EXHIBIT 99.2
Client's name: ANDRES NEGRO-VILAR
Issuer's name: LIGAND PHARMACEUTICALS
Type of securities: STOCK OPTION
Maximum Number of Shares
to sell under plan ______________
Maximum Number of Emploee Stock
Options to sell under the plan: 130,000
RULE 10B5-1 SALES PLAN AND CLIENT REPRESENTATIONS
I, ANDRES NEGRO-VILAR, as of the date below, establish this Sales Plan
("the Plan") in order to sell shares of the Issuer's common stock pursuant to
the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
I request that Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill
Lynch") execute the Plan as follows:
1. Starting on January 10, 2005 and ending on December 31, 2005,
a. For securities other than employee stock options, SELL:
[ ] __________ [number] of shares every_________[time period: day,
week, month, quarter, day/date of month, ect.], provided the
price per share is at or above $__________ [dollar amount] on the
principal exchange or market on which the shares are traded (the
"Exchange").
[ ] shares pursuant to the attached table;
Carry forward provision (optional)
[ ] Any shares not sold in a given _________ [time period: day,
week, month, quarter, day/date of month, ect.], because the
parameters (E.G., specified sale price) under the ---- Plan were
not met, will carry forward to future _______ [time periods]
until sold.
b. For employee stock options, EXERCISE MY OPTIONS AND SELL THE
UNDERLYING SHARES:
[ ] ___________ [number] stock options every__________ [time
period: day, week, month, quarter, day/date of month, etc.],
provided the price per underlying share is at or above $________
[dollar amount] on the principal exchange or market on which the
shares are traded (the "Exchange")
[X] stock options pursuant to the attached table1;
Carry forward provision (optional)
[ ] Any options not exercised and underlying shares not sold in a
given _________ [time period: day, week, month, quarter, day/date
of month, ect.], because the parameters (e.g., specified sale
price) under the Plan were not met, will carry forward to future
_______ [time periods] until sold.
PROVIDED, HOWEVER, that
(i) Merrill Lynch will exercise no stock option, unless its
exercise price is less than the market price of the
underlying share; and Merrill Lynch first will exercise
those stock options {SELECT ONE}:
[ ] with the earliest expiration date
[ ] with the lowest exercise price; and
(ii) Merrill Lynch may deduct from the proceeds of each stock
option exercised and the underlying shares sold the sum of
(a) the exercise price and (b) any withholding tax and then
remit that sum to the Issuer.
2. SUSPENSION
If Merrill Lynch must suspend sales allocated under the Plan, pursuant
to Section 1 above, on a particular day for any of the following reasons:
a. a day specified by the Plan is not a day on which the shares trade
regular way on the Exchange;
b. trading of the shares on the Exchange is suspended for any reason;
c. there is insufficient demand for any or all of the shares at or above
the specified price; (e.g., specified price met but all shares could
not be sold at or above specified price)
d. Merrill Lynch cannot effect a sale of shares due to legal, regulatory
or contractual restrictions applicable to it or to me (including
without limitation, Regulation M); or
- --------
1 An illustration is provided as an annex to the Plan.
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e. if the shares are being sold pursuant to a registration statement, the
termination, expiration, suspension or unavailability of the
registration statement;
then, shares allocated under the Plan for sale during the period when sales
under the Plan are suspended {SELECT ONE ONLY} :
[ ] will remain unsold
[X] will be sold as soon as possible provided specified parameters are met
[ ] will be carried forward to be sold with the next amount of shares to
be sold in accordance with Section 1 of the Plan
3. TERMINATION
The Plan shall end on the earliest of:
a. the termination date listed above;
b. the completion of all sales contemplated in Section 1 of the Plan;
c. my or Merrill Lynch's reasonable determination that:
(i) the Plan does not comply with Rule 10b5-1 or other applicable
securities laws;
(ii) I have not, or Merrill Lynch has not, complied with the Plan,
Rule 10b5-1 or other applicable securities laws; or
(iii) I have made misstatements in my Client Representations to
Merrill Lynch;
[ ] the filing of a bankruptcy petition by the Issuer or Client
[ ] the public announcement of a merger, recapitalization,
acquisition, tender or exchange offer, or other business
combination or reorganization .
[ ] the public announcement of a public offering of securities by
the Issuer
[ ] the conversion of the shares into rights to receive fixed
amounts of cash or into debt securities and/or preferred stock
(whether in whole or in part)
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[ ] my death, disability or mental incapacity
[ ] my severance or retirement from the Issuer or
[X] receipt by Merrill Lynch of written notice of termination from me
pursuant to Section 13 below.
4. At the discretion of Merrill Lynch, shares allocated under the Plan for sale
on a given day or date may be sold in bulk or in smaller increments, depending
upon market demand and the minimum price established in Section 1.
5. In the event of a stock split or reverse stock split, the share quantity and
dollar amount at which shares are sold will be automatically adjusted
proportionately.
6. Unless I have indicated otherwise in Section 2 above, in the event of a
reincorporation or other corporate reorganization resulting in an automatic
share-for-share exchange of new shares for the type of shares subject to the
Plan, then the new shares will automatically replace the type of shares
originally specified in the Plan.
7. Compliance with Rule 144 and Rule 145
a. I understand and agree that if I am an affiliate or control person for
purposes of Rule 144 under the Securities Act of 1933, as amended (the
"Securities Act"), or if the securities subject to the Plan are
restricted securities subject to limitations under Rule 144 or
eligible for resale under Rule 145, then all sales of securities under
the Plan will be in accordance with the applicable provisions of Rule
144. I request and authorize Merrill Lynch to complete and file on my
behalf the Forms 144 (pre-signed by me) necessary to affect the Plan,
if any.
b. If appropriate, I understand and agree that upon my prompt signature
and delivery to Merrill Lynch of Form 144, Merrill Lynch will make one
Form 144 filing at the beginning of each three-month period,
commencing with the date of the first sale made in connection with the
Plan, and that each Form 144 shall state the following: "This proposed
sale is made pursuant to a plan intended to comply with Rule
10b5-1(c), previously adopted on [insert plan adoption date], when I
was not aware of material nonpublic information".
c. Merrill Lynch will conduct sales pursuant to Rule 144 or Rule 145 if
appropriate, including applying Rule 144 volume limitations as if the
sales under the Plan were the only sales subject to the volume
limitations.
d. I agree not to take any action or to cause any other person or entity
to take any action that would require me to aggregate sales of
securities pursuant to Rule
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144; and not to take any action that would cause the sales of
securities under the Plan not to comply with Rule 144 or Rule 145.
8. Indemnification
a. I agree to indemnify and hold harmless Merrill Lynch from and against
all claims, losses, damages and liabilities arising out of inquiries
and/or proceedings resulting from assertions that:
(i) the Plan or sales made under the Plan do not comply with Rule
10b5-1 or with state securities laws or regulations prohibiting
trading while in possession of material nonpublic information and
(ii) Merrill Lynch has not executed any sales pursuant to the
provisions of the Plan.
b. This indemnification will survive termination of the Plan.
9. In consideration of Merrill Lynch accepting orders to sell securities under
this Plan, I make the following representations, warranties and covenants:
a. I established the Plan in good faith, in compliance with the
requirements of Rule 10b5-1, and at a time when I was not aware of
material nonpublic information about the Issuer, whose securities are
the subject of the Plan.
b. I have consulted with legal counsel and other advisors in connection
with my decision to enter into the Plan and have confirmed that the
Plan meets the criteria set forth in Rule 10b5-1.
c. I own all shares that are subject to the Plan free and clear of liens
or encumbrances of any kind (except for shares underlying employee
stock options).
d. Except as provided in the Plan and while the Plan is in effect, I
confirm that:
(i) I will not engage in offsetting or hedging transactions in
violation of Rule10b5-1; and
(ii) I will notify Merrill Lynch in advance of any sales or purchases
of, or derivative transactions on, any of the Issuer's
securities.
e. I further confirm my understanding that while this Plan is in effect,
I may not disclose to the persons at Merrill Lynch effecting sales
under the Plan for me any information concerning the Issuer that might
influence the execution of the Plan.
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f. Compliance with insider trading policies.
(i) The Plan does not violate the Issuer's insider trading policies.
(ii) I have informed the Issuer of the existence and provisions of the
Plan, and, if necessary under the Issuer's insider-trading
policies, authorized representatives of the Issuer have approved
the Plan and have been provided with a copy of the plan.
g. I agree to make or cause to be made all necessary filings, including
Rule 144 filings, filings pursuant to Section 13 and Section 16 of the
Exchange Act, and any other filings necessary pursuant to the
Securities Act and/or the Exchange Act.
h. Delivery requirements
(i) FOR SECURITIES OTHER THAN EMPLOYEE STOCK OPTIONS, prior to the
date of execution of any sales specified under the Plan, I agree
to have delivered into the custody of Merrill Lynch certificates
representing that number of securities that may be sold pursuant
to the Plan (or other appropriate evidence thereof), together
with all transfer documents and other authorizations required for
Merrill Lynch to effect settlement of sales of such securities on
my behalf.
(ii) FOR EMPLOYEE STOCK OPTIONS, (a) the number of options granted to
me by the Issuer that are vested, exercisable and registered is
equal to or greater than the number of options to be exercised
and the underlying shares to be sold under the Plan and (b) I
agree to provide to Merrill Lynch all necessary documentation,
properly executed, to effect the timely exercise of the stock
option and the subsequent sale and settlement of the securities.
(iii) I agree that Merrill Lynch's obligation to execute sales under
the Plan is conditioned on the satisfaction of the foregoing
delivery requirements
i. I agree to inform Merrill Lynch as soon as possible of (a) any
subsequent restrictions imposed on me due to changes in the securities
(or other) laws or of any contractual restrictions imposed on the
Issuer that would prevent Merrill Lynch or me from complying with the
Plan and (b) the occurrence of any event as set forth in the Plan that
would cause the Plan to end or be suspended under Section 2 or Section
3 of the Plan.
10. The Plan may be modified or amended only upon:
a. the written agreement of myself and Merrill Lynch and
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b. the receipt by Merrill Lynch of a certificate that I have signed to
the effect that the representations, warranties and covenants
contained in my Client Representations, dated the date hereof, are
true as of the date of such certificate.
11. The Plan may be signed in counterparts, each of which will be an original.
12. The Plan, including the representations, warranties and covenants in Section
9, constitutes the entire agreement between me and Merrill Lynch and supersedes
any prior agreements or understandings regarding the Plan.
13. All notices given by the parties under this Plan will be as follows:
a. If to Merrill Lynch:
Managing Director and Administrative Manager
Merrill Lynch, Pierce, Fenner & Smith, Inc.
1650 Market Street
29th Floor
Philadelphia, PA 19103
b. If to me: [client address].
Ligand Pharmaceuticals
10275 Science Center Drive
San Diego, CA 92121
IF YOU ARE SUBJECT TO THE REPORTING REQUIREMENTS OF SECTION 16 OF THE EXCHANGE
ACT, COMPLETE THE FOLLOWING SECTION 14 TO HAVE TRANSACTION INFORMATION FOR OPEN
MARKET TRANSACTIONS UNDER THE PLAN FORWARDED TO A DESIGNATED THIRD PARTY.
14. I authorize Merrill Lynch to transmit transaction information via fax and/or
email for open window and transactions under the Plan (sales and purchases) to:
a. Name:BARBARA OLSON b. Name: WARNER BROADDUS
Title:LEGAL Title:GENERAL COUNSEL
Organization: LIGAND PHARM. Organization: LIGAND PHARM.
Fax:858-550-5632 Fax Number: 858-550-1825
Tel.:858-550-7577 Tel.:858-550-7830
e-mail:bolson@ligand.com e-mail:wbroaddus@ligand.com
Reasonable efforts will be made to transmit transaction information for
open market transactions under the Plan (purchase or sale) by the close of
business on the day of the purchase or sale, but no later than the close of
business on the first trading day following the purchase or sale. I acknowledge
that Merrill Lynch: (1) has no obligation to confirm receipt of any email or
faxed information by the designated contact and (2)
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has no responsibility or liability for filing a Form 4 with the SEC or for
compliance with Section 16 of the Securities Exchange Act of 1934. If any of the
above contact information changes, or I would like to terminate this
authorization, I will promptly notify Merrill Lynch in writing. I further
authorize Merrill Lynch to transmit transaction information to a third party
service provider who will make the information available to my designated
representative(s) listed above.
15. This Plan will be governed by and construed in accordance with the internal
laws of the State of New York.
By: /S/ ANDRES NEGRO VILAR
Name: Andres Negro-Vilar
Date: December 10, 2004
Acknowledged and Agreed this10th day of
December, 2004:
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By: /S/ BRIAN P. PUGH
Name: Brian Pugh
Title: Administrative Manager
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ANNEX A - 10B5-1 SCHEDULE
- ----------------- --------------- ------------------- --------------- ----------------- ---------------
NUMBER OF OPTIONS
TO BE SOLD IN THE GRANT NO. SALE PRICE
START DATE END DATE PLAN GRANT DATE EXERCISE PRICE -LIMIT"
- ----------------- --------------- ------------------- --------------- ----------------- ---------------
1/10/2005 12/31/2005 5,625 B93903 ISO $7.625 At or above
$18.00
- ----------------- --------------- ------------------- --------------- ----------------- ---------------
1/10/2005 12/31/2005 24,375 BM93903 NQ $7.625 At or above
$18.00
- ----------------- --------------- ------------------- --------------- ----------------- ---------------
1/10/2005 12/31/2005 32,988 B92947 ISO $12.125 At or above
$25.00
- ----------------- --------------- ------------------- --------------- ----------------- ---------------
1/10/2005 12/31/2005 67,012 BM92947 NQ $12.125 At or above
$30.00
- ----------------- --------------- ------------------- --------------- ----------------- ---------------
- ----------------- --------------- ------------------- --------------- ----------------- ---------------
- ----------------- --------------- ------------------- --------------- ----------------- ---------------
- ----------------- --------------- ------------------- --------------- ----------------- ---------------
TOTAL 130,000
- ----------------- --------------- ------------------- --------------- ----------------- ---------------
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