1998 Employee Stock Purchase Plan – ImClone Systems Inc.
IMCLONE SYSTEMS INCORPORATED
1998 EMPLOYEE STOCK PURCHASE PLAN
The following constitutes the provisions of the 1998 Employee Stock
Purchase Plan of ImClone Systems Incorporated.
1. PURPOSE.
The purpose of the Plan is to provide employees of the Company and its
Affiliates with an opportunity to purchase Common Stock of the Company. It
is the intention of the Company that the Options granted under the Plan be
considered options issued under an 'Employee Stock Purchase Plan' as that
term is defined under Section 423(b) of the Code. The provisions of the
Plan shall, accordingly, be construed so as to extend and limit
participation in a manner consistent with the requirements of that section
of the Code.
2. DEFINITIONS.
(a) 'AFFILIATE' as used in the Plan means any parent corporation or subsidiary
corporation of the Company, as those terms are defined in Sections 424(e)
and (f), respectively, of the Code.
(b) 'BOARD' shall mean the Board of Directors of the Company, or a committee
of the Board of Directors named by the Board to administer the Plan.
(c) 'CODE' shall mean the Internal Revenue Code of 1986, as amended.
(d) 'COMMON STOCK' shall mean the Common Stock, $0.001 par value, of the
Company.
(e) 'COMPANY' shall mean ImClone Systems Incorporated, a Delaware corporation.
(f) 'COMPENSATION' shall mean all compensation that is taxable income for
federal income tax purposes, including, payments for overtime, shift
premium, incentive compensation, incentive payments, bonuses, commissions
and other compensation.
(g) 'CONTINUOUS STATUS AS AN EMPLOYEE' shall mean the absence of any
interruption or termination of service as an employee of the Company or
any Affiliate. Continuous Status as an Employee shall not be considered
interrupted in the case of a leave of absence agreed to in writing by the
Company or any Affiliate, provided that such leave is for a period of not
more than 90 days or reemployment upon the expiration of such leave is
guaranteed by contract or statute.
(h) 'CONTRIBUTIONS' shall mean all amounts credited to the account of a
participant pursuant to the Plan.
(i) 'EXERCISE DATE' shall mean the last day of each Offering Period of the
Plan.
(j) 'OFFERING DATE' shall mean the first business day of an Offering Period
under the Plan.
(k) 'OFFERING PERIOD' shall mean any of the three month periods commencing on
each of July 1, October 1, January 1 and April 1 of each year (or such
other periods as may be determined by the Board which shall comply with
Section 423(b)(7) of the Code); provided that the initial offering period
shall commence at a time to be determined by the Board.
(l) 'OPTION' shall mean an option granted under Section 6 of this Plan.
(m) 'PLAN' shall mean this ImClone Systems Incorporated 1998 Employee Stock
Purchase Plan.
3. ELIGIBILITY.
(a) Options may be granted only to employees of the Company or any Affiliate.
An employee of the Company or any Affiliate shall not be eligible to
participate in an Offering Period, unless on the Offering Date of such
Offering Period, such employee has maintained Continuous Status as an
Employee for a period of six (6) months preceding such Offering Date. In
addition, no employee of the Company or any Affiliate shall be eligible to
be granted an Option under the Plan, unless, on the Offering Date, such
employee's customary employment with the Company or such Affiliate is at
least twenty (20) hours per week and at least five (5) months per calendar
year.
(b) No employee shall be eligible for the grant of an Option under the Plan
if, immediately after any such grant, such employee owns stock possessing
five percent (5%) or more of the total combined voting power or value of
all classes of stock of the Company or of any Affiliate. For purposes of
this subparagraph 3(b), the rules of Section 424(d) of the Code shall
apply in determining the stock ownership of any employee, and stock which
such employee may purchase under all outstanding rights and options shall
be treated as stock owned by such employee.
(c) An eligible employee may be granted an Option under the Plan only if such
Option, together with any other options granted under 'employee stock
purchase plans' of the Company and any Affiliates, as specified by Section
423(b)(8) of the Code, do not permit such employee's rights to purchase
stock of the Company or any Affiliate to accrue at a rate which exceeds
twenty-five thousand dollars ($25,000) of fair market value of such stock
(determined at the time such Options are granted) for each calendar year
in which such Options are outstanding at any time. Any Option granted
under the Plan shall be deemed to be modified to the extent necessary to
satisfy this paragraph 3(c).
(d) Officers of the Company shall be eligible to participate in the Plan;
provided, however, that the Board may provide in an Offering Period that
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certain employees who are highly compensated employees within the meaning
of Section 423(b)(4)(D) of the Code shall not be eligible to participate.
4. OFFERING PERIODS.
The Plan shall be implemented by a series of Offering Periods, with a new
Offering Period commencing on July 1, October 1, January l and April 1 of
each year (or such other periods as may be determined by the Board which
shall comply with Section 423(b)(7) of the Code); provided that the
initial Offering Period shall commence at a time to be determined by the
Board. The Plan shall continue until terminated in accordance with
paragraph 17 or paragraph 21 hereof. In addition, employees shall not be
entitled to enroll in the Plan or exercise any Options granted under the
Plan during any period in which the Company has restricted the purchase or
sale of its securities by its employees.
5. PARTICIPATION; CONTRIBUTIONS.
(a) An eligible employee may become a participant in the Plan by completing an
enrollment form ('Enrollment Form') provided by the Company and filing it
with the Company prior to the applicable Offering Date, unless a later
time for filing the Enrollment Form is set by the Board for all eligible
employees with respect to a given Offering Period. The Enrollment Form
shall set forth the percentage of the participant's Compensation (which
shall be a whole percentage not less than 1% and not more than 15%) to be
paid as Contributions pursuant to the Plan.
(b) Payroll deductions shall commence on the first payroll following the
Offering Date and shall end on the last payroll paid on or prior to the
Exercise Date of the Offering Period to which the Enrollment Form is
applicable, unless sooner terminated by the participant as provided in
paragraph 8. All payroll deductions made by a participant shall be
credited to such participant in an account under the Plan. A participant
may not make payments into such account.
(c) A participant may discontinue his or her participation in the Plan as
provided in paragraph 8.
(d) Notwithstanding the foregoing, to the extent necessary to comply with
Section 423(b)(8) of the Code and paragraph 3(c) herein, a participant's
payroll deductions may be decreased to 0% at such time during any Offering
Period which is scheduled to end during the current calendar year that the
aggregate of all payroll deductions accumulated with respect to such
Offering Period and any other Offering Period ending within the same
calendar year equals $21,250. Payroll deductions shall recommence at the
rate provided in such participant's Enrollment Form at the beginning of
the first Offering Period which is scheduled to end in the following
calendar year, unless terminated by the participant as provided in
paragraph 8.
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6. GRANT OF OPTION.
(a) On the Offering Date of each Offering Period, each eligible employee
participating in such Offering Period shall be granted an Option to
purchase on the Exercise Date of such Offering Period a number of shares
of Common Stock determined by dividing such employee's Contributions
accumulated prior to such Exercise Date and retained in the participant's
account as of the Exercise Date by 85% of the fair market value of a share
of the Common Stock on the Exercise Date; provided however, that such
purchase shall be subject to the limitations set forth in Sections 3(b), 3
(c), 3(d) and 10 hereof. The fair market value of a share of the Common
Stock shall be determined as provided in Section 6(b) below.
(b) The fair market value of the Common Stock on a given date shall be
determined by the Board in its discretion; provided that (i) if the Common
Stock is listed on a stock exchange, the fair market value per share shall
be the closing price on such exchange on such date as reported in the Wall
Street Journal (or, (A) if not so reported, as otherwise reported by the
exchange, and (B) if not reported on such date, then on the last prior
date on which a sale of the Common Stock was reported); or (ii) if not
listed on an exchange but traded on the National Association of Securities
Dealers Automated Quotation ('Nasdaq') National Market, the fair market
value per share shall be the last reported sale price on such date as
reported in the Wall Street Journal (or (A) if not so reported, as
otherwise reported by the Nasdaq National Market and (B) if not reported
on such date, then on the last prior date on which a sale of the Common
Stock was reported) or (iii) if traded on Nasdaq SmallCap and not the
National Market the fair market value per share shall be the mean of the
closing bid and asked price per share of the Common Stock on such date, as
reported in the Wall Street Journal (or, (A) if not so reported, as
otherwise reported by Nasdaq, and (B) if not so reported on such date,
then on the last prior date on which a sale of the Common Stock was
reported); or (iv) if the Common Stock is otherwise publicly traded, but
not listed on a stock exchange or traded on Nasdaq, the fair market value
per share shall be determined in good faith by the Board in its
discretion.
7. EXERCISE OF OPTION.
(a) Unless a participant withdraws from the Plan as provided in paragraph 8,
such participant's Option for the purchase of shares of Common Stock will
be exercised automatically on the Exercise Date of the Offering Period and
the maximum number of full shares of Common Stock subject to the Option
will be purchased for such participant at the applicable purchase price
with the accumulated Contributions in such participant's account. If a
fractional number of shares of Common Stock results, then such number
shall be rounded down to the next whole number and the excess
Contributions shall be carried forward to the next Exercise Date, unless
such participant withdraws the Contributions pursuant to paragraph 8(a) or
is no longer eligible to participate in the Plan, in which case such
amount shall be distributed to the participant without interest. The
shares purchased upon exercise of an Option hereunder shall be deemed to
be transferred to the participant on the Exercise Date. During a
participant's lifetime, a participant's Option to purchase shares
hereunder is exercisable only by such participant.
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(b) Shares shall not be issued with respect to an Option unless the exercise
of such Option and the issuance and delivery of such shares of Common
Stock pursuant thereto shall comply with all applicable provisions of law,
domestic or foreign, including, without limitation, the Securities Act of
1933, as amended, the Securities Exchange Act of 1934, as amended, the
rules and regulations promulgated thereunder, and the requirements of any
stock exchange upon which the shares of Common Stock may then be listed,
and shall be further subject to the approval of counsel for the Company
with respect to such compliance. As a condition to the exercise of an
Option, the Company may require the person exercising such Option to
represent and warrant at the time of any such exercise that the shares of
Common Stock are being purchased only for investment and without any
present intention to sell or distribute such shares of Common Stock if, in
the opinion of counsel for the Company, such a representation is required
by any of the aforementioned applicable provisions of law.
8. WITHDRAWAL; TERMINATION OF EMPLOYMENT.
(a) A participant may withdraw all but not less than all the Contributions
credited to his or her account under the Plan at any time prior to the
Exercise Date of the Offering Period by written notice to the Company. All
of the participant's Contributions credited to such participant's account
will be paid to such participant promptly after receipt of such
participant's notice of withdrawal and such participant's Option for the
current Offering Period will be automatically terminated, and no further
Contributions for the purchase of shares of Common Stock will be made
during the Offering Period.
(b) Upon termination of the participant's Continuous Status as an Employee,
prior to the Exercise Date of the Offering Period for any reason,
including retirement or death, the Contributions credited to such
participant's account will be returned to such participant or, in the case
of his or her death, to the person or persons entitled thereto under
paragraph 12, and his or her Option will be automatically terminated.
(c) In the event an employee fails to remain in Continuous Status as an
Employee of the Company for at least 20 hours per week during the Offering
Period in which the employee is a participant, such participant will be
deemed to have elected to withdraw from the Plan and the Contributions
credited to such participant's account will be returned to such
participant and the Option terminated.
(d) A participant's withdrawal from an Offering Period will not have any
effect upon his or her eligibility to participate in a succeeding Offering
Period or in any similar plan which may hereafter be adopted by the
Company.
9. INTEREST.
No interest shall accrue on the Contributions of a participant in the
Plan.
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10. STOCK.
The maximum number of shares of Common Stock which shall be made available
for sale under the Plan shall be 500,000 shares subject to adjustment upon
changes in capitalization of the Company as provided in paragraph 16.
Shares sold under the Plan may be newly issued shares or shares reacquired
in private transactions or open market purchases, but all shares sold
under the Plan regardless of source shall be counted against the 500,000
share limitation. If the total number of shares of Common Stock which
would otherwise be subject to Options granted pursuant to Section 6(a)
hereof on the Offering Date of an Offering Period exceeds the number of
shares of Common Stock then available under the Plan (after deduction of
all shares of Common Stock for which Options have been exercised or are
then outstanding), the Company shall make a pro rata allocation of the
shares of Common Stock remaining available for Option grant in as uniform
a manner as shall be reasonably practicable and as it shall determine to
be equitable. Any amounts remaining in an employee's account not applied
to the purchase of Common Stock pursuant to this Section 10 shall be
refunded on or promptly after the Exercise Date. In such event, the
Company shall give written notice of such reduction of the number of
shares of Common Stock subject to the Option to each employee affected
thereby and shall similarly reduce the rate of Contributions, if
necessary.
11. ADMINISTRATION.
The Board shall supervise and administer the Plan and shall have full
power to adopt, amend and rescind any rules deemed desirable and
appropriate for the administration of the Plan and not inconsistent with
the Plan, to construe and interpret the Plan, and to make all other
determinations necessary or advisable for the administration of the Plan.
12. DESIGNATION OF BENEFICIARY.
(a) A participant may file a written designation of a beneficiary who is to
receive any shares of Common Stock and cash, if any, from the
participant's account under the Plan in the event of such participant's
death subsequent to the end of the Offering Period but prior to delivery
of such participant's shares of Common Stock and cash. In addition, a
participant may file a written designation of a beneficiary who is to
receive any cash from the participant's account under the Plan in the
event of such participant's death prior to the Exercise Date of the
Offering Period. If a participant is married and the designated
beneficiary is not the spouse, spousal consent shall be required for such
designation to be effective.
(b) Such designation of beneficiary may be changed by the participant (and his
or her spouse, if any) at any time by written notice. In the event of the
death of a participant and in the absence of a beneficiary validly
designated under the Plan who is living at the time of such participant's
death, the Company shall deliver such shares of Common Stock and/or cash
to the executor or administrator of the estate of the participant, or if
no such executor or administrator has been appointed (to the knowledge of
the Company), the Company, in its discretion, may deliver such shares
and/or cash to the spouse or to any one or more dependents or relatives of
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the participant, or if no spouse, dependent or relative is known to the
Company, then to such other person as the Company may designate.
13. TRANSFERABILITY.
Neither Contributions credited to a participant's account nor any rights
with regard to the exercise of an Option or to receive shares under the
Plan may be assigned, transferred, pledged or otherwise disposed of in any
way other than by will, the laws of descent and distribution or as
provided in paragraph 12 hereof by the participant. Any such attempt at
assignment, transfer, pledge or other disposition shall be without effect,
except that the Company may treat such act as an election to withdraw
Contributions in accordance with paragraph 8.
14. USE OF FUNDS.
All Contributions received or held by the Company under the Plan may be
used by the Company for any corporate purpose, and the Company shall not
be obligated to segregate such Contributions.
15. REPORTS.
Individual accounts will be maintained for each participant in the Plan.
Statements of account will be given to participants, the per share
purchase price, the number of shares purchased and the remaining cash
balance, if any.
16. ADJUSTMENTS UPON CHANGES IN STOCK.
If any change is made in the shares of Common Stock subject to the Plan or
subject to any Option granted under the Plan (through merger,
consolidation, reorganization, distribution of substantially all of the
assets of the Company, spin-off of a subsidiary's voting securities to the
Company's shareholders, recapitalization, stock dividend, split-up,
combination of shares, exchange of shares, issuance of rights to
subscribe, or change in capital structure), appropriate adjustments shall
be made by the Board as to the maximum number of shares subject to the
Plan and the number of shares and price per share subject to outstanding
Options as shall be equitable to prevent dilution or enlargement of Option
rights. Any determination made by the Board hereunder shall be final,
binding and conclusive upon each participant.
17. AMENDMENT OR TERMINATION.
The Board may at any time terminate or amend the Plan. Except as provided
in paragraph 16, no such termination may affect Options previously
granted, nor may an amendment make any change in any Option therefore
granted which adversely affects the rights of any participant. In
addition, to the extent necessary to comply with Section 423 of the Code
(or any successor rule or provision or any applicable law or regulation),
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the Company shall obtain stockholder approval in such a manner and to such
a degree as so required.
18. NOTICES.
All notices or other communications by a participant to the Company under
or in connection with the Plan shall be deemed to have been duly given
when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.
19. RIGHT TO TERMINATE EMPLOYMENT.
Nothing in the Plan or in any agreement entered into pursuant to the Plan
shall confer upon any participant the right to continue in the employment
of the Company or any Affiliate, or affect any right which the Company or
any Affiliate may have to terminate the employment of such participant.
20. RIGHTS AS A STOCKHOLDER.
Neither the granting of an Option nor a deduction from payroll shall
constitute a participant the owner of shares covered by an Option. No
participant shall have any right as a stockholder unless and until an
Option has been exercised, and the shares of Common Stock underlying the
Option have been registered in the Company's share register.
21. TERM OF PLAN.
The Plan shall become effective upon its adoption by each of the Board and
the stockholders and shall continue in effect for a term of ten (10) years
unless sooner terminated earlier under paragraph 17.
22. APPLICABLE LAW.
This Plan shall be governed in accordance with the laws of Delaware.
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