Exhibit 10.2

 

GEMPHIRE THERAPEUTICS INC.

INDUCEMENT PLAN

 

OPTION GRANT NOTICE

 

Gemphire Therapeutics Inc. (the “Company”), pursuant to its Inducement Plan (the
“Plan”), hereby grants to Optionholder an option to purchase the number of
shares of the Company’s Common Stock set forth below. This option is subject to
all of the terms and conditions as set forth herein and in the Option Agreement,
the Plan, and the Notice of Exercise, all of which are attached hereto and
incorporated herein in their entirety.

 

 

Optionholder:

 

 

Date of Grant:

 

 

Vesting Commencement Date:

 

 

Number of Shares Subject to Option:

 

 

Exercise Price (Per Share):

$

 

Total Exercise Price:

$

 

Expiration Date:

 

 

Type of Grant:

Nonstatutory Stock Option

 

 

Vesting Schedule:

                of the shares covered by the option will vest and become
exercisable on                      (                      after the Vesting
Commencement Date); the balance of the shares vest and become exercisable in a
series of             successive equal monthly installments measured from the
first anniversary of the Vesting Commencement Date provided your Continuous
Service has not been terminated or interrupted during the period preceding such
vesting date.

 

 

Exercise Schedule:

o       Same as Vesting Schedule

 

 

Payment:

By one or a combination of the following items (described in the Option
Agreement):

 

 

 

o       By cash or check

 

o       Pursuant to a Regulation T Program if the Shares are publicly traded

 

o       By delivery of already-owned shares if the Shares are publicly traded

 

o       Subject to the Company’s consent at the time of exercise, by a “net
exercise” arrangement

 

Additional Terms/Acknowledgements: The undersigned Optionholder acknowledges
receipt of, and understands and agrees to, this Option Grant Notice, the Option
Agreement, and the Plan. Optionholder further acknowledges that as of the Date
of Grant, this Option Grant Notice, the Option Agreement, and the Plan set forth
the entire understanding between Optionholder and the Company regarding the
acquisition of stock in the Company and supersede all prior oral and written
agreements on that subject with the exception of (i) options previously granted
and delivered to Optionholder by the Company, and (ii) the following agreements
only:

 

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OTHER AGREEMENTS:

 

GEMPHIRE THERAPEUTICS INC.

 

OPTIONHOLDER:

 

 

 

By:

 

 

 

 

Signature

 

Signature

Title:

 

Date:

Date:

 

 

 

ATTACHMENTS SENT OUT VIA E-MAIL: Option Agreement, Inducement Plan, and Notice
of Exercise

 

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GEMPHIRE THERAPEUTICS INC.

INDUCEMENT PLAN

 

OPTION AGREEMENT

(NONSTATUTORY STOCK OPTION)

 

Pursuant to your Option Grant Notice (“Grant Notice”) and this Option Agreement,
Gemphire Therapeutics Inc. (the “Company”) has granted you an option under its
Inducement Plan (the “Plan”) to purchase the number of shares of the Company’s
Common Stock indicated in your Grant Notice at the exercise price indicated in
your Grant Notice. Defined terms not explicitly defined in this Option Agreement
but defined in the Plan shall have the same definitions as in the Plan.

 

The details of your option are as follows:

 

1.                          VESTING. Subject to the limitations contained
herein, your option will vest as provided in your Grant Notice, provided that
vesting will cease upon the termination of your Continuous Service.

 

2.                          NUMBER OF SHARES AND EXERCISE PRICE. The number of
shares of Common Stock subject to your option and your exercise price per share
referenced in your Grant Notice may be adjusted from time to time for
Capitalization Adjustments.

 

3.                          EXERCISE RESTRICTION FOR NON-EXEMPT EMPLOYEES. In
the event that you are an Employee eligible for overtime compensation under the
Fair Labor Standards Act of 1938, as amended (i.e., a “Non-Exempt Employee”),
and except as otherwise provided in the Plan, you may not exercise your option
until you have completed at least six (6) months of Continuous Service measured
from the Date of Grant specified in your Grant Notice, notwithstanding any other
provision of your option.

 

4.                          METHOD OF PAYMENT. Payment of the exercise price is
due in full upon exercise of all or any part of your option. You may elect to
make payment of the exercise price in cash or by check or in one or more of the
following manners:

 

(a)         Provided that at the time of exercise the Common Stock is publicly
traded, pursuant to a program developed under Regulation T as promulgated by the
Federal Reserve Board that, prior to the issuance of Common Stock, results in
either the receipt of cash (or check) by the Company or the receipt of
irrevocable instructions to pay the aggregate exercise price to the Company from
the sales proceeds.

 

(b)         Provided that at the time of exercise the Common Stock is publicly
traded, by delivery to the Company (either by actual delivery or attestation) of
already-owned shares of Common Stock that are owned free and clear of any liens,
claims, encumbrances or security interests, and that are valued at Fair Market
Value on the date of exercise. “Delivery” for these purposes, in the sole
discretion of the Company at the time you exercise your option, shall include
delivery to the Company of your attestation of ownership of such shares of
Common Stock in a form approved by the Company. Notwithstanding the foregoing,
you may not exercise your option by tender to the Company of Common Stock to the
extent such tender would violate the provisions of any law, regulation or
agreement restricting the redemption of the Company’s stock.

 

(c)          Subject to the consent of the Company at the time of exercise, by a
“net exercise” arrangement pursuant to which the Company will reduce the number
of shares of Common Stock issued upon exercise of your option by the largest
whole number of shares with a Fair Market Value that does not exceed the
aggregate exercise price; provided, however, that the Company shall accept a
cash or other payment from you to the extent of any remaining balance of the
aggregate exercise price not satisfied by such reduction in the number of whole
shares to be issued; provided further, however, that shares of Common Stock will
no longer be outstanding under your option and will not be exercisable
thereafter to the extent that (1) shares are used to pay the exercise price
pursuant to the “net exercise,” (2) shares are delivered to you as a result of
such exercise, and (3) shares are withheld to satisfy tax withholding
obligations.

 

5.                          WHOLE SHARES. You may exercise your option only for
whole shares of Common Stock.

 

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6.                          SECURITIES LAW COMPLIANCE. Notwithstanding anything
to the contrary contained herein, you may not exercise your option unless the
shares of Common Stock issuable upon such exercise are then registered under the
Securities Act or, if such shares of Common Stock are not then so registered,
the Company has determined that such exercise and issuance would be exempt from
the registration requirements of the Securities Act. The exercise of your option
also must comply with other applicable laws and regulations governing your
option, and you may not exercise your option if the Company determines that such
exercise would not be in material compliance with such laws and regulations.

 

7.                          TERM. You may not exercise your option before the
commencement or after the expiration of its term. The term of your option
commences on the Date of Grant and expires, subject to the provisions of
Section 5(g) of the Plan, upon the earliest of the following:

 

(a)         immediately upon the termination of your Continuous Service for
Cause;

 

(b)         three months after the termination of your Continuous Service for
any reason other than Cause, Disability or death, provided that if during any
part of such three month period you may not exercise your option solely because
of the condition set forth in the preceding paragraph relating to “Securities
Law Compliance,” your option shall not expire until the earlier of the
Expiration Date or until it shall have been exercisable for an aggregate period
of three months after the termination of your Continuous Service; and if (i) you
are a Non-Exempt Employee, (ii) your Continuous Service terminates within six
months after the Date of Grant specified in your Grant Notice, and (iii) you
have vested in a portion of your option at the time of your termination of
Continuous Service, your option shall not expire until the earlier of (x) the
later of (A) the date that is seven months after the Date of Grant specified in
your Grant Notice or (B) the date that is three months after the termination of
your Continuous Service, or (y) the Expiration Date;

 

(c)          12 months after the termination of your Continuous Service due to
your Disability;

 

(d)         18 months after your death if you die during your Continuous
Service;

 

(e)          the Expiration Date indicated in your Grant Notice; or

 

(f)           the day before the tenth anniversary of the Date of Grant.

 

Notwithstanding the foregoing, if you die during the period provided in
Section 7(b) or 7(c) above, the term of your option shall not expire until the
earlier of 18 months after your death, the Expiration Date indicated in your
Grant Notice, or the day before the tenth anniversary of the Date of Grant.

 

8.                          EXERCISE.

 

(a)         You may exercise the vested portion of your option during its term
by delivering a Notice of Exercise (in a form designated by the Company)
together with the exercise price to the Secretary of the Company, or to such
other person as the Company may designate, during regular business hours,
together with such additional documents as the Company may then require.

 

(b)         By exercising your option you agree that, as a condition to any
exercise of your option, the Company may require you to enter into an
arrangement providing for the payment by you to the Company of any tax
withholding obligation of the Company arising by reason of (i) the exercise of
your option, (ii) the lapse of any substantial risk of forfeiture to which the
shares of Common Stock are subject at the time of exercise, or (iii) the
disposition of shares of Common Stock acquired upon such exercise.

 

9.                          TRANSFERABILITY. Your option is not transferable,
except by will or by the laws of descent and distribution, and is exercisable
during your life only by you. Notwithstanding the foregoing, by delivering
written notice to the Company, in a form satisfactory to the Company, you may
designate a third party who, in the event of your death, shall thereafter be
entitled to exercise your option to the extent the option is exercisable at the
time of your death. In addition, you may transfer your option to a trust if you
are considered to be the sole beneficial owner (determined under Section 671 of
the Code and applicable state law) while the option is held in the trust,
provided that you and the trustee enter into transfer and other agreements
required by the Company.

 

10.                   OPTION NOT A SERVICE CONTRACT. Your option is not an
employment or service contract, and nothing in your option shall be deemed to
create in any way whatsoever any obligation on your part to continue in the
employ

 

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of the Company or an Affiliate, or of the Company or an Affiliate to continue
your employment. In addition, nothing in your option shall obligate the Company
or an Affiliate, their respective stockholders, Boards of Directors, Officers or
Employees to continue any relationship that you might have as a Director or
Consultant for the Company or an Affiliate.

 

11.                   WITHHOLDING OBLIGATIONS

 

(a)         At the time you exercise your option, in whole or in part, or at any
time thereafter as requested by the Company, you hereby authorize withholding
from payroll and any other amounts payable to you, and otherwise agree to make
adequate provision for (including by means of a “cashless exercise” pursuant to
a program developed under Regulation T as promulgated by the Federal Reserve
Board to the extent permitted by the Company), any sums required to satisfy the
federal, state, local and foreign tax withholding obligations of the Company or
an Affiliate, if any, which arise in connection with the exercise of your
option.

 

(b)         Upon your request and subject to approval by the Company, in its
sole discretion, and compliance with any applicable legal conditions or
restrictions, the Company may withhold from fully vested shares of Common Stock
otherwise issuable to you upon the exercise of your option a number of whole
shares of Common Stock having a Fair Market Value, determined by the Company as
of the date of exercise, not in excess of the minimum amount required to be
withheld by law (or such lower amount as may be necessary to avoid
classification of your option as a liability for financial accounting purposes).
Any adverse consequences to you arising in connection with such share
withholding procedure shall be your sole responsibility.

 

(c)          You may not exercise your option unless the tax withholding
obligations of the Company and/or any Affiliate are satisfied. Accordingly, you
may not be able to exercise your option when desired even though your option is
vested, and the Company shall have no obligation to issue a certificate for such
shares of Common Stock or release such shares of Common Stock from any escrow
provided for herein unless such obligations are satisfied.

 

12.                   TAX CONSEQUENCES. You hereby agree that the Company does
not have a duty to design or administer the Plan or its other compensation
programs in a manner that minimizes your tax liabilities. You shall not make any
claim against the Company, or any of its Officers, Directors, Employees or
Affiliates related to tax liabilities arising from your option or your other
compensation. In particular, you acknowledge that this option is exempt from
Section 409A of the Code only if the exercise price per share specified in the
Grant Notice is at least equal to the “fair market value” per share of the
Common Stock on the Date of Grant, there is no impermissible deferral of
compensation associated with the option, and any other requirements for such
exemption are satisfied.

 

13.                   NOTICES. Any notices provided for in your option or the
Plan shall be given in writing and shall be deemed effectively given upon
receipt or, in the case of notices delivered by mail by the Company to you, five
(5) days after deposit in the United States mail, postage prepaid, addressed to
you at the last address you provided to the Company.

 

14.                   GOVERNING PLAN DOCUMENT. Your option is subject to all the
provisions of the Plan, the provisions of which are hereby made a part of your
option, and is further subject to all interpretations, amendments, rules and
regulations, which may from time to time be promulgated and adopted pursuant to
the Plan. In the event of any conflict between the provisions of your option and
those of the Plan, the provisions of the Plan shall control.

 

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Gemphire Therapeutics Inc.

[Address]

 

Date of Exercise:

 

Ladies and Gentlemen:

 

This constitutes notice under my stock option that I elect to purchase the
number of shares for the price set forth below.

 

Type of option:

 

Nonstatutory

 

 

 

Stock option dated:

 

 

 

 

 

Number of shares as to which option is exercised:

 

 

 

 

 

Shares to be issued in name of:

 

 

 

 

 

Total exercise price:

 

$

 

 

 

 

Cash payment delivered herewith:

 

$

 

 

 

 

Regulation T Program (cashless exercise):

 

$

 

 

 

 

Value of             shares of Gemphire Therapeutics Inc. Common Stock delivered
herewith(1):

 

$

 

 

 

 

Value of             shares of Gemphire Therapeutics Inc. Common Stock to be
retained by Gemphire Therapeutics Inc. pursuant to net exercise(2):

 

$

 

 

By this exercise, I agree (i) to provide such additional documents as you may
require pursuant to the terms of the Gemphire Therapeutics Inc. Inducement Plan
and (ii) to provide for the payment by me to you (in the manner designated by
you) of your withholding obligation, if any, relating to the exercise of this
option.

 

 

 

Very truly yours,

 

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(1)         Shares must meet the public trading requirements set forth in the
option. Shares must be valued on the date of exercise in accordance with the
terms of the Plan and the option being exercised, and must be owned free and
clear of any liens, claims, encumbrances or security interests. Certificates
must be endorsed or accompanied by an executed assignment separate from
certificate.

 

(2)         The Company must have established net exercise procedures at the
time of exercise in order to utilize this payment method and must expressly
consent to your use of net exercise at the time of exercise.

 

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