Exhibit 10.3

*** Certain information in this exhibit has been excluded because constitutes
personal information that, if disclosed, would constitute a clearly unwarranted
invasion of privacy.

 

CONSULTING AGREEMENT

 

This CONSULTING AGREEMENT (this “Consulting Agreement”) is executed as of August
6, 2019 to be effective as of January 1, 2020 (the “Effective Date”), by and
between Assembly Biosciences, Inc., a Delaware corporation with its principal
place of business at 11711 N. Meridian Street, Suite 301, Carmel, IN 46032 (the
“Company”), and Derek A. Small residing at [***] (the “Consultant”).  This
Consulting Agreement is being entered into by the parties pursuant to that
certain Separation Agreement dated August 6, 2019 (the “Separation Agreement”)
and is Exhibit B to such Separation Agreement.  Each capitalized term used
herein and not otherwise defined shall have the meaning assigned to such term in
the Separation Agreement.

WITNESSETH:

WHEREAS, Company desires to engage Consultant to provide certain strategic
advisory  services on an independent contractor basis as outlined below, and
Consultant wishes to provide such services to Company; and

WHEREAS, Company and Consultant desire to establish and document the terms and
conditions of such consulting relationship between them.

NOW, THEREFORE, in consideration of the mutual promises and obligations of the
parties set forth herein and for other good and valuable consideration, the
receipt and legal sufficiency of which are hereby acknowledged, the parties
agree as follows:

1.Appointment of Consultant; Services. Company appoints Consultant and
Consultant hereby accepts appointment as consultant to the Company. In this
capacity, Consultant shall perform strategic advisory services and other
projects as may be requested from time to time by the Chief Executive Officer of
the Company, and agreed to by Consultant, including providing an orderly
transition of Consultant’s responsibilities to the Chief Executive Officer and
President and providing strategic advisory services to the executive officers as
requested (the “Services”). Consultant and Company shall work together to
delineate the scope of each project and the timeline and deliverables related
thereto.  Consultant is expected to work no more than 10 hours per week for the
Company, which is less than 20% of his average weekly service level with the
Company over the 36 months prior to the end of the Initial Consulting Period.  

2.Term; Termination. Upon the Separation Agreement becoming effective, this
Consulting Agreement will be effective as of the first day following the
Separation Date (as defined in the Separation Agreement) and will continue in
effect until the first anniversary of the Effective Date (the “Term”).  This
Consulting Agreement may be terminated at any time by either party, with or
without Cause (as defined in the 2018 Stock Incentive Plan, as amended), and
without prejudice to any right or remedy a party may have due to any failure of
the other party to perform their obligations under this Consulting Agreement,
upon one hundred eighty (180) days written notice to the other party. The
Company may, in addition to any other rights it may have at law or in equity,
terminate this Consulting Agreement immediately and without prior notice for
Cause or if Consultant is in breach of any material provision of this Consulting
Agreement or the Separation Agreement and fails to cure such breach (to the
extent capable of being cured) within thirty (30) days after receipt of written
notice describing in detail Consultant’s breach.  In the event of a dispute over
what constitutes a breach hereunder or a termination for Cause, the parties
shall agree to resolve the matter in accordance with Section 15.

ACTIVE/100432784.1

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3.Duties of Consultant.  Consultant agrees to faithfully, diligently,
competently, and to the best of his ability perform the Services; provided, that
Consultant will at all times retain sole and absolute discretion and judgment in
the manner and means of carrying out the Services. Consultant shall use best
efforts to perform the Services in a manner satisfactory to the
Company.  Without limiting the foregoing, Consultant shall provide Services to
Company in accordance with generally accepted professional standards as applied
to similar projects performed under similar conditions prevailing in the
industry at the time such Services are rendered to the Company. Consultant shall
not subcontract any portion of Consultant’s duties or obligations under this
Consulting Agreement without the prior written consent of the Company. 

4.Services for Others. Subject to the limitations in this Section 4, Consultant
will be free to perform consulting services for other persons and entities
during the Term. During the Term, Consultant will not directly or indirectly,
(i) engage in any business for Consultant’s own account that competes with the
Business (as defined below) of Company in any geographical area in which Company
does business, (ii) enter the employ of, or render any services to, any person
engaged in any business that competes with the Business of Company in any
geographical area in which Company does business but only to the extent
Consultant is being employed or retained to provide services to the competitor
in the Business, (iii) acquire a financial interest in, or otherwise become
actively involved with, any person engaged in any business that competes with
the Business of Company in any geographical area in which Company does business
as an individual, partner, shareholder, officer, director, principal, agent,
trustee or consultant, or (iv) interfere with business relationships (whether
formed before or after the Term with Company) between Company and strategic
partner, vendor or suppliers of, or consultants to, Company that were engaged
in, or were immediate prospects for engaging in, business with Company before my
consulting relationship with Company was terminated.  For purposes of this
Section 4, “Business” shall mean any business directly or indirectly related to
design, development, and marketing of hepatitis B virus, antiviral and/or
microbiome therapeutics and technology and any other product or services that
the Company may during the Term of this Consulting Agreement be designing,
developing and/or marketing and on which Consultant provides Services to during
the Term of this Consulting Agreement. Notwithstanding the foregoing, Consultant
may, directly or indirectly own, solely as an investment, securities of any
person engaged in the Business of Company which are publicly traded on a
national or regional stock exchange or on the over-the-counter market if
Consultant (i) is not a controlling person of, or a member of a group which
controls, such person and (ii) does not, directly or indirectly, own 3% or more
of any class of securities of such person. Company agrees and acknowledges that
Consultant may provide consulting services to third parties and this provision
is not intended to unreasonably restrict Consultant’s ability to engage in such
other business activities.

5.Compensation of Consultant.  Subject to approval by the Board of Directors of
the Company or the Compensation Committee of the Board of Directors, promptly
following the Effective Date of this Agreement, Company shall issue Consultant
an award of restricted stock units relating to 125,000 shares of common stock,
par value $0.001 per share, of the Company, pursuant to a Restricted Stock Unit
Award Agreement, substantially in the form of Exhibit 1 attached hereto (the
“Equity Award Agreement”) under the Company’s 2018 Stock Incentive Plan, as may
be amended, from time to time which restricted stock unit award shall vest over
twelve months following the Effective Date as provided in the Equity Award
Agreement and shall settle with respect to vested restricted stock units as
provided in the Equity Award Agreement.

6.Expenses.  Consultant shall be reimbursed for any reasonable expenses incurred
while performing Services on behalf of Company, including travel (i.e., airfare,
meals and lodging), provided such expenses are approved by Company in
advance.  All air travel on behalf of Company shall be coach class unless
otherwise mutually agreed by the parties.  As a condition to receipt of
reimbursement, Consultant shall be required to submit to Company reasonable
evidence that the amount involved was expended and related to Services provided
under this Consulting Agreement.

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7.Independent Contractor Status of Consultant.

(a)Consultant's legal status is an independent contractor of Company.  Nothing
in this Consulting Agreement makes Consultant the agent, partner, joint
venturer, employee or legal representative of Company for any purpose
whatsoever; nor shall Consultant hold himself out as such.  Consultant will have
no authority to bind Company in any manner or for any purpose.

(b)Consultant will not be an employee of Company for any purpose, including for
purposes of the Fair Labor Standards Act's minimum wage and overtime provisions,
nor any other provision of federal, state, or local law applicable to employees.
Further, except for the Health Benefits provided in the Separation Agreement,
Consultant understands and agrees that he will not be entitled to any employee
benefits that may be made available by the Company to its employees, including
but not limited to vacation pay, sick leave, retirement benefits, social
security, workers' compensation, health or disability benefits, and unemployment
insurance benefits.

(c)Consultant acknowledges that he has not relied on any statements or
representations by the Company or its attorneys with respect to the tax
treatment of any compensation due under this Consulting Agreement. Consultant
understands that the Company will not be responsible for withholding or paying
any federal or state income, social security or other taxes in connection with
any compensation paid under this Consulting Agreement, and Consultant agrees
that he is solely responsible for any such tax payments.

8.Representations. Consultant hereby represents and warrants to Company that
(a)  Consultant is free to enter into this Consulting Agreement with Company and
to perform the Services described herein; (b) the execution of this Consulting
Agreement and the performance of the Services by Consultant will not result in
the breach of any express or implied, oral or written, contract or agreement, to
which Consultant is bound (including, without limitation, any non-competition
agreement with a current or prior employer); and (c) the execution of this
Consulting Agreement and the performance of the Services will not at any time
interfere with or violate any third party rights (including, without limitation,
the use, disclosure, misappropriation, or infringement of any confidential
information, proprietary rights or intellectual property belonging to any other
person or entity).

9.Indemnification. Consultant shall indemnify and hold Company, its affiliates
and their respective directors, officers, agents and employees harmless from and
against all claims, demands, losses, damages and judgments, including court
costs and attorneys’ fees, arising out of or based upon (i) Consultant’s gross
negligence or willful misconduct; and (ii) any breach or alleged breach by
Consultant of any representation, warranty, certification, covenant, obligation
or other agreement set forth in this Consulting Agreement.

10.Ownership of Intellectual Property

(a)Consultant will immediately and fully disclose in writing to the Company all
intellectual property and other proprietary information, including without
limitation,  all inventions, methods, processes, innovations, discoveries,
developments, ideas, technologies, computer code and programs, macros, trade
secrets, know-how, formulae, designs, patterns, marks, names, improvements,
industrial designs, mask works, works of authorship, technical materials
relating to the business of the Company conceived or developed by
the  Consultant during  the Term  (collectively, “Intellectual Property”)
whether or not any such Intellectual Property is patentable, copyrightable, or
otherwise protectable. Notwithstanding the foregoing, this Consulting Agreement
shall not be construed to apply to, and shall not create any assignment of any
Intellectual Property of Consultant that Consultant developed entirely on his
own time without using the Company's equipment, facilities, confidential or
trade secret information, except for Intellectual Property that results from any
work performed by the Consultant for the Company.

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(b)Consultant does hereby, and will from time to time immediately upon the
conception or development of any Intellectual Properly in the course of
Consultant's engagement with the Company assign to the Company all of his right,
title and interest in and to all such Intellectual Property (whether or not
patentable, registrable, recordable or protectable by copyright and regardless
of whether the Company pursues any of the foregoing). If any Intellectual
Property falls within  the definition of “work made for hire,” as such term is
defined in 17 U.S.C. § 101, such Intellectual Property will be considered “work
made for hire,” and the copyright of such Intellectual Property will be owned
solely and exclusively by the Company. If any Intellectual Property does not
fall within such definition of “work made for hire”, then the right, title, and
interest in and to such Intellectual Property of Consultant will be assigned to
the Company pursuant to the first sentence of this Section 9(b).

(c)Consultant will execute and deliver any assignment instruments and do all
other things reasonably requested by the Company (both during and after
Consultant's engagement with the Company) in order to more fully vest in the
Company sole and exclusive right, title, and interest in and to all Intellectual
Property. Consultant agrees to cooperate with and provide reasonable assistance
to the Company in the preparation of applications for letters patent, copyright,
and other forms of protection for Intellectual Property, including but not
limited to the execution and delivery of any instruments reasonably requested by
the Company (both during and after Consultant's engagement with the Company), in
order to protect the Company’s interest in and to all Intellectual Property. If
the Company is unable for any reason to secure Consultant's signature on any
lawful and necessary document required to apply for or execute any patent,
trademark, copyright or other applications with respect to any Intellectual
Property (including renewals, extensions, continuations, divisions or
continuations in part thereof), Consultant hereby irrevocably designates and
appoints the Company and its then current Chief Executive Officer or General
Counsel as Consultant's agent and attorney-in-fact to act for and in behalf and
instead of Consultant, to execute and file any such application and to do all
other lawfully permitted acts to further the prosecution and issuance of
patents, trademarks, copyrights or other rights thereon with the same legal
force and effect as if executed by Consultant.

11.Confidential Information.

(a)Consultant acknowledges that during his engagement with Company he will have
access to certain highly-sensitive, confidential, and proprietary information
belonging  to the Company or third parties who may have furnished such
information under obligations of confidentiality, relating to and used in the
Company's business (collectively, “Confidential Information”). Consultant
acknowledges that, unless otherwise available to the public, Confidential
Information includes, but is not limited to, the following categories of
information and material, including all copies, notes, or other reproductions or
replicas thereof: financial statements and information; budgets, forecasts, and
projections; business and strategic plans; marketing, sales, and distribution
strategies; research and development projects; records relating to any
intellectual property developed by, owned by, controlled, licensed, or
maintained by the Company; information related to the
Company's  inventions,  research,  products, designs, methods, know-how,
formulae, techniques, systems, processes; customer lists; non-public information
relating to the Company's customers, suppliers, employees, distributors, or
investors; the specific terms of the Company's agreements or arrangements,
whether oral or written, with any customer, supplier, vendor, collaborator or
contractor with which the Company may be associated from time to time; and any
and all information relating to the operation of the Company's business which
the Company may from time to time designate as confidential or proprietary or
that Consultant reasonably knows should be, or has been, treated by the Company
as confidential or proprietary. Confidential Information encompasses all formats
in which information is preserved, whether electronic, print, or any other form,
including all originals, copies, notes, or other reproductions or replicas
thereof.

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(b)Consultant agrees that he will maintain the confidentiality of the
Confidential Information at all times during and for ten years following the
Term and will not, directly or indirectly, use or disclose any Confidential
Information for any purpose other than to the extent necessary to perform the
Services.

(c)Consultant's obligations under this Section 11 will not apply to any
information that (i) becomes generally known to the public without any breach of
this Consulting Agreement by  Consultant or of any similar agreement  by any
other employee or contractor of the Company, (ii)  is disclosed to Consultant by
a third party under no obligation of confidentiality to the Company and/or any
client of the Company, or (iii) the Consultant is required to disclose by law,
provided that Consultant first notifies Company of the existence and terms of
such requirement, gives Company a reasonable opportunity to seek a protective
order or similar relief to prevent or limit such disclosure, and only discloses
that information actually required to be  disclosed.

(d)The foregoing notwithstanding, pursuant to the federal Defend Trade Secrets
Act of 2016, Consultant shall not be held criminally or civilly liable under any
federal or state trade secret law for the disclosure of a trade secret that: (A)
is made in confidence to a federal, state or local government official, either
directly or indirectly, or to an attorney, and solely for the purpose of
reporting or investigating a suspected violation of law; or (B) is made in a
complaint or other document filed in a lawsuit or other proceeding, if such
filing is made under seal.  Nothing in this Consulting Agreement shall limit
Consultant’s right to report possible violations of law or regulation with any
federal, state or local government agency or to discuss the terms and conditions
of Consultant’s engagement by the Company to the extent that such disclosure is
protected under applicable provisions of law or regulation, including but not
limited to “whistleblower” statutes or other similar provisions that protect
such disclosure.

12.Return of Property. Upon termination of Consultant's engagement with the
Company for any reason, or at any time upon request of the Company, Consultant
will promptly deliver to the Company all Confidential Information in any form
along with all  personal property  belonging to the Company that is in
Consultant's possession, custody, or control, including, without limitation, all
files, memoranda, designs, correspondence, manuals, programs, data, records,
notes, notebooks, reports, papers, equipment, computer software, proposals, or
any other files, material, document or possession (whether in hard copy or any
electronic format), however obtained, along with any reproductions or  copies.

13.Remedies. Consultant acknowledges and agrees that the breach or threatened
breach of Sections 4, 10, 11 and/or 12 of this Consulting Agreement may result
in immediate and irreparable injury to Company, which injury may not be subject
to redress by monetary damages. Accordingly, Consultant agrees that Company is
entitled to enforce this Consulting Agreement by seeking a temporary restraining
order, preliminary and permanent injunction and/or any other appropriate
equitable relief. Nothing in this Section prohibits the Company from pursuing
any other remedies available to it in law or equity, including but not limited
to the recovery of monetary damages.

14.Assignment. Due to the personal nature of the Services to be rendered
hereunder, Consultant may not assign this Consulting Agreement.  The Company may
assign this Consulting Agreement without the consent of Consultant.  Subject to
the foregoing, this Consulting Agreement will inure to the benefit of and be
binding upon each of the heirs, assigns and successors of the respective
parties.

15.Governing Law; Venue. This Consulting Agreement will be governed by and
construed in accordance with the laws of the State of Indiana, without regard to
that body of law known as choice of law. Any litigation arising out of or
related to this Consulting Agreement will be brought exclusively in any state or
federal court in Indianapolis, Indiana. Each party (i) consents to the personal
jurisdiction of said courts, (ii) waives any venue or inconvenient forum defense
to any proceeding maintained in such courts, and (iii) agrees not to bring any
proceeding arising out of or relating to this Consulting Agreement in any other
court.

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16.Compliance with Laws

(a)Absence of Debarrment/Exclusion. Consultant has not been debarred, and to the
best of Consultant’s knowledge, is not under consideration to be debarred, by
the U.S. Food and Drug Administration or comparable foreign equivalent from
working in or providing services to any pharmaceutical or biotechnology company
under the Generic Drug Enforcement Act of 1992 or comparable foreign law or
regulation.  Consultant will immediately notify Company if it becomes aware of
any such action being taken or threatened to be taken against Consultant.

(b)Anti-Bribery and Corruption Covenant. Consultant shall not violate any
applicable anti-bribery and anti-corruption laws or regulations, including the
US Foreign Corrupt Practices Act, the UK Bribery Act 2010, the China
anti-bribery and corruptions laws or other local laws applicable to your
Services (collectively, the “Anti-Bribery Laws”). Consultant shall not make,
directly or indirectly, in connection with this Consulting Agreement or any
Services or in connection with any other business transaction related to
Company, a payment or gift of, or an offer, promise or authorization to give
money or anything of value to any (a) (i) director, officer, employee, agent or
representative (including anyone elected, nominated, or appointed to be a
director, officer, employee, agent or representative) of any Government Entity
(as defined below), or anyone otherwise acting in an official capacity on behalf
of a Government Entity; (ii) political party, political party official or
political party employee; (iii) candidate for public or political office; (iv)
any royal or ruling family member; or (v) agent or representative of any of
those persons listed in subcategories (i) through (iv) (collectively,
“Government Official”); (b) person or entity; or (c) other person or entity
while knowing or having reason to believe that some portion or all of the
payment or thing of value will be offered, given or promised, directly or
indirectly, to a Government Official or another person or entity; for the
purpose of: influencing any act or decision of such Government Official or such
person or entity in his/her or its official capacity, including a decision to do
or omit to do any act in violation of his/her or its lawful duties or proper
performance of functions; or inducing such Government Official or such person or
entity to use his/her or its influence or position with any Government Entity or
other person or entity to influence any act or decision; in order to obtain or
retain business for, direct business to, or secure an improper advantage for
Company. “Government Entity” means (i) any national, state, regional or local
government (including, in each case, any agency, department or subdivision of
such government), and any government agency or department; (ii) any political
party; (iii) any entity or business that is owned or controlled by any of those
bodies listed in subcategory (i) or (ii); or (iv) any international
organization, such as the United Nations or the World Bank.  Consultant shall
when requested by Company from time to time, provide a certification in form and
substance satisfactory to Company, signed by Consultant, certifying that
Consultant is in compliance with this Section 16(b). A violation of this Section
16(b) shall constitute a material breach of this Consulting Agreement by
Consultant.

(c)Insider Trading. Consultant acknowledges that the Company is an issuer with
securities registered pursuant to U.S. Securities Act of 1933, as amended and
that the disclosure of non-public information regarding the Company or any of
its subsidiaries by Consultant or trading in the securities of the Company while
in the possession of material nonpublic information is a material breach of the
terms of this Consulting Agreement and may subject the Company and/or Consultant
to liability.

17.Miscellaneous.

(a)The provisions of Sections 2, 4 and 6-17 will survive the termination of this
Consulting Agreement for any reason.

(b)Should any provision of this Consulting Agreement or the application thereof,
to any extent, be held invalid or unenforceable, the remainder of this
Consulting Agreement and the application thereof other than those provisions
held invalid or unenforceable, shall not be affected thereby and shall continue
valid and enforceable to the fullest extent permitted by law or equity.

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(c)No waiver by either party of any breach of this Consulting Agreement shall be
construed as a waiver of any succeeding breach of this Consulting Agreement.

(d)This Consulting Agreement may be executed in one or more counterparts, each
of which shall be deemed an original and all of which together shall constitute
one and the same agreement. Any facsimile, PDF reproduction of original
signatures or other electronic transmission of a signed counterpart shall be
deemed to be an original counterpart and any signature appearing thereon shall
be deemed to be an original signature.  

(e)This Consulting Agreement, together with the Separation Agreement and the
documents referenced therein,
represents  the  entire  and  integrated  agreement  between  the  parties and
supersedes all prior negotiations, representations or agreements, either written
or oral regarding  the  subject  matter thereof.

(f)This Consulting Agreement may be amended only by a written instrument signed
by both Company and Consultant.

[Signature Page Follows]

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IN WI'INESS WHEREOF, the parties hereto have executed this Consulting Agreement
to be effective as of the Effective Date.

 

CONSULTANT:

 

COMPANY:

 

 

 

 

 

 

 

 

ASSEMBLY BIOSCIENCES, INC.

 

 

 

 

 

 

/s/ Derek A. Small

 

By: /s/ William R. Ringo, Jr.

Derek A. Small

 

 

William R. Ringo, Jr.

 

 

 

Chairman of the Board

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Consulting Agreement]

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EXHIBIT 1

 

EQUITY AWARD AGREEMENT

 

 

 

(See Attached)

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ASSEMBLY BIOSCIENCES, INC.

2018 STOCK INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD NOTICE

 

 

Grant Number

 

 

Derek A. Small

[***]

 

 

On the first day following the effective date of your Consulting Agreement, in
your role as a consultant, you have been granted Restricted Stock Units (“RSUs”)
of Assembly Biosciences, Inc. (the “Company”), as follows:

 

Effective Date:

 

January 2, 20201 or if earlier, the date the Consulting Agreement becomes
effective.

 

 

 

Total Number of RSUs Granted:

 

125,000

 

 

 

Vesting Schedule:

 

1/12 of the RSUs shall vest on the last day of each month for 12 months; in each
case subject to your Continuous Services through each vesting date and otherwise
in accordance with the terms and conditions of the Plan (as defined below) and
the Restricted Stock Unit Agreement attached hereto. RSUs to vest on any vesting
date shall be rounded down to nearest whole number. Monthly installments shall
take into effect prior rounding so that each monthly installment including the
last installment is approximately the same. On [December 31, 2020,] assuming
Continuous Service, the RSUs shall be fully vested. Immediately prior to the
occurrence of a Corporate Transaction, all unvested RSUs shall immediately vest.
As of the date of your death or Disability, all unvested RSUs shall immediately
vest.

 

 

 

Payment Date:

 

TBD before executing- [Alternative 1: The Company shall deliver, to you one
Share (as defined in the Plan) in respect of each vested RSU. Delivery shall be
made as soon as practicable following each Vesting Date and in no event later
than 30 days following the applicable Vesting Date (the date of delivery, the
“Payment Date”).] [Alternative2 : Vested RSUs shall be settled as follows: XXXX
RSUs on the first to occur of a Corporate Transaction, your death and [Specify
date]; XXXX RSUs on the first to occur of a Corporate Transaction, your death
and [Specify Date]; and XXXX RSUs on the first to occur of a Corporate
Transaction, your death and [Specify Date] (each such settlement date, a
“Payment Date”).  For the avoidance of doubt, upon the occurrence of a Corporate
Transaction, all RSUs that have not been settled as of such date shall be
settled. The Company shall deliver, to you, one Share (as defined in the Plan)
in respect of each vested RSU. Delivery shall be made as soon as practicable
following the applicable Payment Date and in no event later than 30 days
following the applicable Payment Date.]

 

1 

First date following effective date of Consulting Agreement.

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By your signature or electronic acceptance of the RSUs and the signature of the
Company’s representative below, you and the Company agree that these RSUs are
granted under and governed by the terms and conditions of the Assembly
Biosciences, Inc. 2018 Stock Incentive Plan (the “Plan”) and the Restricted
Stock Unit Agreement, all of which are attached and made a part of this
document. Capitalized terms used in this Notice of Restricted Stock Unit Award
and not otherwise defined herein shall have the meaning assigned to such term in
the Plan.

 

Dated:  [First day following Effective date of Consulting Agreement]

 

GRANTEE:

 

ASSEMBLY BIOSCIENCES, INC.

 

 

 

 

 

By:

 

Derek A. Small

 

Name:

William R. Ringo, Jr.

 

 

Title:

Chairman of the Board

 

 

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ASSEMBLY BIOSCIENCES, INC.

RESTRICTED STOCK UNIT AWARD AGREEMENT

UNDER THE 2018 STOCK INCENTIVE PLAN

 

 

THIS RESTRICTED STOCK UNIT AWARD AGREEMENT (this “Award Agreement”) is made and
entered into by and between Assembly Biosciences, Inc. (the “Company”) and the
individual named in the Restricted Stock Unit Award Notice (the “Grantee”) under
the Company’s 2018 Stock Incentive Plan (the “Plan”).  The Award Notice also
establishes the Effective Date of the Award, the number of Restricted Stock
Units awarded, vesting conditions, and the Payment Date of the Award.

WHEREAS, the Grantee is expected to provide valuable services to the Company;

WHEREAS, the Company considers it desirable and in the best interests of the
Company that the Grantee be given an opportunity to acquire a proprietary
interest in the Company as an incentive to advance the interests of the Company
and to perform future services that will contribute materially to the successful
operation of the Company; and

WHEREAS, the Company, acting through the Board of Directors of the Company
(the “Board”) or (ii) the Committee appointed by the Board under the Plan (the
“Committee”), desires to grant the Grantee a Restricted Stock Unit Award
measured in shares of common stock of the Company (the “Common Stock”), in
accordance with the Plan.  Capitalized terms used herein which are not otherwise
defined herein shall have the meanings ascribed to them under the Plan.

NOW, THEREFORE, in consideration of the premises, it is agreed by and between
the parties as follows:

1.Grant of Restricted Stock Unit Award.  The Company awards the Grantee
Restricted Stock Units in a number that is specified in the Award Notice
provided to the Grantee.  The Award is subject to the vesting, payment and other
provisions of this Award Agreement, the Award Notice and the Plan. Each
Restricted Stock Unit represents one (1) Share of Common Stock of the Company.
The Company will account for the Restricted Stock Units in a bookkeeping account
on the Grantee’s behalf until they become payable or are forfeited. The number
of Restricted Stock Units shall be adjusted if the Common Stock is split,
combined, if stock dividends are paid on Common Stock, or upon a similar event
in the same manner that the Common Stock is adjusted.  

2.Dividend Equivalents.  For each Restricted Stock Unit that is granted and
credited to the Grantee’s account, the Grantee’s account will also be credited
with a Dividend Equivalent Rights in an amount equal to any cash dividends paid
by the Company upon one Share of Common Stock after the Effective Date and
before the Payment Date (as provided in the Award Notice) for the Restricted
Stock Unit, subject to the vesting and other provisions of this Award Agreement
and the Award Notice.

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3.Vesting.  The Restricted Stock Units (and Dividend Equivalent Rights
associated with the Restricted Stock Units) shall be unvested and shall be
subject to the restrictions set forth in this Award Agreement and the Award
Notice. Unless sooner forfeited in accordance with Section 5, the Restricted
Stock Units and Dividend Equivalent Rights associated with the Restricted Stock
Unit shall vest as set forth in the Grantee’s Award Notice.

4.Settlement of Vested Restricted Stock Units and Restricted Dividend
Equivalents.  If any of the Restricted Stock Units vest on a Vesting Date, the
Company shall settle such Restricted Stock Units (the “Vested Restricted Stock
Units”) and Dividend Equivalent Rights attributable to such Vested Restricted
Stock Units (“Vested Dividend Equivalents”) on the Payment Date established in
the Award Notice (the “Payment Date”) by delivering to the Grantee (a)  shares
of Common Stock of the Company and (b) cash, determined as follows:

 

(a)

Number of Shares of Common Stock.  The Company will determine the value as of
the Payment Date of the Vested Restricted Stock Units and the Vested Dividend
Equivalent Rights (together, the “Total Amount”).  For this purpose, the Vested
Dividend Equivalents shall be valued at their original value and shall not be
increased or decreased by an interest or earnings factor, and

 

(b)

Cash.  The remainder resulting from the division in (a) above to determine the
number of shares of Common Stock will be the dollar amount of the cash payable
to the Grantee, and such amount shall be paid to the Grantee by check.

The Vested Restricted Stock Units and Vested Dividend Equivalents will be
settled by the Company within thirty (30) days of the applicable Vesting Date.

5.Forfeiture of Restricted Stock Units (and Dividend Equivalent Rights
Attributable to Restricted Stock Units).  In the event of Termination of the
Grantee’s Continuous Service from the Company, any Restricted Stock Units and
Dividend Equivalent Rights attributable to such Restricted Stock Units that were
not already vested on the termination shall be forfeited on that date.

6.Certain Tax Matters.  The Grantee acknowledges that the Grantee understands
the federal, state and local income, employment and foreign (if applicable) tax
consequences of the Restricted Stock Unit Award, and the issuance, vesting and
forfeiture provisions relating to the Restricted Stock Unit Award.

7.Rights Prior to Vesting.  The Restricted Stock Units and Dividend Equivalent
Rights represent a right to payment from the Company if the conditions of this
Award Agreement are met and do not give the Grantee ownership of any Common
Stock prior to delivery as provided in Section 4.  No assets have been set aside
by the Company or otherwise to pay the amounts promised by this Award Agreement,
the right to payment is unsecured, and the Grantee is a general creditor of the
Company for payment under this Award Agreement.

8.Investment Representation.  The Grantee represents and warrants to the Company
that the Grantee has read this Award Agreement carefully, and to the extent
believed necessary, has discussed this Award Agreement and its impact and
limitations upon the Grantee with counsel.  

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9.Transferability.  The right to payment under this Award Agreement may not be
sold, exchanged, transferred, pledged, hypothecated, encumbered or otherwise
disposed of except as provided in the Plan.  The Company shall have the right to
assign to any of its affiliates any of its rights, or to delegate to any of its
affiliates any of its obligations under this Award Agreement.

10.Defined Terms.  The following terms shall have the meanings set forth below:

(a)“Corporate Transaction” has the meaning assigned to such term in the Plan.
Notwithstanding the foregoing, a Corporate Transaction shall not be deemed to
have occurred unless such transaction also constitutes a “change in the
ownership” of the Company or a “change in the ownership of a substantial portion
of the Company’s assets” for purposes of Section 409A of the Code.

11.Section 409A of the Code.

(a)This Award Agreement has been drafted with the intent that payments (and the
right to payments) under it are exempt from or comply with the requirements of
Section 409A of the Internal Revenue Code of 1986, as amended (“Code”), and the
regulations thereunder applicable to nonqualified deferred compensation.  This
Award Agreement shall be interpreted in a manner consistent with such intent.

(b)The parties agree that this Award Agreement may be amended, as reasonably
requested by either party, and as may be necessary to fully comply with Section
409A of the Code and all related rules and regulations in order to preserve the
payments and benefits provided hereunder without additional cost to either
party.

(c)The Company makes no representation or warranty and shall have no liability
to the Grantee or any other person if any provisions of this Award Agreement or
the Award Notice are determined to constitute deferred compensation subject to
Section 409A of the Code but do not satisfy an exemption from, or the conditions
of, such Section.

12.Binding Effect.  This Award Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, executors,
administrators, successors and assigns.  

13.Gender and Number.  All terms used in this Award Agreement shall be deemed to
refer to the masculine, feminine, neuter, singular or plural as the context may
require.

14.Terms and Conditions of Plan.  The terms and conditions included in the Plan
and the Award Notice are incorporated by reference herein, and to the extent
that any conflict may exist between any term or provision of this Award
Agreement and any term or provision of the Plan as in effect from time to time,
such term or provision of the Plan shall control.

15.Certain Remedies.  Without intending to limit the remedies available to the
Company, the Grantee agrees that damages at law will be an insufficient remedy
in the event the Grantee violates the terms of this Award Agreement.  The
Grantee agrees that the Company may apply for and have injunctive or other
equitable relief in any court of competent jurisdiction to restrain the breach
or threatened breach of, or otherwise specifically to enforce, any of the
provisions hereof.  

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16.Waiver.  The waiver by either party of compliance with any provision of this
Award Agreement by the other party shall not operate or be construed as a waiver
of any other provision of this Award Agreement, or of any subsequent breach by
such party of a provision of this Award Agreement.  

17.No Restriction on Right of Company to Effect Corporate Changes. Neither the
Plan nor this Award Agreement shall affect in any way the right or power of the
Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the capital structure or
business of the Company, or any merger or consolidation of the Company, or any
issue of stock or of options, warrants or rights to purchase stock or of bonds,
debentures, preferred or prior preference stocks whose rights are superior to or
affect the Common Stock or the rights thereof or which are convertible into or
exchangeable for Common Stock, or the dissolution or liquidation of the Company,
or any sale or transfer of all or any part of the assets or business of the
Company, or any other corporate act or proceeding, whether of a similar
character or otherwise.  

16.Entire Agreement.  This Award Agreement (including the Award Notice, and the
Plan which are incorporated herein by reference and all additional riders
incorporated herein) sets forth all of the promises, agreements, conditions and
understandings between the parties hereto with respect to the Award, and there
are no promises, agreements, conditions, understandings, warranties or
representations, oral or written, express or implied, between them with respect
to the Restricted Stock Unit Award other than as set forth therein or herein.
This Award Agreement supersedes and replaces any and all prior agreements
between the parties hereto with respect to Restricted Stock Units and Dividend
Equivalent Rights. This Award Agreement is, and is intended by the parties to
be, an integration of any and all prior agreements or understandings, oral or
written, with respect to Restricted Stock Units and Dividend Equivalent
Rights.  No modification, amendment or waiver of any of the provisions of this
Award Agreement shall be effective unless approved in writing by both parties.

17.Invalid or Unenforceable Provision.  The invalidity or unenforceability of
any particular provision of this Award Agreement shall not affect the other
provisions hereof, and this Award Agreement shall be construed in all respects
as if such invalid or unenforceable provision was omitted.  

18.Governing Law.  This Award Agreement shall be construed and enforced in
accordance with the laws of Delaware, without giving effect to principles of
conflicts of laws.  

19.Miscellaneous.

(a)Neither the granting or vesting of the Restricted Stock Units and Dividend
Equivalent Rights nor any other provision of this Award Agreement shall be
construed as conferring upon the Grantee any right to continue in the service of
the Company, or as interfering with or restricting in any way the right of the
Company to terminate such service at any time.  

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(b)The Company, the Board (or the Committee) and any employees or agents thereof
are relieved from any liability for the non-issuance or non-transfer, or any
delay in the issuance or transfer, of any Common Stock which results from the
inability of the Company to obtain, or in any delay in obtaining, from each
regulatory body having jurisdiction all requisite authority to issue or transfer
the Common Stock in satisfaction of this Award Agreement if counsel for the
Company deems such authorization necessary for the lawful issuance or transfer
of any of the Common Stock.  

(c)No Common Stock shall be sold or otherwise disposed of in violation of any
federal or state securities law or regulations.  

(d)All decisions of the Board (or the Committee) with respect to the
interpretation, construction and application of the Plan and/or this Award
Agreement shall be conclusive and binding upon the Grantee and all other
persons.

 

 

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