<PAGE> 1
As filed with the Securities and Exchange Commission on February 18, 2000
Registration No. 333-
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===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
GUILFORD PHARMACEUTICALS INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 52-1841960
(State or other jurisdiction of 6611 TRIBUTARY STREET (I.R.S. Employer
Incorporation or organization) BALTIMORE, MARYLAND 21224 Identification Number)
(Address of principal executive offices)(Zip code)
</TABLE>
1998 EMPLOYEE SHARE OPTION AND RESTRICTED SHARE PLAN
(FULL TITLE OF THE PLAN)
CRAIG R. SMITH, M.D.
CHIEF EXECUTIVE OFFICER, PRESIDENT AND CHAIRMAN OF THE BOARD
GUILFORD PHARMACEUTICALS INC.
6611 TRIBUTARY STREET
BALTIMORE, MARYLAND 21224
(NAME AND ADDRESS OF AGENT FOR SERVICE)
(410) 631-6300
(TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
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WITH A COPY TO:
MICHAEL J. SILVER, ESQ.
HOGAN & HARTSON L.L.P.
111 SOUTH CALVERT STREET
BALTIMORE, MARYLAND 21202
(410) 659-2700
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==============================================================================================================================
TITLE OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED REGISTERED (1) OFFERING PRICE PER SHARE (1) AGGREGATE OFFERING PRICE (1) REGISTRATION
FEE(1)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <S> <C> <C> <C>
Common Stock, par value 500,000 $32.563 $16,281,500 $4,299.00
$.01 per share, and
Series A Junior
Participation
Preferred Share
Purchase Rights
</TABLE>
- ------------------------------------------------------------------------------
(1)Pursuant to Rule 457(h)(1), the proposed maximum offering price per share,
proposed maximum aggregate offering price and the amount of the
registration fee are based on the average of the bid and asked price of
$32.563 per share of Guilford Pharmaceuticals Inc. common stock on February
16, 2000 as reported on the NASDAQ National Market.
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Guilford Pharmaceuticals Inc. (the "Registrant") will separately send or
give documents containing the information required to be provided in this Part I
to its employees participating in the Guilford Pharmaceuticals Inc. 1998
Employee Share Option and Restricted Share Plan, as amended August 17, 1999
(the "Plan"), as contemplated by Rule 428(b)(1) under the Securities Act of
1933, as amended (the "Securities Act"). In accordance with the instructions to
Part I of Form S-8, the Registrant will not file these documents with the
Securities and Exchange Commission (the "Commission"), either as part of this
Registration Statement or as prospectuses or prospectus supplements pursuant to
Rule 424 under the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The Registrant hereby incorporates by reference into this Registration
Statement the following documents:
(a) Annual report on Form 10-K for the year ended December 31, 1998 filed
with the SEC on March 30, 1999;
(b) All reports filed with the Commission pursuant to Section 13(a) or 15
(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), since December 31, 1998.
(c) The description of the Registrant's common stock contained in the
Registrant's Registration Statement on Form 8-A filed with the
Commission on March 25, 1994, registering shares of Common Stock
pursuant to Section 12(g) of the Exchange Act.
In addition, all documents subsequently filed by the Registrant pursuant to
Section 13(a), 13(c), 14, or 15(d) of the Exchange Act, prior to the filing of
a post-effective amendment which indicates that all securities offered have
been sold or which deregisters all securities remaining unsold, shall be deemed
to be incorporated by reference in this Registration Statement and to be part
of hereof from the date of the filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference shall be deemed to be modified or superseded to the
extent that a statement contained in any other subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such prior statement. The documents required to be so modified or
superseded shall not be deemed to constitute a part of this Registration
Statement, except as so modified or superseded.
To the extent that any proxy statement is incorporated by reference herein,
such incorporation shall not include any information contained in such proxy
statement which is not, pursuant to the Commission's rules, deemed to be
"filed" with the Commission or subject to the liabilities of Section 18 of the
Exchange Act.
ITEM 4. DESCRIPTION OF SECURITIES.
A description of the Registrant's common stock, par value $ .01 per share,
is incorporated by reference under Item 3.
<PAGE> 3
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
NOT APPLICABLE.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Section 145 of the Delaware General Corporation Law ("DGCL"), the
Registrant has broad powers to indemnify its directors and officers against
liabilities they may incur in such capacities, including liabilities under the
Securities Act. Article Nine of the Registrant's Amended and Restated
Certificate of Incorporation provides that the Company will indemnify its
directors and officers to the full extent permitted by law and that no director
shall be liable for monetary damages to the Registrant or its stockholders for
any breach of fiduciary duty, except to the extent provided by applicable law
(i) for any breach of the director's duty of loyalty to the Registrant or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) pursuant to Section
174 of the DGCL or (iv) for any transaction from which such director derived an
improper personal benefit. In addition, under indemnification agreements with
its directors and officers, the Registrant is obligated, to the fullest extent
permissible by the DGCL, as it currently exists or may be amended, to indemnify
and hold harmless its directors and officers, from and against all expense,
liability and loss reasonably incurred or suffered by such directors and
officers.
* * * * *
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to trustees, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the 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 Registrant of the expenses incurred
or paid by a trustee, officer or controlling person of the Registrant of the
successful defense of any action, suit or proceeding) is asserted by such
trustee, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by the Registrant is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
NOT APPLICABLE.
ITEM 8. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
------- -----------
4.6 Guilford Pharmaceuticals Inc. 1998 Employee Share Option and
Restricted Share Plan (as amended August 17, 1999)
5 Opinion of Hogan & Hartson L.L.P. regarding the legality of
the shares of Common Stock being registered (filed herewith)
23.1 Consent of Hogan & Hartson L.L.P. (contained in Exhibit 5)
23.2 Consent of KPMG LLP (filed herewith)
24 Power of Attorney (contained on signature page)
<PAGE> 4
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(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
Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act
that are incorporated by reference in this 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 Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act that is incorporated by reference in this Registration
Statement shall be deemed to be a new Registration Statement relating to
the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
(c) The undertaking concerning indemnification is set forth under the
response to Item 6.
(d) The undersigned Registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is
sent or given, the latest annual report, to security holders that is
incorporated by reference in the prospectus and furnished pursuant to and
meeting the requirements of Rule 14a-3 or 14c-3 under the Securities
Exchange Act of 1934; and, where interim financial information required
to be presented by Article 3 of Regulation S-X is not set forth in the
prospectus, to deliver, or cause to be delivered to each person to whom
the prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to provide such
interim financial information.
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 Naples, Florida, on February 18, 2000
GUILFORD PHARMACEUTICALS INC.
By: /s/ Craig R. Smith, M.D.
------------------------
Craig R. Smith, M.D.
Chief Executive Officer, President and
Chairman of the Board of Directors
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
date indicated.
We, the undersigned officers and directors of Guilford Pharmaceuticals Inc.,
hereby severally and individually constitute and appoint Craig R. Smith, M.D.,
Andrew R. Jordan, Thomas C. Seoh, Stephen H. McElhennon and Michael J. Silver,
and each of them, the true and lawful attorneys and agents of each of us to
execute in the name, place and stead of each of us (individually and in any
capacity stated below) any and all amendments to this Registration Statement on
Form S-8, and all instruments necessary or advisable in connection therewith
and to file the same with the Securities and Exchange Commission, each of said
attorneys and agents to have power to act with or without the other and to have
full power and authority to do and perform in the name and on behalf of each of
the undersigned every act whatsoever necessary or advisable to be done in the
premises as fully and to all intents and purposes as any of the undersigned
might or could do in person, and we hereby ratify and confirm our signatures as
they may be signed by our said attorneys and agents and each of them to any and
all such amendment and amendments.
Date: February 18, 2000 /s/ Craig R. Smith, M.D.
------------------------
Craig R. Smith, M.D.
Chief Executive Officer,
President and
Chairman of the Board of Directors
Date: February 18, 2000 /s/ Andrew R. Jordan
--------------------
Andrew R. Jordan
Senior Vice President, Chief Financial
Officer and Treasurer
Date: February 18, 2000 /s/ George L. Bunting, Jr.
---------------------------
George L. Bunting, Jr.
Director
Date: February 18, 2000 /s/ Richard L. Casey
--------------------
Richard L. Casey
Director
Date: February 18, 2000 /s/ Elizabeth M. Greetham
-------------------------
Elizabeth M. Greetham
Director
Date: February 18, 2000 /s/ Joseph Klein, III
---------------------
Joseph Klein, III
Director
Date: February 18, 2000 /s/ Solomon H. Snyder, M.D.
---------------------------
Solomon H. Snyder, M.D.
Director
Date: February 18, 2000 /s/ W. Leigh Thompson, M.D., Ph.D.
----------------------------------
W. Leigh Thompson, M.D., Ph.D.
Director
<PAGE> 6
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
------ -----------
4.6 Guilford Pharmaceuticals Inc. 1998 Employee Share Option and
Restricted Share Plan (as amended August 17, 1999).
5 Opinion of Hogan & Hartson L.L.P. regarding the legality of
the shares of Common Stock being registered
23.1 Consent of Hogan & Hartson L.L.P. (contained in Exhibit 5)
23.2 Consent of KPMG LLP
24 Power of Attorney (contained on signature page)
<PAGE> 1
EXHIBIT 4.6
GUILFORD PHARMACEUTICALS INC.
1998 EMPLOYEE SHARE OPTION AND RESTRICTED SHARE PLAN
(AS AMENDED AUGUST 17, 1999)
<PAGE> 2
GUILFORD PHARMACEUTICALS INC.
1998 EMPLOYEE SHARE OPTION AND RESTRICTED SHARE PLAN
(AS AMENDED AUGUST 17, 1999)
Guilford Pharmaceuticals Inc., sets forth herein the terms of
this 1998 Employee Share Option and Restricted Share Plan as follows:
1. PURPOSE
The Plan is intended to advance the interests of the Company
by providing eligible individuals (as designated pursuant to Section 5 below)
with incentives to improve business results, by providing an opportunity to
acquire or increase a proprietary interest in the Company, which thereby will
create a stronger incentive to expend maximum effort for the growth and success
of the Company, and will encourage such eligible individuals to continue to
serve the Company. To this end, the Plan provides for the grant of share
options and restricted shares all as set out herein.
2. DEFINITIONS
For purposes of interpreting the Plan and related documents
(including Share Option Agreements and Restricted Share Agreements), the
following definitions shall apply:
2.1. "Affiliate" means any company or other trade or
business that is controlled by or under common control with the Company
(determined in accordance with the principles of Section 414(b) and 414(c) of
the Code and the regulations thereunder).
2.2. "Agreement" means a written agreement between
the Company and the recipient individual that sets out the terms and conditions
of the grant of an Incentive Award.
2.3. "Board" means the Board of Directors of the
Company.
2.4. "Code" means the Internal Revenue Code of 1986,
as now in effect or as hereafter amended.
2.5. "Committee" means the stock option committee
appointed by the Board pursuant to Section 3.2 of the Plan.
2.6. "Company" means Guilford Pharmaceuticals Inc.
2.7. "Effective Date" means the date of adoption of
the Plan by the Board.
2.8. "Exchange Act" means the Securities Exchange Act
of 1934, as now in effect or as hereafter amended.
2.9. "Exercise Price" means the Option Price
multiplied by the number of Shares purchased pursuant to the exercise of an
Option.
2.10. "Expiration Date" means the date fixed for
termination of the option at the time it is granted, or, if earlier, the
termination of the option pursuant to Section 18.3.
2.11. "Fair Market Value" means the value of each
Share subject to the Plan determined as follows: if on the Grant Date or other
determination date the Shares are listed on an established national or regional
stock exchange, are admitted to quotation on the National Association of
Securities Dealers Automated Quotation System, or are publicly traded on an
established securities market, the Fair Market Value of the Shares shall be the
closing price of the Shares on such exchange or in such market (the highest
such closing price if there is more than one such exchange or market) on the
trading day immediately preceding the Grant Date or such
<PAGE> 3
other determination date (or if there is no such reported closing price, the
Fair Market Value shall be the mean between the highest bid and lowest asked
prices or between the high and low sale prices on such trading day) or, if no
sale of the Shares is reported for such trading day, on the next preceding day
on which any sale shall have been reported. If the Shares are not listed on such
an exchange, quoted on such System or traded on such a market, Fair Market Value
shall be determined by the Board in good faith.
2.12. "Grant Date" means the later of (i) the date as
of which the Board approves the grant and (ii) the date as of which the
Optionee and the Company or Subsidiary enter the relationship resulting in the
Optionee being eligible for grants.
2.13. "Holder" means a person who holds Restricted
Shares under the Plan.
2.14. "Incentive Award" means an award of an Option or
Restricted Shares under the Plan.
2.15. "Option" means an option to purchase one or more
Shares pursuant to the Plan.
2.16. "Optionee" means a person who holds an Option
under the Plan.
2.17. "Option Period" means the period during which
Options may be exercised as defined in Section 11.
2.18. "Option Price" means the purchase price for each
Share subject to an Option.
2.19. "Plan" means the Guilford Pharmaceuticals Inc.
1998 Employee Share Option and Restricted Share Plan.
2.20. "Reporting Person" means a person who is
required to file reports under Section 16(a) of the Exchange Act.
2.21. "Restricted Share Agreement" means the written
agreement evidencing the grant of Restricted Shares hereunder.
2.22. "Restricted Share Award" means an award of the
right to purchase restricted Shares granted pursuant to Section 12 of this
Plan.
2.23. "1933 Act" means the Securities Act of 1933, as
now in effect or as hereafter amended.
2.24. "Shares" mean share of common stock, par value
$.01 per Share, of the Company.
2.25. "Share Option Agreement" means the written
agreement evidencing the grant of an Option hereunder.
2.26. "Subsidiary" means any "subsidiary corporation"
of the Company within the meaning of Section 425(f) of the Code.
3. ADMINISTRATION
3.1. BOARD.
The Plan shall be administered by the Board, which shall
have the full power and authority to take all actions and to make all
determinations required or provided for under the Plan or any Option or
Restricted Share Award granted or Share Option or Restricted Share Agreement
entered into hereunder and all such other actions and determinations not
inconsistent with the specific terms and provisions of the Plan deemed by the
Board to be necessary or appropriate to the administration of the Plan or any
Option granted or Share Option
<PAGE> 4
Agreement entered into hereunder. The interpretation and construction by the
Board of any provision of the Plan or of any Option granted or Share Option
Agreement entered into hereunder shall be final and conclusive.
3.2. COMMITTEE
The Board may from time to time appoint the
Committee, and the Board, in its sole discretion, may provide that the role of
the Committee shall be limited to making recommendations to the Board
concerning any determinations to be made and actions to be taken by the Board
pursuant to or with respect to the Plan, or the Board may delegate to the
Committee such powers and authorities related to the administration of the
Plan, as set forth in Section 3.1 hereof, as the Board shall determine,
consistent with the Amended and Restated Certificate of Incorporation, as
amended and Bylaws of the Company and applicable law. In the event that the
Plan or any Option or Restricted Share Award granted or Share Option or
Restricted Share Agreement entered into hereunder provides for any action to be
taken by or determination to be made by the Board, such action may be taken by
or such determination may be made by the Committee if the power and authority
to do so has been delegated to the Committee by the Board as provided for in
this Section 3.2. Unless otherwise expressly determined by the Board, any such
action or determination by the Committee shall be final and conclusive.
3.3. NO LIABILITY
No member of the Board or of the Committee shall be
liable for any action or determination made, or any failure to take or make an
action or determination, in good faith with respect to the Plan or any Option
or Restricted Share Award granted or Share Option or Restricted Share Agreement
entered into hereunder.
4. SHARES
The Shares that may be issued pursuant to Incentive Awards
may be treasury Shares or authorized but unissued Shares. The number of Shares
that may be issued pursuant to Incentive Awards under the Plan shall not
exceed, in the aggregate, 1,100,000 Shares. No more than 50,000 Shares may be
issued pursuant to Restricted Share Awards under the Plan. If any Incentive
Award expires, terminates, or is terminated or canceled for any reason prior to
exercise or vesting in full, the Shares that were subject to the unexercised,
forfeited, or terminated portion of such Incentive Award shall be available
immediately for future grants of Incentive Awards under the Plan.
5. ELIGIBILITY
5.1. DESIGNATED RECIPIENTS
Subject to the next sentence, Incentive Awards may
be granted under the Plan to (i) any full-time employee of the Company or any
Subsidiary (including any such individual who is an officer or director of the
Company or any Subsidiary or Affiliate) as the Board shall determine and
designate from time to time or (ii) any other individual whose participation in
the Plan is determined by the Board to be in the best interests of the Company
and is so designated by the Board (such determination to be deemed to be made
with respect to any recipient by virtue of the grant of an Incentive Award to
such an individual).
5.2. SUCCESSIVE GRANTS
An individual may hold more than one Incentive
Award, subject to such restrictions as are provided herein.
6. EFFECTIVE DATE AND TERM OF THE PLAN
6.1. EFFECTIVE DATE
The Plan shall be effective as of February 17, 1998,
the date of adoption by the Board.
6.2. TERM
The Plan has no termination date.
<PAGE> 5
7. GRANT OF OPTIONS
Subject to the terms and conditions of the Plan, the
Board may, at any time and from time to time, grant to such eligible individuals
as the Board may determine, Options to purchase such number of Shares on such
terms and conditions as the Board may determine. Such authority specifically
includes the authority, in order to effectuate the purposes of the Plan but
without amending the Plan, to modify grants to eligible individuals who are
foreign nationals or are individuals who are employed outside the United States
to recognize differences in local law, tax policy, or custom.
8. PARACHUTE LIMITATIONS
Notwithstanding any other provision of this Plan or of any
other agreement, contract, or understanding heretofore or hereafter entered
into by the Optionee with the Company, except an agreement, contract, or
understanding hereafter entered into that expressly modifies or excludes
application of this paragraph (an "Other Agreement"), and notwithstanding any
formal or informal plan or other arrangement for the direct or indirect
provision of compensation to the Optionee (including groups or classes of
participants or beneficiaries of which the Optionee is a member), whether or
not such compensation is deferred, is in cash, or is in the form of a benefit
to or for the Optionee (a "Benefit Arrangement"), if the Optionee is a
"disqualified individual", as defined in Section 280G(c) of the Code, any
Option held by that Optionee and any right to receive any payment or other
benefit under this Plan shall not become exercisable or vested (i) to the
extent that such right to exercise, vesting, payment, or benefit, taking into
account all other rights, payments, or benefits to or for the Optionee under
this Plan, all Other Agreements, and all Benefit Arrangements, would cause any
payment or benefit to the Optionee under this Plan to be considered a
"parachute payment" within the meaning of Section 280G(b)(2) of the Internal
Revenue Code as then in effect (a "Parachute Payment") and (ii) if, as a result
of receiving a Parachute Payment, the aggregate after-tax amounts received by
the Optionee from the Company under this Plan, all Other Agreements, and all
Benefit Arrangements would be less than the maximum after-tax amount that could
be received by him or her without causing any such payment or benefit to be
considered a Parachute Payment. In the event that the receipt of any such right
to exercise, vesting, payment, or benefit under this Plan, in conjunction with
all other rights, payments, or benefits to or for the Optionee under any Other
Agreement or any Benefit Arrangement would cause the Optionee to be considered
to have received a Parachute Payment under this Plan that would have the effect
of decreasing the after-tax amount received by the Optionee as described in
clause (ii) of the preceding sentence, then the Optionee shall have the right,
in the Optionee's sole discretion, to designate those rights, payments, or
benefits under this Plan, any Other Agreements, and any Benefit Arrangements
that should be reduced or eliminated so as to avoid having the payment or
benefit to the Optionee under this Plan be deemed to be a Parachute Payment.
9. SHARE OPTION AGREEMENTS
All Options granted pursuant to the Plan shall be evidenced
by Share Option Agreements, to be executed by the Company and by the Optionee,
in such form or forms as the Board shall from time to time determine. Share
Option Agreements covering Options granted from time to time or at the same
time need not contain similar provisions; provided, however, that all such
Option Agreements shall comply with all terms of the Plan.
10. OPTION PRICE
The Option Price shall be fixed by the Board and stated in
each Share Option Agreement. The Option Price shall not be less than the Fair
Market Value of the Shares.
11. TERM AND EXERCISE OF OPTIONS
11.1. TERM
Each Option granted under the Plan shall terminate
and all rights to purchase shares thereunder shall cease at such time as may be
fixed by the Board and stated in the Share Option Agreement relating to such
Option.
<PAGE> 6
11.2. OPTION PERIOD AND LIMITATIONS ON EXERCISE
Each Option granted under the Plan shall be
exercisable, in whole or in part, at any time and from time to time over a
period commencing on or after the Grant Date and ending upon the expiration or
termination of the Option, as the Board shall determine and set forth in the
Share Option Agreement relating to such Option. Without limiting the foregoing,
the Board, subject to the terms and conditions of the Plan, may in its sole
discretion provide that an Option may not be exercised in whole or in part for
a stated period or periods of time during which such Option is outstanding;
provided, however, that any such limitation on the exercise of an Option
contained in any Share Option Agreement may be rescinded, modified or waived by
the Board, in its sole discretion, at any time and from time to time after the
Grant Date of such Option, so as to accelerate the time at which the Option may
be exercised.
11.2A. RETIREMENT
If the Optionee retires from the Company or a
Subsidiary following the attainment of age 62 and (i) the Optionee has
completed at least five years but fewer than ten years of service with the
Company or a Subsidiary, the Optionee shall have the right (subject to the
limitations on exercise set forth in Section 3.7 below) to exercise all or any
part of the Option, to the extent the Option was vested upon the Optionee's
retirement, for a period equal to the shorter of (a) five (5) years following
the Optionee's retirement or (b) the remaining term of the Option, or (ii) the
Optionee has completed as least ten years of service with the Company or a
Subsidiary, the Optionee shall have the right (subject to the limitations on
exercise set forth in Section 3.7 below) to exercise all or any part of the
Option, to the extent the Option was vested upon the Optionee's retirement, for
the remaining term of the Option.
11.3. TERMINATION OF EMPLOYMENT
Upon the termination of the employment of an
Optionee with the Company, a Subsidiary or an Affiliate, other than by reason
of the death or "permanent and total disability" (within the meaning of Section
22(e)(3) of the Code), any Option granted to an Optionee pursuant to the Plan
shall terminate, and such Optionee shall have no further right to purchase
Shares pursuant to such Option; provided further, that the Board may provide,
by inclusion of appropriate language in any Share Option Agreement, that an
Optionee may (subject to the general limitations on exercise set forth in
Section 11.2 above), in the event of termination of employment of the Optionee
with the Company, a Subsidiary or an Affiliate, exercise an Option, in whole or
in part, at any time subsequent to such termination of employment and prior to
termination of the Option pursuant to Section 11.2 above, either subject to or
without regard to any installment limitation on exercise imposed pursuant to
Section 11.2. above, as the Board, in its sole and absolute discretion, shall
determine and set forth in the Share Option Agreement. Whether a leave of
absence or leave on military or government service shall constitute a
termination of employment for purposes of the Plan, shall be determined by the
Board, which determination shall be final and conclusive. For purposes of the
Plan, a termination of employment with the Company, a Subsidiary or an
Affiliate shall not be deemed to occur if the Optionee is immediately
thereafter employed with the Company, any other Subsidiary or any other
Affiliate.
11.4. RIGHTS IN THE EVENT OF DEATH
If an Optionee dies while employed by the Company,
a Subsidiary or an Affiliate, the executors or administrators or legatees or
distributees of such Optionee's estate shall have the right (subject to the
general limitations on exercise set forth in Section 11.2 above), at any time
within one year after the date of such Optionee's death and prior to
termination of the Option pursuant to Section 11.1 above, to exercise any
Option held by such Optionee at the date of such Optionee's death, whether or
not such Option was exercisable immediately prior to such Optionee's death;
provided, however, that the Board may provide by inclusion of appropriate
language in any Share Option Agreement that, in the event of the death of an
Optionee, the executors or administrators or legatees or distributees of such
Optionee's estate may exercise an Option (subject to the general limitations on
exercise set forth in Section 11.2 above), in whole or in part, at any time
subsequent to such Optionee's death and prior to termination of the Option
pursuant to Section 11.1 above, either subject to or without regard to any
installment limitation on exercise imposed pursuant to Section 11.2 above, as
the Board, in its sole and absolute discretion, shall determine and set forth in
the Share Option Agreement.
<PAGE> 7
11.5. RIGHTS IN THE EVENT OF DISABILITY
If an Optionee terminates employment with the
Company, a Subsidiary or an Affiliate by reason of the "permanent and total
disability" (within the meaning of Section 22(e)(3) of the Code) of such
Optionee, then such Optionee shall have the right (subject to the general
limitations on exercise set forth in Section 11.2 above), at any time within
one year after such termination of employment and prior to termination of the
Option pursuant to Section 11.1 above, to exercise, in whole or in part, any
Option held by such Optionee at the date of such termination of employment,
whether or not such Option was exercisable immediately prior to such
termination of employment; provided, however, that the Board may provide, by
inclusion of appropriate language in any Share Option Agreement, that an
Optionee may (subject to the general limitations on exercise set forth in
Section 11.2 above), in the event of the termination of employment of the
Optionee with the Company, a Subsidiary or an Affiliate by reason of the
"permanent and total disability" (within the meaning of Section 22(e)(3) of the
Code) of such Optionee, exercise an Option, in whole or in part, at any time
subsequent to such termination of employment and prior to termination of the
Option pursuant to Section 11.1 above, either subject to or without regard to
any installment limitation on exercise imposed pursuant to Section 11.2 above,
as the Board, in its sole and absolute discretion, shall determine and set
forth in the Share Option Agreement. Whether a termination of employment is to
be considered by reason of "permanent and total disability" for purposes of
this Plan shall be determined by the Board, which determination shall be final
and conclusive.
11.6. LIMITATIONS ON EXERCISE OF OPTION
Notwithstanding the foregoing Sections, in no event
may the Option be exercised, in whole or in part, after the occurrence of an
event referred to in Section 18.3 below which results in termination of the
Option. In no event may the Option be exercised for a fractional Share.
11.7. METHOD OF EXERCISE
An Option that is exercisable hereunder may be
exercised by the Optionee's delivery to the Company of written notice of the
exercise and the number of Shares for which the Option is being exercised. Such
delivery shall occur on any business day, at the Company's principal office,
addressed to the attention of the Board. Such notice shall specify the number
of Shares with respect to which the Option is being exercised and shall be
accompanied by payment in full of the Option Price of the Shares for which the
Option is being exercised. The minimum number of Shares with respect to which
an Option may be exercised, in whole or in part, at any time shall be the
lesser of (i) 100 shares or such lesser number set forth in the applicable
Option Agreement and (ii) the maximum number of Shares available for purchase
under the Option at the time of exercise. Payment of the Option Price for the
Shares purchased pursuant to the exercise of an Option shall be made (i) in
cash or in cash equivalents; (ii) through the tender to the Company of Shares
(so long as any Shares so tendered that were originally acquired by the
Optionee from the Company have been held by the Optionee for at least six (6)
months prior to such tender), which Shares shall be valued, for purposes of
determining the extent to which the Option Price has been paid thereby, at
their Fair Market Value on the date of exercise; or (iii) by a combination of
the methods described in (i) and (ii). The Board may provide, by inclusion of
appropriate language in an Share Option Agreement, an amendment thereto or
other agreement with the Optionee, that payment in full of the Option Price
need not accompany the written notice of exercise provided the notice of
exercise directs that the Share certificate or certificates for the Shares for
which the Option is exercised be delivered to a licensed broker acceptable to
the Company as the agent for the individual exercising the Option and, at the
time such Share certificate or certificates are delivered, the broker tenders
to the Company cash (or cash equivalents acceptable to the Company) equal to
the Option Price for the Shares purchased pursuant to the exercise of the
Option plus the amount (if any) of federal and/or other taxes which the Company
may in its judgment, be required to withhold with respect to the exercise of
the Option. An attempt to exercise any Option granted hereunder other than as
set forth above shall be invalid and of no force and effect. Promptly after the
exercise of an Option and the payment in full of the Option Price of the Shares
covered thereby, the individual exercising the Option shall be entitled to the
issuance of a Share certificate or Share certificates evidencing his or her
ownership of such Shares. Unless otherwise stated in the applicable Share
Option Agreement, an individual holding or exercising an Option shall have none
of the rights of a stockholder (for example, the right to receive cash or
dividend payments attributable to the subject Shares or to direct the voting of
the subject Shares) until the Shares covered thereby are fully paid and issued
to him or her. Except as provided in Section 18 below, no adjustment shall be
made for dividends or other rights for which the record date is prior to the
date of such issuance.
<PAGE> 8
12. GRANT OF RESTRICTED SHARES
12.1. RESTRICTED SHARE AWARDS.
(a) The Board may from time to time,
and subject to the provisions of the Plan and such other terms and conditions
as the Board may determine, grant Restricted Share Awards under the Plan. Each
Restricted Share Award shall be evidenced by a written instrument which shall
state the number of Shares covered by the award and the terms and conditions
which the Board shall have determined with respect to such award, including the
number of Shares that the Holder shall be entitled to purchase, the price to be
paid, and the time within which the Holder must accept such offer, which shall
in no event exceed thirty (30) days from the date upon which the Board made the
determination to grant the Restricted Share Award. Upon the acceptance of each
Restricted Share Award, subject to Section 12.3, a certificate representing the
Shares covered by the award shall be registered in the name of the Holder and
shall be delivered to the Holder. The Holder shall generally have the rights
and privileges of a stockholder of the Company with respect to such Shares,
including the right to vote and to receive dividends, subject to the
restrictions specified in paragraphs (b) and (c).
(b) The Board shall determine a period
of time ("Limitation Period") which shall apply to the Shares transferred to a
Holder with respect to each Restricted Shares Award. Except as otherwise
determined by the Board, during the Limitation Period applicable with respect
to each Restricted Shares Award, the Holder may not sell, transfer, assign,
pledge or otherwise encumber or dispose of the Shares covered by such
Restricted Shares Award. The Board in its discretion may prescribe conditions
for the incremental lapse of the preceding restrictions during the Limitation
Period, and for the lapse or termination of such restrictions upon the
occurrence of certain events before the expiration of the Limitation Period.
The Board in its discretion also may shorten or terminate the Limitation Period
or waive any conditions for the lapse or termination of the restrictions with
respect to all or any portion of the Shares covered by the Restricted Shares
Award. The certificate representing the Shares distributed with respect to each
Restricted Shares Award made under the Plan shall be affixed with a legend
setting forth the restrictions applicable to the transfer of such Shares. The
restrictions applicable to a Restricted Shares Award shall lapse and a
certificate for the number of Shares with respect to which the restrictions
have lapsed shall be delivered to the Holder free of all such restrictions upon
the earliest of the following: (1) the expiration of the Limitation Period
applicable to the Restricted Shares Award, (2) the occurrence of an event
prescribed by the Board which results in the lapse of the restrictions, or (3)
such other time as the Board may determine.
(c) The Shares covered by a Restricted
Share Award shall be subject to a repurchase option exercisable upon the
voluntary or involuntary termination of the Holder's employment with the
Company for any reason (including death or disability) during the Limitation
Period. The purchase price for Shares repurchased pursuant to the Restricted
Share Agreement shall be the original price paid by the Holder and may be paid
by cancellation of any indebtedness of the Holder to the Company.
12.2. RESTRICTED SHARE AGREEMENT
All Restricted Share Awards granted pursuant to the
Plan shall be evidenced by Restricted Share Agreements, to be executed by the
Company and by the Holder, in such form or forms as the Board shall from time
to time determine. Restricted Share Agreements covering Restricted Shares
granted from time to time or at the same time need not contain similar
provisions; provided, however, that all such Restricted Share Agreements shall
comply with all terms of the Plan.
12.3. CERTIFICATES FOR RESTRICTED SHARES
The Board may require that the certificates
evidencing the grant of a Restricted Share Award hereunder be held in escrow
until such restrictions have expired. The Board may also cause a legend to be
placed on such certificates that complies with the applicable securities laws
and regulations and makes appropriate reference to the restrictions to which
the Shares are subject. Upon attainment of the specified objectives and
requirements (or, to the extent specified in the grant (or the portion of such
Shares earned by partial attainment of the objectives and requirements, as
applicable) free of restrictions.
<PAGE> 9
13. TRANSFERABILITY OF SHARES AND OPTIONS
13.1 General. Except as provided in Section 13.2, during the lifetime
of an Optionee, only such Optionee or grantee (or, in the event of legal
incapacity or incompetency, the guardian or legal representative of the
Optionee or grantee) may exercise the Option. No Restricted Shares shall be
assignable or transferable, other than by will or the laws of descent and
distribution, before the satisfaction of applicable performance and service
requirements with respect to such Shares, as set forth in the applicable
Restricted Share Agreement.
13.2 Family Transfers. The Board or Committee may, in its discretion,
authorize all or a portion of the Options granted to an Optionee, or group of
Optionees, to be on terms which permit transfer by such Optionee to a Family
Member or an entity in which more than fifty percent of the voting interests
are owned by Family Members (or the Optionee), provided that (x) there may be
no consideration for any such transfer, (y) the Stock Option Agreement pursuant
to which such Options are granted must be approved by the Board or Committee,
and must expressly provide for transferability in a manner consistent with this
Section, and (z) subsequent transfers of transferred Options shall be
prohibited except those in accordance with Section 13.2 or by will or the laws
of descent and distribution. Following transfer, any such Options shall
continue to be subject to the same terms and conditions as were applicable
immediately prior to transfer, provided that for purposes of Sections 11.7
hereof the term "Optionee" shall be deemed to refer the transferee. For
purposes of this Section 13.2, the term "Family Member" means a person who is a
child, stepchild, grandchild, parent, stepparent, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law,
including adoptive relationships, of the Optionee, any person sharing the
Optionee's household (other than a tenant or employee), a trust in which these
persons have more than fifty percent of the beneficial interest, a foundation
in which these persons (or the Optionee) control the management of assets, and
any other entity in which these persons (or the Optionee) own more than fifty
percent of the voting interests. The events of termination of employment of
Section 11 hereof shall continue to be applied with respect to the original
Optionee, following which the Options shall be exercisable by the transferee
only to the extent, and for the periods specified in Section 11.
14. USE OF PROCEEDS
The proceeds received by the Company from the sale of Shares
pursuant to the exercise of Options granted under the Plan shall constitute
general funds of the Company.
15. REQUIREMENTS OF LAW
<PAGE> 10
The Company shall not be required to sell or issue any Shares
under any Incentive Award if the sale or issuance of such Shares would
constitute a violation by the Optionee, the Holder, the individual exercising
the Option, or the Company of any provisions of any law or regulation of any
governmental authority, including without limitation any federal or state
securities laws or regulations. If at any time the Company shall determine, in
its discretion, that the listing, registration or qualification of any Shares
subject to the Option upon any securities exchange or under any governmental
regulatory body, is necessary or desirable as a condition of, or in connection
with, the issuance or purchase of Shares hereunder, the Option may not be
exercised in whole or in part unless such listing registration, qualification,
consent or approval shall have been effected or obtained free of any conditions
not acceptable to the Company, and any delay caused thereby shall in no way
affect the date of termination of the Option. Specifically in connection with
the 1933 Act, at the time of grant of Restricted Shares or when such Shares
becomes vested or upon the exercise of any Option, unless a registration
statement under such act is in effect with respect to the Shares covered by
Option, the Company shall not be required to sell or issue such Shares unless
the Board has received evidence satisfactory to it that the holder of such
Restricted Shares or Option, may acquire such Shares pursuant to an exemption
from registration under such act. Any determination in this connection by the
Board shall be final, binding, and conclusive. The Company may, but shall in no
event be obligated to, register any securities covered hereby pursuant to the
1933 Act. The Company shall not be obligated to take any affirmative action in
order to cause the exercise of an Option or the issuance of Shares pursuant
thereto or pursuant to a grant of Restricted Shares to comply with any law or
regulation of any governmental authority. As to any jurisdiction that expressly
imposes the requirement that an Option shall not be exercisable or that Shares
may not be issued pursuant to a Restricted Share Award unless and until the
Shares covered by such grant or Option are registered or are exempt from
registration, the exercise of such Option or issuance of Shares pursuant to
such grant (under circumstances in which the laws of such jurisdiction apply)
shall be deemed conditioned upon the effectiveness of such registration or the
availability of such an exemption.
16. AMENDMENT AND TERMINATION OF THE PLAN
The Board may, at any time and from time to time, amend,
suspend, or terminate the Plan as to any Shares as to which Incentive Awards
have not been granted. The Company may retain the right in an Agreement to
cause a forfeiture of the Shares or gain realized by a holder of an Incentive
Award on account of the holder taking actions in "competition with the
Company," as defined in the applicable Agreement. Furthermore, the Company may
annul the grant of an Option, or Restricted Shares if the holder of such grant
was an employee of the Company or a Subsidiary and is terminated "for cause,"
as defined in the applicable Agreement. Except as permitted under this Section
16 or Section 18 hereof, no amendment, suspension, or termination of the Plan
shall, without the consent of the holder of the Incentive Award, alter or
impair rights or obligations under any Incentive Award theretofore granted
under the Plan.
17. EXCHANGE ACT: RULE 16B-3
17.1. GENERAL
The Plan is intended to comply with Rule 16b-3 ("Rule
16b-3") under the Exchange Act. Any provision inconsistent with Rule 16b-3
shall, to the extent permitted by law and determined to be advisable by the
Board (constituted in accordance with Section 17.2 hereof) or the Board (acting
pursuant to Section 17.3 hereof), be inoperative and void.
17.2. STOCK OPTION COMMITTEE
The Committee appointed pursuant to Section 3.2
hereof shall consist of not fewer than two members of the Board each of whom
shall qualify (at the time of appointment to the Committee and during all
periods of service on the Committee) in all respects as a "non-employee
director" as defined in Rule 16b-3.
<PAGE> 11
17.3. ADDITIONAL RESTRICTION ON TRANSFER OF SHARES
No director, officer or other "insider" of the
Corporation subject to Section 16 of the Exchange Act shall be permitted to
sell Shares (which such "insider" had received upon exercise of an Option or
under a Restricted Share Award) during the six months immediately following the
grant of such Option or Restricted Share Award.
18. EFFECT OF CHANGES IN CAPITALIZATION
18.1. CHANGES IN SHARES
If the number of outstanding Shares is increased or
decreased or the Shares are changed into or exchanged for a different number or
kind of Shares or other securities of the Company on account of any
recapitalization, reclassification, stock split, reverse split, combination of
Shares, exchange of Shares, Share dividend or other distribution payable in
capital stock, or other increase or decrease in such Shares effected without
receipt of consideration by the Company, occurring after the closing of the
initial public offering of Shares of the Company, the number and kinds of
Shares for the issuance of which Restricted Share Awards may be granted and for
the acquisition of which Options may be granted under the Plan shall be
adjusted proportionately and accordingly by the Company. In addition, the
number and kind of Shares for which Restricted Share Awards or Options, are
outstanding shall be adjusted proportionately and accordingly so that the
proportionate interest of the holder of the Restricted Share Awards or Option
immediately following such event shall, to the extent practicable, be the same
as immediately before such event. Any such adjustment in outstanding Options
shall not change the aggregate Option Price payable with respect to Shares that
are subject to the unexercised portion of the Option outstanding but shall
include a corresponding proportionate adjustment in the Option Price per Share.
18.2. REORGANIZATION IN WHICH THE COMPANY IS THE
SURVIVING ENTITY
Subject to Section 18.3 hereof, if the Company shall
be the surviving Entity in any reorganization, merger, or consolidation of the
Company with one or more other entities, any Option theretofore granted
pursuant to the Plan shall pertain to and apply to the securities to which a
holder of the number of Shares subject to such Option would have been entitled
immediately following such reorganization, merger, or consolidation, with a
corresponding proportionate adjustment of the Option Price per Share so that
the aggregate Option Price thereafter shall be the same as the aggregate Option
Price of the Shares remaining subject to the Option immediately prior to such
reorganization, merger, or consolidation. Subject to any contrary language in
the applicable Restricted Share Agreement, any restrictions that were
applicable to any previously granted Restricted Share Award shall apply as well
to any replacement shares received by the Holder as a result of the
reorganization, merger, or consolidation.
<PAGE> 12
18.3. REORGANIZATION IN WHICH THE COMPANY IS NOT
THE SURVIVING ENTITY OR SALE OF ASSETS OR
SHARES
Upon the dissolution or liquidation of the Company,
or upon a merger, consolidation, or reorganization of the Company with one or
more other entities in which the Company is not the surviving entity, or upon a
sale of substantially all of the assets of the Company to another entity, or
upon any transaction (including, without limitation, a merger or reorganization
in which the Company is the surviving entity) approved by the Board that
results in any person or entity (or person or entities acting as a group or
otherwise in concert) owning 80 percent or more of the combined voting power of
all classes of securities of the Company, the Plan and all Options outstanding
hereunder shall terminate, except to the extent provision is made in writing in
connection with such transaction for the continuation of the Plan or the
assumption of such Options theretofore granted, or for the substitution for
such Options of new options covering the stock of a successor Company, or a
parent or subsidiary thereof, with appropriate adjustments as to the number and
kinds of shares and exercise prices, in which event the Plan and Options
theretofore granted shall continue in the manner and under the terms so
provided. In the event of any such termination of the Plan, each individual
holding an Option shall have the right (subject to the general limitations on
exercise set forth in Section 11.2 above), immediately before the occurrence of
such termination and during such period occurring before such termination as
the Board in its sole discretion shall determine and designate, to exercise
such Option in whole or in part, whether or not such Option was otherwise
exercisable at the time such termination occurs. The Board shall send written
notice of an event that will result in such a termination to all individuals
who hold Options not later than the time at which the Company gives notice
thereof to its stockholders but in no event less than 30 days before the
occurrence of such termination. Unvested Restricted Share Awards shall be
vested in the case of an event described in this Section 18.3.
18.4. ADJUSTMENTS
Adjustments under this Section 18 related to Shares
or securities of the Company shall be made by the Board, whose determination in
that respect shall be final, binding, and conclusive. No fractional Shares or
units of other securities shall be issued pursuant to any such adjustment, and
any fractions resulting from any such adjustment shall be eliminated in each
case by rounding downward to the nearest whole share or unit.
18.5. NO LIMITATIONS ON COMPANY
The grant of Shares and Incentive Awards pursuant to
the Plan shall not affect or limit in any way the right or power of the Company
to make adjustments, reclassifications, reorganizations, or changes of its
capital or business structure or to merge, consolidate, dissolve, or liquidate,
or to sell or transfer all or any part of its business or assets.
19. DISCLAIMER OF RIGHTS
No provision in the Plan or in any Incentive Award granted or
Agreement entered into pursuant to the Plan shall be construed to confer upon
any individual the right to remain in the employ or service of the Company, any
Subsidiary or any Affiliate, or to interfere in any way with any contractual or
other right or authority of the Company, any Subsidiary or any Affiliate either
to increase or decrease the compensation or other payments to any individual at
any time, or to terminate any employment or other relationship between any
individual and the Company, a Subsidiary or an Affiliate. In addition,
notwithstanding anything contained in the Plan to the contrary, unless
otherwise stated in the applicable Agreement, no Incentive Award granted under
the Plan shall be affected by any change of duties or position of the Optionee
or Holder (including a transfer to or from the Company, a Subsidiary or an
Affiliate), so long as such Optionee or Holder continued to be a director,
officer, consultant, employee, or independent contractor (as the case may be)
of the Company, a Subsidiary or an Affiliate. The obligation of the Company to
pay any benefits pursuant to this Plan shall be interpreted as a contractual
obligation to pay only those amounts described herein, in the manner and under
the conditions prescribed herein. The Plan shall in no way be interpreted to
require the Company to transfer any amounts to a third party trustee or
otherwise hold any amounts in trust or escrow for payment to any participant or
beneficiary under the terms of the Plan.
<PAGE> 13
20. NONEXCLUSIVITY OF THE PLAN
The adoption of the Plan shall not be construed as creating
any limitations upon the right and authority of the Board to adopt such other
incentive compensation arrangements (which arrangements may be applicable
either generally to a class or classes of individuals or specifically to a
particular individual or particular individuals) as the Board in its discretion
determines desirable, including, without limitation, the granting of restricted
shares or share options otherwise than under the Plan.
21. CAPTIONS
The use of captions in this Plan or any Agreement is for the
convenience of reference only and shall not affect the meaning of any provision
of the Plan or such Agreement.
22. WITHHOLDING TAXES
22.1. WITHHOLDING
<PAGE> 14
The Company shall have the right to deduct from
payments of any kind otherwise due to an Optionee any Federal, state, or local
taxes of any kind required by law to be withheld with respect to any Shares
issued upon the exercise of an Option under the Plan or with respect to the
termination of the Limitation Period with respect to Restricted Share Awards
under the Plan. At the time of exercise or termination of the Limitation Period,
the Optionee or Holder shall pay to the Company any amount that the Company may
reasonably determine to be necessary to satisfy such withholding obligation.
Subject to the prior approval of the Company, which may be withheld by the
Company in its sole discretion, the Optionee or Holder may elect to satisfy
such obligations, in whole or in part, (i) by causing the Company to withhold
Shares otherwise issuable pursuant to the exercise of an Option or (ii) by
delivering to the Company Shares already owned by the Optionee or Holder. The
Shares so delivered or withheld shall have a fair market value equal to such
withholding obligations. The fair market value of the Shares used to satisfy
such withholding obligation shall be determined by the Company as of the date
that the amount of tax to be withheld is to be determined. An Optionee or
Holder who has made an election pursuant to this Section 24.1 may only satisfy
his or her withholding obligation with Shares that are not subject to any
repurchase, forfeiture, unfulfilled vesting, or other similar requirements.
22.2. LIMITATIONS FOR REPORTING PERSON
Notwithstanding the foregoing, in the case of a
Reporting Person, no election to use Shares for the payment of withholding
taxes shall be effective unless made in compliance with any applicable
requirements under Rule 16b-3(e) or any successor rule under the Exchange Act.
23. OTHER PROVISIONS
Each Incentive Award granted under the Plan may contain such
other terms and conditions not inconsistent with the Plan as may be determined
by the Board, in its sole discretion.
24. NUMBER AND GENDER
With respect to words used in this Plan, the singular form
shall include the plural form, the masculine gender shall include the feminine
gender, etc., as the context requires.
25. SEVERABILITY
If any provision of the Plan or any Agreement shall be
determined to be illegal or unenforceable by any court of law in any
jurisdiction, the remaining provisions hereof and thereof shall be severable
and enforceable in accordance with their terms, and all provisions shall remain
enforceable in any other jurisdiction.
26. GOVERNING LAW
The validity and construction of this Plan and the
instruments evidencing the Incentive Awards granted hereunder shall be governed
by the laws of the State of Maryland.
<PAGE> 1
EXHIBIT 5
HOGAN & HARTSON L.L.P.
111 SOUTH CALVERT STREET
BALTIMORE, MD 21202
FEBRUARY 18, 2000
GUILFORD PHARMACEUTICALS INC.
6611 TRIBUTARY STREET
BALTIMORE, MARYLAND 21224
LADIES AND GENTLEMEN:
This firm has acted as counsel to Guilford Pharmaceuticals Inc., a Delaware
corporation (the "Company"), in connection with its registration, pursuant to a
registration statement on Form S-8 filed on the date hereof (the "Registration
Statement"), of 500,000 shares (the "Shares") of common stock, par value $.01
per share of the Company (the "Common Stock"), to be granted pursuant to the
Guilford Pharmaceuticals Inc. 1998 Employee Share Option and Restricted Share
Plan, as amended (the "Plan"). This letter is furnished to you pursuant to the
requirements of Item 601(b)(5) of Regulation S-K, 17 C.F.R. Section
229.601(b)(5) in connection with such registration.
For purposes of this opinion letter, we have examined copies of the
following documents:
1. An executed copy of the Registration Statement.
2. The Certificate of Incorporation of the Company with amendments
thereto, as certified by the Secretary of State of the State of
Delaware on February 11, 2000, and as certified by the Secretary of the
Company on the date hereof as being complete, accurate and in effect.
3. The Bylaws of the Company, as certified by the Secretary of the
Company on the date hereof as being complete, accurate and in effect.
4. The Plan as adopted by the Board of Directors of the Company and as
certified by the Secretary of the Company on the date hereof as being
complete, accurate and in effect.
5. Resolutions of the Board of Directors of the Company adopted on
February 17, 1998 and February 23, 1999, as certified by the Secretary
of the Company on the date hereof as being complete, accurate and in
effect, relating to, among other things, the approval of the Plan and
the filing of the Registration Statement.
6. A certificate of certain officers of the Company, dated the date
hereof, as to certain facts relating to the Company.
In our examination of the aforesaid documents, we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
accuracy and completeness of all documents submitted to us, the authenticity of
all original documents and the conformity to authentic original documents of
all documents submitted to us as copies (including telecopies). This opinion
letter is given, and all statements herein are made, in the context of the
foregoing.
This opinion letter is based as to matters of law solely on the Delaware
General Corporation Law, and we express no opinion as to any other laws,
statutes, ordinances, rules or regulations. As used herein, the term "Delaware
General Corporation Law, as amended" includes the statutory provisions
contained therein, all applicable provisions of the Delaware Constitution and
reported judicial decisions interpreting these laws.
<PAGE> 2
Based upon, subject to and limited by the foregoing, we are of the opinion
that following (i) effectiveness of the Registration Statement, (ii) issuance
and delivery of the Shares pursuant to the terms of the Plan and in the
manner contemplated by the Registration Statement and (iii) receipt by the
Company of the consideration (the form of which is accordance with applicable
law) for the Shares, the Shares will be validly issued, fully paid and
non-assessable.
We assume no obligation to advise you of any changes in the foregoing
subsequent to the delivery of this opinion letter. This opinion letter has been
prepared for your use in connection with filing of the Registration Statement
and speaks as of the date hereof.
We hereby consent to the filing of this opinion letter as Exhibit 5 to the
Registration Statement. In giving this consent, we do not thereby admit that we
are an "expert" within the meaning of the Securities Act of 1933, as amended.
SINCERELY YOURS,
HOGAN & HARTSON L.L.P.
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
THE BOARD OF DIRECTORS
GUILFORD PHARMACEUTICALS INC.
We consent to the use of our report incorporated herein by reference in the
Form S-8 of Guilford Pharmaceuticals Inc.
/s/ KPMG LLP
PHILADELPHIA, PENNSYLVANIA
FEBRUARY 16, 2000
