EXHIBIT 4(a)
GENOME THERAPEUTICS CORP.
STOCK OPTION AGREEMENT
(Non-Statutory Option)
Non-Statutory Stock Option granted by Genome Therapeutics Corp., a Massachusetts
corporation (the "Company"), to [Optionee], a director of the Company (the
"Optionee").
1. Grant of Option
This agreement evidences the grant by the Company to the Optionee of an option
to purchase, on the terms provided herein, a total of ______ shares of the
Company's Common Stock, $.10 par value ("Common Stock"), at a price of $____ per
share. This option does not constitute an incentive stock option within the
meaning of Section 422A of the Internal Revenue Code. This option shall
terminate on __________, 200_, and is subject to earlier termination as provided
in Sections 5 and 6 below. Subject to the other terms hereof, this option is
exercisable as follows: as to ______ if the average closing price of the Common
Stock is, for a period of ten (10) out of twenty (20) consecutive trading days,
$_____ or higher, as reported on the NASDAQ National Market ("NASDAQ") (or such
principal securities exchange as the Common Stock may be traded; and as to an
additional ______ shares if the average closing price of the Common Stock is,
for a period of ten (10) out of twenty (20) consecutive trading days, $_____ or
higher, as reported on NASDAQ (or such principal securities exchange as the
Common Stock may be traded..
2. Exercise of Option
Each election to exercise this option shall be in writing, signed by the
Optionee or by his executor or administrator or the person or persons to whom
this option is transferred by will or the applicable laws of descent and
distribution (the "Legal Representative"), and received by the Company at its
principal office in Waltham, Massachusetts, accompanied by this agreement and
payment in full as provided in Section 3 below. In the event the option is
exercised by such Legal Representative, the Company shall be under no obligation
to deliver stock hereunder unless and until the Company is satisfied that the
person or persons exercising the option is or are the duly appointed executor or
administrator of the deceased Optionee or the person or persons to whom this
option has been transferred by Optionee's will or by the applicable laws of
descent and distribution.
3. Payment for Stock
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Shares shall be issued only upon receipt by the Company of full payment of the
purchase price for the shares as to which the option is exercised. The purchase
price is payable by the Optionee to the Company either (i) in cash or by
certified check or cashier's check payable to the order of the Company; or (ii)
through the delivery of shares of Common Stock (duly owned by the Optionee and
as to which the Optionee has good title free and clear of any liens and
encumbrances) having a fair market value (as determined by the Board of
Directors of the Company) equal to the purchase price; or (iii) by a combination
of cash and Common Stock as provided above. The Company will not be obligated to
deliver any shares unless and until, in the opinion of the Company's counsel,
all applicable federal and state laws and regulations have been complied with,
nor, in the event the outstanding common stock is at the time listed upon any
stock exchange, unless and until the shares to be delivered have been listed or
authorized to be added to the list upon official notice of legal matters in
connection with the issuance and delivery of shares have been approved by the
Company's counsel. Without limiting the generality of the foregoing, the Company
may require from the Optionee such investment representation or such agreement,
if any, as counsel for the Company may consider necessary in order to comply
with the Securities Act of 1933, as amended and may require that the Optionee
agree that he will notify the Company when he makes any disposition of the
shares whether by sale, gift or otherwise. The Company will use its best efforts
to effect any such compliance or listing, and the Optionee will take any action
reasonably requested by the Company in such connection. The Optionee will have
the rights of a shareholder only as to shares actually acquired by him upon
exercise of the option granted hereby.
4. Non-transferability of Option
This option may not be transferred by the Optionee otherwise than by will or by
the laws of descent and distribution; and during the Optionee's lifetime this
option may be exercised only by him.
5. Termination of Service as a Director
If the Optionee ceases to be a director of the Company for any reason other than
his death, he may thereafter exercise this option to the extent he was entitled
to exercise it on the date when his service as a director terminated, but only
within three months after the date of such termination (unless a longer period
is allowed by the Board of Directors of the Company). In no event, however, may
the Optionee exercise this option at a time when the option would not be
exercisable had the Optionee's service as a director continued. For purposes of
this provision, the Optionee's service as a director will not be considered
terminated in the case of a bona fide leave of absence approved by the Board of
Directors of the Company.
6. Death
If the Optionee dies at a time when he is entitled to exercise this option, then
at any time or times within three years after his death (or such longer period
as the Board of Directors of the Company may allow) such option may be
exercised, as to all or any of the shares that the Optionee was entitled to
purchase immediately prior to his death, by his executor or administrator or the
person or persons to
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whom the option is transferred by will or the applicable laws of descent and
distribution, and except as so exercised such option will expire at the end of
such period. In no event, however, may this option be exercised after the
termination of the option.
7. Administration
The option granted by this agreement will be administered by the Board of
Directors of the Company which will have the authority to interpret this
agreement and to decide all questions and settle all controversies and dispute
which may arise in connection therewith. All decisions, determinations and
interpretations of the Board of Directors will be binding on all parties
concerned. A majority of the members of the Board of Directors will constitute a
quorum, and all determinations of the Board of Directors will be made by a
majority of its members. Any determination of the Board of Directors under this
agreement may be made without notice or meeting of the Board of Directors by a
written instrument signed by a majority of the members of the Board of
Directors.
8. Stock to be Delivered
Stock to be delivered upon exercised of this option will be common stock of the
Company and may constitute an original issue of authorized but unissued stock or
may consist of previously issued stock acquired by the Company as determined
from time to time by the Board of Directors. The Board of Directors and the
proper officers of the Company will take any appropriate action required for
such delivery.
9. Changes in Stock
In the event of a stock dividend, split-up or combination of shares,
recapitalization or merger in which the Company is the surviving corporation, or
other similar capital change, the number and kind of shares of stock or
securities of the Company subject to the option granted hereby, the option price
and other relevant provisions will be appropriately adjusted by the Board of
Directors of the Company, whose determination will be binding on the Optionee.
In the event of a consolidation or merger in which the Company is not the
surviving corporation, or in the event of complete liquidation of the Company,
the option granted hereby will thereupon terminate, provided that at least
twenty days prior to the effective date of any such consolidation or merger, the
Board of Directors shall either (a) make the option granted hereby immediately
exercisable, or (b) arrange to have the surviving corporation grant a
replacement option to the Optionee.
10. Amendments
The Board of Directors of the Company may at any time or times amend the option
granted hereby for the purpose of satisfying the requirements of any changes in
applicable laws or regulations or for any other purpose which may at the time be
permitted by law, provided that (except to the extent explicitly required or
permitted hereinabove) no such amendment will, without the approval of the
stockholders
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of the Company, (a) increase the number of shares issuable upon exercise of the
option, (b) reduce the exercise price of the option, (c) extend the period
within which the option may be exercised, or (d) amend the provisions of this
Section 10, and no such amendment will adversely affect the rights of the
Optionee without his consent.
11. Governing Law
This agreement shall be governed by and construed in accordance with the
internal laws of The Commonwealth of Massachusetts.
12. Stockholder Approval
This agreement shall not become effective unless and until the option granted
hereby is approved by the stockholders of the Company.
IN WITNESS WHEREOF, the Company has caused this agreement to
be executed by its duly authorized officer, under its corporate seal. This
option is granted at the Company's office, on the date stated below.
GENOME THERAPEUTICS CORP.
By:___________________________
President
Date: As of ____________, 1997
Accepted and Agreed:
-----------------------------
[Optionee]
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SCHEDULE OF STOCK OPTION AGREEMENTS
Price Per Grant Expiration Shares Exercise
Optionee Share Date Date Granted Dates
Xxxxx
Xxxxxxxxxx $7.06 3/31/97 3/31/07 7500
Xxxxxxxxxxx Xxxxx $9.06 3/14/97 3/14/07 150000
Xxxxx Xxxxxxx $7.06 3/31/97 3/31/07 7500
Xxxxxxx
Xxxxxxxxxx $9.50 2/7/97 2/7/07 50000
[FN]
The options are exercisable by their terms in equal installments over four
years, the first installment of 12,500 exercisable commencing on March 31, 1998.
The options are exercisable by their terms as follows: (i) an aggregate of
75,000 options are exercisable with respect to equal installments over four
years, the first installment of 18,750 options are exercisable commencing on
March 14, 1998; (ii) 25,000 options shall be exercisable if the closing price of
the Common Stock for a period of 20 out of 40 consecutive trading days after the
date of grant is $14.25 or higher; (iii) 25,000 options shall be exercisable if
the closing price of the Common Stock for a period of 20 out of 40 consecutive
trading days after the date of grant is $18.25 or higher; (iv) and the remaining
25,000 options shall be exercisable if the closing price of the Common Stock for
a period of 20 out of 40 consecutive trading days after the date of grant is
$20.25 or higher.
The options are exercisable by their terms in equal installments over four
years, the first installment of 12,500 exercisable commencing on February 7,
1998.
[/FN]
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