Exhibit 10.14
IDEC PHARMACEUTICALS CORPORATION
1993 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
(AMENDED AND RESTATED THROUGH MARCH 21, 2001)
I. PURPOSE OF THE PLAN
This 1993 Non-Employee Directors Stock Option Plan (the "Plan") is
intended to promote the interests of IDEC Pharmaceuticals Corporation, a
Delaware corporation (the "Corporation"), by providing the non-employee members
of the Corporation's Board of Directors with the opportunity to acquire a
proprietary interest, or otherwise increase their proprietary interest, in the
Corporation as an incentive for them to remain in the service of the
Corporation.
All share numbers in this March 21, 2001 restatement reflect the
two-for-one split of the Common Stock which was effected on December 21,
1999, and a three-for-one split of the Common Stock which took effect in the
form of a stock dividend on January 18, 2001.
II. DEFINITIONS
For purposes of the Plan, the following definitions shall be in effect:
BOARD: the Corporation's Board of Directors.
CODE: the Internal Revenue Code of 1986, as amended.
COMMON STOCK: shares of the Corporation's common stock.
CHANGE IN CONTROL: a change in ownership or control of the Corporation
effected through either of the following transactions:
a. any person or related group of persons (other than
the Corporation or a person that directly or indirectly controls, is
controlled by, or is under common control with, the Corporation) who
directly or indirectly acquires beneficial ownership (within the
meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as
amended) of securities possessing fifty percent (50%) or more of the
total combined voting power of the Corporation's outstanding securities
pursuant to a tender or exchange offer made directly to the
Corporation's stockholders; or
b. there is a change in the composition of the Board
over a period of twenty-four (24) consecutive months or less such that
a majority of the Board members ceases, by reason of one or more proxy
contests for the election of Board members, to be comprised of
individuals who either (A) have been Board members continuously since
the beginning of such period or (B) have been elected or nominated for
election as Board members during such period by at least a majority of
the Board members described in clause (A) who were still in office at
the time such election or nomination was approved by the Board.
CORPORATE TRANSACTION: any of the following stockholder-approved
transactions to which the Corporation is a party:
a. a merger or consolidation in which the Corporation is
not the surviving entity, except for a transaction the principal
purpose of which is to change the State in which the Corporation is
incorporated,
b. the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation in complete
liquidation or dissolution of the Corporation, or
c. any reverse merger in which the Corporation is the
surviving entity but in which securities possessing fifty percent (50%)
or more of the total combined voting power of the Corporation's
outstanding securities are transferred to person or persons different
from those who held such securities immediately prior to such merger.
EFFECTIVE DATE: September 24, 1993, the date the Plan was originally
adopted by the Board. The Plan was subsequently approved by the Corporation's
stockholders on May 19, 1994. On January 25, 1995, the Board adopted an
amendment to the Plan which increased the number of shares of Common Stock
issuable thereunder by an additional 200,000 shares, and that amendment was
approved by the stockholders at the 1995 Annual Meeting. The Plan was
subsequently amended and restated by the Board on February 20, 1998, and such
restatement was approved by the Corporation's stockholders at the 1998 Annual
Meeting. On January 12, 2000, the Board authorized an increase of 300,000 shares
of Common Stock to the share reserve under the Plan, and that amendment was
approved by the stockholder at the 2000 Annual Meeting. On March 21, 2001, the
Board adopted this restatement of the Plan to reflect the adjustment in the
number of shares of Common Stock reserved under the Plan resulting from the
three for one stock split and the changes in the automatic grants set forth in
Section VI.A.
FAIR MARKET VALUE: the Fair Market Value per share of Common Stock is
determined in accordance with the following provisions:
a. If the Common Stock is not at the time listed or
admitted to trading on any national stock exchange but is traded on The
Nasdaq Stock Market, the Fair Market Value shall be the closing selling
price per share on the date in question, as such price is reported by
the The Nasdaq Stock Market and published in THE WALL STREET JOURNAL.
If there is no reported closing selling price for the Common Stock on
the date in question, then the closing selling price on the last
preceding date for which such quotation exists shall be determinative
of Fair Market Value.
b. If the Common Stock is at the time listed or admitted
to trading on any national stock exchange, then the Fair Market Value
shall be the closing selling price per share on the date in question on
the 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 reported sale of Common Stock on
such exchange on the date in question, then the Fair Market Value shall
be the closing selling price on the exchange on the last preceding date
for which such quotation exists.
- 2 -
HOSTILE TAKE-OVER: the direct or indirect acquisition by any person or
related group of persons (other than the Corporation or a person that directly
or indirectly controls, is controlled by, or is under common control with, the
Corporation) of beneficial ownership (within the meaning of Rule 13d-3 of the
Securities Exchange Act of 1934, as amended) of securities possessing fifty
percent (50%) or more of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made directly to
the Corporation's stockholders which the Board does not recommend such
stockholders to accept.
1934 ACT: the Securities Exchange Act of 1934, as amended.
OPTIONEE: any person to whom an option is granted under the Plan.
PERMANENT DISABILITY OR PERMANENTLY DISABLED: the inability of the
Optionee to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment expected to result in death
or to be of continuous duration of twelve (12) months or more.
SERVICE: the performance of services as a member of the Board.
TAKE-OVER PRICE: the GREATER of (a) the Fair Market Value per share of
Common Stock on the date the option is surrendered to the Corporation in
connection with a Hostile Take-Over or (b) the highest reported price per share
of Common Stock paid by the tender offeror in effecting such Hostile Take-Over.
III. ADMINISTRATION OF THE PLAN
The terms and conditions of each automatic option grant (including the
timing and pricing of the option grant) shall be determined by the express terms
and conditions of the Plan, and neither the Board nor any committee of the Board
shall exercise any discretionary functions with respect to option grants made
pursuant to the Plan.
IV. STOCK SUBJECT TO THE PLAN
A. Shares of the Corporation's Common Stock shall be
available for issuance under the Plan and shall be drawn from either the
Corporation's authorized but unissued shares of Common Stock or from reacquired
shares of Common Stock, including shares repurchased by the Corporation on the
open market. The maximum number of shares of Common Stock which may be issued
over the term of the Plan shall not exceed 3,120,000 shares1, subject to
adjustment from time to time in accordance with the provisions of this Article
IV.
- --------------------
(1) Adjusted to reflect (i) the 2-for-1 split of the Common Stock effected
by the Corporation on December 21, 1999, (ii) the 200,000 share increase
authorized by the Board on January 25, 1995 and approved by the stockholders at
the 1995 Annual Meeting, (iii) the 240,000 share increase authorized by the
Board on February 20, 1998 and approved by the stockholders at the 1998 Annual
Meeting, (iv) the 300,000-share increase authorized by the Board on January 12,
2000
(...continued)
- 3 -
B. Should one or more outstanding options under this
Plan expire or terminate for any reason prior to exercise in full, then the
shares subject to the portion of each option not so exercised shall be available
for subsequent option grants under the Plan. Unvested shares issued under the
Plan and subsequently repurchased by the Corporation, at the option exercise
price paid per share, pursuant to the Corporation's repurchase rights under the
Plan, shall be added back to the number of shares of Common Stock reserved for
issuance under the Plan and shall accordingly be available for reissuance
through one or more subsequent option grants under the Plan. Shares subject to
any option or portion thereof surrendered in accordance with Article VII shall
reduce on a share-for-share basis the number of shares of Common Stock available
for subsequent option grants under the Plan. In addition, should the exercise
price of an outstanding option under the Plan be paid with shares of Common
Stock, then the number of shares of Common Stock available for issuance under
the Plan shall be reduced by the gross number of shares for which the option is
exercised, and not by the net number of shares of Common Stock actually issued
to the option holder.
C. Should any change be made to the Common Stock
issuable under the Plan by reason of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without the Corporation's
receipt of consideration, then appropriate adjustments shall be made to (i) the
maximum number and/or class of securities issuable under the Plan, (ii) the
number and/or class of securities for which automatic option grants are to be
subsequently made per each new or continuing non-employee Board member under the
Plan, and (iii) the number and/or class of securities and price per share in
effect under each option outstanding under the Plan. Such adjustments to the
outstanding options are to be effected in a manner which shall preclude the
enlargement or dilution of rights and benefits under such options. The
adjustments determined by the Board shall be final, binding and conclusive.
V. ELIGIBILITY
A. ELIGIBLE OPTIONEES. The individuals eligible to
receive automatic option grants pursuant to the provisions of this Plan shall be
limited to (i) those individuals who are first elected or appointed as
non-employee Board members after the Effective Date, whether through appointment
by the Board or election by the Corporation's stockholders, and (ii) those
individuals who continue to serve as non-employee Board members after such
Effective Date, whether or not they commenced Board service prior to such
Effective Date. In no event, however, shall any non-employee Board member be
eligible to participate in the Plan if such individual has previously been in
the employ of the Corporation (or any parent or subsidiary corporation) at any
time after December 31, 1989. Each non-employee Board member eligible to
participate in the Plan pursuant to the foregoing criteria shall be designated
an Eligible Director for purposes of the Plan.
- --------------------
(...continued)
and approved by the stockholders at the 2000 Annual Meeting, and (v) the
3-for-1 split of the Common Stock effected by the Corporation by way of stock
dividend on January 18, 2001.
- 4 -
VI. TERMS AND CONDITIONS OF AUTOMATIC OPTION GRANTS
A. GRANT DATE. Pursuant to the terms of this March 21,
2001 restatement option grants shall be made on the dates specified below:
- Each individual who is first elected or
appointed as an Eligible Director, whether through appointment by the
Board or election by the Corporation's stockholders, on or after May
18, 2001, shall automatically be granted, on the date of such initial
election or appointment, a non-statutory stock option to purchase
35,000 shares of Common Stock.2
- On the first trading day on The Nasdaq Stock
Market in January of each calendar year (commencing with calendar year
2001), each individual who is at the time serving as an Eligible
Director shall automatically be granted on such date a non-statutory
option to purchase 10,000 shares of Common Stock2, provided such
individual has served as a Board member for a period of at least six
(6) months.
There shall be no limit on the number of 10,000-share option grants any
one Eligible Director may receive over his or her period of Board service.
Stockholder approval of the January 12, 2000 restatement at the 2000
Annual Meeting constituted pre-approval of each option grant subsequently made
pursuant to the provisions of the Plan as restated and the subsequent exercise
of that option in accordance with its terms.
B. EXERCISE PRICE. The exercise price per share of
Common Stock subject to each automatic option grant shall be equal to one
hundred percent (100%) of the Fair Market Value per share of Common Stock on the
automatic grant date.
C. PAYMENT.
The exercise price shall become immediately due upon exercise
of the option and shall be payable in one of the alternative forms specified
below:
(i) full payment in cash or check made payable
to the Corporation's order; or
(ii) full payment in shares of Common Stock held
for the requisite period necessary to avoid a charge to the
Corporation's earnings for financial-reporting purposes and valued at
Fair Market Value on the Exercise Date (as such term is defined below);
or
(iii) full payment in a combination of shares of
Common Stock held for the requisite period necessary to avoid a charge
to the Corporation's earnings for
- --------------------
(2) The restatement of the Plan on March 23, 2001 only made a partial adjustment
in the number of shares subject to future grants as a result of the January 18,
2001 stock dividend.
- 5 -
financial-reporting purposes and valued at Fair Market Value on the
Exercise Date and cash or check payable to the Corporation's order; or
(iv) to the extent the option is exercised for
vested shares, full payment through a broker-dealer sale and remittance
procedure pursuant to which the non-employee Board member (I) shall
provide irrevocable instructions to a Corporation-designated brokerage
firm to effect the immediate sale of the purchased shares and remit to
the Corporation, out of the sale proceeds available on the settlement
date, sufficient funds to cover the aggregate exercise price payable
for the purchased shares and (II) shall concurrently provide directives
to the Corporation to deliver the certificates for the purchased shares
directly to such brokerage firm in order to complete the sale
transaction.
For purposes of this subparagraph VI.C, the Exercise Date shall be the
date on which written notice of the option exercise is delivered to the
Corporation. Except to the extent the sale and remittance procedure specified
above is utilized in connection with the exercise of the option for vested
shares, payment of the option price for the purchased shares must accompany the
exercise notice. However, if the option is exercised for any unvested shares,
then the optionee must also execute and deliver to the Corporation a stock
purchase agreement for those unvested shares which provides the Corporation with
the right to repurchase, at the exercise price paid per share, any unvested
shares held by the optionee at the time of cessation of Board service and which
precludes the sale, transfer or other disposition of any shares purchased under
the option, to the extent those shares are subject to the Corporation's
repurchase right.
D. OPTION TERM. Each automatic grant under the Plan
shall have a maximum term of ten (10) years measured from the automatic grant
date.
E. EXERCISABILITY/VESTING. Each automatic grant shall be
immediately exercisable for any or all of the option shares. However, any shares
purchased under the option shall be subject to repurchase by the Corporation, at
the exercise price paid per share, upon the Optionee's cessation of Board
service prior to vesting in those shares. Each initial 35,000 share option shall
vest, and the Corporation's repurchase right shall lapse, in a series of four
(4) equal and successive annual installments over the Optionee's period of
continued service as a Board member, with the first such installment to vest
upon Optionee's completion of one (1) year of Board service measured from the
grant date. Each additional 10,000-share automatic grant shall vest, and the
Corporation's repurchase with respect thereto shall lapse, upon Optionee's
completion of one (1) year of Board service measured from the automatic grant
date. Vesting of the option shares shall be subject to acceleration as provided
in Section VI.G and Article VII. In no event, however, shall any additional
option shares vest after the Optionee's cessation of Board service.
F. NON-TRANSFERABILITY. During the lifetime of the
Optionee, each automatic option grant, together with the limited stock
appreciation right pertaining to such option, shall be exercisable only by the
Optionee and shall not be assignable or transferable by the Optionee other than
(i) a transfer of the option effected by will or by the laws of descent and
distribution following Optionee's death or (ii) a transfer of the option during
the optionee's lifetime to one or more members of the optionee's immediate
family or to a trust established exclusively for one or more such family
members, to the extent such transfer is effected pursuant to the optionee's
- 6 -
estate plan. The assigned portion may only be exercised by the person or persons
who acquire a proprietary interest in the option pursuant to the assignment. The
terms applicable to the assigned portion shall be the same as those in effect
for the option immediately prior to such assignment and shall be set forth in
such documents issued to the assignee as the Corporation may deem appropriate.
G. EFFECT OF TERMINATION OF BOARD SERVICE.
1. Should the Optionee cease to serve as a
Board member for any reason (other than death or Permanent Disability) while
holding one or more automatic option grants under the Plan, then such individual
shall have a six (6)-month period following the date of such cessation of Board
service in which to exercise each such option for any or all of the option
shares in which the Optionee is vested at the time of such cessation of Board
service. Each such option shall immediately terminate and cease to be
outstanding, at the time of such cessation of Board service, with respect to any
option shares in which the Optionee is not otherwise at that time vested.
2. Should the Optionee die within six (6)
months after cessation of Board service, then any automatic option grant held by
the Optionee at the time of death may subsequently be exercised, for any or all
of the option shares in which the Optionee is vested at the time of his or her
cessation of Board service (less any option shares subsequently purchased by the
Optionee prior to death), by the personal representative of the Optionee's
estate or by the person or persons to whom the option is transferred pursuant to
the Optionee's will or in accordance with the laws of descent and distribution.
The right to exercise each such option shall lapse upon the expiration of the
twelve (12)-month period measured from after the date of the Optionee's death.
3. Should the Optionee die or become Permanent
Disabled while serving as a Board member, then the shares of Common Stock at the
time subject to each automatic option grant held by such Optionee shall
immediately vest in full (and the Corporation's repurchase right with respect to
such shares shall terminate), and the Optionee (or the representative of the
Optionee's estate or the person or persons to whom the option is transferred
upon the Optionee's death) shall have a twelve (12)-month period following the
date of the Optionee's cessation of Board service in which to exercise such
option for any or all of those vested shares of Common Stock.
4. In no event shall any automatic grant under
this Plan remain exercisable after the expiration date of the ten (10)-year
option term. Upon the expiration of the applicable post-service exercise period
under subparagraphs 1 through 3 above or (if earlier) upon the expiration of the
ten (10)-year option term, the automatic grant shall terminate and cease to be
outstanding for any option shares in which the Optionee was vested at the time
of his or her cessation of Board service but for which such option was not
otherwise exercised.
H. STOCKHOLDER RIGHTS. The holder of an automatic option
grant shall have none of the rights of a stockholder with respect to any shares
subject to such option until such individual shall have exercised the option and
paid the exercise price for the purchased shares.
- 7 -
I. REMAINING TERMS. The remaining terms and conditions
of each automatic option grant shall be as set forth in the form Non-statutory
Stock Option Agreement attached as Exhibit A.
VII. CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE TAKE-OVER
A. In the event of any Corporate Transaction, the shares
of Common Stock at the time subject to each outstanding option but not otherwise
vested shall automatically vest in full so that each such option shall,
immediately prior to the specified effective date for the Corporate Transaction,
become fully exercisable for all of the shares of Common Stock at the time
subject to that option and may be exercised for all or any portion of such
shares as fully-vested shares of Common Stock. Immediately following the
consummation of the Corporate Transaction, each automatic option grant under the
Plan shall terminate and cease to be outstanding, except to the extent assumed
by the successor entity (or parent thereof).
B. In connection with any Change in Control of the
Corporation, the shares of Common Stock at the time subject to each outstanding
option but not otherwise vested shall automatically vest in full so that each
such option shall, immediately prior to the specified effective date for the
Change in Control, become fully exercisable for all of the shares of Common
Stock at the time subject to that option and may be exercised for all or any
portion of such shares as fully-vested shares of Common Stock. Each such option
shall remain fully exercisable for the option shares which vest in connection
with the Change in Control until the expiration or sooner termination of the
option term.
C. The Optionee shall have the right, exercisable at any
time within the thirty (30)-day period immediately following the effective date
of a Hostile Take-Over, to surrender to the Corporation each automatic option
grant held by him or her under this Plan. The Optionee shall in return be
entitled to a cash distribution from the Corporation in an amount equal to the
excess of (i) the Take-Over Price of the shares of Common Stock at the time
subject to the surrendered option (whether or not the Optionee is otherwise at
the time vested in those shares) over (ii) the aggregate exercise price payable
for such shares. Such cash distribution shall be paid within five (5) days
following the surrender of the option to the Corporation. Stockholder approval
of the January 12, 2000 restatement at the 2000 Annual Meeting constituted the
pre-approval of each option subsequently granted with such a surrender right and
the subsequent exercise of that right in accordance with the provisions of this
Section VII.C. Neither the approval of the Plan Administrator nor the consent of
the Board shall be required at the time of the actual option surrender and cash
distribution.
D. The shares of Common Stock subject to each option
surrendered in connection with the Hostile Take-Over shall not be available for
subsequent option grant under this Plan.
E. The automatic option grants outstanding under the
Plan shall in no way affect the right of the Corporation to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.
- 8 -
VIII. AMENDMENT OF THE PLAN AND AWARDS
The Board has complete and exclusive power and authority to amend or
modify the Plan (or any component thereof) in any or all respects whatsoever.
However, no such amendment or modification shall adversely affect rights and
obligations with respect to options at the time outstanding under the Plan,
unless the affected optionees consent to such amendment. In addition, certain
amendments to the Plan may require stockholder approval pursuant to applicable
law or regulation.
IX. EFFECTIVE DATE AND TERM OF PLAN
A. The Plan became effective immediately upon adoption
by the Board on September 14, 1993 and was approved by the Corporation's
stockholders at the 1994 Annual Meeting. On January 25, 1995, the Board adopted
an amendment to the Plan which increased the number of shares of Common Stock
issuable thereunder by an additional 200,000 shares, and that amendment was
approved by the stockholders at the 1995 Annual Meeting.
B. On February 20, 1998, the Board adopted a series of
amendments to the Plan (the "1998 Amendments") which (i) increased the number of
shares of Common Stock reserved for issuance over the term of the Plan by an
additional 240,000 shares, (ii) allowed unvested shares issued under the Plan
and subsequently repurchased by the Corporation at the option exercise price
paid per share to be reissued under the Plan and (iii) effected a series of
additional changes to the provisions of the Plan (including the stockholder
approval requirements, the transferability of non-statutory stock options and
the elimination of the six (6)-month holding period requirement as a condition
to the exercise of stock appreciation rights) in order to take advantage of the
recent amendments to Rule 16b-3 of the 1934 Act which exempts certain
transactions by Board members under the Plan from the short-swing liability
provisions of the federal securities laws. The 1998 Amendments were approved by
the Corporation's stockholder at the 1998 Annual Meeting.
C. On January 12, 2000, the Board authorized (i) an
increase of 300,000 shares of Common Stock to the share reserve under the Plan
and (ii) an extension of the term of the Directors Plan from September 13, 2003
to December 31, 2005. Such amendments were approved by the Corporation's
stockholder at the 2000 Annual Meeting.
D. On March 21, 2001, the Board adopted this
restatement of the Plan to reflect the adjustment in the number of shares of
Common Stock reserved under the Plan resulting from the three for one stock
split and changes in the automatic grants set forth in Section VI.A.
E. The Plan shall terminate upon the earlier of (i)
December 31, 2005 or (ii) the date on which all shares available for issuance
under the Plan shall have been issued as vested shares or cancelled pursuant to
the cash-out provisions of the Plan. If the date of termination is determined
under clause (i) above, then all option grants outstanding on such date shall
thereafter continue to have force and effect in accordance with the provisions
of the instruments evidencing such grants.
- 9 -
X. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale of shares
pursuant to option grants or share issuances under the Plan shall be used for
general corporate purposes
XI. REGULATORY APPROVALS
A. The implementation of the Plan, the granting of any
option under the Plan and the issuance of Common Stock upon the exercise of the
option grants made hereunder shall be subject to the Corporation's procurement
of all approvals and permits required by regulatory authorities having
jurisdiction over the Plan, the options granted under it, and the Common Stock
issued pursuant to it.
B. No shares of Common Stock or other assets shall be
issued or delivered under this Plan unless and until there shall have been
compliance with all applicable requirements of Federal and state securities
laws, including the filing and effectiveness of the Form S-8 registration
statement for the shares of Common Stock issuable under the Plan, and all
applicable listing requirements of any securities exchange on which the Common
Stock is then listed for trading.
XII. NO IMPAIRMENT OF RIGHTS
Neither the action of the Corporation in establishing the Plan nor any
provision of the Plan shall be construed or interpreted so as to affect
adversely or otherwise impair the right of the Corporation or the stockholders
to remove any individual from the Board at any time in accordance with the
provisions of applicable law.
XIII. MISCELLANEOUS PROVISIONS
A. The right to acquire Common Stock or other assets
under the Plan may not be assigned, encumbered or otherwise transferred by any
Optionee.
B. The provisions of the Plan relating to the exercise
of options and the vesting of shares shall be governed by the laws of the State
of California, as such laws are applied to contracts entered into and performed
in such State.
C. The provisions of the Plan shall inure to the benefit
of, and be binding upon, the Corporation and its successors or assigns, whether
by Corporate Transaction or otherwise, and the Optionees, the legal
representatives of their respective estates, their respective heirs or legatees
and their permitted assignees.
- 10 -