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EXHIBIT 99.8
STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of the 2nd day of August, 1994 between DUSA
PHARMACEUTICALS, INC., a corporation incorporated under the laws of the State of
New Jersey (hereinafter referred to as the "Company") and XXXXXXX X. XXXXXXX,
ESQ., an individual residing in the State of New Jersey (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 U.S.$3.375;
"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 10,000 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 August 2, 2004, 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
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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 August 1, 1995;
(b) one-quarter of the option on the second anniversary of the
day immediately preceding the date hereof, being August 1,
1996;
(c) one-quarter of the option on the third anniversary of the day
immediately preceding the date hereof, being August 1, 1997;
and
(d) one-quarter of the option on the fourth anniversary of the day
immediately preceding the date hereof, being August 1, 1998;
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 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
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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 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
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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
If to the Participant: Xxxxxxx X. Xxxxxxx, Esq.
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
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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
s/ Xxxxxx X. Xxxxxx By: /s/ D. Xxxxxxxx Xxxxxxx
Xxxxxx X. Xxxxxx, Treasurer Dr. D. Xxxxxxxx Xxxxxxx, President
PARTICIPANT
/s/ Xxxxxxx X. Xxxxxxx
XXXXXXX X. XXXXXXX, ESQ.
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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)
The undersigned hereby represents and warrants to, and agrees with the
Company as follows:
(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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