On October 7, 2019 ESSA Pharma Inc. ("ESSA" or the "Company") (TSX-V: EPI,NASDAQ: EPIX), a pharmaceutical company focused on developing novel therapies for the treatment of prostate cancer, reported that, pursuant to the Company’s existing stock option plan (the "Existing Option Plan"), it has granted incentive stock options ("Options") to certain directors, officers, employees and consultants of the Company to purchase up to an aggregate of 1,441,530 common shares in the capital of the Company (the "Common Shares") (Press release, ESSA, OCT 7, 2019, View Source [SID1234540095]). A total of 1,186,530 of such Options will vest in 48 equal monthly installments, with the first installment vesting on the one-month anniversary of the grant date. A total of 255,000 of the options granted to Directors vest in 12 monthly installments, with the first installment vesting on the one-month anniversary of the grant date. The Options are exercisable on or before October 4, 2029 at the price of US$3.23 per Common share and are granted in accordance with the polices of the TSX Venture Exchange (the "TSXV") and the terms and conditions of the Existing Option Plan.
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The Company hereby further announces that on October 4, 2019 the board of directors of the Company ("Board") passed a resolution, subject to shareholder approval, amending and restating the Existing Option Plan (the "Amended Option Plan") and amending and restating the Company’s existing restricted share unit plan (the "Amended RSU Plan"), pursuant to which, amongst other things, the fixed maximum number of Common Shares available for issuance upon the exercise of Options or restricted share units ("RSUs") under the Amended Option Plan and the Amended RSU Plan, respectively, was increased to a maximum of 6,251,469 Common Shares. The Amended Option Plan and Amended RSU Plan both remain subject to shareholder approval, in accordance with the policies of the TSXV.
The Amended Option Plan provides the Company with a share-related mechanism to attract, retain and motivate qualified directors, officers, employees and consultants, and to reward such of those directors, officers, employees and consultants as may be awarded Options under the Amended Option Plan by the Board from time to time for their contributions toward creating shareholder value through achievement of the short and long term goals of the Company. The Amended RSU Plan provides a vehicle by which equity-based incentives may be awarded to the employees, consultants, directors and officers of the Company, to recognize and reward their significant contributions to the long-term success of the Company including to align the employees’, consultants’ directors’ and officers’ interests more closely with the shareholders of the Company. Pursuant to the Amended RSU Plan, the Board, through the Company’s Compensation Committee, may grant RSUs as an incentive payment to eligible persons. The Board intends to use RSUs issued under the Amended RSU Plan, as well as Options issued under the Amended Option Plan as part of the Company’s overall executive compensation plan.
The Company is also announcing that the Board has, following the adoption of the Amended Option Plan, approved the additional grant of an aggregate of 2,551,470 Options (the "New Plan Options") to certain employees of the Company, under the Amended Option Plan. Such New Plan Options will vest in 48 equal monthly installments, with the first installment vesting on the one-month anniversary of the grant date, in accordance with the polices of the TSXV and the terms and conditions of the Amended Option Plan.
The New Plan Options have been reserved for issuance pursuant to the Amended Option Plan and are subject to, and cannot be exercised by their respective holders until, the Company’s shareholders ratify the Amended Option Plan, the TSXV approves the grants thereof, and the Company’s shareholders approve such grants by way of disinterested shareholder approval in accordance with the policies of the TSXV, at a duly constituted meeting of shareholders.
Following the aforementioned grants of Options and New Plan Options, the Company has a total of 5,086,500 Options outstanding, representing approximately 15.5% of the outstanding Common Shares. An aggregate of 1,164,969 Options and/or RSUs remain outstanding for future issuance under the Amended Option Plan and Amended RSU Plan, respectively.
Further details regarding the grant of the Options, the Amended Option Plan, the Amended RSU Plan, and grant of the New Plan Options will be included in the management information circular of the Company that will be made available to shareholders in connection with the annual meeting of shareholders of the Company.
The Option and New Plan Option grants referenced in this press release include grants to certain related parties (as such term is defined under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101")), including directors and senior officers of the Company. Such Option and New Plan Option grants constitute a related party transaction under MI 61-101. These transactions are exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 pursuant to sections 5.5(a) and 5.7(1)(a) of MI 61-101 as neither the fair market value of any securities issued to nor the consideration paid by such persons exceed 25.0% of the Company’s market capitalization.