EXHIBIT 10.40
KINETIX PHARMACEUTICALS, INC.
AMENDED AND RESTATED 1997 EQUITY INCENTIVE PLAN
1. Purpose
The purpose of the Kinetix Pharmaceuticals, Inc. Amended and Restated 1997
Equity Incentive Plan (the "Plan") is to attract and retain key employees and
----
consultants of the Company and its Affiliates, to provide an incentive for them
to achieve long-range performance goals, and to enable them to participate in
the long-term growth of the Company by granting Awards with respect to the
Company's Common Stock. The Plan is being amended and restated as provided
herein, effective as of immediately prior to the Closing (as defined in the
Merger Agreement) of the Merger, pursuant to the Agreement and Plan of Merger by
and among the Company, Amgen Inc. ("Amgen") and Amgen Acquisition Corp. II, a
wholly owned subsidiary of Amgen ("Merger Sub"), dated October 16, 2000 (the
"Merger Agreement"), which provides for the merger of Merger Sub with and into
the Company (the "Merger") on or prior to January 31, 2001. The acceleration of
the vesting of any unvested portions of Awards held by Dr. Nicholas Lydon, Dr.
David Armistead, Nancy Stuart, Dr. Jeffrey Hsi, Dr. David Stover, and any other
"disqualified individual" as provided under Section 280G of the Code, pursuant
to Section 7(e) hereof, as amended, is subject to the approval of holders of
capital stock of the Company owning more than 75% of the voting power of all the
outstanding capital stock of the Company immediately before the Merger in
accordance with Section 280G(b)(5)(b) of the Code.
2. Administration
The Plan shall be administered by the Committee. The Committee shall select
the Participants to receive Awards and shall determine the terms and conditions
of the Awards. The Committee shall have authority to adopt, alter and repeal
such administrative rules, guidelines and practices governing the operation of
the Plan as it shall from time to time consider advisable, and to interpret the
provisions of the Plan. The Committee's decisions shall be final and binding. To
the extent permitted by applicable law, the Committee may delegate to one or
more executive officers of the Company the power to make Awards to Participants
and all determinations under the Plan with respect thereto, provided that the
Committee shall fix the maximum amount of such Awards for all such Participants
and a maximum for any one Participant.
3. Eligibility
All employees and consultants of the Company or any Affiliate capable of
contributing significantly to the successful performance of the Company, other
than a person who has irrevocably elected not to be eligible, are eligible to be
Participants in the Plan. Incentive Stock Options may be granted only to persons
eligible to receive such Options under the Code.
1
4. Stock Available for Awards
(a) Amount. Subject to adjustment under subsection (b), Awards may be made
under the Plan for up to 10,144,483 shares of Common Stock. If any Award expires
or is terminated unexercised or is forfeited or settled in a manner that results
in fewer shares outstanding than were awarded, the shares subject to such Award,
to the extent of such expiration, termination, forfeiture or decrease, shall
again be available for award under the Plan. Common Stock issued through the
assumption or substitution of outstanding grants from an acquired company shall
not reduce the shares available for Awards under the Plan. Shares issued under
the Plan may consist in whole or in part of authorized but unissued shares or
treasury shares.
(b) Adjustments Upon Certain Transactions. In the event that any dividend
or other distribution (whether in the form of cash, Common Stock, other
securities, or other property), recapitalization, reclassification, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, liquidation, dissolution, or sale, transfer, exchange
or other disposition of all or substantially all of the asserts of the Company,
or exchange of Common Stock or other securities of the Company (other than
pursuant to the conversion of convertible securities), issuance of warrants or
other rights to purchase Common Stock or other securities of the Company, or
other similar corporate transaction or event, in the Committee's sole
discretion, affects the Common Stock, such that an adjustment is determined by
the Committee to be appropriate in order to prevent dilution or enlargement of
the benefits or potential benefits intended to be made available under the Plan
or with respect to Awards, then the Committee shall (subject in the case of
Incentive Stock Options to any limitation required under the Code), in such
manner as it may deem equitable, may make the following adjustments to the Plan
and with respect to any or all of the outstanding Awards:
(1) the number and kind of shares of Common Stock (or other
securities or property) with respect to which Awards may be granted under
the Plan (including, but not limited to, adjustments of the limitations in
paragraph 4(a) on the maximum number),
(2) the number and kind of shares of Common Stock (or other
securities or property) subject to outstanding Awards, including by
providing, either by the terms of such Awards or by action taken prior to
the occurrence of such transaction or event, that upon such event, such
Award shall be assumed by a successor or survivor corporation, or a parent
or subsidiary thereof, or shall be substituted for by similar Awards
covering the stock of a successor or survivor corporation, or a parent or
subsidiary thereof, with appropriate adjustments as to the number and kind
of shares and prices, and
(3) the grant or exercise price with respect to any Award.
(c) Effect of Adjustments. Any adjustments made by the Committee under
paragraphs 4(b)(1) and 4(b)(2) shall be final, binding and conclusive on all
persons.
2
5. Stock Options
(a) Grant of Options. Subject to the provisions of the Plan, the Committee
may grant options ("Options") to purchase shares of Common Stock complying with
-------
the requirements of Section 422 of the Code or any successor provision and any
regulations thereunder ("Incentive Stock Options") and (ii) not intended to
-----------------------
comply with such requirements ("Nonstatutory Stock Options"). The Committee
--------------------------
shall determine the number of shares subject to each Option and the exercise
price therefor, which in the case of Incentive Stock Options shall not be less
than 100% of the Fair Market Value of the Common Stock on the date of grant. No
Incentive Stock Option may be granted hereunder more than ten years after the
effective date of the Plan.
(b) Terms and Conditions. Each Option shall be exercisable at such times
and subject to such terms and conditions as the Committee may specify in the
applicable grant or thereafter. The Committee may impose such conditions with
respect to the exercise of Options, including conditions relating to applicable
federal or state securities laws, as it considers necessary or advisable.
(c) Payment. Payment for shares to be delivered pursuant to any exercise
of an Option may be made in whole or in part in cash or, to the extent permitted
by the Committee at or after the grant of the Option, by delivery of a note or
other commitment satisfactory to the Committee or shares of Common Stock owned
by the optionee, including Restricted Stock, or by retaining shares otherwise
issuable pursuant to the Option, in each case valued at their Fair Market Value
on the date of delivery or retention, or such other lawful consideration as the
Committee may determine.
6. Restricted Stock
(a) Grant of Restricted Stock. Subject to the provisions of the Plan, the
Committee may grant shares of Common Stock subject to forfeiture ("Restricted
----------
Stock") and determine the duration of the period (the "Restricted Period")
- ----- -----------------
during which, and the conditions under which, the shares may be forfeited to the
Company and the other terms and conditions of such Awards. Shares of Restricted
Stock may be issued for no cash consideration, such minimum consideration as may
be required by applicable law or such other consideration as the Committee may
determine.
(b) Restrictions. Shares of Restricted Stock may not be sold, assigned,
transferred, pledged or otherwise encumbered, except as permitted by the
Committee, during the Restricted Period. Shares of Restricted Stock shall be
evidenced in such manner as the Committee may determine. Any certificates
issued in respect of shares of Restricted Stock shall be registered in the name
of the Participant and unless otherwise determined by the Committee, deposited
by the Participant, together with a stock power endorsed in blank, with the
Company. At the expiration of the Restricted Period, the Company shall deliver
such certificates to the Participant or if the Participant has died, to the
Participant's Designated Beneficiary.
3
7. General Provisions Applicable to Awards
(a) Documentation. Each Award under the Plan shall be evidenced by a
writing delivered to the Participant specifying the terms and conditions thereof
and containing such other terms and conditions not inconsistent with the
provisions of the Plan as the Committee considers necessary or advisable to
achieve the purposes of the Plan or to comply with applicable tax and regulatory
laws and accounting principles.
(b) Committee Discretion. Each type of Award may be made alone, in
addition to or in relation to any other Award. The terms of each type of Award
need not be identical, and the Committee need not treat Participants uniformly.
Except as otherwise provided by the Plan or a particular Award, any
determination with respect to an Award may be made by the Committee at the time
of grant or at any time thereafter.
(c) Dividends and Cash Awards. In the discretion of the Committee, any
Award under the Plan may provide the Participant with (i) dividends or dividend
equivalents payable currently or deferred with or without interest and (ii) cash
payments in lieu of or in addition to an Award.
(d) Termination of Employment. The Committee shall determine the effect on
an Award of the disability, death, retirement or other termination of employment
of a Participant and the extent to which, and the period during which, the
Participant's legal representative, guardian or Designated Beneficiary may
receive payment of an Award or exercise rights thereunder.
(e) Change in Control.
(1) Notwithstanding anything to the contrary in this Plan, in the
event of a Change in Control (as hereinafter defined), then, to the extent
permitted by applicable law: (i) the time during which Awards become vested
shall automatically be accelerated so that the unvested portions of all Awards
shall be vested prior to the Change in Control and (ii) the time during which
the Options may be exercised shall automatically be accelerated to immediately
prior to the Change in Control. Upon and following the acceleration of the
vesting and exercise periods, the Award may be: (x) exercised (with respect to
Options) or, if the surviving or acquiring corporation agrees to assume the
Awards or substitute similar stock awards, (y) assumed; or (z) replaced with
substitute stock awards. Options not exercised, substituted or assumed prior to
or upon the Change in Control shall be terminated.
(2) For purposes of the Plan, subject to Section 7(e)(3) below, a
"Change of Control" shall be deemed to have occurred at any of the following
times:
(i) upon the acquisition (other than from the Company) by any person,
entity or "group," within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act (excluding, for this purpose, the Company or its Affiliates, or any
employee benefit plan of the Company or its Affiliates which acquires beneficial
ownership of voting securities of the Company), of
4
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of fifty percent (50%) or more of either the then outstanding
shares of Common Stock or the combined voting power of the Company's then
outstanding voting securities entitled to vote generally in the election of
directors; or
(ii) at the time individuals who, as of the Effective Time,
constitute the Board (the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board, provided that any person becoming a director
subsequent to the Effective Time, whose election, or nomination for election by
the Company's stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (other than an election or
nomination of an individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the election of the
directors of the Company, as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Exchange Act) shall be, for purposes of the Plan,
considered as though such person were a member of the Incumbent Board; or
(iii) immediately prior to the consummation by the Company of a
reorganization, merger, consolidation, (in each case, with respect to which
persons who were the stockholders of the Company immediately prior to such
reorganization, merger or consolidation do not, immediately thereafter, own more
than fifty percent (50%) of the combined voting power entitled to vote generally
in the election of directors of the reorganized, merged or consolidated
company's then outstanding voting securities) or a liquidation or dissolution of
the Company or of the sale of all or substantially all of the assets of the
Company; or
(iv) the occurrence of any other event which the Incumbent Board in
its sole discretion determines constitutes Change of Control.
(3) For purposes of any Award granted pursuant to (S)6(e) of the
Merger Agreement, a "Change of Control" shall not be deemed to have occurred
upon the Closing of the Merger or the Upstream Merger (as defined in the Merger
Agreement) or as a result of any transaction or event contemplated in the Merger
Agreement.
(f) Loans. The Committee may authorize the making of loans or cash
payments to Participants in connection with the grant or exercise of any Award
under the Plan, which loans may be secured by any security, including Common
Stock, underlying or related to such Award (provided that the loan shall not
exceed the Fair Market Value of the security subject to such Award), and which
may be forgiven upon such terms and conditions as the Committee may establish at
the time of such loan or at any time thereafter.
(g) Withholding Taxes. The Participant shall pay to the Company, or make
provision satisfactory to the Committee for payment of, any taxes required by
law to be withheld in respect of Awards under the Plan no later than the date of
the event creating the tax liability. In the Committee's discretion, such tax
obligations may be paid in whole or in part in shares of Common Stock, including
shares retained from the Award creating the tax obligation, valued at
5
their Fair Market Value on the date of delivery, but in no event greater than
the amount of the Company's minimum statutory withholding rates for federal,
state, local and foreign tax purposes and for payroll taxes that are applicable
to supplemental taxable income. The Company and its Affiliates may, to the
extent permitted by law, deduct any such tax obligations from any payment of any
kind otherwise due to the Participant.
(h) Foreign Nationals. Awards may be made to Participants who are foreign
nationals or employed outside the United States on such terms and conditions
different from those specified in the Plan as the Committee considers necessary
or advisable to achieve the purposes of the Plan or to comply with applicable
laws.
(i) Amendment of Award. The Committee may amend, modify or terminate any
outstanding Award, including substituting therefor another Award of the same or
a different type, changing the date of exercise or realization and converting an
Incentive Stock Option to a Nonstatutory Stock Option, provided that the
Participant's consent to such action shall be required if the action, taking
into account any related action, would adversely affect the Participant.
(j) Qualified Domestic Relations Orders.
(1) Anything in the Plan to the contrary notwithstanding, rights under
Awards may be assigned to an Alternate Payee to the extent that a QDRO so
provides. (The terms "Alternate Payee" and "QDRO" are defined in paragraph
12(c) below.) The assignment of an Award to an Alternate Payee pursuant to a
QDRO shall not be treated as having caused a new grant. If an Award is assigned
to an Alternate payee, the Alternate Payee generally has the same rights as the
grantee under the terms of the Plan; provided however, that (i) the Award shall
be subject to the same vesting terms and exercise period as if the Award were
still held by the grantee, and (ii) an Alternate Payee may not transfer an
Award.
(2) In the event of the Plan administrator's receipt of a domestic
relations order or other notice of adverse claim by an Alternate Payee of a
grantee of an Award, transfer of the proceeds of the exercise of such Award,
whether in the form of cash, stock or other property, may be suspended. Such
proceeds shall thereafter be transferred pursuant to the terms of a QDRO or
other agreement between the grantee and Alternate Payee. A grantee's ability to
exercise an Award may be barred if the Plan administrator received a court order
directing the Plan administrator not to permit exercise.
(3) The word "QDRO" as used in the Plan shall mean a court order (i)
that creates or recognizes the right of the spouse, former spouse or child (an
"Alternate Payee") of an individual who is granted an Award to an interest in
such Award relating to marital property rights or support obligations and (ii)
that the administrator of the Plan determines would be a "qualified domestic
relations order," as that term is defined in section 414(p) of the Code and
section 206(d) of the Employee Retirement Income Security Act ("ERISA"), but for
the fact that the Plan is not a plan described in section 3(3) of ERISA.
6
8. Certain Definitions
"Affiliate" means any business entity in which the Company owns directly or
---------
indirectly 50% or more of the total voting power or has a significant financial
interest as determined by the Committee.
"Award" means any Option or Restricted Stock granted under the Plan.
-----
"Board" means the Board of Directors of the Company.
-----
"Code" means the Internal Revenue Code of 1986, as amended from time to
----
time, or any successor law.
"Committee" means one or more committees each comprised of not less than
---------
two members of the Board appointed by the Board to administer the Plan or a
specified portion thereof. In the event no such Committee is appointed, then
"Committee" means the Board.
"Common Stock" or "Stock" means the Common Stock, $0.001 par value, of the
------------ -----
Company.
"Company" means Kinetix Pharmaceuticals, Inc., a Delaware corporation.
-------
"Designated Beneficiary" means the beneficiary designated by a Participant,
----------------------
in a manner determined by the Committee, to receive amounts due or exercise
rights of the Participant in the event of the Participant's death. In the
absence of an effective designation by a Participant, "Designated Beneficiary"
----------------------
means the Participant's estate.
"Fair Market Value" means, with respect to Common Stock or any other
-----------------
property, the fair market value of such property as determined by the Committee
in good faith or in the manner established by the Committee from time to time.
"Participant" means a person selected by the Committee to receive an Award
-----------
under the Plan.
9. Miscellaneous
(a) No Right To Employment. Nothing in the Plan or any instrument executed
or Award granted pursuant thereto shall confer upon any eligible employee,
consultant, optionee or holder of Awards under the Plan any right to continue in
the employ of the Company or any Affiliate or to continue acting as a consultant
or shall affect the right of the Company or any Affiliate to terminate the
employment or consulting relationship of any eligible employee, consultant,
optionee or holder of Awards under the Plan with or without cause, at any time
and with or without notice. In the event that a holder of Awards under the Plan
is permitted or otherwise entitled to take a leave of absence, the Company shall
have the unilateral right to (i) determine whether such leave of absence will be
treated as a termination of employment or relationship as consultant for
purposes hereof, and (ii) suspend or otherwise delay the time or
7
times at which exercisability or vesting would otherwise occur with respect to
any outstanding Awards under the Plan.
(b) No Rights As Stockholder. Subject to the provisions of the applicable
Award, no Participant or Designated Beneficiary shall have any rights as a
stockholder with respect to any shares of Common Stock to be distributed under
the Plan until he or she becomes the holder thereof. A Participant to whom
Common Stock is awarded shall be considered the holder of the Stock at the time
of the Award except as otherwise provided in the applicable Award.
(c) Effective Date. The original Plan was approved by the stockholders of
the Company and was effective as of February 7, 1997. The Amended and Restated
Plan shall be effective immediately prior to the Closing of the Merger.
(d) Amendment of Plan. The Board may amend, suspend or terminate the Plan
or any portion thereof at any time, subject to such stockholder approval as the
Board determines to be necessary or advisable to comply with any tax or
regulatory requirement.
(e) Governing Law. The provisions of the Plan shall be governed by and
interpreted in accordance with the laws of Delaware.
_________________________________________
8