Exhibit 10.6

 

INSMED INCORPORATED

 

NON-QUALIFIED STOCK OPTION AGREEMENT

UNDER THE 2013 INCENTIVE PLAN

 

No. of shares subject to Option:                  

 

THIS AGREEMENT dated this                                  , between INSMED
INCORPORATED, a Virginia corporation (the “Company”), and
                             (“Participant”), is made pursuant and subject to
the provisions of the Insmed Incorporated 2013 Incentive Plan, as amended (the
“Plan”), a copy of which has been made available to the Participant.  All terms
used herein that are defined in the Plan have the same meaning given them in the
Plan.

 

If and to the extent that this Agreement conflicts or is inconsistent with the
terms, conditions and provisions of any employment, consulting or similar
services agreement between the Participant and the Company as may be in effect
(the “Service Agreement”), the Service Agreement shall control, and this Award
Agreement shall be deemed to be modified accordingly so long as such
modification is not expressly prohibited by the Plan.

 

1.                                      Grant of Option.  Pursuant to the Plan,
the Company, on                               (the “Date of Grant”), granted to
Participant, subject to the terms and conditions of the Plan and subject further
to the terms and conditions herein set forth, the right and Option to purchase
from the Company all or any part of an aggregate of                 shares of
Common Stock at the Option price of $                  per share, being not less
than the Fair Market Value of such shares on the Date of Grant.  This Option is
intended to be a nonqualified stock option and not an “incentive stock option”
within the meaning of Section 422 of the Code.  This Option is exercisable as
hereinafter provided.

 

2.                                      Terms and Conditions.  This Option is
subject to the following terms and conditions:

 

a.                                      Expiration Date.  This Option shall
expire ten years from the Date of Grant (the “Expiration Date”).

 

b.                                      Exercise of Option.  Except as provided
in paragraphs 3, 4 and 5, this Option shall be exercisable with respect to
twenty-five percent (25%) of the shares of Common Stock subject to this Option
on the first anniversary of the Date of Grant (the “First Anniversary Date”) and
with respect to an additional twelve and a half percent (12.5%) of the shares of
Common Stock subject to this Option on the sixth month anniversary of the First
Anniversary Date and each sixth month anniversary date thereafter through the
fourth anniversary of the Date of Grant. If the foregoing schedule would produce
fractional shares, the number of shares for which the Option becomes exercisable
shall be rounded down to the nearest whole share. Once this Option has become
exercisable in accordance with

 

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the preceding sentence it shall continue to be exercisable until the termination
of Participant’s rights hereunder pursuant to paragraph 3, 4 or 5 or until the
Option has expired pursuant to subparagraph 2(a).  A partial exercise of this
Option shall not affect Participant’s right to exercise this Option with respect
to the remaining shares, subject to the conditions of the Plan and this
Agreement.

 

c.                                       Method of Exercising Option and Payment
for Shares.  This Option shall be exercised by written notice delivered to the
attention of the Company’s Chief Financial Officer at the Company’s principal
office in New Jersey (see attachment A — “Notice of Option Exercise”).  The
exercise date shall be (i) in the case of notice by mail, the date of postmark,
or (ii) if delivered in person, the date of delivery.  Such notice shall be
accompanied by payment of the Option price in full, in cash or cash equivalent
acceptable to the Committee, or such other method as determined by the
Committee, including an irrevocable commitment by a broker to pay over such
amount from a sale of the shares of Common Stock issuable under the Option, the
delivery of previously owned shares of Common Stock or withholding of shares of
Common Stock deliverable upon exercise which, together with any cash or cash
equivalent paid, is not less than the Option price for the number of shares for
which this Option is being exercised.

 

d.                                      Nontransferability.  This Option may not
be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated
by Participant except by will or by the laws of descent and
distribution.  During Participant’s lifetime, this Option may be exercised only
by Participant.

 

e.                                       Agreement with Terms.  Receipt of any
benefits under this Agreement by Participant shall constitute Participant’s
acknowledgement of and agreement with all of the provisions of this Agreement
and of the Plan that are applicable to this Option, and the Company shall
administer this Agreement accordingly.

 

3.                                      Exercise in the Event of Death.  In the
event Participant dies before the expiration of this Option pursuant to
subparagraph 2(a), this Option shall be exercisable with respect to all or part
of the shares of Common Stock that Participant was entitled to purchase under
subparagraph 2(b) on the date of Participant’s death.  In that event, this
Option may be exercised, to the extent exercisable under subparagraph 2(b), by
Participant’s estate or by the person or persons to whom his rights under this
Option shall pass by will or the laws of descent and
distribution.  Participant’s estate or such persons may exercise this Option
within one (1) year of Participant’s death or during the remainder of the period
preceding the Expiration Date, whichever is shorter.

 

4.                                      Exercise in the Event of Permanent and
Total Disability.  In the event Participant becomes permanently and totally
disabled within the meaning of Section 22(e)(3) of

 

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the Code (“Permanently and Totally Disabled”) before the expiration of this
Option pursuant to subparagraph 2(a), this Option shall be exercisable with
respect to all or part of the shares of Common Stock that Participant was
entitled to purchase under subparagraph 2(b) on the date he ceases to be
employed by the Company and its Affiliates as a result of his becoming
Permanently and Totally Disabled.  In that event, Participant may exercise this
Option, to the extent exercisable under subparagraph 2(b), within one (1) year
of the date he ceases to be employed by the Company and its Affiliates as a
result of his becoming Permanently and Totally Disabled or during the period
preceding the Expiration Date, whichever is shorter.

 

5.                                      Exercise After Termination of
Employment.  Except as provided in paragraphs 3 and 4 hereof, if the Participant
ceases to be employed by the Company and its Affiliates prior to the Expiration
Date, this Option shall be exercisable for all or part of the number of shares
that the Participant was entitled to purchase under subparagraph 2(b), as well
as set forth under any Service Agreement, on the date of Participant’s
termination of employment. In that event, Participant may exercise this Option,
to the extent exercisable under subparagraph 2(b) and/or under any Service
Agreement, during the remainder of the period preceding the Expiration Date or
until the date that is three (3) months (or such other period of time provided
under any Service Agreement) after the date he ceases to be employed by the
Company and its Affiliates, whichever is shorter.

 

6.                                      Notice.  Any notice or other
communication given pursuant to this Agreement shall be in writing and shall be
personally delivered or mailed by United States registered or certified mail,
postage prepaid, return receipt requested, to the Company at its principal place
of business or to the Participant at the address on the payroll records of the
Company or, in either case, at such other address as one party may subsequently
furnish to the other party in writing.  Additionally, if such notice or
communication is by the Company to the Participant, the Company may provide such
notice electronically (including via email).  Any such notice shall be deemed to
have been given (a) on the date of postmark, in the case of notice by mail, or
(b) on the date of delivery, if delivered in person or electronically.

 

7.                                      Fractional Shares.  Fractional shares
shall not be issuable hereunder, and when any provision hereof may entitle
Participant to a fractional share such fraction shall be disregarded.

 

8.                                      Tax Withholding.  The Grantee shall, not
later than the date as of which the receipt of this Award becomes a taxable
event for Federal income tax purposes, pay to the Company or make arrangements
satisfactory to the Administrator for payment of any Federal, state, local or
other taxes required by law to be withheld on account of such taxable event.

 

9.                                      No Right to Continued Employment or
Other Service.  Nothing in the Plan or this Agreement shall interfere with or
limit in any way the right of the Company, its Subsidiaries and/or its
Affiliates to terminate the Participant’s employment at any time or for any
reason in accordance with the Company’s Bylaws and governing law, nor shall any
terms of the Plan or this Agreement confer upon Participant any right to
continue his or her employment for any specified period of time.  Neither this
Agreement nor any benefits arising under the Plan shall constitute an employment
contract with the Company, any Subsidiary and/or its Affiliates.

 

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If Participant is not an employee, nothing in the Plan or this Agreement shall
interfere with or limit in any way the right of the Company, its Subsidiaries
and/or its Affiliates to terminate the Grantee’s service, (i) if a member of the
Board, on the Board at any time or for any reason in accordance with the
Company’s Bylaws and governing law, or (ii) if a non-employee consultant or
advisor, in accordance with the terms of the contract with such consultant or
advisor.  In no event shall any of the terms of the Plan or this Agreement
itself confer upon Grantee any right to continue his or her service for any
specified period of time.

 

10.                               Adjustments Upon Certain Unusual or
Nonrecurring Events or Other Events.  Upon certain unusual or nonrecurring
events, or other events, the terms of this Option shall be adjusted by the
Administrator pursuant to Section 15 of the Plan.

 

11.                               Governing Law.  This Agreement shall be
governed by the laws of the Commonwealth of Virginia.

 

12.                               Conflicts.  In the event of any conflict
between the provisions of the Plan as in effect on the date hereof and the
provisions of this Agreement, the provisions of the Plan shall govern.  All
references herein to the Plan shall mean the Plan as in effect on the date
hereof.

 

13.                               Participant Bound by Plan.  Participant hereby
acknowledges receipt of a copy of the Plan and agrees to be bound by all the
terms and provisions thereof.

 

14.                               Binding Effect.  Subject to the limitations
stated above and in the Plan, this Agreement shall be binding upon and inure to
the benefit of the legatees, distributees, and personal representatives of
Participant and the successors of the Company.

 

[Signatures on Following Page]

 

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IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by a duly
authorized officer, and Participant has affixed his signature hereto.

 

 

INSMED INCORPORATED

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

[NAME OF PARTICIPANT]

 

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Attachment A

 

Chief Financial Officer

Insmed Incorporated

9 Deer Park Drive, Suite C

Monmouth Junction, NJ 08852-1919

 

Notice Of Option Exercise: Cash Payment

 

This letter is notice of my decision to exercise the option that was granted to
me on                        .  The exercise will be effective on
                              .  I am exercising the option for
                            shares of Common Stock.  Enclosed is my check for $
                   , which is the aggregate option price for the number of
shares for which I am exercising the option.

 

Please issue the certificate according to the following instructions:

 

Name/entity stock certificate issued to:

(If entity is a trust, please include date trust was established.)

 

Address to send stock certificate:

 

 

 

 

Sincerely,

 

 

 

 

 

 

 

 

 

 

 

 

Accepted by:

 

 

 

 

 

 

Date:

 

 

 

 

Note:  The date of exercise cannot be earlier than the date of delivery of this
notice or the postmark, if the notice is mailed.

 

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