Exhibit
10.3


RESTRICTED
STOCK AGREEMENT


THIS RESTRICTED
STOCK AGREEMENT (this “Agreement”) is made as of the        
day of            between                       (“Recipient”) and deCODE genetics, Inc. (the “Corporation”).


WHEREAS, on                     ,
the Administrator approved the issuance of restricted stock pursuant to the
terms and conditions of this Agreement and subject to the provisions of the
Corporation’s 2006 Equity Incentive Plan, as amended from time to time (the “Plan”);


NOW, THEREFORE, it
is agreed as follows:


1.                                      Consideration.  In consideration of           ,
Corporation is issuing                     
(the “Shares”) of common stock, $0.001 par value (“Common Stock”), of the
Corporation to the Recipient.


2.                                      Vesting.   The Shares shall vest and be free of all
restrictions otherwise imposed by this Agreement as set forth on Schedule A.


3.                                      Issuance
and Retention of Share Certificates. 
Promptly after the execution of this Agreement by the Recipient, the
Corporation, at its discretion, shall cause The Bank of New York, the transfer
agent for the Common Stock (together with its successors and assigns, the “Transfer
Agent”), to either (i) make a book entry record showing ownership for the
Shares in the name of the Recipient subject to the terms and conditions of this
Agreement, or (ii) issue one or more share certificates evidencing the Shares;
provided, that until such time as the Shares shall vest, the Corporation shall
retain such share certificates and the Recipient shall deliver such stock
powers with respect to the Shares, endorsed in blank, as the Corporation may
request.  The Shares shall be issued from
Common Stock reserved for issuance pursuant to the Plan.  The Recipient understands that the
Corporation will, and the Recipient hereby authorizes the Corporation to, issue
such instructions to the Transfer Agent as the Corporation may deem necessary
or proper to comply with the intent and purposes of this Agreement.


4.                                      Release
of Shares.  Within thirty (30) days
of vesting, the Corporation shall deliver to the Recipient a certificate
evidencing the ownership of all of the Shares that have so vested (the “Vested
Shares”) or, at the request of the Recipient, shall arrange for a transfer of
the Vested Shares in book entry form to a brokerage account designated by the
Recipient.


5.                                      Forfeiture.  In the event of the Recipient’s termination
of employment or service with the Corporation or a Subsidiary prior to vesting,
all Shares (other than Vested Shares) shall be forfeited.


6.                                      Transferability.  The Recipient shall not sell, assign,
exchange, transfer, pledge, hypothecate or otherwise dispose of or encumber any
Shares other than Vested Shares, which shall be freely transferable, subject to
applicable securities laws.



   
 









7.                                      Rights
as a Stockholder.  The Recipient
shall not have any rights as a stockholder, including, without limitation, the
right to vote and to receive dividends, with respect to any Shares other than
Vested Shares.


8.                                      Investment
Purpose.  The Recipient represents
that the Shares are being acquired for investment and that the Recipient has no
present intention to transfer, sell or otherwise dispose of the Shares, except
in compliance with applicable securities laws, and the parties agree that the
Shares are being acquired in accordance with and subject to the terms,
provisions and conditions of this Agreement.


9.                                      Election
Under Section 83(b) of the Code. 

 

                                                                                                (a)
                               The
Recipient understands that Section 83 of the United States Internal Revenue
Code of 1986, as amended (the “Code”) taxes as ordinary income the difference
between the amount paid for the Shares (or zero is no payment is made for the
Shares) and the Fair Market Value of the Shares as of the date on which the
Shares are substantially vested, within the meaning of Section 83. The
Recipient understands that he may elect to have his taxable income determined
at the time he acquires the Shares rather than when and as the Shares have
vested by filing an election under Section 83(b) of the Code with the Internal
Revenue Service no later than thirty (30) days after the date of acquisition of
the Shares. The Recipient understands that failure to make a timely filing
under Section 83(b) will result in his recognition of ordinary income, as the
Shares vest, on the difference between the purchase price, (or zero if no
payment is made for the Shares) and the Fair Market Value of the Shares at the
time such vesting occurs. The Recipient further understands, however, that if
Shares with respect to which an election under Section 83(b) has been made are
forfeited to the Corporation, such forfeiture will be treated as a sale on
which there is realized a loss equal to the excess (if any) of the amount paid
(or zero if no payment is made) by the Recipient for the forfeited Shares over
the amount realized (if any) upon their forfeiture.  If the Recipient has paid nothing for the
forfeited Shares and has received no payment upon their forfeiture, the
Recipient understands that he will be unable to recognize any loss on the
forfeiture of the Shares even though the Recipient incurred a tax liability by
making an election under Section 83(b).  

 

                                                                                                (b)
                              The
Recipient understands that he should consult with his tax advisor regarding the
advisability of filing with the Internal Revenue Service an election under
Section 83(b) of the Code, which must be filed no later than thirty (30) days
after the date of the acquisition of the Shares pursuant to this
Agreement.  Failure to file an election
under Section 83(b), if appropriate, may result in adverse tax consequences to
the Recipient.  The Recipient
acknowledges that he has been advised to consult with a tax advisor regarding
the tax consequences to the Recipient of the acquisition of Shares hereunder.  ANY ELECTION UNDER SECTION 83(b) THE
RECIPIENT WISHES TO MAKE MUST BE FILED NO LATER THAN 30 DAYS AFTER THE DATE ON
WHICH THE RECIPIENT ACQUIRES THE SHARES. 
THIS TIME PERIOD CANNOT BE EXTENDED. 
THE RECIPIENT ACKNOWLEDGES THAT TIMELY FILING OF A SECTION 83(b)
ELECTION IS THE RECIPIENT’S SOLE RESPONSIBILITY.  



 2
 









(c)                                The
Recipient will notify the Corporation in writing if he files an election
pursuant to Section 83(b) of the Code. 
The Corporation intends, in the event it does not receive from the
Recipient evidence of such filing, to claim a tax deduction for any amount
which would otherwise be taxable to the Recipient in the absence of such an
election.  




10.                               Plan
Governs.  Notwithstanding anything in
this Agreement to the contrary, the terms of this Agreement shall be subject to
the terms of the Plan, which is incorporated into and forms a part of this
Agreement; and this Agreement is subject to all interpretations, amendments,
rules and regulations promulgated by the Administrator from time to time
pursuant to the Plan.  Except where the
context clearly implies or indicates the contrary, all capitalized terms used
herein shall have the meaning ascribed to them in the Plan.  A copy of the Plan may be obtained by the
Recipient from the office of the Secretary of the Corporation


11.                               Successors,
Assigns and Heirs.  This Agreement
shall be binding upon and inure to the benefit of the parties hereto and the
successors and assigns of the Corporation and the heirs and personal
representatives of the Recipient.


12.                               Governing
Law.  This Agreement shall be
governed by the laws of the State of Delaware applicable to agreements made and
to be performed entirely within such State.


13.                               Amendment.  This Agreement may not be altered,
modified, changed or discharged, except by a writing signed by or on behalf of
both the Corporation and the Recipient.


14.                               Not
A Service Or Employment Contract.  This
Agreement is neither a service nor an employment contract.  Nothing in this Agreement shall be deemed to:
(i) create in any way whatsoever any obligation on the Recipient’s part to
continue any relationship which he might have as an Employee,  Non-Employee Director or Consultant for the
Corporation or any Subsidiary or (ii) obligate the Corporation or any
Subsidiary, or their respective stockholders, boards of directors, officers or
employees to continue any relationship which the Recipient might have as an
Employee, Non-Employee Director or Consultant for the Corporation or
Subsidiary.


15.                               Notices.  Any notices provided for in this Agreement
shall be given in writing and shall be deemed effectively given upon receipt
or, in the case of notices delivered by the Corporation to the Recipient, five
(5) days after deposit in the mail, postage prepaid, addressed to the recipient
at the address specified below or at such other address as the Recipient
hereafter designates by written notice to the Corporation.


16.                               Gender.  Whenever the context requires, words denoting
gender in this Agreement shall include the masculine, feminine and neuter.


*****



 3
 









IN WITNESS
WHEREOF, the parties have signed this Restricted Stock Agreement as of the date
first written above.


	
  

  	
  deCODE genetics, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name: Kari Stefansson

  
	
   

  	
  Title: Chairman and Chief Executive Officer

  



 


 


ATTACHMENTS:


Schedule A:
Vesting Schedule


deCODE genetics,
Inc. 2006 Equity Incentive Plan


	
  RECIPIENT

  
	
   

  
	
   

  	
   

  
	
  Name:

  
	
  Address:

  



 



 4
 









Schedule
A


Vesting Schedule



 5