Exhibit 10.2
LEXICON PHARMACEUTICALS, INC.
NON-EMPLOYEE DIRECTORS’ STOCK OPTION
PLAN
This Plan initially was established
as the 2000 Non-Employee Directors’ Stock Option Plan,
effective as of April 12, 2000 (the “Initial
Plan”). The Initial Plan is hereby amended and
restated in its entirety and renamed the Non-Employee
Directors’ Stock Option Plan, effective as of its adoption by
the Board subject to approval by the Company’s
stockholders. The terms of this Plan shall supersede the
terms of Initial Plan in their entirety.
1. PURPOSES.
(a) ELIGIBLE
OPTION RECIPIENTS. The persons eligible to receive Options are the
Non-Employee Directors of the Company.
(c) AVAILABLE
OPTIONS. The purpose of the Plan is to provide a means by which
Non-Employee Directors may be given an opportunity to benefit from
increases in value of the Common Stock through the granting of
Nonstatutory Stock Options.
(d) GENERAL
PURPOSE. The Company, by means of the Plan, seeks to retain the
services of its Non-Employee Directors, to secure and retain the
services of new Non-Employee Directors and to provide incentives
for such persons to exert maximum efforts for the success of the
Company and its Affiliates.
(a) “AFFILIATE”
means any parent corporation or subsidiary corporation of the
Company, whether now or hereafter existing, as those terms are
defined in Sections 424(e) and (f), respectively, of the
Code.
(b) “ANNUAL
GRANT” means an Option granted annually to all Non-Employee
Directors who meet the specified criteria pursuant to subsection
6(b) of the Plan.
(c) “ANNUAL
MEETING” means the annual meeting of the stockholders of the
Company.
(d) “BOARD”
means the Board of Directors of the Company.
(e) “CODE”
means the Internal Revenue Code of 1986, as amended.
(f) “COMMON
STOCK” means the common stock, par value $.001 per share, of
the Company.
(g) “COMPANY”
means Lexicon Pharmaceuticals, Inc., a Delaware
corporation.
(h) “CONSULTANT”
means any person other than a Director or Employee who is engaged
by the Company or an Affiliate to render consulting or advisory
services and who is compensated for such services.
(i) “CONTINUOUS
SERVICE” means that the Optionholder’s service with the
Company or an Affiliate, whether as an Employee, Director or
Consultant, is not interrupted or terminated. The
Optionholder’s Continuous Service shall not be deemed to have
terminated merely because of a change in the capacity in which the
Optionholder renders service to the Company or an Affiliate as an
Employee, Consultant or Director or a change in the entity for
which the Optionholder renders such service, provided that there is
no interruption or termination of the Optionholder’s
Continuous Service. For example, a change in status from a
Non-Employee Director of the Company to a Consultant of an
Affiliate or an Employee of the Company will not constitute an
interruption of Continuous Service. The Board or the chief
executive officer of the Company, in that party’s sole
discretion, may determine whether Continuous Service shall be
considered interrupted in the case of any leave of absence approved
by that party, including sick leave, military leave or any other
personal leave.
(j) “DIRECTOR”
means a member of the Board of Directors of the Company.
(k) “DISABILITY”
means the permanent and total disability of a person within the
meaning of Section 22(e)(3) of the Code.
(l) “EMPLOYEE”
means any person employed by the Company 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.
(m) “EXCHANGE
ACT” means the Securities Exchange Act of 1934, as
amended.
(n) “FAIR
MARKET VALUE” means, as of any date, the value of the Common
Stock determined as follows:
(i) If
the Common Stock is listed on any established stock exchange or
traded on the Nasdaq Stock Market, the Fair Market Value of a share
of Common Stock shall be the closing sales price for such stock (or
the closing bid, if no sales were reported) as quoted on such
exchange or market (or the exchange or market with the greatest
volume of trading in the Common Stock) on the last market trading
day prior to the day of determination, as reported in The Wall
Street Journal or such other source as the Board deems
reliable.
(ii) In
the absence of such markets for the Common Stock, the Fair Market
Value shall be determined in good faith by the Board in such manner
as it deems appropriate and as is consistent with the requirements
of section 409A of the Code.
(o) “INITIAL
GRANT” means an Option granted to a Non-Employee Director who
meets the specified criteria pursuant to subsection 6(a) of the
Plan.
(p) “NON-EMPLOYEE
CHAIRMAN” means a Non-Employee Director serving as chairman
of the Board.
(q) “NON-EMPLOYEE
DIRECTOR” means a Director who is not an Employee.
(r) “OPTION”
means an option to purchase Common Stock granted pursuant to the
Plan.
(s) “OPTION
AGREEMENT” means a written agreement between the Company and
an Optionholder evidencing the terms and conditions of an
individual Option grant. Each Option Agreement shall be
subject to the terms and conditions of the Plan.
(t) “OPTIONHOLDER”
means a person to whom an Option is granted pursuant to the Plan
or, if applicable, such other person who holds an outstanding
Option.
(u) “PLAN”
means this Lexicon Pharmaceuticals, Inc. Non-Employee
Directors’ Stock Option Plan.
(v) “RULE
16B-3” means Rule 16b-3 promulgated under the Exchange Act or
any successor to Rule 16b-3, as in effect from time to
time.
(w) “SECURITIES
ACT” means the Securities Act of 1933, as amended.
(a) ADMINISTRATION
BY BOARD. The Board shall administer the Plan. The Board
may not delegate administration of the Plan to a
committee.
(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 the provisions of each Option to the extent not specified
in the Plan.
(ii) To
construe and interpret the Plan and Options 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
Option 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 Option as provided in Section 12.
(iv) 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
that are not in conflict with the provisions of the
Plan.
(c) EFFECT
OF BOARD’S DECISION. All determinations, interpretations and
constructions made by the Board in good faith shall not be subject
to review by any person and shall be final, binding and conclusive
on all persons.
4. SHARES
SUBJECT TO THE PLAN.
(a) SHARE
RESERVE. Subject to the provisions of Section 11 relating to
adjustments upon changes in the Common Stock, the Common Stock that
may be issued pursuant to Options shall not exceed in the aggregate
one million, two hundred thousand (1,200,000) shares of Common
Stock.
(b) REVERSION
OF SHARES TO THE SHARE RESERVE. If any Option shall for any reason
expire or otherwise terminate, in whole or in part, without having
been exercised in full, the shares of Common Stock not acquired
under such Option shall revert to and again become available for
issuance under the Plan. For clarity , shares
subject to an Option that are not delivered to an Optionholder
because (i) such Optionholder’s right to purchase such shares
are surrendered in payment of the exercise price for other shares
subject to such Option in a “net exercise,” or (ii)
such shares are withheld in satisfaction of the withholding of
taxes incurred in connection with the exercise of such Option, the
shares so surrendered or withheld shall not remain available for
subsequent issuance under the Plan.
(c) SOURCE
OF SHARES. The shares of Common Stock subject to the Plan may be
unissued shares or reacquired shares, bought on the market or
otherwise.
The Options as set forth in section
6 automatically shall be granted under the Plan to all Non-Employee
Directors.
6. NON-DISCRETIONARY
GRANTS.
(a) INITIAL
GRANTS. Without any further action of the Board, each person who is
elected or appointed for the first time to be a Non-Employee
Director automatically shall, upon the date of his or her initial
election or appointment to be a Non-Employee Director, be granted
an Initial Grant to purchase Thirty Thousand (30,000) shares of
Common Stock on the terms and conditions set forth
herein.
(b) ANNUAL
GRANTS. Without any further action of the Board, on the day
following each Annual Meeting, (i) each person who is then a
Non-Employee Director, but is not serving as Non-Employee Chairman,
and has been a Non-Employee Director for at least six (6) months,
automatically shall be granted an Annual Grant to purchase Ten
Thousand (10,000) shares of Common Stock and (ii) the
person, if any, who is then Non-Employee Chairman, and has been a
Non-Employee Director for at least six (6) months, automatically
shall be granted an Annual Option to purchase Twenty Thousand
(20,000) shares of Common Stock, each such Option to be granted on
the terms and conditions set forth herein.
Each Option shall be in such form and shall
contain such terms and conditions as required by the Plan. Each
Option shall contain such additional terms and conditions, not
inconsistent with the Plan, as the Board shall deem appropriate.
Each Option shall include (through incorporation of provisions
hereof by reference in the Option or otherwise) the substance of
each of the following provisions:
(a) TERM.
No Option shall be exercisable after the expiration of ten (10)
years from the date it was granted.
(b) EXERCISE
PRICE. The exercise price of each Option shall be one hundred
percent (100%) of the Fair Market Value of the stock subject
to
