EXHIBIT INDEX
NUMBER DESCRIPTION
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4.1* Certificate of Incorporation of Celsion
Corporation, as amended (compiled).
4.2 Certificate of Designations of Series C Junior
Participating Preferred Stock of Celsion
Corporation (filed as Exhibit 4.4 to the
Registrant's Registration Statement on Form S-3
(File No. 333-100638) and incorporated herein by
reference).
4.3* Bylaws of Celsion Corporation, as amended
(compiled).
4.4 Rights Agreement between Celsion Corporation and
American Stock Transfer & Trust Company dated as
of August 15, 2002 (filed as Exhibit 99.1 to the
Registrant's Current Report on Form 8-K filed
August 21, 2002).
4.5* Amendment to Rights Agreement adopted January 16,
2003.
4.6* Celsion Corporation 2004 Stock Incentive Plan.
5* Opinion of Anita J. Finkelstein, Esquire re:
Legality.
23.1* Consent of Anita J. Finkelstein, Esquire (included
in Exhibit 5).
23.2* Consent of Stegman & Company, Independent Public
Accountants to Celsion Corporation.
24* Powers of Attorney (included in Signature Page).
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* Filed herewith.
6
Exhibit 4.1
CERTIFICATE OF INCORPORATION
OF
CELSION (DELAWARE) CORPORATION
(Compiled and reflecting all amendments through May 26, 2004*)
The undersigned, a natural person of legal age, for the purpose of
organizing a corporation pursuant to the General Corporation Law of the State of
Delaware, hereby certifies that:
FIRST: The name of the Corporation is
CELSION (DELAWARE) CORPORATION
SECOND: The address, including street, number, city, and county, of the
registered office of the Corporation in the State of Delaware is c/o United
Corporate Services, Inc., 15 East North Street, in the City of Dover, County of
Kent, State of Delaware 19901, and the name of the registered agent at said
address is United Corporate Services, Inc.
THIRD: The nature of the business and the purposes to be conducted and
promoted by the Corporation are to conduct any lawful business, to promote any
lawful purpose, and to engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of the State of
Delaware.
FOURTH: The total number of shares of all classes of stock which the
Corporation shall have authority to issue is two hundred fifty million one
hundred thousand (250,100,000) shares, consisting of (i) two hundred fifty
million (250,000,000) shares of Common Stock, par value $0.01 per share ("Common
Stock"), and (ii) one hundred thousand (100,000) shares of Preferred Stock, par
value $0.01 per share ("Preferred Stock"). The Preferred Stock may be issued
from time to time in one or more series.
The Corporation shall from time to time in accordance with the laws of
the State of Delaware increase the authorized amount of its Common Stock if at
any time the number of shares of Common Stock remaining unissued and available
for issuance shall not be sufficient to permit the conversion of the Preferred
Stock into Common Stock in accordance with any terms governing such conversion
established by the Board of Directors under applicable law.
The Board of Directors is hereby authorized, subject to limitations
prescribed by law and the provisions of this Article FOURTH, by resolution to
provide for the issuance of Preferred Stock in one or more series, and to
establish from time to time the number of shares to be included in each such
series, and to fix the designation, powers, privileges, preferences and
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* Last Amendment made effective May 26, 2004.
relative participating, optional or other rights, if any, of the shares of each
such series and the qualifications, limitations or restrictions thereof.
The authority of the Board of Directors with respect to each series of
Preferred Stock shall include, but shall not be limited to, determination of the
following:
(a) The number of shares constituting that series (including an
increase or decrease in the number of shares of any such series (but not below
the number of shares in any series then outstanding) and the distinctive
designation of that series;
(b) Whether a dividend shall be payable on any series, and, if so,
the dividend rate on the shares in that series, whether dividends shall be in
cash or in kind, whether dividends shall be cumulative, and, if so, from which
date or dates, and the relative rights of priority, if any, of payment of
dividends on shares of that series;
(c) Whether that series shall have voting rights (including multiple
or fractional votes per share) in addition to the voting rights provided by law,
and, if so, the terms of such voting rights;
(d) Whether that series shall have conversion privileges, and, if so,
the terms and conditions of such privileges, including provision for adjustment
of the conversion rate in such events as the Board of Directors shall determine;
(e) Whether or not the shares of that series shall be redeemable,
and, if so, the terms and conditions of such redemption, including the date or
dates upon or after which they shall be redeemable, and the amount per share
payable in case of redemption, which amount may vary under different conditions
and at different redemption rates;
(f) Whether that series shall have a sinking fund or sinking funds
for the redemption or purchase of shares of that series, and, if so, the terms
and amount of such sinking fund or funds;
(g) The rights of the shares of that series in the event of voluntary
or involuntary liquidation, dissolution or winding up of the Corporation, and
the relative rights of priority, if any, of payment with respect to shares of
that series; and
(h) Any other relative rights, preferences and limitations of that
series.
No holder of shares of the Corporation of any class, now or hereafter
authorized, shall have any preferential or preemptive rights to subscribe for,
purchase or receive any shares of the Corporation of any class, now or hereafter
authorized, or any options or warrants for such shares, or any rights to
subscribe for, purchase or receive any securities convertible to or exchangeable
for such shares, which may at any time be issued, sold or offered for sale by
the Corporation, except in the case of any shares of Preferred Stock to which
such rights are specifically granted by any resolution or resolutions of the
Board of Directors adopted pursuant to this Article FOURTH.
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FIFTH: The name and address of the incorporator are as follows:
NAME ADDRESS
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Michael Barr 10 Bank Street
White Plains, NY 10606
SIXTH: The Corporation is to have perpetual existence.
SEVENTH: Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
Section 291 of Title 8 of the Delaware Code or on the application of trustees in
dissolution of any receiver or receivers appointed for this Corporation under
Section 279 of Title 8 of the Delaware Code order a meeting of the creditors or
class of creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, to be summoned in such manner as the said court
directs. If a majority in number representing three-fourths in value of the
indebtedness held by such creditors or class of creditors, and/or three-fourths
of the shares held by the stockholders or class of stockholders of this
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this Corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this Corporation, as the case may be,
and also on the Corporation.
EIGHTH:
(a) The management of the business and conduct of the affairs of the
Corporation shall be vested in its Board of Directors. The number of directors
which shall constitute the whole Board of Directors shall be fixed by, or in the
manner provided in, the By-Laws. The Board of Directors shall be classified and
divided into three classes, designated as Class I, Class II and Class III. The
terms of office of the initial Class I directors shall expire at the first
annual meeting of the stockholders of the Corporation after the election of such
initial Class I directors, the terms of office of the initial Class II directors
shall expire at the second annual meeting of the stockholders of the Corporation
after the election of such initial Class II directors and the terms of office of
the initial Class III directors shall expire at the third annual meeting after
the election of such initial Class III directors. At each annual meeting
following such classification and division of the members of the Board of
Directors, a number of directors equal to the number of directorships in the
class the term of which expires at the time of such meeting shall be elected to
hold office until the third succeeding annual meeting of the stockholders of the
Corporation. Each director shall hold office for the class term for which he is
elected and until his or her successor shall be elected and qualified, or until
his or her earlier resignation, removal or death. Any director may be removed
for cause (but not without cause) from office at any time by the
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vote or written consent of the stockholders. In case of any increase or
decrease, from time to time, in the number of directors constituting the whole
Board of Directors, the number of directors in each class shall be determined by
action of the Board of Directors. A director elected by the remainder of the
Board of Directors to fill a vacancy shall hold office for the remaining term of
the predecessor director and until his or her successor is elected and has
qualified, or until his or her earlier resignation, removal or death.
(b) The Board of Directors shall have the power without the assent or
vote of the stockholders:
(1) To make, alter, amend, change, add to or repeal the
By-Laws of the Corporation; to fix and vary the amount to be reserved for any
proper purpose; to authorize and cause to be executed mortgages and liens upon
all or any part of the property of the Corporation; to determine the use and
disposition of any surplus or net profits; and to fix the times for the
declaration and payment of dividends.
(2) To determine from time to time whether, and at what times
and places, and under what conditions the accounts and books of the Corporation
(other than the stock ledger) or any of them, shall be open to the inspection of
the stockholders.
(c) In addition to the powers and authorities hereinbefore or by
statute expressly conferred upon them, the directors are hereby empowered to
exercise all such powers and do all such acts and things as may be exercised or
done by the Corporation; subject, nevertheless, to the provisions of the General
Corporation Law of the State of Delaware, of this Certificate, and to any
By-Laws from time to time made by the stockholders; provided, however, that no
By-Laws so made shall invalidate any prior act of the directors which would have
been valid if such By-Laws had not been made.
NINTH:
(a) The personal liability of the directors of the Corporation is
hereby eliminated to the fullest extent permitted by the provisions of the
General Corporation Law of the State of Delaware, as the same may be amended and
supplemented from time to time, and, in accordance therewith, no director of the
Corporation shall be personally liable to the Corporation or its stockholders
for monetary damages for breach of fiduciary duty as a director.
(b) The Corporation may indemnify to the fullest extent permitted by
law any person made or threatened to be made a party to an action or proceeding,
whether criminal, civil, administrative or investigative, by reason of the fact
that he, his testator or intestate is or was a director, officer or employee of
the Corporation or any predecessor or subsidiary of the Corporation or serves or
served at any other enterprise as a director, officer or employee at the request
of the Corporation or any predecessor or subsidiary of the Corporation.
(c) Neither any amendment nor repeal of this Article NINTH, nor the
adoption of any provision of the Corporation's Certificate of Incorporation
inconsistent with this Article NINTH, shall eliminate or reduce the effect of
this Article NINTH with respect to any matter occurring,
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or any action or proceeding accruing or arising or that, but for this Article
NINTH, would accrue or arise, prior to such amendment, repeal, or adoption of an
inconsistent provision.
TENTH: From time to time any of the provisions of the Corporation's
Certificate of Incorporation may be amended, altered, or repealed, and other
provisions authorized by the laws of the State of Delaware at the time in force
may be added or inserted as prescribed by said laws, and all rights at any time
conferred upon the stockholders of the Corporation by this Certificate of
Incorporation are granted subject to the provisions of this Article TENTH.
IN WITNESS WHEREOF, the undersigned hereby executes this document and
affirms that the facts set forth herein are true under the penalties of perjury
this 17th day of May, 2000.
/s/ Michael Barr
Incorporator
Exhibit 4.3
BYLAWS
OF
CELSION (DELAWARE) CORPORATION
(Compiled and reflecting all amendments through May 25, 2004*)
ARTICLE I
CORPORATE OFFICES
1.1 REGISTERED OFFICE. The registered office of the corporation shall
be fixed in the Certificate of Incorporation of the corporation.
1.2 OTHER OFFICES. The board of directors may at any time establish
the principal office and any branch or subordinate offices of the corporation at
any place or places deemed advisable.
ARTICLE II
MEETINGS OF STOCKHOLDERS
2.1 PLACE OF MEETINGS. Meetings of stockholders shall be held at any
place within or outside the State of Delaware designated by the board of
directors.
2.2 ANNUAL MEETING.
(a) The annual meeting of stockholders shall be held each year on a
date and at a time designated by the board of directors. At the meeting,
directors shall be elected, and any other proper business may be transacted.
(b) At an annual meeting of the stockholders, only such business
shall be conducted as shall have been properly brought before the meeting. To be
properly brought before an annual meeting, business must be: (A) specified in
the notice of meeting (or any supplement thereto) given by or at the direction
of the board of directors, (B) otherwise properly brought before the meeting by
or at the direction of the board of directors, or (C) otherwise properly brought
before the meeting by a stockholder. For business to be properly brought before
an annual meeting by a stockholder, the stockholder must have given timely
notice thereof in writing to the secretary of the corporation. To be timely, a
stockholder's notice must be delivered to or mailed and received at the
principal executive offices of the corporation not less than one hundred twenty
(120) calendar days in advance of the date specified in the corporation's proxy
statement released to stockholders in connection with the previous year's annual
meeting of stockholders; provided, however, that in the event that no annual
meeting was held in the previous year or the date of the annual meeting has been
changed by more than thirty (30) days from the date contemplated at the time of
the previous year's proxy statement, notice by the stockholder to be timely must
be so
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* Last Amendment made effective May 25, 2004.
received not later than the close of business on the later of one hundred twenty
(120) calendar days in advance of such annual meeting or ten (10) calendar days
following the date on which public announcement of the date of the meeting is
first made. A stockholder's notice to the secretary shall set forth as to each
matter the stockholder proposes to bring before the annual meeting: (i) a brief
description of the business desired to be brought before the annual meeting and
the reasons for conducting such business at the annual meeting, (ii) the name
and address, as they appear on the corporation's books, of the stockholder
proposing such business, (iii) the class and number of shares of the corporation
which are beneficially owned by the stockholder, (iv) any material interest of
the stockholder in such business, and (v) any other information that is required
to be provided by the stockholder pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), in his capacity as
a proponent to a stockholder proposal. Notwithstanding the foregoing, in order
to include information with respect to a stockholder proposal in the proxy
statement and form of proxy for a stockholder's meeting, stockholders must
provide notice as required by the regulations promulgated under the 1934 Act.
Notwithstanding anything in these Bylaws to the contrary, no business shall be
conducted at any annual meeting except in accordance with the procedures set
forth in this paragraph (b), the chairman of the annual meeting shall, if the
facts warrant, determine and declare at the meeting that business was not
properly brought before the meeting in accordance with the provisions of this
paragraph (b), and, if he should so determine, he shall declare at the meeting
that any such business not properly brought before the meeting shall not be
transacted.
(c) Only persons who are nominated in accordance with the procedures
set forth in this paragraph (c) shall be eligible for election as directors.
Nominations of persons for election to the board of directors of the corporation
may be made at a meeting of stockholders by or at the direction of the board of
directors or by any stockholder of the corporation entitled to vote in the
election of directors at the meeting who complies with the notice procedures set
forth in this paragraph (c). Such nominations, other than those made by or at
the direction of the board of directors, shall be made pursuant to timely notice
in writing to the secretary of the corporation in accordance with the provisions
of paragraph (b) of this Section 2.2. Such stockholder's notice shall set forth
(i) as to each person, if any, whom the stockholder proposes to nominate for
election or re-election as a director: (A) the name, age, business address and
residence address of such person, (B) the principal occupation or employment of
such person, (C) the class and number of shares of the corporation which are
beneficially owned by such person, (D) a description of all arrangements or
understandings between the stockholder and each nominee and any other person or
persons (naming such person or persons) pursuant to which the nominations are to
be made by the stockholder, and (E) any other information relating to such
person that is required to be disclosed in solicitations of proxies for
elections of directors, or is otherwise required, in each case pursuant to
Regulation 14A under the 1934 Act (including, without limitation, such person's
written consent to being named in the proxy statement, if any, as a nominee and
to serving as a director if elected); and (ii) as to such stockholder giving
notice, the information required to be provided pursuant to paragraph (b) of
this Section 2.2. At the request of the board of directors, any person nominated
by a stockholder for election as a director shall furnish to the secretary of
the corporation that information required to be set forth in the stockholder's
notice of nomination which pertains to the nominee. No person shall be eligible
for election as a director of the corporation unless nominated in accordance
with the procedures set forth in this paragraph (c). The chairman of the meeting
shall, if the facts warrants, determine
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and declare at the meeting that a nomination was not made in accordance with the
procedures prescribed by these Bylaws, and if he should so determine, he shall
so declare at the meeting, and the defective nomination shall be disregarded.
2.3 SPECIAL MEETING. A special meeting of the stockholders may be
called at any time by the board of directors, the president or the chairman, but
such special meeting may not be called by any other person or persons. Only such
business shall be considered at a special meeting of stockholders as shall have
been stated in the notice for such meeting.
2.4 ORGANIZATION. Meetings of stockholders shall be presided over by
the president, the chairman or, in his or her absence, by a chairman designated
by the board of directors, or in the absence of such designation, by a chairman
chosen at the meeting by the vote of a majority in interest of the stockholders
present in person or represented by proxy and entitled to vote thereat. The
secretary, or in his or her absence an assistant secretary, or in the absence of
the secretary and any assistant secretary, a person whom the chairman of the
meeting shall appoint, shall act as secretary of the meeting and keep a record
of the proceedings thereof.
The board of directors of the corporation shall be entitled to make
such rules or regulations for the conduct of meetings of stockholders as it
shall deem necessary, appropriate or convenient. Subject to such rules and
regulations of the board of directors, if any, the chairman of the meeting shall
have the right and authority to prescribe such rules, regulations and procedures
and to do all such acts as, in the judgment of such chairman, are necessary,
appropriate or convenient for the proper conduct of the meeting, including,
without limitation, establishing an agenda or order of business, limitations on
the time allotted to questions or comments by participants and regulation of the
opening and closing of the polls for balloting. Unless determined by the board
of directors or the chairman of the meeting, meetings of stockholders shall not
be required to be held in accordance with rules of parliamentary procedure.
2.5 NOTICE OF STOCKHOLDERS' MEETINGS. All notices of meetings of
stockholders shall be sent or otherwise given in accordance with Section 2.6 of
these Bylaws not less than ten (10) nor more than sixty (60) days before the
date of the meeting. The notice shall specify the place, date, and hour of the
meeting and (i) in the case of a special meeting, the general nature of the
business to be transacted or (ii) in the case of the annual meeting, those
matters which the board of directors, at the time of giving the notice, intends
to present for action by the stockholders (but any proper matter may be
presented at the meeting for such action). The notice of any meeting at which
directors are to be elected shall include the name of any nominee or nominees
who, at the time of the notice, the board intends to present for election.
2.6 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE. Notice of any meeting
of stockholders shall be given either personally or by mail, telecopy, telegram
or other electronic or wireless means. Notices not personally delivered shall be
sent charges prepaid and shall be addressed to the stockholder at the address of
that stockholder appearing on the books of the corporation or given by the
stockholder to the corporation for the purpose of notice. Notice shall be deemed
to have been given at the time when delivered personally or deposited in the
mail or sent by telecopy, telegram or other electronic or wireless means.
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An affidavit of the mailing or other means of giving any notice of any
stockholders' meeting, executed by the secretary, assistant secretary or any
transfer agent of the corporation giving the notice, shall be prima facie
evidence of the giving of such notice or report.
2.7 QUORUM. The holders of a majority in voting power of the stock
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of the
stockholders for the transaction of business except as otherwise provided by
statute or by the Certificate of Incorporation. If, however, such quorum is not
present or represented at any meeting of the stockholders, then either (i) the
chairman of the meeting or (ii) the stockholders by the vote of the holders of a
majority of the stock, present in person or represented by proxy shall have
power to adjourn the meeting.
When a quorum is present at any meeting, the vote of the holders of a
majority of the stock having voting power present in person or represented by
proxy shall decide any question brought before such meeting, unless the question
is one upon which, by express provision of the laws of the State of Delaware or
of the Certificate of Incorporation or these Bylaws, a vote of a greater number
or voting by classes is required, in which case such express provision shall
govern and control the decision of the question.
If a quorum be initially present, the stockholders may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum, if any action taken is approved by a
majority of the stockholders initially constituting the quorum.
2.8 ADJOURNED MEETING; NOTICE. Any stockholders' meeting, annual or
special, whether or not a quorum is present, may be adjourned from time to time
by the vote of the majority of the voting power of the shares represented at
that meeting, either in person or by proxy. In the absence of a quorum, no other
business may be transacted at that meeting except as provided in Section 2.7 of
these Bylaws.
When any meeting of stockholders, either annual or special, is
adjourned to another time or place, notice need not be given of the adjourned
meeting if the time and place are announced at the meeting at which the
adjournment is taken. However, if a new record date for the adjourned meeting is
fixed or if the adjournment is for more than thirty (30) days from the date set
for the original meeting, then notice of the adjourned meeting shall be given.
Notice of any such adjourned meeting shall be given to each stockholder of
record entitled to vote at the adjourned meeting in accordance with the
provisions of Sections 2.5 and 2.6 of these Bylaws. At any adjourned meeting the
corporation may transact any business which might have been transacted at the
original meeting.
2.9 VOTING. The stockholders entitled to vote at any meeting of
stockholders shall be determined in accordance with the provisions of Section
2.12 of these Bylaws, subject to applicable provisions of the General
Corporation Law of Delaware.
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Except as may be otherwise provided in the Certificate of
Incorporation, by instruments setting forth the voting rights of specific
classes or series of stocks, by these Bylaws or by applicable law, each
stockholder shall be entitled to one vote for each share of capital stock held
by such stockholder.
Any stockholder entitled to vote on any matter may vote part of the
shares in favor of the proposal and refrain from voting the remaining shares or,
except when the matter is the election of directors, may vote them against the
proposal; but if the stockholder fails to specify the number of shares which the
stockholder is voting affirmatively, it will be conclusively presumed that the
stockholder's approving vote is with respect to all shares which the stockholder
is entitled to vote.
2.10 VALIDATION OF MEETINGS; WAIVER OF NOTICE; CONSENT. The
transactions of any meeting of stockholders, either annual or special, however
called and noticed, and wherever held, shall be as valid as though they had been
taken at a meeting duly held after regular call and notice, if a quorum be
present either in person or by proxy.
Attendance by a person at a meeting shall constitute a waiver of notice
of and presence at that meeting, except when the person objects at the beginning
of the meeting to the transaction of any business because the meeting is not
lawfully called or convened.
2.11 ACTION BY WRITTEN CONSENT. Subject to the rights of the holders of
the shares of any series of Preferred Stock or any other class of stock or
series thereof having a preference over the Common Stock as dividend or upon
liquidation, any action required or permitted to be taken by the stockholders of
the corporation must be effected at a duly called annual or special meeting of
stockholders of the corporation and may not be effected by any consent in
writing by such stockholders.
2.12 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS. For
purposes of determining the stockholders entitled to notice of any meeting or to
vote thereat, the board of directors may fix, in advance, a record date, which
shall not be more than sixty (60) days nor less than ten (10) days before the
date of any such meeting, and in such event only stockholders of record on the
date so fixed are entitled to notice and to vote, notwithstanding any transfer
of any shares on the books of the corporation after the record date, except as
otherwise provided in the Certificate of Incorporation, by these Bylaws, by
agreement or by applicable law.
If the board of directors does not so fix a record date, the record
date for determining stockholders entitled to notice of or to vote at a meeting
of stockholders shall be at the close of business on the business day next
preceding the day on which notice is given, or, if notice is waived, at the
close of business on the business day next preceding the day on which the
meeting is held.
A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting
unless the board of directors fixes a new record date for the adjourned meeting,
but the board of directors shall fix a new record date
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if the meeting is adjourned for more than thirty (30) days from the date set for
the original meeting.
The record date for any other purpose shall be as provided in Section
8.1 of these Bylaws.
2.13 PROXIES. Every person entitled to vote for directors, or on any
other matter, shall have the right to do so either in person or by one or more
agents authorized by a written proxy, which may be in the form of a telegram,
cablegram, or other means of electronic transmission, signed by the person and
filed with the secretary of the corporation, but no such proxy shall be voted or
acted upon after three (3) years from its date, unless the proxy provides for a
longer period. A proxy shall be deemed signed if the stockholder's name is
placed on the proxy (whether by manual signature, typewriting, telegraphic
transmission or otherwise) by the stockholder or the stockholder's
attorney-in-fact. A duly executed proxy shall be irrevocable if it states that
it is irrevocable and if, and only as long as, it is coupled with an interest
sufficient in law to support an irrevocable power. A stockholder may revoke any
proxy which is not irrevocable by attending the meeting and voting in person or
by filing an instrument in writing revoking the proxy or by filing another duly
executed proxy bearing a later date with the secretary of the corporation.
A proxy is not revoked by the death or incapacity of the maker unless,
before the vote is counted, written notice of such death or incapacity is
received by the corporation.
2.14 INSPECTORS OF ELECTION. In conjunction with any meeting of
stockholders, either the corporation's chief executive officer or chief
financial officer, or either of their equivalents, or any person or persons
designated by either of them, shall appoint an inspector or inspectors of
election to act at the meeting or its adjournment and to determine such matters
as quorum, validity of proxies and ballots, voting eligibility, and the
tabulation of votes. The number of inspectors shall be either one (1) or three
(3). If any person appointed as inspector fails to appear or fails or refuses to
act, then the chairman of the meeting may, and upon the request of any
stockholder or a stockholder's proxy shall, appoint a person to fill that
vacancy.
The inspectors of election shall perform their duties impartially, in
good faith, to the best of their ability and as expeditiously as is practical.
If there are three (3) inspectors of election, the decision, act or certificate
of a majority is effective in all respects as the decision, act or certificate
of all. Any report or certificate made by the inspectors of election is prima
facie evidence of the facts stated therein.
ARTICLE III
DIRECTORS
3.1 POWERS. Subject to the provisions of the General Corporation Law of
Delaware and to any limitations in the Certificate of Incorporation or these
Bylaws relating to action required to be approved by the stockholders or by the
outstanding shares, the business and affairs of the corporation shall be managed
and all corporate powers shall be exercised by or under the direction of the
board of directors.
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3.2 NUMBER AND CLASSIFICATION. The authorized number of directors shall
be not less than three (3) nor more than nine (9). Within such limits, the
number of directors shall be initially fixed at seven (7), which number may be
changed by resolution of the board of directors. An indefinite number of
directors may be fixed, or the definite number may be changed, by a duly adopted
amendment to the Certificate of Incorporation or by an amendment to this by-law
duly adopted by the stockholders or the board of directors.
No reduction of the authorized number of directors shall have the
effect of removing any director before that director's term of office expires.
If, for any reason, the directors shall not have been elected at an annual
meeting, they may be elected as soon thereafter as convenient at a special
meeting of the stockholders called for that purpose in the manner provided in
these By-Laws.
The board of directors shall be divided into three classes, designated
as Class I, Class II and Class III, with each class to be elected for three-year
terms on a staggered basis, except with respect to the initial terms of the
classes, all as further set forth in Section 3.3 below.
3.3 ELECTION AND TERM OF OFFICE OF DIRECTORS. The terms of office of
the initial Class I directors shall expire at the first annual meeting of the
stockholders of the Corporation after the election of such initial Class I
directors, the terms of officer of the initial Class II directors shall expire
at the second annual meeting of the stockholders of the Corporation after the
election of such initial Class II directors and the terms of office of the
initial Class III directors shall expire at the third annual meeting after the
election of such initial Class III directors. At each annual meeting following
such classification and division of the members of the Board of Directors, a
number of directors equal to the number of directorships in the class the term
of which expires at the time of such meeting shall be elected to hold office
until the third succeeding annual meeting of the stockholders of the
Corporation. Each director shall hold office for the class term for which he is
elected and until his or her successor shall be elected and qualified, or until
his or her earlier resignation, removal or death. Directors need not be
stockholders unless so required by the Certificate of Incorporation or by these
By-Laws.
3.4 RESIGNATIONS AND VACANCIES. Any director may resign on giving
written notice to the president, the chairman, the secretary or the board of
directors, unless the notice specifies a later time for that resignation to
become effective.
Unless otherwise provided in the Certificate of Incorporation or these
By-Laws:
(a) Vacancies and newly created directorships resulting from any
increase in the authorized number of directors may be filled by a majority of
the directors then in office, although less than a quorum, or by a sole
remaining director. A director elected by the remainder of the Board of
Directors to fill a vacancy shall hold office for the remaining term of the
predecessor director and until his or her successor is elected and has
qualified, or until his or her earlier resignation, removal or death.
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(b) Whenever the holders of any class or classes of stock or series
thereof are entitled to elect one or more directors by the provisions of the
Certificate of Incorporation, vacancies and newly created directorships of such
class or classes or series may be filled by a majority of the directors elected
by such class or classes or series thereof then in office, or by a sole
remaining director so elected.
If at any time, by reason of death or resignation or other cause, the
corporation should have no directors in office, then any officer or any
stockholder or an executor, administrator, trustee or guardian of a stockholder,
or other fiduciary entrusted with like responsibility for the person or estate
of a stockholder, may call a special meeting of stockholders in accordance with
the provisions of the Certificate of Incorporation or these Bylaws, or may apply
to the Court of Chancery for a decree summarily ordering an election as provided
in Section 211 of the General Corporation Law of Delaware.
3.5 REMOVAL. Any director may be removed for cause (but not without
cause) from office at any time by the vote or written consent of the
stockholders
3.6 PLACE OF MEETINGS; MEETINGS BY TELEPHONE. Regular meetings of the
board of directors may be held at any place within or outside the State of
Delaware that has been designated from time to time by resolution of the board
of directors. In the absence of such a designation, regular meetings shall be
held at the principal executive office of the corporation. Special meetings of
the board of directors may be held at any place within or outside the State of
Delaware that has been designated in the notice of the meeting or, if not stated
in the notice or if there is no notice, at the principal executive office of the
corporation.
Any meeting, regular or special, may be held by conference telephone or
similar communication equipment, so long as all directors participating in the
meeting can hear one another; and all such directors shall be deemed to be
present in person at the meeting.
3.7 REGULAR MEETINGS. Regular meetings of the board of directors may be
held without notice if the times of such meetings are fixed by the board of
directors.
3.8 SPECIAL MEETINGS; NOTICE. Special meetings of the board of
directors for any purpose or purposes may be called at any time by the
president, the chairman, the secretary or by any two (2) or more of the
directors.
Notice of the time and place of special meetings shall be delivered
personally or by telephone to each director or sent by mail, telecopy, telegram
or other electronic or wireless means, charges prepaid, addressed to each
director at that director's address as it is shown on the records of the
corporation or if the address is not readily ascertainable, notice shall be
addressed to the director at the city or place in which the meetings of
directors are regularly held. If the notice is mailed, it shall be deposited in
the United States mail at least three (3) days before the time of the holding of
the meeting. If the notice is delivered personally or by telephone, telecopy,
telegram or other electronic or wireless means, it shall be delivered personally
or by telephone or other electronic or wireless means at least twenty-four (24)
hours before the time of the holding of the meeting. Any oral notice given
personally or by telephone may be
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communicated either to the director or to a person at the office of the director
who the person giving the notice has reason to believe will promptly communicate
it to the director. A notice of special meeting need not state the purpose of
such meeting, and, unless indicated in the notice thereof, any and all business
may be transacted at a special meeting.
3.9 QUORUM. A majority of the authorized number of directors shall
constitute a quorum for the transaction of business, except to fill vacancies in
the board of directors as provided in Section 3.4 and to adjourn as provided in
Section 3.11 of these Bylaws. Every act or decision done or made by a majority
of the directors present at a duly held meeting at which a quorum is present
shall be regarded as the act of the board of directors, subject to the
provisions of the Certificate of Incorporation and applicable law.
A meeting at which a quorum is initially present may continue to
transact business notwithstanding the withdrawal of directors, if any action
taken is approved by at least a majority of the required quorum for that
meeting.
3.10 WAIVER OF NOTICE. Notice of a meeting need not be given to any
director (i) who signs a waiver of notice or a consent to holding the meeting or
an approval of the minutes thereof, whether before or after the meeting, or (ii)
who attends the meeting without protesting, prior thereto or at its
commencement, the lack of notice to such directors. The transactions of any
meeting of the board, however called and noticed or wherever held, are as valid
as though had at a meeting duly held after regular call and notice if a quorum
is present and if, either before or after the meeting, each of the directors not
present signs a written waiver of notice. All such waivers shall be filed with
the corporate records or made part of the minutes of the meeting. A waiver of
notice need not specify the purpose of any regular or special meeting of the
board of directors.
3.11 ADJOURNMENT. A majority of the directors present, whether or not
constituting a quorum, may adjourn any meeting to another time and place.
3.12 NOTICE OF ADJOURNMENT. Notice of the time and place of holding an
adjourned meeting need not be given if announced unless the meeting is adjourned
for more than twenty-four (24) hours. If the meeting is adjourned for more than
twenty-four (24) hours, then notice of the time and place of the adjourned
meeting shall be given.
3.13 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING. Any action
required or permitted to be taken by the board of directors may be taken without
a meeting, provided that all members of the board of directors individually or
collectively consent in writing to that action. Such action by written consent
shall have the same force and effect as a unanimous vote of the board of
directors. Such written consent and any counterparts thereof shall be filed with
the minutes of the proceedings of the board.
3.14 ORGANIZATION. Meetings of the board of directors shall be presided
over by the president, the chairman, or, in his or her absence, by a president
pro tem chosen by a majority of the directors present. The secretary shall act
as secretary of the meeting, but in his or her absence the chairman of the
meeting may appoint any person to act as secretary of the meeting.
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3.15 FEES AND COMPENSATION OF DIRECTORS. Directors and members of
committees may receive such compensation, if any, for their services and such
reimbursement of expenses as may be fixed or determined by resolution of the
board of directors. This Section 3.15 shall not be construed to preclude any
director from serving the corporation in any other capacity as an officer,
agent, employee or otherwise and receiving compensation for those services.
ARTICLE IV
COMMITTEES
4.1 COMMITTEES OF DIRECTORS. The board of directors may designate one
(1) or more committees, each consisting of two or more directors, to serve at
the pleasure of the board of directors. The board of directors may designate one
(1) or more directors as alternate members of any committee, who may replace any
absent member at any meeting of the committee. The purposes and authority of any
committee shall be as provided in the resolution of the board, but no such
committee shall have power or authority by itself to (i) approve or adopt or
recommend to the stockholders any action or matter that requires the approval of
the stockholders or (ii) adopt, amend or repeal any Bylaw of the corporation.
4.2 MEETINGS AND ACTION OF COMMITTEES. To the extent feasible, meetings
and actions of committees shall be governed by, and held and taken in accordance
with, the provisions of Article III of these Bylaws, Section 3.6 (place of
meetings), Section 3.7 (regular meetings), Section 3.8 (special meetings and
notice), Section 3.9 (quorum), Section 3.10 (waiver of notice), Section 3.11
(adjournment), Section 3.12 (notice of adjournment), and Section 3.13 (action
without meeting), with such changes in the context of those Bylaws as are
necessary to substitute the committee and its members for the board of directors
and its members, provided, however, that the board of directors may adopt rules
for the government of any committee not inconsistent with the provisions of
these Bylaws.
ARTICLE V
OFFICERS
5.1 OFFICERS. The officers of this corporation shall consist of a
president, a chief scientific officer, one or more vice presidents, a secretary,
a treasurer, and such other officers as may be determined from time to time by
the board of directors, all of whom shall be chosen in such manner and hold
their offices for such terms as the board of directors may prescribe. Any two or
more of such offices may be held by the same person. The board of directors may
designate one or more vice presidents as executive vice presidents or senior
vice presidents. The board of directors may from time to time designate the
president or any other officer as the chief operating officer of the
corporation. The board of directors may designate a chairman of the board who,
in the discretion of the board of directors, may be an executive officer of the
this corporation.
5.2 TERMS OF OFFICE AND COMPENSATION. The term of office and salary of
each of said officers and the manner and time of the payment of such salaries
shall be fixed and
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determined by the board of directors and may be altered by said board from time
to time at its pleasure, subject to the rights, if any, of said officers under
any contract of employment.
5.3 REMOVAL; RESIGNATION OF OFFICERS AND VACANCIES. Any officer of the
corporation may be removed at the pleasure of the board of directors at any
meeting or by vote of stockholders entitled to exercise the majority of voting
power of the corporation at any meeting or at the pleasure of any officer who
may be granted such power by a resolution of the board of directors. Any officer
may resign at any time upon written notice to the corporation without prejudice
to the rights, if any, of the corporation under any contract to which the
officer is a party. If any vacancy occurs in any office of the corporation, the
board of directors may elect a successor to fill such vacancy for the remainder
of the unexpired term and until a successor is duly chosen and qualified.
5.4 PRESIDENT. The president shall be the chief executive officer of
the corporation and shall have general direction of the affairs of the
corporation and general supervision over its several officers, subject, however,
to the control of the board of the board of directors. The president shall at
each annual meeting and from time to time report to the stockholders and the
board of directors all matters within his knowledge which the interest of the
corporation may require to be brought to their notice, may sign with the
treasurer or an assistant treasurer, if any, or the secretary or an assistant
secretary, if any, any or all certificates of stock of the corporation. The
president shall preside at all meetings of the stockholders and at all meetings
of the board of directors, may sign and execute in the name of the corporation
all contracts or other instruments authorized by the board of directors, except
in cases where the signing and execution thereof shall be expressly delegated or
permitted by the board of directors or by these Bylaws to some other officer or
agent of the corporation, and in general shall perform such duties and, subject
to the other provisions of these Bylaws and to the control of the board of
directors, have such powers incident to the office of president and perform such
other duties and have such other powers as from time to time may be assigned to
him by the board of directors.
5.5 CHAIRMAN OF THE BOARD. The chairman shall be a senior executive
officer of the corporation and shall exercise and perform such powers and duties
as may from time to time be assigned to him by the board of directors or as may
be prescribed by these Bylaws. The chairman shall report to the board of
directors.
5.6 UNAVAILABILITY OF PRESIDENT. In case of the absence, disability or
death of the president, the chairman or, if he is not available, a vice
president, shall exercise all the powers and perform all the duties of the
president. If there is more than one elected vice president, the order in which
the elected vice presidents shall succeed to the powers and duties of the
president shall be as fixed by the board of directors.
5.7 SECRETARY. The powers and duties of the secretary are:
(i) To keep a book of minutes at the principal office of the
corporation, or such other place as the board of directors may order, of all
meetings of its directors and stockholders with the time and place of holding,
whether regular or special, and, if special, how authorized, the
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notice thereof given, the names of those present at directors' meetings, the
number of shares present or represented at stockholders' meetings and the
proceedings thereof.
(ii) To keep the seal of the corporation and affix the same to all
instruments which may require it.
(iii) To keep or cause to be kept at the principal office of the
corporation, or at the office of the transfer agent or agents, a share register,
or duplicate share registers, showing the names of the stockholders and their
addresses, the number of and classes of shares, and the number and date of
cancellation of every certificate surrendered for cancellation.
(iv) To keep a supply of certificates for shares of the corporation,
to fill in all certificates issued, and to make a proper record of each such
issuance; provided, that so long as the corporation shall have one or more duly
appointed and acting transfer agents of the shares, or any class or series of
shares, of the corporation, such duties with respect to such shares shall be
performed by such transfer agent or transfer agents.
(v) To transfer upon the share books of the corporation any and all
shares of the corporation; provided, that so long as the corporation shall have
one or more duly appointed and acting transfer agents of the shares, or any
class or series of shares, of the corporation, such duties with respect to such
shares shall be performed by such transfer agent or transfer agents, and the
method of transfer of each certificate shall be subject to the reasonable
regulations of the transfer agent to which the certificate is presented for
transfer, and also, if the corporation then has one or more duly appointed and
acting registrars, to the reasonable regulations of the registrar to which the
new certificate is presented for registration; and provided, further that no
certificate for shares of stock shall be issued or delivered or, if issued or
delivered, shall have any validity whatsoever until and unless it has been
signed or authenticated in the manner provided in Section 8.5 hereof.
(vi) To make service and publication of all notices that may be
necessary or proper, and without command or direction from anyone. In case of
the absence, disability, refusal, or neglect of the secretary to make service or
publication of any notices, then such notices may be served and/or published by
the president or a vice president, or by any person thereunto authorized by
either of them or by the board of directors or by the holders of a majority of
the outstanding shares of the corporation.
(vii) Generally to do and perform all such duties as pertain to the
office of secretary and as may be required by the board of directors.
ARTICLE VI
INDEMNIFICATION OF DIRECTORS,
OFFICERS, EMPLOYEES AND OTHER AGENTS
6.1 INDEMNIFICATION OF DIRECTORS AND OFFICERS. The corporation shall,
to the maximum extent and in the manner permitted by the General Corporation Law
of Delaware, indemnify each of its directors and officers against expenses
(including attorneys' fees),
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judgments, fines, settlements and other amounts actually and reasonably incurred
in connection with any proceeding, arising by reason of the fact that such
person is or was an agent of the corporation; provided, however, that the
corporation may modify the extent of such indemnification by individual
contracts with its directors and executive officers and, provided, further, that
the corporation shall not be required to indemnify any director or officer in
connection with any proceeding (or part thereof) initiated by such person unless
(i) such indemnification is expressly required to be made by law, (ii) the
proceeding was authorized in advance by the board of directors of the
corporation, (iii) such indemnification is provided by the corporation, in its
sole discretion, pursuant to the powers vested in the corporation under the
General Corporation Law of Delaware or (iv) such indemnification is required to
be made pursuant to an individual contract. For purposes of this Section 6.1, a
"director" or "officer" of the corporation includes any person (i) who is or was
a director or officer of the corporation, (ii) who is or was serving at the
request of the corporation as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise, or (iii) who was a
director or officer of a corporation which was a predecessor corporation of the
corporation or of another enterprise at the request of such predecessor
corporation.
6.2 INDEMNIFICATION OF OTHERS. The corporation shall have the power, to
the maximum extent and in the manner permitted by the General Corporation Law of
Delaware, to indemnify each of its employees and agents (other than directors
and officers) against expenses (including attorneys' fees), judgments, fines,
settlements and other amounts actually and reasonably incurred in connection
with any proceeding, arising by reason of the fact that such person is or was an
agent of the corporation. For purposes of this Section 6.2, an "employee" or
"agent" of the corporation (other than a director or officer) includes any
person (i) who is or was an employee or agent of the corporation, (ii) who is or
was serving at the request of the corporation as an employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, or (iii) who
was an employee or agent of a corporation which was a predecessor corporation of
the corporation or of another enterprise at the request of such predecessor
corporation.
6.3 INSURANCE. The corporation may purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him or
her and incurred by him or her in any such capacity, or arising out of his or
her status as such, whether or not the corporation would have the power to
indemnify him or her against such liability under the provisions of the General
Corporation Law of Delaware.
6.4 EXPENSES. The corporation shall advance to any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he or she is or was a director or
officer of the corporation, or is or was serving at the request of the
corporation as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise, prior to the final disposition of the
proceeding, promptly following request therefor, all expenses incurred by any
director or officer in connection with such proceeding, upon receipt of an
undertaking by or on behalf of such person to repay said amounts if it should be
determined
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ultimately that such person is not entitled to be indemnified under
this Bylaw or otherwise; provided, however, that the corporation shall not be
required to advance expenses to any director or officer in connection with any
proceeding (or part thereof) initiated by such person unless the proceeding was
authorized in advance by the board of directors of the corporation.
Notwithstanding the foregoing, unless otherwise determined pursuant to
Section 6.5, no advance shall be made by the corporation to an officer of the
corporation (except by reason of the fact that such officer is or was a director
of the corporation in which event this paragraph shall not apply) in any action,
suit or proceeding, whether civil, criminal, administrative or investigative, if
a determination is reasonably and promptly made (i) by the board of directors by
a majority vote of a quorum consisting of directors who were not parties to the
proceeding, or (ii) if such quorum is not obtainable, or, even if obtainable, a
quorum of disinterested directors so directs, by independent legal counsel in a
written opinion, that the facts known to the decision-making party at the time
such determination is made demonstrate clearly and convincingly that such person
acted in bad faith or in a manner that such person did not believe to be in or
not opposed to the best interests of the corporation.
6.5 NON-EXCLUSIVITY OF RIGHTS. The rights conferred on any person by
this Bylaw shall not be exclusive of any other right which such person may have
or hereafter acquire under any statute, provision of the Certificate of
Incorporation, Bylaws, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding office. The corporation is specifically
authorized to enter into individual contracts with any or all of its directors,
officers, employees or agents respecting indemnification and advances, to the
fullest extent not prohibited by the General Corporation Law of Delaware.
6.6 SURVIVAL OF RIGHTS. The rights conferred on any person by this
Bylaw shall continue as to a person who has ceased to be a director, officer,
employee or other agent and shall inure to the benefit of the heirs, executors
and administrators of such a person.
6.7 AMENDMENTS. Any repeal or modification of this Bylaw shall only be
prospective and shall not affect the rights under this Bylaw in effect at the
time of the alleged occurrence of any action or omission to act that is the
cause of any proceeding against any agent of the corporation.
ARTICLE VII
RECORDS AND REPORTS
7.1 MAINTENANCE AND INSPECTION OF RECORDS. The corporation shall,
either at its principal executive office or at such place or places as
designated by the board of directors, keep a record of its stockholders listing
their names and addresses and the number and class of shares held by each
stockholder, a copy of these Bylaws as amended to date, accounting books and
other records.
Any stockholder of record, in person or by attorney or other agent,
shall, upon written demand under oath stating the purpose thereof, have the
right during the usual hours for business
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to inspect for any proper purpose the corporation's stock ledger, a list of its
stockholders, and its other books and records and to make copies or extracts
therefrom. A proper purpose shall mean a purpose reasonably related to such
person's interest as a stockholder. In every instance where an attorney or other
agent is the person who seeks the right to inspection, the demand under oath
shall be accompanied by a power of attorney or such other writing that
authorizes the attorney or other agent to so act on behalf of the stockholder.
The demand under oath shall be directed to the corporation at its registered
office in Delaware or at its principal place of business.
7.2 INSPECTION BY DIRECTOR. Any director shall have the right to
examine the corporation's stock ledger, a list of its stockholders and its other
books and records for a purpose reasonably related to his or her position as a
director. The Court of Chancery is hereby vested with the exclusive jurisdiction
to determine whether a director is entitled to the inspection sought. The Court
may summarily order the corporation to permit the director to inspect any and
all books and records, the stock ledger, and the stock list and to make copies
or extracts therefrom. The Court may, in its discretion, prescribe any
limitations or conditions with reference to the inspection, or award such other
and further relief as the Court may deem just and proper.
ARTICLE VIII
GENERAL MATTERS
8.1 RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING. For purposes
of determining the stockholders entitled to receive payment of any dividend or
other distribution or allotment of any rights or the stockholders entitled to
exercise any rights in respect of any other lawful action, the board of
directors may fix, in advance, a record date, which shall not be more than sixty
(60) days before any such action. In that case, only stockholders of record at
the close of business on the date so fixed are entitled to receive the dividend,
distribution or allotment of rights, or to exercise such rights, as the case may
be, notwithstanding any transfer of any shares on the books of the corporation
after the record date so fixed, except as otherwise provided in the Certificate
of Incorporation, by these Bylaws, by agreement or by law.
If the board of directors does not so fix a record date, then the
record date for determining stockholders for any such purpose shall be at the
close of business on the day on which the board adopts the applicable resolution
or the sixtieth (60th) day before the date of that action, whichever is later.
8.2 CHECKS; DRAFTS; EVIDENCES OF INDEBTEDNESS. From time to time, the
board of directors shall determine by resolution which person or persons may
sign or endorse all checks, drafts, other orders for payment of money, notes or
other evidences of indebtedness that are issued in the name of or payable to the
corporation, and only the persons so authorized shall sign or endorse those
instruments.
8.3 CORPORATE CONTRACTS AND INSTRUMENTS; HOW EXECUTED. The board of
directors, except as otherwise provided in these Bylaws, may authorize any
officer or officers, or agent or agents, to enter into any contract or execute
any instrument in the name of
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and on behalf of the corporation; such authority may be general or confined to
specific instances. Unless so authorized or ratified by the board of directors
or within the agency power of an officer, no officer, agent or employee shall
have any power or authority to bind the corporation by any contract or
engagement or to pledge its credit or to render it liable for any purpose or for
any amount.
8.4 FISCAL YEAR. Commencing in 2004, the fiscal year of this
corporation shall begin on the first day of January of each year and end on the
last day of December of such year.
8.5 STOCK CERTIFICATES. There shall be issued to each holder of fully
paid shares of the capital stock of the corporation a certificate or
certificates for such shares. Every holder of shares of the corporation shall be
entitled to have a certificate signed by, or in the name of the corporation by
the president or the chairman or the president or a vice president, and by the
treasurer or an assistant treasurer, or the secretary or an assistant secretary
of such corporation representing the number of shares registered in certificate
form. Any or all of the signatures on the certificate may be a facsimile. In
case any officer, transfer agent or registrar who has signed or whose facsimile
signature has been placed upon a certificate has ceased to be such officer,
transfer agent or registrar before such certificate is issued, it may be issued
by the corporation with the same effect as if he or she were such officer,
transfer agent or registrar at the date of issue.
8.6 SPECIAL DESIGNATION ON CERTIFICATES. If the corporation is
authorized to issue more than one class of stock or more than one series of any
class, then the powers, the designations, the preferences, and the relative,
participating, optional or other special rights of each class of stock or series
thereof and the qualifications, limitations or restrictions of such preferences
and/or rights shall be set forth in full or summarized on the face or back of
the certificate that the corporation shall issue to represent such class or
series of stock; provided, however, that, except as otherwise provided in
Section 202 of the General Corporation Law of Delaware, in lieu of the foregoing
requirements there may be set forth on the face or back of the certificate that
the corporation shall issue to represent such class or series of stock a
statement that the corporation will furnish without charge to each stockholder
who so requests the powers, the designations, the preferences, and the relative,
participating, optional or other special rights of each class of stock or series
thereof and the qualifications, limitations or restrictions of such preferences
and/or rights.
8.7 LOST CERTIFICATES. The corporation may issue a new share
certificate or new certificate for any other security in the place of any
certificate theretofore issued by it, alleged to have been lost, stolen or
destroyed, and the corporation may require the owner of the lost, stolen or
destroyed certificate or the owner's legal representative to give the
corporation a bond (or other adequate security) sufficient to indemnify it
against any claim that may be made against it (including any expense or
liability) on account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate. The board of directors may
adopt such other provisions and restrictions with reference to lost
certificates, not inconsistent with applicable law, as it shall in its
discretion deem appropriate.
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8.8 CONSTRUCTION; DEFINITIONS. Unless the context requires otherwise,
the general provisions, rules of construction, and definitions in the General
Corporation Law of Delaware shall govern the construction of these Bylaws.
Without limiting the generality of this provision, the singular number includes
the plural, the plural number includes the singular, and the term "person"
includes both a corporation and a natural person.
8.9 PROVISIONS ADDITIONAL TO PROVISIONS OF LAW. All restrictions,
limitations, requirements and other provisions of these Bylaws shall be
construed, insofar as possible, as supplemental and additional to all provisions
of law applicable to the subject matter thereof and shall be fully complied with
in addition to the said provisions of law unless such compliance shall be
illegal.
8.10 PROVISIONS CONTRARY TO PROVISIONS OF LAW. Any article, section,
subsection, subdivision, sentence, clause or phrase of these Bylaws which upon
being construed in the manner provided in Section 8.9 hereof, shall be contrary
to or inconsistent with any applicable provisions of law, shall not apply so
long as said provisions of law shall remain in effect, but such result shall not
affect the validity or applicability of any other portions of these Bylaws, it
being hereby declared that these Bylaws would have been adopted and each
article, section, subsection, subdivision, sentence, clause or phrase thereof,
irrespective of the fact that any one or more articles, sections, subsections,
subdivisions, sentences, clauses or phrases is or are illegal.
8.11 NOTICES. Any reference in these Bylaws to the time a notice is
given or sent means, unless otherwise expressly provided, the time a written
notice by mail is deposited in the United States mails, postage prepaid; or the
time any other written notice is personally delivered to the recipient or is
delivered to a common carrier for transmission, or actually transmitted by the
person giving the notice by electronic means, to the recipient; or the time any
oral notice is communicated, in person or by telephone or wireless, to the
recipient or to a person at the office of the recipient who the person giving
the notice has reason to believe will promptly communicate it to the recipient.
ARTICLE IX
AMENDMENTS
Subject to Section 6.7 hereof, the original or other bylaws of the
corporation may be adopted, amended or repealed by the stockholders entitled to
vote; provided, however, that the corporation may, in its certificate of
incorporation, confer the power to adopt, amend or repeal bylaws upon the
directors. The fact that such power has been so conferred upon the directors
shall not divest the stockholders of the power, nor limit their power to adopt,
amend or repeal bylaws.
Whenever an amendment or new bylaw is adopted, it shall be copied in
the book of bylaws with the original bylaws, in the appropriate place. If any
bylaw is repealed, the fact of repeal with the date of the meeting at which the
repeal was enacted or the filing of the operative written consent(s) shall be
stated in said book.
-17-
Exhibit 4.5
CELSION CORPORATION
AMENDMENT NO. 1
TO
RIGHTS AGREEMENT
DATED AS OF AUGUST 15, 2002
This Amendment No. 1 (this "Amendment No. 1") to that certain Rights
Agreement (the "Rights Agreement") by and between Celsion Corporation (the
"Company") and American Stock Transfer & Trust Company as Rights Agent (the
"Rights Agent") dated as of August 15, 2002, is entered into the 16th day of
January, 2003. Capitalized terms used herein, but not otherwise defined, shall
have the meanings ascribed thereto in the Rights Agreement.
WHEREAS, the Board of Directors of the Company has determined that it
is necessary and desirable to amend the Rights Agreement to provide an
additional exclusion from the definition of an "Acquiring Person";
WHEREAS, pursuant to Section 27 of the Rights Agreement, the Company
may amend the Rights Agreement without the approval of any holders of Rights
Certificates as the Company may deem necessary or desirable until such time as
the Rights are no longer redeemable; and
WHEREAS, the Rights are currently redeemable.
NOW, THEREFORE, in consideration of the foregoing and of the covenants
and agreements contained herein and in the Rights Agreement and other good and
valuable consideration, the Rights Agreement hereby is amended as follows:
1. Amendatory Provision. Pursuant to Section 27 of the Rights
Agreement, Section 1(a) of the Rights Agreement hereby is amended to provide the
following additional exclusion to the definition of "Acquiring Person"
subsequent to item (iii) of the first sentence of that Section, to be numbered
as item (iv) of the first sentence of that Section and to read as follows:
(iv) Boston Scientific Corporation ("BSC") shall not become an
"Acquiring Person" as the result of the acquisition of shares of Common
Stock by BSC solely (a) pursuant to that certain Transaction Agreement,
dated as of January 20, 2003, by and between the Company and BSC (the
"BSC Transaction Agreement") and (b) pursuant to a stock dividend on,
subdivision of, or similar proportionate adjustment in (collectively,
an "Adjustment"), the shares of Common Stock received pursuant to the
BSC Transaction Agreement, provided, however, that if BSC shall become
the Beneficial Owner of an aggregate of 15% or more of the shares of
Common Stock then outstanding by reason of share acquisitions other
than pursuant to the BSC Transaction Agreement or an Adjustment in the
shares received pursuant thereto (provided that such aggregate may
include shares of Common Stock acquired pursuant to the BSC Transaction
Agreement or any Adjustment), then BSC shall be deemed to be an
"Acquiring Person".
2. Execution by the Rights Agent. Upon the delivery of a
certificate from an appropriate officer of the Company which states that this
Amendment No. 1 is compliance with the terms of Section 27 of the Rights
Agreement, the Rights Agent shall execute this Amendment No 1.
3. Effective Time. Notwithstanding Section 2 hereof, pursuant to
Section 27 of the Rights Agreement, this Amendment No. 1 shall become effective
immediately upon execution by the Company.
4. Existing Agreement. Except as expressly amended hereby, all of
the terms, covenants and conditions of the Rights Agreement (i) are ratified and
confirmed; (ii) shall remain unamended and not waived; and (iii) shall continue
in full force and effect.
5. Governing Law. This Amendment No. 1 shall be deemed to be a
contract made under the laws of the State of Delaware and for all purposes shall
be governed by and construed in accordance with the laws of such State
applicable to contracts to be made and performed entirely within such State.
6. Severability. If any term, provision, covenant or restriction
of this Amendment No. 1 or of the Rights Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Amendment No. 1 and the Rights Agreement shall remain in full force and effect
and shall in no way be affected, impaired or invalidated.
7. Counterparts. This Amendment No. 1 may be executed in
counterparts, each of which shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and the same
instrument.
[SIGNATURE PAGE FOLLOWS]
2
IN WITNESS WHEREOF, Celsion Corporation has caused this Amendment No. 1
to be duly executed on the date first above written.
CELSION CORPORATION
By: /s/Anthony P. Deasey
-------------------------------
Name: Anthony P. Deasey
Title: Executive Vice President--Finance
and Administration and Chief
Financial Officer
Executed by American Stock Transfer & Trust Company, as Rights Agent, this 6th
day of February, 2003.
AMERICAN STOCK TRANSFER & TRUST
COMPANY, as Rights Agent
By: /s/ Herbert J. Lemmer
----------------------------------------
Name: Herbert J. Lemmer
Title: Vice President
3
Exhibit 4.6
CELSION CORPORATION
2004 STOCK INCENTIVE PLAN
EFFECTIVE: MAY 25, 2004
TABLE OF CONTENTS
PAGE
----
1. ESTABLISHMENT, PURPOSE AND TYPES OF AWARDS...............................3
2. DEFINITIONS..............................................................3
3. ADMINISTRATION...........................................................6
(a) Procedure..........................................................6
(b) Secondary Committees and Sub-Plans.................................7
(c) Powers of the Committee............................................7
(d) Limited Liability..................................................9
(e) Indemnification....................................................9
(f) Effect of Committee's Decision.....................................9
(g) Apprising the Board................................................9
4. STOCK AVAILABLE UNDER THE PLAN; MAXIMUM AWARDS...........................9
(a) Stock Available Under the Plan.....................................9
(b) Maximum Awards to Covered Employees...............................10
5. PARTICIPATION...........................................................10
6. STOCK OPTIONS...........................................................10
(a) Grant of Option...................................................10
(b) Exercise Price....................................................10
(c) Payment...........................................................11
(d) Term of Options...................................................11
(e) Restrictions on Incentive Stock Options...........................11
(f) Other Terms and Conditions........................................12
7. RESTRICTED STOCK AND RESTRICTED STOCK UNITS.............................12
(a) In General........................................................12
(b) Vesting Conditions and Other Restrictions.........................12
(c) Stock Issuance and Stockholder Rights.............................13
8. STOCK APPRECIATION RIGHTS...............................................14
(a) Award of Stock Appreciation Rights................................14
(b) Restrictions of Tandem SARs.......................................14
(c) Amount of Payment upon Exercise of SARs...........................14
(d) Form of Payment upon Exercise of SARs.............................14
9. PHANTOM STOCK...........................................................15
10. PERFORMANCE AWARDS......................................................15
(a) In General........................................................15
(b) Covered Employee Targets..........................................15
11. WITHHOLDING AND REPORTING OF TAXES......................................16
12. TRANSFERABILITY.........................................................16
13. ADJUSTMENTS; BUSINESS COMBINATIONS......................................17
(a) Adjustments.......................................................17
(b) Change in Control.................................................17
(c) Dissolution and Liquidation.......................................17
(d) Other Adjustments.................................................18
14. TERMINATION AND AMENDMENT...............................................18
(a) Amendment or Termination by the Board.............................18
(b) Amendments by the Committee.......................................18
(c) Approval of Grantees..............................................19
15. NON-GUARANTEE OF EMPLOYMENT.............................................19
16. TERMINATION OF EMPLOYMENT...............................................19
17. WRITTEN AGREEMENT.......................................................19
18. NON-UNIFORM DETERMINATIONS..............................................19
19. LIMITATION ON BENEFITS..................................................19
20. LISTING AND REGISTRATION................................................20
21. COMPLIANCE WITH SECURITIES LAW..........................................20
22. NO TRUST OR FUND CREATED................................................20
23. NO LIMIT ON OTHER COMPENSATION ARRANGEMENTS.............................21
24. NO RESTRICTION OF CORPORATE ACTION......................................21
25. GOVERNING LAW...........................................................21
26. PLAN SUBJECT TO CHARTER AND BYLAWS......................................21
27. EFFECTIVE DATE; TERMINATION DATE........................................21
ii
CELSION CORPORATION
2004 STOCK INCENTIVE PLAN
1. ESTABLISHMENT, PURPOSE AND TYPES OF AWARDS
Celsion Corporation, a Delaware corporation (the Company) hereby
establishes the Celsion Corporation 2004 Stock Incentive Plan (the "Plan"). The
purpose of the Plan is to promote the long-term growth and profitability of the
"Company" by (i) providing incentives to improve stockholder value and to
contribute to the growth and financial success of the Company, and (ii) enabling
the Company to attract, retain and reward the best available persons for
positions of substantial responsibility.
The Plan permits the granting of Awards in the form of Incentive Stock
Options, Nonqualified Stock Options, Restricted Stock, Restricted Stock Units,
Stock Appreciation Rights, Phantom Stock, and Performance Awards, in each case
as such term is defined below, and any combination of the foregoing.
2. DEFINITIONS
Under this Plan, except where the context otherwise indicates, the
following definitions apply:
(a) "Affiliate" shall mean any entity other than a Subsidiary, if
the Company and/or one or more Subsidiaries own directly or indirectly not less
than fifty percent (50%) of such entity.
(b) "Awards" shall mean Incentive Stock Options, Nonqualified
Stock Options, Restricted Stock, Restricted Stock Units, Stock Appreciation
Rights, Phantom Stock, and Performance Awards, and any combination of the
foregoing.
(c) "Board" shall mean the Board of Directors of the Company.
(d) "Change in Control" shall mean:
(i) The consummation of an amalgamation, merger or
consolidation of the Company with or into another entity or any other
corporate reorganization of the Company, if more than fifty percent
(50%) of the combined voting power of the continuing or surviving
entity's securities outstanding immediately after such amalgamation,
merger, consolidation or other reorganization (or, if applicable, more
than fifty percent (50%) of the combined voting power of the ultimate
parent company that directly or indirectly has beneficial ownership of
the securities of such continuing or surviving entity) is not owned
directly or indirectly by persons who were holders of the Company's
then-outstanding voting securities immediately prior to such
amalgamation, merger, consolidation or other reorganization;
3
(ii) The sale, transfer or other disposition of all or
substantially all of the Company's assets to an entity that is not a
Parent, a Subsidiary or an Affiliate of the Company;
(iii) Any transaction as a result of which any person becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing
at least fifty percent (50%) of the total voting power represented by
the Company's then-outstanding voting securities. For purposes of this
subsection, the term "person" shall have the same meaning as when used
in sections 13(d) and 14(d) of the Exchange Act but shall exclude: (A)
any Parent, Subsidiary or Affiliate of the Company, (B) any employee
benefit plan (or related trust) sponsored or maintained by the Company,
a Parent, or any Subsidiary or Affiliate, and (C) any underwriter
temporarily holding securities pursuant to an offering of such
securities; or
(iv) A change in the composition of the Board over a period
of twenty four (24) consecutive months or less as a result of which
individuals who, at the beginning of such period, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual
subsequently becoming a director whose election, or nomination for
election by the Company's Stockholders, was approved by a vote of at
least a majority of the directors then comprising the Board (either by
a specific vote or by approval of the proxy statement of the Company in
which such person is named as a nominee for director, without written
objection to such nomination) shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office
occurs as a result of either an actual or threatened solicitation of
proxies or consents by or on behalf of a person other than the Board.
(e) "Code" shall mean the Internal Revenue Code of 1986, as
amended, and any regulations issued thereunder.
(f) "Committee" shall mean the Board or a committee of the Board
appointed pursuant to Section 3 of the Plan to administer the Plan.
(g) "Committee Delegate" shall mean the Chief Executive Officer or
other senior officer of the Company to whom duties and powers of the Board or
Committee hereunder have been delegated pursuant to Section 3(b).
(h) "Covered Employee" shall mean an employee of the Company or
any Parent, Subsidiary or Affiliate who is subject to Code Section 162(m).
(i) "Exchange Act" shall mean the U.S. Securities Exchange Act of
1934, as amended and any rules or regulations promulgated thereunder.
4
(j) "Fair Market Value" of the Stock for any purpose on a
particular date shall mean:
(i) if the Stock is traded on a public securities exchange or
a national automated quotation system, the closing price for Stock on
the relevant date, or (if there were no sales on such date) the closing
price on the nearest day before the relevant date, as reported in The
Wall Street Journal or a similar publication selected by the Committee;
or
(ii) if the Stock is not traded on a public securities
exchange or a national quotation system on such date, the price
determined in a manner such as the Committee shall in good faith
determine to be appropriate.
(k) "Grant Agreement" shall mean a written agreement between the
Company and a grantee memorializing the terms and conditions of an Award granted
pursuant to the Plan.
(l) "Grant Date" shall mean the date on which the Committee
formally acts to grant an Award to a grantee or such other date as the Committee
shall so designate at the time of taking such formal action.
(m) "Incentive Stock Options" shall mean Stock options that meet
the requirements of Code Section 422.
(n) "Nonqualified Stock Options" shall mean Stock options that do
not meet the requirements of Code Section 422.
(o) "Parent" shall mean a company, whether now or hereafter
existing, within the meaning of the definition of "parent company" provided in
Section 424(e) of the Code, or any successor thereto of similar import.
(p) "Participant" shall mean a director, officer, employee or
consultant of the Company, or any Parent, Subsidiary or Affiliate, who is
granted an Award under the Plan.
(q) "Performance Award" shall mean an Award under Section 10
hereof.
(r) "Performance Measure" shall mean one or more of the following
criteria, or such other operating objectives as it deems appropriate, selected
by the Committee to measure performance of the Company or any Parent, Subsidiary
or Affiliate or other business division of same for a Performance Period,
whether in absolute or relative terms: basic or diluted earnings per share of
Stock; earnings per share of Stock growth; revenue; operating income; net income
(either before or after taxes); earnings and/or net income before interest and
taxes; earnings and/or net income before interest, taxes, depreciation and
amortization; return on capital; return on equity; return on assets; net cash
provided by operations; free cash flow; Stock price; economic profit; economic
value; total stockholder return; gross margins and costs. Each such measure
shall be determined in accordance with generally accepted accounting principles
as consistently applied and, if so determined by the Committee and, in the case
of a Performance Award to a Covered Employee, to the extent intended to meet the
performance-based compensation exception under
5
Code Section 162(m), adjusted to omit the effects of extraordinary items, gain
or loss on the disposal of a business segment, unusual or infrequently occurring
events and transactions and cumulative effects of changes in accounting
principles.
(s) "Performance Period" means a period of not less than one year
over which the achievement of targets for Performance Measures is determined.
(t) "Phantom Stock" shall mean Awards under Section 9.
(u) "Restricted Stock" and "Restricted Stock Units" shall mean
Awards under Section 7.
(v) "Rule 16b-3" shall mean Rule 16b-3 as in effect under the
Exchange Act on the effective date of the Plan, or any successor provision
prescribing conditions necessary to exempt the issuance of securities under the
Plan (and further transactions in such securities) from Section 16(b) of the
Exchange Act.
(w) "Securities Act" shall mean the U.S. Securities Act of 1933,
as amended and any rules or regulations promulgated thereunder.
(x) "Stock" shall mean common stock of the Company, par value
$0.01 per share.
(y) "Stock Appreciation Rights" shall mean Awards under Section 8.
(z) "Subsidiary" and "Subsidiaries" shall mean only a company or
companies, whether now or hereafter existing, within the meaning of the
definition of "subsidiary company" provided in Section 424(f) of the Code, or
any successor thereto of similar import.
(aa) "2001 Plan" shall mean the 2001 Celsion Corporation Stock
Option Plan.
3. ADMINISTRATION
(a) Procedure. The Plan shall be administered by the Board. In the
alternative, the Board may delegate authority to a Committee to administer the
Plan on behalf of the Board, subject to such terms and conditions as the Board
may prescribe. Such Committee shall consist of not less than two (2) members of
the Board each of whom is a "non-employee director" within the meaning of Rule
16b-3 under the Exchange Act, or any successor rule of similar import, and an
"outside director" within the meaning of Section 162(m) of the Code and the
regulations promulgated thereunder.
Once appointed, the Committee shall continue to serve until otherwise
directed by the Board. From time to time, the Board may increase the size of the
Committee and appoint additional members thereof, remove members (with or
without cause) and appoint new members in substitution therefor, fill vacancies,
however caused, and remove all members of the Committee and, thereafter,
directly administer the Plan. In
6
the event that the Board is the administrator of the Plan in lieu of a
Committee, the term "Committee" as used herein shall be deemed to mean the
Board.
Members of the Board or Committee who are either eligible for Awards or
have been granted Awards may vote on any matters affecting the administration of
the Plan or the grant of Awards pursuant to the Plan, except that no such member
shall act upon the granting of an Award to himself or herself, but any such
member may be counted in determining the existence of a quorum at any meeting of
the Board or the Committee during which action is taken with respect to the
granting of an Award to him or her.
The Committee shall meet at such times and places and upon such notice
as it may determine. A majority of the Committee shall constitute a quorum. Any
acts by the Committee may be taken at any meeting at which a quorum is present
and shall be by majority vote of those members entitled to vote. Additionally,
any acts reduced to writing or approved in writing by all of the members of the
Committee shall be valid acts of the Committee.
(b) Secondary Committees and Sub-Plans. The Board may, in its sole
discretion, divide the duties and powers of the Committee by establishing one or
more secondary Committees to which certain duties and powers of the Board
hereunder are delegated (each of which shall be regarded as a "Committee" under
the Plan with respect to such duties and powers), or delegate all of its duties
and powers hereunder to a single Committee. Additionally, if permitted by
applicable law, the Board or Committee may delegate any or all of its duties and
powers hereunder to the Chief Executive Officer and/or to other senior officers
of the Company subject to such conditions and limitations as the Board or
Committee shall prescribe. However, only the Committee described under
Subsection 3(a) may designate and grant Awards to Participants who are subject
to Section 16 of the Exchange Act or Section 162(m) of the Code. The Committee
shall also have the power to establish sub-plans (which may be included as
appendices to the Plan or the respective Grant Agreements), which may constitute
separate programs, for the purpose of establishing programs which meet any
special tax or regulatory requirements of jurisdictions other than the United
States and its subdivisions. Any such interpretations, rules, administration and
sub-plans shall be consistent with the basic purposes of the Plan.
(c) Powers of the Committee. The Committee shall have all the
powers vested in it by the terms of the Plan, such powers to include authority,
in its sole and absolute discretion, to grant Awards under the Plan, prescribe
Grant Agreements evidencing such Awards and establish programs for granting
Awards. The Committee shall have full power and authority to take all other
actions necessary to carry out the purpose and intent of the Plan, including,
but not limited to, the authority to:
(i) determine the Participants to whom, and the time or
times at which, Awards shall be granted,
(ii) determine the types of Awards to be granted,
7
(iii) determine the number of shares of Stock and/or amount of
cash to be covered by or used for reference purposes for each Award,
(iv) impose such terms, limitations, vesting schedules,
restrictions and conditions upon any such Award as the Committee shall
deem appropriate, including without limitation establishing, in its
discretion, Performance Measures that must be satisfied before an Award
vests and/or becomes payable, the term during which an Award is
exercisable, the purchase price, if any, under an Award and the period,
if any, following a grantee's termination of employment or service with
the Company or any Parent, Subsidiary or Affiliate during which the
Award shall remain exercisable,
(v) modify, extend or renew outstanding Awards, accept the
surrender of outstanding Awards and substitute new Awards, provided
that no such action shall be taken with respect to any outstanding
Award that would materially, adversely affect the grantee without the
grantee's consent, or constitute a repricing of stock options without
the consent of the holders of the Company's voting securities under
(vi) below,
(vi) only with the approval of the holders of the voting
securities of the Company to the extent that such approval is required
by applicable law, regulation or the rules of a national securities
exchange or automated quotation system to which the Company is subject,
reprice Incentive Stock Options and Nonqualified Stock Options either
by amendment to lower the exercise price or by accepting such stock
options for cancellation and issuing replacement stock options with a
lower exercise price or through any other mechanism,
(vii) accelerate the time in which an Award may be exercised
or in which an Award becomes payable and waive or accelerate the lapse,
in whole or in part, of any restriction or condition with respect to an
Award,
(viii) establish objectives and conditions, including targets
for Performance Measures, if any, for earning Awards and determining
whether Awards will be paid after the end of a Performance Period, and
(ix) permit the deferral of, or require a Participant to
defer such Participant's receipt of, the delivery of Stock and/or cash
under an Award that would otherwise be due to such Participant and
establish rules and procedures for such payment deferrals.
The Committee shall have full power and authority to administer and interpret
the Plan and to adopt such rules, regulations, agreements, guidelines and
instruments for the administration of the Plan as the Committee deems necessary,
desirable or appropriate in accordance with the Bylaws of the Company.
8
(d) Limited Liability. To the maximum extent permitted by law, no
member of the Board or Committee or a Committee Delegate shall be liable for any
action taken or decision made in good faith relating to the Plan or any Award
thereunder.
(e) Indemnification. The members of the Board and Committee and
any Committee Delegate shall be indemnified by the Company in respect of all
their activities under the Plan in accordance with the procedures and terms and
conditions set forth in the Certificate of Incorporation and Bylaws of the
Company as in effect from time to time. 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 and
Bylaws, as a matter of law, or otherwise.
(f) Effect of Committee's Decision. All actions taken and
decisions and determinations made by the Committee or a Committee Delegate on
all matters relating to the Plan pursuant to the powers vested in it hereunder
shall be in the Committee's or Committee Delegate's sole and absolute discretion
and shall be conclusive and binding on all parties concerned, including the
Company, its stockholders, any Participants in the Plan and any other employee
of the Company, and their respective successors in interest.
(g) Apprising the Board. The Committee will inform the Board
regarding its activities under the Plan not less frequently than at each
scheduled Board meeting and at such other times as the Board may request. .
4. STOCK AVAILABLE UNDER THE PLAN; MAXIMUM AWARDS
(a) Stock Available Under the Plan.
(i) Subject to adjustments as provided in Section 13 of the
Plan, the Stock that may be delivered or purchased or used for
reference purposes (with respect to Stock Appreciation Rights, or
Phantom Stock) with respect to Awards granted under the Plan, including
with respect to Incentive Stock Options, shall not exceed an aggregate
of ten million (10,000,000) shares of Stock, plus the number of shares
of Stock available from the 2001 Plan as provided in Subsection
4(a)(ii) below. Stock available under the Plan may be, in any
combination, authorized but unissued Stock, treasury Stock and Stock
that is repurchased, in the market, and canceled by the Company. The
Company shall reserve said number of shares of Stock for Awards under
the Plan, subject to adjustments as provided in Section 13 of the Plan.
If any Award, or portion of an Award, issued under the Plan, expires or
terminates unexercised, becomes unexercisable or is forfeited or
otherwise terminated, surrendered or canceled as to any shares of Stock
without the delivery by the Company (or, in the case of Restricted
Shares, without vesting) of Stock or other consideration, the Stock
subject to such Award shall thereafter be available for further Awards
under the Plan.
9
(ii) There shall be available for issuance under the Plan the
sum of (A) the number of shares of Stock remaining available for
issuance under the 2001 Plan at the effective date of this Plan, plus
(B) shares of Stock subject to any stock options issued under the 2001
Plan to the extent such stock options subsequently expire or terminate
unexercised, become unexercisable or are forfeited or otherwise
terminated, surrendered or canceled, without delivery of shares of
Stock or other consideration to the holder.
(b) Maximum Awards to Covered Employees. The maximum number of
shares of Stock subject to Awards that may be granted during any one calendar
year to any one Covered Employee shall be limited to two million (2,000,000). To
the extent required by Section 162(m) of the Code and so long as Section 162(m)
of the Code is applicable to persons eligible to participate in the Plan, shares
of Stock subject to the foregoing maximum with respect to which the related
Award is terminated, surrendered or canceled shall nonetheless continue to be
taken into account with respect to such maximum for the calendar year in which
granted.
5. PARTICIPATION
Participation in the Plan shall be open to all directors, officers,
employees and consultants of the Company, or of any Parent, Subsidiary or
Affiliate of the Company, as may be selected by the Committee from time to time.
Notwithstanding the foregoing, participation in the Plan with respect to Awards
of Incentive Stock Options shall be limited to employees of the Company or of
any Parent or Subsidiary of the Company.
Awards may be granted to such Participants and for or with respect to
such number of shares of Stock as the Committee shall determine, subject to the
limitations in Section 4 of the Plan. A grant of any type of Award made in any
one year to a Participant shall neither guarantee nor preclude a further grant
of that or any other type of Award to such person in that year or subsequent
years.
6. STOCK OPTIONS
Subject to the other applicable provisions of the Plan, the Committee
may from time to time grant to Participants Awards of Nonqualified Stock Options
and/or Incentive Stock Options. The stock option Awards granted shall be subject
to the following terms and conditions.
(a) Grant of Option. The grant of a stock option shall be
evidenced by a Grant Agreement, executed by the Company and the grantee, stating
the number of shares of Stock subject to the stock option evidenced thereby, the
exercise price and the terms and conditions of such stock option, in such form
as the Committee may from time to time determine.
(b) Exercise Price. The price per share payable upon the exercise
of each stock option shall be determined by the Committee
10
(c) Payment. Stock options may be exercised in whole or in part by
payment of the exercise price of the Stock to be acquired in accordance with the
provisions of the Grant Agreement, and/or such rules and regulations as the
Committee may have prescribed, and/or such determinations, orders, or decisions
as the Committee may have made. Payment may be made in cash (or cash equivalents
acceptable to the Committee) or, if provided in the Grant Agreement and
permitted by applicable law, in shares of Stock which have been held by grantee
for at least six (6) months, or a combination of cash and such Stock, or by such
other means as the Committee may prescribe. The Fair Market Value of Stock
delivered on exercise of stock options shall be determined as of the date of
exercise.
If the Stock is registered under Section 12(b) or 12(g) of the Exchange
Act, the Committee, subject to such limitations as it may determine, may
authorize payment of the exercise price, in whole or in part, by delivery of a
properly executed exercise notice, together with irrevocable instructions, to:
(i) a brokerage firm to deliver promptly to the Company the aggregate amount of
sale or loan proceeds to pay the exercise price and any withholding tax
obligations that may arise in connection with the exercise, and (ii) the Company
to deliver the certificates for such purchased Stock directly to such brokerage
firm.
(d) Term of Options. The term during which each stock option may
be exercised shall be determined by the Committee; provided, however, that in no
event shall a stock option be exercisable more than ten years from the date it
is granted. Prior to the exercise of the stock option and delivery of the Stock
certificates represented thereby, the grantee shall have none of the rights of a
stockholder with respect to any Stock represented by an outstanding stock
option.
(e) Restrictions on Incentive Stock Options. Incentive Stock
Option Awards granted under the Plan shall comply in all respects with Code
Section 422 and, as such, shall meet the following additional requirements:
(i) Grant Date. An Incentive Stock Option must be granted
within ten (10) years of the earlier of the Plan's adoption by the
Board of Directors or approval by the Company's stockholders.
(ii) Exercise Price and Term. The exercise price of an
Incentive Stock Option shall not be less than one hundred percent
(100%) of the Fair Market Value of the Stock on the date the stock
option is granted and the term of the stock option shall not exceed ten
(10) years. Also, the exercise price of any Incentive Stock Option
granted to a grantee who owns (within the meaning of Section 422(b)(6)
of the Code, after the application of the attribution rules in Section
424(d) of the Code) more than ten percent (10%) of the total combined
voting power of all classes of shares of Stock of the Company or any
Parent or Subsidiary of the Company shall be not less than one hundred
ten percent (110%)
11
of the Fair Market Value of the Stock on the grant date and the term of
such stock option shall not exceed five (5) years.
(iii) Maximum Grant. The aggregate Fair Market Value
(determined as of the Grant Date) of Stock of the Company with respect
to which all Incentive Stock Options first become exercisable by any
grantee in any calendar year under this or any other plan of the
Company and its Parent and Subsidiaries may not exceed One Hundred
Thousand Dollars ($100,000) or such other amount as may be permitted
from time to time under Section 422 of the Code. To the extent that
such aggregate Fair Market Value shall exceed One Hundred Thousand
Dollars ($100,000), or other applicable amount, such stock options to
the extent of the Stock in excess of such limit shall be treated as
Nonqualified Stock Options. In such case, the Company may designate the
shares of Stock that are to be treated as Stock acquired pursuant to
the exercise of an Incentive Stock Option.
(iv) Grantee. Incentive Stock Options shall only be issued to
employees of the Company or of a Parent, Subsidiary or Affiliate of the
Company.
(v) Designation. No stock option shall be an Incentive Stock
Option unless so designated by the Committee at the time of grant or in
the Grant Agreement evidencing such stock option.
(vi) Stockholder Approval. No stock option issued under the
Plan shall be an Incentive Stock Option unless the Plan is approved by
the stockholders of the Company within twelve (12) months of its
adoption by the Board in accordance with the Bylaws of the Company and
governing law relating to such matters.
(f) Other Terms and Conditions. Stock options may contain such
other provisions, not inconsistent with the provisions of the Plan, as the
Committee shall determine appropriate from time to time.
7. RESTRICTED STOCK AND RESTRICTED STOCK UNITS
(a) In General. Subject to the other applicable provisions of the
Plan and applicable law, the Committee may at any time and from time to time
grant Restricted Stock or Restricted Stock Units to Participants, in such
amounts and subject to such vesting conditions, other restrictions and
conditions for removal of restrictions as it determines. Unless determined
otherwise by the Committee, Participants receiving Restricted Stock or
Restricted Stock Units are not required to pay the Company cash consideration
therefor (except as may be required for applicable tax withholding).
(b) Vesting Conditions and Other Restrictions. Each Award for
Restricted Stock and Restricted Stock Units shall be evidenced by a Grant
Agreement that specifies the applicable vesting conditions and other
restrictions, if any, on such Award, the
12
duration of such restrictions, and the time or times at which such restrictions
shall lapse with respect to all or a specified number of the shares of Stock
that are part of the Award. Notwithstanding the foregoing, the Committee may
reduce or shorten the duration of any vesting or other restriction applicable to
any Restricted Stock or Restricted Stock Units awarded to any grantee under the
Plan.
(c) Stock Issuance and Stockholder Rights.
(i) Restricted Stock. Stock certificates with respect to Stock
granted pursuant to a Restricted Stock Award shall be issued, and/or
Stock shall be registered, at the time of grant of the Restricted Stock
Award, subject to forfeiture if the Restricted Stock does not vest or
other restrictions do not lapse. Any Stock certificates shall bear an
appropriate legend with respect to the restrictions applicable to such
Restricted Stock Award and the grantee may be required to deposit the
certificates with the Company during the period of any restriction
thereon and to execute a blank stock power or other instrument of
transfer therefor. Except as otherwise provided by the Committee,
during the period of restriction following issuance of Restricted Stock
certificates, the grantee shall have all of the rights of a holder of
Stock, including but not limited to the rights to receive dividends (or
amounts equivalent to dividends) and to vote with respect to the
Restricted Stock. The Committee, in its discretion, may provide that
any dividends or distributions paid with respect to Stock subject to
the unvested portion of a Restricted Stock Award will be subject to the
same restrictions as the Restricted Stock to which such dividends or
distributions relate.
(ii) Restricted Stock Units. Stock certificates for the shares
of Stock subject to a Restricted Stock Unit shall be issued, and/or
Stock shall be registered, upon vesting and lapse of any other
restrictions with respect to the issuance of Stock under such Award.
The grantee will not be entitled to vote such Stock or to any of the
other rights of stockholders during the period prior to issuance of the
certificates for such Stock and/or the registration of the Stock. An
Award of Restricted Stock Units may provide the Participant with the
right to receive amounts equivalent to dividends and distributions paid
with respect to Stock subject to the Award while the Award is
outstanding, which payments may, in the Committee's discretion, either
be made currently or credited to an account for the Participant, and
may be settled in cash or Stock, all as determined by the Committee.
Unless otherwise determined by the Committee with respect to a
particular Award, each outstanding Restricted Stock Unit shall accrue
such dividend equivalents, deferred as equivalent amounts of additional
Restricted Stock Units, which amounts will be paid only when and if the
Restricted Stock Unit (on which such dividend equivalents were accrued)
vests and becomes payable. To the extent that a Restricted Stock Unit
does not vest or is otherwise forfeited, any accrued and unpaid
dividend equivalents shall be forfeited.
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8. STOCK APPRECIATION RIGHTS
(a) Award of Stock Appreciation Rights. Subject to the other
applicable provisions of the Plan, the Committee may at any time and from time
to time grant Stock Appreciation Rights ("SARs") to Participants, either on a
free-standing basis (without regard to or in addition to the grant of a stock
option) or on a tandem basis (related to the grant of an underlying stock
option), as it determines. SARs granted in tandem with or in addition to a stock
option may be granted either at the same time as the stock option or at a later
time; provided, however, that a tandem SAR shall not be granted with respect to
any outstanding Incentive Stock Option Award without the consent of the grantee.
SARs shall be evidenced by Grant Agreements, executed by the Company and the
grantee, stating the number of shares of Stock subject to the SAR evidenced
thereby and the terms and conditions of such SAR, in such form as the Committee
may from time to time determine. The term during which each SAR may be exercised
shall be determined by the Committee. In no event shall a SAR be exercisable
more than ten years from the date it is granted. The grantee shall have none of
the rights of a stockholder with respect to any Stock represented by a SAR.
(b) Restrictions of Tandem SARs. No Incentive Stock Option may be
surrendered in connection with the exercise of a tandem SAR unless the Fair
Market Value of the Stock subject to the Incentive Stock Option is greater than
the exercise price for such Incentive Stock Option. SARs granted in tandem with
stock options shall be exercisable only to the same extent and subject to the
same conditions as the stock options related thereto are exercisable. The
Committee may, in its discretion, prescribe additional conditions to the
exercise of any such tandem SAR.
(c) Amount of Payment upon Exercise of SARs. A SAR shall entitle
the grantee to receive, subject to the provisions of the Plan and the Grant
Agreement, a payment having an aggregate value equal to the product of (i) the
excess of (A) the Fair Market Value on the exercise date of one share of Stock
over (B) the base price per share of Stock specified in the Grant Agreement,
times (ii) the number of shares of Stock specified by the SAR, or portion
thereof, that is exercised. In the case of exercise of a tandem SAR, such
payment shall be made in exchange for the surrender of the unexercised related
stock option (or any portion or portions thereof which the grantee from time to
time determines to surrender for this purpose).
(d) Form of Payment upon Exercise of SARs. Payment by the Company
of the amount receivable upon any exercise of a SAR may be made by the delivery
of Stock or cash, or any combination of Stock and cash, as determined in the
sole discretion of the Committee from time to time. If upon settlement of the
exercise of a SAR a grantee is to receive a portion of such payment in Stock,
the number of shares of Stock shall be determined by dividing such portion by
the Fair Market Value of a share of Stock on the exercise date. No fractional
shares shall be used for such payment and the Committee shall determine whether
cash shall be given in lieu of such fractional shares or whether such fractional
shares shall be eliminated.
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9. PHANTOM STOCK
The grant of Phantom Stock shall be evidenced by a Grant Agreement,
executed by the Company and the grantee, that incorporates the terms of the Plan
and states the number of shares of Phantom Stock evidenced thereby and the terms
and conditions of such Phantom Stock in such form as the Committee may from time
to time determine. Phantom Stock granted to a Participant shall be credited to a
bookkeeping reserve account solely for accounting purposes and shall not require
a segregation of any of the Company's assets. Each share of Phantom Stock shall
represent the value of one share of Stock. Phantom Stock shall become payable in
whole or in part in such form, at such time or times and pursuant to such
conditions in accordance with the provisions of the Grant Agreement, and/or such
rules and regulations as the Committee may prescribe, and/or such
determinations, orders or decisions as the Committee may make. Except as
otherwise provided in the applicable Grant Agreement, the grantee shall have
none of the rights of a stockholder with respect to any shares represented by
Phantom Stock as a result of the grant of Phantom Stock to the grantee. Phantom
Stock may contain such other provisions, not inconsistent with the provisions of
the Plan, as the Committee shall determine desirable or appropriate from time to
time.
10. PERFORMANCE AWARDS
(a) In General. The Committee, in its discretion, may establish
targets for Performance Measures for selected Participants and authorize the
granting, vesting, payment and/or delivery of Performance Awards in the form of
Incentive Stock Options, Nonqualified Stock Options, Restricted Stock,
Restricted Stock Units, Stock Appreciation Rights, and/or Phantom Stock to such
Participants upon achievement of such targets for Performance Measures during a
Performance Period. The Committee, in its discretion, shall determine the
Participants eligible for Performance Awards, the targets for Performance
Measures to be achieved during each Performance Period, and the type, amount,
and terms and conditions of any Performance Awards. Performance Awards may be
granted either alone or in addition to other Awards made under the Plan.
(b) Covered Employee Targets. After the Company is subject to Code
Section 162(m), in connection with any Performance Awards granted to a Covered
Employee that are intended to meet the performance-based compensation exception
under Code Section 162(m), the Committee shall (i) establish in the applicable
Grant Agreement the specific targets relative to the Performance Measures which
must be attained before the respective Performance Award is granted, vests, or
is otherwise paid or delivered, (ii) provide in the applicable Grant Agreement
the method for computing the portion of the Performance Award which shall be
granted, vested, paid and/or delivered if the target or targets are attained in
full or part, and (iii) at the end of the relevant Performance Period and prior
to any such grant, vesting, payment or delivery certify the extent to which the
applicable target or targets were achieved and whether any other material terms
were in fact satisfied. The specific targets and the method for computing the
portion of such Performance Award which shall be granted, vested, paid or
delivered to any Covered Employee shall be established by the Committee prior to
the earlier to occur of (A) ninety
15
(90) days after the commencement of the Performance Period to which the
Performance Measure applies and (B) the elapse of twenty-five percent (25%) of
the Performance Period and in any event while the outcome is substantially
uncertain. In interpreting Plan provisions applicable to Performance Measures
and Performance Awards that are intended to meet the performance-based
compensation exception under Code Section 162(m), it is the intent of the Plan
to conform with the standards of Section 162(m) of the Code and Treasury
Regulations Section 1.162-27(e)(2), and the Committee in interpreting the Plan
shall be guided by such provisions.
11. WITHHOLDING AND REPORTING OF TAXES
The Company may require, as a condition to the grant of any Award under
the Plan, vesting or exercise pursuant to such Award or to the delivery of
certificates for shares of Stock issued or payments of cash to a grantee
pursuant to the Plan or a Grant Agreement, that the grantee pay to the Company,
in cash or, if approved by the Company, in Stock, including Stock acquired upon
grant of the Award or exercise of the Award, valued at Fair Market Value on the
date as of which the withholding tax liability is determined, any federal, state
or local taxes of any kind or any applicable taxes or other required withholding
of any other jurisdiction required by law to be withheld with respect to any
taxable event under the Plan. The Company, to the extent permitted or required
by law, shall have the right to deduct from any payment of any kind (including
salary or bonus) otherwise due to a grantee any federal, state or local taxes of
any kind or any applicable taxes or other required withholding of any other
jurisdiction required by law to be withheld with respect to the grant, vesting,
exercise or payment of or under any Award under the Plan or a Grant Agreement,
or to retain or sell a sufficient number of the shares of Stock to be issued to
such grantee to cover any such taxes. The Company or any Parent, Subsidiary or
Affiliate shall comply with any applicable tax reporting requirements of any
jurisdiction imposed on it by law with respect to the granting, vesting,
exercise and/or payment of Awards.
12. TRANSFERABILITY
No Award granted under the Plan shall be transferable by a grantee
otherwise than by will or the laws of descent and distribution. Unless otherwise
determined by the Committee in accordance with the provisions of the immediately
preceding sentence, an Award may be exercised during the lifetime of the grantee
only by the grantee or, during the period the grantee is under a legal
disability, by the grantee's guardian or legal representative. Notwithstanding
the foregoing, an Award other than an Incentive Stock Option may, in the
Committee's sole discretion, be transferable by gift or domestic relations order
to (i) the grantee's child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, daughter-in-law, son-in-law, brother-in-law or sister-in-law,
including adoptive relationships (such persons, "Family Members"), (ii) a
Company, partnership, limited liability company or other business entity whose
only stockholders, partners or members, as applicable are the grantee and/or
Family Members, or (iii) a trust in which the Grantee
16
and/or Family Members have all of the beneficial interests, and subsequent to
any such transfer any Award may be exercised by any such transferee.
13. ADJUSTMENTS; BUSINESS COMBINATIONS
(a) Adjustments. In the event of a reclassification,
recapitalization, stock split, reverse stock split, stock dividend, combination
of shares or other similar event, the maximum number and kind of shares reserved
for issuance or with respect to which Awards may be granted under the Plan as
provided in Section 4 shall be adjusted to reflect such event, and the Committee
shall make such adjustments as it deems appropriate and equitable in the number,
kind and price of shares covered by outstanding Awards made under the Plan, and
in any other matters that relate to Awards and that are affected by the changes
in the shares referred to above.
(b) Change in Control. In the event of any proposed Change in
Control under Section 2(d)(i), (ii) or (iii), the Committee shall take such
action as it deems appropriate and equitable to effectuate the purposes of this
Plan and to protect the grantees of Awards, which action may include, without
limitation, any one or more of the following: (i) acceleration or change of the
exercise and/or expiration dates of any Award to require that exercise be made,
if at all, prior to the Change in Control; (ii) cancellation of any Award upon
payment to the holder in cash of the Fair Market Value of the Stock subject to
such Award as of the date of (and, to the extent applicable, as established for
purposes of) the Change in Control, less the aggregate exercise price, if any,
of the Award; and (iii) in any case where equity securities of another entity
are proposed to be delivered in exchange for or with respect to Stock of the
Company, arrangements to have such other entity replace the Awards granted
hereunder with awards with respect to such other securities, with appropriate
adjustments in the number of shares subject to, and the exercise prices under,
the Award.
(c) Dissolution and Liquidation. In the event the Company
dissolves and liquidates (other than pursuant to a plan of amalgamation, merger
or reorganization), then notwithstanding any restrictions on exercise set forth
in this Plan or any Grant Agreement, or other agreement evidencing a stock
option, Stock Appreciation Right, Phantom Stock, Restricted Stock or Restricted
Stock Unit Award: (i) each grantee shall have the right to exercise his stock
option, Stock Appreciation Right, or Phantom Stock or to require delivery of
Stock certificates, and/or registration of the Stock, representing any such
Restricted Stock or Restricted Stock Unit Award, at any time up to ten (10) days
prior to the effective date of such liquidation and dissolution; and (ii) the
Committee may make arrangements with the grantees for the payment of appropriate
consideration to them for the cancellation and surrender of any stock option,
Stock Appreciation Right, Phantom Stock, Restricted Stock or Restricted Stock
Unit Award that is so canceled or surrendered at any time up to ten (10) days
prior to the effective date of such liquidation and dissolution. The Committee
may establish a different period (and different conditions) for such exercise,
delivery, cancellation or surrender to avoid subjecting the grantee to liability
under Section 16(b) of the Exchange Act. Any stock option, Stock Appreciation
Right or Phantom Stock not so exercised, canceled or surrendered shall
17
terminate on the last day for exercise prior to such effective date; and any
Restricted Stock or Restricted Stock Units as to which there has not been such
delivery of Stock certificates or that has not been so canceled or surrendered,
shall be forfeited on the last day prior to such effective date. The Committee
shall give to each grantee written notice of the commencement of any proceedings
for such liquidation and dissolution of the Company and the grantee's rights
with respect to his outstanding Award.
(d) Other Adjustments. The Committee is authorized to make
adjustments in the terms and conditions of, and the criteria included in, Awards
in recognition of unusual or nonrecurring events (including, without limitation,
the events described in the preceding paragraphs of this Section 13) affecting
the Company, or the financial statements of the Company or any Parent,
Subsidiary or Affiliate, or of changes in applicable laws, regulations or
accounting principles, whenever the Committee determines that such adjustments
are appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan.
Except as hereinbefore expressly provided, issuance by the Company of
stock of any class or securities convertible into stock of any class, for cash,
property, labor or services, upon direct sale, upon the exercise of rights or
warranty to subscribe therefor, or upon conversion of stock or obligations of
the Company convertible into such stock or other securities, and in any case
whether or not for fair value, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number of shares of Stock subject to
Awards theretofore granted or the purchase price per share of Stock subject to
Awards.
14. TERMINATION AND AMENDMENT
(a) Amendment or Termination by the Board. The Board, without
further approval of the stockholders, may amend or terminate the Plan or any
portion thereof at any time, except that no amendment shall become effective
without prior approval of the stockholders of the Company to increase the number
of shares of Stock subject to the Plan or if stockholder approval is necessary
to comply with any tax or regulatory requirement or rule of any exchange or
national automated quotation system upon which the Stock is listed or quoted
(including for this purpose stockholder approval that is required for continued
compliance with Rule 16b-3 or stockholder approval that is required to enable
the Committee to grant Incentive Stock Options pursuant to the Plan).
(b) Amendments by the Committee. The Committee shall be authorized
to make minor or administrative amendments to the Plan as well as amendments to
the Plan that may be dictated by requirements of U.S. federal or state laws
applicable to the Company or that may be authorized or made desirable by such
laws. The Committee may amend any outstanding Award in any manner as provided in
Section 3(c) and to the extent that the Committee would have had the authority
to make such Award as so amended.
18
(c) Approval of Grantees. No amendment to the Plan or any Award
may be made that would materially adversely affect any outstanding Award
previously made under the Plan without the approval of the grantee.
15. NON-GUARANTEE OF EMPLOYMENT
Nothing in the Plan or in any Grant Agreement thereunder shall confer
any right on an employee to continue in the employ of the Company or any Parent,
Subsidiary or Affiliate or shall interfere in any way with the right of the
Company or any Parent, Subsidiary or Affiliate to terminate an employee at any
time.
16. TERMINATION OF EMPLOYMENT
For purposes of maintaining a grantee's continuous status as an
employee and accrual of rights under any Award, transfer of an employee among
the Company and the Company's Parent, Subsidiaries or Affiliates shall not be
considered a termination of employment. Nor shall it be considered a termination
of employment for such purposes if an employee is placed on military or sick
leave or such other leave of absence that is considered as continuing intact the
employment relationship; in such a case, the employment relationship shall be
continued until the date when an employee's right to reemployment shall no
longer be guaranteed either by law or contract.
17. WRITTEN AGREEMENT
Each Grant Agreement entered into between the Company and a grantee
with respect to an Award granted under the Plan shall incorporate the terms of
this Plan and shall contain such provisions, consistent with the provisions of
the Plan, as may be established by the Committee.
18. NON-UNIFORM DETERMINATIONS
The Committee's determinations under the Plan (including without
limitation determinations of the persons to receive Awards, the form, amount and
time of such Awards, the terms and provisions of such Awards and the agreements
evidencing same) need not be uniform and may be made by it selectively among
persons who receive, or are eligible to receive, Awards under the Plan, whether
or not such persons are similarly situated.
19. LIMITATION ON BENEFITS
With respect to persons subject to Section 16 of the Exchange Act,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3. To the extent any provision of the Plan or action by
the Committee fails to so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by the Committee.
19
20. LISTING AND REGISTRATION
If the Company determines that the listing, registration or
qualification of Stock subject to any Award upon any securities exchange or
listing or quotation system established by the National Association of
Securities Dealers, Inc. or under any law is necessary or desirable as a
condition of, or in connection with, the granting of same or the issue or
purchase of Stock thereunder, no such Award may be exercised in whole or in part
and no restrictions on such Award shall lapse, unless such listing, registration
or qualification is effected free of any conditions not acceptable to the
Company.
21. COMPLIANCE WITH SECURITIES LAW
The Company may require that a grantee, as a condition to exercise of
an Award, and as a condition to the delivery of any Stock certificate, provide
to the Company, at the time of each such exercise and each such delivery, a
written representation that the Stock being acquired shall be acquired by the
grantee solely for investment and will not be sold or transferred without
registration or the availability of an exemption from registration under the
Securities Act and applicable state securities laws. The Company may also
require that a grantee submit other written representations that will permit the
Company to comply with applicable federal and state securities laws in
connection with the issuance of the Stock, including representations as to the
knowledge and experience in financial and business matters of the grantee and
the grantee's ability to bear the economic risk of the grantee's investment. The
Company may require that the grantee obtain a "purchaser representative" as that
term is defined in applicable federal and state securities laws. Any Stock
certificates for shares issued pursuant to this Plan may bear a legend
restricting transferability of the Stock unless such shares are registered or an
exemption from registration is available under the Securities Act and applicable
securities laws of the states of the U.S. The Company may notify its transfer
agent to stop any transfer of Stock not made in compliance with these
restrictions. Stock shall not be issued with respect to an Award granted under
the Plan unless the exercise of such Award and the issuance and delivery of
Stock certificates for such shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act,
the Exchange Act, the rules and regulations promulgated thereunder and the
requirements of any national securities exchange or Nasdaq System upon which the
Stock may then be listed or quoted, and shall be further subject to the approval
of counsel for the Company with respect to such compliance to the extent such
approval is sought by the Committee.
22. NO TRUST OR FUND CREATED
Neither the Plan nor any Award shall create or be construed to create a
trust or separate fund of any kind or a fiduciary relationship between the
Company and a grantee or any other person. To the extent that any grantee or
other person acquires a right to receive payments from the Company pursuant to
an Award, such right shall be no greater than the right of any unsecured general
creditor of the Company.
20
23. NO LIMIT ON OTHER COMPENSATION ARRANGEMENTS
Nothing contained in the Plan shall prevent the Company or any Parent,
Subsidiary or Affiliate from adopting or continuing in effect other compensation
arrangements (whether such arrangements be generally applicable or applicable
only in specific cases), including without limitation the granting of stock
options, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights or
Phantom Stock Units otherwise than under the Plan.
24. NO RESTRICTION OF CORPORATE ACTION
Nothing contained in the Plan shall be construed to limit or impair the
power of the Company or any Parent, Subsidiary or Affiliate to make adjustments,
reclassifications, reorganizations, or changes in its capital or business
structure, or to amalgamate, merge or consolidate, liquidate, sell or transfer
all or any part of its business or assets or, except as otherwise provided
herein, or in a Grant Agreement, to take other actions which it deems to be
necessary or appropriate. No employee, beneficiary or other person shall have
any claim against the Company or any Parent, Subsidiary or Affiliate as a result
of such action.
25. GOVERNING LAW
The validity, construction and effect of the Plan, of Grant Agreements
entered into pursuant to the Plan, and of any rules, regulations, determinations
or decisions made by the Board or Committee relating to the Plan or such Grant
Agreements, and the rights of any and all persons having or claiming to have any
interest therein or thereunder, shall be determined in accordance with
applicable federal laws and the laws of the State of Maryland. Unless otherwise
provided in the Award Agreement, recipients of an Award under the Plan are
deemed to submit to the exclusive jurisdiction and venue of the federal or local
courts of the State of Maryland, to resolve any and all issues that may arise
out of or relate to the Plan or any related Grant Agreement.
26. PLAN SUBJECT TO CHARTER AND BYLAWS
This Plan is subject to the Certificate of Incorporation and Bylaws of
the Company, as they may be in effect from time to time.
27. EFFECTIVE DATE; TERMINATION DATE
The Plan is effective as of the date on which the Plan is approved by
the stockholders of the Company. No Award shall be granted under the Plan after
the close of business on the day immediately preceding the tenth (10th)
anniversary of the effective date of the Plan. Subject to other applicable
provisions of the Plan, all Awards made under the Plan prior to such termination
of the Plan shall remain in effect until such Awards have been satisfied or
terminated in accordance with the Plan and the terms of such Awards.
21
Date Approved by the Board: February 27, 2004
----------------------------------------------------
Date Approved by the Stockholders: May 25, 2004
---------------------------------------------
22
Exhibit 5
CELSION CORPORATION
10220-L Old Columbia Road
Columbia, MD 21046
(410) 290-5390
June 14, 2004
Celsion Corporation
10220-L Old Columbia Road
Columbia, Maryland 21046
Re: Registration Statement on Form S-8 for Shares of Common Stock
Issuable Under the Celsion Corporation 2004 Stock Incentive Plan
----------------------------------------------------------------
Ladies and Gentlemen:
I serve as Vice President, General Counsel and Corporate Secretary of
Celsion Corporation, a Delaware corporation (the "Registrant"), and, in my
capacity as General Counsel, I have represented the Registrant in connection
with the preparation and filing of a registration statement on Form S-8 (the
"Registration Statement") filed this day with the Securities and Exchange
Commission (the "Commission") pursuant to the Securities Act of 1933, as amended
(the "Securities Act"), pertaining to the registration of ten million
(10,000,000) shares of the common stock, par value one cent ($0.01) per share,
of the Registrant (the "Shares") for issuance and sale pursuant to the Celsion
Corporation 2004 Stock Incentive Plan (the "Plan").
This opinion letter is being furnished in accordance with the
requirements of Item 601(b)(5) of Regulation S-K under the Securities Act.
In connection with this opinion, I have considered such questions of
law as I have deemed necessary as a basis for the opinions set forth below, and
I have examined or otherwise am familiar with originals or copies, certified or
otherwise identified to my satisfaction, of the following: (i) the Registration
Statement; (ii) the Certificate of Incorporation and Bylaws, in each case as
amended, of the Registrant, as currently in effect; (iii) certain resolutions of
the Board of Directors of the Registrant relating to the adoption of the Plan
and the issuance of the Shares and the other transactions contemplated by the
Registration Statement; (iv) the Plan; and (v) such other documents as I have
deemed necessary or appropriate as a basis for the opinion set forth below. In
my examination, I have assumed the legal capacity of all individuals, the
genuineness of all signatures, the authenticity of all documents submitted to me
as originals, the conformity to original documents of all documents submitted to
me as certified or photostatic copies and the authenticity of the originals of
such copies. As to any facts material to this opinion that I did not
Celsion Corporation
June 14, 2004
Page 2
independently establish or verify, I have relied upon statements and
representations of officers and other representatives of the Registrant and
others.
I have also assumed that the Registrant shall have sufficient
authorized and unissued shares of Common Stock available at the time of each
issuance of Shares and that the relevant provisions of the Certificate of
Incorporation and Bylaws of the Registrant and the Delaware General Corporation
Law (the "DGCL") and the Delaware State Constitution (the "Delaware
Constitution") in effect at the time of issuance of any of the Shares will not
differ in any relevant respect from the analogous provisions of the Certificate
of Incorporation and Bylaws of the Company and the DGCL and Delaware
Constitution in effect as of the date of this opinion and that no additional
relevant provisions shall have been added subsequent to the date hereof.
Based upon and subject to the foregoing, I am of the opinion that the
Shares have been duly authorized for issuance and that when issued, sold, paid
for and delivered in accordance with the terms of the Plan, the Shares will be
validly issued, fully paid and nonassessable.
This letter expresses my opinion with respect to the DGCL (without
regard to the principles of conflict of laws thereof) governing matters such as
due organization and the authorization and issuance of stock, as such laws are
in effect as of the date hereof, as well as the pertinent provisions of the
Delaware Constitution as currently in effect, and currently reported judicial
decisions interpreting such laws, subject to the limitation set forth in the
last two sentences of this paragraph, and to the facts bearing upon this opinion
as they current exist. I assume no obligation to revise, supplement or update
this opinion in the event of future changes in the DGCL, the Delaware
Constitution or the interpretation thereof, or in such facts. This opinion does
not extend to the securities or "blue sky" laws of any jurisdiction, to federal
securities laws, to the laws of contract or to any other laws of any other
jurisdiction or the rules and regulations of stock exchanges or of any other
regulatory body, and I do not express any opinion as to the effect of any other
laws, rules or regulations on the opinions stated herein. I am not admitted to
practice law in the State of Delaware. However, I am generally familiar with the
DGCL as currently in effect and have made such inquiries as I deem necessary to
render the foregoing opinions.
I hereby consent to the use of and filing of this opinion letter as an
exhibit to the Registration Statement and to the use of my name under the
caption "Legal Matters" in the prospectus that forms a part of the Registration
Statement; provided, however, that in giving such consent I do not admit that I
come within the category of persons whose consent is required under Section 7 of
the Securities Act or the rules and regulations of the Commission. This opinion
letter and the opinions expressed herein are being furnished to you solely for
submission to the Commission as an exhibit to the Registration Statement and,
accordingly, may not be relied upon in any other manner without, in each
instance, my prior written consent.
Very truly yours,
/s/ Anita J. Finkelstein
General Counsel
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Stockholders and Board of Directors
Celsion Corporation
We consent to the incorporation by reference in the Form S-8
Registration Statement of Celsion Corporation (the "Corporation") of our report
dated November 21, 2003 relating to the balance sheets of the Corporation as of
September 30, 2003 and 2002 and the related statements of operations, changes in
stockholders' equity and cash flows for each of the years in the three-year
period ended September 30, 2003 which report appears in the 2003 Annual Report
on Form 10-K of the Corporation and to all references to our Firm included in
the Registration Statement.
/s/ Stegman & Company
Baltimore, Maryland
June 11, 2004
