IGI, INC.
1998 DIRECTORS STOCK PLAN
1. Purpose.
The purpose of the 1998 Directors Stock Plan (the "Plan") of IGI, Inc. (the
"Company") is to provide for the payment of fees to the outside (non-employee)
Directors of the Company in Common Stock of the Company in lieu of cash and
thereby encourage ownership in the Company by the Directors.
2. Participation in the Plan.
Directors of the Company who are not employees of the Company or any
subsidiary of the Company shall be eligible to participate in the Plan.
3. Stock Subject to the Plan.
The shares issuable under the Plan shall consist of 200,000 shares of the
Company's Common Stock, $.01 par value per share (the "Common Stock"), subject
to adjustment in the event of stock splits, reverse stock splits, stock
dividends, reorganizations, recapitalizations and similar transactions.
4. Issuance of Common Stock in Lieu of Payment of Directors Fees in Cash.
(a) Attached to the Plan as Appendix A is a schedule setting forth the
fees payable (as of the date of adoption of the Plan) to outside
Directors for their services as Directors, including fees payable for
attendance at Directors meetings (both regular and telephonic) and
committee meetings. If and when the fees payable to Directors are
revised by action of the Board of Directors of the Company, the new
fees shall be set forth in a schedule and annexed to the Plan as
amended Appendix A and shall govern the payment of fees to Directors
until any subsequent revisions are adopted by the Board of Directors.
(b) The total fees payable to the outside Directors for each calendar
quarter shall be determined on the basis of the cash fees set forth in
Appendix A. As soon as practicable after the end of each calendar
quarter, the Company shall issue to each outside Director that number
of shares of Common Stock as shall be determined by dividing
(i) the total dollar amount of fees payable to the Directors for the
applicable quarter by
(ii) the closing per share price of the Common stock on the American
Stock Exchange on the last day of the applicable quarter.
(c) The shares of Common Stock will be issued in the name of each outside
Director and the certificate for such shares shall be delivered to the
Directors as soon as practicable after the end of each calendar
quarter, together with a notification from the Company containing the
information set forth in Appendix B annexed hereto.
(d) The Company plans to register the Common Stock covered by the Plan
under the Securities Act of 1933 (the "Act") on Form S-8; but
notwithstanding such registration, Directors serving as members of the
Board at the time they wish to sell Common Stock received by them
under the Plan shall be subject to the volume and other limitations
contained in Rule 144 promulgated under the Act.
(e) The shares of Common Stock received by Directors pursuant to the Plan
shall be deemed to be compensation for services and therefore subject
to ordinary income taxes and will be reported to the Internal Revenue
Service on Form 1099 or such other appropriate Internal Revenue
Service form.
(f) The rights and benefits under the Plan are expressly provided to
substitute Common Stock for cash payment of Directors fees, and the
Plan shall be in addition to any other rights and benefits to which
the Directors are entitled under any other plans of the Company,
including any stock option plan for Directors currently in effect or
adopted in the future.
5. The Effective Date and Duration of the Plan.
(a) The Plan shall become effective when adopted by the Board of Directors
and shall also apply to any past Directors fees earned by Directors
which were unpaid by the Company at the time that the Plan was so
adopted by the Board.
(b) The Plan shall continue to apply to all fees earned by Directors from
and after the date of its adoption by the Board of Directors until
terminated by action of the Board of Directors or otherwise amended by
the Board of Directors.
6. Governing Law.
The Plan shall be governed by the laws of the State of Delaware.
Approved by the Board of Directors of IGI
on October 19, 1998.
2
APPENDIX A
SCHEDULE OF DIRECTORS FEES
The following sets forth the amount of fees payable to outside Directors of
IGI, Inc. for their services as Directors:
Event Fee
----- ---
Scheduled Directors Meeting $2,000
Telephonic Directors Meeting 1,000
Committee Meeting Held on Same 500
Day as Directors Meeting
Committee Meeting Not Held on 1,000
Same Day as Directors Meeting
Annual Fee for Chairman of the 5,000
Audit Committee
Annual Fee for Chairman of the 4,000
Compensation Committee
Annual Fee for Chairman of a 4,000
Special Committee
APPENDIX B
IGI LETTERHEAD
Date
To: Name and Address of Director
Dear _______:
Today IGI, Inc. has requested its Stock Transfer Agent to issue you a
certificate representing _____ shares of IGI, Inc. Common Stock in payment of
the Directors fees to which you are entitled for the calendar quarter ended
______________, 19__. The following details the fees to which you are entitled
for the quarter, amounting in the aggregate to $_____, and these fees have been
converted into shares of IGI Common Stock using the quarter end closing price on
the American Stock Exchange, which was $____.
Attendance at Meetings of the Board of Directors $4,000
($2,000 per meeting - 4/20, 6/18)
Attendance at Telephonic Board of Directors Meetings 1,000
($1,000 per meeting - 5/25)
Attendance at Compensation Committee Meetings 500
($500 per meeting held the same date as the Board
meeting - 4/20)
Attendance at Compensation Committee Meeting 1,000
($1,000 per meeting held on non-Board meeting date -5/31)
Annual Fee for services as Chairman of the Audit 1,250
-----
Committee (1/4 of $5,000 Annual Fee - $1,250)
Total Due $7,750