Exhibit-10.2

 

NPS Pharmaceuticals Inc.

Stock Option Grant Agreement

 

Optionee Name:

[[FIRSTNAME]] [[LASTNAME]]

Grant Number:

[[GRANTNUMBER]]

Date of Grant:

[[GRANTDATE]]

Plan:

[[STOCKOPTIONPLANNAME]]

Type:

[[GRANTTYPE]]

Total Number of Shares:

[[SHARESGRANTED]]

Exercise Price:

[[GRANTPRICE]]

Expiration Date:

[[GRANTEXPIRATIONDATE]]

 

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

 

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

 

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

 

 

NPS PHARMACEUTICALS, INC.

 

OPTIONEE:

 

 

 

 

 

 

 

 

 

By:

 

 

[NAME] [TITLE]

 

[[FIRSTNAME]] [[LASTNAME]]

 

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TERMS AND CONDITIONS

 

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

 

2.                                      Purchase Price and Payment.

 

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

 

2.2                               Payment of the Exercise Price per Optioned
Share shall be paid, to the extent permitted by applicable statutes and
regulations, either (a) in cash, or (b) by delivery of already-owned shares of
Common Stock (which has been held by Optionee for at least six months), or a
combination of cash and already-owned Common Stock, or (c) according to a
deferred payment or other arrangement as agreed to between the Optionee and the
Company, or (d) pursuant to a broker assisted exercise same-day sales program,
or (e) a combination of (a), (b), (c), and/or (d) above. With regard to delivery
of shares of Common Stock under (b) above, such shares of Common Stock (i) shall
be valued for determination of the payment of the Exercise Price of such
delivered shares of Common Stock at the shares’ fair market value on the Date of
Exercise, and (ii) must be owned free and clear of any liens, claims,
encumbrances, or security interests on such date.

 

2.3                               In the case of any deferred payment
arrangement, interest shall be payable at least annually, and shall be charged
at the minimum rate of interest necessary to avoid the treatment as interest
under any applicable provisions of the Code of any amounts other than amounts
stated to be interest under the deferred payment arrangement.

 

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

 

3.                                      Vesting and Term of Option.

 

3.1                               The Optioned Shares shall be exercisable
during the term of this Option Agreement but only on the terms hereof and the
Plan, and pursuant to the following vesting and exercise schedule:

 

3.1.1                     Twenty-five (25%) percent of the Optioned Shares shall
vest and become exercisable on the first anniversary of the Date of Grant and
6.25% of the Optioned Shares shall vest and become exercisable every three
months thereafter (e.g., if the Optionee’s Date of Grant was January 15, then
25% of the Optioned Shares would vest and become exercisable on January 15 of
the following year, and 6.25% on each April 

 

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15, July 15, and October 15 until the Optioned Shares are fully vested and
exercisable), provided that the Optionee was, during the entire period prior to
such vesting date, continuously employed as an employee of the Company or
otherwise providing services as a consultant or director, or affiliated in such
other position qualifying for continued vesting under the Plan (“Continuous
Service”).

 

3.1.2                     Notwithstanding anything herein to the contrary, in
the event the Participant’s Continuous Service terminates due to the
Participant’s death or permanent or total disability, the unvested Optioned
Shares shall vest and become exercisable on the Participant’s date of death or
permanent or total disability.

 

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

 

4.                                      Termination of Employment or
Relationship as a Director or Consultant. In the event an Optionee’s Continuous
Service (other than upon the Optionee’s death or disability) shall terminate
prior to the Expiration Date, then this Option shall expire ninety days after
the termination of such Continuous Service for any reason, or for no reason,
unless:

 

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

 

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

 

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

 

This Option may be exercised following termination of Continuous Service only as
to that number of Optioned Shares as to which it was exercisable on the date of
termination of Continuous Service under the provisions of this Option Agreement.

 

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5.                                      Transferability.

 

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

 

5.2                               Non-Qualified Stock Option (“NQSO”). In the
case of a NQSO, this Option is not transferable, except as follows:

 

5.2.1                     By will or by the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Code or Title
I of the Employee Retirement Income Security Act, or the rules thereunder (a
“QDRO”), and shall be exercisable during the lifetime Optionee only by such
Optionee or any transferee pursuant to a QDRO; and

 

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

 

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

 

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

 

7.                                     Rights of Stockholder. No rights as a
stockholder are created or conferred hereby until the date of issue of a stock
certificate for the shares of the Optioned Shares covered by a valid exercise of
this Option.

 

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

 

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9.                                      Method of Exercising Option.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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