Exhibit 10.3

Form of Substitute Option Award - Canada

 

ARALEZ PHARMACEUTICALS INC.

2016 LONG-TERM INCENTIVE PLAN

AMENDED AND RESTATED SUBSTITUTE STOCK OPTION AWARD

Aralez Pharmaceuticals Inc. (the “Company”) has granted you a Substitute Stock
Option (the “Option”) under the Aralez Pharmaceuticals Inc. 2016 Long-Term
Incentive Plan (the “Plan”).  The terms of the grant are set forth in the
Amended and Restated Substitute Stock Option Award Agreement provided to you
(the “Agreement”).  The following provides a summary of the key terms of the
Option; however, you should read the entire Agreement, along with the terms of
the Plan, to fully understand the grant.

THIS IS NOT A NEW GRANT OF OPTIONS. YOU WERE PREVIOUSLY GRANTED THE ADJUSTED
NUMBER OF OPTIONS WITH THE TERM/EXPIRATION DATE DESCRIBED BELOW (THE “ORIGINAL
AWARD”).  THE PURPOSE OF THIS AMENDED AND RESTATED SUBSITUTE STOCK OPTION AWARD
IS TO CHANGE THE ADJUSTED EXERCISE PRICE PER SHARE FROM CANADIAN DOLLARS TO U.S.
DOLLARS.   THIS AMENDED AND RESTATED SUBSTITUTE STOCK OPTION AWARD AMENDS,
RESTATES AND SUPERSEDES THE ORIGINAL AWARD IN ALL RESPECTS. 

 

AMENDED AND RESTATED SUMMARY OF GRANT

 

 

 

Grantee:

[        ]

Original Date of Grant:

[        ]

Original Number of Options:

[        ]

Adjusted Number of Options:

[        ]

Original Exercise Price Per Share:

$[      ] CAD

Adjusted Exercise Price Per Share:

$[      ] USD

Term/Expiration Date:

[         ]

 

The above is a summary description of certain provisions of the Agreement and is
not intended to be complete.  In the event any aspect of this summary conflicts
with the terms of the Agreement, the terms of the Agreement shall govern.

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Grantee Acceptance:

 

By signing the acknowledgement below, the Grantee agrees to be bound by the
terms and conditions of the Plan, the Agreement and this Amended and Restated
Summary of Grant and accepts the nonqualified stock option grant in accordance
with the terms of this Amended and Restated Summary of Grant, the Agreement and
the Plan.  The Grantee will accept as binding, conclusive and final all
decisions or interpretations of the Compensation Committee of the Company’s
Board of Directors upon any questions arising under the Plan, this Amended and
Restated Summary of Grant or the Agreement. This Amended and Restated Summary of
Grant shall amend, restate and supersede the Summary of Grant with respect to
the grant described above (e.g., grant number, adjusted number of options,
term/expiration date) previously accepted by the Grantee under the Aralez
Pharmaceuticals Inc. 2016 Long-Term Incentive Plan.

 

 

 

 

 

Grantee:

 

 

 

 

 

 

 

 

Date:

 

 

 

 

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Form of Substitute Option Award - Canada

 

ARALEZ PHARMACEUTICALS INC.

2016 LONG-TERM INCENTIVE PLAN

AMENDED AND RESTATED SUBSTITUTE STOCK OPTION AWARD AGREEMENT

This AMENDED AND RESTATED SUBSTITUTE STOCK OPTION AWARD AGREEMENT (the
“Agreement”), dated as of [CLOSING DATE], is delivered by Aralez Pharmaceuticals
Inc. (the “Company”) to the individual whose name is set forth on the Amended
and Restated Summary of Grant (the “Grantee”).

RECITALS

A.On the Original Date of Grant set forth on the Amended and Restated Summary of
Grant (the “Date of rant”), Tribute Pharmaceuticals Canada Inc. (“Tribute”)
granted the Grantee an option to purchase shares of Tribute common stock, no par
value equal to the Original Number of Options (as set forth on the Amended and
Restated Summary of Grant) at an exercise price per share equal to the Original
Exercise Price Per Share (as set forth on the Amended and Restated Summary of
Grant) pursuant to the terms of the Amended and Restated Option Plan of Tribute,
which option is currently outstanding and exercisable (the “Tribute Option”).

B.The Tribute Option has been assumed by the Company as of [CLOSING DATE] and
substituted with an option to purchase common shares of the Company through the
Aralez Pharmaceuticals Inc. 2016 Long-Term Incentive Plan (the “Plan”). The
number of Options awarded to the Grantee and the exercise price per Option (as
adjusted, the “Exercise Price”) have been adjusted to reflect the assumption and
substitution of the Tribute Option by the Company pursuant to terms of the Plan
and, as a result of this Amended and Restated Substitute Stock Option Award
Agreement and related Amended and Restated Summary of Grant, converted from
Canadian dollars to USD based on year end 2016 FX rate for awards outstanding at
that time. In connection with the assumption and substitution of the Tribute
Option, the Tribute Option is cancelled.

C.The terms and conditions of the Option should be construed and interpreted in
accordance with the terms and conditions of this Agreement and the Plan. The
Plan is administered and interpreted by the Compensation Committee of the Board
of Directors of the Company (the “Board”) (or a subcommittee thereof), or such
other committee of the Board (including, without limitation, the full Board) to
which the Board has delegated power to act under or pursuant to the provisions
of the Plan (the “Committee”). The Committee may delegate authority to one or
more subcommittees as it deems appropriate.  If a subcommittee is appointed, all
references in this Agreement to the “Committee” shall be deemed to refer to the
committee. Capitalized terms that are used but not defined herein shall have the
respective meanings accorded to such terms in the Plan. For purposes of this
Agreement, “Company” shall mean the Company and any of its Subsidiaries where
applicable.

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Form of Substitute Option Award - Canada

 

NOW, THEREFORE, the parties to this Agreement, intending to be legally bound
hereby, agree as follows:

1. Substitution of Option.  Subject to the terms and conditions set forth in
this Agreement and in the Plan, the Company hereby grants to the Grantee a
Nonqualified Stock Option (the “Option”) to purchase the number of common shares
of the Company (“Shares”) equal to the Adjusted Number of Options (as set forth
on the Amended and Restated Summary of Grant) at an exercise price per Share
equal to the Adjusted Exercise Price Per Share (as set forth in the Amended and
Restated Summary of Grant), as a substitution for the Tribute Option. The Option
is fully vested and exercisable on the date hereof.

2. Term of Option.

(a) The Option shall have a term of five (5) years from the Date of Grant and
shall terminate at the expiration of that period, unless it is terminated at an
earlier date pursuant to the provisions of this Agreement or the Plan.

(b) Unless a later termination date is provided for in a Company-sponsored plan,
policy or arrangement, or any agreement to which the Company is a party, the
Option shall automatically terminate upon the happening of the first of the
following events:

(i) The expiration of the thirty (30) day period after the Grantee ceases to be
employed by, or provide service to, the Company, if the termination is for any
reason other than the Grantee’s death, permanent disability, or retirement at
normal retirement age (including early retirement in accordance with the
Company’s then current plans, policies or practices with respect thereto). 

(ii) The expiration of the one (1) year period after the Grantee ceases to be
employed by, or provide service to, the Company on account of the Grantee’s
death, permanent disability, or retirement at normal retirement age (including
early retirement in accordance with the Company’s then current plans, policies
or practices with respect thereto).

The date the Grantee ceases to be employed by, or provide services to, the
Company shall be determined without regard to any period of statutory,
contractual or reasonable notice, deemed employment, pay in lieu of notice or
salary continuance provided or required to be provide by the Company.

Notwithstanding the foregoing, in no event may the Option be exercised after the
date that is immediately before the fifth anniversary of the Date of Grant. 

 

 

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Form of Substitute Option Award - Canada

 

3. Exercise Procedures

(a) Subject to the provisions of Paragraph 2 above, the Grantee may exercise
part or all of the Option by giving the Company written notice of intent to
exercise in the manner provided in this Agreement, specifying the number of
Shares as to which the Option is to be exercised.  On the delivery date, the
Grantee shall pay the exercise price (i) in cash, (ii) payment through a broker
in accordance with procedures permitted by Regulation T of the Federal Reserve
Board, or (iii) by such other method as the Committee may approve, to the extent
permitted by applicable law.

(b) The obligation of the Company to deliver Shares upon exercise of the Option
shall be subject to all applicable laws, rules, and regulations and such
approvals by governmental agencies as may be deemed appropriate by the Company,
including such actions as Company counsel shall deem necessary or appropriate to
comply with relevant securities laws and regulations.    

(c) The Company may require that the Grantee (or other person exercising the
Option after the Grantee’s death) represent that the Grantee is purchasing
Shares for the Grantee’s own account and not with a view to or for sale in
connection with any distribution of the Shares, or such other representation as
the Committee deems appropriate.

(d) All obligations of the Company under this Agreement shall be subject to the
rights of the Company as set forth in the Plan to withhold amounts required to
be withheld for any taxes, if applicable.  Notwithstanding Section 8 of the
Plan, Tax Withholding Obligations cannot be settled in whole or in part with
Shares surrendered to, or withheld by, the Company.

4. Change in Control.  The provisions of the Plan applicable to a Change in
Control (as described in Section 11 of the Plan) or other corporate transaction,
shall apply to the Option.

5. Restrictions on Exercise.  Except as the Company may otherwise permit
pursuant to the Plan, only the Grantee may exercise the Option during the
Grantee’s lifetime and, after the Grantee’s death, the Option shall be
exercisable (subject to the limitations specified in the Plan) solely by the
legal representatives of the Grantee, or by the person who acquires the right to
exercise the Option by will or by the laws of descent and distribution, to the
extent that the Option is vested and exercisable pursuant to this Agreement.

6. Adjustments.  The provisions of the Plan applicable to adjustments (as
described in Section 10 of the Plan) shall apply to the Option.

7. Grant Subject to Plan Provisions.  This grant is made pursuant to the Plan,
the terms of which are incorporated herein by reference, and in all respects
shall be interpreted in accordance with the Plan.  The grant and exercise of the
Option are subject to interpretations, regulations and determinations concerning
the Plan established from time to time by the Committee in accordance with the
provisions of the Plan, including, but not limited to, provisions pertaining to
(i) rights and obligations with respect to withholding taxes, (ii) the
registration, qualification or listing of the Shares, (iii) changes in
capitalization of the Company and (iv) other requirements of applicable
law.  The Committee shall have the authority to interpret and construe the
Option pursuant to the terms of the Plan, and its decisions shall be conclusive
as to any questions arising hereunder.

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Form of Substitute Option Award - Canada

 

8. No Employment or Other Rights.  The grant of the Option shall not confer upon
the Grantee any right to be retained by or in the employ or service of the
Company (or any of its Subsidiaries) and shall not interfere in any way with the
right of the Company (or any of its Subsidiaries) to terminate the Grantee’s
employment or service at any time.  The right of the Company (or any of its
Subsidiaries) to terminate the Grantee’s employment or service at any time for
any reason is specifically reserved. If a Grantee’s employment with, or services
to, the Company (or any of its Subsidiaries) is terminated for any reason
whatsoever, no value will be ascribed to any unvested Options for the purposes
of any severance entitlement.

9. No Stockholder Rights.  Neither the Grantee, nor any person entitled to
exercise the Grantee’s rights in the event of the Grantee’s death, shall have
any of the rights and privileges of a stockholder with respect to the Shares
subject to the Option, until certificates for Shares have been issued upon the
exercise of the Option.

10. Delivery Subject to Legal Requirements. The obligation of the Company to
deliver Shares pursuant to the exercise of the Option shall be subject to the
condition that if at any time the Board shall determine in its discretion that
the listing, registration or qualification of the shares upon any securities
exchange or under any applicable law, or the consent or approval of any
governmental regulatory body is necessary or desirable as a condition of, or in
connection with, the issue of shares, the shares may not be issued in whole or
in part unless such listing, registration, qualification, consent or approval
shall have been effected or obtained free of any conditions not acceptable to
the Board.  The issuance of Shares to the Grantee pursuant to the exercise of
the Option is subject to any applicable taxes and other laws or regulations of
the United States, or of any state or foreign jurisdiction having jurisdiction
thereof.

11. Assignment and Transfers.  Except as the Committee may otherwise permit
pursuant to the Plan, the rights and interests of the Grantee under this
Agreement may not be sold, assigned, encumbered or otherwise transferred except,
in the event of the death of the Grantee, by will or by the laws of descent and
distribution.  In the event of any attempt by the Grantee to alienate, assign,
pledge, hypothecate, or otherwise dispose of the Option or any right hereunder,
except as provided for in this Agreement, or in the event of the levy or any
attachment, execution or similar process upon the rights or interests hereby
conferred, the Company may terminate the Option by notice to the Grantee, and
the Option and all rights hereunder shall thereupon become null and void.  The
rights and protections of the Company hereunder shall extend to any successors
or assigns of the Company and to the Company’s parents, subsidiaries, and
affiliates.  This Agreement may be assigned by the Company without the Grantee’s
consent.

12. Applicable Law.  The validity, construction, interpretation and effect of
this Agreement shall be governed by and construed in accordance with the laws of
the State of New Jersey, without giving effect to the conflicts of laws
provisions thereof.

13. Notice.  Any notice to the Company provided for in this Agreement shall be
addressed to the Company in care of the Committee, and any notice to the Grantee
shall be addressed to such Grantee at the current address shown on the payroll
of the Company, or to such other address as the Grantee may designate to the
Company in writing.  Any notice shall be delivered by hand, sent by telecopy or
enclosed in a properly sealed envelope addressed as stated above, deposited,
postage

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Form of Substitute Option Award - Canada

 

prepaid, in a post office regularly maintained by the United States Postal
Service or Canada Post Corporation, as applicable.

14. Counterparts. This Agreement may be executed in one or more counterparts,
each of which will be deemed to be an original copy of this Agreement and all of
which, when taken together, will be deemed to constitute one and the same
agreement.  Facsimile or other electronic transmission of any signed original
document or retransmission of any signed facsimile or other electronic
transmission will be deemed the same as delivery of an original.

15. Complete Agreement.  Except as otherwise provided for herein, this Agreement
and those agreements and documents expressly referred to herein embody the
complete agreement and understanding among the parties and supersede and preempt
any prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any
way.  The terms of this Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Grantee.  This Agreement,
shall amend, restate and supersede the Substitute Stock Option Award Agreement,
dated as of February 5, 2016, previously entered into by the Grantee under the
Aralez Pharmaceuticals Inc. 2016 Long-Term Incentive Plan with respect to the
grant described in the Amended and Restated Summary of Grant (e.g., grant
number, adjusted number of options, term/expiration date).]

16. Committee Authority.  By entering into this Agreement the Grantee agrees and
acknowledges that all decisions and determinations of the Committee shall be
final and binding on the Grantee, his or her beneficiaries and any other person
having or claiming an interest in the Award.

 

 

 

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