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EXHIBIT 10.1
ALTEON INC.
AMENDED AND RESTATED
1987 STOCK OPTION PLAN
1. PURPOSE. This Stock Option Plan (this "Plan") was established
to provide incentives for selected persons to promote the financial success and
progress of Alteon Inc. (the "Company") by granting such persons options to
purchase shares of stock of the Company.
2. ADOPTION AND SHAREHOLDER APPROVAL. This Plan became effective
on December 10, 1987, the date that it was adopted by the Board of Directors
(the "Board") of the Company. This Plan was approved by the shareholders of
the Company within twelve months before or after the date this Plan was adopted
by the Board. This Plan was amended by the shareholders of the Company, to
increase the maximum number of shares that may be granted pursuant to this
Plan, on June 15, 1988, June 23, 1989, December 12, 1990 and June 19, 1991.
This Plan was amended and restated on March 1, 1994 to (i) increase the maximum
number of shares that may be granted pursuant to this Plan, and (ii) provide
for the issuance of options hereunder in compliance with Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, as amended, or any successor thereto
("Rule 16b-3"). The increase in the maximum number of shares was approved by
the shareholders of the Company on June 7, 1994. This Plan was further amended
by the Board on June 7, 1994 to allow for limited transferability of options
and for the
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issuance of options to certain eligible parties at an exercise price not less
than 85% of the fair market value of the underlying shares and on December 17,
1996 to provide for the issuance of options hereunder in compliance with Rule
16b-3, as amended.
3. TYPES OF OPTIONS AND SHARES. Options granted under this Plan
(the "Options") may be either (a) incentive stock options ("ISOs") within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code") (or Section 422A with respect to Options issued before such Section's
termination), or (b) nonqualified stock options ("NQSOs"), as designated at the
time of grant. The shares of stock that may be purchased upon exercise of
Options granted under this Plan (the "Shares") are shares of the common stock
of the Company.
4. NUMBER OF SHARES. The maximum number of Shares that may be
issued pursuant to Options granted under this Plan is 4,192,000 Shares. Such
number of Shares shall be subject to adjustment as provided in this Plan. If
any Option is terminated in whole or in part for any reason without being
exercised in whole or in part, the Shares thereby released from such Option
shall be available for purchase under other Options subsequently granted under
this Plan. At all times during the term of this Plan, the Company shall
reserve and keep available such number of Shares as shall be required to
satisfy the requirements of outstanding Options under this Plan.
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5. ADMINISTRATION OF THE PLAN: EMPLOYEES, OFFICERS, CONSULTANTS
AND INDEPENDENT CONTRACTORS.
(a) Procedure.
(i) Administration With Respect to Directors and
Officers. With respect to grants of Options to employees who are also officers
or directors of the Company, this Plan shall be administered, and grants of
Options shall be approved, by (A) the Board or (B) a committee comprised of
directors of the Company designated by the Board to administer this Plan (a
"Committee" is hereinafter defined as any committee appointed by the Board in
accordance with this Section), which Committee shall be constituted in such a
manner as to satisfy the legal requirements relating to the administration of
stock option plans, if any, of Delaware corporate and securities laws, and of
the Code (the "Applicable Laws") and in such a manner as to permit transactions
under the Plan to qualify for exemption from the provisions of Section 16(b) of
the Exchange Act pursuant to Rule 16b-3. Once appointed, such Committee shall
continue to serve in its designated capacity until otherwise directed by the
Board. From time to time, the Board may increase the size of the Committee and
appoint additional members thereof, remove members (with or without cause) and
appoint new members in substitution therefor, fill vacancies, however caused,
and remove all members of the Committee and thereafter directly administer this
Plan.
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(ii) Multiple Administrative Bodies. This Plan
may be administered by different bodies with respect to directors, non-director
officers and employees, consultants and independent contractors who are neither
directors nor officers.
(iii) Administration With Respect to Consultants,
Independent Contractors and Other Employees. With respect to grants of Options
to employees, consultants or independent contractors who are neither directors
nor officers of the Company, this Plan shall be administered by (A) the Board
or (B) a Committee designated by the Board, which Committee shall be
constituted in such a manner as to satisfy the Applicable Laws. Once
appointed, such Committee shall continue to serve in its designated capacity
until otherwise directed by the Board. From time to time, the Board may
increase the size of the Committee and appoint additional members thereof,
remove members (with or without cause) and appoint new members in substitution
therefor, fill vacancies, however caused, and remove all members of the
Committee and thereafter directly administer this Plan, all to the extent
permitted by the Applicable Laws.
(b) Additional Powers of the Board or Committee. Except
as provided in Section 6 with respect to Options granted to directors of the
Company who are not compensated as employees or consultants ("Non-Compensated
Directors"), in addition to those powers otherwise conferred upon the Board or
Committee by this Plan, and subject to the provisions of this Plan and in the
case of
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a Committee, the specific duties delegated by the Board to such Committee, the
Board or the Committee appointed pursuant to this Section (the "Administrator")
shall have the authority, in its discretion:
(i) to determine the fair market value of the
Shares, in accordance with the following: (A) If the Shares are listed on the
National Market System of the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") System the option price of such Option shall be
the fair market value of the Common Stock of the Company on the date of grant
which shall be equal to the NASDAQ-quoted closing price of the common stock on
the date of grant, except that if the common stock did not trade on the date of
grant, then the option price shall be equal to the NASDAQ-quoted closing price
on the last business day prior to the date of grant on which the common stock
traded; or (B) In the absence of an established market for the Shares, the fair
market value thereof shall be determined in good faith by the Board.
(ii) to determine whether and to what extent Options
are granted hereunder;
(iii) to determine the terms and conditions, not
inconsistent with the terms of this Plan, of any Option granted hereunder
(including, but not limited to, the share price, transferability, and any
restriction or limitation or waiver of forfeiture restrictions regarding any
Option and/or Shares relating thereto, based in each case on such factors as
the Administrator shall determine, in its sole discretion);
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(iv) to determine whether and under what
circumstances the Administrator may offer to buy out, for a payment in cash or
Shares, an Option previously granted, based on such terms and conditions as the
Committee shall establish and to communicate to the Optionee at the time that
such offer is made;
(v) to determine whether, to what extent and under
what circumstances Shares and other amounts payable with respect to an Option
under this Plan shall be deferred either automatically or at the election of
the participant (including providing for and determining the amount, if any, of
any deemed earnings on any deferred amount during any deferral period); and
(vi) to reduce the exercise price of any Option to
any then permissible exercise price if such permissible exercise price is lower
than the exercise price determined on the date the Option was granted.
(c) Effect of Administrator's Decision. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all Optionees and any other holders of any Options.
6. FORMULA AWARDS: NON-COMPENSATED DIRECTORS.
(a) Date of Grant and Number of Shares. With respect to
grants of Options to Non-Compensated Directors, NQSOs in the amount of 33,600
Shares shall be made to each Non-Compensated Director on the date of such
Non-Compensated Director's election or reelection to the Board. If a
Non-Compensated Director to whom NQSO's are to be granted pursuant to this
Section is serving on the Board at the
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time of such election or reelection by virtue of having been appointed to the
Board to fill a vacancy or newly created directorship, the number of shares
subject to the NQSO's to be granted pursuant to this Section shall be reduced
by a number equal to 33,600 minus the product of (i) 933 and (ii) the number of
full months during which such Non-Compensated Director has served as a
director. For purposes of the preceding sentence, a month shall mean a period
of 30 consecutive days.
(b) Exercise Period and Price. Options granted to
Non-Compensated Directors shall vest in equal annual installments over the
three year period of such Non-Compensated Director's term as director such that
one-third (or 11,200 Shares) shall vest on the first anniversary of such
Non-Compensated Director's election to the Board, an additional one-third shall
vest on the second anniversary of such Non-Compensated Director's election to
the Board, and the entire Option shall become vested on the third anniversary
of such Non-Compensated Director's election to the Board. An Option granted
pursuant to this Section shall be exercisable for a period of ten years from
the date of grant at the fair market value as of the date of grant, regardless
of whether any such Non-Compensated Director later ceases to be affiliated with
the Company; provided, however, in the case of an Option granted to an
Non-Compensated Director who, at the time the Option is granted, owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any
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Parent or Subsidiary, the term of the Option shall be five years from the date
of grant thereof.
(c) Fair Market Value. For the purposes of this Section, the
fair market value of the Shares shall be determined as follows: (i) If the
Shares are listed on NASDAQ the option price of such Option shall be the fair
market value of the Common Stock of the Company on the date of grant which
shall be equal to the NASDAQ-quoted closing price of the common stock on the
date of grant, except that if the common stock did not trade on the date of
grant, then the option price shall be equal to the NASDAQ-quoted closing price
on the last business day prior to the date of grant on which the common stock
traded; or (ii) In the absence of an established market for the Shares, the
fair market value thereof shall be determined in good faith by the Board.
7. ELIGIBILITY. Options may be granted only to such employees,
officers, directors, consultants and independent contractors of the Company or
any Parent, Subsidiary or Affiliate of the Company (as defined below) as the
Administrator shall select from time to time in its sole discretion
("Optionees"), provided that only employees of the Company or a Parent or
Subsidiary of the Company shall be eligible to receive ISOs; provided, further
that Non-Compensated Directors may be granted Options only as set forth in
Section 6 above. An Optionee may be granted more than one Option under this
Plan. As used in this Plan, the following terms shall have the following
meanings:
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(a) "Parent" means any corporation (other than the Company)
in an unbroken chain of corporations ending with the Company if, at the time of
the granting of the Option, each of such corporations other than the Company
owns stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
(b) "Subsidiary" means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company if, at
the time of granting of the Option, each of the corporations other than the
last corporation in the unbroken chain owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
(c) "Affiliate" means any corporation that directly, or
indirectly through one or more intermediaries, controls or is controlled by, or
is under common control with another corporation, where "control" (including
the terms "controlled by" and "under common control with") means the
possession, direct or indirect, of the power to cause the direction of the
management and policies of the corporation, whether through the ownership of
voting securities, by contract or otherwise.
8. TERMS AND CONDITIONS OF OPTIONS. Except as provided in
Section 6 with respect to Options granted to Non-Compensated Directors, the
Administrator shall determine whether each Option is to be an ISO or an NQSO,
the number of Shares for which the Option shall be granted, the exercise price
of the Option, the periods
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during which the Option may be exercised, and all other terms and conditions of
the Option, subject to the following terms and conditions:
(a) Form of Option Grant. Each Option granted under this
Plan shall be evidenced by a written Stock Option Grant ("Grant") in such form
(which need not be the same for each Optionee) as the Administrator shall from
time to time approve, which Grant shall comply with and be subject to the terms
and conditions of this Plan.
(b) Exercise Price. The exercise price of a NQSO granted to
eligible parties other than officers, directors and persons owning 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 (a "Ten Percent Shareholder") shall
be not less than 85% of the fair market value of the Shares at the time that
the Option is granted, as determined by the Administrator in good faith. The
exercise price of (i) an ISO or (ii) a NQSO granted to an officer or director
of the Company shall be not less than the fair market value of the Shares, at
the time that the Option is granted, as determined by the Administrator in good
faith. The exercise price of any Option granted to a Ten Percent Shareholder
shall not be less than 110% of the fair market value of the Shares at the time
of the Grant, as determined by the Administrator in good faith.
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(c) Exercise Period. Options shall be exercisable within the
times or upon the events determined by the Administrator as set forth in the
Grant provided, however, that no Option shall be exercisable after the
expiration of ten years from the date the Option is granted, and provided
further that no Option granted to a Ten Percent Shareholder shall be
exercisable after the expiration of five years from the date the Option is
granted.
(d) Limitations on ISOs. The aggregate fair market value
(determined as of the time an Option is granted) of stock with respect to which
ISOs are exercisable for the first time by an optionee during any calendar year
under this Plan or under any other incentive stock option plan of the Company
(or any Parent or Subsidiary of the Company) shall not exceed $100,000.
(e) Date of Grant. The date of grant of an Option shall be
the date on which the Administrator makes the determination to grant such
Option unless otherwise specified by the Administrator. The Grant representing
the Option shall be delivered to the Optionee within a reasonable time after
the granting of the Option.
(f) Rule 16b-3. Shares acquired pursuant to Options granted
to persons subject to Section 16(b) of the Exchange Act shall not be sold or
otherwise disposed of for a period of six (6) months following the date of the
Grant. Grants of options to persons subject to Section 16(b) of the Exchange
Act must qualify for exemption from Section 16(b) of the Exchange Act pursuant
to Rule 16b-3. Options granted to such persons shall contain such additional
conditions or restrictions as may be required thereunder
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to qualify for the maximum exemption from Section 16 of the Exchange Act with
respect to Plan transactions.
9. EXERCISE OF OPTIONS.
(a) Notice. Options may be exercised only by delivery to the
Company of a written notice and exercise agreement in a form approved by the
Administrator, stating the number of Shares being purchased, the restrictions
imposed on the Shares and such representations and agreements regarding the
Optionee's investment intent and access to information as may be required by
the Company to comply with applicable securities laws, together with payment in
full of the exercise price for the number of Shares being purchased.
(b) Payment. Payment for the Shares may be made (i) in cash
(by check), (ii) by surrender of shares of common stock of the Company having a
fair market value equal to the exercise price of the Option; or (iii) by any
combination of the foregoing where approved by the Administrator in its sole
discretion.
(c) Withholding Taxes. Prior to issuance of the Shares upon
exercise of an Option, the Optionee shall pay or make adequate provision for
any federal or state withholding obligations of the Company, if applicable.
(d) Limitations on Exercise. Notwithstanding the exercise
periods set forth in the Grant, exercise of an Option shall always be subject
to the following limitations:
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(i) An Option shall not be exercisable unless such
exercise is in compliance with the Securities Act of 1933, as amended, and all
applicable state securities laws, as they are in effect on the date of
exercise.
(ii) The Administrator may specify a reasonable
minimum number of Shares that may be purchased on any exercise of an Option,
provided that such minimum number will not prevent the Optionee from exercising
the full number of Shares as to which the Option is then exercisable.
10. TRANSFERABILITY OF OPTIONS. Except as otherwise provided in
this Section 10, Options may not be sold, pledged, assigned, hypothecated,
transferred or disposed of in any manner other than by will or by the laws of
descent and distribution, and, during the lifetime of the Optionee, shall be
exercisable only by the Optionee. If the Administrator so determines, NQSO's
may be transferable to (A) the Optionee's spouse, parents, siblings, children
or grandchildren (including stepparents, stepsiblings, stepchildren, and
stepgrandchildren), (B) trusts for the benefit of the Optionee and/or such
family members, and (C) partnerships whose only partners are the Optionee
and/or such family members, provided that (i) no consideration is paid for such
transfer, (ii) the terms and conditions of the Option which are applicable to
the Optionee prior to the transfer of the Option shall continue to apply to the
transferee; and (iii) the Grant pertaining to the Option shall set forth the
applicable transfer restrictions.
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11. PRIVILEGES OF STOCK OWNERSHIP. No Optionee shall have any of
the rights of a shareholder with respect to any Shares subject to an Option
until the Option has been validly exercised. No adjustment shall be made for
dividends or distributions or other rights for which the record date is prior
to the date of exercise, except as provided in this Plan. The Company shall
provide to each Optionee a copy of the annual financial statements of the
Company, at such time after the close of each fiscal year of the Company as
they are released by the Company to its shareholders.
12. ADJUSTMENT OF OPTION SHARES. In the event that the number of
outstanding shares of common stock of the Company is changed by a stock
dividend, stock split, reverse stock split, combination, reclassification or
similar change in the capital structure of the Company without consideration,
the number of Shares available under this Plan and the number of Shares subject
to outstanding Options and the exercise price per share of such Options shall
be proportionately adjusted, subject to any required action by the Board or
shareholders of the Company and compliance with applicable securities laws;
provided, however, that no certificate or scrip representing fractional shares
shall be issued upon exercise of any Option and any resulting fractions of a
Share shall be ignored.
13. NO OBLIGATION TO EMPLOY. Nothing in this Plan or any Option
granted under this Plan shall confer on any Optionee any right to continue in
the employ of the Company or any Parent, Subsidiary or Affiliate of the Company
or limit in any way the
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right of the Company or any Parent, Subsidiary or Affiliate of the Company to
terminate the Optionee's employment at any time, with or without cause.
14. COMPLIANCE WITH LAWS. The grant of Options and the issuance
of Shares upon exercise of any Options shall be subject to and conditioned upon
compliance with all applicable requirements of law, including without
limitation compliance with the Securities Act of 1933, as amended, compliance
with all other applicable state securities laws and compliance with the
requirements of any stock exchange on which the Shares may be listed. The
Company shall be under no obligation to register the Shares with the Securities
and Exchange Commission or to effect compliance with the registration or
qualification requirements of any state securities laws or stock exchange.
15. RESTRICTIONS ON SHARES. At the discretion of the
Administrator, the Company may reserve to itself or its assignee(s) in the
Grant (a) a right of first refusal to purchase any Shares that an Optionee (or
a subsequent transferee) may propose to transfer to a third party, and (b) a
right to repurchase any or all Shares held by an Optionee upon the Optionee's
termination of employment or service with the Company or its Parent, Subsidiary
or Affiliate for any reason within a specified time as determined by the
Administrator at the time of grant at (i) the Optionee's original purchase
price (provided that the right to repurchase at such price shall lapse at the
rate of at least 20% per year from the date of grant), (ii) the fair market
value of such Shares as
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determined by the Administrator in good faith or (iii) a price determined by a
formula or other provision set forth in the Grant.
16. ASSUMPTION OF OPTIONS BY SUCCESSORS. In the event of a
dissolution or liquidation of the Company, a merger in which the Company is not
the surviving corporation, a transaction in which 100% of the then outstanding
voting stock is sold or otherwise transferred, or the sale of substantially all
of the assets of the Company, any or all outstanding Options shall,
notwithstanding any contrary terms of the Grant, accelerate and become
exercisable in full at least ten days prior to (and shall expire on) the
consummation of such dissolution, liquidation, merger, sale of stock or sale of
assets at such times and on such conditions as the Administrator shall
determine unless the successor corporation assumes the outstanding Options or
substitutes substantially equivalent options. The aggregate fair market value
(determined at the time an Option is granted) of stock with respect to ISOs
which first become exercisable in the year of such dissolution, liquidation,
merger, sale of stock or sale of assets cannot exceed $100,000. Any remaining
accelerated ISOs shall be NQSOs.
17. AMENDMENT OR TERMINATION OF PLAN. The Administrator may at
any time terminate or amend this Plan in any respect (including, but not
limited to, any form of Grant, agreement or instrument to be executed pursuant
to this Plan), provided, however, that the Administrator shall not, without the
approval of the shareholders of the Company, increase the total number of
Shares available under this Plan (except by operation of the provisions of this
Plan) or
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change the class of persons eligible to receive Options. In any case, no
amendment of this Plan may adversely affect any then outstanding Options or any
unexercised portions thereof without the written consent of the Optionee.
18. TERM OF PLAN. Options may be granted pursuant to this Plan
from time to time within a period of ten years from the date this Plan was
originally adopted by the Board of Directors.
19. EXTENSION OF TERM. Notwithstanding anything to the contrary
contained herein, the term of the Plan during which Options may be granted
hereunder shall be extended to December 31, 2007, provided after December 9,
1997, all Options granted under this Plan shall be NQSO's.
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