**Exhibit10.3**

**RESTRICTEDSTOCK AGREEMENT**

THIS RESTRICTEDSTOCK 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 theterms and conditions of this Agreement and subject to the provisions of theCorporation’s 2006 Equity Incentive Plan, as amended from time to time (the “Plan”);

NOW, THEREFORE, itis agreed as follows:

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

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

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

## **4.****                                      Releaseof Shares.** Within thirty (30) daysof vesting, the Corporation shall deliver to the Recipient a certificateevidencing the ownership of all of the Shares that have so vested (the “VestedShares”) or, at the request of the Recipient, shall arrange for a transfer ofthe Vested Shares in book entry form to a brokerage account designated by theRecipient.

## **5.****                                      Forfeiture.**  In the event of the Recipient’s terminationof 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 anyShares other than Vested Shares, which shall be freely transferable, subject toapplicable securities laws.

  

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**7.****                                      Rightsas a Stockholder.** The Recipientshall not have any rights as a stockholder, including, without limitation, theright to vote and to receive dividends, with respect to any Shares other thanVested Shares.

**8.****                                      InvestmentPurpose**.  The Recipient representsthat the Shares are being acquired for investment and that the Recipient has nopresent intention to transfer, sell or otherwise dispose of the Shares, exceptin compliance with applicable securities laws, and the parties agree that theShares are being acquired in accordance with and subject to the terms,provisions and conditions of this Agreement.

**9.****                                      ElectionUnder Section 83(b) of the Code.**                                                                                                 (a)                               TheRecipient understands that Section 83 of the United States Internal RevenueCode of 1986, as amended (the “Code”) taxes as ordinary income the differencebetween the amount paid for the Shares (or zero is no payment is made for theShares) and the Fair Market Value of the Shares as of the date on which theShares are substantially vested, within the meaning of Section 83. TheRecipient understands that he may elect to have his taxable income determinedat the time he acquires the Shares rather than when and as the Shares havevested by filing an election under Section 83(b) of the Code with the InternalRevenue Service no later than thirty (30) days after the date of acquisition ofthe Shares. The Recipient understands that failure to make a timely filingunder Section 83(b) will result in his recognition of ordinary income, as theShares vest, on the difference between the purchase price, (or zero if nopayment is made for the Shares) and the Fair Market Value of the Shares at thetime such vesting occurs. The Recipient further understands, however, that ifShares with respect to which an election under Section 83(b) has been made areforfeited to the Corporation, such forfeiture will be treated as a sale onwhich 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 overthe amount realized (if any) upon their forfeiture.  If the Recipient has paid nothing for theforfeited Shares and has received no payment upon their forfeiture, theRecipient understands that he will be unable to recognize any loss on theforfeiture of the Shares even though the Recipient incurred a tax liability bymaking an election under Section 83(b).                                                                                                   (b)                              TheRecipient understands that he should consult with his tax advisor regarding theadvisability of filing with the Internal Revenue Service an election underSection 83(b) of the Code, which must be filed no later than thirty (30) daysafter the date of the acquisition of the Shares pursuant to thisAgreement.  Failure to file an electionunder Section 83(b), if appropriate, may result in adverse tax consequences tothe Recipient.  The Recipientacknowledges that he has been advised to consult with a tax advisor regardingthe tax consequences to the Recipient of the acquisition of Shares hereunder.  ANY ELECTION UNDER SECTION 83(b) THERECIPIENT WISHES TO MAKE MUST BE FILED NO LATER THAN 30 DAYS AFTER THE DATE ONWHICH 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.  

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

**10.****                               PlanGoverns. **Notwithstanding anything inthis Agreement to the contrary, the terms of this Agreement shall be subject tothe terms of the Plan, which is incorporated into and forms a part of thisAgreement; and this Agreement is subject to all interpretations, amendments,rules and regulations promulgated by the Administrator from time to timepursuant to the Plan.  Except where thecontext clearly implies or indicates the contrary, all capitalized terms usedherein shall have the meaning ascribed to them in the Plan.  A copy of the Plan may be obtained by theRecipient from the office of the Secretary of the Corporation

**11.****                               Successors,Assigns and Heirs.**  This Agreementshall be binding upon and inure to the benefit of the parties hereto and thesuccessors and assigns of the Corporation and the heirs and personalrepresentatives of the Recipient.

**12.****                               GoverningLaw.**  This Agreement shall begoverned by the laws of the State of Delaware applicable to agreements made andto 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 ofboth the Corporation and the Recipient.

**14.****                               NotA Service Or Employment Contract. **ThisAgreement 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 tocontinue any relationship which he might have as an Employee,  Non-Employee Director or Consultant for theCorporation or any Subsidiary or (ii) obligate the Corporation or anySubsidiary, or their respective stockholders, boards of directors, officers oremployees to continue any relationship which the Recipient might have as anEmployee, Non-Employee Director or Consultant for the Corporation orSubsidiary.

**15.****                               Notices.**  Any notices provided for in this Agreementshall be given in writing and shall be deemed effectively given upon receiptor, 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 recipientat the address specified below or at such other address as the Recipienthereafter designates by written notice to the Corporation.

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

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IN WITNESSWHEREOF, the parties have signed this Restricted Stock Agreement as of the datefirst 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:  |

 

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**ScheduleA**

**Vesting Schedule**

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