Exhibit 10.42
2002 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
GRANT NOTICE
Optionee: Date:
------------------------------- -----------------------------------
ISIS PHARMACEUTICALS, INC.
NON-STATUTORY STOCK OPTION AGREEMENT
ISIS PHARMACEUTICALS, INC. (the "Company"), pursuant to its 2002 Non-Employee
Directors' Stock Option Plan (the "Plan"), hereby grants to Optionholder an
option to purchase the number of shares of the Company's Common Stock set forth
below. This option is subject to all of the terms and conditions as set forth
herein and in the Stock Option Agreement (Attachment I hereto), the Plan and the
Notice of Exercise, all of which are attached hereto and incorporated herein in
their entirety.
Number of Shares Subject to Option:
------------
VESTING SCHEDULE:
NUMBER OF SHARES (INSTALLMENT) DATE OF EARLIEST EXERCISE (VESTING)
------------------------------ -----------------------------------
------------------------------ -----------------------------------
------------------------------ -----------------------------------
------------------------------ -----------------------------------
Exercise Price Per Share: 1 Expiration Date: 2
---------- ------------------
Isis Pharmaceuticals, Inc.
By: Optionee:
------------------------------------- --------------------------
Duly authorized on behalf of
the Board of Directors Address:
OPTIONEE:
ADDITIONAL TERMS/ACKNOWLEDGEMENTS: The undersigned Optionholder acknowledges
receipt of, and understands and agrees to, this Grant Notice, the Stock Option
Agreement and the Plan. Optionholder further acknowledges that as of the Date of
Grant, this Grant Notice, the Stock Option Agreement and the Plan set forth the
entire understanding between Optionholder and the Company regarding the
acquisition of stock in the Company and supersede all prior oral and written
agreements on that subject with the exception of (i) options previously granted
and delivered to Optionholder under the Plan, and (ii) the following agreements
only:
OTHER AGREEMENTS:
------------------------------------------------------
------------------------------------------------------
1 Not less than 100% of the fair market value of the Common Stock on the date of
grant of this option.
2 Less than 10 years from the date of grant of this option.
ISIS PHARMACEUTICALS, INC.
2002 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
STOCK OPTION AGREEMENT
(NONSTATUTORY STOCK OPTION)
Pursuant to your Stock Option Grant Notice ("Grant Notice") and this
Stock Option Agreement, Isis Pharmaceuticals, Inc. (the "Company") has granted
you an option under its 2002 Non-Employee Directors' Stock Option Plan (the
"Plan") to purchase the number of shares of the Company's Common Stock indicated
in your Grant Notice at the exercise price indicated in your Grant Notice.
Defined terms not explicitly defined in this Stock Option Agreement but defined
in the Plan shall have the same definitions as in the Plan.
The details of your option are as follows:
1. VESTING. Subject to the limitations contained herein, your option will
vest as provided in your Grant Notice, provided that vesting will cease upon the
termination of your Continuous Service.
2. NUMBER OF SHARES AND EXERCISE PRICE. The number of shares of Common
Stock subject to your option and your exercise price per share referenced in
your Grant Notice may be adjusted from time to time for Capitalization
Adjustments, as provided in the Plan.
3. METHOD OF PAYMENT. Payment of the exercise price is due in full upon
exercise of all or any part of your option. You may make payment of the exercise
price in cash or by check.
4. WHOLE SHARES. You may exercise your option only for whole shares of
Common Stock.
5. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary
contained herein, you may not exercise your option unless the shares of Common
Stock issuable upon such exercise are then registered under the Securities Act
or, if such shares of Common Stock are not then so registered, the Company has
determined that such exercise and issuance would be exempt from the registration
requirements of the Securities Act. The exercise of your option must also comply
with other applicable laws and regulations governing your option, and you may
not exercise your option if the Company determines that such exercise would not
be in material compliance with such laws and regulations.
6. TERM. You may not exercise your option before the commencement of its
term or after its term expires. Unless otherwise provided in Section 11(d) of
the Plan, the term of your option commences on the Date of Grant and expires
upon the EARLIEST of the following:
(a) 3 months after the termination of your Continuous Service for any reason
other than your Disability or death, provided that if during any part of
such 3 month period your option is not exercisable solely because of the
condition set forth in the preceding paragraph relating to "Securities Law
Compliance," your option shall not expire until the earlier of the
Expiration
1
Date or until it shall have been exercisable for an aggregate
period of 3 months after the termination of your Continuous Service;
(b) 12 months after the termination of your Continuous Service due to your
Disability;
(c) 18 months after your death if you die either during your Continuous Service
or within 3 months after your Continuous Service terminates; or
(d) the day before the 10th anniversary of the Date of Xxxxx.
7. EXERCISE.
(a) You may exercise the vested portion of your option during its term by
delivering a Notice of Exercise (in a form designated by the Company)
together with the exercise price to the Secretary of the Company, or to
such other person as the Company may designate, during regular business
hours, together with such additional documents as the Company may then
require.
(b) The minimum number of shares with respect to which this option may be
exercised at any one time is 1,000, unless the number of shares available
for exercise (that is, the remaining vested shares equals less than 1,000
shares, in which case the minimum number of shares exercised must equal the
number of shares then vested.
(c) By exercising your option you agree that, as a condition to any exercise of
your option, the Company may require you to enter into an arrangement
providing for the payment by you to the Company of any tax withholding
obligation of the Company arising by reason of (1) the exercise of your
option, (2) the lapse of any substantial risk of forfeiture to which the
shares of Common Stock are subject at the time of exercise, or (3) the
disposition of shares of Common Stock acquired upon such exercise.
8. TRANSFERABILITY. This option is not transferable except by will or by
the laws of descent and distribution, and is exercisable during your lifetime
only by you; notwithstanding the foregoing, you may transfer part or all of this
option to any of the following:
(i) your spouse, children (by birth or adoption),
stepchildren, grandchildren, or parents;
(ii) a trust or other entity established solely for your
benefit or the benefit of your spouse, children (by birth or adoption),
stepchildren, grandchildren, or parents for estate planning purposes; or,
(iii) an organization which is exempt from taxation under
Section 501(c)(3) of the Code or to which tax-deductible charitable
contributions may be made under Section 170 of the Code.
Furthermore, you may, by delivering written notice to the Company, in a
form satisfactory to the Company, designate a third party who, in the event of
your death, will thereafter be entitled to exercise the option.
2
9. RIGHT OF REPURCHASE. To the extent provided in the Company's bylaws as
amended from time to time, the Company shall have the right to repurchase all or
any part of the shares of Common Stock you acquire pursuant to the exercise of
your option.
10. OPTION NOT A SERVICE CONTRACT. Your option is not an employment or
service contract, and nothing in your option shall be deemed to create in any
way whatsoever any obligation on your part to continue in the employ of the
Company or an Affiliate, or of the Company or an Affiliate to continue your
employment. In addition, nothing in your option shall obligate the Company or an
Affiliate, their respective stockholders, Boards of Directors, Officers or
Employees to continue any relationship that you might have as a Director or
Consultant for the Company or an Affiliate.
11. WITHHOLDING OBLIGATIONS. You may not exercise your option unless the
tax withholding obligations of the Company and/or any Affiliate are satisfied.
Accordingly, you may not be able to exercise your option when desired even
though your option is vested, and the Company shall have no obligation to issue
a certificate for such shares of Common Stock or release such shares of Common
Stock from any escrow provided for herein.
12. NOTICES. Any notices provided for in your option or the Plan shall be
given in writing and shall be deemed effectively given upon receipt or, in the
case of notices delivered by mail by the Company to you, 5 days after deposit in
the United States mail, postage prepaid, addressed to you at the last address
you provided to the Company.
13. GOVERNING PLAN DOCUMENT. Your option is subject to all the provisions
of the Plan, the provisions of which are hereby made a part of your option, and
is further subject to all interpretations, amendments, rules and regulations
which may from time to time be promulgated and adopted pursuant to the Plan. In
the event of any conflict between the provisions of your option and those of the
Plan, the provisions of the Plan shall control.
3
