Document:

exv10w1

 

Exhibit 10.1

EMERGENT BIOSOLUTIONS INC.

EMPLOYEE STOCK OPTION PLAN

(as amended and restated effective January 26, 2005)

     BioPort Corporation, a Michigan corporation, previously adopted the BioPort Corporation
Employee Stock Option Plan, as amended from time to time. Effective June 30, 2004, the Company has
assumed the BioPort Corporation Employee Stock Option Plan, as amended and restated herein, and
assumed all Options previously granted under that plan that have not been exercised on or before
June 30, 2004. Options assumed by the Company are converted to Options to acquire Emergent Common
Stock, and the Optionees are entitled to receive, upon Option exercise, one share of Common Stock
for every share of BioPort class B common stock they would have otherwise been entitled to receive
upon exercise of the Option before assumption.

     When the Options were initially granted, they were intended to qualify as Incentive Stock
Options. Certain Options would have expired on June 30, 2004, but are being extended in connection
with this assumption. Those Options being extended will be considered Nonqualified Stock Options
after June 30, 2004. Other Options are being assumed but not extended. Options which are being
assumed but not extended will continue to be considered Incentive Stock Options. The assumption by
the Company of this Plan and the options previously granted under the BioPort Corporation Employee
Stock Option Plan are not intended to confer any additional benefits to Optionees holding those
Options. The Company intends that the Options being assumed and not extended will continue to
qualify as Incentive Stock Options after their assumption by the Company and the Company will
interpret this Plan in a manner consistent with that intention.

1. Purpose

     This Emergent BioSolutions Inc. Employee Stock Option Plan, sponsored by EMERGENT BIOSOLUTIONS
INC., a Delaware corporation, is intended to provide incentive to persons who are Employees, and to
promote the success of the Company’s business, by providing those Employees with opportunities to
purchase shares of the Company’s Class B nonvoting common stock under (a) Incentive Stock Options,
and (b) Nonqualified Stock Options.

2. Definitions

     As used in this Plan, the following words and phrases shall have the meanings indicated:

     (a) “Board” shall mean the Company’s board of directors.

     (b) “Code” shall mean the Internal Revenue Code of 1986, as amended.

     (c) “Committee” shall mean the Company’s Compensation Committee, or, in the absence of a
Compensation Committee, the Board.

 

 

     (d) “Common Stock” shall mean the Class B nonvoting common stock of the Company.

     (e) “Company” shall mean Emergent BioSolutions Inc., a Delaware corporation, its successors
and assigns.

     (f) “Employee” means an individual in the regular employment of the Employer and classified by
the Employer as a common law employee and who is on the payroll of the Employer, excluding an
independent contractor and any individual not reported through the payroll system of the Employer
as a common law employee, even if that individual is subsequently recharacterized as a common law
employee by a court of competent jurisdiction, appropriate administrative agency, the Employer, or
any other person or entity.

     (g) “Employer” shall mean the Company and any “parent corporation” or “subsidiary corporation”
of the Company as defined in Sections 424(e) and 424(f) of the Code, respectively.

     (h) “Fair Market Value” per share as of a particular date shall mean (i) the closing sales
price per share of Common Stock on the principal national securities exchange, if any, on which the
shares of Common Stock shall then be listed for the last preceding date on which there was a sale
of such Common Stock on such exchange, or (ii) if the shares of Common Stock are not then listed on
a national securities exchange, the last sales price per share of Common Stock entered on a
national inter-dealer quotation system for the last preceding date on which there was a sale of
such Common Stock on such national inter-dealer quotation system, or (iii) if no closing or last
sales price per share of Common Stock is entered on a national inter-dealer quotation system, the
average of the closing bid and asked prices for the shares of Common Stock in the over-the-counter
market for the last preceding date on which there was a quotation for such Common Stock in such
market, or (iv) if no price can be determined under the preceding alternatives, then the price per
share as most recently determined by the Board based on all the relevant facts and circumstances,
including, but not limited to, any discount for any minority interest, lack of marketability, and
illiquidity of the shares. The Board shall make such determinations of value in accordance with
(iv) at least once annually; provided that, if such determination is not made by the Board in any
given year, then the most recent determination of value shall continue in effect. Notwithstanding
any provision of the Plan to the contrary, no determination made with respect to the Fair Market
Value of Common Stock subject to an Option shall be inconsistent with Section 422 of the Code and
the regulations thereunder.

     (i) “Grant Date” means the date on which the Committee adopts a resolution expressly granting
an Option.

     (j) “Incentive Stock Option” means any Option to purchase Common Stock which is intended to
qualify as an incentive stock option within the meaning of Section 422 of the Code.

     (k) “Nonqualified Stock Option” means any Option to purchase Common Stock which is not
intended to qualify as an Incentive Stock Option.

     (l) “Option” shall mean any option granted under this Plan, and any option originally granted
by BioPort Corporation, and assumed by the Company.

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     (m) “Option Agreement” means the written agreement evidencing the grant of an Option in such
form as the Committee may from time to time prescribe.

     (n) “Option Exercise Price” shall have the meaning assigned to such term in Section 7(b).

     (o) “Optionee” shall mean any person to whom an Option is granted under this Plan.

     (p) “Plan” shall mean this Emergent BioSolutions Inc. Employee Stock Option Plan, as set forth
in this plan document and as may be amended from time to time.

     (q) “Plan Action” shall have the meaning assigned to such term in Section 9(a).

     (r) “Ten Percent Shareholder” shall mean an Optionee who, at the time an Option is granted,
owns directly or indirectly (within the meaning of Section 424(d) of the Code), stock possessing
more than ten percent of the total combined voting power of all classes of stock of the Employer.

     (s) “Termination of Employment” shall mean termination of employment with the Employer as
determined by the Committee. The Committee may in its discretion determine whether any leave of
absence constitutes a Termination of Employment for purposes of this Plan and the impact, if any,
of any such leave of absence on Options made under this Plan.

3. General Administration

     (a) This Plan shall be administered by the Committee.

     (b) The Board may at any time and from time to time provide the Committee with instructions
regarding the specific terms and conditions attributable to the Options to be granted to identified
Optionees. In addition, the Board may provide general recommendations or guidelines to the
Committee regarding the terms and conditions of Options to be granted with respect to particular
unfilled job slots or Options to be granted among general categories of Employees. The Committee
shall comply with any such instructions and shall consider in good faith any such recommendations
or guidelines in developing its own decisions as to the issuance of Options in situations where the
Board has not delivered specific instructions. Subject to the above-referenced authority of the
Board, the Committee shall have the authority (i) to exercise all of the powers granted to it under
this Plan, (ii) to construe, interpret and implement this Plan and any Option Agreements executed
pursuant to Section 7 below, (iii) to prescribe, amend and rescind rules and regulations relating
to this Plan, including rules governing the Committee’s own operations, (iv) to make all
determinations necessary or advisable in administering this Plan, (v) to correct any defect, supply
any omission and reconcile any inconsistency in this Plan; (vi) to select the Employees to be
granted Options under the Plan; (vii) to fix the number of shares granted under each Option; (viii)
to determine the exercise price of Options granted; and (ix) to set the terms and conditions of
each Option.

     (c) Actions of the Committee shall be taken by the affirmative vote of a majority of the
Committee members. Any action may be taken by an instrument signed by a majority of the Committee
members, including counterpart signatures, and action so taken shall be fully as

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effective as if
such action had been taken by a vote at a Committee meeting.

     (d) The determination of the Committee on all matters relating to this Plan or any Option
Agreement shall be final, binding and conclusive on all persons.

     (e) No Committee member shall be liable for any action or determination made in good faith
with respect to this Plan, including any Option.

     (f) Notwithstanding any provision of the Plan to the contrary, after December 31, 2004, the
Board and the Committee may only grant those Options that either comply with the applicable
requirements of Section 409A of the Code, or do not result in the deferral of compensation within
the meaning of Section 409A of the Code.

4. Granting of Options and Term of Plan

     Options may be granted from time to time within a period of five (5) years from the date of
the Company’s assumption of this Plan, which is June 30, 2004, unless the Plan is terminated
sooner.

5. Eligibility

     Subject to the authority of the Board described in Section 3(b), the Committee may grant
Options in such amounts and to such Employees as the Committee determines in its sole discretion.

6. Common Stock

     (a) The stock subject to the Options shall be Common Stock.

     (b) Subject to adjustment as described in Sections 6(c) and 6(f), the total number of shares
of Common Stock which may be issued under options shall not exceed 1,250,000. Common Stock issued
pursuant to this Plan may be authorized but unissued Common Stock or authorized and issued Common
Stock held in the Company treasury or acquired by the Company for the purposes of this Plan. The
Committee may direct that any certificate evidencing Common Stock pursuant to this Plan shall bear
a legend setting forth such restrictions on transferability as may apply to such shares.

     (c) If there is any change in the number of outstanding shares of Common Stock by reason of a
stock dividend or distribution, stock split, reverse stock split, recapitalization,
reclassification of shares, combination or exchange of shares, or by reason of any merger,
consolidation, spinoff or other corporate reorganization in which the Company is the surviving
corporation, the number of shares of Common Stock available for issuance both in the aggregate and
with respect to each outstanding Option, and the purchase price per share under each outstanding
Option, shall
be equitably adjusted by the Committee, whose determination shall be final, binding
and conclusive. In the event of any merger, consolidation or combination of the
Company with or into another corporation (other than a merger, consolidation or combination in
which the Company is the surviving corporation and which does not result in any reclassification or
other change in the number of outstanding shares of Common Stock), each Optionee shall

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have the
right thereafter and during the term of each such Option to receive upon exercise (subject to the
provisions of the Option Agreement) of such Option, for each share of Common Stock as to which the
Option shall be exercised, the kind and amount of shares of the surviving or new corporation, cash,
securities, evidence of indebtedness, other property or any combination thereof which would have
been received upon such merger, consolidation or combination by the holder of one share of Common
Stock immediately prior to such merger, consolidation or combination.

     (d) Subject to adjustment from time to time to the extent consistent with this Section 6(d)
and Section 424 of the Code, the maximum number of shares that may be issued under Incentive Stock
Options is 1,250,000. Options granted under this Plan may be substituted or assumed in connection
with mergers, reorganizations, separations, or other transactions to which Section 424(a) of the
Code applies, provided such substitutions and assumptions are permitted by Section 424 of the Code
and the regulations promulgated thereunder. The preceding sentence applies to Incentive Stock
Options and Nonqualified Stock Options.

     (e) Company’s Purchase Option.

     (1) Upon the occurrence of a Change In Control, the Company shall have the option to
purchase and redeem from any Optionee, or executor or administrator or other duly appointed
representative of such Optionee, all the Options owned by said Optionee or held for the
benefit of said Optionee, for a purchase price equal to the difference between the Option
Exercise Price and the Fair Market Value. In the event that the Company exercises its right
to repurchase Optionee’s Options, any unvested Options shall be deemed fully vested on the
day preceding the date the Company exercises its repurchase option.

     (2) For purposes of this Section 6(e), a “Change In Control” shall be deemed to have
occurred when any “person,” including a “group,” as such terms are defined in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended, and the rules promulgated
thereunder (collectively, the “Exchange Act”), becomes the “beneficial owner” (as defined in
Rule 13(d)-3 under the Exchange Act), directly or indirectly, whether by purchase or
acquisition or agreement to act in concert or otherwise, of more than 50% of the outstanding
voting common stock of the Company.

     (3) The aforesaid option contained in this Section 6(e) shall be exercised by the
Compensation Committee by written notice to such Optionee, executor or administrator or
other duly appointed representative of Optionee, at any time during the six month period
following the date of the Change in Control or such longer period of time as is reasonable.

     (f) If any outstanding Option for any reason expires or is terminated without having been
exercised in full, the Common Stock allocable to the unexercised portion of such Option shall
(unless this Plan shall have been terminated) become available for subsequent grants of Options to other Employees. Shares of Common Stock purchased from Optionees in accordance
with Section 6(e) or the shareholders agreement in Section 7(h) shall also become available for
subsequent grants of Options to other Employees, but shall not increase the maximum number of

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shares that may be issued under Incentive Stock Options.

7. Terms and Conditions of Options

     Each Option granted shall be evidenced by an Option Agreement in such form as the Committee
may from time to time prescribe. By accepting an Option, the Optionee agrees that the Option shall
be subject to the provisions of the terms of this Plan and the applicable Option Agreement.
Options shall comply with and be subject to the following terms and conditions:

     (a) Type of Options. The Committee may grant Incentive Stock Options, Nonqualified Stock
Options, or any combination of the two. Subject to Section 7(c), at the time of the grant of each
Option, the Committee shall designate the Option in the Option Agreement as either an Incentive
Stock Option or a Nonqualified Stock Option. An Option designated an Incentive Stock Option may,
prior to its exercise, be changed to a Nonqualified Stock Option if the Optionee consents to the
change; however, any change to extend the exercise period of an Incentive Stock Option pursuant to
Section 7(e)(3) does not require the consent of the Optionee.

     (b) Option Exercise Price. Each Option shall state the option exercise price (“Option
Exercise Price”), which for Options that are Incentive Stock Options shall be not less the 100% of
the Fair Market Value of the shares of Common Stock on the Grant Date of the Option; provided,
however, that in the case of an Incentive Stock Option granted to a Ten Percent Shareholder, the
Option Exercise Price shall not be less than 110% of such Fair Market Value on the Grant Date of
the Option. The Option Exercise Price for Nonqualified Stock Options shall not be less than 50% of
the Fair Market Value of the shares of Common Stock on the Grant Date of the Option, unless
otherwise approved by the Board.

     (c) Value of Common Stock. Options may be granted to any Optionee for Common Stock. To the
extent that the aggregate Fair Market Value of the shares of Common Stock with respect to which
Options designated as Incentive Stock Options are exercisable for the first time by an Optionee
during any calendar year (under all plans of the Company) exceeds $100,000, such excess Options, to
the extent of the shares covered thereby in excess of the foregoing limitation, shall be treated as
Nonqualified Stock Options. For this purpose, Options shall be taken into account in the order in
which they were granted, and the Fair Market Value of the shares shall be determined as of the
Grant Date of the relevant Option.

     (d) Medium and Time of Payment. An Option may be exercised, as to any or all full shares of
Common Stock as to which the Option has become exercisable, by giving written notice of such
exercise to the Company or its designee accompanied by payment of the Option Exercise Price. The
notice shall identify the Option being exercised and specify the number of shares as to which such
Option is being exercised. The notice of exercise, once given, shall be irrevocable. Prior to a
Public Offering of Stock, the Option Exercise Price shall be paid in full, at the time of exercise,
in United States dollars in cash or by check. After a Public Offering of Stock, the Option
Exercise Price shall be paid in full, at the time of exercise, either: (i) in United States dollars
in cash or by check; (ii) with the Committee’s approval, surrendering Common
Stock or delivering a properly executed form of attestation of ownership of Common Stock as
the Committee may require (including withholding shares otherwise deliverable upon exercise of the
Option) which have on the date of surrender or attestation a Fair Market Value in the

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aggregate
equal to such Option Exercise Price and that have been held by the Optionee for at least six months
prior to the surrender or attestation; (iii) with the Committee’s approval, by directing the
Company to deduct from the shares issuable upon the exercise of an Option a number of whole shares
having a Fair Market Value, as determined by the Committee, equal to the Option Exercise Price (an
exercise in accordance with (iii) shall necessarily involve the surrender and cancellation of the
Option with respect to the shares deducted); or (iv) with the Committee’s approval, by any
combination of (i) – (iii) above. A “Public Offering of Stock” shall be deemed to have occurred
upon the effective date of a registration statement to sell common stock of the Company, of any
class, on a national securities exchange or over the counter market.

     (e) Vesting, Term of Option and Exercise.

     (1) Each Option Agreement shall provide the applicable vesting and exercise schedule
for the Option as determined in the discretion of the Committee. Each Option Agreement may
contain a vesting or exercise schedule based on time or performance related goals.

     (2) Options shall be exercisable over the exercise period specified by the Committee in
the Option Agreement; provided, however, that the exercise period shall be no more than five
(5) years from the Grant Date thereof. The exercise period shall be subject to earlier
termination as provided in Section 7(f) below.

     (3) Notwithstanding Section 7(e)(2) and any Option Agreement that provides to the
contrary, any Option that has an exercise period that would otherwise expire on June 30,
2004, and has not been exercised on or before June 30, 2004, shall have its exercise period
automatically extended to June 30, 2007 without any further action by the Company or the
Optionee. The extension of the exercise period of any Option pursuant to this Section
7(e)(3) shall cause the Option to be considered a Nonqualified Stock Option after June 30,
2004.

     (f) Termination of Employment; Death.

     (1) Upon an Optionee’s Termination of Employment other than by death, or long-term
disability (as defined in the Company’s long-term disability plan) or termination without
cause as determined by the Committee, any portion of an Option not theretofore exercised
shall terminate simultaneously upon the Optionee’s Termination of Employment, except to the
extent otherwise provided in Section 7(f)(3).

     (2) Upon an Optionee’s Termination of Employment by death or long-term disability or
termination without cause, exercise must occur prior to 5:00 p.m. (Eastern Time) on the 90th
day after the Termination of Employment (even if such date occurs after the date the Option
would otherwise have expired but for this provision). Any exercise of an Option following
an Optionee’s death or long-term disability shall be made
only by the Optionee’s executor or administrator or other duly appointed representative, as
the case may be, reasonably acceptable to the Committee, unless the Optionee’s will
specifically disposes of such Option, in which case such exercise shall be made only by

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the recipient of such specific disposition. If an Optionee’s legal representative or the
recipient of a specific disposition under the Optionee’s will is entitled to exercise any
Option pursuant to the preceding sentence, such representative or recipient shall be bound
by the provisions of this Plan and the applicable Option Agreement to which the Optionee’s
options are subject, and such representative or recipient must execute the then applicable
shareholders agreement as a condition to the exercise of any such Option. Any portion of an
Option not exercised in accordance with this Section 7(f)(2) shall terminate simultaneously
upon the expiration of the applicable exercise period after Termination of Employment except
to the extent otherwise provided in Section 7(f)(3).

     (3) The Committee may, in the applicable Option Agreement, waive or modify the
application of any of the foregoing provisions of this Section 7, even though such waiver or
modification may cause the Options granted under such Option Agreement to fail to qualify as
Incentive Stock Options.

     (g) Nontransferability of Options. Options shall not be transferable other than by will or by
the laws of descent and distribution, and Options may be exercised, during the lifetime of the
Optionee, only by the Optionee or the Optionee’s legal representative.

     (h) Rights as a Shareholder and Execution of Shareholders Agreement. An Optionee or a
transferee of an Option shall have no rights as a shareholder with respect to any Common Stock
covered by his Option until the date of the issuance of a stock certificate to him for such shares.
No adjustments shall be made for dividends (ordinary or extraordinary, whether in cash, securities
or other property) or distributions or other rights for which the record date is prior to the date
such stock certificate is issued, except as provided in Section 6(c) above. Prior to the transfer
to the Optionee of a certificate representing shares of Common Stock acquired pursuant to the
exercise of an Option, the Company shall require the Optionee to become a party to the then current
version of a shareholders agreement including a limitation on the transferability of shares of
Common Stock and a right on the part of the Company to repurchase shares of Common Stock from its
shareholders for Fair Market Value. A copy of such shareholders agreement shall be prepared and
distributed to Optionee prior to the first date any Option granted hereunder first becomes
exercisable. The form of shareholders agreement in effect as of the effective date of this Plan is
attached hereto as Attachment A.

     (i) Other Provisions. The Option Agreements authorized under this Plan may contain such other
provisions, including, without limitation: (i) the imposition of restrictions upon the exercise of
an Option; and (ii) compliance with applicable federal and state laws, including securities laws,
that the Committee shall deem advisable.

8. Taxes

     No shares shall be delivered under the Plan to any Optionee or other person until such
Optionee or other person has made arrangements acceptable to the Committee for the satisfaction of
any foreign, federal, state, or local income and employment tax withholding obligations,
including, without limitation, obligations incident to the receipt of shares or the
disqualifying disposition of shares received on exercise of an Incentive Stock Option. Upon
exercise of an Option, the Company or its designee shall have the right to deduct from the shares
issuable upon

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the exercise of the Option, or to accept from Optionee (with the approval by the
Company or its designee) the tender of, a number of whole shares having a Fair Market Value equal
to all or any part of the federal, state, local and foreign taxes, if any, required by law to be
withheld by the Company with respect to such Option or the shares acquired upon the exercise
thereof. Alternatively or in addition, the Company or its designee, in its sole discretion, shall
have the right to require Optionee, through payroll withholding, cash payment or otherwise,
including by means of a cashless exercise, to make adequate provision for any such tax withholding
obligations of the Company arising in connection with the Option, or the shares acquired upon the
exercise thereof.

9. Restrictions

     The following rules shall apply in the event that the Company becomes publicly-traded or the
rules are deemed by the Company to be appropriate to assure an exemption from any registration
requirements.

     (a) If the Committee shall at any time determine that any Consent (as hereinafter defined) is
necessary or desirable as a condition of, or in connection with, the granting of any Option, the
issuance or purchase of Common Stock or other rights thereunder, or the taking of any other action
thereunder (each such action being hereinafter referred to as a “Plan Action”), then such Plan
Action shall not be taken, in whole or in part, unless and until such Consent shall have been
effected or obtained to the Committee’s full satisfaction.

     (b) The term “Consent” as used herein with respect to any Plan Action means (i) any and all
listings, registrations or qualifications in respect thereof upon any inter-dealer quotation system
of a registered national securities association or any national securities exchange or under any
federal, state or local law, rule or regulation, (ii) any and all written agreements and
representations by the Optionee with respect to the disposition of Common Stock, or with respect to
any other matter, which the Committee shall deem necessary or desirable to comply with the terms of
any such listing, registration or qualification, or to obtain an exemption from the requirement
that any such listing, qualification or registration, be made, and (iii) any and all consents,
clearances and approvals in respect of a Plan Action by any governmental or other regulatory
bodies.

     (c) In furtherance of the foregoing, at the time of any exercise of an Option, the Committee
may, if it shall determine it necessary or desirable for any reason, require the Optionee as a
condition to the exercise thereof, to deliver to the Committee a written representation of the
Optionee’s present intention to purchase the Common Stock for investment and not for distribution.
If such representation is required to be delivered, an appropriate legend may be placed upon each
certificate delivered to the Optionee upon his exercise of part or all of an Option and a stop
transfer order may be placed with the transfer agent. Each such Option shall also be subject to
the requirement that, if at any time the Committee determines, in its discretion, that either (i)
the listing, registration or qualification of Common Stock subject to an Option upon any securities
exchange, inter-dealer quotation system or under any state, federal or
foreign law, or (ii) the consent or approval of any governmental regulatory body is necessary
or desirable as a condition of, or in connection with, the issue or purchase of Common Stock
thereunder, the Option may not be exercised in whole or in part unless such listing, registration,

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qualification, consent or approval shall have been effected or obtained free of any conditions not
acceptable to the Committee. The Committee shall not have the power to require or oblige the
Company to register any Common Stock subject to an Option and any requirement imposed by the
Committee relating to the registration of Common Stock shall not bind the Company to cause the
registration of such Common Stock.

10. Savings Clause

     Notwithstanding any other provision hereof, this Plan is intended to qualify as a plan
pursuant to which Incentive Stock Options may be granted under Section 422 of the Code. If this
Plan or any provision of this Plan shall be held to be invalid or to fail to meet the requirements
of Section 422 of the Code or the regulations promulgated thereunder, such invalidity or failure
shall not affect the remaining parts of this Plan, but rather it shall be construed and enforced as
if this Plan or the affected provision thereof, as the case may be, complied in all respects with
the requirements of Section 422 of the Code.

11. Nature of Payments

     (a) All Options granted shall be in consideration of services performed for the Company by the
Optionee.

     (b) All Options granted shall constitute a special incentive payment to the Optionee and shall
not be taken into account in computing the amount of salary or compensation of the Optionee for the
purpose of determining any benefits under any pension, retirement, profit-sharing, bonus, life
insurance or other benefit plan of the Company or under any agreement between the Company and the
Optionee, unless such plan or agreement specifically otherwise provides.

     (c) The Plan shall not confer upon any Optionee any right with respect to continuation of
employment with the Company, nor shall it interfere in any way with his or her right or the
Company’s right to terminate his or her employment at any time, with or without cause.

12. Non-Uniform Determinations

     The determinations of the Committee and the Board under this Plan need not be uniform and may
be made selectively among persons who receive, or are eligible to receive, Options (whether or not
such persons are similarly situated).

13. Other Payments or Options

     Nothing contained in this Plan shall be deemed in any way to limit or restrict the Company
from making any option to purchase Common Stock or payment to any person under any other plan,
arrangement or understanding, whether now existing or hereafter in effect.

14. Section Readings

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     The section headings contained herein are for the purpose of convenience only and are not
intended to define or limit the contents of said sections.

15. Amendment and Termination

     (a) The Board may from time to time suspend, discontinue, revise or amend this Plan in any
respect whatsoever, provided that: (i) the Board shall consider the impact of Section 409A of the
Code on any Plan revision or amendment; and (ii) any amendment that would increase the number of
shares which may be issued under this Plan shall be subject to the approval of the holders of a
majority of outstanding voting common stock at a meeting of shareholders at which a quorum is
present or by written consent of a majority of outstanding voting common stock. In addition, no
such amendment shall materially impair any rights or materially increase any obligations of an
Optionee under an outstanding Option without the consent of the Optionee (or, upon the Optionee’s
death or adjudication of mental incapacity, the person having the right to exercise the Option).

     (b) The Committee may cancel any outstanding Option and grant a new Option in substitution
therefore, provided that the Committee shall consider the impact of Section 409A of the Code on any
such cancellation and substitution. The Committee also may amend any outstanding Option Agreement,
including any amendment which would: (i) accelerate the time or times at which the Option becomes
unrestricted or may be exercised; (ii) waive or amend any goals, restrictions or conditions set
forth in the Option Agreement; or (iii) waive or amend the operation of Section 7(f) above with
respect to the termination of the Option upon Termination of Employment; provided the Committee
shall consider the impact of Section 409A of the Code on any such amendment. However, any such
cancellation or amendment that materially impairs the rights or materially increases the
obligations of an Optionee under an outstanding Option shall be made only with the consent of the
Optionee (or, upon the Optionee’s death, the person having the right to exercise the Option).

16. Governing Law

     The Plan and all Agreements shall be construed in accordance with and governed by the laws of
the State of Delaware without regard to its conflict of laws principles.

     As approved by the Board of Directors of Emergent BioSolutions Inc. this 26th day
of January 2005.

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Exhibit 10.2

EMERGENT BIOSOLUTIONS INC.

DIRECTOR STOCK OPTION AGREEMENT

     A Stock Option award (hereinafter, “Stock Option” or “Option”) is hereby granted by
Emergent BioSolutions Inc., a Delaware corporation (“Company”), to the Director named below
(“Optionee”), for and with respect to the Class B nonvoting common stock of the Company (“Common
Stock”), subject to the terms and conditions contained in this Agreement (“Option Agreement”).

          1. Grant of Options

     Subject to the provisions set forth herein, and in consideration of the agreements of Optionee
herein provided, the Company hereby grants to Optionee a Stock Option to purchase from the Company
the number of shares of Common Stock, at the purchase price per share (“Option Exercise Price”) and
on the schedule, all as set forth below. Such Stock Option is sometimes referred to herein as the
“Award.” At the time of exercise of the Stock Option, payment of the purchase price must be made in
cash or such other form of consideration permitted in this Option Agreement.

     The Option is not intended to qualify as an Incentive Stock Option under Section 422 of the
Internal Revenue Code of 1986, as amended (“Code”).

Name of Optionee:

Number of Shares Subject to Stock Option:

Option Exercise Price Per Share:

Date of Grant:

Expiration Date:

          2. General Administration

     The Company’s board of directors (“Board”) has the authority to construe, interpret and
implement this Option Agreement. The determination of the Board on all matters relating to this
Option Agreement shall be final, binding and conclusive on all persons. No Board member shall be
liable for any action or determination made in good faith with respect to this Option Agreement.
This Option Agreement is not intended to provide deferred compensation within the meaning of Code
section 409A and shall be interpreted in a manner to avoid the application of that section. Any
provision in this Option Agreement that would necessarily result in the application of Code section
409A shall be null and void.

          3. Vesting Schedule and Conditions to Exercisability of Options:

 

 

	 	 	 	 	 
	Vesting Schedule	 	Date First Exercisable	 	Expiration Date
	33 1/3%
	 	[                    ]	 	[                    ]
	 
	 	 	 	 
	33 1/3%
	 	[                    ]	 	[                    ]
	 
	 	 	 	 
	33 1/3%
	 	[                    ]	 	[                    ]

     Any
Option not exercised by 5:00 p.m. Eastern Standard Time on
[                      ] shall
expire at such time. The exercise of all or any portion of the Award is conditioned upon the
acceptance by Optionee of the terms hereof as evidenced by his execution of this Option Agreement
in the space provided therefore at the end hereof and the return of an executed copy to the
Secretary of the Company.

     The Option may be exercised, as to any or all full shares of Common Stock as to which the
Option has become exercisable, by giving written notice of such exercise to the Company or its
designee accompanied by payment of the Option Exercise Price, (a) by delivering such notice at the
principal executive offices of the Company no later than the expiration date, or (b) by mailing
such notice, postage prepaid, addressed to the Secretary of the Company at the Company’s principal
executive offices at least three business days prior to the expiration date. The notice shall
identify the Option being exercised and specify the number of shares as to which such Option is
being exercised. The notice of exercise, once given, shall be irrevocable.

     Prior to a Public Offering of Stock, the Option Exercise Price shall be paid in full, at the
time of exercise, in United States dollars in cash or by check. After a Public Offering of Stock,
the Option Exercise Price shall be paid in full, at the time of exercise, either: (i) in United
States dollars in cash or by check; (ii) with the Board’s approval, surrendering Common Stock or
delivering a properly executed form of attestation of ownership of Common Stock as the Board may
require (including withholding shares otherwise deliverable upon exercise of the Option) which
have on the date of surrender or attestation a Fair Market Value in the aggregate equal to such
Option Exercise Price and that have been held by the Optionee for at least six months prior to the
surrender or attestation; (iii) with the Board’s approval, by directing the Company to deduct from
the shares issuable upon the exercise of an Option a number of whole shares having a Fair Market
Value, as determined by the Board, equal to the Option Exercise Price (an exercise in accordance
with (iii) shall necessarily involve the surrender and cancellation of the Option with respect to
the shares deducted); or (iv) with the Board’s approval, by any combination of (i) (iii) above. A
“Public Offering of Stock” shall be deemed to have occurred upon the effective date of a
registration statement to sell common stock of the Company, of any class, on a national securities
exchange or over the counter market.

     For purposes of this Option Agreement, “Fair Market Value” per share as of a particular date shall
mean (i) the closing sales price per share of Common Stock on the principal national securities
exchange, if any, on which the shares of Common Stock shall then be listed for the last preceding
date on which there was a sale of such Common Stock on such exchange, or (ii) if the shares of
Common Stock are not then listed on a national securities exchange, the last sales price

2

 

per share of Common Stock entered on a national inter-dealer quotation system for the last
preceding date on which there was a sale of such Common Stock on such national inter-dealer
quotation system, or (iii) if no closing or last sales price per share of Common Stock is entered
on a national inter-dealer quotation system, the average of the closing bid and asked prices for
the shares of Common Stock in the over-the-counter market for the last preceding date on which
there was a quotation for such Common Stock in such market.

          4. Cessation of Board Membership

     (a) Upon the Optionee’s cessation of Board membership, as determined by the Board, other than
by death, or long-term disability (as defined in the Company’s long-term disability plan) or
termination without cause as determined by the Board, any portion of an Option not theretofore
exercised shall terminate simultaneously upon the Optionee’s cessation of Board membership, except
to the extent otherwise provided in Section 4(c).

     (b) Upon the Optionee’s cessation of Board membership, as determined by the Board, by death or
long-term disability or termination without cause, exercise must occur prior to 5:00 p.m. (Eastern
Time) on the 90th day after the cessation of Board membership (even if such date occurs after the
date the Option would otherwise have expired but for this provision). Any exercise of an Option
following the Optionee’s death or long-term disability shall be made only by the Optionee’s
executor or administrator or other duly appointed representative, as the case may be, reasonably
acceptable to the Board, unless the Optionee’s will specifically disposes of such Option, in which
case such exercise shall be made only by the recipient of such specific disposition. If the
Optionee’s legal representative or the recipient of a specific disposition under the Optionee’s
will is entitled to exercise any Option pursuant to the preceding sentence, such representative or
recipient shall be bound by the provisions of this Option Agreement to which the Optionee’s Options
are subject, and such representative or recipient must execute the then applicable stockholders’
agreement as a condition to the exercise of any such Option. Any portion of an Option not exercised
in accordance with this Section 4(b) shall terminate simultaneously upon the expiration of the
applicable exercise period after cessation of Board membership, except to the extent otherwise
provided in Section 4(c).

     (c) The Board may waive or modify the application of any of the foregoing provisions of this
Section 4.

          5. Adjustment to Shares Subject to the Option and Company’s Purchase
Option

     (a) If there is any change in the number of outstanding shares of Common Stock by reason of a
stock dividend or distribution, stock split, reverse stock split, recapitalization,
reclassification of shares, combination or exchange of shares, or by reason of any merger,
consolidation, spin-off or other corporate reorganization in which the Company is the surviving
corporation, the number of shares of Common Stock available for issuance both in the aggregate and
with respect to each outstanding Option, and the purchase price per share under each outstanding
Option, shall be equitably adjusted by the Board, whose determination shall be final, binding and
conclusive. In the event of any merger, consolidation or combination of the Company with or into
another corporation (other than a merger, consolidation or combination in which the Company is the
surviving corporation and which does not result in any reclassification or other change in the
number of outstanding shares of Common Stock), the Optionee shall have the right thereafter and
during the term of each such Option to receive upon exercise (subject to the

3

 

provisions of the Option Agreement) of such Option, for each share of Common Stock as to which the
Option shall be exercised, the kind and amount of shares of the surviving or new corporation, cash,
securities, evidence of indebtedness, other property or any combination thereof which would have
been received upon such merger, consolidation or combination by the holder of one share of Common
Stock immediately prior to such merger, consolidation or combination; provided that any
substitution or assumption of an Option in connection with a corporate transaction to which
Treasury Regulation Section 1.424-1 would apply if the Option was an Incentive Stock Option under
Code Section 422 shall comply with the requirements of Treasury Regulation Section 1.424.1.

     (b) Company’s Purchase Option.

          (1) Upon the occurrence of a Change In Control, the Company shall have the option to purchase
and redeem from the Optionee, or executor or administrator or other duly appointed representative
of such Optionee, all the Options owned by said Optionee or held for the benefit of said Optionee
pursuant to this Option Agreement, for a purchase price equal to the difference between the Option
Exercise Price and the Fair Market Value (as defined in Section 3). In the event that the Company
exercises its right to repurchase Optionee’s Options pursuant to this Section 5(b), any unvested
Options shall be deemed fully vested on the day preceding the date the Company exercises its
repurchase option.

          (2) For purposes of this Section 5(b), a “Change In Control” shall be deemed to have occurred
when any “person,” including a “group,” as such terms are defined in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended, and the rules promulgated thereunder
(collectively, the “Exchange Act”), becomes the “beneficial owner” (as defined in Rule 13(d)-3
under the Exchange Act), directly or indirectly, whether by purchase or acquisition or agreement to
act in concert or otherwise, of more than 50% of the outstanding voting common stock of the
Company.

          (3) The aforesaid option contained in this Section 5(b) shall be exercised by the Board by
written notice to such Optionee, executor or administrator or other duly appointed representative
of Optionee, at any time during the six month period following the date of the Change in Control or
such longer period of time as is reasonable.

          (4) The closing of any purchase pursuant to this Section 5(b) (the “Closing”) shall be held at
the place designated by the Company within 30 days after the date of delivery of the Board’s
written notice of its intent to exercise such purchase option.

          (5) The aggregate purchase price payable pursuant to this Section 5(b) shall be paid either as
a lump sum at Closing, or as follows, at the discretion of the Company. At the Closing, the Company
shall make a cash down payment of 35% of the purchase price and shall execute and deliver to the
Optionee, or executor or administrator or other duly appointed representative of such Optionee, a
negotiable promissory note, representing the balance of the purchase price. Such note shall be
payable in 4 equal semi-annual installments of principal, the first of which shall be due and
payable 6 months from the date of Closing and each of which shall be accompanied by a payment of
all interest accrued to the date thereof at the Mid Term Applicable Federal Rate, pursuant to
Section 1274 of the Code, established for the month of the Closing,

4

 

compounded monthly. Such note may be prepaid in whole or in part, together with all interest
accrued to the date of such prepayment, at any time at the option of the Company, without penalty
or premium.

          6. Status as a Stockholder

     Neither Optionee nor any other person entitled to exercise the Stock Option under the terms
hereof shall be, or have any of the rights or privileges of, a stockholder of the Company in
respect of any Common Stock issuable on exercise of the Stock Option, until the date of the
issuance of a stock certificate for such Common Stock. No adjustments shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property) or distributions or
other rights for which the record date is prior to the date such stock certificate is issued,
except as provided in Section 5(a) above. Prior to the transfer to the Optionee of a certificate
representing shares of Common Stock acquired pursuant to the exercise of an Option, the Company
shall require the Optionee to become a party to the then current version of a stockholders’
agreement including a limitation on the transferability of shares of Common Stock and a right on
the part of the Company to repurchase shares of Common Stock from its stockholders as provided
under the terms of the stockholders’ agreement. A copy of such stockholders’ agreement shall be
prepared and distributed to Optionee prior to the first date any Option granted hereunder first
becomes exercisable. The form of stockholders’ agreement in effect as of the Date of Grant is
attached hereto as Attachment A.

          7. Delivery of Option Agreement

     If the Award shall be exercised in whole, this Option Agreement shall be surrendered to the
Company for cancellation. If the Award shall be exercised in part, or a change in the number or
designation of the Common Stock shall be made, this Option Agreement shall be delivered by
Optionee to the Company for the purpose of making appropriate notation thereon, or of otherwise
reflecting, in such manner as the Company shall determine, the partial exercise or the change in
the number or designation of the Common Stock. An Award may not be exercised for a fraction of a
share of Common Stock.

          8. Nontransferability of Options

     Options shall not be transferable other than by will or by the laws of descent and
distribution, and Options may be exercised, during the lifetime of the Optionee, only by the
Optionee or the Optionee’s legal representative.

          9. Miscellaneous

     The grant of the Award hereunder shall not be deemed to give the Optionee the right
to be retained as a director of the Company or in any other capacity or to affect the right of the
Company to discharge the Optionee in his capacity as a director or otherwise at any time, with or
without cause.

          10. Taxes

     (a) The Company makes no representations by way of this Option

5

 

Agreement, or otherwise, with respect to the actual tax consequences of the grant or exercise
of this Award or the subsequent disposition of the Common Stock acquired under this Award.

     (b) No shares shall be delivered to the Optionee or other person until such Optionee or other
person has made arrangements acceptable to the Board for the satisfaction of any foreign, federal,
state, or local income and employment tax withholding obligations, including, without limitation,
obligations incident to the receipt of shares. Upon exercise of an Option, the Company or its
designee shall have the right to deduct from the shares issuable upon the exercise of the Option,
or to accept from Optionee (with the approval by the Company or its designee) the tender of, a
number of whole shares having a Fair Market Value (as defined in Section 3) equal to all or any
part of the federal, state, local and foreign taxes, if any, required by law to be withheld by the
Company with respect to such Option or the shares acquired upon the exercise thereof.
Alternatively, or in addition, the Company or its designee, in its sole discretion, shall have the
right to require Optionee, through payroll withholding, cash payment or otherwise, including by
means of a cashless exercise, to make adequate provision for any such tax withholding obligations
of the Company arising in connection with the Option, or the shares acquired upon the exercise
thereof.

          11. Governing Law

     The Award and this Option Agreement shall be construed, administered and governed in all
respects under and by the laws of the State of Delaware without giving effect to principles of
conflict of laws.

          12. Amendment and Termination

     The Board may cancel any outstanding Option and grant a new Option in substitution therefore,
provided that the Board shall consider the impact of the Code section 409A on any such
cancellation and substitution. The Board also may amend or revise the Option Agreement, including
any amendment which would: (i) accelerate the time or times at which the Option becomes
unrestricted or may be exercised; (ii) waive or amend any goals, restrictions or conditions set
forth in the Option Agreement; or (iii) waive or amend the operation of Section 4 above with
respect to the termination of the Option upon cessation of Board membership; provided the Board
shall consider the impact of Code section 409A on any such amendment or revision. However, any
such cancellation or amendment that materially impairs the rights or materially increases the
obligations of the Optionee shall be made only with the consent of the Optionee (or, upon the
Optionee’s death, the person having the right to exercise the Option).

6

 

	 	 	 	 	 
	 	 	Emergent BioSolutions Inc., a Delaware Corporation
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:

The undersigned hereby accepts the foregoing Award and the terms and conditions hereof.

	 	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Date:

7

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