Document:

Exhibit 10.60

 

Amylin Pharmaceuticals, Inc.

2001 Equity Incentive Plan

 

Stock Option Agreement

(Incentive Stock Option or Nonstatutory Stock Option)

 

Pursuant to your Stock Option Grant Notice (“Grant Notice”) and this
Stock Option Agreement, Amylin Pharmaceuticals, Inc. (the “Company”) has
granted you an option under its 2001 Equity Incentive Plan (the “Plan”) to
purchase the number of shares of the Company’s Common Stock indicated in your
Grant Notice at the exercise price indicated in your Grant Notice.  Defined terms not explicitly defined in this
Stock Option Agreement but defined in the Plan shall have the same definitions
as in the Plan.

 

The details of your option are as follows:

 

1.                                      VESTING.  Subject to the limitations
contained herein, your option will vest as provided in your Grant Notice,
provided that vesting will cease upon the termination of your Continuous
Service.

 

(a)                                  Special Acceleration Provisions.  Notwithstanding any other provisions of the
Plan to the contrary, if (i) a Change in Control occurs and (ii) within ninety
(90) days prior to the date of such Change in Control or thirteen (13) months
after the date of such Change in Control your Continuous Service terminates due
to an involuntary termination (not including death or Disability) without Cause
or due to a Constructive Termination, then the vesting and exercisability of
the shares subject to your option shall be accelerated in full or any
reacquisition or repurchase rights held by the Company with respect to Common
Stock acquired pursuant to the early exercise of your option shall lapse in
full, as appropriate; provided, however, that if such acceleration of the
vesting and exercisability of your Option (or lapse of reacquisition or
repurchase rights held by the Company with respect to Common Stock acquired
pursuant to the early exercise of this Option) would cause a contemplated
Change in Control transaction that would otherwise be eligible to be accounted
for as a “pooling-of-interests” transaction to become ineligible for such accounting
treatment under generally accepted accounting principles as determined by the
Company’s independent certified public accountants (“Accountants”) prior to the
Change in Control, such acceleration shall not occur.

 

For purposes
of this subsection 1(a) and Section 7(f) only, “Cause” means that, in the
reasonable determination of the Company, you have (i) been convicted of or
pleaded guilty or nolo contendere to a felony or any crime involving moral
turpitude or dishonesty; (ii) participated in a fraud or act of dishonesty
against the Company; (iii) willfully and materially breached a Company policy;
(iv) intentionally damaged the Company’s property; (v) willfully and materially
breached your Proprietary Information and Inventions Agreement with the Company;
(vi) engaged in conduct that, in the reasonable determination of the Company,
demonstrates gross unfitness to serve; or (vii) repeatedly failed to
satisfactorily perform job duties to which you previously agreed in writing.  The conduct described under clauses (iii),
(vi) and (vii) above will only constitute Cause if such conduct is not cured
within 90 days after your receipt of written notice from the Company or the
Board specifying the particulars of the conduct that may constitute Cause.

 

1

 

For purposes
of this subsection 1(a) only, “Change in Control” means the occurrence of any
of the following:  (i) any
“person,” as such term is used in Sections 13(d) and 14(d) of the Securities
and Exchange Act of 1934, as amended from time to time, and any successor
statute (the “Exchange Act”) (other than the Company, a subsidiary, an
affiliate, or a Company employee benefit plan, including any trustee of such
plan acting as trustee) is or becomes the “beneficial owner” (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
the Company representing 50% or more of the combined voting power of the
Company’s then outstanding securities other than by virtue of a merger, consolidation
or similar transaction; (ii) there is consummated a sale or other
disposition of all or substantially of assets of the Company (other than a sale
to an entity where at least 50% of the combined voting power of the voting
securities of such entity are owned by the stockholders of the Company in
substantially the same proportions as their ownership of the Company
immediately prior to such sale); or (iii) there is consummated a merger,
consolidation or similar transaction involving (directly or indirectly) the
Company and, immediately after the consummation of such transaction, the
stockholders of the Company immediately prior to the consummation of such
transaction do not own, directly or indirectly, outstanding voting securities
representing more than 50% of the combined outstanding voting power of the
surviving entity in such transaction or more than 50% of the combined
outstanding voting power of the parent of the surviving entity in such
transaction.

 

For purposes
of this subsection 1(a) only, Constructive Termination means that you
voluntarily terminate your employment with the Company after any of the
following are undertaken without Cause and without your express written
consent:  (i) a reduction by the Company
in your annual base salary as in effect during the last regularly scheduled
payroll period immediately prior to the effective date of the Change in Control
(or as increased thereafter), unless such reduction is made pursuant to an
across-the-board reduction of the base salaries of all similarly situated
Employees of no more than ten percent (10%); (ii) your relocation, or the
relocation of the Company’s principal executive offices if your principal
office is at such offices, to a location more than fifty (50) miles from the
location at which you were performing your duties immediately prior to the
effective date of the Change in Control, except for required travel on the
Company’s business to an extent substantially consistent with your business
travel obligations immediately prior to the effective date of the Change in
Control; (iii) your assignment of any duties or responsibilities that results
in a material diminution in your authority, duties or responsibilities as in
effect immediately prior to the Change in Control; (iv) a material breach by
the Company of any provision of the Plan or any enforceable written agreement
between you and the Company; or (iv) any failure by the Company to obtain the
assumption of the Plan by any successor or assign of the Company.

 

(b)                                  Parachute Payments.  In the event that the acceleration of the
vesting and exercisability of your Option and/or the lapse of reacquisition or
repurchase rights with respect to Common Stock acquired pursuant to the early
exercise of an Option provided for in subsection 1(a) and benefits otherwise
payable to you (i) constitute “parachute payments” within the meaning of
Section 280G of the Code, or any comparable successor provisions, and
(ii) but for 

 

2

 

this subsection would be
subject to the excise tax imposed by Section 4999 of the Code, or any
comparable successor provisions (the “Excise Tax”), then your benefits
hereunder shall be either

 

(i)                                    provided to you in
full, or

 

(ii)                                provided to you as to
such lesser extent which would result in no portion of such benefits being
subject to the Excise Tax,

 

whichever of the foregoing amounts, when taking into account applicable
federal, state, local and foreign income and employment taxes, the Excise Tax,
and any other applicable taxes, results in the receipt by you, on an after-tax
basis, of the greatest amount of benefits, notwithstanding that all or some
portion of such benefits may be taxable under the Excise Tax.  Unless the Company and you otherwise agree
in writing, any determination required under this subsection shall be made in
writing in good faith by the accounting firm engaged by the Company for general
audit purposes as of the day prior to the effective date of the Change in
Control.  If the accounting firm so
engaged by the Company is serving as accountant or auditor for the individual,
entity or group effecting the Change in Control, the Company shall appoint a
different nationally recognized accounting firm to make the determinations
required hereunder (the accounting firm so engaged pursuant to the two
immediately preceding sentences, the “Accountants”).  In the event of a reduction of benefits hereunder, you shall be
given the choice of which benefits to reduce. 
For purposes of making the calculations required by this subsection, the
Accountants may make reasonable assumptions and approximations concerning
applicable taxes and may rely on reasonable, good faith interpretations
concerning the application of the Code, and other applicable legal authority.  The Company and you shall furnish to the
Accountants such information and documents as the Accountants may reasonably
request in order to make a determination under this subsection.  The Company shall bear all costs the
Accountants may reasonably incur in connection with any calculations
contemplated by this subsection.

 

If, notwithstanding any reduction described in this subsection, the IRS
determines that you are liable for the Excise Tax as a result of the receipt of
the payment of benefits as described above, then you shall be obligated to pay
back to the Company, within thirty (30) days after a final IRS determination or
in the event that you challenge the final IRS determination, a final judicial
determination, a portion of the payment equal to the “Repayment Amount.”  The Repayment Amount with respect to the
payment of benefits shall be the smallest such amount, if any, as shall be
required to be paid to the Company so that your net after-tax proceeds with
respect to any payment of benefits (after taking into account the payment of
the Excise Tax and all other applicable taxes imposed on such payment) shall be
maximized.  The Repayment Amount with
respect to the payment of benefits shall be zero if a Repayment Amount of more
than zero would not result in your net after-tax proceeds with respect to the
payment of such benefits being maximized. 
If the Excise Tax is not eliminated pursuant to this paragraph, you
shall pay the Excise Tax.

 

Notwithstanding any other provision of this subsection 1(b), if (i)
there is a reduction in the payment of benefits as described in this
subsection, (ii) the IRS later determines that you are liable for the Excise
Tax, the payment of which would result in the maximization of your net
after-tax proceeds (calculated as if your benefits had not previously been
reduced), and (iii) you pay the Excise Tax, then the Company shall pay to you
those benefits which were reduced pursuant to this subsection contemporaneously
or as soon as administratively possible after you pay the Excise Tax so that
your net after-tax proceeds with respect to the payment of benefits is
maximized.

 

3

 

If you either (i) bring any action to enforce rights pursuant to this
subsection 1(b), or (ii) defend any legal challenge to your rights hereunder,
you shall be entitled to recover attorneys’ fees and costs incurred in
connection with such action, regardless of the outcome of such action;
provided, however, that in the event such action is commenced by you, the court
finds the claim was brought in good faith.

 

2.                                      NUMBER OF SHARES AND EXERCISE PRICE.  The
number of shares of Common Stock subject to your option and your exercise price
per share referenced in your Grant Notice may be adjusted from time to time for
capitalization adjustments, as provided in the Plan.

 

3.                                      EXERCISE PRIOR TO VESTING (“EARLY EXERCISE”).  If
permitted in your Grant Notice (i.e., the “Exercise Schedule” indicates that
“Early Exercise” of your option is permitted) and subject to the provisions of
your option, you may elect at any time that is both (i) during the period of
your Continuous Service and (ii) during the term of your option, to exercise
all or part of your option, including the nonvested portion of your option;
provided, however, that:

 

(a)                                  a partial exercise of your option shall be deemed
to cover first vested shares of Common Stock and then the earliest vesting
installment of unvested shares of Common Stock;

 

(b)                                  any shares of Common Stock so purchased from
installments that have not vested as of the date of exercise shall be subject
to the purchase option in favor of the Company as described in the Company’s
form of Early Exercise Stock Purchase Agreement;

 

(c)                                  you shall enter into the Company’s form of Early
Exercise Stock Purchase Agreement with a vesting schedule that will result in
the same vesting as if no early exercise had occurred; and

 

(d)                                  if your option is an
incentive stock option, then, as provided in the Plan, to the extent that the
aggregate Fair Market Value (determined at the time of grant) of the shares of
Common Stock with respect to which your option plus all other incentive stock
options you hold are exercisable for the first time by you during any calendar
year (under all plans of the Company and its Affiliates) exceeds one hundred thousand
dollars ($100,000), your option(s) or portions thereof that exceed such limit
(according to the order in which they were granted) shall be treated as
nonstatutory stock options.

 

4.                                      METHOD OF PAYMENT.  Payment of the exercise price is due in full
upon exercise of all or any part of your option.  You may elect to make payment of the exercise price in cash or by
check or in any other manner permitted by your Grant Notice, which may include one or
more of the following:

 

(a)                                  In the Company’s sole discretion at the time your
option is exercised and provided that at the time of exercise the Common Stock
is publicly traded and quoted regularly in The Wall Street Journal, pursuant to a
program developed under Regulation T as promulgated by the Federal Reserve
Board that, prior to the issuance of Common Stock, results in either the
receipt of cash (or check) by the Company or the receipt of irrevocable
instructions to pay the aggregate exercise price to the Company from the sales
proceeds.

 

4

 

(b)                                  Provided that at the time of exercise the Common
Stock is publicly traded and quoted regularly in The Wall Street Journal, by
delivery of already-owned shares of Common Stock either that you have held for
the period required to avoid a charge to the Company’s reported earnings
(generally six months) or that you did not acquire, directly or indirectly from
the Company, that are owned free and clear of any liens, claims, encumbrances
or security interests, and that are valued at Fair Market Value on the date of
exercise.  “Delivery” for these
purposes, in the sole discretion of the Company at the time you exercise your
option, shall include delivery to the Company of your attestation of ownership
of such shares of Common Stock in a form approved by the Company.  Notwithstanding the foregoing, you may not
exercise your option by tender to the Company of Common Stock to the extent
such tender would violate the provisions of any law, regulation or agreement
restricting the redemption of the Company’s stock.

 

(c)                                  Pursuant to the following deferred payment
alternative:

 

(i)                                    Not less than one hundred percent (100%) of the
aggregate exercise price, plus accrued interest, shall be due (i) on the date
designated by the Company in its sole and absolute discretion but not to exceed
four (4) years from date of exercise, or (ii) at the Company’s election, upon
termination of your Continuous Service.

 

(ii)                                Interest shall be compounded at least annually
and shall be charged at the market rate of interest necessary to avoid a charge
to earnings for financial accounting purposes.

 

(iii)                            At any time that the Company is incorporated in
Delaware, payment of the Common Stock’s “par value,” as defined in the Delaware
General Corporation Law, shall be made in cash and not by deferred payment.

 

(iv)                               In order to elect the deferred payment
alternative, you must, as a part of your written notice of exercise, give
notice of the election of this payment alternative and, in order to secure the
payment of the deferred exercise price to the Company hereunder, if the Company
so requests, you must tender to the Company a promissory note and a security
agreement covering the purchased shares of Common Stock, both in form and
substance satisfactory to the Company, or such other or additional
documentation as the Company may request.

 

5.                                      Whole Shares.  You may exercise your option
only for whole shares of Common Stock.

 

6.                                      Securities Law Compliance. 
Notwithstanding anything to the contrary contained herein, you may not
exercise your option unless the shares of Common Stock issuable upon such
exercise are then registered under the Securities Act or, if such shares of
Common Stock 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.  The exercise of your
option must also comply with other applicable laws and regulations governing
your option, and you may not exercise your option if the Company determines
that such exercise would not be in material compliance with such laws and
regulations.

 

5

 

7.                                      Term.  You may not exercise your option
before the commencement of its term or after its term expires.  The term of your option commences on the
Date of Grant and expires upon the earliest of the following:

 

(a)                                  subject to Section 7(f), three (3) months after
the termination of your Continuous Service for any reason other than your
Disability or death, provided that if during any part of such three (3) month
period your option is not exercisable solely because of the condition set forth
in the preceding paragraph relating to “Securities Law Compliance,” your option
shall not expire until the earlier of the Expiration Date or until it shall
have been exercisable for an aggregate period of three (3) months after the
termination of your Continuous Service;

 

(b)                                  subject to Section 7(f), twelve (12) months after
the termination of your Continuous Service due to your Disability;

 

(c)                                  subject to Section 7(f), twelve (12) months after
your death if you die either during your Continuous Service or within three (3)
months after your Continuous Service terminates;

 

(d)                                  the Expiration Date indicated in your Grant
Notice;

 

(e)                                  the day before the tenth (10th) anniversary of
the Date of Grant; or

 

(f)                                    in the event that
your Continuous Service terminates without Cause or because of your Disability
or death, in any such case at a time when you are 55 years old or older and
have Continuous Service of 5 years or more, then, to the extent you were
entitled to exercise your option at the date of such termination, your option
will expire upon the earliest of the fifth anniversary of such date, the
Expiration Date indicated in your Grant Notice, or the day before the tenth
(10th) anniversary of the Date of Grant.

 

If your option is an incentive stock option, note that, to obtain the
federal income tax advantages associated with an “incentive stock option,” the
Code requires that at all times beginning on the date of grant of your option
and ending on the day three (3) months before the date of your option’s
exercise, you must be an employee of the Company or an Affiliate, except in the
event of your death or Disability.  The
Company has provided for extended exercisability of your option under certain
circumstances for your benefit but cannot guarantee that your option will
necessarily be treated as an “incentive stock option” if you continue to
provide services to the Company or an Affiliate as a Consultant or Director
after your employment terminates or if you otherwise exercise your option more
than three (3) months after the date your employment terminates.

 

6

 

8.                                      Exercise.

 

(a)                                  You may exercise the vested portion of your
option (and the unvested portion of your option if your Grant Notice so
permits) during its term by delivering a Notice of Exercise (in a form
designated by the Company) together with the exercise price to the Secretary of
the Company, or to such other person as the Company may designate, during
regular business hours, together with such additional documents as the Company
may then require.

 

(b)                                  By exercising your option you agree that, as a
condition to any exercise of your option, the Company may require you to enter
into an arrangement providing for the payment by you to the Company of any tax
withholding obligation of the Company arising by reason of (1) the exercise of
your option, (2) the lapse of any substantial risk of forfeiture to which the
shares of Common Stock are subject at the time of exercise, or (3) the
disposition of shares of Common Stock acquired upon such exercise.

 

(c)                                  If your option is an incentive stock option, by
exercising your option you agree that you will notify the Company in writing
within fifteen (15) days after the date of any disposition of any of the shares
of the Common Stock issued upon exercise of your option that occurs within two
(2) years after the date of your option grant or within one (1) year after such
shares of Common Stock are transferred upon exercise of your option.

 

9.                                      Transferability.  Your
option is not transferable, except by will or by the laws of descent and
distribution, and is exercisable during your life only by you.  Notwithstanding the foregoing, by delivering
written notice to the Company, in a form satisfactory to the Company, you may
designate a third party who, in the event of your death, shall thereafter be
entitled to exercise your option.

 

10.                               Option Not a Service Contract.  Your
option is not an employment or service contract, and nothing in your option
shall be deemed to create in any way whatsoever any obligation on your part to
continue in the employ of the Company or an Affiliate, or of the Company or an
Affiliate to continue your employment. 
In addition, nothing in your option shall obligate the Company or an
Affiliate, their respective stockholders, Boards of Directors, Officers or
Employees to continue any relationship that you might have as a Director or
Consultant for the Company or an Affiliate.

 

11.                               Withholding Obligations.

 

(a)                                  At the time you exercise your option, in whole or
in part, or at any time thereafter as requested by the Company, you hereby
authorize withholding from payroll and any other amounts payable to you, and
otherwise agree to make adequate provision for (including by means of a
“cashless exercise” pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board to the extent permitted by the
Company), any sums required to satisfy the federal, state, local and foreign
tax withholding obligations of the Company or an Affiliate, if any, which arise
in connection with your option.

 

(b)                                  Upon your request and subject to approval by the
Company, in its sole discretion, and compliance with any applicable conditions
or restrictions of law, the Company may withhold from fully vested shares of
Common Stock otherwise issuable to you upon the

 

7

 

exercise
of your option a number of whole shares of Common Stock having a Fair Market
Value, determined by the Company as of the date of exercise, not in excess of
the minimum amount of tax required to be withheld by law.  If the date of determination of any tax
withholding obligation is deferred to a date later than the date of exercise of
your option, share withholding pursuant to the preceding sentence shall not be
permitted unless you make a proper and timely election under Section 83(b)
of the Code, covering the aggregate number of shares of Common Stock acquired
upon such exercise with respect to which such determination is otherwise
deferred, to accelerate the determination of such tax withholding obligation to
the date of exercise of your option.  Notwithstanding
the filing of such election, shares of Common Stock shall be withheld solely
from fully vested shares of Common Stock determined as of the date of exercise
of your option that are otherwise issuable to you upon such exercise.  Any adverse consequences to you arising in
connection with such share withholding procedure shall be your sole
responsibility.

 

(c)                                  You may not exercise your option unless the tax
withholding obligations of the Company and/or any Affiliate are satisfied.  Accordingly, you may not be able to exercise
your option when desired even though your option is vested, and the Company
shall have no obligation to issue a certificate for such shares of Common Stock
or release such shares of Common Stock from any escrow provided for herein.

 

12.                               Notices.  Any notices provided for in your
option or the Plan shall be given in writing and shall be deemed effectively
given upon receipt or, in the case of notices delivered by mail by the Company
to you, five (5) days after deposit in the United States mail, postage prepaid,
addressed to you at the last address you provided to the Company.

 

13.                               Governing Plan Document.  Your
option is subject to all the provisions of the Plan, the provisions of which
are hereby made a part of your option, and is further subject to all
interpretations, amendments, rules and regulations which may from time to time
be promulgated and adopted pursuant to the Plan.  In the event of any conflict between the provisions of your
option and those of the Plan, the provisions of the Plan shall control.

 

8Exhibit 10.61

 

EMPLOYMENT AGREEMENT

 

THIS
EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into
effective as of June 9, 2003 (the “Effective Date”), by and between AMYLIN PHARMACEUTICALS, INC.,
a corporation (the “Company”),
and GINGER L.
GRAHAM (the “Executive”).  The Company and the Executive are
hereinafter collectively referred to as the “Parties”, and individually referred to
as a “Party”.

 

The Company desires assurance of the association and
services of the Executive in order to retain the Executive’s experience,
skills, abilities, background and knowledge, and is willing to engage the
Executive’s services on the terms and conditions set forth in this Agreement.

 

The Executive desires to be in the employ of the
Company, and is willing to accept such employment on the terms and conditions
set forth in this Agreement.

 

AGREEMENT

 

In consideration of the foregoing recitals and the
mutual promises and covenants herein contained, and for other good and valuable
consideration, the Parties, intending to be legally bound, agree as follows:

 

1.                                      EMPLOYMENT.

 

1.1                               Title.  The Executive shall have the title of President and Chief
Executive Officer of the Company and shall serve in such other capacity or
capacities as the Board of Directors of the Company (the “Board”) may from
time to time prescribe.  The Executive
shall also serve as a member of the Board during her employment as President
and Chief Executive Officer.

 

1.2                               Duties.  The Executive shall do and perform all services, acts or things
necessary or advisable to manage and conduct the business of the Company and
which are normally associated with the position of President and Chief
Executive Officer, consistent with the bylaws of the Company and as required by
the Board.

 

1.3                               Location.  Unless the Parties otherwise agree in
writing, the Executive shall perform services pursuant to this Agreement at the
Company’s offices located in Boulder, Colorado, San Diego, California or at any
other place at which the Company maintains an office; provided, however, that the Company may
from time to time require the Executive to travel temporarily to other
locations in connection with the Company’s business.

 

1.4                               Initial Part-Time Employment.  During the period June 9, 2003 through
August 31, 2003, the Executive’s employment with the Company shall be
part-time.  Effective September 1,
2003, the Executive shall assume the role of President and Chief Executive
Officer on a full-time basis.

 

1

 

2.                                      LOYAL AND CONSCIENTIOUS PERFORMANCE;
NONCOMPETITION.

 

2.1                               Loyalty.  During the Executive’s employment by the Company the Executive
shall devote the Executive’s full business energies, interest, abilities and
productive time to the proper and efficient performance of the Executive’s
duties under this Agreement.

 

2.2                               Non-competition.  Except with the prior written consent of the
Company’s Board of Directors, Executive will not, while employed by the
Company, engage in competition with the Company and/or any of its affiliates,
subsidiaries, or joint ventures currently existing or which shall be
established during Executive’s employment by the Company (collectively, “Affiliates”) either
directly or indirectly, in any manner or capacity, as adviser, principal,
agent, affiliate, promoter, partner, officer, director, employee, consultant,
or otherwise, in any phase of the business of developing, manufacturing and
marketing of products or services which are in the same field of use or which
otherwise compete with the products or services or proposed products or
services of the Company and/or any of its Affiliates unless approved by the
Board.

 

2.3                               Agreement not to Participate in Company’s
Competitors.  During her
employment by the Company, the Executive agrees not to acquire, assume or participate
in, directly or indirectly, any position, investment or interest known by
Executive to be adverse or antagonistic to the Company, its business or
prospects, financial or otherwise or in any company, person or entity that is,
directly or indirectly, in competition with the business of the Company or any
of its Affiliates. Notwithstanding the foregoing, the acquisition or ownership
by the Executive, as a passive investment, of less than two percent (2%) of the
outstanding shares of capital stock of any corporation with one or more classes
of its capital stock listed on a national securities exchange or publicly
traded on the Nasdaq Stock Market or in the over-the-counter market shall not
constitute a breach of this paragraph.

 

3.                                      COMPENSATION.

 

3.1                               Base Salary During Part-Time Employment.  During the period from June 9 to
August 31, 2003, the Executive shall receive an annualized base salary
equivalent to One Hundred Twenty Five Thousand Dollars ($125,000.00) per year,
equivalent to $2,400.00 per week, payable in regular periodic installments in
accordance with Company policy.

 

3.2                               Base Salary.  Effective September 1, 2003, the
Company shall pay the Executive a base salary of Five Hundred Thousand Dollars
($500,000.00) per year, payable in regular periodic payments in accordance with
Company policy.  Such base salary shall
be prorated for any partial year of employment on the basis of a 365-day fiscal
year.  The Compensation Committee of the
Company’s Board of Directors, at its sole discretion, will review the
Executive’s salary on an annual basis.

 

3.3                               Discretionary Bonus.  In addition to the Executive’s base salary,
the Executive will be eligible to receive an annual discretionary bonus of up
to Five Hundred Thousand Dollars ($500,000.00) based upon the achievement of
corporate objectives as determined by the Board under the Company’s bonus plan
for executives then in effect.  The
Board shall determine, in its exclusive discretion, whether the Executive shall
receive any bonus

 

2

 

in any particular
year and the amount of any bonus.  Any
bonus awarded by the Board shall be paid in March of the year following the
performance year.  The target bonus
shall be Four Hundred Thousand Dollars ($400,000.00).  The Compensation Committee of the Board will review the
Executive’s bonus target on an annual basis and determine, in its sole
discretion, whether changes are appropriate.

 

3.4                               Stock Options.  The Executive shall be granted an option to
purchase five hundred thousand (500,000) shares of the Company’s stock at an
exercise price of twenty-three dollars ($23.00) per share (the “Option”). 
The option shall be an incentive stock option to the extent permitted by
applicable tax laws.  The Option is
governed by the terms of the Company’s 2001 Equity Incentive Plan and related
Option Grant Notice.  The Option shall
vest as follows: (i) 350,000 shares shall vest over four (4) years so long
as the Executive remains employed by the Company, with twenty-five percent
(25%) of these shares (87,500) vesting on September 1, 2004, the first
anniversary of the Executive’s full-time employment with the Company, and the
balance of these shares (262,500) vesting 1/36th (7,291.666 shares)
at the end of each monthly period thereafter for a period of three years;
(ii) 50,000 shares shall vest upon the commercial launch of SYMLINTM
(pramlintide acetate) provided that
the Executive is employed by the Company on the date of launch;
(iii) 50,000 shares shall vest upon U.S. Food and Drug Administration
(“FDA”) acceptance of an exenatide New Drug Application provided that the Executive is employed by
the Company on the date of acceptance; and (iv) 50,000 shares shall vest
upon commercial  launch of
exenatide provided that the
Executive is employed by the Company on the date of launch.  Commercial launch of a product shall be
deemed to occur upon the adoption of a resolution by the Board after FDA
approval of such product, such resolution authorizing the Company to enter into
commerce with such product.

 

3.5                               Annual Option Grants.  The executive shall be eligible to receive
annual stock option grants based upon corporate performance, as determined by
the Board in its exclusive discretion.

 

3.6                               Expenses. 
The Company will reimburse Executive for housing expenses in
San Diego for up to $3,000 per month. 
The actual amount will be grossed-up for income tax purposes.  Executive will also be eligible for
reimbursement of other business and travel expenses.

 

3.7                               Employment
Taxes.  All of the Executive’s
compensation shall be subject to customary withholding taxes and any other
employment taxes as are commonly required to be collected or withheld by the
Company.

 

3.8                               Benefits.  The Executive shall, in accordance with
Company policy and the terms of the applicable plan documents, be eligible to
participate in benefits under any executive benefit plan or arrangement which
may be in effect from time to time and made available to the Company’s
executive or key management employees, including but not limited to:  the Company’s Change in Control Employee
Severance Benefit Plan, Deferred Compensation Plan, 401K Savings Plan, Employee
Stock Purchase Plan, group health insurance, disability insurance, life
insurance, and paid personal leave.

 

3

 

4.                                      TERM.

 

4.1                               At-Will Employment.  The Executive shall be employed at
will.  Either the Executive or the
Company may terminate this Agreement and the employment relationship at any
time, with or without notice, for any reason or no reason.

 

4.2                               Survival of Certain Provisions.  Section 5, and to the extent
applicable, Section 2.2, shall survive the termination of this Agreement.

 

5.                                      CONFIDENTIAL AND
PROPRIETARY INFORMATION; NONSOLICITATION.

 

5.1                               As
a condition of employment the Executive agrees to execute and abide by the
Company’s standard Proprietary Information and Inventions Agreement.

 

5.2                               While
employed by the Company and for one (1) year thereafter, the Executive agrees
that in order to protect the Company’s trade secrets and confidential and
proprietary information from unauthorized use, the Executive will not, either
directly or through others, solicit or attempt to solicit any employee,
consultant or independent contractor of the Company to terminate his or her
relationship with the Company in order to become an employee, consultant or
independent contractor to or for any other person or business entity, other
than any administrative assistant or other person in a similar role employed by
the Company to directly assist Executive.

 

6.                                      ASSIGNMENT AND
BINDING EFFECT.

 

This Agreement shall be
binding upon and inure to the benefit of the Executive and the Executive’s
heirs, executors, personal representatives, assigns, administrators and legal
representatives.  Because of the unique
and personal nature of the Executive’s duties under this Agreement, neither
this Agreement nor any rights or obligations under this Agreement shall be
assignable by the Executive.  This
Agreement shall be binding upon and inure to the benefit of the Company and its
successors, assigns and legal representatives.

 

7.                                      CHOICE OF LAW.

 

This Agreement shall be
construed and interpreted in accordance with the internal laws of the State of
California.

 

8.                                      INTEGRATION.

 

This Agreement, the
indemnity agreement dated January 4, 1996, and the Proprietary Information and
Inventions Agreement contains the complete, final and exclusive agreement of
the Parties relating to the terms and conditions of the Executive’s employment
and the termination of the Executive’s employment, and supersedes all prior and
contemporaneous oral and written employment agreements or arrangements between
the Parties, including without limitation any previous letter between Executive
and the Company regarding employment. To the extent this Agreement conflicts
with the Proprietary Information and Inventions Agreement, the Proprietary
Information and Inventions Agreement controls (except with respect to the
prohibition or solicitation of employees for which Section 5.2 of this
Agreement shall control).

 

4

 

9.                                      AMENDMENT.

 

This Agreement cannot be
amended or modified except by a written agreement signed by the Executive and
the Chairman of the Board of the Company.

 

10.                               WAIVER.

 

No term, covenant or
condition of this Agreement or any breach thereof shall be deemed waived,
except with the written consent of the Party against whom the wavier is
claimed, and any waiver or any such term, covenant, condition or breach shall
not be deemed to be a waiver of any preceding or succeeding breach of the same
or any other term, covenant, condition or breach.

 

11.                               SEVERABILITY.

 

The finding by a court of
competent jurisdiction of the unenforceability, invalidity or illegality of any
provision of this Agreement shall not render any other provision of this
Agreement unenforceable, invalid or illegal. 
Such court shall have the authority to modify or replace the invalid or
unenforceable term or provision with a valid and enforceable term or provision
which most accurately represents the Parties’ intention with respect to the
invalid or unenforceable term or provision.

 

12.                               INTERPRETATION;
CONSTRUCTION.

 

The headings set forth in
this Agreement are for convenience of reference only and shall not be used in
interpreting this Agreement.  This
Agreement has been drafted by legal counsel representing the Company, but the
Executive has been encouraged to consult with, and have consulted with, the
Executive’s own independent counsel and tax advisors with respect to the terms
of this Agreement.  The Parties
acknowledge that each Party and its counsel has reviewed and revised, or had an
opportunity to review and revise, this Agreement, and any rule of construction
to the effect that any ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of this Agreement.

 

13.                               REPRESENTATIONS AND WARRANTIES.

 

The Executive represents
and warrants that the Executive is not restricted or prohibited, contractually
or otherwise, from entering into and performing each of the terms and covenants
contained in this Agreement, and that the Executive’s execution and performance
of this Agreement will not violate or breach any other agreements between the
Executive and any other person or entity.

 

5

 

14.                               COUNTERPARTS.

 

This Agreement may be
executed in two counterparts, each of which shall be deemed an original, all of
which together shall contribute one and the same instrument.

 

15.                               LITIGATION COSTS.

 

Should any claim be
commenced between the Parties or their personal representatives concerning any
provision of this Agreement or the rights and duties of any person in relation
to this Agreement, the Party prevailing in such action shall be entitled, in
addition to such other relief as may be granted to a reasonable sum as and for
that Party’s attorney’s fees in such action.

 

IN WITNESS WHEREOF, the Parties have
executed this Agreement as of the date first above written.

 

	
   

  	
  AMYLIN PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
  September 18, 2003

  	
   

  	
  By:

  	
   /s/ JOSEPH C. COOK JR.

  	
   

  
	
   

  	
   

  	
   

  	
  Joseph C. Cook, Jr.

  	
   

  
	
   

  	
   

  	
   

  	
  Chairman
  of the Board

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
  September 18, 2003

  	
   

  	
  By:

  	
  /s/ GINGER L. GRAHAM

  	
   

  
	
   

  	
   

  	
  Ginger L. Graham

  	
   

  
							

 

6

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