Document:

exv10w5

 

Exhibit 10.5

NON-QUALIFIED STOCK OPTION GRANT NOTICE

     Pursuant to the Allergan, Inc. 2008 Incentive Award Plan (the “Plan”), Allergan, Inc. (the
“Company”) hereby grants to the employee listed below (“Participant”), an option to purchase the
number of shares of the Company’s common stock, par value US$0.01 per share (“Stock”), set forth
below (the “Shares”) at the price set forth below (the “Option”). The Option is subject to all of
the terms and conditions set forth herein, in the Terms and Conditions attached hereto as
Exhibit A (the “Terms”) and in the Plan, each of which is incorporated herein by reference.
Unless otherwise defined herein, the terms defined in the Plan shall have the same defined
meanings in this Non-Qualified Stock Option Grant Notice (the “Grant Notice”).

	 	 	 	 	 
	Participant:

	 	 	 	 
	 

	 	 	 	 
	Grant Date:
	 	 	 	 
	 
	 	 	 	 
	Exercise Price per Share:

	 	US $	 	 
	 

	 	 	 	 
	Total Exercise Price:

	 	US $	 	 
	 

	 	 	 	 
	Total Number of Shares
	 	 	 	 
	Subject to the Option:

	 	shares	 	 
	 

	 	 	 	 
	Expiration Date:
	 	 	 	 
	 

	 	 	 	 

	 	 	 
	Type of Option:

	 	Non-Qualified Stock Option
	 
	 	 
	Vesting Schedule:

	 	Subject to the terms and conditions of the Plan, this
Grant Notice and the Terms, the Option shall vest and
become exercisable as follows:

[To be specified in individual agreements]

Except as provided in Section 3.2(a) of the Terms, as otherwise provided by
the Administrator or as set forth in a written agreement between the Company
and Participant, in no event shall the Option vest and become exercisable
for any additional shares of Stock following Participant’s Termination of
Employment.

     All decisions and interpretations of the Administrator arising under the Plan, this Grant
Notice or the Terms or relating to the Option shall be binding, conclusive and final.

ALLERGAN, INC.

	 	 	 	 	 
	By:

	 	 	 	 
	 

	 	 	 	 
	Print Name:
	 	 	 	 
	 

	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 
	Address:

	 	2525 Dupont Drive	 	 
	 

	 	Irvine, California 92612	 	 
	 
	 	 	 	 
	Attachments:	 	Terms and Conditions (Exhibit A)
	 	 	Allergan, Inc. 2008 Incentive Award Plan (Exhibit B)
	 	 	Allergan, Inc. 2008 Incentive Award Plan Prospectus (Exhibit C)

 

 

EXHIBIT A TO THE NON-QUALIFIED STOCK OPTION GRANT NOTICE

TERMS AND CONDITIONS

May 2008

     Pursuant to the Non-qualified Stock Option Grant Notice (the “Grant Notice”) to which these
Terms and Conditions (the “Terms”) are attached, Allergan, Inc. (the “Company”) granted to the
participant (“Participant”) specified on the Grant Notice an option under the Allergan, Inc. 2008
Incentive Award Plan (the “Plan”) to purchase the number of shares of the Company’s common stock,
par value US$0.01 per share (“Stock”), indicated in the Grant Notice, subject to the terms and
conditions of the Grant Notice, the Terms and the Plan.

	I.	 	GENERAL

          1.1.     Defined Terms. Wherever the following terms are used herein they shall have the
meanings specified below, unless the context clearly indicates otherwise. Capitalized terms not
specifically defined herein shall have the meanings specified in the Grant Notice or, if not
defined therein, the Plan.

          “Job Elimination” means Participant’s Termination of Employment by the Company or any
Subsidiary under circumstances satisfying each of the following conditions, as determined in the
sole and absolute discretion of the Company: (a) Participant’s Termination of Employment results in
or is part of a net headcount reduction of one or more employees; (b) Participant is not offered a
comparable position with the Company, a subsidiary or a successor entity or an affiliate of the
Company or a subsidiary; and (c) the Company provides written notice to Participant prior to his or
her Termination of Employment that it has determined Employee’s Termination of Employment is a “job
elimination.”

          “Termination of Employment” shall mean the time when the employee-employer relationship
between Participant and the Company or any Subsidiary is terminated for any reason, with or without
cause, including, without limitation, a termination by resignation, discharge, death, disability or
retirement, but excluding terminations where there is a simultaneous reemployment or continuing
employment of Participant by the Company or any Subsidiary. The Administrator, in its discretion,
shall determine the effect of all matters and questions relating to Participant’s Termination of
Employment, including, without limitation, the question of whether such Termination of Employment
resulted from a discharge for cause. For purposes of the Terms, Participant’s employee-employer
relationship shall be deemed to be terminated in the event that the Subsidiary employing
Participant ceases to remain a Subsidiary following any merger, sale of stock or other corporate
transaction or event (including, without limitation, a spin-off).

          1.2.     Incorporation of Terms of Plan. The Option is also subject to the terms and
conditions of the Plan, which are incorporated herein by reference.

	II.	 	GRANT OF OPTION

          2.1.     Grant of Option. In consideration of Participant’s past and/or continued
employment with or service to the Company or its Subsidiaries and for other good and valuable
consideration, effective as of the grant date specified on the Grant Notice (the “Grant Date”), the
Company irrevocably grants to Participant an option (the “Option”) to purchase any part or all of
the Shares specified on the Grant Notice, subject to the terms and conditions set forth in the Plan
and the Terms.

 

 

          2.2.     Exercise Price. The exercise price payable for the Shares subject to the Option
shall be as set forth in the Grant Notice, without commission or other charge.

	III.	 	PERIOD OF EXERCISABILITY

          3.1.     Commencement of Exercisability.

                    (a)     Subject to Sections 3.3 and 3.4, the Option shall become vested and exercisable in such
amounts and at such times as are set forth in the Grant Notice and Section 3.2 below, or at such
earlier times as are set forth in a written agreement between the Company and Participant.

                    (b)     Except as provided in Section 3.2(a) below, as otherwise provided by the Administrator or
as set forth in a written agreement between the Company and Participant, the unvested and
unexercisable portion of the Option shall terminate immediately upon Participant’s Termination of
Employment.

          3.2.     Acceleration of Exercisability. Notwithstanding anything to the contrary in
Section 3.1 or the Grant Notice, the Option shall become fully vested and exercisable on an
accelerated basis under the following circumstances:

                    (a)     if Participant’s Termination of Employment occurs by reason of Participant’s Job
Elimination and Participant executes and delivers, and does not revoke, a general waiver and
release of all claims against the Company and its subsidiaries and the employees, directors, agents
and affiliates of the Company and its subsidiaries, in a form acceptable to the Company in its sole
and absolute discretion, then the Option shall become fully vested and exercisable upon the date
such general waiver and release of all claims becomes effective and irrevocable; provided, that
such general waiver and release of all claims becomes effective and irrevocable prior to the
expiration of the Option pursuant to Section 3.4 below or such earlier date as may be specified by
the Company;

                    (b)     if Participant’s Termination of Employment occurs by reason of Participant’s death or
permanent and total disability (within the meaning of Section 22(e)(3) of the Internal Revenue Code
of 1986, as amended (the “Code”)), then the Option shall become fully vested and exercisable
immediately prior to Participant’s Termination of Employment; and

                    (c)     if a Change in Control occurs prior to Participant’s Termination of Employment, then the
Option shall become fully vested and exercisable immediately prior to the occurrence of such Change
in Control.

          3.3.     Duration of Exercisability. The Option shall become vested and exercisable for
the shares of Stock in one or more installments as specified in Section 3.1, subject to
acceleration as provided in Section 3.2 or the Plan, or any other written agreement between the
Company and Participant. Each such installment that becomes vested and exercisable shall remain
vested and exercisable until it becomes unexercisable under Section 3.4.

          3.4.     Expiration of Option. The Option shall terminate and shall not be exercised
after the first to occur of the following events:

                    (a)     the expiration of ten years from the Grant Date;

                    (b)     except as otherwise provided in a written agreement between Participant and the Company,
the expiration of three months following the date of Participant’s Termination of Employment,

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unless such termination occurs by reason of Participant’s death, permanent and total
disability (within the meaning of Code Section 22(e)(3)) or voluntary Termination of Employment on
or after Participant’s Normal Retirement Eligibility Date or Participant’s discharge for Cause (as
defined below);

                    (c)     except as otherwise provided in a written agreement between Participant and the Company,
the expiration of thirty-six months following the date of Participant’s voluntary Termination of
Employment on or after Participant’s Normal Retirement Eligibility Date;

                    (d)     except as otherwise provided in a written agreement between Participant and the Company,
the expiration of twelve months following the date of Participant’s Termination of Employment by
reason of Participant’s death or permanent and total disability (within the meaning of Code Section
22(e)(3)); or

                    (e)     except as otherwise provided in a written agreement between Participant and the Company,
the date of Participant’s Termination of Employment by the Company or any Subsidiary by reason of
Participant’s discharge for Cause.

For purposes of this Section 3.4, “Cause” means any conduct set forth on the Grant Date in the
Company’s employee handbook or Management Practices and Guidelines (or any successor thereto)
justifying immediate termination without the benefit of a counseling review or severance pay.

	IV.	 	EXERCISE OF OPTION

          4.1.     Person Eligible to Exercise. Except as provided in Sections 5.2(b) and 5.2(c),
during Participant’s lifetime, only Participant may exercise the Option or any portion thereof.
After Participant’s death, any exercisable portion of the Option may, prior to the time when the
Option becomes unexercisable under Section 3.4, be exercised by Participant’s personal
representative or by any person empowered to do so under Participant’s will or under the then
applicable laws of descent and distribution.

          4.2.     Partial Exercise. Any exercisable portion of the Option or the entire Option, if
then wholly exercisable, may be exercised in whole or in part at any time prior to the time when
the Option or portion thereof becomes unexercisable under Section 3.4.

          4.3.     Manner of Exercise. The Option, or any exercisable portion thereof, may be
exercised solely by delivery to the Secretary of the Company (or any third party administrator or
other person or entity designated by the Company) of all of the following prior to the time when
the Option or such portion thereof becomes unexercisable under Section 3.4:

                    (a)     An exercise notice in a form specified by the Administrator, stating that Participant is
electing to exercise the Option or a portion thereof, such notice complying with all applicable
rules established by the Administrator;

                    (b)     The receipt by the Company of full payment for the shares of Stock with respect to which
the Option or portion thereof is exercised, including payment of any applicable withholding tax,
which may be in one or more of the forms of consideration permitted under Section 4.4; and

                    (c)     In the event the Option or portion thereof shall be exercised pursuant to Section 4.1 by
any person or persons other than Participant, appropriate proof of the right of such person or
persons to exercise the Option.

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Notwithstanding the foregoing, the Company shall have the right to specify all conditions of the
manner of exercise, which conditions may vary by country and which may be subject to change from
time to time.

          4.4.     Method of Payment. Payment of the exercise price shall be by any of the
following, or a combination thereof, at Participant’s election:

                    (a)     cash;

                    (b)     check;

                    (c)     to the extent permitted under applicable laws, delivery of a notice that Participant has
placed a market sell order with a broker with respect to shares of Stock then issuable upon
exercise of the Option, and that the broker has been directed to pay a sufficient portion of the
net proceeds of the sale to the Company in satisfaction of the aggregate exercise price; provided,
that payment of such proceeds is then made to the Company upon settlement of such sale;

                    (d)     through the delivery of shares of Stock which have been owned by Participant for at least
six (6) months, duly endorsed for transfer to the Company with a Fair Market Value on the date of
exercise equal to the aggregate exercise price of the Option or exercised portion thereof;

                    (e)     to the extent permitted by the Administrator, through the delivery of other lawful
consideration; or

                    (f)     any combination of the foregoing.

          4.5.     Conditions to Issuance of Stock Certificates. The shares of Stock deliverable
upon the exercise of the Option, or any portion thereof, may be either previously authorized but
unissued shares or issued shares which have then been reacquired by the Company. Such shares shall
be fully paid and nonassessable. The Company shall not be required to issue or deliver any shares
of Stock purchased upon the exercise of the Option or portion thereof prior to fulfillment of all
of the following conditions:

                    (a)     The admission of such shares to listing on all stock exchanges on which such Stock is then
listed;

                    (b)     The completion of any registration or other qualification of such shares under any state
or federal law or under rulings or regulations of the Securities and Exchange Commission or of any
other governmental regulatory body, which the Administrator shall, in its sole and absolute
discretion, deem necessary or advisable;

                    (c)     The obtaining of any approval or other clearance from any state or federal governmental
agency which the Administrator shall, in its sole and absolute discretion, determine to be
necessary or advisable;

                    (d)     The receipt by the Company of full payment for such shares, including payment of any
applicable withholding tax, which may be in one or more of the forms of consideration permitted
under Section 4.4; and

                    (e)     The lapse of such reasonable period of time following the exercise of the Option as the
Administrator may from time to time establish for reasons of administrative convenience.

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          4.6.     Rights as Stockholder. The holder of the Option shall not be, nor have any of
the rights or privileges of, a stockholder of the Company in respect of any shares purchasable upon
the exercise of any part of the Option unless and until such shares shall have been issued by the
Company to such holder (as evidenced by the appropriate entry on the books of the Company or of a
duly authorized transfer agent of the Company). No adjustment will be made for a dividend or other
right for which the record date is prior to the date the shares are issued, except as provided in
Section 11.1 of the Plan.

	V.	 	OTHER PROVISIONS

          5.1.     Administration. The Administrator shall have the power to interpret the Plan and
the Terms and to adopt such rules for the administration, interpretation and application of the
Plan as are consistent therewith and to interpret, amend or revoke any such rules. All actions
taken and all interpretations and determinations made by the Administrator in good faith shall be
binding, conclusive and final upon Participant, the Company and all other interested persons. No
member of the Administrator shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan, the Terms or the Option. In its sole
and absolute discretion, the Board may at any time and from time to time exercise any and all
rights and duties of the Administrator under the Plan and the Terms, subject to Section 12.2 of the
Plan.

          5.2.     Limited Transferability.

                    (a)     Subject to Section 5.2(b), the Option may not be sold, pledged, assigned or transferred in
any manner other than by will or the laws of descent and distribution. Neither the Option nor any
interest or right therein or part thereof shall be liable for Participant’s debts, contracts or
engagements or the debts, contracts or engagements of Participant’s successors in interest or shall
be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or
any other means whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including
bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except
to the extent that such disposition is permitted by the preceding sentence.

                    (b)     Notwithstanding any other provision of the Terms, with the consent of the Administrator,
the Option may be transferred to one or more “Permitted Transferees” (as defined below), subject to
the following terms and conditions:

     (i)     the Option shall not be assignable or transferable by the Permitted Transferee
other than by will or the laws of descent and distribution;

     (ii)     the Option shall continue to be subject to all the terms and conditions of the
Plan and the Terms, as amended from time to time, as applicable to Participant (other than
the ability to further transfer the Option); and

     (iii)     Participant and the Permitted Transferee execute any and all documents requested
by the Company, including, without limitation documents to (A) confirm the status of the
transferee as a Permitted Transferee, (B) satisfy any requirements for an exemption for the
transfer under applicable federal and state securities laws, and (C) evidence the transfer.

“Permitted Transferee” means, with respect to Participant, any child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive
relationships, any person sharing Participant’s household (other than a tenant or employee), a
trust in which these persons have

A-5

 

more than 50% of the beneficial interest, any other entity in which these persons (or Participant)
own more than 50% of the voting interests, or any other transferee specifically approved by the
Administrator.

                    (c)     Unless transferred to a Permitted Transferee in accordance with Section 5.2(b), during the
lifetime of Participant, only Participant may exercise the Option or any portion thereof. Subject
to such conditions and procedures as the Administrator may require, a Permitted Transferee may
exercise the Option or any portion thereof during Participant’s lifetime. After the death of
Participant, any exercisable portion of the Option may, prior to the time when the Option becomes
unexercisable under Section 3.4, be exercised by Participant’s personal representative or by any
person empowered to do so under the deceased Participant’s will or under the then applicable laws
of descent and distribution.

          5.3.     No Employment Rights. Nothing in the Plan or the Terms shall confer upon
Participant any right to continue in the employ or service of the Company or any Subsidiary or
shall interfere with or restrict in any way the rights of the Company and its Subsidiaries, which
rights are hereby expressly reserved, to discharge or terminate Participant’s services at any time
for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise
in a written agreement between the Company or a Subsidiary and Participant.

          5.4.     Shares to Be Reserved. The Company shall at all times during the term of the
Option reserve and keep available such number of shares of Stock as will be sufficient to satisfy
the requirements of the Terms.

          5.5.     Notices. All notices or other communications required or permitted hereunder
shall be in writing, and shall be deemed duly given only when delivered in person or when sent by
certified mail (return receipt requested) and deposited (with postage prepaid) in a post office or
branch post office regularly maintained by the United States Postal Service, addressed as follows:

	 	 	 	 	 
	 

	 	If to the Company:
	 	Allergan, Inc.
	 

	 	 	 	Attention: General Counsel
	 

	 	 	 	2525 Dupont Drive
	 

	 	 	 	Irvine, California 92612
	 
	 	 	 	 
	 

	 	If to Participant:
	 	To Participant’s most recent address then
	 

	 	 	 	on file in the Company’s personnel records.

By a notice given pursuant to this Section 5.5, either party may thereafter designate a different
address for notices to be given to that party. Any notice which is required to be given to
Participant shall, if Participant is then deceased, be given to the person entitled to exercise the
Option pursuant to Section 4.1 by written notice under this Section 5.5.

          5.6.     Titles. Titles are provided herein for convenience only and are not to serve as
a basis for interpretation or construction of the Terms.

          5.7.     Governing Law; Severability. The Terms shall be administered, interpreted and
enforced under the laws of the State of Delaware, without regard to conflicts of law principles
thereof. Should any provision of the Terms be determined by a court of law to be illegal or
unenforceable, the other provisions shall nevertheless remain effective and shall remain
enforceable.

          5.8.     Conformity to Securities Laws. Participant acknowledges that the Plan is
intended to conform to the extent necessary with all provisions of the Securities Act and the
Exchange Act and any and all regulations and rules promulgated by the Securities and Exchange
Commission thereunder, and

A-6

 

state and foreign securities laws and regulations. Notwithstanding anything herein to the
contrary, the Plan shall be administered, and the Option is granted and may be exercised, only in
such a manner as to conform to such laws, rules and regulations. To the extent permitted by
applicable law, the Plan and the Terms shall be deemed amended to the extent necessary to conform
to such laws, rules and regulations.

          5.9.     Amendments. To the extent permitted by the Plan, the Terms may be wholly or
partially amended or otherwise modified, suspended or terminated at any time or from time to time
by the Administrator; provided, that, except as may otherwise be provided by the Plan, no
termination, amendment or modification of the Terms shall adversely affect the Option in any
material way without Participant’s prior written consent. The Terms may not be modified, suspended
or terminated except by an instrument in writing signed by a duly authorized representative of the
Company and, if Participant’s consent is required, by Participant or such other person as may be
permitted to exercise the Option pursuant to Section 4.1.

          5.10.     Successors and Assigns. The Company may assign any of its rights with respect
to the Option to single or multiple assignees, and the Terms shall inure to the benefit of the
successors and assigns of the Company. Subject to the restrictions on transfer set forth in
Section 5.2, the Terms shall be binding upon Participant and Participant’s heirs, executors,
administrators, successors and assigns.

          5.11.     Limitations Applicable to Section 16 Persons. Notwithstanding any other
provision of the Plan or the Terms, if Participant is subject to Section 16 of the Exchange Act,
the Plan, the Option and the Terms shall be subject to any additional limitations set forth in any
applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule
16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To
the extent permitted by applicable law, the Terms shall be deemed amended to the extent necessary
to conform to such applicable exemptive rule.

          5.12.     Entire Agreement. The Plan and the Terms constitute the entire agreement of the
parties and supersede in their entirety all prior undertakings and agreements of the Company and
Participant with respect to the subject matter hereof.

A-7

 

EXHIBIT B TO THE NON-QUALIFIED STOCK OPTION GRANT NOTICE

ALLERGAN, INC. 2008 INCENTIVE AWARD PLAN

 

 

EXHIBIT C TO THE NON-QUALIFIED STOCK OPTION GRANT NOTICE

ALLERGAN, INC. 2008 INCENTIVE AWARD PLAN PROSPECTUSexv10w6

 

Exhibit 10.6

EXHIBIT D TO THE NON-QUALIFIED STOCK OPTION GRANT NOTICE

TERMS AND CONDITIONS

ADDENDUM FOR EMPLOYEES IN THE 

PEOPLE’S REPUBLIC OF CHINA

May 2008

     Pursuant to the Non-Qualified Stock Option Grant Notice to which this addendum is attached
(the “Grant Notice”), Allergan, Inc. (the “Company”) granted to the participant specified on the
Grant Notice (“Participant”) an option under the Allergan, Inc. 2008 Incentive Award Plan
(the “Plan”) to purchase the number of shares of the Company’s common stock, par value $0.01 per
share (“Stock”), indicated in the Grant Notice, subject to a general set of terms and conditions
attached as “Exhibit A” to the Grant Notice (the “Terms”), the terms and conditions of the Grant
Notice and the Plan, and the terms and conditions set forth in this addendum. The provisions of
this addendum form an integral part of the Terms. The provisions of the Plan, the Grant Notice and
the Terms that do not contradict the provisions of this addendum shall remain applicable.

     Capitalized terms not specifically defined herein shall have the meanings specified in the
Plan.

	1.	 	Broker-Assisted Cashless Exercise Required. Notwithstanding anything to the contrary in
Section 4.4 or Section 4.5 of the Terms, payment of the exercise price and all amounts
required to be withheld by the Company or any Subsidiary shall be made solely by delivery of a
notice that Participant has placed a market sell order with a broker with respect to shares of
Stock then issuable upon exercise of the Option, and that the broker has been directed to pay
a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the
aggregate exercise price; provided, that payment of such proceeds is then made to the Company
upon settlement of such sale. The certificates for the shares of Stock purchased shall be
delivered directly to the brokerage firm for the purpose of completing the sale transaction.
	 
	2.	 	Exercise Restrictions. The Option shall not be exercisable on any day on which the option
exercise price per share exceeds the Fair Market Value.
	 
	3.	 	Certificates. The Company shall not be required to provide Participant with certificates for
any shares of Stock for which the Option is exercised.
	 
	4.	 	Currency. All calculations under the Plan shall be prepared based on U.S. dollars. Amounts
denominated in any currency other than U.S. dollars shall be converted into U.S. dollars on
the basis of the Exchange Rate in effect on the relevant date. The “Exchange Rate” shall be
the rate at which the relevant currency is converted into U.S. Dollars, as reported on the
relevant date in The Wall Street Journal (or such other reliable source as may be selected
from time to time by the Administrator in its discretion).
	 
	5.	 	Compliance with Legal Requirements. Sections 1, 2 and 3 are intended to satisfy the
applicable legal requirements of the People’s Republic of China, and the regulations and
rulings thereunder (the “PRC Legal Requirements”), and shall be interpreted and
administered in accordance therewith. Sections 1, 2 and 3 shall terminate and cease to be
binding and shall have no force or effect in the event of any amendment or modification to the
PRC Legal Requirements permitting Participant to purchase and own shares of Stock, as
determined by the Company in its sole and absolute discretion.

 

 

	6.	 	Other Terms. The provisions of this Terms and Conditions Addendum for Employees in the
People’s Republic of China shall supersede any provisions to the contrary in the Grant Notice,
the Terms or the Plan.

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