EXHIBIT 10.2
 
EUGENE SCIENCE, INC.
 
STOCK OPTION AGREEMENT
UNDER
2006 STOCK INCENTIVE PLAN

Type of Option (check one):    o  Incentive    o  Nonqualified
 
This Stock Option Agreement (the “Agreement”) is entered into as of __________,
_____, by and between EUGENE SCIENCE, INC., a Delaware corporation (the
“Company”), and _______________ (“Optionee”) pursuant to the Company’s 2006
Stock Incentive Plan (the “Plan”).  Any capitalized term not defined herein
shall have the meaning ascribed to it in the Plan.
 
1.    Grant of Option. The Company hereby grants to Optionee an option (the
“Option”) to purchase all or any portion of a total of ______________________
(_______) shares (the “Shares”) of the Common Stock of the Company at a purchase
price of _____________ ($_____) per share (the “Exercise Price”), subject to the
terms and conditions set forth herein and the provisions of the Plan. If the box
marked “Incentive” above is checked, then this Option is intended to qualify as
an “incentive stock option” as defined in Section 422 of the Internal Revenue
Code of l986, as amended (the “Code”). If this Option fails in whole or in part
to qualify as an incentive stock option, or if the box marked “Nonqualified” is
checked, then this Option shall to that extent constitute a nonqualified stock
option.
 
2.    Vesting of Option. The right to exercise this Option shall be immediately
vested as to 100% of the Shares.
 
3.    Term of Option. Optionee’s right to exercise this Option shall terminate
upon the expiration of ten (10) years from the date of this Agreement.
 
4.    Exercise of Option. On or after the vesting of any portion of this Option
in accordance with Sections 2 or 9 hereof, and until termination of the right to
exercise this Option in accordance with Section 3 above, the portion of this
Option which has vested may be exercised in whole or in part by the Optionee
(or, after his or her death, by the person designated in Section 5 below) upon
delivery of the following to the Company at its principal executive offices:
 
(a)    a written notice of exercise which identifies this Agreement and states
the number of Shares then being purchased (but no fractional Shares may be
purchased) unless the Company has established other procedures;
 
(b)    a check or cash in the amount of the Exercise Price (or payment of the
Exercise Price in such other form of lawful consideration as the Administrator
may approve from time to time under the provisions of Section 5.3 of the Plan);
 
(c)    a check or cash in the amount reasonably requested by the Company to
satisfy the Company’s withholding obligations under federal, state or other
applicable tax laws with respect to the taxable income, if any, recognized by
the Optionee in connection with the exercise of this Option (unless the Company
and Optionee shall have made other arrangements for deductions or withholding
from Optionee’s wages, bonus or other compensation payable to Optionee, or by
the withholding of Shares issuable upon exercise of this Option or the delivery
of Shares owned by the Optionee in accordance with Section 14.5 of the Plan,
provided such arrangements satisfy the requirements of applicable tax laws); and
 
 
 

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(d)    a letter, if requested by the Company, in such form and substance as the
Company may require, setting forth the investment intent of the Optionee, or
person designated in Section 5 below, as the case may be.
 
5.    Death of Optionee; No Assignment. The rights of the Optionee under this
Agreement may not be assigned or transferred except by will or by the laws of
descent and distribution, and may be exercised during the lifetime of the
Optionee only by such Optionee. Any attempt to sell, pledge, assign,
hypothecate, transfer or dispose of this Option in contravention of this
Agreement or the Plan shall be void and shall have no effect. If the Optionee’s
Continuous Service terminates as a result of his or her death, and provided
Optionee’s rights hereunder shall have vested pursuant to Section 2 hereof,
Optionee’s legal representative, his or her legatee, or the person who acquired
the right to exercise this Option by reason of the death of the Optionee
(individually, a “Successor”) shall succeed to the Optionee’s rights and
obligations under this Agreement. After the death of the Optionee, only a
Successor may exercise this Option.
 
6.    Representations and Warranties of Optionee. Optionee acknowledges receipt
of a copy of the Plan and understands that all rights and obligations connected
with this Option are set forth in this Agreement and in the Plan.
 
7.    Limitation on Company’s Liability for Nonissuance. The Company agrees to
use its reasonable best efforts to obtain from any applicable regulatory agency
such authority or approval as may be required in order to issue and sell the
Shares to the Optionee pursuant to this Option. Inability of the Company to
obtain, from any such regulatory agency, authority or approval deemed by the
Company’s counsel to be necessary for the lawful issuance and sale of the Shares
hereunder and under the Plan shall relieve the Company of any liability in
respect of the nonissuance or sale of such Shares as to which such requisite
authority or approval shall not have been obtained.
 
8.    Adjustments Upon Changes in Capital Structure. In the event that the
outstanding shares of Common Stock of the Company are hereafter increased or
decreased or changed into or exchanged for a different number or kind of shares
or other securities of the Company by reason of a recapitalization, stock split,
combination of shares, reclassification, stock dividend or other change in the
capital structure of the Company, then appropriate adjustment shall be made by
the Administrator to the number of Shares subject to the unexercised portion of
this Option and to the Exercise Price per share, in order to preserve, as nearly
as practical, but not to increase, the benefits of the Optionee under this
Option, in accordance with the provisions of Section 4.3 of the Plan.
 
9.    Change in Control. In the event of a Change in Control of the Company (as
defined in Section 2.4 of the Plan):
 
(a)    The right to exercise this Option shall accelerate automatically and vest
in full (notwithstanding the provisions of Section 2 above) effective as of
immediately prior to the consummation of the Change in Control unless this
Option is to be assumed by the acquiring or successor entity (or parent thereof)
or a new option or New Incentives are to be issued in exchange therefor, as
provided in subsection (b) below. If vesting of this Option will accelerate
pursuant to the preceding sentence, the Administrator in its discretion may
provide, in connection with the Change in Control transaction, for the purchase
or exchange of this Option for an amount of cash or other property having a
value equal to the difference (or “spread”) between: (x) the value of the cash
or other property that the Optionee would have received pursuant to the Change
in Control transaction in exchange for the Shares issuable upon exercise of this
Option had this Option been exercised immediately prior to the Change in
Control, and (y) the aggregate Exercise Price for such Shares. If the vesting of
this Option will accelerate pursuant to this subsection (a), then the
Administrator shall cause written notice of the Change in Control transaction to
be given to the Optionee not less than fifteen (15) days prior to the
anticipated effective date of the proposed transaction.
 
 
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(b)    The vesting of this Option shall not accelerate if and to the extent
that: (i) this Option (including the unvested portion thereof) is to be assumed
by the acquiring or successor entity (or parent thereof) or a new option of
comparable value is to be issued in exchange therefor pursuant to the terms of
the Change in Control transaction, or (ii) this Option (including the unvested
portion thereof) is to be replaced by the acquiring or successor entity (or
parent thereof) with other incentives of comparable value under a new incentive
program (“New Incentives”) containing such terms and provisions as the
Administrator in its discretion may consider equitable. If this Option is
assumed, or if a new option of comparable value is issued in exchange therefor,
then this Option or the new option shall be appropriately adjusted, concurrently
with the Change in Control, to apply to the number and class of securities or
other property that the Optionee would have received pursuant to the Change in
Control transaction in exchange for the Shares issuable upon exercise of this
Option had this Option been exercised immediately prior to the Change in
Control, and appropriate adjustment also shall be made to the Exercise Price
such that the aggregate Exercise Price of this Option or the new option shall
remain the same as nearly as practicable.
 
(c)    If the provisions of subsection (b) above apply, then this Option, the
new option or the New Incentives shall continue to vest in accordance with the
provisions of Section 2 hereof and shall continue in effect for the remainder of
the term of this Option in accordance with the provisions of Section 3 hereof.
However, in the event of an Involuntary Termination (as defined below) of
Optionee’s Continuous Service within twelve (12) months following such Change in
Control, then vesting of this Option, the new option or the New Incentives shall
accelerate in full automatically effective upon such Involuntary Termination.
 
(d)    For purposes of this Section 11, the following terms shall have the
meanings set forth below:
 
(i)    “Involuntary Termination” shall mean the termination of Optionee’s
Continuous Service by reason of:
 
(A)    Optionee’s involuntary dismissal or discharge by the Company, or by the
acquiring or successor entity (or parent or any subsidiary thereof employing the
Optionee) for reasons other than Cause (as defined below), or
 
(B)    Optionee’s voluntary resignation following (x) a change in Optionee’s
position with the Company, the acquiring or successor entity (or parent or any
subsidiary thereof) which materially reduces Optionee’s duties and
responsibilities or the level of management to which Optionee reports, (y) a
reduction in Optionee’s level of compensation (including base salary, fringe
benefits and target bonus under any performance based bonus or incentive
programs) by more than ten percent (10%), or (z) a relocation of Optionee’s
principal place of employment by more than thirty (30) miles, provided and only
if such change, reduction or relocation is effected without Optionee’s written
consent.
 
 
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(ii)    “Cause” shall mean (A) the commission of any act of fraud, embezzlement
or dishonesty by Optionee which materially and adversely affects the business of
the Company, the acquiring or successor entity (or parent or any subsidiary
thereof), (B) any unauthorized use or disclosure by Optionee of confidential
information or trade secrets of the Company, the acquiring or successor entity
(or parent or any subsidiary thereof), (C) the continued refusal or omission by
the Optionee to perform any material duties required of him if such duties are
consistent with duties customary for the position held with the Company, the
acquiring or successor entity (or parent or any subsidiary thereof), (D) any
material act or omission by the Optionee involving malfeasance or gross
negligence in the performance of Optionee’s duties to, or material deviation
from any of the policies or directives of, the Company or the acquiring or
successor entity (or parent or any subsidiary thereof), (E) conduct on the part
of Optionee which constitutes the breach of any statutory or common law duty of
loyalty to the Company, the acquiring or successor entity (or parent or any
subsidiary thereof), (F) the maintenance of any proceeding initiated by or
against Optionee under any bankruptcy or debtors’ relief laws of the United
States or of any other jurisdiction, which proceeding is not terminated within
ninety (90) days after its commencement, or (G) any illegal act by Optionee
which materially and adversely affects the business of the Company, the
acquiring or successor entity (or parent or any subsidiary thereof), or any
felony committed by Optionee, as evidenced by conviction thereof. The provisions
of this Section shall not limit the grounds for the dismissal or discharge of
Optionee or any other individual in the service of the Company, the acquiring or
successor entity (or parent or any subsidiary thereof).
 
10.    No Employment Contract Created. Neither the granting of this Option nor
the exercise hereof shall be construed as granting to the Optionee any right
with respect to continuance of employment by, or other service provider
relationship with, the Company or any of its subsidiaries. The right of the
Company or any of its subsidiaries to terminate at will the Optionee’s
employment at any time (whether by dismissal, discharge or otherwise), with or
without cause, is specifically reserved.
 
11.    Rights as Shareholder. The Optionee (or transferee of this option by will
or by the laws of descent and distribution) shall have no rights as a
shareholder with respect to any Shares covered by this Option until the date of
the issuance of a stock certificate or certificates to him or her for such
Shares, notwithstanding the exercise of this Option.
 
12.    “Market Stand-Off” Agreement. Optionee agrees that, if requested by the
Company or the managing underwriter of any proposed public offering of the
Company’s securities (including any acquisition transaction where Company
securities will be used as all or part of the purchase price), Optionee will not
sell or otherwise transfer or dispose of any Shares held by Optionee without the
prior written consent of the Company or such underwriter, as the case may be,
during such period of time, not to exceed 180 days following the effective date
of the registration statement filed by the Company with respect to such
offering, as the Company or the underwriter may specify.
 
 
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13.    Interpretation. This Option is granted pursuant to the terms of the Plan,
and shall in all respects be interpreted in accordance therewith. The
Administrator shall interpret and construe this Option and the Plan, and any
action, decision, interpretation or determination made in good faith by the
Administrator shall be final and binding on the Company and the Optionee. As
used in this Agreement, the term “Administrator” shall refer to the committee of
the Board of Directors of the Company appointed to administer the Plan, and if
no such committee has been appointed, the term Administrator shall mean the
Board of Directors.
 
14.    Notices. Any notice, demand or request required or permitted to be given
under this Agreement shall be in writing and shall be deemed given when
delivered personally or three (3) days after being deposited in the United
States mail, as certified or registered mail, with postage prepaid, and
addressed, if to the Company, at its principal place of business, Attention: the
Chief Financial Officer, and if to the Optionee, at his or her most recent
address as shown in the employment or stock records of the Company.
 
15.    Applicable Law. This Agreement shall be construed in accordance with the
laws of the State of California without reference to choice of law principles,
as to all matters, including, but not limited to, matters of validity,
construction, effect or performance.
 
16.    Severability. Should any provision or portion of this Agreement be held
to be unenforceable or invalid for any reason, the remaining provisions and
portions of this Agreement shall be unaffected by such holding.
 
17.    Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original and all of which together shall be
deemed one instrument.

 
[Signature Page Follows]
 
 
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
 
EUGENE SCIENCE, INC.
“OPTIONEE”
 
By: _______________________________________
 
_______________________________________
(Signature)
 
Its: _______________________________________      
 
_______________________________________
(Type or Print Name)

 
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