**EXHIBIT 10.1**

 

**V.I. TECHNOLOGIES, INC.**

**1998 Equity Incentive Plan**

 

Section 1.*    Purpose*

 

The purpose of the V.I. Technologies, Inc. 1998 Equity Incentive Plan (the “Plan”) is to attractand retain key employees and directors and consultants of the Company and its Affiliates, to provide an incentive for them to achieve long-range performance goals, and to enable them to participate in the long-term growth of the Company by grantingAwards with respect to the Company’s Common Stock. 

 

Section 2.*    Definitions*

 

“Affiliate” means any business entity in which the Company owns directly or indirectly 50% or more of the total combined voting power or has a significant financial interest as determined by the Committee.

 

“Award” means any Option, StockAppreciation Right, Performance Share, Restricted Stock, Stock Unit or Other Stock-Based Award awarded under the Plan. 

 

“Board” means the Board of Directors of the Company. 

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and any successor tosuch Code. 

 

“Committee” means acommittee comprised of not less than two members of the Board appointed by the Board to administer the Plan or a specified portion thereof. If the Committee is authorized to grant Awards to a Reporting Person or a Covered Employee, each member shallbe a “Non-Employee Director” or the equivalent within the meaning of Rule 16b-3 under the Securities Exchange Act of1934 or any successor provision, as applicable to the Company at the time (“Rule16b-3”), or an “outsidedirector” or the equivalent within the meaning of Section 162(m) of the Code, respectively. In the event no such Committee is appointed, then “Committee” means the Board. 

 

“Common Stock” or “Stock” means the Common Stock, $0.01 par value, of the Company.

 

“Company” means V.I. Technologies,Inc. 

 

“Covered Employee” means a personwhose income is subject to Section 162(m) of the Code. 

 

“Designated Beneficiary” means the beneficiary designated by a Participant, in a manner determined by the Committee, to receive amounts due or exercise rights of the Participant in the event of the Participant’s death.In the absence of an effective designation by a Participant, “Designated Beneficiary” shall mean the Participant’s estate. 

 

“Effective Date” means January 25, 1996. 

 

“Fair Market Value” means, with respect to Common Stock or any other property, the fair marketvalue of such property as determined by the Committee in good faith or in the manner established by the Committee from time to time. 

 

“Incentive Stock Option” means an option to purchase shares of Common Stock awarded to a Participant under Section 6 that is intended to meet the requirements of Section 422 of the Code or any successor provision.

 

“Nonstatutory Stock Option” means anoption to purchase shares of Common Stock awarded to a Participant under Section 6 that is not intended to be an Incentive Stock Option. 

 

“Option” means an Incentive Stock Option or a Nonstatutory Stock Option. 

 

“Other Stock-Based Award” means an Award, other thanan Option, Stock Appreciation Right, Performance Share, Restricted Stock or Stock Unit, having a Common Stock element and awarded to a Participant under Section 11. 

 

“Participant” means a person selected by the Committee to receive an Award under the Plan.

 

“Performance Cycle” or“Cycle” means the period of time selected by the Committee during which performance is measured for the purpose of determining the extent to which an award of Performance Shares has been earned. 

 

“Performance Shares” mean shares of Common Stock,which may be earned by the achievement of performance goals, awarded to a Participant under Section 8. 

 

“Reporting Person” means a person subject to Section 16 of the Securities Exchange Act of 1934 or any successor provision.

 

“Restricted Period” means the periodof time during which an Award may be forfeited to the Company pursuant to the terms and conditions of such Award. 

 

“Restricted Stock” means shares of Common Stock subject to forfeiture awarded to a Participant under Section 9. 

 

“Stock Appreciation Right” or “SAR” meansa right to receive any excess in value of shares of Common Stock over the exercise price awarded to a Participant under Section 7. 

 

“Stock Unit” means an award of Common Stock or units that are valued in whole or in part by reference to, or otherwise based on,the value of Common Stock, awarded to a Participant under Section 10. 

 

Section 3.*    Administration*

 

The Plan shall be administered by the Committee, provided that the Board may in any instance perform any of the functions delegated to the Committee hereunder. The Committee shall select theParticipants to receive Awards and shall determine the terms and conditions of the Awards. The Committee shall have authority to adopt, alter and repeal such administrative rules, guidelines and practices governing the operation of the Plan as itshall from time to time consider advisable, and to interpret the provisions of the Plan. The Committee’s decisions shall be final and binding. To the extent permitted by applicable law, the Committee may delegate to one or more executiveofficers of the Company the power to make Awards to Participants who are not Reporting Persons and all determinations under the Plan with respect thereto, provided that the Committee shall fix the maximum amount of such Awards for all suchParticipants and a maximum for any one Participant. 

 

 

2 

Section 4.*    Eligibility*

 

All employees and, in the case of Awards other than IncentiveStock Options, Directors and consultants of the Company or any Affiliate, capable of contributing significantly to the successful performance of the Company, other than a person who has irrevocably elected not to be eligible, are eligible to beParticipants in the Plan. Incentive Stock Options may be awarded only to persons eligible to receive such Options under the Code. 

 

Section 5.*    Stock Available for Awards*

 

(a) Subject to adjustment under subsection (b), Awards may be made under the Plan for up to 4,000,000 sharesof Common Stock. If any Award in respect of shares of Common Stock expires or is terminated unexercised or is forfeited, the shares subject to such Award, to the extent of such expiration, termination or forfeiture, shall again be available foraward under the Plan. Common Stock issued through the assumption or substitution of outstanding grants from an acquired company shall not reduce the shares available for Awards under the Plan. Shares issued under the Plan may consist in whole or inpart of authorized but unissued shares or treasury shares. 

 

(b) In the event that the Committee determines that any stock dividend, extraordinary cash dividend, creation of a class of equity securities, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination,exchange of shares, warrants or rights offering to purchase Common Stock at a price substantially below fair market value, or other similar transaction affects the Common Stock such that an adjustment is required in order to preserve the benefits orpotential benefits intended to be made available under the Plan, then the Committee (subject, in the case of Incentive Stock Options, to any limitation required under the Code) shall equitably adjust any or all of (i) the number and kind of sharesin respect of which Awards may be made under the Plan, (ii) the number and kind of shares subject to outstanding Awards, and (iii) the award, exercise or conversion price with respect to any of the foregoing, and if considered appropriate, theCommittee may make provision for a cash payment with respect to an outstanding Award, provided that the number of shares subject to any Award shall always be a whole number. 

 

Section 6.    *Stock Options*

 

(a) Subject to the provisions of the Plan, the Committee mayaward Incentive Stock Options and Nonstatutory Stock Options and determine the number of shares to be covered by each Option, the option price therefor and the conditions and limitations applicable to the exercise of the Option. The Committee mayimpose such conditions with respect to the exercise of Options, including conditions relating to applicable federal and state securities laws, as it considers necessary or advisable. The terms and conditions of Incentive Stock Options shall besubject to and comply with Section 422 of the Code or any successor provision and any regulations thereunder, and no Incentive Stock Option may be granted hereunder more than ten years after the Effective Date. 

 

(b) The Committee shall establish the option price at the timeeach Option is awarded, which price shall not be less than 100% of the Fair Market Value of the Common Stock on the date of award with respect to Incentive Stock Options. Nonstatutory Stock Options may be granted at such prices as the Committee maydetermine. 

 

(c) Until the completion of aninitial public offering of the Common Stock, each optionholder shall execute a Stock Purchase and Right of Repurchase Agreement, substantially in the form of Exhibit 1 hereto, prior to the purchase of any Stock pursuant to the exercise of Options.Each Option shall be exercisable at such times and subject to such additional terms and conditions as the Committee may specify in the applicable Award or thereafter. The Committee may impose such conditions with respect to the exercise of Options,including conditions relating to applicable federal or state securities laws, as it considers necessary or advisable. 

 

3 

 

(d) No sharesshall be delivered pursuant to any exercise of an Option until payment in full of the option price therefor is received by the Company. Such payment may be made in whole or in part in cash or, to the extent permitted by the Committee at or after theaward of the Option, by delivery of a note or shares of Common Stock owned by the optionee, including Restricted Stock, or by retaining shares otherwise issuable pursuant to the Option, in each case valued at their Fair Market Value on the date ofdelivery or retention, or such other lawful consideration as the Committee may determine. 

 

(e) The Committee may provide that, subject to such conditions as it considers appropriate, upon the delivery or retention of shares to the Company in payment of an Option, the Participantautomatically be awarded an Option for up to the number of shares so delivered. 

 

Section 7.    *Stock Appreciation Rights*

 

(a) Subject to the provisions of the Plan, the Committee may award SARs in tandem with an Option (at or after the award of the Option), oralone and unrelated to an Option. SARs in tandem with an Option shall terminate to the extent that the related Option is exercised, and the related Option shall terminate to the extent that the tandem SARs are exercised. The Committee shalldetermine at the time of grant or thereafter whether SARs are settled in cash, Common Stock or other securities of the Company, Awards or other property, and may define the manner of determining the excess in value of the shares of Common Stock.

 

(b) The Committee shall fix the exercise priceof each SAR or specify the manner in which the price shall be determined. SARs granted in tandem with Options shall have an exercise price not less than the exercise price of the related Option. SARs granted alone and unrelated to an Option may nothave an exercise price less than 100% of the Fair Market Value of the Common Stock on the date of grant, provided that such a SAR granted to a new employee or consultant within 90 days of the date of employment may have a lower exercise price solong as it is not less than 100% of the Fair Market Value on the date of employment. 

 

(c) An SAR related to an Option, which SAR can only be exercised upon or during limited periods following a change in control of the Company, may entitle the Participant to receive an amount based uponthe highest price paid or offered for Common Stock in any transaction relating to the change in control or paid during the thirty-day period immediately preceding the occurrence of the change in control in any transaction reported in the stockmarket in which the Common Stock is normally traded. 

 

Section 8.    *Performance Shares*

 

(a) Subject to the provisions of the Plan, the Committee may award Performance Shares and determine the number of such shares for each Performance Cycle and the duration of each Performance Cycle.There may be more than one Performance Cycle in existence at any one time, and the duration of Performance Cycles may differ from each other. The payment value of Performance Shares shall be equal to the Fair Market Value of the Common Stock on thedate the Performance Shares are earned or, in the discretion of the Committee, on the date the Committee determines that the Performance Shares have been earned. 

 

(b) The committee shall establish performance goals for each Cycle, for the purpose of determining the extentto which Performance Shares awarded for such Cycle are earned, on the basis of such criteria and to accomplish such objectives as the Committee may from time to time select. During any Cycle, the Committee may adjust the performance goals for suchCycle as it deems equitable in recognition of unusual or non-recurring events affecting the Company, changes in applicable tax laws or accounting principles, or such other factors as the Committee may determine. 

 

4 

 

(c) As soon aspracticable after the end of a Performance Cycle, the Committee shall determine the number of Performance Shares that have been earned on the basis of performance in relation to the established performance goals. The payment values of earnedPerformance Shares shall be distributed to the Participant or, if the Participant has died, to the Participant’s Designated Beneficiary, as soon as practicable thereafter. The Committee shall determine, at or after the time of award, whetherpayment values will be settled in whole or in part in cash or other property, including Common Stock or Awards. 

 

Section 9.    *Restricted Stock*

 

(a) Subject to the provisions of the Plan, the Committee may award shares of Restricted Stock and determinethe duration of the Restricted Period during which, and the conditions under which, the shares may be forfeited to the Company and the other terms and conditions of such Awards. Shares of Restricted Stock may be issued for no cash consideration orsuch minimum consideration as may be required by applicable law. 

 

(b) Shares of Restricted Stock may not be sold, assigned, transferred, pledged or otherwise encumbered, except as permitted by the Committee, during the Restricted Period. Notwithstanding the foregoing, in the Committee’sdiscretion, Awards in the form of Restricted Stock may be made transferable to a limited liability company controlled solely by the Participant. Shares of Restricted Stock shall be evidenced in such manner as the Committee may determine. Anycertificates issued in respect of shares of Restricted Stock shall be registered in the name of the Participant and unless otherwise determined by the Committee, deposited by the Participant, together with a stock power endorsed in blank, with theCompany. At the expiration of the Restricted Period, the Company shall deliver such certificates to the Participant or if the Participant has died, to the Participant’s Designated Beneficiary. 

 

Section 10.    *Stock Units*

 

(a) Subject to the provisions of the Plan, theCommittee may award Stock Units subject to such terms, restrictions, conditions, performance criteria, vesting requirements and payment rules as the Committee shall determine. 

 

(b) Shares of Common Stock awarded in connection with a Stock Unit Award shall be issued for no cashconsideration or such minimum consideration as may be required by applicable law. 

 

Section 11.    *Other Stock-Based Awards*

 

(a) Subject to the provisions of the Plan, the Committee may make other awards of Common Stock and other awards that are valued in wholeor in part by reference to, or are otherwise based on, Common Stock, including without limitation convertible preferred stock, convertible debentures, exchangeable securities and Common Stock awards or options. Other Stock-Based Awards may begranted either alone or in tandem with other Awards granted under the Plan and/or cash awards made outside of the Plan. 

 

(b) The Committee may establish performance goals, which may be based on performance goals related to book value, subsidiary performanceor such other criteria as the Committee may determine, Restricted Periods, Performance Cycles, conversion prices, maturities and security, if any, for any Other Stock-Based Award. Other Stock-Based Awards may be sold to Participants at the facevalue thereof or any discount therefrom or awarded for no consideration or such minimum consideration as may be required by applicable law. 

 

5 

Section 12.    *General Provisions Applicable to Awards*

 

(a) Limitations on Grants of Options and SARs.Subject to adjustment under Section 5(b), the number of shares subject to Options and SARs granted to any one individual during any fiscal year may not exceed 223,613 shares. 

 

(b) Reporting Person Limitations. Notwithstanding any other provision of the Plan, to the extent required toqualify for the exemption provided by Rule 16b-3, Awards made to a Reporting Person shall not be transferable by such person other than by will or the laws of descent and distribution or, if then permitted by Rule 16b-3, pursuant to a qualifieddomestic relations order as defined in the Code or Title I of the Employee Retirement Income Security Act or the rules thereunder, and are exercisable during such person’s lifetime only by such person or by such person’s guardian or legalrepresentative. 

 

(c) Documentation. Each Awardunder the Plan shall be evidenced by a writing delivered to the Participant specifying the terms and conditions thereof and containing such other terms and conditions not inconsistent with the provisions of the Plan as the Committee considersnecessary or advisable to achieve the purposes of the Plan or to comply with applicable tax and regulatory laws and accounting principles. 

 

(d) Committee Discretion. Each type of Award may be made alone, in addition to or in relation to any other type of Award. The terms ofeach type of Award need not be identical, and the Committee need not treat Participants uniformly. Except as otherwise provided by the Plan or a particular Award, any determination with respect to an Award may be made by the Committee at the time ofaward or at any time thereafter. 

 

(e) Settlement.The Committee shall determine whether Awards are settled in whole or in part in cash, Common Stock, other securities of the Company, Awards or other property. The Committee may permit a Participant to defer all or any portion of a payment under thePlan, including the crediting of interest on deferred amounts denominated in cash and dividend equivalents on amounts denominated in Common Stock. 

 

(f) Dividends and Cash Awards. In the discretion of the Committee, any Award under the Plan may provide the Participant with (i) dividendsor dividend equivalents payable currently or deferred with or without interest, and (ii) cash payments in lieu of or in addition to an Award. 

 

(g) Termination of Employment. The Committee shall determine the effect on an Award of the disability, death, retirement or othertermination of employment of a Participant and the extent to which, and the period during which, the Participant’s legal representative, guardian or Designated Beneficiary may receive payment of an Award or exercise rights thereunder.

 

(h) Change in Control. In order to preserve aParticipant’s rights under an Award in the event of a change in control of the Company, the Committee in its discretion may, at the time an Award is made or at any time thereafter, take one or more of the following actions: (i) provide for theacceleration of any time period relating to the exercise or realization of the Award, (ii) provide for the purchase of the Award upon the Participant’s request for an amount of cash or other property that could have been received upon theexercise or realization of the Award had the Award been currently exercisable or payable, (iii) adjust the terms of the Award in a manner determined by the Committee to reflect the change in control, (iv) cause the Award to be assumed, or new rightssubstituted therefor, by another entity, or (v) make such other provision as the Committee may consider equitable and in the best interests of the Company. 

 

(i) Loans. The Committee may authorize the making of loans or cash payments to Participants in connection with any Award under the Plan,which loans may be secured by any security, including Common Stock, underlying or related to such Award (provided that such Loan shall not exceed the Fair Market Value of the security subject to such Award), and which may be forgiven upon such termsand conditions as the Committee may establish at the time of such loan or at any time thereafter. 

 

6 

 

(j)Withholding Taxes. The Participant shall pay to the Company, or make provision satisfactory to the Committee for payment of, any taxes required by law to be withheld in respect of Awards under the Plan no later than the date of the event creatingthe tax liability. In the Committee’s discretion, such tax obligations may be paid in whole or in part in shares of Common Stock, including shares retained from the Award creating the tax obligation, valued at their Fair Market Value on thedate of delivery. The Company and its Affiliates may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to the Participant. 

 

(k) Foreign Nationals. Awards may be made to Participants who are foreign nationals or employed outside theUnited States on such terms and conditions different from those specified in the Plan as the Committee considers necessary or advisable to achieve the purposes of the Plan or to comply with applicable laws. 

 

(l) Amendment of Award. The Committee may amend, modify orterminate any outstanding Award, including 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 theParticipant’s consent to such action shall be required unless the Committee determines that the action, taking into account any related action, would not materially and adversely affect the Participant. 

 

Section 13.    *Miscellaneous*

 

(a) No Right To Employment. No person shallhave 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. The Company expressly reserves the right at any time to dismiss a Participant free from anyliability 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 CommonStock to be distributed under the Plan until he or she becomes the holder thereof. A Participant to whom Common Stock is awarded shall be considered the holder of the Stock at the time of the Award except as otherwise provided in the applicableAward. 

 

(c) Effective Date. The 1996 EquityIncentive Plan became effective on January 25, 1996. Subject to the approval of the Stockholders of the Company, this 1998 Equity Incentive Plan, which amends and restates the 1996 Equity Incentive Plan, will become effective on February 18, 1998.Prior to such approval, Awards may be made under the Plan expressly subject to such approval. 

 

(d) Amendment of Plan. The Board may amend, suspend or terminate the Plan or any portion thereof at any time, subject to any stockholder approval that the Board determines to be necessary or advisable.

 

(e) Governing Law. The provisions of the Planshall be governed by and interpreted in accordance with the laws of Delaware. 

 

7