Document:

EX-4.1 AMENDED/RESTATED 2004 STOCK INCENTIVE PLAN

 

Exhibit 4.1

AMENDED AND RESTATED 2004 STOCK INCENTIVE PLAN

Section 1. Purpose of the Plan

The purpose of the Amended and Restated 2004 Stock Incentive Plan (the “Plan”) is to further
the interests of Inhibitex, Inc. (the “Company”) and its stockholders by providing long-term
performance incentives to those employees, Non-Employee Directors, contractors and consultants of
the Company and its Subsidiaries who are largely responsible for the management, growth and
protection of the business of the Company and its Subsidiaries.

Section 2. Definitions

For purposes of the Plan, the following terms shall be defined as set forth below:

           (a) “Award” means any Option, SAR, Restricted Stock, Dividend Right, Deferred Stock Unit and other
Stock-Based Awards, or other cash payments granted to a Participant under the Plan.

           (b) “Award Agreement” shall mean the written agreement, instrument or document evidencing an Award.

           (c) “Cause” shall have the meaning given such term in the Award Agreement, or if not defined in the
Participant’s Award Agreement, as defined in the employment agreement between the Participant and the Company
or any Subsidiary, but if there is no employment agreement, “Cause” shall mean: (i) an act of dishonesty
causing harm to the Company or any Subsidiary; (ii) the knowing disclosure of confidential information
relating to the Company’s or any Subsidiary’s business; (iii) impairment in the Participant’s ability to
perform the duties assigned to the Participant due to habitual drunkenness or narcotic drug addiction;
(iv) conviction of, or a plea of nolo contendere with respect to, a felony; (v) the willful refusal to
perform, or the gross neglect of, the duties assigned to the Participant; (vi) the Participant’s willful
breach of any law that, directly or indirectly, affects the Company or any Subsidiary; (vii) the
Participant’s material breach of his or her duties following a Change of Control that do not differ in any
material respect from the Participant’s duties and responsibilities during the 90-day period immediately
prior to such Change of Control (other than as a result of incapacity due to physical or mental illness),
which is demonstrably willful and deliberate on the Participant’s part, which is committed in bad faith or
without reasonable belief that such breach is in the best interests of the Company and which is not remedied
in a reasonable period after receipt of written notice from the Company or any Subsidiary specifying such
breach. If “Cause” is defined in both an employment agreement and an Award Agreement, the meaning thereof in
the Award Agreement shall control, unless the Committee otherwise determines at the time the Award is
granted.

           (d) “Change of Control” means and includes each of the following: (i) the acquisition, in one or more
transactions, of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) by any person
or entity or any group of persons or entities who constitute a group (within the meaning of Section 13(d)(3)
of the Exchange Act), other than (x) a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or a Subsidiary, or (y) a person who acquires such securities directly from the
Company in a privately-negotiated transaction, of any securities of the Company such that, as a result of
such acquisition, such person, entity or group either (A) beneficially owns (within the meaning of Rule l3d-3
under the Exchange Act), directly or indirectly, more than 35% of the Company’s outstanding voting securities
entitled to vote on a regular basis for a majority of the members of the Board of Directors of the Company or
(B) otherwise has the ability to elect, directly or indirectly, a majority of the members of the Board;
(ii) a change in the composition of the Board of Directors of the Company such that a majority of the members
of the Board of Directors of the Company are not Continuing Directors; (iii) the stockholders of the Company
approve a merger or consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being converted into voting securities
of the surviving entity) more than 50% of the total voting power represented by the voting securities of the
Company or such surviving entity outstanding immediately after such merger or consolidation; or (iv) the
stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the
sale or disposition by the Company of (in one or more transactions) all or substantially all of the Company’s
assets.

           Notwithstanding the foregoing, the preceding events shall not be deemed to be a Change of Control if, prior to any
transaction or transactions causing such change, a majority of the Continuing Directors shall have voted not to treat such
transaction or transactions as resulting in a Change of Control.

 

 

 

           (e) “Code” means the Internal Revenue Code of 1986, as amended from time to time.

           (f) “Continuing Director” means, as of any date of determination, any member of the Board of Directors of the Company
who (i) was a member of such Board on the date which is twenty-four months prior to the date of determination or (ii) was
nominated for election or elected to such Board with the affirmative vote of a majority of the Continuing Directors who were
members of such Board at the time of such nomination or election.

           (g) “Deferred Stock Unit” means an Award that shall be valued in reference to the market value of a share of Stock (plus
any distributions on such Stock that shall be deemed to be re-invested when made) and may be payable in cash or Stock at a
specified date as elected by a Participant.

           (h) “Director Cause” shall mean (i) a final conviction of a felony involving moral turpitude or (ii) willful misconduct
that is materially and demonstrably injurious economically to the Company.

           (i) “Dividend Rights” means the right to receive in cash or shares of Stock, or have credited to an account maintained
under the Plan for later payment in cash or shares of Stock, an amount equal to the dividends paid with respect to a specified
number of shares of Stock (other than a Stock dividend that results in adjustments pursuant to Section 8(a)).

           (j) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.

           (k) “Fair Market Value” means, with respect to Stock, Awards, or other property, the fair market value of such Stock,
Awards, or other property determined by such methods or procedures as shall be established from time to time by the Committee
in good faith and in accordance with applicable law. Unless otherwise determined by the Committee, the Fair Market Value of
Stock shall mean the mean of the high and low sales prices of Stock on the relevant date as reported on the stock exchange or
market on which the Stock is primarily traded, or if no sale is made on such date, then the Fair Market Value is the average,
weighted inversely by the number of days from the relevant date, of the mean of the high and low sales prices of the Stock on
the next preceding day and the next succeeding day on which such sales were made, as reported on the stock exchange or market
on which the Stock is primarily traded.

           (l) “ISO” means any Option designated as an incentive stock option within the meaning of Section 422 of the Code.

           (m) “Non-Employee Director” means a member of the Board of Directors of the Company who is not an employee of the
Company.

           (n) “Option” means a right granted to a Participant pursuant to Sections 6(b) or 6(c) to purchase Stock at a specified
price during specified time periods. An Option granted to a Participant pursuant to Section 6(b) may be either an ISO or a
nonstatutory Option (an Option not designated as an ISO), but an Option granted pursuant to Section 6(c) may not be an ISO.

           (o) “Participant” shall have the meaning specified in Section 4 hereof.

           (p) “Performance Goal” means a goal, expressed in terms such as profits or revenue targets on an absolute or per share
basis (including, but not limited to, EBIT, EBITDA, operating income, EPS), market share targets, profitability targets as
measured through return ratios, stockholder returns, qualitative milestones, or any other financial or other measurement
deemed appropriate by the Committee, as it relates to the results of operations or other measurable progress of either the
Company as a whole or the Participant’s Subsidiary, division, or department.

           (q) “Performance Cycle” means the period selected by the Committee during which the performance of the Company or any
Subsidiary, or any department thereof, or any individual is measured for the purpose of determining the extent to which a
Performance Goal has been achieved.

           (r) “Prior Plans” means the Inhibitex, Inc. Amended and Restated 1998 Equity Ownership Plan and the Inhibitex, Inc. 2002
Non-Employee Directors Stock Option Plan.

           (s) “Restricted Stock” means Stock awarded to a Participant pursuant to Section 6(e) that may be subject to certain
restrictions and to a risk of forfeiture.

           (t) “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3 as in effect from time to time.

           (u) “SAR” or “Stock Appreciation Right” means the right granted to a Participant pursuant to Section 6(f) to be paid an

 

 

amount measured by the appreciation in the Fair Market Value of Stock from the date of grant to the date of exercise of the
right, with payment to be made in cash, Stock or as specified in the Award, as determined by the Committee.

           (v) “Stock” means the common stock, $0.001 par value, of the Company.

           (w) “Stock-Based Award” means a right that may be denominated or payable in, or valued in whole or in part by reference
to, the market value of Stock, including but not limited to any Option, SAR, Restricted Stock or Stock granted as a bonus or
Awards in lieu of cash obligations.

           (x) “Subsidiary” shall mean any corporation, partnership, joint venture or other business entity of which 50% or more of
the outstanding voting power is beneficially owned, directly or indirectly, by the Company.

   Section 3. Administration of the Plan

   The Plan shall be administered by the Compensation Committee of the Board of Directors of the
Company (the “Committee”). Any action of the Committee in administering the Plan shall be final,
conclusive and binding on all persons, including the Company, its Subsidiaries, their employees,
Participants, consultants, contractors, persons claiming rights from or through Participants and
stockholders of the Company.

   Subject to the provisions of the Plan, the Committee shall have full and final authority in
its discretion (a) to select the employees, Non-Employee Directors, contractors and consultants who
will receive Awards pursuant to the Plan (“Participants”), (b) to determine the type or types of
Awards to be granted to each Participant, (c) to determine the number of shares of Stock to which
an Award will relate, the terms and conditions of any Award granted under the Plan (including, but
not limited to, restrictions as to transferability or forfeiture, exercisability or settlement of
an Award and waivers or accelerations thereof, and waivers of or modifications to performance
conditions relating to an Award, based in each case on such considerations as the Committee shall
determine) and all other matters to be determined in connection with an Award; (d) to determine
whether, to what extent, and under what circumstances an Award may be settled, or the exercise
price of an Award may be paid, in cash, Stock, other Awards or other property, or an Award may be
canceled, forfeited, or surrendered; (e) to determine whether, and to certify that, Performance
Goals to which the settlement of an Award is subject are satisfied; (f) to correct any defect or
supply any omission or reconcile any inconsistency in the Plan, and to adopt, amend and rescind
such rules and regulations as, in its opinion, may be advisable in the administration of the Plan;
and (g) to make all other determinations as it may deem necessary or advisable for the
administration of the Plan. The Committee may delegate to executive officers of the Company the
authority, subject to such terms as the Committee shall determine, to exercise such authority and
perform such functions, including, without limitation, the selection of Participants and the grant
of Awards, as the Committee may determine, to the extent permitted under Rule 16b-3, Section 162(m)
of the Code and applicable law; provided, however, that the Committee may not delegate the
authority to grant Awards, perform such functions or make any determination affecting or relating
to the executive officers of the Company.

   Section 4. Participation in the Plan

   Participants in the Plan shall be employees, Non-Employee Directors, contractors and
consultants of the Company and its Subsidiaries; provided, however, that only persons who are key
employees of the Company or any subsidiary corporation (within the meaning of Section 424(f) of the
Code) may be granted Options which are intended to qualify as ISOs. In addition, Participants in
the Plan shall include all grantees of equity awards that are assumed by the Company or any
Subsidiary in connection with the acquisition of another entity.

   Section 5. Plan Limitations; Shares Subject to the Plan

   (a) Subject to the provisions of Section 8 hereof, the aggregate number of shares of Stock
available for issuance as Awards under the Plan shall not exceed 6,860,089 shares, increased for
shares of Stock that are represented by awards outstanding under the Prior Plans that are
subsequently forfeited, canceled or expire unexercised under the Prior Plans and any shares issued
under the Plan through the settlement, assumption or substitution of outstanding awards as a
commitment of the Company or any Subsidiary in connection with the acquisition of another entity.

   (b) No Award may be granted if the number of shares to which such Award relates, when added to
the number of shares previously issued under the Plan and the number of shares which may then be
acquired pursuant to other outstanding, unexercised Awards, exceeds the number of shares available
for issuance pursuant to the Plan. If any shares subject to an Award are forfeited or such Award is
settled in cash or otherwise terminates or is settled for any reason whatsoever without an actual
distribution of shares to the Participant, any shares counted against the number of shares
available for issuance pursuant to the Plan with respect to such Award shall, to the extent of any
such forfeiture, settlement, or termination, again be available for Awards under the Plan;
provided, however, that the Committee may adopt procedures for the counting of shares relating to
any Award to ensure appropriate counting, avoid double counting, and provide for adjustments in any
case in which the number of shares actually distributed differs from the number of shares
previously

 

 

counted in connection with such Award. If a Participant tenders shares (either actually, by
attestation or otherwise) to pay all or any part of the exercise price on any Option or if any
shares payable with respect to any Award are retained by the Company in satisfaction of the
Participant’s obligation for taxes, the number of shares tendered or retained shall again be
available for Awards under the Plan. Shares issued under the Plan through the settlement,
assumption or substitution of outstanding awards to grant future awards as a commitment of the
Company or any Subsidiary in connection with the acquisition of another entity shall not reduce the
maximum number of shares available for delivery under the Plan.

   (c) Subject to the provisions of Section 8(a) hereof, the following additional maximums are
imposed under the Plan with respect to each fiscal year of the Company. Following the date that the
exemption from the application of Section 162(m) of the Code as described in Treas. Reg.
Section 162-27(f) (or any other Regulation having similar effect) ceases to apply to Awards,
(i) the maximum number of shares of Stock that may be granted as Awards to any Participant shall
not exceed, in the case of Awards of Options or SARs, 1,000,000 shares of Stock and in the case of
any other Stock-Based Awards, 1,000,000 shares of Stock, (ii) the maximum amount of cash or cash
payments that may be granted as Awards to any Participant, shall not exceed $2,000,000, and
(iii) the maximum number of Dividend Rights that may be granted as Awards to any Participant, shall
not exceed Dividend Rights with respect to more than 1,000,000 shares of Stock.

   Section 6. Awards

   (a) General. Awards may be granted on the terms and conditions set forth in this
Section 6. In addition, the Committee may impose on any Award or the exercise thereof, at the date
of grant or thereafter (subject to Section 9(a)), such additional terms and conditions, not
inconsistent with the provisions of the Plan, as the Committee shall determine, including terms
requiring forfeiture of Awards in the event of the termination of employment or other relationship
with the Company or any Subsidiary by the Participant; provided, however, that the Committee shall
retain full power to accelerate or waive any such additional term or condition as it may have
previously imposed. All Awards shall be evidenced by an Award Agreement.

   (b) Options. The Committee may grant Options to Participants on the following terms and conditions:

           (i) The exercise price of each Option shall be determined by the
Committee at the time the Option is granted, but in the case of ISOs the
exercise price of any Option shall not be less than the Fair Market Value of
the shares covered thereby at the time the Option is granted.

           (ii) The Committee shall determine the time or times at which an Option
may be exercised in whole or in part, whether the exercise price for an Option
shall be paid in cash, by the surrender at Fair Market Value of Stock, by any
combination of cash and shares of Stock, including, without limitation, cash,
Stock, other Awards, or other property (including notes or other contractual
obligations of Participants to make payment on a deferred basis), the means or
methods of payment, including by “attestation” and through “cashless exercise”
arrangements, to the extent permitted by applicable law, and the methods by
which, or the time or times at which, Stock will be delivered or deemed to be
delivered to Participants upon the exercise of such Option.

           (iii) The terms of any Option granted under the Plan as an ISO shall
comply in all respects with the provisions of Section 422 of the Code,
including, but not limited to, the requirement that no ISO shall be granted
more than ten years after the effective date of the Plan.

   (c) Director Options.

           (i) Each person who is elected for the first time to be a Non-Employee
Director by the Board of Directors of the Company or by the stockholders of the
Company shall receive, on the day after the date of his or her initial
election, an automatic grant of an Option to purchase 20,000 shares of Stock.
The date on which an Option is granted under this Section and Section 6(c)(ii)
to a specified Non-Employee Director shall constitute the date of grant of such
Option (the “Date of Grant”).

           (ii) Each Non-Employee Director shall also receive an automatic annual
grant of an Option to purchase 7,500 (18,000 in the case of the Chairman of the
Board of the Company) shares of Stock on February 1 of each year. The first
annual Option grant shall be pro-rated from the date of commencement of such
service for any director who commences serving as such on a day other than
February 1st of the prior year. The Options granted pursuant to Section 6(c)(i)
and this Section 6(c)(ii) shall be referred to herein as “Director Options.”

           (iii) The exercise price per share of all Director Options shall be the
Fair Market Value per share of Stock on the Date of Grant. Each Director
Option, to the extent vested, may be exercised in whole or in part, the
exercise price may be paid in cash or by the surrender at Fair Market Value of
Stock (either actually, by attestation or otherwise), or by any combination of
cash and shares of Stock, and shall be subject to such other terms and
provisions as the Committee shall determine.

 

 

           (iv) Director Options shall vest as provided in an Award Agreement,
provided that (a) Options granted pursuant to Section 6(c)(ii) shall vest in
full on the first anniversary of the Date of Grant and (b) in no event shall
Options granted pursuant to Section 6(c)(i) vest over a period of more than
three (3) years after the Date of Grant or at a rate slower than 33% for each
completed year after the Date of Grant.

           (v) Except as otherwise expressly set forth in an Award Agreement and
except as set forth below and as provided in Section 7(h), if a Non-Employee
Director shall voluntarily or involuntarily cease to serve as a director of the
Company or if a Non-Employee Director’s service shall terminate on account of
death or disability, the unvested Director Options of such Non-Employee
Director shall terminate immediately and the vested Director Options of such
Non-Employee Director shall terminate one year following the first day that the
Non-Employee Director is no longer such a director; provided that if such
Non-Employee Director is removed for Director Cause, the Director Options shall
terminate immediately. In no event may the Non-Employee Director, or his or her
guardian, conservator, executor or administrator, as the case may be, exercise
a Director Option of such Non-Employee Director after the end of the original
term of such option.

   (d) Deferred Stock Units. The Committee is authorized to award Deferred Stock Units to
Participants in lieu of payment of a bonus or a Stock-Based Award or cash payment granted under the
Plan if so elected by a Participant under such terms and conditions as the Committee shall
determine. Settlement of any Deferred Stock Units shall be made in cash or shares of Stock.

   (e) Restricted Stock. The Committee is authorized to grant Restricted Stock to
Participants on the following terms and conditions:

           (i) Restricted Stock awarded to a Participant shall be subject to a
“substantial risk of forfeiture” within the meaning of Section 83 of the Code,
and such restrictions on transferability and other restrictions and Performance
Goals for such periods as the Committee may establish. Additionally, the
Committee shall establish at the time of such Award, which restrictions may
lapse separately or in combination at such times, under such circumstances, or
otherwise, as the Committee may determine.

           (ii) Restricted Stock shall be forfeitable to the Company by the
Participant upon termination of employment during the applicable restricted
periods. The Committee, in its discretion, whether in an Award Agreement or
anytime after an Award is made, may accelerate the time at which restrictions
or forfeiture conditions will lapse, or may remove any Performance Goal
requirement upon the death, disability, retirement or otherwise of a
Participant, whenever the Committee determines that such action is in the best
interests of the Company.

           (iii) Restricted Stock granted under the Plan may be evidenced in such
manner as the Committee shall determine. If certificates representing
Restricted Stock are registered in the name of the Participant, such
certificates may bear an appropriate legend referring to the terms, conditions
and restrictions applicable to such Restricted Stock.

           (iv) Subject to the terms and conditions of the Award Agreement, the
Participant shall have all the rights of a stockholder with respect to shares
of Restricted Stock awarded to him or her, including, without limitation, the
right to vote such shares and the right to receive all dividends or other
distributions made with respect to such shares. If any such dividends or
distributions are paid in Stock, the Stock shall be subject to restrictions and
a risk of forfeiture to the same extent as the Restricted Stock with respect to
which the Stock has been distributed.

   (f) Stock Appreciation Rights. The Committee is authorized to grant SARs to Participants on the following terms and conditions:

           (i) A SAR shall confer on the Participant to whom it is granted a right
to receive, upon exercise thereof, the excess of (A) the Fair Market Value of
one share of Stock on the date of exercise over (B) the grant price of the SAR
as determined by the Committee as of the date of grant of the SAR.

           (ii) The Committee shall determine the time or times at which a SAR may
be exercised in whole or in part, the method of exercise, method of settlement,
form of consideration payable in settlement, method by which Stock will be
delivered or deemed to be delivered to Participants, whether or not a SAR shall
be in tandem with any other Award, and any other terms and conditions of any
SAR.

   (g) Cash Payments. The Committee is authorized, subject to limitations under
applicable law, to grant to Participants cash payments, whether awarded separately or as a
supplement to any Stock-Based Award. The Committee shall determine the terms and conditions of such
Awards.

   (h) Dividend Rights. The Committee is authorized to grant Dividend Rights to Participants
on the following terms and conditions:

           (i) Dividend Rights may be granted either separately or in tandem with
any other Award. If any Dividend Rights are granted in 

 

 

tandem with any other
Award, such Dividend Rights shall lapse, expire or be forfeited simultaneously
with the lapse, expiration, forfeiture, payment or exercise of the Award to
which the Dividend Rights are tandemed. If Dividend Rights are granted
separately, such Dividend Rights shall lapse, expire or be terminated at such
times or under such conditions as the Committee shall establish.

           (ii) The Committee may provide that the dividends attributable to
Dividend Rights may be paid currently or the amount thereof may be credited to
a Participant’s Plan account. The dividends credited to a Participant’s account
may be credited with interest, or treated as used to purchase at Fair Market
Value Stock or other property in accordance with such methods or procedures as
the Committee shall determine and shall be set forth in the Award Agreement
evidencing such Dividend Rights. Any crediting of Dividends Rights may be
subject to restrictions and conditions as the Committee may establish,
including reinvestment in additional shares of Stock or Stock equivalents. The
Committee may provide that the payment of any Dividend Rights shall be made, or
once made, may be forfeited under such conditions as the Committee, in its sole
discretion, may determine.

   (i) Other Stock-Based Awards. The Committee is authorized, subject to limitations
under applicable law, to grant to Participants such other Stock-Based Awards, in addition to those
provided in Sections 6(b), (c), (d), (e) and (f) hereof, as deemed by the Committee to be
consistent with the purposes of the Plan. The Committee shall determine the terms and conditions of
such Awards. Stock delivered pursuant to an Award in the nature of a purchase right granted under
this Section 6(i) shall be purchased for such consideration and paid for at such times, by such
methods, and in such forms, including, without limitation, cash, Stock, other Awards, or other
property, as the Committee shall determine.

   Section 7. Additional Provisions Applicable to Awards

   (a) Stand-Alone, Additional, Tandem, and Substitute Awards. Awards granted under the
Plan may, in the discretion of the Committee, be granted either alone or in addition to, in tandem
with, or in substitution for, any other Award granted under the Plan or any award granted under any
other plan of the Company or any Subsidiary, or any business entity acquired by the Company or any
Subsidiary, or any other right of a Participant to receive payment from the Company or any
Subsidiary. If an Award is granted in substitution for another Award or award, the Committee shall
require the surrender of such other Award or award in consideration for the grant of the new Award.
Awards granted in addition to, or in tandem with other Awards or awards may be granted either as of
the same time as, or a different time from, the grant of such other Awards or awards. The per share
exercise price of any Option, grant price of any SAR or the purchase price of any Award conferring
a right to purchase Stock:

           (i) granted in substitution for an outstanding Award or award, shall be
not less than the lesser of (A) the Fair Market Value of a share of Stock at
the date such substitute Award is granted or (B) such Fair Market Value at that
date, reduced to reflect the Fair Market Value at that date of the Award or
award required to be surrendered by the Participant as a condition to receipt
of the substitute Award; or

           (ii) retroactively granted in tandem with an outstanding Award or award,
shall not be less than the lesser of the Fair Market Value of a share of Stock
at the date of grant of the later Award or at the date of grant of the earlier
Award or award.

   (b) Exchange and Buy Out Provisions. The Committee may at any time offer to exchange
or buy out any previously granted Award for a payment in cash, Stock, other Awards (subject to
Section 7(a)), or other property based on such terms and conditions as the Committee shall
determine and communicate to a Participant at the time that such offer is made.

   (c) Performance Goals. The right of a Participant to exercise or receive a grant or
settlement of any Award, and the timing thereof, may be subject to such Performance Goals as may be
specified by the Committee.

   (d) Term of Awards. The term of each Award shall, except as provided herein, be for
such period as may be determined by the Committee; provided, however, that in no event shall the
term of any Option (other than a Director Option), SAR or Dividend Right exceed a period of ten
years from the date of its grant; provided that in the case of any ISO, the term of the Option
shall be such shorter period as may be applicable under Section 422 of the Code and in the case of
any Director Option, the term of the Option shall not exceed six years from the Date of Grant.

   (e) Form of Payment. Subject to the terms of the Plan and any applicable Award
Agreement, payments or transfers to be made by the Company or a Subsidiary upon the grant or
exercise of an Award may be made in such forms as the Committee shall determine, including, without
limitation, cash, Stock, other Awards, or other property, and may be made in a single payment or
transfer, or on a deferred basis. The Committee may, whether at the time of grant or at any time
thereafter prior to payment or settlement, permit (subject to any conditions as the Committee may
from time to time establish) a Participant to elect to defer receipt of all or any portion of any
payment of cash or Stock that would otherwise be due to such Participant in payment or settlement
of an Award under the Plan. (Such payments may include, without limitation, provisions for the
payment or crediting of reasonable interest in respect of deferred payments credited in cash, and
the payment or crediting of Dividend Rights in respect of deferred amounts credited in Stock
equivalents.) The

 

 

Committee, in its discretion, may accelerate any payment or transfer upon a change of control as
defined by the Committee. The Committee may also authorize payment upon the exercise of an Option
by net issuance or other cashless exercise methods.

   (f) Loan Provisions. With the consent of the Committee, and subject at all times to
laws and regulations and other binding obligations or provisions applicable to the Company,
including but not limited to the Sarbanes-Oxley Act of 2002, the Company may make, guarantee, or
arrange for a loan or loans to a Participant with respect to the exercise of any Option or other
payment in connection with any Award, including the payment by a Participant of any or all federal,
state, or local income or other taxes due in connection with any Award. Subject to such
limitations, the Committee shall have full authority to decide whether to make a loan or loans
hereunder and to determine the amount, terms, and provisions of any such loan or loans, including
the interest rate to be charged in respect of any such loan or loans, whether the loan or loans are
to be with or without recourse against the borrower, the terms on which the loan is to be repaid
and the conditions, if any, under which the loan or loans may be forgiven.

   (g) Awards to Comply with Section 162(m). The Committee may (but is not required to)
grant an Award pursuant to the Plan to a Participant that is intended to qualify as
“performance-based compensation” under Section 162(m) of the Code (a “Performance-Based Award”).
The right to receive a Performance-Based Award, other than Options and SARs granted at not less
than Fair Market Value, may vary from Participant to Participant and Performance-Based Award to
Performance-Based Award, and shall be conditional upon the achievement of Performance Goals that
have been established by the Committee in writing not later than the earlier of (i) 90 days after
the beginning of the Performance Cycle and (ii) the date by which no more than 25% of a Performance
Cycle has elapsed. Before any compensation pursuant to a Performance-Based Award (other than
Options and SARs granted at not less than Fair Market Value) is paid, the Committee shall certify
in writing that the Performance Goals applicable to the Performance-Based Award were in fact
satisfied.

   (h) Change of Control. In the event of a Change of Control of the Company, all Awards
granted under the Plan (including Performance-Based Awards) that are still outstanding and not yet
vested or exercisable or which are subject to restrictions shall vest as provided in the Award
Agreement. If an Award to any employee is assumed or replaced by an acquiring company and the
employment of the Participant with the acquiring company is terminated or terminates for any reason
other than Cause within 18 months of the date of the Change of Control, then the assumed or
replaced Awards that are outstanding on the day prior to the day the Participant’s employment
terminates or is terminated shall become vested in the Participant or free of any restrictions as
provided in the Award Agreement.

Section 8. Adjustments upon Changes in Capitalization

   (a) In the event that the Committee shall determine that any stock dividend, recapitalization,
forward split or reverse split, reorganization, merger, consolidation, spin-off, combination,
repurchase or share exchange, or other similar corporate transaction or event, affects the Stock or
the book value of the Company such that an adjustment is appropriate in order to prevent dilution
or enlargement of the rights of Participants under the Plan, then the Committee shall, in such
manner as it may deem equitable, adjust any or all of (i) the number and kind of shares of Stock
which may thereafter be issued in connection with Awards, (ii) the number and kind of shares of
Stock issuable in respect of outstanding Awards, (iii) the aggregate number and kind of shares of
Stock available under the Plan, and (iv) the exercise price, grant price, or purchase price
relating to any Award or, if deemed appropriate, make provision for a cash payment with respect to
any outstanding Award; provided, however, in each case, that no adjustment shall be made that would
cause the Plan to violate Section 422(b)(1) of the Code with respect to ISOs or that would
adversely affect the status of a Performance-Based Award as “performance-based compensation” under
Section 162(m) of the Code.

   (b) In addition, the Committee is authorized to make adjustments in the terms and conditions
of, and the criteria included in, Awards, including any Performance Goals, in recognition of
unusual or nonrecurring events (including, without limitation, events described in the preceding
paragraph) affecting the Company or any Subsidiary, or in response to changes in applicable laws,
regulations, or accounting principles. Notwithstanding the foregoing, no adjustment shall be made
in any outstanding Performance-Based Awards to the extent that such adjustment would adversely
affect the status of the Performance-Based Award as “performance-based compensation” under
Section 162(m) of the Code.

Section 9. General Provisions

   (a) Changes to the Plan and Awards. The Board of Directors of the Company may amend,
alter, suspend, discontinue, or terminate the Plan or the Committee’s authority to grant Awards
under the Plan without the consent of the Company’s stockholders or Participants, except that any
such amendment, alteration, suspension, discontinuation, or termination shall be subject to the
approval of the Company’s stockholders within one year after such Board action if such stockholder
approval is required by any federal or state law or regulation or the rules of any stock exchange
or automated quotation system on which the Stock may then be listed or quoted, and the Board may
otherwise, in its discretion, determine to submit other such changes to the Plan to the
stockholders for approval; provided, however, that without the consent of an affected Participant,
no amendment, alteration, suspension, discontinuation, or termination of the Plan may materially
and adversely affect the rights of such Participant under any Award theretofore granted and any
Award Agreement relating thereto. The Committee may waive any conditions or rights under, or amend,
alter, suspend, discontinue, or terminate, any Award theretofore granted and any Award Agreement
relating thereto; provided, however, that without the consent of an affected Participant, no such
amendment, alteration, suspension, discontinuation, or termination of any Award may materially and
adversely
affect the rights of such Participant under such Award.

 

 

   The foregoing notwithstanding, any Performance Goal or other performance condition specified
in connection with an Award shall not be deemed a fixed contractual term, but shall remain subject
to adjustment by the Committee, in its discretion at any time in view of the Committee’s assessment
of the Company’s strategy, performance of comparable companies, and other circumstances, except to
the extent that any such adjustment to a performance condition would adversely affect the status of
a Performance-Based Award as “performance-based compensation” under Section 162(m) of the Code.

   (b) No Right to Award or Employment. Except as provided in Section 6(c), no employee,
Non-Employee Director, contractor or consultant or other person shall have any claim or right to
receive an Award under the Plan. Neither the Plan nor any action taken hereunder shall be construed
as giving any employee any right to be retained in the employ of the Company or any Subsidiary or
be viewed as requiring the Company or Subsidiary to continue the services of any contractor or
consultant for any period.

   (c) Taxes. The Company or any Subsidiary is authorized to withhold from any Award
granted, any payment relating to an Award under the Plan, including from a distribution of Stock or
any payroll or other payment to a Participant amounts of withholding and other taxes due in
connection with any transaction involving an Award, and to take such other action as the Committee
may deem advisable to enable the Company and Participants to satisfy obligations for the payment of
withholding taxes and other tax obligations relating to any Award. This authority shall include
authority to withhold or receive Stock or other property and to make cash payments in respect
thereof in satisfaction of a Participant’s tax obligations. Withholding of taxes in the form of
shares of Stock from the profit attributable to the exercise of any Option shall not occur at a
rate that exceeds the minimum required statutory federal and state withholding rates.

   (d) Limits on Transferability; Beneficiaries. No Award or other right or interest of a
Participant under the Plan shall be pledged, encumbered, or hypothecated to, or in favor of, or
subject to any lien, obligation, or liability of such Participants to, any party, other than the
Company or any Subsidiary, or assigned or transferred by such Participant otherwise than by will or
the laws of descent and distribution, and such Awards and rights shall be exercisable during the
lifetime of the Participant only by the Participant or his or her guardian or legal representative.
Notwithstanding the foregoing, the Committee may, in its discretion, provide that Awards or other
rights or interests of a Participant granted pursuant to the Plan (other than an ISO) be
transferable, without consideration, to immediate family members (i.e., children, grandchildren or
spouse), to trusts for the benefit of such immediate family members and to partnerships in which
such family members are the only partners. The Committee may attach to such transferability feature
such terms and conditions as it deems advisable. In addition, a Participant may, in the manner
established by the Committee, designate a beneficiary (which may be a person or a trust) to
exercise the rights of the Participant, and to receive any distribution, with respect to any Award
upon the death of the Participant. A beneficiary, guardian, legal representative or other person
claiming any rights under the Plan from or through any Participant shall be subject to all terms
and conditions of the Plan and any Award Agreement applicable to such Participant, except as
otherwise determined by the Committee, and to any additional restrictions deemed necessary or
appropriate by the Committee.

   (e) No Rights to Awards; No Stockholder Rights. No Participant shall have any claim to
be granted any Award under the Plan, and there is no obligation for uniformity of treatment of
Participants. No Award shall confer on any Participant any of the rights of a stockholder of the
Company unless and until Stock is duly issued or transferred to the Participant in accordance with
the terms of the Award.

   (f) Securities Law Requirements.

           (i) No Award granted hereunder shall be exercisable if the Company shall
at any time determine that (a) the listing upon any securities exchange,
registration or qualification under any state or federal law of any Stock
otherwise deliverable upon such exercise, or (b) the consent or approval of any
regulatory body or the satisfaction of withholding tax or other withholding
liabilities, is necessary or appropriate in connection with such exercise. In
any of the events referred to in clause (a) or clause (b) above, the
exercisability of such Awards shall be suspended and shall not be effective
unless and until such withholding, listing, registration, qualifications or
approval shall have been effected or obtained free of any conditions not
acceptable to the Company in its sole discretion, notwithstanding any
termination of any Award or any portion of any Award during the period when
exercisability has been suspended.

 

           (ii) The Committee may require, as a condition to the right to exercise
any Award that the Company receive from the Participant, at the time any such
Award is exercised, vests or any applicable restrictions lapse,
representations, warranties and agreements to the effect that the shares are
being purchased or acquired by the Participant for investment only and without
any present intention to sell or otherwise distribute such shares and that the
Participant will not dispose of such shares in transactions which, in the
opinion of counsel to the Company, would violate the registration provisions of
the Securities Act of 1933, as then amended, and the rules and regulations
thereunder. The certificates issued to evidence such shares shall bear
appropriate legends summarizing such restrictions on the disposition thereof.

   (g) Termination. Unless the Plan shall theretofore have been terminated, the Plan
shall terminate on December 31, 2013, and no Options under the Plan shall thereafter be granted.

   (h) Prior Plan Names. This Plan was previously referred to as the 2002 Inhibitex, Inc.
Stock Incentive Plan and then the 2004 Stock Incentive Plan before its amendment and restatement.

 

 

   (i) Fractional Shares. The Company will not be required to issue any fractional common
shares pursuant to the Plan. The Committee may provide for the elimination of fractions and for the
settlement of fractions in cash.

   (j) Discretion. In exercising, or declining to exercise, any grant of authority or
discretion hereunder, the Committee may consider or ignore such factors or circumstances and may
accord such weight to such factors and circumstances as the Committee alone and in its sole
judgment deems appropriate and without regard to the effect such exercise, or declining to exercise
such grant of authority or discretion, would have upon the affected Participant, any other
Participant, any employee, the Company, any Subsidiary, any stockholder or any other person.

   (k) Adoption of the Plan and Effective Date. The Plan shall be adopted by the Board of
Directors of the Company and shall be effective as of such date.EX-10.251.1 Supplemental Indenture

 

EXHIBIT 10.251.1

SUPPLEMENTAL INDENTURE

     THIS SUPPLEMENTAL INDENTURE (this “Supplement”), dated as of August 20, 2007, is between ION
Media Networks, Inc., a corporation duly organized under the laws of the State of Delaware (the
“Company”), and The Bank of New York Trust Company, N.A., a national banking association, as
Trustee (the “Trustee”).

Preliminary Statements

     The Company and the Trustee are parties to that certain Indenture, dated as of May 4, 2007
(the “Indenture”), relating to the issuance of the Company’s 11% Series B Mandatorily Convertible
Senior Subordinated Notes due 2013. Section 2.02(g) of the Indenture provides that Securities may
only be issued in denominations of $1,000 principal amount and any integral multiple thereof. The
parties hereto wish to supplement the Indenture to provide that the Securities may be issued in any
denomination, whether or not an integral multiple of $1,000.

     Section 10.01(l) of the Indenture allows the Company and the Trustee to enter into a
supplemental indenture without the consent of the Holders to take any action that will not
adversely affect the Holders. The Company hereby represents that the changes contained herein will
not adversely affect the Holders.

     Capitalized terms used herein but not defined shall have the meanings ascribed thereto in the
Indenture.

Agreement

     In consideration of the purchase of the Securities by the Holders thereof, the parties hereto
agree, for the benefit of each other and for the equal and ratable benefit of the Holders of the
Securities, that the Indenture is hereby supplemented to provide that Securities may be issued in
any denomination, whether or not an integral multiple of $1,000. Further, Securities of any
denomination, whether or not an integral multiple of $1,000, may be converted in the manner set
forth in Article 4 of the Indenture, whether the conversion is optional or mandatory.

     The Trustee makes no representations as to the validity or sufficiency of this Supplement. The
statements herein are deemed to be those of the Company and not of the Trustee.

     This Supplement may be executed and delivered (including by facsimile transmission) in one or
more counterparts, each of which when executed shall be deemed an original but all of which taken
together shall constitute one and the same instrument.

1

 

     IN WITNESS WHEREOF, the parties have caused this Supplement to be duly executed as of the date
and year first written above.

	 	 	 	 	 
	 	ION MEDIA NETWORKS, INC.

 	 
	 	By:  	/s/ Richard Garcia
 	 
	 	 	Name:  	Richard Garcia 	 
	 	 	Title:  	Chief Financial Officer 	 
	 

	 	 	 	 	 
	 	THE BANK OF NEW YORK TRUST COMPANY, N.A., as Trustee

 	 
	 	By:  	/s/ Geraldine Creswell
 	 
	 	 	Name:  	Geraldine Creswell 	 
	 	 	Title:  	Assistant Treasurer 	 
	 

2

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