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EXHIBIT 10.23
FOR GRANTS TO SENIOR EXECUTIVES
[APPROVED BY THE BOARD OF DIRECTORS 1/05]
INCENTIVE STOCK OPTION AGREEMENT
ARCHEMIX CORP.
AGREEMENT made as of the ___ day of _______ 200_, between
Archemix Corp.
(the "Company"), a Delaware corporation having a principal place
of business in
Cambridge, Massachusetts, and ____________ of ____________, an
employee of the
Company (the "Employee").
WHEREAS, the Company desires to grant to the Employee an Option
to purchase
shares of its common stock, $.001 par value per share (the
"Shares"), under and
for the purposes set forth in the Company's 2001 Employee,
Director and
Consultant Stock Plan (the "Plan");
WHEREAS, the Company and the Employee understand and agree that
any terms
used and not defined herein have the same meanings as in the
Plan; and
WHEREAS, the Company and the Employee each intend that the
Option granted
herein qualify as an ISO.
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter set
forth and for other good and valuable consideration, the parties
hereto agree as
follows:
1. GRANT OF OPTION.
The Company hereby grants to the Employee the right and option
to purchase
all or any part of an aggregate of ________________ Shares, on
the terms and
conditions and subject to all the limitations set forth herein,
under United
States securities and tax laws, and in the Plan, which is
incorporated herein by
reference. The Employee acknowledges receipt of a copy of the
Plan.
2. PURCHASE PRICE.
The purchase price of the Shares covered by the Option shall be
$____ per
Share, subject to adjustment, as provided in the Plan, in the
event of a stock
split, reverse stock split or other events affecting the holders
of Shares after
the date hereof (the "Purchase Price"). Payment shall be made in
accordance with
Paragraph 8 of the Plan.
3. EXERCISABILITY OF OPTION.
Subject to the terms and conditions set forth in this Agreement
and the
Plan, the Option granted hereby shall become exercisable as
follows:
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<TABLE>
<S> <C>
On the first anniversary of the date up to _________ Shares
of this Agreement
Every three months thereafter until an additional _________
Shares
the fourth anniversary of this
Agreement.
</TABLE>
Alternatively, at the election of the Employee, the Option may
be exercised
in whole or in part at any time as to Shares which have not yet
vested in
accordance with the above schedule; provided however, as a
condition to
exercising the Option for such unvested Shares, the Employee
shall execute a
Restricted Stock Agreement in the form attached hereto as
Exhibit C.
The foregoing rights are cumulative and are subject to the other
terms and
conditions of this Agreement and the Plan.
4. TERM OF OPTION.
The Option shall terminate ten years from the date of this
Agreement or, if
the Employee owns as of the date hereof more than ten percent of
the total
combined voting power of all classes of capital stock of the
Company or an
Affiliate, five years from the date of this Agreement, but shall
be subject to
earlier termination as provided herein or in the Plan.
If the Employee ceases to be an employee of the Company or of an
Affiliate
(for any reason other than the death or Disability of the
Employee or
termination of the Employee's employment for "cause" as defined
in the Plan, the
Option may be exercised, if it has not previously terminated,
within three
months after the date the Employee ceases to be an employee of
the Company or an
Affiliate, or within the originally prescribed term of the
Option, whichever is
earlier, but may not be exercised thereafter. In such event, the
Option shall be
exercisable only to the extent that the Option has become
exercisable and is in
effect at the date of such cessation of employment.
Notwithstanding the foregoing, in the event of the Employee's
Disability or
death within three months after the termination of employment,
the Employee or
the Employee's Survivors may exercise the Option within one year
after the date
of the Employee's termination of employment, but in no event
after the date of
expiration of the term of the Option.
In the event the Employee's employment is terminated by the
Employee's
employer for "cause" as defined in the Plan, the Employee's
right to exercise
any unexercised portion of this Option shall cease immediately
as of the time
the Employee is notified his or her employment is terminated for
"cause," and
this Option shall thereupon terminate. Notwithstanding anything
herein to the
contrary, if subsequent to the Employee's termination as an
employee, but prior
to the exercise of the Option, the Board of Directors of the
Company determines
that, either prior or subsequent to the Employee's termination,
the Employee
engaged in conduct which would constitute "cause," then the
Employee shall
immediately cease to have any right to exercise the Option and
this Option shall
thereupon terminate.
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In the event of the Disability of the Employee, as determined in
accordance
with the Plan, the Option shall be exercisable within one year
after the
Employee's termination of employment or, if earlier, within the
term originally
prescribed by the Option. In such event, the Option shall be
exercisable:
(a) to the extent that the Option has become exercisable but has
not been
exercised as of the date of Disability; and
(b) in the event rights to exercise the Option accrue
periodically, to the
extent of a pro rata portion through the date of Disability of
any
additional vesting rights that would have accrued on the next
vesting
date had the Employee not become Disabled. The proration shall
be
based upon the number of days accrued in the current vesting
period
prior to the date of Disability.
In the event of the death of the Employee while an employee of
the Company
or of an Affiliate, the Option shall be exercisable by the
Employee's Survivors
within one year after the date of death of the Employee or, if
earlier, within
the originally prescribed term of the Option. In such event, the
Option shall be
exercisable:
(x) to the extent that the Option has become exercisable but has
not been
exercised as of the date of death; and
(y) in the event rights to exercise the Option accrue
periodically, to the
extent of a pro rata portion through the date of death of
any
additional vesting rights that would have accrued on the next
vesting
date had the Employee not died. The proration shall be based
upon the
number of days accrued in the current vesting period prior to
the
Employee's date of death.
5. METHOD OF EXERCISING OPTION.
Subject to the terms and conditions of this Agreement, the
Option may be
exercised by written notice to the Company or its designee, in
substantially the
form of Exhibit A attached hereto. Such notice shall state the
number of Shares
with respect to which the Option is being exercised and shall be
signed by the
person exercising the Option. Payment of the Purchase Price for
such Shares
shall be made in accordance with Paragraph 8 of the Plan. The
Company shall
deliver a certificate or certificates representing such Shares
as soon as
practicable after the notice shall be received, provided,
however, that the
Company may delay issuance of such Shares until completion of
any action or
obtaining of any consent, which the Company deems necessary
under any applicable
law (including, without limitation, state securities or "blue
sky" laws). The
certificate or certificates for the Shares as to which the
Option shall have
been so exercised shall be registered in the Company's share
register in the
name of the person so exercising the Option (or, if the Option
shall be
exercised by the Employee and if the Employee shall so request
in the notice
exercising the Option, shall be registered in the name of the
Employee and
another person jointly, with right of survivorship) and shall be
delivered as
provided above to or upon the written order of the person
exercising the Option.
In the event the
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Option shall be exercised, pursuant to Section 4 hereof, by any
person other
than the Employee, such notice shall be accompanied by
appropriate proof of the
right of such person to exercise the Option. All Shares that
shall be purchased
upon the exercise of the Option as provided herein shall be
fully paid and
nonassessable.
6. PARTIAL EXERCISE.
Exercise of this Option to the extent above stated may be made
in part at
any time and from time to time within the above limits, except
that no
fractional share shall be issued pursuant to this Option.
7. NON-ASSIGNABILITY.
The Option shall not be transferable by the Employee otherwise
than by will
or by the laws of descent and distribution. The Option shall be
exercisable,
during the Employee's lifetime, only by the Employee (or, in the
event of legal
incapacity or incompetency, by the Employee's guardian or
representative) and
shall not be assigned, pledged or hypothecated in any way
(whether by operation
of law or otherwise) and shall not be subject to execution,
attachment or
similar process. Any attempted transfer, assignment, pledge,
hypothecation or
other disposition of the Option or of any rights granted
hereunder contrary to
the provisions of this Section 7, or the levy of any attachment
or similar
process upon the Option shall be null and void.
8. NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE.
The Employee shall have no rights as a stockholder with respect
to Shares
subject to this Agreement until registration of the Shares in
the Company's
share register in the name of the Employee. Except as is
expressly provided in
the Plan with respect to certain changes in the capitalization
of the Company,
no adjustment shall be made for dividends or similar rights for
which the record
date is prior to the date of such registration.
9. ADJUSTMENTS.
The Plan contains provisions covering the treatment of Options
in a number
of contingencies such as stock splits and mergers. Provisions in
the Plan for
adjustment with respect to stock subject to Options and the
related provisions
with respect to successors to the business of the Company are
hereby made
applicable hereunder and are incorporated herein by
reference.
10. TAXES.
The Employee acknowledges that any income or other taxes due
from him or
her with respect to this Option or the Shares issuable pursuant
to this Option
shall be the Employee's responsibility.
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In the event of a Disqualifying Disposition (as defined in
Section 15
below) or if the Option is converted into a Non-Qualified Option
and such
Non-Qualified Option is exercised, the Company may withhold from
the Employee's
remuneration, if any, the minimum statutory amount of federal,
state and local
withholding taxes attributable to such amount that is considered
compensation
includable in such person's gross income. At the Company's
discretion, the
amount required to be withheld may be withheld in cash from such
remuneration,
or in kind from the Shares otherwise deliverable to the Employee
on exercise of
the Option. The Employee further agrees that, if the Company
does not withhold
an amount from the Employee's remuneration sufficient to satisfy
the Company's
income tax withholding obligation, the Employee will reimburse
the Company on
demand, in cash, for the amount under-withheld.
11. PURCHASE FOR INVESTMENT.
Unless the offering and sale of the Shares to be issued upon the
particular
exercise of the Option shall have been effectively registered
under the
Securities Act of 1933, as now in force or hereafter amended
(the "1933 Act"),
the Company shall be under no obligation to issue the Shares
covered by such
exercise unless and until the following conditions have been
fulfilled:
(a) The person(s) who exercise the Option shall warrant to the
Company, at
the time of such exercise, that such person(s) are acquiring
such
Shares for their own respective accounts, for investment, and
not with
a view to, or for sale in connection with, the distribution of
any
such Shares, in which event the person(s) acquiring such Shares
shall
be bound by the provisions of the following legend which shall
be
endorsed upon the certificate(s) evidencing the Shares issued
pursuant
to such exercise:
"The shares represented by this certificate have been taken
for
investment and they may not be sold or otherwise transferred
by
any person, including a pledgee, unless (1) either (a) a
Registration Statement with respect to such shares shall be
effective under the Securities Act of 1933, as amended, or
(b)
the Company shall have received an opinion of counsel
satisfactory to it that an exemption from registration under
such
Act is then available, and (2) there shall have been
compliance
with all applicable state securities laws;" and
(b) If the Company so requires, the Company shall have received
an opinion
of its counsel that the Shares may be issued upon such
particular
exercise in compliance with the 1933 Act without
registration
thereunder. Without limiting the generality of the foregoing,
the
Company may delay issuance of the Shares until completion of
any
action or obtaining of any consent, which the Company deems
necessary
under any applicable law (including without limitation state
securities or "blue sky" laws).
12. RESTRICTIONS ON TRANSFER OF SHARES.
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12.1 The Shares acquired by the Employee pursuant to the
exercise of the
Option granted hereby shall not be transferred by the Employee
except as
permitted herein.
12.2 In the event of the Employee's termination of employment
for any
reason, the Company shall have the option, but not the
obligation, to repurchase
all or any part of the Shares issued pursuant to this Agreement
(including,
without limitation, Shares purchased after termination of
employment, Disability
or death in accordance with Section 4 hereof). In the event the
Company does
not, upon the termination of employment of the Employee (as
described above),
exercise its option pursuant to this Section 12.2, the
restrictions set forth in
the balance of this Agreement shall not thereby lapse, and the
Employee for
himself or herself, his or her heirs, legatees, executors,
administrators and
other successors in interest, agrees that the Shares shall
remain subject to
such restrictions. The following provisions shall apply to a
repurchase under
this Section 12.2:
(i) The per share repurchase price of the Shares to be sold to
the Company
upon exercise of its option under this Section 12.2 shall be
equal to
the Fair Market Value of each such Share determined in
accordance with
the Plan as of the date of termination of employment.
(ii) The Company's option to repurchase the Employee's Shares in
the event
of termination of employment shall be valid for a period of 18
months
commencing with the date of such termination of employment.
(iii) In the event the Company shall be entitled to and shall
elect to
exercise its option to repurchase the Employee's Shares under
this
Section 12.2, the Company shall notify the Employee, or in case
of
death, his or her Survivor, in writing of its intent to
repurchase the
Shares. Such written notice may be mailed by the Company up to
and
including the last day of the time period provided for in
Section
12.2(ii) for exercise of the Company's option to repurchase.
(iv) The written notice to the Employee shall specify the
address at, and
the time and date on, which payment of the repurchase price is
to be
made (the "Closing"). The date specified shall not be less than
ten
days nor more than 60 days from the date of the mailing of the
notice,
and the Employee or his or her successor in interest with
respect to
the Shares shall have no further rights as the owner thereof
from and
after the date specified in the notice. At the Closing, the
repurchase
price shall be delivered to the Employee or his or her successor
in
interest and the Shares being purchased, duly endorsed for
transfer,
shall, to the extent that they are not then in the possession of
the
Company, be delivered to the Company by the Employee or his or
her
successor in interest.
12.3 It shall be a condition precedent to the validity of any
sale or other
transfer of any Shares by the Employee that the following
restrictions be
complied with (except as hereinafter otherwise provided):
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(i) No Shares owned by the Employee may be sold, pledged or
otherwise
transferred (including by gift or devise) to any person or
entity,
voluntarily, or by operation of law, except in accordance with
the
terms and conditions hereinafter set forth.
(ii) Before selling or otherwise transferring all or part of the
Shares,
the Employee shall give written notice of such intention to
the
Company, which notice shall include the name of the proposed
transferee, the proposed purchase price per share, the terms
of
payment of such purchase price and all other matters relating to
such
sale or transfer and shall be accompanied by a copy of the
binding
written agreement of the proposed transferee to purchase the
Shares of
the Employee. Such notice shall constitute a binding offer by
the
Employee to sell to the Company such number of the Shares then
held by
the Employee as are proposed to be sold in the notice at the
monetary
price per share designated in such notice, payable on the
terms
offered to the Employee by the proposed transferee (provided,
however,
that the Company shall not be required to meet any non-monetary
terms
of the proposed transfer, including, without limitation,
delivery of
other securities in exchange for the Shares proposed to be
sold). The
Company shall give written notice to the Employee as to whether
such
offer has been accepted in whole by the Company within 60 days
after
its receipt of written notice from the Employee. The Company may
only
accept such offer in whole and may not accept such offer in
part. Such
acceptance notice shall fix a time, location and date for the
closing
on such purchase ("Closing Date") which shall not be less than
ten nor
more than sixty days after the giving of the acceptance
notice,
provided, however, if any of the Shares to be sold pursuant to
this
Section 12.3 have been held by the Employee for less than six
months,
then the Closing Date may be extended by the Company until no
more
than ten days after such Shares have been held by the Employee
for six
months. The place for such closing shall be at the Company's
principal
office. At such closing, the Employee shall accept payment as
set
forth herein and shall deliver to the Company in exchange
therefor
certificates for the number of Shares stated in the notice
accompanied
by duly executed instruments of transfer.
(iii) If the Company shall fail to accept any such offer, the
Employee
shall be free to sell all, but not less than all, of the Shares
set
forth in his or her notice to the designated transferee at the
price
and terms designated in the Employee's notice, provided that (i)
such
sale is consummated within six months after the giving of notice
by
the Employee to the Company as aforesaid, and (ii) the
transferee
first agrees in writing to be bound by the provisions of this
Section
12 so that such transferee (and all subsequent transferees)
shall
thereafter only be permitted to sell or transfer the Shares
in
accordance with the terms hereof. After the expiration of such
six
months, the provisions of this Section 12.3 shall again apply
with
respect to any proposed voluntary transfer of the Employee's
Shares.
(iv) The restrictions on transfer contained in this Section 12.3
shall not
apply to (a) transfers by the Employee to his or her spouse
or
children or to a trust for the benefit of his or her spouse
or
children, (b) transfers by the Employee to his or her
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guardian or conservator, and (c) or transfers by the Employee,
in the
event of his or her death, to his or her executor(s) or
administrator(s) or to trustee(s) under his or her will
(collectively,
"Permitted Transferees"); provided however, that in any such
event the
Shares so transferred in the hands of each such Permitted
Transferee
shall remain subject to this Agreement, and each such
Permitted
Transferee shall so acknowledge in writing as a condition
precedent to
the effectiveness of such transfer.
(v) The provisions of this Section 12.3 may be waived by the
Company. Any
such waiver may be unconditional or based upon such conditions
as the
Company may impose.
12.4 In the event that the Employee or his or her successor in
interest
fails to deliver the Shares to be repurchased by the Company
under this
Agreement, the Company may elect (a) to establish a segregated
account in the
amount of the repurchase price, such account to be turned over
to the Employee
or his or her successor in interest upon delivery of such
Shares, and (b)
immediately to take such action as is appropriate to transfer
record title of
such Shares from the Employee to the Company and to treat the
Employee and such
Shares in all respects as if delivery of such Shares had been
made as required
by this Agreement. The Employee hereby irrevocably grants the
Company a power of
attorney which shall be coupled with an interest for the purpose
of effectuating
the preceding sentence.
12.5 If the Company shall pay a stock dividend or declare a
stock split on
or with respect to any of its Common Stock, or otherwise
distribute securities
of the Company to the holders of its Common Stock, the number of
shares of stock
or other securities of Company issued with respect to the shares
then subject to
the restrictions contained in this Agreement shall be added to
the Shares
subject to the Company's rights to repurchase pursuant to this
Agreement. If the
Company shall distribute to its stockholders shares of stock of
another
corporation, the shares of stock of such other corporation,
distributed with
respect to the Shares then subject to the restrictions contained
in this
Agreement, shall be added to the Shares subject to the Company's
rights to
repurchase pursuant to this Agreement.
12.6 If the outstanding shares of Common Stock of the Company
shall be
subdivided into a greater number of shares or combined into a
smaller number of
shares, or in the event of a reclassification of the outstanding
shares of
Common Stock of the Company, or if the Company shall be a party
to a merger,
consolidation or capital reorganization, there shall be
substituted for the
Shares then subject to the restrictions contained in this
Agreement such amount
and kind of securities as are issued in such subdivision,
combination,
reclassification, merger, consolidation or capital
reorganization in respect of
the Shares subject immediately prior thereto to the Company's
rights to
repurchase pursuant to this Agreement.
12.7 The Company shall not be required to transfer any Shares on
its books
which shall have been sold, assigned or otherwise transferred in
violation of
this Agreement, or to treat as owner of such Shares, or to
accord the right to
vote as such owner or to pay dividends to, any person or
organization to which
any such Shares shall have been so sold, assigned or otherwise
transferred, in
violation of this Agreement.
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12.8 The provisions of Sections 12.1, 12.2 and 12.3 shall
terminate upon
the consummation of a public offering of any of the Company's
securities
pursuant to a registration statement filed with the Securities
and Exchange
Commission.
12.9 The Employee agrees that in the event that the Company
effects an
initial public offering of the Common Stock of the Company
registered under the
Securities Act, the Shares may not be sold, offered for sale or
otherwise
disposed of, directly or indirectly, without the prior written
consent of the
managing underwriter(s) of the offering, for such period of time
after the
execution of an underwriting agreement in connection with the
such offering that
all of the Company's then directors and executive officers agree
to be similarly
bound.
12.10 The Employee acknowledges and agrees that neither the
Company, its
shareholders nor its directors and officers, has any duty or
obligation to
disclose to the Employee any material information regarding the
business of the
Company or affecting the value of the Shares before, at the time
of, or
following a termination of the employment of the Employee by the
Company,
including, without limitation, any information concerning plans
for the Company
to make a public offering of its securities or to be acquired by
or merged with
or into another firm or entity.
12.11 All certificates representing the Shares to be issued to
the Employee
pursuant to this Agreement shall have endorsed thereon a legend
substantially as
follows: "The shares represented by this certificate are subject
to restrictions
set forth in an Incentive Stock Option Agreement dated
_________, 200__ with
this Company, a copy of which Agreement is available for
inspection at the
offices of the Company or will be made available upon
request."
13. NO OBLIGATION TO EMPLOY.
The Company is not by the Plan or this Option obligated to
continue the
Employee as an employee of the Company or an Affiliate. The
Employee
acknowledges: (i) that the Plan is discretionary in nature and
may be suspended
or terminated by the Company at any time; (ii) that the grant of
the Option is a
one-time benefit which does not create any contractual or other
right to receive
future grants of options, or benefits in lieu of options; (iii)
that all
determinations with respect to any such future grants,
including, but not
limited to, the times when options shall be granted, the number
of shares
subject to each option, the option price, and the time or times
when each option
shall be exercisable, will be at the sole discretion of the
Company; (iv) that
the Employee's participation in the Plan is voluntary; (v) that
the value of the
Option is an extraordinary item of compensation which is outside
the scope of
the Employee's employment contract, if any; and (vi) that the
Option is not part
of normal or expected compensation for purposes of calculating
any severance,
resignation, redundancy, end of service payments, bonuses,
long-service awards,
pension or retirement benefits or similar payments.
14. OPTION IS INTENDED TO BE AN ISO.
The parties each intend that the Option be an ISO so that the
Employee (or
the Employee's Survivors) may qualify for the favorable tax
treatment provided
to holders of
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Options that meet the standards of Section 422 of the Code. Any
provision of
this Agreement or the Plan which conflicts with the Code so that
this Option
would not be deemed an ISO is null and void and any ambiguities
shall be
resolved so that the Option qualifies as an ISO. Nonetheless, if
the Option is
determined not to be an ISO, the Employee understands that
neither the Com
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