1996 Stock Option Plan of AviGenics, Inc



 Exhibit 4.1 
 1996 STOCK OPTION PLAN 
 OF 

AVIGENICS, INC. 
  

	 	1.	PURPOSES OF THE PLAN 

 The
purposes of the 1996 Stock Option Plan (the “Plan”) of AviGenics, Inc., a Delaware corporation (the “Company”), are to: 
 (a) Encourage selected employees, directors and consultants to improve operations and increase profits of the Company; 
 (b) Encourage selected employees, directors and consultants to accept or continue employment or association with the Company or its Affiliates; and 

(c) Increase the interest of selected employees, directors and consultants in the Company’s welfare through participation in the
growth in value of the common stock of the Company (the “Common Stock”). 
 Options granted under this Plan
(“Options”) may be “incentive stock options” (“ISOs”) intended to satisfy the requirements of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), or “nonqualified options”
(“NQOs”). 
  

	 	2.	ELIGIBLE PERSONS 

 Every
person who at the date of grant of an Option is a full-time employee of the Company or of any Affiliate (as defined below) of the Company is eligible to receive NQOs or ISOs under this Plan. Every person who at the date of grant is a consultant to,
or non-employee director of, the Company or any Affiliate (as defined below) of the Company is eligible to receive NQOs under this Plan. The term “Affiliate” as used in the Plan means a parent or subsidiary corporation as defined in the
applicable provisions (currently Sections 424(e) and (f), respectively) of the Code. The term “employee” includes an officer or director who is an employee, of the Company. The term “consultant” includes persons employed by, or
otherwise affiliated with, a consultant. 
  

	 	3.	STOCK SUBJECT TO THIS PLAN 


Subject to the provisions of Section 6.1.1 of the Plan, the total number of shares of stock which may be issued under options granted
pursuant to this Plan and the total number of shares provided for issuance under this Plan shall be 166,6661 shares and shall at no time exceed the applicable percentage as calculated in accordance with Section 260.140.45 of Chapter 3 of Title 10 of the California Code of Regulations. The shares covered by
the portion of any grant under the Plan which expires unexercised shall become available again for grants under the Plan. 
  

	1 	499,998 shares as adjusted for the Company’s 3-for-1 stock split on April 21, 1997. 









	 	4.	ADMINISTRATION 

 (a) This
Plan shall be administered by the Board of Directors of the Company (the “Board”) or, either in its entirety or only insofar as required pursuant to Section 4(b) hereof, by a committee (the “Committee”) of at least two Board
members to which administration of the Plan, or of part of the Plan, is delegated (in either case, the “Administrator”). 
 (b) From and after such time as the Company registers a class of equity securities under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), it is intended
that this Plan shall be administered in accordance with the disinterested administration requirements of Rule 16b-3 promulgated by the Securities and Exchange Commission (“Rule 16b-3”), or any successor rule thereto. 

(c) Subject to the other provisions of this Plan, the Administrator shall have the authority, in its discretion: (i) to grant
Options; (ii) to determine the fair market value of the Common Stock subject to Options; (iii) to determine the exercise price of Options granted; (iv) to determine the persons to whom, and the time or times at which, Options shall be
granted, and the number of shares subject to each Option; (v) to interpret this Plan; (vi) to prescribe, amend, and rescind rules and regulations relating to this Plan; (vii) to determine the terms and provisions of each Option
granted (which need not be identical), including but not limited to, the time or times at which Options shall be exercisable; (viii) with the consent of the optionee, to modify or amend any Option; (ix) to defer (with the consent of the
optionee) the exercise date of any Option; (x) to authorize any person to execute on behalf of the Company any instrument evidencing the grant of an Option; and (xi) to make all other determinations deemed necessary or advisable for the
administration of this Plan. The Administrator may delegate nondiscretionary administrative duties to such employees of the Company as it deems proper. 
 (d) All questions of interpretation, implementation, and application of this Plan shall be determined by the Administrator. Such determinations shall be final and binding on all persons. 

(e) With respect to persons subject to Section 16 of the Exchange Act, if any, transactions under this Plan are intended to comply
with the applicable conditions of Rule 16b-3, or any successor rule thereto. To the extent any provision of this Plan or action by the Administrator fails to so comply, it shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Administrator. Notwithstanding the above, it shall be the responsibility of such persons, not of the Company or the Administrator, to comply with the requirements of Section 16 of the Exchange Act; and neither the Company nor
the Administrator shall be liable if this Plan or any transaction under this Plan fails to comply with the applicable conditions of Rule 16b-3 or any successor rule thereto, or if any such person incurs any liability under Section 16 of the
Exchange Act. 

  
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	 	5.	GRANT OF OPTIONS; OPTION AGREEMENT 

 (a) No Options shall be granted under this Plan after ten (10) years from the date of adoption of this Plan by the Board. 
 (b) Each Option shall be evidenced by a written stock option agreement, in form satisfactory to the Company, executed by the Company and the person to whom such Option is granted; provided, however, that
the failure by the Company, the optionee, or both to execute such an agreement shall not invalidate the granting of an Option, although the exercise of each option shall be subject to Section 6.1.3. 

(c) The stock option agreement shall specify whether each Option it evidences is an NQO or an ISO. 

(d) Subject to Section 6.3.3 with respect to ISOs, the Administrator may approve the grant of Options under this Plan to persons
who are expected to become employees, directors or consultants of the Company, but are not employees, directors or consultants at the date of approval. 
  

	 	6.	TERMS AND CONDITIONS OF OPTIONS 

 Each Option granted under this Plan shall be subject to the terms and conditions set forth in Section 6.1. NQOs shall be also subject to the terms and conditions set forth in Section 6.2, but
not those set forth in Section 6.3. ISOs shall also be subject to the terms and conditions set forth in Section 6.3, but not those set forth in Section 6.2. 
 6.1. Terms and Conditions to Which All Options Are Subject. All Options granted under this Plan shall be subject to the following terms and conditions: 

6.1.1. Changes in Capital Structure. Subject to Section 6.1.2, if the stock of the Company is changed by reason of a stock
split, reverse stock split, stock dividend, or recapitalization, combination or reclassification, appropriate adjustments shall be made by the Board in (a) the number and class of shares of stock subject to this Plan and each Option outstanding
under this Plan, and (b) the exercise price of each outstanding Option; provided, however, that the Company shall not be required to issue fractional shares as a result of any such adjustments. Each such adjustment shall be subject to approval
by the Board in its sole discretion. 
 6.1.2. Corporate Transactions. In the event of the proposed dissolution or
liquidation of the Company, the Administrator shall notify each optionee at least 30 days prior to such proposed action. To the extent not previously exercised, all Options will terminate immediately prior to the consummation of such proposed
action. In the event of a merger or consolidation of the Company with or into another corporation or entity in which the Company does not survive, or in the event of a sale of all or substantially all of the assets of the Company in which the
stockholders of the Company receive securities of the acquiring entity or an affiliate thereof, all Options shall be assumed or equivalent options shall be substituted by the successor corporation (or other entity) or a parent or subsidiary of such
successor corporation (or other entity). If such successor does not agree to assume the Options or to substitute equivalent options therefor, unless the Administrator shall determine otherwise, the Options will expire upon such event. 

  
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 6.1.3. Time of Option Exercise. Subject to Section 5 and Section 6.3.4,
Options granted under this Plan shall be exercisable (a) immediately as of the effective date of the stock option agreement granting the Option, or (b) in accordance with a schedule related to the date of the grant of the Option, the date
of first employment, or such other date as may be set by the Administrator (in any case, the “Vesting Base Date”) and specified in the written stock option agreement relating to such Option; provided, however, that with respect to options
granted to employees who are not officers, directors or consultants, the right to exercise an Option must vest at the rate of at least 20% per year over five years from the date the option was granted. Options granted to officers, directors or
consultants may become fully exercisable, subject to reasonable conditions such as continued employment, at any time or during any period established by the Board of the Administrator in accordance with this Plan. In any case, no Option shall be
exercisable until a written stock option agreement in form satisfactory to the Company is executed by the Company and the optionee. 
 6.1.4. Option Grant Date. Except in the case of advance approvals described in Section 5(d), the date of grant of an Option under this Plan shall be the date as of which the Administrator
approves the grant. 
 6.1.5. Nonassignability of Option Rights. No Option granted under this Plan shall be assignable
or otherwise transferable by the optionee except by will or by the laws of descent and distribution. During the life of the optionee, an Option shall be exercisable only by the optionee. 

6.1.6. Payment. Except as provided below, payment in full, in cash, shall be made for all stock purchased at the time written
notice of exercise of an Option is given to the Company, and proceeds of any payment shall constitute general funds of the Company. At the time an Option is granted or exercised, the Administrator, in the exercise of its absolute discretion after
considering any tax or accounting consequences, may authorize anyone or more of the following additional methods of payment: 

(a) Acceptance of the optionee’s full recourse promissory note for all or part of the Option price, payable on such terms and
bearing such interest rate as determined by the Administrator (but in no event less than the minimum interest rate specified under the Code at which no additional interest would be imputed and in no event more than the maximum interest rate allowed
under applicable usury laws), which promissory note may be either secured or unsecured in such manner as the Administrator shall approve (including, without limitation, by a security interest in the shares of the Company); and 

(b) (b) Delivery by the optionee of Common Stock already owned by the optionee for all or part of the Option price, provided the value
(determined as set forth in Section 6.1.11) of such Common Stock is equal on the date of exercise to the Option price, or such portion thereof as the optionee is authorized to pay by delivery of such stock; provided, however, that if an
optionee has exercised any portion of any Option granted by the Company by delivery of Common Stock, the optionee may not, within six months following such exercise, exercise any Option granted under this Plan by delivery of Common Stock without the
consent of the Administrator. 

  
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 6.1.7. Termination of Employment. If for any reason other than death or disability,
an optionee ceases to be employed by the Company or any of its Affiliates (such event being called a “Termination”), Options held at the date of Termination (to the extent then exercisable) may be exercised in whole or in part at any time
within one (1) month of the date of such Termination, or such other period of not less than thirty (30) days after the date of such Termination as is specified in the Option Agreement (but in no event after the Expiration Date);
provided, that if such exercise of the Option would result in liability for the optionee under Section 16(b) of the Exchange Act, then such one-month period automatically shall be extended until the tenth (10th) day following the last
date upon which optionee has any liability under Section 16(b) (but in no event after the Expiration Date). If an optionee dies or becomes disabled (within the meaning of Section 22(e)(3) of the Code) while employed by the Company or an
Affiliate or within the period that the Option remains exercisable after Termination, Options then held (to the extent then exercisable) may be exercised, in whole or in part, by the optionee, by the optionee’s personal representative or by the
person to whom the Option is transferred by devise or the laws of descent and distribution, at any time within twelve (12) months after the death or twelve (12) months after the disability of the optionee, or such other period of not less
than six (6) months from the date of Termination as is specified in the Option Agreement (but in no event after the Expiration Date). For purposes of this Section 6.1.7, “employment” includes service as a director or as a
consultant. For purposes of this Section 6.1.7, an optionee’s employment shall not be deemed to terminate by reason of sick leave, military leave or other leave of absence approved by the Administrator, if the period of any such leave does
not exceed 90 days or, if longer, if the optionee’s right to reemployment by the Company or any Affiliate is guaranteed either contractually or by statute. 
 6.1.8. Repurchase of Stock. At the option of the Administrator, the stock to be delivered pursuant to the exercise of any Option granted to an employee, director or consultant under this Plan may
be subject to a right of repurchase in favor of the Company with respect to any employee, or director or consultant whose employment, or director or consulting relationship with the Company is terminated. Such right of repurchase shall be
either: 
 (a) at the Option exercise price and (i) shall lapse at the rate of at least 20% per year over five
years from the date the Option is granted (without regard to the date it was exercised or becomes exercisable), and must be exercised for cash or cancellation of purchase money indebtedness within 90 days after such termination of employment (or in
the case of securities issued upon exercise of options after the date of termination, within 90 days after the date of the exercise); or 
 (b) at the higher of the Option exercise price or the value (determined as set forth in Section 6.1.11) of the stock being repurchased on the date of termination, and must be exercised for cash or
cancellation of purchase money indebtedness within 90 days of termination of employment (or in the case of securities issued upon exercise of options after the date of termination, within 90 days after the date of exercise), and such right shall
terminate when the Company’s securities become publicly traded. 

  
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 In addition to the restrictions set forth in subparagraphs (a) and (b) above, the
shares held by an officer, director or consultant of the issuer or an affiliate of the issuer may be subject to additional or greater restrictions, at the discretion of the Board or the Administrator. 

Determination of the number of shares subject to any such right of repurchase shall be made as of the date the employee’s employment
by, director’s director-relationship with, or consultant’s consulting relationship with, the Company terminates, not as of the date that any Option granted to such employee, director or consultant is thereafter exercised. 

6.1.9. Withholding and Employment Taxes. At the time of exercise of an Option or at such other time as the amount of such
obligations becomes determinable (the “Tax Date”), the optionee shall remit to the Company in cash all applicable federal and state withholding and employment taxes. If authorized by the Administrator in its sole discretion after
considering any tax or accounting consequences, an optionee may elect to (i) deliver a promissory note on such terms as the Administrator deems appropriate, (ii) tender to the Company previously owned shares of Stock or other securities of
the Company, or (iii) have shares of Common Stock which are acquired upon exercise of the Option withheld by the Company to pay some or all of the amount of tax that is required by law to be withheld by the Company as a result of the exercise
of such Option, subject to the following limitations: 
 (a) Any election pursuant to clause (iii) above by an optionee
subject to Section 16 of the Exchange Act shall either (x) be made at least six months before the Tax Date and shall be irrevocable; or (y) shall be made in (or made earlier to take effect in) any ten-day period beginning on the third
business day following the date of release for publication of the Company’s quarterly or annual summary statements of earnings and shall be subject to approval by the Administrator, which approval may be given at any time after such election
has been made. In addition, in the case of (y), the Option shall be held at least six months prior to the Tax Date. 
 (b) Any
election pursuant to clause (ii) above, where the optionee is tendering Common Stock issued pursuant to the exercise of an Option, shall require that such shares be held at least six months prior to the Tax Date. 

Any of the foregoing limitations may be waived (or additional limitations may be imposed) by the Administrator, in its sole discretion,
if the Administrator determines that such foregoing limitations are not required (or that such additional limitations are required) in order that the transaction shall be exempt from Section 16(b) of the Exchange Act pursuant to Rule 16b-3, or
any successor rule thereto. In addition, any of the foregoing limitations may be waived by the Administrator, in its sole discretion, if the Administrator determines that Rule 16b-3, or any successor rule thereto, is not applicable to the exercise
of the Option by the optionee or for any other reason. 
 Any securities tendered or withheld in accordance with this
Section 6.1.9 shall be valued by the Company as of the Tax Date. 
 6.1.10. Other Provisions. Each Option granted
under this Plan may contain such other terms, provisions, and conditions not inconsistent with this Plan as may be 

  
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determined by the Administrator, and each ISO granted under this Plan shall include such provisions and conditions as are necessary to qualify the Option as an “incentive stock option”
within the meaning of Section 422 of the Code. If Options provide for a right of first refusal in favor of the Company with respect to stock acquired by employees, directors or consultants, such Options shall provide that the right of first
refusal shall terminate upon the earlier of (i) the closing of the Company’s initial registered public offering to the public generally, or (ii) the date ten years after the grant date as set forth in Section 6.1.4. 

6.1.11. Determination of Value. For purposes of the Plan, the value of Common Stock or other securities of the Company shall be
determined as follows: 
 (a) If the stock of the Company is listed on any established stock exchange or a national market
system, including without limitation the National Market System of the National Association of Securities Dealers, Inc. Automated Quotation System, its fair market value shall be the closing sales price for such stock or the closing bid if no sales
were reported, as quoted on such system or exchange (or the largest such exchange) for the date the value is to be determined (or if there are no sales for such date, then for the last preceding business day on which there were sales), as reported
in the Wall Street Journal or similar publication. 
 (b) If the stock of the Company is regularly quoted by a
recognized securities dealer but selling prices are not reported, its fair market value shall be the mean between the high bid and low asked prices for the stock on the date the value is to be determined (or if there are no quoted prices for the
date of grant, then for the last receding business day on which there were quoted prices). 
 (c) In the absence of an
established market for the stock, the fair market value thereof shall be determined in good faith by the Administrator, with reference to the Company’s net worth, prospective earning power, dividend-paying capacity, and other relevant factors,
including the goodwill of the Company, the economic outlook in the Company’s industry, the Company’s position in the industry and its management, and the values of stock of other corporations in the same or a similar line of business.

 6.1.12. Option Term. Subject to Section 6.3.5, no Option shall be exercisable more than ten years after the date
of grant, or such lesser period of time as is set forth in the stock option agreement (the end of the maximum exercise period stated in the stock option agreement is referred to in this Plan as the “Expiration Date”). 

6.1.13. Exercise Price. The exercise price of any Option granted to any person who owns, directly or by attribution under the
Code, stock possessing more than ten percent of the total combined voting power of all classes of stock of the Company or of any Affiliate (a “Ten Percent Stockholder”) shall in no event be less than 110% of the fair market value
(determined in accordance with Section 6.1.11) of the stock covered by the Option at the time the Option is granted. 

  
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 6.2. Terms and Conditions to Which Only NQOs Are Subject. Options granted under this
Plan which are designated as NQOs shall be subject to the following terms and conditions: 
 6.2.1. Exercise Price.
Except as set forth in Section 6.1.13, the exercise price of a NQO shall be not less than 85% of the fair market value (determined in accordance with Section 6.1.11) of the stock subject to the Option on the date of grant. 

6.3. Terms and Conditions to Which Only ISOs Are Subject. Options granted under this Plan which are designated as ISOs shall be
subject to the following terms and conditions: 
 6.3.1. Exercise Price. Except as set forth in Section 6.1.13, the
exercise price of an ISO shall be determined in accordance with the applicable provisions of the Code and shall in no event be less than the fair market value (determined in accordance with Section 6.1.11) of the stock covered by the Option at
the time the Option is granted. 
 6.3.2. Disqualifying Dispositions. If stock acquired by exercise of an ISO granted
pursuant to this Plan is disposed of in a “disqualifying disposition” within the meaning of Section 422 of the Code, the holder of the stock immediately before the disposition shall promptly notify the Company in writing of the date
and terms of the disposition and shall provide such other information regarding the Option as the Company may reasonably require. 
 6.3.3. Grant Date. If an ISO is granted in anticipation of employment as provided in Section 5(d), the Option shall be deemed granted, without further approval, on the date the grantee assumes
the employment relationship forming the basis for such grant, and, in addition, satisfies all requirements of this Plan for Options granted on that date. 
 6.3.4. Vesting. Notwithstanding any other provision of this Plan, ISOs granted under all incentive stock option plans of the Company and its subsidiaries may not “vest” for more than
$100,000 in fair market value of stock (measured on the grant dates(s)) in any calendar year. For purposes of the preceding sentence, an option “vests” when it first becomes exercisable. If, by their terms, such ISOs taken together would
vest to a greater extent in a calendar year, and unless otherwise provided by the Administrator, ISOs with lower exercise prices shall vest before ISOs with higher exercise prices, regardless of the grant date. 

6.3.5. Term. Notwithstanding Section 6.1.12, no ISO granted to any Ten Percent Stockholder shall be exercisable more than
five years after the date of grant. 
  

	 	7.	MANNER OF EXERCISE 

 (a)
An optionee wishing to exercise an Option shall give written notice to the Company at its principal executive office, to the attention of the officer of the Company designated by the Administrator, accompanied by payment of the exercise price as
provided in Section 6.1.6. The date the Company receives written notice of an exercise hereunder accompanied by payment of the exercise price will be considered as the date such Option was exercised. 

  
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 (b) Promptly after receipt of written notice of exercise of an Option, the Company shall,
without stock issue or transfer taxes to the optionee or other person entitled to exercise the Option, deliver to the optionee or such other person a certificate or certificates for the requisite number of shares of stock. An optionee or permitted
transferee of an optionee shall not have any privileges as a stockholder with respect to any shares of stock covered by the Option until the date of issuance (as evidenced by the appropriate entry on the books of the Company or a duly authorized
transfer agent) of such shares. 
  

	 	8.	EMPLOYMENT OR CONSULTING RELATIONSHIP 

 Nothing in this Plan or any Option granted thereunder shall interfere with or limit in any way the right of the Company or of any of its Affiliates to terminate any optionee’s employment or
consulting at any time, nor confer upon any optionee any right to continue in the employ of, or consult with, the Company or any of its Affiliates. 
  

	 	9.	FINANCIAL INFORMATION 


The Company shall provide to each optionee during the period such optionee holds an outstanding Option, and to each holder of Common Stock
acquired upon exercise of Options granted under the Plan for so long as such person is a holder of such Common Stock, annual financial statements of the Company as prepared either by the Company or independent certified public accountants of the
Company. Such financial statements shall include, at a minimum, a balance sheet and an income statement, and shall be delivered as soon as practicable following the end of the Company’s fiscal year. 

 

	 	10.	CONDITIONS UPON ISSUANCE OF SHARES 

 Shares of Common Stock shall not be issued pursuant to the exercise of an Option unless the exercise of such Option and the issuance and delivery of such shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of 1933, as amended (the “Securities Act”). 
  

	 	11.	NONEXCLUSIVITY OF THE PLAN. 

 The adoption of the Plan shall not be construed as creating any limitations on the power of the Company to adopt such other incentive arrangements as it may deem desirable, including, without limitation,
the granting of stock options other than under the Plan. 
  

	 	12.	MARKET STANDOFF 

 Each
Optionee, if so requested by the Company or any representative of the underwriters in connection with any registration of the offering of any securities of the company under the Securities Act shall not sell or otherwise transfer any shares of
Common Stock acquired upon exercise of Options during the 180-day period following the effective date of a registration statement of the company filed under the Securities Act; provided, however, that such restriction shall apply only to the first
two registration statements of the Company to become effective under the Securities Act which includes securities to be sold on behalf of the Company to the public in an underwritten public offering under the Securities Act. The Company may impose
stop-transfer instructions with respect to securities subject to the foregoing restriction until the end of such 180-day period. 

  
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	 	13.	AMENDMENTS TO PLAN 

 The
Board may at any time amend, alter, suspend or discontinue this Plan. Without the consent of an optionee, no amendment, alteration, suspension or discontinuance may adversely affect outstanding Options except to conform this Plan and ISOs granted
under this Plan to the requirements of federal or other tax laws relating to incentive stock options. No amendment, alteration, suspension or discontinuance shall require stockholder approval unless (a) stockholder approval is required to
preserve incentive stock option treatment for federal income tax purposes, or (b) the Board otherwise concludes that stockholder approval is advisable. 
  

	 	14.	EFFECTIVE DATE OF PLAN 


This Plan shall become effective upon adoption by the Board provided, however, that no Option shall be exercisable unless and until
written consent of the stockholders of the Company, or approval of stockholders of the Company voting at a validly called stockholders’ meeting, is obtained within 12 months after adoption by the Board. If such stockholder approval is not
obtained within such time, Options granted hereunder shall terminate and be of no force and effect from and after expiration of such 12-month period. Options may be granted and exercised under this Plan only after there has been compliance with all
applicable federal and state securities laws. 
 Plan adopted by the Board of Directors on November 8, 1996. 

Plan approved by Stockholders April 15, 1997. 

  
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