Document:

exv10w54

 

Exhibit 10.54

JOINDER AGREEMENT

               This Joinder Agreement (the “Joinder Agreement”) is made this 5th day of
September, 2003 by and among FermPro Manufacturing, LP, a Georgia limited
partnership (“FermPro”), Astral Technologies, Inc., a South Carolina
corporation and the general partner of FermPro (“Astral”), the Management
Employees (as defined in the Purchase Agreement), Martek Biosciences
Corporation, a Delaware corporation (“Martek”), and Martek Biosciences
Kingstree Corporation, a Delaware corporation and a wholly owned subsidiary of
Martek (“Martek Kingstree”). Capitalized terms used but not otherwise defined
in this Joinder Agreement shall have the meanings ascribed thereto in the
Purchase Agreement.

          WHEREAS, FermPro, Astral, the Management Employees and Martek, on behalf
of itself or a wholly-owned corporation or entity to be formed by it (the
“Buyer”) entered into that certain Asset Sale and Purchase Agreement dated as
of July 21, 2003, as amended by the First Amendment to Asset Sale and Purchase
Agreement dated as of September 2, 2003, and as further amended by the Second
Amendment to Asset Sale and Purchase Agreement dated as of September 5, 2003
(collectively, the “Purchase Agreement”) whereby Buyer agreed to purchase from
FermPro the Assets in connection with FermPro’s operation of a large-scale
fermentation facility in Kingstree, South Carolina;

          WHEREAS, as contemplated by the Purchase Agreement, Martek formed a
wholly-owned subsidiary, Martek Kingstree, on August 4, 2003, by filing a
Certificate of Incorporation with the Secretary of State of the State of
Delaware; and

          WHEREAS, in connection with FermPro’s sale and transfer of the Assets to
Buyer under the Purchase Agreement, Martek Kingstree is executing this Joinder
Agreement to join in and be bound by the terms and provisions of the Purchase
Agreement as the Buyer thereunder.

          NOW
THEREFORE, in consideration of the mutual promises hereinafter set
forth and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereby agree as follows:

          1. Upon the execution of this Joinder Agreement by all of the parties
hereto, Martek Kingstree shall become a party to the Purchase Agreement as the
Buyer, as that term is defined therein, as if Martek Kingstree had been a party
to such agreement as of the date thereof.

          2. This Joinder Agreement shall act as a counterpart signature to the
Purchase Agreement.

 

 

           3. This Joinder Agreement may be executed in multiple counterparts, each
of which shall constitute an original but all of which shall constitute but one
and the same instrument.

          4. This Joinder Agreement shall be construed under and governed by the
laws of the State of Maryland without giving effect to its conflicts of laws
principles.

[signatures appear on following page]

2

 

     IN WITNESS WHEREOF, each of the parties hereto has executed this Joinder
Agreement, or has caused this Joinder Agreement to be duly executed and
delivered in its name on it behalf, all as of the day and year first above
written.

	 	 	 	 	 
	[Seal]	 	FermPro Manufacturing, LP
	 	 	 	 	 
	 	 	
By:
	 	Astral Technologies, Inc.,

its General Partner
	 	 	 	 	 
	 	 	By:	 	/s/ BARNEY B. EASTERLING, JR.
	 	 	 	 	

	 	 	 	 	Name:  Barney B. Easterling, Jr.

	 	 	 	 	Title:  President and CEO

	[Seal]	 	Astral Technologies, Inc.
	 	 	 	 	 
	 	 	
By:
	 	 BARNEY B. EASTERLING,
        JR. 
	 	 	 	 	

	 	 	 	 	Barney B. Easterling, Jr.

President and Chief Executive Officer
	 	 	 	 	 
	 	 	Management Employees:
	 	 	 	 	 
	 	 	/s/ FLINT HARDING, III

	 	 	Flint Harding, III
	 	 	 	 	 
	 	 	/s/ RACHEL S. MONTGOMERY

	 	 	Rachel S. Montgomery
	 	 	 	 	 
	 	 	/s/ MICHAEL L. HORTON

	 	 	Michael L. Horton

S-1

 

	 	 	 	 	 
	 	 	

	 	 	H. Ronald Easler
	 	 	 	 	 
	 	 	

	 	 	Roger H. Gause
	 	 	 	 	 
	 	 	

	 	 	Barney B. Easterling, Jr.
	 	 	 	 	 
	[Seal]	 	Martek Biosciences Corporation
	 	 	 	 	 
	 	 	
By:	 	

	 	 	Name:
	 	

	 	 	
Title:	 	

	 	 	 	 	 
	[Seal]	 	Martek
Biosciences Kingstree Corporation

	 	 	
By:	 	

	 	 	
Name:
	 	

	 	 	

Title:	 	

S-2exv10w55

 

Exhibit 10.55

MARTEK BIOSCIENCES CORPORATION

2003 NEW EMPLOYEE STOCK OPTION PLAN

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 	 	 	 	 	 	

	1.	 	PURPOSE	 	 	1	 
	2.	 	DEFINITIONS	 	 	1	 
	3.	 	ADMINISTRATION OF THE PLAN	 	 	4	 
	 	 	
3.1.
	 	Board
	 	 	4	 
	 	 	
3.2.
	 	Committee
	 	 	4	 
	 	 	
3.3.
	 	Terms of Awards
	 	 	5	 
	 	 	
3.4.
	 	Deferral Arrangement
	 	 	5	 
	 	 	
3.5.
	 	No Liability
	 	 	5	 
	4.	 	
STOCK SUBJECT TO THE PLAN
	 	 	6	 
	5.	 	EFFECTIVE DATE, DURATION AND AMENDMENTS	 	 	6	 
	 	 	
5.1.
	 	Effective Date
	 	 	6	 
	 	 	
5.2.
	 	Term
	 	 	6	 
	 	 	
5.3.
	 	Amendment and Termination of the Plan
	 	 	6	 
	6.	 	AWARD ELIGIBILITY AND LIMITATIONS	 	 	7	 
	 	 	
6.1.
	 	Employees
	 	 	7	 
	7.	 	AWARD AGREEMENT	 	 	7	 
	8.	 	TERMS AND CONDITIONS OF OPTIONS	 	 	7	 
	 	 	
8.1.
	 	Option Price
	 	 	7	 
	 	 	
8.2.
	 	Vesting
	 	 	7	 
	 	 	
8.3.
	 	Term
	 	 	7	 
	 	 	
8.4.
	 	Termination of Service
	 	 	7	 
	 	 	
8.5.
	 	Limitations on Exercise of Option
	 	 	8	 
	 	 	
8.6.
	 	Method of Exercise
	 	 	8	 
	 	 	
8.7.
	 	Rights of Holders of Options
	 	 	8	 
	 	 	
8.8.
	 	Delivery of Stock Certificates
	 	 	8	 
	9.	 	TRANSFERABILITY OF OPTIONS	 	 	8	 
	 	 	
9.1.
	 	Transferability of Options
	 	 	8	 
	 	 	
9.2.
	 	Family Transfers
	 	 	9	 
	10.	 	FORM OF PAYMENT FOR OPTIONS	 	 	9	 
	 	 	
10.1.
	 	General Rule
	 	 	9	 
	 	 	
10.2.
	 	Surrender of Stock
	 	 	9	 
	 	 	
10.3.
	 	Cashless Exercise
	 	 	9	 
	 	 	
10.4.
	 	Other Forms of Payment
	 	 	10	 
	11.	 	PARACHUTE LIMITATIONS	 	 	10	 
	12.	 	REQUIREMENTS OF LAW	 	 	10	 
	 	 	
12.1.
	 	General
	 	 	10	 
	 	 	
12.2.
	 	Rule 16b-3
	 	 	11	 
	13.	 	EFFECT OF CHANGES IN CAPITALIZATION	 	 	11	 
	 	 	
13.1.
	 	Changes in Stock
	 	 	11	 
	 	 	
13.2.
	 	Reorganization in Which the Company Is
the Surviving Entity Which does not
Constitute a Corporate Transaction
	 	 	12	 
	 	 	
13.3.
	 	Corporate Transaction
	 	 	12	 

- i -

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 	 	 	 	 	 	

	 	 	
13.4.
	 	Adjustments
	 	 	13	 
	 	 	
13.5.
	 	No Limitations on Company
	 	 	13	 
	14.	 	GENERAL PROVISIONS	 	 	13	 
	 	 	
14.1.
	 	Disclaimer of Rights
	 	 	13	 
	 	 	
14.2.
	 	Nonexclusivity of the Plan
	 	 	14	 
	 	 	
14.3.
	 	Withholding Taxes
	 	 	14	 
	 	 	
14.4.
	 	Captions
	 	 	15	 
	 	 	
14.5.
	 	Other Provisions
	 	 	15	 
	 	 	
14.6.
	 	Number And Gender
	 	 	15	 
	 	 	
14.7.
	 	Severability
	 	 	15	 
	 	 	
14.8.
	 	Governing Law
	 	 	15	 

- ii -

 

MARTEK BIOSCIENCES CORPORATION

2003 NEW EMPLOYEE STOCK OPTION PLAN

     Martek Biosciences Corporation, a Delaware corporation (the “Company”),
sets forth herein the terms of its 2003 New Employee Stock Option Plan (the
“Plan”), as follows:

1.     PURPOSE

     The Plan is intended to enhance the Company’s and its Affiliates’ (as
defined herein) ability to attract highly qualified employees and to motivate
such persons to serve the Company and its Affiliates and to expend maximum
effort to improve the business results and earnings of the Company, by
providing to such employees an opportunity to acquire or increase a direct
proprietary interest in the operations and future success of the Company. To
this end, the Plan provides for the grant of stock options. Stock options
granted under the Plan shall be non-qualified stock options.

2.     DEFINITIONS

     For purposes of interpreting the Plan and related documents (including
Award Agreements), the following definitions shall apply:

     2.1 “Affiliate” means, with respect to the Company, any company or other
trade or business that controls, is controlled by or is under common control
with the Company within the meaning of Rule 405 of Regulation C under the
Securities Act, including, without limitation, any Subsidiary.

     2.2 “Award” means a grant of an Option under the Plan.

     2.3 “Award Agreement” means the written agreement between the Company and
a Grantee that evidences and sets out the terms and conditions of an Award.

     2.4 “Benefit Arrangement” shall have the meaning set forth in Section 11
hereof.

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

     2.6 “Cause” means, as determined by the Board and unless otherwise
provided in an applicable agreement with the Company or an Affiliate, (i) gross
negligence or willful misconduct in connection with the performance of duties;
(ii) conviction of a criminal offense (other than minor traffic offenses); or
(iii) material breach of any term of any employment, consulting or other
services, confidentiality, intellectual property or non-competition agreements,
if any, between the Service Provider and the Company or an Affiliate.

     2.7 “Code” means the Internal Revenue Code of 1986, as now in effect or as
hereafter amended.

 

 

     2.8 “Committee” means a committee of, and designated from time to time by
resolution of, the Board, which shall be constituted as provided in Section
3.2.

     2.9 “Company” means Martek Biosciences Corporation.

     2.10 “Corporate Transaction” means (i) the dissolution or liquidation of
the Company or a merger, consolidation, or reorganization of the Company with
one or more other entities in which the Company is not the surviving entity,
(ii) a sale of substantially all of the assets of the Company to another person
or entity, or (iii) any transaction (including without limitation a merger or
reorganization in which the Company is the surviving entity) which results in
any person or entity (other than persons who are shareholders or Affiliates
immediately prior to the transaction) owning 50% or more of the combined voting
power of all classes of stock of the Company.

     2.11 “Disability” means the Grantee is unable to perform each of the
essential duties of such Grantee’s position by reason of a medically
determinable physical or mental impairment which is potentially permanent in
character or which can be expected to last for a continuous period of not less
than 12 months.

     2.12 “Effective Date” means September 4, 2003, the date the Plan is
approved by the Board.

     2.13 “Exchange Act” means the Securities Exchange Act of 1934, as now in
effect or as hereafter amended.

     2.14 “Fair Market Value” means the value of a share of Stock, determined
as follows: if on the Grant Date or other determination date the Stock is
listed on an established national or regional stock exchange, is admitted to
quotation on The Nasdaq Stock Market, Inc. or is publicly traded on an
established securities market, the Fair Market Value of a share of Stock shall
be the closing price of the Stock on such exchange or in such market (if there
is more than one such exchange or market the Board shall determine the
appropriate exchange or market) on the Grant Date or such other determination
date (or if there is no such reported closing price, the Fair Market Value
shall be the mean between the highest bid and lowest asked prices or between
the high and low sale prices on such trading day) or, if no sale of Stock is
reported for such trading day, on the next preceding day on which any sale
shall have been reported. If the Stock is not listed on such an exchange,
quoted on such system or traded on such a market, Fair Market Value shall be
the value of the Stock as determined by the Board in good faith.

     2.15 “Family Member” means a person who is a spouse, former spouse, child,
stepchild, grandchild, parent, stepparent, grandparent, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother, sister,
brother-in-law, or sister-in-law, including adoptive relationships, of the
Grantee, any person sharing the Grantee’s household (other than a tenant or
employee), a trust in which any one or more of these persons have more than
fifty percent of the beneficial interest, a foundation in which any one or more
of these persons (or the Grantee) control the management of assets, and any
other entity in which

- 2 -

 

one or more of these persons (or the Grantee) own more than fifty percent
of the voting interests.

     2.16 “Grant Date” means, as determined by the Board or authorized
Committee, the latest to occur of (i) the date as of which the Board approves
an Award, (ii) the date on which the recipient of an Award first becomes
eligible to receive an Award under Section 6 hereof, or (iii) such other date
as may be specified by the Board.

     2.17 “Grantee” means a person who receives or holds an Award under the
Plan.

     2.18 “Non-qualified Stock Option” means an Option that is not an incentive
stock option.

     2.19 “Option” means an option to purchase one or more shares of Stock
pursuant to the Plan.

     2.20 “Option Price” means the purchase price for each share of Stock
subject to an Option.

     2.21 “Other Agreement” shall have the meaning set forth in Section 11
hereof.

     2.22 “Outside Director” means a member of the Board who is not an officer
or employee of the Company.

     2.23 “Plan” means this Martek Biosciences Corporation 2003 New Employee
Stock Option Plan.

     2.24 “Securities Act” means the Securities Act of 1933, as now in effect
or as hereafter amended.

     2.25 “Service” means service as an employee, officer, director or other
Service Provider of the Company or an Affiliate. Unless otherwise stated in
the applicable Award Agreement, a Grantee’s change in position or duties shall
not result in interrupted or terminated Service, so long as such Grantee
continues to be an employee, officer, director or other Service Provider of the
Company or an Affiliate. Subject to the preceding sentence, whether a
termination of Service shall have occurred for purposes of the Plan shall be
determined by the Board, which determination shall be final, binding and
conclusive.

     2.26 “Service Provider” means an employee, officer or director of the
Company or an Affiliate, or a consultant or adviser currently providing
services to the Company or an Affiliate.

     2.27 “Stock” means the common stock, par value $.10 per share, of the
Company.

     2.28 “Subsidiary” means any “subsidiary corporation” of the Company within
the meaning of Section 424(f) of the Code.

- 3 -

 

     2.29 “Termination Date” means the date upon which an Option shall
terminate or expire, as set forth in Section 8.3 hereof.

3. ADMINISTRATION OF THE PLAN

     3.1. Board

     The Board shall have such powers and authorities related to the
administration of the Plan as are consistent with the Company’s certificate of
incorporation and by-laws and applicable law. The Board shall have full power
and authority to take all actions and to make all determinations required or
provided for under the Plan, any Award or any Award Agreement, and shall have
full power and authority to take all such other actions and make all such other
determinations not inconsistent with the specific terms and provisions of the
Plan that the Board deems to be necessary or appropriate to the administration
of the Plan, any Award or any Award Agreement. All such actions and
determinations shall be by the affirmative vote of a majority of the members of
the Board present at a meeting or by unanimous consent of the Board executed in
writing in accordance with the Company’s certificate of incorporation and
by-laws and applicable law. The interpretation and construction by the Board
of any provision of the Plan, any Award or any Award Agreement shall be final
and conclusive.

     3.2. Committee.

     The Board from time to time may delegate to the Committee such powers and
authorities related to the administration and implementation of the Plan, as
set forth in Section 3.1 above and other applicable provisions, as the Board
shall determine, consistent with the certificate of incorporation and by-laws
of the Company and applicable law.

		
	 	     (i) Except as provided in Subsection (ii) and except as the Board
may otherwise determine, the Committee, if any, appointed by the Board to
administer the Plan shall consist of two or more Outside Directors of the
Company who: (a) qualify as “outside directors” within the meaning of
Section 162(m) of the Code and who (b) meet such other requirements as
may be established from time to time by the Securities and Exchange
Commission for plans intended to qualify for exemption under Rule 16b—3
(or its successor) under the Exchange Act.

		
	 	     (ii) The Board may also appoint one or more separate committees of
the Board, each composed of one or more directors of the Company who need
not be Outside Directors, who may administer the Plan with respect to
employees who are not officers or directors of the Company, may grant
Awards under the Plan to such employees, and may determine all terms of
such Awards.

In the event that the Plan, any Award or any Award Agreement entered into
hereunder provides for any action to be taken by or determination to be made by
the Board, such action may be taken or such determination may be made by the
Committee if the power and authority to do so has been delegated to the
Committee by the Board as provided for in this Section. Unless otherwise
expressly determined by the Board, any such action or

- 4 -

 

determination by the Committee shall be final, binding and conclusive. To the
extent permitted by law, the Committee may delegate its authority under the
Plan to a member of the Board.

     3.3. Terms of Awards.

     Subject to the other terms and conditions of the Plan, the Board shall
have full and final authority to:

     (i)  designate Grantees,

     (ii)  determine the number of shares of Stock to be subject to an Award,

     (iii)  establish the terms and conditions of each Award,

     (v)  prescribe the form of each Award Agreement evidencing an Award, and

     (vi)  amend, modify, or supplement the terms of any outstanding Award.
Such authority specifically includes the authority, in order to effectuate the
purposes of the Plan but without amending the Plan, to modify Awards to
eligible individuals who are foreign nationals or are individuals who are
employed outside the United States to recognize differences in local law, tax
policy, or custom.

     The Company may retain the right in an Award Agreement to cause a
forfeiture of the gain realized by a Grantee on account of actions taken by the
Grantee in violation or breach of or in conflict with any non-competition
agreement, any agreement prohibiting solicitation of employees or clients of
the Company or any Affiliate thereof or any confidentiality obligation with
respect to the Company or any Affiliate thereof or otherwise in competition
with the Company or any Affiliate thereof, to the extent specified in such
Award Agreement applicable to the Grantee. Furthermore, the Company may annul
an Award if the Grantee is an employee of the Company or an Affiliate thereof
and is terminated for Cause as defined in the applicable Award Agreement or the
Plan, as applicable. The grant of any Award shall be contingent upon the
Grantee executing the appropriate Award Agreement.

     3.4. Deferral Arrangement.

     The Board may permit or require the deferral of any Award payment into a
deferred compensation arrangement, subject to such rules and procedures as it
may establish, which may include provisions for the payment or crediting of
interest or dividend equivalents, including converting such credits into
deferred Stock equivalents and restricting deferrals to comply with hardship
distribution rules affecting 401(k) plans.

     3.5. No Liability.

     No member of the Board or of the Committee shall be liable for any action
or determination made in good faith with respect to the Plan or any Award or
Award Agreement.

- 5 -

 

4. STOCK SUBJECT TO THE PLAN

     Subject to adjustment as provided in Section 13 hereof, the number of
shares of Stock available for issuance under the Plan shall be 300,000. Stock
issued or to be issued under the Plan shall be authorized but unissued shares
or issued shares that have been reacquired by the Company. If any shares
covered by an Award are not purchased or are forfeited, or if an Award
otherwise terminates without delivery of any Stock subject thereto, then the
number of shares of Stock counted against the aggregate number of shares
available under the Plan with respect to such Award shall, to the extent of any
such forfeiture or termination, again be available for making Awards under the
Plan. If the Option Price of any Option granted under the Plan, or if pursuant
to Section 14.3 the withholding obligation of any Grantee with respect to an
Option, is satisfied by tendering shares of Stock to the Company (by either
actual delivery or by attestation) or by withholding shares of Stock, only the
number of shares of Stock issued net of the shares of Stock tendered or
withheld shall be deemed delivered for purposes of determining the maximum
number of shares of Stock available for delivery under the Plan.

5. EFFECTIVE DATE, DURATION AND AMENDMENTS

     5.1. Effective Date.

     The Plan shall be effective as of the Effective Date.

     5.2. Term.

     The Plan shall terminate automatically ten (10) years after its adoption
by the Board and may be terminated on any earlier date as provided in Section
5.3.

     5.3. Amendment and Termination of the Plan

     The Board may, at any time and from time to time, amend, suspend, or
terminate the Plan as to any shares of Stock as to which Awards have not been
made. An amendment shall be contingent on approval of the Company’s
stockholders to the extent stated by the Board or required by applicable law.
No Awards shall be made after termination of the Plan. No amendment,
suspension, or termination of the Plan shall, without the consent of the
Grantee, impair rights or obligations under any Award theretofore awarded under
the Plan.

- 6 -

 

6. AWARD ELIGIBILITY AND LIMITATIONS

     6.1. Employees

     Subject
to this Section 6, Awards may be made under the Plan as inducement
awards (including in connection with a merger or acquisition) to new employees
of the Company or its Affiliates or to previous employees of Company or its
Affiliates rehired after a bona fide period of non-employment.

7. AWARD AGREEMENT

     Each Award granted pursuant to the Plan shall be evidenced by an Award
Agreement, in such form or forms as the Board shall from time to time
determine. Award Agreements granted from time to time or at the same time need
not contain similar provisions but shall be consistent with the terms of the
Plan. Each Award Agreement evidencing an Award of Options shall specify that
the Options are intended to be Non-qualified Stock Options.

8. TERMS AND CONDITIONS OF OPTIONS

     8.1. Option Price

     The Option Price of each Option shall be fixed by the Board and stated in
the Award Agreement evidencing such Option. In no case shall the Option Price
of any Option be less than the par value of a share of Stock.

     8.2. Vesting.

     Subject to Sections 8.3 and 13.3 hereof, each Option granted under the
Plan shall become exercisable at such times and under such conditions as shall
be determined by the Board and stated in the Award Agreement. For purposes of
this Section 8.2, fractional numbers of shares of Stock subject to an Option
shall be rounded down to the next nearest whole number.

     8.3. Term.

     Each Option granted under the Plan shall terminate, and all rights to
purchase shares of Stock thereunder shall cease, upon the expiration of ten
years from the date such Option is granted, or under such circumstances and on
such date prior thereto as is set forth in the Plan or as may be fixed by the
Board and stated in the Award Agreement relating to such Option (the
“Termination Date”).

     8.4. Termination of Service.

     Each Award Agreement shall set forth the extent to which the Grantee shall
have the right to exercise the Option following termination of the Grantee’s
Service. Such provisions shall be determined in the sole discretion of the
Board, need not be uniform among all Options issued pursuant to the Plan, and
may reflect distinctions based on the reasons for termination of Service.

- 7 -

 

     8.5. Limitations on Exercise of Option.

     Notwithstanding any other provision of the Plan, in no event may any
Option be exercised, in whole or in part, after ten years following the Grant
Date, or after the occurrence of an event referred to in Section 13 hereof
which results in termination of the Option.

     8.6. Method of Exercise.

     An Option that is exercisable may be exercised by the Grantee’s delivery
to the Company of written notice of exercise on any business day, at the
Company’s principal office, on the form specified by the Company. Such notice
shall specify the number of shares of Stock with respect to which the Option is
being exercised and shall be accompanied by payment in full of the Option Price
of the shares for which the Option is being exercised plus the amount (if any)
of federal and/or other taxes which the Company may, in its judgment, be
required to withhold with respect to the exercise of the Option. The minimum
number of shares of Stock with respect to which an Option may be exercised, in
whole or in part, at any time shall be the lesser of (i) 100 shares or such
lesser number set forth in the applicable Award Agreement and (ii) the maximum
number of shares available for purchase under the Option at the time of
exercise.

     8.7. Rights of Holders of Options

     Unless otherwise stated in the applicable Award Agreement, an individual
holding or exercising an Option shall have none of the rights of a stockholder
(for example, the right to receive cash or dividend payments or distributions
attributable to the subject shares of Stock or to direct the voting of the
subject shares of Stock ) until the shares of Stock covered thereby are fully
paid and issued to him. Except as provided in Section 13 hereof, no adjustment
shall be made for dividends, distributions or other rights for which the record
date is prior to the date of such issuance.

     8.8. Delivery of Stock Certificates.

     Promptly after the exercise of an Option by a Grantee and the payment in
full of the Option Price, such Grantee shall be entitled to the issuance of a
stock certificate or certificates evidencing his or her ownership of the shares
of Stock subject to the Option. Notwithstanding the foregoing, the Company may
satisfy any obligation under the Plan to deliver stock certificates through the
use of the book-entry method.

9. TRANSFERABILITY OF OPTIONS

     9.1. Transferability of Options

     Except
as provided in Section 9.2, during the lifetime of a Grantee, only
the Grantee (or, in the event of legal incapacity or incompetency, the
Grantee’s guardian or legal representative) may exercise an Option. Except as
provided in Section 9.2, no Option shall be assignable or transferable by the
Grantee to whom it is granted, other than by will or the laws of descent and
distribution.

- 8 -

 

     9.2. Family Transfers.

     If authorized in the applicable Award Agreement, a Grantee may transfer,
not for value, all or part of an Option to any Family Member provided that the
Optionee provides prior written notice to the Company, in a form satisfactory
to the Company, of such transfer. For the purpose of this
Section 9.2, a “not
for value” transfer is a transfer which is (i) a gift, (ii) a transfer under a
domestic relations order in settlement of marital property rights; or (iii) a
transfer to an entity in which more than fifty percent of the voting interests
are owned by Family Members (or the Grantee) in exchange for an interest in
that entity. Following a transfer under this Section 9.2, any such Option
shall continue to be subject to the same terms and conditions as were
applicable immediately prior to transfer. Subsequent transfers of transferred
Options are prohibited except to Family Members of the original Grantee in
accordance with this Section 9.2 or by will or the laws of descent and
distribution. The events of termination of Service of Section 8.4 hereof shall
continue to be applied with respect to the original Grantee, following which
the Option shall be exercisable by the transferee only to the extent, and for
the periods specified, in Section 8.4.

10. FORM OF PAYMENT FOR OPTIONS

     10.1. General Rule.

     Payment of the Option Price for the shares purchased pursuant to the
exercise of an Option shall be made in cash or in cash equivalents acceptable
to the Company.

     10.2. Surrender of Stock.

     To the extent the Award Agreement so provides, payment of the Option Price
for shares purchased pursuant to the exercise of an Option may be made all or
in part through the tender to the Company of shares of Stock, which shares, if
acquired from the Company, shall have been held for at least six months at the
time of tender and which shall be valued, for purposes of determining the
extent to which the Option Price has been paid thereby, at their Fair Market
Value on the date of exercise.

     10.3. Cashless Exercise.

     With respect to an Option and to the extent the Award Agreement so
provides, payment of the Option Price for shares purchased pursuant to the
exercise of an Option may be made all or in part by delivery (on a form
acceptable to the Board) of an irrevocable direction to a licensed securities
broker acceptable to the Company to sell shares of Stock and to deliver all or
part of the sales proceeds to the Company in payment of the Option Price and
any withholding taxes described in Section 14.3.

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     10.4. Other Forms of Payment.

     To the extent the Award Agreement so provides, payment of the Option Price
for shares purchased pursuant to exercise of an Option may be made in any other
form that is consistent with applicable laws, regulations and rules.

11. PARACHUTE LIMITATIONS

     Notwithstanding any other provision of this Plan or of any other
agreement, contract, or understanding heretofore or hereafter entered into by a
Grantee with the Company or any Affiliate, except an agreement, contract, or
understanding hereafter entered into that expressly modifies or excludes
application of this paragraph (an “Other Agreement”), and notwithstanding any
formal or informal plan or other arrangement for the direct or indirect
provision of compensation to the Grantee (including groups or classes of
Grantees or beneficiaries of which the Grantee is a member), whether or not
such compensation is deferred, is in cash, or is in the form of a benefit to or
for the Grantee (a “Benefit Arrangement”), if the Grantee is a “disqualified
individual,” as defined in Section 280G(c) of the Code, any Option held by that
Grantee under this Plan shall not become exercisable or vested (i) to the
extent that such right to exercise, vesting, payment, or benefit, taking into
account all other rights, payments, or benefits to or for the Grantee under
this Plan, all Other Agreements, and all Benefit Arrangements, would cause any
payment or benefit to the Grantee under this Plan to be considered a “parachute
payment” within the meaning of Section 280G(b)(2) of the Code as then in effect
(a “Parachute Payment”) and (ii) if, as a result of receiving a Parachute
Payment, the aggregate after-tax amounts received by the Grantee from the
Company under this Plan, all Other Agreements, and all Benefit Arrangements
would be less than the maximum after-tax amount that could be received by the
Grantee without causing any such payment or benefit to be considered a
Parachute Payment. In the event that the receipt of any such right to
exercise, vesting, payment, or benefit under this Plan, in conjunction with all
other rights, payments, or benefits to or for the Grantee under any Other
Agreement or any Benefit Arrangement would cause the Grantee to be considered
to have received a Parachute Payment under this Plan that would have the effect
of decreasing the after-tax amount received by the Grantee as described in
clause (ii) of the preceding sentence, then the Grantee shall have the right,
in the Grantee’s sole discretion, to designate those rights, payments, or
benefits under this Plan, any Other Agreements, and any Benefit Arrangements
that should be reduced or eliminated so as to avoid having the payment or
benefit to the Grantee under this Plan be deemed to be a Parachute Payment.

12. REQUIREMENTS OF LAW

     12.1. General.

     The Company shall not be required to sell or issue any shares of Stock
under any Award if the sale or issuance of such shares would constitute a
violation by the Grantee, any other individual exercising an Option, or the
Company of any provision of any law or regulation of any governmental
authority, including without limitation any federal or state

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securities laws or regulations. If at any time the Company shall determine, in
its discretion, that the listing, registration or qualification of any shares
subject to an Award upon any securities exchange or under any governmental
regulatory body is necessary or desirable as a condition of, or in connection
with, the issuance or purchase of shares hereunder, no shares of Stock may be
issued or sold to the Grantee or any other individual exercising an Option
pursuant to such Award unless such listing, registration, qualification,
consent or approval shall have been effected or obtained free of any conditions
not acceptable to the Company, and any delay caused thereby shall in no way
affect the date of termination of the Award. Specifically, in connection with
the Securities Act, upon the exercise of any Option or the delivery of any
shares of Stock underlying an Award, unless a registration statement under such
Act is in effect with respect to the shares of Stock covered by such Award, the
Company shall not be required to sell or issue such shares unless the Board has
received evidence satisfactory to it that the Grantee or any other individual
exercising an Option may acquire such shares pursuant to an exemption from
registration under the Securities Act. Any determination in this connection by
the Board shall be final, binding, and conclusive. The Company may, but shall
in no event be obligated to, register any securities covered hereby pursuant to
the Securities Act. The Company shall not be obligated to take any affirmative
action in order to cause the exercise of an Option or the issuance of shares of
Stock pursuant to the Plan to comply with any law or regulation of any
governmental authority. As to any jurisdiction that expressly imposes the
requirement that an Option shall not be exercisable until the shares of Stock
covered by such Option are registered or are exempt from registration, the
exercise of such Option (under circumstances in which the laws of such
jurisdiction apply) shall be deemed conditioned upon the effectiveness of such
registration or the availability of such an exemption.

     12.2. Rule 16b-3.

     During any time when the Company has a class of equity security registered
under Section 12 of the Exchange Act, it is the intent of the Company that
Awards pursuant to the Plan and the exercise of Options granted hereunder will
qualify for the exemption provided by Rule 16b-3 under the Exchange Act. To
the extent that any provision of the Plan or action by the Board does not
comply with the requirements of Rule 16b-3, it shall be deemed inoperative to
the extent permitted by law and deemed advisable by the Board, and shall not
affect the validity of the Plan. In the event that Rule 16b-3 is revised or
replaced, the Board may exercise its discretion to modify this Plan in any
respect necessary to satisfy the requirements of, or to take advantage of any
features of, the revised exemption or its replacement.

13. EFFECT OF CHANGES IN CAPITALIZATION

     13.1. Changes in Stock.

     If the number of outstanding shares of Stock is increased or decreased or
the shares of Stock are changed into or exchanged for a different number or
kind of shares or other securities of the Company on account of any
recapitalization, reclassification, stock split, reverse split, combination of
shares, exchange of shares, stock dividend or other distribution payable in
capital stock, or other increase or decrease in such shares effected without
receipt of consideration by the Company occurring after the Effective Date, the
number and kinds of shares for which grants of Options may be made under the
Plan shall be adjusted

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proportionately and accordingly by the Company. In addition, the number and
kind of shares for which Awards are outstanding shall be adjusted
proportionately and accordingly so that the proportionate interest of the
Grantee immediately following such event shall, to the extent practicable, be
the same as immediately before such event. Any such adjustment in outstanding
Options shall not change the aggregate Option Price payable with respect to
shares that are subject to the unexercised portion of an outstanding Option,
but shall include a corresponding proportionate adjustment in the Option Price
per share. The conversion of any convertible securities of the Company shall
not be treated as an increase in shares effected without receipt of
consideration. Notwithstanding the foregoing, in the event of any
distribution to the Company’s stockholders of securities of any other entity or
other assets (other than dividends payable in cash or stock of the Company)
without receipt of consideration by the Company, the Company may, in such
manner as the Company deems appropriate, adjust (i) the number and kind of
shares subject to outstanding Awards and/or (ii) the exercise price of
outstanding Options to reflect such distribution.

     13.2. Reorganization in Which the Company Is the Surviving Entity
Which does not Constitute a Corporate Transaction.

     Subject to Section 13.3 hereof, if the Company shall be the surviving
entity in any reorganization, merger, or consolidation of the Company with one
or more other entities which does not constitute a Corporate Transaction, any
Option theretofore granted pursuant to the Plan shall pertain to and apply to
the securities to which a holder of the number of shares of Stock subject to
such Option would have been entitled immediately following such reorganization,
merger, or consolidation, with a corresponding proportionate adjustment of the

Option Price per share so that the aggregate Option Price thereafter shall be
the same as the aggregate Option Price of the shares remaining subject to the
Option immediately prior to such reorganization, merger, or consolidation.
Subject to any contrary language in an Award Agreement evidencing an Award, any
restrictions applicable to such Award shall apply as well to any replacement
shares received by the Grantee as a result of the reorganization, merger or
consolidation.

     13.3. Corporate Transaction.

          Subject to the exceptions set forth in the last sentence of this Section
13.3 and the last sentence of Section 13.4, upon a Corporate Transaction either
of the following two actions shall be taken:

               (A) fifteen days prior to the scheduled consummation of a Corporate
Transaction, all Options outstanding hereunder shall become immediately
exercisable and shall remain exercisable for a period of fifteen days, or

               (B) the Board may elect, in its sole discretion, to cancel any outstanding
Awards of Options and pay or deliver, or cause to be paid or delivered, to the
holder thereof an amount in cash or securities having a value (as determined by
the Board acting in good faith) equal to the product of the number of shares of
Stock subject to the Option (the “Award Shares”) multiplied by the amount, if
any, by which (I) the formula or fixed price per share paid to holders of
shares of Stock pursuant to such transaction exceeds (II) the Option Price
applicable to such Award Shares.

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               With respect to the Company’s establishment of an exercise window, (i) any
exercise of an Option during such fifteen-day period shall be conditioned upon
the consummation of the event and shall be effective only immediately before
the consummation of the event, and (ii) upon consummation of any Corporate
Transaction the Plan, and all outstanding but unexercised Options shall
terminate. The Board shall send written notice of an event that will result in
such a termination to all individuals who hold Options not later than the time
at which the Company gives notice thereof to its stockholders. This Section
13.3 shall not apply to any Corporate Transaction to the extent that provision
is made in writing in connection with such Corporate Transaction for the
assumption or continuation of the Options theretofore granted, or for the
substitution for such Options for new common stock options relating to the
stock of a successor entity, or a parent or subsidiary thereof, with
appropriate adjustments as to the number of shares (disregarding any
consideration that is not common stock) and option exercise prices, in which
event the Plan, Options theretofore granted shall continue in the manner and
under the terms so provided.

     13.4. Adjustments.

     Adjustments under this Section 13 related to shares of Stock or securities
of the Company shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. No fractional shares or other
securities shall be issued pursuant to any such adjustment, and any fractions
resulting from any such adjustment shall be eliminated in each case by rounding
downward to the nearest whole share. The Board may provide in the Award
Agreements at the time of grant, or any time thereafter with the consent of the
Grantee, for different provisions to apply to an Award in place of those
described in Sections 13.1, 13.2 and 13.3.

     13.5. No Limitations on Company.

     The making of Awards pursuant to the Plan shall not affect or limit in any
way the right or power of the Company to make adjustments, reclassifications,
reorganizations, or changes of its capital or business structure or to merge,
consolidate, dissolve, or liquidate, or to sell or transfer all or any part of
its business or assets.

14. GENERAL PROVISIONS

     14.1. Disclaimer of Rights

     No provision in the Plan or in any Award or Award Agreement shall be
construed to confer upon any individual the right to remain in the employ or
service of the Company or any Affiliate, or to interfere in any way with any
contractual or other right or authority of the Company either to increase or
decrease the compensation or other payments to any individual at any time, or
to terminate any employment or other relationship between any individual and
the Company. In addition, notwithstanding anything contained in the Plan to
the contrary, unless otherwise stated in the applicable Award Agreement, no
Award granted under the Plan shall be affected by any change of duties or
position of the Grantee, so long as such Grantee continues to be a director,
officer, consultant or employee of the Company or an

- 13 -

 

Affiliate. The obligation of the Company to pay any benefits pursuant to this
Plan shall be interpreted as a contractual obligation to pay only those amounts
described herein, in the manner and under the conditions prescribed herein.
The Plan shall in no way be interpreted to require the Company to transfer any
amounts to a third party trustee or otherwise hold any amounts in trust or
escrow for payment to any Grantee or beneficiary under the terms of the Plan.

     14.2. Nonexclusivity of the Plan

     The adoption of the Plan shall not be construed as creating any
limitations upon the right and authority of the Board to adopt such other
incentive compensation arrangements (which arrangements may be applicable
either generally to a class or classes of individuals or specifically to a
particular individual or particular individuals) as the Board in its discretion
determines desirable, including, without limitation, the granting of stock
options otherwise than under the Plan.

     14.3. Withholding Taxes

     The Company or an Affiliate, as the case may be, shall have the right to
deduct from payments of any kind otherwise due to a Grantee any Federal, state,
or local taxes of any kind required by law to be withheld with respect to the
vesting of or other lapse of restrictions applicable to an Award or upon the
issuance of any shares of Stock upon the exercise of an Option. At the time of
such vesting, lapse, or exercise, the Grantee shall pay to the Company or the
Affiliate, as the case may be, any amount that the Company or the Affiliate may
reasonably determine to be necessary to satisfy such withholding obligation.
Subject to the prior approval of the Company or the Affiliate, which may be
withheld by the Company or the Affiliate, as the case may be, in its sole
discretion, the Grantee may elect to satisfy such obligations, in whole or in
part, (i) by causing the Company or the Affiliate to withhold shares of Stock
otherwise issuable to the Grantee or (ii) by delivering to the Company or the
Affiliate shares of Stock already owned by the Grantee. The shares of Stock so
delivered or withheld shall have an aggregate Fair Market Value equal to such
withholding obligations. The Fair Market Value of the shares of Stock used to
satisfy such withholding obligation shall be determined by the Company or the
Affiliate as of the date that the amount of tax to be withheld is to be
determined. A Grantee who has made an election pursuant to this Section 14.3
may satisfy his or her withholding obligation only with shares of Stock that
are not subject to any repurchase, forfeiture, unfulfilled vesting, or other
similar requirements.

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     14.4. Captions

     The use of captions in this Plan or any Award Agreement is for the
convenience of reference only and shall not affect the meaning of any provision
of the Plan or such Award Agreement.

     14.5. Other Provisions

     Each Award granted under the Plan may contain such other terms and
conditions not inconsistent with the Plan as may be determined by the Board, in
its sole discretion.

     14.6. Number And Gender

     With respect to words used in this Plan, the singular form shall include
the plural form, the masculine gender shall include the feminine gender, etc.,
as the context requires.

     14.7. Severability

     If any provision of the Plan or any Award Agreement shall be determined to
be illegal or unenforceable by any court of law in any jurisdiction, the
remaining provisions hereof and thereof shall be severable and enforceable in
accordance with their terms, and all provisions shall remain enforceable in any
other jurisdiction.

     14.8. Governing Law

     The validity and construction of this Plan and the instruments evidencing
the Award hereunder shall be governed by the laws of the State of Maryland,
other than any conflicts or choice of law rule or principle that might
otherwise refer construction or interpretation of this Plan and the instruments
evidencing the Awards granted hereunder to the substantive laws of any other
jurisdiction.

*  *  *

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     To record adoption of the Plan by the Board as of September 4, 2003, the
Company has caused its authorized officer to execute the Plan.

	 	 	 	 
	 	 	
MARTEK BIOSCIENCES CORPORATION
	 	 	 	 
	 	 	
By:	HENRY LINSERT, JR.
	 	 		

	 	 	
Title:	  Chairman and CEO
	 	 		

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