Exhibit 10.2
ARONEX PHARMACEUTICALS, INC.
AMENDED AND RESTATED 1993 NON-EMPLOYEE
DIRECTOR STOCK OPTION PLAN
Aronex Pharmaceuticals, Inc., a Delaware Corporation (the "Company")
hereby amends and restates its Amended and Restated 1993 Non-Employee Director
Stock Option Plan (this "Plan"), effective as of March 12, 1997, subject to
stockholder approval.
1. Purpose.
The purpose of this Plan is to promote and advance the interests of the
Company by aiding the Company in attracting and retaining qualified directors of
the Company who, at the time of their service, are not employees of the Company
or any of its subsidiaries ("Non-Employee Directors"), and to further align the
interests of such Non-Employee Directors with those of stockholders through
stock options. An additional purpose of this Plan is to recognize and reward the
contributions of Non-Employee Directors who are actively involved in aspects of
the Company's business beyond their role as directors.
2. Administration.
This Plan shall be administered by the Compensation Committee of the Board
of Directors of the Company (the "Committee"), which shall consist of not less
than two members of the Board of Directors, each of whom will be a "non-employee
director" within the meaning of Rule 16b-3 of the Securities and Exchange
Commission (or any successor rule to the same effect) as in effect from time to
time and an "outside director" within the meaning of Section 162(m) of the
Internal Revenue Code of 1986, as amended. For the purposes of this Plan, a
majority of the members of the Committee shall constitute a quorum for the
transaction of business, and the vote of a majority of those members present at
any meeting shall decide any question brought before that meeting. No member of
the Committee shall be liable for any act or omission of any other member of the
Committee or for any act or omission on his own part, including (without
limitation) the exercise of any power or discretion given to him under this
Plan, except those resulting from his own gross negligence or willful
misconduct. All questions of interpretation and application of this Plan, or as
to options granted hereunder (the "Options"), shall be subject to the
determination, which shall be final and binding, of a majority of the whole
Committee.
3. Option Shares.
The stock subject to the Options and other provisions of this Plan shall
be shares of the Company's Common Stock, par value $.001 per share (the "Common
Stock"). The total amount of the Common Stock with respect to which Options may
be granted shall not exceed 600,000 shares in the aggregate; provided, that the
class and aggregate number of shares which may be subject to the Options granted
hereunder shall be subject to adjustment in accordance with the provisions of
Section 11 of this Plan. Such shares may be treasury shares or authorized but
unissued shares.
If any outstanding Option for any reason shall expire or terminate by
reason of the death of the optionee or the fact that the optionee ceases to be a
director, the surrender of any such Option, or any other cause, the shares of
Common Stock allocable to the unexercised portion of such Option may again be
subject to an Option under this Plan.
-1-
4. Grant of Options.
(a) Formula Grants.
(i) Directors on the Effective Date of the Amendment and Restatement
of this Plan. Subject to the provisions of Section 15 hereof, there
shall be granted to each person who is a Non-Employee Director, upon
the effective date of the amendment and restatement of this Plan, an
Option to purchase 16,250 shares of the Common Stock at a per share
Option Price equal to the fair market value (as defined in Subsection
4(a)(iv) below) of a share of Common Stock on such date.
(ii) Directors Elected after the Effective Date of the Amendment and
Restatement of this Plan. Subject to the provisions of Section 15
hereof, for so long as this Plan is in effect and shares are available
for the grant of Options hereunder, each person who is not otherwise an
employee of the Company, and who is first elected to the Board of
Directors after the effective date of the amendment and restatement of
this Plan, shall be granted, on the date of his election, an Option to
purchase 25,000 shares of Common Stock (such number of shares being
subject to the adjustments provided in Section 11 of this Plan) at a
per share Option Price equal to the fair market value of a share of
Common Stock on such date.
(iii) Annual Grants. On December 31 of each year that this Plan is
in effect (commencing with December 31, 1997), each Non-Employee
Director who is in office on that day (provided that such Non-Employee
Director has served as a director for at least six months prior to such
date) shall automatically receive an Option to purchase 7,500 shares of
Common Stock (such number of shares being subject to the adjustments
provided in Section 11 of this Plan) at a per share Option Price equal
to the fair market value of a share of Common Stock on such date.
(iv) Fair Market Value. For purposes of this Section 4, the "fair
market value" of a share of Common Stock as of any particular date
shall mean (i) if the Common Stock is listed or admitted to trading on
any securities exchange or on the National Association of Securities
Dealers (the "NASD") Automated Quotation System ("Nasdaq") National
Market, the closing price on such day on the principal securities
exchange or on the Nasdaq National Market on which the Common Stock is
traded or quoted, or if such day is not a trading day for such
securities exchange or the Nasdaq National Market, the closing price on
the first preceding day that was a trading day, (ii) if the Common
Stock is not then listed or admitted to trading on any securities
exchange or on the Nasdaq National Market, the closing bid price on
such day as reported by the NASD, or if no such price is reported by
the NASD for such day, the closing bid price as reported by the NASD on
the first preceding day for which such price is available, and (iii) if
the Common Stock is not then listed or admitted to trading on any
securities exchange or on the Nasdaq National Market and no such
closing bid price is reported by the NASD, as determined by the
Committee in good faith.
(v) No Discretion with Respect to Formula Grants. The selection of
Non-Employee Directors to whom Options are to be granted pursuant to
this Section 4(a), the number of shares subject to any such Option, the
exercise price of any such Option and the term of any such Option shall
be as provided herein and the Committee shall have no discretion as to
such matters.
(b)Discretionary Grants. The Committee may from time to time authorize
grants to any Non-Employee Director (provided that no such grant may be
made to a Non-Employee Director who is a member of the Committee, and that
no such grant may be made that would prevent the members of the Committee
from constituting "non-employee director" within the meaning of Rule 16b-3
or "outside directors" within the meaning of Section 162(m)) of Options to
purchase shares of Common Stock upon such terms and conditions as it may
determine in accordance with the following provisions:
-2-
(i) Each grant will specify the number of shares of Common Stock to
which the Option granted pertains.
(ii) Each grant will specify the Option Price of the Option, which
may be less than, equal to or greater than the fair market value of a
share of Common Stock on the date of grant.
(iii) Each grant may specify the required period or periods of
continuous service by the grantee with the Company and/or the other
conditions of vesting (if any) before the Option or installments
thereof will become exercisable.
(c)Outstanding Options. The amendment and restatement of this Plan
shall not affect the terms and conditions of any Options (including terms
relating to the vesting and term thereof) outstanding under this Plan on
the effective date of such amendment and restatement.
5. Vesting and Term of Options.
Each Option granted under Section 4(a) of this Plan shall vest in full and
be exercisable to purchase all of the shares of Common Stock subject to the
Option on the date on which the Option was granted, and each Option granted
under Section 4(b) of this Plan shall vest and be exercisable to purchase the
number of shares subject to the Option at such times and upon such conditions as
may be established by the Committee on the date of grant, subject in each case
to earlier termination as provided in Section 8 of this Plan. Each Option
granted under this Plan shall expire on the tenth anniversary of the date on
which the Option was granted.
6. Exercise of Options.
An optionee may exercise his Option by delivering to the Company a written
notice stating (a) that such optionee wishes to exercise such Option on the date
such notice is so delivered, (b) the number of shares of Common Stock with
respect to which such Option is to be exercised and (c) the address to which the
certificate representing such shares of stock should be mailed. To be effective,
such written notice shall be accompanied by payment of the Option Price of each
of such shares of Common Stock. Each such payment shall be made by cash,
cashier's check or bank draft drawn on a national banking association or postal
or express money order, payable to the order of the Company in United States
dollars.
Any Option granted under the Plan may be exercised by a broker-dealer
acting on behalf of an optionee if (i) the broker-dealer has received from the
optionee or the Company a duly endorsed agreement evidencing such Option and
instructions signed by the optionee requesting the Company to deliver the shares
of Common Stock subject to such Option to the broker-dealer on behalf of the
Participant and specifying the account into which such shares should be
deposited, (ii) adequate provision has been made with respect to the payment of
any withholding taxes due on such exercise and (iii) the broker-dealer and the
optionee have otherwise complied with Section 220.3(e)(4) of Regulation T, 12
CFR Part 220.
As promptly as practicable after the receipt by the Company, in the form
required by the foregoing provisions of this Section 6, of (a) such written
notice from the optionee and (b) payment, of the Option Price of the shares of
stock with respect to which such Option is to be exercised, the Company shall
deliver to such optionee a certificate representing the number of shares of
stock with respect to which such Option has been so exercised registered in the
name of such optionee, provided that such delivery shall be considered to have
been made when such certificate shall have been mailed, postage prepaid, to such
optionee at the address specified for such purpose in such written notice from
the optionee to the Company.
-3-
7. Transferability of Options.
Options shall not be transferable by the optionee otherwise than by will
or under the laws of descent and distribution.
8. Termination.
Except as may be otherwise expressly provided in this Plan or otherwise
determined by the Committee, each Option, to the extent it shall not have been
exercised previously, shall terminate on the earliest of the following:
(a)On the last day of the 24 month period commencing on the date on
which the optionee ceases to be a member of the Company's Board of
Directors, for any reason other than the death of the optionee, during
which period the optionee shall be entitled to exercise all Options held
by the optionee on the date on which the optionee ceased to be a member of
the Company's Board of Directors which could have been exercised on such
date;
(b)On the last day of the six-month period commencing on the date of
the optionee's death while serving as a member of the Company's Board of
Directors, during which period the executor or administrator of the
optionee's estate or the person or persons to whom the optionee's Option
shall have been transferred by will or the laws of descent or
distribution, shall be entitled to exercise all Options in respect of the
number of shares that the optionee would have been entitled to purchase
had the optionee exercised such Options on the date of his death; or
(c)Ten years after the date of grant of such Option.
9. Requirements of Law.
The Company shall not be required to sell or issue any shares under any
Option if the issuance of such shares shall constitute a violation by the
optionee or the Company of any provisions of any law or regulation of any
governmental authority. Each Option granted under this Plan shall be subject to
the requirement that, if at any time the Board of Directors of the Company or
the Committee shall determine that (i) the listing, registration or
qualification of the shares subject thereto upon any securities exchange or
under any state or federal law of the United States or of any other country or
governmental subdivision thereof, (ii) the consent or approval of any
governmental regulatory body, or (iii) the making of investment or other
representations, are necessary or desirable in connection with the issue or
purchase of shares subject thereto, no such Option may be exercised in whole or
in part unless such listing, registration, qualification, consent, approval or
representation shall have been effected or obtained free of any conditions not
acceptable to the Board of Directors. Any determination in this connection by
the Committee shall be final, binding and conclusive. If the shares issuable on
exercise of an Option are not registered under the Securities Act of 1933, the
Company may imprint on the certificate for such shares the following legend or
any legend which counsel for the Company considers necessary or advisable to
comply with the Securities Act of 1933:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER THE SECURITIES LAWS
OF ANY STATE AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT UPON SUCH
REGISTRATION OR UPON RECEIPT BY THE CORPORATION OF AN OPINION OF COUNSEL
SATISFACTORY TO THE CORPORATION, IN FORM AND SUBSTANCE SATISFACTORY TO THE
CORPORATION, THAT REGISTRATION IS NOT REQUIRED FOR SUCH SALE OR TRANSFER.
The Company may, but shall in no event be obligated to, register any securities
covered hereby pursuant to the Securities Act of 1933 (as now in effect or as
hereinafter amended) and, if any shares are so registered, the Company may
remove any legend on certificates representing such shares. The Company shall
not be obligated to take any other affirmative
-4-
action to cause the exercise of an Option or the issuance of shares pursuant
thereto to comply with any law or regulation or any governmental authority.
10. No Rights as Stockholder.
No optionee shall have rights as a stockholder with respect to shares
covered by his Option until the date of issuance of a stock certificate for such
shares; and, except as otherwise provided in Section 11 hereof, no adjustment
for dividends, or otherwise, shall be made if the record date therefor is prior
to the date of issuance of such certificate.
11. Changes in the Company's Capital Structure.
The existence of outstanding Options shall not affect in any way the right
or power of the Company or its stockholders to make or authorize any of 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.
If the Company shall effect a subdivision or consolidation of shares or
other capital readjustment, the payment of a stock dividend or other increase or
reduction of the number of shares of the Common Stock outstanding, without
receiving consideration therefor in money, services or property, then (a) the
number, class and per share price of shares of stock subject to outstanding
Options hereunder shall be appropriately adjusted in such a manner as to entitle
an optionee to receive upon exercise of an Option, for the same aggregate cash
consideration, the same total number and class or classes of shares as he would
have received had he exercised his Option in full immediately prior to the event
requiring the adjustment; and (b) the number and class of shares then reserved
for issuance under this Plan and the number of shares to be subject to the
grants to be made pursuant to Section 4(a)(ii) and (iii) shall be adjusted by
substituting for the total number and class of shares of stock then reserved or
subject to grant the number and class or classes or shares of stock that would
have been received by the owner of an equal number of outstanding shares of
Common Stock as the result of the event requiring the adjustment, disregarding
any fractional shares.
If the Company merges or consolidates with another corporation, whether or
not the Company is a surviving corporation, or if the Company is liquidated or
sells or otherwise disposes of substantially all of its assets while unexercised
Options remain outstanding under this Plan, or if any "person" (as that term is
used in Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934) is or
becomes the beneficial owner, directly or indirectly, of securities of the
Company representing greater than 50% of the combined voting power of the
Company's then outstanding securities, after the effective date of such merger,
consolidation, liquidation, sale or other disposition, as the case may be, each
holder of an outstanding Option shall be entitled, upon exercise of such Option,
to receive, in lieu of shares of Common Stock, the number and class or classes
of shares of such stock or other securities or property to which such holder
would have been entitled if, immediately prior to such merger, consolidation,
liquidation, sale or other disposition, such holder had been the holder of
record of a number of shares of Common Stock equal to the number of shares as to
which such Option may be exercised.
Except as otherwise expressly provided in this Plan, the issue 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 upon 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 or price of shares of
Common Stock then subject to outstanding Options.
12. Amendment or Termination of Plan.
The Board of Directors may modify, revise or terminate this Plan at any
time and from time to time; provided, however, that without the further approval
of the holders of at least a majority of the outstanding shares of voting stock,
-5-
or if the provisions of the corporate charter, bylaws or applicable state law
prescribes a greater degree of stockholder approval for this action, without the
degree of stockholder approval thus required, the Board of Directors may not (a)
materially increase the benefits accruing to participants under this Plan; (b)
materially increase the number of shares of Common Stock that may be issued
under this Plan; or (c) materially modify the requirements as to eligibility for
participation in this Plan, unless, in each such case, the Board of Directors of
the Company shall have obtained an opinion of legal counsel to the effect that
stockholder approval of the amendment is not required (x) by law, (y) by the
rules and regulations of, or any agreement with, the National Association of
Securities Dealers, Inc. or (z) to make available to the optionee with respect
to any Option granted under this Plan the benefits of Rule 16b-3 under the
Securities Exchange Act of 1934 (the "1934 Act"), or any similar or successor
rule. In addition, this Plan may not be amended more than once every six months
with respect to the plan provisions referred to in Rule 16b-3(c)(2)(ii)(A) under
the 1934 Act other than to comport with changes in the Internal Revenue Code of
1986, as amended, the Employee Retirement Income Security Act of 1974, as
amended, or the rules thereunder. All Options granted under this Plan shall be
subject to the terms and provisions of this Plan and any amendment, modification
or revision of this Plan shall be deemed to amend, modify or revise all Options
outstanding under this Plan at the time of such amendment, modification or
revision. If this Plan is terminated by action of the Board of Directors, all
outstanding Options may be terminated.
13. Written Agreement.
Each Option granted hereunder shall be embodied in a written option
agreement, which shall be subject to the terms and conditions prescribed above,
and shall be signed by the optionee and by the appropriate officer of the
Company for and in the name and on behalf of the Company. Such an option
agreement shall contain such other provisions as the Committee in its discretion
shall deem advisable.
14. Indemnification of Committee and Board of Directors.
The Company shall, to the fullest extent permitted by law, indemnify,
defend and hold harmless any person who at any time is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding (whether civil, criminal, administrative or investigative) in any way
relating to or arising out of this Plan or any Option or Options granted
hereunder by reason of the fact that such person is or was at any time a
director of the Company or a member of the Committee against judgments, fines,
penalties, settlements and reasonable expenses (including attorney's fees)
actually incurred by such person in connection with such action, suit or
proceeding. This right of indemnification shall inure to the benefit of the
heirs, executors and administrators of each such person and is in addition to
all other rights to which such person may be entitled by virtue of the bylaws of
the Company or as a matter of law, contract or otherwise.
15. Effective Date of Amended and Restated Plan.
The amendment and restatement of this Plan shall become effective, subject
to stockholder approval, on March 12, 1997. The amendment and restatement of
this Plan, and all Options granted pursuant to the amendment and restatement of
this Plan prior to stockholder approval, shall be void and of no further force
and effect unless the amendment and restatement of this Plan shall have been
approved by the requisite vote of the stockholders entitled to vote at a meeting
of the stockholders of the Company called for such purpose prior to July 30,
1997. In the event such stockholder approval is not obtained, this Plan shall
continue in existence with the terms and conditions in effect prior to the
effective date of the amendment and restatement provided for hereby. No Option
shall be granted pursuant to this Plan on or after September 30, 2003.
-6-