, this option may be exercised following termination of your service
only as to that number of shares as to which it was exercisable on the date of
termination of your service under the provisions of paragraph 2 of this option.
9. EXERCISE.
(a) 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 reasonably require.
(b) By exercising this option you agree that:
3.
<PAGE>
(i) as a precondition to the completion of any exercise of this
option, 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; and
(ii) the Company (or a representative of the underwriters) may,
in connection with the first underwritten registration of the offering of any
securities of the Company under the Act, require that you not sell or otherwise
transfer or dispose of any shares of Common Stock or other securities of the
Company during such period (not to exceed one hundred eighty (180) days)
following the effective date (the "Effective Date") of the registration
statement of the Company filed under the Act as may be requested by the Company
or the representative of the underwriters. For purposes of this restriction you
will be deemed to own securities which (i) are owned directly or indirectly by
you, including securities held for your benefit by nominees, custodians, brokers
or pledgees; (ii) may be acquired by you within sixty (60) days of the Effective
Date; (iii) are owned directly or indirectly, by or for your brothers or sisters
(whether by whole or half blood) spouse, ancestors and lineal descendants; or
(iv) are owned, directly or indirectly, by or for a corporation, partnership,
estate or trust of which you are a shareholder, partner or beneficiary, but only
to the extent of your proportionate interest therein as a shareholder, partner
or beneficiary thereof. You further agree that the Company may impose stop-
transfer instructions with respect to securities subject to the foregoing
restrictions until the end of such period.
10. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) If any change is made in the stock subject to this option, without
the receipt of consideration by the Company (through merger, consolidation,
reorganization, recapitalization, reincorporation, stock dividend, dividend in
property other than cash, stock split, liquidating dividend, combination of
shares, exchange of shares, change in corporate structure or other transaction
not involving the receipt of consideration by the Company), this option will be
appropriately adjusted in the class(es) and maximum number of shares subject to
the option, and exercise price per share thereof. Such adjustments shall be
made by the Board or the Committee, the determination of which shall be final,
binding and conclusive. (The conversion of any convertible securities of the
Company shall not be treated as a "transaction not involving the receipt of
consideration by the Company".)
(b) In the event of Change of Control:
(i) if the Optionee is an executive officer, the vesting under
this option shall automatically accelerate by the greater of (i) 12 months
(e.g., that number of shares shall be immediately vested as would have been
vested on the date 12 months after the date of the Change of Control) or (ii)
that number of months equal to the number of full months during which such
executive officer has been employed by the Company; provided, however, that the
Board does not find that it is in the collective interest of the Company's
stockholders and the
4.
<PAGE>
Optionees to provide otherwise. If such a finding is made, the option shall
either remain outstanding or be assumed by the acquiror (with the Optionee being
entitled to receive the same consideration as was received by the Common Stock
stockholders in the Change of Control transaction) or the Board and/or the
acquiror shall adopt a replacement benefit which shall (at a minimum) provide
value to the executive officer on the vesting dates of the non-accelerated
option substantially equal to the value the executive officer would have
received if the shares had participated in all steps of the transaction; and
(ii) if the Optionee is not an executive officer, the option be
assumed by the acquiror or be substituted with a similar option. In the event
the acquiror refuses to assume, substitute or continue such option, then the
option shall be terminated if not exercised or vested, as applicable, prior to
the Change of Control.
For purposes of this option, "Change of Control" shall mean: any
consolidation or merger of the Company with or into any other entity or person,
or any other corporate reorganization in which the Company shall not be the
continuing or surviving entity, or any transaction or series of related
transactions by the Company in which in excess of 50% of the Company's voting
power is transferred, or any sale, lease, license or other disposition of all or
substantially all of the assets of the Company. The continuing or surviving
organization entity shall be deemed the acquiror for purposes of this option.
11. TRANSFERABILITY. This option is not transferable, except by will or
by the laws of descent and distribution, and shall be exercisable during your
lifetime only by you. Notwithstanding the foregoing, by delivering written
notice to the Company, in a form satisfactory to the Company, you may designate
a third party who, in the event of your death, shall thereafter be entitled to
exercise this option.
12. OPTION NOT A SERVICE CONTRACT. This option is not an employment
contract and nothing is 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.
13. NOTICES. Any notices provided for in this option 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.
14. GOVERNING AUTHORITY. This option is subject to all interpretations,
amendments, rules and regulations which may from time to time be promulgated and
adopted by the Company. This authority shall be exercised by the Board, or by a
committee of one or
5.
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more members of the Board in the event that the Board delegates its authority to
a committee. The Board, in exercise of this authority, may correct any defect,
omission or inconsistency in this option in a manner and to the extent the Board
shall deem necessary or desirable to make this option fully effective.
References to the Board shall mean the committee if a committee has been
appointed by the Board. Any interpretations, amendments, rules and regulations
promulgated by the Board shall be final and binding upon the Company and its
successors in interest as well as you and your heirs, assigns, and other
successors in interest.
15. During the term of this option, the Company shall keep available at
all times the number of shares of stock required to satisfy the exercise of such
option.
Dated as of the _______ day of ______________, 1997.
Very truly yours,
MEGABIOS CORP.
By ____________________________________
Duly authorized on behalf
of the Board of Directors
ATTACHMENTS:
Notice of Exercise
6.
<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, to the extent not inconsistent
with the option, the Plan; and
(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
regarding the acquisition of stock in the Company and supersedes all prior oral
and written agreements on that subject with the exception of (i) the Option to
acquire the securities of the Company, and (ii) the following agreements only:
NONE ____________
(Initial)
OTHER __________________________________________
__________________________________________
__________________________________________
________________________________________
OPTIONEE
Address:________________________________
________________________________
7.
<PAGE>
NOTICE OF EXERCISE
_________________________________
_________________________________
_________________________________ Date of Exercise: _____________
Ladies and Gentlemen:
This constitutes notice under my stock option that I elect to purchase the
number of shares for the price set forth below.
Type of option: Nonstatutory (Non-Plan)
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: $______________________
Value of ______ shares of
______________ common
stock delivered herewith/1/: $______________________
By this exercise, I agree (i) to provide such additional documents as you
may require pursuant to the terms of the option, and (ii) to provide for the
payment by me to you (in the
- ---------------------------------
/1/ Shares must meet the public trading requirements set forth in the option.
Shares must be valued in accordance with the terms of the option being
exercised, must have been owned for the minimum period required in the option,
and must be owned free and clear of any liens, claims, encumbrances or security
interests. Certificates must be endorsed or accompanied by an executed
assignment separate from certificate.
8.
<PAGE>
manner designated by you) of your withholding obligation, if any, relating to
the exercise of this option.
I hereby make the following certifications and representations with respect
to the number of shares of Common Stock of the Company listed above (the
"Shares"), which are being acquired by me for my own account upon exercise of
the Option as set forth above:
I acknowledge that the Shares have not been registered under the Securities
Act of 1933, as amended (the "Act"), and are deemed to constitute "restricted
securities" under Rule 701 and "control securities" under Rule 144 promulgated
under the Act. I warrant and represent to the Company that I have no present
intention of distributing or selling said Shares, except as permitted under the
Act and any applicable state securities laws.
I further acknowledge that I will not be able to resell the Shares for at
least ninety days after the stock of the Company becomes publicly traded (i.e.,
subject to the reporting requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934) under Rule 701 and that more restrictive conditions apply
to affiliates of the Company under Rule 144.
I further acknowledge that all certificates representing any of the Shares
subject to the provisions of the Option shall have endorsed thereon appropriate
legends reflecting the foregoing limitations, as well as any legends reflecting
restrictions pursuant to the Company's Certificate of Incorporation, Bylaws
and/or applicable securities laws.
I further agree that, if required by the Company (or a representative of
the underwriters) in connection with the first underwritten registration of the
offering of any securities of the Company under the Act, I will not sell or
otherwise transfer or dispose of any shares of Common Stock or other securities
of the Company during such period (not to exceed one hundred eighty (180) days)
following the effective date of the registration statement of the Company filed
under the Act (the "Effective Date") as may be requested by the Company or the
representative of the underwriters. I further agree that the Company may impose
stop-transfer instructions with respect to securities subject to the foregoing
restrictions until the end of such period.
Very truly yours,
_____________________________________
9.
