NUCRYST PHARMACEUTICALS
CORP.
DIRECTOR STOCK OPTION AWARD
AGREEMENT
GRANT of Options made effective as of (the
“Grant Date”)
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TO:
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(the “Participant” or
“Director”)
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BY:
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NUCRYST Pharmaceuticals Corp. (the
“Company”)
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WHEREAS, on
December 21, 2005, the Board of Directors of the Company (the
“Board”) approved and adopted the Company’s 1998
Equity Incentive Plan (as amended) (the “Plan”) and the
Plan was subsequently approved by the Toronto Stock Exchange;
and
WHEREAS, pursuant
to the Plan, awards of Options may be granted to persons including
members of the Board; and
WHEREAS, by
resolution of the Board made on
, the Board granted the Options provided for herein to the Director
in connection with the Director’s services to the Company,
such grant to be effective the Grant Date and subject to the terms
set forth herein;
NOW THEREFORE, in
consideration of the mutual covenants hereinafter set forth, the
parties hereto agree as follows:
The grant by
the Company to the Participant of Options by this Agreement is made
pursuant to the terms and conditions of the Plan. This Agreement
and the terms and conditions of the grant of Options are subject in
all respects to the terms and conditions of the Plan, which is made
a part of this Agreement. The Participant, by acceptance of this
Agreement, agrees to be bound by the Plan (and any regulations that
may be established under the Plan) and acknowledges receipt of a
copy of the Plan and this Agreement. Terms that are defined in the
Plan and not otherwise defined in this Agreement shall have the
same meaning when used in this Agreement as in the Plan.
The Company
grants to the Participant, effective the Grant Date, 2,000 options
(defined in the Plan and this Agreement as “Options” or
individually as an “Option”) to purchase Common Shares
of the Company (which Common Shares, when purchased by the exercise
of Options, are defined as “Optioned Shares”), subject
to the terms and conditions of this Agreement and the Plan. The
grant of Options herein is intended to be a grant of non-qualified
stock options and shall not be treated or construed as a grant of
an “incentive stock option” as that term is used in
Code Section 422, or any successor provision
thereof.
The exercise
price of each Option (which is defined in the Plan as the
“Option Price”) is $.
Unless earlier
terminated in accordance with the terms of the Plan or this
Agreement, the Options shall terminate on, and may not be exercised
in whole or in part, after 5:00 p.m. (Edmonton, Alberta, Canada
time) on
(the “Expiry Date”); provide, however, that where the
Expiry Date of the Options occurs during a Blackout Period or
within ten Non Blackout Trading Days following the end of a
Blackout Period, the Expiry Date shall be the date which is ten
Non-Blackout Trading Days following the end of such Blackout
Period.
Unless
otherwise set forth in this Agreement, the Options shall vest and
shall become exercisable:
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(a)
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as
to 1/3 of the shares on the first anniversary of the Grant Date
until the Expiry Date;
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(b)
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as
to 1/3 of the shares on the second anniversary of the Grant Date
until the Expiry Date; and
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(c)
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as
to 1/3 of the shares on the third anniversary of the Grant Date
until the Expiry Date.
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Notwithstanding
the vesting provisions contained section 5, in the event that a
Change of Control of the Company or an Elimination of the Public
Float occurs prior to the Expiry Date, the Options shall
immediately become fully vested and exercisable as to all the
Optioned Shares.
Whenever used
in this Agreement, the following terms shall have the meanings set
forth below:
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(a)
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“Change of Control of the
Company” means the occurrence of a transaction or series of
transactions, either alone or in combination with any other events
or transactions, as a result of which:
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(i)
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any
Person (other than the Director or any of his Associates or
Westaim) acquires or becomes the beneficial owner of, or a
combination of Persons (not including the Director or any of his
Associates or Westaim) acting jointly or in concert acquires or
becomes the beneficial owner of, directly or indirectly, more than
50% of the voting securities of the Company, whether through the
acquisition of previously issued and outstanding voting securities,
or of voting securities that have not been previously issued, or
any combination thereof, or any other transaction having a similar
effect;
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(ii)
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the
shareholders of the Company approve: (1) any plan or proposal
for the liquidation or dissolution of the Company; or (2) the
sale, lease, exchange, disposition or other transfer of all or
substantially all of the assets of the Company;
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(iii)
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50%
or more of the issued and outstanding voting securities of the
Company become subject to a voting trust in which neither the
Director nor any of his Associates nor Westaim
participates;
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(iv)
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a
majority of the directors of the Company are removed from office at
any annual or special meeting of shareholders, or a majority of the
directors of the Company (calculated not including the Director)
resign form office over a period of 60 days or less, unless
the vacancies created thereby are either (1) filled by
appointments made by the remaining members of the Board of
Directors of the Company, (2) are filled by nominees proposed
by the Board of Directors, the Director or any of his Associates or
Westaim, or (3) the Board of Directors of the Company determines
not to fill the vacancies in connection with a reduction in the
size of the Board of Di
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