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EXHIBIT 4
ENTREMED, INC.
2001 LONG-TERM INCENTIVE PLAN
1. PURPOSE AND TYPES OF AWARDS
The purpose of the 2001 Long-Term Incentive Plan ("Plan") is to
promote the long-term growth and profitability of the Corporation by: (i)
providing key people with incentives to improve stockholder value and to
contribute to the growth and financial success of the Corporation and (ii)
enabling the Corporation to attract, retain and reward the best-available
persons.
The Plan permits the granting of stock options (including incentive
stock options qualifying under Code section 422 and nonqualified stock
options), stock appreciation rights, restricted or unrestricted stock awards,
phantom stock, performance awards, or any combination of the foregoing.
2. DEFINITIONS
Under this Plan, except where the context otherwise indicates, the
following definitions apply:
(a) "Administrator" shall have the meaning set forth in
Section 3(a).
(b) "Affiliate" means a corporation, partnership, business
trust, limited liability company or other form of business organization at
least a majority of the total combined voting power of all classes of stock or
other equity interests of which is owned by the Corporation, either directly
or indirectly, and any other entity designated by the Administrator in which
the Corporation has a significant interest.
(c) "Award" shall mean any stock option, stock appreciation
right, stock award, phantom stock award, or performance award.
(d) "Board" shall mean the Board of Directors of the
Corporation.
(e) "Code" shall mean the Internal Revenue Code of 1986, as
amended, and any regulations promulgated thereunder.
(f) "Common Stock" shall mean shares of common stock of the
Corporation, $.01 par value.
(g) "Corporation" shall mean EntreMed, Inc. and any
successor thereto.
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(h) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(i) "Fair Market Value" of a share of the Corporation's
Common Stock for any purpose on a particular date shall mean the last reported
sale price per share of Common Stock, regular way, on such date or, in case no
such sale takes place on such date, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on a national securities exchange or included for quotation on the
Nasdaq-National Market, or if the Common Stock is not so listed or admitted to
trading or included for quotation, the last quoted price, or if the Common
Stock is not so quoted, the average of the high bid and low asked prices,
regular way, in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotation System or, if such
system is no longer in use, the principal other automated quotations system
that may then be in use or, if the Common Stock is not quoted by any such
organization, the average of the closing bid and asked prices, regular way, as
furnished by a professional market maker making a market in the Common Stock
as selected in good faith by the Administrator or by such other source or
sources as shall be selected in good faith by the Administrator. If, as the
case may be, the relevant date is not a trading day, the determination shall
be made as of the next preceding trading day. As used herein, the term
"trading day" shall mean a day on which public trading of securities occurs
and is reported in the principal consolidated reporting system referred to
above, or if the Common Stock is not listed or admitted to trading on a
national securities exchange or included for quotation on the Nasdaq-National
Market, any business day.
(j) "Grant Agreement" shall mean a written document
memorializing the terms and conditions of an Award granted pursuant to the
Plan and shall incorporate the terms of the Plan.
(k) "Participants" shall have the meaning set forth in
Section 5.
(l) "Parent" shall mean a corporation, whether nor or
hereafter existing, within the meaning of the definition of "parent
corporation" provided in Code section 424(e), or any successor thereto.
(m) "Performance Goals" shall mean performance goals
established by the Administrator which may be based on one or more business
criteria selected by the Administrator that apply to an individual or group of
individuals, a business unit, or the Corporation and/or one or more of its
Affiliates either separately or together, over such performance period as the
Administrator may designate, including, but not limited to, business criteria
based on operating income, earnings or earnings growth, sales, return on
assets, equity or investment, regulatory compliance, satisfactory internal or
external audits, improvement of financial ratings, achievement of balance
sheet or income statement objectives, or any other objective goals established
by the Administrator, and may be absolute in their terms or measured against
or in relationship to other companies comparably, similarly or otherwise
situated.
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(n) "Subsidiary" and "Subsidiaries" shall mean only a
corporation or corporations, whether now or hereafter existing, within the
meaning of the definition of "subsidiary corporation" provided in section
424(f) of the Code, or any successor thereto.
(o) "Ten-Percent Stockholder" shall mean a Participant who
(applying the rules of Code section 424(d)) owns stock possessing more than
10% of the total combined voting power or value of all classes of stock or
interests of the Corporation or a Parent or Subsidiary of the Corporation.
3. ADMINISTRATION
(a) Administration of the Plan. The Plan shall be
administered by the Board or by such committee or committees as may be
appointed by the Board from time to time (the Board, committee or committees
hereinafter referred to as the "Administrator"). Notwithstanding the
foregoing, the Administrator may delegate to the Chief Executive Officer of
the Corporation the power to administer this Plan and have the full authority
of the Administrator hereunder with respect to Awards granted to specified
Participants or groups of Participants.
(b) Powers of the Administrator. The Administrator shall
have all the powers vested in it by the terms of the Plan, such powers to
include authority, in its sole and absolute discretion, to grant Awards under
the Plan, prescribe Grant Agreements evidencing such Awards and establish
programs for granting Awards.
The Administrator shall have full power and authority to take all
other actions necessary to carry out the purpose and intent of the Plan,
including, but not limited to, the authority to: (i) determine the eligible
persons to whom, and the time or times at which Awards shall be granted; (ii)
determine the types of Awards to be granted; (iii) determine the number of
shares to be covered by or used for reference purposes for each Award; (iv)
impose such terms, limitations, restrictions and conditions upon any such
Award as the Administrator shall deem appropriate, including, but not limited
to, whether a stock option shall be an incentive stock option or a
nonqualified stock option, any exceptions to nontransferability, any
Performance Goals applicable to Awards, any provisions relating to vesting,
any circumstances in which the Awards would terminate, the period during which
Awards may be exercised, and the period during which Awards shall be subject
to restrictions; (v) modify, amend, extend or renew outstanding Awards, accept
the surrender of outstanding Awards and substitute new Awards, or specify a
lower or higher exercise price, or a longer or shorter term, for any
substituted Awards than the surrendered Awards, or impose any other provisions
that are authorized by this Plan (provided however, that, except as provided
in Section 7(g)(i) of the Plan, any modification that would materially
adversely affect any outstanding Award shall not be made without the consent
of the holder); (vi) accelerate, extend, or otherwise change the time in which
an Award may be exercised or becomes payable and to waive or accelerate the
lapse, in whole or in part, of any restriction or condition with respect to
such Award, including, but not limited to, any restriction or condition with
respect to the vesting or exercisability of an Award due to termination of any
Participant's employment or other relationship with the Corporation or an
Affiliate; and (vii) establish objectives and conditions, if any, for earning
Awards and determining whether Awards will be paid after the end of a
performance period.
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In making these determinations, the Administrator may take into
account the nature of the services rendered or to be rendered by the Award
recipients, their present and potential contributions to the success of the
Corporation and its Affiliates, and such other factors as the Administrator in
its discretion shall deem relevant. Subject to the provisions of the Plan, the
Administrator shall have full power and authority, in its sole and absolute
discretion, to administer and interpret the Plan and to adopt and interpret
such rules, regulations, agreements, guidelines and instruments for the
administration of the Plan and for the conduct of its business as the
Administrator deems necessary or advisable.
(c) Non-Uniform Determinations. The Administrator's
determinations under the Plan (including, without limitation, determinations
of the persons to receive Awards, the form, amount and timing of such Awards,
the terms and provisions of such Awards and the Grant Agreements evidencing
such Awards) need not be uniform and may be made by the Administrator
selectively among persons who receive, or are eligible to receive, Awards
under the Plan, whether or not such persons are similarly situated.
(d) Limited Liability. To the maximum extent permitted by
law, no member of the Administrator shall be liable for any action taken or
decision made in good faith relating to the Plan or any Award thereunder.
(e) Effect of Administrator's Decision. All actions taken
and decisions and determinations made by the Administrator on all matters
relating to the Plan pursuant to the powers vested in it hereunder shall be in
the Administrator's sole and absolute discretion and shall be conclusive and
binding on all parties concerned, including the Corporation, its stockholders,
any Participants and any other employee, consultant, or director of the
Corporation, and their respective successors in interest.
4. SHARES AVAILABLE FOR THE PLAN
(a) Maximum Issuable Shares. Subject to adjustments as
provided in Section 7(f), the shares of Common Stock that may be issued with
respect to Awards granted under the Plan shall not exceed an aggregate of
2,250,000 shares of Common Stock. The Corporation shall reserve such number of
shares for Awards under the Plan, subject to adjustments as provided in
Section 7(f). If any Award, or portion of an Award, under the Plan expires or
terminates unexercised, becomes unexercisable or is forfeited or otherwise
terminated, surrendered or canceled as to any shares, or if any shares of
Common Stock are surrendered to the Corporation in connection with any Award
(whether or not such surrendered shares were acquired pursuant to any Award),
the shares subject to such Award and the surrendered shares shall thereafter
be available for further Awards under the Plan; provided, however, that any
such shares that are surrendered to the Corporation in connection with any
Award or that are otherwise forfeited after issuance shall not be available
for purchase pursuant to incentive stock options intended to qualify under
Code section 422.
(b) Maximum Awards. Subject to adjustments as provided in
Section 7(f) and Section 7(g)(ii), the maximum number of shares of Common
Stock subject to Awards of any combination that may be granted during any one
calendar year of the Corporation to any one individual under this Plan shall
be limited to 250,000.
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5. PARTICIPATION
Participation in the Plan shall be open to all persons who are at the
time of the grant of an Award employees (including persons who may become
employees), officers, directors, and consultants of the Corporation, or of any
Affiliate of the Corporation, as may be selected by the Administrator from
time to time. A Participant who has been granted an Award may, if he or she is
otherwise eligible, be granted additional Awards if the Administrator so
determines.
6. AWARDS
The Administrator, in its sole discretion, establishes the terms of
all Awards granted under the Plan. All Awards shall be subject to the terms
and conditions provided in the Grant Agreement.
(a) Stock Options. The Administrator may from time to time
grant to eligible Participants Awards of incentive stock options as that term
is defined in Code section 422 or nonqualified stock options; provided,
however, that Awards of incentive stock options shall be limited to employees
of the Corporation or of any Parent or Subsidiary of the Corporation. Options
intended to qualify as incentive stock options under Code section 422 must
have an exercise price at least equal to Fair Market Value on the date of
grant or at least 110% of Fair Market Value in the case of a Ten-Percent
Stockholder, but nonqualified stock options may be granted with an exercise
price less than Fair Market Value. No stock option shall be an incentive stock
option unless so designated by the Administrator at the time of grant and such
designation is reflected in the Grant Agreement evidencing such stock option.
(b) Stock Appreciation Rights. The Administrator may from
time to time grant to eligible Participants Awards of Stock Appreciation
Rights ("SARs"). A SAR may be exercised in whole or in part as provided in the
applicable Grant Agreement and entitles the Participant to receive, subject to
the provisions of the Plan and the Grant Agreement, a payment having an
aggregate value equal to the product of (i) the excess of (A) the Fair Market
Value on the exercise date of one share of Common Stock over (B) the base
price per share specified in the Grant Agreement, multiplied by (ii) the
number of shares covered by the SAR, or portion thereof, which is exercised.
Payment by the Corporation of the amount receivable upon any exercise of a SAR
may be made by the delivery of Common Stock or cash, or any combination of
Common Stock and cash, as specified in the Grant Agreement. If upon settlement
of the exercise of a SAR a Participant is to receive a portion of such payment
in shares of Common Stock, the number of shares shall be determined by
dividing such portion by the Fair Market Value of a share of Common Stock on
the exercise date. No fractional shares shall be used for such payment and the
Administrator shall determine whether cash shall be given in lieu of such
fractional shares or whether such fractional shares shall be eliminated.
(c) Stock Awards. The Administrator may from time to time
grant restricted or unrestricted stock Awards to eligible Participants in such
amounts, on such terms and conditions (which terms and conditions may
condition the vesting or payment of Stock Awards on the achievement of one or
more Performance Goals), and for such
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considerations, including no consideration or such minimum consideration as
may be required by law, as it shall determine.
(d) Phantom Stock. The Administrator may from time to time
grant Awards to eligible Participants denominated in stock-equivalent units
("Phantom Stock") in such amounts and on such terms and conditions as it shall
determine, which terms and conditions may condition the vesting or payment of
Phantom Stock on the achievement of one or more Performance Goals. Phantom
Stock units granted to a Participant shall be credited to a bookkeeping
reserve account solely for accounting purposes and shall not require a
segregation of any of the Corporation's assets. An Award of Phantom Stock may
be settled in Common Stock, in cash, or in a combination of Common Stock and
cash, as specified in the Grant Agreement. Except as otherwise provided in the
applicable Grant Agreement, the Participant shall not have the rights of a
stockholder with respect to any shares of Common Stock represented by a
Phantom Stock unit solely as a result of the grant of a Phantom Stock unit to
the Participant.
(e) Performance Awards. The Administrator may, in its
discretion, grant performance Awards, which become payable on account of
attainment of one or more Performance Goals established by the Administrator.
Performance Awards may be paid by the delivery of Common Stock or cash, or any
combination of Common Stock and cash, as specified in the Grant Agreement.
7. MISCELLANEOUS
(a) Investment Representations. The Administrator may
require each person acquiring shares of Common Stock pursuant to Awards
hereunder to represent to and agree with the Corporation in writing that such
person is acquiring the shares without a view to distribution thereof. The
certificates for such shares may include any legend that the Administrator
deems appropriate to reflect any restrictions on transfer. All certificates
for shares issued pursuant to the Plan shall be subject to such stock transfer
orders and other restrictions as the Administrator may deem advisable under
the rules, regulations and other requirements of the Securities and Exchange
Commission, any stock exchange upon which the Common Stock is then listed or
interdealer quotation system upon which the Common Stock is then quoted, and
any applicable federal or state securities laws. The Administrator may place a
legend or legends on any such certificates to make appropriate reference to
such restrictions.
(b) Compliance with Securities Law. Each Award shall be
subject to the requirement that if, at any time, counsel to the Corporation
shall determine that the listing, registration or qualification of the shares
subject to such an Award upon any securities exchange or interdealer quotation
system or under any state or federal law, or the consent or approval of any
governmental or regulatory body, or that the disclosure of nonpublic
information or the satisfaction of any other condition is necessary in
connection with the issuance or purchase of shares under such an Award, such
Award may not be exercised, in whole or in part, unless such satisfaction of
such condition shall have been effected on conditions acceptable to the
Administrator. Nothing herein shall be deemed to require the Corporation to
apply for or to obtain such listing, registration or qualification, or to
satisfy such condition.
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(c) Withholding of Taxes. Participants and holders of Awards
shall pay to the Corporation or its Affiliate, or make provision satisfactory
to the Administrator for payment of, any taxes required to be withheld in
respect of Awards under the Plan no later than the date of the event creating
the tax liability. The Corporation or its Affiliate may, to the extent
permitted by law, deduct any such tax obligations from any payment of any kind
otherwise due to the Participant or holder of an Award. In the event that
payment to the Corporation or its Affiliate of such tax obligations is made in
shares of Common Stock, such shares shall be valued at Fair Market Value on
the applicable date for such purposes.
(d) Loans. The Corporation or its Affiliate may make or
guarantee loans to Participants to assist Participants in exercising Awards
and satisfying any withholding tax obligations.
(e) Transferability. Except as otherwise determined by the
Administrator or provided in a Grant Agreement, no Award granted under the
Plan shall be transferable by a Participant except by will or the laws of
descent and distribution. Unless otherwise determined by the Administrator in
accordance with the provisions of the immediately preceding sentence, during
the lifetime of the Participant, the Award may be exercised only by the
Participant or, during the period the Participant is under a legal disability,
by the Participant's guardian or legal representative. Except as provided
above, the Award may not be assigned, transferred, pledged, hypothecated or
disposed of in any way (whether by operation of law or otherwise) and shall
not be subject to execution, attachment or similar process.
(f) Capital Adjustments. In the event of any change in the
outstanding Common Stock by reason of any stock dividend, split-up, stock
split, recapitalization, reclassification, combination or exchange of shares,
merger, consolidation, liquidation or the like, the Administrator may, in its
discretion, provide for a substitution for or adjustment in (i) the number and
class of shares of Common Stock subject to outstanding Awards, (ii) the
exercise price of Stock Options and the base price upon which payments under
SARs are determined, (iii) the aggregate number and class of Shares for which
Awards thereafter may be made under this Plan, (iv) the maximum number of
shares of Common Stock with respect to which a Participant may be granted
Awards during the period specified in Section 4(b) hereof.
(g) Modification, Substitution of Awards.
(i) Subject to the terms and conditions of this Plan,
the Administrator may modify the terms of any outstanding Awards; provided,
however, that no modification of an Award shall, without the consent of the
Participant, alter or impair any of the Participant's rights or obligations
under such Award.
(ii) Anything contained herein to the contrary
notwithstanding, Awards may, at the discretion of the Administrator, be
granted under this Plan in substitution for stock options and other awards
covering capital stock of another corporation which is merged into,
consolidated with, or all or a substantial portion of the property or stock of
which is acquired by, the Corporation or one of its Affiliates. The terms and
conditions of the substitute Awards so granted may vary from the terms and
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conditions set forth in this Plan to such extent as the Administrator may deem
appropriate in order to conform, in whole or part, to the provisions of the
awards in substitution for which they are granted. Such substitute Awards
granted hereunder shall not be counted toward the limit imposed by Section
4(b) hereof, except to the extent it is determined by the Administrator that
counting such Awards is required in order for Awards hereunder to be eligible
to qualify as "performance-based compensation" within the meaning of Section
162(m) of the Code.
(h) Foreign Employees. Without amendment of this Plan, the
Adminstrator may grant Awards to Participants who are subject to the laws of
foreign countries or jurisdictions on such terms and conditions different from
those specified in this Plan as may in the judgement of the Administrator be
necessary or desirable to foster and promote achievement of the purposes of
this Plan. The Administrator may make such modifications, amendments,
procedures, sub-plans and the like as may be necessary or advisable to comply
with provisions of laws of other countries or jurisdictions in which the
Corporation or any of its Affiliates operate or have employees.
(i) Termination, Amendment and Modification of the Plan. The
Board may amend, alter or terminate the Plan, or portion thereof, at any time.
(j) Non-Guarantee of Employment or Service. Nothing in the Plan
or in any Grant Agreement shall confer on an individual any legal or equitable
right against the Corporation, any Affiliate or the Administrator, except as
expressly provided in the Plan or the Grant Agreement. Nothing in the Plan or
in any Grant Agreement thereunder shall (i) constitute inducement,
consideration, or contract for employment or service between an individual and
the Corporation or any Affiliate; (ii) confer any right on an individual to
continue in the service of the Corporation or any Affiliate; or (iii) shall
interfere in any way with the right of the Corporation or any Affiliate to
terminate such service at any time with or without cause or notice, or to
increase or decrease compensation for such service.
(k) Other Employee Benefits. Except as to plans that by their
terms include such amounts as compensation, the amount of any compensation
deemed to be received by a Participant as a result of the exercise of an Award
or the sale of shares received upon such exercise will not constitute
compensation with respect to which any other employee benefits of such
Participant are determined, including, without limitation, benefits under any
bonus, pension, profit-sharing, life insurance or salary continuation plan,
except as otherwise specifically determined by the Administrator.
(l) No Trust or Fund Created. Neither the Plan nor any Award
shall create or be construed to create a trust or separate fund of any kind or
a fiduciary relationship between the Corporation and a Participant or any
other person. To the extent that any Participant or other person acquires a
right to receive payments from the Corporation pursuant to an Award, such
right shall be no greater than the right of any unsecured general creditor of
the Corporation.
(m) Governing Law. The validity, construction and effect of the
Plan, of Grant Agreements entered into pursuant to the Plan, and of any rules,
regulations, determinations or decisions made by the Administrator relating to
the Plan or such Grant
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Agreements, and the rights of any and all persons having or claiming to have
any interest therein or thereunder, shall be determined exclusively in
accordance with applicable federal laws and the laws of the State of Delaware
without regard to its conflict of laws principles.
(n) Effective Date, Termination Date. The Plan is effective as
of May 14, 2001, the date on which the Plan was adopted by the Board, subject
to the approval of the stockholders of the Corporation within twelve months of
such effective date. No Award shall be granted under the Plan after the close
of business on May 14, 2011. Subject to other applicable provisions of the
Plan, all Awards made under the Plan prior to such termination of the Plan
shall remain in effect until such Awards have been satisfied or terminated in
accordance with the Plan and the terms of such Awards.