Kala Pharmaceuticals Reports Inducement Grant Under NASDAQ Listing Rule 5635(c)(4)

Rhea-AI Summary

Kala Pharmaceuticals (NASDAQ: KALA) announced the granting of stock options to four new employees as part of inducement awards outside the Company’s 2017 Equity Incentive Plan, in line with NASDAQ Rule 5635(c)(4). The options, totaling 32,200 shares, were granted on March 15, 2021, with an exercise price set at $7.54 per share, coinciding with the closing stock price on that date. These options have a ten-year term, vesting over four years, subject to each employee's continued service.

Positive

• Granting 32,200 stock options indicates increased employee engagement and retention efforts.
• Options vesting over four years provide long-term incentives aligning employee performance with company growth.

Negative

• The exercise price of $7.54 could imply a lack of confidence in stock appreciation if the market price remains lower over time.

Kala Pharmaceuticals, Inc. (NASDAQ:KALA), today announced that the Company granted non-statutory stock options to new employees as inducement awards outside the Company’s 2017 Equity Incentive Plan in accordance with NASDAQ Listing Rule 5635(c)(4).

The Company granted stock options to purchase up to an aggregate of 32,200 shares of Kala Pharmaceuticals common stock to four new employees. The stock options were granted on March 15, 2021. The grants were approved by the Compensation Committee and were made as an inducement material to each employee entering into employment with Kala Pharmaceuticals in accordance with NASDAQ Listing Rule 5635(c)(4). The option awards have an exercise price of $7.54 per share, the closing price of Kala Pharmaceuticals’ common stock on March 15, 2021. The options have a ten-year term and vest over four years, with 25% of the original number of shares vesting on the first anniversary of the applicable employee’s new hire date and the remainder vesting in equal monthly installments over the following three years. Vesting of each option is subject to such employee’s continued service with Kala Pharmaceuticals through the applicable vesting dates.

About Kala Pharmaceuticals, Inc.
Kala is a biopharmaceutical company focused on the discovery, development, and commercialization of innovative therapies for diseases of the eye. Kala has applied its AMPPLIFY^® mucus-penetrating particle (MPP) Drug Delivery Technology to two ocular therapies, EYSUVIS™ (loteprednol etabonate ophthalmic suspension) 0.25% for the short-term (up to two weeks) treatment of signs and symptoms of dry eye disease and INVELTYS® (loteprednol etabonate ophthalmic suspension) 1% for the treatment of post-operative inflammation and pain following ocular surgery. The Company also has a pipeline of pre-clinical development programs targeted to address unmet medical needs, including both front and back of the eye diseases. For more information on Kala, please visit www.kalarx.com.

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FAQ

What stock options were granted by Kala Pharmaceuticals on March 15, 2021?

Kala Pharmaceuticals granted non-statutory stock options to purchase 32,200 shares to four new employees on March 15, 2021.

What is the exercise price for the stock options granted by KALA?

The exercise price for the stock options granted by Kala Pharmaceuticals is $7.54 per share.

How do the stock options vest for new employees at Kala Pharmaceuticals?

The stock options vest over four years with 25% vesting on the first anniversary of employment and the remainder vesting in equal monthly installments.

What is NASDAQ Listing Rule 5635(c)(4) that Kala Pharmaceuticals refers to?

NASDAQ Listing Rule 5635(c)(4) allows companies to grant stock options as inducements to new employees outside existing equity incentive plans.

How does the granting of stock options impact KALA's stock performance?

Stock options can potentially boost employee morale and performance, but if the exercise price is above market value, it may signal concerns over stock appreciation.