Tularik Inc. Amended and Restated 1997 Non-Employee Directors' Stock Option Plan



 EXHIBIT 10.3 
  
 TULARIK INC. 
  
 AMENDED AND RESTATED 
  
 1997 NON-EMPLOYEE DIRECTORS’ STOCK OPTION PLAN 
  
 ORIGINALLY ADOPTED ON JANUARY 30, 1997 
  
 ORIGINALLY APPROVED BY SHAREHOLDERS ON APRIL 24, 1997 
  
 AMENDMENT ADOPTED ON FEBRUARY 14, 2002 
  
 AMENDMENT APPROVED BY STOCKHOLDERS ON APRIL 18, 2002 
  

	 	1.	PURPOSE. 

  
 (a) The purpose of the 1997 Non-Employee Directors’ Stock Option Plan (the “Plan”) is to provide a means by which each director of
Tularik Inc., a Delaware corporation (the “Company”) who is not otherwise at the time of grant an employee of the Company or of any Affiliate of the Company (each such person being hereafter referred to as a “Non- Employee
Director”) will be given an opportunity to purchase stock of the Company. 
  
 (b) The word “Affiliate” as used in the Plan means any parent corporation or subsidiary corporation of the Company as those terms are defined in Sections 424(e) and (f), respectively, of the Internal
Revenue Code of 1986, as amended from time to time (the “Code”). 
  
 (c) The Company, by means of the Plan, seeks to retain the services of persons now serving as Non-Employee Directors of the Company, to secure and retain the services of persons 

  









 
capable of serving in such capacity and to provide incentives for such persons to exert maximum efforts for the success of the Company. 
  

	 	2.	ADMINISTRATION. 

  
 (a) The Plan shall be administered by the Board of Directors of the Company (the “Board”) unless and until the Board delegates
administration to a committee, as provided in subparagraph 2(b). 
  
 (b) The Board may delegate administration of the Plan to a committee composed of not fewer than two (2) members of the Board (the “Committee”). If administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore possessed by the Board, subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may
abolish the Committee at any time and revest in the Board the administration of the Plan. 
  

	 	3.	SHARES SUBJECT TO THE PLAN. 

  
 (a) Subject to the provisions of Section 10 relating to adjustments upon changes in stock, the stock that may be sold pursuant to options granted
under the Plan shall not exceed in the aggregate Seven Hundred Thousand (700,000) shares of the Company’s common stock. If any option granted under the Plan shall for any reason expire or otherwise terminate without having been exercised in
full, the stock not purchased under such option shall again become available for option grants under the Plan. 
  

 2 









	 	(b)	The stock subject to the Plan may be unissued shares or reacquired shares, bought on the market or otherwise. 

  

	 	4.	ELIGIBILITY. 

  
 Options shall be granted only to Non-Employee Directors of the Company. 
  

	 	5.	NON-DISCRETIONARY GRANTS. 

  
 (a) Upon the date of the approval of the Plan by the Compensation Committee of the Board (the “Adoption Date”), each person who is then a
Non-Employee Director, and not already a holder of one or more options granted by the Company to purchase the Company’s common stock, automatically shall be granted an option to purchase twenty-five thousand (25,000) shares of common stock of
the Company on the terms and conditions set forth herein. 
  
 (b) Each person who is, after the Adoption Date, elected for the first time to be a Non-Employee Director, and not already a holder of options to purchase the Company’s common stock, automatically shall, upon the date of his or
her initial election to be a Non-Employee Director by the Board or the shareholders of the Company, be granted an option to purchase twenty-five thousand (25,000) shares of common stock of the Company on the terms and conditions set forth herein.

  
 (c) On the date of the Company’s annual meeting of
shareholders in each year, commencing with the Company’s annual meeting of shareholders occurring in 1997, each person 

  

 3 








 
who is then a Non-Employee Director and was a Non-Employee Director on the last day of the prior calendar year automatically shall be granted an option to
purchase Ten Thousand (10,000) shares of common stock of the Company on the terms and conditions set forth herein. 
  

	 	6.	OPTION PROVISIONS. 

  
 Each option shall be subject to the following terms and conditions: 
  
 (a) The term of each option commences on the date it is granted and, unless sooner terminated as set forth herein,
expires on the date (“Expiration Date”) ten (10) years from the date of grant. If the optionholder’s continuous service as a Non-Employee Director or employee of or consultant to the Company or any Affiliate terminates for any reason
or for no reason, the option shall terminate on the earlier of the Expiration Date or the date three (3) months following the date of termination of all such service; provided, however, that if such termination of service is due to (i) the
optionholder’s death, the option shall terminate on the earlier of the Expiration Date or six (6) months following the date of the optionholder’s death; or (ii) the optionholder’s disability, the option shall terminate on the earlier
of the Expiration Date or six (6) months following the date of the optionholder’s disability (for purposes of this subparagraph 6(a), “disability” shall mean total and permanent disability as defined in Section 22(e)(3) of the Code).
If the exercise of the option following the termination of the optionholder’s continuous service as a Non-Employee Director or employee of or consultant to the Company or any Affiliate (other than upon the optionholder’s death or
disability) would result in liability under Section 16(b) of 

  

 4 








 
the Exchange Act, then the option shall terminate on the earlier of (i) the expiration of the term of the option set forth in the option agreement, or (ii)
the tenth (10th) day after the last date on which such exercise would result in such liability under Section 16(b) of the Exchange Act. In any and all circumstances, an option may be exercised following termination of the optionholder’s
continuous service as a Non-Employee Director or employee of or consultant to the Company or any Affiliate only as to that number of shares as to which it was exercisable as of the date of termination of all such service under the provisions of
subparagraph 6(e). 
  
 (b) The exercise price of each
option shall be one hundred percent (100%) of the fair market value of the stock subject to such option on the date such option is granted. 
  
 (c) Payment of the exercise price is due in full upon any exercise. The optionholder may elect to make payment of the exercise price under one of
the following alternatives: 
  
 (i)
Payment of the exercise price per share in cash or by check at the time of exercise; or 
  
 (ii) Provided that at the time of the exercise the Company’s common stock is publicly traded and quoted regularly in the Wall
Street Journal, payment by delivery of shares of common stock of the Company already owned by the optionholder, held for the period required to avoid a charge to the Company’s reported earnings, and owned free and clear of any liens, claims,
encumbrances or security interest, which common stock shall be valued at its fair market value on the date preceding the date of exercise; or 
  

 5 








 (iii) Payment by a combination of the methods of payment specified in
subparagraphs 6(c)(i) and 6(c)(ii) above. 
  
 Notwithstanding the foregoing, this option may be exercised pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board which results in the receipt by the Company of payment in cash or by check either
prior to the issuance of shares of the Company’s common stock or pursuant to the terms of irrevocable instructions issued by the optionholder prior to the issuance of shares of the Company’s common stock. 
  
 (d) An option shall be transferable (1) by will, (2) by the laws of
descent and distribution, (3) to the spouse, children, lineal ancestors and lineal descendants of the optionholder (or to a trust created solely for the benefit of the optionholder and the foregoing persons) or to an organization exempt from
taxation pursuant to Section 501(c)(3) of the Code or to which tax deductible charitable contributions may be made under Section 170 of the Code (excluding such organizations classified as private foundations under applicable regulations and
rulings) in order to implement the estate planning objectives of the optionholder or (4) to such other persons as may be permitted by the Board and expressly provided for under the terms of the optionholder’s option agreement. Nothing in this
subparagraph 6(d) shall permit the transfer of some or all of an option granted under the Plan to the spouse of an optionholder upon the dissolution of such optionholder’s marriage without the express written consent of the Board, which consent
may be extended or withheld in the complete and sole discretion of the Board. 
  

 6 








 The optionholder may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a
third party who, in the event of the death of the optionholder, shall thereafter be entitled to exercise the option. 
  
 (e) The option shall become exercisable in installments over a period of four (4) years from the date of grant at the rate of twenty-five percent
(25%) in equal annual installments commencing on the date one year after the date of grant of the option, provided that the optionholder has, during the entire period prior to such vesting date, continuously served as a Non-Employee Director or
employee of or consultant to the Company or any Affiliate of the Company, whereupon such option shall become fully exercisable in accordance with its terms with respect to that portion of the snares represented by that installment. 
  
 (f) The Company may require any optionholder, or any person to whom an
option is transferred under subparagraph 6(d), as a condition of exercising any such option: (i) to give written assurances satisfactory to the Company as to the optionholder’s, or the optionholder’s professional advisors (who are
unaffiliated with and who are not directly or indirectly compensated by the Company or any Affiliate), knowledge and experience in financial and business matters; and (ii) to give written assurances satisfactory to the Company stating that such
person is acquiring the stock subject to the option for such person’s own account, unaccompanied by the publication of any advertisement, and not with any present intention of selling or otherwise distributing the stock. These requirements, and
any assurances given pursuant to such 

  

 7 








 
requirements, shall be inoperative if (i) the issuance of the shares upon the exercise of the option has been registered under a then-currently-effective
registration statement under the Securities Act of 1933, as amended (the “Securities Act”) and the shares otherwise meet the requirements for exemption under Section 25101 of the California Corporations Code, or (ii) as to any particular
requirement, a determination is made by counsel for the Company that such requirement need not be met in the circumstances under the then-applicable securities laws. The Company may require any optionholder to provide such other representations,
written assurances or information which the Company shall determine is necessary, desirable or appropriate to comply with applicable securities laws as a condition of granting an option to the optionholder or permitting the optionholder to exercise
the option. The Company may, upon advice of counsel to the Company, place legends on stock certificates issued under the Plan as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not
limited to, legends restricting the transfer of the stock. 
  
 (g) Notwithstanding anything to the contrary contained herein, an option may not be exercised unless the shares issuable upon exercise of such option are then registered under the Securities Act or, if such shares are not then so
registered, the Company has determined that such exercise and issuance would be exempt from the registration requirements of the Securities Act. 
  
 (h) The Company (or a representative of the underwriters) may, in connection with the first underwritten registration of the offering of any
securities of the Company under the 

  

 8 








 
Securities Act, require that any optionholder not sell or otherwise transfer or dispose of any shares of common stock or other securities of the Company
during such period (not to exceed one hundred eighty (180) days) following the effective date of the registration statement of the Company filed under the Securities Act as may be requested by the Company or the representative of the underwriters.

  
 (i) The option may, but need not, include a provision
whereby the optionholder may elect at any time while providing continuous service as a Non-Employee Director or employee of or consultant to the Company or any Affiliate to exercise the option as to any part or all of the shares subject to the
option prior to the full vesting of the option. Any unvested shares so purchased may be subject to a repurchase right in favor of the Company or to any other restriction the Board determines to be appropriate. 
  

	 	7.	COVENANTS OF THE COMPANY. 

  
 (a) During the terms of the options granted under the Plan, the Company shall keep available at all times the number of shares of stock required to
satisfy such options. 
  
 (b) The Company shall seek
to obtain from each regulatory commission or agency having jurisdiction over the Plan such authority as may be required to issue and sell shares of stock upon exercise of the options granted under the Plan; provided, however, that this
undertaking shall not require the Company to register under the Securities Act, or any other applicable or available securities laws, either the Plan, any option granted under the Plan or any 

  

 9 








 
stock issued or issuable pursuant to any such option. If, after reasonable efforts, the Company is unable to obtain from any such regulatory commission or
agency the authority which counsel for the Company deems necessary for the lawful issuance and sale of stock under the Plan, the Company shall be relieved from any liability for failure to issue and/or sell stock upon exercise of such options.

  

	 	8.	USE OF PROCEEDS FROM STOCK. 

  
 Proceeds from the sale of stock pursuant to options granted under the Plan shall constitute general funds of the Company. 
  

	 	9.	MISCELLANEOUS. 

  
 (a) Neither an optionholder nor any person to whom an option is transferred under paragraph 6(d) shall be deemed to be the holder of, or to have
any of the rights of a holder with respect to, any shares subject to such option unless and until such person has satisfied all requirements for exercise of the option pursuant to its terms. 
  
 (b) Throughout the term of any option granted pursuant to the Plan,
the Company shall make available to the holder of such option, not later than one hundred twenty (120) days after the close of each of the Company’s fiscal years during the option term, upon request, such financial and other information
regarding the Company as comprises the annual report to the shareholders of the Company provided for in the bylaws of the Company and such other information regarding the Company as the holder of such option may reasonably request. This 

  

 10 








 
paragraph 9(b) shall not apply (i) after the first underwritten registration of the offering of any securities of the Company under the Securities Act, or
(ii) when issuance is limited to key persons whose duties in connection with the Company assure them access to equivalent information. 
  
 (c) Nothing in the Plan or in any instrument executed pursuant thereto shall confer upon any Non-Employee Director any right to continue in the
service of the Company or any Affiliate in any capacity or shall affect any right of the Company, its Board or stockholders or any Affiliate to remove any Non-Employee Director pursuant to the Company’s bylaws and the provisions of the
California Corporations Code (or the applicable laws of the Company’s state of incorporation if the Company’s state of incorporation should change in the future). 
  
 (d) No Non-Employee Director, individually or as a member of a group, and no beneficiary or other person claiming
under or through him, shall have any right, title or interest in or to any option reserved for the purposes of the Plan except as to such shares of common stock, if any, as shall have been reserved for him pursuant to the term of an option granted
to him under the Plan. 
  
 (e) In connection with each
option made pursuant to the Plan, it shall be a condition precedent to the Company’s obligation to issue or transfer shares to a Non-Employee Director, or to evidence the removal of any restrictions on transfer, that such Non-Employee Director
make arrangements satisfactory to the Company to insure that the amount of any federal or other 

  

 11 








 
withholding tax required to be withheld with respect to such sale or transfer, or such removal or lapse, is made available to the Company for timely payment
of such tax. 
  
 (f) As used in this Plan, “fair
market value” means, as of any date, the value of the common stock of the Company determined as follows: 
  
 (i) If the common stock is listed on any established stock exchange or a national market system, including without limitation the
National Market System of the National Association of Securities Dealers, Inc. Automated Quotation (“NASDAQ”) System, the Fair Market Value of a share of common stock shall be the closing sales price for such stock (or the closing bid, if
no sales were reported) as quoted on such system or exchange (or the exchange with the greatest volume of trading in common stock) on the last market trading day prior to the day of determination, as reported in the Wall Street Journal or such other
source as the Board deems reliable; 
  
 (ii) If the common stock is quoted on the NASDAQ System (but not on the National Market System thereof) or is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a share of
common stock shall be the mean between the bid and asked prices for the common stock on the last market trading day prior to the day of determination, as reported in the Wall Street Journal or such other source as the Board deems reliable;

  
 (iii) In the absence of an established
market for the common stock, the Fair Market Value shall be determined in good faith by the Board. 
  

 12 









	 	10.	ADJUSTMENTS UPON CHANGES IN STOCK. 

  
 (a) If any change is made in the stock subject to the Plan, or subject to any option granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of
consideration by the Company), the Plan and outstanding options will be appropriately adjusted in the class(es) and maximum number of shares subject to the Plan and the class(es) and number of shares and price per share of stock subject to
outstanding options. Such adjustments shall be made by the Board, the determination of which shall be final, binding and conclusive. (The conversion of any convertible securities of the Company shall not be treated as a “transaction not
involving the receipt of consideration by the Company.”) 
  
 (b) In the event of: (1) a dissolution, liquidation or sale of all or substantially all of the assets of the Company; (2) a merger or consolidation in which the Company is not the surviving corporation; (3) a reverse merger in which
the Company is the surviving corporation but the shares of the Company’s common stock outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise;
(4) the acquisition by any person, entity or group within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or any 

  

 13 








 
comparable successor provisions (excluding any employee benefit plan, or related trust, sponsored or maintained by the Company or any Affiliate of the
Company) of the beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act, or comparable successor rule) of securities of the Company representing at least fifty percent (50%) of the combined voting power entitled to
vote in the election of directors; or (5) at the time individuals who, as of the first date as of which the Company has a class of equity securities which are actively traded on any established stock exchange or a national market system (including
NASDAQ), constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to such date, whose election or nomination for election by
the Company’s stockholders was approved by a vote of at least a majority of the directors comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual
or threatened election contest relating to the election of Directors of the Company, as such terms are used in Rule 14a-l1 of Regulation 14A promulgated under the Exchange Act) shall be, for purposes of the Plan, considered as though such person
were a member of the Incumbent Board, then: (i) any surviving corporation or acquiring corporation shall assume any options outstanding under the Plan or shall substitute similar options (including an option to acquire the same consideration paid to
the shareholders in the transaction described in this paragraph 10(b)) for those outstanding under the Plan, or (ii) in the 

  

 14 








 
event any surviving corporation or acquiring corporation refuses to assume such options or to substitute similar options for those outstanding under the
Plan, then the vesting of such options (and, if applicable, the time during which such options may be exercised) shall be accelerated prior to such event and the options terminated if not exercised (if applicable) after such acceleration and at or
prior to such event. 
  

	 	11.	AMENDMENT OF THE PLAN. 

  
 (a) The Board at any time, and from time to time, may amend the Plan and/or some or all outstanding options granted under the Plan; provided,
however, that except as provided in Section 10 relating to adjustments upon changes in stock, no amendment shall be effective unless approved by the stockholders of the Company within twelve (12) months before or after the adoption of the
amendment, where the amendment will: 
  
 (i) Increase the number of shares which may be issued under the Plan; or 
  
 (ii) Modify the Plan in any other way if such modification requires stockholder approval in order for the Plan to comply with the
requirements of Rule 16b-3 promulgated under the Exchange Act. 
  
 (b) Rights and obligations under any option granted before any amendment of the Plan or an outstanding option shall not be impaired by such amendment unless (i) the Company requests the consent of the person to whom the option was
granted and (ii) such person consents in writing. 
  

 15 









	 	12.	TERMINATION OR SUSPENSION OF THE PLAN. 

  
 (a) The Board may suspend or terminate the Plan at any time. Unless sooner terminated, the Plan shall terminate at the time that all options
granted under the Plan are fully vested and either have been fully exercised or have expired. No options may be granted under the Plan while the Plan is suspended or after it is terminated. 
  
 (b) Rights and obligations under any option granted while the Plan is
in effect shall not be impaired by suspension or termination of the Plan, except with the consent of the person to whom the option was granted, which consent shall be in writing. 
  

	 	13.	EFFECTIVE DATE OF PLAN; CONDITIONS OF EXERCISE. 

  
 (a) The Plan shall become effective upon adoption by the Board of Directors, subject to the condition subsequent that the Plan is approved by the
shareholders of the Company. 
  
 (b) No option
granted under the Plan shall be exercised or become exercisable unless and until the condition of paragraph 13(a) above regarding shareholder approval has been met. 
  

 16 








 AMENDMENT TO THE 
  
 TULARIK INC. AMENDED
AND RESTATED 1997 NON-EMPLOYEE DIRECTORS’ STOCK OPTION PLAN 
  
 WHEREAS, pursuant to paragraph 11 of the Tularik Inc. Amended and
Restated 1997 Non-Employee Directors’ Stock Option Plan, as amended (the “Plan”), the Board has the power to amend the Plan, in whole or in part, at any time and from time to time; 
  
 NOW THEREFORE, the Plan is amended effective immediately prior to the
effective time of the Merger, as follows: 
  

	 	1.	Section 1(a) hereby is amended in its entirety to read as follows: 

  

	 	(a)	The purpose of the 1997 Non-Employee Directors’ Stock Option Plan (the “Plan”) is to provide a means by which each director of Tularik Inc., a Delaware corporation,
or any successor or surviving corporation (or parent or subsidiary of such successor or surviving corporation) that assumes the Plan (the “Company”) who is not otherwise at the time of grant an employee of the Company or of any Affiliate
of the Company (each such person being hereafter referred to as a “Non-Employee Director”) will be given an opportunity to purchase stock of the Company. 

  

	 	2.	Section 6(a), as amended on March 28, 2004, hereby is amended to replace the final sentence thereof with the following: 

  
 An option may be exercised following termination of the optionholder’s
continuous service as a Non-Employee Director or employee of or consultant to the Company or any Affiliate only as to that number of shares as to which it was exercisable as of the date of termination of all such service under the provisions of
subparagraph 6(e); provided, however, that notwithstanding the foregoing or anything in the Plan or option agreement to the contrary, the Board, in its sole discretion, may provide, by Board action or otherwise, an optionholder with the right
to continue to vest in an option for a certain period of time following such date of termination (“Continued Vesting Period”), as determined by the Board, and to exercise such option during such Continued Vesting Period and for a certain
period of time following such Continued Vesting Period, as determined by the Board; provided, further, however, that no option may be exercised after its Expiration Date. 
  

	 	3.	Subparagraph 6(e), as amended on March 28, 2004, hereby is amended to replace the final sentence at the end thereof with the following: 

  
 Notwithstanding the foregoing or anything in the Plan to the contrary, (i)
any options granted between the date of the Agreement and Plan of Merger (the “Merger 








 
Agreement”) entered into by the Company, Amgen Inc. and Arrow Acquisition, LLC (“Merger Sub”), pursuant to which the Company will merge with
and into Merger Sub (the “Merger”), and the effective time of such Merger (“New Options”) shall become exercisable to the extent of seventy-five percent (75%) of the shares subject to such New Options on the date that is
thirty-six (36) months after the date of grant (the “First Vesting Date), provided that the optionholder has, during the entire period prior to such First Vesting Date, continuously served as a Non-Employee Director or employee of or consultant
to the Company or any Affiliate of the Company, and shall become exercisable as to the remaining twenty-five percent (25%) of the shares subject to such New Options on the date that is forty-eight (48) months after the date of grant (the
“Second Vesting Date”), provided that the optionholder has, during the entire period prior to such Second Vesting Date, continuously served as a Non-Employee Director or employee of or consultant to the Company or any Affiliate of the
Company, and (ii) with respect to any options other than the New Options, in accordance with subparagraph 6(a), the Board, in its sole discretion, may provide, by Board action or otherwise, an optionholder with the right to continue to vest in an
option during a Continued Vesting Period following termination of the optionholder’s continuous service as a Non-Employee Director or employee of or consultant to the Company or any Affiliate, as determined by the Board.