Exhibit 99.2
[AVANIR PHARMACEUTICALS LETTERHEAD]
[Date]
[Name]
[Address]
RE: GRANT OF [INCENTIVE][NON-STATUTORY] STOCK OPTION
Option Shares:____________________ Grant Date:________________________
Price per share:__________________ Vesting Base Date:_________________
Fully-Vested Date:_________________
Option control no.:_______________ Expiration Date:___________________
Dear [Name]:
I am pleased to confirm that the Company has granted you an option to
purchase shares of our Class A common stock under the Avanir Pharmaceuticals
2005 Equity Incentive Plan (the "Plan"). To accept your stock option, please
sign the enclosed copy of this letter and return it to [_________].
GENERAL TERMS
Your option is intended to be [AN INCENTIVE][A NON-STATUTORY] option. The
basic terms of your option grant are identified in the information block at the
top of this offer letter, but other important terms and conditions are described
in the Plan. We encourage you to carefully review the Plan, a copy of which is
enclosed.
PURCHASE AND PAYMENT
Subject to the Plan, your option vests (becomes exercisable) [INSERT
VESTING SCHEDULE], calculated to the closest whole share, so that all shares
will become purchasable on the Fully-Vested Date shown above.
If you decide to purchase shares under this option, you will be required
to submit a completed exercise agreement on a form approved by the Company,
together with payment for the shares. You may pay for the shares (plus any
associated withholding taxes) using cash, a check, a wire transfer or any other
form of payment set forth in the Plan and permitted by the Administrator at the
time you wish to exercise. Shares available under this option must be purchased,
if at all, no later than the Expiration Date.
[SPECIFY ANY OTHER SPECIAL PROVISIONS.]
We value your efforts and look forward to your continued contribution.
Sincerely,
[name]
[title]
I accept this option and agree to the terms of this offer letter and the Plan.
_______________________________ _____________, 200_
Optionee signature Date
Avanir Pharmaceuticals
Avanir Pharmaceuticals 2005 Equity Incentive Plan
OPTION EXERCISE
AND
STOCK PURCHASE AGREEMENT
INSTRUCTIONS
1. Read the entire Agreement carefully. This is a legally binding agreement
between you and the Company.
2. ITEMS A - C: insert your name and identifying information.
3. ITEMS D-G: identify the stock option you want to exercise.
4. ITEM H: identify how many shares you want to purchase.
5. ITEM I: Calculate the Option Price by multiplying the share number in Item
H by the purchase price per share in Item E.
6. ITEM J: Confirm with the Company whether a tax withholding amount should
be entered in this space.
7. ITEM K: Add the Option Price in Item I to the tax withholding amount, if
any, in Item J. Insert the resulting Purchase Price in Item K.
8. ITEM L: Identify your approved method of payment for the Shares.
9. SIGNATURES: Sign the Agreement in the space provided on page 10. IMPORTANT
NOTE: If you are married, your spouse also is required to sign.
10. Submit your fully completed and signed Agreement, together with payment of
the Purchase Price, to [________________]
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Avanir Pharmaceuticals
2005 Equity Incentive Plan
OPTION EXERCISE AND
STOCK PURCHASE AGREEMENT
Date:_____________
OPTIONHOLDER / PURCHASER
(A) Name:_________________________________________________________________
(B) Employee number:______________________________________________________
(C) Residence address:____________________________________________________
______________________________________________________________________
______________________________________________________________________
STOCK OPTION
(D) Option Shares (total) subject to this Option:_________________________
(E) Purchase Price per Share:_____________________________________________
(F) Grant Date:___________________________________________________________
(G) Option Control Number:________________________________________________
OPTION SHARES PURCHASED UNDER THIS AGREEMENT
(H) Shares purchased:_____________________________________________________
(I) Option Price [ (E) x (H) ]:___________________________________________
(J) Tax withholding (if applicable):______________________________________
(to be calculated by Company)
(K) Purchase Price [ (I) + (J) ]:_________________________________________
PAYMENT METHOD (select one or more)
(L) Cash or check (enclosed):_____________________________________________
Wire transfer:________________________________________________________
(Identify sending bank and wire transfer number)
"Cashless exercise":__________________________________________________
(Identify approved NASD broker-dealer and attach agreement)
Other:________________________________________________________________
(Attach Company approval for other form of payment)
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1. EXERCISE OF OPTION.
1.1. I am exercising my right to purchase the number of shares of Class A
common stock of Avanir Pharmaceuticals indicated on Line (H) by exercising the
option identified on Lines (D) through (G). The per share purchase price of the
option is indicated on Line (E) and the aggregate purchase price of the shares I
am purchasing is indicated on Line (I). I acknowledge that I may be responsible
for tax withholding on the shares, in which case the aggregate purchase price
would be as indicated on Line (K) (which the Company will complete). The shares
that I am purchasing by exercising my option are referred to in this agreement
as the "Shares". The total purchase price of the shares is referred to in this
agreement as the "Purchase Price". I acknowledge that the option I am exercising
was issued under and is subject to the rules of the 2005 Equity Incentive Plan
of Avanir Pharmaceuticals (the "Plan").
1.2. With this signed agreement, I have submitted either (a) cash or a
check for the amount of the Purchase Price or (b) irrevocable wire transfer
instructions for the Purchase Price, or (c) a certificate or certificates (or
designation of such certificates if permitted by the Plan) representing shares
of Avanir Pharmaceuticals Class A common stock that I have owned for at least
six months if the shares were acquired by me through exercise of an option, and
that have a fair market value (as determined in accordance with the Plan) as of
this date equal to the Purchase Price. I recognize that other forms of payment
may be permitted by the written approval of the Administrator.
2. REPRESENTATIONS
2.1. TAXES. The Company has made no warranties or representations to me
with respect to the income tax consequences of the transactions contemplated by
this Agreement and I am not relying on the Company or its representatives for an
assessment of such tax consequences. I have had adequate opportunity to consult
with my personal tax advisor prior to submitting this Agreement to the Company.
2.2. REPURCHASE. If the Shares are subject to a right of repurchase in
favor of the Company at their original purchase price when I cease to provide
services for the Company, or if I could be subject to suit under Section 16(b)
of the Securities Exchange Act of 1934 with respect to the purchase of the
Shares, I will execute and deliver to the Company a copy of the Acknowledgment
and Statement of Decision Regarding Election Pursuant to Section 83(b) of the
Internal Revenue Code (the "Acknowledgment") attached as Exhibit A. I
acknowledge that I am primarily responsible for filing any Section 83(b)
elections although the Company will, as an accommodation to me and without
assuming any liability, file a duplicate election if I promptly provide an
executed form with the Acknowledgement and Statement of Decision Regarding
Section 83(b). I will consult with my own tax advisor to determine if there is a
comparable election to file in the state of where I reside and whether filing a
federal or state Section 83(b) election is desirable under my circumstances.
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2.3. DISQUALIFYING DISPOSITIONS OF INCENTIVE STOCK OPTION STOCK. I
acknowledge that if the Stock acquired by exercise of an Incentive Stock Option
(as defined in Section 2.1 of the Plan) is disposed of within two years after
the Grant Date (as defined in the Option Grant) or within one year after such
exercise, immediately prior to the disposition I will promptly notify the
Company in writing of the date and terms of the disposition and will provide
such other information regarding the disposition as the Company may reasonably
require.
3. MISCELLANEOUS PROVISIONS.
3.1. SUCCESSORS AND ASSIGNS. Subject to the limitations set forth in this
Agreement, the benefits and obligations of this Agreement will be binding on the
executors, administrators, heirs, legal representatives, successors, and assigns
of the parties.
3.2. COSTS. I will repay the Company for all costs and damages, including
incidental and consequential damages and attorney's fees, resulting from any
transfer of the Shares which is not in compliance with the provisions of this
Agreement.
3.3. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California excluding those laws that
direct the application of the laws of another jurisdiction.
3.4. NOTICES. All notices and other communications under this Agreement
shall be in writing. Unless and until I am notified in writing to the contrary,
all notices, communications, and documents directed to the Company and related
to the Agreement, if not delivered by hand, shall be mailed, addressed to:
Avanir Pharmaceuticals
Attention: [INSERT NAME]
at the Company's principal office location.
3.5. COMMUNICATIONS. Unless and until I notify the Company in writing to
the contrary, all notices, communications, and documents intended for me and
related to this Agreement, if not delivered by hand, shall be mailed to my last
known address as shown on the Company's books. Notices and communications shall
be mailed by first class mail, postage prepaid; documents shall be mailed by
registered mail, return receipt requested, postage prepaid. All mailings and
deliveries related to this Agreement shall be deemed received when actually
received, if by hand delivery, and three business days after mailing, if by
mail.
3.6. ARBITRATION. All disputes arising out of this Agreement will be
finally settled by arbitration in accordance with the then existing rules of the
American
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Arbitration Association. The arbitration will be conducted in the county of San
Diego, California. Judgment upon the award rendered by the arbitrators may be
entered in any court having jurisdiction over it; provided that nothing in this
Agreement shall prevent a party from applying to a court of competent
jurisdiction to obtain temporary relief pending resolution of the dispute
through arbitration. The parties agree that service of any notices in the course
of such arbitration at their respective addresses as provided for in this
agreement shall be valid and sufficient.
3.7. THIS IS NOT AN EMPLOYMENT CONTRACT. This Agreement is not to be
interpreted as a guarantee or contract of continuing employment.
AVANIR PHARMACEUTICALS
By: _______________________________
Title: _______________________________
I hereby agree to be bound by all of the terms and conditions of this
Agreement and the Plan.
_____________________________________
Purchaser's signature
_____________________________________
Printed name
The purchaser's spouse indicates by the execution of this Agreement his or
her consent to be bound by the terms herein as to his or her interests, whether
as community property or otherwise, if any, in the Shares hereby purchased.
_____________________________________
Purchaser's Spouse
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