<PAGE>
EXHIBIT 10.1
INNOVATIVE CLINICAL SOLUTIONS, LTD.
2000 STOCK OPTION PLAN
1. PURPOSE
Innovative Clinical Solutions, Ltd. (the "Company") desires to attract and
retain the best available talent and encourage the highest level of performance
by employees and other persons who perform services for the Company in order to
serve the best interests of the Company and its stockholders. By affording
eligible persons the opportunity to acquire proprietary interests in the Company
and by providing them incentives to put forth maximum efforts for the success of
the Company's business, the Innovative Clinical Solutions, Ltd. 2000 Stock
Option Plan (the "Plan") is expected to contribute to the attainment of those
objectives.
2. OPTIONS AND SHARES OF COMMON STOCK SUBJECT TO THE PLAN
Option grants under the Plan may be granted in the form of (i) incentive
stock options ("incentive stock options") as provided in Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), to purchase shares of
the common stock, par value $0.01 per share, of the Company (the "Common
Stock"); (ii) options to purchase shares of Common Stock which are not intended
to qualify as incentive stock options ("non-qualified options") (unless
otherwise indicated, references in the Plan to "options" include incentive stock
options and non-qualified options) or (iii) any combination of the foregoing as
the Committee (as defined in paragraph 3(a)) shall determine. The maximum
aggregate number of shares of Common Stock as to which options may be granted
from time to time under the Plan is 2,285,714 shares,(1) of which 142,855
shares(2) will be available for grants to nonemployee directors and the balance
shall be available for grants to other eligible participants, in each case
subject to adjustment as provided in paragraph 11. The shares available may be
in whole or in part, as the Board of Directors of the Company (the "Board of
Directors") shall from time to time determine, authorized but unissued shares or
issued shares reacquired by the Company. Unless otherwise provided by the
Committee, shares covered by expired or terminated options will be available for
subsequent option grants under the Plan. Any shares issued by the Company in
respect of the assumption or substitution of outstanding options from a
corporation or other business entity by the Company shall not reduce the number
of shares available for option grants under the Plan.
3. ADMINISTRATION
(a) The Plan shall be administered by a committee (the "Committee")
consisting of not less than two members of the Board of Directors who are
selected by the Board of Directors. The term "Committee" shall refer to the
Board of Directors if at any time no committee of the Board of Directors is
constituted to administer the Plan.
(b) The Committee shall have plenary authority in its discretion,
subject to and not inconsistent with the express provisions of the Plan (i) to
grant options, (ii) to determine the purchase price of the shares of Common
Stock covered by each option, (iii) the term of each option, (iv) the persons to
whom, and the time or times at which options shall be granted, (v) the number of
shares to be covered by each option, (vi) to designate options as incentive
stock options or non-qualified options, (vii) to interpret the Plan, (viii) to
prescribe, amend and rescind rules and regulations relating to the Plan,
(ix) to determine the terms and provisions of the option agreements as described
in paragraph 14 (which need not be identical), and (x) to make all other
determinations deemed necessary or advisable for the administration of the Plan.
Except to the extent prohibited by any applicable law, rule or regulation,
including, without limitation, the requirements applicable under Section 162(m)
of the Code to any option granted under the plan intended
------------------------
(1) Sixteen percent of outstanding Common Stock on a fully diluted basis on
the Effective Date of the Plan.
(2) One percent of the outstanding Common Stock on a fully diluted basis on
the Effective Date of the Plan.
ICSL STOCK OPTION PLAN
<PAGE>
to be "qualified performance-based compensation," or the requirements for any
award granted under the Plan to an officer or director to be covered by any
exemptive rule under Section 16 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") (including Rule 16b-3, or any successor rule, as
the same may be amended from time to time), the Committee may delegate to one or
more of its members or to one or more agents such administrative duties as it
may deem advisable, and the Committee or any person to whom it has delegated
duties as aforesaid may employ one or more persons to render advice with respect
to any responsibility the Committee or such person may have under the Plan.
(c) The Committee may employ attorneys, consultants, accountants or
other persons and the Committee, the Company and its officers and directors
shall be entitled to rely upon the advice, opinions or valuations of any such
persons. The Committee shall have full discretionary authority in all matters
related to the discharge of its responsibilities and the exercise of its
authority under the Plan. All actions taken and all interpretations and
determinations made by the Committee in good faith shall be final and binding
upon all persons who have received option grants, the Company and all other
interested persons. No member or agent of the Committee shall be personally
liable for any action, determination or interpretation taken or made in good
faith with respect to the Plan or option grants made thereunder, and all members
and agents of the Committee and the Board of Directors shall be fully
indemnified and protected by the Company in respect of any such action,
determination or interpretation.
4. ELIGIBILITY; FACTORS TO BE CONSIDERED IN GRANTING OPTIONS
(a) Subject to the limitations on the granting of options otherwise set
forth in the Plan, option grants will be limited to employees and directors
(whether or not also employees) of the Company or a Subsidiary (as defined in
the last sentence of this paragraph 4(a)) and to individuals who are not
employees but who provide services to the Company or a Subsidiary, but only to
the extent any such non-employees (i) are natural persons; (ii) provide BONA
FIDE services to the Company or a Subsidiary; and (iii) provide services that
are not in connection with the offer or sale of the Company's or a Subsidiary's
securities in a capital-raising transaction, and do not directly or indirectly
promote or maintain a market for the Company's or a Subsidiary's securities
(such service providers who are neither employees nor directors are referred to
in the Plan as "consultants"). In determining the eligible individuals to whom
options shall be granted and the number of shares to be covered by each option,
the Committee shall take into account the nature of the individuals' duties,
their present and potential contributions to the success of the Company and such
other factors as it shall deem relevant in connection with accomplishing the
purposes of the Plan. An eligible individual who has been selected by the
Committee to participate in the Plan and who holds an outstanding option under
the Plan is referred to in the Plan as an "optionee." As used in the Plan,
"Subsidiary" shall mean any present or future corporation which is or would be a
"subsidiary corporation" of the Company as such term is defined in
Section 424(f) of the Code.
(b) Option grants may be granted singly, in combination or in tandem
and may be made in combination or in tandem with, in replacement of, or as
alternatives to, awards or grants under any other employee plan maintained by
the Company and/or any Subsidiary. No incentive stock option shall be granted to
any individual otherwise eligible to participate in the Plan who is not an
employee of the Company or a Subsidiary on the date of granting of such option.
An optionee who has been granted an option or options under the Plan may be
granted additional options, subject to such limitations as may be imposed by the
Code on the grant of incentive stock options. No grant of incentive stock
options (under the Plan and any other "incentive stock option" plans of the
Company, any Subsidiary and any "parent corporation" of the Company within the
meaning of Section 424(e) of the Code) shall result in the aggregate fair market
value of Common Stock with respect to which "incentive stock options" (within
the meaning of Section 422 of the Code, but without regard to subsection (d) of
such Section) are exercisable for the first time by any employee during any
calendar year (determined at the time the incentive stock option is granted)
exceeding $100,000.
ICSL STOCK OPTION PLAN 2
<PAGE>
(c) Notwithstanding any other provision contained in the Plan to the
contrary, the maximum number of shares of Common Stock which may be subject to
options granted under the Plan to any single optionee during any calendar year
shall not exceed 457,143 shares of Common Stock.
(d) As of the effective date of the Plan, nonqualified options,
evidenced by Agreements substantially in the form of APPENDIX A hereto, shall be
granted to the employees of the Company, as listed on SCHEDULE I hereto, to
purchase the number of shares of Common Stock that are allocated on SCHEDULE I
to such employees, at the option exercise price as specified in paragraph 5(c),
subject to proportionate adjustment as otherwise provided in paragraph 12 and
the other terms and conditions of the Plan and such Agreements.
(e) As of the effective date of the Plan, nonqualified options
evidenced by Agreements substantially in the form of APPENDIX B hereto shall be
granted to the directors of the Company as listed on SCHEDULE I hereto, to
purchase the number of shares of Common Stock that are allocated on SCHEDULE I
to such directors, at the option exercise price as specified in paragraph 5(c),
subject to proportionate adjustment as otherwise provided in paragraph 12 and
the other terms and conditions of the Plan and such Agreements.
(f) The adoption of the Plan shall not be deemed to give any employee
of the Company or any Subsidiary or any other person any right to be selected to
participate in the Plan or to be granted an option under the Plan. No person
shall have any rights or claims under the Plan except in accordance with the
provisions of the Plan and the applicable option agreement.
5. PURCHASE PRICE
(a) The purchase price of a share of the Common Stock covered by each
option shall be determined by the Committee, but, subject to paragraphs 5(b) and
5(c), shall, in the case of any incentive stock option, not be less than 100% of
the fair market value (as hereinafter defined, the "Market Value") of a share of
the Common Stock on the date such incentive stock option is granted, and such
purchase price of any option granted under the Plan shall not be reduced, by
action of the Committee or the Board of Directors or otherwise, at any time
after the date such option is granted (subject to Section 11(a)). For purposes
of the Plan, the Market Value of a share of Common Stock shall be the closing
price for a share of Common Stock on the date of the determination, or if such
date is not a trading day, then on the most recently preceding trading day;
PROVIDED, HOWEVER, that for purposes of any incentive stock options granted
under the Plan, such Market Value shall be determined subject to
Section 422(c)(7) of the Code. The closing price for a share of Common Stock
shall be: (i) if the Common Stock shall be listed or admitted to trading on any
national securities exchange, the average of the last reported sales prices on
the specified days (or if there is no reported sale on any such trading date,
the average of the closing bid and asked prices on such trading date); (ii) if
the Common Stock is not traded or admitted to trading on any national securities
exchange, the closing price, if reported, or if the closing price is not
reported, the average of the closing bid and asked prices, as reported by The
Nasdaq Stock Market-Registered Trademark- or similar source or, if no such
source exists, as furnished by two members of the National Association of
Securities Dealers, Inc., selected by the Committee for that purpose, on the
specified dates; or (iii) if the Common Stock is not traded or admitted to
trading on any national securities exchange or The Nasdaq Stock
Market-Registered Trademark-, the closing price on such dates as determined in
good faith by the Committee or the Board of Directors. The Committee shall
determine the date on which an option under the Plan is granted, PROVIDED that
such date is consistent with the Code and any applicable rules or regulations
thereunder. In the absence of such determination, the date on which the
Committee adopts a resolution granting an option shall be considered the date on
which such option is granted, PROVIDED the optionee to whom the option is
granted is promptly notified of the grant and an option agreement is duly
executed as of the date of the resolution. The purchase price shall be subject
to adjustment as provided in paragraph 11(a).
ICSL STOCK OPTION PLAN 3
<PAGE>
(b) No incentive stock option shall be granted to an employee under the
Plan who owns (within the meaning of Section 424(d) of the Code), at the time
the option is granted, more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or a Subsidiary or any "parent
corporation" of the Company within the meaning of Section 424(e) of the Code.
This restriction does not apply if at the time such incentive stock option is
granted the option exercise price per share of Common Stock subject to the
option is at least 110% of the Market Value of a share of Common Stock on the
date such incentive stock option is granted, and the incentive stock option by
its terms is not exercisable after the expiration of five years from such date
of grant.
(c) Notwithstanding the provisions of paragraph 5(a) to the contrary,
for purposes of determining the purchase price of shares of Common Stock covered
by options granted as of the effective date of the Plan, the Market Value of a
share of Common Stock shall be equal to the lesser of (i) the average of the
closing prices on the thirtieth (30(th)) through the sixtieth (60(th)) day
(inclusive) immediately following the Effective Date as determined in accordance
with paragraph 5(a) or (ii) $9.25926 multiplied by the average of the average of
the closing bid and asked prices of the Company's 6 3/4% Convertible
Subordinated Debentures due 2003 (the "Debentures") as reported by Interactive
Data Corporation for the five trading days immediately prior to filing of the
Prepackaged Plan referred to in paragraph 12 hereof with the U.S. Bankruptcy
Court, expressed as a percentage of the principal amount of the Debentures.
6. TERMS OF OPTION GRANTS
The term of each option granted under the Plan shall be determined by the
Committee and set forth in the option agreement evidencing such option,
PROVIDED, HOWEVER, that, subject to paragraph 5(b) and earlier termination as
provided in paragraphs 9 and 10, no option shall be exercisable after ten
(10) years from the date such option was granted.
7. EXERCISE; LOANS
(a) Subject to the provisions of the Plan, an option granted under the
Plan shall become vested and exercisable as determined by the Committee and set
forth in the option agreement evidencing such option. The Committee may, in its
discretion, determine as a condition of any option, that all or a stated
percentage of the option shall only become exercisable, in installments or
otherwise, after completion of a specified period of service with the Company
and the Subsidiaries or subject to any other condition or conditions.
(b) The Committee may also, in its discretion, accelerate the
exercisability of any options at any time and provide, in any option agreement,
that the option shall become immediately exercisable as to all or any portion of
the shares of Common Stock remaining subject to the option on or following a
Change of Control (as defined in this paragraph). The date upon which a Change
of Control occurs shall be referred to herein as an "acceleration date"). A
"Change of Control" shall be deemed to have occurred as of the first day any one
or more of the following conditions shall have been satisfied:
(i) Any individual, corporation (other than the Company or any
Subsidiary), partnership, trust, association, pool, syndicate, or
any other entity or any group of persons acting in concert (other
than (x) any employee benefit plan (or any trust forming a part
thereof) of the Company or any Subsidiary or (y) any person or group
of persons who shall directly or indirectly own twenty percent (20%)
or more of the Common Stock to be distributed as of the "Effective
Date" in connection with the consummation of the "Prepackaged Plan"
(as such terms are defined in the Prepackaged Plan referred to in
paragraph 12)) becomes the beneficial owner, as that concept is
defined in Rule 13d-3 promulgated by the Securities and Exchange
Commission under the Exchange Act of securities of the Company
possessing either (X) thirty percent (30%) or more of the voting
power for the election of directors of the Company or (Y) thirty
percent (30%) or more in value of the outstanding equity securities
(or the right to acquire thirty (30%) per cent or more) of the
Company;
ICSL STOCK OPTION PLAN 4
<PAGE>
(ii) There shall be consummated any consolidation, merger, or other
business combination involving the Company or the securities of the
Company in which (X) holders of voting securities of the Company
immediately prior to such consummation own, as a group, immediately
after such consummation, voting securities of the Company (or, if
the Company does not survive such transaction, voting securities of
the corporation surviving such transaction) having less than fifty
percent (50%) of the total voting power in an election of directors
of the Company (or such other surviving corporation) or
(Y) holders of equity securities of the Company immediately prior
to such consummation own, as a group, immediately after such
consummation, equity securities of the Company (or, if the Company
does not survive such transaction, voting securities of the
corporation surviving such transaction) having less than fifty
percent (50%) of the equity securities of the Company (or such
other surviving corporation);
(iii) During any period of two (2) consecutive years, individuals who at
the beginning of such period constitute the directors of the
Company cease for any reason other than voluntary resignation,
death, disability or retirement to constitute at least a majority
thereof unless the election, or the nomination for election by the
Company's shareholders, of each new director of the Company was
approved by a vote of at least two-thirds ( 2/3) of the directors
of the Company then still in office who were directors of the
Company at the beginning of any such period; or
(iv) There shall be consummated any sale, lease, exchange, or other
transfer (in one transaction or a series of related transactions)
of assets representing at least 75% of the assets of the Company
(on a consolidated basis) to a party which is not controlled by or
under common control with the Company.
(c) An option may be exercised at any time or from time to time
(subject, in the case of an incentive stock option, to such restrictions as may
be imposed by the Code), as to any or all full shares of Common Stock as to
which the option has become exercisable. Notwithstanding the foregoing
provision, no option may be exercised without the prior consent of the Committee
by an employee who is subject to Section 16(b) of the Exchange Act until the
expiration of six months from the date of the grant of the option.
(d) The purchase price of the shares as to which an option is exercised
shall be paid in full to the Company at the time of exercise; payment may be
made (i) in cash, which may be paid by check, or other instrument acceptable to
the Company; (ii) with the consent of the Committee, and subject to such terms
and conditions as it may determine, by delivery of shares of the Common Stock
which have been owned by the optionee exercising such option for more than six
months (or such longer or shorter period of time required to avoid a charge to
earnings for financial accounting purposes), valued at the Market Value on the
date of exercise, or (iii) at the discretion of the Committee, in accordance
with a cashless exercise program (through broker accommodation), if any,
established by the Committee. In addition, the optionee exercising such option
shall promptly pay to the Company in cash any amount necessary to satisfy all
applicable federal, state or local tax requirements (and in no event shall
Common Stock be delivered with respect to such option until all such amounts
have been fully paid to the Company). The Committee may permit such amount to be
paid in shares of Common Stock previously owned by the optionee for more than
six months prior to such payment (or such longer or shorter period of time
required to avoid a charge to earnings for financial accounting purposes), or a
portion of the shares of Common Stock that otherwise would be distributed to
such optionee upon exercise of the option (PROVIDED, HOWEVER, that the amount of
any Common Stock so withheld shall not exceed the amount necessary to satisfy
the Company's or any Subsidiary's required tax withholding obligations using the
minimum statutory withholding rates for Federal, state, local and foreign tax
purposes, including payroll taxes, that are applicable to supplemental taxable
income), in either case, based on the Market Value of such shares on the date of
payment, as
ICSL STOCK OPTION PLAN 5
<PAGE>
determined by the Committee, or a combination of cash and shares of such Common
Stock. The Company or a Subsidiary shall, to the extent permitted by law, have
the right to deduct any such taxes from any payment of any kind otherwise due to
such optionee.
(e) Except as provided in paragraphs 8, 9 and 10, no options may be
exercised at any time unless the holder thereof is then an employee of or
performing services for the Company or one of its Subsidiaries.
(f) Upon, but not until, the exercise of an option or portion thereof
in accordance with the Plan, the applicable option agreement and such rules and
regulations as may be established by the Committee, the holder thereof shall
have the rights of a stockholder with respect to the shares issued as a result
of such exercise.
(g) The Company may make loans to such optionees as the Committee, in
its discretion, may determine (including a holder who is a director or officer
of the Company) in connection with the exercise of options granted under the
Plan; PROVIDED, HOWEVER, that the Committee shall not authorize the making of
any loan where the possession of such discretion or the making of such loan
would result in a "modification" (as defined in Section 424 of the Code) of any
incentive stock option. Such loans shall be subject to the following terms and
conditions and such other terms and conditions as the Committee shall determine
not inconsistent with the Plan. Such loans shall bear interest at such rates as
the Committee shall determine from time to time, which rates may be below then
current market rates (except in the case of incentive stock options). In no
event may any such loan exceed the fair market value, at the date of exercise,
of the shares covered by the option, or portion thereof, exercised by the
holder. No loan shall have an initial term exceeding five years, but any such
loan may be renewable at the discretion of the Committee. When a loan shall have
been made, shares of Common Stock having a fair market value at least equal to
the principal amount of the loan shall be pledged by the holder to the Company
as security for payment of the unpaid balance of the loan. Every loan shall
comply with all applicable laws, regulations and rules of the Board of Governors
of the Federal Reserve System and any other governmental agency having
jurisdiction.
8. TRANSFERABILITY OF OPTIONS
(a) Except as otherwise provided in this paragraph 8, options granted
under the Plan shall not be transferable otherwise than by will or the laws of
descent and distribution, and may be exercised during the lifetime of the
optionee who received such option only by such optionee.
(b) No transfer of any options by will or the laws of descent and
distribution shall be effective to bind the Company unless the Committee shall
have been furnished with (i) written notice thereof and with a copy of the will
and/or such evidence as the Committee may deem necessary to establish the
validity of the transfer and (ii) an agreement by the transferee to comply with
all the terms and conditions of the option grant that are or would have been
applicable to the individual to whom the option was granted and to be bound by
the acknowledgments made by such individual in connection with the grant of the
option.
(c) With the approval of the Committee and subject to such conditions
as the Committee may prescribe, an optionee may, upon providing written notice
to the Secretary of the Company, elect to transfer any or all such optionee's
non-qualified options to such optionee's spouse, children, grandchildren and the
spouses of children and grandchildren or to trusts for the benefit of the
optionee and/or any of the foregoing family members of the optionee or to
partnerships in which the optionee and/or such family members are the only
partners ("Permitted Transferees"); PROVIDED, HOWEVER, that no such transfer by
any optionee may be made in exchange for consideration and following any such
transfer the option may not be subsequently transferred; and PROVIDED FURTHER,
HOWEVER, that following any such transfer, the exercise, vesting and termination
provisions of such option and the Plan shall continue to be applied with respect
to the optionee who transferred such option.
ICSL STOCK OPTION PLAN 6
<PAGE>
(d) If any rights exercisable by the optionee or benefits deliverable
to an optionee under the Plan have not been exercised or delivered,
respectively, at the time of the optionee's death, such rights shall be
exercisable by the optionee's Designated Beneficiary, and such benefits shall be
delivered to the Designated Beneficiary, in accordance with the provisions of
the Plan and the applicable option agreement. The "Designated Beneficiary" shall
be the beneficiary or beneficiaries designated by the optionee in a writing
filed with the Committee in such form and at such time as the Committee shall
require. If a deceased optionee fails to designate a beneficiary, or if the
Designated Beneficiary does not survive the optionee, any rights that would have
been exercisable by the optionee and any benefits distributable to the optionee
shall be exercised by or distributed to the legal representative of the estate
of the optionee. If a deceased optionee designates a beneficiary but the
Designated Beneficiary dies before the Designated Beneficiary's exercise of all
rights under the Plan or the option agreement or before the complete
distribution of benefits to the Designated Beneficiary under the option
agreement, then any rights that would have been exercisable by the Designated
Beneficiary shall be exercised by the legal representative of the estate of the
Designated Beneficiary, and any benefits distributable to the Designated
Beneficiary shall be distributed to the legal representative of the estate of
the Designated Beneficiary.
9. TERMINATION OF SERVICE
(a) Unless otherwise determined by the Committee and stated in the
option agreement, and subject to such restrictions as may be imposed by the Code
in the case of any incentive stock options, in the event that the employment or
other period of service with the Company and the Subsidiaries of an optionee to
whom an option has been granted under the Plan shall be terminated (except as
set forth in paragraph 10), such option may, subject to the provisions of the
Plan, be exercised (to the extent that the optionee was entitled to do so under
the Plan and the optionee's option agreement at the termination of his
employment or period of service) at any time within three months after such
termination, or, in the case of an employee whose termination results from
retirement from active employment at or after age 55 (as determined by the
Committee in its good faith discretion) within one year after such termination,
but in no case later than the date on which the option expires; PROVIDED,
HOWEVER, that any option held by an employee or consultant whose employment or
service with the Company or a Subsidiary is terminated for cause (as determined
by the Committee in its good faith discretion) shall forthwith terminate, to the
extent not theretofore exercised.
(b) Options granted under the Plan shall not be affected by any change
of duties or position so long as the optionee holding any such option continues
to be an employee, director or consultant of the Company or any of its
Subsidiaries, subject to any applicable limitations on the holding of incentive
stock options. Any option agreement, or any rules and regulations relating to
the Plan, may contain such provisions as the Committee shall approve with
reference to the determination of the date employment or period of service with
the Company and any Subsidiary terminates and the effect of leaves of absence.
Any such rules and regulations with reference to any option agreement shall be
consistent with the provisions of the Code and any applicable rules and
regulations thereunder.
(c) Nothing in the Plan or in any option granted pursuant to the Plan
shall confer upon any employee, director or consultant any right to continue in
the employ of, or in any other relationship with, the Company or any of its
Subsidiaries or interfere in any way with the right of the Company or any such
Subsidiary to terminate any such employment or other relationship at any time.
10. DEATH OR TOTAL DISABILITY OF OPTIONEE
If an optionee ceases to be an employee, director or consultant of the
Company or any Subsidiary by reason of "total disability," such optionee's
option may be exercised, to the extent that the optionee or a Permitted
Transferee of the option was entitled to do so at the termination of employment
or service with the Company or such a Subsidiary, as set forth herein and in the
optionee's option agreement (subject to the restrictions set forth in
paragraph 7 or otherwise applicable with respect to persons subject to
ICSL STOCK OPTION PLAN 7
<PAGE>
Section 16(b) of the Exchange Act) at any time within one year after the date of
such termination of employment or service, but in no case later than the date on
which the option expires. If an optionee shall die while an employee, director
or consultant of the Company or its Subsidiaries or within three months (or, in
the case of an employee whose termination results from disability or retirement
from active employment at or after age 55, within one year) after the
termination of such employment or other relationship with the Company or such a
Subsidiary (other than termination for cause), such optionee's option may be
exercised, to the extent that the optionee or a Permitted Transferee of the
option was entitled to do so at the termination of employment or service with
the Company or such as Subsidiary (or at the date of death, if later), as set
forth herein and in the optionee's option agreement by the optionee, a legatee
or legatees of the optionee under the optionee's last will, by the optionee's
personal representatives or distributees or by the Permitted Transferee,
whichever is applicable, at any time within one year after the date of the
optionee's death, but in no case later than the date on which the option
expires. For purposes hereof, "total disability" is defined as the permanent
inability of an optionee, as a result of accident or sickness, to perform any
and every duty pertaining to such optionee's occupation or employment for which
the optionee is suited by reason of the optionee's previous training, education
and experience, as determined by the Committee in its good faith discretion,
and, for purposes of incentive stock options granted under the plan, "total
disability" shall mean "permanent and total disability," as defined in
Section 22(e)(3) of the Code.
11. ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC.
(a) Notwithstanding any other provision of the Plan, in the event of
distributions to holders of Common Stock other than a normal cash dividend,
changes in the outstanding Common Stock by reason of stock dividends, split-ups,
recapitalizations, mergers, consolidations, combinations or exchanges of shares,
separations, reorganizations, liquidations, "spin-offs" or similar capital
changes, the Committee may, in its sole discretion, make such adjustments to the
number, class and kind of shares available under the Plan and to the number,
class, kind and price of shares available under any outstanding option as it may
deem appropriate to prevent dilution or enlargement of the rights of optionees
or otherwise to reflect such capital changes. Any such determination by the
Committee shall be conclusive. No adjustment shall be made in respect of an
incentive stock option if such adjustment would disqualify such option as an
incentive stock option under Section 422 of the Code and the Treasury
Regulations thereunder, unless the Committee determines otherwise. No adjustment
shall be made in the minimum number of shares with respect to which an option
may be exercised at any time. Any fractional shares resulting from such
adjustments to options shall be eliminated.
(b) In the event of a Change of Control, in addition to or in lieu of
the any acceleration of outstanding options described in paragraph 7(b):
(i) In its discretion, and on such terms and conditions as it deems
appropriate, the Committee may provide, either by the terms of the
option agreement applicable to any option or by resolution adopted
prior to the occurrence of the Change of Control, that any
outstanding option shall be adjusted by substituting for Common
Stock subject to such option stock or other securities of the
surviving corporation or any successor corporation to the Company,
or a parent or subsidiary thereof, or that may be issuable by
another corporation that is a party to the transaction resulting in
the Change of Control, whether or not such stock or other securities
are publicly traded, in which event the aggregate option exercise
price shall remain the same and the amount of shares or other
securities subject to the option shall be the amount of shares or
other securities which could have been purchased on the closing date
or expiration date of such transaction with the proceeds which would
have been received by the optionee if the option had been exercised
in full (or with respect to a portion of such option, as determined
by the Committee, in its discretion) prior to such transaction or
expiration date and the optionee exchanged all of such shares in the
transaction.
ICSL STOCK OPTION PLAN 8
<PAGE>
(ii) In its discretion, and on such terms and conditions as it deems
appropriate, the Committee may provide, either by the terms of the
option agreement applicable to any option or by resolution adopted
prior to the occurrence of the Change of Control, that any
outstanding option shall be converted into a right to receive cash
on or following the closing date or expiration date of the
transaction resulting in the Change of Control in an amount equal
to the highest value of the consideration to be received in
connection with such transaction for one share of Common Stock,
less the per share option exercise price of such option, multiplied
by the number of shares of Common Stock subject to such option, or
a portion thereof.
(iii) The Committee may, in its discretion, provide that an option cannot
be exercised after such a Change of Control, to the extent that
such option is or becomes fully exercisable on or before such
Change of Control and/or is subject to any acceleration, adjustment
or conversion in accordance with paragraph 7(b) or the foregoing
subparagraphs (i) or (ii) of this paragraph 11(b).
No optionee shall have any right to prevent the consummation of any of the
foregoing acts affecting the number of shares of Common Stock available to such
optionee. Any actions or determinations of the Committee under this
paragraph 11(b) or paragraph 7(b) need not be uniform as to all outstanding
options, nor treat all optionees identically. Notwithstanding the foregoing
adjustments, in no event may any option be exercised after ten (10) years from
the date it was originally granted.
12. EFFECTIVE DATE; COMPLIANCE WITH LAW; OPTIONEE ACKNOWLEDGMENTS
(a) The Plan shall be effective as of (a) the "Effective Date" set
forth in the Company's prepackaged plan of reorganization filed pursuant to
Chapter 11 of the United States Bankruptcy Code (the "Prepackaged Plan")
provided that such Prepackaged Plan shall be approved and confirmed by the
bankruptcy court having jurisdiction over the Prepackaged Plan, or (b) in the
event the Prepackaged Plan is not approved and confirmed by such bankruptcy
court, the date on which the Plan is approved by the stockholders of the
Company, which approval shall occur within twelve (12) months before or after
the date the Plan is adopted by the Board of Directors. The Committee thereafter
may, in its discretion, grant options under the Plan, the grant, exercise or
payment of which shall be expressly subject to the conditions that, to the
extent required at the time of grant, exercise or payment, (i) if the Company
deems it necessary or desirable, a Registration Statement under the Securities
Act of 1933, as amended (the "Securities Act"), with respect to such shares
shall be effective, and (ii) any requisite approval or consent of any
governmental authority of any kind having jurisdiction over options granted
under the Plan shall have been obtained.
(b) If at any time counsel to the Company shall be of the opinion that
any sale or delivery of shares of Common Stock pursuant to an option under the
Plan is or may be in the circumstance unlawful or result in the imposition of
excise taxes on the Company or any Subsidiary under the statutes, rules or
regulations of any applicable jurisdiction, the Company shall have no obligation
to make such sale or delivery, or to make any application or to effect or to
maintain any qualification or registration under the Securities Act, or
otherwise with respect to shares of Common Stock or option grants under the Plan
and the right to exercise any option shall be suspended until, in the opinion of
such counsel, such sale or delivery shall be lawful or will not result in the
imposition of excise taxes on the Company or any Subsidiary.
(c) The Committee may require each person receiving Common Stock in
connection with an award under the Plan to represent and agree with the Company
in writing that such person is acquiring the shares of Common Stock for
investment without a view to the distribution thereof. The Committee, in its
absolute discretion, may impose such restrictions on the ownership and
transferability of shares of Common Stock purchasable or otherwise receivable by
any person under any award as it deems appropriate. Any such restrictions shall
be set forth in the applicable option agreement, and the certificates
ICSL STOCK OPTION PLAN 9
<PAGE>
evidencing such shares may include any legend that the Committee deems
appropriate to reflect any such restrictions. The Committee may require an
optionee to give prompt written notice to the Company concerning any disposition
of shares of Common Stock received upon the exercise of an incentive stock
option within: (i) two (2) years from the date of granting such incentive stock
option to such optionee or (ii) one (1) year from the transfer of such shares of
Common Stock to such optionee or (iii) such other period as the Committee may
from time to time determine. The Committee may direct that an optionee undertake
in the applicable option agreement to give such notice described in the
preceding sentence, at such time and containing such information as the
Committee may prescribe, and/or that the certificates evidencing shares of
Common Stock acquired by exercise of an incentive stock option refer to such
requirement to give such notice.
(d) By accepting any benefit under the Plan, each optionee and each
person claiming under or through such optionee shall be conclusively deemed to
have indicated their acceptance and ratification of, and consent to, all of the
terms and conditions of the Plan and any action taken under the Plan by the
Committee, the Company or the Board of Directors, in any case in accordance with
the terms and conditions of the Plan.
13. TERMINATION AND AMENDMENT
The Plan shall be of unlimited duration; PROVIDED, HOWEVER, that, to the
extent required by the Code, no incentive stock option may be granted under the
Plan on a date that is more than ten (10) years from the effective date of the
Plan set forth in Section 12. The Board of Directors may suspend, terminate,
modify or amend the Plan, PROVIDED that any modification or amendment that would
(a) increase the aggregate number of shares that may be issued under the Plan or
the limitations set forth in paragraph 4(c) on the maximum number of shares of
Common Stock that may be subject to options granted to a single optionee;
(b) decrease the minimum option exercise price requirements of paragraph 5 or
otherwise materially increase the benefits accruing to optionees under the Plan;
(c) extend the duration of the period during which incentive stock options may
be granted under the Plan or the period during which options may be exercised
under paragraph 6; or (d) modify the requirements as to eligibility for
participation in the Plan shall be subject to the approval of the Company's
stockholders, except that any such increase in shares of Common Stock or
decrease in option exercise price that may result from adjustments authorized by
paragraph 11 does not require such approval. If the Plan is terminated, the
terms of the Plan shall, notwithstanding such termination, continue to apply to
awards granted prior to such termination. In addition, no suspension,
termination, modification or amendment of the Plan, other than as may result
from adjustments authorized by paragraph 11, may, without the consent of the
optionee to whom an option shall theretofore have been granted, materially
adversely affect the rights of such optionee under such option. The Committee
may amend the terms of any option theretofore granted under the Plan, including
any agreement evidencing any such option, retroactively or prospectively, but no
such amendment, other than as may result from adjustments authorized by
paragraph 11, shall materially impair the previously accrued right of any
optionee under any outstanding option without his or her written consent.
14. WRITTEN AGREEMENTS
Each grant of options shall be evidenced by a written agreement, executed by
the optionee and the Company, which shall contain such restrictions, terms and
conditions, not inconsistent with the terms and conditions of the Plan, as the
Committee may require. Each such option agreement shall state whether such
option will be treated as an incentive stock option or non-qualified option.
15. EFFECT ON OTHER STOCK PLANS; GOVERNING LAW
(a) The adoption of the Plan shall have no effect on option grants made
or to be made, pursuant to other stock plans or otherwise, to employees,
directors or consultants of the Company or its Subsidiaries, or any predecessors
or successors thereto.
ICSL STOCK OPTION PLAN 10
<PAGE>
(b) The Plan shall be governed by and construed in accordance with the
laws of the State of Delaware, without regard to such state's conflict of law
provisions, and, in any event, except as superseded by applicable Federal law.
IN WITNESS WHEREOF, the Company has caused its duly authorized officer to
execute this Plan as of the 21st day of September 2000.
INNOVATIVE CLINICAL SOLUTIONS, LTD.
By: /s/ Michael T. Heffernan
--------------------------------------------
Title: President and Chief Executive Officer
--------------------------------------------
ICSL STOCK OPTION PLAN 11
<PAGE>
SCHEDULE I
EMPLOYEES AND DIRECTORS DESIGNATED TO RECEIVE INITIAL OPTION GRANTS
UNDER INNOVATIVE CLINICAL SOLUTIONS, LTD. 2000 STOCK OPTION PLAN
<TABLE>
<CAPTION>
EMPLOYEE SHARES COVERED BY OPTION
-------- ------------------------
<S> <C>
Michael T. Heffernan........................................ 357,143
Bryan B. Dieter............................................. 357,143
Gary S. Gillheeney.......................................... 357,143
R. Adrian Otte, M.D......................................... 457,143
John Wardle................................................. 357,143
DIRECTOR
--------
William S. Bernstein........................................ 28,571
David M. Livingston......................................... 28,571
Kevin E. Moley.............................................. 28,571
Marvin Moser, M.D........................................... 28,571
Eric Moskow, M.D............................................ 28,571
Shares not subject to Options granted
pursuant to paragraph 4(d) or 4(e)
("Unallocated Options")................................... 257,144
</TABLE>
12
