EXHIBIT 10.2
CYTOGEN CORPORATION
2004 NON-EMPLOYEE DIRECTOR STOCK INCENTIVE PLAN
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1. Purpose
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The purpose of this 2004 Non-Employee Director Stock Incentive Plan (the
"Plan") of Cytogen Corporation, a Delaware corporation (the "Company"), is to
advance the interests of the Company's stockholders by enhancing the Company's
ability to attract, retain and motivate persons who act as Non-Employee
Directors of the Company (as such term is defined in the Securities Exchange Act
of 1934, as amended), by providing such persons with equity ownership
opportunities and performance-based incentives and thereby better aligning the
interests of such persons with those of the Company's stockholders. Except where
the context otherwise requires, the term "Company" shall include any of the
Company's present or future parent or subsidiary corporations as defined in
Sections 424(e) or (f) of the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder (the "Code") and any other business venture
(including, without limitation, joint venture or limited liability company) in
which the Company has a controlling interest, as determined by the Board of
Directors of the Company (the "Board").
2. Eligibility
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All of the Company's Non-Employee Directors are eligible to be granted
options (each, an "Option") and Compensation Shares, as defined in Section
5(a)(5) hereof, under the Plan. Each person who has been granted an Option or
Compensation Shares under the Plan shall be deemed a "Participant."
3. Administration and Delegation
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(a) Administration by Board. The Plan will be administered by the Board.
The Board shall have authority to adopt, amend and repeal such administrative
rules, guidelines and practices relating to the Plan as it shall deem advisable.
The Board may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any award of options or issuance of Compensation
Shares in the manner and to the extent it shall deem expedient to carry the Plan
into effect and it shall be the sole and final judge of such expediency. All
decisions by the Board shall be made in the Board's sole discretion and shall be
final and binding on all persons having or claiming any interest in the Plan or
in any Option or Compensation Shares. No Director or person acting pursuant to
the authority delegated by the Board shall be liable for any action or
determination relating to or under the Plan made in good faith.
(b) Appointment of Committees. To the extent permitted by applicable law,
the Board may delegate any or all of its powers under the Plan to one or more
committees or subcommittees of the Board (a "Committee"). All references in the
Plan to the "Board" shall mean the Board or a Committee of the Board to the
extent that the Board's powers or authority under the Plan have been delegated
to such Committee.
4. Stock Available Under the Plan
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Subject to adjustment under Section 6, Options and Compensation Shares may
be made under the Plan for up to three hundred seventy five thousand (375,000)
shares of common stock, $0.01 par value per share, of the Company (the "Common
Stock"). If any Option expires or is terminated, surrendered or canceled without
having been fully exercised or is forfeited in whole or in part (including as
the result of shares of Common Stock subject to such Option being repurchased by
the Company at the original issuance price pursuant to a contractual repurchase
right) or results in any Common Stock not being issued, the unused Common Stock
covered by such Option shall again be available for the grant of Options under
the Plan. Shares issued under the Plan may consist in whole or in part of
authorized but unissued shares or treasury shares.
5. Stock Options
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(a) Option Grants.
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(1) Each person who is newly-elected a Director of the Company at an
annual meeting of the stockholders of the Company, such person not having
previously served as a Director of the Company and such person not being an
employee of the Company, shall, as of the date of such annual meeting, be
granted an Option to purchase ten thousand (10,000) shares of Common Stock;
provided, however, that the Board may, from time to time, by resolution of
the Board, increase or decrease the number of shares granted to such newly
elected Directors.
(2) Each person who is appointed a Director of the Company after the
date of the most recent annual meeting of the stockholders of the Company,
and who is not an employee of the Company as of such date of appointment,
shall be granted on such date an Option to purchase a pro rata portion of
ten thousand (10,000) shares of Common Stock, based upon the number of full
calendar months remaining after the date of appointment until but not
including the one year anniversary month of such preceding annual meeting;
provided, however, the Board may, from time to time, by resolution of the
Board, increase or decrease such number of shares of Common Stock.
(3) Effective upon approval of the Plan by the stockholders, each
person who, upon the conclusion of such meeting of stockholders, is a
Director and not an employee of the Company (an "Eligible Director"), shall
be granted an option to purchase ten thousand (10,000) shares of Common
Stock.
(4) On the day following each annual meeting of the stockholders of
the Company, commencing with the 2004 annual meeting, each person who is on
that date an Eligible Director and who was re-elected at that meeting shall
be granted an Option to purchase ten thousand (10,000) shares of Common
Stock; provided, however, that the Board may, from time to time, by
resolution of the Board, increase or decrease the number of shares granted
to such re-elected Directors. In addition, on each such date, the then
Chairman of the Board shall receive an Option to purchase an additional
seven thousand five hundred (7,500) shares of Common Stock; provided,
however, that the Board may, from time to time, by resolution of the Board,
increase or decrease the number of shares so granted to the Chairman of the
Board.
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(5) Eligible Directors shall receive, at the sole discretion of and
after formal action by the Board, Compensation Shares, as defined below, in
such number of shares of Common Stock that is equal to each respective
Eligible Director's Cash Component, as defined below, compensation divided
by the Fair Market Value of the Company's Common Stock as of the date of
issuance of such Compensation Shares, which shall be no earlier than the
date on which the applicable Cash Component compensation becomes due and
payable by the Company, subject to the terms and conditions set forth
herein. Compensation Shares shall not be issued for services not yet
rendered by an Eligible Director to the Company. As used herein: (i)
Compensation Shares means any shares of Common Stock issued to Eligible
Directors hereunder in payment of such Eligible Director's Cash Component
of compensation; and (ii) Cash Component means Director cash compensation,
including but not limited to annual services fees, fees payable for board
and committee meetings attended and fees for committees chaired.
(6) Subject to Section 5(a)(5) hereof, and subject to adjustment under
Section 6, Eligible Directors shall receive Compensation Shares in lieu of
the Cash Component of such Eligible Director's compensation until at least
such time as: (i) such Eligible Director owns two thousand (2,000) shares
of the Company's Common Stock, excluding options or other rights to acquire
shares of the Company's Common Stock, whether exercisable or unexercisable;
or (ii) if fewer than 2,000 shares are so owned, such smaller number of
shares having a Fair Market Value, as defined below, of in excess of one
hundred thousand dollars ($100,000), excluding the value, if any, of
options to purchase Common Stock, whether exercisable or unexercisable, or
other rights to acquire Common Stock of the Company.
(7) Upon achieving either of the milestones (i) or (ii) set forth in
Section 5(a)(6) hereof, each such Eligible Director may, at his or her
option, elect to cease receiving his or her Cash Component to which he or
she is entitled in shares of Common Stock under the Plan; provided,
however, that such Eligible Director must make such election by providing
notice of such election to the Company. Additionally, any Director who has
reached either of the milestones (i) or (ii) set forth in Section 5(a)(6)
hereof may thereafter choose to receive subsequent compensation in cash or
Compensation Shares upon written election made from time to time and to the
Company in advance of the provision of all services provided therefor.
(8) Each Option and Compensation Shares provided for in this Section 5
shall be granted automatically and without further action by the Board or
the Company's stockholders. Promptly after the date of grant of each Option
provided for in this Section 5, the Company shall cause an Option Agreement
to be executed and delivered to the holder of the Option. No other Options
may be granted at any time under this Plan. All Compensation Shares
required to be issued pursuant to the terms of this Section 5 shall be
valued at, and issued on, the next business day immediately following the
date upon which the Cash Component becomes due and payable to such Eligible
Director.
(b) Exercise Price. The exercise price of each Option will be 100% of the
Fair Market Value of the Common Stock on the date of grant of the Option (the
"Exercise Price"). Fair Market value shall mean: (i) if the Common Stock is
traded in a market in which actual transactions are reported, the average of the
high and low prices at which the Common Stock is reported to have traded on the
relevant date in all markets on which trading in the Common Stock is reported,
or if there is no reported sale of the Common Stock on the relevant date, the
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mean of the highest reported bid price and lowest reported asked price for the
Common Stock on the relevant date, (ii) if the Common Stock is publicly traded
but only in markets in which there is no reporting of actual transactions, the
mean of the highest reported bid price and the lowest reported asked price for
the Common Stock on the relevant date, or (iii) if the Common Stock is not
publicly traded, the value of a share of Common Stock as determined by the
Board.
(c) Duration of Options.
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(1) No Option granted under this Plan may be exercised more than 10
years after the date of grant of the option.
(2) Except as provided in Sections 5(f) and 5(g), Options shall become
exercisable in full on the first anniversary of the date of grant.
(d) Exercise of Option. Options may be exercised, in whole or in part, at
any time, by delivery to the Company of a written notice of exercise signed by
the proper person or by any other form of notice (including electronic notice)
approved by the Board together with payment in full as specified in Section 5(e)
for the number of shares for which the Option is exercised.
(e) Payment Upon Exercise. Common Stock purchased upon the exercise of an
Option granted under the Plan shall be paid for in cash, which may be satisfied
by a check, in an amount equal to Exercise Price of the Option.
(f) Termination of Service of Director Holding an Option Other Than Because
of Death, Disability Retirement or Certain Voluntary Resignations. Subject to
the provisions of Section 5(c), if there is a termination of service of a
Director to whom an Option has been granted, other than by reason of the
Director's death or disability or retirement or voluntary resignation, after
three years' service as an Eligible Director, upon or after turning age 55, each
Option held by the Director may be exercised until the earlier of (x) the end of
the three-month period immediately following the date of termination of service,
or (y) the expiration of the term of the option.
(g) Death or Disability of Director Holding an Option. Notwithstanding the
provisions of Section 5(c), if there is a termination of service of a Director
to whom an option has been granted by reason of the Director's death or
disability, or a former Director dies within three months following the date of
his or her termination of service, each option held by the Director on the date
of the Director's termination of service may be exercised in full (i.e., in
respect of up to 100% of the Option shares, regardless of the time elapsed since
the date of grant) until the earlier of (x) the end of the one-year period
immediately following the date of termination of service or (y) the expiration
of the term of the Option. In the event of an Eligible Director's death, all of
such person's outstanding Options will transfer to the maximum extent permitted
by law to such person's designated beneficiary. Each Eligible Director may name,
from time to time, any beneficiary or beneficiaries (which may be named
contingently or successively) as his or her beneficiary for purposes of this
Plan. Each designation shall be on a form prescribed by the Company, will be
effective only when delivered to the Company, when effective will revoke all
prior designations by the Eligible Director and will be allowed only to the
extent permitted by applicable law. If an Eligible Director dies with no such
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beneficiary designation in effect, such person's Options will be transferable by
will or pursuant to the laws of descent and distribution applicable to such
person.
(h) Retirement or Certain Voluntary Resignations. If there is a termination
of service of a Director by reason of the Director's retirement or voluntary
resignation at any time after the Director has reached age 55 and, in each such
case, such Director has provided a minimum of three years' service as an
Eligible Director, each Option held by the Director on the date of the
Director's termination of service may be exercised in full (i.e., in respect of
up to 100% of the option shares, regardless of the time elapsed since the date
of grant) until the earlier of (x) the end of the five year period immediately
following the date of termination of service or (y) the expiration of the term
of the option.
6. Adjustments for Changes in Common Stock and Certain Other Events.
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(a) Changes in Capitalization. In the event of any stock split, reverse
stock split, stock dividend, recapitalization, combination of shares,
reclassification of shares, spin-off or other similar change in capitalization
or event, or any distribution to holders of Common Stock other than an ordinary
cash dividend, (i) the number and class of securities available under this Plan,
(ii) the number of shares received under Section 5(a)(6) and (iii) the number
and class of securities and exercise price per share subject to each outstanding
Option shall be appropriately adjusted by the Company (or substituted Options
may be made, if applicable). If this Section 6(a) applies and Section 6(d) also
applies to any event, Section 6(d) shall be applicable to such event, and this
Section 6(a) shall not be applicable.
(b) Company Discretion. The existence of outstanding Options or
Compensation Shares shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or any
issue of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Common Stock or the rights thereof, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business or any other corporate act or proceeding, whether of a
similar character or otherwise. Except as expressly provided herein, the
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, for cash or property, or for
labor or services either upon direct sale or upon the exercise of rights or
warrants to subscribe therefor, or on conversion of shares or obligations of the
Company convertible into such shares or other securities, shall not affect, and
no adjustment by reason thereof shall be made with respect to, the number, class
or price of shares of Common Stock then subject to outstanding options.
(c) Liquidation or Dissolution. In the event of a proposed liquidation or
dissolution of the Company, the Board shall upon written notice to the
Participants provide that all then unexercised Options will (i) become
exercisable in full as of a specified time at least 10 business days prior to
the effective date of such liquidation or dissolution and (ii) terminate
effective upon such liquidation or dissolution, except to the extent exercised
before the effective date.
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(d) Corporate Transactions; Major Events.
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(1) If as a result of any (i) reorganization, (ii) merger or
consolidation of the Company with or into another entity as a result of
which all of the Common Stock of the Company is converted into or exchanged
for the right to receive cash, securities or other property, or (iii) any
exchange of all of the Common Stock of the Company for cash, securities or
other property pursuant to a share exchange transaction (each of (i), (ii)
and (iii) being a "Corporate Transaction") while an Option is outstanding,
or the execution by the Company of any agreement with respect to a
Corporate Transaction, then (regardless of whether the transaction will
also constitute a Major Event (as defined below)) the Board shall provide
that all outstanding Options shall be assumed, or equivalent options shall
be substituted, by the acquiring or succeeding corporation (or an affiliate
thereof). For purposes hereof, an Option shall be considered to be assumed
if, following consummation of the Corporate Transaction, the Option confers
the right to purchase, for each share of Common Stock subject to the Option
immediately prior to the consummation of the Corporate Transaction, the
consideration (whether cash, securities or other property) received as a
result of the Corporate Transaction by holders of Common Stock for each
share of Common Stock held immediately prior to the consummation of the
Corporate Transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a
majority of the outstanding shares of Common Stock); provided, however,
that if the consideration received as a result of the Corporate Transaction
is not solely common stock of the acquiring or succeeding corporation (or
an affiliate thereof), the Company may, with the consent of the acquiring
or succeeding corporation, provide for the consideration to be received
upon the exercise of Options to consist solely of common stock of the
acquiring or succeeding corporation (or an affiliate thereof) equivalent in
fair market value to the per share consideration received by holders of
outstanding shares of Common Stock as a result of the Corporate
Transaction.
Notwithstanding the foregoing, if the acquiring or succeeding
corporation (or an affiliate thereof) does not agree to assume, or
substitute for, such Options, or in the event of a liquidation or
dissolution of the Company, the Board shall, upon written notice to the
Participants, provide that all then unexercised Options will become
exercisable in full as of a specified time prior to the Corporate
Transaction and will terminate immediately prior to the consummation of
such Corporate Transaction, except to the extent exercised by the
Participants before the consummation of such Corporate Transaction;
provided, however, that in the event of a Corporate Transaction under the
terms of which holders of Common Stock will receive upon consummation
thereof a cash payment for each share of Common Stock surrendered pursuant
to such Corporate Transaction (the "Acquisition Price"), then the Board may
instead provide that all outstanding Options shall terminate upon
consummation of such Corporate Transaction and that each Participant shall
receive, in exchange therefor, a cash payment equal to the amount (if any)
by which (A) the Acquisition Price multiplied by the number of shares of
Common Stock subject to such outstanding Options (whether or not then
exercisable) exceeds (B) the aggregate exercise price of such Options.
In the event of a Corporate Transaction, Compensation Shares shall be
adjusted in the same manner as the Company's Common Stock.
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(2) Upon the occurrence of a Major Event (regardless of whether such
event also constitutes a Corporate Transaction), all of the Option Shares
covered by an Option shall become immediately available for purchase upon
exercise of the option, without regard to the vesting provisions of Section
5(c)(2). "Major Event" shall mean when (i) the Company enters into one or
more definitive agreements to merge or consolidate the Company with or into
another corporation, or to sell or otherwise dispose of all or
substantially all of the Company's assets, or to effect any other
transaction, share exchange consolidation or reorganization having similar
results or effect; (ii) any person other than the Company makes a tender or
exchange offer for more than 50% of Common Stock pursuant to which
purchases of any amount of Common Stock are made; (iii) stock representing
more than 50% of the voting power of the Company is acquired by any person
other than the Company in any one or more transactions occurring in any 24
month period.
7. General Provisions Applicable to Options and Compensation Shares.
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(a) (i) Transferability of Options. Except as the Board may otherwise
determine or provide in an Option, Options shall not be sold, assigned,
transferred, pledged or otherwise encumbered by the person to whom they are
granted, either voluntarily or by operation of law, except by will or the laws
of descent and distribution, and, during the life of the Participant, shall be
exercisable only by the Participant. References to a Participant, to the extent
relevant in the context, shall include references to authorized transferees.
(ii)Transferability of Compensation Shares. For one year after the date of
issuance of Compensation Shares to any Eligible Director, such Compensation
Shares shall not be transferable by such Eligible Director. During this one year
period, Compensation Shares may not be assigned, pledged or hypothecated in any
way, and will not be transferable otherwise than by will or the laws of descent
and distribution. The Company will not recognize any attempt to assign,
transfer, pledge, hypothecate or otherwise dispose of Compensation Shares
contrary to the provisions of this Plan, or any levy of any attachment or
similar process upon any Compensation Shares, and, except as expressly stated in
this Plan, the Company will not be required to, and will not, remove any related
restrictive legend from the Compensation Shares until such one year period has
expired. The Compensation Shares shall bear a restrictive legend evidencing such
lock-up (the "Lock-up Legend"). Upon the expiration of such one year lock-up
period, Compensation Shares shall become fully transferable by the holder,
subject to the terms of the Securities Act of 1933, as amended and state
securities laws. The Company shall take reasonable steps to remove the Lock-up
Legend from the Compensation Shares within a reasonable time after the
expiration of such period upon the request of an Eligible Director.
Notwithstanding such lock-up provision, upon the occurrence of a Corporate
Transaction, all of the Compensation Shares issued hereunder to Eligible
Directors shall be treated in a like manner as are the outstanding shares of the
Company's Common Stock upon the occurrence of such Corporate Transaction.
(b) Documentation. Each Option shall be evidenced in such form (written,
electronic or otherwise) as the Board shall determine. Each Option may contain
terms and conditions in addition to those set forth in the Plan.
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(c) Amendment of Option. Subject to the provisions of the Company's Bylaws,
the Board may amend, modify or terminate any outstanding Option, including but
not limited to, substituting therefor another Option of the same or a different
type, provided that the Participant's consent to such action shall be required
unless the Board determines that the action, taking into account any related
action, would not materially and adversely affect the Participant.
(d) Conditions on Delivery of Stock. The Company will not be obligated to
deliver any shares of Common Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan until (i) all
conditions of the Option have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company's counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and any applicable stock exchange or
stock market rules and regulations, and (iii) the Participant has executed and
delivered to the Company such representations or agreements as the Company may
consider appropriate to satisfy the requirements of any applicable laws, rules
or regulations.
(e) Deferred Delivery of Shares Issuable Pursuant to an Option. The Board
may, at the time any Option is granted, provide that, at the time Common Stock
would otherwise be delivered pursuant to the Option, the Participant shall
instead receive an instrument evidencing the right to future delivery of Common
Stock at such time or times, and on such conditions, as the Board shall specify.
The Board may at any time accelerate the time at which delivery of all or any
part of the Common Stock shall take place.
(f) Acceleration. The Board may at any time provide that any Award shall
become immediately exercisable in full or in part, free of some or all
restrictions or conditions, or otherwise realizable in full or in part, as the
case may be.
8. Miscellaneous
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(a) No Rights As Stockholder. Subject to the provisions of the applicable
Option, no Participant or designated beneficiary shall have any rights as a
stockholder with respect to any shares of Common Stock to be distributed with
respect to an Option until becoming the record holder of such shares.
Notwithstanding the foregoing, in the event the Company effects a split of the
Common Stock by means of a stock dividend and the exercise price of and the
number of shares subject to such Option are adjusted as of the date of the
distribution of the dividend (rather than as of the record date for such
dividend), then an optionee who exercises an Option between the record date and
the distribution date for such stock dividend shall be entitled to receive, on
the distribution date, the stock dividend with respect to the shares of Common
Stock acquired upon such Option exercise, notwithstanding the fact that such
shares were not outstanding as of the close of business on the record date for
such stock dividend.
(b) Effective Date and Term of Plan. The Plan shall become effective on the
date on which it is adopted by the Board, but no Option granted to a Participant
that is intended to comply with Section 162(m) shall become exercisable, vested
or realizable, as applicable to such Option, unless and until the Plan has been
approved by the Company's stockholders to the extent stockholder approval is
required by Section 162(m) in the manner required under Section 162(m)
(including the vote required under Section 162(m)). No Options shall be granted
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under the Plan after the completion of ten years from the earlier of (i) the
date on which the Plan was adopted by the Board or (ii) the date the Plan was
approved by the Company's stockholders, but Options previously granted may
extend beyond that date.
(c) Amendment of Plan. Subject to the provisions of the Company's Bylaws,
the Board may amend, suspend or terminate the Plan or any portion thereof at any
time, provided that to the extent required by Section 162(m), no Option granted
to a Participant that is intended to comply with Section 162(m) after the date
of such amendment shall become exercisable, realizable or vested, as applicable
to such Option, unless and until such amendment shall have been approved by the
Company's stockholders if required by Section 162(m) (including the vote
required under Section 162(m)).
(d) Governing Law. The provisions of the Plan and all Options made
hereunder shall be governed by and interpreted in accordance with the laws of
the State of Delaware, without regard to any applicable conflicts of law.
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