ALTUS PHARMACEUTICALS INC. NON-QUALIFIED STOCK OPTION AGREEMENT
EXHIBIT 10.8
AGREEMENT
made as of the ___ day of ___ 20___, between Altus Pharmaceuticals Inc. (the
“Company”), a Delaware corporation having a principal place of business in Cambridge,
Massachusetts, and (the “Non-Employee Director”).
WHEREAS, the Company desires to grant to the Non-Employee Director an Option to purchase
shares of its common stock, $.01 par value per share (the “Shares”), under and for the purposes set
forth in the Company’s Amended and Restated 2002 Employee, Director and Consultant Stock Plan (the
“Plan”);
WHEREAS, the Company and the Non-Employee Director understand and agree that any terms used
and not defined herein have the same meanings as in the Plan; and
WHEREAS, the Company and the Non-Employee Director each intend that the Option granted herein
shall be a Non-Qualified Option.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other
good and valuable consideration, the parties hereto agree as follows:
1. GRANT OF OPTION.
The Company hereby grants to the Non-Employee Director the right and option to purchase all or
any part of an aggregate of ___Shares, on the terms and conditions and subject to all the
limitations set forth herein, under United States securities and tax laws, and in the Plan, which
is incorporated herein by reference. The Non-Employee Director acknowledges receipt of a copy of
the Plan.
2. PURCHASE PRICE.
The purchase price of the
Shares covered by the Option shall be
$ per Share, subject to
adjustment, as provided in the Plan, in the event of a stock split, reverse stock split or other
events affecting the holders of Shares after the date hereof (the “Purchase Price”). Payment shall
be made in accordance with Paragraph 9 of the Plan.
3. EXERCISABILITY OF OPTION.
Subject to the terms and conditions set forth in this Agreement and the Plan, the Option
granted hereby shall become exercisable as follows:
On , 20___ and every three months
thereafter until the fourth anniversary of
___, 20___
|
One-sixteenth of the Shares |
Notwithstanding the foregoing, in the event of a Change in Control (as defined in Paragraph
24B of the Plan) all of the Shares which are not then vested under this Option shall become fully
vested and immediately exercisable as of the date of the Change in Control including, but not
limited to, pursuant to a Corporate Transaction that also constitutes a Change in Control pursuant
to Paragraph 24B of the Plan unless this Option prior to the date of the Change in Control has
expired or been terminated pursuant to its terms or the terms of the Plan.
The foregoing rights are cumulative and are subject to the other terms and conditions of this
Agreement and the Plan.
4. TERM OF OPTION.
The Option shall terminate ten years from the date of this Agreement, but shall be subject to
earlier termination as provided herein or in the Plan.
If the Non-Employee Director ceases to be a director of the Company or of an Affiliate (for
any reason other than the death or Disability of the Non-Employee Director or termination of the
Non-Employee Director for “cause” (as defined in the Plan), the Option may be exercised, if it has
not previously terminated, within three months after the date the Non-Employee Director ceases to
be a director of the Company or an Affiliate, or within the originally prescribed term of the
Option, whichever is earlier, but may not be exercised thereafter. In such event, the Option shall
be exercisable only to the extent that the Option has become exercisable and is in effect at the
date of such cessation of service.
Notwithstanding the foregoing, in the event of the Non-Employee Director’s Disability or death
within three months after the termination of service, the Non-Employee Director or the Non-Employee
Director’s Survivors may exercise the Option within one year after the date of the Non-Employee
Director’s termination of service, but in no event after the date of expiration of the term of the
Option.
In the event the Non-Employee Director’s service is terminated by the Company or an Affiliate
for “cause” (as defined in the Plan), the Non-Employee Director’s right to exercise any unexercised
portion of this Option shall cease immediately as of the time the Non-Employee Director is notified
his or her service is terminated for “cause”, and this Option shall thereupon terminate.
Notwithstanding anything herein to the contrary, if subsequent to the Non-Employee Director’s
termination, but prior to the exercise of the Option, the Board of Directors of the Company
determines that, either prior or subsequent to the Non-Employee Director’s termination, the
Non-Employee Director engaged in conduct which would constitute “cause,” then the Non-Employee
Director shall immediately cease to have any right to exercise the Option and this Option shall
thereupon terminate.
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In the event of the Disability of the Non-Employee Director, as determined in accordance with
the Plan, the Option shall be exercisable within one year after the Non-Employee Director’s
termination of service or, if earlier, within the term originally prescribed by the Option. In
such event, the Option shall be exercisable:
| (a) | to the extent that the Option has become exercisable but has not been exercised as of the date of Disability; and | ||
| (b) | in the event rights to exercise the Option accrue periodically, to the extent of a pro rata portion through the date of Disability of any additional vesting rights that would have accrued on the next vesting date had the Non-Employee Director not become Disabled. The proration shall be based upon the number of days accrued in the current vesting period prior to the date of Disability. |
In the event of the death of the Non-Employee Director while a director of the Company or of
an Affiliate, the Option shall be exercisable by the Non-Employee Director’s Survivors within one
year after the date of death of the Non-Employee Director or, if earlier, within the originally
prescribed term of the Option. In such event, the Option shall be exercisable:
| (x) | to the extent that the Option has become exercisable but has not been exercised as of the date of death; and | ||
| (y) | in the event rights to exercise the Option accrue periodically, to the extent of a pro rata portion through the date of death of any additional vesting rights that would have accrued on the next vesting date had the Non-Employee Director not died. The proration shall be based upon the number of days accrued in the current vesting period prior to the Non-Employee Director’s date of death. |
5. METHOD OF EXERCISING OPTION.
Subject to the terms and conditions of this Agreement, the Option may be exercised by written
notice to the Company or its designee, in substantially the form of Exhibit A attached
hereto. Such notice shall state the number of Shares with respect to which the Option is being
exercised and shall be signed by the person exercising the Option. Payment of the purchase price
for such Shares shall be made in accordance with Paragraph 9 of the Plan. The Company shall
deliver such Shares as soon as practicable after the notice shall be received, provided, however,
that the Company may delay issuance of such Shares until completion of any action or obtaining of
any consent, which the Company deems necessary under any applicable law (including, without
limitation, state securities or “blue sky” laws). The Shares as to which the Option shall have
been so exercised shall be registered in the Company’s share register in the name of the person so
exercising the Option (or, if the Option shall be exercised by the Non-Employee Director and if the
Non-Employee Director shall so request in the notice exercising the Option, shall be registered in
the name of the Non-Employee Director and another person jointly, with right of survivorship) and
shall be delivered as provided above to or upon the written order of the person exercising the
Option. In the event the Option shall be exercised, pursuant to Section 4 hereof, by any person
other than the Non-Employee Director, such notice
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shall be accompanied by appropriate proof of the right of such person to exercise the Option.
All Shares that shall be purchased upon the exercise of the Option as provided herein shall be
fully paid and nonassessable.
6. PARTIAL EXERCISE.
Exercise of this Option to the extent above stated may be made in part at any time and from
time to time within the above limits, except that no fractional share shall be issued pursuant to
this Option.
7. NON-ASSIGNABILITY.
The Option shall not be transferable by the Non-Employee Director otherwise than by will or by
the laws of descent and distribution or pursuant to a qualified domestic relations order as defined
by the Code or Title I of the Employee Retirement Income Security Act or the rules thereunder.
However, the Non-Employee Director, with the approval of the Administrator, may transfer the Option
for no consideration to or for the benefit of the Non-Employee Director’s Immediate Family
(including, without limitation, to a trust for the benefit of the Non-Employee Director’s Immediate
Family or to a partnership or limited liability company for one or more members of the Non-Employee
Director’s Immediate Family), subject to such limits as the Administrator may establish, and the
transferee shall remain subject to all the terms and conditions applicable to the Option prior to
such transfer and each such transferee shall so acknowledge in writing as a condition precedent to
the effectiveness of such transfer. The term “Immediate Family” shall mean the Non-Employee
Director’s spouse, former spouse, parents, children, stepchildren, adoptive relationships, sisters,
brothers, nieces, nephews and grandchildren (and, for this purpose, shall also include the
Non-Employee Director.) Except as provided in the previous sentence, the Option shall be
exercisable, during the Non-Employee Director’s lifetime, only by the Non-Employee Director (or, in
the event of legal incapacity or incompetency, by the Non-Employee Director’s guardian or
representative) and shall not be assigned, pledged or hypothecated in any way (whether by operation
of law or otherwise) and shall not be subject to execution, attachment or similar process. Any
attempted transfer, assignment, pledge, hypothecation or other disposition of the Option or of any
rights granted hereunder contrary to the provisions of this Section 7, or the levy of any
attachment or similar process upon the Option shall be null and void.
8. NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE.
The Non-Employee Director shall have no rights as a stockholder with respect to Shares subject
to this Agreement until registration of the Shares in the name of the Non-Employee Director.
Except as is expressly provided in the Plan with respect to certain changes in the capitalization
of the Company, no adjustment shall be made for dividends or similar rights for which the record
date is prior to the date of such registration.
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9. ADJUSTMENTS.
The Plan contains provisions covering the treatment of Options in a number of contingencies
such as stock splits and mergers. Provisions in the Plan for adjustment with respect to stock
subject to Options and the related provisions with respect to successors to the business of the
Company are hereby made applicable hereunder and are incorporated herein by reference.
10. TAXES.
The Non-Employee Director acknowledges that upon exercise of the Option the Non-Employee
Director will be deemed to have taxable income measured by the difference between the then fair
market value of the Shares received upon exercise and the price paid for such Shares pursuant to
this Agreement. The Non-Employee Director acknowledges that any income or other taxes due from him
or her with respect to this Option or the Shares issuable pursuant to this Option shall be the
Non-Employee Director’s responsibility.
The Non-Employee Director agrees that the Company may withhold from the Non-Employee
Director’s remuneration, if any, the minimum statutory amount of federal, state and local
withholding taxes attributable to such amount that is considered compensation includable in such
person’s gross income. At the Company’s discretion, the amount required to be withheld may be
withheld in cash from such remuneration, or in kind from the Shares otherwise deliverable to the
Non-Employee Director on exercise of the Option. The Non-Employee Director further agrees that, if
the Company does not withhold an amount from the Non-Employee Director’s remuneration sufficient to
satisfy the Company’s income tax withholding obligation, the Non-Employee Director will reimburse
the Company on demand, in cash, for the amount under-withheld.
11. PURCHASE FOR INVESTMENT.
Unless the offering and sale of the Shares to be issued upon the particular exercise of the
Option shall have been effectively registered under the Securities Act of 1933, as now in force or
hereafter amended (the “1933 Act”), the Company shall be under no obligation to issue the Shares
covered by such exercise unless and until the following conditions have been fulfilled:
| (a) | The person(s) who exercise the Option shall warrant to the Company, at the time of such exercise, that such person(s) are acquiring such Shares for their own respective accounts, for investment, and not with a view to, or for sale in connection with, the distribution of any such Shares, in which event the person(s) acquiring such Shares shall be bound by the provisions of the following legend which shall be endorsed upon the certificate(s) evidencing the Shares issued pursuant to such exercise: |
“The shares represented by this certificate have been taken for investment
and they may not be sold or otherwise transferred by any person, including a
pledgee, unless (1) either (a) a Registration Statement with respect to
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such shares shall be effective under the Securities Act of 1933, as amended,
or (b) the Company shall have received an opinion of counsel satisfactory to
it that an exemption from registration under such Act is then available, and
(2) there shall have been compliance with all applicable state securities
laws;” and
| (b) | If the Company so requires, the Company shall have received an opinion of its counsel that the Shares may be issued upon such particular exercise in compliance with the 1933 Act without registration thereunder. Without limiting the generality of the foregoing, the Company may delay issuance of the Shares until completion of any action or obtaining of any consent, which the Company deems necessary under any applicable law (including without limitation state securities or “blue sky” laws). |
12. RESTRICTIONS ON TRANSFER OF SHARES.
12.1 The Non-Employee Director agrees that in the event the Company proposes to offer for sale
to the public any of its equity securities and such Non-Employee Director is requested by the
Company and any underwriter engaged by the Company in connection with such offering to sign an
agreement restricting the sale or other transfer of Shares, then it will promptly sign such
agreement and will not transfer, whether in privately negotiated transactions or to the public in
open market transactions or otherwise, any Shares or other securities of the Company held by him or
her during such period as is determined by the Company and the underwriters, not to exceed 90 days
following the closing of the offering, plus such additional period of time as may be required to
comply with Marketplace Rule 2711 of the National Association of Securities Dealers, Inc. or
similar rules thereto (such period, the “Lock-Up Period”). Such agreement shall be in writing and
in form and substance reasonably satisfactory to the Company and such underwriter and pursuant to
customary and prevailing terms and conditions. Notwithstanding whether the Non-Employee Director
has signed such an agreement, the Company may impose stop-transfer instructions with respect to the
Shares or other securities of the Company subject to the foregoing restrictions until the end of
the Lock-Up Period.
12.2 The Non-Employee Director acknowledges and agrees that neither the Company, its
shareholders nor its directors and officers, has any duty or obligation to disclose to the
Non-Employee Director any material information regarding the business of the Company or affecting
the value of the Shares before, at the time of, or following a termination in service of the
Non-Employee Director by the Company, including, without limitation, any information concerning
plans for the Company to make a public offering of its securities or to be acquired by or merged
with or into another firm or entity.
13. NO OBLIGATION TO MAINTAIN RELATIONSHIP.
The Company is not by the Plan or this Option obligated to continue the Non-Employee Director
as a director of the Company or an Affiliate. The Non-Employee Director acknowledges: (i) that
the Plan is discretionary in nature and may be suspended or terminated by the Company at any time;
(ii) that the grant of the Option is a one-time benefit which does not
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create any contractual or other right to receive future grants of options, or benefits in lieu
of options; (iii) that the Non-Employee Director’s participation in the Plan is voluntary; and (iv)
that the Option is not part of normal or expected compensation for purposes of calculating any
severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension
or retirement benefits or similar payments.
14. NOTICES.
Any notices required or permitted by the terms of this Agreement or the Plan shall be given by
recognized courier service, facsimile, registered or certified mail, return receipt requested,
addressed as follows:
If to the Company:
| Altus Pharmaceuticals Inc. | ||||
| ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ | ||||
| ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ | ||||
| Attn: Legal Department | ||||
| If to the Non-Employee Director: | ||||
or to such other address or addresses of which notice in the same manner has previously been given.
Any such notice shall be deemed to have been given upon the earlier of receipt, one business day
following delivery to a recognized courier service or three business days following mailing by
registered or certified mail.
15. GOVERNING LAW.
This Agreement shall be construed and enforced in accordance with the law of the State of
Delaware, without giving effect to the conflict of law principles thereof. For the purpose of
litigating any dispute that arises under this Agreement, the parties hereby consent to exclusive
jurisdiction in Massachusetts and agree that such litigation shall be conducted in the courts of
Middlesex County, Massachusetts or the federal courts of the United States for the District of
Massachusetts.
16. BENEFIT OF AGREEMENT.
Subject to the provisions of the Plan and the other provisions hereof, this Agreement shall be
for the benefit of and shall be binding upon the heirs, executors, administrators, successors and
assigns of the parties hereto.
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17. ENTIRE AGREEMENT.
This Agreement, together with the Plan, embodies the entire agreement and understanding
between the parties hereto with respect to the subject matter hereof and supersedes all prior oral
or written agreements and understandings relating to the subject matter hereof. No statement,
representation, warranty, covenant or agreement not expressly set forth in this Agreement shall
affect or be used to interpret, change or restrict, the express terms and provisions of this
Agreement, provided, however, in any event, this Agreement shall be subject to and governed by the
Plan.
18. MODIFICATIONS AND AMENDMENTS.
The terms and provisions of this Agreement may be modified or amended as provided in the Plan.
19. WAIVERS AND CONSENTS.
Except as provided in the Plan, the terms and provisions of this Agreement may be waived, or
consent for the departure therefrom granted, only by written document executed by the party
entitled to the benefits of such terms or provisions. No such waiver or consent shall be deemed to
be or shall constitute a waiver or consent with respect to any other terms or provisions of this
Agreement, whether or not similar. Each such waiver or consent shall be effective only in the
specific instance and for the purpose for which it was given, and shall not constitute a continuing
waiver or consent.
20. DATA PRIVACY.
By entering into this Agreement, the Non-Employee Director: (i) authorizes the Company and
each Affiliate, and any agent of the Company or any Affiliate administering the Plan or providing
Plan record keeping services, to disclose to the Company or any of its Affiliates such information
and data as the Company or any such Affiliate shall request in order to facilitate the grant of
options and the administration of the Plan; (ii) waives any data privacy rights he or she may have
with respect to such information; and (iii) authorizes the Company and each Affiliate to store and
transmit such information in electronic form.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly
authorized officer, and the Non-Employee Director has hereunto set his or her hand, all as
of the day and year first above written.
| ALTUS PHARMACEUTICALS INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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Exhibit A
IMPORTANT NOTICE: This form of Notice of Exercise may only be used at such time as the Company has
filed a Registration Statement with the Securities and Exchange Commission under which the issuance
of the Shares for which this exercise is being made is registered and such Registration Statement
remains effective.
NOTICE OF EXERCISE OF NON-QUALIFIED STOCK OPTION
Ladies and Gentlemen:
I
hereby exercise my Non-Qualified Stock Option to purchase shares (the “Shares”) of
the common stock, $.01 par value, of Altus Pharmaceuticals Inc. (the “Company”), at the exercise
price of $ per share, pursuant to and subject to the terms of that certain Non-Qualified
Stock Option Agreement between the undersigned and the Company dated
,
200__.
I understand the nature of the investment I am making and the financial risks thereof. I am
aware that it is my responsibility to have consulted with competent tax and legal advisors about
the relevant national, state and local income tax and securities laws affecting the exercise of the
Option and the purchase and subsequent sale of the Shares.
I am paying the option exercise price for the Shares as follows:
Please issue the Shares (check one):
o to me; or
o to me and , as joint tenants with right of
survivorship,
at the following address:
II-1
My mailing address for shareholder communications, if different from the address listed above,
is:
| Very truly yours, | ||||
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