Exhibit 10.7b

 

NOTICE OF STOCK OPTION GRANT
(UNITED STATES, CANADA, UNITED KINGDOM)

ACHIEVE LIFE SCIENCES, INC.
2017 EQUITY INCENTIVE PLAN
GRANT NUMBER:  

Unless otherwise defined herein, the terms defined in the Achieve Life Sciences,
Inc. (the “Company”), 2017 Equity Incentive Plan (the “Plan”) shall have the
same meanings in this Notice of Stock Option Grant (the “Notice of Grant”) and
the attached Stock Option Agreement, including any special terms and conditions
for your country set forth in the appendix attached thereto (collectively, the
“Option Agreement”). You have been granted an Option to purchase shares of
Common Stock of the Company under the Plan subject to the terms and conditions
of the Plan, this Notice of Grant and the Option Agreement.

 

Name:

 

Address:

 

Number of Shares:

 

Exercise Price Per Share:

 

Date of Grant:

 

Vesting Commencement Date:

 

Type of Option:

____ Non-Qualified Stock Option
____ Incentive Stock Option

 

Expiration Date:

_____________; this Option expires earlier if your Service terminates earlier,
as described in the Option Agreement.

 

Vesting Schedule:  

[Sample vesting language:] [This Option becomes exercisable with respect to the
first 25% of the Shares subject to this Option when you complete 12 months of
Service from the Vesting Commencement Date.  Thereafter, this Option becomes
exercisable with respect to an additional 1/48th of the Shares subject to this
Option when you complete each month of Service.] [Note:  actual vesting language
to match vesting schedule approved by the Board or Committee]

 

Additional Terms:

If your address set forth above is an address located outside the United States,
the additional terms and conditions set forth on an Appendix attached hereto (as
executed by the Company) are applicable and are incorporated herein by
reference.  (No Appendix need be attached if your address set forth above is an
address located within the United States.)

 

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(Signature page follows.)

 

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You understand that your employment or consulting relationship with the Company
or a Parent, Subsidiary or Affiliate is for an unspecified duration, can be
terminated at any time, and that nothing in this Notice of Grant, the Option
Agreement or the Plan changes the nature of that relationship.  By accepting
this Option, you and the Company agree that this Option is granted under and
governed by the terms and conditions of the Plan, this Notice of Grant and the
Option Agreement.  By accepting this Option, you consent to the electronic
delivery and acceptance as further set forth in the Option Agreement.

 

PARTICIPANT

 

By:
Name:

ACHIEVE LIFE SCIENCES, INC.

 

By:
Name:
Title:

 

 

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STOCK OPTION AGREEMENT
ACHIEVE LIFE SCIENCES, INC.
2017 EQUITY INCENTIVE PLAN

 

You have been granted an Option by Achieve Life Sciences, Inc. (the “Company”),
under the 2017 Equity Incentive Plan (the “Plan”) to purchase Shares (the
“Option”), subject to the terms, restrictions and conditions of the Plan, the
Notice of Stock Option Grant (the “Notice of Grant”) and this Stock Option
Agreement, including any special terms and conditions for your country set forth
in the appendix attached hereto (the “Appendix”) (collectively, the
“Agreement”).

1.Grant of Option.  You have been granted the Option for the number of Shares
set forth in the Notice of Grant at the Exercise Price per Share set forth in
the Notice of Grant.  In the event of a conflict between the terms and
conditions of the Plan and the terms and conditions of this Agreement, the terms
and conditions of the Plan shall prevail.

If designated in the Notice of Grant as an Incentive Stock Option (“ISO”), this
Option is intended to qualify as an Incentive Stock Option under Section 422 of
the Code.  However, if this Option is intended to be an ISO, to the extent that
it exceeds the $100,000 limit under Code Section 422(d), it shall be treated as
a Nonqualified Stock Option (“NSO”).

2.Termination.

(a)General Rule.  If your Service terminates for any reason except death or
Disability, and other than for Cause, then this Option will expire at the close
of business at Company headquarters on the date three months after your
termination of Service (subject to the expiration detailed in Section 6).  If
your Service is terminated for Cause, this Option will expire upon the date of
such termination.

You acknowledge and agree that the vesting schedule set forth in the Notice of
Grant may change prospectively in the event that your service status changes
between full and part-time status in accordance with Company policies relating
to work schedules and vesting of awards.  You acknowledge that the vesting of
the Shares pursuant to this Agreement is earned only by continuing Service.

(b)Death; Disability.  If you die before your Service terminates (or you die
within three months of your termination of Service other than for Cause), then
this Option will expire at the close of business at Company headquarters on the
date 12 months after the date of death (subject to the expiration detailed in
Section 6).  If your Service terminates because of your Disability, then this
Option will expire at the close of business at Company headquarters on the date
12 months after your termination date (subject to the expiration detailed in
Section 6).

(c)Termination Date.  For purposes of this Option, your Service will be
considered terminated as of the date you are no longer actively providing
services to the Company or a Parent, Subsidiary or Affiliate (regardless of the
reason for such termination and whether or not later found to be invalid or in
breach of labor laws in the jurisdiction where you are employed or engaged or
the terms of your employment or consulting agreement, if any), and your period
of

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Service will not include any contractual notice period or any period of “garden
leave” or similar period mandated under labor laws in the jurisdiction where you
are employed or engaged or the terms of your employment or consulting agreement,
if any.  The Committee shall have the exclusive discretion to determine when you
are no longer actively providing services for purposes of this Option (including
whether you may still be considered to be providing services while on a leave of
absence).

(d)No Notice.  You are responsible for keeping track of these exercise periods
following your termination of Service for any reason.  The Company will not
provide further notice of such periods.  In no event shall this Option be
exercised later than the Expiration Date set forth in the Notice of Grant.

3.Exercise of Option.

(a)Right to Exercise.  This Option is exercisable during its term in accordance
with the vesting schedule set forth in the Notice of Grant and the applicable
provisions of the Plan and this Agreement.  In the event of your death,
Disability, or other cessation of Service, the exercisability of the Option is
governed by the applicable provisions of the Plan, the Notice of Grant and this
Agreement.  This Option may not be exercised for a fraction of a Share.

(b)Method of Exercise.  This Option is exercisable by delivery of an exercise
notice in a form specified by the Company (the “Exercise Notice”), which shall
state the election to exercise the Option, the number of Shares in respect of
which the Option is being exercised (the “Exercised Shares”), and such other
representations and agreements as may be required by the Company pursuant to the
provisions of the Plan.  The Exercise Notice shall be delivered in person, by
mail, via electronic mail or facsimile or by other authorized method to the
Secretary of the Company or other person designated by the Company.  The
Exercise Notice shall be accompanied by payment of the aggregate Exercise Price
as to all Exercised Shares.  This Option shall be deemed to be exercised upon
receipt by the Company of a fully executed Exercise Notice accompanied by the
aggregate Exercise Price and any applicable withholding of Tax-Related Items as
detailed in Section 8 below.

(c)Exercise by Another.  If another person wants to exercise this Option after
it has been transferred to him or her in compliance with this Agreement, that
person must prove to the Company’s satisfaction that he or she is entitled to
exercise this Option.  That person must also complete the proper Exercise Notice
form (as described above) and pay the Exercise Price (as described below) and
any applicable withholding of Tax-Related Items as described below.

4.Method of Payment.  Payment of the aggregate Exercise Price shall be by any of
the following, or a combination thereof, at your election:

(a)your personal check, wire transfer, or a cashier’s check;

(b)for U.S. taxpayers only: certificates for shares of Company stock that you
own, along with any forms needed to effect a transfer of those shares to the
Company; the value of the shares, determined as of the effective date of the
Option exercise, will be applied to the Exercise Price.  Instead of surrendering
shares of Company stock, you may attest to the ownership of those shares on a
form provided by the Company and have the same number of shares subtracted

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from the Exercised Shares issued to you.  However, you may not surrender, or
attest to the ownership of, shares of Company stock in payment of the Exercise
Price of your Option if your action would cause the Company to recognize
compensation expense (or additional compensation expense) with respect to this
Option for financial reporting purposes;

(c)cashless exercise through irrevocable directions to a securities broker
approved by the Company to sell all or part of the Exercised Shares and to
deliver to the Company from the sale proceeds an amount sufficient to pay the
Exercise Price and any withholding of Tax-Related Items.  The balance of the
sale proceeds, if any, will be delivered to you.  The directions must be given
by signing a special notice of exercise form provided by the Company; or

(d)other method authorized by the Company.

5.Non-Transferability of Option.  In general, except as provided below, only you
may exercise this Option prior to your death.  You may not transfer or assign
this Option, except as provided below.  For instance, you may not sell this
Option or use it as security for a loan.  If you attempt to do any of these
things, this Option will immediately become invalid.  

However, if you are a U.S. taxpayer, you may dispose of this Option in your will
or in a beneficiary designation.  If you are a U.S. taxpayer and this Option is
designated as a NSO in the Notice of Grant, then the Committee may, in its sole
discretion, allow you to transfer this Option as a gift to one or more family
members.  For purposes of this Agreement, “family member” means a child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse,
sibling, niece, nephew, mother-in- law, father-in-law, son-in-law,
daughter-in-law, brother-in-law or sister-in-law (including adoptive
relationships), any individual sharing your household (other than a tenant or
employee), a trust in which one or more of these individuals have more than 50%
of the beneficial interest, a foundation in which you or one or more of these
persons control the management of assets, and any entity in which you or one or
more of these persons own more than 50% of the voting interest.  In addition, if
you are a U.S. taxpayer and this Option is designated as a NSO in the Notice of
Grant, then the Committee may, in its sole discretion, allow you to transfer
this Option to your spouse or former spouse pursuant to a domestic relations
order in settlement of marital property rights.  The Committee will allow you to
transfer this Option only if both you and the transferee(s) execute the forms
prescribed by the Committee, which include the consent of the transferee(s) to
be bound by this Agreement.  

This Option may not be transferred in any manner other than by will or by the
laws of descent or distribution or court order and may be exercised during the
lifetime of you only by you, your guardian, or legal representative, as
permitted in the Plan and applicable local laws.  The terms of the Plan and this
Agreement shall be binding upon the executors, administrators, heirs, successors
and assigns of you.

6.Term of Option.  This Option shall in any event expire on the expiration date
set forth in the Notice of Grant, which date is ten years after the grant date
(five years after the grant date if this Option is designated as an ISO in the
Notice of Grant and Section 5.3 of the Plan applies).

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7.Tax Consequences.  You should consult a tax adviser for tax consequences
relating to this Option in the jurisdiction in which you are subject to
tax.  YOU SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR
DISPOSING OF THE SHARES.

(a)Exercising the Option.  You will not be allowed to exercise this Option
unless you make arrangements acceptable to the Company to pay any withholding of
Tax-Related Items.  

(b)Notice of Disqualifying Disposition of ISO Shares.  If you sell or otherwise
dispose of any of the Shares acquired pursuant to an ISO on or before the later
of (i) two years after the grant date, or (ii) one year after the exercise date,
you shall immediately notify the Company in writing of such disposition.  You
agree that you may be subject to income tax withholding by the Company on the
compensation income recognized from such early disposition of ISO Shares by
payment in cash or out of the current compensation paid to you.

8.Responsibility for Taxes.  Regardless of any action the Company or, if
different, your actual employer (the “Employer”) takes with respect to any or
all income tax, social insurance contributions, payroll tax, fringe benefits
tax, payment on account or other tax-related withholding (“Tax-Related Items”),
you acknowledge that the ultimate liability for all Tax-Related Items legally
due by you is and remains your responsibility and that the Company and/or the
Employer (1) make no representations or undertakings regarding the treatment of
any Tax-Related Items in connection with any aspect of this Option, including
the grant, vesting or exercise of this Option, the subsequent sale of Shares
acquired pursuant to such exercise and the receipt of any dividends; and (2) do
not commit to structure the terms of the grant or any aspect of this Option to
reduce or eliminate your liability for Tax-Related Items or achieve any
particular tax result.  You acknowledge that if you are subject to Tax-Related
Items in more than one jurisdiction, the Company and/or the Employer may be
required to withhold or account for Tax-Related Items in more than one
jurisdiction.

Prior to exercise of the Option, you shall pay or make adequate arrangements
satisfactory to the Company and/or the Employer to satisfy all Tax-Related Item
withholding and payment on account obligations of the Company and/or the
Employer.  In this regard, you authorize the Company and/or the Employer, and
their respective agents, at their discretion, to withhold all applicable
Tax-Related Items legally payable by you from your wages or other cash
compensation paid to you by the Company and/or the Employer.  With the Company’s
consent, these arrangements may also include, if permissible under local law,
(a) withholding Shares that otherwise would be issued to you when you exercise
this Option, provided that the Company only withholds the amount of Shares
necessary to satisfy the minimum statutory withholding amount, (b) having the
Company withhold taxes from the proceeds of the sale of the Shares, either
through a voluntary sale or through a mandatory sale arranged by the Company (on
your behalf and pursuant to this authorization), (c) your payment of a cash
amount, or (d) any other arrangement approved by the Company; all under such
rules as may be established by the Committee and in compliance with the
Company’s Insider Trading Policy and 10b5-1 Trading Plan Policy, if applicable;
provided, however, that if you are a Section 16 officer of the Company under the
Exchange Act, then the Committee (as constituted in accordance with Rule 16b-3
under the Exchange Act) shall establish the method of withholding from
alternatives (a)-(d) above, and the Committee shall establish the method prior
to the taxable or withholding event.  The Fair Market

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Value of these Shares, determined as of the effective date of the Option
exercise, will be applied as a credit against the Tax-Related Items.

Depending on the withholding method, the Company may withhold or account for
Tax-Related Items by considering applicable minimum statutory withholding rates
or other applicable withholding rates, including maximum applicable rates, in
which case you will receive a refund of any over-withheld amount in cash and
will have no entitlement to the Shares equivalent.  If the obligation for
Tax-Related Items is satisfied by withholding in Shares, for tax purposes, you
are deemed to have been issued the full number of Shares subject to the vested
RSUs, notwithstanding that a number of the Shares are held back solely for the
purpose of paying the Tax-Related Items.

Finally, you agree to pay to the Company or the Employer any amount of
Tax-Related Items that the Company or the Employer may be required to withhold
as a result of your participation in the Plan or your purchase of Shares that
cannot be satisfied by the means previously described.  You acknowledge that the
Company has no obligation to deliver Shares to you until you have satisfied the
obligations in connection with the Tax-Related Items as described in this
Section.

9.Nature of Grant.  In accepting this Option, you acknowledge, understand and
agree that:

(a)the Plan is established voluntarily by the Company, it is discretionary in
nature and it may be modified, suspended or terminated by the Company at any
time, to the extent permitted by the Plan;

(b)the grant of this Option is voluntary and occasional and does not create any
contractual or other right to receive future grants of stock options, or
benefits in lieu of stock options, even if stock options have been granted in
the past;

(c)all decisions with respect to future stock options or other grants, if any,
will be at the sole discretion of the Company;

(d)you are voluntarily participating in the Plan;

(e)this Option and any Shares acquired under the Plan, and the income and value
of same, are not intended to replace any pension rights or compensation;

(f)this Option and any Shares acquired under the Plan, and the income and value
of same, are not part of normal or expected compensation for purpose of
calculating any severance, resignation, termination, redundancy, dismissal,
end-of-service payments, bonuses, long-service awards, pension or retirement
benefits or payments or welfare benefits or similar payments;

(g)unless otherwise agreed with the Company, this Option and any Shares acquired
under the Plan, and the income and value of same, are not granted as
consideration for, or in connection with, any Service you may provide as a
director of any Parent, Subsidiary or Affiliate;

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(h)the future value of the Shares underlying this Option is unknown,
indeterminable, and cannot be predicted with certainty;

(i)if the underlying Shares do not increase in value, this Option will have no
value;

(j)if you exercise this Option and acquire Shares, the value of such Shares may
increase or decrease in value, even below the Exercise Price;

(k)no claim or entitlement to compensation or damages shall arise from
forfeiture of this Option resulting from the termination of your Service (for
any reason whatsoever, whether or not later found to be invalid or in breach of
labor laws in the jurisdiction where you are employed or engaged or the terms of
your employment or service agreement, if any), and in consideration of the grant
of this Option to which you are otherwise not entitled, you irrevocably agree
never to institute any claim against the Company, the Employer or any Parent,
Subsidiary or Affiliate, waive your ability, if any, to bring any such claim,
and release the Company, the Employer or any Parent, Subsidiary or Affiliate
from any such claim; if, notwithstanding the foregoing, any such claim is
allowed by a court of competent jurisdiction, then, by participating in the
Plan, you shall be deemed irrevocably to have agreed not to pursue such claim
and agree to execute any and all documents necessary to request dismissal or
withdrawal of such claim; and

(l)if you are providing Service outside the United States, neither the Employer,
the Company nor any Parent, Subsidiary or Affiliate shall be liable for any
foreign exchange rate fluctuation between your local currency and the United
States Dollar that may affect the value of this Option or of any amounts due to
you pursuant to the exercise of this Option or the subsequent sale of any Shares
acquired upon exercise.

10.Data Privacy.  You hereby explicitly and unambiguously consent to the
collection, use and transfer, in electronic or other form, of your personal data
as described in this Agreement and any other Option grant materials by and
among, as applicable, the Employer, the Company and any Parent, Subsidiary or
Affiliate for the exclusive purpose of implementing, administering and managing
your participation in the Plan.

You understand that the Company and the Employer may hold certain personal
information about you, including, but not limited to, your name, home address
and telephone number, date of birth, social insurance number or other
identification number, salary, nationality, job title, any shares or
directorships held in the Company, details of all stock options or any other
entitlement to shares awarded, canceled, exercised, vested, unvested or
outstanding in your favor (“Data”), for the exclusive purpose of implementing,
administering and managing the Plan.

You understand that Data will be transferred to third parties in connection with
the implementation, administration and management of the Plan.  You understand
that the recipients of Data may be located in the United States or elsewhere,
and that the recipient’s country (e.g., the United States) may have different
data privacy laws and protections than your country.  You understand that if you
reside outside the United States, he or she may request a list with the names
and addresses of any potential recipients of Data by contacting your local human
resources representative.  You authorize the Company and any other possible
recipients which may assist

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the Company (presently or in the future) with implementing, administering and
managing the Plan to receive, possess, use, retain and transfer Data, in
electronic or other form, for the sole purposes of implementing, administering
and managing your participation in the Plan.  You understand that Data will be
held only as long as is necessary to implement, administer and manage your
participation in the Plan.  You understands that if you reside outside the
United States, you may, at any time, view Data, request additional information
about the storage and processing of Data, require any necessary amendments to
Data or refuse or withdraw the consents herein, in any case without cost, by
contacting in writing your local human resources representative.  Further, you
understand that you are providing the consents herein on a purely voluntary
basis.  If you do not consent, or if you later seek to revoke your consent, your
Service status and career with the Employer will not be adversely affected; the
only consequence of refusing or withdrawing your consent is that Company would
not be able to grant you stock options or other equity awards or administer or
maintain such awards.  Therefore, you understand that refusing or withdrawing
your consent may affect your ability to participate in the Plan.  For more
information on the consequences of your refusal to consent or withdrawal of
consent, you understand that you may contact your local human resources
representative.

11.Acknowledgement.  The Company and you agree that this Option is granted under
and governed by the Notice of Grant, this Agreement and the provisions of the
Plan (incorporated herein by reference).  You: (i) acknowledge receipt of a copy
of the Plan prospectus, (ii) represent that you have carefully read and are
familiar with the provisions in the grant documents, and (iii) hereby accept
this Option subject to all of the terms and conditions set forth in this
Agreement and those set forth in the Plan and the Notice of Grant.  You hereby
agree to accept as binding, conclusive and final all decisions or
interpretations of the Committee upon any questions relating to the Plan, the
Notice of Grant and this Agreement.

12.Consent to Electronic Delivery and Acceptance of All Plan Documents and
Disclosures.  By your acceptance of this Option, you consent to the electronic
delivery of the Notice of Grant, this Agreement, account statements, Plan
prospectuses required by the SEC, U.S. financial reports of the Company, and all
other documents that the Company is required to deliver to its stockholders
(including, without limitation, annual reports and proxy statements) or other
communications or information related to this Option.  Electronic delivery may
include the delivery of a link to a Company intranet or the internet site of a
third party involved in administering the Plan, the delivery of the document via
e-mail or such other delivery determined at the Company’s discretion.  You
acknowledge that you may receive from the Company a paper copy of any documents
delivered electronically at no cost if you contact the Company by telephone,
through a postal service or electronic mail at [insert email].  You further
acknowledge that you will be provided with a paper copy of any documents
delivered electronically if electronic delivery fails; similarly, you understand
that you must provide on request to the Company or any designated third party a
paper copy of any documents delivered electronically if electronic delivery
fails. You agree to participate in the Plan through an on-line or electronic
system established and maintained by the Company or a third party designated by
the Company.  Also, you understand that your consent may be revoked or changed,
including any change in the electronic mail address to which documents are
delivered (if you have provided an electronic mail address), at any time by
notifying the Company of such revised or revoked consent by telephone, postal
service or electronic mail at [insert email]. Finally, you understand that you
are not required to consent to electronic delivery.

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13.Compliance with Laws and Regulations.  The exercise of this Option will be
subject to and conditioned upon compliance by the Company and you with all
applicable state, federal and foreign laws and regulations and with all
applicable requirements of any stock exchange or automated quotation system on
which the Company’s Common Stock may be listed or quoted at the time of such
issuance or transfer, which compliance the Company shall, in its absolute
discretion, deem necessary or advisable.  You understand that the Company is
under no obligation to register or qualify the Common Stock with any state,
federal or foreign securities commission or to seek approval or clearance from
any governmental authority for the issuance or sale of the Shares.  Further, you
agree that the Company shall have unilateral authority to amend the Plan and
this Agreement without your consent to the extent necessary to comply with
securities or other laws applicable to issuance of Shares.  Finally, the Shares
issued pursuant to this Agreement shall be endorsed with appropriate legends, if
any, determined by the Company.

14.No Advice Regarding Grant.  The Company is not providing any tax, legal or
financial advice, nor is the Company making any recommendations regarding your
participation in the Plan, or your acquisition or sale of the underlying
Shares.  You are hereby advised to consult with your own personal tax, legal and
financial advisors regarding your participation in the Plan before taking any
action related to the Plan.

15.Governing Law; Venue.  This Agreement and all acts and transactions pursuant
hereto and the rights and obligations of the parties hereto shall be governed,
construed and interpreted in accordance with the laws of the State of Delaware,
without giving effect to principles of conflicts of law.  For purposes of
litigating any dispute that may arise directly or indirectly from the Plan, the
Notice of Grant and this Agreement, the parties hereby submit and consent to
litigation in the exclusive jurisdiction of the State of California and agree
that any such litigation shall be conducted only in the courts of California in
San Diego County, California or the federal courts of the United States for the
Southern District of California and no other courts.

16.Severability.  If one or more provisions of this Agreement are held to be
unenforceable under applicable law, the parties agree to renegotiate such
provision in good faith. In the event that the parties cannot reach a mutually
agreeable and enforceable replacement for such provision, then (i) such
provision shall be excluded from this Agreement, (ii) the balance of this
Agreement shall be interpreted as if such provision were so excluded and (iii)
the balance of this Agreement shall be enforceable in accordance with its
terms.  

17.No Rights as Employee, Director or Consultant.  Nothing in this Agreement
shall affect in any manner whatsoever the right or power of the Company, or a
Parent, Subsidiary or Affiliate of the Company, to terminate your Service, for
any reason, with or without Cause.

18.Adjustment.  In the event of a stock split, a stock dividend or a similar
change in Company stock, the number of Shares covered by this Option and the
Exercise Price per Share may be adjusted pursuant to the Plan.

19.Lock-Up Agreement.  In connection with the initial public offering of the
Company’s securities and upon request of the Company or the underwriters
managing any underwritten offering of the Company’s securities, you hereby agree
not to sell, make any short sale of, loan, grant any Option for the purchase of,
or otherwise dispose of any securities of the

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Company however and whenever acquired (other than those included in the
registration) without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time (not to exceed one
hundred eighty (180) days) from the effective date of such registration as may
be requested by the Company or such managing underwriters and to execute an
agreement reflecting the foregoing as may be requested by the underwriters at
the time of the public offering; provided however that, if during the last
seventeen (17) days of the restricted period the Company issues an earnings
release or material news or a material event relating to the Company occurs, or
prior to the expiration of the restricted period the Company announces that it
will release earnings results during the sixteen (16)-day period beginning on
the last day of the restricted period, then, upon the request of the managing
underwriter, to the extent required by any FINRA rules, the restrictions imposed
by this Section shall continue to apply until the end of the third trading day
following the expiration of the fifteen (15)-day period beginning on the
issuance of the earnings release or the occurrence of the material news or
material event.  In no event will the restricted period extend beyond two
hundred sixteen (216) days after the effective date of the registration
statement.

20.Award Subject to Company Clawback or Recoupment.  To the extent permitted by
applicable law, the Option shall be subject to clawback or recoupment pursuant
to any clawback or recoupment policy adopted by the Board or required by law
during the term of your employment or other Service that is applicable to
you.  In addition to any other remedies available under such policy, applicable
law may require the cancellation of your Option (whether vested or unvested) and
the recoupment of any gains realized with respect to your Option.

21.Entire Agreement; Enforcement of Rights.  This Agreement, the Plan and the
Notice of Grant constitute the entire agreement and understanding of the parties
relating to the subject matter herein and supersede all prior discussions
between them. Any prior agreements, commitments or negotiations concerning this
Option are superseded. No modification of or amendment to this Agreement, nor
any waiver of any rights under this Agreement, shall be effective unless in
writing and signed by the parties to this Agreement. The failure by either party
to enforce any rights under this Agreement shall not be construed as a waiver of
any rights of such party.

22.Insider Trading Restrictions/Market Abuse Laws.  You acknowledge that you may
be subject to insider trading restrictions and/or market abuse laws, which may
affect your ability to acquire or sell the Shares or rights to Shares under the
Plan during such times as you are considered to have “inside information”
regarding the Company (as defined by the laws in your country).  Any
restrictions under these laws or regulations are separate from and in addition
to any restrictions that may be imposed under any applicable Company insider
trading policy. You acknowledge that it is your responsibility to comply with
any applicable restrictions, and you are advised to speak to your personal
advisor on this matter.

23.Language.  If you have received this Agreement or any other document related
to the Plan translated into a language other than English and if the meaning of
the translated version is different than the English version, the English
version will control.

24.Appendix. Notwithstanding any provisions in this Agreement, this Option shall
be subject to any special terms and conditions set forth in any Appendix hereto
for your country.  

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Moreover, if you relocate to one of the countries included in the Appendix, the
special terms and conditions for such country will apply to you, to the extent
the Company determines that the application of such terms and conditions is
necessary or advisable for legal or administrative reasons. The Appendix
constitutes part of this Agreement.

25.Imposition of Other Requirements.  The Company reserves the right to impose
other requirements on your participation in the Plan, on this Option and on any
Shares acquired under the Plan, to the extent the Company determines it is
necessary or advisable for legal or administrative reasons, and to require you
to sign any additional agreements or undertakings that may be necessary to
accomplish the foregoing.

26.Waiver.  You acknowledge that a waiver by the Company of breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
other provision of this Agreement, or of any subsequent breach by you or any
other Participant.

BY ACCEPTING THIS OPTION, YOU AGREE TO ALL OF THE TERMS AND CONDITIONS DESCRIBED
ABOVE AND IN THE PLAN.

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APPENDIX

 

ADDITIONAL TERMS AND CONDITIONS TO
STOCK OPTION AGREEMENT
ACHIEVE LIFE SCIENCES, INC.
2017 EQUITY INCENTIVE PLAN

 

Capitalized terms, unless explicitly defined in this Appendix, shall have the
meanings given to them in the Stock Option Agreement, the Notice of Grant or in
the Plan.

Terms and Conditions

This Appendix includes special terms and conditions that govern this Option if
you reside and/or work in one of the countries listed below.  If you are a
citizen or resident (or are considered as such for local law purposes) of a
country other than the country in which you are currently residing and/or
working, or if you transfer to another country after receiving this Option, the
Company shall, in its discretion, determine to what extent the special terms and
conditions contained herein shall be applicable to you.

Notifications

This Appendix also includes information regarding securities, exchange control,
tax and certain other issues of which you should be aware with respect to your
participation in the Plan.  The information is based on the securities, exchange
control, tax and other laws in effect in the respective countries as of October
2017.  Such laws are often complex and change frequently.  As a result, the
Company strongly recommends that you not rely on the information contained
herein as the only source of information relating to the consequences of your
participation in the Plan because the information may be out of date at the time
you exercise this Option or at the time you sell any Shares acquired under the
Plan.  In addition, the information is general in nature and may not apply to
your particular situation, and the Company is not in a position to assure you of
any particular result.  Therefore, you are advised to seek appropriate
professional advice as to how the relevant laws in your country may apply to
your individual situation.

If you are a citizen or resident (or are considered as such for local tax
purposes) of a country other than the country in which you are currently
residing and/or working, or if you transfer to another country after the grant
of this Option, the information contained herein may not be applicable to you in
the same manner.

CANADA

Terms and Conditions

Manner of Exercising Option.

Due to regulatory requirements, you are prohibited from surrendering
certificates for Shares that you already own to pay the Exercise Price or any
Tax-Related Items in connection with the exercise of your Shares.

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You hereby authorize the Company and the Company’s representatives to discuss
with and obtain all relevant information from all personnel, professional or
not, involved in the administration and operation of the Plan.  You further
authorize the Employer, the Company and Parent, Subsidiaries and Affiliates and
the administrator of the Plan to disclose and discuss the Plan with their
advisors.  You further authorize the Employer to record such information and to
keep such information in your employee file.

Language Consent.

The following provisions will apply if you are a resident of Quebec:

The parties acknowledge that it is their express wish that this Agreement, as
well as all documents, notices and legal proceedings entered into, given or
instituted pursuant hereto or relating directly or indirectly hereto, be drawn
up in English.

Les parties reconnaissent avoir exigé la redaction en anglais de cette
convention (“Agreement”), ainsi que de tous documents exécutés, avis donnés et
procedures judiciaries intentées, directement ou indirectement, relativement à
la présente convention.

UNITED KINGDOM

Terms and Conditions

Data privacy

The following provision replaces Section 10 of the Global Stock Option Grant
Agreement:

To the satisfaction and on the direction of the Committee, all operations of the
Plan and this Option (at the time of its grant and as necessary thereafter)
shall include or be supported by appropriate agreements, notifications and
arrangements in respect of  Data and its use and processing under the Plan, in
order to secure:

 

(a)     the reasonable freedom of the Employer, the Company and any Parent or
Subsidiary (together, the "Group"), as appropriate, to operate the Plan and for
connected purposes; and

 

(b)     compliance with the data protection requirements applicable from time to
time, including, without limitation:

 

(aa)  the Data Protection Act 1998;

(bb) Regulation EU 2016/679 of the European Parliament and of the Council of 27
April 2016 (the "GDPR"); and

(cc)  the Group's relevant policies and practices.

 

 

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 The above shall include, and other provision may also be made as the Committee
decides:

 

(a)        the collection, use, processing and transfer of your Data by any
member of the Group or any Affiliate or third parties in connection with the
implementation, administration and management of the Plan;

 

(b)        the transfer of your Data amongst themselves by members of the Group
or any Affiliate or third parties in connection with the implementation,
administration and management of the Plan;

 

(c)        the use of such Data by any such person for any appropriate purpose;
and

 

(d)        as reasonably necessary, the transfer to and retention of your Data
by third parties in connection with the implementation, administration and
management of the Plan (whether or not any such third party is situated outside
the European Economic Area) for or in connection with any appropriate purpose,
on such terms and by such means as may be required by applicable data protection
law and guidance.

 

A data privacy notice, in a form approved by the Committee, setting out
applicable provisions in respect of Data, and any related information or
disclosure that may be required or appropriate, [was provided to you on [DATE]]
/ [accompanies this Option Agreement and you acknowledge receipt of that
notice].  Further information, disclosures or other measures in respect of Data
and your participation in the Plan may be notified to you in future, as may be
required.

 

"Data" for these purposes includes, but is not limited to your name, home
address and telephone number, date of birth, social insurance number or other
identification number, salary, nationality, job title, any shares or
directorships held in the Company, details of all stock options or any other
entitlement to shares awarded, canceled, exercised, vested, unvested or
outstanding in your favor and any other personal information which could
identify you.

Responsibility for Taxes.

The following provision supplements Section 8 of the Global Stock Option
Agreement:

If payment or withholding of the income tax is due in connection with the Option
and is not made within ninety (90) days after the end of the year in which the
event giving rise to the income tax liability occurs or such other period
specified in Section 222(1)(c) of the ITEPA 2003 (the “Due Date”), the amount of
any uncollected income tax will constitute a loan owed by you to the Employer,
effective on the Due Date.  You agree that the loan will bear interest at
then-current Official Rate of Her Majesty’s Revenue and Customs (“HMRC”), it
will be immediately due and repayable, and the Company or the Employer may
recover it at any time thereafter by any of the means referred to in the
Agreement.

Notwithstanding the foregoing, if you are a director or executive officer of the
Company (within the meaning of Section 13(k) of the U.S. Securities Exchange Act
of 1934, as amended), you will not be eligible for such a loan to cover the
income tax due as described above.  In the event that you are a director or
executive officer and the income tax is not collected from or paid by you by

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the Due Date, the amount of any uncollected tax will constitute a benefit to you
on which additional income tax and National Insurance Contributions (“NICs”)
will be payable.  You acknowledge that the Company or the Employer may recover
any such additional income tax and NICs at any time thereafter by any of the
means referred to in the Agreement.  You will also be responsible for reporting
and paying any income tax and NICs due on this additional benefit directly to
HMRC under the self-assessment regime.

Employer NICs.

As a condition of participation in the Plan, you agree and undertake to the
Company and to the Employer to accept any liability for secondary Class 1
National Insurance Contributions that may be payable by the Company or the
Employer (or any successor to the Company or the Employer) in connection with
the Option and any event giving rise to Tax-Related Items (the “Employer
NICs”).  The Employer NICs may be collected by the Company or the Employer using
any of the methods described in the Plan or in Section 8 of the Global Stock
Option Agreement.

You further agree, if required to do so, to execute a joint election with the
Company and/or the Employer (a “Joint Election”), the form of such Joint
Election being formally approved by HMRC, and any other consent or elections
required by the Company or the Employer in respect of the Employer NICs
liability.  You further agree to execute such other elections as may be required
by any successor to the Company and/or the Employer for the purpose of
continuing the effectiveness of your Joint Election.

 

* * *

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