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EXHIBIT 10.3
RULES
OF
THE DYAX CORP. AMENDED AND RESTATED 1995 EQUITY INCENTIVE
PLAN
INLAND REVENUE APPROVED SUB-PLAN FOR THE UNITED KINGDOM
Adopted by the Company on: 26 October 2001
Approved by the Inland Revenue on: 30 November 2001
Inland Revenue reference no: X22034/JRP
PRICEWATERHOUSECOOPERS
ABACUS HOUSE
CASTLE PARK
CAMBRIDGE
CB3 0AN
TEL: 01223 460055
FAX: 01223 552249
REF: LSS/HL
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SCHEDULE
RULES OF DYAX CORP. AMENDED AND RESTATED 1995 EQUITY INCENTIVE PLAN
INLAND REVENUE APPROVED SUB-PLAN FOR THE UNITED KINGDOM ("the Sub-Plan")
1. GENERAL
This schedule to the Dyax Corp. Amended and Restated 1995 Equity
Incentive Plan ("the Plan") sets out the rules of the Dyax Corp. Amended
and Restated 1995 Equity Incentive Plan Inland Revenue Approved Sub-Plan
for the United Kingdom ("the Sub-Plan").
2. ESTABLISHMENT OF SUB-PLAN
Dyax Corp. ("the Company") has established the Sub-Plan under section
12(i) of the Plan, which authorises the Committee to grant Awards to
Foreign Nationals(1).
3. PURPOSE OF SUB-PLAN
The purpose of the Sub-Plan is to enable the grant to, and subsequent
exercise by, employees and directors in the United Kingdom, on a tax
favoured basis, of Options under the Plan.
4. INLAND REVENUE APPROVAL OF SUB-PLAN
The Sub-Plan is intended to be approved by the Inland Revenue under
Schedule 9 to ICTA 1988.
5. RULES OF SUB-PLAN
The rules of the Plan, in their present form and as amended from time to
time, shall, with the modifications set out in this schedule, form the
rules of the Sub-Plan. In the event of any conflict between the rules of
the Plan and this schedule, the schedule shall prevail.
6. RELATIONSHIP OF SUB-PLAN TO PLAN
The Sub-Plan shall form part of the Plan and not a separate and
independent plan.
7. INTERPRETATION
7.1 In the Sub-Plan, unless the context otherwise requires, the
following words and expressions have the following meanings:
ACQUIRING COMPANY a company which obtains Control of the Company
in the circumstances referred to in rule 26;
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APPROVAL DATE the date on which the Sub-Plan is approved by
the Inland Revenue under Schedule 9 to ICTA
1988;
ASSOCIATED COMPANY the meaning given to that expression by section
187(2) of ICTA 1988;(2)
CLOSE COMPANY the meaning given to that expression by section
414(1) of, and paragraph 8 of Schedule 9 to,
ICTA 1988;(3)
COMMITTEE the Compensation Committee as defined under
section 2 of the Plan;
CONSORTIUM the meaning given to that word by section 187(7)
of ICTA 1988;(4)
CONTROL the meaning given to that word by section 840 of
ICTA 1988 and "Controlled" shall be construed
accordingly;(5)
DATE OF GRANT the date on which an Option is granted to an
Eligible Employee as stated in the Option
Certificate;
ELIGIBLE EMPLOYEE an individual who falls within section 4 of the
Plan and who is:
(a) an employee (other than a director) of the
Company or a company participating in the
Sub-Plan; or
(b) a director of the Company or a company
participating in the Sub-Plan who is
contracted to work at least 25 hours per
week for the Company and its subsidiaries
or any of them (exclusive of meal breaks);
and
(c) who is not a Reporting Person or covered
employee as described in Section 3 of the
Plan;
and who, in either case, does not have at the
Date of Grant of an Option, and has not had
during the preceding twelve months, a Material
Interest in a Close Company which is the Company
or a company which has Control of the Company or
a member of a Consortium which owns the Company;
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ICTA 1988 the Income and Corporation Taxes Act 1988;
MARKET VALUE notwithstanding the definition of Fair Market
Value and section 6(b) of the Plan,
(a) in the case of an Option granted under the
Sub Plan
(i) if at the relevant time the Shares are
listed on the New York Stock Exchange
the mean between the highest and
lowest reported sale price(6) as
reported in the Wall Street Journal
for the dealing day immediately
preceding the Date of Grant of the
Option;
(ii) if paragraph (i) does not apply, the
market value of a Share as determined
in accordance with Part VIII of the
Taxation of Chargeable Gains Act 1992
and agreed in advance with the Inland
Revenue Shares Valuation Division on
the Date of Grant of the Option or
such earlier date or dates as may be
agreed with the Board of Inland
Revenue;
(b) in the case of an option granted under any
other share option scheme, the market value
of an ordinary share in the capital of the
Company determined under the rules of such
scheme for the purpose of the grant of the
option;
MATERIAL INTEREST the meaning given to that expression by section
187(3) of ICTA 1988;(7)
NEW OPTION an option granted by way of exchange under rule
26.1;
NEW SHARES the shares subject to a New Option referred to
in rule 26.1;
ORDINARY SHARE CAPITAL the meaning given to that expression by section
832(1) of ICTA 1988; and
SHARES the Common Stock, $0.01 par value, of the
Company.
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7.2 In this schedule, unless the context otherwise requires:
7.2.1 words and expressions not defined above have the same
meanings as are given to them in the Plan;
7.2.2 the rule headings are inserted for ease of reference only
and do not affect their interpretation;
7.2.3 a reference to a rule is a reference to a rule in this
schedule;
7.2.4 the singular includes the plural and vice-versa and the
masculine includes the feminine; and
7.2.5 a reference to a statutory provision is a reference to a
United Kingdom statutory provision and includes any
statutory modification, amendment or re-enactment
thereof.
8. COMPANIES PARTICIPATING IN SUB-PLAN
The companies participating in the Sub-Plan shall be the Company and any
company Controlled by the Company which has been nominated by the
Company to participate in the Sub-Plan.
9. SHARES USED IN SUB-PLAN
The Shares shall form part of the Ordinary Share Capital of the Company
and shall at all times comply with the requirements of paragraphs 10 to
14 of Schedule 9 to ICTA 1988.(8)
10. GRANT OF OPTIONS
An Option granted under the Sub-Plan shall be granted under and subject
to the rules of the Plan as modified by this schedule.
11. IDENTIFICATION OF OPTIONS
An Option Certificate issued in respect of an Option shall expressly
state that it is issued in respect of an Option. An option which is not
so identified shall not constitute an Option.
12. CONTENTS OF OPTION CERTIFICATE
12.1 An Option Certificate issued in respect of an Option shall state:
12.1.1 that it is issued in respect of an Option;
12.1.2 the Date of Grant;
12.1.3 the number of Shares subject to the Option;
12.1.4 the exercise price under the Option;
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12.1.5 any performance target or other condition imposed on the
exercise of the Option;
12.1.6 the date(s) on which the Option will ordinarily become
exercisable; and
12.1.7 the period during which the Option will be exercisable
following the cessation of employment of the Participant.
13. EARLIEST DATE OF GRANT
An Option may not be granted earlier than the Approval Date.
14. PERSONS TO WHOM OPTIONS MAY BE GRANTED
An Option may not be granted to an individual who is not an Eligible
Employee at the Date of Grant. For the avoidance of doubt, and
notwithstanding section 4 of the Plan, Options shall not be granted to
consultants.
15. OPTIONS NON TRANSFERABLE
An Option shall be personal to the Eligible Employee to whom it is
granted and, subject to rule 25, shall not be capable of being
transferred, charged or otherwise alienated and shall lapse immediately
if the Participant purports to transfer, charge or otherwise alienate
the Option.
16. LIMIT ON NUMBER OF SHARES PLACED UNDER OPTION UNDER SUB-PLAN
For the avoidance of doubt, Shares placed under Option under the
Sub-Plan shall be taken into account for the purpose of section 5(a) of
the Plan.
17. INLAND REVENUE LIMIT (L30,000)
An Option may not be granted to an Eligible Employee if the result of
granting the Option would be that the aggregate Market Value of the
shares subject to all outstanding options granted to him under the
Sub-Plan or any other share option scheme established by the Company or
an Associated Company and approved by the Board of Inland Revenue under
Schedule 9 to ICTA 1988 (other than a savings related share option
scheme) would exceed sterling L30,000 or such other limit as may from
time to time be specified in paragraph 28(1) of Schedule 9 to ICTA
1988(9). For this purpose, the United Kingdom sterling equivalent of the
market value of a share on any day shall be determined by taking the
spot sterling/US dollar exchange rate for that day as shown in the
Financial Times. If the grant of an Option would otherwise cause the
limit in this rule 17 to be exceeded, it shall take effect as the grant
of an Option under the Sub-Plan over the highest number of Shares which
does not cause the limit to be exceeded together with the grant of an
option under the Plan over the balance of the Shares.
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18. EXERCISE PRICE UNDER OPTIONS
Notwithstanding section 6(a) and 6(c) of the Plan, the amount payable
per Share on the exercise of an Option shall not be less than the Market
Value of a Share on the Date of Grant and shall be stated on the Date of
Grant.
19. PERFORMANCE TARGET OR OTHER CONDITION IMPOSED ON EXERCISE OF OPTION
Any performance target or other condition imposed on the exercise of an
Option under sections 6(a) and 6(c) of the Plan shall be:
19.1 objective;
19.2 such that, once satisfied, the exercise of the Option is not
subject to the discretion of any person; and
19.3 stated on the Date of Grant.
If an event occurs as a result of which the Committee considers that a
performance target on the exercise of an Option is no longer appropriate
and substitutes, varies or waives the performance target, such
substitution, variation or waiver shall:
19.4 be reasonable in the circumstances; and
19.5 produce a fairer measure of performance and be neither more nor
materially less difficult to satisfy.
20. EXERCISE OF OPTIONS BY LEAVERS
The ability of leavers to exercise their Options will be set out in the
Option Certificate and notwithstanding section 12(e) the Committee will
have no discretion to alter these terms after the Option is granted.
21. LATEST DATE FOR EXERCISE OF OPTIONS
Subject to rule 25, an Option may not be exercised more than ten years
after the Date of Grant and any Option not so exercised by that time
shall lapse immediately.
22. MATERIAL INTEREST
An Option may not be exercised if the Participant then has, or has had
within the preceding twelve months, a Material Interest in a Close
Company which is the Company or which is a company which has Control of
the Company or which is a member of a Consortium which owns the Company.
23. MANNER OF PAYMENT FOR SHARES ON EXERCISE OF OPTIONS
The amount due on the exercise of an Option shall be paid in cash or by
cheque or banker's draft and may be paid out of funds provided to the
Participant on loan by a bank, broker or other person. Notwithstanding
sections 6(d) and 6(e) of the Plan, the amount may not be paid by the
transfer to the Company of Shares or any other shares
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or securities. The date of exercise of an Option shall be the date on
which the Company receives the amount due on the exercise of the Option.
24. ISSUE OR TRANSFER OF SHARES ON EXERCISE OF OPTIONS
24.1 The Company shall, as soon as reasonably practicable and in any
event not later than thirty days after the date of exercise of
an Option, issue or transfer to the Participant, or procure the
issue or transfer to the Participant of, the number of Shares
specified in the notice of exercise and shall deliver to the
Participant, or procure the delivery to the Participant of, a
Share Certificate in respect of such Shares together with, in
the case of the partial exercise of an Option, an Option
Certificate in respect of, or the original Option Certificate
endorsed to show, the unexercised part of the Option, subject
only to compliance by the Participant with the rules of the
Sub-Plan [and to any delay necessary to complete or obtain:
24.1.1 the listing of the Shares on any stock exchange on which
Shares are then listed; or
24.1.2 such registration or other qualification of the Shares
under any applicable law, rule or regulation as the
Company determines is necessary or desirable.
25. DEATH OF PARTICIPANT
Notwithstanding the provision of Section 12(e) of the Plan, if a
Participant dies before the tenth anniversary of the Date of Grant, his
personal representatives shall be entitled to exercise his Options on
the earlier of twelve months from the date of his death or ten years
after the Date of Grant. If not so exercised, the Options shall lapse
immediately.
26. CHANGE IN CONTROL OF COMPANY
26.1 Exchange of Options
If a company ("Acquiring Company") obtains Control of the Company as a
result of making:
26.1.1 a general offer to acquire the whole of the issued
ordinary share capital of the Company which is made on a
condition such that if it is satisfied the person making
the offer will have Control of the Company; or
26.1.2 a general offer to acquire all the shares in the Company
of the same class as the Shares
a Participant may, at any time during the period set out in rule 26.2,
by agreement with the Acquiring Company, release his Option in whole or
in part in consideration of the grant to him of a new option ("New
Option") which is equivalent to the Option but which relates to shares
("New Shares") in:
26.1.3 the Acquiring Company;
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26.1.4 a company which has Control of the Acquiring Company; or
26.1.5 a company which either is, or has Control of, a company
which is a member of a Consortium which owns either the
Acquiring Company or a company having Control of the Acquiring
Company.
26.2 Period allowed for exchange of Options
The period referred to in rule 26.1 is the period of six months
beginning with the time when the person making the offer has obtained
Control of the Company and any condition subject to which the offer is
made has been satisfied.
26.3 Meaning of "equivalent"
The New Option shall not be regarded for the purpose of this rule 26 as
equivalent to the Option unless:
26.3.1 the New Shares satisfy the conditions in paragraphs 10 to
14 of Schedule 9 to ICTA 1988; and
26.3.2 save for any performance target or other condition
imposed on the exercise of the Option, the New Option
will be exercisable in the same manner as the Option and
subject to the provisions of the Sub-Plan as it had
effect immediately before the release of the Option; and
26.3.3 the total market value, immediately before the release of
the Option, of the Shares which were subject to the
Option is equal to the total market value, immediately
after the grant of the New Option, of the New Shares
(market value being determined for this purpose in
accordance with Part VIII of the Taxation of Chargeable
Gains Act 1992); and
26.3.4 the total amount payable by the Participant for the
acquisition of the New Shares under the New Option is
equal to the total amount that would have been payable by
the Participant for the acquisition of the Shares under
the Option.
26.4 Date of grant of New Option
The date of grant of the New Option shall be deemed to be the same as
the Date of Grant of the Option.
26.5 Application of Sub-Plan to New Option
In the application of the Sub-Plan to the New Option, where appropriate,
references to "Company" and "Shares" shall be read as if they were
references to the company to whose shares the New Option relates and the
New Shares, respectively, save that any reference to "Committee" shall
be read as if it were a reference to the Committee formed by Dyax Corp.
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27. RIGHTS ATTACHING TO SHARES ISSUED ON EXERCISE OF OPTIONS
All Shares issued on the exercise of an Option shall, as to any voting,
dividend, transfer and other rights, including those arising on a
liquidation of the Company, rank equally in all respects and as one
class with the Shares in issue at the date of such exercise save as
regards any rights attaching to such Shares by reference to a record
date prior to the date of such exercise.
28. AMENDMENT OF SUB-PLAN
Notwithstanding section 3 of the Plan, no amendment of the Sub-Plan,
whether taking the form of an amendment of the Plan or this schedule,
shall take effect until it has been approved by the Inland Revenue.
29. ADJUSTMENT OF OPTIONS
Notwithstanding section 5(b) of the Plan, no adjustment of an Option
shall take effect until it has been approved by the Inland Revenue.
No adjustment of an Option shall be made which will increase the total
option price to be paid by the Participant or will result in a cash
payment being made to the Participant.
30. EXERCISE OF DISCRETION BY COMMITTEE
In exercising any discretion which it may have under the Sub-Plan, the
Committee shall act fairly and reasonably.
31. DISAPPLICATION OF CERTAIN PROVISIONS OF PLAN
The provisions of the Plan dealing with the matters referred to below
shall not form part of, and no such rights may be granted under, the
Sub-Plan:
- Incentive Stock Options, Stock Appreciation Rights, Performance
Shares, Restricted Stock, Stock Units and Other Stock-Based Awards
as defined in Section 2;
- participation in the Plan other than by Eligible Employees;
- the reference in the definition of "Affiliate" to any company other
than a company of which the Company has Control;
- reference in the definition of Affiliate to the phrase "and has a
significant financial interest as determined by the Committee"
- the methods of payment of the Option exercise price under Sections 6
(d) other than by cash, personal cheque or banker's draft;
- the Committee's discretion in Section 12(b) to make a determination
with respect to an Award at any time after the Award is made;
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- settlement of Options otherwise than by the transfer of Shares as
provided in Section 12(c);
- dividends and Cash Awards as provided in Section 12(d);
- termination of employment under Section 12(e);
- the words "or Designated Beneficiary" in Section 12(e);
- the Change in Control provisions under Section 12(f)(ii), 12(f)(iii)
and 12(f)(v) or the discretion to change the terms of an Option
after it has been granted;
- the making of loans under Section 12(g);
- the provisions relating to Withholding Taxes under Section 12(h);
- the ability to amend Awards as provided in Section 12(j);
- reference in rule 5(b) to "split-up"; and
- the discretion to change the terms of an Option after it has been
granted under rule6( c ).
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Notes
(1) The Company is the "grantor" as defined in paragraph 1 of Schedule 9 to ICTA
1988 because it has established the Sub-Plan. In most cases, it will also be
the Company which grants options under the Sub-Plan, although this is not a
requirement of UK tax legislation.
(2) A company is treated as another's "associated company" at a given time if,
at that time or at any other time within one year previously, one of the two has
control of the other, or both are under the control of the same person or
persons. A person is taken to have control of a company if he exercises, or is
able to exercise or is entitled to acquire, direct or indirect control over the
company's affairs and, in particular, if he possesses or is entitled to acquire
the greater part of the company's issued share capital or the voting power in
the company. UK tax legislation contains two definitions of control: the
definition of control here is different from that in paragraph 4 below.
(3) A close company is a company which is under the control (as defined in
paragraph 1 above) of five or fewer participators (eg shareholders) or of any
number of participators who are directors. There are attributed to a
participator all the rights and powers (eg shares, voting power) of, inter alia,
a company which he controls or of an "associate" (eg relative) of his.
Ordinarily, a company is excluded from being a close company if it is non UK
resident or 35% of the voting power in the company is held by the public and its
shares have been listed, and the subject of dealings, on a recognised stock
exchange within the preceding 12 months. However, for the purpose of the
material interest test (see paragraph 5 below), this exclusion does not apply
with the result that the normal definition of a "close company" is extended.
(4) A company is a member of a consortium owning another company if it is one of
a number of companies which between them beneficially own not less than
three-quarters of the other
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company's ordinary share capital and each of which beneficially owns not less
than one-twentieth of that capital.
(5) Control means the power of a person to secure:
(a) by means of the holding of shares or the possession of voting power in or in
relation to that or any other body corporate; or
(b) by virtue of any powers conferred by the articles of association or other
document regulating that or any other body corporate
that the affairs of the first-mentioned body corporate are conducted in
accordance with the wishes of that person.
(6) The expression "recognised stock exchange" is defined in section 841 of ICTA
1988. "Recognised stock exchange" means the London Stock Exchange Limited and
any stock exchange outside the UK which has been designated by the Inland
Revenue as a recognised stock exchange. This includes, inter alia, the New York
Stock Exchange, NASDAQ and any exchange registered with the US Securities and
Exchange Commission as a national securities exchange. However, clearance is
required from the Shares Valuation Division before the NASDAQ price may be used
to determine the market price of a NASDAQ listed share.
(7) A person has a material interest in a company if he, either on his own or
with one or more associates, or if any associate of his with or without such
other associates:
(a) is the beneficial owner of, or able, directly or through the medium of other
companies, or by any other indirect means to control, more than 10 per cent
of the ordinary share capital of the company; or
(b) where the company is a close company, possesses, or is entitled to acquire,
such rights as would, in the event of the winding-up of the company or in
any other circumstances, give an entitlement to receive more than 10 per
cent of the assets which would then be available for distribution among the
participators.
(8) The shares used in the scheme must be:
(a) ordinary shares;
(b) fully paid up;
(c) not redeemable; and
(d) save for certain limited exceptions, not subject to any restrictions which
do not apply to all shares of the same class.
The shares used in the scheme must be:
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(a) of a class listed on a recognised stock exchange; or
(b) shares in a company which is not under the control of another company; or
(c) shares in a company which is under the control of another company (other
than a company which is, or would if resident in the UK be, a close company)
whose shares are listed on a recognised stock exchange.
The shares used in the scheme form part of the ordinary share capital of:
(a) the grantor (ie the company which has established the scheme); or
(b) a company which has control of the grantor; or
(c) a company which either is, or has control of, a company which is a member of
a consortium owning either the grantor or a company having control of the
grantor.
Where the company whose shares are to be used in a scheme has more than one
class of ordinary share, the majority of the issued shares of the same
class as those which are to be used must be either employee control shares (see
below) or:
(a) must not be held by persons (including trustees holding shares on behalf
of such persons) who acquired their shares in pursuance of a right conferred
on them or opportunity offered to them as directors or employees of any
company, and not in pursuance of an offer to the public; and
(b) if the shares are not listed on a recognised stock exchange and the company
is under the control of another company whose shares are so listed, must not
be held by companies which have control of the company whose shares are in
question or of which that company is an associated company.
Shares are employee control shares if:
(a) the persons holding them are, by virtue of their holding of shares of that
class, together able to control the company; and
(b) those persons are, or have been, employees or directors of the company or
of another company which is under the control of the company.
(9) UK tax legislation imposes a limit (currently L30,000) on the "value" of the
outstanding options which may be held by an individual participant in an Inland
Revenue approved executive share option scheme.
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