GENTIUM S.p.A. 2007 STOCK OPTION PLAN
Exhibit
5
2007
STOCK OPTION PLAN
TABLE
OF CONTENTS
|
SECTION
1.
|
PURPOSE.
|
1
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SECTION
2.
|
DEFINITIONS.
|
1
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(a)
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“ADS”
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1
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(b)
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“Affiliate”
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1
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(c)
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“Award”
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1
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||
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(d)
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“Award
Agreement”
|
1
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||
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(e)
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“Board”
|
1
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(f)
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“Change
In Control”
|
1
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||
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(g)
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“Code”
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2
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||
|
(h)
|
“Committee”
|
2
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||
|
(i)
|
“Company”
|
2
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||
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(j)
|
“Consultant”
|
2
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||
|
(k)
|
“Corporate
Transaction”
|
2
|
||
|
(l)
|
“Covered
Employee”
|
3
|
||
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(m)
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“Director”
|
3
|
||
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(n)
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“Disability”
|
3
|
||
|
(o)
|
“Employee”
|
3
|
||
|
(p)
|
“Exchange
Act”
|
3
|
||
|
(q)
|
“Exercise
Price”
|
3
|
||
|
(r)
|
“Fair
Market Value”
|
3
|
||
|
(s)
|
“Grant”
|
4
|
||
|
(t)
|
“Incentive
Stock Option” or “ISO”
|
4
|
||
|
(u)
|
“Key
Employee”
|
4
|
||
|
(v)
|
“Non-Employee
Director”
|
4
|
||
|
(w)
|
“Non-Employee
Independent Director”
|
4
|
||
|
(x)
|
“Nonstatutory
Stock Option” or “NSO”
|
4
|
||
|
(y)
|
“Option”
|
4
|
||
|
(z)
|
“Optionee”
|
4
|
||
|
(aa)
|
“Parent”
|
4
|
||
|
(bb)
|
“Participant”
|
4
|
||
|
(cc)
|
“Plan”
|
4
|
|
(dd)
|
“Securities
Act”
|
4
|
-i-
|
(ee)
|
“Service”
|
5
|
|||
|
(ff)
|
“Share”
|
5
|
|||
|
(gg)
|
5
|
||||
|
(hh)
|
“Subsidiary”
|
5
|
|||
|
(ii)
|
“10-Percent
Shareholder”
|
5
|
|||
|
SECTION
3.
|
ADMINISTRATION.
|
5
|
|||
|
(a)
|
Administration
by Board.
|
5
|
|||
|
(b)
|
Powers
of Board.
|
5
|
|||
|
(c)
|
Delegation
to Committee.
|
6
|
|||
|
(d)
|
Effect
of Board’s Decision.
|
6
|
|||
|
(e)
|
Indemnification.
|
6
|
|||
|
SECTION
4.
|
ELIGIBILITY.
|
7
|
|||
|
(a)
|
General
Rules.
|
7
|
|||
|
(b)
|
Incentive
Stock Options.
|
7
|
|||
|
(c)
|
Non-Employee
Director Options.
|
7
|
|||
|
SECTION
5.
|
SHARES
SUBJECT TO PLAN.
|
8
|
|||
|
(a)
|
Basic
Limitation.
|
8
|
|||
|
(b)
|
Additional
Shares.
|
8
|
|||
|
(c)
|
[Limits
on Options.
|
8
|
|||
|
SECTION
6.
|
TERMS
AND CONDITIONS OF OPTIONS.
|
8
|
|||
|
(a)
|
8
|
||||
|
(b)
|
Number
of Shares.
|
8
|
|||
|
(c)
|
Exercise
Price.
|
8
|
|||
|
(d)
|
Exercisability
and Term.
|
9
|
|||
|
(e)
|
Modifications
or Assumption of Options.
|
9
|
|||
|
(f)
|
Transferability
of Options.
|
9
|
|||
|
(g)
|
Restrictions
on Transfer.
|
9
|
|||
|
(h)
|
Incentive
Stock Option $100,000 Limitation.
|
9
|
|||
|
SECTION
7.
|
PROTECTION
AGAINST DILUTION.
|
9
|
|||
|
(a)
|
Adjustments.
|
9
|
|||
|
(b)
|
Participant
Rights.
|
10
|
|||
|
SECTION
8.
|
EFFECT
OF A CORPORATE TRANSACTION.
|
10
|
|||
|
(a)
|
Merger
or Reorganization.
|
10
|
||
|
(b)
|
Acceleration.
|
10
|
-ii-
|
SECTION
9.
|
LIMITATIONS
ON RIGHTS.
|
10
|
||
|
(a)
|
Retention
Rights.
|
10
|
||
|
(b)
|
Shareholders’
Rights.
|
10
|
||
|
(c)
|
Regulatory
Requirements.
|
10
|
||
|
SECTION
10.
|
WITHHOLDING
TAXES.
|
11
|
||
|
(a)
|
Withholding
Obligations.
|
11
|
||
|
SECTION
11.
|
DURATION
AND AMENDMENTS.
|
11
|
||
|
(a)
|
Term
of the Plan.
|
11
|
||
|
(b)
|
Right
to Amend, Suspend or Terminate the Plan.
|
11
|
||
|
(c)
|
Right
to Amend Award.
|
11
|
||
|
SECTION
12.
|
EXECUTION.
|
12
|
-iii-
2007
STOCK OPTION PLAN
SECTION
1. PURPOSE.
This
Gentium S.p.A. 2007 Stock Option Plan (the “Plan”) was adopted by the Board and
became effective on March 26, 2007, subject to approval by the Company’s
shareholders.
The
purpose of the Plan is to promote the long-term success of the Company and
the
creation of shareholder value by offering Key Employees an opportunity to
acquire a proprietary interest in the success of the Company, or to increase
such interest, and to encourage such selected persons to continue to provide
services to the Company and to attract new individuals with outstanding
qualifications.
The
Plan
seeks to achieve this purpose by providing for Awards in the form of Options
(which may constitute Incentive Stock Options or Nonstatutory Stock
Options).
The
Plan
shall be governed by, and construed in accordance with, the laws of the Republic
of Italy. Capitalized terms shall have the meaning provided in Section 2 of
the
Plan unless otherwise provided in this Plan or the applicable Award Agreement,
or other applicable agreement.
SECTION
2. DEFINITIONS.
(a)
“ADS”
means
American Depositary Shares issued pursuant to the Deposit Agreement dated June
15, 2005 between the Company and Bank of New York, each ADS representing one
Share.
(b) “Affiliate”
means
any
entity other than a Subsidiary, if the Company and/or one or more Subsidiaries
own not less than 50% of such entity. For purposes of determining an
individual’s “Service,” this definition shall include any entity other than a
Subsidiary, if the Company, a Parent and/or one or more Subsidiaries own not
less than 50% of such entity.
(c)
“Award”
means
any
Grant of an Option.
(d)
“Award
Agreement” means
a
written agreement between the Company and a Participant evidencing the terms
and
conditions of a Grant of an individual Award. Each Award Agreement shall be
subject to the terms and conditions of the Plan.
(e)
“Board”
means
the
Board of Directors of the Company, as constituted from time to
time.
(f)
“Change
In Control” except
as
may otherwise be provided in an Award Agreement or other applicable agreement,
means the occurrence of any of the following:
(i)
The
consummation of a merger or consolidation of the Company with or into another
entity or any other corporate reorganization, if more than 50% of the combined
voting power of the continuing or surviving entity’s securities outstanding
immediately after such merger, consolidation or other reorganization is owned
by
persons who were not shareholders of the Company immediately prior to such
merger, consolidation or other reorganization;
1
(ii)
The
sale,
transfer or other disposition of all or substantially all of the Company’s
assets;
(iii)
Any
transaction as a result of which any person becomes the beneficiary, owner
and/or “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing at least
20%
of the total voting power represented by the Company’s then outstanding voting
securities. For
purposes of this Paragraph (iii), the term “person” shall indicate any person
and/or entity except for:
(A)
A
trustee
or other fiduciary holding securities under an employee benefit plan of the
Company or a subsidiary of the Company;
(B)
A
corporation owned directly or indirectly by the shareholders of the Company
in
substantially the same proportions as their ownership of Shares;
and
(C)
The
Company; or
(iv)
A
complete liquidation or dissolution of the Company.
(g)
“Code”
means
the
United States Internal Revenue Code of 1986, as amended.
(h)
“Committee”
means
a
committee consisting of one or more members of the Board that is appointed
by
the Board (as described in Section 3) to administer the Plan.
(i)
“Company”
means
Gentium S.p.A., a stock corporation organized under the laws of the Republic
of
Italy.
(j)
“Consultant”
means
an
individual who performs bona fide services to the Company, a Parent, a
Subsidiary or an Affiliate other than as an Employee or Director or Non-Employee
Director.
(k)
“Corporate
Transaction” means
the
occurrence, in a single transaction or in a series of related transactions,
of
any one or more of the following events:
(i)
a
sale or
other
disposition of all or substantially all, as determined by the Board in its
discretion, of the consolidated assets of the Company and its
Subsidiaries;
2
(ii)
a
merger,
consolidation or similar transaction following which the Company is not the
surviving corporation; or
(iii)
a
merger,
consolidation or similar transaction following which the Company is the
surviving corporation but the outstanding shares thereof immediately preceding
the merger, consolidation or similar transaction are converted or exchanged
by
virtue of the merger, consolidation or similar transaction into other property,
whether in the form of securities, cash or otherwise.
(l)
“Covered
Employee” means
each of the chief executive officer and the 4 (four) other highest compensated
officers of the Company.
(m)
“Director”
means
a
member of the Board who is also an Employee.
(n)
“Disability”
means
that the Key Employee is unable to engage in any substantial gainful activity
by
reason of any medically determinable physical or mental impairment which can
be
expected to result in death or which has lasted or can be expected to last
for a
continuous period of not less than 12 months.
(o)
“Employee”
means
any
individual who is an employee of the Company, a Parent, a Subsidiary or an
Affiliate. Mere service as a Director or payment of a director’s fee by the
Company or an Affiliate shall not be sufficient to constitute “employment” by
the Company or an Affiliate.
(p)
“Exchange
Act” means
the
United States Securities Exchange Act of 1934, as amended.
(q)
“Exercise
Price” means,
the amount for which a Share may be purchased upon exercise of such Option,
as
specified in the applicable Stock Option Agreement.
(r)
“Fair
Market Value” means
the
market price of Shares, determined by the Committee as follows:
(i)
If
ADSs
were traded on a stock exchange on the date in question, then the Fair Market
Value shall be equal to the closing price reported by the applicable composite
transactions report for such date;
(ii)
If
the
ADSs were traded over-the-counter on the date in question and were classified
as
a national market issue or small cap issue, then the Fair Market Value shall
be
equal to the closing price quoted by the NASDAQ system for such
date;
(iii)
If
the
ADSs were traded over-the-counter on the date in question but were not
classified as a national market issue, then the Fair Market Value shall be
equal
to the mean between the last reported representative bid and asked prices quoted
by the applicable trading market for such date; and
3
(iv)
If
none
of the foregoing provisions is applicable, then the Fair Market Value shall
be
determined by the Committee in good faith on such basis as it deems
appropriate.
Whenever
possible, the determination of Fair Market Value by the Committee shall be
based
on the prices reported in the Wall
Street Journal.
Such
determination shall be conclusive and binding on all persons.
(s)
“Grant”
means
any
grant of an Award under the Plan.
(t)
“Incentive
Stock Option” or “ISO” means
an
incentive stock option described in Code section 422(b).
(u)
“Key
Employee” means
an
Employee, Director, Non-Employee Director or Consultant who has been selected
by
the Committee to receive an Award under the Plan.
(v)
“Non-Employee
Director” means
a
member of the Board who is not an Employee.
(w)
“Non-Employee
Independent Director” means
a
Non-Employee Director who:
(i)
is
not a
current Employee, is not a former Employee who received compensation for prior
services in the current year, and has not been an officer of the Company;
(ii)
did
not
directly or indirectly receive more than $60,000 in remuneration from the
Company during the current year, other than director fees; and
(iii)
did
not
receive more than $60,000 in remuneration from the Company during the prior
year, other than director fees.
(x)
“Nonstatutory
Stock Option” or “NSO” means
a
stock option that is not an ISO.
(y)
“Option”
means
an
ISO or NSO granted under the Plan entitling the Optionee to purchase
Shares.
(z)
“Optionee”
means
an
individual, estate or other entity that holds an Option.
(aa)
“Parent”
means
a
“parent corporation,” whether now or hereafter existing, as defined in
section 424(e) of the Code.
(bb)
“Participant”
means
an
individual or estate or other entity that holds an Award.
(cc)
“Plan”
means
this Gentium S.p.A. 2007 Stock Option Plan as it may be amended from time to
time.
(dd)
“Securities
Act” means
the
United States Securities Act of 1933, as amended.
4
(ee)
“Service”
means
service as an Employee, Director, Non-Employee Director or Consultant. A change
in the capacity in which the Participant renders service to the Company or
an
Affiliate as an Employee, Consultant, Director or Non-Employee Director or
a
change in the entity for which the Participant renders such service, provided
that there is no interruption or termination of the Participant’s service with
the Company or an Affiliate, shall not terminate a Participant’s Service. For
example, a change in status from an Employee of the Company to a Consultant
of
an Affiliate or a Director shall not constitute an interruption of
Service.
(ff)
“Share”
means
one
ordinary share of the Company.
(gg)
“Stock
Option Agreement” means
the
agreement described in Section 6 evidencing each Grant of an
Option.
(hh)
“Subsidiary”
means
a
“subsidiary corporation,” whether now or hereafter existing, as defined in
section 424(f) of the Code.
(ii)
“10-Percent
Shareholder” means
an
individual who owns more than ten percent (10%) of the total combined voting
power of all classes of outstanding stock of the Company, its Parent or any
of
its Subsidiaries. In determining stock ownership, the attribution rules of
section 424(d) of the Code shall be applied.
SECTION
3. ADMINISTRATION.
(a)
Administration
by Board. The
Board
shall administer the Plan unless and until the Board delegates administration
to
a Committee, as provided in Section 3(c).
(b)
Powers
of Board. The
Board
shall have the power, subject to, and within the limitations of, the express
provisions of the Plan:
(i)
to
determine from time to time which of the persons eligible under the Plan shall
be granted Awards; when and how each Award shall be granted; the provisions
of
each Award granted (which need not be identical), including the time or times
when a person shall be permitted to receive Shares pursuant to an Award; and
the
number of Shares with respect to which an Award shall be granted to each such
person;
(ii)
to
construe and interpret the Plan, and Awards granted under it, and to establish,
amend and revoke rules and regulations for its administration. The Board, in
the
exercise of this power, may correct any defect, omission or inconsistency in
the
Plan or in any Award Agreement, in a manner and to the extent it shall deem
necessary or expedient to make the Plan fully effective;
(iii)
to
amend
the Plan or an Award as provided in Section 11;
(iv)
to
terminate or suspend the Plan as provided in Section 11;
and
5
(v)
generally,
to exercise such powers and to perform such acts as the Board deems necessary
or
expedient to promote the best interests of the Company which are not in conflict
with the provisions of the Plan.
(c)
Delegation
to Committee.
(i)
The
Board
may delegate administration of the Plan to a Committee or Committees of the
Board, and the term “Committee” shall apply to persons to whom such authority
has been delegated. If administration is delegated to a Committee, the Committee
shall have, in connection with the administration of the Plan, the powers
theretofore possessed by the Board (and references in this Plan to the Board
shall thereafter be to the Committee), subject, however, to such resolutions,
not inconsistent with the provisions of the Plan, as may be adopted from time
to
time by the Board. The Board may abolish the Committee at any time and revest
in
the Board the administration of the Plan.
(ii)
With
respect to Awards granted to any Covered Employee, the Committee shall consist
of those individuals who are
outside Non-Employee Independent Directors.
The
Board
may also appoint one or more separate committees of the Board, each composed
of
directors of the Company who need not to be outside Non-Employee Independent
Directors.
Notwithstanding
the foregoing, the Board shall constitute the Committee and shall administer
the
Plan with respect to all Awards granted to Non-Employee Directors.
(d)
Effect
of Board’s Decision. All
determinations, interpretations and constructions made by the Board are not
subject to review by any person and shall be final, binding and conclusive
on
all persons pursuant to the relevant Italian law provisions.
(e)
Indemnification.
Each
member of the Committee, or of the Board, shall be indemnified and held harmless
by the Company against and from (i) any loss, cost, liability, or expense
that may be imposed upon or reasonably incurred by him or her in connection
with
or resulting from any claim, action, suit, or proceeding to which he or she
may
be a party or in which he or she may be involved by reason of any action taken
or failure to act under the Plan or any Award Agreement, and (ii) from any
and all amounts paid by him or her in settlement thereof, with the Company’s
approval, or paid by him or her in satisfaction of any judgment in any such
claim, action, suit, or proceeding against him or her, provided he or she shall
give the Company an opportunity, at its own expense, to handle and defend the
same before he or she undertakes to handle and defend it on his or her own
behalf, except for the case of fraud or gross negligence. The foregoing right
of
indemnification shall not be exclusive of any other rights of indemnification
to
which such persons may be entitled under the Company’s Certificate of
Incorporation or Bylaws, by contract, as a matter of law, or otherwise, or
under
any power that the Company may have to indemnify them or hold them
harmless.
6
SECTION
4. ELIGIBILITY.
(a)
General
Rules. Only
Employees, Directors, Non-Employee Directors and Consultants shall be eligible
for designation as Key Employees by the Committee.
(b)
Incentive
Stock Options. A
Key
Employee who is a 10-Percent Shareholder shall not be eligible for the grant
of
an ISO unless the requirements set forth in Sections
6(c) and 6(d) with respect to ISOs.
(c)
Non-Employee
Director Options. Non-Employee
Directors shall also be eligible to receive Options as described in this Section
4(c).
(i)
Each
Non-Employee Director shall automatically be granted an NSO to purchase 10,000
Shares (subject to adjustment under Section 7(a)) as a result of his or her
initial election as a Non-Employee Director. All NSOs granted pursuant to this
Section 4(c)(i) shall vest and become exercisable, provided the individual
is
serving as a Non-Employee Director of the Company as of the vesting date, as
follows: one-third of the total Shares subject to the NSO (rounded to nearest
whole number) one year from the date of grant, then in 24 equal monthly
installments commencing on the date one month and one year after the date of
grant.
(ii)
Upon
the
conclusion of each regular annual meeting of the Company’s shareholders
following his or her initial election, each eligible Non-Employee Director
who
is re-elected as a Non-Employee Director shall receive an NSO to purchase
5,000 Shares
(subject to adjustment under Section 11(a)). All NSOs granted pursuant to this
Section 4(c)(ii) shall vest and become exercisable provided the individual
is
serving as a Non-Employee Director of the Company as of the vesting date as
follows: one-twelfth of the total Shares subject to the NSO (rounded to nearest
whole number) on each monthly anniversary of the date of grant.
(iii)
All
NSOs
granted to Non-Employee Directors under this Section 4(c) shall become
exercisable in full in the event of Change in Control with respect to the
Company.
(iv)
The
Exercise Price under all NSOs granted to a Non-Employee Director under this
Section 4(c) shall be equal to one hundred percent (100%) of the Fair Market
Value of a Share on the date of grant.
(v)
All
NSOs
granted to a Non-Employee Director under this Section 4(c) shall terminate
on
the earlier of:
(A)
March
26,
2022; or
(B)
The
date
ninety (90) days after the termination of such Non-Employee Director’s Service
for any reason.
7
SECTION
5. SHARES
SUBJECT TO PLAN.
(a)
Basic
Limitation. Subject
to the provisions of Section 7(a), the stock issuable under the Plan shall
be
authorized but unissued Shares or treasury Shares (the latter, within the limits
set forth under Italian law). The aggregate number of Shares reserved for Awards
under the Plan shall not exceed 1,000,000 Shares.
(b)
Additional
Shares. If
Awards
are forfeited or terminate for any other reason before being exercised, then
the
Shares underlying such Awards shall again become available for Awards under
the
Plan.
SECTION
6. TERMS
AND CONDITIONS OF OPTIONS.
(a)
Stock
Option Agreement. Each
Grant of an Option under the Plan shall be evidenced by a Stock Option Agreement
between the Optionee and the Company. Such Option shall be subject to all
applicable terms and conditions of the Plan and may be subject to any other
terms and conditions that are not inconsistent with the Plan and that the
Committee deems appropriate for inclusion in a Stock Option Agreement. The
provisions of the various Stock Option Agreements entered into under the Plan
need not be identical. A Stock Option Agreement may provide that new Options
will be granted automatically to the Optionee when he or she exercises the
prior
Options. The Stock Option Agreement shall also specify whether the Option is
an
ISO or an NSO.
(b)
Number
of Shares. Each
Stock Option Agreement shall specify the number of Shares that are subject
to
the Option and shall provide for the adjustment of such number in accordance
with Section 7(a).
(c)
Exercise
Price. An
Option’s Exercise Price shall be established by the Board or the Committee and
set forth in a Stock Option Agreement. The Exercise Price of an ISO shall not
be
less than the higher of (i) 100% of the Fair Market Value (110% for 10-Percent
Shareholders) of a Share on the date of Grant, (ii) an amount corresponding,
as
of the date of exercise, to Euro 3.02 per Share and (iii) an amount
corresponding, as of the date of exercise, to the nominal value of each Share.
In the case of an NSO, a Stock Option Agreement may specify an Exercise Price
that varies in accordance with a predetermined formula while the NSO is
outstanding.
All
Exercise Prices must be paid in cash in compliance with the relevant Italian
law
provisions.
(d)
Exercisability
and Term. Each
Stock Option Agreement shall specify the date when all or any installment of
the
Option is to become exercisable. The Stock Option Agreement shall also specify
the term of the Option; provided that the term of an ISO shall in no event
end
after March 26,
2022.
No Option can be exercised after the expiration date provided in the applicable
Stock Option Agreement. A Stock Option Agreement may provide for accelerated
exercisability in the event of the Optionee’s death, Disability or retirement or
other events and may provide for expiration prior to the end of its term in
the
event of the termination of the Optionee’s Service. A Stock Option Agreement may
permit an Optionee to exercise an Option before it is vested, subject to the
Company’s right of repurchase over any Shares acquired under the unvested
portion of the Option (an “early exercise”), which right of repurchase shall (i)
lapse at the same rate the Option would have vested had there been no early
exercise and (ii) be exercised by the Company only within the strict limits
and
in compliance with the provisions of the Italian Civil Code. In no event shall
the Company be required to issue fractional Shares upon the exercise of an
Option.
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(e)
Modifications
or Assumption of Options. Within
the limitations of the Plan, the Board or the Committee may modify, extend
or
assume outstanding stock options or may accept the cancellation of outstanding
stock options (whether granted by the Company or by another issuer) in return
for the grant of new Options for the same or a different number of Shares and
at
the same or a different Exercise Price. The foregoing notwithstanding, no
modification of an Option shall, without the consent of the Optionee, alter
or
impair his or her rights or obligations under such Option.
(f)
Transferability
of Options. Except
as
otherwise provided in the applicable Stock Option Agreement and then only to
the
extent permitted by applicable law, no Option shall be transferable by the
Optionee other than by will or by the laws of descent and distribution. Except
as otherwise provided in the applicable Stock Option Agreement, an Option may
be
exercised during the lifetime of the Optionee only or by the guardian or legal
representative of the Optionee. No Option or interest therein may be assigned,
pledged or hypothecated by the Optionee during his or her lifetime, whether
by
operation of law or otherwise, or be made subject to execution, attachment
or
similar process.
(g)
Restrictions
on Transfer. Any
Shares issued upon exercise of an Option shall be subject to such rights of
repurchase, rights of first refusal and other transfer restrictions as the
Committee may determine. Such restrictions shall apply in addition to any
restrictions that may apply to holders of Shares generally and shall also comply
to the extent necessary with applicable law.
(h)
Incentive
Stock Option $100,000 Limitation. To
the
extent that the aggregate Fair Market Value (determined at the time of grant)
of
the Shares with respect to which ISOs are exercisable for the first time by
any
Optionee during any calendar year (under all plans of the Company and its
Affiliates) exceeds one hundred thousand dollars ($100,000), the Options or
portions thereof which exceed such limit (according to the order in which they
were granted) shall be treated as NSOs.
SECTION
7. PROTECTION
AGAINST DILUTION.
(a)
Adjustments.
In
the
event of a subdivision of the outstanding Shares, a declaration of a dividend
payable in Shares, a declaration of a dividend payable in a form other than
Shares in an amount that has a material effect on the price of Shares, a
combination or consolidation of the outstanding Shares (by reclassification
or
otherwise) into a lesser number of Shares, a recapitalization, reorganization,
merger, liquidation, spin-off or a similar occurrence (all without the receipt
of consideration), the Board or the Committee shall make such adjustments as
it,
in its reasonable discretion, deems appropriate in order to prevent the dilution
or enlargement of rights hereunder in one or more of:
(i)
the
number of Shares subject to automatic Grants under Section 4(c) and the number
of Shares available for future Awards under Section 5(a);
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(ii)
the
number of Shares covered by each outstanding Award; or
(iii)
the
Exercise Price under each outstanding Option.
(b)
Participant
Rights. Except
as
provided in this Section 7, a recipient of an Award shall have no rights by
reason of any issue by the Company of stock of any class or securities
convertible into stock of any class, any subdivision or consolidation of shares
of stock of any class, the payment of any stock dividend or any other increase
or decrease in the number of shares of stock of any class.
SECTION
8. EFFECT
OF A CORPORATE TRANSACTION.
(a)
Merger
or Reorganization. In
the
event that the Company is a party to a Corporate Transaction, outstanding Awards
shall be subject to the terms and conditions of the agreement memorializing
such
Corporate Transaction. Such agreement may provide, without limitation, for
the
assumption or substitution of outstanding Awards by the surviving corporation
or
its parent, for their continuation by the Company (if the Company is a surviving
corporation), for accelerated vesting or for their cancellation with or without
consideration.
(b)
Acceleration.
The
Committee may determine, at the time of granting an Award, or thereafter, that
such Award shall become fully exercisable as to all Shares subject to such
Award
in the event that a Change in Control occurs with respect to the
Company.
SECTION
9. LIMITATIONS
ON RIGHTS.
(a)
Retention
Rights. Neither
the Plan nor any Award granted under the Plan shall be deemed to give any
individual a right to remain an Employee, Consultant or Director of the Company.
The Company reserves the right to terminate the Service of any person at any
time, and for any reason, subject to applicable laws, the Company’s
Certificate of
Incorporation and
Bylaws and a written employment agreement (if any).
(b)
Shareholders’
Rights. A
Participant shall have no dividend rights, voting rights or other rights as
a
stockholder with respect to any Shares covered by his or her Award prior to
the
issuance of a stock certificate, or similar means of representations of the
Shares, for such Shares. No adjustment shall be made for cash dividends or
other
rights for which the record date is prior to the date when such certificate
is
issued, except as expressly provided in Section 7.
(c)
Regulatory
Requirements. Any
other
provision of the Plan notwithstanding, the obligation of the Company to issue
Shares under the Plan shall be subject to all applicable laws, rules and
regulations and such approval by any regulatory body as may be required. The
Company reserves the right to restrict, in whole or in part, the delivery of
Shares pursuant to any Award prior to the satisfaction of all legal requirements
relating to the issuance of such Shares, to their registration, qualification
or
listing or to an exemption from registration, qualification or
listing.
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SECTION
10. WITHHOLDING
TAXES.
(a)
Withholding
Obligations. The
Company will be entitled to make any applicable withholding or deduction on
account of any taxes or social security contributions due on benefits derived
from the Plan pursuant to applicable law. A Participant shall make arrangements
satisfactory to the Company for the satisfaction of such tax or social security
obligations that arise in connection with his or her Award. The Company shall
not be required to issue any Shares or make any cash payment under the Plan
until such obligations are fully satisfied.
SECTION
11. DURATION
AND AMENDMENTS.
(a)
Term
of the Plan. The
Plan
shall become effective on March 26, 2007, subject to the approval of the
Company’s shareholders. No Options shall be exercisable until such shareholder
approval is obtained. In the event that the shareholders fail to approve the
Plan within twelve (12) months after its adoption by the Board, any Awards
made
shall be null and void and no additional Awards shall be made. The Plan shall
terminate on March 26, 2022 or on any earlier date pursuant to Section 11(b)
of
the Plan.
(b)
Right
to Amend, Suspend or Terminate the Plan. The
Board
may amend, suspend or terminate the Plan at any time and for any reason. The
suspension or termination of the Plan, or any amendment thereof, shall not
affect any Award previously granted under the Plan. No Awards shall be granted
under the Plan after the Plan’s suspension or termination. An amendment of the
Plan shall be subject to the approval of the Company’s shareholders only to the
extent required by applicable laws, regulations or rules.
(c)
Right
to Amend Award. The
Board
at any time, and from time to time, may amend the terms of any one or more
Awards; provided, however, that the rights under any Award shall not be impaired
by any such amendment unless (i) the Company requests the consent of the
Participant and (ii) the Participant consents in writing.
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SECTION
12. EXECUTION.
To
record
the adoption of the Plan by the Board, the Company has caused its duly
authorized officer to execute this Plan on behalf of the Company.
| GENTIUM S.p.A. | ||
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By /s/
Xxxxx Xxxx Xxxxx, M.D.
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Xxxxx
Xxxx Xxxxx, M.D.
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Title
President
and Chief Executive Officer
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