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Filing
As
filed with the Securities and Exchange Commission on July 12,
2005
Registration
No. 333-_________
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
S-8
REGISTRATION
STATEMENT UNDER THE
SECURITIES
ACT OF 1933
ADVENTRX
Pharmaceuticals, Inc..
(Exact
name of registrant as specified in its charter)
|
|
Delaware
(State
or other jurisdiction of incorporation
or organization)
|
84-1318182
(IRS
employer identification no.)
|
6725
Mesa
Ridge Road, Suite 100
San
Diego, California 92121
(858)
552-0866
(Address
of principal executive offices)
2005
Equity Incentive Plan
2005
Employee Stock Purchase Plan
(Full
title of the plan)
Carrie
E. Carlander
Chief
Financial Officer
ADVENTRX
Pharmaceuticals, Inc.
6725
Mesa
Ridge Road, Suite 100
San
Diego, California 92121
(Name
and
address of agent for service)
(858)
552-0866
(Telephone
number, including
area
code, of agent for service)
CALCULATION
OF REGISTRATION FEE
Title
Of Securities To Be Registered
|
Amount
To Be
Registered
(1)
|
Proposed
Maximum
Offering
Price
Per
Share
|
Proposed
Maximum Aggregate
Offering
Price
|
Amount
Of
Registration
Fee (4)
|
|||||||||
Common
Stock, par value $0.001 per share
|
|||||||||||||
To
be issued upon exercise of options to be granted under the
2005
Equity Incentive Plan
|
6,000,000
|
$
|
2.50/2.30
|
(2)
|
$
|
13,820,000
|
$
|
1,627
|
|||||
To
be issued under the
2005
Employee Stock Purchase Plan
|
1,000,000
|
$
|
2.30
|
(3)
|
$
|
2,300,000
|
$
|
271
|
|||||
TOTAL:
|
$
|
1,898
|
|||||||||||
(1) |
In
addition, pursuant to Rule 416 under the Securities Act of 1933,
as
amended (the “Securities
Act”),
this Registration Statement also covers an indeterminate number
of
additional shares of common stock that may be offered or issued
by reason
of stock splits, stock dividends or similar
transactions.
|
(2) |
As
to options for 100,000 shares, based on a value of $2.50 per share.
As to the remaining 5,900,000 shares, estimated solely for purposes
of
calculating the amount of the registration fee. The estimate is
made
pursuant to Rule 457(c) of the Securities
Act.
|
(3) | Estimated solely for purposes of calculating the amount of the registration fee. The estimate is made pursuant to Rule 457(c) of the Securities Act. |
(4) |
Calculated
pursuant to Section 6(b) of the Securities
Act.
|
PART
I
INFORMATION
REQUIRED IN THE SECTION 10(A) PROSPECTUS
The
documents containing the information required in Part I will be sent or given
to
employees participating in the Plans, as specified by Rule 428(b)(1) promulgated
under the Securities Act of 1933, as amended (the “Securities Act”). In
accordance with the instructions to Part I of Form S-8, such documents will
not
be filed 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 promulgated under the Securities Act. These
documents and the documents incorporated by reference pursuant to Item 3
of Part
II of this registration statement, taken together, constitute the prospectus
as
required by Section 10(a) of the Securities Act.
PART
II
INFORMATION
REQUIRED IN THE REGISTRATION STATEMENT
Item
3. Incorporation Of Documents By Reference.
The
following documents filed by ADVENTRX Pharmaceuticals, Inc.. (the “Registrant”)
with the Commission pursuant to the Securities Act or the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), are hereby incorporated by
reference into this Registration Statement:
(a) |
The
section entitled “Description of Registrant’s Securities” contained in the
Registrant’s Registration Statement on Form 8-A (file No. 001-32157) filed
with the Commission on April 27, 2004, pursuant to Section 12(b)
of the
Exchange Act, including any amendment or report filed for the purpose
of
updating such description.
|
(b) |
The
Annual Report on Form 10-KSB for the fiscal year ended December
31, 2004
filed with the Securities and Exchange Commission (the “SEC”) on March 31,
2005;
|
(c) |
The
Proxy Statement on Schedule 14A filed with the SEC on April 25,
2005, a
revised version of which was filed with the SEC on May 20,
2005;
|
(d) |
The
Quarterly Report on Form 10-Q for the quarterly period ended March
31,
2005 filed with the SEC on May 16,
2005;
|
(e) |
The
Current Report on Form 8-K filed with the SEC on January 26,
2005;
|
(f) |
The
Current Report on Form 8-K filed with the SEC on March 7,
2005;
|
(g) |
The
Current Report on Form 8-K filed with the SEC on March 30,
2005;
|
(h) |
The
Current Report on Form 8-K filed with the SEC on April 5,
2005;
|
(i) |
The
Current Report on Form 8-K filed with the SEC on April 11,
2005;
|
(j) |
The
Current Report on Form 8-K filed with the SEC on April 15,
2005;
|
(k) |
The
Current Report on Form 8-K filed with the SEC on April 19,
2005;
|
(l) |
The
Current Report on Form 8-K filed with the SEC on April 25,
2005;
|
(m) |
The
Current Report on Form 8-K filed with the SEC on May 2,
2005;
|
(n) |
The
Current Report on Form 8-K filed with the SEC on May 16, 2005;
|
(o) |
The
Current Report on Form 8-K filed with the SEC on June 10, 2005;
and
|
(p) | The Current Report on Form 8-K filed with the SEC on July 6, 2005. |
In
addition, all documents filed 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
which indicates that all securities registered hereby have been sold or which
deregisters all of such securities then remaining unsold, shall be deemed
to be
incorporated by reference into this Registration Statement and to be a part
hereof from the date of filing of such documents.
Item
4. Description Of Securities.
Not
applicable.
-2-
Item
5. Interests Of Named Experts And Counsel.
The
validity of the common stock being offered hereby will be passed upon for
the
Registrant by Bingham McCutchen LLP, San Francisco, California. To our
knowledge, no partner or employee of this firm is a holder of Common Stock
of
the Registrant or otherwise has a substantial interest in the
Registrant.
Item
6. Indemnification Of Directors And Officers.
Section
145 of the Delaware General Corporation Law, or the DGCL, authorizes a court
to
award, or a corporation’s board of directors to grant, indemnity to directors
and officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act of 1933, as amended.
As
permitted by the DGCL, the Registrant’s bylaws provide that the Registrant shall
indemnify its directors and officers, and may indemnify its employees and
other
agents, to the fullest extent permitted by law. The bylaws also permit the
Registrant to secure insurance on behalf of any officer, director, employee
or
agent of another corporation, partnership, joint venture, trust or other
enterprise against any liability arising out of his or her actions in that
capacity if he or she is serving at the Registrant’s request. The Registrant has
obtained officer and director liability insurance with respect to liabilities
arising out of various matters, including matters arising under the Securities
Act.
The
Registrant’s certificate of incorporation, as amended, provides that the
Registrant shall indemnify to the fullest extent permitted by law any person
made or threatened to be made a party to an action or proceeding, whether
criminal, civil, administrative or investigative, by reason of the fact that
he,
his testator or intestate is or was a director or officer of the Registrant
or
any predecessor of the Registrant, or serves or served at any other enterprise
as a director or officer at the request of the Registrant or any predecessor
to
the Registrant.
The
Registrant has entered into agreements with its directors that, among other
things, indemnify them for certain expenses (including attorneys’ fees),
judgments, fines and settlement amounts incurred by them in any action or
proceeding, including any action by or in the right of the Registrant, arising
out of the person’s services as a director or officer of the Registrant or any
other company or enterprise to which the person provides services at the
Registrant’s request.
Item
7. Exemption From Registration Claimed.
Not
applicable.
Item
8. Exhibits.
The
following exhibits are filed as part of this Registration
Statement:
Exhibit
|
Description
|
|
4.1
|
Specimen
common stock certificate
|
|
5.1
|
Opinion
of Bingham McCutchen LLP as to the legality of the securities being
registered
|
|
10.1
|
2005
Equity Incentive Plan
|
|
10.2
|
Form
of Stock Option Agreement under the 2005 Equity Incentive
Plan
|
|
10.3
|
2005
Employee Stock Purchase Plan
|
|
10.4
|
Form
of Subscription Agreement under the 2005 Employee Stock Purchase
Plan
|
|
23.1
|
Consent
of Bingham McCutchen LLP (included in Exhibit 5.1)
|
|
23.2
|
Consent
of J.H. Cohn, LLP
|
|
24.1
|
Power
of Attorney (included in signature pages to this Registration
Statement)
|
-3-
Item
9. Undertakings
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. Notwithstanding the foregoing, any increase or decrease
in
volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation
from
the low or high and of the estimated maximum offering range may
be
reflected in the form of prospectus filed with the Commission pursuant
to
Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum aggregate
offering
price set forth in the “Calculation of Registration Fee” table in the
effective registration statement.
|
(iii)
|
To
include any material information with respect to the plan of distribution
not previously disclosed in the registration statement or any material
change to such information in the registration
statement;
|
Provided,
however,
that
paragraphs (1)(i) and (1)(ii) do not apply if the information required to
be
included in a post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission 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 registration by means of a post-effective amendment
any of the
securities being registered which remain unsold at the termination
of the
offering.
|
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.
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 Securities and Exchange 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.
-4-
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, as amended, 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 San Diego, state of California, on the
12 day of
July, 2005.
ADVENTRX
Pharmaceuticals, Inc.
By:
/s/
Evan
Levine
Evan
Levine
President
and Chief Executive Officer
POWER
OF ATTORNEY
Pursuant
to the requirements of the Securities Act, this Registration Statement has
been
signed by the following persons in the capacities indicated on the 12 day
of
July, 2005.
KNOW
ALL
PERSONS BY THESE PRESENTS, that each person whose signature appears below
hereby
constitutes and appoints Evan M. Levine and Carrie E. Carlander, and each
one of
them, acting individually and without the other, as his or her attorney-in-fact,
each with full power of substitution, for him in any and all capacities,
to sign
any and all amendments to this Registration Statement (including post-effective
amendments), and to file the same, with exhibits thereto and other documents
in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said attorneys-in-fact or his
substitute or substitutes may do or cause to be done by virtue
hereof.
/s/
Evan M. Levine
|
Chief
Executive Officer, President, Chief Operating Officer,
|
|
Evan M. Levine | Secretary and Vice Chairman (Principal Executive Officer) | |
/s/
Carrie E. Carlander
|
Chief
Financial Officer, Vice President, Finance and Treasurer
|
|
Carrie E. Carlander | (Principal Financial and Accounting Officer) | |
/s/
M.Ross Johnson
|
Chairman
|
|
M. Ross Johnson | ||
/s/
Michael M. Goldberg
|
Director
|
|
Michael M. Goldberg | ||
/s/
Mark J. Pykett
|
Director
|
|
Mark J. Pykett | ||
/s/
Mark Bagnall
|
Director
|
|
Mark Bagnall |
-5-
EXHIBIT
INDEX
Exhibit
|
Description
|
|
4.1
|
Specimen
common stock certificate for shares of Common Stock
|
|
5.1
|
Opinion
of Bingham McCutchen LLP as to the legality of the securities being
registered
|
|
10.1
|
2005
Equity Incentive Plan
|
|
10.2
|
Form
of Stock Option Agreement under the 2005 Equity Incentive
Plan
|
|
10.3
|
2005
Employee Stock Purchase Plan
|
|
10.4
|
Form
of Subscription Agreement under the 2005 Employee Stock Purchase
Plan
|
|
23.1
|
Consent
of Bingham McCutchen LLP (included in Exhibit 5.1)
|
|
23.2
|
Consent
of J.H. Cohn, LLP
|
|
24.1
|
Power
of Attorney (included in signature pages to this Registration
Statement)
|
-6-
EXHIBIT
4.1
NOT
VALID
UNLESS COUNTERSIGNED BY TRANSFER AGENT
INCORPORATED
UNDER THE LAWS OF THE STATE OF
DELAWARE
___________________
NUMBER
|
ADVENTRX
PHARMACEUTICALS, INC. LOGO
|
SHARES
|
AUTHORIZED COMMON STOCK: 100,000,000 SHARES |
CUSIP
NO. 00764X 10 3
|
|
PAR VALUE: $.001 |
THIS
CERTIFIES THAT
IS
THE RECORD HOLDER OF
Shares
of ADVENTRX
PHARMACEUTICALS, INC.
Common
Stock transferable
on the books of the Corporation in person or by duly authorized attorney
upon surrender of this Certificate properly endorsed. This
Certificate is not valid until countersigned by the Transfer Agent and
registered by the Registrar.
Witness
the facsimile seal of the Corporation and the facsimile signatures of
its duly authorized officers.
Dated: | ||
PRESIDENT & SECRETARY | TREASURER |
ADVENTRX
PHARMACEUTICALS, INC. CORPORATE SEAL
COUNTERSIGNED
& REGISTERED
|
||
INTERWEST
TRANSFER CO. INC.
P.O.
BOX 17136/SALT LAKE CITY, UTAH 84117
|
COUNTERSIGNED Transfer Agent-Authorized Signature | |
The
following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common |
UNIF
GIFT MIN ACT - ____________CUSTODIAN___________
|
TEN ENT - as tenants by the entireties | (CUST) (MINOR) |
JT
TEN - as joint tenants with
right of
|
under
Uniform
Gifts to Minors
|
survivorship
and not as tenant
In
common.
|
Act________________________________
|
(STATE)
|
|
For
Value
Received, __________________ hereby sell, assign and transfer unto
PLEASE
INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING
NUMBER OF ASSIGNEE.
(PLEASE
PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF
ASSIGNEE)
Shares
of
the capital stock represented by the within certificate, and do hereby
irrevocably constitute and Appoint____________________
Attorney
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.
Dated
________________________________________________
____________________________________________________________________________________________
NOTICE:
THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN
UPON
THE FACE OF
THE
CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERATION OR ELARGEMENT OR ANY CHANGE
WHATEVER
· |
NOTICE
SIGNATURE GUARANTEED:
|
SIGNATURE
(S) MUST BE GUARANTEED BY A FIRM WHICH IS A MEMBER OF A REGISTERED NATIONAL
STOCK EXCHANGE, OR BY A BANK (OTHER THAT A SAVING BANK), OR A TRUST COMPANY,
THE
GUARANTEEING FIRM MUST BE A MEMBER OF THE
MEDALLION GUARANTEE PROGRAM.
TRANSFER
FEE WILL APPLY
***FOR
MEDALLION GUARANTEE USE
ONLY***
|
EXHIBIT
5.1
July
8,
2005
6725
Mesa
Ridge Road, Suite 100
San
Diego, CA 92121
Registration
Statement on Form S-8
We
have
acted as counsel for ADVENTRX Pharmaceuticals, Inc., a Delaware corporation
(the
“Company”), in connection with the preparation of the Company’s Registration
Statement on Form S-8 proposed to be filed with the Securities and Exchange
Commission on or about July 8, 2005 (the “Registration
Statement”).
The
Registration Statement covers the registration of 7,000,000 shares of common
stock, par value $0.001 per share, of the Company (the “Shares”), 6,000,000 of
which are issuable by the Company under the 2005 Equity Incentive Plan,
including upon exercise of options and other similar awards granted thereunder,
and 1,000,000 of which are issuable by the Company pursuant to the 2005 Employee
Stock Purchase Plan (collectively, the 2005 Equity Incentive Plan and the
2005
Employee Stock Purchase Plan are referred to in this opinion as the
“Plans”).
We
have
reviewed the corporate proceedings of the Company with respect to the
authorization of the Plans. We have reviewed copies of each of the Plans
as
currently in effect. We have also examined and relied upon such agreements,
instruments, corporate records, certificates, and other documents as we have
deemed necessary or appropriate as a basis for the opinions hereinafter
expressed. In our examination, we have assumed the genuineness of all
signatures, the conformity to the originals of all documents reviewed by
us as
copies, the authenticity and completeness of all original documents reviewed
by
us in original or copy form, and the legal competence of each individual
executing any document.
We
further assume that all Shares issued pursuant to the Plans will be issued
in
accordance with the terms of the Plans and that the purchase price of each
of
the Shares will be at least equal to the par value of such Shares.
This
opinion is limited solely to the Delaware General Corporation Law as applied
by
courts located in Delaware, the applicable provisions of the Delaware
Constitution and the reported judicial decisions interpreting those
laws.
Based
upon and subject to the foregoing, we are of the opinion that the Shares,
when
issued and delivered upon the exercise of options or awards granted pursuant
to
and in accordance with the Plans and against the payment of any purchase
price
therefor, as specified in such Plans or documents governing such awards,
will be
validly issued, fully paid and nonassessable.
We
hereby
consent to the filing of this opinion as Exhibit 5.1 to the Registration
Statement. In giving this consent, however, we do not thereby admit that
we are
an “expert” within the meaning of the Securities Act of 1933, as
amended.
Very
truly yours,
/s/ Bingham
McCutchen LLP
Exhibit
10.1
ADVENTRX
Pharmaceuticals, Inc.
2005
Equity Incentive Plan
1. Purpose.
The
2005
Equity Incentive Plan (the “Plan”)
of
ADVENTRX Pharmaceuticals, Inc., a Delaware corporation (the “Company”),
is
intended to encourage ownership of Stock by employees, consultants and directors
of the Company and Affiliates and to provide additional incentive for them
to
promote the success of the Company’s business through the grant of Awards. The
Plan is intended to be an incentive stock option plan within the meaning
of
Section 422 of the Code, but not all Awards are required to be Incentive
Options.
2. Definitions.
As
used
in the Plan, the terms set forth below shall have the meanings set forth
below:
2.1 Accelerate,
Accelerated,
and
Acceleration
means:
(a) when used with respect to an Option or Stock Appreciation Right, that
as of
the time of reference the Option or Stock Appreciation Right will become
exercisable with respect to some or all of the Stock or Stock Appreciation
Right
for which it was not then otherwise exercisable by its terms; (b) when used
with
respect to Restricted Stock or Restricted Stock Units, that the Risk of
Forfeiture otherwise applicable to such Stock or Restricted Stock Units shall
expire with respect to some or all of the Restricted Stock or Units then
still
otherwise subject to the Risk of Forfeiture; and (c) when used with respect
to
Performance Units, that the applicable Performance Goals shall be deemed
to have
been met as to some or all of the Units.
2.2 Acquisition
means
a
merger or consolidation of the Company with or into another person or the
sale,
transfer, or other disposition of all or substantially all of the Company’s
assets to one or more other persons in a single transaction or series of
related
transactions.
2.3 Affiliate
means
any
corporation, partnership, limited liability company, business trust, or other
entity controlling, controlled by or under common control with the
Company.
2.4 Award
means
any
grant or sale pursuant to the Plan of Options, Stock Appreciation Rights,
Performance Units, Restricted Stock, Restricted Stock Units or Stock
Grants.
2.5 Award
Agreement means
an
agreement between the Company and a Participant, setting forth the terms
and
conditions of an Award.
2.6 Board
means
the
Board of Directors of the Company.
2.7 Change
of Control means
the
occurrence of any of the following after the date of the approval of the
Plan by
the Board:
(a) an
Acquisition, unless in connection with any merger or consolidation securities
possessing more than 50% of the total combined voting power of the survivor’s or
acquiror’s outstanding securities (or the securities of any parent thereof) are
held by a person or persons who held securities possessing more than 50%
of the
total combined voting power of the Company’s outstanding securities immediately
prior to that transaction;
(b) any
person or group of persons (within the meaning of Section 13(d)(3)
of the
Exchange Act) directly or indirectly acquires beneficial ownership (determined
pursuant to Rule 13d-3 promulgated under the Exchange Act) of securities
possessing more than 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 that the Board does not recommend such stockholders
accept, other than (i) the Company or an Affiliate, (ii) an
employee
benefit plan of the Company or any Affiliates, (iii) a trustee or
other
fiduciary holding securities under an employee benefit plan of the Company
or
any Affiliates, or (iv) an underwriter temporarily holding securities
pursuant to an offering of such securities;
(c) over
a
period of 36 consecutive months or less, there is a change in the composition
of
the Board such that a majority of the Board members (rounded up to the next
whole number, if a fraction) ceases, by reason of one or more proxy contests
for
the election of Board members, to be composed of individuals who either
(i) have been Board members continuously since the beginning of that
period, or (ii) have been elected or nominated for election as Board
members during such period by at least a majority of the Board members described
in the preceding clause (i) who were still in office at the time that
election or nomination was approved by the Board; or
(d) a
majority of the Board votes in favor of a decision that a Change of Control
has
occurred.
2.8 Code
means
the
Internal Revenue Code of 1986, as amended, or any successor statutes thereto,
and any regulations issued from time to time thereunder.
2.9 Committee
means
the
Compensation Committee of the Board, which in general is responsible for
the
administration of the Plan, as provided in Section 5. For any period
during
which no such committee is in existence, “Committee” means the Board, and all
authority and responsibility assigned to the Committee under the Plan shall
be
exercised, if at all, by the Board.
2.10 Continuous
Service
means
the absence of any interruption or termination of service as an employee,
director or consultant of the Company or any Subsidiary. Continuous Service
shall not be considered interrupted during any period of (i) any leave
of
absence approved by the Company or (ii) transfers between locations
of the
Company or between the Company and any Parent, Subsidiary or successor of
the
Company.
2.11 Covered
Employee means
an
employee who is a “covered employee” within the meaning of Section 162(m) of the
Code.
2.12 Effective
Date means
May
24, 2005, the date the requisite number of stockholders of the Company approved
the Plan.
2.13 Exchange
Act means
the
Securities Exchange Act of 1934, as amended.
-2-
2.14 Grant
Date means
the
date as of which an Award is granted, as determined under
Section 7.1(a).
2.15 Incentive
Option means
an
Option which by its terms is to be treated as an “incentive stock option” within
the meaning of Section 422 of the Code.
2.16 Market
Value means
the
value of a share of Stock on a particular date determined by such methods
or
procedures as may be established by the Committee. Unless otherwise determined
by the Committee, the Market Value of a share of Stock as of any date is
the
closing price for a Stock as reported on the American Stock Exchange LLC
(or on
any national securities exchange or other established market on which the
Stock
is then listed) for that date or, if no closing price is reported for that
date,
the closing price on the next preceding date for which a closing price was
reported.
2.17 Nonstatutory
Option means
any
Option that is not an Incentive Option.
2.18 Option
means
an
option to purchase Stock.
2.19 Optionee
means
a
Participant to whom an Option shall have been granted under the
Plan.
2.20 Parent
means
a
parent corporation of the Company, whether now or hereafter existing, as
defined
by Section 424(e) of the Code.
2.21 Participant
means
any
holder of an outstanding Award under the Plan.
2.22 Performance
Criteria means
the
criteria that the Committee selects for purposes of establishing the Performance
Goal or Performance Goals for a Participant for a Performance Period. The
Performance Criteria used to establish Performance Goals are limited to:
pre- or
after-tax net earnings, sales growth, operating earnings, operating cash
flow,
return on net assets, return on stockholders’ equity, return on assets, return
on capital, Stock price growth, stockholder returns, gross or net profit
margin,
earnings per share, price per share of Stock, and market share, any of which
may
be measured either in absolute terms or as compared to any incremental increase
or as compared to results of a peer group, results of clinical trial or FDA
approvals. The Committee will, in the manner and within the time prescribed
by
Section 162(m) of the Code in the case of Qualified Performance-Based Awards,
objectively define the manner of calculating the Performance Criteria it
selects
to use for such Performance Period for such Participant.
2.23 Performance
Goals means,
for a Performance Period, the written goals established by the Committee
for the
Performance Period based upon the Performance Criteria. Depending on the
Performance Criteria used to establish such Performance Goals, the Performance
Goals may be expressed in terms of overall Company performance or the
performance of a division, business unit, Subsidiary, or an
individual.
2.24 Performance
Period means
the
one or more periods, which may be of varying and overlapping durations, selected
by the Committee, over which the attainment of one or more Performance Goals
will be measured for purposes of determining a Participant’s right to, and the
payment of, a Performance Unit.
-3-
2.25 Performance
Unit means
a
right granted to a Participant under Section 7.5 to receive cash,
Stock or
other Awards, the payment of which is contingent on achieving Performance
Goals
established by the Committee.
2.26 person
means an
individual, a corporation, a partnership, a limited liability company, an
association, a trust or other entity or organization, including a government
or
political subdivision or an agency or instrumentality thereof.
2.27 Qualified
Performance-Based Awards means
Awards intended to qualify as “performance-based compensation” under Section
162(m) of the Code.
2.28 Restricted
Stock means
a
grant or sale of Stock to a Participant subject to a Risk of
Forfeiture.
2.29 Restricted
Stock Units means
rights to receive Stock at the close of a Restriction Period, subject to
a Risk
of Forfeiture.
2.30 Restriction
Period means
the
period of time, established by the Committee in connection with an Award
of
Restricted Stock or
Restricted Stock Units,
during
which the Restricted Stock or Restricted Stock Units are subject to a Risk
of
Forfeiture described in the applicable Award Agreement.
2.31 Risk
of Forfeiture means
a
limitation on the right of the Participant to retain Restricted Stock or
Restricted Stock Units, including a right in the Company to reacquire Restricted
Stock at less than the then Market Value of such Restricted Stock, arising
because of the occurrence or non-occurrence of specified events or
conditions.
2.32 Securities
Act means
the
Securities Act of 1933, as amended.
2.33 SEC
means
the
Securities and Exchange Commission.
2.34 Stock
means
common stock, par value $0.001 per share, of the Company, and such other
securities as may be substituted for Stock pursuant to
Section 8.
2.35 Stock
Appreciation Right means
a
right to receive any excess in the Market Value of a share of Stock (except
as
otherwise provided in Section 7.2(c)) over a specified exercise
price.
2.36 Stock
Grant means
the
grant of Stock not subject to restrictions or other forfeiture
conditions.
2.37 Subsidiary
means a
subsidiary corporation of the Company, whether now or hereafter existing,
as
defined in Section 424(f) of the Code.
-4-
2.38 Ten
Percent Owner means
a
person who owns, or is deemed within the meaning of Section 422(b)(6) of
the
Code to own, stock possessing more than 10% of the total combined voting
power
of all classes of stock of the Company (or any Parent or Subsidiary of the
Company). Whether a person is a Ten Percent Owner shall be determined with
respect to an Option based on the facts existing immediately prior to the
Grant
Date of the Option.
2.39 Vesting
Commencement Date means,
with respect to an Option or Stock Appreciation Right, the date, determined
by
the Committee, on which the vesting of the Option or Stock Appreciation Right
shall commence, which may be the Grant Date or a date prior to or after the
Grant Date.
3. Term
of the Plan.
Unless
the Plan shall have been earlier terminated by the Board, Awards may be granted
under the Plan at any time in the period commencing on the Effective Date
and
ending immediately prior to the tenth anniversary of the Effective Date.
Awards
granted pursuant to the Plan within that period shall not expire solely by
reason of the termination of the Plan.
4. Stock
Subject to the Plan.
Subject
to Section 8, the maximum aggregate number of shares of Stock which
may be
issued pursuant to or subject to outstanding Awards granted under the Plan
is
8,000,000, plus an annual increase to be automatically added on the first
day of
the Company’s fiscal year beginning in 2006 equal to the lesser of (i) one
percent of the number of outstanding shares of Stock on such day, (ii) 750,000
and (iii) such other amount as the Board may specify prior to the date such
annual increase is to take effect. The maximum aggregate number of shares
of
Stock which may be issued pursuant to or subject to outstanding Incentive
Options granted under the Plan is 6,000,000. For purposes of applying the
foregoing limitations, if any Option or Stock Appreciation Right expires,
terminates, or is cancelled for any reason without having been exercised
in
full, or if any other Award is forfeited by the recipient, the shares of
Stock
not purchased by the Optionee or which are forfeited by the recipient shall
again be available for Awards to be granted under the Plan. In addition,
exercise or settlement of any Award shall not count against the foregoing
limitations except to the extent settled in the form of Stock. Stock issued
pursuant to Awards granted under the Plan and later repurchased by the Company
pursuant to any repurchase right (other than the repurchase of shares that
have
not vested and are subject to forfeiture prior to vesting) that the Company
may
have shall not be available for future grant of Awards under the Plan.
5. Administration.
The
Plan
shall be administered by the Committee; provided,
however,
that at
any time and on any one or more occasions the Board may itself exercise any
of
the powers and responsibilities assigned the Committee under the Plan and
when
so acting shall have the benefit of all of the provisions of the Plan pertaining
to the Committee’s exercise of its authorities hereunder. Subject to the
provisions of the Plan, the Committee shall have complete authority, in its
discretion, to make or to select the manner of making all determinations
with
respect to each Award to be granted by the Company under the Plan, including
the
employee, consultant or director to receive the Award and the form of Award.
In
making such determinations, the Committee may take into account the nature
of
the services rendered by the respective employees, consultants, and directors,
their present and potential contributions to the success of the Company and
Affiliates, and such other factors as the Committee in its discretion shall
deem
relevant. Subject to the provisions of the Plan, the Committee shall also
have
complete authority to interpret the Plan, to prescribe, amend and rescind
rules
and regulations relating to it, to determine the terms and provisions of
the
respective Award Agreements (which need not be identical), and to make all
other
determinations necessary or advisable for the administration of the Plan.
The
Committee’s determinations made in good faith on matters referred to in the Plan
shall be final, binding and conclusive on all persons having or claiming
any
interest under the Plan or an Award made pursuant to hereto.
-5-
6. Authorization
of Grants.
6.1 Eligibility.
The
Committee may grant from time to time and at any time prior to the termination
or expiration of the Plan one or more Awards, either alone or in combination
with any other Awards, to any employee of or consultant to one or more of
the
Company and Affiliates or to any non-employee member of the Board or of any
board of directors (or similar governing authority) of any Affiliate. However,
only employees of the Company, and of any Parent or Subsidiary of the Company,
shall be eligible for the grant of an Incentive Option. Further, in no event
shall the number of shares of Stock covered by Options or other Awards granted
to any one person in any one calendar year exceed 1,500,000 shares of Stock
subject to the Plan.
6.2 General
Terms of Awards.
Each
grant of an Award shall be subject to all applicable terms and conditions
of the
Plan (including but not limited to any specific terms and conditions applicable
to that type of Award set out in the following Section), and such other terms
and conditions, not inconsistent with the terms of the Plan, as the Committee
may prescribe. No prospective Participant shall have any rights with respect
to
an Award, unless and until such Participant has (a) (i) executed an Award
Agreement with respect to such Award and delivered a fully executed copy
of such
Award Agreement to the Company, or (ii) otherwise affirmatively assented
to the
terms and conditions of an Award Agreement with respect to such Award, including
by “click through” agreement, pursuant to procedures and guidelines approved by
the Committee, and (b) otherwise complied with the applicable terms and
conditions of such Award.
6.3 Effect
of Termination of Employment, Disability or Death.
(a) Termination
of Employment, Etc.
Unless
the Committee shall provide otherwise with respect to any Award, if the
Participant’s employment or other association with the Company and Affiliates
ends for any reason other than by total disability or death, including because
of the Participant’s employer ceasing to be an Affiliate, (i) any outstanding
Option or Stock Appreciation Right of the Participant shall cease to be
exercisable in any respect not later than 90 days following that event and,
for
the period it remains exercisable following that event, shall be exercisable
only to the extent exercisable at the date of that event, subject to the
condition that no Option or Stock Appreciation Right shall be exercised after
its expiration in accordance with its terms, and (ii) any other outstanding
Award of the Participant shall be forfeited or otherwise subject to return
to or
repurchase by the Company on the terms specified in the applicable Award
Agreement. Military or sick leave or other public (such as jury duty) or
personal leave approved by an authorized representative of the Company shall
not
be deemed a termination of employment or other association, provided
that it
does not exceed the longer of 90 days or the period during which the absent
Participant’s reemployment rights, if any, are guaranteed by statute or by
contract.
-6-
(b) Disability
of Participant.
If a
Participant’s employment or other association with the Company and Affiliates
ends due to disability (as defined in Section 22(e)(3) of the Code), and
such
Participant was in Continuous Service from the Grant Date until the date
of
termination of service, (i) any outstanding Option or Stock Appreciation
Right
may be exercised at any time within six months following the date of termination
of service, but only to the extent of the accrued right to exercise at the
time
of termination of service, subject to the condition that no Option or Stock
Appreciation Right shall be exercised after its expiration in accordance
with
its terms and (ii) any other outstanding Award or the Participant shall be
forfeited or otherwise subject to return or repurchase by the Company on
the
terms specified in the applicable Award Agreement.
(c) Death
of Participant.
In the
event of the death of a Participant who is at the time of such Participant’s
death an employee, director or consultant and who was in Continuous Service
as
from the Grant Date until the date of death, (i) any outstanding Option or
Stock
Appreciation Right of such Participant shall cease to be exercisable in any
respect not later than 12 months following the date of death and, for the
period
it remains exercisable following the date of death, shall be exercisable
by such
Participant’s estate or by a person who acquired the right to exercise such
Award by bequest, inheritance or otherwise as a result of the Participant’s
death, but only to the extent exercisable at the date of death, subject to
the
condition that no Option or Stock Appreciation Right shall be exercised after
its expiration in accordance with its terms, and (ii) any other outstanding
Award of such Participant shall be forfeited or otherwise subject to return
to
or repurchase by the Company on the terms specified in the applicable Award
Agreement.
6.4 Transferability
of Awards.
Except
as otherwise provided in this Section 6.4, Awards shall not be transferable,
and
no Award or interest therein may be sold, transferred, pledged, assigned,
or
otherwise alienated or hypothecated, other than by will or by the laws of
descent and distribution. All of a Participant’s rights in any Award may be
exercised during the life of the Participant only by the Participant or the
Participant’s legal representative. However, the Committee may, at or after the
grant of an Award of a Nonstatutory Option, or Restricted Stock, provide
that
such Award may be transferred by the recipient through a gift or domestic
relations order in settlement of marital property rights to any of the following
donees or transferees and may be reacquired by the Participant from any of
such
donors or transferees:
(a) any
“family
member,”
which
includes any child, stepchild, grandchild, parent, stepparent, spouse, former
spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including adoptive
relationships and any individual sharing the Participant’s household (other than
a tenant or employee);
(b) a
trust
in which family members have more than 50% of the beneficial
interests;
(c) a
foundation in which “family members” (or the Participant) control the management
of assets; and
(d) any
other
entity in which “family members” (or the Participant) own more than 50% of the
voting interests.
-7-
provided,
that
(x) any such transfer is without payment of any consideration whatsoever
and that no transfer shall be valid unless first approved by the Committee,
acting in its sole discretion; (y) the Award Agreement pursuant to
which
such Awards are granted, and any amendments thereto, must be approved by
the
Committee and must expressly provide for transferability in a manner consistent
with this Section 6.4; and (z) subsequent transfers of transferred
Awards shall be prohibited except in accordance with this Section 6.4.
Following transfer, any such Awards shall continue to be subject to the same
terms and conditions as were applicable immediately prior to transfer,
provided
that
the
term of the Plan or in the Award Agreement shall continue to be applied with
respect to the original Participant, following which any Options or Stock
Appreciation Rights shall be exercisable by the transferee only to the extent,
and for the periods specified in the Award Agreement or Section 6.3,
as
applicable.
7. Specific
Terms of Awards.
7.1 Options.
(a) Date
of Grant.
The
granting of an Option shall take place at the time specified in the Award
Agreement. Only if expressly so provided in the applicable Award Agreement
shall
the Grant Date be a date other than the date on which the Award Agreement
shall
have been duly executed and delivered by the Company and the
Optionee.
(b) Exercise
Price.
The per
share price at which Stock may be acquired under each Incentive Option shall
be
not less than 100% of the Market Value of a share of Stock on the Grant Date,
or
not less than 110% of the Market Value of a share of Stock on the Grant Date
if
the Optionee is a Ten Percent Owner. The price at which shares may be acquired
under each Nonstatutory Option shall not be so limited solely by reason of
this
Section.
(c) Option
Period.
No
Incentive Option may be exercised on or after the tenth anniversary of the
Grant
Date, or on or after the fifth anniversary of the Grant Date if the Optionee
is
a Ten Percent Owner. The Option period under each Nonstatutory Option shall
not
be so limited solely by reason of this Section.
(d) Exercisability.
An
Option may be immediately exercisable or become exercisable in such
installments, cumulative or non-cumulative, as the Committee may determine.
Unless the Committee specifically determines otherwise at the time of the
grant
of the Option, each Option shall vest and become exercisable, cumulatively,
as
to one-fourth of the Stock originally subject to the Option at the first
anniversary of the Vesting Commencement Date and as to one forty-eighth of
the
Stock originally subject to the Option at the end of each successive month
thereafter until all of the Stock subject to the Option have vested, subject
to
Section 6.3. In the case of an Option not otherwise immediately exercisable
in
full, the Committee may Accelerate such Option in whole or in part at any
time;
provided,
however,
that in
the case of an Incentive Option, any such Acceleration of the Option would
not
cause the Option to fail to comply with the provisions of Section 422
of
the Code or the Optionee consents to the Acceleration.
-8-
(e) Method
of Exercise.
An
Option may be exercised by the Optionee giving written notice, in the manner
provided in Section 15, specifying the number of shares of Stock with
respect to which the Option is then being exercised. The notice shall be
accompanied by payment in the form of cash or check payable to the order
of the
Company in an amount equal to the exercise price of the Stock to be purchased
or, if the Committee had so authorized on the grant of an Incentive Option
or on
or after grant of a Nonstatutory Option (and subject to such conditions,
if any,
as the Committee may deem necessary to avoid adverse accounting effects to
the
Company) by delivery to the Company of
(i) Stock
having a Market Value equal to the exercise price of the Stock to be purchased
upon exercise of such Option, or
(ii) unless
or
to the extent not prohibited by applicable law, the Optionee’s executed
promissory note in the principal amount equal to the exercise price of the
shares to be purchased and otherwise in such form as the Committee shall
have
approved.
If
the
Stock is traded on an established market, payment of any exercise price may
also
be made through and under the terms and conditions of any formal cashless
exercise program authorized by the Company entailing the sale of the Stock
subject to an Option in a brokered transaction (other than to the Company).
Receipt by the Company of such notice and payment in any authorized or
combination of authorized means shall constitute the exercise of the Option.
Within 30 days thereafter but subject to the remaining provisions of the
Plan,
the Company shall deliver or cause to be delivered to the Optionee or his
agent
a certificate or certificates for the number of shares of Stock then being
purchased. Such shares of Stock shall be fully paid and nonassessable.
(f) Limit
on Incentive Option Characterization.
An
Incentive Option shall be considered to be an Incentive Option only to the
extent that the number of shares of Stock for which the Option first becomes
exercisable in a calendar year do not have an aggregate Market Value (as
of the
date of the grant of the Option) in excess of the “current
limit.”
The
current limit for any Optionee for any calendar year shall be $100,000
minus
the
aggregate Market Value at the date of grant of the number of shares of Stock
available for purchase for the first time in the same year under each other
Incentive Option previously granted to the Optionee under the Plan, and under
each other incentive stock option previously granted to the Optionee under
any
other incentive stock option plan of the Company and Affiliates. Any Stock
which
would cause the foregoing limit to be violated shall be deemed to have been
granted under a separate Nonstatutory Option, otherwise identical in its
terms
to those of the Incentive Option.
(g) Notification
of Disposition.
Each
person exercising any Incentive Option granted under the Plan shall be deemed
to
have covenanted with the Company to report to the Company any disposition
of
such shares prior to the expiration of the holding periods specified by
Section 422(a)(1) of the Code and, if and to the extent that the
realization of income in such a disposition imposes upon the Company federal,
state, local or other withholding tax requirements, or any such withholding
is
required to secure for the Company an otherwise available tax deduction,
to
remit to the Company an amount in cash sufficient to satisfy those
requirements.
-9-
(h) Automatic
Option Grants.
The
provisions set forth in this Section 7.1(h) shall not be amended more than
once
every six months other than to comport with changes in the Code, the Employee
Retirement Income Security Act of 1974, as amended, or the rules promulgated
thereunder. All grants of Options to non-employee directors under the Plan
shall
be automatic and nondiscretionary and shall be made strictly in accordance
with
the following provisions:
(i) No
person
shall have any discretion to select which non-employee directors shall be
granted Options.
(ii) Each
non-employee director shall be automatically granted a Nonstatutory Option
(an
“Automatic
Director Option”)
to
purchase 50,000 shares of Stock at the first meeting of the Board following
the
annual meeting of stockholders in each year, commencing with the 2005 annual
meeting of stockholders, provided that such director is not an employee and
if,
as of such date, such non-employee director shall have served on the Board
for
at least the preceding six months.
(iii) The
terms
of an Automatic Director Option granted hereunder shall be as
follows:
(A) the
term
of the Automatic Director Option shall be 10 years;
(B) the
exercise price per share shall be 105% of the Market Value per share on the
date
of grant of the Automatic Director Option. In the event that the date of
grant
of the Automatic Director Option is not a trading day, the exercise price
per
share shall be 105% of the Market Value on the next trading day immediately
following the date of grant of the Automatic Director Option;
(C) subject
to Section 9, the Automatic Director Option shall become exercisable as to
1/12th of the shares subject to the Automatic Director Option at the end
of each
calendar month after its date of grant, provided that the Optionee was in
Continuous Service on such dates;
(D) except
as
the terms of this Section 7.1(h) otherwise provide, the terms and conditions
of
the Plan shall apply to Automatic Director Options.
(iv) In
the
event that any Automatic Director Option granted under the Plan would cause
the
number of shares subject to outstanding Options plus the number of shares
previously purchased under Options to exceed the total number of authorized
shares then available under the Plan, the remaining shares available for
Option
grant shall be granted under Options to the non-employee directors on a pro
rata
basis. No further grants shall be made until such time, if any, as additional
shares become available for grant under the Plan through action of the Board
or
the stockholders to increase the number of shares which may be issued under
the
Plan or through cancellation or expiration of Awards previously granted
hereunder.
-10-
7.2 Stock
Appreciation Rights.
(a) Tandem
or Stand-Alone.
Stock
Appreciation Rights may be granted in tandem with an Option (at or, in the
case
of a Nonstatutory Option, after, the award of the Option), or alone and
unrelated to an Option. Stock Appreciation Rights in tandem with an Option
shall
terminate to the extent that the related Option is exercised, and the related
Option shall terminate to the extent that the tandem Stock Appreciation Rights
are exercised.
(b) Exercise
Price.
Stock
Appreciation Rights shall have such exercise price as the Committee may
determine, except that in the case of Stock Appreciation Rights in tandem
with
Options, the exercise price of the Stock Appreciation Rights shall equal
the
exercise price of the related Option.
(c) Other
Terms.
Except
as the Committee may deem inadvisable or inapplicable in the circumstances,
Stock Appreciation Rights shall be subject to terms and conditions substantially
similar to those applicable to a Nonstatutory Option. In addition, a Stock
Appreciation Right related to an Option which can only be exercised during
limited periods following a Change of Control may entitle the Participant
to
receive an amount based upon the highest price paid or offered for Stock
in any
transaction relating to the Change of Control or paid during the 30-day period
immediately preceding the occurrence of the Change of Control in any transaction
reported in the stock market in which the Stock is normally traded.
7.3 Restricted
Stock.
(a) Purchase
Price.
Shares
of Restricted Stock shall be issued under the Plan for such consideration,
in
cash, other property or services, or any combination thereof, as is determined
by the Committee.
(b) Issuance
of Certificates.
Each
Participant receiving a Restricted Stock Award, subject to Section 7.3(c),
shall
be issued a stock certificate in respect of such Restricted Stock. Such
certificate shall be registered in the name of such Participant, and, if
applicable, shall bear an appropriate legend referring to the terms, conditions,
and restrictions applicable to such Award substantially in the following
form:
THE
TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS OF THE 2005 EQUITY INCENTIVE
PLAN OF THE ISSUER AND AN AWARD AGREEMENT ENTERED INTO BY THE REGISTERED
OWNER
AND THE ISSUER. COPIES OF SUCH PLAN AND AGREEMENT ARE ON FILE IN THE OFFICES
OF
THE ISSUER.
(c) Escrow
of Shares.
The
Committee may require that the stock certificates evidencing Restricted Stock
be
held in custody by a designated escrow agent (which may but need not be the
Company) until the restrictions thereon shall have lapsed, and that the
Participant deliver a stock power, endorsed in blank, relating to the Stock
covered by such Award.
-11-
(d) Restrictions
and Restriction Period.
During
the Restriction Period applicable to Restricted Stock, such shares shall
be
subject to limitations on transferability and a Risk of Forfeiture arising
on
the basis of such conditions related to the performance of services, Company
or
Affiliate performance or otherwise as the Committee may determine and provide
for in the applicable Award Agreement. Any such Risk of Forfeiture may be
waived
or terminated, or the Restriction Period shortened, at any time by the Committee
on such basis as it deems appropriate.
(e) Rights
Pending Lapse of Risk of Forfeiture or Forfeiture of Award.
Except
as otherwise provided in the Plan or the applicable Award Agreement, at all
times prior to lapse of any Risk of Forfeiture applicable to, or forfeiture
of,
an Award of Restricted Stock, the Participant shall have all of the rights
of a
stockholder of the Company, including the right to vote, and the right to
receive any dividends with respect to, the Restricted Stock. The Committee,
as
determined at the time of Award, may permit or require the payment of cash
dividends to be deferred and, if the Committee so determines, reinvested
in
additional Restricted Stock to the extent shares are available under
Section 4.
(f) Lapse
of Restrictions.
If and
when the Restriction Period expires without a prior forfeiture of the Restricted
Stock, the certificates for such shares shall be delivered to the Participant
promptly if not theretofore so delivered.
7.4 Restricted
Stock Units.
(a) Character.
Each
Restricted Stock Unit shall entitle the recipient to a share of Stock at
a close
of such Restriction Period as the Committee may establish and subject to
a Risk
of Forfeiture arising on the basis of such conditions relating to the
performance of services, Company or Affiliate performance or otherwise as
the
Committee may determine and provide for in the applicable Award Agreement.
Any
such Risk of Forfeiture may be waived or terminated, or the Restriction Period
shortened, at any time by the Committee on such basis as it deems
appropriate.
(b) Form
and Timing of Payment.
Payment
of earned Restricted Stock Units shall be made in a single lump sum following
the close of the applicable Restriction Period. At the discretion of the
Committee, Participants may be entitled to receive payments equivalent to
any
dividends declared with respect to Stock referenced in grants of Restricted
Stock Units but only following the close of the applicable Restriction Period
and then only if the underlying Stock shall have been earned. Unless the
Committee shall provide otherwise, any such dividend equivalents shall be
paid,
if at all, without interest or other earnings.
7.5 Performance
Units.
(a) Character.
Each
Performance Unit shall entitle the recipient to the value of a specified
number
of shares of Stock, over the initial value for such number of shares, if
any,
established by the Committee at the time of grant, at the close of a specified
Performance Period to the extent specified Performance Goals shall have been
achieved.
(b) Earning
of Performance Units.
The
Committee shall set Performance Goals in its discretion which, depending
on the
extent to which they are met within the applicable Performance Period, will
determine the number and value of Performance Units that will be paid out
to the
Participant. After the applicable Performance Period has ended, the holder
of
Performance Units shall be entitled to receive payout on the number and value
of
Performance Units earned by the Participant over the Performance Period,
to be
determined as a function of the extent to which the corresponding Performance
Goals have been achieved.
-12-
(c) Form
and Timing of Payment.
Payment
of earned Performance Units shall be made in a single lump sum following
the
close of the applicable Performance Period. At the discretion of the Committee,
Participants may be entitled to receive any dividends declared with respect
to
Stock which have been earned in connection with grants of Performance Units
which have been earned, but not yet distributed to Participants. The Committee
may permit or, if it so provides at grant require, a Participant to defer
such
Participant’s receipt of the payment of cash or the delivery of Stock that would
otherwise be due to such Participant by virtue of the satisfaction of any
requirements or goals with respect to Performance Units. If any such deferral
election is required or permitted, the Committee shall establish rules and
procedures for such payment deferrals.
7.6 Stock
Grants.
Stock
Grants shall be awarded solely in recognition of significant contributions
to
the success of the Company or Affiliates, in lieu of compensation otherwise
already due and in such other limited circumstances as the Committee deems
appropriate. Stock Grants shall be made without forfeiture conditions of
any
kind.
7.7 Qualified
Performance-Based Awards.
(a) Purpose.
The
purpose of this Section 7.7 is to provide the Committee the ability to qualify
Awards as “performance-based compensation” under Section 162(m) of the Code. If
the Committee, in its discretion, decides to grant an Award as a Qualified
Performance-Based Award, the provisions of this Section 7.7 will control
over
any contrary provision contained in the Plan. In the course of granting any
Award, the Committee may specifically designate the Award as intended to
qualify
as a Qualified Performance-Based Award. However, no Award shall be considered
to
have failed to qualify as a Qualified Performance-Based Award solely because
the
Award is not expressly designated as a Qualified Performance-Based Award,
if the
Award otherwise satisfies the provisions of this Section 7.7 and the
requirements of Section 162(m) of the Code and the regulations promulgated
thereunder applicable to “performance-based compensation.”
(b) Authority.
All
grants of Awards intended to qualify as Qualified Performance-Based Awards
and
determination of terms applicable thereto shall be made by the Committee
or, if
not all of the members thereof qualify as “Outside
Directors”
within
the meaning of applicable IRS regulations under Section 162 of the
Code, a
subcommittee of the Committee consisting of such of the members of the Committee
as do so qualify. Any action by such a subcommittee shall be considered the
action of the Committee for purposes of the Plan.
(c) Applicability.
This
Section 7.7 will apply only to those Covered Employees, or to those
persons
who the Committee determines are reasonably likely to become Covered Employees
in the period covered by an Award, selected by the Committee to receive
Qualified Performance-Based Awards. The Committee may, in its discretion,
grant
Awards to Covered Employees that do not satisfy the requirements of this
Section 7.7.
-13-
(d) Discretion
of Committee with Respect to Qualified Performance-Based Awards.
Options
may be granted as Qualified Performance-Based Awards in accordance with Section
7.1, except that the exercise price of any Option intended to qualify as
a
Qualified Performance-Based Award shall in no event be less that the Market
Value of the Stock on the date of grant. With regard to other Awards intended
to
qualify as Qualified Performance-Based Awards, such as Restricted Stock,
Restricted Stock Units, or Performance Units, the Committee will have full
discretion to select the length of any applicable Restriction Period or
Performance Period, the kind or level of the applicable Performance Goal,
and
whether the Performance Goal is to apply to the Company, a Subsidiary or
any
division or business unit or to the individual. Any Performance Goal or Goals
applicable to Qualified Performance-Based Awards shall be objective, shall
be
established not later than 90 days after the beginning of any applicable
Performance Period (or at such other date as may be required or permitted
for
“performance-based compensation” under Section 162(m) of the Code) and shall
otherwise meet the requirements of Section 162(m) of the Code, including
the requirement that the outcome of the Performance Goal or Goals be
substantially uncertain (as defined in the regulations under Section 162(m)
of the Code) at the time established.
(e) Payment
of Qualified Performance-Based Awards.
A
Participant will be eligible to receive payment under a Qualified
Performance-Based Award which is subject to achievement of a Performance
Goal or
Goals only if the applicable Performance Goal or Goals period are achieved
within the applicable Performance Period, as determined by the Committee.
In
determining the actual size of an individual Qualified Performance-Based
Award,
the Committee may reduce or eliminate the amount of the Qualified
Performance-Based Award earned for the Performance Period, if in its sole
and
absolute discretion, such reduction or elimination is appropriate.
(f) Maximum
Award Payable.
The
maximum Qualified Performance-Based Award payment to any one Participant
under
the Plan for a Performance Period is the number of shares of Stock set forth
in
Section 4, or if the Qualified Performance-Based Award is paid in cash, that
number of shares multiplied by the Market Value of the Stock as of the date
the
Qualified Performance-Based Award is granted.
(g) Limitation
on Adjustments for Certain Events.
No
adjustment of any Qualified Performance-Based Award pursuant to Section 8
shall
be made except on such basis, if any, as will not cause such Award to provide
other than “performance-based compensation” within the meaning of Section 162(m)
of the Code.
7.8 Awards
to Participants Outside the United States.
The
Committee may modify the terms of any Award under the Plan, granted to a
Participant who is, at the time of grant or during the term of the Award,
resident or primarily employed outside of the United States in any manner
deemed
by the Committee to be necessary or appropriate in order that the Award shall
conform to laws, regulations, and customs of the country in which the
Participant is then resident or primarily employed, or so that the value
and
other benefits of the Award to the Participant, as affected by foreign tax
laws
and other restrictions applicable as a result of the Participant’s residence or
employment abroad, shall be comparable to the value of such an Award to a
Participant who is resident or primarily employed in the United States. The
Committee may establish supplements to, or amendments, restatements, or
alternative versions of, the Plan for the purpose of granting and administrating
any such modified Award. No such modification, supplement, amendment,
restatement or alternative version may increase the share limit of
Section 4.
-14-
7.9 Notwithstanding
any other provisions of the Plan, it is not intended that any grant of an
Award
shall result in the deferral of compensation within the meaning of Section
409A
of the Code; provided,
however,
that to
the extent the grant of an Award would result in the deferral of compensation
under Section 409A of the Code, such Award shall comply with the requirements
of
Section 409A of the Code. .
8. Adjustment
Provisions.
8.1 Adjustment
for Corporate Actions.
All of
the share numbers set forth in the Plan reflect the capital structure of
the
Company as of the Effective Date. Subject to Section 8.2, if subsequent to
that
date the outstanding number of shares of Stock (or any other securities covered
by the Plan by reason of the prior application of this Section) are increased,
decreased, or exchanged for a different number or kind of shares or other
securities, or if additional shares or new or different shares or other
securities are distributed with respect to such outstanding Stock, through
merger, consolidation, sale of all or substantially all the property of the
Company, reorganization, recapitalization, reclassification, stock dividend,
stock split, reverse stock split, or other similar distribution with respect
to
such Stock, an appropriate and proportionate adjustment will be made in
(i) the maximum numbers and kinds of shares provided in Section 4,
(ii) the numbers and kinds of shares or other securities subject to
the
then outstanding Awards, (iii) the exercise price for each share or
other
unit of any other securities subject to then outstanding Options and Stock
Appreciation Rights (without change in the aggregate purchase price as to
which
such Options or Rights remain exercisable), and (iv) the repurchase
price
of each share of Restricted Stock then subject to a Risk of Forfeiture in
the
form of a Company repurchase right.
8.2 Treatment
in Certain Acquisitions.
(a) Subject
to any provisions of then outstanding Awards granting different rights to
the
holders thereof, in the event of an Acquisition constituting a Change of
Control
in which outstanding Awards are not Accelerated in full, any then
outstanding Awards shall nevertheless Accelerate in full if not assumed or
replaced by comparable Awards referencing shares of the capital stock of
the
successor or acquiring entity or the entity in control of such successor
or
acquiring entity, and thereafter (or after a reasonable period following
such
Acquisition, as determined by the Committee) terminate. As to any one or
more
outstanding Awards which are not otherwise Accelerated in full by reason
of such
Acquisition, the Committee may also, either in advance of such Acquisition
or at
the time thereof and upon such terms as it may deem appropriate, provide
for the
Acceleration of such outstanding Awards in the event that the employment
of the
Participants should subsequently terminate following such Acquisition. Each
outstanding Award that is assumed in connection with such Acquisition, or
is
otherwise to continue in effect subsequent to such Acquisition, will be
appropriately adjusted, immediately after such Acquisition, as to the number
and
class of securities and other relevant terms in accordance with Section 8.1.
-15-
(b) For
the
purposes of this Section 8.2, an Award shall be considered assumed or replaced
by a comparable Award if, following the Acquisition constituting a Change
of
Control, the Award confers the right to purchase, for each share of Stock
subject to the Award immediately prior to such Acquisition, the consideration
(whether stock, cash or other securities or property) received in such
Acquisition by holders of Stock on the effective date of such Acquisition
(and
if holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding Stock); provided,
however,
that if
such consideration received in such Acquisition was not solely common stock
of
the successor corporation or its Parent or Subsidiary, the Committee may,
with
the consent of the successor corporation, provide for the consideration to
be
received upon the exercise of the Award for each share of Stock subject to
the
Award to be solely common stock of the successor corporation or its Parent
or
Subsidiary equal in fair market value to the per share consideration received
by
holders of Stock in such Acquisition.
8.3 Dissolution
or Liquidation.
Upon
dissolution or liquidation of the Company, other than as part of an Acquisition
or similar transaction, (a) each outstanding Option and Stock Appreciation
Right
shall terminate, but the Optionee or Stock Appreciation Right holder shall
have
the right, immediately prior to such dissolution or liquidation, to exercise
the
Option or Stock Appreciation Right to the extent exercisable on the date
of
dissolution or liquidation; (b) each share of Restricted Stock that is subject
to a Risk of Forfeiture immediately prior to such dissolution or liquidation
may, at the election of the Company, be forfeited by the Company prior to
such
dissolution or liquidation pursuant to the terms of the applicable Award
Agreement; and (c) subject to subparts (a) and (b) of this Section 8.3, each
other outstanding Award shall be forfeited.
8.4 Adjustment
of Awards Upon the Occurrence of Certain Unusual or Nonrecurring
Events.
In the
event of any corporate action not specifically covered by the preceding
sections, including but not limited to an extraordinary cash distribution
on
Stock, a corporate separation or other reorganization or liquidation, the
Committee may make such adjustment of outstanding Awards and their terms,
if
any, as it, in its sole discretion, may deem equitable and appropriate in
the
circumstances. The Committee may make adjustments in the terms and conditions
of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, the events described
in this
Section 8.4) affecting the Company or the financial statements of
the
Company or of changes in applicable laws, regulations, or accounting principles,
whenever the Committee determines that such adjustments are appropriate in
order
to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan.
8.5 Related
Matters.
Any
adjustment in Awards made pursuant to this Section 8 shall be determined
and made, if at all, by the Committee and shall include any correlative
modification of terms, including of Option exercise prices, rates of vesting
or
exercisability, Risks of Forfeiture, applicable repurchase prices for Restricted
Stock, and Performance Goals and other financial objectives which the Committee
may deem necessary or appropriate so as to ensure the rights of the Participants
in their respective Awards are not substantially diminished nor enlarged
as a
result of the adjustment and corporate action other than as expressly
contemplated in this Section 8. No fraction of a share shall be purchasable
or
deliverable upon exercise, but in the event any adjustment hereunder of the
number of shares covered by an Award shall cause such number to include a
fraction of a share, such number of shares shall be adjusted to the nearest
smaller whole number of shares. No adjustment of an Option exercise price
per
share pursuant to this Section 8 shall result in an exercise price which
is less
than the par value of the Stock.
-16-
9. Settlement
of Awards
9.1 In
General.
Options
and Restricted Stock shall be settled in accordance with their terms. All
other
Awards may be settled in cash, Stock, or other Awards, or a combination thereof,
as determined by the Committee at or after grant and subject to any contrary
Award Agreement. The Committee may not require settlement of any Award in
Stock
pursuant to the immediately preceding sentence to the extent issuance of
such
Stock would be prohibited or unreasonably delayed by reason of any other
provision of the Plan.
9.2 Violation
of Law.
Notwithstanding any other provision of the Plan or the relevant Award Agreement,
if, at any time, in the reasonable opinion of the Company, the issuance of
Stock
covered by an Award may constitute a violation of law, then the Company may
delay such issuance and the delivery of a certificate for such shares until
(i) approval shall have been obtained from such governmental agencies,
other than the SEC, as may be required under any applicable law, rule, or
regulation and (ii) in the case where such issuance would constitute
a
violation of a law administered by or a regulation of the SEC, one of the
following conditions shall have been satisfied:
(a) the
shares are at the time of the issue of such shares effectively registered
under
the Securities Act; or
(b) the
Company shall have determined, on such basis as it deems appropriate (including
an opinion of counsel in form and substance satisfactory to the Company)
that
the sale, transfer, assignment, pledge, encumbrance or other disposition
of such
shares or such beneficial interest, as the case may be, does not require
registration under the Securities Act or any applicable State securities
laws.
The
Company shall make all reasonable efforts to bring about the occurrence of
said
events.
9.3 Corporate
Restrictions on Rights in Stock.
Any
Stock to be issued pursuant to Awards granted under the Plan shall be subject
to
all restrictions upon the transfer thereof which may be now or hereafter
imposed
by the charter, certificate or articles, or bylaws, of the Company.
9.4 Investment
Representations.
The
Company shall be under no obligation to issue any shares covered by any Award
unless the shares to be issued pursuant to Awards granted under the Plan
have
been effectively registered under the Securities Act, or the Participant
shall
have made such written representations to the Company (upon which the Company
believes it may reasonably rely) as the Company may deem necessary or
appropriate for purposes of confirming that the issuance of such shares will
be
exempt from the registration requirements of the Securities Act and any
applicable state securities laws and otherwise in compliance with all applicable
laws, rules and regulations, including but not limited to that the Participant
is acquiring the shares for such Participant’s own account for the purpose of
investment and not with a view to, or for sale in connection with, the
distribution of any such shares.
-17-
9.5 Registration.
If the
Company shall deem it necessary or desirable to register under the Securities
Act or other applicable statutes any Stock issued or to be issued pursuant
to
Awards granted under the Plan, or to qualify any such Stock for exemption
from
the Securities Act or other applicable statutes, then the Company shall take
such action at its own expense. The Company may require from each recipient
of
an Award, or each holder of Stock acquired pursuant to the Plan, such
information in writing for use in any registration statement, prospectus,
preliminary prospectus or offering circular as is reasonably necessary for
that
purpose and may require reasonable indemnity to the Company and its officers
and
directors from that holder against all losses, claims, damage and liabilities
arising from use of the information so furnished and caused by any untrue
statement of any material fact therein or caused by the omission to state
a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which they
were
made. In addition, the Company may require of any such person that such person
agree that, without the prior written consent of the Company or the managing
underwriter in any public offering of Stock, such person will not sell, make
any
short sale of, loan, grant any option for the purchase of, pledge or otherwise
encumber, or otherwise dispose of, any Stock during the 180-day period
commencing on the effective date of the registration statement relating to
the
underwritten public offering of securities. Without limiting the generality
of
the foregoing provisions of this Section 9.5, if in connection with any
underwritten public offering of securities of the Company the managing
underwriter of such offering requires that the Company’s directors
and officers enter into a lock-up agreement containing provisions that are
more
restrictive than the provisions set forth in the preceding sentence, then
(a)
each holder of Stock acquired pursuant to the Plan (regardless of whether
such
person has complied or complies with the provisions of clause (b) below)
shall
be bound by, and shall be deemed to have agreed to, the same lock-up terms
as
those to which the Company’s directors and officers are required to adhere; and
(b) at the request of the Company or such managing underwriter, each such
person
shall execute and deliver a lock-up agreement in form and substance equivalent
to that which is required to be executed by the Company’s directors and
officers.
9.6 Placement
of Legends; Stop Orders; etc.
Each
share of Stock to be issued pursuant to Awards granted under the Plan may
bear a
reference to the investment representation made in accordance with
Section 9.4 in addition to any other applicable restriction under
the Plan,
the terms of the Award and, if applicable, to the fact that no registration
statement has been filed with the SEC in respect to such Stock. All certificates
for Stock or other securities delivered under the Plan shall be subject to
such
stock transfer orders and other restrictions as the Committee may deem advisable
under the rules, regulations, and other requirements of any stock exchange
upon
which the Stock is then listed, and any applicable federal or state securities
law, and the Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
-18-
9.7 Tax
Withholding.
Whenever Stock are issued or to be issued pursuant to Awards granted under
the
Plan, the Company shall have the right to require the recipient to remit
to the
Company an amount sufficient to satisfy federal, state, local or other
withholding tax requirements if, when, and to the extent required by law
(whether so required to secure for the Company an otherwise available tax
deduction or otherwise) prior to the delivery of any certificate or certificates
for such shares. The obligations of the Company under the Plan shall be
conditional on satisfaction of all such withholding obligations and the Company
shall, to the extent permitted by law, have the right to deduct any such
taxes
from any payment of any kind otherwise due to the recipient of an Award.
However, in such cases Participants may elect, subject to the approval of
the
Committee, to satisfy an applicable withholding requirement, in whole or
in
part, by having the Company withhold shares to satisfy their tax obligations.
Participants may only elect to have shares withheld having a Market Value
on the
date the tax is to be determined equal to the minimum statutory total tax
which
could be imposed on the transaction. All elections shall be irrevocable,
made in
writing, signed by the Participant, and shall be subject to any restrictions
or
limitations that the Committee deems appropriate.
10. Reservation
of Stock.
The
Company shall at all times during the term of the Plan and any outstanding
Awards granted hereunder reserve or otherwise keep available such number
of
shares of Stock as will be sufficient to satisfy the requirements of the
Plan
(if then in effect) and the Awards and shall pay all fees and expenses
necessarily incurred by the Company in connection therewith.
11. Limitation
of Rights in Stock; No Special Service Rights.
Subject
to Section 7.3(e), a Participant shall not be deemed for any purpose to be
a
stockholder of the Company with respect to any of the Stock subject to an
Award,
unless and until a certificate shall have been issued therefor and delivered
to
the Participant or his/her agent. Any Stock to be issued pursuant to Awards
granted under the Plan shall be subject to all restrictions upon the transfer
thereof which may be now or hereafter imposed by the certificate of
incorporation and the bylaws of the Company. Nothing contained in the Plan
or in
any Award Agreement shall confer upon any recipient of an Award any right
with
respect to the continuation of such recipient’s employment or other association
with the Company (or any Affiliate), or interfere in any way with the right
of
the Company (or any Affiliate), subject to the terms of any separate employment
or consulting agreement or provision of law or certificate of incorporation
or
bylaws to the contrary, at any time to terminate such employment or consulting
agreement or to increase or decrease, or otherwise adjust, the other terms
and
conditions of the recipient’s employment or other association with the Company
and Affiliates.
12. Unfunded
Status of the Plan.
The
Plan
is intended to constitute an “unfunded” plan for incentive compensation, and the
Plan is not intended to constitute a plan subject to the provisions of the
Employee Retirement Income Security Act of 1974, as amended. With respect
to any
payments not yet made to a Participant by the Company, nothing contained
in this
Plan shall give any such Participant any rights that are greater than those
of a
general creditor of the Company. In its sole discretion, the Committee may
authorize the creation of trusts or other arrangements to meet the obligations
created under the Plan to deliver Stock or payments with respect to Options,
Stock Appreciation Rights and other Awards hereunder, provided,
however,
that
the existence of such trusts or other arrangements is consistent with the
unfunded status of the Plan.
13. Nonexclusivity
of the Plan.
Neither
the adoption of the Plan by the Board nor the submission of the Plan to the
stockholders of the Company shall be construed as creating any limitations
on
the power of the Board to adopt such other incentive arrangements as it may
deem
desirable, including without limitation, the granting of stock options and
restricted stock other than under the Plan, and such arrangements may be
either
applicable generally or only in specific cases.
-19-
14. Termination
and Amendment of the Plan.
14.1 The
Board
may at any time terminate the Plan or make such modifications of the Plan
as it
shall deem advisable. Unless the Board otherwise expressly provides, no
amendment of the Plan shall affect the terms of any Award outstanding on
the
date of such amendment unless such amendment is necessary to comply with
Section
409A of the Code. In any case, no termination or amendment of the Plan may,
without the consent of any recipient of an Award granted hereunder, adversely
affect the rights of the recipient under such Award.
14.2 The
Committee may amend the terms of any Award theretofore granted, prospectively
or
retroactively, provided that the Award as amended is consistent with the
terms
of the Plan, but no such amendment shall impair the rights of the recipient
of
such Award without such recipient’s consent unless the impairment of such rights
is necessary to comply with Section 409A of the Code.
15. Notices
and Other Communications.
Any
notice, demand, request or other communication hereunder to any party shall
be
deemed to be sufficient if contained in a written instrument delivered in
person
or duly sent by first class registered, certified or overnight mail, postage
prepaid, or telecopied with a confirmation copy by regular, certified or
overnight mail, addressed or telecopied, as the case may be, (i) if
to the
recipient of an Award, at such recipient’s residence address last filed with the
Company and (ii) if to the Company, at its principal place of business,
addressed to the attention of its Chief Financial Officer, or to such other
address or telecopier number or electronic mail address, as the case may
be, as
the addressee may have designated by notice to the addressor. All such notices,
requests, demands and other communications shall be deemed to have been
received: (i) in the case of personal delivery, on the date of such
delivery; (ii) in the case of mailing, when received by the addressee;
(iii) in the case of facsimile transmission, when confirmed by facsimile
machine report; and (iv) in the case of electronic mail, when directed
to
an electronic mail address at which the receiving party has consented to
receive
notice, provided,
that
such consent is deemed revoked if the sender is unable to deliver by electronic
transmission two consecutive notices and such inability becomes known to
the
secretary or assistant secretary of the Company or to the transfer agent,
or
other person responsible for giving notice.
16. Governing
Law.
The
Plan
and all Award Agreements and actions taken thereunder shall be governed,
interpreted and enforced in accordance with the laws of the State of California,
without regard to the conflict of laws principles thereof.
-20-
Exhibit
10.2
Stock
Option Agreement
ADVENTRX
Pharmaceuticals, Inc., a Delaware corporation (the “Company”),
and
the undersigned person (“Optionee”)
have
entered into this Stock Option Agreement (this “Agreement”)
effective as of the Grant Date set forth below. The Company has granted to
Optionee the option (the “Option”)
to
purchase the number of shares (the “Shares”)
of
common stock, par value $0.001 per share, of the Company (“Common
Stock”)
set
forth below at the per Share purchase price (the “Exercise
Price”)
set
forth below, pursuant to the terms of this Agreement. The Option was granted
under the Company’s 2005
Equity Incentive Plan (the “Plan”).
Optionee
Name:
|
_____________________
|
Grant
Date:
|
MM/DD/YYYY
|
Vesting
Commencement Date:
|
MM/DD/YYYY
|
Shares:
|
X,XXX
|
Exercise
Price:
|
$X.XX
|
1. Terms
of Plan.
All
capitalized terms used in this Agreement and not otherwise defined shall
have
the meanings ascribed thereto in the Plan. Optionee confirms and acknowledges
that Optionee has received and reviewed copies of the Plan and the Information
Statement, dated _____________, with respect to the Plan. Optionee and the
Company agree that the terms and conditions of the Plan are incorporated
in this
Agreement by this reference.
2. Nature
of the Option.
The
Option has been granted as an incentive to Optionee’s Continuous Service, and is
in all respects subject to such Continuous Service and all other terms and
conditions of this Agreement. The Option is intended to be an
[Incentive/Nonstatutory] Option within the meaning of the Plan.
3. Vesting
and Exercise of Option.
The
Option shall vest and become exercisable during its term in accordance with
the
following provisions:
(a) Vesting
and Right of Exercise.
(i) The
Option shall vest and become exercisable with respect to one-fourth of the
Shares at the first anniversary of the Vesting Commencement Date set forth
in
the preamble of this Agreement and as to one forty-eighth of the Shares at
the
end of each successive month thereafter until all of the Shares have vested,
subject to Optionee’s Continuous Service.
(ii) In
the
event of Optionee’s death, disability or other termination of Optionee’s
Continuous Service, the Option shall be exercisable in the manner and to
the
extent provided in Section 6.3 of the Plan.
(iii) No
fraction of a Share shall be purchasable or deliverable upon exercise of
the
Option, but in the event any adjustment hereunder of the number of Shares
shall
cause such number to include a fraction of a Share, such number of Shares
shall
be rounded down to the nearest smaller whole number of Shares.
(b) Method
of Exercise.
In order
to exercise any portion of the Option which has vested, Optionee shall notify
the Company in writing of the election to exercise such vested portion of
the
Option and the number of Shares in respect of which the Option is being
exercised, by executing and delivering the Notice of Exercise of Stock Option
in
the form attached hereto as Exhibit
A
(the
“Exercise
Notice”).
The
certificate or certificates representing Shares as to which the Option has
been
exercised shall be registered in the name of Optionee.
(c) Restrictions
on Exercise.
(i) Optionee
may exercise the Option only with respect to Shares that have vested in
accordance with Section 3(a) of this Agreement.
(ii) Optionee
may not exercise the Option if the issuance of the Shares upon such exercise
or
the method of payment of consideration for such Shares would constitute a
violation of any applicable federal or state securities law or other law
or
regulation.
(iii) The
method and manner of payment of the Exercise Price will be subject to the
rules
under Part 221 of Title 12 of the Code of Federal Regulations as promulgated
by
the Federal Reserve Board if such rules apply to the Company at the date
of
exercise.
(iv) As
a
condition to the exercise of the Option, the Company may require Optionee
to
make any representation or warranty to the Company at the time of exercise
of
the Option as in the opinion of legal counsel for the Company may be required
by
any applicable law or regulation, including the execution and delivery of
an
appropriate representation statement. Accordingly, the stock certificate(s)
for
the Shares issued upon exercise of the Option may bear appropriate legends
restricting transfer.
(v) Optionee
may only exercise the Option upon, and the obligations of the Company under
this
Agreement to issue Shares to Optionee upon any exercise of the Option is
conditioned on, satisfaction of all federal, state, local or other withholding
tax obligations associated with such exercise (whether so required to secure
for
the Company an otherwise available tax deduction or otherwise) (“Withholding
Obligations”).
The
Company reserves the right to require Optionee to remit to the Company an
amount
sufficient to satisfy all Withholding Obligations prior to the issuance of
any
Shares upon any exercise of the Option. Optionee authorizes the Company to
withhold in accordance with applicable law from any compensation payable
to
Optionee any amounts necessary to meet any Withholding Obligations.
-2-
4. Non-Transferability
of Option.
The
Option may not be transferred in any manner other than by will or by the
laws of
descent and distribution. The terms of this Agreement shall bind the executors,
administrators, heirs and successors of Optionee.
5. Method
of Payment.
(a) Upon
exercise, Optionee shall pay the aggregate Exercise Price of the Shares
purchased by any of the following methods, or a combination thereof, at the
election of Optionee:
(i) by
cash;
(ii) by
certified or bank cashier’s check;
(iii) if
shares
of Common Stock are traded on an established stock market or exchange on
the
date of exercise, by surrender of whole shares of Common Stock having a Market
Value equal to the portion of the Exercise Price to be paid by such surrender,
provided
that if
such shares of Common Stock to be surrendered were acquired upon exercise
of an
Incentive Option, Optionee must have first satisfied the holding period
requirements under Section 422(a)(1) of the Code; or
(iv) if
shares
of Common Stock are traded on an established stock market or exchange on
the
date of exercise, pursuant to and under the terms and conditions of any formal
cashless exercise program authorized by the Company entailing the sale of
the
Stock subject to an Option in a brokered transaction (other than to the
Company).
(b) If
Optionee shall pay all or a portion of the aggregate Exercise Price due upon
an
exercise of the Option by surrendering shares of Common Stock pursuant to
Section 5(a)(iii), then Optionee:
(i) shall
accompany the Exercise Notice with a duly endorsed blank stock power with
respect to the number of shares of Common Stock to be surrendered and shall
deliver the certificate(s) representing such surrendered shares to the Company
at its principal offices within two business days after the date of the Exercise
Notice;
(ii) authorizes
and directs the Secretary of the Company to transfer so many of the shares
of
Common Stock represented by such certificate(s) as are necessary to pay the
aggregate Exercise Price in accordance with this Agreement;
-3-
(iii) agrees
that Optionee may not surrender any fractional share as payment of any portion
of the Exercise Price; and
(iv) agrees
that, notwithstanding any other provision in this Agreement, Optionee may
only
surrender shares of Common Stock owned by Optionee as of the date of the
Exercise Notice in the manner and within the time periods allowed under Rule
16b-3 promulgated under the Exchange Act.
6. Adjustments
to Option.
Subject
to any required action by the stockholders of the Company, the number of
Shares
covered by the Option, and the Exercise Price, shall be proportionately adjusted
in accordance with and pursuant to Section 8.1 of the Plan. Such adjustments
shall be made by the Committee, whose determination in that respect shall
be
final, binding and conclusive. Except as expressly provided in this Agreement,
no issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number of Shares or
the
Exercise Price.
7. Term
of Option.
The
Option may not be exercised more than 10 years after the Grant Date, and
may be
exercised during such term only in accordance with the terms of this
Agreement.
8. Not
Employment Contract.
Nothing
in this Agreement shall confer upon Optionee any right to continue in the
employ
of the Company or shall interfere with or restrict in any way the rights
of the
Company, which are hereby expressly reserved, to terminate Optionee’s Continuous
Service at any time for any reason whatsoever, with or without cause, subject
to
the provisions of applicable law.
9. Tax
Consequences Generally.
Optionee
acknowledges that Optionee may suffer adverse tax consequences as a result
of
Optionee’s exercise of the Option. Optionee acknowledges that the Company
advises that Optionee consult with Optionee’s tax advisers in connection with
any exercise of the Option or disposition of the Shares receivable upon exercise
of the Option. Optionee agrees that Optionee is not relying on the Company
for
any tax advice with respect to the acceptance or exercise of the Option,
the
disposition of any Shares Optionee may acquire upon exercise of the Option
or
otherwise. Any adverse consequences incurred by an Optionee with respect
to the
use of shares of Common Stock to pay any part of the aggregate Exercise Price
or
of any tax in connection with the exercise of an Option, including, without
limitation, any adverse tax consequences arising as a result of a disqualifying
disposition within the meaning of Section 422 of the Code shall be
the sole
responsibility of Optionee.
10. Adjustments
in Acquisitions. [APPLICABLE
PROVISION TO BE DESIGNATED BY COMPENSATION COMMITTEE AT TIME OF
GRANT]
-4-
[In
accordance with the provisions of Section 8.2(a) of the Plan, the Option
will
Accelerate in full in the event of an Acquisition constituting a Change of
Control if Optionee remains employed by the Company or one of its Affiliates
as
of the closing date of such Acquisition, and the Option is not assumed or
replaced by the successor or acquiring entity or the entity in control of
such
successor or acquiring entity in accordance with Section 8.2 (referred to
for
purposes of this section as the “Acquirer”).
Otherwise, the Option will not Accelerate in the event of an Acquisition.
In
this regard, if Optionee is offered employment or some other continuing role
by
or on behalf of the Acquirer, including but not limited to, continuing
employment with the Company, and in connection therewith, the Acquirer offers
to
assume or replace the Option, the Option will not Accelerate if Optionee
does
not accept the offer.] OR
[Notwithstanding the provision of Section 8.2(a) of the Plan, in the
event
of an Acquisition, the Option will not vest and become exercisable except
as
follows: [specify
alternative treatment]
[Subject
to the terms of any other written agreement between Optionee and the Company
related to Optionee’s Continuous Service and in accordance with Sections 8.1,
8.2, 8.4 and 8.5 of the Plan, the Committee may, if it so determines in the
exercise of its sole discretion, also make provision for proportionately
adjusting the number or class of securities covered by the Option, as well
as
the Exercise Price, in the event that the Company effects one or more
Acquisitions, corporate separations, reorganizations, liquidations or other
increases or reductions of shares of its outstanding Common Stock.]
OR
[If,
following a Change of Control in which the Option has been assumed by the
successor or acquiring entity as of the closing date of such Change of Control,
in the event of Optionee’s Involuntary Termination of employment within 24
months after the closing date of such Change of Control the vesting of the
assumed Option shall be accelerated such that the Option will so vest as
of the
effective date of such Involuntary Termination with respect to all Shares
that
would have become vested during such 24-month period but for the Change of
Control and Involuntary Termination (assuming Optionee’s Continuous Service). An
“Involuntary
Termination”
is one
that occurs by reason of dismissal for any reason other than Misconduct or
of
voluntary resignation following: (i) a change in position that materially
reduces the level of Optionee’s responsibility, (ii) a material reduction in
Optionee’s base salary, or (iii) relocation by more than 50 miles; provided that
(ii) and (iii) will apply only if Optionee has not consented to the change
or
relocation. “Misconduct”
shall
mean the commission of any act of fraud, embezzlement or dishonesty by Optionee,
any unauthorized use or disclosure by such person of confidential information
or
trade secrets of the Company (or any Parent or Subsidiary), or any other
intentional misconduct by such person adversely affecting the business affairs
of the Company (or any Parent or Subsidiary) in a material manner. The foregoing
definition shall not be deemed to be inclusive of all the acts or omissions
which the Company (or any Parent or Subsidiary) may consider as grounds for
the
dismissal or discharge of Optionee.]
11. Consent
of Spouse/Domestic Partner.
Optionee
agrees that Optionee’s spouse’s or domestic partner’s interest in the Option is
subject to this Agreement and such spouse or domestic partner is irrevocably
bound by the terms and conditions of this Agreement. Optionee agrees that
all
community property interests of Optionee and Optionee’s spouse or domestic
partner in the Option, if any, shall similarly be bound by this Agreement.
Optionee agrees that this Agreement is binding upon Optionee’s and Optionee’s
spouse’s or domestic partner’s executors, administrators, heirs and assigns.
Optionee represents and warrants to the Company that Optionee has the authority
to bind Optionee’s spouse/domestic partner with respect to the Option. Optionee
agrees to execute and deliver such documents as may be necessary to carry
out
the intent of this Section 11 and the consent of Optionee’s spouse/domestic
partner.
-5-
IN
WITNESS WHEREOF, Optionee and the Company have entered into this Agreement
as of
the Grant Date.
ADVENTRX Pharmaceuticals, Inc. | ||
[Optionee Name] | ||
By:
|
||
Name:
|
||
Title:
|
-6-
Exhibit
A
Notice
of Exercise of Stock Option
I
________________________________________ (please print legibly) hereby elect
to
exercise the stock options(s) identified below (the “Option(s)”)
granted to me by ADVENTRX
Pharmaceuticals, Inc.
(the
“Company”)
under
its 2005 Equity Incentive Plan (the “Plan”)
with
respect to the number of shares of Common Stock of the Company set forth
below
(the “Shares”).
I
represent that each Share is fully vested and exercisable and subject to
the
Option(s). I acknowledge and agree that my exercise of the Option(s) is subject
to the terms and conditions of the Plan and the Stock Option Agreement(s)
governing the Option(s).
1.
|
_____________
Shares at $ ________ per share (Grant date):
____________
|
2.
|
_____________
Shares at $ ________ per share (Grant date):
____________
|
3.
|
_____________
Shares at $ ________ per share (Grant date):
____________
|
4.
|
_____________
Shares at $ ________ per share (Grant date):
____________
|
I
choose to pay for the exercise of the above option(s) as follows
(please
circle applicable item numbers):
1. Cash:
$____________________
2. Check:
$____________________ (please
make checks payable to ADVENTRX Pharmaceuticals, Inc.)
3. Surrender
of _________________ Shares:
|
Please
deliver the stock certificate(s) representing the Shares to (please
print
legibly):
|
Name:
(please
print legibly)
Signature:
Date:
Phone
No:
-7-
Exhibit
10.3
ADVENTRX
Pharmaceuticals, Inc.
2005
Employee Stock Purchase Plan
1. Purpose.
The
purpose of the 2005 Employee Stock Purchase Plan (the “Plan”)
of
ADVENTRX Pharmaceuticals, Inc., a Delaware corporation (the “Company”)
is to
provide employees of the Company and its Designated Subsidiaries with an
opportunity to purchase Common Stock. The Company intends to have the Plan
qualify as an “Employee Stock Purchase Plan” under Section 423 of the Code. The
provisions of the Plan shall, accordingly, be construed so as to extend and
limit participation in a manner consistent with the requirements of that
section
of the Code.
2. Definitions.
As
used
in the Plan, the terms set forth below shall have the meanings set forth
below:
2.1 Acquisition
means a
merger or consolidation of the Company with and into another person or the
sale,
transfer, or other disposition of all or substantially all of the Company’s
assets to one or more persons (other than any wholly-owned subsidiary of
the
Company) in a single transaction or series of related transactions.
2.2 Board
means
the Board of Directors of the Company.
2.3 Code
means
the Internal Revenue Code of 1986, as amended.
2.4 Common
Stock
means
the Common Stock, par value $0.001 per share, of the Company.
2.5 Compensation
means
all regular, straight-time compensation, including commissions, but not payments
for overtime, shift premium, incentive compensation, incentive payments,
bonuses
and other irregular or infrequent compensation or benefits.
2.6 Continuous
Status as an Employee
means
the absence of any interruption or termination of service as an Employee.
Continuous Status as an Employee shall not be considered interrupted in the
case
of (i) sick leave; (ii) military leave; (iii) any other leave of absence
approved by the Administrator, provided,
that
such leave is for a period of not more than 90 days, unless reemployment
upon
the expiration of such leave is guaranteed by contract or statute, or unless
provided otherwise pursuant to Company policy adopted from time to time;
or
(iv) in the case of transfers between locations of the Company or
between
the Company and its Designated Subsidiaries.
2.7 Contributions
means
all amounts credited to the account of a participant pursuant to the
Plan.
2.8 Designated
Subsidiaries
means
the Subsidiaries which have been or will be designated by the Board from
time to
time in its sole discretion as eligible to participate in the Plan.
2.9 Employee
means
any person, including an Officer, who is customarily employed for at least
20
hours per week and more than five months in a calendar year by the Company
or
one of its Designated Subsidiaries.
2.10 Exchange
Act means
the
Securities Exchange Act of 1934, as amended.
2.11 Initial
Offering Period means
the
first Offering Period of the Plan.
2.12 Offering
Commencement Date means
the
first business day of each Offering Period of the Plan.
2.13 Offering
Period means
any
of the periods, generally of six months duration, as set forth in Section
4.
2.14 Officer
means
a
person who is an officer of the Company within the meaning of Section 16
of the
Exchange Act and the rules and regulations promulgated thereunder.
2.15 Offering
Termination Date means
the
last business day of each Offering Period of the Plan.
2.16 Parent
means
a
parent corporation of the Company, whether now or hereafter existing, as
defined
by Section 424(a) of the Code.
2.17 Purchase
Price means
with respect to an Offering Period an amount equal to 85% of the Fair Market
Value (as defined in Section 7.2) of a Share on the Offering Commencement
Date
or on the Offering Termination Date, whichever is lower; provided,
however,
that
(i) if there is an increase in the number of Shares available for
issuance
under the Plan as a result of a stockholder-approved amendment to the Plan,
(ii) all or a portion of such additional Shares are to be issued with
respect to the Offering Period underway at the time of such increase
(“Additional
Shares”),
and
(iii) the Fair Market Value of a Share of Common Stock on the date
of such
increase (the “Approval
Date Fair Market Value”)
is
higher than the Fair Market Value on the Offering Commencement Date for such
Offering Period, then in such instance the Purchase Price with respect to
Additional Shares shall be 85% of the Approval Date Fair Market Value or
the
Fair Market Value of a Share of Common Stock on the Offering Termination
Date,
whichever is lower.
2.18 Securities
Act means
the
Securities Act of 1933, as amended.
2.19 Share
means
a
share of Common Stock, as adjusted in accordance with Section 18.
2.20 Subsidiary
means
a
subsidiary corporation of the Company, whether now or hereafter existing,
as
defined in Section 424(f) of the Code.
The
terms
set forth below have the meanings ascribed to them in the following
sections:
Term |
Section
|
|||
Administrator
|
13.2
|
|||
AMEX
|
7.2
|
|||
Company
|
1
|
|||
Fair
Market Value
|
7.2
|
|||
New
Offering Termination Date
|
18.2
|
|||
Plan
|
1
|
|||
Reserves
|
18.1
|
|||
-2-
3. Eligibility.
3.1 Eligible
Persons.
Any
person who is an Employee as of the Offering Commencement Date of a given
Offering Period shall be eligible to participate in such Offering Period
under
the Plan, subject to the requirements of Sections 5.1 and the limitations
imposed by Section 423(b) of the Code.
3.2 Certain
Restrictions.
Any
provisions of the Plan to the contrary notwithstanding, no Employee shall
be
granted an option under the Plan (i) if, immediately after the grant,
such
Employee (taking into account stock which would be attributed to such Employee
pursuant to Section 424(d) of the Code) would own capital stock of the Company
or hold outstanding options to purchase stock possessing five percent or
more of
the total combined voting power or value of all classes of stock of the Company
or of any Parent or Subsidiary of the Company, or (ii) if such option
would
permit such Employee’s rights to purchase an aggregate of stock under all
employee stock purchase plans (described in Section 423 of the Code) of the
Company and its Parent or Subsidiaries with a Fair Market Value in excess
of
Twenty-Five Thousand Dollars ($25,000) (determined at the time such option
is
granted) for each calendar year in which such option is outstanding at any
time.
4. Offering
Periods.
Each
Offering Period will begin on January 1 or July 1 and end on the next following
June 30 or December 31, respectively. The Initial Offering Period shall commence
on July 1, 2005. At any time and from time to time, the Board may change
the
duration or the frequency of Offering Periods with respect to future Offering
Periods or suspend operation of the Plan with respect to Offering Periods
not
yet commenced.
5. Participation
5.1 Subscription
Agreement.
An
eligible Employee may become a participant in the Plan by completing a
subscription agreement on the form provided by the Company and filing it
with
the Company’s payroll office at least five business days prior to the applicable
Offering Commencement Date, unless a later time for filing the subscription
agreement is set by the Board for all eligible Employees with respect to
a given
Offering Period. The subscription agreement shall set forth the percentage
of
the participant’s Compensation (subject to Section 6.1) to be paid as
Contributions pursuant to the Plan.
5.2 Timing
of Payroll Deductions.
Payroll
deductions shall commence on the first payroll following the Offering
Commencement Date and shall end on the last payroll paid on or prior to the
Offering Termination Date of the Offering Period to which the subscription
agreement is applicable, unless sooner terminated by the participant as provided
in Section 10.
5.3 Tax
Withholding.
Each
participant who purchases Shares under the Plan shall thereby be deemed to
have
agreed that the Company or the Subsidiary that employs the participant shall
be
entitled to withhold, from any other amounts that may be payable to the
participant at or around the time of the purchase, such federal, state, local
and foreign income, employment and other taxes which may be required to be
withheld under applicable laws. In lieu of such withholding, the Company
or such
Subsidiary may require the participant to remit such taxes to the Company
or
such Subsidiary as a condition of the purchase.
6. Method
of Payment of Contributions
6.1 Election.
A
participant shall elect to have payroll deductions made on each payday during
the Offering Period in an amount not less than one percent and not more than
10
percent (or such other percentage as the Board may establish from time to
time
before an Offering Commencement Date) of such participant’s Compensation on each
payday during the Offering Period. All payroll deductions made by a participant
shall be credited to such participant’s account under the Plan. A participant
may not make any additional payments into such account.
-3-
6.2 Discontinuation;
Changes.
A
participant may discontinue participation in the Plan as provided in Section
10.
In addition, if the Board has so announced to Employees at least five days
prior
to the scheduled beginning of the next Offering Period to be affected by
the
Board’s determination, a participant may change the rate of such participant’s
Contributions with respect to the Offering Period by completing and filing
with
the Company a new subscription agreement authorizing a change in the payroll
deduction rate. If otherwise permitted, no such change shall enable a
participant to resume Contributions other than as of an Offering Commencement
Date, following a withdrawal of Contributions during an Offering Period pursuant
to Section 10. Any such change in rate shall be effective as of the
first
payroll period following the date of filing of the new subscription agreement,
if the agreement is filed at least 10 business days prior to such period
and, if
not, as of the second following payroll period.
6.3 Reductions.
Notwithstanding the foregoing, to the extent necessary to comply with Section
423(b)(8) of the Code and Section 3.2, a participant’s payroll deductions may be
decreased during any Offering Period scheduled to end during the current
calendar year to 0%. Payroll deductions reduced to 0% in compliance with
this
Section 6.3 shall re-commence automatically at the rate provided in such
participant’s subscription agreement at the beginning of the first Offering
Period which is scheduled to end in the following calendar year, unless
terminated by the participant as provided in Section 10.
7. Grant
of Option.
7.1 Number
of Shares.
On the
Offering Commencement Date of each Offering Period, each eligible Employee
participating in such Offering Period shall be granted an option to purchase
on
the Offering Termination Date of that Offering Period a number of Shares
determined by dividing such Employee’s Contributions accumulated during such
Offering Period prior to such Offering Termination Date and retained in the
participant’s account as of the Offering Termination Date by the applicable
Purchase Price. However, the Board may determine from time to time, prior
to the
applicable Offering Period, the maximum number of Shares an Employee may
purchase during each such Offering Period, provided
that any
such purchase shall be subject to the limitations set forth in Sections 3.2
and
12.
7.2 Fair
Market Value.
The
fair market value of the Common Stock on a given date (the “Fair
Market Value”)
shall
be (i) the closing sales price on the American Stock Exchange (“AMEX”),
or any
national securities exchange or other established market on which the Common
Stock is then listed (or, in the event that the Common Stock is not traded
on
such date, on the immediately preceding trading date) or (ii) determined
by
the Board in its discretion based on the closing sales price of the Common
Stock
for such date (or, in the event that the Common Stock is not traded on such
date, on the immediately preceding trading date), as reported by AMEX or
other
such exchange or market, or (iii) if the closing sales price is not
reported, the mean of the bid and asked prices per share of the Common Stock
as
reported by AMEX or other such exchange.
-4-
8. Exercise
of Option.
Unless
a
participant withdraws from the Plan as provided in Section 10, such
participant’s option for the purchase of Shares will be exercised automatically
on the Offering Termination Date of an Offering Period, and the maximum number
of full Shares subject to the option will be purchased at the applicable
Purchase Price with the accumulated Contributions in such participant’s account.
No fractional Shares shall be issued. The Shares purchased upon exercise
of an
option hereunder shall be deemed to be transferred to the participant on
the
Offering Termination Date. A participant’s option to purchase Shares hereunder
shall be exercisable only by such participant during such participant’s
lifetime.
9. Delivery.
As
promptly as practicable after each Offering Termination Date of each Offering
Period, the Company shall arrange the delivery to or for the benefit of each
participant, as appropriate, of a certificate representing the Shares purchased
upon exercise of such participant’s option. Any payroll deductions accumulated
in a participant’s account which are not sufficient to purchase a full Share
shall be retained in the participant’s account for the subsequent Offering
Period, subject to earlier withdrawal by the participant as provided in Section
10. Any other amounts left over in a participant’s account after an Offering
Termination Date shall be returned to the participant.
10. Voluntary
Withdrawal; Termination of Employment.
10.1 Withdrawal
of Contributions.
A
participant may withdraw all but not less than all of the Contributions credited
to such participant’s account under the Plan at any time prior to each Offering
Termination Date by giving written notice to the Company. All of the
participant’s Contributions credited to such participant’s account will be paid
to such participant promptly after receipt of such participant’s notice of
withdrawal and such participant’s option for the current Offering Period will be
automatically terminated, and no further Contributions for the purchase of
Shares will be made during the Offering Period.
10.2 Termination
of Employment.
Upon
termination of the participant’s Continuous Status as an Employee prior to the
Offering Termination Date of an Offering Period for any reason, including
retirement or death, the Contributions credited to such participant’s account
will be returned to such participant or, in the case of such participant’s
death, to the person or persons entitled thereto under Section 14, and such
participant’s option will be automatically terminated.
10.3 Automatic
Withdrawal from Plan.
In the
event an Employee fails to remain in Continuous Status as an Employee of
the
Company for at least 20 hours per week during the Offering Period in which
the
Employee is a participant, such participant will be deemed to have elected
to
withdraw from the Plan and the Contributions credited to such participant’s
account will be returned and such participant’s option terminated.
10.4 Effect
of Withdrawal from Plan.
A
participant’s withdrawal during an Offering Period will not have any effect upon
such participant’s eligibility to participate in a succeeding Offering Period or
in any similar plan which may hereafter be adopted by the Company.
11. Interest.
No
interest shall accrue on the Contributions of a participant in the
Plan.
-5-
12. Stock.
12.1 Maximum
Number of Shares.
Subject
to adjustment as provided in Section 18, the maximum number of Shares which
shall be made available for sale under the Plan shall be 1,000,000 Shares,
plus
an annual increase to be added on the first day of the Company’s fiscal year
beginning in 2006 and on each anniversary of that date thereafter equal to
the
lesser of (i) one percent of the number of outstanding shares of Stock on
such
day, (ii) 750,000 and (iii) such other amount as the Board may specify prior
to
the date such annual increase is to take effect. If the Board determines
that, on a given Offering Termination Date, the number of shares with respect
to
which options are to be exercised may exceed (i) the number of Shares
that
were available for sale under the Plan on the Offering Commencement Date,
or
(ii) the number of shares available for sale under the Plan on such
Offering Termination Date, the Board may in its sole discretion provide that
the
Company shall make a pro rata allocation of the Shares available for purchase
on
such Offering Commencement Date or Offering Termination Date, as applicable,
in
as uniform a manner as shall be practicable and as it shall determine in
its
sole discretion to be equitable among all participants exercising options
to
purchase Common Stock on such Offering Termination Date. The Company may
make
pro rata allocation of the Shares available on the Offering Commencement
Date of
the applicable Offering Period pursuant to the preceding sentence,
notwithstanding any authorization of additional Shares for issuance under
the
Plan by the Company’s stockholders subsequent to such Offering Commencement
Date.
12.2 No
Interest or Voting Right.
The
participant shall have no interest or voting right in Shares covered by such
participant’s option until such option has been exercised.
12.3 Registration
of Shares.
Shares
to be delivered to a participant under the Plan will be registered in the
name
of the participant or in the name of the participant and such participant’s
spouse, as directed by the participant.
13. Administration.
13.1 Board
Authority.
The
Board, or a committee named by the Board, shall supervise and administer
the
Plan and shall have full power to adopt, amend and rescind any rules deemed
desirable and appropriate for the administration of the Plan and not
inconsistent with the Plan, to construe and interpret the Plan, and to make
all
other determinations necessary or advisable for the administration of the
Plan.
The Board’s determinations made in good faith on matters referred to in this
Plan shall be final, binding and conclusive on all persons having or claiming
any interest under this Plan.
13.2 Designation
of Administrator.
The
Board may from time to time designate an employee or retain a third party
to
address routine administrative matters. Any employee or third party so
designated may be referred to herein as the “Administrator.”
14. Designation
of Beneficiary.
14.1 Designation.
A
participant may file a written designation of a beneficiary who is to receive
any Shares and cash, if any, from the participant’s account under the Plan in
the event of such participant’s death subsequent to the end of an Offering
Period but prior to delivery to such participant of such Shares and cash.
Any
such beneficiary shall also be entitled to receive any cash from the
participant’s account under the Plan in the event of such participant’s death
prior to the Offering Termination Date of an Offering Period.
14.2 Changes
to Designation; Lack of Designation.
Such
designation of beneficiary may be changed by the participant at any time
by
written notice. In the event of the death of a participant and in the absence
of
a beneficiary validly designated under the Plan who is living at the time
of
such participant’s death, the Company shall deliver such Shares or cash to the
executor or administrator of the estate of the participant, or if no such
executor or administrator has been appointed (to the knowledge of the Company),
the Company, in its discretion, may deliver such Shares or cash to the spouse
or
to any one or more dependents or relatives of the participant, or if no spouse,
dependent or relative is known to the Company, then to such other person
as the
Company may designate.
-6-
15. Transferability
of Options and Shares.
15.1 Restrictions
on Transfer.
Neither
Contributions credited to a participant’s account nor any rights with regard to
the exercise of an option or to receive Shares under the Plan may be assigned,
transferred, pledged or otherwise disposed of in any way (other than by will,
the laws of descent and distribution, or as provided in Section 14) by the
participant. Any such attempt at assignment, transfer, pledge or other
disposition shall be without effect, except that the Company may treat such
act
as an election to withdraw funds in accordance with Section 10. In addition,
if
the Board has so announced to Employees at least five days prior to the
scheduled beginning of the next Offering Period to be affected by the Board’s
determination, any Shares acquired on the Offering Termination Date of such
Offering Period may be subject to restrictions specified by the Board on
the
transfer of such Shares.
15.2 Notice
of Transfer.
Any
participant selling or transferring any or all of such participant’s Shares
purchased pursuant to the Plan must provide written notice of such sale or
transfer to the Company within five business days after the date of sale
or
transfer. Such notice to the Company shall include the gross sales price,
if
any, the Offering Period during which the Shares being sold were purchased
by
the participant, the number of Shares being sold or transferred and the date
of
sale or transfer.
16. Use
of Funds.
All
Contributions received or held by the Company under the Plan may be used
by the
Company for any corporate purpose and shall be subject to claims by creditors
of
the Company, and the Company shall not be obligated to segregate such
Contributions from its other assets. The Company shall not pay any interest
on
any Contributions.
17. Reports.
Individual
accounts will be maintained for each participant in the Plan. Statements
of
account will be given to participating Employees at least annually, which
statements will set forth the amounts of Contributions, the per Share Purchase
Price, the number of Shares purchased and the remaining cash balance, if
any.
18. Adjustments
Upon Changes in Capitalization; Acquisitions.
18.1 Adjustment.
Subject
to any required action by the stockholders of the Company, the number of
shares
covered by each option under the Plan which has not yet been exercised and
the
number of Shares which have been authorized for issuance under the Plan but
have
not yet been placed under option (collectively, the “Reserves”),
as
well as the maximum number of Shares which may be purchased by a participant
in
an Offering Period, the number of Shares set forth in Section 12.1, and the
price per Share of Common Stock covered by each option under the Plan which
has
not yet been exercised, shall be proportionately adjusted for any increase
or
decrease in the number of the Company’s issued Shares resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification
of
the Common Stock (including any such change in the number of Shares effected
in
connection with a change in domicile of the Company), or any other increase
or
decrease in the number of Shares effected without receipt of consideration
by
the Company; provided,
however,
that
conversion of any convertible securities of the Company or the “cashless” or
“net” exercise of any derivative securities of the Company shall not be deemed
to have been “effected without receipt of consideration.” Such adjustment shall
be made by the Board, whose determination in that respect shall be final,
binding and conclusive.
-7-
18.2 Acquisitions.
In the
event of a dissolution or liquidation of the Company, the Offering Period
then
in progress will terminate immediately prior to the consummation of such
action,
unless otherwise provided by the Board. In the event of an Acquisition, each
option outstanding under the Plan shall be assumed or an equivalent option
shall
be substituted by the successor corporation or a parent or Subsidiary of
such
successor corporation. In the event that the successor corporation refuses
to
assume or substitute for outstanding options, the Offering Period then in
progress shall be shortened and a new Offering Termination Date shall be
set
(the “New
Offering Termination Date”),
as of
which date the Offering Period then in progress will terminate. The New Offering
Termination Date shall be on or before the date of consummation of the
transaction and the Board shall notify each participant in writing, at least
ten
days prior to the New Offering Termination Date, that the Offering Termination
Date for such participant’s option has been changed to the New Offering
Termination Date and that such participant’s option will be exercised
automatically on the New Offering Termination Date, unless prior to such
date
such participant has withdrawn from the Offering Period as provided in Section
10. For purposes of this Section 18, an option granted under the Plan shall
be
deemed to be assumed, without limitation, if, at the time of issuance of
the
stock or other consideration upon an Acquisition, each holder of an option
under
the Plan would be entitled to receive upon exercise of the option the same
number and kind of shares of stock or the same amount of property, cash or
securities as such holder would have been entitled to receive upon the
occurrence of the transaction if the holder had been, immediately prior to
the
transaction, the holder of the number of Shares covered by the option at
such
time (after giving effect to any adjustments in the number of Shares covered
by
the option as provided for in this Section 18); provided,
however,
that if
the consideration received in the transaction is not solely common stock
of the
successor corporation or its parent (as defined in Section 424(e) of the
Code),
the Board may, with the consent of the successor corporation, provide for
the
consideration to be received upon exercise of the option to be solely common
stock of the successor corporation or its parent equal in Fair Market Value
to
the per Share consideration received by holders of Common Stock in the
transaction.
18.3 Other
Adjustments.
The
Board may, if it so determines in the exercise of its sole discretion, also
make
provision for adjusting the Reserves, as well as the price per Share of Common
Stock covered by each outstanding option, in the event that the Company effects
one or more reorganizations, recapitalizations, rights offerings or other
increases or reductions of Shares of its outstanding Common Stock, and in
the
event of the Company’s being consolidated with or merged into any other
corporation.
19. Amendment
or Termination.
19.1 Amendment
or Termination by the Board.
The
Board may at any time and for any reason terminate or amend the Plan. Except
as
provided in Section 18, no such termination of the Plan may affect options
previously granted, provided
that the
Plan or an Offering Period may be terminated by the Board on an Offering
Termination Date or by the Board’s setting a new Offering Termination Date with
respect to an Offering Period then in progress if the Board determines that
termination of the Plan or the Offering Period is in the best interests of
the
Company and its stockholders or if continuation of the Plan or the Offering
Period would cause the Company to incur adverse accounting charges as a result
of the Plan. Except as provided in Section 18 and in this Section 19, no
amendment to the Plan shall make any change in any option previously granted
which adversely affects the rights of any participant.
19.2 Other
Powers of the Board.
Without
stockholder consent and without regard to whether any participant rights
may be
considered to have been adversely affected, the Board (or its committee)
shall
be entitled to change the Offering Periods, limit the frequency or number
of
changes in the amount withheld during an Offering Period, establish the exchange
ratio applicable to amounts withheld in a currency other than U.S. dollars,
permit payroll withholding in excess of the amount designated by a participant
in order to adjust for delays or mistakes in the Company’s processing of
properly completed withholding elections, establish reasonable waiting and
adjustment periods or accounting and crediting procedures to ensure that
amounts
applied toward the purchase of Common Stock for each participant properly
correspond with amounts withheld from the participant’s Compensation, and
establish such other limitations or procedures as the Board (or its committee)
determines in its sole discretion advisable which are consistent with the
Plan.
-8-
20. Notices
and Other Communications.
Any
notice, demand, request or other communication hereunder to any party shall
be
deemed to be sufficient if contained in a written instrument delivered in
person
or duly sent by first class registered, certified or overnight mail, postage
prepaid, or telecopied with a confirmation copy by regular, certified or
overnight mail, addressed or telecopied, as the case may be, (i) if
to the
recipient of an Award, at such participant’s residence address last filed with
the Company and (ii) if to the Company, at its principal place of
business,
addressed to the attention of its Treasurer, or to such other address or
telecopier number or electronic mail address, as the case may be, as the
addressee may have designated by notice to the addressor. All such notices,
requests, demands and other communications shall be deemed to have been
received: (i) in the case of personal delivery, on the date of such
delivery; (ii) in the case of mailing, when received by the addressee;
(iii) in the case of facsimile transmission, when confirmed by facsimile
machine report; and (iv) in the case of electronic mail, when directed
to
an electronic mail address at which the receiving party has consented to
receive
notice, provided,
that
such consent is deemed revoked if the sender is unable to deliver by electronic
transmission two consecutive notices and such inability becomes known to
the
secretary or assistant secretary of the corporation or to the transfer agent,
or
other person responsible for giving notice.
21. Conditions
to Issuance of Shares.
21.1 Compliance
with Securities Laws.
Shares
shall not be issued with respect to an option unless the exercise of such
option
and the issuance and delivery of such Shares pursuant thereto shall comply
with
all applicable provisions of law, domestic or foreign, including, without
limitation, the Securities Act, the Exchange Act, the rules and regulations
promulgated thereunder, applicable state securities laws and the requirements
of
any stock exchange upon which the Shares may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to
such
compliance.
21.2 Purchaser
Representation.
As a
condition to the exercise of an option, the Company may require the person
exercising such option to represent and warrant at the time of any such exercise
that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel
for
the Company, such a representation is required by any of the aforementioned
applicable provisions of law.
22. Term
of Plan; Effective Date.
The Plan
shall be in effect for a term of ten years beginning on May 24, 2005, the
date
the requisite number of stockholders of the Company approved the Plan, unless
earlier terminated pursuant to Section 19.
-9-
Exhibit
10.4
ADVENTRX
Pharmaceuticals, Inc.
2005
Employee Stock Purchase Plan
Subscription
Agreement
New
Election ___
Change
of
Election ___
1. I,
__________________, hereby elect to participate in ADVENTRX Pharmaceuticals,
Inc.’s (the “Company”)
2005
Employee Stock Purchase Plan (the “Plan”)
for the
Offering Period __________ to ______________, and subscribe to purchase shares
of Common Stock of the Company (“Common
Stock”)
in
accordance with this Subscription Agreement and the Plan. Capitalized terms
used
but not defined in this Subscription Agreement shall have the meaning ascribed
to them in the Plan.
2. I
elect
to have Contributions in the amount of _____% of my Compensation applied
to this
purchase. I understand that this amount must not be less than 1% and not
more
than 10% of my Compensation during the Offering Period. (Please note that
no
fractional percentages are permitted).
3. I
hereby
authorize payroll deductions from each paycheck during the Offering Period
at
the rate stated in Item 2 of this Subscription Agreement. I understand that
all
payroll deductions made by me shall be credited to my account under the Plan
and
that I may not make any additional payments into such account. I understand
that
all payments made by me shall be accumulated, without interest or earnings,
for
the purchase of Shares at the applicable purchase price determined in accordance
with the Plan. I further understand that, except as otherwise set forth in
the
Plan, shares will be purchased for me automatically on the Offering Termination
Date of each Offering Period unless I otherwise withdraw from the Plan by
giving
written notice to the Company for such purpose in accordance with the
Plan.
4. I
understand that I may discontinue at any time prior to the Offering Termination
Date my participation in the Plan as provided in Section 10 of the Plan.
I
acknowledge that, unless I discontinue my participation in the Plan as provided
in Section 10 of the Plan, my election will continue to be effective for
each
successive Offering Period.
5. I
have
received a complete copy of the Plan. I understand that my participation
in the
Plan is in all respects subject to the terms of the Plan.
6. Shares
purchased for me under the Plan should be issued in the name(s) of (name
of
employee or employee and spouse only):
7. In
the
event of my death, I hereby designate the following as my beneficiary(ies)
to
receive all payments and shares due to me under the Plan:
NAME: (Please print) | |
(First)
(Middle)
(Last)
|
|
(Address) | |
(Relationship) | |
8. I
understand that if I dispose of any shares received by me pursuant to the
Plan
within two years after the Offering Commencement Date (the first day of the
Offering Period during which I purchased such shares) or within one year
after
the Offering Termination Date, I will be treated for federal income tax purposes
as having received ordinary compensation income at the time of such disposition
in an amount equal to the excess of the fair market value of the shares on
the
Offering Termination Date over the price which I paid for the shares, regardless
of whether I disposed of the shares at a price less than their fair market
value
at the Offering Termination Date. The remainder of the gain or loss, if any,
recognized on such disposition will be treated as capital gain or
loss.
I
hereby
agree to notify the Company in writing within 30 days after the date of any
such
disposition, and I will make adequate provision for federal, state or other
tax
withholding obligations, if any, which arise upon the disposition of the
Common
Stock. The Company may, but will not be obligated to, withhold from my
compensation the amount necessary to meet any applicable withholding obligation
including any withholding necessary to make available to the Company any
tax
deductions or benefits attributable to the sale or early disposition of Common
Stock by me.
9. If
I
dispose of such shares at any time after expiration of the two-year and one-year
holding periods, I understand that I will be treated for federal income tax
purposes as having received compensation income only to the extent of an
amount
equal to the lesser of (1) the excess of the fair market value of the shares
at
the time of such disposition over the purchase price which I paid for the
shares
under the option, or (2) 15% of the fair market value of the shares on the
Offering Commencement Date. The remainder of the gain or loss, if any,
recognized on such disposition will be treated as capital gain or
loss.
I
understand that this tax summary is only a summary and is subject to change.
I
further understand that I should consult a tax advisor concerning certain
tax
implications of the purchase and sale of stock under the Plan.
-2-
10. I
hereby
agree to be bound by the terms of the Plan. The effectiveness of this
Subscription Agreement is dependent upon my eligibility to participate in
the
Plan.
Signature:__________________________________________ | Date:_____________________________________ | |
Social Security Number:________________________________ |
-3-
EXHIBIT
23.2
CONSENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We
consent to the incorporation by reference in this Registration Statement
on Form
S-8 of our report dated February 3, 2005, except for Note 9, which is as
of
March 28, 2005, related to the consolidated financial statements of ADVENTRX
Pharmaceuticals, Inc. and Subsidiary as of and for the years ended December
31,
2004 and 2003 and for the period from June 12, 1996 (date of inception) to
December 31, 2004, which report appears in the Annual Report on Form 10-KSB
for
the fiscal year ended December 31, 2004 previously filed by ADVENTRX
Pharmaceuticals, Inc. with the Securities and Exchange Commission.
/s/
J.H.
COHN LLP
San
Diego, California
July
12,
2005