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EXHIBIT 10.20
SPECIMEN OF STOCK OPTION GRANT IN CONNECTION WITH 1992 NON-EMPLOYEE DIRECTOR
STOCK PLAN
STOCK OPTION GRANT
1. GRANT OF OPTION
Advanced Magnetics, Inc., a Delaware corporation (the "Company"), hereby
grants to _______________ (the "Director"), an option to purchase _______
shares of Common Stock, $0.01 par value per share, of the Company as
hereinafter set forth, pursuant and subject to the terms and provisions of
the Company's 1992 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN (the "Director
Plan").
All terms which are defined in the Director Plan shall have the same
meanings herein.
2. VESTING OF OPTION
This Option shall be exercisable in cumulative installations, as follows:
<Table>
<Caption>
Date Exercised Number of Shares Exercisable
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On or before _________________ _______________________
After _____ and on or before _______________________
After ______and on or before _______________________
After ______and on or before _______________________
After ______and on or before _______________________
After __________________ _______________________
</Table>
3. TERM OF OPTION
This Option shall TERMINATE in ________ YEARS on ___________.
4. EXERCISE PRICE
The EXERCISE PRICE of this Option shall be ________________ ($_____) per
share.
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5. EXERCISE AND PAYMENT
(a) METHOD OF PAYMENT. This Option shall be exercisable by delivery to the
Company of written notice of exercise, specifying the number of shares
for which this Option is being exercised (subject to Section 2
hereof), together with payment to the Company for the total exercise
price thereof in cash, by check, by Common Stock of the Company
already owned by the person or persons exercising the Option or by
some combination thereof, PROVIDED, HOWEVER, that there shall be no
such exercise at any one time as to fewer than one hundred (100)
shares or all of the remaining share(s) then purchasable by the person
or persons exercising the option, if fewer than one hundred (100)
shares.
(b) VALUATION OF SHARES TENDERED IN PAYMENT OF PURCHASE PRICE. For the
purposes hereof, the fair market value of any share of the Company's
Common Stock which may be delivered to the Company in exercise of this
Option shall be determined in accordance with Section 5 of the
Director Plan.
(c) DELIVERY OF SHARES TENDERED IN PAYMENT OF PURCHASE PRICE. If this
Option is exercised by delivery of shares of Common Stock of the
Company, the certificate or certificates representing the shares of
Common Stock of the Company to be delivered shall be duly executed in
blank by the owner of the shares or shall be accompanied by a stock
power duly executed in blank suitable for purposes of transferring
such shares to the Company. Fractional shares of Common Stock of the
Company will not be accepted in payment of the purchase price of
shares acquired upon exercise of this Option.
6. NON-TRANSFERABILITY
This Option shall not be assignable or transferable other than by will or the
laws of descent and distribution or pursuant to a qualified domestic relations
order (as defined by the Internal Revenue Code of 1986, as amended, or Title I
of the Employment Retirement Income Security Act, or thereunder, and shall be
exercisable during the holder's lifetime only by him or her.
7. EFFECT OF TERMINATION OF EMPLOYMENT OR DEATH
In the event that the Director ceases to be an employee of the Board for
any reason, other than death or permanent disability, any then unexercised
portion of this Option shall, to the extent not then vested, immediately
terminate and become void; any portion of this Option which is then vested
but has not been exercised at the time the Director so ceases to be a
member of the Board may be exercised, to the extent it is then vested, by
the holder (or by the holder's personal representative, heir or legatee, in
the event of the holder's death) within 90 days of the date the Director
ceased to be a member of the Board; and this Option shall terminate after
such 90 days have expired.
In the event the Director ceases to be a member of the board by reason of
his death or permanent disability, this Option shall be immediately and
automatically accelerated and become fully vested and any unexercised
portion or portions of this Option shall be exercisable by the holder (or
by the holder's personal representative, heir or legatee, in the event of
death) until the scheduled expiration date of this Option.
8. WITHHOLDING TAXES
The Director acknowledges and agrees that the Company has the right to
deduct from payments of any kind otherwise due to the Director any federal,
state or local taxes of any kind required by law to be withheld with
respect to exercise of this Option.
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9. PLAN PROVISIONS
This Option and the rights of the Director hereunder shall be subject to
and governed by the terms and provisions of the Director Plan, including
without limitation the provisions of Section 5 thereof, and any terms
stated herein that are not inconsistent with the terms of the Director
Plan.
10. DIRECTOR REPRESENTATION
The Director hereby represents that he or she has read the Director Plan,
attached hereto as EXHIBIT A.
11. EMPLOYEE REPRESENTATION; STOCK CERTIFICATE LEGEND
Because the Director is an "affiliate" of the Company (as defined in Rule
144 promulgated under the Securities Act of 1933), all stock certificates
representing shares of Common Stock issued pursuant to this Option shall
have affixed thereto legends substantially in the following form:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended (the "Act") and may not
be sold, transferred or assigned unless such shares are registered
under the Act or an opinion of counsel, satisfactory to the
corporation, is obtained to the effect that such sale, transfer or
assignment is exempt from the registration requirements of the Act."
12. NOTICE
Any notice required to be given under the terms of this Option shall be
properly addressed as follows: to the Company at its principal executive
offices, and to the Employee at his or her address set forth below, or at
such other address as either of such parties may hereafter designate in
writing to the other.
13. ENFORCEABILITY
This Option shall be binding upon the Director, any direct or indirect
transferee, and the estates, personal representatives and beneficiaries of
the Director and any direct or indirect transferee.
14. EFFECTIVE DATE
The effective DATE of this Option is _________________.
IN WITNESS WHEREOF, this Option has been executed by a duly authorized
officer of the Company as of the effective date.
Advanced Magnetics, Inc.
By:
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Director's Acceptance
The undersigned hereby accepts this Option and
agrees to the terms and provisions set forth in this
Option and in the Plan (a copy of which has been
delivered to him/her).
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(Signature of Director)
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(Print Name of Director)
Address: ------------------------------
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Date: ------------------------------
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