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EXHIBIT 10.4
NONSTATUTORY STOCK OPTION
_______________________, Optionee:
Aurora Biosciences Corporation (the "Company"), pursuant to its 1996
Stock Plan (the "Plan"), has 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 422 of the Internal Revenue Code of
1986, as amended (the "Code").
The grant hereunder is in connection with and in furtherance of the
Company's compensatory benefit plan for participation of the Company's
employees (including officers), directors or consultants and is intended to
comply with the provisions of Rule 701 promulgated by the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the "Act").
Defined terms not explicitly defined in this agreement but defined in the Plan
shall have the same definitions as in the Plan.
The details of your 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 become exercisable (vest) with respect to each
installment shown below on or after the date of vesting applicable to such
installment, as follows:
NUMBER OF SHARES (INSTALLMENT) DATE OF EARLIEST EXERCISE (VESTING)
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__________ __________, 199__
__________ The ___ day of each month thereafter,
commencing on ________, 199__ through and
including _________, 199__.
__________ __________, 199__
3. EXERCISE PRICE AND METHOD OF PAYMENT.
(a) EXERCISE PRICE. The exercise price of this
option is _________________ ($____________) per share, being not less than 85%
of the fair market value of the Common Stock on the date of grant of this
option.
(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:
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(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, prior to the issuance of Common Stock, results in either the
receipt of cash (or check) by the Company or the receipt of irrevocable
instructions to pay the aggregate exercise price to the Company from the sales
proceeds;
(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; or
(iv) Payment by a combination of
the methods of payment permitted by subparagraph 3(b)(i) through 3(b)(iii)
above.
4. WHOLE SHARES. This option may not be exercised for any number
of shares which would require the issuance of anything other than whole shares.
5. 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.
6. TERM. The term of this option commences on ___________, 19__,
the date of grant, 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 or in the Plan.
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 Continuous Status as an Employee, Director
or Consultant with the Company or an Affiliate of the Company for any reason or
for no reason unless:
(a) such termination of Continuous Status as an Employee,
Director or Consultant is due to your permanent and total disability as defined
in 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 Continuous Status as an Employee, Director or Consultant;
or
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(b) such termination of Continuous Status as an Employee,
Director or Consultant is due to your death or your death occurs within three
(3) months following termination of your Continuous Status as an Employee,
Director or Consultant for any other reason, 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 5 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 Continuous
Status as an Employee, Director or Consultant; or
(d) exercise of the option within three (3) months after
termination of your Continuous Status as an Employee, Director or Consultant
with the Company or with an Affiliate of the Company would result in liability
under section 16(b) of the Securities Exchange Act of 1934 (the "Exchange
Act"), in which case the option will expire on the earlier of (i) the
Expiration 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 Continuous Status as an Employee,
Director or Consultant with the Company or an Affiliate of the Company.
However, this option may be exercised following termination of
Continuous Status as an Employee, Director or Consultant only as to that number
of shares as to which it was exercisable on the date of termination of
Continuous Status as an Employee, Director or Consultant under the provisions
of paragraph 2 of this option.
7. REPRESENTATION. By executing this option agreement, you
hereby warrant and represent that you are acquiring this option for your own
account and that you have no intention of distributing, transferring or selling
all or any part of this option except in accordance with the terms of this
option agreement.
8. 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 require pursuant
to subsection 12(e) of the Plan.
(b) By exercising this option you agree that:
(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
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such exercise. You also agree that any exercise of this option has not been
completed and that the Company is under no obligation to issue any Common Stock
to you until such an arrangement is established or the Company's tax
withholding obligations are satisfied, as determined by the Company; 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. 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.
9. TRANSFERABILITY. This option is not transferable, except by
will or by the laws of descent and distribution, and is exercisable during your
life 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.
10. OPTION NOT A SERVICE CONTRACT. 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
addition, nothing in this option shall obligate the Company or any Affiliate of
the Company, or their respective stockholders, Board of Directors, officers or
employees to continue any relationship which you might have as a Director or
Consultant for the Company or Affiliate of the Company.
11. 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.
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GOVERNING PLAN DOCUMENT. This option is subject to all the
provisions of the Plan, a copy of which is attached hereto and its provisions
are hereby made a part of this option, including without limitation the
provisions of Section 6 of the Plan relating to option provisions, and is
further subject to all interpretations, amendments, rules and regulations which
may from time to time be promulgated and adopted pursuant to the Plan. In the
event of any conflict between the provisions of this option and those of the
Plan, the provisions of the Plan shall control.
Dated the ____ day of __________________, 19__.
Very truly yours,
AURORA BIOSCIENCES CORPORATION
By______________________________________
Duly authorized on behalf
of the Board of Directors
ATTACHMENTS:
Aurora Biosciences Corporation 1996 Stock Plan
Notice of Exercise
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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; 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 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 (i) the options previously granted and delivered to the
undersigned under stock option plans of the Company, and (ii) the following
agreements only:
NONE _________________
(Initial)
OTHER _______________________________
_______________________________
_______________________________
________________________________________
OPTIONEE
Address:
______________________________
_______________________________
