exv10w01



 






Exhibit 10.01




 




 




 




 




GUILFORD PHARMACEUTICALS INC.




COMPENSATION PLAN FOR OUTSIDE DIRECTORS




 









 








TABLE OF CONTENTS




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page
	1.	 	DEFINITIONS	 	1
	2.	 	PURPOSE	 	2
	3.	 	SHARES SUBJECT TO THE PLAN	 	2
	4.	 	DIRECTOR FEES	 	2
	 	 	4.1.	 	Annual Retainer	 	2
	 	 	4.2.	 	Meeting Fees	 	3
	 
	 	 	 	4.2.1.	 	Meetings of Board 	 	3
	 
	 	 	 	4.2.2.	 	Meetings of Committees of Independent Directors 	 	3
	 
	 	 	 	4.2.3.	 	Meetings of the Science Committee 	 	3
	 	 	4.3.	 	Committee Chairman Retainers	 	4
	 	 	4.4.	 	Lead Director Fee	 	4
	5.	 	PAYMENTS IN STOCK UNITS	 	5
	6.	 	VESTING IN STOCK UNITS	 	5
	7.	 	ADMINISTRATION	 	5
	 	 	7.1.	 	Committee	 	5
	 	 	7.2.	 	Rules for Administration	 	5
	 	 	7.3.	 	Committee Action	 	6
	 	 	7.4.	 	Delegation	 	6
	 	 	7.5.	 	Services	 	6
	 	 	7.6.	 	Indemnification	 	6
	8.	 	AMENDMENT AND TERMINATION	 	6
	9.	 	GENERAL PROVISIONS	 	6
	 	 	9.1.	 	Limitation of Rights	 	6
	 	 	9.2.	 	No Rights as Stockholders	 	7
	 	 	9.3.	 	Rights as a Non-Employee Director	 	7
	 	 	9.4.	 	Assignment, Pledge or Encumbrance	 	7
	 	 	9.5.	 	Binding Provisions	 	7
	 	 	9.6.	 	Notices	 	7
	 	 	9.7.	 	Governing Law	 	7
	 	 	9.8.	 	Withholding	 	7
	 	 	9.9.	 	Effective Date	 	8







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1. DEFINITIONS




               To the extent any capitalized words used in this Plan are not defined,
they shall have the definitions stated for them in the Guilford Pharmaceuticals
Inc. 2002 Stock Award and Incentive Plan




	1.1	 	“Board of Directors” or “Board” means the Board of
Directors of the Company.
	 
	1.2	 	“Chairman of the Board” means that member of the Board of
Directors designated by the Board of Directors to be the Chairman.
	 
	1.3	 	“Committee” means the committee comprised of certain designated
members of the Company’s management, which administers the Plan.
	 
	1.4	 	“Common Stock” means the common stock, par value $0.01 per share,
of the Company.
	 
	1.5	 	“Company” means Guilford Pharmaceuticals Inc., a Delaware
corporation, or any successor thereto.
	 
	1.6	 	“Eligible Director” for each Plan Year means a member of the Board
of Directors who is not an employee of the Company or any Subsidiary and
who qualifies as Independent.
	 
	1.7	 	“Fair Market Value” means the closing price of a share of Common
Stock reported on the NASDAQ National Market (“NASDAQ”) on the date Fair
Market Value is being determined, provided that if there is no closing
price reported on such date, the Fair Market Value of a share of Common
Stock on such date shall be deemed equal to the closing price as reported
by NASDAQ for the last preceding date on which sales of shares of Common
Stock were reported. Notwithstanding the foregoing, in the event that the shares
of Common Stock are listed upon more than one established stock
exchange, “Fair Market Value” means the closing price of the shares of
Common Stock reported on the exchange that trades the largest volume of shares
of Common Stock on the date Fair Market Value is being determined.
If the Common Stock is not at the time listed or admitted to trading on a
stock exchange, Fair Market Value means the mean between the lowest
reported bid price and highest reported asked price of the Common Stock on
the date in question in the over-the-counter market, as such prices are
reported in a publication of general circulation selected by the Board and
regularly reporting the market price of Common Stock in such market. If
the Common Stock is not listed or admitted to trading on any stock
exchange or traded in the over-the-counter market, Fair Market Value shall
be as determined in good faith by the Board.




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	1.8	 	“Independent” shall have the meaning it is given under applicable
NASDAQ National Market rules, as amended from time to time.
	 
	1.9	 	“Lead Director” means the Director designated by the Independent
members of the Board of Directors to be their lead director. If the
Chairman of the Board is Independent, then there shall not be a Lead
Director.
	 
	1.10	 	“Payment Period” means each fiscal quarter of the Company.
	 
	1.11	 	“Plan” means the Guilford Pharmaceuticals Inc. Compensation Plan
for Outside Directors as set forth herein and as amended from time to
time.
	 
	1.12	 	“Plan Year” means each fiscal year of the Company.
	 
	1.13	 	“Stock Unit” means a Stock Unit granted pursuant to the Guilford
Pharmaceuticals Inc. 2002 Stock Award and Incentive Plan.
	 
	1.14	 	“Stock Unit Agreement” means the written agreement between the
Company and the Eligible Director that evidences and sets out the terms
and conditions of the Stock Unit.
	 
	1.15	 	“Subsidiary” means any “subsidiary corporation” of the Company
within the meaning of Section 424(f) of the Internal Revenue Code of 1986,
as amended.
	 


	2.	 	PURPOSE





               The purpose of the Plan is to provide reasonable compensation for Eligible
Directors and to increase their equity holdings in the Company so that the
financial interests of the Eligible Directors shall be more closely aligned
with the financial interests of the Company’s stockholders.




	3.	 	SHARES SUBJECT TO THE PLAN





               The shares of Common Stock issuable under the Plan shall be issued
pursuant to the Guilford Pharmaceuticals Inc. 2002 Stock Award and Incentive
Plan.




	4.	 	DIRECTOR FEES






	 	4.1.	 	Annual Retainer





               Each Eligible Director shall be entitled to an annual fee as a retainer
(the “Annual Director Fee”), which is equal in value to twenty-four thousand
dollars ($24,000), and shall be paid in equal quarterly installments. The
Annual Director



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Fee shall be provided in the form of Stock Units for shares of Stock having a
Fair Market Value equal to the Annual Director Fee determined on the last day
of each Payment Period. If an Eligible Director serves on the Board for less
than a full Plan Year, such Eligible Director shall be entitled to a pro-rated
portion of the Annual Director Fee based upon the portion of the Plan Year
during which he or she serves as an Eligible Director. Six months after the
termination of an Eligible Director’s service on the Board of Directors, a
stock certificate for all shares covered by Stock Units granted to the Eligible
Director shall be delivered, free of all restrictions, to the Eligible Director
or the Eligible Director’s beneficiary or estate, as the case may be.




	 	4.2.	 	Meeting Fees






	 	4.2.1.	 	Meetings of Board





               Each Eligible Director shall be entitled to a meeting fee of $2,000 for
each meeting of the Board of Directors attended in person. Each Eligible
Director shall be entitled to a meeting fee of $1,000 for each meeting of the
Board of Directors attended by telephone, including regular monthly telephonic
update meetings, provided, however, that if a meeting attended by telephone
relates to a major corporate action, as designated by the Chairman of the Board
of Directors or the Lead Director, each Eligible Director shall be entitled to
a meeting fee of $2,000 for such meeting attended.




	 	4.2.2.	 	Meetings of Committees of Independent Directors





               Each Eligible Director who is a member of the committees of the Board of
Director set forth below shall be entitled to the following meeting fee for
each committee meeting attended in person or by telephone:



	 	 	 	 	 
	Audit

	 	$	1,500	 
	Compensation

	 	 	1,200	 
	Nominatingand Governance

	 	 	1,200	 








	 	4.2.3.	 	Meetings of the Science Committee





               Each Eligible Director who is a member of the Science Committee shall be
entitled to a meeting fee of $7,500 for each meeting of the Science Committee
attended in person or by telephone. Fifty percent of the Science Committee
meeting fee shall be paid in cash and fifty percent of the Science Committee
meeting fee shall be paid in the form of Stock Units for shares of Stock. Each
Stock Unit shall have a Fair Market Value equal to the Fair Market Value of the
Stock on the last day of the Payment Period during which a Science Committee
meeting occurs. Six



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months after the termination of a member of the Science Committee’s service on the
Board of Directors, a stock certificate for all shares covered by Stock Units
granted to the member as the Science Committee meeting fee shall be delivered,
free of all restrictions, to the member or the member’s beneficiary or estate,
as the case may be.




	 	4.3.	 	Committee Chairman Retainers





               Each Eligible Director who is chairman of a committee of the Board shall
be entitled to an annual committee chairman fee as a retainer in the following
amounts (the “Annual Committee Chairman Fee”):



	 	 	 	 	 
	Audit

	 	$	7,000	 
	Compensation

	 	 	5,000	 
	Nominating and Governance

	 	 	5,000	 







               The Annual Committee Chairman Fee shall be provided in the form of Stock
Units for shares of Stock having a Fair Market Value equal to the Annual
Committee Chairman Fee determined on the last day of the Payment Period during
which the annual meeting of stockholders occurs. If an Eligible Director
becomes a chairman other than immediately following an annual meeting of
stockholders, such Eligible Director shall be entitled to a pro-rated portion
of the Annual Committee Chairman Fee based upon the period of time until the
next annual meeting of stockholders and the Fair Market Value of the shares of
Stock subject to the Stock Units shall be determined on the last day of the
Payment Period during which the Eligible Director became a committee chairman.
Six months after the termination of an Eligible Director’s service on the Board
of Directors, a stock certificate for all shares covered by Stock Units granted
to the Eligible Director as the Annual Committee Chairman Fee shall be
delivered, free of all restrictions, to the Eligible Director or the Eligible
Director’s beneficiary or estate, as the case may be.




	 	4.4.	 	Lead Director Fee





               If an Eligible Director is designated the Lead Director or Chairman of the
Board, then he or she shall be entitled to a fee as a retainer in the amount of
$7,000 (the “Lead Director Fee”). The Annual Committee Chairman Fee shall be
paid in the form of Stock Units for shares of Stock having a Fair Market Value
equal to the Lead Director Fee determined on the last day of the Payment Period
during which the annual meeting of stockholders occurs. If an Eligible
Director serves as the Lead Director, or Chairman, as the case may be, for less
than a full Plan Year, such Eligible Director shall be entitled to a pro-rated
portion of the Lead Director Fee based upon the portion of the Plan Year that
he or she serves as Lead Director or Chairman of the Board, and the Fair Market
Value of the shares of Stock subject to



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the Stock Units shall be determined on the last day of the Payment Period during
which the Eligible Director became the Lead Director or Chairman. Six months
after the termination of an Eligible Director’s service on the Board of
Directors, a stock certificate for all shares covered by Stock Units granted to
the Eligible Director as the Lead Director Fee shall be delivered, free of all
restrictions, to the Eligible Director or the Eligible Director’s beneficiary
or estate, as the case may be.




	5.	 	PAYMENTS IN STOCK UNITS





     Payments prescribed by this Plan that are to be made in cash may instead
be made in Stock Units. If an Eligible Director want to receive the cash
payments to which he or she may be entitled under the Plan in Stock Units, the
Eligible Director shall inform the Committee of this election in a manner
determined by the Committee (the “Stock Unit Election”), provided that, the
Stock Unit Election shall (1) be made only once during each Plan Year and (2)
be made with respect to all, but not less than all, of the cash payments to
which an Eligible Director may be entitled to receive. Stock Units issued
pursuant to this Section 5 shall have a Fair Market Value equal to the Fair
Market Value of the Stock on the last day of the Payment Period for which the
particular payment is being made. Six months after the termination of an
Eligible Director’s service on the Board of Directors, a stock certificate for
all shares covered by Stock Units granted to the Eligible Director shall be
delivered, free of all restrictions, to the Eligible Director or the Eligible
Director’s beneficiary or estate, as the case may be.




	6.	 	VESTING IN STOCK UNITS





               Stock Units shall be 100% vested at all times.




	7.	 	ADMINISTRATION






	 	7.1.	 	Committee





               The general administration of the Plan and the responsibility for carrying
out its provisions shall be placed in the Committee. The Committee shall
consist of at least two members appointed from time to time by the Compensation
Committee of the Board of Directors to serve at the pleasure thereof. The
initial members of the Committee shall consist of the Chief Financial Officer
and the General Counsel of the Company. Any member of the Committee may resign
by delivering a written resignation to the Company, and may be removed at any
time by action of the Board of Directors.



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	 	7.2.	 	Rules for Administration





               Subject to the limitations of the Plan, the Committee may from time to
time establish such rules and procedures for the administration and
interpretation of the Plan and the transaction of its business as the Committee
may deem necessary or appropriate. The determination of the Committee as to
any disputed question relating to the administration and interpretation of the Plan shall be
conclusive.




	 	7.3.	 	Committee Action





               Any act which the Plan authorizes or requires the Committee to do may be
done by a majority of its members. The action of such majority, expressed from
time to time by a vote at a meeting (i) in person, (ii) by telephone or other
means by which all members can hear one another or (iii) in writing without a
meeting shall constitute the action of the Committee and shall have the same
effect for all purposes as if assented to by all members of the Committee at
the time in office.




	 	7.4.	 	Delegation





               The members of the Committee may authorize one or more of their number to
execute or deliver any instrument, make any payment or perform any other act
which the Plan authorizes or requires the Committee to do.




	 	7.5.	 	Services





               The Committee may employ or retain agents to perform such clerical,
accounting and other services as it may require in carrying out the provisions
of the Plan.




	 	7.6.	 	Indemnification





               The Company shall indemnify and save harmless each member of the Committee
against all expenses and liabilities arising out of membership on the
Committee, other than expenses and liabilities arising from the such member’s
own gross negligence or willful misconduct, as determined by the Board of
Directors.




	 	8.	 	AMENDMENT AND TERMINATION





               The Company, by action of the Board of Directors or the Administrative
Committee, may at any time or from time to time modify or amend any or all of
the provisions of the Plan, or may at any time terminate the Plan. No such
action shall adversely affect the accrued rights of any Eligible Director or
Science Committee member hereunder without that person’s consent thereto.



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9. GENERAL PROVISIONS





	 	9.1.	 	Limitation of Rights





               No Eligible Director shall have any right to any payment or benefit
hereunder except to the extent provided in the Plan.




	 	9.2.	 	No Rights as Stockholders





               Nothing contained in this Plan shall be construed as giving any Eligible
Director or Science Committee member rights as a stockholder of the Company.




	 	9.3.	 	Rights as a Non-Employee Director





               Nothing contained in this Plan shall be construed as giving any Eligible
Director or Science Committee member a right to be retained in such capacity by
the Company.




	 	9.4.	 	Assignment, Pledge or Encumbrance





               No assignment, pledge or other encumbrance of any payments or benefits
under the Plan shall be permitted or recognized and, to the extent permitted by
law, no such payments or benefits shall be subject to legal process or
attachment for the payment of any claim of any person entitled to receive the
same, except to the extent such assignment, pledge or other encumbrance is in
favor of the Company .




	 	9.5.	 	Binding Provisions





               The provisions of this Plan shall be binding upon each Eligible Director
and Science Committee member, upon the Company, upon the Eligible Director’s
and Science Committee member’s heirs, executors and administrators and upon the
successors and assigns of the Eligible Director, the Science Committee member
and the Company.




	 	9.6.	 	Notices





               Any notice given by an Eligible Director or Science Committee member
pursuant to the Plan shall be in writing to the Committee or to such
representative thereof as may be designated by the Committee for such purpose
and shall be deemed to have been made or given on the date received by the
Committee or its representative.



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	 	9.7.	 	Governing Law





               The validity and interpretation of the Plan and of any of its provisions
shall be construed under the laws of the State of Delaware without giving
effect to the choice of law provisions thereof.




	 	9.8.	 	Withholding





               The Company shall have the right to deduct from the amounts distributable
hereunder any federal, state or local taxes required by law to be withheld with
respect to such distributions, and such additional amounts of
withholding as are reasonably requested by the Eligible Director or Science
Committee member.




	 	9.9.	 	Effective Date





               This Plan shall be effective commencing with the calendar quarter ending
September 30, 2004.




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