Exhibit 10.7

 

VTV THERAPEUTICS INC. 

2015 OMNIBUS EQUITY INCENTIVE PLAN  

NONQUALIFIED
OPTION AWARD AGREEMENT

 

THIS NONQUALIFIED OPTION AWARD AGREEMENT (the “Agreement”), is entered into as
of [______] (the “Date of Grant”), by and between vTv Therapeutics Inc., a
Delaware corporation (the “Company”), and [______] (the “Participant”).

 

WHEREAS, the Company has adopted the vTv Therapeutics Inc. 2015 Omnibus Equity
Incentive Plan (the “Plan”), pursuant to which Options may be granted; and

 

WHEREAS, the Committee has determined that it is in the best interests of the
Company and its stockholders to grant the Option provided for herein to the
Participant subject to the terms set forth herein.

 

NOW, THEREFORE, for and in consideration of the premises and the covenants of
the parties contained in this Agreement, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto,
for themselves, their successors and assigns, hereby agree as follows:

 

1.             Grant of Option.

 

(a)                Grant. The Company hereby grants to the Participant an Option
(the “Option”) to purchase [______] shares of Class A Common Stock (such shares,
the “Option Shares”), on the terms and conditions set forth in this Agreement
and as otherwise provided in the Plan. The Option is not intended to qualify as
an Incentive Stock Option. The Options shall vest in accordance with Section 2.
The Exercise Price shall be $[______] per Option Share.

 

(b)               Incorporation by Reference. The provisions of the Plan are
incorporated herein by reference. Except as otherwise expressly set forth
herein, this Agreement shall be construed in accordance with the provisions of
the Plan and any interpretations, amendments, rules and regulations promulgated
by the Committee from time to time pursuant to the Plan. Any capitalized terms
not otherwise defined in this Agreement shall have the definitions set forth in
the Plan. The Committee shall have final authority to interpret and construe the
Plan and this Agreement and to make any and all determinations under them, and
its decision shall be binding and conclusive upon the Participant and his legal
representative in respect of any questions arising under the Plan or this
Agreement. The Participant acknowledges that he or she has received a copy of
the Plan and has had an opportunity to review the Plan and agrees to be bound by
all the terms and provisions of the Plan.

 

2.             Vesting. Except as may otherwise be provided herein or as
otherwise provided in an employment agreement, consulting agreement or other
written agreement between the Participant and the Company or any of its
Affiliates, subject to the Participant’s continued employment or service with
the Company or an Affiliate, the Options shall become vested and exercisable in
equal installments [on each of the first [___] anniversaries of] [over [___]
months after]1 the Date of Grant (each such date, a “Vesting Date”) [; provided,
that, if the Company does not consummate an initial public offering of Class A
Common Stock within six (6) months after the Date of Grant, then no Option
Shares shall vest]. Any fractional Option Shares resulting from the application
of the vesting schedule shall be aggregated and the Option Shares resulting from
such aggregation shall vest on the final Vesting Date.

 

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1Awards for non-employee directors are expected to vest on a monthly basis.

 

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3.             Termination of Employment or Service.

 

(a)                Except as otherwise provided herein or as otherwise provided
in an employment agreement, consulting agreement or other written agreement
between the Participant and the Company or any of its Affiliates, if the
Participant’s employment or service with the Company and its Affiliates
terminates for any reason [other than as set forth in Section 3(c) hereof], the
unvested portion of the Option shall be cancelled immediately, and the
Participant shall immediately forfeit any rights to the Option Shares subject to
such unvested portion.

 

(b)               [For purpose hereof, the term “Good Reason” shall have the
meaning ascribed to such term (or term of similar meaning and import) in any
employment, consulting, or other written agreement between the Participant and
the Company or an Affiliate in effect at the time of such termination or, in the
absence of any such agreement or in the absence of any definition of good reason
in such agreement, then Good Reason shall mean the occurrence of any of the
following events without the Participant’s written consent: (i) any material
diminution of base salary and target bonus opportunity, or (ii) any relocation
of principal place of employment to a location more than 50 miles from the
Participant’s principal place of employment as of the date hereof that increases
the Participant’s one-way commute. Notwithstanding the foregoing, Good Reason
shall not exist unless (x) within ten (10) days after the occurrence of the
event that the Participant asserts constitutes an event described in clause (i)
or (ii) above, the Participant notifies the Company’s senior human resources
officer in writing of such event and the circumstances that the Participant
asserts give rise to Good Reason, (y) the Company fails to cure such
circumstances within thirty (30) days following such notice (the “Cure Period”),
and (z) no later than two (2) days after the expiration of the Cure Period, the
Participant resigns from employment, such resignation to be effective ten (10)
days following expiration of the Cure Period; provided, that the Company, in its
sole discretion, may waive all or any part of the Cure Period, and the Company
may assert that, notwithstanding such resignation, the Participant did not
terminate for Good Reason within the meaning of this Agreement.

 

(c)                Notwithstanding Section 3(a), if the Participant’s employment
or service with the Company and its Affiliates is terminated by the Company or
its Affiliates without Cause (other than for death or disability) or by the
Participant for Good Reason in each case on or within twelve months following a
Change-in-Control, then any unvested Options then outstanding shall become
vested upon the date of such termination.]

 

4.             Expiration.

 

(a)                In no event shall all or any portion of the Option be
exercisable after the tenth annual anniversary of the Date of Grant (such
ten-year period, the “Option Period”); provided, that if the Option Period would
expire at a time when trading in the shares of Class A Common Stock is
prohibited by the Company’s securities trading policy (or Company-imposed
“blackout period”), the Option Period shall be automatically extended until the
30th day following the expiration of such prohibition (but not to the extent any
such extension would otherwise violate Section 409A of the Code).

 

(b)               Except as otherwise provided in an employment agreement,
consulting agreement or other written agreement between the Participant and the
Company or any of its Affiliates, if, prior to the end of the Option Period, the
Participant’s employment or services with the Company and all Affiliates is
terminated by the Company without Cause or by the Participant for any reason,
the Option shall expire on the earlier of the last day of the Option Period or
the date that is 90 days after the date of such termination. In the event of a
termination described in this subsection (b), the Option shall remain
exercisable by the Participant until its expiration only to the extent the
Option was exercisable at the time of such termination.

 

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(c)                Except as otherwise provided in an employment agreement,
consulting agreement or other written agreement between the Participant and the
Company or any of its Affiliates, if (x) the Participant’s employment or service
is terminated prior to the end of the Option Period on account of his or her
Disability, (y) the Participant dies while still in the employ of, or while
providing services to, the Company or an Affiliate or (z) the Participant dies
following a termination described in subsection (b) above but prior to the
expiration of an Option, the Option shall expire on the earlier of the last day
of the Option Period or the date that is one year after the date of death or
termination on account of Disability of the Participant, as applicable. In such
event, the Option shall remain exercisable by the Participant or his
beneficiary, as applicable, until its expiration only to the extent the Option
was exercisable by the Participant at the time of such event.

 

(d)               If the Participant ceases employment or service with the
Company or any Affiliates due to a termination for Cause or a termination for
any reason at a time when grounds to terminate the Participant’s employment or
services for Cause exist, the Option (including any vested portion of the
Option) shall expire immediately upon such termination.

 

5.             Method of Exercise and Form of Payment. No Option Shares shall be
delivered pursuant to any exercise of the Option until payment in full is made
to the Company of the Exercise Price and an amount equal to any U.S. federal,
state, local and non-U.S. income and employment taxes required to be withheld is
withheld. The Option may be exercised by delivery of written or electronic
notice of exercise to the Company or its designee (including a third party
administrator) in accordance with the terms hereof. The Exercise Price and all
applicable required withholding taxes shall be payable (i) in cash, check, cash
equivalent (including bank or certified check or wire transfer) and/or in shares
of Class A Common Stock (or any combination of the foregoing) valued at the Fair
Market Value at the time the Option is exercised (including, pursuant to
procedures approved by the Committee, by means of attestation of ownership of a
sufficient number of shares of Class A Common Stock in lieu of actual delivery
of such shares to the Company); provided, that, such shares of Class A Common
Stock are not subject to any pledge or other security interest; or (ii) by such
other method as the Committee may permit, including without limitation: (A) in
other property having a fair market value equal to the Exercise Price and all
applicable required withholding taxes or (B) if there is a public market for the
shares of Class A Common Stock at such time, by means of a broker-assisted
“cashless exercise” pursuant to which the Company is delivered a copy of
irrevocable instructions to a stockbroker to sell the shares of Class A Common
Stock otherwise deliverable upon the exercise of the Option and to deliver
promptly to the Company an amount equal to the Exercise Price and all applicable
required withholding taxes; or (C) by means of a “net exercise” procedure
effected by withholding the minimum number of shares of Class A Common Stock
otherwise deliverable in respect of an Option that are needed to pay for the
Exercise Price and all applicable required withholding taxes. Any fractional
shares of Class A Common Stock shall be settled in cash.

 

6.             Rights as a Stockholder. The Participant shall not be deemed for
any purpose to be the owner of any shares of Class A Common Stock subject to
this Option unless, until and to the extent that (i) this Option shall have been
exercised pursuant to its terms, (ii) the Company shall have issued and
delivered to the Participant the Option Shares and (iii) the Participant’s name
shall have been entered as a stockholder of record with respect to such Option
Shares on the books of the Company. The Company shall cause the actions
described in clauses (ii) and (iii) of the preceding sentence to occur promptly
following settlement as contemplated by this Agreement, subject to compliance
with applicable laws.

 

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7.             Compliance with Legal Requirements.

 

(a)                Generally. The granting and exercising of the Option, and any
other obligations of the Company under this Agreement, shall be subject to all
applicable U.S. federal, state and local laws, rules and regulations, all
applicable non-U.S. laws, rules and regulations and to such approvals by any
regulatory or governmental agency as may be required. The Participant agrees to
take all steps the Committee or the Company determines are reasonably necessary
to comply with all applicable provisions of U.S. federal and state securities
law and non-U.S. securities law in exercising his or her rights under this
Agreement.

 

(b)               Tax Withholding. Any exercise of the Option shall be subject
to the Participant satisfying any applicable U.S. federal, state and local tax
withholding obligations and non-U.S. tax withholding obligations. The Company
shall have the right and is hereby authorized to withhold from any amounts
payable to the Participant in connection with the Option or otherwise the amount
of any required withholding taxes in respect of the Option, its exercise or any
payment or transfer of the Option or under the Plan and to take any such other
action as the Committee or the Company deem necessary to satisfy all obligations
for the payment of such withholding taxes. The Committee, may in its sole
discretion permit the Participant to satisfy, in whole or in part, the tax
obligations by withholding shares of Class A Common Stock that would otherwise
be received upon exercise of the Option with a Fair Market Value equal to such
withholding liability (but no more than the minimum required statutory
withholding liability).2

 

8.             Clawback. Notwithstanding anything to the contrary contained
herein, the Committee may cancel the Option award if the Participant, without
the consent of the Company, has engaged in or engages in activity that is in
conflict with or adverse to the interest of the Company or any Affiliate while
employed by or providing services to the Company or any Affiliate, including
fraud or conduct contributing to any financial restatements or irregularities,
or violates a non-competition, non-solicitation, non-disparagement or
non-disclosure covenant or agreement with the Company or any Affiliate, as
determined by the Committee. In such event, the Participant will forfeit any
compensation, gain or other value realized thereafter on the vesting or exercise
of the Option, the sale or other transfer of the Option, or the sale of shares
of Class A Common Stock acquired in respect of the Option, and must promptly
repay such amounts to the Company. If the Participant receives any amount in
excess of what the Participant should have received under the terms of the
Option for any reason (including without limitation by reason of a financial
restatement, mistake in calculations or other administrative error), all as
determined by the Committee, then the Participant shall be required to promptly
repay any such excess amount to the Company. To the extent required by
applicable law and/or the rules and regulations of NASDAQ or any other
securities exchange or inter-dealer quotation system on which the Class A Common
Stock is listed or quoted, or if so required pursuant to a written policy
adopted by the Company, the Option shall be subject (including on a retroactive
basis) to clawback, forfeiture or similar requirements (and such requirements
shall be deemed incorporated by reference into this Agreement).

 

9.             Restrictive Covenants. In the event that the Participant violates
any restrictive covenants applicable to the Participant, in addition to any
other remedy which may be available at law or in equity, the Option shall be
forfeited effective as of the date on which such violation first occurs, unless
otherwise determined by the Committee. The foregoing rights and remedies are in
addition to any other rights and remedies that may be available to the Company
and shall not prevent (and the Participant shall not assert that they shall
prevent) the Company from bringing one or more actions in any applicable
jurisdiction to recover damages as a result of the Participant’s breach of such
restrictive covenants.

 

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2Tax Witholding provision modified, as needed, to the extent that Participant is
classified as an independent contractor to the Company.

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10.           Miscellaneous.

 

(a)                Transferability. The Option may not be assigned, alienated,
pledged, attached, sold or otherwise transferred or encumbered (a “Transfer”) by
the Participant other than by will or by the laws of descent and distribution,
pursuant to a qualified domestic relations order or as otherwise permitted under
Section 15(b) of the Plan. Any attempted Transfer of the Option contrary to the
provisions hereof, and the levy of any execution, attachment or similar process
upon the Option, shall be null and void and without effect.

 

(b)               Waiver. Any right of the Company contained in this Agreement
may be waived in writing by the Committee. No waiver of any right hereunder by
any party shall operate as a waiver of any other right, or as a waiver of the
same right with respect to any subsequent occasion for its exercise, or as a
waiver of any right to damages. No waiver by any party of any breach of this
Agreement shall be held to constitute a waiver of any other breach or a waiver
of the continuation of the same breach.

 

(c)                Section 409A. The Option is not intended to be subject to
Section 409A of the Code. Notwithstanding the foregoing or any provision of the
Plan or this Agreement, if any provision of the Plan or this Agreement
contravenes Section 409A of the Code or could cause the Participant to incur any
tax, interest or penalties under Section 409A of the Code, the Committee may, in
its sole discretion and without the Participant’s consent, modify such provision
to (i) comply with, or avoid being subject to, Section 409A of the Code, or to
avoid the incurrence of taxes, interest and penalties under Section 409A of the
Code, and/or (ii) maintain, to the maximum extent practicable, the original
intent and economic benefit to the Participant of the applicable provision
without materially increasing the cost to the Company or contravening the
provisions of Section 409A of the Code. This Section 10(c) does not create an
obligation on the part of the Company to modify the Plan or this Agreement and
does not guarantee that the Option or the Option Shares will not be subject to
interest and penalties under Section 409A.

 

(d)               Notices. Any notices provided for in this Agreement or the
Plan shall be in writing and shall be deemed sufficiently given if either hand
delivered or if sent by fax, pdf/email or overnight courier, or by postage paid
first class mail. Notices sent by mail shall be deemed received three (3)
business days after mailing but in no event later than the date of actual
receipt. Notices shall be directed, if to the Participant, at the Participant’s
address indicated by the Company’s records, or if to the Company, to the
attention of the Chief Financial Officer of the Company at the Company’s
principal executive office.

 

(e)                Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, and each other provision of this
Agreement shall be severable and enforceable to the extent permitted by law.

 

(f)                No Rights to Employment or Service. Nothing contained in this
Agreement shall be construed as giving the Participant any right to be retained,
in any position, as an employee, consultant or director of the Company or its
Affiliates or shall interfere with or restrict in any way the rights of the
Company or its Affiliates, which are hereby expressly reserved, to remove,
terminate or discharge the Participant at any time for any reason whatsoever.

 

(g)                Fractional Shares. In lieu of issuing a fraction of a share
of Class A Common Stock resulting from any exercise of the Option or an
adjustment of the Option pursuant to Section 12 of the Plan or otherwise, the
Company shall be entitled to pay to the Participant an amount in cash equal to
the Fair Market Value of such fractional share.

 

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(h)               Beneficiary. The Participant may file with the Committee a
written designation of a beneficiary on such form as may be prescribed by the
Committee and may, from time to time, amend or revoke such designation.

 

(i)                 Successors. The terms of this Agreement shall be binding
upon and inure to the benefit of the Company and its successors and assigns, and
of the Participant and the beneficiaries, executors, administrators, heirs and
successors of the Participant.

 

(j)                 Entire Agreement. This Agreement and the Plan contain the
entire agreement and understanding of the parties hereto with respect to the
subject matter contained herein and supersede all prior communications,
representations and negotiations in respect thereto. No change, modification or
waiver of any provision of this Agreement shall be valid unless the same be in
writing and signed by the parties hereto, except for any changes permitted
without consent under Section 12 or 14 of the Plan.

 

(k)               Governing Law and Venue. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Delaware, without regard
to principles of conflicts of laws thereof, or principles of conflicts of laws
of any other jurisdiction which could cause the application of the laws of any
jurisdiction other than the State of Delaware.

 

(i)                 Dispute Resolution; Consent to Jurisdiction. All disputes
between or among any Persons arising out of or in any way connected with the
Plan, this Agreement or the Option shall be solely and finally settled by the
Committee, acting in good faith, the determination of which shall be final. Any
matters not covered by the preceding sentence shall be solely and finally
settled in accordance with the Plan, and the Participant and the Company consent
to the personal jurisdiction of the United States Federal and state courts
sitting in Wilmington, Delaware as the exclusive jurisdiction with respect to
matters arising out of or related to the enforcement of the Committee’s
determinations and resolution of matters, if any, related to the Plan or this
Agreement not required to be resolved by the Committee. Each such Person hereby
irrevocably consents to the service of process of any of the aforementioned
courts in any such suit, action or proceeding by the mailing of copies thereof
by registered or certified mail, postage prepaid, to the last known address of
such Person, such service to become effective ten (10) days after such mailing.

 

(ii)               Waiver of Jury Trial. Each party hereto hereby waives, to the
fullest extent permitted by applicable law, any right it may have to a trial by
jury in any legal proceeding directly or indirectly arising out of or relating
to this Agreement or the transactions contemplated (whether based on contract,
tort or any other theory). Each party hereto (A) certifies that no
representative, agent or attorney of any other party has represented, expressly
or otherwise, that such other party would not, in the event of litigation, seek
to enforce the foregoing waiver and (B) acknowledges that it and the other
parties hereto have been induced to enter into this Agreement by, among other
things, the mutual waivers and certifications in this section.

 

(l)                 Headings; Gender. The headings of the Sections hereof are
provided for convenience only and are not to serve as a basis for interpretation
or construction, and shall not constitute a part, of this Agreement. Masculine
pronouns and other words of masculine gender shall refer to both men and women
as appropriate.

 

(m)             Counterparts. This Agreement may be executed in one or more
counterparts (including via facsimile and electronic image scan (pdf)), each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument and shall become effective when one or
more counterparts have been signed by each of the parties and delivered to the
other parties.

 

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(n)               Electronic Signature and Delivery. This Agreement may be
accepted by return signature or by electronic confirmation. By accepting this
Agreement, the Participant consents to the electronic delivery of prospectuses,
annual reports and other information required to be delivered by U.S. Securities
and Exchange Commission rules (which consent may be revoked in writing by the
Participant at any time upon three (3) business days’ notice to the Company, in
which case subsequent prospectuses, annual reports and other information will be
delivered in hard copy to the Participant).

 

(o)       Electronic Participation in Plan. The Company may, in its sole
discretion, decide to deliver any documents related to current or future
participation in the Plan by electronic means. The Participant hereby consents
to receive such documents by electronic delivery and agrees 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.

 

 

 

 

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IN WITNESS WHEREOF, this Agreement has been executed by the Company and the
Participant as of the day first written above.

 

  VTV THERAPEUTICS INC.         By:       Name:     Title:

 

 

 

 

                [PARTICIPANT]      

 

 

 

 

 

 

 

 

[Signature Page to [last name] option agreement]