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As filed with the Securities and Exchange Commission on June 25, 1999
Registration No. 333-____________________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENTS
Under
The Securities Act of 1933
IDEC PHARMACEUTICALS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 33-0112644
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
11011 TORREYANA ROAD
SAN DIEGO, CALIFORNIA 92121
(Address of principal executive offices) (Zip Code)
AMENDED AND RESTATED 1988 STOCK OPTION PLAN
1995 EMPLOYEE STOCK PURCHASE PLAN
(Full titles of the Plans)
WILLIAM H. RASTETTER, PH.D.
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
IDEC PHARMACEUTICALS CORPORATION
11011 TORREYANA ROAD, SAN DIEGO, CA 92121
(Name and address of agent for service)
(619) 550-8500
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
Proposed Maximum
Maximum Aggregate Amount of
Title of Securities to be Amount to be Offering Price Offering Registration
Registered Registered(1) per Share(2) Price(2) Fee
=========================================================================================================================
Amended and Restated 1988 Stock Option Plan
Common Stock, $0.001 par value 800,000 shares $67.50 $54,000,000.00 $15,012.00
1995 Employee Stock Purchase Plan
Common Stock, $0.001 par value 200,000 shares $67.50 $ 3,500,000.00 $ 3,753.00
Aggregate Filing Fee: $18,765.00
=========================================================================================================================
(1) This Registration Statement shall also cover any additional shares of Common
Stock which become issuable under the Amended and Restated 1988 Stock Option
Plan and/or the 1995 Employee Stock Purchase Plan by reason of any stock
dividend, stock split, recapitalization or other similar transaction
effected without the Registrant's receipt of consideration which results in
an increase in the number of the outstanding shares of Registrant's Common
Stock.
(2) Calculated solely for purposes of this offering under Rule 457(h) of the
Securities Act of 1933, as amended, (the "1933 Act") on the basis of the
average of the high and low selling prices per share of Registrant's Common
Stock on June 23, 1999 as reported by the Nasdaq National Market.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
IDEC Pharmaceuticals Corporation (the "Registrant") hereby incorporates
by reference into this Registration Statement the following documents previously
filed with the Securities and Exchange Commission (the "Commission"):
(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1998 filed with the Commission on March 31,
1999, pursuant to Section 13 of the Securities Exchange Act of
1934, as amended (the "Exchange Act");
(b) The Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1999 filed with the Commission on May
17, 1999 pursuant to Section 13 of the Exchange Act;
(c) The Registrant's Registration Statement No. 000-13231 on Form
8-A filed with the Commission on August 1, 1997, in which there
is described the terms, rights and provisions applicable to the
Registrant's outstanding Common Stock.
All reports and definitive proxy or information statements filed
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date
of this Registration Statement and prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any subsequently filed
document which is also deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant's Certificate of Incorporation limits the liability of
directors to the maximum extent permitted by Delaware law. Delaware law provides
that directors of a corporation will not be personally liable for monetary
damages for breach of their fiduciary duties as directors, except for liability
for (i) any breach of their duty of loyalty to the corporation or its
stockholders, (ii) any acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) any unlawful
payments of dividends or unlawful stock repurchases or redemptions as provided
in Section 174 of the Delaware General Corporation Law or (iv) any transaction
from which the director derived an improper personal benefit.
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The Registrant's Bylaws provide that the Registrant shall indemnify its
directors and may indemnify its officers and employees and other agents to the
fullest extent permitted by law. The Registrant believes that indemnification
under its Bylaws covers at least negligence and gross negligence on the part of
indemnified parties. The Registrant's Bylaws also permit it to secure insurance
on behalf of any officer, director, employee or other agent for any liability
arising out of his or her actions in such capacity, regardless of whether the
Bylaws have the power to indemnify him or her against such liability under the
General Corporation Law of Delaware. The Registrant currently has secured such
insurance on behalf of its directors and officers.
The Registrant has entered into agreements to indemnify its directors
and executive officers, in addition to indemnification provided for in the
Registrant's Bylaws. These agreements, among other things, indemnify the
Registrant's directors and executive officers for certain expenses (including
attorneys' fees), judgments, fines and settlement amounts incurred by any such
person in any action or proceeding, including any action by or in the right of
the Registrant, arising out of such person's services as a director or executive
officer of the Registrant, any subsidiary of the Registrant or any other company
or enterprise to which the person provides services at the request of the
Registrant. The Registrant believes that these provisions and agreements are
necessary to attract and retain qualified persons as directors and executive
officers.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
EXHIBIT NUMBER EXHIBIT
4 Instruments Defining Rights of Stockholders. Reference
is made to Registrant's Registration Statement No.
0-19311 on Form 8-B, including exhibits thereto, which
is incorporated herein by reference pursuant to Item
3(c).
5 Opinion of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Independent Auditors - KPMG LLP.
23.2 Consent of Brobeck, Phleger & Harrison LLP is
contained in Exhibit 5.1.
24 Power of Attorney. Reference is made to page II-4 of
this Registration Statement.
99.1 Amended and Restated 1988 Stock Option Plan (Amended
and Restated May 20, 1999).
99.2* Form of Notice of Grant.
99.3* Form of Stock Option Agreement.
99.4 1995 Employee Stock Purchase Plan (Amended and
Restated May 20, 1999).
99.5** Form of Enrollment/Change Form under 1995 Employee
Stock Purchase Plan.
99.6** Form of Stock Purchase Agreement under 1995 Employee
Stock Purchase Plan.
* Exhibits 99.2 and 99.3 are incorporated herein by reference to
Exhibits 28.2 and 28.3, respectively, of Registrant's
Registration Statement No. 33-45172 on Form S-8 which was filed
with the Commission on January 21, 1992.
** Exhibits 99.5 and 99.6 are incorporated herein by reference to
Exhibits 28.2 and 28.3, respectively, of Registrant's
Registration Statement No. 33-60224 on Form S-8 which was filed
with the Commission on April 5, 1993.
ITEM 9. UNDERTAKINGS
A. The undersigned Registrant hereby undertakes: (1) to file,
during any period in which offers or sales are being made, a post-effective
amendment to this Registration Statement (i) to include any prospectus required
by Section 10(a)(3) of the 1933 Act, (ii) to reflect in the prospectus any facts
or events arising after the
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effective date of this Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in this Registration Statement,
and (iii) to include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement; provided,
however, that clauses (1)(i) and (1)(ii) shall not apply if the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the Registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by reference into this
Registration Statement; (2) that for the purpose of determining any liability
under the 1933 Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and (3) to remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the Registrant's Amended and Restated 1988 Stock
Option Plan and/or 1995 Employee Stock Purchase Plan.
B. The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the 1933 Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
that is incorporated by reference into this Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
1933 Act may be permitted to directors, officers or controlling persons of the
Registrant pursuant to the indemnity provisions summarized in Item 6 or
otherwise, the Registrant has been informed that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the 1933 Act and is, therefore, unenforceable. In the event that
a claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the 1933 Act
and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of San Diego, State of California, on this
24th day of June, 1999.
IDEC PHARMACEUTICALS CORPORATION
By /s/ WILLIAM H. RASTETTER
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William H. Rastetter
Chairman, President and Chief Executive
Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned officers and directors of IDEC Pharmaceuticals
Corporation, a Delaware corporation, do hereby constitute and appoint William H.
Rastetter and Phillip M. Schneider, and each of them, the lawful attorneys and
agents, with full power and authority to do any and all acts and things and to
execute any and all instruments which said attorneys and agents, or any one of
them, determines may be necessary or advisable or required to enable said
corporation to comply with the Securities Act of 1933, as amended, and any rules
or regulations or requirements of the Securities and Exchange Commission in
connection with this Registration Statement. Without limiting the generality of
the foregoing power and authority, the powers granted include the power and
authority to sign the names of the undersigned officers and directors in the
capacities indicated below to this Registration Statement, to any and all
amendments, both pre-effective and post-effective, and supplements to this
Registration Statement, and to any and all instruments or documents filed as
part of or in conjunction with this Registration Statement or amendments or
supplements thereof, and each of the undersigned hereby ratifies and confirms
all that said attorneys and agents, and any one of them, shall do or cause to be
done by virtue hereof. This Power of Attorney may be signed in several
counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
Signatures Title Date
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/s/ WILLIAM H. RASTETTER
- ---------------------------- Chairman, President and June 24, 1999
William H. Rastetter Chief Executive Officer
(Principal Executive Officer)
/s/ PHILLIP M. SCHNEIDER
- ---------------------------- Vice President and Chief June 24, 1999
Phillip M. Schneider Financial Officer (Principal
Financial and Accounting Officer)
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Signatures Title Date
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/s/ CHARLES C. EDWARDS Director June 25, 1999
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Charles C. Edwards
/s/ ALAN B. GLASSBERG Director June 25, 1999
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Alan B. Glassberg
/s/ KAZUHIRO HASHIMOTO Director June 25, 1999
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Kazuhiro Hashimoto
/s/ FRANKLIN P. JOHNSON, JR. Director June 25, 1999
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Franklin P. Johnson, Jr.
/s/ THE HONORABLE LYNN SCHENK Director June 25, 1999
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The Honorable Lynn Schenk
/s/ WILLIAM D. YOUNG Director June 25, 1999
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William D. Young
Director June __, 1999
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Robert W. Pangia
/s/ BRUCE R. ROSS Director June 25, 1999
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Bruce R. Ross
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
TO
FORM S-8
UNDER
SECURITIES ACT OF 1933
IDEC PHARMACEUTICALS CORPORATION
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EXHIBIT INDEX
EXHIBIT NUMBER EXHIBIT
4 Instruments Defining Rights of Stockholders. Reference
is made to Registrant's Registration Statement No.
0-19311 on Form 8-B, including exhibits thereto, which
is incorporated herein by reference pursuant to Item
3(c).
5 Opinion of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Independent Auditors - KPMG LLP.
23.2 Consent of Brobeck, Phleger & Harrison LLP is
contained in Exhibit 5.1.
24 Power of Attorney. Reference is made to page II-4 of
this Registration Statement.
99.1 Amended and Restated 1988 Stock Option Plan (Amended
and Restated May 20, 1999).
99.2* Form of Notice of Grant.
99.3* Form of Stock Option Agreement.
99.4 1995 Employee Stock Purchase Plan (Amended and
Restated May 20, 1999).
99.5** Form of Enrollment/Change Form under 1995 Employee
Stock Purchase Plan.
99.6** Form of Stock Purchase Agreement under 1995 Employee
Stock Purchase Plan.
* Exhibits 99.2 and 99.3 are incorporated herein by reference to
Exhibits 28.2 and 28.3, respectively, of Registrant's
Registration Statement No. 33-45172 on Form S-8 which was filed
with the Commission on January 21, 1992.
** Exhibits 99.5 and 99.6 are incorporated herein by reference to
Exhibits 28.2 and 28.3, respectively, of Registrant's
Registration Statement No. 33-60224 on Form S-8 which was filed
with the Commission on April 5, 1993.
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EXHIBIT 5
OPINION AND CONSENT OF BROBECK, PHLEGER & HARRSION LLP
June 25, 1999
IDEC Pharmaceuticals Corporation
11011 Torreyana Road
San Diego, CA 92121
Re: IDEC Pharmaceuticals Corporation Registration Statement on Form
S-8 for an aggregate of 1,000,000 Shares of Common Stock and
Related Stock Options
Ladies and Gentlemen:
We have acted as counsel to IDEC Pharmaceuticals Corporation, a Delaware
corporation (the "Company"), in connection with the registration on Form S-8
(the "Registration Statement") under the Securities Act of 1933, as amended, of
(i) an additional 800,000 shares of common stock for issuance under the
Company's Amended and Restated 1988 Stock Option Plan (the "Incentive Plan") and
(ii) an additional 200,000 shares of common stock for issuance under the 1995
Employee Stock Purchase Plan (the "Purchase Plan").
This opinion is being furnished in accordance with the requirements of
Item 8 of Form S-8 and Item 601(b)(5)(i) of Regulation S-K.
We have reviewed the Company's charter documents and the corporate
proceedings taken by the Company in connection with the establishment and
amendment of the Incentive Plan and the Purchase Plan. Based on such review, we
are of the opinion that as and when the shares of common stock are issued and
sold (and the consideration therefor received) pursuant to (a) the provisions of
option agreements duly authorized under the Incentive Plan and in accordance
with the Registration Statement, (b) duly authorized direct stock issuances
effected in accordance with the provisions of the Incentive Plan and the
Registration Statement or (c) duly authorized stock purchase rights issued under
the Purchase Plan and in accordance with the Registration Statement, such shares
will be duly authorized, legally issued, fully paid and non-assessable.
We consent to the filing of this opinion letter as Exhibit 5 to the
Registration Statement.
This opinion letter is rendered as of the date first written above and
we disclaim any obligation to advise you of facts, circumstances, events or
developments which hereafter may be brought to our attention and which may
alter, affect or modify the opinion expressed herein. Our opinion is expressly
limited to the matters set forth above and we render no opinion, whether by
implication or otherwise, as to any other matters relating to the Company, the
Incentive Plan or the Non-Employee Director Plan or the shares of common stock
issuable under such plans.
Very truly yours,
/s/ BROBECK, PHLEGER & HARRISON LLP
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BROBECK, PHLEGER & HARRISON LLP
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EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
IDEC Pharmaceuticals Corporation:
We consent to the use of our report incorporated herein by reference in
the registration statement on form S-8 of IDEC Pharmaceuticals Corporation.
/s/ KPMG LLP
KPMG LLP
San Diego, California
June 24, 1999
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EXHIBIT 99.1
IDEC PHARMACEUTICALS CORPORATION
1988 STOCK OPTION PLAN
(AMENDED AND RESTATED THROUGH MAY 20, 1999)
I. PURPOSES OF THE PLAN
(a) This Stock Option Plan (the "Plan") is intended to
promote the interests of IDEC Pharmaceuticals Corporation, a Delaware
corporation (the "Corporation"), by providing a method whereby (i) key employees
(including officers and directors) of the Corporation (or its parent or
subsidiary corporations) responsible for the management, growth and financial
success of the Corporation (or its parent or subsidiary corporations), (ii) the
non-employee members of the Corporation's Board of Directors (or any parent or
subsidiary corporations) and (iii) independent consultants and advisors who
provide valuable services to the Corporation (or its parent or subsidiary
corporations) may be offered incentives and rewards which will encourage them to
acquire a proprietary interest, or otherwise increase their proprietary
interest, in the Corporation and continue to render services to the Corporation
(or its parent or subsidiary corporations).
(b) The following provisions shall be applicable in
determining the parent and subsidiary corporations of the Corporation:
(i) Any corporation (other than the Corporation) in
an unbroken chain of corporations ending with the Corporation shall be
considered to be a PARENT corporation of the Corporation, provided each
such corporation in the unbroken chain (other than the Corporation)
owns, at the time of the determination, stock possessing fifty percent
(50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.
(ii) Each corporation (other than the Corporation) in
an unbroken chain of corporations beginning with the Corporation shall
be considered to be a SUBSIDIARY of the Corporation, provided each such
corporation (other than the last corporation) in the unbroken chain
owns, at the time of the determination, stock possessing fifty percent
(50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.
II. ADMINISTRATION OF THE PLAN
(a) The Corporation's Board of Directors (the "Board") shall
appoint a committee ("Committee") of two (2) or more non-employee Board members
to assume full responsibility for the administration of the Plan. Members of the
Committee shall serve for such period of time as the Board may determine and
shall be subject to removal by the Board at any time.
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(b) The Committee as Plan Administrator shall have full
power and authority (subject to the express provisions of the Plan) to establish
such rules and regulations as it may deem appropriate for the proper
administration of the Plan and to make such determinations under, and issue such
interpretations of, the Plan and any outstanding option grants or stock
issuances as it may deem necessary or advisable. Decisions of the Plan
Administrator shall be final and binding on all parties who have an interest in
the Plan or any outstanding option or stock issuance thereunder.
III. ELIGIBILITY FOR OPTION GRANTS
(a) The persons eligible to receive option grants under the
Plan are as follows:
(i) key employees (including officers and directors) of the Corporation (or
its parent or subsidiary corporations) who render services which
contribute to the success and growth of the Corporation (or its parent
or subsidiary corporations) or which may reasonably be anticipated to
contribute to the future success and growth of the Corporation (or its
parent or subsidiary corporations);
(ii) the non-employee members of the Board or the non-employee members of the
board of directors of any parent or subsidiary corporations; and
(iii) those independent consultants or other advisors who provide valuable
services to the Corporation (or its parent or subsidiary corporations).
(b) The Plan Administrator shall have full authority to
determine which eligible individuals are to receive option grants under the
Plan, the number of shares to be covered by each such grant, whether the granted
option is to be an incentive stock option ("Incentive Option") which satisfies
the requirements of Section 422 of the Internal Revenue Code or a non-statutory
option not intended to meet such requirements, the time or times at which each
such option is to become exercisable, and the maximum ten-n for which the option
is to be outstanding.
IV. STOCK SUBJECT TO THE PLAN
(a) The stock issuable under the Plan shall be shares of the
Corporation's authorized but unissued or reacquired Common Stock. The maximum
number of shares which may be issued under the Plan shall not exceed 7,135,000
shares.(1) The total number
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(1) Adjusted to reflect (i) the 1 for 2.5 reverse Common Stock split
effected by the Company on August 18, 199 1, (ii) the 670,000 share increase
authorized by the Board on March 18, 1992 and approved by the stockholders at
the 1992 Annual Meeting, (iii) the 700,000 share increase authorized by the
Board on January 13, 1993 and approved by the stockholders at the
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of shares issuable under the Plan shall be subject to
adjustment from time to time in accordance with Section IV(d) of the Plan.
(b) In no event may the aggregate number of shares of Common
Stock for which any one individual participating in the Plan may be granted
stock options and separately exercisable stock appreciation rights exceed
1,250,000 shares in the aggregate over the remaining term of the Plan, subject
to adjustment from time to time in accordance with Section IV(d) of the Plan.
For purposes of such limitation, no stock options or stock appreciation rights
granted prior to January 1, 1994 shall be taken into account.
(c) Should an option expire or terminate for any reason
prior to exercise in full (including options cancelled in accordance with the
cancellation-regrant provisions of Section VIII of the Plan), the shares subject
to the portion of the option not so exercised shall be available for subsequent
option grants under the Plan. Unvested shares issued under the Plan and
subsequently repurchased by the Corporation, at the option exercise price paid
per share, pursuant to the Corporation's repurchase rights under the Plan, shall
be added back to the number of shares of Common Stock reserved for issuance
under the Plan and shall accordingly be available for reissuance through one or
more subsequent option grants under the Plan. Shares subject to any option
cancelled in accordance with Section IX of the Plan shall reduce on a
share-for-share basis the number of shares of Common Stock available for
subsequent option grants under this Plan. In addition, should the exercise price
of an outstanding option under the Plan be paid with shares of Common Stock,
then the number of shares of Common Stock available for issuance under the Plan
shall be reduced by the gross number of shares for which the option is
exercised, and not by the net number of shares of Common Stock actually issued
to the option holder.
(d) In the event any change is made to the Common Stock
issuable under the Plan by reason of any stock split, stock dividend,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, then appropriate adjustments shall be made to (I) the maximum
number and/or class of securities issuable under the Plan, (II) the maximum
number and/or class of securities for which stock options and separately
exercisable stock appreciation
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1993 Annual Meeting, (iv) the 650,000 share increase authorized by the Board on
February 28, 1994 and approved by the stockholders at the 1994 Annual Meeting,
(v) the 500,000 share increase authorized by the Board on January 25, 1995, and
approved by the stockholders at the 1995 Annual Meeting, (vi) the 1,200,000
share increase authorized by the Board on January 24, 1996 and approved by the
stockholders at the 1996 Annual Meeting, (vii) the 800,000 share increase
authorized by the Board on February 24, 1997 and approved by the stockholders at
the 1997 Annual Meeting, (viii) the 855,000 share increase authorized by the
Board on February 20, 1998 and approved by the stockholders at the 1998 Annual
Meeting, and (iv) the 800,000 share increase authorized by the Board on January
13, 1999 and approved by the stockholders at the 1999 Annual Meeting. In no
event, however, shall more than 5,232,158 shares of Common Stock be issued under
the Plan after February 28, 1998, subject to adjustment under Section IV(d) in
the event of changes in the Company's capital structure.
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rights may be granted to any one participant in the aggregate after December 31,
1993 and (III) the number and/or class of securities and exercise price per
share in effect under each outstanding option in order to prevent the dilution
or enlargement of benefits thereunder. The adjustments determined by the Plan
Administrator shall be final, binding and conclusive.
V. TERMS AND CONDITIONS OF OPTIONS
Options granted pursuant to the Plan shall be authorized by
action of the Plan Administrator and may, at the Plan Administrator's
discretion, be either Incentive Options or non-statutory options. Individuals
who are not Employees (as defined in Section V.3.D below) may only be granted
non-statutory options. Each granted option shall be evidenced by one or more
instruments in the form approved by the Plan Administrator; provided, however,
that each such instrument shall comply with the terms and conditions specified
below. Each instrument evidencing an Incentive Option shall, in addition, be
subject to the applicable provisions of Section VI.
1. Option Price.
A. The option price per share shall be fixed by the
Plan Administrator, but in no event shall the option price per share be less
than eighty-five percent (85%) of the fair market value of a share of Common
Stock on the date of the option grant.
B. The option price shall become immediately due
upon exercise of the option and shall, subject to the provisions of Section X
and the instrument evidencing the grant, be payable in one of the alternative
forms specified below:
(i) full payment in cash or check payable to
the Corporation; or
(ii) full payment in shares of Common Stock
held by the optionee for the requisite period necessary to avoid a
charge to the Corporation's reported earnings and valued at fair market
value on the Exercise Date (as such term is defined below); or
(iii) full payment through a combination of
shares of Common Stock held by the optionee for the requisite period
necessary to avoid a charge to the Corporation's reported earnings and
valued at fair market value on the Exercise Date and cash or check
payable to the Corporation; or
(iv) full payment effected through a
broker-dealer sale and remittance procedure pursuant to which the
optionee shall provide irrevocable instructions (I) to a
Corporation-designated brokerage firm to (A) effect the immediate sale
of a sufficient number of the purchased shares to enable such firm to
remit to the Corporation, out of the sale proceeds available on the
settlement date, sufficient funds to cover the aggregate option price
payable for the purchased shares plus all applicable Federal and State
income and employment
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taxes required to be withheld by the Corporation in connection with such
purchase and (B) remit those funds to the Corporation on the settlement
date, and (II) to the Corporation to deliver the certificates for the
purchased shares directly to such brokerage firm.
For purposes of this subparagraph B, the Exercise Date shall be
the date on which written notice of the option exercise is received by the
Corporation. Except to the extent the sale and remittance procedure is utilized
in connection with the exercise of the option, payment of the option price for
the purchased shares must accompany such notice.
C. The fair market value per share of Common Stock
on any relevant date under subparagraph A or B (and for all other valuation
purposes under the Plan) shall be determined in accordance with the following
provisions:
(i) If the Common Stock is not at the time
listed or admitted to trading on any national stock exchange but is
traded on the Nasdaq National Market, the fair market value shall be the
closing selling price per share of Common Stock on the date in question,
as reported by the National Association of Securities Dealers on the
Nasdaq National Market. If there is no reported closing selling price
for the Common Stock on the date in question, then the closing selling
price on the last preceding date for which such quotation exists shall
be determinative of fair market value.
(ii) If the Common Stock is at the time
listed or admitted to trading on any national stock exchange, then the
fair market value shall be the closing selling price per share of Common
Stock on the date in question on the stock exchange determined by the
Plan Administrator to be the primary market for the Common Stock, as
such price is officially quoted in the composite tape of transactions on
such exchange. If there is no reported sale of Common Stock on such
exchange on the date in question, then the fair market value shall be
the closing selling price on the exchange on the last preceding date for
which such quotation exists.
2. Term and Exercise of Options. Each option granted under
the Plan shall be exercisable at such time or times, during such period, and for
such number of shares as shall be determined by the Plan Administrator and set
forth in the instrument evidencing such option; provided, however, that no such
option shall have a term in excess of ten (10) years from the grant date.
3. Limited Transferability of Options. During the lifetime
of the optionee, Incentive Options shall be exercisable only by the optionee and
shall not be assignable or transferable other than by will or by the laws of
descent and distribution following the optionee's death. However, non-statutory
options may, in connection with the optionee's estate plan, be assigned in whole
or in part during the optionee's lifetime to one or more members of the
optionee's immediate family or to a trust established exclusively for one or
more such family
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members. The assigned portion may only be exercised by the person or persons who
acquire a proprietary interest in the option pursuant to the assignment. The
terms applicable to the assigned portion shall be the same as those in effect
for the option immediately prior to such assignment and shall be set forth in
such documents issued to the assignee as the Plan Administrator may deem
appropriate.
4. Effect of Termination of Service.
A. Should an optionee cease to remain in Service
(as defined in subparagraph D below) for any reason (including death or
permanent disability as defined in Section 22(e)(3) of the Internal Revenue
Code) while the holder of one or more outstanding options granted to such
optionee under the Plan, then such option or options shall not (except to the
extent otherwise provided pursuant to Section XI below) remain exercisable for
more than a thirty-six (36)-month period (or such shorter period determined by
the Plan Administrator and specified in the instrument evidencing the grant)
following the date of such cessation of Service. Under no circumstances,
however, shall any such option be exercisable after the specified expiration
date of the option term. Each such option shall, during such thirty-six
(36)-month or shorter period, be exercisable only to the extent of the number of
shares (if any) for which the option is exercisable on the date of the
optionee's cessation of Service. Upon the expiration of such thirty-six
(36)-month or shorter period or (if earlier) upon the expiration of the option
term, the option shall terminate and cease to be exercisable. However, the
option shall, immediately upon the optionee's cessation of Service for any
reason, terminate and cease to be outstanding for any option shares for which
the option is not otherwise at that time exercisable.
B. Any outstanding option held by the optionee and
exercisable in whole or in part on the date of his or her death may be
subsequently exercised, but only to the extent of the number of shares (if any)
for which the option is exercisable on the date of the optionee's cessation of
Service (less any option shares subsequently purchased by the optionee prior to
death), by the personal representative of the optionee's estate or by the person
or persons to whom the option is transferred pursuant to the optionee's will or
in accordance with the laws of descent and distribution. The right to exercise
the option for those shares shall terminate upon the earlier of (i) the third
anniversary of the date of the optionee's cessation of Service or (ii) the
specified expiration date of the option term.
C. Notwithstanding subparagraphs A and B above, the
Plan Administrator shall have complete discretion, exercisable either at the
time the option is granted or at any time while the option remains outstanding,
to permit one or more options held by the optionee under the Plan to be
exercised, during the limited period of exercisability provided under Section
V.4.A above, not only with respect to the number of shares for which each such
option is exercisable at the time of the optionee's cessation of Service but
also with respect to one or more subsequent installments for which the option
would otherwise have become exercisable had such cessation of Service not
occurred.
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D. For purposes of the foregoing provisions of this
Section V. 4 (and all other provisions of the Plan), the optionee shall be
deemed to remain in the SERVICE of the Corporation for so long as such
individual renders services on a periodic basis to the Corporation or any parent
or subsidiary corporation in the capacity of an Employee, a non-employee member
of the board of directors or an independent consultant or advisor, unless the
option agreement evidencing the option grant and/or the purchase agreement
evidencing the purchased option shares specifically provides otherwise. The
optionee shall be considered to be an EMPLOYEE for so long as such individual
remains in the employ of the Corporation or one or more of its parent or
subsidiary corporations, subject to the control and direction of the employer
entity as to the work to be performed and as to the manner and method of
performance.
5. Stockholder Rights. An optionee shall have none of the
rights of a stockholder with respect to any shares covered by the option until
such individual shall have exercised the option and paid the option price for
the purchased shares.
6. Repurchase Rights. Unvested shares of Common Stock may
be issued under the Plan which are subject to repurchase by the Corporation in
accordance with the following provisions:
(a) Upon the optionee's cessation of Service while
holding unvested shares under the Plan, the Corporation shall have the right to
repurchase any or all of those unvested shares at the option price paid per
share. The terms and conditions upon which such repurchase right shall be
exercisable (including the period and procedure for exercise and the appropriate
vesting schedule for the purchased shares) shall be established by the Plan
Administrator and set forth in the instrument evidencing such repurchase right.
(b) All of the Corporation's outstanding repurchase
rights shall automatically terminate, and all shares subject to such terminated
rights shall immediately vest in full, upon the occurrence of any Corporate
Transaction under Section VII of this Plan, except to the extent: (i) any such
repurchase right is to be assigned to the successor corporation (or parent
thereof) in connection with the Corporate Transaction or (ii) such accelerated
vesting is precluded by other limitations imposed by the Plan Administrator at
the time the repurchase right is issued.
(c) The Plan Administrator shall have the
discretionary authority, exercisable either before or after the optionee's
cessation of Service, to cancel the Corporation's outstanding repurchase rights
with respect to any or all unvested shares purchased or purchasable by the
optionee under the Plan and thereby accelerate the vesting of those shares in
whole or in part at any time.
VI. INCENTIVE OPTIONS.
The terms and conditions specified below shall be applicable to
all Incentive Options granted under the Plan. Incentive Options may only be
granted to individuals who are Employees. Options which are specifically
designated as "non-statutory" options when issued under the Plan shall not be
subject to such terms and conditions.
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(a) Option Price. The option price per share of the
Common Stock subject to an Incentive Option shall in no event be less than one
hundred percent (100%) of the fair market value of a share of Common Stock on
the date of grant.
(b) Dollar Limitation. The aggregate fair market
value (determined as of the respective date or dates of grant) of the Common
Stock for which one or more options granted to any Employee under this Plan (or
any other option plan of the Corporation or its parent or subsidiary
corporations) may for the first time become exercisable as incentive stock
options under the Federal tax laws during any one calendar year shall not exceed
the sum of One Hundred Thousand Dollars ($100,000). To the extent the Employee
holds two or more such options which become exercisable for the first time in
the same calendar year, the foregoing limitation on the exercisability of such
options as incentive stock options under the Federal tax laws shall be applied
on the basis of the order in which such options are granted. Should the number
of shares of Common Stock for which an Incentive Option first becomes
exercisable in any calendar year exceed the applicable One Hundred Thousand
Dollar ($100,000) limitation, the option may nevertheless be exercised for those
excess shares in such calendar year as a nonstatutory option.
(c) 10% Stockholder. If any individual to whom the
Incentive Option is granted is the owner of stock (as determined under Section
424(d) of the Internal Revenue Code) possessing ten percent (10%) or more of the
total combined voting power of all classes of stock of the Corporation or any
one of its parent or subsidiary corporations, then the option price per share
shall not be less than one hundred and ten percent (110%) of the fair market
value per share of Common Stock on the grant date, and the option term shall not
exceed five (5) years, measured from such grant date.
Except as modified by the preceding provisions of this Section
VI, all the provisions of the Plan shall be applicable to the Incentive Options
granted hereunder.
VII. CORPORATE TRANSACTION/CHANGE IN CONTROL
(a) In the event of any of the following
transactions (a "Corporate Transaction"):
(i) a merger or consolidation in which the
Corporation is not the surviving entity, except for a transaction the
principal purpose of which is to change the State of the Corporation's
incorporation,
(ii) the sale, transfer or other disposition
of all or substantially all of the assets of the Corporation in
liquidation or dissolution of the Corporation, or
(iii) any reverse merger in which the
Corporation is the surviving entity but in which fifty percent (50%) or
more of the Corporation's outstanding voting stock is transferred to
persons different from those who held the stock immediately prior to
such merger,
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each outstanding option under the Plan shall automatically accelerate so that
each such option shall, immediately prior to the specified effective date for
the Corporate Transaction, become exercisable for the total number of shares of
Common Stock at the time subject to such option and may be exercised for all or
any portion of those shares as fully-vested shares of Common Stock. However, an
outstanding option under the Plan shall not so accelerate if and to the extent:
(i) such option is, in connection with the Corporate Transaction, either to be
assumed by the successor corporation or parent thereof or be replaced with a
comparable option to purchase shares of the capital stock of the successor
corporation or parent thereof or (ii) the acceleration of such option is subject
to other applicable limitations imposed by the Plan Administrator at the time of
grant. The determination of comparability under clause (i) above shall be made
by the Plan Administrator and its determination shall be final, binding and
conclusive.
(b) Each outstanding option under the Plan which is
assumed in connection with the Corporate Transaction or is otherwise to continue
in effect shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply and pertain to the number and class of securities which
would have been issued, in consummation of such Corporate Transaction, to an
actual holder of the same number of shares of Common Stock as are subject to
such option immediately prior to such Corporate Transaction. Appropriate
adjustments shall also be made to the option price payable per share, provided
the aggregate option price payable for such securities shall remain the same. In
addition, the class and number of securities available for issuance under the
Plan on both an aggregate and per participant basis shall be appropriately
adjusted to reflect the effect of the Corporate Transaction upon the
Corporation's capital structure.
(c) In connection with any Change in Control (as
defined below), the Plan Administrator shall have full power and authority,
exercisable either at the time the option is granted or at any time while the
option remains outstanding, to provide for the automatic acceleration of each
outstanding option under the Plan so that each such option shall, immediately
prior to the effective date of the Change in Control, become exercisable for the
total number of shares at the time subject to such option and may be exercised
for all or any portion of those shares as fully-vested shares of Common Stock.
The Plan Administrator shall also have full power and authority to condition
such option acceleration, and the termination of any of the Corporation's
repurchase rights with respect to any unvested shares purchased or purchasable
under the Plan, upon the subsequent termination of the optionee's Service within
a designated period following the Change in Control.
A CHANGE IN CONTROL shall be deemed to occur in the event:
(i) twenty-five percent (25%) or more of the
Corporation's outstanding voting stock is acquired pursuant to a tender
or exchange offer (A) which is made directly to the Corporation's
stockholders by any person or related group of persons (other than the
Corporation or a person that directly or indirectly controls, is
controlled by or is under common control with, the Corporation) and (B)
which the Board does not recommend the stockholders to accept; or
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(ii) there is a change in the composition of
the Board over a period of twenty-four (24) consecutive months or less
such that a majority of the Board members ceases, by reason of one or
more proxy contests for the election of Board members, to be comprised
of individuals who either (A) have been Board members continuously since
the beginning of such period or (B) have been elected or nominated for
election as Board members during such period by at least a majority of
the Board members described in clause (A) who were still in office at
the time such election or nomination was approved by the Board.
(d) Immediately following the consummation of a
Corporate Transaction, all outstanding options under the Plan shall terminate
and cease to be outstanding, except to the extent assumed by the successor
corporation or its parent company. Upon a Change in Control, each outstanding
option accelerated pursuant to subsection VII(C) above shall remain fully
exercisable until the expiration or sooner termination of the option term
specified in the agreement evidencing such grant.
(e) The exercisability as incentive stock options
under the Federal tax laws of any options accelerated in connection with a
Corporate Transaction or Change in Control shall remain subject to the dollar
limitation of Section VI(b) of the Plan. To the extent such dollar limitation is
exceeded, the accelerated option shall be exercisable as a non-statutory option
under the Federal tax laws.
(f) The grant of options under this Plan shall in no
way affect the right of the Corporation to adjust, reclassify, reorganize or
otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.
VIII. CANCELLATION AND REGRANT OF OPTIONS
The Plan Administrator shall have the authority to effect, at
any time and from time to time, with the consent of the affected optionees, the
cancellation of any or all outstanding options under the Plan and to grant in
substitution therefor new options under the Plan covering the same or different
numbers of shares of Common Stock but having an option price per share not less
than (i) eighty-five percent (85%) of the fair market value per share of the
Common Stock on the new grant date or (ii) one hundred percent (I 00%) of such
fair market value in the case of an Incentive Option or (iii) one hundred and
ten percent (110%) of such fair market value in the case of an Incentive Option
granted to a 10% Stockholder.
IX. STOCK APPRECIATION RIGHTS
(a) Provided and only if the Plan Administrator determines
in its discretion to implement the stock appreciation right provisions of this
Section IX, one or more optionees may be granted the right, exercisable upon
such terms and conditions as the Plan Administrator may establish, to surrender
all or part of an unexercised option under the Plan in exchange for a
distribution from the Corporation in an amount equal to the excess of (i) the
fair
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market value (on the option surrender date) of the number of shares in which the
optionee is at the time vested under the surrendered option (or surrendered
portion thereof) over (ii) the aggregate option price payable for such vested
shares.
(b) No surrender of an option shall be effective
hereunder unless it is approved by the Plan Administrator. If the surrender is
so approved, then the distribution to which the optionee shall accordingly
become entitled under this Section IX may be made in shares of Common Stock
valued at fair market value on the option surrender date, in cash, or partly in
shares and partly in cash, as the Plan Administrator shall in its sole
discretion deem appropriate.
(c) If the surrender of an option is rejected by the
Plan Administrator, then the optionee shall retain whatever rights the optionee
had under the surrendered option (or surrendered portion thereof) on the option
surrender date and may exercise such rights at any time prior to the later of
(i) five (5) business days after the receipt of the rejection notice or (ii) the
last day on which the option is otherwise exercisable in accordance with the
terms of the instrument evidencing such option, but in no event may such rights
be exercised more than ten (10) years after the date of the option grant.
(d) One or more officers of the Corporation subject
to the short-swing profit restrictions of the Federal securities laws may, in
the Plan Administrator's sole discretion, be granted limited stock appreciation
rights in tandem with their outstanding options under the Plan. Upon the
occurrence of a Hostile Take-Over, each outstanding option with such a limited
stock appreciation right shall automatically be cancelled, to the extent such
option is at the time exercisable for fully-vested shares of Common Stock
(including any shares which may vest in connection with such Hostile Take-Over).
The optionee shall in return be entitled to a cash distribution from the
Corporation in an amount equal to the excess of (i) the Take-Over Price of the
vested shares of Common Stock at the time subject to the cancelled option (or
cancelled portion of such option) over (ii) the aggregate exercise price payable
for such shares. The cash distribution payable upon such cancellation shall be
made within five (5) days following the consummation of the Hostile Take-Over.
The Plan Administrator shall pre-approve, at the time the limited stock
appreciation right is granted, the subsequent exercise of that right in
accordance with the terms of the grant and the provisions of this Section IX(d).
No additional approval of the Plan Administrator or the Board shall be required
at the time of the actual option cancellation and cash distribution. The balance
of the option (if any) shall continue to remain outstanding and exercisable in
accordance with the terms and conditions of the instrument evidencing such
grant.
(e) For purposes of Section IX(d), the following
definitions shall be in effect:
A HOSTILE TAKE-OVER shall be deemed to occur in the
event any person or related group of persons (other than the Corporation
or a person that directly or indirectly controls, is controlled by, or
is under common control with, the Corporation) directly or indirectly
acquires beneficial ownership (within the
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meaning of Rule 13d-3 of the Securities Exchange Act of 1934) of
securities possessing more than twenty-five percent (25%) of the total
combined voting power of the Corporation's outstanding securities
pursuant to a tender or exchange offer made directly to the
Corporation's stockholders which the Board does not recommend such
stockholders to accept.
The TAKE-OVER PRICE per share shall be deemed to be
equal to the greater of (a) the fair market value per share on the date
of cancellation, as determined pursuant to the valuation provisions of
Section V.I.C, or (b) the highest reported price per share paid by the
acquiring entity in effecting such Hostile Take-Over. However, to the
extent the cancelled option is an Incentive Option, the Take-Over Price
shall not exceed the clause (a) price per share.
(f) The shares of Common Stock subject to any option
surrendered or cancelled for an appreciation distribution pursuant to this
Section IX shall not be available for subsequent option grant under the Plan.
X. LOANS OR INSTALLMENT PAYMENTS
The Plan Administrator may, in its discretion, assist any
optionee (including any officer or director of the Corporation) in the exercise
of one or more options granted to such individual under the Plan, including the
satisfaction of any Federal and State income and employment tax obligations
arising therefrom, by (i) authorizing the extension of a loan from the
Corporation to such optionee or (ii) permitting the optionee to pay the option
price for the purchased Common Stock in installments over a period of years. The
terms of any such loan or installment method of payment (including the interest
rate and terms of repayment) will be upon such terms as the Plan Administrator
specifies in the applicable option agreement or otherwise deems appropriate
under the circumstances. Loans or installment payments may be granted with or
without security or collateral (other than to individuals who are independent
consultants or advisors, in which event the loan must be adequately secured by
collateral other than the purchased shares). However, the maximum credit
available to the optionee may not exceed the option price of the acquired shares
(less the par value of those shares) plus any Federal and State income and
employment tax liability incurred by the optionee in connection with the
exercise of the option.
XI. EXTENSION OF EXERCISE PERIOD
The Plan Administrator shall have full power and authority, to
extend the period of time for which the option is to remain exercisable
following the optionee's cessation of Service from the thirty-six (36) month or
shorter period set forth in the option agreement to such greater period of time
as the Plan Administrator shall deem appropriate. In no event, however, shall
such option be exercisable after the specified expiration date of the option
term.
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XII. AMENDMENT OF THE PLAN
The Board shall have complete and exclusive power and authority
to amend or modify the Plan in any or all respects whatsoever; provided,
however, that no such amendment or modification shall, without the consent of
the holders, adversely affect rights and obligations with respect to options at
the time outstanding under the Plan. In addition, certain amendments may require
stockholder approval pursuant to applicable laws or regulations.
XIII. EFFECTIVE DATE AND TERM OF PLAN
(a) The Plan was initially adopted by the Board on
July 19, 1988 and approved by the Corporation's stockholders on March 29, 1989.
The Plan was subsequently amended by the Board on July 18, 1990, and such
amendment was approved by the Corporation's stockholders in October, 1990. In
January 1991, the Plan was again amended to increase by 480,000 shares the
number of shares of Common Stock issuable under the Plan, and such share
increase was approved by the Corporation's stockholders on March 20, 1991. The
Board further amended the Plan on May 22, 1991, with such amendments to become
effective as of the date the Corporation's Common Stock first became traded on
the Nasdaq National Market, in order to revise certain provisions previously
required when the Plan was subject to the permit requirements of the California
Corporations Department. On March 18, 1992, the Plan was amended and restated in
its entirety, including an increase of 670,000 shares to the number of shares of
Common Stock issuable thereunder. The 1992 restatement, including the 670,000
share increase, was approved by the stockholders at the 1992 Annual Meeting. On
January 13, 1993, the Board amended the Plan to increase by an additional
700,000 shares the number of shares of Common Stock issuable under the Plan, and
such share increase was approved by the stockholders at the 1993 Annual Meeting.
On February 28, 1994, the Board amended the Plan to increase by an additional
650,000 shares the number of shares of Common Stock issuable under the Plan, and
such increase was approved by the stockholders at the 1994 Annual Meeting. On
January 25, 1995, the Board amended the Plan to increase by an additional
500,000 shares the number of shares of Common Stock issuable under the Plan, and
such increase was approved by the stockholders at the 1995 Annual Meeting. On
January 24, 1996, the Board adopted an amendment which increased the number of
shares of Common Stock issuable under the Plan by an additional 1,200,000
shares, and such increase was approved by the stockholders at the 1996 Annual
Meeting.
On February 24, 1997, the Board adopted a series of amendments
to the Plan (the "1997 Amendments") which (i) increased the number of shares of
Common Stock reserved for issuance over the term of the Plan by an additional
800,000 shares, (ii) rendered non-employee Board members serving as Plan
Administrator eligible to receive option grants under the Plan, (iii) allowed
unvested shares issued under the Plan and subsequently repurchased by the
Corporation at the option exercise price paid per share to be reissued under the
Plan, (iv) removed certain restrictions on the eligibility of non-employee Board
members to serve as Plan Administrator, (v) extended the term of the Option Plan
from July 19, 1998 to December 31, 2002 and (vi) effected a series of
additional changes to the provisions of the Plan (including the stockholder
approval requirements, the transferability of non-statutory stock options and
the
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elimination of the six (6)-month holding period requirement as a condition to
the exercise of stock appreciation rights) in order to take advantage of the
recent amendments to Rule 16b-3 of the 1934 Act which exempts certain officer
and director transactions under the Plan from the short-swing liability
provisions of the federal securities laws. The 1997 Amendments were approved by
the Corporation's stockholders at the 1997 Annual Meeting.
On February 20, 1998, the Board authorized an increase of
855,000 shares of Common Stock to the share reserve under the Plan, and such
increase was approved by the stockholders at the 1998 Annual Meeting.
On January 13, 1999, the Board authorized an increase of 800,000
shares of Common Stock to the share reserve under the Plan, subject to
stockholder approval at the 1999 Annual Meeting (the "1999 Amendment"). No
options granted on the basis of the 1999 Amendment shall vest or become
exercisable unless and until such stockholder approval of the 1999 Amendment is
obtained. The 1999 Amendment was approved by the stockholders at the 1999 Annual
Meeting held on May 20, 1999.
(b) The provisions of the 1992 restatement and of
each subsequent amendment to the Plan shall apply only to stock options and
stock appreciation rights granted under the Plan from and after the applicable
effective date of such restatement or amendment. All stock options and stock
appreciation rights issued and outstanding under the Plan immediately prior to
each such effective date shall continue to be governed by the terms and
conditions of the Plan (and the respective agreements evidencing each such
option or stock appreciation right) as in effect on the date each such option or
stock appreciation right was previously granted, and nothing in the 1992
restatement or in any subsequent amendment shall be deemed to affect or
otherwise modify the rights or obligations of the holders of such prior options
or stock appreciation rights with respect to their acquisition of shares of
Common Stock under such options or their exercise of such stock appreciation
rights. However, the Plan Administrator may, in its discretion, modify stock
option or stock appreciation right issued and outstanding immediately prior to
the effective date of the 1992 restatement or any subsequent amendment to
include one or more provisions to the Plan added by such restatement or
amendment.
(c) Unless sooner terminated in accordance with
Section VII, the Plan shall terminate upon the earlier of (i) December 31, 2002
or (ii) the date on which all shares available for issuance under the Plan shall
have been issued or cancelled pursuant to the exercise, surrender of cash-out of
the stock options and stock appreciation rights granted hereunder. If the date
of termination is determined under clause (i) above, then each stock option or
stock appreciation right outstanding on such date shall thereafter continue to
have force and effect in accordance with the provisions of the instruments
evidencing such grant.
(d) Options may be granted under this Plan to
purchase shares of Common Stock in excess of the number of shares then available
for issuance under the Plan, provided any excess shares actually issued under
the Plan are held in escrow until stockholder approval is obtained for a
sufficient increase in the number of shares available for issuance under
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the Plan. If such stockholder approval is not obtained within twelve (12) months
after the date the first such excess option grants are made, then (I) any
unexercised excess options shall terminate and cease to be exercisable and (11)
the Corporation shall promptly refund the purchase price paid for any excess
shares actually issued under the Plan and held in escrow, together with interest
(at the applicable Short Term Federal Rate) for the period the shares were held
in escrow.
XIV. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale of
shares pursuant to options granted under the Plan shall be used for general
corporate purposes.
XV. REGULATORY APPROVALS
The implementation of the Plan, the granting of any stock option
or stock appreciation right hereunder, and the issuance of stock upon the
exercise of any such option or stock appreciation right shall be subject to the
procurement by the Corporation of all approvals and permits required by
regulatory authorities having jurisdiction over the Plan, the options and stock
appreciation rights granted under it and the stock issued pursuant to it.
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EXHIBIT 99.4
IDEC PHARMACEUTICALS CORPORATION
1995 EMPLOYEE STOCK PURCHASE PLAN
AMENDED AND RESTATED EFFECTIVE MAY 20, 1999
I. PURPOSE OF THE PLAN
This Employee Stock Purchase Plan is intended to promote the
interests of IDEC Pharmaceuticals Corporation by providing eligible employees
with the opportunity to acquire a proprietary interest in the Corporation
through participation in a payroll-deduction based employee stock purchase plan
designed to qualify under Section 423 of the Code.
Capitalized terms herein shall have the meanings assigned to
such terms in the attached Appendix.
II. ADMINISTRATION OF THE PLAN
The Compensation Committee of the Board in its capacity as Plan
Administrator shall have full authority to interpret and construe any provision
of the Plan and to adopt such rules and regulations for proper administration of
the Plan as it may deem necessary or appropriate. Decisions of the Plan
Administrator shall be final and binding on all parties having an interest in
the Plan.
III. STOCK SUBJECT TO PLAN
A. The stock purchasable under the Plan shall be shares of
authorized but unissued or reacquired Common Stock, including shares of Common
Stock purchased on the open market. The maximum number of shares of Common Stock
which may be issued over the term of the Plan shall not exceed 695,000 shares,
inclusive of the 200,000 share increase which the Board authorized on January
13, 1999 and the stockholders approved at the 1999 Annual Meeting held on May
20, 1999.
B. Should any change be made to the Common Stock by reason
of any stock split, stock dividend, recapitalization, combination of shares,
exchange of shares or other change affecting the outstanding Common Stock as a
class without the Corporation's receipt of consideration, appropriate
adjustments shall be made to (i) the maximum number and class of securities
issuable under the Plan, (ii) the maximum number and class of securities
purchasable per Participant on any one Purchase Date or purchasable in the
aggregate by all Participants on any one Purchase Date and (iii) the number and
class of securities and the price per share in effect under each outstanding
purchase right in order to prevent the dilution or enlargement of benefits
thereunder.
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IV. OFFERING PERIODS
A. Shares of Common Stock shall be offered for purchase
under the Plan through a series of successive offering periods until such time
as (i) the maximum number of shares of Common Stock available for issuance under
the Plan shall have been purchased or (ii) the Plan shall have been sooner
terminated.
B. Each offering period shall be of such duration (not to
exceed twenty-four (24) months) as determined by the Plan Administrator prior to
the start date. The initial offering period commenced on the Effective Date and
ended on the last business day in June 1997; the next offering period commenced
on the first business day in July 1997 and terminated on the last business day
in June 1998. A new offering period commenced on the first business day in July
1998 and shall end on the last business day in December 1999. Subsequent
offering periods shall commence as designated by the Plan Administrator.
C. Each offering period shall be comprised of a series of
successive quarterly Purchase Periods. Purchase Periods shall commence on the
first business day in July, October, January and April each year and shall end
on the last business day in the following September, December, March and June,
respectively, each year. Accordingly, there shall be a maximum of eight (8)
quarterly Purchase Periods within each offering period.
D. Under no circumstances shall any offering period
commence under the Plan, nor shall any shares of Common Stock be issued
hereunder, until such time as (i) the Plan shall have been approved by the
Corporation's stockholders and (ii) the Corporation shall have complied with all
applicable requirements of the Securities Act, all applicable listing
requirements of any securities exchange (or the Nasdaq National Market if
applicable) on which shares of the Common Stock are listed for trading and all
other applicable statutory and regulatory requirements.
V. ELIGIBILITY
A. Each Eligible Employee shall be eligible to enter an
offering period under the Plan on the start date of any Purchase Period (within
that offering period) which begins on or after his or her completion of thirty
(30) days of continuous service with the Corporation or any Corporate Affiliate,
provided he or she remains an Eligible Employee on such start date. The date
such individual enters the offering period shall be designated his or her Entry
Date for purposes of that offering period.
B. To participate in the Plan for a particular offering
period, the Eligible Employee must complete the enrollment forms prescribed by
the Plan Administrator (including a stock purchase agreement and a payroll
deduction authorization form) and file such forms with the Plan Administrator
(or its designate) prior to his or her scheduled Entry Date. However, each
individual who was a Participant in the offering period that commenced July 1,
1997 and that terminated on June 30, 1998 shall automatically be enrolled in the
offering period commencing July 1, 1998 and ending December 31, 1999, provided
the Participant is an Eligible Employee on July 1, 1998. Accordingly, July 1,
1998 shall be the Entry Date for each such Participant for the new offering
period.
2.
3
VI. PAYROLL DEDUCTIONS
A. The payroll deduction authorized by the Participant for
purposes of acquiring shares of Common Stock in an offering period may be any
multiple of one percent (1%) of the Eligible Earnings paid to the Participant
during each Purchase Period within that offering period, up to a maximum of ten
percent (10%). The deduction rate so authorized shall continue in effect for the
remainder of the offering period, except to the extent such rate is changed in
accordance with the following guidelines:
(i) The Participant may, at any time during an
offering period, reduce his or her rate of payroll deduction to any
lower multiple of one percent of Eligible Earnings to become effective
as soon as possible after filing the appropriate form with the Plan
Administrator. The Participant may not, however, effect more than one
(1) such reduction per Purchase Period.
(ii) The Participant may, prior to the commencement
of any new Purchase Period within the offering period, increase or
decrease the rate of his or her payroll deduction by filing the
appropriate form with the Plan Administrator prior to the start date of
that Purchase Period. The new rate (which may not exceed the ten percent
(10%) maximum) shall become effective as of the start date of the first
Purchase Period following the filing of such form.
B. Payroll deductions shall begin on the first pay day
following the Participant's Entry Date into the offering period and shall
(unless sooner terminated by the Participant) continue through the pay day
ending with or immediately prior to the last day of that offering period. The
amounts so collected shall be credited to the Participant's book account under
the Plan, but no interest shall be paid on the balance from time to time
outstanding in such account. The amounts collected from the Participant shall
not be held in any segregated account or trust fund and may be commingled with
the general assets of the Corporation and used for general corporate purposes.
C. Payroll deductions shall automatically cease upon the
termination of the Participant's purchase right in accordance with the
provisions of the Plan.
D. The Participant's acquisition of Common Stock under the
Plan on any Purchase Date shall neither limit nor require the Participant's
acquisition of Common Stock on any subsequent Purchase Date, whether within the
same or a different offering period.
3.
4
VII. PURCHASE RIGHTS
A. GRANT OF PURCHASE RIGHT. A Participant shall be granted
a separate purchase right for each offering period in which he or she
participates. The purchase right shall be granted on the Participant's Entry
Date into the offering period and shall provide the Participant with the right
to purchase shares of Common Stock, in a series of successive installments over
the remainder of such offering period, upon the terms set forth below. The
Participant shall execute a stock purchase agreement embodying such terms and
such other provisions (not inconsistent with the Plan) as the Plan Administrator
may deem advisable.
Under no circumstances shall purchase rights be granted under
the Plan to any Eligible Employee if such individual would, immediately after
the grant, own (within the meaning of Code Section 424(d)) or hold outstanding
options or other rights to purchase, stock possessing five percent (5%) or more
of the total combined voting power or value of all classes of stock of the
Corporation or any Corporate Affiliate.
B. EXERCISE OF THE PURCHASE RIGHT. Each purchase right
shall be automatically exercised in installments on each Purchase Date within
the offering period, and shares of Common Stock shall accordingly be purchased
on behalf of each Participant (other than any Participant whose payroll
deductions have previously been refunded in accordance with the Termination of
Purchase Right provisions below) on each such Purchase Date. The purchase shall
be effected by applying the Participant's payroll deductions for the Purchase
Period ending on such Purchase Date (together with any carryover deductions from
the preceding Purchase Period) to the purchase of whole shares of Common Stock
(subject to the limitation on the maximum number of shares purchasable per
Participant on any one Purchase Date) at the purchase price in effect for the
Participant for that Purchase Date.
C. PURCHASE PRICE. The purchase price per share at which
Common Stock will be purchased on the Participant's behalf on each Purchase Date
within the offering period shall be equal to eighty-five percent (85%) of the
lower of (i) the Fair Market Value per share of Common Stock on the
Participant's Entry Date into that offering period or (ii) the Fair Market Value
per share of Common Stock on that Purchase Date. However, for each Participant
whose Entry Date is other than the start date of the offering period, the clause
(i) amount shall in no event be less than the Fair Market Value per share of
Common Stock on the start date of that offering period.
D. NUMBER OF PURCHASABLE SHARES. The number of shares of
Common Stock purchasable by a Participant on each Purchase Date during the
offering period shall be the number of whole shares obtained by dividing the
amount collected from the Participant through payroll deductions during the
Purchase Period ending with that Purchase Date (together with any carryover
deductions from the preceding Purchase Period) by the purchase price in effect
for the Participant for that Purchase Date. However, the maximum number of
shares of Common Stock purchasable per Participant on any one Purchase Date
shall not exceed 2,500 shares, subject to periodic adjustments in the event of
certain changes in the Corporation's capitalization.
4.
5
However, the Plan Administrator shall have the discretionary authority,
exercisable prior to the start of any offering period under the Plan, to
increase or decrease the limitation to be in effect for the number of shares
purchasable per Participant on each Purchase Date during that offering period.
In addition, the maximum aggregate number of shares of Common
Stock purchasable by all Participants on a particular Purchase Date (the
"Aggregate Limit") during the offering period which began July 1, 1998 shall not
exceed the number below such Purchase Date on the following chart:
Purchase Date 9/30/98 12/31/98 3/31/99 6/30/99 9/30/99 12/31/99
- --------------------------------------------------------------------------------------------
Maximum
Purchasable 17,000 18,000 19,000 20,000 20,000 21,000
Shares
- --------------------------------------------------------------------------------------------
However, if the Aggregate Limit for a particular Purchase Date
exceeds the number of shares of Common Stock actually purchased by all
Participants on that Purchase Date, then the number of shares equal to such
excess shall be carried over to the subsequent Purchase Date and thereby
increase the Aggregate Limit in effect for that date.
E. EXCESS PAYROLL DEDUCTIONS. Any payroll deductions not
applied to the purchase of shares of Common Stock on any Purchase Date because
they are not sufficient to purchase a whole share of Common Stock shall be held
for the purchase of Common Stock on the next Purchase Date. However, any payroll
deductions not applied to the purchase of Common Stock by reason of the
limitation on the maximum number of shares purchasable by the Participant on the
Purchase Date shall be promptly refunded.
F. TERMINATION OF PURCHASE RIGHT. The following provisions
shall govern the termination of outstanding purchase rights:
(i) A Participant may, at any time at least five (5)
business days prior to the next Purchase Date in the offering period,
terminate his or her outstanding purchase right by filing the
appropriate form with the Plan Administrator (or its designate), and no
further payroll deductions shall be collected from the Participant with
respect to the terminated purchase right. Any payroll deductions
collected during the Purchase Period in which such termination occurs
shall, at the Participant's election, be immediately refunded or held
for the purchase of shares on the next Purchase Date. If no such
election is made at the time such purchase right is terminated, then the
payroll deductions collected with respect to the terminated right shall
be refunded as soon as possible.
5.
6
(ii) The termination of such purchase right shall be
irrevocable, and the Participant may not subsequently rejoin the
offering period for which the terminated purchase right was granted. In
order to resume participation in any subsequent offering period, such
individual must re-enroll in the Plan (by making a timely filing of the
prescribed enrollment forms) prior to his or her scheduled Entry Date
into that offering period.
(iii) Should the Participant cease to remain an
Eligible Employee for any reason (including death, disability or change
in status) while his or her purchase right remains outstanding, then
such individual (or the personal representative of the estate of a
deceased Participant) shall have the following election, exercisable up
until the end of the Purchase Period in which such cessation of Eligible
Employee status occurs:
(A) to withdraw all of the Participant's
payroll deductions to date during that Purchase Period or
(B) to have such funds held for the purchase
of shares on the next Purchase Date.
In the absence of such a timely election, the
Participant's payroll deductions shall be refunded as soon as
possible after the close of the Purchase Period. In no event,
however, may any payroll deductions be made on the Participant's
behalf following his/her cessation of Eligible Employee status.
(iv) Should the Participant cease to remain in active
service by reason of an approved unpaid leave of absence, then the
Participant shall have the election, exercisable up until the last
business day of the Purchase Period in which such leave commences, to
(a) withdraw all the funds in the Participant's payroll account at the
time of the commencement of such leave or (b) have such funds held for
the purchase of shares at the end of such Purchase Period. In no event,
however, shall any further payroll deductions be added to the
Participant's account during such unpaid leave. Upon the Participant's
return to active service, his or her payroll deductions under the Plan
shall automatically resume at the rate in effect at the time the leave
began, provided the Participant returns to service prior to the
expiration date of the offering period in which such leave began.
G. CORPORATE TRANSACTION. Each outstanding purchase right
shall automatically be exercised, immediately prior to the effective date of any
Corporate Transaction, by applying the payroll deductions of each Participant
for the Purchase Period in which such Corporate Transaction occurs to the
purchase of whole shares of Common Stock at a purchase price per share equal to
eighty-five percent (85%) of the lower of (i) the Fair Market Value per
6.
7
share of Common Stock on the Participant's Entry Date into the offering period
in which such Corporate Transaction occurs or (ii) the Fair Market Value per
share of Common Stock immediately prior to the effective date of such Corporate
Transaction. However, the applicable limitation on the number of shares
purchasable per Participant shall continue to apply to any such purchase, and
the clause (i) amount above shall not, for any Participant whose Entry Date for
the offering period is other than the start date of that offering period, be
less than the Fair Market Value per share of Common Stock on such start date.
The Corporation shall use its best efforts to provide at least
ten (10)-days prior written notice of the occurrence of any Corporate
Transaction, and Participants shall, following the receipt of such notice, have
the right to terminate their outstanding purchase rights prior to the effective
date of the Corporate Transaction.
H. PRORATION OF PURCHASE RIGHTS. Should the total number of
shares of Common Stock which are to be purchased pursuant to outstanding
purchase rights on any particular date exceed the number of shares then
available for issuance under the Plan, the Plan Administrator shall make a
pro-rata allocation of the available shares on a uniform and nondiscriminatory
basis, and the payroll deductions of each Participant, to the extent in excess
of the aggregate purchase price payable for the Common Stock pro-rated to such
individual, shall be refunded.
I. ASSIGNABILITY. No purchase right granted under the Plan
shall be assignable or transferable by the Participant other than by will or by
the laws of descent and distribution following the Participant's death, and
during the Participant's lifetime the purchase right shall be exercisable only
by the Participant.
J. STOCKHOLDER RIGHTS. A Participant shall have no
stockholder rights with respect to the shares subject to his or her outstanding
purchase right until the shares are purchased on the Participant's behalf in
accordance with the provisions of the Plan and the Participant has become a
holder of record of the purchased shares.
A Participant shall be issued, as soon as practicable after the
date of each purchase, a stock certificate for the number of shares purchased on
the Participant's behalf. Such certificate may, upon the Participant's request,
be issued in the names of the Participant and his/her spouse as community
property or as joint tenants with right of survivorship. Alternatively, the
stock certificate may be delivered to a designated stock brokerage account
maintained for the Participant and held in "street name" in order to facilitate
the subsequent sale of the purchased shares.
VIII. ACCRUAL LIMITATIONS
A. No Participant shall be entitled to accrue rights to
acquire Common Stock pursuant to any purchase right outstanding under this Plan
if and to the extent such accrual, when aggregated with (i) rights to purchase
Common Stock accrued under any other purchase right granted under this Plan and
(ii) similar rights accrued under other employee stock purchase plans
7.
8
(within the meaning of Code Section 423) of the Corporation or any Corporate
Affiliate, would otherwise permit such Participant to purchase more than
Twenty-Five Thousand Dollars ($25,000) worth of stock of the Corporation or any
Corporate Affiliate (determined on the basis of the Fair Market Value of such
stock on the date or dates such rights are granted) for each calendar year such
rights are at any time outstanding.
B. For purposes of applying such accrual limitations, the
following provisions shall be in effect:
(i) The right to acquire Common Stock under each
outstanding purchase right shall accrue in a series of installments on
each Purchase Date during the offering period on which such right
remains outstanding.
(ii) No right to acquire Common Stock under any
outstanding purchase right shall accrue to the extent the Participant
has already accrued in the same calendar year the right to acquire
Common Stock under one (1) or more other purchase rights at a rate equal
to Twenty-Five Thousand Dollars ($25,000) worth of Common Stock
(determined on the basis of the Fair Market Value of such stock on the
date or dates of grant) for each calendar year such rights were at any
time outstanding.
C. If by reason of such accrual limitations, any purchase
right of a Participant does not accrue for a particular Purchase Period, then
the payroll deductions which the Participant made during that Purchase Period
with respect to such purchase right shall be promptly refunded.
D. In the event there is any conflict between the
provisions of this Article and one or more provisions of the Plan or any
instrument issued thereunder, the provisions of this Article shall be
controlling.
IX. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan was adopted by the Board on January 25, 1995
and was approved by the Corporation's stockholders at the 1995 Annual Meeting.
B. On February 24, 1997, the Board amended the Plan to
increase the total share reserve available for issuance under the Plan by an
additional 150,000 shares, and such increase was approved by the Corporation's
stockholders at the 1997 Annual Meeting. The Plan was subsequently amended and
restated effective July 1, 1998, to effect the following changes: (i) to limit
the duration of the offering period beginning July 1, 1998 to an eighteen (18)
month period ending on December 31, 1999, (ii) to impose limits on the maximum
number of shares of Common Stock that may be purchased in the aggregate by all
Participants on each Purchase Date in the offering period commencing July 1,
1998; (iii) to delete the automatic reset feature of Plan under which a new
offering period would automatically commence if the Fair Market Value per share
of Common Stock on any Purchase Date within an offering period is less than the
Fair
8.
9
Market Value per share of Common Stock on the start date of that offering
period; and (iv) to provide that the Plan may be amended or terminated to the
extent necessary to prevent the recognition of compensation expense for
financial accounting purposes should the accounting principles applicable to the
Plan change. The Plan was subsequently amended and restated on January 13, 1999
to effect the following changes: (i) increase the total share reserve available
for issuance under the Plan by an additional 200,000 shares of Common Stock,
subject to stockholder approval at the 1999 Annual Meeting, and (ii) to give the
Plan Administrator the discretionary authority to increase or decrease the
limitation to be in effect for the number of shares purchasable per Participant
on each Purchase Date. No purchase rights shall be granted on the basis of the
200,000-share increase authorized by the January 13, 1999 Amendment unless and
until that amendment is approved by the stockholders. Such amendment was so
approved at the 1999 Annual Stockholders Meeting held on May 20, 1999.
C. Unless sooner terminated by the Board, the Plan shall
terminate upon the earliest of (i) the last business day in June 2005, (ii) the
date on which all shares available for issuance under the Plan shall have been
sold pursuant to purchase rights exercised under the Plan or (iii) the date on
which all purchase rights are exercised in connection with a Corporate
Transaction. No further purchase rights shall be granted or exercised, and no
further payroll deductions shall be collected, under the Plan following its
termination.
X. AMENDMENT OF THE PLAN
A. The Board may alter, amend, suspend or discontinue the
Plan at any time to become effective immediately following the close of any
Purchase Period. However, the Plan may be amended or terminated immediately upon
Board action, if and to the extent necessary to assure that the Corporation will
not recognize, for financial accounting purposes, any compensation expense in
connection with the shares of Common Stock offered for purchase under the Plan,
should the financial accounting rules applicable to the Plan on the Effective
Date be subsequently revised so as to require the recognition of compensation
expense in the absence of such amendment or termination.
B. In no event may the Board effect any of the following
amendments or revisions to the Plan without the approval of the Corporation's
stockholders: (i) materially increase the number of shares of Common Stock
issuable under the Plan except for permissible adjustments in the event of
certain changes in the Corporation's capitalization, (ii) alter the purchase
price formula so as to reduce the purchase price payable for the shares of
Common Stock purchasable under the Plan or (iii) materially increase the
benefits accruing to Participants under the Plan or materially modify the
requirements for eligibility to participate in the Plan.
XI. GENERAL PROVISIONS
A. All costs and expenses incurred in the administration of
the Plan shall be paid by the Corporation.
9.
10
B. Nothing in the Plan shall confer upon the Participant
any right to continue in the employ of the Corporation or any Corporate
Affiliate for any period of specific duration or interfere with or otherwise
restrict in any way the rights of the Corporation (or any Corporate Affiliate
employing such person) or of the Participant, which rights are hereby expressly
reserved by each, to terminate such person's employment at any time for any
reason, with or without cause.
C. The provisions of the Plan shall be governed by the laws
of the State of California without resort to that State's conflict-of-laws
rules.
10.
11
SCHEDULE A
CORPORATIONS PARTICIPATING IN
EMPLOYEE STOCK PURCHASE PLAN
AS OF THE EFFECTIVE DATE
IDEC Pharmaceuticals Corporation
12
APPENDIX
The following definitions shall be in effect under the Plan:
A. BOARD shall mean the Corporation's Board of Directors.
B. CODE shall mean the Internal Revenue Code of 1986, as
amended.
C. COMMON STOCK shall mean the Corporation's common stock.
D. CORPORATE AFFILIATE shall mean any parent or subsidiary
corporation of the Corporation (as determined in accordance with Code Section
424), whether now existing or subsequently established.
E. CORPORATE TRANSACTION shall mean either of the following
stockholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities
possessing more than fifty percent (50%) of the total combined voting
power of the Corporation's outstanding securities are transferred to a
person or persons different from the persons holding those securities
immediately prior to such transaction, or
(ii) sale, transfer or other disposition of all or
substantially all of the assets of the Corporation in complete
liquidation or dissolution of the Corporation.
F. EFFECTIVE DATE shall mean July 3, 1995, the first
business day in July 1995. Any Corporate Affiliate which becomes a Participating
Corporation after such Effective Date shall designate a subsequent Effective
Date with respect to its employee-Participants.
G. ELIGIBLE EARNINGS shall mean the (i) regular base salary
paid to a Participant by one or more Participating Companies during such
individual's period of participation in the Plan, plus (ii) any pre-tax
contributions made by the Participant to any Code Section 401(k) salary deferral
plan or any Code Section 125 cafeteria benefit program now or hereafter
established by the Corporation or any Corporate Affiliate, plus (iii) all of the
following amounts to the extent paid in cash: overtime payments, bonuses,
commissions, profit-sharing distributions and other incentive-type payments.
However, Eligible Earnings shall NOT include any contributions (other than Code
Section 401(k) or Code Section 125 contributions deducted from Eligible
Earnings) made on the Participant's behalf by the Corporation or any Corporate
Affiliate to any deferred compensation plan or welfare benefit program now or
hereafter established.
A-1.
13
H. ELIGIBLE EMPLOYEE shall mean any person who is engaged,
on a regularly-scheduled basis of more than twenty (20) hours per week for more
than five (5) months per calendar year, in the rendition of personal services to
any Participating Corporation as an employee for earnings considered wages under
Code Section 3401(a).
I. ENTRY DATE shall mean the date an Eligible Employee
first commences participation in the offering period in effect under the Plan.
The earliest Entry Date under the Plan shall be the Effective Date.
J. FAIR MARKET VALUE per share of Common Stock on any
relevant date shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the
Nasdaq National Market, then the Fair Market Value shall be the closing
selling price per share of Common Stock on the date in question, as such
price is reported by the National Association of Securities Dealers on
the Nasdaq National Market or any successor system. If there is no
closing selling price for the Common Stock on the date in question, then
the Fair Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.
(ii) If the Common Stock is at the time listed on any
Stock Exchange, then the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question on the Stock
Exchange determined by the Plan Administrator to be the primary market
for the Common Stock, as such price is officially quoted in the
composite tape of transactions on such exchange. If there is no closing
selling price for the Common Stock on the date in question, then the
Fair Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.
K. PARTICIPANT shall mean any Eligible Employee of a
Participating Corporation who is actively participating in the Plan.
L. PARTICIPATING CORPORATION shall mean the Corporation and
such Corporate Affiliate or Affiliates as may be authorized from time to time by
the Board to extend the benefits of the Plan to their Eligible Employees. The
Participating Corporations in the Plan as of the Effective Date are listed in
attached Schedule A.
M. PLAN shall mean the Corporation's 1995 Employee Stock
Purchase Plan, as set forth in this document.
N. PLAN ADMINISTRATOR shall mean the Compensation Committee
of the Board in its capacity as administrator of the Plan.
O. PREDECESSOR PLAN shall mean the Corporation's existing
Employee Stock Purchase Plan.
A-2.
14
P. PURCHASE PERIOD shall mean each successive period within
the offering period at the end of which there shall be purchased shares of
Common Stock on behalf of each Participant.
Q. PURCHASE DATE shall mean the last business day of each
Purchase Period. The initial Purchase Date shall be September 30, 1995.
R. SECURITIES ACT shall mean the Securities Act of 1933, as
amended.
S. STOCK EXCHANGE shall mean either the American Stock
Exchange or the New York Stock Exchange.
A-3.
