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Exhibit 99.2
STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of the *nd day of *, 199* between DUSA
PHARMACEUTICALS, INC., a corporation incorporated under the laws of the State of
New Jersey (hereinafter referred to as the "Company") and *, an individual
residing in * (hereinafter referred to as the "Participant").
WITNESSETH:
WHEREAS, the Board of Directors of the Company has determined that in
consideration for services rendered on the Company's behalf and in order to
provide an inducement to the Participant to acquire a proprietary interest in
the Company, it is in the Company's best interest to grant him an option to
purchase Shares on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
expressed herein, it is agreed by and between the parties as follows:
1.1 DEFINITIONS
In this Agreement:
"Board of Directors" means the board of directors of the Company;
"Exercise Price" means *;
"Expiration Date" means 5:00 p.m. (Eastern Standard Time) on the later of
the dates provided in Section 2.2;
"Optioned Shares" means that number of Shares which are subject to the
option granted by the Company to the Participant pursuant to this
Agreement; and
"Shares" means shares of Common Stock in the share capital of the Company.
2.1 GRANT OF OPTION
Subject to shareholder approval, the Company hereby grants to the
Participant an option to purchase, in accordance with the vesting rights
outlined in Sections 2.6 and 2.7 hereof, up to * Shares for an amount per
Share equal to the Exercise Price, upon the terms and subject to the
conditions herein contained. This grant is automatic pursuant to the
Company's Restricted Stock Option Plan and Rule 16b-3(c)(2)(ii) of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended from time to time.
2.2 Subject to Sections 2.6, 2.7 and 3.1 hereof, the Participant shall have the
right, at any time prior to 5:00 p.m. (Eastern Standard Time) on the tenth
anniversary date hereof, being *,
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provided that if such day is not a day on which the Company is open for
business then on the first following day on which the Company is open for
business, to exercise this option for any number of the Optioned Shares up
to the maximum number of Shares specified in Section 2.1 above.
2.3 The option may be exercised by the Participant or by his executors or
personal representatives in the circumstances described in Section 4.1 by
giving to the Company at its registered office notice in writing in the
form of Schedule A hereto setting out the number of Optioned Shares with
respect to which the option is being exercised. The notice must be
accompanied by a certified check, official bank cashier's check or money
order in an amount equal to the Exercise Price multiplied by the number of
Shares requested and a duly executed copy of this Agreement.
2.4 The Company shall cause its registrar and transfer agent to deliver to the
Participant as soon as practicable after receipt of such notice and payment
a certificate or certificates registered in the name of the Participant or
as the Participant may direct for the number of Shares with respect to
which the option is duly exercised.
2.5 Nothing contained in this Agreement or done pursuant hereto shall obligate
the Participant to purchase and/or pay for, or the Company to issue, any
Shares except those Optioned Shares with respect to which the Participant
shall have duly exercised the option to purchase in accordance with this
Agreement.
2.6 Subject to Sections 2.1 and 2.7 hereof, the option granted hereunder shall
vest in the Participant in the following manner:
(a) one-quarter of the option on the first anniversary of the day
immediately preceding the date hereof, being *;
(b) one-quarter of the option on the second anniversary of the day
immediately preceding the date hereof, being *;
(c) one-quarter of the option on the third anniversary of the day
immediately preceding the date hereof, being *; and
(d) one-quarter of the option on the fourth anniversary of the day
immediately preceding the date hereof, being *;
and, except as provided by Section 6.1, the Participant shall only be
entitled to exercise this option in the amounts set out above and from and
after the dates so specified.
2.7 Notwithstanding anything contained in Sections 2.1 and 2.6 hereof, options
shall continue to vest in the Participant only so long as the Participant
shall continue to serve the Company as a director and/or officer. Should
the Participant cease to serve in such capacity (the "Termination"), no
further options shall vest or become exercisable, except at the discretion
of the Board of Directors, and the provisions of Section 3.1 shall apply
with respect to the exercise of those options which have already vested in
the Participant and have not yet been
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exercised. The Board of Directors shall be entitled to determine if and
when Termination has occurred with respect to the Participant.
3.1 EXPIRATION ON TERMINATION
Subject to Section 4.1 hereof, upon Termination, such part of the option as
is then exercisable but unexercised may be exercised by the Participant for
a period of ninety (90) days after Termination or such later date as the
Board of Directors may approve after which time this option shall expire;
provided, however, that in no event may this option be exercised after the
Expiration Date.
4.1 DEATH OR PERMANENT DISABILITY OF EMPLOYEE
In the event that on or prior to the Expiration Date, the Participant dies
or becomes totally and permanently disabled while serving the Company as a
director or officer, this option, to the extent then exercisable but
unexercised, may be exercised by the Participant for a period of six (6)
months after the death or disability of the Participant, notwithstanding
the Expiration Date. The Board of Directors shall be entitled to determine
if and when a Participant has become permanently disabled. For the purposes
of this provision only, reference to the Participant in this Agreement
shall be construed as including the executors or personal representatives
of a deceased Participant. In the event that this option is not exercised
within the period of six (6) months set out above, this option shall
expire.
5.1 SUBDIVISION, CONSOLIDATION OR REORGANIZATION
(a) In the event of any subdivision, redivision or change of the Shares of
the Company into a greater number of Shares at any time after the date of
this Agreement and prior to the Expiration Date of this option, the Company
shall deliver at the time of exercise of this option, but for the same
aggregate consideration payable therefor, such additional number of Shares
as the Participant would have been entitled to receive as a result of such
subdivision, redivision or change if on the record date thereof the
Participant had been the registered holder of the number of such Shares
with respect to which the option is later exercised.
(b) In the event of any consolidation or change of the Shares of the
Company into a lesser number of Shares at any time after the date of this
Agreement and prior to the expiration of this option, the Company shall
deliver at the time of exercise of this option, but for the same aggregate
consideration payable therefor, such reduced number of Shares, as the
Participant would have been entitled to receive upon such consolidation or
change if on the record date thereof the Participant had been the
registered holder of the number of such Shares with respect to which the
option is later exercised.
(c) If at any time after the date of this Agreement and prior to the
expiration of this option, the Shares shall be reclassified or reorganized,
otherwise than as specified in Sections 5.1(a) and (b), the Participant
shall be entitled to receive upon the exercise of this option and shall
accept in lieu of the number of Shares then subscribed for, but for the
same aggregate consideration payable therefor, the same aggregate number of
shares of the appropriate class
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of shares that the Participant would have been entitled to receive as a
result of such reclassification or other reorganization of Shares if on the
record date thereof the Participant had been the registered holder of the
number of such Shares with respect to which the option is later exercised.
6.1 TENDER OFFER
If an offeror makes an offer to purchase 50% or more of the outstanding
Shares to substantially all holders of the Shares or, if an insider of the
Company makes an offer to purchase Shares to substantially all holders of
the Shares, and the Board of Directors recommends acceptance of such offer
to the shareholders of the Company and the offer price is greater than the
Exercise Price, then this option, whether or not it has vested in whole or
in part in the Participant, shall become immediately exercisable. The
Participant shall be bound to exercise this option and to tender the
Optioned Shares issued upon exercise of this option into the offer upon
receipt of notice from the Company if the Company provides an interest-free
loan to the Participant in the amount of the Exercise Price for all of the
Optioned Shares issuable upon exercise of this option, subject to the
execution of a security agreement by the Participant in favor of the
Company securing repayment of the loan.
7.1 NO ASSIGNMENT
The Participant may not assign, transfer, pledge or hypothecate any of his
rights hereunder in any way (whether by operation of law or otherwise)
except by will or by the laws of succession on intestacy which may apply to
the estate of the Participant upon his death. The option granted herein
shall not be subject to execution, attachment or similar process. Upon any
attempt to assign, transfer, pledge, hypothecate or otherwise dispose of
this option contrary to the provisions hereof, or upon the levy of any
attachment or similar process upon the option granted herein, such option
shall immediately become void.
8.1 GENERAL
(a) Time shall be of the essence of this Agreement.
(b) In this Agreement, words importing the singular number include the
plural and vice versa and words importing the masculine gender include the
feminine and neuter genders.
(c) All notices which may be or are required to be given by one party to
the other party pursuant to this Agreement shall be in writing and shall be
mailed by first class or certified mail, return receipt requested, postage
prepaid, or transmitted by hand delivery as follows:
If to the Company: DUSA Pharmaceuticals, Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxxxxxx, XX X0X 0X0
XXXXXX
Attention: Dr. D. Xxxxxxxx Xxxxxxx
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If to the Participant: *
at the address of the Participant from
time to time in the records of the
Company,
or such other address as to which either party may from time to time notify
the other as aforesaid.
9.1 RESTRICTIONS ON TRANSFER
The Participant understands and acknowledges that he is subject to certain
restrictions on transfer under the Securities Act of 1933 of the United
States, as amended, (the "1933 Act") of the Shares issued pursuant to the
exercise of the option; such restrictions provide that the Shares may not
be sold without registration or exemption from registration under the 1933
Act; and, for purposes of the Securities Act (Ontario) (the "Ontario Act"),
the first trade of such Shares, other than a trade exempted by the Ontario
Act, will be a distribution unless the Company has been a reporting issuer
for at least twelve (12) months and the Company is not in default of any
requirement of the Ontario Act, disclosure has been made to the Ontario
Securities Commission of the exempt trade, no unusual effort is made to
prepare the market or create a demand for the Shares, and no extraordinary
commission or consideration is paid with respect to the trade, provided
that such first trade is not from the holdings of a so-called "control
block".
10.1 REPORTING REQUIREMENTS
The Participant understands and acknowledges that he may be subject to
certain reporting requirements upon his receipt and exercise of the option,
and in connection therewith, upon the receipt and exercise of the option,
the Participant agrees to timely file with the Securities and Exchange
Commission, the National Association of Securities Dealers, Inc., and any
appropriate Canadian securities regulatory authorities, the appropriate
documentation regarding his ownership of the Company's securities.
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto.
Attest: DUSA PHARMACEUTICALS, INC.,
a New Jersey corporation
By:
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Xxxxxxx X. Xxxxxxx, Secretary Dr. D. Xxxxxxxx Xxxxxxx, President
PARTICIPANT
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SCHEDULE A
SUBSCRIPTION FORM
To: The Secretary of DUSA Pharmaceuticals, Inc.
Pursuant to the terms and subject to the conditions set forth in the Stock
Option Agreement (the "Agreement") dated , between DUSA Pharmaceuticals,
Inc. and the undersigned, and Stock Options granted to the undersigned by such
Agreement, I hereby elect to purchase shares of Common Stock of DUSA
Pharmaceuticals, Inc. which were the subject of such Stock Options. I understand
that such purchase is subject to all the terms and conditions of the Agreement.
I request that the certificates for such shares of Common Stock shall be issued
in the name of:
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(please print or type name and address)
and be delivered to:
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(please print or type name and address)
(a) The Shares are being purchased for the undersigned's own account, for
investment purposes only, and not for the account of any other person, and not
with a view to distribution, assignment, or resale to others, or to
fractionalization in whole or in part and that the offering and sale of the
Shares is intended to be exempt from registration under the Securities Act of
1933 (the "Act"). In furtherance thereof, the undersigned represents, warrants
and agrees as follows: (i) no other person has or will have a direct or indirect
beneficial interest in such Share and the undersigned will not sell,
hypothecate, or otherwise transfer his shares except in accordance with the Act
and applicable state securities laws or unless in the opinion of counsel for the
Company, an exemption from the registration requirements of the Act and such
laws is available; and (ii) the Company is under no obligation to register the
Shares on behalf of the undersigned or to assist the undersigned in complying
with any exemption from registration.
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(b) The undersigned has such knowledge and experience in financial and
business matters that the undersigned is capable of evaluating the merits and
risks of investment in the Company and of making an informed investment
decision.
In full payment of the purchase price with respect to the Stock Options
exercised, the undersigned hereby tenders payment of $___________ by certified
check or official bank cashier's check or money order payable in Canadian or
United States currency to the order of DUSA Pharmaceuticals, Inc.
Dated: X
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(Signature)
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Name (Please Print)
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(Address)
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Taxpayer Identification Number
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