EXHIBIT 99.5
Salary Investment Stock Option Agreement
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SEQUENOM, INC.
SALARY INVESTMENT STOCK OPTION AGREEMENT
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RECITALS
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A. The Corporation has implemented a special Salary Investment Option
Grant Program under the Plan pursuant to which selected employees may, by prior
irrevocable election, apply a portion of their base salary each year to the
acquisition of a special stock option grant.
B. Optionee has made the requisite election to apply a portion of his or
her base salary to the acquisition of the special option, and this Agreement is
executed pursuant to, and is intended to carry out the purposes of, the Plan in
connection with the Corporation's grant of such special option to Optionee.
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
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the Grant Date, a Non-Statutory Stock 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
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measured 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 8.
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 the Optionee's immediate 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. DATES OF EXERCISE. This option shall become exercisable for the
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Option Shares in a series of successive equal monthly installments as specified
in the Grant Notice. As the option becomes exercisable for one or more of those
installments, the installments shall accumulate, and the option shall remain
exercisable for the accumulated installments until the Expiration Date or sooner
termination of the option term under Paragraph 5, 6 or 8.
5. CESSATION OF SERVICE. The option term specified in Paragraph 2
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shall terminate (and this option shall cease to be outstanding) prior to the
Expiration Date should any of the following provisions become applicable:
(i) Should Optionee cease to remain in Service for any
reason other than Misconduct while this option is outstanding, then period
during which this option may be exercised shall be reduced to a three (3)-
year period measured from the date of such cessation of Service, but in no
event shall this option be exercisable at any time after the Expiration
Date.
(ii) Should Optionee die while holding this option,
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 shall have the right to exercise this option.
However, if Optionee has designated one or more beneficiaries of this
option, then those persons shall have the exclusive right to exercise this
option following Optionee's death. Any such right to exercise this option
shall lapse, and this option shall cease to be outstanding, upon the
earlier of (i) the expiration of the three (3)-year period measured from
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the date of Optionee's cessation of Service or (ii) the Expiration Date.
(iii) During the applicable post-Service exercise period,
this option may not be exercised in the aggregate for more than the number
of Option Shares for which the option is exercisable at the time of
Optionee's cessation of Service. Upon the expiration of such limited
exercise period or (if earlier) upon the Expiration Date, this option shall
terminate and cease to be outstanding for any exercisable Option Shares for
which the option has not been exercised. However, this option shall
immediately, upon Optionee's cessation of Service for any reason, terminate
and cease to be outstanding with respect to any and all Option Shares for
which the option is not otherwise at that time exercisable.
(iv) Should Optionee's Service be terminated for
Misconduct or should Optionee otherwise engage in Misconduct while this
option is outstanding, then this option shall terminate immediately and
cease to remain outstanding.
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6. CORPORATE TRANSACTION.
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(a) This option, to the extent outstanding at the time of a
Corporate Transaction but not otherwise fully exercisable for all the Option
Shares, shall automatically accelerate so that this option shall, immediately
prior to the effective date of such Corporate Transaction, become exercisable
for all the Option Shares at the time subject to this option and may be
exercised for any or all of those Option Shares as fully vested shares of Common
Stock. Immediately following such Corporate Transaction, this option shall
terminate and cease to be outstanding, except to the extent assumed by the
successor corporation (or parent thereof).
(b) To the extent assumed by the successor corporation (or parent
thereof) in connection with such Corporate Transaction, 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 P rice, provided the aggregate Exercise Price
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shall remain the same. To the 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. This
option, as so assumed, shall remain fully exercisable for all the Option Shares
subject to such option until the earliest to occur of (i) the expiration of the
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three (3)-year period measured from the date of Optionee's cessation of Service,
(ii) the specified Expiration Date, (iii) the cash-out of this option pursuant
to the provisions of Paragraph 8 or (iv) the sooner termination of this option
under Paragraph 5.
(c) This Agreement shall not in any way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.
7. CHANGE IN CONTROL.
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(a) This option, to the extent outstanding at the time of a
Change of Control but not otherwise fully exercisable for all the Option Shares,
shall automatically accelerate so that this option shall, immediately prior to
the effective date of such Change in Control, become exercisable for all the
Option Shares at the time subject to this option and may be exercised for any or
all of those Option Shares as fully vested shares of Common Stock.
(b) The option shall remain exercisable for such fully vested
Option Shares until the earliest to occur of (i) the expiration of the three
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(3)-year period measured from the date of Optionee's cessation of Service, (ii)
the specified Expiration Date, (iii) the termination of this option in
connection with a Corporate Transaction, (iv) the cash-out of this option
pursuant to the provisions of Paragraph 8 or (v) the sooner termination of this
option under Paragraph 5.
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8. HOSTILE TAKE-OVER. Optionee is hereby granted a limited stock
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appreciation right exercisable upon the following terms and conditions:
(a) Optionee shall have the unconditional right, exercisable at
any time during the thirty (30)-day period immediately following a Hostile Take-
Over, to surrender this option to the Corporation. 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 which are at the time subject to the surrendered option (whether or not
the option is otherwise at that time exercisable for those Option Shares) over
(B) the aggregate Exercise Price payable for such shares.
(b) 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
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 the limited stock appreciation right in
accordance with the terms of this Paragraph 8 is hereby pre-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, this
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 under this Agreement. The option shall, however,
remain outstanding for the balance of the Option Shares (if any) in accordance
with the terms of this Agreement, and the Corporation shall issue a replacement
stock option agreement (substantially in the same form as this Agreement) for
those remaining Option Shares.
(c) 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 transferred in accordance with the provisions of this Agreement.
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.
10. ADJUSTMENT IN OPTION SHARES. Should any change be made to the
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Common 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 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.
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11. 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) Execute and deliver to the Corporation a Notice of
Exercise for the number of Option Shares for which the option is exercised.
(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) 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.
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.
(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.
(iv) Make appropriate arrangements with the Corporation
(or Parent or Subsidiary employing or retaining Optionee) for the
satisfaction of all Federal, state and local income and employment tax
withholding requirements applicable to the option exercise.
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(b) As soon as practical after the Exercise Date, 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.
(c) In no event may this option be exercised for any fractional
shares.
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, 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.
15. CONSTRUCTION. This Agreement and the option evidenced hereby are
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made and pursuant to the Plan and are in all respects limited by and subject to
the terms of the Plan. All decisions of the Plan Administrator with respect to
any question or issue arising under the Plan or this Agreement shall be
conclusive and binding on all persons having an interest in this option.
16. GOVERNING LAW. The interpretation, performance and enforcement of
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this 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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17. EXCESS SHARES. If the Option Shares covered by this Agreement
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exceed, as of the Grant Date, the number of shares of Common Stock which may
without stockholder approval be issued under the Plan, then this option shall be
void with respect to such excess shares, unless stockholder approval of an
amendment sufficiently increasing the number of shares of Common Stock issuable
under the Plan is obtained in accordance with the provisions of the Plan.
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APPENDIX
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The following definitions shall be in effect under the Agreement:
A. AGREEMENT shall mean this Salary Investment Stock Option
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Agreement.
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 Securities Exchange Act of 1934, as amended) 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 (i) have been
Board members continuously since the beginning of such period or (ii) 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 (i) who
were still in office at the time the Board approved such election or
nomination.
D. CODE shall mean the Internal Revenue Code of 1986, as amended.
E. COMMON STOCK shall mean the Corporation's common stock.
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F. CORPORATE TRANSACTION shall mean either of the following stockholder-
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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. EMPLOYEE shall mean an individual who is in the employ of the
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Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.
I. EXERCISE DATE shall mean the date on which the option shall have been
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exercised in accordance with Paragraph 11 of the Agreement.
J. EXERCISE PRICE shall mean the exercise price per share as specified in
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the Grant Notice.
K. EXPIRATION DATE shall mean the date on which the option expires as
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specified in the Grant Notice.
L. 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 closing selling price
per share of Common Stock on the date in question, as such 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
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closing selling price quoted 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
determined by the Plan Administrator to be 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
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there is no closing selling price quoted 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.
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 Stock Option under the
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Salary Investment Grant Program accompanying the Agreement, pursuant to which
Optionee has been informed of the basic terms of the option evidenced hereby.
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O. HOSTILE TAKE-OVER shall mean the acquisition, directly or indirectly,
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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 Securities Exchange Act of 1934, as amended) 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.
P. MISCONDUCT shall mean the commission of any act of fraud, embezzlement
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or dishonesty by Optionee, any unauthorized use or disclosure by Optionee of
confidential information or trade secrets of the Corporation (or any Parent or
Subsidiary), or any other intentional misconduct by Optionee adversely affecting
the business or affairs of the Corporation (or any Parent or Subsidiary) in a
material manner. The foregoing definition shall not be deemed to be inclusive of
all the acts or omissions which the Corporation (or any Parent or Subsidiary)
may consider as grounds for the dismissal or discharge of Optionee or any other
individual in the Service of the Coproraiton (or any Parent or Subsidiary).
Q. NON-STATUTORY STOCK OPTION shall mean an option not intended to satisfy
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the requirements of Code Section 422.
R. NOTICE OF EXERCISE shall mean the written notice of the option exercise
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on the form provided by the Corporation for such purpose.
S. OPTION SHARES shall mean the number of shares of Common Stock subject
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to the option as specified in the Grant Notice.
T. OPTIONEE shall mean the person to whom the option is granted as
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specified in the Grant Notice.
U. PARENT shall mean any corporation (other than the Corporation) in an
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unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
V. PLAN shall mean the Corporation's 1999 Stock Incentive Plan.
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W. PLAN ADMINISTRATOR shall mean either the Board or a committee of Board
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members, to the extent the committee is at the time responsible for the
administration of the Plan.
X. SERVICE shall mean the Optionee's performance of services for the
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Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a non-
employee member of the board of directors or an independent consultant.
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Y. STOCK EXCHANGE shall mean the American Stock Exchange or the New York
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Stock Exchange.
Z. SUBSIDIARY shall mean any corporation (other than the Corporation) in
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an unbroken chain of corporations beginning with the Corporation, provided each
corporation (other than the last corporation) in the unbroken chain owns, at the
time of the determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
AA. TAKE-OVER PRICE per share shall mean the greater of (A) the Fair Market
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Value per Option Share on the option surrender date under Paragraph 8 or (B) the
highest reported price per share of Common Stock paid by the tender offeror in
effecting the Hostile Take-Over.
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