Non-qualified Stock Option Agreement
This Incentive Stock Option Agreement (this
“Agreement”) is made and entered into as of February
12, 2018 by and between (i) Q BioMed Inc. (the
“Company”) and (ii) Xxxx Xxxxxxxxx (the
“Participant”).
Grant Date: Date of Agreement
Exercise Price per Share: $3.00
Number of Option Shares: 50,000
Expiration Date: Five years from the Grant Date
1.
Grant of Option.
1.1 Grant;
Type of Option. The Company
hereby grants to the Participant an option (the
“Option”) to purchase the total number of shares of
Common Stock of the Company equal to the number of Option Shares
set forth above, at the Exercise Price set forth
above.
1.2 Consideration. The grant of the
Option is compensation for the Participant agreeing to serve as a
Director of the Company for the twelve months following the date of
this Agreement (the “Term”).
2.
Exercise Period;
Vesting.
2.1 Vesting
Schedule. The Option will
become vested and exercisable as follows: (i) 12,500 will become
vested and exercisable on the three-month anniversary hereof, (ii)
12,500 will become vested and exercisable on the six-month
anniversary hereof, (iii) 12,500 will become vested and exercisable
on the nine-month anniversary and (iv) 12,500 will become vested
and exercisable on the twelve-month anniversary
hereof.
2.2 Expiration.
The Option will expire on the Expiration Date set forth above, or
earlier as provided in this Agreement.
2.3 Restriction
on Exercise/Sale. The
Participant agrees that if any Options hereunder are exercised
within six months of vesting, the Participant shall not dispose of
the shares underlying those Options within six months of the date
that the Options vested and that the Company may place a
restrictive legend to that effect on any certificates or book entry
representing those underlying shares. The Participant further
agrees that it shall not sell or otherwise transfer any Options
granted hereunder (or the shares of common stock underlying such
Options) within six months of such Option
vesting.
3.
Termination of
Directorship.
3.1 Termination
for Reasons Other Than Disability. If (i) the Participant resigns his directorship
during the Term for any reason other than disability of the
Participant or (ii) the Participant is not re-elected by the
shareholders of the Company by an action of the Company’s
shareholders (whether by meeting or written consent) for which his
election would be required to continue to serve as a Director, the
Participant may exercise the vested portion of the Option, but only
within three months following the date of such resignation, and all
unvested Options shall terminate such that they never vest as of
the date, as applicable, of such resignation or that such
shareholder action becomes effective. “Disability”
is defined as a physical or mental condition as a result of which
the Participant is unable to perform the primary duties,
responsibilities and functions of a member of the Company’s
Board of Directors for a period of at least 90
days.
3.2 Termination
by Removal. If the Participant
is removed as a Director of the Corporation by an action of the
Company’s shareholders (whether by meeting or written
consent), the Options (whether vested or unvested) shall
immediately terminate and cease to be
exercisable.
3.3 Termination
due to Disability. If the
Participant resigns during the Term because he is no longer able to
serve as a Director as a result of the Participant’s
disability, the Participant may exercise the vested portion of the
Option, but only within such period of time ending the date 12
months following the termination of such resignation. All unvested
portions shall terminate such that they never vest as of the date
of such resignation.
3.4 Termination
due to Death. If the
Participant dies during the Term, the vested portion of the Option
may be exercised by the Participant’s estate, by a person who
acquired the right to exercise the Option by bequest or inheritance
or by the person designated to exercise the Option upon the
Participant’s death, but only within 12 months following the
Participant’s death. All unvested portions shall terminate
such that they never vest as of the date of the Participant’s
death.
4.
Manner of
Exercise.
4.1 Election
to Exercise. To exercise the
Option, the Participant (or in the case of exercise after the
Participant’s death or incapacity, the Participant’s
executor, administrator, heir or legatee, as the case may be) must
deliver to the Company a notice of intent to exercise (the
“Exercise
Notice”), which shall set
forth, inter alia:
(a)
the
Participant’s election to exercise the Option;
(b)
the number of
shares of Common Stock being purchased;
(c)
any restrictions
imposed on the shares; and
(d)
any
representations, warranties and agreements regarding the
Participant’s investment intent and access to information as
may be required by the Company to comply with applicable securities
laws.
If someone other than the Participant exercises the Option, then
such person must submit documentation reasonably acceptable to the
Company verifying that such person has the legal right to exercise
the Option.
4.2 Payment
of Exercise Price. The entire
Exercise Price of the Option shall be payable in full at the time
of exercise to the extent permitted by applicable statutes and
regulations, either:
(a)
in cash or by
certified or bank check at the time the Option is
exercised;
(b)
if the
Company’s common stock is listed on a national securities
exchange or the OTCQB, by reduction in the number of shares
otherwise deliverable upon exercise of such Option with a Fair
Market Value (which shall equal the average of the closing price
for the five trading days prior to the date of the Exercise Notice)
to the date of the equal to the aggregate Exercise Price at the
time of exercise; or
(c)
by any combination
of the foregoing methods; or
4.3 Withholding.
Prior to the issuance of shares upon the exercise of the Option,
the Participant must make arrangements satisfactory to the Company
to pay or provide for any applicable federal, state and local
withholding obligations of the Company.
4.4 Issuance
of Shares. Provided that the
Exercise Notice and payment are in form and substance satisfactory
to the Company, the Company shall issue the shares of Common Stock
registered in the name of the Participant, the Participant’s
authorized assignee, or the Participant’s legal
representative, and shall deliver certificates representing the
shares with the appropriate legends affixed
thereto.
5. No Right to Continued Employment; No
Rights as Shareholder. This Agreement shall not confer upon
the Participant any right to be retained in any position, as an
Employee or Consultant of the Company. The Participant shall not
have any rights as a shareholder with respect to any shares of
Common Stock subject to the Option prior to the date of exercise of
the Option.
6. Transferability. The Option is
not transferable by the Participant other than to a designated
beneficiary upon the Participant’s death or by will or the
laws of descent and distribution, and is exercisable during the
Participant’s lifetime only by him or her. No assignment or
transfer of the Option, or the rights represented thereby, whether
voluntary or involuntary, by operation of law or otherwise (except
to a designated beneficiary upon death by will or the laws of
descent or distribution) will vest in the assignee or transferee
any interest or right herein whatsoever, but immediately upon such
assignment or transfer the Option will terminate and become of no
further effect.
7. Tax Liability and Withholding.
Notwithstanding any action the Company takes with respect to any or
all income tax, social insurance, payroll tax, or other tax-related
withholding (”Tax-Related
Items”), the ultimate liability for all Tax-Related
Items is and remains the Participant’s responsibility and the
Company (a) makes no representation or undertakings regarding the
treatment of any Tax-Related Items in connection with the grant,
vesting, or exercise of the Option or the subsequent sale of any
shares acquired on exercise; and (b) does not commit to structure
the Option to reduce or eliminate the Participant’s liability
for Tax-Related Items.
8. Compliance with Law. The
exercise of the Option and the issuance and transfer of shares of
Common Stock shall be subject to compliance by the Company and the
Participant with all applicable requirements of federal and state
securities laws and with all applicable requirements of any stock
exchange on which the Company’s shares of Common Stock may be
listed. No shares of Common Stock shall be issued pursuant to this
Option unless and until any then applicable requirements of state
or federal laws and regulatory agencies have been fully complied
with to the satisfaction of the Company and its counsel. The
Participant understands that the Company is under no obligation to
register the shares of Common Stock with the Securities and
Exchange Commission, any state securities commission or any stock
exchange to effect such compliance.
9. Notices. Any notice required to
be delivered to the Company under this Agreement shall be in
writing and addressed to the President of the Company at the
Company’s principal corporate offices. Any notice required to
be delivered to the Participant under this Agreement shall be in
writing and addressed to the Participant at the Participant’s
address as shown in the records of the Company. Either party may
designate another address in writing (or by such other method
approved by the Company) from time to time.
10. Governing Law. This Agreement
will be construed and interpreted in accordance with the laws of
the State of New York without regard to conflict of law principles.
Any disagreements hereunder shall exclusively be brought in the
state and federal courts located in New York County, New York. Each
party submits to the jurisdiction of such courts.
11. Expense Reimbursement. The
Company agrees to reimburse Xx. Xxxxxxxxx for all reasonable
expenses that he incurs solely as a result of his acting as a
Director of the Company, provided that any expense (or series of
related expenses) that exceeds $500 shall be approved by an
executive officer of the Company prior to being
incurred.
12. Severability. The invalidity or
unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of
this Agreement, and each provision of this Agreement shall be
severable and enforceable to the extent permitted by
law.
13. Counterparts. This Agreement
may be executed in counterparts, each of which shall be deemed an
original but all of which together will constitute one and the same
instrument. Counterpart signature pages to this Agreement
transmitted by facsimile transmission, by electronic mail in
portable document format (.pdf), or by any other electronic means
intended to preserve the original graphic and pictorial appearance
of a document, will have the same effect as physical delivery of
the paper document bearing an original signature.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
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By: /s/ Xxxxxxx Xxxxxxxxxx
Name: Xxxxxxx Xxxxxxxxxx
Title: Chief Legal Officer
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XXXX XXXXXXXXX
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By: /s/ Xxxx Xxxxxxxxx
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