INCARA PHARMACEUTICALS CORPORATION
1999 EQUITY INCENTIVE PLAN
1. Purpose.
The purpose of the Incara Pharmaceuticals Corporation 1999 Equity
Incentive Plan (the "Plan") is to provide incentives for Incara Pharmaceuticals
Corporation (the "Company") to attract, retain, motivate and provide incentive
to eligible persons whose contributions are important to the success of the
Company by offering them an opportunity to participate in the Company's future
through awards entitling such persons to acquire shares of the Company's Common
Stock, $0.001 par value ("Common Stock").
2. Type of Awards and Administration.
(a) Administration. The Plan will be administered by the Board of
Directors or the Compensation Committee of the Board of Directors (the
"Committee"), whose construction and interpretation of the terms and provisions
of the Plan shall be final and conclusive. The delegation of powers to the
Committee shall be consistent with applicable laws or regulations (including,
without limitation, applicable state law and Rule 16b-3 promulgated under the
Securities Exchange Act of 1934 (the "Exchange Act"), or any successor rule
("Rule 16b-3")). The Board of Directors or the Committee shall have authority,
subject to the express provisions of the Plan, to grant Restricted Stock Awards
(as defined in Section 5 below), to amend outstanding Restricted Stock Awards,
to construe the respective award agreements and the Plan, to prescribe, amend
and rescind rules and regulations relating to the Plan, to determine the terms
and provisions of the respective award agreements, which need not be identical,
and to make all other determinations in the judgment of the Board of Directors
or the Committee necessary or desirable for the administration of the Plan. The
Board of Directors or the Committee may correct any defect or supply any
omission or reconcile any inconsistency in the Plan or in any award agreement in
the manner and to the extent it shall deem expedient to carry the Plan into
effect and it shall be the sole and final judge of such expediency. No director
or person acting pursuant to authority delegated by the Board of Directors or
the Committee shall be liable for any action or determination under the Plan
made in good faith. Subject to adjustment as provided in Section 11 below, the
aggregate number of shares of Common Stock that may be subject to Restricted
Stock Awards granted to any person in a calendar year shall not exceed 500,000
shares.
(b) Applicability of Rule 16b-3. Those provisions of the Plan which
make express reference to Rule 16b-3 shall apply only to such persons as are
required to file reports under Section 16(a) of the Exchange Act (a "Reporting
Person").
3. Eligibility.
(a) General. Restricted Stock Awards may be granted to persons who are,
at the time of grant, employees, officers or consultants of the Company as
defined in Sections 424(e) and
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424(f) of the Code ("Participants"). A Participant who has been granted a
Restricted Stock Award may, if he or she is otherwise eligible, be granted
additional Restricted Stock Awards if the Board or the Committee shall so
determine.
(b) Grant of Awards to Reporting Persons. The selection of an officer
who is a Reporting Person (as the term "officer" is defined for purposes of Rule
16b-3) as a recipient of Restricted Stock Award, the vesting of the Restricted
Stock Award and the number of shares subject to the Restricted Stock Award shall
be determined either by the Board of Directors or the Committee.
4. Stock Subject to Plan.
The stock subject to Restricted Stock Awards granted under the Plan
shall be shares of authorized but unissued or reacquired Common Stock. Subject
to adjustment as provided in Section 11 below, the maximum number of shares of
Common Stock of the Company which may be issued and sold under the Plan is
1,400,000 shares (the "Shares").
5. Terms and Conditions of Awards of Restricted Stock.
(a) General Terms. The Board of Directors or the Committee shall have
full and complete authority and discretion, except as expressly limited by the
Plan, to grant awards entitling the Participant to receive Shares of Common
Stock ("Restricted Stock Award(s)") and to provide the terms and conditions
(which need not be identical among Participants) thereof. Restricted Stock
Awards shall be evidenced by written agreements ("Stock Award Agreements") in
such form as the Board or the Committee from time to time shall approve. In
particular, the Board or the Committee shall have the power to determine:
(i) which of the Participants are eligible to receive
Restricted Stock Awards under the Plan and the number of Shares to be
subject to such awards;
(ii) the vesting period or performance criteria, if any,
applicable to each Restricted Stock Award, which period or criteria
need not be the same for all Restricted Stock Awards;
(iii) the payment, if any, to be made by the Participant in
consideration of the Restricted Stock Award or the Shares subject to
the Restricted Stock Award. Any Restricted Stock Award may be made for
past services already rendered to the Company (provided that the
Participant pays the Company in cash the par value of the Shares
subject to the award) or may provide for payment of cash or deferred
consideration which is less than the fair market value of the Common
Stock subject to the award at the date of grant. Any such Restricted
Stock Award may be on the basis that the Shares subject to the award
may be repurchased by the Company at a fixed price or at a price
established by formula upon specified circumstances;
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(iv) the effect which specific events designated by the Board
of Directors or the Committee are to have on the vesting period, which
shall be incorporated into the related Stock Award Agreement executed
by the Company and the Participant; and
(v) the restrictions on transferability applicable to each
Restricted Stock Award or the Shares subject to such award.
6. Vesting of Stock Subject to Restricted Stock Awards.
(a) Vesting Restrictions. Restricted Stock Awards shall be subject to
the restrictions, which shall be incorporated into the related Stock Award
Agreement executed by the Company and the Participant, that the Shares subject
to such awards:
(i) may be subject to vesting periods based on continued
employment or consulting with the Company; and/or
(ii) may be subject to forfeiture for any portion of said
Shares that do not vest.
(b) Vesting Period. Vesting of Shares subject to Restricted Stock
Awards shall be at the times or upon the events determined by the Board or the
Committee at the time of grant and set forth in the applicable Stock Award
Agreement unless such vesting periods are accelerated in accordance with Section
12 below or extended in accordance with subsection (c) below.
(c) Extension of Vesting. Unless waived by the Participant, the vesting
periods contained herein or in the applicable Stock Award Agreement shall be
subject to extension in the event the specified vesting period occurs during a
"Black-Out Period," as defined in the next sentence, on the terms and conditions
to be set forth in the applicable Stock Award Agreement. For purposes of the
Plan, "Black-Out Period" shall mean any period of time during which the
Participant is unable to sell Shares as a result of legal or contractual
restrictions on such sale, including but not limited to periods in which
(i) the Participant is subject to a "lock-up" agreement with a
third party executed in connection with a public offering or other
financing transaction by the Company prohibiting the sale by
Participant of shares of the Company's Common Stock for a specified
period of time without such third party's consent,
(ii) the Participant is subject to restrictions on trading
imposed by the Company under applicable securities laws, or
(iii) the Company prohibits the disposition of any or all of a
Participant's Shares by limiting the number of Shares sold by a broker
designated by the Company.
7. Nontransferability of Award.
(a) No Restricted Stock Award granted under this Plan shall be
assignable or otherwise transferable by the Participant except by will or by the
laws of descent and distribution or
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pursuant to a qualified domestic relations order as defined in the Internal
Revenue Code (the "Code") or Title I of the Employee Retirement Income Security
Act, or the rules thereunder, except as set forth in subsections (b), (c) and
(d) hereof.
(b) The Board of Directors or the Committee may, in its discretion,
authorize all or a portion of any Restricted Stock Awards granted to a
Participant to be on terms which permit transfer by such Participant to (i) the
spouse, children or grandchildren of the Participant ("Immediate Family
Members"), (ii) a trust or trusts for the exclusive benefit of the Participant
or such Immediate Family Members, or (iii) a partnership in which such Immediate
Family Members are the only partners (individually or collectively, the
"Permitted Transferee(s)"), provided that (w) the Restricted Stock Award must be
held by the Participant for a period of at least one month prior to transfer,
(x) there may be no consideration for any such transfer, (y) the Stock Award
Agreement pursuant to which such Restricted Stock Awards are granted must be
approved by the Board of Directors or the Committee, and must expressly provide
for transferability in a manner consistent with this Section, and (z) subsequent
transfers of transferred Restricted Stock Awards shall be prohibited except by
will or the laws of descent and distribution or pursuant to a qualified domestic
relations order as defined in the Code or Title I of the Employee Retirement
Income Security Act, or the rules thereunder. Following transfer, any such
Restricted Stock Awards shall continue to be subject to the same terms and
conditions as were applicable immediately prior to transfer, provided that for
purposes of the Plan the term "Participant" shall be deemed to refer to the
Permitted Transferee.
(c) The events of termination of employment or consulting shall
continue to be applied with respect to the original Participant. A Restricted
Stock Award may be exercised during the lifetime of the Participant only by the
Participant or Permitted Transferees. In the event a Participant dies or becomes
disabled during his or her employment by the Company, his or her Restricted
Stock Award shall thereafter be exercisable, during the period specified in the
award agreement, by his or her executors or administrators to the full extent to
which such Restricted Stock Award was exercisable by the Participant at the time
of his or her death or disability.
(d) Transfer or sale of the Restricted Stock Awards and/or Shares
issued upon satisfaction of Restricted Stock Awards are subject to restrictions
on transfer imposed by any applicable state and federal securities laws.
8. Effect of Termination of Employment or Other Relationship.
Except as otherwise determined by the Board or the Committee at the
date of grant of a Restricted Stock Award, and subject to the provisions of the
Plan, a Restricted Stock Award shall terminate immediately upon the termination
of the Participant's employment or consulting with the Company and all Unvested
Shares shall be forfeited.
9. Additional Award Provisions.
The Board of Directors or the Committee may, in its sole discretion,
include additional provisions in agreements covering awards granted under the
Plan, including without limitation restrictions on transfer, purchase or
repurchase rights, rights of first refusal, or such other
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provisions as shall be determined by the Board of Directors or the Committee;
provided, that such additional provisions shall not be inconsistent with any
other term or condition of the Plan.
10. General Restrictions.
(a) Investment Representations. The Company may require any person to
whom a Restricted Stock Award is granted, as a condition of the Company issuing
Shares upon vesting of such award, to (i) give written assurances in substance
and form satisfactory to the Company to the effect that such person is acquiring
the Shares subject to the award for his or her own account for investment and
not with any present intention of selling or otherwise distributing the same,
and to such other effects as the Company deems necessary or appropriate in order
to comply with federal and applicable state securities laws, or (ii) comply with
covenants or representations made by the Company in connection with any public
offering of its Common Stock, including executing any "lock-up" agreement or
other restriction on transferability.
(b) Compliance With Securities Law. Each Restricted Stock Award shall
be subject to the requirement that if, at any time, the listing, registration or
qualification of the shares of Common Stock subject to such award upon any
securities exchange or automated 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 non-public information or the satisfaction of any other
condition is necessary as a condition of, or in connection with the issuance or
purchase of Shares thereunder, the Company shall have no obligation to issue or
deliver certificates evidencing such Shares, in whole or in part, unless such
listing, registration, qualification, consent or approval, or satisfaction of
such condition shall have been effected or obtained on conditions acceptable to
the Committee or the Board of Directors. Nothing herein shall be deemed to
require the Company to apply for or to obtain such listing, registration or
qualification, or to satisfy such condition and the Company shall have no
liability for any inability or failure to do so.
11. Adjustment Provisions for Recapitalizations, and Related Transactions.
(a) Recapitalizations and Related Transactions. Subject to any required
action by the Company's stockholders, if, through or as a result of any
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other similar transaction, (i) the outstanding shares of Common Stock
are increased, decreased or exchanged for a different number or kind of shares
or other securities of the Company, or (ii) additional shares or new or
different shares or other non-cash assets are distributed with respect to such
shares of Common Stock or other securities, an appropriate and proportionate
adjustment shall be made in (x) the maximum number and kind of Shares reserved
for issuance under or otherwise referred to in the Plan, (y) the number and kind
of Shares or other securities subject to any then outstanding Restricted Stock
Awards under the Plan, and (z) the price, if any, for each Share subject to any
then outstanding Restricted Stock Awards under the Plan, without changing the
aggregate purchase price as to which such Restricted Stock Awards remain
outstanding. Such adjustment shall be made by the Board or the Committee, whose
determination in that respect shall be final, binding and conclusive.
Notwithstanding the foregoing, no adjustment shall be made pursuant to this
Section 11 if such adjustment (i) would cause the Plan to fail to comply with
Rule 16b-3 or (ii) would be considered as the adoption of a new plan requiring
stockholder approval.
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12. Merger, Consolidation, Asset Sale, Liquidation, etc.
(a) Trigger Events. A "Trigger Event" shall occur in the event of
(i) the sale of all or substantially all of the assets of the
Company or a consolidation or merger in which outstanding shares of
Common Stock are exchanged for securities, cash or other property of
any other corporation or business entity where the stockholders of the
Company immediately prior to the merger or consolidation do not
beneficially own, immediately after the merger or consolidation, shares
of the corporation issuing cash or securities in the merger or
consolidation entitling such stockholders to more than 50% of all votes
(without consideration of the rights of any class of stock to elect
directors by a separate class vote) to which all stockholders of such
corporation would be entitled in the election of directors or in the
event of a liquidation of the Company;
(ii) the date the Company acquires knowledge that any person
or group deemed a person under Section 13(d)-3 of the Exchange Act
(other than the Company, any Subsidiary, any employee benefit plan of
the Company or of any Subsidiary or any entity holding shares of Common
Stock or other securities of the Company for or pursuant to the terms
of any such plan or any individual or entity or group or affiliate
thereof which acquired its beneficial ownership interest prior to the
date the Plan was adopted by the Board), in a transaction or series of
transactions, has become the beneficial owner, directly or indirectly
(with beneficial ownership determined as provided in Rule 13d-3, or any
successor rule, under the Exchange Act), of securities of the Company
entitling the person or group to 50% or more of all votes (without
consideration of the rights of any class of stock to elect directors by
a separate class vote) to which all stockholders of the Company would
be entitled in the election of directors were an election held on such
date; or
(iii) the date, during any period of two consecutive years,
when individuals who at the beginning of such period constitute the
Board of Directors of the Company cease for any reason to constitute at
least a majority thereof, unless the election, or the nomination for
election by the stockholders of the Company, of each new director was
approved by a vote of at least two-thirds of the directors then still
in office who were directors at the beginning of such period.
(b) Trigger Event Vesting. The vesting of all or any outstanding Shares
or Restricted Stock Awards shall accelerate immediately prior to the specified
effective date of a Trigger Event and upon written notice to the Participants
holding such outstanding Shares or awards.
(c) Substitute Awards. The Company may grant awards under the Plan in
substitution for awards held by employees of another corporation who become
employees of the Company, or a subsidiary of the Company, as the result of a
merger or consolidation of the employing corporation with the Company or a
subsidiary of the Company, or as a result of the acquisition by the Company, or
one of its subsidiaries, of property or stock of the employing corporation, or
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otherwise. Such substitution will be permissible if the holder of the
substituted award would have been eligible to be granted a Restricted Stock
Award under this Plan if the other Company had applied the rules of this Plan to
such grant. The Company may direct that substitute awards be granted on such
terms and conditions as the Committee or the Board of Directors considers
appropriate in the circumstances.
(d) Other Treatment of Awards. Subject to any greater rights granted to
Participants under the foregoing provisions of Section 12, in the event of the
occurrence of any Trigger Event, any outstanding Restricted Stock Awards will be
treated as provided in the applicable agreement or plan of merger,
consolidation, dissolution, liquidation, sale of assets or other corporate
transaction.
13. No Special Employment Rights.
Nothing contained in the Plan or in any Restricted Stock Award shall
confer upon any Participant any right with respect to the continuation of his or
her employment or consulting by the Company or interfere in any way with the
right of the Company at any time to terminate such employment or consulting or
to increase or decrease the compensation of the Participant.
14. Other Employee or Consulting Benefits.
Except as to plans which by their terms include such amounts as
compensation, the amount of any compensation deemed to be received by an
employee or consultant as a result of the receipt of a Restricted Stock Award or
the sale of Shares issued in satisfaction of such award will not constitute
compensation with respect to which any other employee or consulting benefits of
such employee or consultant are determined, including, without limitation,
benefits under any bonus, pension, profit-sharing, 401(k), employee stock
purchase plan, life insurance or salary continuation plan, except as otherwise
specifically determined by the Board of Directors.
15. Amendment of the Plan.
(a) The Board of Directors or the Committee may at any time, and from
time to time, modify or amend the Plan in any respect; provided, however, that
if at any time the approval of the stockholders of the Company is required under
Rule 16b-3 or any other applicable law or regulation, the Board of Directors or
the Committee may not effect such modification or amendment without such
approval.
(b) The modification or amendment of the Plan shall not, without the
consent of a Participant, affect his or her rights under an award previously
granted to him or her. With the consent of the Participant affected, the Board
of Directors or the Committee may amend outstanding award agreements in a manner
not inconsistent with the Plan. The Board of Directors or the Committee shall
have the right to amend or modify the terms and provisions of the Plan and of
any outstanding award to the extent necessary to ensure the qualification of the
Plan under Rule 16b-3.
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16. Withholding.
(a) The Company shall have the right to deduct from payments of any
kind otherwise due to the Participant any federal, state or local taxes of any
kind required by law to be withheld with respect to any Restricted Stock Awards
granted or Shares vesting under the Plan.
(b) Whenever shares of Common Stock are to be issued in satisfaction of
a Restricted Stock Award under this Plan, the Company may require the
Participant to remit to the Company, as of the date that the amount of tax to be
withheld is to be determined, an amount sufficient to satisfy federal, state and
local withholding tax obligations prior to the delivery of the certificates for
such Shares, whether or not the Participant is in the employ of the Company at
such time.
(c) If requested by the Company, each Participant may be required to
agree that sales of Shares subject to a Restricted Stock Award shall be sold by
Participant only through such broker-dealers, each of which is a member of the
National Association of Securities Dealers, Inc. ("NASD") as have been
designated by the Company (a "Designated Broker") whereby, upon the Participant
irrevocably electing to sell a portion of the Shares, the Designated Broker
irrevocably commits upon receipt of such Shares to forward directly to the
Company an amount sufficient to satisfy the federal, state and local withholding
tax obligation with respect to the vesting of the Shares.
(d) Notwithstanding the foregoing, in the case of a Reporting Person
whose awards have been granted in accordance with the provisions of Section 3(b)
herein, no election to use Shares for the payment of withholding taxes shall be
effective unless made in compliance with any applicable requirements of Rule
16b-3, if applicable.
17. Effective Date and Duration of the Plan.
(a) Effective Date. The Plan shall be effective as of September 23,
1999. Amendments to the Plan not requiring stockholder approval shall become
effective when adopted by the Board of Directors or the Committee. Subject to
this limitation, awards may be granted under the Plan at any time on or after
the effective date and before the date fixed for termination of the Plan.
(b) Termination. Unless terminated earlier by the Board of Directors or
the Committee, the Plan shall terminate as of the close of business on September
22, 2009. Any awards outstanding on such date shall continue to have force and
effect in accordance with the provisions of the agreements evidencing such
awards.
18. Provision for Foreign Participants.
The Board of Directors or the Committee may, without amending the Plan,
modify awards granted to Participants who are foreign nationals or employed
outside the United States to recognize differences in laws, rules, regulations
or customs of such foreign jurisdictions with respect to tax, securities,
currency, employee benefit or other matters.
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19. Governing Law.
The provisions of this Plan shall be governed and construed in
accordance with the laws of the State of Delaware without regard to the
principles of conflicts of laws.
Adopted by the Board of Directors and the Compensation Committee of the Board of
Directors on September 23, 1999.
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INCARA PHARMACEUTICALS CORPORATION
RESTRICTED STOCK AWARD AGREEMENT
This AGREEMENT is made between <<LastName>> ("Participant") and Incara
Pharmaceuticals Corporation, a Delaware corporation (the "Company"), as of
September 23, 1999.
RECITALS
WHEREAS, Participant is an employee or consultant of the Company and the
Participant's continued retention is considered by the Company to be important
for the Company's growth;
WHEREAS, to give Participant an opportunity to acquire an equity interest
in the Company as an incentive for Participant to continue to participate in the
affairs of the Company, the Company is willing to grant to Participant and
Participant desires to acquire an award (a "Restricted Stock Award") entitling
Participant to receive shares of the Company's Common Stock, $0.001 par value
("Common Stock"), according to the terms and conditions contained herein and in
the Company's 1999 Equity Incentive Plan (the "Plan");
WHEREAS, the Participant currently has stock option agreements with the
Company;
WHEREAS, the Company and the Participant agree to cancel certain of the
Participant's stock option agreements in exchange for the granting of this
Restricted Stock Award; and
WHEREAS, pursuant to the Plan, this Agreement grants the Company a
repurchase option exercisable in certain instances on the terms and conditions
set forth herein.
NOW, THEREFORE, it is hereby agreed as follows:
1. Stock Options. The Participant and the Company hereby cancel vested
stock options held by the Participant for an aggregate of <<JobTitle>> shares of
the Company's Common Stock, all of which options have an exercise price of more
than $3.00 per share.
2. Stock Award. Subject to the terms and conditions hereof, the Company
hereby grants Participant a Restricted Stock Award entitling Participant to
receive an aggregate of <<JobTitle>> shares (the "Shares") of the Company's
Common Stock in consideration of the cancellation of stock options, services
rendered to the Company and payment in cash of the par value of the Shares
($0.001 per share). This Restricted Stock Award and the grant made hereunder
shall become null and void unless Participant accepts this Restricted Stock
Award by October 13, 1999 by executing it in the space provided at the end of
the Agreement.
3. Vesting.
(a) Stock certificates representing the shares subject to the
Restricted Stock Award granted hereunder are issuable to Participant only
if the Participant's employment or consulting services with the Company are
continuing until the dates specified below, subject to extension as
provided in paragraph (b) below.
Initial Cumulative Shares
Vesting Date Becoming Nonforfeitable
------------ -----------------------
March 1, 2000 33 1/3 % of Shares
April 1, 2000 66 2/3 % of Shares
May 1, 2000 100% of Shares
(b) Any or all of the Initial Vesting Dates set forth above shall be
automatically extended to a new date (the "New Vesting Date") without any
action on the part of the Participant, if the applicable Initial Vesting
Date occurs during a Black-Out Period. A "Black-Out Period" shall mean any
period of time during which the Participant is unable to sell Shares as a
result of legal or contractual restrictions on such sale, including but not
limited to periods in which
(i) the Participant is subject to a "lock-up" agreement
with a third party executed in connection with a
public offering or other financing transaction by
the Company prohibiting the sale by Participant of
shares of the Company's Common Stock for a specified
period of time without such third party's consent,
(ii) the Participant is subject to restrictions on
trading imposed by the Company under applicable
securities laws, or
(iii) the Company prohibits the disposition of any or all
of a Participant's Shares by limiting the number of
Shares sold by a Designated Broker pursuant to
clause 3(c) below.
In such event, the Shares shall vest on the first day when all the
restrictions specified in clauses 3(b)(i), (ii) and (iii) have lapsed.
(c) The Company may require that the Participant sell his/her Shares
through a designated broker dealer that is a member of the National
Association of Securities Dealers, Inc. ("NASD") (as such, the "Designated
Broker"). In such event, the Shares shall vest on the date (after the close
of any applicable Black-Out Period) when actually sold by the Designated
Broker. Shares sold by the Designated Broker will be pooled with other
Participant requests. If fewer than all the pooled Shares are sold, each
Participant will be allocated a pro-rata portion of the stock sold on each
day until all requested Shares are sold.
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(d) Participant acknowledges that stock market conditions or other
factors may delay the disposition of Shares by the Participant or by the
Designated Broker, which would delay receipt by Participant of net proceeds
from the disposition. The Participant acknowledges that he/she would assume
the full risk of a decrease in the selling price of Shares during such
periods of time.
(e) Participant acknowledges that, subject to the provisions of (i)
this Section 3, and (ii) Section 12 of the Plan, the dates for the vesting
of Shares (whether such dates are Initial Vesting Dates or New Vesting
Dates) will be interpreted in the sole discretion of the Company.
(f) For purposes of this Agreement, "Vested Shares" shall mean Shares
subject to this Restricted Stock Award that have vested under the preceding
paragraphs; "Unvested Shares" shall mean Shares not so vested; "Vesting
Dates" shall mean the Initial Vesting Dates or any New Vesting Dates, as
applicable.
4. Termination of Employment.
(a) If Participant's employment or consulting with the Company is
terminated by the Company without cause, including in the case of
Participant's death or disability, the Participant shall immediately
receive an additional six (6) months of vesting for Unvested Shares and the
Company shall have the Company's Transfer Agent (the "Transfer Agent")
issue a stock certificate for all Vested Shares held by such Participant.
All Unvested Shares shall be forfeited and shall be cancelled by the
Company.
(b) If Participant's employment with the Company is terminated for any
reason other than as set forth in Section 4(a) above, this Restricted Stock
Award will terminate and expire immediately upon such termination. All
Unvested Shares shall be forfeited and shall be cancelled by the Company.
Participant acknowledges that if Participant is not an employee or
consultant of the Company when a Black-Out Period ends, any Shares subject
to the extended vesting provisions of the Black-Out Period will not vest
and the Shares will be forfeited and cancelled by the Company.
5. Transferability of the Award; Certificates.
(a) This Restricted Stock Award may not be sold, transferred, pledged,
hypothecated or otherwise disposed of, except as provided for in the Plan
and except to (i) the spouse, children or grandchildren of the Participant
("Immediate Family Members"), (ii) a trust or trusts for the exclusive
benefit of Participant or such Immediate Family Members, or (iii) a
partnership in which such Immediate Family Members are the only partners
(individually or collectively, "Permitted Transferee(s)"), provided that
(w) the award must be held by the Participant for a period of at least one
month prior to transfer, (x) there may be no consideration received by
Participant for any such transfer, (y) subsequent transfers of transferred
awards shall be prohibited except by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined
in the Internal Revenue Code (the "Code") or Title I of the Employee
Retirement
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Income Security Act, or the rules thereunder, and except in accordance with
this Agreement. Transfer or sale of said Award is subject to restrictions
on transfer imposed by any applicable state and federal securities laws.
Any Permitted Transferee shall hold such award subject to all the
provisions hereof and shall acknowledge the same by signing a copy of this
Agreement.
(b) If requested by the Company or an underwriter of a public offering
of the Company's securities, Participant shall execute and deliver to the
Company a "lock-up" agreement requiring that the Participant not sell,
transfer or dispose of any or all of the Unvested Shares subject to this
Restricted Stock Award, during specified periods, in form and substance
satisfactory to the Company. Participant further agrees that the Company
may impose stop-transfer restrictions with respect to the Shares subject to
the foregoing restrictions until the end of such period.
(c) If the Participant has not sold the Shares, upon satisfaction of
the applicable vesting periods set forth in Section 3 of this Agreement and
compliance with the other terms and conditions of this Agreement, the
Company shall have the Transfer Agent issue to Participant certificates
evidencing the Shares issuable pursuant to this award as of the applicable
Vesting Date. The certificate or certificates evidencing the Shares subject
to this award shall be endorsed with any legend required by law or
necessary to reflect the terms of this Agreement.
6. Notices. Notices required hereunder shall be given in person or by
registered mail to the address of Participant shown on the records of the
Company, and to the Company at its principal executive offices.
7. Survival of Terms. This Agreement shall apply to and bind Participant
and the Company and their respective permitted assignees and transferees, heirs,
legatees, executors, administrators and legal successors.
8. Withholding.
(a) The Participant acknowledges and agrees that the Company has the
right to withhold from payments of any kind otherwise due to the
Participant, or to require the Participant to pay to the Company an amount
sufficient to pay any federal, state or local taxes of any kind required by
law to be withheld by the Company with respect to this award or the
issuance to the Participant of Shares subject to this award. The Company
may require the Participant to remit to the Company, at the date that the
amount of tax to be withheld is to be determined, an amount sufficient to
satisfy federal, state and local withholding tax obligations prior to the
delivery of the certificates for such Shares, whether or not the
Participant is in the employ of the Company at such time.
(b) If the Company requires Participant to sell her/her Shares only
through a Designated Broker, upon the Participant irrevocably electing to
sell a portion of the Shares the Participant agrees that the Designated
Broker is authorized upon disposition of such Shares to forward directly to
the Company an amount sufficient to satisfy the
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federal, state and local withholding tax obligation with respect to the
issuance of the Shares.
(c) The Participant acknowledges that he/she has been informed of the
availability and timing of making an election in accordance with Section
83(b) of the Code; and that the Participant is solely responsible for
making such election.
9. Representations. Participant has had an opportunity to review with
his/her own tax advisors the federal, state, local and foreign tax consequences
of this investment and the transactions contemplated by this Agreement.
Participant is relying solely on such advisors and not on any statements or
representations of the Company or any of its agents. Participant understands
that he/she (and not the Company) shall be responsible for his/her own tax
liability that may arise as a result of the transactions contemplated by this
Agreement.
10. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware.
Participant represents that he/she has read the Plan and this Agreement and
is familiar with their terms and provisions. Participant hereby agrees to accept
as binding, conclusive and final all decisions or interpretations of the Board
or the Committee upon any questions arising under the Plan or this Agreement.
IN WITNESS WHEREOF, this Agreement is deemed made as of the date first set
forth above.
INCARA PHARMACEUTICALS CORPORATION
By:______________________________
Title:___________________________
PARTICIPANT
_________________________________
Social Security No.:_____________
Address:_________________________
_________________________________
_________________________________
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INCARA PHARMACEUTICALS CORPORATION
RESTRICTED STOCK AWARD AGREEMENT
This AGREEMENT is made between <<LastName>> ("Participant") and
Incara Pharmaceuticals Corporation, a Delaware corporation (the "Company"), as
of September 23, 1999.
RECITALS
WHEREAS, Participant is an employee or consultant of the Company and the
Participant's continued retention is considered by the Company to be important
for the Company's growth;
WHEREAS, to give Participant an opportunity to acquire an equity interest
in the Company as an incentive for Participant to continue to participate in the
affairs of the Company, the Company is willing to grant to Participant and
Participant desires to acquire an award (a "Restricted Stock Award") entitling
Participant to receive shares of the Company's Common Stock, $0.001 par value
("Common Stock"), according to the terms and conditions contained herein and in
the Company's 1999 Equity Incentive Plan (the "Plan");
WHEREAS, the Participant currently has stock option agreements with the
Company;
WHEREAS, the Company and the Participant agree to cancel certain of the
Participant's stock option agreements in exchange for the granting of this
Restricted Stock Award; and
WHEREAS, pursuant to the Plan, this Agreement grants the Company a
repurchase option exercisable in certain instances on the terms and conditions
set forth herein.
NOW, THEREFORE, it is hereby agreed as follows:
1. Stock Options. The Participant and the Company hereby cancel unvested
stock options held by the Participant for an aggregate of <<JobTitle>> shares of
the Company's Common Stock, all of which options have an exercise price of more
than $3.00 per share.
2. Stock Award. Subject to the terms and conditions hereof, the Company
hereby grants Participant a Restricted Stock Award entitling Participant to
receive an aggregate of <<JobTitle>> shares (the "Shares") of the Company's
Common Stock in consideration of the cancellation of stock options, services
rendered to the Company and payment in cash of the par value of the Shares
($0.001 per share). This Restricted Stock Award and the grant made hereunder
shall become null and void unless Participant accepts this Restricted Stock
Award by October 13, 1999 by executing it in the space provided at the end of
the Agreement.
3. Vesting.
(a) Stock certificates representing the shares subject to the Restricted
Stock Award granted hereunder are issuable to Participant only if the
Participant's employment or consulting services with the Company are
continuing until the dates specified below, subject to extension as
provided in paragraph (b) below.
Initial Cumulative Shares
Vesting Date Becoming Nonforfeitable
------------ -----------------------
July 1, 2000 10% of Shares
October 1, 2000 20% of Shares
January 1, 2001 30% of Shares
April 1, 2001 40% of Shares
July 1, 2001 50% of Shares
October 1, 2001 60% of Shares
January 1, 2002 70% of Shares
April 1, 2002 80% of Shares
July 1, 2002 90% of Shares
October 1, 2002 100% of Shares
(b) Any or all of the Initial Vesting Dates set forth above shall be
automatically extended to a new date (the "New Vesting Date") without any action
on the part of the Participant, if the applicable Initial Vesting Date occurs
during a Black-Out Period. A "Black-Out Period" shall mean any period of time
during which the Participant is unable to sell Shares as a result of legal or
contractual restrictions on such sale, including but not limited to periods in
which
(i) the Participant is subject to a "lock-up"
agreement with a third party executed in
connection with a public offering or other
financing transaction by the Company prohibiting
the sale by Participant of shares of the
Company's Common Stock for a specified period of
time without such third party's consent,
(ii) the Participant is subject to restrictions on
trading imposed by the Company under applicable
securities laws, or
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(iii) the Company prohibits the disposition of any or
all of a Participant's Shares by limiting the
number of Shares sold by a Designated Broker
pursuant to clause 3(c) below.
In such event, the Shares shall vest on the first day when all the
restrictions specified in clauses 3(b)(i), (ii) and (iii) have lapsed.
(c) The Company may require that the Participant sell his/her
Shares through a designated broker dealer that is a member of the
National Association of Securities Dealers, Inc. ("NASD") (as such, the
"Designated Broker"). In such event, the Shares shall vest on the date
(after the close of any applicable Black-Out Period) when actually sold
by the Designated Broker. Shares sold by the Designated Broker will be
pooled with other Participant requests. If fewer than all the pooled
Shares are sold, each Participant will be allocated a pro-rata portion
of the stock sold on each day until all requested Shares are sold.
(d) Participant acknowledges that stock market conditions or
other factors may delay the disposition of Shares by the Participant or
by the Designated Broker, which would delay receipt by Participant of
net proceeds from the disposition. The Participant acknowledges that
he/she would assume the full risk of a decrease in the selling price of
Shares during such periods of time.
(e) Participant acknowledges that, subject to the provisions of
(i) this Section 3, and (ii) Section 12 of the Plan, the dates for the
vesting of Shares (whether such dates are Initial Vesting Dates or New
Vesting Dates) will be interpreted in the sole discretion of the
Company.
(f) For purposes of this Agreement, "Vested Shares" shall mean
Shares subject to this Restricted Stock Award that have vested under
the preceding paragraphs; "Unvested Shares" shall mean Shares not so
vested; "Vesting Dates" shall mean the Initial Vesting Dates or any New
Vesting Dates, as applicable.
4. Termination of Employment.
(a) If Participant's employment or consulting with the Company
is terminated by the Company without cause, including in the case of
Participant's death or disability, the Participant shall immediately
receive an additional six (6) months of vesting for Unvested Shares and
the Company shall have the Company's Transfer Agent (the "Transfer
Agent") issue a stock certificate for all Vested Shares held by such
Participant. All Unvested Shares shall be forfeited and shall be
cancelled by the Company.
(b) If Participant's employment with the Company is terminated
for any reason other than as set forth in Section 4(a) above, this
Restricted Stock Award will terminate and expire immediately upon such
termination. All Unvested Shares shall be forfeited and shall be
cancelled by the Company. Participant acknowledges that if Participant
is not an employee or consultant of the Company when a Black-Out Period
ends, any
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Shares subject to the extended vesting provisions of the Black-Out
Period will not vest and the Shares will be forfeited an cancelled by
the Company.
5. Transferability of the Award; Certificates.
(a) This Restricted Stock Award may not be sold, transferred,
pledged, hypothecated or otherwise disposed of, except as provided for
in the Plan and except to (i) the spouse, children or grandchildren of
the Participant ("Immediate Family Members"), (ii) a trust or trusts
for the exclusive benefit of Participant or such Immediate Family
Members, or (iii) a partnership in which such Immediate Family Members
are the only partners (individually or collectively, "Permitted
Transferee(s)"), provided that (w) the award must be held by the
Participant for a period of at least one month prior to transfer, (x)
there may be no consideration received by Participant for any such
transfer, (y) subsequent transfers of transferred awards shall be
prohibited except by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined in the
Internal Revenue Code (the "Code") or Title I of the Employee
Retirement Income Security Act, or the rules thereunder, and except in
accordance with this Agreement. Transfer or sale of said Award is
subject to restrictions on transfer imposed by any applicable state and
federal securities laws. Any Permitted Transferee shall hold such award
subject to all the provisions hereof and shall acknowledge the same by
signing a copy of this Agreement.
(b) If requested by the Company or an underwriter of a public
offering of the Company's securities, Participant shall execute and
deliver to the Company a "lock-up" agreement requiring that the
Participant not sell, transfer or dispose of any or all of the Unvested
Shares subject to this Restricted Stock Award, during specified
periods, in form and substance satisfactory to the Company. Participant
further agrees that the Company may impose stop-transfer restrictions
with respect to the Shares subject to the foregoing restrictions until
the end of such period.
(c) If the Participant has not sold the Shares, upon
satisfaction of the applicable vesting periods set forth in Section 3
of this Agreement and compliance with the other terms and conditions of
this Agreement, the Company shall have the Transfer Agent issue to
Participant certificates evidencing the Shares issuable pursuant to
this award as of the applicable Vesting Date. The certificate or
certificates evidencing the Shares subject to this award shall be
endorsed with any legend required by law or necessary to reflect the
terms of this Agreement.
6. Notices. Notices required hereunder shall be given in person or by
registered mail to the address of Participant shown on the records of the
Company, and to the Company at its principal executive offices.
7. Survival of Terms. This Agreement shall apply to and bind
Participant and the Company and their respective permitted assignees and
transferees, heirs, legatees, executors, administrators and legal successors.
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8. Withholding.
(a) The Participant acknowledges and agrees that the Company
has the right to withhold from payments of any kind otherwise due to
the Participant, or to require the Participant to pay to the Company an
amount sufficient to pay any federal, state or local taxes of any kind
required by law to be withheld by the Company with respect to this
award or the issuance to the Participant of Shares subject to this
award. The Company may require the Participant to remit to the Company,
at the date that the amount of tax to be withheld is to be determined,
an amount sufficient to satisfy federal, state and local withholding
tax obligations prior to the delivery of the certificates for such
Shares, whether or not the Participant is in the employ of the Company
at such time.
(b) If the Company requires Participant to sell her/her Shares
only through a Designated Broker, upon the Participant irrevocably
electing to sell a portion of the Shares the Participant agrees that
the Designated Broker is authorized upon disposition of such Shares to
forward directly to the Company an amount sufficient to satisfy the
federal, state and local withholding tax obligation with respect to the
issuance of the Shares.
(c) The Participant acknowledges that he/she has been informed
of the availability and timing of making an election in accordance with
Section 83(b) of the Code; and that the Participant is solely
responsible for making such election.
9. Representations. Participant has had an opportunity to review with
his/her own tax advisors the federal, state, local and foreign tax consequences
of this investment and the transactions contemplated by this Agreement.
Participant is relying solely on such advisors and not on any statements or
representations of the Company or any of its agents. Participant understands
that he/she (and not the Company) shall be responsible for his/her own tax
liability that may arise as a result of the transactions contemplated by this
Agreement.
10. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware.
Participant represents that he/she has read the Plan and this Agreement
and is familiar with their terms and provisions. Participant hereby agrees to
accept as binding, conclusive and final all decisions or interpretations of the
Board or the Committee upon any questions arising under the Plan or this
Agreement.
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IN WITNESS WHEREOF, this Agreement is deemed made as of the date first
set forth above.
INCARA PHARMACEUTICALS CORPORATION
By:______________________________
Title:___________________________
PARTICIPANT
_________________________________
Social Security No.:_____________
Address:_________________________
_________________________________
_________________________________
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