Document:

exv10w18a

 

Exhibit 10.18A

FIRST AMENDMENT TO AVALQN PHARMACEUTICALS’ INCENTIVE

STOCK OPTION AGREEMENT

     This First Amendment to Avalon Pharmaceuticals, Inc. Incentive Stock Option Agreement (“First
Amendment”) is dated as of January 30, 2002, by and between Avalon Pharmaceuticals, Inc., a
Delaware corporation (the “Company”) and an individual whose address is set forth below the
optionee signature line (the “Optionee”).

RECITALS:

     WHEREAS, Avalon and Optionee executed a certain Incentive Stock Option
Agreement dated                                         ,200   (the “Agreement”), pursuant to the Company’s 1999 Stock Plan; and

     WHEREAS, the Company amended the 1999 Stock Plan as part of its Series B Convertible
Preferred Stock sale pursuant to Board resolution and shareholder consent, each dated as of
October 15, 2001 and now identified as the “Amended and Restated 1999 Stock Plan, as of October
15, 2001 (the “Plan”); and

     WHEREAS, the Company desires to make certain changes to the Agreement and intends to do so by
this First Amendment which reflects those changes made to the Plan as approved by the Board of
Directors and the shareholders of the Company; and

     WHEREAS, the Optionee desires to consent to be bound to those changes by its execution of
this First Amendment.

     NOW THEREFORE, in consideration of the foregoing premises and such other consideration the
receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be
legally bound hereby, agree as follows:

     1. The optionee hereby acknowledges that he has reviewed the Plan (as amended and restated)
and consents to those changes made to the Plan as specifically set forth in Exhibit A attached
hereto and made a part hereof by this reference, including but not limited to those changes set
forth in Paragraph 13 herein entitled “Stock Transfer Restrictions on Underlying Stock, Right of
First Refusal and Drag Along Rights” and those changes set forth in paragraph 21 herein entitled
“Lock –Up,” and agrees to be bound by them as though they were originally part of the terms and
conditions of the Plan and the Agreement..

     2. Except as may be amended by this First Amendment, all remaining terms and conditions of
the Plan and the Agreement shall remain in full force and effect.

     3. This First Amendment may be executed in counterparts.

 

 

     IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be executed as of
the above date written.

	 	 	 	 	 	 	 
	ATTEST:	 	AVALON PHARMACEUTICALS, INC.
	 
	 	 	 	 	 	 
	

	 	BY:	 	 	 	 
	 	 	 	 	 
	

	 	 	 	 	 	Kenneth C. Carter, Ph.D.
	

	 	 	 	 	 	President and CEO
	 
	 	 	 	 	 	 
	WITNESS:	 	OPTIONEE
	 
	 	 	 	 	 	 
	

	 	BY:	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	
	 	 	 	 	 	 

2exv10w18b

 

Exhibit 10.18B

SECOND AMENDMENT TO AVALON PHARMACEUTICALS’ INCENTIVE

STOCK OPTION AGREEMENT

  
          This
    Second Amendment to Avalon Pharmaceuticals, Inc. Incentive Stock Option Agreement
    (“Second Amendment”) is dated as of _____________, 2003, by and
    between Avalon Pharmaceuticals, Inc., a Delaware corporation (the “Company”)
    and an individual whose address is set forth below the optionee signature
    line (the “Optionee”).
  
RECITALS:

  
          WHEREAS,
    Avalon and Optionee executed certain Incentive Stock Option Agreements
    dated _____________and _____________, pursuant to the Company’s 1999
    Stock Plan (the “Agreement”); and
  
          WHEREAS, the Company amended the 1999 Stock Plan as part of its Series B
Convertible Preferred Stock sale pursuant to Board resolution and shareholder
consent, each dated as of October 15, 2001 and now identified as the “Amended and
Restated 1999 Stock Plan, as of October 15, 2001 (the “Plan”); and

          WHEREAS, the Company amended the Agreement to reflect those changes made to the
Plan by that certain First Amendment to Avalon Pharmaceutical, Inc.’s Incentive
Stock Option Agreement dated January 30, 2002 (“First Amendment”); and

          WHEREAS, certain changes to the Agreement and the Plan were not reflected in the
First Amendment and the Company now desires to set forth certain amendments to the
Agreement with more specificity to reflect those changes to the Plan as approved by
the Board of Directors and the shareholders of the Company, and intends to do so by
this Second Amendment; and

          WHEREAS, the Optionee desires to consent to be bound to those changes by its
execution of this Second Amendment.

          NOW THEREFORE, in consideration of the foregoing premises and such other
consideration the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound hereby, agree as follows:

          1. The optionee hereby acknowledges that he has reviewed the Plan (as
amended and restated) and consents to those changes made to the Plan as specifically
set forth in Exhibit A attached hereto and made a part hereof by this reference,
including but not limited to those changes set forth in paragraph 3 of the Agreement,
as amended, entitled “Exercise of Option and Provisions for Termination.”
paragraph 8 of the Agreement entitled “Shareholder Rights” and paragraph 12(b)
of the Agreement entitled

 

 

“Legends on Stock Certificates” which changes are set forth in full in
paragraphs 2 through 4 below, as well as those changes set forth in paragraph 21 of
the Plan entitled “Conditions and Restrictions,” and agrees to be bound by them as
though they were originally part of the terms and conditions of the Plan and the
Agreement, as amended.

          2. Section 3 of the Agreement is hereby amended by inserting after
paragraph (e), the following paragraphs (f) and (g) in lieu of the existing
paragraphs (f) and (g). The remaining paragraphs of section 3 shall remain in full
force and effect. The amended portions of section 3 are restated below and read as
follows:

     (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.

     (g) Buy Back Rights. If the Optionee, prior to
the Expiration Date, ceases his or her engagement or employment
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.

     3. Section 8 of the Agreement is hereby amended by renumbering the
existing language as Section 8(a) and by adding a new paragraph, Section 8(b),
which reads as follows:

          8. Shareholder Rights

          (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 “Conditions and Restrictions,” 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.

     4. Section 12 shall remain in full force and effect except for section 12(b)
which is hereby amended and restated below as follows:

 

 

          (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 Amended
and Restated 1999 Stock Plan as of October 15, 2001
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 Plan and
Agreement will be provided free of charge to the
holder of this certificate upon written request
therefor addressed to the Company.”

     5. Except as may be amended by this Second Amendment, all remaining
terms and conditions of the Plan and the Agreement, as amended, shall
remain in full
force and effect.

     6. This Second Amendment may be executed in counterparts.

  
     IN
    WITNESS WHEREOF, the parties hereto have caused this Second Amendment
    to be executed as of the above date written.
  

    	 	 	 
	ATTEST:
            
	          AVALON
          PHARMACEUTICALS, INC.
	 	 	 
	 
	BY:
	 
	 
	 	 
	 
	          Dr.
          Kenneth C. Carter, President and CEO

 

 

    	 	 	 
	WITNESS:
            
	OPTIONEE
	 
	By:
	 
	 
	 	 
	 
	Print

            Name:

	 
	 	 
	 
	Address:

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