EXHIBIT 10.3

 

CURIS, INC.

 

Nonstatutory Stock Option Agreement

Granted Under 2000 Stock Incentive Plan

 

This Nonstatutory Stock Option Agreement certifies that, pursuant to the Curis,
Inc. 2000 Stock Incentive Plan (the “Plan”), the Board has granted an option to
purchase shares of Common Stock of Curis, Inc., as stated below. Capitalized
terms used herein and not defined shall have the meanings ascribed to such terms
in the Plan.

 

Summary of Terms:

    

Participant:

  

[Name]

Circle One:

  

Employee Consultant Director

Participant’s address:

  

[Address]

Tax Identification No.:

  

[Social Security #]

Shares:

  

                     shares of Common Stock

Per Share Exercise Price:

  

$              per share

Vesting Date:

                                            

Grant Date:

                                            

Expiration Date:

                                            

Summary Vesting Schedule:

   See Section 2(a) for details.

 

CURIS, INC.    Date:                                                   
By:                                                                    
[                    ], Vice President     

 

The undersigned hereby accepts the foregoing option and agrees to the terms and
conditions thereof. The undersigned hereby acknowledges receipt of a copy of the
Company’s 2000 Stock Incentive Plan.

 

Date:                                                 
                                                                               
                                   Participant Signature

 

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Terms and Conditions of Nonstatutory Stock Option Agreement

 

1. Grant of Option.

 

This agreement evidences the grant by Curis, Inc., a Delaware corporation (the
“Company”), on the Grant Date to the Participant, of an option to purchase, in
whole or in part, on the terms provided herein and in the Company’s 2000 Stock
Incentive Plan (the “Plan”), the Shares of common stock, $0.01 par value per
share, of the Company (“Common Stock”) at the Per Share Exercise Price. Unless
earlier terminated, this option shall expire on the Expiration Date (or the
“Final Exercise Date”).

 

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.

 

This option will vest as follows: [            ]. The shares subject to the
portion of this option that is not yet exercisable are referred to herein as
“Unvested Shares,” and the shares subject to the portion of this option that has
become exercisable are referred to herein as “Vested Shares.” 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 or the Plan.

 

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3. Exercise of Option.

 

  a.   Form of Exercise. Each election to exercise this option shall be in
writing, signed by the Participant or by any other form of notice (including
electronic), and received by the Company at its principal office, accompanied by
this agreement, and payment in full in the manner provided in the Plan,
including, without limitation, the manner provided in Section 5(f)(4) of the
Plan, or as otherwise authorized by the Company. In the event that the
Participant elects to pay for Shares by delivery of a promissory note, such note
will be fully-recourse to the Participant and otherwise on such terms and
conditions as the Board may determine. 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 or she exercises this option, is, and has been at
all times since the Grant Date, an employee, officer or director of, or
consultant or advisor to, the Company or any parent or subsidiary of the Company
as defined in Section 424(e) or (f) of the Code (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 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 or she 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, provided that this option shall be exercisable only to the extent
that this option was exercisable by the Participant on the date of his or her
death or disability, and further provided that this option shall not be
exercisable after the Final Exercise Date.

 

  e.   Discharge for Cause. If the Participant, prior to the Final Exercise
Date, is discharged by the Company for “cause” (as defined below), the right to
exercise this option shall terminate immediately upon the effective date of such
discharge. “Cause” shall mean willful misconduct by the Participant or willful
failure by the Participant to perform his or her responsibilities to the Company
(including, without limitation, breach by the Participant of any provision of
any employment, consulting, advisory, nondisclosure, non-competition or other
similar agreement between the Participant and the Company), as determined by the
Company, which determination shall be conclusive. The Participant shall be
considered to have been discharged for “Cause” if the Company determines, within
30 days after the Participant’s resignation, that discharge for cause was
warranted.

 

4. Delivery of Shares; Compliance With Security Laws, Etc.

 

  a.   General. The Company shall, upon payment of the option price for the
number of shares purchased and paid for, make prompt delivery of such shares to
the Participant, provided that if any law or regulation requires the Company to
take any action with respect to such shares before the issuance thereof, then
the date of delivery of such shares shall be extended for the period necessary
to complete such action.

 

  b.   Listing, Qualification, Etc. This option shall be subject to the
requirement that if, at any time, counsel to the Company shall determine that
the listing, registration or qualification of the shares subject hereto upon any
securities exchange or under any state or federal law, or the consent or
approval of any governmental or regulatory body, or that the disclosure of
non-public information or the satisfaction of any other condition is necessary
as a condition of, or in connection with, the issuance or purchase of shares
hereunder, this option may not be exercised, in whole or in part, unless such
listing, registration, qualification, consent or approval, disclosure or
satisfaction of such other condition shall have been effected or obtained on
terms acceptable to the Board. Nothing herein shall be deemed to require the
Company to apply for, effect or obtain such listing, registration,
qualification, or disclosure, or to satisfy such other condition.

 

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 option. The Company may, to
the extent permitted by law, deduct any such required tax obligations from any
payment of any kind otherwise due to the Participant.

 

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6. Nontransferability of Option.

 

Except as herein expressly provided, 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. Notwithstanding the foregoing, the
Participant may transfer this option (i) to a spouse, lineal ancestor or
descendant, brother or sister of such Participant and to any trust for the
benefit of such persons and (ii) as gifts to charitable organizations within the
meaning of Section 501(c)(3) of the Code, so long as any such transferee agrees
to be bound by the terms of this agreement.

 

7. Provisions of the Plan.

 

This option is subject to the provisions of the Plan, a copy of which is
furnished to the Participant with this option.

 

8. Adjustment Provisions.

 

  a.   General. If, through, or as a result of, any merger, consolidation, sale
of all or substantially all of the assets of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other similar transaction, (i) the outstanding shares of Common Stock
are increased or decreased or are exchanged for a different number or kind of
shares or other securities of the Company, or (ii) additional shares or new or
different shares or other securities of the Company or other non-cash assets are
distributed with respect to such shares of Common Stock or other securities, the
Participant shall, with respect to this option or any unexercised portion
hereof, be entitled to the rights and benefits, and be subject to the
limitations, set forth in Section 8 of the Plan.

 

  b.   Board Authority to Make Adjustments. Any adjustments under this Section 8
will be made by the Board, whose determination as to what adjustments, if any,
will be made and the extent thereof will be final, binding and conclusive. No
fractional shares will be issued pursuant to this option on account of any such
adjustments.

 

9. No Special Employment Rights.

 

Nothing contained in the Plan or this option shall be construed or deemed by any
person under any circumstances to bind the Company to continue the employment or
consulting relationship, as the case may be, of the Participant for the period
within which this option may be exercised.

 

10. Rights as a Shareholder.

 

The Participant shall have no rights as a shareholder with respect to any shares
which may be purchased by exercise of this option (including, without
limitation, any rights to receive dividends or non-cash distributions with
respect to such shares) unless and until a certificate representing such shares
is duly issued and delivered to the Participant. No adjustment shall be made for
dividends or other rights for which the record date is prior to the date such
stock certificate is issued.

 

  11.   Notices. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States Post Office, by registered or certified mail with
postage and fees prepaid, addressed to the other party at the following
addresses, or such other addresses as a party may designate by ten days’ advance
written notice to the other party hereto:

 

    Participant:    At the address shown on the first page.    

Company:

   Curis, Inc.               61 Moulton Street               Cambridge, MA 02138
              Attention:             Michael P. Gray         

Vice President, Finance and CFO

 

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12. Miscellaneous.

 

  a.   Except as provided herein, this option may not be amended or otherwise
modified unless evidenced in writing and signed by the Company and the
Participant.

 

  b.   This option shall be governed by and construed in accordance with the
laws of the State of Delaware.

 

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