Exhibit 10.1
FIRST HORIZON PHARMACEUTICAL CORPORATION
2000 STOCK PLAN
1. PURPOSE. The purpose of the 2000 Stock Plan (the "Plan") is to (a)
attract and retain persons eligible to participate in the Plan; (b) motivate
participants, by means of appropriate incentives, to achieve long-range goals;
and (c) further identify participants' interests with those of the Company's
shareholders through compensation that is based on the Company's common stock to
promote the long-term financial interest of the Company, including the growth in
value of the Company's equity and the enhancement of shareholder return. The
term "Company" means First Horizon Pharmaceutical Corporation and its
Subsidiaries. The term "Code" shall mean the Internal Revenue Code of 1986, as
amended, and any successor statute. The term "Subsidiary" shall have the meaning
set forth in Section 424(f) of the Code.
2. TYPES OF GRANTS. The Plan Committee (as defined below) may, from time to
time, take the following action separately or in combination under the Plan:
(a) grant INCENTIVE STOCK OPTIONS, as defined in Section 422 of the
Code, as provided in Section 7 hereof;
(b) grant NONQUALIFIED STOCK OPTIONS as provided in Section 8 hereof;
(c) grant STOCK AWARDS as provided in Section 9 hereof; or
(d) SELL SHARES as provided in Section 10 hereof.
3. ELIGIBILITY; MAXIMUM ANNUAL GRANTS TO ANY INDIVIDUAL. Officers,
directors employees, advisors and consultants of the Company shall be eligible
to participate in the Plan at the discretion of the Plan Committee; provided,
however, that if and to the extent any state or federal securities laws, rules
or regulations limit the eligible participants to employees of the Company or
otherwise, then the eligible participants in such jurisdiction shall be so
limited under this Plan; and further provided that only full-time employees of
the Company may receive incentive stock options. To comply with Section 162(m)
of the Code, the maximum number of shares that may be covered by grants under
this Plan to any one individual during any calendar year is no more than 500,000
shares.
4. ADMINISTRATION. The Plan shall be administered by a plan committee (the
"Plan Committee") established by the Board of Directors of First Horizon
Pharmaceutical Corporation (the "Board"), which shall appoint and remove members
of the Plan Committee in its discretion subject only to the requirements set
forth herein. The Plan Committee shall consist of two or more members of the
Board who are nonemployee directors within the meaning of Rule 16b-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, if deemed
appropriate are outside directors within the meaning of Section 162(m) of the
Code. The Plan Committee shall determine the meaning and application of the
1
<PAGE>
provisions of the Plan and all grant agreements executed pursuant thereto, and
its decisions shall be conclusive and binding upon all interested persons.
Subject to the provisions of the Plan, the Plan Committee shall have the sole
authority to determine: (a) the persons to whom grants shall be made; (b) the
amount and nature of the grants; (c) the price to be paid for the Stock upon the
exercise of each option; (d) the period within which each option may be
exercised; and (e) the other terms and conditions of the grants.
5. NUMBER OF SHARES RESERVED UNDER PLAN. The Company shall reserve for
issuance under the Plan 2,000,000 shares of Common Stock of First Horizon
Pharmaceutical Corporation ("Stock") or the number of shares of Stock, which, in
accordance with the provisions of Section 6 below, shall be substituted
therefor. If an option, stock award or stock sale granted under the Plan shall
expire or terminate for any reason without having been exercised in full or
without having been vested, shares subject to the unexercised, unvested or
forfeited portion thereof shall again be available for the purposes of the Plan;
provided, however, that the availability of any such shares shall be subject to
the provisions of Section 162(m) of the Code.
6. ADJUSTMENT TO NUMBER OF SHARES AND EXERCISE PRICE. In the event of
changes in the outstanding Stock by reason of stock dividends, split-ups,
consolidations, recapitalizations, reorganizations or similar events (as
determined by the Plan Committee), an appropriate adjustment shall be made by
the Plan Committee in the number of shares reserved under the Plan, in the
number of shares set forth in Section 5 above, in the number of shares and the
option price per share specified in any stock option agreement with respect to
any unpurchased shares, and the maximum number of shares that may be covered by
grants under this Plan to any one individual during any calendar year. The
determination of the Plan Committee as to what adjustments shall be made shall
be conclusive. Adjustments for any options to purchase fractional shares shall
also be determined by the Plan Committee. The Plan Committee shall give prompt
notice to all grantees of any adjustment pursuant to this Section.
7. INCENTIVE STOCK OPTIONS. It is intended that options granted pursuant to
this Section 7 qualify as incentive stock options as defined in Section 422 of
the Code. Incentive stock options shall be granted only to employees of the
Company. Each stock option shall be subject to the following terms and
conditions and to such other terms and conditions not inconsistent therewith as
the Plan Committee may deem appropriate and may be set forth in the grant
agreement:
(a) Limitation on Amount of Incentive Stock Options Becoming
Exercisable in Any One Calendar Year. The aggregate Fair Market Value
(determined as of the time the option is granted) of Stock with respect to which
incentive stock options are exercisable for the first time by the grantee during
any calendar year (under the Plan and all other incentive stock option plans of
the Company) shall not exceed $100,000.
(b) Incentive Stock Option Price. The price to be paid for each share
of Stock upon the exercise of each incentive stock option shall be determined by
the Plan Committee at the time the option is granted, but shall in no event be
less than 100% of the Fair Market Value (as defined below) of the shares on the
date the option is granted, or not less than 110% of the Fair Market Value of
such shares on the date such option is granted in the case of an individual then
owning (within the meaning of Section 424(d) of the Code) more than 10% of the
total combined voting power of all classes of stock of the Company or of its
parent or Subsidiaries. The "date the option is granted" means the date on which
2
<PAGE>
the Plan Committee authorizes the grant of an option under this Plan. For
purposes of determining the "Fair Market Value" of a share of Stock under this
Plan, the following rules shall apply:
(i) If the Stock is at the time listed or admitted to
trading on any stock exchange (including the
Nasdaq National Stock Market), then the "Fair
Market Value" shall be the mean between the lowest
and highest reported sale prices of the Stock on
the date in question on the principal exchange on
which the Stock is then listed or admitted to
trading. If no reported sale of Stock takes place
on the date in question on the principal exchange,
then the reported closing sale price of the Stock
on such date on the principal exchange shall be
determinative of "Fair Market Value."
(ii) If the Stock is not at the time listed or admitted
to trading on a stock exchange, the "Fair Market
Value" shall be the mean between the closing
reported sale price of the Stock on the date in
question in the over-the-counter market.
(iii) In the absence of an established market for the
Common Stock, the Fair Market Value thereof shall
be determined in good faith by the Committee.
(d) Limitation on Duration of Incentive Stock Options. The period
within which an incentive stock option may be exercised shall be determined by
the Plan Committee at the time the option is granted; provided, however, that in
no event shall any incentive stock option granted hereunder be exercisable more
than ten years from the date the option was granted nor more than five years
from the date the option was granted in the case of an individual then owning
(within the meaning of Section 424(d) of the Code) more than 10% of the total
combined voting power of all classes of stock of the Company.
(e) Payment for Stock upon Exercise of Option. The option exercise
price for each share of Stock purchased under a stock option shall be paid in
full at the time of purchase. The payment of the exercise price of an incentive
stock option granted shall be subject to the following:
(i) The full exercise price for shares of Stock
purchased upon the exercise of any stock option
shall be paid at the time of such exercise (except
that, in the case of an exercise arrangement
approved by the Plan Committee and described in
paragraph 6(e)(iii) below, payment may be made as
soon as practicable after the exercise).
(ii) The exercise price shall be payable in cash or by
tendering (either actually or, if and so long as
the Common Stock is registered under Section 12(b)
or 12(g) of the Exchange Act, by attestation) or
constructively surrendering Stock already owned by
the grantee of the stock option for at least six
3
<PAGE>
months (or any shorter or longer period necessary
to avoid a charge to the Company's earnings for
financial reporting purposes) having a Fair Market
Value on the day prior to the stock option's
exercise date equal to the aggregate exercise
price.
(iii) The Plan Committee may permit a participant to
elect to pay the exercise price upon the exercise
of a stock option by authorizing a third party to
sell shares of Stock (or a sufficient portion of
the shares) acquired upon exercise of the stock
option and remit to the Company a sufficient
portion of the sale proceeds to pay the entire
exercise price and any tax withholding resulting
from such exercise, or the Company may choose to
retain such shares in satisfaction of the exercise
price and any tax withholding.
8. NONQUALIFIED STOCK OPTIONS. Each nonqualified stock option granted under
the Plan shall be evidenced by a stock option agreement between the person to
whom such option is granted and the Company. Such stock option agreement shall
provide that the option is subject to the following terms and conditions and to
such other terms and conditions not inconsistent therewith as the Plan Committee
may deem appropriate and may be set forth in the grant agreement:
(a) Nonqualified Stock Option Price. The price to be paid for each
share of Stock upon the exercise of a nonqualified stock option shall be
determined by the Plan Committee at the time the option is granted. To the
extent that the Fair Market Value of Stock is relevant to the pricing of the
option by the Plan Committee, Fair Market Value of the Stock shall be determined
as set forth in Section 7(b) above.
(b) Limitation on Duration of Nonqualified Stock Option. The period
within which a nonqualified stock option may be exercised shall be determined by
the Plan Committee at the time the option is granted, but in no event shall such
period exceed 10 years from the date the option is granted.
(c) Payment for Stock upon Exercise of Nonqualified Stock Option. The
option exercise price for each share of Stock purchased under a nonqualified
stock option shall be paid in full at the time of purchase and shall be subject
to the terms and provisions of Section 7(e) above.
9. STOCK AWARDS. The Plan Committee may award Stock under the Plan as stock
bonuses. Stock awarded as a bonus shall be subject to the terms, conditions, and
restrictions determined by the Plan Committee. The restrictions may include
restrictions concerning transferability, voting, repurchase by the Company and
forfeiture of the shares of Stock awarded, together with such other restrictions
as may be determined by the Plan Committee. If shares of Stock are subject to
forfeiture, all dividends or other distributions paid by the Company with
respect to the shares of Stock shall be retained by the Company until the shares
of Stock are no longer subject to forfeiture, at which time all accumulated
amounts shall be paid to the recipient. The Plan Committee may require the
recipient to sign an agreement as a condition of the award, but may not require
the recipient to pay any monetary consideration other than amounts necessary to
satisfy tax withholding requirements. The agreement may contain any terms,
4
<PAGE>
conditions, restrictions, representations and warranties required by the Plan
Committee. The certificates representing the shares awarded shall bear any
legends required by the Plan Committee. Unless otherwise determined by the Plan
Committee, shares awarded as a stock bonus to an officer or director may not be
sold until six months after the date of the award. Upon the issuance of a stock
award, the number of shares of Stock reserved for issuance under the Plan shall
be reduced by the number of shares of Stock issued.
10. SALE OF STOCK. The Plan Committee may issue Stock under the Plan for
such consideration (including promissory notes and services) as determined by
the Plan Committee. Stock issued under the Plan shall be subject to the terms,
conditions and restrictions determined by the Plan Committee. The restrictions
may include restrictions concerning transferability, voting, repurchase by the
Company and forfeiture of the shares issued, together with such other
restrictions as may be determined by the Plan Committee. If shares of Stock are
subject to forfeiture or repurchase by the Company, all dividends or other
distributions paid by the Company with respect to the shares of Stock shall be
retained by the Company until the shares of Stock are no longer subject to
forfeiture or repurchase, at which time all accumulated amounts shall be paid to
the recipient. All Stock issued pursuant to this Section 10 shall be subject to
a purchase or subscription agreement, which shall be executed by the Company and
the prospective recipient of the shares prior to the delivery of certificates
representing such shares to the recipient. The purchase agreement may contain
any terms, conditions, restrictions, representations and warranties required by
the Plan Committee. The certificates representing the shares of Stock shall bear
any legends required by the Plan Committee. Upon the issuance of Stock under
this Section 10, the number of shares of Stock reserved for issuance under the
Plan shall be reduced by the number of shares of Stock issued.
11. NONTRANSFERABILITY. The options granted pursuant to the Plan shall be
nontransferable except by will or the laws of descent and distribution of the
state or county of the grantee's domicile at the time of death, or, except in
the case of incentive stock options, pursuant to a qualified domestic relations
order defined under the Code or Title I of the Employee Retirement Income
Security Act, and shall be exercisable during the grantee's lifetime only by him
(or, except with respect to incentive stock options, in the case of a transfer
pursuant to a qualified domestic relations order, by the transferee under such
qualified domestic relations order) and after grantee's death, by grantee's
personal representative or by the person entitled thereto under grantee's will
or the laws of intestate succession.
12. EFFECT OF TERMINATION OF GRANTEE'S EMPLOYMENT OR OTHER RELATIONSHIP
WITH COMPANY. Upon termination of the grantee's employment or other relationship
with the Company, grantee's rights to exercise vested options then held by
grantee shall be as follows, except that to the extent such periods are more
restrictive in the grantee's agreement with the Company the shorter period
specified in the agreement shall apply:
(a) Death of Grantee. Upon the death of a grantee, any vested option
may be exercised (to the extent exercisable on the date of death) within 12
months following the date of death or within such shorter period as the Plan
Committee as the Plan Committee shall prescribe in the option agreement, by the
grantee's representative or by the person entitled thereto under grantee's will
or the laws of intestate succession.
5
<PAGE>
(b) Disability of Grantee. Upon the disability (within the meaning of
Section 22(e)(3) of the Code) of a grantee, any vested option may be exercised
(to the extent exercisable as of the date of disability), within 12 months
following disability, or within such shorter period as the Plan Committee shall
prescribe in the option agreement.
(c) Other Termination. In the event an officer, director or employee
ceases to serve as an officer or director or employee of the Company or a
nonemployee ceases to provide services to the Company for any reason other than
as set forth in (a) and (b), above, any option which grantee holds shall
terminate at either (i) 60 days after the date a grantee-employee employment
terminates or a grantee-nonemployee ceases providing services to the Company or
(ii) such later date as determined by the Plan Committee and set forth in the
grant agreement for any grants other than incentive stock options. The foregoing
shall not extend any option or beyond the term specified in the grant agreement
and such option shall be exercisable only to the extent exercisable at the date
of termination of employment or cessation of services. The Plan Committee may in
its sole discretion permit the grantee of incentive stock options in whole or in
part to convert such options into nonqualified stock options prior to expiration
of the incentive stock options.
13. CHANGE OF CONTROL. Upon the occurrence of a Change in Control (as
hereinafter defined): All outstanding options granted under this Plan shall
become fully vested and exercisable and all Stock awarded or sold under this
Plan shall become fully vested. "Change of Control" means a change in the
beneficial ownership of the Company's voting stock or a change in the
composition of the Board which occurs as follows:
(a) The acquisition (other than by a direct purchase of shares from
First Horizon Pharmaceutical Corporation ("Horizon")) by any "person," including
a "syndication" or "group", as those terms are used in Section 13(d)(3) or
14(d)(2) of the Exchange Act, of securities of representing 20% or more of the
combined voting power of Horizon's then outstanding voting securities, which is
any security that ordinarily possesses the power to vote in the election of the
Board of Directors of a corporation without the happening of any precondition or
contingency;
(b) Horizon is merged or consolidated with another corporation and
immediately after giving effect to the merger or consolidation either (i) less
than 80% of the outstanding voting securities of the surviving or resulting
entity are then beneficially owned in the aggregate by (x) the stockholders of
Horizon immediately prior to such merger or consolidation, or (y) if a record
date has been set to determine the stockholders of Horizon entitled to vote on
such merger or consolidation, the stockholders of Horizon as of such record
date;
(c) If at any time during a calendar year a majority of the directors
of Horizon are not persons who were directors at the beginning of the calendar
year; or
(d) Horizon transfers substantially all of its assets to another
corporation which is a less than 80% owned subsidiary of Horizon.
6
<PAGE>
14. SECURITIES LAW REQUIREMENTS. The Company's obligation to issue shares
of its Stock upon exercise of an option upon the grant of Stock awards, or upon
the sale of Stock is expressly conditioned upon the completion by the Company of
any registration or other qualification of such shares under any state or
federal law or rulings and regulations of any government regulatory body or the
making of such investment representations or other representations and
undertakings by the grantee or the recipient, as the case may be (or grantee's
legal representative, heir or legatee, as the case may be), in order to comply
with the requirements of any exemption from any such registration or other
qualification of such shares which the Company in its sole discretion shall deem
necessary or advisable. The Company may refuse to permit the sale or other
disposition of any shares acquired pursuant to any such representation until it
is satisfied that such sale or other disposition would not be in contravention
of applicable state or federal securities law.
15. TAX MATTERS. As a condition to the exercise of an option, the vesting
or award of a Stock bonus or the vesting or sale of shares of Stock, the Company
may require the grantee to pay over to the Company all applicable federal, state
and local taxes which the Company is required to withhold. At the discretion of
the Plan Committee and upon the request of an grantee, the minimum statutory
withholding tax requirements may be satisfied by the withholding of shares of
Stock otherwise issuable to the grantee upon the exercise of an option. In the
event grantee makes an 83(b) election under Code with respect to any grant under
the Plan, or disposes of an incentive stock option in a transaction deemed to be
a disqualifying disposition under Section 421 of the Code, then, within 30 days
of such 83(b) election or disqualifying disposition, the grantee shall inform
the Company of such actions.
16. AMENDMENTS TO PLAN. The Board of Directors may amend the Plan at any
time, except that:
(a) The number of shares of Stock which may be reserved for issuance
under the Plan shall not be increased except as provided in Section 6 above
without shareholder approval;
(b) The option price per share of Stock subject to incentive options
may not be fixed at less than 100% of the Fair Market Value of a share of Stock
on the date the option is granted;
(c) The expiration date of this Plan may not be extended;
(d) The maximum period of ten (10) years during which the options may
be exercised may not be extended;
(e) The class of persons eligible to receive grants under the Plan as
set forth in Section 3 shall not be changed without shareholder approval; and
(f) The benefits accruing to participants under this Plan may not be
materially increased.
7
<PAGE>
Except as otherwise provided in this Plan, in no event may action by the Board
or shareholders to amend this Plan alter or impair the rights of a then existing
grantee, without grantee's consent, under any stock option, award or right
previously granted to him hereunder.
17. EFFECTIVE DATE OF PLAN; DURATION OF PLAN. This Plan shall become
effective upon the approval of the stockholders of the Company (the "Effective
Date"); provided, however, that to the extent that grants are made under this
Plan prior to its approval by the stockholders, the grants shall be contingent
on approval of the Plan by the stockholders of the Company at such meeting. The
Plan shall have a duration of ten years from the Effective Date; provided that
in the event of Plan termination, the Plan shall remain in effect as long as any
unexercised or unvested grants under it are outstanding. No grant may be made
under the Plan on a date that is more than ten years from the Effective Date.
18. GRANT AGREEMENTS. Each option granted and each Stock award or sale of
shares of Stock under the Plan shall be evidenced by a written agreement
("Agreement") executed by the Company and accepted by the grantee, which (i)
shall contain each of the provisions and agreements herein specifically required
to be contained therein or a copy of this Plan attached as an exhibit to the
Agreement, (ii) if applicable, shall indicate whether such option is to be an
incentive stock option or a nonqualified stock option, and if it is to be an
incentive stock option, such Agreement shall contain terms and conditions
permitting such option to qualify for treatment as an incentive stock option
under Section 422 of the Code (by reference to the Plan or otherwise), (iii) may
contain the agreement of the grantee to remain in the employ of, or to render
services to, the Company for a period of time to be determined by the Plan
Committee (or such terms may be included in a separate agreement with the
Company), and (iv) may contain such other terms and conditions as the Plan
Committee deems desirable that are consistent with the Plan.
19. NO IMPLIED RIGHT OF EMPLOYMENT. Nothing in this Plan or in any grant
hereunder shall confer upon any recipient any right to continue in the employ of
the Company or to continue to perform services for the Company, or shall
interfere with or restrict in any way the rights of the Company to discharge or
terminate any officer, director, employee, advisor, independent contractor or
consultant at any time for any reason whatsoever, with or without good cause.
8
