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.
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.
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.
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.
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.
(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.
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.
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.
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.
(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.
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.
(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.
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.
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.
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.
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.
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.
(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.
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.
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.
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.
(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.
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.
(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.