KERYX BIOPHARMACEUTICALS, INC.
KERYX
BIOPHARMACEUTICALS, INC.
2009
CEO INCENTIVE PLAN
Optionee:
Xxx
Xxxxxxx
Number
Shares Subject to Option: 600,000
Exercise
Price per Share: $0.35
Grant
Date: May 20,
2009
1. Grant of
Option. Keryx Biopharmaceuticals, Inc. (the “Company”) hereby
grants to the Optionee named above (the “Optionee”) a
non-qualified stock option to purchase, on the terms and conditions set forth in
this agreement (this “Option Agreement”),
the number of shares indicated above of the Company’s $0.001 par value common
stock (the “Stock”), at the
exercise price per share set forth above (the “Option”). The
Option is granted as an inducement award pursuant to Nasdaq Marketplace
Rule 4350(i)(1)(a)(iv) and is not granted under any established plan of the
Company. The Option is a non-qualified stock option that is not
intended to meet the requirements of an “incentive stock option” under Section
422 of the Code.
2. Definitions. The
following words and phrases shall have the following meanings:
“Board” shall mean the
Board of Directors of the Company.
“Cause” shall
have the meaning set forth in the Employment Agreement.
“Change in Control”
shall have the meaning set forth in the Employment Agreement.
“Code” means the
Internal Revenue Code of 1986, as amended from time to time. For
purposes of this Option Agreement, references to sections of the Code shall be
deemed to include references to any applicable regulations thereunder and any
successor or similar provision.
“Committee” means the
Company’s Compensation Committee.
“Disability” shall
have the meaning set forth in the Employment Agreement.
“Employment Agreement”
shall mean the employment agreement between Optionee and the Company, dated as
of September 14, 2009.
“Fair Market Value”
means, as of any date, the value of a share of the Company’s Stock determined as
follows: (a) if the Stock is then quoted on the Nasdaq National Market, its
closing price on the Nasdaq National Market on the date of determination as
reported in The Wall Street Journal; (b) if such Stock is publicly traded and is
then listed on a national securities exchange, its closing price on the date of
determination on the principal national securities exchange on which the Stock
is listed or admitted to trading as reported in The Wall Street Journal; (c) if
such Stock is publicly traded but is not quoted on the Nasdaq National Market
nor listed or admitted to trading on a national securities exchange, the average
of the closing bid and asked prices on the date of determination as reported in
The Wall Street Journal; or (d) if none of the foregoing is applicable, by the
Board in good faith and in compliance with Code Section 409A.
“Good Reason” shall
have the meaning set forth in the Employment Agreement.
3. Vesting of
Option. The Option shall vest (become exercisable) in four (4)
equal annual installments beginning on the first anniversary of the Grant Date,
provided that Optionee is employed by the Company on each such vesting
date. Notwithstanding the foregoing vesting schedule, the Option
shall become fully vested and exercisable upon (i) a Change in Control, unless
the Option is assumed by the surviving entity or otherwise equitably converted
or substituted in connection with the Change in Control, or (ii) if the Option
is assumed by the surviving entity or otherwise equitably converted or
substituted in connection with a Change in Control, the termination of
Optionee’s employment without Cause or Optionee’s resignation for Good Reason
within one year after the effective date of the Change in Control.
4. Period of Option and
Limitations on Right to Exercise. The term of the Option will
be for a period of ten years, expiring at 5:00 p.m., Eastern Time, on the tenth
anniversary of the Grant Date (the “Expiration
Date”). To the extent not previously exercised, the Option
will lapse prior to the Expiration Date upon the earliest to occur of the
following circumstances:
(a) Twelve
months after the termination of Optionee’s employment by reason of Optionee’s
death or Disability.
(b) Twelve
months after the termination of Optionee’s employment by Optionee for Good
Reason or by the Company other than for Cause or Disability.
(c) Twelve
months after the termination of Optionee’s employment by the Company upon the
normal expiration of the Employment Period (as defined in the Employment
Agreement).
(d) Immediately
upon the termination of Optionee’s employment by the Company for Cause or upon
Optionee’s resignation other than for Good Reason.
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The
Committee may, prior to the lapse of the Option under the circumstances
described in subparagraphs (a), (b), (c) or (d) above, extend the time to
exercise the Option as determined by the Committee in writing, but in no event
may the Option be extended beyond the Expiration Date. If Optionee
returns to employment with the Company during the designated post-termination
exercise period, then Optionee shall be restored to the status Optionee held
prior to such termination but no vesting credit will be earned for any period
Optionee was not employed by the Company. If Optionee or his or her
beneficiary exercises an Option after termination of employment, the Option may
be exercised only with respect to the Option shares that were otherwise vested
on the date of Optionee’s termination of employment, including Option shares
vested by acceleration under Section 3.
5. Exercise of
Option. The Option shall be exercised by (a) written notice
directed to the Secretary of the Company or his or her designee at the address
and in the form specified by the Secretary from time to time and (b) payment to
the Company in full for the shares of Stock subject to such exercise (unless the
exercise is a broker-assisted cashless exercise, as described
below). If the person exercising an Option is not Optionee, such
person shall also deliver with the notice of exercise appropriate proof of his
or her right to exercise the Option. Payment for such shares of Stock
shall be in (a) cash, (b) shares of Stock previously acquired by the purchaser,
(c) shares of Stock withheld from the Option, or (d) any combination thereof,
for the number of shares of Stock specified in such written
notice. The value of shares of Stock surrendered or withheld for this
purpose shall be the Fair Market Value as of the last trading day immediately
prior to the exercise date. To the extent permitted under Regulation
T of the Federal Reserve Board, and subject to applicable securities laws and
any limitations as may be applied from time to time by the Committee (which need
not be uniform), the Option may be exercised through a broker in a so-called
“cashless exercise” whereby the broker sells the Option shares on behalf of
Optionee and delivers cash sales proceeds to the Company in payment of the
exercise price.
6. Beneficiary
Designation. The Optionee may, in the manner determined by the
Committee, designate a beneficiary to exercise the rights of the Optionee
hereunder and to receive any distribution with respect to the Option upon the
Optionee’s death. A beneficiary, legal guardian, legal
representative, or other person claiming any rights hereunder is subject to all
terms and conditions of this Option Agreement and to any additional restrictions
deemed necessary or appropriate by the Committee. If no beneficiary
has been designated or survives Optionee, the Option may be exercised by the
legal representative of Optionee’s estate, and payment shall be made to
Optionee’s estate. Subject to the foregoing, a beneficiary
designation may be changed or revoked by Optionee at any time provided the
change or revocation is filed with the Company.
7. Withholding. The
Company has the authority and the right to deduct or withhold, or require
Optionee to remit to the employer, an amount sufficient to satisfy federal,
state, and local taxes (including Optionee’s FICA obligation) required by law to
be withheld with respect to any taxable event arising as a result of the
exercise of the Option. The Committee may permit in its sole
discretion the withholding requirement to be satisfied, in whole or in part, by
withholding from the Option shares of Stock having a Fair Market Value on the
date of withholding equal to the minimum amount (and not any greater amount)
required to be withheld for tax purposes, all in accordance with such procedures
as the Committee establishes. The obligations of the Company under
this Option Agreement will be conditional on such payment or arrangements, and
the Company will, to the extent permitted by law, have the right to deduct any
such taxes from any payment of any kind otherwise due to Optionee.
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8. Limitation of
Rights. The Option does not confer to the Optionee or the
Optionee’s personal representative any rights of a stockholder of the Company
unless and until shares of Stock are in fact issued to such person in connection
with the exercise of the Option. Nothing in this Option Agreement
shall interfere with or limit in any way the right of the Company to terminate
the Optionee’s service at any time, nor confer upon the Optionee any right to
continue in the service of the Company.
9. Stock
Reserve. The Company shall at all times during the term of
this Option Agreement reserve and keep available such number of shares of Stock
as will be sufficient to satisfy the requirements of this Option
Agreement.
10. Restrictions on Transfer and
Pledge. No right or interest of Optionee in the Option may be
pledged, encumbered, or hypothecated to or in favor of any party other than the
Company, or shall be subject to any lien, obligation, or liability of Optionee
to any other party other than the Company. The Option is not
assignable or transferable by Optionee other than by will or the laws of descent
and distribution or pursuant to a domestic relations order that would satisfy
Section 414(p)(1)(A) of the Code if such Section applied to this Option;
provided, however, that the Committee may (but need not) permit other
transfers. The Option may be exercised during the lifetime of
Optionee only by Optionee or any permitted transferee.
11. Restrictions on Issuance of
Shares. If at any time the Committee shall determine in its
discretion, that registration, listing or qualification of the shares of Stock
covered by the Option upon any securities exchange or similar self-regulatory
organization or under any foreign, federal, or local law or practice, or the
consent or approval of any governmental regulatory body, is necessary or
desirable as a condition to the exercise of the Option, the Option may not be
exercised in whole or in part unless and until such registration, listing,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Committee.
12. Changes in Capital
Structure.
(a) In
the event of a nonreciprocal transaction between the Company and its
stockholders that causes the per-share value of the Stock to change (including,
without limitation, any stock dividend, stock split, spin-off, rights offering,
or large nonrecurring cash dividend), the Committee shall make such adjustments
to the Option as it deems necessary, in its sole discretion, to prevent dilution
or enlargement of rights immediately resulting from such
transaction. Action by the Committee may include: (i) adjustment of
the number and kind of shares that may be delivered under the Option; (ii)
adjustment of the number and kind of shares subject to the Option; (iii)
adjustment of the exercise price of the Option; and (iv) any other adjustments
that the Committee determines to be equitable. Notwithstanding the
foregoing, the Committee shall not make any adjustments to the Option that would
constitute a modification or substitution of the stock right under Treas. Reg.
Sections 1.409A-1(b)(5)(v) that would be treated as the grant of a new stock
right or change in the form of payment for purposes of Code Section
409A. Without limiting the foregoing, in the event of a subdivision
of the outstanding Stock (stock-split), a declaration of a dividend payable in
Shares, or a combination or consolidation of the outstanding Stock into a lesser
number of Shares, the shares of Stock then subject to the Option shall
automatically, without the necessity for any additional action by the Committee,
be adjusted proportionately without any change in the aggregate purchase price
therefor.
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(b) Upon
the occurrence or in anticipation of any corporate event or transaction
involving the Company (including, without limitation, any merger,
reorganization, recapitalization, combination or exchange of shares, or any
transaction described in (a) above), the Committee may, in its sole discretion,
provide (i) that the Option will be settled in cash rather than Stock, (ii) that
the Option will become immediately vested and exercisable (in whole or in part)
and will expire after a designated period of time to the extent not then
exercised, (iii) that the Option will be assumed by another party to a
transaction or otherwise be equitably converted or substituted in connection
with such transaction, (iv) that the Option may be settled by payment in cash or
cash equivalents equal to the excess of the Fair Market Value of the underlying
Stock, as of a specified date associated with the transaction, over the exercise
price of the Option or (v) any combination of the
foregoing. stockholder
13. Successors. This
Option Agreement shall be binding upon any successor of the Company, in
accordance with the terms of this Option Agreement.
14. Severability. If
any one or more of the provisions contained in this Option Agreement are
invalid, illegal or unenforceable, the other provisions of this Option Agreement
will be construed and enforced as if the invalid, illegal or unenforceable
provision had never been included.
15. Notice. Notices
and communications under this Option Agreement must be in writing and either
personally delivered or sent by registered or certified United States mail,
return receipt requested, postage prepaid. Notices to the Company
must be addressed to Keryx Biopharmaceuticals, Inc., 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, XX 00000, Attn: Secretary, or any other address designated by the Company
in a written notice to the Optionee. Notices to the Optionee will be
directed to the address of the Optionee then currently on file with the Company,
or at any other address given by the Optionee in a written notice to the
Company.
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16. Amendment and
Modification. This Option Agreement may be amended or modified
only by a writing signed by both parties hereto.
17. Governing Law. This
Option Agreement is governed by and will be construed in accordance with the
laws of the State of Delaware.
(signatures
on following page)
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IN
WITNESS WHEREOF, Keryx Biopharmaceuticals, Inc., acting by and through its duly
authorized officers, has caused this Option Agreement to be executed, and the
Optionee has executed this Option Agreement.
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KERYX
BIOPHARMACEUTICALS, INC.:
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By:
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/s/ Xxxxx X. Xxxxxxxx | ||||
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Name:
Xxxxx X. Xxxxxxxx
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Title:
Chief Financial Officer
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Date:
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March 23, 2010 | ||||
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OPTIONEE:
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| /s/ Xxx Xxxxxxx |
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Xxx
Xxxxxxx
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Date:
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March 23, 2010 | ||||
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