As filed with the Securities and Exchange Commission on June 3, 2004

Registration No. 333-                

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

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FORM S-8

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

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Corcept Therapeutics Incorporated

(Exact name of Registrant as specified in its charter)

 

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Delaware		77-0487658
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

 

Corcept Therapeutics Incorporated

275 Middlefield Road, Suite A

Menlo Park, California 94025

(Address of Principal Executive Offices)

 

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2000 Stock Option Plan

2004 Equity Incentive Plan

(Full title of the plans)

 

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Joseph K. Belanoff, M.D.

Chief Executive Officer

Corcept Therapeutics Incorporated

275 Middlefield Road, Suite A

Menlo Park, California 94025

(Name and address of agent for service)

 

(650) 327-3270

(Telephone number, including area code, of agent for service)

 

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Copy to:

Kyle Guse

Sarah O’Dowd

Heller Ehrman White & McAuliffe LLP

275 Middlefield Road

Menlo Park, California 94025

(650) 324-7000

(Calculation of Registration Fee on following page)

 

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CALCULATION OF REGISTRATION FEE

 

Title of each class of Securities to be Registered		Amount to be Registered(1)		Proposed Maximum Offering Price Per Share				Proposed Maximum Aggregate Offering Price			Amount of Registration Fee
2000 Stock Option Plan
Common Stock, $0.001 par value		728,002 Shares		$	6.79	(2)		$	4,943,134		$	626.30
2004 Equity Incentive Plan
Common Stock, $0.001 par value		3,000,000 Shares		$	9.73	(3)		$	29,190,000		$	3,698.37
TOTAL		3,728,002 Shares						$	34,133,134		$	4,324.67

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(1)

This registration statement shall also cover any additional shares of common stock which become issuable under any of the plans being registered pursuant to this registration statement by reason of any stock dividend, stock split, recapitalization or any other similar transaction effected without the receipt of consideration which results in an increase in the number of the registrant’s outstanding shares of common stock.

(2)

Computed in accordance with Rule 457(h) under the Securities Act solely for the purpose of calculating the registration fee. The computation is based on the weighted average per share exercise price (rounded to nearest cent) of outstanding options under the referenced plan, the shares issuable under which are registered hereby.

(3)

Estimated in accordance with Rule 457(h) under the Securities Act solely for the purpose of calculating the registration fee. The computation with respect to unissued options is based upon the average high and low sale prices of the common stock as reported on the Nasdaq National Market on May 27, 2004.

 

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PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

 

Item 3.

Incorporation of Documents by Reference.

 

The following documents filed with the Securities and Exchange Commission (the “Commission”) are hereby incorporated by reference:

 

(a) The registrant’s prospectus filed on April 14, 2004 pursuant to Rule 424(b) of the Securities Act and forming a part of the registrant’s Registration Statement on Form S-1 (Registration No. 333-112676), which prospectus contains audited financial statements for the registrant’s latest fiscal year for which such statements have been filed.

 

(b) The registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2004, as filed with the Commission on May 28, 2004.

 

(c) The description of the registrant’s common stock contained in the registrant’s Registration Statement on Form 8-A filed with the Commission under Section 12 of the Securities Exchange Act of 1934 (the “Exchange Act”) on April 12, 2004, including any amendment or report filed for the purpose of updating such description.

 

All documents subsequently filed by the registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this registration statement and to be part hereof from the date of filing such documents.

 

Item 4.

Description of Securities. Not applicable.

 

Item 5.

Interests of Named Experts and Counsel.

 

The validity of the common stock being offered by this prospectus will be passed upon for us by Heller Ehrman White & McAuliffe LLP, Menlo Park, California. As of the date of this registration statement, Heller Ehrman White & McAuliffe LLP owns 33,750 shares of our common stock and partners of Heller Ehrman White & McAuliffe LLP own an additional 64,441 shares of common stock individually and through an investment limited liability company.

 

Item 6.

Indemnification of Directors and Officers.

 

The registrant’s Certificate of Incorporation reduces the liability of a director to the corporation or its shareholders for monetary damages for breaches of his or her fiduciary duty of care to the fullest extent permissible under Delaware law. The bylaws of the registrant further provide for indemnification of corporate agents to the maximum extent permitted by the Delaware General Corporation Law. In addition, the registrant has entered into indemnification agreements with its officers and directors.

 

Item 7.

Exemption from Registration Claimed. Not applicable.

 

Item 8.

Exhibits.

 

 

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23.2		Consent of Ernst & Young LLP, independent auditors (see p. 8).
24.1		Powers of Attorney (see signature page).
99.1		2000 Stock Option Plan.
99.2		2004 Equity Incentive Plan.

 

Item 9.

Undertakings.

 

The undersigned registrant hereby undertakes:

 

(1) to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

 

(2) that, for purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

(3) to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

 

The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

Insofar as the indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

 

[Signature Pages Follow]

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Menlo Park, State of California, on June 3, 2004.

 

 

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POWER OF ATTORNEY

 

KNOW ALL PERSONS BY THESE PRESENTS, that each persons whose signature appears below hereby constitutes and appoints Joseph K. Belanoff and Fred Kurland, and each of them acting individually, as his true and lawful attorneys-in-fact and agents, each with full power of substitution, for him in any and all capacities, to sign any and all amendments to to sign any amendments to this Registration Statement on Form S-8, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, with full power of each to act alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully for all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or his or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

 

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated:

 

Signature		Title		Date
/s/    Joseph K. Belanoff, M.D. Joseph K. Belanoff, M.D.		Chief Executive Officer and Director (Principal Executive Officer)		June 3, 2004
/s/    Fred Kurland Fred Kurland		Chief Financial Officer (Principal Financial and Accounting Officer)		June 3, 2004
/s/    James N. Wilson James N. Wilson		Director and Chairman of the Board of Directors		June 3, 2004
/s/    Alan F. Schatzberg Alan F. Schatzberg		Director		June 3, 2004
/s/    G. Leonard Baker, Jr. G. Leonard Baker, Jr.		Director		June 3, 2004
/s/    David B. Singer David B. Singer		Director		June 3, 2004
/s/    Steven Kapp Steven Kapp		Director		June 3, 2004
/s/    Alix Marduel, M.D. Alix Marduel, M.D.		Director		June 3, 2004
/s/    Joseph C. Cook, Jr. Joseph C. Cook, Jr.		Director		June 3, 2004

 

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INDEX TO EXHIBITS

 

Exhibit Number
5.1		Opinion of Heller Ehrman White & McAuliffe LLP
23.1		Consent of Heller Ehrman White & McAuliffe LLP (included in Exhibit 5.1).
23.2		Consent of Ernst & Young LLP, independent auditors (see p. 8).
24.1		Powers of Attorney (see signature page).
99.1		2000 Stock Option Plan.
99.2		2004 Equity Incentive Plan.

 

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EXHIBIT 5.1

 

June 3, 2004

 

Corcept Therapeutics Incorporated

275 Middlefield Road, Suite A

Menlo Park, CA 94025

 

Registration Statement on Form S-8

 

Ladies and Gentlemen:

 

We have examined the Registration Statement on Form S-8 (the “Registration Statement”) filed by you with the Securities and Exchange Commission (the “Commission”) on June 3, 2004 in connection with the registration under the Securities Act of 1933, as amended, of a total of 3,728,002 shares of your Common Stock (the “Shares”) reserved for issuance under the 2000 Stock Option Plan and 2004 Equity Incentive Plan.

 

In connection with this opinion, we have assumed the authenticity of all records, documents and instruments submitted to us as originals, the genuineness of all signatures, the legal capacity of natural persons and the conformity to the originals of all records, documents and instruments submitted to us as copies. We have based our opinion upon our review of the following records, documents and instruments:

 

(a)	The Amended and Restated Certificate of Incorporation of the Company, as amended to date, certified by the Secretary of State of the State of Delaware as of May 26, 2004 and certified to us by an officer of the Company as being complete and in full force and effect as of the date of this opinion;

 

(b)	The Bylaws of the Company, as amended to date, certified to us by an officer of the Company as being complete and in full force and effect as of the date of this opinion;

 

(c)

A Certificate of an officer of the Company (i) attaching records certified to us as constituting all records of proceedings and actions of the Board of Directors and stockholders of the Company relating to the adoption and approval of the Plans and the Registration Statement, and (ii) certifying as to certain factual matters;

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HellerEhrman		Corcept Therapeutics Incorporated
A T T O R N E Y S		June 3, 2004
		Page 2

 

(d)	A letter from Continental Stock Transfer & Trust Company, the transfer agent of the Company, dated May 25, 2004, as to the number of shares of common stock of the Company outstanding as of May 25, 2004;

 

(e)	The Registration Statement; and

 

(f)	The Plans.

 

This opinion is limited to the federal laws of the United States of America and the General Corporation Law of the State of Delaware. We disclaim any opinion as to any other statute, rule, regulation, ordinance, order or other promulgation of any other jurisdiction or any regional or local governmental body or as to any related judicial or administrative opinion.

 

Based upon the foregoing and our examination of such questions of law as we have deemed necessary or appropriate for the purpose of this opinion, and assuming that (i) the Registration Statement becomes and remains effective during the period when the Shares are offered, issued and sold, (ii) the Shares to be sold are issued in accordance with the terms of the applicable Plan, (iii) the Company receives the full consideration for the Shares as stated in the applicable Plan, (iv) the per share consideration for each Share includes payment of cash or other lawful consideration at least equal to the par value of the Company’s Common Stock, and (v) all applicable securities laws are complied with, it is our opinion that the Shares covered by the Registration Statement, when issued and sold by the Company, after payment therefore in the manner provided in the applicable Plan and the Registration Statement, will be legally issued, fully paid and nonassessable.

 

This opinion is rendered to you in connection with the Registration Statement and is solely for your benefit. This opinion may not be relied upon by you for any other purpose, or relied upon by any other person, firm, corporation or other entity for any purpose, without our prior written consent. We disclaim any obligation to advise you of any change of law that occurs, or any facts of which we may become aware, after the date of this opinion.

 

We hereby consent to the reference to our firm under the caption “Interests of Named Experts and Counsel” in the Registration Statement and to the filing of this opinion as an exhibit to the Registration Statement.

 

EXHIBIT 23.2

 

CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

 

We consent to the incorporation by reference in the Registration Statement (Form S-8) pertaining to the 2000 Stock Option Plan and 2004 Equity Incentive Plan of Corcept Therapeutics Incorporated of our report dated January 20, 2004, with respect to the financial statements of Corcept Therapeutics Incorporated for the year ended December 31, 2003 included in its Registration Statement (Form S-1 No. 333-112676) and related prospectus filed pursuant to Rule 424(b), filed with the Securities and Exchange Commission.

 

/S/    ERNST & YOUNG LLP

 

Palo Alto, California

May 27, 2004

                                                                   EXHIBIT 99.1

                             2000 STOCK OPTION PLAN

                                       OF

                        CORCEPT THERAPEUTICS INCORPORATED

         1.       PURPOSES OF THE PLAN

                  The purposes of this 2000 Stock Option Plan (the "Plan") of
Corcept Therapeutics Incorporated, a Delaware corporation (the "Company"), are
to:

                  (a) Encourage selected employees, directors and consultants to
improve operations and increase profits of the Company;

                  (b) Encourage selected employees, directors and consultants to
accept or continue employment or association with the Company or its Affiliates;
and

                  (c) Increase the interest of selected employees, directors and
consultants in the Company's welfare through participation in the growth in
value of the common stock, par value $0.001 per share, of the Company (the
"Common Stock").

                  Options granted under this Plan ("Options") may be "incentive
stock options" ("ISOs") intended to satisfy the requirements of Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code"), or "nonqualified
options" ("NQOs").

         2.       ELIGIBLE PERSONS

                  Every person who at the date of grant of an Option is an
employee of the Company or of any Affiliate (as defined below) of the Company is
eligible to receive NQOs or ISOs under this Plan. Every person who at the date
of grant is a consultant to, or nonemployee director of, the Company or any
Affiliate (as defined below) of the Company is eligible to receive NQOs under
this Plan. The term "Affiliate" as used in the Plan means a parent or subsidiary
corporation as defined in the applicable provisions (currently Sections 424(e)
and (f), respectively) of the Code. The term "employee" refers to individuals
who are treated as employees for federal income tax purposes, and includes an
officer or director who is an employee of the Company. The term "consultant"
includes persons employed by, or otherwise affiliated with, a consulting firm.

         3.       STOCK SUBJECT TO THIS PLAN

                  Subject to the provisions of Section 6.1.1 of the Plan, the
total number of shares of stock which may be issued under options granted
pursuant to this Plan and the



total number of shares provided for issuance under this Plan shall be the lesser
of (i) 2,000,000 shares of Common Stock and (ii) the maximum number of shares as
calculated under section 260.140.45 of Chapter 3 of Title 10 of the California
Code of Regulations. The shares covered by the portion of any grant under the
Plan which expires unexercised shall become available again for grants under the
Plan.

         4.       ADMINISTRATION

                  4.1 General. This Plan shall be administered by the Board of
Directors of the Company (the "Board") or, either in its entirety or only
insofar as required pursuant to Section 4.2 hereof, by a committee (the
"Committee") of at least two Board members to which administration of the Plan,
or of part of the Plan, is delegated (in either case, the "Administrator").

                  4.2 Public Company. From and after such time as the Company
registers a class of equity securities under Section 12 of the Securities
Exchange Act of 1934 (the "Exchange Act"), the Committee shall consist of Board
members who are "Non-Employee Directors" as defined under Rule 16b-3 promulgated
by the Securities and Exchange Commission ("Rule 16b-3"), or any successor rule
thereto.

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

                  4.4 Interpretation by Administrator. All questions of
interpretation, implementation, and application of this Plan shall be determined
by the Administrator. Such determinations shall be final and binding on all
persons.

                  4.5 Rule 16b-3. With respect to persons subject to Section 16
of the Exchange Act, if any, transactions under this Plan are intended to comply
with the applicable conditions of Rule 16b-3, or any successor rule thereto. To
the extent any


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

         5.       GRANTING OF OPTIONS; OPTION AGREEMENT

                  5.1 Termination of Plan. No options shall be granted under
this Plan after ten years from the date of adoption of this Plan by the Board.

                  5.2 Stock Option Agreement. Each Option shall be evidenced by
a written stock option agreement (the "Option Agreement"), in form satisfactory
to the Company, executed by the Company and the person to whom such Option is
granted; provided, however, that the failure by the Company, the Optionee, or
both, to execute the Option Agreement shall not invalidate the granting of an
Option, although the exercise of each option shall be subject to Section 6.1.3.

                  5.3 Type of Option. The Option Agreement shall specify whether
each Option it evidences is an NQO or an ISO.

                  5.4 Early Approval of Grants. Subject to Section 6.3.3 with
respect to ISOs, the Administrator may approve the grant of Options under this
Plan to persons who are expected to become employees, directors or consultants
of the Company, but are not employees, directors or consultants at the date of
approval, with such grant to specify whether it is effective immediately or
effective only on such person becoming an employee, director or consultant.

         6.       TERMS AND CONDITIONS OF OPTIONS

                  Each Option granted under this Plan shall be subject to the
terms and conditions set forth in Section 6.1. NQOs shall be also subject to the
terms and conditions set forth in Section 6.2, but not those set forth in
Section 6.3. ISOs shall also be subject to the terms and conditions set forth in
Section 6.3, but not those set forth in Section 6.2.

                  6.1 Terms and Conditions to Which All Options Are Subject.
Options granted under this Plan shall be subject to the following terms and
conditions:

                      6.1.1 Changes in Capital Structure. Subject to Section
6.1.2, if the stock of the Company is changed by reason of a stock split,
reverse stock split, stock


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dividend, or recapitalization, combination or reclassification,
appropriate adjustments shall be made by the Board in (a) the number and class
of shares of stock subject to this Plan and each Option outstanding under this
Plan, and (b) the exercise price of each outstanding Option; provided, however,
that the Company shall not be required to issue fractional shares as a result of
any such adjustments. Each such adjustment shall be subject to approval by the
Board in its absolute discretion.

                      6.1.2 Corporate Transactions.

                           (a) Dissolution or Liquidation. In the event of the
proposed dissolution or liquidation of the Company, the Administrator shall
notify each Optionee at least 30 days prior to such proposed action. To the
extent not previously exercised, all Options will terminate immediately prior to
the consummation of such proposed action.

                           (b) Merger or Asset Sale. In the event of (i) a sale
or other disposition of all or substantially all of the assets of the Company,
or (ii) a merger, consolidation, reorganization, sale or similar transaction or
series of related transactions in which the holders of the Company's outstanding
shares immediately before such transaction or series of transactions do not,
immediately after such transaction or series of transactions, retain stock
representing a majority of the voting power of the surviving entity:

                               (i) Options. If the successor entity to the
Company (including as a "successor" any purchaser of substantially all of the
assets of the Company), or a parent or subsidiary of the successor entity, does
not assume an Option or substitute an equivalent option for an Option, the
Optionee whose Option is not assumed or substituted for shall have the right to
exercise the Option as to 100% of the shares of Common Stock covered by the
Option, including shares as to which it would not otherwise be exercisable. If
an Option is exercisable in lieu of assumption or substitution in the event of a
merger, sale of assets or other transaction, the Administrator shall notify the
Optionee that the Option shall be fully exercisable for a period of at least 15
days from the date of such notice, and the Option shall terminate upon the
expiration of such period. For the purposes of this paragraph, an Option shall
be considered assumed if, following the merger, sale of assets, or other
transaction, the new option confers the right to purchase or receive, for each
share of Common Stock subject to the Option immediately prior to the merger,
sale of assets, or other transaction, the consideration (whether stock, cash, or
other securities or property) received in such transaction by holders of Common
Stock for each share held on the effective date of the transaction (and if
holders were offered a choice of consideration, the type of consideration chosen
by the holders of a majority of the outstanding shares); provided, however, that
if such consideration received was not solely common stock of the successor
entity or its parent entity, the Option shall also be deemed assumed if the
Administrator, with the consent of


                                       4



the successor corporation, provides for the consideration to be received
upon the exercise of the Option, for each share of Common Stock subject to the
Option, to be solely common stock of the successor entity or its parent entity
equal in fair market value to the per share consideration received by holders of
Common Stock in the merger, sale of assets or other transaction.

                               (ii) Shares Subject to Right of Repurchase. Any
shares purchased upon exercise of an Option which are subject to a right of
repurchase of the Company shall be exchanged for the consideration (whether
stock, cash, or other securities or property) received in the merger, asset sale
or other transaction by the holders of the Company's Common Stock for each share
held on the effective date of the transaction, as described in the preceding
paragraph; provided, however, that if the consideration received by the holders
of the Company's Common Stock is not solely common stock, and the Administrator
provides, pursuant to paragraph (b)(i) above, that holders of Options shall
receive common stock of the successor entity or its parent entity upon exercise
of the Options, then any shares subject to a right of repurchase shall also be
exchanged for common stock of the successor or its parent. If in such exchange
the Optionee receives shares of stock of the successor or a parent or subsidiary
of such successor entity, and if the successor entity has agreed to assume or
substitute for Options as provided in paragraph (b)(i) above, such exchanged
shares shall continue to be subject to a right of repurchase as provided in the
Optionee's Stock Option Plan stock purchase agreement. If, as provided in the
preceding paragraph, the Optionee shall have the right to exercise an Option as
to all of the shares of Common Stock covered thereby, all shares that are
subject to a right of repurchase of the Company shall be released from such
right of repurchase and shall be fully vested.

                  6.1.3 Time of Option Exercise. Subject to Section 5 and
Section 6.3.4, Options granted under this Plan shall be exercisable (a)
immediately as of the effective date of the Option Agreement granting the
Option, or (b) in accordance with a schedule related to the date of the grant of
the Option, the date of first employment or service, or such other date as may
be set by the Administrator (in any case, the "Vesting Base Date") and specified
in the Option Agreement relating to such Option; provided, however, that with
respect to Options granted to employees who are not officers or directors, the
right to exercise an Option must vest at the rate of at least 20% per year over
five years from the date the Option was granted. Options granted to officers,
directors or consultants may become fully exercisable, subject to reasonable
conditions such as continued employment or service, at any time or during any
period established by the Board of the Administrator in accordance with this
Plan. In any case, no Option shall be exercisable until a written Option
Agreement in form satisfactory to the Company is executed by the Company and the
Optionee.


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                  6.1.4 Option Grant Date. Except in the case of grants
contingent on the beginning of employment or other service, as described in
Section 5.4, the date of grant of an Option under this Plan shall be the date as
of which the Administrator approves the grant.

                  6.1.5 Nonassignability of Option Rights. Except as otherwise
determined by the Administrator and expressly set forth in the Option Agreement,
no Option granted under this Plan shall be assignable or otherwise transferable
by the Optionee except by will or by the laws of descent and distribution.
During the life of the Optionee, except as otherwise determined by the
Administrator and expressly set forth in the Optionee's Option Agreement, an
Option shall be exercisable only by the Optionee.

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

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

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

                           (c) Any other form of legal consideration determined
and permitted by the Administrator.

                  6.1.7 Termination of Employment.


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                           (a) If, for any reason other than death, disability
or termination for "cause" (as defined below), an Optionee ceases to be employed
by the Company or any of its Affiliates (such event being called a
"Termination"), Options held at the date of Termination (to the extent then
exercisable) may be exercised in whole or in part at any time within three
months of the date of such Termination, or such other period of not less than 30
days after the date of such Termination as is specified in the Option Agreement
(but in no event after the Expiration Date).

                           (b) If an Optionee dies while employed by the Company
or an Affiliate or within the period that the Option remains exercisable after
Termination, Options then held (to the extent then exercisable) may be
exercised, in whole or in part, by the Optionee, by the Optionee's personal
representative, or by the person to whom the Option is transferred by devise or
the laws of descent and distribution, at any time within 12 months after the
death of the Optionee, or such other period of not less than six months from the
date of Termination as is specified in the Option Agreement (but in no event
after the Expiration Date).

                           (c) If an Optionee ceases to be employed by the
Company as a result of his or her disability, the Optionee may, but only within
six months after the date of Termination (and in no event after the Expiration
Date), exercise the Option to the extent otherwise entitled to exercise it at
the date of Termination; provided, however, that if such disability is not a
"disability" as such term is defined in Section 22(e)(3) of the Code, in the
case of an ISO such ISO shall automatically convert to an NQO on the day three
months and one day following such Termination.

                           (d) If an Optionee is terminated for "cause" all
Options then held by such Optionee shall terminate and no longer be exercisable
as of the date of Termination. For purposes of this Section 6.1.7, "cause" shall
mean Termination (i) by reason of Optionee's commission of a felony, misdemeanor
or other illegal conduct involving dishonesty, fraud or other matters of moral
turpitude, (ii) by reason of Optionee's dishonesty towards, fraud upon, or
deliberate injury or attempted injury to the Company or any of its Affiliates,
or (iii) by reason of Optionee's willfully engaging in misconduct which is
materially and demonstrably injurious to the Company or any of its Affiliates.

                           (e) To the extent that the Optionee was not entitled
to exercise the Option at the date of Termination or if the Optionee does not
exercise such Option to the extent so entitled within the time specified herein,
the Option shall terminate, and the shares covered by such Option shall revert
to the Plan.

                           (f) For purposes of this Section 6.1.7, "employment"
includes service as an employee, a director or a consultant. For purposes of
this Section 6.1.7, an Optionee's employment shall not be deemed to terminate by
reason of sick
                                       7



leave, military leave or other leave of absence approved by the Administrator,
if the period of any such leave does not exceed three months or, if longer, if
the Optionee's right to reemployment by the Company or any Affiliate is
guaranteed either contractually or by statute.

                  6.1.8 Repurchase of Stock.

                       (a) At the option of the Administrator, the stock to be
delivered pursuant to the exercise of any Option granted to an employee,
director or consultant under this Plan may be subject to a right of repurchase
in favor of the Company with respect to any employee, or director or consultant
whose employment, or director or consulting relationship with the Company is
terminated. With respect to shares issued to employees who are not officers or
directors, such right of repurchase shall be exercisable on the following terms,
as the Administrator may determine in the grant of the Option:

                           (i) at the Option exercise price and (i) shall lapse
at the rate of at least 20% per year over five years from the date the Option is
granted (without regard to the date it was exercised or becomes exercisable),
and must be exercised for cash or cancellation of purchase money indebtedness
within three months of such termination and (ii) if the right is assignable by
the Company, the assignee must pay the Company upon assignment of the right
(unless the assignee is a 100% owned subsidiary of the Company or is an
Affiliate) cash equal to the difference between the Option exercise price and
the value (determined as set forth in Section 6.1.11) of the stock to be
purchased if the Option exercise price is less than such value; and/or

                           (ii) at the higher of the Option exercise price or
the value (determined as set forth in Section 6.1.11) of the stock being
purchased on the date of termination, and must be exercised for cash or
cancellation of purchase money indebtedness within three months of termination
of employment (or in the case of securities issued upon exercise of options
after the date of termination, within three months after the date of exercise),
and such right shall terminate when the Company's securities become publicly
traded.

                       (b) Any shares which are issued to an officer, director
or consultant of the Company or an affiliate of the Company may be subject to a
right of repurchase on the terms set forth above, or on any other terms
determined by the Administrator, including terms containing additional or
greater restrictions, in the absolute discretion of the Administrator.

                       (c) Determination of the number of shares subject to any
such right of repurchase shall be made as of the date the employee's employment
by, director's director relationship with, or consultant's consulting
relationship with, the
                                      8




Company terminates, not as of the date that any Option granted to such employee,
director or consultant is thereafter exercised.

                  6.1.9 Withholding and Employment Taxes. At the time of
exercise of an Option or at such other time or times as the amount of such
obligations becomes determinable (the "Tax Date"), the Optionee shall remit to
the Company in cash all applicable federal and state withholding and employment
taxes due by reason of the exercise of an Option, the disposition of Common
Stock acquired through exercise of an Option, or the lapse of rights to
repurchase Common Stock. The Administrator may, in its absolute discretion after
considering any tax or accounting consequences, permit an Optionee to (i)
deliver a full recourse promissory note on such terms as the Administrator deems
appropriate, (ii) tender to the Company previously owned shares of Stock or
other securities of the Company, or (iii) have shares of Common Stock which are
acquired upon exercise of the Option withheld by the Company to pay some or all
of the amount of tax that is required by law to be withheld by the Company as a
result of the exercise of such Option, the disposition of Common Stock acquired
through exercise of an Option, or the lapse of rights to repurchase Common
Stock, subject to the following limitations:

                       (a) Any election pursuant to clause (ii) above, where the
Optionee is tendering Common Stock issued pursuant to the exercise of an Option,
shall require that such shares be held at least six months prior to the Tax
Date.

                       (b) Any of the foregoing limitations may be waived (or
additional limitations may be imposed) by the Administrator, in its absolute
discretion, if the Administrator determines that such foregoing limitations are
not required (or that such additional limitations are required) in order that
the transaction shall be exempt from Section 16(b) of the Exchange Act pursuant
to Rule 16b-3, or any successor rule thereto. In addition, any of the foregoing
limitations may be waived by the Administrator, in its sole discretion, if the
Administrator determines that Rule 16b-3, or any successor rule thereto, is not
applicable to the exercise of the Option by the Optionee or for any other
reason.

                       (c) Any securities tendered or withheld in accordance
with this Section 6.1.9 shall be valued by the Company as of the Tax Date.

                  6.1.10 Other Provisions. Each Option granted under this Plan
may contain such other terms, provisions, and conditions not inconsistent with
this Plan as may be determined by the Administrator, and each ISO granted under
this Plan shall include such provisions and conditions as are necessary to
qualify the Option as an "incentive stock option" within the meaning of Section
422 of the Code. If Options provide for a right of first refusal in favor of the
Company with respect to stock acquired by employees, directors or consultants,
such Options shall provide that the right of first


                                       9



refusal shall terminate upon the closing of the Company's initial registered
public offering to the public generally.

                  6.1.11 Determination of Value. For purposes of the Plan, the
value of Common Stock or other securities of the Company shall be determined as
follows:

                         (a) If the stock of the Company is listed on any
established stock exchange or a national market system, including without
limitation the Nasdaq Stock Market, its fair market value shall be the closing
sales price for such stock or the closing bid if no sales were reported, as
quoted on such system or exchange for the date the value is to be determined (or
if there are no sales for such date, then for the last preceding business day on
which there were sales), as reported in the Wall Street Journal or similar
publication.

                         (b) If the stock of the Company is regularly quoted by
a recognized securities dealer but selling prices are not reported, its fair
market value shall be the mean between the high bid and low asked prices for the
stock on the date the value is to be determined (or if there are no quoted
prices for the date of grant, then for the last preceding business day on which
there were quoted prices).

                         (c)In the absence of an established market for the
stock, the fair market value thereof shall be determined in good faith by the
Administrator, by consideration of such factors as the Administrator in its
discretion deems appropriate among the recent issue price of other securities of
the Company, the Company's net worth, prospective earning power, dividend-paying
capacity, and other relevant factors, including the goodwill of the Company, the
economic outlook in the Company's industry, the Company's position in the
industry and its management, and the values of stock of other corporations in
the same or a similar line of business.

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

                  6.1.13 Exercise Price. The exercise price of any Option
granted to any person who owns, directly or by attribution under Section 424(d)
of the Code, stock possessing more than ten percent of the total combined voting
power of all classes of stock of the Company or of any Affiliate (a "Ten Percent
Stockholder") shall in no event be less than 110% of the fair market value
(determined in accordance with Section 6.1.11) of the stock covered by the
Option at the time the Option is granted.


                                       10





                  6.1.14 Limits on Grants for Qualified Incentive-Based
Compensation. The Company may not issue Options covering in the aggregate more
than 500,000 shares of Common Stock to any one participant in any calendar year.

         6.2      Exercise Price of NQOs. Except as set forth in Section 6.1.13,
the exercise price of any NQO granted under this Plan shall be not less than 85%
of the fair market value (determined in accordance with Section 6.1.11) of the
stock subject to the Option on the date of grant.

         6.3      Terms and Conditions to Which Only ISOs Are Subject. Options
granted under this Plan which are designated as ISOs shall be subject to the
following terms and conditions:

                  6.3.1 Exercise Price. Except as set forth in Section 6.1.13,
the exercise price of an ISO shall be determined in accordance with the
applicable provisions of the Code and shall in no event be less than the fair
market value (determined in accordance with Section 6.1.11) of the stock covered
by the Option at the time the Option is granted or deemed granted under Section
6.3.3.

                  6.3.2 Disqualifying Dispositions. If stock acquired by
exercise of an ISO granted pursuant to this Plan is disposed of in a
"disqualifying disposition" within the meaning of Section 422 of the Code, the
holder of the stock immediately before the disposition shall promptly notify the
Company in writing of the date and terms of the disposition and shall provide
such other information regarding the Option as the Company may reasonably
require.

                  6.3.3 Grant Date. If an ISO is granted in anticipation of
employment as provided in Section 5.4, the Option shall be deemed granted,
without further approval, on the date the grantee assumes the employment
relationship forming the basis for such grant, and, in addition, satisfies all
requirements of this Plan for Options granted on that date.

                  6.3.4 Vesting. Notwithstanding any other provision of this
Plan, ISOs granted under all incentive stock option plans of the Company and its
subsidiaries may not "vest" for more than $100,000 in fair market value of stock
(measured on the grant dates(s)) in any calendar year. For purposes of the
preceding sentence, an option "vests" when it first becomes exercisable. If, by
their terms, such ISOs taken together would vest to a greater extent in a
calendar year, and unless otherwise provided by the Administrator, the vesting
limitation described above shall be applied by deferring the exercisability of
those ISOs or portions of ISOs which have the highest per share exercise prices;
but in no event shall more than $100,000 in fair market value of stock (measured
on the grant date(s)) vest in any calendar year. The ISOs or portions of ISOs
whose exercisability is so deferred shall become exercisable on the first day of
the first



                                       11




subsequent calendar year during which they may be exercised, as determined by
applying these same principles and all other provisions of this Plan including
those relating to the expiration and termination of ISOs. In no event, however,
will the operation of this Section 6.3.4 cause an ISO to vest before its terms
or, having vested, cease to be vested.

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

         7.       MANNER OF EXERCISE

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

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


         8.       EMPLOYMENT OR CONSULTING RELATIONSHIP

                  Nothing in this Plan or any Option granted thereunder shall
interfere with or limit in any way the right of the Company or of any of its
Affiliates to terminate any Optionee's employment or consulting relationship at
any time, nor confer upon any Optionee any right to continue in the employ of,
or consult with, the Company or any of its Affiliates, nor interfere in any way
with provisions in the Company's charter documents or applicable law relating to
the election, appointment, terms of office, and removal of members of the Board.

         9.       FINANCIAL INFORMATION

                  The Company shall provide to each Optionee during the period
such Optionee holds an outstanding Option, and to each holder of Common Stock
acquired upon exercise of Options granted under the Plan for so long as such
person is a holder of such Common Stock, annual financial statements of the
Company as prepared either by the Company or independent certified public
accountants of the Company. Such financial



                                       12




statements shall include, at a minimum, a balance sheet and an income statement,
and shall be delivered as soon as practicable following the end of the Company's
fiscal year. The provisions of this Section 9 shall not apply with respect to
Optionees who are key employees of the Company whose duties in connection with
the Company assures them access to information equivalent to the information
provided in the financial statements.

         10.      CONDITIONS UPON ISSUANCE OF SHARES

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

         11.      NONEXCLUSIVITY OF THE PLAN

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

         12.      MARKET STANDOFF

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

         13.      AMENDMENTS TO PLAN

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


                                       13



approval is required to preserve option grants as "qualified performance-based
compensation" under Section 162(m) of the Code.

         14.      EFFECTIVE DATE OF PLAN

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

Plan adopted by the Board of Directors on:  October 6, 2000
Plan approved by Stockholders on:           October 7, 2000.
Amendments increasing number of shares to 2,000,000 approved by the Board of
Directors on May 3, 2001 and by the Stockholders on May 7, 2001.

                                       14

EXHIBIT 99.2

 

2004 EQUITY INCENTIVE PLAN

OF

CORCEPT THERAPEUTICS, INC.

 

1.	Purpose of this Plan

 

The purpose of this 2004 Equity Incentive Plan is to enhance the long-term stockholder value of Corcept Therapeutics, Inc. by offering opportunities to eligible individuals to participate in the growth in value of the equity of Corcept Therapeutics, Inc.

 

2.	Definitions and Rules of Interpretation

 

2.1 Definitions.

 

This Plan uses the following defined terms:

 

(a) “Administrator” means the Board or the Committee, or any officer or employee of the Company to whom the Board or the Committee delegates authority to administer this Plan.

 

(b) “Affiliate” means a “parent” or “subsidiary” (as each is defined in Section 424 of the Code) of the Company and any other entity that the Board or Committee designates as an “Affiliate” for purposes of this Plan.

 

(c) “Applicable Law” means any and all laws of whatever jurisdiction, within or without the United States, and the rules of any stock exchange or quotation system on which Shares are listed or quoted, applicable to the taking or refraining from taking of any action under this Plan, including the administration of this Plan and the issuance or transfer of Awards or Award Shares.

 

(d) “Award” means a Stock Award, SAR, Cash Award, or Option granted in accordance with the terms of this Plan.

 

(e) “Award Agreement” means the document evidencing the grant of an Award.

 

(f) “Award Shares” means Shares covered by an outstanding Award or purchased under an Award.

 

(g) “Awardee” means: (i) a person to whom an Award has been granted, including a holder of a Substitute Award, (ii) a person to whom an Award has been transferred in accordance with all applicable requirements of Sections 6.5, 7(h), and 16.

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(h) “Board” means the Board of Directors of the Company.

 

(i) “Cash Award” means the right to receive cash as described in Section 8.3.

 

(j) “Cause” means employment related dishonesty, fraud, misconduct or disclosure or misuse of confidential information, or other employment related conduct that is likely to cause significant injury to the Company, an Affiliate, or any of their respective employees, officers or directors (including, without limitation, commission of a felony or similar offense), in each case as determined by the Administrator. “Cause” shall not require that a civil judgment or criminal conviction have been entered against or guilty plea shall have been made by the Awardee regarding any of the matters referred to in the previous sentence. Accordingly, the Administrator shall be entitled to determine “Cause” based on the Administrator’s good faith belief. If the Awardee is criminally charged with a felony or similar offense that shall be a sufficient, but not a necessary, basis for such belief.

 

(k) “Change in Control” means any transaction or event that the Board specifies as a Change in Control under Section 10.4.

 

(l) “Code” means the Internal Revenue Code of 1986.

 

(m) “Committee” means a committee composed of Company Directors appointed in accordance with the Company’s charter documents and Section 4.

 

(n) “Company” means Corcept Therapeutics, Inc., a Delaware corporation.

 

(o) “Company Director” means a member of the Board.

 

(p) “Consultant” means an individual who, or an employee of any entity that, provides bona fide services to the Company or an Affiliate not in connection with the offer or sale of securities in a capital-raising transaction, but who is not an Employee.

 

(q) “Director” means a member of the Board of Directors of the Company or an Affiliate.

 

(r) “Divestiture” means any transaction or event that the Board specifies as a Divestiture under Section 10.5.

 

(s) “Domestic Relations Order” means a “domestic relations order” as defined in, and otherwise meeting the requirements of, Section 414(p) of the Code, except that reference to a “plan” in that definition shall be to this Plan.

 

2

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(t) “Effective Date” means the first date of the sale by the Company of shares of its capital stock in an initial public offering pursuant to a registration statement on Form S-1 filed with the SEC.

 

(u) “Employee” means a regular employee of the Company or an Affiliate, including an officer or Director, who is treated as an employee in the personnel records of the Company or an Affiliate, but not individuals who are classified by the Company or an Affiliate as: (i) leased from or otherwise employed by a third party, (ii) independent contractors, or (iii) intermittent or temporary workers. The Company’s or an Affiliate’s classification of an individual as an “Employee” (or as not an “Employee”) for purposes of this Plan shall not be altered retroactively even if that classification is changed retroactively for another purpose as a result of an audit, litigation or otherwise. An Awardee shall not cease to be an Employee due to transfers between locations of the Company, or between the Company and an Affiliate, or to any successor to the Company or an Affiliate that assumes the Awardee’s Options under Section 10. Neither service as a Director nor receipt of a director’s fee shall be sufficient to make a Director an “Employee.”

 

(v) “Exchange Act” means the Securities Exchange Act of 1934.

 

(w) “Executive” means, if the Company has any class of any equity security registered under Section 12 of the Exchange Act, an individual who is subject to Section 16 of the Exchange Act or who is a “covered employee” under Section 162(m) of the Code, in either case because of the individual’s relationship with the Company or an Affiliate. If the Company does not have any class of any equity security registered under Section 12 of the Exchange Act, “Executive” means any (i) Director, (ii) officer elected or appointed by the Board, or (iii) beneficial owner of more than 10% of any class of the Company’s equity securities.

 

(x) “Expiration Date” means, with respect to an Award, the date stated in the Award Agreement as the expiration date of the Award or, if no such date is stated in the Award Agreement, then the last day of the maximum exercise period for the Award, disregarding the effect of an Awardee’s Termination or any other event that would shorten that period.

 

(y) “Fair Market Value” means the value of Shares as determined under Section 17.2.

 

(z) “Fundamental Transaction” means any transaction or event described in Section 10.3.

 

(aa) “Good Reason” means (i) a diminution in salary or bonus potential or (ii) requiring Awardee to work in a location (other than normal business travel) which is more than 50 miles from Awardee’s principal place of business before the change.

 

3

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(bb) “Grant Date” means the date the Administrator approves the grant of an Award. However, if the Administrator specifies that an Award’s Grant Date is a future date or the date on which a condition is satisfied, the Grant Date for such Award is that future date or the date that the condition is satisfied.

 

(cc) “Incentive Stock Option” means an Option intended to qualify as an incentive stock option under Section 422 of the Code and designated as an Incentive Stock Option in the Award Agreement for that Option.

 

(dd) “Involuntary Termination” means termination by the Company without Cause or termination by the Awardee for Good Reason.

 

(ee) “Nonstatutory Option” means any Option other than an Incentive Stock Option.

 

(ff) “Objectively Determinable Performance Condition” shall mean a performance condition (i) that is established (A) at the time an Award is granted or (B) no later than the earlier of (1) 90 days after the beginning of the period of service to which it relates, or (2) before the elapse of 25% of the period of service to which it relates, (ii) that is uncertain of achievement at the time it is established, and (iii) the achievement of which is determinable by a third party with knowledge of the relevant facts. Examples of measures that may be used in Objectively Determinable Performance Conditions include net order dollars, net profit dollars, net profit growth, net revenue dollars, revenue growth, individual performance, earnings per share, return on assets, return on equity, and other financial objectives, objective customer satisfaction indicators and efficiency measures, each with respect to the Company and/or an Affiliate or individual business unit.

 

(gg) “Officer” means an officer of the Company as defined in Rule 16a-1 adopted under the Exchange Act.

 

(hh) “Option” means a right to purchase Shares of the Company granted under this Plan.

 

(ii) “Option Price” means the price payable under an Option for Shares, not including any amount payable in respect of withholding or other taxes.

 

(jj) “Option Shares” means Shares covered by an outstanding Option or purchased under an Option.

 

(kk) “Plan” means this 2004 Equity Incentive Plan of Corcept Therapeutics, Inc.

 

(ll) “Prior Plans” means the Company’s 2000 Stock Option Plan.

 

4

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(mm) “Purchase Price” means the price payable under a Stock Award for Shares, not including any amount payable in respect of withholding or other taxes.

 

(nn) “Rule 16b-3” means Rule 16b-3 adopted under Section 16(b) of the Exchange Act.

 

(oo) “SAR” or “Stock Appreciation Right” means a right to receive cash and/or Shares based on a change in the Fair Market Value of a specific number of Shares pursuant to an Award Agreement, as described in Section 8.1.

 

(pp) “Securities Act” means the Securities Act of 1933.

 

(qq) “Share” means a share of the common stock of the Company or other securities substituted for the common stock under Section 10.

 

(rr) “Stock Award” means an offer by the Company to sell shares subject to certain restrictions pursuant to the Award Agreement as described in Section 8.2 or, as determined by the Committee, a notional account representing the right to be paid an amount based on Shares.

 

(ss) “Substitute Award” means a Substitute Option, Substitute SAR or Substitute Stock Award granted in accordance with the terms of this Plan.

 

(tt) “Substitute Option” means an Option granted in substitution for, or upon the conversion of, an option granted by another entity to purchase equity securities in the granting entity.

 

(uu) “Substitute SAR” means a SAR granted in substitution for, or upon the conversion of, a stock appreciation right granted by another entity with respect to equity securities in the granting entity.

 

(vv) “Substitute Stock Award” means a Stock Award granted in substitution for, or upon the conversion of, a stock award granted by another entity to purchase equity securities in the granting entity.

 

(ww) “Termination” means that the Awardee has ceased to be, with or without any cause or reason, an Employee, Director or Consultant. However, unless so determined by the Administrator, or otherwise provided in this Plan, “Termination” shall not include a change in status from an Employee, Consultant or Director to another such status. An event that causes an Affiliate to cease being an Affiliate shall be treated as the “Termination” of that Affiliate’s Employees, Directors, and Consultants.

 

5

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2.2 Rules of Interpretation. Any reference to a “Section,” without more, is to a Section of this Plan. Captions and titles are used for convenience in this Plan and shall not, by themselves, determine the meaning of this Plan. Except when otherwise indicated by the context, the singular includes the plural and vice versa. Any reference to a statute is also a reference to the applicable rules and regulations adopted under that statute. Any reference to a statute, rule or regulation, or to a section of a statute, rule or regulation, is a reference to that statute, rule, regulation, or section as amended from time to time, both before and after the Effective Date and including any successor provisions.

 

3.	Shares Subject to this Plan; Term of this Plan

 

3.1 Number of Award Shares. The Shares issuable under this Plan shall be authorized but unissued or reacquired Shares, including Shares repurchased by the Company on the open market. The number of Sharesinitially reserved for issuance over the term of this Plan shall be 3,000,000. The maximum number of Shares shall be cumulatively increased on the first January 1 after the Effective Date and each January 1 thereafter for 9 more years, by a number of Shares equal to the least of (a) 2% of the number of Shares issued and outstanding on the immediately preceding December 31, (b) 1,000,000 Shares and (c) a number of Shares set by the Board. When an Award is granted, the maximum number of Shares that may be issued under this Plan shall be reduced by the number of Shares covered by that Award. However, if an Award later terminates or expires without having been exercised in full, the maximum number of shares that may be issued under this Plan shall be increased by the number of Shares that were covered by, but not purchased under, that Award. By contrast, the repurchase of Shares by the Company shall not increase the maximum number of Shares that may be issued under this Plan.

 

3.2 Source of Shares. Award Shares may be: (a) Shares that have never been issued, (b) Shares that have been issued but are no longer outstanding, or (c) Shares that are outstanding and are acquired to discharge the Company’s obligation to deliver Award Shares.

 

3.3 Term of this Plan

 

(a) This Plan shall be effective on, and Awards may be granted under this Plan on and after, the earliest the date on which the Plan has been both adopted by the Board and approved by the Company’s stockholders.

 

(b) Subject to the provisions of Section 13, Awards may be granted under this Plan for a period of ten years from the earlier of the date on which the Board approves this Plan and the date the Company’s stockholders approve this Plan. Accordingly, Awards may not be granted under this Plan after the earlier of those dates.

 

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4.	Administration

 

4.1 General

 

(a) The Board shall have ultimate responsibility for administering this Plan. The Board may delegate certain of its responsibilities to a Committee, which shall consist of at least two members of the Board. The Board or the Committee may further delegate its responsibilities to any Employee of the Company or any Affiliate. Where this Plan specifies that an action is to be taken or a determination made by the Board, only the Board may take that action or make that determination. Where this Plan specifies that an action is to be taken or a determination made by the Committee, only the Committee may take that action or make that determination. Where this Plan references the “Administrator,” the action may be taken or determination made by the Board, the Committee, or other Administrator. However, only the Board or the Committee may approve grants of Awards to Executives, and an Administrator other than the Board or the Committee may grant Awards only within the guidelines established by the Board or Committee. Moreover, all actions and determinations by any Administrator are subject to the provisions of this Plan.

 

(b) So long as the Company has registered and outstanding a class of equity securities under Section 12 of the Exchange Act, the Committee shall consist of Company Directors who are “Non-Employee Directors” as defined in Rule 16b-3 and, after the expiration of any transition period permitted by Treasury Regulations Section 1.162-27(h)(3), who are “outside directors” as defined in Section 162(m) of the Code.

 

4.2 Authority of the Board or the Committee. Subject to the other provisions of this Plan, the Board or the Committee shall have the authority to:

 

(a) grant Awards, including Substitute Awards;

 

(b) determine the Fair Market Value of Shares;

 

(c) determine the Option Price and the Purchase Price of Awards;

 

(d) select the Awardees;

 

(e) determine the times Awards are granted;

 

(f) determine the number of Shares subject to each Award;

 

(g) determine the methods of payment that may be used to purchase Award Shares;

 

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(h) determine the methods of payment that may be used to satisfy withholding tax obligations;

 

(i) determine the other terms of each Award, including but not limited to the time or times at which Awards may be exercised, whether and under what conditions an Award is assignable, and whether an Option is a Nonstatutory Option or an Incentive Stock Option;

 

(j) modify or amend any Award;

 

(k) authorize any person to sign any Award Agreement or other document related to this Plan on behalf of the Company;

 

(l) determine the form of any Award Agreement or other document related to this Plan, and whether that document, including signatures, may be in electronic form;

 

(m) interpret this Plan and any Award Agreement or document related to this Plan;

 

(n) correct any defect, remedy any omission, or reconcile any inconsistency in this Plan, any Award Agreement or any other document related to this Plan;

 

(o) adopt, amend, and revoke rules and regulations under this Plan, including rules and regulations relating to sub-plans and Plan addenda;

 

(p) adopt, amend, and revoke special rules and procedures which may be inconsistent with the terms of this Plan, set forth (if the Administrator so chooses) in sub-plans regarding (for example) the operation and administration of this Plan and the terms of Awards, if and to the extent necessary or useful to accommodate non-U.S. Applicable Laws and practices as they apply to Awards and Award Shares held by, or granted or issued to, persons working or resident outside of the United States or employed by Affiliates incorporated outside the United States;

 

(q) determine whether a transaction or event should be treated as a Change in Control, a Divestiture or neither;

 

(r) determine the effect of a Fundamental Transaction and, if the Board determines that a transaction or event should be treated as a Change in Control or a Divestiture, then the effect of that Change in Control or Divestiture; and

 

(s) make all other determinations the Administrator deems necessary or advisable for the administration of this Plan.

 

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4.3 Scope of Discretion. Subject to the provisions of this Section 4.3, on all matters for which this Plan confers the authority, right or power on the Board, the Committee, or other Administrator to make decisions, that body may make those decisions in its sole and absolute discretion. Those decisions will be final, binding and conclusive. In making its decisions, the Board, Committee or other Administrator need not treat all persons eligible to receive Awards, all Awardees, all Awards or all Award Shares the same way. Notwithstanding anything herein to the contrary, and except as provided in Section 13.3, the discretion of the Board, Committee or other Administrator is subject to the specific provisions and specific limitations of this Plan, as well as all rights conferred on specific Awardees by Award Agreements and other agreements.

 

5.	Persons Eligible to Receive Awards

 

5.1 Eligible Individuals. Awards (including Substitute Awards) may be granted to, and only to, Employees, Directors and Consultants, including to prospective Employees, Directors and Consultants conditioned on the beginning of their service for the Company or an Affiliate. However, Incentive Stock Options may only be granted to Employees, as provided in Section 7(g).

 

5.2 Section 162(m) Limitation.

 

(a) Options and SARs. Subject to the provisions of this Section 5.2, for so long as the Company is a “publicly held corporation” within the meaning of Section 162(m) of the Code: (i) no Employee may be granted one or more SARs and Options within any fiscal year of the Company under this Plan to purchase more than 2,000,000 Shares under Options or to receive compensation calculated with reference to more than that number of Shares under SARs, subject to adjustment pursuant to Section 10, (ii) Options and SARs may be granted to an Executive only by the Committee (and, notwithstanding anything to the contrary in Section 4.1(a), not by the Board). If an Option or SAR is cancelled without being exercised or of the Option Price of an Option is reduced, that cancelled or repriced Option or SAR shall continue to be counted against the limit on Awards that my be granted to any individual under this Section 5.2. Notwithstanding anything herein to the contrary, a new Employee of the Company or an Affiliate shall be eligible to receive up to a maximum of 2,500,000 Shares under Options in the calendar year which they commence employment, or such compensation calculated with reference to such number of Shares under SARs, subject to adjustment pursuant to Section 10.

 

(b) Cash Awards and Stock Awards. Any Cash Award or Stock Award intended as “qualified performance-based compensation” within the meaning of Section 162(m) of the Code must vest or become exercisable contingent on the achievement of one or more Objectively Determinable Performance Conditions. The Committee shall have the discretion to determine the time and manner of compliance with Section 162(m) of the Code.

 

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6.	Terms and Conditions of Options

 

The following rules apply to all Options:

 

6.1 Price. Except as specifically provided herein, no nonstatutory Option may have an Option Price less than 85% of the Fair Market Value of the Shares on the Grant Date. No Option intended as “qualified incentive-based compensation” within the meaning of Section 162(m) of the Code may have an Option Price less than 100% of the Fair Market Value of the Shares on the Grant Date. In no event will the Option Price of any Option be less than the par value of the Shares issuable under the Option if that is required by Applicable Law. The Option Price of an Incentive Stock Option shall be subject to Section 7(f).

 

6.2 Term. No Option shall be exercisable after its Expiration Date. No Option may have an Expiration Date that is more than ten years after its Grant Date. Additional provisions regarding the term of Incentive Stock Options are provided in Sections 7(a) and 7(e).

 

6.3 Vesting. Options shall be exercisable: (a) on the Grant Date, or (b) in accordance with a schedule related to the Grant Date, the date the Optionee’s directorship, employment or consultancy begins, or a different date specified in the Option Agreement. Additional provisions regarding the vesting of Incentive Stock Options are provided in Section 7(c). No Option granted to an individual who is subject to the overtime pay provisions of the Fair Labor Standards Act may be exercised before the expiration of six months after the Grant Date.

 

6.4 Form and Method of Payment.

 

(a) The Board or Committee shall determine the acceptable form and method of payment for exercising an Option.

 

(b) Acceptable forms of payment for all Option Shares are cash, check or wire transfer, denominated in U.S. dollars except as specified by the Administrator for non-U.S. Employees or non-U.S. sub-plans.

 

(c) In addition, the Administrator may permit payment to be made by any of the following methods:

 

(i) other Shares, or the designation of other Shares, which (A) are “mature” shares for purposes of avoiding variable accounting treatment under generally accepted accounting principles (generally mature shares are those that have been owned by the Optionee for more than six months on the date of surrender), and (B) have a Fair Market Value on the date of surrender equal to the Option Price of the Shares as to which the Option is being exercised;

 

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(ii) provided that a public market exists for the Shares, consideration received by the Company under a procedure under which a licensed broker-dealer advances funds on behalf of an Optionee or sells Option Shares on behalf of an Optionee (a “Cashless Exercise Procedure”), provided that if the Company extends or arranges for the extension of credit to an Optionee under any Cashless Exercise Procedure, no Officer or Director may participate in that Cashless Exercise Procedure;

 

(iii) cancellation of any debt owed by the Company or any Affiliate to the Optionee by the Company including without limitation waiver of compensation due or accrued for services previously rendered to the Company; and

 

(iv) any combination of the methods of payment permitted by any paragraph of this Section 6.4.

 

(d) The Administrator may also permit any other form or method of payment for Option Shares permitted by Applicable Law.

 

6.5 Nonassignability of Options. Except as determined by the Administrator, no Option shall be assignable or otherwise transferable by the Optionee except by will or by the laws of descent and distribution. However, Options may be transferred and exercised in accordance with a Domestic Relations Order and may be exercised by a guardian or conservator appointed to act for the Optionee. Incentive Stock Options may only be assigned in compliance with Section 7(h).

 

6.6 Substitute Options. The Board may cause the Company to grant Substitute Options in connection with the acquisition by the Company or an Affiliate of equity securities of any entity (including by merger, tender offer, or other similar transaction) or of all or a portion of the assets of any entity. Any such substitution shall be effective on the effective date of the acquisition. Substitute Options may be Nonstatutory Options or Incentive Stock Options. Unless and to the extent specified otherwise by the Board, Substitute Options shall have the same terms and conditions as the options they replace, except that (subject to the provisions of Section 10) Substitute Options shall be Options to purchase Shares rather than equity securities of the granting entity and shall have an Option Price determined by the Board.

 

6.7 Repricings. Options may not be repriced, replaced or regranted through cancellation or modification without stockholder approval.

 

7.	Incentive Stock Options.

 

The following rules apply only to Incentive Stock Options and only to the extent these rules are more restrictive than the rules that would otherwise apply under this Plan. With the consent of the Optionee, or where this Plan provides that an action may be taken notwithstanding any other provision of this Plan, the Administrator may deviate from the

 

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requirements of this Section, notwithstanding that any Incentive Stock Option modified by the Administrator will thereafter be treated as a Nonstatutory Option.

 

(a) The Expiration Date of an Incentive Stock Option shall not be later than ten years from its Grant Date, with the result that no Incentive Stock Option may be exercised after the expiration of ten years from its Grant Date.

 

(b) No Incentive Stock Option may be granted more than ten years from the date this Plan was approved by the Board.

 

(c) Options intended to be incentive stock options under Section 422 of the Code that are granted to any single Optionee under all incentive stock option plans of the Company and its Affiliates, including incentive stock options granted under this Plan, may not vest at a rate of more than $100,000 in Fair Market Value of stock (measured on the grant dates of the options) during any calendar year. For this purpose, an option vests with respect to a given share of stock the first time its holder may purchase that share, notwithstanding any right of the Company to repurchase that share. Unless the administrator of that option plan specifies otherwise in the related agreement governing the option, this vesting limitation shall be applied by, to the extent necessary to satisfy this $ 100,000 rule, treating certain stock options that were intended to be incentive stock options under Section 422 of the Code as Nonstatutory Options. The stock options or portions of stock options to be reclassified as Nonstatutory Options are those with the highest option prices, whether granted under this Plan or any other equity compensation plan of the Company or any Affiliate that permits that treatment. This Section 7(c) shall not cause an Incentive Stock Option to vest before its original vesting date or cause an Incentive Stock Option that has already vested to cease to be vested.

 

(d) In order for an Incentive Stock Option to be exercised for any form of payment other than those described in Section 6.4(b), that right must be stated at the time of grant in the Option Agreement relating to that Incentive Stock Option.

 

(e) Any Incentive Stock Option granted to a Ten Percent Stockholder, must have an Expiration Date that is not later than five years from its Grant Date, with the result that no such Option may be exercised after the expiration of five years from the Grant Date. A “Ten Percent Stockholder” is any person who, directly or by attribution under Section 424(d) of the Code, owns stock possessing more than ten percent of the total combined voting power of all classes of stock of the Company or of any Affiliate on the Grant Date.

 

(f) The Option Price of an Incentive Stock Option shall never be less than the Fair Market Value of the Shares at the Grant Date. The Option Price for the Shares covered by an Incentive Stock Option granted to a Ten Percent Stockholder shall never be less than 110% of the Fair Market Value of the Shares at the Grant Date.

 

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(g) Incentive Stock Options may be granted only to Employees. If an Optionee changes status from an Employee to a Consultant, that Optionee’s Incentive Stock Options become Nonstatutory Options if not exercised within the time period described in Section 7(i) (determined by treating that change in status as a Termination solely for purposes of this Section 7(g)).

 

(h) No rights under an Incentive Stock Option may be transferred by the Optionee, other than by will or the laws of descent and distribution. During the life of the Optionee, an Incentive Stock Option may be exercised only by the Optionee. The Company’s compliance with a Domestic Relations Order, or the exercise of an Incentive Stock Option by a guardian or conservator appointed to act for the Optionee, shall not violate this Section 7(h).

 

(i) An Incentive Stock Option shall be treated as a Nonstatutory Option if it remains exercisable after, and is not exercised within, the three-month period beginning with the Optionee’s Termination for any reason other than the Optionee’s death or disability (as defined in Section 22(e) of the Code). In the case of Termination due to death, an Incentive Stock Option shall continue to be treated as an Incentive Stock Option if it remains exercisable after, and is not exercised within, the three-month period after the Optionee’s Termination provided it is exercised before the Expiration Date. In the case of Termination due to disability, an Incentive Stock Option shall be treated as a Nonstatutory Option if it remains exercisable after, and is not exercised within, one year after the Optionee’s Termination.

 

(j) An Incentive Stock Option may only be modified by the Board.

 

8.	Stock Appreciation Rights, Stock Awards and Cash Awards

 

8.1 Stock Appreciation Rights. The following rules apply to SARs:

 

(a) General. SARs may be granted either alone, in addition to, or in tandem with other Awards granted under this Plan. The Administrator may grant SARs to eligible participants subject to terms and conditions not inconsistent with this Plan and determined by the Administrator. The specific terms and conditions applicable to the Awardee shall be provided for in the Award Agreement. SARs shall be exercisable, in whole or in part, at such times as the Administrator shall specify in the Award Agreement. The grant or vesting of a SAR may be made contingent on the achievement of Objectively Determinable Performance Conditions.

 

(b) Exercise of SARs. Upon the exercise of an SAR, in whole or in part, an Awardee shall be entitled to a payment in an amount equal to the excess of the Fair Market Value of a fixed number of Shares covered by the exercised portion of the SAR on the date of exercise, over the Fair Market Value of the Shares covered by the exercised portion of the SAR on the Grant Date. The amount due to the Awardee upon

 

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the exercise of a SAR shall be paid in cash, Shares or a combination thereof, over the period or periods specified in the Award Agreement. An Award Agreement may place limits on the amount that may be paid over any specified period or periods upon the exercise of a SAR, on an aggregate basis or as to any Awardee. A SAR shall be considered exercised when the Company receives written notice of exercise in accordance with the terms of the Award Agreement from the person entitled to exercise the SAR. If a SAR has been granted in tandem with an Option, upon the exercise of the SAR, the number of shares that may be purchased pursuant to the Option shall be reduced by the number of shares with respect to which the SAR is exercised.

 

(c) Nonassignability of SARs. Except as determined by the Administrator, no SAR shall be assignable or otherwise transferable by the Awardee except by will or by the laws of descent and distribution. Notwithstanding anything herein to the contrary, SARs may be transferred and exercised in accordance with a Domestic Relations Order.

 

(d) Substitute SARs. The Board may cause the Company to grant Substitute SARs in connection with the acquisition by the Company or an Affiliate of equity securities of any entity (including by merger) or all or a portion of the assets of any entity. Any such substitution shall be effective on the effective date of the acquisition. Unless and to the extent specified otherwise by the Board, Substitute SARs shall have the same terms and conditions as the options they replace, except that (subject to the provisions of Section 9) Substitute SARs shall be exercisable with respect to the Fair Market Value of Shares rather than equity securities of the granting entity and shall be on terms that, as determined by the Board in its sole and absolute discretion, properly reflects the substitution.

 

(e) Repricings. A SAR may not be repriced, replaced or regranted, through cancellation or modification without stockholder approval.

 

8.2 Stock Awards. The following rules apply to all Stock Awards:

 

(a) General. The specific terms and conditions of a Stock Award applicable to the Awardee shall be provided for in the Award Agreement. The Award Agreement shall state the number of Shares that the Awardee shall be entitled to receive or purchase, the terms and conditions on which the Shares shall vest, the price to be paid, whether Shares are to be delivered at the time of grant or at some deferred date specified in the Award Agreement, whether the Award is payable solely in Shares, cash or either and, if applicable, the time within which the Awardee must accept such offer. The offer shall be accepted by execution of the Award Agreement. The Administrator may require that all Shares subject to a right of repurchase or risk of forfeiture be held in escrow until such repurchase right or risk of forfeiture lapses. The grant or vesting of a Stock Award may be made contingent on the achievement of Objectively Determinable Performance Conditions.

 

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(b) Right of Repurchase. If so provided in the Award Agreement, Award Shares acquired pursuant to a Stock Award may be subject to repurchase by the Company or an Affiliate if not vested in accordance with the Award Agreement.

 

(c) Form of Payment. The Administrator shall determine the acceptable form and method of payment for exercising a Stock Award. Acceptable forms of payment for all Award Shares are cash, check or wire transfer, denominated in U.S. dollars except as specified by the Administrator for non-U.S. sub-plans. In addition, the Administrator may permit payment to be made by any of the methods permitted with respect to the exercise of Options pursuant to Section 6.4.

 

(d) Nonassignability of Stock Awards. Except as determined by the Administrator, no Stock Award shall be assignable or otherwise transferable by the Awardee except by will or by the laws of descent and distribution. Notwithstanding anything to the contrary herein, Stock Awards may be transferred and exercised in accordance with a Domestic Relations Order.

 

(e) Substitute Stock Award. The Board may cause the Company to grant Substitute Stock Awards in connection with the acquisition by the Company or an Affiliate of equity securities of any entity (including by merger) or all or a portion of the assets of any entity. Unless and to the extent specified otherwise by the Board, Substitute Stock Awards shall have the same terms and conditions as the stock awards they replace, except that (subject to the provisions of Section 10) Substitute Stock Awards shall be Stock Awards to purchase Shares rather than equity securities of the granting entity and shall have a Purchase Price that, as determined by the Board in its sole and absolute discretion, properly reflects the substitution. Any such Substituted Stock Award shall be effective on the effective date of the acquisition.

 

5.3 Cash Awards. The following rules apply to all Cash Awards:

 

Cash Awards may be granted either alone, in addition to, or in tandem with other Awards granted under this Plan. After the Administrator determines that it will offer a Cash Award, it shall advise the Awardee, by means of an Award Agreement, of the terms, conditions and restrictions related to the Cash Award.

 

9.	Exercise of Awards

 

9.1 In General. An Award shall be exercisable in accordance with this Plan and the Award Agreement under which it is granted.

 

9.2 Time of Exercise. Options and Stock Awards shall be considered exercised when the Company receives: (a) written notice of exercise from the person entitled to exercise the Option or Stock Award, (b) full payment, or provision for payment, in a form and method approved by the Administrator, for the Shares for which

 

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the Option or Stock Award is being exercised, and (c) with respect to Nonstatutory Options, payment, or provision for payment, in a form approved by the Administrator, of all applicable withholding taxes due upon exercise. An Award may not be exercised for a fraction of a Share. SARs shall be considered exercised when the Company receives written notice of the exercise from the person entitled to exercise the SAR.

 

9.3 Issuance of Award Shares. The Company shall issue Award Shares in the name of the person properly exercising the Award. If the Awardee is that person and so requests, the Award Shares shall be issued in the name of the Awardee and the Awardee’s spouse. The Company shall endeavor to issue Award Shares promptly after an Award is exercised or after the Grant Date of a Stock Award, as applicable. Until Award Shares are actually issued, as evidenced by the appropriate entry on the stock register of the Company or its transfer agent, the Awardee will not have the rights of a stockholder with respect to those Award Shares, even though the Awardee has completed all the steps necessary to exercise the Award. No adjustment shall be made for any dividend, distribution, or other right for which the record date precedes the date the Award Shares are issued, except as provided in Section 10.

 

6.4 Termination

 

(a) In General. Except as provided in an Award Agreement or in writing by the Administrator, including in an Award Agreement, and as otherwise provided in Sections 9.4(b), (c), (d) and (e) after an Awardee’s Termination, the Awardee’s Awards shall be exercisable to the extent (but only to the extent) they are vested on the date of that Termination and only during the three months after the Termination, but in no event after the Expiration Date. To the extent the Awardee does not exercise an Award within the time specified for exercise, the Award shall automatically terminate.

 

(b) Leaves of Absence. Unless otherwise provided in the Award Agreement, no Award may be exercised more than three months after the beginning of a leave of absence, other than a personal or medical leave approved by an authorized representative of the Company with employment guaranteed upon return. Awards shall not continue to vest during a leave of absence, unless otherwise determined by the Administrator with respect to an approved personal or medical leave with employment guaranteed upon return.

 

(c) Death or Disability. Unless otherwise provided by the Administrator, if an Awardee’s Termination is due to death or disability (as determined by the Administrator with respect to all Awards other than Incentive Stock Options and as defined by Section 22(e) of the Code with respect to Incentive Stock Options), all Awards of that Awardee to the extent exercisable at the date of that Termination may be exercised for one year after that Termination, but in no event after the Expiration Date. In the case of Termination due to death, an Award may be exercised as provided in

 

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Section 16. In the case of Termination due to disability, if a guardian or conservator has been appointed to act for the Awardee and been granted this authority as part of that appointment, that guardian or conservator may exercise the Award on behalf of the Awardee. Death or disability occurring after an Awardee’s Termination shall not cause the Termination to be treated as having occurred due to death or disability. To the extent an Award is not so exercised within the time specified for its exercise, the Award shall automatically terminate.

 

(d) Divestiture. If an Awardee’s Termination is due to a Divestiture, the Board may take any one or more of the actions described in Section 10.3 or 10.4 with respect to the Awardee’s Awards.

 

(e) Administrator Discretion. Notwithstanding the provisions of Section 9.4 (a)-(e), the Plan Administrator shall have complete discretion, exercisable either at the time an Award is granted or at any time while the Award remains outstanding, to:

 

(i) Extend the period of time for which the Award is to remain exercisable, following the Awardee’s Termination, from the limited exercise period otherwise in effect for that Award to such greater period of time as the Administrator shall deem appropriate, but in no event beyond the Expiration Date; and/or

 

(ii) Permit the Award to be exercised, during the applicable post-Termination exercise period, not only with respect to the number of vested Shares for which such Award may be exercisable at the time of the Awardee’s Termination but also with respect to one or more additional installments in which the Awardee would have vested had the Awardee not been subject to Termination.

 

(f) Consulting or Employment Relationship. Nothing in this Plan or in any Award Agreement, and no Award or the fact that Award Shares remain subject to repurchase rights, shall: (A) interfere with or limit the right of the Company or any Affiliate to terminate the employment or consultancy of any Awardee at any time, whether with or without cause or reason, and with or without the payment of severance or any other compensation or payment, or (B) interfere with the application of any provision in any of the Company’s or any Affiliate’s charter documents or Applicable Law relating to the election, appointment, term of office, or removal of a Director.

 

10.	Certain Transactions and Events

 

10.1 In General. Except as provided in this Section 10, no change in the capital structure of the Company, merger, sale or other disposition of assets or a subsidiary, change in control, issuance by the Company of shares of any class of securities or securities convertible into shares of any class of securities, exchange or conversion of securities, or other transaction or event shall require or be the occasion for any

 

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adjustments of the type described in this Section 10. Additional provisions with respect to the foregoing transactions are set forth in Section 13.3.

 

10.2 Changes in Capital Structure. In the event of any stock split, reverse stock split, recapitalization, combination or reclassification of stock, stock dividend, spin-off, or similar change to the capital structure of the Company (not including a Fundamental Transaction or Change in Control), the Board shall make whatever adjustments it concludes are appropriate to: (a) the number and type of Awards that may be granted under this Plan, (b) the number and type of Options that may be granted to any individual under this Plan, (c) the terms of any SAR, (d) the Purchase Price of any Stock Award, (e) the Option Price and number and class of securities issuable under each outstanding Option, and (f) the repurchase price of any securities substituted for Award Shares that are subject to repurchase rights. The specific adjustments shall be determined by the Board. Unless the Board specifies otherwise, any securities issuable as a result of any such adjustment shall be rounded down to the next lower whole security. The Board need not adopt the same rules for each Award or each Awardee.

 

10.3 Fundamental Transactions. In the event of (a) a merger or consolidation in which the Company is not the surviving corporation (other than a merger or consolidation with a wholly-owned subsidiary, a reincorporation of the Company in a different jurisdiction, or other transaction in which there is no substantial change in the stockholders of the Company or their relative stock holdings and the Awards granted under this Plan are assumed, converted or replaced by the successor corporation, which assumption shall be binding on all Participants), (b) a merger in which the Company is the surviving corporation but after which the stockholders of the Company immediately prior to such merger (other than any stockholder that merges, or which owns or controls another corporation that merges, with the Company in such merger) cease to own their shares or other equity interest in the Company, (c) the sale of all or substantially all of the assets of the Company, or (d) the acquisition, sale, or transfer of more than 50% of the outstanding shares of the Company by tender offer or similar transaction (each, a “Fundamental Transaction”), any or all outstanding Awards may be assumed, converted or replaced by the successor corporation (if any), which assumption, conversion or replacement shall be binding on all participants under this Plan. In the alternative, the successor corporation may substitute equivalent Awards or provide substantially similar consideration to participants as was provided to stockholders (after taking into account the existing provisions of the Awards). The successor corporation may also issue, in place of outstanding Shares held by the participants, substantially similar shares or other property subject to repurchase restrictions no less favorable to the participant. In the event such successor corporation (if any) does not assume or substitute Awards, as provided above, pursuant to a transaction described in this Subsection 10.3, the vesting with respect to such Awards shall fully and immediately accelerate or the repurchase rights of the Company shall fully and immediately terminate, as the case may be, so that the Awards may be exercised or the repurchase rights shall terminate before, or otherwise

 

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in connection with the closing or completion of the Fundamental Transaction or event, but then terminate. Notwithstanding anything in this Plan to the contrary, the Committee may, in its sole discretion, provide that the vesting of any or all Award Shares subject to vesting or right of repurchase shall accelerate or lapse, as the case may be, upon a transaction described in this Section 10.3. If the Committee exercises such discretion with respect to Options, such Options shall become exercisable in full prior to the consummation of such event at such time and on such conditions as the Committee determines, and if such Options are not exercised prior to the consummation of the Fundamental Transaction, they shall terminate at such time as determined by the Committee. Subject to any greater rights granted to participants under the foregoing provisions of this Section 10.3, in the event of the occurrence of any Fundamental Transaction, any outstanding Awards shall be treated as provided in the applicable agreement or plan of merger, consolidation, dissolution, liquidation, or sale of assets.

 

10.4 Changes of Control. The Board may also, but need not, specify that other transactions or events constitute a “Change in Control”. The Board may do that either before or after the transaction or event occurs. Examples of transactions or events that the Board may treat as Changes of Control are: (a) any person or entity, including a “group” as contemplated by Section 13(d)(3) of the Exchange Act, acquires securities holding 30% or more of the total combined voting power or value of the Company, or (b) as a result of or in connection with a contested election of Company Directors, the persons who were Company Directors immediately before the election cease to constitute a majority of the Board. In connection with a Change in Control, notwithstanding any other provision of this Plan, the Board may, but need not, take any one or more of the actions described in Section 10.3. In addition, the Board may extend the date for the exercise of Awards (but not beyond their original Expiration Date). The Board need not adopt the same rules for each Award or each Awardee. Notwithstanding anything in this Plan to the contrary, in the event of an Involuntary Termination of services for any reason other than death, disability or Cause, within 12 months following the consummation of a Fundamental Transaction or Change in Control, any Awards, assumed or substituted in a Fundamental Transaction or Change in Control, which are subject to vesting conditions and/or the right of repurchase in favor of the Company or a successor entity, shall accelerate fully so that such Award Shares are immediately exercisable upon Termination or, if subject to the right of repurchase in favor of the Company, such repurchase rights shall lapse as of the date of Termination. Such Awards shall be exercisable for a period of three (3) months following termination.

 

10.5 Divestiture. If the Company or an Affiliate sells or otherwise transfers equity securities of an Affiliate to a person or entity other than the Company or an Affiliate, or leases, exchanges or transfers all or any portion of its assets to such a person or entity, then the Board may specify that such transaction or event constitutes a “Divestiture”. In connection with a Divestiture, notwithstanding any other provision of this Plan, the Board may, but need not, take one or more of the actions described in

 

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Section 10.3 or 10.4 with respect to Awards of Award Shares held by, for example, Employees, Directors or Consultants for whom that transaction or event results in a Termination. The Board need not adopt the same rules for each Award or Awardee.

 

10.6 Dissolution. If the Company adopts a plan of dissolution, the Board may cause Awards to be fully vested and exercisable (but not after their Expiration Date) before the dissolution is completed but contingent on its completion and may cause the Company’s repurchase rights on Award Shares to lapse upon completion of the dissolution. The Board need not adopt the same rules for each Award or each Awardee. Notwithstanding anything herein to the contrary, in the event of a dissolution of the Company, to the extent not exercised before the earlier of the completion of the dissolution or their Expiration Date, Awards shall terminate immediately prior to the dissolution.

 

10.7 Cut-Back to Preserve Benefits. If the Administrator determines that the net after-tax amount to be realized by any Awardee, taking into account any accelerated vesting, termination of repurchase rights, or cash payments to that Awardee in connection with any transaction or event set forth in this Section 10 would be greater if one or more of those steps were not taken or payments were not made with respect to that Awardee’s Awards or Award Shares, then, at the election of the Awardee, to such extent, one or more of those steps shall not be taken and payments shall not be made.

 

11.	Withholding and Tax Reporting

 

11.1 Tax Withholding Alternatives

 

(a) General. Whenever Award Shares are issued or become free of restrictions, the Company may require the Awardee to remit to the Company an amount sufficient to satisfy any applicable tax withholding requirement, whether the related tax is imposed on the Awardee or the Company. The Company shall have no obligation to deliver Award Shares or release Award Shares from an escrow or permit a transfer of Award Shares until the Awardee has satisfied those tax withholding obligations. Whenever payment in satisfaction of Awards is made in cash, the payment will be reduced by an amount sufficient to satisfy all tax withholding requirements.

 

(b) Method of Payment. The Awardee shall pay any required withholding using the forms of consideration described in Section 6.4(b), except that, in the discretion of the Administrator, the Company may also permit the Awardee to use any of the forms of payment described in Section 6.4(c). The Administrator, in its sole discretion, may also permit Award Shares to be withheld to pay required withholding. If the Administrator permits Award Shares to be withheld, the Fair Market Value of the

 

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Award Shares withheld, as determined as of the date of withholding, shall not exceed the amount determined by the applicable minimum statutory withholding rates.

 

11.2 Reporting of Dispositions. Any holder of Option Shares acquired under an Incentive Stock Option shall promptly notify the Administrator, following such procedures as the Administrator may require, of the sale or other disposition of any of those Option Shares if the disposition occurs during: (a) the longer of two years after the Grant Date of the Incentive Stock Option and one year after the date the Incentive Stock Option was exercised, or (b) such other period as the Administrator has established.

 

12.	Compliance with Law

 

The grant of Awards and the issuance and subsequent transfer of Award Shares shall be subject to compliance with all Applicable Law, including all applicable securities laws. Awards may not be exercised, and Award Shares may not be transferred, in violation of Applicable Law. Thus, for example, Awards may not be exercised unless: (a) a registration statement under the Securities Act is then in effect with respect to the related Award Shares, or (b) in the opinion of legal counsel to the Company, those Award Shares may be issued in accordance with an applicable exemption from the registration requirements of the Securities Act and any other applicable securities laws. The failure or inability of the Company to obtain from any regulatory body the authority considered by the Company’s legal counsel to be necessary or useful for the lawful issuance of any Award Shares or their subsequent transfer shall relieve the Company of any liability for failing to issue those Award Shares or permitting their transfer. As a condition to the exercise of any Award or the transfer of any Award Shares, the Company may require the Awardee to satisfy any requirements or qualifications that may be necessary or appropriate to comply with or evidence compliance with any Applicable Law.

 

13.	Amendment or Termination of this Plan or Outstanding Awards

 

13.1 Amendment and Termination. The Board may at any time amend, suspend, or terminate this Plan.

 

13.2 Stockholder Approval. The Company shall obtain the approval of the Company’s stockholders for any amendment to this Plan if stockholder approval is necessary or desirable to comply with any Applicable Law or with the requirements applicable to the grant of Awards intended to be Incentive Stock Options. The Board may also, but need not, require that the Company’s stockholders approve any other amendments to this Plan.

 

13.3 Effect. No amendment, suspension, or termination of this Plan, and no modification of any Award even in the absence of an amendment, suspension, or

 

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termination of this Plan, shall impair any existing contractual rights of any Awardee unless the affected Awardee consents to the amendment, suspension, termination, or modification. Notwithstanding anything herein to the contrary, no such consent shall be required if the Board determines, in its sole and absolute discretion, that the amendment, suspension, termination, or modification: (a) is required or advisable in order for the Company, this Plan or the Award to satisfy Applicable Law, to meet the requirements of any accounting standard or to avoid any adverse accounting treatment, or (b) in connection with any transaction or event described in Section 10, is in the best interests of the Company or its stockholders. The Board may, but need not, take the tax or accounting consequences to affected Awardees into consideration in acting under the preceding sentence. Those decisions shall be final, binding and conclusive. Termination of this Plan shall not affect the Administrator’s ability to exercise the powers granted to it under this Plan with respect to Awards granted before the termination of Award Shares issued under such Awards even if those Award Shares are issued after the termination.

 

14.	Reserved Rights

 

14.1 Nonexclusivity of this Plan. This Plan shall not limit the power of the Company or any Affiliate to adopt other incentive arrangements including, for example, the grant or issuance of stock options, stock, or other equity-based rights under other plans.

 

14.2 Unfunded Plan. This Plan shall be unfunded. Although bookkeeping accounts may be established with respect to Awardees, any such accounts will be used merely as a convenience. The Company shall not be required to segregate any assets on account of this Plan, the grant of Awards, or the issuance of Award Shares. The Company and the Administrator shall not be deemed to be a trustee of stock or cash to be awarded under this Plan. Any obligations of the Company to any Awardee shall be based solely upon contracts entered into under this Plan, such as Award Agreements. No such obligations shall be deemed to be secured by any pledge or other encumbrance on any assets of the Company. Neither the Company nor the Administrator shall be required to give any security or bond for the performance of any such obligations.

 

15.	Special Arrangements Regarding Award Shares

 

15.1 Escrow of Stock Certificates. To enforce any restrictions on Award Shares, the Administrator may require their holder to deposit the certificates representing Award Shares, with stock powers or other transfer instruments approved by the Administrator endorsed in blank, with the Company or an agent of the Company to hold in escrow until the restrictions have lapsed or terminated. The Administrator may also cause a legend or legends referencing the restrictions to be placed on the certificates.

 

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15.2 Repurchase Rights

 

(a) General. If a Stock Award is subject to vesting conditions, the Company shall have the right, during the seven months after the Awardee’s Termination, to repurchase any or all of the Award Shares that were unvested as of the date of that Termination. The repurchase price shall be determined by the Administrator in accordance with this Section 15.2 which shall be either (i) the Purchase Price for the Award Shares (minus the amount of any cash dividends paid or payable with respect to the Award Shares for which the record date precedes the repurchase) or (ii) the lower of (A) the Purchase Price for the Shares or (B) the Fair Market Value of those Award Shares as of the date of the Termination. The repurchase price shall be paid in cash. The Company may assign this right of repurchase.

 

(b) Procedure. The Company or its assignee may choose to give the Awardee a written notice of exercise of its repurchase rights under this Section 15.2. However, the Company’s failure to give such a notice shall not affect its rights to repurchase Award Shares. The Company must, however, tender the repurchase price during the period specified in this Section 15.2 for exercising its repurchase rights in order to exercise such rights.

 

16.	Beneficiaries

 

An Awardee may file a written designation of one or more beneficiaries who are to receive the Awardee’s rights under the Awardee’s Awards after the Awardee’s death. An Awardee may change such a designation at any time by written notice. If an Awardee designates a beneficiary, the beneficiary may exercise the Awardee’s Awards after the Awardee’s death. If an Awardee dies when the Awardee has no living beneficiary designated under this Plan, the Company shall allow the executor or administrator of the Awardee’s estate to exercise the Award or, if there is none, the person entitled to exercise the Option under the Awardee’s will or the laws of descent and distribution. In any case, no Award may be exercised after its Expiration Date.

 

17.	Miscellaneous

 

17.1 Governing Law. This Plan, the Award Agreements and all other agreements entered into under this Plan, and all actions taken under this Plan or in connection with Awards or Award Shares, shall be governed by the laws of the State of Delaware.

 

17.2 Determination of Value. Fair Market Value shall be determined as follows:

 

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(a) Listed Stock. If the Shares are traded on any established stock exchange or quoted on a national market system, Fair Market Value shall be the closing sales price for the Shares as quoted on that stock exchange or system for the date the value is to be determined (the “Value Date”) as reported in TheWall Street Journal or a similar publication. If no sales are reported as having occurred on the Value Date, Fair Market Value shall be that closing sales price for the last preceding trading day on which sales of Shares are reported as having occurred. If no sales are reported as having occurred during the five trading days before the Value Date, Fair Market Value shall be the closing bid for Shares on the Value Date. If Shares are listed on multiple exchanges or systems, Fair Market Value shall be based on sales or bid prices on the primary exchange or system on which Shares are traded or quoted.

 

(b) Stock Quoted by Securities Dealer. If Shares are regularly quoted by a recognized securities dealer but selling prices are not reported on any established stock exchange or quoted on a national market system, Fair Market Value shall be the mean between the high bid and low asked prices on the Value Date. If no prices are quoted for the Value Date, Fair Market Value shall be the mean between the high bid and low asked prices on the last preceding trading day on which any bid and asked prices were quoted.

 

(c) No Established Market. If Shares are not traded on any established stock exchange or quoted on a national market system and are not quoted by a recognized securities dealer, the Administrator (following guidelines established by the Board or Committee) will determine Fair Market Value in good faith. The Administrator will consider the following factors, and any others it considers significant, in determining Fair Market Value: (i) the price at which other securities of the Company have been issued to purchasers other than Employees, Directors, or Consultants, (ii) the Company’s stockholder’s equity, prospective earning power, dividend-paying capacity, and non-operating assets, if any, and (iii) any other relevant factors, including the economic outlook for the Company and the Company’s industry, the Company’s position in that industry, the Company’s goodwill and other intellectual property, and the values of securities of other businesses in the same industry.

 

17.3 Reservation of Shares. During the term of this Plan, the Company shall at all times reserve and keep available such number of Shares as are still issuable under this Plan.

 

17.4 Electronic Communications. Any Award Agreement, notice of exercise of an Award, or other document required or permitted by this Plan may be delivered in writing or, to the extent determined by the Administrator, electronically. Signatures may also be electronic if permitted by the Administrator.

 

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17.5 Notices. Unless the Administrator specifies otherwise, any notice to the Company under any Option Agreement or with respect to any Awards or Award Shares shall be in writing (or, if so authorized by Section 17.4, communicated electronically), shall be addressed to the Secretary of the Company, and shall only be effective when received by the Secretary of the Company.

 

 

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