GENTIUM S.p.A. AMENDED AND RESTATED 2004 EQUITY INCENTIVE PLAN
AMENDED
AND RESTATED
TABLE
OF CONTENTS
Page
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PURPOSE
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1
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SECTION
2.
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DEFINITIONS
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1
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(a)
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“ADS”
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1
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(b)
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“Affiliate”
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1
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(c)
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“Award”
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1
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(d)
|
“Award
Agreement”
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2
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(e)
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“Board”
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2
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(f)
|
“Change
In Control”
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2
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(g)
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“Code”
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3
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(h)
|
“Committee”
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3
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(i)
|
“Company”
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3
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(j)
|
“Consultant”
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3
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(k)
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“Corporate
Transaction”
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3
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(l)
|
“Covered
Employee”
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3
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||
(m)
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“Director”
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3
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(n)
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“Disability”
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3
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(o)
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“Employee”
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3
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||
(p)
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“Exchange
Act”
|
4
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(q)
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“Exercise
Price”
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4
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||
(r)
|
“Fair
Market Value”
|
4
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||
(s)
|
“Grant”
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4
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(t)
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“Incentive
Stock Option” or “ISO”
|
4
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(u)
|
“Key
Employee”
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4
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||
(v)
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“Non-Employee
Director”
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4
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(w)
|
“Non-Employee
Independent Director”
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5
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(x)
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“Nonstatutory
Stock Option” or “NSO”
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5
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(y)
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“Option”
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5
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(z)
|
“Optionee”
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5
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(aa)
|
“Parent”
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5
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(bb)
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“Participant”
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5
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(cc)
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“Plan”
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5
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(dd)
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“Restricted
Stock”
|
5
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||
(ee)
|
“Restricted
Stock Agreement”
|
5
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(ff)
|
“SAR
Agreement”
|
5
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||
(gg)
|
“Securities
Act”
|
5
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(hh)
|
“Service”
|
5
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||
(ii)
|
“Share”
|
5
|
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(jj)
|
“Stock
Appreciation Right” or “SAR”
|
5
|
||
(kk)
|
“Stock
Bonus”
|
5
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||
(ll)
|
“Stock
Bonus Agreement”
|
5
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||
(mm)
|
“Stock
Option Agreement”
|
5
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||
(nn)
|
“Stock
Purchase Right”
|
6
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(oo)
|
“Stock
Unit”
|
6
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(pp)
|
“Stock
Unit Agreement”
|
6
|
-i-
Page
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(qq)
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“Subsidiary”
|
6
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(rr)
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“10-Percent
Shareholder”
|
6
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SECTION
3.
|
ADMINISTRATION
|
6
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(a)
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Administration
by Board.
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6
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(b)
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Powers
of Board.
|
6
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(c)
|
Delegation
to Committee.
|
7
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(d)
|
Effect
of Board’s Decision.
|
7
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(e)
|
Indemnification.
|
7
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SECTION
4.
|
ELIGIBILITY
|
8
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(a)
|
General
Rules
|
8
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(b)
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Incentive
Stock Options
|
8
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(c)
|
Non-Employee
Director Options
|
8
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SECTION
5.
|
SHARES
SUBJECT TO PLAN
|
9
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(a)
|
Basic
Limitation
|
9
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(b)
|
Additional
Shares
|
9
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(c)
|
Limits
on Options and SARs
|
9
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(d)
|
Limits
on Stock Purchase Rights, Stock Units and Stock Bonuses
|
9
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SECTION
6.
|
TERMS
AND CONDITIONS OF OPTIONS
|
10
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(a)
|
Stock
Option Agreement
|
10
|
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(b)
|
Number
of Shares
|
10
|
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(c)
|
Exercise
Price
|
10
|
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(d)
|
Exercisability
and Term
|
10
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(e)
|
Modifications
or Assumption of Options
|
10
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(f)
|
Transferability
of Options
|
11
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(g)
|
Restrictions
on Transfer
|
11
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(h)
|
Incentive
Stock Option $100,000 Limitation.
|
11
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SECTION
7.
|
PAYMENT
FOR OPTION SHARES
|
11
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(a)
|
General
Rule
|
11
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(b)
|
Surrender
of Stock
|
11
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(c)
|
Cashless
Exercise
|
12
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|
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SECTION
8.
|
TERMS
AND CONDITIONS FOR AWARDS OF STOCK PURCHASE RIGHTS AND STOCK
UNITS.
|
12
|
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(a)
|
Time,
Amount and Form of Awards
|
12
|
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(b)
|
Restricted
Stock and Stock Unit Agreements
|
12
|
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(c)
|
Payment
for Restricted Stock or Stock Unit Awards
|
12
|
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(d)
|
Form
and Time of Settlement of Stock Units
|
12
|
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(e)
|
Vesting
Conditions
|
12
|
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(f)
|
Assignment
or Transfer of Restricted Stock or Stock Units
|
13
|
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(g)
|
Death
of Stock Units Recipient
|
13
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(h)
|
Trusts
|
13
|
-ii-
Page | ||||
(i)
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Voting
and Dividend Rights
|
13
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(j)
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Stock
Units Voting and Dividend Rights
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13
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(k)
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Creditors’
Rights
|
14
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|
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SECTION
9.
|
TERMS
AND CONDITIONS OF STOCK APPRECIATION RIGHTS
|
14
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(a)
|
SAR
Agreement
|
14
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(b)
|
Number
of Shares
|
14
|
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(c)
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Exercise
Price
|
14
|
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(d)
|
Exercisability
and Term
|
14
|
||
(e)
|
Exercise
of SARs
|
14
|
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(f)
|
Modification
or Assumption of SAR
|
15
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|
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SECTION
10.
|
TERMS
AND CONDITIONS OF STOCK BONUSES
|
15
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(a)
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Stock
Bonus Agreement.
|
15
|
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(b)
|
Number
of Shares.
|
15
|
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(c)
|
Consideration
|
15
|
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(d)
|
Vesting.
|
15
|
||
(e)
|
Transferability.
|
15
|
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(f)
|
Death
of Stock Bonus Recipient
|
16
|
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(g)
|
Trusts
|
16
|
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(h)
|
Stock
Bonus Voting and Dividend Rights
|
16
|
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SECTION
11.
|
PROTECTION
AGAINST DILUTION
|
16
|
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(a)
|
Adjustments
|
16
|
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(b)
|
Participant
Rights
|
17
|
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SECTION
12.
|
EFFECT
OF A CORPORATE TRANSACTION
|
17
|
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(a)
|
Merger
or Reorganization
|
17
|
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(b)
|
Acceleration
|
17
|
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SECTION
13.
|
LIMITATIONS
ON RIGHTS
|
17
|
||
(a)
|
Retention
Rights
|
17
|
||
(b)
|
Shareholders’
Rights
|
17
|
||
(c)
|
Regulatory
Requirements
|
17
|
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SECTION
14.
|
WITHHOLDING
TAXES
|
18
|
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(a)
|
General
|
18
|
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(b)
|
Share
Withholding
|
18
|
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SECTION
15.
|
DURATION
AND AMENDMENTS
|
18
|
||
(a)
|
Term
of the Plan
|
18
|
||
(b)
|
Right
to Amend, Suspend or Terminate the Plan
|
18
|
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(c)
|
Right
to Amend Award.
|
18
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-iii-
Page | ||||
SECTION
16.
|
EXECUTION
|
19
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APPENDIX
A GENTIUM S.P.A. 2004 ITALY STOCK AWARD SUB-PLAN
|
1
|
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SECTION
1.
|
BACKGROUND
AND PURPOSE
|
1
|
||
SECTION
2.
|
DEFINITION
AND CONSTRUCTION
|
1
|
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SECTION
3.
|
INCORPORATION
OF PLAN
|
2
|
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SECTION
4.
|
ITALIAN
STOCK OPTION TERMS
|
2
|
||
(a)
|
Italian
Stock Option Agreement
|
2
|
||
(b)
|
Number
of Shares
|
3
|
||
(c)
|
Exercise
Price
|
3
|
||
(d)
|
Exercisability
and Term
|
3
|
||
(e)
|
Withholding
Obligations.
|
3
|
||
(f)
|
Transferability
|
3
|
||
SECTION
5.
|
ITALIAN
STOCK GRANT TERMS
|
3
|
||
(a)
|
Italian
Stock Grant Agreement.
|
3
|
||
(b)
|
Number
of Shares.
|
3
|
||
(c)
|
Consideration.
|
3
|
||
(d)
|
Vesting
|
4
|
||
(e)
|
Withholding
Obligations
|
4
|
||
(f)
|
Transferability
|
4
|
||
SECTION
6.
|
EFFECT
OF A CORPORATE TRANSACTION
|
4
|
||
(a)
|
Merger
or Reorganization
|
4
|
||
(b)
|
Acceleration
|
4
|
||
SECTION
7.
|
LIMITATIONS
ON RIGHTS
|
4
|
||
(a)
|
Retention
Rights
|
4
|
||
(b)
|
Shareholders’
Rights
|
4
|
||
(c)
|
Regulatory
Requirements
|
5
|
||
SECTION
8.
|
DURATION
AND AMENDMENTS
|
5
|
||
(a)
|
Term
of the Italy Sub-Plan
|
5
|
||
(b)
|
Right
to Amend, Suspend or Terminate the Italy Sub-Plan
|
5
|
||
(c)
|
Right
to Amend Italian Award
|
5
|
||
SECTION
9.
|
EXECUTION
|
5
|
-iv-
AMENDED
AND RESTATED
SECTION
1. PURPOSE.
The
Board
adopted the Gentium S.p.A. 2004 Equity Incentive Plan on March 11, 2005 (the
“Adoption Date”). The Plan shall become effective as of the date on which Shares
are first made available to the general public pursuant to an initial public
offering of the Shares (the “IPO Date”). This Gentium S.p.A. Amended and
Restated 2004 Equity Incentive Plan (the “Plan”)
was
adopted by the Board and became effective on July 31, 2006.
In
addition, the Board adopted the Gentium S.p.A. Italy Stock Award Sub-Plan on
the
Adoption Date, subject to approval by the Company’s shareholders, which Gentium
S.p.A. Italy Stock Award Sub-Plan became effective as of the IPO Date. The
Gentium S.p.A. Amended and Restated Italy Stock Award Sub-Plan (the “Italy
Sub-Plan) was adopted by the Board and became effective on July 31, 2006. The
Italy Sub-Plan, attached to the Plan as Appendix A, contains the additional
provisions that are to be read in conjunction with the Plan and are applicable
to Italian Key Employees who are liable for income tax in the Republic of
Italy.
The
purpose of the Plan is to promote the long-term success of the Company and
the
creation of shareholder value by offering Key Employees an opportunity to
acquire a proprietary interest in the success of the Company, or to increase
such interest, and to encourage such selected persons to continue to provide
services to the Company and to attract new individuals with outstanding
qualifications.
The
Plan
seeks to achieve this purpose by providing for Awards in the form of Stock
Purchase Rights granting Restricted Stock, Stock Units, Stock Bonuses and
Options (which may constitute Incentive Stock Options or Nonstatutory Stock
Options).
The
Plan
shall be governed by, and construed in accordance with, the laws of the Republic
of Italy. Capitalized terms shall have the meaning provided in Section 2 of
the
Plan or the Italy Sub-Plan unless otherwise provided in this Plan or the
applicable Award Agreement, or other applicable agreement.
On
July
31, 2006, the Board resolved upon certain amendments to the Plan, and adopted
the text reported hereinbelow.
SECTION
2. DEFINITIONS.
(a) “ADS”
means
American
Depositary Shares issued pursuant to the Deposit Agreement dated June 15, 2005
between the Company and Bank of New York, each ADS representing one Ordinary
Share.
(b) “Affiliate”
means
any entity other than a Subsidiary, if the Company and/or one or more
Subsidiaries own not less than 50% of such entity. For purposes of determining
an individual’s “Service,” this definition shall include any entity other than a
Subsidiary, if the Company, a Parent and/or one or more Subsidiaries own not
less than 50% of such entity.
(c) “Award”
means
any Grant of an Option, SAR, Stock Unit, Stock Bonus or Stock Purchase Right
under the Plan.
(d) “Award
Agreement”
means
a
written agreement between the Company and a Participant evidencing the terms
and
conditions of a Grant of an individual Award. Each Award Agreement shall be
subject to the terms and conditions of the Plan.
(e) “Board”
means
the Board of Directors of the Company, as constituted from time to
time.
(f) “Change
In Control”
except
as may otherwise be provided in an Award Agreement or other applicable
agreement, means the occurrence of any of the following:
(i) The
consummation of a merger or consolidation of the Company with or into another
entity or any other corporate reorganization, if more than 50% of the combined
voting power of the continuing or surviving entity’s securities outstanding
immediately after such merger, consolidation or other reorganization is owned
by
persons who were not shareholders of the Company immediately prior to such
merger, consolidation or other reorganization;
(ii) The
sale,
transfer or other disposition of all or substantially all of the Company’s
assets;
(iii) Any
transaction as a result of which any person becomes the beneficiary, owner
and/or “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing at least
20%
of the total voting power represented by the Company’s then outstanding voting
securities. For purposes of this Paragraph (iii), the term “person” shall
indicate any person and/or entity except for:
(A) A
trustee
or other fiduciary holding securities under an employee benefit plan of the
Company or a subsidiary of the Company;
(B) A
corporation owned directly or indirectly by the shareholders of the Company
in
substantially the same proportions as their ownership of ordinary shares of
the
Company; and
(C) The
Company; or
(iv) A
complete liquidation or dissolution of the Company.
(g) “Code”
means
the United States Internal Revenue Code of 1986, as amended.
2
(h) “Committee”
means
a
committee consisting of one or more members of the Board that is appointed
by
the Board (as described in Section 3) to administer the Plan.
(i) “Company”
means
Gentium S.p.A., a stock corporation organized under the laws of the Republic
of
Italy.
(j) “Consultant”
means
an individual who performs bona fide services to the Company, a Parent, a
Subsidiary or an Affiliate other than as an Employee or Director or Non-Employee
Director.
(k) “Corporate
Transaction”
means
the occurrence, in a single transaction or in a series of related transactions,
of any one or more of the following events:
(i) a
sale or
other
disposition of all or substantially all, as determined by the Board in its
discretion, of the consolidated assets of the Company and its
Subsidiaries;
(ii) a
merger,
consolidation or similar transaction following which the Company is not the
surviving corporation; or
(iii) a
merger,
consolidation or similar transaction following which the Company is the
surviving corporation but the outstanding shares thereof immediately preceding
the merger, consolidation or similar transaction are converted or exchanged
by
virtue of the merger, consolidation or similar transaction into other property,
whether in the form of securities, cash or otherwise.
(l) “Covered
Employee”
means
the chief executive officer, and the 4 (four) other highest compensated officers
of the Company.
(m) “Director”
means
a
member of the Board who is also an Employee.
(n) “Disability”
means
that the Key Employee 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 12 months.
(o) “Employee”
means
any individual who is an employee of the Company, a Parent, a Subsidiary or
an
Affiliate. Mere service as a Director or payment of a director’s fee by the
Company or an Affiliate shall not be sufficient to constitute “employment” by
the Company or an Affiliate.
(p) “Exchange
Act”
means
the United States Securities Exchange Act of 1934, as amended.
(q) “Exercise
Price”
means,
in the case of an Option, the amount for which a Share may be purchased upon
exercise of such Option, as specified in the applicable Stock Option Agreement.
“Exercise Price,” in the case of a SAR, means an amount, as specified in the
applicable SAR Agreement, which is subtracted from the Fair Market Value of
a
Share in determining the amount payable upon exercise of such
SAR.
3
(r) “Fair
Market Value”
means
the market price of Shares, determined by the Committee as follows:
(i) If
ADSs
were 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;
(ii) If
the
ADSs were traded over-the-counter on the date in question and were classified
as
a national market issue or small cap issue, then the Fair Market Value shall
be
equal to the closing price quoted by the NASDAQ system for such
date;
(iii) If
the
ADSs were traded over-the-counter on the date in question but were not
classified as a national market issue, then the Fair Market Value shall be
equal
to the mean between the last reported representative bid and asked prices quoted
by the applicable trading market 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 Wall
Street Journal.
Such
determination shall be conclusive and binding on all persons. It remains
understood that, pursuant to the resolution adopted by the Extraordinary
Shareholders’ Meeting of the Company on September 30, 2004, the Exercise Price
shall not be lower than an amount corresponding to Euro 4.50.
(s) “Grant”
means
any grant of an Award under the Plan.
(t) “Incentive
Stock Option”
or
“ISO”
means
an incentive stock option described in Code section 422(b).
(u) “Key
Employee”
means
an Employee, Director, Non-Employee Director or Consultant who has been selected
by the Committee to receive an Award under the Plan.
(v) “Non-Employee
Director”
means
a
member of the Board who is not an Employee.
(w) “Non-Employee
Independent Director”
means
a
Non-Employee Director who:
(i) |
is
not a current Employee, is not a former Employee who received compensation
for prior services in the current year, and has not been an officer
of the
Company;
|
4
(ii) |
did
not directly or indirectly receive more than $60,000 in remuneration
from
the Company during the current year, other than director fees;
and
|
(iii) |
did
not receive more than $60,000 in remuneration from the Company during
the
prior year, other than director
fees.
|
(x) “Nonstatutory
Stock Option”
or
“NSO”
means
a
stock option that is not an ISO.
(y) “Option”
means
an ISO or NSO granted under the Plan entitling the Optionee to purchase
Shares.
(z) “Optionee”
means
an individual, estate or other entity that holds an Option.
(aa) “Parent”
means
a
“parent corporation,” whether now or hereafter existing, as defined in
section 424(e) of the Code.
(bb) “Participant”
means an
individual or estate or other entity that holds an Award.
(cc)
“Plan”
means
this Gentium S.p.A. Amended and Restated 2004 Equity Incentive Plan as it may
be
amended from time to time.
(dd) “Restricted
Stock”
means a
Share awarded under the Plan pursuant to a Stock Purchase Right.
(ee)
“Restricted
Stock Agreement”
means
the agreement described in Section 8 evidencing Restricted Stock that may
be purchased following the Grant of a Stock Purchase Right.
(ff)
“SAR
Agreement”
means
the agreement described in Section 9 evidencing a Grant of a Stock Appreciation
Right.
(gg) “Securities
Act”
means
the United States Securities Act of 1933, as amended.
(hh)
“Service”
means
service as an Employee, Director, Non-Employee Director or Consultant. A change
in the capacity in which the Participant renders service to the Company or
an
Affiliate as an Employee, Consultant, Director or Non-Employee Director or
a
change in the entity for which the Participant renders such service, provided
that there is no interruption or termination of the Participant’s service with
the Company or an Affiliate, shall not terminate a Participant’s Service. For
example, a change in status from an Employee of the Company to a Consultant
of
an Affiliate or a Director shall not constitute an interruption of
Service.
(ii)
“Share”
means
one ordinary share of the Company.
(jj)
“Stock
Appreciation Right” or “SAR”
means
a stock
appreciation right awarded under the Plan.
(kk) “Stock
Bonus”
means a
stock bonus awarded under the Plan.
5
(ll)“Stock
Bonus Agreement”
means
the agreement described in Section 9 evidencing each Grant of a Stock
Bonus.
(mm)
“Stock
Option Agreement”
means
the agreement described in Section 6 evidencing each Grant of an
Option.
(nn)
“Stock
Purchase Right”
means
the right to acquire Restricted Stock pursuant to Section 8.
(oo)
“Stock
Unit”
means
a
bookkeeping entry representing the equivalent of a Share, as awarded under
the
Plan.
(pp)
“Stock
Unit Agreement”
means
the agreement described in Section 8 evidencing a Grant of Stock
Units.
(qq)
“Subsidiary”
means
a
“subsidiary corporation,” whether now or hereafter existing, as defined in
section 424(f) of the Code.
(rr)
“10-Percent
Shareholder”
means
an individual who owns more than ten percent (10%) of the total combined voting
power of all classes of outstanding stock of the Company, its Parent or any
of
its Subsidiaries. In determining stock ownership, the attribution rules of
section 424(d) of the Code shall be applied.
SECTION
3. ADMINISTRATION.
(a) Administration
by Board.
The
Board shall administer the Plan and the Italy Sub-Plan unless and until the
Board delegates administration to a Committee, as provided in Section
3(c).
(b) Powers
of Board.
The
Board shall have the power, subject to, and within the limitations of, the
express provisions of the Plan and Italy Sub-Plan:
(i) to
determine from time to time which of the persons eligible under the Plan or
the
Italy Sub-Plan shall be granted Awards or Italian Awards, as applicable; when
and how each Award or Italian Award shall be granted; what type or combination
of types of Award or Italian Awards shall be granted; the provisions of each
Award or Italian Awards granted (which need not be identical), including the
time or times when a person shall be permitted to receive Shares pursuant to
a
Award or Italian Award; and the number of Shares with respect to which an Award
or Italian Award shall be granted to each such person;
(ii) to
construe and interpret the Plan, Italy Sub-Plan, Awards and Italian Awards
granted under them, and to establish, amend and revoke rules and regulations
for
its administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or the Italy Sub-Plan or in any
Award Agreement or Italian Award Agreement, in a manner and to the extent it
shall deem necessary or expedient to make the Plan and Italy Sub-Plan fully
effective;
6
(iii) to
amend
the Plan or an Award as provided in Section 15;
(iv) to
terminate or suspend the Plan as provided in Section 15;
and
(v) generally,
to exercise such powers and to perform such acts as the Board deems necessary
or
expedient to promote the best interests of the Company which are not in conflict
with the provisions of the Plan or Italy Sub-Plan.
(c) Delegation
to Committee.
(i) The
Board
may delegate administration of the Plan to a Committee or Committees of the
Board, and the term “Committee” shall apply to persons to whom such authority
has been delegated. If administration is delegated to a Committee, the Committee
shall have, in connection with the administration of the Plan, the powers
theretofore possessed by the Board (and references in this Plan to the Board
shall thereafter be to the Committee), subject, however, to such resolutions,
not inconsistent with the provisions of the Plan, as may be adopted from time
to
time by the Board. The Board may abolish the Committee at any time and revest
in
the Board the administration of the Plan.
(ii) With
respect to Awards granted to any Covered Employee, the Committee shall consist
of those individuals who are
outside Non-Employee Independent Directors.
The
Board
may also appoint one or more separate committees of the Board, each composed
of
directors of the Company who need not to be outside Non-Employee Independent
Directors..
Notwithstanding
the foregoing, the Board shall constitute the Committee and shall administer
the
Plan with respect to all Awards granted to Non-Employee Directors.
(d) Effect
of Board’s Decision.
All
determinations, interpretations and constructions made by the Board are not
subject to review by any person and shall be final, binding and conclusive
on
all persons.
(e) Indemnification.
Each
member of the Committee, or of the Board, shall be indemnified and held harmless
by the Company against and from (i) any loss, cost, liability, or expense
that may be imposed upon or reasonably incurred by him or her in connection
with
or resulting from any claim, action, suit, or proceeding to which he or she
may
be a party or in which he or she may be involved by reason of any action taken
or failure to act under the Plan or Italy Sub-Plan or any Award Agreement or
Italian Award Agreement, and (ii) from any and all amounts paid by him or
her in settlement thereof, with the Company’s approval, or paid by him or her in
satisfaction of any judgment in any such claim, action, suit, or proceeding
against him or her, provided he or she shall give the Company an opportunity,
at
its own expense, to handle and defend the same before he or she undertakes
to
handle and defend it on his or her own behalf, except for the case of fraud
or
gross negligence. The foregoing right of indemnification shall not be exclusive
of any other rights of indemnification to which such persons may be entitled
under the Company’s Certificate of
Incorporation or Bylaws, by contract, as a matter of law, or otherwise, or
under
any power that the Company may have to indemnify them or hold them
harmless.
7
SECTION
4. ELIGIBILITY.
(a) General
Rules.
Only
Employees, Directors, Non-Employee Directors and Consultants who are liable
for
income tax in the United States shall be eligible for designation as Key
Employees by the Committee.
(b) Incentive
Stock Options.
Only
Key Employees shall be eligible for the grant of ISOs. In addition, a Key
Employee who is a 10-Percent Shareholder shall not be eligible for the grant
of
an ISO unless the requirements set forth in Sections
6(c) and 6(d) with respect to ISOs.
(c) Non-Employee
Director Options.
Non-Employee Directors shall also be eligible to receive Options as described
in
this Section 4(c) from and after the date the Board has determined to implement
this provision.
(i) Each
eligible Non-Employee Director elected or appointed after the IPO Date shall
automatically be granted an NSO to purchase 10,000 Shares (subject to adjustment
under Section 11(a)) as a result of his or her initial election or appointment
as a Non-Employee Director. All NSOs granted pursuant to this Section 4(c)(i)
shall vest and become exercisable, provided the individual is serving as a
Non-Employee Director of the Company as of the vesting date, as follows:
one-third of the total Shares subject to the NSO (rounded to nearest whole
number) one year from the date of grant, then in 24 equal monthly installments
commencing on the date one month and one year after the date of
grant
(ii) Upon
the
conclusion of each regular annual meeting of the Company’s shareholders
following his or her initial appointment, each eligible Non-Employee Director
who will continue serving as a member of the Board thereafter shall receive
an
NSO to purchase 5,000 Shares (subject to adjustment under Section 11(a)). All
NSOs granted pursuant to this Section 4(c)(ii) shall vest and become exercisable
provided the individual is serving as a Non-Employee Director of the Company
as
of the vesting date as follows: one-twelfth of the total Shares subject to
the
NSO (rounded to nearest whole number) on each monthly anniversary of the date
of
grant.
(iii) All
NSOs
granted to Non-Employee Directors under this Section 4(c) shall become
exercisable in full in the event of Change in Control with respect to the
Company.
(iv) The
Exercise Price under all NSOs granted to a Non-Employee Director under this
Section 4(c) shall be equal to one hundred percent (100%) of the Fair Market
Value of a Share on the date of grant, which shall be payable in one of the
forms described in Section 7.
(v) All
NSOs
granted to a Non-Employee Director under this Section 4(c) shall terminate
on
the earlier of:
8
(A) September
30, 2009; or
(B) The
date
ninety (90) days after the termination of such Non-Employee Director’s Service
for any reason.
SECTION
5. SHARES
SUBJECT TO PLAN.
(a) Basic
Limitation.
Subject
to the provisions of Section 11(a), the stock issuable under the Plan and the
Italy Sub-Plan shall be authorized but unissued Shares or treasury Shares (the
latter, within the limits set forth under Italian law). The aggregate number
of
Shares reserved for Awards under the Plan and for Italian Awards under the
Italy
Sub-Plan shall not exceed 1,500,000 Shares; provided, however, that subject
to
the provisions of Section 11(a) of the Plan, the aggregate maximum number of
Shares that may be issued in connection with ISOs shall be 1,500,000
Shares.
(b) Additional
Shares.
If
Awards or Italian Awards are forfeited or terminate for any other reason before
being exercised, then the Shares underlying such Awards and Italian Awards
shall
again become available for Awards under the Plan and Italian Awards under the
Italy Sub-Plan.
(c) Limits
on Options .
No Key
Employee shall receive Options to purchase Shares during any fiscal year
covering in excess of 500,000 Shares. Notwithstanding the foregoing limitation,
a Key Employee may receive Options to purchase Shares of up to 600,000 Shares
in
the first year of a Key Employee’s employment with Company.
(d) Limits
on Stock Purchase Rights, Stock Units and Stock Bonuses.
No Key
Employee shall receive an Award(s) of Stock Purchase Rights, Stock Units and/or
Stock Bonuses during any fiscal year covering in excess of 250,000 Shares.
Notwithstanding the foregoing limitation, a Key Employee may receive an Award(s)
of Stock Purchase Rights, Stock Units and/or Stock Bonuses of up to 500,000
Shares in the first year of a Key Employee’s employment with
Company.
SECTION
6. 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
between 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 that are not inconsistent with the Plan and that 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. A Stock Option Agreement may provide that new Options
will be granted automatically to the Optionee when he or she exercises the
prior
Options. The Stock Option Agreement shall also specify whether the Option is
an
ISO or an NSO.
(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 11(a).
9
(c) Exercise
Price.
An
Option’s Exercise Price shall be established by the Board or the Committee and
set forth in a Stock Option Agreement. The Exercise Price of an ISO shall not
be
less than the higher of (i) 100% of the Fair Market Value (110% for 10-Percent
Shareholders) of a Share on the date of Grant, and (ii) an amount corresponding,
as of the date of exercise, to Euro 4.50 per Share. In the case of an NSO,
a
Stock Option Agreement may specify an Exercise Price that varies in accordance
with a predetermined formula while the NSO is outstanding.
(d) Exercisability
and Term.
Each
Stock Option Agreement shall specify the date when all or any installment of
the
Option is to become exercisable. The Stock Option Agreement shall also specify
the term of the Option; provided that the term of an ISO shall in no event
end
after September 30, 2009. No Option can be exercised after the expiration date
provided in the applicable Stock Option Agreement. A Stock Option Agreement
may
provide for accelerated exercisability in the event of the Optionee’s death,
Disability or retirement or other events and may provide for expiration prior
to
the end of its term in the event of the termination of the Optionee’s Service. A
Stock Option Agreement may permit an Optionee to exercise an Option before
it is
vested, subject to the Company’s right of repurchase over any Shares acquired
under the unvested portion of the Option (an “early exercise”), which right of
repurchase shall lapse at the same rate the Option would have vested had there
been no early exercise. In no event shall the Company be required to issue
fractional Shares upon the exercise of an Option.
(e) Modifications
or Assumption of Options.
Within
the limitations of the Plan, the Board or the Committee may modify, extend
or
assume outstanding stock options or may accept the cancellation of outstanding
stock options (whether granted by the Company or by another issuer) in return
for the grant of new Options for the same or a different number of Shares and
at
the same or a different Exercise Price. The foregoing notwithstanding, no
modification of an Option shall, without the consent of the Optionee, alter
or
impair his or her rights or obligations under such Option.
(f) Transferability
of Options.
Except
as otherwise provided in the applicable Stock Option Agreement and then only
to
the extent permitted by applicable law, no Option shall be transferable by
the
Optionee other than by will or by the laws of descent and distribution. Except
as otherwise provided in the applicable Stock Option Agreement, an Option may
be
exercised during the lifetime of the Optionee only or by the guardian or legal
representative of the Optionee. No Option or interest therein may be assigned,
pledged or hypothecated by the Optionee during his or her lifetime, whether
by
operation of law or otherwise, or be made subject to execution, attachment
or
similar process.
(g) Restrictions
on Transfer.
Any
Shares issued upon exercise of an Option shall be subject to such rights of
repurchase, rights of first refusal and other transfer restrictions as the
Committee may determine. Such restrictions shall apply in addition to any
restrictions that may apply to holders of Shares generally and shall also comply
to the extent necessary with applicable law.
(h) Incentive
Stock Option $100,000 Limitation.
To the
extent that the aggregate Fair Market Value (determined at the time of grant)
of
the Shares with respect to which ISOs are exercisable for the first time by
any
Optionee during any calendar year (under all plans of the Company and its
Affiliates) exceeds one hundred thousand dollars ($100,000), the Options or
portions thereof which exceed such limit (according to the order in which they
were granted) shall be treated as NSOs.
10
SECTION
7. PAYMENT
FOR OPTION SHARES.
General
Rule.
The
entire Exercise Price of Shares issued upon exercise of Options shall be paid
in
cash at the time when such Shares are purchased.
SECTION
8. TERMS
AND CONDITIONS FOR AWARDS OF STOCK PURCHASE RIGHTS AND STOCK
UNITS.
(a) Time,
Amount and Form of Awards.
Awards
under this Section 8 may be granted in the form of Stock Purchase Rights, in
the
form of Stock Units, or in any combination of both. Such Awards may also be
awarded in combination with NSOs or SARs, and such an Award may provide that
the
Restricted Stock or Stock Units will be forfeited in the event that the related
NSOs or SARs are exercised.
(b) Restricted
Stock and Stock Unit Agreements.
Each
Grant of a Stock Purchase Right or Stock Units under the Plan shall be evidenced
by a Restricted Stock Agreement or Stock Unit Agreement between the Participant
and the Company. Such Awards shall be subject to all applicable terms and
conditions of the Plan and may be subject to any other terms and conditions
that
are not inconsistent with the Plan and that the Committee deems appropriate
for
inclusion in the applicable Award Agreement. The provisions of the various
Award
Agreements entered into under the Plan need not be identical.
(c) Payment
for Restricted Stock or Stock Unit Awards.
Restricted Stock or Stock Units shall be issued with cash consideration (which
in no event will be lower than Euro 4.50 per share) under the Plan.
(d) Form
and Time of Settlement of Stock Units.
Settlement of vested Stock Units shall be made in cash. The actual number of
Stock Units eligible for settlement may be larger or smaller than the number
included in the original Award, based on predetermined performance factors.
Methods of converting Stock Units into cash may include (without limitation)
a
method based on the average Fair Market Value of Shares over a series of trading
days. The distribution may occur or commence when all vesting conditions
applicable to the Stock Units have been satisfied or have lapsed, or it may
be
deferred to any later date. The amount of a deferred distribution may be
increased by an interest factor or by dividend equivalents. Until an Grant
of
Stock Units is settled, the number of such Stock Units shall be subject to
adjustment pursuant to Section 11(a).
(e) Vesting
Conditions.
Each
Grant of Restricted Stock or Stock Units shall become vested upon satisfaction
of the conditions specified in the applicable Award Agreement. An Award
Agreement may provide for accelerated vesting in the event of the Participant’s
death, Disability, retirement or other events.
11
(f) Assignment
or Transfer of Restricted Stock or Stock Units.
Except
as provided in Section 14, or in a Restricted Stock Agreement or Stock Unit
Agreement, or as required by applicable law, a Restricted Stock or Stock Unit
Award granted under the Plan shall not be anticipated, assigned, attached,
garnished, optioned, transferred or made subject to any creditor’s process,
whether voluntarily, involuntarily or by operation of law. Any act in violation
of this Section 8(f) shall be void. However, this Section 8(f) shall not
preclude a Participant from designating a beneficiary who will receive any
outstanding Restricted Stock or Stock Unit Awards in the event of the
Participant’s death, nor shall it preclude a transfer of Restricted Stock or
Stock Unit Awards by will or by the laws of descent and
distribution.
(g) Death
of Stock Units Recipient.
Any
Stock Units Award that becomes payable after the Award recipient’s death shall
be distributed to the recipient’s beneficiary or beneficiaries. Each recipient
of a Stock Units Award under the Plan shall designate one or more beneficiaries
for this purpose by filing the prescribed form with the Company. A beneficiary
designation may be changed by filing the prescribed form with the Company at
any
time before the recipient’s death. If no beneficiary was designated or if no
designated beneficiary survives the recipient, then any Stock Units Award that
becomes payable after the recipient’s death shall be distributed to the
recipient’s estate.
(h) Trusts.
Neither
this Section 8 nor any other provision of the Plan shall preclude a Participant
from transferring or assigning Restricted Stock to (a) the trustee of a trust
that is revocable by such Participant alone, both at the time of the transfer
or
assignment and at all times thereafter prior to such Participant’s death, or (b)
the trustee of any other trust to the extent approved in advance by the
Committee in writing. A transfer or assignment of Restricted Stock from such
trustee to any person other than such Participant shall be permitted only to
the
extent approved in advance by the Committee in writing, and Restricted Stock
held by such trustee shall be subject to all of the conditions and restrictions
set forth in the Plan and in the applicable Restricted Stock Agreement, as
if
such trustee were a party to such Restricted Stock Agreement.
(i) Voting
and Dividend Rights.
The
holders of Restricted Stock awarded under the Plan shall have the same voting,
dividend and other rights as the Company’s other shareholders. A Restricted
Stock Agreement, however, may require that the holders of Restricted Stock
invest any cash dividends received in additional Restricted Stock. Such
additional Restricted Stock shall be subject to the same conditions and
restrictions as the Award with respect to which the dividends were paid. Such
additional Restricted Stock shall not reduce the number of Shares available
under Section 5.
(j) Stock
Units Voting and Dividend Rights.
The
holders of Stock Units shall have no voting rights. Prior to settlement or
forfeiture, any Stock Unit awarded under the Plan may, at the Committee’s
discretion, carry with it a right to dividend equivalents. Such right entitles
the holder to be credited with an amount equal to all cash dividends paid on
one
Share while the Stock Unit is outstanding. Dividend equivalents may be converted
into additional Stock Units. Settlement of dividend equivalents may be made
in
the form of cash, in the form of Shares, or in a combination of both. Prior
to
distribution, any dividend equivalents which are not paid shall be subject
to
the same conditions and restrictions as the Stock Units to which they
attach.
12
(k) Creditors’
Rights.
A
holder of Stock Units shall have no rights other than those of a general
creditor of the Company. Stock Units represent an unfunded and unsecured
obligation of the Company, subject to the terms and conditions of the applicable
Stock Unit Agreement.
SECTION
9. TERMS
AND CONDITIONS OF STOCK APPRECIATION RIGHTS.
(a) SAR
Agreement.
Each
Grant of a SAR under the Plan shall be evidenced by a SAR Agreement between
the
Award recipient and the Company. Such SAR shall be subject to all applicable
terms of the Plan and may be subject to any other terms that are not
inconsistent with the Plan. The provisions of the various SAR Agreements entered
into under the Plan need not be identical. SARs may be granted in consideration
of a reduction in the recipient other compensation.
(b) Number
of Shares.
Each
SAR Agreement shall specify the number of Shares to which the SAR pertains
and
shall provide for the adjustment of such number in accordance with Section
11(a).
(c) Exercise
Price.
Each
SAR Agreement shall specify the Exercise Price. A SAR Agreement may specify
an
Exercise Price that varies in accordance with a predetermined formula while
the
SAR is outstanding.
(d) Exercisability
and Term.
Each
SAR Agreement shall specify the date when all or any installment of the SAR
is
to become exercisable. The SAR Agreement shall also specify the term of the
SAR.
A SAR Agreement may provide for accelerated exercisability in the event of
the
recipient’s death, Disability, retirement or other events and may provide for
expiration prior to the end of its term in the event of the termination of
the
recipient’s Service. SARs may also be awarded in combination with Options,
Restricted Stock or Stock Units, and such an Award may provide that the SARs
will not be exercisable unless the related Options, Restricted Stock or Stock
Units are forfeited. A SAR may be included in an ISO only at the time of Grant
but may be included in an NSO at the time of Xxxxx or at any subsequent time,
but not later than six months before the expiration of such NSO. A SAR granted
under the Plan may provide that it will be exercisable only in the event of
a
Change in Control.
(e) Exercise
of SARs.
If, on
the date when a SAR expires, the Exercise Price under such SAR is less than
the
Fair Market Value on such date but any portion of such SAR has not been
exercised or surrendered, then such SAR shall automatically be deemed to be
exercised as of such date with respect to such portion. Upon exercise of a
SAR,
the recipient (or any person having the right to exercise the SAR after his
or
her death) shall receive cash from the Company. The amount of cash received
upon
exercise of SARs shall, in the aggregate, be equal to the amount by which the
Fair Market Value (on the date of surrender) of the Shares subject to the SARs
exceeds the Exercise Price.
13
(f) Modification
or Assumption of SARs.
Within
the limitations of the Plan, the Committee may modify, extend or assume
outstanding stock appreciation rights or may accept the cancellation of
outstanding stock appreciation rights (whether granted by the Company or by
another issuer) in return for the grant of new SARs for the same or a different
number of Shares and at the same or a different Exercise Price. The foregoing
notwithstanding, no modification of a SAR shall, without the consent of the
Optionee, alter or impair his or her rights or obligations under such
SAR.
SECTION
10. TERMS
AND CONDITIONS OF STOCK BONUSES
(a) Stock
Bonus Agreement.
Each
Grant of a Stock Bonus under the Plan shall be evidenced by a Stock Bonus
Agreement between the Award recipient and the Company. Such Stock Bonus
Agreement shall be subject to all applicable terms of the Plan and may be
subject to any other terms that are not inconsistent with the Plan. The
provisions of the various Stock Bonus Agreements entered into under the Plan
need not be identical.
(b) Number
of Shares.
Each
Stock Bonus Agreement shall specify the number of Shares to which the Stock
Bonus pertains and shall provide for the adjustment of such number in accordance
with Section 11(a).
(c) Consideration
A Stock
Bonus shall be issued with cash consideration (which in no event will be lower
than Euro 4.50 per share) under the Plan. A Stock Bonus may be awarded in
consideration for past services actually rendered to the Company or an Affiliate
for its benefit.
(d)
Vesting
The
Stock Bonus Agreement shall specify whether the Shares awarded under the Stock
Bonus Agreement are subject to a share
repurchase right option in favor of the Company in accordance with a vesting
schedule to be determined by the Committee, and, in any event, within the limits
set forth under Italian law. In the event the Service of a recipient of a Stock
Bonus terminates, the Company may reacquire, within the limits set forth under
Italian law, any or all of the Shares held by the recipient which have not
vested as of the date of termination under the terms of the Stock Bonus
Agreement.
(e)
Transferability.
Except
as provided in Section 10 or Stock Bonus Agreement, or as required by applicable
law, a Stock Bonus granted under the Plan shall not be anticipated, assigned,
attached, garnished, optioned, transferred or made subject to any creditor’s
process, whether voluntarily, involuntarily or by operation of law. Any act
in
violation of this Section 10(e) shall be void. However, this Section 10(e)
shall
not preclude a recipient of a Stock Bonus from designating a beneficiary who
will receive any outstanding Stock Bonus in the event of the recipient’s death,
nor shall it preclude a transfer of a Stock Bonus by will or by the laws of
descent and distribution.
(f)
Death
of Stock Bonus Recipient.
Any
Stock Bonus that becomes payable after the recipient’s death shall be
distributed to the recipient’s beneficiary or beneficiaries. Each recipient of a
Stock Bonus under the Plan shall designate one or more beneficiaries for this
purpose by filing the prescribed form with the Company. A beneficiary
designation may be changed by filing the prescribed form with the Company at
any
time before the recipient’s death. If no beneficiary was designated or if no
designated beneficiary survives the recipient, then any Stock Bonus that becomes
payable after the recipient’s death shall be distributed to the recipient’s
estate.
14
(g)
Trusts.
Neither
this Section 10 nor any other provision of the Plan shall preclude a recipient
of a Stock Bonus from transferring or assigning the Stock Bonus to (a) the
trustee of a trust that is revocable by such recipient alone, both at the time
of the transfer or assignment and at all times thereafter prior to such
recipient death, or (b) the trustee of any other trust to the extent approved
in
advance by the Committee in writing. A transfer or assignment of a Stock Bonus
from such trustee to any person other than the recipient shall be permitted
only
to the extent approved in advance by the Committee in writing, and the Stock
Bonus held by such trustee shall be subject to all of the conditions and
restrictions set forth in the Plan and in the applicable Stock Bonus Agreement,
as if such trustee were a party to such Stock Bonus Agreement.
(h)
Stock
Bonus Voting and Dividend Rights.
The
holders of Shares deriving from the exercise of a Stock Bonus shall have the
same voting, dividend and other rights as the Company’s other
shareholders.
SECTION
11. PROTECTION
AGAINST DILUTION.
(a) Adjustments.
In the
event of a subdivision of the outstanding Shares, 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 price of Shares, a
combination or consolidation of the outstanding Shares (by reclassification
or
otherwise) into a lesser number of Shares, a recapitalization, reorganization,
merger, liquidation, spin-off or a similar occurrence (all without the receipt
of consideration), the Board or the Committee shall make such adjustments as
it,
in its reasonable discretion, deems appropriate in order to prevent the dilution
or enlargement of rights hereunder in one or more of:
(i) the
number of Shares subject to automatic Grants under Section 4(c); the number
of
Shares available for future Awards or Italian Awards under Section 5(a); the
per
person Share limits under Sections 5(c) and (d);
(ii) the
number of Shares covered by each outstanding Award or Italian Award;
or
(iii) the
Exercise Price under each outstanding Option or Italian Stock
Option.
Notwithstanding
anything in this Plan or the Italy Sub-Plan to the contrary, no adjustment
shall
be made with respect to any stock split occurring prior to the IPO
Date.
(b) Participant
Rights.
Except
as provided in this Section 11, a recipient of an Award or Italian Award
shall have no rights by reason of any issue by the Company of stock of any
class
or securities convertible into stock of any class, any subdivision or
consolidation of shares of stock of any class, the payment of any stock dividend
or any other increase or decrease in the number of shares of stock of any
class.
15
SECTION
12. EFFECT
OF A CORPORATE TRANSACTION.
(a) Merger
or Reorganization.
In the
event that the Company is a party to a Corporate Transaction, outstanding Awards
shall be subject to the terms and conditions of the agreement memorializing
such
Corporate Transaction. Such agreement may provide, without limitation, for
the
assumption or substitution of outstanding Awards by the surviving corporation
or
its parent, for their continuation by the Company (if the Company is a surviving
corporation), for accelerated vesting or for their cancellation with or without
consideration.
(b) Acceleration.
The
Committee may determine, at the time of granting an Award, or thereafter, that
such Award shall become fully exercisable as to all Shares subject to such
Award
in the event that a Change in Control occurs with respect to the
Company.
SECTION
13. LIMITATIONS
ON RIGHTS.
(a) Retention
Rights.
Neither
the Plan nor any Award granted under the Plan shall be deemed to give any
individual a right to remain an Employee, Consultant or Director of the Company.
The Company reserves the right to terminate the Service of any person at any
time, and for any reason, subject to applicable laws, the Company’s
Certificate of
Incorporation and
Bylaws and a written employment agreement (if any).
(b) Shareholders’
Rights.
A
Participant shall have no dividend rights, voting rights or other rights as
a
stockholder with respect to any Shares covered by his or her Award prior to
the
issuance of a stock certificate, or similar means of representations of the
Shares, for such Shares. No adjustment shall be made for cash dividends or
other
rights for which the record date is prior to the date when such certificate
is
issued, except as expressly provided in Section 11.
(c) Regulatory
Requirements.
Any
other provision of the Plan notwithstanding, the obligation of the Company
to
issue Shares under the Plan shall be subject to all applicable laws, rules
and
regulations and such approval by any regulatory body as may be required. The
Company reserves the right to restrict, in whole or in part, the delivery of
Shares pursuant to any Award prior to the satisfaction of all legal requirements
relating to the issuance of such Shares, to their registration, qualification
or
listing or to an exemption from registration, qualification or
listing.
SECTION
14. WITHHOLDING
TAXES.
(a) Withholding
Obligations.
The
Company will be entitled to make any applicable withholding or deduction on
account of any taxes or social security contributions due on benefits derived
from the Plan pursuant to applicable law. A Participant shall make arrangements
satisfactory to the Company for the satisfaction of such tax or social security
obligations that arise in connection with his or her Award. The Company shall
not be required to issue any Shares or make any cash payment under the Plan
until such obligations are satisfied.
16
SECTION
15. DURATION
AND AMENDMENTS.
(a) Term
of the Plan.
The
Plan shall become effective on the IPO Date, subject to the approval of the
Company’s shareholders. No Options shall be exercisable until such shareholder
approval is obtained. In the event that the shareholders fail to approve the
Plan within twelve (12) months after its adoption by the Board, any Awards
made
shall be null and void and no additional Awards shall be made. The Plan shall
terminate on September 30, 2009 or on any earlier date pursuant to Section
15(b)
of the Plan.
(b) Right
to Amend, Suspend or Terminate the Plan.
The
Board may amend, suspend or terminate the Plan at any time and for any reason.
The suspension or termination of the Plan, or any amendment thereof, shall
not
affect any Award previously granted under the Plan. No Awards shall be granted
under the Plan after the Plan’s suspension or termination. An amendment of the
Plan shall be subject to the approval of the Company’s shareholders only to the
extent required by applicable laws, regulations or rules.
(c) Right
to Amend Award.
The
Board at any time, and from time to time, may amend the terms of any one or
more
Awards; provided, however, that the rights under any Award shall not be impaired
by any such amendment unless (i) the Company requests the consent of the
Participant and (ii) the Participant consents in writing.
(d) Possible
Novative Effects. It
remains understood that the adoption by the Board, during the meeting held
on
July 31, 2006, of the amended version of the Plan reported above did not produce
any novative effect pursuant to sections 1230 and 1235 of the Italian Civil
Code.
SECTION
16. EXECUTION.
To
record
the adoption of the Plan by the Board, the Company has caused its duly
authorized officer to execute this Plan on behalf of the Company.
GENTIUM S.p.A. | ||
|
|
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By:
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/s/ Xxxxx
Xxxx Xxxxx
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Title: | Chairperson, Chief Executive Officer & President |
17
APPENDIX
A
GENTIUM
S.p.A.
AMENDED
AND RESTATED
2004
ITALY STOCK AWARD SUB-PLAN
SECTION
1. BACKGROUND
AND PURPOSE
The
purpose of this Gentium S.p.A. Amended and Restated 2004 Italy Stock Award
Sub-Plan (the “Italy Sub-Plan”) is to advance the interest of the Company by
enabling it and its operating companies to attract and retain the best available
personnel for positions of substantial responsibility in Italy and to provide
Italian Key Employees of the Company and its controlling and subsidiary
companies, with an opportunity for investment in the Company; thereby giving
them an additional incentive to increase their efforts on behalf of the long
term success of the Company and its operating companies.
It
is
intended that Italian Awards granted under the Italy Sub-Plan shall qualify
for
the favorable tax and social security treatment applicable to stock grants
or
stock options granted under applicable Italian law and in accordance with the
relevant provisions set forth by Italian tax law and the Italian tax
administration. The terms of the Italian Sub-Plan shall be interpreted in
accordance with the relevant provisions set forth by Italian tax and social
security laws, as well as the Italian tax and social security administrations.
For Italian Awards granted under the Italy Sub-Plan, any conflict in terms
between the Plan and the Italy Sub-Plan shall be governed by the terms in the
Italy Sub-Plan.
SECTION
2. DEFINITION
AND CONSTRUCTION
All
capitalized terms used in this Italy Sub-Plan shall have the meaning ascribed
to
them in either the Italy Sub-Plan or the Plan. Terms not defined in the Italy
Sub-Plan or the Plan, shall be given their normal and ordinary
meaning.
(a) “Italian
Employee” means any individual employed by the Company or a controlling or
subsidiary company who resides in the Republic of Italy and who is liable for
income tax in the Republic of Italy.
(b) “Exercise
Price” means (1) when the Company’s ADSs are traded on a regulated market as
defined under applicable Italian law, the average of the closing price quoted
by
the NASDAQ system over the preceding 30 days and (2) when the Company’s ADSs are
not on a regulated market as defined under applicable Italian law, the
proportionate value of the net worth of the Company determined by the Board
in
good faith and on such basis as it deems appropriate, taking applicable
regulations into account.
It
remains understood that in no event the Exercise Price will be lower than Euro
4.50.
2
(c) “Italy
Sub-Plan” means the provisions contained herein as Appendix A the Plan to be
known as the Gentium S.p.A. 2004 Italy Stock Award Sub-Plan, as the same may
be
amended from time to time.
(d) “Italian
Award” means an Italian Stock Option or an Italian Stock Grant.
(e) “Italian
Award Agreement” means a written agreement between the Company and an Italian
Key Employee evidencing the terms and conditions of a grant of an individual
Italian Award. Each Italian Award Agreement shall be subject to the terms and
conditions of the Italy Sub-Plan.
(f) “Italian
Key Employee” means an Italian Employee who is liable for income tax in Italy or
any person eligible to receive an Italian Award under Articles 2349 and 2441
of
the Italian Civil Code who is liable for income tax in Italy and who has been
selected by the Committee to receive an Italian Award under the Italy
Sub-Plan.
(g) “Italian
Stock Grant” means a stock grant to acquire Shares pursuant to Article 2349 of
the Italian Civil Code.
(h) “Italian
Stock Grant Agreement” means the agreement described in Section 5 of the Italy
Sub-Plan.
(i) “Italian
Stock Option” means a stock option to acquire Shares pursuant to Article 2441 of
the Italian Civil Code.
(j) “Italian
Stock Option Agreement” means the agreement described in Section 4 of the Italy
Sub-Plan.
SECTION
3. INCORPORATION
OF PLAN
This
Italy Sub-Plan shall be ancillary to the Plan. The provisions of this Italy
Sub-Plan shall be applicable only to Italian Key Employees who have or shall
have a liability for Italian income tax with respect to an Italian Award For
the
avoidance of doubt, this Italy Sub-Plan does not apply to any Key Employee
or
Participant who does not have Italy income tax liability with respect to their
Award.
SECTION
4. ITALIAN
STOCK OPTION TERMS
(a) Italian
Stock Option Agreement.
Each
grant of an Italian Stock Option under the Italy Sub-Plan shall be evidenced
by
an Italian Stock Option Agreement between the Italian Key Employee and the
Company. Such Italian Stock Option shall be subject to all applicable terms
and
conditions of the Italy Sub-Plan and may be subject to any other terms and
conditions that are not inconsistent with the Italy Sub-Plan and that the Board
deems appropriate for inclusion in an Italian Stock Option Agreement. The
provisions of the various Italian Stock Option Agreements entered into under
the
Italy Sub-Plan need not be identical.
3
(b) Number
of Shares.
Each
Italian Stock Option Agreement shall specify the number of Shares that are
subject to the Italian Stock Option and shall provide for the adjustment of
such
number in accordance with Section 11(a) of the Plan. Notwithstanding the
foregoing, no Italian Key Employee shall receive Italian Stock Options to
purchase Shares in excess of 10% of the voting rights in the annual meeting
of
shareholders or 10% of the capital or equity of the Company.
(c) Exercise
Price.
An
Italian Stock Option’s Exercise Price shall be established by the Board and set
forth in the Italian Stock Option Agreement.
(d) Exercisability
and Term.
Each
Italian Stock Option Agreement shall specify the date when all or any
installment of the Italian Stock Option is to become exercisable. The Italian
Stock Option Agreement shall also specify the term of the Italian Stock Option,
provided that the Italian Stock Option shall terminate prior to the end of
its
term if the Italian Key Employee’s Service with the Company terminates. No
Italian Stock Option can be exercised after the expiration date provided in
the
applicable Italian Stock Option Agreement.
(e) Withholding
Obligations. The
recipient of an Italian Stock Option shall make arrangements satisfactory to
the
Company for the satisfaction of any withholding tax obligations that arise
in
connection with his or her Italian Stock Option. The Company shall not be
required to issue any Shares until such obligations are satisfied.
(f) Transferability.
Except
as otherwise provided in the applicable Italian Stock Option Agreement and
then
only to the extent permitted by applicable law, no Italian Stock Option shall
be
transferable by the Italian Key Employee other than by will or by the laws
of
descent and distribution. No Italian Stock Option or interest therein may be
assigned, pledged or otherwise offered as security by the Italian Key Employee
during his or her lifetime, whether by operation of law or otherwise, or be
made
subject to execution, attachment or similar process.
SECTION
5. ITALIAN
STOCK GRANT TERMS
(a) Italian
Stock Grant Agreement.
Each
grant of an Italian Stock Grant under the Italy Sub-Plan shall be evidenced
by
an Italian Stock Grant Agreement between the Italian Key Employee and the
Company. Such Italians Stock Grant Agreement shall be subject to all applicable
terms of the Italy Sub-Plan and may be subject to any other terms that are
not
inconsistent with the Italy Sub-Plan. The provisions of the various Italian
Stock Grant Agreements entered into under the Italy Sub-Plan need not be
identical.
(b) Number
of Shares.
Each
Italian Stock Grant Agreement shall specify the number of Shares to which the
Italian Stock Grant pertains and shall provide for the adjustment of such number
in accordance with Section 11(a) of the Plan.
(c) Consideration.
An
Italian Stock Grant shall be awarded in consideration for past services actually
rendered to the Company or any of its controlling or subsidiary
companies.
4
(d) Vesting
The
Shares awarded under an Italian Stock Grant shall be subject to forfeiture
in
accordance with a vesting schedule to be determined by the Board.
(e) Withholding
Obligations The
recipient of an Italian Stock Grant shall make arrangements satisfactory to
the
Company for the satisfaction of any withholding tax obligations that arise
in
connection with his or her Italian Stock Grant. The Company shall not be
required to issue any Shares until such obligations are satisfied.
(f) Transferability
Except
as otherwise provided in the applicable Italian Stock Grant Agreement and then
only to the extent permitted by applicable law, no Italian Stock Grant shall
be
transferable by the Italian Key Employee. No Italian Stock Grant or interest
therein may be assigned, pledged or otherwise offered as security by the Italian
Key Employee during his lifetime, whether by operation of law or otherwise,
or
be made subject to execution, attachment or similar process.
SECTION
6. EFFECT
OF A CORPORATE TRANSACTION.
(a) Merger
or Reorganization.
In the
event that the Company is a party to a Corporate Transaction, outstanding
Italian Awards shall be subject to the terms and conditions of the agreement
memorializing such Corporate Transaction. Such agreement may provide, without
limitation, for the assumption or substitution of outstanding Italian Awards
by
the surviving corporation or its parent, for their continuation by the Company
(if the Company is a surviving corporation), for accelerated vesting or for
their cancellation with or without consideration.
(b) Acceleration.
The
Board may determine, at the time of granting an Italian Award, or thereafter,
that such Italian Award shall become fully exercisable as to all Shares subject
to such Italian Award in the event that a Change in Control occurs with respect
to the Company.
SECTION
7. LIMITATIONS
ON RIGHTS.
(a) Retention
Rights.
Neither
the Italy Sub-Plan nor any Italian Award granted under the Italy Sub-Plan shall
be deemed to give any individual a right to remain an employee, consultant
or
director of the Company and its controlling and subsidiary companies. The
Company and its controlling and subsidiary companies reserve the right to
terminate the Service of any person at any time, and for any reason, subject
to
applicable laws, the Company’s Certificate of
Incorporation and
Bylaws and a written employment agreement (if any).
(b) Shareholders’
Rights.
A
recipient of an Italian Award shall have no dividend rights, voting rights
or
other rights as a shareholder with respect to any Shares covered by his or
her
Italian Award prior to the issuance of a stock certificate for such Shares.
No
adjustment shall be made for cash dividends or other rights for which the record
date is prior to the date when such certificate is issued, except as expressly
provided in Section 11 of the Plan.
5
(c) Regulatory
Requirements.
Any
other provision of the Italy Sub-Plan notwithstanding, the obligation of the
Company to issue Shares under the Italy Sub-Plan shall be subject to all
applicable laws, rules and regulations and such approval by any regulatory
body
as may be required. The Company reserves the right to restrict, in whole or
in
part, the delivery of Shares pursuant to any Italian Award prior to the
satisfaction of all legal requirements relating to the issuance of such Shares,
to their registration, qualification or listing or to an exemption from
registration, qualification or listing.
SECTION
8. DURATION
AND AMENDMENTS.
(a) Term
of the Italy Sub-Plan.
The
Italy Sub-Plan shall become effective on the IPO Date, subject to the approval
of the Company’s shareholders. No Italian Stock Option shall be exercisable
until such shareholder approval is obtained. In the event that the shareholders
fail to approve the Italy Sub-Plan, any Italian Awards made shall be null and
void and no additional Italian Awards shall be made. The Italy Sub-Plan shall
terminate on September 30, 2009.
(b) Right
to Amend, Suspend or Terminate the Italy Sub-Plan.
The
Board may amend, suspend or terminate the Italy Sub-Plan at any time and for
any
reason. The suspension or termination of the Italy Sub-Plan, or any amendment
thereof, shall not affect any Italian Award previously granted under the Italy
Sub-Plan. No Italian Awards shall be granted under the Italy Sub-Plan after
the
Italy Sub-Plan’s suspension or termination. An amendment of the Italy Sub-Plan
shall be subject to the approval of the Company’s shareholders only to the
extent required by applicable laws, regulations or rules.
(c) Right
to Amend Italian Award
The
Board at any time, and from time to time, may amend the terms of any one or
more
Italian Awards; provided, however, that the rights under any Italian Award
shall
not be impaired by any such amendment unless (i) the Company requests the
consent of the recipient of such Italian Award and (ii) the recipient of such
Italian Award consents in writing.
SECTION
9. EXECUTION.
To
record
the adoption of the Italy Sub-Plan by the Board, the Company has caused its
duly
authorized officer to execute this Italy Sub-Plan on behalf of the
Company.
GENTIUM S.p.A. | ||
|
|
|
By:
|
/s/ Xxxxx
Xxxx Xxxxx
|
|
Title: | Chairperson, Chief Executive Officer & President |
6