ALTUS PHARMACEUTICALS INC. NON-QUALIFIED STOCK OPTION AGREEMENT
Exhibit 99.3
AGREEMENT made as of the 2nd day of June, 2008, between Altus Pharmaceuticals Inc.,
a Delaware corporation having a principal place of business in Cambridge, Massachusetts (the
“Company”), and Xxxxxxx Xxxxxxx, Ph.D. (the “Participant”).
WHEREAS, the Company desires to grant to the Participant an option to purchase shares of its
common stock, $.01 par value per share (the “Common Stock”); and
WHEREAS, the Company and the Participant each intend that the option granted herein shall be a
Non-Qualified Option (the “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 Participant the right and option to purchase all or any part
of an aggregate of 340,000 shares of Common Stock (the “Shares”), on the terms and conditions and
subject to all the limitations set forth herein, under United States securities and tax laws.
Except as expressly provided in this Agreement, no issuance by the Company of shares of stock of
any class, or securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price of the Shares.
Except as expressly provided in this Agreement, no adjustments shall be made for dividends paid in
cash or in property (including without limitation, securities) of the Company prior to any issuance
of Shares pursuant to the Option.
2. PURCHASE PRICE.
The purchase price of the Shares covered by the Option shall be $4.07 per Share,
subject to adjustment, as provided in Section 9 of this Agreement, in the event of a stock split,
reverse stock split or other events affecting the holders of shares of Common Stock after the date
hereof (the “Purchase Price”). Payment shall be made in accordance with Section 5 of this
Agreement.
3. EXERCISABILITY OF OPTION.
Subject to the terms and conditions set forth in this Agreement, the Option granted hereby
shall become exercisable as follows:
Twenty-five percent (25%) of the Shares on June 2, 2009 and one-sixteenth (1/16th) of the
Shares every three (3) months thereafter.
The foregoing rights are cumulative and are subject to the other terms and conditions of this
Agreement.
Notwithstanding the above, in the event within one year after the date of a Change in Control
(as defined below), (i) the Participant is terminated as an employee by the Company or any parent
or subsidiary, direct or indirect, of the Company (an “Affiliate”) for any reason other than Cause
(as defined below), or (ii) the Participant terminates the Participant’s employment voluntarily for
Good Reason (as defined below), this Option will be immediately exercisable as of the date of the
Participant’s last day of employment, unless this Option has otherwise expired or been terminated
pursuant to its terms.
As used herein, “Good Reason” shall mean any action by the Company without the Participant’s
prior written consent which results in (i) any requirement by the Company that Participant performs
Participant’s principal duties outside a radius of 50 miles from the Company’s Cambridge or planned
Waltham, MA location; (ii) any material diminution in Participant’s title, position,
duties, responsibilities or authority, including Participant’s ceasing to serve as the Company’s
President and Chief Executive Officer as determined by the Company’s Board of Directors or the
Board of Directors does not recommend he continue to serve as a member of the Board; (iii) a
reduction in the Participant’s base salary (unless such reduction is effected in connection with a
general and proportionate reduction of salaries for all members of the management team) or any
reduction of Participant’s target bonus amount to less than 50% of Participant’s annual salary or
such higher target amount if increased at the Company’s Compensation Committee’s discretion; (iv)
any Change in Control (as defined in this Agreement) involving the Company which results in
Participant’s ceasing to serve as the Chief Executive Officer for the surviving entity and for all
direct and indirect parent organizations thereof; or (v) the Company materially breaches any of its
obligations to the Participant pursuant to the Severance and Change in Control Agreement between
the Participant and the Company dated as of June 2, 2008 and/or the “Offer Letter” between the
Company and the Participant dated May 21, 2008 (incorporated herein by reference). In order for
this Option to be exercisable pursuant to a termination for Good Reason, Participant shall be
required to provide notice to the Company as provided in Section 1(c) of the Severance and Change
in Control Agreement.
“Change in Control” means the occurrence of any of the following events:
(i) the shareholders of the Company approve (a) any consolidation or merger of the Company (x)
where the shareholders of the Company, immediately prior to the consolidation or merger, would not,
immediately after the consolidation or merger, beneficially own, directly or indirectly, shares
representing in the aggregate more than 50% of the combined voting power of all the outstanding
securities of the corporation issuing cash or securities in the consolidation or merger (or of its
ultimate parent corporation, if any) or (y) where the members of the Board of Directors of the
Company, immediately prior to the consolidation or merger, would not, immediately after the
consolidation or merger, constitute more than 50% of the board of directors of the corporation
issuing cash or securities in the consolidation or merger (or of its ultimate parent corporation,
if any), (b) any sale, lease, exchange or other transfer (in one transaction or a series of
transactions contemplated or arranged by any party as a single plan) of
all or substantially all of the assets of the Company, or (c) any plan or proposal for the
liquidation or dissolution of the Company;
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(ii) individuals who, as of the date hereof, constitute the entire Board of Directors of the
Company (the “Incumbent Directors”) cease for any reason to constitute at least 50% of the Board of
Directors of the Company, provided that any individual becoming a director subsequent to the date
hereof whose election, or nomination for election by the Company’s shareholders, was approved by a
vote of at least a majority of the then Incumbent Directors shall be, for purposes of this
Agreement, considered as though such individual were an Incumbent Director; or
(iii) any “person,” as such term is used in Section 13(d) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”) (other than the Company, any employee benefit plan of the
Company or any entity organized, appointed or established by the Company for or pursuant to the
terms of such plan), together with all “affiliates” and “associates” (as such terms are defined in
Rule 12b-2 under the Exchange Act) of such person, shall become the “beneficial owner” or
“beneficial owners” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, of securities of the Company representing in the aggregate 25% or more of either (a)
the then outstanding shares of the Common Stock of the Company or (b) the combined voting power of
all then outstanding securities of the Company having the right under ordinary circumstances to
vote in an election of the Board of Directors of the Company (“Voting Securities”) (in either such
case, other than as a result of acquisitions of such securities directly from the Company).
Notwithstanding the foregoing, a “Change in Control” of the Company shall not be deemed to
have occurred for purposes of the foregoing clause (iii) solely as the result of an acquisition of
securities by the Company which, by reducing the number of shares of Common Stock or other Voting
Securities outstanding, increases (a) the proportionate number of shares of Common Stock
beneficially owned by any person to 25% or more of the Common Stock then outstanding or (b) the
proportionate voting power represented by the Voting Securities beneficially owned by any person to
25% or more of the combined voting power of all then outstanding Voting Securities; provided,
however, that if any person referred to in clause (a) or (b) of this sentence shall thereafter
become the beneficial owner of any additional shares of Common Stock or other Voting Securities
(other than pursuant to a stock split, stock dividend or similar transaction), then a “Change in
Control” shall be deemed to have occurred for purposes of the foregoing clause (iii).
For purposes of this Agreement, “Cause” shall include (and is not limited to) dishonesty with
respect to the Company or any Affiliate, insubordination, substantial malfeasance or non-feasance
of duty, unauthorized disclosure of confidential information, breach by the Participant of any
provision of any employment, consulting, advisory, nondisclosure, non-competition or similar
agreement between the Participant and the Company, and conduct substantially prejudicial to the
business of the Company or any Affiliate. The determination of the Board of Directors of the
Company as to the existence of Cause will be conclusive on the Participant and the Company. Cause
is not limited to events which have occurred prior to a Participant’s termination of service, nor
is it necessary that the Board of Director’s finding of Cause occur
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prior to termination. If the
Board of Directors of the Company determines, subsequent to the Participant’s termination of
service but prior to the exercise of the Option, that
either prior or subsequent to the Participant’s termination the Participant engaged in conduct
which would constitute Cause, then the right to exercise the Option shall be forfeited. Any
definition in an agreement between the Participant and the Company or an Affiliate, which contains
a conflicting definition of Cause for termination and which is in effect at the time of such
termination, shall supersede the definition in this Agreement with respect to the Participant.
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.
If the Participant ceases to be an employee, director or consultant of the Company or any
Affiliate (for any reason other than the death or permanent and total disability as defined in
Section 22(e)(3) of the United States Internal Revenue Code of 1986, as amended (the “Code”) of the
Participant (a “Disability”) or termination of the Participant for Cause, the Option may be
exercised, if it has not previously terminated, within three months after the date the Participant
ceases to be an employee, director or consultant 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 Participant’s Disability or death within
three months after the termination of service, the Participant or the deceased Participant’s legal
representatives and/or any person or persons who acquired the Participant’s rights to the Option by
will or by the laws of descent and distribution (the “Participant’s Survivors”) may exercise the
Option within one year after the date of the Participant’s termination of service, but in no event
after the date of expiration of the term of the Option.
In the event the Participant’s service is terminated by the Company or an Affiliate for Cause,
the Participant’s right to exercise any unexercised portion of this Option shall cease immediately
as of the time the Participant is notified his service is terminated for Cause, and this Option
shall thereupon terminate. Notwithstanding anything herein to the contrary, if subsequent to the
Participant’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 Participant’s termination, the
Participant engaged in conduct which would constitute Cause, then the Participant shall immediately
cease to have any right to exercise the Option and this Option shall thereupon terminate.
In the event of the Disability of the Participant, the Option shall be exercisable within one
year after the Participant’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 |
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(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 Participant 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. |
The Board of Directors of the Company or, if applicable, a committee of the Board of
Directors, shall make the determination both of whether a Disability has occurred and the date of
its occurrence (unless a procedure for such determination is set forth in another agreement between
the Company and the Participant, in which case such procedure shall be used for such
determination). If requested, the Participant shall be examined by a physician selected or approved
by the Board of Directors of the Company or, if applicable, a committee of the Board of Directors,
the cost of which examination shall be paid for by the Company.
In the event of the death of the Participant while an employee, director or consultant of the
Company or of an Affiliate, the Option shall be exercisable by the Participant’s Survivors within
one year after the date of death of the Participant 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 Participant not died. The proration shall be based upon the number of days accrued in the current vesting period prior to the Participant’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, together with provision for payment of the full Purchase Price in accordance with this
Section 5 for the Shares as to which the Option is being exercised. 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 (a) in
United States dollars in cash or by check, or (b) at the discretion of the Board of Directors of
the Company or, if applicable, a committee of the Board of Directors, through delivery of shares of
Common Stock having a Fair Market Value (as defined below) equal as of the date of the exercise to
the cash exercise price of the Option, or (c) at the discretion of the Board of Directors of the
Company or, if applicable, a committee of the Board of Directors, in accordance with a cashless
exercise program established with a securities brokerage firm, and approved by the Board of
Directors of the Company or, if applicable, a committee of the Board of Directors, or (d) at the
discretion of the Board of Directors of the Company or, if applicable, a committee of the Board of
Directors, by any combination of (a), (b) and (c) above, or (e) at the discretion of
the Board of Directors of the Company or, if applicable, a committee of the Board of Directors,
payment of such other lawful consideration as the Board of Directors of the Company or, if
applicable, a committee of the Board of Directors, may determine.
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For purposes of this Agreement, Fair Market Value of a share of Common Stock means:
(1) If the Common Stock of the Company is listed on a national securities exchange or traded
in the over-the-counter market and sales prices are regularly reported for the Common Stock, the
closing or last price of the Common Stock on the composite tape or other comparable reporting
system for the trading day on the applicable date and if such applicable date is not a trading day,
the last market trading day prior to such date;
(2) If the Common Stock of the Company is not traded on a national securities exchange but is
traded on the over-the-counter market, if sales prices are not regularly reported for the Common
Stock for the trading day referred to in clause (1) above, and if bid and asked prices for the
Common Stock are regularly reported, the mean between the bid and the asked price for the Common
Stock at the close of trading in the over-the-counter market for the trading day on which Common
Stock was traded on the applicable date and if such applicable date is not a trading day, the last
market trading day prior to such date; and
(3) If the Common Stock is neither listed on a national securities exchange nor traded in the
over-the-counter market, such value as the Board of Directors of the Company or, if applicable, a
committee of the Board of Directors, in good faith, shall determine.
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 Participant and
if the Participant shall so request in the notice exercising the Option, shall be registered in the
name of the Participant 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
Participant, such notice 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.
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7. NON-ASSIGNABILITY.
The Option shall not be transferable by the Participant 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 Participant, with the approval of the Board of Directors of the Company or, if applicable, a
committee of the Board of Directors, may transfer the Option for no consideration to or for the
benefit of the Participant’s Immediate Family (including, without limitation, to a trust for the
benefit of the Participant’s Immediate Family or to a partnership or limited liability company for
one or more members of the Participant’s Immediate Family), subject to such limits as the Board of
Directors of the Company or, if applicable, a committee of the Board of Directors, 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
Participant’s spouse, former spouse, parents, children, stepchildren, adoptive relationships,
sisters, brothers, nieces, nephews and grandchildren (and, for this purpose, shall also include the
Participant.) Except as provided above, the Option shall be exercisable, during the Participant’s
lifetime, only by the Participant (or, in the event of legal incapacity or incompetency, by the
Participant’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 Participant 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 Participant. Except as is expressly
provided in this Agreement 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.
9. ADJUSTMENTS.
Upon the occurrence of any of the following events, the Participant’s rights with respect to
the Option, except to the extent previously exercised shall be adjusted as hereinafter provided:
A. Stock Dividends and Stock Splits. If (i) shares of Common Stock of the Company shall be
subdivided or combined into a greater or smaller number of shares or if the Company shall issue any
shares of Common Stock as a stock dividend on its outstanding Common Stock, or (ii) additional
shares or new or different shares or other securities of the Company or other non-cash assets are
distributed with respect to such shares of Common Stock, the Shares deliverable upon the exercise
of the Option shall be appropriately increased or
decreased proportionately, and appropriate adjustments shall be made including, in the Purchase
Price per Share to reflect such events.
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B. Corporate Transactions. If the Company is to be consolidated with or acquired by another
entity in a merger, sale of all or substantially all of the Company’s assets other than a
transaction to merely change the state of incorporation (a “Corporate Transaction”), the Board of
Directors of the Company or, if applicable, a committee of the Board of Directors, or the board of
directors of any entity assuming the obligations of the Company hereunder (the “Successor Board”),
shall, as to the unexercised portion of the Option, either (i) make appropriate provision for the
continuation of the Option by substituting on an equitable basis for the Shares either the
consideration payable with respect to the outstanding shares of Common Stock in connection with the
Corporate Transaction or securities of any successor or acquiring entity; or (ii) upon written
notice to the Participant, provide that the Option must be exercised (either to the extent then
exercisable or, at the discretion of the Board of Directors of the Company or, if applicable, a
committee of the Board of Directors, or upon a Change in Control of the Company, the Option being
made fully exercisable for purposes of this Subparagraph), within a specified number of days of the
date of such notice, at the end of which period the Option shall terminate; or (iii) terminate the
Option in exchange for a cash payment equal to the excess of the Fair Market Value of the Shares
(either to the extent then exercisable or, at the discretion of the Board of Directors of the
Company or, if applicable, a committee of the Board of Directors, the Option being made fully
exercisable for purposes of this Subparagraph) over the exercise price thereof.
C. Recapitalization or Reorganization. In the event of a recapitalization or reorganization
of the Company other than a Corporate Transaction pursuant to which securities of the Company or of
another corporation are issued with respect to the outstanding shares of Common Stock of the
Company, the Participant upon exercising the Option after the recapitalization or the
reorganization shall be entitled to receive for the Purchase Price paid upon such exercise the
number of replacement securities which would have been received if the Option had been exercised
prior to such recapitalization or reorganization.
D. Dissolution or Liquidation of the Company. Upon the dissolution or liquidation of the
Company, the Option will terminate and become null and void; provided, however, that if the rights
of the Participant or the Participant’s Survivors have not otherwise terminated and expired, the
Participant or the Participant’s Survivors will have the right immediately prior to such
dissolution or liquidation to exercise the Option to the extent that the Option is exercisable as
of the date immediately prior to such dissolution or liquidation.
10. TAXES.
The Participant acknowledges that upon exercise of the Option the Participant 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
Participant acknowledges that any income or other taxes due from him with respect to this Option or
the Shares issuable pursuant to this Option shall be the Participant’s responsibility.
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The Participant agrees that the Company may withhold from the Participant’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 Participant on exercise of
the Option. The Fair Market Value of the Shares to be withheld shall be determined as of the most
recent practicable date prior to the date of exercise. The Participant further agrees that, if the
Company does not withhold an amount from the Participant’s remuneration sufficient to satisfy the
Company’s income tax withholding obligation, the Participant 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 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 Participant agrees that in the event the Company proposes to offer for sale to the
public any of its equity securities and such Participant is requested by the Company and any
underwriter engaged by the Company in connection with such offering to sign an agreement
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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 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 Participant 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 Participant acknowledges and agrees that neither the Company, its shareholders nor
its directors and officers, has any duty or obligation to disclose to the Participant 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 of the employment of the Participant 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 this Option obligated to continue the Participant as an employee,
director or consultant of the Company or an Affiliate. The Participant acknowledges: (i) that
this Agreement 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 create any contractual
or other right to receive future grants of options, or benefits in lieu of options; (iii) that all
determinations with respect to any such future grants, including, but not limited to, the times
when options shall be granted, the number of shares subject to each option, the option price, and
the time or times when each option shall be exercisable, will be at the sole discretion of the
Company; (iv) that the Participant’s participation in this Agreement is voluntary; (v) that the
value of the Option is an extraordinary item of compensation which is outside the scope of the
Participant’s employment contract, if any; and (vi) 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 shall be given by recognized
courier service, facsimile, registered or certified mail, return receipt requested, addressed as
follows:
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If to the Company:
If to the Participant:
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 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.
17. ENTIRE AGREEMENT.
This Agreement 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.
18. MODIFICATIONS AND AMENDMENTS.
The terms and provisions of this Agreement may be modified or amended by the Company in a
manner which is not adverse to the Participant, including, without limitation, to the extent
necessary to qualify the Shares issuable upon exercise of the Option for listing on any national
securities exchange or quotation in any national automated quotation system of
securities dealers. Any modification or amendment of this Agreement shall not, without the
consent of the Participant, adversely affect his rights under the Option, including but not limited
to pursuant to Section 409A of the Code.
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19. WAIVERS AND CONSENTS.
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 Participant: (i) authorizes the Company and each
Affiliate, and any agent of the Company or any Affiliate administering this Agreement or providing
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 administration
of this Agreement; (ii) waives any data privacy rights he may have with respect to such
information; and (iii) authorizes the Company and each Affiliate to store and transmit such
information in electronic form.
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12
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly
authorized officer, and the Participant has hereunto set his hand, all as of the day and year first
above written.
ALTUS PHARMACEUTICALS INC. |
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By: | /s/ Xxxxxxxx X. Xxxxxx | |||
Name: | Xxxxxxxx X. Xxxxxx | |||
Title: | Senior Vice President, Chief Financial Officer and Treasurer | |||
/s/ Xxxxxxx Xxxxxxx | ||||
Xxxxxxx Xxxxxxx, Ph.D. | ||||
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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 (the “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:
My mailing address for shareholder communications, if different from the address listed above,
is:
Very truly yours, |
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Participant (signature) | ||||
Print Name | ||||
Date | ||||
Social Security Number |