As filed with the Securities and Exchange Commission on July 31, 2017
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
NOVELION THERAPEUTICS INC.
(Exact name of registrant as specified in its charter)
British Columbia, Canada |
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N/A |
(State or other jurisdiction of |
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(I.R.S. Employer |
incorporation or organization) |
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Identification No.) |
887 Great Northern Way, Suite 250
Vancouver, British Columbia
Canada V5T 4T5
(Address, including zip code, of registrants principal executive offices)
Novelion Therapeutics Inc. 2017 Employee Stock Purchase Plan
(Full title of the Plan)
Benjamin Harshbarger
General Counsel and Secretary
Novelion Therapeutics Inc.
887 Great Northern Way, Suite 250
Vancouver, British Columbia
Canada V5T 4T5
(604) 707-7000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Paul M. Kinsella |
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Janet Grove |
Zachary R. Blume |
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Norton Rose Fulbright LLP |
Ropes & Gray LLP |
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1800 510 West Georgia Street |
Prudential Tower |
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Vancouver, British Columbia |
800 Boylston Street |
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Canada V6B 0M3 |
Boston, MA 02199-3600 |
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(604) 641-4824 |
(617) 951-7000 |
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company and emerging growth company in Rule 12b2 of the Exchange Act.
Large accelerated filer o |
Accelerated filer x |
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Non-accelerated filer o (Do not check if a smaller reporting company) |
Smaller reporting company o |
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Emerging growth company o |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. o
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 shares, without par value, under the Novelion Therapeutics Inc. 2017 Employee Stock Purchase Plan (the ESPP) |
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278,710 |
(2) |
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9.16 |
(3) |
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2,552,983.60 |
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$ |
295.89 |
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(1) Pursuant to Rule 416(a) of the Securities Act of 1933, as amended (the Securities Act), this Registration Statement on Form S-8 (the Registration Statement) also covers an indeterminate number of securities that may become issuable under the ESPP described herein as a result of a stock dividend, market split or other recapitalization.
(2) Represents common shares (Common Shares) of Novelion Therapeutics Inc. (the Registrant) reserved for issuance in respect of future purchases under the ESPP. For more details, please see the explanatory note following this page.
(3) Estimated solely for purposes of calculating the registration fee in accordance with Rules 457(c) and 457(h) under the Securities Act, based on a price of $9.16 per share, which represents the average of the high and low sales prices per Common Share as reported on The NASDAQ Stock Market on July 27, 2017.
(4) Determined in accordance with Section 6(b) of the Securities Act at a rate equal to $115.90 per $1,000,000 of the proposed aggregate offering price.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I of Form S-8 will be delivered to the participants in the ESPP as specified by Rule 428(b)(1) of the Securities Act. In accordance with Rule 428 of the Securities Act and the requirements of Part I of Form S-8, such documents are not being filed with the Securities and Exchange Commission (the Commission) either as part of this Registration Statement or as prospectuses or prospectus supplements pursuant to Rule 424 of the Securities Act. The Registrant shall maintain a file of such documents in accordance with the provisions of Rule 428(a)(2) of the Securities Act. Upon request, the Registrant shall furnish to the Commission or its staff a copy of any or all of the documents included in the file.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The Commission allows the Registrant to incorporate by reference the information the Registrant files with it, which means that the Registrant can disclose important information to you by referring to those documents. The information incorporated by reference is an important part of this Registration Statement, and information that we file later with the Commission will automatically update and supersede this information. The Registrant incorporates by reference the following documents that have been filed by it with the Commission:
1. The Registrants Annual Report on Form 10-K for the fiscal year ended December 31, 2016, filed with the Commission on March 30, 2017;
2. The Registrants Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, filed with the Commission on May 9, 2017;
3. The Registrants Current Reports on Form 8-K filed with the Commission on January 9, 2017, March 7, 2017, March 15, 2017, March 31, 2017, April 13, 2017, April 19, 2017, May 9, 2017, June 1, 2017 and June 29, 2017; and
4. The description of the Registrants Common Shares contained in the Registrants Registration Statement on Form S-3, filed on October 24, 2016.
In addition, all documents that the Registrant subsequently files pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the Exchange Act), prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be a part hereof from the date of filing of such documents. However, any documents or portions thereof, whether specifically listed above or filed in the future, that are not deemed filed with the Commission, including, without limitation, the certifications required by Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act, any information furnished pursuant to Item 2.02 or 7.01 of Form 8-K and certain exhibits furnished pursuant to Item 9.01 of Form 8-K, shall not be deemed to be incorporated by reference in this Registration Statement.
Any statement in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for the purposes of this Registration Statement to the extent that a statement contained herein or in any other subsequently filed document which also is incorporated or deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Under Section 160 of the Business Corporations Act (British Columbia) (the BCA), the Registrant may indemnify an eligible party, including, but not limited to, a director or officer of the Registrant, a former director or officer of the Registrant or another individual who acts or acted at the Registrants request as a director or officer, or in a similar capacity, against all judgments, penalties or fines awarded or imposed in, or an amount paid in settlement of, a proceeding in which an eligible party or any of the heirs and personal or other legal representatives of the eligible party, by reason of such party having been a director or officer of, or holding or having held a position equivalent to that of a director or officer of, the Registrant or an associated corporation, to which such party is or may be liable. Indemnification will be prohibited if (i) giving indemnity or paying expenses is or was prohibited in the Registrants Memorandum or Articles, (ii) if in relation to the subject matter of the eligible proceeding, the eligible party did not act honestly and in good faith with a view to the best interests of the Registrant or (iii) in the case of an eligible proceeding other than a civil proceeding, if the eligible party did not have reasonable grounds for believing that the eligible partys conduct in respect of which the proceeding was brought was lawful. The BCA also provides, under Section 162, that the Registrant may also advance moneys to a director, officer or other individual for costs, charges and expenses actually and reasonably incurred, as such costs, charges and expenses are incurred in advance of the final disposition of such a proceeding; however, the individual must agree in writing to undertake that if it is ultimately determined that the payment of expenses is prohibited by any of conditions (i), (ii) or (iii) above, the eligible party will repay the amounts advanced.
The Registrants Articles provide that the Registrant shall indemnify, and pay expenses in advance of the final disposition of a proceeding of, a director or officer, a former director or officer or a person who acts or acted at the Registrants request as a director or officer, or in a similar capacity of another entity, and the heirs and personal or other legal representatives of such a person, in accordance with, and to the fullest extent and in all circumstances permitted by, the BCA.
The Registrant has entered into indemnification agreements with its officers and directors in respect of any legal claims or actions initiated against them in their capacity as officers and directors of the Registrant or the Registrants subsidiaries in accordance with applicable law. These agreements include bearing the reasonable cost of legal representation in any legal or regulatory action in which they may become involved in their capacity as the Registrants officers and directors. Pursuant to such indemnities, the Registrant bears the cost of the representation of certain officers and directors.
The Registrant maintains insurance for certain liabilities incurred by its directors and officers acting in covered capacities.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The list of exhibits filed as part of this Registration Statement is set forth in the Exhibit Index immediately preceding the exhibits hereto and is incorporated herein by reference.
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the Calculation of Registration Fee table in the effective Registration Statement; and
(iii) To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement;
provided , however , that the undertakings set forth in paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby further undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrants annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plans annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in this Registration Statement shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 Toronto in Ontario, Canada, on July 31, 2017.
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NOVELION THERAPEUTICS INC. |
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By: |
/s/ Mary Szela |
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Name: |
Mary Szela |
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Title: |
Chief Executive Officer and Director |
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature appears below constitutes and appoints Mary Szela, Chief Executive Officer and Director, Gregory Perry, Chief Financial and Administrative Officer, and Benjamin Harshbarger, General Counsel and Secretary, and each of them, any of whom may act without joinder of the other, his or her true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including pre-effective and post-effective amendments, to this Registration Statement on Form S-8 under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on the 31st day of July, 2017.
Signature |
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Title |
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/s/ Mary Szela |
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Chief Executive Officer and Director
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Mary Szela |
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/s/ Gregory Perry |
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Chief Financial and Administrative Officer
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Gregory Perry |
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/s/ Barbara Chan |
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President and Chief Accounting Officer, Aegerion
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Barbara Chan |
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/s/ Jason Aryeh |
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Director |
Jason Aryeh |
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Signature |
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Title |
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/s/ Mark Corrigan |
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Director |
Mark Corrigan |
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/s/ Geoffrey Cox |
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Director |
Geoffrey Cox |
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/s/ Kevin Kotler |
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Director |
Kevin Kotler |
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/s/ John Orloff |
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Director |
John Orloff |
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/s/ Jorge Plutzky |
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Director |
Jorge Plutzky |
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/s/ Stephen Sabba |
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Director |
Stephen Sabba |
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/s/ Donald Stern |
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Director |
Donald Stern |
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/s/ John C. Thomas, Jr. |
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Director |
John C. Thomas, Jr. |
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EXHIBIT INDEX
Exhibit
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Description |
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3.1 |
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Articles of the Registrant, dated May 25, 2005. |
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Exhibit 3.2 to the Companys Current Report on Form 8-K, filed with the SEC on June 1, 2005. |
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4.1 |
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Specimen Common Share Certificate of the Registrant. |
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Exhibit 4.1 to the Registrants Current Report on Form 8-K, filed with the Commission on December 16, 2016. |
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4.2 |
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Indenture, dated August 15, 2014, by and between Aegerion Pharmaceuticals, Inc. and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to the 2.00% Convertible Senior Notes Due 2019. |
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Exhibit 4.1 to Aegerion Pharmaceuticals, Inc.s Current Report on Form 8-K, filed with the Commission on August 15, 2014. |
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4.3 |
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Amended and Restated Supplemental Indenture, dated May 8, 2017, by and among Aegerion Pharmaceuticals, Inc., the Registrant, and The Bank of New York Mellon Trust Company, N.A., as trustee, relating to the 2.00% Convertible Senior Notes Due 2019. |
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Exhibit 4.1 to the Registrants Quarterly Report on Form 10-Q, filed with the Commission on May 9, 2016. |
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5.1 |
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Opinion of Norton Rose Fulbright LLP. |
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Filed herewith. |
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23.1 |
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Consent of Deloitte LLP, independent registered public accounting firm. |
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Filed herewith. |
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23.2 |
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Consent of Norton Rose Fulbright LLP. |
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Included in Exhibit 5.1. |
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24 |
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Power of Attorney. |
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Contained on signature page. |
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99.1 |
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Novelion Therapeutics Inc. 2017 Employee Stock Purchase Plan. |
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Filed herewith. |
Exhibit 5.1
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July 31, 2017 |
Barristers & Solicitors / Patent & Trade-mark Agents |
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Norton Rose Fulbright Canada LLP |
Novelion Therapeutics Inc. |
Royal Bank Plaza, South Tower, Suite 3800 |
887 Great Northern Way, Suite 250 |
200 Bay Street, P.O. Box 84 |
Vancouver, BC V5T 4T5 |
Toronto, Ontario M5J 2Z4 CANADA |
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F: +1 416.216.3930 |
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nortonrosefulbright.com |
Dear Sirs/Mesdames:
Re: Novelion Therapeutics Inc.
We have acted as Canadian counsel to Novelion Therapeutics Inc. (the Company ) in the Province of British Columbia (the Province ) in connection with the Registration Statement on Form S-8 (the Registration Statement ) filed with the U.S. Securities and Exchange Commission (the SEC ) under the United States Securities Act of 1933, as amended, and the rules and regulations thereunder (the Act ), relating to the registration by the Company of up to 278,710 common shares without par value ( Common Shares ) issuable under the Novelion 2017 Employee Stock Purchase Plan (the ESPP ).
This opinion is being delivered in connection with the Registration Statement, to which this opinion appears as an exhibit.
We have examined the Registration Statement. We also have examined the originals, or duplicate, certified, conformed, telecopied or photostatic copies, of such corporate records, agreements, documents and other instruments and have made such other investigations as we have considered necessary or relevant for the purposes of this opinion. With respect to the accuracy of factual matters material to this opinion, we have relied upon certificates or comparable documents and representations of public officials and of representatives of the Company.
In giving this opinion, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to authentic original documents of all documents submitted to us as duplicates, certified, conformed, telecopied or photostatic copies and the authenticity of the originals of such latter documents.
We are solicitors qualified to carry on the practice of law in the Province only and we express no opinion as to any laws or matters governed by any laws other than the laws of British Columbia and the federal laws of Canada applicable therein. The opinions expressed in this opinion letter are based on laws in effect as of the date hereof. We assume no obligation to revise or amend this opinion letter should the applicable laws subsequently change.
Based and relying upon the foregoing, and subject to the qualifications, assumptions and limitations stated herein, we are of the opinion that the Common Shares have been duly authorized and, when issued from time to time upon the due exercise, vesting or other settlement of awards under the ESPP in accordance with the terms
Norton Rose Fulbright Canada LLP is a limited liability partnership established in Canada.
Norton Rose Fulbright Canada LLP, Norton Rose Fulbright LLP, Norton Rose Fulbright Australia, Norton Rose Fulbright South Africa Inc and Norton Rose Fulbright US LLP are separate legal entities and all of them are members of Norton Rose Fulbright Verein, a Swiss verein. Norton Rose Fulbright Verein helps coordinate the activities of the members but does not itself provide legal services to clients. Details of each entity, with certain regulatory information, are at nortonrosefulbright.com.
and conditions of any agreement governing the grant of such awards, including the payment of any exercise price applicable thereto, will be validly issued by the Company, fully paid and non-assessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration Statement. In giving the foregoing consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the SEC promulgated thereunder.
The opinion expressed herein is provided solely for your benefit in connection with the filing of the Registration Statement with the SEC and may not be relied on for any other purpose or relied upon by, or furnished to, any other person, firm or corporation, or quoted from or referred to in any document other than the Registration Statement, or used for any other purpose, without our prior written consent.
Yours truly,
/s/ Norton Rose Fulbright Canada LLP
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in this Registration Statement on Form S-8 of our reports dated March 30, 2017, relating to the consolidated financial statements of Novelion Therapeutics Inc. and subsidiaries (formerly QLT Inc.) (the Company) and the internal control over financial reporting (which report expresses an adverse opinion on the effectiveness of the Companys internal control over financial reporting due to a material weakness) appearing in the Annual Report on Form 10-K of the Company for the year ended December 31, 2016.
/s/ Deloitte LLP
Chartered Professional Accountants
Vancouver, Canada
July 31, 2017
Exhibit 99.1
NOVELION THERAPEUTICS INC.
2017 EMPLOYEE STOCK PURCHASE PLAN
1. Defined Terms
Exhibit A , which is incorporated by reference, defines certain terms used in the Plan and sets forth certain operational rules related to those terms.
2. Purpose of Plan
The Plan is intended to enable Eligible Employees of the Company and its Designated Subsidiaries to use payroll deductions to purchase shares of Stock in offerings under the Plan, and thereby acquire an interest in the future of the Company. The Plan is intended to qualify as an employee stock purchase plan under Section 423 and to be exempt from the application and requirements of Section 409A of the Code, and is to be construed accordingly.
3. Options to Purchase Stock
Subject to adjustment pursuant to Section 16 of the Plan, the aggregate number of shares of Stock available for purchase pursuant to the exercise of Options granted under the Plan to Eligible Employees will be 278,710 shares of Stock. The shares of Stock to be delivered upon exercise of Options under the Plan may be either shares of authorized but unissued Stock, treasury Stock, or Stock acquired in an open-market transaction. If any Option granted under the Plan expires or terminates for any reason without having been exercised in full or ceases for any reason to be exercisable in whole or in part, the unpurchased shares of Stock subject to such Option will again be available for purchase pursuant to the exercise of Options under the Plan. If, on an Exercise Date, the total number of shares of Stock that would otherwise be subject to Options granted under the Plan exceeds the number of shares then available under the Plan (after deduction of all shares for which Options have been exercised or are then outstanding), the Administrator shall make a pro rata allocation of the shares remaining available for the Option grants in as uniform a manner as shall be practicable and as it shall determine to be equitable. In such event, the Administrator shall give written notice to each Participant of such reduction of the number of Options affected thereby and shall similarly reduce the rate of payroll deductions, if necessary.
4. Eligibility
(a) Eligibility Requirements . Subject to Section 13 of the Plan, and the exceptions and limitations set forth in Section 4(b) and (c) and Section 6 of the Plan, or as may be provided elsewhere in the Plan or in any sub-plan contemplated by Section 18, each Employee (i) who has been continuously employed by the Company or a Designated Subsidiary, as applicable, for a period of at least ten (10) Business Days as of the first day of an Option Period, (ii) whose customary Employment with the Company, a Designated Subsidiary or a Non-U.S. Designated Subsidiary, as applicable, is for more than five (5) months per calendar year, (iii) who customarily works twenty (20) hours or more per week, and (iv) who satisfies the requirements set forth in the Plan will be an Eligible Employee.
(b) Five Percent Shareholders . No Employee may be granted an Option under the Plan if, immediately after the Option is granted, the Employee would own (or pursuant to Section 424(d) of the Code would be deemed to own) stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or of its Parent or Subsidiaries, if any.
(c) Foreign Employees . Employees who are citizens or residents of a foreign jurisdiction (without regard to whether they are also citizens of the United States or resident aliens (within the meaning of Section 7701(b)(1)(A) of the Code)) will not be eligible to participate in the Plan if (i) the grant of an Option under the Plan to the Employee is prohibited under the laws of such jurisdiction, or (ii) compliance with the laws of the foreign jurisdiction would cause the Plan to violate the requirements of Section 423.
(d) Additional Requirements . The Administrator may, for Option Periods that have not yet commenced, establish additional eligibility requirements not inconsistent with Section 423.
5. Option Periods
The Plan will generally be implemented by a series of separate offerings referred to as Option Periods . Unless otherwise determined by the Administrator, the Option Periods will be successive periods of approximately six (6) months commencing on such dates as the Administrator shall determine. The last Business Day of each Option Period will be an Exercise Date . The Administrator may change the Exercise Date and the commencement date, ending date and duration of the Option Periods to the extent permitted by Section 423, provided, however, that no Option may be exercised after 27 months from its grant date.
6. Option Grant
Subject to the limitations set forth in Section 4 and Section 10 of the Plan and the Maximum Share Limit, on the first day of an Option Period, each Participant automatically will be granted an Option to purchase shares of Stock on the Exercise Date; provided , however , that no Participant will be granted an Option under the Plan that permits the Participants right to purchase shares of Stock under the Plan and under all other employee stock purchase plans of the Company and its Parent and Subsidiaries, if any, to accrue at a rate that exceeds $25,000 in Fair Market Value (or such other maximum as may be prescribed from time to time by the Code) for each calendar year during which any Option granted to such Participant is outstanding at any time, as determined in accordance with Section 423(b)(8) of the Code.
7. Method of Participation
(a) Payroll Deduction and Participation Authorization . To participate in an Option Period, an Eligible Employee must execute and deliver to the Administrator a payroll deduction and participation authorization form in accordance with the procedures prescribed by and in a form acceptable to the Administrator and, in so doing, the Eligible Employee will thereby become a Participant as of the first day of such Option Period. Such an Eligible Employee will remain a Participant with respect to subsequent Option Periods until his or her participation in the Plan is terminated as provided herein. Such payroll deduction and participation authorization must be delivered not later than ten (10) Business Days immediately prior to the first day of an Option Period, or such other time as specified by the Administrator.
(b) Changes to Payroll Deduction Authorization for Subsequent Option Periods . A Participants payroll deduction authorization will remain in effect for subsequent Option Periods unless the Participant files a new authorization not later than ten (10) Business Days prior to the first day of the subsequent Option Period, or such other time as specified by the Administrator, or the Participants Option is cancelled pursuant to Section 13 or Section 14 of the Plan.
(c) Changes to Payroll Deduction Authorization for Current Option Period . During an Option Period, a Participants payroll deduction authorization may not be increased or decreased, except that a Participant may terminate his or her payroll deduction authorization by canceling his or her Option in accordance with Section 13 of the Plan.
(d) Payroll Deduction Percentage . Each payroll deduction authorization will request payroll deductions as a whole percentage from one (1) to fifteen percent (15%) of an employees Eligible Compensation each payroll period.
(e) Payroll Deduction Account . All payroll deductions made pursuant to this Section 7 will be credited to the Participants Account. Amounts credited to a Participants Account will not be required to be set aside in trust or otherwise segregated from the Companys general assets.
8. Method of Payment
A Participant must pay for shares of Stock purchased upon the exercise of an Option with accumulated payroll deductions credited to the Participants Account, unless otherwise provided by the Administrator under a sub-plan or separate offering for a Non-U.S. Designated Subsidiary.
9. Purchase Price
The Purchase Price of shares of Stock issued pursuant to the exercise of an Option on each Exercise Date will be eighty-five percent (85%) (or such greater percentage specified by the Administrator to the extent permitted under Section 423) of the lesser of (a) the Fair Market Value of a share of Stock on the date on which the Option was granted pursuant to Section 6 of the Plan ( i.e. , the first day of the Option Period) and (b) the Fair Market Value of a share of Stock on the date on which the Option is deemed exercised pursuant to Section 10 of the Plan ( i.e. , the Exercise Date).
10. Exercise of Options
(a) Purchase of Shares . Subject to the limitations set forth in Section 6 of the Plan and this Section 10, with respect to each Option Period, on the applicable Exercise Date, each Participant will be deemed to have exercised his or her Option and the accumulated payroll deductions in the Participants Account will be applied to purchase the greatest number of shares of Stock (rounded down to the nearest whole share) that can be purchased with such Account balance at the applicable Purchase Price; provided, however, that no more than 7,500 shares of Stock may be purchased by a Participant on any Exercise Date, or such lesser number as the Administrator may prescribe in accordance with Section 423 (the Maximum Share Limit ). As soon as practicable thereafter, shares of Stock so purchased will be placed, in book-entry form, into a record keeping account in the name of the Participant. No fractional shares will be purchased pursuant to the exercise of an Option under the Plan; any accumulated payroll deductions in a Participants Account that are not sufficient to purchase a whole share will be retained in the Participants Account for the subsequent Option Period, subject to earlier withdrawal by the Participant as provided in Section 13 hereof.
(b) Return of Account Balance . Except as provided in Section 10(a) with respect to fractional shares, any amount of payroll deductions in a Participants Account that is not used for the purchase of shares of Stock, whether because of the Participants withdrawal from participation in an Option Period or for any other reason, will be returned to the Participant (or his or her designated beneficiary or legal representative, as applicable), without interest, as soon as administratively practicable after such withdrawal or other event, as applicable. If the Participants accumulated payroll deductions on the Exercise Date of an Option Period would otherwise enable the Participant to purchase shares of Stock in excess of the Maximum Share Limit or the maximum Fair Market Value set forth in Section 6 of the Plan, the excess of the amount of the accumulated payroll deductions over the aggregate Purchase Price of the shares of Stock actually purchased will be returned to the Participant, without interest, as soon as administratively practicable after such Exercise Date.
11. Interest
No interest will be payable on any amount held in the Account of any Participant.
12. Taxes
Payroll deductions will be made on an after-tax basis. The Administrator will have the right, as a condition to exercising an Option, to make such provision as it deems necessary to satisfy its obligations to withhold federal, state, local income or other taxes incurred by reason of the purchase or disposition of shares of Stock under the Plan. In the Administrators discretion and subject to applicable law, such tax obligations may be paid in whole or in part by delivery of shares of Stock to the Company, including shares of Stock purchased under the Plan, valued at Fair Market Value, but not in excess of the minimum statutory amounts required to be withheld (or such greater amount
permitted by the Administrator consistent with the Option being subject to equity accounting under applicable accounting rules and guidance).
13. Cancellation and Withdrawal
(a) Cancellation of Payroll Deduction Authorization . A Participant who holds an Option under the Plan may cancel all (but not less than all) of his or her Option and terminate his or her payroll deduction authorization by notice delivered to the Administrator in accordance with the procedures prescribed by, and in a form acceptable to, the Administrator. To be effective with respect to an upcoming Exercise Date, such cancellation notice must be delivered not later than ten (10) Business Days prior to such Exercise Date (or such other time as specified by the Administrator). Upon such termination and cancellation, the balance in the Participants Account will be returned to the Participant, without interest, as soon as administratively practicable thereafter. For the avoidance of doubt, a Participant who reduces his or her withholding rate for future payroll periods to zero percent (0%) will be deemed to have terminated his or her payroll deduction authorization and cancelled his or her Option as to future Option Periods.
(b) 401(k) Hardship Withdrawal . A Participant who makes a hardship withdrawal from a 401(k) Plan will be deemed to have terminated his or her payroll deduction authorization for subsequent payroll dates relating to the then current Option Period as of the date of such hardship withdrawal and amounts accumulated in the Participants Account as of such date will be returned to the Participant, without interest, as soon as administratively practicable thereafter. An Employee who has made a hardship withdrawal from a 401(k) Plan will not be permitted to participate in Option Periods commencing after the date of his or her hardship withdrawal until the first Option Period that begins at least six months after the date of his or her hardship withdrawal.
14. Termination of Employment; Death of Participant
Upon the termination of a Participants employment with the Company or a Designated Subsidiary, as applicable, for any reason or the death of a Participant during an Option Period prior to an Exercise Date or in the event the Participant ceases to qualify as an Eligible Employee, the Participant will cease to be a Participant, any Option held by him or her under the Plan will be deemed canceled, the balance in the Participants Account will be returned to the Participant (or his or her estate or designated beneficiary in the event of the Participants death), without interest, as soon as administratively practicable thereafter, and the Participant will have no further rights under the Plan.
15. Equal Rights; Participants Rights Not Transferable
All Participants granted Options in an offering under the Plan will have the same rights and privileges, consistent with the requirements set forth in Section 423. Any Option granted under the Plan will be exercisable during the Participants lifetime only by him or her and may not be sold, pledged, assigned, or transferred in any manner. In the event any Participant violates or attempts to violate the terms of this Section 15, as determined by the Administrator in its sole discretion, any Options held by him or her may be terminated by the Company and, upon the return to the Participant of the balance of his or her Account, without interest, all of the Participants rights under the Plan will terminate.
16. Change in Capitalization; Corporate Transaction
(a) Change in Capitalization . In the event of any change in the outstanding Stock by reason of a stock dividend, stock split, reverse stock split, split-up, recapitalization, merger, consolidation, reorganization, or other capital change, the aggregate number and type of shares of Stock available under the Plan, the number and type of shares of Stock granted under any outstanding Options, the maximum number and type of shares of Stock purchasable under any outstanding Option, and the purchase price per share of Stock under any outstanding Option will be appropriately adjusted; provided , that any such adjustment shall be made in a manner that complies with Section 423.
(b) Corporate Transaction . In the event of a Corporate Transaction, the Administrator may, in its discretion, (i) if the Company is merged with or acquired by another corporation, provide that each outstanding Option will be assumed or exchanged for a substitute Option granted by the acquiror or successor corporation or by a parent or subsidiary of the acquiror or successor corporation, (ii) cancel each outstanding Option and return the balances in Participants Accounts to the Participants, and/or (iii) pursuant to Section 18 of the Plan, terminate the Option Period on or before the date of the proposed sale, merger or similar transaction.
17. Administration of Plan
The Plan will be administered by the Administrator, which will have the authority to interpret the Plan, determine eligibility under the Plan, prescribe forms, rules and procedures relating to the Plan and otherwise do all things necessary or appropriate to carry out the purposes of the Plan. All determinations and decisions by the Administrator regarding the interpretation or application of the Plan will be final and binding on all persons.
The Administrator may specify the manner in which the Company and/or Employees are to provide notices and forms under the Plan, and may require that such notices and forms be submitted electronically.
18. Amendment and Termination of Plan; Sub-Plans
(a) Amendment . The Board reserves the right at any time or times to amend the Plan to any extent and in any manner it may deem advisable; provided , however , that any amendment that would be treated as the adoption of a new plan for purposes of Section 423 will have no force or effect unless approved by the shareholders of the Company within 12 months before or after its adoption.
(b) Termination . The Board reserves the right at any time or times to suspend or terminate the Plan. In connection therewith, the Board may provide, in its sole discretion, either that outstanding Options will be exercisable either at the Exercise Date for the applicable Option Period or on such earlier date as the Board may specify (in which case such earlier date will be treated as the Exercise Date for the applicable Option Period), or that the balance of each Participants Account will be returned to the Participant, without interest.
(c) Separate Offerings; Sub-Plans . Notwithstanding the foregoing or any provision of the Plan to the contrary, the Administrator may, in its sole discretion, amend the terms of the Plan, or an Option, and/or provide for separate offerings under the Plan in order to reflect the impact of local law outside of the United States as applied to one or more Eligible Employees of a Non-U.S. Designated Subsidiary and may, where appropriate, establish one or more sub-plans to reflect such amended provisions; provided , however , in no event shall any sub-plan (i) be considered part of the Plan for purposes of Section 423 of the Code or (ii) cause the Plan (other than the sub-plan) to fail to satisfy the requirements of Section 423 of the Code. In the event of any inconsistency between a sub-plan and the Plan document, the terms of the sub-plan shall govern with respect to any Eligible Employees of a Non-U.S. Designated Subsidiary. For the avoidance of doubt, shares of Stock purchased under a sub-plan shall reduce the maximum aggregate number of shares available for purchase pursuant to Section 3.
19. Approvals
Shareholder approval of the Plan will be obtained prior to the date that is 12 months after the date of Board approval. In the event that the Plan has not been approved by the shareholders of the Company prior to May 1, 2018, all Options to purchase shares of Stock under the Plan will be cancelled and become null and void.
Notwithstanding anything herein to the contrary, the obligation of the Company to issue and deliver shares of Stock under the Plan will be subject to the approval required of any governmental authority in connection with the authorization, issuance, sale or transfer of such shares of Stock and to any requirements of any national securities exchange applicable thereto, and to compliance by the Company with other applicable legal requirements in effect from time to time.
20. Participants Rights as Shareholders and Employees
A Participant will have no rights or privileges as a shareholder of the Company and will not receive any dividends in respect of any shares of Stock covered by an Option granted hereunder until such Option has been exercised, full payment has been made for such shares of Stock, and the shares of Stock have been issued to the Participant.
Nothing contained in the provisions of the Plan will be construed as giving to any Employee the right to be retained in the employ of the Company, any Designated Subsidiary or any Non-U.S. Designated Subsidiary or as interfering with the right of the Company, any Designated Subsidiary or any Non-U.S. Designated Subsidiary to discharge, promote, demote or otherwise re-assign any Employee from one position to another within the Company, any Designated Subsidiary or any Non-U.S. Designated Subsidiary at any time.
21. Restrictions on Transfer; Information Regarding Disqualifying Dispositions.
Shares of Stock purchased under the Plan may, in the discretion of the Administrator, be subject to a restriction prohibiting the transfer, sale, pledge or alienation of such shares of Stock by a Participant, other than by will or by the laws of descent and distribution, for such period following such purchase as may be determined by the Administrator.
By electing to participate in the Plan, each Participant agrees to provide such information about any transfer of Stock acquired under the Plan that occurs within two years after the first day of the Option Period in which such Stock was acquired and within one year after the acquisition of such Stock as may be requested by the Company or any Designated Subsidiary or Non-U.S. Designated Subsidiary in order to assist it in complying with applicable tax laws.
22. Governing Law
The Plan will be governed by and interpreted consistently with the laws of the State of Delaware, except as may be necessary to comply with applicable requirements of federal law.
23. Effective Date and Term
The Plan will become effective upon adoption of the Plan by the Board and no rights will be granted hereunder after the earliest to occur of (a) the Plans termination by the Company, (b) the issuance of all shares of Stock available for issuance under the Plan or (c) the day before the 10-year anniversary of the date the Board approves the Plan.
EXHIBIT A
Definition of Terms
The following terms, when used in the Plan, will have the meanings and be subject to the provisions set forth below:
401(k) Plan: A savings plan qualifying under Section 401(k) of the Code that is sponsored by the Company for the benefit of its employees.
Account: A payroll deduction account maintained in the Participants name on the books of the Company.
Administrator: The Compensation Committee of the Board and its delegates, except that the Compensation Committee may delegate its authority under the Plan to a sub-committee comprised of one or more of its members, to members of the Board, or to officers or employees of the Company to the extent permitted by applicable law. In each case, references herein to the Administrator refer, as applicable, to such persons or groups so delegated to the extent of such delegation.
Affiliate Any corporation or other entity that stands in a relationship to the Company that would result in the Company and such corporation or other entity being treated as a single employer under Sections 414(b) or 414(c) of the Code, except that such sections shall be applied by substituting at least 50% for at least 80% wherever applicable. The Company may at any time by amendment provide that different ownership thresholds apply.
Board: The Board of Directors of the Company.
Business Day: Any day on which the national stock exchange on which the Stock is traded is available and open for trading.
Code: The U.S. Internal Revenue Code of 1986, as from time to time amended and in effect, or any successor statute as from time to time in effect.
Company: Novelion Therapeutics Inc., and any successor corporation thereto.
Corporate Transaction: A (i) consolidation, merger or similar transaction or series of related transactions, including a sale or other disposition of stock, in which the Company (or any Affiliate) is not the surviving corporation or which results in the acquisition of all or substantially all of the then outstanding shares of Stock by a single person or entity or by a group of persons and/or entities acting in concert; (ii) sale or transfer of all or substantially all of the Companys assets or (iii) dissolution or liquidation of the Company. Where a Corporate Transaction involves a tender offer that is reasonably expected to be followed by a merger described in clause (i) as determined by the Compensation Committee of the Board, the Corporate Transaction shall be deemed to have occurred upon consummation of the tender offer.
Designated Subsidiary: A Subsidiary of the Company that has been designated by the Board or the Compensation Committee of the Board from time to time as eligible to participate in the Plan as set forth on Exhibit B to the Plan; as such Exhibit B may be amended from time to time. Exhibit B sets forth the Designated Subsidiaries as of the Effective Date.
Effective Date: The date set forth in Section 23 of the Plan.
Eligible Employee: Any Employee who meets the eligibility requirements set forth in Section 4 of the Plan.
Employee: Any person who is employed by the Company or a Designated Subsidiary or a Non-U.S. Designated Subsidiary. For the avoidance of doubt, independent contractors and consultants are not Employees.
Eligible Compensation: Regular base salary, overtime payments, annual bonuses, commissions and other sales incentives (excluding, for the avoidance of doubt, any long-term incentive payments). Eligible Compensation will not be reduced by any income or employment tax withholdings or any contributions by the Employee to a 401(k) Plan or a plan under Section 125 of the Code, but will be reduced by any contributions made on the Employees behalf by the Company or any Subsidiary to any deferred compensation plan or welfare benefit program now or hereafter established.
Exercise Date: The date set forth in Section 5 of the Plan or otherwise designated by the Administrator with respect to a particular Option Period on which a Participant will be deemed to have exercised the Option granted to him or her for such Option Period.
Fair Market Value:
(a) If the Stock is readily traded on an established national exchange or trading system (including the NASDAQ Global Select Market), the closing price of a share of Stock as reported by the principal exchange on which such Stock is traded; provided , however , that if such day is not a trading day, Fair Market Value will mean the reported closing price of a share of Stock for the immediately preceding day that is a trading day.
(b) If the Stock is not traded on an established national exchange or trading system, the average of the bid and ask prices for shares of Stock where the bid and ask prices are quoted.
(c) If the Stock cannot be valued pursuant to clauses (a) or (b), the value as determined in good faith by the Board in its sole discretion.
Maximum Share Limit: The meaning set forth in Section 10 of the Plan.
Non-U.S. Designated Subsidiary: A Subsidiary of the Company incorporated outside of the United States has been designated by the Board or the Compensation Committee of the Board from time to time as eligible to participate in the Plan as set forth on Exhibit C to the Plan; as such Exhibit C may be amended from time to time.
Option: An option granted pursuant to the Plan entitling the holder to acquire shares of Stock upon payment of the Purchase Price per share of Stock.
Option Period: An offering period established in accordance with Section 5 of the Plan.
Parent: A parent corporation as defined in Section 424(e) of the Code.
Participant: An Eligible Employee who elects to enroll in the Plan.
Plan: The Novelion 2017 Employee Stock Purchase Plan, as from time to time amended and in effect.
Purchase Price: The price per share of Stock with respect to an Option Period determined in accordance with Section 9 of the Plan.
Section 423: Section 423 of the Code and the regulations thereunder.
Stock: Common stock of the Company, no par value per share.
EXHIBIT B
Designated Subsidiaries
Designated Subsidiaries as of the date of adoption of the Plan by the Board are listed below:
Aegerion Pharmaceuticals, Inc.
Novelion Services USA, Inc.
EXHIBIT C
Non-U.S. Designated Subsidiaries
Non-U.S. Designated Subsidiaries as of the date of adoption of the Plan by the Board are listed below:
None