Incentive Compensation Plan - Biopure Corp.
BIOPURE CORPORATION
INCENTIVE COMPENSATION PLAN
I. PURPOSE - The Incentive Compensation Plan (the "Plan") is designed to
attract and retain the services of qualified employees by furnishing incentives
to those who contribute significantly to the successful operation of the
business and property of Biopure Corporation.
II. DEFINITIONS - For the purposes of this Plan, the following terms shall
have the following meanings:
A. Company. Biopure Corporation ("Biopure") and its subsidiaries.
B. Compensation Committee. A committee (the Committee) to administer
this Plan, which shall consist of not less than three members appointed
from time to time by the Board of Directors of Biopure. The vote of a
majority of the Committee shall constitute action by the Committee. Action
by the Committee may be taken at any meeting of the Committee or by a
statement in writing signed by the members of the Committee, which may be
in counterparts.
C. Deferred Bonus Account. The Account described in Section III.
D. Determined Plan Amount. The aggregate amount to be awarded for a
Plan Year, subject to vesting, determined by the Board of Directors of
Biopure after the end of the Plan Year based on a review of economic
conditions in business and the nation, changes, if any, in the capital
structure of
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the Company, and other pertinent factors. The Determined Plan Amount may
be zero.
E. Employee. An individual who is on the active full-time salaried
or hourly payroll of the Company at the end of the fiscal year for which
he or she is a Participant.
F. Interest Increment. The annual interest on the Deferred Bonus
Account described in Section III.
G. Participant. An Employee who has been selected by the Committee
to receive incentive compensation awards for a Plan Year under this Plan.
No Employee shall have any right to be a Participant except in the
absolute discretion of the Committee. In making the selection, the
Committee shall give such consideration as the Committee may deem
advisable to the contribution of the Employee during the fiscal year to
the Company's success, his or her ability, efficiency and loyalty, the
prospects of his or her being promoted to a more important position in the
Company and such other matters as it shall deem desirable.
H. Plan Year. The fiscal year ended October 31.
I. Subsidiary. A corporation or other legal entity, more than 50% of
the voting stock of which is owned or controlled, directly or indirectly,
by Biopure.
III. INCENTIVE COMPENSATION DEFERRED BONUS - A. As soon as possible after the
close of the Plan Year, but in no event later than the March 15 following the
end of the Plan Year, the Company shall credit to an account (the "Deferred
Bonus Account") estab-
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lished on its books an amount equal to the Determined Plan Amount plus interest
on the pre-existing Deferred Bonus Account at an annual rate of 6 percent (the
"Interest Increment"). The Company shall, concurrently, notify each Participant
of the portion of the Determined Plan Amount that has been allocated to such
Participant. Notwithstanding the foregoing, the Determined Plan Amount for
fiscal 1992 may be established and awarded at any time prior to October 31,
1993, effective March 15, 1993.
B. Except in the case of a Participant's prior disability, retirement or
termination of employment, no portion of any award for a Plan Year will be paid
to the Participant until the April following the third anniversary of the date
on which the award was credited to his or her account. As early as practicable
in April and annually in each April thereafter (until the death, disability,
retirement or termination of employment of the Participant) there shall be
distributed to him or her in cash one-fifth of the amount credited for such Plan
Year and of undistributed earnings thereon through the immediately preceding
March 31, subject to applicable withholding and payroll tax requirements;
provided that the fifth payment in respect of the bonus for any Plan Year shall
consist of the remaining balance for such Plan Year with earnings through the
immediately preceding March 31.
C. The general funds of the Company shall be the sole source of payment
under the Plan, and the Company shall not have any obligation to establish any
separate fund or trust or other segregation of assets to provide for payments
under the Plan.
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Nothing contained in this Plan, and no action taken pursuant to its provisions,
shall create or be construed to create a trust of any kind, or a fiduciary
relationship, between the Company and a Participant or any other person. To the
extent any person acquires any rights to receive payments from the Company, such
rights shall be no greater than that of an unsecured creditor in bankruptcy.
IV. TERMINATION OF EMPLOYMENT - A. If employment is terminated for any
reason other than death, permanent disability, or retirement, then the
Participant shall forfeit all of his or her interest in the Deferred Bonus
Account and the Deferred Bonus Account shall be reduced by the amount of such
interest.
B. If a subsidiary of the Company ceases to be a subsidiary
otherwise than by merger into or consolidation with the Company, the employment
of a Participant employed by such subsidiary shall be deemed to have terminated
upon the occurrence of such event.
C. If employment is terminated as a result of a permanent disability
as determined by the Committee or retirement on normal retirement date, or on an
early retirement date with the approval of the Committee, the full amount in the
Deferred Bonus Account allocated to the Participant as of the close of business
on the March 31 following such termination shall become vested to the
ex-Participant and shall be distributed 20% in each of the next five years, each
installment to be paid as soon as practi-
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cable after March 31 of each year, together with prorated Interest Increments.
D. If an active Participant, or a disabled or retired Participant
who still has an interest in the Deferred Bonus Account, dies, the amount
allocated to such Participant as of the close of business on March 31 following
the Participant's death shall be paid to the Participant's legal representatives
as soon as practicable after said March 31. In the case of a disabled or retired
Participant, the amount in his or her account shall include the Interest
Increment to said March 31 as provided in the preceding paragraph.
V. EFFECTIVE DATE - This Plan is effective as of June 30, 1993, and the
first Plan Year is the year ended October 31, 1992.
VI. INTERPRETATIONS AND AMENDMENTS TO THE PLAN - The Board of Directors of
the Company shall have the right to modify this Plan from time to time or to
repeal this Plan entirely or to direct the discontinuance of awards, provided,
however, that in the event of discontinuance of the Plan, amounts previously
credited to the Deferred Bonus Account will continue to be distributed in
accordance with the Plan. The decision of the Committee with respect to any
questions as to the individuals selected to be Participants, and the
administration, operation and interpretation of this Plan shall be final,
conclusive and binding.
VII. MISCELLANEOUS - A. By acceptance of any compensation under this Plan,
the Participant agrees that it is special in-
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centive compensation and that it will not be taken into account in determining
the amount of any pension under any pension or retirement plan of the Company.
The Participant also agrees that any such award will not affect the amount of
any life insurance coverage available to his or her beneficiary under any
Company group life insurance plan.
B. Each person who is or shall have been a member of the Committee
or a member of the Board of Directors shall be indemnified and held harmless by
the Company against and from any and all loss, cost, liability or expenses that
may be imposed upon or reasonably incurred by him or her in connection with or
resulting from any claim, action, suit or proceeding to which he or she may be a
party or in which he or she may be involved by reason of any action taken or
failure to act under this Plan and against and from any and all amounts paid by
him or her in settlement thereof (with the Company's written approval) or paid
by him or her in satisfaction of a judgment in any such action, suit or
proceeding, except a judgment in favor of the Company based upon a finding of
his or her bad faith, subject, however, to the condition that upon the
institution of any claim, action, suit or proceeding against him or her, he or
she shall in writing give the Company an opportunity at its own expense, to
handle and defend the same before he or she undertakes to handle and defend it
on his or her own behalf. The foregoing right of indemnification shall not be
exclusive of any other right to which such person may be entitled under the
Company's Certificate of Incorporation
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or By-Laws, as a matter of law, or otherwise, or any power that the Company may
have to indemnify or hold harmless such person.
C. Each member of the Committee, each member of the Board of
Directors, and each officer and employee of the Company shall be fully justified
in relying or acting upon any report made by the Company's independent
accountants and upon any other information furnished in connection with this
Plan by any person or persons other than himself or herself. In no event shall
any person who is or shall have been a member of the Committee, a member of the
Board of Directors, or an officer or employee of the Company be liable for any
determination made or other action taken or any omission to act in reliance upon
any such report or information, or for any action (including the furnishing of
information) taken or any failure to act, if in good faith.
D. All calculations under this Plan shall be made to the nearest
dollar or to the nearest one-hundredth of a percent, as the case may be.
E. No Participant shall have any right to assign, transfer or pledge
all or any part of his or her interest in the Plan and any attempt to do so will
not be recognized by the Company. THE RIGHTS UNDER THE PLAN OF A PARTICIPANT OR
HIS OR HER ESTATE SHALL BE ONLY THOSE OF A GENERAL UNSECURED CREDITOR, AND MAY
NOT BE PAID IN FULL IF THE COMPANY HAS INSUFFICIENT FUNDS THEREFOR.
F. If an active Participant dies, or his or her employment is
terminated as a result of permanent disability, retirement on his or her normal
date, or on an early retirement
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date with the approval of the Committee and such event falls on a date between
November 1 and April 30, both inclusive, he or she shall not be entitled to an
incentive compensation bonus for the Plan Year then in progress, but if such
event falls on a date between May 1 and October 31 he or she shall be entitled
to a pro rata incentive compensation bonus for such Plan Year.
G. Nothing in this Plan shall confer upon any employee any right to
continue in the employ of the Company or interfere in any way with the right of
the Company to terminate his or her employment at any time. No entitlement to
payment under the Plan shall be deemed salary or compensation for the purpose of
computing benefits under any employee benefit plan or other arrangement of the
Company or its affiliates for the benefit of its employees. No Participant shall
have any claim to any payment until it is actually due to the Participant under
the Plan.
H. Captions preceding the sections hereof are inserted solely as a
matter of convenience and in no way define or limit the scope or intent of any
provision hereof.
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