Exhibit 10.3
 
 
FORM OF STOCK OPTION AGREEMENT

GOVERNED BY THE TERMS, CONDITIONS AND LIMITATIONS OF
THE ARIAD PHARMACEUTICALS, INC. 2014 LONG-TERM INCENTIVE PLAN

This Stock Option Agreement (this “Option Agreement”) certifies that the Board
of Directors of ARIAD Pharmaceuticals, Inc. (the “Company”) has granted an
option (the “Option”) to purchase shares of the Company’s common stock, $.001
par value per share (the “Shares”), that is governed by the terms, conditions
and limitations of the ARIAD Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan
(the “2014 Plan”), as follows:
 
 
Name of Participant:
Paris Panayiotopoulos
Number of Option Shares:
1,500,000 Shares
Type of Stock Option Grant:
Nonqualified
Date of Grant:
[●], 2016
Exercise Price:
$[●] per Share

The Option is granted to the Participant as an inducement to serve as the
Company’s Chief Executive Officer and President, in accordance with NASDAQ
Listing Rule 5635(c)(4).  Although the Option is not granted under the 2014
Plan, it is subject to all the terms, conditions and limitations set forth in
the 2014 Plan, which is incorporated herein by reference, and to the following
additional terms specified by the Board of Directors of the Company as set forth
below.  Except as expressly set forth in this Option Agreement, in the event of
any conflict between the terms of this Option Agreement and the terms of any
individual employment agreement between the Participant and the Company or any
of its subsidiaries (the “Employment Agreement”), the terms of the Employment
Agreement shall govern.  Capitalized terms used herein and not otherwise defined
shall have the meaning set forth in the 2014 Plan.

The Option shall be exercisable as follows:

Scheduled Vesting Date
Portion Vesting on Such Date
Number of Option Shares Vesting on Such Date
[●], 2017
 
1/4
 
375,000
 
The [●] day of each month beginning [Month], 2017
 
1/48
 
31,250
 

Payment of the Exercise Price shall be made in accordance with Paragraph 7(d) of
the 2014 Plan and shall include payment by means of a broker-assisted “cashless
exercise” as set forth in Paragraph 7(d)(ii)(B) of the 2014 Plan and may
include, at the discretion of the Company, payment by “net exercise” as set
forth in Paragraph 7(d)(ii)(C) of the 2014 Plan.

The Option shall terminate ten years from the Date of Grant; provided, however,
that in the event of a Termination of Service (as defined below) before exercise
of the Option the following rules shall apply:

(i) If the Participant’s Termination of Service is for Cause (as defined in the
Employment Agreement), no portion of the Option may be exercised, and the Option
shall immediately expire upon such Termination of Service;

(ii) The Option may be exercised after the Participant’s Termination of Service
only to the extent that the Option was vested as of the Termination of Service
and did not expire upon such Termination of Service in accordance with clause
(i) above;

(iii) If the Participant’s Termination of Service is the result of any reason
other than (1) the Participant’s death or Disability (as defined in the
Employment Agreement) or (2) for Cause (as defined in the Employment Agreement),
then the Participant may exercise the vested portion of the Option within three
months after such Termination of Service;

(iv) If the Participant’s Termination of Service is the result of the
Participant’s death or Disability (as defined in the Employment Agreement), then
the Participant may exercise the vested portion of the Option within 12 months
after such Termination of Service; and

(v) After the Participant’s death, his or her beneficiary may exercise the
Option only to the extent that the deceased Participant was entitled to exercise
such Option as of the date of his death.
 
 

--------------------------------------------------------------------------------

 
 
If the Committee determines, subsequent to the Participant’s Termination of
Service but before exercise of the Option, that either before or after the
Participant’s Termination of Service the Participant engaged in conduct that
constitutes Cause (as defined in the Employment Agreement), then the
Participant’s right to exercise the Option shall be forfeited immediately.

Notwithstanding the foregoing, in the event of a Termination of Service within
the two-year period following a Change in Control (as defined in the Employment
Agreement), the Participant’s right to exercise the Option shall be governed by
the terms of the Employment Agreement, to the extent applicable.

“Termination of Service” means the date the Participant ceases to be an Eligible
Person in any capacity.  The Option shall not be affected by the change of a
Participant’s status within or among the Company and any Affiliates, so long as
the Participant remains an Eligible Person.  Unless the Committee or a Company
policy provides otherwise, a leave of absence authorized by the Company or the
Committee (including sick leave or military leave) from which return to service
is not guaranteed by statute or contract shall be characterized as a Termination
of Service if the Participant does not return to service within three months, in
which case such Termination of Service shall be effective as of the first day
that is more than three months after the beginning of such period of leave.  If
the ability to return to service upon the expiration of such leave is guaranteed
by statute or contract, but the Participant does not so return, then the leave
shall be characterized as a Termination of Service as of a date established by
the Committee or Company policy.  If an entity ceases to be an Affiliate and, as
a result, the Participant does not continue as an Eligible Person in respect of
the Company or another Affiliate, then a Termination of Service shall be deemed
to have occurred with respect to the Participant after such giving effect to
such Affiliate’s change in status.

The Option is not assignable or transferable, other than as provided in the 2014
Plan.  In no event shall the Company be required to issue fractional shares.  In
accordance with Paragraph 14(c) of the 2014 Plan, the Company may in its sole
discretion withhold in kind from the Shares otherwise deliverable to the
Participant upon exercise of the Option the minimum statutory amount of federal,
state and local withholding taxes attributable to such amount that is considered
compensation includable in the Participant’s gross income.

This Option Agreement, together with the 2014 Plan, the Employment Agreement and
any other written agreement between the Company and the Participant relevant to
the subject matter hereof and executed contemporaneously herewith or hereafter,
embodies the entire agreement and understanding between the parties hereto with
respect to the subject matter hereof and supersedes all prior oral or written
agreements and understandings relating to the subject matter hereof and no other
statement, representation, warranty, covenant or agreement shall affect or be
used to interpret, change or restrict, the express terms and provisions of this
Option Agreement.

In witness whereof, the Company has caused this Option Agreement to be executed
by its duly authorized officers.

 
ARIAD PHARMACEUTICALS, INC.
 
PARTICIPANT
     
By:
 
 
 
 
 
 
       
 
     

 
 
2

--------------------------------------------------------------------------------