Exhibit 10.01

Form of [Replacement]* Option Agreement and
Notice of Grant of [Replacement]* Options for Directors and Named
Executive Officers of Regeneron Pharmaceuticals, Inc.

     

  Regeneron Pharmaceuticals, Inc.

  ID: [          ]
Notice of Grant of Stock Options
  777 Old Saw Mill River Road
Option Agreement for [Replacement]*
  Tarrytown, New York 10591
Option Awards
   

     
[OPTIONEE NAME]
  Option Number: [          ]
[OPTIONEE ADDRESS]
  Plan:                          2004

  ID                               [          ]

Effective <date> (the Grant Date) you have been granted a(n)
[Incentive][Non-Qualified] Stock Option to buy [     ] shares of Regeneron
Pharmaceuticals, Inc. (the Company) stock at [$     ] per share.

The total option price of the shares granted is [$     ].

[Shares in each period will become fully vested on the date shown.

              [Shares

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  Vest Type

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  Full Vest

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  Expiration Date

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**
  On Vest Date   [_/_/_]**   [10 years from Grant
Date]
           
**
  On Vest Date   [_/_/_]**   [10 years from Grant
Date]
           
**
  On Vest Date   [_/_/_]**   [10 years from Grant
Date]
**
  On Vest Date   [_/_/_]**   [10 years from Grant
Date] ]
           

[The Non-Qualified Stock Option becomes fully vested with respect to all shares
underlying the option on the date the Company’s Products (as defined below) have
achieved aggregate, worldwide gross sales of at least US$100 million during any
consecutive twelve-month period (as determined by the Board in accordance with
GAAP) based on sales directly by the Company and/or its licensees, affiliates,
and distributors (the “Milestone Date”), unless the Milestone Date occurs before
the third anniversary of the Grant Date, in which case all of the shares
underlying the option becomes fully vested on the third anniversary of the Grant
Date. The date of such vesting is referred to in the enclosed Option Agreement
as the “Full Vest Date.” As used above, the term “Products” shall mean the VEGF
Trap, IL-1 Trap, IL-4/13 Trap, AXOKINE and any other pharmaceutical or
diagnostic product(s) of the Company that result from the Company’s research and
development programs. Sales of the Company’s Products outside the United States
shall be converted to dollars using the month-end spot rates published by The
Wall Street Journal, Eastern Edition and a method of conversion consistent with
the Company’s (or its licensee’s, as applicable) customary and usual procedures
for currency conversion.]*

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[The Non-Qualified Stock Option expires on [          ]*** (the “Expiration
Date”).]*

    You and the Company agree that these options are granted under and governed
by the terms and conditions of the Company’s 2000 Long-Term Incentive Plan as
amended and the enclosed Option Agreement, both of which are attached and made a
part of this document.

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* This language will only be included in an option agreement or notice of grant
for replacement options granted to eligible “named executive officers” (which
are executive vice president and senior vice presidents) to the extent such
individuals exchange options in the Option Exchange Program commenced
December 3, 2004. All replacement options granted to a named executive officer
will be nonqualified stock options. Directors who are not also eligible named
executives officers and the president and chief executive officers are not
eligible to participate in the Option Exchange Program.

** Options for executive officers will vest in approximately equal annual 25%
installments. Full Vest Dates will occur on the first, second, third and fourth
anniversaries of the Grant Date. Options for non-employee directors will vest in
approximately equal annual 33-1/3% installments. Full Vest Dates will occur on
the first, second, and third anniversaries of the Grant Date.

*** Date to be the later of (i) the remaining term of the tendered option this
replacement option replaces, and (ii) 6 years from the Grant Date.

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REGENERON PHARMACEUTICALS, INC.

OPTION AGREEMENT
PURSUANT TO THE
2000 LONG-TERM INCENTIVE PLAN

          THIS AGREEMENT, made as of the date on the Notice of Grant of Stock
Options, by and between Regeneron Pharmaceuticals, Inc., a New York corporation
(the “Company”), and the employee named on the Notice of Grant of Stock Options
(the “Grantee”);

          WHEREAS, the Grantee is an employee of the Company and the Company
desires to afford the Grantee the opportunity to acquire or enlarge the
Grantee’s stock ownership in the Company so that the Grantee may have a direct
proprietary interest in the Company’s success; and

          WHEREAS, the Committee administering the 2000 Long-Term Incentive Plan
(the “Plan”) has granted (as of the effective date of grant specified in the
Notice of Grant of Stock Options) to the Grantee a Stock Option to purchase the
number of shares of the Company’s Common Stock ($.001 par value) (the “Common
Stock”) as set forth in the Notice of Grant of Stock Options.

          NOW, THEREFORE, in consideration of the covenants and agreements
herein contained, the parties agree as follows:

     1. Grant of Award. Pursuant to Section 7 of the Plan, the Company grants to
the Grantee, subject to the terms and conditions of the Plan and subject further
to the terms and conditions set forth here, the option to purchase from the
Company all or any part of an aggregate of shares of Common Stock at the
purchase price per share (the “Option”) as shown on the Notice of Grant of Stock
Options. [The Option is intended to be an Incentive Stock Option under
Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).
Notwithstanding the foregoing, the Option will not qualify as an Incentive Stock
Option, among other events, (i) if the Grantee disposes of the Common Stock
acquired pursuant to the Option at any time during the two year period following
the date of this Agreement or the one year period following the date on which
the Option is exercised, or (ii) if the Grantee is not employed by the Company
or a subsidiary of the Company within the meaning of Section 424 of the Code (a
“Subsidiary”) at all times during the period beginning on the date of this
Agreement and ending on the day three months before the date of exercise of the
Option, or (iii) to the extent the aggregate fair market value (determined as of
the time the Option is granted) of the stock subject to Incentive Stock Options
which become exercisable for the first time in any calendar year exceeds
$100,000. To the extent that the Option does not qualify as an Incentive Stock
Option, it shall constitute a separate Non Qualified Stock Option.]1 [No part of
the Option granted hereby is intended to qualify as an Incentive Stock Option
under Section 422 of the Internal Revenue Code of 1986, as amended (the
“Code”).]2.

     2. Vesting. (a) The Option is exercisable as provided on the Notice of
Grant of Stock Options. To the extent that the Option has become exercisable as
provided on the Notice of Grant of Stock Options and subject to the terms and
conditions of the Plan, including without limitation, Section 7(c)(1) & (2), the
Option may thereafter be exercised by the Grantee, in whole or in part, at any
time or from time to time prior to the expiration of the Option in accordance
with the requirements set forth in Section 7(c)(3) of the Plan, including,
without limitation, the filing of such written form of exercise notice as may be

 

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1 This text will appear in agreements for options that are intended to be
incentive stock options under Section 422 of the Internal Revenue Code of 1986,
as amended.
 
2 This text will appear in agreements for options that are not intended to be
incentive stock options under Section 422 of the Internal Revenue Code of 1986,
as amended. All replacement options granted to eligible “named executive
officers” will be nonqualified stock options. Directors who are not employees
are only eligible to receive nonqualified stock options.

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promulgated by the Committee, and in accordance with applicable tax and other
laws. The Company shall have the right to require the Grantee in connection with
the exercise of the Option to remit to the Company in cash an amount sufficient
to satisfy any federal, state and local withholding tax requirements related
thereto.

     (b) The Notice of Grant of Stock Options describes the date (the “Full Vest
Date”) upon which the Grantee shall be entitled to exercise the Option provided
that the Grantee has not incurred a termination of employment or service with
the Company and all Subsidiaries (collectively, the Company and all Subsidiaries
shall be referred to herein as the “Employer” and no termination of employment
or service shall be deemed to take place unless the Grantee is no longer
employed by or providing service to the Employer) prior to such date. There
shall be no proportionate or partial vesting prior to the Full Vest Date
specified in the Notice of Grant of Stock Options and all vesting shall occur
only on the Full Vest Date. Except as otherwise provided in any employment
agreement, consulting agreement, change in control agreement or similar
agreement in effect between the Employer and the Grantee on the date specified
in the Notice of Grant of Stock Options, no vesting shall occur after such date
as the Grantee ceases to be employed by the Employer (or serve as a member of
the Board of Directors, as the case may be) and all unvested Options shall be
forfeited at such time.

     (c) [If Grantee makes payment upon exercise of the Option by delivering
shares of Common Stock owned by the Grantee for at least six months prior to the
date of exercise, the Grantee shall be granted a new option (a “Reload Option”)
on the date of exercise for a number of shares equal to the number of shares
surrendered by the Grantee upon exercise, subject to the availability of shares
of Common Stock under the Plan at the time of such exercise. Such Reload Option
shall be granted at an exercise price equal to the Fair Market Value (as defined
in the Plan) of a share of Common Stock on the date of grant, shall expire on
the date on which the original Option would have expired, and shall be fully
vested; provided, however, that the Reload Option may not be exercised until the
date that is six months after the date of grant. The Reload Option shall
otherwise be subject to the same terms and conditions as the original Option;
provided, however, that the exercise of the Reload Option shall not entitle the
Grantee to any further Reload grant.]3

     (d) Notwithstanding anything herein (except the following sentence) or in
the Notice of Grant of Stock Options to the contrary, the Option shall be fully
vested if the Grantee’s employment with the Employer (or serve as a member of
the Board of Directors, as the case may be) is terminated on or within two years
after the occurrence of a Change in Control by the Employer (other than for
Cause) or by the Grantee for Good Reason. Except as otherwise provided in any
employment agreement, consulting agreement, change in control agreement or
similar agreement in effect between the Employer and the Grantee on the date of
grant specified in the Notice of Grant of Stock Options, if the application of
the provision in the foregoing sentence, similar provisions in other stock
option or restricted stock grants, and other payments and benefits payable to
the Grantee upon termination of employment (collectively, the “Company
Payments”) would result in the Grantee being subject to excise tax payable under
Internal Revenue Code Section 4999 (the Excise Tax”), the amount of any Company
Payments shall be automatically reduced to an amount one dollar less than an
amount that would subject the Grantee to the Excise Tax; provided, however, that
the reduction shall occur only if the reduced Company Payments received by the
Grantee (after taking into account further reductions for applicable federal,
state and local income, social security and other taxes) would be greater than
the unreduced Company Payments to be received by the Grantee minus (i) the
Excise Tax payable with respect to such Company Payments and (ii) all applicable
federal, state and local income, social security and other taxes on such Company
Payments. If the Company Payments are to be reduced in accordance with the
foregoing, the Company Payments shall be reduced as mutually agreed between the
Employer and the Grantee or, in the event the parties cannot agree, in the
following order (1) acceleration of vesting of any option where the exercise
price exceeds the fair market value of the underlying shares at the time the
acceleration would otherwise occur, (2) any lump sum severance based on a
multiple of base salary or bonus, (3) any other cash amounts payable to the

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3 This text will only appear in replacement options granted in exchange for
options which currently have these “reload” provisions and in future option
grants.

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Grantee, (4) any benefits valued as parachute payments, and (5) acceleration of
vesting of any equity not covered by (1) above.

     3. Option Term. (a) Except as otherwise provided in the next sentence or in
the Plan, the Option shall expire on the Expiration Date shown on the Notice of
Grant of Stock Options. In the event of termination of employment or service
with the Employer (including, by way of example, termination of service as a
member of the Board of Directors), except as set forth in any employment
agreement, consulting agreement, change in control agreement or similar
agreement in effect between the Employer and the Grantee on the date of grant
specified in the Notice of Grant of Stock Option, the vested portion of the
Option shall expire on the earlier of (i) the Expiration Date, or (ii)(A)
subject to (E) below, three months after such termination if such termination is
for any reason other than death, retirement, or long-term disability, (B) two
years after such termination if such termination is due to the Grantee’s
retirement, (C) one year after the termination if such termination is due to the
Grantee’s death or long-term disability, (D) the occurrence of the Cause event
if such termination is for Cause or Cause existed at the time of such
termination (whether then known or later discovered) or (E) one year after such
termination if such termination is at any time within two years after the
occurrence of a Change in Control and is by the Employer without Cause or by the
Grantee for Good Reason.

     (b) For purposes of this Agreement, “Cause” shall mean (i) in the case
where there is no employment agreement, consulting agreement, change in control
agreement or similar agreement in effect between the Company and the Grantee on
the date of grant specified in the Notice of Grant of Stock Options (or where
there is such an agreement but it does not define “cause” (or words of like
import)) (A) the willful and continued failure by the Grantee substantially to
perform his or her duties and obligations to the Employer, including without
limitation, repeated refusal to follow the reasonable directions of the
Employer, knowing violation of law in the course of performance of the duties of
the Grantee’s employment with the Employer, repeated absences from work without
a reasonable excuse, and intoxication with alcohol or illegal drugs while on the
Employer’s premises during regular business hours (other than any such failure
resulting from his or her incapacity due to physical or mental illness);
(B) fraud or material dishonesty against the Employer; or (C) a conviction or
plea of guilty or nolo contendere to a felony or a crime involving material
dishonesty or (ii) in the case where there is an employment agreement,
consulting agreement, change in control agreement or similar agreement in effect
between the Employer and the Grantee on the date of grant specified in the
Notice of Grant of Stock Options that defines “cause” (or words of like import),
as defined under such agreement. For purposes of this Section 3(b), no act, or
failure to act, on a Grantee’s part shall be considered “willful” unless done,
or omitted to be done, by the Grantee in bad faith and without reasonable belief
that his or her action or omission was in the best interest of the Employer. Any
determination of Cause made prior to a Change in Control shall be made by the
Committee in its sole discretion.

     (c) For purposes of this Agreement, “Good Reason” shall mean (i) in the
case where there is no employment agreement, consulting agreement, change in
control agreement or similar agreement in effect between the Employer and the
Grantee on the date of grant specified in the Notice of Grant of Stock Options
(or where there is such an agreement but it does not define “good reason” (or
words of like import)) a termination of employment or services by the Grantee
within one hundred twenty (120) days after the occurrence of one of the
following events after the occurrence of a Change in Control unless such events
are fully corrected in all material respects by the Employer within thirty (30)
days following written notification by the Grantee to the Employer that Grantee
intends to terminate his employment hereunder for one of the reasons set forth
below: (A) (1) any material diminution in the Grantee’s duties and
responsibilities from that which exists immediately prior to a Change in Control
(except in each case in connection with the termination of the Grantee’s
employment or services for Cause or as a result of the Grantee’s death, or
temporarily as a result of the Grantee’s illness or other absence), or (2) the
assignment to the Grantee of duties and responsibilities materially inconsistent
with the position held by the Grantee; (B) any material breach by the Employer
of any material provision of any written agreement with the Grantee or failure
to timely pay any compensation obligation to the Grantee; (C) a reduction in the
Grantee’s annual base salary or target bonus opportunity (if any) from that
which exists immediately prior to a Change in Control; or (D) if the Grantee is
based at the Employer’s principal executive office, any relocation therefrom or,
in any event, a relocation of the Grantee’s primary office of more than fifty
(50) miles from the location immediately prior to a Change in Control; or
(ii) in the case where there is an

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employment agreement, consulting agreement, change in control agreement or
similar agreement in effect between the Employer and the Grantee on the date of
grant specified in the Notice of Grant of Stock Options that defines “good
reason” (or words of like import), as defined under such agreement.

     4. Restrictions on Transfer of Option. The Option granted hereby shall not
be transferable other than by will or by the laws of descent and distribution.
During the lifetime of the Grantee, this Option shall be exercisable only by the
Grantee. In addition, except as otherwise provided in this Agreement, the Option
shall not be assigned, negotiated, pledged or hypothecated in any way (whether
by operation of law or otherwise), and the Option shall not be subject to
execution, attachment or similar process. Upon any other attempt to transfer,
assign, negotiate, pledge or hypothecate the Option, or in the event of any levy
upon the option by reason of any execution, attachment, or similar process
contrary to the provisions hereof, the Option shall immediately become null and
void. Notwithstanding the foregoing provisions of this Section 4, subject to the
approval of the Committee in its sole and absolute discretion and to any
conditions that the Committee may prescribe, the Grantee may, upon providing
written notice to the Company, elect to transfer the Option to members of his or
her immediate family, including, but not limited to, children, grandchildren and
spouse or to trusts for the benefit of such immediate family members or to
partnerships in which such family members are the only partners; provided,
however, that no such transfer may be made in exchange for consideration.

     5. Rights of a Stockholder. The Grantee shall have no rights as a
stockholder with respect to any shares of Common Stock subject to this Option
prior to the date of issuance to the Grantee of a certificate or certificates
for such shares. No adjustment shall be made for dividends in cash or other
property, distributions, or other rights with respect to such shares for which
the record date is prior to the date upon which the Grantee shall become the
holder of record therefor.

     6. Compliance with Law and Regulations. This award and any obligation of
the Company hereunder shall be subject to all applicable federal, state and
local laws, rules and regulations and to such approvals by any government or
regulatory agency as may be required. The Company shall be under no obligation
to effect the registration pursuant to federal securities laws of any interests
in the Plan or any shares of Common Stock to be issued hereunder or to effect
similar compliance under any state laws. The Company shall not be obligated to
cause to be issued or delivered any certificates evidencing shares of Common
Stock pursuant to this Agreement unless and until the Company is advised by its
counsel that the issuance and delivery of such certificates is in compliance
with all applicable laws, regulations of governmental authority and the
requirements of any securities exchange on which shares of Common Stock are
traded. The Committee may require, as a condition of the issuance and delivery
of certificates evidencing shares of Common Stock pursuant to the terms hereof,
that the recipient of such shares make such agreements and representations, and
that such certificates bear such legends, as the Committee, in its sole
discretion, deems necessary or desirable. Except to the extent preempted by any
applicable federal law, this Agreement shall be construed and administered in
accordance with the laws of the State of New York without reference to its
principles of conflicts of law.

     7. Grantee Bound by Plan. The Grantee acknowledges receipt of a copy of the
Plan and agrees to be bound by all the terms and provisions thereof. The Plan is
incorporated herein by reference, and any capitalized term used but not defined
herein shall have the same meaning as in the Plan. To the extent that this
Agreement is silent with respect to, or in any way inconsistent with, the terms
of the Plan, the provisions of the Plan shall govern and this Agreement shall be
deemed to be modified accordingly.

     8. Notices. Any notice or communication given hereunder shall be in writing
and shall be deemed given when delivered in person, or by United States mail, at
the following addresses: (i) if to the Employer, to: Regeneron Pharmaceuticals,
Inc., 777 Old Saw Mill River Road, Tarrytown, NY 10591, Attention: Secretary,
and (ii) if to the Grantee, to: the Grantee at Regeneron Pharmaceuticals, Inc.,
777 Old Saw Mill River Road, Tarrytown, NY 10591, or, if the Grantee has
terminated employment, to the last address for the Grantee indicated in the
records of the Employer, or such other address as the relevant party shall
specify at any time hereafter in accordance with this Section 8.

     9. No Obligation to Continue Employment. This Agreement does not guarantee
that the Employer will employ the Grantee for any specified time period, nor
does it modify in any respect the Grantee’s employment or compensation.

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