As filed with the Securities and Exchange Commission on February 18, 2004.
Registration No. ___________
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SIGA TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-3864870
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
420 Lexington Avenue
Suite 601
New York, New York 10170
(Address of Principal Executive Offices)
SIGA TECHNOLOGIES, INC. AMENDED AND RESTATED
1996 INCENTIVE AND NON-QUALIFIED STOCK OPTION PLAN, AS AMENDED
(Full Title of the Plan)
Thomas N. Konatich
Acting Chief Executive Officer
SIGA Technologies, Inc.
420 Lexington Avenue
Suite 601
New York, New York 10170
(212) 672-9100
(Name and Address of Agent for Service)
(212) 672-9100
(Telephone Number, Including Area Code,
of Agent for Service)
Copy to:
Thomas E. Constance, Esq.
Kramer Levin Naftalis & Frankel LLP
919 Third Avenue
New York, New York 10022
(212) 715-9100
(212) 715-8000 (Fax)
CALCULATION OF REGISTRATION FEE
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Amount to be Proposed Maximum Offering Proposed Maximum Aggregate Amount of
Title of Securities to be Registered Registered Price Per Share Offering Price Registration Fee
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common stock, par value $.0001 per share 7,628,939(1) (2) $17,593,588(2) $2,229.11
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2,856,689(3) $2.18(4) $6,227,583(4)
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10,000(5) $5.00(6) $50,000(6)
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102,000(5) $3.94(6) $401,880(6)
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3,680,000(5) $2.50(6) $9,200,000(6)
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82,000(5) $1.85(6) $151,700(6)
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600,000(5) $1.81(6) $1,086,000(6)
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25,000(5) $1.75(6) $43,750(6)
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120,000(5) $1.69(6) $202,800(6)
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153,250(5) $1.50(6) $229,875(6)
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(1) The Registrant previously registered 444,309 shares of its common stock
underyling options issued under the SIGA Technologies, Inc. Amended 1996
Incentive and Non-Qualified Stock Option Plan pursuant to a Registration
Statement on Form S-8 (File No. 333-35992) filed with the Securities and
Exchange Commission on May 1, 2000 and 1,707,502 shares of its common
stock underlying options issued under such plan pursuant to a Registration
Statement on Form S-8 (File No. 333-56216) filed with the Securities and
Exchange Commission on February 26, 2001. This Registration Statement is
being filed with the Securities and Exchange Commission to register
7,628,939 additional shares of common stock which may be issued upon the
exercise of stock options under the SIGA Technologies, Inc. Amended and
Restated 1996 Incentive and Non-Qualified Stock Option Plan, as amended
(the "Plan"), of which 4,772,250 shares may be issued upon the exercise of
stock options that have been issued under the Plan and 2,856,689 shares
may be issued upon the exercise of stock options that may be issued under
the Plan.
(2) The Proposed Maximum Aggregate Offering Price is based on estimates in
accordance with Rule 457(c), with respect to 2,856,689 shares that may be
issued upon the exercise of stock options that may be issued under the
Plan, and calculations pursuant to Rule 457(h)(1), with respect to
4,772,250 shares that may be issued upon the exercise of stock options
that have been issued under the Plan. See Footnote Nos. 4 and 6 below.
(3) Represents the aggregate of 2,856,689 shares that may be issued upon the
exercise of stock options that may be issued under the Plan.
(4) Estimated, in accordance with Rule 457(c), solely for the purpose of
calculating the registration fee. The Proposed Maximum Offering Price Per
Share and the Proposed Maximum Aggregate Offering Price are based on the
average of the high and low prices reported by the Nasdaq SmallCap Market
of The Nasdaq Stock Market on February 17, 2004, which is within five (5)
business days prior to the date of this Registration Statement.
(5) Represents shares that may be issued upon the exercise of stock options
that have been issued under the Plan.
(6) Pursuant to Rule 457(h)(1), the Proposed Maximum Offering Price Per Share
and the Proposed Maximum Aggregate Offering Price have been calculated
based on the exercise prices of options previously granted.
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PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The information required to be contained in the Section 10(a) prospectus
is omitted from this Registration Statement pursuant to Rule 428 of the
Securities Act of 1933, as amended (the "Securities Act"), and the note to Part
I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The Registrant hereby incorporates by reference into this Registration
Statement the following documents:
(1) the Registrant's Annual Report on Form 10-KSB for the year
ended December 31, 2002, as amended by Amendment No. 1 to the
Registrant's Annual Report on Form 10-KSB/A;
(2) the Registrant's Quarterly Report on Form 10-QSB for the
quarter ended March 31, 2003;
(3) the Registrant's Quarterly Report on Form 10-QSB for the
quarter ended June 30, 2003;
(4) the Registrant's Quarterly Report on Form 10-QSB for the
quarter ended September 30, 2003;
(5) the Registrant's Current Reports on Form 8-K filed on January
14, 2003, May 22, 2003, June 9, 2003 (as amended on July 22,
2003 and September 5, 2003), July 10, 2003, July 11, 2003,
August 18, 2003, October 9, 2003, January 13, 2004 and January
30, 2004; and
(6) the description of the Registrant's common stock contained in
its Registration Statement on Form 8-A under Section 12 of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), dated September 5, 1997, including any amendment or
reports filed for the purpose of updating such description.
All documents subsequently filed by the Registrant with the Securities and
Exchange Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act, prior to the filing of a post-effective amendment to the
Registration Statement which indicates that all securities offered hereby have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference in this Registration Statement and to be
a part hereof from the date of filing of such documents.
Item 4. Description of Securities.
Inapplicable.
Item 5. Interest of Named Experts and Counsel.
Thomas E. Constance, a member of Kramer Levin Naftalis & Frankel, LLP,
counsel to the Registrant, is a director of the Registrant.
Item 6. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify directors and officers, as well as other employees and
individuals, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by any such person
in connection with any threatened, pending or completed actions, suits or
proceedings in which such person is made a party by reason of such person being
or having been a director, officer, employee or agent to the Registrant. The
Delaware General Corporation Law provides that Section 145 is not exclusive of
other rights to which those seeking indemnification may be entitled under any
bylaw, agreement, vote of stockholders or disinterested directors or otherwise.
Article IX of the Registrant's Certificate of Incorporation and Article VII of
the Registrant's Bylaws provide for
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indemnification by the Registrant of its directors and officers to the fullest
extent permitted by the Delaware General Corporation Law.
Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that a director of
the corporation shall not be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) for
unlawful payments of dividends or unlawful stock repurchases, redemptions or
other distributions, or (iv) for any transaction from which the director derived
an improper personal benefit. The Registrant's Certificate of Incorporation
provides for such limitation of liability.
Item 7. Exemption from Registration Claimed.
Inapplicable.
Item 8. Exhibits and Undertaking.
(a) Exhibits.
Exhibit Number Description
-------------- -----------
4.1 SIGA Technologies, Inc. Amended and Restated 1996
Incentive and Non-Qualified Stock Option Plan, as
amended.
5.1 Opinion of Kramer Levin Naftalis & Frankel LLP.
23.1 Consent of Kramer Levin Naftalis & Frankel LLP
(included in Exhibit 5.1 to this Registration
Statement).
23.2 Consent of PricewaterhouseCoopers LLP.
24.1 Power of Attorney (included on the signature page
of this Registration Statement).
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement to:
(i) Include any prospectus required by Section 10(a)(3) of
the Securities Act.
(ii) Reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof)
which, individually or together, represent a fundamental
change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the
total dollar value of securities offered would not
exceed that which was registered) and any deviation from
the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed
with the Securities and Exchange Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20 percent change in
the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
Registration Statement.
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(iii) Include any additional or change material information
with respect to the plan of distribution not previously
disclosed in the Registration Statement.
Notwithstanding anything contained herein to the contrary, paragraphs (a)(1)(i)
and (a)(1)(ii) above do not apply if the information required to be included in
a post-effective amendment is incorporated by reference from periodic reports
filed by the Registrant under the Exchange Act.
(2) For the purpose of determining any liability under the
Securities Act, treat each post-effective amendment as a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time as the initial bona fide offering thereof.
(3) To file a post-effective amendment to remove from
registration any of the securities being registered that remain unsold at the
end of the offering.
(b) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
(c) For determining any liability under the Securities Act, treat
each post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the registration statement,
and the offering of the securities at that time as the initial bona fide
offering thereof.
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SIGNATURES
Pursuant to the requirements of the Securities Act, SIGA Technologies,
Inc. certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing a Registration Statement on Form S-8 and has duly
caused this Registration Statement on Form S-8 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on this 18th day of February, 2004.
SIGA TECHNOLOGIES, INC.
By: /s/ Thomas N. Konatich
-------------------------------
Thomas N. Konatich
Acting Chief Executive Officer,
Chief Financial Officer
KNOW ALL PERSONS BY THESE PRESENTS, that the persons whose signatures
appear below each severally constitutes and appoints Thomas N. Konatich and
Donald G. Drapkin his true and lawful attorneys-in-fact and agents, with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
pre-effective and post-effective amendments) to this registration statement and
to sign any registration statement (and any post-effective amendments) relating
to the same offering as this registration statement that is to be effective upon
filing pursuant to Rule 462(b) under the Securities Act, and to file the same,
with all exhibits, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all which said attorneys-in-fact and agents, or their substitute, may
lawfully do, or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this registration
statement has been signed below by the following persons in the capacities and
on the dates indicated.
Signature Title Date
/s/ Thomas N. Konatich
----------------------------- Acting Chief Executive Officer
Thomas N. Konatich and Chief Financial Officer February 18, 2004
/s/ Donald G. Drapkin
-----------------------------
Donald G. Drapkin Chairman of the Board February 18, 2004
/s/ Roger Brent, Ph.D.
-----------------------------
Roger Brent, Ph.D. Director February 18, 2004
/s/ Charles Cantor, Ph.D.
-----------------------------
Charles Cantor, Ph.D. Director February 18, 2004
/s/ Thomas E. Constance
-----------------------------
Thomas E. Constance Director February 18, 2004
/s/ Bernard L. Kasten, Jr., M.D.
-----------------------------
Bernard L. Kasten, Jr., M.D. Director February 18, 2004
/s/ Adnan M. M. Mjalli, Ph.D.
-----------------------------
Adnan M. M. Mjalli, Ph.D. Director February 18, 2004
/s/ Mehmet C. Oz
-----------------------------
Mehmet C. Oz Director February 18, 2004
/s/ Eric A. Rose
-----------------------------
Eric A. Rose Director February 18, 2004
/s/ Paul G. Savas
-----------------------------
Paul G. Savas Director February 18, 2004
/s/ Michael Weiner
-----------------------------
Michael Weiner Director February 18, 2004
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EXHIBIT INDEX
Exhibit Number Description
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4.1 SIGA Technologies, Inc. Amended and Restated 1996
Incentive and Non-Qualified Stock Option Plan, as
amended.
5.1 Opinion of Kramer Levin Naftalis & Frankel LLP.
23.1 Consent of Kramer Levin Naftalis & Frankel LLP (included
in Exhibit 5.1 to this Registration Statement).
23.2 Consent of PricewaterhouseCoopers LLP.
24.1 Power of Attorney (included on the signature page of
this Registration Statement).
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Exhibit 4.1
SIGA Technologies, Inc.
Amended and Restated 1996 Incentive and Non-Qualified Stock Option Plan,
as amended
The SIGA Technologies, Inc. 1996 Incentive and Non-Qualified Stock Option
Plan (the "Plan") was initially adopted in 1996. The Plan subsequently was
amended in 1998, 1999 and 2000 to increase the number of shares of Company
Stock with respect to which awards may be granted under the Plan. The Plan
was amended and restated in its entirety and renamed the SIGA
Technologies, Inc. Amended and Restated 1996 Incentive and Non-Qualified
Stock Option Plan on May 3, 2001, by the Board of Directors, subject to
approval by the stockholders of the Company. The Plan is hereby further
amended and restated, subject to stockholder approval. The terms of the
Plan, as amended and restated, shall apply to all Options granted after
the effective date set forth in Section 24 hereof. The purposes of the
Plan are to attract and retain the best available personnel, to provide an
additional incentive to the employees, consultants and non-employee
directors of SIGA Technologies, Inc., a Delaware corporation (the
"Company"), and to promote the success of the Company's business.
1. Definitions
As used in the Plan, the following definitions apply to the terms
indicated below:
(a) "Affiliate" shall mean an entity (whether or not incorporated),
controlling, controlled by or under common control with the Company.
(b) "Board of Directors" shall mean the Board of Directors of SIGA
Technologies, Inc.
(c) "Cause" shall have the meaning set forth in any employment agreement
between the Participant and the Company in effect as of the date the
event giving rise to cause occurred. In the absence of such an
employment agreement provision, "Cause" shall mean: (a) the
Participant's conviction of any crime (whether or not involving the
Company) constituting a felony in the jurisdiction involved; (b)
conduct of the Participant related to the Participant's employment
for which either criminal or civil penalties against the Participant
or the Company may be sought; (c) material violation of the
Company's policies, including, without limitation, those relating to
sexual harassment, the disclosure or misuse of confidential
information, or those set forth in Company manuals or statements of
policy; (d) serious neglect or misconduct in the performance of the
Participant's duties for the Company or willful or repeated failure
or refusal to perform such duties; or (e) any material violation by
the Participant of the terms of any agreement between the
Participant and the Company, including, without limitation, any
employment or non-competition agreement. Any rights the Company may
have hereunder in respect of the events giving rise to Cause shall
be in addition to the rights the Company may have under any other
agreement with a Participant or at law or in equity. Any
determination of whether a Participant's employment is (or is deemed
to have been) terminated for Cause shall be made by the Committee in
its sole discretion, which determination shall be final and binding
on all parties. If, subsequent to a Participant's termination of
employment (whether voluntary or involuntary) without Cause, it is
discovered that the Participant's employment could have been
terminated for Cause, such Participant's employment shall be deemed
to have been terminated for Cause. A Participant's termination of
employment for Cause shall be effective as of the date of the
occurrence of the event giving rise to Cause, regardless of when the
determination of Cause is made.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(e) "Committee" shall mean the Committee appointed by the Board of
Directors to administer the Plan; provided, however, that the
Committee shall at all times consist of two or more persons, all of
whom are "non-employee directors" within the meaning of Rule 16b-3
under the Exchange Act and "outside directors" within the meaning of
Section 162(m) of the Code. With respect to any matters relating to
the grant of Options to non-employee members of the Board of
Directors or to individuals who are not reasonably expected to be
"covered employees" within the meaning of Section 162(m) of the Code
at the time the Option is exercised, the Committee may be the entire
Board of Directors.
(f) "Company" shall mean SIGA Technologies, Inc. or any successor
thereto. References to the Company also shall include the Company's
Affiliates unless the context clearly indicates otherwise.
(g) "Company Stock" shall mean the common stock of the Company, par
value $0.000l per share.
(h) "Disability" shall mean a disability described in Section 422(c)(6)
of the Code. The existence of a Disability shall be determined by
the Committee in its absolute discretion.
(i) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(j) "Fair Market Value" shall mean, with respect to a share of Company
Stock on an applicable date:
(i) If the principal market for the Company Stock (the "Market") is a
national securities exchange or the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") National
Market, the last sale price or, if no reported sales take place on
the applicable date, the average of the high bid and low asked price
of Company Stock as reported for such Market on such date or, if no
such quotation is made on such date, on the next preceding day on
which there were quotations, provided that such quotations shall
have been made within the ten (10) business days preceding the
applicable date; (ii) If the Market is the NASDAQ National List, the
NASDAQ Supplemental List or another market, the average of the high
bid and low asked price for Company Stock on the applicable date,
or, if no such quotations shall have been made on such date, on the
next preceding day on which there were quotations, provided that
such quotations shall have been made within the ten (10) business
days preceding the applicable date; or, (iii) In the event that
neither paragraph (i) nor (ii) shall apply, the Fair Market Value of
a share of Company Stock on any day shall be determined in good
faith by the Committee in a manner consistently applied.
(k) "Incentive Stock Option" shall mean an Option that is an "incentive
stock option" within the meaning of Section 422 of the Code and that
is identified as an Incentive Stock Option in the applicable Option
Agreement.
(l) "Non-Qualified Stock Option" shall mean an Option that is not an
Incentive Stock Option
(m) "Option" shall mean an option to purchase shares of Company Stock
(whether an Incentive Stock Option or a Non-Qualified Stock Option)
that is granted pursuant to the Plan.
(n) "Option Agreement" shall mean an agreement, in such form and
including such terms as the Committee in its sole discretion shall
determine, evidencing an Option.
(o) "Participant" shall mean an individual who is eligible to
participate in the Plan pursuant to Section 5 hereof and to whom an
Option is granted pursuant to the Plan, and, upon his or her death,
the individual's successors, heirs, executors and administrators, as
the case may be.
(p) "Plan" shall mean this SIGA Technologies, Inc. Amended and Restated
1996 Incentive and Non-Qualified Stock Option Plan, as it may be
amended from time to time. Prior to the effective date hereof, the
Plan was referred to as the SIGA Technologies, Inc. 1996 Incentive
and Non-Qualified Stock Option Plan and the SIGA Corporation 1996
Stock Option Plan.
(q) "Reload Option" shall mean an Option granted to a Participant in
accordance with Section 6 hereof upon the exercise of an Option.
(r) References in this Plan to a "termination of employment" or to a
Participant or employee who terminates employment or the like, mean
the Participant's (i) ceasing to be employed by, or to
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provide consulting or other services for, the Company or any
corporation (or any of its subsidiaries) which assumes the
Participant's award in a transaction to which Section 424(a) of the
Code applies or (ii) ceasing to be a member of the Board of
Directors. For purposes of the foregoing, if a Participant (a) at
the time of reference, is an employee, consultant or a member of the
Board of Directors, or any two of the three relationships, or (b)
ceases to be an employee, consultant or a member of the Board of
Directors and immediately is engaged in another of such
relationships with the Company, the Participant shall not be
considered to have terminated employment until he ceases the last of
such relationships with the Company.
2. Stock Subject to the Plan
(a) Plan Limit
Subject to adjustment as provided in Section 9 hereof, the Committee
may grant Options hereunder with respect to shares of Company Stock
that in the aggregate do not exceed 10,000,000 shares. To the extent
that any Options terminate, expire or are cancelled without having
been exercised, the shares covered by such Options shall again be
available for grant under the Plan. Shares of Company Stock issued
under the Plan may be either newly issued shares or treasury shares,
at the discretion of the Committee.
(b) Individual Limit
Subject to adjustment as provided in Section 9 hereof, during any
calendar year, the Committee shall not grant any one Participant
Options hereunder with respect to more than 4,900,000 shares of
Company Stock, which limit shall include any shares represented by
an Option granted within the same year that has been cancelled.
3. Administration of the Plan
The Plan shall be administered by the Committee, provided, however, that
in the absence of the appointment of the Committee or for any other reason
determined by the Board of Directors, the Board of Directors may take any
action under the Plan that would otherwise be the responsibility of the
Committee. The Committee shall from time to time designate the individuals
who shall be granted Options and the amount and type of such Options.
The Committee shall have fill authority to administer the Plan, including
authority to interpret and construe any provision of the Plan and the
terms of any Option issued under it, correct any defect or supply any
omission or reconcile any inconsistency in the Plan and any Option
Agreement, adopt such rules and regulations for administering the Plan as
it may deem necessary or appropriate, and delegate such administrative
responsibilities as it deems appropriate, provided, however, that the
Committee shall retain the responsibility to designate the Option
recipients and the amount and type of such Options. Decisions of the
Committee shall be final and binding on all parties. The Committee's
determinations under the Plan may, but need not, be uniform and may be
made on a Participant-by-Participant basis (whether or not two or more
Participants are similarly situated).
The Committee may, in its absolute discretion, without amending the Plan,
accelerate the date on which any Option granted under the Plan becomes
vested or otherwise adjust any of the terms of such Option (except that no
such adjustment shall, without the consent of a Participant, reduce the
Participant's rights under any previously granted and outstanding Option
unless the Committee determines that such adjustment is necessary or
appropriate to prevent such Option from constituting "applicable employee
remuneration" within the meaning of Section 162(m) of the Code).
Whether an authorized leave of absence, or absence in military or
government service, shall constitute a termination of employment, and the
impact, if any, of any such leave of absence on Options theretofore
granted under the Plan shall be determined by the Committee in its
absolute discretion, subject to applicable law.
- 3 -
A majority of the Committee shall constitute a quorum at any meeting, and
the acts of a majority of the members present, or acts unanimously
approved in writing by the entire Committee without a meeting, shall be
the acts of the Committee.
No member of the Committee shall be liable for any action, omission, or
determination relating to the Plan, and the Company shall indemnify and
hold harmless each member of the Committee and each other director or
employee of the Company to whom any duty or power relating to the
administration or interpretation of the Plan has been delegated against
any cost or expense (including counsel fees) or liability (including any
sum paid in settlement of a claim with the approval of the Committee)
arising out of any action, omission or determination relating to the Plan,
unless, in either case, such action, omission or determination was taken
or made by such member, director or employee in bad faith and without
reasonable belief that it was in the best interests of the Company.
4. Eligibility
The persons who shall be eligible to receive Options pursuant to the Plan
shall be (i) officers and salaried employees of the Company and its
subsidiaries (including employees who are also directors and prospective
salaried employees conditioned on their becoming salaried employees), (ii)
members of the Board of Directors (whether or not they also are employees
of the Company), (iii) such consultants to the Company and its
subsidiaries as the Committee shall select in its discretion, and (iv) any
other key persons, as determined by the Committee in its sole discretion,
provided, however, that Incentive Stock Options only may be granted to
employees of the Company. For purposes of the preceding sentence, an
employee means an individual who is (or is expected to be) classified as
an employee of the Company for purposes of the Company's payroll. A
director shall not be considered an employee of the Company as a result of
the Company's payment of a director's fee.
5. Options
The Committee may grant Options pursuant to the Plan. Each Option shall be
evidenced by an Option Agreement in such form and including such terms as
the Committee shall from time to time approve. Options shall comply with
and be subject to the following terms and conditions:
(a) Identification of Options
Each Option granted under the Plan shall be clearly identified in
the applicable Option Agreement as either an Incentive Stock Option
or as a Non-Qualified Stock Option. In the absence of such
identification, an Option shall be deemed to be a Non-Qualified
Stock Option.
(b) Exercise Price
The exercise price-per-share of any Non-Qualified Stock Option
granted under the Plan shall be such price as the Committee shall
determine (which may be equal to, less than or greater than the then
Fair Market Value of a share of Company Stock) on the date on which
such Non-Qualified Stock Option is granted; provided, that such
price may not be less than the minimum price required by law.
Subject to Paragraph (d) of this Section 6, the exercise
price-per-share of any Incentive Stock Option granted under the Plan
shall be not less than 100% of the Fair Market Value of a share of
Company Stock on the date on which such Incentive Stock Option is
granted (except as permitted in connection with the assumption or
issuance of Options in a transaction to which Section 424(a) of the
Code applies) and, to the extent any compensation payable in respect
of an Option is intended to qualify as performance-based
compensation under Section 162(m)(4)(C) of the Code, the exercise
price-per-share of such Option shall be not less than 100% of the
Fair Market Value of a share of Company Stock on the date on which
such Option is granted.
(c) Term and Exercise of Options
(1) Each Option shall be exercisable at such times and under such
conditions as determined by the Committee and set forth in the
applicable Option Agreement, including
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performance criteria with respect to the Company and/or the
Participant. Except as provided in Section 7 hereof, an Option
shall first be exercisable as of the date on which it vests,
and shall remain exercisable until the expiration of ten (10)
years from the date such Option was granted; provided,
however, that each Option shall be subject to earlier
termination, expiration or cancellation as provided in the
Plan.
(2) Each Option shall be exercisable in whole or in part. The
partial exercise of an Option shall not cause the expiration,
termination or cancellation of the remaining portion thereof.
Upon the partial exercise of an Option, the Option Agreement
evidencing such Option shall be returned to the Participant
exercising such Option together with the delivery of the
certificates described in Section 6(c)(4) hereof.
(3) An Option shall be exercised by delivering notice to the
Company's principal office, to the attention of its Secretary,
at such time as the Committee reasonably may require. Such
notice shall be accompanied by the Option Agreement evidencing
the Option, shall specify the number of shares of Company
Stock with respect to which the Option is being exercised and
the effective date of the proposed exercise and shall be
signed by the Participant. The Participant may withdraw such
notice at any time prior to the close of business on the
business day immediately preceding the effective date of the
proposed exercise, in which case such Option Agreement shall
be returned to him. Payment for shares of Company Stock
purchased upon the exercise of an Option shall be made on the
effective date of such exercise either:
(i) in cash, by certified check, bank cashier's check or
wire transfer; or
(ii) unless provided otherwise in the applicable Option
Agreement, in shares of Company Stock owned by the
Participant (which, if acquired pursuant to the exercise
of a stock option, were acquired at least six months
prior to the option exercise date) and valued at their
Fair Market Value on the effective date of such
exercise, or partly in shares of Company Stock with the
balance in cash, by certified check, bank cashier's
check or wire transfer; or
(iii) unless provided otherwise in the applicable Option
Agreement, pursuant to procedures adopted by the
Committee whereby the Participant, by a properly written
notice, shall direct (A) an immediate market sale or
margin loan respecting all or a part of the shares of
Company Stock to which the Participant is entitled upon
exercise pursuant to an extension of credit by the
Company to the Participant of the exercise price (B) the
delivery of the shares of Company Stock from the Company
directly to the brokerage firm, and (C) the delivery of
the exercise price from the sale or margin loan proceeds
from the brokerage firm directly to the Company.
(iv) at the discretion of the Committee and to the extent
permitted by law, by such other provision as the
Committee may from time to time prescribe.
(v) In addition, the Company may, in its sole discretion and
at the request of the Participant, (A) lend to the
Participant, with full recourse, an amount equal to such
portion of the payment for the shares of Company Stock
pursuant to the Option as the Committee may determine;
or (B) guarantee a loan obtained by the Participant from
a third-party for the purpose of tendering such payment.
Any payment in shares of Company Stock shall be effected
by the delivery of such shares to the Secretary of the
Company, duly endorsed in blank or accompanied by stock
powers duly executed in blank, together with any other
documents and evidences as the Secretary of the Company
shall require from time to time.
(4) Certificates for shares of Company Stock purchased upon the
exercise of an Option shall be issued in the name of the
Participant or his or her beneficiary (or permitted
transferee),
- 5 -
as the case may be, and delivered to the Participant or his or
her beneficiary (or permitted transferee), as the case may be,
as soon as practicable following the effective date on which
the Option is exercised.
(d) Limitations on Grant of Incentive Stock Options
(1) To the extent that the aggregate Fair Market Value (determined
as of the time the option is granted) of the stock with
respect to which Incentive Stock Options granted under this
Plan and all other plans of the Company (and any plans of any
"subsidiary corporation" or "parent corporation" of the
Company within the meaning of Section 424 of the Code) are
first exercisable by any employee during any calendar year
shall exceed the maximum limit (currently, $100,000), if any,
imposed from time to time under Section 422 of the Code, such
options shall be treated as Non-Qualified Stock Options. In
such an event, the determination of which Options shall remain
Incentive Stock Options and which shall be treated as
Non-Qualified Stock Options shall be based on the order in
which such Options were granted, with the excess over the
first $100,000 granted deemed to be Non-Qualified Stock
Options. All other terms and provisions of such Options that
are deemed to be Non-Qualified Stock Options shall remain
unchanged. Upon the exercise of an Option that, pursuant to
this Section 6(d)(1) is treated in part as an Incentive Stock
Option and in part as a Non-Qualified Stock Option, the
Company shall issue separate stock certificates evidencing the
shares of Company Stock treated as acquired upon exercise of
an Incentive Stock Option and the shares of Company Stock
treated as acquired upon exercise of a Non-Qualified Stock
Option and shall identify each such certificate accordingly in
its stock transfer records.
(2) No Incentive Stock Option may be granted to an individual if,
at the time of the proposed grant, such individual owns stock
possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or any of
its "subsidiary corporations" or "parent corporations" (within
the meaning of Section 424 of the Code), unless (i) the
exercise price of such Incentive Stock Option is at least one
hundred ten percent (110%) of the Fair Market Value of a share
of Company Stock at the time such Incentive Stock Option is
granted and (ii) such Incentive Stock Option is not
exercisable after the expiration of five years from the date
such Incentive Stock Option is granted.
(e) Grants of Reload Options
If provided in the applicable Option Agreement, an additional option
(the "Reload Option") shall be granted to any Participant who,
pursuant to Section 6(c)(3)(ii), delivers shares of Company Stock in
partial or full payment of the exercise price of an Option (the
"Original Option"). The Reload Option shall be for a number of
shares of Company Stock equal to the number thus delivered, shall
have an exercise price equal to the Fair Market Value of a share of
Company Stock on the date of exercise of the Original Option, and
shall have an expiration date no later than the expiration date of
the Original Option. A Reload Option only may be granted if the
exercise price-per-share of the Original Option is no less than the
Fair Market Value of a share of Company Stock on its date of grant.
(f) Effect of Termination of Employment
(1) Unless otherwise provided in an applicable Option Agreement,
in the event that the employment of a Participant with the
Company shall terminate for any reason other than Cause,
Disability or death (i) Options granted to such Participant,
to the extent that they were vested at the time of such
termination, shall remain exercisable until the expiration of
90 days after such termination, on which date they shall
expire, and (ii) Options granted to such Participant, to the
extent that they were not vested at the time of such
termination, shall expire at the close of business on the date
of such termination; provided, however, that no Option shall
be exercisable after the expiration of its term.
- 6 -
(2) Unless otherwise provided in an applicable Option Agreement,
in the event that the employment of a Participant with the
Company shall terminate on account of the death or Disability
of the Participant (i) Options granted to such Participant, to
the extent that they were vested at the time of such
termination, shall remain exercisable (pursuant to Section 16
hereof) until the expiration of one year after such
termination, on which date they shall expire, and (ii) Options
granted to such Participant, to the extent that they were not
vested at the time of such termination, shall expire at the
close of business on the date of such termination; provided.
however, that no Option shall be exercisable after the
expiration of its term.
(3) Unless otherwise provided in an applicable Option Agreement,
in the event of the termination of a Participant's employment
for Cause, all outstanding Options granted to such Participant
shall expire at the commencement of business on the effective
date of such termination (or deemed termination in accordance
with Section 2(c)).
(g) Other Option Grants.
The Committee, in its discretion, may grant Options with terms
different than those set forth herein to the extent such Options are
in substitution for and have terms equivalent to options granted by
another company that was merged into or acquired by the Company or
an Affiliate or whose assets or substantially all of whose assets
were acquired by the Company or an Affiliate.
6. Pre-Vesting Exercise
(a) Pre-Vesting Exercise
The Committee, in an Option Agreement, may permit a Participant to
exercise an Option prior to the date on which it vests; provided,
however, the unvested portion of the Company Stock issuable upon
exercise of such Option shall be subject to the nontransferability,
forfeiture and repayment provisions of this Section 7 until such
shares vest.
(b) Restrictions on Transferability
Until a share of Company Stock vests, the Participant may not
transfer or assign the Participant's rights to such share of Company
Stock or to any cash payment related thereto. Until a share of
Company Stock so vests, no attempt to transfer or assign such shares
or the right to any cash payment related thereto, whether by
transfer, pledge, hypothecation or otherwise and whether voluntary
or involuntary, by operation of law or otherwise, shall vest the
transferee or assignee with any interest or right in or with respect
to such share of Company Stock or such cash payment, and the
attempted transfer or assignment shall be of no force and effect.
Each such certificate that is issued pursuant to this Section 7
shall bear the following legend, in addition to any legends or
restrictions imposed pursuant to Section 12 hereof:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the restrictions, terms and
conditions (including forfeiture and restrictions against transfer)
contained in the SIGA Technologies, Inc. Amended and Restated 1996
Incentive and Non-Qualified Stock Option Plan and an Agreement
entered into between the registered owner of such shares and SIGA
Technologies, Inc. A copy of the Plan and Agreement is on file in
the office of the Secretary of SIGA Technologies, Inc."
Such legend shall not be removed from the certificates evidencing
such exercised shares of Company Stock until such shares vest, at
which time stock certificates shall be issued pursuant to Section 12
hereof free of such legend.
Each such stock certificate, together with the stock powers relating
to such shares of Company Stock, shall be deposited by the Company
with a custodian designated by the Company (the "Certificate
Custodian"). The Company may designate itself as Certificate
Custodian hereunder.
- 7 -
The Company shall cause such Certificate Custodian to issue to the
Participant a receipt evidencing the certificates that are
registered in the name of the Participant and are held by the
Certificate Custodian.
(c) Dividends
Unless the Committee in its absolute discretion otherwise
determines, any securities or other property (including dividends
paid in cash) received by a Participant with respect to a share of
Company Stock issued pursuant to this Section 7, as a result of any
dividend, stock split, reverse stock split, recapitalization,
merger, consolidation, combination, exchange of shares or otherwise,
will not vest until such share of Company Stock vests, and shall be
promptly deposited with the Certificate Custodian designated
pursuant to Section 7(b) hereof until such share vests, at which
time such property shall be delivered to the Participant. Any such
cash dividends, prior to the date the share vests, shall be merely
an unfunded, unsecured promise of the Company to pay a sum of money
to the Participant in the future.
(d) Forfeiture and Repayment
Upon termination of a Participant's employment with the Company or
an Affiliate for any reason (including death), all unvested shares
of Company Stock exercised pursuant to any Option hereunder shall be
immediately and irrevocably forfeited. In the event of any such
forfeiture, the Certificate Custodian shall surrender to the Company
as soon as practicable after the effective date of such forfeiture
all certificates for such shares issued to Participant by the
Company. As soon as practicable after such surrender, but in no
event later than 30 days after such surrender, Participant shall be
entitled to a payment by the Company in an amount, in cash equal to
the aggregate of the exercise price-per-share paid for each
exercised but unvested share of Company Stock so forfeited.
7. Right of Recapture
If at any time within one year after the date on which a Participant
exercises an Option, the Committee determines in its discretion that the
Company has been materially harmed by the Participant, whether such harm
(a) results in the Participant's termination or deemed termination of
employment for Cause or (b) results from any activity of the Participant
determined by the Committee to be in competition with any activity of the
Company, or otherwise inimical, contrary or harmful to the interests of
the Company (including, but not limited to, accepting employment with or
serving as a consultant, adviser or in any other capacity to an entity
that is in competition with or acting against the interests of the
Company), then any gain realized by the Participant from such exercise
shall be paid by the Participant to the Company upon notice from the
Company. Such gain shall be determined as of the date of such exercise,
without regard to any subsequent change in the Fair Market Value of a
share of Company Stock. The Company shall have the right to offset such
gain against any amounts otherwise owed to the Participant by the Company
(whether as wages, vacation pay, or pursuant to any benefit plan or other
compensatory arrangement).
8. Adjustment Upon Changes in Company Stock
(a) Shares Available for Grants
Subject to any required action by the stockholders of the Company,
in the event of any change in the number of shares of Company Stock
outstanding by reason of any stock dividend or split, reverse stock
split, recapitalization, merger, consolidation, combination or
exchange of shares or similar corporate change, the maximum number
of shares of Company Stock with respect to which the Committee may
grant Options under Section 3 hereof shall be appropriately adjusted
by the Committee. In the event of any change in the number of shares
of Company Stock outstanding by reason of any other event or
transaction, the Committee may, but need not, make such adjustments
in the number and class of shares of Company Stock with respect to
which Options may be granted under Section 3 hereof as the Committee
may deem appropriate. Any such adjustment pursuant to this Section
9(a) shall be made by the Committee, whose determination shall be
final, binding and conclusive.
- 8 -
(b) Outstanding Options -- Increase or Decrease in Issued Shares Without
Consideration
Subject to any required action by the stockholders of the Company,
in the event of any increase or decrease in the number of issued
shares of Company Stock resulting from a subdivision or
consolidation of shares of Company Stock or the payment of a stock
dividend (but only on the shares of Company Stock), or any other
increase or decrease in the number of such shares effected without
receipt of consideration by the Company, the Committee shall
proportionally adjust the number of shares of Company Stock subject
to each outstanding Option and the exercise price-per-share of
Company Stock of each such Option. Any such adjustment pursuant to
this Section 9(b) shall be made by the Committee, whose
determination shall be final, binding and conclusive.
(c) Outstanding Options -- Certain Mergers
Subject to any required action by the stockholders of the Company,
in the event that the Company shall be the surviving corporation in
any merger or consolidation (except a merger or consolidation as a
result of which the holders of shares of Company Stock receive
securities of another corporation), each Option outstanding on the
date of such merger or consolidation shall pertain to and apply to
the securities which a holder of the number of shares of Company
Stock subject to such Option would have received in such merger or
consolidation.
(d) Outstanding Options -- Certain Other Transactions
In the event of (1) a dissolution or liquidation of the Company, (2)
a sale of all or substantially all of the Company's assets, (3) a
merger or consolidation involving the Company in which the Company
is not the surviving corporation or (4) a merger or consolidation
involving the Company in which the Company is the surviving
corporation but the holders of shares of Company Stock receive
securities of another corporation and/or other property, including
cash, the Committee shall, in its absolute discretion, have the
power to:
(i) cancel, effective immediately prior to the occurrence of
such event, each Option outstanding immediately prior to
such event (whether or not then vested), and, in full
consideration of such cancellation, pay to the
Participant to whom such Option was granted an amount in
cash, for each share of Company Stock subject to such
Option equal to the excess of (A) the value, as
determined by the Committee in its absolute discretion,
of the property (including cash) received by the holder
of a share of Company Stock as a result of such event
over (B) the exercise price of such Option; or
(ii) provide for the exchange of each Option outstanding
immediately prior to such event (whether or not then
vested) for an option on some or all of the property
which a holder of the number of shares of Company Stock
subject to such Option would have received in such
transaction or on shares of the acquiror or surviving
corporation and, incident thereto, make an equitable
adjustment as determined by the Committee in its
absolute discretion in the exercise price of the Option,
or the number of shares or amount of property subject to
the Option or, if appropriate, provide for a cash
payment to the Participant to whom such Option was
granted in partial consideration for the exchange of the
Option.
(e) Outstanding Options -- Other Changes
In the event of any change in the capitalization of the Company or a
corporate change other than those specifically referred to in
Sections 9(b), (c) or (d) hereof, the Committee may, in its absolute
discretion, make such adjustments in the number and class of shares
subject to Options outstanding on the date on which such change
occurs and in the per-share exercise price of each such Option as
the Committee may consider appropriate to prevent dilution or
enlargement of rights. In addition, if and to the extent the
Committee determines it is appropriate, the Committee may elect to
cancel each Option outstanding immediately prior to such event
(whether or not then vested), and, in full consideration of such
cancellation, pay to the Participant to whom such Option
- 9 -
was granted an amount in cash, for each share of Company Stock
subject to such Option, equal to the excess of (A) the Fair Market
Value of Company Stock on the date of such cancellation over (B) the
exercise price of such Option.
(f) Effect of Loss of Affiliate Status
If an entity ceases to be an Affiliate because the Company sells its
interest in such entity to another party or parties, such event
shall constitute a termination of employment from the Company and
its Affiliates by Participants employed by such entity as of the
date it ceases to be an Affiliate. The Committee may, but need not,
adjust the provisions of the Plan related to the expiration of any
Options not yet vested at termination of employment, as it considers
appropriate in connection with the specific event resulting in loss
of Affiliate status.
(g) No Other Rights
Except as expressly provided in the Plan, no Participant shall have
any rights by reason of any subdivision or consolidation of shares
of stock of any class, the payment of any dividend, any increase or
decrease in the number of shares of stock of any class or any
dissolution, liquidation, merger or consolidation of the Company or
any other corporation. Except as expressly provided in the Plan, no
issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with
respect to, the number of shares of Company Stock subject to an
Option or the exercise price of any Option.
9. Rights as a Stockholder
No person shall have any rights as a stockholder with respect to any
shares of Company Stock covered by or relating to any Option granted
pursuant to this Plan until the date that the Participant becomes the
registered owner of such shares. Except as otherwise expressly provided in
Section 9 hereof, no adjustment to any Option shall be made for dividends
or other rights for which the record date occurs prior to the date such
stock certificate is issued.
10. No Special Employment Rights; No Right to Option
Nothing contained in the Plan or any Option Agreement shall confer upon
any Participant any right with respect to the continuation of his or her
employment by or other relationship with the Company or interfere in any
way with the right of the Company, subject to the terms of any separate
employment agreement to the contrary, at any time to terminate such
employment or to increase or decrease the compensation of the Participant
from the rate in existence at the time of the grant of an Option. No
person shall have any claim or right to receive an Option hereunder. The
Committee's granting of an Option to a Participant at any time shall
neither require the Committee to grant an Option to such Participant or
any other Participant or other person at any time nor preclude the
Committee from making subsequent grants to such Participant or any other
Participant or other person.
11. Securities Matters
(a) The Company shall be under no obligation to effect the registration
pursuant to the Securities Act of 1933, as amended from time to
time, of any interests in the Plan or any shares of Company Stock to
be issued hereunder or to effect similar compliance under any state
laws. Notwithstanding anything herein to the contrary, the Company
shall not be obligated to cause to be issued or delivered any
certificates evidencing shares of Company Stock pursuant to the Plan
unless and until the Company is advised by its counsel that the
issuance and delivery of such certificates is in compliance with all
applicable laws, regulations of governmental authority and the
requirements of any securities exchange on which shares of Company
Stock are traded. The Committee may require, as a condition of the
issuance and delivery of certificates evidencing shares of Company
Stock pursuant to the terms hereof, that the recipient of such
shares make such covenants, agreements and representations, and that
such certificates bear such legends, as the Committee, in its sole
discretion, deems necessary or desirable. The Company shall not
permit any shares of
- 10 -
Company Stock to be issued pursuant to the Plan unless such shares of
Company Stock are fully paid and non-assessable, within the meaning of
Section 152 of the Delaware General Corporation Law, except as otherwise
permitted by Section 153(c) of the Delaware General Corporation Law.
(b) The exercise of any Option granted hereunder shall be effective only
at such time as counsel to the Company shall have determined that
the issuance and delivery of shares of Company Stock pursuant to
such exercise is in compliance with all applicable laws, regulations
of governmental authority and the requirements of any securities
exchange on which shares of Company Stock are traded. The Committee
may, in its sole discretion, defer the effectiveness of any exercise
of an Option granted hereunder in order to allow the issuance of
shares of Company Stock pursuant thereto to be made pursuant to
registration or an exemption from registration or other methods for
compliance available under federal or state securities laws. The
Committee shall inform the Participant in writing of its decision to
defer the effectiveness of the exercise of an Option granted
hereunder. During the period that the effectiveness of the exercise
of an Option has been deferred, the Participant may, by written
notice, withdraw such exercise and obtain a refund of any amount
paid with respect thereto.
12. Withholding Taxes
(a) Cash Remittance
Whenever shares of Company Stock are to be issued upon the exercise
of an Option, the Company shall have the right to require the
Participant to remit to the Company, in cash, an amount sufficient
to satisfy the federal, state and local withholding tax
requirements, if any, attributable to such exercise prior to the
delivery of any certificate or certificates for such shares.
(b) Stock Remittance
At the election of the Participant, subject to the approval of the
Committee, when shares of Company Stock are to be issued upon the
exercise of an Option, in lieu of the remittance required by Section
13(a) hereof, the Participant may tender to the Company a number of
shares of Company Stock, the Fair Market Value of which at the
tender date the Committee determines to be sufficient to satisfy the
federal, state and local withholding tax requirements, if any,
attributable to such exercise and not greater than the Participant's
estimated total federal, state and local tax obligations associated
with such exercise.
(c) Stock Withholding
The Company shall have the right, when shares of Company Stock are
to be issued upon the exercise of an Option in lieu of requiring the
remittance required by Section 13(a) hereof, to withhold a number of
such shares, the Fair Market Value of which at the exercise date the
Committee determines to be sufficient to satisfy the federal, state
and local withholding tax requirements, if any, attributable to such
exercise and is not greater than the Participant's estimated total
federal, state and local tax obligations associated with such
exercise.
13. Amendment or Termination of the Plan
The Board of Directors may, at any time, suspend or discontinue the Plan
or revise or amend it in any respect whatsoever; provided, however, that
if and to the extent required under Section 422 of the Code (if and to the
extent that the Board of Directors deems it appropriate to comply with
Section 422) and if and to the extent required to treat some or all of the
Options as "performance-based compensation" within the meaning of Section
162(m) of the Code (if and to the extent that the Board of Directors deems
it appropriate to meet such requirements), no amendment shall be effective
without the approval of the stockholders of the Company, that (i) except
as provided in Section 9 hereof, increases the number of shares of Company
Stock with respect to which Options may be issued under the Plan, (ii)
modifies the class of individuals eligible to participate in the Plan or
(iii) materially increases the benefits accruing to individuals pursuant
to the Plan. Nothing herein shall restrict the Committee's ability to
exercise its
- 11 -
discretionary authority hereunder pursuant to Section 4 hereof, which
discretion may be exercised without amendment to the Plan. No action under
this Section 14 may, without the consent of a Participant, reduce the
Participant's rights under any previously granted and outstanding Option
except to the extent that the Board of Directors determines that such
amendment is necessary or appropriate to prevent such Options from
constituting "applicable employee remuneration" within the meaning of
Section 162(m) of the Code.
14. No Obligation to Exercise
The grant to a Participant of an Option shall impose no obligation upon
such Participant to exercise such Option.
15. Transferability of Options
(a) Except as otherwise provided in this Section 16, during the lifetime
of a Participant each Option granted to a Participant shall be
exercisable only by the Participant and no Option shall be
assignable or transferable otherwise than by will or by the laws of
descent and distribution.
(b) Upon the death of a Participant, outstanding Options granted to such
Participant that have not been transferred pursuant to Section 16(a)
hereof may be exercised only by the executors or administrators of
the Participant's estate or by any person or persons who shall have
acquired such right to exercise by will or by the laws of descent
and distribution. No transfer by will or the laws of descent and
distribution of any Option, or the right to exercise any Option,
shall be effective to bind the Company unless the Committee shall
have been furnished with written notice thereof and with a copy of
the will and/or such evidence as the Committee may deem necessary to
establish the validity of the transfer.
(c) Any permissible transfer of an Option only shall be effective after
the Committee shall have been furnished with an agreement by the
transferee to comply with all the terms and conditions of the Option
that are or would have been applicable to the Participant and to be
bound by the acknowledgments made by the Participant in connection
with the grant of the Option.
(d) In the event that at any time any doubt exists as to the right of
any person to exercise or receive a payment under an Option, the
Committee shall be entitled, in its discretion, to delay such
exercise or payment until it is satisfied that such right has been
confirmed (which may, but need not be, by order of a court of
competent jurisdiction), or to permit such exercise or make payment
only upon receipt of a bond or similar indemnification (in such
amount and in such form as is satisfactory to the Committee).
16. Expenses and Receipts
The expenses of the Plan shall be paid by the Company. Any proceeds
received by the Company in connection with any Option will be used for
general corporate purposes.
17. Limitations Imposed by Section 162(m)
Notwithstanding any other provision hereunder, if and to the extent that
the Committee determines the Company's federal tax deduction in respect of
an Option may be limited as a result of Section 162(m) of the Code, the
Committee may delay the payment in respect of such Option until a date
that is within 30 days after the date that compensation paid to the
Participant no longer is subject to the deduction limitation under Section
162(m) of the Code. In the event that a Participant exercises an Option at
a time when the Participant is a "covered employee," and the Committee
determines to delay the payment in respect of any such Option, the
Committee shall credit cash or, in the case of an amount payable in
Company Stock, the Fair Market Value of the Company Stock, payable to the
Participant to a book account. The Participant shall have no rights in
respect of such book account and the amount credited thereto shall not be
transferable by the Participant other than by will or laws of descent and
distribution.
- 12 -
The Committee may credit additional amounts to such book account as it may
determine in its sole discretion. Any book account created hereunder shall
represent only an unfunded unsecured promise by the Company to pay the
amount credited thereto to the Participant in the future.
18. Mitigation of Excise Tax
If any payment or right accruing to a Participant under this Plan (without
the application of this Section), either alone or together with other
payments or rights accruing to the Participant from the Company or an
affiliate ("Total Payments") would constitute a "parachute payment" (as
defined in Section 280G of the Code and regulations thereunder), the
Committee may in each particular instance determine to (i) reduce such
payment or right to the largest amount or greatest right that will result
in no portion of the amount payable or right accruing under the Plan being
subject to an excise tax under Section 4999 of the Code or being
disallowed as a deduction under Section 280G of the Code, or (ii) take
such other actions, or make such other arrangements or payments with
respect to any such payment or right as the Committee may determine in the
circumstances. Any such determination shall be made by the Committee in
the exercise of its sole discretion, and such determination shall be
conclusive and binding on the Participant. The Participant shall cooperate
as may be requested by the Committee in connection with the Committee's
determination, including providing the Committee with such information
concerning such Participant as the Committee may deem relevant to its
determination.
19. Participant Obligation to Notify
In the event that the Participant (a) disposes of any shares of Company
Stock acquired upon the exercise of an Incentive Stock Option (i) prior to
the expiration of two years after the date such Incentive Stock Option was
granted or prior to one year after the date the shares were acquired or
(ii) under any other circumstances described in Section 422(a) of the Code
or any successor provision, or (b) makes an election under Section 83(b)
of the Code or any successor provision, with respect to Company Stock
acquired pursuant to Section 7 hereof, the Participant shall notify the
Company of such disposition or election within 10 days thereof
20. Information to Participants
To the extent required by applicable law, the Company shall provide to
each Participant, during the period for which such Participant has one or
more Options outstanding, copies of all annual reports and other
information which are provided to all stockholders of the Company. Except
as otherwise noted in the foregoing sentence, the Company shall have no
obligation or duty to affirmatively disclose to any Participant, and no
Participant shall have any right to be advised of, any material
information regarding the Company or any Affiliate at any time prior to,
upon or otherwise in connection with, the exercise of an Option.
21. Funding
All benefits payable under this Plan shall be paid directly by the
Company. The Company shall not be required to fund or otherwise segregate
assets to be used for payment of benefits under this Plan.
22. Failure to Comply
In addition to the remedies of the Company elsewhere provided for herein,
a failure by a Participant (or beneficiary or permitted transferee) to
comply with any of the terms and conditions of the Plan or the agreement
executed by such Participant (or beneficiary or permitted transferee)
evidencing an Option, unless such failure is remedied by such Participant
(or beneficiary or permitted transferee) within 10 days after having been
notified of such failure by the Committee, shall be grounds for the
cancellation and forfeiture of such Option, in whole or in part, as the
Committee, in its absolute discretion, may determine.
23. Effective Date of Plan
The Plan was initially adopted by the Board of Directors in 1996 and was
approved by shareholders of the Company. The Plan was subsequently amended
in 1998, 1999 and 2000 to increase the number of shares
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with respect to which Options may be granted under the Plan and each of
the amendments was approved by the shareholders of the Company. An
amendment and restatement to the Plan was approved by the Board of
Directors, on May 3, 2001, subject to approval by the stockholders of the
Company, and the Plan as further amended and restated was approved by the
Board of Directors, as of June 29, 2001, subject to approval by the
stockholders of the Company. Options that were not previously authorized
by the stockholders of the Company under the provisions of the Plan as in
effect prior to May 3, 2001 that have not yet been approved by the
stockholders may be granted under the Plan at any time prior to the
receipt of such stockholder approval; provided, however, that each such
grant shall be subject to such approval. Without limitation on the
foregoing, no Option may be exercised prior to the receipt of such
approval. If the amended and restated Plan is not so approved on or before
May 3, 2002, then the May 3, 2001 and the June 29, 2001 amendments and
restatements of the Plan and all Options granted pursuant to such
amendments and restatements shall forthwith automatically terminate and be
of no force or effect.
24. Term of the Plan
The right to grant Options under the Plan will terminate on January 1,
2006 with respect to the 2,500,000 shares of Company Stock authorized
under the provisions of the Plan in effect prior to this amendment and
restatement, and on May 3, 2011 with respect to the additional 5,000,000
shares of Company Stock authorized pursuant to the May 3, 2001 amendment
and restatement.
25. Applicable Law
Except to the extent preempted by any applicable federal law, the Plan
will be construed and administered in accordance with the laws of the
State of Delaware, without reference to the principles of conflicts of
law.
26. Severability
If any provision of the Plan shall hereafter be held to be invalid,
unenforceable or illegal in whole or in part, in any jurisdiction under
any circumstances for any reason, (a) such provision shall be reformed to
the minimum extent necessary to cause such provision to be valid,
enforceable and legal while preserving the intent expressed by the Plan or
(b) if such provision cannot be so reformed, such provision shall be
severed from the Plan and, in the discretion of the Committee, an
equitable adjustment shall be made to the Plan (including, without
limitation, addition of necessary further provisions to the Plan) so as to
give effect to the intent as so expressed and the benefits so provided.
Such holding shall not affect or impair the validity, enforceability or
legality of such provision in any other jurisdiction or under any other
circumstances. Neither such holding nor such reformation or severance
shall affect or impair the legality, validity or enforceability of any
other provision of the Plan.
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EXHIBIT 5.1
KRAMER LEVIN NAFTALIS & FRANKEL LLP
919 THIRD AVENUE
NEW YORK, N.Y. 10022 - 3852
47, Avenue Hoche
TEL (212) 715-9100 75008 Paris
FAX (212) 715-8000 France
February 18, 2004
SIGA Technologies, Inc.
420 Lexington Avenue, Suite 601
New York, New York 10170
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel to SIGA Technologies, Inc., a Delaware
corporation (the "Registrant"), in connection with the preparation and filing of
a Registration Statement on Form S-8 (the "Registration Statement") with the
Securities and Exchange Commission (the "Commission"), with respect to the
registration under the Securities Act of 1933, as amended (the "Act"), of an
aggregate of 7,628,939 shares (the "Shares") of common stock, par value $0.0001
per share (the "Common Stock"), to be issued pursuant to the SIGA Technology,
Inc. Amended and Restated 1996 Incentive and Non-Qualified Stock Option Plan, as
amended (the "Plan").
We have reviewed copies of the Registration Statement, the Plan, the
amendment to the Plan increasing the number of shares available for grant under
the Plan, the Restated Certificate of Incorporation of the Registrant, the
Bylaws of the Registrant, as amended, and resolutions of the Board of Directors
of the Registrant.
We have also reviewed such other documents and made such other
investigations as we have deemed appropriate. As to various questions of fact
material to this opinion, we have relied upon statements, representations and
certificates of officers or representatives of the Registrant, public officials
and others. We have not independently verified the facts so relied on.
Based on the foregoing, and subject to the qualifications,
limitations and assumptions set forth herein, we are of the opinion that the
Shares covered by the Registration Statement, when issued upon the exercise of
options granted under the Plan in accordance with the terms and conditions of
the Plan and the option agreements governing such options, and assuming that the
exercise price for such Shares is equal to or in excess of the par value of the
Common Stock and is paid in full, will be legally issued, fully paid and
non-assessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement. In giving the foregoing consent we do not thereby admit
that we are in the category of persons whose consent is required under Section 7
of the Act or the rules and regulations of the Commission thereunder.
We do not express any opinion with respect to any law other than the
Business Corporation Law of the State of New York, the Delaware General
Corporation Law and the federal laws of the United States of America. The
opinion expressed herein is based upon the laws in effect on the date hereof,
and we assume no obligation to revise or supplement this opinion should any such
law be changed by legislative action, judicial decision or otherwise.
This opinion letter is being delivered to you in connection with the
registration of the Shares under the Registration Statement and may not be
relied on or otherwise used by any other person or by you for any other purpose.
Thomas E. Constance, a member of this firm, is a director of the
Registrant.
Very truly yours,
/s/ Kramer Levin Naftalis & Frankel LLP
Kramer Levin Naftalis & Frankel LLP
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EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 14, 2003 relating to the
financial statements of SIGA Technologies, Inc., which appears in SIGA
Technologies, Inc.'s Amendment No. 1 to the Annual Report on Form 10-KSB for the
year ended December 31, 2002. We also consent to the incorporation by reference
in this Registration Statement on Form S-8 of our report dated July 17, 2003
relating to the financial statements of Plexus Vaccine Inc., which appears in
Amendment No. 1 to the Current Report on Form 8-K of SIGA Technologies, Inc.,
dated May 23, 2003 (filed on July 22, 2003).
/s/ PRICEWATERHOUSECOOPERS LLP
New York, New York
February 17, 2004
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