8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

June 6, 2005

(Date of earliest event reported)

PHARMACYCLICS, INC.

(Exact name of registrant as specified in its charter)

Delaware 000-26658 94-3148201

 (State or other jurisdiction of incorporation)  (Commission File Number) (I.R.S. Employer Identification Number)

995 E. Arques Avenue
Sunnyvale, California 94085-4521
(408) 774-0330

(Address of principal executive offices including zip code and registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01     Entry into a Material Definitive Agreement.

On June 6, 2005 Pharmacyclics, Inc., a Delaware corporation (the "Registrant"), issued a press release announcing that it has named Geoffrey Cooper, Ph.D., as senior vice president, business development. Dr. Cooper, who has over 25 years of experience in the pharmaceutical industry, joins Pharmacyclics as a member of the management team and will be responsible for leading the business development activities at Pharmacyclics. Additionally, the Company's Board of Directors approved an inducement grant to Dr. Cooper of a non-qualified stock option to purchase 100,000 shares of Pharmacyclics' common stock. This option award was granted without stockholder approval pursuant to NASDAQ Marketplace Rule 4350(i)(1)(A) (iv) and with the following material terms: (a) an exercise price of $7.76 which is equal to the fair market value of Pharmacyclics' common stock on the grant date (June 3, 2005), (b) a term of 10 years, and (c) a vesting schedule providing that the option vests as to 1/4th of the total grant on the one-year anniversary of Dr. Cooper 's hire, and 1/48th of the total grant each month thereafter until the grant is fully vested.

The foregoing description is qualified in its entirety by reference to the Registrant's Press Release dated June 6, 2005, a copy of which is attached hereto as Exhibit 99.1 and incorporated herein by reference.

Pharmacyclics has entered into an offer letter with Dr. Cooper. Pursuant to the terms of the offer letter, Dr. Cooper will be paid an annual base salary of $250,000, will be eligible to participate in the executive cash bonus plan, and will receive a stock option grant for 100,000 shares of common stock, as described in more detail above. The offer letter is attached to this report as Exhibit 99.2.

Executive Bonus Plan

Pharmacyclics maintains an executive cash bonus program administered by the Compensation Committee of the Board of Directors. The purpose of the program is to reward executive officers of the Company, including the chief executive officer, for successful achievement of certain corporate and individual goals. The Compensation Committee historically sets a one year performance period to run from July 1 through June 30 and establishes in advance a list of specific corporate and individual goals as well as specific bonus amounts tied to each goal.

On June 3, 2005, the Compensation Committee approved executive goals and associated bonus target amounts for fiscal year 2006. The bonus targets are divided into three categories: 1) clinical development, 2) corporate development, and 3) individual goals. Bonus targets are payable in an aggregate amount of up to 30% of the executive's base salary, if at all.

The actual bonuses payable for fiscal year 2006 will vary depending on the extent to which actual performance meets, exceeds, or falls short of the targets approved by the Compensation Committee. In addition, the Compensation Committee retains the discretion to increase, reduce or eliminate the bonus that might otherwise be payable to any individual based on actual performance as compared to pre-established goals.

Also on June 3, 2005, the Compensation Committee approved the payment of the following cash bonuses for the prior three month period to the Company's named executive officers, pursuant to the terms of the company's fiscal 2005 executive cash bonus plan:

Name, Title/Amount

Richard A. Miller M.D., President and Chief Executive Officer/$17,748.60
Timothy G. Whitten, Senior Vice President, Commercial Operations and Development/$12,907.81
Leiv Lea, Vice President, Finance and Administration and Chief Financial Officer /$10,414.46
Hugo Madden, Ph.D., Vice President, Chemical Operations/$10,471.12
Markus F. Renschler M.D., Vice President Oncology Clinical Development/$25,262.51

Item 9.01     Financial Statements and Exhibits.

(c)     Exhibits

Exhibit No.	Description
99.1	Press Release of Pharmacyclics, Inc. dated June 6, 2005.
99.2	Offer letter, dated May 16, 2005, by and between the Company and Geoffrey Cooper, Ph.D.
99.3	Notice of Grant of Employment Commencement Non-Qualified Stock Option, dated June 3, 2005, by and between the Company and Geoffrey Cooper, Ph.D.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:   June 7, 2005

PHARMACYCLICS, INC.
By:           /s/ LEIV LEA   
Name:   Leiv Lea
Title:     Vice President, Finance & Administration
              and CFO and Secretary

INDEX TO EXHIBITS FILED WITH
THE CURRENT REPORT ON FORM 8-K DATED JUNE 6, 2005

Exhibit	Description
99.1	Press Release of Pharmacyclics, Inc. dated June 6, 2005.	PDF
99.2	Offer letter, dated May 16, 2005, by and between the Company and Geoffrey Cooper, Ph.D.	PDF
99.3	Notice of Grant of Employment Commencement Non-Qualified Stock Option, dated June 3, 2005, by and between the Company and Geoffrey Cooper, Ph.D.	PDF

         ^PDF    Also provided in PDF as a courtesy.

EX-99.1

EXHIBIT 99.1

Contacts:

Leiv Lea
Pharmacyclics, Inc.
(408) 774-0330
Carolyn Bumgardner Wang
WeissComm Partners
(415) 946-1065

PHARMACYCLICS APPOINTS GEOFFREY COOPER, PH.D., AS SENIOR VICE PRESIDENT, BUSINESS DEVELOPMENT

Sunnyvale, Calif. -- June 6, 2005 -- Pharmacyclics, Inc. (Nasdaq: PCYC) today announced the appointment of Geoffrey Cooper, Ph.D., as Senior Vice President, Business Development. Dr. Cooper, who has over 25 years of experience in the pharmaceutical industry, joins Pharmacyclics as a member of the management team and will be responsible for leading the business development activities at Pharmacyclics.

Additionally, the company's Board of Directors approved a grant to Dr. Cooper of a non-qualified stock option to purchase 100,000 shares of Pharmacyclics' common stock. This option award was granted without stockholder approval pursuant to NASDAQ Marketplace Rule 4350(i)(1)(A)(iv) and with the following material terms: (a) an exercise price of $7.76, which is equal to the fair market value of Pharmacyclics' common stock on the grant date (June 3, 2005), (b) a term of 10 years, and (c) a vesting schedule providing that the option vests as to 1/4 of the total grant on the one-year anniversary of Dr. Cooper's hire, and 1/48th of the total grant each month thereafter until the grant is fully vested.

Dr. Cooper joins Pharmacyclics from OSI Pharmaceuticals, Inc., where, most recently, he was Vice President of Corporate Development. In that position he was responsible for all corporate development activities, including mergers and acquisitions, divestments, research collaborations, and licensing transactions including the collaboration with Genentech and Roche for the global development and co-marketing of OSI's flagship oncology product, Tarceva^TM, and with Serono for the exclusive promotion of Novantrone^® in oncology.

Prior to joining OSI in1998, Dr. Cooper was Senior Licensing Officer at Tanabe Seiyaku Co., Ltd.; and spent 19 years in positions of increasing responsibility at the Lederle Laboratories Division of American Cyanamid and at Wyeth where he was Assistant Vice President, Worldwide Licensing.

After graduating with a degree in pharmacy, Dr. Cooper received his Ph.D. in pharmaceutical chemistry from the University of Aston, Birmingham, U.K., and conducted post-doctoral research in metabolic disease at University College, Cardiff, U.K.

About Pharmacyclics

Pharmacyclics is a pharmaceutical company developing innovative products to treat cancer and atherosclerosis. The company's products are rationally designed, ring-shaped small molecules called texaphyrins that are designed to selectively target and disrupt the bioenergetic processes of diseased cells, such as cancer and atherosclerotic plaque. More information about the company, its technology, and products in development can be found on its website at www.pharmacyclics.com. Pharmacyclics^® and the "pentadentate" logo^® are registered trademarks of Pharmacyclics, Inc.

###

EX-99.2

EXHIBIT 99.2

PHARMACYCLICS, INC.

995 East Arques Avenue

Sunnyvale, CA 94085-4521

May 16, 2005

Dear Geoff:

On behalf of the Company's Board of Directors, I am pleased to make you an offer to join the Company as its Senior Vice President of Business Development. The purpose of this letter is to set forth the terms of your proposed employment with the Company, including your compensation level and benefit entitlements.

1. Employment and Duties.

1. The Company will employ you as Senior Vice President of Business Development, commencing not later than June 3, 2005, and you will accordingly make yourself available on a full-time basis to assume that position on or before such date. In that position, you will report directly to the President & CEO, although this is subject to change at the discretion of the Board of Directors.
2. You will perform the duties inherent in your position in good faith and to the best of your ability and will render all services which may be reasonably required of you in such position. While you are employed with the company, you will devote your full time and effort to the business and affairs of the Company. Initially, your principal place of operations will be at the Company's offices located in the Princeton, New Jersey area. However, it is anticipated that you may be required to relocate to the Company's headquarters in the Bay Area at some future date providing that the data from the pivotal phase 3 SMART trial is positive and regulatory approval in the U.S. is likely. It is understood that at the appropriate time, the Company will discuss the financial terms of a relocation package with you, although there can be no assurance that such terms will be acceptable to either party.
3. Upon the commencement of your services as Senior Vice President of Business Development, the Company will enter into an Executive Severance Benefit Agreement (the "change of control" agreement) that has been made available to Executive Officers of the Company.

2. Compensation.

1. Your initial base salary will be at the rate of $250,000 per year. Your base salary will be subject to adjustment by the Company's Board of Directors on an annual basis. You will also be eligible for participation in the Executive Bonus Plan subject to awards based on approval by the Company's Board of Directors.
2. Your base salary will be paid at periodic intervals in accordance with the Company's payroll practices for salaried employees.
3. The Company will deduct and withhold, from the base salary and bonuses payable to you hereunder, any and all applicable Federal, state and local income and employment withholding taxes and any other amounts required to be deducted or withheld by the Company under applicable statute or regulation.

3. Employee Stock Options. As soon as possible after you join the Company as Senior Vice President of Business Development, you will be granted a non-qualified stock option to purchase 100,000 shares of Pharmacyclics Common Stock. The option will have an exercise price equal to 100% of the fair market value of the Pharmacyclics Common Stock on the grant date and will have a maximum term of 10 years, subject to earlier termination upon your cessation of employment with the Company. The option will become exercisable as follows: the option will become exercisable for 25,000 shares upon completion of one year of service after your date of hire; he option will become exercisable for the remaining 75,000 shares in a series of 36 equal successive monthly installments upon completion of each month of service thereafter. All vesting under your option will cease upon your termination of employment. The remaining terms and conditions of your option will be in accordance with the standard provisions utilized for stock option grants under the Company's Stock Option Plan.

4. Expense Reimbursement. You will be entitled to reimbursement from the Company for all customary, ordinary and necessary business expenses incurred by you in the performance of your duties hereunder, provided you furnish the Company with vouchers, receipts and other details of such expenses within thirty (30) days after they are incurred.

5. Fringe Benefits. You will be eligible to participate in any group life insurance plan, group medical and/or dental insurance plan, accidental death and dismemberment plan, short-term disability program and other employee benefit plans, including the Section 401(k) plan and the Employee Stock Purchase Plan, which are made available to executive officers of the Company and for which you otherwise qualify.

6. Vacation. You will accrue paid vacation benefits in accordance with the Company policy in effect for executive officers.

7. Restrictive Covenants. During the period of service as Senior Vice President of Business Development:

1. you will devote your full working time and effort to the performance of your duties; and
2. except as approved by the President & CEO you will not directly or indirectly, whether for your own account or as an employee, consultant or advisor, provide services to any business enterprise other than the Company.

However, you will have the right to perform such incidental services as are necessary in connection with (a) your private passive investments, (b) your charitable or community activities, and (c) your participation in trade or professional organizations, but only to the extent such incidental services do not interfere with the performance of your services.

8. Proprietary Information. Upon the commencement of your services as Senior Vice President of Business Development, you will sign and deliver to the Company the standard-form Proprietary Information and Inventions Agreement required of all key employees of the Company.

9. Termination of Employment: Salary Continuation.

1. Your employment pursuant to this agreement will be entirely at will.
2. The Company may terminate your employment under this agreement at any time for any reason, with or without cause (as defined below), by providing you with at least thirty (30) days prior written notice. However, such notice requirement will not apply to the termination of your employment for cause pursuant to subparagraph D below.
3. You may terminate your employment under this agreement at any time for any reason upon thirty (30) days prior written notice to the Company.
4. The Company may at any time, upon written notice, terminate your employment hereunder for cause. Such termination will be effective immediately upon such notice.

For purposes of this agreement, your employment with the Company will be deemed to have been involuntarily terminated for cause if your services are terminated by the Company for one or more of the following reasons:

1. acts of fraud or embezzlement or other intentional misconduct which adversely affects the Company's business, or
2. failure to correct any material deficiency in the performance of your services as Senior Vice President of Business Development within thirty (30) days written notification of such deficiency from the Board, or
3. misappropriation or unauthorized disclosure or use of the Company's proprietary information.

Please indicate your acceptance of the foregoing provisions of this employment agreement by signing the enclosed copy of this agreement and returning it to the Company.

Very truly yours,

PHARMACYCLICS, INC.

By /s/ Richard A. Miller

Richard A. Miller, M.D.
President and Chief Executive Officer

ACCEPTED BY AND AGREED TO

Signature: /s/ Geoffrey Cooper

Geoffrey Cooper, Ph.D.

Dated: May 16th, 2005

EX-99.3

EXHIBIT 99.3

PHARMACYCLICS, INC.

NOTICE OF GRANT OF

EMPLOYMENT COMMENCEMENT NON-QUALIFIED STOCK OPTION

Notice is hereby given of the following option grant (the "Option") to purchase shares of the Common Stock of Pharmacyclics, Inc. (the "Company"):

Participant:	Geoffrey Cooper, Ph.D.
Grant Date:	June 3, 2005
Vesting Commencement Date:	May 31, 2005
Exercise Price:	$7.76
Number of Option Shares:	100,000
Expiration Date:	June 2, 2015
Type of Option:	Non-Qualified Stock Option
Date Exercisable:	Immediately Exercisable

Vesting Schedule: The Option Shares shall be unvested and subject to repurchase by the Company at the Exercise Price paid per share. As Participant remains in Service (as defined in the attached Employment Commencement Non-Qualified Stock Option Agreement), the Participant shall acquire a vested interest in, and the Company's Repurchase Right will accordingly lapse with respect to, (i) 25% of the Option Shares one (1) year after the Vesting Commencement Date and (ii) the balance of the Option Shares in equal successive monthly installments over each of the next thirty-six (36) months of Service thereafter. In no event will any additional Option Shares vest after the Participant's cessation of Service.

Participant agrees to be bound by the terms of the Option as set forth in the Employment Commencement Non-Qualified Stock Option Agreement attached hereto as Exhibit A.

Participant hereby acknowledges receipt of a copy of the official prospectus for this Option in the form attached hereto as Exhibit B.

REPURCHASE RIGHTS. THE PARTICIPANT HEREBY AGREES THAT ALL OPTION SHARES ACQUIRED UPON THE EXERCISE OF THE OPTION PRIOR TO PARTICIPANT'S VESTING IN SUCH SHARES SHALL BE SUBJECT TO CERTAIN REPURCHASE RIGHTS AND RIGHTS OF FIRST REFUSAL EXERCISABLE BY THE COMPANY AND ITS ASSIGNS UPON ANY PROPOSED SALE, ASSIGNMENT, TRANSFER, ENCUMBRANCE OR OTHER DISPOSITION OF THE COMPANY'S SHARES OR UPON TERMINATION OF SERVICE WITH THE COMPANY. THE TERMS AND CONDITIONS OF SUCH RIGHTS ARE SPECIFIED IN THE FORM OF STOCK PURCHASE AGREEMENT OR EXERCISE NOTICE PROVIDED BY THE COMPANY.

No Employment or Service Contract. Nothing in this Notice or in the attached Employment Commencement Non-Qualified Stock Option Agreement shall confer upon Participant any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Parent or Subsidiary employing or retaining Participant) or of Participant, which rights are hereby expressly reserved by each, to terminate Participant's Service at any time for any reason, with or without cause.

Definitions. All capitalized terms in this Notice shall have the meaning assigned to them in this Notice or in the attached Employment Commencement Non-Qualified Stock Option Agreement.

____________________, 20_______
Date

PHARMACYCLICS, INC.

By:

Title:

__________________________________
PARTICIPANT

Address:

ATTACHMENTS
Exhibit A - Employment Commencement Non-Qualified Stock Option Agreement
Exhibit B - Prospectus

Exhibit A

PHARMACYCLICS, INC.

EMPLOYMENT COMMENCEMENT
NON-QUALIFIED STOCK OPTION AGREEMENT

RECITALS

THIS EMPLOYMENT COMMENCEMENT NON-QUALIFIED STOCK OPTION AGREEMENT, is made by and between the Company, and Geoffrey Cooper, Ph.D., an employee of the Company (the "Participant").

WHEREAS, the Board has determined that it would be to the advantage and best interest of the Company and its stockholders to grant the Non-Qualified Stock Option provided for herein to Participant in connection with his initial commencement of employment with the Company and that such grant is an essential inducement to Participant's commencing employment with the Company.

WHEREAS, all capitalized terms in this Agreement shall have the meaning assigned to them as defined herein or in the attached Appendix.

NOW, THEREFORE, it is hereby agreed as follows:

1. Grant of Option. The Company hereby grants to Participant, as of the Grant Date, an option to purchase up to the number of Option Shares specified in the Grant Notice. The Option Shares shall be purchasable from time to time during the option term specified in Paragraph 2 at the Exercise Price.
2. Option Term. This option shall have a term of ten (10) years measured from the Grant Date and shall accordingly expire at the close of business on the Expiration Date, unless sooner terminated in accordance with Paragraph 5 or 6.
3. Limited Transferability. This option shall be neither transferable nor assignable by Participant other than by will or by the laws of descent and distribution following Participant's death and may be exercised, during Participant's lifetime, only by Participant. This option may, in connection with the Participant's estate plan, be assigned in whole or in part during Participant's lifetime to one or more members of the Participant's family or to a trust established for the exclusive benefit of one or more such family members. The assigned portion shall be exercisable only by the person or persons who acquire a proprietary interest in the option pursuant to such assignment. The term applicable to the assigned portion shall be the same as those in effect for this option immediately prior to such assignment and shall be set forth in such documents issued to the assignee as the Committee may deem appropriate.
4. Dates of Exercise. This option shall become exercisable for the Option Shares in one or more installments as specified in the Grant Notice. As the option becomes exercisable for such installments, those installments shall accumulate and the option shall remain exercisable for the accumulated installments until the Expiration Date or sooner termination of the option term under Paragraph 5 or 6.
5. Cessation of Service. The option term specified in Paragraph 2 shall terminate (and this option shall cease to be outstanding) prior to the Expiration Date should any of the following provisions become applicable:
1. Should Participant be terminated from employment or Service for any reason (other than death or Disability) while this option is outstanding, then Participant shall have a period of three (3) months (commencing with the date of such cessation of Service) during which to exercise this option, but in no event shall this option be exercisable at any time after the Expiration Date.
2. Should Participant cease Service by reason of death or Disability, then, in the case of Death, the personal representative of Participant's estate or the person or persons to whom the option is transferred pursuant to Participant's will or in accordance with the laws of descent and distribution, and in the case of Disability, the Participant, shall have the right to exercise this option. Such right shall lapse and this option shall cease to be outstanding from the earlier of (a) the expiration of the twelve (12)-month period measured from the date of Participant's death or Disability or (b) the Expiration date.
3. Should Participant cease Service by reason of Disability while this option is outstanding, then Participant shall have a period of twelve (12) months (commencing with the date of such cessation of Service) during which to exercise this option. In no event shall this option be exercisable at any time after the Expiration Date.
4. Should Participant's Service be terminated for Misconduct, then this option shall terminate immediately and cease to remain outstanding.
5. During the limited period of post-Service exercisability, this option may not be exercised in the aggregate for more than the number of vested Option Shares for which the option is exercisable at the time of Participant's cessation of Service. However, in the event of the Optionee's cessation of Service, by reason of death or Disability, this Option shall immediately vest in full. Upon the expiration of such limited exercise period or (if earlier) upon the Expiration Date, this option shall terminate and cease to be outstanding for any vested Option Shares for which the option has not been exercised. To the extent Participant is not vested in the Option Shares at the time of Participant's cessation of Service, this option shall immediately terminate and cease to be outstanding with respect to those shares.
6. In the event of a Corporate Transaction or Change in Control, the provisions of Paragraph 6 shall govern the period for which this option is to remain exercisable following Participant's cessation of Service and shall supersede any provisions to the contrary in this paragraph.
6. Special Acceleration of Option.
1. In the event of any Corporate Transaction or Change in Control, each outstanding option, which is not otherwise vested or remains subject to forfeiture shall automatically accelerate so that each such option shall, immediately prior to the Corporate Transaction or Change in Control become vested and exercisable with regard to fifty percent (50%) of the shares of Common Stock which are at the time subject to such option and unvested and may be exercised for all or any portion of such shares as fully-vested shares of Common Stock, if applicable and fifty percent (50%) of the forfeiture restrictions on such options, if applicable, will lapse. The remaining shares of Common Stock at the time subject to each outstanding option, but not otherwise vested pursuant to the terms of preceding sentence, shall automatically accelerate so that each such option shall, immediately prior to the Corporate Transaction or Change in Control become vested and exercisable with regard to the remaining shares, if applicable, and the forfeiture restrictions shall lapse, provided however, the remaining shares shall not become vested and exercisable on such accelerated basis and the remaining forfeiture restrictions will not lapse, if and to the extent, such option is assumed or substituted by the successor corporation. In the event the Participant's service is terminated by reason of Involuntary Termination, within twelve (12) months following a Corporate Transaction or Change in Control in which a portion of such option was assumed or substituted, the shares subject to such option shall thereupon vest in full and, if applicable, the remaining forfeiture restrictions shall lapse. Any options so accelerated shall remain exercisable for fully-vested shares, if applicable, until the earlier of (i) the expiration of their term or (ii) the expiration of the one (1)-year period measured from the effective date of the Involuntary Termination.
2. Immediately following the Corporate Transaction, this option, to the extent not previously exercised, shall terminate and cease to be outstanding, except to the extent assumed by the successor corporation (or parent thereof) in connection with the Corporate Transaction.
3. If this option is assumed in connection with a Corporate Transaction, then this option shall be appropriately adjusted, immediately after such Corporate Transaction, to apply to the number and class of securities which would have been issuable to Participant in consummation of such Corporate Transaction had the option been exercised immediately prior to such Corporate Transaction, and appropriate adjustments shall also be made to the Exercise Price, provided the aggregate Exercise Price shall remain the same.
4. This Agreement shall not in any way affect the right of the Company to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.
7. Adjustment in Option Shares. Should any change be made to the Common Stock by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares or other change affecting the outstanding Common Stock as a class without the Company's receipt of consideration, appropriate adjustments shall be made to (i) the total number and/or class of securities subject to this option and (ii) the Exercise Price in order to reflect such change and thereby preclude a dilution or enlargement of benefits hereunder.
8. Stockholder Rights. The holder of this option shall not have any stockholder rights with respect to the Option Shares until such person shall have exercised the option, paid the Exercise Price and become a holder of record of the purchased shares.
9. Manner of Exercising Option.
1. In order to exercise this option with respect to all or any part of the Option Shares for which this option is at the time exercisable, Participant (or any other person or persons exercising the option) must take the following actions:
1. Execute and deliver to the Company a Notice of Exercise for the Option Shares for which the option is exercised.
2. Pay the aggregate Exercise Price for the purchased shares in one or more of the following forms:
1. cash or check made payable to the Company;
2. a promissory note payable to the Company, but only to the extent authorized by the Committee in accordance with Paragraph 13;
3. shares of Common Stock held by Participant (or any other person or persons exercising the option) for the requisite period necessary to avoid a charge to the Company's earnings for financial reporting purposes and valued at Fair Market Value on the Exercise Date; or
4. through a special sale and remittance procedure pursuant to which Participant (or any other person or persons exercising the option) shall concurrently provide irrevocable written instructions (a) to a Company- designated brokerage firm to effect the immediate sale of the purchased shares and remit to the Company, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate Exercise Price payable for the purchased shares plus all applicable Federal, state and local income and employment taxes required to be withheld by the Company by reason of such exercise and (b) to the Company to deliver the certificates for the purchased shares directly to such brokerage firm in order to complete the sale transaction.

Except to the extent the sale and remittance procedure is utilized in connection with the option exercise, payment of the Exercise Price must accompany the Notice of Exercise delivered to the Company in connection with the option exercise.

3. Furnish to the Company appropriate documentation that the person or persons exercising the option (if other than Participant) have the right to exercise this option.
4. Make appropriate arrangements with the Company (or Subsidiary employing or retaining Participant) for the satisfaction of all Federal, state and local income and employment tax withholding requirements applicable to the option exercise.
2. As soon as practical after the Exercise Date, the Company shall issue to or on behalf of Participant (or any other person or persons exercising this option) a certificate for the purchased Option Shares, with the appropriate legends affixed thereto.
3. In no event may this option be exercised for any fractional shares.
10. Compliance with Laws and Regulations.
1. The exercise of this option and the issuance of the Option Shares upon such exercise shall be subject to compliance by the Company and Participant with all applicable requirements of law relating thereto and with all applicable regulations of any stock exchange (or the Nasdaq National Market, if applicable) on which the Common Stock may be listed for trading at the time of such exercise and issuance.
2. The inability of the Company to obtain approval from any regulatory body having authority deemed by the Company to be necessary to the lawful issuance and sale of any Common Stock pursuant to this option shall relieve the Company of any liability with respect to the non-issuance or sale of the Common Stock as to which such approval shall not have been obtained. The Company, however, shall use its best efforts to obtain all such approvals.
11. Successors and Assigns. Except to the extent otherwise provided in Paragraphs 3 and 6, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the Company and its successors and assigns and Participant, Participant's assigns and the legal representatives, heirs and legatees of Participant's estate.
12. Notices. Any notice required to be given or delivered to the Company under the terms of this Agreement shall be in writing and addressed to the Company at its principal corporate offices. Any notice required to be given or delivered to Participant shall be in writing and addressed to Participant at the address indicated below Participant's signature line on the Grant Notice. All notices shall be deemed effective upon personal delivery or upon deposit in the U.S. mail, postage prepaid and properly addressed to the party to be notified.
13. Financing. The Committee may, in its absolute discretion and without any obligation to do so, permit Participant to pay the Exercise Price for the purchased Option Shares by delivering a promissory note. The terms of any such promissory note (including the interest rate, the requirements for collateral and the terms of repayment) shall be established by the Committee in its sole discretion.
14. Construction. This Agreement and the option evidenced hereby are made and granted pursuant to this Agreement and are in all respects limited by and subject to the terms of such Agreement. All decisions of the Committee with respect to any question or issue arising under this Agreement shall be conclusive and binding on all persons having an interest in this option.
15. Governing Law. The interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of California without resort to that State's conflict-of-laws rules.

EXHIBIT I

NOTICE OF EXERCISE

I hereby notify Pharmacyclics, Inc. (the "Company") that I elect to purchase            shares of the Company's Common Stock (the "Purchased Shares") at the option exercise price of $            per share (the "Exercise Price") pursuant to that certain option (the "Option") granted to me on June 3, 2005.

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


____________________, _______
Date

	_______________________________________ Participant
	Address: ________________________________
	__________________________________
Print name in exact manner it is to appear on the stock certificate:	__________________________________
Address to which certificate is to be sent, if different from address above:	__________________________________
	__________________________________
Social Security Number:	__________________________________

APPENDIX

The following definitions shall be in effect under the Agreement:

1. Agreement shall mean this Employment Commencement Non- Qualified Stock Option Agreement.
2. Board shall mean the Board of Directors of the Company.
3. Change in Control shall mean a change in ownership or control of the Company effected through either of the following transactions:
1. the acquisition, directly or indirectly, by any person or related group of persons (other than the Company or a person that directly or indirectly controls, is controlled by, or is under common control with, the Company), of beneficial ownership (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of securities possessing more than fifty percent (50%) of the total combined voting power of the Company's outstanding securities pursuant to a tender or exchange offer made directly to the Company's stockholders which the Board does not recommend such stockholders to accept, or
2. a change in the composition of the Board over a period of thirty-six (36) consecutive months or less such that a majority of the Board members ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who either (1) have been Board members continuously since the beginning of such period or (2) have been elected or nominated for election as Board members described in clause (1) who were still in office at the time the Board approved such election or nomination.
4. Code shall mean the Internal Revenue Code of 1986, as amended.
5. Committee shall mean the Compensation Committee of the Board. Reference to the Committee shall refer to the Board if the Compensation Committee ceases to exist and the Board does not appoint a successor Committee.
6. Common Stock shall mean the Company's common stock.
7. Company shall mean Pharmacyclics, Inc., a Delaware corporation.
8. Consultant shall mean any consultant or adviser if:
1. The consultant or adviser renders bona fide services to the Company;
2. The services rendered by the consultant or adviser are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for the Company's securities; and
3. The consultant or adviser is a natural person who has contracted directly with the Company to render such services.
9. Corporate Transaction shall mean either of the following stockholder-approved transactions to which the Company is a party:
1. a merger or consolidation in which securities possessing more than fifty percent (50%) of the total combined voting power of the Company's outstanding securities are transferred to a person or persons different from the persons holding those securities immediately prior to such transaction, or
2. the sale, transfer or other disposition of all or substantially all of the Company's assets in complete liquidation or dissolution of the Company.
10. Disability shall mean that the Participant qualifies to receive long-term disability payments under the Company's long-term disability insurance program, as it may be amended from time to time.
11. Employee shall mean any officer or other employee (as defined in accordance with Section 3401 (c) of the Code) of the Company or any Subsidiary.
12. Exercise Date shall mean the date on which the option shall have been exercised in accordance with Paragraph 9 of the Agreement.
13. Exercise Price shall mean the exercise price per share as specified in the Grant Notice.
14. Expiration Date shall mean the date on which the option expires as specified in the Grant Notice.
15. Fair Market Value means, as of any given date, the fair market value of a share of Stock on such date determined by such methods or procedures as may be established from time to time by the Committee. Unless otherwise determined by the Committee, the Fair Market Value of a share of Stock as of any date shall be the closing price for a share of Stock as reported on the Nasdaq National Market (or on any national securities exchange on which the Stock is then listed) for such date or, if no such price is reported for that date, the closing price on the next preceding date for which such price was reported.
16. Grant Date shall mean the date of grant of the option as specified in the Grant Notice.
17. Grant Notice shall mean the Notice of Grant of Employment Commencement Non-Qualified Stock Option accompanying the Agreement, pursuant to which Participant has been informed of the basic terms of the option evidenced hereby.
18. Involuntary Termination shall mean the termination of Participant's service by reason of:
1. Participant's involuntary dismissal or discharge by the Company for reasons other than for Misconduct, or
2. Participant's voluntary resignation following (A) a reduction in Participant's level of compensation (including base salary, fringe benefits and target bonus under any corporate-performance based incentive programs) by more than ten percent (10%) or (B) a relocation of the Participant's place of employment by more than forty (40) miles, provided and only if such change, reduction or relocation is effected by the Company without Participant's consent.
19. Misconduct shall mean the termination of Participant's Service by reason of Participant's commission of any act of fraud, embezzlement or dishonesty, any unauthorized use or disclosure by Participant of confidential information or trade secrets of the Company (or any parent or Subsidiary), or any other intentional misconduct by Participant adversely affecting the business or affairs of the Company (or any parent or Subsidiary) in a material manner.
20. Notice of Exercise shall mean the notice of exercise in the form attached hereto as Exhibit I.
21. Option shall mean a right granted to a Participant pursuant to this Agreement to purchase a specified number of shares of Stock at a specified price during specified time periods.
22. Option Shares shall mean the number of shares of Common Stock subject to the option as specified in the Grant Notice.
23. Parent shall mean any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, provided each corporation in the unbroken chain (other than the Company) owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.
24. Service shall mean the Participant's performance of services for the Company (or any Subsidiary) in the capacity of an Employee, a Non- Employee Director or a Consultant.
25. Stock shall mean the common stock of the Company, par value $0.0001 per share.
26. Subsidiary shall mean any corporation or other entity of which a majority of the outstanding voting stock or voting power is beneficially owned directly or indirectly by the Company