ProtoKinetix, Incorporated (NASDAQ:PKTX) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.
On or about December 30, 2016, ProtoKinetix, Incorporated (the
“Company” or “ProtoKinetix”) entered into consulting
agreements with Clarence E. Smith, the Company’s President and
Chief Executive Officer, Susan M. Woodward, the Company’s Chief
Financial Officer, and Edward P. McDonough, a member of the Board
of Directors, effective January 1, 2017. These consulting
agreements replace the prior consulting agreements entered into
between the Company and the officer and/or director which
terminated December 31, 2016.
“Company” or “ProtoKinetix”) entered into consulting
agreements with Clarence E. Smith, the Company’s President and
Chief Executive Officer, Susan M. Woodward, the Company’s Chief
Financial Officer, and Edward P. McDonough, a member of the Board
of Directors, effective January 1, 2017. These consulting
agreements replace the prior consulting agreements entered into
between the Company and the officer and/or director which
terminated December 31, 2016.
Mr. Smith’s consulting agreement is for a one-year term through
December 31, 2017. The agreement provides for an annual salary of
$1.00 and during the term of the agreement, Mr. Smith is entitled
to receive a bonus payment equal to 2.5% of the aggregate value
of any application sale or license of any patent rights or
products effected during the term of the agreement.
December 31, 2017. The agreement provides for an annual salary of
$1.00 and during the term of the agreement, Mr. Smith is entitled
to receive a bonus payment equal to 2.5% of the aggregate value
of any application sale or license of any patent rights or
products effected during the term of the agreement.
Mr. Smith is also entitled to a termination fee if the agreement
is terminated for the following two reasons:
is terminated for the following two reasons:
|
A termination without cause: If Mr. Smith is terminated
without cause he will be entitled to a termination fee of $100,000 per year of service (including the pro-rata amount for partial years of service); |
|
A termination upon a change of control event: Following a
change of control event he will be entitled to a termination fee equal to $100,000 per year of service (including the pro-rata amount for partial years of service) plus 2.5% of the aggregate transaction value of the change of control. |
In connection with the consulting agreement, the Company issued
Mr. Smith an option to the Company’s 2017 Stock Option and Stock
Bonus Plan (the “2017 Plan”) to purchase 5,000,000 shares of
common stock of the Company at a price of $0.05 per share with
1,250,000 shares vesting every three months starting March 31,
2017.
Mr. Smith an option to the Company’s 2017 Stock Option and Stock
Bonus Plan (the “2017 Plan”) to purchase 5,000,000 shares of
common stock of the Company at a price of $0.05 per share with
1,250,000 shares vesting every three months starting March 31,
2017.
Ms. Woodward’s consulting agreement is for a one-year term
through December 31, 2017. The agreement provides for a monthly
consulting fee of $6,000 and a termination fee if the agreement
is terminated for the following two reasons:
through December 31, 2017. The agreement provides for a monthly
consulting fee of $6,000 and a termination fee if the agreement
is terminated for the following two reasons:
|
A termination without cause: If Ms. Woodward is
terminated within 12 months of January 1, 2017 she will be entitled to a termination fee of $72,000 per year of service (including the pro-rata amount for partial years of service); |
|
A termination upon a change of control event: Following a
change of control event she will be entitled to a termination fee of $72,000 per year of service (including the pro-rata amount for partial years of service). |
In connection with the consulting agreement, the Company issued
Ms. Woodward an option to the 2017 Plan to purchase 4,000,000
shares of common stock of the Company at a price of $0.05 per
share with 1,000,000 shares vesting every three months starting
March 31, 2017.
Ms. Woodward an option to the 2017 Plan to purchase 4,000,000
shares of common stock of the Company at a price of $0.05 per
share with 1,000,000 shares vesting every three months starting
March 31, 2017.
The Company also extended the expiration date of the option for
2,000,000 shares granted to Ms. Woodward on February 26, 2015 at
the exercise price of $0.04 per share to the Non-Qualified Stock
Option Agreement effective May 4, 2015 from February 25, 2017 to
February 25, 2020.
2,000,000 shares granted to Ms. Woodward on February 26, 2015 at
the exercise price of $0.04 per share to the Non-Qualified Stock
Option Agreement effective May 4, 2015 from February 25, 2017 to
February 25, 2020.
Mr. McDonough’s director consulting agreement is for a one-year
term through December 31, 2017.
term through December 31, 2017.
In connection with the consulting agreement, the Company issued
Mr. McDonough an option to the 2017 Plan to purchase 1,000,000
shares of common stock of the Company at a price of $0.05 per
share with 250,000 shares vesting every three months starting
March 31, 2017.
Mr. McDonough an option to the 2017 Plan to purchase 1,000,000
shares of common stock of the Company at a price of $0.05 per
share with 250,000 shares vesting every three months starting
March 31, 2017.
Item 3.02 Unregistered Sales of Equity Securities.
Between November 30, 2016 and December 1, 2016, ProtoKinetix
issued 4,000,000 shares of common stock at a price of $0.04 per
share for gross proceeds of $160,000 to a private placement with
accredited investors, of which Clarence E. Smith, the Company’s
President and Chief Executive Officer and a director, personally
purchased 3,500,000 shares at a purchase price of $140,000. No
solicitation was used in this offering. For this sale of
securities, the Company relied on the exemption from registration
available under Section 4(a)(2) of the Securities Act and Rule
506(b) of Regulation D promulgated under the Securities Act with
respect to transactions by an issuer not involving any public
offering. No commissions were paid in connection with this
issuance of securities. A Form D was filed previously on
September 16, 2016.
issued 4,000,000 shares of common stock at a price of $0.04 per
share for gross proceeds of $160,000 to a private placement with
accredited investors, of which Clarence E. Smith, the Company’s
President and Chief Executive Officer and a director, personally
purchased 3,500,000 shares at a purchase price of $140,000. No
solicitation was used in this offering. For this sale of
securities, the Company relied on the exemption from registration
available under Section 4(a)(2) of the Securities Act and Rule
506(b) of Regulation D promulgated under the Securities Act with
respect to transactions by an issuer not involving any public
offering. No commissions were paid in connection with this
issuance of securities. A Form D was filed previously on
September 16, 2016.
Between December 20, 2016 and December 22, 2016, ProtoKinetix
issued 6,500,000 shares of common stock at a price of $0.04 per
share for gross proceeds of $260,000 to a subsequent private
placement with accredited investors, of which Clarence E. Smith,
the Company’s President and Chief Executive Officer and a
director, personally purchased 4,000,000 shares at a purchase
price of $160,000. No solicitation was used in this offering. For
this sale of securities, the Company relied on the exemption from
registration available under Section 4(a)(2) of the Securities
Act and Rule 506(b) of Regulation D promulgated under the
Securities Act with respect to transactions by an issuer not
involving any public offering. No commissions were paid in
connection with this issuance of securities. A Form D was filed
on January 3, 2017.
issued 6,500,000 shares of common stock at a price of $0.04 per
share for gross proceeds of $260,000 to a subsequent private
placement with accredited investors, of which Clarence E. Smith,
the Company’s President and Chief Executive Officer and a
director, personally purchased 4,000,000 shares at a purchase
price of $160,000. No solicitation was used in this offering. For
this sale of securities, the Company relied on the exemption from
registration available under Section 4(a)(2) of the Securities
Act and Rule 506(b) of Regulation D promulgated under the
Securities Act with respect to transactions by an issuer not
involving any public offering. No commissions were paid in
connection with this issuance of securities. A Form D was filed
on January 3, 2017.
Item 5.02 Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
On December 30, 2016, the Board of Directors of the Company
adopted the 2017 Stock Option and Stock Bonus Plan (the “2017
Plan”). The Board of Directors adopted the 2017 Plan as it
anticipates utilizing equity compensation as part of its ongoing
standard corporate operations and in connection with its
contemplated activities going forward.
adopted the 2017 Stock Option and Stock Bonus Plan (the “2017
Plan”). The Board of Directors adopted the 2017 Plan as it
anticipates utilizing equity compensation as part of its ongoing
standard corporate operations and in connection with its
contemplated activities going forward.
The aggregate number of shares that may be issued under the 2017
Plan is 30,000,000 shares subject to adjustment as provided
therein. The 2017 Plan includes two types of options. Options
intended to qualify as incentive stock options under Section 422
of the Internal Revenue Code of 1986, as amended are referred to
as incentive options. Options which are not intended to qualify
as incentive options are referred to as non-qualified options.
Plan is 30,000,000 shares subject to adjustment as provided
therein. The 2017 Plan includes two types of options. Options
intended to qualify as incentive stock options under Section 422
of the Internal Revenue Code of 1986, as amended are referred to
as incentive options. Options which are not intended to qualify
as incentive options are referred to as non-qualified options.
To date 16,200,000 options have been granted under the 2017 Plan.
The 2017 Plan is administered by the Board of Directors, or a
committee appointed by the Board of Directors. In addition to
determining who will be granted options or bonuses, the committee
has the authority and discretion to determine when options and
bonuses will be granted and the number of options and bonuses to
be granted. The committee also may determine a vesting and/or
forfeiture schedule for bonuses and/or options granted, the time
or times when each option becomes exercisable, the duration of
the exercise period for options and the form or forms of the
agreements, certificates or other instruments evidencing grants
made under the 2017 Plan. The committee may determine the
purchase price of the shares of common stock covered by each
option and determine the fair market value per share. The
committee also may impose additional conditions or restrictions
not inconsistent with the provisions of the 2017 Plan. The
committee may adopt, amend and rescind such rules and regulations
as in its opinion may be advisable for the administration of the
2017 Plan.
committee appointed by the Board of Directors. In addition to
determining who will be granted options or bonuses, the committee
has the authority and discretion to determine when options and
bonuses will be granted and the number of options and bonuses to
be granted. The committee also may determine a vesting and/or
forfeiture schedule for bonuses and/or options granted, the time
or times when each option becomes exercisable, the duration of
the exercise period for options and the form or forms of the
agreements, certificates or other instruments evidencing grants
made under the 2017 Plan. The committee may determine the
purchase price of the shares of common stock covered by each
option and determine the fair market value per share. The
committee also may impose additional conditions or restrictions
not inconsistent with the provisions of the 2017 Plan. The
committee may adopt, amend and rescind such rules and regulations
as in its opinion may be advisable for the administration of the
2017 Plan.
The committee also has the power to interpret the 2017 Plan, and
the provisions in the instruments evidencing grants made under
it, and is empowered to make all other determinations deemed
necessary or advisable for the administration of it.
the provisions in the instruments evidencing grants made under
it, and is empowered to make all other determinations deemed
necessary or advisable for the administration of it.
Participants in the 2017 Plan may be selected by the committee
from employees, officers, consultants and advisors (including
board members) of ProtoKinetix. The committee may take into
account the duties of persons selected, their present and
potential contributions to the success of ProtoKinetix and such
other considerations as the committee deems relevant to the
purposes of the 2017 Plan.
from employees, officers, consultants and advisors (including
board members) of ProtoKinetix. The committee may take into
account the duties of persons selected, their present and
potential contributions to the success of ProtoKinetix and such
other considerations as the committee deems relevant to the
purposes of the 2017 Plan.
In the event of a change, such as a stock split, is made in the
Company’s capitalization which results in an exchange or other
adjustment of each share of common stock for or into a greater or
lesser number of shares, appropriate adjustments will be made to
unvested bonuses and in the exercise price and in the number of
shares subject to each outstanding option. The committee also may
make provisions for adjusting the number of bonuses or underlying
outstanding options in the event the Company effects one or more
reorganizations, recapitalizations, rights offerings, or other
increases or reductions of shares of its outstanding common
stock. Options and bonuses may provide that in the event of the
dissolution or liquidation of ProtoKinetix, a corporate
separation or division or the merger or consolidation of
ProtoKinetix, the holder may exercise the option on such terms as
it may have been exercised immediately prior to such dissolution,
corporate separation or division or merger or consolidation; or
in the alternative, the committee may provide that each option
granted under the 2017 Plan shall terminate as of a date fixed by
the committee.
Company’s capitalization which results in an exchange or other
adjustment of each share of common stock for or into a greater or
lesser number of shares, appropriate adjustments will be made to
unvested bonuses and in the exercise price and in the number of
shares subject to each outstanding option. The committee also may
make provisions for adjusting the number of bonuses or underlying
outstanding options in the event the Company effects one or more
reorganizations, recapitalizations, rights offerings, or other
increases or reductions of shares of its outstanding common
stock. Options and bonuses may provide that in the event of the
dissolution or liquidation of ProtoKinetix, a corporate
separation or division or the merger or consolidation of
ProtoKinetix, the holder may exercise the option on such terms as
it may have been exercised immediately prior to such dissolution,
corporate separation or division or merger or consolidation; or
in the alternative, the committee may provide that each option
granted under the 2017 Plan shall terminate as of a date fixed by
the committee.
The exercise price of any option granted under the 2017 Plan must
be no less than 100% of the “fair market value” of
ProtoKinetix’s common stock on the date of grant. Any incentive
stock option granted under the 2017 Plan to a person owning more
than 10% of the total combined voting power of the common stock
must be at a price of no less than 110% of the fair market value
per share on the date of grant.
be no less than 100% of the “fair market value” of
ProtoKinetix’s common stock on the date of grant. Any incentive
stock option granted under the 2017 Plan to a person owning more
than 10% of the total combined voting power of the common stock
must be at a price of no less than 110% of the fair market value
per share on the date of grant.
The exercise price of an option may be paid in cash, in shares of
ProtoKinetix common stock or other property having a fair market
value equal to the exercise price of the option, or in a
combination of cash, shares, other securities and property. The
committee determines whether or not property other than cash or
common stock may be used to purchase the shares underlying an
option and shall determine the value of the property received.
ProtoKinetix common stock or other property having a fair market
value equal to the exercise price of the option, or in a
combination of cash, shares, other securities and property. The
committee determines whether or not property other than cash or
common stock may be used to purchase the shares underlying an
option and shall determine the value of the property received.
All awards granted under the 2015 Stock Option and Stock Bonus
Plan (the “2015 Plan”) will continue forward under the 2015
Plan until expired or exercised to the terms of each individual
award agreement, however, no new awards shall be granted under
the 2015 Plan.
Plan (the “2015 Plan”) will continue forward under the 2015
Plan until expired or exercised to the terms of each individual
award agreement, however, no new awards shall be granted under
the 2015 Plan.
For a description of compensation agreements entered into between
the Company and certain consultants, please see the events
reported in Item 1.01 of this Current Report.
the Company and certain consultants, please see the events
reported in Item 1.01 of this Current Report.
