Exhibit 10.39

 

FORTRESS BIOTECH, INC.
AMENDED AND RESTATED LONG TERM INCENTIVE PLAN

1. PURPOSE

The purpose of this Amended and Restated Long Term Incentive Plan (“LTIP”) is to
compensate employees, consultants, and other service providers of Fortress
Biotech, Inc. (the “Company”) based on their responsibilities and for their
contributions to the successful achievement of certain corporate goals and
objectives and to share the success and risks of the Company based upon
achievement of business goals. The LTIP consists of two compensation
opportunities: first, a program to grant equity interests in the Company and in
newly formed subsidiaries of the Company to the Participants (as hereafter
defined), and second, a performance-based bonus program that is designed to
result in performance-based compensation that is deductible without limit under
Section 162(m) of the Internal Revenue Code of 1986, as amended, and the
regulations and interpretations promulgated thereunder (the “Code”) to the
extent that the recipients of such compensation are employees subject to Section
162(m). The LTIP was initially effective as of July 16, 2015 (the “Effective
Date”), the day after the Company’s stockholders duly approved the LTIP. The
amendment and restatement of the LTIP is effective the day after the Company’s
stockholders duly approve such amendment and restatement.

2. PARTICIPANTS

The eligible participants hereunder (each a “Participant” and collectively the
“Participants”) are: (i) Lindsay A. Rosenwald, M.D., currently Chairman of the
Company’s Board of Directors, President and Chief Executive Officer; (ii)
Michael S. Weiss, currently Executive Vice Chairman, Strategic Development; and
(iii) any limited liability company or limited partnership owned and controlled
by either Dr. Rosenwald or Mr. Weiss, provided that such entity has a bona fide
service provider relationship with the Company (such entities, the
“Participating Entities”).

3. ADMINISTRATION

(a) The LTIP shall be administered by the LTIP Committee (the “Committee”),
which shall initially be the Compensation Committee of the Company’s Board of
Directors (the “Board”), which Compensation Committee currently consists
entirely of outside directors within the meaning of Section 162(m) of the Code.
In any event, the Committee shall consist of at least two outside directors of
the Company who are also members of the Compensation Committee. The Committee
shall have the sole discretion and authority to administer and interpret the
LTIP in accordance with its terms and the goals, including, with respect to the
performance-based bonus program, compliance with Section 162(m) of the Code.

(b) Subject to the express provisions and limitations set forth in the LTIP, the
Committee shall be authorized and empowered to do all things necessary or
desirable, in its sole discretion, in connection with the administration of the
LTIP, including, without limitation, the following:

(i) To prescribe, amend and rescind rules and regulations relating to the LTIP
and to define terms not otherwise defined herein;

(ii) To determine which Participants are eligible to be paid equity and
performance-based bonuses hereunder and to which of such Participants, if any,
equity and performance-based bonuses hereunder are actually paid;

(iii) To verify the extent to which the Company has satisfied any performance
goals or other conditions applicable to the payment of bonuses under the
performance-based bonus program of the LTIP;

(iv) To prescribe and amend the terms of any agreements or other documents under
the LTIP (which need not be identical);

(v) To determine whether, and the extent to which, adjustments are required
pursuant to Section 5;

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(vi) To interpret and construe the LTIP, any rules and regulations under the
LTIP, and the terms and conditions of any incentive opportunities provided
hereunder, and to make exceptions to any such provisions in good faith and for
the benefit of the Company; and

(vii) To make all other determinations deemed necessary or advisable for the
administration of the LTIP.

(c) All decisions, determinations and interpretations by the Committee regarding
the LTIP shall be final and binding on all Participants and all other persons
claiming any benefits under the LTIP. The Committee shall consider such factors
as it deems relevant to making such decisions, determinations and
interpretations including, without limitation, the recommendations or advice of
any director, officer or employee of the Company and such attorneys, consultants
and accountants as it may select. A Participant or other person claiming any
benefits under the LTIP may contest a decision or action by the Committee with
respect to such person or an actual or potential bonus under the LTIP only on
the grounds that such decision or action was arbitrary or capricious or was
unlawful, and any review of such decision or action shall be limited to
determining whether the Committee’s decision or action was arbitrary or
capricious or was unlawful.

EQUITY PROGRAM OF THE LTIP

4. EQUITY GRANTS TO PARTICIPANTS

(a) Upon the formation of a new subsidiary of the Company, the Company will
cause the subsidiary to issue to each Participant a number of shares of common
stock, or a warrant to purchase shares of common stock, of the subsidiary equal
to five percent (5%) of the total outstanding shares of common stock of the
subsidiary determined on a fully-diluted, as-converted into common stock basis
as of the date of formation (the “Shares”); provided that the Participant must
be employed by or otherwise providing services to the Company on such formation
date in order to receive the grant of Shares, and provided further that when
there are eligible Participating Entities, the 5% equity award will be allocated
as determined by the Committee between the Participating Entity and the
applicable individual Participant, such that, between a Participant and his
respective Participating Entity, if any, the total amount awarded under this
Section 4(a) shall not exceed five percent (5%) of the total outstanding shares
of common stock of the subsidiary. Such Shares will be subject to the same
restrictions on disposition as are applicable to other initial shareholders of
the subsidiary and such other restrictions as may be applicable under federal or
state securities laws.

(b) On January 1 of each calendar year following the Effective Date, the Company
will grant to each Participant a number of restricted shares of common stock of
the Company equal to one percent (1%) of the total outstanding shares of common
stock of the Company determined on a fully-diluted, as-converted into common
stock basis as of such date, multiplied by the percentage of achievement of the
goals and objectives established for the Participant by the Committee (the
“Restricted Shares”), provided that the Participant must be employed by, or
otherwise providing services to, the Company on such date in order to receive
the grant of Restricted Shares, and provided further that when there are
eligible Participating Entities, the 1% equity award will be allocated as
determined by the Committee between the Participating Entity and the applicable
individual Participant, such that, between a Participant and his respective
Participating Entity, if any, the total amount awarded under this Section 4(b)
shall not exceed one percent (1%) of the total outstanding shares of common
stock of the Company. Such goals and objectives shall be set by the Committee at
the beginning of each year ending on December 31, and the determination of the
achievement percentage of the goals and objectives shall be determined by the
Committee as of the end of such period. Such Restricted Shares shall be subject
to the Company’s Repurchase Option (as defined below) until both of the
following conditions are met: (i) there is an increase in the market
capitalization of the Company of at least $100,000,000 (measured from the
Effective Date) at any time following the grant, and (ii) the Participant is
either in the service of the Company as an employee, a Board member, or a
consultant on the 10th anniversary of Effective Date, or the Participant has had
had an involuntary Separation from Service (as defined below) from the Company.
However, the Company’s Repurchase Option on such Restricted Shares shall lapse
upon the occurrence of a Corporate Transaction (as defined in this Section) if
the Participant is in service on the date of the Corporate Transaction. Such
Restricted Shares shall be owned by the Participant without restriction when the
Company’s Repurchase Option lapses. If the Participant voluntarily separates
from service within 10 years of the Effective

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Date, or if the Company’s Repurchase Options have not lapsed by the 10-year
anniversary of the Effective Date, the Company will exercise its Repurchase
Option as set forth below.

(c) In addition to the awards described in Sections 4(a) and 4(b), the Committee
may, solely with the consent of the affected Participant, cancel any unvested
equity grants for common stock of the Company made to a Participant (whether
inducement grants, grants made pursuant to this LTIP, or any other grants) and
issue replacement awards for common stock of the Company, in amounts no greater
than the canceled award, and subject to such other terms, as the Committee may
determine. Such replacement awards may be subject to a repurchase option in
favor of the Company, which repurchase option may lapse upon such conditions as
the Committee determines. Any replacement awards granted pursuant to this
Section 4(c) will be evidenced by a written agreement between the Company and
the applicable Participant.

(d) Certain Definitions.  For purposes of this Section, “Separation from
Service” means the Participant is no longer in service with the Company in any
capacity (including without limitation service as an employee, Board member, or
consultant) and has a “separation from service” within the meaning of Section
409A of the Code; and “Corporate Transaction” means any of the following
transactions, provided, however, that the Committee shall determine under parts
(iv) and (v) whether multiple transactions are related, and its determination
shall be final, binding and conclusive:

(i) a merger or consolidation in which the Company is not the surviving entity,
except for a transaction the principal purpose of which is to change the state
in which the Company is incorporated;

(ii) the sale, transfer or other disposition of all or substantially all of the
assets of the Company;

(iii) the complete liquidation or dissolution of the Company;

(iv) any reverse merger or series of related transactions culminating in a
reverse merger (including, but not limited to, a tender offer followed by a
reverse merger) in which the Company is the surviving entity but (A) the shares
of common stock outstanding immediately prior to such merger are converted or
exchanged by virtue of the merger into other property, whether in the form of
securities, cash or otherwise, or (B) in which securities possessing more than
fifty percent (50%) of the total combined voting power of the Company’s
outstanding securities are transferred to a person or persons different from
those who held such securities immediately prior to such merger or the initial
transaction culminating in such merger; or

(v) acquisition in a single or series of related transactions by any person or
related group of persons (other than the Company or by a Company-sponsored
employee benefit plan) of beneficial ownership (within the meaning of Rule 13d-3
of the Exchange Act) of securities possessing more than fifty percent (50%) of
the total combined voting power of the Company’s outstanding securities.

The Restricted Shares will be subject to the same restrictions on disposition as
are applicable to other similarly-situated shareholders of the Company and such
other restrictions as may be applicable under federal or state securities laws.

(e) Company’s Repurchase Option.  The voluntary Separation from Service by a
Participant before a Corporate Transaction, or the passage of 10 years from the
Effective Date without either the Participant meeting the two conditions for
lapse of the Company’s Repurchase Option or a Corporate Transaction is each a
“Triggering Event.” In the event of a Triggering Event, the Company shall have
an option (the “Repurchase Option”) for a period of 90 days to repurchase any of
the unvested Restricted Shares at the price of $0.001 per share. The Repurchase
Option shall be exercised by the Company by written notice to the Participant,
which notice shall specify the number of Restricted Shares and the time (not
later than 30 days from the date of the Company’s notice) and place for the
closing of the repurchase of the Restricted Shares. Upon delivery of such notice
and payment of the purchase price in accordance with the terms herewith, the
Company shall become the legal and beneficial owner of the Restricted Shares
being repurchased and all rights and interests therein or relating thereto, and
the Company shall have the right to retain and transfer to its own name the
Restricted Shares being repurchased by the Company. Said purchase price shall be
paid, at the Company’s option, (i) by delivery of

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a check in the amount of the purchase price, (ii) by cancellation of any amount
of the Participant’s indebtedness to the Company equal to the purchase price for
the Restricted Shares being repurchased, or (iii) by a combination of (i) and
(ii) so that the combined payment and cancellation of indebtedness equals such
purchase price. Whenever the Company shall have the right to repurchase
Restricted Shares hereunder, the Board may designate and assign to one or more
assignees the right to exercise all or part of the Company’s repurchase rights
under this Agreement to purchase all or a part of such Restricted Shares.

(f) Release of Shares From Repurchase Option/Accelerated Vesting.  In the event
the Repurchase Option is triggered pursuant to a Triggering Event and the
Company (or its assigns) fails to exercise the Company’s option for the
repurchase of any or all of the Restricted Shares then, upon the expiration of
the 90 day option period, any and all such Restricted Shares not repurchased by
the Company shall be released from the Repurchase Option. In the event of any
Separation from Service of the Participant that does not constitute a Triggering
Event, all Restricted Shares shall be immediately released from the Repurchase
Option.

(g) Restriction on Transfer; Ownership.  Except for a transfer to a Related
Party (as defined below), none of the Restricted Shares or any beneficial
interest therein shall be transferred, pledged, hypothecated, encumbered or
otherwise disposed of in any way. For purposes of this Agreement, “Related
Party” shall mean a spouse, lineal ancestor or descendant, natural or adopted,
and a spouse of a lineal ancestor or descendant, a trust for the sole benefit of
such persons or any of them, a limited liability company (LLC) all of whose
owners are such persons, or a limited partnership (LP) all of whose partners are
such persons. All transferees of Restricted Shares or any interest therein
(including Related Parties) will receive and hold such Restricted Shares or
interest subject to the provisions of the LTIP, and shall agree in writing to
take such Restricted Shares or interest therein subject to all the terms of the
LTIP, including restrictions on further transfer. Any sale or transfer of the
Company’s shares shall be void unless the provisions of the LTIP are met.

(h) Stockholder Rights.  A Participant, as beneficial owner of the Shares and
Restricted Shares, shall have full voting and dividend rights with respect to
the Shares and Restricted Shares granted under subsections (a) and (b) of this
Section. Dividends, if any, declared and paid on the Restricted Shares before
the Company’s Repurchase Option on the Restricted Shares lapses (the “vesting
period”) shall be accrued by the Company during the vesting period and paid to
the Participant only at the end of the vesting period. Any such accrued
dividends shall be paid to the Participant no later than 30 days after the
vesting period. If any Restricted Shares are repurchased pursuant to the
Repurchase Option, then, on the date of such repurchase, the Participant shall
no longer have any rights as a stockholder with respect to such repurchased
shares or any interest therein, and the Participant shall not be entitled to
receive any accrued dividends previously declared on such repurchased shares.

PERFORMANCE-BASED BONUS PROGRAM OF THE LTIP

5. AMOUNT AND TERMS OF PERFORMANCE-BASED BONUS

Performance-based bonus payments hereunder are made in cash. The amount and
terms for payment of a performance-based bonus for each Participant will be
established by the Committee at its discretion, subject to the limits and
restrictions of this Section. The bonus hereunder shall be paid to a Participant
only to the extent that performance goals established by the Committee for a
performance period are met.

The business measures that may be used by the Committee to establish the
performance goals are limited to one or more of the following, which may be
applied with respect to the Company or any business unit and may be measured on
absolute terms or relative to a peer-group or other market measure basis:

• business development activities;

• clinical development activities;

• corporate operating profit;

• business unit operating profit;

• revenue;

• net revenue;

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• new business authorizations;

• backlog;

• customer cancellation rate;

• total shareholder return;

• stock price increase;

• return on equity;

• return on capital;

• earnings per share;

• gross profit;

• adjusted gross profit (profit before depreciation and amortization expense, as
well as stock-based compensation expense);

• EBIT, or earnings before interest and taxes;

• EBITDA, or earnings before interest, taxes, depreciation and amortization;

• adjusted EBITDA, or earnings before net interest and other expense, taxes, and
depreciation and amortization expense, adjusted to eliminate stock-based
compensation expense and expense related to the impairment of goodwill;

• ongoing earnings;

• cash flow (including operating cash flow, free cash flow, discounted cash flow
return on investment, and cash flow in excess of costs of capital);

• EVA, or economic value added;

• economic profit (net operating profit after tax, less a cost of capital
charge);

• SVA, or shareholder value added;

• net income (minimum);

• net loss (maximum);

• operating income;

• pre-tax profit margin;

• performance against business plan;

• customer service;

• corporate governance quotient or rating;

• market share;

• employee satisfaction;

• safety;

• employee engagement;

• supplier diversity;

• workforce diversity;

• operating margins;

• credit rating;

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• dividend payments;

• expenses;

• retained earnings;

• completion of licenses, partnerships, joint ventures, public or private
spinouts, acquisitions, divestitures and corporate restructurings;

• new product and/or drug development;

• environmental efforts; and

• individual goals based on objective business criteria underlying the goals
listed above and which pertain to individual effort as to achievement of those
goals or to one or more business criteria in the areas of litigation, human
resources, information services, production, inventory, support services,
facility development, government relations, market share or management.

The term “performance period” shall mean the period for which the
performance-based bonus is payable. The terms of the performance-based bonus
opportunity for a Participant shall be established by the Committee within the
earlier of: 90 days of the beginning of the performance period for which the
bonus will be earned, the expiration of 25% of the performance period, or the
date where the outcome of the qualification for the payment of the bonus
opportunity is no longer substantially uncertain.

The performance-based bonus opportunity must be based on one or more of the
foregoing business measures and the amount must be determined according to a
formula that is objectively applied based on the extent to which the objectively
determinable performance goals established by the Committee are met. However, in
its sole discretion, the Committee may reduce, but may not increase, a
Participant’s bonus calculated under the preceding formula. In determining the
amount of any reduced bonus, the Committee reserves the right to apply
subjective, discretionary criteria to determine a revised bonus amount. In any
event the total of all bonuses payable to all Participants for a year may not
exceed $1,000,000.

6. PAYMENT OF PERFORMANCE-BASED BONUS

The payment of a performance-based bonus for a given performance period requires
that the Participant be in the service of the Company (whether as employee,
Board member, or consultant) on the last day of the performance period. The
Committee may make exceptions to this requirement in the case of retirement,
total and permanent disability, or death, as determined by the Committee in its
sole discretion. Payment shall be made no later than 74 days after the end of
the performance period for which the bonus is earned. However, no
performance-based bonus shall be paid unless the Committee makes a certification
in writing as required to satisfy the conditions for exemption under Section
162(m) of the Code.

MISCELLANEOUS PROVISIONS

7. AMENDMENT AND TERMINATION

The Committee reserves the right to amend or terminate this LTIP at any time
with respect to future services of Participants. LTIP amendments may be adopted
by the Board or the Committee, and will require stockholder approval only to the
extent required to satisfy the conditions for exemption for performance-based
bonuses under Section 162(m) of the Code or the rules of the securities exchange
on which the Company’s common stock is listed. The LTIP shall continue in effect
for a term of ten (10) years from the Effective Date unless sooner terminated.

8. TAX WITHHOLDING

The Company shall have the right to make all payments or distributions pursuant
to the LTIP to Participants net of any applicable federal, state, local income,
payroll, or other taxes that the Company determines are required to be paid or
withheld. The Company shall have the right to withhold from wages or other
amounts otherwise payable to the Participants, as applicable, such withholding
taxes as may be required by law, or to otherwise require the Participants to pay
such withholding taxes. If a Participant shall fail to

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make such tax payments as are required, the Company shall, to the extent
permitted by law, have the right to deduct any such taxes from any payment of
any kind otherwise due to such Participant or to take such other action as may
be necessary to satisfy such withholding obligations.

9. SEVERABILITY

If any provision of the LTIP shall be held unlawful or otherwise invalid or
unenforceable in whole or in part by a court of competent jurisdiction, such
provision shall (a) be deemed limited to the extent that such court of competent
jurisdiction deems it lawful, valid and/or enforceable and as so limited shall
remain in full force and effect, and (b) not affect any other provision of the
LTIP or part thereof, each of which shall remain in full force and effect. If
the making of any payment or the provision of any other benefit provided for
under the LTIP shall be held unlawful or otherwise invalid or unenforceable by a
court of competent jurisdiction, such unlawfulness, invalidity or
unenforceability shall not prevent any other payment or benefit from being made
or provided under the LTIP, and if the making of any payment in full or the
provision of any other benefit provided for under the LTIP in full would be
unlawful or otherwise invalid or unenforceable, then such unlawfulness,
invalidity or unenforceability shall not prevent such payment or benefit from
being made or provided in part, to the extent that it would not be unlawful,
invalid or unenforceable, and the maximum payment or benefit that would not be
unlawful, invalid or unenforceable shall be made or provided under the LTIP.

10. NON-ASSIGNABILITY

Unless the Committee expressly states otherwise, no Participant may sell,
assign, convey, gift, pledge or otherwise hypothecate or alienate any bonus
opportunity or amounts determined by the Committee to be payable under the LTIP,
until such amounts (if any) are actually paid.

11. NON-EXCLUSIVITY OF PLAN

Neither the adoption of the LTIP by the Board nor the submission of the LTIP to
the stockholders of the Company for approval shall be construed as creating any
limitations on the power of the Board or the Committee to adopt such other
incentive arrangements as either may deem desirable going forward, including,
without limitation, cash or equity-based compensation arrangements, either tied
to performance or otherwise, and any such other arrangements as may be either
generally applicable or applicable only in specific cases.

12. CONTINUED SERVICE

Neither this LTIP, the selection of a person eligible to be paid bonuses under
this LTIP, the payment of any bonus to any Participant, nor any action by the
Company or the Committee related to this LTIP, shall be held or construed to
confer upon any person any right to be continued in the employ or other service
of the Company. The termination of service of any Participant shall be governed
by any valid written agreements between the Company and such Participant, and in
the absence of such agreements, such termination shall be at will. This LTIP is
not intended to limit the right of the Company to terminate the service of any
Participant whenever in the sole discretion of the Company its interest may so
require.

13. NO VESTED INTEREST OR RIGHT

At no time before the actual payout of a bonus to any Participant under the LTIP
shall any Participant accrue any vested interest or right whatsoever under the
LTIP, and the Company has no obligation to treat Participants identically under
the LTIP.

14. GOVERNING LAW

The LTIP and any agreements and documents hereunder shall be interpreted and
construed in accordance with the laws of the State of Delaware and applicable
federal law. The Committee may provide that any dispute concerning the LTIP
shall be presented and determined in such forum as the Committee may specify,
including through binding arbitration.

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