AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 19, 1999
REGISTRATION NO.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
AGOURON PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA 33-0061928
(State or other jurisdiction (I.R.S. Employer Identification Number)
of incorporation or organization)
10350 NORTH TORREY PINES ROAD
LA JOLLA, CALIFORNIA 92037
(Address of Principal Executive Offices)
AGOURON PHARMACEUTICALS, INC., 1998 EMPLOYEE STOCK OPTION PLAN
(Full title of plan)
PETER JOHNSON
AGOURON PHARMACEUTICALS, INC.
10350 NORTH TORREY PINES ROAD
LA JOLLA, CALIFORNIA 92037
619) 622-3000
(Telephone number, including area code, of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
<S> <C> <C> <C> <C>
TITLE OF AMOUNT TO BE PROPOSED PROPOSED
SECURITIES TO BE REGISTERED(1) MAXIMUM MAXIMUM AMOUNT OF
REGISTERED OFFERING AGGREGATE REGISTRATION
PRICE PER OFFERING FEE
UNIT(2) PRICE(2)
COMMON STOCK NO 500,000 $58.0625 $29,031,250 $8,070.69
PAR VALUE SHARES
OPTIONS TO
PURCHASE 500,000 N/A N/A N/A
COMMON STOCK OPTIONS
</TABLE>
(1) In addition, this Registration Statement also covers any additional shares
of Common Stock which become issuable under the Agouron Pharmaceuticals,
Inc. 1998 Employee Stock Option Plan by reason of any stock dividend,
stock split, recapitalization or other similar transaction effected
without the receipt of consideration which results in an increase in the
number of the Registrant's outstanding shares of Common Stock.
(2) Calculated in accordance with Rule 457(h) under the Securities Act of 1933
solely for the purpose of calculating the registration fee. The price per
share and aggregate offering price are based upon the average of the high
and low prices of Registrant's Common Stock on January 15, 1999 as
reported on the Nasdaq Stock Market.
<PAGE>
II-1
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by AGOURON PHARMACEUTICALS, INC. (the
"Company" or "Registrant") with the Securities and Exchange Commission
("Commission") are incorporated by reference in this Registration Statement:
(1) The Company's Annual Report on Form 10-K for the fiscal year
ended June 30, 1998.
(2 The Company's Quarterly Reports on Form 10-Q for the quarter
ended September 30, 1998.
(3) The description of the Company's Common Stock contained in the
Company's Form 8-A Registration Statement filed April 17,
1987, including any amendment or report filed for the purpose
of updating such description, together with the Company's Form
8-A Registration Statement filed on November 8, 1996, in which
there is described the terms, rights and provisions applicable
to the Company's outstanding Common Stock under the Rights
Agreement dated as of November 7, 1996, between the Company
and ChaseMellon Shareholder Services, L.L.C., including any
amendment or report filed for the purpose of updating such
description.
In addition, all documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934,
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of filing of such
documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Gary E. Friedman, Esq., who has provided the opinion to the Registrant
on the validity of the securities being registered which is attached as Exhibit
5 to this Registration Statement, is Corporate Vice President, General Counsel
and Secretary of the Registrant.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 317 of the California General Corporation Law generally provides
indemnification to officers and directors of the Company against expenses,
judgments, fines and amounts paid in settlement under certain conditions and
subject to certain limitations.
<PAGE>
Article VII of the articles of incorporation of the Company provides that
liability of the directors of the Company for monetary damages shall be
eliminated to the fullest extent permissible under California law. Further,
Article VIII of the articles of incorporation authorizes the Company to provide
indemnification of agents (as defined in Section 317) for breach of duty to the
Company and its shareholders through bylaw provisions or through agreements with
such agents, or both, in excess of the indemnification otherwise permitted by
Section 317, subject to the limits on such excess indemnification set forth in
Section 317.
Section 3.15 of the bylaws of the Company authorizes the Company to
indemnify any person who was or is a party, or is threatened to be made a party,
to any proceeding (other than actions by or in the right of the Company to
procure a judgment in its favor) by reason of the fact that such person is or
was an agent of the Company, against expenses, judgments, fines, settlements and
other amounts actually and reasonably incurred in connection with such
proceeding if such person acted in good faith and in a manner such person
reasonably believed to be in the best interests of the Company. Section 3.15
also authorizes the Company to indemnify any person who was or is a party, or is
threatened to be made a party, to any threatened, pending or completed action by
or in the right of the Company to procure a judgment in its favor by reason of
the fact that such person is or was an agent of the Company, against expenses
actually and reasonably incurred by such person in connection with the defense
or settlement of such action if such person acted in good faith.
Any indemnification under Section 3.15 is to be made by the Company only if
authorized in the specific case upon determination that indemnification of the
agent is proper in the circumstances because the agent has met the applicable
standard of conduct required by Paragraphs 3.15.2 or 3.15.3 of the bylaws.
Pursuant to authorization provided under the articles of incorporation and
the bylaws, the Company has entered into indemnification agreements with each of
its present directors. The Company has also entered into similar agreements with
certain of the Company's officers who are not directors. Generally, the
indemnification agreements attempt to provide the maximum protection permitted
by California law as such law may be amended from time to time. Moreover, the
indemnification agreements provide for certain additional indemnification. Under
such additional indemnification provisions, however, an individual will not
receive indemnification for judgments, settlements or expenses if he or she is
found liable to the Company (except to the extent the court determines he or she
is fairly and reasonably entitled to indemnity for expenses) for settlements not
approved by the Company or for settlements and expenses if the settlement is not
approved by the court. The indemnification agreements provide for the Company to
advance to the individual any and all reasonable expenses (including legal fees
and expenses) incurred in investigating or defending any such action, suit or
proceeding. In order to receive an advance of expenses, the individual must
submit to the Company copies of invoices presented to him or her for such
expenses. Also, the individual must repay such advances upon a final judicial
decision that he or she is not entitled to indemnification.
Section 3.15 of the bylaws also provides that, in the event of a
determination by the Board of Directors of the Company to purchase insurance for
certain of its agents, the Company shall purchase and maintain insurance on
behalf of any such agent against liability asserted against or incurred by the
agent in such capacity or arising out of the agent's status, whether or not the
Company would have the power to indemnify the agent against such liability under
the provisions of Section 3.15.
<PAGE>
The Company has in effect liability insurance policies which insure
directors and officers of the Company. Although the Company intends to renew the
policies on or before their expiration date, there can be no assurance that the
policies will be renewed on terms acceptable to the Company. Under the policies,
the directors and officers of the Company are insured against loss arising from
claims made against them due to wrongful acts while acting in their individual
and collective capacities as directors and officers, subject to certain
exclusions. In addition, the policies insure the Company against losses for
which its directors and officers are entitled to indemnification, subject to
certain retentions payable by the Company. The policies are "claims made"
policies and provide coverage only for losses arising out of claims first made
against the Company and reported to the insurer during the policy period.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
4.1 Restated Articles of Incorporation dated October 20, 1990,
incorporated by reference to the Company's Form 10-Q for the
quarter ended December 31, 1992.
4.2 Rights Agreement dated as of November 7, 1996, between the
Company and ChaseMellon Shareholder Services, L.L.C., which
includes the Certificate of Designation, Preferences and
Rights of Series B Participating Preferred Stock as Exhibit A,
the Form of Rights Certificate as Exhibit B and the Form of
Summary of Rights as Exhibit C, incorporated by reference to
Exhibit 4.4 of the Company's current report on Form 8-K dated
November 7, 1996.
4.3 Amended and Restated Rights Agreement dated as of
November 10, 1998, incorporated by reference to Exhibit 4.1
of the Company's current report on Form 8-K dated
January 19, 1999.
5 Opinion of Gary E. Friedman, Esq.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Gary E. Friedman, Esq. (included in his opinion
filed as Exhibit 5).
24 Power of Attorney (contained on signature page of this
Registration Statement).
99.1 Agouron Pharmaceuticals, Inc. 1998 Employee Stock Option Plan
as amended August 6, 1998.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
<PAGE>
(i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of this Registration
Statement (or the most recent post-effective
amendment hereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in this Registration Statement.
Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the
total dollar value of securities offered would not
exceed that which was registered) and any deviation
from the low or high end of the estimated maximum
offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the
effective registration statement;
(iii) to include any material information with
respect to the plan of distribution not previously
disclosed in this Registration Statement or any
material change to such information in this
Registration Statement;
provided, however, that paragraphs (a)(l)(i) and (a)(l)(ii) do
not apply if the Registration Statement is on Form S-3, Form
S-8 or Form F-3, and the information required to be included
in a post-effective amendment by those paragraphs is contained
in periodic reports filed with or furnished to the Commission
by the Registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from Registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and each filing of the annual report of the
Plan pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the
<PAGE>
foregoing provisions, or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
<PAGE>
II-1
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Diego, State of California, on January 19, 1999.
AGOURON PHARMACEUTICALS, INC.
January 19, 1999 By /S/ PETER JOHNSON
Peter Johnson
President, Principal Executive Officer
January 19, 1999 By /S/ STEVEN S. COWELL
Steven S. Cowell
Corporate Vice President, Finance,
Chief Financial Officer and
Principal Accounting Officer
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Peter Johnson and Gary E. Friedman, or
any of them, his true and lawful attorney-in-fact and agents, with full power of
substitution and resubstitution, for him/her and in his/her name, place and
stead, in any and all capacities, to sign any or all amendments to this
Registration Statement, and to file the same, with all exhibits thereto, and
under documents in connection therewith with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully and to all intents and purposes
as he/she might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
/S/ PETER JOHNSON President, Principal Executive January 19, 1999
Peter Johnson Officer, and Director
/S/ STEVEN S. COWELL Corporate Vice President, Finance, January 19, 1999
Steven S. Cowell Chief Financial Officer and Principal
Accounting Officer
/S/ GARY E. FRIEDMAN Corporate Vice President, General January 19, 1999
Gary E. Friedman Counsel, Secretary and Director
/S/ JOHN N. ABELSON Director January 19, 1999
John N. Abelson
/S/ PATRICIA M.CLOHERTY Director January 19, 1999
Patricia M. Cloherty
/S/ A.E. COHEN Director January 19, 1999
A.E. Cohen
/S/ MICHAEL E. HERMAN Director January 19, 1999
Michael E. Herman
/S/ IRVING S. JOHNSON Director January 19, 1999
Irving S. Johnson
<PAGE>
/S/ANTONIE T. KNOPPERS Director January 19, 1999
Antonie T. Knoppers
/S/ MELVIN I. SIMON Director January 19, 1999
Melvin I. Simon
<PAGE>
E-1
EXHIBIT INDEX
EXHIBIT PAGE
4.1 Restated Articles of Incorporation dated October 20, 1990,
incorporated by reference to the Company's Form 10-Q for the
quarter ended December 31, 1992.
4.2 Rights Agreement dated as of November 7, 1996, between
the Company and ChaseMellon Shareholder Services,
L.L.C., which includes the Certificate of Designation,
Preferences and Rights of Series B Participating Preferred
Stock as Exhibit A, the Form of Rights Certificate as
Exhibit B and the Form of Summary of Rights as Exhibit C,
incorporated by reference to Exhibit 4.4 of the Company's
current report on Form 8-K dated November 7, 1996.
4.3 Amended and Restated Rights Agreement dated as of
November 10, 1998, incorporated by reference to Exhibit 4.1
of the Company's current report on Form 8-K dated
January 19, 1999.
5 Opinion of Gary E. Friedman, Esq.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Gary E. Friedman, Esq. (included in his opinion
filed as Exhibit 5).
24 Power of Attorney (contained on signature page of this
Registration Statement).
99.1 Agouron Pharmaceuticals, Inc. 1998 Employee Stock Option Plan
as amended August 6, 1998.
EXHIBIT 5
January 19, 1999
AGOURON PHARMACEUTICALS, INC.
10350 North Torrey Pines Road
La Jolla, California 92037
Gentlemen:
In connection with your registration on Form S-8 (the "Registration Statement")
under the Securities Act of 1933, as amended, of 500,000 shares of Common Stock
of Agouron Pharmaceuticals, Inc. (the "Company"), I advise you that, in my
opinion, when such shares have been issued and sold pursuant to the provisions
of the Agouron Pharmaceuticals, Inc. 1998 Employee Stock Option Plan, and in
accordance with the Registration Statement, such shares will be duly authorized,
validly issued, fully paid and non-assessable shares of the Company's Common
Stock.
I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement.
Sincerely,
/s/ Gary E. Friedman, Esq.
Gary E. Friedman, Esq.
Corporate Vice President and General Counsel
GEF:cbc
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated July 16, 1998 appearing on page F-1 of
Agouron Pharmaceuticals, Inc.'s Annual Report on Form 10-K for the year ended
June 30, 1998.
PRICEWATERHOUSECOOPERS LLP
San Diego, California
January 15, 1999
EXHIBIT 99.1
AGOURON PHARMACEUTICALS, INC.
1998 EMPLOYEE STOCK OPTION PLAN
(Adopted by the Board of Directors February 12, 1998)
(Amended by the Board of Directors August 6, 1998)
1. PURPOSE.
This 1998 Employee Stock Option Plan is intended to encourage stock
ownership in Agouron Pharmaceuticals, Inc. by non-officer employees of the
Company and its Affiliates in order to promote their interest in the success of
the Company and to encourage their continued affiliation. All options granted
under this 1998 Employee Stock Option Plan shall be Non-Statutory Stock Options.
2. DEFINITIONS.
As used herein, the following definitions shall apply:
"Act" shall mean the Securities Exchange Act of 1934, as amended from
time to time.
"Affiliate" shall mean any corporation defined as a "parent
corporation" or a "subsidiary corporation" by Code Section 424(e) and (f),
respectively.
"Agreement" shall mean a 1998 Employee Non-Statutory Stock Option
Agreement, embodying the terms of the agreement between the Company and the
Optionee with respect to Optionee's Option.
"Board" shall mean the Board of Directors of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Company" shall mean Agouron Pharmaceuticals, Inc., a California
corporation.
"Disability" or "Disabled" shall mean the condition of being
"disabled" within the meaning of Section 422(c)(6) of the Code or any
successor provision.
"Director" shall mean an individual member of the Board.
"Employee" shall mean any employee of the Company or its Affiliates who
is not an officer of the Company or its Affiliates on the date of grant.
"ERISA" shall mean the Employee Retirement Income Security Act or the
rules thereunder, as amended from time to time.
<PAGE>
"Fair Market Value" of Stock on a given date shall mean an amount per
share as determined by the Board (or its delegates) by applying any reasonable
valuation method determined without regard to any restriction, other than a
restriction that, by its terms, will never lapse. Notwithstanding the preceding,
if the Stock is traded upon an established stock exchange, then the "Fair Market
Value" of Stock on a given date per share shall be deemed to be the average of
the highest and lowest selling price per share of the Stock on the principal
stock exchange on which the Stock is then trading or, if there was no trading of
the Stock on that day, on the next preceding day on which there was such
trading; if the Stock is not traded upon an established stock exchange but is
quoted on a quotation system, the "Fair Market Value" of Stock on a given date
shall be deemed to be the mean between the closing representative "bid" and
"ask" prices per share of the Stock on such date as reported by such quotation
system or, if there was no trading of the Stock on that day, on the next
preceding day on which there was such trading.
"Non-Statutory Stock Option" shall mean a stock option granted pursuant
to the Plan which is not an incentive stock option under Section 422 of the Code
or any successor provision.
"Option" shall refer to a Non-Statutory Stock Option, as the context
shall indicate.
"Optionee" shall mean the recipient of a Non-Statutory Stock Option.
"Option Price" shall mean the price per share of Stock to be paid by
the Optionee upon exercise of the Option.
"Option Stock" shall mean the total number of shares of Stock the
Optionee shall be entitled to purchase pursuant to the Agreement.
"Plan" shall mean this Agouron Pharmaceuticals, Inc. 1998
Employee Stock Option Plan, as amended from time to time.
"Reporting Person" shall mean an Optionee who is required to file
statements relating to his or her beneficial ownership of Stock with the SEC
pursuant to Section 16(a) of the Act.
"SEC" shall mean the Securities and Exchange Commission.
"Stock" shall mean the no par Common Stock of the Company.
3. ADMINISTRATION.
The Plan shall be administered by the Board; provided, however, that
the Board may delegate all or any part of its authority to administer the Plan
in its entirety or, with respect to any group or groups of persons eligible to
receive Options hereunder, to such persons or committee as the Board shall in
its sole discretion determine. The Board and its delegates may adopt, amend and
rescind such rules and regulations for carrying out the Plan and implementing
agreements and take such act as it deems proper. The interpretation,
construction and application by the Board (or any individuals who are delegated
authority by the Board to administer the Plan) or any of the provisions of the
Plan or any Option granted thereunder shall be final and binding on the Company,
all Optionees, their legal representatives, and any person who may acquire an
Option directly from an Optionee by permitted transfer, bequest or inheritance.
Whether or not
<PAGE>
the Board has delegated administrative authority, the Board shall
have the final power to determine all questions of policy or expediency that may
arise in administration of the Plan.
4. ELIGIBILITY.
Only Employees of the Company or its Affiliates are eligible to receive
Non-Statutory Stock Options under the Plan.
No person shall be eligible to receive an Option for a larger number of
shares than is recommended for him or her by the Board (or its delegates). Any
Optionee may hold more than one Option, but only on the terms and conditions and
subject to the restrictions set forth herein.
5. STOCK SUBJECT TO THE PLAN.
Options granted under the Plan shall be for shares of the Company's
authorized but unissued or re-acquired Stock. The aggregate number of shares of
Stock that may be subject to Options pursuant to the Plan shall not exceed one
million (1,500,000) shares. The number of shares available shall be adjusted as
provided in Paragraph 6(j) below. Stock issued under other stock option plans of
the Company shall not be counted against the maximum number of shares that can
be issued under the Plan.
In the event that any outstanding Option expires or is terminated for
any reason, the shares of Stock allocable to the unexercised portion of such
Option may again be subject to an Option under the Plan.
If an Optionee pays all or part of any Option Price with shares of
Stock, the number of shares deemed to be issued to the Optionee (and counted
against the maximum number of shares that can be issued under the Plan) shall be
the number of shares transferred to the Optionee by the Company, less the number
of shares transferred by the Optionee to the Company as payment. Stock issued on
the exercise of an Option that is forfeited in accordance with the conditions
contained in the grant by the Optionee after issuance shall be deemed to have
never been issued under the Plan and, accordingly, shall not be counted against
the maximum number of shares that can be issued under the Plan.
6. TERMS AND CONDITIONS OF OPTIONS.
The Board (or its delegates) shall authorize the granting of all
Options under the Plan with such Options to be evidenced by Non-Statutory Stock
Option Agreements. Each Agreement shall be in such form as the Board may approve
from time to time. Each Agreement shall comply with and be subject to the
following terms and conditions:
(A) NUMBER OF SHARES. Each particular Option Agreement shall state the
number of shares to which the Option pertains.
(B) OPTION PRICE. Each particular Option Agreement shall state the
Option Price as determined by the Board (or its delegates).
<PAGE>
(C) CERTIFICATE LEGENDS. Certificates for shares of Stock issued and
delivered to Employees who are Reporting Persons on the date of
exercise may be legended, as the Board deems appropriate.
(D) MEDIUM AND TIME OF PAYMENT. The aggregate Option Price shall be
payable upon the exercise of the Option and shall be paid in any
combination of:
(I) United States cash currency;
(II) a cashier's or certified check to the order of the
Company;
(III) a personal check acceptable to the Company;
(IV) to the extent permitted by the Board, shares of Stock of
the Company (including previously owned Stock or Stock
issuable in connection with the Option exercise), properly
endorsed to the Company, whose Fair Market Value on the date
of exercise equals the aggregate Option Price of the Option
being exercised; or
(V) to the extent permitted by the Board, the Optionee's
entering into an agreement with the Company, whereby a portion
of the Optionee's Options are terminated and where the
"built-in gain" on any Options that are terminated as part of
such agreement equals the aggregate Option Price of the Option
being exercised. "Built-in gain" means the excess of the
aggregate Fair Market Value of any Stock otherwise issuable on
exercise of a terminated Option, over the aggregate Option
Price otherwise due the Company on such exercise.
The Board (or its delegates) may permit deemed or constructive transfer
of shares in lieu of actual transfer and physical delivery of
certificates. Except to the extent prohibited by applicable law, the
Board (or its delegates) may take any necessary or appropriate steps in
order to facilitate the payment of any such Option Price. Without
limiting the foregoing, the Board (or its delegates) may cause the
Company to loan the Option Price to the Optionee or to guarantee that
any Stock to be issued will be delivered to a broker or lender in order
to allow the Optionee to borrow the Option Price. The Board (or its
delegates), in its sole and exclusive discretion, may require
satisfaction of any rules or conditions in connection with payment of
the Option Price at any particular time, in any particular form, or
with the Company's assistance. If Stock used to pay any Option Price is
subject to any prior restrictions imposed in connection with any plan
of the Company (including this Plan), an equal number of the shares of
Stock acquired on exercise shall be made subject to such prior
restrictions in addition to any further restrictions imposed on such
Stock by the terms of the Optionee's Agreement or by the Plan.
(E) DURATION OF OPTIONS. Each particular Option Agreement shall state
the term of the Option. Non-Statutory Stock Options shall expire and
not be exercisable after the date set by the Board (or its delegates)
in the particular Option Agreement, or on any later date subsequently
approved by the Board (or its delegates).
<PAGE>
(F) EXERCISE OF OPTIONS.
(I) Each particular Option Agreement shall state when the
Optionee's right to purchase Stock pursuant to the terms of an
Option is exercisable in whole or in part. Subject to the
earlier termination of the right to exercise the Options as
provided under this Plan, Options shall be exercisable in
whole or in part as the Board (or its delegates), in its sole
and exclusive discretion, may provide in the particular Option
Agreement, as amended. The Board (or its delegates) may at any
time increase the percentage an Option is otherwise
exercisable under the terms of a particular Option Agreement.
The Board (or its delegates), in its sole and exclusive
discretion, may permit the issuance of Stock underlying an
Option prior to the date the Option is otherwise exercisable,
provided such Stock is subject to repurchase rights that
expire pro rata as the Option would otherwise have become
exercisable.
(II) If the Optionee does not exercise in any one (1) year
period the full number of shares to which he or she is then
entitled to exercise, the Optionee may exercise those shares
in any subsequent year during the term of the Option.
(G) TRANSFER OF OPTIONS. An attempted non-permitted transfer of an
Option shall be void.
(H) DEATH OF OPTIONEE. If the Optionee dies while in the employ of the
Company or its Affiliates or within a period of three (3) months after
termination of such employment and before he or she has fully exercised
an Option, the Option may be exercised, regardless of the expiration
date stated in the particular Option Agreement (to the extent that the
Option was exercisable on the date of death and had not previously been
exercised), for one (1) year after the date of the Optionee's death.
Such exercise may be made by a personal representative of the Optionee
or by any person or persons who shall have acquired the Option directly
from the Optionee by bequest or inheritance.
(I) TERMINATION OF EMPLOYMENT OTHER THAN DEATH. Subject to the
provisions of Paragraph 6(h) above, in the event that an Optionee shall
cease to be employed by the Company or its Affiliates prior to an
Option's expiration date, the exercise of such Option shall be subject
to such limitations on the periods of time during which the Option may
be exercised as may be specified in the particular Option Agreement, as
amended, between the Optionee and the Company. Notwithstanding the
foregoing (and subject to the provisions of Paragraph 6(h) above), an
Optionee who is Disabled on the date of termination of employment may
exercise his or her Option, to the extent that the Option was
exercisable on the date of such termination and had not previously been
exercised, for one (1) year from the date of such termination;
provided, however, that an Option may not be exercised after the
expiration date set forth in the particular Option Agreement, as
amended. Whether an authorized leave of absence or absence for military
or governmental service shall constitute termination of employment for
purposes of the Plan shall be determined by the Board (or its
delegates) in its sole and exclusive discretion. No provision of the
Plan shall be construed so as to grant any individual the right to
remain in the employ of the Company or its Affiliates for any period of
specific duration.
<PAGE>
(J) RECAPITALIZATION/CORPORATE TRANSACTIONS.
(I) The number of shares issuable under the Plan and the
number and amount of the Option Stock and the Option Price of
outstanding Options shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Stock
resulting from a subdivision or consolidation of shares, or
for the payment of a stock dividend, or any other increase or
decrease in the number of such shares affected without receipt
of consideration by the Company in order to preclude the
dilution or enlargement of benefits under the Plan.
(II) The Board, in its sole and exclusive discretion, may make
such equitable adjustments to the Plan and outstanding Options
as it deems appropriate in order to preclude the dilution or
enlargement of benefits under the Plan upon exchange of all of
the outstanding stock of the Company for a different class or
series of capital stock or the separation of assets of the
Company, including a spin-off or other distribution of stock
or property by the Company.
(III) If the Company shall be the surviving corporation in any
merger or consolidation, each outstanding Option shall pertain
to and apply to the securities to which a holder of the number
of shares of Option Stock would have been entitled. A
dissolution or liquidation of the Company, a merger (other
than a merger the principal purpose of which is to change the
state of the Company's incorporation) or consolidation in
which the Company is not the surviving corporation, a reverse
merger in which the Company is the surviving corporation but
the Company's Common Stock outstanding immediately preceding
the merger is converted by virtue of the merger into other
property, or other capital reorganization in which more than
fifty percent (50%) of the Company's Common Stock is exchanged
shall cause each outstanding Option to terminate; provided,
however, that immediately prior to the occurrence of such
event, each Optionee shall have the right to exercise his or
her Option in whole or in part, unless the Option in
connection with such event is either to be assumed by the
successor corporation or parent thereof, or to be replaced
with a comparable option to purchase shares of the capital
stock of the successor corporation or parent thereof, or the
Option is to be replaced by a comparable cash incentive
program of the successor corporation based on the value of the
Option on the date of such event. Notwithstanding the
preceding, if, within one (1) year from the date of such
event, an Employee's employment is involuntarily terminated,
then the Employee's outstanding Options, if any, shall become
immediately exercisable as of the date of termination of
employment.
(IV) All adjustments required by the preceding paragraphs
shall be made by the Board, whose determination in that
respect shall be final, binding and conclusive.
(V) Except as expressly provided in this Paragraph 6(j), an
Optionee shall have no rights by reason of any subdivision or
consolidation of shares of stock of any class, or the payment
of any stock dividend, or any other increase in the number of
shares of stock of any class by reason of any dissolution,
liquidation, merger, consolidation, reorganization, or
separation of assets, and any issue by the Company of shares
of stock of any class, or securities convertible into shares
of
<PAGE>
stock of any class, shall not affect, and no adjustment by
reason thereof shall be made with respect to, the number or
amount of the Option Stock or the Option Price of outstanding
Options.
(VI) The grant or existence of an Option shall not affect in
any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or 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.
(K) RIGHTS AS A SHAREHOLDER. An Optionee shall not have rights as a
shareholder with respect to any shares covered by an Option until the
Option is exercised and Optionee has become a record holder of the
shares underlying the Option. No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other
property) or distributions or other rights for which the record date is
prior to the date of issuance of such stock certificate, except as
provided in Paragraph 6(j) above.
(L) MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. Subject to the
terms and conditions of the Plan, the Board (or its delegates) may
modify (including lowering the Option Price), extend or renew
outstanding Options granted under the Plan, or accept the surrender of
outstanding Options under the Plan and/or other stock option plans of
the Company (to the extent not previously exercised) and authorize the
granting of new Options in substitution therefor. Notwithstanding the
foregoing, no modification of an Option shall, without the consent of
the Optionee or as otherwise provided for in the Plan, adversely affect
any rights or obligations under any Option previously granted under the
Plan.
(M) INVESTMENT PURPOSE. Each Option under the Plan shall be granted on
the condition that the purchase of Stock thereunder shall be for
investment purposes for the Optionee's own account and not with a view
to resale or distribution. In the event the Stock subject to such
Option is registered under the Securities Act of 1933, as amended, or
in the event a resale of such Stock without such registration would
otherwise be permissible, such condition shall be inoperative if, in
the opinion of counsel for the Company, such condition is not required
under the Securities Act of 1933, or any other applicable law,
regulation or rule of any governmental agency.
(N) TRANSFER AND EXERCISE OF OPTIONS. The Board may adopt, amend and
rescind such rules and regulations as the Board (or its delegates) may
deem appropriate concerning the transferability or assignability of a
particular Option by Optionee otherwise than by will or the laws of
descent and distribution.
(O) OTHER PROVISIONS. Each Option Agreement may contain such other
provisions, including without limitation, restrictions upon the
exercise or transferability of the Option, as the Board (or its
delegates) may deem advisable.
(P) WITHHOLDING TAXES. When the Company becomes required to collect
federal and state income and employment taxes in connection with the
exercise of an Option ("withholding taxes"), the Optionee shall
promptly pay to the Company the amount of such taxes in cash, unless
the Board (or its delegates) permits or requires payment in another
form. Subject to such conditions as it may require, the Board, in its
sole
<PAGE>
discretion, may allow an Optionee to reimburse the Company for
payment of withholding taxes with shares of Stock.
7. TERM OF PLAN.
Options may be granted pursuant to the Plan from time to time
within a period of ten (10) years from the date the Plan is adopted by the
Board.
8. AMENDMENT OF PLAN.
With respect to any shares at the time not subject to Options, the
Board may from time to time, insofar as permitted by law, suspend or discontinue
the Plan or revise or amend the Plan in any respect whatsoever. The Board may
amend the Plan from time to time to the extent necessary to comply with any
applicable law, rule or other regulatory requirement.
9. APPLICATION OF FUNDS.
The proceeds received by the Company from the sale of Stock pursuant to
the exercise of an Option will be used for general corporate purposes.
10. NO OBLIGATION TO EXERCISE OPTION.
The granting of an Option shall impose no obligation upon the Optionee
to exercise such Option.
11. INDEMNIFICATION.
In addition to such other rights of indemnification as they may have as
Directors, Employees or agents of the Company, the Directors (or any individuals
who are delegated authority by the Board to administer the Plan) shall be
indemnified by the Company against: (i) their reasonable expenses, including
attorneys' fees actually and necessarily incurred in connection with the defense
of any action, suit or proceeding, or in connection with any appeal therein, to
which they or any of them may be a party by reason of any action taken or
failure to act under or in connection with the Plan or any Option granted
thereunder; and (ii) against all amounts paid by them in settlement thereof
(provided such settlement is approved by independent legal counsel selected by
the Company), or paid by them in satisfaction of a judgment in any such action,
suit or proceeding, except in actions to matters as to which it shall be
adjudged in such action, suit or proceeding that such Director or individual is
liable for negligence or misconduct in the performance of his duties; this
indemnification is expressly conditioned upon the indemnified party, within
ninety (90) days after institution of any such action, suit or proceeding,
offering the Company in writing the opportunity, at its own expense, to handle
and defend the same.
<PAGE>
Adopted by the Board of Directors on February 12, 1998, amended August
6, 1998.
AGOURON PHARMACEUTICALS, INC.
BY:
PETER JOHNSON, PRESIDENT & CEO
