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EXHIBIT 10.1
Revised form of Supplemental Stock Option Agreement under Registrant's
1992 Non-Employee Directors' Stock Option Plan
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Optionee: ________________________ Date: ________________________
ISIS PHARMACEUTICALS, INC.
SUPPLEMENTAL STOCK OPTION AGREEMENT
Isis Pharmaceuticals, Inc. (the "Company"), pursuant to its 1992 Non-Employee
Directors' Stock Option Plan (the "Plan") has this day granted to the
undersigned optionee, an option to purchase shares of the common stock of the
Company ("Common Stock") as described herein. This option is not intended to
qualify and will not be treated as an "incentive stock option" within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended from
time to time (the "Code"). This option is subject to all of the terms and
conditions as set forth herein and on Attachment I hereto, which is incorporated
herein in its 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:
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Duly authorized on behalf of
the Board of Directors Address:
OPTIONEE:
Acknowledges receipt of the option as described herein and the attachments
referenced therein and understands that all rights and liabilities with respect
to this option are set forth in the option and the Plan; and acknowledges that
as of the date of grant of this option, it sets forth the entire understanding
between the optionee and the Company regarding the acquisition of stock in the
Company and supersedes all prior oral and written agreements on that subject.
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.
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ATTACHMENT I
TERMS OF SUPPLEMENTAL STOCK OPTION
The details of your option are as follows:
1. The total number of shares of Common Stock subject to this option is set
forth on the first page of the Supplemental Stock Option Agreement. Subject to
the limitations contained herein, this option shall be exercisable with respect
to each installment indicated in the Vesting Schedule set forth on the first
page of the Supplemental Stock Option Agreement on or after the date of vesting
applicable to such installment.
2. (i) The Exercise Price of this option is set forth on the first page
of Supplemental Stock Option Agreement.
(ii) Upon exercise of all or any part of each installment which has
become exercisable by you, payment of the exercise price per share is due, in
full, either (a) in cash (including check), or (b) by delivery of shares of
Common Stock that have been held for the requisite period necessary to avoid a
charge to the Company's reported earnings and valued at the fair market value on
the date of exercise, or (c) by a combination of such methods of payment.
3. 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 pursuant to paragraph 1) equals
less than 1,000 shares, in which case the minimum number of shares exercised
must equal the number of shares then vested.
4. Notwithstanding anything to the contrary contained herein, this option
may not be exercised unless the shares issuable upon exercise of this option are
then registered under the Securities Act of 1933, as amended (the "Act"), or, if
such shares are not then so registered, the Company has determined that such
exercise and issuance would be exempt from the registration requirements of the
Act.
5. The term of this option commences on the date hereof and terminates on
the Expiration Date (which date shall be no more than 10 years from the date
this option is granted). This option will terminate prior to the expiration of
its term as follows: 3 months after the termination of your service as a
director with the Company or an affiliate of the Company (as defined in the
Plan) for any reason or for no reason unless:
(a) such termination of service is due to your permanent and total
disability (within the meaning of Section 422(c)(6) of the Code), in which event
the option will terminate on the earlier of the Expiration Date or 1 year
following such termination of service; or
(b) such termination of service is due to your death, in which event
the option will terminate on the earlier of the Expiration Date or 18 months
after your death; or
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(c) during any part of such 3 month period the option is not
exercisable solely because of the condition set forth in paragraph 4 above, in
which event the option will not terminate until the earlier of the Expiration
Date or until it will have been exercisable for an aggregate period of 3 months
after the termination of service; or
(d) exercise of the option within 3 months after termination of your
service with the Company or an affiliate would result in liability under Section
16(b) of the Securities Exchange Act of 1934, in which case the option will
terminate on the earlier of the Expiration Date, the 10th day after the last
date upon which exercise would result in such liability or 6 months and 10 days
after the termination of your service to the Company or an affiliate.
However, this option may be exercised following termination of your service
as a non-employee director to the Company or an affiliate of the Company (as
defined in the Plan) only as to that number of shares as to which it was
exercisable on the date of termination under the provisions of paragraph 1 of
this option.
6. (i) This option may be exercised, to the extent specified above, 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 pursuant to subparagraph
6(f) of the Plan.
(ii) By exercising this option you agree that the Company may require
you to enter an arrangement providing for the cash payment by you to the Company
of any tax withholding obligation of the Company arising by reason of: the
exercise of this option; the lapse of any substantial risk of forfeiture to
which the shares are subject at the time of exercise; or the disposition of
shares acquired upon such exercise.
7. 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.
8. This option is not an employment contract and nothing in this option
shall be deemed to create in any way whatsoever any obligation on your part to
continue as a director of the Company.
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9. Any notices provided for in this 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 the Company to you, 5 days after deposit in the United
States mail, postage prepaid, addressed to you at the address specified below or
at such other address as you hereafter designate by written notice to the
Company.
10. This option is subject to all the provisions of the Plan, a copy of
which is attached hereto and its provisions are hereby made a part of this
option, including without limitation the provisions of paragraph 6 of the Plan
relating to option provisions, 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 this option and those of the Plan, the provisions of the Plan
shall control.
Attachments:
1992 Non-Employee Directors' Stock Option Plan
Notice of Exercise
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