Exhibit 10.9
Arena Pharmaceuticals, Inc. 2009
Long-Term Incentive Plan
Stock Option Grant Agreement
for Non-Employee Directors
THIS GRANT AGREEMENT (this
“Agreement”), effective as of
(the “Grant Date”), is entered into by and between
Arena Pharmaceuticals, Inc., a Delaware corporation (the
“Company”), and
(the “Participant”).
1. Grant of Options . The
Company hereby grants to the Participant a non-qualified stock
option (the “Option”) to purchase
shares of common stock of the Company, par value $0.0001 per share
(the “Shares”), at the exercise price of $
per Share (the “Exercise Price”). The Option is not
intended to qualify as an incentive stock option under
Section 422 of the Code.
2. Subject to the Plan . This
Agreement is subject to the provisions of the Arena
Pharmaceuticals, Inc. 2009 Long-Term Incentive Plan (the
“Plan”), and, unless the context requires otherwise,
terms used herein shall have the same meaning as in the Plan. In
the event of a conflict between the provisions of the Plan and this
Agreement, the Plan shall control.
3. Term of Options . Unless
the Option terminates earlier pursuant to the provisions of this
Agreement, the Option shall expire on the tenth anniversary of the
Grant Date.
4. Vesting . Except as
otherwise provided in Sections 6(b) or (c) of this Agreement,
provided the Participant is then a Director, an Employee or a
Consultant, the Option shall become vested and exercisable on the
following dates:
Vest Date
Vested Options
5. Exercise of
Option
(a) Manner of Exercise . To
the extent vested, the Option may be exercised, in whole or in
part, by delivering written notice to the Company in accordance
with paragraph (f) of Section 8 in such form as the
Company may require from time to time, or through such other means
as permitted by the Company. Such notice shall specify the number
of Shares subject to the Option as to which the Option is being
exercised, and shall be accompanied by full payment of the Exercise
Price of such Shares in a manner permitted under the terms of
Section 5.5 of the Plan, except that payment with previously
acquired Shares may only be made with the consent of the Committee.
The Option may be exercised only in multiples of whole Shares and
no partial Shares shall be issued.
(b) Issuance of Shares . Upon
exercise of the Option and payment of the Exercise Price for the
Shares as to which the Option is exercised, the Company shall issue
to the Participant the applicable number of Shares in the form of
fully paid and nonassessable Shares.
(c) Capitalization
Adjustments . The number of Shares subject to the Option and
the exercise price per Share shall be equitably and appropriately
adjusted as provided in Section 12.2 of the Plan.
(d) Withholding . No Shares
will be issued on exercise of the Option unless and until the
Participant pays to the Company, or makes satisfactory arrangement
with the Company for payment of, any federal, state or local taxes
required by law to be withheld in respect of the exercise of the
Option. The Participant hereby agrees that the Company may withhold
from the Participant’s wages or other remuneration the
applicable taxes. At the discretion of the Company, the applicable
taxes may be withheld in kind from the Shares otherwise deliverable
to the Participant on exercise of the Option, up to the
Participant’s minimum required withholding rate or such other
rate that will not trigger a negative accounting impact.
6. Termination of
Option
(a) Termination of Service Other
Than Due to Death or Disability . Unless the Option has earlier
terminated, the Option shall terminate in its entirety, regardless
of whether the Option is vested, three (3) years after the
date the Participant ceases to be in the Company’s continuous
service as any of a Director, an Employee or a Consultant, for any
reason other than the Participant’s death or Disability.
Except as provided below in Section 6(b) or (c), any portion
of the Option that is not vested at the time the Participant ceases
to be in the Company’s continuous service as any of a
Director, an Employee or a Consultant, shall immediately
terminate.
(b) Death . Upon the
Participant’s death, unless the Option has earlier
terminated, to the extent the Option is not fully vested the Option
shall become fully vested and exercisable. The Participant’s
executor or personal representative, the person to whom the Option
shall have been transferred by will or the laws of descent and
distribution, or such other permitted transferee, as the case may
be, may exercise the Option in accordance with paragraph
(a) of Section 5, provided such exercise occurs
within three (3) years after the date of the
Participant’s death or the end of the term of the Option
pursuant to Section 3, whichever is earlier.
(c) Disability . In the event
that the Participant ceases to be in the Company’s continuous
service as any of a Director, an Employee or a Consultant by reason
of Disability, unless the Option has earlier terminated,
(i) the Option shall become fully vested and exercisable and
(ii) the Option may be exercised, in accordance with paragraph
(a) of Section 5, provided such exercise occurs
within three (3) years after the date of Disability or the end
of the term of the Option pursuant to Section 3, whichever is
earlier. For purposes of this Agreement, “Disability”
shall mean the Participant’s becoming disabled within the
meaning of Section 22(e)(3) of the Code, or as otherwise
determined by the Committee in its discretion. The Committee may
require such proof of Disability as the Committee in its sole and
absolute discretion deems appropriate and the Committee’s
determination as to whether the Participant has incurred a
Disability shall be final and binding on all parties
concerned.
(d) Extension of Exercise
Period . Notwithstanding any provisions of paragraphs (a),
(b) or (c) of this Section to the contrary, if exercise
of the Option following termination of service during the time
period set forth in the applicable paragraph or sale during such
period of the Shares acquired on exercise would violate any of the
provisions of the federal securities laws (or any Company
policy
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