Exhibit 10.36

 

FINAL

 

TRANSKARYOTIC THERAPIES, INC.

 

2002 STOCK INCENTIVE PLAN

 

1.             Purpose

 

The purpose of this 2002 Stock Incentive Plan (the “Plan”) of Transkaryotic
Therapies, Inc., a Delaware corporation (the “Company”), is to advance the
interests of the Company’s stockholders by enhancing the Company’s ability to
attract, retain and motivate persons who make (or are expected to make)
important contributions to the Company by providing such persons with equity
ownership opportunities and performance-based incentives and thereby better
aligning the interests of such persons with those of the Company’s
stockholders.  Except where the context otherwise requires, the term “Company”
shall include any of the Company’s present or future parent or subsidiary
corporations as defined in Sections 424(e) or (f) of the Internal Revenue Code
of 1986, as amended, and any regulations promulgated thereunder (the “Code”) and
any other business venture (including, without limitation, joint venture or
limited liability company) in which the Company has a controlling interest, as
determined by the Board of Directors of the Company (the “Board”).

 

2.             Eligibility

 

All of the Company’s employees, officers, directors, consultants and advisors
are eligible to be granted options or restricted stock awards (each, an “Award”)
under the Plan.  Each person who has been granted an Award under the Plan shall
be deemed a “Participant”.

 

3.             ADMINISTRATION AND DELEGATION

 

(A)           ADMINISTRATION BY BOARD OF DIRECTORS.  THE PLAN WILL BE
ADMINISTERED BY THE BOARD.  THE BOARD SHALL HAVE AUTHORITY TO GRANT AWARDS AND
TO ADOPT, AMEND AND REPEAL SUCH ADMINISTRATIVE RULES, GUIDELINES AND PRACTICES
RELATING TO THE PLAN AS IT SHALL DEEM ADVISABLE.  THE BOARD MAY CORRECT ANY
DEFECT, SUPPLY ANY OMISSION OR RECONCILE ANY INCONSISTENCY IN THE PLAN OR ANY
AWARD IN THE MANNER AND TO THE EXTENT IT SHALL DEEM EXPEDIENT TO CARRY THE PLAN
INTO EFFECT AND IT SHALL BE THE SOLE AND FINAL JUDGE OF SUCH EXPEDIENCY.  ALL
DECISIONS BY THE BOARD SHALL BE MADE IN THE BOARD’S SOLE DISCRETION AND SHALL BE
FINAL AND BINDING ON ALL PERSONS HAVING OR CLAIMING ANY INTEREST IN THE PLAN OR
IN ANY AWARD.  NO DIRECTOR OR PERSON ACTING PURSUANT TO THE AUTHORITY DELEGATED
BY THE BOARD SHALL BE LIABLE FOR ANY ACTION OR DETERMINATION RELATING TO OR
UNDER THE PLAN MADE IN GOOD FAITH.  SUBJECT TO THE PROVISIONS OF THE PLAN, THE
BOARD SHALL HAVE COMPLETE AUTHORITY, IN ITS SOLE DISCRETION, TO MAKE OR TO
SELECT THE MANNER OF MAKING ANY AND ALL DETERMINATIONS REQUIRED FOR THE
OPERATION OF THE PLAN, AND WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
SHALL HAVE THE AUTHORITY TO:

 

(1)           GRANT AWARDS TO ELIGIBLE INDIVIDUALS PURSUANT TO THE TERMS OF THE
PLAN;

 

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(2)           DETERMINE WHETHER AND TO WHAT EXTENT AWARDS ARE TO BE GRANTED
HEREUNDER;

 

(3)           DETERMINE THE NUMBER OF SHARES OF COMMON STOCK TO BE COVERED BY
EACH AWARD GRANTED HEREUNDER;

 

(4)           determine the terms and conditions, not inconsistent with the
terms of the Plan, of any Award (which need not be identical in every case),
including, but not limited to, the price of the restricted stock or the exercise
price of the option and any restriction or limitation, or any vesting
acceleration or forfeiture waiver regarding any Award and the shares of Common
Stock relating thereto, based on such factors as the Board shall determine;

 

(5)           DETERMINE WHETHER AND UNDER WHAT CIRCUMSTANCES AN AWARD MAY BE
SETTLED, AS PROVIDED IN SECTION 5(F);

 

(6)           DETERMINE WHETHER AND UNDER WHAT CIRCUMSTANCES AN AWARD MAY BE
EXERCISED WITHOUT A PAYMENT OF CASH AS PROVIDED IN SECTION 5(F); AND

 

(7)           DETERMINE WHETHER, TO WHAT EXTENT AND UNDER WHAT CIRCUMSTANCES
COMMON STOCK AND OTHER AMOUNTS PAYABLE WITH RESPECT TO AN AWARD UNDER THIS PLAN
SHALL BE DEFERRED EITHER AUTOMATICALLY OR AT THE ELECTION OF THE PARTICIPANT.

 

In making such determinations, the Board may take into account the nature of the
services rendered by the respective individuals, their present and potential
contributions to the success of the Company, and such other factors as the Board
in its discretion shall deem relevant.  Subject to the provisions of the Plan,
the Board shall also have complete authority, in its sole discretion, to
interpret the Plan, to prescribe, amend and rescind rules and regulations
relating to it, to determine the terms and provisions of any Award issued under
the Plan (and any agreements relating thereto), to resolve all disputes arising
under the Plan, and to make all other determinations necessary or advisable for
the administration of the Plan.

 

(B)           APPOINTMENT OF COMMITTEES. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, THE BOARD MAY DELEGATE ANY OR ALL OF ITS POWERS UNDER THE PLAN TO ONE OR
MORE COMMITTEES OR SUBCOMMITTEES OF THE BOARD (A “COMMITTEE”).  ALL REFERENCES
IN THE PLAN TO THE “BOARD” SHALL MEAN THE BOARD OR A COMMITTEE OF THE BOARD OR
THE EXECUTIVE OFFICERS REFERRED TO IN SECTION 3(C) TO THE EXTENT THAT THE
BOARD’S POWERS OR AUTHORITY UNDER THE PLAN HAVE BEEN DELEGATED TO SUCH
COMMITTEE.

 

(C)           DELEGATION TO EXECUTIVE OFFICERS.  TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THE BOARD MAY DELEGATE TO ONE OR MORE EXECUTIVE OFFICERS OF THE
COMPANY THE POWER TO GRANT AWARDS TO EMPLOYEES OR OFFICERS OF THE COMPANY OR ANY
OF ITS PRESENT OR FUTURE SUBSIDIARY CORPORATIONS AND TO EXERCISE SUCH OTHER
POWERS UNDER THE PLAN AS THE BOARD MAY DETERMINE, PROVIDED THAT THE BOARD SHALL
FIX THE TERMS OF THE AWARDS TO BE GRANTED BY SUCH EXECUTIVE OFFICERS (INCLUDING
THE EXERCISE OF SUCH AWARDS, WHICH MAY INCLUDE A FORMULA BY WHICH THE EXERCISE
PRICE WILL BE DETERMINED) AND THE MAXIMUM NUMBER OF SHARES SUBJECT TO AWARDS
THAT THE EXECUTIVE OFFICERS MAY GRANT; PROVIDED, FURTHER, HOWEVER, THAT NO
EXECUTIVE OFFICER SHALL BE

 

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authorized to grant Awards to any “executive officer” of the Company (as defined
in Rule 3b-7 under the Securities Act of 1934, as amended (the “Exchange Act”))
or to any “officer” of the Company (as defined by Rule 16a-1 under the Exchange
Act).

 

4.             STOCK AVAILABLE FOR AWARDS

 

(A)           NUMBER OF SHARES. SUBJECT TO ADJUSTMENT UNDER SECTION 7, AWARDS
MAY BE MADE UNDER THE PLAN FOR UP TO 2,500,000 SHARES OF COMMON STOCK, 0.01 PAR
VALUE PER SHARE, OF THE COMPANY (THE “COMMON STOCK”).  IF ANY AWARD EXPIRES OR
IS TERMINATED, SURRENDERED OR CANCELED WITHOUT HAVING BEEN FULLY EXERCISED OR IS
FORFEITED IN WHOLE OR IN PART (INCLUDING AS THE RESULT OF SHARES OF COMMON STOCK
SUBJECT TO SUCH AWARD BEING REPURCHASED BY THE COMPANY AT THE ORIGINAL ISSUANCE
PRICE PURSUANT TO A CONTRACTUAL REPURCHASE RIGHT) OR RESULTS IN ANY COMMON STOCK
NOT BEING ISSUED, THE UNUSED COMMON STOCK COVERED BY SUCH AWARD SHALL AGAIN BE
AVAILABLE FOR THE GRANT OF AWARDS UNDER THE PLAN, SUBJECT, HOWEVER, IN THE CASE
OF INCENTIVE STOCK OPTIONS (AS HEREINAFTER DEFINED), TO ANY LIMITATIONS UNDER
THE CODE.  SHARES ISSUED UNDER THE PLAN MAY CONSIST IN WHOLE OR IN PART OF
AUTHORIZED BUT UNISSUED SHARES OR TREASURY SHARES.

 

(B)           PER-PARTICIPANT LIMIT.  SUBJECT TO ADJUSTMENT UNDER SECTION 7, THE
MAXIMUM NUMBER OF SHARES OF COMMON STOCK WITH RESPECT TO WHICH AWARDS MAY BE
GRANTED TO ANY PARTICIPANT UNDER THE PLAN SHALL BE 500,000 PER CALENDAR YEAR. 
THE PER-PARTICIPANT LIMIT DESCRIBED IN THIS SECTION 4(B) SHALL BE CONSTRUED AND
APPLIED CONSISTENTLY WITH SECTION 162(M) OF THE CODE (“SECTION 162(M)”).

 

5.             STOCK OPTIONS

 

(A)           GENERAL.  THE BOARD MAY GRANT OPTIONS TO PURCHASE COMMON STOCK
(EACH, AN “OPTION”) AND DETERMINE THE NUMBER OF SHARES OF COMMON STOCK TO BE
COVERED BY EACH OPTION, THE EXERCISE PRICE OF EACH OPTION AND THE CONDITIONS AND
LIMITATIONS APPLICABLE TO THE EXERCISE OF EACH OPTION, INCLUDING CONDITIONS
RELATING TO APPLICABLE FEDERAL OR STATE SECURITIES LAWS, AS IT CONSIDERS
NECESSARY OR ADVISABLE.  AN OPTION WHICH IS NOT INTENDED TO BE AN INCENTIVE
STOCK OPTION (AS HEREINAFTER DEFINED) SHALL BE DESIGNATED A “NONSTATUTORY STOCK
OPTION”.

 

(B)           INCENTIVE STOCK OPTIONS.  AN OPTION THAT THE BOARD INTENDS TO BE
AN “INCENTIVE STOCK OPTION” AS DEFINED IN SECTION 422 OF THE CODE (AN “INCENTIVE
STOCK OPTION”) SHALL ONLY BE GRANTED TO EMPLOYEES OF THE COMPANY AND SHALL BE
SUBJECT TO AND SHALL BE CONSTRUED CONSISTENTLY WITH THE REQUIREMENTS OF SECTION
422 OF THE CODE.  THE COMPANY SHALL HAVE NO LIABILITY TO A PARTICIPANT, OR ANY
OTHER PARTY, IF AN OPTION (OR ANY PART THEREOF) WHICH IS INTENDED TO BE AN
INCENTIVE STOCK OPTION IS NOT AN INCENTIVE STOCK OPTION.

 

(C)           EXERCISE PRICE.  THE BOARD SHALL ESTABLISH THE EXERCISE PRICE AT
THE TIME EACH OPTION IS GRANTED AND SPECIFY IT IN THE APPLICABLE OPTION
AGREEMENT; PROVIDED, HOWEVER, THAT THE EXERCISE PRICE SHALL BE NOT LESS THAN
100% OF THE FAIR MARKET VALUE OF THE COMMON STOCK, AS DETERMINED BY THE BOARD AT
THE TIME THE OPTION IS GRANTED.

 

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(D)           DURATION OF OPTIONS.  EACH OPTION SHALL BE EXERCISABLE AT SUCH
TIMES AND SUBJECT TO SUCH TERMS AND CONDITIONS AS THE BOARD MAY SPECIFY IN THE
APPLICABLE OPTION AGREEMENT PROVIDED, HOWEVER, THAT NO OPTION WILL BE GRANTED
FOR A TERM IN EXCESS OF 10 YEARS.

 

(E)           EXERCISE OF OPTION.  OPTIONS MAY BE EXERCISED BY DELIVERY TO THE
COMPANY OF A WRITTEN NOTICE OF EXERCISE SIGNED BY THE PROPER PERSON OR BY ANY
OTHER FORM OF NOTICE (INCLUDING ELECTRONIC NOTICE) APPROVED BY THE BOARD
TOGETHER WITH PAYMENT IN FULL AS SPECIFIED IN SECTION 5(F) FOR THE NUMBER OF
SHARES FOR WHICH THE OPTION IS EXERCISED.

 

(F)            PAYMENT UPON EXERCISE.  COMMON STOCK PURCHASED UPON THE EXERCISE
OF AN OPTION GRANTED UNDER THE PLAN SHALL BE PAID FOR AS FOLLOWS:

 

(1)           IN CASH OR BY CHECK, PAYABLE TO THE ORDER OF THE COMPANY;

 

(2)           EXCEPT AS THE BOARD MAY, IN ITS SOLE DISCRETION, OTHERWISE PROVIDE
IN AN OPTION AGREEMENT, BY (I) DELIVERY OF AN IRREVOCABLE AND UNCONDITIONAL
UNDERTAKING BY A CREDITWORTHY BROKER TO DELIVER PROMPTLY TO THE COMPANY
SUFFICIENT FUNDS TO PAY THE EXERCISE PRICE AND ANY REQUIRED TAX WITHHOLDING OR
(II) DELIVERY BY THE PARTICIPANT TO THE COMPANY OF A COPY OF IRREVOCABLE AND
UNCONDITIONAL INSTRUCTIONS TO A CREDITWORTHY BROKER TO DELIVER PROMPTLY TO THE
COMPANY CASH OR A CHECK SUFFICIENT TO PAY THE EXERCISE PRICE AND ANY REQUIRED
TAX WITHHOLDING;

 

(3)           FOR SO LONG AS THE COMMON STOCK IS REGISTERED UNDER THE SECURITIES
EXCHANGE ACT OF 1934 (THE “EXCHANGE ACT”), BY DELIVERY OF SHARES OF COMMON STOCK
OWNED BY THE PARTICIPANT VALUED AT THEIR FAIR MARKET VALUE AS DETERMINED BY (OR
IN A MANNER APPROVED BY) THE BOARD IN GOOD FAITH (“FAIR MARKET VALUE”), PROVIDED
(I) SUCH METHOD OF PAYMENT IS THEN PERMITTED UNDER APPLICABLE LAW AND (II) SUCH
COMMON STOCK, IF ACQUIRED DIRECTLY FROM THE COMPANY WAS OWNED BY THE PARTICIPANT
AT LEAST SIX MONTHS PRIOR TO SUCH DELIVERY;

 

(4)           TO THE EXTENT PERMITTED BY THE BOARD AND PROVIDED FOR IN AN OPTION
AGREEMENT OR CERTIFICATE, IN ITS SOLE DISCRETION BY (I) DELIVERY OF A PROMISSORY
NOTE OF THE PARTICIPANT TO THE COMPANY ON TERMS DETERMINED BY THE BOARD, OR
(II) PAYMENT OF SUCH OTHER LAWFUL CONSIDERATION AS THE BOARD MAY DETERMINE; OR

 

(5)           BY ANY COMBINATION OF THE ABOVE PERMITTED FORMS OF PAYMENT.

 

(G)           SUBSTITUTE OPTIONS.  IN CONNECTION WITH A MERGER OR CONSOLIDATION
OF AN ENTITY WITH THE COMPANY OR THE ACQUISITION BY THE COMPANY OF PROPERTY OR
STOCK OF AN ENTITY, THE BOARD MAY GRANT OPTIONS IN SUBSTITUTION FOR ANY OPTIONS
OR OTHER STOCK OR STOCK-BASED AWARDS GRANTED BY SUCH ENTITY OR AN AFFILIATE
THEREOF.  SUBSTITUTE OPTIONS MAY BE GRANTED ON SUCH TERMS AS THE BOARD DEEMS
APPROPRIATE IN THE CIRCUMSTANCES, NOTWITHSTANDING ANY LIMITATIONS ON OPTIONS
CONTAINED IN THE OTHER SECTIONS OF THIS SECTION 5 OR IN SECTION 2.

 

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6.             RESTRICTED STOCK.

 

(A)           GRANTS.  THE BOARD MAY GRANT AWARDS ENTITLING RECIPIENTS TO
ACQUIRE SHARES OF COMMON STOCK, SUBJECT TO THE RIGHT OF THE COMPANY TO
REPURCHASE ALL OR PART OF SUCH SHARES AT THEIR ISSUE PRICE OR OTHER STATED OR
FORMULA PRICE (OR TO REQUIRE FORFEITURE OF SUCH SHARES IF ISSUED AT NO COST)
FROM THE RECIPIENT IN THE EVENT THAT CONDITIONS SPECIFIED BY THE BOARD IN THE
APPLICABLE AWARD ARE NOT SATISFIED PRIOR TO THE END OF THE APPLICABLE
RESTRICTION PERIOD OR PERIODS ESTABLISHED BY THE BOARD FOR SUCH AWARD (EACH, A
“RESTRICTED STOCK AWARD”).

 

(B)           TERMS AND CONDITIONS.  THE BOARD SHALL DETERMINE THE TERMS AND
CONDITIONS OF ANY SUCH RESTRICTED STOCK AWARD, INCLUDING THE CONDITIONS FOR
REPURCHASE (OR FORFEITURE) AND THE ISSUE PRICE, IF ANY.

 

(C)           STOCK CERTIFICATES.  ANY STOCK CERTIFICATES ISSUED IN RESPECT OF A
RESTRICTED STOCK AWARD SHALL BE REGISTERED IN THE NAME OF THE PARTICIPANT AND,
UNLESS OTHERWISE DETERMINED BY THE BOARD, DEPOSITED BY THE PARTICIPANT, TOGETHER
WITH A STOCK POWER ENDORSED IN BLANK, WITH THE COMPANY (OR ITS DESIGNEE).  AT
THE EXPIRATION OF THE APPLICABLE RESTRICTION PERIODS, THE COMPANY (OR SUCH
DESIGNEE) SHALL DELIVER THE CERTIFICATES NO LONGER SUBJECT TO SUCH RESTRICTIONS
TO THE PARTICIPANT OR IF THE PARTICIPANT HAS DIED, TO THE BENEFICIARY
DESIGNATED, IN A MANNER DETERMINED BY THE BOARD, BY A PARTICIPANT TO RECEIVE
AMOUNTS DUE OR EXERCISE RIGHTS OF THE PARTICIPANT IN THE EVENT OF THE
PARTICIPANT’S DEATH (THE “DESIGNATED BENEFICIARY”).  IN THE ABSENCE OF AN
EFFECTIVE DESIGNATION BY A PARTICIPANT, DESIGNATED BENEFICIARY SHALL MEAN THE
PARTICIPANT’S ESTATE.

 

7.             ADJUSTMENTS FOR CHANGES IN COMMON STOCK AND CERTAIN OTHER EVENTS

 

(A)           CHANGES IN CAPITALIZATION.  IN THE EVENT OF ANY STOCK SPLIT,
REVERSE STOCK SPLIT, STOCK DIVIDEND, RECAPITALIZATION, COMBINATION OF SHARES,
RECLASSIFICATION OF SHARES, SPIN-OFF OR OTHER SIMILAR CHANGE IN CAPITALIZATION
OR EVENT, OR ANY DISTRIBUTION TO HOLDERS OF COMMON STOCK OTHER THAN A NORMAL
CASH DIVIDEND, (I) THE NUMBER AND CLASS OF SECURITIES AVAILABLE UNDER THIS PLAN,
(II) THE PER-PARTICIPANT LIMIT SET FORTH IN SECTION 4(B), (III) THE NUMBER AND
CLASS OF SECURITIES AND EXERCISE PRICE PER SHARE SUBJECT TO EACH OUTSTANDING
OPTION, AND (IV) THE REPURCHASE PRICE PER SHARE SUBJECT TO EACH OUTSTANDING
RESTRICTED STOCK AWARD SHALL BE APPROPRIATELY ADJUSTED BY THE COMPANY (OR
SUBSTITUTED AWARDS MAY BE MADE, IF APPLICABLE) TO THE EXTENT THE BOARD SHALL
DETERMINE, IN GOOD FAITH, THAT SUCH AN ADJUSTMENT (OR SUBSTITUTION) IS NECESSARY
AND APPROPRIATE.  IF THIS SECTION 7(A) APPLIES AND SECTION 7(C) ALSO APPLIES TO
ANY EVENT, SECTION 7(C) SHALL BE APPLICABLE TO SUCH EVENT, AND THIS SECTION 7(A)
SHALL NOT BE APPLICABLE.

 

(B)           LIQUIDATION OR DISSOLUTION.  IN THE EVENT OF A PROPOSED
LIQUIDATION OR DISSOLUTION OF THE COMPANY, THE BOARD SHALL UPON WRITTEN NOTICE
TO THE PARTICIPANTS PROVIDE THAT ALL THEN UNEXERCISED OPTIONS WILL (I) BECOME
EXERCISABLE IN FULL AS OF A SPECIFIED TIME AT LEAST 10 BUSINESS DAYS PRIOR TO
THE EFFECTIVE DATE OF SUCH LIQUIDATION OR DISSOLUTION AND (II) TERMINATE
EFFECTIVE UPON SUCH LIQUIDATION OR DISSOLUTION, EXCEPT TO THE EXTENT EXERCISED
BEFORE SUCH EFFECTIVE DATE.  THE BOARD MAY SPECIFY THE EFFECT OF A LIQUIDATION
OR DISSOLUTION ON ANY RESTRICTED STOCK AWARD GRANTED UNDER THE PLAN AT THE TIME
OF THE GRANT.

 

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(C)           REORGANIZATION EVENTS

 

(1)           DEFINITION.  A “REORGANIZATION EVENT” SHALL MEAN:  (A) ANY MERGER
OR CONSOLIDATION OF THE COMPANY WITH OR INTO ANOTHER ENTITY AS A RESULT OF WHICH
ALL OF THE COMMON STOCK OF THE COMPANY IS CONVERTED INTO OR EXCHANGED FOR THE
RIGHT TO RECEIVE CASH, SECURITIES OR OTHER PROPERTY OR (B) ANY EXCHANGE OF ALL
OF THE COMMON STOCK OF THE COMPANY FOR CASH, SECURITIES OR OTHER PROPERTY
PURSUANT TO A SHARE EXCHANGE TRANSACTION.

 

(2)           CONSEQUENCES OF A REORGANIZATION EVENT ON OPTIONS.  UPON THE
OCCURRENCE OF A REORGANIZATION EVENT, OR THE EXECUTION BY THE COMPANY OF ANY
AGREEMENT WITH RESPECT TO A REORGANIZATION EVENT, THE BOARD SHALL PROVIDE THAT
ALL OUTSTANDING OPTIONS SHALL BE ASSUMED, OR EQUIVALENT OPTIONS SHALL BE
SUBSTITUTED, BY THE ACQUIRING OR SUCCEEDING CORPORATION (OR AN AFFILIATE
THEREOF).  FOR PURPOSES HEREOF, AN OPTION SHALL BE CONSIDERED TO BE ASSUMED IF,
FOLLOWING CONSUMMATION OF THE REORGANIZATION EVENT, THE OPTION CONFERS THE RIGHT
TO PURCHASE, FOR EACH SHARE OF COMMON STOCK SUBJECT TO THE OPTION IMMEDIATELY
PRIOR TO THE CONSUMMATION OF THE REORGANIZATION EVENT, THE CONSIDERATION
(WHETHER CASH, SECURITIES OR OTHER PROPERTY) RECEIVED AS A RESULT OF THE
REORGANIZATION EVENT BY HOLDERS OF COMMON STOCK FOR EACH SHARE OF COMMON STOCK
HELD IMMEDIATELY PRIOR TO THE CONSUMMATION OF THE REORGANIZATION EVENT (AND IF
HOLDERS WERE OFFERED A CHOICE OF CONSIDERATION, THE TYPE OF CONSIDERATION CHOSEN
BY THE HOLDERS OF A MAJORITY OF THE OUTSTANDING SHARES OF COMMON STOCK);
PROVIDED, HOWEVER, THAT IF THE CONSIDERATION RECEIVED AS A RESULT OF THE
REORGANIZATION EVENT IS NOT SOLELY COMMON STOCK OF THE ACQUIRING OR SUCCEEDING
CORPORATION (OR AN AFFILIATE THEREOF), THE COMPANY MAY, WITH THE CONSENT OF THE
ACQUIRING OR SUCCEEDING CORPORATION, PROVIDE FOR THE CONSIDERATION TO BE
RECEIVED UPON THE EXERCISE OF OPTIONS TO CONSIST SOLELY OF COMMON STOCK OF THE
ACQUIRING OR SUCCEEDING CORPORATION (OR AN AFFILIATE THEREOF) EQUIVALENT IN FAIR
MARKET VALUE TO THE PER SHARE CONSIDERATION RECEIVED BY HOLDERS OF OUTSTANDING
SHARES OF COMMON STOCK AS A RESULT OF THE REORGANIZATION EVENT.

 

Notwithstanding the foregoing, if the acquiring or succeeding corporation (or an
affiliate thereof) does not agree to assume, or substitute for, such Options,
then the Board shall, upon written notice to the Participants, provide that all
then unexercised Options will become exercisable in full as of a specified time
prior to the Reorganization Event and will terminate immediately prior to the
consummation of such Reorganization Event, except to the extent exercised by the
Participants before the consummation of such Reorganization Event; provided,
however, that in the event of a Reorganization Event under the terms of which
holders of Common Stock will receive upon consummation thereof a cash payment
for each share of Common Stock surrendered pursuant to such Reorganization Event
(the “Acquisition Price”), then the Board may instead provide that all
outstanding Options shall terminate upon consummation of such Reorganization
Event and that each Participant shall receive, in exchange therefor, a cash
payment equal to the amount (if any) by which (A) the Acquisition Price
multiplied by the number of shares of Common Stock subject to such outstanding
Options (whether or not then exercisable), exceeds (B) the aggregate exercise
price of such Options. To the extent all or any portion of an Option becomes
exercisable solely as a result of the first sentence of this paragraph, upon
exercise of such Option the Participant shall receive shares subject to a right
of repurchase by the Company or its successor at the Option exercise price.

 

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Such repurchase right (1) shall lapse at the same rate as the Option would have
become exercisable under its terms and (2) shall not apply to any shares subject
to the Option that were exercisable under its terms without regard to the first
sentence of this paragraph.

 

(3)           CONSEQUENCES OF A REORGANIZATION EVENT ON RESTRICTED STOCK
AWARDS.  UPON THE OCCURRENCE OF A REORGANIZATION EVENT, THE REPURCHASE AND OTHER
RIGHTS OF THE COMPANY UNDER EACH OUTSTANDING RESTRICTED STOCK AWARD SHALL INURE
TO THE BENEFIT OF THE COMPANY’S SUCCESSOR AND SHALL APPLY TO THE CASH,
SECURITIES OR OTHER PROPERTY WHICH THE COMMON STOCK WAS CONVERTED INTO OR
EXCHANGED FOR PURSUANT TO SUCH REORGANIZATION EVENT IN THE SAME MANNER AND TO
THE SAME EXTENT AS THEY APPLIED TO THE COMMON STOCK SUBJECT TO SUCH RESTRICTED
STOCK AWARD.

 

8.             GENERAL PROVISIONS APPLICABLE TO AWARDS

 

(A)           TRANSFERABILITY OF AWARDS.  EXCEPT AS THE BOARD MAY OTHERWISE
DETERMINE OR PROVIDE IN AN OPTION AGREEMENT OR CERTIFICATE, AWARDS SHALL NOT BE
SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE ENCUMBERED BY THE PERSON TO
WHOM THEY ARE GRANTED, EITHER VOLUNTARILY OR BY OPERATION OF LAW, EXCEPT BY WILL
OR THE LAWS OF DESCENT AND DISTRIBUTION, AND, DURING THE LIFE OF THE
PARTICIPANT, SHALL BE EXERCISABLE ONLY BY THE PARTICIPANT.  REFERENCES TO A
PARTICIPANT, TO THE EXTENT RELEVANT IN THE CONTEXT, SHALL INCLUDE REFERENCES TO
AUTHORIZED TRANSFEREES.

 

(B)           DOCUMENTATION.  EACH AWARD SHALL BE EVIDENCED IN SUCH FORM
(WRITTEN, ELECTRONIC OR OTHERWISE) AS THE BOARD SHALL DETERMINE.  EACH AWARD MAY
CONTAIN TERMS AND CONDITIONS IN ADDITION TO THOSE SET FORTH IN THE PLAN.

 

(C)           BOARD DISCRETION.  EXCEPT AS OTHERWISE PROVIDED BY THE PLAN, EACH
AWARD MAY BE MADE ALONE OR IN ADDITION OR IN RELATION TO ANY OTHER AWARD.  THE
TERMS OF EACH AWARD NEED NOT BE IDENTICAL, AND THE BOARD NEED NOT TREAT
PARTICIPANTS UNIFORMLY.

 

(D)           TERMINATION OF STATUS.  THE BOARD SHALL DETERMINE THE EFFECT ON AN
AWARD OF THE DISABILITY, DEATH, RETIREMENT, AUTHORIZED LEAVE OF ABSENCE OR
OTHER  CHANGE IN THE EMPLOYMENT OR OTHER STATUS OF A PARTICIPANT AND THE EXTENT
TO WHICH, AND THE PERIOD DURING WHICH, THE PARTICIPANT, THE PARTICIPANT’S LEGAL
REPRESENTATIVE, CONSERVATOR, GUARDIAN OR DESIGNATED BENEFICIARY MAY EXERCISE
RIGHTS UNDER THE AWARD.

 

(E)           WITHHOLDING.  EACH PARTICIPANT SHALL PAY TO THE COMPANY, OR MAKE
PROVISION SATISFACTORY TO THE BOARD FOR PAYMENT OF, ANY TAXES REQUIRED BY LAW TO
BE WITHHELD IN CONNECTION WITH AWARDS TO SUCH PARTICIPANT NO LATER THAN THE DATE
OF THE EVENT CREATING THE TAX LIABILITY.  EXCEPT AS THE BOARD MAY OTHERWISE
PROVIDE IN AN AWARD, WHEN THE COMMON STOCK IS REGISTERED UNDER THE EXCHANGE ACT,
PARTICIPANTS MAY SATISFY SUCH TAX OBLIGATIONS IN WHOLE OR IN PART BY DELIVERY OF
SHARES OF COMMON STOCK, INCLUDING SHARES RETAINED FROM THE AWARD CREATING THE
TAX OBLIGATION, VALUED AT THEIR FAIR MARKET VALUE; PROVIDED, HOWEVER, THAT THE
TOTAL TAX WITHHOLDING WHERE STOCK IS BEING USED TO SATISFY SUCH TAX OBLIGATIONS
CANNOT EXCEED THE COMPANY’S MINIMUM STATUTORY WITHHOLDING OBLIGATIONS (BASED ON
MINIMUM STATUTORY WITHHOLDING RATES FOR FEDERAL AND STATE TAX PURPOSES,
INCLUDING PAYROLL TAXES, THAT ARE APPLICABLE TO SUCH SUPPLEMENTAL TAXABLE

 

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income).  The Company may, to the extent permitted by law, deduct any such tax
obligations from any payment of any kind otherwise due to a Participant.

 

(F)            AMENDMENT OF AWARD.  THE BOARD MAY AMEND, MODIFY OR TERMINATE ANY
OUTSTANDING AWARD, INCLUDING BUT NOT LIMITED TO, SUBSTITUTING THEREFOR ANOTHER
AWARD OF THE SAME OR A DIFFERENT TYPE, CHANGING THE DATE OF EXERCISE OR
REALIZATION, AND CONVERTING AN INCENTIVE STOCK OPTION TO A NONSTATUTORY STOCK
OPTION, PROVIDED THAT THE PARTICIPANT’S CONSENT TO SUCH ACTION SHALL BE REQUIRED
UNLESS THE BOARD DETERMINES THAT THE ACTION, TAKING INTO ACCOUNT ANY RELATED
ACTION, WOULD NOT MATERIALLY AND ADVERSELY AFFECT THE PARTICIPANT.

 

(G)           CONDITIONS ON DELIVERY OF STOCK.  THE COMPANY WILL NOT BE
OBLIGATED TO DELIVER ANY SHARES OF COMMON STOCK PURSUANT TO THE PLAN OR TO
REMOVE RESTRICTIONS FROM SHARES PREVIOUSLY DELIVERED UNDER THE PLAN UNTIL (I)
ALL CONDITIONS OF THE AWARD HAVE BEEN MET OR REMOVED TO THE SATISFACTION OF THE
COMPANY, (II) IN THE OPINION OF THE COMPANY’S COUNSEL, ALL OTHER LEGAL MATTERS
IN CONNECTION WITH THE ISSUANCE AND DELIVERY OF SUCH SHARES HAVE BEEN SATISFIED,
INCLUDING ANY APPLICABLE SECURITIES LAWS AND ANY APPLICABLE STOCK EXCHANGE OR
STOCK MARKET RULES AND REGULATIONS, AND (III) THE PARTICIPANT HAS EXECUTED AND
DELIVERED TO THE COMPANY SUCH REPRESENTATIONS OR AGREEMENTS AS THE COMPANY MAY
CONSIDER APPROPRIATE TO SATISFY THE REQUIREMENTS OF ANY APPLICABLE LAWS, RULES
OR REGULATIONS.

 

(H)           ACCELERATION.  THE BOARD MAY AT ANY TIME PROVIDE THAT ANY AWARD
SHALL BECOME IMMEDIATELY EXERCISABLE IN FULL OR IN PART, FREE OF SOME OR ALL
RESTRICTIONS OR CONDITIONS, OR OTHERWISE REALIZABLE IN FULL OR IN PART, AS THE
CASE MAY BE.

 

9.             MISCELLANEOUS

 

(A)           NO RIGHT TO EMPLOYMENT OR OTHER STATUS.  NO PERSON SHALL HAVE ANY
CLAIM OR RIGHT TO BE GRANTED AN AWARD, AND THE GRANT OF AN AWARD SHALL NOT BE
CONSTRUED AS GIVING A PARTICIPANT THE RIGHT TO CONTINUED EMPLOYMENT OR ANY OTHER
RELATIONSHIP WITH THE COMPANY.  THE COMPANY EXPRESSLY RESERVES THE RIGHT AT ANY
TIME TO DISMISS OR OTHERWISE TERMINATE ITS RELATIONSHIP WITH A PARTICIPANT FREE
FROM ANY LIABILITY OR CLAIM UNDER THE PLAN, EXCEPT AS EXPRESSLY PROVIDED IN THE
APPLICABLE AWARD.

 

(B)           NO RIGHTS AS STOCKHOLDER.  SUBJECT TO THE PROVISIONS OF THE
APPLICABLE AWARD, NO PARTICIPANT OR DESIGNATED BENEFICIARY SHALL HAVE ANY RIGHTS
AS A STOCKHOLDER WITH RESPECT TO ANY SHARES OF COMMON STOCK TO BE DISTRIBUTED
WITH RESPECT TO AN AWARD UNTIL BECOMING THE RECORD HOLDER OF SUCH SHARES. 
NOTWITHSTANDING THE FOREGOING, IN THE EVENT THE COMPANY EFFECTS A SPLIT OF THE
COMMON STOCK BY MEANS OF A STOCK DIVIDEND AND THE EXERCISE PRICE OF AND THE
NUMBER OF SHARES SUBJECT TO SUCH OPTION ARE ADJUSTED AS OF THE DATE OF THE
DISTRIBUTION OF THE DIVIDEND (RATHER THAN AS OF THE RECORD DATE FOR SUCH
DIVIDEND), THEN AN OPTIONEE WHO EXERCISES AN OPTION BETWEEN THE RECORD DATE AND
THE DISTRIBUTION DATE FOR SUCH STOCK DIVIDEND SHALL BE ENTITLED TO RECEIVE, ON
THE DISTRIBUTION DATE, THE STOCK DIVIDEND WITH RESPECT TO THE SHARES OF COMMON
STOCK ACQUIRED UPON SUCH OPTION EXERCISE, NOTWITHSTANDING THE FACT THAT SUCH
SHARES WERE NOT OUTSTANDING AS OF THE CLOSE OF BUSINESS ON THE RECORD DATE FOR
SUCH STOCK DIVIDEND.

 

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(C)           EFFECTIVE DATE AND TERM OF PLAN.  THE PLAN SHALL BECOME EFFECTIVE
ON THE DATE ON WHICH IT IS ADOPTED BY THE BOARD, BUT NO AWARD GRANTED TO A
PARTICIPANT THAT IS INTENDED TO COMPLY WITH SECTION 162(M) SHALL BECOME
EXERCISABLE, VESTED OR REALIZABLE, AS APPLICABLE TO SUCH AWARD, UNLESS AND UNTIL
THE PLAN HAS BEEN APPROVED BY THE COMPANY’S STOCKHOLDERS TO THE EXTENT
STOCKHOLDER APPROVAL IS REQUIRED BY SECTION 162(M) IN THE MANNER REQUIRED UNDER
SECTION 162(M) (INCLUDING THE VOTE REQUIRED UNDER SECTION 162(M)).  NO AWARDS
SHALL BE GRANTED UNDER THE PLAN AFTER THE COMPLETION OF TEN YEARS FROM THE
EARLIER OF (I) THE DATE ON WHICH THE PLAN WAS ADOPTED BY THE BOARD OR (II) THE
DATE THE PLAN WAS APPROVED BY THE COMPANY’S STOCKHOLDERS, BUT AWARDS PREVIOUSLY
GRANTED MAY EXTEND BEYOND THAT DATE.

 

(D)           AMENDMENT OF PLAN.  THE BOARD MAY AMEND, SUSPEND OR TERMINATE THE
PLAN OR ANY PORTION THEREOF AT ANY TIME, PROVIDED THAT TO THE EXTENT REQUIRED BY
SECTION 162(M), NO AWARD GRANTED TO A PARTICIPANT THAT IS INTENDED TO COMPLY
WITH SECTION 162(M) AFTER THE DATE OF SUCH AMENDMENT SHALL BECOME EXERCISABLE,
REALIZABLE OR VESTED, AS APPLICABLE TO SUCH AWARD, UNLESS AND UNTIL SUCH
AMENDMENT SHALL HAVE BEEN APPROVED BY THE COMPANY’S STOCKHOLDERS IF REQUIRED BY
SECTION 162(M) (INCLUDING THE VOTE REQUIRED UNDER SECTION 162(M)).

 

(E)           GOVERNING LAW.  THE PROVISIONS OF THE PLAN AND ALL AWARDS MADE
HEREUNDER SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF DELAWARE, WITHOUT REGARD TO ANY APPLICABLE CONFLICTS OF LAW.

 

Board Approved Plan on March 6, 2002

 

Stockholders Approved Plan on June 6, 2002

 

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AMENDMENT NO. 1

TO

TRANSKARYOTIC THERAPIES, INC.

2002 STOCK INCENTIVE PLAN

 

1.             The following subsection is hereby inserted immediately following
section 6(c) of the Transkaryotic Therapies, Inc. 2002 Stock Incentive Plan (the
“2002 Plan”):

 

“(d)         Vesting of Restricted Stock Awards.  Any Restricted Stock Award, to
the extent such Award vests other than on the basis of the passage of time, will
not vest in full until at least one year from the date of the Award unless such
Award vests in full as a result of a change in control of the Company or from
the death or disability of the Participant. Any Restricted Stock Award, to the
extent such Award vests on the basis of the passage of time, will not vest in
full until at least three years from the date of the Award unless such Award
vests in full as a result of a change in control of the Company or from the
death or disability of the Participant.”

 

2.             Section 8(d) of the Plan is hereby deleted in its entirety and
the following is inserted in lieu thereof:

 

“(d)         Termination of Status.  Upon the disability, death, retirement,
authorized leave of absence or other change in the employment or other status of
a Participant in the Plan, the Participant, the Participant’s legal
representative, conservator, guardian or designated beneficiary may exercise
rights under an Award for ninety (90) days following the date of such event.”

 

3.             Section 8(f) (“Amendment of Award”) of the Plan is hereby deleted
in its entirety.

 

4.             Section 9(d) of the Plan is hereby deleted in its entirety and
the following is inserted in lieu thereof:

 

“(d)         Amendment of Plan.  The Board may amend, suspend or terminate the
Plan or any portion thereof at any time, provided that to the extent required by
Section 162(m), no Award granted to a Participant that is intended to comply
with Section 162(m) after the date of such amendment shall become exercisable,
realizable or vested, as applicable to such Award, unless and until such
amendment shall have been approved by the Company’s stockholders if required by
Section 162(m) (including the vote required under Section 162(m)).  The Board
may not amend, suspend or terminate the Plan or any portion thereof at any time
without stockholder approval if such approval is required by law, or the rules
of the Securities and Exchange Commission, the Internal Revenue Service or
(other than  Section 162(m)), or The Nasdaq National Market.”

 

Amendment Approved by Board on September 19, 2002

 

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