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EXHIBIT 10.51
ADDENDUM
TO
STOCK OPTION AGREEMENT
The following provisions are hereby incorporated into, and are
hereby made a part of, that certain Stock Option Agreement (the "Option
Agreement") by and between CombiChem, Inc. (the "Corporation") and
___________________ ("Optionee") evidencing the stock option (the "Option")
granted on ______________________, 199____ to Optionee under the terms of the
Corporation's 1997 Stock Incentive Plan, and such provisions shall be effective
immediately. All capitalized terms in this Addendum, to the extent not
otherwise defined herein, shall have the meanings assigned to them in the
Option Agreement.
LIMITED STOCK APPRECIATION RIGHT
1. Optionee is hereby granted a limited stock
appreciation right exercisable upon the following terms and conditions:
(i) Optionee shall have the
unconditional right, exercisable at any time during the thirty (30)-
day period immediately following a Hostile Take-Over, to surrender the
Option to the Corporation, to the extent the Option is at the time
exercisable for one or more shares of Common Stock. In return for the
surrendered Option, Optionee shall receive a cash distribution from
the Corporation in an amount equal to the excess of (A) the Take-Over
Price of the shares of Common Stock for which the surrendered option
(or surrendered portion) is at the time exercisable over (B) the
aggregate Exercise Price payable for such shares.
(ii) To exercise this limited stock
appreciation right, Optionee must, during the applicable thirty
(30)-day exercise period, provide the Corporation with written notice
of the option surrender in which there is specified the number of
Option Shares as to which the Option is being surrendered. Such
notice must be accompanied by the return of Optionee's copy of the
Option Agreement, together with any written amendments to such
Agreement. The cash distribution shall be paid to Optionee within
five (5) business days following such delivery date. The exercise of
the limited stock appreciation right in accordance with the terms of
this Addendum is hereby approved by the Plan Administrator, in advance
of such exercise, and no further approval of the Plan Administrator or
the Board shall be required at the time of the actual option surrender
and cash distribution. Upon receipt of such cash distribution, the
Option shall be cancelled with respect to the Option Shares for which
the Option has been surrendered, and Optionee shall cease to have any
further right to acquire those Option Shares
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under the Option Agreement. The Option shall, however, remain
outstanding and exercisable for the balance of the Option Shares (if
any) in accordance with the terms of the Option Agreement, and the
Corporation shall issue a replacement stock option agreement
(substantially in the same form of the surrendered Option Agreement)
for those remaining Option Shares.
(iii) In no event may this limited stock
appreciation right be exercised when there is not a positive spread
between the Fair Market Value of the Option Shares subject to the
surrendered option and the aggregate Exercise Price payable for such
shares. This limited stock appreciation right shall in all events
terminate upon the expiration or sooner termination of the Option term
and may not be assigned or transferred by Optionee, except to the
extent the Option is transferable in accordance with the provisions of
the Option Agreement.
2. For purposes of this Addendum, the following
definitions shall be in effect:
(i) A HOSTILE TAKE-OVER shall be deemed
to occur upon the acquisition, directly or indirectly, by any person
or related group of persons (other than the Corporation or a person
that directly or indirectly controls, is controlled by, or is under
common control with, the Corporation) of beneficial ownership (within
the meaning of Rule 13d-3 of the 0000 Xxx) of securities possessing
more than fifty percent (50%) of the total combined voting power of
the Corporation's outstanding securities pursuant to a tender or
exchange offer made directly to the Corporation's stockholders which
the Board does not recommend such stockholders to accept.
(ii) The TAKE-OVER PRICE per share shall
be deemed to be equal to the greater of (A) the Fair Market Value per
Option Share on the option surrender date or (B) the highest reported
price per share of Common Stock paid by the tender offeror in
effecting the Hostile Take-Over. However, if the surrendered Option
is designated as an Incentive Option in the Grant Notice, then the
Take-Over Price shall not exceed the clause (A) price per share.
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IN WITNESS WHEREOF, CombiChem, Inc. has caused this Addendum
to be executed by its duly-authorized officer as of the Effective Date
specified below.
COMBICHEM, INC.
By:________________________________
Title:_____________________________
EFFECTIVE DATE: ___________________, 199__
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