As filed with the Securities and Exchange Commission on June 29, 2016.
Registration No.
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
EGALET CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware |
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600 Lee Road, Suite 100 |
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46-3575334 |
(State of Incorporation) |
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(Address of principal executive offices) |
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(I.R.S. Employer |
EGALET CORPORATION
AMENDED AND RESTATED 2013 STOCK-BASED INCENTIVE COMPENSATION PLAN
(Full Title of the Plan)
Robert S. Radie
President and Chief Executive Officer
Egalet Corporation
600 Lee Road
Suite 100
Wayne, PA 19087
(Name and Address of Agent for Service)
(610) 833-4200
(Telephone Number, Including Area Code, of Agent for Service)
With a Copy to:
David S. Rosenthal, Esq.
Dechert LLP
1095 Avenue of the Americas
New York, New York 10036
(212) 698-3500
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
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Large accelerated filer o |
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Accelerated filer x |
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Non-accelerated filer o |
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Smaller reporting company o |
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(Do not check if a smaller reporting company) |
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CALCULATION OF REGISTRATION FEE
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Title Of |
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Amount |
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Proposed |
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Proposed |
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Amount Of |
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Common Stock, par value $0.001 per share |
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2,600,000 |
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$ |
4.575 |
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11,895,000 |
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1,197.83 |
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(1) This Registration Statement relates to 2,600,000 shares of common stock of Egalet Corporation (the Registrant) not previously registered and available for issuance under the Registrants Amended and Restated 2013 Stock-Based Incentive Compensation Plan (the Plan). The Registrant has previously registered 3,680,000 shares of common stock of the Registrant for issuance under the Plan.
(2) The Proposed Maximum Offering Price Per Share and Proposed Maximum Aggregate Offering Price have been calculated solely for purposes of determining the applicable registration fee under Rule 457(c) and (h) of the Securities Act on the basis of the average of the high and low selling price per share of common stock of the Registrant on June 27, 2016, as reported by the NASDAQ Stock Market. Pursuant to Rule 416 of the Securities Act, this registration statement shall also cover any additional shares of the Registrants common stock which become issuable under the Plan pursuant to this registration statement by reason of any stock dividend, stock split, recapitalization or any other similar transaction effected without the receipt of consideration which results in an increase in the number of the Registrants outstanding shares of common stock.
EXPLANATORY NOTE
On April 1, 2014, Egalet Corporation (the Company or the Registrant) registered 1,680,000 shares of the Companys common stock, par value $0.001 per share (the Common Stock), to be offered or sold to participants under the Companys Amended and Restated 2013 Stock-Based Incentive Compensation Plan (the Plan), pursuant to its Registration Statement on Form S-8 (File No. 333-194946) (the First Registration Statement). On June 15, 2015, the Company registered an additional 2,000,000 shares of the Companys Common Stock to be offered or sold to participants under the Plan (File No. 333-204987) (the Second Registration Statement, and together with the First Registration Statement, the Previous Registration Statements). On June 15, 2016, the holders of a majority of the Companys outstanding common stock present in person or represented by proxy and entitled to vote on the matter approved an amendment to the Plan to increase the number of shares of Common Stock available for issuance under the Plan by an additional 2,600,000 shares. This Registration Statement on Form S-8 registers the 2,600,000 additional shares of Common Stock that may be offered or sold pursuant to the Plan. Accordingly, the contents of the Previous Registration Statements, including periodic reports that the Company filed with the Securities and Exchange Commission (the Commission) pursuant to the Securities Exchange Act of 1934, as amended (the Exchange Act), after the Previous Registration Statements are incorporated by reference into this Registration Statement pursuant to General Instruction E of Form S-8.
PART I
INFORMATION REQUIRED IN SECTION 10(a) PROSPECTUS
Information required in Part I of Form S-8 to be contained in a prospectus meeting the requirements of Section 10(a) of the Securities Act of 1933, as amended (the Securities Act) is not required to be filed with the Commission and is omitted from this Registration Statement in accordance with the explanatory note to Part I of Form S-8 and Rule 428 under the Securities Act. The documents containing the information specified in Part I of Form S-8 will be sent or given to directors, officers, employees and consultants as specified by Rule 428(b)(1) of the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The Registrant is registering additional securities under the Plan covered hereby for which the Previous Registration Statements are currently effective. This registration statement is filed solely to register an additional 2,600,000 shares of the Companys Common Stock for issuance under the Plan. Pursuant to General Instruction E to Form S-8, this Registration Statement hereby incorporates by reference the contents of the Previous Registration Statements, including periodic reports that the Company filed with the Commission pursuant to the Exchange Act.
Item 8. Exhibits.
See Exhibit Index.
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Wayne, Commonwealth of Pennsylvania, on this 29th day of June, 2016.
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Egalet Corporation | |
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By: |
/s/ Robert Radie |
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Robert Radie |
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President and Chief Executive Officer |
POWER OF ATTORNEY
KNOW TO ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Robert S. Radie and Stan Musial, each and individually, his or her attorneys-in-fact, with full power of substitution and resubstitution, for him or her in any and all capacities, to sign any or all amendments or post-effective amendments to this Registration Statement and to file the same with the Securities and Exchange Commission, granting unto each of such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary in connection with such matters and hereby ratifying and confirming all that each such attorney-in-fact, or his agent or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration Statement on Form S-8 has been signed by the following persons in the capacities indicated on the dates indicated.
Signature |
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Title |
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Date |
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/s/ Robert Radie |
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President and Chief Executive Officer (Principal Executive Officer); Director |
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June 29, 2016 |
Robert Radie |
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/s/ Stan Musial |
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Chief Financial Officer (Principal Financial Officer) |
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June 29, 2016 |
Stan Musial |
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/s/ Barbara Carlin |
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Chief Accounting Officer (Principal Accounting Officer) |
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June 29, 2016 |
Barbara Carlin |
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/s/ Timothy Walbert |
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Chairman of the Board |
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June 29, 2016 |
Timothy Walbert |
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/s/ Nicholas C. Nicolaides |
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Director |
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June 29, 2016 |
Nicholas C. Nicolaides |
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/s/ John E. Osborn |
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Director |
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June 29, 2016 |
John E. Osborn |
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/s/ Jean-Francois Formela |
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Director |
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June 29, 2016 |
Jean-Francois Formela |
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/s/ Gregory Weaver |
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Director |
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June 29, 2016 |
Gregory Weaver |
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EXHIBIT INDEX
Exhibit Number |
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Description |
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4.1* |
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Third Amended and Restated Certificate of Incorporation of Egalet Corporation (incorporated by reference to Exhibit 3.1 to the Registrants current report on Form 10-Q filed with the Commission August 7, 2015). |
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4.2* |
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Amended and Restated Bylaws of Egalet Corporation (incorporated by reference to Exhibit 3.2 to the Registrants current report on Form 8-K filed with the Commission on February 11, 2014). |
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4.3* |
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The Indenture, dated April 7, 2015, by and between Eaglet Corporation and The Bank of New York Mellon (incorporated by reference to Exhibit 4.1 of the Registrants Form 8-K filed with the Commission on April 8, 2015 (File No. 001-36295)). |
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5.1 |
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Opinion of Dechert LLP (counsel to the Registrant) as to the legality of the securities being registered (filed herewith). |
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10.1 |
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Amended and Restated Egalet Corporation 2013 Stock-Based Incentive Plan and forms of agreement thereunder (filed herewith). |
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10.2 |
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Form of Egalet Corporation Option Award Agreement (filed herewith). |
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10.3 |
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Form of Egalet Corporation Restricted Stock Award Agreement (filed herewith). |
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23.1 |
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Consent of Grant Thornton LLP (filed herewith). |
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23.2 |
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Consent of Dechert LLP (included in Exhibit 5.1 filed herewith). |
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23.3 |
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Consent of Ernst & Young LLP (filed herewith). |
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24.1 |
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Power of Attorney (contained on signature page hereto). |
* Previously filed and incorporated herein by reference.
Exhibit 5.1
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1095 Avenue of the Americas |
June 29, 2016
Egalet Corporation
600 Lee Road., Suite 100
Wayne, PA 19087
Re: REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We have acted as counsel to Egalet Corporation, a Delaware corporation (the Company), in connection with the filing with the Securities and Exchange Commission (the Commission) of a Registration Statement on Form S-8 (the Registration Statement) for the purpose of registering under the Securities Act of 1933, as amended (the Securities Act), 2,600,000 shares of its common stock, par value $0.001 per share (the Shares), issuable under the Amended and Restated Egalet Corporation 2013 Equity Incentive Plan (the Plan). This opinion is being furnished to the Company in connection with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act, and no opinion is expressed herein as to any matter pertaining to the contents of the Registration Statement other than as expressly stated herein with respect to the Shares.
As your counsel, we have examined such documents and such matters of fact and law that we have deemed necessary for the purpose of rendering the opinion expressed herein.
In our examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as original documents, and the conformity to original documents of all documents submitted to us as copies, the legal capacity of natural persons who are signatories to the documents examined by us and the legal power and authority of all persons signing on behalf of parties (other than the Company) to all documents.
Subject to the foregoing and the other matters set forth herein, it is our opinion that, as of the date hereof, when the Shares shall have been duly registered on the books of the transfer agent and registrar therefor in the name or on behalf of the holders and have been issued by the Company against payment therefor (not less than par value) in the circumstances contemplated by the Plan, assuming in each case that the individual issuances, grants or awards under the Plan are duly authorized by all necessary corporate action and duly issued, granted or awarded and exercised in accordance with the requirements of law and the Plan (and the agreements and awards duly adopted thereunder and in accordance therewith), the issue and sale of the Shares will have been duly authorized by all necessary corporate action of the Company, and the Shares will be validly issued, fully paid and non-assessable.
We are members of the Bar of the State of New York and the foregoing opinion is limited to the General Corporation Law of the State of Delaware.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. In giving this consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission thereunder.
Very truly yours, |
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/s/ Dechert LLP |
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Exhibit 10.1
EGALET CORPORATION
2013 STOCK-BASED
INCENTIVE COMPENSATION PLAN
(as amended and restated effective June 15, 2016)
EGALET CORPORATION
2013 STOCK-BASED
INCENTIVE COMPENSATION PLAN
(as amended and restated effective June 15, 2016)
1. Purpose of the Plan
The purpose of the Plan is to assist the Company, its Subsidiaries and Affiliates in attracting and retaining valued Employees, Consultants and Non-Employee Directors by offering them a greater stake in the Companys success and a closer identity with it, and to encourage ownership of the Companys stock by such Employees, Consultants and Non-Employee Directors.
2. Definitions
As used herein, the following definitions shall apply:
2.1. Affiliate means any entity other than the Subsidiaries in which the Company has a substantial direct or indirect equity interest, as determined by the Board.
2.2. Award means a grant of Common Stock, Deferred Stock, Restricted Stock, Restricted Stock Units, Options or SARs under the Plan.
2.3. Award Agreement means the written agreement, instrument or document evidencing an Award, including any such item in an electronic medium.
2.4. Board means the Board of Directors of the Company.
2.5. Change in Control means, after the Effective Date (and not including the public offering of the Company, which shall not be treated as a Change in Control for purposes of the Plan), any of the following events:
(a) a person (as such term in used in Sections 13(d) and 14(d) of the 1934 Act), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, is or becomes the beneficial owner (as defined in Rule 13D-3 under the 1934 Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the combined voting power of the Companys then outstanding securities; or
(b) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in Section 2.5(a), Section 2.5(c) or Section 2.5(d) hereof) whose election by the Board or nomination for election by the Companys stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously approved, cease for any reason to constitute a majority thereof; or
(c) the Company merges or consolidates with any other corporation, other than in a merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least fifty percent (50%) of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or
(d) the complete liquidation of the Company or the sale or other disposition of all or substantially all of the Companys assets.
(e) Notwithstanding anything in the Plan or an Award Agreement to the contrary, if an Award is subject to Section 409A of the Code, no event that, but for this Section, would be a Change in Control as defined in the Plan or the Award Agreement, as applicable, shall be a Change in Control unless such event is also a change in control event as defined in Section 409A of the Code.
2.6. Code means the Internal Revenue Code of 1986, as amended, and the Treasury regulations promulgated thereunder. A reference to any provision of the Code or the Treasury regulations promulgated thereunder shall include reference to any successor provision of the Code or the Treasury regulations.
2.7. Committee means the committee designated by the Board to administer the Plan under Section 4. The Committee shall have at least two members and each member of the Committee shall be a Non-Employee Director, an Outside Director and an independent director within the meaning of Rule 5605(a)(2) of the NASDAQ Stock Market Equity Rules.
2.8. Common Stock means the common stock of the Company, par value $0.001 per share, or such other class or kind of shares or other securities resulting from the application of Section 13.
2.9. Company means Egalet Corporation, a Delaware corporation, or any successor corporation.
2.10. Consultant means an individual who renders services to the Company, a Subsidiary or an Affiliate as a consultant, advisor or independent contractor.
2.11. Deferral Period means the period during which the receipt of a Deferred Stock Award under Section 7 will be deferred.
2.12. Deferred Stock means Common Stock to be delivered at the end of a Deferral Period and awarded by the Committee under Section 7.
2.13. Effective Date has the meaning set forth in Section 25.
2.14. Employee means an individual, including an officer or director, who is employed by the Company, a Subsidiary or an Affiliate.
2.15. Fair Market Value means the fair market value of Common Stock determined by such methods or procedures as shall be established from time to time by the Committee in good faith and in accordance with applicable law. Unless otherwise determined by the Committee, the Fair Market Value of Common Stock shall mean, on any given date, the closing price of a share of Common Stock on the principal national securities exchange on which the Common Stock is listed on such date or, if Common Stock was not traded on such date, on the last preceding day on which the Common Stock was traded.
2.16. Incentive Stock Option means an Option or a portion thereof intended to meet the requirements of an incentive stock option as defined in Section 422 of the Code and designated as an Incentive Stock Option in the applicable Award Agreement.
2.17. 1934 Act means the Securities Exchange Act of 1934, as amended, and the rules promulgated thereunder. A reference to any provision of the 1934 Act or rule promulgated under the 1934 Act shall include reference to any successor provision or rule.
2.18. Non-Employee Director means a member of the Board who meets the definition of a non-employee director under Rule 16b-3(b)(3) promulgated by the Securities and Exchange Commission under the 1934 Act.
2.19. Non-Qualified Option means an Option or a portion thereof not intended to be an Incentive Stock Option and designated as a Non-Qualified Option in the applicable Award Agreement.
2.20. Option means a right to purchase a specified number of shares of Common Stock at a specified price awarded by the Committee under Section 6 of the Plan.
2.21. Outside Director means a member of the Board who meets the definition of an outside director under Section 162(m) of the Code.
2.22. Participant means any Employee, Consultant or Non-Employee Director who receives an Award.
2.23. Performance Cycle means the period selected by the Committee during which the performance of the Company, any Subsidiary, any Affiliate or any business unit thereof, or any individual is measured for the purpose of determining the extent to which a Performance Goal has been achieved.
2.24. Performance Goal means a goal that must be met by the end of a period specified by the Committee (but that is substantially uncertain of being met before the grant of the Award) and that, in the case of Qualified Performance-Based Awards, must be based upon any one or more of the following as they relate to the Company, its Subsidiaries or Affiliates (or any business unit or department thereof): (i) stock price, (ii) market share, (iii) sales, (iv) earnings per share, (v) diluted earnings per share, (vi) diluted net income per share,
(vii) return on shareholder equity, (viii) costs, (ix) cash flow, (x) return on total assets, (xi) return on capital or invested capital, (xii) return on net assets, (xiii) operating income, (xiv) net income, (xv) earnings (or net income) before interest, taxes, depreciation and amortization, (xvi) improvements in capital structure, (xvii) gross, operating or other margins, (xviii) budget and expense management, (xix) productivity ratios, (xx) working capital targets, (xxi) enterprise value, (xxii) safety record, (xxiii) completion of acquisitions or business expansion of the company, our subsidiaries or affiliates (or any business unit or department thereof) (xxiv) economic value added or other value added measurements, (xxv) expenses targets, (xxvi) operating efficiency, (xxvii) regulatory body approvals for commercialization of products, (xxviii) implementation or completion of critical projects or related milestones (including, without limitation, milestones such as clinical trial enrollment targets, commencement of phases of clinical trials and completion of phases of clinical trials) or (xxix) partnering or similar transactions, in all cases, whether measured absolutely or relative to an index or peer group. The Committee shall have discretion to determine the specific targets with respect to each of these categories of Performance Goals. Performance Goals with respect to Awards that are not intended to be Qualified Performance-Based Awards may be based on one or more of the preceding measures or any other measure that the Committee may determine in its sole discretion. If the Committee determines that a change in the business, operations, corporate structure or capital structure of the Company, or the manner in which it conducts its business, or other events or circumstances render the Performance Goals unsuitable, the Committee may modify such Performance Goals or the related minimum acceptable level of achievement, in whole or in part, as the Committee deems appropriate and equitable.
2.25. Plan means the Egalet Corporation 2013 Stock-Based Incentive Compensation Plan herein set forth, as amended and/or restated from time to time.
2.26. Qualified Performance-Based Award means an Award or portion of an Award that is intended to satisfy the requirements for qualified performance-based compensation under Section 162(m) of the Code.
2.27. Restricted Stock means Common Stock awarded by the Committee under Section 8 of the Plan.
2.28. Restricted Stock Unit means the right to a payment in Common Stock or in cash, or in a combination thereof, awarded by the Committee under Section 9 of the Plan.
2.29. Restriction Period means the period during which Restricted Stock awarded under Section 8 of the Plan and Restricted Stock Units awarded under Section 9 of the Plan are subject to forfeiture.
2.30. SAR means a stock appreciation right awarded by the Committee under Section 11 of the Plan.
2.31. Subsidiary means any corporation (other than the Company), partnership, joint venture or other business entity of which 50% or more of the outstanding voting power is beneficially owned, directly or indirectly, by the Company.
2.32. Ten Percent Shareholder means a person who on any given date owns, either directly or indirectly (taking into account the attribution rules contained in Section 424(d) of the Code), stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or a Subsidiary.
3. Eligibility
Any Employee, Consultant or Non-Employee Director is eligible to receive an Award.
4. Administration and Implementation of Plan
4.1. The Plan shall be administered by the Committee. Any action of the Committee in administering the Plan shall be final, conclusive and binding on all persons, including the Company, its Subsidiaries and Affiliates, their Employees, Consultants and directors, Participants, persons claiming rights from or through Participants and stockholders of the Company. No member of the Committee shall be personally liable for any action, determination, or interpretation taken or made in good faith by the Committee with respect to the Plan or any Awards granted hereunder, and all members of the Committee shall be fully indemnified and protected by the Company in respect of any such action, determination or interpretation.
4.2. Subject to the provisions of the Plan, the Committee shall have full and final authority in its discretion (a) to select the Employees, Consultants and Non-Employee Directors who will receive Awards pursuant to the Plan, (b) to determine the type or types of Awards to be granted to each Participant, (c) to determine the number of shares of Common Stock to which an Award will relate, the terms and conditions of any Award granted under the Plan (including, but not limited to, restrictions as to vesting, transferability or forfeiture, exercisability or settlement of an Award and waivers or accelerations thereof, and waivers of or modifications to performance conditions relating to an Award, based in each case on such considerations as the Committee shall determine) and all other matters to be determined in
connection with an Award; (d) to determine whether, to what extent, and under what circumstances an Award may be canceled, forfeited, or surrendered; (e) to determine whether, and to certify that, Performance Goals to which the settlement of an Award is subject are satisfied; (f) to correct any defect or supply any omission or reconcile any inconsistency in the Plan, and to adopt, amend and rescind such rules and regulations as, in its opinion, may be advisable in the administration of the Plan; and (g) to construe and interpret the Plan and to make all other determinations as it may deem necessary or advisable for the administration of the Plan.
4.3. The Committees powers shall also include responsibility to determine the effect, if any, of a Change in Control of the Company upon outstanding Awards. Upon a Change in Control, the Committee may, at its discretion, (i) fully vest any or all Awards made under the Plan, (ii) determine whether all applicable Performance Goals have been achieved and the applicable level of performance, (iii) cancel any outstanding Awards in exchange for a cash payment of an amount (including zero) equal to the difference between the then Fair Market Value of the Award less the option or base price of the Award, (iv) after having given the Participant a reasonable chance to exercise any vested outstanding Options or SARs, terminate any or all of the Participants unexercised Options or SARs, (v) where the Company is not the surviving corporation, cause the surviving corporation to assume all outstanding Awards or replace all outstanding Awards with comparable awards or (vi) take such other action as the Committee shall determine to be appropriate.
4.4. The Committee may impose on any Award or the exercise thereof, at the date of grant or thereafter, such terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall determine, including terms requiring forfeiture of Awards in
the event of the Participants termination of employment or service with the Company or any Subsidiary or Affiliate; provided, however, that the Committee shall retain full power to accelerate or waive any such term or condition as it may have previously imposed, including, without limitation, any minimum vesting period. All Awards shall be evidenced by an Award Agreement. The right of a Participant to exercise or receive a grant or settlement of any Award, and the timing thereof, may be subject to such Performance Goals as may be specified by the Committee.
4.5. To the extent permitted by applicable law, the Committee may delegate some or all of its authority with respect to the Plan and Awards to any executive officer of the Company or any other person or persons designated by the Committee, in each case, acting individually or as a committee, provided that the Committee may not delegate its authority hereunder to make awards to Employees who are (i) officers as defined in Rule 16a-1(f) under the 1934 Act, (ii) covered employees within the meaning of Section 162(m) of the Code or (iii) officers or other Employees who are delegated authority by the Committee pursuant to this Section. Any delegation hereunder shall be subject to the restrictions and limits that the Committee specifies at the time of such delegation or thereafter. The Committee may at any time rescind the authority delegated to any person pursuant to this Section. Any action undertaken by any such person or persons in accordance with the Committees delegation of authority pursuant to this Section shall have the same force and effect as if undertaken directly by the Committee.
5. Shares of Stock Subject to the Plan
5.1. Subject to adjustment as provided in Section 13, the total number of shares of Common Stock available for Awards under the Plan shall be 6,280,000.
5.2. Subject to adjustment as provided in Section 13, (i) the maximum number of shares of Common Stock available for Awards that are intended to be Incentive Stock Options shall not exceed 6,280,000 and (ii) the maximum number of shares of Common Stock available for Awards that may be granted to any individual Participant shall not exceed 1,840,000 during any calendar year.
5.3. If any shares subject to an Award are forfeited or such Award otherwise terminates, any shares counted against the number of shares available for issuance pursuant to the Plan with respect to such Award shall, to the extent of any such forfeiture or termination, again be available for Awards under the Plan; provided, however, that the Committee may adopt procedures for the counting of shares relating to any Award to ensure appropriate counting, avoid double counting, and provide for adjustments in any case in which the number of shares actually distributed differs from the number of shares previously counted in connection with such Award. SARs or Restricted Stock Units to be settled in shares of Common Stock shall be counted in full against the number of shares available for award under the Plan, regardless of the number of shares of Common Stock issued upon settlement of the SAR or Restricted Stock Unit. If any shares subject to an Award are retained or reacquired by the Company in payment of an exercise price or satisfaction of a withholding or other tax obligation in connection with any Award, such shares shall not be made available for future Awards under the Plan.
5.4. Any shares issued hereunder may consist, in whole or in part, of authorized and unissued shares or treasury shares. Any shares issued by the Company through the assumption or substitution of outstanding grants in connection with the acquisition of another entity shall not reduce the maximum number of shares available for delivery under the Plan.
6. Common Stock
An Award of Common Stock is a grant by the Company of a specified number of shares of Common Stock to the Participant, which shares are not subject to forfeiture except as set forth in Section 21. Upon the Award of Common Stock, the Committee may direct the number of shares of Common Stock subject to such Award be issued to the Participant, designating the Participant as the registered owner. The Participant shall have all of the customary rights of a stockholder with respect to the Award of Common Stock, including the right to vote shares of the Common Stock and receive dividends with respect to the Common Stock.
7. Deferred Stock
An Award of Deferred Stock is an agreement by the Company to deliver to the Participant a specified number of shares of Common Stock at the end of a specified Deferral Period or Periods. Such an Award shall be subject to the following terms and conditions:
7.1. Upon the Award of Deferred Stock, the Committee shall direct that the number of shares subject to such Award be credited to the Participants account on the books of the Company but that issuance and delivery of the same shall be deferred until the date or dates provided in the Award Agreement. Prior to issuance and delivery of the Deferred Stock,
the Participant shall have no rights as a stockholder with respect to any shares of Deferred Stock credited to the Participants account.
7.2. During the Deferral Period, no dividend shall be paid with respect to shares covered by a Deferred Stock Award and the Participant shall have no future right to any dividend paid during the Deferral Period.
7.3. The Deferral Period may consist of one or more installments. Provided that the Deferred Stock has not been previously forfeited, at the end of the Deferral Period or any installment thereof, the shares of Deferred Stock applicable to such installment, shall be issued and delivered to the Participant (or, where appropriate, the Participants legal representative) in accordance with the terms of the Award Agreement.
8. Restricted Stock
An Award of Restricted Stock is a grant by the Company of a specified number of shares of Common Stock to the Participant, which shares are subject to forfeiture upon the happening of specified events. Such an Award shall be subject to the following terms and conditions:
8.1. Upon the Award of Restricted Stock, the Committee may direct the number of shares of Common Stock subject to such Award be issued to the Participant or placed in a restricted stock account (including an electronic account) with the transfer agent and in either case designating the Participant as the registered owner. The certificate(s), if any, representing such shares shall be physically or electronically legended, as applicable, as to sale, transfer, assignment, pledge or other encumbrances during the Restriction Period and, if issued to the Participant, returned to the Company to be held in escrow during the Restriction Period. In
all cases, the Participant shall sign a stock power endorsed in blank to the Company to be held in escrow during the Restriction Period.
8.2. During the Restriction Period, the Participant shall have the right to vote shares of Restricted Stock. During the Restriction Period, no dividend shall be paid with respect to the number of shares covered by a Restricted Stock Award and the Participant shall have no future right to any dividend paid during the Restriction Period.
8.3. Provided that the Restricted Stock has not been previously forfeited, at the end of the Restriction Period the restrictions imposed under the Award Agreement shall lapse with respect to the number of shares specified thereunder, and the legend, if any, imposed hereunder shall be removed and such number of shares delivered to the Participant (or, where appropriate, the Participants legal representative).
9. Restricted Stock Units
An Award of Restricted Stock Units is a grant by the Company of the right to receive a payment in Common Stock or in cash, or in a combination thereof, that is equal to the Fair Market Value of a share of Common Stock as of the date of vesting or payment, as set forth in the applicable Award Agreement, which right is subject to forfeiture upon the happening of specified events. Such an Award shall be subject to the following terms and conditions:
9.1. Any amount payable upon the end of the Restriction Period with respect to a Restricted Stock Unit shall be paid by the Company in shares of Common Stock, in cash or in a combination of shares of Common Stock and cash, as determined by the Committee in its sole discretion or as set forth in the Award Agreement.
9.2. Provided that the Restricted Stock Units have not been previously forfeited, at the end of the Restriction Period the restrictions imposed under the Award Agreement shall lapse with respect to the number of Restricted Stock Units specified thereunder, and shares of Common Stock or cash with a value equal to the Fair Market Value of the shares of Common Stock underlying such Restricted Stock Units shall be delivered to the Participant (or, where appropriate, the Participants legal representative).
10. Options
Options give a Participant the right to purchase a specified number of shares of Common Stock from the Company for a specified time period at a fixed price. Options may be either Incentive Stock Options or Non-Qualified Stock Options. The grant of Options shall be subject to the following terms and conditions:
10.1. Option Price: The price per share at which Common Stock may be purchased upon exercise of an Option shall be determined by the Committee, but shall be not less than 100% of the Fair Market Value of a share of Common Stock on the date of grant (or 110% of such Fair Market Value in the case of an Incentive Stock Option granted to a Ten Percent Shareholder), unless the Option was granted through the assumption of, or in substitution for, outstanding awards previously granted by an entity acquired by the Company or any Subsidiary or Affiliate or with which the Company or any Subsidiary or Affiliate combines.
10.2. Term of Options: The term of an Option shall in no event be greater than ten years (five years in the case of an Incentive Stock Option granted to a Ten Percent Shareholder).
10.3. Incentive Stock Options: Each provision of the Plan and each Award Agreement relating to an Incentive Stock Option shall be construed so that each Incentive Stock Option shall be an incentive stock option as defined in Section 422 of the Code, and any provisions of an Award Agreement that cannot be so construed shall be disregarded. In no event may a Participant be granted an Incentive Stock Option which does not comply with the grant and vesting limitations prescribed by Section 422(b) of the Code. Incentive Stock Options may not be granted to Employees of Affiliates or to Consultants or Non-Employee Directors.
10.4. Payment of Option Price: The option price of the shares of Common Stock received upon the exercise of an Option shall be paid within three days of the date of exercise: (i) in cash, or (ii) with the proceeds received from a broker-dealer whom the Participant has authorized to sell all or a portion of the Common Stock covered by the Option, or (iii) with the consent of the Committee, in whole or in part in Common Stock held by the Participant and valued at Fair Market Value on the date of exercise. With the consent of the Committee, payment upon the exercise of a Non-Qualified Option may be made in whole or in part by Restricted Stock held by the Participant and valued at Fair Market Value on the date the Option is exercised. In such case, the Common Stock to which the Option relates shall be subject to the same forfeiture restrictions originally imposed on the Restricted Stock exchanged therefor. An Option may be exercised only for a whole number of shares of Common Stock.
11. Stock Appreciation Rights
SARs give the Participant the right to receive, upon exercise of the SAR, the excess of (i) the Fair Market Value of one share of Common Stock on the date of exercise over (ii) the grant price of the SAR as determined by the Committee, but which may never be less
than 100% of the Fair Market Value of a share of Common Stock on the date of grant. The grant of SARs shall be subject to the following terms and conditions:
11.1. The term of a SAR shall in no event be greater than ten years.
11.2. The Committee shall determine the time or times at which a SAR may be exercised in whole or in part, the method of exercise, the method of settlement, form of consideration payable in settlement, method by which Common Stock will be delivered or deemed to be delivered to Participants, whether or not a SAR shall be in tandem with any other Award, and any other terms and conditions of any SAR.
11.3. The Committee may provide that a SAR shall be deemed to be exercised at the close of business on the scheduled expiration date of such SAR.
12. Qualified Performance-Based Awards.
To the extent the Committee determines, in its sole discretion, that it is necessary or advisable in order to comply with the deductibility limitations of Section 162(m) of the Code applicable to Qualified Performance-Based Awards, the following rules shall apply:
12.1. Only an Employee who is a covered employee within the meaning of Section 162(m) of the Code shall be eligible to receive Qualified Performance-Based Awards. The Committee shall designate in its sole discretion which covered employees will be Participants for a Performance Cycle within the earlier of (i) the first 90 days of a Performance Cycle and (ii) the lapse of 25% of the Performance Cycle.
12.2. The Committee shall establish in writing within the earlier of (i) the first 90 days of a Performance Cycle and (ii) the lapse of 25% of the Performance Cycle, and
in any event, while the outcome is substantially uncertain, (A) Performance Goals for the Performance Cycle, and (B) in respect of such Performance Goals, a minimum acceptable level of achievement below which no payment will be made or no Award shall vest or become exercisable, and an objective formula or other method for determining the amount of any payment to be made or the extent to which an Award hereunder shall vest or become exercisable if performance is at or above such minimum acceptable level but falls short of the maximum achievement of the specified Performance Goals.
12.3. Following the completion of a Performance Cycle, the Committee shall review and certify in writing whether, and to what extent, the Performance Goals for the Performance Cycle have been achieved and, if so, to also calculate and certify in writing the amount of the Qualified Performance-Based Awards earned for the Performance Cycle based upon the Performance Goals and the related formulas or methods as determined pursuant to Section 12.2. The Committee shall then determine the actual amount payable or the extent to which an Award is vested or exercisable as a result of attainment of such Performance Goals under each Participants Award for the Performance Cycle, and, in doing so, may reduce or eliminate, except as otherwise provided in the Award Agreement, the amount of the Award. In no event shall the Committee have the authority to increase Award amounts to any covered employee under a Qualified Performance-Based Award.
12.4. A Qualified Performance-Based Award granted, vesting or becoming exercisable with respect to a Performance Cycle shall be paid (unless such Award is subject to the Participants exercise, which exercise such Participant has not effectuated) as soon as practicable following completion of the certification described in Section 12.3 but in no event
later than December 31 of the year following the year in which the applicable Performance Cycle ends.
13. Adjustments upon Changes in Capitalization
13.1. In order to prevent dilution or enlargement of the rights of Participants under the Plan as a result of any stock dividend, recapitalization, forward stock split or reverse stock split, reorganization, division, merger, consolidation, spin-off, combination, repurchase or share exchange, extraordinary or unusual cash distribution or other similar corporate transaction or event that affects the Common Stock, the Committee shall adjust (i) the number and kind of shares of Common Stock which may thereafter be issued in connection with Awards, (ii) the number and kind of shares of Common Stock issuable in respect of outstanding Awards, (iii) the aggregate number and kind of shares of Common Stock available under the Plan, and (iv) the exercise or grant price relating to any Award. Any such adjustment shall be made in an equitable manner which reflects the effect of such transaction or event. It is provided, however, that in the case of any such transaction or event, the Committee may make any additional adjustments to the items in (i) through (iv) above which it deems appropriate in the circumstances, or make provision for a cash payment with respect to any outstanding Award; and it is provided, further, that no adjustment shall be made under this Section that would cause the Plan to violate Section 422 of the Code with respect to Incentive Stock Options or that would adversely affect the status of any Award that is performance-based compensation under Section 162(m) of the Code.
13.2. In addition, the Committee is authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards, including any Performance
Goals, in recognition of unusual or nonrecurring events (including, without limitation, events described in Section 13.1) affecting the Company, any Subsidiary or Affiliate, or in response to changes in applicable laws, regulations, or accounting principles. Notwithstanding the foregoing, no adjustment shall be made in any outstanding Awards to the extent that such adjustment would adversely affect the intended status of the Award as performance-based compensation under Section 162(m) of the Code.
14. Termination and Amendment
14.1. The Board may amend, alter, suspend, discontinue, or terminate the Plan without the consent of the Companys stockholders or Participants, except that any such amendment, alteration, suspension, discontinuation, or termination shall be subject to the approval of the Companys stockholders if (i) such action would increase the number of shares subject to the Plan, (ii) such action results in the repricing, replacement or repurchase of any Option, SAR or other Award, or (iii) such stockholder approval is required by any federal or state law or regulation or the rules of any stock exchange or automated quotation system on which the Common Stock may then be listed or quoted, in each case, except as provided in Section 13.1; provided, however, that without the consent of an affected Participant, no amendment, alteration, suspension, discontinuation, or termination of the Plan may materially and adversely affect the rights of such Participant under any Award theretofore granted and any Award Agreement relating thereto, except as the Committee determines in its sole discretion to be necessary or advisable to ensure a deduction under Section 162(m) of the Code or to comply with Section 409A of the Code or an exemption therefrom. The Committee may waive any conditions or rights under, or amend, alter, suspend, discontinue, or terminate, any Award
theretofore granted and any Award Agreement relating thereto; provided, however, that without the consent of an affected Participant, no such amendment, alteration, suspension, discontinuation, or termination of any Award may materially and adversely affect the rights of such Participant under such Award, except as the Committee determines in its sole discretion to be necessary or advisable to ensure a deduction under Section 162(m) of the Code or to comply with Section 409A of the Code or an exemption therefrom.
14.2. The foregoing notwithstanding, any Performance Goal or other performance condition specified in connection with an Award shall not be deemed a fixed contractual term, but shall remain subject to adjustment by the Committee, in its discretion at any time in view of the Committees assessment of the Companys strategy, performance of comparable companies, and other circumstances, except to the extent that any such adjustment to a performance condition would adversely affect the intended status of an Award as performance-based compensation under Section 162(m) of the Code.
15. No Right to Award, Employment or Service
Neither the Plan nor any action taken hereunder shall be construed as giving any Employee, Consultant or Non-Employee Director any right to be retained in the employ or service of the Company, any Subsidiary or Affiliate. For purposes of the Plan, transfer of employment or service between the Company and its Subsidiaries and Affiliates shall not be deemed a termination of employment or service.
16. Taxes
The Company, any Subsidiary or Affiliate is authorized to withhold from any payment relating to an Award under the Plan, including from a distribution of Common Stock or
any payroll or other payment to a Participant amounts of withholding and other taxes due in connection with any transaction involving an Award, and to take such other action as the Committee may deem advisable to enable the Company, the Subsidiary or Affiliate and Participants to satisfy obligations for the payment of withholding taxes and other tax obligations relating to any Award. This authority shall include authority to withhold or receive Common Stock or other property and to make cash payments in respect thereof in satisfaction of a Participants tax obligations. Withholding of taxes in the form of shares of Common Stock shall not occur at a rate that exceeds the minimum required statutory federal and state withholding rates.(1) Participants who are subject to the reporting requirements of Section 16 of the 1934 Act may elect to pay all or a portion of any withholding or other taxes due in connection with an Award by directing the Company to withhold shares of Common Stock that would otherwise be received in connection with such Award.
17. Limits on Transferability; Beneficiaries
No Award or other right or interest of a Participant under the Plan shall be pledged, encumbered, or hypothecated to, or in favor of, or subject to any lien, obligation, or liability of such Participant to, any party, other than the Company, any Subsidiary or Affiliate, or assigned or transferred by such Participant otherwise than by will or the laws of descent and distribution, and such Awards and rights shall be exercisable during the lifetime of the Participant only by the Participant or his or her guardian or legal representative. Notwithstanding the foregoing, the Committee may, in its discretion, provide that Awards or
other rights or interests of a Participant granted pursuant to the Plan (other than an Incentive Stock Option) be transferable, without consideration, to immediate family members (i.e., children, grandchildren or spouse), to trusts for the benefit of such immediate family members and to partnerships in which such family members are the only partners. The Committee may attach to such transferability feature such terms and conditions as it deems advisable. In addition, a Participant may, in the manner established by the Committee, designate a beneficiary (which may be a person or a trust) to exercise the rights of the Participant, and to receive any distribution, with respect to any Award upon the death of the Participant. A beneficiary, guardian, legal representative or other person claiming any rights under the Plan from or through any Participant shall be subject to all terms and conditions of the Plan and any Award Agreement applicable to such Participant, except as otherwise determined by the Committee, and to any additional restrictions deemed necessary or appropriate by the Committee.
18. No Rights to Awards; No Stockholder Rights
No Participant shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of Participants. No Award shall confer on any Participant any of the rights of a stockholder of the Company unless and until Common Stock is duly issued or transferred to the Participant in accordance with the terms of the Award.
19. Foreign Nationals.
Without amending the Plan, Awards may be granted to Employees, Consultants and Non-Employee Directors who are foreign nationals or are employed or providing services outside the United States or both, on such terms and conditions different from those specified in the Plan as may, in the judgment of the Committee, be necessary or desirable to further the
purpose of the Plan. Moreover, the Committee may approve such supplements to, or amendments, restatements or alternative versions of, the Plan as it may consider necessary or appropriate for such purposes without thereby affecting the terms of the Plan as in effect for any other purpose, provided that no such supplements, amendments, restatements or alternative versions shall include any provisions that are inconsistent with the terms of the Plan, as then in effect, unless the Plan could have been amended to eliminate such inconsistency without further approval by the stockholders of the Company.
20. Securities Law Requirements
20.1. No Award granted hereunder shall be exercisable if the Company shall at any time determine that (a) the listing upon any securities exchange, registration or qualification under any state or federal law of any Common Stock otherwise deliverable upon such exercise, or (b) the consent or approval of any regulatory body or the satisfaction of withholding tax or other withholding liabilities, is necessary or appropriate in connection with such exercise. In any of the events referred to in clause (a) or clause (b) above, the exercisability of such Awards shall be suspended and shall not be effective unless and until such withholding, listing, registration, qualifications or approval shall have been effected or obtained free of any conditions not acceptable to the Company in its sole discretion, notwithstanding any termination of any Award or any portion of any Award during the period when exercisability has been suspended.
20.2. The Committee may require, as a condition to the right to exercise any Award that the Company receive from the Participant, at the time any such Award is exercised, vests or any applicable restrictions lapse, representations, warranties and agreements
to the effect that the shares are being purchased or acquired by the Participant for investment only and without any present intention to sell or otherwise distribute such shares and that the Participant will not dispose of such shares in transactions which, in the opinion of counsel to the Company, would violate the registration provisions of the Securities Act of 1933, as then amended, and the rules and regulations thereunder. The certificates issued to evidence such shares shall bear appropriate legends summarizing such restrictions on the disposition thereof.
21. Recoupment
Any Award granted pursuant to the Plan shall be subject to mandatory repayment by the Participant to the Company pursuant to the terms of any Company clawback or recoupment policy directly applicable to the Plan and (i) set forth in the Participants Award Agreement or (ii) required by law to be applicable to the Participant.
22. Termination
Unless the Plan previously shall have been terminated by action of the Board, the Plan shall terminate on the 10-year anniversary of the Effective Date, and no Awards under the Plan shall thereafter be granted.
23. Fractional Shares
The Company will not be required to issue any fractional shares of Common Stock pursuant to the Plan. The Committee may provide for the elimination of fractions and for the settlement of fractions in cash.
24. Governing Law
To the extent that Federal laws do not otherwise control, the validity and construction of the Plan and any Award Agreement entered into thereunder shall be construed
Exhibit 10.2
EGALET CORPORATION
Option Agreement
This Option Agreement (this Agreement) is made and entered into as of , 20 (the Grant Date) by and between Egalet Corporation, a Delaware corporation (the Company), and (the Participant).
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 set forth in the Notice of Grant attached hereto as Exhibit A, at the Exercise Price set forth therein. The Option is being granted pursuant to the terms of the Companys 2013 Stock-Based Incentive Compensation Plan, as amended and/or restated from time to time (the Plan).
1.2 Consideration; Subject to Plan. The grant of the Option is made in consideration of the services to be rendered by the Participant to the Company and is subject to the terms and conditions of the Plan. Capitalized terms used but not defined herein will have the meaning ascribed to them in the Plan.
2. Exercise Period; Vesting.
2.1 Vesting Schedule. The Option will become vested and exercisable in accordance with the vesting schedule set forth in the attached Notice of Grant.
2.2 Expiration. The Option will expire on the Expiration Date set forth in the attached Notice of Grant, or earlier as provided in this Agreement or the Plan.
3. Termination of Service.
3.1 Termination for Reasons other than Cause. If the Participants employment or other service relationship is terminated for any reason other than cause, the Participant or, if applicable, the Participants legal guardian, executor, administrator, heir or legatee, may exercise the vested portion of the Option, but only within such period of time ending on the earlier of: (a) the date three months following the termination of the Participants employment or other service relationship or (b) the Expiration Date.
3.2 Termination for Cause. If the Participants employment or other service relationship is terminated for cause, the Option (whether vested or unvested) shall immediately be cancelled for no compensation and cease to be exercisable.
4. Manner of Exercise.
4.1 Election to Exercise. To exercise the Option, the Participant (or in the case of exercise after the Participants death or incapacity, the Participants executor, administrator, heir or legatee, as the case may be) must deliver to the Company a notice of intent to exercise in the manner designated by the Committee. 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 within three days of the date of exercise (i) in cash or (ii) with the consent of the Committee in its sole discretion, by (a) authorizing the Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to the Participant as a result of the exercise of the Option, (b) tendering proceeds received from a broker-dealer whom the Participant has authorized to sell all or a portion of the Common Stock covered by the Option or (c) delivering to the Company previously owned and unencumbered shares of Common Stock valued at Fair Market Value on the date of exercise.
4.3 Withholding. If the Company, in its discretion, determines that it is obligated to withhold any tax in connection with 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. The Participant may satisfy any federal, state or local tax withholding obligation relating to the exercise of the Option by (i) tendering a cash payment or (ii) with the consent of the Committee in its sole discretion, by (a) authorizing the Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to the Participant as a result of the exercise of the Option; provided, however, that no shares of Common Stock are withheld with a value exceeding the minimum amount of tax required to be withheld by law, (b) tendering proceeds received from a broker-dealer whom the Participant has authorized to sell all or a portion of the Common Stock covered by the Option or (c) delivering to the Company previously owned and unencumbered shares of Common Stock valued at Fair Market Value on the date of exercise. Notwithstanding the foregoing, Participants who are subject to the reporting requirements of Section 16 of the 1934 Act may elect to pay all or a portion of any withholding or other taxes due in connection with the exercise of the Option by directing the Company to withhold shares of Common Stock that would otherwise be received in connection with such exercise. The Company has the right to withhold from any compensation paid to a Participant.
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 Participants authorized assignee, or the Participants legal representative, which shall be evidenced by stock certificates representing the shares with the appropriate legends affixed thereto,
appropriate entry on the books of the Company or of a duly authorized transfer agent, or other appropriate means as determined by the Company.
5. No Right to Continued Service; No Rights as Stockholder. Neither the Plan nor this Agreement shall confer upon the Participant any right to be retained in any position with the Company, its Subsidiaries or its Affiliates as an Employee or other service provider. Further, nothing in the Plan or this Agreement shall be construed to limit the discretion of the Company or any of its Subsidiaries or Affiliates to terminate the Participants employment or other service relationship at any time, with or without cause. The Participant shall not have any rights as a stockholder with respect to any shares of Common Stock subject to the Option unless and until certificates representing the shares have been issued by the Company to the holder of such shares, or the shares have otherwise been recorded on the books of the Company or of a duly authorized transfer agent as owned by such holder.
6. Transferability. Except with the prior written consent of the Committee in its sole discretion, the Option is not transferable by the Participant other than to a designated beneficiary upon the Participants death or by will or the laws of descent and distribution, and is exercisable during the Participants lifetime only by him or her (or his or her legal guardian in the event of the Participants incapacity). 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 or with the Committees prior written consent) 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. Change in Control. Unless otherwise determined by the Committee in accordance with Section 4.3 of the Plan, a Change in Control shall have no effect on the Option.
8. Adjustments. The shares of Common Stock subject to the Option may be adjusted or terminated in any manner as contemplated by Section 13 of the Plan.
9. 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 Participants 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 Participants liability for Tax-Related Items.
10. 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 Companys 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 with the Securities and Exchange Commission, any state securities commission or any stock exchange to effect such compliance.
11. Incentive Stock Options. The provisions of this Section 11 shall apply if, and only if, the attached Notice of Grant specifies that the Option is intended to be an Incentive Stock Option. In no event may an Incentive Stock Option be granted to a Consultant or a Non-Employee Director.
11.1 To the extent that the aggregate Fair Market Value (determined on the Grant Date) of the shares of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by the Participant during any calendar year (under all plans of the Company and its Affiliates) exceeds $100,000, the Options or portions thereof which exceed such limit (according to the order in which they were granted) shall be treated as Non-Qualified Options.
11.2 Qualification as an Incentive Stock Option. The Participant understands that in order to obtain the benefits of an Incentive Stock Option, no sale or other disposition may be made of shares for which Incentive Stock Option treatment is desired within one (1) year following the date of exercise of the Option or within two (2) years from the Grant Date. The Participant understands and agrees that the Company shall not be liable or responsible for any additional tax liability the Participant incurs in the event that the Internal Revenue Service for any reason determines that this Option does not qualify as an Incentive Stock Option within the meaning of the Code.
11.3 Disqualifying Disposition. If the Participant disposes of the shares of Common Stock prior to the expiration of the later of (i) two (2) years from the Grant Date and (ii) one (1) year from the date the shares are transferred to the Participant pursuant to the exercise of the Option (a Disqualifying Disposition), the Participant shall notify the Company in writing within thirty (30) days after such Disqualifying Disposition of the date and terms of such Disqualifying Disposition. The Participant also agrees to provide the Company with any information concerning any such Disqualifying Dispositions as the Company requires for tax purposes.
12. Notices. Any notice required to be delivered to the Company under this Agreement shall be in writing and addressed to the Chief Financial Officer of the Company at the Companys 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 Participants 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.
13. Governing Law. This Agreement will be construed and interpreted in accordance with the laws of the State of Delaware without regard to conflict of law principles.
14. Interpretation. Any dispute regarding the interpretation of this Agreement shall be submitted by the Participant or the Company to the Committee for review. The resolution of such dispute by the Committee shall be final and binding on the Participant and the Company.
15. Options Subject to Plan. This Agreement is subject to the Plan as approved by the Companys stockholders. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.
16. Successors and Assigns. The Company may assign any of its rights under this Agreement. This Agreement will be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement will be binding upon the Participant and the Participants beneficiaries, executors, administrators and the person(s) to whom this Agreement may be transferred by will, the laws of descent or distribution or otherwise.
17. Severability. The invalidity or unenforceability of any provision of the Plan or this Agreement shall not affect the validity or enforceability of any other provision of the Plan or this Agreement, and each provision of the Plan and this Agreement shall be severable and enforceable to the extent permitted by law.
18. Discretionary Nature of Plan. The Plan is discretionary and may be amended, cancelled or terminated by the Company at any time, in its discretion. The grant of the Option in this Agreement does not create any contractual right or other right to receive any Options or other Awards in the future. Future Awards, if any, will be at the sole discretion of the Company. Any amendment, modification, or termination of the Plan shall not constitute a change or impairment of the terms and conditions of the Participants employment or other service relationship with the Company.
19. Amendment. The Committee has the right to amend, alter, suspend, discontinue or cancel the Option, prospectively or retroactively; provided, that, no such amendment shall adversely affect the Participants material rights under this Agreement without the Participants consent.
20. Recoupment. The shares acquired upon exercise of the Option and any compensation paid with respect thereto shall be subject to mandatory repayment by the Participant to
the Company pursuant to the terms of any Company clawback or recoupment policy directly applicable to the Plan and in effect on the date hereof or required by law to be applicable to the Participant.
21. No Impact on Other Benefits. The value of the Participants Option is not part of his or her normal or expected compensation for purposes of calculating any severance, retirement, welfare, insurance or similar employee benefit, if applicable.
22. 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.
23. Acceptance. The Participant hereby acknowledges receipt of a copy of the Plan and this Agreement. The Participant has read and understands the terms and provisions thereof and hereof, and accepts the Option subject to all of the terms and conditions of the Plan and this Agreement. The Participant acknowledges that there may be adverse tax consequences upon exercise of the Option or disposition of the underlying shares and that the Participant should consult a tax advisor prior to such exercise or disposition.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
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EGALET CORPORATION | |
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PARTICIPANT |
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Exhibit A
Notice of Grant
This Notice of Grant sets forth the specific terms that apply to the Option granted to the Participant identified below under the Option Agreement (the Agreement), made and entered into as of 20 , between Egalet Corporation, a Delaware corporation (the Company), and the Participant. Capitalized terms that are used but not defined herein shall have the meanings given to such terms in the Agreement.
Participant Name: |
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Type of Option (select one): |
o Incentive Stock Option |
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o Non-Qualified Stock Option |
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Shares Subject to Option: |
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Grant Date: |
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Exercise Price per Share: |
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Expiration Date: |
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Vesting Schedule: |
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[FOR EMPLOYEES: Subject to the Participants continuing employment with the Company, the Option will become vested and exercisable with respect to 25% of the shares set forth above on the first anniversary of the Grant Date and for 1/48 of the shares set forth above each month thereafter until the Option is 100% vested. The unvested portion of the Option will be cancelled for no compensation upon the Participants termination of employment for any reason.]
[FOR NON-EMPLOYEE DIRECTORS: Subject to the Participants continuing service with the Company, the Option will become vested and exercisable with respect to 100% of the shares set forth above on the date immediately preceding the date of the Companys first annual meeting of stockholders immediately following the Grant Date. The unvested portion of the Option will be cancelled for no compensation upon the Participants termination of service for any reason.]
[FOR CONSULTANTS: [ ]% of the Option shall constitute the Time-Based Portion and [ ]% of the Option shall constitute the Performance-Based Portion. Subject to the Participants continuing service with the Company, (i) the Option will become vested and exercisable with respect to (a) 50% of the shares underlying the Time-Based Portion on the date that is six months following the Grant Date; and (b) an additional 50% of the shares underlying the Time-Based Portion on the first anniversary of the Grant Date; and (ii) the Option will
Exhibit 10.3
EGALET CORPORATION
Restricted Stock Award Agreement
This Restricted Stock Award Agreement (this Agreement) is made and entered into as of ], 20 (the Grant Date) by and between Egalet Corporation, a Delaware corporation (the Company) and [ ] (the Grantee).
WHEREAS, the Company has adopted the Egalet Corporation 2013 Stock-Based Incentive Compensation Plan, as amended and/or restated from time to time (the Plan), pursuant to which awards of Restricted Stock may be granted; and
WHEREAS, the Committee has determined that it is in the best interests of the Company and its stockholders to grant the award of Restricted Stock provided for herein.
NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:
1. Grant of Restricted Stock. Pursuant to the terms of the Plan, the Company hereby issues to the Grantee on the Grant Date a Restricted Stock Award consisting of the number of shares of Common Stock (the Restricted Stock) set forth in the Grant Notice attached hereto as Exhibit A, on the terms and conditions and subject to the restrictions set forth in this Agreement, the attached Grant Notice and the Plan. Capitalized terms that are used but not defined herein have the meaning ascribed to them in the Plan.
2. Restriction Period; Vesting. The Restricted Stock shall be eligible to vest in accordance with the vesting schedule set forth in the attached Grant Notice.
3. Termination. If the Grantees service with the Company or an Affiliate terminates for any reason at any time before all of his or her Restricted Stock has vested, the Grantees unvested Restricted Stock shall be automatically forfeited upon such termination of service and neither the Company nor any Affiliate shall have any further obligations to the Grantee under this Agreement.
4. Restrictions. Subject to any exceptions set forth in this Agreement, the Grant Notice or the Plan, during the Restriction Period, the Restricted Stock or the rights relating thereto may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Grantee. Any attempt to assign, alienate, pledge, attach, sell or otherwise transfer or encumber the Restricted Stock or the rights relating thereto during the Restriction Period shall be wholly ineffective and, if any such attempt is made, the Restricted Stock will be forfeited by the Grantee and all of the Grantees rights to such shares shall immediately terminate without any payment or consideration by the Company.
5. Voting; Dividends. During the Restriction Period, the Grantee shall have the right to vote the shares of Restricted Stock subject to this Agreement. During the Restriction Period, no dividend
shall be paid with respect to any shares of Restricted Stock subject to this Agreement and the Grantee shall have no future right to any dividend paid during the Restriction Period.
6. No Right to Continued Service. Neither the Plan nor this Agreement shall confer upon the Grantee any right to be retained in any position, as an Employee, Consultant or Non-Employee Director of the Company or any Affiliate. Further, nothing in the Plan or this Agreement shall be construed to limit the discretion of the Company or any Affiliate to terminate the Grantees employment or other service at any time, with or without cause.
7. Adjustments. If any change is made to the outstanding Common Stock or the capital structure of the Company, the shares of Common Stock shall be subject to adjustment in any manner provided under Section 13 of the Plan.
8. Tax Liability and Withholding. The Grantee shall be required to pay to the Company, and the Company shall have the right to deduct from any compensation paid to the Grantee pursuant to the Plan or otherwise, the amount of any required withholding taxes in respect of the Restricted Stock and to take all such other action as the Committee deems necessary to satisfy all obligations for the payment of such withholding taxes. The Grantee may satisfy any federal, state or local tax withholding obligation by any of the following means, or by a combination of such means:
(a) tendering a cash payment.
(b) authorizing the Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable or deliverable to the Grantee as a result of the vesting of the Restricted Stock; provided, however, that no shares of Common Stock shall be withheld with a value exceeding the minimum amount of tax required to be withheld by law.
(c) tendering proceeds received from a broker-dealer authorized by the Grantee to sell all or a portion of the shares of Common Stock delivered to the Grantee as a result of the vesting of the Restricted Stock.
(d) delivering to the Company previously owned and unencumbered shares of Common Stock.
9. Compliance with Law. The issuance and transfer of Common Stock shall be subject to compliance by the Company and the Grantee with all applicable requirements of federal and state securities laws and with all applicable requirements of any stock exchange on which the Common Stock may be listed. No Common Stock shall be issued or transferred unless and until any then applicable requirements of state and federal laws and regulatory agencies have been fully complied with to the satisfaction of the Company and its counsel. The Grantee understands that the Company is under no obligation to register the Common Stock with the Securities and
Exchange Commission, any state securities commission or any stock exchange to effect such compliance.
10. Stock Issuance. The Company may issue stock certificates or evidence the Grantees interest by using a restricted book entry account with the Companys transfer agent. A physical or electronic legend, as applicable, may be placed on any certificate(s) representing the shares of Restricted Stock granted pursuant to this Agreement indicating restrictions on transferability of such shares or any other restrictions that the Committee may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any applicable federal or state securities laws or any stock exchange on which shares of Common Stock are then listed or quoted. Any such certificate(s) shall be held in escrow by the Company during the Restriction Period. The Grantee shall sign a stock power endorsed in blank to the Company to be held in escrow during the Restriction Period
11. Governing Law. This Agreement will be construed and interpreted in accordance with the laws of the State of Delaware without regard to conflict of law principles.
12. Restricted Stock Subject to Plan. This Agreement is subject to the Plan as approved by the Companys stockholders. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.
13. Successors and Assigns. The Company may assign any of its rights under this Agreement. This Agreement will be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement will be binding upon the Grantee and the Grantees beneficiaries, executors, administrators and the person(s) to whom the Restricted Stock may be transferred by will or the laws of descent or distribution.
14. Amendment. The Committee has the right to amend, alter, suspend, discontinue or cancel the Restricted Stock, prospectively or retroactively; provided, that, no such amendment shall adversely affect the Grantees material rights under this Agreement without the Grantees consent.
15. Recoupment. The Restricted Stock and any compensation paid with respect thereto shall be subject to mandatory repayment by the Grantee to the Company pursuant to the terms of any Company clawback or recoupment policy directly applicable to the Plan and in effect on the date hereof or required by law to be applicable to the Grantee.
16. Acceptance. The Grantee hereby acknowledges receipt of a copy of the Plan and this Agreement. The Grantee has read and understands the terms and provisions thereof, and accepts the Restricted Stock subject to all of the terms and conditions of the Plan and this Agreement.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
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EGALET CORPORATION | |
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Title: |
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GRANTEE |
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Name: |
Exhibit A
Notice of Grant
This Notice of Grant sets forth the specific terms that apply to the Restricted Stock granted to the Grantee identified below under the Restricted Stock Award Agreement (the Agreement), made and entered into as of , 20 , between Egalet Corporation, a Delaware corporation (the Company), and the Grantee. Capitalized terms that are used but not defined herein shall have the meanings given to such terms in the Agreement.
Grantee Name: |
[ ] |
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Shares of Restricted Stock Granted: |
[ ] |
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Grant Date: |
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Vesting Schedule: [FOR EMPLOYEES: Subject to the Grantees continuing employment with the Company, 25% of the shares of Restricted Stock shall vest, and the restrictions applicable thereto shall lapse, on each of the first four anniversaries of the Grant Date until 100% of the Restricted Stock is vested. The unvested portion of the Restricted Stock will be forfeited for no compensation upon the Grantees termination of employment for any reason.
Notwithstanding the foregoing, if the Grantees service with the Company or an Affiliate is terminated by the Company or such Affiliate without Cause (other than due to the Grantees death or Disability), the number of shares of Restricted Stock that, but for such termination of service, would have vested on the last day of the calendar quarter in which such termination of service occurs shall vest upon the Grantees termination of service.
Notwithstanding the foregoing, if the Grantee remains in continuous service with the Company or an Affiliate until the date of a Change in Control, 100% of the unvested shares of Restricted Stock shall vest immediately prior to the consummation of such Change in Control.]
[FOR NON-EMPLOYEE DIRECTORS: Subject to the Grantees continuing service with the Company, the 100% of the Restricted Stock shall vest, and the restrictions applicable thereto shall lapse, on the date immediately preceding the date of the Companys first annual meeting of stockholders immediately following the Grant Date. The unvested portion of the Restricted Stock will be forfeited for no compensation upon the Grantees termination of service for any reason.]
[FOR CONSULTANTS: [ ]% of the Restricted Stock shall constitute the Time-Based Portion and [ ]% of the Restricted Stock shall constitute the Performance-Based Portion. Subject to the Grantees continuing service with the Company, (i) (a) 50% of the Time-Based Portion of the Restricted Stock shall vest, and the restrictions applicable thereto shall lapse, on the date that is six month following the Grant Date; and (b) an additional 50% of the Time-Based Portion of the Restricted Stock shall vest, and the restrictions applicable thereto shall lapse, on the first anniversary of the Grant Date; and (ii) [ ]% of the Performance-Based Portion of the Restricted Stock shall vest, and the restrictions applicable thereto shall lapse, upon [INSERT DESCRIPTION OF PERFORMANCE CONDITIONS]. The unvested portion of the Restricted Stock will be forfeited for no compensation upon the Grantees termination of service for any reason.]
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have issued our report dated March 16, 2015 with respect to the consolidated financial statements of Egalet Corporation included in the Annual Report on Form 10-K for the year ended December 31, 2014, which is incorporated by reference in this Registration Statement. We consent to the incorporation by reference of the aforementioned report in this Registration Statement.
/s/ GRANT THORNTON LLP |
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Philadelphia, PA |
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June 29, 2016 |
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Exhibit 23.3
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the Registration Statement (Form S-8) pertaining to the Amended and Restated 2013 Stock-based Incentive Compensation Plan of Egalet Corporation of our report dated March 11, 2016, with respect to the consolidated financial statements of Egalet Corporation included in its Annual Report (Form 10-K) for the year ended December 31, 2015, filed with the Securities and Exchange Commission.
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/s/ Ernst & Young LLP |
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Philadelphia, Pennsylvania |
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June 29, 2016 |
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