EXHIBIT 10.1
ACURA PHARMACEUTICALS, INC.
2008 STOCK OPTION PLAN
1.
Purposes. The
Plan described herein, as amended and restated, shall be known as
the "Acura Pharmaceuticals, Inc. 2008 Stock Option Plan" (the
"Plan"). The purposes of the Plan are to attract and retain the
best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees,
Directors and Consultants of the Company or its Subsidiaries (as
defined in Section 2 below) to whom Option's may be granted under
this Plan, and to promote the success of the Company's
business.
Options
granted hereunder may be either "incentive stock options," as
defined in Section 422 of the Internal Revenue Code of 1986,
as amended, or "Non-ISO's," at the discretion of the Board and
as reflected in the terms of the written option
agreement.
The
Plan is not intended as an agreement or promise of employment.
Neither the Plan, nor any Option granted pursuant to the Plan,
shall confer on any person any right to continue in the employ
of the Company. The right of the Company to terminate an
Employee is not limited by the Plan, nor by any Option granted
pursuant to the Plan, unless such right is specifically
described by the terms of any such Option.
2.
Definitions. As
used herein, the following definitions shall apply:
(a)
"
409A Award Agreement” has
the meaning set forth in Section 24.1.
(b)
"Board" shall
mean the Committee, if one has been appointed, or the Board of
Directors of the Company, if no Committee is
appointed.
(c)
"Code" shall
mean the Internal Revenue Code of 1986, as amended.
(d)
"Committee" shall
mean the Committee appointed under Section 4(a)
hereof.
(e)
"Common Stock" shall
mean the Common Stock, $.01 par value, of the Company.
(f)
"Company" shall
mean Acura Pharmaceuticals, Inc., a New York
corporation.
(g)
"Continuous Service or Continuous Status as an
Employee" shall
mean the absence of any interruption or termination of service as
an Employee. Continuous Status as an Employee shall not be
considered interrupted in the case of sick leave, military leave,
or any other leave of absence approved by the Board.
(h)
"Director" shall
mean any person serving on the Board of Directors.
(i)
"Employee" shall
mean any person, including officers, employed by the Company or any
Parent or Subsidiary of the Company. The payment of a Director's
fee by the Company shall not be sufficient to constitute
"employment" by the Company.
(j)
"Exchange Act" shall
mean the Securities Exchange Act of 1934, as amended.
(k)
"
Fair Market Value "
shall mean (i) the closing price for a share of the Common Stock on
the exchange or quotation system which reports or quotes the
closing prices for a share of the Common Stock, as accurately
reported for any date (or, if no shares of Common Stock are traded
on such date, for the immediately preceding date on which shares of
Common Stock were traded) in The Wall Street Journal (or if The
Wall Street Journal no longer reports such price, in a newspaper or
trade journal selected by the Committee) or (ii) if no such price
quotation is available, the price which the Committee acting in
good faith determines through any reasonable valuation method that
a share of Common Stock might change hands between a willing buyer
and a willing seller, neither being under any compulsion to buy or
to sell and both having reasonable knowledge of the relevant facts
(provided that such valuation method complies with Treas.
Regulation 1.409A-1(b)(5)(iv), or any successor
regulation).
(l)
"Incentive Stock Option" shall
mean an Option intended to qualify as an incentive stock option
within the meaning of Section 422 of the Code.
(m)
"Non-ISO" shall
mean an Option to purchase stock which is not intended by the
Committee to satisfy the requirements of Section 422 of the Code. A
Non-ISO” shall also mean a non-qualified stock
option.
(n)
"Option" shall
mean a stock option granted pursuant to the Plan.
(o)
"Optioned Stock" shall
mean the Common Stock subject to an Option.
(p)
"Optionee" shall
mean an Employee, Director or Consultant who receives an
Option.
(q)
"Parent" shall
mean a "parent corporation," whether now or hereafter existing, as
defined in Section 424(e) of the Code.
(r)
"Plan" shall
mean this Acura Pharmaceuticals, Inc. 2008 Stock Option Plan, as
amended from time to time.
(s)
"Rule 16b-3" shall
mean Rule 16b-3 of the General Rules and Regulations under the
Exchange Act.
(t)
"Section 409A Award" has
the meaning set forth in Section 24.1.
(u)
"Share" shall
mean a share of the Common Stock, as adjusted in accordance with
Section 11 of the Plan.
(v)
"Subsidiary" shall
mean a "subsidiary corporation," whether now or hereafter existing,
as defined in Section 424(f) of the Code.
(w)
"Ten Percent Shareholder" shall
mean a person who owns (after taking into account the attribution
rules of Section 424(d) of the Code) more than ten percent (10%) of
the total combined voting power of all classes of stock of the
Company, or a Subsidiary.
3.
Stock
Authorized.
Subject
to the provisions of Section 11 of the Plan, the maximum
aggregate number of shares which may be Optioned and sold
under the Plan is six million (6,000,000) shares of
authorized, but unissued, or reacquired Common Stock. The
maximum number of shares which may be subject to Options
granted to any one person in any calendar year at fair market
value on the date of grant shall not exceed 600,000 shares
(subject to adjustment under Section 11 hereof consistent with
Section 162(m) of the Code). If the shares that would be
issued or transferred pursuant to any Options are not issued
or transferred and ceased to be issuable or transferable for
any reason, the number of shares subject to such Option will
no longer be charged against a limitation provided for herein
and may again be subject to Options. Notwithstanding the
proceeding sentence, with respect to any Option granted to any
individual who is a "covered employee" within the meaning of
Section 162(m) of the Code that is cancelled, the number of
shares subject to such Option shall continue to count against
the maximum number of shares which may be the subject of
Options granted to such individual. For purposes of the
preceding sentence if, after grant, the exercise price of an
Option is reduced, such reduction shall be treated as a
cancellation of such Option and the grant of a new Option, and
both the cancellation of the Option and the new Option shall
reduce the maximum number of shares for which Options may be
granted to the holder of such Option in a calendar
year.
If
an Option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased Shares
which were subject thereto shall, unless the Plan shall have
been terminated, become available for further grant under the
Plan.
4.
Administration.
(a)
Procedure .
The Company's Board of Directors may appoint a Committee to
administer the Plan which shall be constituted so as to permit the
Plan to continue to comply with Rule 16b-3, as currently in effect
or as hereafter modified or amended. The Committee appointed by the
Board of Directors shall consist of not less than two members of
the Board of Directors, to administer the Plan on behalf of the
Board of Directors, subject to such terms and conditions as the
Board of Directors may prescribe. Once appointed, the Committee
shall continue to serve until otherwise directed by the Board of
Directors. From time to time, the Board of Directors 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, or remove all
members of the Committee and thereafter directly administer the
Plan; provided, however, that at no time shall a Committee of less
than two members administer the Plan. Subject to the provisions of
the Plan, the Committee shall be authorized to interpret the Plan,
to establish, amend and rescind any rules and regulations relating
to the Plan and to make all other determinations necessary or
advisable for the administration of the Plan. Notwithstanding
anything to the contrary contained herein, no member of the
Committee shall serve as such under this Plan unless such person is
a "Non-Employee Director" within the meaning of Rule 16b-3(b)(3)(i)
of the Exchange Act. A majority vote of the members of the
Committee shall be required for all of its actions.
A
majority of the entire Committee shall constitute a quorum,
and the action of the majority of the Committee members
present at any meeting at which a quorum is present shall be
the action of the Committee. All decisions, determinations,
and interpretations of the Committee shall be final and
conclusive on all persons affected thereby and shall, as to
Incentive Stock Options, be consistent with Section 422 of the
Code. The Committee shall have all of the powers and duties
set forth herein, as well as such additional powers and duties
as the Board of Directors may delegate to it; provided,
however, that the Board of Directors expressly retains the
right in its sole discretion (i) to elect and to replace the
members of the Committee, and (ii) to terminate or amend this
Plan in any manner consistent with applicable
law.
(b)
Powers of the Committee .
Subject to the provisions of the Plan, the Committee shall have the
authority, in its discretion: (i) to grant Incentive Stock Options,
in accordance with Section 422 of the Code, or to grant Non-ISO's;
(ii) to determine the Fair Market Value of the Common Stock; (iii)
to determine the exercise price per share of Options to be granted
which exercise price shall be determined in accordance with Section
8 of the Plan; (iv) to determine the persons to whom (including,
without limitation, members of the Committee) and the time or times
at which, Options shall be granted and the number of Shares to be
represented by each Option; (v) to interpret the Plan; (vi) to
prescribe, amend and rescind rules and regulations relating to the
Plan; (vii) to determine the terms and provisions of each Option
granted (which need not be identical) and, with the consent of the
holder thereof, modify or amend each Option; (viii) to accelerate
or defer (with the consent of the Optionee) the exercise date of
any Option; (ix) to authorize any person to execute on behalf of
the Company any instrument required to effectuate the grant of an
Option previously granted by the Board; and (x) to make all other
determinations deemed necessary or advisable for the administration
of the Plan.
(c)
Subject to the provisions of this Plan and compliance with
Rule 16b-3 of the Exchange Act, the Committee may grant
options under this Plan to members of the Company's Board of
Directors, including members of the Committee, and in such
regard may determine:
(i)
the time at which any such Option shall be
granted;
(ii)
the number of Shares covered by any such Option;
(iii)
the time or times at which, or the period during which, any
such Option may be exercised or whether it may be exercised in
whole or in installments;
(iv)
the provisions of the agreement relating to any such Option;
and
(v)
the Option Price of Shares subject to an Option granted such
Board member.
(d)
Effect of the Committee's Decision .
All decisions, determinations and interpretations of the Committee
shall be final and binding on all Optionees and any other holders
of any Options granted under the Plan.
5.
Eligibility. Incentive
Stock Options may be granted only to Employees. Non-ISO's may be
granted to Employees as well as non-employee Directors and
Consultants of the Company as determined by the Board or any
Committee. Any person who has been granted an Option may, if he is
otherwise eligible, be granted an additional Option or
Options.
Each
grant of an Option shall be evidenced by an Option Agreement,
and each Option Agreement shall (1) specify whether the Option
is an Incentive Stock Option or a Non-ISO and (2) incorporate
such other terms and conditions as the Committee acting in its
absolute discretion deems consistent with the terms of this
Plan, including, without limitation, a restriction on the
number of shares of stock subject to the Option which first
become exercisable during any calendar year.
To
the extent that the aggregate Fair Market Value of the stock
of the Company subject to Incentive Stock Options granted
(determined as of the date such an Incentive Stock Option is
granted) which first become exercisable in any calendar year
exceeds $100,000, such Options shall be treated as Non-ISO's.
This $100,000 limitation shall be administered in accordance
with the rules under Section 422(d) of the Code.
6.
Effective Date and Term of Plan. The
effective date of this Plan ("Effective Date") shall be the date it
is adopted by the Board, provided the shareholders of the Company
(acting at a duly called meeting of such shareholders or by the
written consent of shareholders) approve this Plan within twelve
(12) months after such Effective Date. The effectiveness of Options
granted under this Plan prior to the date such shareholder approval
is obtained shall be contingent on such shareholder
approval.
Subject
to the provisions of Section 13 hereof, no Option shall be
granted under this Plan on or after the earlier
of
(1)
the tenth anniversary of the Effective Date of this Plan in
which event the Plan otherwise thereafter shall continue in
effect until all outstanding Options shall have been
surrendered or exercised in full or no longer are exercisable,
or
(2)
the date on which all of the Common Stock reserved for
issuance under Section 3 of this Plan has (as a result of the
exercise or expiration of Options granted under this Plan)
been issued or no longer is available for use under this Plan,
in which event the Plan also shall terminate on such
date.
7.
Term of Option. An
Option shall expire on the date specified in such Option, which
date shall not be later than the tenth anniversary of the date on
which the Option was granted, except that, if any Employee, at any
time an Incentive Stock Option is granted to him or her, owns stock
representing more than ten percent (10%) of the total combined
voting power of all classes of Common Stock (or, under Section
424(d) of the Code is deemed to own stock representing more than
ten percent (10%) of the total combined voting power of all such
classes of Common Stock, by reason of the ownership of such classes
of stock, directly or indirectly, by or for any brother, sister,
spouse, ancestor or lineal descendant of such Employee, or by or
for any corporation, partnership, state or trust of which such
Employee is a shareholder, partner or beneficiary), the Incentive
Stock Opti
| 
