EXHIBIT 10.43
(QLT INC. LOGO)
887 GREAT NORTHERN WAY
VANCOUVER, BC CANADA V5T 4T5
T 604.707.7000
F 604.707.7001
WWW.QLTINC.COM
[Date]
To:[[FIRST_NAME]] [[LAST_NAME]]
Personal and Confidential
Re: Notification of Stock Option Grant
I am pleased to inform you that the Board of Directors has approved the granting
to you of an option (the "Option") to purchase [[AMOUNT]] common shares of the
Company's common stock (the "Optioned Shares") at an exercise price of [PRICE]
(the "Exercise Price"), effective [GRANT DATE] (the "Grant Date"), in
recognition of your contribution to the Company. The Option will expire FIVE
years from the Grant Date, on [GRANT DATE + 5 YRS] (the "Expiry Date").
The terms and conditions which govern this Option are set out in three places:
in this letter (the "Notification Letter"), in the attached schedule which sets
out general terms and conditions relating to option grants to Company employees
(the "General Terms"), and in the 2000 QLT Incentive Stock Option Plan (the
"Plan") from which your Option has been granted.
By signing this letter where indicated, you and the Company agree that the
Option is granted under and governed by the terms and conditions of this
Notification Letter, the General Terms and the Plan, all of which together
constitute the agreement (the "Agreement"), between you and the Company relating
to the Option.
Please confirm receipt of this Notification Letter by signing both copies, and
returning one copy to the Human Resources department, attention Vivian Jung, as
soon as possible. You may keep the second copy for your personal records.
In the event that you do not return this Notification Letter signed, you will be
deemed to have accepted the Agreement upon the exercise by you of the Option in
respect of any Optioned Share(s).
Yours truly,
QLT Inc.
Per:
Senior Vice-President, Human Resources and Organizational Development
Accepted and agreed to: Date:
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GENERAL TERMS AND CONDITIONS
STOCK OPTION GRANTS TO EXECUTIVES
1. DEFINED TERMS. All capitalized terms which are not defined in the
Notification Letter or below have the meaning given to them in the Plan.
2. TERM. Subject to the terms and conditions of the Agreement and the
terms of the Plan, the Option will terminate on the earlier of:
(a) The date on which the Option is exercised with respect to all of the
Optioned Shares; and
(b) 5:00 p.m. (Vancouver time) on the Expiry Date.
3. VESTING. Subject to the terms and conditions of the Agreement, the
Optioned Shares will vest and become exercisable in 36 equal monthly
instalments on the monthly anniversary of the Grant Date (the "VESTING
DATE"), provided that, if the number of Optioned Shares is not equally
divisible by 36, at each Vesting Date the cumulative number of Optioned
Shares vested will be rounded to the nearest whole number.
4. EXERCISE OF OPTIONS.
(a) Exercise Notice. The employee to whom the Option has been granted
may exercise the Option in respect of vested Optioned Shares by
giving three days' (or less, in the sole discretion of the Company)
written notice of exercise (the "EXERCISE NOTICE") signed and dated
by the Optionee (and not postdated), stating that the Optionee
elects to exercise his or her rights to purchase Optioned Shares
under the Option and specifying the number of Optioned Shares in
respect of which the Option is being exercised.
(b) Delivery and Payment. The Optionee shall deliver the Exercise Notice
to the Company at its principal office at 887 Great Northern Way,
Vancouver, British Columbia, Canada, V5T 4T5 (or at such other
address as the principal office of the Company may be located at the
time of exercise) addressed to the attention of the secretary or
assistant secretary of the Company (or a designee notified in
writing from time to time by the Company) and be accompanied by full
payment (payable at par in Vancouver, British Columbia) in any
combination of the following: (i) cash, bank draft or certified
cheque; or
(ii) irrevocable instructions to:
(A) a brokerage firm designated by the Company to deliver
promptly to the Company the aggregate amount of sale or
loan proceeds to pay the Option exercise price and any
withholding tax obligations (if applicable) that may
arise in connection with the exercise, and
(B) the Company to deliver the certificates for such
purchased shares directly to the brokerage firm,
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all in accordance with the regulations of any relevant
regulatory authorities.
(c) Certificate. As soon as practicable after any exercise of the
Option, the Company will deliver or cause to be delivered to the
Optionee or the Optionee's designated brokerage firm, as applicable,
a certificate or certificates representing the Common Shares in
respect of which the Option is exercised.
5. RULES UPON RETIREMENT, DEATH, DISABILITY OR TERMINATION. The Option will
terminate on the earlier of the 90th day after the date on which the
Optionee ceases to be an employee of the Company or its Affiliates or the
expiry of the Option, provided that:
(a) Retirement. If the Optionee ceases to be an employee of the Company
or any Affiliate by reason of retirement (the date of retirement or
cessation herein being called the "RETIREMENT DATE") and:
(i) the Optionee:
(A) has worked on behalf of the Company or any Affiliate for
at least 20 years, or
(B) is at least 60 years of age and has worked continuously
on behalf of the Company or any Affiliate for at least
five years,
then all Optioned Shares of the Optionee will become
immediately vested and will be exerciseable on and after the
retirement date until the expiry of the Option; or
(ii) the Optionee has received the consent of the Committee at or
after an earlier age and upon completion of that number of
years of service as the Committee may specify, then all
Optioned Shares of the Optionee will become immediately vested
and will be exerciseable on and after the retirement date,
during a period of the earlier of:
(A) 90 days following the retirement date, or
(B) the expiry of the Option,
unless otherwise determined by the Committee and approved by the
Exchange (if applicable).
(b) Death. If the Optionee dies while the Option is otherwise
exerciseable, unless otherwise determined by the Committee and
approved by the Exchange (if applicable), all Optioned Shares of the
Optionee will become immediately vested and will be exerciseable by
the legal personal representatives of the estate of the Optionee
during a period of the earlier of:
(i) 12 months following the date of death, or
(ii) the expiry of the Option.
(c) Disability. If the Optionee has his or her Continuous Status as an
employee of the Company or any Affiliate terminated as a result of
the Optionee's complete disability, as determined by the Committee
in its sole discretion, unless otherwise determined by the Committee
and approved by the Exchange (if applicable), the Optioned Shares
will become immediately vested and will be exerciseable by the
Optionee (or in the case of an Optionee who is legally
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incapacitated, by his or her guardians or legal representatives)
during the period ending on the earlier of:
(i) 12 months following the date of such termination, or
(ii) the expiry of the Option.
(d) Termination.
(i) If the Optionee is terminated by the Company (which, for
greater certainty, excludes a resignation of the Optionee) as
an employee of the Company or any Affiliate other than for
cause (the date of termination herein being called the
"TERMINATION DATE"), unless otherwise determined by the
Committee and approved by the Exchange (if applicable),
one-half of the previously unvested Optioned Shares of the
Optionee will become immediately vested and all of the
Optioned Shares which have vested will be exercisable on and
after the termination date, for the period ending on the
earlier of:
(A) 90 days following the termination date, or
(B) the expiry of the Option.
(ii) If the Optionee is terminated by the Company as an employee of
the Company or any Affiliate for cause, unless otherwise
determined by the Committee and approved by the Exchange (if
applicable), the Option will expire automatically on the date
that the Optionee ceases to be an employee of the Company or
any Affiliate.
The Optioned Shares will cease to vest (on a monthly basis or at all)
after the date on which the Optionee ceases to be an employee of the
Company.
6. CHANGE IN CONTROL.
(a) Definitions. For the purposes of this Section, "CHANGE IN CONTROL"
means any of the following events:
(I) MERGER. A merger, consolidation, reorganization or arrangement
involving the Company other than a merger, consolidation,
reorganization or arrangement in which stockholders of the
Company immediately prior to such merger, consolidation,
reorganization or arrangement own, directly or indirectly,
securities possessing at least 65% of the total combined
voting power of the outstanding voting securities of the
corporation resulting from such merger, consolidation,
reorganization or arrangement in substantially the same
proportion as their ownership of such voting securities
immediately prior to such merger, consolidation,
reorganization or arrangement,
(II) TENDER OFFER. The acquisition, directly or indirectly, by any
person or related group of persons acting jointly or in
concert (other than the Company or a person that directly or
indirectly controls, is controlled by, or is under common
control with, the Company) of beneficial ownership of
securities possessing more than 35% of the total combined
voting power of the Company's outstanding securities pursuant
to a tender offer made directly to the Company's stockholders,
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(III) SALE. The sale, transfer or other disposition of all or
substantially all of the assets of the Company other than to
an Affiliate of the Company as part of a corporate
reorganization of the Company, or
(IV) BOARD CHANGE. A change in the composition of the Board over a
period of 24 consecutive months or less such that a two-thirds
majority of the Board members ceases to be comprised of
individuals who either:
(A) Have been Board members continuously since the beginning
of such period, or
(B) Have been elected or nominated for election as Board
members during such period by at least a majority of the
Board members described in clause (A) who were still in
office at the time the Board approved such election or
nomination.
(b) Acceleration. Immediately upon the occurrence of a Change in
Control, all Optioned Shares of the Optionee will become immediately
vested and will be exercisable on and after the date of the Change
of Control until the expiry of the Option.
7. CONDITIONS TO EXERCISE. Notwithstanding any of the provisions of the
Agreement, the Company's obligation to issue Common Shares to the Optionee
upon exercise of the Option is subject to the following:
(a) Qualification. Completion of registration or other qualification of
the Common Shares or obtaining approval of such governmental
authority as the Company determines is necessary or advisable in
connection with the authorization, issuance or sale of the Common
Shares;
(b) Listing. The admission of the Common Shares to listing or quotation
on the Exchange; and
(c) Undertakings. The receipt by the Company from the Optionee of such
representations, agreements and undertakings, including as to future
dealings in the Common Shares, as the Company determines are
necessary or advisable in order to safeguard against the violation
of securities laws of any jurisdiction.
8. ADJUSTMENTS. In the event that there is any material change in the Common
Shares resulting from subdivisions, consolidations, substitutions or
reclassifications of the Common Shares, the payment of stock dividends by
the Company (other than dividends in the ordinary course) or other
relevant changes in the capital of the Company or from a proposed merger,
amalgamation or other corporate arrangement or reorganization involving
the exchange or replacement of Common Shares for those in another
corporation, appropriate adjustments in the number of Optioned Shares and
the exercise price thereof will be conclusively determined by the
Committee.
9. FURTHER ADJUSTMENTS. Subject to Sections 6 and 8, if, because of a
proposed merger, amalgamation or other corporate arrangement or
reorganization, the exchange or replacement of Common Shares for those in
another corporation is imminent, the Committee may, in a fair and
equitable manner, determine the manner in which all unexercised option
rights granted under this Option will be treated including, without
limitation, requiring the acceleration of the time for the exercise of the
option rights by the Optionee and of the time for the fulfilment of any
conditions or restrictions on exercise. All determinations of the
Committee under this Section will be final, binding and conclusive for all
purposes subject to the approval of the Exchange, if applicable.
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10. TAX. The Optionee is solely responsible for the payment of any applicable
taxes arising from the grant, vesting or exercise of the Option.
Notwithstanding the foregoing, the Company will have the right to withhold
from any Optioned Shares or from any cash amounts otherwise due to the
Optionee an amount equal to the applicable taxes.
11. LOCK OUT PERIODS. The Optionee acknowledges and agrees that the Agreement
and the grant of the Option to the Optionee is subject to the Optionee's
agreement to at all times comply with the Company's policies with respect
to Lock Out Periods, as more particularly set out in the Company's Policy
and Procedures Manual, as amended from time to time.
12. NO RIGHTS AS SHAREHOLDER. The Optionee will not have any rights as a
shareholder of the Company in respect of any of the Common Shares covered
by the Option until the Optionee has exercised the Option and the Company
has issued Common Shares to the Optionee, both in accordance with the
terms of the Plan and the Agreement.
13. NO EFFECT ON EMPLOYMENT. Nothing in the Agreement will:
(a) Continue Employment. Confer upon the Optionee any right to continue
in the employ of or under contract with the Company or any Affiliate
or affect in any way the right of the Company or any Affiliate to
terminate his or her employment at any time.
(b) Extend Employment. Be construed to constitute an agreement, or an
expression of intent, on the part of the Company or any Affiliate to
extend the employment of the Optionee beyond the time that he or she
would normally be retired pursuant to the provisions of any present
or future retirement plan or policy of the Company or any Affiliate,
or beyond the time at which he or she would otherwise be retired
pursuant to the provisions of any contract of employment with the
Company or any Affiliate.
14. ENUREMENT. The Agreement shall enure to the benefit of and be binding upon
the parties to the Agreement and upon the successors or assigns of the
Company and upon the executors, administrators and legal personal
representatives of the Optionee.
15. FURTHER ASSURANCES. Each of the parties to the Agreement will do such
further acts and execute such further documents as may required to give
effect to and carry out the intent of the Agreement.
16. NON-ASSIGNABLE. The Option is personal to the Optionee and may not be
assigned or transferred in whole or in part, except by will or by the
operation of the laws of devolution or distribution and descent.
17. AMENDMENTS. Any amendments to the Agreement must be in writing duly
executed by the parties and will be subject to the approval of the
applicable regulatory authorities.
18. TIME OF THE ESSENCE. Time will be of the essence of the Agreement.
19. GOVERNING LAW. The Agreement shall be governed, construed and enforced
according to the laws of the Province of British Columbia and is subject
to the exclusive jurisdiction of the courts of the Province of British
Columbia.
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20. INTERPRETATION OF THE AGREEMENT AND THE PLAN. If any question or dispute
arises as to the interpretation of the Agreement, the question or dispute
will be determined by the Committee and such determination will be final,
conclusive and binding on both the Company and the Optionee. If there is
any conflict between these General Terms and the Plan, the Plan, as
amended from time to time, will govern.
THESE GENERAL TERMS AND CONDITIONS ARE DATED FOR REFERENCE: MARCH 19, 2003
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