Document:

Exhibit 4.3
	 

	 
		NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS
		EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
		THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
		REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
		“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
		SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
		SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION
		NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
		ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL
		OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH
		SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.  
	 

	 
		FORM OF
 COMMON STOCK PURCHASE WARRANT
	 

	 
		To Purchase ______ Shares of Common Stock of
	 

	 
		VION PHARMACEUTICALS, INC.
	 

	 
		THIS COMMON STOCK PURCHASE WARRANT CERTIFIES that, for value received,
		___________________________ (the “Holder”), is entitled, upon
		the terms and subject to the limitations on exercise and the conditions
		hereinafter set forth, at any time after the earlier of (i) the date the shelf
		registration statement with respect to the resale of the shares of  common
		stock (the “Common Stock”) of Vion Pharmaceuticals, Inc., a Delaware
		corporation (the “Company”), issuable upon exercise of this Warrant
		becomes effective and (ii) August 19, 2007 (the earlier of such dates, the
		“Initial Exercise Date”) and on or prior to 5:00 p.m. New York
		City time on February 15, 2010 (the “Termination Date”), but
		not thereafter, to subscribe for and purchase from the Company up to
		__________________________________ (_______) shares (the “Warrant
		Shares”) of Common Stock.  The purchase price of one share of
		Common Stock (the “Exercise Price”) under this Warrant shall
		be $2.00.  The Exercise Price and the number of Warrant Shares for which
		the Warrant is exercisable shall be subject to adjustment as provided herein.
		Capitalized terms used and not otherwise defined herein shall have the meanings
		set forth in that certain Purchase Agreement (the “Purchase
		Agreement”), dated February 13, 2007, by and between the Company and
		CRT Capital Group LLC, as initial purchaser.
	 

	 
		
 

	 

	 
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		1.
	 

	 
		Title to Warrant.  Prior to the Termination Date and subject
		to compliance with applicable laws and Section 7 of this Warrant, this Warrant
		and all rights hereunder are transferable, in whole or in part, at the office
		or agency of the Company by the Holder in person or by duly authorized
		attorney, upon surrender of this Warrant together with the Assignment Form
		annexed hereto properly endorsed.  The transferee shall sign an investment
		letter in form and substance reasonably satisfactory to the Company.
	 

	 
		2.
	 

	 
		Authorization of Shares.  The Company covenants that all
		Warrant Shares which may be issued upon the exercise of the purchase rights
		represented by this Warrant will, upon exercise of the purchase rights
		represented by this Warrant, be duly authorized, validly issued, fully paid and
		non-assessable and free from all taxes, liens and charges created by the
		Company in respect of the issue thereof (other than taxes in respect of any
		transfer occurring contemporaneously with such issue).
	 

	 
		3.
	 

	 
		Exercise of Warrant.  
	 

	 
		(a)
	 

	 
		Exercise of the purchase rights represented by this Warrant may be made
		at any time or times on or after the Initial Exercise Date and on or before the
		Termination Date by the surrender of this Warrant and the Notice of Exercise
		Form annexed hereto duly executed, at the office of the Company (or such other
		office or agency of the Company as it may designate by notice in writing to the
		registered Holder at the address of such Holder appearing on the books of the
		Company) and upon payment of the Exercise Price of the shares thereby purchased
		by wire transfer of immediately available funds or cashier’s check drawn
		on a United States bank, the Holder shall be entitled to receive a certificate
		for the number of Warrant Shares so purchased.  Certificates for shares
		purchased hereunder shall be delivered to the Holder within five (5) Trading
		Days after the date on which this Warrant shall have been exercised as
		aforesaid. This Warrant shall be deemed to have been exercised and such
		certificate or certificates shall be deemed to have been issued, and the Holder
		or any other person so designated to be named therein shall be deemed to have
		become a holder of record of such shares for all purposes, as of the date the
		Warrant has been exercised by payment to the Company of the Exercise Price and
		all taxes required to be paid by the Holder, if any, pursuant to Section 5
		prior to the issuance of such shares, have been paid.  If the Company
		fails to deliver to the Holder a certificate or certificates representing the
		Warrant Shares pursuant to this Section 3(a) by the close of business on the
		fifth Trading Day after the date of exercise, then the Holder will have the
		right to rescind such exercise.  In addition to any other rights available
		to the Holder, if the Company fails to deliver to the Holder a certificate or
		certificates representing the Warrant Shares pursuant to an exercise by the
		close of business on the fifth Trading Day after the date of exercise, and if
		after such fifth Trading Day the Holder is required by its broker to purchase
		(in an open market transaction or otherwise) shares of Common Stock to deliver
		in satisfaction of a sale by the Holder of the Warrant Shares which the Holder
		anticipated receiving upon such exercise (a “Buy-In”), then
		the Company shall (1) pay in cash to the Holder the amount by which (x) the
		Holder’s total purchase price (including brokerage commissions, if any)
		for the shares of Common Stock so purchased exceeds (y) the amount obtained by
		multiplying (A) the number of Warrant Shares that the Company was required to
		deliver to the Holder in connection with the exercise at issue times (B) the
		price at which the sell
	 

	 
		
 

	 

	 
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		order giving rise to such purchase obligation was executed, and (2) at
		the option of the Holder, either reinstate the portion of the Warrant and
		equivalent number of Warrant Shares for which such exercise was not honored or
		deliver to the Holder the number of shares of Common Stock that would have been
		issued had the Company timely complied with its exercise and delivery
		obligations hereunder.  For example, if the Holder purchases Common Stock
		having a total purchase price of $11,000 to cover a Buy-In with respect to an
		attempted exercise of shares of Common Stock with an aggregate sale price
		giving rise to such purchase obligation of $10,000, under clause (1) of the
		immediately preceding sentence the Company shall be required to pay the Holder
		$1,000. The Holder shall provide the Company written notice indicating the
		amounts payable to the Holder in respect of the Buy-In, together with
		applicable confirmations and other evidence reasonably requested by the
		Company.  Nothing herein shall limit a Holder’s right to pursue any
		other remedies available to it hereunder, at law or in equity including,
		without limitation, a decree of specific performance and/or injunctive relief
		with respect to the Company’s failure to timely deliver certificates
		representing shares of Common Stock upon exercise of the Warrant as required
		pursuant to the terms hereof.
	 

	 
		(b)
	 

	 
		If this Warrant shall have been exercised in part, the Company shall, at
		the time of delivery of the certificate or certificates representing Warrant
		Shares, deliver to Holder a new Warrant evidencing the rights of Holder to
		purchase the unpurchased Warrant Shares called for by this Warrant, which new
		Warrant shall in all other respects be identical with this Warrant.
	 

	 
		(c)
	 

	 
		Subject to the provisions of this Section 3, if at any time the last
		sales price of the Common Stock as reported by Bloomberg Financial LP for any
		of twenty Trading Days within a 30-consecutive Trading Day period exceeds 150%
		of the Exercise Price then in effect (such 30-consecutive Trading Day period,
		the “Threshold Period”), then the Company may call for
		cancellation all, but not less than all,  of such portion of this Warrant
		for which a Notice of Exercise has not yet then been delivered (such right, a
		“Call”).  To exercise this right, the Company must
		deliver to the Holder an irrevocable written notice (a “Call
		Notice”), within three business days of the Threshold Period.  If
		the conditions set forth below for such Call are satisfied from the period from
		the date of the Call Notice through and including the Call Date (as defined
		below), then any portion of this Warrant for which a Notice of Exercise shall
		not have been received from and after the date of the Call Notice will be
		cancelled at 5:00 p.m. (New York City time) on the thirtieth (30th)
		day (such date, the “Call Date”) after the date the Call
		Notice is delivered to the Holder and the Company will pay the Holder $.01 per
		Warrant cancelled.  In furtherance thereof, the Company covenants and
		agrees that it will honor all Notices of Exercise with respect to Warrant
		Shares subject to a Call Notice that are tendered from the time of delivery of
		the Call Notice through 5:00 p.m. (New York City time) on the Call Date.
		 Notwithstanding anything to the contrary set forth in this Warrant, the
		Company may not deliver a Call Notice or require the cancellation of this
		Warrant (and any Call Notice will be void), unless, from the beginning of the
		Threshold Period through 5:00 p.m. (New York City time) on the Call Date, (i)
		the Company shall have honored in accordance with the terms of this Warrant all
		Notices of Exercise delivered to the Company and (ii) the Registration
		Statement shall be effective as to all Warrant Shares and the prospectus
		thereunder available for use by the Holder for the resale of all such Warrant
		Shares.
	 

	 
		
 

	 

	 
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		4.
	 

	 
		No Fractional Shares or Scrip.  No fractional shares or scrip
		representing fractional shares shall be issued upon the exercise of this
		Warrant.  As to any fraction of a share which Holder would otherwise be
		entitled to purchase upon such exercise, the Company shall pay a cash
		adjustment in respect of such final fraction in an amount equal to such
		fraction multiplied by the Exercise Price.
	 

	 
		5.
	 

	 
		Charges, Taxes and Expenses.  Issuance of certificates for
		Warrant Shares shall be made without charge to the Holder for any issue or
		transfer tax or other incidental expense in respect of the issuance of such
		certificate, all of which taxes and expenses shall be paid by the Company, and
		such certificates shall be issued in the name of the Holder or in such name or
		names as may be directed by the Holder; provided, however, that
		in the event certificates for Warrant Shares are to be issued in a name other
		than the name of the Holder, this Warrant when surrendered for exercise shall
		be accompanied by the Assignment Form attached hereto duly executed by the
		Holder; and the Company may require, as a condition thereto, the payment of a
		sum sufficient to reimburse it for any transfer tax incidental thereto.
	 

	 
		6.
	 

	 
		Closing of Books.  The Company will not close its stockholder
		books or records in any manner which prevents the timely exercise of this
		Warrant, pursuant to the terms hereof.
	 

	 
		7.
	 

	 
		Transfer, Division and Combination.  
	 

	 
		(a)
	 

	 
		Subject to compliance with any applicable securities laws and the
		conditions set forth in Sections 1 and 7(e) hereof, this Warrant and all rights
		hereunder are transferable, in whole or in part, upon surrender of this Warrant
		at the office of the Company, together with a written assignment of this
		Warrant substantially in the form attached hereto duly executed by the Holder
		or its agent or attorney and funds sufficient to pay any transfer taxes payable
		upon the making of such transfer.  Upon such surrender and, if required,
		such payment, the Company shall execute and deliver a new Warrant or Warrants
		in the name of the assignee or assignees and in the denomination or
		denominations specified in such instrument of assignment, and shall issue to
		the assignor a new Warrant evidencing the portion of this Warrant not so
		assigned, and this Warrant shall promptly be cancelled.  A Warrant, if
		properly assigned, may be exercised by a new holder for the purchase of Warrant
		Shares without having a new Warrant issued.  
	 

	 
		(b)
	 

	 
		This Warrant may be divided or combined with other Warrants upon
		presentation hereof at the aforesaid office of the Company, together with a
		written notice specifying the names and denominations in which new Warrants are
		to be issued, signed by the Holder or its agent or attorney.  Subject to
		compliance with Section 7(a), as to any transfer which may be involved in such
		division or combination, the Company shall execute and deliver a new Warrant or
		Warrants in exchange for the Warrant or Warrants to be divided or combined in
		accordance with such notice.
	 

	 
		(c)
	 

	 
		The Company shall prepare, issue and deliver at its own expense (other
		than transfer taxes) the new Warrant or Warrants under this Section 7.
	 

	 
		(d)
	 

	 
		The Company agrees to maintain, at its aforesaid office, books for the
		registration and the registration of transfer of the Warrants.
	 

	 
		
 

	 

	 
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		(e)
	 

	 
		If, at the time of the surrender of this Warrant in connection with any
		transfer of this Warrant, the transfer of this Warrant shall not be registered
		pursuant to an effective registration statement under the Securities Act and
		under applicable state securities or blue sky laws, the Company may require, as
		a condition of allowing such transfer (i) that the Holder or transferee of this
		Warrant, as the case may be, furnish to the Company a written opinion of
		counsel (which opinion shall be in form, substance and scope customary for
		opinions of counsel in comparable transactions) to the effect that such
		transfer may be made without registration under the Securities Act and under
		applicable state securities or blue sky laws, (ii) that the holder or
		transferee execute and deliver to the Company an investment letter in form and
		substance acceptable to the Company and (iii) that the transferee be an
		“accredited investor” as defined in Rule 501(a) promulgated under the
		Securities Act.
	 

	 
		8.
	 

	 
		No Rights as Shareholder until Exercise.  This Warrant does
		not entitle the Holder to any voting rights or other rights as a shareholder of
		the Company prior to the exercise hereof.  Upon the surrender of this
		Warrant and the payment of the aggregate Exercise Price (or by means of a
		cashless exercise), the Warrant Shares so purchased shall be and be deemed to
		be issued to such Holder as the record owner of such shares as of the close of
		business on the later of the date of such surrender or payment.
	 

	 
		9.
	 

	 
		Loss, Theft, Destruction or Mutilation of Warrant.  The
		Company covenants that upon receipt by the Company of evidence reasonably
		satisfactory to it of the loss, theft, destruction or mutilation of this
		Warrant or any stock certificate relating to the Warrant Shares, and in case of
		loss, theft or destruction, of indemnity or security reasonably satisfactory to
		it (which, in the case of the Warrant, shall not include the posting of any
		bond), and upon surrender and cancellation of such Warrant or stock
		certificate, if mutilated, the Company will make and deliver a new Warrant or
		stock certificate of like tenor and dated as of such cancellation, in lieu of
		such Warrant or stock certificate.
	 

	 
		10.
	 

	 
		Saturdays, Sundays, Holidays, etc.  If the last or appointed
		day for the taking of any action or the expiration of any right required or
		granted herein shall be a Saturday, Sunday or a legal holiday, then such action
		may be taken or such right may be exercised on the next succeeding day not a
		Saturday, Sunday or legal holiday.
	 

	 
		11.
	 

	 
		Adjustments of Exercise Price and Number of Warrant Shares.
		 The number and kind of securities purchasable upon the exercise of this
		Warrant and the Exercise Price shall be subject to adjustment from time to time
		upon the happening of any of the following.  In case the Company shall (i)
		pay a dividend in shares of Common Stock or make a distribution in shares of
		Common Stock to holders of its outstanding Common Stock, (ii) subdivide its
		outstanding shares of Common Stock into a greater number of shares, (iii)
		combine its outstanding shares of Common Stock into a smaller number of shares
		of Common Stock, or (iv) issue any shares of its capital stock in a
		reclassification of the Common Stock, then the number of Warrant Shares
		purchasable upon exercise of this Warrant immediately prior thereto shall be
		adjusted so that the Holder shall be entitled to receive the kind and number of
		Warrant Shares or other securities of the Company which it would have owned or
		have been entitled to receive had such Warrant been exercised in advance
		thereof.  Upon each such adjustment of the kind and number of Warrant
		Shares or other securities of the Company which are purchasable hereunder, the
		Holder shall
	 

	 
		
 

	 

	 
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		thereafter be entitled to purchase the number of Warrant Shares or other
		securities resulting from such adjustment at an Exercise Price per Warrant
		Share or other security obtained by multiplying the Exercise Price in effect
		immediately prior to such adjustment by the number of Warrant Shares
		purchasable pursuant hereto immediately prior to such adjustment and dividing
		by the number of Warrant Shares or other securities of the Company that are
		purchasable pursuant hereto immediately after such adjustment.  An
		adjustment made pursuant to this paragraph shall become effective immediately
		after the effective date of such event retroactive to the record date, if any,
		for such event.
	 

	 
		12.
	 

	 
		Reorganization, Reclassification, Merger, Consolidation or Disposition
		of Assets.  In case the Company shall reorganize its capital,
		reclassify its capital stock, consolidate or merge with or into another
		corporation (where the Company is not the surviving corporation or where there
		is a change in or distribution with respect to the Common Stock of the
		Company), or sell, transfer or otherwise dispose of all or substantially all
		its property, assets or business to another corporation and, pursuant to the
		terms of such reorganization, reclassification, merger, consolidation or
		disposition of assets, shares of common stock of the successor or acquiring
		corporation, or any cash, shares of stock or other securities or property of
		any nature whatsoever (including warrants or other subscription or purchase
		rights) in addition to or in lieu of common stock of the successor or acquiring
		corporation (“Other Property”), are to be received by or
		distributed to the holders of Common Stock of the Company, then the Holder
		shall have the right thereafter to receive upon exercise of this Warrant, the
		number of shares of Common Stock of the successor or acquiring corporation or
		of the Company, if it is the surviving corporation, and Other Property
		receivable upon or as a result of such reorganization, reclassification,
		merger, consolidation or disposition of assets by a Holder of the number of
		shares of Common Stock for which this Warrant is exercisable immediately prior
		to such event.  For purposes of this Section 12, “common stock of the
		successor or acquiring corporation” shall include stock of such
		corporation of any class which is not preferred as to dividends or assets over
		any other class of stock of such corporation and which is not subject to
		redemption and shall also include any evidences of indebtedness, shares of
		stock or other securities which are convertible into or exchangeable for any
		such stock, either immediately or upon the arrival of a specified date or the
		happening of a specified event and any warrants or other rights to subscribe
		for or purchase any such stock.  The foregoing provisions of this Section
		12 shall similarly apply to successive reorganizations, reclassifications,
		mergers, consolidations or disposition of assets.
	 

	 
		13.
	 

	 
		Securities Are Not Registered.
	 

	 
		(a)
	 

	 
		The Holder understands that neither the offer and sale of this Warrant
		nor the Warrant Shares have been registered under the Securities Act on the
		basis that no distribution or public offering of the Securities of the Company
		is to be effected and/or pursuant to specific exemptions from the registration
		provisions of the Securities Act, which exemptions depend upon, among other
		things, the bona fide nature of the Holder’s investment intent as
		represented to the Company. The Holder realizes that the basis for such
		exemptions may not be present if, notwithstanding its representations, the
		Holder has a present intention of acquiring the securities for a fixed or
		determinable period in the future, selling (in connection with a distribution
		or otherwise), granting any participation in, or otherwise distributing the
		securities, and by accepting this Warrant, the Holder represents and warrants
		that it has no such present intention.
	 

	 
		
 

	 

	 
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		(b)
	 

	 
		The Holder recognizes that this Warrant and the Warrant Shares, if not
		registered, will have restrictions on resale imposed by state and federal
		securities laws.   The Holder recognizes that the Company has no
		obligation to register this Warrant or, except as provided in the Registration
		Rights Agreement, dated as of February 20, 2007, by and between CRT, as initial
		purchaser, and the Company (the “Registration Rights
		Agreement”), the Warrant Shares.  The Holder further recognizes
		that some or all of the Warrant Shares may never be registered.  The
		Holder is aware that (i) this Warrant is being issued by the Company, along
		with other like warrants, under the Purchase Agreement in connection with the
		Company’s issuance of its convertible notes.  The convertible notes
		and warrants issued under the Purchase Agreement, together may be converted
		into shares of the Company’s Common Stock.  The United States
		Securities and Exchange Commission (the “SEC”) has recently
		taken the position that offerings of excessive amounts of common stock by
		selling security holders pursuant to resale registration statements may be
		considered primary offerings by the issuers of such securities.
		 Accordingly, under the Registration Rights Agreement the Company may
		delay the effective date of any registration statement relating to the Warrant
		Shares and/or reduce the number of Warrant shares included in a registration
		statement in order for the SEC to allow the offering of shares of Common Stock
		under a resale registration statement.  The Holder agrees that there can
		be no assurance as to the extent of such reduction or the length of such delay
		and the Company will not be required to pay the Holder any damages as a result
		of any such reduction or delay.   Reference is made to the
		Registration Rights Agreement for a complete description of the Company’s
		and the Holder’s rights and obligations with respect to the registration
		of the resale of the Warrant Shares.
	 

	 
		(c)
	 

	 
		The Holder understands that (i) this Warrant and the Warrant Shares (if
		not registered) may not be transferred or resold except in a transaction exempt
		from or not subject to the registration requirements of the Securities Act and
		applicable state securities laws, (ii) as a result of such restrictions the
		Holder may be required to hold the Warrant Shares for an indefinite period of
		time prior to sale, and (iii) during such time, the market price of the Common
		Stock may fluctuate and go below the Exercise Price.
	 

	 
		14.
	 

	 
		Notice of Adjustment.  Whenever the number of Warrant Shares
		or number or kind of securities or other property purchasable upon the exercise
		of this Warrant or the Exercise Price is adjusted, as herein provided, the
		Company shall give notice thereof to the Holder, which notice shall state the
		number of Warrant Shares (and other securities or property) purchasable upon
		the exercise of this Warrant and the Exercise Price of such Warrant Shares (and
		other securities or property) after such adjustment, setting forth a brief
		statement of the facts requiring such adjustment and setting forth the
		computation by which such adjustment was made.
	 

	 
		15.
	 

	 
		Notice of Corporate Action.  If at any time:
	 

	 
		(a)
	 

	 
		the Company shall take a record of the holders of its Common Stock for
		the purpose of entitling them to receive a dividend or other distribution, or
		any right to subscribe for or purchase any evidences of its indebtedness, any
		shares of stock of any class or any other securities or property, or to receive
		any other right, or
	 

	 
		
 

	 

	 
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		(b)
	 

	 
		there shall be any capital reorganization of the Company, any
		reclassification or recapitalization of the capital stock of the Company or any
		consolidation or merger of the Company with, or any sale, transfer or other
		disposition of all or substantially all the property, assets or business of the
		Company to, another corporation, or
	 

	 
		(c)
	 

	 
		there shall be a voluntary or involuntary dissolution, liquidation or
		winding up of the Company;
	 

	 
		then, in any one or more of such cases, the Company shall give to Holder
		(i) at least 20 days’ prior written notice of the date on which a record
		date shall be selected for such dividend, distribution or right or for
		determining rights to vote in respect of any such reorganization,
		reclassification, merger, consolidation, sale, transfer, disposition,
		liquidation or winding up, and (ii) in the case of any such reorganization,
		reclassification, merger, consolidation, sale, transfer, disposition,
		dissolution, liquidation or winding up, at least 20 days’ prior written
		notice of the date when the same shall take place.  Such notice in
		accordance with the foregoing clause also shall specify (i) the date on which
		any such record is to be taken for the purpose of such dividend, distribution
		or right, the date on which the holders of Common Stock shall be entitled to
		any such dividend, distribution or right, and the amount and character thereof,
		and (ii) the date on which any such reorganization, reclassification, merger,
		consolidation, sale, transfer, disposition, dissolution, liquidation or winding
		up is to take place and the time, if any such time is to be fixed, as of which
		the holders of Common Stock shall be entitled to exchange their Warrant Shares
		for securities or other property deliverable upon such disposition,
		dissolution, liquidation or winding up.  Each such written notice shall be
		sufficiently given if addressed to Holder at the last address of Holder
		appearing on the books of the Company and delivered in accordance with Section
		17(c).
	 

	 
		16.
	 

	 
		Authorized Shares.  The Company covenants that during the
		period the Warrant is outstanding, it will reserve from its authorized and
		unissued Common Stock a sufficient number of shares to provide for the issuance
		of the Warrant Shares upon the exercise of any purchase rights under this
		Warrant.  The Company further covenants that its issuance of this Warrant
		shall constitute full authority to its officers who are charged with the duty
		of executing stock certificates to execute and issue the necessary certificates
		for the Warrant Shares upon the exercise of the purchase rights under this
		Warrant.  The Company will take all such reasonable action as may be
		necessary to assure that such Warrant Shares may be issued as provided herein
		without violation of any applicable law or regulation, or of any requirements
		of the trading market upon which the Common Stock may be listed.
	 

	 
		Except and to the extent as waived or consented to by the Holder, the
		Company shall not by any action, including, without limitation, amending its
		certificate of incorporation or through any reorganization, transfer of assets,
		consolidation, merger, dissolution, issue or sale of securities or any other
		voluntary action, avoid or seek to avoid the observance or performance of any
		of the terms of this Warrant, but will at all times in good faith assist in the
		carrying out of all such terms and in the taking of all such actions as may be
		necessary or appropriate to protect the rights of Holder as set forth in this
		Warrant against impairment.  Without limiting the generality of the
		foregoing, the Company will (a) not increase the par value of any Warrant
		Shares above the amount payable therefor upon such exercise immediately prior
		to such increase in par value,
	 

	 
		
 

	 

	 
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		(b) take all such action as may be necessary or appropriate in order that
		the Company may validly and legally issue fully paid and nonassessable Warrant
		Shares upon the exercise of this Warrant, and (c) use commercially reasonable
		efforts to obtain all such authorizations, exemptions or consents from any
		public regulatory body having jurisdiction thereof as may be necessary to
		enable the Company to perform its obligations under this Warrant.
	 

	 
		Before taking any action which would result in an adjustment in the
		number of Warrant Shares for which this Warrant is exercisable or in the
		Exercise Price, the Company shall obtain all such authorizations or exemptions
		thereof, or consents thereto, as may be necessary from any public regulatory
		body or bodies having jurisdiction thereof.
	 

	 
		17.
	 

	 
		Miscellaneous.
	 

	 
		(a)
	 

	 
		Jurisdiction.  This Warrant shall constitute a contract under
		the laws of New York, without regard to its conflict of law, principles or
		rules that would result in the application of the laws of another jurisdiction.

	 

	 
		(b)
	 

	 
		Non-waiver and Expenses.  No course of dealing or any delay
		or failure to exercise any right hereunder on the part of Holder shall operate
		as a waiver of such right or otherwise prejudice Holder’s rights, powers
		or remedies, notwithstanding all rights hereunder terminate on the Termination
		Date.  If the Company willfully and knowingly fails to comply with any
		provision of this Warrant, which results in any material damages to the Holder,
		the Company shall pay to Holder such amounts as shall be sufficient to cover
		any costs and expenses including, but not limited to, reasonable
		attorneys’ fees, including those of appellate proceedings, incurred by
		Holder in collecting any amounts due pursuant hereto or in otherwise enforcing
		any of its rights, powers or remedies hereunder.
	 

	 
		(c)
	 

	 
		Notices.  Any notice, request or other document required or
		permitted to be given or delivered to the Holder by the Company shall be
		delivered in accordance with the notice provisions of the Purchase Agreement;
		provided upon any permitted assignment of this Warrant, the assignee shall
		promptly provide the Company with its contact information.
	 

	 
		(d)
	 

	 
		Limitation of Liability.  No provision hereof, in the absence
		of any affirmative action by Holder to exercise this Warrant or purchase
		Warrant Shares, and no enumeration herein of the rights or privileges of
		Holder, shall give rise to any liability of Holder for the purchase price of
		any Common Stock or as a stockholder of the Company, whether such liability is
		asserted by the Company or by creditors of the Company.
	 

	 
		(e)
	 

	 
		Remedies.  Holder, in addition to being entitled to exercise
		all rights granted by law, including recovery of damages, will be entitled to
		specific performance of its rights under this Warrant.  The Company agrees
		that monetary damages would not be adequate compensation for any loss incurred
		by reason of a breach by it of the provisions of this Warrant and hereby agrees
		to waive the defense in any action for specific performance that a remedy at
		law would be adequate.
	 

	 
		
 

	 

	 
		9
	 

	 
		

	 

	 
	 
		

	 

	 
		

	 

	 
		(f)
	 

	 
		Successors and Assigns.  Subject to applicable securities
		laws, this Warrant and the rights and obligations evidenced hereby shall inure
		to the benefit of and be binding upon the successors of the Company and the
		successors and permitted assigns of Holder.  The provisions of this
		Warrant are intended to be for the benefit of all Holders from time to time of
		this Warrant and shall be enforceable by any such Holder or holder of Warrant
		Shares.
	 

	 
		(g)
	 

	 
		Amendment.  This Warrant may be modified or amended or the
		provisions hereof waived with the written consent of the Company and the
		Holder.
	 

	 
		(h)
	 

	 
		Severability.  Wherever possible, each provision of this
		Warrant shall be interpreted in such manner as to be effective and valid under
		applicable law, but if any provision of this Warrant shall be prohibited by or
		invalid under applicable law, such provision shall be ineffective to the extent
		of such prohibition or invalidity, without invalidating the remainder of such
		provisions or the remaining provisions of this Warrant.
	 

	 
		(i)
	 

	 
		Headings.  The headings used in this Warrant are for the
		convenience of reference only and shall not, for any purpose, be deemed a part
		of this Warrant.
	 

	 
		********************
	 

	 
		
 

	 

	 
		10
	 

	 
		

	 

	 
	 
		

	 

	 
		

	 

	 
		

	 

	 
		IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
		its officer thereunto duly authorized.
	 

	 
		Dated:  February 20, 2007
	 

	 
		VION PHARMACEUTICALS, INC.

	 

	 
		By: ______________________________
	 

	 
		Name: Howard B. Johnson
	 

	 
		Title: President and Chief Financial Officer
	 

	 
		

	 

	 
		
 

	 

	 
		11
	 

	 
		

	 

	 
	 
		

	 

	 
		

	 

	 
		

	 

	 
		NOTICE OF EXERCISE
	 

	 
		To:
	 

	 
		Vion Pharmaceuticals, Inc.
	 

	 
		The undersigned hereby elects to purchase ________ Warrant Shares of Vion
		Pharmaceuticals, Inc. pursuant to the terms of the attached Warrant, and
		tenders herewith payment of $_____ (the Exercise Price multiplied by such
		number of Warrant Shares), by wire transfer of immediately available funds or
		cashier’s check drawn on a United States bank all in accordance with the
		terms of the Warrant.
	 

	 
		Please issue a certificate or certificates representing said Warrant
		Shares in the name of the undersigned or in such other name as is specified
		below:
	 

	 
		_______________________________
	 

	 
		

	 

	 
		The Warrant Shares shall be delivered to the following:
	 

	 
		_______________________________
	 

	 
		

	 

	 
		_______________________________
	 

	 
		

	 

	 
		_______________________________
	 

	 
		(4)
	 

	 
		Accredited Investor.  The undersigned is an “accredited
		investor” as defined in Regulation D promulgated under the Securities Act
		of 1933, as amended, a non-U.S. person under Regulation S, or a “qualified
		institutional buyer” under Rule 144A.
	 

	 
		[PURCHASER]

	 

	 
		

	 

	 
		By: ______________________________
	 

	 
		Name:
	 

	 
		Title:
	 

	 
		Dated:  ________________________
	 

	 
		
 

	 

	 
		 
	 

	 
		

	 

	 
	 
		

	 

	 
		

	 

	 
		ASSIGNMENT FORM
	 

	 
		 (To assign the foregoing warrant, execute
 this form and supply
		required information. 
 Do not use this form to exercise the warrant.)
	 

	 
		FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
		thereby are hereby assigned to
	 

	 
		__________________________________________________ whose address is
	 

	 
		

	 

	 
		_______________________________________________________________.
	 

	 
		

	 

	 
		_______________________________________________________________
	 

	 
		

	 

	 
		Dated:  _____________, _______
	 

	 
		

	 

	 
		

	 

	 
		Holder’s Signature:
	 

	 
		___________________________
	 

	 
		

	 

	 
		Holder’s Address:
	 

	 
		___________________________
	 

	 
		

	 

	 
		___________________________
	 

	 
		

	 

	 
		Signature Guaranteed:  __________________
		 _________________________
	 

	 
		

	 

	 
		NOTE:  The signature to this Assignment Form must correspond with
		the name as it appears on the face of the Warrant, without alteration or
		enlargement or any change whatsoever, and must be guaranteed by a bank or trust
		company.  Officers of corporations and those acting in a fiduciary or
		other representative capacity should file proper evidence of authority to
		assign the foregoing Warrant.exv10w1

 

Exhibit 10.1

Year 2007

Annual

Management Incentive

Program

USG Corporation

 

 

PURPOSE

To enhance USG Corporation’s ability to attract, motivate, reward and retain key employees of
the Corporation and its operating subsidiaries and to align management’s interests with those of
the Corporation’s stockholders by providing incentive award opportunities to managers who make a
measurable contribution to the Corporation’s business objectives.

INTRODUCTION

This Annual Management Incentive Program (the “Program”) is in effect from January 1, 2007
through December 31, 2007.

ELIGIBILITY

Individuals eligible for participation in this Program are those officers and other key
employees occupying management positions in Broadband 11 or higher. Employees who participate in
any other annual incentive program of the Corporation or any of its subsidiaries are not eligible
to participate in this Program but could be considered for special awards.

GOALS

For the 2007 Annual Management Incentive Program, Consolidated Net Earnings and consolidated,
subsidiary and profit center Strategic Focus Targets will be determined by the Compensation and
Organization Committee of the USG Board of Directors (the “Committee”) after considering
recommendations submitted from management of USG Corporation and the Operating Subsidiaries.

1

 

AWARD VALUES

For the Annual Management Incentive Program, position target incentive values are based on
level of accountability and are expressed as a percent of approved annualized salary. Resulting
award opportunities represent a fully competitive incentive opportunity for 100% (target)
achievement of goals:

	 	 	 	 	 	 	 
	 
	 	 	Position Title or	 	 
	 	 	Salary Reference Point	 	Position Target Incentive
	 
	·

	 	Chairman & CEO, USG Corporation
	 	 	125	%
	 
	·

	 	President and Chief Operating Officer, USG Corporation
	 	 	90	%
	 
	·

	 	Executive Vice President & Chief Financial Officer, USG Corporation	 	 	65	%
	·

	 	Executive Vice President & General Counsel, USG Corporation	 	 	 	 
	·

	 	Executive Vice President and Chief Strategy Officer, USG Corporation
and President International
	 	 	 	 
	 
	·

	 	Vice President, USG Corporation & President & COO, L & W Supply Corp.
	 	 	50	%
	 
	·

	 	Senior Vice President Human Resources, USG Corporation	 	 	45	%
	·

	 	Senior Vice President Communications, USG Corporation
	 	 	 	 
	 
	·

	 	Vice President & Chief Technology Officer	 	 	40	%
	·

	 	Vice President & Controller, USG Corporation	 	 	 	 
	·

	 	Vice President & Treasurer, USG Corporation	 	 	 	 
	·

	 	Vice President Research & Technology Innovation, USG Corporation	 	 	 	 
	·

	 	Vice President Compensation,
Benefits & Administration, USG Corporation	 	 	 	 
	·

	 	Corporate Secretary & Associate General Counsel, USG Corporation	 	 	 	 
	·

	 	Vice President, USG Corporation
	 	 	 	 
	 
	·

	 	Salary Broadband 16 and over
	 	 	35	%
	·

	 	Salary Broadband 15
	 	 	30	%
	·

	 	Salary Broadband 14
	 	 	25	%
	·

	 	Salary Broadband 13
	 	 	20	%
	·

	 	Salary Broadband 12
	 	 	15	%
	·

	 	Salary Broadband 11
	 	 	10	%
	 

2

 

AWARDS

Incentive awards for all participants in the 2007 Annual Management Incentive Program will be
reviewed and approved by the Committee. For all participants, the annual incentive award par
opportunity is the annualized salary in effect on April 1, 2007 multiplied by the applicable
position target incentive value percent.

Incentive awards for 2007 will be based on a combination of the following elements:

	 	 	 	 	 
	I.

	 	CONSOLIDATED NET EARNINGS
	 	50% OF INCENTIVE

Consolidated Net Earnings will be as reported on the Corporation’s year-end financial statements
with adjustments for significant non-operational charges. Such adjustments have in the past been
for Fresh Start Accounting, asbestos, restructuring charges, bankruptcy expenses and the cumulative
impact of new accounting pronouncements (goodwill impairment). For all participants, this portion
of the award represents 50% of the incentive par. This portion of the award will be paid from a
pool funded by Consolidated Net Earnings results according to the following schedule:

	 	 	 
	$0 to $75 Million Net Earnings

	 	2.06% of this tier will fund the pool
	$75+ to $150 Million Net Earnings

	 	1.94% of this tier will fund the pool
	$150+ to $400 Million Net Earnings

	 	1.60% of this tier will fund the pool
	$400+ to $800 Million

	 	1.10% of this tier will fund the pool

Each tier of earnings is calculated separately and added together to determine the total pool.
This amount is then divided by the total plan par (sum of each individual participant’s Net
Earnings par, which is 50% of each participant’s total par). The factor derived from this method
is then applied to each participant’s Net Earnings par to determine the individual award for this
segment.

	 	 	 	 	 
	II.

	 	STRATEGIC FOCUS TARGETS:
	 	50% OF INCENTIVE

Strategic Focus Targets will be measurable, verifiable and derived from the formal strategic
planning process. For 2007, Strategic Focus Targets will generally include Overhead Reduction,
Customer Satisfaction, Working Capital Reduction, Cost Reduction, Business Unit Operating Profit
and other operational priorities. The award adjustment factor for this segment will range from 0.5
(after achieving a minimum threshold performance level) to 2.0 for maximum attainment.

The weighting on any individual Strategic Focus Target generally will be in 5% increments and not
be less than 10%. The weighting of all assigned Strategic Focus Targets will equal 50% of the
individual’s total par.

3

 

WEIGHTINGS OF PROGRAM ELEMENTS

All participants in this Program, including the sixteen most senior executives, will have the
same overall weightings, 50% on Consolidated Net Earnings and 50% on Strategic Focus Targets.

SPECIAL AWARDS

In addition to the incentive opportunity provided by this Program, a special award may be
recommended for any participant or non-participant, other than a Corporation Officer, who has made
an extraordinary contribution to the Corporation’s welfare or earnings.

GENERAL PROVISIONS

	1.	 	The Compensation and Organization Committee of the USG Board of Directors reserves the
right to adjust award amounts either up or down based on its assessment of the Corporation’s
overall performance relative to market conditions.
	 
	2.	 	The Committee shall review and approve the awards recommended for officers and other
employees who are eligible participants in the 2007 Annual Management Incentive Program. The
Committee shall submit to the Board of Directors, for their ratification, a report of the
awards for all eligible participants including corporate officers approved by the Committee in
accordance with the provisions of the Program.
	 
	3.	 	The Committee shall have full power to make the rules and regulations with respect to the
determination of achievement of goals and the distribution of awards. No awards will be made
until the Committee has certified financial achievements and applicable awards in writing.
	 
	4.	 	The judgement of the Committee in construing this Program or any provisions thereof, or in
making any decision hereunder, shall be final and conclusive and binding upon all employees of
the Corporation and its subsidiaries whether or not selected as beneficiaries hereunder, and
their heirs, executors, personal representatives and assignees.
	 
	5.	 	Nothing herein contained shall limit or affect in any manner or degree the normal and usual
powers of management, exercised by the officers and the Board of Directors or committees
thereof, to change the duties or the character of employment of any employee of the
Corporation or to remove the individual from the employment of the Corporation at any time,
all of which rights and powers are expressly reserved.
	 
	6.	 	The awards made to employees shall become a liability of the Corporation or the
appropriate subsidiary as of December 31, 2007 and all payments to be made hereunder will
be made as soon as practicable, but in any event before two and one half months after
December 31, 2007, after said awards have been approved by the Committee.

4

 

ADMINISTRATIVE GUIDELINES

	1.	 	Award values will be based on annualized salary in effect on April 1, 2007 for each
qualifying participant. Any change in duties, dimensions or responsibilities of a current
position resulting in an increase or decrease in salary range reference point or market rate
will result in pro-rata incentive award. Respective reference points, target incentive values
or goals will be applied based on the actual number of full months of service at each
position.
	 
	2.	 	As provided by the Program, no award is to be paid to any participant who is not a regular
full-time employee, (or a part time employee as approved by the Senior Vice President Human
Resources, USG Corporation) in good standing at the end of the calendar year to which the
award applies. However, if an eligible participant with three (3) or more months of active
service in the Program year subsequently retires, becomes disabled, dies, is discharged from
the employment of the Company without cause, or is on an approved unpaid leave, the
participant (or beneficiary) may be recommended for an award which would otherwise be payable
based on goal achievement, prorated for the actual months of active service during the year.
	 
	3.	 	Employees participating in any other incentive or bonus program of the Corporation or a
Subsidiary who are transferred during the year to a position covered by the Annual Management
Incentive Program will be eligible to receive a potential award prorated for actual full
months of service in the two positions with the respective incentive program and target
incentive values to apply. For example, a Marketing Manager promoted to Director, Marketing
on August 1, will be eligible to receive a pro-rata award for seven months based on the
Marketing Manager Plan provisions and values, and for five months under the Annual Management
Incentive Program provisions and target incentive values.
	 
	4.	 	In the event of transfer of an employee from an assignment which does not qualify for
participation in any incentive or bonus plan to a position covered by the Annual Management
Incentive Program, the employee is eligible to participate in the Annual Management Incentive
Program with any potential award prorated for the actual months of service in the position
covered by the Program during the year. A minimum of three months of service in the eligible
position is required.
	 
	5.	 	Participation during the current Program year for individuals employed from outside the
Corporation is possible with any award to be prorated for actual full months of service in the
eligible position. A minimum of three full months of eligible service is required for award
consideration.
	 
	6.	 	Exceptions to established administrative guidelines can only be made by the Committee.

5

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