CORNERSTONE THERAPEUTICS
INC.
Incentive Stock Option
Agreement
Granted Under 2004 Stock Incentive Plan
This agreement
evidences the grant by Cornerstone Therapeutics Inc., a Delaware
corporation (the “Company”), on
, 200[___] (the “Grant Date”) to [
], an employee of the Company (the “Participant”), of
an option to purchase, in whole or in part, on the terms provided
herein and in the Company’s 2004 Stock Incentive Plan, as
amended (the “Plan”), a total of [
] shares (the “Shares”) of common stock, $0.001 par
value per share, of the Company (“Common Stock”) at $[
] per Share. Unless earlier terminated, this option shall expire at
5:00 p.m., Eastern time, on [
] (the “Final Exercise Date”).
It is intended
that the option evidenced by this agreement shall be an incentive
stock option as defined in Section 422 of the Internal Revenue
Code of 1986, as amended, and any regulations promulgated
thereunder (the “Code”). Except as otherwise indicated
by the context, the term “Participant”, as used in this
option, shall be deemed to include any person who acquires the
right to exercise this option validly under its terms.
This option will
become exercisable (“vest”) as to [25]% of the original
number of Shares on [the [first] anniversary of the Grant
Date] 1
and as to an additional [2.09]% of
the original number of Shares at the end of each successive
[one-month] period following [the [first] anniversary of the Grant
Date] 2
until [the [fourth] anniversary of
the Grant Date] 3 .
The right of
exercise shall be cumulative so that to the extent the option is
not exercised in any period to the maximum extent permissible it
shall continue to be exercisable, in whole or in part, with respect
to all Shares for which it is vested until the earlier of the Final
Exercise Date or the termination of this option under
Section 3 hereof or the Plan.
(a) Form
of Exercise . Each election to exercise this option shall be in
writing, signed by the Participant, and received by the Company at
its principal office, accompanied by this agreement, and payment in
full in the manner provided in the Plan. The Participant
may
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1
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If the
Participant is a new employee, the vesting schedule will relate to
the date of hire of the employee and not to the actual Grant Date.
Accordingly, replace the bracketed language with the date that is
[one] year from the date of hire.
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2
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If the
Participant is a new employee, replace the bracketed language with
the date that is [one] year from the date of hire.
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3
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If the
Participant is a new employee, replace the bracketed language with
the date that is [four] years from the date of hire.
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purchase less
than the number of shares covered hereby, provided that no partial
exercise of this option may be for any fractional share or for
fewer than ten whole shares.
(b)
Continuous Relationship with the Company Required . Except
as otherwise provided in this Section 3, this option may not
be exercised unless the Participant, at the time he or she
exercises this option, is, and has been at all times since the
Grant Date, an employee or officer of, or consultant or advisor to,
the Company or any parent or subsidiary of the Company as defined
in Section 424(e) or (f) of the Code (an “Eligible
Participant”).
(c)
Termination of Relationship with the Company . If the
Participant ceases to be an Eligible Participant for any reason,
then, except as provided in paragraphs (d) and (e) below,
the right to exercise this option shall terminate three months
after such cessation (but in no event after the Final Exercise
Date), provided that this option shall be exercisable
only to the extent that the Participant was entitled to exercise
this option on the date of such cessation. Notwithstanding the
foregoing, if the Participant, prior to the Final Exercise Date,
violates the non-competition or confidentiality provisions of any
employment con
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