Form of Stock Option Grant Notice and Stock Option Agreement



 Exhibit 10.37 
 KOSAN BIOSCIENCES INCORPORATED 
 STOCK
OPTION GRANT NOTICE 
 2006 EQUITY INCENTIVE
PLAN 
 Kosan Biosciences Incorporated (the “Company”), pursuant to its 2006 Equity Incentive Plan (the
“Plan”), hereby grants to Optionholder an option to purchase the number of shares of the Company’s Common Stock set forth below. This option is subject to all of the terms and conditions as set forth herein and in the
Stock Option Agreement, the Plan and the Notice of Exercise, all of which are attached hereto and incorporated herein in their entirety. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Plan or the Stock Option
Agreement. 
  

			
	Optionholder:	 	 __________________________________

	Date of Grant:	 	 __________________________________

	Vesting Commencement Date:	 	 __________________________________

	Number of Shares Subject to Option:	 	 __________________________________

	Exercise Price (Per Share):	 	 __________________________________

	Total Exercise Price:	 	 __________________________________

	Expiration Date:	 	 __________________________________


  

					
	Type of Grant:	  	Incentive Stock Option1	  	Nonstatutory Stock Option

  

					
	Exercise Schedule:	  	Same as Vesting Schedule
		
	Vesting Schedule:	  	___________________________________
		
	Payment:	  	By one or a combination of the following methods of payment (described in the Stock Option Agreement):
			
		  	 ̈	  	Cash or check
			
		  	 ̈	  	Pursuant to a Regulation T Program (cashless exercise) if the shares are publicly traded
			
		  	 ̈	  	Delivery of already-owned shares if the shares are publicly traded
			
		  	 ̈	  	Net exercise

 Additional Terms/Acknowledgements: The undersigned Optionholder acknowledges receipt of, and understands
and agrees to, this Stock Option Grant Notice, the Stock Option Agreement and the Plan. Optionholder further acknowledges that as of the Date of Grant, this Stock Option Grant Notice, the Stock Option Agreement and the Plan set forth the entire
understanding between Optionholder and the Company regarding the acquisition of stock in the Company and supersede all prior oral and written agreements on that subject with the exception of (i) options previously granted and delivered to
Optionholder under the Plan, and (ii) the following agreements only: 
  

			
	OTHER AGREEMENTS:	  	____________________________________________________________
		  	____________________________________________________________



	1	If this is an Incentive Stock Option, it (plus other outstanding Incentive Stock Options) cannot be first exercisable for more than $100,000 in value
(measured by exercise price) in any calendar year. Any excess over $100,000 is a Nonstatutory Stock Option. 









							
	OPTIONHOLDER:	 	KOSAN BIOSCIENCES INCORPORATED
			
	  
	 	By:	 	  

	Signature	 		 	Signature
				
	Date:	 	  
	 	Title:	 	  

				
	Residence Address:	 	  
	 	Date:	 	  

			
	  
	 		 	

 ATTACHMENTS: Stock Option Agreement, 2006
Equity Incentive Plan and Notice of Exercise 







 STANDARD GRANT 
 KOSAN BIOSCIENCES INCORPORATED 
 2006
EQUITY INCENTIVE PLAN 
 STOCK OPTION
AGREEMENT 
 (INCENTIVE STOCK OPTION OR
NONSTATUTORY STOCK OPTION) 
 Pursuant to your Stock Option Grant Notice (“Grant
Notice”) and this Stock Option Agreement, Kosan Biosciences Incorporated (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 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 RESTRICTION FOR
NON-EXEMPT EMPLOYEES. If you are an Employee eligible for overtime compensation under the Fair Labor Standards Act of 1938, as amended (i.e., a “Non-Exempt Employee”),
you may not exercise your option until you have completed at least six (6) months of Continuous Service measured from the Date of Grant specified in your Grant Notice, notwithstanding any other provision of your option. 
 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: 
 (a) Bank draft or money order payable to the Company. 
 (b) In the Company’s sole discretion at the time your option is exercised and provided that at the time of exercise the Common Stock is publicly traded and quoted regularly in The Wall Street
Journal, 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. 







 (c) In the Company’s sole discretion at the time your option is exercised and provided that
at the time of exercise the Common Stock is publicly traded and quoted regularly in The Wall Street Journal, by delivery to the Company (either by actual delivery or attestation) 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. 
 (d) By a
“net exercise” arrangement pursuant to which the Company will reduce the number of shares of Common Stock issued upon exercise of your option by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate
exercise price; provided, however, that the Company shall accept a cash or other payment from you to the extent of any remaining balance of the aggregate exercise price not satisfied by such reduction in the number of whole shares to be
issued; provided further, however, that shares of Common Stock will no longer be outstanding under your option and will not be exercisable thereafter to the extent that (1) shares are used to pay the exercise price pursuant to the
“net exercise,” (2) shares are delivered to you as a result of such exercise, and (3) shares are withheld to satisfy tax withholding obligations. 
 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) three
(3) months after the termination of your Continuous Service for any reason other than your Disability or death, provided, however, that (i) if during any part of such three (3) month 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 or until it shall have been exercisable for an aggregate period of three (3) months after the termination of your
Continuous Service and (ii) if (x) you are a Non-Exempt Employee, (y) you terminate your Continuous Service within six (6) months after the Date of Grant specified in your Grant Notice, 







 and (z) you have vested in a portion of your option at the time of your termination of Continuous Service, your
option shall not expire until the earlier of (A) the later of the date that is seven (7) months after the Date of Grant specified in your Grant Notice or the date that is three (3) months after the termination of your Continuous
Service or (B) the Expiration Date; 
 (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 Continuous Service or within three
(3) months after your Continuous Service terminates; 
 (d) the Expiration Date indicated in your Grant Notice; or 
 (e) the day before the tenth (10th) anniversary of the Date of Grant. 
 If your option is an Incentive Stock Option, note that to obtain the federal income tax advantages associated with an Incentive Stock Option, the Code
requires that at all times beginning on the date of grant of your option and ending on the day three (3) months before the date of your option’s exercise, you must be an employee of the Company or an Affiliate, except in the event of your
death or your permanent and total disability, as defined in Section 22(e) of the Code. The Company has provided for extended exercisability of your option under certain circumstances for your benefit but cannot guarantee that your option will
necessarily be treated as an Incentive Stock Option if you continue to provide services to the Company or an Affiliate as a Consultant or Director after your employment terminates or if you otherwise exercise your option more than three
(3) months after the date your employment with the Company or an Affiliate terminates. 
 8. EXERCISE. 

(a) You may exercise the vested portion of your option during its term by delivering a Notice of Exercise (in a form designated by the Company)
together with the exercise price to the Secretary of the Company, or to such other person as the Company may designate, during regular business hours, together with such additional documents as the Company may then require. 
 (b) By exercising your option you agree that, as a condition to any exercise of your option, the Company may require you to enter into an
arrangement providing for the payment by you to the Company of any tax withholding obligation of the Company arising by reason of (1) the exercise of your option, (2) the lapse of any substantial risk of forfeiture to which the shares of
Common Stock are subject at the time of exercise, or (3) the disposition of shares of Common Stock acquired upon such exercise. 
 (c) If your option is an Incentive Stock Option, by exercising your option you agree that you will notify the Company in writing within fifteen (15) days after the date of any disposition of any of the shares of the Common Stock
issued upon exercise of your option that occurs within two (2) years after the date of your option grant or within one (1) year after such shares of Common Stock are transferred upon exercise of your option. 







 9. TRANSFERABILITY. 
 (a) Restrictions on Transfer. Your option shall not be transferable except by will or by the laws of descent and distribution and shall be
exercisable during your lifetime only by you; provided, however, that the Board may, in its sole discretion, permit you to transfer your option in a manner consistent with applicable tax and securities laws upon your request. 
 (b) Domestic Relations Orders. Notwithstanding the foregoing, your option may be transferred pursuant to a domestic relations order; provided,
however, that if your option is an Incentive Stock Option, your option shall be deemed to be a Nonstatutory Stock Option as a result of such transfer. 
 (c) Beneficiary Designation. Notwithstanding the foregoing, you may, by delivering written notice to the Company, in a form provided by or otherwise satisfactory to the Company, designate a third party who, in
the event of your death, shall thereafter be entitled to exercise your option. 
 10. OPTION NOT
A SERVICE CONTRACT. Neither the Plan nor this Agreement confer upon you the right to continue providing services to the Company or an Affiliate, nor do they interfere in any way with your right or the
Company’s right to terminate your service at any time, with or without cause. 
 11. WITHHOLDING
OBLIGATIONS. 
 (a) At the time you exercise your option, in whole or in part, or at any time thereafter as
requested by the Company, you hereby authorize withholding from payroll and any other amounts payable to you, and otherwise agree to make adequate provision for (including by means of a “cashless exercise” pursuant to a program developed
under Regulation T as promulgated by the Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if any, which
arise in connection with the exercise of your option. 
 (b) Upon your request and subject to approval by the Company, in its sole
discretion, and compliance with any applicable legal conditions or restrictions, the Company may withhold from fully vested shares of Common Stock otherwise issuable to you upon the exercise of your option a number of whole shares of Common Stock
having a Fair Market Value, determined by the Company as of the date of exercise, not in excess of the minimum amount of tax required to be withheld by law (or such lower amount as may be necessary to avoid variable award accounting). If the date of
determination of any tax withholding obligation is deferred to a date later than the date of exercise of your option, share withholding pursuant to the preceding sentence shall not be permitted unless you make a proper and timely election under
Section 83(b) of the Code, covering the aggregate number of shares of Common Stock acquired upon such exercise with respect to which such determination is otherwise deferred, to accelerate the determination of such tax withholding obligation to
the date of exercise of your option. Notwithstanding the filing of such election, shares of Common Stock shall be withheld solely from fully vested shares of Common Stock determined as of the date of exercise of your option that are otherwise
issuable to you upon such exercise. Any adverse consequences to you arising in connection with such share withholding procedure shall be your sole responsibility. 







 (c) You may not exercise your option unless the tax withholding obligations of the Company and/or
any Affiliate are satisfied. Accordingly, you may not be able to exercise your option when desired even though your option is vested, and the Company shall have no obligation to issue a certificate for such shares of Common Stock or release such
shares of Common Stock from any escrow provided for herein unless such obligations are satisfied. 
 12. NOTICES. Any
notices provided for in your option or the Plan shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by mail by the Company to you, five (5) days after deposit in the United States
mail, postage prepaid, addressed to you at the last address you provided to the Company. 
 13. GOVERNING
PLAN DOCUMENT. Your option is subject to all the provisions of the Plan, the provisions of which are hereby made a part of your option, and is further subject to all interpretations, amendments, rules and
regulations, which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of your option and those of the Plan, the provisions of the Plan shall control.