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EXHIBIT 10.6
ATRIX LABORATORIES, INC.
NONQUALIFIED STOCK OPTION PLAN
A. Purpose and Scope
The purposes of this Plan are to encourage stock ownership by
consultants, other independent contractors and other designated persons who are
not employees (collectively, "Consultants") of Atrix Laboratories, Inc. (herein
called the "Company") and to provide an incentive for such persons to expand and
improve the profits and prosperity of the Company through the grant of Options
to purchase shares of the Stock as hereinafter defined.
B. Definitions
Unless otherwise required by the context:
1. "Board" shall mean the Board of Directors of the Company.
2. "Committee" shall mean the Compensation Committee, which is
appointed by the Board, and which shall be composed of members of the Board.
3. "Company" shall mean Atrix Laboratories, Inc., a Delaware
corporation.
4. "Code" shall mean the Internal Revenue Code of 1986, as amended.
5. "Option" shall mean a right to purchase Stock, granted pursuant to
the Plan.
6. "Option Price" shall mean the purchase price for Stock under an
Option, as determined in Section F below.
7. "Participant" shall mean a Consultant to whom an Option is granted
under the Plan.
8. "Plan" shall mean this Atrix Laboratories, Inc. Nonqualified Stock
Option Plan.
9. "Stock" shall mean the common stock of the Company, $.001 par value.
C. Stock Subject to Options
Subject to the provisions of Section L of the Plan, the maximum number
of shares of Stock that may be optioned or sold under the Plan is 50,000 shares.
Such shares may be treasury, or authorized, but unissued, shares of Stock of the
Company.
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D. Administration
The Plan shall be administered by the Committee. The Committee shall be
responsible to the Board for the operation of the Plan, and shall make
recommendations to the Board with respect to participation in the Plan by
Consultants, and with respect to the extent of that participation. The
interpretation and construction of any provision of the Plan by the Committee
shall be final, unless otherwise determined by the Board. No member of the Board
or the Committee shall be liable for any action or determination concerning the
Plan made by him in good faith.
E. Eligibility
The Board, upon recommendation of the Committee, may grant Options to
any Consultant which the Committee in its discretion shall designate. Options
granted at different times need not contain similar provisions.
F. Option Price
The purchase price for Stock under each Option shall be designated by
the Committee in its discretion.
G. Terms and Conditions of Options
Options granted pursuant to the Plan shall be authorized by the Board
and shall be evidenced by agreements in such form as the Board, upon
recommendation of the Committee, shall from time to time approve. Such
agreements shall comply with and be subject to the following terms and
conditions:
1. Consulting Agreement. The Board may, in its discretion, include in
any Option granted under the Plan a condition that the Participant shall agree
to render services to the Company for a period of time (specified in the
agreement) following the date the Option is granted. No such agreement shall
impose upon the Company, however, any additional obligation to retain the
Participant for any period of time.
2. Time and Method of Payment. The Option Price shall be paid in full
in cash at the time an Option is exercised under the Plan. Otherwise, an
exercise of any Option granted under the Plan shall be invalid and of no effect.
Promptly after the exercise of an Option and the payment of the full Option
Price, the Participant shall be entitled to the issuance of a stock certificate
evidencing his ownership of such Stock. A Participant shall have none of the
rights of a shareholder until shares are issued to him, and no adjustment will
be made for dividends or other rights for which the record date is prior to the
date such stock certificate is issued.
3. Number of Shares. Each Option shall state the total number of shares
of Stock to which it pertains.
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4. Option Period and Limitations on Exercise of Options. The Committee
shall, in its discretion, designate the periods of time during which an Option
may be exercised and such conditions to exercise as the Committee may deem
appropriate. No Option may be exercised after the expiration of ten years from
the date it is granted. No Option may be exercised for a fractional share of
Stock.
H. Termination of Consulting Agreements
Except as provided in Section I below and except to the extent the
Committee shall otherwise designate, in the event of any termination of the
consulting or other agreement between the Participant and the Company all
Options which had not been exercised as of the date of such termination shall
immediately expire.
I. Rights in Event of Death
If a Participant dies while retained by the Company and without having
fully exercised his Options, the executors or administrators, or legatees or
heirs, of his estate shall have the right to exercise such Options to the extent
that such deceased Participant was entitled to exercise the Options on the date
of his death; provided, however, that in no event shall the Options be
exercisable more than two years from the date of the Participant's death.
J. No Obligations to Exercise Option
The granting of an Option shall impose no obligation upon the
Participant to exercise such Option.
K. Nonassignability
Options shall not be transferable other than by will or by the laws of
descent and distribution, and during a Participant's lifetime shall be
exercisable only by such Participant.
L. Effect of Change in Stock Subject to the Plan
The aggregate number of shares of Stock available for Options under the
Plan, the shares subject to any Option and the price per share shall all be
proportionately adjusted for any increase or decrease in the number of issued
shares of Stock subsequent to the effective date of the Plan resulting from (1)
a subdivision or consolidation of shares or any other capital adjustment, (2)
the payment of a stock dividend, or (3) other increase or decrease in such
shares effected without receipt of consideration by the Company. If the Company
shall be the surviving corporation in any merger or consolidation, any Option
shall pertain, apply, and relate to the securities to which a holder of the
number of shares of Stock subject to the Option would have been entitled after
the merger or consolidation. Upon dissolution or liquidation of the Company, or
upon a merger or consolidation in which the Company is not the surviving
corporation, all Options outstanding under the Plan shall terminate; provided,
however, that each Participant (and each other person entitled under Section I
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to exercise an Option) shall have the right, immediately prior to such
dissolution or liquidation, or such merger or consolidation, to exercise such
Participant's Options in whole or in part, but only to the extent that such
Options are otherwise exercisable under the terms of the Plan.
M. Amendment and Termination
The Board, by resolution, may terminate, amend, or revise the Plan with
respect to any shares as to which Options have not been granted. Neither the
Board nor the Committee may, without the consent of the holder of an Option,
alter or impair any Option previously granted under the Plan, except as
authorized herein. Unless sooner terminated, the Plan shall remain in effect for
a period of ten years from the date of the Plan's adoption by the Board.
Termination of the Plan shall not affect any Option previously granted.
N. Agreement and Representation of Consultants
As a condition to the exercise of any portion of an Option, the Company
may require the person exercising such Option to represent and warrant at the
time of such exercise that any shares of Stock acquired at exercise are being
acquired only for investment and without any present intention to sell or
distribute such shares, if, in the opinion of counsel for the Company, such a
representation is required under the Securities Act of 1933 or any other
applicable law, regulation, or rule of any governmental agency.
O. Reservation of Shares of Stock
The Company, during the term of this Plan, will at all times reserve
and keep available, and will seek or obtain from any regulatory body having
jurisdiction any requisite authority necessary to issue and to sell, the number
of shares of Stock that shall be sufficient to satisfy the requirements of this
Plan. The inability of the Company to obtain from any regulatory body having
jurisdiction the authority deemed necessary by counsel for the Company for the
lawful issuance and sale of its Stock hereunder shall relieve the Company of any
liability in respect of the failure to issue or sell Stock as to which the
requisite authority has not been obtained.
P. Effective Date of Plan
The Plan shall be effective from the date that the Plan is approved by
the Board.
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ATRIX LABORATORIES, INC.
FIRST AMENDMENT
TO
NONQUALIFIED STOCK OPTION PLAN
This First Amendment (the "First Amendment") to the Nonqualified Stock
Option Plan (the "Plan") of Atrix Laboratories, Inc. (the "Company") amends
Section C of the Plan. This First Amendment has been duly adopted by the Board
of Directors of the Company by unanimous written consent dated October 16, 1995.
Section C of the Plan is hereby amended in its entirety to read as
follows:
C. Stock Subject to Options
Subject to the provisions of Section L of the Plan, the maximum number
of shares of Stock that may be optioned or sold under the Plan is 100,000
shares. Such shares may be treasury, or authorized, but unissued, shares of
Stock of the Company.
All other terms and provisions set forth in the Plan shall remain in
full force and effect.
IN WITNESS WHEREOF, the undersigned have acknowledged this
First Amendment as of the day of October, 1995.
ATRIX LABORATORIES, INC.
ATTEST: By: /s/ John E. Urheim
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John E. Urheim, Vice Chairman and Chief
Executive Officer
By: /s/ Kimberly A. Marks
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Kimberly A. Marks, Assistant
Secretary and Corporate Controller
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SECOND AMENDMENT TO
THE ATRIX LABORATORIES, INC.
NONQUALIFIED STOCK OPTION PLAN
This Second Amendment ("Amendment") to Atrix Laboratories, Inc.'s (the
"Company") Nonqualified Stock Option Plan (the "Plan") is dated as of this 27th
day of April, 1998.
RECITALS
WHEREAS, the Plan was duly adopted by the Board of Directors of the
Company and was subsequently amended by the Board of Directors on October 16,
1995.
WHEREAS, the Company desires to further amend the Plan on the terms and
conditions set forth herein.
* * *
1. Section B of the Plan is hereby amended in its entirety to read as follows:
B. Definitions
Unless otherwise required by the context:
1. "Administrator" means the Board or any of its Committee(s)
administering the Plan, in accordance with Section D of the Plan.
2. "Applicable Laws" means the legal requirements relating to the
administration of stock option and equity incentive plans under applicable state
of Delaware corporate and securities laws and under the Code.
3. "Board" shall mean the Board of Directors of the Company.
4. "Committee" means a Committee appointed by the Board in accordance
with Section D of the Plan.
5. "Common Stock" means the Common Stock of the Company which is traded
on an approved securities market pursuant to the Exchange Act.
6. "Company" shall mean Atrix Laboratories, Inc., a Delaware
corporation.
7. "Code" shall mean the Internal Revenue Code of 1986, as amended.
8. "Director" means a member of the Board.
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9. "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
10. "Fair Market Value" means, as of a specified date, the value of
Common Stock determined by the Administrator as follows:
(i) If the Common Stock is listed on any established stock
exchange or quoted on a national market system, including
without limitation the National Market System of the National
Association of Securities Dealers, Inc. Automated Quotation
("NASDAQ") System, the Fair Market Value of a Share of Common
Stock shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such
exchange (or, if listed on more than one exchange, the
exchange with the greatest volume of trading in Common Stock)
or system on the last market trading day prior to the day of
determination, as reported in the Wall Street Journal or such
other source as the Administrator deems reliable; or
(ii) If the Common Stock is quoted on the NASDAQ System (but
is not included on the National Market System thereof) or is
regularly quoted by a recognized securities dealer but selling
prices are not reported, the Fair Market Value of a Share of
Common Stock shall be the mean between the closing bid and
closing asked prices for the Common Stock on the last market
trading day prior to the day of determination, as reported in
the Wall Street Journal or such other source as the
Administrator deems reliable.
11. "Nonstatutory Stock Option" means an Option that is not an
Incentive Stock Option.
12. "Notice of Grant" means a written notice evidencing certain terms
and conditions of an individual Option. The Notice of Grant is part of the
Option Agreement.
13. "Option" shall mean a Stock Option granted pursuant to the Plan.
14. "Option Agreement" means a written agreement between the Company
and an Optionee evidencing the terms and conditions of an individual Option
grant. The Option Agreement is subject to the terms and conditions of the Plan
and the Notice of Grant.
15. "Option Price" shall mean the purchase price for Stock under an
Option, as determined in Section F of the Plan.
16. "Optioned Stock" means the Common Stock subject to an Option.
17. "Participant" shall mean a Consultant to whom an Option is granted
under the Plan.
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18. "Plan" shall mean Atrix Laboratories, Inc. Nonqualified Stock
Option Plan.
19. "Share" means a share of the Common Stock.
20. "Stock" shall mean the common stock of the Company, $.001 par
value.
2. Section C of the Plan is hereby amended in its entirety to read as follows:
C. Stock Subject to Options
1. Subject to the provisions of Section L of the Plan, the
total number of Shares reserved and available for distribution pursuant
to awards made under the Plan shall be One Hundred Fifty Thousand
(150,000) shares. The Shares may be authorized but unissued or
reacquired stock.
2. If an Option should expire or become unexercisable for any
reason without having been exercised in full, then unpurchased Shares
which were subject thereto shall, unless the Plan shall have been
terminated, become available for other options granted under the Plan.
3. Notwithstanding any other provision of the Plan, Shares
issued upon exercise of Options under the Plan and later repurchased by
the Company shall not become available for future grant or sale under
the Plan.
3. Section D of the Plan is hereby amended in its entirety to read as follows:
D. Administration
1. The Plan shall be administered by (a) the Board; (b) a
Committee designated by the Board, which Committee shall be constituted
in such a manner as to satisfy the Applicable Laws; or (c) as permitted
by Rule 16b-3.
2. Once a Committee has been appointed pursuant to this
Section, such Committee shall continue to serve in its designated
capacity or until otherwise directed by the Board. From time to time,
the Board may increase the size of any Committee and appoint additional
members thereof, remove members (with or without cause) and appoint new
members in substitution therefor, fill vacancies (however caused) or
remove all member of the Committee and thereafter directly administer
the Plan, all to the extent permitted by the Applicable Laws and, in
the case of a Committee appointed under this Section, to the extent
permitted by Rule 16b-3 as it applies to a plan intended to qualify
thereunder as a discretionary grant or award plan.
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3. Subject to the provisions of the Plan and, in the case of a
Committee, the specific duties delegated by the Board to such
Committee, the Administrator shall have the authority, in its
discretion:
(a) to grant Nonqualified Stock Options;
(b) to determine the Fair Market Value of the Common
Stock, in accordance with Section B(10) of the Plan;
(c) to determine the number of shares of Common Stock
to be covered by each such award granted hereunder;
(d) to approve forms of agreements for use under the
Plan;
(e) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any award granted
hereunder and of the Options so awarded (including, but not
limited to, the exercise or purchase price and any restriction
or limitation regarding any Option and/or the shares of Common
Stock relating thereto, based in each case on such factors as
the Administrator shall determine, in its sole discretion);
(f) to authorize any person to execute on behalf of
the Company any instrument required to effect the grant of an
Option previously granted by the Administrator;
(g) to interpret the Plan and to prescribe, amend,
and rescind rules and regulations relating to the Plan; and
(h) to make all other determinations deemed necessary
or advisable for administering the Plan.
4. All decisions, determinations, and interpretations of the
Administrator shall be final and binding.
5. If the Chief Executive Officer or his or her designees
reasonably believes that an Optionee has committed an act of
misconduct, the Chief Executive Officer may suspend the Optionee's
right to exercise any Option or to receive any benefits relating
thereto pending a determination by the Administrator. If the
Administrator determines that an Optionee has committed an act of
embezzlement, fraud, dishonesty, nonpayment of an obligation owed to
the Company, breach of fiduciary duty, or deliberate disregard of the
Company's rules resulting in loss, damage or injury to the Company, or
if an Optionee makes an unauthorized disclosure of any Company trade
secret or confidential information, engages in any conduct constituting
unfair competition, induces any Company customer to breach a contract
with the Company, or induces any principal for whom the Company acts as
agent to terminate such agency relationship, neither the Optionee nor
his or her estate shall be entitled to exercise any Option or to
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receive any benefits relating to Options whatsoever. In making such
determination, the Administrator shall act fairly and shall give the
Optionee an opportunity to appear and present evidence on Optionee's
behalf at a hearing before the Administrator.
3. Section G of the Plan is hereby amended in its entirety to read as follows:
G. Terms and Conditions
The Notice of Grant shall specify the per Share exercise price
for the Shares issuable pursuant to an Option. The Notice of Grant
shall also specify the number of Shares which are subject to the
Option.
4. Section M of the Plan is hereby amended in its entirety to read as follows:
M. Amendment and Termination
1. The Board, by resolution, may terminate, amend, or revise
the Plan with respect to any shares as to which Options have not been
granted. Neither the board nor the Committee may, without the consent
of the holder of an Option, alter or impair any Option previously
granted under the Pan, except as authorized herein. Unless sooner
terminated, the Plan shall remain in effect for a period of ten years
from the date of the Plan's adoption by the Board. Termination of the
Plan shall not affect any Option previously granted.
2. Any such amendment, alteration, suspension, or termination
of the Plan shall not adversely affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not
been amended, altered, suspended, or terminated, unless mutually agreed
otherwise between the Optionee and the Administrator, which agreement
must be in writing and signed by the Optionee and the Company.
5. Section N of the Plan is hereby amended in its entirety to read as follows:
N. Legal Compliance
1. Shares shall not be issued pursuant to the award, vesting,
or exercise of an Option unless the award, vesting, or exercise of such
Option, as the case may be, and the issuance and delivery of such
Shares pursuant thereto shall comply with all relevant provisions of
law, including, without limitation, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated
thereunder, applicable state securities laws, and the requirements of
any stock exchange or quotation system upon which the Shares may then
be listed or quoted, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
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2. As a condition to the receipt of Shares upon the award,
vesting, or exercise of an Option, the Company may require the person
receiving such Shares to represent and warrant at the time of any such
award, vesting, or exercise that the Shares are being acquired only for
investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Company, such a
representation is required by any of the aforementioned relevant
provisions of law.
3. The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the
Company's counsel to be necessary to the lawful issuance and sale of
any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such
requisite authority shall not have been obtained.
4. If the Optioned Stock covered by an Option exceeds, as of
the date of grant, the number of Shares which may be issued under the
Plan without additional Board approval, such Option shall be void with
respect to such excess Optioned Stock, unless Board approval of an
amendment sufficiently increasing the number of Shares subject to the
Plan is timely obtained in accordance with Section M of the Plan.
6. The following is added as a new Section O to the Plan:
O. Agreements
Options shall be evidenced by written agreements in such form
as the Administrator shall approve from time to time.
7. All capitalized terms used and not otherwise defined herein shall have the
same meanings as set forth in the Agreement.
8. Except as expressly modified by the terms hereof, the terms and provisions of
the Agreement shall remain in full force and effect as originally written.
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This Second Amendment has been duly adopted by the Board of Directors
at a meeting held on April 27,1998.
ATRIX LABORATORIES, INC.
/s/ John E. Urheim
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John E. Urheim, Vice Chairman and Chief
Executive Officer
ATTEST:
/s/ Brian G. Richmond
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Brian G. Richmond, Assistant Secretary
and Vice President-Finance
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