Attached files
Exhibit
10.122
VISTAGEN
THERAPEUTICS, INC.
AMENDED
AND RESTATED
2016
STOCK INCENTIVE PLAN
(formerly,
the 2008 Stock Incentive Plan)
1. Purposes
of the Plan. The purposes of this Plan are to
attract and retain the best available personnel, to provide
additional incentives to Employees, Directors and Consultants and
to promote the success of the Company’s
business.
2. Definitions. The
following definitions shall apply as used herein and in the
individual Award Agreements, except as defined otherwise in an
individual Award Agreement. In the event a term is
separately defined in an individual Award Agreement, such
definition shall supersede the definition contained in this Section
2.
(b) “Affiliate”
and “Associate” shall have the
respective meanings ascribed to such terms in Rule 12b-2
promulgated under the Exchange Act.
(c) “Applicable
Laws” means the legal requirements relating to the
Plan and the Awards under applicable provisions of federal and
state securities laws, the corporate laws of California and, to the
extent other than California, the corporate law of the state of the
Company’s incorporation, the Code, the NASDAQ Stock Market
Rules or the rules of any applicable stock exchange or national
market system, and the rules of any non-U.S. jurisdiction
applicable to Awards granted to residents therein.
(d) “Assumed”
means that pursuant to a Corporate Transaction either (i) the
Award is expressly affirmed by the Company or (ii) the contractual
obligations represented by the Award are expressly assumed (and not
simply by operation of law) by the successor entity or its Parent
in connection with the Corporate Transaction with appropriate
adjustments to the number and type of securities of the successor
entity or its Parent subject to the Award and the exercise or
purchase price thereof which at least preserves the compensation
element of the Award existing at the time of the Corporate
Transaction as determined in accordance with the instruments
evidencing the agreement to assume the Award.
(e) “Award”
means the grant of an Option, SAR, Dividend Equivalent Right,
Restricted Stock, Restricted Stock Unit or other right or benefit
under the Plan.
(f) “Award
Agreement” means the written agreement evidencing the
grant of an Award executed by the Company and the Grantee,
including any amendments thereto.
(g) “Board”
means the Board of Directors of the Company.
(h) “Cause”
means, with respect to the termination by the Company or a Related
Entity of the Grantee’s Continuous Service, that such
termination is for “Cause” as such term (or word of
like import) is expressly defined in a then-effective written
agreement between the Grantee and the Company or such Related
Entity, or in the absence of such then-effective written agreement
and definition, is based on, in the determination of the Committee,
the Grantee’s: (i) performance of any act or
failure to perform any act in bad faith and to the detriment of the
Company or a Related Entity; (ii) dishonesty, intentional
misconduct or material breach of any agreement with the Company or
a Related Entity; or (iii) commission of a crime involving
dishonesty, breach of trust, or physical or emotional harm to any
person; provided, however, that with regard to any agreement that
defines “Cause” on the occurrence of or in connection
with a Corporate Transaction or a Change in Control, such
definition of “Cause” shall not apply until a Corporate
Transaction or a Change in Control actually occurs.
(i) “Change
in Control” means a change in ownership or control of
the Company effected through either of the following
transactions:
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(i) the direct
or indirect acquisition by any person or related group of persons
(other than an acquisition from or by the Company or by a
Company-sponsored employee benefit plan or by a person that
directly or indirectly controls, is controlled by, or is under
common control with, the Company) of beneficial ownership (within
the meaning of Rule 13d-3 of the Exchange Act) of securities
possessing more than fifty percent (50%) of the total combined
voting power of the Company’s outstanding securities pursuant
to a tender or exchange offer made directly to the Company’s
shareholders which a majority of the Continuing Directors who are
not Affiliates or Associates of the offeror do not recommend such
shareholders accept, or
(ii) a change
in the composition of the Board over a period of twelve (12) months
or less such that a majority of the Board members (rounded up to
the next whole number) ceases, by reason of one or more contested
elections for Board membership, to be comprised of individuals who
are Continuing Directors.
(j) “Code”
means the Internal Revenue Code of 1986, as amended.
(k) “Committee”
means the Compensation Committee of the Board of Directors,
appointed by the Board to administer the Plan.
(l) “Common
Stock” means the common stock, par value $0.001 per
share, of the Company.
(m) “Company”
means VistaGen Therapeutics, Inc., a Nevada corporation, or any
successor entity that adopts the Plan in connection with a
Corporate Transaction.
(n) “Consultant”
means any person (other than an Employee or a Director, solely with
respect to rendering services in such person’s capacity as a
Director) who is engaged by the Company or any Related Entity to
render consulting or advisory services to the Company or such
Related Entity.
(o) “Continuing
Directors” means members of the Board who either
(i) have been Board members continuously for a period of at
least twelve (12) months or (ii) have been Board members for
less than twelve (12) months and were elected or nominated for
election as Board members by at least a majority of the Board
members described in clause (i) who were still in office at
the time such election or nomination was approved by the
Board.
(p) “Continuous
Service” means that the provision of services to the
Company or a Related Entity in any capacity of Employee, Director
or Consultant is not interrupted or terminated. In
jurisdictions requiring notice in advance of an effective
termination as an Employee, Director or Consultant, Continuous
Service shall be deemed terminated upon the actual cessation of
providing services to the Company or a Related Entity
notwithstanding any required notice period that must be fulfilled
before a termination as an Employee, Director or Consultant can be
effective under Applicable Laws. A Grantee’s
Continuous Service shall be deemed to have terminated either upon
an actual termination of Continuous Service or upon the entity for
which the Grantee provides services ceasing to be a Related
Entity. Continuous Service shall not be considered
interrupted in the case of (i) any approved leave of absence,
(ii) transfers among the Company, any Related Entity, or any
successor, in any capacity of Employee, Director or Consultant, or
(iii) any change in status as long as the individual remains
in the service of the Company or a Related Entity in any capacity
of Employee, Director or Consultant (except as otherwise provided
in the Award Agreement). An approved leave of absence
shall include sick leave, military leave, or any other authorized
personal leave. For purposes of each Incentive Stock
Option granted under the Plan, if such leave exceeds three (3)
months, and reemployment upon expiration of such leave is not
guaranteed by statute or contract, then the Incentive Stock Option
shall be treated as a Non-Qualified Stock Option on the day three
(3) months and one (1) day following the expiration of such three
(3) month period.
(q) “Corporate
Transaction” means any of the following transactions,
provided, however, that the Committee shall determine under parts
(iv) and (v) whether multiple transactions are related, and its
determination shall be final, binding and conclusive:
(i) a merger
or consolidation in which the Company is not the surviving entity,
except for a transaction the principal purpose of which is to
change the state in which the Company is
incorporated;
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(ii) the sale,
transfer or other disposition of all or substantially all of the
assets of the Company;
(iii) the
complete liquidation or dissolution of the Company;
(iv) any
reverse merger or series of related transactions culminating in a
reverse merger (including, but not limited to, a tender offer
followed by a reverse merger) in which the Company is the surviving
entity but (A) the shares of Common Stock outstanding
immediately prior to such merger are converted or exchanged by
virtue of the merger into other property, whether in the form of
securities, cash or otherwise, or (B) in which securities
possessing more than forty percent (50%) of the total combined
voting power of the Company’s outstanding securities are
transferred to a person or persons different from those who held
such securities immediately prior to such merger or the initial
transaction culminating in such merger; or
(v) acquisition
in a single or series of related transactions by any person or
related group of persons (other than the Company or by a
Company-sponsored employee benefit plan) of beneficial ownership
(within the meaning of Rule 13d-3 of the Exchange Act) of
securities possessing more than fifty percent (50%) of the total
combined voting power of the Company’s outstanding securities
but excluding any such transaction or series of related
transactions that the Committee determines shall not be a Corporate
Transaction.
(r) “Covered
Employee” means an Employee who is a “covered
employee” under Section 162(m)(3) of the
Code.
(s) “Director”
means a member of the Board or the board of directors of any
Related Entity.
(t) “Disability”
means as defined under the long-term disability policy of the
Company or the Related Entity to which the Grantee provides
services regardless of whether the Grantee is covered by such
policy. If the Company or the Related Entity to which
the Grantee provides service does not have a long-term disability
plan in place, “Disability” means that a Grantee is
unable to carry out the responsibilities and functions of the
position held by the Grantee by reason of any medically
determinable physical or mental impairment for a period of not less
than ninety (90) consecutive days. A Grantee will not be
considered to have incurred a Disability unless he or she furnishes
proof of such impairment sufficient to satisfy the Committee in its
discretion.
(u) “Dividend
Equivalent Right” means a right entitling the Grantee
to compensation measured by dividends paid with respect to Common
Stock.
(v) “Employee”
means any person, including an Officer or Director, who is in the
employ of the Company or any Related Entity, subject to the control
and direction of the Company or any Related Entity as to both the
work to be performed and the manner and method of
performance. The payment of a director’s fee by
the Company or a Related Entity shall not be sufficient to
constitute “employment” by the Company.
(w) “Exchange
Act” means the Securities Exchange Act of 1934, as
amended.
(x) “Fair
Market Value” means, as of any date, the value of
Common Stock determined as follows:
(i) If the
Common Stock is listed on one or more established stock exchanges
or national market systems, including without limitation The NASDAQ
Global Select Market, The NASDAQ Global Market or The NASDAQ
Capital Market of The NASDAQ Stock Market LLC, its Fair Market
Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on the principal
exchange or system on which the Common Stock is listed (as
determined by the Committee) on the date of determination (or, if
no closing sales price or closing bid was reported on that date, as
applicable, on the last trading date such closing sales price or
closing bid was reported), as reported in The Wall Street Journal
or such other source as the Committee deems
reliable;
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(ii) If the
Common Stock is regularly quoted on an automated quotation system
(including the OTC Bulletin Board) or by a recognized securities
dealer, its Fair Market Value shall be the closing sales price for
such stock as quoted on such system or by such securities dealer on
the date of determination, but if selling prices are not reported,
the Fair Market Value of a share of Common Stock shall be the mean
between the high bid and low asked prices for the Common Stock on
the date of determination (or, if no such prices were reported on
that date, on the last date such prices were reported), as reported
in The Wall Street Journal or such other source as the Committee
deems reliable; or
(iii) In the
absence of an established market for the Common Stock of the type
described in (i) and (ii), above, the Fair Market Value thereof
shall be determined by the Committee in good faith and in a manner
consistent with Applicable Laws.
(y) “Grantee”
means an Employee, Director or Consultant who receives an Award
under the Plan.
(z) “Immediate
Family” means any child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, former spouse, sibling,
niece, nephew, mother-in-law, father-in-law, son-in law,
daughter-in-law, brother-in-law, or sister-in-law, including
adoptive relationships, any person sharing the Grantee’s
household (other than a tenant or employee), a trust in which these
persons (or the Grantee) have more than fifty percent (50%) of the
beneficial interest, a foundation in which these persons (or the
Grantee) control the management of assets, and any other entity in
which these persons (or the Grantee) own more than fifty percent
(50%) of the voting interests.
(aa) “Incentive
Stock Option” means an Option intended to qualify as
an incentive stock option within the meaning of Section 422 of
the Code.
(bb) “Independent
Director” means a member of the Board that satisfies
the requirements to be considered an Independent Director in
accordance with NASDAQ Stock Market Rule 5605(a)(2).
(cc) “Non-Qualified
Stock Option” means an Option not intended to qualify
as an Incentive Stock Option.
(dd) “Officer”
means a person who is an officer of the Company or a Related Entity
within the meaning of Section 16 of the Exchange Act and the
rules and regulations promulgated thereunder.
(ee) “Option”
means an option to purchase Shares pursuant to an Award Agreement
granted under the Plan.
(ff) “Parent”
means a “parent corporation”, whether now or hereafter
existing, as defined in Section 424(e) of the
Code.
(gg) “Performance-Based
Compensation” means compensation qualifying as
“performance-based compensation” under
Section 162(m) of the Code.
(hh) “Plan”
means this Amended and Restated 2016 Stock Incentive
Plan.
(ii) “Post-Termination
Exercise Period” means the period specified in the
Award Agreement of not less than thirty (30) days commencing on the
date of termination (other than termination by the Company or any
Related Entity for Cause) of the Grantee’s Continuous
Service, or such longer period as may be applicable upon death or
Disability.
(jj) “Related
Entity” means any Parent or Subsidiary of the
Company.
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(kk) “Replaced”
means that pursuant to a Corporate Transaction the Award is
replaced with a comparable stock award or a cash incentive program
of the Company, the successor entity (if applicable) or Parent of
either of them which preserves the compensation element of such
Award existing at the time of the Corporate Transaction and
provides for subsequent payout in accordance with the same (or a
more favorable) vesting schedule applicable to such
Award. The determination of Award comparability shall be
made by the Committee and its determination shall be final, binding
and conclusive.
(ll) “Restricted
Stock” means Shares issued under the Plan to the
Grantee for such consideration, if any, and subject to such
restrictions on transfer, rights of first refusal, repurchase
provisions, forfeiture provisions, and other terms and conditions
as established by the Committee.
(mm) “Restricted
Stock Units” means an Award which may be earned in
whole or in part upon the passage of time or the attainment of
performance criteria established by the Committee and which may be
settled for cash, Shares or other securities or a combination of
cash, Shares or other securities as established by the
Committee.
(nn) “Rule 16b-3”
means Rule 16b-3 promulgated under the Exchange Act or any
successor thereto.
(oo) “SAR”
means a stock appreciation right entitling the Grantee to Shares or
cash compensation, as established by the Committee, measured by
appreciation in the value of Common Stock.
(pp) “Share”
means a share of the Common Stock.
(qq) “Subsidiary”
means a “subsidiary corporation”, whether now or
hereafter existing, as defined in Section 424(f) of the
Code.
3. Stock
Subject to the Plan.
(a) Subject to
the provisions of Section 10 below, the maximum aggregate
number of Shares which may be issued pursuant to all Awards
(including Incentive Stock Options) is three million (3,000,000)
Shares. Notwithstanding the foregoing, subject to the
provisions of Section 10, below, the maximum aggregate number of
Shares available for grant of Incentive Stock Options shall be
three million (3,000,000) Shares. The Shares to be
issued pursuant to Awards may be authorized, but unissued, or
reacquired Common Stock.
(b) Any Shares
covered by an Award (or portion of an Award) which is forfeited,
canceled or expires (whether voluntarily or involuntarily) shall be
deemed not to have been issued for purposes of determining the
maximum aggregate number of Shares which may be issued under the
Plan. Shares that actually have been issued under the
Plan pursuant to an Award shall not be returned to the Plan and
shall not become available for future issuance under the Plan,
except that if unvested Shares are forfeited or repurchased by the
Company, such Shares shall become available for future grant under
the Plan. To the extent not prohibited by the listing
requirements of The NASDAQ Stock Market LLC (or other established
stock exchange or national market system on which the Common Stock
is traded) and Applicable Law, any Shares covered by an Award which
are surrendered (i) in payment of the Award exercise or
purchase price or (ii) in satisfaction of tax withholding
obligations incident to the exercise of an Award shall be deemed
not to have been issued for purposes of determining the maximum
number of Shares which may be issued pursuant to all Awards under
the Plan, unless otherwise determined by the
Committee.
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4. Administration
of the Plan.
(a) Plan
Administration.
(i) Administration
by the Committee. The Plan shall be administered
by the Committee. The Committee shall consist of two or
more Independent Directors of the Company, who shall be appointed
by the Board. In addition, the composition of the
Committee shall satisfy (i) such requirements as the Securities and
Exchange Commission may establish for administrators acting under
plans intended 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.
(ii) Officer
Authorization to Grant Awards. The Committee may
authorize one or more Officers to grant Awards subject to such
limitations as the Committee determines from time to
time.
(b) Powers
of the Committee. Subject to Applicable Laws and
the provisions of the Plan (including any other powers given to the
Committee hereunder), and except as otherwise provided by the
Board, the Committee shall have the authority, in its
discretion:
(i) to select
the Employees, Directors and Consultants to whom Awards may be
granted from time to time hereunder;
(ii) to
determine whether and to what extent Awards are granted
hereunder;
(iii) to
determine the number of Shares or the amount of other consideration
to be covered by each Award granted hereunder;
(iv) to
approve forms of Award Agreements for use under the
Plan;
(v) to
determine the terms and conditions of any Award granted
hereunder;
(vi) to
establish additional terms, conditions, rules or procedures to
accommodate the rules or laws of applicable non-U.S. jurisdictions
and to afford Grantees favorable treatment under such rules or
laws; provided, however, that no Award shall be granted under any
such additional terms, conditions, rules or procedures with terms
or conditions which are inconsistent with the provisions of the
Plan;
(vii) to amend
the terms of any outstanding Award granted under the Plan, provided
that any amendment that would adversely affect the Grantee’s
rights under an outstanding Award shall not be made without the
Grantee’s written consent, provided, however, that an
amendment or modification that may cause an Incentive Stock Option
to become a Non-Qualified Stock Option shall not be treated as
adversely affecting the rights of the Grantee. Notwithstanding the
foregoing, (A) the reduction or increase of the exercise price
of any Option awarded under the Plan and the base appreciation
amount of any SAR awarded under the Plan and (B) canceling an
Option or SAR at a time when its exercise price or base
appreciation amount (as applicable) exceeds the Fair Market Value
of the underlying Shares, in exchange for another Option, SAR,
Restricted Stock, or other Award, in each case, shall not be
subject to shareholder approval;
(viii) to
construe and interpret the terms of the Plan and Awards, including
without limitation, any notice of award or Award Agreement, granted
pursuant to the Plan;
and
(ix) to take
such other action, not inconsistent with the terms of the Plan, as
the Committee deems appropriate.
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The express grant
in the Plan of any specific power to the Committee shall not be
construed as limiting any power or authority of the Committee;
provided that the Committee may not exercise any right or power
reserved to the Board. Any decision made, or action
taken, by the Committee or in connection with the administration of
this Plan shall be final, conclusive and binding on all persons
having an interest in the Plan.
(d) Indemnification.
In addition to such other rights of indemnification as they may
have as members of the Board or as Officers or Employees of the
Company or a Related Entity, members of the Board and any Officers
or Employees of the Company or a Related Entity to whom authority
to act for the Board, the Committee or the Company is delegated
shall be defended and indemnified by the Company to the extent
permitted by law on an after-tax basis against all reasonable
expenses, including attorneys’ fees, actually and necessarily
incurred in connection with the defense of any claim,
investigation, action, suit or proceeding, or in connection with
any appeal therein, to which they or any of them may be a party by
reason of any action taken or failure to act under or in connection
with the Plan, or any Award granted hereunder, and against all
amounts paid by them in settlement thereof (provided such
settlement is approved by the Company) or paid by them in
satisfaction of a judgment in any such claim, investigation,
action, suit or proceeding, except in relation to matters as to
which it shall be adjudged in such claim, investigation, action,
suit or proceeding that such person is liable for gross negligence,
bad faith or intentional misconduct; provided, however, that within
thirty (30) days after the institution of such claim,
investigation, action, suit or proceeding, such person shall offer
to the Company, in writing, the opportunity at the Company’s
expense to defend the same.
5. Eligibility. Awards
other than Incentive Stock Options may be granted to Employees,
Directors and Consultants. Incentive Stock Options may
be granted only to Employees of the Company or a Parent or a
Subsidiary of the Company. An Employee, Director or
Consultant who has been granted an Award may, if otherwise
eligible, be granted additional Awards. Awards may be
granted to such Employees, Directors or Consultants who are
residing in non-U.S. jurisdictions as the Committee may determine
from time to time.
6. Terms
and Conditions of Awards.
(a) Types
of Awards. The Committee is authorized under the Plan to
award any type of arrangement to an Employee, Director or
Consultant that is not inconsistent with the provisions of the Plan
and that by its terms involves or might involve the issuance of
(i) Shares, (ii) cash or (iii) an Option, a SAR, or
similar right with a fixed or variable price related to the Fair
Market Value of the Shares and with an exercise or conversion
privilege related to the passage of time, the occurrence of one or
more events, or the satisfaction of performance criteria or other
conditions. Such awards include, without limitation,
Options, SARs, sales or bonuses of Restricted Stock, Restricted
Stock Units or Dividend Equivalent Rights, and an Award may consist
of one such security or benefit, or two (2) or more of them in
any combination or alternative.
(b) Designation
of Award. Each Award shall be designated in the
Award Agreement. In the case of an Option, the Option
shall be designated as either an Incentive Stock Option or a
Non-Qualified Stock Option. However, notwithstanding
such designation, an Option will qualify as an Incentive Stock
Option under the Code only to the extent the $100,000 dollar
limitation of Section 422(d) of the Code is not
exceeded. The $100,000 limitation of Section 422(d)
of the Code is calculated based on the aggregate Fair Market Value
of the Shares subject to Options designated as Incentive Stock
Options which become exercisable for the first time by a Grantee
during any calendar year (under all plans of the Company or any
Parent or Subsidiary of the Company). For purposes of
this calculation, Incentive Stock Options shall be taken into
account in the order in which they were granted, and the Fair
Market Value of the Shares shall be determined as of the grant date
of the relevant Option. In the event that the Code or
the regulations promulgated thereunder are amended after the date
the Plan becomes effective to provide for a different limit on the
Fair Market Value of Shares permitted to be subject to Incentive
Stock Options, then such different limit will be automatically
incorporated herein and will apply to any Options granted after the
effective date of such amendment.
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(c) Conditions
of Award. Subject to the terms of the Plan, the
Committee shall determine the provisions, terms, and conditions of
each Award including, but not limited to, the Award vesting
schedule, repurchase provisions, rights of first refusal,
forfeiture provisions, form of payment (cash, Shares, or other
consideration) upon settlement of the Award, payment contingencies,
and satisfaction of any performance criteria. The
performance criteria established by the Committee may be based on
any one of, or combination of, the following: (i)
increase in share price, (ii) earnings per share, (iii) total
shareholder return, (iv) operating margin, (v) gross margin, (vi)
return on equity, (vii) return on assets, (vii) return on
investment, (ix) operating income, (x) net operating income, (xi)
pre-tax profit, (xii) cash flow, (xiii) revenue, (xiv) expenses,
(xv) earnings before interest, taxes and depreciation, (xvi)
economic value added and (xvii) market share. The
performance criteria may be applicable to the Company, Related
Entities and/or any individual business units of the Company or any
Related Entity. Partial achievement of the specified
criteria may result in a payment or vesting corresponding to the
degree of achievement as specified in the Award
Agreement. In addition, the performance criteria shall
be calculated in accordance with generally accepted accounting
principles, but excluding the effect (whether positive or negative)
of any change in accounting standards and any extraordinary,
unusual or nonrecurring item, as determined by the Committee,
occurring after the establishment of the performance criteria
applicable to the Award intended to be performance-based
compensation. Each such adjustment, if any, shall be
made solely for the purpose of providing a consistent basis from
period to period for the calculation of performance criteria in
order to prevent the dilution or enlargement of the Grantee’s
rights with respect to an Award intended to be performance-based
compensation.
(d) Acquisitions
and Other Transactions. The Committee may issue
Awards under the Plan in settlement, assumption or substitution
for, outstanding awards or obligations to grant future awards in
connection with the Company or a Related Entity acquiring another
entity, an interest in another entity or an additional interest in
a Related Entity whether by merger, stock purchase, asset purchase
or other form of transaction.
(e) Deferral
of Award Payment. The Committee may establish one
or more programs under the Plan to permit selected Grantees the
opportunity to elect to defer receipt of consideration upon
exercise of an Award, satisfaction of performance criteria, or
other event that absent the election would entitle the Grantee to
payment or receipt of Shares or other consideration under an
Award. The Committee may establish the election
procedures, the timing of such elections, the mechanisms for
payments of, and accrual of interest or other earnings, if any, on
amounts, Shares or other consideration so deferred, and such other
terms, conditions, rules and procedures that the Committee deems
advisable for the administration of any such deferral
program.
(f) Separate
Programs. The Committee may establish one or more
separate programs under the Plan for the purpose of issuing
particular forms of Awards to one or more classes of Grantees on
such terms and conditions as determined by the Committee from time
to time.
(g) Individual
Limitations on Awards.
(i) Individual
Limit for Options and SARs. Following the date
that the exemption from application of Section 162(m) of the
Code described in Section 18 (or any exemption having
similar effect) ceases to apply to Awards, the maximum number of
Shares with respect to which Options and SARs may be granted to any
Grantee in any calendar year shall be three hundred thousand
(300,000) Shares. In connection with a Grantee’s
commencement of Continuous Service, a Grantee may be granted
Options and SARs for up to an additional fifty thousand (50,000)
Shares which shall not count against the limit set forth in the
previous sentence. The foregoing limitation[s] shall be
adjusted proportionately in connection with any change in the
Company’s capitalization pursuant to Section 10,
below. To the extent required by Section 162(m) of
the Code or the regulations thereunder, in applying the foregoing
limitation[s] with respect to a Grantee, if any Option or SAR is
canceled, the canceled Option or SAR shall continue to count
against the maximum number of Shares with respect to which Options
and SARs may be granted to the Grantee. For this
purpose, the repricing of an Option (or in the case of a SAR, the
base amount on which the stock appreciation is calculated is
reduced to reflect a reduction in the Fair Market Value of the
Common Stock) shall be treated as the cancellation of the existing
Option or SAR and the grant of a new Option or
SAR.
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(ii) Individual
Limit for Restricted Stock and Restricted Stock
Units. For awards of Restricted Stock and
Restricted Stock Units that are intended to be Performance-Based
Compensation, the maximum number of Shares with respect to which
such Awards may be granted to any Grantee in any calendar year
shall be three hundred thousand (300,000) Shares. The
foregoing limitation shall be adjusted proportionately in
connection with any change in the Company’s capitalization
pursuant to Section 10, below.
(h) Early
Exercise. The Award Agreement may, but need not,
include a provision whereby the Grantee may elect at any time while
an Employee, Director or Consultant to exercise any part or all of
the Award prior to full vesting of the Award. Any
unvested Shares received pursuant to such exercise may be subject
to a repurchase right in favor of the Company or a Related Entity
or to any other restriction the Committee determines to be
appropriate.
(i) Term
of Award. The term of each Award shall be the
term stated in the Award Agreement, provided, however, that the
term shall be no more than ten (10) years from the date of
grant thereof. However, in the case of an Incentive
Stock Option granted to a Grantee who, at the time the Option is
granted, owns stock representing more than ten percent (10%)
of the voting power of all classes of stock of the Company or any
Parent or Subsidiary of the Company, the term of the Incentive
Stock Option shall be five (5) years from the date of grant
thereof or such shorter term as may be provided in the Award
Agreement. Notwithstanding the foregoing, the specified
term of any Award shall not include any period for which the
Grantee has elected to defer the receipt of the Shares or cash
issuable pursuant to the Award.
(j) Transferability
of Awards. Incentive Stock Options may not be
sold, pledged, assigned, hypothecated, transferred, or disposed of
in any manner other than by will or by the laws of descent or
distribution and may be exercised, during the lifetime of the
Grantee, only by the Grantee. Other Awards shall be
transferable (i) by will and by the laws of descent and
distribution and (ii) during the lifetime of the Grantee, to
the extent and in the manner authorized by the Committee by gift or
pursuant to a domestic relations order to members of the
Grantee’s Immediate Family. Notwithstanding the
foregoing, the Grantee may designate one or more beneficiaries of
the Grantee’s Award in the event of the Grantee’s death
on a beneficiary designation form provided by the
Committee.
(k) Time
of Granting Awards. The date of grant of an Award
shall for all purposes be the date on which the Committee makes the
determination to grant such Award, or such other later date as is
determined by the Committee.
7. Award
Exercise or Purchase Price, Consideration and
Taxes.
(a) Exercise
or Purchase Price. The exercise or purchase
price, if any, for an Award shall be as follows:
(i) In
the case of an Incentive Stock Option:
(A) granted to
an Employee who, at the time of the grant of such Incentive Stock
Option owns stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent
or Subsidiary of the Company, the per Share exercise price shall be
not less than one hundred ten percent (110%) of the Fair Market
Value per Share on the date of grant; or
(B) granted to
any Employee other than an Employee described in the preceding
paragraph, the per Share exercise price shall be not less than one
hundred percent (100%) of the Fair Market Value per Share on the
date of grant.
(ii) In the
case of a Non-Qualified Stock Option, the per Share exercise price
shall be not less than one hundred percent (100%) of the Fair
Market Value per Share on the date of grant.
(iii) In the
case of SARs, the base appreciation amount shall not be less than
one hundred percent (100%) of the Fair Market Value per Share on
the date of grant.
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(iv) In the
case of Awards intended to qualify as Performance-Based
Compensation, the exercise or purchase price, if any, shall be not
less than one hundred percent (100%) of the Fair Market Value per
Share on the date of grant.
(v) In the
case of the sale of Shares, the per Share purchase price, if any,
shall be such price as is determined by the Committee.
(vi) In the
case of other Awards, such price as is determined by the
Committee.
(vii) Notwithstanding
the foregoing provisions of this Section 7(a), in the case of
an Award issued pursuant to Section 6(d) above, the exercise
or purchase price for the Award shall be determined in accordance
with the provisions of the relevant instrument evidencing the
agreement to issue such Award.
(b) Consideration. Subject
to Applicable Laws, the consideration to be paid for the Shares to
be issued upon exercise or purchase of an Award including the
method of payment, shall be determined by the
Committee. In addition to any other types of
consideration the Committee may determine, the Committee is
authorized to accept as consideration for Shares issued under the
Plan the following:
(i) cash;
(ii) check;
(iii) surrender
of Shares held for the requisite period, if any, necessary to avoid
a charge to the Company’s earnings for financial reporting
purposes, or delivery of a properly executed form of attestation of
ownership of Shares as the Committee may require which have a Fair
Market Value on the date of surrender or attestation equal to the
aggregate exercise price of the Shares as to which said Award shall
be exercised;
(iv) with
respect to Options, payment through a broker-dealer sale and
remittance procedure pursuant to which the Grantee (A) shall
provide written instructions to a Company designated brokerage firm
to effect the immediate sale of some or all of the purchased Shares
and remit to the Company sufficient funds to cover the aggregate
exercise price payable for the purchased Shares and (B) shall
provide written directives to the Company to deliver the
certificates for the purchased Shares directly to such brokerage
firm in order to complete the sale transaction;
(v) with
respect to Options, payment through a “net exercise”
such that, without the payment of any funds, the Grantee may
exercise the Option and receive the net number of Shares equal to
(i) the number of Shares as to which the Option is being
exercised, multiplied by (ii) a fraction, the numerator of
which is the Fair Market Value per Share (on such date as is
determined by the Committee) less the Exercise Price per Share, and
the denominator of which is such Fair Market Value per Share (the
number of net Shares to be received shall be rounded down to the
nearest whole number of Shares); or
(vi) any
combination of the foregoing methods of payment.
The Committee may
at any time or from time to time, by adoption of or by amendment to
the standard forms of Award Agreement described in
Section 4(b)(iv), or by other means, grant Awards which do not
permit all of the foregoing forms of consideration to be used in
payment for the Shares or which otherwise restrict one or more
forms of consideration.
(c) Taxes. No
Shares shall be delivered under the Plan to any Grantee or other
person until such Grantee or other person has made arrangements
acceptable to the Committee for the satisfaction of any non-U.S.,
federal, state, or local income and employment tax withholding
obligations, including, without limitation, obligations incident to
the receipt of Shares. Upon exercise or vesting of an
Award the Company shall withhold or collect from the Grantee an
amount sufficient to satisfy such tax obligations, including, but
not limited to, by surrender of the whole number of Shares covered
by the Award sufficient to satisfy the minimum applicable tax
withholding obligations incident to the exercise or vesting of an
Award (reduced to the lowest whole number of Shares if such number
of Shares withheld would result in withholding a fractional Share
with any remaining tax withholding settled in cash).
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8. Exercise
of Award.
(a) Procedure
for Exercise; Rights as a Shareholder.
(i) Any Award
granted hereunder shall be exercisable at such times and under such
conditions as determined by the Committee under the terms of the
Plan and specified in the Award Agreement.
(ii) An Award
shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms
of the Award by the person entitled to exercise the Award and full
payment for the Shares with respect to which the Award is exercised
has been made, including, to the extent selected, use of the
broker-dealer sale and remittance procedure to pay the purchase
price as provided in Section 7(b)(iv).
(b) Exercise
of Award Following Termination of Continuous
Service. In the event of termination of a
Grantee’s Continuous Service for any reason other than
Disability or death (but not in the event of a Grantee’s
change of status from Employee to Consultant or from Consultant to
Employee), such Grantee may, but only during the Post-Termination
Exercise Period (but in no event later than the expiration date of
the term of such Award as set forth in the Award Agreement),
exercise the portion of the Grantee’s Award that was vested
at the date of such termination or such other portion of the
Grantee’s Award as may be determined by the
Committee. The Grantee’s Award Agreement may
provide that upon the termination of the Grantee’s Continuous
Service for Cause, the Grantee’s right to exercise the Award
shall terminate concurrently with the termination of
Grantee’s Continuous Service. In the event of a
Grantee’s change of status from Employee to Consultant, an
Employee’s Incentive Stock Option shall convert automatically
to a Non-Qualified Stock Option on the day three (3) months and one
day following such change of status. To the extent that
the Grantee’s Award was unvested at the date of termination,
or if the Grantee does not exercise the vested portion of the
Grantee’s Award within the Post-Termination Exercise Period,
the Award shall terminate.
(c) Disability
of Grantee. In the event of termination of a
Grantee’s Continuous Service as a result of his or her
Disability, such Grantee may, but only within twelve (12) months
from the date of such termination (or such longer period as
specified in the Award Agreement but in no event later than the
expiration date of the term of such Award as set forth in the Award
Agreement), exercise the portion of the Grantee’s Award that
was vested at the date of such termination; provided, however, that
if such Disability is not a “disability” as such term
is defined in Section 22(e)(3) of the Code, in the case of an
Incentive Stock Option such Incentive Stock Option shall
automatically convert to a Non-Qualified Stock Option on the day
three (3) months and one day following such
termination. To the extent that the Grantee’s
Award was unvested at the date of termination, or if Grantee does
not exercise the vested portion of the Grantee’s Award within
the time specified herein, the Award shall terminate.
(d) Death
of Grantee. In the event of a termination of the
Grantee’s Continuous Service as a result of his or her death,
or in the event of the death of the Grantee during the
Post-Termination Exercise Period or during the twelve (12) month
period following the Grantee’s termination of Continuous
Service as a result of his or her Disability, the Grantee’s
estate or a person who acquired the right to exercise the Award by
bequest or inheritance may exercise the portion of the
Grantee’s Award that was vested as of the date of
termination, within twelve (12) months from the date of death (or
such longer period as specified in the Award Agreement but in no
event later than the expiration of the term of such Award as set
forth in the Award Agreement). To the extent that, at
the time of death, the Grantee’s Award was unvested, or if
the Grantee’s estate or a person who acquired the right to
exercise the Award by bequest or inheritance does not exercise the
vested portion of the Grantee’s Award within the time
specified herein, the Award shall terminate.
(e) Extension
if Exercise Prevented by Law. Notwithstanding the
foregoing, if the exercise of an Award within the applicable time
periods set forth in this Section 8 is prevented by the
provisions of Section 9 below, the Award shall remain
exercisable until one (1) month after the date the Grantee is
notified by the Company that the Award is exercisable, but in any
event no later than the expiration of the term of such Award as set
forth in the Award Agreement.
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9. Conditions
Upon Issuance of Shares.
(a) If at any
time the Committee determines that the delivery of Shares pursuant
to the exercise, vesting or any other provision of an Award is or
may be unlawful under Applicable Laws, the vesting or right to
exercise an Award or to otherwise receive Shares pursuant to the
terms of an Award shall be suspended until the Committee determines
that such delivery is lawful and shall be further subject to the
approval of counsel for the Company with respect to such
compliance. The Company shall have no obligation to
effect any registration or qualification of the Shares under
federal or state laws.
(b) As a
condition to the exercise of an Award, the Company may require the
person exercising such Award to represent and warrant at the time
of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute
such Shares if, in the opinion of counsel for the Company, such a
representation is required by any Applicable Laws.
10. Adjustments
Upon Changes in Capitalization. Subject to any
required action by the shareholders of the Company and
Section 11 hereof, the number of Shares covered by each
outstanding Award, and the number of Shares which have been
authorized for issuance under the Plan but as to which no Awards
have yet been granted or which have been returned to the Plan, the
exercise or purchase price of each such outstanding Award, the
maximum number of Shares with respect to which Awards may be
granted to any Grantee in any calendar year, as well as any other
terms that the Committee determines require adjustment shall be
proportionately adjusted for (i) any increase or decrease in
the number of issued Shares resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the
Shares, or similar transaction affecting the Shares, (ii) any
other increase or decrease in the number of issued Shares effected
without receipt of consideration by the Company, or (iii) any
other transaction with respect to Common Stock including a
corporate merger, consolidation, acquisition of property or stock,
separation (including a spin-off or other distribution of stock or
property), reorganization, liquidation (whether partial or
complete) or any similar transaction; provided, however that
conversion of any convertible securities of the Company shall not
be deemed to have been “effected without receipt of
consideration.” In the event of any distribution
of cash or other assets to shareholders other than a normal cash
dividend, the Committee shall also make such adjustments as
provided in this Section 10 or substitute, exchange or
grant Awards to effect such adjustments (collectively
“adjustments”). Any such adjustments to
outstanding Awards will be effected in a manner that precludes the
enlargement of rights and benefits under such Awards. In
connection with the foregoing adjustments, the Committee may, in
its discretion, prohibit the exercise of Awards or other issuance
of Shares, cash or other consideration pursuant to Awards during
certain periods of time. Except as the Committee determines, no
issuance by the Company of shares of any class, or securities
convertible into shares of any class, shall affect, and no
adjustment by reason hereof shall be made with respect to, the
number or price of Shares subject to an Award.
11. Corporate
Transactions and Changes in Control.
(a) Termination
of Award to Extent Not Assumed in Corporate
Transaction. Effective upon the consummation of a
Corporate Transaction, all outstanding Awards under the Plan shall
terminate. However, all such Awards shall not terminate
to the extent they are Assumed in connection with the Corporate
Transaction.
(b) Acceleration
of Award Upon Corporate Transaction or Change in
Control. The Committee shall have the authority,
exercisable either in advance of any actual or anticipated
Corporate Transaction or Change in Control or at the time of an
actual Corporate Transaction or Change in Control and exercisable
at the time of the grant of an Award under the Plan or any time
while an Award remains outstanding, to provide for the full or
partial automatic vesting and exercisability of one or more
outstanding unvested Awards under the Plan and the release from
restrictions on transfer and repurchase or forfeiture rights of
such Awards in connection with a Corporate Transaction or Change in
Control, on such terms and conditions as the Committee may
specify. The Committee also shall have the authority to
condition any such Award vesting and exercisability or release from
such limitations upon the subsequent termination of the Continuous
Service of the Grantee within a specified period following the
effective date of the Corporate Transaction or Change in
Control. The Committee may provide that any Awards so
vested or released from such limitations in connection with a
Change in Control, shall remain fully exercisable until the
expiration or sooner termination of the Award.
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(c) Effect
of Acceleration on Incentive Stock Options. Any
Incentive Stock Option accelerated under this
Section 11 in connection with a Corporate Transaction or
Change in Control shall remain exercisable as an Incentive Stock
Option under the Code only to the extent the $100,000 dollar
limitation of Section 422(d) of the Code is not
exceeded.
12. Effective
Date and Term of Plan. The Plan shall become
effective upon the earlier to occur of its adoption by the Board or
its approval by the shareholders of the Company. It
shall continue in effect for a term of ten (10) years unless sooner
terminated. Subject to Section 17 below, and
Applicable Laws, Awards may be granted under the Plan upon its
becoming effective.
13. Amendment,
Suspension or Termination of the Plan.
(a) The Board
may at any time amend, suspend or terminate the Plan. To the extent
necessary to comply with Applicable Laws, the Company shall obtain
shareholder approval of any Plan amendment in such a manner and to
such a degree as required.
(b) No Award
may be granted during any suspension of the Plan or after
termination of the Plan.
(c) No
suspension or termination of the Plan (including termination of the
Plan under Section 12, above) shall adversely affect any
rights under Awards already granted to a Grantee.
14. Reservation
of Shares.
(a) The
Company, during the term of the Plan, will at all times reserve and
keep available such number of Shares as shall be sufficient to
satisfy the requirements of the Plan.
(b) The
inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the
Company’s counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as
to which such requisite authority shall not have been
obtained.
15. No
Effect on Terms of Employment/Consulting
Relationship. The Plan shall not confer upon any
Grantee any right with respect to the Grantee’s Continuous
Service, nor shall it interfere in any way with his or her right or
the right of the Company or any Related Entity to terminate the
Grantee’s Continuous Service at any time, with or without
cause, including but not limited to, Cause, and with or without
notice. The ability of the Company or any Related Entity
to terminate the employment of a Grantee who is employed at will is
in no way affected by its determination that the Grantee’s
Continuous Service has been terminated for Cause for the purposes
of this Plan.
16. No
Effect on Retirement and Other Benefit
Plans. Except as specifically provided in a
retirement or other benefit plan of the Company or a Related
Entity, Awards shall not be deemed compensation for purposes of
computing benefits or contributions under any retirement plan of
the Company or a Related Entity, and shall not affect any benefits
under any other benefit plan of any kind or any benefit plan
subsequently instituted under which the availability or amount of
benefits is related to level of compensation. The Plan
is not a “Pension Plan” or “Welfare Plan”
under the Employee Retirement Income Security Act of 1974, as
amended.
17. Shareholder
Approval. Continuance of the Plan shall be
subject to approval by the shareholders of the Company within
twelve (12) months before or after the date the Plan is
adopted. Such shareholder approval shall be obtained in
the degree and manner required under Applicable
Laws. Any Award exercised before shareholder approval is
obtained shall be rescinded if shareholder approval is not obtained
within the time prescribed, and Shares issued on the exercise of
any such Award shall not be counted in determining whether
shareholder approval is obtained.
18. Information
to Grantees. To the extent required by Applicable
Law, the Company shall provide to each grantee, during the period
for which such Grantee has one or more Awards outstanding, copies
of financial statements at least annually. The Company
shall not be required to provide such information to persons whose
duties in connection with the Company assure them access to
equivalent information.
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19. Effect
of Section 162(m) of the Code. The Plan, and
all Awards (except Awards of Restricted Stock that vest over time)
issued thereunder, are intended to be exempt from the application
of Section 162(m) of the Code, which restricts under certain
circumstances the Federal income tax deduction for compensation
paid by a public company to named executives in excess of
$1 million per year. The exemption is based on
Treasury Regulation Section 1.162-27(f), in the form existing
on the effective date of the Plan, with the understanding that such
regulation generally exempts from the application of
Section 162(m) of the Code compensation paid pursuant to a
plan that existed before a company becomes publicly
held. Under such Treasury Regulation, this exemption is
available to the Plan for the duration of the period that lasts
until the earliest of (i) the expiration of the Plan,
(ii) the material modification of the Plan, (iii) the
exhaustion of the maximum number of shares of Common Stock
available for Awards under the Plan, as set forth in
Section 3(a), (iv) the first meeting of shareholders at
which directors are to be elected that occurs after the close of
the third calendar year following the calendar year in which the
Company first becomes subject to the reporting obligations of
Section 12 of the Exchange Act, or (v) such other date
required by Section 162(m) of the Code and the rules and
regulations promulgated thereunder. To the extent that
the Committee determines as of the date of grant of an Award that
(i) the Award is intended to qualify as Performance-Based
Compensation and (ii) the exemption described above is no
longer available with respect to such Award, such Award shall not
be effective until any shareholder approval required under
Section 162(m) of the Code has been obtained.
20. Unfunded
Obligation. Grantees shall have the status of
general unsecured creditors of the Company. Any amounts
payable to Grantees pursuant to the Plan shall be unfunded and
unsecured obligations for all purposes, including, without
limitation, Title I of the Employee Retirement Income Security
Act of 1974, as amended. Neither the Company nor any
Related Entity shall be required to segregate any monies from its
general funds, or to create any trusts, or establish any special
accounts with respect to such obligations. The Company
shall retain at all times beneficial ownership of any investments,
including trust investments, which the Company may make to fulfill
its payment obligations hereunder. Any investments or
the creation or maintenance of any trust or any Grantee account
shall not create or constitute a trust or fiduciary relationship
between the Committee, the Company or any Related Entity and a
Grantee, or otherwise create any vested or beneficial interest in
any Grantee or the Grantee’s creditors in any assets of the
Company or a Related Entity. The Grantees shall have no claim
against the Company or any Related Entity for any changes in the
value of any assets that may be invested or reinvested by the
Company with respect to the Plan.
21. Construction. Captions
and titles contained herein are for convenience only and shall not
affect the meaning or interpretation of any provision of the
Plan. Except when otherwise indicated by the context,
the singular shall include the plural and the plural shall include
the singular. Use of the term “or” is not
intended to be exclusive, unless the context clearly requires
otherwise.
22. Nonexclusivity
of the Plan. Neither the adoption of the Plan by
the Board, the submission of the Plan to the shareholders of the
Company for approval, nor any provision of the Plan will be
construed as creating any limitations on the power of the Board to
adopt such additional compensation arrangements as it may deem
desirable, including, without limitation, the granting of Awards
otherwise than under the Plan, and such arrangements may be either
generally applicable or applicable only in specific
cases.
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Adopted by the
Board of Directors of VistaGen Therapeutics, Inc. on July 26,
2016
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Approved by the
stockholders of VistaGen Therapeutic, Inc. effective September 26,
2016
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