**Exhibit 10.1**

 

**AMYLIN PHARMACEUTICALS, INC.**

 

**2003 NON-EMPLOYEE DIRECTORS’STOCK OPTION PLAN**

 

**ADOPTED APRIL 2, 2003**

**APPROVED BY STOCKHOLDERS MAY 14,2003**

**EFFECTIVE DATE: APRIL 2, 2003LAST AMENDED: MARCH 16, 2009**

 

**1.**                                      PURPOSESAND RELATIONSHIP WITH THE COMPANY’S 2001 EQUITY INCENTIVE PLAN.

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**(a)****                                 ****Eligible Option Recipients.** The persons eligible for Initial Grants and Annual Grants are theNon-Employee Directors of the Company.

 

**(b)****                                 ****Available Options.** The purpose of the Plan is to provide a means by which Non-EmployeeDirectors may be given an opportunity to benefit from increases in the value ofthe Common Stock through the granting of Nonstatutory Stock Options.

 

**(c)****                                 ****General Purpose.** The Company, by means of the Plan, seeks to retain the services of itsNon-Employee Directors, to secure and retain the services of new Non-EmployeeDirectors and to provide incentives for such persons to exert maximum effortsfor the success of the Company and its Affiliates.

 

**(d)****                                 ****Relationship with theCompany’s 2001 Equity Incentive Plan.**  All Optionsgranted pursuant to the Plan shall be deemed to have been issued under andpursuant to the terms of the Incentive Plan and subject to all the terms andconditions of the Incentive Plan except to the extent otherwise provided for inthe Plan.  In the event that any of theterms or conditions of the Incentive Plan are inconsistent with or in conflictwith any of the terms or conditions of the Plan or the Options, the terms andconditions of the Plan or the Options shall control.

 

**2.**                                      DEFINITIONS.

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**(a)****                                 *****“Affiliate”*** means any parent corporation orsubsidiary corporation of the Company, whether now or hereafter existing, asthose terms are defined in Sections 424(e) and (f), respectively, of theCode.

 

**(b)****                                 *****“Annual Grant”*** means an Option granted annually to allNon-Employee Directors who meet the criteria specified in subsection 6(b) ofthe Plan.

 

**(c)****                                 *****“AnnualMeeting”***means the annual meeting of the stockholders of the Company.

 

**(d)****                                 *****“Board”*** means the Board of Directors of theCompany.

 

**(e)****                                 *****“Changein Control”***means the occurrence of any of the following: (i) any “person,” as suchterm is used in Sections 13(d) and 14(d) of the Exchange Act (otherthan the Company, a subsidiary, an affiliate, or a Company employee benefitplan, including any trustee

 

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of such plan acting astrustee) is or becomes the “beneficial owner” (as defined in Rule 13d-3under the Exchange Act), directly or indirectly, of securities of the Companyrepresenting 50% or more of the combined voting power of the Company’s thenoutstanding securities other than by virtue of a merger, consolidation orsimilar transaction; (ii) there is consummated a sale or other dispositionof all or substantially all of the assets of the Company (other than a sale toan entity where at least 50% of the combined voting power of the votingsecurities of such entity are owned by the stockholders of the Company insubstantially the same proportions as their ownership of the Companyimmediately prior to such sale); (iii) there is consummated a merger,consolidation or similar transaction involving (directly or indirectly) theCompany and, immediately after the consummation of such transaction, thestockholders immediately prior to the consummation of such transaction do notown, directly or indirectly, outstanding voting securities representing morethan 50% of the combined outstanding voting power of the surviving entity insuch transaction or more than 50% of the combined outstanding voting power of theparent of the surviving entity in such transaction.

 

**(f)****                                   *****“Code”*** means the Internal Revenue Code of 1986,as amended.

 

**(g)****                                *****“Common Stock”*** means the common stock of the Company.

 

**(h)****                                *****“Company”*** means Amylin Pharmaceuticals, Inc.,a Delaware corporation.

 

**(i)****                                   *****“Consultant”*** means any person, including an advisor,whether an individual or an entity, (i) engaged by the Company or anAffiliate to render consulting or advisory services and who is compensated forsuch services or (ii) who is a member of the Board of Directors of anAffiliate and who is compensated for such services.  However, the term “Consultant” shall notinclude Directors who are not compensated by the Company for their services asDirectors, and the payment of a director’s fee by the Company for services as aDirector shall not cause a Director to be considered a “Consultant” forpurposes of the Plan.

 

**(j)****                                   *****“Continuous Service”*** means that the Optionholder’s servicewith the Company or an Affiliate, whether as an Employee, Director orConsultant, is not interrupted or terminated. An Optionholder’s Continuous Service shall not be deemed to haveterminated by reason of a change in the capacity in which such Optionholderrenders service to the Company or an Affiliate as an Employee, Consultant orDirector or a change in the entity for which such Optionholder renders suchservice, provided that there is otherwise no interruption or termination ofsuch Optionholder’s Continuous Service. For example, a change in status from a Non-Employee Director of the Companyto a Consultant of an Affiliate or an Employee of the Company will notconstitute an interruption of Continuous Service.  The Board or the chief executive officer ofthe Company, in that party’s sole discretion, may determine whether ContinuousService shall be considered interrupted in the case of any leave of absenceapproved by that party, including sick leave, military leave or any otherpersonal leave.

 

**(k)****                               *****“Director”*** means a member of the Board of Directorsof the Company.

 

**(l)****                                   *****“Employee”*** means any person employed by the Companyor an Affiliate.  A person shall not bedeemed an Employee by reason of such person’s service as a Director and/orpayments of director’s fees to such person.

 

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**(m)****                             *****“ExchangeAct”*** meansthe Securities Exchange Act of 1934, as amended.

 

**(n)****                                *****“Fair Market Value”*** means, as of any date, the value of theCommon Stock determined as follows:

 

**(i)****                                   **If the Common Stock is listed on anyestablished stock exchange or traded on any established market, the Fair MarketValue of a share of Common Stock shall be the closing sales price for suchstock as quoted on such exchange or market (or the exchange or market with thegreatest volume of trading in the Common Stock) on the date of determination,as reported in a source the Board deems reliable.

 

**(ii)****                               **Unless otherwise provided by the Board,if there is no closing sales price for the Common Stock on the date ofdetermination, then the Fair Market Value shall be the closing selling price onthe last preceding date for which such quotation exists.

 

**(iii)****                           **In the absence of such markets for theCommon Stock, the Fair Market Value shall be determined in good faith by theBoard and in a manner that complies with Section 409A and 422 of the Code.

 

**(o)****                                 *****“IncentivePlan”*** meansthe Company’s 2001 Equity Incentive Plan or any successor equity incentive planthereto.

 

**(p)****                                 *****“Initial Grant”*** means an Option granted to aNon-Employee Director who meets the criteria specified in subsection 6(a) ofthe Plan.

 

**(q)****                                 *****“Non-Employee Director”*** means a Director who is not an Employee.

 

**(r)****                                 *****“Nonstatutory Stock Option”*** means an Option not intended to qualifyas an incentive stock option within the meaning of Section 422 of the Codeand the regulations promulgated thereunder.

 

**(s)****                                 *****“Option”*** means a Nonstatutory Stock Optiongranted pursuant to the Plan.

 

**(t)****                                   *****“Optionholder”*** means a person to whom an Option isgranted pursuant to the Plan or, if applicable, such other person who holds anoutstanding Option.

 

**(u)****                                *****“Plan”*** means this Amylin Pharmaceuticals, Inc.2003 Non-Employee Directors’ Stock Option Plan.

 

**(v)****                                  *****“Rule 16b-3”*** means Rule 16b-3 promulgated underthe Exchange Act or any successor to Rule 16b-3, as in effect from time totime.

 

**3.**                                      ADMINISTRATION.

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**(a)****                                 ****Administration by Board.** The Board shall administer the Plan.

 

**(b)****                                 ****Powers of Board.** The Board shall have the power, subject to, and within the limitationsof, the express provisions of the Plan:

 

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**(i)****                                   **To determine the provisions of eachOption to the extent permitted in the Plan.

 

**(ii)****                               **To construe and interpret the Plan andOptions granted under it, and to establish, amend and revoke rules andregulations for its administration.  TheBoard, in the exercise of this power, may correct any defect, omission orinconsistency in the Plan, in a manner and to the extent it shall deemnecessary or expedient to make the Plan fully effective.

 

**(iii)****                           **To amend the Plan as provided in Section 10.

 

**(iv)****                              **Generally, to exercise such powers and toperform such acts as the Board deems necessary or expedient to promote the bestinterests of the Company which are not in conflict with the provisions of thePlan.

 

**(c)****                                 ****Effect ofBoard’s Decision.**  Alldeterminations, interpretations and constructions made by the Board in goodfaith shall not be subject to review by any person and shall be final, bindingand conclusive on all persons.

 

**4.**                                      OPTIONSISSUED UNDER INCENTIVE PLAN.

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All Options granted pursuant to the Plan shall bedeemed to have been issued under the Incentive Plan, and the shares of CommonStock issuable upon exercise of such Options shall be issuable out of theshares reserved for issuance under the Incentive Plan pursuant to Section 4of the Incentive Plan.

 

**5.**                                      ELIGIBILITY.

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The Options as set forth in Section 6automatically shall be granted under the Plan to all Non-Employee Directors inaccordance with the provisions of Section 6.

 

**6.**                                      NON-DISCRETIONARYGRANTS.

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**(a)****                                 ****Initial Grants.** Each person who is elected or appointed by the Board or stockholders ofthe Company for the first time to be a Non-Employee Director subsequent to April 2,2003 and who has not served as a Director at any time during the two-yearperiod immediately preceding the date of such election or appointment,automatically shall, upon the date of his or her initial election orappointment to be a Non-Employee Director, be granted an Initial Grant topurchase thirty thousand (30,000) shares of Common Stock on the terms andconditions set forth herein, which Initial Grant shall be effective as of thedate of such election or appointment.

 

**(b)****                                 ****Annual Grants.** Immediately following each Annual Meeting held after April 2, 2003,each Non-Employee Director automatically shall be granted, effective as of thedate of such Annual Meeting (and in addition to any Initial Grant grantedpursuant to Section 6(a)) an Annual Grant to purchase twenty thousand(20,000) shares of Common Stock on the terms and conditions set forth herein.

 

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**7.**                                      OPTIONPROVISIONS.

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Each Option granted shall include (throughincorporation of provisions hereof by reference in the Option or otherwise) thesubstance of each of the following provisions, and may include other provisionsto the extent those provisions are permitted or required by the Incentive Planand are not inconsistent with or in conflict with the terms and conditions ofthe Plan:

 

**(a)****                                 ****Term.** No Option shall be exercisable after the expiration of seven (7) yearsfrom the date it was granted.

 

**(b)****                                 ****Exercise Price.** The exercise price of each Option shall be one hundred percent (100%) ofthe Fair Market Value of the Common Stock subject to the Option on the date theOption is granted.  Notwithstanding theforegoing, an Option may be granted with an exercise price lower than that setforth in the preceding sentence if such Option is granted pursuant to anassumption or substitution for another option in a manner satisfying theprovisions of Section 424(a) of the Code.

 

**(c)****                                 ****Vesting Schedule.** The Option shall vest and become exercisable as follows:

 

**(i)****                                   **Initial Grants:  (A) if the applicable Optionholder’sContinuous Service continues through the date that is one (1) year fromthe date of grant thereof (the “Anniversary Date”), such Option shall becomeexercisable as of the Anniversary Date with respect to one-fourth (1/4th) ofthe total number of shares of Common Stock subject to such Option; and (B) overthe thirty-six month period following the Anniversary Date, for so long as theapplicable Optionholder’s Continuous Service continues, such Option shallbecome exercisable with respect to an additional one forty-eighth (1/48) of thetotal number of shares of Common Stock subject to such Option on each monthlyanniversary of the Anniversary Date until such Option has become fullyexercisable.

 

**(ii)****                               **Annual Grants:  such Option shall become exercisable in equalmonthly increments over a period of one (1) year from the date of grant ofsuch Option for so long as the applicable Optionholder’s Continuous Service continues.

 

**8.**                                      MISCELLANEOUS.

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The Board shall have thepower to accelerate the time at which an Option may first be exercised or thetime during which an Option or any part thereof will vest in accordance withthe Plan, notwithstanding the provisions in the Option stating the time atwhich it may first be exercised or the time during which it will vest.

 

**9.**                                      ADJUSTMENTSUPON CHANGES IN STOCK.

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**(a)****                                 ****CapitalizationAdjustments.**  If any change is made in the Common Stocksubject to the Incentive Plan, or subject to any Option, without the receipt ofconsideration by the Company (through merger, consolidation, reorganization,recapitalization, reincorporation, stock dividend, dividend in property otherthan cash, stock split, liquidating dividend, combination of shares, exchangeof shares, change in corporate structure or other transaction not involving thereceipt of consideration by the Company), the Plan will be appropriatelyadjusted in the class(es)

 

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of securities subject toOptions granted under the Plan and the number of securities to be issued uponthe exercise of Options granted pursuant to subsection 6(a) and 6(b), andthe outstanding Options will be appropriately adjusted in the class(es) andnumber of securities and price per share of Common Stock subject to suchoutstanding Options.  The Board shallmake such adjustments, and its determination shall be final, binding andconclusive.  (The conversion of anyconvertible securities of the Company shall not be treated as a transaction “withoutreceipt of consideration” by the Company.)

 

**(b)****                                 ****Dissolution orLiquidation. **In the event of a dissolution orliquidation of the Company, then all outstanding Options shall terminateimmediately prior to such event.

 

**(c)****                                 ****Asset Sale, Merger,Consolidation or Reverse Merger. **In the event of (i) a sale, lease orother disposition of all or substantially all of the assets of the Company, (ii) amerger or consolidation in which the Company is not the surviving corporationor (iii) a reverse merger in which the Company is the survivingcorporation but the shares of Common Stock outstanding immediately precedingthe merger are converted by virtue of the merger into other property, whetherin the form of securities, cash or otherwise (individually, a “CorporateTransaction”), then any surviving corporation or acquiring corporation shallassume any Options outstanding under the Plan or shall substitute similaroptions (including options to acquire the same consideration paid to thestockholders in the Corporate Transaction for those outstanding under thePlan).  In the event any survivingcorporation or acquiring corporation refuses to assume such Options or tosubstitute similar options for those outstanding under the Plan, then withrespect to Options held by Optionholders whose Continuous Service has notterminated, the vesting of such Options (and, if applicable, the time duringwhich such Options may be exercised) shall be accelerated in full, and theOptions shall terminate if not exercised (if applicable) at or prior to theCorporate Transaction.  With respect toany other Options outstanding under the Plan, such Options shall terminate ifnot exercised (if applicable) prior to the Corporate Transaction.

 

**(d)****                                 ****Change in Control.** Notwithstanding any other provisions of the Plan to the contrary, if aChange in Control occurs and the Optionholder’s Continuous Service has notterminated prior to the effective date of such Change in Control, then thevesting and exercisability of the shares of Common Stock subject to theOptionholder’s Options shall be accelerated in full as of the effective date ofthe Change in Control.  Following suchChange in Control (other than a Change in Control resulting from a plan ofcomplete dissolution or liquidation of the Company) and notwithstanding anyother provision of the Plan to the contrary and provided that the Optionholder’sContinuous Service has not terminated prior to the effective date of the Changein Control, then the Optionholder’s Options shall expire on the earliest of (i) 12months following the effective date of such Change in Control or (ii) theexpiration of the term of the Option.

 

**(e)****                                 ****Parachute Payments.** If any payment or benefit the Optionholder would receive pursuant to aChange in Control from the Company or otherwise would (i) constitute a “parachutepayment” within the meaning of Section 280G of the Code, or any comparablesuccessor provisions, and (ii) but for this subsection, be subject to theexcise tax imposed by Section 4999 of the Code, or any comparablesuccessor provisions (the “Excise Tax”), then such payment or benefit shall beeither (x) provided to the Optionholder in full or (y) provided tothe

 

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Optionholder as to suchlesser extent which would result in no portion of the payment or benefit beingsubject to the Excise Tax, whichever of the foregoing amounts, when taking intoaccount applicable federal, state, local and foreign income and employmenttaxes, the Excise Tax, and any other applicable taxes (all computed at thehighest applicable marginal rate), results in the receipt by the Optionholder,on an after-tax basis, of the greatest amount of payment or benefits,notwithstanding that all or some portion of such payment or benefits may betaxable under the Excise Tax.  Unless theCompany and the Optionholder otherwise agree in writing, any determinationrequired under this subsection shall be made in writing in good faith by theaccounting firm engaged by the Company for general audit purposes as of the dayprior to the effective date of the Change in Control.  If the accounting firm so engaged by theCompany is serving as accountant or auditor for the individual, entity or groupeffecting the Change in Control, the Company shall appoint a differentnationally recognized accounting firm to make the determinations requiredhereunder (the accounting firm so engaged pursuant to the two immediatelypreceding sentences, the ***“Accountants”***).  If a reduction in payments or benefitsconstituting “parachute payments” is necessary so that the payments or benefitsequal the amount determined pursuant to clauses (x) and (y) above,reduction shall occur in the following order unless the Optionholder elects inwriting a different order (*provided, however,*that such election shall be subject to Company approval if made on or after theeffective date of the event that triggers the payments or benefits): reductionof cash payments; cancellation of accelerated vesting of Options; reduction ofemployee benefits.  In the event thatacceleration of vesting of Options is to be reduced, such acceleration ofvesting shall be cancelled in the reverse order of the date of grant of theOptionholder’s Options unless the Optionholder elects in writing a differentorder for cancellation.  For purposes ofmaking the calculations required by this subsection, the Accountants may makereasonable assumptions and approximations concerning applicable taxes and mayrely on reasonable, good faith interpretations concerning the application ofthe Code, and other applicable legal authority. The Company and the Optionholder shall furnish to the Accountants suchinformation and documents as the Accountants may reasonably request in order tomake a determination under this subsection. The Company shall bear all costs the Accountants may reasonably incur inconnection with any calculations contemplated by this subsection.

 

If, notwithstanding anyreduction described in this subsection, the Internal Revenue Service (the ***“IRS”***) determinesthat the Optionholder is liable for the Excise Tax as a result of the receiptof a payment or benefits as described above, then the Optionholder shall beobligated to pay back to the Company, within thirty (30) days after a final IRSdetermination or in the event that the Optionholder challenges the final IRSdetermination, a final judicial determination, a portion of the payment orbenefits equal to the ***“Repayment Amount.”***  The Repayment Amount with respect to thepayment or benefits shall be the smallest such amount, if any, as shall berequired to be paid to the Company so that the Optionholder’s net after-taxproceeds with respect to any payment or benefits (after taking into account thepayment of the Excise Tax and all other applicable taxes imposed on suchpayment or benefits) shall be maximized. The Repayment Amount with respect to the payment or benefits shall bezero if a Repayment Amount of more than zero would not result in the Optionholder’snet after-tax proceeds with respect to the payment or benefits beingmaximized.  If the Excise Tax is noteliminated pursuant to this paragraph, the Optionholder shall pay the ExciseTax.

 

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Notwithstanding any otherprovision of this subsection, if (i) there is a reduction in a payment orbenefits as described in this subsection, (ii) the IRS later determinesthat the Optionholder is liable for the Excise Tax, the payment of which wouldresult in the maximization of the Optionholder’s net after-tax proceeds(calculated as if the Optionholder’s payment or benefits had not previouslybeen reduced), and (iii) the Optionholder pays the Excise Tax, then theCompany shall pay to the Optionholder those benefits which were reducedpursuant to this subsection contemporaneously or as soon as administrativelypossible after the Optionholder pays the Excise Tax so that the Optionholder’snet after-tax proceeds with respect to the payment or benefits is maximized.

 

If the Optionholdereither (i) brings any action to enforce rights pursuant to thissubsection, or (ii) defends any legal challenge to its rights hereunder,the Optionholder shall be entitled to recover attorneys’ fees and costsincurred in connection with such action, regardless of the outcome of suchaction; provided, however, that, in the event such action is commenced by theOptionholder, the court finds the claim was brought in good faith.

 

**10.**                               AMENDMENTOF THE PLAN AND OPTIONS.

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**(a)****                                 ****Amendment of Plan.** The Board at any time, and from time to time, may amend the Plan.  However, except as provided in Section 9relating to adjustments upon changes in Common Stock, no amendment shall beeffective unless approved by the stockholders of the Company to the extentstockholder approval is necessary to satisfy the requirements of Rule 16b-3or any Nasdaq or securities exchange listing requirements.

 

**(b)****                                 ****Stockholder Approval.** The Board may, in its sole discretion, submit any other amendment to thePlan for stockholder approval.

 

**(c)****                                 ****No Impairment of Rights.** Rights under any Option granted before amendment of the Plan shall notbe impaired by any amendment of the Plan unless (i) the Company requeststhe consent of the Optionholder and (ii) the Optionholder consents inwriting.

 

**(d)****                                 ****Amendment of Options.** The Board at any time, and from time to time, may amend the terms of anyone or more Options; provided, however, that the rights under any Option shallnot be impaired by any such amendment unless (i) the Company requests theconsent of the Optionholder and (ii) the Optionholder consents in writing.

 

**11.**                               TERMINATIONOR SUSPENSION OF THE PLAN.

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**(a)****                                 ****Plan Term.** The Board may suspend or terminate the Plan at any time.  Unless sooner terminated, the Plan shallterminate on the day before the tenth (10th) anniversary of the date the Planis adopted by the Board or approved by the stockholders of the Company,whichever is earlier.  No Options may begranted under the Plan while the Plan is suspended or after it is terminated.

 

**(b)****                                 ****No Impairment of Rights.** Suspension or termination of the Plan shall not impair rights andobligations under any Option granted while the Plan is in effect except withthe written consent of the Optionholder.

 

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**12.**                               EFFECTIVEDATE OF PLAN.

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The Plan shall become effective as determined by theBoard, but no Option shall be exercised unless and until the Plan has beenapproved by the stockholders of the Company, which approval shall be withintwelve (12) months before or after the date the Plan is adopted by the Board.

 

**13.**                               CHOICE OFLAW.

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The law of the State of California shall govern all questionsconcerning the construction, validity and interpretation of this Plan withoutregard to such state’s conflict of laws rules.

 

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