EXHIBIT 99.10
Automatic Stock Option Agreement
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SEQUENOM, INC.
AUTOMATIC STOCK OPTION AGREEMENT
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RECITALS
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A. The Corporation has implemented an automatic option grant program under
the Plan pursuant to which eligible non-employee members of the Board will
automatically receive special option grants at periodic intervals over their
period of Board service in order to provide such individuals with a meaningful
incentive to continue to serve as members of the Board.
B. Optionee is an eligible non-employee Board member, and this Agreement is
executed pursuant to, and is intended to carry out the purposes of, the Plan in
connection with the automatic grant of an option to purchase shares of Common
Stock under the Plan.
C. All capitalized terms in this Agreement shall have the meaning assigned
to them in the attached Appendix.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. The Corporation hereby grants to Optionee, as of the
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Grant Date, a Non-Statutory Option to purchase up to the number of Option Shares
specified in the Grant Notice. The Option Shares shall be purchasable from time
to time during the option term specified in Paragraph 2 at the Exercise Price.
2. OPTION TERM. This option shall have a term of ten (10) years measured
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from the Grant Date and shall accordingly expire at the close of business on the
Expiration Date, unless sooner terminated in accordance with Paragraph 5, 6 or
7.
3. LIMITED TRANSFERABILITY.
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(a) This option may be assigned in whole or in part during Optionee's
lifetime to one or more members of Optionee's family or to a trust established
for the exclusive benefit of one or more such family members or to Optionee's
former spouse, to the extent such assignment is in connection with the
Optionee's estate plan or pursuant to a domestic relations order. The assigned
portion shall be exercisable only by the person or persons who acquire a
proprietary interest in the option pursuant to such assignment. The terms
applicable to the assigned portion shall be the same as those in effect for this
option immediately prior to such assignment.
(b) Should the Optionee die while holding this option, then this option
shall be transferred in accordance with Optionee's will or the laws of
inheritance. However, Optionee may designate one or more persons as the
beneficiary or beneficiaries of this option, and this option shall, in
accordance with such designation, automatically be transferred to such
beneficiary or beneficiaries upon the Optionee's death while holding this
option. Such beneficiary or beneficiaries shall take the transferred option
subject to all the terms and conditions of this Agreement, including (without
limitation) the limited time period during which this option may, pursuant to
Paragraph 5, be exercised following Optionee's death.
4. EXERCISABILITY/VESTING.
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(a) This option shall be immediately exercisable for any or all of the
Option Shares, whether or not the Option Shares are at the time vested in
accordance with the Vesting Schedule, and shall remain so exercisable until the
Expiration Date or sooner termination of the option term under Paragraph 5, 6 or
7.
(b) Optionee shall, in accordance with the Vesting Schedule set forth in
the Grant Notice, vest in the Option Shares in one or more installments over his
or her period of Board service. Vesting in the Option Shares may be accelerated
pursuant to the provisions of Paragraph 5, 6 or 7. In no event, however, shall
any additional Option Shares vest following Optionee's cessation of service as a
Board member.
5. CESSATION OF BOARD SERVICE. Should Optionee's service as a Board member
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cease while this option remains outstanding, then the option term specified in
Paragraph 2 shall terminate (and this option shall cease to be outstanding)
prior to the Expiration Date in accordance with the following provisions:
(a) Should Optionee cease to serve as a Board member for any reason (other
than death or Permanent Disability) while this option is outstanding, then the
period during which this option may be exercised shall be reduced to a twelve
(12)-month period measured from the date of such cessation of Board service, but
in no event shall this option be exercisable at any time after the Expiration
Date. During such limited period of exercisability, this option may not be
exercised in the aggregate for more than the number of Option Shares (if any) in
which Optionee is vested on the date of his or her cessation of Board service.
Upon the earlier of (i) the expiration of such twelve (12)-month period or (ii)
the specified Expiration Date, the option shall terminate and cease to be
exercisable with respect to any vested Option Shares for which the option has
not been exercised.
(b) Should Optionee die during the twelve (12)-month period following his
or her cessation of Board service and hold this option at the time of his or her
death, then the personal representative of Optionee's estate or the person or
persons to whom the option is transferred pursuant to Optionee's will or the
laws of inheritance or the designated beneficiary or beneficiaries of this
option (as the case may be) shall have the right to exercise this option for any
or all of the Option Shares in which Optionee is vested at the time of
Optionee's cessation of Board service (less any Option Shares purchased by
Optionee after such cessation of Board service but prior to death). Any such
right to exercise this option shall terminate, and this option shall accordingly
cease to be exercisable for such vested Option Shares, upon the earlier of (i)
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the expiration of the twelve (12)-month period measured from the date of
Optionee's cessation of Board service or (ii) the specified Expiration Date.
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(c) Should Optionee cease service as a Board member by reason of death or
Permanent Disability, then any Option Shares at the time subject to this option
but not otherwise vested shall vest in full so that this option may be exercised
for any or all of the Option Shares as fully vested shares of Common Stock at
any time prior to the earlier of (i) the expiration of the twelve (12)-month
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period measured from the date of Optionee's cessation of Board service or (ii)
the specified Expiration Date, whereupon this option shall terminate and cease
to be outstanding.
(d) Upon Optionee's cessation of Board service for any reason other than
death or Permanent Disability, this option shall immediately terminate and cease
to be outstanding with respect to any and all Option Shares in which Optionee is
not otherwise at that time vested in accordance with the normal Vesting Schedule
or the special vesting acceleration provisions of Paragraphs 6 and 7 below.
6. CORPORATE TRANSACTION.
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(a) In the event of a Corporate Transaction effected during Optionee's
period of Board service, any Option Shares at the time subject to this option
but not otherwise vested shall automatically vest so that this option shall,
immediately prior to the specified effective date for that Corporate
Transaction, become exercisable for all of the Option Shares as fully vested
shares of Common Stock and may be exercised for any or all of those vested
shares. Immediately following the consummation of the Corporate Transaction,
this option shall terminate and cease to be outstanding, except to the extent
assumed by the successor corporation or its parent company.
(b) If this option is assumed in connection with a Corporate Transaction,
then this option shall be appropriately adjusted, immediately after such
Corporate Transaction, to apply to the number and class of securities which
would have been issuable to Optionee in consummation of such Corporate
Transaction had the option been exercised immediately prior to such Corporate
Transaction, and appropriate adjustments shall also be made to the Exercise
Price, provided the aggregate Exercise Price shall remain the same. To the
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extent the actual holders of the Corporation's outstanding Common Stock receive
cash consideration for their Common Stock in consummation of the Corporate
Transaction, the successor corporation may, in connection with the assumption of
this option, substitute one or more shares of its own common stock with a fair
market value equivalent to the cash consideration paid per share of Common Stock
in such Corporate Transaction.
7. CHANGE IN CONTROL/HOSTILE TAKE-OVER.
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(a) In the event of a Change in Control effected during Optionee's period
of Board service, any Option Shares at the time subject to this option but not
otherwise vested shall automatically vest so that this option shall, immediately
prior to the effective date of that Change in Control, become exercisable for
all of the Option Shares as fully vested shares of
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Common Stock and may be exercised for any or all of those vested shares. This
option shall remain exercisable for such fully vested Option Shares until the
earliest to occur of (i) the specified Expiration Date, (ii) the sooner
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termination of this option in accordance with Paragraph 5 or 6 or (iii) the
surrender of this option under Paragraph 7(b).
(b) Optionee shall have an unconditional right, exercisable at any time
during the thirty (30)-day period immediately following the consummation of a
Hostile Take-Over to surrender this option to the Corporation in exchange for a
cash distribution from the Corporation in an amount equal to the excess of (i)
the Take-Over Price of the Option Shares at the time subject to the surrendered
option (whether or not those Option Shares are otherwise at the time vested)
over (ii) the aggregate Exercise Price payable for such shares. This Paragraph
7(b) 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 transferred in
accordance with the provisions of this Agreement.
(c) To exercise the Paragraph 7(b) 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
this 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 such limited stock appreciation right in
accordance with the terms of this Paragraph 7 has been pre-approved pursuant to
the express provisions of the Automatic Option Grant Program, and neither the
approval of the Plan Administrator nor the consent of the Board shall be
required at the time of the actual option surrender and cash distribution. Upon
receipt of the cash distribution, this option shall be cancelled with respect to
the shares subject to the surrendered option (or the surrendered portion), and
Optionee shall cease to have any further right to acquire those Option Shares
under this Agreement. The option shall, however, remain outstanding for the
balance of the Option Shares (if any) in accordance with the terms and
provisions of this Agreement, and the Corporation shall accordingly issue a
replacement stock option agreement (substantially in the same form as this
Agreement) for those remaining Option Shares.
8. ADJUSTMENT IN OPTION SHARES. Should any change be made to the Common
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Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i) the total number
and/or class of securities subject to this option and (ii) the Exercise Price in
order to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.
9. STOCKHOLDER RIGHTS. The holder of this option shall not have any
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stockholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price and become a holder of record
of the purchased shares.
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10. MANNER OF EXERCISING OPTION.
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(a) In order to exercise this option with respect to all or any part of the
Option Shares for which this option is at the time exercisable, Optionee (or any
other person or persons exercising the option) must take the following actions:
(i) To the extent the option is exercised for vested Option Shares,
execute and deliver to the Corporation a Notice of Exercise for the Option
Shares for which the option is exercised. To the extent this option is
exercised for unvested Option Shares, execute and deliver to the
Corporation a Purchase Agreement for those unvested Option Shares.
(ii) Pay the aggregate Exercise Price for the purchased shares in one
or more of the following forms:
(A) cash or check made payable to the Corporation,
(B) shares of Common Stock held by Optionee (or any other person
or persons exercising the option) for the requisite period necessary
to avoid a charge to the Corporation's earnings for financial
reporting purposes and valued at Fair Market Value on the Exercise
Date, or
(C) to the extent the option is exercised for vested Option
Shares, through a special sale and remittance procedure pursuant to
which Optionee (or any other person or persons exercising the option)
shall concurrently provide irrevocable instructions (I) to a
Corporation-designated brokerage firm to effect the immediate sale of
the purchased shares and remit to the Corporation, out of the sale
proceeds available on the settlement date, sufficient funds to cover
the aggregate Exercise Price payable for the purchased shares plus all
applicable Federal, state and local income and employment taxes
required to be withheld by the Corporation by reason of such exercise
and (II) to the Corporation to deliver the certificates for the
purchased shares directly to such brokerage firm in order to complete
the sale.
(iii) Furnish to the Corporation appropriate documentation that the
person or persons exercising the option (if other than Optionee) have the
right to exercise this option.
(b) Except to the extent the sale and remittance procedure is utilized in
connection with the option exercise, payment of the Exercise Price must
accompany the Notice of Exercise (or the Purchase Agreement) delivered to the
Corporation in connection with the option exercise.
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(c) As soon after the Exercise Date as practical, the Corporation shall
issue to or on behalf of Optionee (or any other person or persons exercising
this option) a certificate for the purchased Option Shares, with the appropriate
legends affixed thereto. To the extent any such Option Shares are unvested, the
certificates for those Option Shares shall be endorsed with an appropriate
legend evidencing the Corporation's repurchase rights and may be held in escrow
with the Corporation until such shares vest.
(d) In no event may this option be exercised for any fractional shares.
11. NO IMPAIRMENT OF RIGHTS. This Agreement shall not in any way affect the
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right of the Corporation to adjust, reclassify, reorganize or otherwise make
changes in its capital or business structure or to merge, consolidate, dissolve,
liquidate or sell or transfer all or any part of its business or assets. In
addition, this Agreement shall not in any way be construed or interpreted so as
to affect adversely or otherwise impair the right of the Corporation or the
stockholders to remove Optionee from the Board at any time in accordance with
the provisions of applicable law.
12. COMPLIANCE WITH LAWS AND REGULATIONS.
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(a) The exercise of this option and the issuance of the Option Shares upon
such exercise shall be subject to compliance by the Corporation and Optionee
with all applicable requirements of law relating thereto and with all applicable
regulations of any stock exchange (or the Nasdaq National Market, if applicable)
on which the Common Stock may be listed for trading at the time of such exercise
and issuance.
(b) The inability of the Corporation to obtain approval from any regulatory
body having authority deemed by the Corporation to be necessary to the lawful
issuance and sale of any Common Stock pursuant to this option shall relieve the
Corporation of any liability with respect to the non-issuance or sale of the
Common Stock as to which such approval shall not have been obtained. The
Corporation, however, shall use its best efforts to obtain all such approvals.
13. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided in
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Paragraph 3 or 6, the provisions of this Agreement shall inure to the benefit
of, and be binding upon, the Corporation and its successors and assigns and
Optionee, Optionee's assigns, the legal representatives, heirs and legatees of
Optionee's estate and any beneficiaries of this option designated by Optionee.
14. NOTICES. Any notice required to be given or delivered to the
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Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation at its principal corporate offices. Any notice required to be
given or delivered to Optionee shall be in writing and addressed to Optionee at
the address indicated below Optionee's signature line on the Grant Notice. All
notices shall be deemed effective upon personal delivery or upon deposit in the
U.S. mail, postage prepaid and properly addressed to the party to be notified.
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15. CONSTRUCTION. This Agreement and the option evidenced hereby are made
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and granted pursuant to the Plan and are in all respects limited by and subject
to the terms of the Plan.
16. GOVERNING LAW. The interpretation, performance and enforcement of this
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Agreement shall be governed by the laws of the State of California without
resort to that State's conflict-of-laws rules.
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EXHIBIT I
NOTICE OF EXERCISE
I hereby notify Sequenom, Inc. (the "Corporation") that I elect to purchase
_____________ shares of the Corporation's Common Stock (the "Purchased Shares")
at the option exercise price of $ per share (the "Exercise Price") pursuant to
that certain option (the "Option") granted to me under the Corporation's 1999
Stock Incentive Plan on _________________, ________.
Concurrently with the delivery of this Exercise Notice to the
Corporation, I shall hereby pay to the Corporation the Exercise Price for the
Purchased Shares in accordance with the provisions of my agreement with the
Corporation (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition
for exercise. Alternatively, I may utilize the special broker-dealer sale and
remittance procedure specified in my agreement to effect payment of the Exercise
Price for any Purchased Shares in which I am vested at the time of exercise of
the Option.
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Date
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Optionee
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Address:
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Print name in exact manner
it is to appear on the
stock certificate:
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Address to which certificate
is to be sent, if different
from address above:
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Social Security Number:
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APPENDIX
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The following definitions shall be in effect under the
Agreement:
A. AGREEMENT shall mean this Automatic Stock Option Agreement.
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B. BOARD shall mean the Corporation's Board of Directors.
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C. CHANGE IN CONTROL shall mean a change in ownership or control of the
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Corporation effected through either of the following transactions:
(i) 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, or
(ii) a change in the composition of the Board over a period of
thirty-six (36) consecutive months or less such that a majority of the
Board members ceases, by reason of one or more contested elections for
Board membership, to be comprised of individuals who either (A) have been
Board members continuously since the beginning of such period or (B) have
been elected or nominated for election as Board members during such period
by at least a majority of the Board members described in clause (A) who
were still in office at the time the Board approved such election or
nomination.
D. COMMON STOCK shall mean shares of the Corporation's common stock.
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E. CODE shall mean the Internal Revenue Code of 1986, as amended.
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F. CORPORATE TRANSACTION shall mean either of the following
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stockholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities possessing more than
fifty percent (50%) of the total combined voting power of the Corporation's
outstanding securities are transferred to a person or persons different
from the persons holding those securities immediately prior to such
transaction, or
(ii) the sale, transfer or other disposition of all or substantially
all of the Corporation's assets in complete liquidation or dissolution of
the Corporation.
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G. CORPORATION shall mean Sequenom, Inc., a Delaware corporation, and any
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successor corporation to all or substantially all of the assets or voting stock
of Sequenom, Inc. which shall by appropriate action adopt the Plan.
H. EXERCISE DATE shall mean the date on which the option shall have been
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exercised in accordance with Paragraph 10 of the Agreement.
I. EXERCISE PRICE shall mean the exercise price per share as specified in
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the Grant Notice.
J. EXPIRATION DATE shall mean the date on which the option expires as
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specified in the Grant Notice.
K. FAIR MARKET VALUE per share of Common Stock on any relevant date shall
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be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq National
Market, then the Fair Market Value shall be the closing selling price per
share of Common Stock on the date in question, as the price is reported by
the National Association of Securities Dealers on the Nasdaq National
Market and published in The Wall Street Journal. If there is no closing
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selling price for the Common Stock on the date in question, then the Fair
Market Value shall be the closing selling price on the last preceding date
for which such quotation exists.
(ii) If the Common Stock is at the time listed on any Stock Exchange,
then the Fair Market Value shall be the closing selling price per share of
Common Stock on the date in question on the Stock Exchange which serves as
the primary market for the Common Stock, as such price is officially quoted
in the composite tape of transactions on such exchange and published in
The Wall Street Journal. If there is no closing selling price for the
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Common Stock on the date in question, then the Fair Market Value shall be
the closing selling price on the last preceding date for which such
quotation exists.
X. XXXXX DATE shall mean the date of grant of the option as specified in
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the Grant Notice.
X. XXXXX NOTICE shall mean the Notice of Grant of Automatic Stock Option
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accompanying the Agreement, pursuant to which Optionee has been informed of the
basic terms of the option evidenced hereby.
N. HOSTILE TAKEOVER shall mean the acquisition, directly or indirectly, by
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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
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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.
O. 1934 ACT shall mean the Securities Exchange Act of 1934, as amended.
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P. NON-STATUTORY OPTION shall mean an option not intended to satisfy the
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requirements of Code Section 422.
Q. NOTICE OF EXERCISE shall mean the notice of exercise in the form of
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Exhibit I.
R. OPTION SHARES shall mean the number of shares of Common Stock subject to
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the option.
S. OPTIONEE shall mean the person to whom the option is granted as
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specified in the Grant Notice.
T. PERMANENT DISABILITY shall mean the inability of Optionee to perform his
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or her usual duties as a member of the Board by reason of any medically
determinable physical or mental impairment which is expected to result in death
or has lasted or can be expected to last for a continuous period of twelve (12)
months or more.
U. PLAN shall mean the Corporation's 1999 Stock Incentive Plan.
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V. PURCHASE AGREEMENT shall mean the stock purchase agreement (in form and
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substance satisfactory to the Corporation) which grants the Corporation the
right to repurchase, at the Exercise Price, any and all unvested Option Shares
held by Optionee at the time of Optionee's cessation of Board service and which
precludes the sale, transfer or other disposition of any purchased Option Shares
while those shares are unvested and subject to such repurchase right.
W. STOCK EXCHANGE shall mean the American Stock Exchange or the New York
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Stock Exchange.
X. TAKE-OVER PRICE shall mean the greater of (i) the Fair Market Value per
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share of Common Stock on the date the option is surrendered to the Corporation
in connection with a Hostile Take-Over or (ii) the highest reported price per
share of Common Stock paid by the tender offeror in effecting the Hostile
Take-Over.
Y. VESTING SCHEDULE shall mean the vesting schedule specified in the Grant
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Notice, pursuant to which the Option Shares will vest in one or more
installments over the Optionee's period of Board service, subject to
acceleration in accordance with the provisions of the Agreement.
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