Exhibit 10.4

 

KINIKSA PHARMACEUTICALS, LTD.
2018 INCENTIVE AWARD PLAN

 

RESTRICTED SHARE UNIT GRANT NOTICE

 

Capitalized terms not specifically defined in this Restricted Share Unit Grant
Notice (the “Grant Notice”) have the meanings given to them in the 2018
Incentive Award Plan (as amended from time to time, the “Plan”) of Kiniksa
Pharmaceuticals, Ltd. (the “Company”).

 

The Company has granted to the participant listed below (“Participant”) the
Restricted Share Units described in this Grant Notice (the “RSUs”), subject to
the terms and conditions of the Plan and the Restricted Share Unit Agreement
attached as Exhibit A (the “Agreement”), both of which are incorporated into
this Grant Notice by reference.

 

Participant:

 

 

 

 

 

Grant Date:

 

 

 

 

 

Number of RSUs:

 

 

 

 

 

Vesting Commencement Date:

 

 

 

 

 

Vesting Schedule:

 

[To be specified in individual award agreements]

 

By Participant’s signature below, Participant agrees to be bound by the terms of
this Grant Notice, the Plan and the Agreement.  Participant has reviewed the
Plan, this Grant Notice and the Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Grant Notice
and fully understands all provisions of the Plan, this Grant Notice and the
Agreement.  Participant hereby agrees to accept as binding, conclusive and final
all decisions or interpretations of the Administrator upon any questions arising
under the Plan, this Grant Notice or the Agreement.

 

KINIKSA PHARMACEUTICALS, LTD.

 

PARTICIPANT

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

Name:

 

 

[Participant Name]

 

 

 

 

Title:

 

 

 

 

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Exhibit A

 

RESTRICTED SHARE UNIT AGREEMENT

 

Capitalized terms not specifically defined in this Agreement have the meanings
specified in the Grant Notice or, if not defined in the Grant Notice, in the
Plan.

 

ARTICLE I.
GENERAL

 

1.1                               Award of RSUs and Dividend Equivalents.

 

(a)                                 The Company has granted the RSUs to
Participant effective as of the grant date set forth in the Grant Notice (the
“Grant Date”).  Each RSU represents the right to receive one Share or, at the
option of the Company, an amount of cash, in either case, as set forth in this
Agreement.  Participant will have no right to the distribution of any Shares or
payment of any cash until the time (if ever) the RSUs have vested.

 

(b)                                 The Company hereby grants to Participant,
with respect to each RSU, a Dividend Equivalent for ordinary cash dividends paid
to substantially all holders of outstanding Shares with a record date after the
Grant Date and prior to the date the applicable RSU is settled, forfeited or
otherwise expires.  Each Dividend Equivalent entitles Participant to receive the
equivalent value of any such ordinary cash dividends paid on a single Share. 
The Company will establish a separate Dividend Equivalent bookkeeping account (a
“Dividend Equivalent Account”) for each Dividend Equivalent and credit the
Dividend Equivalent Account (without interest) on the applicable dividend
payment date with the amount of any such cash paid.

 

1.2                               Incorporation of Terms of Plan.  The RSUs are
subject to the terms and conditions set forth in this Agreement and the Plan,
which is incorporated herein by reference.  In the event of any inconsistency
between the Plan and this Agreement, the terms of the Plan will control.

 

1.3                               Unsecured Promise.  The RSUs and Dividend
Equivalents will at all times prior to settlement represent an unsecured Company
obligation payable only from the Company’s general assets.

 

ARTICLE II.
VESTING; FORFEITURE AND SETTLEMENT

 

2.1                               Vesting; Forfeiture.  The RSUs will vest
according to the vesting schedule in the Grant Notice except that any fraction
of an RSU that would otherwise be vested will be accumulated and will vest only
when a whole RSU has accumulated.  In the event of Participant’s Termination of
Service for any reason, all unvested RSUs will immediately and automatically be
cancelled and forfeited, except as otherwise determined by the Administrator or
provided in a binding written agreement between Participant and the Company. 
Dividend Equivalents (including any Dividend Equivalent Account balance) will
vest or be forfeited, as applicable, upon the vesting or forfeiture of the RSU
with respect to which the Dividend Equivalent (including the Dividend Equivalent
Account) relates.

 

2.2                               Settlement.

 

(a)                                 RSUs and Dividend Equivalents (including any
Dividend Equivalent Account balance) will be paid in Shares or cash at the
Company’s option as soon as administratively practicable after the vesting of
the applicable RSU, but in no event more than sixty (60) days after the RSU’s
vesting date.  Notwithstanding the foregoing, the Company may delay any payment
under this Agreement that the Company reasonably determines would violate
Applicable Law until the earliest date the Company

 

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reasonably determines the making of the payment will not cause such a violation
(in accordance with Treasury Regulation Section 1.409A-2(b)(7)(ii)), provided
the Company reasonably believes the delay will not result in the imposition of
excise taxes under Section 409A.

 

(b)                                 If an RSU is paid in cash, the amount of
cash paid with respect to the RSU will equal the Fair Market Value of a Share on
the day immediately preceding the payment date.  If a Dividend Equivalent is
paid in Shares, the number of Shares paid with respect to the Dividend
Equivalent will equal the quotient, rounded down to the nearest whole Share, of
the Dividend Equivalent Account balance divided by the Fair Market Value of a
Share on the day immediately preceding the payment date.

 

ARTICLE III.
TAXATION AND TAX WITHHOLDING

 

3.1                               Representation.  Participant represents to the
Company that Participant has reviewed with Participant’s own tax advisors the
tax consequences of this Award and the transactions contemplated by the Grant
Notice and this Agreement.  Participant is relying solely on such advisors and
not on any statements or representations of the Company or any of its agents.

 

3.2                               Tax Withholding.

 

(a)                                 The Company has the right and option, but
not the obligation, to treat Participant’s failure to provide timely payment in
accordance with the Plan of any withholding tax arising in connection with the
RSUs or Dividend Equivalents as Participant’s election to satisfy all or any
portion of the withholding tax by requesting the Company repurchase Shares
otherwise issuable under the Award limited to the number of Shares which have a
Fair Market Value on the date of repurchase necessary to pay the aggregate
amount of tax liability.

 

(b)                                 Participant acknowledges that Participant is
ultimately liable and responsible for all taxes owed in connection with the RSUs
and the Dividend Equivalents, regardless of any action the Company or any
Subsidiary takes with respect to any tax withholding obligations that arise in
connection with the RSUs or Dividend Equivalents.  Neither the Company nor any
Subsidiary makes any representation or undertaking regarding the treatment of
any tax withholding in connection with the awarding, vesting or payment of the
RSUs or the Dividend Equivalents or the subsequent sale of Shares.  The Company
and the Subsidiaries do not commit and are under no obligation to structure the
RSUs or Dividend Equivalents to reduce or eliminate Participant’s tax liability.

 

ARTICLE IV.
OTHER PROVISIONS

 

4.1                               Adjustments.  Participant acknowledges that
the RSUs, the Shares subject to the RSUs and the Dividend Equivalents are
subject to adjustment, modification and termination in certain events as
provided in this Agreement and the Plan.

 

4.2                               Notices.  Any notice to be given under the
terms of this Agreement to the Company must be in writing and addressed to the
Company in care of the Company’s Secretary at the Company’s principal office or
the Secretary’s then-current email address or facsimile number.  Any notice to
be given under the terms of this Agreement to Participant must be in writing and
addressed to Participant at Participant’s last known mailing address, email
address or facsimile number in the Company’s personnel files.  By a notice given
pursuant to this Section, either party may designate a different address for
notices to be given to that party.  Any notice will be deemed duly given when
actually received, when sent by email, when sent by certified mail (return
receipt requested) and deposited with postage prepaid in a post

 

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office or branch post office regularly maintained by the United States Postal
Service, when delivered by a nationally recognized express shipping company or
upon receipt of a facsimile transmission confirmation.

 

4.3                               Titles.  Titles are provided herein for
convenience only and are not to serve as a basis for interpretation or
construction of this Agreement.

 

4.4                               Conformity to Securities Laws.  Participant
acknowledges that the Plan, the Grant Notice and this Agreement are intended to
conform to the extent necessary with all Applicable Laws and, to the extent
Applicable Laws permit, will be deemed amended as necessary to conform to
Applicable Laws.

 

4.5                               Successors and Assigns.  The Company may
assign any of its rights under this Agreement to single or multiple assignees,
and this Agreement will inure to the benefit of the successors and assigns of
the Company.  Subject to the restrictions on transfer set forth in the Plan,
this Agreement will be binding upon and inure to the benefit of the heirs,
legatees, legal representatives, successors and assigns of the parties hereto.

 

4.6                               Limitations Applicable to Section 16 Persons. 
Notwithstanding any other provision of the Plan or this Agreement, if
Participant is subject to Section 16 of the Exchange Act, the Plan, the Grant
Notice, this Agreement, the RSUs and the Dividend Equivalents will be subject to
any additional limitations set forth in any applicable exemptive rule under
Section 16 of the Exchange Act (including any amendment to Rule 16b-3) that are
requirements for the application of such exemptive rule.  To the extent
Applicable Laws permit, this Agreement will be deemed amended as necessary to
conform to such applicable exemptive rule.

 

4.7                               Entire Agreement.  The Plan, the Grant Notice
and this Agreement (including any exhibit hereto) constitute the entire
agreement of the parties and supersede in their entirety all prior undertakings
and agreements of the Company and Participant with respect to the subject matter
hereof.

 

4.8                               Agreement Severable.  In the event that any
provision of the Grant Notice or this Agreement is held illegal or invalid, the
provision will be severable from, and the illegality or invalidity of the
provision will not be construed to have any effect on, the remaining provisions
of the Grant Notice or this Agreement.

 

4.9                               Limitation on Participant’s Rights. 
Participation in the Plan confers no rights or interests other than as herein
provided.  This Agreement creates only a contractual obligation on the part of
the Company as to amounts payable and may not be construed as creating a trust. 
Neither the Plan nor any underlying program, in and of itself, has any assets. 
Participant will have only the rights of a general unsecured creditor of the
Company with respect to amounts credited and benefits payable, if any, with
respect to the RSUs and Dividend Equivalents, and rights no greater than the
right to receive cash or the Shares as a general unsecured creditor with respect
to the RSUs and Dividend Equivalents, as and when settled pursuant to the terms
of this Agreement.

 

4.10                        Not a Contract of Employment.  Nothing in the Plan,
the Grant Notice or this Agreement confers upon Participant any right to
continue in the employ or service of the Company or any Subsidiary or interferes
with or restricts in any way the rights of the Company and its Subsidiaries,
which rights are hereby expressly reserved, to discharge or terminate the
services of Participant at any time for any reason whatsoever, with or without
Cause, except to the extent expressly provided otherwise in a written agreement
between the Company or a Subsidiary and Participant.

 

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4.11                        Counterparts.  The Grant Notice may be executed in
one or more counterparts, including by way of any electronic signature, subject
to Applicable Law, each of which will be deemed an original and all of which
together will constitute one instrument.

 

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