KERYX BIOPHARMACEUTICALS, INC. SPECIAL NONSTATUTORY STOCK OPTION AGREEMENT
Exhibit
10.4
KERYX
BIOPHARMACEUTICALS, INC.
2007
CHIEF ACCOUNTING OFFICER INDUCEMENT STOCK OPTION PLAN
Optionee:
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Number
Shares Subject to Options: 100,000
Exercise
Price per Share: $11.11
Date
of
Grant: March
23, 2007
1. Grant
of Options.
Keryx
Biopharmaceuticals, Inc. (the “Company”) hereby grants to the Optionee named
above (the “Optionee”) a Non-statutory 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 “Options”).
2. Vesting
of Options.
(a)
Unless the exercisability of the Options
is accelerated in accordance with this Option Agreement, the Options shall
vest
(become exercisable) as follows:
|
Months
of Employment
|
Number
of Options Vesting
|
|
|
12
|
25,000
|
|
|
15
|
6,250
|
|
|
18
|
6,250
|
|
|
21
|
6,250
|
|
|
24
|
6,250
|
|
|
27
|
6,250
|
|
|
30
|
6,250
|
|
|
33
|
6,250
|
|
|
36
|
6,250
|
|
|
39
|
6,250
|
|
|
42
|
6,250
|
|
|
45
|
6,250
|
|
|
48
|
6,250
|
Notwithstanding
the above, the Options will vest and become immediately exercisable if Optionee
is terminated by the Company following a Change in Control.
3. Term
of Options and Limitations on Right to Exercise.
The
term
of the Options will be for a period of ten years, expiring at 5:00 p.m., Eastern
Time, on the tenth anniversary of the date of grant (the “Expiration Date”). To
the extent not previously exercised, the Options will lapse in accordance with
the following provisions, as applicable (but in no event later than the
Expiration Date):
(a) Three
(3)
months after the termination of Optionee’s service for any reason other than by
reason of Optionee’s (i) death, (ii) Disability, or (iii) termination by the
Company following a Change in Control (as such terms are defined
herein).
(b) Twenty-four
(24) months after the date of the termination if Optionee is terminated by
the
Company following a Change in Control (as such term is defined
herein).
(c) Twelve
(12) months after the date of the termination of Optionee’s service by reason of
Optionee’s Disability.
(d) Twelve
(12) months after the date of Optionee’s death, if Optionee dies while a service
provider, or during the three-month period described in subsection (a) above
or
during the twenty-four (24) month period described in subsection (b) above
or
during the twelve (12) month period described in (c) above and before the
Options otherwise lapse. Upon Optionee’s death, the Options may be exercised by
Optionee’s designated beneficiary.
If
the
Optionee or his beneficiary exercises the Options after termination of service,
the Options may be exercised only with respect to the shares that were otherwise
vested on the Optionee’s termination of service (including vesting by
acceleration in accordance with Section 2 of this Option
Agreement).
4. Exercise
of Options.
The
Options 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
the Options is not Optionee, such person shall also deliver with the notice
of
exercise appropriate proof of his or her right to exercise the Options. Payment
for such shares of Stock shall be in (a) cash, (b) shares of Stock previously
acquired by the purchaser, or (c) any combination thereof, for the number of
shares of Stock specified in such written notice. The value of surrendered
shares of Stock 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 Options 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. In such case, the date of exercise shall be
deemed to be the date on which notice of exercise is received by the Company
and
the exercise price shall be delivered to the Company by the settlement
date.
5. Beneficiary
Designation.
Optionee
may, in the manner determined by the Committee, designate a beneficiary to
exercise the rights of Optionee hereunder and to receive any distribution with
respect to the Options upon 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 Options 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.
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6. Withholding.
The
Company or any employer affiliate 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 Options. The withholding requirement may be
satisfied, in whole or in part, at the election of the Secretary, by withholding
from the Options shares 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 Secretary
establishes.
7. Limitation
of Rights.
The
Options do not confer to Optionee or Optionee’s beneficiary designated pursuant
to Section 5 any rights of a shareholder of the Company unless and until shares
of Stock are in fact issued to such person in connection with the exercise
of
the Options. Nothing in this Option Agreement shall interfere with or limit
in
any way the right of the Company or any affiliate to terminate Optionee’s
service at any time, nor confer upon Optionee any right to continue in the
service of the Company or any affiliate.
8. 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.
9. Restrictions
on Transfer and Pledge.
No
right
or interest of Optionee in the Options may be pledged, encumbered, or
hypothecated to or in favor of any party other than the Company or an affiliate,
or shall be subject to any lien, obligation, or liability of Optionee to any
other party other than the Company or an affiliate. The Options are 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 the Options under
the Option Agreement; provided, however, that the Committee may (but need not)
permit other transfers. The Options may be exercised during the lifetime of
Optionee only by Optionee or any permitted transferee.
10. Restrictions
on Issuance of Shares of Stock.
If
at any
time the Committee shall determine in its discretion, that registration, listing
or qualification of the shares of Stock covered by the Options upon any exchange
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 Options, the Options 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.
11. Successors.
This
Option Agreement shall be binding upon any successor of the Company, in
accordance with the terms of this Option Agreement.
12. 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.
13. 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.
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New
York,
NY 10022
Attn:
Secretary
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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.
14. Definitions.
“Board”
means the Board of Directors of the Company.
“Change
in Control” means and includes the occurrence of any one of the following
events:
| (i) |
the
acquisition by an individual, entity or group (within the meaning
of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as
amended, (the “1934 Act”)) (a “Person”) of beneficial ownership of any
capital stock of the Company if, after such acquisition, such Person
beneficially owns (within the meaning of Rule 13d-3 promulgated under
the
1934 Act) 30% or more of either (x) the then-outstanding shares of
common
stock of the Company (the "Outstanding Company Common Stock") or
(y) the
combined voting power of the then-outstanding securities of the Company
entitled to vote generally in the election of directors (the "Outstanding
Company Voting Securities"); provided, however, that for purposes
of this
subsection (i), the following acquisitions shall not constitute a
Change
in Control: (A) any acquisition directly from the Company (excluding
an
acquisition pursuant to the exercise, conversion or exchange of any
security exercisable for, convertible into or exchangeable for common
stock or voting securities of the Company, unless the Person exercising,
converting or exchanging such security acquired such security directly
from the Company or an underwriter or agent of the Company), (B)
any
acquisition by any employee benefit plan (or related trust) sponsored
or
maintained by the Company or any corporation controlled by the Company,
or
(C) any acquisition by any corporation pursuant to a Business Combination
(as defined below) which complies with clauses (x) and (y) of subsection
(iii) of this definition; or
|
| (ii) |
such
time as the Continuing Directors (as defined below) do not constitute
a
majority of the Board (or, if applicable, the Board of Directors
of a
successor corporation to the Company), where the term "Continuing
Director" means at any date a member of the Board (x) who was a member
of
the Board on the date of the initial adoption of this Option Agreement
by
the Board or (y) who was nominated or elected subsequent to such
date by
at least a majority of the directors who were Continuing Directors
at the
time of such nomination or election or whose election to the Board
was
recommended or endorsed by at least a majority of the directors who
were
Continuing Directors at the time of such nomination or election;
provided,
however, that there shall be excluded from this clause (y) any individual
whose initial assumption of office occurred as a result of an actual
or
threatened election contest with respect to the election or removal
of
directors or other actual or threatened solicitation of proxies or
consents, by or on behalf of a person other than the Board; or
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| (iii) |
the
consummation of a merger, consolidation, reorganization, recapitalization
or share exchange involving the Company or a sale or other disposition
of
all or substantially all of the assets of the Company (a "Business
Combination"), unless, immediately following such Business Combination,
each of the following two conditions is satisfied: (x) all or
substantially all of the individuals and entities who were the beneficial
owners of the Outstanding Company Common Stock and Outstanding Company
Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of the
then-outstanding shares of common stock and the combined voting power
of
the then-outstanding securities entitled to vote generally in the
election
of directors, respectively, of the resulting or acquiring corporation
in
such Business Combination (which shall include, without limitation,
a
corporation which as a result of such transaction owns the Company
or
substantially all of the Company's assets either directly or through
one
or more subsidiaries) (such resulting or acquiring corporation is
referred
to herein as the "Acquiring Corporation") in substantially the same
proportions as their ownership of the Outstanding Company Common
Stock and
Outstanding Company Voting Securities, respectively, immediately
prior to
such Business Combination and (y) no Person (excluding the Acquiring
Corporation or any employee benefit plan (or related trust) maintained
or
sponsored by the Company or by the Acquiring Corporation) beneficially
owns, directly or indirectly, 30% or more of the then-outstanding
shares
of common stock of the Acquiring Corporation, or of the combined
voting
power of the then-outstanding securities of such corporation entitled
to
vote generally in the election of directors (except to the extent
that
such ownership existed prior to the Business Combination).
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“Code”
means the Internal Revenue Code of 1986, as amended from time to
time,
and
includes a reference to the underlying final regulations.
“Committee”
means the Compensation Committee of the Board.
“Disability”
shall be deemed to have occurred if Optionee is unable, due to any physical
or
mental disease or condition, to perform his normal duties of employment for
120
consecutive days or 180 days in any twelve-month period.
“Fair
Market Value”, on any date, means (i) if shares of Stock are listed on a
securities exchange or are traded over the Nasdaq National Market, the closing
sales price on such exchange or over such system on such date or, in the absence
of reported sales on such date, the closing sales price on the immediately
preceding date on which sales were reported, or (ii) if the shares of Stock
are
not listed on a securities exchange or traded over the Nasdaq National Market,
the mean between the bid and offered prices as quoted by Nasdaq for such date,
provided that if it is determined that the fair market value is not properly
reflected by such Nasdaq quotations, Fair Market Value will be determined by
such other method as the Committee determines in good faith to be
reasonable.
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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, all as of the day and year first
above written.
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KERYX
BIOPHARMACEUTICALS, INC.
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| By: | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | |
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Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
Chief Executive Officer
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OPTIONEE:
/s/
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