EXHIBIT 10.34

 

STOCK OPTION AGREEMENT

 

ARNO THERAPEUTICS, INC.

2005 STOCK OPTION PLAN

 

THIS STOCK OPTION AGREEMENT (this “Agreement”) is made effective as of
___________, by and between Arno Therapeutics, Inc., a Delaware corporation (the
“Company”), and ________________ (“Participant”).

 

W I T N E S S E T H:

 

WHEREAS, [Participant has either been hired to serve as an employee of the
Company or the Company desires to induce Participant to continue to serve the
Company as an employee] [on the date hereof, Participant serves as a director of
the Company and the Company desires to induce Participant to continue to serve
the Company as a director];

 

WHEREAS, the Company wishes to grant a nonqualified stock option to Participant
to purchase shares of the Company’s Common Stock pursuant to the Company’s 2005
Stock Option Plan, as amended (the “Plan”); and

 

WHEREAS, the Committee, or its duly authorized designee, has authorized the
grant of a nonqualified stock option to Participant and has determined that, as
of the effective date of this Agreement, the fair market value of the Company’s
Common Stock is $______ per share.

 

NOW, THEREFORE, in consideration of the premises and of the mutual covenants
herein contained, the parties hereto agree as follows:

 

1.                     Grant of Option. The Company hereby grants to Participant
on the date set forth above (the “Date of Grant”), the right and option (the
“Option”) to purchase all or portions of an aggregate of __________ shares of
Common Stock (the “Option Shares”) at a per share price of $_______ on the terms
and conditions set forth herein, and subject to adjustment pursuant to Section
11.6 of the Plan. This Option is a nonqualified stock option and will not be
treated as an incentive stock option, as defined under Section 422, or any
successor provision, of the Internal Revenue Code of 1986, as amended (the
“Code”), and the regulations thereunder.

 

2.                     Duration and Exercisability; Vesting.

 

(a)                  General. This Option shall be exercisable only to the
extent vested. To the extent vested, the term during which this Option may be
exercised shall terminate on _____________, except as otherwise provided in this
Section 2. [INSERT VESTING SCHEDULE] If Participant does not purchase upon an
exercise of this Option the full number of Option Shares which Participant is
then entitled to purchase, Participant may purchase upon any subsequent exercise
prior to this Option’s termination such previously unpurchased Option Shares in
addition to those Participant is otherwise entitled to purchase.

 

(b)                  Termination of Relationship (other than Disability or
Death). If Participant ceases to be an employee of the Company or any Subsidiary
for any reason other than disability or death, this Option shall terminate on
the earlier of (i) the close of business on the three-month anniversary of the
date of termination of Participant’s relationship, and (ii) the expiration date
of this Option stated in Paragraph 2(a) above. In such period following such
termination of Participant’s relationship, this Option shall be exercisable only
to the extent the Option was exercisable on the vesting date immediately
preceding the date on which Participant’s relationship with the Company or
Subsidiary has terminated, but had not previously been exercised. To the extent
this Option was not exercisable upon the termination of such relationship, or if
Participant does not exercise the Option within the time specified in this
Paragraph 2(b), all rights of Participant under this Option shall be forfeited.

 

 

 

 

(c)                   Disability. If Participant ceases to be an employee of the
Company or any Subsidiary because of disability (as defined in Code Section
22(e), or any successor provision), this Option shall terminate on the earlier
of (i) the close of business on the twelve-month anniversary of the date of
termination of Participant’s relationship, and (ii) the expiration date of this
Option stated in Paragraph 2(a) above. In such period following such termination
of Participant’s relationship, this Option shall be exercisable only to the
extent the Option was exercisable on the vesting date immediately preceding the
date on which Participant’s relationship with the Company or Subsidiary has
terminated, but had not previously been exercised. To the extent this Option was
not exercisable upon the termination of such relationship, or if Participant
does not exercise the Option within the time specified in this Paragraph 2(c),
all rights of Participant under this Option shall be forfeited.

 

(d)                  Death. In the event of Participant’s death, this Option
shall terminate on the earlier of (i) the close of business on the twelve-month
anniversary of the date of Participant’s death, and (ii) the expiration date of
this Option stated in Paragraph 2(a) above. In such period following
Participant’s death, this Option may be exercised by the person or persons to
whom Participant’s rights under this Option shall have passed by Participant’s
will or by the laws of descent and distribution only to the extent the Option
was exercisable on the vesting date immediately preceding the date of
Participant’s death, but had not previously been exercised. To the extent this
Option was not exercisable upon the date of Participant’s death, or if such
person or persons fail to exercise this Option within the time specified in this
Paragraph 2(d), all rights under this Option shall be forfeited.

 

3.                     Manner of Exercise.

 

(a)                  General. The Option may be exercised only by Participant
(or other proper party in the event of death or incapacity), subject to the
conditions of the Plan and subject to such other administrative rules as the
Committee may deem advisable, by delivering within the option period written
notice of exercise to the Company at its principal office. The notice shall
state the number of Option Shares as to which the Option is being exercised and
shall be accompanied by payment in full of the option price for all Option
Shares designated in the notice. The exercise of the Option shall be deemed
effective upon receipt of such notice by the Company and upon payment that
complies with the terms of the Plan and this Agreement. The Option may be
exercised with respect to any number or all of the Option Shares as to which it
can then be so exercised and, if partially exercised, may be exercised as to the
unexercised Option Shares any number of times during the option period as
provided herein.

 

(b)               Form of Payment. Subject to the approval of the Committee,
payment of the option price by Participant shall be in the form of cash,
personal check or certified check, or any combination thereof.

 

(c)                   Stock Transfer Records. As soon as practicable after the
effective exercise of all or any part of the Option, Participant shall be
recorded on the stock transfer books of the Company as the owner of the Option
Shares purchased, and the Company shall deliver to Participant one or more duly
issued stock certificates evidencing such ownership. All requisite original
issue or transfer documentary stamp taxes shall be paid by the Company.

 

-2-

 

 

4.                     Miscellaneous.

 

(a)                  Employment or Other Relationship; Rights as Shareholder.
This Agreement shall not confer on Participant any right with respect to the
continuance of employment or any other relationship with the Company or any of
its Subsidiaries, nor will it interfere in any way with the right of the Company
to terminate such employment or relationship. Participant shall have no rights
as a shareholder with respect to the Option Shares until such Option Shares have
been issued to Participant upon exercise of this Option. No adjustment shall be
made for dividends (ordinary or extraordinary, whether in cash, securities or
other property), distributions or other rights for which the record date is
prior to the date such Option Shares are issued, except as provided in Section
11.6 of the Plan.

 

(b)                  Securities Law Compliance. Participant agrees that, until
such time that the Option Shares are registered and freely tradable under
applicable state and federal securities laws, all Option Shares issued to
Participant upon exercise of this Option shall be held for Participant’s own
account without a view to any further distribution thereof, that the
certificates for such Option Shares shall bear an appropriate legend to that
effect and that such Option Shares will be not transferred or disposed of except
in compliance with applicable state and federal securities laws.

 

(c)                   Mergers, Recapitalizations, Stock Splits, Etc. Except as
otherwise specifically provided in any employment, change of control, severance
or similar agreement executed by the Participant and the Company, pursuant and
subject to Section 11.6 of the Plan, certain changes in the number or character
of the Common Stock of the Company (through sale, merger, consolidation,
exchange, reorganization, divestiture (including a spin-off), liquidation,
recapitalization, stock split, stock dividend or otherwise) shall result in an
adjustment, reduction or enlargement, as appropriate, in Participant’s rights
with respect to any unexercised portion of the Option (i.e., Participant shall
have such “anti-dilution” rights under the Option with respect to such events,
but shall not have “preemptive” rights).

 

(d)                  Shares Reserved. The Company shall at all times during the
option period reserve and keep available such number of shares as will be
sufficient to satisfy the requirements of this Agreement.

 

(e)                   Withholding Taxes. To permit the Company to comply with
all applicable federal and state income tax laws or regulations, the Company may
take such action as it deems appropriate to ensure that, if necessary, all
applicable federal and state payroll, income or other taxes are withheld from
any amounts payable by the Company to Participant. If the Company is unable to
withhold such federal and state taxes, for whatever reason, Participant hereby
agrees to pay to the Company an amount equal to the amount the Company would
otherwise be required to withhold under federal or state law. Subject to such
rules as the Committee may adopt, the Committee may, in its sole discretion,
permit Participant to satisfy such withholding tax obligations, in whole or in
part (i) by delivering shares of Common Stock, or (ii) by electing to have the
Company withhold shares of Common Stock otherwise issuable to Participant, in
either case having a Fair Market Value, as of the date the amount of tax to be
withheld is determined under applicable tax law, equal to the minimum amount
required to be withheld for tax purposes. Participant’s request to deliver
shares or to have shares withheld for purposes of such withholding tax
obligations shall be made on or before the date that triggers such obligations
or, if later, the date that the amount of tax to be withheld is determined under
applicable tax law. Participant’s request shall be approved by the Committee and
otherwise comply with such rules as the Committee may adopt to assure compliance
with Rule 16b-3 or any successor provision, as then in effect, of the General
Rules and Regulations under the Securities and Exchange Act of 1934, if
applicable.

 

(f)                    Nontransferability. Except as otherwise provided in the
Plan, during the lifetime of Participant, the Option shall be exercisable only
by Participant or by the Participant’s guardian or other legal representative,
and shall not be assignable or transferable by Participant, in whole or in part,
other than by will or by the laws of descent and distribution.

 

-3-

 

 

(g)                  2005 Stock Option Plan. The Option evidenced by this
Agreement is granted pursuant to the Plan, a copy of which Plan has been made
available to Participant and is hereby incorporated into this Agreement. This
Agreement is subject to and in all respects limited and conditioned as provided
in the Plan. All defined terms of the Plan shall have the same meaning when used
in this Agreement. The Plan governs this Option and, in the event of any
questions as to the construction of this Agreement or in the event of a conflict
between the Plan and this Agreement, the Plan shall govern, except as otherwise
provided herein or in the Plan.

 

(h)                  Lockup Period Limitation. Participant agrees that in the
event the Company advises Participant that it plans an underwritten public
offering of its Common Stock in compliance with the Securities Act of 1933, as
amended (the “Securities Act”), and that the underwriter(s) seek to impose
restrictions under which certain shareholders may not sell or contract to sell
or grant any option to buy or otherwise dispose of part or all of their stock
purchase rights of the underlying Common Stock, Participant hereby agrees that
for a period not to exceed 180 days from the prospectus, Participant will not
sell or contract to sell or grant an option to buy or otherwise dispose of this
Option or any of the underlying Option Shares without the prior written consent
of the underwriter(s) or its representative(s).

 

(i)                    Blue Sky Limitation. Notwithstanding anything in this
Agreement to the contrary, in the event the Company makes any public offering of
its securities and it is determined that it is necessary to reduce the number of
issued but unexercised stock purchase rights so as to comply with any state
securities or Blue Sky law limitations with respect thereto, and such
determination is affirmed by the Board of Directors, unless the Board of
Directors determines otherwise, (i) the exercisability of this Option and the
date on which this Option must be exercised shall be accelerated, provided that
the Company agrees to give Participant 15 days’ prior written notice of such
acceleration, and (ii) any portion of this Option or any other option granted to
Participant pursuant to the Plan which is not exercised prior to or
contemporaneously with such public offering shall be canceled.

 

(j)                    Accounting Compliance. Participant agrees that if a
transaction subject to Rule 145 of the Securities Act occurs, and Participant is
an “affiliate” of the Company or any its affiliates (as defined in applicable
legal and accounting principles) at the time of such transaction, Participant
will comply with all requirements of Rule 145 and the requirements of such other
legal or accounting principles, and will execute any documents necessary to
ensure such compliance.

 

(k)                  Stock Legend. The Committee may require that the
certificates for any Option Shares purchased by Participant (or, in the case of
death, Participant’s successors) shall bear an appropriate legend to reflect the
restrictions of Paragraph 4(b) and Paragraphs 4(g) through 4(i) of this
Agreement; provided, however, that failure to so endorse any of such
certificates shall not render invalid or inapplicable Paragraph 4(b) or
Paragraphs 4(g) through 4(i).

 

(l)                    Scope of Agreement. This Agreement shall bind and inure
to the benefit of the Company and its successors and assigns and Participant and
any permitted successor or successors of Participant.

 

(m)                Governing Law. This Agreement shall be governed by, and
construed and interpreted in accordance with, the laws of the State of Delaware,
without giving effect to its principles of conflicts of law.

 

-4-

 

 

(n)                  Participant’s Representations. The Participant hereby
represents and warrants that the Participant has reviewed with her own tax
advisors the federal, state, and local tax consequences of the transactions
contemplated by this Agreement. The Participant is relying solely on such
advisors and not on any statements or representation of the Company or any of
its agents. The Participant understands that she will be solely responsible for
any tax liability that may result to her as a result of the transactions
contemplated by this Agreement.

 

(o)                  Notices. All notices and other communications provided in
this Agreement will be in writing and will be deemed to have been duly given
when received by the party to whom it is directed at the following addresses:

 

 

If to the Company:

 

Arno Therapeutics, Inc.

200 Route 31 North, Suite 104

Flemington, NJ 08822

Attn: Secretary

If to the Participant:

 

 

 

 

5.                        Change of Control. Notwithstanding anything in the
Plan or this Agreement to the contrary, this Option shall become fully vested
and exercisable upon a Change of Control, as such term is defined in the Plan.

 

[Signature page follows]

 

 

-5-

 

 

ACCORDINGLY, the parties hereto have caused this Agreement to be executed on the
day and year first above written.

 

 

  PARTICIPANT:                           Name:                       ARNO
THERAPEUTICS, INC.                     By:       Name:       Its:    

 

 

 

 

-6-