As filed with the Securities and Exchange Commission on December 9, 1999
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
Neurobiological
Technologies, Inc.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware 94-3049219
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1387 Marina Way South, Richmond, California 94804
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(Address of Principal Executive Offices)
Amended and Restated Employee Stock Purchase Plan
Amended and Restated 1993 Stock Plan
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(Full Title of the Plan)
Paul E. Freiman
Chief Executive Officer and President
1387 Marina Way South
Richmond, California 94804
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(Name and Address of Agent For Service)
(510) 215-8000
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(Telephone Number, Including Area Code, of Agent For Service)
Copy to:
Stephen C. Ferruolo
Heller Ehrman White & McAuliffe
4250 Executive Square, 7th Floor
San Diego, California 92037-9103
Telephone: (858) 450-8400
Facsimile: (858) 450-8499
CALCULATION OF REGISTRATION FEE
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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
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Common Stock, par value $.001 550,000 $2.78 $1,529,000 $404
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(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 bid and asked price of the Registrant's Common
Stock reported on the OTC Bulletin Board on December 6, 1999.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents filed or to be filed with the Securities and
Exchange Commission (the "Commission") by the registrant are incorporated by
reference in this registration statement:
(a) The registrant's latest annual report (Form 10-KSB) filed pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the
Exchange Act), the registrant's latest quarterly report (Form 10-QSB) filed
pursuant to Section 13(a) or 15(d) of the Exchange Act, or the latest prospectus
filed pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the
Securities Act), that contains audited financial statements for the registrant's
latest fiscal year for which such statements have been filed;
(b) All other reports filed by the registrant pursuant to Section 13(a) or
15(d) of the Exchange Act since the end of the fiscal year covered by the annual
report or prospectus referred to in (a) above;
(c) The description of the Common Stock of the registrant contained in the
registrant's registration statement filed under the Exchange Act registering
such Common Stock under Section 12 of the Exchange Act; and
(d) All documents subsequently filed by the registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered hereby have
been sold or which deregisters all securities then remaining unsold.
Item 6. Indemnification of Directors and Officers
The registrant has the power to indemnify its officers and directors
against liability for certain acts pursuant to Section 145 of the General
Corporation Law of the State of Delaware. Article VIII, Sections A, B and C of
the registrant's Restated Certificate of Incorporation provide as follows:
"A. No Personal Liability. A director of the Corporation shall not be
personally liable to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as director, except for liability (a) for any
breach of the director's duty to loyalty to the Corporation and its
stockholders; (b) for act or omissions not in good faith or which involve
intentional misconduct or knowing violations of law; (c) under Section 174 of
the Delaware General Corporation Law; or (d) for any transaction from which the
director derived an improper personal benefit.
B. Indemnification. Each person who is or is made a party or is threatened
to be made a party to or is involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (hereinafter a "proceeding"),
by reason of the fact that he or she, or a person of whom he or she is the legal
representative , is or was a director or officer of the Corporation or is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is alleged action in an official capacity as a
director, officer, employee or agent or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held harmless by
the Corporation to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended (but, in the
case of any such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than said law permitted
the Corporation to provide prior to such amendment), against all expense,
liability and loss (including attorneys' fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid or to be paid in settlement) reasonably
incurred or suffered by such person in connection therewith and such
indemnification shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of his or her heirs,
executors and administrators; provided, however, that, except as provided in
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the second paragraph hereof, the Corporation shall indemnify any such person
seeking indemnification in connection with a proceeding (or part thereof)
initiated by such person only if such proceeding (or part thereof) was
authorized by the Board of Directors of the Corporation. The right to
indemnification conferred in this section shall be a contract right and shall
include the right to be paid by the Corporation any expenses incurred in
defending any such proceeding in advance of its final disposition; provided,
however, that, if the Delaware General Corporation Law requires, the payment of
such expenses incurred by a director or officer in his or her capacity as a
director or officer (and not in any other capacity in which service was or is
rendered by such person while a director or officer, including, without
limitation, service to an employee benefit plan) in advance of the final
disposition of a proceeding, shall be made only upon delivery to the Corporation
of an undertaking, by or on behalf of such director or officer, to repay all
amounts so advanced if it shall ultimately be determined that such director or
officer is not entitled to be indemnified under this section or otherwise. The
Corporation may, by action of its Board of Directors, provide indemnification to
employees and agents of the Corporation with the same scope and effect as the
foregoing indemnification of directors and officers.
If a claim under the first paragraph of this section is not paid in full by
the Corporation within thirty (30) days after a written claim has been received
by the Corporation, the claimant may at any time thereafter bring suit against
the Corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any is required, has been tendered to the Corporation) that the claimant has
not met the standards of conduct which make it permissible under the Delaware
General Corporation Law for the Corporation to indemnify the claimant for the
amount claimed, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the Delaware General Corporation
Law, nor an actual determination by the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders)that the claimant has
not met such applicable standard of conduct, shall be a defense to the action or
create a presumption that the claimant had not met the applicable standard of
conduct.
The right to indemnification and the payment of expenses incurred in
defending a proceeding in advance of its final disposition conferred in this
section shall not be exclusive of any other right which any person may have or
hereafter acquire under any statute, provision of the Restated Certificate of
Incorporation, bylaw, agreement, vote of stockholders or disinterested directors
or otherwise.
C. The Corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the Corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any such expense, liability or loss, whether or not the Corporation
would have the power to indemnify such person against such expense, liability or
loss under the Delaware General Corporation Law."
In addition, Article V of the registrant's Bylaws provides as follows:
"Section 1. Actions Other than by or in the Right of the Corporation.
Subject to Section 4 of this Article V, the corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the corporation) by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceedings, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which
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he reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
Section 2. Actions Other Than by or in the Right of the Corporation.
Subject to Section 4 of this Article V, the corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that he is
or was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation; except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery of the State of
Delaware or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery of the State of Delaware
or such other court shall deem proper.
Section 3. Success on the Merits. To the extent that any person described
in Section 1 or 2 of this Article V has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in said
Sections, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
Section 4. Specific Authorization. Any indemnification under Section 1 or 2
of this Article V (unless ordered by a court) shall be made by the corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances because he has met the applicable standard of conduct set forth in
Section 1 or 2, as the case may be, of this Article V. Such determination shall
be made (1) by the board of directors by a majority vote of a quorum consisting
of directors who were not parties to such action, suit or proceeding, or (2) if
such a quorum is not obtainable, or, even if obtainable a quorum of
disinterested directors so directs, by independent legal counsel in a written
opinion, or (3) by the stockholders of the corporation.
Section 5. Advance Payment. Expenses incurred in defending a civil or
criminal action, suit or proceeding may be paid by the corporation in advance of
the final disposition of such action, suit or proceeding as authorized by the
board of directors in the manner provided for in Section 4 of this Article V
upon receipt of an undertaking by or on behalf of any person described in said
Section to repay such amount unless it shall ultimately be determined that he is
entitled to indemnification by the corporation as authorized in this Article V.
Section 6. Non-Exclusivity. The indemnification and advancement of expenses
provided by this Article V shall not be deemed exclusive of any other rights to
which those seeking indemnification or advancement of expenses may be entitled
under any bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be director, officer, employee or agent of the corporation and
shall inure to the benefit of the heirs, executors and administrators of such a
person; provided, however, that any repeal or amendment of any of the provisions
of this Article V shall not adversely affect any right or protection of any
indemnitee existing at the time of such repeal or amendment.
Section 7. Insurance. The board of directors may authorize, by a vote of
the majority of the full board, the corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted against
him and incurred by him in any such capacity, or arising out of his status as
such, whether or not the corporation would have the power to indemnify him
against such liability under the provisions of this Article V.
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Section 8. Severability. If any word, clause or provision of this Article V
or any award made hereunder shall for any reason be determined to be invalid,
the provisions hereof shall not otherwise be affected thereby but shall remain
in full force and effect.
Section 9. Intent of Article. The intent of this Article V is to provide
for indemnification to the fullest extent not prohibited by section 145 of the
General Corporation Law of Delaware. To the extent that such Section or any
successor section may be amended or supplemented from time to time, this Article
V shall be amended automatically and construed so as to permit indemnification
to the fullest extent from time to time not prohibited by law."
Item 8. Exhibits
5.1 Opinion of Heller Ehrman White & McAuliffe
23.1 Consent of Ernst & Young LLP, Independent Auditors
23.2 Consent of Heller Ehrman White & McAuliffe (filed as part of
Exhibit 5.1)
24.1 Power of Attorney (See page II-4)
99.1 Amended and Restated Employee Stock Purchase Plan
99.2 Amended and Restated 1993 Stock Plan
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
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 registrant hereby undertakes that, for purposes of
determining liability under the Securities Act, each filing of the registrant's
annual report pursuant to Section 13(a) or 15(d) of the Exchange Act
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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.
C. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the 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 expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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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 Richmond, State of California, on this 9th day of
December, 1999.
NEUROBIOLOGICAL TECHNOLOGIES, INC.
By: /s/ Paul E. Freiman
Paul E. Freiman
President and Chief Executive Officer
POWER OF ATTORNEY TO SIGN AMENDMENT
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint Paul E. Freiman, such person's true and
lawful attorney-in-fact and agent 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
attorney-in-fact and agent 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 attorney-in-fact and agent 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.
Signature Capacity Date
- -------------------------- -------------------------------- ----------------
/s/ Paul E Freiman President, Chief Executive December 4, 1999
- -------------------------- Officer and Director (Principal
Paul E. Freiman Executive Officer, Principal
Financial Officer and Principal
Accounting Officer)
/s/ Abraham E. Cohen Chairman of the Board of December 3, 1999
- -------------------------- Directors
Abraham E. Cohen
/s/ Enoch Calloway Director December 4, 1999
- --------------------------
Enoch Calloway
/s/ Theodore L. Eliot, Jr. Director December 3, 1999
- --------------------------
Theodore L. Eliot, Jr.
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/s/ Abraham D. Sofaer Director December 3, 1999
- --------------------------
Abraham D. Sofaer
/s/ John B. Stuppin Director December 4, 1999
- --------------------------
John B. Stuppin
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Index to Exhibits
Item No. Description of Item
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5.1 Opinion of Heller Ehrman White & McAuliffe
23.1 Consent of Ernst & Young LLP, Independent Auditors
23.2 Consent of Heller Ehrman White & McAuliffe (filed as part of
Exhibit 5.1)
24.1 Power of Attorney (See page II-4)
99.1 Amended and Restated Employee Stock Purchase Plan
99.2 Amended and Restated 1993 Stock Plan
December 9, 1999
23855-0001
Neurobiological Technologies, Inc.
1387 Marina Way South
Richmond, California 94804
Re: Registration Statement on Form S-8
Dear Ladies and Gentlemen:
We have acted as counsel to Neurobiological Technologies, Inc., a Delaware
corporation (the "Company"), in connection with the Registration Statement on
Form S-8 (the "Registration Statement") which the Company proposes to file with
the Securities and Exchange Commission on December 9, 1999 for the purpose of
registering under the Securities Act of 1933, as amended, an additional 550,000
shares of its Common Stock, par value $.001 (the "Shares") 500,000 of which are
issuable under the Company's Amended and Restated 1993 Stock Option Plan (the
"Option Plan") and 50,000 of which are issuable under the Company's Amended and
Restated Employee Stock Purchase Plan (the "ESPP" together with the Option Plan
the "Plans").
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.
Exhibit 5.1
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Neurobiological Technologies, Inc. Heller Ehrman White & McAuliffe
December 9, 1999 ATTORNEYS
Page 2
In rendering our opinion, we have examined the following records, documents
and instruments:
(a) The Restated Certificate of Incorporation of the Company, certified by
the Delaware Secretary of State as of November 29, 1999, 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 (i) attaching records
certified to us as constituting all records of proceedings and actions
of the Board of Directors, including any committee thereof, and
stockholders of the Company relating to the Shares, the Plans and the
Registration Statement, and (ii) certifying as to certain factual
matters;
(d) The Registration Statement;
(e) The Option Plan;
(f) The ESPP; and
(g) A letter from ChaseMellon Shareholder Services, LLC, the Company's
transfer agent, dated November 30, 1999, as to the number of shares of
the Company's common stock that were outstanding on November 29, 1999.
This opinion is limited to the federal laws of the United States of
America, the laws of the State of California, and the General Corporation Law of
the State of Delaware as to corporate formalities, and 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 or 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 Plans is paid for each Share and that 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
Exhibit 5.1
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Neurobiological Technologies, Inc. Heller Ehrman White & McAuliffe
December 9, 1999 ATTORNEYS
Page 3
securities laws are complied with, it is our opinion that when issued and sold
by the Company, after payment therefore in the manner provided in the Plans and
the Registration Statement, 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 hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Heller Ehrman White & McAuliffe
Exhibit 5.1
Exhibit 23.1
Consent of Ernst & Young LLP, Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the Amended and Restated Employee Stock Purchase Plan and the
Amended and Restated 1993 Stock Plan of Neurobiological Technologies, Inc. of
our report dated August 6, 1999 with respect to the financial statements of
Neurobiological Technologies, Inc. included in its Annual Report (Form 10-KSB)
for the year ended June 30, 1999, as filed with the Securities and Exchange
Commission.
/s/ Ernst & Young LLP
Palo Alto, California
December 7, 1999
Exhibit 99.1
AMENDED AND RESTATED
NEUROBIOLOGICAL TECHNOLOGIES, INC.
EMPLOYEE STOCK PURCHASE PLAN
I. 1. PURPOSE OF THE PLAN.
The Plan was adopted by the Company's Board of Directors on December 15,
1993, approved by the Company's stockholders in January 1994 and amended and
restated by the Company's Board of Directors on August 22, 1996, and approved by
the stockholders on November 14, 1996.
The purpose of the Plan is to provide Eligible Employees with an
opportunity to increase their proprietary interest in the success of the Company
by purchasing Stock from the Company on favorable terms and to pay for such
purchases through payroll deductions. The Plan is intended to qualify under
section 423 of the Internal Revenue Code of 1986, as amended.
II. 2. ADMINISTRATION OF THE PLAN.
A. (a) The Committee. The Plan shall be administered by the Committee.
The interpretation and construction by the Committee of any provision of
the Plan or of any right to purchase Stock granted under the Plan shall be
conclusive and binding on all persons.
B. (b) Rules and Forms. The Committee may adopt such rules and forms
under the Plan as it considers appropriate.
III. 3. ENROLLMENT AND PARTICIPATION.
A. (a) Offering Periods. While the Plan is in effect, two overlapping
Offering Periods shall commence in each calendar year. The Offering Periods
shall consist of the 24-month periods commencing on each January 1 and July
1.
B. (b) Accumulation Periods. While the Plan is in effect, two
Accumulation Periods shall commence in each calendar year. The Accumulation
Periods shall consist of the six-month periods commencing on each January 1
and July 1.
C. (c) Enrollment. Any individual who, on the day preceding the first
day of an Offering Period, qualifies as an Eligible Employee may elect to
become a Participant in the Plan for such Offering Period by executing the
enrollment form prescribed for this purpose by the Committee. The
enrollment form shall be filed with the Company not later than one week
prior to the last working day prior to the commencement of such Offering
Period.
D. (d) Duration of Participation. Once enrolled in the Plan, a
Participant shall continue to participate until he or she ceases to be an
Eligible Employee, withdraws from the Plan or reaches the end of the
Accumulation Period in which he or she discontinued contributions. A
Participant who discontinued contributions under Section 4(d) or withdrew
from the Plan under Section 5(a) may again become a Participant, if he or
she then is an Eligible Employee, by following the procedure described in
Subsection (c) above.
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E. (e) Applicable Offering Period. For purposes of calculating the
Purchase Price under Section 7(b), the applicable Offering Period shall be
determined as follows:
1. (i) Once a Participant is enrolled in the Plan for an
Offering Period, such Offering Period shall continue to
apply to him or her until the earliest of (A) the end of
such Offering Period, (B) the end of his or her
participation under Subsection (d) above or (C)
reenrollment in a subsequent Offering Period under
Paragraph (ii) below.
2. (ii) In the event that the Fair Market Value of Stock on
the last trading day before the commencement of the
Offering Period in which the Participant is enrolled is
higher than on the last trading day before the commencement
of any subsequent Offering Period, the Participant shall
automatically be re-enrolled for such subsequent Offering
Period.
3. (iii) When a Participant reaches the end of an Offering
Period but his or her participation is to continue, then
such Participant shall automatically be re-enrolled for the
Offering Period that commences immediately after the end of
the prior Offering Period.
IV. 4. EMPLOYEE CONTRIBUTIONS.
A. (a) Frequency of Payroll Deductions. A Participant may purchase
shares of Stock under the Plan solely by means of payroll deductions.
Payroll deductions, as designated by the Participant pursuant to Subsection
(b) below, shall occur on each payday during participation in the Plan.
B. (b) Amount of Payroll Deductions. An Eligible Employee shall
designate on the enrollment form the portion of his or her Compensation
that he or she elects to have withheld for the purchase of Stock. Such
portion shall be a whole percentage of the Eligible Employee's
Compensation, but not less than 1% nor more than 10%.
C. (c) Changing Withholding Rate. If a Participant wishes to change
the rate of payroll withholding, he or she may do so by filing a new
enrollment form with the Company not later than one week prior to the last
working day prior to the commencement of the Accumulation Period for which
such change is to be effective.
D. (d) Discontinuing Payroll Deductions. If a Participant wishes to
discontinue employee contributions entirely, he or she may do so by filing
a new enrollment form at any time. Payroll withholding shall cease as soon
as reasonably practicable after such form has been received by the Company.
V. 5. WITHDRAWAL FROM THE PLAN.
A. (a) Withdrawal. A Participant may elect to withdraw from the Plan
by filing the prescribed form with the Company at any time before the last
day of an Accumulation Period. As soon as reasonably practicable
thereafter, payroll deductions shall cease and the entire amount credited
to the Participant's Plan Account shall be refunded to him or her in cash,
without interest. No partial withdrawals shall be permitted.
B. (b) Re-Enrollment After Withdrawal. A former Participant who has
withdrawn
from the Plan shall not be a Participant until he or she re-enrolls in the Plan
under Section 3(b).
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VI. 6. TERMINATION OF EMPLOYMENT OR DEATH.
A. (a) Termination of Employment. Termination of employment as an
Eligible Employee for any reason, including death, shall be treated as an
automatic withdrawal from the Plan under Section 5(a). (A transfer from one
Participating Company to another shall not be treated as a termination of
employment.)
B. (b) Death. In the event of the Participant's death, the amount
credited to his or her Plan Account shall be paid to a beneficiary
designated by him or her for this purpose on the prescribed form or, if
none, to the Participant's estate. Such form shall be valid only if it was
filed with the Company before the Participant's death.
VII. 7. PLAN ACCOUNTS AND PURCHASE OF SHARES.
A. (a) Plan Accounts. The Company shall maintain a Plan Account on its
books in the name of each Participant. Whenever an amount is deducted from
the Participant's Compensation under the Plan, such amount shall be
credited to the Participant's Plan Account. No interest shall be credited
to Plan Accounts.
B. (b) Purchase Price. The Purchase Price for each share of Stock
purchased at the close of an Accumulation Period shall be the lower of:
C. (i) 85% of the Fair Market Value of such share on the last trading
day before the commencement of the applicable Offering Period (as
determined under Section 3(e)); or
D. (ii) 85% of the Fair Market Value of such share on the last trading
day in such Accumulation Period.
E. (c) Number of Shares Purchased. As of the last day of each
Accumulation Period, each Participant shall be deemed to have elected to
purchase the number of shares of Stock calculated in accordance with this
Subsection (c), unless the Participant has previously elected to withdraw
from the Plan in accordance with Section 5(a). The amount then in the
Participant's Plan Account shall be divided by the Purchase Price, and the
number of shares that results shall be purchased from the Company with the
funds in the Participant's Plan Account. The foregoing notwithstanding, no
Participant shall purchase more than a maximum of 2,500 shares of Stock
with respect to any Accumulation Period nor shares of Stock in excess of
the amounts set forth in Sections 8 and 12(a). The Committee may determine
with respect to all Participants that any fractional share, as calculated
under this Subsection (c), shall be rounded down to the next lower whole
share.
F. (d) Available Shares Insufficient. In the event that the aggregate
number of shares that all Participants elect to purchase during an
Accumulation Period exceeds the maximum number of shares remaining
available for issuance under Section 12(a), then the number of shares to
which each Participant is entitled shall be determined by multiplying the
number of shares available for issuance by a fraction, the numerator of
which is the number of shares that such Participant has elected to purchase
and the denominator of which is the number of shares that all Participants
have elected to purchase.
G. (e) Issuance of Stock. Certificates representing the shares of
Stock purchased by a Participant under the Plan shall be issued to him or
her as soon as reasonably practicable after the close of the applicable
Accumulation Period, except that the Committee may determine that such
shares shall be held for each Participant's benefit by a broker designated
by the Committee (unless the Participant has elected that certificates be
issued to him or her). Shares may be registered in the name of the
Participant or jointly in the name of the Participant and his or her spouse
as joint tenants with right of survivorship or as community property.
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H. (f) Unused Cash Balances. An amount remaining in the Participant's
Plan Account that represents the Purchase Price for any fractional share
shall be carried over in the Participant's Plan Account to the next
Accumulation Period. Any amount remaining in the Participant's Plan Account
that represents the Purchase Price for whole shares that could not be
purchased by reason of Subsection (c) above or Section 12(a) shall be
refunded to the Participant in cash, without interest.
VIII. 8. LIMITATIONS ON STOCK OWNERSHIP.
A. Any other provision of the Plan notwithstanding, no Participant
shall be granted a right to purchase Stock under the Plan if:
B. (a) Such Participant, immediately after his or her election to
purchase such Stock, would own stock possessing more than 5% of the total
combined voting power or value of all classes of stock of the Company or
any parent or Subsidiary of the Company; or
C. (b) Under the terms of the Plan, such Participant's rights to
purchase stock under this and all other qualified employee stock purchase
plans of the Company or any parent or Subsidiary of the Company would
accrue at a rate that exceeds $25,000 of the fair market value of such
stock (determined at the time when such right is granted) for each calendar
year for which such right or option is outstanding at any time.
Ownership of stock shall be determined after applying the attribution rules
of section 424(d) of the Internal Revenue Code of 1986, as amended. For purposes
of this Section 8, each Participant shall be considered to own any stock that he
or she has a right or option to purchase under this or any other plan, and each
Participant shall be considered to have the right to purchase 2,500 shares of
Stock under this Plan with respect to each Accumulation Period.
IX. 9. RIGHTS NOT TRANSFERABLE.
The rights of any Participant under the Plan, or any Participant's interest
in any Stock or moneys to which he or she may be entitled under the Plan, shall
not be transferable by voluntary or involuntary assignment or by operation of
law, or in any other manner other than by beneficiary designation or the laws of
descent and distribution. If a Participant in any manner attempts to transfer,
assign or otherwise encumber his or her rights or interest under the Plan, other
than by beneficiary designation or the laws of descent and distribution, then
such act shall be treated as an election by the Participant to withdraw from the
Plan under Section 5(a).
X. 10. NO RIGHTS AS AN EMPLOYEE.
Nothing in the Plan shall be construed to give any person the right to
remain in the employ of a Participating Company. Each Participating Company
reserves the right to terminate the employment of any person at any time, with
or without cause.
XI. 11. NO RIGHTS AS A STOCKHOLDER.
A Participant shall have no rights as a stockholder with respect to any
shares that he or she has purchased, or may have a right to purchase, under the
Plan until the date of issuance of a stock certificate for such shares.
XII. 12. STOCK OFFERED UNDER THE PLAN.
A. (a) Authorized Shares. The aggregate number of shares of Stock
available for purchase under the Plan shall be 150,000, subject to
adjustment pursuant to this Section 12.
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B. (b) Anti-Dilution Adjustments. The aggregate number of shares of
Stock offered under the Plan, the 2,500-share limitation described in
Section 7(c) and the price of shares that any Participant has elected to
purchase shall be adjusted proportionately by the Committee for any
increase or decrease in the number of outstanding shares of Stock resulting
from a subdivision or consolidation of shares, the payment of a stock
dividend, any other increase or decrease in such shares effected without
receipt or payment of consideration by the Company or the distribution of
the shares of a Subsidiary to the Company's stockholders.
C. (c) Reorganizations. In the event of a dissolution or liquidation
of the Company, or a merger or consolidation to which the Company is a
constituent corporation, the Plan shall terminate unless the plan of
merger, consolidation or reorganization provides otherwise, and all amounts
that have been withheld but not yet applied to purchase Stock hereunder
shall be refunded, without interest. The Plan shall in no event be
construed to restrict in any way the Company's right to undertake a
dissolution, liquidation, merger, consolidation or other reorganization.
XIII. 13. AMENDMENT OR DISCONTINUANCE.
The Board of Directors shall have the right to amend, suspend or
terminate the Plan at any time and without notice. Except as provided in
Section 12, any increase in the aggregate number of shares of Stock to be
issued under the Plan shall be subject to approval by a vote of the
stockholders of the Company. In addition, any other amendment of the Plan
shall be subject to approval by a vote of the stockholders of the Company
to the extent required by an applicable law or regulation.
XIV. 14. DEFINITIONS.
A. (a) "Accumulation Period" means a six-month period during which
contributions may be made toward the purchase of Stock under the Plan, as
determined pursuant to Section 3(b).
B. (b) "Board of Directors" means the Board of Directors of the
Company, as constituted from time to time.
C. (c) "Committee" means a committee of the Board of Directors,
consisting of one or more directors appointed by the Board of Directors.
D. (d) "Company" means Neurobiological Technologies, Inc., a Delaware
corporation.
E. (e) "Compensation" means the total compensation paid in cash to a
Participant by a Participating Company, including salaries, wages, bonuses,
incentive compensation, commissions and overtime pay, but excluding moving
or relocation allowances, car allowances, imputed income attributable to
cars or life insurance, taxable fringe benefits and similar items, all as
determined by the Committee.
F. (f) "Eligible Employee" means any employee of a Participating
Company:
1. (i) Whose customary employment is for more than five months
per calendar year and for more than 20 hours per week; and
2. (ii) Who has been an employee of a Participating Company
for not less than three consecutive months.
G. (g) "Fair Market Value" shall mean the market price of Stock,
determined by the Committee as follows:
1. (i) If Stock was traded over-the-counter on the
date in question but was not traded on the Nasdaq Stock
Market or the Nasdaq National Market, then the Fair Market
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Value shall be equal to the mean between the last reported
representative bid and asked prices quoted for such date by
the principal automated inter-dealer quotation system on
which Stock is quoted or, if the Stock is not quoted on any
such system, by the "Pink Sheets" published by the National
Quotation Bureau, Inc.;
2. (ii) If Stock was traded over-the-counter on the date in
question and was traded on the Nasdaq Stock Market or the
Nasdaq National Market, then the Fair Market Value shall be
equal to the last-transaction price quoted for such date by
the Nasdaq Stock Market or the Nasdaq National Market;
3. (iii) If the Stock was traded on a stock exchange on the
date in question, then the Fair Market Value shall be equal
to the closing price reported by the applicable composite
transactions report for such date; and
4. (iv) If none of the foregoing provisions is
applicable, then the Fair Market Value shall be determined
by the Committee in good faith on such basis as it deems
appropriate.
Whenever possible, the determination of Fair Market Value by the
Committee shall be based on the prices reported in the Western Edition of
The Wall Street Journal. Such determination shall be conclusive and binding
on all persons.
H. (h) "Offering Period" means a 24-month period with respect to which
the right to purchase Stock may be granted under the Plan, as determined
pursuant to Section 3(a).
I. (i) "Participant" means an Eligible Employee who elects to
participate in the Plan, as provided in Section 3(c).
J. (j) "Participating Company" means the Company and each present or
future Subsidiary, except Subsidiaries excluded by the Committee.
K. (k) "Plan" means this Neurobiological Technologies, Inc. Employee
Stock Purchase Plan, as amended from time to time.
L. (l) "Plan Account" means the account established for each
Participant pursuant to Section 6(a).
M. (m) Purchase Price" means the price at which Participants may
purchase Stock under the Plan, as determined pursuant to Section 7(b).
N. (n) "Stock" means the Common Stock of the Company.
O. (o) "Subsidiary" means a corporation, 50% or more of the total
combined voting power of all classes of stock of which is owned by the
Company or by another Subsidiary.
XV. 15. EXECUTION.
To record the amendment and restatement of the Plan by the Board of
Directors, the Company has caused its duly authorized officer to affix the
corporate name and seal hereto.
NEUROBIOLOGICAL TECHNOLOGIES, INC.
By /s/ Paul E. Freiman
--------------------------------------
President and Chief Executive Officer
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Exhibit 99.2
1993 STOCK PLAN OF
NEUROBIOLOGICAL TECHNOLOGIES, INC.
SECTION 1. ESTABLISHMENT AND PURPOSE.
Its purpose is to offer directors and selected employees, advisors and
consultants an opportunity to acquire a proprietary interest in the success of
the Company, or to increase such interest, by purchasing Shares of the Company's
Common Stock. The Plan provides both for the direct award or sale of Shares and
for the grant of Options to purchase Shares. Options granted under the Plan may
include Nonstatutory Options as well as Incentive Stock Options intended to
qualify under section 422 of the Code.
The Plan is intended to comply in all respects with Rule 16b 3 (or its
successor) under the Exchange Act and shall be construed accordingly.
SECTION 2. DEFINITIONS.
(a) "Board of Directors" shall mean the Board of Directors of the Company,
as constituted from time to time.
(b) "Change in Control" shall mean the occurrence of either of the
following events:
(i) A change in the composition of the Board of Directors, as a result
of which fewer than one-half of the incumbent directors are directors who
either:
(A) Had been directors of the Company 24 months prior to such
change; or
(B) Were elected, or nominated for election, to the Board of
Directors with the affirmative votes of at least a majority of the directors who
had been directors of the Company 24 months prior to such change and who were
still in office at the time of the election or nomination; or
(ii) Any "person" (as such term is used in sections 13(d) and 14(d) of
the Exchange Act) by the acquisition or aggregation of securities is or becomes
the beneficial owner, directly or indirectly, of securities of the Company
representing 30 percent or more of the combined voting power of the Company's
then outstanding securities ordinarily (and apart from rights accruing under
special circumstances) having the right to vote at elections of directors (the
"Base Capital Stock"); except that any change in the relative beneficial
ownership of the Company's securities by any person resulting solely from a
reduction in the aggregate number of outstanding shares of Base Capital Stock,
and any decrease thereafter in such person's ownership of securities, shall be
disregarded until such person increases in any manner, directly or indirectly,
such person's beneficial ownership of any securities of the Company.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(d) "Committee" shall mean a committee of the Board of Directors, as
described in Section 3(a).
(e) "Company" shall mean Neurobiological Technologies, Inc., a Delaware
corporation.
(f) "Employee" shall mean (i) any individual who is a common-law employee
of the Company or of a Subsidiary, (ii) an Outside Director and (iii) an
independent contractor who performs services for the Company or a Subsidiary and
who is not a member of the Board of Directors. Service as an Outside Director or
independent contractor shall be considered employment for all purposes of the
Plan, except as provided in Subsections (a) and (b) of Section 4.
(g) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
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(h) "Exercise Price" shall mean the amount for which one Share may be
purchased upon exercise of an Option, as specified by the Committee in the
applicable Stock Option Agreement.
(i) "Fair Market Value" shall mean the market price of Stock, determined by
the Committee as follows:
(i) If Stock was traded over-the-counter on the date in question but
was not traded on the Nasdaq Stock Market or the Nasdaq National Market, then
the Fair Market Value shall be equal to the mean between the last reported
representative bid and asked prices quoted for such date by the principal
automated inter-dealer quotation system on which Stock is quoted or, if the
Stock is not quoted on any such system, by the "Pink Sheets" published by the
National Quotation Bureau, Inc.;
(ii) If Stock was traded over-the-counter on the date in question and
was traded on the Nasdaq Stock Market or the Nasdaq National Market, then the
Fair Market Value shall be equal to the last-transaction price quoted for such
date by the Nasdaq Stock Market or the Nasdaq National Market;
(iii) If Stock was traded on a stock exchange on the date in question,
then the Fair Market Value shall be equal to the closing price reported by the
applicable composite-transactions report for such date; and
(iv) If none of the foregoing provisions is applicable, then the Fair
Market Value shall be determined by the Committee in good faith on such basis as
it deems appropriate.
Whenever possible, the determination of Fair Market Value by the Committee
shall be based on the prices reported in the Western Edition of The Wall Street
Journal. Such determination shall be conclusive and binding on all persons.
(j) "ISO" shall mean an employee incentive stock option described in
section 422(b) of the Code.
(k) "Nonstatutory Option" shall mean a stock option not described in
sections 422(b) or 423(b) of the Code.
(l) "Offeree" shall mean an individual to whom the Committee has offered
the right to acquire Shares under the Plan (other than upon exercise of an
Option).
(m) "Option" shall mean an ISO or Nonstatutory Option granted under the
Plan and entitling the holder to purchase Shares.
(n) "Optionee" shall mean an individual who holds an Option.
(o) "Outside Director" shall mean a member of the Board of Directors who is
not a common-law employee of the Company or of a Subsidiary.
(p) "Plan" shall mean this 1993 Stock Plan of Neurobiological Technologies,
Inc., as amended from time to time.
(q) "Purchase Price" shall mean the consideration for which one Share may
be acquired under the Plan (other than upon exercise of an Option), as specified
by the Committee.
(r) "Service" shall mean service as an Employee.
(s) "Share" shall mean one share of Stock, as adjusted in accordance with
Section 9 (if applicable).
(t) "Stock" shall mean the Common Stock of the Company.
(u) "Stock Option Agreement" shall mean the agreement between the Company
and an Optionee which contains the terms, conditions and restrictions pertaining
to his or her Option.
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(v) "Stock Purchase Agreement" shall mean the agreement between the Company
and an Offeree who acquires Shares under the Plan which contains the terms,
conditions and restrictions pertaining to the acquisition of such Shares.
(w) "Subsidiary" shall mean any corporation, if the Company and/or one or
more other Subsidiaries own not less than 50 percent of the total combined
voting power of all classes of outstanding stock of such corporation. A
corporation that attains the status of a Subsidiary on a date after the adoption
of the Plan shall be considered a Subsidiary commencing as of such date.
(x) "Total and Permanent Disability" shall mean that the Optionee is unable
to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted, or can be expected to last, for a continuous period
of not less than one year.
SECTION 3. ADMINISTRATION.
(a) Committee Membership. The Plan shall be administered by the Committee.
The Committee shall consist of two or more disinterested directors of the
Company and shall meet such other requirements as may be established from time
to time by the Securities and Exchange Commission for plans intended to qualify
for exemption under Rule 16b 3 (or its successor) under the Exchange Act. The
Board of Directors may appoint a separate committee of the Board of Directors,
composed of one or more directors of the Company who need not be disinterested
directors, who may administer the Plan with respect to Employees who are not
officers or directors of the Company, may grant Shares and Options under the
Plan to such Employees and may determine the timing, number of Shares and other
terms of such grants.
(b) Disinterested Directors. A member of the Board of Directors shall be
deemed "disinterested" only if he or she satisfies:
(i) Such requirements as the Securities and Exchange Commission may
establish for disinterested administrators of plans designed to qualify for
exemption under Rule 16b-3 (or its successor) under the Exchange Act; and
(ii) Such requirements as the Internal Revenue Service may establish
for outside directors acting under plans intended to qualify for exemption under
section 162(m)(4)(C) of the Code.
An Outside Director shall not fail to be "disinterested" solely because he
or she receives the Nonstatutory Options described in Section 4(b).
(c) Committee Procedures. The Committee shall designate one of its members
as chairman. The Committee may hold meetings at such times and places as it
shall determine. The acts of a majority of the Committee members present at
meetings at which a quorum exists, or acts reduced to or approved in writing by
all Committee members, shall be valid acts of the Committee.
(d) Committee Responsibilities. Subject to the provisions of the Plan, the
Committee shall have full authority and discretion to take the following
actions:
(i) To interpret the Plan and to apply its provisions;
(ii) To adopt, amend or rescind rules, procedures and forms relating
to the Plan;
(iii) To authorize any person to execute, on behalf of the Company,
any instrument required to carry out the purposes of the Plan;
(iv) To determine when Shares are to be awarded or offered for sale
and when Options are to be granted under the Plan;
(v) To select the Offerees and Optionees;
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(vi) To determine the number of Shares to be offered to each Offeree
or to be made subject to each Option;
(vii) To prescribe the terms and conditions of each award or sale of
Shares, including (without limitation) the Purchase Price, and to specify the
provisions of the Stock Purchase Agreement relating to such award or sale;
(viii) To prescribe the terms and conditions of each Option, including
(without limitation) the Exercise Price, to determine whether such Option is to
be classified as an ISO or as a Nonstatutory Option, and to specify the
provisions of the Stock Option Agreement relating to such Option;
(ix) To amend any outstanding Stock Purchase Agreement or Stock Option
Agreement, subject to applicable legal restrictions and to the consent of the
Offeree or Optionee who entered into such agreement;
(x) To prescribe the consideration for the grant of each Option or
other right under the Plan and to determine the sufficiency of such
consideration; and
(xi) To take any other actions deemed necessary or advisable for the
administration of the Plan.
All decisions, interpretations and other actions of the Committee shall be
final and binding on all Offerees, all Optionees, and all persons deriving their
rights from an Offeree or Optionee. No member of the Committee shall be liable
for any action that he or she has taken or has failed to take in good faith with
respect to the Plan, any Option, or any right to acquire Shares under the Plan.
SECTION 4. ELIGIBILITY.
(a) General Rules. Only Employees (including, without limitation,
independent contractors who are not members of the Board of Directors) shall be
eligible for designation as Optionees or Offerees by the Committee. In addition,
only Employees who are common-law employees of the Company or a Subsidiary shall
be eligible for the grant of ISOs. Employees who are Outside Directors shall
only be eligible for the grant of the Nonstatutory Options described in
Subsection (b) below.
(b) Outside Directors. Any other provision of the Plan notwithstanding, the
participation of Outside Directors in the Plan shall be subject to the following
restrictions:
(i) An Outside Director who first becomes a member of the Board of
Directors after February 15, 1994, shall receive a one-time grant of a
Nonstatutory Option (subject to adjustment under Section 9). Such Nonstatutory
Option shall be granted on the date when such Outside Director first joins the
Board of Directors. The foregoing notwithstanding, no grant under this Paragraph
(ii) shall be made to a new Outside Director if he or she replaces a former
Outside Director and the new and former Outside Directors are both affiliated
with the same investment fund or similar entity.
(ii) Upon the conclusion of each regular annual meeting of the
Company's stockholders, each Outside Director who will continue serving as a
member of the Board of Directors thereafter shall receive a Nonstatutory Option
covering 1,000 Shares (subject to adjustment under Section 9), except that such
Nonstatutory Option shall not be granted in the calendar year in which the same
Outside Director received a Nonstatutory Option described in Paragraph (ii)
above.
(iii) All Nonstatutory Options granted to an Outside Director under
this Subsection (b) shall become exercisable in full on the first anniversary of
the date of grant. All such Nonstatutory Options shall also become exercisable
in full in the event of (A) a Change in Control or (B) the termination of the
Outside Director's service because of death, Total and Permanent Disability or
retirement at or after age 65.
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(iv) The Exercise Price under all Nonstatutory Options granted to an
Outside Director under this Subsection (b) shall be equal to 100 percent of the
Fair Market Value of a Share on the date of grant, payable in one of the forms
described in Subsection (a), (b), (c) or (d) of Section 8.
(v) All Nonstatutory Options granted to an Outside Director under this
Subsection (b) shall terminate on the earliest of (A) the 10th anniversary of
the date of grant, (B) the date three months after the termination of such
Outside Director's service for any reason other than death or Total and
Permanent Disability or (C) the date 12 months after the termination of such
Outside Director's service because of death or Total and Permanent Disability.
(vi) A Nonstatutory Option grant to an Outside Director under this
Subsection (b) shall be invalid if such Outside Director declines to execute a
Stock Option Agreement pursuant to Section 7(a).
The Committee may provide that the Nonstatutory Options that otherwise
would be granted to an Outside Director under this Subsection (b) shall instead
be granted to an affiliate of such Outside Director. Such affiliate shall then
be deemed to be an Outside Director for purposes of the Plan, provided that the
service-related vesting and termination provisions pertaining to the
Nonstatutory Options shall be applied with regard to the service of the Outside
Director.
(c) Ten-Percent Stockholders. An Employee who owns more than 10 percent of
the total combined voting power of all classes of outstanding stock of the
Company or any of its Subsidiaries shall not be eligible for the grant of an ISO
unless (i) the Exercise Price is at least 110 percent of the Fair Market Value
of a Share on the date of grant and (ii) such ISO by its terms is not
exercisable after the expiration of five years from the date of grant.
(d) Attribution Rules. For purposes of Subsection (c) above, in determining
stock ownership, an Employee shall be deemed to own the stock owned, directly or
indirectly, by or for such Employee's brothers, sisters, spouse, ancestors and
lineal descendants. Stock owned, directly or indirectly, by or for a
corporation, partnership, estate or trust shall be deemed to be owned
proportionately by or for its stockholders, partners or beneficiaries. Stock
with respect to which such Employee holds an option shall not be counted.
(e) Outstanding Stock. For purposes of Subsection (c) above, "outstanding
stock" shall include all stock actually issued and outstanding immediately after
the grant. "Outstanding stock" shall not include shares authorized for issuance
under outstanding options held by the Employee or by any other person.
SECTION 5. STOCK SUBJECT TO PLAN.
(a) Basic Limitation. Shares offered under the Plan shall be authorized but
unissued Shares or treasury Shares. The aggregate number of Shares which is
issued under the Plan to all Employees (upon exercise of Options or other rights
to acquire Shares) shall not exceed 2,500,000 Shares, subject to adjustment
pursuant to Section 9. The number of Shares which are subject to Options or
other rights outstanding at any time under the Plan shall not exceed the number
of Shares which then remain available for issuance under the Plan. The Company,
during the term of the Plan, shall at all times reserve and keep available
sufficient Shares to satisfy the requirements of the Plan.
(b) Additional Shares. In the event that any outstanding Option or other
right for any reason expires or is canceled or otherwise terminated, the Shares
allocable to the unexercised portion of such Option or other right shall again
be available for the purposes of the Plan. In the event that Shares issued under
the Plan are reacquired by the Company pursuant to a forfeiture provision, a
right of repurchase or a right of first refusal, such Shares shall again be
available for the purposes of the Plan.
SECTION 6. TERMS AND CONDITIONS OF AWARDS OR SALES.
(a) Stock Purchase Agreement. Each award or sale of Shares under the Plan
(other than upon exercise of an Option) shall be evidenced by a Stock Purchase
Agreement between the Offeree and the Company. Such award or sale shall be
subject to all applicable terms and conditions of the Plan and may be subject to
any other terms and conditions which are not inconsistent with the Plan and
which the Committee deems appropriate for
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inclusion in a Stock Purchase Agreement. The provisions of the various Stock
Purchase Agreements entered into under the Plan need not be identical.
(b) Duration of Offers and Nontransferability of Rights. Any right to
acquire Shares under the Plan (other than an Option) shall automatically expire
if not exercised by the Offeree within 30 days after the grant of such right was
communicated to the Offeree by the Committee. Such right shall not be
transferable and shall be exercisable only by the Offeree to whom such right was
granted.
(c) Purchase Price. The Purchase Price of Shares to be offered under the
Plan shall not be less than the par value of such Shares. Subject to the
preceding sentence, the Purchase Price shall be determined by the Committee at
its sole discretion. The Purchase Price shall be payable in a form described in
Section 8.
(d) Withholding Taxes. As a condition to the award, sale or vesting of
Shares, the Offeree shall make such arrangements as the Committee may require
for the satisfaction of any federal, state, local or foreign withholding tax
obligations that arise in connection with such Shares. The Committee may permit
the Offeree to satisfy all or part of his or her tax obligations related to such
Shares by having the Company withhold a portion of any Shares that otherwise
would be issued to him or her or by surrendering any Shares that previously were
acquired by him or her. The Shares withheld or surrendered shall be valued at
their Fair Market Value on the date when taxes otherwise would be withheld in
cash. The payment of taxes by assigning Shares to the Company, if permitted by
the Committee, shall be subject to such restrictions as the Committee may
impose, including any restrictions required by rules of the Securities and
Exchange Commission.
(e) Restrictions on Transfer of Shares. Any Shares awarded or sold under
the Plan shall be subject to such special forfeiture conditions, rights of
repurchase, rights of first refusal and other transfer restrictions as the
Committee may determine. Such restrictions shall be set forth in the applicable
Stock Purchase Agreement and shall apply in addition to any general restrictions
that may apply to all holders of Shares.
SECTION 7. TERMS AND CONDITIONS OF OPTIONS.
(a) Stock Option Agreement. Each grant of an Option under the Plan shall be
evidenced by a Stock Option Agreement executed by the Optionee and the Company.
Such Option shall be subject to all applicable terms and conditions of the Plan
and may be subject to any other terms and conditions which are not inconsistent
with the Plan and which the Committee deems appropriate for inclusion in a Stock
Option Agreement. The provisions of the various Stock Option Agreements entered
into under the Plan need not be identical.
(b) Number of Shares. Each Stock Option Agreement shall specify the number
of Shares that are subject to the Option and shall provide for the adjustment of
such number in accordance with Section 9. The Stock Option Agreement shall also
specify whether the Option is an ISO or a Nonstatutory Option. Options granted
to any Optionee in a single fiscal year shall in no event cover more than
250,000 Shares, subject to adjustment in accordance with Section 9.
(c) Exercise Price. Each Stock Option Agreement shall specify the Exercise
Price. The Exercise Price of an ISO shall not be less than 100 percent of the
Fair Market Value of a Share on the date of grant, except as otherwise provided
in Section 4(c). The Exercise Price of a Nonstatutory Option shall not be less
than the par value of a Share. Subject to the preceding two sentences, the
Exercise Price under any Option shall be determined by the Committee at its sole
discretion. The Exercise Price shall be payable in a form described in Section
8.
(d) Withholding Taxes. As a condition to the exercise of an Option, the
Optionee shall make such arrangements as the Committee may require for the
satisfaction of any federal, state, local or foreign withholding tax obligations
that arise in connection with such exercise. The Optionee shall also make such
arrangements as the Committee may require for the satisfaction of any federal,
state, local or foreign withholding tax obligations that may arise in connection
with the disposition of Shares acquired by exercising an Option. The Committee
may permit the Optionee to satisfy all or part of his or her tax obligations
related to the Option by having the Company withhold a portion of any Shares
that otherwise would be issued to him or her or by surrendering any Shares that
previously were acquired by him or her. Such Shares shall be valued at their
Fair Market Value on the date when taxes otherwise would be withheld in cash.
The payment of taxes by assigning Shares to the Company, if permitted
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by the Committee, shall be subject to such restrictions as the Committee may
impose, including any restrictions required by rules of the Securities and
Exchange Commission.
(e) Exercisability. Each Stock Option Agreement shall specify the date when
all or any installment of the Option is to become exercisable. The vesting of
any Option shall be determined by the Committee at its sole discretion. A Stock
Option Agreement may provide for accelerated exercisability in the event of a
Change in Control, in the event of the Optionee's death, Total and Permanent
Disability or retirement or upon other events.
(f) Term. Each Stock Option Agreement shall specify the term of the Option.
The term of an ISO shall not exceed 10 years from the date of grant, except as
otherwise provided in Section 4(c). Subject to the preceding sentence, the
Committee at its sole discretion shall determine when an Option is to expire. A
Stock Option Agreement may provide that the Option will expire before the end of
its normal term in the event that the Optionee's Service terminates.
(g) Nontransferability. During an Optionee's lifetime, such Optionee's
Option(s) shall be exercisable only by him or her and shall not be transferable.
In the event of an Optionee's death, such Optionee's Option(s) shall not be
transferable other than by will, by written beneficiary designation or by the
laws of descent and distribution.
(h) No Rights as a Stockholder. An Optionee, or a transferee of an
Optionee, shall have no rights as a stockholder with respect to any Shares
covered by his or her Option until the date of the issuance of a stock
certificate for such Shares. No adjustments shall be made, except as provided in
Section 9.
(i) Modification, Extension and Renewal of Options. Within the limitations
of the Plan, the Committee may modify, extend or renew outstanding Options or
may accept the cancellation of outstanding Options (to the extent not previously
exercised) in return for the grant of new Options at the same or a different
price. The foregoing notwithstanding, no modification of an Option shall,
without the consent of the Optionee, impair such Optionee's rights or increase
his or her obligations under such Option.
(j) Restrictions on Transfer of Shares. Any Shares issued upon exercise of
an Option may be subject to such special forfeiture conditions, rights of
repurchase, rights of first refusal and other transfer restrictions as the
Committee may determine. Such restrictions shall be set forth in the applicable
Stock Option Agreement and shall apply in addition to any general restrictions
that may apply to all holders of Shares.
SECTION 8. PAYMENT FOR SHARES.
(a) General Rule. The entire Purchase Price or Exercise Price of Shares
issued under the Plan shall be payable in lawful money of the United States of
America at the time when such Shares are purchased, except as follows:
(i) In the case of Shares sold under the terms of a Stock Purchase
Agreement subject to the Plan, payment shall be made only pursuant to the
express provisions of such Stock Purchase Agreement. However, the Committee (at
its sole discretion) may specify in the Stock Purchase Agreement that payment
may be made in one or both of the forms described in Subsections (e) and (f)
below.
(ii) In the case of an ISO granted under the Plan, payment shall be
made only pursuant to the express provisions of the applicable Stock Option
Agreement. However, the Committee (at its sole discretion) may specify in the
Stock Option Agreement that payment may be made pursuant to Subsections (b),
(c), (d) or (f) below.
(iii) In the case of a Nonstatutory Option granted under the Plan, the
Committee (at its sole discretion) may accept payment pursuant to Subsections
(b), (c), (d) or (f) below.
(b) Surrender of Stock. To the extent that this Subsection (b) is
applicable, payment may be made all or in part with Shares which have already
been owned by the Optionee or his or her representative for more than 12 months
and which are surrendered to the Company in good form for transfer. Such Shares
shall be valued at their Fair Market Value on the date when the new Shares are
purchased under the Plan.
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(c) Exercise/Sale. To the extent that this Subsection (c) is applicable,
payment may be made by the delivery (on a form prescribed by the Company) of an
irrevocable direction to a securities broker approved by the Company to sell
Shares and to deliver all or part of the sales proceeds to the Company in
payment of all or part of the Exercise Price and any withholding taxes.
(d) Exercise/Pledge. To the extent that this Subsection (d) is applicable,
payment may be made by the delivery (on a form prescribed by the Company) of an
irrevocable direction to pledge Shares to a securities broker or lender approved
by the Company, as security for a loan, and to deliver all or part of the loan
proceeds to the Company in payment of all or part of the Exercise Price and any
withholding taxes.
(e) Services Rendered. To the extent that this Subsection (e) is
applicable, Shares may be awarded under the Plan in consideration of services
rendered to the Company or a Subsidiary prior to the award. If Shares are
awarded without the payment of a Purchase Price in cash, the Committee shall
make a determination (at the time of the award) of the value of the services
rendered by the Offeree and the sufficiency of the consideration to meet the
requirements of Section 6(c).
(f) Promissory Note. To the extent that this Subsection (f) is applicable,
a portion of the Purchase Price or Exercise Price, as the case may be, of Shares
issued under the Plan may be payable by a full-recourse promissory note,
provided that (i) the par value of such Shares must be paid in lawful money of
the United States of America at the time when such Shares are purchased, (ii)
the Shares are security for payment of the principal amount of the promissory
note and interest thereon and (iii) the interest rate payable under the terms of
the promissory note shall be no less than the minimum rate (if any) required to
avoid the imputation of additional interest under the Code. Subject to the
foregoing, the Committee (at its sole discretion) shall specify the term,
interest rate, amortization requirements (if any) and other provisions of such
note.
SECTION 9. ADJUSTMENT OF SHARES.
(a) General. In the event of a subdivision of the outstanding Stock, a
declaration of a dividend payable in Shares, a declaration of a dividend payable
in a form other than Shares in an amount that has a material effect on the value
of Shares, a combination or consolidation of the outstanding Stock (by
reclassification or otherwise) into a lesser number of Shares, a
recapitalization, a spin-off or a similar occurrence, the Committee shall make
appropriate adjustments in one or more of (i) the number of Shares available
under Section 5 for future grants to all Employees, (ii) the number of
Nonstatutory Options to be granted to Outside Directors under Section 4(b),
(iii) the number of Shares covered by each outstanding Option or (iv) the
Exercise Price under each outstanding Option.
(b) Reorganizations. In the event that the Company is a party to a merger
or other reorganization, outstanding Options shall be subject to the agreement
of merger or reorganization. Such agreement may provide, without limitation, for
the assumption of outstanding Options by the surviving corporation or its
parent, for their continuation by the Company (if the Company is a surviving
corporation), for payment of a cash settlement equal to the difference between
the amount to be paid for one Share under such agreement and the Exercise Price,
or for the acceleration of their exercisability followed by the cancellation of
Options not exercised, in all cases without the Optionees' consent. Any
cancellation shall not occur until after such acceleration is effective and
Optionees have been notified of such acceleration. In the case of Options that
have been outstanding for less than 12 months, a cancellation need not be
preceded by an acceleration.
(c) Reservation of Rights. Except as provided in this Section 9, an
Optionee or Offeree shall have no rights by reason of any subdivision or
consolidation of shares of stock of any class, the payment of any dividend or
any other increase or decrease in the number of shares of stock of any class.
Any issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number or
Exercise Price of Shares subject to an Option. The grant of an Option pursuant
to the Plan shall not affect in any way the right or power of the Company to
make adjustments, reclassifications, reorganizations or changes of its capital
or business structure, to merge or consolidate or to dissolve, liquidate, sell
or transfer all or any part of its business or assets.
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SECTION 10. SECURITIES LAWS.
Shares shall not be issued under the Plan unless the issuance and delivery
of such Shares complies with (or is exempt from) all applicable requirements of
law, including (without limitation) the Securities Act of 1933, as amended, the
rules and regulations promulgated thereunder, state securities laws and
regulations, and the regulations of any stock exchange on which the Company's
securities may then be listed.
SECTION 11. NO RETENTION RIGHTS.
Neither the Plan nor any Option shall be deemed to give any individual a
right to remain an employee, consultant or director of the Company or a
Subsidiary. The Company and its Subsidiaries reserve the right to terminate the
service of any employee, consultant or director at any time, with or without
cause, subject to applicable laws, the Company's certificate of incorporation
and by-laws and a written employment agreement (if any).
SECTION 12. DURATION AND AMENDMENTS.
(a) Term of the Plan. The Plan, as set forth herein, shall become effective
as of November 16, 1994, subject to the approval of the Company's stockholders.
The Plan, if not extended, shall terminate automatically on September 30, 2004.
It may be terminated on any earlier date pursuant to Subsection (b) below.
(b) Right to Amend or Terminate the Plan. The Board of Directors may amend,
suspend or terminate the Plan at any time and for any reason, except that the
provisions of Section 4(b) relating to the amount, price and timing of grants to
Outside Directors shall not be amended more than once in any six-month period.
An amendment of the Plan shall be subject to the approval of the Company's
stockholders only to the extent required by applicable laws or regulations.
(c) Effect of Amendment or Termination. No Shares shall be issued or sold
under the Plan after the termination thereof, except upon exercise of an Option
granted prior to such termination. The termination of the Plan, or any amendment
thereof, shall not affect any Share previously issued or any Option previously
granted under the Plan.
SECTION 13. EXECUTION.
To record the amendment and restatement of the Plan by the Board of
Directors, the Company has caused its authorized officer to execute the same.
NEUROBIOLOGICAL TECHNOLOGIES, INC.
By /s/ Paul E. Freiman
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President and Chief Executive Officer
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