EXHIBIT 99.3
DURA PHARMACEUTICALS, INC.
CANCELLATION/REGRANT PROGRAM
NOVEMBER 9, 1998
NOTICE OF GRANT OF STOCK OPTION
Notice is hereby given of the following stock option grant (the "New
Option") to purchase shares of Common Stock of Dura Pharmaceuticals, Inc. (the
"Company"):
OPTIONEE: Robert S. Whitehead
FORMERLY-GRANTED OPTION NEW OPTION
HEREBY CANCELLED HEREBY GRANTED
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GRANT DATE: July 10, 1998 GRANT DATE: November 9, 1998
OPTION PRICE: $21.94 per share OPTION PRICE: $10.31 per share
NUMBER OF OPTION SHARES: 250,000 shares NUMBER OF OPTION SHARES: 192,308 shares
TYPE OF OPTION: Non-Qualified Stock Option TYPE OF OPTION: Non-Qualified Stock Option
EXPIRATION DATE: July 10, 2008 EXPIRATION DATE: November 9, 2008
EXERCISE SCHEDULE. The New Option shall become exercisable for the
Option Shares in a series of installments as follows: the New Option will become
exercisable for twenty-five percent (25%) of the Option Shares upon completion
of one year of service measured from the New Option Grant Date, and the balance
of the Option Shares shall become exercisable in equal daily installments over a
period of three (3) years measured from the first anniversary of the New Option
Grant Date. In no event shall any additional Option Shares vest after Optionee
ceases to be employed by the Company.
OTHER PROVISIONS. Optionee agrees to be bound by the terms and
conditions of the Stock Option Agreement attached hereto as EXHIBIT A.
NO EMPLOYMENT OR SERVICE CONTRACT. Nothing in this Notice of Grant or
in the attached Stock Option Agreement or in the Plan shall confer upon Optionee
any right to continued employment for any period of specific duration or
interfere with or otherwise restrict in any way the rights of the Company (or
any parent or subsidiary employing Optionee) or Optionee, which rights are
hereby expressly reserved by each, to terminate Optionee's employment at any
time for any reason whatsoever, with or without cause.
THIS OPTION IS GRANTED IN FULL AND COMPLETE CANCELLATION OF THE
FORMERLY-GRANTED OPTION IDENTIFIED ABOVE, AND OPTIONEE HEREBY AGREES AND
ACKNOWLEDGES THAT OPTIONEE HAS NO FURTHER RIGHTS TO ACQUIRE ANY SHARES OF COMMON
STOCK UNDER THE FORMERLY-GRANTED OPTION HEREBY CANCELLED.
DURA PHARMACEUTICALS, INC.
By: /s/ Cam L. Garner By: /s/ Robert S. Whitehead
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Cam L. Garner OPTIONEE
Chairman & CEO Robert S. Whitehead
EXHIBIT A
STOCK OPTION AGREEMENT
DURA PHARMACEUTICALS, INC.
RECITALS
A. The Board of Directors of Dura Pharmaceuticals, Inc. (the
"Corporation") grants stock options to selected individuals for the purpose of
attracting and retaining the services of persons who contribute to the growth
and financial success of the Corporation.
B. Optionee is a person who the Corporation believes has and will
contribute to the growth and financial success of the Corporation.
AGREEMENT
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT. Corporation hereby grants Optionee an option ("Option") to
purchase shares of Common Stock of the Corporation ("Option shares") as
specified in the attached Notice of Grant of Stock Option (the "Grant Notice")
at an exercise price specified in the Grant Notice (the "Exercise Price")
subject to the terms and conditions of this Agreement and the Grant Notice.
2. VESTING OR EXERCISE PERIOD. Subject to the terms and conditions of
this Agreement and that certain letter agreement dated July 1, 1998 between the
Corporation and Optionee, this Option will vest as set forth in the Grant
Notice. Provided, however, that this Option will expire at midnight on the
expiration date shown in the Grant Notice, which date is 10 years after the
Grant Date set in the Grant Notice (the "Expiration Date"), and this Option must
be exercised, if at all, on or before the Expiration Date.
3. DESIGNATION OF OPTION TYPE. Optionee understands that the Option is
a non-qualified stock option.
4. TERMINATION.
(a) If Optionee ceases to be an employee of the Corporation or
a subsidiary or parent of the Corporation for any reason except death or
disability, this Option may be exercised (for shares vested on the date Optionee
ceased to be an employee) within THREE (3) MONTHS after the date Optionee ceased
to be an employee, but in no event later than the Expiration Date.
(b) If Optionee ceases to be an employee of the Corporation or
a subsidiary or parent of the Corporation because of disability or death, this
Option may be exercised (for shares vested on the date Optionee ceased to be an
employee) within TWELVE (12) MONTHS after Optionee ceased to be an employee, but
in no event later than the Expiration Date.
For purposes of this section, Optionee will be deemed an "employee" if Optionee
is providing services as an independent contractor or consultant to the
Corporation or a subsidiary or parent of the Corporation.
5. EXERCISE.
(a) This Option is exercisable by delivery of an executed
Notice of Exercise, in a form satisfactory to the Corporation. The Notice of
Exercise will set forth the Optionee's election to exercise this Option and the
number of Option Shares being purchased.
(b) Full payment of the Exercise Price must be made in one or
more of the following forms:
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(1) check made payable to the Corporation;
(2) promissory note;
(3) shares of Common Stock of the Corporation
held for the requisite period to avoid a charge to the Corporation's earnings
and valued as of the Exercise Date; or
(4) delivery of a properly executed Notice of
Exercise, together with irrevocable instructions to a broker to promptly deliver
to the Corporation the amount of sale or loan proceeds to pay the Exercise
Price.
For purposes of subparagraphs (2) and (4) immediately above, the effective date
of the exercise (the "Exercise Date") will be the date the Notice of Exercise is
delivered to the Corporation. In all other cases, the Exercise Date will be the
date on which the Notice of Exercise and actual payment are received by the
Corporation.
6. TRANSFERABILITY. This Option may be assigned in whole or in
part during the Optionee's lifetime. The assigned portion may only be exercised
by the person or persons who acquire a proprietary interest in the Option
pursuant to the assignment. The terms applicable to the assigned portion shall
be the same as those in effect for the Option immediately prior to such
assignment and shall be set forth in such documents issued to the assignee as
the Corporation may deem appropriate. This Option may, after Optionee's death,
be transferred by Will or state law of descent and distribution.
The terms of this Option are binding upon the executors, administrators,
successors and assigns of Optionee.
7. WITHHOLDING. Optionee agrees, as a condition to the exercise
of this Option, to make appropriate arrangements with the Corporation or a
subsidiary or parent of the Corporation employing Optionee for the satisfaction
of any federal, state or local income or employment tax requirements applicable
to the exercise of this Option or to the sale of shares acquired under this
Option.
8. ADJUSTMENTS. If any change is made to the Option Shares
(whether by reason of merger, consolidation, reorganization, recapitalization,
stock dividend, stock split, combination of shares, exchange of shares or other
change in corporate or capital structure of the Corporation) then the
Corporation will make appropriate adjustments to the kind, price per share and
maximum number of shares subject to this Option. Adjustments made by the
Corporation will be final, binding and conclusive. No adjustment will be made if
such change results in the acceleration and termination of all outstanding
options in accordance with the Acceleration and Termination of Options
provisions of the following paragraph.
9. ACCELERATION AND TERMINATION OF OPTIONS. In the event of one
or more of the following transactions ("Corporate Transactions"):
(a) a merger or consolidation in which the Corporation
is not the surviving entity, except for a transaction the principal purpose of
which is to change the State of the Corporation's incorporation,
(b) the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation,
(c) any reverse merger in which the corporation is the
surviving entity but in which 50% or more of the Corporation's outstanding
voting stock is transferred to holders different from those who held such
securities immediately before the merger, or,
(d) an acquisition by any person or related group of
persons (other than the Corporation or a person that directly or indirectly
controls, is controlled by or is under common control with, the Corporation) of
ownership of more than 50% of the Corporation's outstanding Common Stock,
pursuant to a tender or exchange offer
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then the Option holder may exercise this Option for all of the Option Shares,
including shares previously unvested, provided the Option is exercised
immediately before the consummation of the Corporate Transaction and before the
Expiration Date. Upon consummation of the Corporate Transaction, this Option, to
the extent not previously exercised, will terminate and cease to be exercisable.
10. NOTICES. Any notice required to be given to the Corporation
under this Agreement will be in writing and addressed to the Corporation and its
corporate offices. Any notice required to be given to Optionee under this
Agreement will be in writing and addressed to Optionee at the address specified
in Optionee's employment file maintained by the Corporation. All notices will be
deemed to have been given or delivered upon personal delivery or upon deposit in
the United State mail, postage prepaid and properly addressed to the party to be
notified.
11. NO EMPLOYMENT CONTRACT. This Option shall not confer upon
Optionee any right to continue in the employ of or to provide services to the
Corporation or a subsidiary or parent of the Corporation or constitute any
contract or agreement of employment or services or interfere in any way with the
right of the Corporation or a subsidiary or parent of the Corporation to reduce
such Optionee's compensation or to terminate Optionee's employment or services
at any time, with or without cause.
12. COMPLIANCE. This Option may not be exercised unless the
exercise is in compliance with all applicable requirements of federal and state
law and with the requirements of any stock exchange on which the Corporation's
Common Stock may be listed at the time of exercise.
13. SHAREHOLDER RIGHTS. Optionee will have no shareholder rights
with respect to any Option Shares prior to the Exercise Date of the option.
14. CORPORATION RIGHTS. The grant this Option shall in no way
affect the right of the Corporation to adjust, reclassify, reorganize or
otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.
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