As filed with the Securities and Exchange Commission on November 13, 1998
Registration No. 333-_______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
HUMAN GENOME SCIENCES, INC.
(Exact name of registrant as specified in its charter)
Delaware 22-3178468
(State or other jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or organization)
9410 Key West Avenue
Rockville, Maryland 20850-3338
(Address of principal executive offices) (Zip Code)
1994 STOCK OPTION PLAN OF HUMAN GENOME SCIENCES, INC.
(Full title of plan)
(Name, address and telephone
number of agent for service) (Copy to:)
William A. Haseltine, Ph.D. R.W. Smith, Jr., Esquire
Human Genome Sciences, Inc. Piper & Marbury L.L.P.
9410 Key West Avenue 36 South Charles Street
Rockville, Maryland 20850-3338 Baltimore, Maryland 21201
(301) 309-8504 (410) 539-2530
CALCULATION OF REGISTRATION FEE
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<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
Proposed Proposed
Amount Maximum Maximum Amount of
to be Offering Aggregate Registration
Title of Securities to be Registered Registered Price Per Unit(2) Offering Price(2) Fee
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
Common Stock, $.01 par value 2,500,000(1) $34.125 $85,312,500 $23,716.88
- -------------------------------------------------------------------------------------------------------------------
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(1) Pursuant to Rule 416 under the Securities Act of 1933, as amended,
this Registration Statement also covers an indeterminate number of shares
of Common Stock that may be offered or issued by reason of stock splits,
stock dividends or similar transactions.
(2) Estimated solely for purposes of calculating the registration fee
pursuant to Rule 457(c) and (h). The proposed maximum offering price per
share, proposed maximum aggregate offering price and the amount of the
registration fee are based on the average of the high and low prices of
Human Genome Sciences, Inc. Common Stock reported on the Nasdaq
National Market on November 6, 1998 ($34.125).
<PAGE>
INCORPORATION BY REFERENCE
Pursuant to General Instruction E to Form S-8, the contents of
the Registration Statements filed on Forms S-8 by Human Genome Sciences,
Inc. (the "Registrant") on May 8, 1994 (file number 33-79020) and
April 25, 1997 (file number 333-25893), with respect to securities offered
pursuant to the 1994 Stock Option Plan of Human Genome Sciences, Inc. are
incorporated by reference herein.
In addition, the following documents filed by the Registrant with
the Securities and Exchange Commission (the "Commission") pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act") are
incorporated herein by reference:
(a) The Registrant's Annual Report on Form 10-K for the year
ended December 31, 1997, and Quarterly Reports on Forms
10-Q for the quarters ended March 31, 1998, and
June 30, 1998;
(b) All other reports filed pursuant to Sections 13(a) or
15(d) of the Exchange Act since December 31, 1997; and
(c) The description of Common Stock of the Registrant contained
or incorporated in the registration statements filed
by the Registrant under the Exchange Act, including any
amendments or reports filed for the purpose of updating
such description.
All documents subsequently filed by the Registrant with the
Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act, prior to the filing of a post-effective amendment which indicates
that all securities offered have been sold or which deregisters all
securities remaining unsold, shall be deemed to be incorporated by reference
into this Registration Statement and to be a part of this Registration
Statement from the date of filing of such documents.
Item 8. Exhibits.
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
4.1 Restated Certificate of Incorporation (Fifth) of
the Registrant (filed as Exhibit 3.1 of the
Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1993, and
incorporated herein by reference)
4.2 Certificate of Amendment of the Certificate of
Incorporation (filed as Exhibit 3.3 to the
Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1997, and
incorporated herein by reference)
4.3 By-Laws of the Registrant (filed as Exhibit 3.2
to the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1993, and
incorporated herein by reference)
4.4 Rights Agreement between the Registrant and
American Stock Transfer & Trust Company, as Rights
Agent, dated as of May 20, 1998 (filed as Exhibit
4 of the Registrant's Current Report on Form 8-K
filed on May 28, 1998, and incorporated herein
by reference)
<PAGE>
4.5 1994 Stock Option Plan of Human Genome Sciences,
Inc. (as amended)
5.0 Opinion of Piper & Marbury L.L.P., counsel for the
Registrant, regarding the legal validity of the
additional shares of Common Stock being registered
under this Registration Statement for issuance
under the Plan
23.1 Consent of Piper & Marbury L.L.P., counsel for
the Registrant (contained in Exhibit 5.0)
23.2 Consent of Ernst & Young LLP, Independent Auditors
24.0 Power of Attorney (included on Signature Page)
<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 Rockville, State of Maryland, on the
6th day of November, 1998.
HUMAN GENOME SCIENCES, INC.
By: /s/ William A. Haseltine
------------------------------------
William A. Haseltine, Ph.D.
Chairman and Chief Executive Officer
POWERS OF ATTORNEY
Each person whose signature appears below constitutes and appoints
William A. Haseltine, Ph.D. as his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for such person and in his
name, place and stead, in any and all capacities, to sign any or all further
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 attorney-in-fact and agent, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, or his substitute
or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Form
S-8 Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
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Signature Title Date
- --------- ----- ----
/s/ William A. Haseltine Chairman of the Board of Directors and Chief November 4, 1998
- ---------------------------- Executive Officer
William A. Haseltine, Ph.D. (principal executive officer)
/s/ Steven C. Mayer Senior Vice President and November 4, 1998
- ---------------------------- Chief Financial Officer
Steven C. Mayer (principal financial and accounting officer)
/s/ Craig A. Rosen Senior Vice President - Research and November 4, 1998
- ---------------------------- Development and Director
Craig A. Rosen, Ph.D.
/s/ Melvin D. Booth Director November 4, 1998
- ----------------------------
Melvin D. Booth
/s/ Robert A. Armitage Director November 4, 1998
- ----------------------------
Robert A. Armitage
<PAGE>
/s/ James H. Cavanaugh Director November 4, 1998
- ----------------------------
James H. Cavanaugh, Ph.D.
/s/ Beverly Sills Greenough Director November 4, 1998
- ----------------------------
Beverly Sills Greenough
/s/ Max Link Director November 4, 1998
- ----------------------------
Max Link, Ph.D.
/s/ Alan G. Spoon Director November 4, 1998
- ----------------------------
Alan G. Spoon
/s/ Robert D. Hormats Director November 4, 1998
- ----------------------------
Robert D. Hormats
/s/ James B. Wyngaarden Director November 4, 1998
- ----------------------------
James B. Wyngaarden, M.D.
/s/ Jurgen Drews Director November 4, 1998
- ----------------------------
Jurgen Drews, M.D.
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<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION PAGE
4.1 Restated Certificate of Incorporation (Fifth) of the N/A
Registrant (filed as Exhibit 3.1 of the Registrant's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1993, and incorporated herein by reference)
4.2 Certificate of Amendment of the Certificate of Incorporation N/A
(filed as Exhibit 3.3 to the Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1997, and
incorporated herein by reference)
4.3 By-Laws of the Registrant (filed as Exhibit 3.2 to the N/A
Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1993, and incorporated herein by
reference)
4.4 Rights Agreement between the Registrant and American Stock N/A
Transfer & Trust Company, as Rights Agent, dated as of
May 20, 1998 (filed as Exhibit 4 of the Registrant's
Current Report on Form 8-K filed on May 28, 1998, and
incorporated herein by reference)
4.5 1994 Stock Option Plan of Human Genome Sciences, Inc. 7
(as amended)
5.0 Opinion of Piper & Marbury L.L.P., counsel for the 17
Registrant, regarding the legal validity of the additional
shares of Common Stock being registered under this
Registration Statement for issuance under the Plan
23.1 Consent of Piper & Marbury L.L.P., counsel for the 17
Registrant (contained in Exhibit 5.0)
23.2 Consent of Ernst & Young LLP, Independent Auditors 18
24.0 Power of Attorney (included on Signature Page) 4
EXHIBIT 4.4
1994 STOCK OPTION PLAN OF
HUMAN GENOME SCIENCES, INC.
(AS AMENDED)
I. GENERAL PROVISIONS
1.1 PURPOSES OF THE PLAN
Under this 1994 Stock Option Plan of Human Genome Sciences, Inc. (the "Plan"),
Human Genome Sciences, Inc. (the "Company") will grant options to eligible
employees, consultants, and other service providers to purchase shares of the
capital stock of the Company. The Plan is designed to enable the Company to
attract, retain, and motivate its employees and service providers by providing
for or increasing their proprietary interests in the Company. The options
issued pursuant to the Plan are intended to constitute either Incentive Stock
Options or Nonqualified Stock Options as determined by the Committee and
specified in the recipient's option agreement.
1.2 DEFINITIONS
(a) "Board" means the Board of Directors of Human Genome Sciences, Inc.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Committee" means the Executive Compensation Committee of the Board,
or such other committee as may be appointed by the Board for purposes of
administering all or a portion of this Plan.
(d) "Common Stock" means the common stock, par value $0.01 per share,
of Human Genome Sciences, Inc.
(e) "Company" means Human Genome Sciences, Inc., a Delaware corporation.
(f) "Date of Exercise" means the date the Optionee delivers to the
Secretary of the Company or his office the notice specified in Section
2.6(a)(i).
(g) "Date of Grant" means the date as of which the Committee awards an
Option to an Optionee, as specified in the minutes of the Committee.
(h) "Employee" means any regular full-time common law employee,
including any who are also officers or directors, of the Company or any
successor to such corporation or other business. Solely for purposes of
determining eligibility of persons to be recipients of Nonqualified Stock
Option grants, the term "Employee" shall also include independent contractors
and outside directors of and consultants to the Company.
(i) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
<PAGE>
(j) "Exercise Price" means the value of the consideration required
under an Option Agreement to be provided in exchange for one share of Common
Stock.
(k) "Fair Market Value" of a share of Common Stock as of a given date
means (1) the closing price of a share of Common Stock on the principal
exchange on which Common Stock is then trading, if any, on the trading day
before such date, or, if no shares were traded on the trading day before
such date, then on the next preceding trading day during which a sale
occurred; or (2) if such stock is not traded on an exchange but is quoted
on NASDAQ or a successor quotation system, (A) the last sales price (if the
stock is then listed as a National Market Issue under the NASD National
Market System) or (B) the mean between the closing representative bid and
asked prices (in all other cases) for the stock on the trading day before
such date as reported by NASDAQ or such successor quotation system; or
(C) if such stock is not publicly traded on an exchange and not
quoted on NASDAQ or a successor quotation system, the mean between the
closing bid and asked prices for the stock on the trading day before such
date, as determined in good faith by the Committee; or (4) if Common Stock is
not publicly traded, the fair market value established by the Committee
acting in good faith.
(l) "Incentive Stock Option" means an Option that is an "incentive
stock option" within the meaning of Section 422 of the Code.
(m) "Nonqualified Stock Option" means an Option that does not qualify
as an incentive stock option under Section 422 of the Code.
(n) "Option" means a right to purchase Common Stock granted under
the Plan.
(o) "Option Agreement" means a written agreement executed by the
Optionee and the Company that contains the terms and conditions provided
in Article II and such additional terms and conditions, consistent with the
Plan, as the Committee may decide.
(p) "Optionee" means any Employee selected to receive Options pursuant
to Section 2.1 or, where the context requires, a person described in
Section 2.4.
(q) "Plan" means the Company's 1994 Stock Option Plan as set forth
herein, as amended from time to time.
(r) "Rule 16b-3" means Rule 16b-3 promulgated under Section 16 of the
Exchange Act.
(s) "Termination of Employment" shall mean the time when the
employer-employee or other service-providing relationship between the
Optionee and the Company terminates for any reason, including death,
disability, or retirement. Notwithstanding the foregoing and unless
otherwise provided in the Option Agreement, "Termination of Employment"
for purposes of Nonqualified Stock Options shall not include instances in
which the Company immediately rehires a common law employee as an independent
contractor or an independent contractor as an employee. The Committee, in
its sole discretion, shall determine all questions of whether particular
terminations or leaves of absence are Terminations of Employment.
<PAGE>
1.3 SHARES OF COMMON STOCK SUBJECT TO THE PLAN
(a) Subject to the provisions of Sections 1.3(c) and 3.1 (pertaining to
corporate changes), the aggregate number of shares of Common Stock that may
be issued pursuant to Options may not exceed 5,950,000 shares.
(b) At the discretion of the Board or the Committee, the Common Stock
to be issued pursuant to Options under the Plan will be made available either
from authorized but unissued shares of Common Stock or from previously issued
shares of Common Stock reacquired by the Company, including shares purchased
on the open market.
(c) If any Option expires, is canceled, or terminates for any reason,
the shares of Common Stock available under such Option shall again be
available for the granting of Options to the extent consistent with
Rule 16b-3.
1.4 ADMINISTRATION OF THE PLAN
(a) The Committee, which will administer the Plan, will consist of two
or more members of the Board who are appointed by the Board, who are
"non-employee directors" within the meaning of Rule 16b-3, and who are
"outside directors" for purposes of Section 162(m) of the Code.
(b) Subject to the express provisions of the Plan, the Committee has
and may exercise such powers and authority of the Board as may be necessary or
appropriate for the Committee to carry out its functions as described in the
Plan.
(c) The Committee has the authority to interpret the Plan, to make
all other determinations necessary or advisable for the administration of
the Plan, and to prescribe, amend, and rescind reasonable rules and
regulations relating to the Plan. All Committee interpretations,
determinations, and actions will be final, conclusive, and binding upon all
parties. The Committee shall take all actions in connection with the
administration of the Plan pursuant to a majority vote or
by the unanimous written consent of its members.
(d) No member of the Board, the Committee, or the agents thereof will
be liable for any action, inaction, or determination made in good faith
with respect to the Plan or any transaction arising under the Plan.
II. OPTION TERMS AND CONDITIONS
2.1 AUTHORITY TO GRANT OPTIONS
(a) The Committee shall, in its sole discretion, select the Employees
who receive Options and determine the terms of such Options, including the
number of shares of Common Stock subject to an Option, the schedule for
exercisability (including any requirements for satisfying performance
criteria with respect to the Company and/or the Optionee), the time and
conditions for expiration of the Option, and the form of payment due upon
exercise. (In determining the type of payment that may be used, the Committee
<PAGE>
shall consider whether the acceptance of that form of payment will likely
benefit the Company.) The Committee may grant more than one Option to an
Employee, provided the Employee is eligible under the terms of the Plan at
the time of each succeeding grant. In its discretion, the Committee may
condition the granting of Options upon the Employee's cancellation
of all or part of a previously granted Option. The Committee may set the
Exercise Price of the Options without regard to any existing Options.
(b) No more than 500,000 shares of Common Stock may be subject to
Options granted to a single Employee under this Plan within a one calendar
year period. If a portion of an Option is repriced, the number of shares
subject to that portion shall be counted against the foregoing individual
limit. Canceled options shall be counted against the limit for the period
during which they were granted.
(c) No Options shall be granted more than ten (10) years after the
date on which the Board adopts this Plan.
(d) Directors of the Company who are not employees of the Company
("Eligible Directors") will receive an option ("Director Option") to purchase
10,000 shares of Common Stock on the date that such person is first elected
or appointed a director ("Initial Director Option"). Commencing on the day
immediately following the date of the annual meeting of stockholders for the
Company's fiscal year ending December 31, 1996, each Eligible Director will
receive an automatic grant ("Automatic Grant") of a Director Option to
purchase 2,000 shares of Common Stock on the day immediately following the
date of each annual meeting of stockholders, as long as such director is a
member of the Board of Directors. The exercise price for each shares subject
to a Director Option shall be equal to the fair market value of the Common
Stock on the date of grant. Initial Director Options shall become
exercisable in five equal annual installments commencing one year from the
date the option is granted and Automatic Grants will become exercisable in
full on the first anniversary of the date of grant or 90 days after the
termination of the director's association with the Company.
2.2 OPTION AGREEMENT
The terms of each Option shall be contained in an Option Agreement, signed by
the Optionee, that includes such terms and conditions consistent with the Plan
and Rule 16b-3 as the Committee may in its discretion determine necessary or
advisable.
2.3 EXERCISE PRICE
The Committee shall determine the Exercise Price under each Option, but the
Exercise Price may not be less than 100 percent (100%) of the Fair Market
Value on the Date of Grant. If an Option intended to be an Incentive Stock
Option is granted to any Employee who, at the Date of Grant, owns Common
Stock possessing more than 10 percent (10%) of the total combined voting
power of all classes of the Company's stock (or the stock of any "subsidiary"
or "parent" of the Company as those terms are defined in Section 424 of the
Code), the Exercise Price shall be no less than 110 percent (110%) of the
Fair Market Value on the Date of Grant.
<PAGE>
2.4 PERSON WHO MAY EXERCISE OPTIONS
During the lifetime of the Optionee, only the Optionee or his duly appointed
guardian or personal representative may exercise the Options. After his death,
any exercisable portion of an Option may, before such portion becomes
unexercisable under the Plan or the applicable Option Agreement, be exercised
by the personal representative of the Optionee or by any person empowered to
do so under the deceased Optionee's will or under the then applicable laws
of descent and distribution.
2.5 EXERCISABILITY
(a) Options granted pursuant to this Plan shall be exercisable at such
times and under such conditions as shall be determined by the Committee;
provided, however, that no portion of an Option shall be exercisable after
the expiration of ten (10) years from its Date of Grant and that no portion
of an Incentive Stock Option granted to any Employee who, at the Date of
Grant, owns stock possessing more than 10 percent(10%) of the total combined
voting power for all classes of the Company's stock (or the stock of any
"subsidiary" or "parent" of the Company as those terms are defined in Section
424 of the Code) shall be exercisable after the expiration of five (5)
years from the Date of Grant.
(b) Subject to the provision of Section 3.7 (relating to shareholder
approval), Options shall become exercisable at such times and in such manner
as the Option Agreement may provide; provided, however, that by a resolution
adopted after an Option Agreement is entered into, the Committee may, on such
terms and conditions as it determines appropriate, and subject to Section 3.7,
accelerate the time at which the Optionee may exercise any portion of an
Option.
(c) No portion of an Option that is unexercisable by reason of
termination of employment shall thereafter become exercisable, unless the
Option Agreement provides otherwise.
(d) The Company will not issue fractional shares pursuant to the
exercise of an Option, but the Committee may, in its discretion, direct the
Company to make a cash payment instead of issuing fractional shares.
2.6 EXERCISE OF OPTIONS
(a) An Optionee shall exercise any portion of an Option by delivering
the notice described in Paragraph (1) below to the Secretary of the Company
or his office on or before the date such portion of the Option becomes
unexercisable under the applicable Option Agreement or the Plan and
making payment as provided in Paragraph (2) within three (3) business days
after such delivery:
(1) A written notice of exercise, in a form complying with any rules the
Committee may issue, that is signed by the Optionee and that specifies the
number of shares of Common Stock underlying the portion of the Option being
exercised; and
<PAGE>
(2) Full payment by cashier's or certified check of the Exercise Price
for the shares of Common Stock with respect to which the Option is being
exercised.
(b) The Optionee shall also deliver to the Committee such
representations and documents as the Committee, in its sole discretion,
may consider necessary or advisable in order to comply with applicable
provisions of the Securities Act of 1933 and any other Federal or state
securities or other laws or regulations. The Committee may, in its sole
discretion, take whatever additional actions it deems appropriate to so
comply including, without limitation, placing legends on certificates and
issuing stop-transfer orders to transfer agents and registrars.
(c) If someone other than the Employee exercises any portion of an
Option pursuant to Section 2.4, the Committee may request such proof as it
may consider necessary or appropriate of the right of such person to
exercise the Option.
(d) No adjustment will be made for a dividend or other right for
which the record date precedes the Date of Exercise, except as provided
in Section 3.1(a).
2.7 TAX WITHHOLDING
The Optionee must deliver to the Company the payment by cashier's or
certified check to the Company of all amounts that the Company must withhold
under Federal, state, or local law in connection with the exercise of the
Option if the Company cannot, or decides not to, satisfy withholding
obligations through additional withholding on salary or wages. Payment of
withholding obligations is due at the same time as is payment of the
Exercise Price.
2.8 EXPIRATION OF OPTIONS
(a) No one may exercise an Option after the expiration of ten (10)
years from the Date of Grant or, if earlier and unless otherwise provided
in an Option Agreement for a Nonqualified Stock Option, the first to occur
of the following events: (1) Except in the case of any Optionee who is
disabled (within the meaning of Section 22(e)(3) of the Code), the expiration
of three months from the date of the Optionee's Termination of Employment for
any reason other than the Optionee's death unless the Optionee dies within
that three-month period; (2) In the case of an Optionee who is disabled
(within the meaning of Section 22(e)(3) of the Code), the expiration of
one year from the date of the Optionee's Termination of Employment for any
reason other than such Optionee's death unless the Optionee dies
within that one-year period; or (3) The expiration of one year from the
date of the Optionee's death.
(b) Subject to the provisions of Section 2.8(a), the Committee may
provide in the terms of an Option Agreement that any portion of the Option,
whether then exercisable or not, expires immediately upon a Termination of
Employment or that any portion of the Option shall become exercisable in the
event of a Termination of Employment because of the Optionee's retirement,
death, or disability.
<PAGE>
2.9 TRANSFER RESTRICTIONS
Unless otherwise approved in writing by the Committee, no one may sell,
assign, pledge, encumber, or otherwise transfer shares acquired upon exercise
of any Option until at least six months have elapsed from (but excluding)
the Date of Grant. (Solely for purposes of this Section, the Date of Grant
occurs upon the later of the Date of Grant (as defined in Section 1.2(g)) or
the date as of which the shareholders of the Company approve the Plan pursuant
to Section 3.7.) The Committee, in its absolute discretion, may impose such
other restrictions on the transferability of the shares purchasable upon the
exercise of an Option as it deems appropriate. The Option Agreement shall set
forth any such other restriction, and the certificates evidencing such
shares may refer to such restrictions.
2.10 $100,000 LIMIT FOR INCENTIVE STOCK OPTIONS
No portion of an Option granted to an Optionee shall be treated as an
Incentive Stock Option to the extent such portion of an Option would cause
the aggregate Fair Market Value of all shares with respect to which Incentive
Stock Options are exercisable by such Optionee for the first time during any
calendar year to exceed $100,000. For purposes of determining whether an
Incentive Stock Option would cause such aggregate Fair Market Value to
exceed the $100,000 limitation, all such Incentive Stock Options shall be
taken into account in the order granted and the Fair Market Value for each
share under an option shall be determined as of that option's date of
grant. For purposes of this section, Incentive Stock Options include all
incentive stock options under all plans of the Company that are "incentive
stock option plans" within the meaning of Section 422 of the Code.
2.11 NO EXERCISE OF OUT-OF-THE-MONEY OPTIONS
An Optionee may not exercise any portion of an Option while that portion of
the Option is out-of-the-money, i.e., while the exercise price for a share
of Common Stock underlying that portion of the Option exceeds the Fair Market
Value of a share of Common Stock.
III. OTHER PROVISIONS
3.1 ADJUSTMENT PROVISIONS
(a) Subject to any required action by the Company (which shall be
promptly taken) or its shareholders, and subject to the provisions of the
Delaware General Corporation Law, if the outstanding Common Stock are
increased or decreased or changed into or exchanged for a different number
or kind of security by reason of any recapitalization, reclassification,
stock split, reverse stock split, combination of shares, exchange of shares,
stock dividend, or other distribution payable in capital stock, or other
increase or decrease in such Common Stock is effected without receipt of
consideration by the Company occurring after the Date of Grant of an Option,
a proportionate and appropriate adjustment shall be made in the number of
shares of Common Stock underlying the Option, so that the proportionate
interest of the Optionee immediately following such event shall, to the
extent practicable, be the same as immediately before such event. A
commensurate change will be made in the maximum number and kind of shares
provided in Section 1.3(a) and 2.1(b). Any such adjustment in an Option
shall not change the total price with respect to shares of Common Stock
underlying the unexercised portion of the Option but shall include a
corresponding proportionate adjustment in the Option's Exercise Price.
<PAGE>
(b) In addition to the adjustments covered under Section 3.1(a) above,
any Option grant may contain provisions to the effect that upon the
occurrence of certain events, including a change in control of the Company
(as defined by the Committee in the Optionee's Option Agreement), any
outstanding Options not theretofore exercisable or free from restrictions,
as the case may be, shall either immediately, or upon a further
determination made by the Committee at the time of the event, become fully
exercisable or free from restrictions.
(c) The Committee will make adjustments and determinations under
Sections 3.1(a) and 3.1(b), and its determination will be final, binding,
and conclusive.
(d) Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger, or consolidation of the Company as a result of which
the outstanding securities of the class of securities then subject to the
Options are changed into or exchanged for cash or property or securities not
of the Company's issue, or any combination thereof, or upon a sale of
substantially all the property of the Company to, or the acquisition of
shares of Common Stock representing more than eighty percent (80%) of the
voting power of the shares of Common Stock then outstanding by, another
corporation or person, the Options shall terminate, unless provision be
made in writing in connection with such transaction for the assumption of
Options theretofore granted under the Plan, or the substitution for such
options of any options covering the stock or securities of a successor
employer corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares of stock and prices, in
which event the Options shall continue in the manner and under the terms
so provided. If an Option would otherwise terminate pursuant to the
foregoing sentence, the Optionee shall have the right, at such time before
the consummation of the transaction causing such termination as the Company
shall reasonably designate, to exercise the unexercised portions of the Option,
including the portions thereof that would, but for this subsection, not yet be
exercisable.
3.2 CONTINUATION OF EMPLOYMENT OR SERVICE
Nothing in the Plan or in any instrument executed pursuant to the Plan will
confer upon any Optionee any right to continue in the employ or service of
the Company or affect the right of the Company to terminate the employment or
service of any Optionee at any time with or without cause, subject to any
contrary terms in a written employment agreement or contract for services
with the Optionee.
<PAGE>
3.3 COMPLIANCE WITH GOVERNMENT REGULATIONS
No shares of Common Stock will be issued pursuant to an Option until all
applicable requirements imposed by Federal and state securities and other
laws, rules, and regulations, and by any regulatory agencies having
jurisdiction, and by any stock exchanges upon which the Common Stock may be
listed have been fully met. As a condition precedent to the issuance of
shares of Common Stock pursuant to an Option, the Company may require the
Optionee to take any reasonable action to comply with such requirements.
3.4 PRIVILEGES OF STOCK OWNERSHIP
No Optionee and no beneficiary or other person claiming under or through such
Optionee will have any right, title, or interest in or to any shares of
Common Stock allocated or reserved under the Plan or subject to any Option
except as to such shares of Common Stock, if any, that have been issued to
such Optionee.
3.5 NONTRANSFERABILITY OF OPTIONS AND COMMON STOCK
Unless otherwise approved in writing by the Committee, an Option may not be
assigned, transferred, pledged, hypothecated, or disposed of in any way,
whether by operation of law or otherwise or through any legal or equitable
proceedings (including bankruptcy), to any person by the Optionee, except by
will or by operation of applicable laws of descent and distribution. Unless
otherwise approved in advance in writing by the Committee, the Optionee may
not sell, assign, pledge, encumber, or otherwise transfer shares of Common
Stock acquired upon exercise of an Option until at least six (6) months have
elapsed from (but excluding) the Date of Grant. The Committee, in its sole
discretion, may impose such other restrictions on the transferability of
Options, as it deems appropriate. The Option Agreement shall set forth any
such other restrictions, and the certificates evidencing such shares of
Common Stock may refer to such restrictions.
3.6 AMENDMENT AND TERMINATION OF PLAN; AMENDMENT OF OPTION
(a) The Board will have the power, in its sole discretion, to amend,
suspend, or terminate the Plan at any time; provided, however, that the Board
may not amend the Plan without approval of the shareholders of the Company if
Rule 16b-3 requires such approval. The Board is specifically authorized to
adopt any amendment to this Plan deemed by the Board to be necessary or
advisable to ensure that the Incentive Stock Options or Nonqualified Stock
Options available under the Plan continue to be treated as such,
respectively, under all applicable laws.
(b) Except as otherwise provided by the applicable Option Agreement
or by Section 1.4, 3.1, or 3.8, the Committee may not, without the consent
of an Optionee, make modifications in the terms and conditions of an Option
that adversely affect the Optionee. No Incentive Stock Option may be
modified, extended, or renewed, without the consent of an Optionee, if such
action would cause it to cease to be an incentive stock option within the
meaning of Section 422 of the Code.
(c) No amendment, suspension, or termination of the Plan will, without
the consent of the Optionee, alter, terminate, impair, or adversely affect
any right or obligations under any Option previously granted under the Plan.
<PAGE>
3.7 APPROVAL OF PLAN BY STOCKHOLDERS
The Company will submit this Plan for the approval of the Company's
shareholders. The Committee may grant Options before such shareholder
approval, but the Optionee cannot exercise Options before the shareholders
approve the Plan. Moreover, if the shareholders do not approve the Plan
within 12 months after the Board's initial adoption of the Plan, all Options
previously granted under the Plan shall thereupon be canceled and become
void. The Company shall take such actions regarding the Plan as may be
necessary to satisfy the requirements of Rule 16b-3(b).
3.8 CONFORMITY TO SECURITIES LAW
The Plan is intended to conform to the extent necessary with all provisions
of the Securities Act of 1933 and the Exchange Act and all regulations and
rules promulgated by the Securities and Exchange Commission thereunder,
including without limitation Rule 16b-3. Notwithstanding anything herein to
the contrary, the Committee shall administer the Plan, and Options shall be
granted and may be exercised, only in such a manner as to conform to such
laws, rules, and regulations. To the extent permitted by applicable law,
the Plan and Options granted hereunder shall be deemed amended to the extent
necessary to conform to such laws, rules, and regulations. To the extent any
provision of the Plan or action by the Committee fails to comply with Rule
16b-3 (as in effect with respect to the Plan on the date such action is
taken), the provision or action shall be deemed null and void, to the
extent permitted by law and deemed advisable by the Committee.
3.9 APPLICABLE LAW
This Plan shall be governed by and construed in accordance with the laws of
the State of Delaware.
IV. DURATION OF PLAN
Unless sooner terminated by the Board, the Plan will terminate on March 14,
2004.
EXHIBIT 5.0
PIPER & MARBURY
L.L.P.
CHARLES CENTER SOUTH
36 SOUTH CHARLES STREET WASHINGTON
BALTIMORE, MARYLAND 21201-3018 NEW YORK
410-539-2530 PHILADELPHIA
FAX: 410-539-0489 EASTON
November 13, 1998
Human Genome Sciences, Inc.
9410 Key West Avenue
Rockville, Maryland 20850-3338
Ladies and Gentlemen:
We have acted as counsel to Human Genome Sciences, Inc., a Delaware
corporation (the "Company") in connection with the preparation and filing
with the Securities and Exchange Commission of a registration statement on
Form S-8 (the "Registration Statement") registering 2,500,000 shares of
Common Stock, par value $.01 per share (the "Plan Shares"), issuable
pursuant to the exercise of stock options granted under the 1994 Stock
Option Plan of Human Genome Sciences, Inc. (the "Plan").
In this capacity, we have examined copies of the Company's Restated
Certificate of Incorporation (as amended), By-Laws (as amended), the Plan,
the proceedings of the Company's Board of Directors relating to the
reservation and issuance of the Plan Shares to be issued pursuant to the
Plan, a certificate of an officer of the Company (the "Certificate") and
such other statutes, certificates, instruments and documents relating to
the Company and matters of law as we have deemed necessary to the issuance
of this opinion. In our examination, we have assumed, without independent
investigation, the genuineness of all signatures, the legal capacity of
all individuals who have executed any of the aforesaid documents, the
authenticity of all documents submitted to us as originals, and the
conformity with originals of all documents submitted to us as
copies (and the authenticity of the originals of such copies), and that
all public records reviewed are accurate and complete. As to various
questions of fact material to this opinion, we have relied on the
Certificate and have not independently verified the matters stated
therein. We assume that the Company will have at the time of issuance of
any Plan Shares under the Plan at least that number of authorized but
unissued Plan Shares of Common Stock of the Company equal to the number of
shares to be issued pursuant to the Plan.
Based upon the foregoing, we are of the opinion that the issuance of
the Plan Shares has been duly authorized and, when issued delivered and
paid for in accordance with the terms and conditions of the Plan, the Plan
Shares will be validly issued, fully paid and non-assessable.
The opinion expressed herein is for the use of the Company in connection
with the Registration Statement. This opinion is limited to the matters set
forth herein, and no other opinion should be inferred beyond the matters
expressly stated. We hereby consent to the filing of this opinion as
Exhibit 5.0 to the Registration Statement.
Very truly yours,
/s/ Piper & Marbury L.L.P.
EXHIBIT 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8 No. 333-_______) pertaining to the 1994 Stock Option
Plan of Human Genome Sciences, Inc., with respect to the financial
statements of Human Genome Sciences, Inc. included in the Annual Report
(Form 10-K) for the year ended December 31, 1997.
/s/ Ernst & Young LLP
----------------------
ERNST & YOUNG LLP
Vienna, Virginia
November 9, 1998
