Form of Nonstatutory Stock Option Agreement under the 1998 Stock Option Plan



 Exhibit 10.21 
  
 ACHILLION PHARMACEUTICALS, INC 
  
 Nonstatutory Stock Option Agreement 
 Granted
Under 1998 Stock Option Plan 
  
 1. Grant
of Option. 
  
 This agreement evidences the grant by
Achillion Pharmaceuticals, Inc., a Delaware corporation (the “Company”), on                     , (the “Grant Date”) to
                    , a consultant to the Company (the “Participant”), of an option to purchase, in whole or in part, on the terms
provided herein and in the Company’s 1998 Stock Option Plan (the “Plan”), a total of X             shares (the “Shares”) of common stock, $.001 par
value per share, of the Company (“Common Stock”) at $            per Share. Unless earlier terminated, this option shall expire on
                    (the “Final Exercise Date”). For purposes of this Agreement, the “Vesting Commencement Date” shall be
                    . 
  
 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. 
  
 (a) Option Exercise Schedule. This option will become exercisable (“vest”) as to 25% of the original number of Shares on the first anniversary of the Grant Date and as to an additional 6.25% of the original number of Shares
at the end of each successive three-month period following the first vesting 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 or the Plan. 
  
 (b) Early Exercise Alternative. Notwithstanding the exercisability
schedule set forth in paragraph 2(a), the Participant may elect to exercise this option as to the unvested Shares (in addition to the vested Shares) if simultaneously with such exercise the Participant enters into a Stock Restriction Agreement with
the Company (the “Stock Restriction Agreement”). The Stock Restriction Agreement provides that the unvested Shares shall be subject to a right of repurchase in favor of the Company in the event that the Participant ceases to be employed by
the Company. 
  
 3. Exercise of Option.

  
 (a) Form of Exercise. Each election to exercise this
option shall be in writing, signed by the Participant, and received by the Company at its principal office, accompanied by this agreement, and payment in full in the manner provided in the Plan. 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 determined by the Board of Directors, or is otherwise attributable to a breach, as determined by the Board, by the Participant of an employment agreement with the Company (as
defined below), the right to exercise this option shall terminate immediately upon the effective date of such discharge. For purposes of this Agreement “Cause” shall include 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. Right of First Refusal. 
  
 (a) If the Participant proposes to sell, assign, transfer, pledge, hypothecate or otherwise dispose of, by operation of law or otherwise (collectively, “transfer”) any Shares acquired upon exercise of this option, then the
Participant shall first give written notice of the 
  

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 proposed transfer (the “Transfer Notice”) to the Company. The Transfer Notice shall name the proposed
transferee and state the number of such Shares the Participant proposes to transfer (the “Offered Shares”), the price per share and all other material terms and conditions of the transfer. 
  
 (b) For 30 days following its receipt of such Transfer Notice, the Company
shall have the option to purchase all (or any portion) of the Offered Shares at the price and upon the terms set forth in the Transfer Notice. In the event the Company elects to purchase all (or any portion) of the Offered Shares, it shall give
written notice of such election to the Participant within such 30-day period. Within 10 days after his receipt of such notice, the Participant shall tender to the Company at its principal offices the certificate or certificates representing the
Offered Shares, duly endorsed in blank by the Participant or with duly endorsed stock powers attached thereto, all in a form suitable for transfer of the Offered Shares to the Company. Promptly following receipt of such certificate or certificates,
the Company shall deliver or mail to the Participant a check in payment of the purchase price for the Offered Shares; provided that if the terms of payment set forth in the Transfer Notice were other than cash against delivery, the
Company may pay for the Offered Shares on the same terms and conditions as were set forth in the Transfer Notice; and provided further that any delay in making such payment shall not invalidate the Company’s exercise of its option
to purchase the Offered Shares. 
  
 (c) If the Company does not
elect to acquire all of the Offered Shares, the Participant may, within the 30-day period following the expiration of the option granted to the Company under subsection (b) above, transfer any remaining Offered Shares to the proposed
transferee, provided that such transfer shall not be on terms and conditions more favorable to the transferee than those contained in the Transfer Notice. Notwithstanding any of the above, all Offered Shares transferred pursuant to
this Section 4 shall remain subject to the right of first refusal set forth in this Section 4 and such transferee shall, as a condition to such transfer, deliver to the Company a written instrument confirming that such transferee shall be
bound by all of the terms and conditions of this Section 4. 
  
 (d) After the time at which the Offered Shares are required to be delivered to the Company for transfer to the Company pursuant to subsection (b) above, the Company shall not pay any dividend to the Participant on account of such
Offered Shares or permit the Participant to exercise any of the privileges or rights of a stockholder with respect to such Offered Shares, but shall, in so far as permitted by law, treat the Company as the owner of such Offered Shares. 

 
 (e) The following transactions shall be exempt from the provisions of this
Section 4: 
  
 (1) any transfer of Shares to or for the
benefit of any spouse, child or grandchild of the Participant, or to a trust for their benefit; 
  
 (2) any transfer pursuant to an effective registration statement filed by the Company under the Securities Act of 1933, as amended (the “Securities
Act”); and 
  
 (3) the sale of all or substantially all of
the shares of capital stock of the Company (including pursuant to a merger or consolidation); 
  
 provided, however, that in the case of a transfer pursuant to clause (1) above, such Shares shall remain subject to the right of first refusal set forth in this Section 4 and such transferee
shall, as a condition to such transfer, deliver to the Company a written instrument confirming that such transferee shall be bound by all of the terms and conditions of this Section 4. 
  

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 (f) The Company may assign its rights to purchase Offered Shares in any particular transaction under this
Section 4 to one or more persons or entities. 
  
 (g) The
provisions of this Section 4 shall terminate upon the earlier of the following events: 
  
 (1) the closing of the sale of shares of Common Stock in an underwritten public offering pursuant to an effective registration statement filed by the Company under the Securities Act; or 
  
 (2) the sale of all or substantially all of the capital stock, assets or
business of the Company, by merger, consolidation, sale of assets or otherwise (other than a merger or consolidation in which all or substantially all of the individuals and entities who were beneficial owners of the Common Stock immediately prior
to such transaction beneficially own, directly or indirectly, more than 75% of the outstanding securities entitled to vote generally in the election of directors of the resulting, surviving or acquiring corporation in such transaction). 

 
 (h) The Company shall not be required (a) to transfer on its books
any of the Shares which shall have been sold or transferred in violation of any of the provisions set forth in this Section 4, or (b) to treat as owner of such Shares or to pay dividends to any transferee to whom any such Shares shall have
been so sold or transferred. 
  
 5. Agreement
in Connection with Public Offering. 
  
 The Participant
agrees, in connection with the initial underwritten public offering of the Company’s securities pursuant to a registration statement under the Securities Act, (i) not to sell, make short sale of, loan, grant any options for the purchase
of, or otherwise dispose of any shares of Common Stock held by the Participant (other than those shares included in the offering) without the prior written consent of the Company or the underwriters managing such initial underwritten public offering
of the Company’s securities for a period of 180 days from the effective date of such registration statement, 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. 
  
 6.
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.

  
 7. Nontransferability of Option.

  
 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.

  

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 8. 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. 
  

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 IN WITNESS WHEREOF, the Company has caused this option to be executed under its corporate seal by its
duly authorized officer. This option shall take effect as a sealed instrument. 
  

			
	 ACHILLION PHARMACEUTICALS, INC.

		
	 By:
	 	 
	 Name:
	 	Michael D. Kishbauch
	 Title:
	 	President and Chief Executive Officer


  

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 PARTICIPANT’S ACCEPTANCE 
  
 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 1998 Stock Option Plan. 
  

			
	 PARTICIPANT:

	
	 
		
	 Address:
	 	 
		
	 	 	 


  

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