CYTOGEN CORPORATION
2005 EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE OF THE PLAN
The Cytogen Corporation 2005 Employee Stock Purchase Plan is intended to
promote the interests of the Company (as defined in Article 2) by providing
eligible employees of a Participating Employer (as defined in Article 2) with
the opportunity to acquire a proprietary interest in the Company through
participation in a payroll deduction-based employee stock purchase plan designed
to qualify under section 423 of the Internal Revenue Code of 1986, as amended.
The Plan is not intended and shall not be construed as constituting an "employee
benefit plan," within the meaning of section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended.
The Board (as defined in Article 2) has adopted the Plan to be effective as
of October 1, 2005, subject to shareholder approval of the Plan. The Company
expects to submit the Plan to the shareholders of the Company for approval at
the Company's 2006 annual meeting in June, 2006. The first Purchase Period (as
defined in Article 2) under the Plan ends on June 30, 2006. If for any reason
the shareholders of the Company do not approve the Plan on or before June 30,
2006, the first Purchase Period shall terminate on a date specified by the
Board, the Plan shall immediately terminate, and no purchases of Common Stock
(as defined in Article 2) shall be made under the Plan.
2. DEFINITIONS
(a) "Board" shall mean the Company's Board of Directors.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Change of Control" shall be deemed to have occurred if:
(i) Any "person" (as such term is used in sections 13(d) and
14(d) of the Exchange Act) becomes a "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing more than 50% of the voting
power of the then outstanding securities of the Company; provided that
a Change of Control shall not be deemed to occur as a result of a
transaction in which the Company becomes a subsidiary of another
corporation and in which the shareholders of the Company, immediately
prior to the transaction, will beneficially own, immediately after the
transaction, shares entitling such shareholders to more than 50% of
all votes to which all shareholders of the parent corporation would be
entitled in the election of directors; or
(ii) The consummation of (i) a merger or consolidation of the
Company with another corporation where the shareholders of the
Company, immediately prior to the merger or consolidation, will not
beneficially own, immediately after the merger or consolidation,
shares entitling such shareholders to more than 50% of all votes to
which all shareholders of the surviving corporation would be entitled
in the election of directors, (ii) a sale or other
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disposition of all or substantially all of the assets of the Company,
or (iii) a liquidation or dissolution of the Company.
(d) "Common Stock" shall mean the common stock of the Company.
(e) "Company Affiliate" shall mean any parent or subsidiary corporation
of the Company (as determined in accordance with Code section 424), whether now
existing or subsequently established.
(f) "Company" shall mean Cytogen Corporation, a Delaware corporation, and
any corporate successor to all or substantially all of the assets or voting
stock of Cytogen Corporation that shall adopt the Plan.
(g) "Compensation" shall mean (i) the regular base salary paid to a
Participant by one or more Participating Employers during the Participant's
period of participation in a Purchase Period under the Plan plus (ii) all
overtime payments, bonuses and commissions received during such Purchase Period.
Such Compensation shall be calculated before deduction of (A) any income or
employment tax withholdings or (B) any contributions made by the Participant to
any Code section 401(k) salary deferral plan, any Code section 125 cafeteria
benefit program or any Code section 132(f)(4) transportation fringe benefit
program now or hereafter established by the Company or any Company Affiliate.
However, Compensation shall not include any contributions made by the Company or
any Company Affiliate on the Participant's behalf to any employee benefit or
welfare plan now or hereafter established (other than Code section 401(k), Code
section 125, or Code section 132(f)(4) contributions deducted from such
Compensation).
(h) "Effective Date" shall mean October 1, 2005.
(i) "Eligible Employee" shall mean any person who is employed by a
Participating Employer as an employee on a basis under which he is regularly
expected to render more than 20 hours of service per week for more than five
months per calendar year, for earnings considered wages under Code section
3401(a). However, an "Eligible Employee" shall not include any person who would,
immediately after the grant of a purchase right under this Plan, own (within the
meaning of Code section 424(d)) or hold outstanding options or other rights to
purchase stock possessing 5% or more of the total combined voting power or value
of all classes of stock of the Company or any Company Affiliate.
(j) "Entry Date" means the first day of a Purchase Period.
(k) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(l) "Fair Market Value" per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:
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(i) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing
selling price per share of Common Stock on the date in question, as
such price is reported by the National Association of Securities
Dealers on the Nasdaq National Market and published in The Wall Street
Journal. If there is no closing selling price for the Common Stock on
the date in question, then the Fair Market Value shall be the closing
selling price on the last preceding date for which such quotation
exists.
(ii) If the Common Stock is at the time listed on the New York
Stock Exchange or American Stock Exchange, then the Fair Market Value
shall be the closing selling price per share of Common Stock on the
date in question on the stock exchange determined by the Plan
Administrator to be the primary market for the Common Stock, as such
price is officially quoted in the composite tape of transactions on
such exchange and published in The Wall Street Journal. If there is no
closing selling price for the Common Stock on the date in question,
then the Fair Market Value shall be the closing selling price on the
last preceding date for which such quotation exists.
(m) "Participant" shall mean any Eligible Employee of a Participating
Employer who is actively participating in the Plan.
(n) "Participating Employer" shall mean the Company and such Company
Affiliates as may be authorized from time to time by the Board to extend the
benefits of the Plan to their Eligible Employees.
(o) "Plan" shall mean the Cytogen Corporation 2005 Employee Stock
Purchase Plan, as set forth in this document, and as amended from time to time.
(p) "Plan Administrator" shall mean the committee appointed by the Board
to administer the Plan.
(q) "Purchase Date" shall mean the last business day of each Purchase
Period. The initial Purchase Date shall be June 30, 2006.
(r) "Purchase Period" shall mean the period beginning October 1, 2005 and
ending June 30, 2006, and each successive three-month period (or other period
designated by the Plan Administrator), at the end of which shares of Common
Stock shall be purchased on behalf of each Participant. Beginning July 1, 2006,
Purchase Periods shall begin on July 1, October 1, January 1 and April 1, unless
the Plan Administrator determines otherwise.
(s) "Term of Service" means a consecutive one-month period during which
an individual was an employee of the Company or a Company Affiliate.
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3. PURCHASE PERIODS
(a) Purchase Periods. Shares of Common Stock shall be offered for
purchase under the Plan through a series of consecutive Purchase Periods until
such time as (i) the maximum number of shares of Common Stock available for
issuance under the Plan shall have been purchased or (ii) the Plan shall have
been sooner terminated.
(b) Duration of Purchase Periods. Each Purchase Period shall be of such
duration (not to exceed 24 months) as shall be determined by the Plan
Administrator prior to the beginning of the Purchase Period. The first Purchase
Period shall begin on October 1, 2005 and shall end on June 30, 2006. On and
after July 1, 2006, each Purchase Period shall commence at a three-month
interval on each July 1, October 1, January 1 and April 1. The Plan
Administrator may establish different (shorter or longer) Purchase Periods,
before the beginning of the applicable Purchase Period, as the Plan
Administrator deems appropriate.
4. ELIGIBILITY
(a) Commencement of Participation. Except as provided in Article 7, an
Eligible Employee who has completed a Term of Service prior to the Effective
Date and who is employed by a Participating Employer on the Effective Date shall
be eligible to participate in the Plan as of the Effective Date. All other
Eligible Employees, except as provided in Article 7, shall be eligible to
participate in the Plan as of the Entry Date coinciding with or next following
the completion of a Term of Service.
(b) Enrollment Forms. In order to participate in the Plan for a
particular Purchase Period, an Eligible Employee must complete an enrollment
form prescribed by the Plan Administrator (including a stock purchase agreement
and a payroll deduction authorization) and file such forms with the Plan
Administrator (or its designee) at such time before the Entry Date for that
Purchase Period as may be determined by the Plan Administrator.
5. PAYROLL DEDUCTIONS
(a) Elections. The payroll deduction authorized by a Participant for
purposes of acquiring shares of Common Stock during a Purchase Period may be any
multiple of 1% of the Compensation paid to the Participant during the Purchase
Period, up to a maximum of 10% of Compensation. The deduction rate so authorized
shall continue in effect throughout the Purchase Period, except to the extent
such rate is changed in accordance with the following guidelines:
(i) The Participant may, at any time during the Purchase Period,
reduce his rate of payroll deduction, to become effective as soon as
possible after filing the appropriate form with the Plan
Administrator. The Participant may not effect more than one such
reduction per Purchase Period.
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(ii) Prior to the commencement of a ny new Purchase Period, a
Participant may increase the rate of his payroll deduction by filing
the appropriate form with the Plan Administrator. The new rate (which
may not exceed 10% of Compensation) shall become effective on the next
Entry Date following the filing of such form.
(b) Commencement. Payroll deductions shall begin on the first pay day as
of which commencement is administratively feasible following the beginning of
the Purchase Period and shall (unless sooner terminated by the Participant)
continue through the pay day ending with or immediately prior to the last day of
the Purchase Period. The amounts so collected shall be credited to a book
account established on the Company's records for the Participant, but no
interest shall be paid on the balance from time to time outstanding in such
account. The amounts collected from the Participant shall not be required to be
held in any segregated account or trust fund and may be commingled with the
general assets of the Company and used for general corporate purposes.
(c) Cessation of Payroll Deductions. Payroll deductions shall
automatically cease upon the termination of the Participant's purchase right in
accordance with the Plan.
6. PURCHASE RIGHTS
(a) Grant of Purchase Rights. A Participant shall be granted a separate
purchase right for each Purchase Period in which he enrolls. The purchase right
shall be granted on the Entry Date of the Purchase Period and shall provide the
Participant with the right to purchase shares of Common Stock, at the end of
that Purchase Period, upon the terms set forth below. The Participant shall
execute a stock purchase agreement embodying such terms and such other
provisions (not inconsistent with the Plan) as the Plan Administrator may deem
advisable.
(b) Exercise of the Purchase Right. Each purchase right shall be
automatically exercised on the Purchase Date for the Purchase Period, and shares
of Common Stock shall accordingly be purchased on behalf of each Participant on
the Purchase Date. The purchase shall be effected by applying the Participant's
payroll deductions for the Purchase Period to the purchase of whole shares of
Common Stock at the purchase price in effect for the Participant for that
Purchase Date.
(c) Purchase Price. Unless the Plan Administrator determines otherwise
prior to the beginning of the Purchase Period, the purchase price per share at
which Common Stock will be purchased on the Participant's behalf on the Purchase
Date shall be equal to the lower of (i) 85% of the Fair Market Value per share
of Common Stock on the Entry Date of the Purchase Period or (ii) 85% of the Fair
Market Value per share of Common Stock on the Purchase Date.
(d) Number of Purchasable Shares. The number of shares of Common Stock
purchasable by a Participant on the Purchase Date for a Purchase Period shall be
the number of whole shares obtained by dividing the amount collected from the
Participant through
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payroll deductions during the Purchase Period by the purchase price in effect
for the Participant for that Purchase Date. However, the maximum number of
shares of Common Stock that may be purchased by a Participant on any Purchase
Date shall not exceed the largest number of whole shares of Common Stock as does
not exceed the number of shares determined by dividing $18,750 in the first
nine-month Purchase Period (and $6,250 during any three-month Purchase Period)
by the purchase price as of the Entry Date for the Purchase Period, determined
as described in subsection (c)(i) above. The Plan Administrator shall have the
discretionary authority, exercisable prior to the start of any Purchase Period,
to increase or decrease the limitations to be in effect for the number of shares
purchasable per Participant for the Purchase Period.
(e) Excess Payroll Deductions. Any payroll deductions that are not
applied to the purchase of shares of Common Stock on any Purchase Date because
they are not sufficient to purchase a whole share of Common Stock shall be held
for the purchase of Common Stock on the next Purchase Date, unless the
Participant requests a refund. Any payroll deductions that are not applied to
the purchase of Common Stock by reason of the limitation on the maximum number
of shares purchasable per Participant as of a Purchase Date shall be promptly
refunded.
(f) Suspension of Payroll Deductions. In the event that a Participant is,
by reason of the accrual limitations in Article 7, precluded from purchasing
additional shares of Common Stock on a Purchase Date, then no further payroll
deductions shall be collected from such Participant with respect to that
Purchase Period.
(g) Withdrawal from Purchase Period. The following provisions shall
govern a Participant's withdrawal from a Purchase Period:
(i) A Participant may withdraw from the Purchase Period in
which he is enrolled at any time prior to the Purchase Date by filing
the appropriate form with the Plan Administrator (or its designee),
and no further payroll deductions shall be collected from the
Participant with respect to that Purchase Period. Any payroll
deductions collected during the Purchase Period in which such
withdrawal occurs shall, at the Participant's election, be immediately
refunded or held for the purchase of shares on the Purchase Date. If
no such election is made at the time of such withdrawal, then the
payroll deductions collected from the Participant during the Purchase
Period in which such withdrawal occurs shall be refunded as soon as
possible.
(ii) The Participant's withdrawal from a Purchase Period shall be
irrevocable, and the Participant may not subsequently rejoin that
Purchase Period at a later date. In order to resume participation in
any subsequent Purchase Period, the Participant must re-enroll in the
Plan (by making a timely filing of the prescribed enrollment forms) on
or before the Entry Date of the subsequent Purchase Period.
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(h) Termination of Purchase Right. If a Participant ceases to be an
Eligible Employee for any reason (including death, disability or change in
status) while his purchase right remains outstanding, the Participant's purchase
right shall immediately terminate, and all of the Participant's payroll
deductions for the Purchase Period in which the purchase right so terminates
shall be immediately refunded to the Participant.
(i) Change of Control. Unless the Plan Administrator determines
otherwise, immediately prior to the effective date of any Change of Control of
the Company, each outstanding purchase right shall automatically be exercised by
applying the payroll deductions of each Participant for the Purchase Period in
which the Change of Control occurs to the purchase of whole shares of Common
Stock at a purchase price per share equal to the lower of (i) 85% of the Fair
Market Value per share of Common Stock on the first day of the Purchase Period
or (ii) 85% of the Fair Market Value per share of Common Stock immediately prior
to the effective date of the Change of Control, or such other purchase price
formula as may be in effect for the Purchase Period consistent with the Plan.
The applicable limitation on the number of shares of Common Stock purchasable
per Participant shall continue to apply to any such purchase.
(j) Proration of Purchase Rights. If the total number of shares of Common
Stock to be purchased pursuant to outstanding purchase rights on any particular
date exceeds the number of shares then available for issuance under the Plan,
the Plan Administrator shall make a pro-rata allocation of the available shares
on a uniform and nondiscriminatory basis, and the payroll deductions of each
Participant, to the extent in excess of the aggregate purchase price payable for
the Common Stock pro-rated to such Participant, shall be refunded.
(k) Assignability. A purchase right shall be exercisable only by the
Participant and shall not be assignable or transferable by the Participant.
(l) Stockholder Rights. A Participant shall have no stockholder rights
with respect to the shares subject to his outstanding purchase right until the
shares are purchased on the Participant's behalf in accordance with the
provisions of the Plan and the Participant has become a holder of record of the
purchased shares.
7. ACCRUAL LIMITATIONS
(a) Dollar Limitation. No Participant shall be entitled to accrue rights
to acquire Common Stock pursuant to any purchase right outstanding under this
Plan if and to the extent that such accrual, when aggregated with (i) rights to
purchase Common Stock accrued under any other purchase right granted under this
Plan and (ii) similar rights accrued under other employee stock purchase plans
(within the meaning of Code section 423) of the Company or any Company
Affiliate, would otherwise permit the Participant to purchase more than $25,000
worth of stock of the Company or any Company Affiliate (determined on the basis
of the Fair Market Value per share on the date or dates such rights are granted)
for each calendar year in which such rights are at any time outstanding. For
purposes of applying such accrual limitations to the purchase rights granted
under the Plan, the following provisions shall apply:
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(i) The right to acquire Common Stock under each outstanding
purchase right shall accrue on each Purchase Date on which such right
is outstanding.
(ii) No right to acquire Common Stock under any outstanding
purchase right shall accrue to the extent the Participant has already
accrued in the same calendar year the right to acquire Common Stock
under one or more other purchase rights at a rate equal to $25,000
worth of Common Stock (determined on the basis of the Fair Market
Value per share on the date or dates of grant) for each calendar year
in which such rights were at any time outstanding.
(b) Refund. If by reason of such accrual limitations, any purchase right
of a Participant does not accrue for a particular Purchase Period, then the
payroll deductions that the Participant made during that Purchase Period with
respect to such purchase right shall be promptly refunded.
8. RESTRICTION ON SHARE TRANSFERS FOR OFFICERS
Participants who are officers of the Company or a Company Affiliate may not
transfer shares of Common Stock purchased under the Plan for a period of 12
months after the Purchase Date as of which the shares are purchased; provided,
however, that this restriction shall cease to apply upon a Change of Control of
the Company or under such other circumstances as the Board deems appropriate.
9. ADMINISTRATION OF THE PLAN
The Plan Administrator shall have full discretionary authority to interpret
and construe any provision of the Plan and to adopt such rules and regulations
for administering the Plan as it may deem necessary in order to comply with the
requirements of Code section 423. Decisions of the Plan Administrator shall be
final and binding on all parties having an interest in the Plan. As a condition
of participating in the Plan, all Participants must acknowledge, in writing or
by completing the enrollment forms to participate in the Plan, that all
decisions and determinations of the Plan Administrator shall be final and
binding on the Participant, his beneficiaries and any other person having or
claiming an interest under the Plan on behalf of the Participant.
10. STOCK SUBJECT TO PLAN
(a) Number of Shares. Subject to a djustment as described below, the
aggregate number of shares of Common Stock of the Company that may be issued or
transferred under the Plan is 500,000 shares. The stock purchasable under the
Plan shall be shares of authorized but unissued or reacquired Common Stock,
including shares of Common Stock purchased on the open market.
(b) Adjustment. If any change is made to the Common Stock by reason of
any stock split, stock dividend, recapitalization, combination of shares,
exchange of shares or
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other change affecting the outstanding Common Stock as a class without the
Company's receipt of consideration, the Plan Administrator may make appropriate
adjustments to (i) the maximum number and class of securities issuable under the
Plan, (ii) the maximum number and class of securities purchasable per
Participant on any Purchase Date, and (iii) the number and class of securities
and the price per share in effect under each outstanding purchase right, in
order to prevent the dilution or enlargement of benefits thereunder.
11. EFFECTIVE DATE AND TERM OF THE PLAN
(a) Effective Date. The Plan was adopted by the Board on September 23,
2005, and shall become effective at the Effective Date, provided that no
purchase rights granted under the Plan shall be exercised, and no shares of
Common Stock shall be purchased hereunder, until (i) the Plan shall have been
approved by the stockholders of the Company and (ii) the Company shall have
complied with all applicable requirements of the Securities Act of 1933, as
amended (including the registration of the shares of Common Stock issuable under
the Plan on a Form S-8 registration statement filed with the Securities and
Exchange Commission), and all applicable listing requirements of the Nasdaq
National Market (or other stock exchange if applicable) and all other applicable
requirements established by law or regulation have been met. In the event such
stockholder approval is not obtained, or such compliance is not effected, within
12 months after the date on which the Plan is adopted by the Board (or, if
earlier, by June 30, 2006), the Plan shall terminate and have no further force
or effect, and all sums collected from Participants during the initial Purchase
Period hereunder shall be refunded.
(b) Term. Unless sooner terminated by the Board, the Plan shall terminate
upon the earliest of (i) September 22, 2015, (ii) the date on which all
shares available for issuance under the Plan shall have been sold pursuant to
purchase rights exercised under the Plan or (iii) the date on which all purchase
rights are exercised in connection with a change of control. No further purchase
rights shall be granted or exercised, and no further payroll deductions shall be
collected, under the Plan following such termination.
12. AMENDMENT AND TERMINATION
(a) Amendment; Termination. The Board may alter, amend, suspend or
terminate the Plan at any time. In the event of Plan termination, any
outstanding payroll deductions that are not used to purchase Common Stock on a
Purchase Date pursuant to the Plan shall be refunded to such Participants as
soon as administratively possible.
(b) Stockholder Approval. In no event may the Board effect any of the
following amendments or revisions to the Plan without the approval of the
Company's stockholders: (i) increase the number of shares of Common Stock
issuable under the Plan, except for permissible adjustments in the event of
certain changes in the Company's capitalization, (ii) alter the purchase price
formula so as to reduce the purchase price payable for the shares of Common
Stock purchasable under the Plan or (iii) modify the eligibility requirements
for participation in the Plan.
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13. GENERAL PROVISIONS
(a) Expenses. All costs and expenses incurred in the administration of
the Plan shall be paid by the Company; however, each Plan Participant shall bear
all costs and expenses incurred by such individual in the sale or other
disposition of any shares purchased under the Plan.
(b) No Right of Employment. Nothing in the Plan shall confer upon the
Participant any right to continue in the employ of the Company or any Company
Affiliate or interfere with or otherwise restrict in any way the rights of the
Company or any Company Affiliate to terminate a Participant's employment at any
time for any reason, with or without cause.
(c) Withholding. If and to the extent that any stock purchases or sales
under this Plan are subject to Federal, state or local taxes, the Company is
authorized to withhold all applicable taxes from shares issuable under the Plan
or from other compensation payable to Participant.
(d) Governing Law. The validity, construction, interpretation and effect
of the Plan shall be governed and construed by and determined in accordance with
the laws of the state of Delaware, without giving effect to the conflict of laws
provisions thereof.