CORNERSTONE BIOPHARMA HOLDINGS,
INC., a Delaware Corporation
NONSTATUTORY EMPLOYEE STOCK
OPTION AGREEMENT
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Option Grant
Date:
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Shares Subject
to Option:
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Exercise Price:
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Cornerstone
BioPharma Holdings, Inc., a Delaware corporation (the
“Company”) hereby grants to the optionee named above
(the “Optionee”) an option to purchase the amount of
shares of Common Stock set forth above (the “Shares”)
of the Company, at the Exercise Price set forth above and on the
terms set forth herein, and in all respects subject to the terms
and provisions of the Company’s 2005 Stock Option Plan (the
“Plan”) applicable to nonstatutory stock options, which
terms and provisions hereby are incorporated by reference herein.
Unless the context herein otherwise requires, the terms defined in
the Plan shall have the same meanings herein.
1. Nature
of the Option . This Option is intended to be an nonstatutory
stock option and is not intended to be an incentive stock option
within the meaning of Section 422 of the Internal Revenue Code
of 1986, as amended (the “Code”), or otherwise to
qualify for any special tax benefits to Optionee.
2. Date
of Grant; Term of Option . This Option is granted as of the
Option Grant Date set forth above, and it may not be exercised
later than ten (10) years from such date.
3. Option
Exercise Price . The exercise price for this Option is the
Exercise Price per Share set forth above, which price is not less
than the fair market value thereof on the date this Option was
granted (or not less than one hundred ten percent (110%) of the
fair market value thereof on the date this Option was granted, if
the Optionee owns stock representing more than ten percent (10%) of
the total combined voting power of all classes of stock of the
Company or its parents or subsidiaries).
4. Right
to Exercise . This Option shall vest and be exercisable,
cumulatively, during its term as follows:
(a)
Method of Exercise . This Option shall be exercisable by
executing the Common Stock Purchase Agreement which shall serve as
written notice and state the election to exercise this Option, the
number of Shares in respect to which this Option is being exercised
and
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Insert
appropriate time based vesting schedule.
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such other
representations and agreements as to Optionee’s investment
intent with respect to such Shares as may be required by the
Company hereunder or pursuant to the provisions of the Plan. Such
written notice shall be signed by Optionee and shall be delivered
in person or by certified mail to the Secretary of the Company or
such other person as may be designated by the Company. The written
notice shall be accompanied by payment of the purchase price.
Payment of the purchase price shall be made by check or such other
consideration and method of payment authorized by the Board
pursuant to the Plan. The certificate or certificates for the
Shares as to which this Option shall be exercised shall be
registered in the name of Optionee and shall carry the legends set
forth in the Plan, the Stock Purchase Agreement or the Investment
Representation Statement, as applicable, and/or as required under
applicable law.
(b)
Restrictions on Exercise . This Option may not be exercised
if the issuance of the Shares upon such exercise would constitute a
violation of any applicable federal or state securities laws or
other laws or regulations. As a condition to the exercise of this
Option, the Company may require Optionee to make any representation
and warranty to the Company as may be required by any applicable
law or regulation.
5.
Investment Representations . In connection with the
acquisition of this Option, Optionee represents and warrants as
follows:
(a)
Investment Intent . Optionee is acquiring this Option, and
upon exercise of this Option, Optionee will be acquiring the Shares
for investment for Optionee’s own account, not as a nominee
or agent, and not with a view to, or for resale in connection with,
any distribution thereof.
(b)
Protection of Interests . Optionee, by reason of
Optionee’s business or financial experience, has the capacity
to evaluate the merits and risks of purchasing Common Stock of the
Company and to make an informed investment decision with respect
thereto and to protect Optionee’s interests in connection
with the acquisition of this Option and the Shares.
6.
Termination of Status as an Employee . If Optionee ceases to
serve as an Employee for any reason other than death or disability
and thereby terminates Optionee’s Continuous Status as an
Employee, Optionee shall have the right to exercise this Option at
any time within thirty (30) days after the date of such
termination to the extent that Optionee was entitled to exercise
this Option at the date of such termination. If Optionee ceases to
serve as an Employee, due to death or disability, this Option may
be exercised at any time within six (6) months after the date
of death or termination of such status as an Employee due to
disability, in the case of death, by Optionee’s estate or by
a person who acquired the right to exercise this Option by bequest
or inheritance, or, in the case of disability, by Optionee, but in
any case only to the extent Optionee was entitled to exercise this
Option at the date of such termination. To the extent that Optionee
was not entitled to exercise this Option at the date of
termination, or to the extent this Option is not exercised within
the time specified herein, this Option shall terminate.
Notwithstanding
the foregoing, this Option shall not be exercisable after the
expiration of the term set forth in paragraph 2 hereof.
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7.
Withholding Tax Liability . The Company reserves the right
to withhold, in accordance with any applicable laws, from any
compensation or other consideration payable to the Optionee any
taxes required to be withheld by federal, state or local law as a
result of the grant or exercise of this Option or the sale or other
disposition of the Shares issued upon exercise of this Option, and
if such compensation or consideration is insufficient, the Company
may require Optionee to pay to the Company an amount sufficient to
cover such withholding tax liability.
8.
Nontransferability of Option . This Option may not be sold,
pledged, assigned, hypothecated, gifted, transferred or disposed of
in any manner either voluntarily or involuntarily by operation of
law or otherwise, other than by will or by the laws of descent or
distribution, and may be exercised during the lifetime of Optionee
only by such Optionee. Subject to the foregoing and the terms of
the Plan, the terms of this Option shall be binding upon the
executors, administrators, heirs, successors and assigns of
Optionee.
9.
Continuation of Status as an Employee . Neither this Option
or the Plan nor any Option granted thereunder shall confer upon any
Optionee any right to continue in the status of an Employee of the
Company, its Parent, Subsidiary or a successor corporation or limit
in any respect the right of the Company or any such corporations to
discharge the Optionee at any time, with or without cause and with
or without notice.
10.
Limitations on Transfer . In addition to any other
limitation on transfer created by applicable securities laws,
Optionee will not sell, transfer, assign, encumber or otherwise
dispose of (including, without limitation by operation of law) any
of Optionee’s right, title or interest in and to all or any
portion of the Shares except as provided in this
Section:
(a)
Right of First Refusal . In the event Optionee desires (or
is required) to sell or transfer in any manner all or a portion of
the Shares, the Optionee shall first offer such Shares for sale to
the Company (or its assignee) at the same price, and upon the same
terms (or reasonably similar terms) as those on which the Optionee
is disposing of said Shares (“Right of First Refusal”).
Optionee shall offer such Shares to the Company by delivering a
written notice (the “Notice”) to the Company stating
(i) Optionee’s bona fide intention to sell or otherwise
transfer such Shares, (ii) the number of such Shares to be
sold or otherwise transferred, (iii) the price for which
Optionee proposes to sell such Shares and all additional terms and
conditions, if any, of the sale or transfer, and (iv) the name
of the proposed buyer or transferee. Optionee shall attach to the
Notice a copy of the written offer, if any, of the sale or
transfer. In the event of a transfer not involving a sale of such
Shares for a specific
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