Exhibit10.19

 

**BIO-TECHNOLOGY GENERAL CORP.**

**2001 STOCK OPTION PLAN**

 

1.             *Purpose*.  The purpose of the Bio-Technology GeneralCorp. 2001 Stock Option Plan (the “Plan”) is to enable Bio-Technology GeneralCorp. (the “Company”) and its stock­holders to secure the benefits of commonstock ownership by key personnel of the Company and its affiliates.  The Board of Directors of the Company (the“Board”) believes that the granting of options under the Plan will foster theCompany’s ability to attract, retain and motivate those individuals who will belargely responsible for the continued profitability and long-term future growthof the Company.

 

2.             *Stocksubject to the Plan*.  Subjectto adjustment as provided in Section 6 below, the Company may issue a total of10,000,000 shares of its common stock, $.01 par value (the “Common Stock”),pursuant to the Plan.  Such shares maybe either authorized and unissued or held by the Company in its treasury.  New options may be granted under the Planwith respect to shares of Common Stock which are covered by the unexercisedportion of an option which has terminated or expired by its terms, bycancellation or otherwise.

 

3.             *Administration*.  The Plan will be administered by the Boardor by a committee (the Board in such capacity or such committee being referredto as the “Committee”) consisting of at least three directors appointed by andserving at the pleasure of the Board. Subject to the provisions of the Plan, the Committee, acting in its soleand absolute discre­tion, will have full power and authority to grant optionsunder the Plan, to interpret the provisions of the Plan, to fix and interpretthe provisions of option agreements made under the Plan, to supervise theadministration of the Plan, and to take such other action as may be necessaryor desirable in order to carry out the provisions of the Plan.  A majority of the members of the Committeewill constitute a quorum.  The Committeemay act by the vote of a majority of its members present at a meeting at whichthere is a quorum or by unanimous written consent.  The decision of the Committee as to any disputed question, includ­ingquestions of construction, interpretation and administra­tion, will be finaland conclusive on all persons.  TheCommit­tee will keep a record of its proceedings and acts and will keep orcause to be kept such books and records as may be necessary in connection withthe proper administration of the Plan. The Company shall indemnify and holdharmless each member of the Committee and the Board and any employee of theCompany who provides assistance with the administration of the Plan from andagainst any loss, cost, liability (including any sum paid in settlement of aclaim with the approval of the Board), damage and expense (including theadvancement of reasonable legal and other expenses incident thereto) arisingout of or incurred in connection with the Plan, unless and except to the extentattributable to such person’s fraud or willful misconduct.

 

4.             *Eligibility*.  Options may be granted under the Plan topresent or future employees of the Company or an affiliate of the Company andto directors of, or consultants to, the Company or an affiliate who are notemployees, provided that incentive stock options (“Incentive Stock Options”)within the meaning of Section 422 of the Internal Revenue Code of 1986, asamended (the “Code”), may only be granted to employees of the Company or asubsidiary of the Company (a “Subsidiary”) within the meaning of Section 424(f)of the Code. 

 

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Subject to the provisions of the Plan, the Committee may from time totime select the persons to whom options will be granted, and will fix thenumber of shares covered by each such option and establish the terms andconditions thereof, including, without limitation, the exercise price,restrictions on exercisability of the option or on the disposition of theshares of Common Stock issued upon exercise of the option, and whether or notthe option is to be treated as an Incentive Stock Option.  For purposes hereof, affiliate of theCompany means a person that directly, or indirectly through one or moreintermediaries, controls, or is controlled by, or is under common control with,the Company.

 

5.             *Terms andConditions of Options*.  Eachoption granted under the Plan will be evidenced by a written agreement in aform approved by the Committee.  Eachsuch option will be subject to the terms and conditions set forth in thisSection and such additional terms and conditions not inconsistent with the Plan(and, in the case of an Incentive Stock Option, not inconsis­tent with theprovisions of the Code applicable thereto) as the Committee deems appropriate.

 

(a)           *OptionExercise Price*.  In the caseof an option which is not treated as an Incentive Stock Option, the exerciseprice per share may not be less than 85% of the Fair Market Value of a share ofCommon Stock on the date the option is granted; and, in the case of anIncentive Stock Option, the exercise price per share may not be less than 100%of the Fair Market Value of a share of Common Stock on the date the option isgranted (110% in the case of an optionee who, at the time the option isgranted, owns stock possessing more than 10% of the total combined voting powerof all classes of stock of the Company or a Subsidiary (a “ten percent stockholder”)).  For purposes hereof, the Fair Market Valueof a share of Common Stock on any date will be equal to the closing sale priceper share as published by a national securities exchange on which shares of theCommon Stock are traded on such date or, if there is no sale of Common Stock onsuch date, the average of the bid and asked prices on such exchange at theclose of trading on such date or, if shares of the Common Stock are not listedon a national securi­ties exchange on such date, the closing price or, if none,the average of the bid and asked prices in the over the counter market at theclose of trading on such date, or if the Common Stock is not traded on anational securities exchange or the over the counter market, the fair marketvalue of a share of the Common Stock on such date as determined in good faithby the Committee.

 

(b)           *OptionPeriod*.  The period duringwhich an option may be exercised will be fixed by the Committee and will notexceed ten years from the date the option is granted (five years in the case ofan Incentive Stock Option granted to a ten percent stockholder).

 

(c)           *Exercise ofOptions*.  Subject to earliertermination of the option as provided herein, unless the Committee determinesotherwise, options will be exercisable from and after the date of grant.  Vesting or other restrictions on theexercisability of an option will be set forth in the related optionagreement.  All or part of the exercisableportion of an option may be exercised at any time during the option period.  An option may be exercised by transmittingto the Company (1) a written notice specifying the number of shares to bepurchased, and (2) payment of the exercise price, together with the amount, ifany, deemed necessary by the Committee to enable the Company to satisfy its taxwithholding obligations with respect to such

 

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exercise (unless other arrangements acceptable to the Company are madewith respect to the satisfaction of such withholding obligations).

 

(d)           *Payment ofExercise Price*.  The purchaseprice of shares of Common Stock acquired pursuant to the exercise of an optiongranted under the Plan may be paid in cash, certified or bank check, and/orsuch other form of payment as may be permitted by the Committee from time totime, including, without limitation, shares of Common Stock which, if acquiredfrom the Company, have been owned by the optionee (free and clear of any liensor encumbrances) for at least six months or, if the Common Stock is publicly-traded,pursuant to a cashless exercise procedure established by the Company inaccordance with Regulation T of the Federal Reserve Board.

 

(e)           *Rights**as a Stockholder*.  No shares of Common Stock will be issued inrespect of the exercise of an option granted under the Plan until full paymenttherefore has been made and the applicable tax withholding obligation has beensatisfied or provided for, which withholding obligation, if satisfied withshares of Common Stock subject to an option being exercised, shall not exceedthe statutory minimum rate. The holder of an option will have no rights as astockholder with respect to any shares covered by an option until the date astock certificate for such shares is issued to him or her.  Except as otherwise provided herein, noadjustments shall be made for dividends or distributions of other rights forwhich the record date is prior to the date such stock certificate is issued.

 

(f)            *Nontransferability of**Options*.  No option granted under the Plan may beassigned or transferred except by will or by the applicable laws of descent anddistribution; and each such option may be exercised during the optionee’slifetime only by the optionee. Notwithstanding the preceding sentence, the Committee may, in its solediscretion, permit an optionee to transfer an option (other than an IncentiveStock Option), in whole or in part, to such persons and/or entities as areapproved by the Committee from time to time and subject to such terms andconditions as the Committee may determine from time to time.

 

(g)           *Termination of Em**ployment or Other Service*.  Except as otherwise provided herein ordetermined by the Committee, the following rules will apply with regard tooptions held by an optionee at the time of his or her termination of employmentor other service with the Company and its affiliates:

 

                (1)           *Termination due to Death or Disability*.  If an optionee’s employment or other serviceterminates due to his or her death or Disability (or if the optionee’semployment or other service is terminated by reason of his or her Disabilityand the optionee dies within one year of such termination of employment orother service), then: (A) that portion of an option that is not exercisable onthe date of termination will immediately terminate, and (B) that portion of anoption that is exercisable on the date of termination will remain exercisable,to the extent exercisable on the date of termination, by the optionee (or theoptionee’s designated beneficiary or representative) during the one year periodfollowing the date of termination (or, during the one year period after thelater death of a disabled optionee) or, if sooner, until the expiration of thestated term thereof, and, to the extent not exercised during such period, willthereupon terminate. For purposes hereof, unless otherwise determined by theCommittee, the term “Disability” means the inability of an optionee to performthe customary duties of his or her

 

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employment or other service for the Company or an affiliate by reasonof a physical or mental incapacity which is expected to result in death or beof indefinite duration.

 

                (2)           *Termination for Cause or at a Time when Cause Exists.*  If an optionee’s employment or other serviceis terminated by the Company or an affiliate for Cause or if, at the time ofhis or her termination, grounds for a termination for Cause exist, then anyoption held by the optionee (whether or not then exercisable) will immediatelyterminate and cease to be exercisable. For purposes hereof, unless otherwise determined by the Committee, theterm “Cause” means: (A) in the case where there is no employment or consultingagreement between the optionee and the Company or its affiliates at the time ofgrant or where such an agreement exists but does not define “cause” (or wordsof like import), the optionee’s dishonesty, fraud, insubordination, willfulmisconduct, refusal to perform services, unsatisfactory performance of servicesor material breach of any written agreement between the optionee and theCompany or its affiliates, or (B) in the case where there is an employment orconsulting agreement between the optionee and the Company or its affiliates atthe time of grant which defines “cause” (or words of like import), the meaningascribed to such term under such agreement.

 

                (3)           *Other Termination*.  Except as provided in subsections (1) and(2) above, if an optionee’s employment or other service terminates for anyreason or no reason, then: (A) that portion of an option held by the optioneethat is not exercisable on the date of termination will immediately terminate,and (B) that portion of an option that is exercisable on the date oftermination will remain exercisable, to the extent exercisable on the date of termination,by the optionee during the ninety day period following the date of terminationor, if sooner, until the expiration of the stated term thereof, and, to theextent not exercised during such period, will thereupon terminate.

 

(h)           *IncentiveStock Options*.  In the caseof an Incentive Stock Option granted under the Plan, at the time the option isgranted, the aggregate fair market value (determined at the time of grant) ofthe shares of Common Stock with respect to which Incentive Stock Options are exercisablefor the first time by the optionee during any calendar year may not exceed$100,000 (or such other amount required by the Code from time to time).

 

(i)            *Other**Provisions*.  The Committee may impose such other conditions with respect tothe exercise of options, including, without limitation, any conditions relatingto the application of federal or state securities laws, as it may deemnecessary or advisable.

 

(j)            *Maximum Optio**n Grant*.  The maximum option grant which may be madeto an employee of the Company or an affiliate in any calendar year shall notcover more than 250,000 shares.

 

6.             *CapitalChanges, Reorganization, Sale.*

 

(a)           *AdjustmentsUpon Changes in Capitalization*. The aggregate number and class of shares which may be issued under thePlan, the maximum number of shares for which options may be granted to anyemployee in any calendar year, the number and class of shares covered by eachoutstanding option and the exercise price per share shall all be adjustedproportionately for

 

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any increase or decrease in the number of issued shares of Common Stockresulting from a split-up or consolidation of shares or any like capitaladjustment, or the payment of any stock dividend.

 

(b)           *Accelerationof Vesting Upon Change of Control*. If there is a change of control of the Company (as defined in subsection(f) below), then all outstanding options shall become fully exercisable whetheror not the vesting conditions, if any, set forth in the related optionagreements have been satisfied, and each optionee shall have the right toexercise his or her options prior to such change of control and for as longthereafter as the option shall remain in effect in accor­dance with its termsand the provisions hereof.

 

(c)           *Conversionof Options on Stock for Stock Exchange*.  If the stockholders of the Company receive capital stock ofanother corporation (“Exchange Stock”) in exchange for their shares of CommonStock in any transaction involving a merger (other than a merger of the Companyin which the holders of Common Stock immediately prior to the merger have thesame proportion­ate ownership of Common Stock in the surviving corporationimmedi­ately after the merger), consolidation, acquisition of property orstock, separation or reorganization (other than a mere reincorporation or thecreation of a holding company), all options granted hereunder shall beconverted into options to purchase shares of Exchange Stock unless the Companyand the corporation issuing the Exchange Stock, in their sole discre­tion,determine that any or all such options granted hereunder shall not be convertedinto options to purchase shares of Exchange Stock but instead shall terminate,in which case the Company shall notify the optionees in writing orelectronically, at least 15 days prior to the consummation of the transaction,that the options shall become fully exercisable whether or not the vestingconditions, if any, set forth in the related option agreements have beensatisfied for the period specified in the notice (but in any case not less than15 days from the date of such notice). The amount and price of converted options shall be determined byadjusting the amount and price of the options granted hereunder in the sameproportion as used for determining the number of shares of Exchange Stock theholders of the Common Stock receive in such merger, consolida­tion, acquisitionof property or stock, separation or reorganization.  To the extent provided in subsection (b) above, the convert­edoptions shall be fully vested whether or not the vesting requirements set forthin the option agreement have been satisfied.

 

(d)           *FractionalShares*. In the event of any adjustment in the number of sharescovered by any option pursuant to the provi­sions hereof, any fractional sharesresulting from such adjust­ment will be disregarded and each such option willcover only the number of full shares resulting from the adjustment.

 

(e)           *Determinationof Board to be Final*.  Alladjustments under this Section 6 shall be made by the Board, and its determina­tionas to what adjustments shall be made, and the extent thereof, shall be final,binding and conclusive.  Unless anoptionee agrees otherwise, any change or adjustment to an Incentive StockOption shall be made in such a manner so as not to constitute a “modification”as defined in Section 424(h) of the Code and so as not to cause the optionee’sIncentive Stock Option issued hereunder to fail to continue to qualify as anIncentive Stock Option.

 

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(f)            *Change ofControl Defined*.  Forpurposes hereof, a change in control of the Company is deemed to occur if (1)there occurs (A) any consolidation or merger in which the Company is not thecontinuing or surviving entity or pursuant to which shares of the Common Stockwould be converted into cash, securities or other property, other than (x) aconsolidation or merger of the Company in which the holders of the Common Stockimmediately prior to the consolidation or merger have the same proportionateownership of common stock of the surviving corporation immediately after theconsolidation or merger, or (y) aconsolidation or merger which would result in the voting securities of theCompany outstanding immediately prior thereto continuing to represent (by beingconverted into voting securities of the continuing or surviving entity) morethan 50% of the combined voting power of the voting securities of the survivingor continuing entity immediately after such consolidation or merger and whichwould result in the members of the Board immediately prior to suchconsolidation or merger (including, for this purpose, any individuals whoseelection or nomination for election was approved by a vote of at leasttwo-thirds of such members), constituting a majority of the board of directors(or equivalent governing body) of the surviving or continuing entityimmediately after such consolidation or merger; or (B) any sale, lease,exchange or other transfer (in one transaction or a series of relatedtransactions) of all or substantially all the Company’s assets; (2) theCompany’s stockholders approve any plan or proposal for the liquidation ordissolution of the Company; (3) any person (as such term is used in Sections13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended) shallbecome the beneficial owner (within the meaning of Rule 13d-3 under said Act)of 40% or more of the Common Stock other than pursuant to a plan or arrangemententered into by such person and the Company; or (4) during any period of twoconsecutive years, individuals who at the beginning of such period consti­tutethe entire Board of Directors shall cease for any reason to constitute amajority of the Board unless the election or nomination for election by theCompany’s stockholders of each new director was approved by a vote of at leasttwo-thirds of the directors then still in office who were directors at thebeginning of the period.

 

7.             *Amendmentand Termination of the Plan*. The Board may amend or terminate the Plan.  Except as otherwise provided in the Plan with respect to equitychanges, any amendment which would increase the aggregate number of shares ofCommon Stock as to which options may be granted under the Plan, or modify theclass of employees eligible to receive options under the Plan shall, to theextent required by applicable law or exchange requirements, be subject to theapproval of the holders of the Common Stock. No amendment or termina­tion may affect adversely any outstanding optionwithout the written consent of the optionee.

 

8.             *No RightsConferred*.  Nothing containedherein will be deemed to give any individual any right to receive an optionunder the Plan or to be retained in the employ or service of the Company or anyaffiliate.

 

9.             *GoverningLaw*.  The Plan and eachoption agreement shall be governed by the laws of the State of Delaware,without regard to its principles of conflicts of law.

 

10.           *Decisionsand Determinations of Committee to be Final*.  Except to the extent rights or powers underthis Plan are reserved specifically to the discretion of the Board, theCommittee shall have full power and authority to interpret the Plan and anyoption agreement made under the Plan and to determine all issues which arisethereunder or in connection

 

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therewith, and the decision of the Board or the Committee, as the casemay be, shall be binding and conclusive on all interested persons.

 

11.           *Term of thePlan*.  The Plan shall beeffective as of April 30, 2001, the date on which it was adopted by the Board,subject to the approval of the stockholders of the Company.  The Plan will terminate on April 30, 2011,the date ten years after the date of its adoption by the Board, unless soonerterminated by the Board.  The rights ofoptionees under options outstanding at the time of the termination of the Planshall not be affected solely by reason of the termination and shall continue inaccordance with the terms of the option (as then in effect or thereafteramended).

 

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