Document:

10Q Q2 2005 EXHIBIT 10.6

Exhibit 10.6

PHARMACYCLICS, INC.

NON-EMPLOYEE DIRECTORS OPTION ELECTION

 

STOCK OPTION AGREEMENT

 

RECITALS

	Pharmacyclics, Inc. (the "Corporation") has approved and
implemented the 1995 Stock Option Plan (the "Plan") pursuant to which
eligible non-employee members of the Corporation's Board of Directors (the
"Board) are eligible to receive stock option grants in order to provide
such individuals with a meaningful incentive to continue to serve as a member of
the Board.
	Optionee is eligible as a non-employee Board member, and this Agreement is
executed pursuant to, and is intended to carry out the purposes of, the Plan in
connection with a grant of a stock option to purchase shares of the
Corporation's common stock ("Common Stock") under the Plan.
	The granted option is intended to be a non-statutory option which does
not meet the requirements of Section 422 of the Internal Revenue
Code.

NOW, THEREFORE, it is hereby agreed as follows:

	Grant of Option.  Subject to and upon the terms and conditions
set forth in this Agreement, there is hereby granted to Optionee, as of the date
of grant (the "Grant Date") specified in the accompanying Notice of
Grant of Stock Option (the "Grant Notice"), a stock option to purchase
up to that number of shares of Common Stock (the "Option Shares") as
is specified in the Grant Notice.  The Option Shares shall be purchasable from
time to time during the option term at the price per share (the "Exercise
Price") specified in the Grant Notice.

	Option Term.  This option shall have a maximum term of ten
(10) years measured from the Grant Date and shall expire at the close of
business on the Expiration Date specified in the Grant Notice, unless sooner
terminated under Paragraph 5.

	Limited Transferability.  This option shall be neither
transferable nor assignable by Optionee, other than a transfer of this option
effected by will or by the laws of descent and distribution following Optionee's
death, and may be exercised, during Optionee's lifetime, only by Optionee.
However, an option may be assigned in accordance with the terms of a Qualified
Domestic Relations Order.  The assigned option may only be exercised by the
person or persons who acquire a proprietary interest in the option pursuant to
such Qualified Domestic Relations Order.  The terms applicable to the assigned
option (or portion thereof) shall be the same as those in effect for the option
immediately prior to such assignment and shall be set forth in such documents
issued to the assignee as the Plan Administrator may deem appropriate.

	Exercisability.  This option shall be immediately exercisable
for any or all of the Option Shares, and shall remain so exercisable until the
expiration or sooner termination of the option term.

	Cessation of Board Service.  Should Optionee's service as a
Board member cease while this option remains outstanding, then the option term
specified in Paragraph 2 shall terminate (and this option shall cease to be
outstanding) prior to the Expiration Date in accordance with the following
provisions:

	Should the Optionee cease to serve as a Board member for any reason, then
the Board member shall have a thirty-six (36) month period following the date of
such cessation of Board service in which to exercise each such option.  
	In no event shall the option remain exercisable after the expiration of the
option term.  Upon the expiration of the thirty-six (36) month exercise period
or (if earlier) upon the expiration of the option term, the option shall
terminate and cease to be outstanding for any shares for which the option has
not been exercised.  

	Adjustment in Option Shares.

	Should any change be made to the Common Stock issuable under the Plan by
reason of any stock split, stock dividend, recapitalization, combination of
shares, exchange of shares or other change affecting such Common Stock as a
class without the Corporation's receipt of consideration, then the number and
class of securities purchasable under this option and the Exercise Price payable
per share shall be appropriately adjusted to prevent the dilution or enlargement
of Optionee's rights hereunder; provided, however, the aggregate Exercise
Price shall remain the same.

	Change of Control.   Should this option be assumed in
connection with any Corporate Transaction or Change in Control, as defined in
the Plan and below, respectively, then this option shall be appropriately
adjusted to apply and pertain to the number and class of securities which would
have been issued to Optionee prior to the consummation of such event.
Appropriate adjustments shall also be made to the Exercise Price payable per
share, provided the aggregate Exercise Price payable hereunder shall
remain the same.
	For purposes of this Agreement, the following definition shall be in
effect:

Change in Control shall mean a change in ownership or
control of the Corporation effected through either of the following
transactions:

(i)the acquisition, directly or indirectly, by any person or related
group of persons (other than the Corporation or a  person that directly or
indirectly controls, is controlled by, or is under common control with, the
Corporation), of beneficial ownership (within the meaning of Rule 13d-3 of the
Securities Exchange Act of 1934, as amended) of securities possessing more than
fifty percent (50%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made directly to
the Corporation's stockholders which the Board does not recommend such
stockholders to accept, or

(ii)a change in the composition of the Board over a period of thirty-six
(36) consecutive months or less such that a majority of the Board members
ceases, by reason of one or more contested elections for Board membership, to be
comprised of individuals who either (1) have been Board members continuously
since the beginning of such period or (2) have been elected or nominated for
election as Board members described in clause (1) who were still in office at
the time the Board approved such election or nomination.

	Manner of Exercising Option.

	In order to exercise this option for all or any part of the Option Shares,
Optionee (or in the case of exercise after Optionee's death, Optionee's
beneficiary, executor, administrator, heir or legatee, as the case may be) must
take the following actions:

	The Secretary of the Corporation shall be provided with written notice of
the option exercise (the "Exercise Notice"), in substantially the form
of Exhibit I attached hereto, in which there is specified the number of
Option Shares which are to be purchased under the exercised
option.
	The aggregate Exercise Price for the purchased shares shall be paid in one
of the following alternative forms:

-full payment in cash or check made payable to the Corporation's
order; or

-full payment in shares of Common Stock held by Optionee for the
requisite period necessary to avoid a charge to the Corporation's earnings for
financial reporting purposes and valued at Fair Market Value on the Exercise
Date; or

-full payment in a combination of shares of Common Stock held for the
requisite period necessary to avoid a change to the Corporation's earnings for
financial reporting purposes and valued at Fair Market Value on the Exercise
Date and cash or check made payable to the Corporation's order; or

-full payment effected through a broker-dealer sale and remittance
procedure pursuant to which Optionee shall provide irrevocable written
instructions (A) to a Corporation-designated brokerage firm to effect the
immediate sale of the vested shares purchased under the option and remit to the
Corporation, out of the sale proceeds available on the settlement date,
sufficient funds to cover the aggregate Exercise Price payable for those shares
and (B) to the Corporation to deliver the certificates for the purchased
shares directly to such brokerage firm in order to complete the sale.

	Appropriate documentation evidencing the right to exercise this option shall
be furnished the Corporation if the person or persons exercising the option is
other than Optionee.
	For purposes of Subparagraph 7.A above and for all other valuation
purposes under this Agreement, the Fair Market Value per share of Common Stock
on any relevant date shall be determined in accordance with the following
provisions:

-If the Common Stock is not at the time listed or admitted to trading
on any national securities exchange but is traded on the Nasdaq National Market,
the Fair Market Value shall be the closing selling price per share on the date
in question, as such price is reported by the National Association of Securities
Dealers on the Nasdaq National Market or any successor system.  If there is no
reported closing selling price for the Common Stock on the date in question,
then the closing selling price on the last preceding date for which such
quotation exists shall be determinative of Fair Market Value.

-If the Common Stock is at the time listed or admitted to trading on
any  nationalany national securities exchange, then the Fair Market Value shall
be the closing selling price per share on the date in question on the exchange
serving as the primary market for the Common Stock, as such price is officially
quoted in the composite tape of transactions on such exchange.  If there is no
reported sale of Common Stock on such exchange on the date in question, then the
Fair Market Value shall be the closing selling price on the exchange on the last
preceding date for which such quotation exists.

-For purposes of option grants made on the date of execution of the
agreement between the Corporation and the underwriter or underwriters managing
the initial public offering of the Common Stock ("Underwriting
Agreement"), the Fair Market Value shall be deemed to be equal to the price
per share at which the  Commonthe Common Stock is sold in the initial public
offering pursuant to the Underwriting Agreement.

	The Exercise Date shall be the date on which the Exercise Notice is
delivered to the Secretary of the Corporation.  Except to the extent the sale
and remittance procedure specified above isutilizedis utilized in connection
with the exercise of the option, payment of the Exercise Price for the purchased
shares must accompany such notice.
	As soon as practical after the Exercise Date, the Corporation shall issue to
or on behalf of Optionee (or other person or persons exercising this option) a
certificate or certificates representing the purchased Option Shares.  In no
event may this option be exercised for any fractional share.

	Stockholder Rights.  The holder of this option shall not have
any of the rights of a stockholder with respect to the Option Shares until such
individual shall have exercised this option and paid the Exercise Price for the
purchased shares.

	No Impairment of Rights.  This Agreement shall not in any way
affect the right of the Corporation to adjust, reclassify, reorganize or
otherwise make changes in its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.  Nor shall this Agreement in any way be construed or
interpreted so as to affect adversely or otherwise impair the right of the
Corporation or the stockholders to remove Optionee from the Board at any time in
accordance with the provisions of applicable law.

	Compliance with Laws and Regulations.  The exercise of this
option and the issuance of the Option Shares upon such exercise shall be subject
to compliance by the Corporation and Optionee with all applicable requirements
of law relating thereto and with all applicable regulations of any securities
exchange on which shares of the Common Stock may be listed for trading at the
time of such exercise and issuance.

	Successors and Assigns.  Except to the extent otherwise
provided in Paragraph 3, the provisions of this Agreement shall inure to
the benefit of, and be binding upon, the successors, administrators, heirs,
legal representatives and assigns of Optionee and the Corporation's successors
and assigns.

	Beneficiary Designation.  An Optionee may file a written
beneficiary designation indicating the person entitled to exercise Optionee's
outstanding options on the Optionee's behalf at the time of his/her death.  Such
beneficiary designation may be changed by the Optionee at any time by filing the
appropriate form with the Plan Administrator.

	Discharge of Liability.  The inability of the Corporation to
obtain approval from any regulatory body having authority deemed by the
Corporation to be necessary to the lawful issuance and sale of any Common Stock
pursuant to this option shall relieve the Corporation of any liability with
respect to the non-issuance or sale of the Common Stock as to which such
approval shall not have been obtained.  However, the Corporation shall use its
best efforts to obtain all such applicable approvals.

	Notices.  Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation at its principal corporate offices.  Any notice required to
be given or delivered to Optionee shall be in writing and addressed to Optionee
at the address indicated below Optionee's signature line on the Grant Notice.
All notices shall be deemed effective upon personal delivery or upon deposit in
the U.S. mail, postage prepaid and properly addressed to the party to be
notified.

	Construction/Governing Law.  This Agreement and the option
evidenced hereby are made and granted pursuant to the Plan and are in all
respects limited by and subject to the express terms and provisions of the Plan.
The interpretation, performance, and enforcement of this Agreement shall be
governed by the laws of the State of California without resort to that State's
conflict-of-laws rules.

EXHIBIT I

NOTICE OF EXERCISE OF

NON-STATUTORY STOCK OPTION

 

I hereby notify Pharmacyclics, Inc. (the "Corporation") that I
elect to purchase __________ shares of Common Stock of the Corporation (the
"Purchased Shares") pursuant to that certain option (the
"Option") granted to me on ______________, 2004 to purchase up to
__________ shares of the Corporation's Common Stock at an exercise price of
$________ per share (the "Exercise Price").

Concurrently with the delivery of this Exercise Notice to the Secretary of
the Corporation, I shall hereby pay to the Corporation the Exercise Price for
the Purchased Shares in accordance with the provisions of my agreement with the
Corporation evidencing the Option and shall deliver whatever additional
documents may be required by such agreement as a condition for exercise.
Alternatively, I may utilize the special broker/dealer sale and remittance
procedure specified in my agreement to effect payment of the Exercise Price for
any Purchased Shares.

 

DateOptionee

      Address:

Print name in exact manner

it is to appear on the

stock certificate:

Address to which certificate

is to be sent, if different

from address above:

 

Social Security Number:10Q Q2 2005 EXHIBIT 10.7

Exhibit 10.7

 

 

EXECUTIVE CASH BONUS PLAN SUMMARY

 

Pharmacyclics has established an executive cash bonus program that is
administered by the Compensation Committee of the Board of Directors.  The bonus
program covers the company's fiscal year from July 1, 2004 through June 30, 2005
and assuming all targets were met, provides for payment of up to a maximum of
30% of the executive officer's base salary.  The purpose of the program is to
reward executive officers of the Company, including the chief executive officer,
for successful achievement of certain corporate and personal goals.  The bonus
targets are divided into the following three categories: 1) clinical
development, 2) research and development related to the company's product
pipeline, and 3) individual goals.

The actual bonuses payable for fiscal year 2005 will vary depending on the
extent to which actual performance meets, exceeds, or falls short of the targets
approved by the Compensation Committee.  In addition, the Compensation Committee
retains the discretion to increase, reduce or eliminate the bonus that might
otherwise be payable to any individual based on actual performance as compared
to pre-established goals.

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