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ex108czwiform10k.htm

Exhibit 10.8

CITIZENS COMMUNITY BANCORP

2004 STOCK OPTION AND INCENTIVE PLAN

INCENTIVE STOCK OPTION AGREEMENT

 

ISO NO.

 

This option is granted on ______________, (the “Grant Date”), by Citizens Community Bancorp (the “Corporation”), to ___________ (the “Optionee”), in accordance with the following terms and conditions:

1. Option Grant and Exercise Period. The Corporation hereby grants to the Optionee an Incentive Stock Option ("Option") to purchase, pursuant to the Citizens Community Bancorp 2004 Stock Option and Incentive Plan, as the same may be amended from time to time (the "Plann), and upon the terms and conditions therein and hereinafter set forth, an aggregate of _ shares (the Option Shares") of the common stock of the Corporation ("Common Stock") at the price of $ per share (the "Exercise Price"). A copy of the Plan, as currently in effect, is incorporated herein by reference and is attached to this Award Agreement.

 

This Option shall be exercisable only during the period (the "Exercise Period") commencing on the dates set forth in Section 2 below, and ending at 5:00 p.m., Eau Claire, Wisconsin time, on the date ten years after the Grant Date, such later time and date being hereinafter referred to as the "Expiration Date," subject to earlier expiration in accordance with Section 5 in the event of a Termination of Service. The aggregate Market Value (as determined on the Grant Date) of the Option Shares with respect to which Incentive Stock Options are exercisable for the first time by the Optionee in any calendar year shall not exceed One Hundred Thousand Dollars ($100,000.00). To the extent that this Option does not qualify as an Incentive Stock Option for any reason, it shall be deemed ab initio to be a Non-Qualified Stock Option.

 

2. Method of Exercise of This Option. This Option may be exercised during the Exercise Period, with respect to not more than the cumulative number of Option Shares set forth below on or after the dates indicated, by giving written notice to the Corporation as hereinafter provided specifying the number of Option Shares to be purchased. The number of Option Shares that are exercisable on a particular date pursuant to this Section 2 shall not be accelerated by the Committee (as defined in the Plan) except in connection with a change in control as set forth in Section 9 of this Award Agreement, or in the event of the death or disability of the Optionee or the allowance of such acceleration by applicable OTS regulations.

 

Cumulative Number of Option 

 

Shares Exercisable                                                                                        Date

[Vesting is over 5 years or more and no more

   than 20% of shares may vest per year.]

 

The notice of exercise of this Option shall be in the form prescribed by the Committee referred to in Section 3 of the Plan and directed to the address set forth in Section 12 below. The date of exercise is the date on which such notice is received by the Corporation. Such notice shall be accompanied by payment in full of the Exercise Price for the Option Shares to be purchased upon such exercise. Payment shall be made (i) in cash, which may be in the form of a check, money order, cashier's check or certified check, payable to the Corporation, or (ii) by delivering shares of Common Stock already owned by the Optionee having a Market Value equal to the Exercise Price, or (iii) a combination of cash and such shares. Promptly after such payment, subject to Section 3 below, the Corporation shall issue and deliver to the Optionee or other person exercising this Option a certificate or certificates representing the shares of Common Stock so purchased, registered in the name of the Optionee (or such other person), or, upon request, in the name of the Optionee (or such other person) and in the name of another in such form of joint ownership as requested by the Optionee (or such other person) pursuant to applicable state law.

 

 

  

  

  

3.   Delivery and Registration of Shares of Common Stock. The Corporation's obligation to deliver shares of Common Stock hereunder shall, if the Committee so requests, be conditioned upon the Optionee's compliance with the terms and provisions of Section 11 of the Plan.

 

4.   Non-transferability of This Option. This Option may not be assigned, encumbered, transferred, pledged or hypothecated except, in the event of the death of the Optionee, by will or the applicable laws of descent and distribution to the extent provided in Section 5 below. This Option is exercisable during the Optionee's lifetime only by the Optionee or a person acting with the legal authority of the Optionee. The provisions of this Option shall be binding upon, inure to the benefit of and be enforceable by the parties hereto, the successors and assigns of the Corporation and any person acting with the legal authority of the Optionee or to whom this Option is transferred by will or by the laws of descent and distribution.

 

5.   Termination of Service or Death of the Optionee. Except as provided in this Section 5 and Section 9 below, and notwithstanding any other provision of this Option to the contrary, this Option shall be exercisable only if the Optionee has not incurred a Termination of Service at the time of such exercise.

 

If the Optionee incurs a Termination of Service for any reason excluding death and Termination of Service for Cause, the Optionee may, but only within the period of three months (or one year in the case of disability, as defined in Section 22(e)(3) of the Code) immediately succeeding such Termination of Service and in no event after the Expiration Date, exercise this Option to the extent the Optionee was entitled to exercise this Option on the date of Termination of Service. If the Optionee incurs a Termination of Service for Cause, all rights under this Option shall expire immediately upon the giving to the Optionee of notice of his termination, except as provided in Section 9 below.

 

In the event of the death of the Optionee prior to the Optionee's Termination of Service or during the three-month period referred to in the immediately preceding paragraph, the person or persons to whom the Option has been transferred by will or by the laws of descent and distribution may, but only to the extent the Optionee was entitled to exercise this Option on the date of the Optionee's death, exercise this Option at any time within one year following the death of the Optionee, but in no event after the Expiration Date. Following the death of the Optionee, the Committee may, in its sole discretion, as an alternative means of settlement of this Option, elect to pay to the person to whom this Option is transferred by will or by the laws of descent and distribution, the amount by which the Market Value per share of Common Stock on the date of exercise of this Option shall exceed the Exercise Price per Option Share, multiplied by the number of Option Shares with respect to which this Option is properly exercised. Any such settlement of this Option shall be considered an exercise of this Option for all purposes of this Option and of the Plan.

 

 

  

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6.   Notice of Sale. The Optionee or any person to whom the Option Shares shall have been transferred shall promptly give notice to the Corporation in the event of the sale or other disposition of Option Shares within the later of (i) two years from the Grant Date or (ii) one year from the date of exercise of this Option. Such notice shall specify the number of Option Shares sold or otherwise disposed of and be directed to the address set forth in Section 12 below.

 

7.   Adjustments for Changes in Capitalization of the Corporation. In the event of any change in the outstanding shares of Common Stock by reason of any recapitalization, stock split, reverse stock split, stock dividend, reorganization, consolidation, combination or exchange of shares, merger, or any other change in the corporate structure of the Corporation or in the shares of Common Stock, the number and class of shares covered by this Option and the Exercise Price shall be appropriately adjusted by the Committee, whose determination shall be conclusive.

 

8.   Effect of Merger or Other Reorganization. In the event of any merger, consolidation or combination of the Corporation with or into another corporation (other than a merger, consolidation or combination in which the Corporation is the continuing corporation and which does not result in the outstanding shares of Common Stock being converted into or exchanged for different securities, cash or other property, or any combination thereof), the Optionee shall have the right (subject to the provisions of the Plan and the limitations contained herein), thereafter and during the Exercise Period, to receive upon exercise of this Option an amount equal to the excess of the Market Value on the date of such exercise of the securities, cash or other property, or combination thereof, receivable upon such merger, consolidation or combination in respect of a share of Common Stock over the Exercise Price, multiplied by the number of Option Shares with respect to which this Option shall have been exercised. Such amount may be payable fully in cash, fully in one or more of the kind or kinds of property payable in such merger, consolidation or combination, or partly in cash and partly in one or more of such kind or kinds of property , all in the discretion of the Committee.

 

9.   Effect of Change in Control. If a tender offer or exchange offer for shares of the Corporation (other than such an offer by the Corporation) is commenced, or if a Change in Control shall occur, and the Optionee thereafter incurs a Termination of Service for any reason whatsoever, this Option shall (to the extent it is not then exercisable) become exercisable in full upon the happening of such events; provided, however> that this Option shall not become exercisable to the extent that it has previously been exercised or otherwise terminated.

 

10.   Stockholder Rights Not Granted by This Option. The Optionee is not entitled by virtue hereof to any-rights of a stockholder of the Corporation or to notice of meetings of stockholders or to notice of any other proceedings of the Corporation.

11.   Withholding Tax. Where the Optionee or another person is entitled to receive Option Shares pursuant to the exercise of this Option, the Corporation shall have the right to require the Optionee or such other person to pay to the Corporation the amount of any taxes which the Corporation or any of its Affiliates is required to withhold with respect to such Option Shares or in lieu thereof to retain, or sell without notice a sufficient number of such shares to cover the amount required to be withheld or in lieu of any of the foregoing to withhold a sufficient sum from the Optionee's compensation payable by the Corporation to satisfy the Corporation's tax withholding requirements.

12.   Notices. All notices to the Corporation shall be delivered or mailed to it addressed to the Secretary of Citizens Community Bancorp, 2174 Eastridge Center, Eau Claire, Wisconsin 54701. Any notices hereunder to the Optionee shall be delivered personally or mailed to the Optionee's address noted below. Such addresses for the service of notices may be changed at any time provided written notice of the change is furnished in advance to the Corporation or to the Optionee as the case may be.

 

 

  

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13.   Plan and Plan Interpretations as Controlling. This Option and the terms and conditions herein set forth are subject in all respects to the terms and conditions of the Plan which are controlling. Capitalized terms used herein which are not defined in this Award Agreement shall have the meaning ascribed to such terms in the Plan. All determinations and interpretations made in the discretion of the Committee shall be final and conclusive upon the Optionee or his legal representatives with regard to any question arising hereunder or under the Plan.

14.   Optionee Service. Nothing in this Option shall limit the right of the Corporation or any of its Affiliates to terminate the Optionee's service as a director, advisory director or employee or otherwise impose upon the Corporation or any of its Affiliates any obligation to employ or accept the services of the Optionee.

15.   Amendment. Except as prohibited by OTS regulations, the Committee may waive any conditions for rights of the Corporation or modify or amend the terms of this A ward Agreement; provided; however, that the Committee may not amend, alter, suspend discontinue or terminate any provision hereof which may adversely affect the Optionee without the Optionee's (or his legal representative's) written consent.

16.   Optionee Acceptance. The Optionee shall signify his acceptance of the terms and conditions of this Option by signing in the space provided below and returning a signed copy hereof to the Corporation at the address set forth in Section 12 above.

 

IN WITNESS WHEREOF, the parties hereto have caused this Award Agreement to be executed as of the date first above written.

 

CITIZENS COMMUNITY BANCORP

 

By:

Its:

ACCEPTED:

(Signature)

(Street Address)

(City, State and Zip Code)

 

 

4Exhibit 10.1

 

SUPERNUS PHARMACEUTICALS, INC.

2005 STOCK PLAN, AS OF DECEMBER 22, 2005

(PURSUANT TO BOARD RESOLUTION

AND SHAREHOLDER CONSENT AS OF DECEMBER 21, 2005)

 

1.             Purpose

 

The purpose of this plan (this “Plan”) is to secure for Supernus Pharmaceuticals, Inc. (the “Company”), and its shareholders the benefits arising from capital stock ownership by employees, officers and directors of, and consultants or advisors to, the Company and its parent and subsidiary corporations who are expected to contribute to the Company’s future growth and success. Except where the context otherwise requires, the term “Company” shall include the parent and all present and future subsidiaries of the Company as defined in Sections 424(e) and 424(f) of the Internal Revenue Code, as amended or replaced from time to time (the “Code”). Those provisions of this Plan which make express reference to Section 422 of the Code shall apply only to Incentive Stock Options (as that term is defined in this Plan).

 

2.             Type of Options and Grants; Administration

 

(a)           Types of Options. Options granted pursuant to this Plan (“Options”) shall be authorized by the board of directors of the Company (the “Board of Directors”), or the Committee, as defined below, and may be either incentive stock options issued in accordance with Section 422 of the Code (“Incentive Stock Options”) or non-statutory options which are not intended to meet the requirements of Section 422 of the Code (“Non-Qualified Options”).

 

(b)           Purchase Rights. Pursuant to this Plan, eligible persons may be granted opportunities to make direct purchases of the Company’s Common Stock (“Purchase Rights”). Purchase Rights shall be authorized by the Board of Directors or the Committee, as defined below.

 

(c)           Awards. Pursuant to this Plan, eligible persons may be granted awards of the Company’s common stock (“Awards”). Awards shall be authorized by the Board of Directors or the Committee, as defined below.

 

(d)           Granting of An Option, Purchase Right or Award. Options, Purchase Rights and Awards may be granted under this Plan at any time on or after December 22, 2005 and prior to December 23, 2015, but in no event, unless otherwise decided by the Board, shall grants made during this time period have an exercise period greater than ten years commencing from the date of grant. The date of grant of an Option, a Purchase Right or an Award under this Plan will be the date specified by the Board of Directors at the time it grants such Option, Purchase Right or Award, except that such date shall not be prior to the date on which the Board of Directors approves the grant.

 

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(e)           Administration.

 

(i)            This Plan will be administered by the Board of Directors, and its construction and interpretation of the terms and provisions of this Plan shall be final and conclusive. The Board of Directors may in its sole discretion (A) grant options to purchase shares of the Company’s Common Stock, and issue shares upon exercise of such Options as provided in this Plan, (B) grant Purchase Rights and issue shares upon the exercise of such Purchase Rights, and (C) grant Awards and issue shares pursuant to such Awards. Subject to the express provisions of this Plan, the Board of Directors shall have authority to construe the respective option agreements and this Plan; to prescribe, amend and rescind rules and regulations relating to this Plan; to determine the terms and provisions of the respective option agreements, which need not be identical; and to make all other determinations, in the judgment of the Board of Directors, that may be necessary or desirable for the administration of this Plan. The Board of Directors may correct any defect or supply any omission or reconcile any inconsistency in this Plan or in any option agreement, purchase agreement or other agreement in the manner and to the extent it shall deem expedient to carry this Plan into effect; and it shall be the sole and final judge of such expediency. No director or person acting pursuant to authority delegated by the Board of Directors shall be liable for any action or determination under this Plan made in good faith. To the full extent permitted by or consistent with applicable laws or regulations (including, without limitation, applicable state law and Rule 16b-3 promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”) or any successor rule (“Rule 16b-3”)), the Board of Directors may delegate any or all of its powers under this Plan to a committee (the “Committee”) appointed by the Board of Directors. If a Committee is so appointed, all references in this Plan to the Board of Directors shall mean and relate to such Committee.

 

(ii)           Committee Action. The Committee may select one of its members as its chair, and shall hold meetings at such time and places as it may determine. Acts by a majority of the members of the Committee, or acts reduced to or approved in writing by a majority of the members of the Committee, shall be valid acts of the Committee. All references in this Plan to the Committee shall mean the Board of Directors if no Committee has been appointed. From time to time, the Board of Directors may increase the size of the Committee and appoint additional members thereof, remove members (with or without cause) and appoint new members in substitution therefor, fill vacancies however caused, or remove all members of the Committee and thereafter directly administer this Plan.

 

(iii)          Grant of Options, Purchase Rights and Awards to Members of the Board of Directors. Options, Purchase Rights and Awards may be granted to members of the Board of Directors consistent with the provisions of paragraph 2(e)(i), if applicable. All grants of Options, Purchase Rights and Awards made to members of the Board of Directors shall be made in all other respects in accordance with the provisions of this Plan applicable to other eligible persons. Consistent with the provisions of paragraph 2(e)(i), members of the Board of Directors who are either (A) eligible for Options, Purchase Rights or Awards or (B) have been granted Options, Purchase Rights or Awards may vote on any matters affecting the administration of this Plan or on the grant, other

 

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than a grant to himself, of any Option, Purchase Right or Award. Notwithstanding that, any such member may be counted in determining the existence of a quorum at any meeting of the Board of Directors during which action may be taken with respect to the grant to him of any Option, Purchase Right or Award.

 

(f)            Applicability of Rule 16b-3. Those provisions of this Plan which make express reference to Rule 16b-3 shall apply only to those persons who are required to file reports under Section 16(a) of the Exchange Act (a “Reporting Person”).

 

3.             Eligibility

 

(a)           General. Options, Purchase Rights and Awards may be granted to persons who, at the time of grant or award, are employees, officers or directors of, or consultants or advisors to, the Company, provided that the class of employees eligible to receive Incentive Stock Options shall be limited to employees of the Company eligible to receive Incentive Stock Options under the Code. A person who has been granted an Option, Purchase Right or Award, if he or she is otherwise eligible, may be granted additional Options, Purchase Rights or Awards if the Board of Directors shall so determine.

 

(b)         Grants to Directors and Officers. From and after the registration of the Common Stock of the Company under the Exchange Act, an Option, Purchase Right or Award may be granted to a director or an officer of the Company (as the terms “director” and “officer” are defined for purposes of Rule 16b-3) only if the timing of such grant, the exercise price or the purchase price of such Option, Purchase Right or Award and the number of shares subject to such Option, Purchase Right or Award is determined either (A) by the full Board of Directors, or (B) by a Committee that is composed solely of two or more Non-Employee Directors (as hereinafter defined). For the purposes of this Plan, a director shall be deemed to be a “Non- Employee Director” only if such person qualifies as a “Non-Employee Director” within the meaning of Rule 16b-3, as such term is interpreted from time to time.

 

4.             Stock Subject to Plan

 

Subject to adjustment as provided in paragraph 15, the maximum number of shares of Common Stock of the Company which may be issued and sold under this Plan is 8,000,000 shares. If an Option, Purchase Right or Award granted under this Plan shall expire or terminate for any reason without having been exercised in full, the unpurchased shares subject to such Option, Purchase Right or Award shall be available for subsequent grants under this Plan. If shares issued upon exercise of an Option, Purchase Right or Award under this Plan are accepted by the Company when tendered in payment of the exercise price of an Option, Purchase Right or Award granted under this Plan, such shares shall be available for subsequent grants under this Plan, except that in no event shall (A) the total number of shares issued pursuant to the exercise of Incentive Stock Options under this Plan, on a cumulative basis, exceed the maximum number of shares authorized for issuance under this Plan exclusive of shares made available for issuance pursuant to this sentence or (B) the total number of shares issued pursuant to the exercise of Options, Purchase Rights or Awards by Reporting Persons, on a cumulative basis, exceed the

 

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maximum number of shares authorized for issuance under this Plan exclusive of shares made available for issuance pursuant to this sentence.

 

5.             Forms of Agreements

 

As a condition to the grant of an Option, Purchase Right or Award under this Plan, each recipient of such grant shall execute an option agreement, purchase agreement, stock restriction agreement or other agreement in such form not inconsistent with this Plan as may be approved by the Board of Directors. Such agreements may differ among recipients.

 

6.             Purchase Price

 

(a)           General. The purchase price per share of stock deliverable upon the exercise of an Option, Purchase Right or Award shall be determined by the Board of Directors, provided that, in the case of an Incentive Stock Option, the exercise price shall not be less than 100% of the fair market value of such stock, as determined by the Board of Directors, at the time of grant of such option, or less than 110% of such fair market value in the case of options described in paragraph 11(b).

 

(b)           Payment of Purchase Price. Options, Purchase Rights or Awards granted under this Plan may provide for the payment of the exercise price by delivery of cash or a check to the order of the Company in an amount equal to the exercise price of such Options, Purchase Rights or Awards, or, to the extent provided in the applicable option agreement, (A) by delivery to the Company of shares of Common Stock of the Company already owned by the grant holder having a fair market value equal in amount to the exercise price of the Options, Purchase Rights or Awards being exercised, (B) at the discretion of the Board of Directors and consistent with applicable law, through the delivery of an assignment to the Company of a sufficient amount of the proceeds from the sale of the Common Stock acquired upon exercise of an Option, Purchase Right or Award and an authorization to the broker or selling agent to pay that amount to the Company, which sale shall be at the grant holder’s direction at the time of exercise, (C) by any other means (including, without limitation, by delivery of a promissory note of the grant holder payable on such terms as are specified by the Board of Directors) which the Board of Directors determines are consistent with the purpose of this Plan and with applicable laws and regulations (including, without limitation, the provisions of Rule 16b-3 and Regulation T promulgated by the Federal Reserve Board) or (D) by any combination of such methods of payment. The fair market value of any shares of Common Stock or other non-cash consideration which may be delivered upon exercise of an Option, Purchase Right or Award shall be determined by the Board of Directors.

 

(c)           Determination of Fair Market Value. If, at the time an Option, Purchase Right or Award is granted, Common Stock is publicly traded, “fair market value” shall be determined as of the date of grant or, if the prices or quotes discussed in this sentence are unavailable for such date, the last business day for which such prices or quotes are available prior to the date such Option, Purchase Right or Award is granted; and shall mean (A) the average (on that date) of the high and low prices of the Common Stock on the principal national securities exchange on which

 

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the Common Stock is traded, if the Common Stock is then traded on a national securities exchange; or (B) the last reported sale price (on that date) of the Common Stock on the Nasdaq Stock Market, if the Common Stock is not then traded on a national securities exchange; or (C) the average of the closing bid and asked prices last quoted (on that date) by an established quotation service for over-the-counter securities, if the Common Stock is not reported on the Nasdaq Stock Market. If the Common Stock is not publicly traded at the time an Option, Purchase Right or Award is granted, “fair market value” shall be deemed to be the fair value of the Common Stock as determined by the Board of Directors after taking into consideration all factors which it deems appropriate, including, without limitation, recent sale and offer prices of the Company’s capital stock in private transactions negotiated at arm’s length.

 

7.             Exercise Period

 

Each Option, Purchase Right or Award and all rights thereunder shall expire on such date as shall be set forth in the applicable agreement, except that, in the case of an Incentive Stock Option, such date shall not be later than ten years after the date on which the option is granted. In all cases, options shall be subject to earlier termination as provided in this Plan.

 

8.             Exercise of Options, Purchase Rights or Awards

 

Each Option, Purchase Right or Award granted under this Plan shall be exercisable either in full or in installments at such time or times and during such period as shall be set forth in the agreement evidencing such Option, Purchase Right or Award, subject to the provisions of this Plan.

 

9.             Nontransferability of Options

 

Incentive Stock Options, and all other Options granted to Reporting Persons, shall not be assignable or transferable by the grant holder, either voluntarily or by operation of law, except by will or the laws of descent and distribution, and, during the life of the grant holder, shall be exercisable only by the grant holder, except that Non-Qualified Options may be transferred pursuant to a qualified domestic relations order (as defined in the Code).

 

10.           Effect of Termination of Employment or Other Relationship

 

(a)           Except as provided in paragraph 11(d) or 10(b) as to Incentive Stock Options, and subject to the provisions of this Plan, the Board of Directors shall determine the period of time during which a grant holder may exercise an Option, Purchase Right or Award following (A) the termination of the holder’s employment or other relationship with the Company or (B) the death or disability of the holder. Such periods shall be set forth in the agreement evidencing such Option, Purchase Right or Award.

 

(b)           Subject to paragraphs 11(d) and 25, if a holder of an Incentive Stock Option ceases to be employed by the Company other than by reason of death or disability, as defined in paragraph 11(d), no further installments of his Incentive Stock Options shall become exercisable; and his Incentive Stock Options shall terminate after the passage of three (3) months from the date of

 

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termination of his employment, but in no event later than on their specified expiration dates, except to the extent that such Incentive Stock Options (or unexercised installments thereof) have been converted into Non-Qualified Options pursuant to paragraph 22. Employment shall be considered as continuing uninterrupted during any bona fide leave of absence (such as those attributable to illness, military obligations or governmental service), provided that such leave does not exceed ninety (90) days or such longer period during which such holder’s right to reemployment is guaranteed by statute. A bona fide leave of absence with the written approval of the Board of Directors shall not be considered an interruption of employment under this Plan, provided that such written approval contractually obligates the Company to continue the employment of such holder after the approved period of absence. Incentive Stock Options granted under this Plan shall not be affected by any change of employment within or among the Company, so long as such holder continues to be an employee of the Company. Nothing in this Plan shall be deemed to give any holder of any Option, Purchase Right or Award the right to be retained in employment or other service by the Company for any period of time.

 

11.           Incentive Stock Options

 

Options granted under this Plan which are intended to be Incentive Stock Options shall be subject to the following additional terms and conditions:

 

(a)           Express Designation. All Incentive Stock Options granted under this Plan shall be specifically designated as such, at the time of grant, in the option agreement covering such Incentive Stock Options.

 

(b)           10% Shareholder. If any employee to whom an Incentive Stock Option is to be granted under this Plan is the owner, at the time of the grant of such option, of stock possessing more than 10% of the total combined voting power of all classes of stock of the Company (after taking into account the attribution of stock ownership rules of Section 424(d) of the Code), then (A) the purchase price per share of the Common Stock subject to such Incentive Stock Option shall not be less than 110% of the fair market value of one share of Common Stock at the time of grant; and (B) the option exercise period shall not exceed five years from the date of grant.

 

(c)           Dollar Limitation. For so long as the Code shall so provide, Options granted to any employee under this Plan (and any other incentive stock option plans of the Company) which are intended to constitute Incentive Stock Options shall not constitute Incentive Stock Options to the extent that such Options, in the aggregate, become exercisable for the first time in any one calendar year for shares of Common Stock with an aggregate fair market value (determined as of the respective date or dates of grant) of more than $100,000.

 

(d)           Termination of Employment, Death or Disability. No Incentive Stock Option may be exercised unless, at the time of such exercise, the grant holder is, and has been continuously since the date of grant of his or her Option, employed by the Company, except that (A) an Incentive Stock Option may be exercised within the period of three (3) months after the date the grant holder ceases to be an employee of the Company (or within such lesser period as may be specified in the applicable option agreement), although the agreement with respect to

 

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such Option may designate a longer exercise period and may provide that the exercise after such three-month period shall be treated as the exercise of a Non-Qualified Option under this Plan; (B) if the grant holder dies while in the employ of the Company, or within three (3) months after the grant holder ceases to be such an employee, the Incentive Stock Option may be exercised by the person to whom it is transferred by will or the laws of descent and distribution within the period of twelve (12) months after the date of death (or within such lesser period as may be specified in the applicable option agreement); and (C) if the grant holder becomes disabled while in the employ of the Company, the Incentive Stock Option may be exercised within the period of one year after the date the grant holder ceases to be such an employee because of such disability (or within such lesser period as may be specified in the applicable option agreement). For the purposes of this Plan, the term “disabled” or “disability” shall mean “permanent and total disability” as defined in Section 22(e)(3) of the Code. For all purposes of this Plan and any Option granted hereunder, “employment” shall be defined in accordance with the provisions of Section 1.421-7(h) of the Income Tax Regulations (or any successor regulations). Notwithstanding the foregoing provisions, no Incentive Stock Option may be exercised after its expiration date.

 

12.           Additional Provisions

 

(a)           Additional Provisions. The Board of Directors, in its sole discretion, may include additional provisions in agreements covering Options, Purchase Rights or Awards granted under this Plan, including without limitation restrictions on transfer, repurchase rights, commitments to pay cash bonuses, to make, arrange for or guaranty loans or to transfer other property to grant holders upon exercise of Options, Purchase Rights or Awards, or such other provisions as shall be determined by the Board of Directors; provided that such additional provisions shall not be inconsistent with any other term or condition of this Plan and that such additional provisions shall not cause any Incentive Stock Option granted under this Plan to fail to qualify as an Incentive Stock Option within the meaning of Section 422 of the Code.

 

(b)           Acceleration, Extension, Etc.  The Board of Directors, in its sole discretion, may (A) accelerate the date or dates on which all or any particular Option, Purchase Right or Award granted under this Plan may be exercised or (B) extend the dates during which all, or any particular, Option, Purchase Right or Award granted under this Plan may be exercised, provided that no such extension shall be permitted (i) if it would cause this Plan to fail to comply with Section 422 of the Code or (ii) if it would cause such Option, Purchase Right or Award to fail to comply with Rule 16b-3.

 

13.           General Restrictions

 

(a)           Investment Representations. The Company may require any holder of a grant of an Option, Purchase Right or Award, as a condition of exercising such Option, Purchase Right or Award, to give written assurances, in substance and form satisfactory to the Company, to the effect that such holder is acquiring the Common Stock subject to the Option, Purchase Right or Award for his or her own account for investment and not with any present intention of selling or otherwise distributing the same, and to such other effect as the Company deems necessary or

 

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appropriate to comply with federal and applicable state securities laws or to comply with covenants or representations made by the Company in connection with any public offering of its Common Stock.

 

(b)           Compliance With Securities Laws. Each Option, Purchase Right or Award shall be subject to the requirement that if counsel to the Company shall determine at any time that the listing, registration or qualification of the shares subject to such Option, Purchase Right or Award upon any securities exchange or under any state or federal law, or the consent or approval of any governmental or regulatory body, or the disclosure of non-public information or the satisfaction of any other condition is necessary as a condition of, or in connection with, the issuance or purchase of shares thereunder, such Option, Purchase Right or Award may not be exercised, in whole or in part, unless such listing, registration, qualification, consent, approval, disclosure or satisfaction shall have been effected or obtained on conditions acceptable to the Board of Directors. Nothing herein shall be deemed to require the Company to apply for or to obtain such listing, registration, qualification, consent or approval or to make such disclosure or to satisfy such condition.

 

(c)           Stock Restrictions on Underlying Stock.

 

Each Option, Purchase Right or Award shall be subject to the requirement that upon exercise, the underlying security exchanged for the Option, Purchase Right or Award shall be subject to certain restrictions, including but not limited to restrictions on transfer, drag along rights, and rights of first refusal as may be set forth in the by-laws of the Company and as more specifically set forth in a certain Stockholders Voting Agreement and certain Stock Restriction Agreement, by and between the Company and its shareholders, each dated on or about December 22, 2005 and as may be amended from time to time in the future. Each eligible person receiving an Option, Purchase Right or Award hereunder, agrees to be bound by these restrictions and further agrees, upon the request of the Company to execute any further documentation necessary to evidence said agreement including but not limited to executing an instrument of accession, as shall be provided by the Company, to each of the Stockholders Voting Agreement and Stock Restriction Agreement. An eligible person’s failure to execute same, at the Company’s request, shall cause the respective Option, Purchase Award or Award, and/or the underlying security to be immediately null and void. The Company shall be free to place a legend on the underlying security specifying these restrictions.

 

14.           Rights as a Shareholder

 

The holder of an Option, Purchase Right or Award shall have no rights as a shareholder with respect to any shares covered by the Option, Purchase Right or Award (including, without limitation, any rights to receive dividends or non-cash distributions with respect to such shares) until the date of issue of a stock certificate to him or her for such shares. No adjustment shall be made for dividends or other rights for which the record date is prior to the date such stock certificate is issued.

 

8

 

15.           Adjustment Provisions for Recapitalizations and Related Transactions

 

(a)           General. If, through or as a result of any merger, consolidation, sale of all or substantially all of the Company’s assets, reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar transaction, (A) the outstanding shares of Common Stock are increased, decreased or exchanged for a different number or kind of shares or other securities of the Company, or (B) additional shares or new or different shares or other securities of the Company or other non-cash assets are distributed with respect to such shares of Common Stock or other securities, an appropriate and proportionate adjustment may be made in (x) the maximum number and kind of shares reserved for issuance under this Plan, (y) the number and kind of shares or other securities subject to any then outstanding Options, Purchase Rights or Awards under this Plan, and (z) the price for each share subject to any then outstanding Options, Purchase Rights or Awards under this Plan, without changing the aggregate purchase price as to which such Options, Purchase Rights or Awards remain exercisable. Notwithstanding the foregoing, no adjustment shall be made pursuant to this paragraph 15 if such adjustment would cause this Plan to fail to comply with Section 422 of the Code or would cause any Option, Purchase Right or Award to fail to comply with Rule 16b-3.

 

(b)           Board Authority to Make Adjustments. Any adjustments under this paragraph 15 will be made by the Board of Directors, whose determination as to what adjustments, if any, will be made and the extent thereof will be final, binding and conclusive. No fractional shares will be issued under this Plan on account of any such adjustments.

 

16.           Merger, Consolidation, Asset Sale, Liquidation, etc.

 

(a)           General. In the event of a consolidation or merger or sale of all or substantially all of the assets of the Company in which outstanding shares of Common Stock are exchanged for securities, cash or other property of any other corporation or business entity (in each case, a “Sale Transaction”) or in the event of a liquidation of the Company, the Board of Directors of the Company, or the board of directors of any corporation assuming the obligations of the Company may take, in its discretion, any one or more of the following actions as to outstanding Options, Purchase Rights or Awards: (A) provide that such Options, Purchase Rights or Awards shall be assumed, or equivalent Options, Purchase Rights or Awards shall be substituted, by the acquiring or succeeding corporation (or an affiliate thereof), provided that any such Options substituted for Incentive Stock Options shall meet the requirements of Section 424(a) of the Code, (B) upon written notice to the grant holder provide that all unexercised Options, Purchase Rights or Awards will terminate immediately prior to the consummation of such Sale Transaction or liquidation unless exercised by the grant holder within a specified period following the date of such notice, (C) terminate all Options, Purchase Rights and Awards in exchange for a cash payment equal to the excess of the fair market value of the shares subject to such Options, Purchase Rights and Awards (to the extent then exercisable) over the exercise price thereof, (D) terminate all Options, Purchase Rights and Awards in exchange for the right to participate in any stock option or other employee benefit plan of any successor corporation (giving proper credit to any grantee of an Option, Purchase Right or Award for that portion of any Option, Purchase Right and Award which has otherwise vested and become exercisable prior to any such Sale

 

9

 

Transaction (E) in the event of a merger under the terms of which holders of the Common Stock of the Company will receive upon consummation thereof a cash payment for each share surrendered in the merger (the “Merger Price”), make or provide for a cash payment to the recipient equal to the difference between (x) the Merger Price times the number of shares of Common Stock subject to such outstanding Options, Purchase Rights or Awards (to the extent then exercisable at prices not in excess of the Merger Price) and (y) the aggregate exercise price of all such outstanding Options, Purchase Rights or Awards in exchange for the termination of such Options, Purchase Rights or Awards, or (F) provide that all or any portion of outstanding Options, Purchase Rights or Awards shall become exercisable in full immediately prior to such Sale Transaction or liquidation.

 

(b)           Substitute Options, Purchase Rights or Awards. The Company may grant Options, Purchase Rights or Awards under this Plan in substitution for Options, Purchase Rights or Awards held by employees of another corporation who become employees of the Company or a subsidiary of the Company as the result of a merger or consolidation of the employing corporation with the Company or a subsidiary of the Company, or as a result of the acquisition by the Company or by one of its subsidiaries of property or stock of the employing corporation. The Company may direct that substitute Options, Purchase Rights or Awards be granted on such terms and conditions as the Board of Directors considers appropriate in the circumstances.

 

(c)           Provisions Of This Paragraph 16 Not In Limitation of Specific Terms In Option, Purchase Right or Award Instruments. Notwithstanding subparagraphs (a) and (b) of this paragraph 16, if an instrument evidencing an Option, Purchase Right or Award shall provide for a result that is more favorable to the holder of such instrument than the actions permitted to be taken by the Board of Directors pursuant to subparagraph 16(a) upon the occurrence of any of the events set forth therein, such instrument shall control. Without limiting the foregoing but subject to the last sentence of subparagraph 16(a), the Board of Directors, in its discretion, may take any action that is more favorable to the holder of an Option, Purchase Right or Award than the provision which is provided in the instrument evidencing such Option, Purchase Right or Award.

 

17.           Modification of Incentive Stock Options

 

Notwithstanding paragraph 15 or 16, the Board of Directors may refrain, in its sole discretion, from making any adjustments made pursuant to paragraph 15 or 16 with respect to Incentive Stock Options if the Board of Directors, after consulting with counsel for the Company, shall determine that such adjustments would constitute a “modification” of such Incentive Stock Options (as that term is defined in Section 424 of the Code) or would cause any adverse tax consequences for the holders of such Incentive Stock Options.

 

18.           Dissolution or Liquidation

 

Except as otherwise provided in paragraph 16, if a dissolution or liquidation of the Company shall be proposed, each Option, Purchase Right and Award will terminate immediately 

 

10

 

prior to the consummation of such proposed action or at such other time
and subject to such other conditions as shall be determined by the Board of
Directors.

 

19.          Issuances of
Securities

 

Except as expressly provided herein, no issuance by
the Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall affect, and no adjustment by reason thereof
shall be made with respect to, the number or price of shares subject to
Options, Purchase Rights or Awards. No adjustments shall be made for dividends
paid in cash or in property other than securities of the Company.

 

20.          Fractional
Shares

 

No fractional shares shall be issued under this
Plan; and the holder of an Option, Purchase Right or Award shall receive from
the Company cash in lieu of the fair market value of such fractional shares.

 

21.          Conditions and
Restrictions

 

(a)           If any person
or entity owning restricted Common Stock obtained by exercise of an Option,
Purchase Right or Award made hereunder receives shares or securities or cash in
connection with a corporate transaction described in paragraph 15 or 16 as a
result of owning such restricted Common Stock, such shares or securities or
cash shall be subject to all of the conditions and restrictions applicable to
the restricted Common Stock including but not limited to those restrictions set
forth in Paragraph 13 herein with respect to which such shares or securities or
cash were issued, unless otherwise determined by the Board of Directors.

 

(b)           Each
shareholder agrees severally and not jointly, in connection with the
registration of the Company’s initial public offering (“IPO”) that, upon the
request of the Company and the underwriters managing such underwritten
offering, he or she will not sell, make any short sale of, loan, grant any
option for the purchase of, or otherwise dispose of any securities without the
prior written consent of the Company, for such period of time (not to exceed
one hundred and eighty (180) days) from the effective date of such registration
as the Company may specify.

 

22.          Conversion of
Incentive Stock Options into Non-Qualified Options; Termination of Incentive
Stock Options

 

The Board of Directors, at the written request or
with the written consent of any holder of an Incentive Stock Option, may take
such actions, in its discretion, as may be necessary to convert such holder’s
Incentive Stock Options (or any installments or portions of installments
thereof) that have not been exercised on the date of conversion into
Non-Qualified Options at any time prior to the expiration of such Incentive
Stock Options, regardless of whether the holder is an employee of the Company
at the time of such conversion. Such actions may include, but shall not be
limited to, extending the exercise period or reducing the exercise price of the

 

11

 

appropriate installments of such Incentive Stock Options. At the time
of such conversion, the Board of Directors (with the consent of the grantee)
may impose such conditions on the exercise of the resulting Non-Qualified
Options as the Board of Directors in its discretion may determine, provided
that such conditions shall not be inconsistent with this Plan. Nothing in this
Plan shall be deemed to give any holder the right to have such holder’s
Incentive Stock Options converted into Non-Qualified Options, and no such
conversion shall occur until and unless the Board of Directors shall take
appropriate action.

 

23.          Governmental
Regulation

 

The Company’s obligation to sell and deliver shares
of the Common Stock under this Plan is subject to the approval of any
governmental authority required in connection with the authorization, issuance
or sale of such shares.

 

24.          Notice to
Company of Disqualifying Disposition

 

By accepting an Incentive Stock Option granted under
this Plan, each holder of an Incentive Stock Option thereby agrees to notify
the Company in writing immediately after such holder makes a Disqualifying
Disposition of any Common Stock acquired pursuant to the exercise of an
Incentive Stock Option. Generally, a Disqualifying Disposition is any
disposition (including any sale) of such Common Stock occurring on or before
the later of the date (A) two years after the date the employee was
granted the Incentive Stock Option, or (B) one year after the date the
employee acquired Common Stock by exercising the Incentive Stock Option.

 

25.          No Exercise of
an Option, Purchase Right or Award if Engagement or Employment Terminated for
Cause

 

If the employment of a holder of an Option, Purchase
Right or Award is terminated for “Cause,” any Option, Purchase Right or Award
shall terminate on the date of such termination and such Option, Purchase Right
or Award shall thereupon not be exercisable to any extent whatsoever. “Cause”
is conduct by the holder, as determined by the Board of Directors, constituting
one or more of the following: (A) gross misconduct which is materially
injurious to the Company; or (B) the commission of an act of embezzlement,
fraud or deliberate disregard of the rules or policies of the Company
which results in material economic loss, damage or injury to the Company; or
(C) the unauthorized disclosure of any trade secret or confidential
information of the Company or any third party who has a business relationship
with the Company or the violation of any noncompetition covenant or assignment
of inventions obligation with the Company; or (D) the commission of any
act which induces any customer or prospective customer of the Company to break
a contract with the Company or to decline to do business with the Company; or
(E) the conviction of a felony involving any financial impropriety or
which would materially interfere with the holder’s ability to perform his or
her services for the Company or otherwise be injurious to the Company; or
(F) the failure to perform in a material respect his or her employment
obligations without proper cause. In making such determination, the Board of
Directors shall act fairly and in utmost good faith. For the purposes of this

 

12

 

paragraph 25, termination of employment shall be deemed to occur when
the grantee receives notice that his employment is terminated.

 

26.          No Special
Employment Rights

 

Nothing contained in this Plan or in any Option,
Purchase Right or Award shall confer upon any grant holder any right with
respect to the continuation of his or her employment by the Company or any
right to interfere in any way or at any time with the Company’s termination of
such employment or the Company’s increase or decrease of the compensation of
such holder.

 

27.          Other Employee
Benefits

 

Except as to plans which by their terms include such
amounts as compensation, the amount of any compensation deemed to be received
by an employee as a result of the exercise of an Option, Purchase Right or
Award or the sale of shares received upon such exercise will not constitute
compensation with respect to which any other employee benefits of such employee
are determined, including, without limitation, benefits under any bonus,
pension, profit-sharing, life insurance or salary continuation plan, except as
otherwise specifically determined by the Board of Directors.

 

28.          Amendment of
this Plan

 

(a)           The Board of
Directors, at any time and from time to time, may modify or amend this Plan in
any respect, except that if at any time the approval of the shareholders of the
Company is required under Section 422 of the Code or any successor
provision with respect to Incentive Stock Options the Board of Directors may
not effect such modification or amendment without such approval.

 

(b)           The termination
or any modification or amendment of this Plan shall not affect the rights of
any grant holder under an Option, Purchase Right or Award without the consent
of such holder. With the consent of the affected grant holder, the Board of
Directors may amend outstanding agreements governing an Option, Purchase Right
or Award in a manner not inconsistent with this Plan. The Board of Directors
shall have the right to amend or modify (A) the terms and provisions of
this Plan and of any outstanding Incentive Stock Options granted under this
Plan to the extent necessary to qualify any or all such Options for such
favorable federal income tax treatment (including deferral of taxation upon exercise)
as may be afforded incentive stock options under Section 422 of the Code
and (B) the terms and provisions of this Plan and of any outstanding
Options, Purchase Rights or Awards to the extent necessary to qualify any or
all such Options, Purchase Rights or Awards for an exemption under
Rule 16b-3.

 

29.          Withholding

 

(a)           The Company
shall have the right to deduct from payments of any kind otherwise due to any
grant holder any federal, state or local taxes of any kind required by law to
be withheld with respect to any shares issued upon exercise of Options,
Purchase Rights or Awards under this Plan. Subject to the prior approval of the
Company, which may be withheld by the

 

13

 

Company in its sole discretion, a grant holder may elect to satisfy
such obligations, in whole or in part, (A) by causing the Company to
withhold shares of Common Stock otherwise issuable pursuant to the exercise of
an Option, Purchase Right or Award or (B) by delivering to the Company
shares of Common Stock already owned by the holder. The shares so delivered or
withheld shall have a fair market value equal to such withholding obligation.
The fair market value of the shares used to satisfy such withholding obligation
shall be determined by the Company as of the date that the amount of tax to be
withheld is to be determined. A grant holder who has made an election pursuant
to this paragraph 29(a) may only satisfy his or her withholding obligation
with shares of Common Stock which are not subject to any repurchase,
forfeiture, unfulfilled vesting or other similar requirements.

 

(b)           Notwithstanding
the foregoing, in the case of a Reporting Person, no election to use shares for
the payment of withholding taxes shall be effective unless made in compliance
with any applicable requirements of Rule 16b-3.

 

30.          Cancellation
and New Grant of Options, Purchase Rights or Awards, Etc.

 

The Board of Directors shall have the authority to
effect, at any time and from time to time, with the consent of the affected
grant holders, (A) the cancellation of any or all outstanding Options,
Purchase Rights or Awards under this Plan and the grant in substitution
therefor of new Options, Purchase Rights or Awards under this Plan covering the
same or different numbers of shares of Common Stock and having an exercise
price per share which may be lower or higher than the exercise price per share
of the canceled Options, Purchase Rights or Awards or (B) the amendment of
the terms of any and all outstanding Options, Purchase Rights or Awards under
this Plan to provide an exercise price per share which is higher or lower than
the then-current exercise price per share of such outstanding Options, Purchase
Rights or Awards.

 

31.          Effective Date
and Duration of this Plan

 

(a)           Effective Date. This Plan
shall become effective when adopted by the Board of Directors, but no Incentive
Stock Option granted under this Plan shall become exercisable unless and until
this Plan shall have been approved by the Company’s shareholders. If such
shareholder approval is not obtained within twelve months after such adoption,
no Options previously granted under this Plan shall be deemed to be Incentive
Stock Options and no Incentive Stock Options shall be granted thereafter.
Amendments to this Plan not requiring shareholder approval shall become
effective when adopted by the Board of Directors; amendments requiring
shareholder approval (as provided in paragraph 28) shall become effective when
adopted by the Board of Directors, but no Incentive Stock Option granted after
the date of such amendment shall become exercisable (to the extent that such
amendment to this Plan was required to enable the Company to grant such
Incentive Stock Option to a particular grant holder) unless and until such
amendment shall have been approved by the Company’s shareholders. If such
shareholder approval is not obtained within twelve months of such adoption, any
Incentive Stock Options granted on or after the date of such amendment shall
terminate to the extent that such amendment to this Plan was required to enable
the Company to grant such Option to a particular grant holder.

 

14

 

Subject to this limitation, Options, Purchase Rights or Awards may be
granted under this Plan at any time after the effective date and before the
date fixed for termination of this Plan.

 

(b)           Termination. Unless sooner
terminated in accordance with paragraph 16, this Plan shall terminate, with
respect to Incentive Stock Options only, upon the earlier of (A) the close
of business on the day next preceding the tenth anniversary of the date of its
adoption, by the Board of Directors, or (B) the date on which all shares
available for issuance under this Plan shall have been issued pursuant to the
exercise or cancellation of Options granted under this Plan. Unless sooner
terminated in accordance with paragraph 16, this Plan shall terminate with
respect to Options, Purchase Rights or Awards which are not Incentive Stock
Options on the date specified in (B) above. If the date of termination is
determined under (A) above, then Options, Purchase Rights or Awards
outstanding on such date shall continue to have force and effect in accordance
with the provisions of the instruments evidencing such Options, Purchase Rights
or Awards.

 

32.          Provision for
Foreign Participants

 

The Board of Directors, without amending this Plan,
may modify Options, Purchase Rights or Awards granted to foreign nationals or
persons employed outside the United States to take into account differences in
laws, rules, regulations or customs of such foreign jurisdictions with respect
to tax, securities, currency, employee benefit or other matters.

 

15

 

SUPERNUS PHARMACEUTICALS, INC.

 

INCENTIVE
STOCK OPTION AGREEMENT

 

1.             Grant of Option.                                                   ,
a Delaware corporation (the “Company”) hereby grants to                          ,
an individual whose address is set forth below the optionee signature line (the
“Optionee”), an option, pursuant to the Company’s 2005 Stock Plan as of
December 22, 2005 (the “Plan”), to purchase an aggregate of                          shares
of common stock of the Company (“Common Stock”) at a price of $.                    per
share, purchasable as set forth in and subject to the terms and conditions of
this option and the Plan. Except where the context otherwise requires, the term
“Company” shall include the parent and all present and future subsidiaries of
the Company as defined in Sections 424(e) and 424(f) of the Internal
Revenue Code of 1986, as amended or replaced from time to time (the “Code”).

 

2.             Incentive Stock
Option. This option is intended to qualify as an incentive stock option
(“Incentive Stock Option”) within the meaning of Section 422 of the Code.
Any provision of this Agreement which conflicts with the requirements of
qualification as an Incentive Stock Option under the Code is null and void to
the extent of such conflict and any ambiguities shall be resolved so that this
option qualifies as an Incentive Stock Option.

 

3.             Exercise of
Option and Provisions for Termination.

 

(a)           Vesting
Schedule. Except as otherwise provided in this Agreement,
this option may be exercised as to the number of shares indicated opposite the
respective dates on Exhibit A hereto (“Vested Shares”). This option may
not be exercised with respect to any shares after the tenth anniversary of the
date of grant (hereinafter the “Expiration Date”).

 

(b)           Exercise
Procedure. Subject to the conditions set forth in this
Agreement, this option shall be exercised by the Optionee’s delivery of written
notice of exercise to the Company, specifying the number of shares to be
purchased and the purchase price to be paid therefor and accompanied by payment
in full in accordance with Section 4. Such exercise shall be effective
upon receipt by the Company of such written notice together with the required
payment. The Optionee may purchase less than the number of shares covered
hereby, provided that no partial exercise of this option may be for any
fractional share or for less than one whole share.

 

(c)           Continuous
Employment Required. Except as otherwise provided in this Section 3,
this option may not be exercised unless the Optionee, at the time he or she
exercises this option, is, and has been at all times since the date of grant of
this option, an employee of the Company. For all purposes of this option,
(i) “employment” shall be defined in accordance with the provisions of
Section 1.421-7(h) of the Income Tax Regulations or any successor
regulations, and (ii) if this option shall be assumed or a new option
substituted therefor in a transaction to which Section 424(a) of the
Code applies, employment by such assuming or substituting

 

 

corporation (hereinafter called the “Successor Corporation”) shall be
considered for all purposes of this option to be employment by the Company.

 

(d)           Exercise Period
Upon Termination of Employment. If the Optionee ceases to
be employed by the Company for any reason, then, except as provided in
paragraphs (e) and (f) below, the right to exercise this option shall
terminate three months after such cessation (but in no event after the
Expiration Date), provided that this option shall be
exercisable only to the extent that the Optionee was entitled to exercise this
option on the date of such cessation. Notwithstanding the foregoing, if the
Optionee, prior to the Expiration Date, materially violates any non-competition
or confidentiality provisions of any agreement between the Optionee and the
Company, the right to exercise this option shall terminate immediately upon
such violation.

 

(e)           Exercise Period
Upon Death or Disability. If the Optionee dies or becomes disabled (within
the meaning of Section 22(e)(3) of the Code) prior to the Expiration
Date while he or she is an employee of the Company, or if the Optionee dies
within three months after the Optionee ceases to be an employee of the Company
(other than as the result of a discharge for “cause” as specified in paragraph
(f) below), this option shall be exercisable, within the period of one
year following the date of death or disability of the Optionee (but in no event
after the Expiration Date), by the Optionee or by the person to whom this
option is transferred by will or the laws of descent and distribution; provided that
this option shall be exercisable only to the extent that this option was
exercisable by the Optionee on the date of his or her death or disability.
Except as otherwise indicated by the context, the term “Optionee”, as used in
this option, shall be deemed to include the estate of the Optionee or any
person who acquires the right to exercise this option by bequest or inheritance
or otherwise by reason of the death of the Optionee.

 

(f)            Termination for
Cause. If the Optionee, prior to the Expiration Date, ceases his or her
employment with the Company because he or she is terminated for “Cause” (as
defined below), the right to exercise this option shall terminate immediately
upon such cessation of employment. “Cause” is conduct, as determined by the
Board of Directors, involving one or more of the following: (i) gross
misconduct by the Optionee which is materially injurious to the Company; or
(ii) the commission of an act of embezzlement, fraud or deliberate
disregard of the rules or policies of the Company which results in
material economic loss, damage or injury to the Company; or (iii) the
unauthorized disclosure of any trade secret or confidential information of the
Company or any third party who has a business relationship with the Company or
the violation of any noncompetition covenant or assignment of inventions
obligation with the Company; or (iv) the commission of any act which
induces any customer or prospective customer of the Company to break a contract
with the Company or to decline to do business with the Company; or (v) the
conviction of the Optionee of a felony involving any financial impropriety or
which would materially interfere with the Optionee’s ability to perform his or
her services for the Company or otherwise be injurious to the Company; or
(vi) the failure of the optionee to perform in a material respect his or
her employment obligations without proper cause. In making such determination,
the Board of Directors shall act fairly and in utmost good faith. For the
purposes of this subsection (f), termination of employment shall be deemed to
occur when the optionee receives notice that his or her employment is
terminated.

 

2

 

(g)           Buy Back Rights. If the
Optionee, prior to the Expiration Date, ceases his or her employment or
engagement with the Company because he or she is terminated for Cause, pursuant
to paragraph (f) of this Section 3, prior to the Company’s first
underwritten offering to the public pursuant to an effective registration
statement under the Securities Act of 1933, as amended, then the Company shall
have the right and option to purchase, for a period of 180 days from the date
of the Optionee’s termination of engagement or employment, and if the Company
exercises such right, the Optionee shall be required to sell to the Company,
any or all of the shares of Common Stock of the Company which may have been
granted hereunder as a result of a previous exercise, at a price per share
equal to the fair market value (determined by mutual agreement between the
Company and the Optionee or, in the absence of such agreement, by an
independent third party appraiser as of the date the Company exercises such
right). If at any time the Company elects to purchase shares pursuant to this
Section 3(g), the closing of such purchase shall take place at the offices
of the Company within 30 days after delivery of notice to the Optionee of the
Company’s election to purchase such shares. The purchase price for such shares
shall be paid by delivery of a bank cashier’s check or certified check. This
provision 3(g) shall survive the exercise or partial exercise of this
Option.

 

4.             Payment of
Purchase Price

 

(a)           Method of
Payment. Payment of the purchase price for shares purchased upon exercise of
this option shall be made (i) by delivery to the Company of cash or a
certified or bank check to the order of the Company in an amount equal to the
purchase price of such shares, (ii) subject to the consent of the Company,
by delivery to the Company of shares of Common Stock of the Company then owned
by the Optionee having a fair market value equal in amount to the purchase
price of such shares, (iii) subject to the consent of the Company, by the
delivery of an assignment to the Company of a sufficient amount of the proceeds
from the sale of the Common Stock acquired upon exercise of this option and an
authorization to the broker or selling agent to pay that amount to the Company,
which sale shall be at the Optionee’s direction at the time of exercise,
(iv) by any other means (including, without limitation, by delivery of a
promissory note of the Optionee payable on such terms as are specified by the
Board of Directors) which the Board of Directors determines are consistent with
the purpose of the Plan and with applicable laws and regulations (including,
without limitation, the provisions of Rule 16b-3 under the Securities
Exchange Act of 1934 and Regulation T promulgated by the Federal Reserve
Board), (v) by the procedure set forth in Section 4(d) below, or
(vi) by any combination of such methods of payment.

 

(b)           Valuation of
Shares or Other Non-Cash Consideration Tendered in Payment of Purchase Price. For the
purposes hereof, unless a recognized market value is available, the fair market
value of any share of the Company’s Common Stock or other non-cash
consideration which may be delivered to the Company in exercise of this option
shall be determined in good faith by the Board of Directors of the Company.

 

(c)           Delivery of
Shares Tendered in Payment of Purchase Price. If the Optionee exercises
this option by delivery of shares of Common Stock of the Company, the
certificate or certificates representing the shares of Common Stock of the
Company to be delivered shall be duly executed in blank by the Optionee or
shall be accompanied by a stock power duly executed in blank suitable for
purposes of transferring such shares to the Company.

 

3

 

Fractional shares of Common Stock of the Company will not be accepted
in payment of the purchase price of shares acquired upon exercise of this
option.

 

(d)           Net Issue
Exercise. Prior to the closing of the Company’s first underwritten
offering to the public pursuant to an effective registration statement under
the Securities Act of 1933, as amended, in lieu of the payment provisions set
forth in Section 4(a), the Optionee may elect to exercise of this option
by using the following formula:

 

	
   

  	
  X = Y (A - B)

  	
   

  
	
   

  	
        A

  	
   

  

 

Where:                   X = The number
of shares of Common Stock to be issued to the Optionee.

 

Y = The number of shares of
Common Stock receivable upon exercise of this option (at the date of such
calculation).

 

A = The fair market value of
one share of Common Stock (at the date of such calculation).

 

B = The per share purchase
price payable for one share of Common Stock upon exercise of this option.

 

5.             Delivery of
Shares; Compliance With Securities Laws, Etc.

 

(a)           General. The Company
shall, upon payment of the option price for the number of shares purchased and
paid for, make prompt delivery of such shares to the Optionee; provided that
if any law or regulation requires the Company to take any action with respect
to such shares before the issuance thereof, then the date of delivery of such
shares shall be extended for the period necessary to complete such action.

 

(b)           Listing, Qualification, Etc.  This option shall be subject
to the requirement that if, at any time, counsel to the Company shall determine
that the listing, registration or qualification of the shares subject hereto
upon any securities exchange or under any state or federal law, or the consent
or approval of any governmental or regulatory body, or that the disclosure of
non-public information or the satisfaction of any other condition is necessary
as a condition of, or in connection with, the issuance or purchase of shares
hereunder, this option may not be exercised, in whole or in part, unless such
listing, registration, qualification, consent or approval, disclosure or
satisfaction of such other condition shall have been effected or obtained on
terms acceptable to the Board of Directors. Nothing herein shall be deemed to
require the Company to apply for, effect or obtain such listing, registration,
qualification, or disclosure, or to satisfy such other condition.

 

6.             Nontransferability
of Option. This option is personal and no rights granted hereunder
may be transferred, assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise) nor shall any such rights be subject to
execution, attachment or similar process except that this option may be
transferred as provided in paragraph (e) of Section 3 above. Upon any
attempt to transfer, assign, pledge, hypothecate or otherwise dispose of this
option or of such rights contrary to the provisions hereof, or upon the levy of
any attachment or

 

4

 

similar process upon this option or such rights, this option and such
rights shall, at the election of the Company, become null and void.

 

7.             No Special Employment
Rights. Nothing contained in the Plan or this option shall be construed or
deemed by any person under any circumstances to bind the Company to continue
the employment of the Optionee for the period within which this option may be
exercised, or for any other period.

 

8.             Shareholder
Rights

 

(a)           No Rights as a
Shareholder until Exercise. The Optionee shall have no
rights as a shareholder with respect to any shares which may be purchased by
exercise of this option (including, without limitation, any rights to receive
dividends or non-cash distributions with respect to such shares) unless and
until a certificate representing such shares is duly issued and delivered to
the Optionee. No adjustment shall be made for dividends or other rights for
which the record date is prior to the date such stock certificate is issued.

 

(b)           Transfer
Restrictions on Underlying Stock. This Option is subject to
the requirement that upon exercise, the underlying security exchanged for the
Option, shall be subject to all of the transfer restrictions set forth in the
Plan including but not limited those requirements set forth in Paragraph 13 of
the Plan entitled “Stock Transfer Restrictions on Underlying Stock,” “Right of
First Refusal” and “Drag Along Rights,” and in Paragraph 21 of the Plan
entitled “Lock-Up,” and as may be set forth in the by-laws of the Company. The
Optionee agrees to be bound by these restrictions and further agrees, upon the
request of the Company to execute any further documentation necessary to
evidence said agreement. An Optionee’s failure to execute same, at the
Company’s request, shall cause the Option, and/or the underlying security to be
immediately null and void. The Company shall be free to place a legend on the
back of the underlying security specifying the foregoing restrictions.

 

9.             Adjustment
Provisions

 

(a)           General. If, through,
or as a result of, any merger, consolidation, sale of all or substantially all
of the assets of the Company, reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other
similar transaction, (i) the outstanding shares of Common Stock are
increased, decreased or exchanged for a different number or kind of shares or
other securities of the Company, or (ii) additional shares or new or
different shares or other securities of the Company or other non-cash assets
are distributed with respect to such shares of Common Stock or other
securities, the Optionee shall, with respect to this option or any unexercised
portion hereof, be entitled to the rights and benefits, and be subject to the
limitations, set forth in Section 15(a) of the Plan.

 

(b)           Board Authority
to Make Adjustments. Any adjustments under this Section 9 will be
made by the Board of Directors, whose determination as to what adjustments, if
any, will be made and the extent thereof will be final, binding and conclusive.
No fractional shares will be issued pursuant to this option on account of any
such adjustments.

 

(c)           Limits on
Adjustments. No adjustment shall be made under this
Section 9 which would, within the meaning of any applicable provision of
the Code, constitute a

 

5

 

modification, extension or renewal of this option or a grant of
additional benefits to the Optionee.

 

10.          Withholding
Taxes. The Company’s obligation to deliver shares of Common Stock upon the
exercise of this option shall be subject to the Optionee’s satisfaction of all
applicable federal, state, local and foreign taxes of any kind required by law
to be withheld with respect to any shares issued upon exercise of this option.
If the Company, in its discretion, determines that it must or should withhold or
pay over tax with respect to the exercise of this option or a Disqualifying
Disposition (as defined in Section 11 below) of shares of Common Stock
acquired by the Optionee on exercise of this option, the Optionee hereby agrees
that, at the option of the Company, Optionee will pay to the Company or the
Company may withhold from the Optionee’s wages the appropriate amount of
federal, state, local and foreign taxes attributable to such Disqualifying
Disposition. If any portion of this option is treated as a non-qualified
option, the Optionee hereby agrees that, at the option of the Company, Optionee
will pay to the Company or the Company may withhold from the Optionee’s wages
the appropriate amount of federal, state, local and foreign taxes attributable
to the Optionee’s exercise of such non-qualified option. At the Company’s
discretion, the amount required to be withheld may be withheld in cash from
such wages, or (with respect to compensation income attributable to the
exercise of this option) in kind from the Common Stock otherwise deliverable to
the Optionee on exercise of this Option. The Optionee further agrees that, if
the Company does not withhold an amount from the Optionee’s wages sufficient to
satisfy the Company’s withholding obligation, the Optionee will reimburse the
Company on demand, in cash, for the amount under withheld.

 

11.          Disqualifying
Disposition. Although the parties intend that this option shall
qualify as an Incentive Stock Option, if this option is determined not to be an
Incentive Stock Option, the Optionee understands that the Company is not
responsible to compensate the Optionee or otherwise make up for the treatment
of this option as a non-qualified stock option. The Optionee should consult
with the Optionee’s own tax advisors regarding the tax effects of this option
and the requirements necessary to obtain favorable treatment under the Code,
including, but not limited to, holding period requirements. The Optionee agrees
to notify the Company in writing immediately after the Optionee makes a
Disqualifying Disposition (as such term is defined in the Code) of any shares
of Common Stock acquired pursuant to the exercise of this option. The Optionee
also agrees to provide the Company with any information which it shall request
concerning any such disposition. The Optionee acknowledges that he or she will
forfeit the favorable income tax treatment otherwise available with respect to
the exercise of this Incentive Stock Option if he or she makes a Disqualifying
Disposition of the shares acquired on exercise of this option.

 

12.          Investment
Representations; Legends; Limitations on Certain
Dispositions

 

(a)           Representations. The Optionee
represents, warrants and covenants that:

 

(i)            Any shares
purchased upon exercise of this option shall be acquired for the Optionee’s
account for investment only and not with a view to, or for sale in connection
with, any distribution of the shares in violation of the Securities Act of
1933, as amended (the “Securities Act”), or any rule or regulation under
the Securities Act.

 

6

 

(ii)           The Optionee
has had such opportunity as he or she has deemed adequate to obtain from
representatives of the Company such information as is necessary to permit the
Optionee to evaluate the merits and risks of his or her investment in the
Company.

 

(iii)          The Optionee is
able to bear the economic risk of holding shares acquired pursuant to the
exercise of this option for an indefinite period.

 

(iv)          The Optionee
understands that (A) the shares acquired pursuant to the exercise of this
option will not be registered under the Securities Act and are “restricted
securities” within the meaning of Rule 144 under the Securities Act;
(B) such shares cannot be sold, transferred or otherwise disposed of
unless they are subsequently registered under the Securities Act or an
exemption from registration is then available; (C) in any event, an
exemption from registration under Rule 144 or otherwise under the
Securities Act may not be available for at least one year and even then will
not be available unless a public market then exists for the Common Stock,
adequate information concerning the Company is then available to the public and
other terms and conditions of Rule 144 are complied with; and (D) there
is now no registration statement on file with the Securities and Exchange
Commission with respect to any stock of the Company and the Company has no
obligation or current intention to register any shares acquired pursuant to the
exercise of this option under the Securities Act.

 

By making payment upon exercise of this option, the
Optionee shall be deemed to have reaffirmed, as of the date of such payment,
the representations made in this Section 12.

 

(b)           Legends on
Stock Certificates. All stock certificates representing shares of
Common Stock issued to the Optionee upon exercise of this option shall have
affixed thereto legends substantially in the following forms, in addition to
any other legends required by applicable law:

 

“The securities represented by this certificate have
not been registered under the Securities Act of 1933 and may not be
transferred, sold or otherwise disposed of in the absence of an effective
registration statement with respect thereto under the Securities Act of 1933,
or an opinion of counsel satisfactory to the Company to the effect that
registration under such Act is not required.”

 

“The securities represented by this certificate are
subject to certain rights of repurchase and restrictions on transfer set forth
in the Supernus’ 2005 Stock Plan as of December 22, 2005 and in the
Incentive Stock Option Agreement between the Company and the holder hereof
pursuant to which such securities were issued. A copy of such Agreement will be
provided free of charge to the holder of this certificate upon written request
therefor addressed to the Company.”

 

(c)           Limitations on Certain Dispositions.  The Optionee agrees, by
accepting this option, that if the Company offers any of its Common Stock for
sale pursuant to a registration statement under the Securities Act, the
Optionee will not, directly or indirectly, without the prior written consent of
the Company, sell, offer or agree to sell, grant any option to purchase or
otherwise transfer or dispose of any shares of Common Stock purchased upon

 

7

 

exercise of this option for a period of 180 days after the effective
date of such registration statement.

 

13.          Interpretation
of this Agreement.  All decisions and interpretations made by
the Committee, as defined in Section 2 of the Plan, with regard to any
question arising under the Plan or this Agreement shall be binding and
conclusive on the Company and the Optionee and any other person entitled to
exercise this option as provided herein. In the event there is any
inconsistency between the provisions of this Agreement and of the Plan, the
provisions of the Plan shall govern, subject to the provisions of section 2
above.

 

14.          Miscellaneous

 

(a)           Except as
provided herein, this option may not be amended or otherwise modified unless
evidenced in writing and signed by the Company and the Optionee.

 

(b)           All notices
under this option shall be mailed or delivered by hand to the parties at their
respective addresses set forth beneath their names below or at such other address
as may be designated in writing by either of the parties to one another.

 

(c)           This option
shall be governed by and construed in accordance with the laws of the State of
Delaware.

 

 

Date of Grant: (date of Board approval)

 

 

	
   

  	
   

  
	
   

  	
  [Name of Company]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					

 

8

 

OPTIONEE’S ACCEPTANCE

 

The undersigned hereby
accepts the foregoing option and agrees to the terms and conditions thereof.
The undersigned hereby acknowledges receipt of a copy of the Company’s 2005
Stock Plan as of                                 ,
2005.

 

 

	
   

  	
  OPTIONEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  name

  
	
   

  	
  address

  

 

9

 

Exhibit A

 

Vesting
Schedule

 

Unless otherwise determined by the Board of
Directors, vesting shall occur over a period of four years, subject to the
Shareholder’s continued employment with the Company, in accordance with the
following schedules.

 

(1)           0 Shares on
Date of Grant, and

 

(2)           Thereafter,                      Shares
on the First Anniversary of Date of Grant;                 Shares
on the Second Anniversary of Date of Grant;                   Shares
on the Third Anniversary of Date of Grant and             
      Shares on the
Fourth Anniversary of Date of Grant.

 

10

 

SUPERNUS
PHARMACEUTICALS, INC.

 

NON-QUALIFIED
STOCK OPTION AGREEMENT

 

1.             Grant of Option.                                                   ,
a Delaware corporation (the “Company”) hereby grants to                  ,
individual whose address is set forth below the optionee signature line (the
“Optionee”), an option, pursuant to the Company’s 2005 Stock Plan as of December
22, 2005 (the “Plan”), to purchase an aggregate of                                shares
of common stock of the Company (“Common Stock”) at a price of $                                 per
share, purchasable as set forth in and subject to the terms and conditions of
this option and the Plan. Except where the context otherwise requires, the term
“Company” shall include the parent and all present and future subsidiaries of
the Company as defined in Sections 424(e) and 424(f) of the Internal Revenue
Code of 1986, as amended or replaced from time to time (the “Code”).

 

2.             Non-Qualified
Stock Option. This option is not intended to qualify as an
incentive stock option (“Incentive Stock Option”) within the meaning of Section
422 of the Code.

 

3.             Exercise of
Option and Provisions for Termination.

 

(a)           Vesting
Schedule. Except as otherwise provided in this Agreement,
this option may be exercised as to the number of shares indicated opposite the
respective dates on Exhibit A hereto (“Vested Shares”). This option may not be
exercised with respect to any shares after the tenth anniversary of the date of
grant (hereinafter the “Expiration Date”).

 

(b)           Exercise
Procedure. Subject to the conditions set forth in this
Agreement, this option shall be exercised by the Optionee’s delivery of written
notice of exercise to the Company, specifying the number of shares to be purchased
and the purchase price to be paid therefor and accompanied by payment in full
in accordance with Section 4. Such exercise shall be effective upon receipt by
the Company of such written notice together with the required payment. The
Optionee may purchase less than the number of shares covered hereby, provided
that no partial exercise of this option may be for any fractional share or for
less than one whole share.

 

(c)           Fulfillment of
All Contractual Obligations or Other Duties Required. Except as
otherwise provided in this Section 3, this option may not be exercised unless
the Optionee, at the time he or she exercises this option, has either, (i)
fully performed and satisfied the terms and conditions of the agreement
pursuant to which this option was granted and/or (ii) if the Optionee is an
officer or director of the Company, to date, has fulfilled and discharged the
duties and obligations owed as said officer or director, to the satisfaction of
the Company.

 

(d)           Exercise Period
Upon Termination of Engagement. If the Optionee’s engagement
is terminated by the Company for any reason other than for “Cause” (as defined

 

 

below), then, except as provided in paragraphs (c) above and (e) and
(f) below, the right to exercise this option shall terminate the earlier of (i)
the fifth anniversary of the date of termination (“Post-Termination Exercise
Period”) or (ii) the Expiration Date. Provided that this
option shall be exercisable only to the extent that the Optionee was entitled
to exercise this option on the date of termination. Notwithstanding the
foregoing, if the Optionee, prior to the Expiration Date, materially violates
any non-competition or confidentiality provisions of any agreement between the
Optionee and the Company, the right to exercise this option shall terminate
immediately upon such violation. An Optionee’s engagement shall not be deemed
terminated by the Company if the engagement expires in the ordinary course of
the engagement.

 

(e)           Exercise Period
Upon Death or Disability. If the Optionee dies or becomes disabled
(within the meaning of Section 22(e)(3) of the Code) prior to the Expiration
Date while he or she is engaged by the Company or during the Post-Termination
Exercise Period, (other than as the result of a discharge for “cause” as
specified in paragraph (f) below), this option shall be exercisable, within the
period of one year following the date of death or disability of the Optionee
(but in no event after the Expiration Date), by the Optionee or by the person
to whom this option is transferred by will or the laws of descent and
distribution; provided that this option shall be exercisable
only to the extent that this option was exercisable by the Optionee on the date
of his or her death or disability. Except as otherwise indicated by the context,
the term “Optionee”, as used in this option, shall be deemed to include the
estate of the Optionee or any person who acquires the right to exercise this
option by bequest or inheritance or otherwise by reason of the death of the
Optionee.

 

(f)            Termination for
Cause. If the Optionee, prior to the Expiration Date, ceases his or her
engagement with the Company because he or she is terminated for “Cause” (as
defined below), the right to exercise this option shall terminate immediately
upon such cessation of engagement. “Cause” is conduct, as determined by the
Board of Directors, involving one or more of the following: (i) gross
misconduct by the Optionee which is materially injurious to the Company; or
(ii) the commission of an act of embezzlement, fraud or deliberate disregard of
the rules or policies of the Company which results in material economic loss,
damage or injury to the Company; or (iii) the unauthorized disclosure of any
trade secret or confidential information of the Company or any third party who
has a business relationship with the Company or the violation of any
noncompetition covenant or assignment of inventions obligation with the
Company; or (iv) the commission of any act which induces any customer or
prospective customer of the Company to break a contract with the Company or to
decline to do business with the Company; or (v) the conviction of the Optionee
of a felony involving any financial impropriety or which would materially
interfere with the Optionee’s ability to perform his or her services for the
Company or otherwise be injurious to the Company; or (vi) the failure of the
optionee to perform in a material respect his or her engagement obligations
without proper cause. In making such determination, the Board of Directors
shall act fairly and in utmost good faith. For the purposes of this subsection
(f), termination of engagement shall be deemed to occur when the optionee
receives notice that his or her engagement is terminated.

 

(g)           Buy Back Rights. If the
Optionee, prior to the Expiration Date, ceases his or her engagement with the
Company because he or she is terminated for Cause pursuant to paragraph (f) of
this Section 3 prior to the Company’s first underwritten offering to the public
pursuant to an effective registration statement under the Securities Act of
1933, as amended, then

 

2

 

the Company shall have the right and option to purchase, for a period
of 180 days from the date of the Optionee’s termination of engagement, and if the
Company exercises such right, the Optionee shall be required to sell to the
Company, any or all of the shares of Common Stock of the Company which may have
been granted hereunder as a result of a previous exercise, or as a result of a
previous exercise under an Option Agreement granted in connection with a
previous period of engagement with the Company, at a price per share equal to
the fair market value (determined by an independent third party appraiser as of
the date the Company exercises such right). If at any time the Company elects
to purchase shares pursuant to this Section 3(g), the closing of such purchase
shall take place at the offices of the Company within 30 days after delivery of
notice to the Optionee of the Company’s election to purchase such shares. The
purchase price for such shares shall be paid by delivery of a bank cashier’s
check or certified check. This provision 3(g) shall survive the exercise or
partial exercise of this Option.

 

4.      Payment of
Purchase Price

 

(a)           Method of
Payment. Payment of the purchase price for shares purchased upon exercise of
this option shall be made (i) by delivery to the Company of cash or a certified
or bank check to the order of the Company in an amount equal to the purchase
price of such shares, (ii) subject to the consent of the Company, by delivery
to the Company of shares of Common Stock of the Company then owned by the
Optionee having a fair market value equal in amount to the purchase price of
such shares, (iii) subject to the consent of the Company, by the delivery of an
assignment to the Company of a sufficient amount of the proceeds from the sale
of the Common Stock acquired upon exercise of this option and an authorization
to the broker or selling agent to pay that amount to the Company, which sale
shall be at the Optionee’s direction at the time of exercise, (iv) by any other
means (including, without limitation, by delivery of a promissory note of the
Optionee payable on such terms as are specified by the Board of Directors)
which the Board of Directors determines are consistent with the purpose of the
Plan and with applicable laws and regulations (including, without limitation,
the provisions of Rule 16b-3 under the Securities Exchange Act of 1934 and
Regulation T promulgated by the Federal Reserve Board), or (v) by any
combination of such methods of payment.

 

(b)           Valuation of
Shares or Other Non-Cash Consideration Tendered in Payment of Purchase Price. For the
purposes hereof, unless a recognized market value is available, the fair market
value of any share of the Company’s Common Stock or other non-cash
consideration which may be delivered to the Company in exercise of this option
shall be determined in good faith by the Board of Directors of the Company.

 

(c)           Delivery of
Shares Tendered in Payment of Purchase Price. If the Optionee exercises
this option by delivery of shares of Common Stock of the Company, the
certificate or certificates representing the shares of Common Stock of the
Company to be delivered shall be duly executed in blank by the Optionee or
shall be accompanied by a stock power duly executed in blank suitable for
purposes of transferring such shares to the Company. Fractional shares of
Common Stock of the Company will not be accepted in payment of the purchase
price of shares acquired upon exercise of this option.

 

(d)           Net Issue
Exercise. Prior to the closing of the Company’s first
underwritten offering to the public pursuant to an effective registration
statement under the

 

3

 

Securities Act of 1933, as amended, in lieu of the payment provisions
set forth in Section 4(a), the Optionee may elect to exercise this option by
using the following formula:

 

	
   

  	
  X = Y (A - B)

  	
   

  
	
   

  	
        A

  	
   

  

 

Where:                   X = The number
of shares of Common Stock to be issued to the Optionee.

 

Y = The number of shares of
Common Stock receivable upon exercise of this option (at the date of such
calculation).

 

A = The fair market value of
one share of Common Stock (at the date of such calculation).

 

B = The per share purchase
price payable for one share of Common Stock upon exercise of this option.

 

5.             Delivery of
Shares; Compliance With Securities Laws, Etc.

 

(a)           General. The Company
shall, upon payment of the option price for the number of shares purchased and
paid for, make prompt delivery of such shares to the Optionee; provided that
if any law or regulation requires the Company to take any action with respect
to such shares before the issuance thereof, then the date of delivery of such
shares shall be extended for the period necessary to complete such action.

 

(b)           Listing,
Qualification, Etc. This option shall be subject to the requirement
that if, at any time, counsel to the Company shall determine that the listing,
registration or qualification of the shares subject hereto upon any securities
exchange or under any state or federal law, or the consent or approval of any
governmental or regulatory body, or that the disclosure of non-public
information or the satisfaction of any other condition is necessary as a
condition of, or in connection with, the issuance or purchase of shares
hereunder, this option may not be exercised, in whole or in part, unless such
listing, registration, qualification, consent or approval, disclosure or
satisfaction of such other condition shall have been effected or obtained on
terms acceptable to the Board of Directors. Nothing herein shall be deemed to
require the Company to apply for, effect or obtain such listing, registration,
qualification, or disclosure, or to satisfy such other condition.

 

6.             Nontransferability
of Option. This option is personal and no rights granted hereunder
may be transferred, assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise) nor shall any such rights be subject to
execution, attachment or similar process except that this option may be
transferred as provided in paragraph (e) of Section 3 above. Upon any attempt
to transfer, assign, pledge, hypothecate or otherwise dispose of this option or
of such rights contrary to the provisions hereof, or upon the levy of any
attachment or similar process upon this option or such rights, this option and
such rights shall, at the election of the Company, become null and void.

 

7.             No Special
Employment Rights. Nothing contained in the Plan or this option shall
be construed or deemed by any person under any circumstances to bind the
Company to

 

4

 

continue the engagement of the Optionee for the period within which
this option may be exercised, or for any other period.

 

8.             Shareholder
Rights

 

(a)           No Rights as a
Shareholder until Exercise. The Optionee shall have no
rights as a shareholder with respect to any shares which may be purchased by
exercise of this option (including, without limitation, any rights to receive
dividends or non-cash distributions with respect to such shares) unless and
until a certificate representing such shares is duly issued and delivered to
the Optionee. No adjustment shall be made for dividends or other rights for
which the record date is prior to the date such stock certificate is issued.

 

(b)           Transfer
Restrictions on Underlying Stock. This Option is subject to
the requirement that upon exercise, the underlying security exchanged for the
Option, shall be subject to all of the transfer restrictions set forth in the
Plan including but not limited those requirements set forth in Paragraph 13 of
the Plan entitled “Stock Transfer Restrictions on Underlying Stock,” “Right of
First Refusal” and “Drag Along Rights,” and in Paragraph 21 of the Plan
entitled “Lock-Up,” and as may be set forth in the by-laws of the Company. The
Optionee agrees to be bound by these restrictions and further agrees, upon the
request of the Company to execute any further documentation necessary to
evidence said agreement. An Optionee’s failure to execute same, at the
Company’s request, shall cause the Option, and/or the underlying security to be
immediately null and void. The Company shall be free to place a legend on the
back of the underlying security specifying the foregoing restrictions.

 

9.             Adjustment
Provisions

 

(a)           General. If, through,
or as a result of, any merger, consolidation, sale of all or substantially all
of the assets of the Company, reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other
similar transaction, (i) the outstanding shares of Common Stock are increased,
decreased or exchanged for a different number or kind of shares or other
securities of the Company, or (ii) additional shares or new or different shares
or other securities of the Company or other non-cash assets are distributed
with respect to such shares of Common Stock or other securities, the Optionee
shall, with respect to this option or any unexercised portion hereof, be
entitled to the rights and benefits, and be subject to the limitations, set
forth in Section 15(a) of the Plan.

 

(b)           Board Authority
to Make Adjustments. Any adjustments under this Section 9 will be made
by the Board of Directors, whose determination as to what adjustments, if any,
will be made and the extent thereof will be final, binding and conclusive. No
fractional shares will be issued pursuant to this option on account of any such
adjustments.

 

(c)           Limits on
Adjustments. No adjustment shall be made under this Section 9 which
would, within the meaning of any applicable provision of the Code, constitute a
modification, extension or renewal of this option or a grant of additional
benefits to the Optionee.

 

10.          Withholding
Taxes. The Company’s obligation to deliver shares of Common Stock upon the
exercise of this option shall be subject to the Optionee’s satisfaction of all

 

5

 

applicable federal, state, local and foreign taxes of any kind required
by law to be withheld with respect to any shares issued upon exercise of this
option. If the Company, in its discretion, determines that it must or should
withhold or pay over tax with respect to the exercise of this option, the
Optionee hereby agrees that, at the option of the Company, Optionee will pay to
the Company or the Company may withhold from the Optionee’s wages the
appropriate amount of federal, state, local and foreign taxes attributable
thereto. At the Company’s discretion, the amount required to be withheld may be
withheld in cash from such wages, or (with respect to compensation income
attributable to the exercise of this option) in kind from the Common Stock
otherwise deliverable to the Optionee on exercise of this Option. The Optionee
further agrees that, if the Company does not withhold an amount from the
Optionee’s wages sufficient to satisfy the Company’s withholding obligation,
the Optionee will reimburse the Company on demand, in cash, for the amount
under withheld.

 

11.          Investment
Representations; Legends; Limitations on Certain Dispositions

 

(a)           Representations.
The Optionee represents, warrants and covenants that:

 

(i)            Any shares purchased upon exercise of this option shall
be acquired for the Optionee’s account for investment only and not with a view
to, or for sale in connection with, any distribution of the shares in violation
of the Securities Act of 1933, as amended (the “Securities Act”), or any rule
or regulation under the Securities Act.

 

(ii)           The Optionee has had such opportunity as he or she has
deemed adequate to obtain from representatives of the Company such information
as is necessary to permit the Optionee to evaluate the merits and risks of his
or her investment in the Company.

 

(iii)          The Optionee is able to bear the economic risk of holding
shares acquired pursuant to the exercise of this option for an indefinite
period.

 

(iv)          The Optionee understands that (A) the shares acquired
pursuant to the exercise of this option will not be registered under the
Securities Act and are “restricted securities” within the meaning of Rule 144
under the Securities Act; (B) such shares cannot be sold, transferred or
otherwise disposed of unless they are subsequently registered under the
Securities Act or an exemption from registration is then available; (C) in any
event, an exemption from registration under Rule 144 or otherwise under the
Securities Act may not be available for at least one year and even then will not
be available unless a public market then exists for the Common Stock, adequate
information concerning the Company is then available to the public and other
terms and conditions of Rule 144 are complied with; and (D) there is now no
registration statement on file with the Securities and Exchange Commission with
respect to any stock of the Company and the Company has no obligation or
current intention to register any shares acquired pursuant to the exercise of
this option under the Securities Act.

 

By making payment upon exercise of this option, the
Optionee shall be deemed to have reaffirmed, as of the date of such payment,
the representations made in this Section 11.

 

6

 

(b)           Legends
on Stock Certificates. All stock certificates representing shares of Common
Stock issued to the Optionee upon exercise of this option shall have affixed
thereto legends substantially in the following forms, in addition to any other
legends required by applicable law:

 

“The securities represented by this certificate have
not been registered under the Securities Act of 1933 and may not be
transferred, sold or otherwise disposed of in the absence of an effective
registration statement with respect thereto under the Securities Act of 1933,
or an opinion of counsel satisfactory to the Company to the effect that
registration under such Act is not required.”

 

“The securities represented by this certificate are
subject to certain rights of repurchase and restrictions on transfer set forth
in the 2005 Stock Plan and in the Non-Qualified Stock Option Agreement between
the Company and the holder hereof pursuant to which such securities were
issued. A copy of such Agreement will be provided free of charge to the holder
of this certificate upon written request therefor addressed to the Company.”

 

(c)           Limitations
on Certain Dispositions. The Optionee agrees, by accepting this option,
that if the Company offers any of its Common Stock for sale pursuant to a
registration statement under the Securities Act, the Optionee will not,
directly or indirectly, without the prior written consent of the Company, sell,
offer or agree to sell, grant any option to purchase or otherwise transfer or
dispose of any shares of Common Stock purchased upon exercise of this option
for a period of 180 days after the effective date of such registration
statement.

 

12.         Interpretation
of this Agreement. All decisions and interpretations made by the Committee,
as defined in Section 2 of the Plan, with regard to any question arising under
the Plan or this Agreement shall be binding and conclusive on the Company and
the Optionee and any other person entitled to exercise this option as provided
herein. In the event there is any inconsistency between the provisions of this
Agreement and of the Plan, the provisions of the Plan shall govern, subject to
the provisions of section 2 above.

 

13.         Miscellaneous

 

(a)           Except
as provided herein, this option may not be amended or otherwise modified unless
evidenced in writing and signed by the Company and the Optionee.

 

(b)           All
notices under this option shall be mailed or delivered by hand to the parties
at their respective addresses set forth beneath their names below or at such
other address as may be designated in writing by either of the parties to one
another.

 

7

 

(c)           This
option shall be governed by and construed in accordance with the laws of the
State of Delaware.

 

 

	
  Date of Grant:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [Name of Company]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  

 

8

 

OPTIONEE’S
ACCEPTANCE

 

The undersigned hereby accepts the foregoing option
and agrees to the terms and conditions thereof. The undersigned hereby
acknowledges receipt of a copy of the Company’s 2005 Stock Plan as of        ,
2005.

 

 

	
   

  	
  OPTIONEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Optionee’s name and
  address]

  

 

9

 

Exhibit A

 

Vesting
Schedule

Vesting
Schedule

 

Unless otherwise determined by the Board of
Directors, vesting shall occur over a period of four years, subject to the
Shareholder’s continued employment with the Company, in accordance with the
following schedules.

 

(1)           0 Shares on Date of Grant , and

 

(2)           Thereafter,          Shares
on the First Anniversary of Date of Grant;       Shares
on the Second Anniversary of Date of
Grant;         Shares on the Third
Anniversary of Date of Grant and          Shares
on the Fourth Anniversary of Date of Grant..

 

10

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