purpose of the 2005 Employee Stock Purchase Plan (the “Plan”)
ADVENTRX Pharmaceuticals, Inc., a Delaware corporation (the “Company”)
provide employees of the Company and its Designated Subsidiaries with an
opportunity to purchase Common Stock. The Company intends to have the Plan
qualify as an “Employee Stock Purchase Plan” under Section 423 of the Code. The
provisions of the Plan shall, accordingly, be construed so as to extend and
limit participation in a manner consistent with the requirements of that
of the Code.
in the Plan, the terms set forth below shall have the meanings set forth
merger or consolidation of the Company with and into another person or the
transfer, or other disposition of all or substantially all of the Company’s
assets to one or more persons (other than any wholly-owned subsidiary of
Company) in a single transaction or series of related transactions.
the Board of Directors of the Company.
the Internal Revenue Code of 1986, as amended.
the Common Stock, par value $0.001 per share, of the Company.
all regular, straight-time compensation, including commissions, but not payments
for overtime, shift premium, incentive compensation, incentive payments,
and other irregular or infrequent compensation or benefits.
Status as an Employee
the absence of any interruption or termination of service as an Employee.
Continuous Status as an Employee shall not be considered interrupted in the
of (i) sick leave; (ii) military leave; (iii) any other leave of absence
approved by the Administrator, provided,
such leave is for a period of not more than 90 days, unless reemployment
the expiration of such leave is guaranteed by contract or statute, or unless
provided otherwise pursuant to Company policy adopted from time to time;
(iv) in the case of transfers between locations of the Company or
the Company and its Designated Subsidiaries.
all amounts credited to the account of a participant pursuant to the
the Subsidiaries which have been or will be designated by the Board from
time in its sole discretion as eligible to participate in the Plan.
any person, including an Officer, who is customarily employed for at least
hours per week and more than five months in a calendar year by the Company
one of its Designated Subsidiaries.
Securities Exchange Act of 1934, as amended.
Offering Period means
first Offering Period of the Plan.
Commencement Date means
first business day of each Offering Period of the Plan.
of the periods, generally of six months duration, as set forth in Section
person who is an officer of the Company within the meaning of Section 16
Exchange Act and the rules and regulations promulgated thereunder.
Termination Date means
last business day of each Offering Period of the Plan.
parent corporation of the Company, whether now or hereafter existing, as
by Section 424(a) of the Code.
with respect to an Offering Period an amount equal to 85% of the Fair Market
Value (as defined in Section 7.2) of a Share on the Offering Commencement
or on the Offering Termination Date, whichever is lower; provided,
(i) if there is an increase in the number of Shares available for
under the Plan as a result of a stockholder-approved amendment to the Plan,
(ii) all or a portion of such additional Shares are to be issued with
respect to the Offering Period underway at the time of such increase
(iii) the Fair Market Value of a Share of Common Stock on the date
increase (the “Approval
Date Fair Market Value”)
higher than the Fair Market Value on the Offering Commencement Date for such
Offering Period, then in such instance the Purchase Price with respect to
Additional Shares shall be 85% of the Approval Date Fair Market Value or
Fair Market Value of a Share of Common Stock on the Offering Termination
whichever is lower.
Securities Act of 1933, as amended.
share of Common Stock, as adjusted in accordance with Section 18.
subsidiary corporation of the Company, whether now or hereafter existing,
defined in Section 424(f) of the Code.
set forth below have the meanings ascribed to them in the following
Offering Termination Date
person who is an Employee as of the Offering Commencement Date of a given
Offering Period shall be eligible to participate in such Offering Period
the Plan, subject to the requirements of Sections 5.1 and the limitations
imposed by Section 423(b) of the Code.
provisions of the Plan to the contrary notwithstanding, no Employee shall
granted an option under the Plan (i) if, immediately after the grant,
Employee (taking into account stock which would be attributed to such Employee
pursuant to Section 424(d) of the Code) would own capital stock of the Company
or hold outstanding options to purchase stock possessing five percent or
the total combined voting power or value of all classes of stock of the Company
or of any Parent or Subsidiary of the Company, or (ii) if such option
permit such Employee’s rights to purchase an aggregate of stock under all
employee stock purchase plans (described in Section 423 of the Code) of the
Company and its Parent or Subsidiaries with a Fair Market Value in excess
Twenty-Five Thousand Dollars ($25,000) (determined at the time such option
granted) for each calendar year in which such option is outstanding at any
Offering Period will begin on January 1 or July 1 and end on the next following
June 30 or December 31, respectively. The Initial Offering Period shall commence
on July 1, 2005. At any time and from time to time, the Board may change
duration or the frequency of Offering Periods with respect to future Offering
Periods or suspend operation of the Plan with respect to Offering Periods
eligible Employee may become a participant in the Plan by completing a
subscription agreement on the form provided by the Company and filing it
the Company’s payroll office at least five business days prior to the applicable
Offering Commencement Date, unless a later time for filing the subscription
agreement is set by the Board for all eligible Employees with respect to
Offering Period. The subscription agreement shall set forth the percentage
the participant’s Compensation (subject to Section 6.1) to be paid as
Contributions pursuant to the Plan.
of Payroll Deductions.
deductions shall commence on the first payroll following the Offering
Commencement Date and shall end on the last payroll paid on or prior to the
Offering Termination Date of the Offering Period to which the subscription
agreement is applicable, unless sooner terminated by the participant as provided
in Section 10.
participant who purchases Shares under the Plan shall thereby be deemed to
agreed that the Company or the Subsidiary that employs the participant shall
entitled to withhold, from any other amounts that may be payable to the
participant at or around the time of the purchase, such federal, state, local
and foreign income, employment and other taxes which may be required to be
withheld under applicable laws. In lieu of such withholding, the Company
Subsidiary may require the participant to remit such taxes to the Company
such Subsidiary as a condition of the purchase.
of Payment of Contributions
participant shall elect to have payroll deductions made on each payday during
the Offering Period in an amount not less than one percent and not more than
percent (or such other percentage as the Board may establish from time to
before an Offering Commencement Date) of such participant’s Compensation on each
payday during the Offering Period. All payroll deductions made by a participant
shall be credited to such participant’s account under the Plan. A participant
may not make any additional payments into such account.
participant may discontinue participation in the Plan as provided in Section
In addition, if the Board has so announced to Employees at least five days
to the scheduled beginning of the next Offering Period to be affected by
Board’s determination, a participant may change the rate of such participant’s
Contributions with respect to the Offering Period by completing and filing
the Company a new subscription agreement authorizing a change in the payroll
deduction rate. If otherwise permitted, no such change shall enable a
participant to resume Contributions other than as of an Offering Commencement
Date, following a withdrawal of Contributions during an Offering Period pursuant
to Section 10. Any such change in rate shall be effective as of the
payroll period following the date of filing of the new subscription agreement,
if the agreement is filed at least 10 business days prior to such period
not, as of the second following payroll period.
Notwithstanding the foregoing, to the extent necessary to comply with Section
423(b)(8) of the Code and Section 3.2, a participant’s payroll deductions may be
decreased during any Offering Period scheduled to end during the current
calendar year to 0%. Payroll deductions reduced to 0% in compliance with
Section 6.3 shall re-commence automatically at the rate provided in such
participant’s subscription agreement at the beginning of the first Offering
Period which is scheduled to end in the following calendar year, unless
terminated by the participant as provided in Section 10.
Offering Commencement Date of each Offering Period, each eligible Employee
participating in such Offering Period shall be granted an option to purchase
the Offering Termination Date of that Offering Period a number of Shares
determined by dividing such Employee’s Contributions accumulated during such
Offering Period prior to such Offering Termination Date and retained in the
participant’s account as of the Offering Termination Date by the applicable
Purchase Price. However, the Board may determine from time to time, prior
applicable Offering Period, the maximum number of Shares an Employee may
purchase during each such Offering Period, provided
such purchase shall be subject to the limitations set forth in Sections 3.2
fair market value of the Common Stock on a given date (the “Fair
be (i) the closing sales price on the American Stock Exchange (“AMEX”),
national securities exchange or other established market on which the Common
Stock is then listed (or, in the event that the Common Stock is not traded
such date, on the immediately preceding trading date) or (ii) determined
the Board in its discretion based on the closing sales price of the Common
for such date (or, in the event that the Common Stock is not traded on such
date, on the immediately preceding trading date), as reported by AMEX or
such exchange or market, or (iii) if the closing sales price is not
reported, the mean of the bid and asked prices per share of the Common Stock
reported by AMEX or other such exchange.
participant withdraws from the Plan as provided in Section 10, such
participant’s option for the purchase of Shares will be exercised automatically
on the Offering Termination Date of an Offering Period, and the maximum number
of full Shares subject to the option will be purchased at the applicable
Purchase Price with the accumulated Contributions in such participant’s account.
No fractional Shares shall be issued. The Shares purchased upon exercise
option hereunder shall be deemed to be transferred to the participant on
Offering Termination Date. A participant’s option to purchase Shares hereunder
shall be exercisable only by such participant during such participant’s
promptly as practicable after each Offering Termination Date of each Offering
Period, the Company shall arrange the delivery to or for the benefit of each
participant, as appropriate, of a certificate representing the Shares purchased
upon exercise of such participant’s option. Any payroll deductions accumulated
in a participant’s account which are not sufficient to purchase a full Share
shall be retained in the participant’s account for the subsequent Offering
Period, subject to earlier withdrawal by the participant as provided in Section
10. Any other amounts left over in a participant’s account after an Offering
Termination Date shall be returned to the participant.
Withdrawal; Termination of Employment.
participant may withdraw all but not less than all of the Contributions credited
to such participant’s account under the Plan at any time prior to each Offering
Termination Date by giving written notice to the Company. All of the
participant’s Contributions credited to such participant’s account will be paid
to such participant promptly after receipt of such participant’s notice of
withdrawal and such participant’s option for the current Offering Period will be
automatically terminated, and no further Contributions for the purchase of
Shares will be made during the Offering Period.
termination of the participant’s Continuous Status as an Employee prior to the
Offering Termination Date of an Offering Period for any reason, including
retirement or death, the Contributions credited to such participant’s account
will be returned to such participant or, in the case of such participant’s
death, to the person or persons entitled thereto under Section 14, and such
participant’s option will be automatically terminated.
Withdrawal from Plan.
event an Employee fails to remain in Continuous Status as an Employee of
Company for at least 20 hours per week during the Offering Period in which
Employee is a participant, such participant will be deemed to have elected
withdraw from the Plan and the Contributions credited to such participant’s
account will be returned and such participant’s option terminated.
of Withdrawal from Plan.
participant’s withdrawal during an Offering Period will not have any effect upon
such participant’s eligibility to participate in a succeeding Offering Period or
in any similar plan which may hereafter be adopted by the Company.
interest shall accrue on the Contributions of a participant in the
Number of Shares.
to adjustment as provided in Section 18, the maximum number of Shares which
shall be made available for sale under the Plan shall be 1,000,000 Shares,
an annual increase to be added on the first day of the Company’s fiscal year
beginning in 2006 and on each anniversary of that date thereafter equal to
lesser of (i) one percent of the number of outstanding shares of Stock on
day, (ii) 750,000 and (iii) such other amount as the Board may specify prior
the date such annual increase is to take effect. If the Board determines
that, on a given Offering Termination Date, the number of shares with respect
which options are to be exercised may exceed (i) the number of Shares
were available for sale under the Plan on the Offering Commencement Date,
(ii) the number of shares available for sale under the Plan on such
Offering Termination Date, the Board may in its sole discretion provide that
Company shall make a pro rata allocation of the Shares available for purchase
such Offering Commencement Date or Offering Termination Date, as applicable,
as uniform a manner as shall be practicable and as it shall determine in
sole discretion to be equitable among all participants exercising options
purchase Common Stock on such Offering Termination Date. The Company may
pro rata allocation of the Shares available on the Offering Commencement
the applicable Offering Period pursuant to the preceding sentence,
notwithstanding any authorization of additional Shares for issuance under
Plan by the Company’s stockholders subsequent to such Offering Commencement
Interest or Voting Right.
participant shall have no interest or voting right in Shares covered by such
participant’s option until such option has been exercised.
to be delivered to a participant under the Plan will be registered in the
of the participant or in the name of the participant and such participant’s
spouse, as directed by the participant.
Board, or a committee named by the Board, shall supervise and administer
Plan and shall have full power to adopt, amend and rescind any rules deemed
desirable and appropriate for the administration of the Plan and not
inconsistent with the Plan, to construe and interpret the Plan, and to make
other determinations necessary or advisable for the administration of the
The Board’s determinations made in good faith on matters referred to in this
Plan shall be final, binding and conclusive on all persons having or claiming
any interest under this Plan.
Board may from time to time designate an employee or retain a third party
address routine administrative matters. Any employee or third party so
designated may be referred to herein as the “Administrator.”
participant may file a written designation of a beneficiary who is to receive
any Shares and cash, if any, from the participant’s account under the Plan in
the event of such participant’s death subsequent to the end of an Offering
Period but prior to delivery to such participant of such Shares and cash.
such beneficiary shall also be entitled to receive any cash from the
participant’s account under the Plan in the event of such participant’s death
prior to the Offering Termination Date of an Offering Period.
to Designation; Lack of Designation.
designation of beneficiary may be changed by the participant at any time
written notice. In the event of the death of a participant and in the absence
a beneficiary validly designated under the Plan who is living at the time
such participant’s death, the Company shall deliver such Shares or cash to the
executor or administrator of the estate of the participant, or if no such
executor or administrator has been appointed (to the knowledge of the Company),
the Company, in its discretion, may deliver such Shares or cash to the spouse
to any one or more dependents or relatives of the participant, or if no spouse,
dependent or relative is known to the Company, then to such other person
Company may designate.
of Options and Shares.
Contributions credited to a participant’s account nor any rights with regard to
the exercise of an option or to receive Shares under the Plan may be assigned,
transferred, pledged or otherwise disposed of in any way (other than by will,
the laws of descent and distribution, or as provided in Section 14) by the
participant. Any such attempt at assignment, transfer, pledge or other
disposition shall be without effect, except that the Company may treat such
as an election to withdraw funds in accordance with Section 10. In addition,
the Board has so announced to Employees at least five days prior to the
scheduled beginning of the next Offering Period to be affected by the Board’s
determination, any Shares acquired on the Offering Termination Date of such
Offering Period may be subject to restrictions specified by the Board on
transfer of such Shares.
participant selling or transferring any or all of such participant’s Shares
purchased pursuant to the Plan must provide written notice of such sale or
transfer to the Company within five business days after the date of sale
transfer. Such notice to the Company shall include the gross sales price,
any, the Offering Period during which the Shares being sold were purchased
the participant, the number of Shares being sold or transferred and the date
sale or transfer.
Contributions received or held by the Company under the Plan may be used
Company for any corporate purpose and shall be subject to claims by creditors
the Company, and the Company shall not be obligated to segregate such
Contributions from its other assets. The Company shall not pay any interest
accounts will be maintained for each participant in the Plan. Statements
account will be given to participating Employees at least annually, which
statements will set forth the amounts of Contributions, the per Share Purchase
Price, the number of Shares purchased and the remaining cash balance, if
Upon Changes in Capitalization; Acquisitions.
to any required action by the stockholders of the Company, the number of
covered by each option under the Plan which has not yet been exercised and
number of Shares which have been authorized for issuance under the Plan but
not yet been placed under option (collectively, the “Reserves”),
well as the maximum number of Shares which may be purchased by a participant
an Offering Period, the number of Shares set forth in Section 12.1, and the
price per Share of Common Stock covered by each option under the Plan which
not yet been exercised, shall be proportionately adjusted for any increase
decrease in the number of the Company’s issued Shares resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification
the Common Stock (including any such change in the number of Shares effected
connection with a change in domicile of the Company), or any other increase
decrease in the number of Shares effected without receipt of consideration
the Company; provided,
conversion of any convertible securities of the Company or the “cashless” or
“net” exercise of any derivative securities of the Company shall not be deemed
to have been “effected without receipt of consideration.” Such adjustment shall
be made by the Board, whose determination in that respect shall be final,
binding and conclusive.
event of a dissolution or liquidation of the Company, the Offering Period
in progress will terminate immediately prior to the consummation of such
unless otherwise provided by the Board. In the event of an Acquisition, each
option outstanding under the Plan shall be assumed or an equivalent option
be substituted by the successor corporation or a parent or Subsidiary of
successor corporation. In the event that the successor corporation refuses
assume or substitute for outstanding options, the Offering Period then in
progress shall be shortened and a new Offering Termination Date shall be
Offering Termination Date”),
which date the Offering Period then in progress will terminate. The New Offering
Termination Date shall be on or before the date of consummation of the
transaction and the Board shall notify each participant in writing, at least
days prior to the New Offering Termination Date, that the Offering Termination
Date for such participant’s option has been changed to the New Offering
Termination Date and that such participant’s option will be exercised
automatically on the New Offering Termination Date, unless prior to such
such participant has withdrawn from the Offering Period as provided in Section
10. For purposes of this Section 18, an option granted under the Plan shall
deemed to be assumed, without limitation, if, at the time of issuance of
stock or other consideration upon an Acquisition, each holder of an option
the Plan would be entitled to receive upon exercise of the option the same
number and kind of shares of stock or the same amount of property, cash or
securities as such holder would have been entitled to receive upon the
occurrence of the transaction if the holder had been, immediately prior to
transaction, the holder of the number of Shares covered by the option at
time (after giving effect to any adjustments in the number of Shares covered
the option as provided for in this Section 18); provided,
the consideration received in the transaction is not solely common stock
successor corporation or its parent (as defined in Section 424(e) of the
the Board may, with the consent of the successor corporation, provide for
consideration to be received upon exercise of the option to be solely common
stock of the successor corporation or its parent equal in Fair Market Value
the per Share consideration received by holders of Common Stock in the
Board may, if it so determines in the exercise of its sole discretion, also
provision for adjusting the Reserves, as well as the price per Share of Common
Stock covered by each outstanding option, in the event that the Company effects
one or more reorganizations, recapitalizations, rights offerings or other
increases or reductions of Shares of its outstanding Common Stock, and in
event of the Company’s being consolidated with or merged into any other
or Termination by the Board.
Board may at any time and for any reason terminate or amend the Plan. Except
provided in Section 18, no such termination of the Plan may affect options
previously granted, provided
Plan or an Offering Period may be terminated by the Board on an Offering
Termination Date or by the Board’s setting a new Offering Termination Date with
respect to an Offering Period then in progress if the Board determines that
termination of the Plan or the Offering Period is in the best interests of
Company and its stockholders or if continuation of the Plan or the Offering
Period would cause the Company to incur adverse accounting charges as a result
of the Plan. Except as provided in Section 18 and in this Section 19, no
amendment to the Plan shall make any change in any option previously granted
which adversely affects the rights of any participant.
Powers of the Board.
stockholder consent and without regard to whether any participant rights
considered to have been adversely affected, the Board (or its committee)
be entitled to change the Offering Periods, limit the frequency or number
changes in the amount withheld during an Offering Period, establish the exchange
ratio applicable to amounts withheld in a currency other than U.S. dollars,
permit payroll withholding in excess of the amount designated by a participant
in order to adjust for delays or mistakes in the Company’s processing of
properly completed withholding elections, establish reasonable waiting and
adjustment periods or accounting and crediting procedures to ensure that
applied toward the purchase of Common Stock for each participant properly
correspond with amounts withheld from the participant’s Compensation, and
establish such other limitations or procedures as the Board (or its committee)
determines in its sole discretion advisable which are consistent with the
and Other Communications.
notice, demand, request or other communication hereunder to any party shall
deemed to be sufficient if contained in a written instrument delivered in
or duly sent by first class registered, certified or overnight mail, postage
prepaid, or telecopied with a confirmation copy by regular, certified or
overnight mail, addressed or telecopied, as the case may be, (i) if
recipient of an Award, at such participant’s residence address last filed with
the Company and (ii) if to the Company, at its principal place of
addressed to the attention of its Treasurer, or to such other address or
telecopier number or electronic mail address, as the case may be, as the
addressee may have designated by notice to the addressor. All such notices,
requests, demands and other communications shall be deemed to have been
received: (i) in the case of personal delivery, on the date of such
delivery; (ii) in the case of mailing, when received by the addressee;
(iii) in the case of facsimile transmission, when confirmed by facsimile
machine report; and (iv) in the case of electronic mail, when directed
an electronic mail address at which the receiving party has consented to
such consent is deemed revoked if the sender is unable to deliver by electronic
transmission two consecutive notices and such inability becomes known to
secretary or assistant secretary of the corporation or to the transfer agent,
other person responsible for giving notice.
to Issuance of Shares.
with Securities Laws.
shall not be issued with respect to an option unless the exercise of such
and the issuance and delivery of such Shares pursuant thereto shall comply
all applicable provisions of law, domestic or foreign, including, without
limitation, the Securities Act, the Exchange Act, the rules and regulations
promulgated thereunder, applicable state securities laws and the requirements
any stock exchange upon which the Shares may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to
condition to the exercise of an option, the Company may require the person
exercising such option to represent and warrant at the time of any such exercise
that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel
the Company, such a representation is required by any of the aforementioned
applicable provisions of law.
of Plan; Effective Date.
shall be in effect for a term of ten years beginning on May 24, 2005, the
the requisite number of stockholders of the Company approved the Plan, unless
earlier terminated pursuant to Section 19.