Exhibit 10.2

 

VERASTEM, INC.

2018 EMPLOYEE STOCK PURCHASE PLAN

 

1.                                      Defined Terms

 

Exhibit A, which is incorporated by reference, defines certain terms used in the
Plan and sets forth certain operational rules related to those terms.

 

2.                                      Purpose of Plan

 

The Plan is intended to enable Eligible Employees to use payroll deductions to
purchase shares of Stock in offerings under the Plan and thereby acquire an
interest in the future of the Company. The Plan is intended to qualify as an
“employee stock purchase plan” under Section 423 and to be exempt from the
application and requirements of Section 409A of the Code and is to be construed
accordingly.

 

3.                                      Options to Purchase Stock

 

Subject to adjustment pursuant to Section 16 of the Plan, the maximum aggregate
number of shares of Stock available for purchase under the Plan to Eligible
Employees will be 2,000,000 shares. The shares of Stock to be delivered upon
exercise of Options under the Plan may be either shares of authorized but
unissued Stock, treasury Stock, or Stock acquired in an open-market transaction.
If any Option granted under the Plan expires or terminates for any reason
without having been exercised in full or ceases for any reason to be exercisable
in whole or in part, the unpurchased shares of Stock subject to such Option will
again be available for purchase pursuant to the exercise of Options under the
Plan. If, on an Exercise Date, the total number of shares of Stock that would
otherwise be subject to Options granted under the Plan exceeds the number of
shares then available under the Plan (after deduction of all shares for which
Options have been exercised or are then outstanding), the Administrator shall
make a pro rata allocation of the shares remaining available for purchase under
the Plan in as uniform a manner as shall be practicable and as it shall
determine to be equitable. In such event, the Administrator shall notify each
Participant of such reduction and of the effect on the Participant’s Options and
may reduce the rate of payroll deductions, if necessary.

 

4.                                      Eligibility

 

(a)         Eligibility Requirements.  Subject to Section 13 of the Plan and the
exceptions and limitations set forth in Sections 4(b), 4(c) and 6 of the Plan,
or as may be provided elsewhere in the Plan, each Employee (i) who has been
continuously employed by the Company or a Designated Subsidiary, as applicable,
for a period of at least thirty (30) days as of the first day of an Option
Period, (ii) whose customary Employment with the Company or a Designated
Subsidiary, as applicable, is for more than five (5) months per calendar year
and (iii) who customarily works twenty (20) hours or more per week shall be
considered an Eligible Employee.

 

(b)         Five Percent Shareholders.  No Employee may be granted an Option
under the Plan if, immediately after the Option is granted, the Employee would
own (or pursuant to Section 424(d) of the Code would be deemed to own) stock
possessing five percent (5%) or more of the total combined voting power or value
of all classes of Stock of the Company or of its Parent or Subsidiaries, if any.

 

(c)          Additional Requirements.  The Administrator may, for Option Periods
that have not yet commenced, establish additional or different eligibility
requirements not inconsistent with Section 423.

 

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5.                                      Option Periods

 

The Plan will generally be implemented by a series of separate offerings
referred to as “Option Periods.” Unless otherwise determined by the
Administrator, the Option Periods will be successive periods of approximately
six (6) months commencing on the first Business Day in January and July of each
year, anticipated to be on or around January 1 and July 1, and ending
approximately six (6) months later on the last Business Day in June or December,
as applicable, of each year, anticipated to be on or around June 30 and
December 31. The last Business Day of each Option Period will be an “Exercise
Date.” The Administrator may change the Exercise Date, the commencement date,
the ending date and the duration of each Option Period to the extent permitted
by Section 423; provided, however, that no Option may be exercised after
27 months from its grant date.

 

6.                                      Option Grant

 

Subject to the limitations set forth in Sections 4 and 10 of the Plan and the
Maximum Share Limit, on the first day of an Option Period, each Participant
automatically will be granted an Option to purchase shares of Stock on the
Exercise Date; provided, however, that no Participant will be granted an Option
under the Plan that permits the Participant’s right to purchase shares of Stock
under the Plan and under all other employee stock purchase plans of the Company
and its Parent and Subsidiaries, if any, to accrue at a rate that exceeds
$25,000 in Fair Market Value (or such other maximum as may be prescribed from
time to time by the Code) for each calendar year during which any Option granted
to such Participant is outstanding at any time, as determined in accordance with
Section 423 of the Code.

 

7.                                      Method of Participation

 

(a)         Payroll Deduction and Participation Authorization.  To participate
in an Option Period, an Eligible Employee must execute and deliver to the
Administrator a payroll deduction and participation authorization form in
accordance with the procedures prescribed by, and in a form acceptable to, the
Administrator and, in so doing, the Eligible Employee will thereby become a
Participant as of the first day of such Option Period. Such an Eligible Employee
will remain a Participant with respect to subsequent Option Periods until his or
her participation in the Plan is terminated as provided herein. Such payroll
deduction and participation authorization must be delivered not later than ten
(10) Business Days prior to the first day of an Option Period, or such other
time as specified by the Administrator.

 

(b)         Changes to Payroll Deduction Authorization for Subsequent Option
Periods.  A Participant’s payroll deduction authorization will remain in effect
for subsequent Option Periods unless the Participant files a new authorization
not later than ten (10) Business Days prior to the first day of the subsequent
Option Period (or such other time as specified by the Administrator) or the
Participant’s Option is cancelled pursuant to Section 13 or 14 of the Plan.

 

(c)          Changes to Payroll Deduction Authorization for Current Option
Period.  During an Option Period, a Participant’s payroll deduction
authorization may not be increased or decreased, except that a Participant may
terminate his or her payroll deduction authorization by canceling his or her
Option in accordance with Section 13 of the Plan.

 

(d)         Payroll Deduction Percentage.  Each payroll deduction authorization
will authorize payroll deductions as a whole percentage from one (1) to ten
(10) percent of the employee’s Eligible Compensation per payroll period.

 

(e)          Payroll Deduction Account.  All payroll deductions made pursuant to
this Section 7 will be credited to the Participant’s Account. Amounts credited
to a Participant’s Account will not be required to be set aside in trust or
otherwise segregated from the Company’s general assets.

 

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8.                                      Method of Payment

 

A Participant must pay for shares of Stock purchased under the Plan with
accumulated payroll deductions credited to the Participant’s Account, unless
otherwise provided by the Administrator under a sub-plan or separate offering
for a non-U.S. Designated Subsidiary.

 

9.                                      Purchase Price

 

The Purchase Price of shares of Stock issued pursuant to the exercise of an
Option on each Exercise Date will be eighty-five percent (85%) (or such greater
percentage specified by the Administrator to the extent permitted under
Section 423) of the lesser of (a) the Fair Market Value of a share of Stock on
the date on which the Option was granted pursuant to Section 6 of the Plan
(i.e., the first day of the Option Period) and (b) the Fair Market Value of a
share of Stock on the date on which the Option is deemed exercised pursuant to
Section 10 of the Plan (i.e., the Exercise Date).

 

10.                               Exercise of Options

 

(a)         Purchase of Shares.  Subject to the limitations set forth in
Section 6 of the Plan and this Section 10, with respect to each Option Period,
on the applicable Exercise Date, each Participant will be deemed to have
exercised his or her Option and the accumulated payroll deductions in the
Participant’s Account will be applied to purchase the greatest number of shares
of Stock (rounded down to the nearest whole share) that can be purchased with
such Account balance at the applicable Purchase Price; provided, however, that
no more than 3,333 shares of Stock may be purchased by a Participant on any
Exercise Date, or such lesser number as the Administrator may prescribe in
accordance with Section 423 (the “Maximum Share Limit”). As soon as practicable
thereafter, shares of Stock so purchased will be placed, in book-entry form,
into a record keeping account in the name of the Participant. No fractional
shares will be purchased pursuant to the exercise of an Option under the Plan;
any accumulated payroll deductions in a Participant’s Account that are not
sufficient to purchase a whole share will be retained in the Participant’s
Account for the subsequent Option Period, subject to earlier withdrawal by the
Participant as provided in Section 13 hereof.

 

(b)         Return of Account Balance.  Except as provided in Section 10(a) with
respect to fractional shares, any amount of payroll deductions in a
Participant’s Account that are not used for the purchase of shares of Stock,
whether because of the Participant’s withdrawal from participation in an Option
Period or for any other reason, will be returned to the Participant (or his or
her designated beneficiary or legal representative, as applicable), without
interest, as soon as administratively practicable after such withdrawal or other
event, as applicable. If the Participant’s accumulated payroll deductions on the
Exercise Date of an Option Period would otherwise enable the Participant to
purchase shares of Stock in excess of the Maximum Share Limit or the maximum
Fair Market Value set forth in Section 6 of the Plan, the excess of the amount
of the accumulated payroll deductions over the aggregate Purchase Price of the
shares of Stock actually purchased will be returned to the Participant, without
interest, as soon as administratively practicable after such Exercise Date.

 

11.                               Interest

 

No interest will be payable on any amount held in the Account of any
Participant.

 

12.                               Taxes

 

Payroll deductions will be made on an after-tax basis. The Administrator will
have the right to make such provision as it deems necessary for, and may
condition the exercise of an Option on, the satisfaction of its obligations to
withhold federal, state, local income or other taxes incurred by reason of the
purchase or disposition of shares of Stock under the Plan. In the
Administrator’s discretion and subject to applicable law, such tax obligations
may be paid in whole or in part by delivery of shares of

 

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Stock to the Company, including shares of Stock purchased under the Plan, valued
at Fair Market Value, but not in excess of the minimum statutory amounts
required to be withheld.

 

13.                               Cancellation and Withdrawal

 

(a)         Cancellation of Payroll Deduction Authorization and Withdrawal from
Plan.  A Participant who holds an Option under the Plan may cancel all (but not
less than all) of his or her Options and terminate his or her payroll deduction
authorization by notice delivered to the Administrator in accordance with the
procedures prescribed by, and in a form acceptable to, the Administrator. To be
effective with respect to an upcoming Exercise Date, such cancellation notice
must be delivered not later than ten (10) Business Days prior to such Exercise
Date (or such other time as specified by the Administrator). Upon such
termination and cancellation, the balance in the Participant’s Account will be
returned to the Participant, without interest, as soon as administratively
practicable thereafter. For the avoidance of doubt, a Participant who reduces to
0% his or her withholding rate for a future Option Period pursuant to Section 7
of the Plan, will be deemed to have terminated his or her payroll deduction
authorization and canceled his or her participation in future Option Periods,
unless the Participant delivers a new payroll deduction authorization for a
subsequent Option Period in accordance with the rules of Section 7(b) of the
Plan.

 

(b)         401(k) Hardship Withdrawal.  A Participant who makes a hardship
withdrawal from a 401(k) Plan will be deemed to have terminated his or her
payroll deduction authorization for subsequent payroll dates relating to the
then current Option Period as of the date of such hardship withdrawal and
amounts accumulated in the Participant’s Account as of such date will be
returned to the Participant, without interest, as soon as administratively
practicable thereafter. An Employee who has made a hardship withdrawal from a
401(k) Plan will not be permitted to participate in Option Periods commencing
after the date of his or her hardship withdrawal until the first Option Period
that begins at least six months after the date of his or her hardship
withdrawal.

 

14.                               Termination of Employment; Death of
Participant

 

Upon the termination of a Participant’s employment with the Company or a
Designated Subsidiary, as applicable, for any reason (including the death of a
Participant during an Option Period prior to an Exercise Date) or in the event
the Participant ceases to qualify as an Eligible Employee, the Participant will
cease to be a Participant, any Option held by the Participant under the Plan
will be canceled, the balance in the Participant’s Account will be returned to
the Participant (or his or her estate or designated beneficiary in the event of
the Participant’s death), without interest, as soon as administratively
practicable thereafter, and the Participant will have no further rights under
the Plan.

 

15.                               Equal Rights; Participant’s Rights Not
Transferable

 

All Participants granted Options in an offering under the Plan will have the
same rights and privileges, consistent with the requirements set forth in
Section 423. Any Option granted under the Plan will be exercisable during the
Participant’s lifetime only by him or her and may not be sold, pledged,
assigned, or transferred in any manner. In the event any Participant violates or
attempts to violate the terms of this Section 15, as determined by the
Administrator in its sole discretion, any Options held by the Participant under
the Plan may be terminated by the Company and, upon the return to the
Participant of the balance of his or her Account, without interest, all of the
Participant’s rights under the Plan will terminate.

 

16.                               Change in Capitalization; Corporate
Transaction

 

(a)         Change in Capitalization.  In the event of any change in the
outstanding Stock by reason of a stock dividend, stock split, reverse stock
split, split-up, recapitalization, merger, consolidation,

 

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reorganization, or other capital change, the aggregate number and type of shares
of Stock available under the Plan, the number and type of shares of Stock
granted under any outstanding Options, the Maximum Share Limit and the purchase
price per share of Stock under any outstanding Option will be appropriately
adjusted; provided, that any such adjustment shall be made in a manner that
complies with Section 423.

 

(b)         Corporate Transaction.  In the event of a sale of all or
substantially all of the Stock or a sale of all or substantially all of the
assets of the Company, or a merger or similar transaction in which the Company
is not the surviving corporation or that results in the acquisition of the
Company by another person, the Administrator may, in its discretion, (i) if the
Company is merged with or acquired by another corporation, provide that each
outstanding Option will be assumed or exchanged for a substitute Option granted
by the acquiror or successor corporation or by a parent or subsidiary of the
acquiror or successor corporation, (ii) cancel each outstanding Option and
return the balances in Participants’ Accounts to the Participants, and/or
(iii) pursuant to Section 18 of the Plan, terminate the Option Period on or
before the date of the proposed sale, merger or similar transaction.

 

17.                               Administration of Plan

 

The Plan will be administered by the Administrator, which will have the
authority to interpret the Plan, determine eligibility under the Plan, prescribe
forms, rules and procedures relating to the Plan and otherwise do all things
necessary or appropriate to carry out the purposes of the Plan. All
determinations and decisions by the Administrator regarding the interpretation
or application of the Plan will be final and binding on all Participants and all
persons.

 

The Administrator may specify the manner in which the Company and/or Employees
are to provide notices and forms under the Plan and may require that such
notices and forms be submitted electronically.

 

18.                               Amendment and Termination of Plan; Separate
Offerings; Sub-Plans

 

(a)         Amendment.  The Board reserves the right at any time or times to
amend the Plan to any extent and in any manner it may deem advisable; provided,
however, that any amendment that would be treated as the adoption of a new plan
for purposes of Section 423 will have no force or effect unless approved by the
shareholders of the Company within twelve (12) months before or after its
adoption.

 

(b)         Termination.  The Board reserves the right at any time or times to
suspend or terminate the Plan. In connection therewith, the Board may provide,
in its sole discretion, either that outstanding Options will be exercisable
either on the Exercise Date for the applicable Option Period or on such earlier
date as the Board may specify (in which case such earlier date will be treated
as the Exercise Date for the applicable Option Period), or that the balance of
each Participant’s Account will be returned to the Participant, without
interest.

 

(c)          Separate Offerings; Sub-Plans.  Notwithstanding the foregoing or
any provision of this Plan to the contrary, consistent with the requirements of
Section 423, the Administrator may, in its sole discretion, amend the terms of
the Plan, or an offering, and/or provide for separate offerings under this Plan
in order to, among other things, reflect the impact of local law outside of the
United States as applied to one or more Eligible Employees of a Designated
Subsidiary and may, where appropriate, establish one or more sub-plans to
reflect such amended provisions.

 

19.                               Approvals

 

Shareholder approval of the Plan will be obtained prior to the date that is
twelve (12) months after the date of Board approval. In the event that the Plan
has not been approved by the shareholders

 

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of the Company prior to November 9, 2019, all Options to purchase shares of
Stock under the Plan will be cancelled and become null and void.

 

Notwithstanding anything herein to the contrary, the obligation of the Company
to issue and deliver shares of Stock under the Plan will be subject to the
approval required of any governmental authority in connection with the
authorization, issuance, sale or transfer of such shares of Stock and to any
requirements of any national securities exchange applicable thereto, and to
compliance by the Company with other applicable legal requirements in effect
from time to time.

 

20.                               Participants’ Rights as Shareholders and
Employees

 

A Participant will have no rights or privileges as a shareholder of the Company
and will not receive any dividends in respect of any shares of Stock covered by
an Option granted hereunder until such Option has been exercised, full payment
has been made for such shares, and the shares have been issued to the
Participant.

 

Nothing contained in the provisions of the Plan will be construed as giving to
any Employee the right to be retained in the employ of the Company or any
Designated Subsidiary or as interfering with the right of the Company or any
Designated Subsidiary to discharge, promote, demote or otherwise re-assign any
Employee from one position to another within the Company or any Designated
Subsidiary at any time.

 

21.                               Information Regarding Disqualifying
Dispositions

 

By electing to participate in the Plan, each Participant agrees to provide such
information about any transfer of Stock acquired under the Plan that occurs
within two years after the first day of the Option Period in which such Stock
was acquired and within one year after the day such Stock was purchased as may
be requested by the Company or any Designated Subsidiary in order to assist it
in complying with applicable tax laws.

 

22.                               Governing Law

 

The Plan will be governed by and administered in accordance with the laws of the
State of Delaware, and with the applicable requirements of the stock exchanges
or other trading systems on which the Stock is listed or entered for trading and
the Code, in each case as determined by the Administrator. Except as otherwise
provided under a sub-plan described in Section 18(c) of the Plan or as provided
in the first sentence of this Section 22, the domestic substantive laws of
Delaware govern the provisions of the Plan or any Options under the Plan or
relating to the subject matter hereof or thereof without giving effect to any
choice or conflict of laws provision or rule that would cause the application of
the domestic substantive laws of any other jurisdiction.

 

23.                               Effective Date and Term

 

The Plan will become effective upon adoption of the Plan by the Board and no
rights will be granted hereunder after the earliest to occur of (a) the Plan’s
termination by the Company, (b) the issuance of all shares of Stock available
for issuance under the Plan or (c) the day before the 10-year anniversary of the
date the Board approves the Plan.

 

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EXHIBIT A

Definition of Terms

 

The following terms, when used in the Plan, will have the meanings and be
subject to the provisions set forth below:

 

“401(k) Plan”:  A savings plan qualifying under Section 401(k) of the Code that
is sponsored by the Company or one of its Subsidiaries for the benefit of its
employees.

 

“Account”:  A payroll deduction account maintained in the Participant’s name on
the books of the Company.

 

“Administrator”:  The Compensation Committee of the Board, except that the
Compensation Committee may delegate (i) to one or more of its members (or one or
more other members of the Board, including the full Board) such of its duties,
powers and responsibilities as it may determine and (ii) to such Employees or
other persons as it determines such ministerial tasks as it deems appropriate.
In the event of any delegation described in the preceding sentence, the term
“Administrator” will include the person or persons so delegated to the extent of
such delegation.

 

“Board”:  The Board of Directors of the Company.

 

“Business Day”:  Any day on which the established national exchange or trading
system (including the Nasdaq Global Market) on which the Stock is traded is
available and open for trading.

 

“Code”:  The U.S. Internal Revenue Code of 1986, as from time to time amended
and in effect, or any successor statute as from time to time in effect.

 

“Company”:  Verastem, Inc., a Delaware corporation.

 

“Designated Subsidiary”:  A Subsidiary of the Company that has been designated
by the Board or the Compensation Committee of the Board from time to time as
eligible to participate in the Plan. Any such Designated Subsidiary shall be
listed by the Administrator on an exhibit to the Plan. For the avoidance of
doubt, any Subsidiary of the Company shall be eligible to be designated as a
Designated Subsidiary hereunder.

 

“Effective Date”:  The date of the adoption of the Plan by the Board.

 

“Eligible Compensation”:  Regular base salary, regular base wages, overtime
payments, annual bonuses, commissions and other sales incentives (excluding, for
the avoidance of doubt, any long-term incentive payments or awards). Eligible
Compensation will not be reduced by any income or employment tax withholdings or
any contributions by the Employee to a 401(k) Plan or a plan under Section 125
of the Code, but will be reduced by any contributions made on the Employee’s
behalf by the Company or any Subsidiary to any deferred compensation plan or
welfare benefit program now or hereafter established.

 

“Eligible Employee”:  Any Employee who meets the eligibility requirements set
forth in Section 4 of the Plan.

 

“Employee”:  Any person who is employed by the Company or a Designated
Subsidiary. For the avoidance of doubt, independent contractors and consultants
are not “Employees”.

 

“Exercise Date”:  The date set forth in Section 5 of the Plan or otherwise
designated by the Administrator with respect to a particular Option Period on
which a Participant will be deemed to have exercised the Option granted to him
or her for such Option Period.

 

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“Fair Market Value”:  As of a particular date, (i) the closing price for a share
of Stock reported on the Nasdaq Global Market (or any other national securities
exchange on which the shares are then listed) for that date or, if no closing
price is reported for that date, the closing price on the immediately preceding
date on which a closing price was reported or (ii) in the event that the Stock
is not traded on a national securities exchange, the fair market value of a
share of Stock determined by the Administrator consistent with the rules of
Section 422 and Section 409A of the Code to the extent applicable.

 

“Maximum Share Limit”:  The meaning set forth in Section 10 of the Plan.

 

“Option”:  An option granted pursuant to the Plan entitling the holder to
acquire shares of Stock upon payment of the Purchase Price per share of Stock.

 

“Option Period”:  An offering period established in accordance with Section 5 of
the Plan.

 

“Parent”:  A “parent corporation” as defined in Section 424(e) of the Code.

 

“Participant”:  An Eligible Employee who elects to enroll in the Plan.

 

“Plan”:  The Verastem, Inc. 2018 Employee Stock Purchase Plan, as from time to
time amended and in effect.

 

“Purchase Price”:  The price per share of Stock with respect to an Option Period
determined in accordance with Section 9 of the Plan.

 

“Section 423”:  Section 423 of the Code and the regulations thereunder.

 

“Stock”:  Common stock of the Company, par value $0.0001 per share.

 

“Subsidiary”:  A “subsidiary corporation” as defined in Section 424(f) of the
Code.

 

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