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EXHIBIT 10.3
ONCOGENE SCIENCE, INC.
1993 INCENTIVE AND NON-QUALIFIED
STOCK OPTION PLAN
1. PURPOSE
The purpose of this 1993 Incentive and Non-Qualified Stock Option Plan (the
"Plan" is to encourage and enable selected management, other key employees,
directors (whether or not employees), and consultants of Oncogene Science, Inc.
(the "Company") or a parent or subsidiary of the Company to acquire a
proprietary interest in the Company through the ownership of common stock, par
value $.01 per share (the "Common Stock"), of the Company. Such ownership will
provide such employees, directors, and consultants with a more direct stake in
the future welfare of the Company, and encourage them to remain with the Company
or a parent or subsidiary of the Company. It is also expected that the Plan will
encourage qualified persons to seek and accept employment with, or become
associated with, the Company or a parent or subsidiary of the Company. Pursuant
to the Plan, such persons will be offered the opportunity to acquire Common
Stock through the grant of incentive stock options and "non-qualified" stock
options.
As used herein, the term "parent" or "subsidiary" shall mean any present or
future corporation which is or would be a "parent corporation" or "subsidiary
corporation" of the Company as the term is defined in Section 425 of the
Internal Revenue Code of 1986, as amended (the "Code") (determined as if the
Company were the employer corporation).
2. ADMINISTRATION OF THE PLAN
The Plan shall be administered by a Stock Option Committee (the
"Committee") as appointed from time to time by the Board of Directors of the
Company, which committee shall consist of not less than three members of the
Board of Directors and each member of which shall be a "disinterested person,"
within the meaning of Rule 16b-3 promulgated under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), or any successor rule or regulation
("Rule 16b-3"). Except as otherwise specifically provided herein, no person,
other than members of the Committee, shall have any discretion as to decisions
regarding the Plan.
In administering the Plan, the Committee may adopt rules and regulations
for carrying out the Plan. The interpretation and decision made by the Committee
with regard to any question arising under the Plan shall be final and conclusive
on all persons participating or eligible to participate in the Plan. Subject to
the provisions of the Plan, the Committee shall determine the terms of all
options granted pursuant to the Plan, including, but not limited to, the persons
to whom, and the time or times at which, grants shall be made, the number of
options to be included in the grants, the number of options which shall be
treated as incentive stock options, and the option price.
3. SHARES OF STOCK SUBJECT TO THE PLAN
Except as provided in subparagraphs 6(h) and 6(i) and paragraph 7, the
number of shares that may be issued or transferred pursuant to the exercise of
options granted under the Plan shall not exceed 1,600,000 shares of Common
Stock. Such shares may be authorized and unissued shares or previously issued
shares acquired or to be acquired by the Company and held in treasury. Any
shares subject to an option which for any reason expires or is terminated
unexercised as to such shares may again be subject to an option right under the
Plan. The aggregate Fair Market Value (determined at the time the option is
granted) of the stock with respect to which incentive stock options are
exercisable for the first time by an optionee during any calendar year (under
the Plan and all plans of the Company and any parent and subsidiary of the
Company) shall not exceed $100,000.
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4. ELIGIBILITY
Incentive stock options may be granted only to management and other key
employees who are employed by the Company or a parent or subsidiary of the
Company. An incentive stock option may be granted to a director of the Company
or a parent or subsidiary of the Company, provided that the director is also an
officer or key employee. Directors who are not officers or key employees, and
consultants, may only be granted non-qualified stock options.
5. GRANTING OF OPTIONS
No options pursuant to this Plan may be granted after the expiration of
business on January 14, 2003. The date of the grant of any option shall be the
date on which the Committee authorizes the grant of such option.
6. OPTIONS
Options shall be evidenced by stock option agreements in such form, not
inconsistent with this Plan, as the Committee shall approve from time to time,
which agreements need not be identical and shall be subject to the following
terms and conditions:
(a) Option Price. The purchase price under each incentive stock
option shall be not less than 100% of the Fair Market Value of the Common
Stock at the time the option is granted and not less than the par value of
such Common Stock. In the case of an incentive stock option granted to an
employee owning more than 10% of the total combined voting power of all
classes of stock of the Company or of any parent or subsidiary of the
Company (a "10% Stockholder"), actually or constructively under Section
425(d) of the Code, the option price shall not be less than 110% of the
Fair Market Value of the Common Stock subject to the option at the time of
its grant. The purchase price under each non-qualified stock option shall
be specified by the Committee, but shall in no case be less than the
greater of 50% of the Fair Market Value of the Common Stock at the time the
option is granted and the par value of such Common Stock.
(b) Medium and Time of Payment. Stock purchased pursuant to the
exercise of an option shall at the time of purchase be paid for in full in
cash, or, upon conditions established by the Committee, by delivery of
shares of Common Stock owned by the recipient. If payment is made by the
delivery of shares, the value of the shares delivered shall be the Fair
Market Value of such shares on the date of exercise of the respective
option. Upon receipt of payment and such documentation as the Company may
deem necessary to establish compliance with the Securities Act of 1933, as
amended (the "Securities Act"), the Company shall, without stock transfer
tax to the optionee or other person entitled to exercise the option,
deliver to the person exercising the option a certificate or certificates
for such shares. It shall be a condition to the performance of the
Company's obligation to issue or transfer Common Stock upon exercise of an
option or options that the optionee pay, or make provision satisfactory to
the Company for the payment of, any taxes (other than stock transfer taxes)
which the Company is obligated to collect with respect to the issue or
transfer of Common Stock upon such exercise, including any federal, state,
or local withholding taxes.
(c) Waiting Period. The waiting period and time for exercising an
option shall be prescribed by the Committee in each particular case;
provided, however, that no option may be exercised after 10 years from the
date it is granted. In the case of an incentive stock option granted to a
10% Stockholder, such option, by its terms, shall be exercisable only
within five years from the date of grant.
(d) Rights as a Stockholder. A recipient of options shall have no
rights as a stockholder with respect to any shares issuable or transferable
upon exercise thereof until the date a stock certificate is issued to him
for such shares. Except as otherwise expressly provided in the Plan, no
adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.
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(e) Non-Assignability of Options. No option shall be assignable or
transferable by the recipient except by will or by the laws of descent and
distribution. During the lifetime of a recipient, options shall be
exercisable only by him.
(f) Effect of Termination of Employment. If a recipient's employment
(or service as an officer, director or consultant) shall terminate for any
reason, other than death or Retirement, the right of the recipient to
exercise any option otherwise exercisable on the date of such termination
shall expire unless such right is exercised within a period of 90 days
after the date of such termination. The term "Retirement" shall mean the
voluntary termination of employment (or service as an officer, director or
consultant) by a recipient who has attained the age of 55 and who has at
least five years' service with the Company. If a recipient's employment (or
service as an officer, director or consultant) shall terminate because of
death or Retirement, the right of the recipient to exercise any option
otherwise exercisable on the date of such termination shall be unaffected
by such termination and shall continue until the normal expiration of such
option. Notwithstanding the foregoing, the tax treatment available pursuant
to Section 422 of the Code upon the exercise of an incentive stock option
will not be available to a recipient who exercises any incentive stock
option more than (i) 12 months after the date of termination of employment
due to death or permanent disability or (ii) three months after the date of
termination of employment due to Retirement. Option rights shall not be
affected by any change of employment as long as the recipient continues to
be employed by either the Company or a parent or subsidiary of the Company.
In no event, however, shall an option be exercisable after the expiration
of its original term as determined by the Committee pursuant to
subparagraph 6(c) above. The Committee may, if it determines that to do so
would be in the Company's best interests, provide in a specific case or
cases for the exercise of options which would otherwise terminate upon
termination of employment with the Company for any reason, upon such terms
and conditions as the Committee determines to be appropriate. Nothing in
the Plan or in any option agreement shall confer any right to continue in
the employ of the Company or any parent or subsidiary of the Company or
interfere in any way with the right of the Company or any parent or
subsidiary of the Company to terminate the employment of a recipient at any
time.
(g) Leave of Absence. In the case of a recipient on an approved leave
of absence, the Committee may, if it determines that to do so would be in
the best interests of the Company, provide in a specific case for
continuation of options during such leave of absence, such continuation to
be on such terms and conditions as the Committee determines to be
appropriate, except that in no event shall an option be exercisable after
10 years from the date it is granted.
(h) Recapitalization. In the event that dividends payable in Common
Stock during any fiscal year of the Company exceed in the aggregate five
percent of the Common Stock issued and outstanding at the beginning of the
year, or in the event there is during any fiscal year of the Company one or
more splits, subdivisions, or combinations of shares of Common Stock
resulting in an increase or decrease by more than five percent of the
shares outstanding at the beginning of the year, the number of shares
available under the Plan shall be increased or decreased proportionately,
as the case may be, and the number of shares deliverable upon the exercise
thereafter of any options theretofore granted shall be increased or
decreased proportionately, as the case may be, without change in the
aggregate purchase price. Common Stock dividends, splits, subdivisions, or
combinations during any fiscal year which do not exceed in the aggregate
five percent of the Common Stock issued and outstanding at the beginning of
such year shall be ignored for purposes of the Plan. All adjustments shall
be made as of the day such action necessitating such adjustment becomes
effective.
(i) Sale or Reorganization. In case the Company is merged or
consolidated with another corporation, or in case the property of stock of
the Company is acquired by another corporation, or in case of a separation,
reorganization, or liquidation of the Company, the Board of Directors of
the Company, or the board of directors of any corporation assuming the
obligations of the Company hereunder, shall either (i) make appropriate
provisions for the protection of any outstanding options by the
substitution on an equitable basis of appropriate stock of the Company, or
appropriate stock of the merged, consolidated, or otherwise reorganized
corporation, provided only that such substitution of options shall, with
respect to incentive stock options, comply with the requirements of Section
425 of the Code, or (ii) give written
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notice to optionees that their options, which will become immediately
exercisable notwithstanding any waiting period otherwise prescribed by the
Committee, must be exercised within 30 days of the date of such notice or
they will be terminated.
(j) General Restrictions. Each option granted under the Plan shall be
subject to the requirement that, if at any time the Board of Directors
shall determine, in its discretion, that the listing, registration, or
qualification of the shares issuable or transferable upon exercise thereof
upon any securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory body is necessary or
desirable as a condition of, or in connection with, the granting of such
option or the issue, transfer, or purchase of shares thereunder, such
option may not be exercised in whole or in part unless such listing,
registration, qualification, consent, or approval shall have been effected
or obtained free of any conditions not acceptable to the Board of
Directors.
The Company shall not be obligated to sell or issue any shares of
Common Stock in any manner in contravention of the Securities Act or any
state securities law. The Board of Directors may, in connection with the
granting of each option, require the individual to whom the option is to be
granted to enter into an agreement with the Company stating that as a
condition precedent to each exercise of the option, in whole or in part, he
shall, if then required by the Company, represent to the Company in writing
that such exercise is for investment only and not with a view to
distribution, and also setting forth such other terms and conditions as the
Committee may prescribe. Such agreements may also, in the discretion of the
Committee, contain provisions requiring the forfeiture of any options
granted and/or Common Stock held, in the event of the termination of
employment or association, as the case may be, of the optionee with the
Company. Upon any forfeiture of Common Stock pursuant to an agreement
authorized by the preceding sentence, the Company shall pay consideration
for such Common Stock to the optionee, pursuant to any such agreement,
without interest thereon.
"Fair Market Value" for all purposes under the Plan shall mean the
closing price of shares of Common Stock, as reported in The Wall Street
Journal, in the NASDAQ National Market Issues or similar successor
consolidated transactions reports (or a similar consolidated transactions
report for the exchange on which the shares of Common Stock are then
trading) for the relevant date, or if no sales of shares of Common Stock
were made on such date, the average of the high and low prices of shares as
reported in such composite transaction report for the preceding day on
which sales of shares were made. If the shares are not listed on a national
securities exchange or the NASDAQ National Market System at the time Fair
Market Value is to be determined, then Fair Market Value shall be
determined by the Committee in good faith pursuant to such method as to the
Committee deems appropriate and equitable. Under no circumstances shall the
Fair Market Value of a share of Common Stock be less than its par value.
7. TERMINATION AND AMENDMENT OF THE PLAN
The Board of Directors shall have the right to amend, suspend, or terminate
the Plan at any time; provided, however, that no such action shall affect or in
any way impair the rights of a recipient under any option right theretofore
granted under the Plan; and, provided, further, that unless first duly approved
by the stockholders of the Company entitled to vote thereon at a meeting (which
may be the annual meeting) duly called and held for such purpose, except as
provided in subparagraphs 6(h) and 6(i), no amendment or change shall be made in
the Plan: (a) increasing the total number of shares which may be issued or
transferred under the Plan; (b) changing the purchase price hereinbefore
specified for the shares subject to options; (c) extending the period during
which options may be granted or exercised under the Plan; or (d) changing the
designation of persons eligible to receive options under the Plan.
8. RESTRICTION OF SALE OF SHARES
Without the written consent of the Company, no stock acquired by an
optionee upon exercise of an incentive stock option granted hereunder may be
disposed of by the optionee within two years from the date such incentive stock
option was granted, nor within one year after the transfer of such stock to the
optionee;
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provided, however, that a transfer to a trustee, receiver, or other fiduciary in
any insolvency proceeding, as described in Section 422A(c)(3) of the Code, shall
not be deemed to be such a disposition. The optionee shall make appropriate
arrangements with the Company for any taxes which the Company is obligated to
collect in connection with any such disposition, including any federal, state,
or local withholding taxes.
9. EFFECTIVE DATE OF THE PLAN
This Plan shall become effective January 15, 1993, subject, however, to
approval by the stockholders of the Company within 12 months next following
adoption by the Board of Directors; and if such approval is not obtained, the
Plan shall terminate and any and all options granted during such interim period
shall also terminate and be of no further force or effect. The Plan shall, in
all events, terminate on January 14, 2003, or on such earlier date as the Board
of Directors of the Company may determine. Any option outstanding at the
termination date shall remain outstanding until it has either expired of has
been exercised.
10. COMPLIANCE WITH RULE 16B-3
With respect to persons subject to Section 16 of the Exchange Act,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or is successors. To the extent any provision of the
Plan or action by the Committee (or any other person on behalf of the Committee
or the Company) fails to so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by the Committee.
11. AUTOMATIC GRANT OF OPTIONS TO NON-EMPLOYEE DIRECTORS
(a) Each director who is not also an employee of the Company or any of its
affiliates or the designee of any stockholder of the Company pursuant to a right
to designate one or more directors (an "Eligible Director") shall automatically
be awarded a grant of 50,000 non-qualified stock options upon his or her initial
election to the Board of Directors. Such options shall vest and be exercisable
solely in accordance with the following schedule:
(i) The options may be exercised with respect to a maximum of one-half
of the option shares during the twelve-month period beginning after
the date of grant.
(ii) The options may be exercised with respect to all of the option
shares upon the Eligible Director's reelection to the Board of
Directors for a second consecutive term.
(iii) The options will expire and will no longer be exercisable as of
the tenth anniversary of the date of grant, subject to sooner
expiration upon the occurrence of certain events as provided
elsewhere in this Plan.
(b) In addition to the grant provided in subsection (a), each Eligible
Director shall automatically be awarded a grant of non-qualified stock options
upon the re-election of such Eligible Director to a third or subsequent,
successive term, in the amount and at the times hereinafter set forth. Such
automatic grants of non-qualified stock options shall commence on June 21, 1995,
and shall occur annually thereafter on the date of the annual meeting of
stockholders for such year until the termination of the Plan. The number of
options to which each Eligible Director shall be entitled pursuant to this
subsection (b) shall be as follows:
(i) 20,000 on the later of June 21, 1995, or the date of the Eligible
Director's reelection to a third one-year term;
(ii) 20,000 on the later of the date of the annual meeting of
stockholders in 1996, or the date of the Eligible Director's
reelection to a fourth one-year term;
(iii) 15,000 on the later of the date of the annual meeting of
stockholders in 1997, or the date of the Eligible Director's
reelection to a fifth one-year term;
(iv) 15,000 on the later of the date of the annual meeting of
stockholders in 1998, or the date of the Eligible Director's
reelection to a sixth one-year term;
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(v) 10,000 on the later of the date of the annual meeting of
stockholders in 1999, or the date of the Eligible Director's
reelection to a seventh one-year term;
(vi) 10,000 on the later of the date of the annual meeting of
stockholders in 2000, or the date of the Eligible Director's
reelection to an eighth one-year term; and
(vii) 10,000 on the later of the date of the annual meeting of
stockholders in 2001, or the date of the Eligible Director's
reelection to a ninth one-year term.
Such options shall vest and be exercisable solely in accordance with the
following schedule:
(i) The options shall not be exercisable during the twelve-month period
beginning after the date of grant.
(ii) The options may be exercised with respect to one-third of the
option shares after the expiration of twelve months from the date
of grant.
(iii) The remaining two-thirds of the options shall vest and become
exercisable ratably on a monthly basis over the two-year period
commencing one year from the date of grant and ending three years
from the date of grant.
(iv) The options will expire and will no longer be exercisable as of the
tenth anniversary of the date of grant, subject to sooner
expiration upon the occurrence of certain events as provided
elsewhere in this Plan.
(c) The option price for all options awarded under this Section 11 shall be
equal to 100 percent of the Fair Market Value on the date of grant.
(d) This Section 11 shall not be amended more often than once every six
months, other than to comport with changes in the Internal Revenue Code, the
Employment Retirement Income Security Act, or the rules thereunder.
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