As filed with the Securities and Exchange Commission on November 20, 1998.
Registration No. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
INCYTE PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-3136539
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3174 Porter Drive
Palo Alto, California 94304
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(Address of Principal (Zip Code)
Executive Offices)
OPTIONS ISSUED BY INCYTE PHARMACEUTICALS, INC.
TO FORMER OPTIONHOLDERS OF HEXAGEN LIMITED
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(Full title of the plan)
Copy to:
ROY A. WHITFIELD STANTON D. WONG
Chief Executive Officer SALLY BRAMMELL
Incyte Pharmaceuticals, Inc. Pillsbury Madison & Sutro LLP
3174 Porter Drive P.O. Box 7880
Palo Alto, California 94304 San Francisco, CA 94120
(650) 855-0555 (415) 983-1000
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(Name, address and telephone
number, including area code,
of agent for service)
CALCULATION OF REGISTRATION FEE
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Title of Amount Proposed Maximum Proposed Amount of
Securities To To Be Offering Price Maximum Aggregate Registration
Be Registered Registered per Share (1) Offering Price(1) Fee
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Common Stock 125,734 $2.03 $255,240.02 $70.96
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Series A Participating
Preferred Stock
Purchase Rights (2) 125,734 N/A N/A N/A
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Total Registration Fee 125,734 N/A N/A $70.96
(1) Estimated solely for the purposes of calculating the amount of the
registration fee pursuant to Rule 457(h) under the Securities Act of 1933, as
amended, the offering price is based upon the exercise prices for options
previously granted by Hexagen Limited.
(2) Associated with the Common Stock are Series A Participating Preferred Stock
Purchase Rights that will not be exercisable or evidenced separately from the
Common Stock prior to the occurrence of certain events.
The Registration Statement shall become effective upon filing in
accordance with Rule 462 under the Securities Act of 1933.
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Incyte Pharmaceuticals, Inc. (the "Registrant") acquired all of the issued and
outstanding capital stock of Hexagen Limited ("Hexagen") pursuant to a Share
Purchase Agreement, dated as of September 21, 1998, among the Registrant,
Hexagen and the shareholders of Hexagen. The shares to be registered hereunder
are issuable pursuant to (i) options assumed by the Registrant that were
originally granted under The Hexagen Limited Unapproved Company Share Option
Plan 1996 and (ii) share exchange option agreements entered into between the
Registrant and certain consultants to Hexagen who held options to purchase
Hexagen ordinary shares.
PART I
------
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
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Item 1. Plan Information.*
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Item 2. Registrant Information and Employee Plan Annual Information.*
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* Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from the Registration Statement in accordance
with Rule 428 under the Securities Act of 1933 and the Note to Part I
of Form S-8.
PART II
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INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
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Item 3. Incorporation of Certain Documents by Reference.
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The following documents filed by Registrant (File No. 0-27488) with the
Securities and Exchange Commission are incorporated by reference in this
Registration Statement:
(1) The Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997;
(2) The Registrant's Quarterly Reports on Form 10-Q for the quarters ended
March 31, June 30, and September 30, 1998;
(3) Registrant's Current Report on Form 8-K, as amended on Form 8-K/A,
dated January 22, 1998;
(4) The Registrant's Current Reports on Form 8-K dated as of June 12,
August 17, September 2, September 21, and September 25, 1998;
(5) The description of the Registrant's Common Stock contained in the
Registration Statement on Form 8-A filed with the Securities and Exchange
Commission on January 5, 1996; and
(6) The description of the Registrant's Series A Participating Preferred
Stock Purchase Rights contained in the Registration Statement on Form 8-A filed
with the Securities and Exchange Commission on September 30, 1998.
In addition, all documents subsequently filed by the Registrant pursuant to
Section 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior
to the filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this registration
statement and to be a part hereof from the date of filing of such documents.
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Item 4. Description of Securities.
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Not applicable.
Item 5. Interests of Named Experts and Counsel.
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Not applicable.
Item 6. Indemnification of Directors and Officers.
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Section 145 of the Delaware General Corporation Law provides for the
indemnification of officers, directors, and other corporate agents in terms
sufficiently broad to indemnify such persons under certain circumstances for
liabilities (including reimbursement for expenses incurred) arising under the
Securities Act of 1933, as amended (the "Act"). Article VII of the Registrant's
Restated Certificate of Incorporation and Article V of the Registrant's Bylaws
provide for indemnification of the Registrant's directors, officers, employees
and other agents to the extent and under the circumstances permitted by the
Delaware General Corporation Law. The Registrant has also entered into
agreements with its directors and officers that will require the Registrant,
among other things, to indemnify them against certain liabilities that may arise
by reason of their status or service as directors or officers to the fullest
extent not prohibited by law.
Item 7. Exemptions from Registration Claimed.
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Not applicable.
Item 8. Exhibits.
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5.1 Opinion of Pillsbury Madison & Sutro LLP.
10.1 The Hexagen Limited Unapproved Company Share Option Plan 1996,
as amended.
10.2 Form of Share Exchange Option Agreement.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Pillsbury Madison & Sutro LLP (included in Exhibit 5.1).
Item 9. Undertakings.
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(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
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424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
Registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Palo Alto, State of California, on November 19,
1998.
INCYTE PHARMACEUTICALS, INC.
By /s/ ROY A. WHITFIELD
------------------------------
Roy A. Whitfield
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Roy A. Whitfield, Randal W. Scott and Denise M.
Gilbert, and each of them, his true and lawful attorneys-in-fact and agents,
each with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all
amendments, including post-effective amendments, to this Registration Statement,
and to file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Name Title Date
/s/ ROY A. WHITFIELD Chief Executive Officer (Principal November 19, 1998
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Roy A. Whitfield Executive Officer) and Director
/s/ DENISE M. GILBERT, Ph.D. Executive Vice President, Chief November 19, 1998
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Denise M. Gilbert, Ph.D. Financial Officer (Principal
Financial Officer)
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Name Title Date
/s/ WILLIAM DELANEY Corporate Controller (Principal November 19, 1998
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William Delaney Accounting Officer)
/s/ JEFFREY J. COLLINSON Chairman of the Board November 19, 1998
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Jeffrey J. Collinson
/s/ RANDAL W. SCOTT, Ph.D. Director November 19, 1998
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Randal W. Scott, Ph.D.
/s/ BARRY M. BLOOM, Ph.D. Director November 19, 1998
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Barry M. Bloom, Ph.D.
/s/ FREDERICK B. CRAVES, Ph.D. Director November 19, 1998
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Frederick B. Craves, Ph.D.
/s/ JON S. SAXE Director November 19, 1998
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Jon S. Saxe
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INDEX TO EXHIBITS
Exhibit
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Number Exhibit
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5.1 Opinion of Pillsbury Madison & Sutro LLP.
10.1 The Hexagen Limited Unapproved Company Share Option Plan 1996,
as amended.
10.2 Form of Share Exchange Option Agreement.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Pillsbury Madison & Sutro LLP (included in Exhibit 5.1).
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EXHIBIT 5.1
PILLSBURY MADISON & SUTRO LLP
235 Montgomery Street
San Francisco, CA 94104
Tel: (415) 983-1000
November 19, 1998
Incyte Pharmaceuticals, Inc.
3714 Porter Drive
Palo Alto, CA 94304
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
We refer to the Registration Statement on Form S-8 (the "Registration
Statement") to be filed by Incyte Pharmaceuticals, Inc., a Delaware corporation
(the "Company"), with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, relating to 125,734 shares of Common Stock,
par value $.001, of the Company ("Common Stock") issuable (i) upon the exercise
of options originally granted by Hexagen Limited and its predecessor Hexagen
plc, a wholly owned subsidiary of the Company ("Hexagen"), under The Hexagen
Limited Unapproved Company Share Option Plan 1996 (the "Stock Plan"), which
options were assumed by the Company and (ii) upon the exercise by the Company of
its rights under those certain Share Exchange Option Agreements dated as of
September 21, 1998 between the Company and certain former holders of options to
purchase ordinary shares of Hexagen. We advise you that, in our opinion, such
shares of the Common Stock, when issued and sold in accordance with the
applicable Plan or agreement and the Registration Statement, as declared
effective, will be legally issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion with the Securities and
Exchange Commission as Exhibit 5.1 to the Registration Statement.
Very truly yours,
/s/ PILLSBURY MADISON & SUTRO LLP
E-09545
EXHIBIT 10.1
THE HEXAGEN LIMITED UNAPPROVED
COMPANY SHARE OPTION PLAN 1996
Adopted by the Company on 18th November 1996
Amended on 28th January 1997
Amended on 21st September 1998
Cameron McKenna
Mitre House, 160 Aldersgate Street
London EC1A 4DD
Tel: 0171 367 3000 Fax: 0171 367 2000
TABLE OF CONTENTS
Page
----
1. Definitions..........................................................1
2. Participation........................................................3
3. Exercise Condition and Vesting.......................................4
4. Market Value.........................................................5
5. Rights to exercise options...........................................5
6. Exercise of options..................................................7
7. Adjustment of options for variation of share capital.................7
8. Expenses.............................................................8
9. Indemnity............................................................8
10. Administration.......................................................9
11. General..............................................................9
12. Alterations........................................................ 10
13. Trustees........................................................... 10
14. Inland Revenue Requests............................................ 10
15. Termination........................................................ 11
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1. Definitions
1.1 In this Plan the words and expressions set out below shall have the
meanings specified against them unless otherwise specifically
provided and any reference to a provision of an Act of Parliament
shall include any modification, consolidation, re-enactment or
extension of it.
"the Auditors" the auditors (acting as expert not arbitrators) for
the time being of the Company or in the event of there
being joint auditors such one of them as the Directors
shall select;
"Business Day" a day on which mid market spot currency rates against
pounds sterling are published in the Financial Times;
"the Company" Hexagen Limited;
"Control" the meaning given to that expression by Section 840 of the
Taxes Act;
"Date of Adoption" the date of the adoption of this Plan;
"Date of Announcement" the date on which the Company makes an announcement of
its results for the last preceding financial year, half year or
other period;
"Date of Grant" the date which is specified in the Option Certificate issued in
accordance with Rule 2.5;
"Dealing Day" a day on which the London Stock Exchange or any other
market that is supervised by a regulatory authority is open
for the transaction of business;
"Directors" the Directors for the time being of the Company or the
Directors present at a duly convened meeting of the
Directors or of a duly appointed committee of the
Directors at which a quorum is present including, without
limiting the generality of the foregoing, the
Remuneration Committee;
"Eligible Person" any person who at the Date of Grant, is a director of the
Company and/or any Subsidiary or any employee of the
Company and/or any Subsidiary;
"Exercise Condition" a condition attaching to an Option in accordance with Rule
2.2;
"Group Member" a Participating Company or a body corporate which is
(within the meaning of Section 736 of the Companies Act
1985) the Company's holding company or a Subsidiary of
the Company's holding company or any other body
corporate nominated by the Board for this purpose which is
not under the Control of any single person, but is under the
Control of two or more persons, one of whom being the
Company or the Company's holding company and in relation
to which the Company, or as the case may be, the
Company's holding company is able (whether directly or
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indirectly) to exercise 20% or more of its equity voting
rights;
"Issue or Re-organisation" any issue of shares or other securities of the Company (other
than as consideration for an acquisition) and/or any
capitalisation, consolidation or sub-division or reduction of
share capital in the Company and/or any other variation in
the share capital of the Company which in the opinion of the
Auditors justifies a variation in the number of shares subject
to an Option and/or the Option Price pursuant to that Option;
"the London Stock Exchange" London Stock Exchange Limited;
"Market Value" such value per share, in relation to which an Option is to be
granted, as the Company may consider to be the market
value thereof on the day preceding the relevant Date of
Grant or, if later, the date of the Directors' resolution to
grant an Option pursuant to Rule 2.5 and determined in
accordance with Part VIII of the Taxation of Chargeable
Gains Act 1992 or if such shares are at that time listed on
the London Stock Exchange the average of the middle
market quotations of a share as derived from the London
Stock Exchange Daily Official List on the 3 Dealing Days
preceding the relevant Date of Grant or if such shares are at
that time not listed on the London Stock Exchange but are
listed on another market supervised by any regulatory
authority the average of the middle market quotations of a
share as derived from the relevant official daily publication
of that market on the three Dealing Days preceding the
relevant Date of Grant (and where the price is not quoted in
(pound) Sterling converted at the closing mid-point spot rate of
exchange in the London foreign exchange markets);
"Non-vested Option" shall be that part of an Option that has the meaning
described in Rule 3.2;
Normal Anticipated Retirement the date upon which an Eligible Person attains 65 years of
Date" age or such other age at which an Eligible Person is required to
retire by his contract of employment;
"Option" a right granted to acquire shares in the Company;
"Option Certificate a certificate issued to an Option Holder in accordance with
Rule 2.5;
"Option Holder" a person holding an Option;
"Option Price" the acquisition price for a share comprised in any
Option which shall be determined by the Directors
and shall be not less than the nominal value of a share;
"Parallel Options" options granted contemporaneously under any other
discretionary share option scheme adopted by the Company
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or any Subsidiary and which are expressed to be linked to
Options granted under this Plan;
"Participating Company" the Company and any Subsidiary which is for the time being
nominated by the Directors to be a company participating in
this Plan;
"this Plan" the Hexagen Limited Unapproved Company Share
Option Plan 1996 established by these Rules in its present
form or as from time to time amended in accordance with
the provisions hereof;
"Redundancy" dismissal by reason of redundancy within the meaning
given to that term by the Employment Protection
(Consolidation) Act 1978 or the Contracts of Employment
and Redundancy Payments Act (Northern Ireland) 1965;
"the Remuneration Committee" the remuneration committee of the board of Directors;
"Retirement" retirement at Normal Anticipated Retirement Date
or such other date at which it is agreed with the Group
Member by which he is employed that such Eligible
Person may retire;
"Subsidiary" a company which is both under the Control of the Company
and which is a subsidiary of the Company within the
meaning of Section 736 of the Companies Act 1985;
"the Taxes Act" the Income and Corporation Taxes Act 1988 (as amended);
"Vested Option" shall be that part of an Option that has the meaning
described in Rule 3.2;
"Vested Shares" shares allotted or transferred to an Option Holder pursuant to
Rule 6.3 following the valid exercise of a Vested Option;
"Year of Assessment" a fiscal year from 6th April to 5th April;
1.2 In these Rules unless the context otherwise requires words denoting the
singular number shall include the plural number and words denoting the
masculine gender shall include the feminine gender.
2. Participation
2.1 The Directors with the approval of the Remuneration Committee may, on
such dates as they shall determine (subject to Rules 2.3 and 2.4 below)
grant Options to such Eligible Persons as they may in their absolute
discretion select. No Eligible Person shall be entitled as of right to
participate in this Plan.
2.2 The Directors acting on the recommendation of the Remuneration
Committee may impose an objective condition on any Option which they
grant preventing its exercise (other than in accordance with Rules 5.2,
(except in the case of Retirement) and 5.3) unless such condition has
been complied with ("the Exercise Condition"). If, after the Directors
have imposed an Exercise Condition, events happen which cause them to
consider that it is no longer appropriate they may vary the Exercise
Condition.
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2.3 Subject to Rule 2.4 below if and for so long as the shares in the
Company are admitted to the Official List of the London Stock Exchange
or are admitted to trading on the Alternative Investment Market or in
any other market supervised by any regulatory authority the Directors
may only grant Options within the periods commencing:
2.3.1 on the fourth Dealing Day next following the Date of
Adoption and ending 42 days after such Date of Adoption; or
2.3.2 on the fourth Dealing Day next following a Date of
Announcement and ending 42 days after such Date of
Announcement.
2.4 Notwithstanding Rule 2.3 above the Directors may grant Options outside
the periods specified in Rule 2.3 above in circumstances which the
Directors in their absolute discretion deem sufficiently exceptional to
justify the grant of options at that time.
2.5 The Directors shall grant Options by resolution. As soon as practicable
thereafter, the Directors shall issue in respect of each Option granted
as aforesaid an Option Certificate given under seal or executed as a
deed which Option Certificate will specify the Date of Grant. The
Option Certificate shall be in such form as the Directors shall from
time to time determine and shall specify the number of shares comprised
in the Option, the Date of Grant as determined by the Directors, any
Exercise Condition and Parallel Option Condition and the Option Price.
For the avoidance of doubt the Directors may specify a Date of Grant
which pre-dates the date of the resolution to grant an Option.
2.6 Any Eligible Person to whom an Option is granted may by notice given in
writing within 30 days after the Option Certificate is issued to them
renounce his rights thereto, in which event such Option shall be deemed
for all purposes never to have been granted.
2.7 Each Option shall be personal to the Option Holder to whom it is
granted and other than a transfer to the Option Holder's personal
representatives on death shall not be transferable, assignable or
chargeable. Any other purported transfer, assignment, charge, disposal
or dealing with the rights and interests of the Option Holder under
this Plan shall render the Option void.
2.8 The Directors may also impose a condition ("the Parallel Option
Condition") on any Option that in the event of the Option Holder
exercising a Parallel Option, that Option shall immediately lapse in
respect of the underlying shares in respect of which the Parallel
Option shall have been exercised.
2.9 For the purpose of Rule 2.8 Options shall be treated as lapsing in the
order in which they were originally granted.
2.10 In the event of an Option lapsing under Rule 2.8 in part only, the
balance of the Option shall continue to be exercisable in accordance
with this Plan.
3. Exercise Condition and Vesting
3.1 An Option granted pursuant to this Plan shall, unless decided otherwise
by the Directors and stated on the Option Certificate, be subject to a
vesting arrangement such that the following Exercise Condition shall
apply:
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Time of Exercisability Maximum percentage of relevant
---------------------- ------------------------------
of relevant option option that may be exercised
------------------ ----------------------------
prior to 1st anniversary of the Date of Grant 0%
upon the 1st anniversary of the Date of Grant 25%
after 1 year from the Date of Grant but the 25% plus approximately
before the 4th anniversary from Date of Grant 2.0834% for each complete
month after the first 12
months from the Date of Grant
on or after the 4th anniversary of the 100%
Date of Grant
3.2 The part of an Option which has become exercisable pursuant to the
terms of Rule 3.1 or any other Exercise Condition that may be imposed
shall be termed a "Vested Option", whereas the part of an Option which
has yet to reach the date of exercise pursuant to the terms of Rule 3.1
or any other Exercise Condition shall be termed a "Non-vested Option".
3.3 Upon the allotment or transfer of Vested Shares to an Option Holder (or
his nominee), the shares shall be the property of the Option Holder.
For the avoidance of doubt, the allotment or transfer of such Vested
Shares to an Option Holder (or his nominee) shall be irrevocable
regardless of whether the Option Holder remains or ceases to be an
eligible person of a Group after the date of allotment or transfer as
the case may be.
4. Market Value
4.1 For the purpose of this Plan, the market value of the shares in
relation to which the Option was granted shall be calculated in the
case of an Option granted under this Plan by reference to the Market
Value (as defined in Rule 1.1 above).
4.2 No Options shall in any event be offered more than 10 years after the
Date of Adoption.
5. Rights to exercise options
5.1 Subject to the provisions of Rules 5.2 and 5.3 an Option shall be
capable of being exercised in accordance with the provisions of Rule 6:
5.1.1 not earlier than such date as the Directors shall decide
and indicate in the Option Certificate
concerned; and
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5.1.2 before the seventh anniversary of its Date of Grant or such
earlier date as the Directors may specify,
Provided that any relevant Exercise Condition has been satisfied,
unless the Rules provide otherwise.
No Option may be granted, exercised, released or surrendered at a time
when such grant, exercise, release or surrender would not be in
accordance with the "Model Code for Securities Transactions by
Directors of Listed Companies" issued by the London Stock Exchange as
amended from time to time.
5.2 If an Option Holder ceases for any reason (otherwise than by reason of
his death) to be an Eligible Person of a Group Member any Vested Option
at the date of such event or cessation held by him may (and subject to
Rule 5.3 below may, if at all) be exercised within 12 months of such
event or cessation subject always to satisfaction of any relevant
Exercise Condition. Any Non-vested Option shall lapse upon the date of
such event or cessation and shall not be exercisable during the period
of 12 months thereafter or at any other time unless the Directors
otherwise permit.
For the avoidance of doubt and without prejudice to the generality of
this Rule 5.2 the reasons for an Option Holder ceasing to be an
Eligible Person of a Group Member includes: termination of his
employment with a Group Member by him or by a Group Member under the
conditions of his contract with such Group Member; injury; disability;
pregnancy; sickness; Redundancy; Retirement; the company for which the
Option Holder works ceasing to be a Group Member; or the business or
part- business in which the Option Holder works being transferred to a
person who is not a Group Member.
An Option Holder shall not be treated for the purposes of this Rule 5.2
as ceasing to be an Eligible Person of a Group Member until such time
as he is no longer a director or employee of any Group Member, and a
female Option Holder who ceases to be such an Eligible Person by reason
of pregnancy or confinement and who returns to work at the end of the
maternity leave period conferred on her by section 33 of the Employment
Protection (Consolidation) Act 1978 or who exercises her right to
return to work following maternity absence in the circumstances
described in section 39 of the Employment Protection (Consolidation)
Act 1978 (or otherwise returns to work if the Directors so determine)
before exercising an Option under this Plan shall be treated for those
purposes as not having ceased to be such an Eligible Person. For the
avoidance of doubt the period of maternity absence for a female Option
Holder who returns to work in the circumstances described in Section 39
of the Employment Protection (Consolidation) Act 1978 shall qualify in
full for any vesting period pursuant to the Exercise Condition set out
in Rule 3.1 or any other Exercise Condition meaning that there shall be
no interruption in any vesting period during such maternity absence.
5.3 If an Option Holder dies before exercising an Option granted to him
under this Plan and at a time when he is either an Eligible Person of a
Group Member or entitled to exercise the Option by virtue of Rule 5.2
above, any Vested Option at the date of his death may (and must, if at
all) be exercised by his personal representatives within 12 months
after the date of his death. Any Non-vested Option shall lapse upon the
date of his death and shall not be exercisable by his personal
representatives during the period of 12 months thereafter or at any
other time, unless the Directors otherwise permit. For the avoidance of
doubt, if an Option Holder dies before exercise of a Vested Option in
the 12 months subsequent to his ceasing to be an Eligible Person of a
Group Member pursuant to Rule 5.2 above, his personal representatives
may exercise the Vested Option within 12 months after the date of
death, notwithstanding the period that has elapsed since his ceasing to
be an Eligible Person of a Group Member.
5.4 Notwithstanding any other provision of this Plan, an Option granted
under this Plan may not be exercised after the expiration of the period
of 7 years (or such shorter period as the Directors may have determined
before the grant thereof) beginning with the Date of Grant.
-6-
6. Exercise of options
6.1 Options may be exercised in whole or in part.
6.2 The exercise of any Option granted under this Plan shall be effected by
giving notice to the Company and otherwise in such form and manner as
the Directors may from time to time prescribe and, unless the Directors
determine otherwise, any such notice shall have effect only on its
receipt by the Company, together with the appropriate payment.
6.3 Subject to Rule 6.4 below, within 30 days after an Option under this
Plan has been exercised by any person, the Directors on behalf of the
Company shall allot to him (or his nominee) or, as appropriate, procure
the transfer to him (or his nominee) of the number of shares in respect
of which the Option has been exercised, provided that, for the
avoidance of doubt, where shares are so allotted or transferred to a
nominee, the beneficial interest in them must vest in the person who
exercised the Option.
6.4 All shares allotted under this Plan shall rank pari passu in all
respects with the shares of the same class for the time being in issue
save as regards any rights attaching to such shares by reference to a
record date prior to the date of the allotment, and in the case of the
transfer of existing shares, the transferee shall not acquire any
rights attaching to such shares by reference to a record date prior to
the date of the transfer.
6.5 The allotment or transfer of any shares under this Plan shall be
subject to obtaining any approval or consent mentioned in Rule 12.5
below.
7. Adjustment of options for variation of share capital
7.1 In the event of a subdivision of the outstanding shares ("Shares") of
the company whose shares may be acquired by the exercise of Options
granted under this Plan (hereinafter, the "Company"), a declaration of
a dividend payable in Shares or other securities of the Company, a
declaration of a dividend payable in a form other than Shares or other
securities of the Company in an amount that has a material effect on
the value of Shares, a combination or consolidation of the outstanding
Shares into a lesser number of Shares, a recapitalisation, a spinoff, a
reclassification or a similar occurrence, the Board of Directors of the
Company (or the committee thereof to which administration of this Plan
has been delegated) shall make appropriate adjustments in one or both
of:
7.1.1 the number of whole Shares issuable pursuant to the
exercise of each outstanding Option; or
7.1.2 the exercise price under each outstanding Option.
7.2 In the event that the Company is a party to a merger or other
reorganisation, outstanding Options shall be subject to the agreement
of merger or reorganisation. Such agreement may provide, without
limitation:
7.2.1 for the assumption of outstanding Options by the surviving
corporation or its parent and for the administration of the
Plan by the surviving corporation or its parent;
7.2.2 for their continuation by the Company, if the Company is a
surviving corporation;
7.2.3 for payment of a cash settlement equal to the difference
between the amount to be paid for a Share pursuant to such
agreement and the exercise price; or
-7-
7.2.4 for the acceleration of their exercisability followed by
the cancellation of Options not exercised,
in all cases without the Option Holders' consent. Any cancellation
shall not occur until after such acceleration is effective and Option
Holders have been notified of such acceleration.
7.3 Except as provided in this Rule 7, an Option Holder shall have no
rights by reason of:
7.3.1 any subdivision or consolidation of shares of stock of any
class or series of the Company;
7.3.2 the payment of any dividend; or
7.3.3 any other increase or decrease in the number of shares of
stock of any class or series of the Company. Any issue by
the Company of shares of stock of any class or series, or
securities convertible into shares of stock of any class
or series, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or Option
Price of Shares subject to an Option. The grant of an
Option pursuant to the Plan shall not affect in any way the
right or power of the Company to make adjustments,
reclassifications, reorganisations or changes of its
capital or business structure, to merge or consolidate or
to dissolve, liquidate, sell or transfer all or any part
of its business or assets.
7.4 As soon as reasonably practicable after making any adjustment under
Rule 7.1 above, the Directors shall give notice in writing thereof to
any Option Holders affected thereby.
8. Expenses
Any expenses of the Company involved in any issue or transfer of shares
in the name of any Option Holder or his personal representative(s) or
nominee(s) shall be payable by the Company.
9. Indemnity
9.1 In any case where an Option holder exercises his option and:
9.1.1 the Company is treated, by virtue of any of Sections 203B to
203I of the Taxes Act, as having made a payment of income of
an Option holder which is assessable to income tax under
Schedule E; and
9.1.2 the Company is required by virtue of Section 203J(3) of the
Taxes Act, to account for an amount of income tax ("the
due amount") in respect of that payment;
the Option holder shall, before the end of the period of thirty days
from the date on which the Company is treated as making that payment,
make good to the Company the amount so accounted for.
9.2 Unless the Option holder pays the due amount to the Company in
accordance with Rule 9.1, shares will not be issued or transferred to
the Option Holder, as the case may be, nor shall the Option holder's
name be entered in the Register of Members of the Company until such
time as the due amount is paid to the Company.
-8-
10. Administration
10.1 Any notification or other notice in writing which the Company is
required to give, or may desire to give, to any Eligible Person or
Option Holder (or his personal representative(s)) in pursuance of this
Plan shall be sufficiently given if delivered to him by hand or sent
through the post in prepaid cover addressed to the Eligible Person or
Option Holder (or his personal representative(s)) at the last address
known to the Company as being his address. Any certificate,
notification or other notice in writing required to be given to the
Company shall be properly given if sent to or delivered to the Company
at its registered office. Any notification, certificate or other
notices sent by post shall be deemed delivered on the second day
following the date of posting. All notices documents certificates given
by or to an Eligible Person or Option Holder (or his personal
representative(s)) shall be sent at his risk.
10.2 Option Holders (or their personal representative(s)) shall have made
available to them copies of all notices and other documents sent by the
Company to its holders of shares generally.
11. General
11.1 The Directors shall at all times ensure that there are sufficient
shares available as may be required to meet the subsisting rights of
Option Holders by either ensuring that the Company shall at all times
keep available for allotment unissued shares at least sufficient to
satisfy Options under which shares may be subscribed for and/or to
procure that sufficient shares are available for transfer to satisfy
Options.
11.2 The Company shall at its expense make application to the London Stock
Exchange for admission to the Official List of all shares allotted
pursuant to the exercise of any Option provided that shares are at that
time listed on the London Stock Exchange.
11.3 The decision of the Directors in any dispute or question relating to
any Option shall be final and conclusive, subject to the written
confirmation of the Auditors whenever required under the provisions of
this Plan.
11.4 Participation in this Plan by an Option Holder is a matter entirely
separate from any pension right or entitlement he may have and from his
terms or conditions of employment with any Group Member and
participation in this Plan shall in no respects whatever affect in any
way an Option Holder's pension rights or entitlement or terms or
conditions of employment with any Group Member. In particular (but
without limiting the generality of the foregoing words) any Option
Holder who leaves employment with any Group Member shall not be
entitled to any compensation for any loss of any right or benefit or
prospective right or benefit under this Plan which he might otherwise
have enjoyed whether such compensation is claimed by way of damages for
wrongful dismissal or breach of contract or by way of compensation for
loss of office or otherwise howsoever.
11.5 The grant of an Option shall be subject to obtaining any approval or
consent required under the provisions of the document "Admission of
Securities to Listing" published by the London Stock Exchange, of the
City Code on Takeovers and Mergers, or of any regulations and
enactments.
11.6 In the event that shares are transferred or issued to an Option Holder
in pursuance of any Option granted under this Plan, the Option Holder
shall, if so required by the person making the transfer, join that
person in making a claim for relief under section 165 of the Taxation
of Chargeable Gains Act 1992 in respect of the disposal made by him in
effecting such transfer.
-9-
12. Alterations
12.1 Subject to Rules 12.2, 12.4 and 12.5 below, the Directors may at any
time alter or add to all or any of the provisions of this Plan, or the
terms of any Option granted under it (including the Exercise
Condition), in any respect. For the avoidance of doubt however no
alteration, deletion or addition to the Exercise Condition shall
require the approval by ordinary resolution of the members of the
Company in general meeting, as described in Rule 12.2.
12.2 Subject to Rule 12.3 below, no alteration or addition to the advantage
of Option Holders shall be made under Rule 12.1 above without the prior
approval by ordinary resolution of the members of the Company in
general meeting.
12.3 Rule 12.2 above shall not apply to any alteration or addition which:-
12.3.1 is necessary or desirable in order to comply with the
provisions of any proposed or existing legislation,
or to obtain or maintain favourable taxation,
exchange control or regulatory treatment of any
Participating Company, Group Member or Option Holder,
and is not made to Rule 3 above or
12.3.2 is minor in nature and is made to benefit the
administration of this Plan.
12.4 No alteration or addition to the disadvantage of any Option Holder
shall be made under Rule 12.1 above unless:-
12.4.1 the Directors shall have invited every relevant Option
Holder to give an indication as to whether or not he
approves the alteration or addition, and
12.4.2 the alteration or addition is approved by a majority of
those Option Holders who have given such an indication.
12.5 As soon as reasonably practicable after making any alteration or
addition under Rule 12.1 above, the Directors shall give notice in
writing thereof to any Option Holder affected thereby.
13. Trustees
A Participating Company may provide money to the trustees of any trust
or any other person to enable him to acquire shares to be held for the
purposes of this Plan, or enter into any guarantee or indemnity for
these purposes, to the extent permitted by Section 153 of the Companies
Act 1985.
14. Inland Revenue Requests
The Company shall provide to the Inland Revenue (within such time limit
as the Inland Revenue directs) any information required by it and an
Option Holder shall:-
14.1 promptly provide to the Company such information as it may reasonably
request; and
14.2 consent to the Company providing such information concerning him to the
Inland Revenue for the purpose of complying with such request from the
Inland Revenue.
-10-
15. Termination
The Company in general meeting or the Directors may at any time resolve
to terminate this Plan in which event no further Options shall be
granted, but the provisions of this Plan shall in relation to Options
then subsisting continue in full force and effect.
-11-
EXHIBIT 10.2
Dated
1998
- ---------------------------------------------------------------
[ ]
AND
INCYTE PHARMACEUTICALS, INC.
AND
HEXAGEN LIMITED
----------------------------------------
SHARE EXCHANGE OPTION AGREEMENT
----------------------------------------
Cameron McKenna
Mitre House
160 Aldersgate Street
London EC1A 4DD
T +44(0)171 367 3000
F +44(0)171 367 2000
Table of Contents
1. Recitals..............................................................1
2. Definitions...........................................................1
3. Grant of Exchange Option..............................................2
4. Exercise of Original Option by Option Holder..........................2
5. Exercise of Option Holder Exchange Option.............................2
6. Exercise of Incyte Exchange Option....................................2
7. Consideration.........................................................3
8. Completion............................................................3
9. Transfer Formalities..................................................3
10. Governing Law........................................................3
-i-
Dated:
BETWEEN:
(1) of (the "Option Holder"); and
(2) INCYTE PHARMACEUTICALS, INC., a corporation incorporated in the State
of Delaware, USA whose principal place of business is at 3174 Porter
Drive, Palo Alto, CA 94304, United State of America ("Incyte"); and
(3) HEXAGEN LIMITED (registered in England with number 317808) whose
registered office is at 214 Cambridge Science Park, Milton Park,
Cambridge, CB4 4WA ("Hexagen").
1. Recitals
1.1 The Option Holder holds options over [ ] ordinary shares in Hexagen
(the "Original Share Option") pursuant to an option agreement between
the Option Holder and Hexagen executed on __________________________
(the "Original Option Agreement").
1.2 Upon exercise of the Original Share Option the Option Holder wishes to
have the opportunity to offer to Incyte and Incyte wishes to have the
opportunity to require the purchase of the Hexagen ordinary shares
issued in respect thereof in exchange for Incyte Common Stock.
1.3 Incyte is prepared to offer to the Option Holder in exchange for his
ordinary shares in Hexagen such number of shares of Incyte Common Stock
as is determined in accordance with the provisions of this Agreement.
Should the Original Share Option be exercised in full, [ ] shares of
Incyte Common Stock (subject to adjustment as provided in clause 7.1)
would be offered in exchange for such Hexagen shares.
2. Definitions
"Incyte Common Stock" means the common stock, $0.001 par value, of
Incyte, and any securities of Incyte issued as a dividend or other
distribution with respect to or in exchange for or in replacement of
such Common Stock.
"Incyte Exchange Option" means the option granted to Incyte under
clause 3.1;
"Exchange Options" means the Incyte Exchange Option and the Option
Holder Exchange Option;
"Exchange Ratio" means the calculation set out at Schedule III to the
Share Purchase Agreement between Incyte, Hexagen and the shareholders
of Hexagen being Appendix A to an agreement between Incyte and Hexagen
dated 14th August 1998;
"Exchange Shares" means the Incyte Common Stock to be issued and
exchanged by Incyte for Hexagen Shares as set out herein;
"Original Option Agreement" means an Agreement granting the Original
Share Option to the Option Holder under the terms and conditions
specified therein;
"Original Share Option" means the option to acquire ordinary shares in
Hexagen granted by Hexagen pursuant to the Original Option Agreement to
the Option Holder;
-1-
"Option Holder Exchange Option" means the option granted to the Option
Holder under clause 3.2; and
"Hexagen Shares" means the ordinary shares in Hexagen issued to the
Option Holder following the exercise of his Original Share Option.
3. Grant of Exchange Option
3.1 The Option Holder grants to Incyte an option to purchase his Hexagen
Shares in accordance with the terms herein.
3.2 Incyte grants to the Option Holder an option to require Incyte to
purchase his Hexagen Shares in accordance with the terms herein.
4. Exercise of Original Option by Option Holder
When the Original Share Option becomes exercisable the Option Holder
may exercise it in whole or in part in accordance with the terms of the
Original Share Option.
5. Exercise of Option Holder Exchange Option
5.1 If the Option Holder wishes to exercise his Option Holder Exchange
Option, he shall be required to give notice in writing (the "Exchange
Exercise Notice") to Incyte of his intention to exercise the Option
Holder Exchange Option no later than five days following his exercise
of an Original Share Option, whether such exercise be in whole or part.
The Exchange Exercise Notice shall indicate the number of Hexagen
Shares in respect of which the exercise is to take effect.
5.2 For the avoidance of doubt, the Option Holder shall be entitled to so
exercise his Option Holder Exchange Option on each occasion that he
exercises an Original Share Option (whether in whole or part).
6. Exercise of Incyte Exchange Option
6.1 The Option Holder is required to give notice in writing (the "Option
Exercise Notice") to Incyte upon any exercise by him of the Original
Share Option and such Option Exercise Notice shall be given no later
than five days following his exercise of an Original Share Option. The
Option Exercise Notice shall set out the number of shares in respect of
which he has so exercised the Original Share Option. The Option Holder
acknowledges that the service on Incyte itself of such Option Exercise
Notice within five days of the exercise of an Original Share Option is
to be a requirement for a valid exercise of the said Original Share
Option.
6.2 If Incyte wishes to exercise its Incyte Exchange Option, it shall be
required to give notice in writing to the Original Option Holder no
later than five days following receipt of the Option Exercise Notice,
such notice by Incyte to indicate the number of Hexagen Shares in
respect of which it so exercises the Incyte Exchange Option.
-2-
7. Consideration
7.1 On any exercise of an Incyte Exchange Option or an Option Holder
Exchange Option, the consideration payable by Incyte for the
acquisition of Hexagen Shares from the Option Holder shall be the issue
of Exchange Shares in accordance with the Exchange Ratio provided
always that in the event of a rights or capitalisation issue in respect
of the shares in Incyte, or a reduction, consolidation, subdivision or
reorganisation of Incyte's share capital, such number of Exchange
Shares to be issued to the Option Holder shall be subject to adjustment
by the Directors of Incyte so as to protect any appreciation in the
value of the shares over which Incyte Exchange Option or an Option
Holder Exchange Option is granted and if there be a dispute over the
number of Exchange Shares to be issued hereunder, such dispute is to be
settled by Incyte's auditors for the time being, acting as experts and
not as arbitrators, who shall decide what is fair and reasonable.
8. Completion
8.1 Completion of the exchange of any Hexagen Shares for Exchange Shares
hereunder shall take place within seven business days of the giving of
the relevant notice to exercise the Exchange Options hereunder pursuant
to Clause 5 or Clause 6 as the case may be.
8.2 On the date of completion, Incyte shall issue a share certificate for
the relevant number of Exchange Shares and deliver it to the Option
Holder in exchange for the delivery by the Option Holder to Incyte of a
share transfer, duly executed, in favour of the Company in respect of
the relevant Hexagen Shares together with the certificate in respect of
the Hexagen Shares.
9. Transfer Formalities
The Option Holder hereby irrevocably appoints such one of the Directors
of Hexagen as Incyte shall nominate in writing as the Option Holder's
attorney to execute, upon any completion as aforesaid, on his behalf
any transfer of Hexagen Shares in favour of Incyte (or as Incyte may
direct) and such other documents as may be necessary to transfer title
thereto.
10. Governing Law
The construction, validity and performance of this Agreement shall be
governed in all respects by English Law.
IN WITNESS whereof this Agreement has been executed as a Deed the day and year
first above written.
EXECUTED as a Deed by )
[ ] )
in the presence of: )
.................................. Signature of Witness
.................................. Name
.................................. Address
..................................
.................................. Occupation
-3-
EXECUTED as a Deed by )
INCYTE PHARMACEUTICALS, INC. )
acting by )
Authorized Officer
Secretary
EXECUTED as a Deed by )
HEXAGEN LIMITED acting by )
Director
Director/Secretary
-4-
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8) pertaining to options issued by Incyte Pharmaceuticals,
Inc. to former optionholders of Hexagen Limited of our report dated January 12,
1998, except for "Principles of Consolidation" in Note 1 and paragraph 3 of
Note 7 as to which the date is January 22, 1998, with respect to the
consolidated financial statements of Incyte Pharmaceuticals, Inc. included in
its Current Report on Form 8-K dated June 12, 1998, filed with the Securities
and Exchange Commission.
/s/ ERNST & YOUNG LLP
Palo Alto, California
November 19, 1998
