-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PZ9rISUzbJYqD3mH4t8//aYByvYs5onbVrgd1D7bEDn9T2XPRsAxVQ+PFGMcY+DP ndYGHl+2otTr68qHKFX/Yw== 0000950103-00-000208.txt : 20000214 0000950103-00-000208.hdr.sgml : 20000214 ACCESSION NUMBER: 0000950103-00-000208 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20000211 EFFECTIVENESS DATE: 20000211 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IMCLONE SYSTEMS INC/DE CENTRAL INDEX KEY: 0000765258 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 042834797 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-30172 FILM NUMBER: 535661 BUSINESS ADDRESS: STREET 1: 180 VARICK ST CITY: NEW YORK STATE: NY ZIP: 10014 BUSINESS PHONE: 2126451405 MAIL ADDRESS: STREET 1: 180 VARICK ST CITY: NEW YORK STATE: NY ZIP: 10014 S-8 1 As filed with the Securities and Exchange Commission on February 11, 2000 Registration No. 333-____ ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------------- FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 IMCLONE SYSTEMS INCORPORATED (Exact name of registrant as specified in its charter) Delaware 04-2834797 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 180 Varick Street New York, New York 10014 (Address of Principal Executive Offices) (Zip code) ImClone Systems Incorporated 1996 Incentive Stock Option Plan, As Amended ImClone Systems Incorporated 1996 Non-Qualified Stock Plan, As Amended ImClone Systems Incorporated 1998 Non-Qualified Stock Option Plan, As Amended Option to Purchase 60,000 Shares of Common Stock (Full title of the plan) ----------------------- John B. Landes Vice President, Business Development and General Counsel ImClone Systems Incorporated 180 Varick Street New York, New York 10014 (Name and address of agent for service) (212) 645-1405 (Telephone number, including area code, of agent for service) ----------------------- Copy to: Richard A. Drucker, Esq. Davis Polk & Wardwell 450 Lexington Avenue New York, New York 10017 (212) 450-4000 CALCULATION OF REGISTRATION FEE ===================================================================================================================== Proposed maximum Proposed maximum Title of securities Amount to be offering price per aggregate Amount of to be registered registered (1) share offering price registration fee - --------------------------------------------------------------------------------------------------------------------- Common Stock, $.001 par value........ 2,000,000 shares $ 68.94 (2) $ 137,880,000 (2) $36,400.32 1,000,000 shares $ 68.94 (2) $ 68,940,000 (2) $18,200.l6 60,000 shares $ 8.44 (3) $ 506,400 (3) $ 133.70 - --------------------------------------------------------------------------------------------------------------------- Totals............................ 3,060,000 shares $ 207,326,400 $54,734.18 =====================================================================================================================
- ------------------- (1) Plus an additional indeterminate number of shares as may be issuable pursuant to the anti-dilution provisions of the Plans (as defined) and award agreements. This total represents (i) 1,000,000 shares of Common Stock reserved for issuance pursuant to the options granted or which may be granted under either of the ImClone Systems Incorporated 1996 Incentive Stock Option Plan, As Amended or the ImClone Systems Incorporated 1996 Non-Qualified Stock Plan, As Amended, (ii) 2,000,000 shares of Common Stock reserved for issuance pursuant to options granted or which may be granted under the ImClone Systems Incorporated 1998 Non-Qualified Stock Option Plan, As Amended (together with the 1996 Incentive Stock Option Plan and the 1996 Non-Qualified Stock Plan, the "Plans"), and (iii) 60,000 shares of Common Stock reserved for issuance to the Company's Vice President, Product and Process Development pursuant to an Option Agreement dated as of January 4, 1999. (2) Estimated solely for the purposes of calculating the registration fee. Pursuant to Rule 457(c) and Rule 457(h) under the Securities Act of 1933, as amended, the proposed maximum offering price per share has been determined based on the average of the high and low prices of the Common Stock on February 7, 2000, as reported by NASDAQ National Market. (3) Estimated in accordance with Rule 457(h) solely for the purpose of calculating the registration fee of options granted and outstanding, based on an exercise price of $8.44. ================================================================================ SECTION 10(a) PROSPECTUS The documents containing the information specified in Part I of this Registration Statement on Form S-8 will be sent or given to participants in the Plans as specified under Rule 428(b)(i) under the Securities Act of 1933, as amended (the "Securities Act"). Such documents are not required to be, and are not being, filed by the Company with the Securities and Exchange Commission (the "Commission"), either as part of this Registration Statement or as prospectuses or prospectus supplements pursuant to Rule 424 under the Securities Act. Such documents, together with the documents incorporated by reference herein pursuant to Item 3 of Part II of this Registration Statement on Form S-8, constitute a prospectus that meets the requirements of Section 10(a) of the Securities Act. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation of Documents by Reference This Registration Statement incorporates herein by reference the following documents which have been filed with the Commission by the Company as Registrant: 1. The Company's Registration Statements on Form S-8, Registration Numbers 333-64825 and 333-95894, filed with respect to the Company's 1996 Incentive Stock Option Plan and the Company's 1996 NonQualified Stock Option Plan, respectively. 2. The Company's Registration Statement on Form S-8, Registration Number 333-64827, with respect to the Company's 1998 Non-Qualified Stock Option Plan. 3. The Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998. 4. All reports filed pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act of 1934, as amended (the "Exchange Act") since December 31, 1998. 5. The description of the Company's Common Stock, par value $.001 per share, contained in its registration statement on Form 8-A filed under the Exchange Act, including any amendment or report filed for the purpose of updating such description. All other documents filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this Registration Statement and prior to the filing of a post-effective amendment to this Registration Statement which indicates that all securities offered have been sold or which de-registers 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 (such documents, and the documents enumerated above, being hereinafter referred to collectively as the "Incorporated Documents"). Any statement contained in an Incorporated Document shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained therein or in any other subsequently filed Incorporated Document modifies or supersedes such statement. Any such statements so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. Item 4. Description of Securities. Not applicable. Item 5. Interest of Named Experts and Counsel. John P. Landes, who has issued the Opinion of the Company's Law Department on the legality of the Common Stock of the Company offered hereby, is Vice President, Business Development and General Counsel of 2 the Company. Mr. Landes owns Company Common Stock and/or holds employee stock options to purchase Company Common Stock. Item 6. Indemnification of Directors and Officers. The Company's Certificate of Incorporation and Bylaws set forth the extent to which officers and directors of the Company may be indemnified against any liabilities which they may incur. The general effect of such provisions is that, on the terms and conditions set forth in the Company's Certificate of Incorporation and Bylaws, any person made a party or threatened to be made a party to an action, suit or proceeding by reason of the fact that he or she is or was a director or officer of the Company, or is or was serving as a director, officer, employee or agent of another corporation or other enterprise at the request of the Company, shall be indemnified by the Company against expenses (including attorney's fees, judgments, fines and amounts paid in settlement) reasonably incurred or suffered by him or her in connection with such action, suit or proceeding, to the full extent permitted under the laws of the State of Delaware; provided, however, that, subject to certain limited exceptions, the Company shall indemnify any such person seeking indemnification in connection with a proceeding initiated by such person only if such proceeding was authorized by the Board of Directors of the Company. The Company's Certificate of Incorporation gives the Board of Directors of the Company the authority to extend such indemnification to employees and other agents of the Company as well. The general effect of the indemnification provisions contained in Section 145 of the General Corporation Law of the State of Delaware (the "DGCL") is as follows: A director or officer who, by reason of such directorship or officership, is involved in any action, suit or proceeding (other than an action by or in the right of the corporation) may be indemnified by the corporation in settlement actually and reasonably incurred by him or her in connection with such action, suit or proceeding if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, has no reasonable cause to believe that his or her conduct was unlawful. A director or officer who, by reason of such directorship or officership, is involved in any action or suit by or in the right of the corporation may be indemnified by the corporation against expenses (including attorney's fees) actually and reasonably incurred by him or her in connection with the defense or settlement of such action or suit if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification may be made in respect of any claim, issue or matter as to which he or she shall have been adjudged to be liable to the corporation unless and only to the extent that a court of appropriate jurisdiction shall approve such indemnification. The Company's Certificate of Incorporation provides that, to the maximum extent permitted under the DGCL, a director of the Company shall not be personally liable to the Company or to any of its stockholders for monetary damages for breach of fiduciary duty as a director of the Company. Section 102(b)(7) of the DGCL permits a corporation to include in its certificate of incorporation a provision that eliminates or limits the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director; provided, that such provision shall not eliminate or limit the liability of a director (i) for any breach of the director's duty of loyalty to the corporation or its stockholders, (iii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL or (iv) for any transaction from which the director derived in improper personal benefit. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. Item 7. Exemption for Registration Claimed. Not applicable. Item 8. Exhibits. The following are filed as part of this Registration Statement: 3 Exhibit No. Description ----------- ----------- 4.1 Certificate of Incorporation of the Company, as amended, ( incorporated by reference to Exhibit 3.1 to ImClone Systems Incorporation's Registration Statement on Form S-1, File No. 33-43064). 4.2 Bylaws of the Company (incorporated by reference to Exhibit 3.2 to ImClone Systems Incorporated's Registration Statement on Form S-1, File No. 33-43064). 5.1 Opinion of John P. Landes with respect to the legality of the securities being registered. (Filed herewith). 23.1 Consent of KPMG LLP. (Filed herewith). 23.2 Consent of Counsel (Included in Exhibit 5.1). 24. Power of Attorney. (Included on signature pages to this Registration Statement). 99.1 ImClone Systems Incorporated 1996 Incentive Stock Option Plan, As Amended. (Filed herewith). 99.2 ImClone Systems Incorporated 1996 Non-Qualified Stock Option Plan, As Amended. (Filed herewith). 99.3 ImClone Systems Incorporated 1998 Non-Qualified Stock Option Plan, As Amended. (Filed herewith). 99.4 Option Agreement, dated as of January 4, 1999, between ImClone Systems Incorporated and Dr. S. Joseph Tarnowski. (Filed herewith). Item 9. Undertakings. (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; (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; and (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) above do not apply if 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 Exchange Act that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act, 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 the registration statement 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, each filing of the Registrant's annual report, pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) 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. 4 (c) Insofar as indemnification for liabilities arising under the Securities Act 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 Commission such indemnification is against public policy as expressed in the Securities 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 Securities Act and will be governed by the final adjudication of such issue. 5 SIGNATURES Pursuant to the requirements of the Securities Act, 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 New York, State of New York, on the 11th day of February 2000. IMCLONE SYSTEMS INCORPORATED By: /s/ Samuel D. Waksal -------------------------------------- Samuel D. Waksal President and Chief Executive Officer Pursuant to the requirements of the Securities Act, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated. Each person whose individual signature appears below hereby authorizes Samuel D. Waksal, Harlan W. Waksal and John B. Landes, or any of them, to execute in the name and on behalf of each such person and to file any amendment to this Registration Statement, and appoints Samuel D. Waksal, Harlan W. Waksal and John B. Landes, or any of them, as attorney-in-fact to sign on his behalf individually and in each capacity stated below, and to file any amendments to this Registration Statement, including any and all post-effective amendments. Signature Title Date --------- ----- --- /s/ Robert F. Goldhammer - -------------------------------- Chairman of the Board and Director February 11, 2000 Robert F. Goldhammer /s/ Samuel D. Waksal - -------------------------------- President, Chief Executive Officer and Director February 11, 2000 Samuel D. Waksal (Principal Executive Officer) /s/ Harlan W. Walsal - -------------------------------- Executive Vice President, Chief Operating Officer February 11, 2000 Harlan W. Walsal and Director /s/ Carl Goldfischer - -------------------------------- Vice President of Finance and Chief Financial February 11, 2000 Carl Goldfischer Officer (Principal Financial and Accounting Officer) /s/ Jean Carvais - -------------------------------- Director February 11, 2000 Jean Carvais /s/ Vincent T. DeVita, Jr. - -------------------------------- Director February 11, 2000 Vincent T. DeVita, Jr. /s/ Paul B. Kopperl - -------------------------------- Director February 11, 2000 Paul B. Kopperl /s/ William R. Miller - -------------------------------- Director February 11, 2000 William R. Miller /s/ Davis M. Kies - -------------------------------- Director February 11, 2000 Davis M. Kies /s/ John Mendelsohn - -------------------------------- Director February 11, 2000 John Mendelsohn /s/ Richard Barth - -------------------------------- Director February 11, 2000 Richard Barth S-1
EXHIBIT INDEX Exhibit No. Description ----------- ----------- 4.1 Certificate of Incorporation of the Company, as amended, ( incorporated by reference to Exhibit 3.1 to ImClone Systems Incorporation's Registration Statement on Form S-1, File No. 33-43064). 4.2 Bylaws of the Company (incorporated by reference to Exhibit 3.2 to ImClone Systems Incorporated's Registration Statement on Form S-1, File No. 33-43064). 5.1 Opinion of John P. Landes with respect to the legality of the securities being registered. (Filed herewith). 23.1 Consent of KPMG LLP. (Filed herewith). 23.2 Consent of Counsel (Included in Exhibit 5.1). 24. Power of Attorney. (Included on signature pages to this Registration Statement). 99.1 ImClone Systems Incorporated 1996 Incentive Stock Option Plan, As Amended. (Filed herewith). 99.2 ImClone Systems Incorporated 1996 Non-Qualified Stock Option Plan, As Amended. (Filed herewith). 99.3 ImClone Systems Incorporated 1998 Non-Qualified Stock Option Plan, As Amended. (Filed herewith). 99.4 Option Agreement, dated as of January 4, 1999, between ImClone Systems Incorporated and Dr. S. Joseph Tarnowski. (Filed herewith). EX-5.1 2 Exhibit 5.1 [Letterhead of ImClone Systems Incorporated] February 11, 2000 Securities and Exchange Commission 450 Fifth Street Washington, D.C. 20549 Ladies and Gentlemen: As Vice President, Business Development and General Counsel of ImClone Systems Incorporated (the "Company), I advise you as follows in connection with the filing by the Company of a Registration Statement on Form S-8 being filed by the Company on the date hereof (the "Registration Statement") with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Securities Act"), with respect to 2,000,000 shares of common stock, $.001 par value per share, of the Company which may be issued pursuant to the ImClone Systems Incorporated 1996 Incentive Stock Option Plan, As Amended and/or the ImClone Systems Incorporated 1996 Non-Qualified Stock Plan, As Amended, 1,000,000 shares of common stock, $.001 par value per share, of the Company which may be issued pursuant to the ImClone Systems Incorporated 1998 Non-Qualified Stock Option Plan, As Amended and 60,000 shares of common stock, $.001 par value per share, of the Company reserved for issuance to the Company's Vice President, Product and Process Development pursuant to an option agreement dated as of January 4, 1999 (the "Common Stock"). I have examined originals or copies, certified or otherwise identified to my satisfaction, of such corporate documents and records which I have deemed necessary or appropriate for the purposes of the opinion and have conducted such other investigations of fact and law as I have deemed necessary or advisable for purposes of this opinion. I have assumed that the signatures (other than those of officers of the Company) on all documents that I have examined are genuine. Based upon the foregoing, I am of the opinion that the Common Stock is validly authorized and, when issued under each of the plans described above in accordance with the terms thereof, will be legally issued, fully paid and non-assessable. I hereby consent to the filing of the opinion as an exhibit to the Registration Statement. Very truly yours, /s/ John B. Landes John B. Landes Vice President, Business Development and General Counsel 2 EX-23.1 3 Exhibit 23.1 [Letterhead of KPMG LLP] The Board of Directors ImClone Systems Incorporated We consent to the use of our report incorporated herein by reference. /s/ KPMG LLP Princeton, New Jersey February 11, 2000 EX-99.1 4 Exhibit 99.1 IMCLONE SYSTEMS INCORPORATED 1996 INCENTIVE STOCK OPTION PLAN, AS AMENDED1 ARTICLE 1 PURPOSE OF PLAN SECTION 1.01. General Purpose. The purpose of this Incentive Stock Option Plan (the "Plan") is to promote the interests of ImClone Systems Incorporated, and any subsidiaries of such company, as from time to time may be formed or acquired (collectively, the "Company"), by affording key executives and employees an opportunity to acquire a proprietary interest in the Company pursuant to stock options issued by the Company, and thus to create in such employees increased personal interest in its continued success. SECTION 1.02. Statutory Stock Option. Options granted under the Plan are intended to be "incentive stock options" to which Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), applies. ARTICLE 2 SHARES SUBJECT TO PLAN SECTION 2.01. Description of Shares. Subject to Article VII hereof, the stock to which the Plan applies is shares of the Company's common stock, $.001 par value ("Common Stock"), either authorized but unissued or Treasury shares. The number of shares of Common Stock to be issued or sold pursuant to options granted hereunder shall not exceed 4,000,000 shares; provided, that such number shall be reduced by the number of shares which have been sold under, or may be sold pursuant to options granted from time to time under, the Company's 1996 - -------- 1 This plan was adopted by the Board on February 25, 1996 and approved by the stockholders on June 3, 1996; it was amended by the Board on April 3, 1997 and such amendments were ratified by the stockholders on June 3, 1997; it was amended by the Board on March 29, 1999 subject to shareholder approval and such amendments were ratified by the stockholders on May 24, 1999; it was further amended by the Board on December 16, 1999. Non-Qualified Stock Option Plan (the "Non-Qualified Plan"), to the same extent as if such sales had been made or options had been granted pursuant to this Plan. SECTION 2.02. Restoration of Unpurchased Shares. Any shares subject to an option granted hereunder or under the Non-Qualified Plan that, for any reason, expires or is terminated unexercised as to such shares may again be subject to an option to be granted hereunder. ARTICLE 3 ADMINISTRATION; COMMITTEES; AMENDMENTS SECTION 3.01. Administration. The Plan shall be administered by any of the Compensation Committee, the Stock Option Committee (which is a subcommittee of the Compensation Committee) (collectively, the "Committees") or the Company's Board of Directors (the "Board"). The Committees shall be comprised of not less than two persons who shall be appointed by the Board from among the members of the Board. Members of the Committees shall not be eligible to become participants under the Plan while they are members of the Committees or for a period of three months thereafter. SECTION 3.02. Duration; Removal; Etc. The members of the Committees shall serve at the pleasure of the Board, which shall have the power at all times to remove members from the Committees or to add members thereto. Vacancies in the Committees, however caused, shall be filled by action of the Board. SECTION 3.03. Meetings; Actions of Committees. Each of the Committees and the Board may select one of its members as its Chairman and shall hold its meetings at such times and places as it may determine. All decisions or determinations of each of the Committees and the Board shall be made by the majority vote or decision of all of its members, whether present at a meeting or not; provided, however, that any decision or determination reduced to writing and signed by all of the members shall be as fully effective as if it had been made at a meeting duly called and held. Each of the Committees and the Board may make such rules and regulations for the conduct of its business not inconsistent herewith as it may deem advisable. SECTION 3.04. Interpretation. The interpretation and construction by any of the Committees or the Board of the provisions of the Plan or of the options granted hereunder shall be final, unless in the case of the Committees otherwise determined by the Board. No member of the Board or of the Committees shall be liable for any action taken or determination made in good faith. 2 SECTION 3.05. Amendments or Discontinuation. The Board may make such amendments, changes, and additions to the Plan, or may discontinue and terminate the Plan, as it may deem advisable from time to time; provided, however, that no action shall affect or impair any options theretofore granted under the Plan, and provided, further, however, that the affirmative vote of the owners of a majority of the outstanding shares of Common Stock present at a meeting in person or by proxy and entitled to vote at the meeting shall be necessary to effect any amendment to the Plan which would (a) increase the number of shares of Common Stock subject to options granted under the Plan, or (b) authorize the granting of options at a price below the minimum price established by Section 5.3 hereof. ARTICLE 4 PARTICIPANTS; MAXIMUM GRANT; DURATION OF PLAN SECTION 4.01. Eligibility and Participation. Options shall be granted only to persons ("Participants") who at the time of granting are key executives or key employees of the Company. Subject to the provisions of Section 4.3 hereof, the Committees or the Board shall determine the key executives and key employees to be granted options hereunder, the number of shares of Common Stock subject to such options, the exercise prices of options, the terms thereof and any other provisions not inconsistent with the Plan. SECTION 4.02. Guidelines for Participation. In selecting Participants and determining the numbers of shares of Common Stock for which options are to be granted the Committees or the Board shall consult with officers and directors of the Company, and shall take into account the duties of the respective employees, their present and potential contributions to the success of the Company, and such other factors as any of the Committees or the Board shall deem relevant. SECTION 4.03. Maximum Grant. Notwithstanding anything to the contrary in the Plan, options granted to a Participant in any calendar year (under all plans, including the Plan, providing for the grant of incentive stock options of the Company and its parent and subsidiaries) in excess of the limitations of Section 422(d) of the Code shall not be considered Incentive Stock Options granted under this Plan and shall be deemed to be options granted under the Non-Qualified Plan. SECTION 4.04. Duration of Plan. All options under the Plan shall be granted within ten years from the date the Plan is adopted, or the date the Plan is approved by the shareholders of the Company, whichever is earlier. 3 ARTICLE 5 TERMS AND CONDITIONS OF OPTIONS SECTION 5.01. Individual Stock Option Agreements. All stock options granted pursuant to the Plan shall be evidenced by stock option agreements or notices ("Stock Option Agreements"), which need not be identical, in such form as any of the Committees or the Board shall from time to time approve, subject to the terms of the Plan which may, but need not, be executed or acknowledged by a Participant. SECTION 5.02. Number of Shares. Each Stock Option Agreement shall state the total number of shares of Common Stock with respect to which the option is granted, the terms and conditions of the option, and the exercise price or prices thereof, it being understood that any of the Committees or the Board shall have authority to prescribe in any Stock Option Agreement that the option evidenced thereby may be exercisable in full or in part, as to any number of shares subject thereto, at any time or from time to time during the term of the option, or in such installments at such times during said term as any of the Committees or the Board may determine; provided that no option granted pursuant to the Plan shall be exercisable after the expiration of ten years from the date such option is granted. A previously granted incentive stock option shall be treated as outstanding until it is exercised in full or expires by reason of the lapse of time. Except as otherwise provided in any Stock Option Agreement, an option may be exercised at any time or from time to time during the term of the option as to any or all full (but no fractional) shares which have become purchasable under such option. Any of the Committees or the Board shall have the right to accelerate, in whole or in part, from time to time, conditionally or unconditionally, the right to exercise any option granted hereunder. SECTION 5.03. Option Price. The price at which the shares of Common Stock subject to each option granted under this Plan may be purchased (the "option price" or "exercise price")shall be determined by any of the Committees or the Board, which shall have authority at the time the option is granted to prescribe in any Stock Option Agreement that the price per share, with the passage of pre-determined periods of time, shall increase from the original price to higher prices, but in no case shall the original exercise price of any option be less than 100% of the fair market value of such shares on the date the option is granted, as determined by any of the Committees or the Board in accordance with applicable Treasury Regulations. Notwithstanding anything contained to the contrary herein, no option shall be granted to any employee who, at the time the option is granted, owns more than 10% of the total combined voting power of all classes of stock of the Company or 4 of its parent or subsidiary unless, at the time option is granted, the exercise price of the option is at least 110% of the fair market value of the shares of Common Stock subject to the option and such option by its terms is not exercisable after the expiration of five years from the date such option is granted. For purposes of determining the ownership of stock of the Company, the rules of Section 424(d) of the Code shall be applied. SECTION 5.04. Method of Exercising Option; Full Payment. Subject to Section 6.01 and 6.02 hereof, options granted pursuant to the Plan may be exercised only if the Participant was, at all times during the period beginning on the date the option was granted and ending on the date of such exercise, an employee of the Company, a parent or subsidiary of the Company, or a corporation or a parent or subsidiary of such corporation issuing or assuming a stock option in respect of such option in a transaction to which Section 424(a) of the Code applies. Options shall be exercised by written notice to the Company, addressed to the Company at its principal place of business. Such notice shall state the Participant's election to exercise the option and the number of shares of Common Stock in respect of which it is being exercised, and shall be signed by the Participant so exercising the option. Such notice shall be accompanied by (a) payment of the full purchase price of such shares, which payment shall be in cash, by check or in stock of the Company that has been owned by the participant for at least six months, or notes of the Company or, as agreed to by the Board, other consideration; and (b) such written representations and other documents as may be desirable, in the opinion of the Company's legal counsel, for purposes of compliance with state or Federal securities or other laws. In the case of payment made in stock of the Company, the stock shall be valued at its Fair Market Value (as hereinafter defined) on the last business day prior to the date of exercise. The term "Fair Market Value" for the Common Stock on any particular date shall mean the last reported sale price of the Common Stock on the principal market on which the Common Stock trades on such date or, if no trades of Common Stock are made or reported on such date, then on the next preceding date on which the Common Stock traded. The Company shall deliver a certificate or certificates representing shares of Common Stock purchased pursuant to such notice to the purchaser as soon as practicable after receipt of such notice, subject to Article VIII hereof. Any of the Committees or the Board may amend an already outstanding Stock Option Agreement to add a provision permitted by clause (a) of this Section 5.04, and no such amendment, by itself, shall be deemed to constitute the grant of a new option for purposes of this Plan; provided that this sentence shall not be determinative of whether any such amendment constitutes a new grant for purposes of qualification as an Incentive Stock Option. SECTION 5.05. Rights as a Shareholder. No Participant shall have any rights as a shareholder with respect to shares of Common Stock subject to an 5 option granted under the Plan until the date of the issuance to such Participant of stock certificates in respect of such shares. No adjustment shall be made for dividends or other rights for which the record date is prior to the date such stock certificate is issued. SECTION 5.06. Other Provisions. Stock Option Agreements entered into pursuant to the Plan may contain such other provisions (not inconsistent with the Plan) as any of the Committees or the Board may deem necessary or desirable, including, but not limited to, covenants on the part of the Participant not to compete, not to sell Common Stock obtained from the exercise of options for specified periods of time, and remedies available to the Company in the event of the breach of any such covenant. ARTICLE 6 TERMINATION OF EMPLOYMENT; TRANSFERABILITY SECTION 6.01. Termination of Employment. Except as otherwise provided in connection with the grant of any option or the termination of any Participant, in the event a Participant's employment or service with the Company is terminated other than by reason of death or disability, (a) with respect to options granted prior to December 16, 1999, the right to exercise any unexercised option or unexercised portion of any option (regardless of whether or not vested) granted under the Plan shall terminate on the date of termination of the relationship between the Participant and the Company and, (b) with respect to options granted on or after December 16, 1999, (i) the right to exercise any unvested option or unvested portion of any option granted under the Plan shall terminate on the date of termination of the relationship between the Participant and the Company and (ii) the right to exercise any option or portion of any option granted under the Plan which is vested as of the date of termination of employment or service shall terminate upon the earlier of (A) the thirtieth day following such termination of employment or service or (B) the date such option or portion of an option would have expired had it not been for the termination of employment or service. The option may not be exercised after its expiration in accordance with the foregoing terms, and the shares of Common Stock subject to the unexercised portion of such option may again be subject to new options under the Plan. SECTION 6.02. Death or Disability of Participant. Except as otherwise permitted in connection with the grant of any option or the death or disability of a Participant, in the event a Participant dies or is disabled while in the employ of the Company or of a parent or subsidiary of the 6 Company, any options theretofore granted to him shall be exercisable only within the next 12 months immediately succeeding such death or disability and then only in the case of death (a) by the person or persons to whom the Participant's rights under the option shall pass by will or the laws of descent and distribution, and, in the case of disability, by such Participant or his legal representative, and (b) if and to the extent that he was entitled to exercise the option at the date of his death. SECTION 6.03. Transferability. Options granted to a Participant under the Plan shall not be transferable otherwise than by will, by the laws of descent and distribution, or (if authorized in the applicable Stock Option Agreement) pursuant to a qualified domestic relations order ("QDRO") as defined by the Internal Revenue Code of 1986, as amended, or Title I of the Employee Retirement Income Security Act of 1974, as amended, or the rules thereunder. During the Participant's lifetime, options shall be exercised only by such Participant, such Participant's guardian or legal representative, or (if authorized in the applicable Stock Option Agreement) such Participant's transferee pursuant to a QDRO. ARTICLE 7 CAPITAL ADJUSTMENTS SECTION 7.01. Capital Adjustments. If any change is made in the shares of Common Stock subject to the Plan or subject to any option granted under the Plan (through merger, consolidation, reorganization, recapitalization, stock dividend, split-up, combination of shares, exchange of shares, issuance of rights to subscribe, or change in capital structure), appropriate adjustments shall be made by any of the Committees or the Board as to the maximum number of shares subject to the Plan and the number of shares and price per share subject to outstanding options as shall be equitable to prevent dilution or enlargement of option rights; provided, however, that any such adjustment shall comply with the rules of Section 424(a) of the Code and provided further that in no event shall any adjustment be made that would cause any option granted hereunder to be considered other than an incentive stock option. Any determination made by any of the Committees or the Board under this Article VII shall be final, binding and conclusive upon each Participant. 7 ARTICLE 8 LEGAL REQUIREMENTS, ETC SECTION 8.01. Revenue Stamps. The Company shall be responsible and shall pay for any transfer, revenue, or documentary stamps with respect to shares issued upon the exercise of options granted under the Plan. SECTION 8.02. Legal Requirements. The Company shall not be required to issue certificates for shares upon the exercise of any option unless and until, in the opinion of the Company's legal counsel, such issuance would not result in a violation of any state or Federal securities or other law. Certificates for shares, when issued, shall have, if required in the opinion of the Company's legal counsel, the following legend, or statements of other restrictions, endorsed thereon, and may not be immediately transferable: The shares of Common Stock evidenced by this certificate have been issued to the registered owner in reliance upon written representations that these shares have been purchased for investment. These shares may not be sold, transferred, or assigned unless, in the opinion of the Company and its legal counsel, such sales, transfer, or assignment will not be in violation of the Securities Act of 1933, as amended, applicable rules and regulations of the Securities and Exchange Commission and any applicable state Securities laws. SECTION 8.03. Private Offering. The options to be granted under the Plan are available only to a limited number of present and future key executives and employees of the Company and its subsidiaries who have knowledge of the Company's financial condition, management, and affairs. Such options are not intended to provide additional capital for the Company but are to encourage stock ownership by the Company's key personnel. By the act of accepting an option, in the absence of an effective registration statement under the Securities Act of 1933, as amended, Participants shall agree that upon exercise of such option, they will acquire the shares of Common Stock that are the subject thereof for investment and not with any intention at such time to resell or redistribute the same, and they shall confirm such agreement at the time of exercise, but the neglect or failure to confirm the same in writing shall not be a limitation of such agreement. 8 ARTICLE 9 GENERAL SECTION 9.01. Application of Funds. The proceeds received by the Company from the sale of shares of Common Stock pursuant to the exercise of options therefor shall be used for general corporate purposes. SECTION 9.02. Right of the Company to Terminate Employment. Nothing contained in the Plan or in a Stock Option Agreement shall confer upon any Participant any right to be continued in the employ of the Company or of any subsidiary of the Company, or interfere in any way with the right of the Company, or such subsidiary, to terminate his employment for any reason whatsoever, with or without cause, at any time. SECTION 9.03. No Obligation to Exercise. The granting of an option hereunder shall impose no obligation upon the Participant to exercise such option. SECTION 9.04. Effectiveness of Plan. The Plan shall become effective upon its adoption by the shareholders of the Company. Options may be granted under the Plan prior to the approval of the Plan by the Shareholders, but no such option may be exercised prior to such approval. SECTION 9.05. Other Benefits. Participation in the Plan shall not preclude a Participant from eligibility in any other stock benefit plan of the Company or any old age benefit, insurance, pension, profit sharing, retirement, bonus or other plan which the Company has adopted, or may, at any time, adopt for the benefit of its parents' or its subsidiaries executives and/or employees. SECTION 9.06. Company Records. Records of the Company as to a Participant's period of employment, termination of employment and the reason therefor, leaves of absence, re-employment, and other matters will be conclusive for all purposes hereunder. SECTION 9.07. Tax Requirement. The exercise or surrender of any option under this Plan shall constitute a Participant's full and complete consent to whatever action the Committee elects to satisfy the Federal and state withholding requirements, if any, which the Committee in its discretion deems applicable to such exercise. SECTION 9.08. Interpretations and Adjustments. To the extent permitted by law, an interpretation of the Plan and a decision on any matter within any of the Committees or Board's discretion made in good faith is binding on all persons. A misstatement or other mistake of fact shall be corrected when it becomes known, 9 and the person responsible shall make such adjustment on account thereof as he considers equitable and practicable. SECTION 9.09. Information. The Company shall, upon request or as may be specifically required hereunder, furnish or cause to be furnished, all of the information or documentation which is necessary or required by any of the Committees or the Board to perform its duties and functions under the Plan. SECTION 9.10. Notice of Disqualifying Disposition. If a Participant sells or otherwise disposes of any share of Common Stock transferred to him pursuant to the exercise of an option granted hereunder within two years from the date of the granting of the option or within one year of the transfer of such shares to him (i.e., a "disqualifying disposition"), the Participant, within ten days thereafter, shall furnish to any of the Committees or the Board at the principal offices of the Company, written notice of such sale or other disposition. SECTION 9.11. Governing Law. The Plan and any and all options granted thereunder shall be governed by, and construed and enforced in accordance with, the laws of the State of New York from time to time in effect. SECTION 9.12. Certain Definitions. (a) "Parent". The term "parent" shall mean a "parent corporation" as defined in Section 424(e) of the Code. (b) "Subsidiary". The term "subsidiary" shall mean a "subsidiary corporation" as defined in Section 424(f) of the Code. (c) "Incentive Stock Option". The term "incentive stock option" shall mean an option described in Section 422(b) of the code. (d) "Disabled". The term "disabled" shall have the definition set forth in Section 22(a)(3) of the Code. 10 EX-99.2 5 Exhibit 99.2 IMCLONE SYSTEMS INCORPORATED 1996 NON-QUALIFIED STOCK OPTION PLAN, AS AMENDED1 ARTICLE 1 PURPOSE OF PLAN SECTION 1.01. General Purpose. The purpose of this Non-Qualified Stock Option Plan (the "Plan") is to promote the interests of ImClone Systems Incorporated (the "Company") by affording consultants, advisors, directors and employees an opportunity to acquire a proprietary interest in the Company pursuant to stock options issued by the Company, and thus to create in such persons increased personal interest in its continued success. SECTION 1.02. Statutory Stock Option. Options granted under the Plan are intended to be "non-qualified" stock options under the Internal Revenue Code of 1986, as amended (the "Code"). ARTICLE 2 SHARES SUBJECT TO PLAN SECTION 2.01. Description of Shares. Subject to Article VIII hereof, the stock to which the Plan applies is shares of the Company's common stock, $.001 par value ("Common Stock"), either authorized but unissued or Treasury shares. The number of shares of Common Stock to be issued or sold pursuant to options granted hereunder shall not exceed 4,000,000 shares; provided, that such number shall be reduced by the number of shares which have been sold under, or may be sold pursuant to options granted from time to time under, the Company's 1996 Incentive Stock Option Plan (the "Incentive Stock Option Plan") to the same extent as if such sales had been made or options had been granted pursuant to this Plan. - -------- 1 This plan was adopted by the Board on February 25, 1996 and approved by the stockholders on June 3, 1996; it was amended by the Board on April 3, 1997 and such amendments were ratified by the stockholders on June 3, 1997; it was amended by the Board on March 29, 1999 and such amendments were ratified by the stockholders on May 24, 1999; it was further amended by the Board on December 16, 1999. SECTION 2.02. Restoration of Unpurchased Shares. Any shares subject to an option granted hereunder that, for any reason, expires or is terminated unexercised as to such shares may again be subject to an option to be granted hereunder. ARTICLE 3 ADMINISTRATION; COMMITTEES; AMENDMENTS SECTION 3.01. Administration. The Plan shall be administered by any of the Compensation Committee, the Stock Option Committee (which is a subcommittee of the Compensation Committee) (collectively, the "Committees") or the Board of Directors of the Company (the "Board"). The Committees shall be comprised of not less than two persons who shall be appointed by the Board from among the members of the Board. Members of the Committees and the Board shall be eligible to become participants under the Plans and may receive discretionary and non-discretionary grants of options. SECTION 3.02. Duration; Removal; Etc. The members of the Committees shall serve at the pleasure of the Board, which shall have the power at all times to remove members from the Committees or to add members thereto. Vacancies in the Committees, however caused, shall be filled by action of the Board. SECTION 3.03. Meetings; Actions of Committee. Each of the Committees may select one of its members as its Chairman and shall hold its meetings at such times and places as it may determine. All decisions or determinations of the Committees and the Board shall be made by the majority vote or decision of all of its members, whether present at a meeting or not; provided, however, that any decision or determination reduced to writing and signed by all of the members shall be as fully effective as if this had been made at a meeting duly called and held. Each of the Committees and the Board may make such rules and regulations for the conduct of its business not inconsistent herewith as it may deem advisable. SECTION 3.04. Interpretation. The interpretation and construction by any of the Committees or the Board of the provisions of the Plan or of the options granted hereunder shall be final, unless in the case of the Committees otherwise determined by the Board. No member of the Board or of the Committees shall be liable for an action taken or determination made in good faith. SECTION 3.05. Amendments or Discontinuation. The Board may make such amendments, changes, and additions to the Plan, or may discontinue and terminate the Plan, as it may deem advisable from time to time; provided, however, that no action shall affect or impair any options theretofore granted 2 under the Plan, and provided, further, however, that the affirmative vote of the owners of a majority of the outstanding shares of Common Stock present at a meeting in person or by proxy and entitled to vote shall be necessary to effect any amendment to the Plan which would increase the number of shares of Common Stock subject to options granted under the Plan. ARTICLE 4 PARTICIPANTS; MAXIMUM GRANT; DURATION OF PLAN SECTION 4.01. Eligibility and Participation. Options shall be granted only to persons ("Participants") who at the time of granting are consultants, advisors, directors or employees of the Company. Any of the Committees or the Board shall determine the consultants, advisors, directors and employees to be granted options hereunder, the number of shares of Common Stock subject to such options, the exercise prices of options, the terms thereof and any other provisions not inconsistent with the Plan. SECTION 4.02. Guidelines for Participation. In selecting Participants and determining the numbers of shares of Common Stock for which options are to be granted, any of the Committees or the Board shall consult with officers and directors of the Company, and shall take into account the duties of the respective persons, their present and potential contributions to the success of the Company, and such other factors as any of the Committees or the Board shall deem relevant. SECTION 4.03. Duration of Plan. All options under the Plan shall be granted within ten years from the date the Plan is approved by the shareholders of the Company. ARTICLE 5 TERMS AND CONDITIONS OF OPTIONS SECTION 5.01. Stock Option Agreements or Notices. All stock options granted pursuant to the Plan shall be evidenced by stock option agreements or notices ("Stock Option Agreements"), which need not be identical, in such form as any of the Committees or the Board shall from time to time approve, subject to the terms of the Plan, which may, but need not, be executed or acknowledged by a Participant. 3 SECTION 5.02. Number of Shares. Each Stock Option Agreement shall state the total number of shares of Common Stock with respect to which the option is granted, the terms and conditions of the option, and the exercise price or prices thereof, it being understood that any of the Committees or the Board shall, subject to the terms of Article VII hereof, have authority to prescribe in any Stock Option Agreement that the option evidenced thereby may be exercisable in full or in part, as to any number of shares subject thereto, at any time or from time to time during said term as any of the Committees or the Board may determine; provided that no option granted pursuant to the Plan shall be exercisable after the expiration of ten years from the date such option is granted. Except as otherwise provided in any Stock Option Agreement, an option may be exercised at any time or from time to time during the term of the option as to any or all full (but no fractional) shares which have become purchasable under such option. Subject to the terms of Article VII hereof, any of the Committees or the Board shall have the right to accelerate, in whole or in part, from time to time, conditionally or unconditionally, the right to exercise any option granted hereunder. SECTION 5.03. Option Price. Subject to the terms of Article VII hereof, the price at which the shares of Common Stock subject to each option granted under this Plan may be purchased (the "option price" or "exercise price") shall be determined by any of the Committees or the Board, which shall have the authority at the time the option is granted to prescribe in any Stock Option Agreement that the price per share, with the passage of pre-determined periods of time, shall increase from the original price to higher prices. SECTION 5.04. Method of Exercising Option; Full Payment. Subject to the terms of Article VII hereof and Section 6.01 and Section 6.02 hereof, options granted pursuant to the Plan may be exercised only if the Participant was, at all times during the period beginning on the date the option was granted and ending on the date of such exercise, a consultant, advisor, director or employee of the Company. Options shall be exercised by written notice to the Company, addressed to the Company at its principal place of business. Such notice shall state the Participant's election to exercise the option and the number of shares of Common Stock in respect of which it is being exercised, and shall be signed by the Participant so exercising the option. Such notice shall be accompanied by payment of the full purchase price of such shares, which payment shall be in cash, by check or in stock of the Company that has been owned by the Participant for at least six months, or notes of the Company or, as agreed to by the Board, other consideration; and such written representations and other documents as may be desirable, in the opinion of the Company's legal counsel, for purposes of compliance with state or Federal securities or other laws. In the case of payment made in stock of the Company, the stock shall be valued at its Fair Market Value (as hereinafter defined) on the last business day prior to the date of exercise. The term "Fair Market Value" for the Common Stock on any particular date shall mean the last reported sale price of the Common Stock on the principal market on 4 which the Common Stock trades on such date or, if no trades of Common Stock are made or reported on such date, then on the next preceding date on which the Common Stock traded. The Company shall deliver a certificate or certificates representing shares of Common Stock purchased pursuant to such notice to the purchaser as soon as practicable after receipt of such notice, subject to Article IX hereof. Any of the Committees or the Board may amend an already outstanding Stock Option Agreement to add a provision permitted by clause (b) of this Section 5.4, and no such amendment, by itself, shall be deemed to constitute the grant of a new option for purposes of this Plan. SECTION 5.05. Rights as a Shareholder. No Participant shall have any rights as a shareholder with respect to shares of Common Stock subject to an option granted under the Plan until the date of the issuance to such Participant of a stock certificate in respect of such shares. No adjustment shall be made for dividends or other rights for which the record date is prior to the date such stock certificate is issued. SECTION 5.06. Other Provisions. Stock Option Agreements entered into pursuant to the Plan may contain such other provisions (not inconsistent with the Plan) as any of the Committees or the Board may deem necessary or desirable, including, but not limited to, covenants on the part of the Participant not to compete, not to sell Common Stock obtained from the exercise of options for specified periods of time, and remedies available to the Company in the event of the breach of any such covenant. ARTICLE 6 TERMINATION; TRANSFERABILITY SECTION 6.01. Termination of Employment. Except as otherwise provided in connection with the grant of any option or the termination of any Participant, in the event a Participant's employment or service with the Company is terminated other than by reason of death or disability, (a) the right to exercise any unvested option or unvested portion of any option granted under the Plan shall terminate on the date of termination of the relationship between the Participant and the Company and (b) the right to exercise any option or portion of any option granted under the Plan which is vested as of the date of termination of employment or service shall terminate upon the earlier of (i) the thirtieth day following such termination of employment or service or (ii) the date such option or portion of an option would have expired had it not been for the termination of employment or service. The option may not be exercised after its expiration in accordance with the foregoing terms, and the shares of Common Stock subject to the unexercised portion of such option may again be subject to new options under 5 the Plan. Such restrictions shall not apply to the options granted pursuant to Article VII which shall be exercisable in accordance with the terms thereof. SECTION 6.02. Death or Disability of Participant. Except as otherwise permitted in connection with the grant of any option or the death or disability of a Participant, in the event a Participant dies or is disabled while he is a consultant, advisor, director or employee of the Company, any options theretofore granted to him shall be exercisable only within the next 12 months immediately succeeding such death or disability and then only (a) in the case of death, by the person or persons to whom the Participants rights under the option shall pass by will or the laws of descent and distribution, and in the case of disability, by such Participant or his legal representative, and (b) if and to the extent that he was entitled to exercise the option at the date of his death or disability. Such restrictions shall not apply to the options of Participating Directors which shall be exercisable in accordance with the terms set forth in Article VII hereof. SECTION 6.03. Transferability. Options granted to a Participant under the Plan shall not be transferable otherwise than by will, by the laws of descent and distribution, (if authorized in the applicable Stock Option Agreement) pursuant to a qualified domestic relations order ("QDRO") as defined by the Internal Revenue Code of 1986, as amended, or Title I of the Employee Retirement Income Security Act of 1974, as amended, or the rules thereunder or to a member of the immediate family of the Participant, within the meaning of Rule 16a-1(e) of the Securities Exchange Act of 1934, as amended, a trust for such family members, a partnership whose only partners are such family members or a charitable institution within the meaning of Section 501(c)(3) of the Code (each an "Authorized Transferee"). During the Participant's lifetime, options shall be exercised only by such Participant, such Participant's guardian or legal representative, or such Participant's Authorized Transferee. ARTICLE 7 DIRECTORS' GRANTS SECTION 7.01. Eligibility. Annually, on February 15 of each of the Company's Fiscal Years, any Director of the Company who at the time is not a full-time employee of the Company (a "Participating Director"), shall be granted an option for 15,000 shares of Common Stock, except that the Chairman who is not a full-time employee of the Company shall be granted an option for 30,000 shares of Common Stock. Each person who becomes a Participating Director after the first day of the Company's fiscal year and within nine months of that date shall be granted, on the date that person becomes a Participating Director, an option for a number of shares of Common Stock determined by pro rating the normal 15,000 share annual amount (or 30,000 if the Chairman) based 6 on the period of time remaining in the fiscal year in which such person becomes a Participating Director. No person who owns 10% or more of the outstanding Common Stock of the Company (including shares of Common Stock issuable upon exercise of outstanding options and warrants), shall be granted options under this Article. Options under this Article are non-discretionary. SECTION 7.02. Options Terms. Options granted under this Article VII shall not be exercisable until the date upon which the option holder has provided one year of continuous service as a Participating Director following the date of grant of such option. Options granted pursuant to this Article shall have an exercise price equal to the Fair Market Value (as hereinafter defined) of the Common Stock on the date of the grant. The term "Fair Market Value" for the Common Stock on any particular date shall mean the last reported sale price of the Common Stock on the principal market on which the Common Stock trades on such date or, if no trades of Common Stock are made or reported on such date, then on the next preceding date on which the Common Stock traded. Notwithstanding any other provisions of this Plan, except as set forth in Section 6.03, options granted under this Article shall remain exercisable for ten years after the date of grant and the option holder (or his legal representative or that of his estate) may continue to exercise an option notwithstanding that the holder ceases to be a Participating Director. SECTION 7.03. Other Provisions. In all other respects, Options granted under this Article VII shall be subject to the other provisions of the Plan, including but not limited to those governing method of exercise, exercise payment, tax withholding, and transferability. Notwithstanding any other provisions of this Plan, the provisions of this Article VII may not be amended more than once every six months, other than to comport with changes in the Code. ARTICLE 8 CAPITAL ADJUSTMENTS SECTION 8.01. Capital Adjustments. If any change is made in the shares of Common Stock subject to the Plan or subject to any option granted under the Plan (through merger, consolidation, reorganization, recapitalization, stock dividend, split-up, combination of shares, exchange of shares, issuance of rights to subscribe, or change in capital structure), appropriate adjustments shall be made by any of the Committees or the Board as to the maximum number of shares subject to the Plan and the number of shares and price per share subject to outstanding options as shall be equitable to prevent dilution or enlargement of option rights. Any determination made by any of the Committees or the Board 7 under this Article VIII shall be final, binding and conclusive upon each Participant. ARTICLE 9 LEGAL REQUIREMENTS, ETC. SECTION 9.01. Revenue Stamps. The Company shall be responsible and shall pay for any transfer, revenue, or documentary stamps with respect to shares issued upon the exercise of options granted under the Plan. SECTION 9.02. Legal Requirements. The Company shall not be required to issue certificates for shares upon the exercise of any option unless and until, in the opinion of the Company's legal counsel, such issuance would not result in a violation of any state or Federal securities or other law. Certificates for shares, when issued, shall have, if required in the opinion of the Company's legal counsel, the following legend, or statements of other restrictions, endorsed thereon, and may not immediately be transferable: The shares of Common Stock evidenced by this certificate have been issued to the registered owner in reliance upon written representations that these shares have been purchased for investment. These shares may not be sold, transferred, or assigned unless, in the opinion of the Company and its legal counsel, such sale, transfer, or assignment will not be in violation of the Securities Act of 1933, as amended, applicable rules and regulations of the Securities and Exchange Commission and any applicable state securities laws. SECTION 9.03. Private Offering. The options to be granted under the Plan are available only to a limited number of present and future key consultants, advisors, directors and employees of the Company who have knowledge of the Company's financial condition, management, and affairs. Such options are not intended to provide additional capital for the Company, but are to encourage stock ownership by the Company's key personnel. By the act of accepting an option, in the absence of an effective registration statement under the Securities Act of 1933, as amended, Participants shall agree that upon exercise of such option, they will acquire the shares of Common Stock that are the subject thereof for investment and not with any intention at such time to resell or redistribute the same, and they shall confirm such agreement at the time of exercise, but the neglect or failure to confirm the same in writing shall not be a limitation of such agreement. 8 ARTICLE 10 GENERAL SECTION 10.01. Application of Funds. The proceeds received by the Company from the sale of shares of Common Stock pursuant to the exercise of options therefor shall be used for general corporate purposes. SECTION 10.02. Right of the Company to Terminate Relationship. Nothing contained in the Plan or in a Stock Option Agreement shall confer upon any Participant any right to be continued as a consultant, advisor, director or employee of the Company, or interfere in any way with the right of the Company to terminate such relationship for any reason whatsoever, with or without cause, at any time. SECTION 10.03. No Obligation to Exercise. The granting of an option hereunder shall impose no obligation upon the Participant to exercise such option. SECTION 10.04. Effectiveness of Plan. The Plan shall become effective upon its adoption by the Board. Options may be granted under the Plan prior to the approval of the Plan by the Shareholders, but no such option may be exercised prior to such approval. SECTION 10.05. Other Benefits. Participation in the Plan shall not preclude a Participant from eligibility in any other stock benefit plan of the Company or any old age benefit, insurance, pension, profit sharing, retirement, bonus or other plan which the Company has adopted, or may, at any time, adopt. SECTION 10.06. Tax Requirements. The exercise or surrender of any option under this Plan shall constitute a Participant's full and complete consent to whatever action any of the Committees or the Board elect to satisfy the Federal and state withholding requirements, if any, which the Committee in its discretion deems applicable to such exercise. SECTION 10.07. Interpretations and Adjustments. To the extent permitted by Law, an interpretation of the Plan and a decision on any matter within any of the Committees' or the Board's discretion made in good faith is binding on all persons. A misstatement or other mistake of fact shall be corrected when it becomes known, and the person responsible shall make such adjustment on account thereof as he considers equitable and practicable. SECTION 10.08. Information. The Company shall, upon request or as may be specifically required hereunder, furnish or cause to be furnished, all of the information or documentation which is necessary or required by any of the Committees or the Board to perform its duties and functions under the Plan. 9 SECTION 10.09. Governing Law. The Plan and any and all options granted thereunder shall be governed by, and construed and enforced in accordance with, the laws of the State of New York from time to time in effect. SECTION 10.10. Certain Definitions. (a) "Parent". The term "parent" shall mean a "parent corporation" as defined in Section 424(e) of the Code. (b) "Subsidiary". The term "subsidiary" shall mean a "subsidiary corporation" as defined in Section 424(f) of the Code. (c) "Disabled". The term "disabled" shall have the definition set forth in Section 22(a) (3) of the Code. 10 EX-99.3 6 Exhibit 99.3 IMCLONE SYSTEMS INCORPORATED 1998 NON-QUALIFIED STOCK OPTION PLAN, AS AMENDED1 ARTICLE 1 PURPOSE OF PLAN SECTION 1.01. General Purpose. The purpose of this Non-Qualified Stock Option Plan (the "Plan") is to promote the interests of ImClone Systems Incorporated (the "Company") by affording consultants, advisors, and non-officer employees an opportunity to acquire a proprietary interest in the Company pursuant to stock options issued by the Company, and thus to create in such persons increased personal interest in its continued success. SECTION 1.02. Statutory Stock Option. Options granted under the Plan are intended to be "non-qualified" stock options under the Internal Revenue Code of 1986, as amended (the "Code"). ARTICLE 2 SHARES SUBJECT TO PLAN SECTION 2.01. Description of Shares. Subject to Article VII hereof, the stock to which the Plan applies is shares of the Company's common stock, $.001 par value ("Common Stock"), either authorized but unissued or Treasury shares. The number of shares of Common Stock to be issued or sold pursuant to options granted hereunder shall not exceed 3,000,000 shares. SECTION 2.02. Restoration of Unpurchased Shares. Any shares subject to an option granted hereunder that, for any reason, expires or is terminated unexercised as to such shares may again be subject to an option to be granted hereunder. - -------- 1 Amended by the Board of Directors on July 7, 1998 and December 16, 1999. ARTICLE 3 ADMINISTRATION; COMMITTEES; AMENDMENTS SECTION 3.01. Administration. The Plan shall be administered by any of the Compensation and Stock Option Committee (the "Committee") or the Board of Directors of the Company (the "Board"). The Committee shall be comprised of not less than two persons who shall be appointed by the Board from among the members of the Board. SECTION 3.02. Duration; Removal; Etc. The members of the Committee shall serve at the pleasure of the Board, which shall have the power at all times to remove members from the Committee or to add members thereto. Vacancies in the Committee, however caused, shall be filled by action of the Board. SECTION 3.03. Meetings; Actions of Committee. The Committee may select one of its members as its Chairman and shall hold meetings at such times and places as it may determine. All decisions or determinations of the Committee and the Board shall be made by the majority vote or decision of all of its members, whether present at a meeting or not; provided, however, that any decision or determination reduced to writing and signed by all of the members shall be as fully effective as if this had been made at a meeting duly called and held. The Committee and the Board may make such rules and regulations for the conduct of its business not inconsistent herewith as it may deem advisable. SECTION 3.04. Interpretation. The interpretation and construction by the Committee or the Board of the provisions of the Plan or of the options granted hereunder shall be final, unless in the case of the Committee otherwise determined by the Board. No member of the Board or of the Committee shall be liable for an action taken or determination made in good faith. SECTION 3.05. Amendments or Discontinuation. The Board may make such amendments, changes, and additions to the Plan, or may discontinue and terminate the Plan, as it may deem advisable from time to time; provided, however, that no action shall affect or impair any options theretofore granted under the Plan. ARTICLE 4 PARTICIPANTS; PARTICIPATION GUIDELINES; DURATION OF PLAN SECTION 4.01. Eligibility and Participation. Options shall be granted only to persons ("Participants") who at the time of granting are consultants, advisors, or non-officer employees of the Company or a subsidiary. For purposes 2 of the Plan, an Assistant Vice President will be considered a non-officer employee. The Committee or the Board shall determine the consultants, advisors, and non-officer employees to be granted options hereunder, the number of shares of Common Stock subject to such options, the exercise prices of options, the terms thereof and any other provisions not inconsistent with the Plan. Persons who are disabled within the meaning of the Code shall not be eligible for the grant of options. SECTION 4.02. Guidelines for Participation. In selecting Participants and determining the numbers of shares of Common Stock for which options are to be granted, either the Committee or the Board shall consult with officers and directors of the Company, and shall take into account the duties of the respective persons, their present and potential contributions to the success of the Company, and such other factors of the Committee or the Board shall deem relevant. SECTION 4.03. Duration of Plan. All options under the Plan shall be granted within ten years from the date the Plan is approved by the Committee and the Board. ARTICLE 5 TERMS AND CONDITIONS OF OPTIONS SECTION 5.01. Individual Stock Option Agreements or Notices. All stock options granted pursuant to the Plan shall be evidenced by stock option agreements or notices ("Stock Option Agreements"), which need not be identical, in such form as any of the Committee or the Board shall from time to time approve, subject to the terms of the Plan which may, but need not, be executed or acknowledged by a Participant. SECTION 5.02. Number of Shares. Each Stock Option Agreement shall state the total number of shares of Common Stock with respect to which the option is granted, the terms and conditions of the option, and the exercise price or prices thereof, it being understood that the Committee or the Board shall have authority to prescribe in any Stock Option Agreement that the option evidenced thereby may be exercisable in full or in part, as to any number of shares subject thereto, at any time or from time to time during said term as the Committee or the Board may determine; provided that no option granted pursuant to the Plan shall be exercisable after the expiration of ten years from the date such option is granted. Except as otherwise provided in any Stock Option Agreement, an option may be exercised at any time or from time to time during the term of the option as to any or all full (but no fractional) shares which have become purchasable under such option. The Committee or the Board shall have the right to accelerate, in 3 whole or in part, from time to time, conditionally or unconditionally, the right to exercise any option granted hereunder. SECTION 5.03. Option Price. The price at which the shares of Common Stock subject to each option granted under this Plan may be purchased (the "option price" or "exercise price") shall be determined by any of the Committee or the Board, which shall have the authority at the time the option is granted to prescribe in any Stock Option Agreement that the price per share, with the passage of pre-determined periods of time, shall increase from the original price to higher prices. SECTION 5.04. Method of Exercising Option; Full Payment. Subject to the terms of Section 6.01 and Section 6.02 hereof, options granted pursuant to the Plan may be exercised only if the Participant was, at all times during the period beginning on the date the option was granted and ending on the date of such exercise, a key consultant, advisor or a non-officer employee of the Company or a subsidiary. Options shall be exercised by written notice to the Company, addressed to the Company at its principal place of business. Such notice shall state the Participant's election to exercise the option and the number of shares of Common Stock in respect of which it is being exercised, and shall be signed by the Participant so exercising the option. Such notice shall be accompanied by payment of the full purchase price of such shares, which payment shall be by wire transfer, certified or bank check or in stock of the Company that has been owned by the Participant for at least six months, or as agreed to by the Board, other consideration; and such written representations and other documents as may be desirable, in the opinion of the Company's legal counsel, for purposes of compliance with state or Federal securities or other laws. In the case of payment made in stock of the Company, the stock shall be valued at its Fair Market Value (as hereinafter defined) on the last business day prior to the date of exercise. The term "Fair Market Value" for the Common Stock on any particular date shall mean the last reported sale price of the Common Stock on the principal market on which the Common Stock trades on such date or, if no trades of Common Stock are made or reported on such date, then on the next preceding date on which the Common Stock traded. The Company shall deliver a certificate or certificates representing shares of Common Stock purchased pursuant to such notice to the purchaser as soon as practicable after receipt of such notice, subject to Article VIII hereof. Either the Committee or the Board may amend an already outstanding Stock Option Agreement to add a provision permitted by clause (b) of this Section 5.4, and no such amendment, by itself, shall be deemed to constitute the grant of a new option for purposes of this Plan. SECTION 5.05. Rights as a Shareholder. No Participant shall have any rights as a shareholder with respect to shares of Common Stock subject to an option granted under the Plan until the date of the issuance to such Participant of a stock certificate in respect of such shares. No adjustment shall be made for 4 dividends or other rights for which the record date is prior to the date such stock certificate is issued. SECTION 5.06. Other Provisions. Stock Option Agreements entered into pursuant to the Plan may contain such other provisions (not inconsistent with the Plan) as each of the Committee or the Board may deem necessary or desirable, including, but not limited to, covenants on the part of the Participant not to compete, not to sell Common Stock obtained from the exercise of options for specified periods of time, and remedies available to the Company in the event of the breach of any such covenant. ARTICLE 6 TERMINATION; TRANSFERABILITY SECTION 6.01. Termination of Employment. Except as otherwise provided in connection with the grant of any option or the termination of any Participant, in the event a Participant's employment or service with the Company is terminated other than by reason of death or disability, (a) the right to exercise any unvested option or unvested portion of any option granted under the Plan shall terminate on the date of termination of the relationship between the Participant and the Company and (b) the right to exercise any option or portion of any option granted under the Plan which is vested as of the date of termination of employment or service shall terminate upon the earlier of (i) the thirtieth day following such termination of employment or service or (ii) the date such option or portion of an option would have expired had it not been for the termination of employment or service. The option may not be exercised after its expiration in accordance with the foregoing provisions, and the shares of Common Stock subject to the unexercised portion of such option may again be subject to new options under the Plan. SECTION 6.02. Death or Disability of Participant. Except as otherwise permitted in connection with the grant of any option or the death or disability of a Participant, in the event a Participant dies or is disabled while he is a consultant, advisor or non-officer employee of the Company or a subsidiary, any options theretofore granted to him shall be exercisable only within the next 12 months immediately succeeding such death or disability and then only (a) in the case of death, by the person or persons to whom the Participants rights under the option shall pass by will or the laws of descent and distribution, and in the case of disability, by such Participant or his legal representative, and (b) if and to the extent that he was entitled to exercise the option at the date of his death or disability. 5 SECTION 6.03. Transferability. Options granted to a Participant under the Plan shall not be transferable otherwise than by will, by the laws of descent and distribution, or (if authorized in the applicable Stock Option Agreement) pursuant to a qualified domestic relations order ("QDRO") as defined by the Internal Revenue Code of 1986, as amended, or Title I of the Employee Retirement Income Security Act of 1974, as amended, or the rules thereunder or to a member of the immediate family of the Participant, within the meaning of Rule 16a-1(e) of the Securities Exchange Act of 1934, as amended, a trust for such family members, a partnership whose only partners are such family members or a charitable institution within the meaning of Section 501(c)(3) of the Code (each an "Authorized Transferee"). During the Participant's lifetime, options shall be exercised only by such Participant, such Participant's guardian or legal representative, or such Participant's Authorized Transferee. ARTICLE 7 CAPITAL ADJUSTMENTS SECTION 7.01. Capital Adjustments. If any change is made in the shares of Common Stock subject to the Plan or subject to any option granted under the Plan (through merger, consolidation, reorganization, recapitalization, stock dividend, split-up, combination of shares, exchange of shares, issuance of rights to subscribe, or change in capital structure), appropriate adjustments shall be made by either the Committee or the Board as to the maximum number of shares subject to the Plan and the number of shares and price per share subject to outstanding options as shall be equitable to prevent dilution or enlargement of option rights. Any determination made by either the Committee or the Board under this Article VII shall be final, binding and conclusive upon each Participant. ARTICLE 8 LEGAL REQUIREMENTS, ETC SECTION 8.01. Revenue Stamps. The Company shall be responsible and shall pay for any transfer, revenue, or documentary stamps with respect to shares issued upon the exercise of options granted under the Plan. SECTION 8.02. Legal Requirements. The Company shall not be required to issue certificates for shares upon the exercise of any option unless and until, in the opinion of the Company's legal counsel, such issuance would not result in a violation of any state or Federal securities or other law. Certificates for shares, 6 when issued, shall have, if required in the opinion of the Company's legal counsel, the following legend, or statements of other restrictions, endorsed thereon, and may not immediately be transferable: The shares of Common Stock evidenced by this certificate have been issued to the registered owner in reliance upon written representations that these shares have been purchased for investment. These shares may not be sold, transferred, or assigned unless, in the opinion of the Company and its legal counsel, such sale, transfer, or assignment will not be in violation of the Securities Act of 1933, as amended, applicable rules and regulations of the Securities and Exchange Commission and any applicable state securities laws. SECTION 8.03. Private Offering. The options to be granted under the Plan are available only to a limited number of present and future consultants, advisors and non-officer employees of the Company who have knowledge of the Company's financial condition, management, and affairs. Such options are not intended to provide additional capital for the Company, but are to encourage stock ownership by the Company's personnel. By the act of accepting an option, in the absence of an effective registration statement under the Securities Act of 1933, as amended, Participants shall agree that upon exercise of such option, they will acquire the shares of Common Stock that are the subject thereof for investment and not with any intention at such time to resell or redistribute the same, and they shall confirm such agreement at the time of exercise, but the neglect or failure to confirm the same in writing shall not be a limitation of such agreement. ARTICLE 9 GENERAL SECTION 9.01. Application of Funds. The proceeds received by the Company from the sale of shares of Common Stock pursuant to the exercise of options therefor shall be used for general corporate purposes. SECTION 9.02. Right of the Company to Terminate Relationship. Nothing contained in the Plan or in a Stock Option Agreement shall confer upon any Participant any right to be continued as a consultant, advisor or non-officer employee of the Company, or interfere in any way with the right of the Company to terminate such relationship for any reason whatsoever, with or without cause, at any time. SECTION 9.03. No Obligation to Exercise. The granting of an option hereunder shall impose no obligation upon the Participant to exercise such option. 7 SECTION 9.04. Effectiveness of Plan. The Plan shall become effective upon its adoption by the Committee and ratification of the Board. Options may be granted under the Plan prior to the ratification of the Plan by the Board, but no such option may be exercised prior to such approval. SECTION 9.05. Other Benefits. Participation in the Plan shall not preclude a Participant from eligibility in any other stock benefit plan of the Company or any old age benefit, insurance, pension, profit sharing, retirement, bonus or other plan which the Company has adopted, or may, at any time, adopt. SECTION 9.06. Tax Requirements. The exercise or surrender of any option under this Plan shall constitute a Participant's full and complete consent to whatever action the Committee or the Board elect to satisfy the Federal and state withholding requirements, if any, which the Committee in its discretion deems applicable to such exercise. SECTION 9.07. Interpretations and Adjustments. To the extent permitted by Law, an interpretation of the Plan and a decision on any matter within either the Committee or the Board's discretion made in good faith is binding on all persons. A misstatement or other mistake of fact shall be corrected when it becomes known, and the person responsible shall make such adjustment on account thereof as he considers equitable and practicable. SECTION 9.08. Information. The Company shall, upon request or as may be specifically required hereunder, furnish or cause to be furnished, all of the information or documentation which is necessary or required by either the Committee or the Board to perform its duties and functions under the Plan. SECTION 9.09. Governing Law. The Plan and any and all options granted thereunder shall be governed by, and construed and enforced in accordance with, the laws of the State of New York from time to time in effect. SECTION 9.10. Certain Definitions. (a) "Parent". The term "parent" shall mean a "parent corporation" as defined in Section 424(e) of the Code. (b) "Subsidiary". The term "subsidiary" shall mean a "subsidiary corporation" as defined in Section 424(f) of the Code. (c) "Disabled". The term "disabled" shall have the definition set forth in Section 22(a) (3) of the Code. 8 EX-99.4 7 Exhibit 99.4 IMCLONE SYSTEMS INCORPORATED NON-QUALIFIED STOCK OPTION AGREEMENT AGREEMENT, entered into as of the 4th day of January, 1999, by and between ImClone Systems Incorporated, a Delaware corporation (the "Company"), and the undersigned who has joined the Company as its Vice President, Product and Process Development (the "Employee"). WHEREAS, the Company desires to grant the Employee a non-qualified stock option to acquire shares of the Company's common stock, $.001 par value per share ("Common Stock"); and WHEREAS the Employee desires to accept such option subject to the terms and conditions of this Agreement. NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements contained herein, the Company and the Employee, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, intending to be legally bound, hereby agree as follows: 1. Grant of Option. The Company hereby grants to the Employee a non-qualified stock option (the "Option") to purchase all (or any part of) 60,000 (sixty thousand) shares of Common Stock (the "Shares"), on the terms and conditions hereinafter set forth. This Option is not intended to be treated as an incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"). 2. Exercise Price. The exercise price (the "Exercise Price") for the Shares covered by the Option shall be $8.44 (which was the closing price of the Common Stock on the NASDAQ National Market on November 19, 1998, the date the Employee accepted his position with the Company). 3. Vesting Schedule. Subject to the terms hereof, the Option shall vest and become exercisable by the Employee cumulatively, in accordance with the following schedule: (a) for 25% of the shares of Common Stock subject to the Option as of January 4, 2000; (b) for an additional 25% of the shares of Common Stock subject to the Option as of January 4, 2001; (c) for an additional 25% of the shares of Common Stock subject to the Option as of January 4, 2002; and (d) for the remaining 25% of the shares of Common Stock subject to the Option as of January 4, 2003. 4. Term of Option; Termination. (1) Basic Term.The Option shall expire on, and not be exercisable following, the tenth anniversary of the date hereof; provided, that the Option is subject to earlier termination as provided in Section 4(b) and Section 4(c). (2) Termination of Employee.Upon the termination of the Employee' employment relationship with the Company or a subsidiary thereof for any reason (other than by reason of the death or disability of the Employee), the Employee' right to exercise any previously unexercised portion of the Option shall immediately terminate on the date of such termination of employment. (3) Death or Disability of Employee.In the event that the Employee dies or is disabled while he is an employee of the Company or a subsidiary thereof, the Option shall be exercisable only within the next 12 months immediately succeeding such death or disability, and then only (a) in the case of death, by the person or persons to whom the Employee' rights under the Option shall pass by will or the laws of descent and distribution, and in the case of disability, by the Employee or his legal representative, and (b) if and to the extent that the Employee was entitled to exercise the Option at the date of his death or disability. The unvested portion of the Option shall terminate immediately upon the date of such death or disability. 5. Transferability. (1) The Option shall not be transferred or otherwise assigned in any manner otherwise than by will, by the laws of descent and distribution, or pursuant to a qualified domestic relations order ("QDRO") as defined by the Internal Revenue Code of 1986, as amended, or Title I of the Employee Retirement Income Security Act of 1974, as amended, or the rules thereunder. During the Employee' lifetime, the Option shall be exercised only by the Employee, the Employee's guardian or legal representative, or the Employee's transferee pursuant to a QDRO. The terms of this Agreement shall be binding upon the heirs, executors, administrators, successors and assigns of Employee. Any purported transfer of the Option or this Agreement contrary to the provisions of this Section 5 shall be null and void ab initio. (2) By acceptance of this Option and execution of this Agreement, the Employee hereby agrees, on his own behalf and on behalf of his heirs, executors, administrators and assigns that, in connection with any underwritten public offering of shares of Common Stock, the Employee and the Employee's heirs, executors, administrators and assigns will enter into such restrictions on the sale or transfer of the shares of Common Stock issuable upon exercise of this Option as the Company and any underwriter(s) for such offering may reasonably request in order to facilitate the offer, sale and distribution of securities of the Company in connection with such offering, whether or not this Option has been exercised at the time of such offering. 6. Method of Exercising Option; Full Payment. Subject to the terms of Section 4(b) and Section 4(c) hereof, the Option granted hereby may be exercised only if the Employee was, at all times during the period beginning on the date hereof and ending on the date of such exercise, an employee of the Company or a subsidiary. The Option shall be exercised by written notice to the Company, addressed to the Company at its principal place of business. Such notice shall state the Employee's election to exercise the Option and the number of shares of Common Stock in respect of which it is then being exercised, and shall be signed by the Employee. Such notice shall be accompanied by (a) this Agreement (which, if not then being exercised by the Employee for all the shares of Common Stock then remaining subject to the Option granted hereby, shall be appropriately endorsed and returned to the Employee); (b) payment of the full purchase price of such shares, which payment shall be by wire transfer, certified or bank check or in stock of the Company that has been owned by the Employee for at least six months, or as agreed to by the Board (as defined), other consideration; and such written representations and other documents, including legal opinions, as may be desirable, in the opinion of the Company's legal counsel, for purposes of compliance with state or Federal securities or other laws. In the case of payment made in stock of the Company, the stock shall be valued at its Fair Market Value (as hereinafter defined) on the last business day prior to the date of exercise. The term "Fair Market Value" for the Common Stock on any particular date shall mean the last reported sale price of the Common Stock on the principal market on which the Common Stock trades on such date or, if no trades of Common Stock are made or reported on such date, then on the next preceding date on which the Common Stock traded. The Company shall deliver a certificate or certificates representing shares of Common Stock purchased pursuant to such notice to the Employee as soon as practicable after receipt of such notice, subject to Section 10 hereof. 7. Capital Adjustments. If any change is made in the shares of Common Stock subject to the Option (through merger, consolidation, reorganization, recapitalization, stock dividend, split-up, combination of shares, exchange of shares, issuance of rights to subscribe, or change in capital structure), appropriate adjustments shall be made by either the Committee (as defined) or the Board as to the maximum number of shares subject to the Option and the number of shares and price per share subject to the Option as shall be equitable to prevent dilution or enlargement of option rights of the Employee. Any determination made by either the Committee or the Board under this Section 7 shall be final, binding and conclusive upon the Employee. 8. Administration; Interpretation. The Option and this Agreement shall be administered by any of the Compensation and Stock Option Committee of the Company (the "Committee") or the Board of Directors of the Company (the "Board"). The interpretation and construction by the Committee or the Board of the provisions of the Option granted hereunder and of this Agreement shall be final, unless in the case of the Committee otherwise determined by the Board. No member of the Board or of the Committee shall be liable for an action taken or determination made in good faith. 9. Rights as a Shareholder. The Employee shall have no rights as a shareholder with respect to shares of Common Stock subject to the Option granted hereby until the date of the issuance to Employee of a stock certificate in respect of such shares. No adjustment shall be made for dividends or other rights for which the record date is prior to the date such stock certificate is issued. 10. Legal Requirements, Etc. (1) Revenue Stamps. The Company shall be responsible and shall pay for any transfer, revenue, or documentary stamps with respect to shares of Common Stock issued upon the exercise of the Option. (2) Legal Requirements. The Company shall not be required to issue certificates for shares upon the exercise of the Option unless and until, in the opinion of the Company's legal counsel, such issuance would not result in a violation of any state or Federal securities or other law. As a condition to the exercise of the Option, the Company may require Employee to make any representation or warranty to the Company as may be required by applicable securities laws or any other law or governmental regulation. Certificates for shares, when issued, shall have, if required in the opinion of the Company's legal counsel, the following legend, or statements of other restrictions, endorsed thereon, and may not immediately be transferable: "The shares of Common Stock evidenced by this certificate have been issued to the registered owner in reliance upon written representations that these shares have been purchased for investment. These shares may not be sold, transferred, or assigned unless, in the opinion of the Company and its legal counsel, such sale, transfer, or assignment will not be in violation of the Securities Act of 1933, as amended, applicable rules and regulations of the Securities and Exchange Commission and any applicable state securities laws." 11. Private Offering. By the act of accepting this Option and executing this Agreement, in the absence of an effective registration statement under the Securities Act of 1933, as amended, the Employee hereby agrees that upon exercise of such Option, he will acquire the shares of Common Stock that are the subject thereof for the purposes of investment only, and not with any intention at such time to resell or redistribute the same, and Employee hereby agrees that he shall upon request of the Company confirm such agreement at the time of exercise in a writing reasonably satisfactory to the Company and its counsel; provided, however, that the neglect or failure to confirm the same in writing shall in no way be construed or interpreted to be a limitation of such agreement. 12. Right of the Company to Terminate Relationship. Nothing contained in this Agreement shall confer upon the Employee any right to be continued as an employee of the Company or any subsidiary thereof, or interfere in any way with the right of the Company or any subsidiary thereof to terminate such relationship for any reason whatsoever, with or without cause, at any time. 13. No Obligation to Exercise. The granting of the Option hereunder shall impose no obligation upon the Employee to exercise such Option. 14. Tax Requirements. The exercise or surrender of this Option shall constitute the Employee?s full and complete consent to whatever action the Committee or the Board elect to satisfy the Federal and state withholding requirements, if any, which the Committee in its discretion deems applicable to such exercise. 15. Governing Law. This Agreement and the Option granted hereby shall be governed by, and construed and enforced in accordance with, the laws of the State of New York from time to time in effect. 16. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall constitute a duplicate original, and all of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, the Company has caused this Agreement to be executed, by its officer thereunto duly authorized, and the Employee has executed this Agreement, all as of the day and year first written above. IMCLONE SYSTEMS INCORPORATED EMPLOYEE By: /s/ John B. Landes /s/ Dr. S. Joseph Tarnowski ------------------------------ ----------------------------- John B. Landes (Sign name) General Counsel ----------------------------- Dr. S. Joseph Tarnowski Address: ----------------------------- ----------------------------- ----------------------------- Telecopier Number: ----------------------------- Social Security Number: -----END PRIVACY-ENHANCED MESSAGE-----