1
Ixion Biotechnology, Inc.
1994 Board Retainer Plan
as amended March 22, 1999June 27, 1997
1. Purpose of Plan. The purpose of the Ixion Biotechnology, Inc.
1994 Board Retainer Plan (the "Plan") is to provide a means by which Ixion
Biotechnology, Inc. (the "Company") may attract and retain Outside Directors,
Members of the Scientific Advisory Board, and certain key employees, and key
consultants by providing those personnel with an opportunity to participate in
the growth, development and financial success of the Company which their
efforts, initiative, and skill have helped produce.
2. Definitions. Wherever the following capitalized terms are used in
the Plan, they shall have the following respective meaning:
2.1 "Award" means a grant of fully-paid and non-assessable shares of
Common Stock under the Plan.
2.2 "Board of Directors" means the board of directors of the
Company.
2.3 "Change in Control" shall be deemed to have occurred if:
(a) any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company, a corporation owned
directly or indirectly by the stockholders of the Company in substantially the
same proportions as their ownership of the Common Stock, becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 50% or more of the
total voting power represented by the Company's then outstanding securities
which vote generally in the election of Directors (referred to herein as
"Voting Securities"); or
(b) during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board of Directors and any
new Directors whose election by the Board of Directors or nomination for
election by the Company's stockholders was approved by a vote of at least
two-thirds (2/3) of the Directors then still in office who either were
Directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority thereof; or
(c) the stockholders of the Company approve a merger or
consolidation of the Company with any other entity, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of surviving
entity) more then 50% of the total voting power represented by the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation; or
(d) the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or disposition
by the Company of (in one transaction or a series of transactions) all or
substantially all of the Company's assets.
2.4 "Committee" means the Audit and Benefits Committee of the
Company.
2.5 "Common Stock" means the Common Stock of the Company, par
value $0.01 per share.
2.6 "Company" means Ixion Biotechnology, Inc., a Delaware
corporation.
2.7 "Director" or "Outside Director" means a member of the Board
of Directors who is not an officer or employee of the Company.
2.8 "Disability" or "disabled" means, with respect to a Participant
a physical or mental condition resulting from any medically determinable
physical or mental impairment that renders such person incapable of engaging in
any substantial gainful employment and that can be expected to result in death
or that has lasted or can be expected to last for a continuous period of not
less than six consecutive months.
2.9 "Exchange Act" means the Securities Exchange Action of 1934, as
amended.
2.10 "Fair Market Value" means the per share value of the Common
Stock as of a given date, determined as follows:
(a) If the Common Stock is listed or admitted for trading on
any national securities exchange, the Fair Market Value of the Common Stock is
the closing quotation for such stock on the day preceding such date, or, if
shares were not traded on the day preceding such date, then on the next
preceding trading day during which a sale occurred.
(b) If the Common Stock is not traded on any national
securities exchange, but is quoted on the National Association of Securities
Dealers, Inc. Automated Quotation System (Nasdaq System) or any similar system
of automated dissemination of quotations of prices in common use, the Fair
Market Value of the Common Stock is the last sales price (if the stock is then
listed as a national market issue under the Nasdaq System) or the mean between
the closing representative bid and asked prices (in all other cases) for the
stock on the day preceding such date as reported by Nasdaq System (or such
similar quotation system).
(c) If neither clause (a) nor clause (b) of this Section 2.9
is applicable, the Fair Market Value of the Common Stock is the fair market
value per share as of such valuation date, as determined by the Board of
Directors in good faith and in accordance with uniform principles consistently
applied. Such Fair Market Value shall be determined on a regular basis, not
less than annually.
2.11 "Member of the Scientific Advisory Board" means a member of the
Company's Scientific Advisory Board.
2.12 "Officer" means an officer of the Company, as defined in Rule
16a-1(f) under the Exchange Act, as such rule may be amended from time to time.
2.13 "Participant" means an Director, or Member of the Scientific
Advisory Board, key employee, or key consultant to whom an award is granted
under this Plan.
2.14 "Plan" means the Ixion Biotechnology, Inc.1994 Board Retainer
Plan, as it may be amended from time to time.
2.15 "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange
Act, as such rule may be amended from time to time.
2.16 "Secretary" means the Secretary of the Company.
2.17 "Securities Act" means the Securities Act of 1933, as amended.
2.18 "Termination of Relationship" means with respect to any
Director, Member of the Scientific Advisory Board, or employee, or consultant,
the time when such person ceases to be a Director, Member of the Scientific
Advisory Board, or employee, or consultant of the Company for any reason, with
or without cause, including without limitation, a termination by resignation,
removal, death, disability, or failure to be nominated or reelected by the
Company's stockholders. Nothing in this Plan shall confer upon any such person
Director, Member of the Scientific Advisory Board, or employee, any right to
continue his or her association with the Company or shall interfere with or
restrict in any way the rights of the Company and its stockholders, which are
hereby expressly reserved, to remove any such person at any time for any reason
whatsoever, with or without cause.
3. Stock Subject to Plan.
3.1 Stock Subject to Plan. The stock subject to an Award shall be
shares of the Company's Common Stock. The aggregate number of such shares issued
and outstanding Directors or Members of the Scientific Advisory Board pursuant
to Awards shall not exceed 250,000.
3.2 Changes in Company Capitalization. In the event that (i) the
outstanding shares of Common Stock are hereafter changed into or exchanged for a
different number or kind of shares or other securities of the Company, or of
another entity, by reason of reorganization, merger, consolidation,
recapitalization, reclassification, or (ii) the number of shares is increased or
decreased by reason of a stock split, stock dividend, combination of shares or
any other increase or decrease in the number of such shares of Common Stock
effected without receipt of consideration by the Company (provided, however,
that conversion or exchange of any convertible or exchangeable securities of the
Company shall not be deemed to have been "effected without receipt of
consideration"), then the Committee shall make appropriate adjustments in the
number and kind of shares available for Awards, including adjustments to the
limitations in Section 3.1 on the maximum number and kind of shares which may be
issued and outstanding pursuant to Awards.
4. Granting of Awards
4.1 Eligibility. Any serving Outside Director or, Member of the
Scientific Advisory Board, and any or newly-hired key employee or consultant,
shall be eligible for Awards.
4.2 Grants. Each person who is an Outside Director or Member of the
Scientific Advisory Board of the Company at the date of the adoption of this
Plan shall be granted an Award of 5,000 shares of Common Stock. Thereafter,
immediately following the Annual Meeting of the Company, the Committee shall
grant a further Award of 1,000 shares of Common Stock to each Participant (so
long as he or she is an Outside Director or Member of the Scientific Advisory
Board on each such date). Employees and consultants may be granted Awards in
connection with employment or otherwise upon recommendation by the Committee and
approval by the Board.
4.3 Administration of the Plan.
(a) The Plan shall be administered by the Committee. The
Committee shall consist of at least two Outside Directors (if there are such)
selected by the Board of Directors. Committee members may resign by delivering
written notice to the Secretary. Vacancies on the Committee shall be filled by
the Board of Directors.
(b) Except as otherwise provided in the Plan and except as
otherwise expressly stated to the contrary in the Company's Certificate of
Incorporation, Bylaws, or elsewhere, the Committee shall have the sole
discretionary authority (i) to impose such conditions and restrictions on
Awards as it determines appropriate, (ii) to interpret the Plan, (iii) to
prescribe, amend, and rescind rules and regulations relating to the Plan, (iv)
to determine Fair Market Value in accordance with Section 2.9 (c), and (v) to
take any other actions in connection with the Plan and to make all
determinations under the Plan as it may deem necessary or advisable for the
administration of the Plan. The determinations of the Committee on the matters
referred to in this Section 4 shall be binding and conclusive on all persons.
(c) A majority of the members of the Committee shall constitute
a quorum. All determinations of the Committee shall be made by a majority of
its members. Any decision or determination reduced to writing and signed by all
of the members of the Committee shall be fully effective as if it had been made
by a majority vote at a meeting duly called and held.
(d) The Committee may delegate to one or more persons any of its
powers, or designate one or more persons to do or perform those matters to be
done or performed by the Committee, including administration of the Plan. Any
person or persons delegated or designated by the Committee shall be subject to
the same obligations and requirements imposed on the Committee and its members
under the Plan.
(e) Members of the Committee shall receive such compensation for
their services as members as may be determined by the Board of Directors. All
expenses and liabilities incurred by members of the Committee in connection
with the administration of the Plan shall be borne by the Company. The
Committee may employ attorneys, consultants, accountants, appraisers, brokers,
or other persons. The Committee, the Company, and its Officers and Directors
shall be entitled to rely upon the advice, opinions, or valuations of any such
persons. All elections taken and all interpretations and determinations made by
the Committee in good faith shall be final and binding upon all Participants,
the Company, and all other interested persons. No member of the Committee shall
be personally liable for any action, determination or interpretation made in
good faith with respect to the Plan. Members of the Committee and each person
or persons designed or delegated by the Committee shall be entitled to
indemnification by the Company for any action or any failure to act in
connection with services performed by or on behalf of the Committee for the
benefit of the Company to the fullest extent provided or permitted by the
Company's Certificate of Incorporation, Bylaws, any insurance policy, or other
agreement intended for the benefit of the Committee, or by any applicable law.
5. Terms of Grants
5.1 Grant Agreement. Each Grant shall be evidenced by a written
Grant Agreement, which shall be signed by the Participant and by an authorized
Officer of the Company and which shall refer to such terms and conditions as the
Committee shall determine, consistent with the Plan.
5.2 Issuance of Shares. Participants shall be issued a certificate
for fully-paid and nonassessable shares of Common Stock for the number of shares
covered by the Award, which certificate may contain a legend referring to
restrictions on vesting and transfer and such other terms and conditions as the
Committee shall determine, consistent with the Plan.
5.3 Forfeiture of Unvested Shares. Shares which have been awarded
but not yet vested under this Section 5.3 shall be forfeited if the Participant
ceases to be a Director, Member of the Scientific Advisory Board, or employee,
or consultant of the Company for any reason, with or without cause, including
without limitation, a termination by resignation, removal, death, disability, or
failure to be nominated or reelected by the Company's stockholders, unless
provided to the contrary in any Grant Agreement approved by the Committee
between the Participant and the Company, which Agreement shall govern any
further vesting of shares pursuant to Awards.
5.4 Fair Market Value. The Company shall provide to each Participant
who receives an Award information regarding the Fair Market Value of the
Company's shares on the date such Award is granted. Such information shall be
provided to permit the Participant to determine his or her federal income tax
liability, if any, for such Award, or to permit the Participant to make the
election contemplated by Section 78 of the Internal Revenue Code.
5.5 Transfer Restrictions; Vesting.
(a) Unless otherwise approved in writing by the Committee, no
shares of Common Stock issued pursuant to an Award may be sold, assigned,
pledged, encumbered, or otherwise transferred until (i) they have vested, and
(ii) either the Company has made an offering of its shares to the public
pursuant to a registration statement under the Securities Act or there has
been a Change of Control of the Company, except as may be provided in Section
5.5(c) or as may otherwise be provided for in an Grant Agreement which has been
approved by the Committee. The Committee, in its absolute discretion, may
impose such other restrictions on the transferability of the shares granted
pursuant to an Award as it deems appropriate. Any such other restriction shall
be set forth in the respective Grant Agreement and may be referred to on the
certificates evidencing such shares.
(b) Shares issued to members of the Board of Directors, or
employees, or consultants pursuant to Awards shall vest 20% at the end of the
first year of service after the date of the Award and 1/12 of 20% at the end of
each month thereafter. Subject to the provisions of Sections 5.3, 5.5(c), and
5.5(d), Awards shall otherwise become vested at such times and in such
installments (which may be cumulative) as the Committee shall provide in
the terms of each individual Grant Agreement; provided, however, that by
resolution adopted after an Award is granted the Committee may, on such terms
and conditions as it may determine to be appropriate and subject to Sections
5.3, 5.5(c), and 5.5(d), accelerate the time at which such Award or any portion
thereof may be vested, or such rights may be set forth in an agreement between
the Participant and the Company which has been approved by the Committee. Shares
issued to members of the Scientific Advisory Board shall vest 25% at the end of
each three months of service after the date of the award.
(c) No portion of an Award which is unvested at Termination of
Relationship shall thereafter become vested; provided, however, that provision
may be made that such Award shall become vested in the event of a Termination
of Relationship as may be determined by the Committee, or such rights may be
set forth in a Grant Agreement between the Participant and the Company which
has been approved by the Committee.
(d) Subject to the provisions of Section 5.5(a), the Committee
shall provide, in terms of each individual Grant Agreement when such Award
becomes vested, and (without limiting the generality of the foregoing) the
Committee may provide in the terms of individual Grant Agreements that unvested
shares shall be forfeited immediately upon a Termination of Relationship;
provided, however, that provision may be made that such shares shall become
vested in the event of a Termination of Relationship because of the
Participant's retirement, death, disability, or as may otherwise be determined
by the Committee.
5.6 No Right to Continued Relationship. Nothing in this Plan or in
any Grant Agreement issued hereunder shall confer upon any Participant, any
right to continue his or her association with the Company or shall interfere
with or restrict in any way the rights of the Company and its stockholders,
which are hereby expressly reserved, to remove any such person at any time for
any reason whatsoever, with or without cause.
6. Additional Provisions.
6.1 Nontransferability. No unvested shares issued pursuant to an
Award or interest or right therein or part thereof shall be liable for the
debts, contracts or engagements of the Participant or his successors in interest
or shall be subject to disposition by transfer, alienation, anticipation,
pledge, encumbrance, assignment, or any other means whether such disposition be
voluntary or involuntary or by operation of law by judgment, levy, attachment,
garnishment or any other legal or equitable proceedings (including bankruptcy
and divorce proceeding), and any attempted disposition thereof shall be null and
void and of no effect.
6.2 Securities Act. Upon issuance of Common Stock of the Company to
the Participant, or his heirs, the recipient of that stock shall represent that
the shares of stock are taken for investment and not resale and shall make such
other representations as may be necessary to qualify the issuance of the shares
as exempt from the Securities Act and applicable federal and state securities
laws and regulations, and shall represent that he or she shall not dispose of
those shares in violation of the Securities Act or of applicable federal and
state securities laws and regulations. The Company reserves the right to place a
legend on any stock certificate issued pursuant to the Plan to assure compliance
with this Section and with the vesting and transferability requirements of
Section 5. No shares of Common Stock of the Company shall be required to be
distributed until the Company shall have taken such action, if any, as is then
required to comply with the provisions of the Securities Act or any other then
applicable federal or state securities law or regulation.
6.3 Withholding of Tax. The Company shall have the right to deduct
from any Award made under the Plan any federal, state or local income or other
taxes required by law to be withheld with respect to such Award. It shall be a
condition to the obligation of the Company to deliver Common Stock upon an Award
that the Participant pay to the Company such amount as may be requested by the
Company for the purpose of satisfying any liability for such withholding taxes.
Any grant under this Plan may provide by its terms that the Participant may
elect, in accordance with any applicable regulations, to pay a portion or all of
the amount of such minimum required or additional permitted withholding taxes in
shares of Common Stock, subject to the timing restrictions set forth in Section
6 hereof. The Participant shall authorize the Company to withhold, or shall
agree to surrender back to the Company, on or about the date such withholding
tax liability is determinable, shares of Common Stock previously owned by such
Participant or a portion of the shares that were or otherwise would be
distributed to such Participant pursuant to such award having a Fair Market
Value equal to the amount of such required or permitted withholding taxes to be
paid in shares.
6.4 Termination and Amendment of Plan. The Committee may at any time
suspend or terminate the Plan, or make such modifications of the Plan as it
shall deem advisable, provided that the Plan not be changed to increase the cost
of the Plan to the Company. Notwithstanding anything to the contrary contained
herein, the Committee shall not amend or modify the Plan more than once every
six (6) months or in any other manner inconsistent with the requirements of Rule
16b-3(c)(2)(ii) except to the extent required by changes in the Internal Revenue
Code, the Employee Retirement Income Security Act of 1974, or regulations and
rules issued thereunder. No termination or amendment of the Plan may, without
the consent of a Participant, adversely affect the rights of such Participant
notwithstanding anything to the contrary herein. No Award may be granted during
any period of suspension of the Plan nor after termination of the Plan, and in
no event may any Award be granted under this Plan after August 30, 2004.
6.5 Duties of the Company. The Company shall pay all original issue
taxes with respect to the issuance or delivery of shares pursuant to an Award
and all other fees and expenses necessarily incurred by the Company in
connection therewith.
6.6 Absence of a Committee. Should the Board of Directors fail to
appoint the Committee or should there be no Committee for any other reason, then
the Plan shall be administered by the Board of Directors. In the absence of a
Committee, the Board of Directors (or that portion thereof comprised in
accordance with this Section 6.6) shall have all the powers of the Committee as
set forth herein in administration of the Plan.
7. General Provisions.
7.1 No Rights. Neither the adoption and maintenance of the Plan, the
granting of Awards pursuant to the Plan, nor issuance of shares pursuant to
Awards shall be deemed to constitute a contract of employment between the
Company and any Participant or to be a condition of the employment of any
person. The Plan and any Awards granted under the Plan shall not confer upon any
Participant any right with respect to a continued relationship with the Company,
nor shall they interfere in any way with the right of the Company or its
shareholders to terminate the relationship of any Participant with the Company
at any time, and for any reason, with or without cause.
7.2 Costs of Administration. The Company shall pay all costs and
expenses of administering the Plan.
7.3 Controlling Laws. The issuance of shares of Common Stock under
the Plan shall be subject to all applicable laws, rules and regulations, and to
such approvals by any governmental agencies or national securities exchanges as
may be required. The provisions of this Plan shall be interpreted so as to
comply with the conditions and requirements of the Securities Act, the Exchange
Act, and rules and regulations issued thereunder, including without limitation
Rule 16b-3, unless a contrary interpretation of any such provisions otherwise
required by applicable law. Except to the extent preempted by Federal law, this
Plan and all Stock Option Agreements entered into pursuant hereto shall be
construed and enforced in accordance with, and governed by, the laws of the
State of Delaware, determined without regard to its conflict of laws rules.2