<PAGE> 1
As filed with the Securities and Exchange Commission on October 30, 1998
Registration No. 333-________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
LXR BIOTECHNOLOGY INC.
---------------------------------------------------
(Exact Name of Company as Specified in Its Charter)
Delaware 680282856
---------------------------- -------------------
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Identification No.)
Organization)
1401 Marina Way South, Richmond, California 94804
-------------------------------------------------
(Address of Principal Executive Offices)
1993 Stock Option Plan
Other Written Compensation Contracts
------------------------------------
(Full Title of the Plan)
Shelli Geer
Chief Financial Officer
LXR Biotechnology Inc.
1401 Marina Way South, Richmond, California 94804
-------------------------------------------------
(Name and Address of Agent For Service)
(510) 412-9100
---------------------------------------
(Telephone Number, Including Area Code,
of Agent For Service)
Copy to:
Timothy Hoxie
Heller Ehrman White & McAuliffe
333 Bush Street, San Francisco, California 94104-2878
(415) 772-6000
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=========================================================================================
Proposed Proposed
Maximum Maximum
Amount Offering Aggregate Amount of
Title of Securities to be Price Offering Registration
to be Registered Registered per Share(1) Price Fee
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock issuable under 3,100,000 $0.9375 $2,906,250 $808
the 1993 Stock Option Plan,
$0.0001 par value
Common Stock issuable under 860,000 $0.9375 $ 806,250 $224
other written compensation
contracts, $0.0001 par value
=========================================================================================
</TABLE>
(1) Estimated solely for the purpose of computing the amount of registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, as amended, based
on the average of the high and low prices of the Company's Common Stock
reported on the American Stock Exchange on October 27, 1998.
================================================================================
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange
Commission (the "Commission") by LXR Biotechnology Inc. (the "Company") are
incorporated by reference in this registration statement:
(a) The Company's annual report filed on Form 10-KSB/A for the fiscal
year ended December 31, 1997;
(b) The Company's quarterly reports on Form 10-Q for the periods
ended March 30, 1998 and June 30, 1998;
(c) The Company's current reports on Form 8-K, filed on January 7,
1998, March 17, 1998, April 16, 1998, April 29, 1998, and June 23, 1998.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The validity of the shares of Common Stock offered hereby has been
passed upon by Heller Ehrman White & McAuliffe, 333 Bush Street, San Francisco
California 94104. Neil Flanzraich, a former shareholder of, and currently
counsel to, that law firm is a member of the Board of Directors of the Company.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Certificate of Incorporation includes a provision that
eliminates the personal liability of its directors to the Company or its
stockholders for monetary damages for breach of fiduciary duty as a director to
the maximum extent permitted by Delaware law. Delaware law does not permit
liability to be eliminated (i) for any breach of a director's duty of loyalty to
the Company or its stockholders, (ii) for acts or omissions not in good faith or
that involve intentional misconduct or a knowing violation of law, (iii) for
unlawful payments of dividends or unlawful stock repurchases or redemptions, as
provided in Section 174 of Delaware law or (iv) for any transaction from which
the director derived an improper personal benefit.
The Bylaws of the Company also provide that the Company shall indemnify
its directors and executive officers to the fullest extent permitted by Delaware
law, including those circumstances in which indemnification would otherwise be
discretionary, subject to certain exceptions. The Bylaws provide that the
Company will advance to directors and executive officers expenses incurred in
connection with an action or proceeding as to which they may be entitled to
indemnification, subject to certain exceptions.
The Company has entered into indemnification agreements with each of its
directors and executive officers that provide the maximum indemnity allowed to
directors and executive officers by Delaware law and the Company's Bylaws,
subject to certain exceptions, as well as certain additional procedural
protections. In addition, the indemnification agreements provide generally that
the Company will advance expenses incurred by directors and executive officers
in any action or proceeding as to which they may be entitled to indemnification,
subject to certain exceptions.
The indemnification provisions in the Company's Bylaws, and the
indemnity agreements entered into between the Company and its directors and
executive officers, may permit indemnification for liabilities arising under the
Securities Act of 1933 (the "Securities Act"). Insofar as indemnification for
liabilities arising under the Securities Act may be permitted to directors,
officers and controlling persons of the Company pursuant to the
II-1
<PAGE> 3
foregoing provisions, or otherwise, the Company has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable.
ITEM 8. EXHIBITS
<TABLE>
<S> <C>
5 Opinion of Heller Ehrman White & McAuliffe
23.1 Consent of KPMG Peat Marwick LLP, Independent Auditors
23.2 Consent of Heller Ehrman White & McAuliffe (filed as part of Exhibit 5)
24 Power of Attorney (See page II-5)
99.1 1993 Stock Option Plan, as amended
*99.2 September 24, 1996 Compensation Contract between the Company
and Dr. Donald H. Picker
**99.3 April 20, 1998 Compensation Contract between the Company and
G. Kirk Raab
99.4 March 1998 Supplemental Option Plan for Directors
</TABLE>
* Incorporated by reference to Exhibit Number 10.34 to September 1996 Form
10QSB.
** Incorporated by reference to Exhibit Number 10.48 to June 30, 1998 Form 10Q.
ITEM 9. UNDERTAKINGS
A. The undersigned Company hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933, as amended (the "Securities
Act");
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
provided, however, that paragraphs A(1)(i) and A(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Company pursuant to
Section 13 or 15(d) of the Exchange Act that are incorporated by reference in
the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned Company hereby undertakes that, for purposes of
determining liability under the Securities Act, each filing of the Company's
annual report pursuant to Section 13(a) or 15(d) of the Exchange Act that is
incorporated by reference in the registration statement shall be deemed a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-2
<PAGE> 4
C. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act, the Company
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 Richmond, State of California, on this 30th day of
October, 1998.
LXR Biotechnology Inc.
By: /s/ Shelli J. Geer
-------------------------------------
Shelli J. Geer
Chief Financial Officer and Secretary
(Principal Accounting Officer)
II-4
<PAGE> 6
POWER OF ATTORNEY TO SIGN AMENDMENTS
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint Paul J. Hastings, Shelli J. Geer, and
Timothy Hoxie, or any of them, each with full power of substitution, such
person's true and lawful attorneys-in-fact and agents for such person in such
person's name, place and stead, in any and all capacities, to sign any or all
amendments (including post-effective amendments) to this Registration Statement
on Form S-8 and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises in order to effectuate the same as fully, to all intents and
purposes, as he or such person might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents may lawfully do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement on Form S-8 has been signed by the following persons in the capacities
and on the dates indicated.
<TABLE>
<CAPTION>
Signature Capacity Date
- ----------------------------- ------------------------------------- ----------------
<S> <C> <C>
/s/ Paul J. Hastings Chief Executive Officer, President October 26, 1998
- ----------------------------- and Director
Paul J. Hastings (Principal Executive Officer)
/s/ G. Kirk Raab Chairman of the Board of Directors October 26, 1998
- -----------------------------
G. Kirk Raab
/s/ L. David Tomei Director October 26, 1998
- -----------------------------
L. David Tomei, Ph.D.
/s/ Eugene Eidenberg
- ---------------------------- Director October 26, 1998
Eugene Eidenberg
Director October 26, 1998
- -----------------------------
Neil Flanzraich
/s/ Brian Brookover Director October 26, 1998
- -----------------------------
Brian Brookover
/s/ Kenneth R. McGuire Director October 26, 1998
- -----------------------------
Kenneth R. McGuire
</TABLE>
II-5
<PAGE> 7
<TABLE>
<S> <C> <C>
/s/ William R. Hambrecht Director October 26, 1998
- -----------------------------
William R. Hambrecht
/s/ John C. Kane Director October 26, 1998
- -----------------------------
John C. Kane
/s/ Shelli J. Geer Chief Financial Officer and October 26, 1998
- ----------------------------- Secretary (Principal Financial and
Shelli J. Geer Accounting Officer)
</TABLE>
II-6
<PAGE> 8
Index to Exhibits
<TABLE>
<CAPTION>
Item
No. Description of Item
- ---- ------------------------------------------------------
<S> <C>
5 Opinion of Heller Ehrman White & McAuliffe
23.1 Consent of KPMG Peat Marwick LLP, Independent Auditors
23.2 Consent of Heller Ehrman White & McAuliffe
(filed as part of Exhibit 5)
24 Power of Attorney (See page II-5)
99.1 1993 Stock Option Plan, as amended
*99.2 September 24, 1996 Compensation Contract between the
Company and Dr. Donald H. Picker.
**99.3 April 20, 1998 Compensation Contract between the
Company and G. Kirk Raab
99.4 March 1998 Supplemental Option Plan for Directors
</TABLE>
* Incorporated by reference to Exhibit Number 10.34 to September 1996 Form
10QSB.
** Incorporated by reference to Exhibit Number 10.48 to June 30, 1998 Form 10Q.
<PAGE> 1
EXHIBIT 5
October 23, 1998
24052-0001
LXR Biotechnology Inc.
1401 Marina Way South
Richmond, California 94804
RE: REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We have acted as counsel to LXR Biotechnology Inc., a Delaware
corporation (the "Company"), in connection with the Registration Statement on
Form S-8 (the "Registration Statement") that the Company proposes to file with
the Securities and Exchange Commission on or about October 26, 1998 for the
purpose of registering under the Securities Act of 1933, as amended, 3,960,000
shares of its Common Stock, par value $0.0001 (the "Shares"), of which 3,100,000
Shares are issuable under the Company's 1993 Stock Option Plan (the "Plan") and
860,000 Shares are issuable under other Written Compensation Contracts and the
March 1998, Supplemental Option Plan for Directors (collectively, the
"Compensation Contracts") issued to certain officers and directors of the
Company.
We have assumed the authenticity of all records, documents and
instruments submitted to us as originals, the genuineness of all signatures, the
legal capacity of natural persons and the conformity to the originals of all
records, documents and instruments submitted to us as copies.
In rendering our opinion, we have examined the following records,
documents and instruments:
(a) the Amended and Restated Certificate of Incorporation of the
Company, certified by the Delaware Secretary of State as of
October 23, 1998, and certified to us by an officer of the
Company as being complete and in full force as of the date of
this opinion;
(b) the Bylaws of the Company certified to us by an officer of the
Company as being complete and in full force and effect as of the
date of this opinion;
(c) a certificate of an officer of the Company attaching as to
certain legal and factual matters;
(d) the Registration Statement;
(e) the Plan;
<PAGE> 2
(f) the Compensation Contracts; and
(g) a letter from Continental Stock Transfer and Trust Company, the
Company's transfer agent, dated September 6, 1998, as to the
number of shares of the Company's Common Stock that were
outstanding on that date.
This opinion is limited to the federal law of the United States of
America and the General Corporation Law of the State of Delaware. We disclaim
any opinion as to the laws of any other jurisdiction. We further disclaim any
opinion as to any other statute, rule, regulation, ordinance, order or other
promulgation of any other jurisdiction or any regional or local governmental
body as to any related judicial or administrative opinion.
Based upon the foregoing and our examination of such questions of law as
we have deemed necessary or appropriate for the purpose of this opinion, and
assuming that (i) the Registration Statement becomes and remains effective
during the period when the Shares are offered and issued, (ii) the full
consideration stated in the Plan or the Compensation Contracts, as applicable,
is paid for each Share and such consideration in respect of each Share includes
payment of cash or other lawful consideration at least equal to the par value
thereof and (iii) all applicable securities laws are complied with, it is our
opinion that when issued and sold by the Company the Shares will be legally
issued, fully paid and nonassessable.
This opinion is rendered to you in connection with the Registration
Statement and is solely for your benefit. This opinion may not be relied upon by
you for any other purpose, or relied upon by any other person, firm, corporation
or other entity for any purpose, without our prior written consent. We disclaim
any obligation to advise you of any change of law that occurs, or any facts of
which we may become aware, after the date of this opinion.
We consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ HELLER EHRHAN WHITE & MCAULIFFE
------------------------------------
<PAGE> 1
EXHIBIT 23.1
Consent of Independent Auditors
The Board of Directors
LXR Biotechnology, Inc.:
We consent to the use of our report incorporated herein by reference.
Our report dated February 13, 1998 contains an explanatory paragraph that states
that the Company has suffered recurring losses from operations that raise
substantial doubt about its ability to continue as a going concern. The
consolidated financial statements do not include any adjustments that might
result from the outcome of that uncertainty.
/s/ KPMG PEAT MARWICK LLP
----------------------------
San Francisco, California
October 26, 1998
<PAGE> 1
EXHIBIT 99.1
LXR BIOTECHNOLOGY INC.
1993 STOCK OPTION PLAN
As adopted May 20, 1993 and
amended through June 11, 1998
1. PURPOSE. This 1993 Stock Option Plan ("Plan") is established as a
compensatory plan to attract, retain and provide equity incentives to selected
persons to promote the financial success of LXR Biotechnology Inc., a Delaware
corporation, (the "Company"). Capitalized terms not previously defined herein
are defined in Section 17 of this Plan.
2. TYPES OF OPTIONS AND SHARES. Options granted under this Plan (the
"Options") may be either (a) incentive stock options ("ISOs") within the meaning
of Section 422 of the Internal Revenue Code of 1986, as amended (the "Revenue
Code"), or (b) nonqualified stock options ("NQSOs"), as designated at the time
of grant. The shares of stock that may be purchased upon exercise of Options
granted under this Plan (the "Shares") are shares of the common stock, $0.0001
par value per share, of the Company.
3. NUMBER OF SHARES. The aggregate number of Shares that may be issued
pursuant to Options granted under this Plan is 3,849,850 Shares, subject to
adjustment as provided in this Plan. "Named Executive Officers" (as that term is
defined in Item 402(a)(3) of Regulation S-K promulgated under the Exchange Act
of 1934, as amended, (the "Exchange Act") shall each be eligible to receive up
to an aggregate maximum of 2,000,000 Shares over the term of the Plan. If any
Option expires or is terminated without being exercised in whole or in part, the
unexercised or released Shares from such Option shall be available for future
grant and purchase under this Plan. At all times during the term of this Plan,
the Company shall reserve and keep available such number of Shares as shall be
required to satisfy the requirements of outstanding Options under this Plan.
4. ELIGIBILITY. Options may be granted to employees, officers, directors,
consultants, independent contractors and advisers (provided such consultants,
contractors and advisers render bona fide services not in connection with the
offer and sale of securities in a capital-raising transaction) of the Company or
any Parent, Subsidiary or Affiliate of the Company. ISOs may be granted only to
employees (including officers and directors who are also employees) of the
Company or a Parent or Subsidiary of the Company. The Committee (as defined in
Section 14) in its sole discretion shall select the recipients of Options
("Optionees"). An Optionee may be granted more than one Option under this Plan.
The Company may also, from time to time, substitute or assume outstanding
options granted by another company, whether in connection with an acquisition of
such other company or otherwise, by either (a) granting an Option under this
Plan in replacement of the option assumed by the Company, or (b) treating the
assumed option as if it had been granted under this Plan if the terms of such
assumed option could be applied to an Option granted under this Plan. Such
substitution or assumption shall be permissible if the holder of the substituted
or assumed option would have been eligible to be granted an Option hereunder if
the other company had applied the rules of this Plan to such grant.
5. TERMS AND CONDITIONS OF OPTIONS. The Committee shall determine whether
each Option is to be an ISO or an NQSO, the number of Shares subject to the
Option, the exercise price of the Option, the period during which the Option may
be exercised, and all other terms and conditions of the Option, subject to the
following:
5.1 Form of Option Grant. Each Option granted under this Plan shall
be evidenced by a written Stock Option Grant (the "Grant") in such form (which
need not be the same for each Optionee) as the Committee shall from time to time
approve, which Grant shall comply with and be subject to the terms and
conditions of this Plan.
<PAGE> 2
5.2 Date of Grant. The date of grant of an Option shall be the date
on which the Committee makes the determination to grant such Option unless
otherwise specified by the Committee. The Grant representing the Option will be
delivered to Optionee with a copy of this Plan within a reasonable time after
the granting of the Option.
5.3 Exercise Price. The exercise price of an Option shall be not less
than 100% of the Fair Market Value of the Shares on the date the Option is
granted. The exercise price of any Option granted to a person owning more than
l0% of the total combined voting power of all classes of stock of the Company or
any Parent or Subsidiary of the Company ("Ten Percent Shareholder") shall not be
less than 110% of the Fair Market Value of the Shares on the date the Option is
granted.
5.4 Exercise Period. Options shall be exercisable within the times or
upon the events determined by the Committee as set forth in the Grant; provided,
however, that no Option shall be exercisable after the expiration of ten (10)
years from the date the Option is granted, and provided further that no ISO
granted to a Ten Percent Stockholder shall be exercisable after the expiration
of five (5) years from the date the Option is granted.
5.5 Limitations on ISOs. The aggregate Fair Market Value (determined
as of the time an Option is granted) of stock with respect to which ISOs are
exercisable for the first time by an Optionee during any calendar year (under
this Plan or under any other incentive stock option plan of the Company or any
Parent or Subsidiary of the Company) shall not exceed $100,000. If the Fair
Market Value of Shares with respect to which ISOs are exercisable for the first
time by an Optionee during any calendar year exceeds $100,000, the Options for
the first $100,000 worth of Shares to become exercisable in such year shall be
ISOs and the Options for the amount in excess of $100,000 that becomes
exercisable in that year shall be NQSOs. In the event that the Revenue Code or
the regulations promulgated thereunder are amended after the effective date of
this Plan to provide for a different limit on the Fair Market Value of Shares
permitted to be subject to ISOs, such different limit shall be incorporated
herein and shall apply to any Options granted after the effective date of such
amendment.
5.6 Options Non-Transferable. Options granted under this Plan, and
any interest therein, shall not be transferable or assignable by Optionee, and
may not be made subject to execution, attachment or similar process, otherwise
than by will or by the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined by the Revenue Code or Title I of
the Employee Retirement Income Security Act, or the rules thereunder, and shall
be exercisable during the lifetime of Optionee only by Optionee; provided,
however, that NQSOs held by officers or directors of the Company or other
persons whose transactions in the Company's common stock are subject to Section
16(b) of the Exchange Act may be transferred to such family members, trusts and
charitable institutions as the Committee, in its sole discretion, shall approve
at the time of the grant of such Option.
5.7 Assumed Options. In the event the Company assumes an option granted
by another company, the terms and conditions of such option shall remain
unchanged (except the exercise price and the number and nature of shares
issuable upon exercise, which will be adjusted appropriately pursuant to Section
424 of the Revenue Code). In the event the Company elects to grant a new option
rather than assuming an existing option (as specified in Section 4), such new
option need not be granted at Fair Market Value on the date of grant and may
instead be granted with a similarly adjusted exercise price.
6. EXERCISE OF OPTIONS.
6.1 Notice. Options may be exercised only by delivery to the Company
of a written stock option exercise agreement (the "Exercise Agreement") in a
form approved by the Committee (which need not be the same for each Optionee),
stating the number of Shares being purchased, the restrictions imposed on the
Shares, if any, and such representations and agreements regarding Optionee's
investment intent and access to information, if any, as may be required by the
Company to comply with applicable securities laws, together with payment in full
of the exercise price for the number of Shares being purchased.
6.2 Payment. Payment for the Shares may be made in cash (by check)
or, where approved by the Committee in its sole discretion and where permitted
by law: (a) by cancellation of indebtedness of the Company to the Optionee; (b)
by surrender of shares of common stock of the Company having a Fair Market Value
equal to the
2
<PAGE> 3
applicable exercise price of the Options that have been owned by Optionee for
more than six (6) months (and which have been paid for within the meaning of the
Securities and Exchange Commission ("SEC") Rule 144 and, if such Shares were
purchased from the Company by use of a promissory note, such note has been fully
paid with respect to such shares), or were obtained by Optionee in the open
public market; (c) by waiver of compensation due or accrued to Optionee for
services rendered; (d) provided that a public market for the Company's stock
exists, through a "same day sale" commitment from Optionee and a broker-dealer
that is a member of the National Association of Securities Dealers (an "NASD
Dealer") whereby Optionee irrevocably elects to exercise the Option and to sell
a portion of the Shares so purchased to pay for the exercise price and whereby
the NASD Dealer irrevocably commits upon receipt of such Shares to forward the
exercise price directly to the Company; (e) provided that a public market for
the Company's stock exists, through a "margin" commitment from Optionee and an
NASD Dealer whereby Optionee irrevocably elects to exercise the Option and to
pledge the Shares so purchased to the NASD Dealer in a margin account as
security for a loan from the NASD Dealer in the amount of the exercise price,
and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to
forward the exercise price directly to the Company; or (f) by any combination of
the foregoing.
6.3 Withholding Taxes. The Optionee shall pay to the Company promptly
upon exercise of an option (the "Tax Date"), all applicable federal, state,
local and foreign withholding taxes that the Committee, in its discretion,
determines to result upon exercise of an Option or from transfer or other
disposition of shares of Common Stock acquired upon exercise of an Option or
otherwise related to an Option or Shares of Common Stock acquired in connection
with an Option. Where approved by the Committee in its sole discretion, Optionee
may provide for payment of withholding taxes upon exercise of the Option by
requesting that the Company retain Shares with a Fair Market Value equal to the
minimum amount of taxes required to be withheld, determined on the date that the
amount of tax to be withheld is to be determined. If the Optionee has not made
other adequate provision for payment of all applicable withholding taxes
resulting from the exercise of an Option or the lapse of any restrictions on
shares acquired through the exercise of an option, the Company may withhold the
requisite amounts from any other amounts due from the Company to the Optionee.
6.4 Limitations on Exercise. Notwithstanding the exercise periods set
forth in the Grant, unless otherwise expressly permitted by the Committee for
NQSOs, exercise of an Option shall always be subject to the following:
6.4.1 If Optionee ceases to be employed by the Company or any
Parent, Subsidiary or Affiliate of the Company for any reason except death or
disability, Optionee may exercise such Optionee's Options to the extent (and
only to the extent) that they would have been exercisable upon the date of
termination, within three months after the date of termination (or such shorter
time period as may be specified in the Grant).
6.4.2 If Optionee's employment with the Company or any Parent,
Subsidiary or Affiliate of the Company is terminated because of the death of
Optionee or disability of Optionee, Optionee's Options may be exercised to the
extent (and only to the extent) that they would have been exercisable by
Optionee on the date of termination, by Optionee (or Optionee's legal
representative) within twelve (12) months after the date of termination (or such
shorter time period as may be specified in the Grant), but in any event no later
than the expiration date of the Options; provided that in the event of
termination due to disability, other than as defined in Section 22(e)(3) of the
Internal Revenue Code, as amended, any ISO which remains exercisable after three
months after the date of termination shall be deemed a NQSO.
6.4.3 The Committee shall have discretion to determine whether
Optionee has ceased to be employed by the Company or any Parent, Subsidiary or
Affiliate of the Company and the effective date on which such employment
terminated.
6.4.4 In the case of an Optionee who is a director, independent
consultant or adviser, the Committee will have the discretion to determine
whether Optionee is "employed by the Company or any Parent, Subsidiary or
Affiliate of the Company" pursuant to the foregoing Sections.
3
<PAGE> 4
6.4.5 The Committee may specify a reasonable minimum number of
Shares that may be purchased on any exercise of an Option, provided that such
minimum number will not prevent Optionee from exercising the full number of
Shares as to which the Option is then exercisable.
6.4.6 An Option shall not be exercisable unless such exercise is
in compliance with the Securities Act of 1933, as amended (the "Securities
Act"), all applicable state securities laws and the requirements of any stock
exchange or national market system upon which the Shares may then be listed, as
they are in effect on the date of exercise. The Company shall be under no
obligation to register the Shares with the SEC or to effect compliance with the
registration, qualification or listing requirements of any state securities
laws, stock exchange or national market system, and the Company shall have no
liability for any inability or failure to do so.
7. RESTRICTIONS ON SHARES. At the discretion of the Committee, the Company
may reserve to itself and/or its assignee(s) in the Grant a right of first
refusal to purchase all Shares that an Optionee (or a subsequent transferee) may
propose to transfer to a third party. Further, at the discretion of the
Committee, the Company may reserve to itself and/or its assignee(s) in the Grant
a right to repurchase a portion of or all Shares held by an Optionee upon
Optionee's termination of employment or service with the Company or a Parent,
Subsidiary or Affiliate of the Company, for any reason within a specified time
as determined by the Committee at the time of grant at Optionee's original
purchase price, the Fair Market Value of such Shares or a price determined by a
formula or other provision set forth in the Grant.
8. MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. The Committee shall have
the power to modify, extend or renew outstanding Options and to authorize the
grant of new Options in substitution therefor, provided that any such action may
not, without the written consent of Optionee, impair any rights under any Option
previously granted. Any outstanding ISO that is modified, extended, renewed or
otherwise altered shall be treated in accordance with Section 424(h) of the
Revenue Code. The Committee shall have the power to reduce the exercise price of
outstanding Options without the consent of Optionees by a written notice to the
Optionees affected; provided, however, that the exercise price per Share may not
be reduced below the minimum exercise price that would be permitted under
Section 5.3 of this Plan for Options granted on the date the action is taken to
reduce the exercise price; and provided that the exercise price per Share may
not be reduced below the par value per Share.
9. STOCK OWNERSHIP; FINANCIAL STATEMENTS. No Optionee shall have any of the
rights of a stockholder with respect to any Shares subject to an Option until
such Option is properly exercised. No adjustment shall be made for dividends or
distributions or other rights for which the record date is prior to such date,
except as provided in this Plan. However, the Company shall provide to each
Optionee, during the period for which Optionee has one or more Options
outstanding, copies of the financial statements of the Company, consisting of,
at a minimum, a balance sheet and an income statement, at least annually. The
Company shall not be required to provide such information to key employees whose
duties in connection with the Company assume their access to equivalent
information.
10. NO OBLIGATION TO EMPLOY. Nothing in this Plan or any Option granted
under this Plan shall confer on any Optionee any right to continue in the employ
of, or other relationship with, the Company or any Parent, Subsidiary or
Affiliate of the Company or limit in any way the right of the Company or any
Parent, Subsidiary or Affiliate of the Company to terminate Optionee's
employment or other relationship at any time, with or without cause.
11. ADJUSTMENT OF OPTION SHARES. In the event that the number of outstanding
shares of common stock of the Company is changed by a stock dividend, stock
split, reverse stock split, recapitalization, combination, reclassification or
similar change in the capital structure of the Company without consideration, or
if a substantial portion of the assets of the Company are distributed, without
consideration in a spin-off or similar transaction, to the shareholders of the
Company, the number of Shares available under this Plan and the number of Shares
subject to outstanding Options and the exercise price per Share of such Options
shall be proportionately adjusted, subject to any required action by the Board
of Directors (the "Board") or shareholders of the Company and compliance with
applicable securities laws; provided, however, that a fractional share shall not
be issued upon exercise of any Option and any fractions of a Share that would
have resulted shall either be cashed out at Fair Market Value or the number
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of Shares issuable under the Option shall be rounded up to the nearest whole
number, as determined by the Committee; and provided further that the exercise
price may not be decreased to below the par value, if any, for the Shares.
12. CORPORATE TRANSACTIONS.
12.1 Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company in which there is to be neither a
surviving entity nor a successor in interest to the assets and liabilities of
the Company, the Administrator shall notify each Optionee of such proposed
action at least 30 days prior to such proposed action. To the extent not
previously exercised, all Options will terminate immediately prior to the
consummation of such proposed action.
12.2 Change in Control. In the event of a change in control of the
Company, options granted pursuant to the Plan shall automatically be accelerated
in full so as to become completely vested and fully exercisable. In such event,
the Administrator shall notify each Optionee at least 30 days prior to such
proposed action that the options shall be fully exercisable for a period of 30
days from the date of such notice, and all remaining, unexercised options shall
terminate upon the expiration of such 30-day period. In the event of a change in
control of the Company, any right of repurchase pursuant to Section 7 shall
expire.
For the purposes of the foregoing, a "change in control" shall mean the
occurrence of any of the following:
(a) any "person" (as that term is used in Section 13(d) of the
Securities Exchange Act of 1934 and the rules promulgated thereunder) becomes
the "beneficial owner" (as that term is defined in Rule 13d-3 of the Securities
Exchange Act of 1934) of securities representing a majority of the voting power
of the then outstanding securities of the Company; or
(b) any sale of assets involving all or substantially all of
the assets of the Company, or a merger or consolidation of the Company in which
the holders of securities of the Company immediately prior to such event hold in
the aggregate less than a majority of the securities of the Company immediately
after the event; or
(c) any other event which the Board of Directors determines,
in its discretion, would materially alter the structure of the Company or its
ownership.
12.3 Certain Corporate Transactions Not Involving a Change in Control.
In the event of any merger or consolidation not involving a change in control
but in which the Company is not the surviving corporation, or any sale of all or
substantially all of the assets of the Company not involving a change in
control, any or all outstanding Options may be assumed or replaced by the
successor corporation. which assumption shall be binding on all Optionees. In
the alternative, the successor corporation may substitute an equivalent option
or provide substantially similar consideration to Optionees as was provided to
shareholders (after taking into account the existing provisions of Optionee's
options, such as the exercise price and the vesting schedule). The successor
corporation may also issue, in place of outstanding shares of the Company held
by Optionees as a result of the exercise of an Option that is subject to
repurchase, substantially similar shares or other property subject to similar
repurchase restrictions no less favorable to Optionee.
13. ADOPTION AND STOCKHOLDER APPROVAL. This Plan shall become effective on
the date that it is adopted by the Board of the Company. This Plan shall be
approved by the shareholders of the Company, in any manner permitted by
applicable corporate law, within twelve months before or after the date this
Plan is adopted by the Board. Upon the effective date of the Plan, the Board may
grant Options pursuant to this Plan; provided that, in the event that
Stockholder approval is not obtained within the time period provided herein, all
Options granted hereunder shall terminate.
14. ADMINISTRATION. This Plan may be administered by the Board or a
committee appointed by the Board (the "Committee"). If two or more members of
the Board are Nonemployee Directors, the Committee will be comprised of at least
two (2) members of the Board, all of whom are Nonemployee Directors. As used in
this Plan,
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references to the "Committee" shall mean either the committee appointed by the
Board to administer this Plan or the Board if no committee has been established.
The interpretation by the Committee of any of the provisions of this Plan or any
Option granted under this Plan shall be final and binding upon the Company and
all persons having an interest in any Option or any Shares purchased pursuant to
an Option. The Committee may delegate to officers of the Company the authority
to grant Options under this Plan to Optionees who are not officers or directors
of the Company or other persons whose transactions in the Company's common stock
are subject to Section 16(b) of the Exchange Act.
15. TERM OF PLAN. Options may be granted pursuant to this Plan from time to
time within a period of ten (10) years after the date on which this Plan is
adopted by the Board.
16. AMENDMENT OR TERMINATION OF PLAN. The Committee may at any time
terminate or amend this Plan in any respect including (but not limited to)
amendment of any form of grant, exercise agreement or instrument to be executed
pursuant to this Plan; provided, however, that the Committee shall not, without
the approval of the shareholders of the Company, amend this Plan in any manner
that requires such stockholder approval pursuant to the Revenue Code or the
regulations promulgated thereunder as such provisions apply to ISO plans.
17. CERTAIN DEFINITIONS. As used in this Plan, the following terms shall
have the following meanings:
17.1 "Parent" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company if, at the time of the
granting of the Option, each of such corporations other than the Company owns
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.
17.2 "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if, at the time of
granting of the Option, each of the corporations other than the last corporation
in the unbroken chain owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.
17.3 "Affiliate" means any corporation that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or is under
common control with, another corporation, where "control" (including the terms
"controlled by" and "under common control with") means the possession, direct or
indirect, of the power to cause the direction of the management and policies of
the corporation, whether through the ownership of voting securities, by contract
or otherwise.
17.4 "Fair Market Value" shall mean the fair market value of the
Shares as determined by the Committee from time to time in good faith. If a
public market exists for the Shares, the Fair Market Value shall be the average
of the last reported bid and asked prices for common stock of the Company on the
last trading day prior to the date of determination (or the average closing
price over the number of consecutive working days preceding the date of
determination as the Committee shall deem appropriate) or, in the event the
common stock of the Company is listed on a stock exchange or on the Nasdaq
National Market, the Fair Market Value shall be the closing price on such
exchange or quotation system on the last trading day prior to the date of
determination (or the average closing price over the number of consecutive
working days preceding the date of determination as the Committee shall deem
appropriate).
17.5 "Nonemployee Director" shall mean any person who is a member of
the Board but is not an employee of the Company or an Affiliate of the Company
and has not been an employee of the Company or any Affiliate of the Company at
any time during the preceding twelve months. Service as a Director does not
itself constitute employment for purposes of this definition.
####
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PLAN HISTORY.
The Stock Option Plan was adopted by the Board in May 1993 and approved
by the Company's stockholders in August 1993. In April 1995, the Board amended
the Stock Option Plan to increase the number of shares of the Company's Common
Stock authorized for issuance under the Stock Option Plan from 449,850 to
749,850, and the Company's stockholders approved the amendment at the 1995
Annual Meeting of Stockholders in June 1995.
In February 1996, the Board amended the Stock Option Plan to increase
the number of shares of the Company's Common Stock authorized for issuance
thereunder from 749,850 to 1,049,850, and the Company's stockholders approved
that amendment at the 1996 Annual Meeting of Stockholders in June 1996.
In February 1997, the Board amended the Stock Option Plan to increase
the number of shares of the Company's Common Stock reserved for issuance
thereunder from 1,049,850 to 1,849,850 and the Company's stockholders approved
that amendment at the June 1997 Annual Meeting of Stockholders.
In March and April of 1998, the Board amended the Stock Option Plan to increase
the number of shares of the Company's Common Stock reserved for issuance
thereunder from 1,849,850 shares to 3,849,850 shares, and to increase the share
limitations for purposes of section 162(m) of the Internal Revenue Code of 1986,
as amended. The Company's stockholders approved the amendment at the June 1998
Annual Meeting of Stockholders. The stockholders also approved a change to the
section concerning the effect on the options of a change in control of Company.
While the old provision made assumption of the options discretionary to the
surviving entity, the new provision mandates that the options vest immediately
upon the occurrence of a change in control.
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EXHIBIT 99.4
LXR BIOTECHNOLOGY INC.
MARCH 1998 SUPPLEMENTAL OPTION PLAN FOR DIRECTORS
This document summarizes the provisions of the option plan adopted by
resolution of the Board of Directors of LXR Biotechnology Inc. (the "Company")
on March 16, 1998.
Non-qualified stock options to purchase 40,000 shares of Common Stock of
the Company have been granted to each of Gene Eidenberg, Bill Hambrecht, Neil
Flanzraich and John Kane, which shall vest over a four year period (which shall
vest 25% at the end of the first year from the grant date and monthly thereafter
over the 36 months following the first anniversary of the grant date).
Each non-employee director shall receive, at the conclusion of each full
year of service as a director, non-qualified stock options to purchase 10,000
shares of the Company's Common Stock, which shall vest over a four year period
(which shall vest 25% at the end of the first year from the grant date and
monthly thereafter over the 36 months following the first anniversary of the
grant date). Stock options to purchase up to maximum of 300,000 shares of the
Company's Common Stock will be issued pursuant to preceding sentence.
The foregoing options (the "Options") while not granted pursuant to the
Company's 1993 Stock Option Plan (the "1993 Plan"), are nonetheless subject to
all of the terms and conditions of options granted pursuant to the 1993 Plan.
The Exercise Price and term of the Options shall be as specified in the 1993
Plan with an Exercise Price equal to the Fair Market Value (as defined in the
1993 Plan) of Common Stock on the grant date. The Options shall be subject to
any other terms and conditions as may be set forth in a stock option agreement
between the Company and the optionee.
