Exhibit 10.1

 

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STOCK OPTION GRANT AGREEMENT

UNDER THE

2005 OMNIBUS INCENTIVE PLAN

 

Optionee:     Social Security Number:     Form of Option (ISO or NQSO)    

Total Number of Optioned

Shares in this Grant:

    Date of Grant:     Exercise Price Per Share:     First Exercisable Date:    
Expiration Date:    

 

THIS OPTION AGREEMENT is made and is effective as of the above Date of Grant
between NPS Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and
the above-named Optionee, an employee of the Company, or of one or more of its
subsidiaries or other eligible person under the 2005 Omnibus Incentive Plan (the
“Plan”). The Company desires, by affording the Optionee an opportunity to
purchase the number of shares of its common stock, par value $.001 per share
(the “Common Stock”) shown above and as hereinafter provided (the “Optioned
Shares”), to carry out the purposes of the Plan.

 

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth,
the parties hereto have agreed, and do hereby agree to the terms and conditions
of this Option as set out in paragraphs 1 through 12 hereof.

 

IN WITNESS WHEREFORE, the Company has signed this Stock Option Grant effective
as of the Date of Grant shown above.

 

NPS PHARMACEUTICALS, INC.   OPTIONEE: By:  

 

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TERMS AND CONDITIONS

 

1. Grant of Option. The Company hereby irrevocably grants to the Optionee the
right and option (the “Option”) to purchase the above number of Optioned Shares
of the Company’s Common Stock in the manner and subject to the conditions
provided herein and in the Plan.

 

2. Purchase Price and Payment.

 

  2.1 The purchase price (the “Exercise Price”) shall be the amount per share of
the Optioned Shares shown above, which is the Fair Market Value of the Common
Stock on the Date of Grant as determined under the Plan. To the extent that the
Optionee being granted this Option owns stock possessing more than ten percent
of the total combined voting power of all classes of stock of the Company or its
subsidiary corporations, then the Exercise Price has been established by the
Company to be equal to at least one hundred ten percent of said Fair Market
Value.

 

  2.2 The Exercise Price per share of the Optioned Shares shall be payable to
the Company in full either: (a) in cash or its equivalent; (b) by tendering
(either by actual delivery or attestation) previously acquired Shares having an
aggregate Fair Market Value at the time of exercise equal to the Exercise Price
(provided that except as otherwise determined by the Board, the Shares that are
tendered must have been held by the Optionee for at least six (6) months (or
such other period, if any, as the Board may permit) prior to their tender to
satisfy the Exercise Price if acquired under the Plan or any other compensation
plan maintained by the Company or have been purchased on the open market); (c)
pursuant to a broker-assisted exercise same-day sales program; (d) by a
combination of (a) (b), and (c); or (e) any other method approved or accepted by
the Board in its sole discretion.

 

  2.3 Notwithstanding the foregoing, this Option may be exercised pursuant to a
program developed under Regulation T as promulgated by the Federal Reserve
Board, which results in the receipt of cash (or check) by the Company prior to
the issuance of any of the Optioned Shares.

 

3. Vesting and Term of Option. The Optioned Shares shall be exercisable during
the term of this Option Agreement but only on the terms hereof and pursuant to
the following exercise schedule:

 

Twenty-eight percent of the Optioned Shares shall vest at 5:00 p.m., Mountain
Standard Time (“MST”), on the first anniversary of the Date of Grant and two
percent of the remaining Optioned Shares shall vest at 5:00 p.m. MST, on each
monthly anniversary date thereafter, provided that the Optionee was, during the
entire period prior to such vesting date, continuously employed as an employee
of the Company or otherwise affiliated in a position qualifying for continued
vesting under the Plan. With respect to Canadian employees, Optionee’s status as
an employee shall terminate upon delivery of a notice of termination by the
Company.

 

The term of the Option is from the Date of Grant through the Expiration Date
shown above. Except to the extent that a different Expiration Date is shown
above, any portion of the Optioned Shares, which become exercisable shall remain
in effect and be exercisable thereafter during the term of the Option. The
Option shall not be exercisable after the Expiration Date. Not less than one
hundred shares of the Optioned Shares may be purchased at any time unless the
number purchased is the total number at the time purchasable under the Option.
Notwithstanding the above, as to any Option granted to a person owning more than
ten percent of the Company’s voting stock on the Date of Grant, such Option
shall expire five years from the Date of Grant and said date shall be the
Expiration Date.

 

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4. Termination of Employment or Relationship as a Director or Consultant.

 

  4.1 In the event an Optionee’s continual status as an employee, director, or
consultant (other than upon the Optionee’s death or disability) terminates prior
to the Expiration Date, then this Option shall expire ninety days after the date
of such termination, unless:

 

  4.1.1 such termination of employment or affiliation is due to Optionee’s
permanent or total disability (within the meaning of Section 422(c)(6) of the
Code), in which event the Option shall expire on the earlier of the Expiration
Date set forth above, or twelve months following such termination of employment
or affiliation;

 

  4.1.2 such termination of employment or affiliation is due to Optionee’s
death, in which event the Option shall expire on the earlier of the Expiration
Date set forth above or eighteen months after Optionee’s death;

 

  4.1.3 such termination of employment or affiliation is due to Optionee’s
Retirement (as defined in the Plan), in which event the Option shall expire on
the Expiration Date; or

 

  4.1.4 exercise of the Option within ninety days after termination of
employment or affiliation with the Company would result in liability of the
Optionee under Section 16(b) of the Securities Exchange Act of 1934 (arising,
for example, from a non-exempt purchase), in which case the Option will expire
on the earlier of (a) the Expiration Date set forth above, (b) the tenth day
after the last day upon which exercise would result in such liability, or (c)
six months and ten days after the termination of Optionee’s employment or
affiliation.

 

  4.2 This Option may be exercised following termination of employment or
affiliation only as to that number of Optioned Shares as to which it was
exercisable on the date of termination of employment or affiliation under the
provisions of this Option Agreement. Notwithstanding the foregoing, if such
termination of employment or affiliation is due to the Optionee’s Retirement,
the Option may be exercised to that number of Optioned Shares that would have
been exercisable had the Optionee remained an Employee, Director or Third Party
Service Provider for an additional two years from the date of Retirement.

 

  4.3 With respect to Canadian employees, for purposes of determining the date
of termination for purposes hereunder, other then under paragraphs 4.1.1, 4.1.2,
4.1.3, and 4.1.4, the date of termination shall be the date notice of
termination is delivered to an employee and shall not include any reasonable
notice of determination period required by law.

 

5. Transferability.

 

  5.1 Incentive Stock Option (“ISO”). In the case of an ISO, this Option is not
transferable, except by will or by the laws of descent and distribution, and is
exercisable during Optionee’s life, only by the Optionee. In the event an
Optionee transfers such Option, such transfer shall constitute a disqualifying
event and the Option shall no longer qualify as an ISO but shall be considered a
Non-Qualified Stock Option under the terms of this Plan.

 

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  5.2 Non-Qualified Stock Option (“NQSO”). In the case of a NQSO, this Option is
not transferable (and shall be exercisable during the lifetime Optionee only by
such Optionee) except as follows:

 

  5.2.1 By will or by the laws of descent and distribution; and

 

  5.2.2 Transfers to the spouse, children, or grandchildren of the Optionee
(“Immediate Family Members”), a trust or trusts for the exclusive benefit of
such Immediate Family Members, or a partnership in which such Immediate Family
Members are the only partners, provided that (a) there may be no consideration
for any such transfer, (b) subsequent transfers of transferred options shall be
prohibited except those occurring by will or the laws of descent and
distribution, and (c) the Option shall continue to be subject to all the terms
and conditions that applied prior to transfer. The Options shall be exercisable
by the transferee only to the extent and for the periods specified in this
Option Agreement or the Plan. The Company expressly disclaims any obligation to
provide notice to a transferee of the expiration of the Option.

 

  5.3 Non-Qualifying Transfer. In the event of the transfer of the Optioned
Shares obtained by exercise of an ISO in such manner as to disqualify the
Optioned Shares for ISO treatment, the provisions of this Grant and the Plan
applicable to NQSOs shall be deemed to apply to the Optioned Shares as if the
Grant had been an NQSO.

 

6. No Employment Relationship. This Option is not an employment contract and
nothing in this Option Agreement shall be deemed to create in any way whatsoever
any obligation on Optionee’s part to continue in the employ of the Company or as
an affiliate of the Company, or of the Company to continue Optionee’s employment
or affiliation with the Company. In the event that this Option is granted in
connection with the performance of services as a consultant or director,
references to employment, employee, and similar terms shall be deemed to include
the performance of services as a consultant or a director, as the case may be,
provided however, that no rights as an employee shall arise by reason of the use
of such terms.

 

7. Rights of Stockholder. No rights as a stockholder are created or conferred
hereby until the date the Optionee becomes a record holder of the Optioned
Shares by a valid exercise of this Option.

 

8. Restriction on Transfer. A purchaser of shares of Common Stock who purchases
such Optioned Shares by exercise of this Option may not dispose of such Optioned
Shares within two years from the Date of Grant or within one year after the date
of exercise without losing the purchaser’s right to treat such Optioned Shares
as an ISO. Other contractual or legal restrictions may also apply to ISOs.

 

9. Method of Exercising Option.

 

  9.1 Subject to the terms and conditions of this Option Agreement, the Option
may be exercised by written notice (in a form designated by the Company) to the
Company at its principal office. Such notice shall state the election to
exercise the Option and the number of Optioned Shares in respect of which it is
being exercised, and shall be signed by the person or persons so exercising the
Option. If the option being exercised was granted partially as ISOs as to
certain shares and as NQSOs as to the balance of the shares, the Company will
assume that the shares being exercised are pro-rata ISO and NQSO unless
specifically otherwise directed or elected by the Optionee. Such notice shall
either:

 

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  9.1.1 be accompanied by payment of the full Exercise Price of such Optioned
Shares, in which event the Company shall deliver a certificate promptly after
the notice shall be received; or

 

  9.1.2 fix a date (not less than five nor more than ten business days from the
date such notice is received by the Company unless a longer date or different
arrangement has been established under paragraph 2 hereof) for the payment of
the full Exercise Price of such Optioned Shares, against delivery of a
certificate or certificates representing such Optioned Shares.

 

  9.2 By exercising this Option, Optionee agrees that the Company may require
Optionee to enter into an arrangement providing for the cash payment by Optionee
to the Company of any tax withholding obligations of the Company arising by
reason of: (a) the exercise of this Option; (b) the lapse of any substantial
risk of forfeiture to which the Optioned Shares are subject at the time of
exercise; or (c) the disposition of Optioned Shares acquired upon such exercise.

 

  9.3 Notwithstanding the provisions of Section 9.1 and 9.2, the Company may
designate a third party and/or captive broker (the “Agent”) to administer the
grant, exercise and sale of the Option and/or Optioned Shares. In such event,
the Company may require the Optionee to follow the procedures of the Agent for
exercising the Option.

 

10. The Plan. The terms of the Plan are incorporated herein and made a part
hereof. In the event of inconsistency between the terms of the Plan (as in
effect on the Date of Grant) and the terms hereof, the terms of the Plan shall
control. The Plan contains many terms, which may affect this Option Agreement,
which are not repeated herein. Capitalized terms, which are not defined herein
shall have the same meaning as such terms in the Plan.

 

11. Severability. It is the intent of all parties to this Option Agreement that
ISOs granted under the terms of this Option Agreement shall qualify for
treatment as ISOs under Section 422 of the Internal Revenue Code of 1954, as
amended. To that end, should any provisions of this Option Agreement be
determined to invalidate such ISO treatment or characterization, such provisions
shall be severable from, and shall not affect the remaining provisions of this
Option Agreement.

 

12. Plan Acknowledgment. Optionee acknowledges receipt of a copy of the Plan,
and represents that he or she is familiar with the terms and provisions thereof,
and hereby accepts this Option subject to all the terms and provisions thereof.
Optionee hereby agrees to accept as binding and final all decisions of
interpretation of the Board of Directors upon any questions arising under the
Plan.

 

Attachment: 2005 Omnibus Plan

 

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