Exhibit 10.11
MACROCHEM CORPORATION
OPTION CERTIFICATE
Stock option (the "Option") granted by MacroChem Corporation, a Delaware
corporation with its principal office at 110 Hartwell Avenue, Lexington, MA
02173 (the "Company"), to Glenn E. Deegan, whose address is 27 Allerton Road,
Milton, MA 02186 (the "Optionee").
1. GRANT OF OPTION
This certificate evidences the grant, by the Company on February 10, 2006,
to the Optionee of an Option to purchase, in whole or in part, on the terms
provided herein, a total of 150,000 shares of Common Stock of the Company (the
"Shares"), par value $.01 per share (the "Stock"), at $1.62 per share, the fair
market value on the date of grant, February 10, 2006. This Option is not
intended to qualify as an incentive stock option within the meaning of Section
422A of the U.S. Internal Revenue Code of 1986, as amended. The latest date on
which this Option may be exercised (the "Final Exercise Date") is February 10,
2016.
This Option will vest in the following installments prior to the Final
Exercise Date:
DATE NUMBER OF SHARES
February 10, 2006 50,000
February 10, 2007 50,000
February 10, 2008 50,000
2. EXERCISE OF OPTION
Each election to exercise this Option, in whole or in part, shall be in
writing, signed by the Holder, and received by the Company at its principal
office, accompanied by payment in full of an amount equal to the Exercise Price
multiplied by the number of Shares for which this Option is exercised (the
"Purchase Price") and by such additional documentation evidencing the right to
exercise (or, in the case of a Legal Representative, the authority of such
person) as the Company may require. The Purchase Price may be paid (i) in cash
or by personal check, bank check or money order payable to the order of the
Company, or (ii) by delivery of an unconditional and irrevocable undertaking by
a broker to deliver promptly to the Company sufficient funds to pay the exercise
price, or (iii) by delivery of shares of Stock of the Company which have been
outstanding for at least six (6) months (unless the Compensation Committee of
the Board of Directors of the Company (the "Committee") approves a shorter
period) and which have a fair market value equal to the exercise price, or (iv)
by any combination of the permissible forms of payment. For purposes of this
Option, the term "Holder" shall mean the Optionee or the person or persons to
whom this Option is transferred in accordance with the provisions of this Option
(including by will or the applicable laws of descent and distribution). For
purposes of this Option, the term "Legal Representative" shall mean the person
designated to exercise this Option upon the Holder's death or disability.
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3. STATUS CHANGE
Upon the cessation of the Optionee's employment or other service
relationship with the Company for any reason (a "Status Change"), this Option
shall terminate as to any Shares for which it was not exercisable immediately
prior to the Status Change; PROVIDED, that the Committee in its sole discretion
may provide (either prior to or following the Status Change) that any or all of
such portion of this Option not otherwise exercisable prior to the Status Change
shall be treated as having become exercisable immediately prior to the Status
Change. As to that number of Shares for which the Option was exercisable (or
deemed exercisable by action of the Committee) immediately prior to the Status
Change, it shall remain exercisable as follows:
(i) if the Status Change occurs for any reason other than death, for a
period of six (6) months following the date of the Status Change,
except as provided in clause (ii) below (but in no event beyond the
Final Exercise Date), or
(ii) if the Status Change results from (x) retirement of the Optionee
on or after age 65, (y) retirement on or after age 55 after ten (10)
years of continuous employment by the Company or (z) disability (as
determined by the Company), until the Final Exercise Date, or
(iii) following death, for a period of one year ending upon the first
anniversary of the Optionee's death, not to extend beyond the Final
Exercise Date, or
(iv) such other date as is determined by the Committee at any time
prior to the exercise of this Option (but in no event beyond the Final
Exercise Date).
Notwithstanding the foregoing, if the Optionee's cessation of employment or
service relationship is determined by the Committee in its sole discretion to be
for reasons that cast such discredit on the Optionee as to justify immediate
termination of this Option, this Option shall immediately terminate
simultaneously with the termination of the Optionee's employment or service
relationship.
4. NONTRANSFERABILITY OF OPTION
This Option may not be transferred other than by will or by the laws of
descent and distribution, and during the Optionee's lifetime may be exercised
only by the Optionee (or in the event of the Optionee's incapacity, the person
or persons legally appointed to act on the Optionee's behalf), except that this
Option may be transferred to (i) Immediate Family Members, (ii) a trust or
trusts for the exclusive benefit of Immediate Family Members, or (iii) a
partnership in which such Immediate Family Members are the only partners,
provided that (x) there may be no consideration for any such transfer and (y)
subsequent transfers of this Option shall be prohibited except those made in
accordance with this Section 4. Following such transfer, this Option shall
continue to be subject to all the terms and conditions hereof. "Immediate Family
Members" shall mean the spouse, children and grandchildren of the Optionee.
5. RIGHTS AS A STOCKHOLDER
This Option will not give the Holder rights of a stockholder; the Holder
will obtain such rights upon actual receipt of the Shares. However, the
Committee may, on such conditions as it deems appropriate, provide that the
Holder will receive a benefit in lieu of cash dividends that would have been
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payable on any or all Shares subject to the Option had such Shares been
outstanding. Without limitation, the Committee may provide for payment to the
Holder of amounts representing such dividends, either currently or in the
future, or for the investment of such amounts on behalf of the Holder.
6. ADJUSTMENTS
In the event of a stock dividend, stock split or combination of shares,
recapitalization or other change in the Company's capital structure, the
Committee will make appropriate adjustments to the number of Shares that may be
delivered under this Option, and will also make appropriate adjustments to the
number and kind of Shares subject to the Option then outstanding or subsequently
granted, any exercise price relating to the Option and any other provision of
the Option affected by such change.
The Committee may also make adjustments of the type described above to take
into account distributions to common stockholders, or any other event, if the
Committee determines that adjustments are appropriate to avoid distortion in the
operation of the Option and to preserve the value of the Option made hereunder.
7. REORGANIZATION
In the event of a Covered Transaction (as defined herein), the Committee
may provide for the assumption of the Option, or for the grant of a new option
in substitution therefor, by the acquirer or survivor or an affiliate of such
acquirer or survivor, in each case on such terms and subject to such conditions
as the Committee determines; PROVIDED, that in the absence of such an
assumption, or if there is no surviving or acquiring entity, the Option shall
become fully exercisable at least twenty (20) days prior to the Covered
Transaction and shall terminate upon consummation of the Covered Transaction.
For purposes of this Option, a Covered Transaction shall mean any of (i) a
consolidation, merger or other transaction in which the Company is not the
surviving corporation or which results in the acquisition of all or
substantially all of the Company's then outstanding common stock by a single
person or entity or by a group of persons and/or entities acting in concert,
(ii) a sale or transfer of all or substantially all the Company's assets, or
(iii) a dissolution or liquidation of the Company.
8. WITHHOLDING TAXES
The Committee will have the right to require that the Holder or other
appropriate person remit to the Company an amount sufficient to satisfy the
withholding requirements or make other arrangements satisfactory to the
Committee with regard to such requirements, prior to the delivery of any Shares.
The Committee may, but need not, hold back Shares or permit the Holder to tender
previously owned shares of Stock of the Company in satisfaction of tax
withholding requirements.
9. GENERAL PROVISIONS
(a) AMENDMENT OF OPTION. This Option may not be modified or
amended except by an instrument in writing signed by the Company and
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the Holder and is subject to the terms of any other written agreement
between the Company and the Holder, as from time to time in effect.
(b) GOVERNING LAW. This Option and the respective rights and
obligations of the parties hereunder shall be governed by, and
construed in accordance with, the laws of the Commonwealth of
Massachusetts (without giving effect to the conflict of law principles
thereof).
(c) NOTICES. Notices, demands and all other communications
provided for in this Option shall be in writing and shall be deemed to
have been duly given when delivered, if delivered personally, or
(unless otherwise specified) mailed by United States certified or
registered mail, return receipt requested, postage prepaid, and when
received if delivered otherwise, addressed as set forth in the first
paragraph of this Option or to such other address as any party may have
furnished to the other in writing in accordance herewith, except that
notices of change of address shall be effective only upon receipt.
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IN WITNESS THEREOF, the Company has caused this Option to be executed under
its corporate seal by its duly authorized officer. This Option shall take effect
as a sealed instrument.
MACROCHEM CORPORATION
By: /S/ ROBERT J. DELUCCIA
------------------------------------------
Name: Robert J. DeLuccia
Title: President and Chief Executive Officer
ACCEPTED AND AGREED:
/S/ GLENN E. DEEGAN
Name: Glenn E. Deegan
Dated:
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