Exemption Orders (Discretionary)
NEUROMED TECHNOLOGIES INC.
2001 BCSECCOM 873
IN THE MATTER OF THE SECURITIES ACT
R.S.B.C. 1996, c. 418
AND
IN THE MATTER OF NEUROMED TECHNOLOGIES INC.
Exemption Order Under Sections 48 and 76
[para 1]
WHEREAS NeuroMed Technologies Inc. has applied to the Executive Director for an order under sections 48 and 76 of the Securities Act, R.S.B.C. 1996, c. 418 that certain intended trades in options of NeuroMed to members of its scientific advisory board are exempt from the requirements of sections 34(1)(a) and 61 of the Act;
[para 2]
AND WHEREAS NeuroMed has represented to the Executive Director that:
1. NeuroMed was incorporated under the laws of British Columbia and continued under the laws of the Yukon Territory, is not a reporting issuer under the Act and is not in default of any requirement of the Act or the Securities Rules, B.C. Reg. 194/97;
2. the authorized capital of NeuroMed consists of an unlimited number of Common shares and an unlimited number of Preferred shares issuable in series, of which 2,171,000 Common shares, 1,865,671 Series A-1 Preferred shares, 1,404,493 Series A-2 Preferred shares and 5,885,715 Series B-1 Preferred shares were issued and outstanding as at June 15, 2001;
3. the shares of NeuroMed are not publicly traded;
4. NeuroMed is in the business of discovering, developing and commercializing biopharmaceutical treatments for neurological disorders such as pain and stroke;
5. NeuroMed grants options to directors, officers, and employees of NeuroMed and other persons who provide a service of value to NeuroMed and contribute to the success of NeuroMed;
6. NeuroMed has formed a scientific advisory board comprised of consultants (the “Scientific Advisors”), each of whom is an experienced scientist, who:
(a) will provide ongoing consulting services to NeuroMed under a written contract;
(b) will provide guidance to enable NeuroMed’s technology to reach its full clinical and commercial potential;
(c) possess medical, technical and scientific experience and expertise in therapeutic or research fields that are related to NeuroMed’s technology; and
(d) has knowledge of the business and affairs of NeuroMed which is equivalent to that held by certain directors, officers and employees of NeuroMed;
7. at the request of management, the Scientific Advisors review and provide NeuroMed with advice regarding individual research and development projects;
8. the scientific advisory board meets twice a year as a whole, and in subcommittees throughout the year, and makes it recommendations directly to NeuroMed’s management;
9. individual Scientific Advisors are not consultants as defined under BC Instrument 45-507 because, as members of the scientific advisory board, they do not spend a significant amount of time and attention on the business and affairs of NeuroMed or an affiliate of NeuroMed, but are consulted by NeuroMed as needed on an ongoing basis in areas of their expertise;
10. NeuroMed proposes to grant incentive stock options to Scientific Advisors who are not directors, officers or employees of NeuroMed and are not affiliated, associated or related in any other way to NeuroMed;
11. the options will be granted as an incentive mechanism for the Scientific Advisors to provide bona fide, ongoing services of value to NeuroMed and not for the purpose of repayment or partial repayment of a debt owed to the Scientific Advisors;
12. the participation of the Scientific Advisors in the trade is voluntary;
13. the options are non-transferable and non-assignable, except that on a Scientific Advisor’s death any options may be transferred to and exercised by the Scientific Advisor’s executor or other legal representative or the beneficiaries of the Scientific Advisor’s estate in accordance with the terms of the option;
14. the exercise price for the options is determined by an independent, arm’s length chartered accountant;
15. prior shareholder approval will be obtained for options issued if,
(a) the number of shares reserved for issuance under stock options granted to related persons (being a director, senior officer or an associate of a director or senior officer of the issuer) exceeds 10 percent of the outstanding issue,
(b) the issuance to related persons, within a 12 month period, of a number of shares exceeds 10 percent of the outstanding issue,
(c) the number of shares reserved for issuance under stock options granted to any one related person and the related person’s associates exceeds five percent of the outstanding issue, or
(d) the issuance to any one related person and the related person’s associates, within a 12 month period, of a number of shares exceeds five percent of the outstanding issue;
16. an option expires not later than 10 years from the date of the grant of the option; and
17. the Scientific Advisors will not be induced to acquire common shares of NeuroMed on the exercise of the options by expectation of continued membership on the scientific advisory board or employment with NeuroMed;
[para 3]
AND WHEREAS the Executive Director considers that it would not be prejudicial to the public interest to do so;
[para 4]
IT IS ORDERED under sections 48 and 76 of the Act that the intended trades of options by NeuroMed to the Scientific Advisors are exempt from the requirements of sections 34(1)(a) and 61 of the Act provided that:
(a) NeuroMed provides each Scientific Advisor with a copy of this order; and
(b) NeuroMed files BC Form 45-902F on or before the 10th day after the distribution of options to a Scientific Advisor in reliance on this order.
[para 5]
DATED August 28, 2001.
Derek E. Patterson
Manager