Exhibit 4.1
Form
S-8
Bio-Path
Holdings, Inc.
File No.
000-53404
FIRST
AMENDED
BIO-PATH
HOLDINGS, INC.
Effective December __, 2008, the
Company’s Board of Directors has amended the Bio-Path Holdings, Inc. 2007 Stock
Incentive Plan to clarify the Annual Increased Provision of Section
2.2. This “First Amended Bio-Path Holdings, Inc. 2007 Stock Incentive
Plan” sets fort the clarifying amendment to Section 2.2.
So that
the appropriate incentive can be provided, the Plan provides for granting
Incentive Stock Options, Nonqualified Stock Options, Restricted Stock Awards,
Restricted Stock Unit Awards, Performance Awards and other stock-based awards,
or any combination of the foregoing. Capitalized terms not defined in the text
are defined in Section 24.
2. SHARES
SUBJECT TO THE PLAN.
2.1 Number
of Shares. Subject to Section 18, the total number of Shares reserved and
available for grant and issuance pursuant to this Plan will be
7,000,000 Shares, subject to the automatic Share increase described in
Section 2.2 below. Of the total Shares reserved for issuance under the Plan, no
more than 4,500,000 shares of Common Stock may be issued under the Plan as
Awards under Sections 6 (Restricted Stock) and 7 (Performance and Other
Stock-Based Awards) of the Plan, subject to the automatic Share increase
described in Section 2.3 below.
Shares
that have been (a) reserved for issuance under options that have expired or
otherwise terminated without issuance of the underlying Shares, (b) reserved for
issuance or issued under an Award granted hereunder but are forfeited or are
repurchased by the Company at the original issue price, or (c) reserved for
issuance or issued under an Award that otherwise terminates without Shares being
issued, shall be available for issuance. In the event of the exercise of SARs,
whether or not granted in tandem with options, only the number of shares of
Common Stock actually issued in payment of such SARs shall be charged against
the number of shares of Common Stock available for the grant of Awards
hereunder, and any Common Stock subject to tandem options, or portions thereof,
which have been surrendered in connection with any such exercise of SARs shall
not be charged against the number of shares of Common Stock available for the
grant of Awards hereunder. At all times the Company shall reserve and keep
available a sufficient number of Shares as shall be required to satisfy the
requirements of all outstanding options granted under this Plan and all other
outstanding but unvested Awards granted under this Plan. The Shares to be
offered under the Plan shall be authorized and unissued Common Stock, or issued
Common Stock that shall have been reacquired by the Company. Subject to
adjustment in accordance with Section 18.4, in any calendar year, no Participant
shall be granted Awards in respect of more than 500,000 shares of Common
Stock (whether through grants of options or SARs or other Awards of Common Stock
or rights with respect thereto).
2.2 Annual
Increases. The number of Shares of Common Stock available for issuance under the
Plan shall automatically increase on the first trading day of January of each
year, beginning with January in year 2009 and continuing through January in year
2017, by such number of Shares so that the total number of shares available for
issuance under the Plan equals ten percent (10.0%) of the total number of Shares
of the Company’s Common Stock outstanding on the last trading day in the
immediately preceding December. The minimum number of Shares of
Common stock available under the Plan shall be 7,000,000.
2.3 Award
Limitation. The number of Shares of Common Stock that may be issued under the
Plan as Awards under Sections 6 (Restricted Stock) and 7 (Performance and Other
Stock-Based Awards) of the Plan shall automatically increase on the first
trading day of January of each year, beginning with January in year 2009 and
continuing through January in year 2017, by a number of Shares equal to
sixty-four percent (64%) of the total number of Shares increased pursuant to
Section 2.2.
3. ELIGIBILITY.
ISOs (as defined in Section 5 below) may be granted only to employees (including
officers and directors who are also employees) of the Company or of a Subsidiary
of the Company. All other Awards may be granted to employees, officers,
directors, consultants, independent contractors and advisors of the Company or
Subsidiary of the Company.
4. ADMINISTRATION.
4.1 Committee
Authority. This Plan will be administered by the Committee. Any power, authority
or discretion granted to the Committee may also be taken by the Board. Subject
to the general purposes, terms and conditions of this Plan, and to the direction
of the Board, the Committee will have full power to implement and carry out this
Plan. Without limitation, the Committee will have the authority to:
(a) select
persons to receive Awards;
(b) determine
the nature, extent, form and terms of Awards and the number of Shares or other
consideration subject to Awards, including whether any particular Award shall be
settled in cash or in stock;
(c) determine
the vesting, exerciseability and payment of Awards;
(d) correct
any defect, supply any omission or reconcile any inconsistency in this Plan, any
Award or any Award Agreement;
(e) determine
whether Awards will be granted singly, in combination with, in tandem with, in
replacement of, or as alternatives to, other Awards under this Plan or any other
incentive or compensation plan of the Company or any Subsidiary of the
Company;
(f) prescribe,
amend and rescind rules and regulations relating to this Plan or any
Award;
(g) make
all factual determinations with respect to, and otherwise construe and
interpret, this Plan, any Award Agreement and any other agreement or document
executed pursuant to this Plan;
(h) grant
waivers of Plan or Award conditions;
(i) determine
whether an Award has been earned;
(j) accelerate
the vesting of any Award; and
(k) make
all other determinations necessary or advisable for the administration of this
Plan.
The
Committee’s interpretation of the Plan or any documents evidencing Awards
granted pursuant thereto and all decisions and determinations by the Committee
with respect to the Plan shall be final, binding, and conclusive on all parties
unless otherwise determined by the Board.
4.2 Committee
Discretion; Board Power. Any determination made by the Committee with respect to
any Award will be made in its sole discretion at the time of grant of the Award
or, unless in contravention of any express term of this Plan or Award, at any
later time, and such determination will be final and binding on the Company and
on all persons having an interest in any Award under this Plan. The Committee
may delegate such of its powers and authority under the Plan as it deems
appropriate to designated officers or employees of the Company. In addition, the
full Board may exercise any of the powers and authority of the Committee under
the Plan. In the event of such delegation of authority or exercise of authority
by the Board, references in the Plan to the Committee shall be deemed to refer,
as appropriate, to the delegate of the Committee or the Board. Actions taken by
the Committee and any delegation by the Committee to designated officers or
employees shall comply with Section 16(b) of the Exchange Act, the
performance-based provisions of Section 162(m) of the Code, and the regulations
promulgated under each of such statutory provisions, or the respective
successors to such statutory provisions or regulations, as in effect from time
to time, to the extent applicable. Notwithstanding any other provision of the
Plan, if the Committee deems it to be in the best interest of the Company, the
Committee retains the discretion to make such Awards under the Plan that may not
comply with the requirements of Section 16(b) of the Exchange Act, Section
162(m) of the Code, or any other relevant statute or regulation.
5. STOCK
OPTIONS. The Committee may grant Options to eligible persons and will determine
whether such options will be intended to be “Incentive Stock Options” within the
meaning of Section 422 of the Code or any successor section thereof (“ISOs”) or
nonqualified stock options (options not intended to qualify as incentive stock
options) (“NQSOs”), the number of Shares subject to the Option, the Exercise
Price of the option, the period during which the option may be exercised, and
all other terms and conditions of the Option, subject to the
following:
5.1 Form
of Option Grant. Each Option granted under this Plan will be evidenced by an
Award Agreement (“Stock Option Agreement”), which will expressly identify the
Option as an ISO or NQSO, and will be in such form and contain such provisions
(which need not be the same for each Participant) as the Committee may from time
to time approve, and which will comply with and be subject to the terms and
conditions of this Plan.
5.2 Exercise
Period. Options may be exercisable to the extent vested within the times or upon
the events determined by the Committee as set forth in the Stock Option
Agreement governing such option; provided, however, that no option will be
exercisable after the expiration of ten (10) years from the date the option is
granted; and provided further that no ISO granted to a person who directly or by
attribution owns more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or of any Subsidiary of the Company (“Ten
Percent Shareholder”) will be exercisable after the expiration of five (5) years
from the date the ISO is granted. The Committee also may provide for options to
become exercisable at one time or from time to time, periodically or otherwise,
in such number of Shares or percentage of Shares as the Committee
determines.
5.3 Exercise
Price. The Exercise Price of an option will be determined by the Committee when
the option is granted and must equal or exceed Fair Market Value of the Shares
on the date of grant; provided that: the Exercise Price of any ISO granted to a
Ten Percent Shareholder will not be less than 110% of the Fair Market Value of
the Shares on the date of grant. In addition, the Exercise Price may (i) be
subject to a limit on the economic value that may be realized by a Participant
from an option or SAR, or otherwise (ii) vary from the original purchase price,
provided that such variable purchase price can never be less than the Fair
Market Value of the shares of Common Stock subject to such option or SAR,
determined as of the date of grant.
5.4 Date
of Grant. The date of grant of an Option will be the date on which the Committee
makes the determination to grant such option, unless otherwise specified by the
Committee. The Stock Option Agreement and a copy of this Plan will be delivered
to the Participant within a reasonable time after the granting of the
Option.
5.5 Method
of Exercise. Options may be exercised by delivery to the Company of a written
stock option exercise agreement (the “Exercise Agreement”) in a form approved
from time to time by the Committee (which need not be the same for each
Participant), stating the number of Shares being purchased, the restrictions
imposed on the Shares purchased under such Exercise Agreement, if any, and such
representations and agreements regarding Participant’s investment intent and
access to information and other matters, if any, as may be required or desirable
by the Company to comply with applicable securities laws, together with payment
in full of the Exercise Price for the number of Shares being purchased. Payment
for the Shares purchased may be made in accordance with Section 8 of this
Plan.
5.6 Termination.
Unless otherwise expressly provided in an Award Agreement or otherwise
determined by the Committee, exercise of an option will always be subject to the
following:
a. If
the Participant is Terminated for any reason (including voluntary Termination)
other than death or Disability or for Cause, then the Participant may exercise
such Participant’s Options only to the extent that such options have vested in
accordance with the applicable Award Agreement and would have been exercisable
upon the Termination Date no later than three (3) months after the Termination
Date (or such shorter or longer time period not exceeding five (5) years as may
be determined by the Committee, with any exercise beyond three (3) months after
the Termination Date deemed to be a NQSO), but in any event, no later than the
expiration date of the Options.
b. If
the Participant is Terminated because of Participant’s death or Disability (or
the Participant dies within three (3) months after a Termination other than for
Cause or because of Participant’s Disability), then Participant’s Options may be
exercised only to the extent that such options have vested in accordance with
the applicable Award Agreement and would have been exercisable by Participant on
the Termination Date and must be exercised by Participant (or Participant’s
legal representative or authorized assignee) no later than twelve (12) months
after the Termination Date (or such shorter or longer time period not exceeding
five (5) years as may be determined by the Committee, with any such exercise
beyond twelve (12) months after the Termination Date when the Termination is for
Participant’s death or Disability, deemed to be a NQSO), but in any event no
later than the expiration date of the Options.
c. If
a Participant is terminated for Cause, neither the Participant, the
Participant’s estate nor such other person who may then hold the Option shall be
entitled to exercise any option with respect to any Shares whatsoever, after
termination of service, whether or not after termination of service the
Participant may receive payment from the Company or Subsidiary for vacation pay,
for services rendered prior to termination, for services rendered for the day on
which termination occurs, for salary in lieu of notice, or for any other
benefits. For the purpose of this paragraph, termination of service shall be
deemed to occur on the date when the Company dispatches notice or advice to the
Participant that such Participant's service is terminated.
d. If
the Participant is not an employee or a director, the Award Agreement shall
specify treatment of the Award upon Termination.
5.7 Limitations
on ISO. The aggregate Fair Market Value (determined as of the date of grant) of
Shares with respect to which ISOs are exercisable for the first time by a
Participant during any calendar year
(under this Plan or
under any other incentive stock option plan of the Company or Subsidiary of the
Company) will not exceed $100,000 or such other amount as may be required by the
Code. If the Fair Market Value of Shares on the date of grant with respect to
which ISOs are exercisable for the first time by a Participant during any
calendar year exceeds $100,000, then the Options for the first $100,000 worth of
Shares to become exercisable in such calendar year will be ISOs and the Options
for the amount in excess of $100,000 that become exercisable in that calendar
year will be NQSOs. In the event that the Code or the regulations promulgated
thereunder are amended after the Effective Date of this Plan to provide for a
different limit on the Fair Market Value of Shares permitted to be subject to
ISOs, such different limit will be automatically incorporated herein and will
apply to any Options granted after the effective date of such
amendment.
5.8 Modification,
Extension or Renewal. The Committee may modify, extend or renew outstanding
Options and authorize the grant of new Options in substitution therefor,
provided that, except as expressly provided for in the Plan or an Award
Agreement, any such action may not, without the written consent of a
Participant, (i) impair any of such Participant’s rights under any option
previously granted and (ii) except as provided for in Section 18 of the Plan,
options issued hereunder will not be repriced, replaced or regranted through
cancellation or by lowering the Exercise Price of a previously granted Award
without prior approval of the Company’s Shareholders. Any outstanding ISO that
is modified, extended, renewed or otherwise altered will be treated in
accordance with Section 424(h) of the Code.
5.9 Limitations
on Exercise. The Committee may specify a reasonable minimum number of Shares
that may be purchased on any exercise of an option, provided that such minimum
number will not prevent Participant from exercising the option for the full
number of Shares for which it is then exercisable.
5.10 No
Disqualification. Notwithstanding any other provision in this Plan, no term of
this Plan relating to ISOs will be interpreted, amended or altered, nor will any
discretion or authority granted under this Plan be exercised, so as to
disqualify this Plan under Section 422 of the Code or, without the consent of
the Participant affected, to disqualify any ISO under Section 422 of the
Code.
5.11 Lapsed
Grants. Notwithstanding anything in the Plan to the contrary, the Company may,
in its sole discretion, allow the exercise of a lapsed grant if the Company
determines that: (i) the lapse was solely the result of the Company’s inability
to timely execute the exercise of an option award prior to its lapse, and (ii)
the Participant made valid and reasonable efforts to exercise the Award. In the
event the Company makes such a determination, the Company shall allow the
exercise to occur as promptly as possible following its receipt of exercise
instructions subsequent to such determination.
5.12 Stock
Appreciation Rights (SARs). In addition to the grant of options, as set forth
above, the Committee may also grant SARs to any person eligible to be a
Participant, which grant shall consist of a right that is the economic
equivalent, and in all other regards is identical to a stock option that is
permitted to be granted under the Plan, except that on the exercise of such SAR,
the Participant shall receive shares of Common Stock having a Fair Market Value
that is equal to the Fair Market Value of the shares of Common Stock that would
be subject to such an option, reduced by the amount that would be required to be
paid by the Participant as the purchase price on exercise of such option. A
grant of a SAR shall be documented by means of an Award Agreement (a “SAR
Agreement”) containing the relevant terms and conditions of such grant. The
Exercise Price for a SAR shall be subject to the same requirements as Options
under Section 5.3, and no SAR may be exercisable after the expiration of ten
(10) years from the date the SAR is granted. For purposes of the limitation on
the number of shares of Common Stock that may be subject to Stock Options
granted to any employee during any one calendar year, and for purposes of the
aggregate limitation on the number of shares of Common Stock that may be subject
to grants under the Plan, SARs shall be treated in the same manner as options
would be treated.
6. RESTRICTED
STOCK.
6.1. Restricted
Stock Awards. The Committee may grant to any Participant an Award of Common
Stock in such number of shares, and on such terms, conditions and restrictions,
whether based on performance standards, periods of service, retention by the
Participant of ownership of purchased or designated shares of Common Stock or
other criteria, as the Committee shall establish. If the Committee determines to
make performance-based Awards of restricted Shares under this Section 6 to
“covered employees” (as defined in Section 162(m) of the Code), performance
targets will be limited to specified levels of one or more of the Performance
Factors specified in the definition set forth in Section 24. The terms of any
Restricted Stock Award granted under this Plan shall be set forth in an Award
Agreement which shall contain provisions determined by the Committee and not
inconsistent with this Plan.
6.2 Issuance
of Restricted Shares. As soon as practicable after the Date of Grant of a
Restricted Stock Award by the Committee, the Company shall cause to be
transferred on the books of the Company, or its agent, Common Stock, registered
on behalf of the Participant, evidencing the restricted Shares covered by the
Award, but subject to forfeiture to the Company as of the Date of Grant if an
Award Agreement with respect to the Restricted Shares covered by the Award is
not duly executed by the Participant and timely returned to the Company. All
Common Stock covered by Awards under this Section 6 shall be subject to the
restrictions, terms and conditions contained in the Plan and the Award Agreement
entered into by the Participant. Until the lapse or release of all restrictions
applicable to an Award of restricted Shares, the share certificates representing
such restricted Shares may be held in custody by the Company, its designee, or,
if the certificates bear a restrictive legend, by the Participant. Upon the
lapse or release of all restrictions with respect to an Award as described in
Section 6.5, one or more share certificates, registered in the name of the
Participant, for an appropriate number of shares as provided in Section 6.5,
free of any restrictions set forth in the Plan and the Award Agreement shall be
delivered to the Participant.
6.3 Shareholder
Rights. Beginning on the Date of Grant of the Restricted Stock Award and subject
to execution of the Award Agreement as provided in Section 6.2, the Participant
shall become a shareholder of the Company with respect to all shares subject to
the Award Agreement and shall have all of the rights of a shareholder,
including, but not limited to, the right to vote such shares and the right to
receive dividends; provided, however, that any Common Stock distributed as a
dividend or otherwise with respect to any restricted Shares as to which the
restrictions have not yet lapsed, shall be subject to the same restrictions as
such restricted Shares and held or restricted as provided in Section
6.2.
6.4 Restriction
on Transferability. None of the restricted Shares may be assigned or transferred
(other than by will or the laws of descent and distribution, or to an inter
vivos trust with respect to which the Participant is treated as the owner under
Sections 671 through 677 of the Code, except to the extent that Section 16 of
the Exchange Act limits a Participant's right to make such transfers), pledged
or sold prior to lapse of the restrictions applicable thereto.
6.5 Delivery
of Shares Upon Vesting. Upon expiration or earlier termination of the forfeiture
period without a forfeiture and the satisfaction of or release from any other
conditions prescribed by the Committee, or at such earlier time as provided
under the provisions of Section 6.7, the restrictions applicable to the
restricted Shares shall lapse. As promptly as administratively feasible
thereafter, the Company shall deliver to the Participant or, in case of the
Participant's death, to the Participant's Beneficiary, one or more share
certificates for the appropriate number of shares of Common Stock, free of all
such restrictions, except for any restrictions that may be imposed by
law.
6.6 Forfeiture
of Restricted Shares. Subject to Sections 6.7, all restricted Shares shall be
forfeited and returned to the Company and all rights of the Participant with
respect to such restricted Shares shall terminate unless the Participant
continues in the service of the Company or a Subsidiary as an employee until the
expiration of the forfeiture period for such restricted Shares and satisfies any
and all other conditions set forth in the Award Agreement. The Committee shall
determine the forfeiture period (which may, but need not, lapse in installments)
and any other terms and conditions applicable with respect to any Restricted
Stock Award.
6.7 Waiver
of Forfeiture Period. Notwithstanding anything contained in this Section 6 to
the contrary, the Committee may, in its sole discretion, waive the forfeiture
period and any other conditions set forth in any Award Agreement under
appropriate circumstances (including the death, Disability or retirement of the
Participant or a material change in circumstances arising after the date of an
Award) and subject to such terms and conditions (including forfeiture of a
proportionate number of the restricted Shares) as the Committee shall deem
appropriate.
6.8 Restricted
Stock Unit Awards. Without limiting the generality of the foregoing provisions
of this Section 6, and subject to such terms, limitations and restrictions as
the Committee may impose, Participants designated by the Committee may receive
Awards of Restricted Stock Units representing the right to receive shares of
Common Stock in the future subject to the achievement of one or more goals
relating to the completion of service by the Participant and/or the achievement
of performance or other objectives. If the Committee determines to make
performance-based Awards of Restricted Stock Units under this Section 6.8 to
“covered employees” (as defined in Section 162(m) of the Code), performance
targets will be limited to specified levels of one or more of the Performance
Factors specified in the definition set forth in Section 24. Restricted Stock
Unit Awards shall be subject to the restrictions, terms and conditions contained
in the Plan and the applicable Award Agreements entered into by the appropriate
Participants. Until the lapse or release of all restrictions applicable to an
Award of Restricted Stock Units, no shares of Common Stock shall be issued in
respect of such Awards and no Participant shall have any rights as a Shareholder
of the Company with respect to the shares of Common Stock covered by such
Restricted Stock Unit Award. Upon the lapse or release of all restrictions with
respect to a Restricted Stock Unit Award or at a later date if distribution has
been deferred, one or more share certificates, registered in the name of the
Participant, for an appropriate number of shares, free of any restrictions set
forth in the Plan and the related Award Agreement shall be delivered to the
Participant. A Participant’s Restricted Stock Unit Award shall not be contingent
on any payment by or consideration from the Participant other than the rendering
of services. Notwithstanding anything contained in this Section 6.8 to the
contrary, the Committee may, in its sole discretion, waive the forfeiture period
and any other conditions set forth in any Award Agreement under appropriate
circumstances (including the death, Disability or retirement of the Participant)
and subject to such terms and conditions (including forfeiture of a
proportionate number of the Restricted Stock Units) as the Committee shall deem
appropriate.
7. PERFORMANCE
AND OTHER STOCK-BASED AWARDS.
7.1 Performance
Awards.
(a) Award
Periods and Calculations of Potential Incentive Amounts. The Committee may grant
Performance Awards to Participants. A Performance Award shall consist of the
right to receive a payment (measured by the Fair Market Value of a specified
number of shares of Common Stock, increases in such Fair Market Value during the
Performance Period and/or a fixed cash amount) contingent upon the extent to
which certain predetermined performance targets have been met during a
Performance Period. The Committee, in its discretion and under such terms as it
deems appropriate, may permit newly eligible Participants, such as those who are
promoted or newly hired, to receive Performance Awards after a Performance
Period has commenced.
(b) Performance
Targets. The performance targets may include such goals related to the
performance of the Company or, where relevant, any one or more of its
Subsidiaries or divisions and/or the performance of a Participant as may be
established by the Committee in its discretion. In the case of Performance
Awards to “covered employees” (as defined in Section 162(m) of the Code), the
targets will be limited to specified levels of one or more of the Performance
Factors specified in the definition set forth in Section 24. The performance
targets established by the Committee may vary for different Performance Periods
and need not be the same for each Participant receiving a Performance Award in a
Performance Period. Except to the extent inconsistent with the performance-based
compensation exception under Section 162(m) of the Code, in the case of
Performance Awards granted to employees to whom such section is applicable, the
Committee, in its discretion, but only under extraordinary circumstances as
determined by the Committee, may change any prior determination of performance
targets for any Performance Period at any time prior to the final determination
of the Award when events or transactions occur to cause the performance targets
to be an inappropriate measure of achievement.
(c) Earning
Performance Awards. The Committee, at or as soon as practicable after the Date
of Grant, shall prescribe a formula to determine the percentage of the
Performance Award to be earned based upon the degree of attainment of the
applicable performance targets.
(d) Payment
of Earned Performance Awards. Payments of earned Performance Awards shall be
made in cash, Common Stock or Stock Units, or a combination of cash, Common
Stock and Stock Units, in the discretion of the Committee. The Committee, in its
sole discretion, may define, and set forth in the applicable Award Agreement,
such terms and conditions with respect to the payment of earned Performance
Awards as it may deem desirable.
(e) Termination
of Service. In the event of a Participant’s Termination during a Performance
Period, the Participant’s Performance Awards shall be forfeited except as may
otherwise be provided in the applicable Award Agreement.
7.2. Grant
of Other Stock-Based Awards. Other stock-based awards, consisting of stock
purchase rights (with or without loans to Participants by the Company containing
such terms as the Committee shall determine), Awards of Common Stock, or Awards
valued in whole or in part by reference to, or otherwise based on, Common Stock,
may be granted either alone or in addition to or in conjunction with other
Awards under the Plan. Subject to the provisions of the Plan, the Committee
shall have sole and complete authority to determine the persons to whom and the
time or times at which such Awards shall be made, the number of shares of Common
Stock to be granted pursuant to such Awards, and all other conditions of the
Awards. Any such Award shall be confirmed by an Award Agreement executed by the
Committee and the Participant, which Award Agreement shall contain such
provisions as the Committee determines to be necessary or appropriate to carry
out the intent of this Plan with respect to such Award.
7.3. Terms
of Other Stock-Based Awards. In addition to the terms and conditions specified
in the Award Agreement, Awards made pursuant to Section 7.2 shall be subject to
the following:
(a) Any
Common Stock subject to Awards made under Section 7.2 may not be sold, assigned,
transferred, pledged or otherwise encumbered prior to the date on which the
shares are issued, or, if later, the date on which any applicable restriction,
performance or deferral period lapses; and
(b) If
specified by the Committee in the Award Agreement, the recipient of an Award
under Section 7.2 shall be entitled to receive, currently or on a deferred
basis, interest or dividends or dividend equivalents with respect to the Common
Stock or other securities covered by the Award; and
(c) The
Award Agreement with respect to any Award shall contain provisions dealing with
the disposition of such Award in the event of the Participant’s Termination
prior to the exercise, realization or payment of such Award, whether such
termination occurs because of retirement, Disability, death or other reason,
with such provisions to take account of the specific nature and purpose of the
Award.
8. PAYMENT
FOR SHARE PURCHASES.
8.1 Payment.
Payment for Shares purchased pursuant to this Plan may be made in cash (by
check) or, where expressly approved for the Participant by the Committee or
where expressly indicated in the Participant’s Award Agreement and where
permitted by law:
(a) by
cancellation of indebtedness of the Company to the Participant;
(b) by
surrender of shares (or by delivering a certification or attestation of
ownership of such shares) that either: (1) have been owned by Participant for
any period required by the Company and have been paid for within the meaning of
SEC Rule 144 (and, if such shares were purchased from the Company by use of a
promissory note, such note has been fully paid with respect to such shares); or
(2) were obtained by Participant in the public market;
(c) by
tender of a promissory note having such terms as may be approved by the
Committee and bearing interest at a rate sufficient to avoid imputation of
income under the Code;
(d) by
waiver of compensation due or accrued to the Participant for services
rendered;
(e) with
respect only to purchases upon exercise of an option, and provided that a public
market for the Company’s stock exists:
(1) through
a “same day sale” commitment from the Participant and a broker-dealer that is a
member of the National Association of Securities Dealers (an “NASD Dealer”)
whereby the Participant irrevocably elects to exercise the option and to sell a
portion of the Shares so purchased to pay for the Exercise Price, and whereby
the NASD Dealer irrevocably commits upon receipt of such Shares to forward the
Exercise Price directly to the Company; or
(2) through
a “margin” commitment from the Participant and a NASD Dealer whereby the
Participant irrevocably elects to exercise the option and to pledge the Shares
so purchased to the NASD Dealer in a margin account as security for a loan from
the NASD Dealer in the amount of the Exercise Price, and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to forward the Exercise Price
directly to the Company; or
(f) by any
combination of the foregoing or other methods authorized by the
Committee.
At its
discretion, the Committee may modify or suspend any method for the exercise of
stock options, including any of the methods specified in the previous sentence.
Delivery of shares for exercising an Option shall be made either through the
physical delivery of shares or through an appropriate certification or
attestation of valid ownership.
8.2 Loan
Guarantees. Except as prohibited by law or regulation, the Committee may
authorize a guarantee by the Company of a third-party loan to the Participant
for the purpose of purchasing Shares awarded under this Plan.
9. WITHHOLDING
TAXES
9.1 Withholding
Generally. Whenever Shares are to be issued in satisfaction of Awards granted
under this Plan, the Company may require the Participant to remit to the Company
an amount sufficient to satisfy federal, state and local withholding tax
requirements prior to the delivery of any certificate or certificates for such
Shares. Whenever, under this Plan, payments in satisfaction of Awards are to be
made in cash, such payment will be net of an amount sufficient to satisfy
federal, state, and local withholding tax requirements.
9.2 Stock
Withholding. When, under applicable law, a Participant incurs tax liability in
connection with the exercise or vesting of any Award that is subject to tax
withholding and the Participant is obligated to pay the Company the amount
required to be withheld, the Committee may in its sole discretion allow the
Participant to satisfy the minimum withholding tax obligation by electing to
have the Company withhold from the Shares to be issued that number of Shares
having a Fair Market Value equal to the minimum amount required to be withheld,
determined on the date that the amount of tax to be withheld is to be
determined. All elections by a Participant to have Shares withheld for this
purpose will be made in accordance with the requirements established by the
Committee and be in writing in a form acceptable to the Committee.
10. PRIVILEGES
OF STOCK OWNERSHIP. No Participant will have any of the rights of a Shareholder
with respect to any Shares until the Shares are issued to the Participant. After
Shares are issued to the Participant, the Participant will be a Shareholder and
have all the rights of a Shareholder with respect to such Shares, including the
right to vote and receive all dividends or, other distributions made or paid
with respect to such Shares; provided, that if such Shares are Restricted Stock,
then any new, additional or different securities the Participant may become
entitled to receive with respect to such Shares by virtue of a stock dividend,
stock split or any other change in the corporate or capital structure of the
Company will be subject to the same restrictions as the Restricted Stock;
provided, further, that the Participant will have no right to retain such stock
dividends or stock distributions with respect to Shares that are repurchased at
the Participant’s Purchase Price or Exercise Price pursuant to Section
12.
11. TRANSFERABILITY.
11.1 Non-Transferability
of Options. No Option granted under the Plan shall be transferable by the
Participant otherwise than by will or by the laws of descent and distribution,
and such option right shall be exercisable, during the Participant’s lifetime,
only by the Participant. Notwithstanding the foregoing, the Committee may set
forth in an Award Agreement at the time of grant or thereafter, that the Options
(other than Incentive Stock Options) may be transferred to members of the
Participant’s immediate family, to trusts solely for the benefit of such
immediate family members and to partnerships or limited liability companies in
which such family members and/or trusts are the only partners or members, as the
case may be. For this purpose, immediate family means the Participant’s spouse,
parents, children, stepchildren, grandchildren and legal dependants. Any
transfer of options made under this provision will not be effective until notice
of such transfer is delivered to the Company.
11.2 Rights
of Transferee. Notwithstanding anything to the contrary herein, if an option has
been transferred in accordance with Section 11.1 above, the option shall be
exercisable solely by the transferee. The option shall remain subject to the
provisions of the Plan, including that it will be exercisable only to the extent
that the Participant or Participant’s estate would have been entitled to
exercise it if the Participant had not transferred the Option. In the event of
the death of the Participant prior to the expiration of the right to exercise
the transferred option, the period during which the option shall be exercisable
will terminate on the date 12 months following the date of the Participant’s
death. In no event will the option be exercisable after the expiration of the
exercise period set forth in the Award Agreement. The Option shall be subject to
such other rules relating to transferees as the Committee shall
determine.
12. RESTRICTIONS
ON SHARES. At the discretion of the Committee, the Company may reserve to itself
and/or its assignee(s) in the Award Agreement a right to repurchase a portion of
or all Unvested Shares held by a Participant following such Participant’s
Termination at any time within three (3) months after the later of Participant’s
Termination Date and the date Participant purchases Shares under this Plan, for
cash and/or cancellation of purchase money indebtedness, at the Participant’s
Exercise Price or Purchase Price, as the case may be.
13. CERTIFICATES.
All certificates for Shares or other securities delivered under this Plan will
be subject to such stock transfer orders, legends and other restrictions,
consistent with the terms of the Awards, as the Committee may deem necessary or
advisable, including restrictions under any applicable federal, state or foreign
securities law, or any rules, regulations and other requirements of the SEC or
any stock exchange or automated quotation system upon which the Shares may be
listed or quoted.
14. ESCROW;
PLEDGE OF SHARES. To enforce any restrictions on a Participant’s Shares, the
Committee may require the Participant to deposit all certificates representing
Shares, together with stock powers or other instruments of transfer approved by
the Committee, appropriately endorsed in blank, with the Company or an agent
designated by the Company to hold in escrow until such restrictions have lapsed
or terminated, and the Committee may cause a legend or legends referencing such
restrictions to be placed on the certificates. Any Participant who is permitted
to execute a promissory note as partial or full consideration for the purchase
of Shares under this Plan will be required to pledge and deposit with the
Company all or part of the Shares so purchased as collateral to secure the
payment of Participant’s obligation to the Company under the promissory note;
provided, however, that the Committee may require or accept other or additional
forms of collateral to secure the payment of such obligation and, in any event,
the Company will have full recourse against the Participant under the promissory
note notwithstanding any pledge of the Participant’s Shares or other collateral.
In connection with any pledge of the Shares, Participant will be required to
execute and deliver a written pledge agreement in such form as the Committee
will from time to time approve. In the discretion of the Committee, the pledge
agreement may provide that the Shares purchased with the promissory note may be
released from the pledge on a pro rata basis as the promissory note is
paid.
15. EXCHANGE
AND BUYOUT OF AWARDS. The Committee may, at any time or from time to time,
authorize the Company, with the consent of the respective Participants, to issue
new Awards in exchange for the surrender and cancellation of any or all
outstanding Awards. The Committee may at any time buy from a Participant an
Award previously granted with payment in cash, Shares (including Restricted
Stock) or other consideration, based on such terms and conditions as the
Committee and the Participant may agree.
16. SECURITIES
LAW AND OTHER STATUTORY AND REGULATORY COMPLIANCE.
16.1 Securities
Law. An Award will not be effective unless such Award is in compliance with all
applicable federal and state securities laws, rules and regulations of any
governmental body, and the requirements of any stock exchange or automated
quotation system upon which the Shares may then be listed or quoted, as they are
in effect on the date of grant of the Award and also on the date of exercise or
other issuance. However, in the event that an Award is not effective as
discussed in the preceding sentence, the Company will use reasonable efforts to
modify, revise or renew such Award in a manner so as to make the Award
effective. Notwithstanding any other provision in this Plan, the Company will
have no obligation to issue or deliver certificates for Shares under this Plan
prior to: (a) obtaining any approvals from governmental agencies that the
Company determines are necessary or advisable; and/or (b) completion of any
registration or other qualification of such Shares under any state or federal
law or ruling of any governmental body that the Company determines to be
necessary or advisable. The Company will be under no obligation to register the
Shares with the SEC or to effect compliance with the registration, qualification
or listing requirements of any state securities laws, stock exchange or
automated quotation system, and the Company will have no liability for any
inability or failure to do so.
16.2 Section
409A. This Plan and all Awards hereunder shall be interpreted in such manner as
to comply with the requirements of Section 409A of the Code, its regulations and
other guidance thereunder.
17. NO
OBLIGATION TO EMPLOY. Nothing in this Plan or any Award granted under this Plan
will confer or be deemed to confer on any Participant any right to continue in
the employ of, or to continue any other relationship with, the Company or any
Subsidiary of the Company or limit in any way the right of the Company or any
Subsidiary of the Company to terminate Participant’s employment or other
relationship at any time, with or without cause.
18. CORPORATE
TRANSACTIONS.
18.1 Assumption
or Replacement of Awards by Successor. If a Change-of-Control Event
occurs:
(a) the
successor company in any Change-of-Control Event may, if approved in writing by
the Committee prior to any Change-of-Control Event:
(1) substitute
equivalent options or Awards or provide substantially similar consideration to
Participants as was provided to Shareholders (after taking into account the
existing provisions of the Awards), or
(2) issue,
in place of outstanding Shares of the Company held by the Participant,
substantially similar shares or substantially similar other securities or
substantially similar other property subject to repurchase restrictions no less
favorable to the Participant.
(b) Notwithstanding
anything in this Plan to the contrary, the Committee may, in its sole
discretion, provide that the vesting of any or all options and Awards granted
pursuant to this Plan will accelerate immediately prior to the consummation of a
Change-of-Control Event. If the Committee exercises such discretion with respect
to Options, such options will become exercisable in full prior to the
consummation of such event at such time and on such conditions as the Committee
determines, and if such Options are not exercised prior to the consummation of
such event, they shall terminate at such time as determined by the
Committee.
18.2 Other
Treatment of Awards. Subject to any rights and limitations set forth in Section
18.1, if a Change-of-Control Event occurs or has occurred, any outstanding
Awards will be treated as provided in the applicable agreement or plan of
merger, consolidation, dissolution, liquidation, or sale of assets constituting
the Change-of-Control Event.
18.3 Assumption
of Awards by the Company. The Company, from time to time, also may substitute or
assume outstanding awards granted by another company, whether in connection with
an acquisition of such other company or otherwise, by either (a) granting an
Award under this Plan in substitution of such other company’s award, or (b)
assuming such award as if it had been granted under this Plan if the terms of
such assumed award could be applied to an Award granted under this Plan. Such
substitution or assumption will be permissible if the holder of the substituted
or assumed award would have been eligible to be granted an Award under this Plan
if the other company had applied the rules of this Plan to such grant. If the
Company assumes an award granted by another company, the terms and conditions of
such award will remain unchanged (except that the exercise price and the number
and nature of Shares issuable upon exercise of any such option will be adjusted
appropriately pursuant to Section 424(a) of the Code). If the Company elects to
grant a new Option rather than assuming an existing option, such new Option may
be granted with a similarly adjusted Exercise Price.
18.4 Adjustment
of Shares. In the event that the number of outstanding shares is changed by a
stock dividend, recapitalization, stock split, reverse stock split, subdivision,
combination, reclassification or similar change in the capital structure of the
Company without consideration, then (a) the number of Shares reserved for
issuance under this Plan, (b) the Exercise Prices of and number of Shares
subject to outstanding Options, and (c) the number of Shares subject to other
outstanding Awards will be proportionately adjusted, subject to any required
action by the Board or the Shareholders of the Company and compliance with
applicable securities laws; provided, however, that fractions of a Share will
not be issued but will either be replaced by a cash payment equal to the Fair
Market Value of such fraction of a Share or will be rounded up to the nearest
whole Share, as determined by the Committee.
19. ADOPTION
AND SHAREHOLDER APPROVAL. This Plan will become effective on the date that this
Plan is approved by the Shareholders of the Company, consistent with applicable
laws (the “Effective Date”).
20. TERM
OF PLAN. Unless earlier terminated as provided herein, this Plan will terminate
ten (10) years from the date this Plan is adopted by the Board and approved by
the Shareholders of the Company. The expiration of the Plan, however, shall not
affect the rights of Participants under Options theretofore granted to them, and
all unexpired options and Awards shall continue in force and operation after
termination of the Plan, except as they may lapse or be terminated by their own
terms and conditions.
21. AMENDMENT
OR TERMINATION OF PLAN. The Board may at any time terminate or amend this Plan
in any respect, including without limitation, amendment of any form of Award
Agreement or instrument to be executed pursuant to this Plan; provided, however,
that the Board will not, (i) without the approval of the Shareholders of the
Company, amend this Plan in any manner that applicable law or regulation
requires such Shareholder approval, or (ii) without the written consent of the
Participant substantially alter or impair any Option or Award previously granted
under the Plan. Notwithstanding the foregoing, if an option has been transferred
in accordance with the terms of this Plan, written consent of the transferee
(and not the Participant) shall be necessary to substantially alter or impair
any option or Award previously granted under the Plan.
22. EFFECT
OF SECTION 162(m) OF THE CODE. The Plan, and all Awards designated by the
Committee as “performance-based compensation” for purposes of Section 162(m) of
the Code are intended to be exempt from the application of Section 162(m) of the
Code, which restricts under certain circumstances the Federal income tax
deduction for compensation paid by a public company to certain executives in
excess of $1 million per year. The Committee may, without Shareholder approval
(unless otherwise required to comply with Rule 16b-3 under the Exchange Act or
in accordance with applicable market or exchange requirements), amend the Plan
retroactively and/or prospectively to the extent it determines necessary in
order to comply with any subsequent clarification of Section 162(m) of the Code
required to preserve the Company’s Federal income tax deduction for compensation
paid pursuant to the Plan. To the extent that the Committee determines as of the
Date of Grant of an Award that (i) the Award is intended to comply with Section
162(m) of the Code and (ii) the exemption described above is no longer available
with respect to such Award, such Award shall not be effective until any
Shareholder approval required under Section 162(m) of the Code has been
obtained. Notwithstanding the foregoing, if the Committee deems it to be in the
best interest of the Company, the Committee retains the discretion to make such
Awards under the Plan that may not comply with the requirements of Section
162(m) of the Code.
23. GENERAL.
23.1 Additional
Provisions of an Award. Awards under the Plan also may be subject to such other
provisions (whether or not applicable to the benefit awarded to any other
Participant) as the Committee determines appropriate including, without
limitation, provisions to assist the Participant in financing the purchase of
Stock upon the exercise of Options, provisions for the forfeiture of or
restrictions on resale or other disposition of shares of Stock acquired under
any Award, provisions giving the Company the right to repurchase shares of Stock
acquired under any Award in the event the Participant elects to dispose of such
shares, provisions which restrict a Participant’s ability to sell Shares for a
period of time under certain circumstances, and provisions to comply with
Federal and state securities laws and Federal and state tax withholding
requirements. Any such provisions shall be reflected in the applicable Award
Agreement. In addition, the Committee may, in its discretion, provide in an
Award Agreement that, in the event that the Participant engages, within a
specified period after termination of employment, in certain activity specified
by the Committee that is deemed detrimental to the interests of the Company
(including, but not limited to, the breach of any non-solicitation and/or
non-compete agreements with the Company), the Participant will forfeit all
rights under any Options that remain outstanding as of the time of such act and
will return to the Company an amount of shares with a Fair Market Value
(determined as of the date such shares are returned) equal to the amount of any
gain realized upon the exercise of any Option that occurred within a specified
time period.
23.2 Claim
to Awards and Employment Rights. Unless otherwise expressly agreed in writing by
the Company, no employee or other person shall have any claim or right to be
granted an Award under the Plan or, having been selected for the grant of an
Award, to be selected for a grant of any other Award.
23.3 Designation
and Change of Beneficiary. Each Participant shall file with the Committee a
written designation of one or more persons as the beneficiary who shall be
entitled to receive the amounts payable with respect to an Award of Restricted
Stock, if any, due under the Plan upon his death. A Participant may, from time
to time, revoke or change his beneficiary designation without the consent of any
prior beneficiary by filing a new designation with the Committee. The last such
designation accepted by the Committee shall be controlling; provided, however,
that no designation, or change or revocation thereof, shall be effective unless
accepted by the Committee prior to the Participant’s death, and in no event
shall it be effective as of a date prior to such receipt. If no beneficiary
designation is filed by the Participant, the beneficiary shall be deemed to be
the Participant's spouse or, if the Participant is unmarried at the time of
death, the Participant's estate.
23.4 Payments
to Persons Other Than Participants. If the Committee shall find that any person
to whom any amount is payable under the Plan is unable to care for his or her
affairs because of illness or accident, or is a minor, or is otherwise legally
incompetent or incapacitated or has died, then any payment due to such person or
such person’s estate (unless a prior claim therefor has been made by a duly
appointed legal representative) may, if the Committee so directs the Company, be
paid to such person’s spouse, child, relative, an institution maintaining or
having custody of such person, or any other person deemed by the Committee, in
its absolute discretion, to be a proper recipient on behalf of such person
otherwise entitled to payment. Any such payment shall be a complete discharge of
the liability of the Committee and the Company therefor.
23.5 No
Liability of Committee Members. No member of the Committee shall be personally
liable by reason of any contract or other instrument executed by such Committee
member or on such member's behalf in such member's capacity as a member of the
Committee nor for any mistake of judgment made in good faith, and the Company
shall indemnify and hold harmless each member of the Committee and each other
employee, officer or director of the Company to whom any duty or power relating
to the administration or interpretation of the Plan may be allocated or
delegated, against any cost or expense (including counsel fees) or liability
(including any sum paid in settlement of a claim) arising out of any act or
omission to act in connection with the Plan unless arising out of such person’s
own fraud or willful bad faith; provided, however, that approval of the Board
shall be required for the payment of any amount in settlement of a claim against
any such person. The foregoing right of indemnification shall not be exclusive
of any other rights of indemnification to which such persons may be entitled
under the Company’s Articles of Incorporation or By-Laws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold them
harmless.
23.6 Governing
Law. The Plan and all agreements hereunder shall be governed by and construed in
accordance with the internal laws of the State of Utah without regard to the
principles of conflicts of law thereof.
23.7 Funding.
No provision of the Plan shall require the Company, for the purpose of
satisfying any obligations under the Plan, to purchase assets or place any
assets in a trust or other entity to which contributions are made or otherwise
to segregate any assets, nor shall the Company maintain separate bank accounts,
books, records or other evidence of the existence of a segregated or separately
maintained or administered fund for such purposes. Participants shall have no
rights under the Plan other than as general unsecured creditors of the Company,
except that insofar as they may have become entitled to payment of additional
compensation by performance of services, they shall have the same rights as
other employees under general law.
23.8 Reliance
on Reports. Each member of the Committee and each member of the Board shall be
fully justified in relying, acting or failing or refusing to act, and shall not
be liable for having so relied, acted or failed or refused to act in good faith,
upon any report made by the independent public accountant of the Company and its
subsidiaries and Affiliates and upon any other information furnished in
connection with the Plan by any person or persons other than
himself.
23.9 Relationship
to Other Benefits. No payment under the Plan shall be taken into account in
determining any benefits under any pension, retirement, profit sharing, group
insurance or other benefit plan of the Company or any Subsidiary except as
otherwise specifically provided in such other plan.
23.10 Expenses.
The expenses of administering the Plan shall be borne by the Company and its
Subsidiaries and Affiliates.
23.11 Pronouns.
Masculine pronouns and other words of masculine gender shall refer to both men
and women.
23.12 Titles
and Headings. The titles and headings of the sections in the Plan are for
convenience of reference only, and in the event of any conflict, the text of the
Plan, rather than such titles or headings shall control.
23.13 Termination
of Employment. For all purposes herein, a person who transfers from employment
or service with the Company to employment or service with a Subsidiary or
Affiliate or vice versa shall not be deemed to have terminated employment or
service with the Company, a Subsidiary or Affiliate.
23.14 Nonexclusivity
of the Plan. Neither the adoption of this Plan by the Board, the submission of
this Plan to the Shareholders of the Company for approval, nor any provision of
this Plan will be construed as creating any limitations on the power of the
Board to adopt such incentive arrangements as it may deem desirable, including,
without limitation, the granting of stock options and bonuses otherwise than
under this Plan, and such arrangements may be either generally applicable or
applicable only in specific cases.
23.15 Employees
Based Outside of the United States. Notwithstanding any provision of the Plan to
the contrary, in order to foster and promote achievement of the purposes of the
Plan or to comply with provisions of laws in other countries in which the
Company, its Affiliates, and its Subsidiaries operate or have employees, the
Committee, in its sole discretion, shall have the power and authority to (i)
determine which employees employed outside the United States are eligible to
participate in the Plan, (ii) modify the terms and conditions of Awards granted
to employees who are employed outside the United States, and (iii) establish
subplans (through the addition of schedules to the Plan or otherwise), modify
option exercise procedures and other terms and procedures to the extent such
actions may be necessary or advisable.
24. DEFINITIONS.
As used in this Plan, the following terms will have the following
meanings:
“Adjusted
Business Unit EBITDA” means, for any period, for the selected business unit, an
amount equal to the sum of (without duplication) (a) Net Income, (b) Net
Interest Charges, (c) the amount of taxes, based on or measured by income, used
or included in tax expense deducted in determining such Net Income, (d) the
amount of depreciation and amortization expense deducted in determining such Net
Income, (e) the amount of integration expenses (as identified on the business
unit's profit and loss statements) incurred during such period, (f) other
non-recurring expenses incurred during such period, (g) any related party
charges, (h) any items included in “net other expenses” as listed on the
business unit's income statement, (i) all participating executives' bonuses that
are paid out under the Plan and any performance awards paid under the Bio-Path
Holdings, Inc.
2007
Stock
Incentive
Plan, and (j) any adjustments
that appear on the business unit's computation of pro forma earnings as publicly
announced by the Company; and, except with regard to item (j) above, all
determined in accordance with GAAP. Adjusted Business Unit EBITDA will also be
calculated without reference to any discontinued operations.
“Adjusted
EBITDA” means, for any period, for the Company and its subsidiaries, an amount
equal to the sum of (without duplication) (a) Consolidated Net Income, (b)
Consolidated Net Interest Charges, (c) the amount of taxes, based on or measured
by income, used or included in tax expense deducted in determining such
Consolidated Net Income, (d) the amount of depreciation and amortization expense
deducted in determining such Consolidated Net Income, (e) the amount of
integration expenses (as identified on Company's profit and loss statements)
incurred during such period, (f) other non-recurring expenses incurred during
such period, (g) any items (other than gains or losses on put options on Company
stock) included in “net other expenses” as listed on the Company's consolidated
income statement, (h) any related party charges, (i) all participating
executives' bonuses that are paid out under the Bio-Path Holdings, Inc. 2007
Annual Incentive Plan and any performance awards paid under the Bio-Path
Holdings, Inc.
2007
Stock
Incentive
Plan, and (j) any adjustments
that appear on the Company's computation of pro forma earnings as publicly
announced by the Company; all determined on a consolidated basis and except with
regard to item (j) above, in accordance with GAAP. Adjusted EBITDA will also be
calculated without reference to any discontinued operations.
“Affiliate”
means any entity in which the Company has an ownership interest of at least
20%.
“Award”
means any award under this Plan, including any Option, Restricted Stock,
Performance Award or other stock-based Award.
“Award
Agreement” means, with respect to each Award, the signed written agreement
between the Company and the Participant setting forth the terms and conditions
of the Award.
“Board”
means the Board of Directors of the Company.
“Cause”
means the Company, a Subsidiary or Affiliate having cause to terminate a
Participant’s employment or service under any existing employment, consulting or
any other agreement between the Participant and the Company or a Subsidiary or
Affiliate or, in the absence of such an employment, consulting or other
agreement, upon (i) the determination by the Committee that the Participant has
ceased to perform his duties to the Company, a Subsidiary or Affiliate (other
than as a result of his incapacity due to physical or mental illness or injury),
which failure amounts to an intentional and extended neglect of his duties to
such party, (ii) the Committee’s determination that the Participant has engaged
or is about to engage in conduct materially injurious to the company, a
Subsidiary or Affiliate or (iii) the Participant having been convicted of a
felony or a misdemeanor carrying a jail sentence of six months or
more.
“Change-of-Control
Event” means the occurrence of any one or more of the following events: (i)
there shall have been a change in a majority of the Board of Directors of the
Company within a one (1) year period, unless the appointment of a director or
the nomination for election by the Company’s Shareholders of each new director
was approved by the vote of a majority of the directors then still in office who
were in office at the beginning of such one (1) year period, or (ii) the Company
shall have been sold by either (A) a sale of all or substantially all its
assets, or (B) a merger or consolidation, other than any merger or consolidation
pursuant to which the Company acquires another entity, or (C) a tender offer,
whether solicited or unsolicited.
“Code”
means the Internal Revenue Code of 1986, as amended. Reference in the Plan to
any section of the Code shall be deemed to include any amendments or successor
provisions to such section and any regulations under such section.
“Common
Stock” means the outstanding common stock, of the Company, or any other class of
securities into which substantially all the Common Stock is converted or for
which substantially all the Common Stock is exchanged.
“Committee”
means the Compensation Committee, the Stock Option Committee or such other
committee appointed by the Board consisting solely of two or more Outside
Directors or the Board.
“Company”
means Bio-Path Holdings, Inc., a Utah corporation, or any successor
corporation.
“Consolidated
Net Income” means, for any period, for the Company and its subsidiaries, the net
income of the Company and its subsidiaries from continuing operations without
giving effect to extraordinary net gains or extraordinary net losses, all
determined on a consolidated basis in accordance with GAAP, and consistent with
past practices.
“Consolidated
Net Interest Charges” means, for any period, for the Company and its
subsidiaries, the sum of, without duplication, (a) all interest, premium
payments, commissions, fees, charges and related expenses (and interest income)
of the Company and its subsidiaries in connection with indebtedness (including
capitalized interest) or bank accounts, money market accounts and investment
accounts, or financing leases and notes receivable, or in connection with the
deferred purchase price of assets, in each case to the extent treated as
interest in accordance with GAAP, and (b) the portion of rent expense of the
Company and its subsidiaries with respect to such period under capital leases
that is treated as interest in accordance with GAAP.
“Disability”
or “Disabled” means a disability, whether temporary or permanent, partial or
total, as determined in good faith by the Committee. Where relevant, the
Committee shall apply a definition that complies with one set forth in Section
409A of the Code.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended.
“Exercise
Price” means the price at which a holder of an Option may purchase the Shares
issuable upon exercise of the Option.
“Fair
Market Value” means, as of any date, the value of a share of the Company’s
Common Stock determined as follows:
(a) if
such Common Stock is publicly traded and is then listed on a national securities
exchange or quoted on a national automated quotation system, its closing price
on the date of determination on the principal national securities exchange on
which the Common Stock is listed or admitted to trading, and if there were no
trades on such date, on the day on which a trade occurred next preceding such
date;
(b) if
such Common Stock is publicly traded and is then quoted on the NASDAQ Global
Market, its closing price on the NASDAQ Global Market on the date of
determination as reported in The Wall Street Journal, and if there were no
trades on such date, on the day on which a trade occurred next preceding such
date;
(c) if
such Common Stock is publicly traded but is not quoted on the NASDAQ National
market nor listed or admitted to trading on a national securities exchange, the
average of the closing bid and asked prices on the date of determination as
reported in The Wall Street Journal or, if not reported in The Wall Street
Journal, as reported by any reputable publisher or quotation service, as
determined by the Committee in good faith, and if there were no trades on such
date, on the day on which a trade occurred next preceding such
date;
(d) if
none of the foregoing is applicable, by the Committee in good faith based upon
factors available at the time of the determination, including, but not limited
to, capital raising activities of the Company.
“GAAP”
means generally accepted accounting principles in the United
States.
“Insider”
means an officer or director of the Company or any other person whose
transactions in the Company’s Common Stock are subject to Section 16 of the
Exchange Act.
“NASD
Dealer” has the meaning set forth in section 8(e).
“Net
Income” means, for any period, for the selected business unit, the net income of
the business unit from continuing operations without giving effect to
extraordinary net gains or extraordinary net losses, all determined in
accordance with GAAP, and consistent with past practices.
“Net
Interest Charges” means, for any period, for the selected business unit, the sum
of, without duplication, (a) all interest, premium payments, commissions, fees,
charges and related expenses (and interest income) of the business unit in
connection with indebtedness (including capitalized interest) or bank accounts,
money market accounts and investment accounts, or financing leases and notes
receivable, or in connection with the deferred purchase price of assets, in each
case to the extent treated as interest in accordance with GAAP, and (b) the
portion of rent expense of the business with respect to such period under
capital leases that is treated as interest in accordance with
GAAP.
“NQSOs”
has the meaning set forth in Section 5.
“Option”
means an award of an option to purchase Shares pursuant to Section
5.
“Outside
Director” means a person who is both (i) a “nonemployee director” within the
meaning of Rule 16b-3 under the Exchange Act, or any successor rule or
regulation and (ii) an “outside director” within the meaning of Section 162(m)
of the Code.
“Participant”
means a person who receives an Award under this Plan.
“Performance
Award” means an Award of Shares, or cash in lieu of Shares, pursuant to Section
7.
“Performance
Factors” means the factors selected by the Committee from time to time,
including, but not limited to, the following measures to determine whether the
performance goals established by the Committee and applicable to Awards have
been satisfied: revenue; net revenue; revenue growth; net revenue growth;
earnings before interest, taxes, depreciation and amortization (“EBITDA”);
Adjusted EBITDA; Adjusted Business Unit EBITDA, EBITDA growth, Adjusted EBITDA
growth and Adjusted Business Unit EBITDA growth; funds from operations; funds
from operations per share; operating income (loss); operating income growth;
operating cash flow; adjusted operating cash flow return on income; net income;
net income growth; pre- or after-tax income (loss); cash available for
distribution; cash available for distribution per share; cash and/or cash
equivalents available for operations; net earnings (loss); earnings (loss) per
share; earnings per share growth; return on equity; return on assets; share
price performance (based on historical performance or in relation to selected
organizations or indices); total shareholder return; total shareholder return
growth; economic value added; improvement in cash-flow (before or after tax);
successful capital raises; successful completion of acquisitions; and
confidential business unit objectives. A Performance Factor may be measured over
a Performance Period on a periodic, annual, cumulative or average basis and may
be established on a company-wide basis or established with respect to one or
more operating units, divisions, subsidiaries, acquired businesses, minority
investments, partnerships or joint ventures. Unless otherwise determined by the
Company by no later than the earlier of the date that is ninety (90) days after
the commencement of the Performance Period or the day prior to the date on which
twenty-five percent (25%) of the Performance Period has elapsed, the Performance
Factors will be determined by not accounting for a change in GAAP during a
Performance Period
“Performance
Period” means the period of service determined by the Committee, not to exceed
five years, during which years of service or performance is to be measured for
Restricted Stock Awards or Performance Awards.
“Restricted
Stock Award” means an award of Shares pursuant to Section 6.
“SEC”
means the Securities and Exchange Commission.
“Securities
Act” means the Securities Act of 1933, as amended.
“Shares”
means shares of the Company’s Common Stock reserved for issuance under this
Plan, as adjusted pursuant to Section 18, and any successor
security.
“Stock
Unit” means an Award giving the right to receive Shares granted under either
Section 6.8 or Section 7 of the Plan.
“Subsidiary”
means any corporation or other legal entity (other than the Company) in an
unbroken chain of corporations and/or other legal entities beginning with the
Company if each of the corporations and entities other than the last corporation
or entity in the unbroken chain owns stock, other equity securities or other
equity interests possessing 50% or more of the total combined voting power of
all classes of stock, other equity securities or other equity interests in one
of the other corporations or entities in such chain.
“Ten
Percent Shareholder” has the meaning set forth in Section 5.2.
“Termination”
or “Terminated” means, for purposes of this Plan with respect to a Participant,
that the Participant has for any reason ceased to provide services as an
employee, officer, director, consultant, independent contractor, or advisor to
the Company or Subsidiary of the Company. An employee will not be deemed to have
ceased to provide services in the case of (i) sick leave, (ii) military leave,
or (iii) any other leave of absence approved by the Committee, provided, that
such leave is for a period of not more than 90 days, unless re-employment upon
the expiration of such leave is guaranteed by contract or statute or unless
provided otherwise pursuant to formal policy adopted from time to time by the
Company and issued and promulgated to employees in writing. In the case of any
employee on an approved leave of absence, the Committee may make such provisions
respecting suspension of vesting of the Award while on leave from the employ of
the Company or a Subsidiary as it may deem appropriate, except that in no event
may an Option be exercised after the expiration of the term set forth in the
option agreement. The Committee will have sole discretion to determine whether a
Participant has ceased to provide services and the effective date on which the
Participant ceased to provide services (the “Termination
Date”).
“Unvested
Shares” means “Unvested Shares” as defined in the Award Agreement.
“Vested
Shares” means “Vested Shares” as defined in the Award Agreement.