<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION VIA THE EDGAR SYSTEM ON
MAY 9, 1997
Registration No. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM S-8
Registration Statement
under
The Securities Act of 1933
U.S. BIOSCIENCE, INC.
----------------------------------------------------
(Exact name of issuer as specified in its charter)
Delaware 23-2460100
------------------------------------ ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One Tower Bridge, 100 Front Street
West Conshohocken, Pennsylvania 19428
- ---------------------------------------- -----------
(Address of principal executive offices) Zip Code
U.S. Bioscience, Inc. 1996 Non-Employee Directors Stock Option Plan
U.S. Bioscience, Inc. Non-Executive Stock Option Plan
U.S. Bioscience, Inc. 1992 Stock Option Plan
----------------------------------------------------------------------
(Full title of the Plan)
Philip S. Schein, M.D.
Chairman and Chief Executive Officer
U.S. Bioscience, Inc.
One Tower Bridge, 100 Front Street
West Conshohocken, Pennsylvania 19428
-----------------------------------------
(Name and address of agent for service)
(610) 832-0570
----------------------------------------------------------
(Telephone number, including area code, of agent for service)
Copies to:
Alan H. Molod, Esquire
Wolf, Block, Schorr and Solis-Cohen
Twelfth Floor Packard Building
Philadelphia, Pennsylvania 19102
(215) 977-2188
CALCULATION OF REGISTRATION FEE
================================================================================
Proposed Proposed
maximum maximum
Amount offering aggregate Amount of
Title of securities to be price per offering registration
to be registered registered share (1) price fee
- --------------------- ---------- --------- ----------- ------------
Common Stock, $.01 2,150,000(2)$9.25 $19,887,500 $6,858
par value
- --------------------------------------------------------------------------------
(1) Calculated pursuant to Rule 457(h) and Rule 457(c) under the Securities Act
of 1933, based upon the average of the high and low prices of the Company's
Common Stock on the American Stock Exchange of $9.25 per share on May 2,
1997.
(2) This Registration Statement covers: (a) 50,000 shares of Common Stock to
be issued pursuant to the U.S. Bioscience, Inc. 1996 Non-Employee Directors
Stock
<PAGE>
Option Plan; (b) 1,000,000 shares to be issued pursuant to the U.S.
Bioscience, Inc. Non-Executive Stock Option Plan; and (c) 1,100,000 shares
to be issued pursuant to the U.S. Bioscience, Inc. 1992 Stock Option Plan.
Pursuant to Rule 416 under the Securities Act of 1933, this Registration
Statement also covers such additional shares as may hereinafter be offered
or issued to prevent dilution resulting from stock splits, stock dividends,
recapitalizations or certain other capital adjustments.
2
<PAGE>
PART II
-------
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
--------------------------------------------------
Item 3. Incorporation of Documents by Reference.
---------------------------------------
The following documents filed by U.S. Bioscience, Inc. (the "Registrant")
with the Securities and Exchange Commission pursuant to the Securities Exchange
Act of 1934 are incorporated into this registration statement by reference:
1. The Registrant's Annual Report on Form 10-K, for the year ended
December 31, 1996.
2. The description of the Registrant's shares of Common Stock, par
value $.01 per share (the "Common Stock"), contained in the Registration
Statement filed by the Registrant to register such securities under the
Securities Exchange Act of 1934, including Amendment No. 2 on Form 10/A filed
May 3, 1996 and all other amendments and reports filed for the purpose of
updating such description prior to the termination of the offering of the Common
Stock offered hereby.
All documents filed by the Registrant pursuant to Section 13(a), 13(c),
14 and 15(d) of the Securities Exchange Act of 1934 after the date of this
registration statement and prior to the filing of a post-effective amendment to
this Registration Statement which indicates that all securities offered hereby
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference in this registration statement and to
be a part hereof from the date of filing such documents. Any statement
contained in a document incorporated by reference herein shall be deemed to be
modified or superseded for purposes hereof to the extent that a statement
contained herein (or in any other subsequently filed document which also is
incorporated by reference herein) modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed to constitute a part
hereof except as so modified or superseded.
Item 4. Description of Securities.
-------------------------
Not applicable.
Item 5. Experts.
-------
The consolidated financial statements of U.S. Bioscience, Inc. appearing
in Registrant's Annual Report (Form 10-K) for the year ended December 31, 1996,
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon included therein and incorporated herein by reference.
Such
3
<PAGE>
financial statements are, and audited financial statements to appear in
subsequently filed documents will be, incorporated herein by reference in
reliance upon the reports of Ernst & Young LLP pertaining to such financial
statements (to the extent covered by consents filed with the Securities and
Exchange Commission) given upon the authority of such firm as experts in
accounting and auditing.
Item 6. Indemnification of Directors and Officers.
-----------------------------------------
Under Section 145 of the General Corporation Law of the State of
Delaware, as amended, the Company has the power to indemnify directors and
officers under prescribed circumstances and subject to certain limitations
against certain costs and expenses, including attorneys' fees, actually and
reasonably incurred in connection with any action, suit or proceeding, whether
civil, criminal, administrative or investigative, to which any of them is a
party by reason of his or her being a director or officer of the Company if it
is determined that he or she acted in accordance with the applicable standard of
conduct set forth in such statutory provisions.
Article Six of the Company's Certificate of Incorporation provides
indemnification to directors and officers of the Company against all expenses,
liability and loss reasonably incurred as a result of such person's being a
party to, or threatened to be made a party to, any action, suit or proceeding by
reason of the fact that he or she is or was a director or officer of the Company
or is or was serving at the request of the Company as a director, officer,
employee or agent of another enterprise, to the fullest extent authorized by the
General Corporation Law of the State of Delaware. Article Six further permits
the Company to maintain insurance, at its expense, to protect itself and any
such director or officer of the Company or another enterprise against any such
expenses, liability or loss, whether or not the Company would have the power to
indemnify such person against such expenses, liability or loss under the General
Corporation Law of the State of Delaware. The Company has purchased directors'
and officers' liability insurance.
Item 7. Exemption from Registration Claimed.
------------------------------------
Not applicable.
4
<PAGE>
Item 8. Exhibits.
--------
The following Exhibits are filed as part of this Registration Statement:
4.1 U.S. Bioscience, Inc. 1996 Non-Employee Directors Stock Option
Plan (incorporated by reference to Exhibit 10.36 to the Registrant's Annual
Report on Form 10-K filed with the Securities and Exchange Commission on
March 21, 1997)
4.2 U.S. Bioscience, Inc. Non-Executive Stock Option Plan
4.3 U.S. Bioscience, Inc. 1992 Stock Option Plan
5 Opinion of Wolf, Block, Schorr and Solis-Cohen
23.1 Consent of Ernst & Young LLP
23.2 Consent of Wolf, Block, Schorr and Solis-Cohen (contained in
Exhibit 5)
24 Power of Attorney (contained on signature page in Part II of the
Registration Statement)
Item 9. Undertakings.
------------
The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a
5
<PAGE>
post-effective amendment by those paragraphs is contained in periodic reports
filed by the registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
2. That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
SIGNATURES AND POWER OF ATTORNEY
--------------------------------
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form
6
<PAGE>
S-8 and has duly caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the Borough of West
Conshohocken, Commonwealth of Pennsylvania on May 9, 1997.
U.S. BIOSCIENCE, INC.
By: /s/ Robert I. Kriebel
---------------------------
Robert I. Kriebel
Executive Vice President,
Chief Financial Officer and
Treasurer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Philip S. Schein, M.D., Robert I. Kriebel and
Martha E. Manning and each of them, such person's true and lawful attorneys-in-
fact and agents, with full power of substitution and resubstitution, for such
person and in such person's name, place and stead, in any and all capacities, to
sign any and all amendments to this Registration Statement, including post-
effective amendments, and to file the same with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be lawfully done in connection with any such filing, as fully as such person
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Philip S. Schein Chairman of the Board and May 9, 1997
- -----------------------
Philip S. Schein, M.D. Chief Executive Officer
(Principal Executive
Officer)
/s/ C. Boyd Clarke President and Chief May 9, 1997
- -----------------------
C. Boyd Clarke Operating Officer and
Director
7
<PAGE>
/s/ Robert I. Kriebel Executive Vice President, May 9, 1997
- -----------------------
Robert I. Kriebel Chief Financial Officer,
Treasurer and Director
(Principal Financial Officer)
/s/ Paul Calabresi Director May 9, 1997
- -----------------------
Paul Calabresi
Director
- -----------------------
Robert L. Capizzi, M.D.
/s/Douglas J. MacMaster Director May 9, 1997
- -----------------------
Douglas J. MacMaster, Jr.
/s/ Allen Misher Director May 9, 1997
- -----------------------
Allen Misher, Ph.D.
/s/ Ellen V. Sigal Director May 9, 1997
- -----------------------
Ellen V. Sigal, Ph.D.
/s/ Betsey Wright Director May 9, 1997
- -----------------------
Betsey Wright
/s/ Mark R. Bausinger Vice President May 9, 1997
- -----------------------
Mark R. Bausinger (Principal Accounting Officer)
8
<PAGE>
U.S. BIOSCIENCE, INC.
REGISTRATION STATEMENT ON FORM S-8
<TABLE>
<CAPTION>
EXHIBIT INDEX
-------------
Exhibit No. Page
- ----------- ----
<S> <C> <C>
4.1 U.S. Bioscience, Inc. 1996 Non-Employee Directors Stock Option
Plan (incorporated by reference to Exhibit 10.36 to the
Registrant's Annual Report on Form 10-K filed with the Securities
and Exchange Commission on March 21, 1997)
4.2 U.S. Bioscience, Inc. Non-Executive Stock Option Plan.............
4.3 U.S. Bioscience, Inc. 1992 Stock Option Plan......................
5 Opinion of Wolf, Block, Schorr and Solis-Cohen....................
23.1 Consent of Ernst & Young LLP......................................
23.2 Consent of Wolf, Block, Schorr and
Solis-Cohen (contained in Exhibit 5)
24 Power of Attorney (contained on signature page in Part II of the
Registration Statement)
</TABLE>
<PAGE>
Adopted 5/26/94 EXHIBIT 4.2
Amended 2/20/96
Restated as of 9/26/96
(reflecting post-split numbers
resulting from reverse stock
split approved 4/22/96)
Amended 4/24/97
U.S. Bioscience, Inc.
NON-EXECUTIVE STOCK OPTION PLAN
-------------------------------
1. Purpose. U.S. Bioscience, Inc. (the "Company") hereby adopts the
-------
U.S. Bioscience, Inc. Non-Executive Stock Option Plan (the "Plan"). The Plan is
intended to recognize the contributions made to the Company by employees of the
Company or any Affiliate (as defined below) (including employees who are members
of the Board of Directors of any Affiliate but who are not directors or
Executive Officers (as hereinafter defined) of the Company), and certain
consultants or advisors to the Company or an Affiliate, to provide such persons
with additional incentive to devote themselves to the future success of the
Company or an Affiliate, and to improve the ability of the Company or an
Affiliate to attract, retain, and motivate individuals upon whom the Company's
sustained growth and financial success depend, by providing such persons with an
opportunity to acquire or increase their proprietary interest in the Company
through receipt of rights to acquire the Company's Common Stock, par value $.01
per Share (the "Common Stock"). Options granted pursuant to the Plan shall not
be options intended to qualify as "incentive stock options" within the meaning
of Section 422 of the Code (as hereinafter defined).
<PAGE>
Options granted pursuant to the Plan may not be granted to Executive Officers or
non-employee members of the Company's Board of Directors. Notwithstanding the
foregoing, an option may be
granted hereunder for consulting services to a consultant who is also a member
of the Company's Board of Directors.
2. Definitions. Unless the context clearly indicates otherwise, the
-----------
following terms shall have the following meanings:
(a) "Affiliate" means a corporation which is a parent corporation
or a subsidiary corporation with respect to the Company within the meaning of
Section 424(e) or (f) of the Code.
(b) "Board of Directors" or "Board" means the Board of Directors
of the Company.
(c) "Change of Control" shall have the meaning as set forth in
Section 10 of the Plan .
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" shall have the meaning set forth in Section 3 of
the Plan.
(f) "Company" means U.S. Bioscience, Inc. a Delaware corporation.
(g) "Disability" shall have the meaning set forth in Section
22(e)(3) of the Code.
(h) "Executive Officers" means persons who are "officers" within
the meaning of Rule 16a-1(f) promulgated under
2
<PAGE>
the Securities Exchange Act of 1934, as amended, or any successor rule.
(i) "Fair Market Value" shall have the meaning set forth in
Subsection 8(b) of the Plan.
(j) "Non-qualified Stock Option" means an Option granted under the
Plan which is not intended to qualify, or otherwise does not qualify, as an
"incentive stock option" within the meaning of Section 422(b) of the Code.
(k) "Option" means a Non-qualified Stock Option granted under the
Plan.
(l) "Optionee" means a person to whom an Option has been granted
under the Plan, which Option has not been exercised and has not expired or
terminated.
(m) "Option Document" means the document described in Section 8 of
the Plan, as applicable, which sets forth the terms and conditions of each grant
of Options.
(n) "Option Price" means the price at which Shares may be
purchased upon exercise of an Option, as calculated pursuant to Subsection 8(b)
of the Plan, as applicable.
(o) "Shares" means the shares of Common Stock of the Company which
are the subject of Options.
3. Administration of the Plan. The Plan shall be administered by the
--------------------------
Board of Directors of the Company; however, the Board of Directors may designate
a committee composed of two or more of its directors to operate and administer
the Plan in its stead. Any such committee designated by the Board of
3
<PAGE>
Directors, and the Board of Directors itself in its administrative capacity with
respect to the Plan, is referred to as the "Committee."
(a) Meetings. The Committee shall hold meetings at such times and
--------
places as it may determine. Acts approved at a meeting by a majority of the
members of the Committee or acts approved in writing by the unanimous consent of
the members of the Committee shall be the valid acts of the Committee.
(b) Grants. The Committee shall from time to time at its discretion
------
direct the Company to grant Options pursuant to the terms of the Plan. The
Committee shall have plenary authority to (i) determine the Optionees to whom,
the times at which, and the price at which Options shall be granted, (ii)
determine the type of Option to be granted and the number of Shares subject
thereto, and (iii) approve the form and terms and conditions of the Option
Documents; all subject, however, to the express provisions of the Plan. In
making such determinations, the Committee may take into account the nature of
the Optionee's services and responsibilities, the Optionee's present and
potential contribution to the Company's success and such other factors as it may
deem relevant. The interpretation and construction by the Committee of any
provisions of the Plan or of any Option granted under it shall be final, binding
and conclusive.
-4-
<PAGE>
(c) Exculpation. No member of the Board of Directors shall be
------------
personally liable for monetary damages for any action taken or any failure to
take any action in connection with the administration of the Plan or the
granting of Options under the Plan, provided that this Subsection 3(c) shall not
apply to (i) any breach of such member's duty of loyalty to the Company or its
stockholders, (ii) acts or omissions not in good faith or involving intentional
misconduct or a knowing violation of law, (iii) acts or omissions that would
result in liability under Section 174 of the General Corporation Law of the
State of Delaware, as amended, and (iv) any transaction from which the member
derived an improper personal benefit.
(d) Indemnification. Service on the Committee shall constitute
---------------
service as a member of the Board of Directors of the Company. Each member of
the Committee shall be entitled without further act on his or her part to
indemnity from the Company to the fullest extent provided by applicable law and
the Company's Certificate of Incorporation and/or By-laws in connection with or
arising out of any action, suit or proceeding with respect to the administration
of the Plan or the granting of Options thereunder in which he or she may be
involved by reason of his or her being or having been a member of the Committee,
whether or not he or she continues to be such member of the Committee at the
time of the action, suit or proceeding.
-5-
<PAGE>
(e) Limitations on Grants of Options to Consultants and Advisors.
------------------------------------------------------------
With respect to the grant of Options to consultants or advisors, bona fide
services shall be rendered by consultants or advisors and such services must not
be in connection with the offer or sale of securities in a capital-raising
transaction.
4. Grants under the Plan. Grants under the Plan must be in the form
---------------------
of a Non-qualified Stock Option.
5. Eligibility. All employees of the Company or an Affiliate (other
-----------
than Executive Officers), and consultants or advisors to the Company or an
Affiliate who satisfy the requirements set forth in Subsection 3(e), shall be
eligible to receive Options hereunder. The Committee, in its sole discretion,
shall determine whether an individual is eligible to receive Options under the
Plan.
6. Shares Subject to Plan. The aggregate maximum number of Shares
----------------------
for which Options may be granted pursuant to the Plan is Two Million Two Hundred
Fifty Thousand (2,250,000), subject to adjustment as provided in Section 11 of
the Plan. The Shares shall be issued from authorized and unissued Common Stock
or Common Stock held in or hereafter acquired for the treasury of the Company.
If an Option terminates or expires without having been fully exercised for any
reason, the Shares for which the Option was not exercised may again be the
subject of one or more Options granted pursuant to the Plan.
-6-
<PAGE>
7. Term of the Plan. The Plan is effective as of May 26, 1994, the
----------------
date on which it was adopted by the Board of Directors.
No Option may be granted under the Plan after May 25, 2004.
8. Option Documents and Terms. Each Option granted under the Plan
--------------------------
shall be a Non-qualified Stock Option. Options granted pursuant to the Plan
shall be evidenced by the Option Documents in such form as the Committee shall
from time to time approve, which Option Documents shall comply with and be
subject to the following terms and conditions and such other terms and
conditions as the Committee shall from time to time require which are not
inconsistent with the terms of the Plan.
(a) Number of Option Shares. Each Option Document shall state
-----------------------
the number of Shares to which it pertains.
(b) Option Price. Each Option Document shall state the Option
------------
Price which may be less than, equal to, or greater than the Fair Market Value of
the Shares on the date the Option is granted. If the Common Stock is traded in a
public market, then the Fair Market Value per share shall be, if the Common
Stock is listed on a national securities exchange or included in the NASDAQ
National Market System, the last reported sale price thereof on the relevant
date, or, if the Common Stock is not so listed or included, the mean between the
last reported "bid" and "asked" prices thereof on the relevant date, as reported
on NASDAQ or, if not so reported, as reported by the National Daily Quotation
Bureau, Inc. or as reported in a
-7-
<PAGE>
customary financial reporting service, as applicable and as the Committee
determines.
(c) Exercise. No Option shall be deemed to have been exercised prior
--------
to the receipt by the Company of written notice of such exercise and payment in
full of the Option Price for the Shares to be purchased. Each such notice shall
specify the number of Shares to be purchased and shall (unless the Shares are
covered by a then current registration statement or a Notification under
Regulation A under the Securities Act of 1933, as amended (the "Act")), contain
the Optionee's acknowledgment in form and substance satisfactory to the Company
that (a) such Shares are being purchased for investment and not for distribution
or resale (other than a distribution or resale which, in the opinion of counsel
satisfactory to the Company, may be made without violating the registration
provisions of the Act), (b) the Optionee has been advised and understands that
(i) the Shares have not been registered under the Act and are "restricted
securities" within the meaning of Rule 144 under the Act and are subject to
restrictions on transfer and (ii) the Company is under no obligation to register
the Shares under the Act or to take any action which would make available to the
Optionee any exemption from such registration, (c) such Shares may not be
transferred without compliance with all applicable federal and state securities
laws, and (d) an appropriate legend referring to the foregoing restrictions on
transfer and any other
-8-
<PAGE>
restrictions imposed under the Option Documents may be endorsed on the
certificates. Notwithstanding the foregoing, if the Company determines that
issuance of Shares should be delayed pending (A) registration under federal or
state securities laws, (B) the receipt of an opinion of counsel acceptable to
the Company that an appropriate exemption from such registration is available,
(C) the listing or inclusion of the Shares on any securities exchange or an
automated quotation system or (D) the consent or approval of any governmental
regulatory body whose consent or approval is necessary in connection with the
issuance of such Shares, the Company may defer exercise of any Option granted
hereunder until any of the events described in this Subsection 8(c) has
occurred.
(d) Medium of Payment. An Optionee shall pay for Shares (i) in cash,
-----------------
(ii) by certified or cashier's check payable to the order of the Company, or
(iii) by such other mode of payment as the Committee may approve, including
payment through a broker in accordance with procedures permitted by Regulation T
of the Federal Reserve Board. Without limiting the foregoing, the Committee may
provide in an Option Document that payment may be made in whole or in part in
shares of the Company's Common Stock. If payment is made in whole or in part in
shares of the Company's Common Stock, then the Optionee shall deliver to the
Company certificates registered in the name of such Optionee representing the
shares owned by such Optionee, free of all liens, claims and
-9-
<PAGE>
encumbrances of every kind and having an aggregate Fair Market Value on the date
of delivery that is at least as great as the Option Price of the Shares (or
relevant portion thereof) with respect to which such Option is to be exercised
by the payment in shares of Common Stock, accompanied by stock powers duly
endorsed in blank by the Optionee. In the event that certificates for shares of
the Company's Common Stock delivered to the Company represent a number of shares
in excess of the number of shares required to make payment for the Option Price
of the Shares (or relevant portion thereof) with respect to which such Option is
to be exercised by payment in shares of Common Stock, the stock certificate
issued to the Optionee shall represent (i) the Shares in respect of which
payment is made, and (ii) such excess number of shares. Notwithstanding the
foregoing, the Committee may impose from time to time such limitations and
prohibitions on the use of shares of the Common Stock to exercise an Option as
it deems appropriate.
(e) Termination of Options.
----------------------
(i) No Option shall be exercisable after the first to occur of
the following:
(A) Expiration of the Option term specified in the Option
Document, which shall not occur after ten years from the date of grant.
(B) Expiration of three months from the date the Optionee's
employment or service with the Company or its
-10-
<PAGE>
Affiliates terminates for any reason other than Disability or death or as
otherwise specified in Subsection 8(e)(i)(D) or 8(e)(i)(E) below;
(C) Expiration of one year from the date such employment or
service with the Company or its Affiliates terminates due to the Optionee's
Disability or death;
(D) A finding by the Committee, after full consideration of
the facts presented on behalf of both the Company and the Optionee, that the
Optionee has breached his or her employment or service contract with the Company
or an Affiliate, or has been engaged in disloyalty to the Company or an
Affiliate, including, without limitation, fraud, embezzlement, theft, commission
of a felony or proven dishonesty in the course of his employment or service, or
has disclosed trade secrets or confidential information of the Company or an
Affiliate. In such event, in addition to immediate termination of the Option,
the Optionee shall automatically forfeit all Shares for which the Company has
not yet delivered the share certificates upon refund by the Company of the
Option Price. Notwithstanding anything herein to the contrary, the Company may
withhold delivery of share certificates pending the resolution of any inquiry
that could lead to a finding resulting in a forfeiture; or
(E) The date, if any, set by the Board of Directors as an
accelerated expiration date in the event of the liquidation or dissolution of
the Company.
-11-
<PAGE>
With respect to Subsections 8(e)(i)(B) and (C) above, the only
Options which may be exercised during the three-month or one-year period, as the
case may be, following the date of Optionee's termination of employment or
service with the Company or its Affiliates are Options which were exercisable on
the last date of such employment or service and not Options which, if the
Optionee were still employed or rendering service during such three-month or
one-year period, would become exercisable, unless the Option Document
specifically provides to the contrary.
(ii) Notwithstanding the foregoing, the Committee may extend the
period during which all or any portion of an Option may be exercised to a date
no later than the Option term specified in the Option Document pursuant to
Subsection 8(e)(i)(A). The terms of an executive severance agreement or other
agreement between the Company and an Optionee, approved by the Committee,
whether entered into prior or subsequent to the grant of an Option, which
provide for Option exercise dates later than those set forth in Subsection
8(e)(i) but permitted by this Subsection 8(e)(ii) shall be deemed to be Option
terms approved by the Committee and consented to by the Optionee.
(f) Transfers. An Option granted under the Plan may not be transferred,
---------
except by will or by the laws of descent and distribution, except as follows: If
the terms of the Option specifically so permit, an Option may be transferred by
the
-12-
<PAGE>
Optionee by bona fide gift, with no consideration for the transfer, to a lineal
descendent, sibling, lineal descendent of a sibling, in each case whether by
blood or adoption, a spouse or former spouse (collectively "family members"), to
a trust for the benefit of one or more family members or to a partnership in
which family members are the only partners. Notwithstanding the foregoing, an
Option may be transferred pursuant to the terms of a "qualified domestic
relations order," within the meaning of Sections 401(a)(13) and 414(p) of the
Code or within the meaning of Title I of the Employee Retirement Income Security
Act of 1974, as amended.
(g) Other Provisions. Subject to the provisions of the Plan, the
----------------
Option Documents shall contain such other provisions including, without
limitation, provisions authorizing the Committee to accelerate the
exercisability of all or any portion of an Option granted pursuant to the Plan,
additional restrictions upon the exercise of the Option or additional
limitations upon the term of the Option, as the Committee shall deem advisable.
9. Amendment of Option Documents. Subject to the provisions of the
-----------------------------
Plan, the Committee shall have the right to amend Option Documents issued to an
Optionee, subject to the Optionee's consent if such amendment is not favorable
to the Optionee, except that the consent of the Optionee shall not be
-13-
<PAGE>
required for any amendment made under Subsection 8(e)(i)(E) or Section 10 of the
Plan, as applicable.
10. Change in Control. Notwithstanding anything to the contrary in
-----------------
any Option Document, upon a Change in Control, the exercise date of all Options
then outstanding under the Plan and held by Optionees who are then employees of
the Company or an Affiliate, or members of the Board of Directors of an
Affiliate, shall, and in the case of consultants and advisors to the Company or
an Affiliate shall (unless the exercisability of the Options held by such an
Optionee is subject to some condition other than the lapse of time (including
within the term "lapse of time" the provisions of Section 8(e) of the Plan)),
automatically accelerate to the date of the Change of Control. Any amendment of
this Section 10 which diminishes the rights of Optionees shall not be effective
with respect to Options outstanding at the time of adoption of such amendment,
whether or not such outstanding Options are then exercisable.
A "Change in Control" shall be deemed to have occurred if: (i) there
has been a change in control of a nature that would be required, if the Company
would be subject to reporting requirements under the Securities Exchange Act of
1934 (the "Exchange Act"), to be reported in response to Item 6(e) of Schedule
14A of Regulation 14A promulgated under the Exchange Act or Item 1 of Form 8-K
promulgated under the Exchange Act; or (ii) any person, entity or group (within
the meaning of
-14-
<PAGE>
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act), other than any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any subsidiary of the Company, is or becomes the beneficial owner, directly
or indirectly, of securities of the Company representing 30% or more of the
combined voting power in the election of directors; or (iii) during any period
of two consecutive years, individuals who at the beginning of such period
constitute the Board cease for any reason to have authority to cast at least a
majority of the votes which all directors on the Board are entitled to cast,
unless the election, or the nomination for election by the Company's
stockholders, of each new director was approved by a vote of at least two-thirds
of the votes entitled to be cast by the directors then still in office who were
directors at the beginning of the period.
11. Adjustments on Changes in Capitalization. The aggregate number
----------------------------------------
of Shares and class of shares as to which Options may be granted hereunder, the
number and class or classes of shares covered by each outstanding Option and the
Option Price thereof shall be appropriately adjusted in the event of a stock
dividend, stock split, recapitalization or other change in the number or class
of issued and outstanding equity securities of the Company resulting from a
subdivision or consolidation of the Common Stock and/or, if appropriate, other
outstanding equity securities or a recapitalization or other capital adjustment
(not
-15-
<PAGE>
including the issuance of Common Stock on the conversion of other securities of
the Company which are convertible into Common Stock) affecting the Common Stock
which is effected without receipt of consideration by the Company. The
Committee shall have authority to determine the adjustments to be made under
this Section, and any such determination by the Committee shall be final,
binding and conclusive; provided, however, that no adjustment shall be made
which will cause an ISO to lose its status as such without the consent of the
Optionee, except for adjustments made pursuant to Section 10 hereof.
12. Amendment of the Plan. The Board of Directors of the Company may
---------------------
amend the Plan from time to time in such manner as it may deem advisable. No
amendment to the Plan shall adversely affect any outstanding Option, however,
without the consent of the Optionee that holds such Option.
13. No Commitment to Retain. The grant of an Option pursuant to the
------------------------
Plan shall not be construed to imply or to constitute evidence of any agreement,
express or implied, on the part of the Company or any Affiliate to retain the
Optionee in the employ of the Company or an Affiliate and/or as a member of the
Company's Board of Directors or in any other capacity.
14. Withholding of Taxes. Whenever the Company proposes or is
--------------------
required to deliver or transfer Shares in connection with the exercise of an
Option, the Company shall have the right to (a) require the recipient to remit
or otherwise
-16-
<PAGE>
make available to the Company an amount sufficient to satisfy any federal, state
and/or local withholding tax requirements prior to the delivery or transfer of
any certificate or certificates for such Shares or (b) take whatever other
action it deems necessary to protect its interests with respect to tax
liabilities. The Company's obligation to make any delivery or transfer of
Shares shall be conditioned on the Optionee's compliance, to the Company's
satisfaction, with any withholding requirement.
-17-
<PAGE>
EXHIBIT 4.3
Adopted 4/15/92
Amended 12/16/92
Amended 3/1/94
Amended 5/26/94
Amended 4/22/96
(by reverse stock split)
Amended 9/26/96
Restated as of 9/26/96
(showing amendments and post-split
numbers and deleting certain
inoperative terms)
Amended 2/27/97
U.S. Bioscience, Inc.
1992 STOCK OPTION PLAN
----------------------
1. Purpose. U.S. Bioscience, Inc. (the "Company") hereby adopts the
-------
U.S. Bioscience, Inc. 1992 Stock Option Plan (the "Plan"). The Plan is intended
to recognize the contributions made to the Company by employees (including
employees who are members of the Board of Directors) of the Company or any
Affiliate (as defined below) and certain consultants or advisors to the Company
or an Affiliate, to provide such persons with additional incentive to devote
themselves to the future success of the Company or an Affiliate, and to improve
the ability of the Company or an Affiliate to attract, retain, and motivate
individuals upon whom the Company's sustained growth and financial success
depend, by providing such persons with an opportunity to acquire or increase
their proprietary interest in the Company through receipt of rights to acquire
the Company's Common Stock, par value $.01 per Share (the "Common Stock"). In
addition, the Plan is intended as an additional incentive to certain directors
of the Company who are
<PAGE>
not employees of the Company or an Affiliate to serve on the Board of Directors
and to devote themselves to the future success of the Company by providing them
with an opportunity to acquire or increase their proprietary interest in the
Company through the receipt of Options to acquire Common Stock.
2. Definitions. Unless the context clearly indicates otherwise, the
-----------
following terms shall have the following meanings:
(a) "Affiliate" means a corporation which is a parent corporation
or a subsidiary corporation with respect to the Company within the meaning of
Section 424(e) or (f) of the Code.
(b) "Board of Directors" or "Board" means the Board of Directors
of the Company.
(c) "Change of Control" shall have the meaning as set forth in
Section 10 of the Plan.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" shall have the meaning set forth in Section 3 of
the Plan.
(f) "Company" means U.S. Bioscience, Inc. a Delaware corporation.
(g) "Disability" shall have the meaning set forth in Section
22(e)(3) of the Code.
(h) "Eligible Non-employee Directors" means the Non-employee
Directors other than those members who serve on the Board of Directors as a
result of their designation by Marion
2
<PAGE>
Merrill Dow, Inc. or U.S. Healthcare Financial Services, Inc., as nominees for
election to the Board of Directors.
(i) "Fair Market Value" shall have the meaning set forth in Subsection
8(b) of the Plan.
(j) "ISO" means an Option granted under the Plan which is intended to
qualify as an "incentive stock option" within the meaning of Section 422 of the
Code.
(k) "Non-employee Director" means a member of the Board of Directors
who is not an employee of the Company or an Affiliate.
(l) "Non-qualified Stock Option" means an Option granted under the
Plan which is not intended to qualify, or otherwise does not qualify, as an
"incentive stock option" within the meaning of Section 422(b) of the Code.
(m) "Option" means either an ISO or a Non-qualified Stock Option
granted under the Plan.
(n) "Optionee" means a person to whom an Option has been granted under
the Plan, which Option has not been exercised and has not expired or terminated.
(o) "Option Document" means the document described in Section 8 or
Section 9 of the Plan, as applicable, which sets forth the terms and conditions
of each grant of Options.
(p) "Option Price" means the price at which Shares may be purchased
upon exercise of an Option, as calculated
3
<PAGE>
pursuant to Subsection 8(b) or Subsection 9(a) of the Plan, as applicable.
(q) "Rule 16b-3" means Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, as amended.
(r) "Shares" means the shares of Common Stock of the Company which
are the subject of Options.
3. Administration of the Plan. The Plan shall be administered by the
--------------------------
Board of Directors of the Company; however, the Board of Directors may (i)
designate a committee composed of two or more of its Non-employee Directors to
operate and administer the Plan in its stead, (ii) designate two committees to
operate and administer the Plan in its stead, one of such committees composed of
two or more of its Non-employee Directors to operate and administer the Plan
with respect to the Company's "Principal Officers" (as defined below), and the
other such committee composed of two or more directors (which may include
directors who are also employees of the Company) to operate and administer the
Plan with respect to persons other than Principal Officers and Eligible Non-
employee Directors or (iii) designate only one of the two committees referred to
in subparagraph (ii) and itself operate and administer the Plan with respect to
persons not within the jurisdiction of such committee. Any of such committees
designated by the Board of Directors, and the Board of Directors itself in its
administrative capacity with respect to the Plan, is referred to as the
"Committee." With respect to Eligible Non-employee Directors, who are to be
granted
4
<PAGE>
Options in accordance with the provisions of Section 9, the directors to whom
Options will be granted, the timing of grants of Options, the price at which
Shares may be purchased and the number of Shares covered by Options granted to
each Optionee shall be as specifically set forth herein, and subject to the
foregoing and the other provisions set forth herein, the Plan, as it pertains to
Eligible Non-employee Directors, shall be administered by the Board of
Directors. As used herein, the term "Principal Officers" means the Chairman of
the Board of Directors (if the Chairman of the Board of Directors is a payroll
employee), President, Executive Vice President, Senior Vice President, Vice
President, Treasurer, and any other person who is an "officer" within the
meaning of Rule 16a-1(f) promulgated under the Securities Exchange Act of 1934,
as amended, or any successor rule.
(a) Meetings. The Committee shall hold meetings at such times and
--------
places as it may determine. Acts approved at a meeting by a majority of the
members of the Committee or acts approved in writing by the unanimous consent of
the members of the Committee shall be the valid acts of the Committee.
(b) Grants. Except with respect to Options granted to Eligible Non-
------
employee Directors pursuant to Section 9 of the Plan, the Committee shall from
time to time at its discretion direct the Company to grant Options pursuant to
the terms of the Plan. The Committee shall have plenary authority to (i)
determine the Optionees to whom, the times at which, and the
5
<PAGE>
price at which Options shall be granted, (ii) determine the type of Option to be
granted and the number of Shares subject thereto, and (iii) approve the form and
terms and conditions of the Option Documents; all subject, however, to the
express provisions of the Plan. In making such determinations, the Committee
may take into account the nature of the Optionee's services and
responsibilities, the Optionee's present and potential contribution to the
Company's success and such other factors as it may deem relevant.
Notwithstanding the foregoing, grants of Options to Eligible Non-employee
Directors shall be made only in accordance with Section 9 of the Plan. The
interpretation and construction by the Committee of any provisions of the Plan
or of any Option granted under it shall be final, binding and conclusive.
(c) Exculpation. No member of the Board of Directors shall be
------------
personally liable for monetary damages for any action taken or any failure to
take any action in connection with the administration of the Plan or the
granting of Options under the Plan, provided that this Subsection 3(c) shall not
apply to (i) any breach of such member's duty of loyalty to the Company or its
stockholders, (ii) acts or omissions not in good faith or involving intentional
misconduct or a knowing violation of law, (iii) acts or omissions that would
result in liability under Section 174 of the General Corporation Law of the
State of Delaware, as amended, and (iv) any transaction from which the member
derived an improper personal benefit.
6
<PAGE>
(d) Indemnification. Service on the Committee shall constitute
---------------
service as a member of the Board of Directors of the Company. Each member of
the Committee shall be entitled without further act on his or her part to
indemnity from the Company to the fullest extent provided by applicable law and
the Company's Certificate of Incorporation and/or By-laws in connection with or
arising out of any action, suit or proceeding with respect to the administration
of the Plan or the granting of Options thereunder in which he or she may be
involved by reason of his or her being or having been a member of the Committee,
whether or not he or she continues to be such member of the Committee at the
time of the action, suit or proceeding.
(e) Limitations on Grants of Options to Consultants and Advisors.
------------------------------------------------------------
With respect to the grant of Options to consultants or advisors, bona fide
services shall be rendered by consultants or advisors and such services must not
be in connection with the offer or sale of securities in a capital-raising
transaction.
4. Grants under the Plan. Grants under the Plan may be in the form
---------------------
of a Non-qualified Stock Option, an ISO or a combination thereof, at the
discretion of the Committee.
5. Eligibility. All employees of the Company or an Affiliate
-----------
(including employees who are members of the Board of Directors), consultants or
advisors to the Company or an Affiliate who satisfy the requirements set forth
in Subsection 3(e), and all Eligible Non-employee Directors shall be
7
<PAGE>
eligible to receive Options hereunder. However, Eligible Non-employee Directors
may receive Options only pursuant to Section 9. The Committee, in its sole
discretion, shall determine whether an individual is eligible to receive Options
under the Plan.
6. Shares Subject to Plan. The aggregate maximum number of Shares
----------------------
for which Options may be granted pursuant to the Plan is Two Million Eight
Hundred Fifty Thousand (2,850,000), subject to adjustment as provided in Section
11 of the Plan. The Shares shall be issued from authorized and unissued Common
Stock or Common Stock held in or hereafter acquired for the treasury of the
Company. If an Option terminates or expires without having been fully exercised
for any reason, the Shares for which the Option was not exercised may again be
the subject of one or more Options granted pursuant to the Plan.
7. Term of the Plan. The Plan is effective as of April 15, 1992, the
----------------
date on which it was adopted by the Board of Directors (the stockholders having
duly approved the Plan on or before April 14, 1993). With respect to the
initial 1,000,000 Shares for which Options may be granted pursuant to the Plan,
no Option may be granted under the Plan after April 14, 2002. With respect to
the amendment to Section 6 of the Plan on March 1, 1994 which increased the
number of Shares for which Options may be granted pursuant to the Plan from One
Million Shares to One Million Seven Hundred Fifty Thousand Shares, such
amendment is effective as of March 1, 1994, the date on which it was adopted
8
<PAGE>
by the Company's Board of Directors (the stockholders having duly approved such
amendment on or before February 28, 1995); no Options may be granted under the
Plan for Shares authorized by such amendment after February 28, 2004. With
respect to the amendment to Section 6 of the Plan on February 27, 1997 which
increased the number of Shares for which Options may be granted pursuant to the
Plan from One Million Seven Hundred Fifty Thousand Shares to Two Million Eight
Hundred Fifty Thousand Shares, such amendment is effective as of February 27,
1997, the date on which it was adopted by the Company's Board of Directors,
subject to approval of such amendment, on or before February 26, 1998, by a
majority of the votes cast at a duly convened meeting of the stockholders at
which a quorum representing a majority of all outstanding voting stock of the
Company is, either in person or by proxy, present when the meeting is convened.
If such amendment to the 1992 Plan is not so approved on or before February 26,
1998, all Options granted under the Plan for Shares authorized by such amendment
shall be null and void; no Options may be granted under the Plan for Shares
authorized by such amendment after February 26, 2007.
8. Option Documents and Terms. Each Option granted under the Plan
--------------------------
shall be a Non-qualified Stock Option unless the Option shall be specifically
designated at the time of grant to be an ISO for Federal income tax purposes.
If any Option designated as an ISO is determined for any reason not to qualify
as an incentive stock option within the meaning of Section 422 of
9
<PAGE>
the Code, such Option shall be treated as a Non-qualified Stock Option for all
purposes under the provisions of the Plan. Options granted pursuant to the Plan
shall be evidenced by the Option Documents in such form as the Committee shall
from time to time approve, which Option Documents shall comply with and be
subject to the following terms and conditions and such other terms and
conditions as the Committee shall from time to time require which are not
inconsistent with the terms of the Plan. However, the provisions of this Section
8 shall not be applicable to Options granted to Eligible Non-employee Directors,
except as otherwise provided in Subsection 9(c).
(a) Number of Option Shares. Each Option Document shall state the
-----------------------
number of Shares to which it pertains. An Optionee may receive more than one
Option, which may include Options which are intended to be ISO's and Options
which are not intended to be ISO's, but only on the terms and subject to the
conditions and restrictions of the Plan. No Optionee may receive in any one
year option grants for 300,000 or more Shares (such maximum number to be
appropriately adjusted in the manner described in Section 11 of the Plan); the
foregoing shall not limit the number of Options which become exercisable in any
one year by reason of Option grants made in earlier years.
(b) Option Price. Each Option Document shall state the Option Price
------------
which, for a Non-qualified Stock Option, may be less than, equal to, or greater
than the Fair Market Value of the Shares on the date the Option is granted and,
for an ISO,
10
<PAGE>
shall be at least 100% of the Fair Market Value of the Shares on the date the
Option is granted; provided, however, that if an ISO is granted to an Optionee
who then owns, directly or by attribution under Section 424(d) of the Code,
shares possessing more than ten percent of the total combined voting power of
all classes of stock of the Company or an Affiliate, then the Option Price shall
be at least 110% of the Fair Market Value of the Shares on the date the Option
is granted. If the Common Stock is traded in a public market, then the Fair
Market Value per share shall be, if the Common Stock is listed on a national
securities exchange or included in the NASDAQ National Market System, the last
reported sale price thereof on the relevant date, or, if the Common Stock is not
so listed or included, the mean between the last reported "bid" and "asked"
prices thereof on the relevant date, as reported on NASDAQ or, if not so
reported, as reported by the National Daily Quotation Bureau, Inc. or as
reported in a customary financial reporting service, as applicable and as the
Committee determines.
(c) Exercise. No Option shall be deemed to have been exercised prior
--------
to the receipt by the Company of written notice of such exercise and payment in
full of the Option Price for the Shares to be purchased. Each such notice shall
specify the number of Shares to be purchased and shall (unless the Shares are
covered by a then current registration statement or a Notification under
Regulation A under the Securities Act of 1933, as amended (the "Act")), contain
the Optionee's acknowledgment in
11
<PAGE>
form and substance satisfactory to the Company that (a) such Shares are being
purchased for investment and not for distribution or resale (other than a
distribution or resale which, in the opinion of counsel satisfactory to the
Company, may be made without violating the registration provisions of the Act),
(b) the Optionee has been advised and understands that (i) the Shares have not
been registered under the Act and are "restricted securities" within the meaning
of Rule 144 under the Act and are subject to restrictions on transfer and (ii)
the Company is under no obligation to register the Shares under the Act or to
take any action which would make available to the Optionee any exemption from
such registration, (c) such Shares may not be transferred without compliance
with all applicable federal and state securities laws, and (d) an appropriate
legend referring to the foregoing restrictions on transfer and any other
restrictions imposed under the Option Documents may be endorsed on the
certificates. Notwithstanding the foregoing, if the Company determines that
issuance of Shares should be delayed pending (A) registration under federal or
state securities laws, (B) the receipt of an opinion of counsel acceptable to
the Company that an appropriate exemption from such registration is available,
(C) the listing or inclusion of the Shares on any securities exchange or an
automated quotation system or (D) the consent or approval of any governmental
regulatory body whose consent or approval is necessary in connection with the
issuance of such Shares, the Company may defer exercise of any Option
12
<PAGE>
granted hereunder until any of the events described in this Subsection 8(c) has
occurred.
(d) Medium of Payment. An Optionee shall pay for Shares (i) in cash,
-----------------
(ii) by certified or cashier's check payable to the order of the Company, or
(iii) by such other mode of payment as the Committee may approve, including
payment through a broker in accordance with procedures permitted by Regulation T
of the Federal Reserve Board. Without limiting the foregoing, the Committee may
provide (and in the case of Options granted to Eligible Non-employee Directors,
shall provide) in an Option Document that payment may be made in whole or in
part in shares of the Company's Common Stock. If payment is made in whole or in
part in shares of the Company's Common Stock, then the Optionee shall deliver to
the Company certificates registered in the name of such Optionee representing
the shares owned by such Optionee, free of all liens, claims and encumbrances of
every kind and having an aggregate Fair Market Value on the date of delivery
that is at least as great as the Option Price of the Shares (or relevant portion
thereof) with respect to which such Option is to be exercised by the payment in
shares of Common Stock, accompanied by stock powers duly endorsed in blank by
the Optionee. In the event that certificates for shares of the Company's Common
Stock delivered to the Company represent a number of shares in excess of the
number of shares required to make payment for the Option Price of the Shares (or
relevant portion thereof) with respect to which such Option is to be
13
<PAGE>
exercised by payment in shares of Common Stock, the stock certificate issued to
the Optionee shall represent (i) the Shares in respect of which payment is made,
and (ii) such excess number of shares. Notwithstanding the foregoing, the
Committee may impose from time to time such limitations and prohibitions on the
use of shares of the Common Stock to exercise an Option as it deems appropriate.
(e) Termination of Options.
----------------------
(i) No Option shall be exercisable after the first to occur of
the following:
(A) Expiration of the Option term specified in the Option
Document, which, in the case of an ISO, shall not occur after (1) ten years from
the date of grant, or (2) five years from the date of grant of an ISO if the
Optionee on the date of grant owns, directly or by attribution under Section
424(d) of the Code, shares possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or of an Affiliate;
(B) Expiration of three months from the date the Optionee's
employment or service with the Company or its Affiliates terminates for any
reason other than Disability or death or as otherwise specified in Subsection
8(e)(i)(D) or 8(e)(i)(E) below;
(C) Expiration of one year from the date such employment or
service with the Company or its Affiliates terminates due to the Optionee's
Disability or death;
14
<PAGE>
(D) A finding by the Committee, after full consideration of the facts
presented on behalf of both the Company and the Optionee, that the Optionee has
breached his or her employment or service contract with the Company or an
Affiliate, or has been engaged in disloyalty to the Company or an Affiliate,
including, without limitation, fraud, embezzlement, theft, commission of a
felony or proven dishonesty in the course of his employment or service, or has
disclosed trade secrets or confidential information of the Company or an
Affiliate. In such event, in addition to immediate termination of the Option,
the Optionee shall automatically forfeit all Shares for which the Company has
not yet delivered the share certificates upon refund by the Company of the
Option Price. Notwithstanding anything herein to the contrary, the Company may
withhold delivery of share certificates pending the resolution of any inquiry
that could lead to a finding resulting in a forfeiture; or
(E) The date, if any, set by the Board of Directors as an accelerated
expiration date in the event of the liquidation or dissolution of the Company.
With respect to Subsections 8(e)(i)(B) and (C) above, the only Options
which may be exercised during the three-month or one-year period, as the case
may be, following the date of Optionee's termination of employment or service
with the Company or its Affiliates are Options which were exercisable on the
last date of such employment or service and not Options which, if the Optionee
were still employed or rendering service
15
<PAGE>
during such three-month or one-year period, would become exercisable, unless the
Option Document specifically provides to the contrary.
(ii) Notwithstanding the foregoing, the Committee may extend the
period during which all or any portion of an Option may be exercised to a date
no later than the Option term specified in the Option Document pursuant to
Subsection 8(e)(i)(A), provided that any change pursuant to this Subsection
8(e)(ii) which would cause an ISO to become a Non-qualified Stock Option may be
made only with the consent of the Optionee. The terms of an executive severance
agreement or other agreement between the Company and an Optionee, approved by
the Committee, whether entered into prior or subsequent to the grant of an
Option, which provide for Option exercise dates later than those set forth in
Subsection 8(e)(i) but permitted by this Subsection 8(e)(ii) shall be deemed to
be Option terms approved by the Committee and consented to by the Optionee.
(f) Transfers. An ISO granted under the Plan may not be transferred,
---------
except by will or by the laws of descent and distribution. A Non-qualified
Stock Option granted under the Plan may not be transferred, except by will or by
the laws of descent and distribution, except as follows: If the terms of the
Non-qualified Stock Option specifically so permit, a Non-qualified Stock Option
may be transferred by the Optionee by bona fide gift, with no consideration for
the transfer, to a lineal descendent, sibling, lineal descendent of a sibling,
in each case
16
<PAGE>
whether by blood or adoption, a spouse or former spouse (collectively "family
members"), to a trust for the benefit of one or more family members or to a
partnership in which family members are the only partners. If the Optionee
receiving such an Option, or having an outstanding Option amended to provide for
such transferability, is a Principal Officer, such Option or Option amendment
must be approved by the committee of disinterested persons (as defined in Rule
16b-3) which administers the Plan with respect to Principal Officers.
Notwithstanding the foregoing, a Non-qualified Stock Option may be transferred
pursuant to the terms of a "qualified domestic relations order," within the
meaning of Sections 401(a)(13) and 414(p) of the Code or within the meaning of
Title I of the Employee Retirement Income Security Act of 1974, as amended.
(g) Limitation on ISO Grants. In no event shall the aggregate Fair
------------------------
Market Value of the Shares of Common Stock (determined at the time the ISO is
granted) with respect to which incentive stock options under all incentive stock
option plans of the Company or its Affiliates are exercisable for the first time
by the Optionee during any calendar year exceed $100,000.
(h) Other Provisions. Subject to the provisions of the Plan, the
----------------
Option Documents shall contain such other provisions including, without
limitation, provisions authorizing the Committee to accelerate the
exercisability of all or any portion of an Option granted pursuant to the Plan,
additional restrictions upon the exercise of the Option or additional
17
<PAGE>
limitations upon the term of the Option, as the Committee shall deem advisable.
(i) Amendment. Subject to the provisions of the Plan, the
---------
Committee shall have the right to amend Option Documents issued to an Optionee,
subject to the Optionee's consent if such amendment is not favorable to the
Optionee or if such amendment has the effect of converting an ISO to a Non-
qualified Stock Option, except that the consent of the Optionee shall not be
required for any amendment made under Subsection 8(e)(i)(E) or Section 10 of the
Plan, as applicable.
9. Special Provisions Relating to Grants of Options to Eligible Non-
----------------------------------------------------------------
employee Directors. Options granted pursuant to the Plan to Eligible Non-
- ------------------
employee Directors shall be granted, without any further action by the
Committee, in accordance with the terms and conditions set forth in this Section
9. Options granted pursuant to this Section 9 shall be evidenced by Option
Documents in such form as the Committee shall from time to time approve, which
Option Documents shall comply with and be subject to the following terms and
conditions and such other terms and conditions as the Committee shall from time
to time require which are not inconsistent with the terms of the Plan.
(a) Timing of Grants; Number of Shares Subject of Options;
------------------------------------------------------
Exercisability of Options; Option Price. Each Eligible Non-employee Director on
- ---------------------------------------
the effective date of the Plan was granted, on November 16, 1993, an Option to
purchase 15,000 Shares. Each Eligible Non-employee Director first elected to
the
18
<PAGE>
Board of Directors after the effective date of the Plan and prior to September
26, 1996 was granted an Option to purchase 15,000 Shares on the date he or she
became a director. Each Eligible Non-employee Director first elected to the
Board of Directors on or after September 26, 1996 shall be granted an Option to
purchase 30,000 Shares on the date he or she becomes a director. Subsequent to
the grants of Options to Eligible Non-employee Directors pursuant to the
preceding three sentences (each such grant of Options hereinafter referred to as
the "Initial Grant"), each Eligible Non-employee Director thereafter has been or
shall be granted an Option (each such grant of Options hereinafter referred to
as a "Subsequent Grant") to purchase additional Shares on the third anniversary
of the date of the Initial Grant and on the third anniversary of the date of
each grant after the Initial Grant. Each Subsequent Grant granted prior to
September 26, 1996 was an Option to purchase 15,000 Shares, and each Subsequent
Grant granted on or after September 26, 1996 shall be an Option to purchase
30,000 Shares. Subject to Section 10, each such Option shall be a Non-qualified
Stock Option becoming exercisable over a period of three (3) years, so that the
Optionee shall have the right to exercise the Option with respect to one third
(1/3) of the Shares covered thereby commencing on the first anniversary of the
date of grant, and the right to exercise the Option with respect to an
additional one third (1/3) of such Shares commencing on each of the following
two anniversaries of the date of grant. The Option Price shall be
19
<PAGE>
equal to the Fair Market Value of the Shares on the date the Option is granted.
(b) Termination of Options Granted Pursuant to Section 9.
----------------------------------------------------
All Options granted pursuant to this Section 9 shall be
exercisable until the first to occur of the following:
(i) Expiration of ten (10) years from the date of grant;
(ii) Expiration of three months from the date the Optionee's
service as a Non-employee Director terminates for any reason other than
Disability or death; or
(iii) Expiration of one year from the date the Optionee's
service with Company as a Non-employee Director terminates due to the Optionee's
Disability or death.
(c) Applicability of Provisions of Section 8 to Options Granted
-----------------------------------------------------------
Pursuant to Section 9. The following provisions of Section 8 shall be
- ---------------------
applicable to Options granted pursuant to this Section 9: Subsection
8(a)(provided that all Options granted pursuant to this Section 9 shall be Non-
qualified Stock Options); the last sentence of Subsection 8(b); Subsection 8(c);
Subsection 8(d); Subsection 8(f); and Subsection 8(i).
10. Change in Control. Notwithstanding anything to the contrary in
-----------------
any Option Document, upon a Change in Control, the exercise date of all Options
then outstanding under the Plan and held by Optionees who are then employees of,
or members of the
20
<PAGE>
Board of Directors of, the Company or an Affiliate, shall, and in the case of
consultants and advisors to the Company or an Affiliate shall (unless the
exercisability of the Options held by such an Optionee is subject to some
condition other than the lapse of time (including within the term "lapse of
time" the provisions of Sections 8(e) and 9(b) of the Plan)), automatically
accelerate to the date of the Change of Control. An Option granted to a
consultant or advisor who is also a member of the Board of Directors shall be
deemed for purposes of the preceding sentence to be an Option granted to a
consultant or advisor and not to a member of the Board of Directors if such
Option is granted for services as a consultant or advisor. Any amendment of
this Section 10 which diminishes the rights of Optionees shall not be effective
with respect to Options outstanding at the time of adoption of such amendment,
whether or not such outstanding Options are then exercisable.
A "Change in Control" shall be deemed to have occurred if: (i) there
has been a change in control of a nature that would be required, if the Company
would be subject to reporting requirements under the Securities Exchange Act of
1934 (the "Exchange Act"), to be reported in response to Item 6(e) of Schedule
14A of Regulation 14A promulgated under the Exchange Act or Item 1 of Form 8-K
promulgated under the Exchange Act; or (ii) any person, entity or group (within
the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act), other
than any employee benefit plan (or related trust) sponsored or
21
<PAGE>
maintained by the Company or any subsidiary of the Company, is or becomes the
beneficial owner, directly or indirectly, of securities of the Company
representing 30% or more of the combined voting power in the election of
directors; or (iii) during any period of two consecutive years, individuals who
at the beginning of such period constitute the Board cease for any reason to
have authority to cast at least a majority of the votes which all directors on
the Board are entitled to cast, unless the election, or the nomination for
election by the Company's stockholders, of each new director was approved by a
vote of at least two-thirds of the votes entitled to be cast by the directors
then still in office who were directors at the beginning of the period.
11. Adjustments on Changes in Capitalization. The aggregate number
----------------------------------------
of Shares and class of shares as to which Options may be granted hereunder, the
number and class or classes of shares covered by each outstanding Option and the
Option Price thereof shall be appropriately adjusted in the event of a stock
dividend, stock split, recapitalization or other change in the number or class
of issued and outstanding equity securities of the Company resulting from a
subdivision or consolidation of the Common Stock and/or, if appropriate, other
outstanding equity securities or a recapitalization or other capital adjustment
(not including the issuance of Common Stock on the conversion of other
securities of the Company which are convertible into Common Stock) affecting the
Common Stock which is effected without
22
<PAGE>
receipt of consideration by the Company. The Committee shall have authority to
determine the adjustments to be made under this Section, and any such
determination by the Committee shall be final, binding and conclusive; provided,
however, that no adjustment shall be made which will cause an ISO to lose its
status as such without the consent of the Optionee, except for adjustments made
pursuant to Section 10 hereof.
12. Amendment of the Plan. The Board of Directors of the Company may
---------------------
amend the Plan from time to time in such manner as it may deem advisable.
Nevertheless, the Board of Directors of the Company may not change the class of
individuals eligible to receive an ISO or increase the maximum number of Shares
as to which Options may be granted without obtaining approval, within twelve
months before or after such action, by vote of a majority of the votes cast at a
duly called meeting of the stockholders at which a quorum representing a
majority of all outstanding voting stock of the Company is, either in person or
by proxy, present when the meeting is convened. In addition, the provisions of
Section 9 that determine (i) which directors shall be granted Options pursuant
to Section 9; (ii) the amount of Shares subject to Options granted pursuant to
Section 9; (iii) the price at which Shares subject to Options granted pursuant
to Section 9 may be purchased and (iv) the timing of grants of Options pursuant
to Section 9 shall not be amended more than once every six months, other than to
comport with changes in the Code or the Employee Retirement Income Security Act
of 1974, as amended. No amendment
23
<PAGE>
to the Plan shall adversely affect any outstanding Option, however, without the
consent of the Optionee that holds such Option.
13. No Commitment to Retain. The grant of an Option pursuant to the
------------------------
Plan shall not be construed to imply or to constitute evidence of any agreement,
express or implied, on the part of the Company or any Affiliate to retain the
Optionee in the employ of the Company or an Affiliate and/or as a member of the
Company's Board of Directors or in any other capacity.
14. Withholding of Taxes. Whenever the Company proposes or is
--------------------
required to deliver or transfer Shares in connection with the exercise of an
Option, the Company shall have the right to (a) require the recipient to remit
or otherwise make available to the Company an amount sufficient to satisfy any
federal, state and/or local withholding tax requirements prior to the delivery
or transfer of any certificate or certificates for such Shares or (b) take
whatever other action it deems necessary to protect its interests with respect
to tax liabilities. The Company's obligation to make any delivery or transfer
of Shares shall be conditioned on the Optionee's compliance, to the Company's
satisfaction, with any withholding requirement.
15. Interpretation. The Plan is intended to enable transactions
--------------
under the Plan with respect to directors and officers (within the meaning of
Section 16(a) under the Securities Exchange Act of 1934, as amended) to satisfy
the conditions of Rule 16b-3; to the extent that any provision of the
24
<PAGE>
Plan, or any provisions of any Option granted pursuant to the Plan, would cause
a conflict with such conditions or would cause the administration of the Plan as
provided in Section 3 to fail to satisfy the conditions of Rule 16b-3, such
provision shall be deemed null and void to the extent permitted by applicable
law.
25
<PAGE>
EXHIBIT 5
(215) 977-2188
May 8, 1997
U.S. Bioscience, Inc.
One Tower Bridge
100 Front Street
West Conshohocken, PA 19428
Re: U.S. Bioscience, Inc. - Registration Statement on Form S-8 Relating to
the U.S. Bioscience, Inc. 1996 Non-Employee Directors Stock Option
Plan, the U.S. Bioscience, Inc. Non-Executive Stock Option Plan and
the U.S. Bioscience, Inc. 1992 Stock Option Plan
----------------------------------------------------------------------
Ladies and Gentlemen:
As counsel to U.S. Bioscience, Inc. (the "Company"), we have assisted in
the preparation of a Registration Statement on Form S-8 (the "Registration
Statement") to be filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, relating to 2,150,000 shares of the
Company's Common Stock, $.01 par value (the "Common Stock"), that may be issued
under certain of the Company's stock option plans, as follows: 50,000 shares of
Common Stock to be issued under the U.S. Bioscience, Inc. 1996 Non-Employee
Directors Plan (the "1996 Plan"); 1,000,000 shares of Common Stock to be issued
under the U.S. Bioscience, Inc. Non-Executive Stock Option Plan (the "Non-
Executive Plan"); and 1,100,000 shares of Common Stock to be issued under the
U.S. Bioscience, Inc. 1992 Stock Option Plan (the "1992 Plan" and, collectively
with the 1996 Plan and the Non-Executive Plan, the "Plans").
In this connection, we have examined the Company's Certificate of
Incorporation, as amended, By-Laws, as amended, and such corporate records and
other documents as we have deemed appropriate. In all examinations of
documents, instruments and other papers, we have assumed the genuineness of all
signatures on original and certified documents and the conformity to original
and certified documents of all copies submitted to us as conformed, photostatic
or other copies. As to matters of fact which have not
<PAGE>
been independently established, we have relied upon representations of officers
of the Company.
Based upon the foregoing examination and the information thus supplied, it
is our opinion that the shares of Common Stock offered and to be offered under
each of the Plans, when issued and sold to the option holders pursuant to the
terms of the 1996 Plan, the Non-Executive Plan and the 1992 Plan, as the case
may be, and the options granted and to be granted thereunder, will be legally
issued, fully paid and non-assessable.
We hereby expressly consent to the inclusion of this opinion as an exhibit
to the Registration Statement.
Very truly yours,
/s/ Wolf, Block, Schorr and Solis-Cohen
WOLF, BLOCK, SCHORR AND SOLIS-COHEN
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Experts" in the
Registration Statement on Form S-8 (No. 333-00000) pertaining to the U.S.
Bioscience, Inc. 1996 Non-Employee Directors Stock Option Plan, the U.S.
Bioscience, Inc. Non-Executive Stock Option Plan and the U.S. Bioscience, Inc.
1992 Stock Option Plan and each related Prospectus, and to the incorporation by
reference therein of our report dated February 13, 1997, with respect to the
consolidated financial statements of U.S. Bioscience, Inc. included in its
Annual Report (Form 10-K) for the year ended December 31, 1996, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
May 9, 1997
Philadelphia, Pennsylvania
