Form of Stock Option Agreement under the 2019 Inducement Equity Incentive Plan
FORM FOR X4 PHARMACEUTICALS, INC. 2019 INDUCEMENT EQUITY INCENTIVE PLAN
X4 PHARMACEUTICALS, INC.
INDUCEMENT EQUITY STOCK OPTION AGREEMENT
X4 Pharmaceuticals, Inc. (the Company) hereby grants the following stock option pursuant to its 2019 Inducement Equity Incentive Plan. The terms and conditions attached hereto are also a part hereof.
Notice of Grant
|Name of optionee (the Participant):|
Number of shares of the Companys Common
Stock subject to this option (Shares):
|Option exercise price per Share:|
|Number, if any, of Shares that vest immediately on the Grant Date:|
|Shares that are subject to vesting schedule:|
|Vesting Start Date:|
|Final Exercise Date:|
|All vesting is dependent on the Participant remaining an Eligible Participant as provided herein.|
[Notwithstanding the foregoing, 100% of the unvested portion of this option shall vest upon the termination of the Participants employment by the Company without Cause upon or at any time within 12 months following a Change of Control.
For purposes of this option, a Change of Control shall mean the occurrence of any of the following events: (i) any Person (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the Beneficial Owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Companys then outstanding voting securities (excluding for this purpose any such voting securities held by the Company, or any affiliate, parent or subsidiary of the Company, or by any employee benefit plan of the Company) pursuant to a transaction or a series of related transactions which the Board does not approve; or (ii) (A) A merger or consolidation of the Company whether or not approved by the Board, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or the parent of such entity) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or parent of such entity, as the case may be, outstanding immediately after such merger or consolidation; or (B) the sale or disposition by the Company of all or substantially all of the Companys assets.]
This option satisfies in full all commitments that the Company has to the Participant with respect to the issuance of stock, stock options or other equity securities.
|X4 PHARMACEUTICALS, INC.|
|Signature of Participant||Name of Officer|
X4 PHARMACEUTICALS, INC.
Inducement Equity Stock Option Agreement
Incorporated Terms and Conditions
(Non-Qualified Stock Option)
1. Grant of Option.
This agreement evidences the grant by the Company, on the grant date(the Grant Date) set forth in the Notice of Grant that forms part of this agreement (the Notice of Grant), to the Participant of an option to purchase, in whole or in part, on the terms provided herein and in the Companys 2019 Inducement Equity Incentive Plan (the Plan), the number of Shares set forth in the Notice of Grant of common stock, $0.001 par value per share, of the Company (Common Stock), at the exercise price per Share set forth in the Notice of Grant. Unless earlier terminated, this option shall expire at 5:00 p.m., Eastern time, on the Final Exercise Date set forth in the Notice of Grant (the Final Exercise Date).
The Company and the Participant understand and agree that the option shall be granted in compliance with Nasdaq Listing Rule 5635(c)(4) as a material inducement to the Participant entering into employment with the Company
2. Vesting Schedule.
This option will become exercisable (vest) in accordance with the vesting schedule set forth in the Notice of Grant.
The right of exercise shall be cumulative so that to the extent the option is not exercised in any period to the maximum extent permissible it shall continue to be exercisable, in whole or in part, with respect to all Shares for which it is vested until the earlier of the Final Exercise Date or the termination of this option under Section 3 hereof or the Plan.
3. Exercise of Option.
(a) Form of Exercise. Each election to exercise this option shall be in writing, in the form of the Stock Option Exercise Notice attached as Annex A, signed by the Participant, and received by the Company at its principal office, accompanied by this agreement, or in such other form (which may be electronic) as is approved by the Company, together with payment in full in the manner provided in the Plan. The Participant may purchase less than the number of shares covered hereby, provided that no partial exercise of this option may be for any fractional share.
(b) Continuous Relationship with the Company Required. Except as otherwise provided in this Section 3, this option may not be exercised unless the Participant, at the time he or she exercises this option, is, and has been at all times since the Grant Date, an employee of the Company or any other entity the employees of which are eligible to receive option grants under the Plan (an Eligible Participant).
(c) Termination of Relationship with the Company. If the Participant ceases to be an Eligible Participant for any reason, then, except as provided in paragraphs (d), (e) and (f) below, the right to exercise this option shall terminate three months after such cessation (but in no event after the Final Exercise Date), provided that this option shall be exercisable only to the extent that the Participant was entitled to exercise this option on the date of such cessation. Notwithstanding the foregoing, if the Participant, prior to the Final Exercise Date, violates the restrictive covenants (including, without limitation, the non-competition, non-solicitation, or confidentiality provisions) of any employment contract, the Non-Competition, Non-Solicitation, Confidentiality and Assignment of Inventions agreement to which the Participant is a party, if any, or any other agreement between the Participant and the Company, the right to exercise this option shall terminate immediately upon such violation.
(d) Exercise Period Upon Death or Disability. If the Participant dies or becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior to the Final Exercise Date while he or she is an Eligible Participant and the Company has not terminated such relationship for cause as specified in paragraph (e) below, this option shall be exercisable, within the period of one year following the date of death or disability of the Participant, by the Participant (or in the case of death by an authorized transferee), provided that this option shall be exercisable only to the extent that this option was exercisable by the Participant on the date of his or her death or disability, and further provided that this option shall not be exercisable after the Final Exercise Date.
(e) Termination for Cause. If, prior to the Final Exercise Date, the Participants employment is terminated by the Company for Cause (as defined in below), the right to exercise this option shall terminate immediately upon the effective date of such termination of employment. If, prior to the Final Exercise Date, the Participant is given notice by the Company of the termination of his or her employment by the Company for Cause, and the effective date of such employment termination is subsequent to the date of delivery of such notice, the right to exercise this option shall be suspended from the time of the delivery of such notice until the earlier of (i) such time as it is determined or otherwise agreed that the Participants employment shall not be terminated for Cause as provided in such notice or (ii) the effective date of such termination of employment (in which case the right to exercise this option shall, pursuant to the preceding sentence, terminate upon the effective date of such termination of employment). If the Participant is subject to an individual employment agreement with the Company or eligible to participate in a Company severance plan or arrangement, in any case which agreement, plan or arrangement contains a definition of cause for termination of employment, Cause shall have the meaning ascribed to such term in such agreement, plan or arrangement. Otherwise, Cause shall mean, with respect to the Participant (a) dishonesty with respect to the Company or any affiliate, (b) insubordination, substantial malfeasance or non-feasance of duty, (c) unauthorized disclosure of confidential information, (d) breach by the Participant of any provision of any employment, consulting, advisory, nondisclosure, non-competition or similar agreement between the Participant and the Company or any affiliate, and (e) conduct substantially prejudicial to the business of the Company or any affiliate. The determination of the administrator of the Plan as to the existence of Cause will be conclusive on the Participant and the Company. The Participants employment shall be considered to have been terminated for Cause if the Company determines, within 30 days after the Participants resignation, that termination for Cause was warranted.
(f) Consultants. If the Participant ceases to be an Eligible Participant of the Company but continues after termination of employment to provide services to the Company as a consultant to the Company, this option shall continue to vest in accordance with Section 2 above as if the option had not terminated until the Participant is no longer providing such services to the Company. In such case, this option shall continue on the same terms and conditions set forth herein until such Participant is no longer providing such services to the Company.
4. Withholding. No Shares will be issued pursuant to the exercise of this option unless and until the Participant pays to the Company, or makes provision satisfactory to the Company for payment of, any federal, state or local withholding taxes required by law to be withheld in respect of this option.
5. Transfer Restrictions; Clawback.
(a) This option may not be sold, assigned, transferred, pledged or otherwise encumbered by the Participant, either voluntarily or by operation of law, except by will or the laws of descent and distribution, and, during the lifetime of the Participant, this option shall be exercisable only by the Participant.
(b) In accepting this option, the Participant agrees to be bound by any clawback policy that the Company has in effect or may adopt in the future.
6. Provisions of the Plan.
This option is subject to the provisions of the Plan (including the provisions relating to amendments to the Plan), a copy of which is furnished to the Participant with this option.
X4 PHARMACEUTICALS, INC.
Stock Option Exercise Notice
X4 Pharmaceuticals, Inc.
955 Massachusetts Avenue, 4th Floor
Cambridge, MA 02139
Dear Sir or Madam:
I, (the Participant), hereby irrevocably exercise the right to purchase shares of the Common Stock, $0.001 par value per share (the Shares), of X4 Pharmaceuticals, Inc. (the Company) at $ per share pursuant to the Companys 2019 Inducement Equity Incentive Plan and a stock option agreement with the Company dated (the Option Agreement). Enclosed herewith is a payment of $ , the aggregate purchase price for the Shares. The certificate for the Shares should be registered in my name as it appears below or, if so indicated below, jointly in my name and the name of the person designated below, with right of survivorship.
Name and address of persons in whose name the Shares are to be jointly registered (if applicable):