BONE CARE INTERNATIONAL, INC.
1996 STOCK OPTION PLAN
(As Amended Through February 4, 1999 and
Reflecting the 2-for-1 Stock Split Distributed November 14, 1997)
1. PLAN. To provide incentives to officers, key employees and
consultants of Bone Care International, Inc. (the "Company") and its
subsidiaries from time to time, and members of the Board of Directors of the
Company (the "Board") to contribute to the success and prosperity of the
Company, based upon the ownership of the common stock, no par value, of the
Company ("Common Stock"), the Committee hereinafter designated, may grant
nonqualified stock options to officers, key employees, consultants and eligible
members of the Board on the terms and subject to the conditions stated in this
Plan.
2. ELIGIBILITY. Officers, key employees and consultants of the Company
and its subsidiaries and members of the Board who are not employees of the
Company ("non-employee directors") shall be eligible, upon selection by the
Committee, to receive stock options as the Committee, in its discretion, shall
determine.
3. SHARES ISSUABLE. The maximum number of shares of Common Stock to be
available under this Plan pursuant to all grants of stock options hereunder
shall be 1,000,000, subject to adjustment in accordance with Section 5. Shares
of Common Stock subject to a stock option granted hereunder, which are not
issued by reason of the expiration, cancellation or other termination of such
stock option, shall again be available for future grants of stock options under
this Plan.
Shares of Common Stock to be issued may be authorized and unissued shares
of Common Stock, treasury stock, or a combination thereof.
To the extent required by Section 162(m) of the Internal Revenue Code of
1986, as amended (the "Code"), and the rules and regulations thereunder, the
maximum number of shares of Common Stock with respect to which options may be
granted during any calendar year to any person shall be 200,000, subject to
adjustment as provided in Section 5.
4. ADMINISTRATION OF THE PLAN. The Plan shall be administered by a
committee designated by the Board, which may be the whole Board (the
"Committee"), or may consist of two or more members of the Board, each of whom
may be a "Non-Employee Director," within the meaning of Rule 16b-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and an
"outside director" within the meaning of Section 162(m) under the Code.
The Committee shall, subject to the terms of this Plan, establish
eligibility guidelines, select officers, key employees, consultants and
non-employee directors for participation in this Plan and determine the number
of shares of Common Stock subject to a stock option granted hereunder, the
exercise price for such shares of Common Stock, the time and conditions of
vesting or exercise and all other terms and conditions of the stock option,
including, without limitation, the form of the option agreement. The Committee
may establish rules and regulations for the administration of the Plan,
interpret the Plan and impose, incidental to the grant of a stock option,
conditions with respect to the grant or award of stock options or competitive
employment or other activities not inconsistent with or conflicting with this
Plan. All such rules, regulations and interpretations relating to this Plan
adopted by the Committee shall be conclusive and binding on all parties. All
grants of stock options under this Plan shall be evidenced by written
agreements between the Company and the optionees, and no such grant shall
be valid until so evidenced.
5. CHANGES IN CAPITALIZATION. Appropriate adjustments shall be made by
the Committee in the maximum number of shares to be issued under the Plan and
the maximum number of shares which are subject to any stock option granted
hereunder, and the exercise price therefor, to give effect to any stock splits,
stock dividends and other relevant changes in the capitalization of the Company
occurring after the effective date of this Plan (which shall not include the
sale by the Company of shares of Common Stock or securities convertible into
shares of Common Stock).
6. EFFECTIVE DATE AND TERM OF PLAN. This Plan shall be submitted to the
shareholders of the Company for approval and, if approved, shall become
effective on the date thereof; provided, however, that this Plan and any
options granted hereunder shall be null and void in the event the Company's
registration statement under Section 12 of the Exchange Act does not become
effective on or prior to December 31, 1996. This Plan shall terminate ten
years after it becomes effective unless terminated prior thereto by action of
the Board. No further grants shall be made under this Plan after termination,
but termination shall not affect the rights of any optionee under any grants
made prior to termination.
7. AMENDMENTS. This Plan may be amended by the Board in any respect,
except that no amendment may be made without shareholder approval if such
amendment would (a) increase the maximum number of shares of Common Stock
available for issuance under this Plan (other than as provided in Section 5) or
(b) otherwise require shareholder approval.
8. GRANTS OF STOCK OPTIONS. Options to purchase shares of Common Stock
may be granted hereunder to such eligible officers, key employees, consultants,
and non-employee directors as may be selected by the Committee.
9. OPTION PRICE. The option price per share of Common Stock purchasable
upon exercise of an option granted hereunder shall be determined by the
Committee; provided, however, that the option price per share of Common Stock
purchasable upon exercise of an option grant under this Plan shall be 100% of
the fair market value of a share of Common Stock on the date of grant of such
option. For purposes hereof, "fair market value" shall be determined by the
Committee.
10. STOCK OPTION PERIOD. Each stock option granted hereunder may be
granted at any time on or after the effective date, and prior to the
termination, of this Plan. The Committee shall determine whether such stock
option shall become exercisable in cumulative or non-cumulative installments or
in full at any time. An exercisable stock option may be exercised in whole or
in part with respect to whole shares of Common Stock only. The period for the
exercise of each stock option shall be determined by the Committee.
11. EXERCISE OF STOCK OPTIONS. (a) Upon exercise, the option price may
be paid in cash, in previously owned shares of Common Stock (which the optionee
has held for at least six months or acquired on the open market and which the
optionee owns free and clear from all encumbrances) having a fair market value
on the date of exercise equal to the option price, or in a combination thereof.
The Company may arrange or approve of a cashless option exercise procedure
which complies with the provisions of Section 16 of the Exchange Act and the
rules and regulations thereunder.
(b) Unless otherwise specified in the agreement relating to an option, an
option may be exercised during an optionee's continued employment with the
Company or one of its subsidiaries, or service on the Board, as the case may
be, within the 30-day period following termination of such employment or
service, but only to the extent exercisable and within the term of such option
at the time of the termination of such employment or service; PROVIDED,
HOWEVER, that, unless otherwise specified in the agreement relating to an
option, if employment of the optionee by the Company or one of its subsidiaries
or service on the Board shall have terminated by reason of retirement after
age 60 or death, then the option may be exercised within the one-year period
following such termination of employment or service on the Board by the
optionee or the executor, administrator, personal representative, beneficiary
or heir of the optionee, but only to the extent exercisable and within the term
of such option at the time of such termination of employment or service.
(c) Unless otherwise specified in the agreement relating to an option, if
an optionee dies during the 30-day period or one-year period set forth in
Section 11(b) (or other period set forth in the agreement relating to an
option), each option held by the optionee shall be exercisable only to the
extent exercisable and within the term of such option at the date of the
optionee's death and may thereafter be exercised by the executor,
administrator, personal representative, beneficiary or heir of the optionee
within the one-year period following the date of the optionee's death.
(d) Unless otherwise specified in the agreement relating to an option, no
option shall be transferable other than by will or the laws of descent and
distribution or pursuant to beneficiary designation procedures approved by the
Company. Except to the extent permitted by the foregoing sentence, each option
may be exercised during the optionee's lifetime only by the optionee or the
optionee's legal representative or similar person. Except as permitted by the
second preceding sentence, no option hereunder shall be sold, transferred,
assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether
by operation of law or otherwise) or be subject to execution, attachment or
similar process. Upon any attempt to so sell, transfer, assign, pledge,
hypothecate, encumber or otherwise dispose of any option hereunder, such option
and all rights thereunder shall immediately become null and void.
12. ACCELERATION OF OPTIONS UPON A CHANGE IN CONTROL. The following
provisions shall apply in the event of a "Change in Control":
(a) In the event of a Change in Control, any stock options not previously
exercisable in full shall become fully exercisable.
(b) For purposes hereof, "Change in Control" means:
(1) The acquisition by any individual, entity or group (a "Person"),
including any "person" within the meaning of Section 13(d)(3) or 14(d)(2) of
the Exchange Act, of beneficial ownership within the meaning of Rule 13d-3
promulgated under the Exchange Act, of 50% or more of the then outstanding
shares of Common Stock (the "Outstanding Common Stock"); PROVIDED, HOWEVER,
that the following acquisitions shall not constitute a Change in Control: (A)
any acquisition by the Company, (B) any acquisition by an employee benefit plan
(or related trust)sponsored or maintained by the Company or any corporation
controlled by the Company, (C) any acquisition by an underwriter or
underwriters as part of a BONA FIDE public distribution of securities of the
Company or (D) any acquisition by any Person which beneficially owned as of the
effective date of this Plan, 30% or more of the outstanding Common Stock; and
PROVIDED FURTHER that, for purposes of clause (A), if any Person (other than
the Company or any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company) shall
become the beneficial owner of 50% or more of the outstanding Common Stock by
reason of an acquisition by the Company and such Person shall, after such
acquisition by the Company, become the beneficial owner of any additional
shares of the Outstanding Common Stock and such beneficial ownership is
publicly announced, such additional beneficial ownership shall constitute a
Change in Control;
(2) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of
such Board; PROVIDED, HOWEVER, that any individual who becomes a director of
the Company subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by the vote of at least a
majority of the directors then comprising the Incumbent Board shall be deemed
to have been a member of the Incumbent Board; and PROVIDED FURTHER, that no
individual who was initially elected as a director of the Company as a result
of an actual or threatened election contest, as such terms are used in Rule
14a-11 of Regulation 14A promulgated under the Exchange Act, or any other
actual or threatened solicitation of proxies or consents by or on behalf of any
Person other than the Board shall be deemed to have been a member of the
Incumbent Board;
(3) Approval by the shareholders of the Company of a reorganization,
merger or consolidation unless, in any such case, immediately after such
reorganization, merger or consolidation, (i) more than 50% of the then
outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation and more than 50% of the combined
voting power of the then outstanding securities of such corporation entitled to
vote generally in the election of directors is then beneficially owned,
directly or indirectly, by all or substantially all of the individuals or
entities who were the beneficial owners, respectively, of the Outstanding
Common Stock immediately prior to such reorganization, merger or consolidation
and in substantially the same proportions relative to each other as their
ownership, immediately prior to such reorganization, merger or consolidation,
of the Outstanding Common Stock, (ii) no Person (other than the Company, any
employee plan (or related trust) sponsored or maintained by the Company or the
corporation resulting from such reorganization, merger or consolidation (or any
corporation controlled by the Company) and any Person which beneficially owned,
immediately prior to such reorganization, merger or consolidation, directly or
indirectly, 30% or more of the Outstanding Common Stock) beneficially owns,
directly or indirectly, 50% or more of the then outstanding shares of common
stock of such corporation or 50% or more of the combined voting power of the
then outstanding securities of such corporation entitled to vote generally in
the election of directors and (iii) at least a majority of the members of the
board of directors of the corporation resulting from such reorganization,
merger or consolidation were members of the Incumbent Board at the time of the
execution of the initial agreement or action of the Board providing for such
reorganization, merger or consolidation; or
(4) Approval by the shareholders of the Company of (i) a plan of complete
liquidation or dissolution of the Company or (ii) the sale or other disposition
of all or substantially all of the assets of the Company other than to a
corporation with respect to which, immediately after such sale or other
disposition, (A) more than 50% of the then outstanding shares of common stock
thereof and more than 50% of the combined voting power of the then outstanding
securities thereof entitled to vote generally in the election of directors is
then beneficially owned, directly or indirectly, by all or substantially all of
the individuals and entities who were the beneficial owners, respectively, of
the Outstanding Common Stock immediately prior to such sale or other
disposition and in substantially the same proportions relative to each other as
their ownership, immediately prior to such sale or other disposition, of the
Outstanding Common Stock, (B) no Person (other than the Company, any employee
benefit plan (or related trust) sponsored or maintained by the Company or such
corporation (or any corporation controlled by the Company) and any Person which
beneficially owned, immediately prior to such sale or other disposition,
directly or indirectly, 30% or more of the Outstanding Common Stock)
beneficially owns, directly or indirectly, 50% or more of the then outstanding
shares of common stock thereof or 50% or more of the combined voting power of
the then outstanding securities thereof entitled to vote generally in the
election of directors and (C) at least a majority of the members of the board
of directors thereof were members of the Incumbent Board at the time of the
execution of the initial agreement or action of the Board providing for such
sale or other disposition.