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Exhibit 4.17
STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of the 14 day of April, 1994 between DUSA
PHARMACEUTICALS, INC., a corporation incorporated under the laws of the State of
New Jersey (hereinafter referred to as the "Company") and XXXXX X. XXXXX, PHD,
c/o Guidelines, Inc., 00000 XX 0xx Xxxxxx, Xxxxx, Xxxxxxx, (hereinafter referred
to as the "Participants").
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 an option to him to
purchase shares of the Company's common stock ("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. $3.625;
"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 Participants pursuant to this
Agreement;
"Services" means consulting or other services provided by the Participants
to the Company pursuant to the Consulting Agreement between the
Participants and the Company; and
"Shares" means shares of common stock, without par value, of the Company.
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2.1 GRANT OF OPTION
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.
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 fifth
anniversary date hereof, being April 14, 1999 (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
providing to the Company 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 action taken 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 Section 2.7 hereof, the option granted hereunder shall vest in
the following manner:
(a) one-quarter of the option on the first anniversary of the day
immediately preceding the date hereof, being April 13, 1995;
(b) one-quarter of the option on the second anniversary of the day
immediately preceding the date hereof, being April 13, 1996;
(c) one-quarter of the option on the third anniversary of the day
immediately preceding the date hereof, being April 13, 1997; and
(d) one-quarter of the option on the fourth anniversary of the day
immediately preceding the date hereof, being April 13, 1998;
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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 Section 2.6 hereof, the option shall
continue to vest only so long as the Participant continues to provide
Services to the Company. Should the Participant ceases to provide such
Services ("Termination"), no further vesting of the option shall occur
unless the Board of Directors determines otherwise and the provisions of
Section 3.1 shall apply with respect to the exercise of the option to the
extent that it has vested and has not yet been exercised.
3.1 EXPIRATION ON TERMINATION
Subject to Section 4.1 hereof, upon Termination, such part of the option as
is then vested 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
In the event that on or prior to the Expiration Date, the Participant dies
or becomes totally and permanently disabled while providing Services to the
Company, this option, to the extent then vested but unexercised, may be
exercised by the Participant for a period up to six (6) months after the
death or disability of the Participant; provided, however, that in no event
may this option be exercised after the Expiration Date. Disability shall be
defined as in Section 22(e)(3) of the Internal Revenue Code of 1986, as
amended. 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
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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 TAKE-OVER BID
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, 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 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:
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If to the Company: DUSA Pharmaceuticals, Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxxxxxx, XX X0X 0X0
Attention: Dr. D. Xxxxxxxx Xxxxxxx
with a copy to: Xxxxxxx X. Xxxxxxx, Esq., Corporate Secretary
Lane and Xxxxxxx
000 Xxxxx 00 Xxxx
XX Xxx 0000
Xxxxxxxxxx, XX 00000
X.X.X.
If to the Participant: 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 the option and Shares
underlying the option have not been registered and that they are subject to
certain restrictions on transfer under the Securities Act of 1933 of the
United States, as amended, (the "1933 Act"); 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 the Shares issued
pursuant to the exercise of the option, 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".
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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
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Xxxxxx X. Xxxxxx, Treasurer Dr. D. Xxxxxxxx Xxxxxxx, President
Witness: PARTICIPANT
s/Xxxxx X. Bezach s/Xxxxx X. Xxxxx
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XXXXX X. XXXXX
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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, I hereby elect to purchase shares of Common Stock
of DUSA Pharmaceuticals, Inc. 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)
In full payment of the purchase price with respect to the Optioned Shares
exercised, the undersigned hereby tenders payment of $___________ by certified
check or official bank cashier's check or money order payable in Canadian
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
