<PAGE>
As filed with the Securities and Exchange Commission on December
, 1996 Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________
FORM S-8
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
___________
NPS PHARMACEUTICALS, INC.
(Exact name of Registrant as specified in its charter)
___________
DELAWARE 87-0439579
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
___________
420 CHIPETA WAY
SALT LAKE CITY, UTAH 84108-1256
(801) 583-4939
(Address and telephone number of principal executive offices)
___________
1994 EQUITY INCENTIVE PLAN
1994 NON-EMPLOYEES DIRECTORS' STOCK OPTION PLAN
1994 EMPLOYEE STOCK PURCHASE PLAN
(Full title of the plan)
JAMES U. JENSEN, ESQ.
VICE PRESIDENT, CORPORATE DEVELOPMENT AND LEGAL AFFAIRS
NPS PHARMACEUTICAL, INC.
420 CHIPETA WAY
SALT LAKE CITY, UTAH 84108-1256
(801) 583-4939
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
___________
Copies to:
Nicholas E. Hales, Esq.
Woodbury & Kesler, P.C.
265 East First South, Suite 300
Salt Lake City, Utah 84111
(801) 364-1100
__________
Total Number of Pages: __
Exhibit Index at Page: __
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
PROPOSED PROPOSED
TITLE OF SECURITIES AMOUNT TO BE MAXIMUM MAXIMUM AMOUNT OF
TO BE REGISTERED REGISTERED OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION FEE
SHARE (1) PRICE (1)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, Par
Value $ .001 Per
Share 900,000 10.25 9,225,000 $3,181.03
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(h)(l), based upon the
average of the high and low prices of the Registrant's Common
Stock on December 5, 1996 as reported on the NASDAQ National
Market System.
- ----------------------------------------------------------------------------------------------------
</TABLE>
ii
<PAGE>
REGISTRATION OF ADDITIONAL SHARES
This Registration Statement filed by NPS Pharmaceuticals, Inc. (the
"Company") with the Securities and Exchange Commission is filed for the
purpose of registering additional shares of the Company's Common Stock
issuable under the Company's 1994 Equity Incentive Plan, the 1994
Non-Employee Directors' Stock Option Plan and the 1994 Employee Stock
Purchase Plan, for which Registration Statements of the Registrant on Form
S-8 relating to the .same employee benefit plans, are currently effective.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
In accordance with General Instruction E to Form S-8, the contents of the
Company's Registration Statements filed with the Securities Exchange
Commission, on Form S-8, Commission File No. 33-79622 and File No. 333-512,
including exhibits thereto, are hereby incorporated by reference into this
Registration Statement, except as the same may be modified by the information
set forth herein.
1.
<PAGE>
EXHIBITS
EXHIBIT
NUMBER
5.1 Opinion of Woodbury & Kesler, P.C.
23.2 Consent of KPMG Peat Marwick LLP.
23.3 Consent of Woodbury & Kesler, P.C. is contained in Exhibit
5.1 to this Registration Statement.
24.1 Power of Attorney is contained on the signature pages.
99.2 Form of 1994 Non-Employee Directors' Stock Option Plan as
Amended 1996.
99.3 Form of 1994 Equity Incentive Plan as Amended 1996.
99.4 Form of 1994 Employee Stock Purchase Plan as Amended 1996.
2.
<PAGE>
SIGNATURES
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 S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Salt Lake, County of Salt Lake,
State of Utah, on the 5th day of December, 1996.
NPS PHARMACEUTICALS, INC.
By: /s/
--------------------------------------
Hunter Jackson, Ph.D.
PRESIDENT, CHIEF EXECUTIVE OFFICER AND
CHAIRMAN OF THE BOARD
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Hunter
Jackson, Ph.D., and James U. Jensen, J.D. his true and lawful
attorneys-in-fact and agents, each acting alone, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including
post-effective amendments) to this Registration Statement, and to file the
same with all exhibits thereto, and all documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, each acting alone, or his 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 by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/
- ------------------------- President, Chief Executive Officer December 5, 1996
Hunter Jackson, Ph.D. and Chairman of the Board
(PRINCIPAL EXECUTIVE OFFICER)
/s/
- ------------------------- Vice President, Finance, Chief December 5, 1996
Robert K. Merrell Financial Officer and Treasurer
(PRINCIPAL FINANCIAL AND
ACCOUNTING OFFICER)
/s/
- ------------------------- Vice President, Corporate December 5, 1996
James U. Jensen Development and Legal Affairs,
Secretary and Director
</TABLE>
3.
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/
- ------------------------- Director December 5, 1996
Santo J. Costa
/s/
- ------------------------- Director December 5, 1996
James G. Groninger
/s/
- ------------------------- Director December 5, 1996
Donald E. Kuhla, Ph.D.
/s/
- ------------------------- Director December 5, 1996
Thomas N. Parks, Ph.D.
/s/
- ------------------------- Director December 5, 1996
Timothy J. Rink, M.D., Sc.D.
</TABLE>
4.
<PAGE>
EXHIBITS INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION SEQUENTIAL PAGE NUMBER
<S> <C> <C>
5.1 Opinion of Woodbury & Kesler, P.C.
23.2 Consent of KPMG Peat Marwick LLP.
23.3 Consent of Woodbury & Kesler, P.C. is contained in
Exhibit 5.1 to this Registration Statement.
24.1 Power of Attorney is contained on the signature pages.
99.2 Form of 1994 Non-Employee Directors' Stock Option Plan
as Amended 1996
99.3 Form of 1994 Equity Incentive Plan as Amended 1996
99.4 Form of 1994 Employee Stock Purchase Plan as Amended
1996.
</TABLE>
<PAGE>
EXHIBIT 5.1
<PAGE>
WOODBURY & KESLER
A Professional Corporation
Attorneys at Law
265 East 100 South, Suite 300
P.O. Box 3358
Salt Lake City, Utah 84110-3358
Telephone: (801) 364-1100
Facsimile: (801) 359-2320
December 5, 1996
NPS Pharmaceuticals, Inc.
420 Chipeta Way
Salt Lake City, UT 84108-1256
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in
connection with the filing by NPS Pharmaceuticals, Inc. (the "Company") of a
Registration Statement on Form S-8 (the "Registration Statement") with the
Securities and Exchange Commission (the "SEC") covering the offering of up to
900,000 shares of the Company's Common Stock, $.001 par value (the "Shares")
pursuant to its 1994 Equity Incentive Plan, as amended, 1994 Non-Employee
Directors' Stock Option Plan, as amended, and 1994 Employee Stock Purchase
Plan, as amended (the "Plans").
In connection with this opinion, we have examined the Registration
Statement and related Prospectus, your Certificate of Incorporation and
By-laws, as amended, and such other documents, records, certificates,
memoranda and other instruments as we deem necessary as a basis for this
opinion. We have assumed the genuineness and authenticity of all documents
submitted to us as originals, the conformity to originals of all documents
submitted to us as copies thereof, and the due execution and delivery of all
documents where due execution and delivery are a prerequisite to the
effectiveness thereof.
On the basis of the foregoing, and in reliance thereon, we are of the
opinion that the Shares, when sold and issued in accordance with the Plans,
the Registration Statement and related Prospectus, will be validly issued,
fully paid, and nonassessable (except as to shares issued pursuant to certain
deferred payment arrangements, which will be fully paid and nonassessable
when such deferred payments are made in full).
We consent to the filing of this opinion as an exhibit to the
Registration Statement.
Sincerely,
WOODBURY & KESLER, P.C.
/s/
Nicholas E. Hales
Vice President
<PAGE>
EXHIBIT 23.2
<PAGE>
CONSENT OF KPMG PEAT MARWICK LLP INDEPENDENT AUDITORS
We consent to incorporation by reference in the registration statement on
Form S-8 of NPS Pharmaceuticals, Inc. (a development stage company) of our
report dated February 7, 1996, except as to Note 11 which is as of March 18,
1996, relating to the balance sheets of NPS Pharmaceuticals, Inc. as of
December 31, 1995 and 1994, and the related statements of operations,
stockholders' equity, and cash flows for each of the years in the three-year
period ended December 31, 1995, and for the period from October 22, 1986
(inception) through December 31, 1995, which report appears in the December
31, 1995, annual report on Form 10-K of NPS Pharmaceuticals, Inc.
/s/
KPMG Peat Marwick LLP
Salt Lake City, Utah
December 5, 1996
<PAGE>
EXHIBIT 23.3
<PAGE>
Consent of Woodbury & Kesler, P.C. is Contained in Exhibit 5.1 to this
Registration Statement.
<PAGE>
EXHIBIT 24.1
<PAGE>
Power of Attorney is contained on Page 3, Signatures, of this Registration
Statement.
<PAGE>
EXHIBIT 99.2
FORM OF 1994 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
<PAGE>
NPS PHARMACEUTICALS, INC.
1994 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
AS AMENDED 1996
1. PURPOSE
1.1 The purpose of the 1994 Non-Employee Directors' Stock Option Plan
(the "Plan") is to provide a means by which each director of NPS
Pharmaceuticals, Inc. (the "Company") who is not otherwise an employee of the
Company or of any Affiliate of the Company (each such person being hereafter
referred to as a "Non-Employee Director") will be given an opportunity to
purchase stock of the Company.
1.2 The word "Affiliate" as used in the Plan means any parent
corporation or subsidiary corporation of the Company as those terms are
defined in Sections 424(e) and (f), respectively, of the Internal Revenue
Code of 1986, as amended from time to time (the "Code").
1.3 The Company, by means of the Plan, seeks to retain the services of
persons now serving as Non-Employee Directors of the Company, to secure and
retain the services of persons capable of serving in such capacity, and to
provide incentives for such persons to exert maximum efforts for the success
of the Company.
2. ADMINISTRATION
2.1 The Plan shall be administered by the Board of Directors of the
Company (the "Board") unless and until the Board delegates administration to
a committee, as provided in subparagraph 2.2.
2.2 The Board may delegate administration of the Plan to a committee
composed of not fewer than two (2) members of the Board (the "Committee").
If administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore
possessed by the Board, subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from time to
time by the Board. The Board may abolish the Committee at any time and
revest in the Board the administration of the Plan.
3. SHARES SUBJECT TO THE PLAN
3.1 Subject to the provisions of paragraph 10 relating to adjustments
upon changes in stock, the stock that may be sold pursuant to options granted
under the Plan shall not exceed in the aggregate One Hundred Sixty Thousand
(160,000) shares of the Company's common stock. If any option granted under
the Plan shall for any reason expire or otherwise terminate without having
been exercised in full, the stock not purchased under such option shall again
become available for the Plan.
3.2 The stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.
-1-
<PAGE>
4. ELIGIBILITY
4.1 Options shall be granted only to Non-Employee Directors of the
Company.
5. NON-DISCRETIONARY GRANTS
5.1 Each person who is, after the date of approval of the Plan by the
Board (the "Adoption Date"), elected for the first time to be a Non-Employee
Director shall, upon the date of his initial election to be a Non-Employee
Director by the Board or stockholders of the Company, be granted an option to
purchase Fifteen Thousand (15,000) shares of common stock of the Company on
the terms and conditions set forth herein.
5.2 On December 1, of each year, commencing with December 1, 1994, each
person who is then a Non-Employee Director and has been a Non-Employee
Director for at least three (3) months, shall be granted an option to
purchase Three Thousand (3,000) shares of common stock of the Company on the
terms and conditions set forth herein.
6. OPTION PROVISIONS
Each option shall contain the following terms and conditions:
6.1 The term of each option commences on the date it is granted and,
unless sooner terminated as set forth herein, expires on the date
("Expiration Date") ten (10) years from the date of grant. If the optionee's
service as a Non-Employee Director of the Company or as an employee of or
consultant to the Company or any Affiliate of the Company, terminates for any
reason or for no reason, the option shall terminate on the earlier of the
Expiration Date or the date twelve (12) months following the date of
termination of service; provided, however, that if such termination of
service is due to the optionee's death, the option shall terminate on the
earlier of the Expiration Date or eighteen (18) months following the date of
the optionee's death. In any and all circumstances, an option may be
exercised following termination of the optionee's service as a Non-Employee
Director of the Company only as to that number of shares as to which it was
exercisable on the date of termination of such service under the provisions
of subparagraph 6.5.
6.2 The exercise price of each option shall be one hundred percent
(100%) of the fair market value of the stock subject to such option on the
date such option is granted.
6.3 Payment of the exercise price of each option is due in full in cash
upon any exercise; the optionee may elect to make payment of the exercise
price under one of the following alternatives:
6.3.1 Payment of the exercise price per share in cash at the time
of exercise; or
6.3.1.0.0.1 Provided that at the time of the exercise
the Company's common stock is publicly traded and quoted regularly in the
Wall Street Journal: (i) payment by delivery of shares of common stock of the
Company already owned by the optionee and owned free and clear of any liens,
claims, encumbrances or security interests, which common stock shall be
valued at its fair market value on the date of exercise; or (ii) through
surrender of shares of common stock available for exercise under the option,
which common stock shall be valued at its fair market value on the date of
exercise and owned free and clear of any liens, claims, encumbrances or
security interests.
6.3.2 Payment by a combination of the methods of payment specified
in subparagraphs 6.3.1 and 6.3.2 above.
-2-
<PAGE>
Notwithstanding the foregoing, this option may be exercised pursuant to a
program developed under Regulation T as promulgated by the Federal Reserve
Board which results in the receipt of cash (or check) by the Company prior to
the issuance of shares of the Company's common stock.
6.4 The Board or Committee may, in its discretion, authorize all or a
portion of the Nonstatutory Stock Options to be granted to an Optionee to be
on terms that permit transfer by such Optionee to (i) the spouse, children or
grandchildren of the Optionee ("Immediate Family Members"), (ii) a trust or
trusts for the exclusive benefit of such Immediately Family members, or (iii)
a partnership in which such Immediately Family Members are the only partners,
provided that (a) there may be no consideration or any such transfer, (b) the
stock option agreement pursuant to which such Options are granted must
expressly provide for transferability in a manner consistent with this
Section, (c) subsequent transfers of transferred options shall be prohibited
except those occurring by will or the laws of descent and distribution, and
(d) the Options shall continue to be subject to all the terms and conditions
that applied prior to transfer in the same manner and to the same extent as
non-transferred options, including Sections 6.5 Vesting; 6.6 Securities Law
Compliance. The Options shall be exercisable by the transferee only to the
extent, and for the periods specified in such sections. The Company
expressly disclaims any obligation to provide notice to a transferee of the
termination of the Option.
Unless transfer by an Optionee is specifically provided for in the Option
Agreement, a Nonstatutory Stock Option shall not be transferable except by
will or by the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined by the Code or Title I of the Employee
Retirement Income Security Act, or the rules thereunder (a "QDRO"), and shall
be exercisable during the lifetime of the person to whom the Statutory Stock
Option is granted only by such person or any transferee pursuant to a QDRO.
6.5 The option shall become exercisable in installments from the date of
grant at the rates set forth below. Twenty-eight percent (28%) of the shares
shall vest at 5:00 p.m., Mountain Standard Time ("MST"), on the first
anniversary of the date of grant and three percent (3%) of the remaining
shares shall vest at 5:00 p.m. MST, on each monthly anniversary date
thereafter (i.e., grant date December 1, 1996, 28% vest at 5:00 p.m. MST on
December 1, 1997 MST, and 3% vest at 5:00 p.m. MST on the 1st day of each
month thereafter), provided that the optionee has, during the entire period
prior to such vesting date, continuously served as a Non-employee Director or
as an employee of or consultant to the Company or any Affiliate of the
Company, whereupon such option shall become fully exercisable in accordance
with its terms with respect to that portion of the shares represented by that
installment.
6.6 The Company may require any optionee, or any person to whom an
option is transferred under subparagraph 6.4, as a condition of exercising
any such option: (i) to give written assurances satisfactory to the Company
as to the optionee's knowledge and experience in financial and business
matters; and (ii) to give written assurances satisfactory to the Company
stating that such person is acquiring the stock subject to the option for
such person's own account and not with any present intention of selling or
otherwise distributing the stock. These requirements, and any assurances
given pursuant to such requirements, shall be inoperative if (i) the issuance
of the shares upon the exercise of the option has been registered under a
then-currently-effective registration statement under the Securities Act of
1933, as amended (the "Securities Act"), or (ii), as to any particular
requirement, a determination is made by counsel for the Company that such
requirement need not be met in the circumstances under the then-applicable
securities laws.
6.7 Notwithstanding anything to the contrary contained herein, an option
may not be exercised unless the shares issuable upon exercise of such option
are then registered under the Securities Act or, if such shares are not then
so registered, the Company has determined that such exercise and issuance
would be exempt from the registration requirements of the Securities Act.
-3-
<PAGE>
7. COVENANTS OF THE COMPANY
7.1 During the terms of the options granted under the Plan, the Company
shall keep available at all times the number of shares of stock required to
satisfy such options.
7.2 The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of stock upon exercise of the options granted under the
Plan; provided, however, that this undertaking shall not require the Company
to register under the Securities Act either the Plan, any option granted
under the Plan, or any stock issued or issuable pursuant to any such option.
If the Company is unable to obtain from any such regulatory commission or
agency the authority which counsel for the Company deems necessary for the
lawful issuance and sale of stock under the Plan, the Company shall be
relieved from any liability for failure to issue and sell stock upon exercise
of such options.
8. USE OF PROCEEDS FROM STOCK
Proceeds from the sale of stock pursuant to options granted under the Plan
shall constitute general funds of the Company.
9. MISCELLANEOUS
9.1 Neither an optionee nor any person to whom an option is transferred
under subparagraph 6.4 shall be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares subject to such option
unless and until such person has satisfied all requirements for exercise of
the option pursuant to its terms.
9.2 Nothing in the Plan or in any instrument executed pursuant thereto
shall confer upon any Non-Employee Director any right to continue in the
service of the Company or any Affiliate or shall affect any right of the
Company, its Board or stockholders or any Affiliate to terminate the service
of any Non-Employee Director with or without cause.
9.3 No Non-Employee Director, individually or as a member of a group,
and no beneficiary or other person claiming under or through him, shall have
any right, title or interest in or to any option reserved for the purposes of
the Plan except as to such shares of common stock, if any, as shall have been
reserved for him pursuant to an option granted to him.
9.4 In connection with each option made pursuant to the Plan, it shall
be a condition precedent to the Company's obligation to issue or transfer
shares to a Non-Employee Director, or to evidence the removal of any
restrictions on transfer, that such Non-Employee Director make arrangements
satisfactory to the Company to insure that the amount of any federal or other
withholding tax required to be withheld with respect to such sale or
transfer, or such removal or lapse, is made available to the Company for
timely payment of such tax.
10. ADJUSTMENTS UPON CHANGES IN STOCK
10.1 If any change is made in the stock subject to the Plan, or subject
to any option granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in
-4-
<PAGE>
property other than cash, stock split, liquidating dividend, combination of
shares, exchange of shares, change in corporate structure or otherwise), the
Plan and outstanding options will be appropriately adjusted in the class(es)
and maximum number of shares subject to the Plan and the class(es) and number
of shares and price per share of stock subject to outstanding options.
10.2 In the event of: (1) a merger or consolidation in which the Company
is not the surviving corporation; (2) a reverse merger in which the Company
is the surviving corporation but the shares of the Company's common stock
outstanding immediately preceding the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash or
otherwise; or (3) any other capital reorganization in which more than fifty
percent (50%) of the shares of the Company entitled to vote are exchanged,
the time during which options outstanding under the Plan may be exercised
shall be accelerated and the options terminated if not exercised prior to
such event.
11. AMENDMENT OF THE PLAN
11.1 The Board at any time, and from time to time, may amend the Plan.
Except as provided in paragraph 10 relating to adjustments upon changes in
stock, no amendment shall be effective unless approved by the stockholders of
the Company within twelve (12) months before or after the adoption of the
amendment, where the amendment will:
11.1.1 Increase the number of shares which may be issued under
the Plan;
11.1.2 Modify the requirements as to eligibility for
participation in the Plan (to the extent such modification requires
stockholder approval in order for the Plan to comply with the requirements of
Rule 16b-3); or
11.1.3 Modify the Plan in any other way if such modification
requires stockholder approval in order for the Plan to comply with the
requirements of Rule 16b-3.
11.2 Rights and obligations under any option granted before any amendment
of the Plan shall not be altered or impaired by such amendment unless (i) the
Company requests the consent of the person to whom the option was granted and
(ii) such person consents in writing.
12. TERMINATION OR SUSPENSION OF THE PLAN
12.1 The Board may suspend or terminate the Plan at any time. Unless
sooner terminated, the Plan shall terminate on midnight, January 6, 2004. No
options may be granted under the Plan while the Plan is suspended or after it
is terminated.
12.2 Rights and obligations under any option granted while the Plan
is in effect shall not be altered or impaired by suspension or termination of
the Plan, except with the consent of the person to whom the option was
granted.
12.3 The Plan shall terminate upon the occurrence of any of the events
described in Section 10(b) above.
13. EFFECTIVE DATE OF PLAN; CONDITIONS OF EXERCISE
-5-
<PAGE>
13.1 The Plan shall become effective upon adoption by the Board of
Directors, subject to the condition subsequent that the Plan is approved by
the stockholders of the Company.
13.2 No option granted under the Plan shall be exercised or exercisable
unless and until the condition of subparagraph 13.1 above has been met.
-6-
<PAGE>
EXHIBIT 99.3
FORM OF 1994 EQUITY INCENTIVE PLAN
<PAGE>
NPS PHARMACEUTICALS, INC.
1994 EQUITY INCENTIVE PLAN
AS AMENDED 1996
1 PURPOSES.
1.1 The purpose of the 1994 Equity Incentive Plan (the "Plan") is
to provide a means by which employees of and consultants to the Company, and
its Affiliates, may be given an opportunity to benefit from increases in
value of the stock of the Company through the granting of (i) Incentive Stock
Options, (ii) Nonstatutory Stock Options, (iii) stock bonuses, (iv) rights to
purchase restricted stock, and (v) stock appreciation rights, all as defined
below.
1.2 The Company, by means of the Plan, seeks to retain the services
of persons who are now Employees or Directors of or Consultants to the
Company, to secure and retain the services of new Employees, Directors and
Consultants, and to provide incentives for such persons to exert maximum
efforts for the success of the Company.
1.3 The Company intends that the Stock Awards issued under the Plan
shall, in the discretion of the Board or any Committee to which
responsibility for administration of the Plan has been delegated pursuant to
subsection 3.3, be either (i) Options granted pursuant to paragraph 6 hereof,
including Incentive Stock Options and Nonstatutory Stock Options, (ii) stock
bonuses or rights to purchase restricted stock granted pursuant to paragraph
7 hereof, or (iii) stock appreciation rights granted pursuant to paragraph 8
hereof. All Options shall be separately designated Incentive Stock Options
or Nonstatutory Stock Options at the time of grant, and in such form as
issued pursuant to section 6, and a separate certificate or certificates will
be issued for shares purchased on exercise of each type of Option.
2 DEFINITIONS.
2.1 "AFFILIATE" means any parent corporation or subsidiary
corporation, whether now or hereafter existing, as those terms are defined in
Sections 424(e) and (f) respectively, of the Code.
2.2 "BOARD" means the Board of Directors of the Company.
2.3 "CODE" means the Internal Revenue Code of 1986, as amended.
2.4 "COMMITTEE" means a Committee appointed by the Board in
accordance with subsection 3.3 of the Plan.
2.5 "COMPANY" means NPS Pharmaceuticals, Inc., a Delaware
corporation.
2.6 "CONCURRENT STOCK APPRECIATION RIGHT" or "CONCURRENT RIGHT"
means a right granted pursuant to subsection 8.2.2 of the Plan.
-1-
<PAGE>
2.7 "CONSULTANT" means any person, including an advisor, engaged by
the Company or an Affiliate to render consulting services and who is
compensated for such services, provided that the term "Consultant" shall not
include Directors who are paid only a director's fee by the Company or who
are not compensated by the Company for their services as Directors.
2.8 "CONTINUOUS STATUS AS AN EMPLOYEE, DIRECTOR OR CONSULTANT"
means the employment or relationship as an Employee, Director or Consultant
is not interrupted or terminated by the Company or any Affiliate. The Board,
in its sole discretion, may determine whether Continuous Status as an
Employee, Director or Consultant shall be considered interrupted in the case
of: (i) any leave of absence approved by the Board, including sick leave,
military leave, or any other personal leave; provided, however, that for
purposes of Incentive Stock Options and Stock Appreciation Rights appurtenant
thereto, any such leave may not exceed ninety (90) days, unless reemployment
upon the expiration of such leave is guaranteed by contract (including
certain Company policies) or statute; or (ii) transfers between locations of
the Company or between the Company, Affiliates or its successor.
2.9 "DAY OF DETERMINATION" means the date of the occurrence of an
event that requires the determination of the Fair Market Value of an award
made hereunder.
2.10 "DIRECTOR" means a member of the Board.
2.11 "DISABILITY" means total and permanent disability as defined in
Section 22(e)(3) of the Code.
2.12 "EMPLOYEE" means any person, including Officers and Directors,
employed by the Company or any Affiliate of the Company. Neither service as
a Director nor payment of a director's fee by the Company shall be sufficient
to constitute "employment" by the Company.
2.13 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
2.14 "FAIR MARKET VALUE" means, as of any date, the value of the
common stock of the Company as determined as follows:
2.14.1 If the common stock is listed on any established
stock exchange or a national market system, including without limitation the
National Market System of the National Association of Securities Dealers,
Inc. Automated Quotation ("NASDAQ") System, the Fair Market Value of a share
of common stock shall be the closing price for such stock on the Day of
Determination as quoted on such system as reported in the Wall Street Journal
or such other source as the Board deems reliable. In the event the Day of
Determination falls on a date that the NASDAQ system is closed, then the Fair
Market Value shall be the closing sales price for such stock on the last
market trading day prior to the Day of Determination as quoted on such system
as reported in the Wall Street Journal or such other source as the Board
deems reliable.
2.14.2 If the common stock is quoted on the NASDAQ System
(but not on the National Market System thereof) or is regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a share of common stock shall be the mean between the bid and
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asked prices for the common stock on the last market trading day prior to the
day of determination, as reported in the Wall Street Journal or such other
source as the Board deems reliable;
2.14.3 In the absence of an established market for the common
stock, the Fair Market Value shall be determined in good faith by the Board.
2.15 "INCENTIVE STOCK OPTION" means an Option intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code and
the regulations promulgated thereunder.
2.16 "INDEPENDENT STOCK APPRECIATION RIGHT" or "INDEPENDENT RIGHT"
means a right granted under subsection 8.2.3 of the Plan.
2.17 "NON-EMPLOYEE DIRECTOR" means a Director: (i) who is not, at
the time of approval of an award under the Plan, an Officer or Employee of
the Company or an Affiliate of the Company; and (ii) who is otherwise
considered to be a "Non-employee Director" in accordance with Rule
16b-3(b)(3), or any other applicable rules, regulations or interpretations of
the Securities and Exchange Commission.
2.18 "NONSTATUTORY STOCK OPTION" means an Option not intended to
qualify as an Incentive Stock Option or an Incentive Stock Option which,
subsequent to its date of grant, no longer qualifies as an Incentive Stock
Option under Section 422 of the Code.
2.19 "OFFICER" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
2.20 "OPTION" means a stock option granted pursuant to the Plan.
2.21 "OPTION AGREEMENT" means a written agreement between the
Company and an Optionee evidencing the terms and conditions of an individual
Option grant. The Option Agreement is subject to the terms and conditions of
the Plan.
2.22 "OPTIONEE" means an Employee, Director or Consultant who holds
an outstanding Option.
2.23 "PLAN" means this 1994 Equity Incentive Plan.
2.24 "RULE 16B-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.
2.25 "STOCK APPRECIATION RIGHT" means any of the various types of
rights which may be granted under Section 8 of the Plan.
2.26 "STOCK AWARD" means any right granted under the Plan, including
any Option, any stock bonus, any right to purchase restricted stock, and any
Stock Appreciation Right.
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2.27 "STOCK AWARD AGREEMENT" means a written agreement including an
Option Agreement between the Company and a holder of a Stock Award evidencing
the terms and conditions of an individual Stock Award grant. The Stock Award
Agreement is subject to the terms and conditions of the Plan.
2.28 "TANDEM STOCK APPRECIATION RIGHT" or "TANDEM RIGHT" means a
right granted under subsection 8.2.1 of the Plan.
3 ADMINISTRATION.
3.1 The Plan shall be administered by the Board unless and until
the Board delegates administration to a Committee, as provided in subsection
3.3.
3.2 The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
3.2.1 To determine from time to time which of the persons
eligible under the Plan shall be granted Stock Awards; when and how Stock
Awards shall be granted; whether a Stock Award will be an Incentive Stock
Option, a Nonstatutory Stock Option, a stock bonus, a right to purchase
restricted stock, a stock appreciation right, or a combination of the
foregoing; the provisions of each Stock Award granted (which need not be
identical), including the time or times when a person shall be permitted to
receive stock pursuant to a Stock Award; whether a person shall be permitted
to receive stock upon exercise of an Independent Stock Appreciation Right;
and the number of shares with respect to which Stock Awards shall be granted
to each such person.
3.2.2 To construe and interpret the Plan and Stock Awards
granted under it, and to establish, amend and revoke rules and regulations
for its administration. The Board, in the exercise of this power, may
correct any defect, omission or inconsistency in the Plan or in any Stock
Award Agreement, in a manner and to the extent it shall deem necessary or
expedient to make the Plan fully effective.
3.2.3 To amend the Plan as provided in Section 14.
3.2.4 Generally, to exercise such powers and to perform
such acts as the Board deems necessary or expedient to promote the best
interests of the Company.
3.3 The Board may delegate administration of the Plan to a
committee composed of not fewer than two (2) members (the "Committee"), all
of the members of which Committee shall be Non-employee Directors, if
required and as defined by the provisions of subsection 3.4. If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore
possessed by the Board (and references in this Plan to the Board shall
thereafter be to the Committee), subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from time to
time by the Board. The Board may abolish the Committee at any time and
revest in the Board the administration of the Plan. Notwithstanding anything
in this Section 3 to the contrary, the Board or the Committee may delegate to
a committee of one or more members of the Board the authority
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to grant options to eligible persons who are not then subject to Section 16
of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
3.4 Any requirement that an administrator of the Plan be a
Non-employee Director shall not apply if the Board or the Committee expressly
declares that such requirement shall not apply. Any Non-employee Director
shall otherwise comply with the requirements of Rule 16b-3.
4 SHARES SUBJECT TO THE PLAN.
4.1 Subject to the provisions of Section 13 relating to adjustments
upon changes in stock, the stock that may be issued pursuant to Stock Awards
shall not exceed in the aggregate One Million Seven Hundred Two Thousand Five
Hundred Three (1,702,503) shares of the Company's common stock. If any Stock
Award shall for any reason expire or otherwise terminate without having been
exercised in full, the stock not purchased under such Stock Award shall again
become available for the Plan. Shares subject to Stock Appreciation Rights
exercised in accordance with Section 8 of the Plan shall not be available for
subsequent issuance under the Plan.
4.2 The stock subject to the Plan may be unissued shares or
reacquired shares, bought on the market or otherwise.
5 ELIGIBILITY.
5.1 Incentive Stock Options and Stock Appreciation Rights
appurtenant thereto may be granted only to Employees. Stock Awards other
than Incentive Stock Options and Stock Appreciation Rights appurtenant
thereto may be granted only to Employees, Directors or Consultants.
5.2 No Officer or Director shall be eligible for the benefits of
the Plan unless at the time discretion is exercised in the selection of an
Officer or Director as a person to whom Stock Awards may be granted, or in
the determination of the number of shares which may be covered by Stock
Awards granted to the Officer or Director, the Plan otherwise complies with
the requirements of Rule 16b-3. This subsection 5.2 shall not apply if the
Board or Committee expressly declares that it shall not apply.
5.3 No person shall be eligible for the grant of an Incentive Stock
Option if, at the time of grant, such person owns (or is deemed to own
pursuant to Section 424(d) of the Code) stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of
the Company or of any of its Affiliates unless the exercise price of such
Incentive Stock Option is at least one hundred ten percent (110%) of the Fair
Market Value of such stock at the date of grant and the Incentive Stock
Option is not exercisable after the expiration of five (5) years from the
date of grant.
6 OPTION PROVISIONS.
Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. The provisions of separate
Options need not be identical, but each Option shall include (through
incorporation of provisions hereof by reference in the Option or otherwise)
the substance of each of the following provisions:
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6.1 TERM. No Option shall be exercisable after the expiration of
ten (10) years from the date it was granted.
6.2 PRICE. The exercise price of each Incentive Stock Option shall
be not less than one hundred percent (100%) of the Fair Market Value of the
stock subject to the Option on the date the Option is granted. The exercise
price of each Nonstatutory Stock Option shall be the price established by the
Board or a Committee established by the Board in accordance with subsection
3.3.
6.3 CONSIDERATION. The purchase price of stock acquired pursuant
to an Option shall be paid, to the extent permitted by applicable statutes
and regulations, either (i) in cash at the time the option is exercised, or
(ii) by delivery of already-owned shares of common stock of the Company or a
combination of cash and already-owned shares of common stock of the Company,
or (iii) through surrender of shares of common stock available for exercise
under the Option, valued at its Fair Market Value on the date of exercise and
owned free and clear of any liens, claims, encumbrances or security
interests, or (iv) according to a deferred payment or other arrangement
(which may include, without limiting the generality of the foregoing, the use
of other common stock of the Company) with the person to whom the Option is
granted or to whom the Option is transferred pursuant to subsection 6.4, or
(v) as required in the discretion of the Board or the Committee, either at
the time of the grant or exercise of the Option, or (vi) a combination of
(i), (ii), (iii), (iv) and/or (v) above.
In the case of any deferred payment arrangement, interest shall be
payable at least annually and shall be charged at the minimum rate of
interest necessary to avoid the treatment as interest, under any applicable
provisions of the Code, of any amounts other than amounts stated to be
interest under the deferred payment arrangement.
6.4 TRANSFERABILITY.
6.4.1 INCENTIVE STOCK OPTIONS. In order for an Option to
qualify for treatment as an Incentive Stock Option, it may not be
transferable except by will or by the laws of descent and distribution. In
the event an Optionee transfers such Option, such transfer shall constitute a
disqualifying event and the Option shall no longer qualify as an Incentive
Stock Option but shall be considered a Nonstatutory Stock Option under the
terms of this Plan.
6.4.2 NONSTATUTORY STOCK OPTION. The Board or Committee
may, in its discretion, authorize all or a portion of the Nonstatutory Stock
Options to be granted to an Optionee to be on terms that permit transfer by
such Optionee to (i) the spouse, children or grandchildren of the Optionee
("Immediate Family Members"), (ii) a trust or trusts for the exclusive
benefit of such Immediate Family Members, or (iii) a partnership in which
such Immediate Family Members are the only partners, provided that (a) there
may be no consideration for any such transfer, (b) the stock option agreement
pursuant to which such Options are granted must expressly provide for
transferability in a manner consistent with this Section, (c) subsequent
transfers of transferred options shall be prohibited except those occurring
by will or the laws of descent and distribution, and (d) the Options shall
continue to be subject to all the terms and conditions that applied prior to
transfer in the same manner and to the same extent as non-transferred
options, including Sections 6.5 Vesting; 6.6 Securities Law Compliance; 6.7
Termination of Employment; 6.8 Disability of Optionee; and 6.9 Death of
Optionee. The Options shall be exercisable by the transferee only to the
extent, and for the
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periods specified in such sections. The Company expressly disclaims any
obligation to provide notice to a transferee of the termination of the
Option.
Unless transfer by an Optionee is specifically provided for in the Option
Agreement, a Nonstatutory Stock Option shall not be transferable except by
will or by the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined by the Code or Title I of the Employee
Retirement Income Security Act, or the rules thereunder (a "QDRO"), and shall
be exercisable during the lifetime of the person to whom the Nonstatutory
Stock Option is granted only by such person or any transferee pursuant to a
QDRO.
6.5 VESTING. The total number of shares of stock subject to an
Option may, but need not, be allotted in periodic installments (which may,
but need not, be equal). The Option Agreement may provide that from time to
time during each of such installment periods, the Option may become
exercisable ("vest") with respect to some or all of the shares allotted to
that period, and may be exercised with respect to some or all of the shares
allotted to such period and/or any prior period as to which the Option became
vested but was not fully exercised. The Option may be subject to such other
terms and conditions on the time or times when it may be exercised (which may
be based on performance criteria) as the Board may deem appropriate. The
provisions of this subsection 6.5 are subject to any Option provisions
governing the minimum number of shares as to which an Option may be exercised.
6.6 SECURITIES LAW COMPLIANCE. The Company may require any
Optionee, or any person to whom an Option is transferred under subsection
6.4, as a condition of exercising any such Option, (1) to give written
assurances satisfactory to the Company as to the Optionee's knowledge and
experience in financial and business matters and/or to employ a purchaser
representative reasonably satisfactory to the Company who is knowledgeable
and experienced in financial and business matters, and that he or she is
capable of evaluating, alone or together with the purchaser representative,
the merits and risks of exercising the Option; and (2) to give written
assurances satisfactory to the Company stating that such person is acquiring
the stock subject to the Option for such person's own account and not with
any present intention of selling or otherwise distributing the stock. These
requirements, and any assurances given pursuant to such requirements, shall
be inoperative if (i) the issuance of the shares upon the exercise of the
Option has been registered under a then currently effective registration
statement under the Securities Act of 1933, as amended (the "Securities
Act"), or (ii) as to any particular requirement, a determination is made by
counsel for the Company that such requirement need not be met in the
circumstances under the then applicable securities laws.
6.7 TERMINATION OF EMPLOYMENT OR RELATIONSHIP AS AN EMPLOYEE,
DIRECTOR OR CONSULTANT. In the event an Optionee's Continuous Status as an
Employee, Director or Consultant terminates (other than upon the Optionee's
death or Disability), the Optionee may exercise his or her Option, but only
within such period of time as is determined by the Board, and only to the
extent that the Optionee was entitled to exercise it at the date of
termination (but in no event later than the expiration of the term of such
Option as set forth in the Option Agreement). In the case of an Incentive
Stock Option, the Board shall determine such period of time (in no event to
exceed three (3) months from the date of termination) when the Option is
granted. If, at the date of termination, the Optionee is not entitled to
exercise his or her entire Option, the shares covered by the unexercisable
portion of the Option shall revert to the Plan. If, after
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termination, the Optionee does not exercise his or her Option within the time
specified in the Option Agreement, the Option shall terminate, and the shares
covered by such Option shall revert to the Plan.
6.8 DISABILITY OF OPTIONEE. In the event an Optionee's Continuous
Status as an Employee, Director or Consultant terminates as a result of the
Optionee's Disability, the Optionee may exercise his or her Option, but only
within twelve (12) months from the date of such termination (or such shorter
period specified in the Option Agreement), and only to the extent that the
Optionee was entitled to exercise it at the date of such termination (but in
no event later than the expiration of the term of such Option as set forth in
the Option Agreement). If, at the date of termination, the Optionee is not
entitled to exercise his or her entire Option, the shares covered by the
unexercisable portion of the Option shall revert to the Plan. If, after
termination, the Optionee does not exercise his or her Option within the time
specified herein, the Option shall terminate, and the shares covered by such
Option shall revert to the Plan.
6.9 DEATH OF OPTIONEE. In the event of the death of an Optionee,
the Option may be exercised, at any time within eighteen (18) months
following the date of death (or such shorter period specified in the Option
Agreement) (but in no event later than the expiration of the term of such
Option as set forth in the Option Agreement), by the Optionee's estate or by
a person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent the Optionee was entitled to exercise the
Option at the date of death. If, at the time of death, the Optionee was not
entitled to exercise his or her entire Option, the shares covered by the
unexercisable portion of the Option shall revert to the Plan. If, after
death, the Optionee's estate or a person who acquired the right to exercise
the Option by bequest or inheritance does not exercise the Option within the
time specified herein, the Option shall terminate, and the shares covered by
such Option shall revert to the Plan.
6.10 EARLY EXERCISE. The Option may, but need not, include a
provision whereby the Optionee may elect at any time while an Employee,
Director or Consultant to exercise the Option as to any part or all of the
shares subject to the Option prior to the full vesting of the Option. Any
nonvested shares so purchased may be subject to a repurchase right in favor
of the Company or to any other restriction the Board determines to be
appropriate.
6.11 WITHHOLDING. To the extent provided by the terms of an Option
Agreement, the Optionee may satisfy any federal, state or local tax
withholding obligation relating to the exercise of such Option by any of the
following means or by a combination of such means: (1) tendering a cash
payment; (2) authorizing the Company to withhold shares from the shares of
the common stock otherwise issuable to the participant as a result of the
exercise of the Option; or (3) delivering to the Company owned and
unencumbered shares of the common stock of the Company.
6.12 RE-LOAD OPTIONS. Without in any way limiting the authority of
the Board or Committee to make or not to make grants of Options hereunder,
the Board or Committee shall have the authority (but not an obligation) to
include as part of any Option Agreement a provision entitling the Optionee to
a further Option (a "Re-Load Option") in the event the Optionee exercises the
Option evidenced by the Option agreement, in whole or in part, by
surrendering other shares of Common Stock in accordance with this Plan and
the terms and conditions of the Option Agreement. Any such Re-Load Option
(i) shall be for a number of shares equal to the number of shares surrendered
as part or all of the exercise price of such Option; (ii) shall have an
expiration date which is the same as the expiration date of the Option the
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exercise of which gave rise to such Re-Load Option; and (iii) shall have an
exercise price which is equal to one hundred percent (100%) of the Fair
Market Value of the Common Stock subject to the Re-Load Option on the date of
exercise of the original Option or, in the case of a Re-Load Option which is
an Incentive Stock Option and which is granted to a 10% stockholder (as
described in subparagraph 5.3), shall have an exercise price which is equal
to one hundred ten percent (110%) of the Fair Market Value of the stock
subject to the Re-Load Option on the date of exercise of the original Option.
Any such Re-Load Option may be an Incentive Stock Option or a
Non-qualified Stock Option, as the Board or Committee may designate at the
time of the grant of the original Option, provided, however, that the
designation of any Re-Load Option as an Incentive Stock Option shall be
subject to the one hundred thousand dollars ($100,000) annual limitation on
exercisability of Incentive Stock Options described in subparagraph 12.4 of
the Plan and in Section 422(d) of the Code. There shall be no Re-Load
Options on a Re-Load Option. Any such Re-Load Option shall be subject to the
availability of sufficient shares under subparagraph 4.1 and shall be subject
to such other terms and conditions as the Board or Committee may determine.
7 TERMS OF STOCK BONUSES AND PURCHASES OF RESTRICTED STOCK.
Each stock bonus or restricted stock purchase agreement shall be in
such form and shall contain such terms and conditions as the Board or the
Committee shall deem appropriate. The terms and conditions of stock bonus or
restricted stock purchase agreements may change from time to time, and the
terms and conditions of separate agreements need not be identical, but each
stock bonus or restricted stock purchase agreement shall include (through
incorporation of provisions hereof by reference in the agreement or
otherwise) the substance of each of the following provisions as appropriate:
7.1 PURCHASE PRICE. The purchase price under each stock purchase
agreement shall be such amount as the Board or Committee shall determine and
designate in such agreement. Notwithstanding the foregoing, the Board or the
Committee may determine that eligible participants in the Plan may be awarded
stock pursuant to a stock bonus agreement in consideration for past services
actually rendered to the Company or for its benefit.
7.2 TRANSFERABILITY. No rights under a stock bonus or restricted
stock purchase agreement shall be assignable by any participant under the
Plan, either voluntarily or by operation of law, except where such assignment
is required by law or expressly authorized by the terms of the applicable
stock bonus or restricted stock purchase agreement.
7.3 CONSIDERATION. The purchase price of stock acquired pursuant
to a stock purchase agreement shall be paid either: (i) in cash at the time
of purchase; (ii) at the discretion of the Board or the Committee, according
to a deferred payment or other arrangement with the person to whom the stock
is sold; or (iii) in any other form of legal consideration that may be
acceptable to the Board or the Committee in their discretion.
Notwithstanding the foregoing, the Board or the Committee to which
administration of the Plan has been delegated may award stock pursuant to a
stock bonus agreement in consideration for past services actually rendered to
the Company or for its benefit.
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7.4 VESTING. Shares of stock sold or awarded under the Plan may,
but need not, be subject to a repurchase option in favor of the Company in
accordance with a vesting schedule to be determined by the Board or the
Committee.
7.5 TERMINATION OF EMPLOYMENT OR RELATIONSHIP AS AN EMPLOYEE,
DIRECTOR OR CONSULTANT. In the event a Participant's Continuous Status as an
Employee, Director or Consultant terminates, the Company may repurchase or
otherwise reacquire any or all of the shares of stock held by that person
which have not vested as of the date of termination under the terms of the
stock bonus or restricted stock purchase agreement between the Company and
such person.
8 STOCK APPRECIATION RIGHTS.
8.1 The Board or Committee shall have full power and authority,
exercisable in its sole discretion, to grant Stock Appreciation Rights to
Employees or Directors of or Consultants to, the Company or its Affiliates
under the Plan. Each such right shall entitle the holder to a distribution
based on the appreciation in the fair market value per share of a designated
amount of stock.
8.2 Three types of Stock Appreciation Rights shall be authorized
for issuance under the Plan:
8.2.1 Tandem Stock Appreciation Rights. Tandem Rights will
be granted appurtenant to an Option and will require the holder to elect
between the exercise of the underlying Option for shares of stock and the
surrender, in whole or in part, of such Option for an appreciation
distribution equal to the excess of (A) the Fair Market Value (on the date of
Option surrender) of vested shares of stock purchasable under the surrendered
Option over (B) the aggregate exercise price payable for such shares.
8.2.2 CONCURRENT STOCK APPRECIATION RIGHTS. Concurrent
Rights will be granted appurtenant to an Option and may apply to all or any
portion of the shares of stock subject to the underlying Option and will be
exercised automatically at the same time the Option is exercised for those
shares. The appreciation distribution to which the holder of such concurrent
right shall be entitled upon exercise of the underlying Option shall be in an
amount equal to the excess of (A) the aggregate fair market value (at date of
exercise) of the vested shares purchased under the underlying Option with
such concurrent rights over (B) the aggregate exercise price paid for those
shares.
8.2.3 INDEPENDENT STOCK APPRECIATION RIGHTS. Independent
Rights may be granted independently of any Option and will entitle the holder
upon exercise to an appreciation distribution equal in amount to the excess
of (A) the aggregate fair market value (at the date of exercise) of a number
of shares of stock equal to the number of vested share equivalents exercised
at such time (as described in subsection 8.3.3 over (B) the aggregate fair
market value of such number of shares of stock at the date of grant.
8.3 The terms and conditions applicable to each Tandem Right,
Concurrent Right and Independent Right shall be as follows:
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8.3.1 TANDEM RIGHTS.
8.3.1.1 Tandem Rights may be tied to either
Incentive Stock Options or Nonstatutory Stock Options. Each such right
shall, except as specifically set forth below, be subject to the same terms
and conditions applicable to the particular Option to which it pertains. If
Tandem Rights are granted appurtenant to an Incentive Stock Option, they
shall satisfy any applicable Treasury Regulations so as not to disqualify
such Option as an Incentive Stock Option under the Code.
8.3.1.2 The appreciation distribution payable on
the exercised Tandem Right shall be in cash in an amount equal to the excess
of (I) the fair market value (on the date of the Option surrender) of the
number of shares of stock covered by that portion of the surrendered Option
in which the optionee is vested over (II) the aggregate exercise price
payable for such vested shares.
8.3.2 CONCURRENT RIGHTS.
8.3.2.1 Concurrent Rights may be tied to any or all
of the shares of stock subject to any Incentive Stock Option or Nonstatutory
Stock Option grant made under the Plan. A Concurrent Right shall, except as
specifically set forth below, be subject to the same terms and conditions
applicable to the particular Option grant to which it pertains.
8.3.2.2 A Concurrent Right shall be automatically
exercised at the same time the underlying Option is exercised with respect to
the particular shares of stock to which the Concurrent Right pertains.
8.3.2.3 The appreciation distribution payable on an
exercised Concurrent Right shall be in cash in an amount equal to such
portion as shall be determined by the Board or the Committee at the time of
the grant of the excess of (I) the aggregate fair market value (on the
Exercise Date) of the vested shares of stock purchased under the underlying
Option which have Concurrent Rights appurtenant to them over (II) the
aggregate exercise price paid for such shares.
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8.3.3 INDEPENDENT RIGHTS.
8.3.3.1 Independent Rights shall, except as
specifically set forth below, be subject to the same terms and conditions
applicable to Nonstatutory Stock Options as set forth in Section 6. They
shall be denominated in share equivalents.
8.3.3.2 The appreciation distribution payable on
the exercised Independent Right shall be in an amount equal to the excess of
(I) the aggregate fair market value (on the date of the exercise of the
Independent Right) of a number of shares of Company stock equal to the number
of share equivalents in which the holder is vested under such Independent
right, and with respect to which the holder is exercising the Independent
Right on such date, over (II) the aggregate fair market value (on the date of
the grant of the Independent Right) of such number of shares of Company stock.
8.3.3.3 The appreciation distribution payable on
the exercised Independent Right may be paid, in the discretion of the Board
or the Committee, in cash, in shares of stock or in a combination of cash and
stock. Any shares of stock so distributed shall be valued at fair market
value on the date the Independent Right is exercised.
8.3.4 TERMS APPLICABLE TO TANDEM RIGHTS, CONCURRENT RIGHTS
AND INDEPENDENT RIGHTS.
8.3.4.1 To exercise any outstanding Tandem,
Concurrent or Independent Right, the holder must provide written notice of
exercise to the Company in compliance with the provisions of the instrument
evidencing such right.
8.3.4.2 If a Tandem, Concurrent, or Independent
Right is granted to an individual who is at the time subject to Section 16(b)
of the Exchange Act (a "Section 16(b) Insider"), then the instrument of grant
shall incorporate all the terms and conditions at the time necessary to
assure that the subsequent exercise of such right shall qualify for the
safe-harbor exemption from short-swing profit liability provided by Rule
16b-3 promulgated under the Exchange Act (or any successor rule or
regulation).
8.3.4.3 No limitation shall exist on the aggregate
amount of cash payments the Company may make under the Plan in connection
with the exercise of Tandem, Concurrent or Independent Rights.
9 CANCELLATION AND RE-GRANT OF OPTIONS.
The Board or the Committee shall have the authority to effect, at
any time and from time to time, with the consent of the affected holders of
Options and/or Stock Appreciation Rights, (i) the repricing of any
outstanding Options and/or any Stock Appreciation Rights under the Plan
and/or (ii) the cancellation of any outstanding Options and/or any Stock
Appreciation Rights under the Plan and the grant in substitution therefor of
new Options and/or Stock Appreciation Rights under the Plan covering the same
or different numbers of shares of stock, but having an exercise price per
share not less than one hundred percent (100%) of the Fair Market Value in
the case of an Incentive Stock Option or, in the case of a 10% stockholder
(as
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described in subparagraph 5.3), not less than one hundred ten percent (110%)
of the Fair Market Value per share of stock on the new grant date.
10 COVENANTS OF THE COMPANY.
10.1 During the terms of the Stock Awards, the Company shall keep
available at all times the number of shares of stock required to satisfy such
Stock Awards up to the number of shares of stock authorized under the Plan.
10.2 The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority as may
be required to issue and sell shares of stock under the Stock Awards;
provided, however, that this undertaking shall not require the Company to
register under the Securities Act either the Plan, any Stock Award or any
stock issued or issuable pursuant to any such Stock Award. If, after
reasonable efforts, the Company is unable to obtain from any such regulatory
commission or agency the authority which counsel for the Company deems
necessary for the lawful issuance and sale of stock under the Plan, the
Company shall be relieved from any liability for failure to issue and sell
stock under such Stock Awards unless and until such authority is obtained.
11 USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of stock pursuant to Stock Awards shall
constitute general funds of the Company.
12 MISCELLANEOUS.
12.1 The Board or the Committee shall have the power to accelerate
the time at which a Stock Award may first be exercised or the time during
which a Stock Award or any part thereof will vest, notwithstanding the
provisions in the Stock Award stating the time at which it may first be
exercised or the time during which it will vest.
12.2 Neither an Optionee nor any person to whom an Option is
transferred under subsection 6.4 shall be deemed to be the holder of, or to
have any of the rights of a holder with respect to, any shares subject to
such Option unless and until such person has satisfied all requirements for
exercise of the Option pursuant to its terms.
12.3 Nothing in the Plan or any instrument executed or Stock Award
granted pursuant thereto shall confer upon any Employee, Director,
Consultant, Optionee, or other holder of Stock Awards any right to continue
in the employ of the Company or any Affiliate (or to continue acting as a
Director or Consultant) or shall affect the right of the Company or any
Affiliate to terminate the employment or relationship as a Director or
Consultant of any Employee, Director, Consultant or Optionee with or without
cause.
12.4 To the extent that the aggregate Fair Market Value (determined
at the time of grant) of stock with respect to which Incentive Stock Options
granted after 1986 are exercisable for the first time by any Optionee during
any calendar year under all plans of the Company and its Affiliates exceeds
one hundred
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thousand dollars ($100,000), the Options or portions thereof which exceed
such limit (according to the order in which they were granted) shall be
treated as Nonstatutory Stock Options.
13 ADJUSTMENTS UPON CHANGES IN STOCK.
13.1 If any change is made in the stock subject to the Plan, or
subject to any Stock Award (through merger, consolidation, reorganization,
recapitalization, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares,
change in corporate structure or otherwise), the Plan and outstanding Stock
Awards will be appropriately adjusted in the class(es) and maximum number of
shares subject to the Plan and the class(es) and number of shares and price
per share of stock subject to outstanding Stock Awards.
13.2 In the event of: (1) a dissolution or liquidation or sale of
all or substantially all of the assets of the Company; (2) a merger or
consolidation in which the Company is not the surviving corporation; or (3) a
reverse merger in which the Company is the surviving corporation but the
shares of the Company's common stock outstanding immediately preceding the
merger are converted by virtue of the merger into other property, whether in
the form of securities, cash or otherwise, then, at the sole discretion of
the Board and to the extent permitted by applicable law: (i) any surviving
corporation shall assume any Stock Awards outstanding under the Plan or shall
substitute similar Stock Awards for those outstanding under the Plan, (ii)
such Stock Awards shall continue in full force and effect, or (iii) the time
during which such Stock Awards become vested or may be exercised shall be
accelerated and any outstanding unexercised rights under any Stock Awards
terminated if not exercised prior to such event.
14 AMENDMENT OF THE PLAN.
14.1 The Board at any time, and from time to time, may amend the
Plan. However, except as provided in Section 13 relating to adjustments upon
changes in stock, no amendment shall be effective unless approved by the
stockholders of the Company within twelve (12) months before or after the
adoption of the amendment, where the amendment will:
14.1.1 Increase the number of shares reserved for Stock
Awards under the Plan;
14.1.2 Modify the requirements as to eligibility for
participation in the Plan to the extent such modification requires
stockholder approval in order for the Plan to satisfy the requirements of
Sections 162(m) and 422 of the Code; or
14.1.3 Modify the Plan in any other way if such modification
requires stockholder approval in order for the Plan to satisfy the
requirements of Section 422 of the Code or to comply with the requirements of
Rule 16b-3.
14.2 It is expressly contemplated that the Board may amend the Plan
in any respect the Board deems necessary or advisable to provide under the
provisions of the Code and the regulations promulgated thereunder relating to
Incentive Stock Options and/or to bring the Plan and/or Incentive Stock
Options granted under it into compliance therewith.
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14.3 Rights and obligations under any Stock Award granted before
amendment of the Plan shall not be altered or impaired by any amendment of
the Plan unless (i) the Company requests the consent of the person to whom
the Stock Award was granted and (ii) such person consents in writing.
15 TERMINATION OR SUSPENSION OF THE PLAN.
15.1 The Board may suspend or terminate the Plan at any time.
Unless sooner terminated, the Plan shall terminate on midnight, January 6,
2004. No Stock Awards may be granted under the Plan while the Plan is
suspended or after it is terminated.
15.2 Rights and obligations under any Stock Award granted while the
Plan is in effect shall not be altered or impaired by suspension or
termination of the Plan, except with the consent of the person to whom the
Stock Award was granted.
16 EFFECTIVE DATE OF PLAN.
The Plan shall become effective as determined by the Board, but no
Stock Awards granted under the Plan shall be exercisable unless and until the
Plan has been approved by the stockholders of the Company.
<PAGE>
EXHIBIT 99.4
FORM OF 1994 EMPLOYEE STOCK PURCHASE PLAN
<PAGE>
NPS PHARMACEUTICALS, INC.
1994 EMPLOYEE STOCK PURCHASE PLAN
AS AMENDED 1996
1 PURPOSE.
1.1 The purpose of the Employee Stock Purchase Plan (the "Plan") is
to provide a means by which employees of NPS Pharmaceuticals, Inc., a
Delaware corporation (the "Company"), and its Affiliates, as defined in
subparagraph 1.2, which are designated as provided in subparagraph 2.2, may
be given an opportunity to purchase stock of the Company.
1.2 The word "Affiliate" as used in the Plan means any parent
corporation or subsidiary corporation of the Company, as those terms are
defined in Sections 424(e) and (f), respectively, of the Internal Revenue
Code of 1986, as amended (the "Code").
1.3 The Company, by means of the Plan, seeks to retain the services
of its employees, to secure and retain the services of new employees, and to
provide incentives for such persons to exert maximum efforts for the success
of the Company.
1.4 The Company intends that the rights to purchase stock of the
Company granted under the Plan be considered options issued under an
"employee stock purchase plan" as that term is defined in Section 423(b) of
the Code.
2 ADMINISTRATION.
2.1 The Plan shall be administered by the Board of Directors (the
"Board") of the Company unless and until the Board delegates administration
to a Committee, as provided in subparagraph 2.3. Whether or not the Board
has delegated administration, the Board shall have the final power to
determine all questions of policy and expediency that may arise in the
administration of the Plan.
2.2 The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
2.2.1 To determine when and how rights to purchase stock of
the Company shall be granted and the provisions of each offering of such
rights (which need not be identical).
2.2.2 To designate from time to time which Affiliates of
the Company shall be eligible to participate in the Plan.
2.2.3 To construe and interpret the Plan and rights granted
under it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may
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correct any defect, omission or inconsistency in the Plan, in a manner and to
the extent it shall deem necessary or expedient to make the Plan fully
effective.
2.2.4 To amend the Plan as provided in paragraph 13.
2.2.5 Generally, to exercise such powers and to perform
such acts as the Board deems necessary or expedient to promote the best
interests of the Company.
2.3 The Board may delegate administration of the Plan to a
Committee composed of not fewer than two (2) members of the Board (the
"Committee"). If administration is delegated to a Committee, the Committee
shall have, in connection with the administration of the Plan, the powers
theretofore possessed by the Board, subject, however, to such resolutions,
not inconsistent with the provisions of the Plan, as may be adopted from time
to time by the Board. The Board may abolish the Committee at any time and
revest in the Board the administration of the Plan.
3 SHARES SUBJECT TO THE PLAN.
3.1 Subject to the provisions of paragraph 12 relating to
adjustments upon changes in stock, the stock that may be sold pursuant to
rights granted under the Plan shall not exceed in the aggregate One Hundred
Sixty Thousand (160,000) shares of the Company's common stock (the "Common
Stock"). If any right granted under the Plan shall for any reason terminate
without having been exercised, the Common Stock not purchased under such
right shall again become available for the Plan.
3.2 The stock subject to the Plan may be unissued shares or
reacquired shares, bought on the market or otherwise.
4 GRANT OF RIGHTS; OFFERING.
The Board or the Committee may from time to time grant or provide
for the grant of rights to purchase Common Stock of the Company under the
Plan to eligible employees (an "Offering") on a date or dates (the "Offering
Date(s)") selected by the Board or the Committee. Each Offering shall be in
such form and shall contain such terms and conditions as the Board or the
Committee shall deem appropriate. If an employee has more than one right
outstanding under the Plan, unless he or she otherwise indicates in
agreements or notices delivered hereunder: (1) each agreement or notice
delivered by that employee will be deemed to apply to all of his or her
rights under the Plan, and (2) a right with a lower exercise price (or an
earlier-granted right, if two rights have identical exercise prices), will be
exercised to the fullest possible extent before a right with a higher
exercise price (or a later-granted right, if two rights have identical
exercise prices) will be exercised. The provisions of separate Offerings
need not be identical, but each Offering shall include (through incorporation
of the provisions of this Plan by reference in the Offering or otherwise) the
substance of the provisions contained in paragraphs 5 through 8, inclusive.
5 ELIGIBILITY.
5.1 Rights may be granted only to employees of the Company or, as
the Board or the Committee may designate as provided in subparagraph 2.2, to
employees of any Affiliate of the Company.
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Except as provided in subparagraph 5.2, an employee of the Company or any
Affiliate shall not be eligible to be granted rights under the Plan, unless,
on the Offering Date, such employee has been in the employ of the Company or
any Affiliate for such continuous period preceding such grant as the Board or
the Committee may require, but in no event shall the required period of
continuous employment be equal to or greater than two (2) years. In
addition, unless otherwise determined by the Board or the Committee and set
forth in the terms of the applicable Offering, no employee of the Company or
any Affiliate shall be eligible to be granted rights under the Plan, unless,
on the Offering Date, such employee's customary employment with the Company
or such Affiliate is at least twenty (20) hours per week and at least five
(5) months per calendar year.
5.2 The Board or the Committee may provide that, each person who,
during the course of an Offering, first becomes an eligible employee of the
Company or designated Affiliate will, on a date or dates specified in the
Offering which coincides with the day on which such person becomes an
eligible employee or occurs thereafter, receive a right under that Offering,
which right shall thereafter be deemed to be a part of that Offering. Such
right shall have the same characteristics as any rights originally granted
under that Offering, as described herein, except that:
5.2.1 the date on which such right is granted shall be the
"Offering Date" of such right for all purposes, including determination of
the purchase price of such right;
5.2.2 the Offering Period (as defined below) for such right
shall begin on its Offering Date and end coincident with the end of such
Offering; and
5.2.3 the Board or the Committee may provide that if such
person first becomes an eligible employee within a specified period of time
before the end of the Offering Period (as defined below) for such Offering,
he or she will not receive any right under that Offering.
5.3 No employee shall be eligible for the grant of any rights under
the Plan if, immediately after any such rights are granted, such employee
owns stock possessing five percent (5%) or more of the total combined voting
power or value of all classes of stock of the Company or of any Affiliate.
For purposes of this subparagraph 5.3, the rules of Section 424(d) of the
Code shall apply in determining the stock ownership of any employee, and
stock which such employee may purchase under all outstanding rights and
options shall be treated as stock owned by such employee.
5.4 An eligible employee may be granted rights under the Plan only
if such rights, together with any other rights granted under "employee stock
purchase plans" of the Company and any Affiliates, as specified by Section
423(b)(8) of the Code, do not permit such employee's rights to purchase stock
of the Company or any Affiliate to accrue at a rate which exceeds twenty-five
thousand dollars ($25,000) of fair market value of such stock (determined at
the time such rights are granted) for each calendar year in which such rights
are outstanding at any time.
5.5 Officers of the Company and any designated Affiliate shall be
eligible to participate in Offerings under the Plan, provided, however, that
the Board may provide in an Offering that certain employees who are highly
compensated employees within the meaning of Section 423(b)(4)(D) of the Code
shall not be eligible to participate.
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6 RIGHTS; PURCHASE PRICE.
6.1 On each Offering Date, each eligible employee, pursuant to an
Offering made under the Plan, shall be granted the right to purchase up to
the number of shares of Common Stock of the Company purchasable with a
percentage designated by the Board or the Committee not exceeding fifteen
percent (15%) of such employee's Earnings (as defined in Section 7(a)) during
the period which begins on the Offering Date (or such later date as the Board
or the Committee determines for a particular Offering) and ends on the date
stated in the Offering, which date shall be no more than twenty-seven (27)
months after the Offering Date (the "Offering Period"). In connection with
each Offering made under this Plan, the Board or the Committee shall specify
a maximum number of shares which may be purchased by any employee as well as
a maximum aggregate number of shares which may be purchased by all eligible
employees pursuant to such Offering. In addition, in connection with each
Offering which contains more than one Purchase Date and a corresponding
Purchase Period (as defined in the Offering), the Board or the Committee may
specify a maximum aggregate number of shares which may be purchased by all
eligible employees on any given Purchase Date under the Offering. If the
aggregate purchase of shares upon exercise of rights granted under the
Offering would exceed any such maximum aggregate number, the Board or the
Committee shall make a pro rata allocation of the shares available in as
nearly a uniform manner as shall be practicable and as it shall deem to be
equitable.
6.2 The purchase price of stock acquired pursuant to rights granted
under the Plan shall be not less than the lesser of:
6.2.1 an amount equal to eighty-five percent (85%) of the
fair market value of the stock on the Offering Date; or
6.2.2 an amount equal to eighty-five percent (85%) of the
fair market value of the stock on the Purchase Date.
6.3 In the event that the fair market value of the shares on a
Purchase Date of an Offering Period is less than the fair market value of the
shares on the Offering Date for such Offering Period, then every participant
shall automatically (a) be withdrawn from such Purchase Period at the close
of such Purchase Date (after the acquisition of shares for such Purchase
Period), and (b) be re-enrolled on the first business day subsequent to such
Purchase Date with such date now constituting the "Offering Date" for all
purposes, including determination of the Purchase Price of such right.
7 PARTICIPATION; WITHDRAWAL; TERMINATION.
7.1 An eligible employee may become a participant in an Offering by
delivering a participation agreement to the Company within the time specified
in the Offering, in such form as the Company provides. Each such agreement
shall authorize payroll deductions of up to the maximum percentage specified
by the Board or the Committee of such employee's Earnings during the Offering
Period. "Earnings" is defined as the total compensation paid to an employee,
including all salary, wages (including amounts elected to be deferred by the
employee, that would otherwise have been paid, under any cash or deferred
arrangement established by the Company), overtime pay, commissions, bonuses,
and other remuneration paid directly to the employee, but excluding profit
sharing, the cost of employee benefits paid
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for by the Company, education or tuition reimbursements, imputed income
arising under any Company group insurance or benefit program, traveling
expenses, business and moving expense reimbursements, income received in
connection with stock options, contributions made by the Company under any
employee benefit plan, and similar items of compensation. The payroll
deductions made for each participant shall be credited to an account for such
participant under the Plan and shall be deposited with the general funds of
the Company. A participant may reduce (including to zero), increase or begin
such payroll deductions after the beginning of any Purchase Period only as
provided for in the Offering. A participant may make additional payments
into his or her account only if specifically provided for in the Offering and
only if the participant has not had the maximum amount withheld during the
Purchase Period.
7.2 At any time during an Offering Period a participant may
terminate his or her payroll deductions under the Plan and withdraw from the
Offering by delivering to the Company a notice of withdrawal in such form as
the Company provides. Such withdrawal may be elected at any time prior to
the end of the Offering Period except as provided by the Board or the
Committee in the Offering. Upon such withdrawal from the Offering by a
participant, the Company shall distribute to such participant all of his or
her accumulated payroll deductions (reduced to the extent, if any, such
deductions have been used to acquire stock for the participant) under the
Offering, without interest, and such participant's interest in that Offering
shall be automatically terminated. A participant's withdrawal from an
Offering will have no effect upon such participant's eligibility to
participate in any other Offerings under the Plan but such participant will
be required to deliver a new participation agreement in order to participate
in subsequent Offerings under the Plan.
7.3 Rights granted pursuant to any Offering under the Plan shall
terminate immediately upon cessation of any participating employee's
employment with the Company and any designated Affiliate, for any reason, and
the Company shall distribute to such terminated employee all of his or her
accumulated payroll deductions (reduced to the extent, if any, such
deductions have been used to acquire stock for the terminated employee),
under the Offering, without interest.
7.4 Rights granted under the Plan shall not be transferable, and,
except as provided in Section 14, shall be exercisable only by the person to
whom such rights are granted.
8 EXERCISE.
8.1 On each purchase date, as defined in the relevant Offering (a
"Purchase Date"), each participant's accumulated payroll deductions and other
additional payments specifically provided for in the Offering (without any
increase for interest) will be applied to the purchase of whole shares of
stock of the Company, up to the maximum number of shares permitted pursuant
to the terms of the Plan and the applicable Offering, at the purchase price
specified in the Offering. No fractional shares shall be issued upon the
exercise of rights granted under the Plan. The amount, if any, of
accumulated payroll deductions remaining in each participant's account after
the purchase of shares which is less than the amount required to purchase one
share of stock on the final Purchase Date of an Offering shall be held in
each such participant's account for the purchase of shares under the next
Offering under the Plan, unless such participant withdraws from such next
Offering, as provided in subparagraph 7.2, or is no longer eligible to be
granted rights under the Plan, as provided in paragraph 5, in which case such
amount shall be distributed to the participant after said final Purchase Date
of the Offering, without interest. The amount, if any, of
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accumulated payroll deductions remaining in any participant's account after
the purchase of shares which is equal to the amount required to purchase
whole shares of stock on the final Purchase Date of an Offering shall be
distributed in full to the participant after such Purchase Date, without
interest.
8.2 No rights granted under the Plan may be exercised to any extent
unless the Plan (including rights granted thereunder) is covered by an
effective registration statement pursuant to the Securities Act of 1933, as
amended (the "Securities Act"). If on a Purchase Date of any Offering
hereunder the Plan is not so registered, no rights granted under the Plan or
any Offering shall be exercised on said Purchase Date and the Purchase Date
shall be delayed until the Plan is subject to such an effective registration
statement, except that the Purchase Date shall not be delayed more than two
(2) months and the Purchase Date shall in no event be more than twenty-seven
(27) months from the Offering Date. If on the Purchase Date of any Offering
hereunder, as delayed to the maximum extent permissible, the Plan is not
registered, no rights granted under the Plan or any Offering shall be
exercised and all payroll deductions accumulated during the Offering Period
(reduced to the extent, if any, such deductions have been used to acquire
stock) shall be distributed to the participants, without interest.
9 COVENANTS OF THE COMPANY.
9.1 During the terms of the rights granted under the Plan, the
Company shall keep available at all times the number of shares of stock
required to satisfy such rights.
9.2 The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority as may
be required to issue and sell shares of stock upon exercise of the rights
granted under the Plan. If, after reasonable efforts, the Company is unable
to obtain from any such regulatory commission or agency the authority which
counsel for the Company deems necessary for the lawful issuance and sale of
stock under the Plan, the Company shall be relieved from any liability for
failure to issue and sell stock upon exercise of such rights unless and until
such authority is obtained.
10 USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of stock pursuant to rights granted under the
Plan shall constitute general funds of the Company.
11 RIGHTS AS A STOCKHOLDER.
A participant shall not be deemed to be the holder of, or to have
any of the rights of a holder with respect to, any shares subject to rights
granted under the Plan unless and until the participant's shareholdings
acquired upon exercise of rights hereunder are recorded in the books of the
Company.
12 ADJUSTMENTS UPON CHANGES IN STOCK.
12.1 If any change is made in the stock subject to the Plan, or
subject to any rights granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange
of shares, change in corporate structure or otherwise), the Plan and
outstanding rights will be appropriately adjusted in the
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class(es) and maximum number of shares subject to the Plan and the class(es)
and number of shares and price per share of stock subject to outstanding
rights.
12.2 In the event of: (1) a dissolution or liquidation of the
Company; (2) a merger or consolidation in which the Company is not the
surviving corporation; (3) a reverse merger in which the Company is the
surviving corporation but the shares of the Company's Common Stock
outstanding immediately preceding the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash or
otherwise; or (4) any other capital reorganization in which more than fifty
percent (50%) of the shares of the Company entitled to vote are exchanged,
then, as determined by the Board in its sole discretion (i) any surviving
corporation may assume outstanding rights or substitute similar rights for
those under the Plan, (ii) such rights may continue in full force and effect,
or (iii) participants' accumulated payroll deductions may be used to purchase
Common Stock immediately prior to the transaction described above and the
participants' rights under the ongoing Offering terminated.
13 AMENDMENT OF THE PLAN.
13.1 The Board at any time, and from time to time, may amend the
Plan. However, except as provided in paragraph 12 relating to adjustments
upon changes in stock, no amendment shall be effective unless approved by the
stockholders of the Company within twelve (12) months before or after the
adoption of the amendment, where the amendment will:
13.1.1 Increase the number of shares reserved for rights under
the Plan;
13.1.2 Modify the provisions as to eligibility for
participation in the Plan (to the extent such modification requires
stockholder approval in order for the Plan to obtain employee stock
purchase plan treatment under Section 423 of the Code or to comply with the
requirements of Rule 16b-3 promulgated under the Securities Exchange Act of
1934, as amended ("Rule 16b-3")); or
13.1.3 Modify the Plan in any other way if such modification
requires stockholder approval in order for the Plan to obtain employee
stock purchase plan treatment under Section 423 of the Code or to comply
with the requirements of Rule 16b-3.
It is expressly contemplated that the Board may amend the Plan in any respect
the Board deems necessary or advisable to provide eligible employees with the
maximum benefits provided or to be provided under the provisions of the Code
and the regulations promulgated thereunder relating to employee stock
purchase plans and/or to bring the Plan and/or rights granted under it into
compliance therewith.
13.2 Rights and obligations under any rights granted before
amendment of the Plan shall not be altered or impaired by any amendment of
the Plan, except with the consent of the person to whom such rights were
granted or except as necessary to comply with any laws or governmental
regulation.
14 DESIGNATION OF BENEFICIARY.
14.1 A participant may file a written designation of a beneficiary
who is to receive any shares and cash, if any, from the participant's account
under the Plan in the event of such participant's death
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subsequent to the end of an Offering but prior to delivery to him of such
shares and cash. In addition, a participant may file a written designation
of a beneficiary who is to receive any cash from the participant's account
under the Plan in the event of such participant's death during an Offering
Period.
14.2 Such designation of beneficiary may be changed by the
participant at any time by written notice. In the event of the death of a
participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such participant's death, the Company shall
deliver such shares and/or cash to the executor or administrator of the
estate of the participant, or if no such executor or administrator has been
appointed (to the knowledge of the Company, the Company, in its discretion,
may deliver such shares and/or cash to the spouse or to any one or more
dependents or relatives of the participant, or if no spouse, dependent or
relative is known to the Company, then to such other person as the Company
may designate.
15 TERMINATION OR SUSPENSION OF THE PLAN.
15.1 The Board may suspend or terminate the Plan at any time.
Unless sooner terminated, the Plan shall terminate on midnight, January 6,
2004. No rights may be granted under the Plan while the Plan is suspended or
after it is terminated.
15.2 Rights and obligations under any rights granted while the Plan
is in effect shall not be altered or impaired by suspension or termination of
the Plan, except with the consent of the person to whom such rights were
granted or except as necessary to comply with any laws or governmental
regulation.
16 EFFECTIVE DATE OF PLAN.
The Plan shall become effective as determined by the Board, but no
rights granted under the Plan shall be exercised unless and until the Plan
has been approved by the stockholders of the Company.
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