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As filed with the Securities and Exchange Commission on February 14, 2000
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Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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Tularik Inc.
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
Delaware Two Corporate Drive 94-3148800
(State of Incorporation) South San Francisco, California 94080 (I.R.S. Employer Identification No.)
(650) 825-7000
(Address and telephone number of principal executive offices)
</TABLE>
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1997 Equity Incentive Plan
Tularik Matching Plan
(Full title of the plan)
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David V. Goeddel
Chief Executive Officer
Tularik Inc.
Two Corporate Drive
South San Francisco, California 94080
(650) 825-7000
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(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies to:
Suzanne Sawochka Hooper, Esq.
Stephen N. Rosenfield, Esq.
Cooley Godward, LLP
5 Palo Alto Square
3000 El Camino Real
Palo Alto, California 94306
(650) 843-5000
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===================================================================================================================================
Proposed
Maximum Proposed Maximum
Title of Securities to be Amount to be Offering Price Aggregage Offering
Registered Registered Per Share (1) Price (1) Amount of Registration Fee
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<S> <C> <C> <C> <C>
Common Stock
(par value $.001) 263,001 $59.44 $15,632,779.44 $4,127.05
====================================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(h). The offering price per share and
aggregate offering price are based upon the average of the high and low
prices on February 9, 2000, as reported on the Nasdaq National Market
(pursuant to Rule 457(c) under the Securities Act).
================================================================================
<PAGE>
REOFFER PROSPECTUS
TULARIK INC.
Common Stock
263,001 Shares
_________________________________________________
Tularik Inc. is registering the resale of up to 263,001 shares of its common
stock by a selling stockholder. We will not receive any of the proceeds from
the sale of the shares by the selling stockholder.
Our common stock is traded on the Nasdaq National Market under the symbol
"TLRK." On February 14, 2000, the last reported sale price for our common stock
was $66.75 per share.
__________________________________________
This investment involves a high degree of risk. See "Risk Factors"
beginning on page 3.
__________________________________________
The Securities and Exchange Commission and state securities regulators have
not approved or disapproved of these securities or determined whether this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
__________________________________________
The date of this Prospectus is February 14, 2000
<PAGE>
TABLE OF CONTENTS
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<S> <C>
The Company................................................................................... 2
Risk Factors.................................................................................. 3
Selling Stockholder........................................................................... 13
Plan of Distribution.......................................................................... 13
Legal Matters................................................................................. 13
Experts....................................................................................... 13
Where You Can Find More Information........................................................... 14
</TABLE>
THE COMPANY
Tularik engages in the discovery and development of a broad range of novel
and superior orally available drugs based on general regulation. Building on
our scientific strengths, we intend to become a worked-class pharmaceutical
company. Our research programs, all of which address large commercial markets,
include cancer, cytomegalovirus, diabetes, obesity, inflammation, immune
disorders, high blood cholesterol levels, known as hypercholesterolemia,
bacterial diseases and a class of drug targets called orphan nuclear receptors
because their exact function is unknown and they are located within the nucleus
of the cell. We have diversified our drug discovery and development efforts not
only across a large number of diseases, but also across multiple promising
targets and drug candidates for these diseases.
Our principal offices are located at Two Corporate Drive, South San
Francisco, California 94080. Our telephone number is (650) 825-7300. "Tularik"
is our trademark. This prospectus also contains trademarks of other companies.
<PAGE>
Risk Factors
An investment in our common stock is risky. You should carefully consider
the following risks, as well as the other information contained in this
prospectus. If any of the following risks actually occurs, our business could be
harmed. In that case, the trading price of our common stock could decline, and
you might lose all or part of your investment. The risks and uncertainties
described below are not the only ones facing us. Additional risks and
uncertainties not presently known to us, or that we currently see as immaterial,
may also harm our business. If any of these additional risks or uncertainties
occur, the trading price of our common stock could decline, and you might lose
all or part of your investment.
If we continue to incur operating losses for a period longer than anticipated,
we may be unable to continue our operations.
We have generated operating losses since we began operations in November
1991. The extent of our future losses and the timing of profitability are highly
uncertain, and we may never achieve profitable operations. We have been engaged
in discovering and developing drugs since inception, which requires significant
research and development expenditures. To date, we have no products that have
generated any revenue. As of September 30, 1999, we had an accumulated deficit
of approximately $80.8 million. Even if we succeed in developing a commercial
product, we expect to incur losses for at least the next several years and
expect that these losses will increase as we expand our research and development
activities. If the time required to generate product revenues and achieve
profitability is longer than anticipated, we may not be able to continue our
operations. If we fail to obtain the necessary capital, we will not be able to
fund our operations.
Because our product candidates are in an early state of development, there is a
high risk of failure.
We have no products that have received regulatory approval for commercial
sale. All of our product candidates are in early stages of development, and we
face the risks of failure inherent in developing drugs based on new
technologies. None of our prospective products, including lometrexol, T67 and
T607, is expected to be commercially available until at least 2004. Two of our
drug candidates, T67 and T607, operate in a similar manner. Based on results at
any stage of clinical trials, we may decide to discontinue development of one or
both of these compounds. Additionally, even if the clinical results are
favorable for both compounds, we may decide to commercialize only one of the
compounds.
Our products must satisfy rigorous standards of safety and efficacy before
they can be approved by the FDA and international regulatory authorities for
commercial use. We will need to conduct significant additional research, animal
testing, referred to as preclinical testing, and human testing, referred to as
clinical trials, before we can file applications with the FDA for product
approval. Clinical trials are expensive and have a high risk of failure. In
addition, to compete effectively, our products must be easy to use, cost-
effective and economical to manufacture on a commercial scale. We may not
achieve any of these objectives. Any of our products may not attain market
acceptance. Typically, there is a high rate of attrition for products in
preclinical testing and clinical trials. Also, third parties may develop
superior products or have proprietary rights that preclude us from marketing our
products. If research and testing is not successful or we fail to obtain
regulatory approval, we will be unable to market and sell our future product
candidates.
The progress and results of our animal and human testing are uncertain.
Preclinical testing and clinical development are long, expensive and
uncertain processes. It may take us several years to complete our testing, and
failure can occur at any stage of testing. Interim results of trials do not
necessarily predict final results, and acceptable results in early trials may
not be repeated in later trials. Success in preclinical testing and early
clinical trials does not ensure that later clinical trials will be successful.
A number of companies in the pharmaceutical industry, including biotechnology
companies, have suffered significant setbacks in advanced clinical trials, even
after promising results in earlier trials. Commercialization of our product
candidates depends upon successful completion of clinical trials. We must
provide the FDA and foreign regulatory authorities with clinical data that
demonstrates the safety and efficacy of our products before they can be approved
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for commercial sale. While we have recently licensed a product candidate that is
ready for the stage of human testing designed to determine efficacy, known as
phase 2 clinical trials, none of the product candidates that we have internally
developed have advanced beyond the stage of human testing designed to determine
safety, known as phase 1 clinical trials.
Any clinical trial may fail to produce results satisfactory to the FDA.
Preclinical and clinical data can be interpreted in different ways, which could
delay, limit or prevent regulatory approval. Negative or inconclusive results or
adverse medical events during a clinical trial could cause a clinical trial to
be repeated or a program to be terminated. We typically rely on third-party
clinical investigators to conduct our clinical trials and other third-party
organizations to perform data collection and analysis, and as a result, we may
face additional delaying factors outside our control.
We do not know whether planned clinical trials will begin on time or
whether any of our clinical trials will be completed on schedule or at all. We
do not know whether any clinical trials will result in marketable products. Our
product development costs will increase if we have delays in testing or
approvals or if we need to perform more or larger clinical trials than planned.
If the delays are significant, our financial results and the commercial
prospects for our products will be harmed, and our ability to become profitable
will be delayed.
Our first three clinical candidates are directed to the treatment of
cancer. Cancer drugs generally have a narrow therapeutic window between efficacy
and toxicity. If unacceptable toxicity is observed in clinical trials, the
trials may be terminated at an early stage. Drug-related deaths may occur in
phase 1 clinical trials with anti-cancer drugs, because drugs for the treatment
of cancer are typically dangerous and phase 1 patients are critically ill and
heavily pre-treated. Several deaths occurred during Eli Lilly's phase 1 clinical
trials of lometrexol.
We do not know whether our existing or any future clinical trials will
demonstrate sufficient safety and efficacy necessary to obtain the requisite
regulatory approvals or will result in marketable products. Our failure to
adequately demonstrate the safety and efficacy of our products under development
will prevent receipt of FDA approval and, ultimately, commercialization of our
products.
Because we must obtain regulatory approval to market our products in the United
States and foreign jurisdictions, we cannot predict whether or when we will be
permitted to commercialize our products.
The pharmaceutical industry is subject to stringent regulation by a wide
range of authorities. We cannot predict whether regulatory clearance will be
obtained for any product we develop. A pharmaceutical product cannot be marketed
in the United States until it has completed rigorous preclinical testing and
clinical trials and an extensive regulatory clearance process implemented by the
FDA. Satisfaction of regulatory requirements typically takes many years, is
dependent upon the type, complexity and novelty of the product and requires the
expenditure of substantial resources. Of particular significance are the
requirements covering research and development, testing, manufacturing, quality
control, labeling and promotion of drugs for human use.
Before commencing clinical trials in humans, we must submit and receive
approval from the FDA of an Investigational New Drug application. Clinical
trials are subject to oversight by institutional review boards and the FDA and:
. must be conducted in conformance with the FDA's good laboratory practice
regulations;
. must meet requirements for institutional review board oversight;
. must meet requirements for informed consent;
. must meet requirements for good clinical practices;
. are subject to continuing FDA oversight;
. may require large numbers of test subjects; and
. may be suspended by us or the FDA at any time if it is believed that the
subjects participating in these trials are being exposed to unacceptable
health risks or if the FDA finds deficiencies in the Investigational New
Drug application or the conduct of these trials.
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Before receiving FDA clearance to market a product, we must demonstrate
that the product is safe and effective on the patient population that will be
treated. Data obtained from preclinical and clinical activities are susceptible
to varying interpretations that could delay, limit or prevent regulatory
clearances. In addition, delays or rejections may be encountered based upon
additional government regulation from future legislation or administrative
action or changes in FDA policy during the period of product development,
clinical trials and FDA regulatory review. Failure to comply with applicable FDA
or other applicable regulatory requirements may result in criminal prosecution,
civil penalties, recall or seizure of products, total or partial suspension of
production or injunction, as well as other regulatory action against our
potential products or us. Additionally, we have limited experience in conducting
and managing the clinical trials necessary to obtain regulatory approval.
If regulatory clearance of a product is granted, this clearance will be
limited to those disease states and conditions for which the product is
demonstrated through clinical trials to be safe and efficacious. We cannot
ensure that any compound developed by us, alone or with others, will prove to be
safe and efficacious in clinical trials and will meet all of the applicable
regulatory requirements needed to receive marketing clearance.
Outside the United States, our ability to market a product is contingent
upon receiving a marketing authorization from the appropriate regulatory
authorities. This foreign regulatory approval process includes all of the risks
associated with FDA clearance described above.
Failure to attract, retain and motivate skilled personnel and cultivate key
academic collaborations will delay our product development programs and our
research and development efforts.
We are a small company with approximately 215 employees, and our success
depends on our continued ability to attract, retain and motivate highly
qualified management and scientific personnel and on our ability to develop and
maintain important relationships with leading academic institutions and
scientists. Competition for personnel and academic collaborations is intense. In
particular, our product development programs depend on our ability to attract
and retain highly skilled chemists and clinical development personnel. If we
lose the services of any of these personnel, in particular, David V. Goeddel,
our Chief Executive Officer, it could impede significantly the achievement of
our research and development objectives. If we fail to negotiate additional
acceptable collaborations with academic institutions and scientists, or if our
existing academic collaborations were to be unsuccessful, our product
development programs may be delayed. In addition, we will need to hire
additional personnel and develop additional academic collaborations as we
continue to expand our research and development activities. We do not know if we
will be able to attract, retain or motivate personnel or maintain relationships.
The drug discovery methods we employ are relatively new and may not lead to the
development of drugs.
The drug discovery methods we employ based upon gene regulation are
relatively new. We do not know if these methods will lead to the discovery of
commercially viable drugs. None of our cancer product candidates undergoing
clinical testing acts by gene regulation. There is limited scientific
understanding generally relating to gene expression and the role of genes in
complex diseases and relatively few products based on gene discoveries have been
developed and commercialized by drug manufacturers. Even if we are successful in
identifying the pathways that cells use to control the expression of genes
associated with specific diseases, these discoveries may not lead to the
development of drugs. Furthermore, our drug discovery efforts are focused on a
number of target genes, the functions of which have not yet been fully
identified. As a result, the safety and efficacy of drugs that alter the
expression of these genes have not yet been established. As a result, we cannot
assure you that our research and development activities will result in any
commercially viable products. We expect to continue to in-license or acquire
additional product candidates to augment the results of our internal research
activities, and in-licensed candidates may not prove to be successful.
If we cannot maintain our current corporate collaborations and enter into new
corporate collaborations, our product development could be delayed.
We rely, to a significant extent, on our corporate collaborators to provide
funding in support of our research and to jointly conduct some research and
preclinical testing functions. If any of our corporate collaborators were to
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breach or terminate their agreement with us or otherwise fail to conduct the
collaborative activities successfully and in a timely manner, the preclinical or
clinical development or commercialization of the affected product candidates or
research programs could be delayed or terminated. We cannot control the amount
and timing of resources our corporate collaborators devote to our programs or
potential products. In addition, we expect to rely on our corporate
collaborators for commercialization of some of our products.
The continuation of any of our partnered drug discovery and development
programs may be dependent on the periodic renewal of our corporate
collaborations. All of our corporate collaborations have terms of six or fewer
years, which is less than the period required for the discovery, clinical
development and commercialization of most drugs. Each of our corporate
collaboration agreements provides that, upon expiration of a specified period
after commencement of the agreement, the corporate collaborator has the right to
terminate the agreement on short notice, and each corporate collaboration
agreement, other than the agreement with Roche Bioscience, provides that these
terminations do not require cause. Our collaboration with Yamanouchi
Pharmaceutical Co. was terminated by Yamanouchi in November 1996, and our
collaboration with Merck & Co. was terminated by Merck in March 1999. Our
existing corporate collaboration agreements also may terminate before the full
term of the collaborations. Moreover, we may not be able to renew these
collaborations on acceptable terms, if at all. Our Sumitomo collaboration
expired and was not renewed at the end of its five-year term in January 2000.
Although we are negotiating with Taisho regarding alternative collaborative
opportunities, we believe that Taisho will terminate its current agreement with
us in March 2000. If funding from one or more of our corporate collaborations
were reduced or terminated, including the expected expiration of the Sumitomo
collaboration and termination of the Taisho collaboration, we would be required
to devote additional internal resources to product development or scale back or
terminate some development programs or seek alternative corporate collaborators.
There have been a significant number of recent business combinations among
large pharmaceutical companies that have resulted in a reduced number of
potential future corporate collaborators. If business combinations involving our
corporate collaborators were to occur, the effect could be to diminish,
terminate or cause delays in one or more of our corporate collaborations.
Until recently, our corporate collaboration strategy focused on partnering
with pharmaceutical companies to fund our research in gene regulation. Over the
past two years, as our partnered and unpartnered research has led to product
candidates, our corporate collaboration strategy has evolved. In addition to
seeking collaborations for our research-stage programs, we also seek to enter
into collaborations for the development of compounds discovered through our
research and development efforts. The timing of these collaborations may be
linked to clinical results of our product candidates. As a result, we expect our
net spending on research and development to increase significantly and that our
corporate collaborators will fund a smaller percentage of our expenses than
historically.
We may not be able to negotiate additional corporate collaborations on
acceptable terms, if at all, and these collaborations may not be successful. Our
quarterly operating results may fluctuate significantly depending on the
initiation of new corporate collaboration agreements or the termination of
existing corporate collaboration agreements.
If we do not realize value from our retained commercialization rights, we may
not achieve our commercial objectives.
If we do not effectively exploit the commercialization rights we have
retained, we may not achieve profitability. In most of our corporate
collaborations, we have retained various commercialization rights for the
development and marketing of pharmaceutical products, including rights for
specific pharmaceutical indications or in specified geographical regions. We
may take advantage of these currently retained rights directly or may exploit
retained rights through collaborations with others. The value of these rights,
if any, will be largely derived from our ability, directly or with
collaborators, to develop and commercialize drugs, the success of which is also
uncertain.
The exploitation of retained commercialization rights requires sufficient
capital; technological, product development, manufacturing and regulatory
expertise and resources; and marketing and sales personnel. We may not be able
to develop or obtain these resources in sufficient quantity or of a sufficient
quality level to enable us to
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achieve our objectives. To the extent that we are required to rely on third
parties for these resources, failure to establish and maintain our relationships
will affect our ability to realize value from our retained commercialization
rights. If we seek to commercialize products for which we have retained rights
through joint ventures or collaborations, we may be required to relinquish
material rights on terms that may not be favorable to us. We do not know whether
we will be able to enter into any agreements on acceptable terms, if at all, or
that we will be able to realize any value from our retained commercialization
rights.
If we fail to obtain the capital necessary to fund our operations, we will be
unable to successfully develop products.
We expect that significant additional financing will be required in the
future to fund operations. We do not know whether additional financing will be
available when needed, or that, if available, we will obtain financing on terms
favorable to our stockholders or us. We have consumed substantial amounts of
cash to date and expect capital outlays and operating expenditures to increase
over the next several years as we expand our infrastructure and research and
development activities. We may raise this financing through public or private
equity offerings, debt financings or additional corporate collaboration and
licensing arrangements.
We believe that existing cash and investment securities and anticipated
cash flow from existing collaborations will be sufficient to support our current
operating plan through at least the end of 2001. We have based this estimate on
assumptions that may prove to be wrong. Our future capital requirements depend
on many factors that affect our research, development, collaboration and sales
and marketing activities.
To the extent we raise additional capital by issuing equity securities, our
stockholders may experience substantial dilution. To the extent that we raise
additional funds through collaboration and licensing arrangements, we may be
required to relinquish some rights to our technologies or product candidates, or
grant licenses on terms that are not favorable to us. If adequate funds are not
available, we will not be able to continue developing our products.
If our competitors develop and market products that are more effective than
ours, our commercial opportunity will be reduced or eliminated.
Our commercial opportunity will be reduced or eliminated if our competitors
develop and market products that are more effective, have fewer side effects or
are less expensive than our product candidates. With respect to our drug
discovery programs, other companies have product candidates in clinical trials
to treat each of the diseases for which we are seeking to discover and develop
product candidates. These competing potential drugs are further advanced in
development than are any of our potential products and may result in effective,
commercially successful products. Even if our collaborators or we are successful
in developing effective drugs, our products may not compete effectively with
these products or other successful products. Our competitors may succeed in
developing and marketing products either that are more effective than those that
we may develop, alone or with our collaborators, or that are marketed before any
products we develop are marketed.
Our competitors include fully integrated pharmaceutical companies and
biotechnology companies that currently have drug and target discovery efforts
and universities and public and private research institutions. In addition,
companies pursuing different but related fields represent substantial
competition. Many of the organizations competing with us have substantially
greater capital resources, larger research and development staffs and
facilities, greater experience in drug development and in obtaining regulatory
approvals and greater marketing capabilities than we do. These organizations
also compete with us to:
. attract qualified personnel;
. attract parties for acquisitions, joint ventures or other
collaborations; and
. license the proprietary technology of these institutions that is
competitive with the technology we are practicing.
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If our competitors successfully enter into partnering arrangements or
license agreements with academic research institutions, we will then be
precluded from pursuing those specific opportunities. Since each of these
opportunities is unique, we may not be able to find an acceptable substitute.
Because it is difficult and costly to protect our proprietary rights, we cannot
ensure their protection.
Our commercial success will depend in part on obtaining patent protection
on our products and successfully defending these patents against third party
challenges. The patent positions of pharmaceutical and biotechnology companies
can be highly uncertain and involve complex legal and factual questions. No
consistent policy regarding the breadth of claims allowed in biotechnology
patents has emerged to date. Accordingly, we cannot predict the breadth of
claims allowed in these companies' patents.
The degree of future protection for our proprietary rights is uncertain and
we cannot ensure that:
. we were the first to make the inventions covered by each of our pending
patent applications;
. we were the first to file patent applications for these inventions;
. others will not independently develop similar or alternative
technologies or duplicate any of our technologies;
. any of our pending patent applications will result in issued patents;
. any patents issued to us or our collaborators will provide a basis for
commercially viable products or will provide us with any competitive
advantages or will not be challenged by third parties;
. we will develop additional proprietary technologies that are patentable;
or
. the patents of others will not have an adverse effect on our ability to
do business.
In addition, we could incur substantial costs in litigation if we are
required to defend against patent suits brought by third parties or if we
initiate these suits.
Others may have filed and in the future are likely to file patent
applications covering genes, gene products or therapeutic products that are
similar or identical to ours. We cannot assure you that any patent application
will not have priority over patent applications filed by us. Any legal action
against our collaborators or us claiming damages and seeking to enjoin
commercial activities relating to the affected products and processes could, in
addition to subjecting us to potential liability for damages, require our
collaborator or us to obtain a license to continue to manufacture or market the
affected products and processes. We cannot predict whether we or our
collaborators would prevail in any of these actions or that any license required
under any of these patents would be made available on commercially acceptable
terms, if at all. We believe that there may be significant litigation in the
industry regarding patent and other intellectual property rights. If we become
involved in litigation, it could consume a substantial portion of our managerial
and financial resources.
We rely on trade secrets to protect technology where we believe patent
protection is not appropriate or obtainable. However, trade secrets are
difficult to protect. While we require employees, academic collaborators and
consultants to enter into confidentiality agreements, we may not be able to
adequately protect our trade secrets or other proprietary information.
We are a party to various license agreements that give us rights to use
specified technologies in our research and development processes. If we are not
able to continue to license this technology on commercially reasonable terms,
our product development and research may be delayed. In addition, we generally
do not control the prosecution of in-licensed technology, and accordingly are
unable to exercise the same degree of control over this intellectual property as
we exercise over our internally developed technology.
Our research collaborators and scientific advisors have rights to publish
data and information in which we have rights. If we cannot maintain the
confidentiality of our technology and other confidential information in
connection with our collaborations, then our ability to receive patent
protection or protect our proprietary information will be imperiled.
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If we are unable to contract with third parties to manufacture our products in
sufficient quantities and at an acceptable cost, we may be unable to meet demand
for our products and lose potential revenues.
Completion of our clinical trials and commercialization of our product
candidates require access to, or development of, facilities to manufacture a
sufficient supply of our product candidates. We will depend on our collaborators
or third parties for the manufacture of compounds for preclinical, clinical and
commercial purposes in their FDA-approved manufacturing facilities. Our products
may be in competition with other products for access to these facilities.
Consequently, our products may be subject to delays in manufacture if
collaborators or outside contractors give other products greater priority than
our products. For this and other reasons, our collaborators or third parties may
not be able to manufacture these products in a cost-effective or timely manner.
If not performed in a timely manner, the clinical trial development of our
product candidates or their submission for regulatory approval could be delayed,
and our ability to deliver products on a timely basis could be impaired or
precluded. We may not be able to enter into any necessary third-party
manufacturing arrangements on acceptable terms, if at all. Our current
dependence upon others for the manufacture of our products may adversely affect
our future profit margin and our ability to commercialize products on a timely
and competitive basis. In particular, our current supply of finished product of
lometrexol is limited and is not sufficient for completion of all phases of
clinical development. The manufacture of lometrexol is complex, and it may be
difficult to efficiently manufacture or to secure an adequate supply of this
compound in a timely manner or on an economical basis. We do not intend to
develop or acquire facilities for the manufacture of product candidates for
clinical trials or commercial purposes in the foreseeable future.
If we are unable to create sales, marketing and distribution capabilities or
enter into agreements with third parties to perform these functions, we will not
be able to commercialize products.
We currently have no sales, marketing or distribution capability. In order
to commercialize any products, we must internally develop sales, marketing and
distribution capabilities or make arrangements with a third party to perform
these services. We intend to market some products directly and rely on
relationships with one or more pharmaceutical companies with established
distribution systems and direct sales forces to market other products. To market
any of our products directly, we must develop a marketing and sales force with
technical expertise and with supporting distribution capabilities. We may not be
able to establish in-house sales and distribution capabilities or relationships
with third parties. To the extent that we enter into co-promotion or other
licensing arrangements, our product revenues are likely to be lower than if we
directly marketed and sold our products, and any revenues we receive will depend
upon the efforts of third parties, which efforts may not be successful.
Our ability to generate revenues will be diminished if we fail to obtain
acceptable prices or an adequate level of reimbursement for our products from
third-party payors.
The continuing efforts of government and third-party payors to contain or
reduce the costs of health care through various means will limit our commercial
opportunity. For example, in some foreign markets, pricing and profitability of
prescription pharmaceuticals are subject to government control. In the United
States, we expect that there will continue to be a number of federal and state
proposals to implement similar government control. In addition, increasing
emphasis on managed care in the United States will continue to put pressure on
the pricing of pharmaceutical products. Cost control initiatives could decrease
the price that any of our collaborators or we would receive for any products in
the future. Further, cost control initiatives could adversely affect our
collaborators' ability to commercialize our products, and our ability to realize
royalties from this commercialization.
Our ability to commercialize pharmaceutical products, alone or with
collaborators, may depend in part on the extent to which reimbursement for the
products will be available from:
. government and health administration authorities;
. private health insurers; and
. other third-party payors.
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Significant uncertainty exists as to the reimbursement status of newly
approved health care products. Third-party payors, including Medicare, are
challenging the prices charged for medical products and services. Government
and other third-party payors increasingly are attempting to contain health care
costs by limiting both coverage and the level of reimbursement for new drugs and
by refusing, in some cases, to provide coverage for uses of approved products
for disease indications for which the FDA has not granted labeling approval.
Third-party insurance coverage may not be available to patients for any products
we discover and develop, alone or with collaborators. If government and other
third-party payors do not provide adequate coverage and reimbursement levels for
our products, the market acceptance of these products may be reduced.
If conflicts arise between our collaborators, advisors or directors and us, they
may act in their self-interest, which may be adverse to your best interests.
If conflicts arise between us and our corporate or academic collaborators
or scientific advisors, the other party may act in its self-interest and not in
the interest of our stockholders. Some of our corporate or academic
collaborators are conducting multiple product development efforts within each
disease area that is the subject of the collaboration with us. Generally, in
each of our collaborations, we have agreed not to conduct independently, or with
any third party, any research that is competitive with the research conducted
under our collaborations. Our collaborations may have the effect of limiting the
areas of research that we may pursue, either alone or with others. Our
collaborators, however, may develop, either alone or with others, products in
related fields that are competitive with the products or potential products that
are the subject of these collaborations. Competing products, either developed by
the collaborators or to which the collaborators have rights, may result in their
withdrawal of support for our product candidates.
Genentech, Inc. is a potential competitor of ours and is also one of our
investors. David V. Goeddel, our Chief Executive Officer and a member of our
Board of Directors, is a consultant to Genentech. Mark J. Levin, a member of our
Board of Directors, is Chairman, President and Chief Executive Officer of
Millennium Pharmaceuticals, Inc., and Grant Heidrich, a member of our Board of
Directors, also serves on the board of directors of Millennium. Millennium has
publicly disclosed that it is pursuing an obesity program that is competitive
with, and may have scientific overlap with, our program.
If product liability lawsuits are successfully brought against us, we may incur
substantial liabilities and may be required to limit commercialization of our
products.
The testing and marketing of medical products entail an inherent risk of
product liability. If we cannot successfully defend ourselves against product
liability claims, we may incur substantial liabilities or be required to limit
commercialization of our products. Our inability to obtain sufficient product
liability insurance at an acceptable cost to protect against potential product
liability claims could prevent or inhibit the commercialization of
pharmaceutical products we develop, alone or with corporate collaborators. We
currently carry clinical trial insurance but do not carry product liability
insurance. Our corporate collaborators or we may not be able to obtain insurance
at a reasonable cost, if at all. While under various circumstances we are
entitled to be indemnified against losses by our corporate collaborators,
indemnification may not be available or adequate should any claim arise.
If we use biological and hazardous materials in a manner that causes injury or
violates laws, we may be liable for damages.
Our research and development activities involve the controlled use of
potentially harmful biological materials as well as hazardous materials,
chemicals and various radioactive compounds. We cannot completely eliminate the
risk of accidental contamination or injury from the use, storage, handling or
disposal of these materials. In the event of contamination or injury, we could
be held liable for damages that result, and any liability could exceed our
resources. We are subject to federal, state and local laws and regulations
governing the use, storage, handling and disposal of these materials and
specified waste products. The cost of compliance with these laws and regulations
could be significant.
10
<PAGE>
If our officers, directors and largest stockholders choose to act together, they
may be able to control our management and operations, acting in their best
interests and not necessarily those of other stockholders.
Our directors, executive officers and principal stockholders and their
affiliates beneficially own approximately 41.0% of our common stock, based on
their beneficial ownership as of September 30, 1999. Accordingly, they
collectively will have the ability to determine the election of all of our
directors and to determine the outcome of most corporate actions requiring
stockholder approval. They may exercise this ability in a manner that advances
their best interests and not necessarily those of other stockholders.
In particular, Pharma Vision 2000 AG, a closed-end mutual fund investing in
pharmaceutical companies such as Roche, Glaxo and Hoechst, currently owns
approximately 22.7% of our outstanding common stock. Peter Sjostrand, a member
of our Board of Directors, and David V. Goeddel, our Chief Executive Officer and
a member of our Board of Directors, are members of the board of directors of
Pharma Vision. Pharma Vision is not a party to any standstill or other
agreement limiting its ability to acquire additional shares of our capital stock
and may in the future, through open market purchases or otherwise, acquire
additional shares of our common stock.
Anti-takeover provisions in our charter documents and under Delaware law may
make an acquisition of us, which may be beneficial to our stockholders, more
difficult.
Provisions of our amended and restated certificate of incorporation and
bylaws, as well as provisions of Delaware law, could make it more difficult for
a third party to acquire us, even if doing so would benefit our stockholders.
These provisions:
. establish that members of the board of directors may be removed only for
cause upon the affirmative vote of stockholders owning at least two-
thirds of our capital stock;
. authorize the issuance of ``blank check'' preferred stock that could be
issued by our board of directors to increase the number of outstanding
shares and thwart a takeover attempt;
. limit who may call a special meeting of stockholders;
. prohibit stockholder action by written consent, thereby requiring all
stockholder actions to be taken at a meeting of our stockholders; and
. establish advance notice requirements for nominations for election to
the board of directors or for proposing matters that can be acted upon
at stockholder meetings.
In addition, until November 2000, Section 203 of the Delaware General
Corporation Law may discourage, delay or prevent a third party from acquiring
us.
Our stock price may be volatile, and your investment in our stock could decline
in value.
The market prices for securities of biotechnology companies in general have been
highly volatile and may continue to be highly volatile in the future. The
following factors, in addition to other risk factors described in this section,
may have a significant impact on the market price of our common stock:
. announcements of technological innovations or new commercial products by
our competitors or us;
. developments concerning proprietary rights, including patents;
. developments concerning our collaborations;
. publicity regarding actual or potential medical results relating to
products under development by our competitors or us;
. regulatory developments in the United States and foreign countries;
. litigation;
. economic and other external factors or other disaster or crisis; or
. period-to-period fluctuations in financial results.
11
<PAGE>
If our stockholders sell substantial amounts of our common stock, the market
price of our common stock may fall.
If our stockholders sell substantial amounts of our common stock, including
shares issued upon the exercise of outstanding options and warrants, the market
price of our common stock may fall. These sales also might make it more
difficult for us to sell equity or equity-related securities in the future at a
time and price that we deem appropriate.
12
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth certain information about the number of
shares of our common stock beneficially owned by the selling stockholder named
below as of January 31, 2000 and on an as adjusted basis to give effect to the
sale of the shares offered by the selling stockholder. This information is based
on information provided by the selling stockholder or his representatives. The
shares are being registered to permit public secondary trading of the shares,
and the selling stockholder may offer the shares for resale from time to time.
See "Plan of Distribution." Because the selling stockholder may offer all, some
or none of the shares which he holds, no definitive estimate can be given as to
the number of shares that will be held by the selling stockholder upon
termination of the offering. Shares held by the selling stockholder may be sold
either pursuant to the Registration Statement of which this Prospectus is a part
or pursuant to Rule 144 under the Securities Act.
<TABLE>
<CAPTION>
Shares Beneficially Shares Beneficially Owned
Owned Before Sales Shares Owned After Sales
Under this Prospectus Offered for Selling Under this Prospectus
--------------------- ---------------------
Selling Stockholder Number Percentage Stockholder's Account Number Percentage
- ------------------- ------ ---------- --------------------- ------ ----------
<S> <C> <C> <C> <C> <C>
John McLaughlin 263,001 * 263,001 0 0
</TABLE>
______
*Less than one percent.
PLAN OF DISTRIBUTION
The shares covered by this prospectus may be offered or sold from time to
time by the selling stockholder, or by pledgees, donees, transferees or other
successors in interest. Sales may be made on the Nasdaq National Market, in
block trades, pursuant to purchases by broker or a dealer as principal, in
private transactions or otherwise, at prices then prevailing in the market or at
negotiated prices. Tularik will not receive any of the proceeds from sales by
the selling stockholder.
Any broker or dealer involved in the offer or sale of the shares covered by
this prospectus may receive brokerage commissions or discounts. To our
knowledge, there is currently no agreement with any broker or dealer for any
such transactions. Upon sale of shares covered by this prospectus, the selling
stockholder or anyone effecting sales on behalf of the selling stockholder may
be deemed an underwriter, as that term is defined in the Securities Act of 1933.
The selling stockholder does not believe he is an underwriter within the meaning
of the Securities Act. All expenses of the registration of the shares covered
by this prospectus are being paid by Tularik.
LEGAL MATTERS
The validity of the issuance of the shares of Common Stock described herein
will be passed upon for the Company by Cooley Godward LLP, Palo Alto,
California.
13
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the Securities
and Exchange Commission. You may read and copy any document we file at the
SEC's Public Reference Room at Judiciary Plaza, 450 Fifth Street, N.W., Room
1024, Washington, D.C. 20549 and at the following regional offices of the SEC:
Pacific Regional Office, 5670 Wilshire Boulevard, 11th Floor, Los Angeles,
California 90036-3648; and San Francisco District Office, 44 Montgomery Street,
Suite 1100, San Francisco, California 94104. Copies can also be obtained from
the Public Reference Room of the SEC at 450 Fifth Street, N.W., Washington, D.C.
20549, upon payment of prescribed rates. You may obtain information on the
operation of the SEC's Public Reference Room by calling the SEC at (800) SEC-
0300. Our SEC filings are available to you on the SEC's Internet site at
http://www.sec.gov. Our common stock is quoted on The Nasdaq National Market.
Reports, proxy statements and other information concerning us may be inspected
at the National Association of Securities Dealers, Inc. at 1735 K Street, N.W.,
Washington, D.C. 20006.
This prospectus is only part of a registration statement on Form S-8 that
we have filed with the SEC under the Securities Act, and therefore omits certain
information contained in the registration statement. We have also filed
exhibits and schedules with the registration statement that are not included in
this prospectus, and you should refer to the applicable exhibit or schedule for
a complete description of any statement referring to any contract or other
document. A copy of the registration statement, including the exhibits and
schedules thereto, may be inspected without charge at the Public Reference Room
of the SEC described above, and copies of such material may be obtained from
such office upon payment of the fees prescribed by the SEC.
The SEC allows us to "incorporate by reference" some information contained
in documents that we file with them, which means that we can disclose important
information to you by referring you to these documents. The information
incorporated by reference is considered to be part of this prospectus and later
information we file with the SEC will automatically update and supercede this
information. We incorporate by reference the documents listed below and any
future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act. The documents we are incorporating by reference are:
(a) The Company's final prospectus (the "Final Prospectus") filed with
the Commission on December 13, 1999 pursuant to Rule 424(b) in connection with
the Company's Registration Statement on Form S-1 (No. 333-89177), as amended,
initially filed with the Commission on October 15, 1999.
(b) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A (No. 000-28397) filed with the
Commission pursuant to the Exchange Act on December 7, 1999.
You may request a copy of any of these filings at no cost by writing or
telephoning us at Two Corporate Drive, South San Francisco, California 94080,
Attention: William J. Rieflin, General Counsel, telephone (650) 825-7300.
__________________________________________
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY TO ANY
PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL
OR TO ANY PERSON TO WHOM IT IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY OFFER OR SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY OR THAT
THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE
DATE HEREOF.
14
<PAGE>
PART II
Item 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by Tularik Inc. (the "Company") with the
Securities and Exchange Commission are incorporated by reference into this
Registration Statement:
(a) The Company's final prospectus (the "Final Prospectus") filed with
the Commission on December 13, 1999 pursuant to Rule 424(b) in connection with
the Company's Registration Statement on Form S-1 (No. 333-89177), as amended,
initially filed with the Commission on October 15, 1999.
(b) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A (No. 000-28397) filed with the
Commission pursuant to the Exchange Act on December 7, 1999.
(c) All other documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of the offering of Common Stock.
The Company has not filed, and has not been required to file as of the
date hereof, an annual report pursuant to Section 13 or 15(d) of the Exchange
Act.
Any statement contained in a document incorporated by, or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Registration
Statement.
Item 4. DESCRIPTION OF SECURITIES
Inapplicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The validity of the Common Stock offered hereby will be passed upon for
the Company by Cooley Godward LLP, Palo Alto, California. As of the date of this
Registration Statement, certain partners and associates of Cooley Godward LLP
own an aggregate of 13,514 shares of the Company's Common Stock through
investment partnerships.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As permitted by Delaware law, the Company's amended and restated
certificate of incorporation provides that no director of the Company will be
personally liable to the Company or its stockholders for monetary damages for
breach of fiduciary duty as a director, except for liability:
. for any breach of duty of loyalty to the Company or to its
stockholders;
. for acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law;
. for unlawful payment of dividends or unlawful stock repurchases or
redemptions under Section 174 of the Delaware General Corporation Law;
or
. for any transaction from which the director derived an improper
personal benefit.
The Company's amended and restated certificate of incorporation further
provides that the Company must indemnify its directors and executive officers
and may indemnify its other officers and employees and agents to the
II-1
<PAGE>
fullest extent permitted by Delaware law. The Company believes that
indemnification under its amended and restated certificate of incorporation
covers negligence and gross negligence on the part of indemnified parties.
The Company has entered into indemnification agreements with each of its
directors and certain officers. These agreements, among other things, require
the Company to indemnify each director and officer for certain expenses
including attorney's fees, judgments, fines and settlement amounts incurred by
any such person in any action or proceeding, including any action by or in the
right of the Company, arising out of the person's services as its director or
officer of the Company or any subsidiary of the Company or any other company or
enterprise to which the person provides services at the Company's request.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED
With respect to the restricted securities to be reoffered or resold
pursuant to this Registration Statement, the issuance of such shares of Common
Stock was exempt from registration pursuant to Section 4(2) of the Securities
Act of 1933, as amended (the "Act"), based upon the following facts. Such
shares were issued to a person who was an executive officer of the Company at
the time of the issuance of the option pursuant to which 262,501 of the shares
of Common Stock were issued and at the time contributions were made to a 401(m)
matching plan under which 500 shares of Common Stock were issued, who acquired
the shares for investment and who had sufficient knowledge and experience in
financial and business matters that he was capable of evaluating the merits and
risks of the investment.
Item 8. EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number
------
<C> <S>
3.1* Amended and Restated Certificate of Incorporation.
3.2* Amended and Restated Bylaws.
4.1* Specimen Common Stock Certificate.
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Cooley Godward LLP. Reference is made to Exhibit 5.1.
24.1 Power of Attorney. Reference is made to the Signature Page.
99.1* 1997 Equity Incentive Plan.
99.2** Tularik Matching Plan.
99.3 Incentive Stock Option Agreements, dated as of January 28, 1998 and
June 17, 1999, and Nonstatutory Stock Option Agreements, dated as of
January 28, 1998 and June 17, 1999, between the Company and John
McLaughlin.
</TABLE>
- -----------------------------------
* Filed as an exhibit to the Company's Registration Statement on Form S-1 (No.
333-89177), as amended through the date hereof, and incorporated herein by
reference.
** Filed as an exhibit to the Company's Registration Statement on Form S-8 (No.
333-95605) and incorporated herein by reference.
II-2
<PAGE>
UNDERTAKINGS
1. The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the 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; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
Provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the issuer pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference herein.
(b) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) 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.
2. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to
be a new registration statement relating to the securities offered herein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
3. Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the 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 Securities 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 Securities Act and will be governed by
the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, 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 South San Francisco, State of California, on February
14, 2000.
TULARIK INC.
By: /s/ David V. Goeddel
-------------------------------------
David V. Goeddel
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints David V. Goeddel, William J. Rieflin and
Corinne H. Lyle, and each or any one of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or any of them, or
their or his or her substitutes or substitute, may lawfully do or cause to be
done by virtue hereof.
II-4
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ David V. Goeddel Chief Executive Officer and Director
- ------------------------------------- (Principal Executive Officer) February 14, 2000
David V. Goeddel
/s/ Corinne H. Lyle Chief Financial Officer (Principal
- ------------------------------------- Financial and Accounting Officer) February 14, 2000
Corinne H. Lyle
- ------------------------------------- Director February 14, 2000
A. Grant Heidrich, III
- ------------------------------------- Director February 14, 2000
Mark J. Levin
/s/ Pual A. Marks
- ------------------------------------- Director February 14, 2000
Paul A. Marks
/s/ Edward R. McCracken
- ------------------------------------- Director February 14, 2000
Edward R. McCracken
/s/ Steven L. McKnight
- ------------------------------------- Director February 14, 2000
Steven L. McKnight
- ------------------------------------- Director February 14, 2000
Peter J. Sjostrand
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number
<C> <S>
3.1* Amended and Restated Certificate of Incorporation.
3.2* Amended and Restated Bylaws.
4.1* Specimen Common Stock Certificate.
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Cooley Godward LLP. Reference is made to Exhibit 5.1.
24.1 Power of Attorney. Reference is made to the Signature Page.
99.1* 1997 Equity Incentive Plan.
99.2** Tularik Matching Plan.
99.3 Incentive Stock Option Agreements, dated as of January 28, 1998 and June 17, 1999,
and Nonstatutory Stock Option Agreements, dated as of January 28, 1998 and June 17,
1999, between the Company and John McLaughlin.
</TABLE>
- --------------------------------
* Filed as an exhibit to the Company's Registration Statement on Form S-1 (No.
333-89177), as amended through the date hereof, and incorporated herein by
reference.
** Filed as an exhibit to the Company's Registration Statement on Form S-8 (No.
333-95605) and incorporated herein by reference.
<PAGE>
EXHIBIT 5.1
[COOLEY GODWARD LETTERHEAD]
February 14, 2000
Tularik Inc.
Two Corporate Drive
South San Francisco, CA 94080
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in connection
with the filing by Tularik Inc. (the "Company") of a Registration Statement on
Form S-8 (the "Registration Statement") with the Securities and Exchange
Commission covering the resale of up to 263,001 shares of the Company's Common
Stock, $.001 par value (the "Shares").
In connection with this opinion, we have examined the Registration Statement,
your Certificate of Incorporation and By-laws, as amended, and such other
documents, records, certificates, memoranda and other instruments as we deem
necessary as a basis for this opinion. We have assumed the genuineness and
authenticity of all documents submitted to us as originals, the conformity to
originals of all documents submitted to us as copies thereof, and the due
execution and delivery of all documents where due execution and delivery are a
prerequisite to the effectiveness thereof.
On the basis of the foregoing, and in reliance thereon, we are of the opinion
that the Shares have been validly issued and are fully paid and nonassessable.
We consent to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
Cooley Godward LLP
By: /s/ Suzanne Sawochka Hooper
----------------------------
Suzanne Sawochka Hooper
<PAGE>
Exhibit 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the registration statement
(Form S-8) pertaining to the 1997 Equity Incentive Plan and Tularik Matching
Plan of our report dated October 25, 1999 with respect to the consolidated
financial statements of Tularik Inc. as of December 31, 1997 and 1998 and for
each of three years in the period December 31, 1998 and as of September 30, 1999
and for the nine-month period then ended included in its registration statement
(Form S-1, No. 333-95605) and related prospectus dated December 13, 1999 filed
pursuant to Rule 424(b), filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Palo Alto, California
February 14, 2000
<PAGE>
Exhibit 99.3
It Is Unlawful To Consummate A Sale Or Transfer Of
This Security, Or Any Interest Therein, Or To
Receive Any Consideration Therefor, Without The
Prior Written Consent Of The Commissioner Of
Corporations Of The State Of California, Except As
Permitted In The Commissioner's Rules.
INCENTIVE STOCK OPTION AGREEMENT
John P. McLaughlin, Optionee:
Tularik Inc. (the "Company") has granted you an option to purchase shares
of the common stock of the Company ("Common Stock") under the Tularik Inc.
Equity Incentive Plan (the "Plan"). This option is intended to qualify for the
federal income tax benefits available to an "incentive stock option" within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").
The details of your option are as follows:
1. Total Number of Shares Subject to this Option. The total number of
shares of Common Stock subject to this option is 33,333.
2. Vesting. The date that vesting begins on this option is December 15,
1997. 12/48ths of the shares will vest on December 15, 1998 and 1/48th of the
shares will then vest on the 15th day of each month thereafter for the next 36
months until either (i) you cease to provide services for the Company for any
reason or (ii) this option becomes fully vested.
This option may be exercised only with respect to those shares which
are vested except as permitted under paragraph 4 of this Agreement.
3. Exercise Price and Method of Payment.
(a) Exercise Price. The exercise price of this option is $3.00 per
share, which is not less than the fair market value of the Common Stock on the
date this option was granted to you.
(b) Method of Payment. Payment of the exercise price per share is
due in full upon exercise of all or any part of this option. You may make
payment of the exercise price under one or a combination of the following
alternatives:
(i) Payment of the exercise price per share in cash or by
check at the time of exercise;
(ii) If at the time of exercise the Company's Common Stock is
publicly traded and quoted regularly in the Wall Street Journal, payment with
shares of the Company's Common Stock you already own. The Common Stock (i)
will be valued at its fair
1.
<PAGE>
market value on the date of exercise, (ii) if originally acquired from the
Company, it must have been held for the period required to avoid a charge to the
Company's reported earnings, and (iii) it must be owned free and clear of any
liens, claims, encumbrances or security interests;
(iii) This option may also be exercised as part of a program
developed under Regulation T as promulgated by the Federal Reserve Board which
results in the receipt of cash (or a check) by the Company before Common Stock
is issued; or
(iv) Payment by a combination of the methods of payment listed
in subparagraph 3(b)(i) through 3(b)(iii) above.
4. Early Exercise of Option (Exercise of Unvested Shares).
(a) At any time during your service with the Company or a Parent or
Subsidiary (as defined in the Plan) of the Company ("Related Company"), you may
exercise any or all of the shares subject to this option whether or not the
shares have vested, provided, however, that:
(i) a partial exercise of this option will be deemed to cover
vested shares first and then the earliest vesting installment of unvested
shares;
(ii) any unvested shares at the date of exercise will be
subject to the purchase option in favor of the Company which is described in the
Early Exercise Stock Purchase Agreement attached as an exhibit to this option;
and
(iii) you will enter into the Early Exercise Stock Purchase
Agreement which will contain the same vesting schedule as in this option
agreement.
(iv) this option may not be exercised under this paragraph 4
if the exercise would cause the aggregate fair market value of any shares
subject to incentive stock options granted to you by the Company or a Related
Company (valued as of their grant date) which would become exercisable for the
first time during any calendar year to exceed $100,000.
(b) Your right to purchase unvested shares ends upon termination of
your service with the Company and all Related Companies.
5. Whole Shares. You may exercise this option only for whole shares and
the Company shall be under no obligation to issue any fractional shares of
Common Stock to you.
6. Securities Law Compliance. Notwithstanding anything to the contrary
contained in this option, 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 the shares are not registered at that
time, the Company has determined that the exercise and issuance would be exempt
from the registration requirements of the Act.
This option has been granted under the terms of a compensatory benefit plan
established by the Company to provide financial incentives for the Company's
employees (including officers) and certain directors and consultants to work for
the financial success of the Company
2.
<PAGE>
and is intended to comply with the provisions of Rule 701 promulgated by the
Securities and Exchange Commission under the Act.
7. Term of Option. The term of this option begins on the date you were
granted this option and, unless it ends sooner for the reason described below,
terminates on January 21, 2008 (the "Expiration Date") (which date shall be no
more than ten (10) years from the date this option was granted). You may not,
under any circumstances, exercise this option after the "Expiration Date." In
addition, this option may not be exercised if it would cause a violation of the
short-swing trading profits provisions of Section 16(b) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") which are applicable to
certain shareholders of companies with publicly traded stock.
This option will also terminate prior to the end of its term if your
service as an employee or an advisor or consultant with the Company and all
Related Companies is terminated for any reason or for no reason. Your option
will then terminate three (3) months after the date on which you are no longer
providing services to the Company or any Related Company unless one of the
following circumstances exists:
(a) Your termination of service is due to your permanent and total
disability (within the meaning of Section 422(c)(6) of the Code). This option
will then terminate on the earlier of the Expiration Date or twelve (12) months
following the termination of your service.
(b) Your termination of service is due to your death. This option
will then terminate on the earlier of the Expiration Date or twelve (12) months
after your death.
(c) If during any part of the three (3) month period you may not
exercise your option solely because of the condition described in paragraph 6
above, then your option will not terminate until the earlier of the Expiration
Date or until this option shall become exercisable for a period of three (3)
months after the termination of your service.
(d) If your exercise of the option within three (3) months after
termination of your service with the Company and all Related Companies will
result in liability under Section 16(b) of the Exchange Act, then your option
will terminate on the earlier of (i) the Expiration Date or (ii) the tenth
(10th) day after the last date on which your exercise would result in such
liability.
Only the shares which are vested on the date of your termination of service
may be exercised following the termination of your service.
In order to obtain the federal income tax advantages associated with an
incentive stock option, the Code requires that at all times beginning on the
date of grant of the option and ending on the day three (3) months before the
date of the option's exercise, you must be an employee of the Company or a
Related Company, except in the event of your death or disability. The Company
has provided for continued vesting or extended exercisability for your option
under certain circumstances for your benefit, but cannot guarantee that your
option will necessarily be treated as an incentive stock option if you provide
services to the Company or a Related Company as a consultant or exercise your
option more than three (3) months after the date your employment with the
Company and all Related Companies terminates.
3.
<PAGE>
8. Exercise of Option.
(a) You may exercise this option to the extent specified above, by
delivering the Notice of Exercise attached to this option as an exhibit together
with the exercise price to the Secretary of the Company, or another person
designated by the Company, during regular business hours, together with any
additional documents required in the Notice of Exercise.
(b) By exercising this option you agree that:
(i) as a condition to exercise, the Company may require you
to pay to the Company any tax withholding obligation of the Company arising from
(1) your exercise of this option; (2) the lapse of any substantial risk of
forfeiture to which the shares are subject at the time of exercise; or (3) the
disposition of the shares of Common Stock you acquired upon the exercise of this
option; and
(ii) you will notify the Comp. any in writing within fifteen
(15) days after the date on which you dispose of any of the shares of the Common
Stock issued to you upon your exercise of this option if the disposition of
shares occurs within two (2) years after the date on which you were granted this
option or within one (1) year of the date on which you exercised this options;
and
(iii) in connection with the first underwritten registration of
the offering of any securities of the Company under the Act, the Company (or a
representative of the underwriters) may require that you not sell or otherwise
transfer or dispose of any shares of Common Stock or other securities of the
Company during a period not to exceed one hundred eighty (180) days following
the effective date (the "Effective Date") of the registration statement of the
Company fried under the Act. For purposes of this restriction you will be
considered to own securities which (i) you own directly or indirectly, including
securities held for your benefit by nominees, custodians, brokers or pledgees;
(ii) you may acquire within sixty (60) days of the Effective Date; (iii) are
owned directly or indirectly, by or for your brothers or sisters (whether by
whole or half blood), spouse, ancestors and lineal descendants; or (iv) are
owned, directly or indirectly, by or for a corporation, partnership, estate or
trust of which you are a shareholder, partner or beneficiary, but only to the
extent of your proportionate interest in the corporation, partnership, estate or
trust as a shareholder, partner or beneficiary. You further agree that the
Company may impose stop-transfer instructions on the securities subject to these
restrictions until the end of the period.
9. Option Not Transferable. This option may not be transferred, except
by will or by the laws of descent and distribution, and may be exercised during
your life only by you.
10. Option Not an Employment Contract. This option is not an employment
contract and nothing in this option creates in any way whatsoever any obligation
on your part to continue in the employ of the Company, or of the Company to
continue your employment with the Company. In the event that this option is
granted to you in connection with the performance of services as a consultant or
director, references to employment, employee and similar terms shall be deemed
to include the performance of services as a consultant or a director, as the
case
4.
<PAGE>
may be, provided, however, that no rights as an employee shall arise by
reason of the use of such terms.
11. Notices. Any notices provided for in this option or the Plan will be
given in writing and will be considered to have been given upon receipt or, in
the case of notices delivered by the Company to you, five (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 later designate in writing to
the Company.
12. Governing Plan Document. This option is subject to all the
provisions of the Plan, which is attached as an exhibit to this option. All
provisions of the Plan are hereby made a part of this option. This option is
further subject to all interpretations, amendments, rules and regulations which
may from time to time be set forth and adopted under 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.
Dated the 28/th /day of January, 1998.
Very truly yours,
TULARIK INC.
By /s/ David V. Goeddel
---------------------------------
Duly authorized on behalf
of the Board of Directors
Attachments:
Tularik Inc. Equity Incentive Plan
Regulation 260.141.11
Notice of Exercise
Early Exercise Stock Purchase Form
Question and Answer Summary
5.
<PAGE>
(a) I acknowledge that I have received the foregoing option and the
attachments referenced in it and I understand that all rights and liabilities
with respect to this option are set forth in the option and the Plan; and
(b) I acknowledge that as of the date of grant of this option, this
option and its exhibits set forth the entire understanding between myself and
the Company and any Related Companies regarding the acquisition of stock in the
Company and supersedes all prior oral and written agreements on that subject
with the exception of (i) the options previously granted and delivered to me
under the Plan and (ii) the following agreements only:
None /s/ JPM
---------------
(Initial)
Other
------------------------------------
------------------------------------
------------------------------------
(c) I acknowledge receipt of a copy of Section 260.141.11 of Title
10 of the California Code of Regulations.
/s/ John P. McLaughlin
-----------------------------------
Optionee
Address: 523 Occidental Avenue
San Mateo, CA 94402
6.
<PAGE>
It Is Unlawful To Consummate A Sale Or Transfer Of
This Security, Or Any Interest Therein, Or To
Receive Any Consideration Therefor, Without The
Prior Written Consent Of The Commissioner Of
Corporations' Of The State Of California, Except
As Permitted In The Commissioner's Rules.
NONSTATUTORY STOCK OPTION AGREEMENT
John P. McLaughlin, Optionee:
Tularik Inc. (the "Company") has granted you an option to purchase shares
of the common stock of the Company ("Common Stock") under the Equity Incentive
Plan (the "Plan"). This option is not intended to qualify for the federal
income tax benefits available to an "incentive stock option" within the meaning
of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") and
is referred to under the Plan as a Nonstatutory Stock Option.
The details of your option are as follows:
1. Total Number of Shares Subject to this Option. The total number of
shares of Common Stock subject to this option is 466,667.
2. Vesting. The date that vesting begins on this option is December 15,
1997. 12/48ths of the shares will vest on December 15, 1998 and 1/48th of the
shares will then vest on the 15th day of each month thereafter for the next 36
months until either (i) you cease to provide services for the Company for any
reason or (ii) this option becomes fully vested.
This option may be exercised only with respect to those shares which are
vested except as permitted under paragraph 4 of this Agreement.
3. Exercise Price and Method of Payment.
(a) Exercise Price. The exercise price of this option is $3.00 per
share, which is not less than the fair market value of the Common Stock on the
date this option was granted to you.
(b) Method of Payment. Payment of the exercise price per share is
due in full upon exercise of all or any part of this option. You may make
payment of the exercise price under one or a combination of the following
alternatives:
(i) Payment of the exercise price per share in cash or by check
at the time of exercise;
(ii) If at the time of exercise, the Company's Common Stock is
publicly traded and quoted regularly in the Wall Street Journal, payment with
shares of the Company's Common Stock you already own. The Common Stock (i) will
be valued at its fair
1.
<PAGE>
market value on the date of exercise, (ii) if originally acquired from the
Company, it must have been held for the period required to avoid a charge to the
Company's reported earnings, and (iii) it must be owned free and clear of any
liens, claims, encumbrances or security interests;
(iii) This option may also be exercised as part of a program
developed under Regulation T as promulgated by the Federal Reserve Board which
results in the receipt of cash (or a check) by the Company before Common Stock
is issued; or
(iv) Payment by a combination of the methods of payment listed
in subparagraph 3(b)(i) through 3(b)(iii) above.
4. Early Exercise of Option (Exercise of Unvested Shares).
(a) At any time during your service with the Company or a Parent or
Subsidiary (as defined in the Plan) of the Company ("Related Company"), you may
exercise any or all of the shares subject to this option whether or not the
shares have vested, provided, however, that:
(i) a partial exercise of this option will be deemed to cover
vested shares first and then the earliest vesting installment of unvested
shares;
(ii) any unvested shares at the date of exercise will be subject
to the purchase option in favor of the Company which is described in the Early
Exercise Stock Purchase Agreement attached as an exhibit to this option; and
(iii) you will enter into the Early Exercise Stock Purchase
Agreement which will contain the same vesting schedule as in this option
agreement.
(b) Your right to purchase unvested shares ends upon termination of
your service with the Company and all Related Companies.
5. Whole Shares. You may exercise this option only for whole shares and
the Company shall be under no obligation to issue any fractional shares of
Common Stock to you.
6. Securities Law Compliance. Notwithstanding anything to the contrary
contained in this option, 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 the shares are not registered at that
time, the Company has determined that the exercise and issuance would be exempt
from the registration requirements of the Act.
This option has been granted under the terms of a compensatory benefit plan
established by the Company to provide financial incentives for the Company's
employees (including officers) and certain directors and consultants to work for
the financial success of the Company and is intended to comply with the
provisions of Rule 701 promulgated by the Securities and Exchange Commission
under the Act.
7. Term of Option. The term of this option begins on the date you were
granted this option and, unless it ends sooner for the reason described below,
terminates on January 21,
2.
<PAGE>
2008 (the "Expiration Date") (which date shall be no more than ten (10) years
from the date this option was granted). You may not, under any circumstances,
exercise this option after the Expiration Date. In addition, this option may not
be exercised if it would cause a violation of the short-swing trading profits
provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") which are applicable to certain shareholders of companies
with publicly traded stock.
This option will also terminate prior to the end of its term if your
service as an employee or an advisor or consultant with the Company and all
Related Companies ends for any reason or for no reason. Your option will then
terminate three (3) months after the date on which you are no longer providing
services to the Company or any Related Company unless one of the following
circumstances exists:
(a) Your termination of service is due to your permanent and total
disability (within the meaning of Section 422(c)(6) of the Code). This option
will then terminate on the earlier of the Expiration Date or twelve (12) months
following the date of your disability.
(b) Your termination of service is due to your death. This option
will then terminate on the earlier of the Expiration Date or twelve (12) months
after your death.
(c) If during any part of the three (3) month period you may not
exercise your option solely because of the conditions described in paragraph 6
above, then your option will not terminate until the earlier of the Expirations
Date or until this option shall become exercisable for a period of three (3)
months after the termination of your service.
(d) If your exercise of the option within three (3) months after
termination of your service with the Company and all Related Companies will
result in liability under Section 16(b) of the Exchange Act, then your option
will terminate on the earlier of (i) the Expiration Date or (ii) the tenth
(10th) day after the last date on which your exercise would result in such
liability.
Only the shares which are vested on the date of your termination of service
may be exercised following the termination of your service.
8. Exercise of Option.
(a) You may exercise this option to the extent specified above, by
delivering the Notice of Exercise attached to this option as an exhibit together
with the exercise price to the Secretary of the Company, or another person
designated by the Company, during regular business hours, together with any
additional documents required in the Notice of Exercise.
(b) By exercising this option you agree that:
(i) as a condition to exercise, the Company may require you to
pay to the Company any tax withholding obligation of the Company arising from
(1) your exercise of this option; (2) the lapse of any substantial risk of
forfeiture to which the shares are subject at the time of exercise; or (3) the
disposition of the shares of Common Stock you acquired upon the exercise of this
option; and
3.
<PAGE>
(ii) in connection with the first underwritten registration of
the offering of any securities of the Company under the Act, the Company (or a
representative of the underwriters) may require that you not sell or otherwise
transfer or dispose of any shares of Common Stock or other securities of the
Company during a period not to exceed one hundred eighty (180) days following
the effective date (the "Effective Date") of the registration statement of the
Company fried under the Act. For purposes of this restriction you will be
considered to own securities which (i) you own directly or indirectly, including
securities held for your benefit by nominees, custodians, brokers or pledgees;
(ii) you may acquire within sixty (60) days of the Effective Date; (iii) are
owned directly or indirectly, by or for your brothers or sisters (whether by
whole or half blood), spouse, ancestors and lineal descendants; or (iv) are
owned, directly or indirectly, by or for a corporation, partnership, estate or
trust of which you are a shareholder, partner or beneficiary, but only to the
extent of your proportionate interest in the corporation, partnership, estate or
trust as a shareholder, partner or beneficiary. You further agree that the
Company may impose stop-transfer instructions on the securities subject to these
restrictions until the end of the period.
9. Option Not Transferable. This option may not be transferred, except
by will or by the laws of descent and distribution, and may be exercised during
your life only by you.
10. Option Not an Employment Contract. This option is not an employment
contract and nothing in this option creates in any way whatsoever any obligation
on your part to continue in the employ of the Company, or of the Company to
continue your employment with the Company. In the event that this option is
granted to you in connection with the performance of services as a consultant or
director, references to employment, employee and similar terms shall be deemed
to include the performance of services as a consultant or a director, as the
case may be, provided, however, that no rights as an employee shall arise by
reason of the use of such terms.
11. Notices. Any notices provided for in this option or the Plan will
be given in writing and will be considered to have been given upon receipt or,
in the case of notices delivered by the Company to you, five (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 later designate in
writing to the Company.
12. Governing Plan Document. This option is subject to all the
provisions of the Plan, which is attached as an exhibit to this option. All
provisions of the Plan are hereby made a part of this option. This option is
further subject to all interpretations, amendments, rules and regulations which
may from time to time be set forth and adopted under 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.
4.
<PAGE>
Dated the 28/th /day of January, 1998.
Very truly yours,
TULARIK INC.
By /s/ David V. Goddel
-------------------------------
Duly authorized on behalf
of the Board of Directors
Attachments:
Tularik Inc. Equity Incentive Plan
Regulation 260.141.11
Notice of Exercise
Early Exercise Stock Purchase Form
Question and Answer Summary
5.
<PAGE>
(a) I acknowledge that I have received the foregoing option and the
attachments referenced in it and I understand that all rights and liabilities
with respect to this option are set forth in the option and the Plan; and
(b) I acknowledge that as of the date of grant of this option, this
option and its exhibits set forth the entire understanding between myself and
the Company and any Related Companies regarding the acquisition of stock in the
Company and supersedes all prior oral and written agreements on that subject
with the exception of (i) the options previously granted and delivered to me
under the Plan and (ii) the following agreements only:
None /s/ JPM
-------------------
(Initial)
Other
------------------------------
------------------------------
------------------------------
(c) I acknowledge receipt of a copy of Section 260.141.11 of Title 10
of the California Code of Regulations.
/s/ John P. McLaughlin
-------------------------------
Optionee
Address: 523 Occidental Avenue
San Mateo, CA 94402
6.
<PAGE>
It Is Unlawful To Consummate A Sale Or Transfer Of
This Security, Or Any Interest Therein, Or To
Receive Any Consideration Therefor, Without The
Prior Written Consent Of The Commissioner Of
Corporations Of The State Of California, Except As
Permitted In The Commissioner's Rules.
INCENTIVE STOCK OPTION AGREEMENT
John P. McLaughlin, Optionee:
Tularik Inc. (the "Company") has granted you an option to purchase shares
of the common stock of the Company ("Common Stock") under the Tularik Inc.
Equity Incentive Plan (the "Plan"). This option is intended to qualify for the
federal income tax benefits available to an "incentive stock option" within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").
The details of your option are as follows:
1. Total Number of Shares Subject to this Option. The total number of
shares of Common Stock subject to this option is 33,333.
2. Vesting. The date that vesting begins on this option is June 17, 1999.
1/48th of the shares will vest on July 17, 1999 and 1/48th of the shares will
then vest on the 17th day of each month thereafter for the next 47 months until
either (i) you cease to provide services for the Company for any reason or (ii)
this option becomes fully vested.
This option may be exercised only with respect to those shares which
are vested except as permitted under paragraph 4 of this Agreement.
3. Exercise Price and Method of Payment.
(a) Exercise Price. The exercise price of this option is $3.00 per
share, which is not less than the fair market value of the Common Stock on the
date this option was granted to you.
(b) Method of Payment. Payment of the exercise price per share is
due in full upon exercise of all or any part of this option. You may make
payment of the exercise price under one or a combination of the following
alternatives:
(i) Payment of the exercise price per share in cash or by
check at the time of exercise;
(ii) If at the time of exercise the Company's Common Stock is
publicly traded and quoted regularly in the Wall Street Journal, payment with
shares of the Company's Common Stock you already own. The Common Stock (i) will
be valued at its fair
1.
<PAGE>
market value on the date of exercise, (ii) if originally acquired from the
Company, it must have been held for the period required to avoid a charge to the
Company's reported earnings, and (iii) it must be owned free and clear of any
liens, claims, encumbrances or security interests;
(iii) This option may also be exercised as part of a program
developed under Regulation T as promulgated by the Federal Reserve Board which
results in the receipt of cash (or a check) by the Company before Common Stock
is issued; or
(iv) Payment by a combination of the methods of payment listed
in subparagraph 3(b)(i) through 3(b)(iii) above.
4. Early Exercise of Option (Exercise of Unvested Shares).
(a) At any time during your service with the Company or a Parent or
Subsidiary (as defined in the Plan) of the Company ("Related Company"), you may
exercise any or all of the shares subject to this option whether or not the
shares have vested, provided, however, that:
(i) a partial exercise of this option will be deemed to cover
vested shares first and then the earliest vesting installment of unvested
shares;
(ii) any unvested shares at the date of exercise will be
subject to the purchase option in favor of the Company which is described in the
Early Exercise Stock Purchase Agreement attached as an exhibit to this option;
and
(iii) you will enter into the Early Exercise Stock Purchase
Agreement which will contain the same vesting schedule as in this option
agreement.
(iv) this option may not be exercised under this paragraph 4
if the exercise would cause the aggregate fair market value of any shares
subject to incentive stock options granted to you by the Company or a Related
Company (valued as of their grant date) which would become exercisable for the
first time during any calendar year to exceed $100,000.
(b) Your right to purchase unvested shares ends upon termination of
your service with the Company and all Related Companies.
5. Whole Shares. You may exercise this option only for whole shares and
the Company shall be under no obligation to issue any fractional shares of
Common Stock to you.
6. Securities Law Compliance. Notwithstanding anything to the contrary
contained in this option, 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 the shares are not registered at that
time, the Company has determined that the exercise and issuance would be exempt
from the registration requirements of the Act.
This option has been granted under the terms of a compensatory benefit plan
established by the Company to provide financial incentives for the Company's
employees (including officers) and certain directors and consultants to work for
the financial success of the Company
2.
<PAGE>
and is intended to comply with the provisions of Rule 701 promulgated by the
Securities and Exchange Commission under the Act.
7. Term of Option. The term of this option begins on the date you were
granted this option and, unless it ends sooner for the reason described below,
terminates on June 16, 2009 (the "Expiration Date") (which date shall be no more
than ten (10) years from the date this option was granted). You may not, under
any circumstances, exercise this option after the "Expiration Date." In
addition, this option may not be exercised if it would cause a violation of the
short- swing trading profits provisions of Section 16(b) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") which are applicable to
certain shareholders of companies with publicly traded stock.
This option will also terminate prior to the end of its term if your
service as an employee or an advisor or consultant with the Company and all
Related Companies is terminated for any reason or for no reason. Your option
will then terminate three (3) months after the date on which you are no longer
providing services to the Company or any Related Company unless one of the
following circumstances exists:
(a) Your termination of service is due to your permanent and total
disability (within the meaning of Section 422(c)(6) of the Code). This option
will then terminate on the earlier of the Expiration Date or twelve (12) months
following the termination of your service.
(b) Your termination of service is .due to your death. This option
will then terminate on the earlier of the Expiration Date or twelve (12) months
after your death.
(c) If during any part of the three (3) month period you may not
exercise your option solely because of the condition described in paragraph 6
above, then your option will not terminate until the earlier of the Expiration
Date or until this option shall become exercisable for a period of three (3)
months after the termination of your service.
(d) If your exercise of the option within three (3) months after
termination of your service with the Company and all Related Companies will
result in liability under Section 16(b) of the Exchange Act, then your option
will terminate on the earlier of (i) the Expiration Date or (ii) the tenth
(10th) day after the last date on which your exercise would result in such
liability.
Only the shares which are vested on the date of your termination of service
may be exercised following the termination of your service.
In order to obtain the federal income tax advantages associated with an
incentive stock option, the Code requires that at all times beginning on the
date of grant of the option and ending on the day three (3) months before the
date of the option's exercise, you must be an employee of the Company or a
Related Company, except in the event of your death or disability. The Company
has provided for continued vesting or extended exercisability for your option
under certain circumstances for your benefit, but cannot guarantee that your
option will necessarily be treated as an incentive stock option if you provide
services to the Company or a Related Company as a consultant or exercise your
option more than three (3) months after the date your employment with the
Company and all Related Companies terminates.
3.
<PAGE>
8. Exercise of Option.
(a) You may exercise this option to the extent specified above, by
delivering the Notice of Exercise attached to this option as an exhibit together
with the exercise price to the Secretary of the Company, or another person
designated by the Company, during regular business hours, together with any
additional documents required in the Notice of Exercise.
(b) By exercising this option you agree that:
(i) as a condition to exercise, the Company may require you
to pay to the Company any tax withholding obligation of the Company arising from
(1) your exercise of this option; (2) the lapse of any substantial risk of
forfeiture to which the shares are subject at the time of exercise; or (3) the
disposition of the shares of Common Stock you acquired upon the exercise of this
option; and
(ii) you will notify the Company in writing within fifteen
(15) days after the date on which you dispose of any of the shares of the Common
Stock issued to you upon your exercise of this option if the disposition of
shares occurs within two (2) years after the date on which you were granted this
option or within one (1) year of the date on which you exercised this options;
and
(iii) in connection with the first underwritten registration of
the offering of any securities of the Company under the Act, the Company (or a
representative of the underwriters) may require that you not sell or otherwise
transfer or dispose of any shares of Common Stock or other securities of the
Company during a period not to exceed one hundred eighty (180) days following
the effective date (the "Effective Date") of the registration statement of the
Company filed under the Act. For purposes of this restriction you will be
considered to own securities which (i) you own directly or indirectly, including
securities held for your benefit by nominees, custodians, brokers or pledgees;
(ii) you may acquire within sixty (60) days of the Effective Date; (iii) are
owned directly or indirectly, by or for your brothers or sisters (whether by
whole or half blood), spouse, ancestors and lineal descendants; or (iv) are
owned, directly or indirectly, by or for a corporation, partnership, estate or
trust of which you are a shareholder, partner or beneficiary, but only to the
extent of your proportionate interest in the corporation, partnership, estate or
trust as a shareholder, partner or beneficiary. You further agree that the
Company may impose stop-transfer instructions on the securities subject to these
restrictions until the end of the period.
9. Option Not Transferable. This option may not be transferred, except
by will or by the laws of descent and distribution, and may be exercised during
your life only by you.
10. Option Not an Employment Contract. This option is not an employment
contract and nothing in this option creates in any way whatsoever any obligation
on your part to continue in the employ of the Company, or of the Company to
continue your employment with the Company. In the event that this option is
granted to you in connection with the performance of services as a consultant or
director, references to employment, employee and similar terms shall be deemed
to include the performance of services as a consultant or a director, as the
case
4.
<PAGE>
may be, provided, however, that no rights as an employee shall arise by
reason of the use of such terms.
11. Notices. Any notices provided for in this option or the Plan will be
given in writing and will be considered to have been given upon receipt or, in
the case of notices delivered by the Company to you, five (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 later designate in writing to
the Company.
12. Governing Plan Document. This option is subject to all the
provisions of the Plan, which is attached as an exhibit to this option. All
provisions of the Plan are hereby made a part of this option. This option is
further subject to all interpretations, amendments, rules and regulations which
may from time to time be set forth and adopted under 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.
Dated the 17/th /day of June, 1999.
Very truly yours,
TULARIK INC.
By /s/ David V. Goeddel
---------------------------------
Duly authorized on behalf
of the Board of Directors
Attachments:
Tularik Inc. Equity Incentive Plan
Regulation 260.141.11
Notice of Exercise
Early Exercise Stock Purchase Form
Question and Answer Summary
5.
<PAGE>
(a) I acknowledge that I have received the foregoing option and the
attachments referenced in it and I understand that all rights and liabilities
with respect to this option are set forth in the option and the Plan; and
(b) I acknowledge that as of the date of grant of this option, this
option and its exhibits set forth the entire understanding between myself and
the Company and any Related Companies regarding the acquisition of stock in the
Company and supersedes all prior oral and written agreements on that subject
with the exception of (i) the options previously granted and delivered to me
under the Plan and (ii) the following agreements only:
None /s/ JPM
--------------------
(Initial)
Other
----------------------------------
----------------------------------
----------------------------------
(c) I acknowledge receipt of a copy of Section 260.141.11 of Title 10 of
the California Code of Regulations.
Optionee /s/ John P. McLaughlin
--------------------------
Address: 523 Occidental Avenue
San Mateo, CA 94402
6.
<PAGE>
It Is Unlawful To Consummate A Sale Or Transfer Of
This Security, Or Any Interest Therein, Or To
Receive Any Consideration Therefor, Without The
Prior Written Consent Of The Commissioner Of
Corporations' Of The State Of California, Except
As Permitted In The Commissioner's Rules.
NONSTATUTORY STOCK OPTION AGREEMENT
John P. McLaughlin, Optionee:
Tularik Inc. (the "Company") has granted you an option to purchase shares
of the common stock of the Company ("Common Stock") under the Equity Incentive
Plan (the "Plan"). This option is not intended to qualify for the federal
income tax benefits available to an "incentive stock option" within the meaning
of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") and
is referred to under the Plan as a Nonstatutory Stock Option.
The details of your option are as follows:
1. Total Number of Shares Subject to this Option. The total number of
shares of Common Stock subject to this option is 66,667.
2. Vesting. The date that vesting begins on this option is June 17, 1999.
1/48th of the shares will vest on July 17, 1999 and 1/48th of the shares will
then vest on the 17th day of each month thereafter for the next 47 months until
either (i) you cease to provide services for the Company for any reason or (ii)
this option becomes fully vested.
This option may be exercised only with respect to those shares which are
vested except as permitted under paragraph 4 of this Agreement.
3. Exercise Price and Method of Payment.
(a) Exercise Price. The exercise price of this option is $3.00 per
share, which is not less than the fair market value of the Common Stock on the
date this option was granted to you.
(b) Method of Payment. Payment of the exercise price per share is
due in full upon exercise of all or any part of this option. You may make
payment of the exercise price under one or a combination of the following
alternatives:
(i) Payment of the exercise price per share in cash or by check
at the time of exercise;
(ii) If at the time of exercise, the Company's Common Stock is
publicly traded and quoted regularly in the Wall Street Journal, payment with
shares of the Company's Common Stock you already own. The Common Stock (i) will
be valued at its fair
1.
<PAGE>
market value on the date of exercise, (ii) if originally acquired from the
Company, it must have been held for the period required to avoid a charge to the
Company's reported earnings, and (iii) it must be owned free and clear of any
liens, claims, encumbrances or security interests;
(iii) This option may also be exercised as part of a program
developed under Regulation T as promulgated by the Federal Reserve Board which
results in the receipt of cash (or a check) by the Company before Common Stock
is issued; or
(iv) Payment by a combination of the methods of payment listed
in subparagraph 3(b)(i) through 3(b)(iii) above.
4. Early Exercise of Option (Exercise of Unvested Shares).
(a) At any time during your service with the Company or a Parent or
Subsidiary (as defined in the Plan) of the Company ("Related Company"), you may
exercise any or all of the shares subject to this option whether or not the
shares have vested, provided, however, that:
(i) a partial exercise of this option will be deemed to cover
vested shares first and then the earliest vesting installment of unvested
shares;
(ii) any unvested shares at the date of exercise will be subject
to the purchase option in favor of the Company which is described in the Early
Exercise Stock Purchase Agreement attached as an exhibit to this option; and
(iii) you will enter into the Early Exercise Stock Purchase
Agreement which will contain the same vesting schedule as in this option
agreement.
(b) Your right to purchase unvested shares ends upon termination of
your service with the Company and all Related Companies.
5. Whole Shares. You may exercise this option only for whole shares and
the Company shall be under no obligation to issue any fractional shares of
Common Stock to you.
6. Securities Law Compliance. Notwithstanding anything to the contrary
contained in this option, 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 the shares are not registered at that
time, the Company has determined that the exercise and issuance would be exempt
from the registration requirements of the Act.
This option has been granted under the terms of a compensatory benefit plan
established by the Company to provide financial incentives for the Company's
employees (including officers) and certain directors and consultants to work for
the financial success of the Company and is intended to comply with the
provisions of Rule 701 promulgated by the Securities and Exchange Commission
under the Act.
7. Term of Option. The term of this option begins on the date you were
granted this option and, unless it ends sooner for the reason described below,
terminates on June 16,
2.
<PAGE>
2009 (the "Expiration Date") (which date shall be no more than ten (10) years
from the date this option was granted). You may not, under any circumstances,
exercise this option after the Expiration Date. In addition, this option may not
be exercised if it would cause a violation of the short-swing trading profits
provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") which are applicable to certain shareholders of companies
with publicly traded stock.
This option will also terminate prior to the end of its term if your
service as an employee or an advisor or consultant with the Company and all
Related Companies ends for any reason or for no reason. Your option will then
terminate three (3) months after the date on which you are no longer providing
services to the Company or any Related Company unless one of the following
circumstances exists:
(a) Your termination of service is due to your permanent and total
disability (within the meaning of Section 422(c)(6) of the Code). This option
will then terminate on the earlier of the Expiration Date or twelve (12) months
following the date of your disability.
(b) Your termination of service is due to your death. This option
will then terminate on the earlier of the Expiration Date or twelve (12) months
after your death.
(c) If during any part of the three (3) month period you may not
exercise your option solely because of the conditions described in paragraph 6
above, then your option will not terminate until the earlier of the Expirations
Date or until this option shall become exercisable for a period of three (3)
months after the termination of your service.
(d) If your exercise of the option within three (3) months after
termination of your service with the Company and all Related Companies will
result in liability under Section 16(b) of the Exchange Act, then your option
will terminate on the earlier of (i) the Expiration Date or (ii) the tenth
(10th) day after the last date on which your exercise would result in such
liability.
Only the shares which are vested on the date of your termination of service
may be exercised following the termination of your service.
8. Exercise of Option.
(a) You may exercise this option to the extent specified above, by
delivering the Notice of Exercise attached to this option as an exhibit together
with the exercise price to the Secretary of the Company, or another person
designated by the Company, during regular business hours, together with any
additional documents required in the Notice of Exercise.
(b) By exercising this option you agree that:
(i) as a condition to exercise, the Company may require you to
pay to the Company any tax withholding obligation of the Company arising from
(1) your exercise of this option; (2) the lapse of any substantial risk of
forfeiture to which the shares are subject at the time of exercise; or (3) the
disposition of the shares of Common Stock you acquired upon the exercise of this
option; and
3.
<PAGE>
(ii) in connection with the first underwritten registration of the
offering of any securities of the Company under the Act, the Company (or a
representative of the underwriters) may require that you not sell or otherwise
transfer or dispose of any shares of Common Stock or other securities of the
Company during a period not to exceed one hundred eighty (180) days following
the effective date (the "Effective Date") of the registration statement of the
Company fried under the Act. For purposes of this restriction you will be
considered to own securities which (i) you own directly or indirectly, including
securities held for your benefit by nominees, custodians, brokers or pledgees;
(ii) you may acquire within sixty (60) days of the Effective Date; (iii) are
owned directly or indirectly, by or for your brothers or sisters (whether by
whole or half blood), spouse, ancestors and lineal descendants; or (iv) are
owned, directly or indirectly, by or for a corporation, partnership, estate or
trust of which you are a shareholder, partner or beneficiary, but only to the
extent of your proportionate interest in the corporation, partnership, estate or
trust as a shareholder, partner or beneficiary. You further agree that the
Company may impose stop-transfer instructions on the securities subject to these
restrictions until the end of the period.
9. Option Not Transferable. This option may not be transferred, except
by will or by the laws of descent and distribution, and may be exercised during
your life only by you.
10. Option Not an Employment Contract. This option is not an employment
contract and nothing in this option creates in any way whatsoever any obligation
on your part to continue in the employ of the Company, or of the Company to
continue your employment with the Company. In the event that this option is
granted to you in connection with the performance of services as a consultant or
director, references to employment, employee and similar terms shall be deemed
to include the performance of services as a consultant or a director, as the
case may be, provided, however, that no rights as an employee shall arise by
reason of the use of such terms.
11. Notices. Any notices provided for in this option or the Plan will
be given in writing and will be considered to have been given upon receipt or,
in the case of notices delivered by the Company to you, five (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 later designate in
writing to the Company.
12. Governing Plan Document. This option is subject to all the
provisions of the Plan, which is attached as an exhibit to this option. All
provisions of the Plan are hereby made a part of this option. This option is
further subject to all interpretations, amendments, rules and regulations which
may from time to time be set forth and adopted under 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.
4.
<PAGE>
Dated the 17/th /day of June, 1999.
Very truly yours,
TULARIK INC.
By /s/ David V. Goeddel
--------------------------------
Duly authorized on behalf
of the Board of Directors
Attachments:
Tularik Inc. Equity Incentive Plan
Regulation 260.141.11
Notice of Exercise
Early Exercise Stock Purchase Form
Question and Answer Summary
5.
<PAGE>
(a) I acknowledge that I have received the foregoing option and the
attachments referenced in it and I understand that all rights and liabilities
with respect to this option are set forth in the option and the Plan; and
(b) I acknowledge that as of the date of grant of this option, this
option and its exhibits set forth the entire understanding between myself and
the Company and any Related Companies regarding the acquisition of stock in the
Company and supersedes all prior oral and written agreements on that subject
with the exception of (i) the options previously granted and delivered to me
under the Plan and (ii) the following agreements only:
None /s/ JPM
--------------------
(Initial)
Other
----------------------------
----------------------------
----------------------------
(c) I acknowledge receipt of a copy of Section 260.141.11 of
Title 10 of the California Code of Regulations.
/s/ John P. McLaughlin
--------------------------------
Optionee
Address: 523 Occidental Avenue
San Mateo, CA 94402
6.
