Exhibit 10.23

 

OPHTHOTECH CORPORATION

 

Nonstatutory Stock Option Agreement

 

1.                                                    Grant of Option.

 

This agreement evidences the grant by Ophthotech Corporation, a Delaware
corporation (the “Company”), on October 3, 2014 (the “Grant Date”) to Todd N.
Smith, an employee of the Company (the “Participant”), of an option to purchase,
in whole or in part, on the terms provided herein, a total of 150,000 shares
(the “Shares”) of common stock, $0.001 par value per share, of the Company
(“Common Stock”) at $38.41 per Share.  Unless earlier terminated, this option
shall expire at 5:00 p.m., Eastern time, on October 2, 2024 (the “Final Exercise
Date”).

 

The option evidenced by this agreement was granted to the Participant pursuant
to the inducement grant exception under NASDAQ Stock Market Rule 5635(c)(4), and
not pursuant to the Company’s 2013 Stock Incentive Plan (the “Plan”) or any
equity incentive plan of the Company, as an inducement that is material to the
Participant’s employment with the Company.

 

It is intended that the option evidenced by this agreement shall not be an
incentive stock option as defined in Section 422 of the Internal Revenue Code of
1986, as amended, and any regulations promulgated thereunder (the “Code”).
 Except as otherwise indicated by the context, the term “Participant”, as used
in this option, shall be deemed to include any person who acquires the right to
exercise this option validly under its terms.

 

2.                                                    Vesting Schedule.

 

Except as otherwise provided herein, this option will become exercisable
(“vest”) as to 25% of the original number of Shares on one-year anniversary of
the Grant Date and as to an additional 2.0833% of the original number of Shares
at the end of each successive month following the one-year anniversary of the
Grant Date until the fourth anniversary of the Grant Date.

 

The right of exercise shall be cumulative so that to the extent the option is
not exercised in any period to the maximum extent permissible it shall continue
to be exercisable, in whole or in part, with respect to all Shares for which it
is vested until the earlier of the Final Exercise Date or the termination of
this option under Section 3 hereof.

 

3.                                                    Exercise of Option.

 

(a)                                               Form of Exercise.  Each
election to exercise this option shall be in writing, signed by the Participant
(or such electronic notice as is approved by the Company), and received by the
Company at its principal office, accompanied by this agreement and payment in
full as follows:

 

(1)                                 in cash or by check, payable to the order of
the Company;

 

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(2)                                 by (i) delivery of an irrevocable and
unconditional undertaking by a creditworthy broker to deliver promptly to the
Company sufficient funds to pay the exercise price and any required tax
withholding or (ii) delivery by the Participant to the Company of a copy of
irrevocable and unconditional instructions to a creditworthy broker to deliver
promptly to the Company cash or a check sufficient to pay the exercise price and
any required tax withholding;

 

(3)                                 to the extent approved by the Board of
Directors of the Company (the “Board”), in its sole discretion, by delivery
(either by actual delivery or attestation) of shares of Common Stock owned by
the Participant valued at their fair market value per share as determined by (or
in a manner approved by) the Board (the “Fair Market Value”), provided (i) such
method of payment is then permitted under applicable law, (ii) such Common
Stock, if acquired directly from the Company, was owned by the Participant for
such minimum period of time, if any, as may be established by the Board in its
discretion and (iii) such Common Stock is not subject to any repurchase,
forfeiture, unfulfilled vesting or other similar requirements;

 

(4)                                 to the extent approved by the Board, in its
sole discretion, by delivery of a notice of “net exercise” to the Company, as a
result of which the Participant would receive (i) the number of shares
underlying the portion of this being exercised, less (ii) such number of shares
as is equal to (A) the aggregate exercise price for the portion of this option
being exercised divided by (B) the Fair Market Value on the date of exercise;

 

(5)                                 to the extent permitted by applicable law or
approved by the Board, in its sole discretion, by payment of such other lawful
consideration as the Board may determine; or

 

(6)                                 by any combination of the above permitted
forms of payment.

 

The Participant may purchase less than the number of shares covered hereby,
provided that no partial exercise of this option may be for any fractional share
or for fewer than ten whole shares.

 

(b)                                               Continuous Relationship with
the Company Required.  Except as otherwise provided in this Section 3, this
option may not be exercised unless the Participant, at the time he exercises
this option, is, and has been at all times since the Grant Date, an employee,
officer or a director of, or consultant or advisor to, the Company or any other
entity the employees, officers, directors, consultants, or advisors of which are
eligible to receive option grants under the Plan (an “Eligible Participant”).

 

(c)                                                Termination of Relationship
with the Company.  If the Participant ceases to be an Eligible Participant for
any reason, then, except as provided in paragraphs (d) and (e) below, the right
to exercise this option shall terminate three months after such cessation (but
in no event after the Final Exercise Date), provided that this option shall be
exercisable only to the extent that the Participant was entitled to exercise
this option on the date of such cessation.  Notwithstanding the foregoing, if
the Participant, prior to the Final Exercise Date, violates the non-competition
or confidentiality provisions of any employment contract, confidentiality and
nondisclosure agreement or other agreement between the Participant and the
Company, the right

 

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to exercise this option shall terminate immediately upon written notice to the
Participant from the Company describing such violation.

 

(d)                                               Exercise Period Upon Death or
Disability.  If the Participant dies or becomes disabled (within the meaning of
Section 22(e)(3) of the Code) prior to the Final Exercise Date while he is an
Eligible Participant and the Company has not terminated such relationship for
“cause” as specified in paragraph (e) below, this option shall be exercisable,
within the period of one year following the date of death or disability of the
Participant, by the Participant (or in the case of death by an authorized
transferee), provided that this option shall be exercisable only to the extent
that this option was exercisable by the Participant on the date of his death or
disability, and further provided that this option shall not be exercisable after
the Final Exercise Date.

 

(e)                                                Termination for Cause.  If
the Participant, prior to the Final Exercise Date, is terminated by the Company
for Cause (as defined in the offer letter, dated as of September 20, 2014,
between the Participant and the Company, or any successor agreement thereto (the
“Offer Letter”)), the right to exercise this option shall terminate immediately
upon the effective date of such termination.

 

(f)                                                 Offer Letter.
 Notwithstanding anything to the contrary in this Section 3 or in Section 7,
this option shall be subject to any applicable vesting terms set forth in the
Offer Letter.

 

4.                                                    Agreement in Connection
with Public Offering.

 

The Participant agrees, in connection with an underwritten public offering of
the Common Stock pursuant to a registration statement under the Securities Act,
(i) not to (a) offer, pledge, announce the intention to sell, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, or otherwise transfer
or dispose of, directly or indirectly, any shares of Common Stock or any other
securities of the Company or (b) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences of ownership of
shares of Common Stock or other securities of the Company, whether any
transaction described in clause (a) or (b) is to be settled by delivery of
securities, in cash or otherwise, during the period beginning on the date of the
filing of such registration statement with the Securities and Exchange
Commission and ending 180 days after the date of the final prospectus relating
to the offering (plus up to an additional 34 days to the extent requested by the
managing underwriters for such offering in order to address Rule 2711(f) of the
Financial Industry Regulatory Authority or any similar successor provision), and
(ii) to execute any agreement reflecting clause (i) above as may be requested by
the Company or the managing underwriters at the time of such offering.  The
Company may impose stop-transfer instructions with respect to the shares of
Common Stock or other securities subject to the foregoing restriction until the
end of the “lock-up” period.

 

5.                                                    Withholding.

 

No Shares will be issued pursuant to the exercise of this option unless and
until the Participant pays to the Company, or makes provision satisfactory to
the Company for payment of, any federal, state or local withholding taxes
required by law to be withheld in respect of this

 

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option.  The Participant must satisfy all applicable federal, state, and local
or other income and employment tax withholding obligations before the Company
will deliver stock certificates or otherwise recognize ownership of Common Stock
under this option.  The Company may decide to satisfy the withholding
obligations through additional withholding on salary or wages.  If the Company
elects not to or cannot withhold from other compensation, the Participant must
pay the Company the full amount, if any, required for withholding or have a
broker tender to the Company cash equal to the withholding obligations. Payment
of withholding obligations is due before the Company will issue any shares on
exercise of this option or at the same time as payment of the exercise price,
unless the Company determines otherwise. If approved by the Board, in its sole
discretion, a Participant may satisfy such tax obligations in whole or in part
by delivery (either by actual delivery or attestation) of shares of Common Stock
underlying this option valued at their Fair Market Value; provided, however,
except as otherwise provided by the Board, that the total tax withholding where
stock is being used to satisfy such tax obligations cannot exceed the Company’s
minimum statutory withholding obligations (based on minimum statutory
withholding rates for federal and state tax purposes, including payroll taxes,
that are applicable to such supplemental taxable income). Shares used to satisfy
tax withholding requirements cannot be subject to any forfeiture, unfulfilled
vesting or other similar requirements.

 

6.                                                    Transfer Restrictions.

 

(a)                                               This option may not be sold,
assigned, transferred, pledged or otherwise encumbered by the Participant,
either voluntarily or by operation of law, except by will or the laws of descent
and distribution, and, during the lifetime of the Participant, this option shall
be exercisable only by the Participant.

 

(b)                                               The Participant agrees that he
will not transfer any Shares issued pursuant to the exercise of this option
unless the transferee, as a condition to such transfer, delivers to the Company
a written instrument confirming that such transferee shall be bound by all of
the terms and conditions of Section 4; provided that such a written confirmation
shall not be required with respect to Section 4 after the completion of the
lock-up period in connection with the Company’s underwritten public offering.

 

7.                                                    Adjustments for Changes in
Common Stock and Certain Other Events.

 

(a)                                               Changes in Capitalization.  In
the event of any stock split, reverse stock split, stock dividend,
recapitalization, combination of shares, reclassification of shares, spin-off or
other similar change in capitalization or event, or any dividend or distribution
to holders of Common Stock other than an ordinary cash dividend, the number and
class of securities and exercise price per share of this option shall be
equitably adjusted by the Company in the manner determined by the Board.
 Without limiting the generality of the foregoing, in the event the Company
effects a split of the Common Stock by means of a stock dividend and the
exercise price of and the number of shares subject to this option are adjusted
as of the date of the distribution of the dividend (rather than as of the record
date for such dividend), then the Participant, if he exercises this option
between the record date and the distribution date for such stock dividend, shall
be entitled to receive, on the distribution date, the stock dividend with

 

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respect to the shares of Common Stock acquired upon exercise of this option,
notwithstanding the fact that such shares were not outstanding as of the close
of business on the record date for such stock dividend.

 

(b)                                               Reorganization Events.  A
“Reorganization Event” shall mean:  (a) any merger or consolidation of the
Company with or into another entity as a result of which all of the Common Stock
of the Company is converted into or exchanged for the right to receive cash,
securities or other property or is cancelled, (b) any transfer or disposition of
all of the Common Stock of the Company for cash, securities or other property
pursuant to a share exchange or other transaction or (c) any liquidation or
dissolution of the Company.  In connection with a Reorganization Event, the
Board may take any one or more of the following actions with respect to this
option (or any portion thereof) on such terms as the Board determines: (i)
provide that this option shall be assumed, or substantially equivalent option
shall be substituted, by the acquiring or succeeding corporation (or an
affiliate thereof), (ii) upon written notice to the Participant, provide that
the unexercised portion of this option will terminate immediately prior to the
consummation of such Reorganization Event unless exercised by the Participant
within a specified period following the date of such notice, (iii) provide that
this option shall become exercisable, realizable, or deliverable, or
restrictions applicable to this option shall lapse, in whole or in part prior to
or upon such Reorganization Event, (iv) in the event of a Reorganization Event
under the terms of which holders of Common Stock will receive upon consummation
thereof a cash payment for each share surrendered in the Reorganization Event
(the “Acquisition Price”), make or provide for a cash payment to the Participant
with respect to this option equal to (A) the number of shares of Common Stock
subject to the vested portion of this option (after giving effect to any
acceleration of vesting that occurs upon or immediately prior to such
Reorganization Event) multiplied by (B) the excess, if any, of (I) the
Acquisition Price over (II) the exercise price of this option and any applicable
tax withholdings, in exchange for the termination of this option, (v) provide
that, in connection with a liquidation or dissolution of the Company, this
option shall convert into the right to receive liquidation proceeds (if
applicable, net of the exercise, measurement or purchase price thereof and any
applicable tax withholdings) and (vi) any combination of the foregoing.

 

For purposes of clause (i) above, this option shall be considered assumed if,
following consummation of the Reorganization Event, this option confers the
right to purchase, for each share of Common Stock subject to this option
immediately prior to the consummation of the Reorganization Event, the
consideration (whether cash, securities or other property) received as a result
of the Reorganization Event by holders of Common Stock for each share of Common
Stock held immediately prior to the consummation of the Reorganization Event
(and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding shares of
Common Stock); provided, however, that if the consideration received as a result
of the Reorganization Event is not solely common stock of the acquiring or
succeeding corporation (or an affiliate thereof), the Company may, with the
consent of the acquiring or succeeding corporation, provide for the
consideration to be received upon the exercise of this option to consist solely
of such number of shares of common stock of the acquiring or succeeding
corporation (or an affiliate thereof) that the Board determined to be equivalent
in value (as of the date of such determination or another date specified by the
Board)

 

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to the per share consideration received by holders of outstanding shares of
Common Stock as a result of the Reorganization Event.

 

8.                                                    Miscellaneous.

 

(a)                                               No Right To Employment or
Other Status.  The grant of this option shall not be construed as giving the
Participant the right to continued employment or any other relationship with the
Company.  The Company expressly reserves the right at any time to dismiss or
otherwise terminate its relationship with the Participant free from any
liability or claim hereunder, except as otherwise expressly provided herein or
provided for in the Offer Letter.

 

(b)                                               No Rights As Stockholder.
 Subject to the provisions of this option, the Participant shall not have any
rights as a stockholder with respect to any shares of Common Stock to be
distributed with respect to this option until becoming the record holder of such
shares.

 

(c)                                                Entire Agreement.  This
Agreement, together with the Offer Letter, constitute the entire agreement
between the parties, and supersede all prior agreements and understandings,
relating to the subject matter hereof.

 

(d)                                               Amendment.  Except with
respect to any vesting terms set forth in the Offer Letter, the Board may amend,
modify or terminate this Agreement, including but not limited to, substituting
another option of the same or a different type and changing the date of exercise
or realization.  Notwithstanding the foregoing, the Participant’s consent to
such action shall be required unless (i) the Board determines that the action,
taking into account any related action, would not materially and adversely
affect the Participant, or (ii) the change is permitted under Section 7 and the
Offer Letter.

 

(e)                                                Acceleration.  The Board may
at any time provide that this option shall become immediately exercisable in
whole or in part, free of some or all restrictions or conditions, or otherwise
realizable in whole or in part, as the case may be.

 

(f)                                                 Conditions on Delivery of
Stock.  The Company will not be obligated to deliver any shares of Common Stock
pursuant to this Agreement until (i) all conditions of this Agreement have been
met to the satisfaction of the Company, (ii) in the opinion of the Company’s
counsel, all other legal matters in connection with the issuance and delivery of
such shares have been satisfied, including any applicable securities laws and
regulations and any applicable stock exchange or stock market rules and
regulations, and (iii) the Participant has executed and delivered to the Company
such representations or agreements as the Company may consider appropriate to
satisfy the requirements of any applicable laws, rules or regulations.

 

(g)                                                Administration by Board.  The
Board will administer this Agreement and may construe and interpret the terms
hereof.  Subject to the terms and provisions of the Offer Letter, the Board may
correct any defect, supply any omission or reconcile any inconsistency in this
Agreement in the manner and to the extent it shall deem expedient to carry the
Agreement into effect and it shall be the sole and final judge of such
expediency.  No director or person acting

 

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pursuant to the authority delegated by the Board shall be liable for any action
or determination relating to or under this Agreement made in good faith.

 

(h)                                               Appointment of Committees.  To
the extent permitted by applicable law, the Board may delegate any or all of its
powers hereunder to one or more committees or subcommittees of the Board (a
“Committee”).  All references herein to the “Board” shall mean the Board or a
Committee to the extent that the Board’s powers or authority hereunder have been
delegated to such Committee.

 

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

 

(j)                                                  Governing Law.  This
Agreement shall be governed by and interpreted in accordance with the laws of
the State of Delaware, excluding choice-of-law principles of the law of such
state that would require the application of the laws of a jurisdiction other
than the State of Delaware.

 

(k)                                               Counterparts.  This Agreement
may be executed in one or more counterparts, each of which shall be deemed to be
an original but all of which together will constitute one in the same
instrument.

 

The Company has caused this option to be executed by its duly authorized
officer.

 

 

 

OPHTHOTECH CORPORATION

 

 

 

 

 

 

 

By:

/s/ David Guyer

 

Name:

David Guyer

 

Title:

Chief Executive Officer

 

 

 

 

 

 

 

Employee Name:

/s/ Todd N. Smith

 

Date:

10.9.2014

 

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