NUCRYST PHARMACEUTICALS CORP. STOCK OPTION AWARD AGREEMENT
Exhibit 10.52
GRANT of Options made as of April 10, 2008 (the “Grant Date”)
| TO: | Xxxxxx X. Xxxxxxx (the “Participant”) |
|
| BY: | NUCRYST Pharmaceuticals Corp. (the “Company”) |
WHEREAS, on December 21, 2005, the Board of Directors of the Company (the “Board”) approved
and adopted the Company’s 1998 Equity Incentive Plan (as amended) (the “Plan”) and the Plan was
subsequently approved by the Toronto Stock Exchange; and
WHEREAS, pursuant to the Plan, awards of Options may be granted to persons including
executives of the Company and members of the Board;
WHEREAS, the Participant and the Company are parties to an Employment Agreement, dated as of
August 21, 2007 (the “Employment Agreement”), whereby the Participant has agreed to serve, and the
Company has agreed to engage the Participant, as the Company’s President and CEO and as Chairman of
the Board, subject to the terms of the Employment Agreement; and
WHEREAS, pursuant to the Employment Agreement and by resolution of the Board made on April 10,
2008, the Board approved a grant of Options provided for herein to the Participant, such grant to
be effective the Grant Date and subject to the terms set forth herein;
NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties
hereto agree as follows:
1. Equity Incentive Plan
The grant by the Company to the Participant of Options by this Award Agreement is made pursuant to
the terms and conditions of the Plan. This Award Agreement and the terms and conditions of the
grant of Options are subject in all respects to the terms and conditions of the Plan, which is made
a part of this Award Agreement. The Participant, by acceptance of this Award Agreement, agrees to
be bound by the Plan (and any regulations that may be established under the Plan) and acknowledges
receipt of a copy of the Plan and this Award Agreement. Terms that are defined in the Plan and not
otherwise defined in this Award Agreement shall have the same meaning when used in this Award
Agreement as in the Plan.
2. Grant of Options
The Company grants to the Participant, effective the Grant Date, 250,000 options (defined in the
Plan and this Award Agreement as “Options” or individually as an “Option”) to purchase Common
Shares of the Company (which Common Shares, when purchased by the exercise of Options, are defined
as “Optioned Shares”), subject to the terms and conditions of this Award Agreement and the Plan.
The grant of Options herein is intended to be a grant of non-qualified stock options and shall not
be treated or construed as a grant of an “incentive stock option” as that term is used in Code
Section 422, or any successor provision thereof.
- 2 -
3. Option Price
The exercise price of each Option (which is defined in the Plan as the “Option Price”) is US$2.57.
4. Expiry Date
The Options shall terminate on, and may not be exercised in whole or in part after, 5:00 p.m.
(Edmonton, Alberta, Canada time) on April 10, 2018 (the “Expiry Date”), unless earlier terminated
in accordance with the terms of the Plan or this Award Agreement.
5. Vesting
Unless otherwise set forth in this Award Agreement, the Options shall vest and shall become
exercisable, if at all:
| (a) | as to 83,333 of the Options on the first anniversary of the date upon which the Company attains a Closing Price of the Common Shares of the Company of at least $2.00 per share on each Trading Day during a period of thirty (30) consecutive calendar days; |
| (b) | as to 83,333 of the Options on the first anniversary of the date upon which the Company attains a Closing Price of the Common Shares of the Company of at least $4.00 per share on each Trading Day during a period of thirty (30) consecutive calendar days; and |
| (c) | as to 83,334 of the Options on the first anniversary of the date upon which the Company attains a Closing Price of the Common Shares of the Company of at least $6.00 per share on each Trading Day during a period of thirty (30) consecutive calendar days. |
For the purposes of this Section 5, the “Closing Price” of the Common Shares on any applicable day
shall be the NASDAQ Official Closing Price of the Common Shares on the NASDAQ Global Market at 4:00
p.m. Eastern Time in New York City as reported by NASDAQ. “Trading Day” shall mean any day that
the NASDAQ Global Market is open for business and shares of the Common Shares are traded thereon.
6. Change of Control
Notwithstanding section 5 above, in the event that the Participant’s employment under the
Employment Agreement is terminated prior to the Expiry Date and within 120 days prior to, or within
12 months following, a Change of Control in a termination governed by Section 8(d), 8(e) or 8(g) of
the Employment Agreement (relating to terminations without cause or non-extension of the Employment
Agreement by the Company), the Options shall immediately become fully vested and exercisable as to
all the Optioned Shares and shall remain exercisable until the earlier of (x) one year following
the date on which the Participant’s employment under the Employment Agreement terminates (the
“Termination Date”) and (y) the Expiry Date. “Change of Control” shall have the meaning ascribed
to such term in the Employment Agreement.
7. Other Accelerated Vesting
Notwithstanding section 5 above, in the event that the Participant’s employment under the
Employment Agreement terminates prior to the Expiry Date due to his death or Disability (as such
term is defined in the Employment Agreement), or in the event that the Participant’s employment
under the Employment Agreement is terminated prior to the Expiry Date in a termination governed by
Section 8(d), 8(e) or 8(g) of the Employment Agreement (relating to terminations without cause or
non-extension of the Employment Agreement by the Company) but not governed by section 6 above, the
Options shall immediately become fully vested and exercisable to the extent that such Options were
then scheduled to
become vested or exercisable on or before the first anniversary of the Termination Date and shall
remain exercisable until the earlier of (x) one year following the Termination Date and (y) the
Expiry Date.
- 3 -
8. Termination
If the Participant ceases to be employed under the Employment Agreement before the Expiry Date,
then except as otherwise provided in sections 6 and 7 above, the vesting of all Options shall stop
immediately upon the Termination Date, and any Options that have vested as at the Termination Date
shall remain in force and can be exercised by the Participant in accordance with the following
provisions:
| (a) | If the Termination Date occurs for any reason other than the reasons described in sections 6 and 7 above, then the Participant will have 30 days after the Termination Date or until the Expiry Date (whichever is earlier) to exercise all or any portion of his vested Options. |
| (b) | If the Termination Date occurs by reason of death, Disability or any other reason described in section 6 or 7 above, then the Participant (or his personal legal representative) will have one year after the Termination Date or until the Expiry Date (whichever is earlier) to exercise all or any portion of his vested Options. |
At the end of the periods specified above or the Expiry Date, whichever is earlier, all of the
Options shall terminate and be of no further force or effect. “Termination Date” is defined in
section 6 above, and in no event shall any period during which the Participant is in receipt of or
entitled to be in receipt of severance pay serve to extend the Termination Date.
9. Method of Exercise of Options and Payment
The Options shall be exercised (in accordance with the provisions of this Award Agreement and the
Plan) from time to time by giving notice in writing to the Company and setting forth the number of
Options being exercised. Such notice shall be accompanied by cash or certified check payable to the
Company, or any other form of payment satisfactory to the Company, in the full amount of the
purchase price for the Optioned Shares being purchased (such purchase price being equal to the
number of Options being exercised times the Option Price) plus payment of any applicable federal,
state, provincial or local taxes, or any other taxes which the Company may be obligated to collect
as a result of the issue or transfer of Optioned Shares upon such exercise of the Options. The
Participant shall provide the Company with any additional documents that the Company may require.
As soon as reasonably practicable after the proper exercise of any Options, the Company shall issue
to the Participant a share certificate representing the Optioned Shares acquired.
10. Certain Adjustments
| (a) | If there is any change in the number or character of the Common Shares (through merger, consolidation, reorganization, recapitalization, stock split, stock dividend, or otherwise) prior to the Participant’s exercise of all of the Options, appropriate adjustments shall be made in the number or kind of securities subject to this Option, and/or in the exercise price or other terms and conditions applying to this Option, so as to avoid dilution or enlargement of the rights of the Participant under this Option and of the value represented by it. |
| (b) | If the Company is a party to a merger or reorganization with one or more other corporations, whether or not the Company is the surviving or resulting entity, or if the Company consolidates with or into one or more other corporations, or if the Company is liquidated or sells or otherwise disposes of substantially all of its assets to another corporation (hereinafter referred to as a “Transaction”), in any case while any Options remain outstanding, (i) after the effective date of the Transaction this Option shall remain outstanding and shall be exercisable in Common Shares or, if applicable, shares of such stock or other securities, cash or property as the holders of Common Shares received pursuant to the terms of the Transaction; and (ii) the Company’s Board may, in its sole discretion subject to the applicable provisions of Code section 409A, accelerate the time for exercise of this Option, so that from and after a date prior to the effective date of the Transaction this Option shall be exercisable in full. |
- 4 -
11. General Matters
| (a) | Options are not transferable or assignable. | ||
| (b) | This Award Agreement is not an employment contract and nothing in this Award Agreement shall be deemed to create in any way whatsoever any obligation on the Participant’s part to continue to work for the Company (or any subsidiary of the Company), or of the Company (or any subsidiary of the Company) to continue to employ the Participant. | ||
| (c) | The Participant acknowledges that the Company may be required to disclose to the securities regulatory authorities, the Exchange or other regulatory authorities duly authorized to make such request, the name, address and telephone number of the Participant and the number of Options granted. If required by applicable securities legislation, regulations, rules, policies or orders or by any securities commission, the Exchange or other regulatory authority, the Participant will, in a timely manner, execute, deliver, file and otherwise assist the Company in filing, such reports, undertakings, and other documents with respect to the Options as may be required or requested by the Company to enable the Company to comply with applicable securities legislation, regulations, rules, policies or orders or the requirements of any securities commission or other regulatory authority or the Exchange. | ||
| (d) | This Award Agreement, the Employment Agreement and the Plan constitute the entire agreement between the parties relating to the grant of Options to the Participant and supersede all prior communications, representations and negotiations in respect thereto. | ||
| (e) | For the grant of the Options to be effective, this Award Agreement must be executed by the Participant and returned to the Company. | ||
| (f) | This Award Agreement shall be governed by the laws of the Province of Alberta. The parties agree that any disputes under this Award Agreement shall be resolved by the courts of Alberta and each of the parties irrevocably attorn to the non-exclusive jurisdiction thereof with respect to all such matters and the transactions contemplated herein. | ||
| (g) | Time shall be of the essence of this Award Agreement. | ||
| (h) | The Participant acknowledges that neither the Plan nor this Award Agreement restricts the Company’s ability to conduct its business (including, but not limited to, such decisions as transactions with related parties, new product development efforts, cancellation of existing products, mergers and acquisitions, or corporate dissolution) regardless of the effect those decisions may have on the value of Options. | ||
| (i) | The Participant shall not have any of the rights and privileges of a shareholder of the Company by virtue of being granted Options. |
The Company and the Participant have executed this Award Agreement on the 16th day of April, 2008.
By:
|
/s/Xxxxx X. Xxxxxx | /s/Xxxxxx X. Xxxxxxx | ||
| Xxxxx X. Xxxxxx VP, General Counsel & Corporate Secretary |
Xxxxxx X. Xxxxxxx (Participant) |
