Exhibit 10.1
Tapestry
Pharmaceuticals, Inc.
2006 EQUITY
INCENTIVE PLAN
STOCK OPTION AGREEMENT
(NONSTATUTORY STOCK OPTION)
Pursuant to your Stock Option Grant Notice
(“Grant Notice”) and this Stock Option
Agreement, Tapestry
Pharmaceuticals, Inc. (the “Company”) has granted you an
option under its 2006 Equity Incentive Plan (the
“Plan”) to purchase the number of shares of the
Company’s Common Stock indicated in your Grant Notice at the
exercise price indicated in your Grant Notice. Defined terms
not explicitly defined in this Stock Option Agreement but defined
in the Plan shall have the same definitions as in the
Plan.
The
details of your option are as follows:
1.
VESTING.
Subject to Section 10 and to the limitations contained herein, your
option will vest as provided in your Grant Notice, provided that
vesting will cease upon the termination of your Continuous
Service.
2.
NUMBER OF SHARES AND EXERCISE PRICE. The number of shares of Common
Stock subject to your option and your exercise price per share
referenced in your Grant Notice may be adjusted from time to time
for Capitalization Adjustments.
3.
EXERCISE PRIOR TO VESTING (“EARLY
EXERCISE”). If permitted in your Grant Notice (i.e.,
the “Exercise Schedule” indicates that “Early
Exercise” of your option is permitted) and subject to the
provisions of your option, you may elect at any time that is both
(i) during the period of your Continuous Service and (ii) during
the term of your option, to exercise all or part of your option,
including the nonvested portion of your option; provided,
however, that:
(a)
a partial exercise of your
option shall be deemed to cover first vested shares of Common Stock
and then the earliest vesting installment of unvested shares of
Common Stock;
(b)
any shares of Common Stock
so purchased from installments that have not vested as of the date
of exercise shall be subject to the purchase option in favor of the
Company as described in the Company’s form of Early Exercise
Stock Purchase Agreement; and
(c)
you shall enter into the
Company’s form of Early Exercise Stock Purchase Agreement
with a vesting schedule that will result in the same vesting as if
no early exercise had occurred.
4.
METHOD OF PAYMENT. Payment of the exercise price is due in
full upon exercise of all or any part of your option. You may
elect to make payment of the exercise price in cash or by check or
in any other manner permitted by
your Grant Notice, which may include one or more of the
following:
1
(a)
In the Company’s
sole discretion and provided that at the time of exercise the
Common Stock is publicly traded, pursuant to a program developed
under Regulation T as promulgated by the Federal Reserve Board
that, prior to the issuance of Common Stock, results in either the
receipt of cash (or check) by the Company or the receipt of
irrevocable instructions to pay the aggregate exercise price to the
Company from the sales proceeds.
(b)
In the Company’s
sole discretion and provided that at the time of exercise the
Common Stock is publicly traded, by delivery of already-owned
shares of Common Stock either that you have held for the period
required to avoid a charge to the Company’s reported earnings
(generally six (6) months) or that you did not acquire, directly or
indirectly from the Company, that are owned free and clear of any
liens, claims, encumbrances or security interests, and that are
valued at Fair Market Value on the date of exercise.
“Delivery” for these purposes, in the sole discretion
of the Company at the time you exercise your option, shall include
delivery to the Company of your attestation of ownership of such
shares of Common Stock in a form approved by the Company.
Notwithstanding the foregoing, you may not exercise your option by
tender to the Company of Common Stock to the extent such tender
would violate the provisions of any law, regulation or agreement
restricting the redemption of the Company’s stock.
(c)
In the Company’s
sole discretion and provided that at the time of exercise the
Common Stock is publicly traded, through a “net
exercise” of your option, pursuant to which the Company will
not require payment of the exercise price of your option but will
reduce the number of shares of Common Stock issued to you upon the
exercise by the largest number of whole shares that has a Fair
Market Value that does not exceed the aggregate exercise
price. With respect to any remaining balance of the aggregate
exercise price, you shall make a cash payment to the Company.
The shares of Common Stock so used to pay the exercise price of
your option under a “net exercise” will be considered
to have resulted from the exercise of the option, and accordingly,
the option will not again be exercisable with respect to such
shares, the shares actually delivered to you, and any shares
withheld for purposes of tax withholding.
(d)
In the Company’s
sole discretion and subject to compliance with applicable law
(including Section 402 of the Sarbanes Oxley Act of 2002), pursuant
to the following deferred payment alternative:
(i)
Not less than one hundred
percent (100%) of the aggregate exercise price, plus accrued
interest, shall be due four (4) years from date of exercise or, at
the Company’s election, upon termination of your Continuous
Service.
(ii)
Interest shall be
compounded at least annually and shall be charged at the minimum
rate of interest necessary to avoid (1) the treatment as interest,
under any applicable provisions of the Code, of any amounts other
than amounts stated to be interest under the deferred payment
arrangement and (2) the treatment of the option as a variable award
for financial accounting purposes.
(iii)
At any time that the
Company is incorporated in Delaware, payment of the Common
Stock’s “par value,” as defined in the Delaware
General Corporation Law, shall be made in cash and not by deferred
payment.
2
(iv)
In order to elect the
deferred payment alternative, you must, as a part of your written
notice of exercise, give notice of the election of this payment
alternative and, in order to secure the payment of the deferred
exercise price to the Company hereunder, if the Company so
requests, you must tender to the Company a promissory note and a
pledge agreement covering the purchased shares of Common Stock,
both in form and substance satisfactory to the Company, or such
other or additional documentation as the Company may
request.
5.
WHOLE SHARES. You may exercise your option only for
whole shares of Common Stock.
6.
SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary
contained herein, you may not exercise your option unless the
shares of Common Stock issuable upon such exercise are then
registered under the Securities Act or, if such shares of Common
Stock are not then so registered, the Company has determined that
such exercise and issuance would be exempt from the registration
requirements of the Securities Act. The exercise of your
option also must comply with other applicable laws and regulations
governing your option, and you may not exercise your option if the
Company determines that such exercise would not be in material
compliance with such laws and regulations.
7.
TERM.
You may not exercise your option before the commencement or after
the expiration of its term. The term of your option commences
on the Date of Grant and expires upon the earliest of the
following:
(a)
one hundred eighty (180)
days after the termination of your Continuous Service for any
reason other than your Disability or death, provided that if during
any part of such period your option is not exercisable solely
because of the condition set forth in Section 6, your option shall
not expire until the earlier of the Expiration Date (as defined in
your Grant Notice) or until it shall have been exercisable for an
aggregate period of three (3) months after the termination of your
Continuous Service; 6
(b)
twelve (12) months after
the termination of your Continuous Service due to your
Disability;
(c)
eighteen (18) months after
your death if you die either during your Continu
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